Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-10713

March 31, 1915

THE MANILA RAILROAD COMPANY and THE BOARD OF PUBLIC UTILITY

COMMISSIONERS, petitioners,
vs.
THE HONORABLE ISIDRO PAREDES, judge of the Fourteenth Judicial District, THE
TAYABAS LAND COMPANY, THE TAYABAS LAND COMPANY & LIM, LEONCIO SEA, and
ESTEBAN CATALLA, respondents.
William A. Kincaid and Thomas L. Hartigan for petitioner Manila Railroad Co.
Attorney-General Avancea for petitioner Board of Public Utility Commissioners.
Alfredo Chicote and Agustin Alvarez for respondents.
PER CURIAM:
With the expectation of writing later a more extended opinion sustaining the judgment
about to be pronounced, the court for the present declares that if finds the demurrer to
the complaint to be unfounded and the motion to dissolve the injunction without basis.
The basis the decision is that the court had no authority to increase the amount of the
deposit required of the railroad company and its attempt to do so was in excess of its
jurisdiction.
The demurrer is overruled and the defendants are given ten days within which to
answer. On failure to answer, the plaintiffs will entitled to the relief demanded in the
complaint.
The motion to dissolve the preliminary injunction is overruled .So ordered.
Arellano,

C.J.,

Johnson,

Carson,

Moreland,

and

Trent,

JJ.,

concur.

DECEMBER 17, 1915.

CARSON, J.:p
These are original proceedings in this court, wherein the applicants, The Manila Railroad
Company and the Board of Public Utility Commissioners, pray for the issuance of a writ
of certiorari to the Honorable Isidro Paredes, judge of the fourteenth Judicial District,

requiring him to certify to this court the record of certain condemnation proceedings
pending before him. The applicant allege that in the course of those proceedings the
respondent judge issued an order directing the Railroad Company to increase an
amount of a certain deposit, therefore made by the company to secure final payment of
the value of certain lands which it sought to have condemned for its use, from
P8,971.72 to P1,000,000. They further allege that the order in question is illegal, null
and void because, as they insist, the respondent judge who issued it was wholly without
jurisdiction so to do; and also because, as they contend, even if it were admitted that
the respondent judge had jurisdiction to issue an order increasing the amount of the
deposit theretofore made in those proceedings, the issuance of an order directing its
increase from P8,971.72 to P1,000,000 was, under all the circumstances of the case, a
manifest abuse of judicial discretion. Applicants pray that on a review of the whole
record this court declare the order in question null, void and without effect.
Various parties claiming to be owners of the greater part or all of the land involved in
the condemnation proceedings in the court below, and at whose instance the order in
question was issued, are joined as respondents with the respondent judge in
accordance with the statutory requirements in cases of this kind. All the respondents
are represented by the same counsel, and the only responses to the order of this court
to show cause why the writ should not be issued are those filed by the respondent
judge, the Tayabas Land Company, and the Tayabas Land Co. & Lim, (hereinafter
referred to as land companies) all the other respondents contenting themselves by
appearing by counsel and formally adhering to the questions made by the land
companies, and making them their own.
In response to an order of this court to show cause why the writ should not issue, the
respondents demurred to the complaint; and thereafter, the demurrer having been
overruled, the land companies filed an extended answer, in which they undertook to
show that in issuing the order in question the respondent judge was acting within the
jurisdiction conferred upon him by law, and that there was no abuse of his discretion in
its issuance. In support of their contentions, these respondents set forth in their answer
what purports to be a full and complete history of all the proceedings had in the court
below, supported by extensive extracts from the record of those proceedings. The
respondent judge also filed an answer in which he sets forth the grounds upon which he
insists that he acted within his jurisdiction in the issuance of the order, and in support of
his contention sets forth a statement of facts, which, so far as it goes, is substantially
identical with the statement of facts relied upon by the land companies.
A pleading, purporting on its face to be a demurrer to the answer of the respondents
having been filed by counsel for the plaintiff, the case was set for argument upon the
pleadings as they then stood. At the hearing, it was agreed in open court that the
pleading purporting to be a demurrer to the answers should be treated as a prayer for
judgment on the pleadings, and after extended oral argument the case was finally
submitted for judgment.

Without stopping to consider or comment upon any contention which might be made as
to the form of the pleadings, we are of opinion that the facts disclosed by the pleadings
permit us to go directly to the merits of the cause, since we are satisfied that, accepting
as true all the facts well pleaded in the respective answers of the respondents, these
facts, taken together with the uncontroverted facts set forth in the complaint, fully
sustain the contention of the applicants that the order complained of was issued by the
respondent judge without jurisdiction in the premises, and that it is therefore null, void
and no effect.
Sometime prior to the first of April, 1913, the Railroad Company entered upon and took
possession of a long, narrow strip of land, running between the municipalities of
Pagbilao and Lopez in the Province of Tayabas, for use as a roadbed for a railroad which
it was engaged in building under its charter. The Railroad Company claims that it took
possession of this strip of land with the consent of the various owners and occupants
claiming title thereto, and with the understanding that it would pay the owners of all
the lands thus taken a price to be agreed upon thereafter, or to be fixed in
condemnation proceedings; and that, not having been able to agree upon a price with
the owners of the land, it was later compelled to institute proceedings for the
condemnation of the land thus taken.
However this may be, the Railway Company, on the first day of April, 1913, instituted
expropriation proceedings looking to the condemnation of all these lands under and by
virtue of the authority conferred upon it by is charter and under the laws applicable to
such proceedings. On the fourth day of April, 1913, the Honorable Herbert Gale, the
judge then presiding in the court wherein these proceedings were pending, entered an
order granting to the Railroad Company the right of possession of all these lands, upon
the filing of a deposit in an amount certified by the provincial treasurer to be equal to
the average assessed value of all these lands, which, in the language of the order itself
was the value of the lands, "hereby provisionally ascertained and fixed." On the
eleventh of April, 1913, the Railroad Company deposited the sum of P8,971.72, the
assessed value of the lands in question as shown by the certificate of the provincial
treasurer. On the of April, 1913, Judge Cui, then presiding in the court wherein the
proceedings were pending, issued a formal writ, directing the sheriff of the court to put
the Railroad Company in possession of all the lands described in the applications in
expropriation proceedings filed by the Railroad Company.
Thereafter, the land companies to be the owners and successors in interest of the
original owners of most of the lands in question, entered their appearance as
defendants in the expropriation proceedings, and acting jointly with the various
claimants whose lands had not been acquired by them, procured the appointment of
commissioners for the valuation of these lands. On the ninth of January, 1915, the land
companies and the other claimants to these lands moved the court to increase the
amount of the deposit from P8,971.72, the amount originally fixed, to P1,000,000. On
the 18th of February, 1915, the respondent judge, then presiding in the court wherein
the proceedings were pending, after hearing the parties and considering the evidence
submitted at the hearing, and notwithstanding objection duly interposed on the ground

of his lack of jurisdiction to entertain the motion, issued an order directing the Railroad
Company to increase its deposit to P1,000,000.
It is this order which the applicants now seek to have this court declare null an void in
original certiorariproceedings in this court.
On behalf of the applicants for the writ, it is contended that not only was the
respondent judge wholly without jurisdiction to issue this order but that even if it were
admitted that he had such jurisdiction, the amount fixed by him is so far in excess of the
true value of the land, that this court should declare that in fixing this amount, he
manifestly abused his judicial discretion in the premises. On behalf of the respondents,
it is contended that, in issuing the order in question the trial judge in no wise exceeded
the jurisdiction conferred upon him by statute; and further that the amount originally
fixed for the deposit was utterly inadequate, and was so far short of the true value of
the lands in question, as to justify this court and the court below in holding that there
had been an abuse of discretion in its issuance; and that the value of the land as fixed by
the respondent judge is well within the true value as disclosed by the evidence
submitted to him in the court below.
The admitted facts as disclosed by the pleadings are wholly insufficient to sustain a
finding on the various contentions of the parties as to the true value of the land; and if it
were necessary for us to make findings in this regard and to rule upon applicants'
contentions as to the alleged abuse of discretion in the court below in fixing the amount
of the deposit to be filed by the Railroad Company, it would be incumbent on us to give
the parties an opportunity to submit evidence in support of their respective
contentions. Holding as we do, however, that the respondent judge was wholly without
jurisdiction to enter the order complained of, or any order whatever directing an
increase in the amount of the deposit which had been made in conformity with a lawful
order theretofore entered in the proceedings, it is not necessary for us to consider any
disputed question of fact the admitted facts as disclosed by the proceedings being
sufficient to sustain the prayer of the applicants for the issuance of the writ on the
ground of a total lack of jurisdiction in the respondent judge.
It is said that the jurisdiction of the respondent judge to issue the order complained of is
recognized in the following paragraph of section 1 of Act No. 1592.
When condemnation proceedings are brought by any railway corporation, in
any court of competent jurisdiction in the Philippine Islands, for the purpose of
the expropriation of land for the proper corporate use of such railway
corporation, said corporation shall have the right to enter immediately upon
the possession of the land involved, after and upon the deposit by it with the
Treasurer of the Philippine Islands of the value of the land, in money, as
provisionally and promptly ascertained and fixed by the court having
jurisdiction of the proceedings, said sum to be held by the Treasurer subject to
the orders and final disposition of the court: Provided, however, That the court
may authorize the deposit with the Insular Treasurer of a certificate of deposit

of any depository of the Government of the Philippine Islands in lieu of cash,

such certificate to be payable to the Insular Treasurer on demand in the
amount directed by the court to be deposited. The certificate and the moneys
represented thereby shall be subject to the orders and final disposition of the
court. And in case has already been commenced on any land and the money
with the Insular Treasurer at the date of the passage of this Act, the said money
may, upon proper order of the court, be withdrawn from the Treasury by the
railway corporation which deposited the same, and a certificate of deposit, as
above described, may be deposited in lieu thereof. And the court is
empowered and directed by appropriate order and writ if necessary, to place
the railway corporation in possession of the land, upon the making of the
deposit.
We are of opinion, however, that while this section of the Act clearly empowers the
court wherein expropriation proceedings are pending to fix the amount of the required
deposit and to give possession of the land upon the making of the deposit; it is clearly
denies, by necessary implication, the power of the court to change or modify the
amount thus fixed, or to disturb the possession of the railway, after the deposit thus
fixed has actually been made by the railway corporation.
The statute expressly provides that the corporation "shall have the right to enter
immediately upon the possession of the land involved" upon the making of the
prescribed deposit. The statutory right of possession thus secured to the railway
corporation is an unqualified right of possession during the pendency of the
expropriation proceedings; but if it were within the power of the court to change or
modify the amount of the deposit as it sees fit, at any time throughout the proceedings,
the statutory right of possession thus guaranteed and expressly conferred upon the
railroad company might well become illusory. If the issuance of an order directing the
increase of the amount of the deposit does not affect the railroad company's right of
possession, the entry of such an order would be a vain and meaningless thing. If it does
affect the right of possession of the railway corporation, then it is in direct conflict with
the express terms of the statute securing a statutory right to enter upon, and maintain
possession during the pendency of the proceedings.
It will be observed, furthermore, that the statute expressly empowers and directs the
court, "upon the making of the deposit," to place the railway corporation in possession
of the land; and that there is nothing in the statute which either expressly or by
implication reserves to the court the power to undo its act, or to deprive the Railroad
Company of possession, in the event that, pending the proceedings, the judge should
become convinced that the amount of the deposit is insufficient.
Respondents insist that the power of the court to change or modify the amount of the
deposit is expressly recognized in the clause of the above-cited statute which provides
that after the deposit has been made "the certificate and the moneys represented
thereby shall be subject to the order and final deposition of the court." We are of
opinion, however, that this clause of the statute merely provides for the placing of the

control and final disposition of the moneys actually deposited in the hands of the court,
after they have been deposited. It has no relation whatever to the exercise of
jurisdiction to fix the amount of the deposit which is conferred upon the court
elsewhere in the statute.
It is also contended that the power of the court to modify and amend the order in
question is expressly recognized in paragraph 7 of section 11 of the Code of Civil
Procedure (Act No. 190). That section provides:
Every court shall have power:
xxx

xxx

xxx

7. To amend and control its process and orders so as to make them

conformable to law and justice.
This provision of the code was borrowed from section 128 of the California Code, and in
Kaufman vs. Shain (111 Cal., 16), the supreme court of the State of California in
commenting upon its terms and limitations held as follows:
Every court of record has the inherent right to cause its acts and proceedings to
be correctly set forth in its records; and whenever it is properly brought to the
knowledge of the court that a record made by the clerk does not correctly
show that the order or direction which in fact made by the court at the time it
was given, the court has authority to correct its record in accordance with the
facts, but it cannot, under the form of an amendment of its record, correct a
judicial error, or make of record an order or judgment that was never in fact
given.
But it is urged that aside from any express grant of power by statute, every court has
inherent power over the proceedings pending before it, by virtue of which it may amend
its judgments and orders so long as they are still pending before it, when it has become
convinced that such judgments are erroneous either in matter of law or of fact. It is said
that such power, in relation more especially to interlocutory orders, is universally
exercised and recognized in everyday practice in every court in the Philippines.
The question of the power of the courts in this jurisdiction to change or modify
judgments in matters of substance, and to correct errors of law or of fact into which
they may have fallen in rendering the original judgment, is discussed at length in
relation more especially to final judgments in the case of Arnedo vs. Llorente and
Liongson(18 Phil. Rep., 257).
In that case we held that Courts of First Instance in this jurisdiction have plenary power
over judgments, orders and decrees entered by them in proceedings pending before
them, until such judgments, orders and decrees have become final in the sense that the

party in whose favor they are rendered is entitled, as of right, to have execution
thereon; but that thereafter they lose control of such judgments, orders and decrees,
and have no inherent power to annul or to change or to modify them in matters of
substance, either of law or of fact. Relying upon the doctrine thus announced, by virtue
of which a Court of First Instance is clothed with power to render a particular judgment,
discloses, either in express terms or by necessary implication, the legislative intent that
the judgment should be executed forthwith upon its entry, the court loses its control
over such judgment immediately upon its entry, and has no power to annul, change or
modify it hereafter.
From what we said in that case, we think there can be no doubt that, speaking
generally, Courts of First Instance have plenary control over all interlocutory judgments,
orders or decrees entered by them pending the final determination of the proceedings;
and indeed, it is true, as was said by counsel for respondents in oral argument, that it is
everyday practice for these courts to annul, change or modify such interlocutory
judgments, at any time prior to the final determination of the proceedings in which they
are issued. But in accordance with the reasoning on which the former opinion is based,
it cannot be doubted that where the statute by virtue of which a particular judgment,
order or decree is entered in the course of proceedings pending in a Court of First
Instance, expressly or by necessary implication prescribes that one of the parties shall
have the right to have the judgment, order or decree executed upon compliance with
certain prescribed conditions, the Court of First Instance loses plenary control over such
judgment, order or decree from and after the time when such prescribed conditions
have been duly complied with.
Act No. 1592 expressly provides that railway corporations shall have the right to enter
upon possession of the lands involved in condemnation proceedings had under the Act
immediately upon the filing of a deposit fixed by order of the court; and further, that, if
necessary, they shall have the right to a writ of possession pending the proceedings. In
other words, the statute provides that they may have execution as of right upon the
order for possession, immediately upon the making of the prescribed deposit. It follows,
under the reasoning of the case above referred to, that immediately upon the making of
a deposit fixed by order of the court, the court loses plenary control over the order
fixing or modify it in matters of substance pending the course of the condemnation
proceedings.
A contrary ruling would tend directed to defeat the manifest intention of the legislator
to provide a speedy and summary procedure whereby the peaceable possession of
lands necessary for the construction of railroads may be secured without the delays
incident to prolonged and vexatious litigations touching the ownership and value of
such lands, which should not be permitted to delay the progress of the work.
It is contended, however, in behalf of the respondents, that even if it be admitted that
Courts of First Instance have no power to alter or amend orders fixing the amount of the
deposit to be filed by railway corporations under the provisions of Act No. 1592,
nevertheless, in the case now under consideration, the order entered by the respondent

judge, although in form an order amending the original order fixing the amount of the
deposit, should be held to be in truth and in fact an original order entered under
authority of the Act this because, as it is said, the original order was invalid, void and
of legal effect.
It is urged that the original order should be held to be invalid because (1) it was issued
without giving the owners of the land involved in the proceedings an opportunity to be
heard, and because, (2) it fixed the deposit in an amount so palpably and grossly
inadequate, as to justify a holding that there was a manifest abuse of discretion on the
part of the judge who entered it.
As to the contention of respondents based on the failure of the judge who entered the
order to give the claimants to the land an opportunity to be heard, it should be
sufficient to point to the provisions of the Act (No. 1592) itself. The statute directs that,
at the very outset, "when condemnation proceedings are brought by any railway
corporation" the amount of the deposit is to be "provisionally and promptly ascertained
and fixed by the court." It very clear that it was not the intention of the legislator that
before the order fixing the amount of the deposit could lawfully be entered the court
should finally and definitely determine who are the true owners of the land; and after
doing so, give them a hearing as to its value, and assess the true value of the land
accordingly. In effect, that would amount to a denial of the right of possession of the
lands involved until the conclusion of the proceedings, when there would be no need for
the filing of the deposit. Of course, there is nothing in the statute which denies the right
of the judge to hear all persons claiming an interest in the land, and courts should
ordinarily give all such persons an opportunity to be heard if that be practicable, and will
cause no delay in the prompt and provisional ascertainment of the value of the land. But
the scope and extent of the inquiry is left wholly in the discretion of the court, and a
failure to hear the owners and claimants of the land, who may or may not be known at
the time of the entry of the order, in no wise affects the validity of the order. From such
sources of information as may be available at the time "when condemnation
proceedings are brought," it is the duty oft he judge of the court wherein the
proceedings are brought, promptly and provisionally to ascertain the value of the land
involved therein; and when he has satisfied himself in this regard, it is his duty to enter
the order for the prescribed deposit, even though he may be well aware that full inquiry
his estimate may prove to be less than or in excess of the true value of the land, and
even though the claimants and owners have not been heard.
It appears from the pleadings that the different strips of land involved in the
proceedings now under consideration were made up of small parcels which, prior to the
entry of the Railroad Company, belonged to scores and perhaps hundreds of different
owners, and it would seem that any attempt by the court at the outset of the
proceedings to bring in all the possible claimants, would have been attended with
intolerable delay; and be this as it may, it was clearly within the sound discretion of the
trial judge to determine provisionally the value of the land, for the purpose of fixing the
amount of the deposit, without delaying the proceedings in order to give all or any of
these claimants an opportunity to be heard.

In thus ruling, we are not unmindful of the perfect and unquestioned right of every
owner of lands to be heard in any judicial proceeding wherein his rights of ownership
are adjudicated. The right to be heard is inherent in the very nature of such
proceedings. But the right of the Railroad Company to acquire possession and
ownership of the lands in question the compensation of the owners, has never been
challenged; and the provisional and prompt ascertainment of the value of the lands
under the terms of Act No. 1592 upon which the order for possession was based was
not a proceeding for the ascertainment of title to the land or of its true value for the
purpose of determining the amount of compensation to which the owners would be
entitled upon the condemnation of their lands. The sole purpose and object of that
proceeding was to ascertain the amount of the deposit which the state required the
railway corporation to make in a case wherein it invoked the right of eminent domain,
and desired to enter into possession of the land before the title and the amount of
compensation to be paid the owners of the land had been judicially determined.
The question then is not whether the state has power to authorize the taking of lands in
condemnation proceedings and to adjudicate the rights of claimants of ownership to
just compensation therefor, without giving the parties an opportunity to be heard. The
right of the claimants to appear and to be heard on their claims for compensation is not
and cannot be questioned under the statute. The real question is whether the state may
prescribed a procedure by virtue of which a railway corporation may secure the
possession of the lands it seeks to condemn, pending the condemnation proceedings,
without first paying the owners just compensation therefor, on condition that it deposit
with the Treasurer of the Philippine Islands the value of the land, in money, provisionally
ascertained by the court without giving the owners of the land an opportunity to be
heard as to the amount of the prescribed deposit.
The validity and constitutionality of legislative enactments authorizing taking immediate
possession of lands involved in condemnation proceedings, without first making
compensation therefor, has frequently been challenged. But "According to the weight of
authority if the constitution or statutes do not expressly require it, actual payment or
tender before taking is unnecessary, and it will be sufficient if a certain and adequate
remedy is provided by which the owner can obtain compensation without any
unreasonable delay. According to this view the usual constitutional provision that
private property shall not be taken for a public use without just compensation does not
require that compensation shall be actually paid in advance of the occupancy of the land
taken, and does not prohibit the legislature from authorizing a taking in advance of
payment. (15 Cyc., 778 and cases there cited.)
Lewis in his work on Eminent Domain, section 678, citing a long list of cases in support
of the text, says that:
As an original question, it seems clear that the proper interpretation of the constitution
requires that the owner should receive his just compensation before entry upon his
property. When an individual is ousted from possession under a claim of right, his
property is taken from him, and, if he has not been paid an equivalent in money it is

taken from him without compensation. Some of the cases so hold. But in most States it
is held that the making of compensation need not precede an entry upon the property,
provided some definite provision is made whereby the owner will certainly obtain
compensation.
Some courts have gone so far as to hold that the property may be occupied
before compensation is made, provided the statute under which it is taken
provides a mode for ascertaining the compensation, ands requires its payment
by the party taking, although the taking may be by an individual or private
corporation.
In this jurisdiction the constitutional prohibition against the taking of property without
just compensation contains no express provision requiring pre-payment; and following
the weight of authority, we are of opinion that there is no prohibition against the
legislative enactment of a form of procedure whereby immediate possession of lands
involved in expropriation proceedings may be taken, provided always that due provision
is made to secure the prompt adjudication and payment of just compensation to the
owners. We believe that such provision is made for the adjudication and payment of
just compensation to the owners of the lands affected by the condemnation
proceedings authorized under Act No. 1592; and we conclude that these legislative
provisions cannot be successfully attacked on the ground that they contravene the
prohibitions against the taking of property without due process of law or without just
compensation.
It may be, and doubtless is true that the prescribed procedure, like all man-made
institutions, partakes of the imperfections and human weaknesses of its creator, so that
it cannot be said to furnish an infallible mode whereby just compensation will be
secured to the owners of lands taken in expropriation proceedings. But having in mind
that the value of the land, in money, as provisionally ascertained by an impartial judge,
must be deposited in the Insular Treasurer before the order for possession can be put
into effect; and that the right of the owners to recover just compensation is not limited
or restricted to the amount of the deposit should it prove insufficient in a particular
case; and further that the order for possession cannot issue until the condemnation
proceedings are actually instituted; we are satisfied that it sufficiently and satisfactorily
secures the end in view, that is to say, "the prompt adjudication and payment of just
compensation without reasonable delay."
In the very nature of things, the whole procedure looking to the authorization of the
taking possession of the lands in advance of payment might, and in many cases would
degenerate into a meaningless farce, if a lawful order granting immediate possession
could not issue without first giving the owners an opportunity to be heard as to the
value of their lands and the amount of the deposit which should be required of the
railway corporation before taking possession. In contested cases this would involve the
adjudication in the first place of the title to the lands involved; and after title has been
adjudicated the right of the true owner to be heard would necessarily involve to call
witnesses in support of his claim as to the value of the land and the amount of the

deposit. As we have already indicated, all this would defeat the very purpose which the
whole procedure is intended to secure; and would substantially amount to the
postponement of the right of entry on the lands until a stage of the proceedings has
been reached at which final judgment might well be entered definitely disposing of the
case.

Under such circumstances it may well be doubted that any court, even
in certiorari proceedings, would be authorized to annul or set aside the order fixing the
amount of the deposit.

Having concluded that the constitutional prohibitions do not deny to the legislature the
right to authorize the taking of land in expropriation proceedings without pre-payment
of just compensation, if due provision is made for the adjudication and payment of just
compensation without unreasonable delay; and having arrived at the further conclusion
that the deposit of the value of the lands involved, in money, as promptly and
provisionally ascertained by an impartial judge, in the course of expropriation
proceedings already instituted, sufficiently and satisfactorily secures the end in view,
even though the owners of the land are not given an opportunity to be heard as to the
amount of the deposit; we conclude that these statutory provisions do not deny any
right of the owners of such lands guaranteed in the Constitution or the Philippine Bill of
Rights; and that such owners of lands are not entitled to demand the right to be heard,
as an indispensable requisite to the validity of the "prompt and provisional"
determination of the amount of deposits made under authority of the provisions of
section 1 of Act No. 1592.

The principle is uncontroverted that certiorari does not lie tot review maters and
proceedings of inferior tribunals, boards, officers, etc., in the proper exercise of
discretion confided to them; and that, in order to obtain this review, it must be clearly
shown that there has been an unwarrantable and illegal exercise of such discretion, to
the substantial injury of the party complaining. (Enc. Pl. and Pr., vol. 4, p. 81.)

We come now to consider the contentions of counsel based upon their allegations that
the value of the land as provisionally determined in the original order fixing the amount
of the deposit was so grossly inadequate, that the respondent judge, treating it as an
order entered with manifest abuse of the discretion conferred upon the judge who
made it, was justified and empowered either to declare it null, void and without effect,
or wholly to disregard it, and himself enter an original order fixing the amount of the
deposit which should be required of the Railroad Company.
As we have already indicated, if the disposition of this contention required a ruling on
our part as to the true value of the land, we would be compelled to hear testimony in
that regard, that fact being developed or admitted in the pleadings. But we think that
the contentions of counsel can be disposed of without entering upon an inquiry of this
hotly disputed question of fact.
In the first place it appears that the judge who issued the original order fixed the value
of the lands in question at the amount of their assessed valuation, as shown by the
sworn certificate of the provincial treasurer; and although it might thereafter be made
to appear that the amount so determined would not furnish just compensation of the
land taken, or that it was grossly inadequate, it is by no means certain that proof of the
mere inadequacy of the amount of the value of the lands thus provisionally ascertained
would be sufficient in itself to establish an allegation of abuse of discretion on the part
of the judge, who adopted the assessed valuation as a standard for the provisional
determination of the amount of the deposit to be made under Act No. 1592.

It has been said that:

In support of the doctrine a number of cases are cited including Clifford vs. Overseer of
Poor of Frankford (37 N.J.L., 152), wherein it was held as follows:
Before this court can interfere on certiorari with a matter confided to the
discretion of the court below, it must be clearly shown that there has been an
unwarrantable and illegal exercise of such discretion to the substantial injury of
the party complaining.
Also the case of Avery vs. Ruffin (4 Ohio, 420), wherein the court said in an opinion
rendered in certiorariproceedings pending before it:
When the court of common pleas makes an order under the statute to
distribute fees between the late and present sheriff, the Supreme Court will
not interfere unless a strong case of abuse is presented.
And the same doctrine is announced in Rose vs. Stuyvesant (8 Johns.[N.Y.], 426;
Beekman vs. Wright (11 Johns. [N.Y.], 442) ; People vs. Martin (33 N.Y. Supp., 1000), and
Trustees Brooklyn vs. Patchen (8 Wend. [N.Y.], 47), wherein the writ of certiorari was
granted to correct abuses of discretion by inferior tribunals.
But without passing definitely on this proposition, ,it is sufficient answer to respondents'
contentions in this regard to indicate that if there was in fact such an abuse of discretion
by the judge who entered the original order as to entitle the aggrieved parties to relief,
their remedy, if any they had, was to be found in the institution of appropriate
proceedings in this court, in like manner as in the case at bar the applicants attack the
validity of the order entered by the respondent judge.
There can be no question as to the original jurisdiction in the premises of the judge who
entered the order fixing the amount of the deposit. Until and unless it was set aside, the
order entered by him could not, therefore, be wholly disregarded by the respondent
judge merely on the ground that he was of opinion that his predecessor has so far
abused his discretion in the premises, that he should be deemed to have gone beyond
or to have acted in excess of his jurisdiction in its issuance. We have already shown that

the respondent judge was not clothed with power to set aside such an order after the
deposit had been made by the railroad company; and it follows that if the respondent
land companies were entitled to relief, it could be found only in appropriate
proceedings in this court instituted for the purpose of vacating, annulling or setting
aside the original order fixing the amount of the deposit to be made by the Railroad
Company.

respondents should be treated technically as responses to our order "to show cause," or
as answers to the complaint to which a formal demurrer has been interposed, we are of
opinion that unless the answers are amended hereafter by the addition of new
allegations of fact sustaining the jurisdiction of the respondent judge in the premises,
which we do not anticipate, judgment should be entered in this court declaring the
order complained of to be null, void and without effect.

We think that what has been said disposes of all the substantial objections advanced by
the respondents against the issuance of the writ and the grant of the prayer of the
applicants; except their contention that the applicants have another adequate remedy
by appeal and therefore should not be permitted to seek relief in certiorariproceedings.

Unless, therefore, the answers of the respondents are amended in the meantime as
above indicated, let judgment be entered ten days from the date of the filing of this
opinion declaring the order entered in the court below on the 18th of February 1915, as
set forth in the complaint, null, void and without effect, with the costs of these
proceedings against the respondent land companies; and twenty days thereafter let a
duly certified copy of that judgment be remitted to the clerk of the Court of First
Instance of Tayabas Province for file with the expropriation proceedings wherein the
order was entered; and at the same time let the record of these certiorariproceedings
be filed with the archives of original proceedings in this court. So ordered.

To this it is sufficient answer to say that an examination of the statute clearly discloses
that it was not the intention of the legislator to authorize an appeal from orders fixing
the amount of the deposits the making of which secure to railway corporations the right
of immediate possession of lands involved in expropriation proceedings; and that, even
if an appeal did lie from such orders, the purpose and object of the "provisional and
"prompt" ascertainment of the amount of the deposit being to authorize the immediate
entry of the railway corporation upon the lands involved in the proceedings, an appeal
from an order, affecting adversely the statutory right of possession and issued without
jurisdiction or in excess of the jurisdiction of the court wherein it is entered, would not
furnish an adequate remedy in favor of a railway corporation entitled to the
undisturbed possession of such lands for the purpose of completing its construction
work at the earliest practicable date. The public as well as the railway corporation have
an interest in the speedy termination of the work, and when it is made to appear that a
court is proceeding without jurisdiction, or in excess of its jurisdiction, to interfere with
the statutory right of possession and thus delay the work, the railway corporation will
not be compelled to await the slower processes of a remedy by appeal and denied the
speedier relief which may be furnished in certiorari proceedings.
Perhaps we should indicate, before concluding this opinion, that we have not
considered or decided the contentions of counsel for applicants based on their claim of
a right to the undisturbed possession of the lands in question, because of the tacit or
express consent of the owners and occupants to the entry of the Railroad Company
upon these lands prior to the institution of the expropriation proceedings in the court
below. We have refrained from any discussion of these contentions because the facts
upon which they are based are not unqualified admitted by the pleadings; and because
a ruling upon these contentions is not necessary for the final disposition of the case as
submitted at this time.
We conclude that upon the pleadings submitted to us for judgment the applicants are
entitled to the relief prayed for in their complaint.
The facts admitted and affirmatively disclosed in the pleadings make it unnecessary for
us to issue formal orders directing the bringing up of the original record now on file in
the court below; and without stopping to consider whether the answers of the

Arellano, C.J., Torres, Johnson, Trent, and Araullo, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

1. The proposed expropriation has not been duly authorized as

provided by law, principally because it has not been approved by the
Office of the President as required by Section 2245 of the Revised
Administrative Code;

FIRST DIVISION
G.R. No. L-35861 October 18, 1979
MUNICIPALITY OF DAET, petitioner,
vs.
COURT OF APPEALS and LI SENG GIAP & CO., INC., respondent.

2. There is no genuine necessity for the proposed expropriation of the

defendant's property;
3. The proposed park should be put up in a different site which would
entail less expense to the plaintiff;
4. The present expropriation proceeding instituted by the herein
plaintiff against the defendant is discriminatory;

GUERRERO, J.:
The judgment of the respondent Court of Appeals, subject of the instant petition to
review on certiorari, "fixing the fair market value of the property sought to be
expropriated at P200.00 per square meter or for of FIVE HUNDRED FORTY THREE
THOUSAND FOUR HUNDRED (P543,400.00) PESOS, and the value of the improvement
thereon at THIRTY SIC THOUSAND FIVE HUNDRED (P36,500.00) PESOS, Philippine
Currency, both amounts to bear legal interest from and after the date of the actual
taking of possession by the Municipality of Daet, Camarines Norte until the full amount
is paid, with costs against plaintiff-appellant," must be affirmed in the light of the
unusual, unique and abnormal circumstances obtaining in this case where the complaint
for condemnation was filed on August 9, 1962 or seventeen (17) years ago but up to the
present, the petitioner Municipality of Daet has failed to make the deposit required to
take possession of the property sought to be expropriated.
The Municipality of Daet instituted condemnation proceedings against private
respondent Li Seng Giap & Co. Inc. on August 9, 1962 before the Court of Firs Instance of
Camarines Norte for the purpose of acquiring and subsequently converting the following
described property owned by private respondent as a public park:
A parcel of land (Lot No. 3 Plans PSU-57331 situated in the Poblacion,
Municipality of Daet, bounded on the North-East by a provincial road
known as Vinzons Avenue; on the South-East, by Felipe II Street; on
the South, by Ildefonso Moreno Street, and on the West, by J. Lukban
Street, covering an area of TWO THOUSAND SEVEN HUNDRED AND
SEVENTEEN (2,717 sq. meters) SQUARE METERS, more or less and
assessed by TRANSFER CERTIFICATE OF TITLE NO. 207 in the name of Li
1
Seng Giap & Co.
On August 20, 1962, private respondent, having been served with summons through
counsel, filed a "Motion to Dismiss" on the following grounds:

5. The plaintiff does not have sufficient funds to push through its
project of constructing a park and to allow the plaintiff to expropriate
defendant's property this time would be only to needlessly deprive
2
the latter of the use of its property.
On February 8, 1963, the trial court rendered a decision dismissing the expropriation
proceedings mainly on the grounds that there is no "genuine need" for the petitioner to
convert the aforestated lot into a park nor necessity to widen the streets and that even
if there is genuine necessity for the proposed expropriation, still the petitioner cannot,
in this case, exercise the power of eminent domain as it has no funds to pay the
3
reasonable value of the land and the building thereon.
On February 12, 1963, petitioner filed a motion for reconsideration which was denied
on February 27, 1963. Petitioner then appealed to the Court of Appeals, which appeal
was docketed as CA-G.R. No. 32-259-R. On April 14, 1968, the Court of Appeals rendered
a decision reversing the trial court's decision, the dispositive portion of which is as
follows:
WHEREFORE, the appealed "decision" (order) in Civil Case No. 1436 for
expropriation is hereby reversed and set aside, and, in lieu thereof,
another one is hereby rendered denying defendant Li Seng Gia &
Company's motion for dismiss; declaring that plaintiff Municipality of
Daet has a lawful right to take the property sought to be condemned,
for the public use described in the complaint, upon payment of just
compensation to be determined as of the date of the filing of the
complaint; directing the court a quo to promptly fix the provisional
value of the property sought to be condemned for the purposed of the
motion of plaintiff Municipality of Daet to take immediate possession
of said property under Sec. 2 of Rules 67 (formerly Sec. 3 of Rules 69)
of the Rules of Court; and remanding the case to the court a quo for
further proceedings consistent with this decision, the costs in this
appeal to be taxed against plaintiff Municipality of Daet in accordance

with Sec. 12 of Rule 67 (formerly Sec. 13 of Rule 69) of the Rules of

4
Court; ...
On March 20, 1969, after the records of the case were remanded to the trial court,
private respondent filed a "Motion for Appointment of Commissioners to Fix Just
Compensation for the Property Sought to be Taken."
On April 15, 1969, the trial court issued twin orders: (1) fixing the provisional value of
the land at P129,99 per square meter and the value of the improvement at P30,000.00
totalling P356,040.00 and require the Municipality to deposit with the Provincial
Treasurer in cash or in security which should be payable on demand and upon deposit
being effected, the Clerk of Court was ordered to issue the necessary writ of place the
Municipality in possession of the property; and (2) appointing Atty. Ernesto de Jesus,
Provincial Assessor, as chairman; Atty. Jose V. Jamito, PNB Branch Attorney and Dr.
Mateo Aquino, a resident of the municipality, as members of the committee on
appraisal. The committee members proceeded to qualify by taking their oaths of office
and then held three sessions on May 10, May 17, and May 24, 1969. On May 28, 1969,
the committee filed t he following report:
COMMISSIONERS' REPORT
In compliance with the order of this Honorable Court dated April 15,
1969, and pursuant to the provisions of Sec. 6. Rule 67 of the Rules of
Court, the undersigned commissioners, with due notice to the
counsels of both parties, convened in the morning of May 10, 1969,
for the purpose of finding ways and means by which the
commissioners could ascertain the fair market value of the property
subject of this proceeding. There are two basic approaches used in the
appraisal of land sought to be condemned the sale approach, and
the income approach. The commissioners as well as the counsels of
both parties agreed to use the sale approach. In order to enable the
counsels of both parties, as well as the commissioners, to gather or
secure documents regarding transaction of real property which the
commissioners might use as guide in determining the fair market
value, the parties agreed to postpone the hearing to May 17, 1969, at
6:30 in the morning.
Hearing was resumed in the morning of May 17, forthwith, the
counsel for the plaintiff presented documents which were submitted
as Exhibits, to wit:
1. Exh. "A" Deed of absolute sale executed by Lydia Moreno in favor
of Jaime R. Alegre, entered as Doc. No. 160: Page No. 33: Book No. IV;
Series of 1962. (The consideration was about P13.00 per square
meter).

2. Exh. "B" Deed of absolute sale executed by Jesus Villafranca y

Aules in favor of Sourthern Products Import and Export Corporation,
entered as Doc. No. 314; Page No. 64; Book No. II; Series of 1962. (The
consideration was around P14.00 per square meter).
3 Exh. "C" Deed of absolute sale executed by Julio Curva, et al. in
favor of Felicidad Vinzons Pajarillo, entered as Doc. No. 186; Page No.
39; Book No. 1; Series of 1958. (The consideration was P 15.00 per
square meter).
4. Exh. "D" Deed of Absolute Sale executed by Clao Dy Kim To in
favor of Concepcion Fonacier-Abao, entered as Doc. No. 133; Page
No. 88; Book No. V; Series of 1948. (The consideration was about
P8.57 per square meter).
5. Exh. "E" Deed of sale with mortgage executed by Dr. Agustin F.
Cuevas and Leticia Lopez, in favor of the Camarines Norte Teachers
Cooperative Credit Union, Inc., entered as Doc. No. 117; Page No. 56;
Book NO. VIII; Series of 1961. (The consideration was P57,000.00
the lot with an area of 972 square meters, and a three-storey concrete
building assessed at P16,000.00 under Tax Dec. No. 7083. If we will
exclude the value of the building, the consideration for the land will be
about P43.00 per square meter).
After the submission of the aforementioned exhibits, upon motion of
the counsel for the defendant, the hearing was postponed to May 24,
1969, at 8:30 in the morning. Upon resumption of the hearing on said
hour and date, the counsel for the defendant presented Exh. 1, which
the deed of sale executed by the Municipality of Daet in favor of the
Development Bank of the Philippines; the document was executed on
January 30, 1969; Exh. "1-A", the consideration in the amount of
P205,600.00; Exh. "1-B", the area of 2,056 square meters; and Exh.
"2", the letter of Tomas Cootauco to Li Seng Giap & Co., dated July 21,
1962. In addition to the aforementioned evidence, the counsel for the
defendant presented as witness Lo Chin who testified that sometime
in July, 1962. In addition to the aforementioned evidence, the counsel
for the defendant presented as witness Lo Chin who testified that
sometime in July, 19 1962 (after the fire), he was instructed by his sonin-law, Mr. Jesus Ty Poco, to see Mr. Jose Ong, the representative of
Mr. William Lee, for the purpose of making an offer to buy the land
subject of this proceeding for a price of P120.00 per square meter, and
P30,000.00 for the structure thereon; that he had talked with Mr.
William Lee, for the purpose of making an offer to buy the land subject
of this proceeding for a price of P120.00 per square meter, and
P30,000.00 for the structure thereon; that he had talked with Mr. Jose
Ong, for the same purpose, on several occasions 5 or 6 times, the last

was sometime in the first week of May, this year wherein he offered
to pay as high as P150.00 per square meter, and P50,000,00 for the
structure thereon; and that Mr. Ty Poco, having been born in
Mercedes, and resided here since birth, was desirous of buying said
property because he intends to build a memorial thereon. Counsel
likewise presented Mr. Jose Ong as witness to corroborate the
testimony of Lo Chin.
After the hearing held by the commissioners, Atty. Ernesto de Jesus,
who is the incumbent provincial assessor, dig up the records in his
office for the purpose of finding, in addition to the exhibits already
presented, other documents covering transactions of properties
located within the areas near the land sought to be condemned, but
failed to locate even a single document Hence, the commissioners
have no other recourse but to base their appraisal of the value of the
land under consideration from the Exhibits submitted by the parties.
Under Sec. 4, Rule 67, of the Rules of Court, just compensation is to be
determined as of the date of the filing of the complaint. The aboveentitled complaint was filed in August, 1962; hence, Exh. "1", Exh. "1B" and Exh. "1-C" could not be taken into consideration, the same
having been executed in the year 1969 seven years after the filing
of the complaint. The offer of Mr. Jesus Ty Poco could not also be
considered because the same was made by one who was under an
imperative necessity of buying the property.
After all the exhibits submitted by the plaintiff had been examined by
the commissioners, and upon a conscientious and analytical study of
the sales of land near the land subject of this proceeding, and after
serious deliberations on the matter, the commissioners agreed that, in
the year 1962, the reasonable or fair market value of the land subject
of this proceeding should be P60.00 per square meter; and the
structure remaining thereon at P15,000.00
Attached hereto is the map of the commercial center of Daet wherein
the land subject of this case is shown. The lands described in the
Exhibits submitted by the plaintiff are also indicated thereon.
Daet, Camarines Norte, May 28, 1969.
Respectfully submitted,
(Sgd.) Ernesto de Jesus (Sgd.) Jose V. Jamito
Commissioner Commissioner

(Sgd.) Mateo D. Aquino

Commissioner

Private respondent, having received copy of the commissioner's report, filed a "Motion
to Admit Additional Evidence" which was opposed by petitioner but the same was
granted by the Court provided that the additional evidence consisted of the expert
testimony of a duly licensed broker. On August 20, 1969, the municipality manifested its
conformity to the commissioner's report.
Meanwhile, on July 23, 1969, Judge Gabriel V. Valero, the Presiding Judge at Branch I,
issued an order transferring this case to Judge Isidro Vera of Branch II, who proceeded
to take the additional evidence of private respondent. Said evidence consisted of the
testimony of Engineer Aurelio B. Aquino, who appraised the land involved herein at
P200.00 per square meter and the improvement thereon at P36,500.00 in 1969.
On December 2, 1969, after submission of evidence for both parties, the trial court
rendered a decision disregarding the valuation made by the commissioners and using
the appraisal of Engineer Aurelio B. Aquino in 1969 as the basis in determining the value
of the land in 1962. The dispositive portion of said decision is quoted herein as follows:
WHEREFORE, the Court renders judgment fixing the reasonable value
of the property sought to be expropriated at P117.00 per square
meter or for a total amount of Three Hundred Seventeen Thousand
Eight Hundred Eighty Nine Pesos (P317,889.00), and the value of the
improvement at Thirty Six Thousand Five Hundred Pesos (P36,500.00),
this amount to bear interest at the legal rate from the filing of the
complaint until paid with costs against the plaintiff.
SO ORDERED.

Both petitioner and private respondent filed their respective motions for
reconsideration, the former praying that the trial court give due course to the
commissioner's report while the latter insisting that the market value of the land be
fixed at P200.00 per square meter. Upon denial of the said motions, both parties then
appealed to the Court of Appeals.
On October 18, 1972, respondent Court of Appeals rendered a decision sustaining the
valuation of the property in 1969, declaring the municipality to have a lawful right to
expropriate and modified the judgment of the trial court with respect to the interest
that can be recovered which should be from and after the date of actual taking.
Petitioner's motion for reconsideration having been denied, the instant petition for
review on certiorari was filed and the following assignment of errors raised:

I. Contrary to law and jurisprudence, the Court of Appeals erred in the

interpretation and application of Section 4, Rule 67 of the Rules of
Court by determining the value of the property in condemnation
proceedings at the time of the rendition of the judgment of the trial
court and not at the date of the filing of the complaint.
II. Contrary to the principle of res judicata, the Court of Appeals
gravely abused its power in modifying, disregarding and amending its
own decision which has long become final and executory (in CA-G.R.
No. 32259-R).
III. Without regard to the guidelines set forth by procedural laws and
jurisprudence, the Court of Appeals erred in giving credence to an
appraiser under the employ of the private respondent and totally
disregarded the findings of the commissioners appointed by the Court
and the by not declaring that the trial judge of Branch II of the Court of
First Instance of Camarines Norte has gravely abused his discretion in
taking cognizance of the condemnation case.
IV. In any event, by virtue of the Presidential Decree No. 42 issued on
November 9, 1972 private respondent in estopped from claiming in
valuation higher than the assessed value of the property sought to be
7
condemned.
The first assignment of error assails the respondent Court's application of Section 4,
Rule 67 of the Revised Rules of Court which states the time when the value of the land
should be determined in condemnation proceedings. The Rule provides thus:
Sec. 4. Order of condemnation. When such a motion is overruled or
when any party fails to defend as required by this rule, the court may
enter an order of condemnation declaring that the plaintiff has a
lawful right to take the property sought to be condemned, for the
public use or purpose described in the complaint, upon payment of
just compensation to be determined as of the date of the filing of the
complaint ...
A look into the original of this provision reveals that it is a reproduction of Section 5,
Rule 69 of the Rules of Court of July 1, 1940. In turn, the said provision in the Rules of
1940 appears to have been taken from the ruling Manila Railroad Company vs.
8
Caligsihan, a 1919 case, where the rule that "the value of the property taken should be
fixed as of the date of the proceedings" was enunciated.
Prior to the promulgation of the Rules of 1940, however, there is another case that
touched on the question of time when valuation of the property taken should be fixed.
9
This is the case of Provincial Government of Rizal vs. Caro de Araullo a 1938 case,
where the value of the property therein involved was fixed as of the date when it was

taken in 1927 and not at the time of the filing of the complaint in 1928. This ruling was
10
reiterated in Republic vs. Lara, a 1954 case, where it was held that the value of the
lands expropriated must be reckoned as of the time of the actual possession by the
Government in 1946 and not as of the time of the filing of the complaint in 1949. Such
was the ruling notwithstanding the fact that the Rules of 1940 was already in force and
effect. In explaining the ruling, the Court therein held:
... Ordinarily, inquiry is limited to actual market values at the time of
the institution of the condemnation proceedings because under
normal circumstances, the filing of the complaint coincides or even
precedes the taking of the property by the plaintiff; and Rule 69 simply
fixes this convenient date for the valuation of property sought to be
expropriated. Where, however, the actual taking or occupation by the
plaintiff, with the consent of the landowner long precedes the filing of
the complaint for expropriation the rule to be followed must still be
that enunciated by us in Provincial Government of Rizal vs.
Caro, supra, that "that value of the property should be fixed as of the
date when it was taken and not of the date of the filing of the
proceedings." For where property is taken ahead of the filing of the
condemnation proceedings, the value thereof may be enhanced by
the public purpose for which it is taken, the entry of the plaintiff upon
the property may have depreciated its value thereby, or there may
have been a natural increase in the value of the property from the
time it is taken to the time the complaint is filed, due to general
economic conditions. The owner of the private property should be
compensated only for what he actually loses, it is not intended that his
compensation shall extend beyond his loss or injury. And what he
loses is only the actual value of his property at the time it is taken. This
is the only way the compensation to be paid can be truly just, i.e.,
"just" not only to the individual whose property is taken, "but to the
public, which is to pay for it." (18 Am. Jur. 873, 874)
Subsequent cases where the taking preceded the filing of the expropriation proceedings
followed the doctrine in the Caro case. These cases were: Republic vs. Garcellano, et
11
12
al.; Municipal Government of Sagay vs. Jison, et al.; and Alfonso vs. Pasay
13
14
City. However, in the case of Republic vs. Narciso, et al., where the expropriation
proceeding preceded the taking, it was held that the value of "the property to be
considered are those at the beginning of the expropriation" and not accordingly at the
time of the taking of said property. For this reason, this Court fittingly saw the need for
clarify the departure of some cases from the mandate of Section 5, Rule 69 of the Rules
of Court of 1940 (now Section 4, Rule 67 of the Revised Rules of Court) in the case
15
of Republic of the Philippines vs. Philippine National Bank, where it was held:
It is apparent from the foregoing that, when plaintiff takes
possession before the institution of the condemnation proceedings,
the value should be fixed as of the time of the taking of the said

possession, not the filing of the complaint, and the latter should be
the basis for the determination of the value, when the taking of the
property involved coincides with or is subsequent to, the
commencement of the proceedings. Indeed, otherwise, the provision
of Rule 69, Section 5, directing that compensation" be determined as
of the date of the filing of the complaint," would never be operative.

possession of the property sought to be expropriated if he deposits with the Philippine

National Bank an amount equivalent tot he assessed value of the property for purposes
of taxation has no application to the case at bar where the Court of Appeals had already
fixed the value of the property at P200.00 per square meter and P36,500.00 for the
improvement in its decision promulgated on October 18, 1972 about three weeks
earlier than the issuance of the Presidential Decree No. 42

In Capitol Subdivision, Inc. vs. Province of Negros Occidental, 7 SCRA 60, the Court said
that "Since the right of the Province of Negros Occidental to expropriate the lot in
question in the present case is not contested, the owner of said lot is entitled to recover
from said province the fair and full value of the lot, as of the time when possession
thereof was actually taken by the province, plus consequential damages including
attorney's fees from which the consequential benefits, if any, should be deducted
with interest at the legal rate, on the aggregate sum due to the owner from and after
the date of actual taking." And in the case of J.M. Tuason & Co., INc. vs. Land Tenure
Administration, 31 SCRA 413, the Court, speaking thru now Chief Justice Fernando,
reiterated the "well-settled (rule) of the property at the time of its taking. Anything
beyond that is more and anything short of that is less, than just compensation. It means
a fair and full equivalent for the loss sustained, which is the measure of the indemnity,
not whatever gain would accrue to the expropriation entity."

By not complying with the orders of the trial court and the appellate court, petitioner
would benefit by its non-compliance and dilly-dallying in taking possession of the
property which We will not sanction or allow to the prejudice of the private respondent
landowner who should not be penalized by the protracted delay of petitioner in taking
over the property over a period of seventeen (17) years during which time private
respondent was deprived of the beneficial use of the land and the improvement
thereon. Petitioner upon tiling the complaint has the duty to make the deposit in the
amount provisionally ascertained and fixed by the court (Sec. 2, Rule 67, Rules of Court),
which deposit serves the double purpose of pre- payment of the property if the same is
finally expropriated and of an indemnity for damages if the proceedings are dismissed.
(Visayan Refining Co. vs. Camus, 40 Phil. 550; Republic of the Philippines vs. Baylosis, L13582, Sept. 30, 1960)

In the case at bar, it is a fact that there has been no taking of the property prior to the
institution of the condemnation proceedings. And it cannot even be said that the filing
of the complaint coincided with he taking of the property by the plaintiff because the
latter did not enter into possession of the property since it failed or did not comply with
the order of the Court requiring the municipality to make the necessary deposit of the
provisional value as fixed by the Court in its Order of April 15, 1969. Petitioner did not
even move for a reconsideration of said Order. The trial proceeded and after hearing
and submission of evidence for both parties, the trial court rendered on December 2,
1969 its decision "fixing the reasonable value of the property sought to be expropriated
at P117.00 per square meter or for a total amount of Three Hundred Seventeen
Thousand Eight Hundred Eighty Nine Pesos (P317,889.00), and the value of the
improvement at Thirty Six Thousand Five Hundred Pesos (P36,500.00), said amount ... to
bear interest at the legal rate from the date of the filing of the complaint until paid."
Still questioning the value determined by the trial court, petitioner appealed to the
Court of Appeals and on October 8, 1972, the appellate court in its judgment fixed the
value of the property at P200.00 per square meter and P36,500.00 for the
improvement. Not yet satisfied, the municipality appealed to the Supreme Court and
meantime took no step to take possession of the land. While petitioner submitted a
Manifestation on September 15, 1977 to this Court invoking Presidential Decree No. 42
dated November 9, 1972 and manifesting that it had made a deposit to the Philippine
National Bank in the amount of P54,370.00 as per PNB Certificate No. 9381 dated
February 9, 1973, We hold that petitioner has not made the correct and proper deposit
of the provisional value as fixed by the trial court. It is elementary that Presidential
Decree No. 42 of November 9, 1972 which grants the right to take or enter upon the

The records disclose that petitioner filed a Motion for Authority to Demolish Building of
Private Respondent dated June 27, 1974 for reasons therein alleged which private
respondent opposed as not being the proper procedure under the law to abate a
nuisance unless petitioner deposits the amount of P36,500.00 which is the value of the
improvement. The Court resolved to deny the motion without prejudice to petitioner's
taking the proper proceedings for the abatement of the alleged nuisance pursuant to
the provisions of the new Civil Code in its Resolution of July 24, 1974.
The records further disclose that in the Petition to Cite the Mayor of the Municipality of
Daet (Herein Petitioner) in Contempt of Court filed by private respondent on February
14, 1978, this Court was informed that the petitioner acting thru its Mayor, Engineer
Jose P. Timoner, started to demolish on February 6, 1978 the building of the private
respondent, attaching thereto photographs marked Annexes 1 and 2 showing the
building before and during the demolition. Private respondent prayed that the Mayor be
cited for contempt or alternatively, that the petitioner be ordered to deposit with the
Philippine National Bank the amount of P36,500.00 instead of P28,830.00 to await the
final outcome of this case.
Commenting on the petition to cite the Mayor in contempt of court, petitioner again
relies on Presidential Decree No. 42 alleging that the assessed value of the property for
taxation purposes is only P18,250.00 which is less than the amount of P28,830.00 it had
already deposited with the Philippine National Bank.
The above antecedent facts and circumstances of this case are unique and abnormal
such that by reason thereof, We agree with the judgment of the Court of Appeals fixing
the fair market value of the property sought to be expropriated at P200.00 per sq.

meter or for a total of FIVE HUNDRED FORTY THREE THOUSAND FOUR HUNDRED
(P543,400.00) PESOS, and the value of the improvement thereon at THIRTY SIX
THOUSAND FIVE HUNDRED (P36,500.00) PESOS, Philippine Currency, both amounts to
bear legal interest from and after the date of the actual taking of possession by the
Municipality of Daet, Camarines Norte until the full amount is paid, with costs against
plaintiff-appellant.
We hold that the decision of the Court of Appeals fixing the market value of the
property to be that obtaining, at least, as of the date of the rendition of the judgment
on December 2, 1969 as prayed by private respondent, which the Court fixed at P200.00
per square meter is in conformity with doctrinal rulings herein above cited that the
value should be fixed as of the time of the taking of the possession of the property
because firstly, at the time judgment was rendered on December 2, 1969, petitioner had
not actually taken possession of the property sought to be expropriated and secondly,
We find the valuation determined by the Court of Appeals to be just, fair and
reasonable.
On the second assignment of error, petitioner faults the respondent court in modifying,
disregarding and amending its own decision in CA-G.R. No. 32259-R which directed
payment of just compensation to be determined as of the date of the filing of the
complaint. Petitioner claims that this decision has tong become final and executory and
it would be contrary to the doctrine of res judicata to modify, disregard and amend said
decision.
In order that there may be res judicata, the following requisites must be present: (a) the
former judgment must be final; (b) it must have been rendered by a court having
jurisdiction of the subject- matter and of the parties; (c) it must be a judgment on the
merits; and (d) there must be, between the first and second actions, Identity of parties,
16
of subject matter, and of cause of action.
When, between the first case where the judgment was rendered, and the second case
where such judgment is invoked, the three Identities mentioned in paragraph (d) above,
are present, the judgment on the merits rendered in the first case constitutes an
absolute bar to the subsequent action. It is final as to the claim or demand in the
controversy, including the parties and those in privity with them, not only as to every
matter which was offered and received to sustain or defeat the claim or demand, but as
to any other admissible matter which might have been offered for that purpose and of
17
all matters that could have been adjudged in that case.
This is, however, not the situation in the case at bar. The only question drawn in issue
before the Court of Appeals in CA-G.R. No. 32259-R was whether petitioner had the
authority to exercise the right of eminent domain. The question regarding the amount
of just compensation was expressly reserved by the Court of Appeals for the trial court
to determine. Perforce, Between the first case wherein the judgment is rendered, and
the second case wherein such judgment is invoked, there is Identity of parties but there
is no Identity of causes of action. In such a situation, the judgment is conclusive in the

second case only to those matters actually and directly controverted and determined,
and not as to matters merely involved therein. To constitute res judicata,the right to
relief in one suit must rest upon the same question which in essence and substance was
18
litigated and determined in the first suit.
That phrase in the dispositive portion of the decision of the Court of Appeals in CA-G.R.
No. 32259-R referring to the time that should be considered in reckoning the just
compensation, to wit "declaring that plaintiff Municipality of Daet has the lawful right
to take the Property sought to be condemned, for the public use described in the
complaint, upon payment of just compensation to be determined as of the date of the
filing of the complaint" cannot likewise constitute the law of the case, which is a
doctrine closely akin to res judicata. The law of the case, as applied to a former decision
of an appellate court, merely expresses the practice of the courts in refusing to reopen
19
what has been decided. It differs from res judicata in that the conclusiveness of the
first judgment ' is not dependent upon its finality. The first judgment is generally' if not
20
universally, not final. It relates entirely to questions of law, and is confined in its
21
operation to subsequent proceedings in the same case. While it is conclusive as to all
matters within its scope, it cannot be invoked, except as to questions as have been
actually considered and determined in the first appeal. In the application of this rule,
courts will take cognizance of such points only as affirmatively appears in the last to
22
have been decided in the former appeal.
Moreover, this case is before the Supreme Court and being the Court of last resort, it is
the final arbiter of all legal questions properly brought before it and its decision in any
given case constitutes the law of this particular case. Once Our judgment becomes final,
it is binding on all inferior courts, and hence beyond their power and authority to alter
or modify. (Kabigting vs. Acting Director oil Prisons, 6 SCRA 281, 286). Petitioner's
second assignment of error is, therefore, without merit.
The first part of the third assignment of error hinges on what is the proper procedure in
determining the just compensation in proceedings.
Section 5, Rule 67 of the Revised Rules of Court calls for the appointment of not more
than three (3) competent and disinterested persons as commissioners to ascertain and
report to the court the just compensation for the property sought to be taken. As to the
extent of this function and power of the commissioner, this Court held inManila
23
Railroad Company vs. Velasquez that the commissioners' power is limited to assessing
the value and determining the amount of damages. There it stops; they can go no
farther. The value and damages awarded must be a just compensation and no more and
no less. But in fixing these amounts, the commissioners are not to act ad libitum. They
are to discharge the trust reposed in them according to well-established rules and form
their judgment upon correct legal principles. To deny this is to place them where no one
else in this country is placed, above the law and beyond accountability.
Corollary to tills limitation, it has been held that reports submitted by commissioners of
appraisals in condemnation proceedings are not binding, but merely advisory in

24

character, as far as the court is concerned. An early case enunciated the rule that a
Court of First Instance has the undoubted right to reject the report of the
commissioners as to the value of the land, if the report is not founded upon legal
evidence. The judge has the undoubted right also to discharge the commission and
appoint a new one. He also has the right to formulate an opinion of his own as to the
value of the land in question, nevertheless, if he formulates such an opinion, he must
25
base it upon competent evidence. When the commissioners report is not in
accordance with the law on the matter, another case ruled that it cannot serve as the
basis of the judicial decision but must be annulled and set aside, and the case remanded
26
to the court below for reopening of trial. Then, in still other cases, it was held that a
Court of First Instance or on appeal, the Supreme Court may substitute its own estimate
of value as gathered from the record submitted to it, in cases where the only error of
the commissioners is that they have applied illegal principles to the evidence submitted
to them; or that they have disregarded a clear preponderance of evidence; or that they
have used an improper rule of assessment in arriving at the amount of the award;
provided always that the evidence be clear and convincing and the amount allowed by
27
the commissioners is grossly inadequate or excessive.
That the commissioners' report is not final and conclusive, but merely recommendatory
is bolstered by the requirement in Section 8, Rule 67 of the Revised Rules of Court of
conducting a hearing thereon. Otherwise stated, said provision requires that upon the
expiration of the period of ten (10) days within which all interested parties may file their
objects to the report, or even before the expiration of such period if all interested
parties have filed their objections to the report or their statement of agreement
therewith, the court must conduct a hearing on the report.
In view of these basic provisions of the Rules of Court on eminent domain and various
jurisprudence on the function of the commissioners as limited by the Court, We hold
that the respondent Court of Appeals did not err in giving credence to the appraiser
employed by private respondent and in disregarding the commissioners report.
Respondent court found that aside from being a civil engineer, Aurelio B. Aquino is a
licensed real estate broker and appraiser of long standing, being one of the
incorporators of C.M. Hoskins and Co., Inc., a corporation engaged in real estate
brokerage since October, 1938 and of which firm he is presently the Chairman of the
board of directors. With these qualifications, respondent court committed no error in
concluding that he was competent to make the appraisal of the fair market value of the
parcel of land under consideration. Although he does not maintain an office in Daet nor
does he appear to have had any transactions in said locality, he is compatent since a
commercial parcel of land retains the same characteristics whether it is located in
Manila or Daet, and the criterion for making an appraisal of a parcel of land is
universally applied, irrespective of the locality where it is situated. And since the value
of a parcel of land taken by eminent domain is always a matter of opinion, the same
28
may be proved by opinion evidence of the real estate appraiser. Hence, We find
substantial basis for the court to fix the value of the land at P200-00 per square meter
and the building at P36,500.00 as testified to by the broker.

Petitioner assails the transfer of the case from Branch I of the Court of First Instance of
Camarines Norte to Branch 11 thereof, claiming that the jurisdiction of the respective
branches are delineated by a controlling department circular and thereby concluding
that Branch 11 has no legal and valid authority to take over said expropriation case.
We do not agree. Where a court of first instance is divided into several branches, each
of the branches is not a court distinct and separate from the others. Jurisdiction is
vested in the court, not in the judges, so that when a complaint or information is filed
before one branch or judge, jurisdiction does not attach to said branch or judge alone,
to the exclusion of the others. Trial may be had or proceedings may continue by and
before another branch or judge. It is for this reason that Section 57 of the Judiciary Act,
expressly grants the Minister of Justice, upon recommendation of the district Judge, the
administrative right or power to apportion the cases among the different branches, both
for the convenience of the parties and the coordination of the work by the different
branches, and the judges presiding each branch. The apportionment does not involve a
grant or limitation or jurisdiction; this continues to be vested in the court of first
instance of the province as a whole, and trial may be had by any judge or branch of the
29
court.
We do agree, however, that the apportionment of cases must be respected by the
judges in the interest of order and coordination in the dispatch of cases. But the
question of whether Branch II took cognizance of a case properly belonging to another
branch is negated by the fact, pointed out by respondents, that Administrative Order
No. 472 of the Secretary of Justice dividing the Province of Camarines Norte between
Branch I and Branch II took effect on January 1, 1971 long after Branch II had disposed
of the case at bar because said case was decided on December 2, 1969.
The fourth assignment of error is clearly untenable. Presidential Decree No. 42 issued on
November 9, 1972 does not limit the just compensation in expropriation proceedings to
the assessed value of the value sought to be condemned. By its title alone, i.e.,
"Authorizing the Plaintiff in Eminent Domain Proceedings to Take Possession of the
Property Involved Upon Depositing the Assessed Value for Purposes of Taxation," it can
already be gleaned that said decree fixes only the provisional value of the property. As a
provisional value, "it does not necessarily represent the true and correct value of the
land. The value is only "provisional" or "tentative" to serve as the basis for the
30
immediate occupancy of the property being expropriated by the condemnor.
This decree repealed Section 2, Rule 67 of the Revised Rules of Court which imposed
upon the court having jurisdiction of the proceeding with the duty of ascertaining and
fixing the provisional value of The property. As stated in the said decree itself, the repeal
was necessary inasmuch as the "existing procedure for the exercise of the right of
eminent domain is not expeditious enough to enable the plaintiff to take possession of
the real property involved as soon as possible, when needed for public purposes."
Even in Presidential Decree No. 76, "Requiring All Persons, Natural or Juridical Owning
or Administering Real Property, Including the Improvements Thereon, to File Sworn

Statement of the True Value of Such Property," issued on December 6, 1972, it is clearly
stated that the just compensation is based on the current and fair market value and not
on the assessed value. The pertinent provisions state as follows:
For purposes of just compensation in cases of private property
acquired by the government for public use, the basis shall be the
current and fair market value as declared by the owner or
administrator or such market value as determined by the assessor,
whichever is lower.
Under this Decree, the assessed valuation which shall be the basis for
payment of real property tax beginning the calendar year 1974 shall
be fifty per centum of the current fair market value, as determined by
the assessor, in case of commercial, industrial or mineral lands; forty
per centum in the case of agricultural lands and thirty per centum in
the case of lands for purely residential purposes.
Clearly, therefore, the assessed value of a property constitutes only a percentage of its
current fair market value. It cannot, thus, be the direct basis of just compensation in
expropriation proceedings.
But more importantly, this assignment of error is bereft of merit because Presidential
Decree No. 42 is inapplicable in the case at bar. As pointed out by private respondent, it
is a cardinal rule of statutory construction that laws shall have only prospective effect.
The provisional value of the property in this case having already been fixed, the deposit
on February 9, 1973 of the amount of P54,370.00 representing the assessed value of the
land and the deposit on October 21, 1977 of the amount of P25,830.00 representing the
assessed value of the improvement, both pursuant to the said decree, are not sufficient.
Nevertheless, said amounts should be deducted from the total amount due to private
respondent.
To elucidate and clarify the judgment of this Court in affirming the decision appealed
from, We consider and hold that the demolition of the building of private respondent
standing on the land by the Municipal Mayor, Engr. Jose P. Timoner on February 14,
1978 constituted the actual taking of possession of the property sought to be
expropriated by the Municipality of Daet. And from said date, February 14, 1978,
interest at the legal rate shall be paid by the municipality until the full amount is paid.
IN VIEW OF ALL THE FOREGOING, the judgment under review is hereby AFFIRMED in
toto.
SO ORDERED.
Claudio Teehankee, took no part.

Makasiar, Fernandez, De Castro and Melencio Herrera, JJ., concur.

G.R. No. L-59603

Republic of the Philippines

SUPREME COURT
Manila

On October 21, 1980, the respondent judge issued a writ of possession authorizing the
petitioner to take immediate possession of the premises. On December 23, 1980, the
private respondent flied its answer.

EN BANC

At the pre-trial conference on February 13, 1981, the respondent judge issued an order
stating that the parties have agreed that the only issue to be resolved is the just
compensation for the properties and that the pre-trial is thereby terminated and the
hearing on the merits is set on April 2, 1981.

April 29, 1987

EXPORT PROCESSING ZONE AUTHORITY, petitioner,

vs.
HON. CEFERINO E. DULAY, in his capacity as the Presiding Judge, Court of First Instance
of Cebu, Branch XVI, Lapu-Lapu City, and SAN ANTONIO DEVELOPMENT
CORPORATION, respondents.
Elena M. Cuevas for respondents.

On February 17, 1981, the respondent judge issued the order of condemnation
declaring the petitioner as having the lawful right to take the properties sought to be
condemned, upon the payment of just compensation to be determined as of the filing of
the complaint. The respondent judge also issued a second order, subject of this petition,
appointing certain persons as commissioners to ascertain and report to the court the
just compensation for the properties sought to be expropriated.

GUTIERREZ, JR., J.:

The question raised in this petition is whether or not Presidential Decrees Numbered 76,
464, 794 and 1533 have repealed and superseded Sections 5 to 8 of Rule 67 of the
Revised Rules of Court, such that in determining the just compensation of property in an
expropriation case, the only basis should be its market value as declared by the owner
or as determined by the assessor, whichever is lower.
On January 15, 1979, the President of the Philippines, issued Proclamation No. 1811,
reserving a certain parcel of land of the public domain situated in the City of Lapu-Lapu,
Island of Mactan, Cebu and covering a total area of 1,193,669 square meters, more or
less, for the establishment of an export processing zone by petitioner Export Processing
Zone Authority (EPZA).
Not all the reserved area, however, was public land. The proclamation included, among
others, four (4) parcels of land with an aggregate area of 22,328 square meters owned
and registered in the name of the private respondent. The petitioner, therefore, offered
to purchase the parcels of land from the respondent in acccordance with the valuation
set forth in Section 92, Presidential Decree (P.D.) No. 464, as amended. The parties
failed to reach an agreement regarding the sale of the property.
The petitioner filed with the then Court of First Instance of Cebu, Branch XVI, Lapu-Lapu
City, a complaint for expropriation with a prayer for the issuance of a writ of possession
against the private respondent, to expropriate the aforesaid parcels of land pursuant to
P.D. No. 66, as amended, which empowers the petitioner to acquire by condemnation
proceedings any property for the establishment of export processing zones, in relation
to Proclamation No. 1811, for the purpose of establishing the Mactan Export Processing
Zone.

On June 19, 1981, the three commissioners submitted their consolidated report
recommending the amount of P15.00 per square meter as the fair and reasonable value
of just compensation for the properties.
On July 29, 1981, the petitioner Med a Motion for Reconsideration of the order of
February 19, 1981 and Objection to Commissioner's Report on the grounds that P.D. No.
1533 has superseded Sections 5 to 8 of Rule 67 of the Rules of Court on the
ascertainment of just compensation through commissioners; and that the compensation
must not exceed the maximum amount set by P.D. No. 1533.
On November 14, 1981, the trial court denied the petitioner's motion for
reconsideration and gave the latter ten (10) days within which to file its objection to the
Commissioner's Report.
On February 9, 1982, the petitioner flied this present petition for certiorari and
mandamus with preliminary restraining order, enjoining the trial court from enforcing
the order dated February 17, 1981 and from further proceeding with the hearing of the
expropriation case.
The only issue raised in this petition is whether or not Sections 5 to 8, Rule 67 of the
Revised Rules of Court had been repealed or deemed amended by P.D. No. 1533 insofar
as the appointment of commissioners to determine the just compensation is concerned.
Stated in another way, is the exclusive and mandatory mode of determining just
compensation in P.D. No. 1533 valid and constitutional?
The petitioner maintains that the respondent judge acted in excess of his jurisdiction
and with grave abuse of discretion in denying the petitioner's motion for
reconsideration and in setting the commissioner's report for hearing because under P.D.
No. 1533, which is the applicable law herein, the basis of just compensation shall be the
fair and current market value declared by the owner of the property sought to be

expropriated or such market value as determined by the assessor, whichever is lower.

Therefore, there is no more need to appoint commissioners as prescribed by Rule 67 of
the Revised Rules of Court and for said commissioners to consider other highly variable
factors in order to determine just compensation. The petitioner further maintains that
P.D. No. 1533 has vested on the assessors and the property owners themselves the
power or duty to fix the market value of the properties and that said property owners
are given the full opportunity to be heard before the Local Board of Assessment Appeals
and the Central Board of Assessment Appeals. Thus, the vesting on the assessor or the
property owner of the right to determine the just compensation in expropriation
proceedings, with appropriate procedure for appeal to higher administrative boards, is
valid and constitutional.
Prior to the promulgation of P.D. Nos. 76, 464, 794 and 1533, this Court has interpreted
the eminent domain provisions of the Constitution and established the meaning, under
the fundametal law, of just compensation and who has the power to determine it. Thus,
in the following cases, wherein the filing of the expropriation proceedings were all
commenced prior to the promulgation of the aforementioned decrees, we laid down
the doctrine onjust compensation:

shall secure to the plaintiff the property essential to the exercise of his right of
condemnation, and to the defendant just compensation for the property
expropriated. This Court may substitute its own estimate of the value as
gathered from the record (Manila Railroad Company v. Velasquez, 32 Phil.
286)."
However, the promulgation of the aforementioned decrees practically set aside the
above and many other precedents hammered out in the course of evidence-laden, well
argued, fully heard, studiously deliberated, and judiciously considered court
proceedings. The decrees categorically and peremptorily limited the definition of just
compensation thus:
P.D. No. 76:
xxx

xxx

xxx

Municipality of Daet v. Court of Appeals (93 SCRA 503, 516),

"For purposes of just compensation in cases of private property acquired by the

government for public use, the basis shall be the current and fair market value
declared by the owner or administrator, or such market value as determined by
the Assessor, whichever is lower."

xxx

P.D. No. 464:

xxx

xxx

"And in the case of J.M. Tuason & Co., Inc. v. Land Tenure Administration, 31 SCRA 413,
the Court, speaking thru now Chief Justice Fernando, reiterated the 'well-settled (rule)
that just compensation means the equivalent for the value of the property at the time
of its taking. Anything beyond that is more and anything short of that is less, than just
compensation. It means a fair and full equivalent for the loss sustained, which is the
measure of the indemnity, not whatever gain would accrue to the expropriating entity."

"Section 92. Basis for payment of just compensation in expropriation

proceedings. In determining just compensation which private property is
acquired by the government for public use, the basis shall be the market value
declared by the owner or administrator or anyone having legal interest in the
property, or such market value as determined by the assessor, whichever is
lower."

Garcia v. Court ofappeals (102 SCRA 597, 608),

P.D. No. 794:

xxx

"Section 92. Basis for payment of just compensation in expropriation

proceedings. In determining just compensation when private property is
acquired by the government for public use, the same shall not exceed the
market value declared by the owner or administrator or anyone having legal
interest in the property, or such market value as determined by the assessor,
whichever is lower."

xxx

xxx

"Hence, in estimating the market value, all the capabilities of the property and
all the uses to which it may be applied or for which it is adapted are to be
considered and not merely the condition it is in the time and the use to which it
is then applied by the owner. All the facts as to the condition of the property
and its surroundings, its improvements and capabilities may be shown and
considered in estimating its value."
Republic v. Santos (141 SCRA 30, 35-36),
"According to section 8 of Rule 67, the court is not bound by the
commissioners' report. It may make such order or render such judgment as

P.D. No. 1533:

"Section 1. In determining just compensation for private property acquired
through eminent domain proceedings, the compensation to be paid shall not
exceed the value declared by the owner or administrator or anyone having
legal interest in the property or determined by the assessor, pursuant to the

Real Property Tax Code, whichever value is lower, prior to the recommendation
or decision of the appropriate Government office to acquire the property."
We are constrained to declare the provisions of the Decrees on just compensation
unconstitutional and void and accordingly dismiss the instant petition for lack of merit.
The method of ascertaining just compensation under the aforecited decrees constitutes
impermissible encroachment on judicial prerogatives. It tends to render this Court
inutile in a matter which under the Constitution is reserved to it for final determination.
Thus, although in an expropriation proceeding the court technically would still have the
power to determine the just compensation for the property, following the applicable
decrees, its task would be relegated to simply stating the lower value of the property as
declared either by the owner or the assessor. As a necessary consequence, it would be
useless for the court to appoint commissioners under Rule 67 of the Rules of Court.
Moreover, the need to satisfy the due process clause in the taking of private property is
seemingly fulfilled since it cannot be said that a judicial proceeding was not had before
the actual taking. However, the strict application of the decrees during the proceedings
would be nothing short of a mere formality or charade as the court has only to choose
between the valuation of the owner and that of the assessor, and its choice is always
limited to the lower of the two. The court cannot exercise its discretion or
independence in determining what is just or fair. Even a grade school pupil could
substitute for the judge insofar as the determination of constitutional just compensation
is concerned.
In the case of National Housing Authority v. Reyes (123 SCRA 245), this Court upheld
P.D. No. 464, as further amended by P.D. Nos. 794, 1224 and 1259. In this case, the
petitioner National Housing Authority contended that the owner's declaration at
P1,400.00 which happened to be lower than the assessor's assessment, is the just
compensation for the respondent's property under section 92 of P.D. No. 464. On the
other hand, the private respondent stressed that while there may be basis for the
allegation that the respondent judge did not follow the decree, the matter is still subject
to his final disposition, he having been vested with the original and competent authority
to exercise his judicial discretion in the light of the constitutional clauses on due process
and equal protection.
To these opposing arguments, this Court ruled ihat under the conceded facts, there
should be a recognition that the law as it stands must be applied; that the decree having
spoken so clearly and unequivocably calls for obedience; and that on a matter where
the applicable law speaks in no uncertain language, the Court has no choice except to
yield to its command. We further stated that "the courts should recognize that the rule
introduced by P.D. No. 76 and reiterated in subsequent decrees does not upset the
established concepts of justice or the constitutional provision on just compensation for,
precisely, the owner is allowed to make his own valuation of his property."

While the Court yielded to executive prerogative exercised in the form of absolute lawmaking power, its members, nonetheless, remained uncomfortable with the
implications of the decision and the abuse and unfairness which might follow in its
wake. For one thing, the President himself did not seem assured or confident with his
own enactment. It was not enough to lay down the law on determination of just
compensation in P.D. 76. It had to be repeated and reiterated in P.D. 464, P.D. 794, and
P.D. 1533. The provision is also found in P.D. 1224, P.D. 1259 and P.D. 1313. Inspite of
its effectivity as general law and the wide publicity given to it, the questioned provision
or an even stricter version had to be embodied in cases of specific expropriations by
decree as in P.D. 1669 expropriating the Tambunting Estate and P.D. 1670 expropriating
the Sunog Apog area in Tondo, Manila.
In the present petition, we are once again confronted with the same question of
whether the courts under P.D. 1533, which contains the same provision on just
compensation as its predecessor decrees, still have the power and authority to
determine just compensation, independent of what is stated by the decree and to this
effect, to appoint commissioners for such purpose.
This time, we answer in the affirmative.
In overruling the petitioner's motion for reconsideration and objection to the
commissioner's report, the trial court said:
"Another consideration why the Court is empowered to appoint commissioners
to assess the just compensation of these properties under eminent domain
proceedings, is the well-entrenched ruling that 'the owner of property
expropriated is entitled to recover from expropriating authority the fair and full
value of the lot, as of the time when possession thereof was actually taken by
the province, plus consequential damages including attorney's fees from
which the consequential benefits, if any should be deducted, with interest at
the legal rate, on the aggregate sum due to the owner from and after the date
of actual taking.' (Capitol Subdivision, Inc. v. Province of Negros Occidental, 7
SCRA 60). In fine, the decree only establishes a uniform basis for determining
just compensation which the Court may consider as one of the factors in
arriving at 'just compensation,' as envisage in the Constitution. In the words of
Justice Barredo, "Respondent court's invocation of General Order No. 3 of
September 21, 1972 is nothing short of an unwarranted abdication of judicial
authority, which no judge duly imbued with the implications of the paramount
principle of independence of the judiciary should ever think of doing." (Lina v.
Purisima, 82 SCRA 344, 351; Cf. Prov. of Pangasinan v. CFI Judge of Pangasinan,
Br. VIII, 80 SCRA 117) Indeed, where this Court simply follows PD 1533, thereby
limiting the determination of just compensation on the value declared by the
owner or administrator or as determined by the Assessor, whichever is lower, it
may result in the deprivation of the landowner's right of due process to enable
it to prove its claim to just compensation, as mandated by the Constitution. (Uy

v. Genato, 57 SCRA 123). The tax declaration under the Real Property Tax Code
is, undoubtedly, for purposes of taxation."

statements. The Idea of expropriation simply never occurs until a demand is made or a
case filed by an agency authorized to do so.

We are convinced and so rule that the trial court correctly stated that the valuation in
the decree may only serve as a guiding principle or one of the factors in determining just
compensation but it may not substitute the court's own judgment as to what amount
should be awarded and how to arrive at such amount. A return to the earlier wellestablished doctrine, to our mind, is more in keeping with the principle that the judiciary
should live up to its mission "by vitalizing and not denigrating constitutional rights." (See
Salonga v. Cruz Pao, 134 SCRA 438, 462; citing Mercado v. Court of First Instance of
Rizal, 116 SCRA 93.) The doctrine we enunciated in National Housing Authority v. Reyes,
supra, therefore, must necessarily be abandoned if we are to uphold this Court's role as
the guardian of the fundamental rights guaranteed by the due process and equal
protection clauses and as the final arbiter over transgressions committed against
constitutional rights.

It is violative of due process to deny to the owner the opportunity to prove that the
valuation in the tax documents is unfair or wrong. And it is repulsive to basic concepts of
justice and fairness to allow the haphazard work of a minor bureaucrat or clerk to
absolutely prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and arguments pro
and con have been presented, and after all factors and considerations essential to a fair
and just determination have been judiciously evaluated.

The basic unfairness of the decrees is readily apparent.

Just compensation means the value of the property at the time of the taking. It means
a fair and full equivalent for the loss sustained. All the facts as to the condition of the
property and its surroundings, its improvements and capabilities, should be considered.
In this particular case, the tax declarations presented by the petitioner as basis for just
compensation were made by the Lapu-Lapu municipal, later city assessor long before
martial law, when land was not only much cheaper but when assessed values of
properties were stated in figures constituting only a fraction of their true market value.
The private respondent was not even the owner of the properties at the time. It
purchased the lots for development purposes. To peg the value of the lots on the basis
of documents which are out of date and at prices below the acquisition cost of present
owners would be arbitrary and confiscatory.
Various factors can come into play in the valuation of specific properties singled out for
expropriation. The values given by provincial assessors are usually uniform for very wide
areas covering several barrios or even an entire town with the exception of the
poblacion. Individual differences are never taken into account. The value of land is
based on such generalities as its possible cultivation for rice, corn, coconuts, or other
crops. Very often land described as "cogonal" has been cultivated for generations.
Buildings are described in terms of only two or three classes of building materials and
estimates of areas are more often inaccurate than correct. Tax values can serve as
guides but cannot be absolute substitutes for just compensation.
To say that the owners are estopped to question the valuations made by assessors since
they had the opportunity to protest is illusory. The overwhelming mass of land owners
accept unquestioningly what is found in the tax declarations prepared by local assessors
or municipal clerks for them. They do not even look at, much less analyze, the

As was held in the case of Gideon v. Wainwright (93 ALR 2d,733,742):

"In the light of these and many other prior decisions of this Court, it is not surprising
that the Betts Court, when faced with the contention that 'one charged with crime, who
is unable to obtain counsel must be furnished counsel by the State,' conceded that
'[E]xpressions in the opinions of this court lend color to the argument. . .' 316 U.S., at
462, 463, 86 L ed. 1602, 62 S Ct. 1252. The fact is that in deciding as it did-that
"appointment of counsel is not a fundamental right, essential to a fair trial" the Court
in Betts v. Brady made an ubrupt brake with its own well-considered precedents. In
returning to these old precedents, sounder we believe than the new, we but restore
constitutional principles established to achieve a fair system of justice. . ."
We return to older and more sound precedents. This Court has the duty to formulate
guiding and controlling constitutional principles, precepts, doctrines, or rules. (See
Salonga v. Cruz Pano, supra).
The determination of "just compensation" in eminent domain cases is a judicial
function. The executive department or the legislature may make the initial
determinations but when a party claims a violation of the guarantee in the Bill of Rights
that private property may not be taken for public use without just compensation, no
statute, decree, or executive order can mandate that its own determination shall prevail
over the court's findings. Much less can the courts be precluded from looking into the
"just-ness" of the decreed compensation.
We, therefore, hold that P.D. No. 1533, which eliminates the court's discretion to
appoint commissioners pursuant to Rule 67 of the Rules of Court, is unconstitutional
and void. To hold otherwise would be to undermine the very purpose why this Court
exists in the first place.
WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DISMISSED. The
temporary restraining order issued on February 16, 1982 is LIFTED and SET ASIDE.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. L-61293 February 15, 1990

DOMINGO B. MADDUMBA and ANITA C. MADDUMBA, petitioners,
vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, Represented by its Chairman, Board of
Trustees, HONORABLE LEONILO OCAMPO, respondent.
Vicente P. Leus for petitioners.
The Government Corporate Counsel for GSIS.
REGALADO, J.:
This petition for mandamus seeks to compel respondent Government Service Insurance
System (GSIS) to accept Land Bank bonds at their face value as installments payments
for a pre-existing obligation.
The records disclose that on December 10, 1980, respondent GSIS conducted a public
bidding of several foreclosed properties. Included in the properties offered to the public
was a house and lot situated at 3377 New Panaderos Street, Sta. Ana, Manila, covered
by Transfer Certificate of Title No. 4749 of the Register of Deeds of Manila.
Petitioner Domingo B. Maddumba participated in the public bidding and submitted his
sealed bid in the amount of P98,000.00 in Philippine currency. The bid was subject to
the condition that there should be a down payment of 35% of the amount thereof, the
10% constituting the proposal bond with the remaining 25% to be paid after the receipt
of the notice of award or acceptance of the bid. Accordingly, petitioner enclosed with
his sealed bid a manager's check in the amount of P9,500.00 and cash in the amount of
P300.00 to complete the P9,800.00 proposal bond.
Upon the receipt of the notice of award, petitioner offered to pay the additional 25% in
Land Bank bonds at their face value. These bonds were issued to petitioner as payment
for his riceland consisting of twenty-six hectares located in Cordon, Isabela acquired by
the Government from him under Presidential Decree No. 27. However, the GSIS rejected
the offer, hence it was withdrawn by petitioner. Petitioner then offered to pay in cash
1
the remaining 25% down payment "and all future installments." Thereafter, on
November 16, 1981, petitioner paid in cash the balance of the required down payment.

A "Deed of Conditional Sale" was executed by the parties on November 19, 1981, where
the petitioner as vendee agreed to pay the vendor GSIS "the balance of the purchase
price of SIXTY THREE THOUSAND SEVEN HUNDRED FIVE & 50/100 (P63,705.50) PESOS,
Philippine currency, in SIXTY (60) monthly installments of ONE THOUSAND FOUR
HUNDRED SIXTEEN & 69/100 (P1,416.69) PESOS, Philippine currency, at twelve (12%)
2
percent interest per annum, compounded monthly, beginning December 1, 1981."
The first installment in the amount of P1,416.00 was paid by petitioner on December 3,
1981. When the second monthly installment became due, petitioner sent a letter dated
January 5, 1982, to the GSIS Board of Trustees requesting that he be allowed to pay the
monthly amortizations with his Land Bank bonds commencing in January, 1982 until the
3
exhaustion of the said bonds. Petitioner invoked the provisions of Secton 85 of
Republic Act No. 3844, as amended by Presidential Decree No. 251.
The GSIS Board of Trustees, in its Resolution No. 91 adopted on January 22, 1982,
denied petitioner's offer. The board "resolved to reiterate the policy that Land Bank
bonds shall be accepted as payment only at a discounted rate to yield the System 18%
4
at maturity.
In a letter dated February 12, 1982, petitioner asked the Board of Trustees to reconsider
5
Resolution No. 91. Petitioner reiterated his reliance on Section 85 of Republic Act No.
3844, as amended, and further supported his position with the contention that the
policy of the GSIS contravenes the ruling in the case of Gonzales, et al. vs. The
6
Government Insurance System, etc., et al. Likng in the case of ewise, petitioner
submitted an opinion of the Ministry of Agrarian Reform, dated February 12, 1982,
wherein it was stated,a inter alia, that "if the GSIS accepts the Land Bank bonds as
payment thereof, it must accept the same at par or face value. To accept said bonds at a
discounted rate would lessen the credibility of the bonds as instruments of
7
indebtedness."
In a letter dated May 31, 1982, petitioner was advised by the Manager, Acquired Assets
Department, GSIS that Resolution No. 415 was adopted on May 18, 1982 by the GSIS
Board of Trustees denying the request of petitioner. Hence, on August 5, 1982, the
instant original action for mandamus was filed by petitioner.
The issue posed by this petition is whether or not under the provisions of Section 85 of
Republic Act No. 3844, as amended by Presidential Decree No. 251 effective July 21,
1973, the GSIS may be compelled to accept Land Bank bonds at their face value in
payment for a residential house and lot purchased by the bondholder from the GSIS.
The aforesaid provision of law provides:
Sec. 85. Use of Bonds. The bonds issued by the Bank may be used
by the holder thereof and shall be accepted for any of the following:
xxx xxx xxx

2. Payment for the purchase of shares of stock or assets of

government-owned or controlled corporations.
Upon offer by the bondholders, the corporation owned or controlled
by the Government shall, through its Board of Directors, negotiate
with such bondholder with respect to the price and other terms and
conditions of the sale. In case there are various bondholders making
the offer, the one willing to purchase under the terms and conditions
most favorable to the corporation shall be preferred. If no price is
acceptable to the corporation, the same shall be determined by the
Committee of Appraisers composed of three members, one to be
appointed by the corporation, another by the bondholder making the
highest or only offer, and the third by the members so chosen. The
expense of appraisal shall be borne equally by the corporation and the
successful purchaser.
Should the Government offer for sale to the public any or all the
shares of stock or the assets of any of the Government-owned or
controlled corporations, the bidder who offers to pay in bonds of the
Land Bank shall be preferred, provided that the various bids be equal
in every respect in the medium of payment.
xxx xxx xxx
It is not disputed that under the above quoted provisions, a government-owned or
controlled corporation, like the GSIS, is compelled to accept Land Bank bonds as
payment for the purchase of its assets. As a matter of fact, the bidder who offers to pay
in bonds of the Land Bank is entitled to preference. What respondent GSIS is resisting,
however, is its being compelled to accept said bonds at their face value. Respondent, in
support of its stance that it can discount the bonds, avers that "(a) PD 251 has amended
Section 85 of RA 3844 by deleting and eliminatingthe original provision that Land Bank
bonds shall be accepted 'in the amount of their face value'; and (b) to accept the said
bonds at their face value will impair the actuarial solvency of the GSIS and thoroughly
prejudice its capacity to pay death, retirement, insurance, dividends and other benefits
and claims to its more than a million members, the majority of whom are low salaried
8
government employees and workers."

the Land Banks bonds, and thereby reducing their effective value, entails and imposes
an additional burden on his part. It is, in fact, in consideration of this sacrifice that we
extended the rule on liberality in the interpretation of the provisions of Republic Act No.
3844, then known as the Agricultural Land Reform Code, in favor not only of the actual
tillers but the landowners as well. Ita semper fiat relatio ut valeat dispositio. The
interpretation must always be such that the disposition may prevail.
The nature of a Land Bank bond itself fortifies our view that the respondent may be
compelled to accept those bonds at their face value. As explained in an earlier case:
True, the statute does not explicitly provide that Land Bank bonds
shall be accepted at their face value. There can be no question,
however, that such is the intendment of the law particularly in the
absence of any provision expressly permitting discounting, as
differentiated from Republic Act No. 304, or the Backpay Law, as
amended by Republic Acts Nos. 800 and 897, which expressly allows it.
Land Bank bonds are certificates of indebtedness, approved by the
Monetary Board of the Central Bank, fully tax-exempt both as to
principal and income, and bear interest at the rate of 6% per annum
redeemable at the option of the Land Bank at or before maturity,
which in no case shall exceed 25 years. They are fully negotiable and
unconditionally guaranteed by the Government of the Republic of the
Philippines.
These bonds are deemed contracts and the obligations resulting
therefrom fall within the purview of the non-impairment clause of the
Constitution, and any impairment thereof may take any encroachment
in any respect upon the obligation and cannot be permitted. Thus, the
value of these bonds cannot be diminished by any direct or indirect act,
particularly, since said bonds are fully guaranteed by the Government
of the Philippines. They are issued not in the open market nor for the
primary purpose of raising funds or pooling financial resources but in
the captive market of landowners and to facilitate the speedy transfer
of lands to the tenant-farmers in support of the land reform program
of the Government. They are not ordinary commercial paper in that
9
sense subject to discounting (Emphasis supplied).

We cannot agree with respondent.

Respondent's arguments disregard the fact that the provisions of Section 85 are
primarily designed to cushion the impact of dispossession. Not only would there be
inconvenience resulting from dispossession itself, but also from the modes of payment
in financing the acquisition of farm lots. Acceptance of Land Bank bonds, instead of
money, undoubtedly involves a certain degree of sacrifice for the landowner. This, of
course, is in addition to the fact that, in case of expropriation of land covered by land
reform, the landowner will seldom get the compensation he desires. Thus, discounting

We are aware that the above cited cases primarily involved Section 80 of the law as
applied to cases where government financial institutions were compelled to accept Land
Bank bonds at their face value for the discharge of existing encumbrances on parcels of
land given as security even if not an the lands covered by the mortgage were acquired
by the Land Bank under Presidential Decree No. 27. Evidently, however, the variance in
the factual setting would not change the very nature of said bonds by reason of which
payment of pre-existing obligations to government financial institutions at their face or
par value is justified and authorized. It would be hermeneutically unjustified to adopt a

tenuous theory which would subject the parity of Land Bank bonds to qualifications and
distinctions when the law itself does not so provide.

interpretative policies which may thwart such programs or modify

them to nothingness. This is specially compelling with regard to land
reform, the great venture of the government.

The deed of conditional sale which was executed by the parties herein is subject to the
obligation of and guaranteed by the Government under said bonds. Their agreement for
the payment of installments in Philippine currency cannot in any way be construed as an
alteration, nor should it detract from the essence and compulsion, of said obligation
While, in one instance, petitioner offered to pay his future installments in cash, that
offer was obviously not voluntarily made but was exacted from him because of the
refusal of respondent to accept the Land Bank bonds. That incident should not prevent
petitioner from making, and allow respondent to refuse, an alternative mode of
payment authorized by law and under the conditions laid down by this Court.
Respondent cannot rely on the deletion by Presidential Decree No. 251 of the provision
in Section 85 that the bonds shall be accepted in the amount of their face value, and
wrest therefrom an interpretation in support of its thesis. Implied repeals are frowned
upon in this jurisdiction. They are not favored in law and will not be so declared unless
the intent of the legislature is manifest. In the present case, no such intention to effect
changes in the law exists nor is it even apparent. On the contrary, it can be said that
when amendments were made to Section 85, the legislators were fully aware of the
nature of Land Bank bonds, which would necessarily be concordant with the analysis
and explanation subsequently made by the Court in the cases hereinbefore cited. If the
legislature had really been minded to make changes in the policy on the acceptance
value of said bonds, they could have expressly so provided with facility and ease. Thus,
although such amendment by deletion was effected in 1973 and the cases which
clarified this point were decided in 1986 and 1987 on factual situations subsequent to
1973, this argument now posited by respondent based on such amendment was not
taken into account by the Court in laying down its aforequoted doctrinal rulings.
Neither can the respondent complain that the acceptance of said bonds at their face
value will impair its actuarial solvency. We are constrained to quote
from Gonzales again, that "(w)hatever unfavorable results the acceptance may have on
its finances, the effects must be deemed to have been intended by Presidential Decree
No. 251, particularly, when it provided for the payment in bonds to government lending
institutions their 'existing charters to the contrary notwithstanding.' If iniquitous to said
institutions, it remains now with the legislative branch to make the necessary revisions if
desired. The traditional role assigned to the Judiciary is to implement and not to thwart
fundamental policy goals."
It is apropos to recall, all this juncture, our reminder in the aforecited case of Philippine
National Bank vs. Amores, et al., which applies with equal force to herein respondent
and the present case:
Suffice it to mention that the petitioner is a government lending
institution and as such, it has the obligation to support unequivocably
government programs already on stream and not to introduce its own

The preamble of PD 251 eloquently articulates government intent to

implement the state policy of 'diverting landlord capital in agriculture
to industrial development' by 'mobilization and harnessing properly all
available government resources for the realization of the desired
agrarian reform program.' For agrarian reform cannot be fully realized
without the intervention of the governmentparticularly in the
payment of just compensation. Surely, the tenant by himself does not
have and cannot afford the wherewithal to defray the cost of the land
tranferred to him. It is only with the full support and active assistance
of the government principally through its financial institutions that
payment of just compensation to the landowner may be realized. ...
(Emphasis supplied).
WHEREFORE, the writ of mandamus prayed for is hereby GRANTED. Respondent
Government Service Insurance System is ordered to accept the bonds issued by the
Land Bank of the Philippines at their par or face value.
SO ORDERED.
Melencio-Herrera (Chairperson), Paras, Padilla and Sarmiento, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

On October 29, 1974, a complaint for eminent domain was filed by petitioner MERALCO
against forty-two (42) defendants with the Court of First Instance (now Regional Trial
Court) of Rizal, Branch XXII, Pasig, Metro Manila.

FIRST DIVISION

The complaint alleges that for the purpose of constructing a 230 KV Transmission line
from Barrio Malaya to Tower No. 220 at Pililla, Rizal, petitioner needs portions of the
land of the private respondents consisting of an aggregate area of 237,321 square
meters. Despite petitioner's offers to pay compensation and attempts to negotiate with
the respondents', the parties failed to reach an agreement.

G.R. No. L-59791 February 13, 1992

MANILA ELECTRIC COMPANY, petitioner,
vs.
THE HONORABLE GREGORIO G. PINEDA, Presiding Judge, Court of First Instance of
Rizal, Branch XXI, Pasig, Metro Manila, TEOFILO ARAYON, SR., GIL DE GUZMAN,
LUCITO SANTIAGO and TERESA BAUTISTA, respondents.

Private respondents question in their motion to dismiss dated December 27, 1974 the
petitioner's legal existence and the area sought to be expropriated as too excessive.
On January 7, 1975, respondents Gil de Guzman and Teresa Bautista filed a motion for
contempt of court alleging, among other things that petitioner's corporate existence
had expired in 1969 and therefore it no longer exists under Philippine Laws.

Quiason, Makalintal & Barot for petitioner.

Gil P. De Guzman Law Offices for private respondents.
MEDIALDEA, J.:
This is a petition for review on certiorari on pure question of law seeking the
nullification of the orders issued by the respondent Judge Gregorio G. Pineda, in his
capacity as the presiding Judge of the Court of First Instance (now Regional Trial Court)
of Rizal, Branch 21, Pasig, Metro Manila in Civil Case No. 20269, entitled "Manila Electric
Company v. Teofilo Arayon, et al." The aforesaid orders are as follows: (1) the order
dated December 4, 1981 granting the motion for payment of private respondents; (2)
the order dated December 21, 1981 granting the private respondents' omnibus motion;
and (3) the order dated February 9, 1982 adjudging in favor of private respondents the
fair market value of their property at forty pesos (P40.00) per square meter for a total of
P369,720.00 and denying the motions for contempt for being moot and academic and
the motion for reconsideration of the orders dated December 4, 1981 and December
21, 1981 for lack of merit.

But despite the opposition of the private respondents, the court issued an Order dated
January 13, 1975 authorizing the petitioner to take or enter upon the possession of the
property sought to be expropriated.
On July 13, 1976, private respondents filed a motion for withdrawal of deposit claiming
that they are entitled to be paid at forty pesos (P40.00) per square meter or an
approximate sum of P272,000.00 and prayed that they be allowed to withdraw the sum
of P71,771.50 from petitioner's deposit-account with the Philippine National Bank, Pasig
Branch. However, respondents motion was denied in an order dated September 3,
1976.
In the intervening period, Branch XXII became vacant when the presiding Judge Nelly
Valdellon-Solis retired, so respondent Judge Pineda acted on the motions filed with
Branch XXII.
Pursuant to a government policy, the petitioners on October 30, 1979 sold to the
National Power Corporation (Napocor) the power plants and transmission lines,
including the transmission lines traversing private respondents' property.

The antecedent facts giving rise to the controversy at bar are as follows:
Petitioner Manila Electric Company (MERALCO) is a domestic corporation duly organized
and existing under the laws of Philippines. Respondent Honorable Judge Gregorio G.
Pineda is impleaded in his official capacity as the presiding judge of the Court of First
Instance (now Regional Trial Court) of Rizal, Branch XXI, Pasig, Metro Manila. While
private respondents Teofilo Arayon, Sr., Gil de Guzman, Lucito Santiago and Teresa
Bautista are owners in fee simple of the expropriated property situated at Malaya,
Pililla, Rizal.

On February 11, 1980, respondent court issued an Order appointing the members of the
Board of Commissioners to make an appraisal of the properties.
On June 5, 1980, petitioner filed a motion to dismiss the complaint on the ground that it
has lost all its interests over the transmission lines and properties under expropriation
because of their sale to the Napocor. In view of this motion, the work of the
Commissioners was suspended.

On June 9, 1981, private respondents filed another motion for payment. But despite the
opposition of the petitioner, the respondent court issued the first of the questioned
Orders dated December 4, 1981 granting the motion for payment of private
respondents, to wit:
As prayed for by defendants Teofilo Arayon, Lucito Santiago, Teresa
Bautista and Gil de Guzman, thru counsel Gil de Guzman, in their
Motion for Payment, for reasons therein stated, this Court hereby
orders the plaintiff to pay the movants the amount of P20,400.00 for
the expropriated area of 6,800 square meters, at P3.00 per square
meter without prejudice to the just compensation that may be proved
in the final adjudication of this case.
The aforesaid sum of P20,400.00 having been deposited by plaintiff in
the Philippine National Bank (Pasig Branch) under Savings Account No.
9204, let the Deputy Sheriff of this Branch Mr. Sofronio Villarin
withdraw said amount in the names of Teofilo Arayon, Lucito Santiago,
Teresa Bautista and Gil de Guzman, the said amount to be delivered to
the defendant's counsel Atty. Gil de Guzman who shall sign for the
receipt thereof.
SO ORDERED. (Rollo, p. 108)
On December 15, 1981, private respondents filed an Omnibus Motion praying that they
be allowed to withdraw an additional sum of P90,125.50 from petitioner's depositaccount with the Philippine National Bank.
By order dated December 21, 1981, the respondent court granted the Omnibus Motion
hereunder quoted as follows:
Acting on the Omnibus Motion dated December 15, 1981 filed by Atty.
Gil de Guzman, counsel for Teofilo Arayon, Sr., Lucito Santiago,
Teresita Bautista and for himself, and it appearing that there is
deposited in the bank in trust for them the amount of P90,125.50 to
guarantee just compensation of P272,000.00, thereby leaving a
balance of P161,475.00 still payable to them, the same is hereby
GRANTED.
Mr. Nazario Nuevo and Marianita Burog, respectively the Manager
and Cashier, Philippine National Bank, Pasig Branch, Pasig, Metro
Manila are hereby ordered to allow Sheriff Sofronio Villarin to
withdraw and collect from the bank the amount of P90,125.50 under
Savings Account No. 9204 and to deliver the same to Atty. Gil de
Guzman upon proper receipt, pending final determination of just
compensation.

SO ORDERED. (Rollo, p. 120)

Private respondents filed another motion dated January 8, 1982 praying that petitioner
be ordered to pay the sum of P169, 200.00.
On January 12, 1982 petitioner filed a motion for reconsideration of the Orders dated
December 4, 1981 and December 21, 1981 and to declare private respondents in
contempt of court for forging or causing to be forged the receiving stamp of petitioner's
counsel and falsifying or causing to be falsified the signature of its receiving clerk in their
Omnibus Motion.
In response to private respondents' motion for payment dated January 8, 1982,
petitioner filed an opposition alleging that private respondents are not entitled to
payment of just compensation at this stage of the proceeding because there is still no
appraisal and valuation of the property.
On February 9, 1982 the respondent court denied the petitioner's motion for
reconsideration and motion for contempt, the dispositive portion of which is hereunder
quoted as follows:
Viewed in the light of the foregoing, this Court hereby adjudges in
favor of defendants Teofilo Arayon, Sr., Lucito Santiago, Teresita
Bautista and Atty. Gil de Guzman the fair market value of their
property taken by MERALCO at P40.00 per square meter for a total of
P369,720.00, this amount to bear legal interest from February 24,
1975 until fully paid plus consequential damages in terms of attorney's
fees in the sum of P10,000.00, all these sums to be paid by MERALCO
to said defendants with costs of suit, minus the amount of
P102,800.00 already withdrawn by defendants.
For being moot and academic, the motions for contempt are DENIED;
for lack of merit, the motion for reconsideration of the orders of
December 4, 1981 and December 21, 1981 is also DENIED.
SO ORDERED. (Rollo, p. 211-212)
Furthermore, the respondent court stressed in said order that "at this stage, the Court
starts to appoint commissioners to determine just compensation or dispenses with
them and adopts the testimony of a credible real estate broker, or the judge himself
would exercise his right to formulate an opinion of his own as to the value of the land in
question. Nevertheless, if he formulates such an opinion, he must base it upon
competent evidence." (Rollo, p. 211)
Hence, this petition.

Subsequently, the respondent court issued an Order dated March 22, 1982 granting the
private respondents' motion for execution pending appeal, thus requiring petitioner to
deposit P52,600.00 representing the consideration paid by Napocor for the property it
bought from petitioner which includes the subject matter of this case, computed at
P200.55 per square meter and to render an accounting.
On March 26, 1982, petitioner filed a petition for preliminary injunction with this Court
seeking to enjoin respondent judge and all persons acting under him from enforcing the
Order dated March 22, 1982.
This Court issued a temporary restraining order addressed to respondent judge. A
motion to lift the restraining order was filed by the respondents. Despite a series of
oppositions and motions to lift the said order, this Court reiterated its stand and noted
that the restraining order is still effective.
The petitioner strongly maintains that the respondent court's act of determining and
ordering the payment of just compensation to private respondents without formal
presentation of evidence by the parties on the reasonable value of the property
constitutes a flagrant violation of petitioner's constitutional right to due process. It
stressed that respondent court ignored the procedure laid down by the law in
determining just compensation because it formulated an opinion of its own as to the
value of the land in question without allowing the Board of Commissioners to hold
hearings for the reception of evidence.
On the other hand, private respondents controvert the position of the petitioner and
contend that the petitioner was not deprived of due process. They agreed with
respondent court's ruling dispensing the need for the appointment of a Board of
Commissioners to determine just compensation, thus concluding that the respondent
court did not err in determining just compensation.
Furthermore, petitioner argues that the respondent judge gravely abused his discretion
in granting the motion for execution pending appeal and consequently denying the
petitioner's motion to dismiss. Respondent judge should have ordered that Napocor be
impleaded in substitution of petitioner or could have at least impleaded both the
Napocor and the petitioner as party plaintiffs.
The controversy boils down to the main issue of whether or not the respondent court
can dispense with the assistance of a Board of Commissioners in an expropriation
proceeding and determine for itself the just compensation.
The applicable laws in the case at bar are Sections 5 and 8 of Rule 67 of the Revised
Rules of Court. The said sections particularly deal with the ascertainment of
compensation and the court's action upon commissioners' report, to wit:
Sec. 5. Upon the entry of the order of condemnation, the court shall
appoint not more than three (3) competent and disinterested persons

as commissioners to ascertain and report to the court the just

compensation for the property sought to be taken. The order of
appointment shall designate the time and place of the first session of
the hearing to be held by the commissioners and specify the time
within which their report is to be filed with the court.
xxx xxx xxx
Sec. 8. Upon the expiration of the period of ten (10) days referred to in
the preceding section, or even before the expiration of such period
but after all the interested parties have filed their objections to the
report or their statement of agreement therewith, the court may,
after hearing, accept the report and render judgment in accordance
therewith; or, for cause shown, it may recommit the same to the
commissioners for further report of facts; or it may set aside the
report and appoint new commissioners, or it may accept the report in
part and reject it in part; and it may make such order or render such
judgment as shall secure to the plaintiff the property essential to the
exercise of his right of condemnation, and to the defendant just
compensation for the property so taken.
We already emphasized in the case of Municipality of Bian v. Hon. Jose Mar
Garcia (G.R. No. 69260, December 22, 1989, 180 SCRA 576, 583-584) the procedure for
eminent domain, to wit:
There are two (2) stages in every action of expropriation. The first is
concerned with the determination of the authority of the plaintiff to
exercise the power of eminent domain and the propriety of its
exercise in the context of the facts involved in the suit. It ends with an
order, if not of dismissal of the action, "of condemnation declaring
that the plaintiff has a lawful right to take the property sought to be
condemned, for the public use or purpose described in the complaint,
upon the payment of just compensation to be determined as of the
date of the filing of the complaint". An order of dismissal, if this be
ordained, would be a final one, of course, since it finally disposes of
the action and leaves nothing more to be done by the Court on the
merits. So, too, would an order of condemnation be a final one, for
thereafter, as the Rules expressly state, in the proceedings before the
Trial Court, "no objection to the exercise of the right of condemnation
(or the propriety thereof) shall be filed or heard."
The second phase of the eminent domain action is concerned with the
determination by the Court of "the just compensation for the property
sought to be taken." This is done by the Court with the assistance of
not more than three (3) commissioners. The order fixing the just
compensation on the basis of the evidence before, and findings of, the

commissioners would be final, too. It would finally dispose of the

second stage of the suit, and leave nothing more to be done by the
Court regarding the issue. Obviously, one or another of the parties
may believe the order to be erroneous in its appreciation of the
evidence or findings of fact or otherwise. Obviously, too, such a
dissatisfied party may seek reversal of the order by taking an appeal
therefrom.
Respondent judge, in the case at bar, arrived at the valuation of P40.00 per square
meter on a property declared for real estate tax purposes at P2.50 per hectare on the
basis of a "Joint Venture Agreement on Subdivision and Housing Projects" executed by
A.B.A Homes and private respondents on June 1, 1972. This agreement was merely
attached to the motion to withdraw from petitioner's deposit. Respondent judge arrived
at the amount of just compensation on its own, without the proper reception of
evidence before the Board of Commissioners. Private respondents as landowners have
not proved by competent evidence the value of their respective properties at a proper
hearing. Likewise, petitioner has not been given the opportunity to rebut any evidence
that would have been presented by private respondents. In an expropriation case such
as this one where the principal issue is the determination of just compensation, a trial
before the Commissioners is indispensable to allow the parties to present evidence on
the issue of just compensation. Contrary to the submission of private respondents, the
appointment of at least three (3) competent persons as commissioners to ascertain just
compensation for the property sought to be taken is a mandatory requirement in
expropriation cases. While it is true that the findings of commissioners may be
disregarded and the court may substitute its own estimate of the value, the latter may
only do so for valid reasons, i.e., where the Commissioners have applied illegal principles
to the evidence submitted to them or where they have disregarded a clear
preponderance of evidence, or where the amount allowed is either grossly inadequate
or excessive (Manila Railroad Company v. Velasquez, 32 Phil. 286). Thus, trial with the
aid of the commissioners is a substantial right that may not be done away with
capriciously or for no reason at all. Moreover, in such instances, where the report of the
commissioners may be disregarded, the trial court may make its own estimate of value
from competent evidence that may be gathered from the record. The aforesaid joint
venture agreement relied upon by the respondent judge, in the absence of any other
proof of valuation of said properties, is incompetent to determine just compensation.
Prior to the determination of just compensation, the property owners may rightfully
demand to withdraw from the deposit made by the condemnor in eminent domain
proceedings. Upon an award of a smaller amount by the court, the property owners are
subject to a judgment for the excess or upon the award of a larger sum, they are
entitled to a judgment for the amount awarded by the court. Thus, when the
respondent court granted in the Orders dated December 4, 1981 and December 21,
1981 the motions of private respondents for withdrawal of certain sums from the
deposit of petitioner, without prejudice to the just compensation that may be proved in
the final adjudication of the case, it committed no error.

Records, specifically Meralco's deed of sale dated October 30, 1979, in favor of Napocor
show that the latter agreed to purchase the parcels of land already acquired by Meralco,
the rights, interests and easements over those parcels of land which are the subject of
the expropriation proceedings under Civil Case No. 20269, (Court of First Instance of
Rizal, Branch XXII), as well as those parcels of land occupied by Meralco by virtue of
grant of easements of right-of-way (see Rollo, pp. 341-342). Thus, Meralco had already
ceded and in fact lost all its rights and interests over the aforesaid parcels of land in
favor of Napocor. In addition, the same contract reveals that the Napocor was
previously advised and actually has knowledge of the pending litigation and proceedings
against Meralco (see Rollo, pp. 342-343). Hence, We find the contention of the
petitioner tenable. It is therefore proper for the lower court to either implead the
Napocor in substitution of the petitioner or at the very least implead the former as party
plaintiff.
All premises considered, this Court is convinced that the respondent judge's act of
determining and ordering the payment of just compensation without the assistance of a
Board of Commissioners is a flagrant violation of petitioner's constitutional right to due
process and is a gross violation of the mandated rule established by the Revised Rules of
Court.
ACCORDINGLY, the petition is GRANTED and the order dated February 9, 1982 issued by
the respondent judge insofar as it finally determined the amount of just compensation
is nullified. This case is hereby ordered remanded to the lower court for trial with the
assistance of a Board of Commissioners. Further, the National Power Corporation is
impleaded as party plaintiff therein.
SO ORDERED.
Narvasa, C.J., Cruz and Grio-Aquino, JJ., concur.

THIRD DIVISION

compensate insisting that the property is public land and that it had already paid
financial assistance to Marawi City in exchange for the rights over the property.

[G.R. No. 113194. March 11, 1996]

Mangondato claimed that the subject land is his duly registered private property
covered by Transfer Certificate of Title No. T-378-A in his name, and that he is not privy
to any agreement between NAPOCOR and Marawi City and that any payment made to
said city cannot be considered as payment to him.

NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS and

MACAPANTON MANGONDATO, respondents.
DECISION
PANGANIBAN, J.:

More than a decade later NAPOCOR acceded to the fact that the property belongs to
Mangondato.

At what point in time should the value of the land subject of expropriation be
computed: at the date of the taking or the date of the filing of the complaint for
eminent domain? This is the main question posed by the parties in this petition for
[1]
[2]
review on certiorari assailing the Decision of the Court of Appeals which affirmed in
[3]
toto the decision of the Regional Trial Court ofMarawi City. The dispositive portion of
[4]
the decision of the trial court reads:
WHEREFORE, the prayer in the recovery case for Napocors surrender of the property is
denied but Napocor is ordered to pay monthly rentals in the amount of P15,000.00 from
1978 up to July 1992 with 12% interest per annum from which sum the amount of
P2,199,500.00 should be deducted; and the property is condemned in favor of Napocor
effective July 1992 upon payment of the fair market value of the property at One
Thousand (P1,000.00) Pesos per square meter or a total of Twenty-One Million Nine
Hundred Ninety-Five Thousand (P21,995,000.00) Pesos.

At the outset, in March, 1990, NAPOCORs regional legal counsel, pursuant to Executive
Order No. 329 dated July 11, 1988 requested Marawi Citys City Appraisal Committee to
appraise the market value of the property in Saduc, Marawi City affected by the
infrastructure projects of NAPOCOR without specifying any particular land-owner. The
City Appraisal Committee in its Minutes dated March 8, 1990, fixed the fair market value
[7]
as follows:
Land Fair Market Value Per Sq. M.
Price Per Sq. M Price per Sq. M.
Along the City Not in the City
National Highway National Highway
P150 Residential Lot P100
P250 Commercial Lot P180
P300 Industrial Lot P200

SO ORDERED. Costs against NAPOCOR.

The Facts
[5]

The facts are undisputed by both the petitioner and the private respondent, and
[6]
are quoted from the Decision of the respondent Court, as follows:
In 1978, National Power Corporation (NAPOCOR), took possession of a 21,995 square
meter land which is a portion of Lot 1 of the subdivision plan (LRC) Psd-116159 situated
in Marawi City, owned by Mangondato, and covered by Transfer Certificate of Title No.
T-378-A, under the mistaken belief that it forms part of the public land reserved for use
by NAPOCOR for hydroelectric power purposes under Proclamation No. 1354 of the
President of the Philippines dated December 3, 1974.
NAPOCOR alleged that the subject land was until then possessed and administered by
Marawi City so that in exchange for the citys waiver and quitclaim of any right over the
property, NAPOCOR had paid the city a financial assistance of P40.00 per square meter.
In 1979, when NAPOCOR started building its Agus I HE (Hydroelectric Plant) Project,
Mangondato demanded compensation from NAPOCOR. NAPOCOR refused to

(Records, Civil Case No. 610-92, p. 20).

On July 13, 1990, NAPOCORs National Power Board (hereafter NAPOCORs board) passed
Resolution No. 90-225 resolving to pay Mangondato P100.00 per square meter for only
a 12,132 square meter portion of the subject property plus 12% interest per annum
from 1978. However, in the August 7, 1990 board meeting, confirmation of said
resolution was deferred to allow NAPOCORs regional legal counsel to determine
whether P100.00 per square meter is the fair market value. (Records, Civil Case No. 60592, p. 45).
On August 14, 1990, NAPOCORs board passed Resolution No. 90-316 resolving that
Mangondato be paid the base price of P40.00 per square meter for the 12,132 square
meter portion (P485,280.00) plus 12% interest per annum from 1978 (P698,808.00)
pending the determination whether P100.00 per square meter is the fair market value
of the property (id.).

Pursuant to the aforementioned resolution Mangondato was paid P1,184,088.00 (Id., p.

58).
NAPOCORs regional legal counsels findings embodied in 2 memoranda to NAPOCORs
general counsel (dated January 29, 1991 and February 19, 1991) state that
Mangondatos property is classified as industrial, that the market value of industrial lots
in Marawi City when NAPOCOR took possession is P300.00 for those along the national
highway and P200.00 for those not along the highway and that on the basis of recent
Supreme Court decisions, NAPOCOR has to pay not less than P300.00 per square meter.
NAPOCORs general counsel incorporated the foregoing findings in his report to the
board plus the data that the area possessed by NAPOCOR is 21,995 square meters, and
that the legal rate of interest per annum from the time of the taking of the property
alleged to be in 1978, is 12%, but recommended to the board that the fair market value
of the property is P 100.00 per square meter; NAPOCORs board on May 17, 1991 passed
Resolution No. 91-247 resolving to pay Mangondato P100.00 per square meter for the
property excluding 12% interest per annum (id., pp. 50-52).
In a letter dated December 17, 1991, Mangondato disagreed with the NAPOCOR boards
Resolution No. 91-247 pegging the compensation for his land at P 100.00 per square
meter without interest from 1978. Mangondato submitted that the fair market value of
his land is even more than the P300.00 (per) square meter stated in the City Appraisal
Report but that for expediency, he is willing to settle for P300.00 per square meter plus
12% interest per annum from 1978 (id., pp. 53-59).
In another letter dated February 4, 1992, Mangondato reiterated his disagreement to
the P100.00 per square meter compensation without interest. At the same time, to get
partial payment, he asked that he be paid in the meantime, P 100.00 per square meter
without prejudice to pursuing his claim for the proper and just compensation plus
interest thereon (id., p. 60).
On February 12, 1992, NAPOCORs general counsel filed a memorandum for its president
finding no legal impediment if they, in the meantime were to pay Mangondato P100.00
per square meter without prejudice to the final determination of the proper and just
compensation by the board inasmuch as the regional counsel submitted to him (general
counsel) 2 memoranda stating that the appraisal of industrial lots in Marawi City when
NAPOCOR took possession is P300.00 per square meter for those along the national
highway and P200.00 per square meter for those not along the highway, and that
NAPOCOR has to pay not less than P300.00 per square meter plus 12% interest on the
basis of recent Supreme Court decisions. Further, the general counsel submitted that
since the board has already set the purchase price at P100.00 per square meter
(Resolution No. 91-247), NAPOCOR would not be prejudiced thereby (id., pp 60-62)
In March, 1992, the parties executed a Deed of Sale Of A Registered Property where
NAPOCOR acceded to Mangondatos request of provisional payment of P100.00 per
square meter excluding interest and without prejudice to Mangondatos pursuance of
claims for just compensation and interest. Mangondato was paid P1,015,412.00 in

addition to the P1,184,088.00 earlier paid to him by NAPOCOR which payments total
P2,199,500.00 for the 12,995 square meter land (Records, Civil Case No. 610-92, pp. 8587).
In his letter to NAPOCORs president dated April 20, 1992, Mangondato asked for the
payment of P300.00 per square meter plus 12% interest per annum from 1978.
NAPOCORs president, in his memorandum to the board dated April 24,
1992 recommended the approval of Mangondatos request (Records, Civil Case No. 60592, pp. 63-69).
On May 25, 1992, NAPOCORs board passed Resolution No. 92-121 granting its president
the authority to negotiate for the payment of P100.00 per square meter for the land
plus 12% interest per annum from 1978 less the payments already made to
Mangondato and to Marawi City on the portion of his land and with the provisos that
said authorized payment shall be effected only after Agus I HE Project has been placed
in operation and that said payment shall be covered by a deed of absolute sale with a
quitclaim executed by Mangondato (Id., pp. 70-71).
On July 7, 1992, Mangondato filed before the lower court Civil Case No. 605-92 against
NAPOCOR seeking to recover the possession of the property described in the complaint
as Lots 1 and 3 of the subdivision plan (LRC) Psd-116159 against NAPOCOR, the payment
of a monthly rent of P15,000.00 from 1978 until the surrender of the property,
attorneys fees and costs, and the issuance of a temporary restraining order and a writ of
preliminary mandatory injunction to restrain NAPOCOR from proceeding with any
construction and/or improvements on Mangondatos land or from committing any act of
dispossession (id., pp. 1-8).
The temporary restraining order was issued by the lower court. Anent the prayer for the
writ of preliminary mandatory injunction, NAPOCOR filed its Opposition thereto on July
23, 1992 (Id., pp. 17-20).
Before the lower court could resolve the pending incident on the writ of preliminary
mandatory injunction, and instead of filing a motion to dismiss, NAPOCOR, on July 27,
1992, filed also before the lower court, Civil Case No. 610-92 which is a Complaint for
eminent domain against Mangondato over the subject property (Records, Civil Case No.
610-92, pp. 1-3).
On the same date Mangondato filed his Manifestation in Lieu of Answer contending that
the negotiations for payment made by NAPOCOR were virtual dictations on a take it or
leave it basis; that he was given the run-around by NAPOCOR for 15 years; so that there
was no agreement reached as to payment because of NAPOCORs insistence of its own
determination of the price; that he treats the P2,199.500.00 so far received by him as
partial payment for the rent for the use of his property. Mangondato prayed that he be
compensated in damages for the unauthorized taking and continued possession of his
land from 1978 until the filing of the Complaiant (sic) in the expropriation case; that
should the lower court order the expropriation of the subject property, that the just

compensation for the land be reckoned from the time of the filing of the expropriation
case; that the expropriation case be consolidated with the recovery of possession case;
that the restraining order issued in the recovery of possession case be maintained and a
writ of preliminary injunction be at once issued against NAPOCOR; and that NAPOCOR
be ordered to deposit the value of the land as provisionally determined by the lower
court(id., pp. 4-5).
Upon agreement of the parties, the 2 cases were ordered consolidated and the lower
court appointed the following commissioners: Atty. Saipal Alawi, representing the lower
court; Atty. Connie Doromal, representing NAPOCOR; and Mr. Alimbsar A. Ali, from the
City Assessors Office to ascertain and report to the court the just compensation (id., pp.
6-7).
The lower court ordered NAPOCOR to deposit with the Philippine National Bank the
amount of P10,997,500.00, provisionally fixing the value of the land at P500.00 per
square meter P100.00 lower than the assessed value of the land appearing in Tax
Declaration No. 0873 for 1992 which was used as basis by the lower court (id., p. 8).
In its Motion for Reconsideration of the Order For Provisional Deposit[,] NAPOCOR
opposed the provisional value quoted by the lower court saying that the basis of the
provisional value of the land should be the assessed value of the property as of the time
of the taking which in this case is 1978 when the assessed value of the land under Tax
Declaration No. 7394 was P100.00 per square meter (id., pp. 28-32). In reply,
Mangondato filed his Opposition To Motion For Reconsideration Of the Order For
Provisional Deposit (id., pp. 44-46). However, the lower court did not rule on the
provisional value to be deposited and chose to go right into the determination of just
compensation on the ground that the provisional valuation could not be decided
without going into the second phase of expropriation cases which is the determination
by the court of the just compensation for the property soguht (sic) to be taken
(NPC vs. Jocson, supra) (Decision, p. 5).
On August 5, 1992, Mangondato filed a Motion To Dismiss in the expropriation case
alleging that NAPOCOR filed its Complaint for eminent domain not for the legitimate
aim of pursuing NAPOCORs business and purpose but to legitimize a patently illegal
possession and at the same time continue dictating its own valuation of the property.
Said motion was however, later withdrawn by Mangondato (id.,pp. 37-39 and 47).
In the meanwhile, the commissioners filed their respective reports. On July 28, 1992,
Commissioner Doromal filed his report recommending a fair market value of P300.00
per square meter as of November 23, 1978, (Id., pp. 11-27). On August 6, 1992,
Commissioners Alawi and Ali filed their joint report recommending a fair market value
of P1,000.00 per square meter as of 1992 (id., pp. 40-42).
After the parties filed their respective comments to the commissioners reports, on
August 21, 1992, the lower court rendered its decision denying Mangondato recovery of
possession of the property but ordering NAPOCOR to pay a monthly rent of P15,000.00

from 1978 up to July 1992 with 12% interest per annum and condemning the property
in favor of NAPOCOR effective July, 1992 upon the payment of P1,000.00 per square
meter or a total of P2 1,995,000.00 as just compensation.
Mangondato filed a Motion For Partial Execution Pending Appeal which was granted by
the lower court in an Order dated September 15, 1992 (id., pp. 151-152 and 157-160).
However, on appeal by NAPOCOR via a Petition For Certiorari in CA-G.R. SP No. 28971 to
this Court, said Order was annulled and set aside (Rollo, pp. 30-37).
NAPOCOR filed a Motion For Reconsideration of the decision alleging that the fair
market value of the property at the time it was taken allegedly in 1978 is P40.00 per
square meter. After Mangondato filed his Opposition To Motion For Reconsideration
the lower court denied NAPOCORs motion for reconsideration in an Order
dated September 15, 1992 (Records, Civil Case No. 610-92, pp. 145-149).
In the meanwhile, on August 7, 1992, Mangondato filed an Ex-Parte Manifestation To
Correct Clerical Error of Description of Property submitting that Lot 3 which does not
form part of the subject property was included in the Complaint because of a clerical
error inadvertently committed by the typist who continuously copied the description of
the property covered by Transfer Certificate of Title No. T-378-A, and thus praying that
the portion of the Complaint describing Lot 3 be deleted (Records, Civil Case No. 605-92,
p. 22).
On August 12, 1992, the intervenors filed their Motion For Intervention and Intervention
claiming interest against each of the parties on the ground that Lot 3 which is included
in the Complaint has since been conveyed by Mangondato to their predecessors-ininterest and that they are entitled to just compensation from NAPOCOR should the
lower court decide that NAPOCOR is entitled to expropriate the entire area described in
the Complaint (id., pp. 23-34).
In an Order dated August 19, 1992 the lower court granted intervenors Motion For
Intervention (id., p. 72).
On August 25, 1992, the lower court ordered the deletion of the portion in the
Complaint describing Lot 3 and declared that intervenors Motion For Intervention has
become moot (id., p. 82).
On October 13, 1992 the intervenors filed their Motion To Reconsider The Order
Of August 25, 1992 and The Decision Dated August 21, 1992 which was however denied
by the lower court in an Order dated November 26, 1992 (id., pp. 162-184).
The Issues
Two errors were raised before this Court by the petitioner, thus:
ASSIGNMENT OF ERRORS

[8]

THE RESPONDENT COURT ERRED IN AFFIRMING THAT THE JUST COMPENSATION FOR
THE PROPERTY IS ITS VALUE IN 1992, WHEN THE COMPLAINT WAS FILED, AND NOT ITS
VALUE IN 1978, WHEN THE PROPERTY WAS TAKEN BY PETITIONER.

The general rule, however, admits of an exception: where this Court fixed the
value of the property as of the date it was taken and not at the date of the
commencement of the expropriation proceedings.
[14]

THE COURT ERRED IN FIXING THE VALUE OF JUST COMPENSATION AT P 1,000.00 PER
SQUARE METER INSTEAD OF P40.00 PER SQUARE METER.
The petitioner summarized the two issues it raised by asking whether or not the
respondent court was justified in deviating from the well-settled doctrine that just
compensation is the equivalent of the value of the property taken for public use
[9]
reckoned from the time of taking. In his Comment, private respondent worded the
[10]
issues as follows:
x x x As stated by the respondent court, Napocor, in its appeal
x x x avers that the taking of the proerty (sic) should not be reckoned as of the year 1992
when NAPOCOR filed its Complaint for eminent domain but as of the year 1978 when it
took possession of the property, and that the just compensation, determined as it
should be, on the basis of the value of the property as of 1978, as P40.00 per square
meter.
The petitioner, after failing to persuade both lower courts, reiterated before us its
proposition (with cited cases) that when the taking of property precedes the filing of the
judicial proceeding, the value of the property at the time it was taken shall be the basis
[11]
for the payment of just compensation.
The First Issue: Date of Taking or Date of Suit?
The general rule in determining just compensation in eminent domain is the value
[12]
of the property as of the date of the filing of the complaint, as follows:
Sec. 4. Order of Condemnation. When such a motion is overruled or when any party fails
to defend as required by this rule, the court may enter an order of condemnation
declaring that the plaintiff has a lawful right to take the property sought to be
condemned, for the public use or purpose described in the complaint, upon the
payment of just compensation to be determined as of the date of the filing of the
complaint x x x (Italics supplied).

In the old case of Provincial Government of Rizal vs. Caro de Araullo, the Court
ruled that x x x the owners of the land have no right to recover damages for this
unearned increment resulting from the construction of the public improvement
(lengthening of Taft Avenue from Manila to Pasay) for which the land was taken. To
permit them to do so would be to allow them to recover more than the value of the
land at the time when it was taken, which is the true measure of the damages, or just
compensation, and would discourage the construction of important public
improvements.
[15]

In subsequently cases, the Court, following the above doctrine, invariably held
that the time of taking is the critical date in determining lawful or just compensation.
Justifying this stance, Mr. Justice (later Chief Justice) Enrique Fernando, speaking for the
Court in Municipality of La Carlota vs. The Spouses Felicidad Baltazar and Vicente
[16]
Gan, said, x x x the owner as is the constitutional intent, is paid what he is entitled to
according to the value of the property so devoted to public use as of the date of the
taking. From that time, he had been deprived thereof. He had no choice but to submit.
He is not, however, to be despoiled of such a right. No less than the fundamental law
guarantees just compensation. It would be an injustice to him certainly if from such a
period, he could not recover the value of what was lost. There could be on the other
hand, injustice to the expropriator if by a delay in the collection, the increment in price
would accrue to the owner. The doctrine to which this Court has been committed is
intended precisely to avoid either contingency fraught with unfairness.
Simply stated, the exception finds application where the owner would be given
undue incremental advantages arising from the use to which the government devotes
the property expropriated -as for instance, the extension of a main thoroughfare as was
the case in Caro de Araullo. In the instant case, however, it is difficult to conceive of how
there could have been an extra-ordinary increase in the value of the owners land arising
from the expropriation, as indeed the records do not show any evidence that the
valuation of P1,000.00 reached in 1992 was due to increments directly caused by
petitioners use of the land. Since the petitioner is claiming an exception to Rule 67,
[17]
Section 4, it has the burden of proving its claim that its occupancy and use - not
ordinary inflation and increase in land values - was the direct cause of the increase in
valuation from 1978 to 1992.
Side Issue: When is There Taking of Property?

Normally, the time of the taking coincides with the filing of the complaint for
expropriation. Hence, many rulings of this Court have equated just compensation with
the value of the property as of the time of filing of the complaint consistent with the
above provision of the Rules. So too, where the institution of the action precedes entry
into the property, the just compensation is to be ascertained as of the time of the filing
[13]
of the complaint.

But there is yet another cogent reason why this petition should be denied and why
the respondent Court should be sustained. An examination of the undisputed factual
environment would show that the taking was not really made in 1978.
This Court has defined the elements of taking as the main ingredient in the
[18]
exercise of power of eminent domain, in the following words:

A number of circumstances must be present in the taking of property for purposes of

eminent domain: (1) the expropriator must enter a private property; (2) the entrance
into private property must be for more than a momentary period; (3) the entry into the
property should be under warrant or color of legal authority; (4) the property must be
devoted to a public use or otherwise informally appropriated or injuriously affected; and
(5) the utilization of the property for public use must be in such a way to oust the owner
and deprive him of all beneficial enjoyment of the property. (Italics supplied)
In this case, the petitioners entrance in 1978 was without intent to expropriate or was
not made under warrant or color of legal authority, for it believed the property was
public land covered by Proclamation No. 1354. When the private respondent raised his
claim of ownership sometime in 1979, the petitioner flatly refused the claim for
compensation, nakedly insisted that the property was public land and wrongly justified
its possession by alleging it had already paid financial assistance to Marawi City in
exchange for the rights over the property. Only in 1990, after more than a decade of
beneficial use, did the petitioner recognize private respondents ownership and
negotiate for the voluntary purchase of the property. A Deed of Sale with provisional
payment and subject to negotiations for the correct price was then executed.
Clearly, this is not the intent nor the expropriation contemplated by law. This is a simple
attempt at a voluntary purchase and sale. Obviously, the petitioner neglected and/or
refused to exercise the power of eminent domain.
Only in 1992, after the private respondent sued to recover possession and
petitioner filed its Complaint to expropriate, did petitioner manifest its intention to
[19]
exercise the power of eminent domain. Thus, the respondent Court correctly held:
If We decree that the fair market value of the land be determined as of 1978, then We
would be sanctioning a deceptive scheme whereby NAPOCOR, for any reason other than
for eminent domain would occupy anothers property and when later pressed for
payment, first negotiate for a low price and then conveniently expropriate the property
when the land owner refuses to accept its offer claiming that the taking of the property
for the purpose of eminent domain should be reckoned as of the date when it started to
occupy the property and that the value of the property should be computed as of the
date of the taking despite the increase in the meantime in the value of the property.
[20]

In Noble vs. City of Manila, the City entered into a lease-purchase agreement of
a building constructed by the petitioners predecessor-in-interest in accordance with the
specifications of the former. The Court held that being bound by the said contract, the
City could not expropriate the building. Expropriation could be resorted to only when it
is made necessary by the opposition of the owner to the sale or by the lack of any
agreement as to the price. Said the Court:
The contract, therefore, in so far as it refers to the purchase of the building, as we have
interpreted it, is in force, not having been revoked by the parties or by judicial decision.
This being the case, the city being bound to buy the building at an agreed price, under a

valid and subsisting contract, and the plaintiff being agreeable to its sale, the
expropriation thereof, as sought by the defendant, is baseless.Expropriation lies only
when it is made necessary by the opposition of the owner to the sale or by the lack of
any agreement as to the price. There being in the present case a valid and subsisting
contract, between the owner of the building and the city, for the purchase thereof at an
agreed price, there is no reason for the expropriation. (Italics supplied)
In the instant case, petitioner effectively repudiated the deed of sale it entered
into with the private respondent when it passed Resolution No. 92-121
on May 25, 1992 authorizing its president to negotiate, inter alia, that payment shall be
effected only after Agus I HE project has been placed in operation. It was only then that
petitioners intent to expropriate became manifest as private respondent disagreed and,
barely a month after, filed suit.
The Second Issue: Valuation
We now come to the issue of valuation.
The fair market value as held by the respondent Court, is the amount of P1,000.00
per square meter. In an expropriation case where the principal issue is the
determination of just compensation, as is the case here, a trial before Commissioners is
indispensable to allow the parties to present evidence on the issue of just
[21]
compensation. Inasmuch as the determination of just compensation in eminent
[22]
domain cases is a judicial function and factual findings of the Court of Appeals are
conclusive on the parties and reviewable only when the case falls within the recognized
[23]
exceptions, which is not the situation obtaining in this petition, we see no reason to
disturb the factual findings as to valuation of the subject property. As can be gleaned
from the records, the court-and-the-parties-appointed commissioners did not abuse
their authority in evaluating the evidence submitted to them nor misappreciate the
clear preponderance of evidence. The amount fixed and agreed to by the respondent
[24]
[25]
appellate Court is not grossly exorbitant. To quote:
Commissioner Ali comes from the Office of the Register of Deeds who may well be
considered an expert, with a general knowledge of the appraisal of real estate and the
prevailing prices of land in the vicinity of the land in question so that his opinion on the
valuation of the property cannot be lightly brushed aside.
The prevailing market value of the land is only one of the determinants used by the
commissioners report the others being as herein shown:
xxx xxx xxx
Commissioner Doromals report, recommending P300.00 per square meter, differs from
the 2 commissioners only because his report was based on the valuation as of 1978 by
the City Appraisal Committee as clarified by the latters chairman in response to
NAPOCORs general counsels query (id., pp. 128-129).

In sum, we agree with the Court of Appeals that petitioner has failed to show why
it should be granted an exemption from the general rule in determining just
compensation provided under Section 4 of Rule 67. On the contrary, private respondent
has convinced us that, indeed, such general rule should in fact be observed in this case.
WHEREFORE, the petition is hereby DISMISSED and the judgment appealed from
AFFIRMED, except as to the interest on the monthly rentals, which is hereby reduced
from twelve percent (12%) to the legal rate of six percent (6%) per annum. Costs against
the petitioner.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

General with the recommendation that payment be made on the basis of the
"current and fair market value, . . . and not on the fair market value at the time of
7
taking.

FIRST DIVISION

The Commission on Audit, however, declined to adopt the recommendation. In a

decision handed down on September 26, 1973, the Acting Chairman ruled that "the
amount of compensation to be paid to the claimants is to be determined as of the time
8
of the taking of the subject lots, i.e. 1947. The ruling was reiterated by the Commission
on September 8, 1978, and again on January 25, 1979 when it denied the Ansaldos'
9
motion for reconsideration. It is these rulings of the Commission on Audit that the
Ansaldos have appealed to this Court.

G.R. No. L-50147 August 3, 1990

JOSE MA. ANSALDO, for himself and as attorney-in-fact of Maria Angela
Ansaldo, petitioners
vs.
FRANCISCO S. TANTUICO, JR., Acting Chairman, Commission on Audit, and BALTAZAR
AQUINO, Minister of Public Highways, respondents.
Misa & LozadaBito for petitioners.
NARVASA, J.:
This expropriation case is quite unique. Two lots of private ownership were taken by the
Government and used for the widening of a road more than forty-three years ago,
without benefit of an action of eminent domain or agreement with its owners, albeit
without protest by the latter.
The lots belong to the petitioners, Jose Ma. Ansaldo and Maria Angela Ansaldo, are
1
covered by title in their names and have an aggregate area of 1,041 square meters.
These lots were taken from the Ansaldos sometime in 1947 by the Department of Public
Work Transportation and Communication and made part of what used to be Sta. Mesa
Street and is now Ramon Magsaysay Avenue at San Juan, Metro Manila. This, to repeat,
without demur on the part of the owners.
Said owners made no move whatever until twenty-six years later. They wrote to ask for
2
compensation for their land on January 22, 1973. Their claim was referred to the
Secretary of Justice who in due course rendered an opinion dated February 22,
3
1973, that just compensation should be paid in accordance with Presidential Decree
4
No. 76. The Decree provided that the basis for the payment of just compensation of
property taken for public use should be the current and fair market value thereof as
declared by the owner or administrator, or such market value as determined by the
5
assessor, whichever was lower. The Secretary of Justice thus advised that the
corresponding expropriation suit be forthwith instituted to fix the just compensation to
be paid to the Ansaldos.
Pursuant to this opinion, the Commissioner of Public Highways requested the Provincial
Assessor of Rizal to make a redetermination of the market value of the Ansaldos'
6
property in accordance with PD 76. The new valuation was made, after which the
Auditor of the Bureau of Public Highways forwarded the Ansaldos' claim to the Auditor

While not decisive of this case, it may be stressed that the provisions of Presidential
Decree No. 76 and its related or successor decrees (Numbered 464, 794 and 1533) no
longer determine the just compensation payable to owners of expropriated property.
Said provisions were, it may be recalled, struck down as unconstitutional and void in
10
1988, in Export Processing Zone Authority v. Dulay, which declared that the mode
therein prescribed for determining just compensation, i. e., on the basis of the value
declared by the owner or administrator or on that determined by the assessor,
whichever is lower, constituted an impermissible encroachment on the judicial
prerogative to resolve the issue in an appropriate proceeding of eminent domain.
Now, nothing in the record even remotely suggests that the land was taken from the
Ansaldos against their will. Indeed, all indications, not the least of which is their silence
for more than two decades, are that they consented to such a taking although they
knew that no expropriation case had been commenced at all. There is therefore no
reason, as regards the Ansaldos' property, to impugn the existence of the power to
expropriate, or the public purpose for which that power was exercised.
The sole question thus confronting the Court involves the precise time at which just
compensation should be fixed, whether as of the time of actual taking of possession by
the expropriating entity or, as the Ansaldos maintain, only after conveyance of title to
the expropriator pursuant to expropriation proceedings duly instituted since it is only at
such a time that the constitutional requirements of due process aside from those of just
compensation may be fully met.
Normally, of course, where the institution of an expropriation action precedes the
taking of the property subject thereof, the just compensation is fixed as of the time of
11
the filing of the complaint. This is so provided by the Rules of Court, the assumption of
possession by the expropriator ordinarily being conditioned on its deposits with the
National or Provincial Treasurer of the value of the property as provisionally ascertained
by the court having jurisdiction of the proceedings.
There are instances, however, where the expropriating agency takes over the property
prior to the expropriation suit, as in this case although, to repeat, the case at bar is quite
extraordinary in that possession was taken by the expropriator more than 40 years prior

to suit. In these instances, this Court has ruled that the just compensation shall be
determined as of the time of taking, not as of the time of filing of the action of eminent
domain.
In the context of the State's inherent power of eminent domain, there is a "taking"
when the owner is actually deprived or dispossessed of his property; when there is a
practical destruction or a material impairment of the value of his property or when he is
12
deprived of the ordinary use thereof. There is a "taking" in this sense when the
expropriator enters private property not only for a momentary period but for a more
permanent duration, for the purpose of devoting the property to a public use in such a
13
manner as to oust the owner and deprive him of all beneficial enjoyment thereof. For
ownership, after all, "is nothing without the inherent rights of possession, control and
enjoyment. Where the owner is deprived of the ordinary and beneficial use of his
property or of its value by its being diverted to public use, there is taking within the
14
Constitutional sense. Under these norms, there was undoubtedly a taking of the
Ansaldos' property when the Government obtained possession thereof and converted it
into a part of a thoroughfare for public use.

paid can be truly just i.e.,"just; not only to the individual whose
property is taken but, to the public, which is to pay for it.
Clearly, then, the value of the Ansaldos' property must be ascertained as of the year
1947, when it was actually taken, and not at the time of the filing of the expropriation
suit, which, by the way, still has to be done. It is as of that time that the real measure of
their loss may fairly be adjudged. The value, once fixed, shall earn interest at the legal
rate until full payment is effected, conformably with other principles laid down by case
17
law.
WHEREFORE, the petition is DENIED, the challenged decision of the Commission on
Audit is AFFIRMED, and the Department of Public Works and Highways is DIRECTED to
forthwith institute the appropriate expropriation action over the land in question so
that the just compensation due its owners may be determined in accordance with the
Rules of Court, with interest at the legal rate of six percent (6%) per annum from the
time of taking until full payment is made. No costs.
SO ORDERED.

It is as of the time of such a taking, to repeat, that the just compensation for the
15
property is to be established. As stated in Republic v. Philippine National Bank,
. . . (W)hen plaintiff takes possession before the institution of the
condemnation proceedings, the value should be fixed as of the time of
the taking of said possession, not of filing of the complaint and the
latter should be the basis for the determination of the value, when the
taking of the property involved coincides with or is subsequent to, the
commencement of the proceedings. Indeed, otherwise, the provision
of Rule 69, Section 3, directing that compensation be determined as of
the date of the filing of the complaint' would never be operative. As
intimated in Republic v. Lara (supra), said provision contemplates
normal circumstances, under which the complaint coincides or even
precedes the taking of the property by the plaintiff.
The reason for the rule, as pointed out in Rpublic v. Larae,

16

is that

. . . (W)here property is taken ahead of the filing of the condemnation

proceedings, the value thereof may be enchanced by the public
purpose for which it is taken; the entry by the plaintiff upon the
property may have depreciated its value thereby; or, there may have
been a natural increase in the value of the property from the time the
complaint is filed, due to general economic conditions. The owner of
private property should be compensated only for what he actually
loses; it is not intended that his compensation shall extend beyond his
loss or injury. And what he loses is only the actual value of his property
at the time it is taken. This is the only way that compensation to be

Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.

FIRST DIVISION

On November 20,

1990, after

repeated

unsuccessful

negotiations

NATIONAL POWER CORPORATION vs. AURELLANO S. TINAGCO, LOURDES S. TIANGCO,

with the respondents, NPC filed with the RTC of Tanay, Rizal a complaint for

& NESTOR S. TINAGCO, respondents

expropriation against them. In time, the respondents filed their answer.

[4]

G.R. No. 170846, February 6, 2007.

On March 14, 1991, the trial court issued a Condemnation Order, granting NPC
the right to take possession of the area sought to be expropriated. In the same Order,

DECISION

the court directed the parties to nominate their respective commissioners, with a third
GARCIA, J.:

member to be nominated and appointed by the court itself, to determine the proper

In this petition for review on certiorari under Rule 45 of the Rules of Court,
petitioner National Power Corporation (NPC) seeks the annulment and setting aside of

amount of just compensation to be paid to the respondents. As constituted in the

manner thus indicated, the board of commissioners was composed of the following: for

[1]

the Decision dated March 14, 2005 of the Court of Appeals (CA) in CA-G.R. CV No.

NPC, Atty. Restituto Mallo of its Legal Department; for the respondents, Mr. Basilio

[2]

53576, as reiterated in its Resolution of December 2, 2005 which denied the

petitioners motion for reconsideration. The assailed decision modified that of the
Regional Trial Court (RTC) of Tanay, Rizal, Branch 80, by increasing the amount of just
compensation due the respondents in an expropriation case filed against them by the
petitioner.

On April 5, 1991, the trial court issued an order directing NPC to pay and
deposit with the Rizal Provincial Treasurer the amount of P81,204.00, representing the

of possession thereof. On April 22, 1991, with NPC having complied with the deposit

Herein respondents Aurellano, Lourdes and Nestor, all surnamed Tiangco, are
the owners of a parcel of land with an area of 152,187 square meters at Barangay
Sampaloc, Tanay, Rizal and registered in their names under TCT No. M-17865 of the

requirement, a writ of possession was issued in its favor.

Thereafter, an ocular inspection of the premises was conducted and hearings
before the board of commissioners were held, during which the Municipal Assessor of
Tanay, Rizal was presented. He submitted a record of the Schedule of Values for

Registry of Deeds of Rizal.

On the other hand, petitioner NPC

is a government-owned and controlled

corporation created for the purpose of undertaking the development and generation of
power from whatever source. NPCs charter (Republic Act No. 6395) authorizes the
corporation to acquire private property and exercise the right of eminent domain.
NPC requires 19,423 square meters of the respondents aforementioned
property, across which its 500Kv Kalayaan-San Jose Transmission Line Project will
[3]

traverse. NPCsSegregation Plan for the purpose shows that the desired right-of-way
will cut through the respondents land, in such a manner that 33,392 square meters
will be leftseparated

Clerk of Court V Ms. Amelia de Guzman Carbonell.

temporary provisional value of the area subject of the expropriation prior to the taking

The facts:

thereof

Afuang, a geodetic engineer and a real estate broker by profession; and for the court,

from

99,372

square

meters

of

the

property.

Within the portion sought to be expropriated stand fruit-bearing tress, such as mango,
avocado, jackfruit, casuy, santol,calamansi, sintones and coconut trees.

taxation purposes and a certification to the effect that the unit value of the respondents
property isP21,000.00 per hectare.
On August 7, 1993, commissioner Basilio Afuang for the respondents filed his
report. He pegged the price of the area sought to be expropriated at P30.00 per square
[5]

meter or P582,690.00 in the aggregate; and for the improvements thereon, Afuang
placed a valuation of P2,093,950.00. The figures are in contrast with the respondents
own valuation of P600,600.00, for the area, and P4,935,500.00, for the improvements.
On September 14, 1993, NPC filed an amended complaint to acquire only
19,423 square meters of the respondents property. The original area of 20,220 square
meters initially sought to be expropriated under the original complaint turned out to be
in excess of the area required.

For its part, NPC made it clear that it is interested only in acquiring an
easement of right-of-way over the respondents property and that ownership of the area
over which the right-of-way will be established shall remain with the respondents. For
this reason, NPC claims that it should pay, in addition to the agreed or adjudged value of
the improvements on the area, only an easement fee in an amount equivalent to ten per
cent (10%) of the market value of the property as declared by the respondents or by the
Municipal Assessor, whichever is lower, as provided for under Section 3-A of Republic
Act No. 6395, as amended by Presidential Decree 938.

[6]

risk and dangerous nature of the transmission line project essentially deprive the
respondents of the use of the area. Nonetheless, she recommended that the
determination of just compensation should be relegated to expert appraisers.

[7]

market value of the property is P2.09 per square meter, or P40,594.07 for the entire
19,423 square meters needed by NPC, and not the P30.00 per square meter claimed by
the respondents. Neither did the trial court consider NPCs reliance on Section 3-A of
Republic Act No. 6395, as amended by Presidential Decree 938, the court placing more
weight on the respondents argument that expropriation would result in the substantial
impairment of the useof the area needed, even though what is sought is a mere aerial
right-of-way. The court found as reasonable the amount of P324,750.00 offered by NPC
for the improvements, as the same is based on the official current schedule of values as
determined by the Municipal Assessor of Tanay, Rizal.
its

decision of February

The respondents moved for reconsideration, presenting for the first time a
document entitled Bureau of Internal Revenue Circular of Appraisal, which shows that
for the year 1985, lands in Barangay Sampaloc were valued at P30.00 per square meter;
for the year 1992, at P80.00 per square meter; and for year 1994, at P100.00 per square

area of 19,423 square meters is the reasonable amount and should be the basis for
fixing the amount of just compensation due them. The trial court denied the motion,
stating that the BIR circular in question was belatedly filed and therefore NPC could not
have opposed its presentation.

From the evidence before it, the trial court made a determination that the

in

SO ORDERED. (Words in brackets supplied.)

meter. Respondents maintain that the price of P30.00 per square meter for the needed

The court-appointed commissioner, Ms. Amelia de Guzman Carbonell, found that the

Hence,

compensation for the improvements on the land expropriated with

legal interest from the time of possession by the plaintiff. No
pronouncement as to costs.

From the aforesaid decision of the trial court, both NPC and the respondents
went on appeal to the CA whereat the separate appeals were consolidated and
docketed as CA-G.R. CV No. 53576. The appellate court found merit in the respondents
appeal, and disregarded the P2.09 per square meter valuation of the trial court, which
was based on a 1984tax declaration. Instead, the CA placed reliance upon a 1993 tax
declaration, being only two years removed from the time of taking.

[9]

The appellate

court determined the time of taking to be in 1991. Thus, the greater value
of P913,122.00 as declared in Tax Declaration No. 011-2667 dated July 23, 1993 should
be the basis for determining just compensation. With regard to the value of
improvements, the appellate court found NPCs valuation more favorable, being based

19,

1996,

the

court rendered judgment as follows:

WHEREFORE, in view of the foregoing, judgment is hereby
rendered:
1. Expropriating in favor of [NPC] a parcel of land covering
a total area of 19,423 sq.m. covered by TCT No. M-17860 owned by
the [respondents];
2. Ordering the amount of P40,594.07 as just
compensation for the 19,423 square meters of land affected by the
expropriations; and the amount of P324,750.00 as reasonable

trial

on the current (1991) schedule of values for trees in the provinces of Rizal and
Laguna. Hence, in its decision

[10]

of March 14, 2005, the CA rendered judgment, to wit:

WHEREFORE, the instant Appeal is GRANTED. The decision of

the Regional Trial Court of Tanay, Rizal, Branch 80 dated February 19,
1996 is hereby MODIFIED and the compensation awarded for the
19,423 square meters of land affected is increased to P116,538.00,
and the reasonable compensation for the improvements thereon is
likewise increased to P325,025.00, with legal interest from the time of
possession by the plaintiff-appellee NAPOCOR. No pronouncement as
to costs.
SO ORDERED.

NPC moved for reconsideration, but its motion was denied by the appellate
court in its resolution

[11]

of December 2, 2005.

compensation, the respondents should be paid the value of the property as of the time
of the filing of the complaint which is deemed to be the time of taking the property.

Hence, NPCs instant petition for review, submitting for our resolution only the

It was certainly unfair for the trial court to have considered a property value

following issues with respect to the amount of just compensation that must be paid the

several years behind its worth at the time the complaint in this case was filed

respondents for the expropriated portion (19,423 square meters) of their property:

on November 20, 1990. The landowners are necessarily shortchanged, considering that,

1.

Is it to be based on the 1984 or the 1993 valuation?

2.

Should NPC pay for the value of the land being taken, or should
it be limited to what is provided for under P.D. 938, that is, ten
per cent (10%) of its market value as declared by the owner or
the assessor (whichever is lower), considering that the purpose
for which the property is being taken is merely for the
establishment of a safe and free passage for its overhead
transmission lines?

as a rule, land values enjoy steady upward movement. It was likewise erroneous for the
appellate court to have fixed the value of the property on the basis of a 1993

There is no issue as to the improvements. Since the P325,025.00 valuation

assessment. NPC would be paying too much. Petitioner corporation is correct in arguing
that the respondents should not profit from an assessment made years after the taking.
The expropriation proceedings in this case having been initiated by NPC
on November 20, 1990, property values on such month and year should lay the basis for
the proper determination of just compensation. In Association of Small Landowners in
the Philippines, Inc. v. Secretary of Agrarian Reform,

[13]

the Court ruled that the

therefor is the very price set by the NPC commissioner, to which the corporation did not

equivalent to be rendered for the property to be taken shall be substantial,

object but otherwise adopts, the Court fixes the amount of P325,025.00 as just

full, ample and, as must apply to this case, real. This must be taken to mean, among

compensation for the improvements.

others, that the value as of the time of taking should be the price to be paid the

We now come to the more weighty question of what amount is just by way of
compensation for the 19,423 square-meter portion of the respondents property.

property owner.
Just compensation is defined as the full and fair equivalent of the property

In eminent domain cases, the time of taking is the filing of the complaint, if

taken from its owner by the expropriator. In this case, this simply means the

there was no actual taking prior thereto. Hence, in this case, the value of the property at

propertys fair market value at the time of the filing of the complaint, or that sum of

the time of the filing of the complaint on November 20, 1990 should be considered in

money which a person desirous but not compelled to buy, and an owner willing but not

determining the just compensation due the respondents. So it is that in National Power

compelled to sell, would agree on as a price to be given and received therefor.

Corporation v. Court of Appeals, et al.,

[12]

we ruled:

[14]

The

measure is not the takers gain, but the owners loss.

Normally, the time of the taking coincides with the filing of

the complaint for expropriation. Hence, many rulings of this Court
have equated just compensation with the value of the property as of
the time of filing of the complaint consistent with the above provision
of the Rules. So too, where the institution of the action precedes entry
into the property, the just compensation is to be ascertained as of the
time of the filing of the complaint.

value of the property or to the schedule of market values determined by the provincial

The trial court fixed the value of the property at its 1984 value, while the CA, at

principal criterion for determining how much just compensation should be given to the

its 1993 worth. Neither of the two determinations is correct. For purposes of just

In the determination of such value, the court is not limited to the assessed

or city appraisal committee; these values consist but one factor in the judicial valuation
of the property.

landowner

[16]

[15]

The nature and character of the land at the time of its taking is the

All the facts as to the condition of the property and its surroundings, as

well as its improvements and capabilities, should be considered.

[17]

Neither of the two determinations made by the courts below is therefore

transmission lines evidently poses a danger to life and limb; injury, death or destruction
[22]

correct. A new one must be arrived at, taking into consideration the foregoing

to life and property within the vicinity. As the Court held in NPC v. Chiong,

pronouncements.

improper to assume that NPC will erect structures for its transmission lines within

Now, to the second issue raised by petitioner NPC.

the property.What is sought

In several cases, the Court struck down NPCs consistent reliance on Section 3-A
of Republic Act No. 6395, as amended by Presidential Decree 938.

[18]

to

be

expropriated

in

this

case

is,

it is not

at

its

longest extent, 326.34 meters, and through it may be built several structures, not simply

True, an easement

one. Finally, if NPC were to have its way, respondents will continue to pay the realty

of a right-of-way transmits no rights except the easement itself, and the respondents

taxes due on the affected portion of their property, an imposition that, among others,

would retain full ownership of the property taken. Nonetheless, the acquisition of such

merits the rejection of NPCs thesis of payment of a mere percentage of the propertys

easement is not gratis. The limitations on the use of the property taken for an indefinite

actual value.

period would deprive its owner of the normal use thereof. For this reason, the latter is
entitled to payment of a just compensation, which must be neither more nor less than
the monetary equivalent of the land taken.

that

the decision of the Court of Appeals dated March 14, 2005 vis a vis the award

[19]

While the power of eminent domain results in the taking or appropriation of

title to, and possession of, the expropriated property, no cogent reason appears why
said power may not be availed of to impose only a burden upon the owner of the
condemned property, without loss of title and possession.

WHEREFORE, the instant petition is GRANTED in part in

[20]

However, if the easement

is intended toperpetually or indefinitely deprive the owner of his proprietary rights

through the imposition of conditions that affect the ordinary use, free enjoyment and
disposal of the property or through restrictions and limitations that are inconsistent
with the exercise of the attributes of ownership, or when the introduction of structures
or objects which, by their nature, create or increase the probability of injury, death
upon or destruction of life and property found on the land is necessary, then the owner
should be compensated for the monetary equivalent of the land, in accordance with our
ruling in NPC v. Manubay Agro-Industrial:
As correctly observed by the CA, considering the nature and
the effect of the installation power lines, the limitations on the use of
the land for an indefinite period would deprive respondent of normal
use of the property. For this reason, the latter is entitled to payment
of a just compensation, which must be neither more nor less than the
[21]
monetary equivalent of the land.
The evidence suggests that NPCs transmission line project that traverses the
respondents property is perpetual, or at least indefinite, in nature. Moreover, not to be
discounted is the fact that the high-tension current to be conveyed through said

of P116,538.00, as and by way of just compensation for the 19,423 square meters of the
respondents property, is SET ASIDE, and the case is ordered REMANDED to the court of
origin for the proper determination of the amount of just compensation for the portion
thus taken, based on our pronouncements hereon. The same decision, however,
is AFFIRMED, insofar as it pertains to the award of P325,025.00 for the improvements,
with legal interest from the time of actual possession by the petitioner. No
pronouncement as to costs.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 140160

January 13, 2004

LAND BANK OF THE PHILIPPINES, petitioner,

vs.
FELICIANO F. WYCOCO, respondent.
x------------------------x
G.R. No. 146733 January 13, 2004
FELICIANO F. WYCOCO, petitioner,
vs.
THE HONORABLE RODRIGO S. CASPILLO, Pairing Judge of the Regional Trial Court,
Third Judicial Region, Branch 23, Cabanatuan City and the Department of Agrarian
Reform, respondents.
DECISION
YNARES-SANTIAGO, J.:
Before the Court are consolidated petitions, the first seeking the review of the February
1
2
9, 1999 Decision and the September 22, 1999 Resolution of the Court of Appeals in CA3
G.R. No. SP No. 39913, which modified the Decision of Regional Trial Court of
Cabanatuan City, Branch 23, acting as a Special Agrarian Court in Agrarian Case No. 91
(AF); and the second for mandamus to compel the said trial court to issue a writ of
execution and to direct Judge Rodrigo S. Caspillo to inhibit himself from Agrarian Case
No. 91 (AF).
The undisputed antecedents show that Feliciano F. Wycoco is the registered owner of a
94.1690 hectare unirrigated and untenanted rice land, covered by Transfer Certificate of
Title No. NT-206422 and situated in the Sitios of Ablang, Saguingan and Pinamunghilan,
4
Barrio of San Juan, Licab, Nueva Ecija.
In line with the Comprehensive Agrarian Reform Program (CARP) of the government,
Wycoco voluntarily offered to sell the land to the Department of Agrarian Reform (DAR)
5
for P14.9 million. In November 1991, after the DARs evaluation of the application and
the determination of the just compensation by the Land Bank of the Philippines (LBP), a
6
notice of intention to acquire 84.5690 hectares of the property for P1,342,667.46 was
sent to Wycoco. The amount offered was later raised to P2,594,045.39 and, upon

review, was modified to P2,280,159.82. The area which the DAR offered to acquire
excluded idle lands, river and road located therein. Wycoco rejected the offer,
prompting the DAR to indorse the case to the Department of Agrarian Reform
Adjudication Board (DARAB) for the purpose of fixing the just compensation in a
8
summary administrative proceeding. The case was docketed as DARAB VOS Case No.
232 NE 93. Thereafter, the DARAB requested LBP to open a trust account in the name of
9
Wycoco and deposited the compensation offered by DAR. In the meantime, the
property was distributed to farmer-beneficiaries.
On March 29, 1993, DARAB required the parties to submit their respective memoranda
10
or position papers in support of their claim. Wycoco, however, decided to forego with
the filing of the required pleadings, and instead filed on April 13, 1993, the instant case
for determination of just compensation with the Regional Trial Court of Cabanatuan
11
City, Branch 23, docketed as Agrarian Case No. 91 (AF). Impleaded as party-defendants
therein were DAR and LBP.
On April 30, 1993, Wycoco filed a manifestation in VOS Case No. 232 NE 93, informing
the DARAB of the pendency of Agrarian Case No. 91 (AF) with the Cabanatuan court,
12
acting as a special agrarian court. On March 9, 1994, the DARAB issued an order
dismissing the case to give way to the determination of just compensation by the
Cabanatuan court. Pertinent portion thereof states:
Admittedly, this Forum is vested with the jurisdiction to conduct administrative
proceeding to determine compensation. [H]owever, a thorough perusal of
petitioners complaint showed that he did not only raise the issue of valuation
but such other matters which are beyond the competence of the Board.
Besides, the petitioner has the option to avail the administrative remedies or
bring the matter on just compensation to the Special Agrarian Court for final
determination.
WHEREFORE, premises considered, this case is hereby dismissed.
SO ORDERED.

13

Meanwhile, DAR and LBP filed their respective answers before the special agrarian court
in Agrarian Case No. 91 (AF), contending that the valuation of Wycocos property was in
accordance with law and that the latter failed to exhaust administrative remedies by not
participating in the summary administrative proceedings before the DARAB which has
14
primary jurisdiction over determination of land valuation.
After conducting a pre-trial on October 3, 1994, the trial court issued a pre-trial order as
follows:
The parties manifested that there is no possibility of amicable settlement,
neither are they willing to admit or stipulate on facts, except those contained in
the pleadings.

The only issue left is for the determination of just compensation or correct
valuation of the land owned by the plaintiff subject of this case.
The parties then prayed to terminate the pre-trial conference.
AS PRAYED FOR, the pre-trial conference is considered terminated, and instead
of trial, the parties are allowed to submit their respective memoranda.
WHEREFORE, the parties are given twenty (20) days from today within which to
file their simultaneous memoranda, and another ten (10) days from receipt
thereof to file their Reply/Rejoinder, if any, and thereafter, this case shall be
deemed submitted for decision.
SO ORDERED.

19

39234, was dismissed on May 29, 1997. The dismissal became final and executory on
20
June 26, 1997. This prompted Wycoco to file a petition for mandamus before this
Court, docketed as G.R. No. 146733, praying that the decision of the Regional Trial Court
of Cabanatuan City, Branch 23, in Agrarian Case No. 91 (AF) be executed, and that Judge
Rodrigo S. Caspillo, the now presiding Judge of said court, be compelled to inhibit
himself from hearing the case.
The petition brought by LBP on both substantive and procedural grounds, docketed as
CA-G.R. No. SP No. 39913, was likewise dismissed by the Court of Appeals on February
21
9, 1999. On September 22, 1999, however, the Court of Appeals modified its decision
by deducting from the compensation due Wycoco the amount corresponding to the
3.3672 hectare portion of the 94.1690 hectare land which was found to have been
previously sold by Wycoco to the Republic, thus

15

WHEREFORE, and conformably with the above, Our decision of February 9,

1999 is hereby MODIFIED in the sense that the value corresponding to the
aforesaid 3.3672 hectares and all the awards appertaining thereto in the
decision a quo are ordered deducted from the totality of the awards granted to
the private respondent. In all other respects, the decision sought to be
reconsidered is hereby RE-AFFIRMED and REITERATED.

The evidence presented by Wycoco in support of his claim were the following: (1)
Transfer Certificate of Title No. NT-206422; (2) Notice of Land Valuation dated June 18,
16
1992; and (3) letter dated July 10, 1992 rejecting the counter-offer of LBP and DAR. On
17
the other hand, DAR and LBP presented the Land Valuation Worksheets.
On November 14, 1995, the trial court rendered a decision in favor of Wycoco. It ruled
that there is no need to present evidence in support of the land valuation inasmuch as it
is of public knowledge that the prevailing market value of agricultural lands sold in Licab,
Nueva Ecija is from P135,000.00 to 150,000.00 per hectare. The court thus took judicial
notice thereof and fixed the compensation for the entire 94.1690 hectare land at
P142,500.00 per hectare or a total of P13,428,082.00. It also awarded Wycoco actual
damages for unrealized profits plus legal interest. The dispositive portion thereof states:

SO ORDERED.

In its petition, LBP contended that the Court of Appeals erred in ruling:
I.

WHEREFORE, premises considered, judgment is hereby rendered:

1. Ordering the defendants to pay the amount of P13,419,082.00 to
plaintiff as just compensation for the property acquired;
2. Ordering the defendants to pay plaintiff the amount of
P29,663,235.00 representing the unrealized profits from the time of
acquisition of the subject property and the sum of P8,475,210.00 for
every calendar year, until the amount of compensation is fully paid
including legal interest which had accrued thereon.

II.

III.

No pronouncement as to costs.
SO ORDERED.

18

IV.
The DAR and the LBP filed separate petitions before the Court of Appeals. The petition
brought by DAR on jurisdictional and procedural issues, docketed as CA-G.R. No. SP No.

22

THAT THE TRIAL COURT ACTING AS A SPECIAL AGRARIAN COURT MAY

ASSUME JURISDICTION OVER AGRARIAN CASE NO. 91 (AF) AND RENDER
JUDGMENT THEREON WITHOUT AN INITIAL ADMINISTRATIVE
DETERMINATION OF JUST COMPENSATION BY THE DARAB PURSUANT TO
SECTION 16 OF RA 6657, OVER THE TIMELY OBJECTION OF THE
PETITIONER, AND IN VIOLATION OF THE RULE ON EXHAUSTION OF
ADMINISTRATIVE REMEDIES AND ON FORUM SHOPPING;
THAT THE JUST COMPENSATION DETERMINED BY THE TRIAL COURT WAS
SUPPORTED BY SUBSTANTIAL EVIDENCE, WHEN IT WAS BASED ONLY ON
JUDICIAL NOTICE OF THE PREVAILING MARKET VALUE OF LAND BASED ON
THE ALLEGED PRICE OF TRANSFER OF TENURAL RIGHTS, TAKEN WITHOUT
NOTICE AND HEARING IN VIOLATION OF RULE 129 OF THE RULES OF
COURT;
THAT THE TRIAL COURT CAN REQUIRE THE PETITIONER TO COMPENSATE
THE PORTIONS OF RESPONDENTS PROPERTY WHICH WERE NOT
DECLARED BY THE DAR FOR ACQUISITION, NOR SUITABLE FOR
AGRICULTURE NOR CAPABLE OF DISTRIBUTION TO FARMER BENEFICIARIES
UNDER THE CARP;
THAT THE TRIAL COURT CAN AWARD AS PART OF JUST COMPENSATION
LEGAL INTEREST ON THE PRINCIPAL AND ALLEGED UNREALIZED PROFITS
OF P29,663,235.00 FROM THE TIME OF ACQUISITION OF THE SUBJECT

V.

PROPERTY AND P8,475,210.00 FOR EVERY CALENDAR YEAR THEREAFTER,

CONSIDERING THAT THE SAME HAS NO LEGAL BASIS AND THAT THE
RESPONDENT RETAINED THE TITLE TO HIS PROPERTY DESPITE THE DARS
NOTICE OF ACQUISITION;
THAT THE TRIAL COURT HAD VALIDLY GRANTED EXECUTION PENDING
APPEAL ON THE ALLEGEDLY GOOD REASON OF THE PETITIONERS
ADVANCED AGE AND WEAK HEALTH, CONTRARY TO THE APPLICABLE
JURISPRUDENCE AND CONSIDERING THAT THE RESPONDENT IS NOT
23
DESTITUTE.

The issues for resolution are as follows: (1) Did the Regional Trial Court, acting as Special
Agrarian Court, validly acquire jurisdiction over the instant case for determination of just
compensation? (2) Assuming that it acquired jurisdiction, was the compensation arrived
at supported by evidence? (3) Can Wycoco compel the DAR to purchase the entire land
subject of the voluntary offer to sell? (4) Were the awards of interest and damages for
unrealized profits valid?
Anent the issue of jurisdiction, the laws in point are Sections 50 and 57 of Republic Act
No. 6657 (Comprehensive Agrarian Reform Law of 1988) which, in pertinent part,
provide:
Section 50. Quasi-judicial Powers of the DAR. The DAR is hereby vested with
primary jurisdiction to determine and adjudicate agrarian reform matters and
shall have exclusive original jurisdiction over all matters involving the
implementation of agrarian reform, except those falling under the exclusive
jurisdiction of the Department of Agriculture (DA) and the Department of
Environment and Natural Resources (DENR).
Section 57. Special Jurisdiction. The Special Agrarian Court shall have original
and exclusive jurisdiction over all petitions for the determination of just
compensation to landowners, and the prosecution of all criminal offenses
under this Act.
The Special Agrarian Courts shall decide all appropriate cases under their special
jurisdiction within thirty (30) days from submission of the case for decision.
24

In Republic v. Court of Appeals, it was held that Special Agrarian Courts are given
original and exclusive jurisdiction over two categories of cases, to wit: (1) all petitions
for the determination of just compensation; and (2) the prosecution of all criminal
offenses under R.A. No. 6657. Section 50 must be construed in harmony with Section 57
by considering cases involving the determination of just compensation and criminal
cases for violations of R.A. No. 6657 as excepted from the plenitude of power conferred
to the DAR. Indeed, there is a reason for this distinction. The DAR, as an administrative
agency, cannot be granted jurisdiction over cases of eminent domain and over criminal
cases. The valuation of property in eminent domain is essentially a judicial function
which is vested with the Special Agrarian Courts and cannot be lodged with

25

administrative agencies. In fact, Rule XIII, Section 11 of the New Rules of Procedure of
the DARAB acknowledges this power of the court, thus
Section 11. Land Valuation and Preliminary Determination and Payment of Just
Compensation. The decision of the Adjudicator on land valuation and
preliminary determination and payment of just compensation shall not be
appealable to the Board but shall be brought directly to the Regional Trial
Courts designated as Special Agrarian Courts within fifteen (15) days from
receipt of the notice thereof. Any party shall be entitled to only one motion for
reconsideration. (Emphasis supplied)
Under Section 1 of Executive Order No. 405, Series of 1990, the Land Bank of the
Philippines is charged with the initial responsibility of determining the value of lands
placed under land reform and the just compensation to be paid for their
26
taking. Through a notice of voluntary offer to sell (VOS) submitted by the landowner,
accompanied by the required documents, the DAR evaluates the application and
determines the lands suitability for agriculture. The LBP likewise reviews the application
and the supporting documents and determines the valuation of the land. Thereafter,
the DAR issues the Notice of Land Valuation to the landowner. In both voluntary and
compulsory acquisition, where the landowner rejects the offer, the DAR opens an
account in the name of the landowner and conducts a summary administrative
proceeding. If the landowner disagrees with the valuation, the matter may be brought
to the Regional Trial Court acting as a special agrarian court. This in essence is the
27
procedure for the determination of just compensation.
28

In Land Bank of the Philippines v. Court of Appeals, the landowner filed an action for
determination of just compensation without waiting for the completion of DARABs reevaluation of the land. This, notwithstanding, the Court held that the trial court properly
acquired jurisdiction because of its exclusive and original jurisdiction over determination
of just compensation, thus
It is clear from Sec. 57 that the RTC, sitting as a Special Agrarian Court, has
"original and exclusive jurisdiction over all petitions for the determination of
just compensation to landowners." This "original and exclusive" jurisdiction of
the RTC would be undermined if the DAR would vest in administrative officials
original jurisdiction in compensation cases and make the RTC an appellate
court for the review of administrative decisions. Thus, although the new rules
speak of directly appealing the decision of adjudicators to the RTCs sitting as
Special Agrarian Courts, it is clear from Sec. 57 that the original and exclusive
jurisdiction to determine such cases is in the RTCs. Any effort to transfer such
jurisdiction to the adjudicators and to convert the original jurisdiction of the
RTCs into an appellate jurisdiction would be contrary to Sec. 57 and therefore
would be void. Thus, direct resort to the SAC [Special Agrarian Court]by
29
private respondent is valid. (Emphasis supplied)

In the case at bar, therefore, the trial court properly acquired jurisdiction over Wycocos
complaint for determination of just compensation. It must be stressed that although no
summary administrative proceeding was held before the DARAB, LBP was able to
perform its legal mandate of initially determining the value of Wycocos land pursuant
to Executive Order No. 405, Series of 1990. What is more, DAR and LBPs conformity to
the pre-trial order which limited the issue only to the determination of just
compensation estopped them from questioning the jurisdiction of the special agrarian
court. The pre-trial order limited the issues to those not disposed of by admission or
30
agreements; and the entry thereof controlled the subsequent course of action.

the court, and he is not authorized to make his individual knowledge of a fact, not
34
generally or professionally known, the basis of his action.

Besides, the issue of whether Wycoco violated the rule on exhaustion of administrative
31
remedies was rendered moot and academic in view of the DARABs dismissal of the
administrative case to give way to and in recognition of the courts power to determine
32
just compensation.

We find Wycocos claim for payment of interest partly meritorious. In Land Bank of the
35
Philippines v. Court of Appeals, this Court struck down as void DAR Administrative
Circular No. 9, Series of 1990, which provides for the opening of trust accounts in lieu of
the deposit in cash or in bonds contemplated in Section 16 (e) of RA 6657.

In arriving at the valuation of Wycocos land, the trial court took judicial notice of the
alleged prevailing market value of agricultural lands in Licab, Nueva Ecija without
apprising the parties of its intention to take judicial notice thereof. Section 3, Rule 129
of the Rules on Evidence provides:

"It is very explicit from [Section 16 (e)] that the deposit must be made only in
cash or in LBP bonds. Nowhere does it appear nor can it be inferred that the
deposit can be made in any other form. If it were the intention to include a
trust account among the valid modes of deposit, that should have been made
express, or at least, qualifying words ought to have appeared from which it can
be fairly deduced that a trust account is allowed. In sum, there is no ambiguity
in Section 16(e) of RA 6657 to warrant an expanded construction of the term
deposit.

Sec. 3. Judicial Notice, When Hearing Necessary. During the trial, the court,
on its own initiative, or on request of a party, may announce its intention to
take judicial notice of any matter and allow the parties to be heard thereon.
After trial and before judgment or on appeal, the proper court, on its own
initiative, or on request of a party, may take judicial notice of any matter and
allow the parties to be heard thereon if such matter is decisive of a material
issue in the case.
Inasmuch as the valuation of the property of Wycoco is the very issue in the case at bar,
the trial court should have allowed the parties to present evidence thereon instead of
practically assuming a valuation without basis. While market value may be one of the
bases of determining just compensation, the same cannot be arbitrarily arrived at
without considering the factors to be appreciated in arriving at the fair market value of
the property e.g., the cost of acquisition, the current value of like properties, its size,
33
shape, location, as well as the tax declarations thereon. Since these factors were not
considered, a remand of the case for determination of just compensation is necessary.
The power to take judicial notice is to be exercised by courts with caution especially
where the case involves a vast tract of land. Care must be taken that the requisite
notoriety exists; and every reasonable doubt on the subject should be promptly
resolved in the negative. To say that a court will take judicial notice of a fact is merely
another way of saying that the usual form of evidence will be dispensed with if
knowledge of the fact can be otherwise acquired. This is because the court assumes that
the matter is so notorious that it will not be disputed. But judicial notice is not judicial
knowledge. The mere personal knowledge of the judge is not the judicial knowledge of

Anent the third issue, the DAR cannot be compelled to purchase the entire property
voluntarily offered by Wycoco. The power to determine whether a parcel of land may
come within the coverage of the Comprehensive Agrarian Reform Program is essentially
lodged with the DAR. That Wycoco will suffer damages by the DARs non-acquisition of
the approximately 10 hectare portion of the entire land which was found to be not
suitable for agriculture is no justification to compel DAR to acquire the whole area.

xxx

xxx

xxx

"In the present suit, the DAR clearly overstepped the limits of its powers to
enact rules and regulations when it issued Administrative Circular No. 9. There
is no basis in allowing the opening of a trust account in behalf of the landowner
as compensation for his property because, as heretofore discussed, Section
16(e) of RA 6657 is very specific that the deposit must be made only in cash or
in LBP bonds. In the same vein, petitioners cannot invoke LRA Circular Nos. 29,
29-A and 54 because these implementing regulations can not outweigh the
clear provision of the law. Respondent court therefore did not commit any
36
error in striking down Administrative Circular No. 9 for being null and void."
Pursuant to the forgoing decision, DAR issued Administrative Order No. 2, Series of
1996, converting trust accounts in the name of landowners into deposit accounts. The
transitory provision thereof states
VI. TRANSITORY PROVISIONS
All trust accounts issued pursuant to Administrative Order No. 1, S. 1993 covering
landholdings not yet transferred in the name of the Republic of the Philippines as of July
5, 1996 shall immediately be converted to deposit accounts in the name of the
landowners concerned.

All Provincial Agrarian Reform Officers and Regional Directors are directed to
immediately inventory the claim folders referred to in the preceding paragraph,
wherever they may be found and request the LBP to establish the requisite deposit
under this Administrative Order and to issue a new certification to that effect. The
Original Certificate of Trust Deposit previously issued should be attached to the request
of the DAR in order that the same may be replaced with a new one.
All previously established Trust Deposits which served as the basis for the transfer of the
landowners title to the Republic of the Philippines shall likewise be converted to
deposits in cash and in bonds. The Bureau of Land Acquisition and Distribution shall
coordinate with the LBP for this purpose.
In light of the foregoing, the trust account opened by LBP in the name of Wycoco as the
mode of payment of just compensation should be converted to a deposit account. Such
conversion should be retroactive in application in order to rectify the error committed
by the DAR in opening a trust account and to grant the landowners the benefits
concomitant to payment in cash or LBP bonds prior to the ruling of the Court in Land
Bank of the Philippines v. Court of Appeals. Otherwise, petitioners right to payment of
just and valid compensation for the expropriation of his property would be
37
violated. The interest earnings accruing on the deposit account of landowners would
suffice to compensate them pending payment of just compensation.
In some expropriation cases, the Court imposed an interest of 12% per annum on the
just compensation due the landowner. It must be stressed, however, that in these cases,
the imposition of interest was in the nature of damages for delay in payment which in
38
effect makes the obligation on the part of the government one of forbearance. It
follows that the interest in the form of damages cannot be applied where there was
prompt and valid payment of just compensation. Conversely, where there was delay in
tendering a valid payment of just compensation, imposition of interest is in order. This is
because the replacement of the trust account with cash or LBP bonds did not ipso
facto cure the lack of compensation; for essentially, the determination of this
39
compensation was marred by lack of due process.
Accordingly, the just compensation due Wycoco should bear 12% interest per annum
from the time LBP opened a trust account in his name up to the time said account was
actually converted into cash and LBP bonds deposit accounts. The basis of the 12%
interest would be the just compensation that would be determined by the Special
Agrarian Court upon remand of the instant case. In the same vein, the amount
determined by the Special Agrarian Court would also be the basis of the interest income
on the cash and bond deposits due Wycoco from the time of the taking of the property
up to the time of actual payment of just compensation.
The award of actual damages for unrealized profits should be deleted. The amount of
loss must not only be capable of proof, but must be proven with a reasonable degree of
certainty. The claim must be premised upon competent proof or upon the best evidence

40

obtainable, such as receipts or other documentary proof. None having been presented
in the instant case, the claim for unrealized profits cannot be granted.
From the foregoing discussion, it is clear that Wycocos petition for mandamus in G.R.
No. 146733 should be dismissed. The decision of the Regional Trial Court of Cabanatuan
City, Branch 23, acting as Special Agrarian Court in Agrarian Case No. 91 (AF), cannot be
enforced because there is a need to remand the case to the trial court for determination
of just compensation. Likewise, the prayer for the inhibition of Judge Rodrigo S. Caspillo
in Agrarian Case No. 91 (AF) is denied for lack of basis.
WHEREFORE, in view of all the foregoing, the petition in G.R. No. 140160 is PARTIALLY
GRANTED. Agrarian Case No. 91 (AF) is REMANDED to the Regional Trial Court of
Cabanatuan City, Branch 23, for the determination of just compensation. The petition
for mandamus in G.R. No. 146733 is dismissed.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, Carpio, and Azcuna, JJ., concur.

SECOND DIVISION
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY, DEPARTMENT OF PUBLIC
WORKS AND HIGHWAYS, and AIR TRANSPORTATION OFFICE, petitioners vs.
MILAGROS URGELLO, respondent
G.R. No. 162288
DECISION
CARPIO MORALES, J.:

lease several parcels of land, including Lot No. 913-E-3, to MPWH for 25 years to be
used as the site of the latters Seventh Regional Base Shop Complex.

[7]

The MPWH soon started building fences along the perimeters of Lot No. 913-E3.

[8]

Respondent, Milagros Urgello, was the owner of Lot No. 913-E of the Banilad

After the dismantling of the hangars and taxiways from the Lahug Airport and

[1]

Estate in Cebu City, covered by Transfer Certificate of Title No. 10873. Lot No. 913-E

putting up of a repair shop of the Bureau of Equipment of the MPWH, the BAT erected a

was subdivided into four parcels, Lot No. 913-E-1, Lot No. 913-E-2, Lot No. 913-E-3, and

fence, over the objection of respondent, enclosing portions of her Lot Nos. 913-E-2 and

Lot No. 913-E-4.

[2]

913-E-4.

[9]

Sometime in the 1950s, the then Civil Aeronautics Administration (CAA) filed a

Respondent thus filed on June 5, 1983 before the Regional Trial Court (RTC) of

complaint before the then Court of First Instance of Cebu to expropriate Lot No. 913-E-

Cebu a Complaint for Injunction with Damages against the BAT and the G.M. Tiongco

3for the projected expansion of the Lahug Airport.

Construction Company (Tiongco Construction), docketed as Civil Case No. CEB-

The case reached the Court of Appeals in which, on joint motion of the parties,

3908. Tiongco Construction in turn impleaded the MPWH as third-party defendant.

[10]

[3]

a judgment based on a compromise agreement was rendered on July 27, 1964. In that
agreement, the CAA agreed to purchase Lot No. 913-E-3 for P3,105.00, subject to the
resolutory condition that in the event that the Republic of the Philippines would no
longer use it as an airport, its title or ownership would revert to respondent or her heirs
upon reimbursement of the purchase price of P3,105.00.

Subsequently, respondent, by letter of July 8, 1985, requested the BAT for the
reconveyance to her of Lot No. 913-E-3 and tendered RPB Demand Draft No. 148284 in
[11]

the amount of P3,105.00.

The BAT received the draft, but it did not reconvey the lot,

prompting respondent to file on August 9, 1985 a Complaint

[4]

[12]

for Reconveyance with

Damages against it before the RTC of Cebu City, docketed as Civil Case No. CEB-4115.
Respondent thus executed a Conditional Deed of Sale incorporating the
resolutory condition, which deed was annotated on respondents TCT No. 10873.

It appears that on April 27, 1966, the Mactan Airport commenced its operations
and the Philippine Airlines stopped using the Lahug Airport. Filipinas Airways and Air
Manila ceased too to use the Lahug Airport at the end of 1966 and thereafter used
the Mactan Airport.

In the meantime or on December 20, 1985, the MPWH filed a Complaint

[13]

for

[5]

[6]

Eminent Domain against respondent and four others, docketed as Civil Case No. CEB4541, for the expropriation of Lot No. 913-E-4, among other lots.
Branch 6 of the Cebu RTC later rendered judgment

[14]

in Civil Case No. CEB-

4115 (respondents Complaint for Reconveyance of Lot No. 913-E-3), by Decision of

January 3, 1989, holding that the resolutory condition stipulated in the Compromise

On August 2, 1983, the Bureau of Air Transportation (BAT) by which the CAA
was later known, and the Bureau of Equipment of the then Ministry of Public Works and
Highways (MPWH), entered into a Memorandum of Agreement whereby the BAT was to

Agreement forged between the then CAA and respondent basis of the July 27, 1964
judgment of the Court of Appeals had taken place. The dispositive portion of the
decision reads:

Wherefore, judgment is rendered, ordering the defendant

Bureau of Air Transportation to reconvey to the plaintiff Milagros
E. Urgello that parcel of land, Lot No. 913-E-3, subject of the
conditional Deed of Sale, after payment [sic] by the latter of the
sum of P3,105.00 as repurchase price. The plaintiffs claim for
damages as well as the defendants counterclaims are
[15]
dismissed. No costs. (Emphasis and underscoring supplied)

On November
Memorandum

[16]

29,

1989,

then

President

Aquino

xxxx
3. It is understood that DPWH and ATO will comply with the
Decision rendered on January 3, 1989 by the Regional Trial
Court, Branch VI, Cebu City in Civil Case No. CEB-4115 entitled
Milagros
Urgello
vs.
Republic
of
the Philippines for reconveyance of Lot No. 913-E-3.
issued

directing the transfer of the general operations of Lahug Airport to

the Mactan InternationalAirport before the end of 1990 and the closure of
the Lahug Airport thereafter.
On July 31, 1990, Republic Act No. 6958,

[17]

the Charter of herein petitioner

Mactan-Cebu International Airport Authority (MCIAA), was signed into law.

On January 21, 1991, Branch 6 of the RTC Cebu rendered a decision

[18]

in Civil

Case No. CEB-3908 (respondents Complaint for Injunction against the BAT and Tiongco
Construction questioning the enclosure of portions of her Lot Nos. 913-E-2 and 913-E-4,
in which complaint MPWH impleaded Tiongco Construction as a third-party
defendant) approving a Compromise Agreement entered into on January 17, 1990 by
respondent on one hand, and the Republic of the Philippines, represented by the BAT
which later became known as Air Transportation Office (ATO), and the Department of

4. In view of the Decision of January 3, 1989, plaintiff agrees to sell

and the DPWH agrees to purchase Lot [No.] 913-E-3 consisting
of One Thousand Thirty Five (1,035) square meters at the
agreed price of Six Hundred Fifty Pesos (P650.00) per square
meter or for the total amount of Six Hundred Seventy Two
Thousand Seven Hundred Fifty Pesos (P672,750.00).
5. To avert future litigations, the parties hereby waive all their
respective demands, claims, counterclaims, and third-party
claims against one another with respect to the matters treated
in this Agreement.
6. The DPWH hereby agrees to withdraw its complaint for eminent
domain [covering Lot No. 913-E-4, among other lots] filed
against plaintiff in Civil Case No. 4541 before the Regional Trial
Court,
Branch
XVII, Cebu City entitled
Republic
of
the Philippines vs. Milagros Urgello, et. al. Public defendant
likewise agrees to withdraw the appeal it had filed in Civil Case
No. 4115 entitled Milagros Urgello vs. Republic of
the Philippines (BAT, now ATO) [for reconveyance of Lot No.
[19]
913-E-3]. (Emphasis and underscoring supplied)

Public Works and Highways (DPWH) and Tiongco Construction on the other. The
pertinent provisions of the Compromise Agreement read:
1. DPWH obligates itself to immediately demolish at its
own expense the concrete wall which it built traversing
plaintiffs Lot [No.] 913-[E]-2 and Emerald Street in order to
provide access to plaintiffs properties.

On March 11, 1991, the Republic of the Philippines filed a Manifestation

[20]

in

Civil Case No. CEB-4541 (the eminent domain case filed by the then MPWH covering,
among other lots, Lot No. 913-E-4) signifying its conformity to the January 17,
1990 Compromise Agreement.

xxxx
2. Plaintiff hereby agrees to sell and DPWH agrees to purchase Lot
No. 913-E[-4] . . . covering an area of One Thousand One
Hundred Ninety Nine (1,199) square meters of plaintiffs
lot,particularly Lot No. 913-E-4-A, at the agreed price of Six
Hundred Fifty Pesos (P650.00) per square meter or a total of
Seven Hundred Seventy Nine Thousand Three Hundred Fifty
Pesos (P779,350.00).

Respondent, relying on the Manifestation in open court of Atty. Agustino

Hermoso of the DPWH Regional Office about the availability of funds already
appropriated for her properties, demanded the payment for Lot Nos. 913-E-3 and 913-E4, and the demolition of the concrete wall around Lot No. 913-E-2, as agreed upon in
the January 17, 1990 Compromise Agreement.

[21]

The DPWH ignored respondents

A pursuant to the judgment based on the

Compromise Agreement;

demands, however, prompting her to file on June 18, 1993 in her complaint for
Injunction (Civil Case No. CEB-3908) a Motion for the Issuance of Writ of
5.

Execution against the DPWH to enforce its obligation under the said Compromise
Agreement.

[22]

The motion was granted and a Writ of Execution

[23]

Commanding defendants to solidarily pay plaintiff:

was issued on July 28,

c.
d.
e.

1993 and served upon the DPWH, but it was unenforced per Sheriffs Return of
[24]

Service

Moral damages of P1,000,000.00;

Actual damages of P100,000.00;
Attorneys fees of P300,000.00;

dated November 17, 1993.

6. Affording plaintiffs such other reliefs just and equitable
[28]
in the premises. (Emphasis and underscoring
supplied)

The DPWH having failed to comply with its undertakings under the January 17,
1990 Compromise Agreement which was approved on January 21, 1991 in Civil Case No.
CEB-3908 (respondents Complaint for Injunction), respondent filed on October 15,
1996 before the Cebu RTC a Complaint

[25]

for Reconveyance

attorneys fees against herein petitioners DPWH and ATO,

[27]

[26]

with damages and

docketed as CEB-19418, the

subject of the present petition, praying that judgment be rendered

1. Ordering
defendants
jointly
and
severally
to immediately reconvey to plaintiff Milagros A.
Urgello:
a. Lot No. 913-E-4-A without any condition;

In its Answer,

[29]

petitioner DPWH questioned respondents failure to exhaust

administrative remedies and to serve upon the Office of the Solicitor General a copy of
the complaint, and the jurisdiction of the trial court.

As for petitioner ATO, it posited in its Answer

[30]

that only the DPWH should be

held liable for non-compliance with the Compromise Agreement dated January 17,
1990basis of the January 21, 1991 RTC Decision in respondents Complaint for Injunction
claiming that:

b. Lot No. 913-E-3 upon plaintiffs payment [sic] to

the defendants of the sum of P3,105.00 as
repurchase price;
2. Directing defendant DPWH to immediately demolish at
its own expense the concrete wall which it built
traversing plaintiffs Lot No. 913-E-2 and Emerald
Street, Lahug, Cebu City, which has obstructed
plaintiffs access to her other properties;
3. Enjoining
defendants
to solidarily
pay
plaintiff reasonable rent for their unlawful
occupation of Lot No. 913-E-3 since 1950 and of Lot
No. 913-E-4-A since 1990 which deprived plaintiff
of any beneficial enjoyment thereof;
4. Alternatively, requiring defendants to solidarily and
immediately
pay
plaintiff the
amount
of P1,452,100.00 (plus interest computed at 12%
per annum from 1990) by way of just
compensation for Lot Nos. 913-E-3 and 913-E-4-

. . . [T]his Compromise Agreement dated January 17, 1990

is, as cited by plaintiff[-herein respondent] in paragraph 20 of her
complaint, the one [which was] entered into by and between her
and defendants DPWH and ATO in Civil Cases Nos. 3908 (RTC Br.
VI), 4115 (RTC Br. VI) and 4541 (RTC Br. VII) involving Lot Nos. 913E-2, 913-E-3, and 913-E-4-A, and whatever is the reason behind codefendant DPWHs neglect or failure to undertake what it assumed
as its sole obligation under this Compromise Agreement, which is
all that has given rise to the present suit, defendant ATO is not
privy to it, has no knowledge about it and should not be made to
answer for it;
. . . [T]he obligation of defendant ATO under the
Compromise Agreement dated 17 January 1990, above cited,
ceased when, in that same document, . . . co-defendant [DPWH]
assumed as its sole obligation the following: 1) to demolish at its
own expense a concrete wall which it built traversing plaintiffs Lot
No. 913-[E]-2 and Emerald Street to provide access to plaintiffs
properties; and 2) to unconditionally pay plaintiff for the lots sold

by plaintiff to the former, to wit: P779, 350.00 as payment for Lot

No. 913-E-4-A (1,199 sq. m.); andP672,750.00 as payment for Lot
No. 913-E-3 (1035 sq. m.);
xxxx
. . . [F]or plaintiff[-herein respondent] to pursue her old
cases against defendant after the parties in those cases covered by
the Court-approved Compromise Agreement dated January 17,
1990 are supposed to have already waived all their respective
demands, claims, counterclaims and third-party claims is for her
to drag all the defendants there into an absurdity: the revival of
those demands, claims, counterclaims and third-party claims so
needless when all plaintiff needs to do is focus her attention on the
one party defendant which reneged on what it assumed as its sole
[31]
obligation under the same compromise agreement. (Emphasis
and underscoring supplied)

Highways, of Lot Nos. 913-E-3 and 913-E-4-A, cannot be done

anymore insofar as defendant ATO is concerned, at least not
without the inclusion of MCIAA as a proper party, if it is not [sic], in
fact, as defendant believes, an indispensable party, since all assets,
powers, rights, interests and privileges relating to airport works or
airports both at Mactan International Airport and at the old Lahug
Airport have already been assumed in ownership and/or
administration by MCIAA, to the exclusion and substitution of
defendant ATO, by virtue of MCIAAs authority and missions under
[33]
RA 6958 creating it; (Emphasis and underscoring supplied)
Respondent later filed with leave and approval of the trial court an Amended
Complaint

[34]

impleading herein petitioner MCIAA as a party defendant

[36]

MCIAA, in its Answer with Counterclaim to the Amended Complaint,

the following defenses:

. . . ATO Mactan, as now established and constituted, is

one of the nine (9) airport cluster centers or area offices of
defendant Air Transportation Office created and established
pursuant to DOTC Department Order No. 92-569 dated January 21,
1992, and was actually established only sometime January 1993,
some two years, more or less, after the Mactan-Cebu International
Airport
Authority (MCIAA) was
formally
and
officially
constituted on December 18, 1990 pursuant to Republic Act No.
6958 (the MCIAA charter);
. . . [B]y virtue of RA 6958, MCIAA became the airport
operating authority in Cebu, to the exclusion of defendant ATO,
and the role of defendant ATO in Cebu has since been confined
only to the operation and maintenance of air-traffic-service and
air-navigation-service facilities at Mactan International Airport,
although it does exercise a separate role in supervising the
management, operation and maintenance of the following satellite
airports: Dumaguete Airport in Negros Oriental, Tagbilaran Airport
[32]
and Ubay Airport in Bohol and Siquijor Airport in Siquijor;
xxxx
. . . [I]t is clear from the . . . provisions of RA 6958 (the
MCIAA Charter) that the judgment prayed for by plaintiff in her
complaint, including reconveyance by defendant ATO, jointly and
severally with co-defendant Department of Public Works and

and

incorporating a prayer for the payment of rentals should reconveyance of her properties
(Lot Nos. 913-E-3 & 913-E-4-A) be denied.

In support of its claim, the ATO argued that:

[35]

Plaintiff[-herein respondent] merely seeks the

enforcement of [the January 17, 1990] Compromise Agreement of
which defendant MCIAA is not a party thereto. Defendant is a total
stranger and is a separate and distinct personality from its codefendants DPWH and ATO. Defendant MCIAA should not
therefore be made solidarily liable for the non-fulfillment of the
terms of the compromise agreement including those that may
arise therefrom.
As can be gleaned from the complaint, Lot [No.] 913-E-3
was no longer possessed by co-defendant ATO when RA 6958 took
effect. In fact, co-defendant ATO did not make any formal turn
over of this lot and its obligations in the alleged Compromise
Agreement to defendant MCIAA. Defendant MCIAA could not
therefore be compelled to assume the liabilities and obligations of
co-defendant ATO in said compromise agreement.
Granting arguendo that defendant MCIAA assumed the
obligations and liabilities of co-defendant ATO by virtue of RA
6958, the only obligation of co-defendant ATO is to comply with
the Decision rendered on January 3, 1989 by the Regional Trial
Court, Branch VI, Cebu City in Civil Case No. Ceb-4115 entitled
Milagros Urgello vs. Republic of the Philippines for reconveyance
of Lot No. 913-E-3. By virtue of said decision, the said lot was [sic]
already reconveyed to the plaintiff were it not for the obligation of

[37]

raised

co-defendant DPWH to purchase the same as stipulated in the

Compromise Agreement. This being the case, ownership
over Lot No. 913-E-3 was never acquired nor transferred to
[38]
defendant MCIAA. (Emphasis and underscoring supplied)
By Decision of March 10, 1999, Branch 22 of the RTC Cebu disposed as
[39]

follows:

WHEREFORE, in view of the foregoing, judgment is hereby

rendered:
1. Ordering defendants DPWH, MCIAA, and ATO to
solidarily reconvey Lot No.
913-E-3 to
plaintiff without anymore need of paying the
repurchase price of P3,105.00 as it was paid
already;
2. Ordering the defendants DPWH, MCIAA, and ATO
to solidarily return to
plaintiff Lot No.
913-E2 and Lot No. 913-E-4 (including Lot No. 913-E-4-A);
3. Ordering defendants DPWH, MCIAA, and ATO
to solidarily pay rentals on Lot No. 913-E-3 at the
rate of P20.00 square meter per month from July 8,
1985 to the present; however, for defendant
MCIAA, payment hereof shall be reckoned
from August 15, 1990 only;
4. Ordering defendants DPWH, MCIAA, and ATO
to solidarily pay rentals on Lot No. 913-E-2 and Lot
No. 913-E-4 at the rate of P20.00 per square meter
per month from January 1, 1985 to the present;
however, in the case of defendant MCIAA, payment
hereof shall be reckoned from August 15,
1990 only;
5. Directing defendants DPWH, MCIAA, and ATO
to solidarily demolish the fence traversing Lot No.
913-E-2 at their own expense;
6. Ordering defendants DPWH, MCIAA, and ATO
to solidarily pay plaintiff attorneys fees in the
amount of P300,000.00.
No costs.

[40]

(Emphasis, italics, and underscoring supplied)

In holding petitioners solidarily liable, the trial court explained:

[T]his Court hereby declares that the reconveyance
of Lot [No.] 913-E-3 is a solidary obligation of all three (3)
defendants DPWH, MCIAA, and ATO.
Defendant DPWH is obliged to reconvey because as the
evidence of the case would show, said defendant is the
one presently in possession and occupation of the property being
the lessee thereof by virtue of the questionable Memorandum of
Agreement it entered into with BAT.
Defendant MCIAA is also obligated to reconvey on the
ground that it is the legal custodian of the lot by virtue of R.A.
6958 creating the MCIAA and transferring to it all the assets of the
Lahug Airport.
While it may be seriously argued that based on the
evidence on record, there was no turnover of any facilities to
defendant MCIAA yet, under the express provision of Sec. 15 R.A.
6958, defendant MCIAA is constituted as the legal transferee of all
facilities, lands, buildings, and other properties of the Lahug
Airport, a division of ATO. It provides, All existing public airport
facilities, runways, lands, buildings and other properties, movable
or immovable, belonging to or presently administered by the
airportsare hereby transferred to the Authority. Construing the
letter of this provision, there is no denying that legally and
technically, defendant MCIAA is the present administratorcustodian of all the assets, facilities, and properties (including Lot
No. 913-E-3) of the Lahug Airport.
Moreover, upon the transfer to and acceptance by MCIAA
of these assets, facilities, properties, etc., it likewise assumed the
liabilities and obligations of ATO which includes the reconveyance
of Lot No. 913-E-3 to its owner her resolutory condition [sic]. This
assumption of liabilities and obligations of ATO is specifically
provided in Section 17 of the same law, which says:
Sec. 17. Transfer of Liabilities and
Debts. Upon the transfer to and acceptance by
the authority of the existing physical facilities,
intangible assets and completed projects
referred to in the preceding sections, all debts,
liabilities,
and obligations of
government
agencies or entities concerned, intangible assets

and completed project within the airports shall

likewise be assumed by the authority.

a solidary obligation of all the defendants for the same reasons as

already discussed earlier.

The language of the aforecited provision is very clear, and

there can never be doubt that MCIAA is obligated technically to
reconvey plaintiffs lot.

For the unauthorized use of Lot No. 913-E-3 after

the Lahug Airport was abandoned and after plaintiff tendered her
repurchase price, and for the illegal encroachment and occupation
of Lot No. 913-E-2 and Lot No. 913-E-4 by the government, this
Court likewise finds as valid the demand of plaintiff for rentals on
the aforementioned lots.

This Court likewise believes that defendant ATO has also

an obligation (jointly and severally with the other defendants)
to effect the reconveyance of the property to the plaintiff.This is
anchored on the fact that considering that there was no turnover
of any facilities, properties, lands, buildings, etc. by it to defendant
MCIAA, defendant ATO is still the open exercising custody and
administration over the properties.
On the demand for the return of Lot No. 913-E-[2]
and Lot No. 913-E-4 to plaintiff, this Court finds the same to be
meritorious.
As shown in the records, the aforementioned lots were
never included in the expropriation proceedings over Lot No. 913E-3. These lots, without the plaintiffs consent, were unilaterally
taken by the government when BAT fenced the same. Such an act
violates the constitutional mandate that [Private] property shall
[not] be taken for public use without just compensation (Section
9, Art. III, Constitution). Likewise, it is deprivation of
property without due process of law. [Is it] not that justice and
equity demand that what is not yours should be returned to its
rightful owner?
Corollary to this, the return of Lot No. 913-E-4 necessarily
includes Lot No. 913-E-4-A that was the subject of another
expropriation complaint (Civil Case No. 4541) which ended up in a
compromise agreement and a Decision based thereon. . . .
To recall, one of the provisions of the said compromise
agreement was the sale of Lot No. 913-E-4-A to the government
at P779,350.00. However, as the evidence would show, the
government did not pay the said amount for unexplained
reasons. Said failure consequently abrogated the whole
compromise agreement; and there is now created an obligation on
the part of the government to return the property to its owner,
plaintiff herein.
As in the case of Lot No. 913-E-3 (expropriated),
the reconveyance/return of Lot No. 913-E-2 and Lot No. 913-E-4 is

It is an undenial fact that the government has benefited

from the use, occupation, and possession of these lots; while on
the other hand, the plaintiff herein has suffered from the
deprivation thereof. Again, if we are to live by the sway and
dominance of justice, it would thus be equitable that plaintiff be
compensated by the government in the form of rentals, at least,
for after all, no one, not even the government, is exempted in the
eyes of the law.
Payment of [the] rentals should be a joint and several
obligation of all the defendants. . . .
The liability of defendant DPWH rests on the
facts [sic] that it is the one which has been in possession and
occupation of these properties. Whereas in the case of defendant
ATO, said defendant through the then BAT was the one which
illegally constructed the fence enclosing the properties. Besides,
because it failed to turnover its facilities, properties, lands,
buildings, etc. to defendant MCIAA, it is still the administrator and
custodian of all these litigated lots.
Upon the other hand, the obligation of defendant MCIAA
finds its basis in R.A. 6958, wherein under this law, specifically
Sections 15 and 17 thereof, defendant MCIAA is supposed to be
administering and managing all the facilities, lands, buildings, and
other properties of defendant ATO. The fact that it has not
received even a single property from defendant ATO does not
relieve it from such obligation because the law (R.A. 6958) is quite
specific. Besides, defendant MCIAA should be doing its job.
xxxx
On plaintiffs demand for the abolition of the fence
traversing her Lot No. 913-E-2, the Court hereby directs
defendants DPWH, MCIAA, and ATO to jointly and severally
demolish the same at their own expense.

The illegal construction of said fence has made the

government a builder in bad faith under Article 450 of the Civil
[41]
Code . . . . (Emphasis and underscoring supplied)

Since respondents cause of action against the ATO with regard to Lot No. 913E-3 refers to its retention of title thereto despite the occurrence of the resolutory
condition stipulated in the Conditional Deed of Sale, MCIAAs liability would depend on

On appeal,

[42]

the Court of Appeals, by Decision

[43]

dated February 17,

whether it is ATOs successor-in-interest with respect to the said lot. Both the trial court
and the appellate court held in the affirmative on the basis of Republic Act 6958, Section

2004, affirmed the decision of the trial court.

15 which reads:
Hence, the present Petition for Review on Certiorari

[44]

filed by MCIAA, DPWH,

and ATO positing that:

I. RESPONDENTS MONEY CLAIM MUST BE FILED WITH THE
COMMISSION ON AUDIT (COA).
II. PETITIONER MCIAA IS NOT OBLIGED TO RECONVEY LOT NOS.
913-[3]-2, 913-E-3, AND 913-E-4.
III. PETITIONER MCIAA IS NOT OBLIGED TO PAY RENTALS FOR THE
USE OF THE LOTS.
IV. PETITIONER MCIAA IS NOT OBLIGED TO DEMOLISH
[45]
THE FENCE TRAVERSING LOT [NO.]
913-E-2. (Emphasis
and underscoring supplied)

It bears emphasis that in rendering the appealed judgment, all that the trial
court did was find petitioners liable, providing the bases therefor.

Contrary to petitioners DPWHs and ATOs undertakings in the January 17,

1990 Compromise Agreement, they failed to reconvey Lot No. 913-E-3 to respondent
despite her return of the purchase price therefor. Such failure amounts to expropriation
without just compensation.

SECTION 17. Transfer of Liabilities and Debts. Upon the

transfer to and acceptance by the Authority of the existing physical
facilities, intangible assets and completed projects referred to in
the preceding sections, all debts, liabilities, and obligations of
government agencies or entities concerned in respect of such
physical facilities, tangible assets and completed projects within
the airports shall likewise be assumed by the Authority. (Emphasis
and underscoring supplied)
Petitioners claim, however, as follows:

DPWH and the ATO should thus be held solidarily liable to reconvey Lot No.
913-E-3 to respondent and pay rentals therefore effective July 8, 1985 when she
tendered/returned the P3,105.00 purchase price.

SECTION 15. Transfer of Existing Facilities and Intangible

Assets. All existing public airport facilities, runways, lands,
buildings and other properties, movable or immovable, belonging
to or presently administered by the airports, and all assets,
powers, rights, interest and privileges relating to airport works or
air operations, including all equipment which are necessary for the
operation of air navigation, aerodrome control towers, crash, fire,
and rescue facilities are hereby transferred to the Authority:
Provided, however, That the operational control of all equipment
necessary for the operation of radio aids to air navigation, airways
communication, the approach control office, and the area control
center shall be retained by the Air Transportation Office. No
equipment, however, shall be removed by the Air Transportation
Office from Mactan without the concurrence of the Authority. The
Authority may assist in the maintenance of the Air Transportation
Office equipment, and of Section 17 which is requoted for
convenience, viz:

[46]

. . . The provision is clear that it is only upon the transfer

to and acceptance by petitioner MCIAA of a particular physical
facility or property that petitioner MCIAA will assume the
obligations of petitioner ATO over the facility or property.
xxxx

[I]t is only upon the transfer to and acceptance by

petitioner MCIAA of the lots can it be said that it assumed the
[47]
obligations of petitioner ATO over the lots. (Underscoring in the
original; emphasis supplied)

The airports referred to [in Section 15] are the Lahug Air
Port in Cebu City and the Mactan International Airport in the
Province of Cebu, which belonged to the Republic of the
Philippines, then under the Air Transportation Office (ATO).

To MCIAA, the phrase upon transfer to and acceptance by means that a formal
turnover to it of a particular facility by the ATO and a formal acceptance by it are
required before it assumes the obligations of the ATO thereover. It argues that since
ATO never turned over Lot No. 913-E-3 to it, it cannot be compelled to assume ATOs
obligation to reconvey the same.

[48]

Section 15 of Republic Act No. 6958 is clear, however, that upon its passage, all
existing airport facilities and other properties were thereby transferred to MCIAA, viz:
All existing public airport facilities, runways, lands,
buildings and other properties, movable or immovable, belonging
to or presently administered by the airports, and all assets,
powers, rights, interest and privileges relating to airport works or
air operations, including all equipment which are necessary for the
operation of air navigation, aerodrome control towers, crash, fire,
and
rescue
facilities
are hereby
transferred to
the
Authority: (Emphasis supplied)

Thus, Republic Act No. 6958 transferred Lot No. 913-E-3 to MCIAA.

In another vein, Section 3 of Republic Act No. 6958 states:

Primary Purposes and Objectives The [Mactan-Cebu
International Airport] Authority shall principally undertake the
economical, efficient, and effective control, management and
supervision of the Mactan International Airport in the Province of
Cebu and the Lahug Airport in Cebu City hereinafter collectively
referred to as airports, and such other airports as may be
established in the Province of Cebu. In addition, it shall have the
following objectives:

It is a settled rule in statutory construction that

The law must not be read in truncated parts; its provisions
must be read in relation to the whole law. It is [a] cardinal rule in
statutory construction that a statutes clauses and phrases must
not be taken as detached and isolated expressions, but the whole
and every part thereof must be considered in fixing the meaning of
any of its parts in order to produce a harmonious whole. Every part
of the statute must be interpreted with reference to the
context, i.e., that every part of the statute must be considered
together with other parts of the statute and kept subservient to
[49]
the general intent of the whole enactment.

Section 17 of Republic Act No. 6958 must thus be read vis a viz Section 15 as
well

as

the

other

provisions

of

the

said

law. In Mactan-

Cebu International Airport Authority v. Hon. Ferdinand J. Marcos, et al.,

passing on Sec. 15 of Republic Act No. 6958, held:

[50]

It may be reasonable to assume that the term lands refer

to lands in Cebu City then administered by the Lahug Air Port and
includes the parcels of the land the respondent City ofCebu seeks
to levy on for real property taxes. This section involves a transfer of
the lands, among other things, to the petitioner and not just the
transfer of the beneficial use thereof, with the ownership being
retained by the Republic of the Philippines.
This transfer is actually an absolute conveyance of the
ownership thereof because the petitioners authorized capital
stock consists of, inter alia, the value of such real estate owned
and/or administered by the airports. Hence the petitioner is now
[51]
the owner of the land in question. . . .
(Emphasis and
underscoring supplied)

this Court,

(a) To encourage, promote, and develop international and

domestic air traffic in the central Visayas and
Mindanao regions as a means of making the
regions centers of international trade and tourism,
and accelerating the development of the means of
transportation and communications in the country;
and
(b) To upgrade the services and facilities of the airports
and to formulate internationally acceptable

standards of airport accommodation

service. (Emphasis supplied)

and

If formal transfer and acceptance of the assets mentioned in Section 15 were

needed before MCIAA could assume the obligations arising therefrom, the economical,

Finally, since the acts and omissions of the ATO and the DPWH are what
compelled respondent to litigate, only they should be held liable for the payment of
attorneys fees.

efficient and effective control, management and supervision of the Mactan International
Airport and the Lahug Airport could be impeded by ATO refusing to turn over, and by

WHEREFORE, the petition is in PART GRANTED. The decision of the Court of

Appeals, which affirmed the decision of the trial court, is MODIFIED. As modified, the

MCIAA refusing to accept such assets.

dispositive portion of the decision reads:

MCIAA is thus bound, as ATOs successor-in-interest, to reconvey Lot No. 913-E3. And it is solidarily liable with its co-petitioners to pay rentals in arrears over the said

1. Petitioners Department of Public Works and Highways, Mactan-Cebu

International Airport Authority, and Air Transportation Office are ordered

lot.

to solidarily reconvey Lot No. 913-E-3 to respondent;

In light of petitioners argument that:
2. Petitioners DPWH, MCIAA, and ATO are ordered to solidarily pay rentals on
. . . While it is true that R.A. 6958 was signed into law on July 31,
1990, it is equally true that Section 21 of the law provides for its
effectivity fifteen (15) days after its publication in at least two (2)
national newspapers of general circulation, and not fifteen (15)
days from its approval. It was wrong for both courts to assume,
without supporting evidence, that R.A. 6958 was published in two
(2) national newspapers of general circulation on the same day it
was signed into law. (Emphasis in the original; underscoring
[52]
supplied),

Lot No. 913-E-3 at the rate of P20 per square meter per month from July 8,
1985 up to the present. Payment of rentals on the part of MCIAA shall,
however, be reckoned from November 13, 1990;
3. Petitioner DPWH is ordered to demolish the fence traversing Lot No. 913-E2;

4. Petitioner DPWH is ordered to return to respondent Lot Nos. 913-E-2 and

this Court fixes the effectivity date of the said law to November 13, 1990, 15 days after
it was published in the Official Gazette.

913-E-4;

[53]

5. Petitioner DPWH and ATO are ordered to solidarily pay rentals on Lot Nos.
MCIAA may not be solidarily liable with DPWH and ATO, however, for

913-E-2 and 913-E-4, from January 1, 1985 up to the present; and

the return of Lot Nos. 913-E-2 and 913-E-4 and for the payment of rentals
thereon. These obligations of the DPWH and the ATO arose from their illegal physical
possession of the said lots up to the present. What Republic Act No. 6958 transferred

6. Petitioners ATO and the DPWH are ordered to solidarily pay attorneys fees in
the amount of P300,000.00.

from the ATO to MCIAA are the properties owned or administered by the ATO, not
those physically possessed by the ATO.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-55166 May 2l, 1987
TIONGSON, married to CAYETANO TIONGSON, PACITA L. GO married to EDUARDO GO,
ROBERTO LAPERAL III, MIGUEL SISON, PHILIP L. MANOTOK, MARIA TERESA L.
MANOTOK, JOSE CLEMENTE MANOTOK, RAMON SEVERINO MANOTOK, JOSE MARIA
MANOTOK and JESUS JUDE MANOTOK, JR., assisted by their father and judicial
guardian, JESUS MANOTOK, MILAGROS V. MANOTOK, IGNACIO V. MANOTOK, JR.,
FELISA V. MANOTOK, MARY-ANN V. MANOTOK, MICHAEL V. MANOTOK, FAUSTO C.
MANOTOK, SEVERINO MANOTOK III, and JESUS MANOTOK, petitioners,
vs.
NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents.
No. L-55167 May 21,1987
PATRICIA L. TIONGSON, PATRICIA L. GO, assisted by her husband EDWARD GO,
ROBERTO LAPERAL III, ELISA R. MANOTOK, JESUS R. MANOTOK, MIGUEL A. B. SISON,
SEVERINO MANOTOK III, JOSE MARIA MANOTOK and JESUS MANOTOK, represented
herein by their father and judicial guardian JESUS MANOTOK, JR., IGNACIO R.
MANOTOK.,
and
FAUSTO
C.
MANOTOK,
petitioners,
vs.
NATIONAL HOUSING AUTHORITY and the REPUBLIC OF THE PHILIPPINES, respondents
GUTIERREZ, JR., J.:
Before us are two petitions. The first one challenges the constitutionality of Presidential
Decree No. 1669 which provides for the expropriation of the property known as the
"Tambunting Estate" and the second challenges the constitutionality of Presidential
Decree No.1670 which provides for the expropriation of the property along the Estero
de Sunog-Apog. In both cases, the petitioners maintain that the two decrees are
unconstitutional and should be declared null and void because:
(1) They deprived the petitioners of their properties without due
process of law.
(2) The petitioners were denied to their right to just compensation
(3) The petitioners' right to equal protection of the law was violated.
(4) The decrees are vague, defective, and patently erroneous.

(5) The petitioners' properties are not proper subjects for

expropriation considering their location and other relevant
circumstances.
On June 11, 1977, the President of the Philippines issued Letter of Instruction (LOI) No.
555 instituting a nationwide slum improvement and resettlement program (SIR). On the
same date, the President also issued LOI No. 557, adopting slum improvement as a
national housing policy.
In compliance with LOI No. 555, the Governor of Metro Manila issued, on July 21, 1977,
Executive Order No.6-77 adopting the Metropolitan Manila Zonal Improvement
Program which included the properties known as the Tambunting Estate and the SunogApog area in its priority list for a zonal improvement program (ZIP) because the findings
of the representative of the City of Manila and the National Housing Authority (NHA)
described these as blighted communities.
On March 18, 1978, a fire razed almost the entire Tambunting Estate. Following this
calamity, the President and the Metro Manila Governor made public announcement
that the national government would acquire the property for the fire victims. The
President also designated the NHA to negotiate with the owners of the property for the
acquisition of the same. This, however, did not materialize as the negotiations for the
purchase of the property failed.
On December 22, 1978, the President issued Proclamation No. 1810 declaring all sites
Identified by the Metro Manila local governments and approved by the Ministry of
Human Settlements to be included in the ZIP upon proclamation of the President. The
Tambunting Estate and the Sunog-Apog area were among the sites included.
On January 28, 1980, the President issued the challenged Presidential Decrees Nos.
1669 and 1670 which respectively declared the Tambunting Estate and the Sunog-Apog
area expropriated.
Presidential Decree No. 1669, provides, among others:
Section 1. The real properties known as the "Tambunting Estate" and
covered by TCT Nos. 119059, 122450, 122459, 122452 and Lots Nos.
1- A, 1-C, 1-D, l-E, 1-F and 1-H of (LRC) Psd-230517 (Previously covered
by TCT No. 119058) of the Register of Deeds of Manila with an area of
52,688.70 square meters, more or less are hereby declared
expropriated. The National Housing Authority hereinafter referred to
as the "Authority" is designated administrator of the National
Government with authority to immediately take possession, control,
disposition, with the power of demolition of the expropriated
properties and their improvements and shall evolve and implement a
comprehensive development plan for the condemned properties.

xxx xxx xxx

Section 6. Notwithstanding any provision of law or decree to the
contrary and for the purpose of expropriating this property pegged at
the -.market value determined by the City Assessor pursuant to
Presidential Decree No. 76, as amended, particularly by Presidential
Decree No. 1533 which is in force and in effect at the time of the
issuance of this decree. In assessing the market value, the City
Assessor pursuant consider existing conditions in the area notably,
that no improvement has been undertaken on the land and that the
land is squatted upon by resident families which should considerably
depress the expropriation cost. Subject to the foregoing, the just
compensation for the above property should not exceed a maximum
of SEVENTEEN MILLION PESOS (Pl7,000,000.00) which shall be payable
to the owners within a period of five (5) years in five (5) equal
installments.
Presidential Decree No. 1670, on the other hand, provides:
Section 1. The real property along the Estero de Sunog-Apog in Tondo,
Manila formerly consisting of Lots Nos 55-A, 55-B and 55-C, Block 2918
of the subdivision plan Psd-1 1746, covered by TCT Nos. 49286, 49287
and 49288, respectively, of the Registry of Deeds of Manila, and
formerly owned by the Manotok Realty, Inc., with an area of 72,428.6
square meters, more or less, is hereby declared expropriated. The
National Housing Authority hereinafter referred to as the 'Authority' is
designated administrator of the National Government with authority
to immediately take possession, control and disposition, with the
power of demolition of the expropriated properties and their
improvements and shall evolve and imagine implement a
comprehensive development plan for the condemned properties.
xxx xxx xxx
Section 6. Notwithstanding any provision of law or decree to the
contrary and for the purpose of expropriating this property pegged at
the market value determined by the City Assessor pursuant to
Presidential Decree No. 76, as amended, particularly by Presidential
Decree No. 1533 which is in force and in effect at the time of the
issuance of this decree. In assessing the market value, the City
Assessor shall consider existing conditions in the area notably, that no
improvement has been undertaken on the land and that the land is
squatted upon by resident families which should considerably depress
the expropriation cost. Subject to the foregoing, the just
compensation for the above property should not exceed a maximum

of EIGHT MILLION PESOS (P8,000,000.00), which shall be payable to

the owners within a period of five (5) years in five equal installment.
On April 4, 1980, the National Housing Authority, through its general-manager, wrote
the Register of Deeds of Manila, furnishing it with a certified copy of P.D. Nos. 1669 and
1670 for registration, with the request that the certificates of title covering the
properties in question be cancelled and new certificates of title be issued in the name of
the Republic of the Philippines.
However, the Register of Deeds in her letter to NHA's general-manager, requested the
submission of the owner's copy of the certificates of title of the properties in question
to enable her to implement the aforementioned decrees.
Subsequently, petitioner Elisa R. Manotok, one of the owners of the properties to be
expropriated, received from the NHA a letter informing her that the latter had
deposited, on July 16, 1980, with the Philippine National Bank the total amount of
P5,000,000.00 which included the amount of P3,400,000.00 representing the first
annual installment for the Tambunting Estate pursuant to P.D. No. 1669; and another
P5,000,000.00 which also included the amount of P1,600,000.00 representing the first
annual installment for the Sunog-Apog area under P.D. No. 1670. The petitioner was
also informed that she was free to withdraw her share in the properties upon surrender
by her of the titles pertaining to said properties and that if petitioner failed to avail
herself of the said offer, the NHA would be constrained to take the necessary legal steps
to implement the decrees.
On August 19, 1980, petitioner Elisa R. Manotok wrote a letter to the NHA alleging, inter
alia, that the amounts of compensation for the expropriation of the properties of the
petitioners as fixed in the decrees do not constitute the "just compensation" envisioned
in the Constitution. She expressed veritable doubts about the constitutionality of the
said decrees and informed the NHA that she did not believe that she was obliged to
withdraw the amount of P5,000,000.00 or surrender her titles over the properties.
In the meantime, some officials of the NHA circulated instructions to the tenantsoccupants of the properties in dispute not to pay their rentals to the petitioners for their
lease-occupancy of the properties in view of the passage of P.D. Nos. 1669 and 1670.
Hence, the owners of the Tambunting Estate filed a petition to declare P.D. No. 1669
unconstitutional. The owners of the Sunog-Apog area also filed a similar petition
attacking the constitutionality of P.D. No. 1670.
On September 27, 1982, the lessees of the Tambunting Estate and the Sunog-Apog area
filed a motion for leave to intervene together with their petition for intervention
alleging that they are themselves owners of the buildings and houses built on the
properties to be expropriated and as such, they are real parties-in-interest to the
present petitions.

The petitioners maintain that the Presidential Decrees providing for the direct
expropriation of the properties in question violate their constitutional right to due
process and equal protection of the law because by the mere passage of the said
decrees their properties were automatically expropriated and they were immediately
deprived of the ownership and possession thereof without being given the chance to
oppose such expropriation or to contest the just compensation to which they are
entitled.
The petitioners argue that the government must first have filed a complaint with the
proper court under Rule 67 of the Revised Rules of Court in order to fulfill the
requirements of due process. 'They contend that the determination of just
compensation should not have been vested solely with the City Assessor and that a
maximum or fixed amount of compensation should not have been imposed by the said
decrees. Petitioners likewise state that by providing for the maximum amount of just
compensation and by directing the City Assessor to take into consideration the alleged
existing conditions of the properties in question, namely: that no "improvement has
been undertaken on the land and that the land is squatted upon by resident families
which should considerably depress the expropriation costs," the City Assessor is forced
to accept, as actual and existing conditions of the property, the foregoing statements in
the decrees when in fact the Sunog-Apog area has been subdivided into subdivision lots
and leased to the occupants thereof under contracts of lease, making them lessees and
not squatters as assumed by Presidential Decree No. 1670. Moreover, each subdivision
lot is surrounded by adobe walls constructed by the particular owner of the property:
the houses were required to have septic tanks by the City Hall and the, owners
themselves: there is a drainage system; and there are adequate water facilities.
As far as the Tambunting Estate is concerned, the petitioners maintain that aside from
the residential houses in the area, there are buildings and structures of strong materials
on the lots fronting Rizal Avenue Extension, most of which are leased to proprietors of
business establishments under long term contracts of lease which use the same for their
furniture business from which they secure substantial income.
The Government as represented by the Solicitor-General and the NHA, on the other
hand, contends that the power of eminent domain is inherent in the State and when the
legislature itself or the President through his law-making prerogatives exercises this
power, the public use and public necessity of the expropriation, and the fixing of the just
compensation become political in nature, and the courts must respect the decision of
the law-making body, unless the legislative decision is clearly and evidently arbitrary,
unreasonable, and devoid of logic and reason; and that all that is required is that just
compensation be determined with due process of law which does not necessarily entail
judicial process.
The public respondents, further argue that since the Constitution lays down no
procedure by which the authority to expropriate may be carried into effect, Rule 67 of
the Revised Rules of Court which is invoked by the petitioners may be said to have been
superseded by the challenged decrees insofar as they are applicable to the properties in

question and, therefore, there is no need to follow the said rule for due process to be
observed. Moreover, the public respondents maintain that it cannot be fairly said that
the petitioners' valuations were ignored in fixing the ceiling amount of the properties in
question because the only reason why the determination appeared unilateral was
because said petitioners did not actually state any valuation in their sworn declaration
of true market value of their respective properties, and as far as payment in installments
is concerned, the same can be justified by the fact that the properties in question are
only two of the four hundred and fifteen (415) slums and blighted areas in Metro Manila
and two of the two hundred and fifty one (251) sites for ungrading under the ZIP and
that to immediately acquire and upgrade all those sites would obviously entail millions
and millions of pesos. The financial constraints, therefore, require a system of payment
of just compensation. Thus, the respondent states that the payment of just
compensation in installments did not arise out of ill will or the desire to discriminate.
We start with fundamentals.
The power of eminent domain is inherent in every state and the provisions in the
Constitution pertaining to such power only serve to limit its exercise in order to protect
the individual against whose property the power is sought to be enforced. We pointed
out the constitutional limitations in the case of Republic vs. Juan (92 SCRA 26, 40):
To begin with, it must be emphasized that plaintiff-appellee in this
instant case is the Republic of the Philippines which is exercising its
right of eminent domain inherent in it as a body sovereign. In the
exercise of its sovereign right the State is not subject to any limitation
other than those imposed by the Constitution which are: first, the
taking must be for a public use; secondly, the payment of just
compensation must be made: and thirdly, due process must be
observed in the taking...
The challenged decrees are uniquely unfair in the procedures adopted and the powers
given to the respondent NHA.
The Tambunting subdivision is summarily proclaimed a blighted area and directly
expropriated by decree without the slightest semblance of a hearing or any proceeding
whatsoever. The expropriation is instant and automatic to take effect immediately upon
the signing of the decree. No deposit before taking is required under the decree. The
P3,400,000.00 appropriated from the general fund is not a deposit but constitutes an
installment payment for the property, the maximum price of which is fixed so as not to
exceed P17,000,000.00. There is no provision for any interests to be paid on the unpaid
installments spread out over a period of five years. Not only are the owners given
absolutely no opportunity to contest the expropriation, plead their side, or question the
amount of payments fixed by decree, but the decisions, rulings, orders, or resolutions of
the NHA are expressly declared as beyond the reach of judicial review. An appeal may
be made to the Office of the President but the courts are completely enjoined from any

inquiry or participation whatsoever in the expropriation of the subdivision or its

incidents.
In some decisions promulgated before the February, 1986 political upheaval, this Court
presumed the validity of the beautiful "whereases" in presidential decrees governing
expropriations and legitimated takings of private property which, in normal times,
would have been constitutionally suspect. There were then the avowed twin purposes
of martial law to first quell the Communist rebellion and second to reform society. Thus,
in Haguisan v. Emilia (131 SCRA 517) the Court sustained the contention that prior
hearing is no longer necessary under P.D. No. 42 in ascertaining the value of the
property to be expropriated and before the government may take possession. There
was a disregard in the decree for Section 2 of Rule 67 which requires the court having
jurisdiction over the proceedings to promptly ascertain and fix the provisional value of
the property for purposes of the initial taking or entry by the Government into the
premises. In National Housing Authority v. Reyes (123 SCRA 245) the Court upheld the
decrees which state that the basis for just compensation shall be the market value
declared by the owner for tax purposes or such market value as determined by the
government assessor, whichever is lower.
Subsequent developments have shown that a disregard for basic liberties and the
shortcut methods embodied in the decrees on expropriation do not achieve the desired
results. Far from disappearing, squatter colonies and blighted areas have multiplied and
proliferated. It appears that constitutionally suspect methods or authoritarian
procedures cannot, be the basis for social justice. A program to alleviate problems of the
urban poor which is well studied, adequately funded, genuinely sincere, and more
solidly grounded on basic rights and democratic procedures is needed.
We re-examine the decisions validating expropriations under martial law and apply
established principles of justice and fairness which have been with us since the advent
of constitutional government. We return to older and more sound precedents.

proceeding and the character of the rights which may be affected by

it. Reetz v. Michigan, 188 U.S. 505, 508, 47 L.ed. 563, 566, 23 Sup. Ct.
Rep. 390; Missouri ex rel. Hurwitz v. North, 271 U.S. 40, 70 L.ed. 818,
46 Sup. Ct. Rep. 384: Bauman v. Ross, 167 U.S. 548, 593, 42 L.ed. 270,
289, 17 Sup. Ct. Rep. 966; A. Backus Jr. & Sons v. Fort Street Union
Depot Co. 169 U.S. 569, 42 L. ed. 859, 18 Sup. Ct. Rep. 445.
In other words, although due process does not always necessarily demand that a
proceeding be had before a court of law, it still mandates some form of proceeding
wherein notice and reasonable opportunity to be heard are given to the owner to
protect his property rights. We agree with the public respondents that there are
exceptional situations when, in the exercise of the power of eminent domain, the
requirement of due process may not necessarily entail judicial process. But where it is
alleged that in the taking of a person's property, his right to due process of law has been
violated, the courts will have to step in and probe into such an alleged violation.
Thus, certain portions of the decision in De Knecht v. Bautista, (100 SCRA 660, 666-667)
state:
There is no question as to the right of the Republic of the Philippines
to take private property for public use upon the payment of just
compensation. Section 2, Article IV of the Constitution of the
Philippines provides: 'Private property shall not be taken for public use
without just compensation.
It is recognized, however, that the government may not capriciously or
arbitrarily choose what private property should be taken. In J.M.
Tuazon & Co., Inc. v. Land tenure Administration, 31 SCRA 413, 433,
the Supreme Court said:
xxx xxx xxx

The due process clause cannot be rendered nugatory everytime a specific decree or law
orders the expropriation of somebody's property and provides its own peculiar manner
of taking the same. Neither should the courts adopt a hands-off policy just because the
public use has been ordained as existing by the decree or the just compensation has
been fixed and determined beforehand by a statute.
The case of Dohany v. Rogers, (74 L.ed. 904.'912, 281. U.S. 362-370) underscores the
extent by which the due process clause guarantees protection from arbitrary exercise of
the power of eminent domain.
The due process clause does not guarantee to the citizen of a state any
particular form or method of state procedure. Under it he may neither
claim a right to trial by jury nor a right of appeal. Its requirements are
satisfied if he has reasonable opportunity to be heard and to present
his claim or defense, due regard being had to the nature of the

It is obvious then that a land-owner is covered by the mantle of

protection due process affords. It is a mandate of reason. It frowns on
arbitrariness, it is the antithesis of any governmental act that smacks
of whim or caprice. It negates state power to act in an oppressive
manner. It is, as had been stressed so often, the embodiment of the
sporting Idea of fair play. In that sense, it stands as a guaranty of
justice. 'That is the standard that must be met by any governmental
agency in the exercise of whatever competence is entrusted to it As
was so emphatically stressed by the present Chief Justice, 'Acts of
Congress, as well as those of the Executive, can deny due process only
under pain of nullity...
In the same case the Supreme Court concluded:

With due recognition then of the power of Congress to designate the

particular property to be taken and how much thereof may be
condemned in the exercise of the power of expropriation, it is still a
judicial question whether in the exercise of such competence, the
party adversely affected is the victim of partiality and prejudice, That
the equal protection clause will not allow. (p. 436)
The basis for the exercise of the power of eminent domain is necessity. This Court stated
in City of Manila v. Chinese Community of Manila (40 Phil. 349) that "(t)he very
foundation of the right to exercise eminent domain is a genuine necessity and that
necessity must be of a public character.
In City of Manila v. Arellano Law Colleges (85 Phil. 663), we reiterated that a necessity
must exist for the taking of private property for the proposed uses and purposes but
accepted the fact that modern decisions do not call for absolute necessity. It is enough if
the condemnor can show a reasonable or practical necessity, which of course, varies
with the time and peculiar circumstances of each case.
In the instant petitions, there is no showing whatsoever as to why the properties
involved were singled out for expropriation through decrees or what necessity impelled
the particular choices or selections. In expropriations through legislation, there are, at
least, debates in Congress open to the public, scrutiny by individual members of the
legislature, and very often, public hearings before the statute is enacted. Congressional
records can be examined. In these petitions, the decrees show no reasons whatsoever
for the choice of the properties as housing projects. The anonymous adviser who
drafted the decrees for the President's signature cannot be questioned as to any
possible error or partiality, act of vengeance, or other personal motivations which may
have led him to propose the direct expropriation with its onerous provisions.
The Tambunting estate or at least the western half of the subdivision fronting Rizal
Avenue Extension is valuable commercial property. It is located at the junction where
three main city streets converge Rizal Avenue from downtown Manila, Jose Abad
Santos Street from Binondo, and Aurora Boulevard leading to Retiro Street and other
points in Quezon City. The Libiran Furniture Company, alone, which fronts the entrance
to Jose Abad Santos Street is clearly a multi-million peso enterprise. It is a foregone
conclusion that the favored squatters allowed to buy these choice lots would lose no
time, once it is possible to do so, to either lease out or sell their lots to wealthy
merchants even as they seek other places where they can set up new squatter colonies.
The public use and social justice ends stated in the whereas clauses of P.D. 1669 and
P.D. 1670 would not be served thereby.
The provision of P.D. 1669 which allows NHA, at its sole option, to put portions of the
expropriated area to commercial use in order to defray the development costs of its
housing projects cannot stand constitutional scrutiny. The Government, for instance,
cannot expropriate the flourishing Makati commercial area in order to earn money that
would finance housing projects all over the country. The leading case of Guido v. Rural

Progress Administration (84 Phil. 847) may have been modified in some ways by the
provisions of the new Constitution on agrarian and urban land reform and on housing.
The principle of non-appropriation of private property for private purposes, however,
remains. The legislature, according to the Guido case, may not take the property of one
citizen and transfer it to another, even for a full compensation, when the public interest
is not thereby promoted. The Government still has to prove that expropriation of
commercial properties in order to lease them out also for commercial purposes would
be "public use" under the Constitution.
P.D. No. 1670 suffers from a similar infirmity. There is no showing how the President
arrived at the conclusion that the Sunog-Apog area is a blighted community. The many
pictures submitted as exhibits by the petitioners show a well-developed area subdivided
into residential lots with either middle-income or upper class homes. There are no
squatters. The provisions of the decree on the relocation of qualified squatter families
and on the re-blocking and re-alignment of existing structures to allow the introduction
of basic facilities and services have no basis in fact The area is well-developed with
roads, drainage and sewer facilities, water connection to the Metropolitan Waterworks
and Sewerage System electric connections to Manila Electric Company, and telephone
connections to the Philippine Long Distance Telephone Company. There are many
squatter colonies in Metro Manila in need of upgrading. The Government should have
attended to them first. There is no showing for a need to demolish the existing valuable
improvements in order to upgrade Sunog-Apog.
After a careful examination of the questioned decrees, we find P.D. Nos. 1669 and 1670
to be violative of the petitioners' right to due process of law and, therefore, they must
fail the test of constitutionality.
The decrees, do not by themselves, provide for any form of hearing or procedure by
which the petitioners can question the propriety of the expropriation of their properties
or the reasonableness of the just compensation. Having failed to provide for a hearing,
the Government should have filed an expropriation case under Rule 67 of the Revised
Rules of Court but it did not do so. Obviously, it did not deem it necessary because of
the enactment of the questioned decrees which rendered, by their very passage, any
questions with regard to the expropriation of the properties, moot and academic. In
effect, the properties, under the decrees were "automatically expropriated." This
became more evident when the NHA wrote the Register of Deeds and requested her to
cancel the certificate of titles of the petitioners, furnishing said Register of Deeds only
with copies of the decrees to support its request.
This is hardly the due process of law which the state is expected to observe when it
exercises the power of eminent domain.
The government states that there is no arbitrary determination of the fair market value
of the property by the government assessors because if the owner is not satisfied with
the assessor's action, he may within sixty (60) days appeal to the Board of Assessment
Appeals of the province or city as the case may be and if said owner is still unsatisfied,

he may appeal further to the Central Board of Assessment Appeals pursuant to P.D. No.
464. The Government argues that with this procedure, the due process requirement is
fulfilled.

In the following cases, we have upheld the determination of just compensation and the
rationale behind it either at the time of the actual taking of the government or at the
time of the judgment by the court, whichever came first.

We cannot sustain this argument.

Municipality of Daet v. Court of Appeals, (93 SCRA 503, 506, 519):

Presidential Decree No. 464, as amended, otherwise known as the Real Property Tax
Code, provides for the procedure on how to contest assessments but does not deal with
questions as to the propriety of the expropriation and the manner of payment of just
compensation in the exercise of the power of eminent domain. We find this wholly
unsatisfactory. It cannot in anyway substitute for the expropriation proceeding under
Rule 67 of the Revised Rules of Court.
Another infirmity from which the questioned decrees suffer is the determination of just
compensation.
Pursuant to P.D. 1533, the basis of the just compensation is the market value of the
property "prior to the recommendation or decision of the appropriate Government
Office to acquire the property." (see also Republic v. Santos, (1 41 SCRA 30, 35).
In these petitions, a maximum amount of compensation was imposed by the decrees
and these amounts were only a little more than the assessed value of the properties in
1978 when, according to the government, it decided to acquire said properties.
The fixing of the maximum amounts of compensation and the bases thereof which are
the assessed values of the properties in 1978 deprive the petitioner of the opportunity
to prove a higher value because, the actual or symbolic taking of such properties
occurred only in 1980 when the questioned decrees were promulgated.
According to the government, the cut-off year must be 1978 because it was in this year
that the government decided to acquire the properties and in the case of the
Tambunting Estate, the President even made a public announcement that the
government shall acquire the estate for the fire victims.
The decision of the government to acquire a property through eminent domain should
be made known to the property owner through a formal notice wherein a hearing or a
judicial proceeding is contemplated as provided for in Rule 67 of the Rules of Court. This
shall be the time of reckoning the value of the property for the purpose of just
compensation. A television or news announcement or the mere fact of the property's
inclusion in the Zonal Improvement Program (ZIP) cannot suffice because for the
compensation to be just, it must approximate the value of the property at the time of its
taking and the government can be said to have decided to acquire or take the property
only after it has, at the least, commenced a proceeding, judicial or otherwise, for this
purpose.

...And in the case of J.M. Tuason & Co., Inc. v. Land Tenure
Administration, 31 SCRA 413, the Court, speaking thru now Chief
Justice Fernando, reiterated the 'wen-settled (rule) that just
compensation means the equivalent for the value of the property at
the time of its taking. Anything beyond that is more and anything
short of that is less, than just compensation. It means a fair and full
equivalent for the loss sustained, which is the measure of the
indemnity, not whatever gain would accrue to the expropriating
entity.
xxx xxx xxx
We hold that the decision of the Court of Appeals fixing the market
value of the property to be that obtaining, at least, as of the date of
the rendition of the judgment on December 2, 1969 as prayed by
private respondent, which the Court fixed at P200.00 per square
meter is in conformity with doctrinal rulings hereinabove cited that
the value should be fixed as of the time of the taking of the possession
of the property because firstly, at the time judgment was rendered on
December 2, 1969, petitioner had not actually taken possession of the
property sought to be expropriated and secondly, We find the
valuation determined by the Court of Appeals to be just, fair and
reasonable.
National Power Corporation v. Court of Appeals, (1 29 SCRA 665, 673):
xxx xxx xxx
(5) And most importantly,on the issue of just compensation, it is now
settled doctrine, following the leading case of Alfonso v. Pasay City,
(1,06 PhiL 1017 (1960)), that no determine due compensation for
lands appropriated by the Government, the basis should be the price
or value at the time it was taken from the owner and appropriated by
the Government.
The owner of property expropriated by the State is entitled to how
much it was worth at the time of the taking. This has been clarified in
Republic v. PNB (1 SCRA 957) thus: 'It is apparent from the foregoing
that, when plaintiff takes possession before the institution of the
condemnation proceedings, the value should be fixed as of the time of

the taking of said possession, not of filing of the complainant, and that
the latter should be the basis for the determination of the value, when
the of the property involved coincides with or is subsequent to, the
commencement of the proceedings. Indeed, otherwise, the provision
of Rule 619, section 3, directing that compensation "be determined as
of the date of the filing of the complaints" would never be operative.
municipality of La Carlota v. The Spouses Baltazar, et al., 45 SCRA 235
(1972)).
Furthermore, the so-called "conditions" of the properties should not be determined
through a decree but must be shown in an appropriate proceeding in order to arrive at a
just valuation of the property. In the case of Garcia v. Court of Appeals, (102 SCRA 597,
608) we ruled:
...Hence, in estimating the market value, all the capabilities of the
property and all the uses to which it may be applied or for which it is
adapted are to be considered and not merely the condition it is in at
the time and the use to which it is then applied by the owner. All the
facts as to the condition of the property and its surroundings, its
improvements and capabilities may be shown and considered in
estimating its value.
In P.D. No. 76, P.D. No. 464, P.D. No. 794, and P.D. No. 1533, the basis for determining
just compensation was fixed at the market value declared by the owner or the market
value determined by the assessor, whichever is lower.
P.D.s 1669 and 1670 go further. There is no mention of any market value declared by the
owner. Sections 6 of the two decrees peg just compensation at the market value
determined by the City Assessor. The City Assessor is warned by the decrees to
"consider existing conditions in the area notably, that no improvement has been
undertaken on the land and that the land is squatted upon by resident families which
should considerably depress the expropriation costs."
In other cases involving expropriations under P.D. Nos. 76, 464, 794, and 1533, this
Court has decided to invalidate the mode of fixing just compensation under said
decrees. (See Export Processing Zone Authority v. Hon. Ceferino E. Dulay, et al. G.R. No.
59603) With more reason should the method in P.D.s 1669 and 1670 be declared infirm.
The market value stated by the city assessor alone cannot substitute for the court's
judgment in expropriation proceedings. It is violative of the due process and the
eminent domain provisions of the Constitution to deny to a property owner the
opportunity to prove that the valuation made by a local assessor is wrong or prejudiced.
The statements made in tax documents by the assessor may serve as one of the factors
to be considered but they cannot exclude or prevail over a court determination made
after expert commissioners have examined the property and all pertinent circumstances
are taken into account and after the parties have had the opportunity to fully plead

their cases before a competent and unbiased tribunal. To enjoin this Court by decree
from looking into alleged violations of the due process, equal protection, and eminent
domain clauses of the Constitution is impermissible encroachment on its independence
and prerogatives.
The maximum amounts, therefore, which were provided for in the questioned decrees
cannot adequately reflect the value of the property and, in any case, should not be
binding on the property owners for, as stated in the above cases, there are other factors
to be taken into consideration. We, thus, find the questioned decrees to likewise
transgress the petitioners' right to just compensation. Having violated the due process
and just compensation guarantees, P. D. Nos. 1669 and 1670 are unconstitutional and
void.
WHEREFORE, the petitions in G.R. No. 55166 and G.R. No. 55167 are hereby GRANTED.
Presidential Decree Numbers 1669 and 1670 which respectively proclaimed the
Tambunting Estate and the Estero de Sunog-Apog area expropriated, are declared
unconstitutional and, therefore, null and void ab initio.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 87335 February 12, 1990
REPUBLIC
OF
THE
PHILIPPINES, petitioner,
vs.
CRISTINA DE KNECHT AND THE COURT OF APPEALS, respondents.
Villanueva, Talamayan, Nieva, Elegado, and Ante Law Offices for respondent Cristina de
Knecht.
GANCAYCO, J.:
The issue posed in this case is whether an expropriation proceeding that was
determined by a final judgment of this Court may be the subject of a subsequent
legislation for expropriation.
On February 20, 1979 the Republic of the Philippines filed in the Court of First Instance
(CFI) of Rizal in Pasay City an expropriation proceedings against the owners of the
houses standing along Fernando Rein-Del Pan streets among them Cristina De Knecht
(de Knecht for short) together with Concepcion Cabarrus, and some fifteen other
defendants, docketed as Civil Case No. 7001-P.
On March 19, 1979 de Knecht filed a motion to dismiss alleging lack of jurisdiction,
pendency of appeal with the President of the Philippines, prematureness of complaint
and arbitrary and erroneous valuation of the properties. On March 29, 1979 de Knecht
filed an ex parte urgent motion for the issuance by the trial court of a restraining order
to restrain the Republic from proceeding with the taking of immediate possession and
control of the property sought to be condemned. In June, 1979 the Republic filed a
motion for the issuance of a writ of possession of the property to be expropriated on
the ground that it had made the required deposit with the Philippine National Bank
(PNB) of 10% of the amount of compensation stated in the complaint. In an order dated
June 14, 1979 the lower court issued a writ of possession authorizing the Republic to
enter into and take possession of the properties sought to be condemned, and created a
Committee of three to determine the just compensation for the lands involved in the
proceedings.
On July 16, 1979 de Knecht filed with this Court a petition for certiorari and prohibition
docketed as G.R. No. L-51078 and directed against the order of the lower court dated
June 14, 1979 praying that the respondent be commanded to desist from further

proceeding in the expropriation action and from implementing said order. On October
30, 1980 this Court rendered a decision, the dispositive part of which reads as follows:
WHEREFORE, the petition for certiorari and prohibition is hereby
granted. The order of June 14, 1979 authorizing the Republic of the
Philippines to take c enter upon the possession of the properties
sought to be condemned is set aside and the respondent Judge is
permanently enjoined from taking any further action on Civil Case No.
7001-P, entitled 'Republic of the Philippines vs. Concepcion Cabarrus
1
Vda. de Santos, et al.' except to dismiss said case.
On August 8, 1981 defendants Maria Del Carmen Roxas Vda. de Elizalde, Francisco
Elizalde and Antonio Roxas moved to dismiss the expropriation action in compliance
with the dispositive portion of the aforesaid decision of this Court which had become
final and in order to avoid further damage to same defendants who were denied
possession of their properties. The Republic filed a manifestation on September 7, 1981
stating, among others, that it had no objection to the said motion to dismiss as it was in
accordance with the aforestated decision.
On September 2, 1983, the Republic filed a motion to dismiss said case due to the
enactment of the Batas Pambansa Blg. 340 expropriating the same properties and for
the same purpose. The lower court in an order of September 2, 1983 dismissed the case
by reason of the enactment of the said law. The motion for reconsideration thereof was
denied in the order of the lower court dated December 18, 1986.
De Knecht appealed from said order to the Court of Appeals wherein in due course a
2
decision was rendered on December 28, 1988, the dispositive part of which reads as
follows:
PREMISES CONSIDERED, the order appealed from is hereby SET ASIDE.
As prayed for in the appellant's brief another Order is hereby issued
dismissing the expropriation proceedings (Civil Case No. 51078) before
the lower court on the ground that the choice of Fernando Rein-Del
Pan Streets as the line through which the Epifanio de los Santos
Avenue should be extended is arbitrary and should not receive judicial
approval.
No pronouncement as to Costs.

Hence the Republic filed that herein petition for review of the A aforestated decision
whereby the following issues were raised:
I.

WHETHER OR NOT THE ENACTMENT OF BATAS PAMBANSA

BLG. 340 IS THE PROPER GROUND FOR THE DISMISSAL OF
THE EXPROPRIATION CASE. (PROPERLY PUT, WHETHER OR
NOT THE LOWER COURT COMMITTED GRAVE ABUSE OF DIS

II.

III.

CRETION IN DISMISSING CIVIL CASE NO. 7001-P UPON

JUDICIAL NOTICE OF B.P. BLG. 340).
WHETHER OR NOT THE DPWH'S "CHOICE" OF LAND TO BE
EXPROPRIATED IS STILL AN ISSUE UNDER THE
CIRCUMSTANCES, SAID "CHOICE" HAVING BEEN SUPPLANTED
BY THE LEGISLATURE'S CHOICE.
WHETHER OR NOT THE LAW OF THE CASE THEORY SHOULD
4
BE APPLIED TO THE CASE AT BAR.

The petition is impressed with merit. There is no question that as early as 1977,
pursuant to the Revised Administrative Code, the national government, through the
Department of Public Works and Highways began work on what was to be the westward
extension of Epifanio de los Santos Avenue (EDSA) outfall (or outlet) of the Manila and
suburbs flood control and drainage project and the Estero Tripa de Gallina. These
projects were aimed at: (1) easing traffic congestion in the Baclaran and outlying areas;
(2) controlling flood by the construction of the outlet for the Estero Tripa de Gallina
(which drains the area of Marikina, Pasay, Manila and Paranaque); and (3) thus
completing the Manila Flood and Control and Drainage Project.
So the petitioner acquired the needed properties through negotiated purchase starting
with the lands from Taft Avenue up to Roxas Boulevard including the lands in Fernando
Rein-Del Pan streets. It acquired through negotiated purchases about 80 to 85 percent
of the lands involved in the project whose owners did not raise any objection as to
arbitrariness on the choice of the project and of the route. It is only with respect to the
remaining 10 to 15 percent along the route that the petitioner cannot negotiate through
a sales agreement with a few land owners, including de Knecht whose holding is hardly
5% of the whole route area. Thus, as above related on February 20, 1979 the petitioner
filed the expropriation proceedings in the Court of First Instance.
There is no question that in the decision of this Court dated October 30, 1980 in De
Knecht vs. Bautista, G.R. No. L-51078, this Court held that the "choice of the Fernando
Rein-Del Pan streets as the line through which the EDSA should be extended to Roxas
5
Boulevard is arbitrary and should not receive judicial approval." It is based on the
recommendation of the Human Settlements Commission that the choice of Cuneta
street as the line of the extension will minimize the social impact factor as the buildings
6
and improvement therein are mostly motels.
In view of the said finding, this Court set aside the order of the trial court dated June 14,
1979 authorizing the Republic of the Philippines to take possession of the properties
sought to be condemned and enjoined the respondent judge from taking any further
action in the case except to dismiss the same.
Said decision having become final no action was taken by the lower court on the said
directive of this Court to dismiss the case. Subsequently B.P. Blg. 340 was enacted by
the Batasang Pambansa on February 17, 1983. On the basis of said law petitioner filed a
motion to dismiss the case before the trial court and this was granted.

On appeal by de Knecht to the Court of Appeals the appellate court held that the
decision of the Supreme Court having become final, the petitioner's right as determined
therein should no longer be disturbed and that the same has become the law of the
case between the parties involved. Thus, the appellate court set aside the questioned
order of the trial court and issued another order dismissing the expropriation
proceedings before the lower court pursuant to the ruling in De Knecht case.
While it is true that said final judgment of this Court on the subject becomes the law of
the case between the parties, it is equally true that the right of the petitioner to take
private properties for public use upon the payment of the just compensation is so
7
provided in the Constitution and our laws. Such expropriation proceedings may be
undertaken by the petitioner not only by voluntary negotiation with the land owners
8
but also by taking appropriate court action or by legislation.
When on February 17, 1983 the Batasang Pambansa passed B.P. Blg. 340 expropriating
the very properties subject of the present proceedings, and for the same purpose, it
appears that it was based on supervening events that occurred after the decision of this
Court was rendered in De Knecht in 1980 justifying the expropriation through the
Fernando Rein-Del Pan Streets.
The social impact factor which persuaded the Court to consider this extension to be
arbitrary had disappeared. All residents in the area have been relocated and duly
compensated. Eighty percent of the EDSA outfall and 30% of the EDSA extension had
been completed. Only private respondent remains as the solitary obstacle to this project
that will solve not only the drainage and flood control problem but also minimize the
traffic bottleneck in the area.
The Solicitor General summarizing the situation said
The construction and completion of the Metro Manila Flood Control
and Drainage Project and the EDSA extension are essential to alleviate
the worsening traffic problem in the Baclaran and Pasay City areas and
the perennial flood problems. Judicial notice may be taken that these
problems bedevil life and property not only in the areas directly
affected but also in areas much beyond. Batas Pambansa Blg. 340 was
enacted to hasten 'The Project' and thus solve these problems, and its
implementation has resulted so far in an 80% completion of the EDSA
outfall and a 30% completion of the EDSA extension, all part of 'The
Project'.
This instant case stands in the way of the final solution of the abovementioned problems, solely because the single piece of property I
occupied' by De Knecht, although already expropriated under B.P. Blg.
340, is the only parcel of land where Government engineers could not
enter due to the 'armed' resistance offered by De Knecht, guarded and
surrounded as the lot is perennially by De Knecht's fierce private

security guards. It may thus be said that De Knecht, without any more
legal interest in the land, single-handedly stands in the way of the
completion of 'The Project' essential to the progress of Metro Manila
and surrounding areas. Without the property she persists in occupying
and without any bloodletting, the EDSA outfall construction
on both sides of the said property cannot be joined together, and the
flood waters of Pasay, Paraaque and Marikina which flow through
the Estero Tripa de Gallina will continue to have no way or outlet that
could drain into Manila Bay. Without said property, the EDSA
extension, already 30% completed, can in no way be finished, and
traffic will continue to clog and jam the intersections of EDSA and Taft
Avenue in Baclaran and pile up along the airport roads.
In sum, even in the face of BP340, De Knecht holds the Legislative
9
sovereign will and choice inutile.
The Court finds justification in proceeding with the said expropriation proceedings
through the Fernando Rein-Del Pan streets from ESDA to Roxas Boulevard due to the
aforestated supervening events after the rendition of the decision of this Court in De
Knecht.
B.P. Blg. 340 therefore effectively superseded the aforesaid final and executory decision
of this Court. And the trial court committed no grave abuse of discretion in dismissing
the case pending before it on the ground of the enactment of B.P. Blg. 340.
Moreover, the said decision, is no obstacle to the legislative arm of the Government in
thereafter (over two years later in this case) making its own independent assessment of
the circumstances then prevailing as to the propriety of undertaking the expropriation
of the properties in question and thereafter by enacting the corresponding legislation as
it did in this case. The Court agrees in the wisdom and necessity of enacting B.P. Blg.
340. Thus the anterior decision of this Court must yield to this subsequent legislative
flat.
WHEREFORE, the petition is hereby GRANTED and the questioned decision of the Court
of Appeals dated December 28, 1988 and its resolution dated March 9, 1989 are hereby
REVERSED and SET ASIDE and the order of Branch III of the then Court of First Instance
of Rizal in Pasay City in Civil Case No. 7001-P dated September 2, 1983 is hereby
reinstated without pronouncement as to costs.
SO ORDERED.
Narvasa, Grio-Aquino and Medialdea, JJ., concur.

EN BANC
[G.R. No. 107040. April 12, 2000]
PILO MILITANTE, petitioner, vs. HON. COURT OF APPEALS, Former Sixth Division,
NATIONAL HOUSING AUTHORITY, represented by its Project Manager, ANNABELLE D.
CARANGDANG, and the REPUBLIC OF THE PHILIPPINES, respondents.
DECISION
PUNO, J.: Court
Petitioner files this petition for review of the Decision and Resolution of the Court of
[1]
Appeals in CA-G.R. SP No. 25429 upholding the constitutionality of Presidential Decree
(P.D.) No. 1315.
Petitioner Pilo Militante is the registered owner of three (3) contiguous parcels of land
with an aggregate area of 1,590 square meters in Balintawak, Caloocan City. The three
parcels are covered by TCT Nos. 53066-A, 53067 and 53068, all derived from TCT No.
71357 issued by the Register of Deeds of Caloocan City. Twenty-four (24) squatter
families live in these lots.
[2]

In 1975, President Marcos issued Presidential Decree (P.D.) No. 1315 expropriating
forty (40) hectares of land in Bagong Barrio, Caloocan City, covered by TCT Nos. 70298,
and 73960, and portions of TCT Nos. 71357, 2017 and 2018. Section 1 of said P.D. reads:
"Section 1. The real properties covered by Transfer Certificate of Title
Nos. 70289, 73960 and a portion of 71357 identified as Lot Nos. 3593,
3594 and 3629 in the name of Maria B. Castro and Lot No. 3206 in the
name of Bonifacio Co as Tax Declaration No. 25395 with an aggregate
area of 403,799 square meters, more or less; Lot Nos. 3591 and 3592
containing a total area of 1440 square meters in the name of Abdon
Chan as per Tax Declaration Nos. 24853 and 24854 and Lot Nos. 3603,
3605 and 3607 containing a combined area of 1,590 square meters in
the name of Pio [sic] Militante as per Tax Declaration No. 24876 all of
which were previously covered by Transfer Certificate [of] Title No.
71357 and the adjacent real properties covered by Transfer
Certificates of Title No. 2017 and 2018 registered in the name Leonora
Carriedo containing an area of 141,133 square meters, more less and
all located at Bagong Barrio, Caloocan City, Metro Manila, having been
identified as a blighted area and included in the SIR
Program established under Letters of Instructions No. 555 and ZIP
Program as provided by Executive Order No. 6-77 dated 21 July 1977
of the Governor, Metropolitan Manila, are hereby declared
expropriated. The National Housing Authority hereinafter referred to
as the "Authority" is designated administrator for the national

government and is authorized to immediately take possession,

control and disposition of the expropriated properties with the
power of demolition of their improvements. Pursuant thereto, the
Authority with the government of Caloocan City and in consultation
with the Metro Manila Commission shall evolve and implement a
comprehensive
development
plan
for
the
condemned
properties." Jlexj
The land expropriated was identified in the decree as a slum area that required the
upgrading of basic facilities and services and the disposal of the lots to their bona fide
occupants in accordance with the national Slum Improvement and Resettlement (SIR)
[3]
Program and the Metro Manila Zonal Improvement Program (ZIP). It set aside P40
[4]
million as the maximum amount of just compensation to be paid the landowners.
The NHA, as the decrees designated administrator for the national government,
undertook the implementation of P.D. 1315 in seven (7) phases called the Bagong Barrio
Project (BBP). The properties covered by Phases 1 to 6 were acquired in 1978 and
1979. BBP Phase 7, which includes petitioners land, was not among those acquired
and paid for in 1978-1979.
On September 11, 1979, Proclamation No. 1893 declared the entire Metropolitan
Manila area as Urban Land Reform Zone. Proclamation No. 1893 was amended on
May 14, 1980 by Proclamation No. 1967 which identified 244 sites in Metropolitan
Manila as Areas for Priority Development and Urban Land Reform Zones.
Meanwhile, on June 2, 1978, P.D. No. 1396 created the Department of Human
[5]
Settlements (DHS) and placed the NHA under the supervision of said Department. On
February 7, 1981, Executive Order No. 648 transferred the regulatory functions of the
NHA to the Human Settlements Regulatory Commission (HSRC), a quasi-judicial body
[6]
attached to the DHS.
On September 24, 1981, petitioner wrote the HSRC seeking a declaration of noncoverage from the Urban Land Reform Program of the government. On October 2,
1981, HSRC Commissioner Raymundo R. Dizon, Jr. issued a certificate declaring
petitioners lots "outside the declared Urban Land Reform Zone." The certification reads
as follows: Lexjuris
"Mr. Pilo Melitante [sic]
110 G. de Jesus St.
Caloocan City
Re: Subject..................:

Certification

Land Description........:

Lot No. 3603, 3605, 3607 of the Cadastral Survey of

Caloocan Cadastral Case No. 34 GLRO Cadastral Record No.

1606
a. Tax Decl. No........:

52773

b. Location..................:

G. de Jesus St., Caloocan City

c. Title..........................:

53066, 53067, 53068

d. Owner......................:

Pilo Melitante [sic]

covered by TCT Nos. 53066, 53067 and 53068, subject of 1st Indorsement of City
Engineer Jose Uson.
Evaluation of the request shows the same to merit favorable
consideration. In view thereof, clearance is hereby given that Office to
dismantle and/or remove all the illegal structures from the abovecited properties within three (3) months upon receipt hereof,
pursuant to the provisions of LOIs 19 and 19-A, and its implementing
directives from the Office of the President.
A. Qualified for government resettlement assistance
to Sapang Palay Resettlement Project:

Dear Mr. Militante:

[list of names of the 24 occupants]
Anent your request dated 24 September 1981 concerning the abovementioned
subject property, please be informed that said parcel of land is located
outside the declared Urban Land Reform Zone (LURZ) [sic].

B. Disqualified from government resettlement

assistance

Very truly yours,

- NONE -

RAYMUNDO R. DIZON, JR.

[7]
Commissioner."
With this certificate, petitioner asked the NHA to relocate the squatters on his land.
Acting on the request, General Gaudencio Tobias, NHA General Manager, sent a letter
dated October 6, 1981 to Mayor Macario Asistio, Jr., of Caloocan City, to conduct a
[8]
census of the families occupying petitioners lots.
The NHA called the squatters for a dialogue "to look into the possibility of amicably
settling the eviction problem and/or to find out why a clearance should be issued or not
[9]
for the removal/ demolition of all the illegal structures in the said property." The
squatters did not attend the meeting. In view of their failure to attend, Joaquin Castano,
Acting Division Manager, Resettlement Division, NHA, wrote a memorandum to the
Department Manager, Resettlement Department, NHA, recommending the issuance of a
[10]
demolition clearance.
On January 21, 1982, NHA General Manager Tobias granted clearance to dismantle and
remove all illegal structures on petitioners property within three (3) months from
receipt of the order. Clearance was also granted for the relocation of the 24 families to
the Sapang Palay Resettlement Project. The clearance was addressed to Mayor Asistio
and reads as follows: Jurismis
"Sir: This has reference to the letter of Mr. Pilo Melitante[sic] which was received by
our Office on 24 September 1981 regarding his request for the relocation of the families
presently occupying his property situated at G. de Jesus Street, Balintawak, that City,

This clearance shall also cover all other structures on subject premises
whose owners refused to be interviewed and those who entered the
same after the conduct of census survey in 1981.
May we request that the affected families be served written notices
given them at least fifteen (15) days within which to vacate voluntarily
and/or prepare for their relocation, copies of which must be furnished
this Office.
To ensure the smooth conduct of relocation operation thereat, we
further request that you inform this Authority at least one (1) week
ahead of the scheduled date of implementation of this clearance so
we could send our representative to coordinate the same.
Very truly yours, G. V. TOBIAS
Maj. Gen., AFP (Ret)
[11]
General Manager."
The demolition did not take place. In a letter dated September 16, 1982, General
Tobias inquired from Mayor Asistio whether Caloocan City had plans of developing
petitioners properties in the Bagong Barrio Project. On December 13, 1982, Mayor
Asistio replied that "considering the said properties are private in character, the City has
no plans presently or in the immediate future to develop or underwrite the
[12]
development of said properties." Jjjuris

Four (4) years later, in 1986, BBP Phase 7 was listed as among the priority projects for
[13]
implementation under the governments Community Self-Help Program. The NHA,
through General Tobias, approved an emergency fund of P2 million for the acquisition of
petitioners lots. NHA started negotiations with petitioner. In 1987, petitioner, through
an authorized representative, made an initial offer of P200.00 per square meter. The
NHA made a counter-offer of P175.00 per square meter. Petitioner increased his price
to P1,000.00 and later toP3,000.00. NHA General Manager Raymundo R. Dizon, Jr.
informed petitioner that NHAs maximum offer was P500.00. This was rejected by
[14]
petitioner, through his lawyer, in a letter dated March 20, 1989.
On September 8, 1990, petitioner, through counsel, requested for a revalidation of his
[15]
demolition clearance and relocation of the squatters.
On January 15, 1991, NHA General Manager Monico Jacob revalidated the demolition
clearance and informed Mayor Asistio that the NHA was making available enough
serviced home lots in Bagong Silang Resettlement Project for the 24 families. The letter
of revalidation reads: justice
"Honorable Macario C. Asistio, Jr.
Mayor
Caloocan City
Re: Revalidation of Letter-Advice on the Relocation
and Resettlement of Twenty-four (24) Families from
G. de Jesus St., Balintawak, Caloocan City.
Dear Mayor Asistio,
This has reference to the twenty-four (24) squatter families from G. de
Jesus St., Balintawak, Caloocan City for relocation and resettlement by
your City pursuant to the authority vested by LOIs 19, 19-A and 691.
Finding the documents submitted by your City to NHA to be in order,
the provisions of the aforementioned LOIs and the implementing
directive from the Office of the President on squatter relocation and
resettlement may be enforced.
In accordance with the existing provisions of LOI 19 that indigent
families be given resettlement assistance, we are advising you that the
National Housing Authority is making available enough serviced
homelots in Bagong Silang Resettlement Project for twenty-four (24)
families qualified for resettlement assistance per attached approved
master list.

We are sending our NHA representatives to cause the accomplishment

and issuance of the necessary Entry Passes for the families going to
our resettlement project and to provide technical assistance and
monitor your relocation operation. Jksm
We trust that the established policies, procedures and guidelines on
squatter prevention and resettlement including the conduct of
information drive, inter-agency coordination and the issuance of
notices to affected families, would be strictly observed to ensure
peaceful, orderly and humane relocation operation.
Kindly be informed further that the effectivity of this letter advice is
valid only for three (3) months from receipt hereof, subject to
revalidation upon your recommendation if necessary.
Very truly yours,
MONICO V. JACOB
[16]
General Manager."
Respondent Annabelle Carangdang, NHA Project Manager in Bagong Barrio, refused to
implement the clearance to eject the squatters on petitioners land. At the conference
of February 13, 1991, Carangdang claimed that petitioners land had already been
declared expropriated by P.D. 1315.
Petitioner then filed with the respondent Court of Appeals a "Petition for Prohibition
and Mandamus with Declaration as Inexistent and Unconstitutional Presidential Decree
No. 1315" against the NHA and Carangdang.
In a decision dated April 24, 1992, the respondent Court of Appeals dismissed the
petition and held that petitioner failed to overcome the presumption of the decrees
[17]
constitutionality. Petitioners motion for reconsideration was also denied on August
[18]
31, 1992. Hence, this recourse where petitioner raises the following issues:
I.

II.

WHETHER OR NOT RESPONDENT ANNABELLE CARANGDANG

CAN BE COMPELLED TO EFFECT THE DIRECTIVE/
MEMORANDUM
OF
RELOCATION/
RESETTLEMENT
SUBJECTING THE SAID 24 SQUATTER FAMILIES FROM
UNLAWFULLY OCCUPYING PETITIONERS SUBJECT PROPERTY
WITHOUT DECLARING P.D. 1315 AS VOID AND
UNCONSTITUTIONAL; AND Es m
WHETHER OR NOT SAID P. D. 1315 AT LEAST UP TO THE
EXTENT OF PETITIONERS PROPERTIES ADVERSELY AFFECTED
CAN BE DECLARED NULL AND VOID FOR BEING
[19]
UNCONSTITUTIONAL."

We deny the petition.

such other is entitled, there being no other plain, speedy, and adequate remedy in the
[23]
ordinary course of law.

First. Petitioner is not entitled to the writ of prohibition. Section 2 of Rule 65 provides:
"Sec. 2. Petition for prohibition.When the proceedings of any tribunal,
corporation, board, or person, whether exercising functions judicial or
ministerial, are without or in excess of its jurisdiction, or with grave
abuse of discretion, and there is no appeal or any other plain, speedy
and adequate remedy in the ordinary course of law, a person
aggrieved thereby may file a verified petition in the proper court
alleging the facts with certainty and praying that judgment be
rendered commanding the defendant to desist from further
proceedings in the action or matter specified therein.
[20]

x x x."
[21]

Prohibition is a preventive remedy. It seeks for a judgment ordering the defendant to

desist from continuing with the commission of an act perceived to be illegal.
In the case at bar, petitioner does not pray that respondent Carangdang should be
ordered to desist from relocating the squatters. What petitioner challenges is
respondent Carangdangs refusal to implement the demolition clearance issued by her
administrative superiors. The remedy for a refusal to discharge a legal duty
is mandamus, not prohibition.
Second. The petitioner is not also entitled to a writ of mandamus. Section 3, Rule 65
provides:
"Sec. 3. Petition for mandamus.When any tribunal, corporation,
board, or person, unlawfully neglects the performance of an act
which the law specifically enjoins as a duty resulting from an office,
trust or station, or unlawfully excludes another from the use and
enjoyment of a right or office to which such other is entitled, and
there is no other plain, speedy, and adequate remedy in the ordinary
course of law, the person aggrieved thereby may file a verified
petition in the proper court alleging the facts with certainty and
praying that judgment be rendered commanding the defendant,
immediately or at some other specified time, to do the act required
to be done to protect the rights of petitioner, and to pay the damages
sustained by the petitioner by reason of the wrongful acts of the
[22]
defendant." Es msc
Mandamus is a writ commanding a tribunal, corporation, board, or person to do the act
required to be done when it or he unlawfully neglects the performance of an act which
the law specifically enjoins as a duty resulting from an office, trust or station, or
unlawfully excludes another from the use and enjoyment of a right or office to which

It is incumbent upon petitioner to show that he has a well-defined, clear and certain
[24]
right to warrant the grant of the writ of mandamus. He failed to discharge this
burden. The records show that there is no direct order from the NHA General Manager
addressed to respondent Carangdang to evict the squatters and demolish their
shanties on the subject property. The NHA demolition clearance issued by General
Tobias on January 21, 1982 was addressed to Mayor Asistio, the mayor of Caloocan City.
The clearances revalidation by NHA General Manager Monico Jacob was likewise
addressed to Mayor Asistio.
Furthermore, mandamus is an extraordinary remedy that may be availed of only when
there is no plain, speedy and adequate remedy in the ordinary course of law. A petition
for mandamusis premature if there are administrative remedies available to the
[25]
petitioner. If superior administrative officers could grant the relief prayed for, special
[26]
civil actions are generally not entertained. In the instant case, petitioner has not
exhausted his administrative remedies. He may seek another demolition order from the
NHA General Manager this time directly addressed to respondent Carangdang or the
[27]
pertinent NHA representative. In fact, the Government Corporate Counsel asserts
that petitioner should have brought Carangdangs inaction to the attention of her
superiors. There is therefore no extreme necessity to invoke judicial action as the
[28]
administrative set-up could have easily corrected the alleged failure to act. The
General Manager, as Chief Executive Officer of the NHA, has the power of supervision
[29]
over the operations and internal affairs of NHA. Esmm is
Third. Petitioners procedure in assailing the constitutionality of P.D. No. 1315 is flawed.
His principal concern is the relocation of the squatters on his land. If he could attain this
aim, petitioner himself admits in his Petition that "there may not be a need for declaring
[30]
P.D. No. 1315 null and void." Indeed, petitioner assails P.D. No. 1315, purely out of
pique against respondent Carangdang who refused to implement the demolition order
of her superior. To use petitioners own words, he has to attack the constitutionality of
P.D. No. 1315 "to x x x break respondent Carangdangs hypocrisy and pretension." We
hold that petitioner has no privilege to assail P.D. No. 1315 as unconstitutional to serve
a petty purpose.
Moreover, the facts reveal that petitioners land is not in clear danger of expropriation.
P.D. No. 1315 was issued way back in 1975. It covered 40 hectares of land in Bagong
Barrio, Caloocan City. Almost all of these 40 hectares had been expropriated as early as
1979 except the 1,590 sq. m. lot of petitioner. Considering this long lapse of time, it is
doubtful if the government would still desire to expropriate petitioners lot which only
measures 1,590 sq. m. Esmso
There is another reason why petitioners lot may no longer be expropriated by
government. The land sought to be expropriated under P.D. No. 1315 is defined as an
area "identified as a blighted area and included in the SIR Program" which means Slum

Improvement and Resettlement Program. On October 2, 1981, however, HSRC

Commissioner Dizon, Jr. certified that petitioners lot is "outside the declared Urban Land
Reform Zone." With this certification, there is reason to believe that taking petitioners
tiny lot of 1,590 sq. m. will serve no social purpose.
Finally, petitioner cannot blow hot and cold on the constitutionality of P.D. No.
1315. He did not question its constitutionality when it was decreed in 1975. In 1987, he
even negotiated with NHA for the price of his land. Implicitly but clearly, he recognized
the validity of the decree. The negotiation unfortunately fell and the government did
not take any further step to expropriate his land. It was only in 1991 after respondent
Carangdang refused to eject the squatters in petitioners land that petitioner, out of
pique, alleged that P.D. No. 1315 is constitutionally infirmed. A well recognized rule in
constitutional law is that estoppel may operate to prevent a party from asserting that an
[31]
act is unconstitutional.
There is also merit to the cautionary words of the Solicitor General that to allow
petitioners flip-flopping stance "might spawn legal and social ramifications which cannot
[32]
just be lightly ignored," since almost all of the 40 hectare land covered by P.D. No.
1315 had been expropriated and awarded to the poor people of our society without
their landowners challenging the validity of the decree. In his Concurring Opinion, our
esteemed colleague, Mr. Justice Mendoza, denigrates this warning and cites Alfonso v.
[33]
Pasay City as authority for the view that "if property is taken by the government
without the benefit of expropriation proceedings and is devoted to public use, such as a
road, after many years, the property owner may no longer bring an action for recovery
[34]
of his land, but may simply demand payment of just compensation for his land." A
careful reading of the Alfonso case, however, will show that this Court did not rule that
the only remedy of an aggrieved landowner in such a situation is to "simply demand
payment of just compensation." To be sure, this Court contemplated the remedy of
restoring possession to the aggrieved landowner. If it did not order the remedy, it was
only because it was no longer feasible as the lot involved had already been converted to
[35]
a road. The exact ruling states:
"As registered owner, he could bring an action to recover possession
at any time because possession is one of the attributes of ownership
of land. However, said restoration of possession by the City of Pasay
is neither convenient nor feasible because it is now and has been
used for road purposes. So, the only relief available is for the City of
Pasay to make due compensation, which it could and should have
done years ago since 1925."
In the case at bar, the landowners concerned may not opt for the right to be paid just
compensation. The process is not an easy one and may take years especially in light of
the budget difficulties of the government. We take judicial notice of the fact that the
current budget deficit of the government amounts to P8.9 billion.
IN VIEW WHEREOF, the petition is dismissed. No costs.

SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-12032

August 31, 1959

CITY OF BAGUIO, plaintiff-appelle,

vs.
THE NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, defendant-appellant.
City Attorney Sixto A. Domondom for appellee.
Office of the Solicitor General Ambrosio Padilla, First Assistant Government Corporate
Counsel Simeon Gopengco and Solicitor Troadio T. Quinzon, Jr. for appellant.
BAUTISTA ANGELO, J.:
Plaintiff, a municipal corporation, filed on April 25, 1956, in the Court of First Instance of
Baguio, a complaint for declaratory relief against defendant, a public corporation
created by Republic Act No. 1383, contending that said Act does not include within its
preview the Baguio Workshop System; that assuming that it does, said Act is
unconstitutional because it has the effect of depriving plaintiff of the ownership, control
and operation of said waterworks system without compensation and without due
process of law, and that it is oppressive, unreasonable and unjust to plaintiff and other
cities, municipalities and municipal districts similarly situated.
On My 22, 1956, defendant filed a motion to dismiss on the ground that Republic Act
No. 1383 is a proper exercise of the police power of the State; that assuming that said
Act contemplates an act of expropriation, it is still a constitutional exercise of the power
of eliminate domain; that at any rate the Baguio Waterworks System is not a private
property but "public works of public service" over which the Legislature has control; and
that the provision of the said Act being clear and unambiguous, there is no necessity for
construction.
On June 21, 1956, the Court, acting on the motion to dismiss as well as on the answer
and rejoinder filed by both parties, denied the motion and ordered defendant to file its
answer to the complaint. On July 6, 1956, defendant filed its answer reiterating and
amplifying the ground already advanced in this motion to dismiss, adding thereto that
the action for the declaratory relief is improper for the reason that the Baguio
waterworks System has already been transferred to defendant pursuant to Republic Act
No. 1383 or, if such has not been done, there has already been a breach of said Act.
On August 14, 1956, the parties submitted a written stipulation of the facts and filed
written memoranda. And after allowing plaintiff to file a suplementary complaint, the

Court on November 5, 1956, rendered decision the dispositive part of which reads: "This
Court, . . . holds that the workshop system of the City of Baguio falls filed within the
category of 'private property', as contemplated by our constitution and may not
expropriated without just compensation and that section 8 of republic act No. 1383
provides for the exchange of the NAWASA assets for the value of workshop system of
Baguio is unconstitutional as this is not 'just compensation,'" Defendant filed a motion
for reconsideration, and upon its denial. It took the present appeal.
The issues posed in this appeal are: (1) plaintiff's action for declatory relief is improper
because there has already been a breach by plaintiff of Republic Act No. 1383 (2)
Republic Act No. 1383 does not contemplates the exercise of the power of eliminate
domain but the exertion of the police power of the State; and (3) assuming arguendo
that Republic Act No. 1383 involves the exercise of the power of eminent domain the
same does not violate our Constitution.
Before we proceed with the discussion of this issues, there is need to state some facts
necessarily for their determination since the proper application of the principles of law
that may be pertinent would greatly depend upon them.
Plaintiff is a municipal corporation organized under its Charter with principal place of
business in the City of Baguio, while defendant is in the public corporation created by
Republic Act No. 1383 with provincial place of business in the City of manila. Under
section 2553 of its Charter, plaintiffs is maintaining the Baguio Waterworks System
under a certificates of public convenience, the same being financed by its own funds,
the Baguio general fund, and funds advanced by the national Government. The assets of
said system as of December 31, 1955 were reported to be P1,408.795.98. The system
supplies only the City of Baguio, its inhabitants, and transient visitors, and, as provided
for in accordance, it grants to the employees of the City one fifth (1/5) of cubic meter
free from every one peso of their total salary per annum as part of their compensation.
The employees of the national Government are not given this privilege but there is a
provision plaintiff Charter which says: "in consideration of the exemption from the
taxation to the extensive real state holdings of the national Government within the limit
of the City, of the expenses of the improvements which the Government of the said City
is required to make a reason for the location therein of the offenses of the national
Government, and of free services in connection of the said offices, there is created a
permanent and continuing appropriation from the funds in the national Treasury not
otherwise appropriated, equal to fifty per centum of the expenses of the Government of
the City exclusive of this accounts which appear as expenses by reason of interdepartment charges and charges against the national Government for services and
supplies."
The purposes for which defendants was created is expressed in section 1 of republic Act
No. 1383, which we quote:
Creation of the national Waterworks and Sewerage Authority;' its general
purposes; Zone and extends of the jurisdiction comprised by it; domicile and

place of business of the corporation. For purposes of consolidating and

centralizing all waterworks, sewerage and drainage systems in the Philippines
under one control, direction and general supervision, there is hereby created a
public corporation to be known as the National workshop and Sewerage
authority, which shall be organized within one month after the approval of this
Act.
The National Waterworks and Sewerage authority shall own and/or have
jurisdiction, supervision and control over all territory now embraced by the
Metropolitan Water Districts as well as all areas now served by existing
government-owned waterworks in the boundaries of cities, municipalities and
municipality districts in the Philippines including those served by the
waterworks and wells and drills sections of the national Waterworks and
Sewerage authority, any from time to time extends its territory by the
admission of or the inclusion of any municipal or municipal districts in the
Philippines.
The jurisdiction of the national waterworks and Sewerage Authority shall
extend to the construction, maintenance, operation and control of nonsupporting and/or non-revenue producing water systems and sanitary works,
whether undertaken at the expense of the Authority or through subsidy of the
national Government as provided in Section 10 of this act.
And to accomplish the above purpose, the following was provided in section 8 of the
same act:
Dissolution of the Metropolitan Water District; transfer to the Authority of its
records, assets and liabilities; transfer to the Authority of entities, waterworks
and sewerage systems in the cities, municipalities, municipal district and other
government waterworks and sewerage systems. The present Metropolitan
Water District created Under Act Number Two Thousand eight hundred thirtytwo, as amended, is hereby dissolved, and its records, assets and liabilities are
transferred to the authority. All existing government owned waterworks and
sewerage systems are transferred to the National waterworks and Sewerage
Authority, and in turn to pledge such assets as security for the payment of the
waterworks and sewerage bonded debt.
The net book value of the properties and assets of the Metropolitan Water
District and of government-owned waterworks and sewerage systems in cities,
municipalities, or municipal districts, and other government-owned
waterworks and sewerage systems shall be received by the Authority in
payment for an equal value of the assets of the National Waterworks and
sewerage Authority.
The references made to the Metropolitan Water District or to any existing
government-owned waterworks and sewerage system in any city, municipality

or municipal district and other waterworks and sewerage system under the
Bureau of Public Works, in any Act or Executive Order or Proclamation of the
President of the Philippines or in any city or municipal ordinance which is still in
force, shall be deemed to be a reference to the National Waterworks and
Sewerage Authority created by this Act.
On September 19, 1955, the President of the Philippines issued Executive Order No. 127
outlining the procedure for the transfer of government-owned waterworks and
sewerage systems in the provinces, cities and municipalities to defendant and provided
for a time limit for such transfer, which is "at the earliest time possible but not
exceeding 90 days from the date of said order."
And on March 15, 1956, defendant, implementing said Executive Order, issued Office
Memorandum No. 7 providing, among other things, the following:
(1) Pending the establishment of the Waterworks district offices of the
Authority, District and City Engineers, shall continue to be in charge of the
operation and maintenance of all existing waterworks systems, including the
repair and improvement thereof and the construction of new waterworks
projects in their respective districts in accordance with the Memorandum of
the Secretary of Public Works and Communications dated October 25, 1955,
quoted in the Memorandum of the Director of Public Works dated October 27,
1955. Likewise, they shall continue approving vouchers and payrolls for salaries
and essential services chargeable against waterworks funds heretofore,
provided that said expenses do not exceed the appropriations in the approved
budget for the preceeding fiscal year.
(2) Pending the establishment of the Waterworks district offices of the
Authority which shall ultimately include an auditing force, Provincial and City
auditors shall, as heretofore, audit the accounts of the different waterworks
systems in their respective jurisdictions in accordance with Provincial Auditor's
Memorandum No. 151 to Provincial and City Auditors dated December 7, 1955.
(3) Pending the establishment of the waterworks district offices of the
Authority, provincial, city and municipal treasurers shall continue to perform
the work of handling the collections and disbursements of funds of the
waterworks systems and artesian wells projects in their respective jurisdictions
in accordance with provincial circular of the Secretary of Finance to all
provincial and City Treasurers dated November 23, 1955.
(4) Provincial Waterworks Boards, provincial Boards, Municipal Boards, or City
councils of cities and municipal councils of Municipalities and municipal
districts ipso facto ceased to have control and supervision over waterworks
systems within their respective territorial jurisdictions upon the formal
organization of the National Waterworks and sewerage Authority in
accordance with the provisions of Republic Act No. 1383. All budgets and

plantillas of personnel of said waterworks personnel, including collectors who

were formerly directly under the Provincial, City or Municipal Treasurers,
whether permanent, temporary or emergency, shall be effective only after
their approval by the Board of directors of the Authority.
Let us now discussed the issues raised..
As regards the first issue, appellant contends that appellee's action for declaratory relief
is improper because there has already been a breach of the Republic Act No. 1383,
invoking section 2 of rule 66 which provides; "A contract or statue may be construed
before there has been a breach thereof."
This contention is untenable. To begin with, the answer filed by defendant through its
counsel the Solicitor General contains a express admission of the avernment in
appellee's complaint that "although Republic Act No. 1383 took effect upon its approval
on June 18, 1955, and notwithstanding Executive Order No. 127 of the President, there
has been no breach of said law because no actual physical turn-over of the Baguio
Waterworks System has so far been made." Because of such admission, it has always
been assumed in the trial court that the present action is proper because there has not
been such breach so much so that appellant desisted from raising the point in the rest
of the proceedings in the trial court and in the long memorandum it has submitted, for
which reason the trial court made in its decision the following comment: In its
memorandum, however, the NAWASA has failed to argue this point. the omission is
significant and this Court takes that in any objection to the declaratory relief
proceedings are waived." That appellant would now take an inconsistent stand is
strange in any event, we find that such is the situation obtaining here. Republic Act No.
1383 provides that government-owned waterworks system should be transferred to
appellant at the earliest time possible, and unless by administrative action this provision
is actually carried out, it cannot be said that the transfer has been effected. The most
that appellant did to carry out such provision is to issue its Office memorandum No. 7
which prescribes the preparatory steps for such transfer pending the establishment of
the branch office of the NAWASA that would take over the waterworks concerned, but
before any definite step could be taken to comply with said directive the present action
was instituted. We agree with the trial court that so far there has not been a breach of
the law and that the other requisites necessary for an action for declaratory relief are
present.
The contention that the Republic Act No. 1383 constitutes a valid exercise of police
power rather than a directive to expropriate the waterworks of the appellee by the
exercise of the power of eminent domain cannot also be entertained. This is far from
the intent and purpose of the law. The act does not confiscate, nor destroy, nor
appropriate property belonging to the appellee. It merely directs that all waterworks
belonging to cities, municipalities, and municipal districts in the Philippines be
transferred to the NAWASA for the purpose of placing them under the control and
supervision of one agency with a view to promoting their efficient management, but in
so doing it does not confiscate them because it directs that they be paid with an equal

value of the assets of the NAWASA. This is clearly inferred from the context of the law
(section 8, Rep. Act No. 1383).
But appellant invites our attention to some authorities purporting to show the Republic
Act No. 1383 could at least be considered as a legitimate exercise of police power such
that Congress may in the exercise of such power enact a law transferring Government
property from one agency to another, and laying stress one said authorities it contends
that although Congress cannot deprive the citizens of a municipal corporation of the use
of property held in trust for their benefit it may however change the trustee with or
without its consent or compensation provided the citizens are not deprived of its
enjoyment. In other words, appellant invokes the principle that the transfer of property
and authority by an act of Congress from one class of public officer to another where
the property continues devoted to its original purpose does not impair any vested right
of the city owning the property.
But the authorities cited are not in point. They in substance point out that the transfer,
if any, of the property of municipal corporation from one agency to another is merely
done for purposes of administration, its ownership and benefits being retained by the
corporation. Such is not the clear intent of Republic Act No. 1383. Here, as we have
already shown, its purpose is to effect a real transfer of the ownership of the
waterworks to the new agency and does not merely encompass a transfer of
administration. At any rate, the authorities cited do not bear out the proposition of
appellant as clearly pointed out by counsel for appellee in his brief.
But it is insisted that the waterworks system of Baguio City does not have the character
of patrimonial property but comes under the phrase "public works for public service"
mentioned in Article 424 of the New Civil Code and as such is subjected to the control of
Congress. This contention is also untenable. The Baguio Waterworks System is not like
any public road, park, street or any other public property held in trust by a municipal
corporation held for the benefit of the public but it is rather a property owned by
appellee in its proprietary character. While the cases may differ as to the public or
private character of waterworks, the weight of authority as far as the legislature is
concerned classes them as private affairs. (sec. 239, Vol. I, Revised, McQuillin Municipal
Corporation, p. 239; Shrik vs. City of Lancaster, 313 Pa. 158, 169 Atl. 557). And in this
jurisdiction, this court has already expressed the view that the waterworks system is
patrimonial property of the city that has established it.(Mendoza vs. De Leon, 33 Phil.
509). And being owned by the municipal corporation in a proprietary character,
waterworks cannot be taken away without observing the safeguards set by our
Constitution for the protection of private property.
While the judicial opinions on this subject are more or less uncertain in
expression, and court judgment apparently conflicting, perhaps it is correct to
affirm that a majority of decision recognize the private rights of the municipal
corporation, and hence support the view that all its property of a distinctly
private character is fully protected by the constitutional provisions protecting
private property of the individual or the private corporation. Accordingly the

right of state as to the private property of municipal corporation is a right of

regulation to be exercised in harmony with the general policy of the state, and
though broader than exists in the case of individuals, or private corporations, is
not a right of appropriation.
xxx

xxx

xxx

The decision maintain that the property held by a municipal corporation units
private capacity is not subject to the unrestricted control of the legislature, and
the municipality cannot be deprived of such property against its will, except by
the exercise of eminent domain with payment of full compensation. (McQuillin
Municipal Corporation, 2nd Ed., Vol. I, pp. 670-681).
In its private capacity a municipal corporation is wholly different. The people of
a compact community usually require certain conveniences which cannot be
furnished without a franchise from the State and which are either unnecessary
in the rural districts, such as a system of sewers, or parks and open spaces, or
which on account of the expenses it would be financially impossible to supply
except where the population is reasonably dense, such as water or gas. But in
so far as the municipality is thus authorized to exercise the functions of a
private corporation, it is clothed with the capacities of a private corporation
and may claim its rights and immunities, even as against the sovereign, and is
subject to the liabilities of such a corporation, even as against third parties. (19
R.C. L. p. 698)
The attempt of appellant in having waterworks considered as public property subject to
the control of Congress or one which can be regulated by the exercise of police power
having failed, that question that now arises is: Does Republic Act No. 1383 provide for
the automatic expropriation of the waterworks in question in the light of our
Constitution? In other words, does said law comply with the requirements of section 6,
Article XIII, in relation to section 1(2), Article III, of our Constitution?
Section 6, Article XIII of our Constitution provides:
SEC. 6. The State may, in the interest of National Welfare and defense,
establish and operate industries and means of transportation and
communication, and, upon payment of just compensation, transfer to public
ownership utilities and other private enterprises to be operated by the
Government.
Section 1 (2), Article III, of our Constitution provides:
(2) Private property shall not be taken for public use without just
compensation.

It is clear that the State may, in the interest of National welfare, transfer to public
ownership any private enterprise upon payment of just compensation. At the same
time, one has to bear in mind that no person can be deprived of his property except for
public use and upon payment of just compensation. There is an attempt to observe this
requirement in Republic Act No. 1383 when in providing for the transfer of appellee's
waterworks system to a national agency it was directed that the transfer be made upon
payment of an equivalent value of the property. Has this been implemented? Has
appellant actually transferred to appellee any asset of the NAWASA that may be
considered just compensation for the property expropriated? There is nothing in the
record to show that such was done. Neither is there anything to this effect in Office
Memorandum No. 7 issued by the NAWASA in implementation of the provision of the
Republic Act No. 1383. The law speaks of assets of the NAWASA by they are not
specified. While the Act empowers the NAWASA to contract indebtedness and issue
bonds subject to the approval of the Secretary of Finance when necessary for the
transaction of its business (sec. 2, par. (L), sec. 5, Act No. 1383), no such action has been
taken to comply with appellant's commitment in so far as payment of compensation of
appellee is concerned. As to when such action should be taken no one knows. And
unless this aspect of the law is clarified and appellee is given its due compensation,
appellee cannot be deprived of its property even if appellant desires to take over its
administration in line with the spirit of the law. We are therefore persuaded to conclude
that the law, insofar as it expropriates the waterworks in question without providing for
an effective payment of just compensation, violates our Constitution. In this respect, the
decision of the trial court is correct.
Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.
Paras, C. J., Bengzon, Padilla, Montemayor, Endencia, and Barrera, JJ., concur.
Conception, J., concurs in the result.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-24440

March 28, 1968

THE PROVINCE OF ZAMBOANGA DEL NORTE, plaintiff-appellee,

vs.
CITY OF ZAMBOANGA, SECRETARY OF FINANCE and COMMISSIONER OF INTERNAL
REVENUE,defendants-appellants.
Fortugaleza, Lood, Sarmiento, M. T. Yap & Associates for plaintiff-appellee.
Office of the Solicitor General for defendants-appellants.
BENGZON, J.P., J.:
Prior to its incorporation as a chartered city, the Municipality of Zamboanga used
to be the provincial capital of the then Zamboanga Province. On October 12, 1936,
Commonwealth Act 39 was approved converting the Municipality of Zamboanga into
Zamboanga City. Sec. 50 of the Act also provided that
Buildings and properties which the province shall abandon upon the
transfer of the capital to another place will be acquired and paid for by the City
of Zamboanga at a price to be fixed by the Auditor General.
The properties and buildings referred to consisted of 50 lots and some buildings
constructed thereon, located in the City of Zamboanga and covered individually by
Torrens certificates of title in the name of Zamboanga Province. As far as can be gleaned
1
from the records, said properties were being utilized as follows
No. of Lots Use
1

................................................ Capitol Site

................................................ School Site

................................................ Hospital Site

................................................ Leprosarium

................................................ Curuan School

................................................ Trade School

................................................ Burleigh School

................................................ High School Playground

................................................ Burleighs

................................................ Hydro-Electric Site (Magay)

................................................ San Roque

23

................................................ vacant

It appears that in 1945, the capital of Zamboanga Province was transferred to

2
Dipolog. Subsequently, or on June 16, 1948, Republic Act 286 was approved creating
the municipality of Molave and making it the capital of Zamboanga Province.
On May 26, 1949, the Appraisal Committee formed by the Auditor General,
pursuant to Commonwealth Act 39, fixed the value of the properties and buildings in
3
question left by Zamboanga Province in Zamboanga City at P1,294,244.00.
On June 6, 1952, Republic Act 711 was approved dividing the province of
Zamboanga into two (2): Zamboanga del Norte and Zamboanga del Sur. As to how the
assets and obligations of the old province were to be divided between the two new
ones, Sec. 6 of that law provided:
Upon the approval of this Act, the funds, assets and other properties and
the obligations of the province of Zamboanga shall be divided equitably
between the Province of Zamboanga del Norte and the Province of Zamboanga
del Sur by the President of the Philippines, upon the recommendation of the
Auditor General.
Pursuant thereto, the Auditor General, on January 11, 1955, apportioned the
assets and obligations of the defunct Province of Zamboanga as follows: 54.39% for
Zamboanga del Norte and 45.61% for Zamboanga del Sur. Zamboanga del Norte
therefore became entitled to 54.39% of P1,294,244.00, the total value of the lots and
buildings in question, or P704,220.05 payable by Zamboanga City.
On March 17, 1959, the Executive Secretary, by order of the President, issued a
4
ruling holding that Zamboanga del Norte had a vested right as owner (should be coowner pro-indiviso) of the properties mentioned in Sec. 50 of Commonwealth Act 39,
and is entitled to the price thereof, payable by Zamboanga City. This ruling revoked the
previous Cabinet Resolution of July 13, 1951 conveying all the said 50 lots and buildings
thereon to Zamboanga City for P1.00, effective as of 1945, when the provincial capital of
the then Zamboanga Province was transferred to Dipolog.
The Secretary of Finance then authorized the Commissioner of Internal Revenue to
deduct an amount equal to 25% of the regular internal revenue allotment for the City of
Zamboanga for the quarter ending March 31, 1960, then for the quarter ending June 30,
1960, and again for the first quarter of the fiscal year 1960-1961. The deductions, all
aggregating P57,373.46, was credited to the province of Zamboanga del Norte, in partial
payment of the P764,220.05 due it.
However, on June 17, 1961, Republic Act 3039 was approved amending Sec. 50 of
Commonwealth Act 39 by providing that

All buildings, properties and assets belonging to the former province of

Zamboanga and located within the City of Zamboanga are hereby transferred,
free of charge, in favor of the said City of Zamboanga. (Stressed for emphasis).
Consequently, the Secretary of Finance, on July 12, 1961, ordered the
Commissioner of Internal Revenue to stop from effecting further payments to
Zamboanga del Norte and to return to Zamboanga City the sum of P57,373.46 taken
from it out of the internal revenue allotment of Zamboanga del Norte. Zamboanga City
admits that since the enactment of Republic Act 3039, P43,030.11 of the P57,373.46 has
already been returned to it.
This constrained plaintiff-appellee Zamboanga del Norte to file on March 5, 1962,
a complaint entitled "Declaratory Relief with Preliminary Mandatory Injunction" in the
Court of First Instance of Zamboanga del Norte against defendants-appellants
Zamboanga City, the Secretary of Finance and the Commissioner of Internal Revenue. It
was prayed that: (a) Republic Act 3039 be declared unconstitutional for depriving
plaintiff province of property without due process and just compensation; (b) Plaintiff's
rights and obligations under said law be declared; (c) The Secretary of Finance and the
Internal Revenue Commissioner be enjoined from reimbursing the sum of P57,373.46 to
defendant City; and (d) The latter be ordered to continue paying the balance of
P704,220.05 in quarterly installments of 25% of its internal revenue allotments.
On June 4, 1962, the lower court ordered the issuance of preliminary injunction as
prayed for. After defendants filed their respective answers, trial was held. On August 12,
1963, judgment was rendered, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered declaring Republic Act No.
3039 unconstitutional insofar as it deprives plaintiff Zamboanga del Norte of its
private properties, consisting of 50 parcels of land and the improvements
thereon under certificates of title (Exhibits "A" to "A-49") in the name of the
defunct province of Zamboanga; ordering defendant City of Zamboanga to pay
to the plaintiff the sum of P704,220.05 payment thereof to be deducted from
its regular quarterly internal revenue allotment equivalent to 25% thereof
every quarter until said amount shall have been fully paid; ordering defendant
Secretary of Finance to direct defendant Commissioner of Internal Revenue to
deduct 25% from the regular quarterly internal revenue allotment for
defendant City of Zamboanga and to remit the same to plaintiff Zamboanga del
Norte until said sum of P704,220.05 shall have been fully paid; ordering
plaintiff Zamboanga del Norte to execute through its proper officials the
corresponding public instrument deeding to defendant City of Zamboanga the
50 parcels of land and the improvements thereon under the certificates of title
(Exhibits "A" to "A-49") upon payment by the latter of the aforesaid sum of
P704,220.05 in full; dismissing the counterclaim of defendant City of
Zamboanga; and declaring permanent the preliminary mandatory injunction
issued on June 8, 1962, pursuant to the order of the Court dated June 4, 1962.
No costs are assessed against the defendants.

It is SO ORDERED.
Subsequently, but prior to the perfection of defendants' appeal, plaintiff province
filed a motion to reconsider praying that Zamboanga City be ordered instead to pay the
P704,220.05 in lump sum with 6% interest per annum. Over defendants' opposition, the
lower court granted plaintiff province's motion.
The defendants then brought the case before Us on appeal.
Brushing aside the procedural point concerning the property of declaratory relief
filed in the lower court on the assertion that the law had already been violated and that
plaintiff sought to give it coercive effect, since assuming the same to be true, the Rules
5
anyway authorize the conversion of the proceedings to an ordinary action, We proceed
to the more important and principal question of the validity of Republic Act 3039.
The validity of the law ultimately depends on the nature of the 50 lots and
buildings thereon in question. For, the matter involved here is the extent of legislative
control over the properties of a municipal corporation, of which a province is one. The
principle itself is simple: If the property is owned by the municipality (meaning
municipal corporation) in its public and governmental capacity, the property is public
and Congress has absolute control over it. But if the property is owned in its private or
proprietary capacity, then it is patrimonial and Congress has no absolute control. The
municipality cannot be deprived of it without due process and payment of just
6
compensation.
The capacity in which the property is held is, however, dependent on the use to
which it is intended and devoted. Now, which of two norms, i.e., that of the Civil Code
or that obtaining under the law of Municipal Corporations, must be used in classifying
the properties in question?
The Civil Code classification is embodied in its Arts. 423 and 424 which
provide:1wph1.t
ART. 423. The property of provinces, cities, and municipalities is divided
into property for public use and patrimonial property.
ART. 424. Property for public use, in the provinces, cities, and
municipalities, consists of the provincial roads, city streets, municipal streets,
the squares, fountains, public waters, promenades, and public works for public
service paid for by said provinces, cities, or municipalities.
All other property possessed by any of them is patrimonial and shall be
governed by this Code, without prejudice to the provisions of special laws.
(Stressed for emphasis).

Applying the above cited norm, all the properties in question, except the two (2)
lots used as High School playgrounds, could be considered as patrimonial properties of
the former Zamboanga province. Even the capital site, the hospital and leprosarium
sites, and the school sites will be considered patrimonial for they are not for public use.
They would fall under the phrase "public works for public service" for it has been held
that under theejusdem generis rule, such public works must be for free and
indiscriminate use by anyone, just like the preceding enumerated properties in the first
7
paragraph of Art 424. The playgrounds, however, would fit into this category.

Number
2200

...................................... 4-B

...................................... Capitol Site

2816

...................................... 149

...................................... School Site

3281

...................................... 1224

...................................... Hospital Site

3282

...................................... 1226

...................................... Hospital Site

3283

...................................... 1225

...................................... Hospital Site

3748

......................................

5406

...................................... 171

...................................... School Site

5564

...................................... 168

......................................

5567

......................................

5583

...................................... 167

On the other hand, applying the norm obtaining under the principles constituting
the law of Municipal Corporations, all those of the 50 properties in question which are
devoted to public service are deemed public; the rest remain patrimonial. Under this
norm, to be considered public, it is enough that the property be held and, devoted for
10
governmental purposes like local administration, public education, public health, etc.

6181

...................................... (O.C.T.) ......................................

11942

...................................... 926

...................................... Leprosarium

11943

...................................... 927

...................................... Leprosarium

11944

...................................... 925

...................................... Leprosarium

Supporting jurisprudence are found in the following cases: (1) HINUNANGAN V.

11
DIRECTOR OF LANDS, where it was stated that "... where the municipality has occupied
lands distinctly for public purposes, such as for the municipal court house, the public
school, the public market, or other necessary municipal building, we will, in the absence
of proof to the contrary, presume a grant from the States in favor of the municipality;
but, as indicated by the wording, that rule may be invoked only as to property which is
used distinctly for public purposes...." (2) VIUDA DE TANTOCO V. MUNICIPAL COUNCIL
12
OF ILOILO held that municipal properties necessary for governmental purposes are
public in nature. Thus, the auto trucks used by the municipality for street sprinkling, the
police patrol automobile, police stations and concrete structures with the corresponding
lots used as markets were declared exempt from execution and attachment since they
13
were not patrimonial properties. (3) MUNICIPALITY OF BATANGAS VS. CANTOS held
squarely that a municipal lot which had always been devoted to school purposes is one
dedicated to public use and is not patrimonial property of a municipality.

5557

...................................... 170

......................................

Burleigh
School

5562

...................................... 180

......................................

Burleigh
School

5565

...................................... 172-B

...................................... Burleigh

5570

...................................... 171-A

...................................... Burleigh

5571

...................................... 172-C

...................................... Burleigh

5572

...................................... 174

...................................... Burleigh

5573

...................................... 178

...................................... Burleigh

5585

...................................... 171-B

...................................... Burleigh

5586

...................................... 173

...................................... Burleigh

5587

...................................... 172-A

...................................... Burleigh

This was the norm applied by the lower court. And it cannot be said that its
actuation was without jurisprudential precedent for in Municipality of Catbalogan v.
8
9
Director of Lands, and in Municipality of Tacloban v. Director of Lands, it was held that
the capitol site and the school sites in municipalities constitute their patrimonial
properties. This result is understandable because, unlike in the classification regarding
State properties, properties for public service in the municipalities are not classified as
public. Assuming then the Civil Code classification to be the chosen norm, the lower
court must be affirmed except with regard to the two (2) lots used as playgrounds.

Following this classification, Republic Act 3039 is valid insofar as it affects the lots
used as capitol site, school sites and its grounds, hospital and leprosarium sites and the
high school playground sites a total of 24 lots since these were held by the former
Zamboanga province in its governmental capacity and therefore are subject to the
absolute control of Congress. Said lots considered as public property are the following:
TCT

Lot Number

Use

434-A...................................... School Site

1
High School
Play-ground

157 &
...................................... Trade School
158
......................................

High School
Play-ground
Curuan
School

We noticed that the eight Burleigh lots above described are adjoining each other
and in turn are between the two lots wherein the Burleigh schools are built, as per
records appearing herein and in the Bureau of Lands. Hence, there is sufficient basis for
holding that said eight lots constitute the appurtenant grounds of the Burleigh schools,
and partake of the nature of the same.

Regarding the several buildings existing on the lots above-mentioned, the records
do not disclose whether they were constructed at the expense of the former Province of
Zamboanga. Considering however the fact that said buildings must have been erected
even before 1936 when Commonwealth Act 39 was enacted and the further fact that
provinces then had no power to authorize construction of buildings such as those in the
14
case at bar at their own expense, it can be assumed that said buildings were erected
by the National Government, using national funds. Hence, Congress could very well
dispose of said buildings in the same manner that it did with the lots in question.
But even assuming that provincial funds were used, still the buildings constitute
mere accessories to the lands, which are public in nature, and so, they follow the nature
of said lands, i.e., public. Moreover, said buildings, though located in the city, will not be
for the exclusive use and benefit of city residents for they could be availed of also by the
provincial residents. The province then and its successors-in-interest are not really
deprived of the benefits thereof.
But Republic Act 3039 cannot be applied to deprive Zamboanga del Norte of its
share in the value of the rest of the 26 remaining lots which are patrimonial properties
since they are not being utilized for distinctly, governmental purposes. Said lots are:
TCT Number

Lot Number

5577 ...................................... 177

Use

...................................... Mydro, Magay

13198 ...................................... 127-0 ...................................... San Roque

5569 ...................................... 169

...................................... Burleigh

5558 ...................................... 175

...................................... Vacant

5559 ...................................... 188

...................................... "

5560 ...................................... 183

...................................... "

5561 ...................................... 186

...................................... "

5563 ...................................... 191

...................................... "

5566 ...................................... 176

...................................... "

5568 ...................................... 179

...................................... "

5574 ...................................... 196

...................................... "

5575 ...................................... 181-A ...................................... "

5576 ...................................... 181-B ...................................... "
5578 ...................................... 182

...................................... "

5579 ...................................... 197

...................................... "

5580 ...................................... 195

...................................... "

5581 ...................................... 159-B ...................................... "

5582 ...................................... 194

...................................... "

5584 ...................................... 190

...................................... "

5588 ...................................... 184

...................................... "

15

5589 ...................................... 187

...................................... "

5590 ...................................... 189

...................................... "

5591 ...................................... 192

...................................... "

5592 ...................................... 193

...................................... "

5593 ...................................... 185

...................................... "

7379 ...................................... 4147 ...................................... "

Moreover, the fact that these 26 lots are registered strengthens the proposition
that they are truly private in nature. On the other hand, that the 24 lots used for
governmental purposes are also registered is of no significance since registration cannot
16
convert public property to private.
We are more inclined to uphold this latter view. The controversy here is more
along the domains of the Law of Municipal Corporations State vs. Province than
along that of Civil Law. Moreover, this Court is not inclined to hold that municipal
property held and devoted to public service is in the same category as ordinary private
property. The consequences are dire. As ordinary private properties, they can be levied
upon and attached. They can even be acquired thru adverse possession all these to
the detriment of the local community. Lastly, the classification of properties other than
those for public use in the municipalities as patrimonial under Art. 424 of the Civil Code
is "... without prejudice to the provisions of special laws." For purpose of this article,
the principles, obtaining under the Law of Municipal Corporations can be considered as
"special laws". Hence, the classification of municipal property devoted for distinctly
governmental purposes as public should prevail over the Civil Code classification in this
particular case.
Defendants' claim that plaintiff and its predecessor-in-interest are "guilty of laches
is without merit. Under Commonwealth Act 39, Sec. 50, the cause of action in favor of
the defunct Zamboanga Province arose only in 1949 after the Auditor General fixed the
value of the properties in question. While in 1951, the Cabinet resolved transfer said
properties practically for free to Zamboanga City, a reconsideration thereof was
seasonably sought. In 1952, the old province was dissolved. As successor-in-interest to
more than half of the properties involved, Zamboanga del Norte was able to get a
reconsideration of the Cabinet Resolution in 1959. In fact, partial payments were
effected subsequently and it was only after the passage of Republic Act 3039 in 1961
that the present controversy arose. Plaintiff brought suit in 1962. All the foregoing,
negative laches.
It results then that Zamboanga del Norte is still entitled to collect from the City of
Zamboanga the former's 54.39% share in the 26 properties which are patrimonial in
nature, said share to computed on the basis of the valuation of said 26 properties as
contained in Resolution No. 7, dated March 26, 1949, of the Appraisal Committee
formed by the Auditor General.

Plaintiff's share, however, cannot be paid in lump sum, except as to the

P43,030.11 already returned to defendant City. The return of said amount to defendant
was without legal basis. Republic Act 3039 took effect only on June 17, 1961 after a
partial payment of P57,373.46 had already been made. Since the law did not provide for
retroactivity, it could not have validly affected a completed act. Hence, the amount of
P43,030.11 should be immediately returned by defendant City to plaintiff province. The
remaining balance, if any, in the amount of plaintiff's 54.39% share in the 26 lots should
then be paid by defendant City in the same manner originally adopted by the Secretary
of Finance and the Commissioner of Internal Revenue, and not in lump sum. Plaintiff's
prayer, particularly pars. 5 and 6, read together with pars. 10 and 11 of the first cause of
17
action recited in the complaint clearly shows that the relief sought was merely the
continuance of the quarterly payments from the internal revenue allotments of
defendant City. Art. 1169 of the Civil Code on reciprocal obligations invoked by plaintiff
to justify lump sum payment is inapplicable since there has been so far in legal
contemplation no complete delivery of the lots in question. The titles to the registered
lots are not yet in the name of defendant Zamboanga City.
WHEREFORE, the decision appealed from is hereby set aside and another
judgment is hereby entered as follows:.
(1) Defendant Zamboanga City is hereby ordered to return to plaintiff Zamboanga
del Norte in lump sum the amount of P43,030.11 which the former took back from the
latter out of the sum of P57,373.46 previously paid to the latter; and
(2) Defendants are hereby ordered to effect payments in favor of plaintiff of
whatever balance remains of plaintiff's 54.39% share in the 26 patrimonial properties,
after deducting therefrom the sum of P57,373.46, on the basis of Resolution No. 7 dated
March 26, 1949 of the Appraisal Committee formed by the Auditor General, by way of
quarterly payments from the allotments of defendant City, in the manner originally
adopted by the Secretary of Finance and the Commissioner of Internal Revenue. No
costs. So ordered.
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and
Fernando,
JJ.,
concur.
Concepcion, C.J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-10405

December 29, 1960

WENCESLAO PASCUAL, in his official capacity as Provincial Governor of

Rizal, petitioner-appellant,
vs.
THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, ET AL., respondentsappellees.
Asst. Fiscal Noli M. Cortes and Jose P. Santos for appellant.
Office of the Asst. Solicitor General Jose G. Bautista and Solicitor A. A. Torres for
appellee.
CONCEPCION, J.:
Appeal, by petitioner Wenceslao Pascual, from a decision of the Court of First Instance
of Rizal, dismissing the above entitled case and dissolving the writ of preliminary
injunction therein issued, without costs.
On August 31, 1954, petitioner Wenceslao Pascual, as Provincial Governor of Rizal,
instituted this action for declaratory relief, with injunction, upon the ground that
Republic Act No. 920, entitled "An Act Appropriating Funds for Public Works", approved
on June 20, 1953, contained, in section 1-C (a) thereof, an item (43[h]) of P85,000.00
"for the construction, reconstruction, repair, extension and improvement" of Pasig
feeder road terminals (Gen. Roxas Gen. Araneta Gen. Lucban Gen. Capinpin
Gen. Segundo Gen. Delgado Gen. Malvar Gen. Lim)"; that, at the time of the
passage and approval of said Act, the aforementioned feeder roads were "nothing but
projected and planned subdivision roads, not yet constructed, . . . within the Antonio
Subdivision . . . situated at . . . Pasig, Rizal" (according to the tracings attached to the
petition as Annexes A and B, near Shaw Boulevard, not far away from the intersection
between the latter and Highway 54), which projected feeder roads "do not connect any
government property or any important premises to the main highway"; that the
aforementioned Antonio Subdivision (as well as the lands on which said feeder roads
were to be construed) were private properties of respondent Jose C. Zulueta, who, at
the time of the passage and approval of said Act, was a member of the Senate of the
Philippines; that on May, 1953, respondent Zulueta, addressed a letter to the Municipal
Council of Pasig, Rizal, offering to donate said projected feeder roads to the municipality
of Pasig, Rizal; that, on June 13, 1953, the offer was accepted by the council, subject to
the condition "that the donor would submit a plan of the said roads and agree to change
the names of two of them"; that no deed of donation in favor of the municipality of
Pasig was, however, executed; that on July 10, 1953, respondent Zulueta wrote another

letter to said council, calling attention to the approval of Republic Act. No. 920, and the
sum of P85,000.00 appropriated therein for the construction of the projected feeder
roads in question; that the municipal council of Pasig endorsed said letter of respondent
Zulueta to the District Engineer of Rizal, who, up to the present "has not made any
endorsement thereon" that inasmuch as the projected feeder roads in question were
private property at the time of the passage and approval of Republic Act No. 920, the
appropriation of P85,000.00 therein made, for the construction, reconstruction, repair,
extension and improvement of said projected feeder roads, was illegal and, therefore,
void ab initio"; that said appropriation of P85,000.00 was made by Congress because its
members were made to believe that the projected feeder roads in question were
"public roads and not private streets of a private subdivision"'; that, "in order to give a
semblance of legality, when there is absolutely none, to the aforementioned
appropriation", respondents Zulueta executed on December 12, 1953, while he was a
member of the Senate of the Philippines, an alleged deed of donation copy of which
is annexed to the petition of the four (4) parcels of land constituting said projected
feeder roads, in favor of the Government of the Republic of the Philippines; that said
alleged deed of donation was, on the same date, accepted by the then Executive
Secretary; that being subject to an onerous condition, said donation partook of the
nature of a contract; that, such, said donation violated the provision of our fundamental
law prohibiting members of Congress from being directly or indirectly financially
interested in any contract with the Government, and, hence, is unconstitutional, as well
as null and void ab initio, for the construction of the projected feeder roads in question
with public funds would greatly enhance or increase the value of the aforementioned
subdivision of respondent Zulueta, "aside from relieving him from the burden of
constructing his subdivision streets or roads at his own expense"; that the construction
of said projected feeder roads was then being undertaken by the Bureau of Public
Highways; and that, unless restrained by the court, the respondents would continue to
execute, comply with, follow and implement the aforementioned illegal provision of
law, "to the irreparable damage, detriment and prejudice not only to the petitioner but
to the Filipino nation."
Petitioner prayed, therefore, that the contested item of Republic Act No. 920 be
declared null and void; that the alleged deed of donation of the feeder roads in question
be "declared unconstitutional and, therefor, illegal"; that a writ of injunction be issued
enjoining the Secretary of Public Works and Communications, the Director of the Bureau
of Public Works and Highways and Jose C. Zulueta from ordering or allowing the
continuance of the above-mentioned feeder roads project, and from making and
securing any new and further releases on the aforementioned item of Republic Act No.
920, and the disbursing officers of the Department of Public Works and Highways from
making any further payments out of said funds provided for in Republic Act No. 920; and
that pending final hearing on the merits, a writ of preliminary injunction be issued
enjoining the aforementioned parties respondent from making and securing any new
and further releases on the aforesaid item of Republic Act No. 920 and from making any
further payments out of said illegally appropriated funds.

Respondents moved to dismiss the petition upon the ground that petitioner had "no
legal capacity to sue", and that the petition did "not state a cause of action". In support
to this motion, respondent Zulueta alleged that the Provincial Fiscal of Rizal, not its
provincial governor, should represent the Province of Rizal, pursuant to section 1683 of
the Revised Administrative Code; that said respondent is " not aware of any law which
makes illegal the appropriation of public funds for the improvements of . . . private
property"; and that, the constitutional provision invoked by petitioner is inapplicable to
the donation in question, the same being a pure act of liberality, not a contract. The
other respondents, in turn, maintained that petitioner could not assail the appropriation
in question because "there is no actual bona fide case . . . in which the validity of
Republic Act No. 920 is necessarily involved" and petitioner "has not shown that he has
a personal and substantial interest" in said Act "and that its enforcement has caused or
will cause him a direct injury."
Acting upon said motions to dismiss, the lower court rendered the aforementioned
decision, dated October 29, 1953, holding that, since public interest is involved in this
case, the Provincial Governor of Rizal and the provincial fiscal thereof who represents
him therein, "have the requisite personalities" to question the constitutionality of the
disputed item of Republic Act No. 920; that "the legislature is without power
appropriate public revenues for anything but a public purpose", that the instructions
and improvement of the feeder roads in question, if such roads where private property,
would not be a public purpose; that, being subject to the following condition:
The within donation is hereby made upon the condition that the Government of
the Republic of the Philippines will use the parcels of land hereby donated for
street purposes only and for no other purposes whatsoever; it being expressly
understood that should the Government of the Republic of the Philippines
violate the condition hereby imposed upon it, the title to the land hereby
donated shall, upon such violation, ipso facto revert to the DONOR, JOSE C.
ZULUETA. (Emphasis supplied.)
which is onerous, the donation in question is a contract; that said donation or contract is
"absolutely forbidden by the Constitution" and consequently "illegal", for Article 1409 of
the Civil Code of the Philippines, declares in existence and void from the very beginning
contracts "whose cause, objector purpose is contrary to law, morals . . . or public
policy"; that the legality of said donation may not be contested, however, by petitioner
herein, because his "interest are not directly affected" thereby; and that, accordingly,
the appropriation in question "should be upheld" and the case dismissed.
At the outset, it should be noted that we are concerned with a decision granting the
aforementioned motions to dismiss, which as much, are deemed to have admitted
hypothetically the allegations of fact made in the petition of appellant herein. According
to said petition, respondent Zulueta is the owner of several parcels of residential land
situated in Pasig, Rizal, and known as the Antonio Subdivision, certain portions of which
had been reserved for the projected feeder roads aforementioned, which, admittedly,
were private property of said respondent when Republic Act No. 920, appropriating

P85,000.00 for the "construction, reconstruction, repair, extension and improvement"

of said roads, was passed by Congress, as well as when it was approved by the President
on June 20, 1953. The petition further alleges that the construction of said roads, to be
undertaken with the aforementioned appropriation of P85,000.00, would have the
effect of relieving respondent Zulueta of the burden of constructing his subdivision
1
streets or roads at his own expenses, and would "greatly enhance or increase the value
of the subdivision" of said respondent. The lower court held that under these
circumstances, the appropriation in question was "clearly for a private, not a public
purpose."
Respondents do not deny the accuracy of this conclusion, which is self2
evident. However, respondent Zulueta contended, in his motion to dismiss that:
A law passed by Congress and approved by the President can never be illegal
because Congress is the source of all laws . . . Aside from the fact that movant
is not aware of any law which makes illegal the appropriation of public funds
for the improvement of what we, in the meantime, may assume as private
property . . . (Record on Appeal, p. 33.)
The first proposition must be rejected most emphatically, it being inconsistent with the
nature of the Government established under the Constitution of the Republic of the
Philippines and the system of checks and balances underlying our political structure.
Moreover, it is refuted by the decisions of this Court invalidating legislative enactments
3
deemed violative of the Constitution or organic laws.
As regards the legal feasibility of appropriating public funds for a public purpose, the
principle according to Ruling Case Law, is this:
It is a general rule that the legislature is without power to appropriate public
revenue for anything but a public purpose. . . . It is the essential character of the
direct object of the expenditure which must determine its validity as justifying
a tax, and not the magnitude of the interest to be affected nor the degree to
which the general advantage of the community, and thus the public welfare,
may be ultimately benefited by their promotion. Incidental to the public or to
the state, which results from the promotion of private interest and the
prosperity of private enterprises or business, does not justify their aid by the
use public money. (25 R.L.C. pp. 398-400; Emphasis supplied.)
The rule is set forth in Corpus Juris Secundum in the following language:
In accordance with the rule that the taxing power must be exercised for public
purposes only, discussedsupra sec. 14, money raised by taxation can be
expended only for public purposes and not for the advantage of private
individuals. (85 C.J.S. pp. 645-646; emphasis supplied.)
Explaining the reason underlying said rule, Corpus Juris Secundum states:

Generally, under the express or implied provisions of the constitution, public

funds may be used only for public purpose. The right of the legislature to
appropriate funds is correlative with its right to tax, and, under constitutional
provisions against taxation except for public purposes and prohibiting the
collection of a tax for one purpose and the devotion thereof to another
purpose, no appropriation of state funds can be made for other than for a
public purpose.
xxx

xxx

xxx

The test of the constitutionality of a statute requiring the use of public funds is
whether the statute is designed to promote the public interest, as opposed to
the furtherance of the advantage of individuals, although each advantage to
individuals might incidentally serve the public. (81 C.J.S. pp. 1147; emphasis
supplied.)
Needless to say, this Court is fully in accord with the foregoing views which, apart from
being patently sound, are a necessary corollary to our democratic system of
government, which, as such, exists primarily for the promotion of the general welfare.
Besides, reflecting as they do, the established jurisprudence in the United States, after
whose constitutional system ours has been patterned, said views and jurisprudence are,
likewise, part and parcel of our own constitutional law.lawphil.net
This notwithstanding, the lower court felt constrained to uphold the appropriation in
question, upon the ground that petitioner may not contest the legality of the donation
above referred to because the same does not affect him directly. This conclusion is,
presumably, based upon the following premises, namely: (1) that, if valid, said donation
cured the constitutional infirmity of the aforementioned appropriation; (2) that the
latter may not be annulled without a previous declaration of unconstitutionality of the
said donation; and (3) that the rule set forth in Article 1421 of the Civil Code is absolute,
and admits of no exception. We do not agree with these premises.
The validity of a statute depends upon the powers of Congress at the time of its passage
or approval, not upon events occurring, or acts performed, subsequently thereto, unless
the latter consists of an amendment of the organic law, removing, with retrospective
operation, the constitutional limitation infringed by said statute. Referring to the
P85,000.00 appropriation for the projected feeder roads in question, the legality thereof
depended upon whether said roads were public or private property when the bill,
which, latter on, became Republic Act 920, was passed by Congress, or, when said bill
was approved by the President and the disbursement of said sum became effective, or
on June 20, 1953 (see section 13 of said Act). Inasmuch as the land on which the
projected feeder roads were to be constructed belonged then to respondent Zulueta,
the result is that said appropriation sought a private purpose, and hence, was null and
void. 4 The donation to the Government, over five (5) months after the approval and
effectivity of said Act, made, according to the petition, for the purpose of giving a
"semblance of legality", or legalizing, the appropriation in question, did not cure its

aforementioned basic defect. Consequently, a judicial nullification of said donation need

not precede the declaration of unconstitutionality of said appropriation.
Again, Article 1421 of our Civil Code, like many other statutory enactments, is subject to
exceptions. For instance, the creditors of a party to an illegal contract may, under the
conditions set forth in Article 1177 of said Code, exercise the rights and actions of the
latter, except only those which are inherent in his person, including therefore, his right
to the annulment of said contract, even though such creditors are not affected by the
same, except indirectly, in the manner indicated in said legal provision.
Again, it is well-stated that the validity of a statute may be contested only by one who
will sustain a direct injury in consequence of its enforcement. Yet, there are many
decisions nullifying, at the instance of taxpayers, laws providing for the disbursement of
5
public funds, upon the theory that "the expenditure of public funds by an officer of the
State for the purpose of administering an unconstitutional act constitutes
a misapplication of such funds," which may be enjoined at the request of a
6
7
taxpayer. Although there are some decisions to the contrary, the prevailing view in the
United States is stated in the American Jurisprudence as follows:
In the determination of the degree of interest essential to give the requisite
standing to attack the constitutionality of a statute, the general rule is that not
only persons individually affected, but alsotaxpayers, have sufficient interest in
preventing the illegal expenditure of moneys raised by taxation and may
therefore question the constitutionality of statutes requiring expenditure of
public moneys. (11 Am. Jur. 761; emphasis supplied.)
However, this view was not favored by the Supreme Court of the U.S. in Frothingham vs.
Mellon (262 U.S. 447), insofar as federal laws are concerned, upon the ground that the
relationship of a taxpayer of the U.S. to its Federal Government is different from that of
a taxpayer of a municipal corporation to its government. Indeed, under
the composite system of government existing in the U.S., the states of the Union are
integral part of the Federation from an international viewpoint, but, each state enjoys
internally a substantial measure of sovereignty, subject to the limitations imposed by
the Federal Constitution. In fact, the same was made by representatives ofeach state of
the Union, not of the people of the U.S., except insofar as the former represented the
people of the respective States, and the people of each State has, independently of that
of the others, ratified said Constitution. In other words, the Federal Constitution and the
Federal statutes have become binding upon the people of the U.S. in consequence of an
act of, and, in this sense, through the respective states of the Union of which they are
citizens. The peculiar nature of the relation between said people and the Federal
Government of the U.S. is reflected in the election of its President, who is chosen
directly, not by the people of the U.S., but by electors chosen by each State, in such
manner as the legislature thereof may direct (Article II, section 2, of the Federal
Constitution).lawphi1.net

The relation between the people of the Philippines and its taxpayers, on the other hand,
and the Republic of the Philippines, on the other, is not identical to that obtaining
between the people and taxpayers of the U.S. and its Federal Government. It is closer,
from a domestic viewpoint, to that existing between the people and taxpayers of each
state and the government thereof, except that the authority of the Republic of the
Philippines over the people of the Philippines is more fully direct than that of the states
of the Union, insofar as the simple and unitarytype of our national government is not
subject to limitations analogous to those imposed by the Federal Constitution upon the
states of the Union, and those imposed upon the Federal Government in the interest of
the Union. For this reason, the rule recognizing the right of taxpayers to assail the
constitutionality of a legislation appropriating local or state public funds which has
been upheld by the Federal Supreme Court (Crampton vs.Zabriskie, 101 U.S. 601) has
greater application in the Philippines than that adopted with respect to acts of Congress
of the United States appropriating federal funds.
Indeed, in the Province of Tayabas vs. Perez (56 Phil., 257), involving the expropriation
of a land by the Province of Tayabas, two (2) taxpayers thereof were allowed to
intervene for the purpose of contesting the price being paid to the owner thereof, as
unduly exorbitant. It is true that in Custodio vs. President of the Senate (42 Off. Gaz.,
1243), a taxpayer and employee of the Government was not permitted to question the
constitutionality of an appropriation for backpay of members of Congress. However, in
Rodriguez vs. Treasurer of the Philippines and Barredo vs. Commission on Elections (84
Phil., 368; 45 Off. Gaz., 4411), we entertained the action of taxpayers impugning the
validity of certain appropriations of public funds, and invalidated the same. Moreover,
the reason that impelled this Court to take such position in said two (2) cases the
importance of the issues therein raised is present in the case at bar. Again, like the
petitioners in the Rodriguez and Barredo cases, petitioner herein is not merely a
taxpayer. The Province of Rizal, which he represents officially as its Provincial Governor,
8
is our most populated political subdivision, and, the taxpayers therein bear a
substantial portion of the burden of taxation, in the Philippines.
Hence, it is our considered opinion that the circumstances surrounding this case
sufficiently justify petitioners action in contesting the appropriation and donation in
question; that this action should not have been dismissed by the lower court; and that
the writ of preliminary injunction should have been maintained.
Wherefore, the decision appealed from is hereby reversed, and the records are
remanded to the lower court for further proceedings not inconsistent with this decision,
with the costs of this instance against respondent Jose C. Zulueta. It is so ordered.
Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Gutierrez
David, Paredes, and Dizon, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-4817

May 26, 1954

SILVESTER M. PUNSALAN, ET AL., plaintiffs-appellants,

vs.
THE MUNICIPAL BOARD OF THE CITY OF MANILA, ET AL., defendants-appellants.
Calanog and Alafriz for plaintiffs-appellants.
City Fiscal Eugenio Angeles and Assistant Fiscal Eulogio S. Serreno for defendantsappellants.
REYES, J.:
This suit was commenced in the Court of First Instance of Manila by two lawyers, a
medical practitioner, a public accountant, a dental surgeon and a pharmacist,
purportedly "in their own behalf and in behalf of other professionals practising in the
City of Manila who may desire to join it." Object of the suit is the annulment of
Ordinance No. 3398 of the City of Manila together with the provision of the Manila
charter authorizing it and the refund of taxes collected under the ordinance but paid
under protest.
The ordinance in question, which was approved by the municipal board of the City of
Manila on July 25, 1950, imposes a municipal occupation tax on persons exercising
various professions in the city and penalizes non-payment of the tax "by a fine of not
more than two hundred pesos or by imprisonment of not more than six months, or by
both such fine and imprisonment in the discretion of the court." Among the professions
taxed were those to which plaintiffs belong. The ordinance was enacted pursuant to
paragraph (1) of section 18 of the Revised Charter of the City of Manila (as amended by
Republic Act No. 409), which empowers the Municipal Board of said city to impose a
municipal occupation tax, not to exceed P50 per annum, on persons engaged in the
various professions above referred to.
Having already paid their occupation tax under section 201 of the National Internal
Revenue Code, plaintiffs, upon being required to pay the additional tax prescribed in the
ordinance, paid the same under protest and then brought the present suit for the
purpose already stated. The lower court upheld the validity of the provision of law
authorizing the enactment of the ordinance but declared the ordinance itself illegal and
void on the ground that the penalty there in provided for non-payment of the tax was
not legally authorized. From this decision both parties appealed to this Court, and the
only question they have presented for our determination is whether this ruling is correct

or not, for though the decision is silent on the refund of taxes paid plaintiffs make no
assignment of error on this point.
To begin with defendants' appeal, we find that the lower court was in error in saying
that the imposition of the penalty provided for in the ordinance was without the
authority of law. The last paragraph (kk) of the very section that authorizes the
enactment of this tax ordinance (section 18 of the Manila Charter) in express terms also
empowers the Municipal Board "to fix penalties for the violation of ordinances which
shall not exceed to(sic) two hundred pesos fine or six months" imprisonment, or both
such fine and imprisonment, for a single offense."Hence, the pronouncement below that
the ordinance in question is illegal and void because it imposes a penalty not authorized
by law is clearly without basis.
As to plaintiffs' appeal, the contention in substance is that this ordinance and the law
authorizing it constitute class legislation, are unjust and oppressive, and authorize what
amounts to double taxation.
In raising the hue and cry of "class legislation", the burden of plaintiffs' complaint is not
that the professions to which they respectively belong have been singled out for the
imposition of this municipal occupation tax; and in any event, the Legislature may, in its
discretion, select what occupations shall be taxed, and in the exercise of that discretion
it may tax all, or it may select for taxation certain classes and leave the others untaxed.
(Cooley on Taxation, Vol. 4, 4th ed., pp. 3393-3395.) Plaintiffs' complaint is that while
the law has authorized the City of Manila to impose the said tax, it has withheld that
authority from other chartered cities, not to mention municipalities. We do not think it
is for the courts to judge what particular cities or municipalities should be empowered
to impose occupation taxes in addition to those imposed by the National Government.
That matter is peculiarly within the domain of the political departments and the courts
would do well not to encroach upon it. Moreover, as the seat of the National
Government and with a population and volume of trade many times that of any other
Philippine city or municipality, Manila, no doubt, offers a more lucrative field for the
practice of the professions, so that it is but fair that the professionals in Manila be made
to pay a higher occupation tax than their brethren in the provinces.
Plaintiffs brand the ordinance unjust and oppressive because they say that it creates
discrimination within a class in that while professionals with offices in Manila have to
pay the tax, outsiders who have no offices in the city but practice their profession
therein are not subject to the tax. Plaintiffs make a distinction that is not found in the
ordinance. The ordinance imposes the tax upon every person "exercising" or "pursuing"
in the City of Manila naturally any one of the occupations named, but does not say
that such person must have his office in Manila. What constitutes exercise or pursuit of
a profession in the city is a matter of judicial determination. The argument against
double taxation may not be invoked where one tax is imposed by the state and the
other is imposed by the city (1 Cooley on Taxation, 4th ed., p. 492), it being widely
recognized that there is nothing inherently obnoxious in the requirement that license

fees or taxes be exacted with respect to the same occupation, calling or activity by both
the state and the political subdivisions thereof. (51 Am. Jur., 341.)
In view of the foregoing, the judgment appealed from is reversed in so far as it declares
Ordinance No. 3398 of the City of Manila illegal and void and affirmed in so far as it
holds the validity of the provision of the Manila charter authorizing it. With costs against
plaintiffs-appellants.
Pablo, Bengzon, Montemayor, Jugo, Bautista Angelo, Labrador, and Concepcion, JJ.,
concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-19201

June 16, 1965

REV. FR. CASIMIRO LLADOC, petitioner,

vs.
The COMMISSIONER OF INTERNAL REVENUE and The COURT of TAX
APPEALS, respondents.
Hilado and Hilado for petitioner.
Office of the Solicitor General for respondents.
PAREDES, J.:
Sometime in 1957, the M.B. Estate, Inc., of Bacolod City, donated P10,000.00 in cash to
Rev. Fr. Crispin Ruiz, then parish priest of Victorias, Negros Occidental, and predecessor
of herein petitioner, for the construction of a new Catholic Church in the locality. The
total amount was actually spent for the purpose intended.
On March 3, 1958, the donor M.B. Estate, Inc., filed the donor's gift tax return. Under
date of April 29, 1960, the respondent Commissioner of Internal Revenue issued an
assessment for donee's gift tax against the Catholic Parish of Victorias, Negros
Occidental, of which petitioner was the priest. The tax amounted to P1,370.00 including
surcharges, interests of 1% monthly from May 15, 1958 to June 15, 1960, and the
compromise for the late filing of the return.
Petitioner lodged a protest to the assessment and requested the withdrawal thereof.
The protest and the motion for reconsideration presented to the Commissioner of
Internal Revenue were denied. The petitioner appealed to the Court of Tax Appeals on
November 2, 1960. In the petition for review, the Rev. Fr. Casimiro Lladoc claimed,
among others, that at the time of the donation, he was not the parish priest in Victorias;
that there is no legal entity or juridical person known as the "Catholic Parish Priest of
Victorias," and, therefore, he should not be liable for the donee's gift tax. It was also
asserted that the assessment of the gift tax, even against the Roman Catholic Church,
would not be valid, for such would be a clear violation of the provisions of the
Constitution.
After hearing, the CTA rendered judgment, the pertinent portions of which are quoted
below:

... . Parish priests of the Roman Catholic Church under canon laws are similarly
situated as its Archbishops and Bishops with respect to the properties of the
church within their parish. They are the guardians, superintendents or
administrators of these properties, with the right of succession and may sue
and be sued.
xxx

xxx

xxx

The petitioner impugns the, fairness of the assessment with the argument that
he should not be held liable for gift taxes on donation which he did not receive
personally since he was not yet the parish priest of Victorias in the year 1957
when said donation was given. It is intimated that if someone has to pay at all,
it should be petitioner's predecessor, the Rev. Fr. Crispin Ruiz, who received the
donation in behalf of the Catholic parish of Victorias or the Roman Catholic
Church. Following petitioner's line of thinking, we should be equally unfair to
hold that the assessment now in question should have been addressed to, and
collected from, the Rev. Fr. Crispin Ruiz to be paid from income derived from
his present parish where ever it may be. It does not seem right to indirectly
burden the present parishioners of Rev. Fr. Ruiz for donee's gift tax on a
donation to which they were not benefited.
xxx

xxx

xxx

We saw no legal basis then as we see none now, to include within the
Constitutional exemption, taxes which partake of the nature of an excise upon
the use made of the properties or upon the exercise of the privilege of
receiving the properties. (Phipps vs. Commissioner of Internal Revenue, 91 F
[2d] 627; 1938, 302 U.S. 742.)
It is a cardinal rule in taxation that exemptions from payment thereof are highly
disfavored by law, and the party claiming exemption must justify his claim by
a clear, positive, or express grant of such privilege by law. (Collector vs. Manila
Jockey Club, G.R. No. L-8755, March 23, 1956; 53 O.G. 3762.)
The phrase "exempt from taxation" as employed in Section 22(3), Article VI of
the Constitution of the Philippines, should not be interpreted to mean
exemption from all kinds of taxes. Statutes exempting charitable and religious
property from taxation should be construed fairly though strictly and in such
manner as to give effect to the main intent of the lawmakers. (Roman Catholic
Church vs. Hastrings 5 Phil. 701.)
xxx

xxx

xxx

WHEREFORE, in view of the foregoing considerations, the decision of the

respondent Commissioner of Internal Revenue appealed from, is hereby
affirmed except with regard to the imposition of the compromise penalty in the

amount of P20.00 (Collector of Internal Revenue v. U.S.T., G.R. No. L-11274,

Nov. 28, 1958); ..., and the petitioner, the Rev. Fr. Casimiro Lladoc is hereby
ordered to pay to the respondent the amount of P900.00 as donee's gift tax,
plus the surcharge of five per centum (5%) as ad valorem penalty under Section
119 (c) of the Tax Code, and one per centum (1%) monthly interest from May
15, 1958 to the date of actual payment. The surcharge of 25% provided in
Section 120 for failure to file a return may not be imposed as the failure to file
a return was not due to willful neglect.( ... ) No costs.
The above judgment is now before us on appeal, petitioner assigning two (2) errors
allegedly committed by the Tax Court, all of which converge on the singular issue of
whether or not petitioner should be liable for the assessed donee's gift tax on the
P10,000.00 donated for the construction of the Victorias Parish Church.
Section 22 (3), Art. VI of the Constitution of the Philippines, exempts from taxation
cemeteries, churches and parsonages or convents, appurtenant thereto, and
all lands, buildings, and improvements used exclusively for religious purposes. The
exemption is only from the payment of taxes assessed on such properties enumerated,
as property taxes, as contra distinguished from excise taxes. In the present case, what
the Collector assessed was a donee's gift tax; the assessment was not on the properties
themselves. It did not rest upon general ownership; it was an excise upon the use made
of the properties, upon the exercise of the privilege of receiving the properties (Phipps
vs. Com. of Int. Rec. 91 F 2d 627). Manifestly, gift tax is not within the exempting
provisions of the section just mentioned. A gift tax is not a property tax, but an excise
tax imposed on the transfer of property by way of gift inter vivos, the imposition of
which on property used exclusively for religious purposes, does not constitute an
impairment of the Constitution. As well observed by the learned respondent Court, the
phrase "exempt from taxation," as employed in the Constitution (supra) should not be
interpreted to mean exemption from all kinds of taxes. And there being no clear,
positive or express grant of such privilege by law, in favor of petitioner, the exemption
herein must be denied.
The next issue which readily presents itself, in view of petitioner's thesis, and Our
finding that a tax liability exists, is, who should be called upon to pay the gift tax?
Petitioner postulates that he should not be liable, because at the time of the donation
he was not the priest of Victorias. We note the merit of the above claim, and in order to
put things in their proper light, this Court, in its Resolution of March 15, 1965, ordered
the parties to show cause why the Head of the Diocese to which the parish of Victorias
pertains, should not be substituted in lieu of petitioner Rev. Fr. Casimiro Lladoc it
appearing that the Head of such Diocese is the real party in interest. The Solicitor
General, in representation of the Commissioner of Internal Revenue, interposed no
objection to such a substitution. Counsel for the petitioner did not also offer objection
thereto.
On April 30, 1965, in a resolution, We ordered the Head of the Diocese to present
whatever legal issues and/or defenses he might wish to raise, to which resolution

counsel for petitioner, who also appeared as counsel for the Head of the Diocese, the
Roman Catholic Bishop of Bacolod, manifested that it was submitting itself to the
jurisdiction and orders of this Court and that it was presenting, by reference, the brief of
petitioner Rev. Fr. Casimiro Lladoc as its own and for all purposes.
In view here of and considering that as heretofore stated, the assessment at bar had
been properly made and the imposition of the tax is not a violation of the constitutional
provision exempting churches, parsonages or convents, etc. (Art VI, sec. 22 [3],
Constitution), the Head of the Diocese, to which the parish Victorias Pertains, is liable
for the payment thereof.
The decision appealed from should be, as it is hereby affirmed insofar as tax liability is
concerned; it is modified, in the sense that petitioner herein is not personally liable for
the said gift tax, and that the Head of the Diocese, herein substitute petitioner, should
pay, as he is presently ordered to pay, the said gift tax, without special, pronouncement
as to costs.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal,
Bengzon,
J.P.,
and
Zaldivar,
JJ.,
concur.
Barrera, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-39086 June 15, 1988
ABRA VALLEY COLLEGE, INC., represented by PEDRO V. BORGONIA, petitioner,
vs.
HON. JUAN P. AQUINO, Judge, Court of First Instance, Abra; ARMIN M. CARIAGA,
Provincial Treasurer, Abra; GASPAR V. BOSQUE, Municipal Treasurer, Bangued, Abra;
HEIRS OF PATERNO MILLARE,respondents.
PARAS, J.:
This is a petition for review on certiorari of the decision * of the defunct Court of First
Instance of Abra, Branch I, dated June 14, 1974, rendered in Civil Case No. 656, entitled
"Abra Valley Junior College, Inc., represented by Pedro V. Borgonia, plaintiff vs. Armin
M. Cariaga as Provincial Treasurer of Abra, Gaspar V. Bosque as Municipal Treasurer of
Bangued, Abra and Paterno Millare, defendants," the decretal portion of which reads:
IN VIEW OF ALL THE FOREGOING, the Court hereby declares:
That the distraint seizure and sale by the Municipal Treasurer of
Bangued, Abra, the Provincial Treasurer of said province against the
lot and building of the Abra Valley Junior College, Inc., represented by
Director Pedro Borgonia located at Bangued, Abra, is valid;
That since the school is not exempt from paying taxes, it should
therefore pay all back taxes in the amount of P5,140.31 and back taxes
and penalties from the promulgation of this decision;
That the amount deposited by the plaintaff him the sum of P60,000.00
before the trial, be confiscated to apply for the payment of the back
taxes and for the redemption of the property in question, if the
amount is less than P6,000.00, the remainder must be returned to the
Director of Pedro Borgonia, who represents the plaintiff herein;
That the deposit of the Municipal Treasurer in the amount of
P6,000.00 also before the trial must be returned to said Municipal
Treasurer of Bangued, Abra;
And finally the case is hereby ordered dismissed with costs against the
plaintiff.

SO ORDERED. (Rollo, pp. 22-23)

Petitioner, an educational corporation and institution of higher learning duly
incorporated with the Securities and Exchange Commission in 1948, filed a complaint
(Annex "1" of Answer by the respondents Heirs of Paterno Millare; Rollo, pp. 95-97) on
July 10, 1972 in the court a quo to annul and declare void the "Notice of Seizure' and the
"Notice of Sale" of its lot and building located at Bangued, Abra, for non-payment of real
estate taxes and penalties amounting to P5,140.31. Said "Notice of Seizure" of the
college lot and building covered by Original Certificate of Title No. Q-83 duly registered
in the name of petitioner, plaintiff below, on July 6, 1972, by respondents Municipal
Treasurer and Provincial Treasurer, defendants below, was issued for the satisfaction of
the said taxes thereon. The "Notice of Sale" was caused to be served upon the
petitioner by the respondent treasurers on July 8, 1972 for the sale at public auction of
said college lot and building, which sale was held on the same date. Dr. Paterno Millare,
then Municipal Mayor of Bangued, Abra, offered the highest bid of P6,000.00 which was
duly accepted. The certificate of sale was correspondingly issued to him.
On August 10, 1972, the respondent Paterno Millare (now deceased) filed through
counstel a motion to dismiss the complaint.
On August 23, 1972, the respondent Provincial Treasurer and Municipal Treasurer,
through then Provincial Fiscal Loreto C. Roldan, filed their answer (Annex "2" of Answer
by the respondents Heirs of Patemo Millare; Rollo, pp. 98-100) to the complaint. This
was followed by an amended answer (Annex "3," ibid, Rollo, pp. 101-103) on August 31,
1972.
On September 1, 1972 the respondent Paterno Millare filed his answer (Annex "5," ibid;
Rollo, pp. 106-108).
On October 12, 1972, with the aforesaid sale of the school premises at public auction,
the respondent Judge, Hon. Juan P. Aquino of the Court of First Instance of Abra, Branch
I, ordered (Annex "6," ibid; Rollo, pp. 109-110) the respondents provincial and municipal
treasurers to deliver to the Clerk of Court the proceeds of the auction sale. Hence, on
December 14, 1972, petitioner, through Director Borgonia, deposited with the trial
court the sum of P6,000.00 evidenced by PNB Check No. 904369.
On April 12, 1973, the parties entered into a stipulation of facts adopted and embodied
by the trial court in its questioned decision. Said Stipulations reads:
STIPULATION OF FACTS
COME NOW the parties, assisted by counsels, and to this Honorable
Court respectfully enter into the following agreed stipulation of facts:

1. That the personal circumstances of the parties as stated in

paragraph 1 of the complaint is admitted; but the particular person of
Mr. Armin M. Cariaga is to be substituted, however, by anyone who is
actually holding the position of Provincial Treasurer of the Province of
Abra;
2. That the plaintiff Abra Valley Junior College, Inc. is the owner of the
lot and buildings thereon located in Bangued, Abra under Original
Certificate of Title No. 0-83;
3. That the defendant Gaspar V. Bosque, as Municipal treasurer of
Bangued, Abra caused to be served upon the Abra Valley Junior
College, Inc. a Notice of Seizure on the property of said school under
Original Certificate of Title No. 0-83 for the satisfaction of real
property taxes thereon, amounting to P5,140.31; the Notice of Seizure
being the one attached to the complaint as Exhibit A;
4. That on June 8, 1972 the above properties of the Abra Valley Junior
College, Inc. was sold at public auction for the satisfaction of the
unpaid real property taxes thereon and the same was sold to
defendant Paterno Millare who offered the highest bid of P6,000.00
and a Certificate of Sale in his favor was issued by the defendant
Municipal Treasurer.
5. That all other matters not particularly and specially covered by this
stipulation of facts will be the subject of evidence by the parties.
WHEREFORE, it is respectfully prayed of the Honorable Court to
consider and admit this stipulation of facts on the point agreed upon
by the parties.
Bangued, Abra, April 12, 1973. Brillantes
Typ AGRIPINO BRILLANTES
Attorney for Plaintiff. Loreto Roldan
Typ LORETO ROLDAN
Provincial Fiscal
Counsel for Defendants
Provincial Treasurer of
Abra and the Municipal
Treasurer of Bangued, Abra

Aside from the Stipulation of Facts, the trial court among others, found the following: (a)
that the school is recognized by the government and is offering Primary, High School
and College Courses, and has a school population of more than one thousand students
all in all; (b) that it is located right in the heart of the town of Bangued, a few meters
from the plaza and about 120 meters from the Court of First Instance building; (c) that
the elementary pupils are housed in a two-storey building across the street; (d) that the
high school and college students are housed in the main building; (e) that the Director
with his family is in the second floor of the main building; and (f) that the annual gross
income of the school reaches more than one hundred thousand pesos.
From all the foregoing, the only issue left for the Court to determine and as agreed by
the parties, is whether or not the lot and building in question are used exclusively for
educational purposes. (Rollo, p. 20)
The succeeding Provincial Fiscal, Hon. Jose A. Solomon and his Assistant, Hon. Eustaquio
Z. Montero, filed a Memorandum for the Government on March 25, 1974, and a
Supplemental Memorandum on May 7, 1974, wherein they opined "that based on the
evidence, the laws applicable, court decisions and jurisprudence, the school building
and school lot used for educational purposes of the Abra Valley College, Inc., are
exempted from the payment of taxes." (Annexes "B," "B-1" of Petition; Rollo, pp. 24-49;
44 and 49).
Nonetheless, the trial court disagreed because of the use of the second floor by the
Director of petitioner school for residential purposes. He thus ruled for the government
and rendered the assailed decision.
After having been granted by the trial court ten (10) days from August 6, 1974 within
which to perfect its appeal (Per Order dated August 6, 1974; Annex "G" of Petition;
Rollo, p. 57) petitioner instead availed of the instant petition for review
on certiorari with prayer for preliminary injunction before this Court, which petition was
filed on August 17, 1974 (Rollo, p.2).
In the resolution dated August 16, 1974, this Court resolved to give DUE COURSE to the
petition (Rollo, p. 58). Respondents were required to answer said petition (Rollo, p. 74).
Petitioner raised the following assignments of error:
I.

II.
Sgd. Demetrio V. Pre
Typ. DEMETRIO V. PRE
Attorney for Defendant
Paterno Millare (Rollo, pp. 17-18)

THE COURT A QUO ERRED IN SUSTAINING AS VALID THE SEIZURE AND SALE
OF THE COLLEGE LOT AND BUILDING USED FOR EDUCATIONAL PURPOSES
OF THE PETITIONER.
THE COURT A QUO ERRED IN DECLARING THAT THE COLLEGE LOT AND
BUILDING OF THE PETITIONER ARE NOT USED EXCLUSIVELY FOR
EDUCATIONAL PURPOSES MERELY BECAUSE THE COLLEGE PRESIDENT
RESIDES IN ONE ROOM OF THE COLLEGE BUILDING.

III.

IV.

THE COURT A QUO ERRED IN DECLARING THAT THE COLLEGE LOT AND
BUILDING OF THE PETITIONER ARE NOT EXEMPT FROM PROPERTY TAXES
AND IN ORDERING PETITIONER TO PAY P5,140.31 AS REALTY TAXES.
THE COURT A QUO ERRED IN ORDERING THE CONFISCATION OF THE
P6,000.00 DEPOSIT MADE IN THE COURT BY PETITIONER AS PAYMENT OF
THE P5,140.31 REALTY TAXES. (See Brief for the Petitioner, pp. 1-2)

The main issue in this case is the proper interpretation of the phrase "used exclusively
for educational purposes."
Petitioner contends that the primary use of the lot and building for educational
purposes, and not the incidental use thereof, determines and exemption from property
taxes under Section 22 (3), Article VI of the 1935 Constitution. Hence, the seizure and
sale of subject college lot and building, which are contrary thereto as well as to the
provision of Commonwealth Act No. 470, otherwise known as the Assessment Law, are
without legal basis and therefore void.
On the other hand, private respondents maintain that the college lot and building in
question which were subjected to seizure and sale to answer for the unpaid tax are
used: (1) for the educational purposes of the college; (2) as the permanent residence of
the President and Director thereof, Mr. Pedro V. Borgonia, and his family including the
in-laws and grandchildren; and (3) for commercial purposes because the ground floor of
the college building is being used and rented by a commercial establishment, the
Northern Marketing Corporation (See photograph attached as Annex "8" (Comment;
Rollo, p. 90]).
Due to its time frame, the constitutional provision which finds application in the case at
bar is Section 22, paragraph 3, Article VI, of the then 1935 Philippine Constitution, which
expressly grants exemption from realty taxes for "Cemeteries, churches and parsonages
or convents appurtenant thereto, and all lands, buildings, and improvements used
exclusively for religious, charitable or educational purposes ...
Relative thereto, Section 54, paragraph c, Commonwealth Act No. 470 as amended by
Republic Act No. 409, otherwise known as the Assessment Law, provides:
The following are exempted from real property tax under the
Assessment Law:
xxx xxx xxx
(c) churches and parsonages or convents appurtenant thereto, and all
lands, buildings, and improvements used exclusively for religious,
charitable, scientific or educational purposes.
xxx xxx xxx

In this regard petitioner argues that the primary use of the school lot and building is the
basic and controlling guide, norm and standard to determine tax exemption, and not the
mere incidental use thereof.
As early as 1916 in YMCA of Manila vs. Collector of lnternal Revenue, 33 Phil. 217 [1916],
this Court ruled that while it may be true that the YMCA keeps a lodging and a boarding
house and maintains a restaurant for its members, still these do not constitute business
in the ordinary acceptance of the word, but an institution used exclusively for religious,
charitable and educational purposes, and as such, it is entitled to be exempted from
taxation.
In the case of Bishop of Nueva Segovia v. Provincial Board of Ilocos Norte, 51 Phil. 352
[1972], this Court included in the exemption a vegetable garden in an adjacent lot and
another lot formerly used as a cemetery. It was clarified that the term "used exclusively"
considers incidental use also. Thus, the exemption from payment of land tax in favor of
the convent includes, not only the land actually occupied by the building but also the
adjacent garden devoted to the incidental use of the parish priest. The lot which is not
used for commercial purposes but serves solely as a sort of lodging place, also qualifies
for exemption because this constitutes incidental use in religious functions.
The phrase "exclusively used for educational purposes" was further clarified by this
Court in the cases of Herrera vs. Quezon City Board of assessment Appeals, 3 SCRA 186
[1961] and Commissioner of Internal Revenue vs. Bishop of the Missionary District, 14
SCRA 991 [1965], thus
Moreover, the exemption in favor of property used exclusively for
charitable or educational purposes is 'not limited to property actually
indispensable' therefor (Cooley on Taxation, Vol. 2, p. 1430), but
extends to facilities which are incidental to and reasonably necessary
for the accomplishment of said purposes, such as in the case of
hospitals, "a school for training nurses, a nurses' home, property use
to provide housing facilities for interns, resident doctors,
superintendents, and other members of the hospital staff, and
recreational facilities for student nurses, interns, and residents' (84 CJS
6621), such as "Athletic fields" including "a firm used for the inmates
of the institution. (Cooley on Taxation, Vol. 2, p. 1430).
The test of exemption from taxation is the use of the property for purposes mentioned
in the Constitution (Apostolic Prefect v. City Treasurer of Baguio, 71 Phil, 547 [1941]).
It must be stressed however, that while this Court allows a more liberal and nonrestrictive interpretation of the phrase "exclusively used for educational purposes" as
provided for in Article VI, Section 22, paragraph 3 of the 1935 Philippine Constitution,
reasonable emphasis has always been made that exemption extends to facilities which
are incidental to and reasonably necessary for the accomplishment of the main
purposes. Otherwise stated, the use of the school building or lot for commercial

purposes is neither contemplated by law, nor by jurisprudence. Thus, while the use of
the second floor of the main building in the case at bar for residential purposes of the
Director and his family, may find justification under the concept of incidental use, which
is complimentary to the main or primary purposeeducational, the lease of the first
floor thereof to the Northern Marketing Corporation cannot by any stretch of the
imagination be considered incidental to the purpose of education.
It will be noted however that the aforementioned lease appears to have been raised for
the first time in this Court. That the matter was not taken up in the to court is really
apparent in the decision of respondent Judge. No mention thereof was made in the
stipulation of facts, not even in the description of the school building by the trial judge,
both embodied in the decision nor as one of the issues to resolve in order to determine
whether or not said properly may be exempted from payment of real estate taxes
(Rollo, pp. 17-23). On the other hand, it is noteworthy that such fact was not disputed
even after it was raised in this Court.
Indeed, it is axiomatic that facts not raised in the lower court cannot be taken up for the
first time on appeal. Nonetheless, as an exception to the rule, this Court has held that
although a factual issue is not squarely raised below, still in the interest of substantial
justice, this Court is not prevented from considering a pivotal factual matter. "The
Supreme Court is clothed with ample authority to review palpable errors not assigned as
such if it finds that their consideration is necessary in arriving at a just decision." (Perez
vs. Court of Appeals, 127 SCRA 645 [1984]).
Under the 1935 Constitution, the trial court correctly arrived at the conclusion that the
school building as well as the lot where it is built, should be taxed, not because the
second floor of the same is being used by the Director and his family for residential
purposes, but because the first floor thereof is being used for commercial purposes.
However, since only a portion is used for purposes of commerce, it is only fair that half
of the assessed tax be returned to the school involved.
PREMISES CONSIDERED, the decision of the Court of First Instance of Abra, Branch I, is
hereby AFFIRMED subject to the modification that half of the assessed tax be returned
to the petitioner.
SO ORDERED.
Yap, C.J., Melencio-Herrera, Padilla and Sarmiento, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 170656

August 15, 2007

THE METROPOLITAN MANILA DEVELOPMENT AUTHORITY and BAYANI FERNANDO as

Chairman of the Metropolitan Manila Development Authority, petitioners,
vs.
VIRON TRANSPORTATION CO., INC., respondent.
x --------------------------------------------- x
G.R. No. 170657

August 15, 2007

HON. ALBERTO G. ROMULO, Executive Secretary, the METROPOLITAN MANILA

DEVELOPMENT AUTHORITY and BAYANI FERNANDO as Chairman of the Metropolitan
Manila Development Authority,petitioners,
vs.
MENCORP TRANSPORTATION SYSTEM, INC., respondent.
DECISION
CARPIO MORALES, J.:
The following conditions in 1969, as observed by this Court:
Vehicles have increased in number. Traffic congestion has moved from bad to
worse, from tolerable to critical. The number of people who use the
1
thoroughfares has multiplied x x x,
have remained unchecked and have reverberated to this day. Traffic jams continue to
clog the streets of Metro Manila, bringing vehicles to a standstill at main road arteries
during rush hour traffic and sapping peoples energies and patience in the process.
The present petition for review on certiorari, rooted in the traffic congestion problem,
questions the authority of the Metropolitan Manila Development Authority (MMDA) to
order the closure of provincial bus terminals along Epifanio de los Santos Avenue (EDSA)
and major thoroughfares of Metro Manila.
Specifically challenged are two Orders issued by Judge Silvino T. Pampilo, Jr. of the
Regional Trial Court (RTC) of Manila, Branch 26 in Civil Case Nos. 03-105850 and 03106224.

The first assailed Order of September 8, 2005, which resolved a motion for
reconsideration filed by herein respondents, declared Executive Order (E.O.) No. 179,
hereafter referred to as the E.O., "unconstitutional as it constitutes an unreasonable
3
exercise of police power." The second assailed Order of November 23, 2005 denied
petitioners motion for reconsideration.
The following facts are not disputed:
President Gloria Macapagal Arroyo issued the E.O. on February 10, 2003, "Providing for
the Establishment of Greater Manila Mass Transport System," the pertinent portions of
which read:
WHEREAS, Metro Manila continues to be the center of employment
opportunities, trade and commerce of the Greater Metro Manila area;
WHEREAS, the traffic situation in Metro Manila has affected the
adjacent provinces of Bulacan, Cavite, Laguna, and Rizal, owing to the
continued movement of residents and industries to more affordable
and economically viable locations in these provinces;
WHEREAS, the Metropolitan Manila Development Authority (MMDA)
is tasked to undertake measures to ease traffic congestion in Metro
Manila and ensure the convenient and efficient travel of commuters
within its jurisdiction;
WHEREAS, a primary cause of traffic congestion in Metro Manila has
been the numerous buses plying the streets that impedes [sic] the
flow of vehicles and commuters due to the inefficient connectivity of
the different transport modes;
WHEREAS, the MMDA has recommended a plan to decongest traffic
by eliminating the bus terminals now located along major Metro
Manila thoroughfares and providing more convenient access to the
mass transport system to the commuting public through the provision
of mass transport terminal facilities that would integrate the existing
transport modes, namely the buses, the rail-based systems of the LRT,
MRT and PNR and to facilitate and ensure efficient travel through the
improved connectivity of the different transport modes;
WHEREAS, the national government must provide the necessary
funding requirements to immediately implement and render
operational these projects; and extent to MMDA such other assistance
as may be warranted to ensure their expeditious prosecution.

NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the

Philippines, by virtue of the powers vested in me by law, do hereby
order:
Section 1. THE PROJECT. The project shall be identified as GREATER
MANILA TRANSPORT SYSTEM Project.
Section 2. PROJECT OBJECTIVES. In accordance with the plan
proposed by MMDA, the project aims to develop four (4) interim
intermodal mass transport terminals to integrate the different
transport modes, as well as those that shall hereafter be developed, to
serve the commuting public in the northwest, north, east, south, and
southwest of Metro Manila. Initially, the project shall concentrate on
immediately establishing the mass transport terminals for the north
and south Metro Manila commuters as hereinafter described.
Section 3. PROJECT IMPLEMENTING AGENCY. The Metropolitan
Manila Development Authority (MMDA), is hereby designated as the
implementing Agency for the project. For this purpose, MMDA is
directed to undertake such infrastructure development work as may
be necessary and, thereafter, manage the project until it may be
turned-over to more appropriate agencies, if found suitable and
convenient. Specifically, MMDA shall have the following functions and
responsibilities:
a) Cause the preparation of the Master Plan for the
projects, including the designs and costing;
b) Coordinate the use of the land and/or properties
needed for the project with the respective agencies
and/or entities owning them;
c) Supervise and manage the construction of the
necessary structures and facilities;
d) Execute such contracts or agreements as may be
necessary, with the appropriate government
agencies, entities, and/or private persons, in
accordance with existing laws and pertinent
regulations, to facilitate the implementation of the
project;
e) Accept, manage and disburse such funds as may
be necessary for the construction and/or
implementation of the projects, in accordance with

prevailing accounting and audit polices and practice

in government.
f) Enlist the assistance of any national government
agency, office or department, including local
government units, government-owned or controlled
corporations, as may be necessary;
g) Assign or hire the necessary personnel for the
above purposes; and
h) Perform such other related functions as may be
necessary to enable it to accomplish the objectives
4
and purposes of this Executive Order. (Emphasis in
the original; underscoring supplied)
As the above-quoted portions of the E.O. noted, the primary cause of traffic congestion
in Metro Manila has been the numerous buses plying the streets and the inefficient
5
connectivity of the different transport modes; and the MMDA had "recommended a
plan to decongest traffic by eliminating the bus terminals now located along major
Metro Manila thoroughfares and providing more and convenient access to the mass
transport system to the commuting public through the provision of mass transport
6
terminal facilities" which plan is referred to under the E.O. as the Greater Manila Mass
Transport System Project (the Project).
The E.O. thus designated the MMDA as the implementing agency for the Project.
Pursuant to the E.O., the Metro Manila Council (MMC), the governing board and
7
policymaking body of the MMDA, issued Resolution No. 03-07 series of 2003 expressing
full support of the Project. Recognizing the imperative to integrate the different
transport modes via the establishment of common bus parking terminal areas, the MMC
cited the need to remove the bus terminals located along major thoroughfares of Metro
8
Manila.
On February 24, 2003, Viron Transport Co., Inc. (Viron), a domestic corporation engaged
9
in the business of public transportation with a provincial bus operation, filed a petition
10
11
for declaratory relief before the RTC of Manila.
In its petition which was docketed as Civil Case No. 03-105850, Viron alleged that the
MMDA, through Chairman Fernando, was "poised to issue a Circular, Memorandum or
Order closing, or tantamount to closing, all provincial bus terminals along EDSA and in
12
the whole of the Metropolis under the pretext of traffic regulation." This impending
move, it stressed, would mean the closure of its bus terminal in Sampaloc, Manila and
two others in Quezon City.

Alleging that the MMDAs authority does not include the power to direct provincial bus
operators to abandon their existing bus terminals to thus deprive them of the use of
their property, Viron asked the court to construe the scope, extent and limitation of the
power of the MMDA to regulate traffic under R.A. No. 7924, "An Act Creating the
Metropolitan Manila Development Authority, Defining its Powers and Functions,
Providing Funds Therefor and For Other Purposes."
Viron also asked for a ruling on whether the planned closure of provincial bus terminals
would contravene the Public Service Act and related laws which mandate public utilities
to provide and maintain their own terminals as a requisite for the privilege of operating
13
as common carriers.
Mencorp Transportation System, Inc. (Mencorp), another provincial bus operator, later
14
filed a similar petition for declaratory relief against Executive Secretary Alberto G.
Romulo and MMDA Chairman Fernando.
Mencorp asked the court to declare the E.O. unconstitutional and illegal for
transgressing the possessory rights of owners and operators of public land
transportation units over their respective terminals.
Averring that MMDA Chairman Fernando had begun to implement a plan to close and
eliminate all provincial bus terminals along EDSA and in the whole of the metropolis and
15
to transfer their operations to common bus terminals, Mencorp prayed for the
issuance of a temporary restraining order (TRO) and/or writ of preliminary injunction to
restrain the impending closure of its bus terminals which it was leasing at the corner of
EDSA and New York Street in Cubao and at the intersection of Blumentritt, Laon Laan
and Halcon Streets in Quezon City. The petition was docketed as Civil Case No. 03106224 and was raffled to Branch 47 of the RTC of Manila.
Mencorps petition was consolidated on June 19, 2003 with Virons petition which was
raffled to Branch 26 of the RTC, Manila.
Mencorps prayer for a TRO and/or writ of injunction was denied as was its application
16
for the issuance of a preliminary injunction.

18

By Decision of January 24, 2005, the trial court sustained the constitutionality and
legality of the E.O. pursuant to R.A. No. 7924, which empowered the MMDA to
administer Metro Manilas basic services including those of transport and traffic
management.
The trial court held that the E.O. was a valid exercise of the police power of the State as
it satisfied the two tests of lawful subject matter and lawful means, hence, Virons and
Mencorps property rights must yield to police power.
On the separate motions for reconsideration of Viron and Mencorp, the trial court, by
Order of September 8, 2005, reversed its Decision, this time holding that the E.O. was
"an unreasonable exercise of police power"; that the authority of the MMDA under
Section (5)(e) of R.A. No. 7924 does not include the power to order the closure of
Virons and Mencorps existing bus terminals; and that the E.O. is inconsistent with the
provisions of the Public Service Act.
Petitioners motion for reconsideration was denied by Resolution of November 23,
2005.
Hence, this petition, which faults the trial court for failing to rule that: (1) the requisites
of declaratory relief are not present, there being no justiciable controversy in Civil Case
Nos. 03-105850 and 03-106224; and (2) the President has the authority to undertake or
19
cause the implementation of the Project.
Petitioners contend that there is no justiciable controversy in the cases for declaratory
relief as nothing in the body of the E.O. mentions or orders the closure and elimination
of bus terminals along the major thoroughfares of Metro Manila. Viron and Mencorp,
they argue, failed to produce any letter or communication from the Executive
Department apprising them of an immediate plan to close down their bus terminals.
And petitioners maintain that the E.O. is only an administrative directive to government
agencies to coordinate with the MMDA and to make available for use government
property along EDSA and South Expressway corridors. They add that the only relation
created by the E.O. is that between the Chief Executive and the implementing officials,
but not between third persons.

17

In the Pre-Trial Order issued by the trial court, the issues were narrowed down to
whether 1) the MMDAs power to regulate traffic in Metro Manila included the power
to direct provincial bus operators to abandon and close their duly established and
existing bus terminals in order to conduct business in a common terminal; (2) the E.O. is
consistent with the Public Service Act and the Constitution; and (3) provincial bus
operators would be deprived of their real properties without due process of law should
they be required to use the common bus terminals.
Upon the agreement of the parties, they filed their respective position papers in lieu of
hearings.

The petition fails.

It is true, as respondents have pointed out, that the alleged deficiency of the
consolidated petitions to meet the requirement of justiciability was not among the
issues defined for resolution in the Pre-Trial Order of January 12, 2004. It is equally true,
however, that the question was repeatedly raised by petitioners in their Answer to
20
Virons petition, their Comment of April 29, 2003 opposing Mencorps prayer for the
21
22
issuance of a TRO, and their Position Paper of August 23, 2004.

In bringing their petitions before the trial court, both respondents pleaded the existence
23
of the essential requisites for their respective petitions for declaratory relief, and
24
refuted petitioners contention that a justiciable controversy was lacking. There can be
no denying, therefore, that the issue was raised and discussed by the parties before the
trial court.
The following are the essential requisites for a declaratory relief petition: (a) there must
be a justiciable controversy; (b) the controversy must be between persons whose
interests are adverse; (c) the party seeking declaratory relief must have a legal interest
25
in the controversy; and (d) the issue invoked must be ripe for judicial determination.
The requirement of the presence of a justiciable controversy is satisfied when an actual
controversy or theripening seeds thereof exist between the parties, all of whom are sui
juris and before the court, and the declaration sought will help in ending the
26
controversy. A question becomes justiciable when it is translated into a claim of right
27
which is actually contested.
In the present cases, respondents resort to court was prompted by the issuance of the
E.O. The 4th Whereas clause of the E.O. sets out in clear strokes the MMDAs plan to
"decongest traffic by eliminating the bus terminals now located along major Metro
Manila thoroughfares and providing more convenient access to the mass transport
system to the commuting public through the provision of mass transport terminal
facilities x x x." (Emphasis supplied)
Section 2 of the E.O. thereafter lays down the immediate establishment of common bus
terminals for north- and south-bound commuters. For this purpose, Section 8 directs the
Department of Budget and Management to allocate funds of not more than one
hundred million pesos (P100,000,000) to cover the cost of the construction of the north
and south terminals. And the E.O. was made effective immediately.
The MMDAs resolve to immediately implement the Project, its denials to the contrary
notwithstanding, is also evident from telltale circumstances, foremost of which was the
passage by the MMC of Resolution No. 03-07, Series of 2003 expressing its full support
of the immediate implementation of the Project.
Notable from the 5th Whereas clause of the MMC Resolution is the plan to "remove the
bus terminals located along major thoroughfares of Metro Manila and an urgent need
to integrate the different transport modes." The 7th Whereas clause proceeds to
mention the establishment of the North and South terminals.
As alleged in Virons petition, a diagram of the GMA-MTS North Bus/Rail Terminal had
been drawn up, and construction of the terminal is already in progress. The MMDA, in
28
29
its Answer and Position Paper, in fact affirmed that the government had begun to
implement the Project.

It thus appears that the issue has already transcended the boundaries of what is merely
conjectural or anticipatory.lawphil
Under the circumstances, for respondents to wait for the actual issuance by the MMDA
of an order for the closure of respondents bus terminals would be foolhardy for, by
then, the proper action to bring would no longer be for declaratory relief which, under
30
Section 1, Rule 63 of the Rules of Court, must be brought before there is a breach or
violation of rights.
As for petitioners contention that the E.O. is a mere administrative issuance which
creates no relation with third persons, it does not persuade. Suffice it to stress that to
ensure the success of the Project for which the concerned government agencies are
directed to coordinate their activities and resources, the existing bus terminals owned,
operated or leased by third persons like respondents would have to be eliminated; and
respondents would be forced to operate from the common bus terminals.
It cannot be gainsaid that the E.O. would have an adverse effect on respondents. The
closure of their bus terminals would mean, among other things, the loss of income from
the operation and/or rentals of stalls thereat. Precisely, respondents claim a deprivation
of their constitutional right to property without due process of law.
Respondents have thus amply demonstrated a "personal and substantial interest in the
case such that [they have] sustained, or will sustain, direct injury as a result of [the
31
E.O.s] enforcement." Consequently, the established rule that the constitutionality of a
law or administrative issuance can be challenged by one who will sustain a direct injury
as a result of its enforcement has been satisfied by respondents.
On to the merits of the case.
Respondents posit that the MMDA is devoid of authority to order the elimination of
their bus terminals under the E.O. which, they argue, is unconstitutional because it
violates both the Constitution and the Public Service Act; and that neither is the MMDA
clothed with such authority under R.A. No. 7924.
Petitioners submit, however, that the real issue concerns the Presidents authority to
undertake or to cause the implementation of the Project. They assert that the authority
of the President is derived from E.O. No. 125, "Reorganizing the Ministry of
Transportation and Communications Defining its Powers and Functions and for Other
Purposes," her residual power and/or E.O. No. 292, otherwise known as the
Administrative Code of 1987. They add that the E.O. is also a valid exercise of the police
power.
32

E.O. No. 125, which former President Corazon Aquino issued in the exercise of
legislative powers, reorganized the then Ministry (now Department) of Transportation
and Communications. Sections 4, 5, 6 and 22 of E.O. 125, as amended by E.O. 12533
A, read:

SECTION 4. Mandate. The Ministry shall be the primary policy, planning,

programming, coordinating, implementing, regulating and administrative
entity of the Executive Branch of the government in the promotion,
development and regulation of dependable and coordinated networks of
transportation and communication systems as well as in the fast, safe, efficient
and reliable postal, transportation and communications services.
To accomplish such mandate, the Ministry shall have the following objectives:
(a) Promote the development of dependable and coordinated
networks of transportation and communications systems;
(b) Guide government
and
private
investment
in
the development of the countrys intermodal transportation
and communications systems in a most practical,
expeditious, and orderly fashion for maximum safety, service,
and cost effectiveness; (Emphasis and underscoring supplied)
xxxx
SECTION 5. Powers and Functions. To accomplish its mandate, the Ministry
shall have the following powers and functions:
(a) Formulate and recommend national policies and
guidelines for the preparation and implementation of
integrated and comprehensive transportation and
communications systems at the national, regional and local
levels;
(b) Establish and administer comprehensive and integrated
programs for transportation and communications, and for
this purpose, may call on any agency, corporation, or
organization, whether public or private, whose development
programs include transportation and communications as an
integral part thereof, to participate and assist in the
preparation and implementation of such program;
(c) Assess, review and provide direction to transportation and
communications research and development programs of the
government in coordination with other institutions
concerned;
(d) Administer all laws, rules and regulations in the field of
transportation and communications; (Emphasis and
underscoring supplied)

xxxx
SECTION 6. Authority and Responsibility. The authority and responsibility
for the exercise of the mandate of the Ministry and for the discharge of its
powers and functions shall be vested in the Minister of Transportation and
Communications, hereinafter referred to as the Minister, who shall have
supervision and control over the Ministry and shall be appointed by the
President. (Emphasis and underscoring supplied)
SECTION 22. Implementing Authority of Minister. The Minister shall issue
such orders, rules, regulations and other issuances as may be necessary to
ensure the effective implementation of the provisions of this Executive Order.
(Emphasis and underscoring supplied)
It is readily apparent from the abovequoted provisions of E.O. No. 125, as amended,
that the President, then possessed of and exercising legislative powers, mandated the
DOTC to be the primary policy, planning, programming, coordinating, implementing,
regulating and administrative entity to promote, develop and regulate networks of
transportation and communications. The grant of authority to the DOTC includes the
power toestablish and administer comprehensive and integrated programs for
transportation and communications.
As may be seen further, the Minister (now Secretary) of the DOTC is vested with the
authority and responsibility to exercise the mandate given to the
department. Accordingly, the DOTC Secretary is authorized to issue such orders, rules,
regulations and other issuances as may be necessary to ensure the effective
implementation of the law.
Since, under the law, the DOTC is authorized to establish and administer programs and
projects for transportation, it follows that the President may exercise the same power
and authority to order the implementation of the Project, which admittedly is one for
transportation.
Such authority springs from the Presidents power of control over all executive
departments as well as the obligation for the faithful execution of the laws under Article
VII, Section 17 of the Constitution which provides:
SECTION 17. The President shall have control of all the executive departments,
bureaus and offices. He shall ensure that the laws be faithfully executed.
This constitutional provision is echoed in Section 1, Book III of the Administrative Code
of 1987. Notably, Section 38, Chapter 37, Book IV of the same Code defines the
Presidents power of supervision and control over the executive departments, viz:

SECTION 38. Definition of Administrative Relationships. Unless otherwise

expressly stated in the Code or in other laws defining the special relationships
of particular agencies, administrative relationships shall be categorized and
defined as follows:
(1) Supervision and Control. Supervision and control shall include authority
to act directlywhenever a specific function is entrusted by law or regulation
to a subordinate; direct the performance of duty; restrain the commission of
acts; review, approve, reverse or modify acts and decisions of subordinate
officials or units; determine priorities in the execution of plans and programs.
Unless a different meaning is explicitly provided in the specific law governing
the relationship of particular agencies the word "control" shall encompass
supervision and control as defined in this paragraph. x x x (Emphasis and
underscoring supplied)
Thus, whenever a specific function is entrusted by law or regulation to a subordinate,
34
the President may act directly or merely direct the performance of a duty.
Respecting the Presidents authority to order the implementation of the Project in the
exercise of the police power of the State, suffice it to stress that the powers vested in
the DOTC Secretary to establish and administer comprehensive and integrated
programs for transportation and communications and to issue orders, rules and
regulations to implement such mandate (which, as previously discussed, may also be
exercised by the President) have been so delegated for the good and welfare of the
people. Hence, these powers partake of the nature of police power.
Police power is the plenary power vested in the legislature to make, ordain, and
establish wholesome and reasonable laws, statutes and ordinances, not repugnant to
35
the Constitution, for the good and welfare of the people. This power to prescribe
regulations to promote the health, morals, education, good order or safety, and general
welfare of the people flows from the recognition that salus populi est suprema lex the
welfare of the people is the supreme law.
While police power rests primarily with the legislature, such power may be delegated,
36
as it is in fact increasingly being delegated. By virtue of a valid delegation, the power
37
may be exercised by the President and administrative boards as well as by the
lawmaking bodies of municipal corporations or local governments under an express
38
delegation by the Local Government Code of 1991.
The authority of the President to order the implementation of the Project
notwithstanding, the designation of the MMDA as the implementing agency for the
Project may not be sustained. It is ultra vires, there being no legal basis therefor.
It bears stressing that under the provisions of E.O. No. 125, as amended, it is the DOTC,
and not the MMDA, which is authorized to establish and implement a project such as
the one subject of the cases at bar. Thus, the President, although authorized to establish

or cause the implementation of the Project, must exercise the authority through the
instrumentality of the DOTC which, by law, is the primary implementing and
administrative entity in the promotion, development and regulation of networks of
transportation, and the one so authorized to establish and implement a project such as
the Project in question.
By designating the MMDA as the implementing agency of the Project, the President
clearly overstepped the limits of the authority conferred by law, rendering E.O. No.
179 ultra vires.
In another vein, the validity of the designation of MMDA flies in the absence of a specific
grant of authority to it under R.A. No. 7924.
39

To recall, R.A. No. 7924 declared the Metropolitan Manila area as a "special
development and administrative region" and placed the administration of "metro-wide"
basic services affecting the region under the MMDA.
Section 2 of R.A. No. 7924 specifically authorizes the MMDA to perform "planning,
monitoring and coordinative functions, and in the process exercise regulatory and
supervisory authority over the delivery of metro-wide services," including transport and
40
traffic management. Section 5 of the same law enumerates the powers and functions
of the MMDA as follows:
(a) Formulate, coordinate and regulate the implementation of medium
and long-term plans and programs for the delivery of metro-wide
services, land use and physical development within Metropolitan
Manila, consistent with national development objectives and
priorities;
(b) Prepare, coordinate and regulate the implementation of mediumterm investment programs for metro-wide services which shall
indicate sources and uses of funds for priority programs and projects,
and which shall include the packaging of projects and presentation to
funding institutions;
(c) Undertake and manage on its own metro-wide programs and
projects for the delivery of specific services under its jurisdiction,
subject to the approval of the Council. For this purpose, MMDA can
create appropriate project management offices;
(d) Coordinate and monitor the implementation of such plans,
programs and projects in Metro Manila; identify bottlenecks and
adopt solutions to problems of implementation;

(e) The MMDA shall set the policies concerning traffic in Metro
Manila, and shall coordinate and regulate the implementation of all
programs and projects concerning traffic management, specifically
pertaining to enforcement, engineering and education. Upon
request, it shall be extended assistance and cooperation, including but
not limited to, assignment of personnel, by all other government
agencies and offices concerned;
(f) Install and administer a single ticketing system, fix, impose and
collect fines and penalties for all kinds of violations of traffic rules
and regulations, whether moving or non-moving in nature, and
confiscate and suspend or revoke drivers licenses in the enforcement
of such traffic laws and regulations, the provisions of RA 4136 and PD
1605 to the contrary notwithstanding. For this purpose, the Authority
shall impose all traffic laws and regulations in Metro Manila, through
its traffic operation center, and may deputize members of the PNP,
traffic enforcers of local government units, duly licensed security
guards, or members of non-governmental organizations to whom may
be delegated certain authority, subject to such conditions and
requirements as the Authority may impose; and
(g) Perform other related functions required to achieve the objectives
of the MMDA, including the undertaking of delivery of basic services
to the local government units, when deemed necessary subject to
prior coordination with and consent of the local government unit
concerned." (Emphasis and underscoring supplied)
The scope of the function of MMDA as an administrative, coordinating and policysetting body has been settled inMetropolitan Manila Development Authority (MMDA) v.
41
Bel-Air Village Association, Inc. In that case, the Court stressed:
Clearly, the scope of the MMDAs function is limited to the delivery of the
seven (7) basic services. One of these is transport and traffic
management which includes the formulation and monitoring of policies,
standards and projects to rationalize the existing transport operations,
infrastructure requirements, the use of thoroughfares and promotion of the
safe movement of persons and goods. It also covers the mass transport
system and the institution of a system of road regulation, the administration of
all traffic enforcement operations, traffic engineering services and traffic
education programs, including the institution of a single ticketing system in
Metro Manila for traffic violations. Under this service, the MMDA is expressly
authorized to "to set the policies concerning traffic" and "coordinate and
regulate the implementation of all traffic management programs." In addition,
the MMDA may install and administer a single ticketing system," fix, impose
and collect fines and penalties for all traffic violations.

It will be noted that the powers of the MMDA are limited to the following acts:
formulation, coordination, regulation, implementation, preparation,
management, monitoring, setting of policies, installation of a system and
administration. There is no syllable in R.A. No. 7924 that grants the MMDA
police power, let alone legislative power. Even the Metro Manila Council has
not been delegated any legislative power.Unlike the legislative bodies of the
local government units, there is no provision in R.A. No. 7924 that empowers
the MMDA or its Council to enact ordinances, approve resolutions and
appropriate funds for the general welfare of the inhabitants of Metro
Manila. The MMDA is, as termed in the charter itself, a development
authority. It is an agency created for the purpose of laying down
policies and coordinating with the various national government agencies,
peoples organizations, non-governmental organizations and the private
sector for the efficient and expeditious delivery of basic services in the vast
metropolitan area. All its functions are administrative in nature and these are
actually summed up in the charter itself, viz:
SECTION 2. Creation of the Metropolitan Manila Development Authority. . .
.
The MMDA shall perform planning, monitoring and coordinative
functions, and in the process exercise regulatory and supervisory
authority over the delivery of metro-wide services within Metro
Manila, without diminution of the autonomy of the local government
42
units concerning purely local matters. (Emphasis and underscoring
supplied)
In light of the administrative nature of its powers and functions, the MMDA is devoid of
authority to implement the Project as envisioned by the E.O; hence, it could not have
been validly designated by the President to undertake the Project. It follows that the
MMDA cannot validly order the elimination of respondents terminals.
Even the MMDAs claimed authority under the police power must necessarily fail in
consonance with the above-quoted ruling in MMDA v. Bel-Air Village Association, Inc.
and this Courts subsequent ruling in Metropolitan Manila Development Authority v.
43
Garin that the MMDA is not vested with police power.
Even assuming arguendo that police power was delegated to the MMDA, its exercise of
such power does not satisfy the two tests of a valid police power measure, viz: (1) the
interest of the public generally, as distinguished from that of a particular class, requires
its exercise; and (2) the means employed are reasonably necessary for the
44
accomplishment of the purpose and not unduly oppressive upon individuals. Stated
differently, the police power legislation must be firmly grounded on public interest and
welfare and a reasonable relation must exist between the purposes and the means.

45

As early as Calalang v. Williams, this Court recognized that traffic congestion is a

public, not merely a private, concern. The Court therein held that public welfare
underlies the contested statute authorizing the Director of Public Works to promulgate
rules and regulations to regulate and control traffic on national roads.
46

Likewise, in Luque v. Villegas, this Court emphasized that public welfare lies at the
bottom of any regulatory measure designed "to relieve congestion of traffic, which is, to
47
say the least, a menace to public safety." As such, measures calculated to promote the
safety and convenience of the people using the thoroughfares by the regulation of
vehicular traffic present a proper subject for the exercise of police power.
Notably, the parties herein concede that traffic congestion is a public concern that
needs to be addressed immediately. Indeed, the E.O. was issued due to the felt need to
address the worsening traffic congestion in Metro Manila which, the MMDA so
determined, is caused by the increasing volume of buses plying the major thoroughfares
and the inefficient connectivity of existing transport systems. It is thus beyond cavil that
the motivating force behind the issuance of the E.O. is the interest of the public in
general.
Are the means employed appropriate and reasonably necessary for the accomplishment
of the purpose. Are they not duly oppressive?
With the avowed objective of decongesting traffic in Metro Manila, the E.O. seeks to
"eliminate[e] the bus terminals now located along major Metro Manila thoroughfares
and provid[e] more convenient access to the mass transport system to the commuting
48
public through the provision of mass transport terminal facilities x x x." Common
carriers with terminals along the major thoroughfares of Metro Manila would thus be
compelled to close down their existing bus terminals and use the MMDA-designated
common parking areas.
49

In Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc., two city ordinances were
passed by the Sangguniang Panlungsod of Lucena, directing public utility vehicles to
unload and load passengers at the Lucena Grand Central Terminal, which was given the
exclusive franchise to operate a single common terminal. Declaring that no other
terminals shall be situated, constructed, maintained or established inside or within the
city of Lucena, thesanggunian declared as inoperable all temporary terminals therein.
The ordinances were challenged before this Court for being unconstitutional on the
ground that, inter alia, the measures constituted an invalid exercise of police power, an
undue taking of private property, and a violation of the constitutional prohibition
against monopolies.
50

51

Citing De la Cruz v. Paras and Lupangco v. Court of Appeals, this Court held that the
assailed ordinances were characterized by overbreadth, as they went beyond what was
reasonably necessary to solve the traffic problem in the city. And it found that the

compulsory use of the Lucena Grand Terminal was unduly oppressive because it would
subject its users to fees, rentals and charges.
The true role of Constitutional Law is to effect an equilibrium between
authority and liberty so that rights are exercised within the framework of the
law and the laws are enacted with due deference to rights.
A due deference to the rights of the individual thus requires a more careful
formulation of solutions to societal problems.
From the memorandum filed before this Court by petitioner, it is gathered that
the Sangguniang Panlungsod had identified the cause of traffic congestion to
be the indiscriminate loading and unloading of passengers by buses on the
streets of the city proper, hence, the conclusion that the terminals contributed
to the proliferation of buses obstructing traffic on the city streets.
Bus terminals per se do not, however, impede or help impede the flow of
traffic. How the outright proscription against the existence of all terminals,
apart from that franchised to petitioner, can be considered as reasonably
necessary to solve the traffic problem, this Court has not been enlightened. If
terminals lack adequate space such that bus drivers are compelled to load and
unload passengers on the streets instead of inside the terminals, then
reasonable specifications for the size of terminals could be instituted, with
permits to operate the same denied those which are unable to meet the
specifications.
In the subject ordinances, however, the scope of the proscription against the
maintenance of terminals is so broad that even entities which might be able
to provide facilities better than the franchised terminal are barred from
operating at all. (Emphasis and underscoring supplied)
As in Lucena, this Court fails to see how the prohibition against the existence of
respondents terminals can be considered a reasonable necessity to ease traffic
congestion in the metropolis. On the contrary, the elimination of respondents bus
terminals brings forth the distinct possibility and the equally harrowing reality of traffic
congestion in the common parking areas, a case of transference from one site to
another.
Less intrusive measures such as curbing the proliferation of "colorum" buses, vans and
taxis entering Metro Manila and using the streets for parking and passenger pick-up
points, as respondents suggest, might even be more effective in easing the traffic
situation. So would the strict enforcement of traffic rules and the removal of
obstructions from major thoroughfares.
As to the alleged confiscatory character of the E.O., it need only to be stated that
respondents certificates of public convenience confer no property right, and are mere

52

licenses or privileges. As such, these must yield to legislation safeguarding the interest
of the people.
Even then, for reasons which bear reiteration, the MMDA cannot order the closure of
respondents terminals not only because no authority to implement the Project has
been granted nor legislative or police power been delegated to it, but also because the
elimination of the terminals does not satisfy the standards of a valid police power
measure.
Finally, an order for the closure of respondents terminals is not in line with the
provisions of the Public Service Act.
Paragraph (a), Section 13 of Chapter II of the Public Service Act (now Section 5 of
Executive Order No. 202, creating the Land Transportation Franchising and Regulatory
Board or LFTRB) vested the Public Service Commission (PSC, now the LTFRB) with "x x x
jurisdiction, supervision and control over all public services and their franchises,
equipment and other properties x x x."
Consonant with such grant of authority, the PSC was empowered to "impose such
conditions as to construction, equipment, maintenance, service, or operation as the
53
public interests and convenience may reasonably require" in approving any franchise
or privilege.
54

Further, Section 16 (g) and (h) of the Public Service Act provided that the Commission
shall have the power, upon proper notice and hearing in accordance with the rules and
provisions of this Act, subject to the limitations and exceptions mentioned and saving
provisions to the contrary:
(g) To compel any public service to furnish safe, adequate, and proper
service as regards the manner of furnishing the same as well as the
maintenance of the necessary material and equipment.
(h) To require any public service to establish, construct, maintain, and operate
any reasonable extension of its existing facilities, where in the judgment of
said Commission, such extension is reasonable and practicable and will furnish
sufficient business to justify the construction and maintenance of the same and
when the financial condition of the said public service reasonably warrants the
original expenditure required in making and operating such
extension.(Emphasis and underscoring supplied)
The establishment, as well as the maintenance of vehicle parking areas or passenger
terminals, is generally considered a necessary service to be provided by provincial bus
operators like respondents, hence, the investments they have poured into the
acquisition or lease of suitable terminal sites. Eliminating the terminals would thus run
counter to the provisions of the Public Service Act.

This Court commiserates with the MMDA for the roadblocks thrown in the way of its
efforts at solving the pestering problem of traffic congestion in Metro Manila. These
efforts are commendable, to say the least, in the face of the abominable traffic situation
of our roads day in and day out. This Court can only interpret, not change, the law,
however. It needs only to be reiterated that it is the DOTC as the primary policy,
planning, programming, coordinating, implementing, regulating and administrative
entity to promote, develop and regulate networks of transportation and
communications which has the power to establish and administer a transportation
project like the Project subject of the case at bar.
No matter how noble the intentions of the MMDA may be then, any plan, strategy or
project which it is not authorized to implement cannot pass muster.
WHEREFORE, the Petition is, in light of the foregoing disquisition, DENIED. E.O. No. 179
is declared NULL and VOID for being ultra vires.
SO ORDERED.
Puno, C.J., Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-Martinez,
Corona, Azcuna, Tinga, Chico-Nazario, Garcia, Velasco, Jr., Nachura, Reyes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
G.R. No. L-63915 December 29, 1986
LORENZO M. TA;ADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS
FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. (MABINI), petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON.
JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President,
MELQUIADES P. DE LA CRUZ, ETC., ET AL.,respondents.
RESOLUTION
CRUZ, J.:
Due process was invoked by the petitioners in demanding the disclosure of a number of
presidential decrees which they claimed had not been published as required by law. The
government argued that while publication was necessary as a rule, it was not so when it
was "otherwise provided," as when the decrees themselves declared that they were to
become effective immediately upon their approval. In the decision of this case on April
24, 1985, the Court affirmed the necessity for the publication of some of these decrees,
declaring in the dispositive portion as follows:
WHEREFORE, the Court hereby orders respondents to publish in the Official
Gazette all unpublished presidential issuances which are of general application,
and unless so published, they shall have no binding force and effect.
The petitioners are now before us again, this time to move for
1
reconsideration/clarification of that decision. Specifically, they ask the following
questions:
1. What is meant by "law of public nature" or "general applicability"?
2. Must a distinction be made between laws of general applicability and laws which are
not?
3. What is meant by "publication"?
4. Where is the publication to be made?
5. When is the publication to be made?

Resolving their own doubts, the petitioners suggest that there should be no distinction
between laws of general applicability and those which are not; that publication means
complete publication; and that the publication must be made forthwith in the Official
2
Gazette.
3

In the Comment required of the then Solicitor General, he claimed first that the
motion was a request for an advisory opinion and should therefore be dismissed, and,
on the merits, that the clause "unless it is otherwise provided" in Article 2 of the Civil
Code meant that the publication required therein was not always imperative; that
publication, when necessary, did not have to be made in the Official Gazette; and that in
any case the subject decision was concurred in only by three justices and consequently
4
not binding. This elicited a Reply refuting these arguments. Came next the February
Revolution and the Court required the new Solicitor General to file a Rejoinder in view
of the supervening events, under Rule 3, Section 18, of the Rules of Court. Responding,
he submitted that issuances intended only for the internal administration of a
government agency or for particular persons did not have to be 'Published; that
publication when necessary must be in full and in the Official Gazette; and that,
however, the decision under reconsideration was not binding because it was not
5
supported by eight members of this Court.
The subject of contention is Article 2 of the Civil Code providing as follows:
ART. 2. Laws shall take effect after fifteen days following the completion of
their publication in the Official Gazette, unless it is otherwise provided. This
Code shall take effect one year after such publication.
After a careful study of this provision and of the arguments of the parties, both on the
original petition and on the instant motion, we have come to the conclusion and so
hold, that the clause "unless it is otherwise provided" refers to the date of effectivity
and not to the requirement of publication itself, which cannot in any event be omitted.
This clause does not mean that the legislature may make the law effective immediately
upon approval, or on any other date, without its previous publication.
Publication is indispensable in every case, but the legislature may in its discretion
provide that the usual fifteen-day period shall be shortened or extended. An example,
as pointed out by the present Chief Justice in his separate concurrence in the original
6
decision, is the Civil Code which did not become effective after fifteen days from its
publication in the Official Gazette but "one year after such publication." The general rule
did not apply because it was "otherwise provided. "
It is not correct to say that under the disputed clause publication may be dispensed with
altogether. The reason. is that such omission would offend due process insofar as it
would deny the public knowledge of the laws that are supposed to govern the
legislature could validly provide that a law e effective immediately upon its approval
notwithstanding the lack of publication (or after an unreasonably short period after
publication), it is not unlikely that persons not aware of it would be prejudiced as a

result and they would be so not because of a failure to comply with but simply because
they did not know of its existence, Significantly, this is not true only of penal laws as is
commonly supposed. One can think of many non-penal measures, like a law on
prescription, which must also be communicated to the persons they may affect before
they can begin to operate.
We note at this point the conclusive presumption that every person knows the law,
which of course presupposes that the law has been published if the presumption is to
have any legal justification at all. It is no less important to remember that Section 6 of
the Bill of Rights recognizes "the right of the people to information on matters of public
concern," and this certainly applies to, among others, and indeed especially, the
legislative enactments of the government.
The term "laws" should refer to all laws and not only to those of general application, for
strictly speaking all laws relate to the people in general albeit there are some that do
not apply to them directly. An example is a law granting citizenship to a particular
individual, like a relative of President Marcos who was decreed instant naturalization. It
surely cannot be said that such a law does not affect the public although it
unquestionably does not apply directly to all the people. The subject of such law is a
matter of public interest which any member of the body politic may question in the
political forums or, if he is a proper party, even in the courts of justice. In fact, a law
without any bearing on the public would be invalid as an intrusion of privacy or as class
legislation or as anultra vires act of the legislature. To be valid, the law must invariably
affect the public interest even if it might be directly applicable only to one individual, or
some of the people only, and t to the public as a whole.
We hold therefore that all statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which shall begin fifteen days after
publication unless a different effectivity date is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers whenever the same are validly delegated
by the legislature or, at present, directly conferred by the Constitution. administrative
rules and regulations must a also be published if their purpose is to enforce or
implement existing law pursuant also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only
the personnel of the administrative agency and not the public, need not be published.
Neither is publication required of the so-called letters of instructions issued by
administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.
Accordingly, even the charter of a city must be published notwithstanding that it applies
to only a portion of the national territory and directly affects only the inhabitants of that
place. All presidential decrees must be published, including even, say, those naming a
public place after a favored individual or exempting him from certain prohibitions or

requirements. The circulars issued by the Monetary Board must be published if they are
meant not merely to interpret but to "fill in the details" of the Central Bank Act which
that body is supposed to enforce.
However, no publication is required of the instructions issued by, say, the Minister of
Social Welfare on the case studies to be made in petitions for adoption or the rules laid
down by the head of a government agency on the assignments or workload of his
personnel or the wearing of office uniforms. Parenthetically, municipal ordinances are
not covered by this rule but by the Local Government Code.
We agree that publication must be in full or it is no publication at all since its purpose is
to inform the public of the contents of the laws. As correctly pointed out by the
petitioners, the mere mention of the number of the presidential decree, the title of such
decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed date of effectivity,
and in a mere supplement of the Official Gazette cannot satisfy the publication
requirement. This is not even substantial compliance. This was the manner, incidentally,
in which the General Appropriations Act for FY 1975, a presidential decree undeniably of
7
general applicability and interest, was "published" by the Marcos administration. The
evident purpose was to withhold rather than disclose information on this vital law.
Coming now to the original decision, it is true that only four justices were categorically
8
for publication in the Official Gazette and that six others felt that publication could be
9
made elsewhere as long as the people were sufficiently informed. One reserved his
10
vote and another merely acknowledged the need for due publication without
11
indicating where it should be made. It is therefore necessary for the present
membership of this Court to arrive at a clear consensus on this matter and to lay down a
binding decision supported by the necessary vote.
There is much to be said of the view that the publication need not be made in the
Official Gazette, considering its erratic releases and limited readership. Undoubtedly,
newspapers of general circulation could better perform the function of communicating,
the laws to the people as such periodicals are more easily available, have a wider
readership, and come out regularly. The trouble, though, is that this kind of publication
is not the one required or authorized by existing law. As far as we know, no amendment
has been made of Article 2 of the Civil Code. The Solicitor General has not pointed to
such a law, and we have no information that it exists. If it does, it obviously has not yet
been published.
At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal
or modify it if we find it impractical. That is not our function. That function belongs to
the legislature. Our task is merely to interpret and apply the law as conceived and
approved by the political departments of the government in accordance with the
prescribed procedure. Consequently, we have no choice but to pronounce that under
Article 2 of the Civil Code, the publication of laws must be made in the Official Gazett
and not elsewhere, as a requirement for their effectivity after fifteen days from such
publication or after a different period provided by the legislature.

We also hold that the publication must be made forthwith or at least as soon as
possible, to give effect to the law pursuant to the said Article 2. There is that possibility,
of course, although not suggested by the parties that a law could be rendered
unenforceable by a mere refusal of the executive, for whatever reason, to cause its
publication as required. This is a matter, however, that we do not need to examine at
this time.
Finally, the claim of the former Solicitor General that the instant motion is a request for
an advisory opinion is untenable, to say the least, and deserves no further comment.
The days of the secret laws and the unpublished decrees are over. This is once again an
open society, with all the acts of the government subject to public scrutiny and available
always to public cognizance. This has to be so if our country is to remain democratic,
with sovereignty residing in the people and all government authority emanating from
them.
Although they have delegated the power of legislation, they retain the authority to
review the work of their delegates and to ratify or reject it according to their lights,
through their freedom of expression and their right of suffrage. This they cannot do if
the acts of the legislature are concealed.
Laws must come out in the open in the clear light of the sun instead of skulking in the
shadows with their dark, deep secrets. Mysterious pronouncements and rumored rules
cannot be recognized as binding unless their existence and contents are confirmed by a
valid publication intended to make full disclosure and give proper notice to the people.
The furtive law is like a scabbarded saber that cannot feint parry or cut unless the naked
blade is drawn.
WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon
their approval, or as soon thereafter as possible, be published in full in the Official
Gazette, to become effective only after fifteen days from their publication, or on
another date specified by the legislature, in accordance with Article 2 of the Civil Code.
SO ORDERED.
Teehankee, C.J., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr., and
Paras, JJ., concur.

SECOND DIVISION
[G.R. No. 108461. October 21, 1996]
PHILIPPINE INTERNATIONAL TRADING CORPORATION, petitioners, vs. HON PRESIDING
JUDGE ZOSIMO Z. ANGELES, BRANCH 58, RTC, MAKATI; REMINGTON
INDUSTRIAL SALES CORPORATION; AND FIRESTONE CERAMIC,
INC., respondents.

f) Rules and Regulations relative to liquidation of unfulfilled Undertakings and expired

export credits (Annex Z, Supplemental Petition),
the foregoing being all null and void and unconstitutional; and,
2) Commanding respondent to approve forthwith all the pending applications of, and all
those that may hereafter be filed by, the petitioner and the Intervenor, free from and
without the requirements prescribed in a the above-mentioned issuance.

DECISION
TORRES, JR., J.:
The PHILIPPINE INTERNATIONAL TRADING CORPORATION (PITC, for brevity) filed
this Petition for Review on Certiorari, seeking the reversal of the Decision dated January
4, 1993of public respondent Hon. Zosimo Z. Angeles. Presiding Judge of the Regional
Trial Court of Makati, Branch 58, in civil Case No.92-158 entitled Remington Industrial
Sales Corporation, et. al. vs. Philippine Industrial Trading Corporation.
The said decision upheld the Petition for Prohibition and Mandamus of
REMINGTON INDUSTRIAL SALES CORPORATION (Remington, for brevity) and FIRESTONE
CERAMICS, INC. (Firestone, for brevity), and, in the process, declared as null and void
and unconstitutional, PITCs Administrative Order No. SOCPEC 89-08-01 and its
appurtenant regulations. The dispositive portion of the decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of Petitioner
and Intervenor and against the Respondent, as follows:
1) Enjoining the further implementation by the respondent of the following issuances
relative to the applications for importation of products from the Peoples Republic
of China, to wit:
a) Administrative Order No. SOCPEC 89-08-01 dated August 30, 1989 (Annex A,
Amended petition);
b) Prescribed Export Undertaking Form (Annex B, Id.);
c) Prescribed Importer-Exporter Agreement Form for non-exporter-importer (Annex
C, Id.);
d) Memorandum dated April 16, 1990 relative to amendments of Administrative Order
NO. SOCPEC 89-08-01 (Annex D, Id.);
e) Memorandum dated May 6, 1991 relative to Revised Schedule of Fees for the
processing of import applications (Annexes E, E-1., Ind.);

IT IS SO ORDERED."
The controversy springs from the issuance by the PITC of Administrative Order No.
[1]
SOCPEC 89-08-01, under which, applications to the PITC for importation from the
Peoples Republic of China (PROC. for brevity) must be accompanied by a viable and
confirmed Export Program of Philippine Products to PROC carried out by the importer
himself or through a tie-up with a legitimate importer in an amount equivalent to the
value of the importation from PROC being applied for, or, simply, at one is to one ratio.
Pertinent provisions of the questioned administrative order read:
3. COUNTERPART EXPORTS TO PROC
In addition to existing requirements for the processing of import application for goods
and commodities originating from PROC, it is declared that:
3.1 All applications covered by these rules must be accompanied by a viable and
confirmed EXPORT PROGRAM of Philippine products to PROC in an amount equivalent
to the value of the importation from PROC being applied for. Such export program must
be carried out and completed within six (6) months from date of approval of the Import
Application by PITC. PITC shall reject/deny any application for importation from PROC
without the accompanying export program mentioned above.
3.2 The EXPORT PROGRAM may be carried out by any of the following:
a. By the IMPORTER himself if he has the capabilities and facilities to carry out the
export of Philippine products to PROC in his own name; or
b. Through a tie-up between the IMPORTER and a legitimate exporter (of Philippine
products) who is willing to carry out the export commitments of the IMPORTER under
these rules. The tie-up shall not make the IMPORTER the exporter of the goods but shall
merely ensure that the importation sought to be approved is matched one-to-one (1:1)
[2]
in value with a corresponding export of Philippine Products to PROC.
3.3 EXPORT PROGRAM DOCUMENTS which are to be submitted by the importer
together with his Import Application are as follows:

a) Firm Contract, Sales Invoice or Letter of Credit.

5.1 All other requirements for importations of goods and commodities from PROC must
be complied with in addition to the above.

b) Export Performance Guarantee (See Article 4 hereof).

c) IMPORTER-EXPORTER AGREEMENT for non-exporter IMPORTER (PITC Form No. M1006). This form should be used if IMPORTER has a tie-up with an exporter for the
export of Philippine Products to PROC.
4. EXPORT GUARANTEE
To ensure that the export commitments of the IMPORTER are carried out in accordance
with these rules, all IMPORTERS concerned are required to submit an EXPORT
PERFORMANCE GUARANTEE (the Guarantee) at the time of filing of the Import
Application. The amount of the guarantee shall be as follows:
For essential commodities: 15% of the value of the imports applied for.
For other commodities: 50% of the value of the imports applied for.
4.1 The guarantee may be in the form of (i) a non-interest bearing cash deposit; (ii) Bank
hold-out in favor of PITC (PITC Form No. M-1007) or (iii) a Domestic Letter of Credit
(with all bank opening charges for account of Importer) opened in favor of PITC as
beneficiary.
4.2 The guarantee shall be made in favor of PITC and will be automatically forfeited in
favor of PITC, fully or partially, if the required export program is not completed by the
importer within six (6) months from date of approval of the Import Application.
4.3 Within the six (6) months period above stated, the IMPORTER is entitled to a (i)
refund of the cash deposited without interest; (ii) cancellation of the Bank holdout or
(iii) Cancellation of the Domestic Letter of Credit upon showing that he has completed
the export commitment pertaining to his importation and provided further that the
following documents are submitted to PITC:
a) Final Sales Invoice
b) Bill of lading or Airway bill
c) Bank Certificate of Inward remittance
d) PITC EXPORT APPLICATION FOR NO. M-1005
5. MISCELLANEOUS

5.2 PITC shall have the right to disapprove any and all import application not in
accordance with the rules and regulations herein prescribed.
5.3 Should the IMPORTER or any of his duly authorized representatives make any false
statements or fraudulent misrepresentations in the Import/Export Application, or falsify,
forge or simulate any document required under these rules and regulations, PITC is
authorized to reject all pending and future import/export applications of said IMPORTER
and/or disqualify said IMPORTER and/or disqualify said IMPORTER from doing any
business with SOCPEC through PITC.
Desiring to make importations from PROC, private respondents Remington and
Firestone, both domestic corporations, organized and existing under Philippines laws,
individually applied for authority to import from PROC with the petitioner, They were
granted such authority after satisfying the requirements for importers, and after they
executed respective undertakings to balance their importations from PROC with
corresponding export of Philippine products to PROC.
Private respondent Remington was allowed to import tools, machineries and other
similar goods. Firestones, on the other hand, imported Calcine Vauxite, which it used for
the manufacture of fire bricks, one of its products.
Subsequently, for failing to comply with their undertakings to submit export credits
equivalent to the value of their importations, further import applications were withheld
by petitioner PITC from private respondents, such that the latter both barred from
[3]
importing goods from PROC.
Consequently, Remington filed a Petition for Prohibition and Mandamus, with
prayer for issuance of Temporary Restraining Order and/or Writ of Preliminary
[4]
Injunction on January 20, 1992, against PITC in the RTC Makati Branch 58. The court
issued a Temporary Restraining Order on January 21, 1992, ordering PITC to cease from
[5]
exercising any power to process applications of goods from PROC. Hearings on the
application for writ of preliminary injunction ensued.
Private respondents Firestones was allowed to intervene in the petition on July 2,
[6]
1992, thus joining Remington in the latters charges against PITC. It specifically asserts
that the questioned Administrative Order is an undue restrictions of trade, and hence,
unconstitutional.
Upon trial, it was agreed that the evidence adduced upon the hearing on the
Preliminary Injunction was sufficient to completely adjudicate the case, thus, the parties
deemed it proper that the entire case be submitted for decision upon the evidence so
far presented.
[7]

The court rendered its Decision on January 4, 1992. The court ruled that PITCs
authority to process and approve applications for imports from SOCPEC and to issue

rules and regulations pursuant to LOI 444 and P.D. No. 1071, has already been repealed
by EO No. 133, issued on February 27, 1987 by President Aquino.
The court observed:
Given such obliteration and/or withdrawal of what used to be PITCs regulatory authority
under the Special provisions embodied in LOI 444 from the enumeration of powers that
it could exercise effective February 27, 1987 in virtue of Section 16 (d), EO No. 133, it
may now be successfully argued that the PITC can no longer exercise such specific
regulatory power in question conformably with the legal precept expresio unius est
exclusio alterius.
Moreover, the court continued, none of the Trade protocols of 1989, 1990 or
1991, has empowered the PITC, expressly or impliedly to formulate or promulgate the
assailed Administrative Order. This fact, makes the continued exercise by PITC of the
regulatory powers in question unworthy of judicial approval. Otherwise, it would be
sanctioning an undue exercise of legislative power vested solely in the Congress of
the Philippines by Section 1, Article VII of the 1987 Philippine Constitution.
The lower court stated that the subject Administrative Order and other similar
issuances by PITC suffer from serious constitutional infirmity, having been promulgated
in pursuance of an international agreement (the Memorandum of Agreement between
the Philippine and PROC), which has not been concurred in by at least 2/3 of all the
members of the Philippine Senate as required by Article VII, Section 21, of the 1987
Constitution, and therefore, null and void.
Section 21. No treaty or international agreement shall be valid and effective unless
concurred in by at least two-thirds of all the Members of the Senate.
Furthermore, the subject Administrative Order was issued in restraint of trade, in
violation of Sections 1 and 19, Article XII of the 1987 Constitution, which reads:
Section 1. The goals of the national economy are a more equitable distribution of
opportunities, income and wealth; a sustained increase in the amount of goods and
services produced by the nation for the benefit of the people; and, an expanding
productivity as the key to raising the equality of life for all, especially the
underprivileged.
Section 19. The State shall regulate or prohibit monopolies when the public interest so
requires. No combination is restraint of trade or unfair competition shall be allowed.
Lastly, the court declared the Administrative Order to be null and void, since the
same was not published, contrary to Article 2 of the New Civil Code which provides,
that:

Article 2. Laws shall take effect fifteen (15) days following the completion of their
publication in the Official Gazette, unless the law otherwise provides. xxx
[8]

Petitioner now comes to us on a Petition for Review on Certiorari, questioning

the courts decision particularly on the propriety of the lower courts declarations on the
validity of Administrative Order No. 89-08-01. The Court directed the respondents to file
their respective Comments.
Subsequent events transpired, however, which affect to some extent, the
submissions of the parties to the present petition.
Following President Fidel V. Ramos trip to Beijing, Peoples Republic
of China (PROC), from April 25 to 30, 1993, a new trade agreement was entered into
between the Philippines and PROC, encouraging liberalization of trade between the two
countries. In line therewith, on April 20, 1993, the President, through Chief Presidential
Legal Counsel Antonio T. Carpio, directed the Department of Trade and Industry and the
PITC to cease implementing Administrative Order No. SOCPEC 89-08-01, as amended by
[9]
PITC Board Resolution Nos. 92-01-05 and 92-03-08.
In the implementation of such order, PITC President Jose Luis U. Yulo, Jr. issued a
[10]
corporate Memorandum instructing that all import applications for the PROC filed
with the PITC as of April 20, 1993 shall no longer be covered by the trade balancing
program outlined in the Administrative Order.
Forthwith, the PITC allowed the private respondents to import anew from the
PROC, without being required to comply anymore with the lifted requirement of
[11]
balancing its imports with exports of Philippine products to PROC. In
[12]
its Constancia filed with the Court on November 22, 1993, Remington expressed its
desire to have the present action declared moot and academic considering the new
supervening developments. For its part, respondent Firestone made a
[13]
Manifestation in lieu of its Memorandum, informing the court of the aforesaid
developments of the new trade program of the Philippines with China, and prayed for
the courts early resolution of the action.
To support its submission that the present action is now moot and academic,
[14]
respondent Remington cites Executive Order No. 244, issued by President Ramos
on May 12, 1995.The Executive Order states:
WHEREAS, continued coverage of the Peoples Republic of China by letter of Instructions
No. 444 is no longer consistent with the countrys national interest, as coursing Republic
of the Philippines-Peoples Republic of China Trade through the Philippine International
Trading Corporation as provided for under Letter of Instructions No. 444 is becoming an
unnecessary barrier to trade;
NOW, THEREFORE, I FIDEL V. RAMOS, President of the Republic of the Philippines, by
virtue of the powers vested in me by law, do hereby order:

The Committee on Scientific and Technical Cooperation with Socialist Countries to

delete the Peoples Republic of China from the list of countries covered by Letter of
Instructions No. 444.

Undertake the processing and approval of all applications for export to or import from
the SOCPEC.
Pertinent provisions of the Letter of Instruction are herein reproduced:

th

Done in the City of Manila, this 12 day of May in the year of Our Lord, Nineteen
Hundred and Ninety-Five.
[15]

PITC filed its own Manifestation on December 15, 1993, wherein it adopted the
arguments raised in its Petition as its Memorandum. PITC disagrees with Remington on
the latters submission that the case has become moot and academic as a result of the
abrogation of Administrative Order SOCPEC No. 89-08-01, since respondent Remington
had incurred obligations to the petitioner consisting of charges for the 0.5% Counter
Export Development Service provided by PITC to Remington, which obligations remain
[16]
outstanding. The propriety of such charges must still be resolved, petitioner argues,
thereby maintaining the issue of the validity of SOCPEC Order No. 89-08-01, before it
was abrogated by Executive fiat.
There is no question that from April 20, 1993, when trade balancing measures with
PROC were lifted by the President, Administrative Order SOCPEC No. 89-08-01 no longer
has force and effect, and respondents are thus entitled anew to apply for authority to
import from the PROC, without the trade balancing requirements previously imposed on
proposed importers.Indeed, it appears that since the lifting of the trade balancing
measures, Remington had been allowed to import anew from PROC.
There remains, however, the matter of outstanding obligations of the respondents
for the charges relating to the 0.5% Counter Export Development Service in favor of
PITC, for the period when the questioned Administrative Order remained in effect. Is
the obligation still subsisting, or are the respondents freed from it?
To resolve this issue, we are tasked to consider the constitutionality of
Administrative Order No. SOCPEC 89-08-01, based on the arguments set up by the
parties in their Petition and Comment. In so doing, we must inquire into the nature of
the functions of the PITC, in the light of present realities.
The PITC is a government owned or controlled corporation created under P.D. No.
[17]
[18]
252 dated August 6, 1973. P.D. No. 1071, issued on May 9, 1977 which revised the
provisions of P.D. 252. The purposes and powers of said governmental entity were
[19]
enumerated under Section 5 and 6 thereof.
On August 9, 1976, the late President Marcos issued Letter of Instruction (LOI) No.
[20]
444, directing, inter alia, that trade (export or import of all commodities), whether
direct or indirect, between the Philippines and any of the Socialist and other Centrally
Planned Economy Countries (SOCPEC), including the Peoples Republic of China (PROC)
shall be undertaken or coursed through the PITC. Under the LOI, PITC was mandated to:
1) participate in all official trade and economic discussions between the Philippines and
SOCPEC; 2) adopt such measures and issue such rules and regulations as may be
necessary for the effective discharge of its functions under its instructions; and 3)

LETTER OF INSTRUCTION 444

xxx
II. CHANNELS OF TRADE
1. The trade, direct or indirect, between the Philippines and any of the Socialist
and other centrally-planned economy countries shall upon issuance hereof, be
undertaken by or coursed through the Philippine International Trading
Corporation. This shall apply to the export and import of all commodities of
products including those specified for export or import by expressly authorized
government agencies.
xxx
4. The Philippine International Trading Corporation shall participate in all official
trade and economic discussions between the Philippines and other centrallyplanned economy countries.
xxx
V. SPECIAL PROVISIONS
The Philippine International Trading Corporation shall adopt such measures and
issue such rules and regulations as may be necessary for the effective discharge of
its functions under these instructions. In this connection, the processing and
approval of applications for export to or import from the Socialist and other
centrally-planned economy countries shall, henceforth, be performed by the said
Corporation. (Emphasis ours)
After the EDSA Revolution, or more specifically on February 27, 1987, then
[21]
President Corazon C. Aquino promulgated Executive Order (EO) No. 133 reorganizing
the Department of Trade and Industry (DTI) empowering the said department to be the
"primary coordinative, promotive, facilitative and regulatory arm of the government for
the countrys trade, industry and investment activities (Sec. 2, EO 133). The PITC was
[22]
made one of DTIs line agencies.
The Executive Order reads in part:
EXECUTIVE ORDER NO. 133

XXX

issuances being executive directives. As observed by us in Philippine Association of

[26]
Service Exporters , Inc. vs. Torres,

Section 16. Line Corporate Agencies and Government Entities.

The following line corporate agencies and government entities defined in Section 9 (c) of
this Executive Order that will perform their specific regulatory functions, particularly
developmental responsibilities and specialized business activities in a manner consonant
with the Department mandate, objectives, policies, plans and programs:
xxx
d) Philippine International Trading Corporation. This corporation, which shall be
supervised by the Undersecretary for International Trade, shall only engage in both
export and trading on new or non-traditional products and markets not normally
pursued by the private business sector; provide a wide range of export oriented
auxiliary services to the private sector; arrange for a establish comprehensive system
and physical facilities for handling the collection, processing, and distribution of cargoes
and other commodities; monitor or coordinate risk insurance services for the existing
institutions; promote and organize, whenever warranted, production enterprises and
industrial establishments and collaborate or associate in joint venture with any person,
association, company or entity, whether domestic or foreign, in the fields of production,
marketing, procurement, and other relate businesses; and provide technical advisory,
investigatory, consultancy and management services with respect to any and all of the
functions, activities, and operations of the corporation.
Sometime in April, 1988, following the State visit of President Aquino to the PROC,
[23]
the Philippines and PROC entered into a memorandum of Understanding (MOU)
wherein the two countries agreed to make joint efforts within the next five years to
expand bilateral trade to US $600 US $800 Million by 1992, and to strive for a steady
progress towards achieving a balance between the value of their imports and exports
during the period, agreeing for the purpose that upon the signing of the Memorandum,
both sides shall undertake to establish the necessary steps and procedures to be
adopted within the framework of the annual midyear review meeting under the Trade
Protocol, in order to monitor and ensure the implementation of the MOU.
Conformably with the MOU, the Philippines and PROC entered into a Trade
[24]
Protocol for the years 1989, 1990 and 1991, under which was specified the
commodities to be traded between them. The protocols affirmed their agreement to
jointly endeavor to achieve more or less a balance between the values of their imports
and exports in their bilateral trade.
It is allegedly in line with its powers under LOI 444 and in keeping with the MOU
and Trade Protocols with PROC that PITC issued its now assailed Administrative Order
[25]
No. SOCPEC 89-08-01 on August 30, 1989 (amended in March, 1992).
Undoubtedly, President Aquino, in issuing EO 133, is empowered to modify and
amend the provisions of LOI 444, which was issued by then President Marcos, both

there is no need for legislative delegation of power to the President to revoke the Letter
of Instruction by way of an Executive Order. This is notwithstanding the fact that the
subject LOI 1190 was issued by President Marcos, when he was extraordinarily
empowered to exercise legislative powers, whereas EO 450 was issued by Pres. Aquino
when her transitional legislative powers have already ceased, since it was found that LOI
1190 was a mere administrative directive, hence, may be repealed, altered, or modified
by EO 450.
We do not agree, however, with the trial courts ruling that PITCs authority to issue
rules and regulations pursuant to the Special Provisions of LOI 444 and P.D. No. 1071,
have already been repealed by EO 133.
While PITCs power to engage in commercial import and export activities is
expressly recognized and allowed under Section 16 (d) of EO 133, the same is now
limited only to new or non-traditional products and markets not normally pursued by
the private business sector. There is no indication in the law of the removal of the
powers of the PITC to exercise its regulatory functions in the area of importations from
SOCPEC countries. Though it does not mention the grant of regulatory power, EO 133,
as worded, is silent as to the abolition or limitation of such powers, previously granted
under P.D. 1071, from the PITC.
Likewise, the general repealing clause in EO 133 stating that all laws, ordinances,
rules , and regulations, or other parts thereof, which are inconsistent with the Executive
Order are hereby repealed or modified accordingly, cannot operate to abolish the grant
of regulatory powers to the PITC. There can be no repeal of the said powers, absent any
cogency of irreconcilable inconsistency or repugnancy between the issuances, relating
to the regulatory power of the PITC.
The President, in promulgating EO 133, had not intended to overhaul the functions
of the PITC. The DTI was established, and was given powers and duties including those
previously held by the PITC as an independent government entity, under P.D. 1071 and
LOI 444. The PITC was thereby attached to the DTI as an implementing arm of the said
department.
EO 133 established the DTI as the primary coordinative, promotive, facilitative and
regulatory arm of government for the countrys trade, industry and investment activities,
which shall act as a catalyst for intensified private sector activity in order to accelerate
[27]
and sustain economic growth. In furtherance of this mandate, the DTI was
empowered, among others, to plan, implement, and coordinate activities of the
government related to trade industry and investments; to formulate and administer
policies and guidelines for the investment priorities plan and the delivery of investment
incentives; to formulate country and product export strategies which will guide the
[28]
export promotion and development thrust of the government. Corollarily, the
Secretary of Trade and Industry is given the power to promulgate rules and regulations

necessary to carry out the departments objectives, policies, plans, programs and
projects.

exercisable only by our regular courts. (Antipolo Realty Corporation vs. National Housing
Authority, G.R. No. L- 50444, August 31, 1987, 153 SCRA 399).

The PITC, on the other hand, was attached as an integral part to the said
[29]
department as one of its line agencies, and was given the focal task of implementing
[30]
the departments programs. The absence of the regulatory power formerly enshrined
in the Special Provisions of LOI 444, from Section 16 of EO 133, and the limitation of its
previously wide range of functions, is noted. This does not mean, however, that PITC has
lost the authority to issue the questioned Administrative Order. It is our view that PITC
still holds such authority, and may legally exercise it, as an implementing arm, and under
the supervision of, the Department of Trade and Industry.

With global trade and business becoming more intricate nay even with new
discoveries in technology and electronics notwithstanding, the time has come to grapple
with legislations and even judicial decisions aimed at resolving issues affecting not only
individual rights but also activities of which foreign governments or entities may have
interests. Thus, administrative policies and regulations must be devised to suit these
changing business needs in a faster rate than to resort to traditional acts of the
legislature.

Furthermore, the lower courts ruling to the effect that the PITCs authority to
process and approve applications for imports from SOCPEC and to issue rules and
regulations pursuant to LOI 444 and P.D. 1071 has been repealed by EO 133, is
misplaced, and did not consider the import behind the issuance of the later presidential
edict.
The President could not have intended to deprive herself of the power to regulate
the flow of trade between the Philippines and PROC under the two countries
Memorandum of Understanding, a power which necessarily flows from her office as
Chief Executive. In issuing Executive Order 133, the President intended merely to
reorganize the Department of Trade and Industry to cope with the need of streamlined
[31]
bureaucracy.
Thus, there is no real inconsistency between LOI 444 and EO 133. There is,
admittedly, a rearranging of the administrative functions among the administrative
bodies affected by the edict, but not an abolition of executive power. Consistency in
statutes as in executive issuances, is of prime importance, and, in the absence of a
showing to the contrary, all laws are presumed to be consistent with each other. Where
it is possible to do so, it is the duty of courts, in the construction of statutes, to
harmonize and reconcile them, and to adopt a constructions of a statutory provision
[32]
which harmonizes and reconciles it with other statutory provisions. The fact that a
later enactment may relate to the same subject matter as that of an earlier statute is
not of itself sufficient to cause an implied repeal of the latter, since the law may be
[33]
cumulative or a continuation of the old one.
Similarly, the grant of quasi-legislative powers in administrative bodies is not
unconstitutional. Thus, as a result of the growing complexity of the modern society, it
has become necessary to create more and more administrative bodies to help in the
regulation of its ramified activities. Specialized in the particular field assigned to them,
they can deal with the problems thereof with more expertise and dispatch than can be
expected from the legislature or the courts of justice. This is the reason for the
increasing vesture of quasi-legislative and quasi-judicial powers in what is now not
[34]
unreasonably called the fourth department of the government. Evidently, in the
exercise of such powers, the agency concerned must commonly interpret and apply
contracts and determine the rights of private parties under such contracts. One thrust of
the multiplication of administrative agencies is that the interpretation of contracts and
the determination of private rights thereunder is no longer uniquely judicial function,

This tendency finds support in a well-stated work on the subject, viz.:

Since legislatures had neither the time nor the knowledge to create detailed rules,
however, it was soon clear that new governmental arrangements would be needed to
handle the job of rule-making. The courts, moreover, many of them already congested,
would have been swamped if they had to adjudicate all the controversies that the new
legislation was bound to create; and the judges, already obliged to handle a great
diversity of cases, would have been hard pressed to acquire the knowledge they needed
to deal intelligently with all the new types of controversy.
So the need to create a large number of specialized administrative agencies and to give
them broader powers than administrators had traditionally exercised. These included
the power to issue regulations having the force of law, and the power to hear and
decide cases powers that had previously been reserved to the legislatures and the
courts. (Houghteling/Pierce, Lawmaking by Administrative Agencies, p. 166.)
The respondents likewise argue that PITC is not empowered to issue the
Administrative Order because no grant of such power was made under the Trade
Protocols of 1989, 1990 or 1991. We do not agree. The Trade Protocols aforesaid, are
only the enumeration of the products and goods which the signatory countries have
agreed to trade. They do not bestow any regulatory power, for executive power is
[35]
vested in the Executive Department, and it is for the latter to delegate the exercise of
such power among its designated agencies.
In sum, the PITC was legally empowered to issue Administrative Orders, as a valid
exercise of a power ancillary to legislation.
This does not imply however, that the subject Administrative Order is a valid
exercise of such quasi-legislative power. The original Administrative Order issued
on August 30, 1989, under which the respondents filed their applications for
importations, was not published in the Official Gazette or in a newspaper of general
circulation. The questioned Administrative Order, legally, until it is published, is invalid
within the context of Article 2 of Civil Code, which reads:
Article 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette (or in a newspaper of general circulation in
the Philippines), unless it is otherwise provided. xxx

The fact that the amendments to Administrative Order No. SOCPEC 89-08-01 were
filed with, and published by the UP Law Center in the National Administrative Register,
does not cure the defect related to the effectivity of the Administrative Order.
This court, in Tanada vs. Tuvera

[36]

stated, thus:

We hold therefore that all statutes, including those of local application and private laws,
shall be published as a condition for their effectivity, which shall begin fifteen days after
publication unless a different effectivity is fixed by the legislature.
Covered by this rule are presidential decrees and executive orders promulgated by the
President in the exercise of legislative powers or, at present, directly conferred by the
Constitution. Administrative rules and Regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid delegation,
Interpretative regulations and those merely internal in nature, that is, regulating only
the personnel of the administrative agency and not the public, need not be
published. Neither is publication required of the so-called letters of instructions issued
by administrative superiors concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.
xxx

Conformably with such avowed policy, any remnant of the restrained atmosphere
of trading between the Philippines and PROC should be done away with, so as to allow
economic growth and renewed trade relations with our neighbors to flourish and may
be encouraged.
ACCORDINGLY, the assailed decision of the lower court is hereby AFFIRMED, to the
effect that judgment is hereby rendered in favor of the private respondents, subject to
the following MODIFICATIONS:
1) Enjoining the petitioner:
a) From further charging the petitioners the Counter Export Development Service fee of
0.5% of the total value of the unliquidated or unfulfilled Undertakings of the private
respondents;
b) From further implementing the provisions of Administrative Order No. SOCPEC 89-0801 and its appurtenant rules; and
2) Requiring petitioner to approve forthwith all the pending applications of,
and all those that may hereafter be filed by, the petitioner and the
Intervenor, free from and without complying with the requirements
prescribed in the above-stated issuances.
SO ORDERED

We agree that the publication must be in full or it is no publication at all since its
purpose is to inform the public of the contents of the laws.
The Administrative Order under consideration is one of those issuances which
should be published for its effectivity, since its purpose is to enforce and implement an
existing law pursuant to a valid delegation, i.e., P.D. 1071, in relation to LOI 444 and EO
133.
Thus, even before the trade balancing measures issued by the petitioner were
lifted by President Fidel V. Ramos, the same were never legally effective, and private
respondents, therefore, cannot be made subject to them, because Administrative Order
89-08-01 embodying the same was never published, as mandated by law, for its
effectivity. It was only on March 30, 1992 when the amendments to the said
Administrative Order were filed in the UP Law Center, and published in the National
Administrative Register as required by the Administrative Code of 1987.
Finally, it is the declared Policy of the Government to develop and strengthen
trade relations with the Peoples Republic of China. As declared by the President in EO
244 issued on May 12, 1995, continued coverage of the Peoples Republic of China by
Letter of Instructions No. 444 is no longer consistent with the countrys national interest,
as coursing RP-PROC trade through the PITC as provided for under Letter of Instructions
[37]
No. 444 is becoming an unnecessary barrier to trade.

Regalado (Chairman), Romero, Puno, and Mendoza, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 147096

January 15, 2002

REPUBLIC OF THE PHILIPPINES, represented by NATIONAL TELECOMMUNICATIONS

COMMISSION,petitioner,
vs.
EXPRESS TELECOMMUNICATION CO., INC. and BAYAN TELECOMMUNICATIONS CO.,
INC., respondents.

In view of the recent grant of two (2) separate Provisional Authorities

in favor of ISLACOM and GMCR, Inc., which resulted in the closing out
of all available frequencies for the service being applied for by herein
applicant, and in order that this case may not remain pending for an
indefinite period of time, AS PRAYED FOR, let this case be, as it is,
hereby ordered ARCHIVED without prejudice to its reinstatement if
and when the requisite frequency becomes available.
SO ORDERED.

On June 18, 1998, the NTC issued Memorandum Circular No. 5-6-98 re-allocating five (5)
megahertz (MHz) of the radio frequency spectrum for the expansion of CMTS networks.
The re-allocated 5 MHz were taken from the following bands: 1730-1732.5 / 18255
1827.5 MHz and 1732.5-1735 / 1827.5-1830 MHz.

x---------------------------------------------------------x
G.R. No. 147210

January 15, 2002

BAYAN TELECOMMUNICATIONS (Bayantel), INC., petitioner,

vs.
EXPRESS TELECOMMUNICATION CO., INC. (Extelcom), respondent.
YNARES-SANTIAGO, J.:
On December 29, 1992, International Communications Corporation (now Bayan
Telecommunications, Inc. or Bayantel) filed an application with the National
Telecommunications Commission (NTC) for a Certificate of Public Convenience or
Necessity (CPCN) to install, operate and maintain a digital Cellular Mobile Telephone
System/Service (CMTS) with prayer for a Provisional Authority (PA). The application was
1
docketed as NTC Case No. 92-486.
Shortly thereafter, or on January 22, 1993, the NTC issued Memorandum Circular No. 41-93 directing all interested applicants for nationwide or regional CMTS to file their
respective applications before the Commission on or before February 15, 1993, and
2
deferring the acceptance of any application filed after said date until further orders.
On May 6, 1993, and prior to the issuance of any notice of hearing by the NTC with
respect to Bayantel's original application, Bayantel filed an urgent ex-parte motion to
3
admit an amended application. On May 17, 1993, the notice of hearing issued by the
NTC with respect to this amended application was published in the Manila Chronicle.
Copies of the application as well as the notice of hearing were mailed to all affected
parties. Subsequently, hearings were conducted on the amended application. But
before Bayantel could complete the presentation of its evidence, the NTC issued an
Order dated December 19, 1993 stating:

Likewise, on March 23, 1999, Memorandum Circular No. 3-3-99 was issued by the NTC
re-allocating an additional five (5) MHz frequencies for CMTS service, namely: 17351737.5 / 1830-1832.5 MHz; 1737.5-1740 / 1832.5-1835 MHz; 1740-1742.5 / 18356
1837.5 MHz; and 1742.5-1745 / 1837.5-1840 MHz.
7

On May 17, 1999, Bayantel filed an Ex-Parte Motion to Revive Case, citing the
availability of new frequency bands for CMTS operators, as provided for under
Memorandum Circular No. 3-3-99.
On February 1, 2000, the NTC granted BayanTel's motion to revive the latter's
8
application and set the case for hearings on February 9, 10, 15, 17 and 22, 2000. The
NTC noted that the application was ordered archived without prejudice to its
reinstatement if and when the requisite frequency shall become available.
Respondent Express Telecommunication Co., Inc. (Extelcom) filed in NTC Case No. 92486 an Opposition (With Motion to Dismiss) praying for the dismissal of Bayantel's
9
application. Extelcom argued that Bayantel's motion sought the revival of an archived
application filed almost eight (8) years ago. Thus, the documentary evidence and the
allegations of respondent Bayantel in this application are all outdated and should no
longer be used as basis of the necessity for the proposed CMTS service. Moreover,
Extelcom alleged that there was no public need for the service applied for by Bayantel
as the present five CMTS operators --- Extelcom, Globe Telecom, Inc., Smart
Communication, Inc., Pilipino Telephone Corporation, and Isla Communication
Corporation, Inc. --- more than adequately addressed the market demand, and all are in
the process of enhancing and expanding their respective networks based on recent
technological developments. 1wphi1.nt
Extelcom likewise contended that there were no available radio frequencies that could
accommodate a new CMTS operator as the frequency bands allocated in NTC
Memorandum Circular No. 3-3-99 were intended for and had in fact been applied for by
the existing CMTS operators. The NTC, in its Memorandum Circular No. 4-1-93, declared

it its policy to defer the acceptance of any application for CMTS. All the frequency bands
allocated for CMTS use under the NTC's Memorandum Circular No. 5-11-88 and
Memorandum Circular No. 2-12-92 had already been allocated to the existing CMTS
operators. Finally, Extelcom pointed out that Bayantel is its substantial stockholder to
the extent of about 46% of its outstanding capital stock, and Bayantel's application
undermines the very operations of Extelcom.
10

On March 13, 2000, Bayantel filed a Consolidated Reply/Comment, stating that the
opposition was actually a motion seeking a reconsideration of the NTC Order reviving
the instant application, and thus cannot dwell on the material allegations or the merits
of the case. Furthermore, Extelcom cannot claim that frequencies were not available
inasmuch as the allocation and assignment thereof rest solely on the discretion of the
NTC.
In the meantime, the NTC issued on March 9, 2000 Memorandum Circular No. 9-3-2000,
re-allocating the following radio frequency bands for assignment to existing CMTS
operators and to public telecommunication entities which shall be authorized to install,
operate and maintain CMTS networks, namely: 1745-1750MHz / 1840-1845MHz; 17501775MHz / 1845-1850MHz; 1765-1770MHz / 1860-1865MHz; and 1770-1775MHz /
11
1865-1870MHz.
On May 3, 2000, the NTC issued an Order granting in favor of Bayantel a provisional
12
authority to operate CMTS service. The Order stated in pertinent part:

moment, so long as the oppositors are given the opportunity to be

later heard and present the merits of their respective oppositions in
the proceedings.
On the allegation that the instant application is already obsolete and
overtaken by developments, the issue is whether applicant has the
legal, financial and technical capacity to undertake the proposed
project. The determination of such capacity lies solely within the
discretion of the Commission, through its applicable rules and
regulations. At any rate, the oppositors are not precluded from
showing evidence disputing such capacity in the proceedings at hand.
On the alleged non-availability of frequencies for the proposed service
in view of the pending applications for the same, the Commission
takes note that it has issued Memorandum Circular 9-3-2000,
allocating additional frequencies for CMTS. The eligibility of existing
operators who applied for additional frequencies shall be treated and
resolved in their respective applications, and are not in issue in the
case at hand.
Accordingly, the Motions for Reconsideration filed by SMARTCOM and
GLOBE TELECOMS/ISLACOM and the Motion to Dismiss filed by
13
EXTELCOM are hereby DENIED for lack of merit.
The grant of the provisional authority was anchored on the following findings:

On the issue of legal capacity on the part of Bayantel, this Commission

has already taken notice of the change in name of International
Communications Corporation to Bayan Telecommunications, Inc. Thus,
in the Decision entered in NTC Case No. 93-284/94-200 dated 19 July
1999, it was recognized that Bayan Telecommunications, Inc., was
formerly named International Communications Corp. Bayantel and ICC
Telecoms, Inc. are one and the same entity, and it necessarily follows
that what legal capacity ICC Telecoms has or has acquired is also the
legal capacity that Bayantel possesses.
On the allegation that the Commission has committed an error in
allowing the revival of the instant application, it appears that the
Order dated 14 December 1993 archiving the same was anchored on
the non-availability of frequencies for CMTS. In the same Order, it was
expressly stated that the archival hereof, shall be without prejudice to
its reinstatement "if and when the requisite frequency becomes
available." Inherent in the said Order is the prerogative of the
Commission in reviving the same, subject to prevailing conditions. The
Order of 1 February 2001, cited the availability of frequencies for
CMTS, and based thereon, the Commission, exercising its prerogative,
revived and reinstated the instant application. The fact that the
motion for revival hereof was made ex-parte by the applicant is of no

COMMENTS:
1. Due to the operational mergers between Smart Communications,
Inc. and Pilipino Telephone Corporation (Piltel) and between Globe
Telecom, Inc. (Globe) and Isla Communications, Inc. (Islacom), free and
effective competition in the CMTS market is threatened. The fifth
operator, Extelcom, cannot provide good competition in as much as it
provides service using the analog AMPS. The GSM system dominates
the market.
2. There are at present two applicants for the assignment of the
frequencies in the 1.7 Ghz and 1.8 Ghz allocated to CMTS, namely
Globe and Extelcom. Based on the number of subscribers Extelcom
has, there appears to be no congestion in its network - a condition
that is necessary for an applicant to be assigned additional
frequencies. Globe has yet to prove that there is congestion in its
network considering its operational merger with Islacom.
3. Based on the reports submitted to the Commission, 48% of the total
number of cities and municipalities are still without telephone service

despite the more than 3 million installed lines waiting to be

subscribed.
CONCLUSIONS:
1. To ensure effective competition in the CMTS market considering the
operational merger of some of the CMTS operators, new CMTS
operators must be allowed to provide the service.
2. The re-allocated frequencies for CMTS of 3 blocks of 5 Mhz x 2 is
sufficient for the number of applicants should the applicants be
qualified.
3. There is a need to provide service to some or all of the remaining
cities and municipalities without telephone service.
4. The submitted documents are sufficient to determine compliance to
the technical requirements. The applicant can be directed to submit
details such as channeling plans, exact locations of cell sites, etc. as
the project implementation progresses, actual area coverage
ascertained and traffic data are made available. Applicant appears to
be technically qualified to undertake the proposed project and offer
the proposed service.
IN VIEW OF THE FOREGOING and considering that there is prima facie
evidence to show that Applicant is legally, technically and financially
qualified and that the proposed service is technically feasible and
economically viable, in the interest of public service, and in order to
facilitate the development of telecommunications services in all areas
of the country, as well as to ensure healthy competition among
authorized CMTS providers, let a PROVISIONAL AUTHORITY (P.A.) be
issued to Applicant BAYAN TELECOMMUNICATIONS, INC. authorizing
it to construct, install, operate and maintain a Nationwide Cellular
Mobile Telephone Systems (CMTS), subject to the following terms
and conditions without prejudice to a final decision after completion
of the hearing which shall be called within thirty (30) days from grant
of authority, in accordance with Section 3, Rule 15, Part IV of the
14
Commission's Rules of Practice and Procedure. xxx.
Extelcom filed with the Court of Appeals a petition for certiorari and
15
prohibition, docketed as CA-G.R. SP No. 58893, seeking the annulment of the Order
reviving the application of Bayantel, the Order granting Bayantel a provisional authority
to construct, install, operate and maintain a nationwide CMTS, and Memorandum
Circular No. 9-3-2000 allocating frequency bands to new public telecommunication
entities which are authorized to install, operate and maintain CMTS.

16

On September 13, 2000, the Court of Appeals rendered the assailed Decision, the
dispositive portion of which reads:
WHEREFORE, the writs of certiorari and prohibition prayed for
are GRANTED. The Orders of public respondent dated February 1,
2000 and May 3, 2000 in NTC Case No. 92-486 are hereby ANNULLED
and SET ASIDE and the Amended Application of respondent Bayantel
is DISMISSED without prejudice to the filing of a new CMTS
application. The writ of preliminary injunction issued under our
Resolution dated August 15, 2000, restraining and enjoining the
respondents from enforcing the Orders dated February 1, 2000 and
May 3, 2000 in the said NTC case is hereby made permanent. The
Motion for Reconsideration of respondent Bayantel dated August 28,
2000 is denied for lack of merit.
SO ORDERED.

17

18

Bayantel filed a motion for reconsideration of the above decision. The NTC,
represented by the Office of the Solicitor General (OSG), also filed its own motion for
19
reconsideration. On the other hand, Extelcom filed a Motion for Partial
Reconsideration, praying that NTC Memorandum Circular No. 9-3-2000 be also declared
20
null and void.
On February 9, 2001, the Court of Appeals issued the assailed Resolution denying all of
21
the motions for reconsideration of the parties for lack of merit.
Hence, the NTC filed the instant petition for review on certiorari, docketed as G.R. No.
147096, raising the following issues for resolution of this Court:
A. Whether or not the Order dated February 1, 2000 of the petitioner
which revived the application of respondent Bayantel in NTC Case No.
92-486 violated respondent Extelcom's right to procedural due
process of law;
B. Whether or not the Order dated May 3, 2000 of the petitioner
granting respondent Bayantel a provisional authority to operate a
CMTS is in substantial compliance with NTC Rules of Practice and
Procedure and Memorandum Circular No. 9-14-90 dated September 4,
22
1990.
Subsequently, Bayantel also filed its petition for review, docketed as G.R. No. 147210,
assigning the following errors:
I. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS INTERPRETATION
OF THE PRINCIPLE OF "EXHAUSTION OF ADMINISTRATIVE REMEDIES"

WHEN IT FAILED TO DISMISS HEREIN RESPONDENT'S PETITION FOR

CERTIORARI DESPITE ITS FAILURE TO FILE A MOTION FOR
RECONSIDERATION.

IX. THE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT

THE MAY 3, 2000 ORDER GRANTING BAYANTEL A PROVISIONAL
AUTHORITY SHOULD BE SET ASIDE AND REVERSED.

II. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS FINDING THAT

THE REVIVAL OF NTC CASE NO. 92-486 ANCHORED ON A EX-PARTE
MOTION TO REVIVE CASE WAS TANTAMOUNT TO GRAVE ABUSE OF
DISCRETION ON THE PART OF THE NTC.

i. Contrary to the finding of the Court of Appeals, there was no

violation of the NTC Rule that the legal, technical, financial and
economic documentations in support of the prayer for provisional
authority should first be submitted.

III. THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT DENIED THE

MANDATE OF THE NTC AS THE AGENCY OF GOVERNMENT WITH THE
SOLE DISCRETION REGARDING ALLOCATION OF FREQUENCY BAND TO
TELECOMMUNICATIONS ENTITIES.

ii. Contrary to the finding of the Court of Appeals, there was no

violation of Sec. 3, Rule 15 of the NTC Rules of Practice and Procedure
that a motion must first be filed before a provisional authority could
be issued.

IV. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS INTERPRETATION

OF THE LEGAL PRINCIPLE THAT JURISDICTION ONCE ACQUIRED
CANNOT BE LOST WHEN IT DECLARED THAT THE ARCHIVED
APPLICATION SHOULD BE DEEMED AS A NEW APPLICATION IN VIEW
OF THE SUBSTANTIAL CHANGE IN THE CIRCUMSTANCES ALLEGED IN
ITS AMENDMENT APPLICATION.

iii. Contrary to the finding of the Court of Appeals that a plea for
provisional authority necessitates a notice and hearing, the very rule
cited by the petitioner (Section 5, Rule 4 of the NTC Rules of Practice
and Procedure) provides otherwise.

V. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE

ARCHIVING OF THE BAYANTEL APPLICATION WAS A VALID ACT ON THE
PART OF THE NTC EVEN IN THE ABSENCE OF A SPECIFIC RULE ON
ARCHIVING OF CASES SINCE RULES OF PROCEDURE ARE, AS A MATTER
OF COURSE, LIBERALLY CONSTRUED IN PROCEEDINGS BEFORE
ADMINISTRATIVE BODIES AND SHOULD GIVE WAY TO THE GREATER
HIERARCHY OF PUBLIC WELFARE AND PUBLIC INTEREST.
VI. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE
ARCHIVING OF BAYANTEL'S APPLICATION WAS NOT VIOLATIVE OF THE
SUMMARY NATURE OF THE PROCEEDINGS IN THE NTC UNDER SEC. 3,
RULE 1 OF THE NTC REVISED RULES OF PROCEDURE.
VII. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS FINDING THAT
THE ARCHIVING OF BAYANTEL'S APPLICATION WAS VIOLATIVE OF THE
ALLEGED DECLARED POLICY OF THE GOVERNMENT ON THE
TRANSPARENCY AND FAIRNESS OF ADMINISTRATIVE PROCESS IN THE
NTC AS LAID DOWN IN SEC 4(1) OF R.A. NO. 7925.
VIII. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS FINDING THAT
THE NTC VIOLATED THE PROVISIONS OF THE CONSTITUTION
PERTAINING TO DUE PROCESS OF LAW.

iv. Contrary to the finding of the Court of Appeals, urgent public need
is not the only basis for the grant of a provisional authority to an
applicant;
v. Contrary to the finding of the Court of Appeals, there was no
violation of the constitutional provision on the right of the public to
information when the Common Carrier Authorization Department
23
(CCAD) prepared its evaluation report.
Considering the identity of the matters involved, this Court resolved to consolidate the
24
two petitions.
At the outset, it is well to discuss the nature and functions of the NTC, and analyze its
powers and authority as well as the laws, rules and regulations that govern its existence
and operations.
The NTC was created pursuant to Executive Order No. 546, promulgated on July 23,
1979. It assumed the functions formerly assigned to the Board of Communications and
the Telecommunications Control Bureau, which were both abolished under the said
Executive Order. Previously, the NTC's functions were merely those of the defunct
Public Service Commission (PSC), created under Commonwealth Act No. 146, as
amended, otherwise known as the Public Service Act, considering that the Board of
Communications was the successor-in-interest of the PSC. Under Executive Order No.
125-A, issued in April 1987, the NTC became an attached agency of the Department of
Transportation and Communications.

In the regulatory telecommunications industry, the NTC has the sole authority to issue
Certificates of Public Convenience and Necessity (CPCN) for the installation, operation,
and maintenance of communications facilities and services, radio communications
systems, telephone and telegraph systems. Such power includes the authority to
determine the areas of operations of applicants for telecommunications services.
Specifically, Section 16 of the Public Service Act authorizes the then PSC, upon notice
and hearing, to issue Certificates of Public Convenience for the operation of public
services within the Philippines "whenever the Commission finds that the operation of
the public service proposed and the authorization to do business will promote the public
25
interests in a proper and suitable manner." The procedure governing the issuance of
such authorizations is set forth in Section 29 of the said Act, the pertinent portion of
which states:

operative act that gives the rules force and effect. Book VII, Chapter 2, Section 3 thereof
merely states:

All hearings and investigations before the Commission shall be

governed by rules adopted by the Commission, and in the conduct
thereof, the Commission shall not be bound by the technical rules of
legal evidence. xxx.

(3) A permanent register of all rules shall be kept by the issuing agency
and shall be open to public inspection.

In granting Bayantel the provisional authority to operate a CMTS, the NTC applied Rule
15, Section 3 of its 1978 Rules of Practice and Procedure, which provides:
Sec. 3. Provisional Relief. --- Upon the filing of an application,
complaint or petition or at any stage thereafter, the Board may grant
on motion of the pleader or on its own initiative, the relief prayed for,
based on the pleading, together with the affidavits and supporting
documents attached thereto, without prejudice to a final decision
after completion of the hearing which shall be called within thirty (30)
days from grant of authority asked for. (underscoring ours)
Respondent Extelcom, however, contends that the NTC should have applied the Revised
Rules which were filed with the Office of the National Administrative Register on
February 3, 1993. These Revised Rules deleted the phrase "on its own initiative;"
accordingly, a provisional authority may be issued only upon filing of the proper motion
before the Commission.
In answer to this argument, the NTC, through the Secretary of the Commission, issued a
certification to the effect that inasmuch as the 1993 Revised Rules have not been
published in a newspaper of general circulation, the NTC has been applying the 1978
Rules.
The absence of publication, coupled with the certification by the Commissioner of the
NTC stating that the NTC was still governed by the 1978 Rules, clearly indicate that the
1993 Revised Rules have not taken effect at the time of the grant of the provisional
authority to Bayantel. The fact that the 1993 Revised Rules were filed with the UP Law
Center on February 3, 1993 is of no moment. There is nothing in the Administrative
Code of 1987 which implies that the filing of the rules with the UP Law Center is the

Filing. --- (1) Every agency shall file with the University of the
Philippines Law Center three (3) certified copes of every rule adopted
by it. Rules in force on the date of effectivity of this Code which are
not filed within three (3) months from the date shall not thereafter be
the basis of any sanction against any party or persons.
(2) The records officer of the agency, or his equivalent functionary,
shall carry out the requirements of this section under pain or
disciplinary action.

The National Administrative Register is merely a bulletin of codified rules and it is

furnished only to the Office of the President, Congress, all appellate courts, the National
Library, other public offices or agencies as the Congress may select, and to other
26
persons at a price sufficient to cover publication and mailing or distribution costs. In a
similar case, we held:
This does not imply however, that the subject Administrative Order is
a valid exercise of such quasi-legislative power. The original
Administrative Order issued on August 30, 1989, under which the
respondents filed their applications for importations, was not
published in the Official Gazette or in a newspaper of general
circulation. The questioned Administrative Order, legally, until it is
published, is invalid within the context of Article 2 of Civil Code, which
reads:
"Article 2. Laws shall take effect after fifteen days following
the completion of their publication in the Official Gazette (or
in a newspaper of general circulation in the Philippines),
unless it is otherwise provided. x x x"
The fact that the amendments to Administrative Order No. SOCPEC
89-08-01 were filed with, and published by the UP Law Center in the
National Administrative Register, does not cure the defect related to
the effectivity of the Administrative Order.
This Court, in Taada vs. Tuvera (G.R. No. L-63915, December 29,
1986, 146 SCRA 446) stated, thus:

"We hold therefore that all statutes, including those of local

application and private laws, shall be published as a condition
for their effectivity, which shall begin fifteen days after
publication unless a different effectivity is fixed by the
legislature.
Covered by this rule are presidential decrees and executive
orders promulgated by the President in the exercise of
legislative power or, at present, directly conferred by the
Constitution. Administrative Rules and Regulations must also
be published if their purpose is to enforce or implement
existing law pursuant also to a valid delegation.
Interpretative regulations and those merely internal in
nature, that is, regulating only the personnel of the
administrative agency and not the public, need not be
published. Neither is publication required of the so-called
letters of instructions issued by administrative superiors
concerning the rules or guidelines to be followed by their
subordinates in the performance of their duties.

Our pronouncement in Taada vs. Tuvera is clear and categorical.

Administrative rules and regulations must be published if their
purpose is to enforce or implement existing law pursuant to a valid
delegation. The only exceptions are interpretative regulations, those
merely internal in nature, or those so-called letters of instructions
issued by administrative superiors concerning the rules and guidelines
to be followed by their subordinates in the performance of their
30
duties.
Hence, the 1993 Revised Rules should be published in the Official Gazette or in a
newspaper of general circulation before it can take effect. Even the 1993 Revised Rules
itself mandates that said Rules shall take effect only after their publication in a
31
newspaper of general circulation. In the absence of such publication, therefore, it is
the 1978 Rules that governs.
In any event, regardless of whether the 1978 Rules or the 1993 Revised Rules should
apply, the records show that the amended application filed by Bayantel in fact included
a motion for the issuance of a provisional authority. Hence, it cannot be said that the
NTC granted the provisional authority motu proprio. The Court of Appeals, therefore,
erred when it found that the NTC issued its Order of May 3, 2000 on its own initiative.
This much is acknowledged in the Decision of the Court of Appeals:

xxx
We agree that the publication must be in full or it is no
publication at all since its purpose is to inform the public of
the contents of the laws."
The Administrative Order under consideration is one of those
issuances which should be published for its effectivity, since its
purpose is to enforce and implement an existing law pursuant to a
27
valid delegation, i.e., P.D. 1071, in relation to LOI 444 and EO 133.
Thus, publication in the Official Gazette or a newspaper of general circulation is a
condition sine qua non before statutes, rules or regulations can take effect. This is
explicit from Executive Order No. 200, which repealed Article 2 of the Civil Code, and
which states that:

As prayer, ICC asked for the immediate grant of provisional authority

to construct, install, maintain and operate the subject service and to
charge the proposed rates and after due notice and hearing, approve
the instant application and grant the corresponding certificate of
32
public convenience and necessity.
The Court of Appeals also erred when it declared that the NTC's Order archiving
Bayantel's application was null and void. The archiving of cases is a widely accepted
measure designed to shelve cases in which no immediate action is expected but where
no grounds exist for their outright dismissal, albeit without prejudice. It saves the
petitioner or applicant from the added trouble and expense of re-filing a dismissed case.
Under this scheme, an inactive case is kept alive but held in abeyance until the situation
obtains wherein action thereon can be taken.

Laws shall take effect after fifteen days following the completion of
their publication either in the Official Gazette or in a newspaper of
28
general circulation in the Philippines, unless it is otherwise provided.

In the case at bar, the said application was ordered archived because of lack of available
frequencies at the time, and made subject to reinstatement upon availability of the
requisite frequency. To be sure, there was nothing irregular in the revival of the
application after the condition therefor was fulfilled.

The Rules of Practice and Procedure of the NTC, which implements Section 29 of the
Public Service Act (C.A. 146, as amended), fall squarely within the scope of these laws,
29
as explicitly mentioned in the case Taada v. Tuvera.

While, as held by the Court of Appeals, there are no clear provisions in the Rules of the
NTC which expressly allow the archiving of any application, this recourse may be
justified under Rule 1, Section 2 of the 1978 Rules, which states:

Sec. 2. Scope.--- These rules govern pleadings, practice and procedure

before the Board of Communications (now NTC) in all matters of
hearing, investigation and proceedings within the jurisdiction of the
Board. However, in the broader interest of justice and in order to best
serve the public interest, the Board may, in any particular matter,
except it from these rules and apply such suitable procedure to
improve the service in the transaction of the public
business. (underscoring ours)
The Court of Appeals ruled that the NTC committed grave abuse of discretion when it
revived Bayantel's application based on an ex-parte motion. In this regard, the pertinent
provisions of the NTC Rules:
Sec. 5. Ex-parte Motions. --- Except for motions for provisional
authorization of proposed services and increase of rates, exparte motions shall be acted upon by the Board only upon showing of
urgent necessity therefor and the right of the opposing party is not
33
substantially impaired.
Thus, in cases which do not involve either an application for rate increase or an
application for a provisional authority, the NTC may entertain ex-parte motions only
where there is an urgent necessity to do so and no rights of the opposing parties are
impaired.1wphi1.nt
The Court of Appeals ruled that there was a violation of the fundamental right of
Extelcom to due process when it was not afforded the opportunity to question the
motion for the revival of the application. However, it must be noted that said Order
referred to a simple revival of the archived application of Bayantel in NTC Case No. 92426. At this stage, it cannot be said that Extelcom's right to procedural due process was
prejudiced. It will still have the opportunity to be heard during the full-blown adversarial
hearings that will follow. In fact, the records show that the NTC has scheduled several
hearing dates for this purpose, at which all interested parties shall be allowed to register
their opposition. We have ruled that there is no denial of due process where full-blown
34
adversarial proceedings are conducted before an administrative body. With Extelcom
having fully participated in the proceedings, and indeed, given the opportunity to file its
opposition to the application, there was clearly no denial of its right to due process.
In Zaldivar vs. Sandiganbayan (166 SCRA 316 [1988]), we held that the
right to be heard does not only refer to the right to present verbal
arguments in court. A party may also be heard through his pleadings.
where opportunity to be heard is accorded either through oral
arguments or pleadings, there is no denial of procedural due process.
As reiterated in National Semiconductor (HK) Distribution, Ltd. vs.
NLRC (G.R. No. 123520, June 26, 1998), the essence of due process is
simply an opportunity to be heard, or as applied to administrative
proceedings, an opportunity to explain one's side. Hence, in Navarro

III vs. Damaso (246 SCRA 260 [1995]), we held that a formal or trialtype hearing is not at all times and not in all instances essential.
35
Plainly, petitioner was not denied due process.
Extelcom had already entered its appearance as a party and filed its opposition to the
application. It was neither precluded nor barred from participating in the hearings
thereon. Indeed, nothing, not even the Order reviving the application, bars or prevents
Extelcom and the other oppositors from participating in the hearings and adducing
evidence in support of their respective oppositions. The motion to revive could not have
possibly caused prejudice to Extelcom since the motion only sought the revival of the
application. It was merely a preliminary step towards the resumption of the hearings on
the application of Bayantel. The latter will still have to prove its capability to undertake
the proposed CMTS. Indeed, in its Order dated February 1, 2000, the NTC set several
hearing dates precisely intended for the presentation of evidence on Bayantel's
capability and qualification. Notice of these hearings were sent to all parties concerned,
including Extelcom.
As regards the changes in the personal circumstances of Bayantel, the same may be
ventilated at the hearings during Bayantel's presentation of evidence. In fact, Extelcom
was able to raise its arguments on this matter in the Opposition (With Motion to
Dismiss) anent the re-opening and re-instatement of the application of Bayantel.
Extelcom was thus heard on this particular point.
Likewise, the requirements of notice and publication of the application is no longer
necessary inasmuch as the application is a mere revival of an application which has
already been published earlier. At any rate, the records show that all of the five (5)
CMTS operators in the country were duly notified and were allowed to raise their
respective oppositions to Bayantel's application through the NTC's Order dated February
1, 2000.
It should be borne in mind that among the declared national policies under Republic Act
No. 7925, otherwise known as the Public Telecommunications Policy Act of the
Philippines, is the healthy competition among telecommunications carriers, to wit:
A healthy competitive environment shall be fostered, one in which
telecommunications carriers are free to make business decisions and
to interact with one another in providing telecommunications
services, with the end in view of encouraging their financial viability
36
while maintaining affordable rates.
The NTC is clothed with sufficient discretion to act on matters solely within its
competence. Clearly, the need for a healthy competitive environment in
telecommunications is sufficient impetus for the NTC to consider all those applicants
who are willing to offer competition, develop the market and provide the environment
necessary for greater public service. This was the intention that came to light with the
issuance of Memorandum Circular 9-3-2000, allocating new frequency bands for use of

CMTS. This memorandum circular enumerated the conditions prevailing and the reasons
which necessitated its issuance as follows:
- the international accounting rates are rapidly declining, threatening
the subsidy to the local exchange service as mandated in EO 109 and
RA 7925;
- the public telecommunications entities which were obligated to
install, operate and maintain local exchange network have performed
their obligations in varying degrees;
- after more than three (3) years from the performance of the
obligations only 52% of the total number of cities and municipalities
are provided with local telephone service.
- there are mergers and consolidations among the existing cellular
mobile telephone service (CMTS) providers threatening the efficiency
of competition;
- there is a need to hasten the installation of local exchange lines in
unserved areas;
- there are existing CMTS operators which are experiencing
congestion in the network resulting to low grade of service;
- the consumers/customers shall be given the freedom to choose
37
CMTS operators from which they could get the service.
Clearly spelled out is the need to provide enhanced competition and the requirement
for more landlines and telecommunications facilities in unserved areas in the country.
On both scores, therefore, there was sufficient showing that the NTC acted well within
its jurisdiction and in pursuance of its avowed duties when it allowed the revival of
Bayantel's application.
We now come to the issue of exhaustion of administrative remedies. The rule is wellentrenched that a party must exhaust all administrative remedies before resorting to
the courts. The premature invocation of the intervention of the court is fatal to one's
cause of action. This rule would not only give the administrative agency an opportunity
to decide the matter by itself correctly, but would also prevent the unnecessary and
38
39
premature resort to courts. In the case of Lopez v. City of Manila, we held:
As a general rule, where the law provides for the remedies against the
action of an administrative board, body or officer, relief to courts can
be sought only after exhausting all remedies provided. The reason
rests upon the presumption that the administrative body, if given the

chance to correct its mistake or error, may amend its decision on a

given matter and decide it properly. Therefore, where a remedy is
available within the administrative machinery, this should be resorted
to before resort can be made to the courts, not only to give the
administrative agency the opportunity to decide the matter by itself
correctly, but also to prevent unnecessary and premature resort to
courts.
Clearly, Extelcom violated the rule on exhaustion of administrative remedies when it
went directly to the Court of Appeals on a petition for certiorari and prohibition from
the Order of the NTC dated May 3, 2000, without first filing a motion for
reconsideration. It is well-settled that the filing of a motion for reconsideration is a
prerequisite to the filing of a special civil action for certiorari.
The general rule is that, in order to give the lower court the
opportunity to correct itself, a motion for reconsideration is a
prerequisite to certiorari. It also basic that petitioner must exhaust all
other available remedies before resorting to certiorari. This rule,
however, is subject to certain exceptions such as any of the following:
(1) the issues raised are purely legal in nature, (2) public interest is
involved, (3) extreme urgency is obvious or (4) special circumstances
40
warrant immediate or more direct action.
This case does not fall under any of the recognized exceptions to this rule. Although the
Order of the NTC dated May 3, 2000 granting provisional authority to Bayantel was
immediately executory, it did not preclude the filing of a motion for reconsideration.
Under the NTC Rules, a party adversely affected by a decision, order, ruling or resolution
may within fifteen (15) days file a motion for reconsideration. That the Order of the NTC
became immediately executory does not mean that the remedy of filing a motion for
41
reconsideration is foreclosed to the petitioner.
Furthermore, Extelcom does not enjoy the grant of any vested interest on the right to
render a public service. The Constitution is quite emphatic that the operation of a public
utility shall not be exclusive. Thus:
No franchise, certificate, or any other form of authorization for the
operation of a public utility shall be granted to citizens of the
Philippines or to corporations organized under the laws of the
Philippines at least sixty per centum of whose capital is owned by such
citizens, nor shall such franchise, certificate or authorization be
exclusive in character or for a longer period than fifty years. Neither
shall any such franchise or right be granted except under the condition
that it shall be subject to amendment, alteraion, or repeal by the
42
Congress when the common good so requires. xxx xxx xxx.

In Radio Communications of the Phils., Inc. v. National Telecommunications

43
Commission, we held:
It is well within the powers of the public respondent to authorize the
installation by the private respondent network of radio
communications systems in Catarman, Samar and San Jose, Mindoro.
Under the circumstances, the mere fact that the petitioner possesses
a franchise to put up and operate a radio communications system in
certain areas is not an insuperable obstacle to the public respondent's
issuing the proper certificate to an applicant desiring to extend the
same services to those areas. The Constitution mandates that a
franchise cannot be exclusive in nature nor can a franchise be granted
except that it must be subject to amendment, alteration, or even
repeal by the legislature when the common good so requires. (Art. XII,
sec. 11 of the 1986 Constitution). There is an express provision in the
petitioner's franchise which provides compliance with the above
mandate (RA 2036, sec. 15).
Even in the provisional authority granted to Extelcom, it is expressly stated that such
authority is not exclusive. Thus, the Court of Appeals erred when it gave due course to
Extelcom's petition and ruled that it constitutes an exception to the rule on exhaustion
of administrative remedies.
Also, the Court of Appeals erred in annulling the Order of the NTC dated May 3, 2000,
granting Bayantel a provisional authority to install, operate and maintain CMTS. The
general rule is that purely administrative and discretionary functions may not be
44
interfered with by the courts. Thus, in Lacuesta v. Herrera, it was held:
xxx (T)he powers granted to the Secretary of Agriculture and
Commerce (natural resources) by law regarding the disposition of
public lands such as granting of licenses, permits, leases and contracts,
or approving, rejecting, reinstating, or canceling applications, are all
executive and administrative in nature. It is a well recognized principle
that purely administrative and discretionary functions may not be
interfered with by the courts. (Coloso vs. Board of Accountancy, G.R.
No. L-5750, April 20, 1953) In general, courts have no supervising
power over the proceedings and actions of the administrative
departments of the government. This is generally true with respect to
acts involving the exercise of judgement or discretion and findings of
fact. (54 Am. Jur. 558-559) xxx.
The established exception to the rule is where the issuing authority has gone beyond its
statutory authority, exercised unconstitutional powers or clearly acted arbitrarily and
45
without regard to his duty or with grave abuse of discretion. None of these obtains in
the case at bar.

Moreover, in petitions for certiorari, evidentiary matters or matters of fact raised in the
court below are not proper grounds nor may such be ruled upon in the proceedings. As
46
held in National Federation of Labor v. NLRC:
At the outset, it should be noted that a petition for certiorari under
Rule 65 of the Rules of Court will prosper only if there is a showing of
grave abuse of discretion or an act without or in excess of jurisdiction
on the part of the National Labor Relations Commission. It does not
include an inquiry as to the correctness of the evaluation of evidence
which was the basis of the labor official or officer in determining his
conclusion. It is not for this Court to re-examine conflicting evidence,
re-evaluate the credibility of witnesses nor substitute the findings of
fact of an administrative tribunal which has gained expertise in its
special field. Considering that the findings of fact of the labor arbiter
and the NLRC are supported by evidence on record, the same must be
accorded due respect and finality.
This Court has consistently held that the courts will not interfere in matters which are
addressed to the sound discretion of the government agency entrusted with the
regulation of activities coming under the special and technical training and knowledge of
47
such agency. It has also been held that the exercise of administrative discretion is a
policy decision and a matter that can best be discharged by the government agency
48
49
concerned, and not by the courts. In Villanueva v. Court of Appeals, it was held that
findings of fact which are supported by evidence and the conclusion of experts should
not be disturbed. This was reiterated in Metro Transit Organization, Inc. v. National
50
Labor Relations Commission, wherein it was ruled that factual findings of quasi-judicial
bodies which have acquired expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but even finality and are binding even
upon the Supreme Court if they are supported by substantial evidence.1wphi1.nt
Administrative agencies are given a wide latitude in the evaluation of evidence and in
the exercise of its adjudicative functions. This latitude includes the authority to take
judicial notice of facts within its special competence.
In the case at bar, we find no reason to disturb the factual findings of the NTC which
formed the basis for awarding the provisional authority to Bayantel. As found by the
NTC, Bayantel has been granted several provisional and permanent authorities before to
51
operate various telecommunications services. Indeed, it was established that Bayantel
was the first company to comply with its obligation to install local exchange lines
pursuant to E.O. 109 and R.A. 7925. In recognition of the same, the provisional authority
awarded in favor of Bayantel to operate Local Exchange Services in Quezon City,
Malabon, Valenzuela and the entire Bicol region was made permanent and a CPCN for
the said service was granted in its favor. Prima facie evidence was likewise found
showing Bayantel's legal, financial and technical capacity to undertake the proposed
cellular mobile telephone service.

Likewise, the May 3, 2000 Order did not violate NTC Memorandum Circular No. 9-14-90
dated September 4, 1990, contrary to the ruling of the Court of Appeals. The
memorandum circular sets forth the procedure for the issuance of provisional authority
thus:
EFFECTIVE THIS DATE, and as part of the Commission's drive to
streamline and fast track action on applications/petitions for CPCN
other forms of authorizations, the Commission shall be evaluating
applications/petitions for immediate issuance of provisional
authorizations, pending hearing and final authorization of an
application on its merit.
For this purpose, it is hereby directed that all applicants/petitioners
seeking for provisional authorizations, shall submit immediately to the
Commission, either together with their application or in a Motion all
their legal, technical, financial, economic documentations in support
of their prayer for provisional authorizations for evaluation. On the
basis of their completeness and their having complied with
requirements, the Commission shall be issuing provisional
authorizations.
Clearly, a provisional authority may be issued even pending hearing and final
determination of an application on its merits.
Finally, this Court finds that the Manifestations of Extelcom alleging forum shopping on
the part of the NTC and Bayantel are not impressed with merit. The divisions of the
Supreme Court are not to be considered as separate and distinct courts. The Supreme
Court remains a unit notwithstanding that it works in divisions. Although it may have
three divisions, it is but a single court. Actions considered in any of these divisions and
decisions rendered therein are, in effect, by the same Tribunal. The divisions of this
Court are not to be considered as separate and distinct courts but as divisions of one
52
and the same court.
Moreover, the rules on forum shopping should not be literally interpreted. We have
stated thus:
It is scarcely necessary to add that Circular No. 28-91 must be so
interpreted and applied as to achieve the purposes projected by the
Supreme Court when it promulgated that circular. Circular No. 28-91
was designed to serve as an instrument to promote and facilitate the
orderly administration of justice and should not be interpreted with
such absolute literalness as to subvert its own ultimate and legitimate
objection or the goal of all rules of procedure which is to achieve
53
substantial justice as expeditiously as possible.

Even assuming that separate actions have been filed by two different parties involving
essentially the same subject matter, no forum shopping was committed as the parties
did not resort to multiple judicial remedies. The Court, therefore, directed the
consolidation of the two cases because they involve essentially the same issues. It would
also prevent the absurd situation wherein two different divisions of the same court
would render altogether different rulings in the cases at bar.
We rule, likewise, that the NTC has legal standing to file and initiate legal action in cases
where it is clear that its inaction would result in an impairment of its ability to execute
and perform its functions. Similarly, we have previously held in Civil Service Commission
54
v. Dacoycoy that the Civil Service Commission, as an aggrieved party, may appeal the
decision of the Court of Appeals to this Court.
As correctly stated by the NTC, the rule invoked by Extelcom is Rule 65 of the Rules of
Civil Procedure, which provides that public respondents shall not appear in or file an
55
answer or comment to the petition or any pleading therein. The instant petition, on
the other hand, was filed under Rule 45 where no similar proscription exists.
WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The
Court of Appeals' Decision dated September 13, 2000 and Resolution dated February 9,
2001 are REVERSED and SET ASIDE. The permanent injunction issued by the Court of
Appeals is LIFTED. The Orders of the NTC dated February 1, 2000 and May 3, 2000
are REINSTATED. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., Puno, Kapunan, and Pardo, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-11390

March 26, 1918

EL BANCO ESPAOL-FILIPINO, plaintiff-appellant,

vs.
VICENTE PALANCA, administrator of the estate of Engracio Palanca
Tanquinyeng, defendant-appellant.
Aitken and DeSelms for appellant.
Hartigan and Welch for appellee.
STREET, J.:
This action was instituted upon March 31, 1908, by "El Banco Espanol-Filipino" to
foreclose a mortgage upon various parcels of real property situated in the city of Manila.
The mortgage in question is dated June 16, 1906, and was executed by the original
defendant herein, Engracio Palanca Tanquinyeng y Limquingco, as security for a debt
owing by him to the bank. Upon March 31, 1906, the debt amounted to P218,294.10
and was drawing interest at the rate of 8 per centum per annum, payable at the end of
each quarter. It appears that the parties to this mortgage at that time estimated the
value of the property in question at P292,558, which was about P75,000 in excess of the
indebtedness. After the execution of this instrument by the mortgagor, he returned to
China which appears to have been his native country; and he there died, upon January
29, 1810, without again returning to the Philippine Islands.
As the defendant was a nonresident at the time of the institution of the present action,
it was necessary for the plaintiff in the foreclosure proceeding to give notice to the
defendant by publication pursuant to section 399 of the Code of Civil Procedure. An
order for publication was accordingly obtained from the court, and publication was
made in due form in a newspaper of the city of Manila. At the same time that the order
of the court should deposit in the post office in a stamped envelope a copy of the
summons and complaint directed to the defendant at his last place of residence, to wit,
the city of Amoy, in the Empire of China. This order was made pursuant to the following
provision contained in section 399 of the Code of Civil Procedure:
In case of publication, where the residence of a nonresident or absent
defendant is known, the judge must direct a copy of the summons and
complaint to be forthwith deposited by the clerk in the post-office, postage
prepaid, directed to the person to be served, at his place of residence

Whether the clerk complied with this order does not affirmatively appear. There is,
however, among the papers pertaining to this case, an affidavit, dated April 4, 1908,
signed by Bernardo Chan y Garcia, an employee of the attorneys of the bank, showing
that upon that date he had deposited in the Manila post-office a registered letter,
addressed to Engracio Palanca Tanquinyeng, at Manila, containing copies of the
complaint, the plaintiff's affidavit, the summons, and the order of the court directing
publication as aforesaid. It appears from the postmaster's receipt that Bernardo
probably used an envelope obtained from the clerk's office, as the receipt purports to
show that the letter emanated from the office.
The cause proceeded in usual course in the Court of First Instance; and the defendant
not having appeared, judgment was, upon July 2, 1908, taken against him by default.
Upon July 3, 1908, a decision was rendered in favor of the plaintiff. In this decision it
was recited that publication had been properly made in a periodical, but nothing was
said about this notice having been given mail. The court, upon this occasion, found that
the indebtedness of the defendant amounted to P249,355. 32, with interest from March
31, 1908. Accordingly it was ordered that the defendant should, on or before July 6,
1908, deliver said amount to the clerk of the court to be applied to the satisfaction of
the judgment, and it was declared that in case of the failure of the defendant to satisfy
the judgment within such period, the mortgage property located in the city of Manila
should be exposed to public sale. The payment contemplated in said order was never
made; and upon July 8, 1908, the court ordered the sale of the property. The sale took
place upon July 30, 1908, and the property was bought in by the bank for the sum of
P110,200. Upon August 7, 1908, this sale was confirmed by the court.
About seven years after the confirmation of this sale, or to the precise, upon June 25,
1915, a motion was made in this cause by Vicente Palanca, as administrator of the
estate of the original defendant, Engracio Palanca Tanquinyeng y Limquingco, wherein
the applicant requested the court to set aside the order of default of July 2, 1908, and
the judgment rendered upon July 3, 1908, and to vacate all the proceedings subsequent
thereto. The basis of this application, as set forth in the motion itself, was that the order
of default and the judgment rendered thereon were void because the court had never
acquired jurisdiction over the defendant or over the subject of the action.
At the hearing in the court below the application to vacate the judgment was denied,
and from this action of the court Vicente Planca, as administrator of the estate of the
original defendant, has appealed. No other feature of the case is here under
consideration than such as related to the action of the court upon said motion.
The case presents several questions of importance, which will be discussed in what
appears to be the sequence of most convenient development. In the first part of this
opinion we shall, for the purpose of argument, assume that the clerk of the Court of
First Instance did not obey the order of the court in the matter of mailing the papers
which he was directed to send to the defendant in Amoy; and in this connection we
shall consider, first, whether the court acquired the necessary jurisdiction to enable it to

proceed with the foreclosure of the mortgage and, secondly, whether those
proceedings were conducted in such manner as to constitute due process of law.

In speaking of the proceeding to foreclose a mortgage the author of a well known

treaties, has said:

The word "jurisdiction," as applied to the faculty of exercising judicial power, is used in
several different, though related, senses since it may have reference (1) to the authority
of the court to entertain a particular kind of action or to administer a particular kind of
relief, or it may refer to the power of the court over the parties, or (2) over the property
which is the subject to the litigation.

Though nominally against person, such suits are to vindicate liens; they
proceed upon seizure; they treat property as primarily indebted; and, with the
qualification above-mentioned, they are substantially property actions. In the
civil law, they are styled hypothecary actions, and their sole object is the
enforcement of the lien against the res; in the common law, they would be
different in chancery did not treat the conditional conveyance as a mere
hypothecation, and the creditor's right ass an equitable lien; so, in both, the
suit is real action so far as it is against property, and seeks the judicial
recognition of a property debt, and an order for the sale of the res. (Waples,
Proceedings In Rem. sec. 607.)

The sovereign authority which organizes a court determines the nature and extent of its
powers in general and thus fixes its competency or jurisdiction with reference to the
actions which it may entertain and the relief it may grant.
Jurisdiction over the person is acquired by the voluntary appearance of a party in court
and his submission to its authority, or it is acquired by the coercive power of legal
process exerted over the person.
Jurisdiction over the property which is the subject of the litigation may result either
from a seizure of the property under legal process, whereby it is brought into the actual
custody of the law, or it may result from the institution of legal proceedings wherein,
under special provisions of law, the power of the court over the property is recognized
and made effective. In the latter case the property, though at all times within the
potential power of the court, may never be taken into actual custody at all. An
illustration of the jurisdiction acquired by actual seizure is found in attachment
proceedings, where the property is seized at the beginning of the action, or some
subsequent stage of its progress, and held to abide the final event of the litigation. An
illustration of what we term potential jurisdiction over the res, is found in the
proceeding to register the title of land under our system for the registration of land.
Here the court, without taking actual physical control over the property assumes, at the
instance of some person claiming to be owner, to exercise a jurisdiction in rem over the
property and to adjudicate the title in favor of the petitioner against all the world.
In the terminology of American law the action to foreclose a mortgage is said to be a
proceeding quasi in rem, by which is expressed the idea that while it is not strictly
speaking an action in rem yet it partakes of that nature and is substantially such. The
expression "action in rem" is, in its narrow application, used only with reference to
certain proceedings in courts of admiralty wherein the property alone is treated as
responsible for the claim or obligation upon which the proceedings are based. The
action quasi rem differs from the true action in rem in the circumstance that in the
former an individual is named as defendant, and the purpose of the proceeding is to
subject his interest therein to the obligation or lien burdening the property. All
proceedings having for their sole object the sale or other disposition of the property of
the defendant, whether by attachment, foreclosure, or other form of remedy, are in a
general way thus designated. The judgment entered in these proceedings is conclusive
only between the parties.

It is true that in proceedings of this character, if the defendant for whom publication is
made appears, the action becomes as to him a personal action and is conducted as such.
This, however, does not affect the proposition that where the defendant fails to appear
the action is quasi in rem; and it should therefore be considered with reference to the
principles governing actions in rem.
There is an instructive analogy between the foreclosure proceeding and an action of
attachment, concerning which the Supreme Court of the United States has used the
following language:
If the defendant appears, the cause becomes mainly a suit in personam, with
the added incident, that the property attached remains liable, under the
control of the court, to answer to any demand which may be established
against the defendant by the final judgment of the court. But, if there is no
appearance of the defendant, and no service of process on him, the case
becomes, in its essential nature, a proceeding in rem, the only effect of which is
to subject the property attached to the payment of the defendant which the
court may find to be due to the plaintiff. (Cooper vs. Reynolds, 10 Wall., 308.)
In an ordinary attachment proceeding, if the defendant is not personally served, the
preliminary seizure is to, be considered necessary in order to confer jurisdiction upon
the court. In this case the lien on the property is acquired by the seizure; and the
purpose of the proceedings is to subject the property to that lien. If a lien already exists,
whether created by mortgage, contract, or statute, the preliminary seizure is not
necessary; and the court proceeds to enforce such lien in the manner provided by law
precisely as though the property had been seized upon attachment. (Roller vs. Holly,
176 U. S., 398, 405; 44 L. ed., 520.) It results that the mere circumstance that in an
attachment the property may be seized at the inception of the proceedings, while in the
foreclosure suit it is not taken into legal custody until the time comes for the sale, does
not materially affect the fundamental principle involved in both cases, which is that the
court is here exercising a jurisdiction over the property in a proceeding directed
essentially in rem.

Passing now to a consideration of the jurisdiction of the Court of First Instance in a

mortgage foreclosure, it is evident that the court derives its authority to entertain the
action primarily from the statutes organizing the court. The jurisdiction of the court, in
this most general sense, over the cause of action is obvious and requires no comment.
Jurisdiction over the person of the defendant, if acquired at all in such an action, is
obtained by the voluntary submission of the defendant or by the personal service of
process upon him within the territory where the process is valid. If, however, the
defendant is a nonresident and, remaining beyond the range of the personal process of
the court, refuses to come in voluntarily, the court never acquires jurisdiction over the
person at all. Here the property itself is in fact the sole thing which is impleaded and is
the responsible object which is the subject of the exercise of judicial power. It follows
that the jurisdiction of the court in such case is based exclusively on the power which,
under the law, it possesses over the property; and any discussion relative to the
jurisdiction of the court over the person of the defendant is entirely apart from the case.
The jurisdiction of the court over the property, considered as the exclusive object of
such action, is evidently based upon the following conditions and considerations,
namely: (1) that the property is located within the district; (2) that the purpose of the
litigation is to subject the property by sale to an obligation fixed upon it by the
mortgage; and (3) that the court at a proper stage of the proceedings takes the property
into custody, if necessary, and expose it to sale for the purpose of satisfying the
mortgage debt. An obvious corollary is that no other relief can be granted in this
proceeding than such as can be enforced against the property.
We may then, from what has been stated, formulated the following proposition relative
to the foreclosure proceeding against the property of a nonresident mortgagor who fails
to come in and submit himself personally to the jurisdiction of the court: (I) That the
jurisdiction of the court is derived from the power which it possesses over the property;
(II) that jurisdiction over the person is not acquired and is nonessential; (III) that the
relief granted by the court must be limited to such as can be enforced against the
property itself.
It is important that the bearing of these propositions be clearly apprehended, for there
are many expressions in the American reports from which it might be inferred that the
court acquires personal jurisdiction over the person of the defendant by publication and
notice; but such is not the case. In truth the proposition that jurisdiction over the person
of a nonresident cannot be acquired by publication and notice was never clearly
understood even in the American courts until after the decision had been rendered by
the Supreme Court of the United States in the leading case of Pennoyer vs. Neff (95 U. S.
714; 24 L. ed., 565). In the light of that decision, and of other decisions which have
subsequently been rendered in that and other courts, the proposition that jurisdiction
over the person cannot be thus acquired by publication and notice is no longer open to
question; and it is now fully established that a personal judgment upon constructive or
substituted service against a nonresident who does not appear is wholly invalid. This
doctrine applies to all kinds of constructive or substituted process, including service by
publication and personal service outside of the jurisdiction in which the judgment is
rendered; and the only exception seems to be found in the case where the nonresident

defendant has expressly or impliedly consented to the mode of service. (Note to Raher
vs. Raher, 35 L. R. A. [N. S. ], 292; see also 50 L .R. A., 585; 35 L. R. A. [N. S.], 312
The idea upon which the decision in Pennoyer vs. Neff (supra) proceeds is that the
process from the tribunals of one State cannot run into other States or countries and
that due process of law requires that the defendant shall be brought under the power of
the court by service of process within the State, or by his voluntary appearance, in order
to authorize the court to pass upon the question of his personal liability. The doctrine
established by the Supreme Court of the United States on this point, being based upon
the constitutional conception of due process of law, is binding upon the courts of the
Philippine Islands. Involved in this decision is the principle that in proceedings in rem or
quasi in rem against a nonresident who is not served personally within the state, and
who does not appear, the relief must be confined to the res, and the court cannot
lawfully render a personal judgment against him. (Dewey vs. Des Moines, 173 U. S., 193;
43 L. ed., 665; Heidritter vs. Elizabeth Oil Cloth Co., 112 U. S., 294; 28 L. ed., 729.)
Therefore in an action to foreclose a mortgage against a nonresident, upon whom
service has been effected exclusively by publication, no personal judgment for the
deficiency can be entered. (Latta vs. Tutton, 122 Cal., 279; Blumberg vs. Birch, 99 Cal.,
416.)
It is suggested in the brief of the appellant that the judgment entered in the court below
offends against the principle just stated and that this judgment is void because the court
in fact entered a personal judgment against the absent debtor for the full amount of the
indebtedness secured by the mortgage. We do not so interpret the judgment.
In a foreclosure proceeding against a nonresident owner it is necessary for the court, as
in all cases of foreclosure, to ascertain the amount due, as prescribed in section 256 of
the Code of Civil Procedure, and to make an order requiring the defendant to pay the
money into court. This step is a necessary precursor of the order of sale. In the present
case the judgment which was entered contains the following words:
Because it is declared that the said defendant Engracio Palanca Tanquinyeng y
Limquingco, is indebted in the amount of P249,355.32, plus the interest, to the
'Banco Espanol-Filipino' . . . therefore said appellant is ordered to deliver the
above amount etc., etc.
This is not the language of a personal judgment. Instead it is clearly intended merely as a
compliance with the requirement that the amount due shall be ascertained and that the
evidence of this it may be observed that according to the Code of Civil Procedure a
personal judgment against the debtor for the deficiency is not to be rendered until after
the property has been sold and the proceeds applied to the mortgage debt. (sec. 260).
The conclusion upon this phase of the case is that whatever may be the effect in other
respects of the failure of the clerk of the Court of First Instance to mail the proper
papers to the defendant in Amoy, China, such irregularity could in no wise impair or
defeat the jurisdiction of the court, for in our opinion that jurisdiction rest upon a basis

much more secure than would be supplied by any form of notice that could be given to
a resident of a foreign country.
Before leaving this branch of the case, we wish to observe that we are fully aware that
many reported cases can be cited in which it is assumed that the question of the
sufficiency of publication or notice in a case of this kind is a question affecting the
jurisdiction of the court, and the court is sometimes said to acquire jurisdiction by virtue
of the publication. This phraseology was undoubtedly originally adopted by the court
because of the analogy between service by the publication and personal service of
process upon the defendant; and, as has already been suggested, prior to the decision
of Pennoyer vs. Neff (supra) the difference between the legal effects of the two forms of
service was obscure. It is accordingly not surprising that the modes of expression which
had already been molded into legal tradition before that case was decided have been
brought down to the present day. But it is clear that the legal principle here involved is
not effected by the peculiar language in which the courts have expounded their ideas.
We now proceed to a discussion of the question whether the supposed irregularity in
the proceedings was of such gravity as to amount to a denial of that "due process of
law" which was secured by the Act of Congress in force in these Islands at the time this
mortgage was foreclosed. (Act of July 1, 1902, sec. 5.) In dealing with questions involving
the application of the constitutional provisions relating to due process of law the
Supreme Court of the United States has refrained from attempting to define with
precision the meaning of that expression, the reason being that the idea expressed
therein is applicable under so many diverse conditions as to make any attempt ay
precise definition hazardous and unprofitable. As applied to a judicial proceeding,
however, it may be laid down with certainty that the requirement of due process is
satisfied if the following conditions are present, namely; (1) There must be a court or
tribunal clothed with judicial power to hear and determine the matter before it; (2)
jurisdiction must be lawfully acquired over the person of the defendant or over the
property which is the subject of the proceeding; (3) the defendant must be given an
opportunity to be heard; and (4) judgment must be rendered upon lawful hearing.
Passing at once to the requisite that the defendant shall have an opportunity to be
heard, we observe that in a foreclosure case some notification of the proceedings to the
nonresident owner, prescribing the time within which appearance must be made, is
everywhere recognized as essential. To answer this necessity the statutes generally
provide for publication, and usually in addition thereto, for the mailing of notice to the
defendant, if his residence is known. Though commonly called constructive, or
substituted service of process in any true sense. It is merely a means provided by law
whereby the owner may be admonished that his property is the subject of judicial
proceedings and that it is incumbent upon him to take such steps as he sees fit to
protect it. In speaking of notice of this character a distinguish master of constitutional
law has used the following language:
. . . if the owners are named in the proceedings, and personal notice is provided
for, it is rather from tenderness to their interests, and in order to make sure

that the opportunity for a hearing shall not be lost to them, than from any
necessity that the case shall assume that form. (Cooley on Taxation [2d. ed.],
527, quoted in Leigh vs. Green, 193 U. S., 79, 80.)
It will be observed that this mode of notification does not involve any absolute
assurance that the absent owner shall thereby receive actual notice. The periodical
containing the publication may never in fact come to his hands, and the chances that he
should discover the notice may often be very slight. Even where notice is sent by mail
the probability of his receiving it, though much increased, is dependent upon the
correctness of the address to which it is forwarded as well as upon the regularity and
security of the mail service. It will be noted, furthermore, that the provision of our law
relative to the mailing of notice does not absolutely require the mailing of notice
unconditionally and in every event, but only in the case where the defendant's
residence is known. In the light of all these facts, it is evident that actual notice to the
defendant in cases of this kind is not, under the law, to be considered absolutely
necessary.
The idea upon which the law proceeds in recognizing the efficacy of a means of
notification which may fall short of actual notice is apparently this: Property is always
assumed to be in the possession of its owner, in person or by agent; and he may be
safely held, under certain conditions, to be affected with knowledge that proceedings
have been instituted for its condemnation and sale.
It is the duty of the owner of real estate, who is a nonresident, to take
measures that in some way he shall be represented when his property is called
into requisition, and if he fails to do this, and fails to get notice by the ordinary
publications which have usually been required in such cases, it is his
misfortune, and he must abide the consequences. (6 R. C. L., sec. 445 [p. 450]).
It has been well said by an American court:
If property of a nonresident cannot be reached by legal process upon the
constructive notice, then our statutes were passed in vain, and are mere empty
legislative declarations, without either force, or meaning; for if the person is
not within the jurisdiction of the court, no personal judgment can be rendered,
and if the judgment cannot operate upon the property, then no effective
judgment at all can be rendered, so that the result would be that the courts
would be powerless to assist a citizen against a nonresident. Such a result
would be a deplorable one. (Quarl vs. Abbett, 102 Ind., 233; 52 Am. Rep., 662,
667.)
It is, of course universally recognized that the statutory provisions relative to publication
or other form of notice against a nonresident owner should be complied with; and in
respect to the publication of notice in the newspaper it may be stated that strict
compliance with the requirements of the law has been held to be essential. In Guaranty
Trust etc. Co. vs. Green Cove etc., Railroad Co. (139 U. S., 137, 138), it was held that

where newspaper publication was made for 19 weeks, when the statute required 20,
the publication was insufficient.
With respect to the provisions of our own statute, relative to the sending of notice by
mail, the requirement is that the judge shall direct that the notice be deposited in the
mail by the clerk of the court, and it is not in terms declared that the notice must be
deposited in the mail. We consider this to be of some significance; and it seems to us
that, having due regard to the principles upon which the giving of such notice is
required, the absent owner of the mortgaged property must, so far as the due process
of law is concerned, take the risk incident to the possible failure of the clerk to perform
his duty, somewhat as he takes the risk that the mail clerk or the mail carrier might
possibly lose or destroy the parcel or envelope containing the notice before it should
reach its destination and be delivered to him. This idea seems to be strengthened by the
consideration that placing upon the clerk the duty of sending notice by mail, the
performance of that act is put effectually beyond the control of the plaintiff in the
litigation. At any rate it is obvious that so much of section 399 of the Code of Civil
Procedure as relates to the sending of notice by mail was complied with when the court
made the order. The question as to what may be the consequences of the failure of the
record to show the proof of compliance with that requirement will be discussed by us
further on.
The observations which have just been made lead to the conclusion that the failure of
the clerk to mail the notice, if in fact he did so fail in his duty, is not such an irregularity,
as amounts to a denial of due process of law; and hence in our opinion that irregularity,
if proved, would not avoid the judgment in this case. Notice was given by publication in
a newspaper and this is the only form of notice which the law unconditionally requires.
This in our opinion is all that was absolutely necessary to sustain the proceedings.
It will be observed that in considering the effect of this irregularity, it makes a difference
whether it be viewed as a question involving jurisdiction or as a question involving due
process of law. In the matter of jurisdiction there can be no distinction between the
much and the little. The court either has jurisdiction or it has not; and if the requirement
as to the mailing of notice should be considered as a step antecedent to the acquiring of
jurisdiction, there could be no escape from the conclusion that the failure to take that
step was fatal to the validity of the judgment. In the application of the idea of due
process of law, on the other hand, it is clearly unnecessary to be so rigorous. The
jurisdiction being once established, all that due process of law thereafter requires is an
opportunity for the defendant to be heard; and as publication was duly made in the
newspaper, it would seem highly unreasonable to hold that failure to mail the notice
was fatal. We think that in applying the requirement of due process of law, it is
permissible to reflect upon the purposes of the provision which is supposed to have
been violated and the principle underlying the exercise of judicial power in these
proceedings. Judge in the light of these conceptions, we think that the provision of Act
of Congress declaring that no person shall be deprived of his property without due
process of law has not been infringed.

In the progress of this discussion we have stated the two conclusions; (1) that the failure
of the clerk to send the notice to the defendant by mail did not destroy the jurisdiction
of the court and (2) that such irregularity did not infringe the requirement of due
process of law. As a consequence of these conclusions the irregularity in question is in
some measure shorn of its potency. It is still necessary, however, to consider its effect
considered as a simple irregularity of procedure; and it would be idle to pretend that
even in this aspect the irregularity is not grave enough. From this point of view,
however, it is obvious that any motion to vacate the judgment on the ground of the
irregularity in question must fail unless it shows that the defendant was prejudiced by
that irregularity. The least, therefore, that can be required of the proponent of such a
motion is to show that he had a good defense against the action to foreclose the
mortgage. Nothing of the kind is, however, shown either in the motion or in the affidavit
which accompanies the motion.
An application to open or vacate a judgment because of an irregularity or defect in the
proceedings is usually required to be supported by an affidavit showing the grounds on
which the relief is sought, and in addition to this showing also a meritorious defense to
the action. It is held that a general statement that a party has a good defense to the
action is insufficient. The necessary facts must be averred. Of course if a judgment is
void upon its face a showing of the existence of a meritorious defense is not necessary.
(10 R. C. L., 718.)
The lapse of time is also a circumstance deeply affecting this aspect of the case. In this
connection we quote the following passage from the encyclopedic treatise now in
course of publication:
Where, however, the judgment is not void on its face, and may therefore be
enforced if permitted to stand on the record, courts in many instances refuse
to exercise their quasi equitable powers to vacate a judgement after the lapse
of the term ay which it was entered, except in clear cases, to promote the ends
of justice, and where it appears that the party making the application is himself
without fault and has acted in good faith and with ordinary diligence. Laches on
the part of the applicant, if unexplained, is deemed sufficient ground for
refusing the relief to which he might otherwise be entitled. Something is due to
the finality of judgments, and acquiescence or unnecessary delay is fatal to
motions of this character, since courts are always reluctant to interfere with
judgments, and especially where they have been executed or satisfied. The
moving party has the burden of showing diligence, and unless it is shown
affirmatively the court will not ordinarily exercise its discretion in his favor. (15
R. C. L., 694, 695.)
It is stated in the affidavit that the defendant, Engracio Palanca Tanquinyeng y
Limquingco, died January 29, 1910. The mortgage under which the property was sold
was executed far back in 1906; and the proceedings in the foreclosure were closed by
the order of court confirming the sale dated August 7, 1908. It passes the rational
bounds of human credulity to suppose that a man who had placed a mortgage upon

property worth nearly P300,000 and had then gone away from the scene of his life
activities to end his days in the city of Amoy, China, should have long remained in
ignorance of the fact that the mortgage had been foreclosed and the property sold,
even supposing that he had no knowledge of those proceedings while they were being
conducted. It is more in keeping with the ordinary course of things that he should have
acquired information as to what was transpiring in his affairs at Manila; and upon the
basis of this rational assumption we are authorized, in the absence of proof to the
contrary, to presume that he did have, or soon acquired, information as to the sale of
his property.
The Code of Civil Procedure, indeed, expressly declares that there is a presumption that
things have happened according to the ordinary habits of life (sec. 334 [26]); and we
cannot conceive of a situation more appropriate than this for applying the presumption
thus defined by the lawgiver. In support of this presumption, as applied to the present
case, it is permissible to consider the probability that the defendant may have received
actual notice of these proceedings from the unofficial notice addressed to him in Manila
which was mailed by an employee of the bank's attorneys. Adopting almost the exact
words used by the Supreme Court of the United States in Grannis vs. Ordeans (234 U. S.,
385; 58 L. ed., 1363), we may say that in view of the well-known skill of postal officials
and employees in making proper delivery of letters defectively addressed, we think the
presumption is clear and strong that this notice reached the defendant, there being no
proof that it was ever returned by the postal officials as undelivered. And if it was
delivered in Manila, instead of being forwarded to Amoy, China, there is a probability
that the recipient was a person sufficiently interested in his affairs to send it or
communicate its contents to him.
Of course if the jurisdiction of the court or the sufficiency of the process of law
depended upon the mailing of the notice by the clerk, the reflections in which we are
now indulging would be idle and frivolous; but the considerations mentioned are
introduced in order to show the propriety of applying to this situation the legal
presumption to which allusion has been made. Upon that presumption, supported by
the circumstances of this case, ,we do not hesitate to found the conclusion that the
defendant voluntarily abandoned all thought of saving his property from the obligation
which he had placed upon it; that knowledge of the proceedings should be imputed to
him; and that he acquiesced in the consequences of those proceedings after they had
been accomplished. Under these circumstances it is clear that the merit of this motion
is, as we have already stated, adversely affected in a high degree by the delay in asking
for relief. Nor is it an adequate reply to say that the proponent of this motion is an
administrator who only qualified a few months before this motion was made. No
disability on the part of the defendant himself existed from the time when the
foreclosure was effected until his death; and we believe that the delay in the
appointment of the administrator and institution of this action is a circumstance which
is imputable to the parties in interest whoever they may have been. Of course if the
minor heirs had instituted an action in their own right to recover the property, it would
have been different.

It is, however, argued that the defendant has suffered prejudice by reason of the fact
that the bank became the purchaser of the property at the foreclosure sale for a price
greatly below that which had been agreed upon in the mortgage as the upset price of
the property. In this connection, it appears that in article nine of the mortgage which
was the subject of this foreclosure, as amended by the notarial document of July 19,
1906, the parties to this mortgage made a stipulation to the effect that the value therein
placed upon the mortgaged properties should serve as a basis of sale in case the debt
should remain unpaid and the bank should proceed to a foreclosure. The upset price
stated in that stipulation for all the parcels involved in this foreclosure was P286,000. It
is said in behalf of the appellant that when the bank bought in the property for the sum
of P110,200 it violated that stipulation.
It has been held by this court that a clause in a mortgage providing for a tipo, or upset
price, does not prevent a foreclosure, nor affect the validity of a sale made in the
foreclosure proceedings. (Yangco vs. Cruz Herrera and Wy Piaco, 11 Phil. Rep., 402;
Banco-Espaol Filipino vs. Donaldson, Sim and Co., 5 Phil. Rep., 418.) In both the cases
here cited the property was purchased at the foreclosure sale, not by the creditor or
mortgagee, but by a third party. Whether the same rule should be applied in a case
where the mortgagee himself becomes the purchaser has apparently not been decided
by this court in any reported decision, and this question need not here be considered,
since it is evident that if any liability was incurred by the bank by purchasing for a price
below that fixed in the stipulation, its liability was a personal liability derived from the
contract of mortgage; and as we have already demonstrated such a liability could not be
the subject of adjudication in an action where the court had no jurisdiction over the
person of the defendant. If the plaintiff bank became liable to account for the difference
between the upset price and the price at which in bought in the property, that liability
remains unaffected by the disposition which the court made of this case; and the fact
that the bank may have violated such an obligation can in no wise affect the validity of
the judgment entered in the Court of First Instance.
In connection with the entire failure of the motion to show either a meritorious defense
to the action or that the defendant had suffered any prejudice of which the law can take
notice, we may be permitted to add that in our opinion a motion of this kind, which
proposes to unsettle judicial proceedings long ago closed, can not be considered with
favor, unless based upon grounds which appeal to the conscience of the court. Public
policy requires that judicial proceedings be upheld. The maximum here applicable is non
quieta movere. As was once said by Judge Brewer, afterwards a member of the
Supreme Court of the United States:
Public policy requires that judicial proceedings be upheld, and that titles
obtained in those proceedings be safe from the ruthless hand of collateral
attack. If technical defects are adjudged potent to destroy such titles, a judicial
sale will never realize that value of the property, for no prudent man will risk
his money in bidding for and buying that title which he has reason to fear may
years thereafter be swept away through some occult and not readily
discoverable defect. (Martin vs. Pond, 30 Fed., 15.)

In the case where that language was used an attempt was made to annul certain
foreclosure proceedings on the ground that the affidavit upon which the order of
publication was based erroneously stated that the State of Kansas, when he was in fact
residing in another State. It was held that this mistake did not affect the validity of the
proceedings.
In the preceding discussion we have assumed that the clerk failed to send the notice by
post as required by the order of the court. We now proceed to consider whether this is
a proper assumption; and the proposition which we propose to establish is that there is
a legal presumption that the clerk performed his duty as the ministerial officer of the
court, which presumption is not overcome by any other facts appearing in the cause.
In subsection 14 of section 334 of the Code of Civil Procedure it is declared that there is
a presumption "that official duty has been regularly performed;" and in subsection 18 it
is declared that there is a presumption "that the ordinary course of business has been
followed." These presumptions are of course in no sense novelties, as they express ideas
which have always been recognized. Omnia presumuntur rite et solemniter esse acta
donec probetur in contrarium. There is therefore clearly a legal presumption that the
clerk performed his duty about mailing this notice; and we think that strong
considerations of policy require that this presumption should be allowed to operate
with full force under the circumstances of this case. A party to an action has no control
over the clerk of the court; and has no right to meddle unduly with the business of the
clerk in the performance of his duties. Having no control over this officer, the litigant
must depend upon the court to see that the duties imposed on the clerk are performed.
Other considerations no less potent contribute to strengthen the conclusion just stated.
There is no principle of law better settled than that after jurisdiction has once been
required, every act of a court of general jurisdiction shall be presumed to have been
rightly done. This rule is applied to every judgment or decree rendered in the various
stages of the proceedings from their initiation to their completion (Voorhees vs. United
States Bank, 10 Pet., 314; 35 U. S., 449); and if the record is silent with respect to any
fact which must have been established before the court could have rightly acted, it will
be presumed that such fact was properly brought to its knowledge. (The Lessee of
Grignon vs. Astor, 2 How., 319; 11 L. ed., 283.)
In making the order of sale [of the real state of a decedent] the court are
presumed to have adjudged every question necessary to justify such order or
decree, viz: The death of the owners; that the petitioners were his
administrators; that the personal estate was insufficient to pay the debts of the
deceased; that the private acts of Assembly, as to the manner of sale, were
within the constitutional power of the Legislature, and that all the provisions of
the law as to notices which are directory to the administrators have been
complied with. . . . The court is not bound to enter upon the record the
evidence on which any fact was decided. (Florentine vs. Barton, 2 Wall., 210; 17
L. ed., 785.) Especially does all this apply after long lapse of time.

Applegate vs. Lexington and Carter County Mining Co. (117 U. S., 255) contains an
instructive discussion in a case analogous to that which is now before us. It there
appeared that in order to foreclose a mortgage in the State of Kentucky against a
nonresident debtor it was necessary that publication should be made in a newspaper for
a specified period of time, also be posted at the front door of the court house and be
published on some Sunday, immediately after divine service, in such church as the court
should direct. In a certain action judgment had been entered against a nonresident,
after publication in pursuance of these provisions. Many years later the validity of the
proceedings was called in question in another action. It was proved from the files of an
ancient periodical that publication had been made in its columns as required by law; but
no proof was offered to show the publication of the order at the church, or the posting
of it at the front door of the court-house. It was insisted by one of the parties that the
judgment of the court was void for lack of jurisdiction. But the Supreme Court of the
United States said:
The court which made the decree . . . was a court of general jurisdiction.
Therefore every presumption not inconsistent with the record is to be indulged
in favor of its jurisdiction. . . . It is to be presumed that the court before making
its decree took care of to see that its order for constructive service, on which its
right to make the decree depended, had been obeyed.
It is true that in this case the former judgment was the subject of collateral , or indirect
attack, while in the case at bar the motion to vacate the judgment is direct proceeding
for relief against it. The same general presumption, however, is indulged in favor of the
judgment of a court of general jurisdiction, whether it is the subject of direct or indirect
attack the only difference being that in case of indirect attack the judgment is
conclusively presumed to be valid unless the record affirmatively shows it to be void,
while in case of direct attack the presumption in favor of its validity may in certain cases
be overcome by proof extrinsic to the record.
The presumption that the clerk performed his duty and that the court made its decree
with the knowledge that the requirements of law had been complied with appear to be
amply sufficient to support the conclusion that the notice was sent by the clerk as
required by the order. It is true that there ought to be found among the papers on file in
this cause an affidavit, as required by section 400 of the Code of Civil Procedure,
showing that the order was in fact so sent by the clerk; and no such affidavit appears.
The record is therefore silent where it ought to speak. But the very purpose of the law in
recognizing these presumptions is to enable the court to sustain a prior judgment in the
face of such an omission. If we were to hold that the judgment in this case is void
because the proper affidavit is not present in the file of papers which we call the record,
the result would be that in the future every title in the Islands resting upon a judgment
like that now before us would depend, for its continued security, upon the presence of
such affidavit among the papers and would be liable at any moment to be destroyed by
the disappearance of that piece of paper. We think that no court, with a proper regard
for the security of judicial proceedings and for the interests which have by law been
confided to the courts, would incline to favor such a conclusion. In our opinion the

proper course in a case of this kind is to hold that the legal presumption that the clerk
performed his duty still maintains notwithstanding the absence from the record of the
proper proof of that fact.
In this connection it is important to bear in mind that under the practice prevailing in
the Philippine Islands the word "record" is used in a loose and broad sense, as indicating
the collective mass of papers which contain the history of all the successive steps taken
in a case and which are finally deposited in the archives of the clerk's office as a
memorial of the litigation. It is a matter of general information that no judgment roll, or
book of final record, is commonly kept in our courts for the purpose of recording the
pleadings and principal proceedings in actions which have been terminated; and in
particular, no such record is kept in the Court of First Instance of the city of Manila.
There is, indeed, a section of the Code of Civil Procedure which directs that such a book
of final record shall be kept; but this provision has, as a matter of common knowledge,
been generally ignored. The result is that in the present case we do not have the
assistance of the recitals of such a record to enable us to pass upon the validity of this
judgment and as already stated the question must be determined by examining the
papers contained in the entire file.
But it is insisted by counsel for this motion that the affidavit of Bernardo Chan y Garcia
showing that upon April 4, 1908, he sent a notification through the mail addressed to
the defendant at Manila, Philippine Islands, should be accepted as affirmative proof that
the clerk of the court failed in his duty and that, instead of himself sending the requisite
notice through the mail, he relied upon Bernardo to send it for him. We do not think
that this is by any means a necessary inference. Of course if it had affirmatively
appeared that the clerk himself had attempted to comply with this order and had
directed the notification to Manila when he should have directed it to Amoy, this would
be conclusive that he had failed to comply with the exact terms of the order; but such is
not this case. That the clerk of the attorneys for the plaintiff erroneously sent a
notification to the defendant at a mistaken address affords in our opinion very slight
basis for supposing that the clerk may not have sent notice to the right address.
There is undoubtedly good authority to support the position that when the record
states the evidence or makes an averment with reference to a jurisdictional fact, it will
not be presumed that there was other or different evidence respecting the fact, or that
the fact was otherwise than stated. If, to give an illustration, it appears from the return
of the officer that the summons was served at a particular place or in a particular
manner, it will not be presumed that service was also made at another place or in a
different manner; or if it appears that service was made upon a person other than the
defendant, it will not be presumed, in the silence of the record, that it was made upon
the defendant also (Galpin vs. Page, 18 Wall., 350, 366; Settlemier vs. Sullivan, 97 U. S.,
444, 449). While we believe that these propositions are entirely correct as applied to the
case where the person making the return is the officer who is by law required to make
the return, we do not think that it is properly applicable where, as in the present case,
the affidavit was made by a person who, so far as the provisions of law are concerned,
was a mere intermeddler.

The last question of importance which we propose to consider is whether a motion in

the cause is admissible as a proceeding to obtain relief in such a case as this. If the
motion prevails the judgment of July 2, 1908, and all subsequent proceedings will be set
aside, and the litigation will be renewed, proceeding again from the date mentioned as
if the progress of the action had not been interrupted. The proponent of the motion
does not ask the favor of being permitted to interpose a defense. His purpose is merely
to annul the effective judgment of the court, to the end that the litigation may again
resume its regular course.
There is only one section of the Code of Civil Procedure which expressly recognizes the
authority of a Court of First Instance to set aside a final judgment and permit a renewal
of the litigation in the same cause. This is as follows:
SEC. 113. Upon such terms as may be just the court may relieve a party or legal
representative from the judgment, order, or other proceeding taken against
him through his mistake, inadvertence, surprise, or excusable neglect;
Provided, That application thereof be made within a reasonable time, but in no
case exceeding six months after such judgment, order, or proceeding was
taken.
An additional remedy by petition to the Supreme Court is supplied by section 513 of the
same Code. The first paragraph of this section, in so far as pertinent to this discussion,
provides as follows:
When a judgment is rendered by a Court of First Instance upon default, and a
party thereto is unjustly deprived of a hearing by fraud, accident, mistake or
excusable negligence, and the Court of First Instance which rendered the
judgment has finally adjourned so that no adequate remedy exists in that
court, the party so deprived of a hearing may present his petition to the
Supreme Court within sixty days after he first learns of the rendition of such
judgment, and not thereafter, setting forth the facts and praying to have
judgment set aside. . . .
It is evident that the proceeding contemplated in this section is intended to supplement
the remedy provided by section 113; and we believe the conclusion irresistible that
there is no other means recognized by law whereby a defeated party can, by a
proceeding in the same cause, procure a judgment to be set aside, with a view to the
renewal of the litigation.
The Code of Civil Procedure purports to be a complete system of practice in civil causes,
and it contains provisions describing with much fullness the various steps to be taken in
the conduct of such proceedings. To this end it defines with precision the method of
beginning, conducting, and concluding the civil action of whatever species; and by
section 795 of the same Code it is declared that the procedure in all civil action shall be
in accordance with the provisions of this Code. We are therefore of the opinion that the

remedies prescribed in sections 113 and 513 are exclusive of all others, so far as relates
to the opening and continuation of a litigation which has been once concluded.
The motion in the present case does not conform to the requirements of either of these
provisions; and the consequence is that in our opinion the action of the Court of First
Instance in dismissing the motion was proper.
If the question were admittedly one relating merely to an irregularity of procedure, we
cannot suppose that this proceeding would have taken the form of a motion in the
cause, since it is clear that, if based on such an error, the came to late for relief in the
Court of First Instance. But as we have already seen, the motion attacks the judgment of
the court as void for want of jurisdiction over the defendant. The idea underlying the
motion therefore is that inasmuch as the judgment is a nullity it can be attacked in any
way and at any time. If the judgment were in fact void upon its face, that is, if it were
shown to be a nullity by virtue of its own recitals, there might possibly be something in
this. Where a judgment or judicial order is void in this sense it may be said to be a
lawless thing, which can be treated as an outlaw and slain at sight, or ignored wherever
and whenever it exhibits its head.
But the judgment in question is not void in any such sense. It is entirely regular in form,
and the alleged defect is one which is not apparent upon its face. It follows that even if
the judgment could be shown to be void for want of jurisdiction, or for lack of due
process of law, the party aggrieved thereby is bound to resort to some appropriate
proceeding to obtain relief. Under accepted principles of law and practice, long
recognized in American courts, a proper remedy in such case, after the time for appeal
or review has passed, is for the aggrieved party to bring an action to enjoin the
judgment, if not already carried into effect; or if the property has already been disposed
of he may institute suit to recover it. In every situation of this character an appropriate
remedy is at hand; and if property has been taken without due process, the law
concedes due process to recover it. We accordingly old that, assuming the judgment to
have been void as alleged by the proponent of this motion, the proper remedy was by
an original proceeding and not by motion in the cause. As we have already seen our
Code of Civil Procedure defines the conditions under which relief against a judgment
may be productive of conclusion for this court to recognize such a proceeding as proper
under conditions different from those defined by law. Upon the point of procedure here
involved, we refer to the case of People vs. Harrison (84 Cal., 607) wherein it was held
that a motion will not lie to vacate a judgment after the lapse of the time limited by
statute if the judgment is not void on its face; and in all cases, after the lapse of the time
limited by statute if the judgment is not void on its face; and all cases, after the lapse of
such time, when an attempt is made to vacate the judgment by a proceeding in court
for that purpose an action regularly brought is preferable, and should be required. It will
be noted taken verbatim from the California Code (sec. 473).
The conclusions stated in this opinion indicate that the judgment appealed from is
without error, and the same is accordingly affirmed, with costs. So ordered.

Arellano, C.J., Torres, Carson, and Avancea, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 114046 October 24, 1994
HONORATO
GALVEZ
and
GODOFREDO
DIEGO, petitioners,
vs.
COURT OF APPEALS (17TH DIVISION), First Asst. Provincial Prosecutor. DENNIS M.
VILLA-IGNACIO of Pasig, Rizal; THE PEOPLE OF THE PHILIPPINES; and PNP P/SR. SUPT.
RICARDO F. DE LEON, Camp Commander and Head of the PNP Custodial Group, Camp
Crame, Cubao, Quezon City, respondents.
Emerito M. Salva & Associates; Juanito L. Andrade; and Lazaro Law Firm for petitioners.
REGALADO, J.:
Submitted for resolution in the present special civil action are: (1) the basic petition
for certiorari and mandamuswith a petition for habeas corpus, to review the resolution
issued
by
respondent
Court
of
Appeals,
dated
1
2
February 18, 1994, in CA-G.R. SP No. 33261; (2) the Urgent Motion and Supplemental
3
Urgent Motion for Immediate Action on Petition for Habeas corpus; and (3) the Urgent
Petition to Declare Judge Jaime N. Salazar, Jr. and First Assistant Provincial Prosecutor
Dennis M. Villa-Ignacio for Contempt and to Annul Proceedings (with Immediate Prayer
4
for another Cease and Desist Order).
On November 12, 1993, petitioners Honorato Galvez, the incumbent Mayor of San
Ildefonso, Bulacan, and one Godofredo Diego were charged in three separate
informations with homicide and two counts of frustrated homicide fot has been the rule
that under the first paragraph of Section 14, Rule 110, the amendment of the
information may also be made even if it may result in altering the nature of the charge
so long as it Regional Trial Court of Malolos, Bulacan, Branch 14, and docketed as
5
Criminal Cases Nos. 3642-M-93 to 3644-M-93. Both accused posted their respective
cash bail bonds and were subsequently released from detention.
On November 15, 1993, Bulacan Provincial Prosecutor Liberato L. Reyes filed a Motion
to Defer Arraignment and Subsequent Proceedings to enable him "to review the
evidence on record and determine once more the proper crimes chargeable against the
6
accused," which was granted by Judge Villajuan in an order dated November 16,
7
1993. Thereafter, pursuant to Department Order No. 369 of the Department of Justice,
respondent Prosecutor Dennis M. Villa-Ignacio was designated Acting Provincial
Prosecutor of Bulacan and was instructed to conduct a re-investigation of the aforesaid
8
criminal cases filed against herein petitioners.

By virtue of a Manifestation with Ex-parte Motion dated November 23, 1993 filed by
respondent prosecutor, the proceedings were again ordered suspended by Judge
Villajuan until after the prosecution's request for change of venue shall have been
resolved by the Supreme Court, and the preliminary investigation being conducted by
10
the former shall have been terminated. It appears that on December 2, 1993, private
complainants, through their counsel, Atty. Silvestre R. Bello III, had filed with the
Supreme Court a Petition for Change of Venue of Criminal Cases Nos. 3642-M-93 to
3644-M-93, purportedly to safeguard the lives of the victims and their witnesses, and to
11
prevent a miscarriage of justice.
On December 15, 1993, before petitioners could be arraigned in Criminal Cases Nos.
3642-M-93
to
3644-M-93,
respondent
prosecutor
filed
an Ex
12
parte Motion to Withdraw Informations in said cases. This motion was granted by
Judge Villajuan also on December 15, 1993 and the cases were considered withdrawn
13
from the docket of the court. On the same day, Prosecutor Villa-Ignacio filed four new
informations against herein petitioners for murder, two counts of frustrated murder,
14
and violation of Presidential Decree No. 1866 for illegal possession of firearms which
were subsequently raffled to the sala of Judge Victoria Pornillos of Branch 10, Regional
Trial Court of Malolos, Bulacan and were docketed therein as Criminal Cases Nos. 4004M-93 to 4007-M-93. No bail having been recommended for the crime of murder, Judge
15
Pornillos ordered the arrest of herein petitioners. On December 23, 1993, said
presiding judge issued an order setting the arraignment of the accused for December
16
27, 1993.
On December 27, 1993, the scheduled arraignment before Judge Pornillos were reset
due to the absence of respondent prosecutor. On even date, petitioners filed before
Judge Villajuan a Motion for Reconsideration of his order of December 15, 1993 which
17
granted the motion to withdraw the original informations.
Thereafter, a Motion
to Quash the new informations for lack
18
of jurisdiction was filed by petitioners before Judge Pornillos on January 3, 1994. At
the court session set for the arraignment of petitioners on January 24, 1994, Judge
Pornillos issued an order denying the motion to quash and, at the same time, directed
that a plea of not guilty be entered for petitioners when the latter refused to enter their
19
plea.
In the meantime, and prior to the arraignment of herein petitioners before Judge
Pornillos, an order was issued on January 20, 1994 by Judge Villajuan granting the
motion for reconsideration filed by petitioners, ordering the reinstatement of Criminal
Cases Nos. 3642-M-93 to 3644-M-93, and setting the arraignment of the accused
20
therein for February 8, 1994. On said date, however, the arraignment was suspended
and, in the meanwhile, petitioners filed a petition for certiorari, prohibition
and mandamus with respondent Court of Appeals, assailing the order dated January 24,
1994 issued by Judge Pornillos which denied petitioners' motion to quash filed in
Criminal Cases Nos. 4004-M-93 and 4007-M-93. As earlier stated, respondent court

dismissed the petition in its questioned resolution of February 18, 1994, hence this
petition.
I. On the Main Petition
The main issue in this case involves a determination of the set
of informations under which herein petitioners should be tried, that is, (a) the first set of
informations
for
homicide
and
frustrated
homicide
in
Criminal
Cases Nos. 3642-M-93 to 3644-M-93, or (b) the subsequent informations for murder,
frustrated murder, and illegal possession of firearms in Criminal Cases Nos. 4004-M-93
to 4007-M-93. Several corollary but equally important issues have likewise been
addressed to us for resolution, to wit:
1. Whether the ex parte motion to withdraw the original informations
is null and void on the ground that (a) there was no notice and hearing
as required by Sections 4, 5 and 6, Rule 15 of the Rules of Court; and
(b) the appropriate remedy which should have been adopted by the
prosecution was to amend the informations by charging the proper
offenses pursuant to Section 14 of Rule 110;
2. Whether the order granting the withdrawal of the original
informations was immediately final and executory;
3. Whether Judge Pornillos was correct in denying the motion to
quash and thereby acquired jurisdiction over the new informations
considering that (a) the designated public prosecutor allegedly had no
authority to file the second set of informations; and (b) the filing
thereof constituted forum shopping; and
4. Whether the arraignment proceeding held on January 24, 1994 in
Criminal Cases Nos. 4004-M-93 to 4007-M-93 was valid.
We shall discuss these issues seriatim.
1. It is petitioners' submission that the prosecution's failure to serve them a copy of the
motion to withdraw the original informations and to set said motion for hearing
constitutes a violation of their right to be informed of the proceedings against them, as
well as a violation of Sections 4, 5 and 6, Rule 15 of the Rules of Court. Hence, so they
contend, the ex parte motion should be considered as a worthless scrap of paper and
Judge Villajuan had no authority to act on it. Ergo, the order granting the same is null
and void.
Petitioners advance the theory that respondent prosecutor should have amended the
original informations instead of withdrawing the same and filing new ones. They
postulate that the principle of nolle prosequi does not apply in this case since the

withdrawal or dismissal of an information is addressed solely to the sound and judicious

discretion of the court which has the option to grant or deny it and the prosecution
cannot impose its opinion on the court. It is further stressed that in case there is a need
to change the nature of the offense charged, that is, from homicide to murder, by
adding the qualifying circumstance of treachery, the only legal and proper remedy is
through the filing of the corresponding amended information; and that the withdrawal
of an information is allowed only where the new information involves a different
offense which does not include or is not included in the offense originally charged.
Normally, an accused would not object to the dismissal of an information against him
because it is to his best interest not to oppose the same. Contrarily, if the accused
should deem such conditional or provisional dismissal to be unjust and prejudicial to
him, he could object to such dismissal and insist that the case be heard and decided on
21
the merits. However, considering that in the original cases before Branch 14 of the
trial court petitioners had not yet been placed in jeopardy, and the ex parte motion to
withdraw was filed and granted before they could be arraigned, there would be no
imperative need for notice and hearing thereof. In actuality, the real grievance of herein
accused is not the dismissal of the original three informations but the filing of four new
informations, three of which charge graver offenses and the fourth, an additional
offense. Had these new informations not been filed, there would obviously have been
no cause for the instant petition. Accordingly, their complaint about the supposed
procedural lapses involved in the motion to dismiss filed and granted in Criminal Cases
Nos. 3642-M-93 to 3644-M-93 does not impress us as a candid presentation of their real
position.
Petitioners' contention that the dismissal of the original informations and the
consequent filing of the new ones substantially affected their right to bail is too strained
and tenuous an argument. They would want to ignore the fact that had the original
informations been amended so as to charge the capital offense of murder, they still
stood to likewise be deprived of their right to bail once it was shown that the evidence
of guilt is strong. Petitioners could not be better off with amended informations than
with the subsequent ones. It really made no difference considering that where a capital
offense is charged and the evidence of guilt is strong, bail becomes a matter of
discretion under either an amended or a new information.
Contrary to petitioners' submission, the absence of notice and hearing does not divest a
trial court of authority to pass on the merits of the motion. It has been held that
The order of the court granting the motion to dismiss despite absence
of a notice of hearing, or proof of service thereof, is merely an
irregularity in the proceedings. It cannot deprive a competent court of
jurisdiction over the case. The court still retains its authority to pass on
the merits of the motion. The remedy of the aggrieved party in such
cases is either to have the order set aside or the irregularity otherwise
cured by the court which dismissed the complaint, or to appeal from
22
the dismissal and notcertiorari.

Besides, when petitioners were given by Judge Villajuan the opportunity to file a motion
for reconsideration, even assuming the alleged procedural infirmity in his issuance of
the order of dismissal, the same was thereby deemed cured. This is especially so in this
case since, on his order, the original informations were reinstated in Branch 14 of the
trial court.

In such an instance, before a re-investigation of the case may be conducted by the

public prosecutor, the permission or consent of the court must be secured. And, if after
such re-investigation the prosecution finds a cogent basis to withdraw the information
or otherwise cause the dismissal of the case, such proposed course of action may be
25
taken but shall likewise be addressed to the sound discretion of the court.

The rule is now well settled that once a complaint or information is filed in court any
disposition of the case, whether as to its dismissal or the conviction or the acquittal of
the accused, rests in the sound discretion of the court. Although the prosecutor retains
the direction and control of the prosecution of criminal cases even when the case is
already
in
court,
he
cannot
impose
his opinion upon the tribunal. For while it is true that the prosecutor has the quasijudicial discretion to determine whether or not a criminal case should be filed in court,
once the case had already been brought therein any disposition the prosecutor may
deem proper thereafter should be addressed to the court for its consideration and
23
approval. The only qualification is that the action of the court must not impair the
substantial rights of the accused or the right of the People to due process of law.

It is not denied that in the present case, the court granted the motion of respondent
prosecutor
for
the
suspension
of
the
proceedings
until
the
re-investigation thereof shall have been terminated. Thereafter, the prosecutor arrived
at a finding that petitioners should have been charged with murder, frustrated murder,
and illegal possession of firearms. This prompted him to file an ex parte motion to
withdraw the original informations for homicide and frustrated homicide. Although the
motion did not state the reasons for the withdrawal of the informations, nevertheless,
the court in the exercise of its discretion granted the same, as a consequence of which a
new set of informations was thereafter filed and raffled to another branch of the court.
Petitioners now question the propriety of the procedure adopted by the prosecution,
insisting that an amendment, not a new information, was required under the
circumstances.

We reiterate once again the doctrine we enunciated and explained in Crespo vs. Mogul,
24
etc., et al.:
Whether the accused had been arraigned or not and whether it was
due to a reinvestigation by the fiscal or a review by the Secretary of
Justice whereby a motion to dismiss was submitted to the Court, the
Court in the exercise of its discretion may grant the motion or deny it
and require that the trial on the merits proceed for the proper
determination of the case.
xxx xxx xxx
The rule therefore in this jurisdiction is that once a complaint or
information is filed in Court any disposition of the case as to its
dismissal or the conviction or acquittal of the accused rests in the
sound discretion of the Court. Although the fiscal retains the direction
and control of the prosecution of criminal cases even while the case is
already in Court he cannot impose his opinion on the trial court. The
court is the best and sole judge on what to do with the case before it.
The determination of the case is within its exclusive jurisdiction and
competence. A motion to dismiss the case filed by the fiscal should be
addressed to the Court who has the option to grant or deny the same.
It does not matter if this is done before or after the arraignment of the
accused or that the motion was filed after a reinvestigation or upon
instructions of the Secretary of Justice who reviewed the records of
the investigation.

It must here be emphasized that respondent prosecutor sought, and was subsequently
granted, permission by the court to dismiss the original informations. It cannot
therefore be validly claimed that the prosecutor exceeded his authority in withdrawing
those informations because the same bore the imprimatur of the court. The issue is thus
focused on whether or not under the given situation the court acted correctly in
dismissing the original informations rather than ordering the amendment thereof.
It has been observed that while the Rules of Court gives the accused the right to move
for the quashal of the information, it is silent with respect to the right of the prosecutor
26
to ask for a dismissal or withdrawal thereof. A perusal of the 1985 Rules on Criminal
Procedure will show that there are only two provisions concerning the dismissal of an
information other than on motion of the accused, namely, Section 14 of Rule 110 and
Section 11 of Rule 119. But then, it may be contended that these rules speak of a
dismissal by the court when there is a mistake in charging the proper offense, but make
no mention of a dismissal made upon application of the prosecution. That is not
necessarily so.
It is true that Section 11, Rule 119 is virtually a restatement of Section 14, Rule 110,
providing as it does that:
Sec. 11. When mistake has been made in charging the proper offense.
When it becomes manifest at any time before judgment, that a
mistake has been made in charging the proper offense, and the
accused cannot be convicted of the offense charged, or of any other
offense necessarily included therein, the accused shall not be
discharged, if there appears to be good cause to detain him. In such
case, the court shall commit the accused to answer for the proper

offense and dismiss the original case upon the filing of the proper
information. (Emphasis supplied.)
Rule 119 is the rule specifically governing the trial stage where evidence is necessarily
being presented, hence the trial court is now in a better position to conclude that
manifestly the accused cannot be convicted of the offense charged or of one that it
necessarily includes. It would primarily be the function of the court to motu
proprio order the dismissal of the case and direct the filing of the appropriate
information. We do not discount the possibility of either the prosecution or the defense
initiating such dismissal and substitution at that stage, although, from a realistic point of
view, that would be a rare situation. This provision, therefore, is more directly and
principally directed to the trial court to invest it with the requisite authority to direct by
itself the dismissal and refiling of the informations therein contemplated.
Rule 110, on the other hand, provides the procedural governance for the prosecution of
offenses. Section 14 thereof, quoted infra, provides in its second paragraph the
procedure and requisites for the substitution of a defective information by the correct
one. Although, just like Section 11 of Rule 119 the permissible stage for effecting that
substitution is "at any time before judgment," unlike the latter situation it is sufficient
that "it appears . . . that a mistake has been made in charging the proper offense, . . . ."
The situation under said Section 14 contemplates a longer time span, inclusive of the
period from the filing of the information up to and before trial. Since no evidence has
been presented at that stage, the error would appear or be discoverable from a review
of the records of the preliminary investigation. Of course, that fact may be perceived by
the trial judge himself but, again, realistically it will be the prosecutor who can initially
determine the same. That is why such error need not be manifest or evident, nor is it
required that such nuances as offenses includible in the offense charged be taken into
account. It necessarily follows, therefore, that the prosecutor can and should institute
remedial measures for the dismissal of the original information and the refiling of the
correct one, otherwise he would be recreant to his duties.
It is interesting to note that in the American jurisdiction, such right is specifically
recognized under Rule 48 (a) of the Federal Rules of Criminal Procedure which provides
that the entry of a nolle prosequi by the Government is a permissible right, although
requiring in all cases the approval of the court in the exercise of its judicial
27
discretion. As a matter of fact, the prosecuting attorney is given the broad power, sole
authority and discretion to enter a nolle prosequi provided he does not act
28
arbitrarily and subject to the discretion of the court.
In several cases, we have also impliedly recognized the propriety of such a procedure
particularly in those instances where the prosecution is allowed to dismiss or withdraw
an information on the ground of insufficiency of evidence. We have even gone further
by imposing upon the fiscal, as he was then called, the duty to move for the dismissal of
the information if he is convinced that the evidence is insufficient to establish, at
29
least prima facie, the guilt of the accused.

In this case now before us, what is involved is a dismissal effected at the instance of the
prosecutor by reason of a mistake in charging the proper offense, in order that new
informations can be filed. The problem that may be posited, and should now be
resolved, is when the fiscal may be allowed to move to dismiss an information and when
he should merely move to amend it.
Section 14 of Rule 110, which is invoked by petitioners, reads as follows:
Sec. 14. Amendment. The information or complaint may be
amended, in substance or form, without leave of court, at any time
before the accused pleads; and thereafter and during the trial as to all
matters of form, by leave and at the discretion of the court, when the
same can be done without prejudice to the rights of the accused.
If it appears at any time before judgment that a mistake has been
made in charging the proper offense, the court shall dismiss the
original complaint or information upon the filing of a new one
charging the proper offense in accordance with Rule 119, Section 11,
provided the accused would not be placed thereby in double jeopardy,
and may also require the witnesses to give bail for their appearance at
the trial.
The first paragraph provides the rule for amendment of the information or complaint,
while the second paragraph refers to the substitution of the information or complaint.
Under the second paragraph, the court can order the filing of another information to
charge the proper offense, provided the accused would not be placed thereby in double
jeopardy and that could only be true if the offense proved does not necessarily include
or is not necessarily included in the offense charged in the original information.
It has been the rule that under the first paragraph of Section 14, Rule 110, the
amendment of the information may also be made even if it may result in altering the
nature of the charge so long as it can be done without prejudice to the rights of the
30
accused. Hence, in the case of Dimalibot vs. Salcedo, the accused therein were
originally charged with homicide and were released on bail. However, the then
provincial fiscal, after a review of the affidavits of the witnesses for the prosecution,
discovered that the killing complained of was perpetrated with the qualifying
circumstances of treachery, taking advantage of superior strength, and employing
means to weaken the defense of the victim. Consequently, an amended information for
murder was filed against the accused who were ordered re-arrested without the
amount of bail being fixed, the new charge being a capital offense.
The Court ruled therein that the amendment was proper, pursuant to Section 13, Rule
106 of the 1940 Rules of Court (now Section 14, Rule 110 of the 1985 Rules on Criminal
Procedure), thus:

Here these rules properly apply, since it is undisputed that the herein
accused were not yet arraigned before the competent court when the
complaint for homicide was amended so as to charge the crime of
murder. Upon the authority of said rules, the amendment could
therefore be made even as to substance in order that the proper
charge may be made. The claim that such amendment can only refer
to matters of specification affecting the elements constituting the
crime is not correct, for there is nothing in the rule to show that the
nature of the amendment should only be limited to matters of
specification. The change may also be made even if it may result in
altering the nature of the charge so long as it can be done without
prejudice to the rights of the defendant.
Be that as it may, it is quite plausible under Section 14 of Rule 110 that, instead of an
amendment, an information for homicide may also be dismissed before the accused
pleads, to give way to the filing of a new information for murder. This may be deduced
from the pronouncement of the Court in the aforecited case of Dimalibot, to wit:
This clearly appears from the second part of Section 13 of Rule 106
which says that, if it appears before judgment that a mistake has been
made in charging the proper offense, the court may dismiss the
original information and order the filing of a new one provided the
defendant may not be placed in double jeopardy. If a new information
may be ordered at any time before judgment no reason is seen why
the court may not order the amendment of the information if its
purpose is to make it conformable to the true nature of the crime
committed. . . .

investigation is entailed and the accused has to plead anew to the new
information; and
4. An amended information refers to the same offense charged in the
original information or to an offense which necessarily includes or is
necessarily included in the original charge, hence substantial
amendments to the information after the plea has been taken cannot
be made over the objection of the accused, for if the original
information would be withdrawn, the accused could invoke double
jeopardy. On the other hand, substitution requires or presupposes
that the new information involves a different offense which does not
include or is not necessarily included in the original charge, hence the
accused cannot claim double jeopardy.
In determining, therefore, whether there should be an amendment
under the first paragraph of Section 14, Rule 110, or a substitution of
information under the second paragraph thereof, the rule is that
where the second information involves the same offense, or an
offense which necessarily includes or is necessarily included in the first
information, an amendment of the information is sufficient;
otherwise, where the new information charges an offense which is
distinct and different from that initially charged, a substitution is in
order.

1. Amendment may involve either formal or substantial changes, while

substitution necessarily involves a substantial change from the original
charge;

In any event, we are inclined to uphold the propriety of the withdrawal of the original
informations, there having been no grave abuse of discretion on the part of the court in
granting the motion and, more importantly, in consideration of the fact that the motion
to withdraw was filed and granted before herein petitioners were arraigned, hence
before they were placed in jeopardy. Thus, even if a substitution was made at such
stage, petitioners cannot validly claim double jeopardy, which is precisely the evil sought
to be prevented under the rule on substitution, for the simple reason that no first
jeopardy had as yet attached. Consequently, we hold that although the offenses
charged under the three new informations necessarily include those charged under the
original informations, the substitution of informations was not a fatal error. A contrary
ruling, to paraphrase from our former pronouncements, would sacrifice substantial
justice for formal nuances on the altar of procedural technicalities. Furthermore,
petitioner's right to speedy trial was never violated since the new informations were
filed immediately after the motion to withdraw the original informations was granted.

2. Amendment before plea has been entered can be effected without

leave of court, but substitution of information must be with leave of
court as the original information has to be dismissed;

2. The controversy over the jurisdiction of Judge Pornillos to entertain and act upon the
new informations for murder, frustrated murder and illegal possession of firearms, is
grounded on three points of disagreement.

3. Where the amendment is only as to form, there is no need for

another preliminary investigation and the retaking of the plea of the
accused; in substitution of information, another preliminary

Firstly, it is argued that the new informations were prematurely filed considering that
the order granting the withdrawal of the original informations had not yet become final
and executory and that, as a matter of fact, the same was subsequently reconsidered

In the subsequent case of Teehankee, Jr. vs. Madayag, et al.,

Rule 110 was clarified to mean as follows:

31

however, Section 14 of

It may accordingly be posited that both amendment and substitution

of the information may be made before or after the defendant pleads,
but they differ in the following respects:

and the case reinstated by Judge Villajuan. Therefore, so petitioners postulate, Judge
Pornillos could not acquire jurisdiction over the same offense involving the same
incident and the same accused.
Secondly, petitioners contend that the dismissal of the original informations and the
filing of new ones which were raffled to another branch of the court constituted forum
shopping, and was tainted with malice considering the indecent haste with which the
motion to withdraw the informations was filed, the order granting the same was issued,
and the new informations were filed, all of which took place on the same day. Pursuant
to the doctrinal ruling that the court first acquiring jurisdiction excludes the other
courts, it is theorized that the cognizance of the case taken by Judge Villajuan barred
Judge Pornillos from assuming jurisdiction thereover.
Finally, the designation of respondent Prosecutor Dennis Villa-Ignacio (who was then
First Assistant Provincial Prosecutor of Pasig, Rizal) as Acting Provincial Prosecutor of
Bulacan was arbitrary and without any justifiable reason. It follows, therefore, so
petitioners vigorously argue, that in the absence of such authority, the informations
should be considered null and void by reason of which Judge Pornillos did not acquire
jurisdiction over the same.
On the other hand, respondents question the propriety of petitioners' filing of a petition
for certiorari prohibition and mandamus in the Court of Appeals against the order of the
lower court denying petitioners' motion to quash, claiming that the proper remedy was
to proceed to trial on the merits and thereafter raise on appeal, as special defenses, the
grounds invoked in the motion to quash.
It is a general rule that a nolle prosequi or dismissal entered before the accused is placed
on trial and before he is called on to plead is not equivalent
32
33
to an acquittal, and does not bar a subsequent prosecution for the same offense. It
34
is not a final disposition of the case. Rather, it partakes of the nature of a nonsuit or
discontinuance in a civil suit and leaves the matter in the same condition in which it was
35
before the commencement of the prosecution.
A dismissal is different from an acquittal. An order of dismissal which is actually an
36
acquittal is immediately final and cannot be reconsidered. Furthermore, an acquittal is
always based on the merits, that is, the defendant is acquitted because the evidence
does not show that defendant's guilt is beyond reasonable doubt; but a dismissal does
not decide the case on the merits or that the defendant is not guilty. Dismissals
terminate the proceedings, either because the court is not a court of competent
jurisdiction, or the evidence does not show that the offense was committed within the
territorial jurisdiction of the court, or the complaint or information is not valid or
37
sufficient in form and substance. For dismissal to be a bar under double jeopardy, it
must have the effect of acquittal.
All these go to show, therefore, that the dismissal of Criminal Cases
Nos. 3642-M-93 to 3644-M-93 did not amount to an acquittal of herein petitioners.

Consequently, the same did not immediately become final, hence petitioners could still
file a motion for the reconsideration thereof. Moreover, such dismissal does not
38
constitute a proper basis for a claim of double jeopardy. Since jeopardy had not yet
attached, herein petitioners were not prejudiced by the filing of the new informations
even though the order of dismissal in the prior case had not yet become final. Neither
did it affect the jurisdiction of the court in the subsequent case.
In American legal practice, where a motion for an order of nolle prosequi is made, the
only power to deny the motion would be based on failure of the district attorney to
39
judiciously exercise his discretion. In most cases, the motion will be readily granted
and should not be refused unless the court has some knowledge that it is based on an
improper reason or a corrupt motive. But such a motion to dismiss will not also be
approved unless the court is satisfied that the administration of justice requires that the
40
prosecution be ended, or if there appears to be a clear violation of the law. Whatever
may be the reason therefor, a denial of the motion to withdraw should not be construed
as a denigration of the authority of the special prosecutor to control and direct the
41
prosecution of the case, since the disposition of the case already rests in the sound
discretion of the court.
This brings us to the question as to whether or not an order of dismissal may be
subsequently set aside and the information reinstated. Again, in American
jurisprudence, the authorities differ somewhat as to whether a nolle prosequi may be
42
set aside and the cause reinstated. Some cases hold that the nolle prosequi may be
43
recalled and that the accused may be tried on the same information, but before it can
be retraced, set aside, cancelled, or struck off, the permission or assent of the court
must be had and obtained, and such cancellation or retraction must be duly entered.
According to other authorities, however, the entry of an unconditional nolle prosequi,
not on the ground that the information is insufficient on its face, is an end to the
prosecution of that information, and such nolle prosequi cannot afterward be vacated
44
and further proceedings had in that case.
Still in some cases, it has been held that a nolle prosequi may be set aside by leave of
court, so as to reinstate proceedings on the information, or unless it was entered by
45
mistake. In our jurisdiction, we follow the rule which allows an order of dismissal to
be set aside by leave of court. In one case, it was held that in the absence of any
statutory provision to the contrary, the court may, in the interest of justice, dismiss a
criminal case provisionally, that is, without prejudice to reinstating it before the order
46
becomes final or to the subsequent filing of a new information for the offense.
The rule that in cases of concurrent jurisdiction the court first acquiring jurisdiction will
retain it to the end to the exclusion of other tribunals, is not to be given unyielding
effect in all cases and it does not apply where the jurisdiction of the first court has come
47
to an end in any legal way, such as by nolle prosequi. The rule on exclusions is
intended to prevent confusion and conflicts in jurisdiction and to prevent a person from
being twice tried for the same offense, but no accused has a vested right to be tried in
any particular court of concurrent jurisdiction; and when one court of concurrent

jurisdiction voluntarily relinquishes it by a nolle prosequi or dismissal of the case, there

48
can be no legal or logical reason for preventing the other court from proceeding. With
much more reason will this rule apply where only branches of the same court, and not
different courts, are involved in the jurisdictional conflict.
There was no forum shopping in the lower court with respect to the case involved.
While the procedure adopted by the prosecution was somewhat cumbersome, it was
not in bad faith and, accordingly, it did not affect the legality of the proceedings. There
is no showing, and petitioners failed to prove otherwise, that the assignment by raffle of
the new informations to another branch of the same court was intended to prejudice
herein petitioners, or to place them under less favorable circumstances, or to find a
court which would act favorably on the prosecution's case.
The authority of the special prosecutor appointed by the Secretary of Justice to sign and
file informations has long been recognized in this jurisdiction and it has been held that
such information cannot be quashed on that account. There is nothing so sacrosanct in
the signing of complaints, holding of investigations, and conducting prosecutions that
only an officer appointed by the President or one expressly empowered by law be
49
permitted to assume these functions. And any irregularity in the appointment does
50
not necessarily invalidate the same if he may be considered a de facto officer.
Of course, where the person who signed the information was disqualified from
appointment to such position, the information is invalid and the court does not acquire
51
jurisdiction to try the accused thereon. Such is not, however, the situation obtaining
in the case at bar. It will be noted that respondent prosecutor was designated by the
Secretary
of
Justice
to
handle
the
re-investigation
and prosecution of the case against petitioners pursuant to Department Order No. 369.
Petitioners failed to show any irregularity in the issuance of said directive.
At any rate, the power of supervision and control vested in the Secretary of Justice
under Presidential Decree No. 1275 had been broadened beyond the confines of the old
law, that is, Section 1679 of the Revised Administrative Code, wherein the power of the
Secretary was then limited only to certain instances. Pertinently, in Aguinaldo, et al. vs.
52
Domagas, et al., we said:

Prosecution Offices, and Provincial and City Fiscal's

Offices as are hereinafter provided, which shall be
primarily responsible for the investigation and
prosecution of all cases involving violations of penal
laws.
The power of supervision and control vested in the
Secretary of Justice includes the authority to act
directly on any matter within the jurisdiction of the
Prosecution Staff, the Regional State Prosecution
Office or the Office of the Provincial or City Fiscal
and to review, modify or revoke any decision or
action of the Chief of said staff or office.
The power of supervision and control vested in the Secretary of Justice
under P.D. No. 1275 had thus been broadened beyond the confines of
the old law, i.e., Section 1679 of the Revised Administrative Code of
1917, where the power of the Secretary of Justice to designate acting
fiscals or prosecutors to handle a particular case was limited to
instances "when a provincial fiscal shall be disqualified by personal
interest to act in a particular case or when for any reason he shall be
unable, or shall fail to discharge any of the duties of his position."
Indeed, the limitation upon which petitioners rely no longer subsisted
under P.D. No. 1275.
Having been duly designated in accordance with law, the panel of
prosecutors had complete control of the investigation and prosecution
of the case. . . .

The Court notes, however; that Department of Justice Order No. 85

was issued pursuant to, among others, P.D. No. 1275 issued on 11
April 1978 which provides:

3. Petitioners similarly dispute the legality of their arraignment on January 24, 1994,
when Judge Pornillos entered a plea of not guilty for them after they refused to plead,
without furnishing them copies of the information with the list of witnesses, after
merely reading the informations against them and asking whether they understood the
same, which were allegedly in palpable violation of Section 1, Rule 116. Petitioners aver
that they were requesting for the suspension of the arraignment as they wanted to have
a final copy of the order of January 24, 1994 which was merely read in open court, and
to take the necessary steps to question the same by way of a motion for reconsideration
or an appeal.

Sec. 1. Creation of the National Prosecution Service;

Supervision and Control of the Secretary of Justice.
There is hereby created and established a National
Prosecution Service under the supervision and
control of the Secretary of Justice, to be composed
of the Prosecution Staff in the Office of the Secretary
of Justice and such number of Regional State

In criminal cases, it is the duty of the accused, in addition to the other pleas authorized
by law, to plead whether he is guilty or not of the crime charged. In that way and in that
53
way only can an issue be created upon which the trial shall proceed. Section 1 (c) of
Rule 116 is quite explicit that where the accused refuses to plead, a plea of not guilty
shall be entered for him. Hence, under such mandatory language, if the accused refuses
to plead, the court must enter a plea of not guilty. The words are so plain and
unambiguous that no construction is necessary. It actually calls for a literal application

thereof. Any explanation or defense which petitioners would want to invoke can be
properly raised during the trial, but they cannot refuse to enter their plea. Nonetheless,
the alleged defect in their arraignment on January 24, 1994 is deemed to have been
cured when they were again arraigned on February 18, 1994 with the assistance of
counsel de oficio, and the information was read to them in the vernacular.
In conclusion, considering that Branch 10 of the same trial court handling Criminal Cases
Nos. 4004-M-93 to 4007-M-93 legally acquired jurisdiction over the new informations
which we have likewise declared valid, petitioners may be prosecuted thereunder.
II. On the Petition for Habeas corpus
This petition is predicated mainly on petitioners' asseveration that the court which
issued the warrant for their arrest had no jurisdiction over the case, hence their
detention should be deemed illegal.

In addition, a petition for habeas corpus is not the appropriate vehicle for asserting a
59
right to bail or vindicating its denial. In the case of Enrile vs. Salazar, etc., et al., we
held that:
The criminal case before the respondent Judge was the normal venue
for invoking the petitioner's right to have provisional liberty pending
trial and judgment. The original jurisdiction to grant or deny bail
rested with said respondent. The correct course was for petitioner to
invoke that jurisdiction by filing a petition to be admitted to bail,
claiming a right to bail per se by reason of the weakness of the
evidence against him. Only after that remedy was denied by the trial
court should the review jurisdiction of this Court have been invoked,
and even then, not without first applying to the Court of Appeals if
appropriate relief was also available there.
III. On the Motion to Cite for Contempt

We have earlier declared that Branch 10 of the trial court acquired jurisdiction over the
new set of informations. Consequently, the warrant of arrest issued on the bases of said
informations filed therein and the subsequent detention of herein petitioners pursuant
thereto are valid. What instead has to be resolved is the corollary issue of whether the
petition for habeas corpus was properly filed together with their present petition
for certiorari andmandamus.
The writs of habeas corpus and certiorari may be ancillary to each other where
necessary to give effect to the supervisory powers of the higher courts. A writ of habeas
corpus reaches the body and the jurisdictional matters, but not the record. A writ
of certiorari reaches the record but not the body. Hence, a writ of habeas corpus may be
54
used with the writ of certiorari for the purpose of review. However, habeas
corpus does not lie where the petitioner has the remedy of appeal or certiorari because
it will not be permitted to perform the functions of a writ of error or appeal for the
purpose of reviewing mere errors or irregularities in the proceedings of a court having
55
jurisdiction over the person and the subject matter.
Neither can we grant the writ at this stage since a writ of habeas corpus is not intended
as a substitute for the functions of the trial court. In the absence of exceptional
circumstances, the orderly course of trial should be pursued and the usual remedies
exhausted before the writ may be invoked. Habeas corpus is not ordinarily available in
56
advance of trial to determine jurisdictional questions that may arise. It has to be an
exceptional case for the writ of habeas corpus to be available to an accused before
57
trial. In the absence of special circumstances requiring immediate action, a court will
not grant the writ and discharge the prisoner in advance of a determination of his case
58
in court. In the case under consideration, petitioners have dismally failed to adduce
any justification or exceptional circumstance which would warrant the grant of the writ,
hence their petition therefor has to be denied.

The records show that on February 24, 1994, this Court issued a temporary restraining
order, pursuant to its resolution in Administrative Matter No. 94-1-13-RTC which is a
petition for change of venue filed by the Vinculados, requiring Judges Felipe N. Villajuan
and Victoria Villalon-Pornillos to cease and desist from hearing the criminal cases
60
involving herein petitioners which were pending before them.
Subsequently, another resolution was
March 1, 1994, with the following directive:

issued

in

said

cases,

dated

ACCORDINGLY, without prejudice to the final determination as to

which of the two (2) sets of information will be upheld or prevail, the
Executive Judge of the Regional Trial Court of Malolos, Bulacan is
hereby directed to transfer all the aforementioned criminal cases filed
against Mayor Honorato Galvez, et al. now in the Regional Trial Court
of Malolos, Bulacan, to the Executive Judge, Regional Trial Court of
Quezon City for raffle as one (1) single case among its branches and
for the branch concerned, after raffle, to proceed with all deliberate
dispatch after the issues raised in CA-G.R. SP No. 33261 have been
61
resolved with finality.
As a consequence, the seven informations which were docketed as Criminal Cases Nos.
Q-94-55481 to Q-94-55487 were assigned to and are now pending trial on the merits
before Branch 103 of the Regional Trial Court of Quezon City, presided over by Judge
Jaime N. Salazar, Jr. Petitioners now assert that Judge Salazar and Prosecutor VillaIgnacio proceeded with the trial of the cases despite the aforestated directives in the
above cited resolutions. We find no merit in the motion to cite them for contempt.
62

The records reveal that there was a manifestation dated May 31, 1994 filed by the
Solicitor General wherein the latter manifested his conformity to the agreement made

between the prosecution and the defense before Judge Salazar, the pertinent part of
which agreement is as follows:

SO ORDERED.
Narvasa, C.J., Puno and Mendoza, JJ., concur.

1. During the hearing on May 26, 1994, the prosecution, through

Senior State Prosecutor Dennis Villa-Ignacio, the defense through
Justice Alfredo Lazaro, and this Honorable Court agreed that the trial
in these cases shall proceed on condition that: (a) the defense shall
not be deemed to have waived any issue or objection it has raised
before the Supreme Court in G.R. No. 114046; and (b) that the trial
shall also be without prejudice to whatever decision and resolution
the Supreme Court may render in the case before it.
Counsel for petitioners, retired Justice Alfredo Lazaro, takes issue with said agreement
on the pretension that the same is not the true agreement of the parties, but he failed
to state what they actually agreed upon. Withal, the resolutions of this Court in the
petition for change of venue, as well as the cease and desist order issued therein, are
clearly directed against the two aforenamed regional trial judges in Malolos, Bulacan. By
no stretch of the imagination can we interpret the same to include Judge Jaime N.
Salazar, Jr. of Quezon City.
For that matter, the issues involved in this petition for certiorari do not necessarily
require a suspension of the proceedings before the present trial court considering that
the main petition hinges only on a determination of which set of informations shall
constitute the indictments against petitioners and for which charges they shall stand
trial. Whichever set of informations prevails, the evidence of the prosecution and
defense will more or less be the same and can be utilized for the charges therein.
Hence, no cogent reason exists for the suspension of the proceedings before the court
below.
As a final word, while it may well be that both sets of information validly exist for the
nonce, to allow both of them to subsist will only serve to confuse and complicate the
proceedings in the cases therein. Brushing aside procedural technicalities, therefore, it
becomes exigent to now consider and declare the four informations for murder,
frustrated murder and illegal possession of firearms as having amended and superseded
the original three informations for homicide and frustrated homicide, there being no
substantial rights of herein petitioners which may be affected thereby. Correspondingly,
the three informations for homicide and frustrated homicide should be ordered
withdrawn from the Quezon City trial court's docket.
WHEREFORE, judgment is hereby rendered DISMISSING the petition
for certiorari and mandamus together with the petition for habeas corpus; DENYING, for
lack of merit, the motion to cite respondent judge and prosecutor for contempt and to
annul proceedings; and ORDERING the withdrawal and invalidation of the three
informations for homicide and frustrated homicide against petitioners from the docket
of Branch 103 of the Regional Trial Court of Quezon City.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
A.M. No. RTJ-92-876 September 19, 1994
STATE PROSECUTORS, complainants,
vs.
JUDGE MANUEL T. MURO, Regional Trial Court, Branch 54, Manila, respondent.
PER CURIAM:
In assaying the requisite norms for qualifications and eminence of a magistrate, legal
authorities place a premium on how he has complied with his continuing duty to know
the law. A quality thus considered essential to the judicial character is that of "a man of
learning who spends tirelessly the weary hours after midnight acquainting himself with
the great body of traditions and the learning of the law; is profoundly learned in all the
1
learning of the law; and knows how to use that learning."
Obviously, it is the primary duty of a judge, which he owes to the public and to the legal
profession, to know the very law he is supposed to apply to a given controversy. He is
called upon to exhibit more than just a cursory acquaintance with the statutes and
procedural rules. Party litigants will have great faith in the administration of justice if
judges cannot justly be accused of apparent deficiency in their grasp of the legal
principles. For, service in the judiciary means a continuous study and research on the
2
law from beginning to end.
3

In a letter-complaint dated August 19, 1992, respondent Judge Manuel T. Muro of the
Regional Trial Court (RTC) of Manila, Branch 54, was charged by State Prosecutors Nilo
C. Mariano, George C. Dee and Paterno V. Tac-an with ignorance of the law, grave
misconduct and violations of Rules 2.01, 3.01 and 3.02 of the Code of Judicial Conduct,
committed as follows:
1. That on August 13, 1992, respondent judge issued an Order
dismissing eleven (11) cases (docketed as Crim. Cases Nos. 92-101959
to 92- 101969, inclusive) filed by the undersigned complainant
prosecutors (members of the DOJ Panel of Prosecutors) against the
accused Mrs. Imelda Romualdez Marcos, for Violation of Central Bank
Foreign Exchange Restrictions, as consolidated in CB Circular No. 960,
in relation to the penal provisions of Sec. 34 of R.A. 265, as amended, .
. .;

2. That respondent Judge issued his Order solely on the basis of

newspaper reports (August 11, 1992 issues of the Philippine Daily
Inquirer and the Daily Globe) concerning the announcement on
August 10, 1992 by the President of the Philippines of the lifting by the
government of all foreign exchange restrictions and the arrival at such
decision by the Monetary Board as per statement of Central Bank
Governor Jose Cuisia;
3. That claiming that the reported announcement of the Executive
Department on the lifting of foreign exchange restrictions by two
newspapers which are reputable and of national circulation had the
effect of repealing Central Bank Circular No. 960, as allegedly
supported by Supreme Court decisions . . ., the Court contended that
it was deprived of jurisdiction, and, therefore, motu, prop(r)io had to
dismiss all the eleven cases aforementioned "for not to do so opens
this Court to charges of trying cases over which it has no more
jurisdiction;"
4. That in dismissing aforecited cases on August 13, 1992 on the basis
of a Central Bank Circular or Monetary Board Resolution which as of
date hereof, has not even been officially issued, and basing his
Order/decision on a mere newspaper account of the advance
announcement made by the President of the said fact of lifting or
liberalizing foreign exchange controls, respondent judge acted
prematurely and in indecent haste, as he had no way of determining
the full intent of the new CB Circular or Monetary Board resolution,
and whether the same provided for exception, as in the case of
persons who had pending criminal cases before the courts for
violations of Central Bank Circulars and/or regulations previously
issued on the matter;
5. That respondent Judge's arrogant and cavalier posture in taking
judicial notice purportedly as a matter of public knowledge a mere
newspaper account that the President had announced the lifting of
foreign exchange restrictions as basis for his assailed order of dismissal
is highly irregular, erroneous and misplaced. For the respondent judge
to take judicial notice thereof even before it is officially released by
the Central Bank and its full text published as required by law to be
effective shows his precipitate action in utter disregard of the
fundamental precept of due process which the People is also entitled
to and exposes his gross ignorance of the law, thereby tarnishing
public confidence in the integrity of the judiciary. How can the
Honorable Judge take judicial notice of something which has not yet
come into force and the contents, shape and tenor of which have not
yet been published and ascertained to be the basis of judicial action?
The Honorable Judge had miserably failed to "endeavor diligently to

ascertain the facts" in the case at bar contrary to Rule 3.02 of the Code
of Judicial Conduct constituting Grave Misconduct;
6. That respondent Judge did not even ha(ve) the prudence of
requiring first the comment of the prosecution on the effect of
aforesaid Central Bank Circular/Monetary Board resolution on the
pending cases before dismissing the same, thereby denying the
Government of its right to due process;
7. That the lightning speed with which respondent Judge acted to
dismiss the cases may be gleaned from the fact that such precipitate
action was undertaken despite already scheduled continuation of trial
dates set in the order of the court (the prosecution having started
presenting its evidence . . .) dated August 11, 1992 to wit: August 31,
September 3, 10, 21, & 23 and October 1, 1992, all at 9:30 o'clock in
the morning, in brazen disregard of all notions of fair play, thereby
depriving the Government of its right to be heard, and clearly exposing
his bias and partiality; and
8. That, in fact, the motive of respondent Judge in dismissing the case
without even waiting for a motion to quash filed by the counsel for
accused has even placed his dismissal Order suspect.
Pursuant to a resolution of this Court dated September 8, 1992, respondent judge filed
4
his comment, contending,inter alia, that there was no need to await publication of the
Central Bank (CB) circular repealing the existing law on foreign exchange controls for the
simple reason that the public announcement made by the President in several
newspapers of general circulation lifting foreign exchange controls was total, absolute,
without qualification, and was immediately effective; that having acted only on the basis
of such announcement, he cannot be blamed for relying on the erroneous statement of
the President that the new foreign exchange rules rendered moot and academic the
cases filed against Mrs. Marcos, and which was corrected only on August 17, 1992 but
published in the newspapers on August 18, 1992, and only after respondent judge had
issued his order of dismissal dated August 13, 1992; that the President was ill-advised by
his advisers and, instead of rescuing the Chief Executive from embarrassment by
assuming responsibility for errors in the latter's announcement, they chose to toss the
blame for the consequence of their failures to respondent judge who merely acted on
the basis of the announcements of the President which had become of public
knowledge; that the "saving clause" under CB Circular No. 1353 specifically refers only
to pending actions or investigations involving violations of CB Circular No. 1318,
whereas the eleven cases dismissed involved charges for violations of CB Circular No.
960, hence the accused cannot be tried and convicted under a law different from that
under which she was charged; that assuming that respondent judge erred in issuing the
order of dismissal, the proper remedy should have been an appeal therefrom but
definitely not an administrative complaint for his dismissal; that a mistake committed by
a judge should not necessarily be imputed as ignorance of the law; and that a "court can

reverse or modify a doctrine but it does not show ignorance of the justices or judges
whose decisions were reversed or modified" because "even doctrines initiated by the
Supreme Court are later reversed, so how much more for the lower courts?"
He further argued that no hearing was necessary since the prosecution had nothing to
explain because, as he theorized, "What explanation could have been given? That the
President was talking 'through his hat' (to use a colloquialism) and should not be
believed? That I should wait for the publication (as now alleged by complainants), of a
still then non-existent CB circular? . . . As it turned out, CB Circular No. 3153 (sic) does
not affect my dismissal order because the said circular's so-called saving clause does not
refer to CB Circular 960 under which the charges in the dismissed cases were based;"
that it was discretionary on him to take judicial notice of the facts which are of public
knowledge, pursuant to Section 2 of Rule 129; that the contention of complainants that
he acted prematurely and in indecent haste for basing his order of dismissal on a mere
newspaper account is contrary to the wordings of the newspaper report wherein the
President announced the lifting of controls as an accomplished fact, not as an intention
to be effected in the future, because of the use of the present perfect tense or past
tense "has lifted," not that he "intends to lift," foreign exchange controls.
Finally, respondent judge asseverates that complainants who are officers of the
Department of Justice, violated Section 6, Rule 140 of the Rules of Court which provides
that "proceedings against judges of first instance shall be private and confidential" when
they caused to be published in the newspapers the filing of the present administrative
case against him; and he emphasizes the fact that he had to immediately resolve a
simple and pure legal matter in consonance with the admonition of the Supreme Court
for speedy disposition of cases.
5

In their reply and supplemental reply, complainants aver that although the saving
clause under Section 16 of CB Circular No. 1353 made specific reference to CB Circular
No. 1318, it will be noted that Section 111 of Circular No. 1318, which contains a saving
clause substantially similar to that of the new circular, in turn refers to and includes
Circular No. 960. Hence, whether under Circular No. 1318 or Circular No. 1353, pending
cases involving violations of Circular No. 960 are excepted from the coverage thereof.
Further, it is alleged that the precipitate dismissal of the eleven cases, without according
the prosecution the opportunity to file a motion to quash or a comment, or even to
show cause why the cases against accused Imelda R. Marcos should not be dismissed, is
clearly reflective of respondent's partiality and bad faith. In effect, respondent judge
acted as if he were the advocate of the accused.
On December 9, 1993, this Court issued a resolution referring the complaint to the
Office of the Court Administrator for evaluation, report and recommendation, pursuant
to Section 7, Rule 140 of the Rules of Court, as revised, there being no factual issues
7
involved. The corresponding report and recommendation, dated February 14, 1994,
was submitted by Deputy Court Administrator Juanito A. Bernad, with the approval of
Court Administrator Ernani Cruz-Pao.

The questioned order of respondent judge reads as follows:

These eleven (11) cases are for Violation of Central Bank Foreign
Exchange Restrictions as consolidated in CB Circular No. 960 in relation
to the penal provision of Sec. 34 of R.A. 265, as amended.
The accused Mrs. Imelda R. Marcos pleaded not guilty to all these
cases; apparently the other accused in some of these cases, Roberto S.
Benedicto, was not arrested and therefore the Court did not acquire
jurisdiction over his person; trial was commenced as against Mrs.
Marcos.
His Excellency, the President of the Philippines, announced on August
10, 1992 that the government has lifted all foreign exchange
restrictions and it is also reported that Central Bank Governor Jose
Cuisia said that the Monetary Board arrived at such decision (issue of
the Philippine Daily Inquirer, August 11, 1992 and issue of the Daily
Globe of the same date). The Court has to give full confidence and
credit to the reported announcement of the Executive Department,
specially from the highest official of that department; the Courts are
charged with judicial notice of matters which are of public knowledge,
without introduction of proof, the announcement published in at least
the two newspapers cited above which are reputable and of national
circulation.
Per several cases decided by the Supreme Court (People vs. Alcaras, 56
Phil. 520, People vs. Francisco, 56 Phil. 572, People vs. Pastor, 77 Phil.
1000, People vs. Crisanto Tamayo, 61 Phil. 225), among others, it was
held that the repeal of a penal law without re-enactment extinguishes
the right to prosecute or punish the offense committed under the old
law and if the law repealing the prior penal law fails to penalize the
acts which constituted the offense defined and penalized in the
repealed law, the repealed law carries with it the deprivation of the
courts of jurisdiction to try, convict and sentence persons charged
with violations of the old law prior to its repeal. Under the aforecited
decisions this doctrine applies to special laws and not only to the
crimes punishable in the Revised Penal Code, such as the Import
Control Law. The Central Bank Circular No. 960 under which the
accused Mrs. Marcos is charged is considered as a penal law because
violation thereof is penalized with specific reference to the provision
of Section 34 of Republic Act 265, which penalizes violations of Central
Bank Circular No. 960, produces the effect cited in the Supreme Court
decisions and since according to the decisions that repeal deprives the
Court of jurisdiction, this Court motu propriodismisses all the eleven
(11) cases as a forestated in the caption, for not to do so opens this
Court to charges of trying cases over which it has no more jurisdiction.

This order was subsequently assailed in a petition for certiorari filed with the Court of
Appeals, entitled "People of the Philippines vs. Hon. Manuel T. Muro, Judge, RTC of
Manila, Br. 54 and Imelda R. Marcos," docketed as CA-G.R. SP No. 29349. When
required to file her comment, private respondent Marcos failed to file any. Likewise,
after the appellate court gave due course to the petition, private respondent was
ordered, but again failed despite notice, to file an answer to the petition and to show
cause why no writ of preliminary injunction should issue. Eventually, on April 29, 1993,
9
the Court of Appeals rendered a decision setting aside the order of August 13, 1992,
and reinstating Criminal Cases Nos. 92-101959 to 92-101969.
In finding that respondent judge acted in excess of jurisdiction and with grave abuse of
discretion in issuing the order of dismissal, the appellate court held that:
The order was issued motu proprio, i.e., without any motion to dismiss
filed by counsel for the accused, without giving an opportunity for the
prosecution to be heard, and solely on the basis of newspaper reports
announcing that the President has lifted all foreign exchange
restrictions.
The newspaper report is not the publication required by law in order
that the enactment can become effective and binding. Laws take
effect after fifteen days following the completion of their publication
in the Official Gazette or in a newspaper of general circulation unless it
is otherwise provided (Section 1, Executive Order No. 200). The full
text of CB Circular 1353, series of 1992, entitled "Further Liberalizing
Foreign Exchange Regulation" was published in the August 27, 1992
issue of the Manila Chronicle, the Philippine Star and the Manila
Bulletin. Per certification of the CB Corporate Affairs Office, CB Circular
No. 1353 took effect on September 2 . . . .
Considering that respondent judge admittedly had not seen the official
text of CB Circular No. 1353, he was in no position to rule judiciously
on whether CB Circular No. 960, under which the accused Mrs. Marcos
is charged, was already repealed by CB Circular No. 1353. . . .
xxx xxx xxx
A cursory reading of the . . . provision would have readily shown that
the repeal of the regulations on non-trade foreign exchange
transactions is not absolute, as there is a provision that with respect to
violations of former regulations that are the subject of pending actions
or investigations, they shall be governed by the regulations existing at
the time the cause of action (arose). Thus his conclusion that he has
lost jurisdiction over the criminal cases is precipitate and hasty. Had he
awaited the filing of a motion to dismiss by the accused, and given

opportunity for the prosecution to comment/oppose the same, his

resolution would have been the result of deliberation, not speculation.
I. The doctrine of judicial notice rests on the wisdom and discretion of the courts. The
power to take judicial notice is to be exercised by courts with caution; care must be
taken that the requisite notoriety exists; and every reasonable doubt on the subject
10
should be promptly resolved in the negative.
Generally speaking, matters of judicial notice have three material requisites: (1) the
matter must be one of common and general knowledge; (2) it must be well and
authoritatively settled and not doubtful or uncertain; and (3) it must be known to be
11
within the limits of the jurisdiction of the court. The provincial guide in determining
12
what facts may be assumed to be judicially known is that of notoriety. Hence, it can
be said that judicial notice is limited to facts evidenced by public records and facts of
13
general notoriety.
To say that a court will take judicial notice of a fact is merely another way of saying that
the usual form of evidence will be dispensed with if knowledge of the fact can be
14
otherwise acquired. This is because the court assumes that the matter is so notorious
15
that it will not be disputed. But judicial notice is not judicial knowledge. The mere
personal knowledge of the judge is not the judicial knowledge of the court, and he is not
authorized to make his individual knowledge of a fact, not generally or professionally
known, the basis of his action. Judicial cognizance is taken only of those matters which
16
are "commonly" known.
Things of "common knowledge," of which courts take judicial notice, may be matters
coming to the knowledge of men generally in the course of the ordinary experiences of
life, or they may be matters which are generally accepted by mankind as true and are
17
capable of ready and unquestioned demonstration. Thus, facts which are universally
known, and which may be found in encyclopedias, dictionaries or other publications, are
judicially noticed, provided they are of such universal notoriety and so generally
understood that they may be regarded as forming part of the common knowledge of
18
every person.
Respondent judge, in the guise of exercising discretion and on the basis of a mere
newspaper account which is sometimes even referred to as hearsay evidence twice
removed, took judicial notice of the supposed lifting of foreign exchange controls, a
matter which was not and cannot be considered of common knowledge or of general
notoriety. Worse, he took cognizance of an administrative regulation which was not yet
in force when the order of dismissal was issued. Jurisprudence dictates that judicial
19
notice cannot be taken of a statute before it becomes effective. The reason is simple.
A law which is not yet in force and hence, still inexistent, cannot be of common
knowledge capable of ready and unquestionable demonstration, which is one of the
requirements before a court can take judicial notice of a fact.

Evidently, it was impossible for respondent judge, and it was definitely not proper for
him, to have taken cognizance of CB Circular No. 1353, when the same was not yet in
force at the time the improvident order of dismissal was issued.
II. Central Bank Circular No. 1353, which took effect on September 1, 1992, further
liberalized the foreign exchange regulations on receipts and disbursements of residents
arising from non-trade and trade transactions. Section 16 thereof provides for a saving
clause, thus:
Sec. 16. Final Provisions of CB Circular No. 1318. - All the provisions in
Chapter X of CB Circular No. 1318 insofar as they are not inconsistent
with, or contrary to the provisions of this Circular, shall remain in full
force and effect: Provided, however, that any regulation on non-trade
foreign exchange transactions which has been repealed, amended or
modified by this Circular, violations of which are the subject of
pending actions or investigations, shall not be considered repealed
insofar as such pending actions or investigations are concerned, it
being understood that as to such pending actions or investigations,
the regulations existing at the time the cause of action accrued shall
govern.
Respondent judge contends that the saving clause refers only to the provisions of
Circular No. 1318, whereas the eleven criminal cases he dismissed involve a violation of
CB Circular No. 960. Hence, he insists, Circular No. 960 is deemed repealed by the new
circular and since the former is not covered by the saving clause in the latter, there is no
more basis for the charges involved in the criminal cases which therefore warrant a
dismissal of the same. The contention is patently unmeritorious.
Firstly, the second part of the saving clause in Circular No. 1353 explicitly provides that
"any regulation on non-trade foreign transactions which has been repealed, amended or
modified by this Circular, violations of which are the subject of pending actions or
investigations, shall not be considered repealed insofar as such pending actions or
investigations are concerned, it being understood that as to such pending actions or
investigations, theregulations existing at the time the cause of action accrued shall
govern." The terms of the circular are clear and unambiguous and leave no room for
interpretation. In the case at bar, the accused in the eleven cases had already been
arraigned, had pleaded not guilty to the charges of violations of Circular No. 960, and
said cases had already been set for trial when Circular No. 1353 took effect.
Consequently, the trial court was and is supposed to proceed with the hearing of the
cases in spite of the existence of Circular No. 1353.
Secondly, had respondent judge only bothered to read a little more carefully the texts of
the circulars involved, he would have readily perceived and known that Circular No.
1318 also contains a substantially similar saving clause as that found in Circular No.
1353, since Section 111 of the former provides:

Sec. 111. Repealing clause. - All existing provisions of Circulars 365,

960 and 1028, including amendments thereto, with the exception of
the second paragraph of Section 68 of Circular 1028, as well as all
other existing Central Bank rules and regulations or parts thereof,
which are inconsistent with or contrary to the provisions of this
Circular, are hereby repealed or modified accordingly: Provided,
however, that regulations, violations of which are the subject of
pending actions or investigations, shall be considered repealed insofar
as such pending actions or investigations are concerned, it being
understood that as to such pending actions or investigations, the
regulations existing at the time the cause of action accrued shall
govern.

The assertion of respondent judge that there was no need to await publication of
Circular No. 1353 for the reason that the public announcement made by the President in
several newspapers of general circulation lifting foreign exchange controls is total,
absolute, without qualification, and immediately effective, is beyond comprehension. As
a judge of the Regional Trial Court of Manila, respondent is supposed to be well-versed
in the elementary legal mandates on the publication of laws before they take effect. It is
inconceivable that respondent should insist on an altogether different and illogical
interpretation of an established and well-entrenched rule if only to suit his own
personal opinion and, as it were, to defend his indefensible action. It was not for him to
indulge or even to give the appearance of catering to the at-times human failing of
24
yielding to first impressions. He having done so, in the face of the foregoing premises,
this Court is hard put to believe that he indeed acted in good faith.

It unequivocally appears from the section above quoted that although Circular No. 1318
repealed Circular No. 960, the former specifically excepted from its purview all cases
covered by the old regulations which were then pending at the time of the passage of
the new regulations. Thus, any reference made to Circular No. 1318 necessarily involves
and affects Circular No. 960.

IV. This is not a simple case of a misapplication or erroneous interpretation of the law.
The very act of respondent judge in altogether dismissing sua sponte the eleven criminal
cases without even a motion to quash having been filed by the accused, and without at
least giving the prosecution the basic opportunity to be heard on the matter by way of a
written comment or on oral argument, is not only a blatant denial of elementary due
process to the Government but is palpably indicative of bad faith and partiality.

III. It has been said that next in importance to the duty of rendering a righteous
judgment is that of doing it in such a manner as will beget no suspicion of the fairness
20
and integrity of the judge. This means that a judge should not only render a just,
correct and impartial decision but should do so in such a manner as to be free from any
suspicion as to its fairness and impartiality and as to his integrity. While a judge should
possess proficiency in law in order that he can competently construe and enforce the
law, it is more important that he should act and behave in such a manner that the
parties before him should have confidence in his impartiality. Thus, it is not enough that
he decides cases without bias and favoritism. Nor is it sufficient that he in fact rids
himself of prepossessions. His actuations should moreover inspire that belief. Like
21
Caesar's wife, a judge must not only be pure but beyond suspicion.
Moreover, it has always heretofore been the rule that in disposing of controverted
cases, judges should show their full understanding of the case, avoid the suspicion of
arbitrary conclusion, promote confidence in their intellectual integrity and contribute
22
useful precedents to the growth of the law. A judge should be mindful that his duty is
the application of general law to particular instances, that ours is a government of laws
and not of men, and that he violates his duty as a minister of justice under such a
system if he seeks to do what he may personally consider substantial justice in a
particular case and disregards the general law as he knows it to be binding on him. Such
action may have detrimental consequences beyond the immediate controversy. He
should administer his office with due regard to the integrity of the system of the law
itself, remembering that he is not a depository of arbitrary power, but a judge under the
23
sanction of the law. These are immutable principles that go into the very essence of
the task of dispensing justice and we see no reason why they should not be duly
considered in the present case.

The avowed desire of respondent judge to speedily dispose of the cases as early as
25
possible is no license for abuse of judicial power and discretion, nor does such
professed objective, even if true, justify a deprivation of the prosecution's right to be
26
heard and a violation of its right to due process of law.
The lightning speed, to borrow the words of complainants, with which respondent judge
resolved to dismiss the cases without the benefit of a hearing and without reasonable
notice to the prosecution inevitably opened him to suspicion of having acted out of
partiality for the accused. Regardless of how carefully he may have evaluated changes in
the factual situation and legal standing of the cases, as a result of the newspaper report,
the fact remains that he gave the prosecution no chance whatsoever to show or prove
that it had strong evidence of the guilt of the accused. To repeat, he thereby effectively
27
deprived the prosecution of its right to due process. More importantly,
notwithstanding the fact that respondent was not sure of the effects and implications of
the President's announcement, as by his own admission he was in doubt whether or not
28
he should dismiss the cases, he nonetheless deliberately refrained from requiring the
prosecution to comment thereon. In a puerile defense of his action, respondent judge
can but rhetorically ask: "What explanation could have been given? That the President
was talking 'through his hat' and should not be believed? That I should wait for the
publication of a still then non- existent CB Circular?" The pretended cogency of this
ratiocination cannot stand even the minutest legal scrutiny.
In order that bias may not be imputed to a judge, he should have the patience and
circumspection to give the opposing party a chance to present his evidence even if he
thinks that the oppositor's proofs might not be adequate to overthrow the case for the
other party. A display of petulance and impatience in the conduct of the trial is a norm

29

of conduct which is inconsistent with the "cold neutrality of an impartial judge." At

the very least, respondent judge acted injudiciously and with unjustified haste in the
outright dismissal of the eleven cases, and thereby rendered his actuation highly
dubious.
V. It bears stressing that the questioned order of respondent judge could have seriously
and substantially affected the rights of the prosecution had the accused invoked the
defense of double jeopardy, considering that the dismissal was ordered after
arraignment and without the consent of said accused. This could have spawned legal
complications and inevitable delay in the criminal proceedings, were it not for the
holding of the Court of Appeals that respondent judge acted with grave abuse of
discretion amounting to lack of jurisdiction. This saved the day for the People since in
the absence of jurisdiction, double jeopardy will not set in. To stress this point, and as
acaveat to trial courts against falling into the same judicial error, we reiterate what we
have heretofore declared:
It is settled doctrine that double jeopardy cannot be invoked against
this Court's setting aside of the trial court's judgment of dismissal or
acquittal where the prosecution which represents the sovereign
people in criminal cases is denied due process. . . . .
Where the prosecution is deprived of a fair opportunity to prosecute
and prove its case, its right to due process is thereby violated.
The cardinal precept is that where there is a violation of basic
constitutional rights, courts are ousted of their jurisdiction. Thus, the
violation of the State's right to due process raises a serious
jurisdictional issue . . . which cannot be glossed over or disregarded at
will. Where the denial of the fundamental right of due process is
apparent, a decision rendered in disregard of that right is void for lack
30
of jurisdiction . . . .
It is also significant that accused Marcos, despite due notice, never submitted either her
comment on or an answer to the petition for certiorari as required by the Court of
Appeals, nor was double jeopardy invoked in her defense. This serves to further
underscore the fact that the order of dismissal was clearly unjustified and erroneous.
Furthermore, considering that the accused is a prominent public figure with a record of
influence and power, it is not easy to allay public skepticism and suspicions on how said
dismissal order came to be, to the consequent although undeserved discredit of the
entire judiciary.
VI. To hold a judge liable for rendering a manifestly unjust order through inexcusable
negligence or ignorance, it must be clearly shown that although he has acted without
malice, he failed to observe in the performance of his duty that diligence, prudence and
care which the law is entitled to exact in the rendering of any public service. Negligence
and ignorance are inexcusable if they imply a manifest injustice which cannot be

explained by a reasonable interpretation, and even though there is a misunderstanding

or error of the law applied, it nevertheless results logically and reasonably, and in a very
31
clear and indisputable manner, in the notorious violation of the legal precept.
In the present case, a cursory perusal of the comment filed by respondent judge reveals
that no substantial argument has been advanced in plausible justification of his act. He
utterly failed to show any legal, factual, or even equitable justification for the dismissal
of the eleven criminal cases. The explanation given is no explanation at all. The strained
and fallacious submissions therein do not speak well of respondent and cannot but
further depreciate his probity as a judge. On this point, it is best that pertinent unedited
32
excerpts from his comment be quoted by way of graphic illustration and emphasis:
On the alleged ignorance of the law imputed to me, it is said that I
issued the Order dismissing the eleven (11) cases against Mrs. Imelda
R. Marcos on the basis of newspaper reports referred to in paragraph
2 of the letter complaint without awaiting the official publication of
the Central Bank Circular. Ordinarily a Central Bank Circular/Resolution
must be published in the Official Gazette or in a newspaper of general
circulation, but the lifting of "all foreign exchange controls" was
announced by the President of the Philippines WITHOUT
QUALIFICATIONS; as published in the Daily Globe, August 11, 1992"
the government has lifted ALL foreign exchange controls," and in the
words of the Philippine Daily Inquirer report of the same date "The
government yesterday LIFTED the LAST remaining restrictions on
foreign exchange transactions, . . ." (emphasis in both quotations
supplied) not only the President made the announcement but also the
Central Bank Governor Jose Cuisia joined in the announcement by
saying that "the Monetary Board arrived at the decision after noting
how the "partial liberalization" initiated early this year worked."
Therefore, because of the ABSOLUTE lifting of ALL restrictions on
foreign exchange transactions, there was no need to await the
publication of the repealing circular of the Central Bank. The purpose
of requiring publication of laws and administrative rules affecting the
public is to inform the latter as to how they will conduct their affairs
and how they will conform to the laws or the rules. In this particular
case, with the total lifting of the controls, there is no need to await
publication. It would have been different if the circular that in effect
repealed Central Bank Circular No. 960, under which the accused was
charged in the cases dismissed by me, had provided for penalties
and/or modified the provisions of said Circular No. 960.
The Complainants state that the lifting of controls was not yet in force
when I dismissed the cases but it should be noted that in the report of
the two (2) newspapers aforequoted, the President's announcement
of the lifting of controls was stated in the present perfect tense

(Globe) or past tense (Inquirer). In other words, it has already been

lifted; the announcement did not say that the government INTENDS to
lift all foreign exchange restrictions but instead says that the
government "has LIFTED all foreign exchange controls," and in the
other newspaper cited above, that "The government yesterday lifted
the last remaining restrictions on foreign exchange transactions". The
lifting of the last remaining exchange regulations effectively cancelled
or repealed Circular No. 960.
The President, who is the Chief Executive, publicly announced the
lifting of all foreign exchange regulations. The President has within his
control directly or indirectly the Central Bank of the Philippines, the
Secretary of Finance being the Chairman of the Monetary Board which
decides the policies of the Central Bank.
No official bothered to correct or qualify the President's
announcement of August 10, published the following day, nor made
an announcement that the lifting of the controls do not apply to cases
already pending, not until August 17 (the fourth day after my Order,
and the third day after report of said order was published) and after
the President said on August 17, reported in the INQUIRER's issue of
August 18, 1992, that the "new foreign exchange rules have nullified
government cases against Imelda R. Marcos, telling reporters that the
charges against the widow of former President Marcos "have become
moot and academic" because of new ruling(s) which allow free flow of
currency in and out of the country" (Note, parenthetically, the
reference to "new rules" not to "rules still to be drafted"). The
INQUIRER report continues: "A few hours later, presidential
spokeswoman Annabelle Abaya said, RAMOS (sic) had "corrected
himself'." "He had been belatedly advised by the Central Bank
Governor Jose Cuisia and Justice Secretary Franklin Drilon that the
Monetary Board Regulation excluded from its coverage all criminal
cases pending in court and such a position shall stand legal scrutiny',
Mrs. Abaya, said."
I will elaborate on two points:
1. If the President was wrong in making the August 10 announcement
(published in August 11, 1992, newspapers) and in the August 17
announcement, SUPRA, and thus I should have relied on the
Presidential announcements, and there is basis to conclude that the
President was at the very least ILL-SERVED by his financial and legal
advisers, because no one bothered to advise the President to correct
his announcements, not until August 17, 1992, a few hours after the
President had made another announcement as to the charges against
Imelda Marcos having been rendered moot and academic. The

President has a lot of work to do, and is not, to my knowledge, a

financier, economist, banker or lawyer. It therefore behooved his
subalterns to give him timely (not "belated") advice, and brief him on
matters of immediate and far-reaching concerns (such as the lifting of
foreign exchange controls, designed, among others to encourage the
entry of foreign investments). Instead of rescuing the Chief Executive
from embarrassment by assuming responsibility for errors in the
latter's announcement, these advisers have chosen to toss the blame
for the consequence of their failing to me, who only acted on the basis
of announcements of their Chief, which had become of public
knowledge.
xxx xxx xxx
The Court strongly feels that it has every right to assume and expect that respondent
judge is possessed with more than ordinary credentials and qualifications to merit his
appointment as a presiding judge in the Regional Trial Court of the National Capital
Judicial Region, stationed in the City of Manila itself. It is, accordingly, disheartening and
regrettable to note the nature of the arguments and the kind of logic that respondent
judge would want to impose on this Court notwithstanding the manifest lack of cogency
thereof. This calls to mind similar scenarios and how this Court reacted thereto.
In one case, an RTC Judge was administratively charged for acquitting the accused of a
violation of CB Circular No. 960 despite the fact that the accused was apprehended with
US$355,349.00 while boarding a plane for Hongkong, erroneously ruling that the State
must first prove criminal intent to violate the law and benefit from the illegal act, and
further ordering the return of US$3,000.00 out of the total amount seized, on the
mistaken interpretation that the CB circular exempts such amount from seizure.
Respondent judge therein was ordered dismissed from the government service for gross
33
incompetence and ignorance of the law.
Subsequently, the Court dismissed another RTC judge, with forfeiture of retirement
benefits, for gross ignorance of the law and for knowingly rendering an unjust order or
judgment when he granted bail to an accused charged with raping an 11-year old girl,
despite the contrary recommendation of the investigating judge, and thereafter granted
34
the motion to dismiss the case allegedly executed by the complainant.
Similarly, an RTC judge who was described by this Court as one "who is ignorant of fairly
elementary and quite familiar legal principles and administrative regulations, has a
marked penchant for applying unorthodox, even strange theories and concepts in the
adjudication of controversies, exhibits indifference to and even disdain for due process
and the rule of law, applies the law whimsically, capriciously and oppressively, and
displays bias and impartiality," was dismissed from the service with forfeiture of all
retirement benefits and with prejudice to reinstatement in any branch of the
35
government or any of its agencies or instrumentalities.

Still in another administrative case, an RTJ judge was also dismissed by this Court for
gross ignorance of the law after she ordered, in a probate proceeding, the cancellation
of the certificates of title issued in the name of the complainant, without affording due
36
process to the latter and other interested parties.
Only recently, an RTC judge who had been reinstated in the service was dismissed after
he acquitted all the accused in four criminal cases for illegal possession of firearms, on
the ground that there was no proof of malice or deliberate intent on the part of the
accused to violate the law. The Court found him guilty of gross ignorance of the law, his
error of judgment being almost deliberate and tantamount to knowingly rendering an
37
incorrect and unjust judgment.
ACCORDINGLY, on the foregoing premises and considerations, the Court finds
respondent Judge Manuel T. Muro guilty of gross ignorance of the law. He is hereby
DISMISSED from the service, such dismissal to carry with it cancellation of eligibility,
forfeiture of leave credits and retirement benefits, and disqualification from
38
reemployment in the government service.
Respondent is hereby ordered to CEASE and DESIST immediately from rendering any
judgment or order, or continuing any judicial action or proceeding whatsoever, effective
upon receipt of this decision.
SO ORDERED.
Narvasa, Cruz, Feliciano, Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo,
Quiason, Puno, Vitug and Kapunan, JJ., concur.
Bidin, is on official leave.

report recommending that applicant be order[ed] to amend his petition by

including the names and complete postal addresses of the adjoining owners
and correcting the discrepancy regarding the boundary lot number along line 23 of Lot 6846-D on plan Csd-04-005516-D. On order of respondent Court [trial
court], the petition was accordingly amended.

Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 98328 October 9, 1997
JUAN C. CARVAJAL, petitioner,
vs.
COURT OF APPEALS and SOLID HOMES, INC., respondents.
PANGANIBAN, J.:
Is there denial of due process if an applicant for land registration is unable to testify?
May a land registration court, after it is convinced that the property subject of an
application for registration under the torrens system is already covered by an existing
certificate, dismiss such application and thus ignore petitioner's insistence on submitting
further evidence of his alleged title? What constitutes sufficient evidence to show
identity of the land applied for with the land already titled in favor of private
respondent?
The Case
These are the main questions raised in this petition for review assailing the November
1
2
29, 1990 Decision of the Court of Appeals in CA-G.R. SP No. 18318, the dispositive
portion of which reads:
WHEREFORE, in view of the foregoing, let this petition be, as it is hereby
3
DISMISSED.
4

This petition also impugns the April 25, 1991 Court of Appeals Resolution which denied
reconsideration.
The Facts
The facts found by public respondent are as follows:

Petitioner is the applicant in a land registration case filed with Branch 71,
Regional Trial Court of the Fourth Judicial Region stationed in Antipolo, Rizal.
Sought to be brought by petitioner under the operation of the Land
Registration Act (Act No. 496) is a 96,470 square meter lot denominated as Lots
6846-A, 6846-B, 6846-C and 6846-D. Copies of the application were ordered by
respondent Court to be furnished (to) the National Land Titles and Deeds
Registration Administration (NLTDRA) which on March 18, 1987 submitted a

After the NLTDRA was notified that the case is [sic] initially set for hearing on
December 7, 1987, the Acting Chief, Docket Division of the NLRDRA [sic]
submitted another report recommending that petitioner be ordered to refer to
the Bureau of Lands for corrections of the discrepancy existing in the
directional bearing and area of Lot 6846-D, Csd-04-005516-D. The technical
descriptions as corrected by the Bureau of Lands was [sic] submitted and the
application was initially set for hearing on April 26, 1988. The "Notice of Initial
Hearing" stating that the application was set forbe [sic] heard on April 26, 1988
was thereafter issued by the NLTDRA.
On June 1, 1988, an order of general default was issued by respondent Court.
Exempted from the order was one Annie Jimenez who filed an opposition to
the application. On June 22, 1988, private respondent Solid Homes, Inc. filed its
opposition stating that a land registered in its name under the Torrens System
and covered by then TCT No. N-7873 is almost identical to the property subject
of the application by petitioner. The opposition was not admitted considering
that no motion to set aside the order of general default was filed by private
respondent.
On June 28, 1988, private respondent filed a motion to lift the order of general
default and to admit its opposition on the ground that its right would be
adversely affected by the application. Acting on the motion and in order to
avoid duplicity, the NLTDRA was directed to make the plotting of the relative
position of the property covered by LRC Psd-245998 and embraced in TCT No.
N-7873 and to submit its plotting to the Court for its guidance. In the same
order dated July 1, 1988, respondent Court in the interest of justice set aside
the order of general default in so far as private respondent was concerned and
admitted private respondent's opposition.
On January 10, 1989, petitioner filed a motion praying that the opposition of
private respondent be dismissed for the reason that the order issued by
respondent court directing the NLRTDA [sic] to make a plotting of the land in
question on the basis of the title submitted by the Registry of Deeds of
Marikina Branch Manila released the private respondent from the duty and
obligation of presenting evidence to prove that the land applied for is private
and that there is apparent lack of interest on the part of private respondent to
pursue its claim on account of its non-appearance despite the lapse of more
than six months or to introduce evidence that will show that the land in
question is covered by the alleged torrens certificate of title.

During the hearings conducted on September 13, 1988, September 27, 1988,
October 4, 1988, October 11, 1988, October 11, 1988, November 22, 1988,
December 6, 1988, petitioner presented his evidence on the question as to
whether or not he had a registrable right over the land in question.
Pursuant to the court order dated July 1, 1988 directing the NLTDRA to make
the plotting of the relative position of the property covered by LRC Psd-245998
and embraced in TCT No. N-7873, the Land Registration Authority submitted a
report dated December 22, 1986 [should be 1988] recommending that, after
due hearing, the application for registration of petitioner be dismissed. The
application was thus dismissed by respondent court in an order dated January
2, 1989. Considering, however, that the recommendation is [sic] for dismissal
after due hearing, respondent judge issued an order dated January 10, 1989
setting for hearing on January 24, 1989 the "Report" submitted by the Land
Registration Authority. The hearing proceeded on February 8, 1989 with Engr.
Silverio G. Perez, Chief, Department on Registration, Land Registration
Authority being presented in connection with his "Report" recommending the
dismissal of the application after due hearing. On February 28, 1989, the
petitioner's application for registration was dismissed.
On March 13, 1989, petitioner filed his motion to reconsider the February 28,
1989 dismissal of the application for registration to which private respondent
filed an opposition dated March 20, 1989. The motion for reconsideration was
denied in an order dated March 4, 1989.
On May 2, 1989 petitioner filed a second motion to reconsider the dismissal of
his petition. On May 8, 1989, question to respondent judge issued an order
requiring the parties as well as the engineers from the Land Registration
Commission and the DENR to appear before respondent Court on June 5, 1989.
The engineer from the Land Registration Commission was likewise directed to
inform the court whether the property applied for by petitioner is indeed inside
the titled property of private respondent.
After the Land Registration Authority submitted a report showing that there
was indeed an overlapping of the four (4) parcels of land applied for by
petitioner and the properties of Solid Homes under TCT 7873 and considering
that the properties applied for are [sic] within the titled property and could not
be the subject of an application for registration, the second motion to
reconsider the dismissal of the application for registration was denied in an
order dated July 5, 1989.
As earlier stated, the Court of Appeals affirmed the dismissal of the application for
registration, and denied the subsequent motion for reconsideration. Hence, this
recourse to this Court via Rule 45 of the Rules of Court.
The Issues

Petitioner submits the following issues:

1. Whether or not an actual ground verification survey is required to establish

the identity of the two parcels of land or whether TCT No. 7873 under Plan FP1540 of Solid Homes Inc., situated in Barangay Mayamot, Antipolo, Rizal is
identical or similar to Lots 6846-A to 6846-D inclusive Cad. 585, Lungsod
Silangan, Cadastre, situated in Mambogan, Antipolo, Rizal applied for under
LRC Case No. 414 (-A), LRC Record No. N-60084;
2. Whether or not the petitioner was given (the) chance and the opportunity to
be heard or allowed to fully introduce his evidence in the (proceeding) for Land
Registration and (to) rest (his) case;
3. Whether the decision of the Honorable Court of Appeals is reversible.
Petitioner alleges that the "table survey" made by the Land Registration Authority and
the geodetic engineer of the Land Management Bureau cannot serve as basis "for
identifying" his land. "On the other hand, petitioner was able to establish the identity"
of the land he applied for by "actual ground survey which was approved by the Director
of Lands and reprocessed by the Land Registration Authority." He claims that if said land
is "covered by private respondent's title, the Director of Lands and/or Regional Director
will no(t) approve the survey." Petitioner also argues that the land in question is
situated in "Mambogan, Antipolo, Rizal" while that of private respondent is in
"Mayamot, Antipolo, Rizal." Survey Plan "FP-1540," which served as basis of private
respondent's certificate of title, cannot be found; hence, according to petitioner, the
"table survey" was anomalous. Petitioner adds that the "matter entirely wanting in this
7
case (is) the identity or similarity of the realties." Petitioner concludes that the trial
court should have ordered "actual ocular inspection and ground verification survey" of
the properties involved.
Petitioner further maintains that he was denied due process when he, as an applicant in
a land registration case, was not able to take the witness stand. According to petitioner,
even his counsel hardly participated in the proceeding except to propound clarificatory
questions during the examination of Engineer Silverio Perez of the Land Registration
8
Authority.
Public respondent justified its dismissal of the appeal in this wise:

Land already decreed and registered in an ordinary registration proceeding

cannot again be subject of adjudication or settlement in a subsequent
conducted proceeding (Land Titles and Deeds by Noblejas, 1968 Revised
Edition, page 96). The "Report" submitted by the Land Registration Authority
(Annex "B") and the Survey Division of the DENR (Annex "RR") both indicate an
overlapping of the lot applied for by petitioner and the lot covered by TCT N7873 owned by private respondent Solid Homes, Inc. Even if petitioner were
allowed to continue with the presentation of his evidence, the end result would

still be the dismissal of his application for registration. Respondent Judge was
therefore justified in cutting short the proceeding as the time to be spent in
hearing petitioner's application could be used disposing the other cases
pending with respondent court.
Anent the allegation that private respondent Solid Homes did not actively
participate in the trials conducted to hear his evidence, suffice it to state that it
is counsel's prerogative to determine how he intends to pursue his case.
The Court's Ruling
The petition has no merit.
First Issue: Identity of the Property Applied For
We are not persuaded that the land petitioner applied for was not identical to private
respondent's land which was already covered by a torrens certificate of title. The two
reports prepared by the Land Registration Authority and the DENR Survey Division
clearly showed that there was an overlapping between the two properties. Because the
futility of petitioner's application was apparent, the trial court deemed it unnecessary to
hear further evidence. We agree.
At the outset, we stress that there was nothing irregular in the order given by the trial
court to the Land Registration Authority and the Survey Division of the DENR to submit
reports on the location of the land covered by petitioner's application and private
respondent's certificate of title. The authority of the land registration court to require
the filing of additional papers to aid it in its determination of the propriety of the
10
application was based on Section 21 of PD 1529:
Sec. 21. Requirement of additional facts and papers; ocular inspection. The
court may require facts to be stated in the application in addition to those
prescribed by this Decree not inconsistent therewith and may require the filing
of any additional papers. It may also conduct an ocular inspection, if necessary.
From the above provision, it is also clear that ocular inspection of the property applied
for was only discretionary, not mandatory. Likewise, the land registration court was not
obliged to order the survey of the contested lot, especially when another government
agency had already submitted a report finding that the contested lot was identical with
that described in private respondent's certificate of title and recommending the
dismissal of the application for registration.
Further, the order of the land registration court for the LRA and DENR to submit reports
11
was in accordance with the purposes of the Land Registration Law:

The purposes of the land registration law, in general, are: "to ascertain once
and for all the absolute title over a given landed property; to make, so far as it
is possible, a certificate of title issued by the court to the owner of the land
absolute proof of such title; to quiet title to the land and to put a stop forever
to any question of legality to a title; and to decree that land title to be final,
irrevocable and, undisputable. (citing Benen vs. Tuason, L-26127, June 28,
1974, 57 SCRA 531.)
It is true that a court of first instance acting as a land registration court has
limited and special jurisdiction. It can not be denied, however, that when the
law confers jurisdiction upon a court, the latter is deemed to have all the
necessary powers to exercise such jurisdiction to make it effective. (citing
Marcelino vs. Antonio, 70 Phil. 388, 391.) The purpose of the applicant is to
prove that he has an absolute or simple title over the property sought to be
registered, otherwise his application will be denied. An absolute oppositor
claims a dominical right totally adverse to that of the applicant. If successful,
registration will be decreed in favor of the oppositor. As to whether or not
private respondents have absolute or fee simple title over the property sought
to be registered necessarily requires a resolution of the question as to whether
or not the oppositors had a dominical right totally adverse to that of the
applicants. . . . .
Based on the reports submitted, the land registration court correctly dismissed the
application for original land registration. An application for registration of an already
titled land constitutes a collateral attack on the existing title. It behooves a land
registration court to determine the veracity of any and all adverse claims, bearing in
mind Section 46 of Act No. 496 which provides that "(n)o title to registered land in
derogation to that of the registered owner shall be acquired by prescription or adverse
possession." The trial court's order to the LRA and DENR was a mere cautionary
measure in cognizance of the well-settled rule that a torrens title cannot be collaterally
attacked. In other words, the title may be challenged only in a proceeding for that
purpose, not in an application for registration of a land already registered in the name
of another person. After one year from its registration, the title is incontrovertible and is
no longer open to review. The remedy of the landowner, whose property has been
wrongfully or erroneously registered in another's name, is to institute an ordinary action
for reconveyance or if the property has passed into the hands of an innocent
12
purchaser for value for damages. In view of the nature of a torrens title, a land
registration court has the duty to determine whether the issuance of a new certificate
alters a valid and existing certificate of title.
Contrary to petitioner's contention, the approval by the assistant chief of the Bureau of
Lands Survey Division of the survey conducted on the land applied for by petitioner did
not prove that the said land was not covered by any title. It merely showed that such
land has been surveyed and its boundaries have been determined.

Also noteworthy is the finding of public respondent that "the same order (issued by the
land registration court) [which set] aside the order (of) general default insofar as private
respondent Solid Homes, Inc. was concerned, directed the NLTDRA to make the plotting
of
the
relative
position
of
the
property covered by LRC Psd-245998 and [that which was] embraced in TCT No. N13
14
7873." The intention of the land registration court was to avoid "duplicity," that is,
to rule out the possibility that the land he sought to register was already covered by a
certificate of title. In this case, the land he applied for was found to be within the land
described in private respondent's transfer certificate of title.
Petitioner also alleges that the land he applied for was located in Barangay Mambogan,
while the registered land of private respondent was in Barangay Mayamot. In his reply
filed with public respondent, however, he himself admitted that "Barangay Mambogan
is a part of Barangay Mayamot [which is] a bigger barrio in Antipolo, Rizal, and Mayamot
15
covers a big parcel of land running from Antipolo up to Marikina." In view of
petitioner's declaration, it was not impossible for the land owned by private respondent
to be located in Barangay Mayamot and in Barangay Mambogan. At any rate, whether
the two lands are located in Mambogan or Mayamot or both is a factual question, and
its resolution by the trial and the appellate courts is binding on this Court. Petitioner
failed to provide a reason, let alone an adequate one, to justify the reversal of such
finding of the lower courts.
Petitioner also argues that the plotting made by NLTDRA was "anomalous" because
Survey Plan FP-1540, on which private respondent's title was based, could not be
located. This argument lacks merit. The law does not require resorting to a survey plan
to prove the true boundaries of a land covered by a valid certificate of title; the title
itself is the conclusive proof of the realty's metes and bounds. Section 47 of the Land
Registration Act, or Act No. 496, provides that "(t)he original certificates in the
registration book, any copy thereof duly certified under the signature of the clerk, or of
the register of deeds of the province or city where the land is situated, and the seal of
the court, and also the owner's duplicate certificate, shall be received as evidence in all
the courts of the Philippine Islands and shall be conclusive as to all matters contained
therein except so far as otherwise provided in this Act." It has been held that a
certificate of title is conclusive evidence with respect to the ownership of the land
described therein and other matters which can be litigated and decided in land
16
17
registration proceedings. Thus, this Court in Odsigue vs. Court of Appeals ruled:
. . . . Petitioner contends that private respondents have not identified the
property sought to be recovered as required by Art. 434 of the Civil Code. He
alleges that Sitio Aduas, where the land in question is located, is at the
boundary of Barangay May-Iba, Teresa, Rizal, and Barangay Lagundi, Morong,
Rizal. On the other hand, petitioner maintains, the parcel of land he is
occupying is located in Barangay May-Iba. He claims that the technical
description in the title does not sufficiently identify the property of private
respondent and that a geodetic survey to determine which of his

improvements should be demolished should first have been conducted by the

private respondent. . . .
But private respondent's title (OCT No. 4050) indicates that the property is
located in Barangay Lagundi. Likewise, the certification issued by the Municipal
Agrarian Reform Officer at Morong, Rizal stated that petitioner was occupying a
landholding at Barangay Lagundi.
For our purposes, a survey is not necessary. A certificate of title is conclusive
evidence not only of ownership of the land referred but also its location. The
subject of these proceedings is the land covered by OCT No. 4050. Accordingly,
petitioners required to demolish only whatever is constructed within its
boundaries. (Emphasis supplied.)
The old case of Legarda and Prieto vs. Saleeby
certificate of title, as follows:

18

explains the nature of a torrens

. . . . The registration, under the torrens system, does not give the owner any
better title than he had. If he does not already have a perfect title, he can not
have it registered. Fee simple titles only may be registered. The certificate of
registration accumulates in one document a precise and correct statement of
the exact status of the fee held by its owner. The certificate, in the absence of
fraud, is the evidence of title and shows exactly the real interest of its owner.
The title once registered, with very few exceptions, should not thereafter be
impugned, altered, changed, modified, enlarged, or diminished, except in some
direct proceeding permitted by law. Otherwise all security in registered titles
would be lost. A registered title can not be altered, modified, enlarged, or
diminished in a collateral proceeding and not even by a direct proceeding, after
the lapse of the period prescribed by law.
All in all, the land registration court did not err in relying on the certificate of title
instead of the survey plan; likewise, the appellate court did not commit any reversible
error in affirming the trial court's decision.
Second Issue: Denial of Due Process
Petitioner claims that he was denied due process because he was unable to take the
witness stand. We disagree. The essence of due process is the opportunity to be heard.
19
It is the denial of this opportunity that is repugnant to due process. In this case,
petitioner was afforded an opportunity to present witnesses, and he did present three.
However, petitioner did not invoke his right to take the witness stand even when the
trial court ordered the submission of the parties' memoranda which signified the
termination of the proceedings. Because he acquiesced to the termination of the case,
he forfeited his right to take the witness stand.

Likewise, we are not persuaded by his allegation that his own counsel hardly
participated in the proceedings. The records show that said counsel did cross-examine
Engineer Silverio Perez by propounding clarificatory questions to the latter. In any
event, the client is generally bound by the acts of his counsel. Petitioner has not shown
at all that his previous counsel had acted in such grossly negligent manner as to deprive
20
him of effective representation, or of due process.
In support of his contention, petitioner cites Tinora vs. Naawa

21

which held:

We hold the view, however that respondent Judge erred when he ordered the
dismissal of the registration case over the objection of the oppositors; and
when he refused to reconsider the order of dismissal and reinstate the case he
had neglected to perform an act which the law enjoins as a duty resulting from
an office, and had thereby deprived the oppositors of a right to which they are
entitled.
Such ruling finds no application to the present case, because neither Respondent
Mariano Raymundo (the applicant in the land registration case) nor Petitioner
Constantino Tirona (the oppositor in the cited case) was a holder of any certificate of
title over the land intended for registration. Such being the case, the land registration
22
court was ordered to act in accordance with Section 37 of Act No. 496 either by
dismissing the application if none of the litigants succeeded in showing a proper title, or
by entering a decree awarding the land applied for to the person entitled thereto.
WHEREFORE, premises considered, the petition is hereby DENIED and the assailed
Decision and Resolution are AFFIRMED. Costs against petitioner.
SO ORDERED.
Narvasa, C.J., Romero, Melo and Francisco, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 121234 August 23, 1995
HUBERT J. P. WEBB, petitioner,
vs.
HONORABLE RAUL E. DE LEON, the Presiding Judge of the Regional Trial Court of
Paraaque, Branch 258, HONORABLE ZOSIMO V. ESCANO, the Presiding Judge of the
Regional Trial Court of Paraaque, Branch 259, PEOPLE OF THE PHILIPPINES, ZENON L.
DE GUIA, JOVENCITO ZUO, LEONARDO GUIYAB, JR., ROBERTO LAO, PABLO
FORMARAN, and NATIONAL BUREAU OF INVESTIGATION, and HONORABLE AMELITA
G. TOLENTINO, the Presiding Judge of the Regional Trial Court of Paraaque, Branch
274, respondents, LAURO VIZCONDE, intervenor.
G.R. No. 121245 August 23, 1995
MICHAEL A. GATCHALIAN, petitioner,
vs.
HONORABLE RAUL E. DE LEON, the Presiding Judge of the Regional Trial Court of
Paraaque, Branch 258, HONORABLE ZOSIMO V. ESCANO, the Presiding Judge of the
Regional Trial Court of Paraaque, Branch 259, PEOPLE OF THE PHILIPPINES, ZENON L.
DE GUIYAB, JR., ROBERTO LAO, PABLO FORMARAN, and NATIONAL BUREAU OF
INVESTIGATION, and HONORABLE AMELITA G. TOLENTINO, the Presiding Judge of the
Regional Trial Court of Paraaque, Branch 274, respondents.
G.R. No. 121297 August 23, 1995
ANTONIO L. LEJANO, petitioner,
vs.
HONORABLE RAUL E. DE LEON, the Presiding Judge of the Regional Trial Court of
Paraaque, Branch 258, HONORABLE ZOSIMO V. ESCANO, the Presiding Judge of the
Regional Trial Court of Paraaque, Branch 259, PEOPLE OF THE PHILIPPINES, ZENON L.
DE GUIA, JOVENCITO ZUO, LEONARDO GUIYAB, JR., ROBERTO LAO, PABLO
FORMARAN, and NATIONAL BUREAU OF INVESTIGATION, and HONORABLE AMELITA
G. TOLENTINO, the Presiding Judge of the Regional Trial Court of Paraaque, Branch
274,respondents.
PUNO, J.:
Before the Court are petitions for the issuance of the extraordinary writs of certiorari,
prohibition and mandamuswith application for temporary restraining order and

preliminary injunction to: (1) annul and set aside the Warrants of Arrest issued against
petitioners by respondent Judges Raul E. de Leon and Amelita Tolentino in Criminal Case
No. 95-404; (2) enjoin the respondents from conducting any proceeding in the
aforementioned criminal case; and (3) dismiss said criminal case or include Jessica Alfaro
1
as one of the accused therein.
From the records of the case, it appears that on June 19, 1994, the National Bureau of
Investigation (NBI) filed with the Department of Justice a letter-complaint charging
petitioners Hubert Webb, Michael Gatchalian, Antonio J. Lejano and six (6) other
2
persons, with the crime of Rape with Homicide. Forthwith, the Department of Justice
formed a panel of prosecutors headed by Assistant Chief State Prosecutor Jovencio R.
3
Zuo to conduct the preliminary investigation of those charged with the rape and
4
killing on June 30, 1991 of Carmela N. Vizconde; her mother Estrellita Nicolas5
6
Vizconde, and her sister Anne Marie Jennifer in their home at Number 80 W. Vinzons,
St., BF Homes, Paraaque, Metro Manila.
During the preliminary investigation, the NBI presented the following: (1) the sworn
statement dated May 22, 1995 of their principal witness, Maria Jessica M. Alfaro who
7
allegedly saw the commission of the crime; (2) the sworn statements of two (2) of the
former housemaids of the Webb family in the persons of Nerissa E. Rosales and Mila
8
S.Gaviola; (3) the sworn-statement of Carlos J. Cristobal who alleged that on March 9,
1991 he was a passenger of United Airlines Flight No. 808 bound for New York and who
expressed doubt on whether petitioner Webb was his co-passenger in the trip; (4) the
sworn statement of Lolita Birrer, a former live-in partner of Gerardo Biong, who
narrated the manner of how Biong investigated and tried to cover up the crime at
9
bar; (5) the sworn statements of Belen Dometita and Teofilo Minoza, two of the
Vizconde maids, and the sworn statements of Normal White, a security guard
and Manciano Gatmaitan, an engineer. The autopsy reports of the victims were also
submitted and they showed that Carmela had nine (9) stab wounds, Estrellita twelve
10
(12) and Jennifer nineteen (19). The genital examination of Carmela confirmed the
11
presence of spermatozoa.
Before submitting his counter-affidavit, petitioner Webb filed with the DOJ Panel a
Motion for Production And Examination of Evidence and Documents for the NBI to
produce the following:
(a) Certification issued by the U.S. Federal Bureau of Investigation on the
admission to and stay of Hubert Webb in the United States from March 9, 1991
to October 22, 1992;
(b) Laboratory Report No. SN-91-17 of the Medico Legal Officer, Dr. Prospero A.
Cabanayan, M.D.;
(c) Sworn Statements of Gerardo C. Biong (other than his Sworn Statement
dated October 7, 1991);

(d) Photographs of fingerprints lifted from the Vizconde residence taken during
the investigation;
(e) Investigation records of NBI on Engr. Danilo Aguas, et al.;
(f) List of names of 135 suspects/persons investigated by the NBI per Progress
Report dated September 2, 1991 submitted by Atty. Arlis Vela, Supervising
Agent;
(g) Records of arrest, interview, investigation and other written statements of
Jessica Alfaro (other than the May 22, 1995 Sworn Statement) conducted by
the NBI and other police agencies;
(h) transmittal letter to the NBI, including the report of the investigation
conducted by Superintendent Rodolfo C. Sison, Regional Deputy Director,
NCRC;
(i) The names of NBI officials/agents composing the Task Force Jecares,
including their respective positions and duties;
(j) Statements made by other persons in connection with the crime charged.
The motion was granted by the DOJ Panel and the NBI submitted photocopies of the
documents. It alleged it lost the original of the April 28, 1995 sworn statement of Alfaro.
This compelled petitioner Webb to file Civil Case No. 951099 in the Regional Trial Court
(RTC) of Makati, Br. 63, for the purpose, among others, of obtaining the original of said
sworn statement. He succeeded, for in the course of its proceedings, Atty. Arturo L.
Mercader, Jr., produced a copy of said original in compliance with a subpoena duces
tecum. The original was then submitted by petitioner Webb to the DOJ Panel together
with his other evidence. It appears, however, that petitioner Webb failed to obtain from
the NBI the copy of the Federal Bureau of Investigation (FBI) Report despite his request
for its production.
Petitioner Webb claimed during the preliminary investigation that he did not commit
the crime at bar as he went to the United States on March 1, 1991 and returned to the
12
Philippines on October 27, 1992. His alibi was corroborated by Honesto Aragon,
Lecinia Edrosolano, Sylvia Climaco, Gina Roque, Sonia Rodriguez, Edgardo Venture and
13
Pamela Francisco. To further support his defense, he submitted documentary
evidence that he bought a bicycle and a 1986 Toyota car while in the United States on
14
said dates and that he was issued by the State of California Driver's License No.
15
A8818707 on June 14, 1991. Petitioner Webb likewise submitted the letter dated July
25, 1995 of Mr. Robert Heafner, Legal Attache of the US Embassy, citing certain records
tending to confirm, among others, his arrival at San Francisco, California on March 9,
1991 as a passenger in United Airlines Flight No. 808.

The other respondents Hospicio "Pyke" Fernandez, Michael Gatchalian, Antonio

"Tony Boy" Lejano, Peter Estrada, Miguel Rodriguez and Gerardo Biong submitted
sworn statements, responses, and a motion to dismiss denying their complicity in the
16
rape-killing of the Vizcondes. Only the respondents Joey Filart and Artemio "Dong"
Ventura failed to file their counter-affidavits though they were served with subpoena in
17
their last known address. In his sworn statement, petitioner Gatchalian alleged that
from 11 o'clock in the evening of June 29, 1991 until 3 o'clock in the morning of the
following day, he was at the residence of his friends, Carlos and Andrew Syyap, at New
Alabang Village, Muntinlupa watching video tapes. He claimed that his copetitioner Lejano was with him.
On August 8, 1995, the DOJ Panel issued a 26-page Resolution "finding probable cause
to hold respondents for trial" and recommending that an Information for rape with
18
homicide be filed against petitioners and their co-respondents, On the same date, it
19
filed the corresponding Information against petitioners and their co-accused with the
Regional Trial Court of Paraaque. The case was docketed as Criminal Case No. 95-404
and raffled to Branch 258 presided by respondent judge Zosimo V. Escano. It was,
however, the respondent judge Raul de Leon, pairing judge of Judge Escano, who issued
the warrants of arrest against the petitioners. On August 11, 1995, Judge Escano
voluntarily inhibited himself from the case to avoid any suspicion about his impartiality
considering his employment with the NBI before his appointment to the bench. The case
was re-raffled to Branch 274, presided by Judge Amelita Tolentino who issued new
warrants of arrest against the petitioners and their co-accused. On August 11, 1995,
petitioner Webb voluntarily surrendered to the police authorities at Camp Ricardo Papa
Sr., in Bicutan, Taguig. Petitioners Gatchalian and Lejano likewise gave themselves up to
the authorities after filing their petitions before us.
In their petitions at bar, petitioners contend: (1) respondent Judges de Leon and
Tolentino gravely abused their discretion when they failed to conduct a preliminary
examination before issuing warrants of arrest against them: (2) the DOJ Panel likewise
gravely abused its discretion in holding that there is probable cause to charge them with
the crime of rape with homicide; (3) the DOJ Panel denied them their constitutional
right to due process during their preliminary investigation; and (4) the DOJ Panel
unlawfully intruded into judicial prerogative when it failed to charge Jessica Alfaro in the
Information as an accused.
We find the petitions bereft of merit.
I.

Petitioners fault the DOJ Panel for its finding of probable cause. They insist
that the May 22, 1995 sworn statement of Jessica Alfaro is inherently weak
and uncorroborated. They hammer on alleged material inconsistencies
between her April 28, 1995 and May 22, 1995 sworn statements. They
assail her credibility for her misdescription of petitioner Webb's hair as
semi-blonde. They also criticize the procedure followed by the DOJ Panel
when it did not examine witnesses to clarify the alleged incredulities and
inconsistencies in the sworn statements of the witnesses for the NBI.

We start with a restatement of the purpose of a preliminary investigation.

Section 1 of Rule 112 provides that a preliminary investigation should
determine " . . . whether there is a sufficient ground to engender a wellgrounded belief that a crime cognizable by the Regional Trial Court has been
committed and that the respondent is probably guilty thereof, and should be
held for trial." Section 3 of the same Rule outlines the procedure in conducting
a preliminary investigation, thus:
Sec. 3. Procedure. Except as provided for in Section 7 hereof, no
complaint or information for an offense cognizable by the Regional
Trial Court shall be filed without a preliminary investigation having
been first conducted in the following manner:
(a) The complaint shall state the known address of the respondent and
be accompanied by affidavits of the complainant and his witnesses as
well as other supporting documents, in such number of copies as
there are respondents, plus two (2) copies for the official file. The said
affidavits shall be sworn to before any fiscal, state prosecutor or
government official authorized to administer oath, or, in their absence
or unavailability, a notary public, who must certify that he personally
examined the affiants and that he is satisfied that they voluntarily
executed and understood their affidavits.
(b) Within ten (10) days after the filing of the complaint, the
investigating officer shall either dismiss the same if he finds no ground
to continue with the inquiry, or issue a subpoena to the respondent,
attaching thereto a copy of the complaint, affidavits and other
supporting documents. Within ten (10) days from receipt thereof, the
respondent shall submit counter-affidavits and other supporting
documents. He shall have the right to examine all other evidence
submitted by the complainant.
(c) Such counter-affidavits and other supporting evidence submitted
by the respondent shall also be sworn to and certified as prescribed in
paragraph (a) hereof and copies thereof shall be furnished by him to
the complainant.
(d) If the respondent cannot be subpoenaed, or if subpoenaed, does
not submit counter-affidavits within the ten (10) day period, the
investigating officer shall base his resolution on the evidence
presented by the complainant.

examine or cross-examine. If the parties so desire, they may submit

questions to the investigating officer which the latter may propound
to the parties or witnesses concerned.
(f) Thereafter, the investigation shall be deemed concluded, and the
investigating officer shall resolve the case within ten (10) days
therefrom. Upon the evidence thus adduced, the investigating officer
shall determine whether or not there is sufficient ground to hold the
respondent for trial.
Section 4 of Rule 112 then directs that "if the investigating fiscal finds cause to
hold the respondent for trial, he shall prepare the resolution and corresponding
information. He shall certify under oath that he, or as shown by the record, an
authorized officer, has personally examined the complainant and his witnesses,
that there is reasonable ground to believe that a crime has been committed
and that the accused is probably guilty thereof . . ."
The need to find probable cause is dictated by the Bill of Rights which protects "the right
of the people to be secure in their persons . . . against unreasonable searches and
20
seizures of whatever nature . . ." An arrest without a probable cause is an
unreasonable seizure of a person, and violates the privacy of persons which ought not
21
to be intruded by the State. Probable cause to warrant arrest is not an opaque
concept in our jurisdiction. Continuing accretions of case law reiterate that they are
facts and circumstances which would lead a reasonably discreet and prudent man to
believe that an offense has been committed by the person sought to be
22
arrested. Other jurisdictions utilize the term man of reasonable caution 23 or the
24
term ordinarily prudent and cautious man. The terms are legally synonymous and
their reference is not to a person with training in the law such as a prosecutor or a judge
25
but to the average man on the street. It ought to be emphasized that in determining
probable cause, the average man weighs facts and circumstances without resorting to
the calibrations of our technical rules of evidence of which his knowledge is nil. Rather,
he relies on the calculus of common sense of which all reasonable men have an
abundance.
Applying these basic norms, we are not prepared to rule that the DOJ Panel
gravely abused its discretion when it found probable cause against the
petitioners. Petitioners belittle the truthfulness of Alfaro on two (2) grounds:
(a) she allegedly erroneously described petitioner Webb's hair as semi-blond
and (b) she committed material inconsistencies in her two (2) sworn statement,
26
thus:
xxx xxx xxx

(e) If the investigating officer believes that there are matters to be

clarified, he may set a hearing to propound clarificatory questions to
the parties or their witnesses, during which the parties shall be
afforded an opportunity to be present but without the right to

To illustrate, the following are some examples of inconsistencies in the

two sworn statements of Alfaro:

On whether Alfaro knew Carmela before the incident in question

First Affidavit: She had NOT met Carmela before
June 29, 1991.

In its Resolution, the DOJ Panel ruled that these alleged misdescription and
inconsistencies did not erode the credibility of Alfaro. We quote the pertinent
27
ruling, viz.:
xxx xxx xxx

Second Affidavit: "I met her in a party sometime in

February, 1991."
On whether Alfaro saw the dead bodies
First Affidavit: She did not see the three dead
persons on that night. She just said "on the following
day I read in the newspaper that there were three
persons who were killed . . ."
Second Affidavit: "I peeped through the first door on
the left. I saw two bodies on top of the bed,
bloodied, and in the floor, I saw Hubert on top of
Carmela."
On the alleged rape of Carmela Vizconde
First Affidavit: She did not see the act of rape.
Second Affidavit: She saw Hubert Webb "with bare
buttocks, on top of Carmela and pumping, her
mouth gagged and she was moaning and I saw tears
on her eyes."
On how Webb, Lejano, and Ventura entered the Vizconde house
First Affidavit: "by jumping over the fence, which
was only a little more than a meter high."
Second Affidavit: They "entered the gate which was
already open."
On whether Alfaro entered the Vizconde house
First Affidavit: She never entered the house.
Second Affidavit: "I proceeded to the iron grill gate
leading to the dirty kitchen."

As regards the admissibility of Alfaro's statements, granting for

purposes of argument merely that she is a co-conspirator, it is well to
note that confessions of a co-conspirator may be taken as evidence to
show the probability of the co-conspirator's participation in the
commission of the crime (see People vs. Lumahang, 94 Phil. 1084).
Furthermore, it is a well-established doctrine that conspiracy need not
be proved by direct evidence of prior agreement to commit the crime.
Indeed, "only rarely would such a prior agreement be demonstrable
since, in the nature of things, criminal undertakings are only rarely
documented by agreements in writing. Thus, conspiracy may be
inferred from the conduct of the accused before, during and after the
commission of the crime, showing that the several accused had acted
in concert or in unison with each other, evincing a common purpose or
design." (Angelo vs. Court of Appeals, 210 SCRA 402 [1992], citations
omitted; People vs. Molleda, 86 SCRA 699).
Neither can we discredit Alfaro merely because of the inconsistencies
in her two sworn statements. InAngelo, the Court refused to discredit
the testimony of a witness accusing therein petitioner for the slaying
of one Gaviano Samaniego even though said witness failed to name
Angelo in his affidavit which was executed five (5) months earlier.
Granting, the Court continued, that a part of the witness' testimony is
untrue, such circumstance is not sufficient to discredit the entire
testimony of the witness.
On August 7, 1995, another counsel for respondent Webb submitted
his memorandum suggesting that the instant complaint "should not be
decided within the month to give time to the NBI to coordinate with
the FBI on the latter's inquiry into the whereabouts of Hubert Webb . .
. and to check on our U.S.-based witnesses."
In said memorandum, counsel for respondent Webb calls for the
application of the maxim falsus in uno, falsus in omnibus arising from
the inconsistencies of Alfaro's statements, among others. This is
untenable. As held in Angelo:
There is no rule of law which prohibits a court from
crediting part of the testimony of a witness as
worthy of belief and from simultaneously rejecting

other parts which the court may find incredible or

dubious. The maxim falsus in uno, falsus in
omnibus is not a rule of law, let alone a general rule
of law which is universally applicable. It is not a legal
presumption either. It is merely a latinism describing
the conclusion reached by a court in a particular case
after ascribing to the evidence such weight or lack of
weight that the court deemed proper.
In the case before us, complainant reasoned out that Alfaro was then
having reservations when she first executed the first statement and
held back vital information due to her natural reaction of mistrust.
This being so, the panel believes that the inconsistencies in Alfaro's
two sworn statements have been sufficiently explained especially
specially so where there is no showing that the inconsistencies were
deliberately made to distort the truth. Consequently, the probative
value of Alfaro's testimony deserves full faith and credit. As it has been
often noted, ex parte statements are generally incomplete because
they are usually executed when the affiant's state of mind does not
give her sufficient and fair opportunity to comprehend the import of
her statement and to narrate in full the incidents which transpired
(People vs. Sarellana, 233 SCRA 31 [1994]; Angelo vs. Court of
Appeals, supra). In the case at bar, there is no dispute that a crime has
been committed and what is clear before us is that the totality of the
evidence submitted by the complainant indicate a prima faciecase that
respondents conspired in the perpetration of the imputed offense.
We note that the May 22, 1995 sworn statement of Alfaro was given with the assistance
28
of counsel and consists of six (6) pages, in single space reciting in rich details how the
crime was planned and then executed by the petitioners. In addition, the DOJ Panel
evaluated the supporting sworn statements of Nerissa Rosales and Mila Gaviola, former
housemaids of the Webbs, Carlos J. Cristobal, a passenger in United Airlines Flight No.
808 and Lolita Birrer, a paramour of Gerardo Biong. The Panel assayed their statements
29
as follows:
xxx xxx xxx
According to Nerissa E. Rosales, a former housemaid of the Webb
family, on June 29, 1991, between 7:00 o'clock and 8:00 o'clock in the
evening, Hubert was at home inside his room with two male visitors.
She knew it because she and her co-housemaid, Loany, were
instructed by Hubert to bring them three glasses of juice. It was the
last time she saw Hubert and was later told by then Congressman
Webb that Hubert was in the United States.

While Mila S. Gaviola, another former housemaid of the Webb family

and who served as a laundry woman, claims, aside from corroborating
the statement of Nerissa Rosales, that on June 30, 1991, she woke up
at around 4:00 in the morning and as what she used to do, she
entered the rooms of the Webbs to get their clothes to be washed. As
a matter of fact, in that early morning, she entered Hubert's room and
saw Hubert, who was only wearing his pants, already awake and
smoking while he was sitting on his bed. She picked up Hubert's
scattered clothes and brought them together with the clothes of the
other members of the family to the laundry area. After taking her
breakfast, she began washing the clothes of the Webbs. As she was
washing the clothes of Hubert Webb, she noticed fresh bloodstains in
his shirt. After she finished the laundry, she went to the servant's
quarters. But feeling uneasy, she decided to go up to the stockroom
near Hubert's room to see what he was doing. In the said stockroom,
there is a small door going to Hubert's room and in that door there is a
small opening where she used to see Hubert and his friends sniffing on
something. She observed Hubert was quite irritated, uneasy, and
walked to and from inside his room.
On that day, she noticed Hubert left the house at around 1:00 in the
afternoon and came back at around 4:00 in the same afternoon and
went inside his room using the secret door of the house. It was the last
time that she saw Hubert until she left the Webb family.
On the other hand, Carlos J. Cristobal alleged that on March 9, 1991,
at about 10:00 in the morning, he was at the Ninoy Aquino
International Airport as he was then scheduled to take the United
Airlines Flight No. 808 at 2:00 in the afternoon for New York. At the
airport's lobby, he saw then Congressman Freddie Webb with a male
companion. He greeted him and Webb answered: "Mabuti naman, at
ito, ihahatid ko ang anak ko papuntang Florida." He knew Freddie
Webb because he often watched him then in a television show "Chicks
to Chicks." He observed that the man whom Freddie Webb referred to
as his son, was of the same height as Freddie. The son referred to has
fair complexion with no distinguishing marks on his face. He (son of
Webb) was then wearing a striped white jacket. When he and his
children were already inside the plane, he did not see Freddie
anymore, but he noticed his son was seated at the front portion of the
economy class. He never noticed Freddie Webb's son upon their
arrival in San Francisco. He claims that, while watching the television
program "DONG PUNO LIVE" lately, he saw the wife of Freddie Webb
with her lawyer being interviewed, and when she described Hubert as
"moreno" and small built, with a height of five feet and seven inches
tall, and who was the one who left for United States on March 9, 1991,
he nurtured doubts because such description does not fit the physical

traits of the son of Freddie, who left with him for United States on the
same flight and date.
Lolita Birrer, alleged that she know Gerardo Biong because she had an
affair with him for almost three (3) years and in fact, she had a child
with him who is now four (4) years old. Their relationship started in
February, 1991 until she broke up with him in September 1993. She
recalls that on June 29, 1991, at around 6:00 p.m., Biong invited her to
play mahjong at the canteen of a certain Aling Glo located at the back
of the Paraaque Municipal Hall.
At about 2:30, in the early morning of January 30, 1991, the radio
operator of the Paraaque police told Biong that he has a phone call.
Before Biong went to the radio room, she was instructed to take him
over and after somebody won the game, she followed Biong at the
radio room where she overheard him uttering, "Ano?, Saan? Mahirap
yan, Paano, o sige, aantayin kita, O ano?, dilaw na taxi, o sige." When
he put the phone down, Biong told her, "Mayroon lang akong
rerespondehan, ikaw muna ang maupo" and then, he went outside the
canteen apparently waiting for somebody. Twenty minutes later, a
taxi, colored yellow, arrived with a male passenger sitting at the
backseat and parked near the canteen. After it made some signals by
blinking its headlight, Biong rode thereat at the front seat beside the
driver and then, they left. She was not able to recognize the male
passenger because the window of the taxi was tinted. Biong came
back at around 7:00 of the same morning and when he arrived, he
immediately washed his hands and face, and took his handkerchief
from his pocket which he threw at the trash can. She asked him why
he threw his handkerchief and he answered, "Hmp . . . amoy tae." She
inquired what happened in BF Homes and he replied, "Putang inang
mga batang iyon, pinahirapan nila ako."
Biong later invited her for breakfast, but they first went to his office
where she observed him doing something in his steel cabinet while he
appeared to be uneasy. Moments later, Galvan, another policeman of
Paraaque, arrived and said, "Oy Biong, may tatlong patay sa BF,
imbestigahan mo" to which Biong answered, "Oo susunod na ako."
Biong went to the office of Capt. Don Bartolome who offered to
accompany him and with whom she asked permission to go with
them. Before they proceeded to the place where the killings
happened, she asked Biong if he knew the exact address and the latter
immediately responded, "Alam ko na yon." She was surprised because
Galvan never told him the place of the incident.
As soon as they arrived at the Vizconde's residence, Biong instructed
the housemaids to contact the victim's relatives, while the security

guard fetched the barangay chairman and the president of the

Homeowners Association. When all these persons were already in the
house, Biong started recording the wounds of the victim. Inside the
master's bedroom, she saw Biong took a watch from the jewelry box.
Because she could not tolerate the foul odor, she and Capt. Bartolome
went out of the room and proceeded to the dining area. On top of the
dining table, she saw the scattered contents of a shoulder bag.
Moments later, Biong came out from the room and proceeded to the
front door to remove the chain lock; asked the keys from the
housemaid and it was only then that the main door was opened. Biong
noticed a stone in front of the broken glass of the door and requested
Capt. Bartolome to go inside the servant's quarters as he doubted the
housemaids' claim that they heard nothing unusual. Using the handle
of his gun, Biong broke the remaining glass of the door panel.
Bartolome then came out of the room and told Biong that he can hear
the sound of the glass being broken. At the garage, Biong also noticed
same marks on the hood of the car.
On the following day, at around 12:00 noon, Biong arrived in her
house together with the Vizconde housemaids. When Biong was
preparing to take a bath, she saw him remove from his pocket the
things she also saw from Vizconde's residence, to wit: calling cards,
driver's license, ATM card, a crossed check worth P80,000.00, earrings,
a ring, bracelet, necklace, and the watch he took from the jewelry box
inside the room of the Vizcondes. These jewelry items were later
pawned by Biong for P20,000.00 at a pawnshop in front of ChowChow restaurant in Santos Avenue, Paraaque. The next day, she saw
Biong took from his locker at the Paraaque Police Station an
imported brown leather jacket, which the latter claimed to have been
given to him by the person who called him up in the early morning of
June 30, 1991.
Since then, Biong has been wearing said jacket until they broke up
sometime in 1993. She observed that Biong seemed not interested in
pursuing the investigation of the Vizconde case. In fact, when Biong
and this group picked up Mike Gatchalian and brought him to the
Paraaque Police Station, she was surprised that Biong halted the
investigation when Gatchalian was profusely sweating while being
interrogated. After the father of Gatchalian talked to Colonel Pureza,
the latter called up and instructed Biong to bring Gatchalian to him
(Colonel Pureza) and that was the last thing she remembered
regarding this case.
The DOJ Panel then weighed these inculpatory evidence against the exculpatory
30
evidence of petitioners. It ruled:

xxx xxx xxx

bicycle in California is no conclusive proof that the name appearing

thereon was the actual buyer of the merchandise.

The voluminous number of exhibits submitted by respondent Webb to

support his defense of denial and alibi notwithstanding, the panel,
after a careful and thorough evaluation of the records, believes that
they cannot outweigh the evidence submitted by the complainant.
Alibi cannot prevail over the positive identification made by a
prosecution witness. Verily, alibi deserves scant consideration in the
face of positive identification especially so where the claim of alibi is
supported mainly by friends and relatives (People vs. Apolonia, 235
SCRA 124 [1994]; People vs. Lucas, 181 SCRA 316 and a long line of
cases).

Given these conflicting pieces of evidence of the NBI and the petitioners, we
hold that the DOJ Panel did not gravely abuse its discretion when it found
probable cause against the petitioners. A finding of probable cause needs only
to rest on evidence showing that more likely than not a crime has been
committed and was committed by the suspects. Probable cause need not be
based on clear and convincing evidence of guilt, neither on evidence
establishing guilt beyond reasonable doubt and definitely, not on evidence
establishing absolute certainty of guilt. As well put in Brinegar v. United
31
States, while probable cause demands more than "bare suspicion," it requires
"less than evidence which would justify . . . conviction." A finding of probable
cause merely binds over the suspect to stand trial. It is not a pronouncement of
guilt.

Similarly, denial is a self-serving negative which cannot be given

greater evidentiary weight than the declaration of a credible witness
who testified on affirmative matters (People vs. Carizo, 233 SCRA 687
[1994]). Indeed, denial, like alibi, is weak and becomes even more
weaker when arrayed against the positive identification by the witness
for the prosecution (People vs. Onpaid, 233 SCRA 62 [1994]).

Considering the low quantum and quality of evidence needed to support a

finding of probable cause, we also hold that the DOJ Panel did not, gravely
abuse its discretion in refusing to call the NBI witnesses for clarificatory
questions. The decision to call witnesses for clarificatory questions is addressed
to the sound discretion of the investigator and the investigator alone. If the
evidence on hand already yields a probable cause, the investigator need not
hold a clarificatory hearing. To repeat, probable cause merely implies
probability of guilt and should be determined in a summary manner.
Preliminary investigation is not a part of trial and it is only in a trial where an
accused can demand the full exercise of his rights, such as the right to confront
and cross-examine his accusers to establish his innocence. In the case at bar,
the DOJ Panel correctly adjudged that enough evidence had been adduced to
establish probable cause and clarificatory hearing was unnecessary.

Surprisingly, Gatchalian's defense of alibi was not corroborated by

Lejano, whom he claimed was with him watching video tapes at the
Syyap residence. Other than claiming that he "was not and could not
have been at or near the area of the Vizconde residence at the time of
the alleged commission of the crime," respondent Lejano proffered no
evidence to substantiate his claim of alibi.
xxx xxx xxx
On the other hand, respondent Webb seeks to enhance the
acceptability of his alibi in the form of documents tending to show
that he was thousands of miles away when the incident occurred. We
have carefully deliberated and argued on the evidence submitted by
respondent Webb in support of his absence from the country since
March 9, 1991 to October 26, 1992 and found the same wanting to
exonerate him of the offense charged. The material dates in this case
are June 29 and 30, 1991. While respondent Webb may have
submitted proof tending to show that he was issued a California
driver's license on June 14, 1991, there is no showing that he could not
have been in the country on the dates above mentioned. Neither do
we find merit in the allegation that respondent Webb personally
bought a bicycle on June 30, 1991 in California in view of his positive
identification by Alfaro and the two (2) househelps of the Webb family
who testified that he was here in the country on said dates.
Additionally, the issuance of receipt evidencing the purchase of a

II.

We now come to the charge of petitioners that respondent Judge Raul de

Leon and, later, respondent Judge Amelita Tolentino issued warrants of
arrest against them without conducting the required preliminary
examination. Petitioners support their stance by highlighting the following
facts: (1) the issuance of warrants of arrest in a matter of few hours; (2)
the failure of said judges to issue orders of arrest; (3) the records
submitted to the trial court were incomplete and insufficient from which
to base a finding of probable cause; and (4) that even Gerardo Biong who
was included in the Information as a mere accessory had a "NO BAIL"
recommendation by the DOJ Panel. Petitioners postulate that it was
impossible to conduct a "searching examination of witnesses and
evaluation of the documents" on the part of said judges.
The issuance of a warrant of arrest interferes with individual liberty and is
regulated by no less than the fundamental law of the land. Section 2 of Article
III of the Constitution provides:

Sec. 2. The right of the people to be secure in their persons, houses,

papers, and effects against unreasonable searches and seizures of
whatever nature and for any purpose shall be inviolable, and no
search warrant or warrant of arrest shall issue except upon probable
cause to be determined personally by the judge after examination
under oath or affirmation of the complainant and the witnesses he
may produce and particularly describing the place to be searched and
the persons or things to be seized.
The aforequoted provision deals with the requirements of probable cause both
with respect to issuance of warrants of arrest or search warrants. The
similarities and differences of their requirements ought to be educational.
32
Some of them are pointed out by Professors LaFave and Israel, thus: "It is
generally assumed that the same quantum of evidence is required whether one
is concerned with probable cause to arrest or probable cause to search. But
each requires a showing of probabilities as to somewhat different facts and
circumstances, and thus one can exist without the other. In search cases, two
conclusions must be supported by substantial evidence: that the items sought
are in fact seizable by virtue of being connected with criminal activity, and that
the items will be found in the place to be searched. It is not also necessary that
a particular person be implicated. By comparison, in arrest cases there must be
probable cause that a crime has been committed and that the person to be
arrested committed it, which of course can exist without any showing that
evidence of the crime will be found at premises under that person's control."
Worthy to note, our Rules of Court do not provide for a similar procedure to be
followed in the issuance of warrants of arrest and search warrants. With
respect to warrants of arrest, section 6 of Rule 112 simply provides that "upon
filing of an information, the Regional Trial Court may issue a warrant for the
arrest of the accused." In contrast, the procedure to be followed in issuing
search warrants is more defined. Thus, Sections 3, 4 and 5 of Rule 126 provide:
xxx xxx xxx
Sec. 3. Requisites for issuing search warrant. A search warrant shall
not issue but upon probable cause in connection with one specific
offense to be determined personally by the judge after examination
under oath or affirmation of the complainant and the witnesses he
may produce, and particularly describing the place to be searched and
the things to be seized.
Sec. 4. Examination of complainant; record. The judge must, before
issuing the warrant, personally examine in the form of searching
questions and answers, in writing and under oath the complainant and
any witnesses he may produce on facts personally known to them and
attach to the record their sworn statements together with any
affidavits submitted.

Sec. 5. Issuance and form of search warrant. If the judge is

thereupon satisfied of the facts upon which the application is based,
or that there is probable cause to believe that they exist, he must
issue the warrant, which must be substantially in the form prescribed
by these Rules.
We discussed the difference in the Procedure of issuing warrants of arrest and
33
search warrants in Soliven vs. Makasiar, thus:
xxx xxx xxx
The second issue, raised by Beltran, calls for an interpretation of the
constitutional provision on the issuance of warrants of arrest. The
pertinent provision reads:
Art. III, Sec. 2. The right of the people to be secure in
their persons, houses, papers and effects against
unreasonable searches and seizures of whatever
nature and for any purpose shall be inviolable, and
no search warrant or warrant of arrest shall issue
except upon probable cause to be determined
personally by the judge after examination under
oath or affirmation of the complainant and the
witnesses he may produce, and particularly
describing the place to be searched and the persons
or things to be seized.
The addition of the word "personally" after the word "determined"
and the deletion of the grant of authority by the 1973 Constitution to
issue warrants to "other responsible officers as may be authorized by
law," has apparently convinced petitioner Beltran that the
Constitution now requires the judge to personally examine the
complainant and his witnesses in his determination of probable cause
for the issuance of warrants of arrest. This is not an accurate
interpretation.
What the Constitution underscores is the exclusive and personal
responsibility of the issuing judge to satisfy himself of the existence of
probable cause. In satisfying himself of the existence of probable cause
for the issuance of a warrant of arrest, the judge is not required to
personally examine the complainant and his witnesses. Following
established doctrine and procedure, he shall: (1) personally evaluate
the report and the documents submitted by the fiscal regarding the
existence of probable cause and, on the basis thereof, issue a warrant;
or (2) if on the basis thereof he finds no probable cause, he may
disregard the fiscal's report and require the submission of supporting

affidavits of witnesses to aid him in arriving at a conclusions as to the

existence of probable cause.
Sound policy dictates this procedure, otherwise judges would be
unduly laden with the preliminary examination and investigation of
criminal complaints instead of concentrating on hearing and deciding
cases filed before their courts.

respondent judges to take the further step of examining ex parte the

complainant and their witnesses with searching questions.
III.

Petitioners also complain about the denial of their constitutional right to

due process and violation of their right to an impartial investigation. They
decry their alleged hasty and malicious prosecution by the NBI and the DOJ
Panel. They also assail the prejudicial publicity that attended their
preliminary investigation.

34

Clearly then, the Constitution, the Rules of Court, and our case law repudiate
the submission of petitioners that respondent judges should have conducted
"searching examination of witnesses" before issuing warrants of arrest against
them. They also reject petitioners' contention that a judge must first issue an
order of arrest before issuing a warrant of arrest. There is no law or rule
requiring the issuance of an Order of Arrest prior to a warrant of arrest.
In the case at bar, the DOJ Panel submitted to the trial court its 26-page report,
the two (2) sworn statements of Alfaro and the sworn statements of Carlos
35
Cristobal and Lolita Birrer as well as the counter-affidavits of the petitioners.
Apparently, the painstaking recital and analysis of the parties' evidence made
in the DOJ Panel Report satisfied both judges that there is probable cause to
issue warrants of arrest against petitioners. Again, we stress that before issuing
warrants of arrest, judges merely determine personally the probability, not the
certaintyof guilt of an accused. In doing so, judges do not conduct a de
novo hearing to determine the existence of probable cause. They
just personally review the initial determination of the prosecutor finding a
probable cause to see if it is supported by substantial evidence. The sufficiency
of the review process cannot be measured by merely counting minutes and
hours. The fact that it took the respondent judges a few hours to review and
affirm the probable cause determination of the DOJ Panel does not mean they
made no personal evaluation of the evidence attached to the records of the
36
case.
37

Petitioners' reliance on the case of Allado vs. Diokno is misplaced.

Our Allado ruling is predicated on the utter failure of the evidence to show the
existence of probable cause. Not even the corpus delicti of the crime was
established by the evidence of the prosecution in that case. Given the clear
insufficiency of the evidence on record, we stressed the necessity for the trial
judge to make a further personal examination of the complainant and his
witnesses to reach a correct assessment of the existence or non-existence of
probable cause before issuing warrants of arrest against the accused. The case
at bar, however, rests on a different factual setting. As priorly discussed, the
various types of evidence extant in the records of the case provide substantial
basis for a finding of probable cause against the petitioner. The corpus delicti of
the crime is a given fact. There is an eyewitness account of the imputed crime
given by Alfaro. The alibi defense of petitioner Webb is also disputed by sworn
statements of their former maids. It was therefore unnecessary for the

We reject these contentions. The records will show that the DOJ Panel did not
conduct the preliminary investigation with indecent haste. Petitioners were
given fair opportunity to prove lack of probable cause against them. The
fairness of this opportunity is well stressed in the Consolidated Comment of the
Solicitor General, viz.:
Again, there is no merit in this contention. Petitioners were afforded
all the opportunities to be heard. Petitioner Webb actively
participated in the preliminary investigation by appearing in the initial
hearing held on June 30, 1995 and in the second hearing on July 14,
1995; and by filing a "Motion for Production and Examination of
Evidence and Documents" on June 27, 1995 (p. 4, Petition), a "Reply to
the compliance and Comment/Manifestation to the Motion for
Production and Examination of Evidence" on July 5, 1995 (p. 6,
Petition), a "Comment and Manifestation" on July 7, 1995 (p. 6,
Petition), his "Counter-Affidavit" on July 14, 1995 (pp. 6-7, Petition)
and a "Motion to Resolve" on August 1, 1995. Numerous letterrequests were also sent by the petitioner Webb's counsel to the DOJ
Panel requesting the latter to furnish him a copy of the reports
prepared by the FBI concerning the petitioner's whereabouts during
the material period (Annexes "L", "L-1" and "L-2" of the Supplemental
Petition dated August 14, 1995). In fact, not satisfied with the decision
of the DOJ Panel not to issue subpoena duces tecum to Atty. Arturo L.
Mercader, Jr., petitioner Webb filed a "Petition for Injunction,
Certiorari, Prohibition and Mandamus" with the Regional Trial Court,
Branch 63 of Makati in order to compel said Atty. Mercader, Jr. to
produce the first sworn statement of Alfaro for submission to the DOJ
Panel. (p. 4, Petition) The said court dismissed the petition after
Mercader produced and submitted to the DOJ Panel the first sworn
statement of Alfaro, without ruling on the admissibility and credence
of the two (2) conflicting and inconsistent sworn statements of the
principal witness, Alfaro. (Attached hereto is a copy of the order of
Judge Ruben A. Mendiola, RTC-Makati, Branch 63 dated July 28, 1995)
marked as Annex "F."
It must also be pointed out that despite the declaration by the DOJ
Panel that the preliminary investigation was to be terminated after the

hearing held on July 14, 1995, the panel continued to conduct further
proceedings, e.g. comparison of the photo-copies of the submitted
documents with the originals on July 17, 1995. (p. 7, Petition) The
panel even entertained the "Response" submitted by accused Miguel
Rodriguez on July 18, 1995. (p. 17 Resolution) In addition to these, the
panel even announced that any party may submit additional
evidence before the resolution of the case. (p. 8, Petition) From the
time the panel declared the termination of the preliminary
investigation on July 14, 1995, twenty-seven (27) days elapsed before
the resolution was promulgated, and the information eventually filed
in the Regional Trial Court of Paraaque on August 10, 1995. This
notwithstanding the directive of Section 3(f) Rule 112 of the Revised
Rules of Court that the investigating officer shall resolve the
case within ten (10) days from the termination of the preliminary
investigation. The DOJ Panel precisely allowed the parties to adduce
more evidence in their behalf and for the panel to study the evidence
submitted more fully. This directly disputes the allegation of the
petitioners that the resolution was done with indecent haste in
violation of the rights of the petitioners. During the period of twentyseven (27) days, the petitioners were free to adduce and present
additional evidence before the DOJ Panel.
Verily, petitioners cannot now assert that they were denied due
process during the conduct of the preliminary investigation simply
because the DOJ Panel promulgated the adverse resolution and filed
the Information in court against them.
Petitioners cannot also assail as premature the filing of the Information in court
against them for rape with homicide on the ground that they still have the right
to appeal the adverse resolution of the DOJ Panel to the Secretary of Justice.
The filing of said Information is in accord with Department of Justice Order No.
223, series of 1993, dated June 25, 1993. We quote its pertinent sections, viz.:
Sec. 4. Non-Appealable Cases; Exceptions. No appeal may be taken
from a resolution of the Chief State Prosecutor/Regional State
Prosecutor/Provincial or City Prosecutor finding probable causeexcept
upon showing of manifest error or grave abuse of
discretion. Notwithstanding the showing of manifest error or grave
abuse of discretion, no appeal shall be entertained where the appellant
had already been arraigned. If the appellant is arraigned during the
pendency of the appeal, said appeal shall be dismissed motu propio by
the Secretary of Justice.
An appeal/motion for reinvestigation from a resolution finding
probable cause, however, shall not hold the filing of the information in
court.

Sec. 2. When to appeal. The appeal must be filed within a period of

fifteen (15) days from receipt of the questioned resolution by the
party or his counsel. The period shall be interrupted only by the filing
of a motion for reconsideration within ten (10) days from receipt of
the resolution and shall continue to run from the time the resolution
denying the motion shall have been received by the movant or his
counsel. (Emphasis supplied)
Without doubt then, the said DOJ Order No. 223 allows the filing of an
Information in court after the consummation of the preliminary investigation
even if the accused can still exercise the right to seek a review of the
prosecutor's recommendation with the Secretary of Justice.
Next, petitioners fault the DOJ Panel for not including Alfaro in the Information
considering her alleged conspiratorial participation in the crime of rape with
homicide. The non-inclusion of Alfaro is anchored on Republic Act
No. 6981, entitled "An Act Providing For A Witness Protection, Security And
Benefit Program And For Other Purposes" enacted on April 24, 1991. Alfaro
qualified under its Section 10, which provides:
xxx xxx xxx
Sec. 10. State Witness. Any person who has participated in the
commission of a crime and desires to a witness for the State, can apply
and, if qualified as determined in this Act and by the Department, shall
be admitted into the Program whenever the following circumstances
are present:
(a) the offense in which his testimony will be used is a grave felony as
defined under the R.P.C. or its equivalent under special laws;
(b) there is absolute necessity for his testimony;
(c) there is no other direct evidence available for the proper
prosecution of the offense committed;
(d) his testimony can be substantially corroborated on its material
points;
(e) he does not appear to be most guilty; and
(f) he has not at anytime been convicted of any crime involving moral
turpitude.

An accused discharged from an information or criminal complaint by

the court in order that he may be a State Witness pursuant to Sections
9 and 10 of Rule 119 of the Revised Rules of Court may upon his
petition be admitted to the Program if he complies with the other
requirements of this Act. Nothing in this Act shall prevent the
discharge of an accused so that he can be used as a Witness under
Rule 119 of the Revised Rules of Court.
Upon qualification of Alfaro to the program, Section 12 of the said law
mandates her non-inclusion in the criminal Complaint or Information, thus:
xxx xxx xxx
Sec. 12. Effect of Admission of a State Witness into the Program.
The certification of admission into the Program by the Department
shall be given full faith and credit by the provincial or city prosecutor
who is required NOT TO INCLUDE THE WITNESS IN THE CRIMINAL
COMPLAINT OR INFORMATION and if included therein, to petition the
court for his discharge in order that he can be utilized as a State
Witness. The court shall order the discharge and exclusion of the said
accused from the information.
Admission into the Program shall entitle such State Witness to
immunity from criminal prosecution for the offense or offenses in
which his testimony will be given or used and all the rights and
benefits provided under Section 8 hereof.
The validity of these provisions is challenged by petitioner Webb. It is urged
that they constitute ". . . an intrusion into judicial prerogative for it is only the
court which has the power under the Rules on Criminal Procedure to discharge
an accused as a state witness." The argument is based on Section 9, Rule
38
119 which gives the court the prerogative to approve the discharge of an
accused to be a state witness. Petitioner's argument lacks appeal for it lies on
the faulty assumption that the decision whom to prosecute is a judicial
function, the sole prerogative of courts and beyond executive and legislative
interference. In truth, the prosecution of crimes appertains to the executive
department of government whose principal power and responsibility is to see
that our laws are faithfully executed. A necessary component of this power to
execute our laws is the right to prosecute their violators. The right to prosecute
vests the prosecutor with a wide range of discretion the discretion of
whether, what and whom to charge, the exercise of which depends on a
smorgasbord of factors which are best appreciated by prosecutors. We thus
hold that it is not constitutionally impermissible for Congress to enact R.A. No.
6981 vesting in the Department of Justice the power to determine who can
qualify as a witness in the program and who shall be granted immunity from
39
prosecution. Section 9 of Rule 119 does not support the proposition that the

power to choose who shall be a state witness is an inherent judicial

prerogative. Under this provision, the court, is given the power to discharge a
state witness only because it has already acquired jurisdiction over the crime
and the accused. The discharge of an accused is part of the exercise of
jurisdiction but is not a recognition of an inherent judicial function. Moreover,
the Rules of Court have never been interpreted to be beyond change by
legislation designed to improve the administration of our justice system. R.A.
No. 6981 is one of the much sought penal reform laws to help government in
its uphill fight against crime, one certain cause of which is the reticence of
witnesses to testify. The rationale for the law is well put by the Department of
Justice, viz.: "Witnesses, for fear of reprisal and economic dislocation, usually
refuse to appear and testify in the investigation/prosecution of criminal
complaints/cases. Because of such refusal, criminal complaints/cases have
been dismissed for insufficiency and/or lack of evidence. For a more effective
administration of criminal justice, there was a necessity to pass a law
protecting witnesses and granting them certain rights and benefits to ensure
40
their appearance in investigative bodies/courts." Petitioner Webb's challenge
to the validity of R.A. No. 6981 cannot therefore succeed.
Further, petitioners charge the NBI with violating their right to discovery
proceedings during their preliminary investigation by suppressing the April 28,
1995 original copy of the sworn statement of Alfaro and the FBI Report. The
argument is novel in this jurisdiction and as it urges an expansive reading of the
rights of persons under preliminary investigation it deserves serious
consideration. To start with, our Rules on Criminal Procedure do not expressly
provide for discovery proceedings during the preliminary investigation stage of
41
a criminal proceeding. Sections 10 and 11 of Rule 117 do provide an accused
the right to move for a bill of particulars and for production or inspection of
42
material evidence in possession of the prosecution. But these provisions
apply after the filing of the Complaint or Information in court and the rights are
accorded to the accused to assist them to make an intelligent plea at
43
arraignment and to prepare for trial.
This failure to provide discovery procedure during preliminary investigation
does not, however, negate its use by a person under investigation when
indispensable to protect his constitutional right to life, liberty and property.
Preliminary investigation is not too early a stage to guard against any significant
erosion of the constitutional right to due process of a potential accused. As
aforediscussed, the object of a preliminary investigation is to determine the
probability that the suspect committed a crime. We hold that the finding of a
probable cause by itself subjects the suspect's life, liberty and property to real
risk of loss or diminution. In the case at bar, the risk to the liberty of petitioners
cannot be understated for they are charged with the crime of rape with
homicide, a non-bailable offense when the evidence of guilt is strong.

Attuned to the times, our Rules have discarded the pure inquisitorial system of
preliminary investigation. Instead, Rule 112 installed a quasi-judicial type of
preliminary investigation conducted by one whose high duty is to be fair and
44
45
impartial. As this Court emphasized in Rolito Go vs. Court of Appeals, "the
right to have a preliminary investigation conducted before being bound over
for trial for a criminal offense, and hence formally at risk of incarceration or
some other penalty, is not a mere formal or technical right; it is a substantive
right." A preliminary investigation should therefore be scrupulously conducted
so that the constitutional right to liberty of a potential accused can be
protected from any material damage. We uphold the legal basis of the right of
petitioners to demand from their prosecutor, the NBI, the original copy of the
April 28, 1995 sworn statement of Alfaro and the FBI Report during their
preliminary investigation considering their exculpatory character, and hence,
unquestionable materiality to the issue of their probable guilt. The right is
rooted on the constitutional protection of due process which we rule to be
operational even during the preliminary investigation of a potential accused. It
is also implicit in section (3) (a) of Rule 112 which requires during the
preliminary investigation the filing of a sworn complaint, which shall ". . . state
the known address of the respondent and be accompanied by affidavits of the
complainant and his witnesses as well as other supporting documents . . ."
In laying down this rule, the Court is not without enlightened precedents from
other jurisdictions. In the 1963 watershed case of Brady v. Maryland 46 the
United States Supreme Court held that "suppression of evidence favorable to
an accused upon request violates due process where the evidence is material
to guilt or punishment, irrespective of the good faith or bad faith of the
prosecution." Its progeny is the 1935 case of Mooney v. Holohan 47 which laid
down the proposition that a prosecutor's intentional use of perjured testimony
to procure conviction violates due process. Thus, evolved jurisprudence firming
up the prosecutor's duty to disclose to the defense exculpatory evidence in its
48
49
possession. The rationale is well put by Justice Brennan in Brady "society
wins not only when the guilty are convicted but when criminal trials are fair."
Indeed, prosecutors should not treat litigation like a game of poker where
surprises can be sprung and where gain by guile is not punished.
But given the right of petitioners to compel the NBI to disclose exculpatory
evidence in their favor, we are not prepared to rule that the initial nonproduction of the original sworn statement of Alfaro dated April 28, 1995 could
have resulted in the reasonable likelihood that the DOJ Panel would not have
found probable cause. To be sure, the NBI, on July 4, 1995, upon request of
petitioners, submitted a photocopy of Alfaro's April 28, 1995 sworn statement.
It explained it cannot produce the original as it had been lost. Fortunately,
petitioners, on July 28, 1995, were able to obtain a copy of the original from
Atty. Arturo Mercader in the course of the proceedings in Civil Case No.
50
951099. As petitioners admit, the DOJ Panel accepted the original of Alfaro's
51
April 28, 1995 sworn statement as a part of their evidence. Petitioners thus

had the fair chance to explain to the DOJ Panel then still conducting their
preliminary investigation the exculpatory aspects of this sworn statement.
Unfortunately for petitioners, the DOJ Panel still found probable cause to
charge them despite the alleged material discrepancies between the first and
second sworn statements of Alfaro. For reasons we have expounded, this
finding of probable cause cannot be struck down as done with grave abuse of
52
discretion. On the other hand, the FBI Report while corroborative of the alibi
of petitioner Webb cannot by itself reverse the probable cause finding of the
DOJ Panel in light of the totality of evidence presented by the NBI.
Finally, we come to the argument of petitioner that the DOJ Panel lost its
impartiality due to the prejudicial publicity waged in the press and broadcast
media by the NBI.
Again, petitioners raise the effect of prejudicial publicity on their right to due
process while undergoing preliminary investigation. We find no procedural
impediment to its early invocation considering the substantial risk to their
liberty while undergoing a preliminary investigation.
In floating this issue, petitioners touch on some of the most problematic areas
in constitutional law where the conflicting demands of freedom of speech and
of the press, the public's right to information, and an accused's right to a fair
and impartial trial collide and compete for prioritization. The process of
pinpointing where the balance should be struck has divided men of learning as
the balance keeps moving either on the side of liberty or on the side of order as
the tumult of the time and the welfare of the people dictate. The dance of
balance is a difficult act to follow.
In democratic settings, media coverage of trials of sensational cases cannot be
avoided and oftentimes, its excessiveness has been aggravated by kinetic
developments in the telecommunications industry. For sure, few cases can
match the high volume and high velocity of publicity that attended the
preliminary investigation of the case at bar. Our daily diet of facts and fiction
about the case continues unabated even today. Commentators still bombard
the public with views not too many of which are sober and sublime. Indeed,
even the principal actors in the case the NBI, the respondents, their lawyers
and their sympathizers have participated in this media blitz. The possibility
of media abuses and their threat to a fair trial notwithstanding, criminal trials
cannot be completely closed to the press and the public. In the seminal case
53
of Richmond Newspapers, Inc. v. Virginia, it was wisely held:
xxx xxx xxx
(a) The historical evidence of the evolution of the criminal trial in
Anglo-American justice demonstrates conclusively that at the time this
Nation's organic laws were adopted, criminal trials both here and in

England had long been presumptively open, thus giving assurance that
the proceedings were conducted fairly to all concerned and
discouraging perjury, the misconduct of participants, or decisions
based on secret bias or partiality. In addition, the significant
community therapeutic value of public trials was recognized: when a
shocking crime occurs, a community reaction of outrage and public
protest often follows, and thereafter the open processes of justice
serve an important prophylactic purpose, providing an outlet for
community concern, hostility, and emotion. To work effectively, it is
important that society's criminal process "satisfy the appearance of
justice," Offutt v. United States, 348 US 11, 14, 99 L Ed 11, 75 S Ct 11,
which can best be provided by allowing people to observe such
process. From this unbroken, uncontradicted history, supported by
reasons as valid today as in centuries past, it must be concluded that a
presumption of openness inheres in the very nature of a criminal trial
under this Nation's system of justice, Cf., e.g., Levine v. United States,
362 US 610, 4 L Ed 2d 989, 80 S Ct 1038.
(b) The freedoms of speech, press, and assembly, expressly
guaranteed by the First Amendment, share a common core purpose of
assuring freedom of communication on matters relating to the
functioning of government. In guaranteeing freedoms such as those of
speech and press, the First Amendment can be read as protecting the
right of everyone to attend trials so as to give meaning to those
explicit guarantees; the First Amendment right to receive information
and ideas means, in the context of trials, that the guarantees of
speech and press, standing alone, prohibit government from
summarily closing courtroom doors which had long been open to the
public at the time the First Amendment was adopted. Moreover, the
right of assembly is also relevant, having been regarded not only as an
independent right but also as a catalyst to augment the free exercise
of the other First Amendment rights with which it was deliberately
linked
by
the draftsmen. A trial courtroom is a public place where the people
generally and representatives of the media have a right to be
present, and where their presence historically has been thought to
enhance the integrity and quality of what takes place.
(c) Even though the Constitution contains no provision which by its
terms guarantees to the public the right to attend criminal trials,
various fundamental rights, not expressly guaranteed, have been
recognized as indispensable to the enjoyment of enumerated rights.
The right to attend criminal trials is implicit in the guarantees of the
First Amendment; without the freedom to attend such trials, which
people have exercised for centuries, important aspects of freedom of
speech and of the press could be eviscerated.

Be that as it may, we recognize that pervasive and prejudicial publicity under

certain circumstances can deprive an accused of his due process right to fair
54
trial. Thus, in Martelino, et al. vs. Alejandro, et al., we held that to warrant a
finding of prejudicial publicity there must be allegation and proof that the
judges have been unduly influenced, not simply that they might be, by the
barrage of publicity. In the case at bar, we find nothing in the records that will
prove that the tone and content, of the publicity that attended the
investigation of petitioners fatally infected the fairness and impartiality of the
DOJ Panel. Petitioners cannot just rely on the subliminal effects of publicity on
the sense of fairness of the DOJ Panel, for these are basically unbeknown and
beyond knowing. To be sure, the DOJ Panel is composed of an Assistant Chief
State Prosecutor and Senior State Prosecutors. Their long experience in
criminal investigation is a factor to consider in determining whether they can
easily be blinded by the klieg lights of publicity. Indeed, their 26-page
Resolution carries no indubitable indicia of bias for it does not appear that they
considered any extra-record evidence except evidence properly adduced by the
parties. The length of time the investigation was conducted despite its
summary nature and the generosity with which they accommodated the
discovery motions of petitioners speak well of their fairness. At no instance, we
note, did petitioners seek the disqualification of any member of the DOJ Panel
on the ground of bias resulting from their bombardment of prejudicial
publicity.
It all remains to state that the Vizconde case will move to a more critical stage
as petitioners will now have to undergo trial on the merits. We stress that
probable cause is not synonymous with guilt and while the light of publicity
may be a good disinfectant of unfairness, too much of its heat can bring to
flame an accused's right to fair trial. Without imposing on the trial judge the
difficult task of supervising every specie of speech relating to the case at bar, it
behooves her to be reminded of the duty of a trial judge in high profile criminal
55
cases to control publicity prejudicial to the fair administration of justice. The
Court reminds judges that our ability to dispense impartial justice is an issue in
every trial and in every criminal prosecution, the judiciary always stands as a
silent accused. More than convicting the guilty and acquitting the innocent, the
business of the judiciary is to assure fulfillment of the promise that justice shall
be done and is done and that is the only way for the judiciary to get an
acquittal from the bar of public opinion.
IN VIEW WHEREOF, the petitions are dismissed for lack of showing of grave
abuse of discretion on the part of the respondents. Costs against petitioners.
SO ORDERED.
Regalado, J., concurs.
Mendoza, J., concurs in the result.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. 111206-08 October 6, 1995
PEOPLE OF THE PHILIPPINES, plaintiff-appellee,
vs.
CLAUDIO TEEHANKEE, JR., accused-appellant.
PUNO, J.:
Three (3) separate Informations were filed against accused Claudio Teehankee, Jr. for
the shooting of Roland John Chapman, Jussi Olavi Leino and Maureen Hultman. Initially,
he was charged with: MURDER for the killing of ROLAND CHAPMAN, and two (2)
FRUSTRATED MURDER for the shooting and wounding of JUSSI LEINO and MAUREEN
HULTMAN. When Hultman died on October 17, 1991, during the course of the trial, the
1
Information for Frustrated Murder against accused was amended to MURDER.
The Information for murder in Criminal Case No. 91-4605 thus reads:
That on or about the 13th day of July, 1991, in the Municipality of
Makati, Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the said Claudio Teehankee, Jr. y Javier, armed with
a handgun, with intent to kill and evident premeditation and by means
of treachery, did then and there wilfully, unlawfully and feloniously
attack, assault and shoot with and shoot with the said handgun Roland
John Chapman who war hit in the chest, thereby inflicting mortal
wounds which directly caused the death of said Roland John Chapman.
Contrary to law.

The Amended Information for Murder in Criminal Case No. 91-4606 reads:
That on or about the 13th day of July, 1991, in the Municipality of
Makati, Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the said Claudio Teehankee, Jr. y Javier, armed with
a handgun, with intent to kill and evident premeditation, and by
means of treachery, did then and there wilfully, unlawfully and
feloniously attack, assault and shoot with the said handgun Maureen
Navarro Hultman who was hit in the head, thereby inflicting moral
wounds which directly caused the death of the said Maureen Hultman.

CONTRARY TO LAW.

Finally, the Information for Frustrated Murder in Criminal Case No. 91-4607 reads:
That on or about the 13th day of July, 1991, in the Municipality of
Makati, Metro Manila, Philippines and within the jurisdiction of this
Honorable Court, the above-named accused, while armed with a
handgun, with intent to kill, treachery and evident premeditation did
then and there wilfully, unlawfully and feloniously attack, assault and
shoot one Jussi Olavi Leino on the head, thereby inflicting gunshot
wounds, which ordinarily would have caused the death of said Jussi
Olavi Leino, thereby performing all the acts of execution which would
have produced the crime of murder as a consequence, but
nevertheless did not produce it by reason of cause or causes
independent of his will, that is, due to the timely and able medical
assistance rendered to said Jussi Olavi Leino which prevented his
death.
Contrary to law.

In the two (2) Informations for frustrated murder initially filed against accused, bail was
set at twenty thousand pesos (P20,000.00) each. No bail was recommended for the
murder of Roland John Chapman. A petition for bail was thus filed by accused. Hearing
was set on August 9, 1991, while his arraignment was scheduled on August 14, 1991.
At the hearing of the petition for bail on August 9, 1991, the prosecution manifested
that it would present the surviving victim, Jussi Leino, to testify on the killing of
Chapman and on the circumstances resulting to the wounding of the witness himself
and Hultman. Defense counsel Atty. Rodolfo Jimenez objected on the ground that the
incident pending that day was hearing of the evidence on the petition for bail relative to
the murder charge for the killing of Chapman only. He opined that Leino's testimony on
the frustrated murder charges with respect to the wounding of Leino and Hultman
5
would be irrelevant.
Private prosecutor, Atty. Rogelio Vinluan, countered that time would be wasted if the
testimony of Leino would be limited to the killing of Chapman considering that the
crimes for which accused were charged involved only one continuing incident. He
pleaded that Leino should be allowed to testify on all three (3) charges to obviate delay
and the inconvenience of recalling him later to prove the two (2) frustrated murder
6
charges.
By way of accommodation, the defense suggested that if the prosecution wanted to
present Leino to testify on all three (3) charges, it should wait until after the
arraignment of accused on August 14, 1991. The defense pointed out that if accused did
not file a petition for bail, the prosecution would still have to wait until after accused
7
had been arraigned before it could present Leino.

The private prosecutor agreed to defer the hearing on the petition for bail until after
arraignment of accused on the condition that there shall be trial on the merits and, at
8
the same time, hearing on the petition for bail. The defense counsel acceded.
Upon arraignment, accused pleaded not guilty to the three (3) charges. The prosecution
then started to adduce evidence relative to all three (3) cases. No objection was made
9
by the defense.
A replay of the facts will show that on July 12, 1991, Jussi Olavi Leino invited Roland
Chapman, Maureen Hultman and other friends for a party at his house in Forbes Park,
Makati. The party started at about 8:30 p.m. and ended at past midnight. They then
10
proceeded to Roxy's, a pub where students of International School hang out. After an
hour, they transferred to Vintage, another pub in Makati, where they stayed until past
3:00 a.m. of July 13, 1991. Their group returned to Roxy's to pick up a friend of
11
Maureen, then went back to Leino's house to eat.
After a while, Maureen requested Leino to take her home at Campanilla Street,
12
Dasmarias Village, Makati. Chapman tagged along. When they entered the village,
Maureen asked Leino to stop along Mahogany Street, about a block away from her
house in Campanilla Street. She wanted to walk the rest of the way for she did not like
to create too much noise in going back to her house. She did not want her parents to
know that she was going home that late. Leino offered to walk with her while Chapman
13
stayed in the car and listened to the radio.
Leino and Maureen started walking on the sidewalk along Mahogany Street. When they
reached the corner of Caballero and Mahogany Streets, a light-colored Mitsubishi boxtype Lancer car, driven by accused Claudio Teehankee, Jr., came up from behind them
and stopped on the middle of the road. Accused alighted from his car, approached
them, and asked: "Who are you? (Show me your) I.D." Leino thought accused only
wanted to check their identities. He reached into his pocket, took out his plastic wallet,
14
and handed to accused his Asian Development Bank (ADB) I.D. Accused did not bother
15
to look at his I.D. as he just grabbed Leino's wallet and pocketed it.
Chapman saw the incident. All of a sudden, he manifested from behind Leino and
inquired what was going on. He stepped down on the sidewalk and asked accused:
"Why are you bothering us?" Accused pushed Chapman, dug into his shirt, pulled out a
gun and fired at him. Chapman felt his upper body, staggered for a moment, and asked:
"Why did you shoot me?" Chapman crumpled on the sidewalk. Leino knelt beside
16
Chapman to assist him but accused ordered him to get up and leave Chapman alone.
Accused then turned his ire on Leino. He pointed gun at him and asked: "Do you want a
trouble?" Leino said "no" and took a step backward. The shooting initially shocked
Maureen. When she came to her senses, she became hysterical and started screaming
for help. She repeatedly shouted: "Oh, my God, he's got a gun. He's gonna kill us. Will
somebody help us?"

All the while, accused was pointing his gun to and from Leino to Maureen, warning the
latter to shut up. Accused ordered Leino to sit down on the sidewalk. Leino obeyed and
made no attempt to move away. Accused stood 2-3 meters away from him. He knew he
could not run far without being shot by accused.
Maureen continued to be hysterical. She could not stay still. She strayed to the side of
accused's car. Accused tried but failed to grab her. Maureen circled around accused's
car, trying to put some distance between them. The short chase lasted for a minute or
two. Eventually, accused caught Maureen and repeatedly enjoined her to shut up and
17
sit down beside Leino.
Maureen finally sat beside Leino on the sidewalk. Two (2) meters away and directly in
18
front of them stood accused. For a moment, accused turned his back from the two.
He faced them again and shot Leino. Leino was hit on the upper jaw, fell backwards on
the sidewalk, but did not lose consciousness. Leino heard another shot and saw
Maureen fall beside him. He lifted his head to see what was happening and saw accused
19
return to his car and drive away.
Leino struggled to his knees and shouted for help. He noticed at least three (3) people
20
looking on and standing outside their houses along Caballero Street. The three were:
DOMINGO FLORECE, a private security guard hired by Stephen Roxas to secure his
21
residence at #1357 Caballero Street, Dasmarias Village, Makati; VICENTE
MANGUBAT, a stay-in driver of Margarita Canto, residing at #1352 Caballero Street,
22
corner Mahogany Street, Dasmarias Village; and AGRIPINO CADENAS, a private
security guard assigned at the house of Rey Dempsey, located at #1351 Caballero Street,
23
corner Mahogany Street, Dasmarias Village.
Security guards Florece and Cadenas were then on duty at the house of their employer,
while driver Mangubat was in his quarters, preparing to return to his own house. These
three (3) eyewitnesses heard the first gunshot while at their respective posts.
Upon hearing the first shot, Florece went out to Caballero Street to see what was
happening, while Mangubat and Cadenas peeped over the fence of their employer's
house and looked out to Caballero Street. Each saw a man (Chapman) sprawled on the
ground, another man (Leino) sitting on the sidewalk, a third man standing up ad holding
a gun and a woman (Hultman). They saw the gunman shoot Leino and Hultman and flee
aboard his Lancer car. However, because of Florece's distance from the scene of the
24
crime, he was not able to discern the face of the gunman. He saw the control
numbers of the gunman's car as 566. He described the gateway car as a box-type
25
Lancer, its color somewhat white ("medyo maputi"). Cadenas noticed in full the plate
number of the getaway car and gave it as PDW 566. He described the car as silver
26
metallic gray. Both Cadenas and Mangubat saw the gunman's face. They had a good
look at him. Cadenas was then a mere four (4) meters away from the gunman's
27
car, while Mangubat was about twenty (20) meters away from the scene of the
28
crime. The three confirmed that the corner of Caballero and Mahogany Streets where

the shooting took place was adequately illuminated by a Meralco lamppost at the time
29
of the incident.
After the gunman sped away, Mangubat ran outside his employer's house and went
near the scene of the crime. He noticed security guard Florece along Caballero Street. A
man on a bike passed by and Mangubat requested him to report the shooting incident
30
to the security officers of Dasmarias Village. Meanwhile, Florece returned to his post
and narrated to his employer, Mrs. Helen Roxas, what he saw. Mrs. Roxas repaired to
the crime scene while Florece noted the incident in his logbook (Exhibit "B"). He also
31
jotted down the license plate control number of the gunman's car as 566.
The security guards of Dasmarias Village came after a few minutes. They rushed Leino
32
and Maureen to the Makati Medical Center for treatment.
The Makati police and agents of the NBI also came. Patrolman JAMES BALDADO of the
Makati police, together with SPO3 ALBERTO FERNANDEZ, investigated the
33
incident. Their initial investigation disclosed that the gunman's car was a box-type
Mitsubishi Lancer with plate control number 566. They checked the list of vehicles
registered with the village Homeowners' Association and were able to track down two
(2) Lancer cars bearing plate control number 566. One was registered in the name of
JOSE MONTAO of 1823 Santan Street, Dasmarias Village, with plate number PKX 566,
and another was traced to accused CLAUDIO TEEHANKEE, JR., of 1339 Caballero Street,
Dasmarias Village, with plate number PDW 566.
SALVADOR RANIN, Chief of the Special Operations Group (SOG) of the NBI, was also
34
tasked by then NBI Director Alfredo Lim to head a team to investigate the shooting.
35
Ranin's team immediately proceeded to the house of Jose Montao where they found
ahead of them the Makati police and operatives of the Constabulary Highway Patrol.
Ranin tried to verify from Mrs. Montao whether the white Lancer car registered in the
name of Mr. Montao and bearing plate number 566 was the gunman's car. Mrs.
Montao denied and declared they had already sold the car to Saldaa Enterprises. She
averred the car was being used by one Ben Conti, a comptroller in said company, who
resides in Cubao, Quezon City. Mrs. Montao called up her husband and informed him
about the investigation. She also called up Conti and asked him to bring the car to the
36
house.
Jose Montao came around noon. Conti followed with white Lancer car. Ranin brought
them to the NBI office for investigation, together with Lancer car. At the NBI Ranin
inquired from Montao the whereabouts of his car on July 12 and 13, 1991. Montao
informed him that the car was at the residence of his employee, Ben Conti, at E.
Rodriguez Street, Cubao, Quezon City, the night of July 12, 1991. In the morning of July
13, 1991, Conti drove the car to their office at Saldaa Enterprises. Conti confirmed this
information. Ranin received the same confirmation from two (2) NBI agents who made a
countercheck of the allegation. Upon Ranin's request, Montao left his car at the NBI
37
parking lot pending identification by possible witnesses.

On July 14, 1991, a team of NBI agents conducted an on-the-spot investigation and
neighborhood inquiry of the shooting incident. They interviewed Domingo Florece and
38
asked him to report to their office the next day for further investigation. They also
interviewed Agripino Cadenas who was reluctant to divulge any information and even
denied having witnessed the incident. Sensing his reluctance, they returned to Cadenas'
post at Dasmarias Village that night and served him a subpoena, inviting him to appear
39
at the NBI office for investigation the next day. The NBI agents also talked with
Armenia Asliami, an Egyptian national residing at #1350 Caballero Street, Dasmarias
Village, near the scene of the crime. Asliami informed the agents that the gunman's car
was not white but light gray. A foreign national, Asliami was afraid and refused to give a
statement about the incident. The agents exerted every effort to convince Asliami to
cooperate, assuring her of their protection. Ranin even asked a representative of the
40
Egyptian embassy to coax Asliami to cooperate. They failed.
On July 15, 1991, Florece and Cadenas appeared at the NBI office as summoned. Florece
41
readily executed a sworn statement. Cadenas, however, continued to feign ignorance
and bridled his knowledge of the incident. He was lengthily interviewed. At around 2:00
p.m., the NBI agents informed SOG Chief Ranin that Cadenas was still withholding
information from them. Ranin talked to Cadenas in his office. Cadenas confided to Ranin
his fear to get involved in the case. He was apprehensive that the gunman would harass
or harm him or his family. After Ranin assured him of NBI protection, Cadenas
42
relented.
The next day, July 16, 1991, Cadenas gave a full disclosure to Ranin. He described the
gunman's car as a box-type Lancer with plate number PDW 566. He was brought to the
NBI parking lot where Montao's white Lancer car was parked to identify the gunman's
car. Ranin asked Cadenas if Montao's was the gunman's car. Cadenas replied that its
color was different. Ranin directed him to look around the cars in the parking lot and to
point the color that most resembled the color of the gunman's car. He pointed to a light
gray car. Ranin told him that the color of the car he pointed to was not white but light
43
gray.
Ranin then asked Cadenas if he could identify the gunman. Cadenas replied in the
affirmative. Ranin led Cadenas to his office and showed him ten (10) pictures of
different men (Exhibits "CC-1" to "CC-10) taken from the NBI files. One of the pictures
belonged to accused Claudio Teehankee, Jr. Cadenas studied the pictures, picked
accused's picture (Exhibit "CC-7"), and identified him as the gunman. Cadenas wrote his
name and the date at the back of said picture. Atty. Alex Tenerife of the NBI then took
44
down Cadenas' statement.
Ranin sent his agents and the witnesses to the Makati Regional Trial Court to apply for a
search warrant. After a searching examination of the witnesses, Judge Rebecca Salvador
issued a search warrant (Exhibit "RR"), authorizing the NBI to search and seize the silver
metallic gray, 1983 Mitsubishi Lancer car owned by accused, bearing plate number PDW
566. Ranin and his agents drove to accused's house at #1339 Caballero Street,
45
Dasmarias Village, to implement the warrant.

At accused's house, Ranin informed Mrs. Pilar Teehankee, mother of accused, of their
search warrant. Ranin also told Mrs. Teehankee that they had orders from Director Lim
to invite accused to the NBI office for investigation. Mrs. Teehankee informed them that
accused was not in the house at that time. She excused herself, went to the kitchen and
46
called up someone on the phone.
In the meantime, Ranin and his men slipped to the Teehankee garage and secured
accused's car. After a while, Mrs. Teehankee joined them. Ranin asked her for the car
keys but she told him that the keys were with accused. Upon Ranin's request, Mrs.
Teehankee got in touch with accused on the phone. Ranin conversed with accused and
invited him to the NBI for investigation. Accused assured Ranin that he would report to
47
the NBI later that day. The agents then towed the car of accused to the NBI office.
At around 9:00 p.m., accused's brother, Raul Teehankee, arrived at the NBI office and
waited for accused. Accused came, escorted by three (3) Makati policemen, after an
hour. He informed them that he just came from the Makati police station where he was
also investigated. He told Lim that he was given a statement to the Makati police and
48
was brought to the PC Crime Laboratory for paraffin test.
Accused's NBI investigation started. Lim asked accused of the whereabouts of his Lancer
car at the time of the shooting. Accused claimed that his car was involved in an accident
a few weeks back and was no longer functioning. The car had been parked in his
mother's house at Dasmarias Village since then. Due to the lateness of the evening, the
49
group decided to continue the investigation the following day.
The next day, July 17, 1991, after breakfast at the Manila Hotel, Lim pressed accused on
what really happened at Dasmarias Village. Accused said he did not see anything. Lim
apprised accused that he would be confronted with some eyewitnesses. Accused sank
50
into silence.
Lim directed Ranin to prepare a lineup at his office. Accused was requested to join the
lineup composed of seven (7) men and he acceded. Cadenas was called from an
51
adjoining room and Ranin asked him to identify the gunman from the lineup.
52
53
Forthwith, Cadenas pointed to accused. Accused merely stared at Cadenas.
On the same day, then Asst. Director Epimaco Velasco, Ranin and two (2) other agents
brought accused to Forbes Park for further identification by the surviving victim, Jussi
Leino. Leino has just been discharged from the hospital the day before. Since Leino's
parents were worried about his safety, they requested the NBI to conduct the
identification of the gunman in Forbes Park where the Leinos also reside. The NBI
54
agreed.
House security agents from the U.S. embassy fetched Leino at his house and escorted
him and his father to a vacant house in Forbes Park, along Narra Avenue. After a couple
of minutes, Leino was brought out of the house and placed in a car with slightly tinted
windows. The car was parked about five (5) meters away from the house. Inside the car

with Leino was his father, NBI-SOG Chief Salvador Ranin and a driver. Leino was
instructed to look at the men who would be coming out of the house and identify the
55
gunman from the lineup.
A group of five to six men (including accused) then came out of the unoccupied house,
into the street, in a line-up. Leino noticed that one of them was wearing sunglasses.
Since Leino could not yet speak at that time due to the extensive injury on his tongue,
he wrote down on a piece of paper a request for one of the men in the lineup to remove
his sunglasses. Leino handed this written request to his father. The men in the lineup
were herded back inside the house. After a couple of minutes, they again stepped out
and none was wearing sunglasses. From the lineup, Leino identified accused as the
56
gunman.
The agents brought back accused to the NBI. They prepared and referred the cases of
murder and double frustrated murder against accused to the Department of Justice for
appropriate action. At the inquest, Fiscal Dennis Villa-Ignacio did not recommend bail
57
insofar as the murder charge was concerned. Hence, accused was detained at the NBI.
The shooting incident was also investigated by the Makati Police. Pat. Baldado went to
see security guard Vicente Mangubat at his post, at the residence of his employer in
Dasmarias Village. Baldado interviewed Mangubat and invited him to the Makati police
58
station where his statement (Exhibit "D") was taken.
The next day, July 16, 1991, at about 8:30 a.m., Pat. Baldado fetched Mangubat from his
house and brought him to the Makati police station. At the station, Baldado told him to
wait for a man who would be coming and see if the person was the gunman. Mangubat
59
was posted at the top of the stairs at the second floor of the station.
After a couple of hours, accused, came with Makati police Major Lovete. He ascended
the stairs, passed by Mangubat and proceeded to Major Lovete's office at the second
floor. While accused was going up the stairs, Pat. Baldado inquired from Mangubat if
accused was the gunman. Mangubat initially declined to identify accused, saying that he
wanted to see the man again to be sure. He also confided to Pat. Baldado that he was
nervous and afraid for accused was accompanied by a police Major. When accused
came out from Major Lovete's office, Pat. Baldado again asked Mangubat if accused was
60
the gunman. Mangubat nodded his head in response. Accused, together with Major
Lovete and Pat. Baldado, boarded a Mercedes Benz and left. Mangubat was brought
61
back to his post at Dasmarias Village by other Makati policemen.
Two (2) days later, Pat. Baldado visited Mangubat at his employer's house and asked
him again if accused was really the gunman. Once more, Mangubat answered in the
affirmative. Pat. Baldado told Mangubat that he would no longer ask him to sign a
62
63
statement which he (Baldado) earlier prepared (Exhibit "HHH"). Baldado then left.
In the afternoon of July 23, 1991, Mangubat was also questioned by the NBI agents.
Director Lim asked Mangubat if he could recognize the gunman. Mangubat said he

could. Mangubat was shown twelve (12) pictures (Exhibits "E" to "E-11) of different men
and was asked to identify the gun gunman from them. He chose one picture (Exhibit "E10"), that of accused, and identified him as the gunman. Mangubat's statement was
taken. He was asked to return to the NBI the next day to make a personal
64
identification.

No demonstrable evidence of fracture. Note of

radioopaque foreign body (bullet fragments) along
the superior alveolar border on the right. No
remarkable findings.
CT SCAN #43992 July 13, 1991

When Mangubat returned, a lineup was prepared in Lim's office in the presence of the
media. At that time, accused's counsels, Attys. Jimenez and Malvar, were at the office of
then Asst. Director Epimaco Velasco protesting to the submission of accused to
identification. They pointed out that since the cases against accused had already been
filed in court and they have secured a court order for the transfer of accused to the
Makati municipal jail, any identification of accused should be made in the courtroom.
Asst. Director Velasco insisted on the identification as it was part of their on-going
investigation. Eventually, accused's counsels acquiesced but requested that
identification be made without the presence of the media. Velasco turned them down
and explained that if accused is not identified n the lineup, the media coverage would
65
favor accused.
All that time, accused was at the SOG office. He refused to join the lineup at Lim's office
and remained seated. Ranin was compelled to bring to the SOG office the men
composing the lineup and he asked them to go near accused. Ranin then told Mangubat
to go in the office. Mangubat pointed to accused as the gunman.
With the identification of accused by Mangubat, the NBI wrote finis to its
66
investigation.
JUSSI LEINO, the surviving victim, suffered the following injuries:
FINDINGS:
= Abrasion, 0.5 cm., temporal area, left.
= Wound, gunshot, entrance, circular in shape, 1.0
cm. in diameter, located at the upper lip, mouth,
along the medial line, directed backwards and
downwards, fracturing the maxillary bone and
central and lateral incisors, both sides, to the buccal
cavity then lacerating the tongue with fragments of
the bullet lodged in the right palatine, tongue and
tonsillar region.
SKULL
CHEST
FOR
July 13, 1991

RIBS

X-RAY

#353322

Small hyperdensities presumably bullet and bone

fragments in the right palatine, tongue and tonsillar
regions with associated soft tissue swelling.
Anterior maxillary bone comminuted fracture.
Temporal lobe contusions with small hematomata on the right side.
Minimal subarachnoid hemorrhage.
Intact bone calvarium.
xxx xxx xxx

67

Dr. Pedro Solis, testified that the bullet entered the left temple of Leino. After entering
Leino's head, it fractured his upper jaw and his front teeth. Some of the bullet fragments
pierced his palette and tongue. Brain scanning revealed contusions on the temporal
lobe and hemorrhage on the covering of the brain. Physical deformity resulted as a
consequence of the gunshot wound because of the fractured upper jaw and the loss of
the front teeth. Sutures were performed on the upper portion of his tongue.
68
Nonetheless, Leino's injuries on the tongue caused him difficulty in speaking.
Dr. Solis also testified as to the relative position of Leino and the gunman. He opined
that the muzzle of the gun, like in the case of Maureen, must have been at a higher level
than the victim's head. He concluded that the gun must have been pointed above
69
Leino's head considering the acuteness and downward trajectory of the bullet.
Dr. Leovigildo C. Isabela, a neuro-surgeon at the Makati Medical Center, operated on
MAUREEN HULTMAN. He testified that when he first saw Maureen, she was
unconscious and her face was bloodied all over. Maureen had a bullet hole on the left
side of the forehead, above the eyebrow. Brain tissues were oozing out of her nostrils
70
and on the left side of the forehead where the bullet entered.
They brought Maureen to the x-ray room for examination of her skull. She was also
given a CT scan. The examination revealed that she suffered injuries on the skull and
brain. There were several splintered bullets in her brain and the major portion of the
71
bullet, after it fragmented, was lodged beneath her right jaw.

Maureen was rushed to the operating room for surgery. Dr. Isabela led a team who
operated on her brain to arrest the bleeding inside her head, remove devitalized brain
tissues and retrieve the splintered bullets embedded in her brain. Due to the extensive
swelling of Maureen's brain and her very unstable condition, he failed to patch the
72
destroyed undersurface covering of her brain. After the surgery, Maureen's vital signs
continued to function but she remained unconscious. She was wheeled to the ICU for
further observation.
Two (2) weeks later, brain tissues and fluid continue to flow out of Maureen's nostrils
due to the unpatched undersurface covering of her brain, leaving the swollen portion of
her brain exposed. A second surgery was made on July 30, 1991 to repair Maureen's
brain covering. He used the fascia lata of Maureen's right thigh to replace the destroyed
covering of the brain. Nonetheless, Maureen remained unconscious. The trickle of brain
tissues through her nose was lessened but Maureen developed infection as a result of
the destruction of her brain covering. Maureen developed brain abscess because of the
infection. She underwent a third operation to remove brain abscess and all possible
73
focus of infection.
Testifying on the extensive injuries suffered by Maureen Hultman, Dr. Solis explained
that Maureen was shot at the left side of the forehead. The bullet entry was at 1.5 cm.
above the eyebrow. Upon entering the forehead, the bullet fragmented into pieces and
went from the left to the right side of the temple, fracturing the frontal bone of the
74
skull. The bullet eventually settled behind the right jaw of Maureen.
The wound inflicted on Maureen was mortal for it hit one of the most vital parts of the
body, the brain. When Maureen was subjected to CT scan, they discovered hemorrhage
in her brain. After the bullet hit her head, it caused hemorrhagic lesion on the ventricles
75
of the brain and the second covering of the brain.
The bullet also injured Maureen's eye sockets. There was swelling underneath the
forehead brought about by edema in the area. Scanning also showed that Maureen's
right jaw was affected by the fragmented bullet. The whole interior portion of her nose
76
was also swollen.
A team of doctors operated on Maureen's brain. They tried to control the internal
bleeding and remove the splintered bullets, small bone fragments and dead tissues. The
main bullet was recovered behind Maureen's right jaw. There was also an acute
downward trajectory of the bullet. Hence, it was opined that Maureen was shot while
77
she was seated.
With each passing day, Maureen's condition deteriorated. Even if Maureen survived,
she would have led a vegetating life and she would have needed assistance in the
78
execution of normal and ordinary routines. She would have been completely blind on
the left eye and there was possibility she would have also lost her vision on the right
eye. All her senses would have been modified and the same would have affected her
79
motor functions. There was practically no possibility for Maureen to return to normal.

Maureen did not survive her ordeal. After ninety-seven (97) days of confinement in the
hospital, she ceased to be a breathing soul on October 17, 1991.
For his exculpation, accused relied on the defense of denial and alibi. Accused claimed
that on said date and time, he was not anywhere near the scene of the crime. He
alleged that he was then in his house at #53 San Juan, Barrio Kapitolyo, Pasig. He slept at
around 1:00 a.m. on July 13, 1991 and woke up at around 8:00 or 9:00 a.m. that same
morning. Accused avowed his two (2) maids could attest to his presence in his house
80
that fateful day.
Accused averred that he only came to know the three (3) victims in the Dasmarias
shooting when he read the newspaper reports about it. He denied knowing prosecution
eyewitnesses Agripino Cadenas and Vicente Mangubat before they identified him as the
81
gunman.
Accused admitted ownership of a box-type, silver metallic gray Mitsubishi Lancer, with
plate number PDW 566. He, however, claimed that said car ceased to be in good
running condition after its involvement in an accident in February 1991. Since May 1991
until the day of the shooting, his Lancer car had been parked in the garage of his
mother's house in Dasmarias Village. He has not used this car since then. Accused,
however, conceded that although the car was not in good running condition, it could
82
still be used.
Accused said that on July 16, 1991, he went to the Makati police station at around 5:00
p.m. upon invitation of Chief of Police Remy Macaspac and Major Lovete who wanted to
ask him about the ownership of the Lancer car parked in his mother's house. He readily
gave a statement to the Makati police denying complicity in the crime. He submitted
himself to a paraffin test. He was accompanied by the Makati police to the Crime
83
Laboratory in Camp Crame and was tested negative for gunpowder nitrates. After the
test, he asked the Makati policemen to accompany him to the NBI for he had earlier
84
committed to his mother that he would present himself to Director Lim.
He arrived at Director Lim's office at about 9:30 to 10:00 p.m. He furnished Lim with the
statement he earlier gave to the Makati police. Thereafter, Lim detained him at the NBI
85
against his will.
The following day, July 17, 1991, Lim and his agents brought him to the Manila Hotel for
breakfast. When they returned to the NBI, he was asked to proceed to Lim's office. On
his way, he saw a lineup formed inside Lim's office. The NBI agents forced him to join
the lineup and placed him in the number seven (7) slot. He observed that the man who
was to identify him was already in the room. As soon as he walked up to the lineup,
86
Cadenas identified him as the gunman.
A second identification was made on the same day at a house in Forbes Park. The NBI
agents brought him to Forbes Park but he never saw Jussi Leino who allegedly identified
87
him as the gunman in a lineup.

A third identification was conducted on July 24, 1991. He was then seated at the office
of Ranin for he refused to join another lineup. Despite his protest, the NBI agents
insisted on the conduct of the identification and ordered a group of men to line up
alongside him. While thus seated, he was identified by Mangubat as the gunman. He
88
complained that he was not assisted by counsel at any stage of said investigation.

Anders admitted he had been vocal about the VIP treatment accorded to accused at the
Makati municipal jail. On several occasions, he checked on accused in jail and discovered
that accused was not in his cell. The jail guards even covered up accused's whereabouts.
His complaint was investigated by the Congressional Committee on Crime Prevention,
95
headed by Congressman Concepcion.

The defense also presented CLAUDIO TEEHANKEE III, son of accused Claudio Teehankee,
Jr. He testified that from May 1989 to February 1991, he had been using his father's
89
Lancer car bearing plate number PDW 566 in going to school.

The defense also presented two (2) Makati policemen, PAT. JAMES F. BALDADO and
SPO3 ALBERTO FERNANDEZ, who investigated the shooting.

In February 1991, while driving his father's Lancer car, he accidentally hit a bicycle driver
and two (2) trucks parked at the side of the road. The accident resulted in the death of
90
the bicycle driver and damage to his father's car, especially on its body. The timing of
the engine became a little off and the car was hard to start. They had the car repaired at
Reliable Shop located in Banawe Street, Quezon city. After a month, he brought the car
to the residence of his grandmother, Pilar Teehankee, at Dasmarias Village, Makati. He
personally started the car's engine and drove it to Makati from the shop in Quezon City.
He did not bring the car to their house in Pasig for it was still scheduled for further
repairs and they preferred to have the repair done in a shop in Makati. Teehankee III
claimed that from that time on, he was prohibited by his father from using the car
because of his careless driving. He kept the keys to the car and since he was busy in
91
school, no further repair on said car had been made.
Accused also imputed the commission of the crimes at bar to Anders Hultman, adoptive
father of deceased victim Maureen Hultman. He capitalized on a newspaper report that
the gunman may have been an overprotective father. This theory was formed when an
eyewitness allegedly overheard Maureen pleading to the gunman: "Huwag Daddy.
Huwag, Daddy." The defense presented Anders Hultman as a hostile witness.
ANDERS HULTMAN, testified that he is a Swedish national. He and Vivian Hultman were
married in the Philippines in 1981. Vivian had two (2) children by her previous marriage,
one of whom was Maureen. He legally adopted Vivian's two (2) daughters in 1991. He
92
and Vivian had three (3) children of their own.
The defense confronted Anders with one of the angles of the crime in the initial stage of
the investigation, i.e., that Maureen was overhead pleading to the gunman: "Huwag,
Daddy. Huwag, Daddy." Anders explained that Maureen could not have uttered those
words for Maureen never spoke Tagalog. He also said that all his children call him
93
"Papa," not "Daddy."
On July 12, 1991, he and Vivian permitted Maureen to have a night out but instructed
her to be home by 2:00 a.m. Maureen just received her first salary in her first job and
she wanted to celebrate with friends. At the time of the shooting, he and his wife were
sleeping in their house. He woke up at around 5:15 a.m. of July 13, 1991 when a security
94
guard came to their house and informed them about the killings.

Pat. Baldado testified that in the course of his investigation, he learned from Mr. Jose
Montao that he sold his white Lancer car, with plate number PKX 566, to Saldaa
Lending Investors in February 1991. This car was assigned to Ben Conti, Operations
Manager of said company and was in the residence of Conti at the time of the shooting.
The other witnesses he interviewed confirmed that Montao's white Lancer car was not
96
in the vicinity of Montao's residence at the time of the incident.
SPO3 Fernandez testified that he interviewed security guard Vicente Mangubat.
Mangubat saw the gunman and the get-away car but could not give the central letters
of the car's license plate. Fernandez went to one of the houses at the corner of
Mahogany and Caballero Streets and asked the maid therein if he could use the phone.
After placing a call, the maid told him that he saw the gunman and heard one of the
victims say: "Daddy, don't shoot. Don't, don't." Fernandez tried to get the maid's name
but the latter refused. The defense did not present this maid in court nor asked the
court to subpoena her to testify. Neither was the alleged statement of the maid
included in the Progress Report (Exhibit "13") prepared by the Makati police
97
investigators.
SPO3 Fernandez saw Mangubat the next time on July 16, 1991 when he and Baldado
fetched the latter at Dasmarias Village for identification of the gunman at the Makati
police station.
At the police station, Fernandez and Baldado posted Mangubat at the lobby. After a few
minutes, accused and company arrived. When accused passed by them, they instructed
Mangubat to look around and see if he could identify the gunman. Mangubat failed to
identify accused. Mangubat told Fernandez that the gunman was younger and shorter
98
than accused.
SPO3 Fernandez also took the statement of security guard Domingo Florece (Exhibit
"MM"). It was signed by Florece in his presence. In said statement, Florece described
99
the gunman's car as "medyo puti" (somewhat white).
ELIZABETH AYONON, forensic chemist of the PNP Crime Laboratory, testified on the
100
paraffin test she conducted on July 17, 1991 on both hands of accused. As per
101
Chemistry Report No. C 274-91, the test yielded a negative result of gunpowder
nitrates on accused's hands. In said Report, she noted that accused was subjected to
paraffin test more than seventy-two (72) hours after the shooting incident. She

explained that 72 hours is the reasonable period within which nitrate residues may not
be removed by ordinary washing and would remain on the hands of a person who has
102
fired a gun.

25, and three members of a family Estrellita Vizconde and her

daughters, Carmela, 19, and Anne Marie Jennifer, 7.
Exhibit "1-B"

ATTY. MANUEL Q. MALVAR, one of accused's counsel of record, also took the stand for
the defense. He testified that in the course of handling the cases, he was able to confer
with Ponferrada, Cadenas' supervisor at the Security agency where Cadenas was
employed. Ponferrada informed him that Cadenas confided to him that he was tortured
at the NBI and was compelled to execute a statement. Ponferrada, allegedly, refused to
testify. Atty. Malvar, however, admitted the defense did not compel the attendance of
Ponferrada by subpoena. On rebuttal, Cadenas denied the torture story.
Atty. Malvar also admitted that he and Atty. Jimenez were aware of the irregularities
committed in the off-court identification of their client. When asked what he did to
remedy this perceived irregularity, Malvar said he objected to the conduct of the lineup.
When further pressed whether he filed a petition for review raising this issue with the
Department of Justice upon the filing of the cases therewith, he said he did not. He
offered the excuse that he deferred to Atty. Jimenez, the principal counsel of accused at
that time. He also declared that although they knew that arraignment would mean
waiver of the alleged irregularities in the conduct of the investigation and preliminary
103
investigation, he and Atty. Jimenez allowed accused to be arraigned.

Police said that Chapman's assailant could have been angered when
Hultman, a 10th grader at the International School in Makati was
escorted home by Chapman after going to a disco.
Exhibit "1-C"
The lone gunman, witnesses told police, first pistol-whipped Hultman.
Exhibit "l-D"
The same witnesses said Chapman and Leino were shot when they
tried to escape.
Exhibit "1-E"
Other angles

The defense likewise relied on a number of news accounts reporting the progress in the
investigation of the case. It presented seven (7) newspaper reporters as witnesses, viz:
Nestor Barrameda of the Manila Times, Martin Marfil and Dave Veridiano of the
Philippine Daily Inquirer, Nida Mendoza of Malaya, Itchie Kabayan and Alex Allan of the
People's Journal and Elena Aben of the Manila Bulletin. The bulk of defense evidence
consists of newspaper clippings and the testimonies of the news reporters, thus:
NESTOR BARRAMEDA, a news reporter of the Manila Times identified two (2) news
reports as having been partly written by him. One was a news item, entitled: "JUSTICE
DEP'T ORDERS PROBE OF THREE METRO KILLINGS" (Exhibit "1"), appearing on the July
104
16, 1991 issue of the Manila Times. He, however, clarified that a news report is
usually the product of collaborative work among several reporters. They follow the
practice of pooling news reports where several reporters are tasked to cover one
subject matter. The news editor then compiles the different reports they file and
105
summarizes them into one story.
The defense lifted only certain portions of Exhibit "1" and marked them in evidence as
follows:
Exhibit "1-A":
Bello directed NBI Deputy Director Epimaco Velasco to take over the
investigation of the murders of Roland Chapman, 21, Eldon Maguan,

Velasco said "we are pursuing two angles" in the Chapman murder.
One, he said, is the jealousy angle and the other is a "highly sensitive"
106
matter that might involve influential people.
Barrameda testified that he had no personal knowledge of the content of the news
items marked as Exhibits "1-C" to "1-D". He just culled them from previous news reports
of other newspapers. He admitted that the only portion he wrote based on an actual
interview with NBI Asst. Director Velasco was Exhibit "I-E."
Barrameda identified another news item in the July 23, 1991 issue of the Manila Times,
entitled: "NBI INSISTS IT HAS "RIGHT" SUSPECT IN CHAPMAN SLAY" which was marked
107
as Exhibit "2." Certain portions thereof, which were not written by Barrameda, were
lifted by the defense and offered in evidence, viz:
Exhibit "2-a"
Superintendent Lucas Managuelod, CIS director for the national
capital region, claims, however, that another security guard, Vic
Mangubat, had testified before the police that another man, not
Teehankee, had fired at Chapman and his companions.

Exhibit "2-b"
The CIS official added that the absence of nitrite or powder burns on
Teehankee's hands as shown by paraffin tests at the CIS laboratory
108
indicated that he may not have fired the gun.
MARTIN MARFIL, a reporter of the Philippine Daily Inquirer identified two (2) newspaper
clippings which were partly written by him.
One news item, which appeared on the July 17, 1991 issue of the Philippine Daily
109
Inquirer, was entitled: "FBI JOINS PROBE OF DASMA SLAY" (Exhibit "3").
Again, the defense marked in evidence certain portions of Exhibit "3", thus:
Exhibit "3-a"
Witnesses said Hultman talked with the gunman whom she called
"Daddy" shortly before Chapman's shooting.
Exhibit "3-b"
But Ranin said they were also looking into reports that Hultman was a
dancer before she was adopted by her foster parent.
Exhibit "3-c"
Investigations showed that the gunman sped along Caballero street
inside the village after the shooting and was believed to have
proceeded toward Forbes Park using the Palm street gate.

The witness said the gunman was standing a few feet away near the
car and was talking to Hultman, who was shouting "Huwag! Daddy!"
110
several times.
Marfil's source of information was Director Lim. On cross-examination, Marfil
admitted that the news reports marked as Exhibits "3" and "4" were written
111
based on information available at that time.
NIDA MENDOZA, a reporter of the Malaya identified a news report, entitled:
"TEEHANKEE SON HELD ON DASMA SLAYING," which appeared on the July 18, 1991
issue of Malaya. She testified that she wrote a portion thereof, marked as Exhibit "5-c",
112
and the sources of her information were several Makati policemen. Exhibit "5-c"
reads:
Makati policemen, meanwhile, disputed NBI accounts that Teehankee
was arrested at his house.
They said Teehankee, the last remaining owner of a car with plate
control number 566 who had not been questioned, voluntarily went to
police headquarters upon invitation of Makati police chief
113
Superintendent Remy Macaspac.
The defense presented EXHIBITS "1-5" to prove: (a) the alleged concerted effort of the
investigators to implicate accused as the lone gunman; (b) that there were other
suspects aside from accused and that someone whom Maureen called as "Daddy" was
the actual gunman; (c) that the initial police investigation showed that the gunman's car
was a white Lancer with plate no. 566; and, (d) that after the NBI took over the
investigation, the white Lancer car of the gunman became a silver gray Lancer of
accused and thereafter, he became the gunman.

On cross-examination, Marfil admitted that he did not write Exhibits "3-a" and "3-c". He
just reiterated previous reports in other newspapers. They were based on speculations.

ITCHIE CABAYAN, a reporter of the People's Journal identified the portions she wrote in
the news item, entitled: ''I WILL HOUND YOU", which appeared on the October 24, 1991
issue of People's Journal (Exhibit "6"). She identified the source of her information as
114
Mr. Anders Hultman himself.

Marfil also wrote some portions of a news item, entitled: "TEEHANKEE SON HELD FOR
DASMA SLAY," which appeared on the July 18, 1991 issue of the Philippine Daily Inquirer
(Exhibit "4"), viz:

The portions thereof were marked in evidence by the defense, viz:

Exhibit "4-B"
According to NBI Director Alfredo Lim, the break in the case came
when the witness showed up and said that the gunman was on board
a silver-metallic Lancer.
Exhibit "4-C"

Exhibit "6-a"
"I will be visiting him often and at the most unexpected occasion,"
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Hultman said the day after his 17-year old daughter was cremated.
Exhibit "6-b"

The day Maureen died, a congressional hearing granted the Hultman

family's request for permission to visit Teehankee in his cell "at
anytime of their choice."

Veridiano likewise identified a news item which appeared on the July 1991 issue of the
Inquirer, entitled: "N.B.I. FINDINGS DISPUTED, SECOND WITNESS TAGS TEEHANKEE"
(Exhibit "8"). The portions of said news item which he wrote were marked in evidence
by the defense, viz:

Exhibit "6-c"
Exhibit "8-a"
"If on my next visit he still refuses to come out and is still hiding
behind the curtain," Hultman said, "Congress told me that I can take
116
the curtain down and jail authorities will pull him out."
ALEX ALLAN, also a reporter of People's Journal co-wrote the news item marked as
117
Exhibit "6". Specifically, he wrote Exhibits "6-d" and "6-e" which read:
Exhibit "6-d"
"Kaawaawa naman ang mga Hultmans, tulungan natin sila," Ong was
quoted as telling Vergel de Dios.
Exhibit "6-e"
BIR insiders said Ong has shown a keen interest in the ChapmanHultman, Vizconde and Eldon Maguan cases because he belongs to a
secret but very influential multi-sectoral group monitoring graft and
corruption and other crimes in high levels of government and
118
society.
Allan was not able to check or verify the information in Exhibit "6-e" given to him by BIR
119
insiders for the latter refused to be identified.

At the Criminal Investigation Service, however, an investigator who

asked not to be identified insisted that the NBI got the wrong man.
The NBI has taken over the case from the CIS.
Exhibit "8-c"
He said the CIS will shortly identify the suspect killer whom he
described as "resembling Teehankee but looks much younger."
Exhibit "8-e"
The source said that the police's "prime witness," identified only as
Mangubat, saw everything that happened in the early morning of July
13. The witness, however, failed to identify Teehankee as the
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gunman.
Veridiano was shown another news report, entitled: "CIS GIVES UP CHAPMAN SLAY
CASE", which appeared on the July 26, 1991 issue of the Philippine Daily Inquirer (Exhibit
123
124
9). He wrote the entire news account, portions of which were marked by the
defense in evidence, thus:
Exhibit "9-a"

Exhibit "6" and its sub-markings were offered to prove: (a) the alleged blind and
consuming personal rage and bias of Anders Hultman against accused; and (b) the
unwarranted pressure, prejudice and prejudgment by some congressional leaders in
favor of the Hultmans in violation of due process.
DAVE VERIDIANO, a reporter of the Philippine Daily Inquirer, identified the news
account which appeared on the July 16, 1991 issue of the Inquirer, entitled: "DASMA
SLAY SUSPECT IDENTIFIED" (Exhibit "7"). He wrote a portion of said article (Exhibit "7-c")
120
and the source of his information was Camp Crame. It reads:
Exhibit "7-c"
Witnesses said the gunman fled aboard a white Mitsubishi Lancer with
plate number "566." The witnesses cannot tell the plate's control
121
letters.

The CIS pulled out from the case a day after its so-called "surprise
witness" picked Claudio Teehankee, Jr. from an NBI lineup.
He gathered this information from his source but he was not able to interview
125
Mangubat himself.
Exhibit "9-b"
Sira ulo pala siya (Mangubat). Ilang beses kong pinarada sa kanya si
Bobby (Teehankee Jr.) puro iling siya. Hindi raw ito ang
suspect. Ngayon bigla niyang ituturo, said a red-faced Makati
investigator who, as usual, did not want to be identified.
ELENA ABEN, a reporter from the Manila Bulletin, wrote the entire article, entitled: "US
DIPLOMAT'S SON SHOT DEAD", which appeared on the July 14, 1991 issue of the Manila

Bulletin (Exhibit "10").

defense, viz:

126

Two (2) portions thereof were marked as evidence by the

Finally, his article, entitled: "MAKATI SLAY SUSPECT IDENTIFIED" (Exhibit "23"), which
appeared on the July 18, 1991 issue of the Manila Bulletin, was introduced by the
defense in evidence as follows:

Exhibit "10-a-1"
Exhibit "23-a-1"
The victims were on their way home in Olanileino's Mercedez Benz
with a diplomat's plate number when a white Lancer with plate
number PKX-566 blocked its path.

The NBI said Teehankee was one of four men who blocked Chapman's
car on Mahogany St. in the subdivision.

Exhibit "10-a-2"

Exhibit "23-a-2"

US embassy spokesman Stanley Schrager said Chapman's father is a

communications specialist. He said the shooting could be the result of
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an altercation on the street.

Witnesses said they saw Teehankee order Chapman and his two
companions, Maureen Hultman and Jussi Olanileino, a Finn, to get out
of their car.

Finally, VICTOR VEGA, a reporter of the Manila Bulletin, identified the news account he
wrote which appeared on the July 16, 1991 issue of the Bulletin, entitled: "4 MURDER
SUSPECTS FALL" (Exhibit "22"). Portions of said news item were marked by the defense
as follows:

Exhibit "23-a-3"
They identified the car used by the suspect, a silver gray Lancer with
plate No. PDW 566. They added that they saw the same car in the
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garage of the Teehankee family.

Exhibit "22-b"
. . . He was shot to death by a group of armed men at the corner of
Mahogany and Caballero Sts. in Dasmarias Village at past 4 a.m.
Friday.
Exhibit "22-c"
The NBI sources said that jealousy sparked the slaying of Chapman
who was killed in front of his friends on his way home from a party.
The armed men, on board a white Lancer car, blocked the path of the
victim's Mercedes Benz car inside the village before the shooting.
Exhibit "22-a-1"
The gunmen then alighted from their car and at gunpoint ordered
Chapman to alight from the car. They shot Chapman several times in
the body, while his companions identified as Maureen Hultman, and
Jussi Olanileino, were seriously wounded when the gunmen sprayed
the car with bullets.
The gunmen escaped after the shooting. Lim said he will announce
later the names of the detained suspects after their initial
128
investigation.

On cross-examination, Vega declared that the source of his two (a) stories was the NBI
130
and they were based on information available to the NBI at that time
The prosecution recalled to the stand eyewitness VICENTE MANGUBAT as its rebuttal
witness. Mangubat insisted that he was able to identify accused when he saw the latter
at the Makati police station. Her reiterated that the next day, Pat. Baldado of the Makati
police went to his place of work in Dasmarias Village and asked him if he was sure
about the identity of the gunman. He told Baldado he was positive. Baldado then said
him he would no longer require him to sign the statement he prepared for him
131
earlier.
LEONORA C. VALLADO, chief of the Forensic Chemistry Division of the NBI, was also
presented as a prosecution rebuttal witness. She testified that extensive washing of
hands or excessive perspiration can eliminate gunpowder nitrates lodged on skin pores
of the hands. Continued washing with hot water can induce perspiration and remove
nitrate residue embedded in the skin pores. Application of vinegar on the hand can
132
register the same effect.
She testified that their practice at the NBI is to take the paraffin test on a suspect within
72 hours from the time of the alleged firing of a gun, during which time, any possible
133
trace of nitrate may still be found.
She divulged that questions have been raised regarding the reliability of the paraffin
test. She related that she once attended a training in Baguio City where they tried to

test the accuracy of a paraffin test. In said training, two (2) NBI agents fired a .38
revolver. One of them washed his hands. They then subjected both agents to a paraffin
test using diphylamine reagent. Both yielded a negative result. Thus, she opined, the
result of a paraffin test should merely be taken as a corroborative evidence and
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evaluated together with other physical evidence.
The records show that the case was set for hearing on October 29, 1992 for the
presentation by the defense of sur-rebuttal evidence. However, a day before the
135
scheduled hearing, the defense filed a Constancia manifesting that it shall waive its
right to present sur-rebuttal evidence, the same being unneccesary. The defense,
however, declared that this is without prejudice to the presentation of its evidence in
the trial proper should the same be necessary.
At the hearing of October 29, 1992, the defense counsels did not appear. The
prosecution moved in open court that the main cases and the petition for bail be
submitted for decision in view of the absence of defense counsels who had manifested
that they would no longer present their sur-rebuttal evidence. The motion was granted
and the parties were given ten (10) days from receipt of the Order within which to
136
submit their simultaneous Memorandum. It does not appear that the defense
objected to this Order. The records show that the defense even filed a motion asking for
137
additional time to file its Memorandum. In due time, both parties submitted their
respective Memorandum.
On December 22, 1992, the trial court convicted accused CLAUDIO TEEHANKEE, JR. of
138
the crimes charged. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the Court hereby renders
judgment:
(1) In criminal Case No. 91-4605, finding accused Claudio J. Teehankee,
Jr., guilty beyond reasonable doubt of the offense of Murder, qualified
by treachery, for the fatal shooting of Roland John Chapman, and
sentencing said accused to suffer imprisonment of Reclusion perpetua,
and to pay the heirs of the said deceased the sum of Fifty Thousand
Pesos (P50, 000.00), Philippine Currency, plus moderate or temperate
and exemplary damages in the sum of Five Hundred Thousand Pesos
(P500,000.00), Philippine Currency;
(2) In Criminal Case No. 91-4606, finding accused Claudio J.
Teehankee, Jr., guilty beyond reasonable doubt of the offense of
Murder, qualified by treachery, for the fatal shooting of Maureen
Navarro Hultman, and sentencing him to suffer imprisonment
of Reclusion Perpetua, and to pay the heirs of the said deceased the
sum of Fifty Thousand Pesos (P50,000.00), Philippine Currency, plus
the sums of Two Million Three Hundred Fifty Thousand Four Hundred
Sixty-One Pesos and Eighty-Three Centavos (P2,350,461.83), Philippine

Currency, as actual damages; Thirteen Million Pesos (P13,000,000.00),

Philippine Currency, for loss of earning capacity of the said deceased;
and One Million Pesos (P1,000,000.00), Philippine Currency, as moral,
moderate and exemplary damages;
(3) In Criminal Case No. 91-4607, finding accused Claudio J.
Teehankee, Jr., guilty beyond reasonable doubt of the offense of
Frustrated Murder, qualified by treachery, for the shooting of Jussi
Olavi Leino, and sentencing him to suffer the indeterminate penalty of
eight (8) years of prision mayor, as minimum, to ten (10) years and
one (1) day of prision mayor, as maximum, and to pay the said
offended party the sum of Thirty Thousand Pesos (P30,000.00),
Philippine Currency; plus the sum of One Hundred Eighteen Thousand
Three Hundred Sixty-Nine Pesos and Eighty-Four Centavos
(P118,369.84), Philippine Currency, and another sum equivalent in
Philippine Pesos of U.S. $55,600.00, both as actual damages; an
amount equivalent in Philippine Pesos of U.S. $40,000.00, as loss of
earning capacity of said offended party; and One Million Pesos
(P1,000,000.00), Philippine Currency, as moral, moderate and
exemplary damages.
(4) In all these three cases ordering said accused to pay all the
offended parties the sum of Three Million Pesos (P3,000,000.00),
Philippine Currency, as and for attorney's fees and expenses of
litigation; and
(5) To pay the costs in these three cases.
Consequently the petition for bail is hereby denied for utter lack of
merit.
SO ORDERED.
Accused hired a new counsel in the person of Atty. Nicanor B. Gatmaytan, Jr. He filed a
139
Motion for New Trial, alleging for the first time that the trial court erred in
considering as submitted for decision not only the petition for bail but also the case on
the merits. He claimed that accused's right to adduce further evidence was violated. His
motion for new trial was denied.
Accused interposed the present appeal.

140

He contends that:

I. THE LOWER COURT ERRED IN FINDING THAT THE ACCUSED HAD

BEEN POSITIVELY IDENTIFIED BY JUSSI LEINO, CADENAS AND
MANGUBAT AS THE ONE WHO SHOT HIM, ROLAND CHAPMAN AND
MAUREEN NAVARRO HULTMAN.

II. THE PROSECUTION HAS FAILED TO ESTABLISH THE GUILT OF THE

ACCUSED BEYOND REASONABLE DOUBT.
III. THE PUBLICITY GIVEN THE CASE AGAINST THE APPELLANT WAS
MASSIVE, OVERWHELMING, AND PREJUDICIAL AS TO EFFECTIVELY
DEPRIVE THE ACCUSED OF RIGHT TO IMPARTIAL TRIAL.
IV. THE LOWER COURT ERRED IN FINDING THAT THE KILLING OF
CHAPMAN AND HULTMAN AND THE SHOOTING OF LEINO WAS
ATTENDED BY TREACHERY.
V. THE LOWER COURT ERRED IN GRANTING EXORBITANT MORAL AND
EXEMPLARY DAMAGES AND LOSS OF EARNING CAPACITY.

Lastly, that Leino could not have remembered the face of appellant. The shooting lasted
for only five (5) minutes. During that period, his gaze could not have been fixed only on
the gunman's face. His senses were also dulled by the five (5) bottles of beer he imbibed
that night.
It is understandable for appellant to assail his out-of-court identification by the
prosecution witnesses in his first assignment of error. Eyewitness identification
constitutes vital evidence and, in most cases, decisive of the success or failure of the
prosecution. Yet, while eyewitness identification is significant, it is not as accurate and
authoritative as the scientific forms of identification evidence such as the fingerprint or
DNA testing. Some authors even describe eyewitness evidence as "inherently
141
suspect." The causes of misidentification are known, thus:
xxx xxx xxx

VI. THE LOWER COURT ERRED IN AWARDING ATTORNEY'S FEES OF

THREE MILLION PESOS (P3,000,000.00).
VII. THE LOWER COURT ERRED IN RENDERING JUDGMENT ON THE
MERITS AND ON THE PETITION FOR BAIL AT THE SAME TIME WITHOUT
GIVING THE ACCUSED THE OPPORTUNITY TO PRESENT ADDITIONAL
EVIDENCE IN HIS DEFENSE ON THE MERITS OF THE CASE AND
DENYING THE ACCUSED'S MOTION FOR NEW TRIAL.
We shall discuss these alleged errors in seriatim.
Appellant was convicted on the strength of the testimonies of three (3) eyewitnesses
who positively identified him as the gunman. He vigorously assails his out-of-court
identification by these eyewitnesses.
He starts by trying to discredit the eyeball account of Jussi Leino, the lone surviving
victim of the crimes at bar. Appellant urges:
First, that Leino's identification of him outside an unoccupied house in Forbes Park was
highly irregular.
Second, that Leino saw his pictures on television and the newspapers before he
identified him.
Third, that Leino's interview at the hospital was never put in writing.
Fourth, that the sketch of appellant based on the description given by Leino to the CIS
agents was suppressed by the NBI. It is surmised that the sketch must have been among
the evidence turned over to the NBI when the latter assumed jurisdiction over the
investigation.

Identification testimony has at least three components. First,

witnessing a crime, whether as a victim or a bystander, involves
perception of an event actually occurring. Second, the witness must
memorize details of the event. Third, the witness must be able to
recall and communicate accurately. Dangers of unreliability in
eyewitness testimony arise at each of these three stages, for
whenever people attempt to acquire, retain, and retrieve information
accurately, they are limited by normal human fallibilities and
142
suggestive influences. (Emphasis Supplied)
Out-of-court identification is conducted by the police in various ways. It is done thru
show-ups where the suspect alone is brought face to face with the witness for
identification. It is done thru mug shots where photographs are shown to the witness to
identify the suspect. It is also done thru line-ups where a witness identifies the suspect
from a group of persons lined up for the purpose. Since corruption of out-ofcourt identification contaminates the integrity of in-court identification during the trial
of the case, courts have fashioned out rules to assure its fairness and its compliance
with the requirements of constitutional due process. In resolving the admissibility of and
relying on out-of-court identification of suspects, courts have adopted the totality of
circumstances test where they consider the following factors, viz: (1) the witness'
opportunity to view the criminal at the time of the crime; (2) the witness' degree of
attention at that time; (3) the accuracy of any prior description given by the witness; (4)
the level of certainty demonstrated by the witness at the identification; (5) the length of
time between the crime and the identification; and, (6) the suggestiveness of the
143
identification procedure.
Using the totality of circumstances test, we hold that the alleged irregularities cited by
appellant did not result in his misidentification nor was he denied due process. There is
nothing wrong in Leino's identification of appellant in an unoccupied house in Forbes
Park. The records reveal that this mode was resorted to by the authorities for security
144
reasons. The need for security even compelled that Leino be fetched and escorted

from his house in Forbes Park by U.S. embassy security officials and brought to the
house where he was to make the identification. The Leinos refused to have the
identification at the NBI office as it was cramped with people and with high security
145
risk. Leino's fear for his safety was not irrational. He and his companions had been
shot in cold blood in one of the exclusive, supposedly safe subdivisions in the
metropolis. Atty. Salvador Ranin, Chief of the Special Operations Group of the NBI,
correctly testified that there is no hard and fast rule as to the place where suspects are
identified by witnesses. Identification may be done in open field. It is often done in
146
hospitals while the crime and the criminal are still fresh in the mind of the victim.
Appellant cannot also gripe that Leino saw his pictures and heard radio and TV accounts
of the shooting before he personally identified him. Indeed, the records show that on
July 15, 1991, while Leino was still in the hospital, he was shown three (3) pictures of
different men by the investigators. He identified appellant as the gunman from these
pictures. He, however, categorically stated that, before the mug shot identification, he
has not seen any picture of appellant or read any report relative to the shooting
147
incident. The burden is on appellant to prove that his mug shot identification was
unduly suggestive. Failing proof of impermissible suggestiveness, he cannot complain
about the admission of his out-of-court identification by Leino.
We have no reason to doubt the correctness of appellant's identification by Leino. The
scene of the crime was well-lighted by a Meralco lamp post. Appellant was merely 2-3
meters away when he shot Leino. The incident happened for a full five (5) minutes.
Leino had no ill-motive to falsely testify against appellant. His testimony at the trial was
straightforward. He was unshaken by the brutal cross-examination of the defense
counsels. He never wavered in his identification of appellant. When asked how sure he
was that appellant was responsible for the crime, he confidently replied: "I'm very sure.
148
It could not have been somebody else."
Appellant cannot likewise capitalize on the failure of the investigators to reduce to a
sworn statement the information revealed by Leino during his hospital interviews. It was
sufficiently established that Leino's extensive injuries, especially the injury to his tongue,
limited his mobility. The day he identified appellant in the line-up, he was still physically
149
unable to speak. He was being fed through a tube inserted in his throat. There is also
no rule of evidence which requires the rejection of the testimony of a witness whose
statement has not been priorly reduced to writing. Reliance by appellant on the case
150
of People v. Alindog to erode Leino's credibility is misplaced. In Alindog, accused was
acquitted not solely on the basis of delay in taking his statement, but mainly on the
finding that the prosecution evidence was, at best, circumstancial and "suspiciosly short
in important details," there being no investigation whatsoever conducted by the police.
We also reject appellant's contention that the NBI suppressed the sketch prepared by
the CIS on the basis of the description given by Leino. There is nothing on the record to
show that said sketch was turned over by the CIS to the NBI which could warrant a
presumption that the sketch was suppressed. The suspicion that the sketch did not
resemble appellant is not evidence. It is unmitigated guesswork.

We are not likewise impressed with the contention that it was incredible for Leino to
have remembered appellant's face when the incident happened within a span of five (5)
minutes. Five (5) minutes is not a short time for Leino to etch in his mind the picture of
appellant. Experience shows that precisely because of the unusual acts of bestiality
committed before their eyes, eyewitnesses, especially the victims to a crime, can
151
remember with a high degree of reliability the identity of criminals. We have ruled
that the natural reaction of victims of criminal violence is to strive to see the
appearance of their assailants and observe the manner the crime was committed. Most
often, the face end body movements of the assailant create an impression which cannot
152
be easily erased from their memory. In the case at bar, there is absolutely no
improper motive for Leino to impute a serious crime to appellant. The victims and
appellant were unknown to each other before their chance encounter. If Leino
identified appellant, it must be because appellant was the real culprit.
Appellant also assails his identification by Cadenas. He contends that Cadenas did not
witness the crime. He stresses that when the Dasmarias security force and the Makati
police conducted an on-the-spot investigation on the day of the incident, neither came
across Cadenas. The next day, in the afternoon of July 14, 1991, an NBI agent
interviewed Cadenas and asked if he saw the incident. He merely replied: "Nakita ko
pero patay na." He did not volunteer information to anyone as to what he supposedly
witnessed. That same night, the NBI subpoenaed him for investigation. He went to the
NBI the next morning. It was only the next day, July 16, 1991, that he gave his statement
to the NBI. Cadenas allegedly told Ponferrada, his supervisor, that the NBI tortured him.
We reject appellant's submission. Cadenas' initial reluctance to reveal to the authorities
what he witnessed was sufficiently explained during the trial. He related that he feared
for his and his family's safety. His fear was not imaginary. He saw with his own eyes the
senseless violence perpetrated by appellant. He knew appellant belonged to an
influential family. It was only after consistent prodding and assurance of protection from
153
NBI officials that he agreed to cooperate with the authorities. The Court has taken
judicial notice of the natural reticence of witnesses to get involved in the solution of
crimes considering the risk to their lives and limbs. In light of these all too real risks, the
court has not considered the initial reluctance of fear-gripped witnesses to cooperate
154
with authorities as an authorities as an indicium of credibility. It will not depart from
this ruling.
Appellant's assertion that Cadenas was tortured by the NBI is not borne out by the
records. Supposedly, Cadenas passed on to his superior, a certain Ponferrada,
information about his torture. The allegation is an out and out hearsay as Ponferrada
was not presented in the witness stand. Cadenas himself stoutly denied this allegation
of torture. The claim of torture is also belied by the fact that Cadenas' entire family was
155
allowed to stay with him at the NBI headquarters and likewise extended protection.
Appellant then discredits his identification by VICENTE MANGUBAT, citing the testimony
of defense witness Pat. James Baldado of the Makati Police. Pat. Baldado testified that
Mangubat failed to identify appellant as the gunman the first time he was brought to

the Makati police station. Mangubat, however, belied Baldado's story. He declared he
positively identified appellant as the gunman at the Makati police station. He averred
that the day after he identified appellant, Pat. Baldado returned to his place of work in
Dasmarias and asked him again whether appellant was the gunman. Again, he replied
in the affirmative. Forthwith, Pat. Baldado said he would no longer ask him to sign a
156
statement (Exhibit "HHH") earlier prepared by Baldado. In said statement previously
prepared by Baldado, Mangubat was supposed to state that appellant, whom he saw at
the Makati police station, was NOT the gunman. We give more weight to the testimony
of Mangubat. We find nothing in the records to suspect that Mangubat would perjure
himself. The Court cannot be as generous to Pat. Baldado of the Makati Police. Mr.
Hultman has proved that the Makati police, including some of its jail officials, gave
appellant favored treatment while in their custody. The anomaly triggered nothing less
than a congressional investigation.
II
We now rule on appellant's second assignment of error, i.e., that the trial court erred in
not holding that the prosecution failed to establish his guilt beyond reasonable doubt.
First, he claims the trial court erred in citing in its Decision his involvement in previous
157
shooting incidents for this contravenes the rule that evidence that one did or omitted
to do a certain thing at one time is not admissible to prove that he did or omitted to do
the same or similar thing at another time. Second, the NBI failed to conduct an
examination to compare the bullets fired from the gun at the scene of the crime with
the bullets recovered from the body of Chapman. Third, the prosecution eyewitnesses
described the gunman's car as white, but the trial court found it to be silver mettalic
gray. Fourth, appellant could not have been the gunman for Mangubat, in his statement
dated July 15, 1991, said that he overheard the victim Maureen Hultman plead to the
gunman, thus: "Please, don't shoot me and don't kill me. I promise Mommy, Daddy."
Appellant also contends that a maid in a house near the scene of the crime told Makati
police Alberto Fernandez that she heard Maureen say: "Daddy don't shoot. Don't." Fifth,
the NBI towed accused's car from Dasmarias Village to the NBI office which proved
that the same was not in good running condition. Lastly, the result of the paraffin test
conducted on appellant showed he was negative of nitrates.
Appellant points to other possible suspects, viz:. ANDERS HULTMAN, since one of the
eyewitnesses was quoted in the newspapers as having overheard Maureen plead to the
gunman: "Huwag, Daddy."; and, (b) JOSE MONTAO, another resident of Dasmarias
Village, who had a white Lancer car, also bearing license plate number 566.
We reject appellant's thesis as bereft of merit.
Appellant cannot hope to exculpate himself simply because the trial judge violated the
rule on res inter alios actawhen he considered his involvement in previous shooting
incidents. This stance is a specie of a mid-1800 rule known as the English Exchequer Rule
pursuant to which "a trial court's error as to the admission of evidence was presumed to

158

have caused prejudice and therefore, almost automatically required a new trial." The
Exchequer rule has long been laid to rest for even English appellate courts now
disregard an error in the admission of evidence "unless in its opinion, some substantial
159
wrong or miscarriage (of justice) has been occasioned." American courts adopted this
approach especially after the enactment of a 1915 federal statute which required a
federal appellate court to "give judgment after an examination of the entire record
before the court, without regard to technical errors, defects, or exceptions which do not
160
affect the substantial rights of the parties." We have likewise followed the harmless
error rule in our jurisdiction. In dealing with evidence improperly admitted in trial, we
examine its damaging quality and its impact to the substantive rights of the litigant. If
the impact is slight and insignificant, we disregard the error as it will not overcome the
161
weight of the properly admitted evidence against the prejudiced party.
In the case at bar, the reference by the trial judge to reports about the troublesome
character of appellant is a harmless error. The reference is not the linchpin of the
inculpatory evidence appreciated by the trial judge in convicting appellant. As
aforestated, the appellant was convicted mainly because of his identification by three
(3) eyewitnesses with high credibility.
The NBI may have also failed to compare the bullets fired from the fatal gun with the
bullets found at the scene of the crime. The omission, however, cannot exculpate
appellant. The omitted comparison cannot nullify the evidentiary value of the positive
identification of appellant.
There is also little to the contention of appellant that his Lancer car was not in running
condition. Allegedly, this was vicariously proved when the NBI towed his car from
Dasmarias Village where it was parked to the NBI office. Again, the argument is
negated by the records which show that said car was towed because the NBI could not
get its ignition key which was then in the possession of appellant. Clearly, the car was
towed not because it was not in running condition. Even appellant's evidence show that
said car could run. After its repairs, appellant's son, Claudio Teehankee III, drove it from
the repair shop in Banawe, Quezon City to Dasmarias Village, in Makati, where it was
162
parked.
Nor are we impressed by the alleged discrepancies in the eyewitnesses' description of
the color of the gunman's car. Leino described the car as light-colored; Florece said the
163
car was somewhat white ("medyo puti"); Mangubat declared the car was
164
165
white; and Cadenas testified it was silver metallic gray. These alleged
discrepancies amount to no more than shades of differences and are not meaningful,
referring as they do to colors white, somewhat white and silver metallic gray.
Considering the speed and shocking nature of the incident which happened before the
break of dawn, these slight discrepancies in the description of the car do not make the
prosecution eyewitnesses unworthy of credence.
Appellant's attempt to pin the crimes at bar on Anders Hultman, the adoptive father of
Maureen Hultman, deserves scant consideration. Appellant cites a newspaper

166

item where Maureen was allegedly overheard as saying to the gunman: "Huwag,
Daddy. Huwag, Daddy." The evidence on record, however, demonstrates that Anders
Hultman could not have been the gunman. It was clearly established that Maureen
could not have uttered said statement for two (2) reasons: Maureen did not speak
167
Tagalog, and she addressed Anders Hultman as "Papa," not "Daddy." Moreover, Leino
outrightly dismissed this suspicion. While still in the hospital and when informed that
the Makati police were looking into this possibility, Leino flatly stated that Anders
168
Hultman was NOT the gunman. Leino is a reliable witness.
Appellant cannot also capitalize on the paraffin test showing he was negative of nitrates.
Scientific experts concur in the view that the paraffin test has ". . . proved extremely
unreliable in use. The only thing that it can definitely establish is the presence or
absence of nitrates or nitrites on the hand. It cannot be established from this test alone
that the source of the nitrates or nitrites was the discharge of a firearm. The person may
have handled one or more of a number of substances which give the same positive
reaction for nitrates or nitrites, such as explosives, fireworks, fertilizers,
pharmaceuticals, and leguminous plants such as peas, beans, and alfalfa. A person who
uses tobacco may also have nitrate or nitrite deposits on his hands since these
169
substances are present in the products of combustion of tobacco." In numerous
rulings, we have also recognized several factors which may bring about the absence of
gunpowder nitrates on the hands of a gunman, viz: when the assailant washes his hands
after firing the gun, wears gloves at the time of the shooting, or if the direction of a
170
strong wind is against the gunman at the time of firing. In the case at bar, NBI
Forensic Chemist, Leonora Vallado, testified and confirmed that excessive perspiration
or washing of hands with the use of warm water or vinegar may also remove
gunpowder nitrates on the skin. She likewise opined that the conduct of the paraffin
test after more than seventy-two (72) hours from the time of the shooting may not lead
to a reliable result for, by such time, the nitrates could have already been removed by
171
172
washing or perspiration. In the Report on the paraffin test conducted on
appellant, Forensic Chemist Elizabeth Ayonon noted that when appellant was tested for
the presence of nitrates, more than 72 hours has already lapsed from the time of the
alleged shooting.
III
In his third assigned error, appellant blames the press for his conviction as he contends
that the publicity given to his case impaired his right to an impartial trial. He postulates
there was pressure on the trial judge for high-ranking government officials avidly
followed the developments in the case (as no less than Vice-President Joseph Estrada
and then Department of Justice Secretary Franklin Drilon attended some of the hearings
and, President Corazon Aquino even visited victim Maureen Hultman while she was still
confined at the hospital). He submits that the trial judge failed to protect him from
prejudicial publicity and disruptive influences which attended the prosecution of the
cases. He claims there were placards displayed during the hearing of the cases,
spectators inside the courtroom clapped their hands and converted the proceedings

into a carnival. In another instance, he was allegedly given the "finger sign" by several
young people while he was leaving the courtroom on his way back to his cell.
We cannot sustain appellant's claim that he was denied the right to impartial trial due to
prejudicial publicity. It is true that the print and broadcast media gave the case at bar
pervasive publicity, just like all high profile and high stake criminal trials. Then and now,
we rule that the right of an accused to a fair trial is not incompatible to a free press. To
be sure, responsible reporting enhances an accused's right to a fair trial for, as well
pointed out, "a responsible press has always been regarded as the handmaiden of
effective judicial administration, especially in the criminal field . . . The press does not
simply publish information about trials but guards against the miscarriage of justice by
subjecting in the police, prosecutors, and judicial processes to extensive public scrutiny
173
and criticism."
Pervasive publicity is not per se prejudicial to the right of an accused to fair trial. The
mere fact that the trial of appellant was given a day-to-day, gavel-to-gavel coverage
does not by itself prove that the publicity so permeated the mind of the trial judge and
impaired his impartiality. For one, it is impossible to seal the minds of members of the
bench from pre-trial and other off-court publicity of sensational criminal cases. The
state of the art of our communication system brings news as they happen straight to our
breakfast tables and right to our bedrooms. These news form part of our everyday
menu of the facts and fictions of life. For another, our idea of a fair and impartial judge
is not that of a hermit who is out of touch with the world. We have not installed the jury
system whose members are overly protected from publicity lest they lose their
impartiality. Criticisms against the jury system are mounting and Mark Twain's wit and
wisdom put them all in better perspective when he observed: "When a gentleman of
high social standing, intelligence, and probity swears that testimony given under the
same oath will outweigh with him, street talk and newspaper reports based upon mere
hearsay, he is worth a hundred jurymen who will swear to their own ignorance and
stupidity . . . Why could not the jury law be so altered as to give men of brains and
174
honesty an equal chance with fools and miscreants?" Our judges are learned in the
law and trained to disregard off-court evidence and on-camera performances of parties
to a litigation. Their mere exposure to publications and publicity stunts does not per
se fatally infect their impartiality.
At best, appellant can only conjure possibility of prejudice on the part of the trial judge
due to the barrage of publicity that characterized the investigation and trial of the case.
175
In Martelino, et al. v. Alejandro, et a1., we rejected this standard of possibility of
prejudice and adopted the test of actual prejudice as we ruled that to warrant a finding
of prejudicial publicity, there must be allegation and proof that the judges have been
unduly influenced, not simply that they might be, by the barrage of publicity. In the case
at bar, the records do not show that the trial judge developed actual bias against
appellant as a consequence of the extensive media coverage of the pre-trial and trial of
his case. The totality of circumstances of the case does not prove that the trial judge
acquired a fixed opinion as a result of prejudicial publicity which is incapable of change

180

even by evidence presented during the trial. Appellant has the burden to prove this
actual bias and he has not discharged the burden.

the U.S. case of Sheppard v. Maxwell where it was held: "A

responsible press is always regarded as the handmaiden of effective
judicial administration especially in the criminal field. The press does
not simply publish information about trials but guards against the
miscarriage of justice by subjecting the police, the prosecutors and
judicial processes to extensive public scrutiny and criticism. What
transpires in the courtrooms public property." The trial judge then
ruled that the media should be given a chance to cover the
proceedings before the trial proper but, thereafter, he prohibited
them from taking pictures during the trial. They were allowed to
remain inside the courtroom but were ordered to desist from taking
181
live coverage of the proceedings.

We have minutely examined the transcripts of the proceedings and they do not disclose
that the trial judge allowed the proceedings to turn into a carnival. Nor did he consent
to or condone any manifestation of unruly or improper behavior or conduct inside the
courtroom during the trial of the case at bar. The transcripts reveal the following:
1. At the August 14, 1991 hearing, the defense counsel called the
attention of the court to the visible display of a placard inside the
courtroom. Acting on the manifestation, the trial judge immediately
directed that the placard be hidden. Only then did he order the start
176
of the arraignment of accused.

4. At the August 14, 1992 hearing, before the hearing began, the trial
judge gave the media two (2) minutes to take video coverage and no
182
more. Trial then ensued.

On the same hearing, the defense counsel asked for the exclusion of
the media after they had enough opportunity to take pictures. The
court granted defense's request, noting that the courtroom was also
177
too crowded.
2. During the testimony of Domingo Florece, an argument ensued
between the defense lawyer and the fiscal. When part of the audience
clapped their hands, the defense counsel invoked Rule 119, Section 13
of the Rules of Court and moved for the exclusion of the public.
Assistant Prosecutor Villa-Ignacio objected on the ground that the
public was not unruly. The trial judge noted that there were yet no
guidelines drafted by the Supreme Court regarding media coverage of
178
the trial proceedings. Collaborating defense counsel, Atty. Malvar,
complained that the outpouring of sympathy by spectators inside the
courtroom has turned the proceedings into a carnival. He also
manifested that he personally saw that when accused was being
brought back to his cell from the courtroom, a group of young people
were pointing dirty fingers at accused in full view of policemen.
Forthwith, the trial judge declared that he could not be dissuaded by
public sentiments. He noted that the clapping of hands by the public
was just a reaction at the spur of the moment. He then admonished
179
the audience not to repeat it.
3. At the hearing of July 14, 1992, the parties again argued on the
coverage of the trial by the press. The defense alleged that the media
coverage will constitute mistrial and deny accused's constitutional
right to due process. It invoked the provision in the Rules of Court
which allows the accused to exclude everybody in the courtroom,
except the organic personnel. The prosecutor, however, argued that
exclusion of the public can be ordered only in prosecution of private
offenses and does not apply to murder cases. He added that the public
is entitled to observe and witness trial of public offenses. He quoted

5. At the September 8, 1992 hearing, the trial judge again gave the
media two (2) minutes to take pictures before the trial proper.
Afterwards, the reporters were duly admonished to remain silent, to
183
quietly observe the proceedings and just take down notes.
6 On September 10, 1992 before the start of the afternoon session,
the judge admonished the media people present in the courtroom to
184
stop taking pictures.
Parenthetically, appellant should be the last person to complain against the press for
prejudicial coverage of his trial. The records reveal he presented in court no less than
seven (7) newspaper reporters and relied heavily on selected portions of their reports
for his defense. The defense's documentary evidence consists mostly of newspaper
clippings relative to the investigation of the case at bar and which appeared to cast
doubt on his guilt. The press cannot be fair and unfair to appellant at the same time.
Finally, it would not be amiss to stress that on May 29, 1992, the trial judge voluntarily
inhibited himself from further hearing the case at bar to assuage appellant's suspicion of
185
bias and partiality. However, upon elevation of the trial judge's voluntary Order of
Inhibition to this Court, we directed the trial judge to proceed with the trial to speed up
186
the administration of justice. We found nothing in the conduct of the proceedings to
stir any suspicion of partiality against the trial judge.
IV.

In his fourth assigned error, appellant claims that treachery was not
present in the killing of Hultman and Chapman, and the wounding of Leino
for it was not shown that the gunman consciously and deliberately
adopted particular means, methods and forms in the execution of the
crime. Appellant asserts that mere suddenness of attack does not prove
treachery.

The three (3) Informations charged appellant with having committed the crimes at bar
with treachery and evident premeditation. Evident premeditation was correctly ruled
out by the trial court for, admittedly, the shooting incident was merely a casual
encounter or a chance meeting on the street since the victims were unknown to
appellant and vice-versa It, however, appreciated the presence of the qualifying
circumstance of treachery.
We hold that the prosecution failed to prove treachery in the killing of Chapman.
Prosecution witness Leino established the sequence of events leading to the shooting.
He testified that for no apparent reason, appellant suddenly alighted from his car and
accosted him and Maureen Hultman who were then walking along the sidewalk.
Appellant questioned who they were and demanded for an I.D. After Leino handed him
his I.D., Chapman appeared from behind Leino and asked what was going on. Chapman
then stepped down on the sidewalk and inquired from appellant what was wrong. There
and then, appellant pushed Chapman, pulled a gun from inside his shirt, and shot him.
The gun attack was unexpected. "Why did you shoot me?" was all Chapman could utter.
Concededly, the shooting of Chapman was carried out swiftly and left him with no
chance to defend himself. Even then, there is no evidence on record to prove that
appellant consciously and deliberately adopted his mode of attack to insure the
accomplishment of his criminal design without risk to himself. It appears to us that
appellant acted on the spur of the moment. Their meeting was by chance. They were
strangers to each other. The time between the initial encounter and the shooting was
short and unbroken. The shooting of Chapman was thus the result of a rash and
impetuous impulse on the part of appellant rather than a deliberate act of will. We have
consistently ruled that mere suddenness of the attack on the victim would not, by itself,
187
constitute treachery. Hence, absent any qualifying circumstance, appellant should
only be held liable for Homicide for the shooting and killing of Chapman.
As to the wounding of Jussi Leino and the killing of Maureen Hultman, we hold that
treachery clearly attended the commission of the crimes. The evidence shows that after
shooting Chapman in cold blood, appellant ordered Leino to sit on the pavement.
Maureen became hysterical and wandered to the side of appellant's car. When
appellant went after her, Maureen moved around his car and tried to put some distance
between them. After a minute or two, appellant got to Maureen and ordered her to sit
beside Leino on the pavement. While seated, unarmed and begging for mercy, the two
were gunned down by appellant. Clearly, appellant purposely placed his two victims in a
completely defenseless position before shooting them. There was an appreciable lapse
of time between the killing of Chapman and the shooting of Leino and Hultman a
period which appellant used to prepare for a mode of attack which ensured the
execution of the crime without risk to himself. Treachery was thus correctly appreciated
by the trial court against appellant insofar as the killing of Hultman and the wounding of
Leino are concerned.
V and VI. We come now to the civil liability imposed against appellant.
Appellant posits that the awards of moral and exemplary damages and for loss

of earning capacity of Maureen Hultman, Roland Chapman and Jussi Leino

were exorbitant. He likewise claims that the trial court's award of attorney's
fees was excessive.
In its Decision, the trial court awarded to Jussi Leino end the heirs of victims Hultman
and Chapman the following damages:
1. For the murder of Roland John Chapman, appellant was sentenced
to pay the heirs of the deceased the sum of Fifty Thousand Pesos
(P50,000.00) as indemnity for death and the sum of Five Hundred
Thousand Pesos (P500,000.00) as moderate or temperate and
exemplary damages.
2. For the murder of Maureen Navarro Hultman, appellant was
sentenced to pay the heirs of the deceased the sum of: Fifty Thousand
Pesos (P50,000.00) as indemnity for death; Two Million Three
Hundred Fifty Thousand Four Hundred Sixty-One Pesos and EightyThree
Centavos
(P2,350,461.83) as actual damages; Thirteen Million Pesos
(P13,000,000.00) for loss of earning capacity of deceased; and, One
Million Pesos as moral, moderate and exemplary damages.
3. For the shooting of Jussi Olavi Leino, appellant was sentenced to
pay: Thirty thousand pesos (P30,000.00) as indemnity for the injury;
One Hundred Eighteen Thousand Three-Hundred Sixty Nine Pesos and
Eighty-Four Centavos (P118,369.84) and the sum equivalent in
Philippine pesos of U.S.$55,600.00, both as actual damages; an
amount equivalent in Philippine pesos of U.S.$40,000.00, for loss of
earning capacity of Jussi Leino; and, One Million Pesos (P1,000,000.00)
as moral, moderate and exemplary damages.
4. In all three cases, appellant was also ordered to pay each of the
offended parties the sum of One Million Pesos (or a total of three
million pesos) for attorney's fees and expenses of litigation.
5. Costs of litigation.

188

189

The early case of Heirs of Raymundo Castro v. Bustos discussed in detail the matter of
damages recoverable in case of death arising from a felony, thus:
When the commission of a crime results in death, the civil obligations
arising therefrom are governed by penal laws, ". . . subject to the
provisions of Art. 2177, and of the pertinent provisions of Chapter 2,
Preliminary Title on Human Relations, and of Title XVIII of this Book
(Book IV) regulating damages." (Art. 1161, Civil Code)

Thus, "every person criminally liable for a felony is also civilly liable."
(Art. 100, Revised Penal Code). This civil liability, in case the felony
involves death, includes indemnification for consequential damages
(Art. 104, id.) and said consequential damages in turn include ". . .
those suffered by his family or by a third person by reason of the
crime." (Art. 107, id.) Since these provisions are subject, however, as
above indicated, to certain provisions of the Civil Code, (w)e will now
turn to said provisions.
The general rule in the Civil Code is that:
In crimes and quasi-delicts, the defendant shall be
liable for all damages which are the natural and
probable consequences of the act or omission
complained of. It is not necessary that such damages
have been foreseen or could have reasonably
foreseen by the defendant. (Art. 2202)
When, however, the crime committed involves death, there is Art.
2206 which provides thus:
The amount of damages for death caused by a crime
or quasi-delict shall be at least three thousand pesos
even though there may have been mitigating
circumstances. In addition:
(1) The defendant shall be liable for the loss of the
earning capacity of the deceased, and the indemnity
shall be paid to the heirs of the latter; such
indemnity shall in every case be assessed and
awarded by the court, unless the deceased on
account of permanent physical disability not caused
by the defendant, had no earning capacity at the
time of his death;
(2) If the deceased was obliged to give support
according to the provisions of article 291, the
recipient who is not an heir called to the
descendant's inheritance by law of testate or
intestate succession, may demand support from the
person causing the death, for a period not exceeding
five years, the exact duration to be fixed by the
court;
(3) The spouse, legitimate or illegitimate
descendants and ascendants of the deceased may

demand moral damages for mental anguish by

reason of the death of the deceased.
The amount of P3,000 referred to in the above article has already
been increased by this Court first, to P6,000.00 in People v. Amansec,
80 Phil. 426, and lately to P12,000.00 in the case of People v.Pantoja,
190
G.R. No. L-18793, promulgated October 11, 1968 , and it must be
stressed that this amount, as well as the amount of moral damages,
may be adjudicated even without proof of pecuniary loss, the
assessment of the moral damages being "left to the discretion of the
court, according to the circumstances of each case." (Art. 2216)
Exemplary damages may also be imposed as a part of this civil liability
when the crime has been committed with one or more aggravating
circumstances, such damages being "separate and distinct from fines
and shall be paid to the offended party." (Art. 2230). Exemplary
damages cannot however be recovered as a matter of right; the court
will decide whether or not they should be given. (Art. 2233)
In any event, save as expressly provided in connection with the
indemnity for the sole fact of death (1st par., Art. 2206) and is cases
wherein exemplary damages are awarded precisely because of the
attendance of aggravating circumstances, (Art. 2230) ". . . damages to
be adjudicated may be respectively increased or lessened according to
the aggravating or mitigating circumstances," (Art. 2204) "but the
party suffering the loss or injury must exercise the diligence of a good
father of a family to minimize the damages resulting from the act or
omission in question." (Art. 2203) "Interest as a part of the damages,
may, in a proper case, be adjudicated in the discretion of the Court."
(Art. 2211) As to attorneys' fees and expenses of litigation, the same
may be recovered only when exemplary damages have been granted
(Art. 2208, par. 1) or . . . when there is a separate civil action.
Stated differently, when death occurs as a result of a crime, the heirs
of the deceased are entitled to the following items of damages:
1. As indemnity for the death of the victim of the
offense P12,000.00 (now P50,000.00), without
the need of any evidence or proof of damages, and
even though there may have been mitigating
circumstances attending the commission of the
offense.
2. As indemnity for loss of earning capacity of the
deceased an amount to be fixed by the court
according to the circumstances of the deceased

related to his actual income at the time of death and

his probable life expectancy, the said indemnity to
be assessed and awarded by the court as a matter of
duty, unless the deceased had no earning capacity at
said time on account of permanent disability not
caused by the accused. If the deceased was obliged
to give support, under Art. 291, Civil Code, the
recipient who is not an heir, may demand support
from the accused for not more than five years, the
exact duration to be fixed by the court.
3. As moral damages for mental anguish, an
amount to be fixed by the court. This may be
recovered even by the illegitimate descendants and
ascendants of the deceased.
4. As exemplary damages, when the crime is
attended by one or more aggravating circumstances,
an amount to be fixed in the discretion of the
court, the same to be considered separate from
fines.
5. As attorney's fees and expenses of litigation,
the actual amount thereof, (but only when a
separate civil action to recover civil liability has been
filed or when exemplary damages are awarded).
6. Interests in the proper cases.
7. It must be emphasized that the indemnities for
loss of earning capacity of the deceased and for
moral damages are recoverable separately from and
in addition to the fixed sum of P12,000.00 (now
P50,000.00) corresponding to the indemnity for the
sole fact of death, and that these damages may,
however, be respectively increased or lessened
according to the mitigating or aggravating
circumstances, except items 1 and 4 above, for
191
obvious reasons.
We shall first review the damages awarded to the heirs of ROLAND JOHN CHAPMAN in
light of the law and the case law.
Appellant claims that the award of Five Hundred Thousand (P500,000.00) pesos as
moderate or temperate and exemplary damages to the heirs of Roland John Chapman
was baseless.

We start with the observation that the trial court should not have lumped together the
awards for moderate or temperate and exemplary damages at Five Hundred Thousand
Pesos (P500,000.00), without specifying the particular amount which corresponds to
each, as they are of a different kind. We shall, however, consider their propriety and
reasonableness.
The amount of Five Hundred Thousand (P500,000.00) pesos cannot be given as
temperate or moderate damages for the records do not show any basis for sustaining
the award. Nor can it be given as exemplary damages. The killing of Chapman was not
attended by either evident premeditation or treachery. Be that as it may, the award can
be considered as one for moral damages under Article 2206 (3) of the New Civil
192
Code. It states:
Art. 2206. The amount of damages for death caused by a crime . . .
shall be at least (fifty thousand pesos, under current jurisprudence) . . .
In addition:
xxx xxx xxx
(3) The spouse, legitimate or illegitimate descendants and ascendants
of the deceased may demand moral damages for mental anguish by
reason of the death of the deceased.
Moreover, considering the shocking and senseless aggression committed by appellant,
we increase the amount of moral damages to One Million (P1,000,000.00) pesos for the
death of Chapman.
We next rule on the legality of damages awarded to the heirs of MAUREEN NAVARRO
HULTMAN.
Appellant argues that the damages for the death of Maureen should be awarded to her
mother, Vivian Hultman, and her natural father. He contends that under Article 352 of
the New Civil Code, Anders Hultman as adoptive father of Maureen, is not entitled to
said award. Only the parents by nature of Maureen should inherit from her.
We reject the argument. Under the Family Code which was already in effect at the time
of Maureen's death, Anders Hultman, as adoptive father, is entitled to the award made
by the trial court. Article 190 of the Family Code provides:
xxx xxx xxx
(2) When the parents, legitimate or illegitimate, or the legitimate
descendants of the adopted concur with the adopters, they shall
divide the entire estate, one-half to be inherited by the parents or
ascendants and the other half, by the adopters;

xxx xxx xxx

(5) When only the adopters survive, they shall inherit the entire
estate;
It does not appear on the records whether Maureen was survived by her natural father.
During the trial of these cases, only Vivian and Anders Hultman testified on their claim
of damages. Hence, we find that the award of damages in their favor has sufficient
factual and legal basis.
Appellant also urges that the award to the heirs of Maureen Hultman of One Million
Pesos (P1,000,000.00) as moral and exemplary damages is unjustified or, at the very
least, exorbitant and should be reduced.
We hold that the award of One Million (P1,000,000.00) pesos is amply justified by the
circumstances. The records reveal that Maureen recovered between life and death for
ninety-seven (97) days. Her family experienced the peaks and valleys of unspeakable
suffering. During that time, she underwent brain surgery three (3) times. Her condition
was never stable and remained critical. It was always touch and go with death. She
could not be left alone at the hospital. Her parents had to be perpetually by her side at
least six (6) to seven (7) hours daily. After the shooting, their siblings had to be sent back
to Sweden for their safety. Left unattended, her family's business took a downspin.
Soon, her family's assets were depleted, then wiped out. A total of twenty-three (23)
doctors attended to her and their bills ballooned without abatement. They were forced
to rely on the goodness of the gracious. Her family started receiving contributions from
193
other people to defray the medical expenses and hospital bills. Maureen never
regained consciousness until her demise on October 17, 1991, at the tender age of
seventeen. Under the foregoing circumstances, we thus find the award of One Million
Pesos (P1,000,000.00) as moral damages to be reasonable.
Moreover, we find that the grant of exemplary damages is called for by the
194
circumstances of the case. Under Article 2229 of the Civil Code, in addition to the
award of moral damages, exemplary or corrective damages may be adjudged in order to
deter the commission of similar acts in the future. The award for exemplary damages is
designed to permit the courts to mould behavior that has socially deleterious
consequences. Its imposition is required by public policy to suppress the wanton acts of
an offender.
In the case at bar, appellant's unprovoked aggression snuffed the life of Maureen
Hultman, a girl in the prime of her youth. Hultman and her companions were gunned
down by appellant in cold-blood, for no apparent reason. Appellant's vicious criminality
led to the suffering of his victims and their families. Considering our soaring crime rate,
the imposition of exemplary damages against appellant to deter others from taking the
lives of people without any sense of sin is proper. Moreover, since the killing of Hultman
195
was attended by treachery and pursuant to Article 2229 of the new Civil Code, we

impose an award of Two Million (P2,000,000.00) pesos as exemplary damages against

appellant for the death of Maureen Hultman.
We now review the award of One Million Pesos (P1,000,000.00) as moral, moderate and
exemplary damages to victim JUSSI LEINO.
From the record, it is incontrovertible that Leino likewise suffered extensive injuries as a
result of the shooting. His upper jaw bone was shattered. He would need a bone
transplant operation to restore it. His tongue was also injured. He partially lost his sense
of taste for his taste buds were also affected. When he was discharged from the
hospital, he had difficulty in speaking and had to be fed through a tube running down
his nose. He lost eight of his teeth. The roots of his teeth were cut off and the raw
nerves were exposed. But all these speak only of his physical injuries and suffering.
More devastating was the emotional strain that distressed Leino. His parents were in
Europe for a vacation at the time of the shooting. Only a neighbor attended to him at
the hospital. It took two (2) days for his father to come and comfort by his bedside.
Leino had trouble sleeping in peace at night. The traumatic event woke him up in the
middle of the night. Black memories of the incident kept coming back to
196
mind. Understably, the ill-effects of the incident spilled over his family. Seppo Leino,
Jussi's father, was tortured by thoughts of insecurity. He had to relocate his entire family
197
to Europe where he felt they would be safe. Under the foregoing circumstances, we
find that an award of One Million (P1,000,000.00) pesos to Jussi Leino as indemnity for
moral damages is justified and reasonable.
As in the case of Hultman, since the shooting of Leino was committed with treachery
198
and pursuant to Article 2229 of the New Civil Code, appellant is additionally adjudged
liable for the payment to Leino of Two Million (P2,000,000.00) pesos as exemplary
damages.
We come now to the trial court's monetary award to compensate the LOSS OF EARNING
CAPACITY OF VICTIMS JUSSI LEINO and MAUREEN HULTMAN.
To be compensated for loss of earning capacity, it is not necessary that the victim, at the
time of injury or death, is gainfully employed. Compensation of this nature is awarded
not for loss of earnings but for loss of capacity to earn money. In Cariaga v. Laguna
199
Tayabas Bus Company, we awarded to the heirs of Cariaga a sum representing loss of
his earning capacity although he was still a medical student at the time of injury.
However, the award was not without basis for Cariaga was then a fourth year medical
student at a reputable school; his scholastic record, which was presented at the trial,
justified an assumption that he would have been able to finish his course and pass the
board in due time; and a doctor, presented as witness for the appellee, testified as to
the amount of income Cariaga would have earned had he finished his medical studies.
In the case at bar, the trial court awarded the amount, equivalent in Philippine pesos, of
Forty capacity of JUSSI LEINO. We agree with appellant that this amount is highly
speculative and should be denied considering that Leino had only earned a high school

degree at the International School, Manila, in 1989. He went back to Finland to serve
the military and has just arrived in Manila in February 1991 to pursue his ambition to
become a pilot. At the time of the shooting on July 13, 1991, he has just enrolled at the
Manila Aero Club to become a professional pilot. He was thus only on his first year, first
semester, in said school and was practically, a mere high school graduate. Under the
foregoing circumstances, we find the records wanting with substantial evidence to
justify a reasonable assumption that Leino would have been able to finish his studies at
the Manila Aero Club and ultimately become a professional pilot.
We now pass upon the propriety of the award of Thirteen Million Pesos
(P13,000,000.00) for loss of earning capacity of deceased MAUREEN HULTMAN. We find
that the award is not supported by the records.
In adjudging an award for Maureen's loss of earning capacity, the trial court incorrectly
used the monthly salary of a secretary working in Sweden, computed at two thousand
dollars ($2,000.00) a month, as per the estimate given by Anders Hultman. Nowhere in
the records does it appear that, at the time of her death, Maureen had acquired the
skills needed for a secretarial job or that she intended to take a secretarial course in
preparation for such job in Sweden. Anders Hultman himself testified that there was
uncertainty as to Maureen's future career path, thus:
ATTY. VINLUAN:
Q Mr. Witness, if Maureen would not been (sic) shot
and she continued her studies, what professional
career would she (sic) like to pursue considering her
interests and inclinations?
WITNESS:
A That is very difficult to say. She has just turned 17
and our projection is that, certainly she would have
been an artist in the creative side. She would have
become an actress or a movie producer or probably
she would have been a college graduate.
ATTY. VINLUAN:
Q But if you would just say based on the salary of a
secretary in Sweden, how much would she have
much earned?
A. Not less than Two Thousand Dollars a month.

200

Clearly, there is no factual basis for the award of thirteen million (P13,000,000.00) pesos
to the heirs of Maureen far loss of earning capacity as a probable secretary in Sweden.
In any event, what was proved on record is that after graduating from high school,
Maureen took up a short personality development course at the John Roberts Powers.
Maureen was employed at the John Roberts Powers at the time of her death. It was her
first job. In fact, she had just received her first salary, for which reason she went out
with her friends to celebrate on that fateful day. However, neither the nature of her
work nor her salary in said company was disclosed at the trial. Thus, to compute the
award for Maureen's loss of earning capacity, we are constrained to use the minimum
wage prevailing as of the date of her death (October 17, 1991),i.e., one hundred
201
eighteen pesos (P118.00). Allowing for reasonable and necessary expenses in the
amount of P19,800.00, her net income per annum would amount to
202
203
P26,859.17. Hence, using the formula repeatedly adopted by this Court: (2/3 x [80
age of victim at time of death]) x a reasonable portion of the net income which would
204
have been received by the heirs as support, we fix the award for loss of earning as
capacity of deceased Maureen Hultman at Five Hundred Sixty-Four Thousand Forty-Two
Pesos and Fifty-Seven Centavos (P564,042.57).
It also bears emphasis that in the computation of the award for loss of earning capacity
of the deceased, the life expectancy of the deceased's heirs is not factored in. The rule is
well-settled that the award of damages for death is computed on the basis of the life
205
expectancy of the deceased, and not the beneficiary.
Lastly, appellant seeks a reduction of the award of attorney's fees in the amount of
Three Million Pesos (P3,000,000.00), claiming that the same is exorbitant.
We disagree. The three (3) private complainants were represented by the ACCRA law
firm, with Atty. Rogelio Vinluan as lead counsel. They agreed to pay the amount of One
Million (P1,000,000.00) pesos each as attorney's fees and for litigation expenses. The
three criminal cases were consolidated. A continuous trial was conducted, with some
hearings having both morning and afternoon sessions. The trial lasted for almost one
and a half years. More than forty (40) witnesses testified during the hearings. Several
pleadings were prepared and filed. A total of sixty-eight (68) documentary exhibits were
presented by the prosecution. Incidents related to the trial of the cases came up to this
206
Court for review at least twice during the pendency of the trial. Given these
circumstances and the evident effort exerted by the private prosecutor throughout the
trial, the trial court's award of a total of Three Million (P3,000,000.00) pesos as
attorney's fees and litigation expenses appears just and reasonable.
VI.

In his last assigned error, appellant urges that the hearings conducted on
the cases, where no less than forty-one (41) witnesses were presented by
207
the parties, were merely hearings on the petition for bail concerning the
murder charge for the killing of Roland Chapman, and not a trial on the
merits of all three (3) cases. Appellant insists that after the termination of
the hearing, he still had the right to adduce evidence at the trial proper. He

claims he was denied due process when the trial court considered all the
cases submitted for decision after the defense waived its right to present
its surrebuttal evidence.
Appellant's position is untenable. This issue was resolved at the very first hearing of the
cases on August 9, 1991. The incident then pending was appellant's petition for bail for
the murder of Chapman. It will be remembered that, initially, there was only one
murder charge against appellant since Maureen Hultman succumbed to death during
the course of the proceedings on October 17, 1991.
Thus, at the initial hearing on August 9, 1991, the incident for resolution was appellant's
petition for bail. The prosecution sought to present the surviving victim, Jussi Leino, to
testify on all three (3) charges to obviate delay and inconvenience since all three (3)
charges involved one continuing incident. Appellant, through counsel, objected to the
testimony of Leino insofar as the two (2) frustrated murder charges (with respect to the
wounding of Leino and Hultman) were concerned. He argued that since the pending
incident was the petition for bail with respect to the killing of Chapman, any testimony
relative to the two (2) other charges in which bail were recommended was irrelevant.
After arguments, the defense suggested that if the prosecution would present Leino to
testify on all three (3) charges, it should wait until after accused's arraingment on
208
August 14, 1991. The prosecution agreed on the condition that there shall be trial on
the merits and, at the same time, hearing on the petition for bail. Defense counsel
209
agreed.
As agreed upon, accused was arraigned and the prosecution presented Jussi Leino as its
210
first witness to testify on all three (3) cases. No objection was made by the defense.
Subsequent proceedings likewise disprove appellant's insistence that the hearings
conducted by the trial court were limited to the petition for bail, viz:
1. The prosecution presented all their witnesses and documentary
evidence relative to the shooting incident, including evidence in
support of the claim for damages. These witnesses were extensively
cross-examined by the defense counsels. The defense never objected
that evidence on damages would be unnecessary if its intention was
really to limit presentation of evidence to appellant's petition for bail.
2. After the prosecution and the defense rested their cases, the trial
211
court issued an Order directing the parties to submit their
Memorandum, after which "the main case as well as the petition for
bail are respectively submitted for Decision and Resolution." After
receipt of this Order, the defense counsel filed two (2) motions for
extension of time to file the defense Memorandum. In both Motions,
the defense did not object to the trial court's Order submitting for
decision the main case and the petition for bail. Neither did it move

for a reconsideration of this Order and notify the court that it still had
witnesses to present.
3. In compliance with said Order, appellant's counsel, Atty. Rodolfo
Jimenez, filed a Memorandum and Supplemental Memorandum
praying for accused's acquittal. This is inconsistent with the defense's
position that the hearing conducted was only on the petition for bail.
If the defense insist that what was submitted for decision was only his
petition for bail, he would have only prayed that he be granted bail.
4. Upon receipt of the notice of promulgation of judgment from the
trial court, the defense did not interpose any objection to the
intended promulgation. In fact, the defense attended the
promulgation of the Decision and manifested that they were ready
therefor.
All these clearly show that the merits of the cases and the petition for bail were heard
simultaneously and appellant acquiesced thereto. Moreover, appellant's right to present
additional evidence was not abridged by the trial court. On the contrary, the records
disclose that the trial court afforded the defense fair opportunity to adduce its evidence.
It took the defense almost one and a half years to submit its evidence. The defense
presented more than twenty (20) witnesses and several documentary evidence. It was
only after the trial court rendered a decision against appellant that he filed a motion for
new
212
trial, through his new counsel, Atty. Gatmaytan, Jr. For the first time, he alleged that
the joint decision of the cases, both on the merits and on the petition for bail, was
irregular for he was not given a chance to present further evidence to corroborate his
213
alibi. We note that in his motion for new trial, appellant did not even identify his
alleged additional witnesses and the substance of their testimonies. Nor was it shown
that he could not have produced these evidence at the trial with reasonable diligence.
Appellant's motion was a patent ploy to delay the decision on his cases. His motion was
properly denied by the trial court.
IN VIEW WHEREOF, we hereby AFFIRM WITH MODIFICATIONS the Decision of the trial
court, dated December 22, 1992, thus:
(1) In Criminal Case No. 91-4605, finding accused Claudio J.
Teehankee, Jr., guilty beyond reasonable doubt of the crime of
Homicide for the shooting of Roland John Chapman, and sentencing
said accused to suffer an indeterminate penalty of imprisonment of
eight (8) years and one (1) day of prision mayor as minimum to
fourteen (14) years, eight (8) months and one (1) day ofreclusion
temporal as maximum, and to pay the heirs of the said deceased the
following amounts: Fifty Thousand (P50,000.00) pesos as indemnity
for the victim's death; and, One Million (P1,000,000.00) pesos as
moral damages.

(2) In Criminal Case No. 91-4606, finding accused Claudio J.

Teehankee, Jr., guilty beyond reasonable doubt of the crime of
Murder, qualified by treachery, for the shooting of Maureen Navarro
Hultman, and sentencing him to suffer imprisonment of reclusion
perpetua, and to pay the heirs of the said deceased the following
amounts: Fifty Thousand (P50,000.00) pesos as indemnity for her
death; Two Million Three Hundred Fifty Thousand Four Hundred SixtyOne Pesos and Eighty-Three Centavos (P2,350,461.83) as actual
damages; Five Hundred Sixty-Four Thousand Fourty-Two Pesos and
Fifty-Seven Centavos (P564,042.57) for loss of earning capacity of said
deceased; One Million Pesos (P1,000,000.00) as moral damages; and
Two Million (P2,000,000.00) pesos as exemplary damages.
(3) In Criminal Case No. 91-4807, finding accused Claudio J.
Teehankee, Jr., guilty beyond reasonable doubt of the crime of
Frustrated Murder, qualified by treachery, for the shooting of Jussi
Olavi Leino, and sentencing him to suffer the indeterminate penalty of
eight (8) years of prision mayor as minimum, to fourteen (14) years
and eight (8) months of reclusion temporal as maximum, and to pay
the said offended party the following amounts: (P30,000.00) pesos as
Thirty Thousand (P30,000.00) pesos as indemnity for his injuries; One
Hundred Eighteen Thousand Three Hundred Sixty-Nine pesos and
Eighty-Four Centavos (P118,369.84) and equivalent in Philippine Pesos
of U.S.$55,600.00, both as actual damages; One Million
(P1,000,000.00) pesos as moral damages; and, Two Million
(P2,000,000.00) pesos as exemplary damages.
(4) In all three cases, ordering said accused to pay each of the three (3)
offended parties the sum of One Million Pesos (P1,000,000.00; or a
total of Three Million [P3,000,000.00] pesos] for attorney's fees and
expenses of litigation; and
(5) To pay the costs in all three (3) cases.
SO ORDERED.
Regalado, Mendoza and Francisco, JJ., concur.
Narvasa, C.J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-46496

February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and

NATIONAL WORKERS BROTHERHOOD, petitioners,
vs.
THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION,
INC., respondents.
Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of
Industrial Relations.
Antonio D. Paguia for National Labor Unon.
Claro M. Recto for petitioner "Ang Tibay".
Jose M. Casal for National Workers' Brotherhood.

The respondent National Labor Union, Inc., on the other hand, prays for the vacation of
the judgement rendered by the majority of this Court and the remanding of the case to
the Court of Industrial Relations for a new trial, and avers:
1. That Toribio Teodoro's claim that on September 26, 1938, there was
shortage of leather soles in ANG TIBAY making it necessary for him to
temporarily lay off the members of the National Labor Union Inc., is entirely
false and unsupported by the records of the Bureau of Customs and the Books
of Accounts of native dealers in leather.
2. That the supposed lack of leather materials claimed by Toribio Teodoro was
but a scheme to systematically prevent the forfeiture of this bond despite the
breach of his CONTRACT with the Philippine Army.
3. That Toribio Teodoro's letter to the Philippine Army dated September 29,
1938, (re supposed delay of leather soles from the States) was but a scheme to
systematically prevent the forfeiture of this bond despite the breach of his
CONTRACT with the Philippine Army.

LAUREL, J.:

4. That the National Worker's Brotherhood of ANG TIBAY is a company or

employer union dominated by Toribio Teodoro, the existence and functions of
which are illegal. (281 U.S., 548, petitioner's printed memorandum, p. 25.)

The Solicitor-General in behalf of the respondent Court of Industrial Relations in the

above-entitled case has filed a motion for reconsideration and moves that, for the
reasons stated in his motion, we reconsider the following legal conclusions of the
majority opinion of this Court:

5. That in the exercise by the laborers of their rights to collective bargaining,

majority rule and elective representation are highly essential and
indispensable. (Sections 2 and 5, Commonwealth Act No. 213.)

1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de
duracion o que no sea para una determinada, termina o bien por voluntad de
cualquiera de las partes o cada vez que ilega el plazo fijado para el pago de los
salarios segun costumbre en la localidad o cunado se termine la obra;

6. That the century provisions of the Civil Code which had been (the) principal
source of dissensions and continuous civil war in Spain cannot and should not
be made applicable in interpreting and applying the salutary provisions of a
modern labor legislation of American origin where the industrial peace has
always been the rule.

2. Que los obreros de una empresa fabril, que han celebrado contrato, ya
individual ya colectivamente, con ell, sin tiempo fijo, y que se han visto
obligados a cesar en sus tarbajos por haberse declarando paro forzoso en la
fabrica en la cual tarbajan, dejan de ser empleados u obreros de la misma;

7. That the employer Toribio Teodoro was guilty of unfair labor practice for
discriminating against the National Labor Union, Inc., and unjustly favoring the
National Workers' Brotherhood.

3. Que un patrono o sociedad que ha celebrado un contrato colectivo de

trabajo con sus osbreros sin tiempo fijo de duracion y sin ser para una obra
determiminada y que se niega a readmitir a dichos obreros que cesaron como
consecuencia de un paro forzoso, no es culpable de practica injusta in incurre
en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth, aunque
su negativa a readmitir se deba a que dichos obreros pertenecen a un
determinado organismo obrero, puesto que tales ya han dejado deser
empleados suyos por terminacion del contrato en virtud del paro.

8. That the exhibits hereto attached are so inaccessible to the respondents that
even with the exercise of due diligence they could not be expected to have
obtained them and offered as evidence in the Court of Industrial Relations.
9. That the attached documents and exhibits are of such far-reaching
importance and effect that their admission would necessarily mean the
modification and reversal of the judgment rendered herein.

The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration
of the respondent National Labor Union, Inc.
In view of the conclusion reached by us and to be herein after stead with reference to
the motion for a new trial of the respondent National Labor Union, Inc., we are of the
opinion that it is not necessary to pass upon the motion for reconsideration of the
Solicitor-General. We shall proceed to dispose of the motion for new trial of the
respondent labor union. Before doing this, however, we deem it necessary, in the
interest of orderly procedure in cases of this nature, in interest of orderly procedure in
cases of this nature, to make several observations regarding the nature of the powers of
the Court of Industrial Relations and emphasize certain guiding principles which should
be observed in the trial of cases brought before it. We have re-examined the entire
record of the proceedings had before the Court of Industrial Relations in this case, and
we have found no substantial evidence that the exclusion of the 89 laborers here was
due to their union affiliation or activity. The whole transcript taken contains what
transpired during the hearing and is more of a record of contradictory and conflicting
statements of opposing counsel, with sporadic conclusion drawn to suit their own views.
It is evident that these statements and expressions of views of counsel have no
evidentiary value.
The Court of Industrial Relations is a special court whose functions are specifically stated
in the law of its creation (Commonwealth Act No. 103). It is more an administrative than
a part of the integrated judicial system of the nation. It is not intended to be a mere
receptive organ of the Government. Unlike a court of justice which is essentially passive,
acting only when its jurisdiction is invoked and deciding only cases that are presented to
it by the parties litigant, the function of the Court of Industrial Relations, as will appear
from perusal of its organic law, is more active, affirmative and dynamic. It not only
exercises judicial or quasi-judicial functions in the determination of disputes between
employers and employees but its functions in the determination of disputes between
employers and employees but its functions are far more comprehensive and expensive.
It has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle
any question, matter controversy or dispute arising between, and/or affecting
employers and employees or laborers, and regulate the relations between them, subject
to, and in accordance with, the provisions of Commonwealth Act No. 103 (section 1). It
shall take cognizance or purposes of prevention, arbitration, decision and settlement, of
any industrial or agricultural dispute causing or likely to cause a strike or lockout, arising
from differences as regards wages, shares or compensation, hours of labor or conditions
of tenancy or employment, between landlords and tenants or farm-laborers, provided
that the number of employees, laborers or tenants of farm-laborers involved exceeds
thirty, and such industrial or agricultural dispute is submitted to the Court by the
Secretary of Labor or by any or both of the parties to the controversy and certified by
the Secretary of labor as existing and proper to be by the Secretary of Labor as existing
and proper to be dealth with by the Court for the sake of public interest. (Section 4,ibid.)
It shall, before hearing the dispute and in the course of such hearing, endeavor to
reconcile the parties and induce them to settle the dispute by amicable agreement.
(Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall

investigate and study all industries established in a designated locality, with a view to
determinating the necessity and fairness of fixing and adopting for such industry or
locality a minimum wage or share of laborers or tenants, or a maximum "canon" or
rental to be paid by the "inquilinos" or tenants or less to landowners. (Section 5, ibid.) In
fine, it may appeal to voluntary arbitration in the settlement of industrial disputes; may
employ mediation or conciliation for that purpose, or recur to the more effective system
of official investigation and compulsory arbitration in order to determine specific
controversies between labor and capital industry and in agriculture. There is in reality
here a mingling of executive and judicial functions, which is a departure from the rigid
doctrine of the separation of governmental powers.
In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673,
promulgated September 13, 1939, we had occasion to joint out that the Court of
Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had
occasion to point out that the Court of Industrial Relations is not narrowly constrained
by technical rules of procedure, and the Act requires it to "act according to justice and
equity and substantial merits of the case, without regard to technicalities or legal forms
and shall not be bound by any technicalities or legal forms and shall not be bound by
any technical rules of legal evidence but may inform its mind in such manner as it may
deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be
restricted to the specific relief claimed or demands made by the parties to the industrial
or agricultural dispute, but may include in the award, order or decision any matter or
determination which may be deemed necessary or expedient for the purpose of settling
the dispute or of preventing further industrial or agricultural disputes. (section 13, ibid.)
And in the light of this legislative policy, appeals to this Court have been especially
regulated by the rules recently promulgated by the rules recently promulgated by this
Court to carry into the effect the avowed legislative purpose. The fact, however, that
the Court of Industrial Relations may be said to be free from the rigidity of certain
procedural requirements does not mean that it can, in justifiable cases before it, entirely
ignore or disregard the fundamental and essential requirements of due process in trials
and investigations of an administrative character. There are primary rights which must
be respected even in proceedings of this character:
(1) The first of these rights is the right to a hearing, which includes the right of
the party interested or affected to present his own case and submit evidence in
support thereof. In the language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1,
58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property of the citizen
shall be protected by the rudimentary requirements of fair play.
(2) Not only must the party be given an opportunity to present his case and to
adduce evidence tending to establish the rights which he asserts but the
tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan
v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of this
court inEdwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence,
without the corresponding duty on the part of the board to consider it, is vain.

Such right is conspicuously futile if the person or persons to whom the

evidence is presented can thrust it aside without notice or consideration."
(3) "While the duty to deliberate does not impose the obligation to decide
right, it does imply a necessity which cannot be disregarded, namely, that of
having something to support it is a nullity, a place when directly attached."
(Edwards vs. McCoy, supra.) This principle emanates from the more
fundamental is contrary to the vesting of unlimited power anywhere. Law is
both a grant and a limitation upon power.
(4) Not only must there be some evidence to support a finding or conclusion
(City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937,
XXXVI O. G. 1335), but the evidence must be "substantial." (Washington,
Virginia and Maryland Coach Co. v. national labor Relations Board, 301 U.S.
142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant evidence
as a reasonable mind accept as adequate to support a conclusion."
(Appalachian Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d
985, 989; National Labor Relations Board v. Thompson Products, 6 Cir., 97 F. 2d
13, 15; Ballston-Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir.,
98 F. 2d 758, 760.) . . . The statute provides that "the rules of evidence
prevailing in courts of law and equity shall not be controlling.' The obvious
purpose of this and similar provisions is to free administrative boards from the
compulsion of technical rules so that the mere admission of matter which
would be deemed incompetent inn judicial proceedings would not invalidate
the administrative order. (Interstate Commerce Commission v. Baird, 194 U.S.
25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v.
Louisville and Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed.
431; United States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed.
624.) But this assurance of a desirable flexibility in administrative procedure
does not go far as to justify orders without a basis in evidence having rational
probative force. Mere uncorroborated hearsay or rumor does not constitute
substantial evidence. (Consolidated Edison Co. v. National Labor Relations
Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)"
(5) The decision must be rendered on the evidence presented at the hearing, or
at least contained in the record and disclosed to the parties affected.
(Interstate Commence Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185,
57 Law. ed. 431.) Only by confining the administrative tribunal to the evidence
disclosed to the parties, can the latter be protected in their right to know and
meet the case against them. It should not, however, detract from their duty
actively to see that the law is enforced, and for that purpose, to use the
authorized legal methods of securing evidence and informing itself of facts
material and relevant to the controversy. Boards of inquiry may be appointed
for the purpose of investigating and determining the facts in any given case,
but their report and decision are only advisory. (Section 9, Commonwealth Act
No. 103.) The Court of Industrial Relations may refer any industrial or

agricultural dispute or any matter under its consideration or advisement to a

local board of inquiry, a provincial fiscal. a justice of the peace or any public
official in any part of the Philippines for investigation, report and
recommendation, and may delegate to such board or public official such
powers and functions as the said Court of Industrial Relations may deem
necessary, but such delegation shall not affect the exercise of the Court itself of
any of its powers. (Section 10, ibid.)
(6) The Court of Industrial Relations or any of its judges, therefore, must act on
its or his own independent consideration of the law and facts of the
controversy, and not simply accept the views of a subordinate in arriving at a
decision. It may be that the volume of work is such that it is literally Relations
personally to decide all controversies coming before them. In the United States
the difficulty is solved with the enactment of statutory authority authorizing
examiners or other subordinates to render final decision, with the right to
appeal to board or commission, but in our case there is no such statutory
authority.
(7) The Court of Industrial Relations should, in all controversial questions,
render its decision in such a manner that the parties to the proceeding can
know the various issues involved, and the reasons for the decision rendered.
The performance of this duty is inseparable from the authority conferred upon
it.
In the right of the foregoing fundamental principles, it is sufficient to observe here that,
except as to the alleged agreement between the Ang Tibay and the National Worker's
Brotherhood (appendix A), the record is barren and does not satisfy the thirst for a
factual basis upon which to predicate, in a national way, a conclusion of law.
This result, however, does not now preclude the concession of a new trial prayed for the
by respondent National Labor Union, Inc., it is alleged that "the supposed lack of
material claimed by Toribio Teodoro was but a scheme adopted to systematically
discharged all the members of the National Labor Union Inc., from work" and this
avernment is desired to be proved by the petitioner with the "records of the Bureau of
Customs and the Books of Accounts of native dealers in leather"; that "the National
Workers Brotherhood Union of Ang Tibay is a company or employer union dominated by
Toribio Teodoro, the existence and functions of which are illegal." Petitioner further
alleges under oath that the exhibits attached to the petition to prove his substantial
avernments" are so inaccessible to the respondents that even within the exercise of due
diligence they could not be expected to have obtained them and offered as evidence in
the Court of Industrial Relations", and that the documents attached to the petition "are
of such far reaching importance and effect that their admission would necessarily mean
the modification and reversal of the judgment rendered herein." We have considered
the reply of Ang Tibay and its arguments against the petition. By and large, after
considerable discussions, we have come to the conclusion that the interest of justice
would be better served if the movant is given opportunity to present at the hearing the

documents referred to in his motion and such other evidence as may be relevant to the
main issue involved. The legislation which created the Court of Industrial Relations and
under which it acts is new. The failure to grasp the fundamental issue involved is not
entirely attributable to the parties adversely affected by the result. Accordingly, the
motion for a new trial should be and the same is hereby granted, and the entire record
of this case shall be remanded to the Court of Industrial Relations, with instruction that
it reopen the case, receive all such evidence as may be relevant and otherwise proceed
in accordance with the requirements set forth hereinabove. So ordered.
Avancea, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur.

FIRST DIVISION
[A.M. No. MTJ-93-783. July 29, 1996]
OFFICE OF THE COURT ADMINISTRATOR, petitioner, vs. JUDGE FILOMENO
PASCUAL, respondent.
DECISION
HERMOSISIMA, JR., J.:
Intimating as to what the ideals of a good judge should be, Sir Francis Bacon wants
judges to remember that their office is jus dicere and not jus dare, to interpret law, and
not to make law or give law. They ought to be more learned than witty, more revered
than plausible, and more advised 3than confident. Above all things, INTEGRITY is their
[1]
portion and proper virtue.
The Constitution and the statutes, however, limit the legal qualifications of judges
to only three bare essentials: citizenship, age and experience. The virtues of probity,
honesty, temperance, impartiality and integrity, most often used to measure an aspirant
to the bench, lose their meaning in individual perception.
While people perceive judges to be above the ordinary run of men, they know that
a perfect judge, like a perfect priest, exists only in fantasy.
Thus, it does not come as a surprise that the integrity of respondent judge in this
administrative case stands challenged for committing acts of extortion or bribery.
The following antecedent facts appear on record:
Sometime in February, 1993, a certain Ceferino Tigas wrote a letter, addressed to
Hon. Reynaldo Suarez of the Office of the Court Administrator of the Supreme Court,
charging that irregularities and corruption were being committed by the respondent
Presiding Judge of the Municipal Trial Court of Angat, Bulacan.
On March 10, 1993, the letter was referred to the National Bureau of Investigation
in order that an investigation on the alleged illegal and corrupt practices of the
[2]
respondent may be conducted. Ordered to conduct a discreet investigation by the
then NBI Director Epimaco Velasco were: SA Edward Villarta, team leader, SI Reynaldo
Olazo, HA Teofilo Galang, SI Florino Javier and SI Jose Icasiano. They proceeded to
Angat, Bulacan, in order to look for Ceferino Tigas, the letter writer. Tigas, the NBI team
realized was a fictitious character. In view of their failure to find Tigas, they proceeded
to the residence of Candido Cruz, an accused in respondents sala.
[3]

In his affidavit executed on March 23, 1993 before SA Edward Villarta, Cruz
declared that he was the accused in Criminal Case No. 2154, charged with the crime of
Frustrated Murder. Respondent judge, after conducting the preliminary investigation of
the case, decided that the crime he committed was only physical injuries and so,
respondent judge assumed jurisdiction over the case. Cruz believed that he was made to
understand by the respondent that, in view of his favorable action, Cruz was to give to

respondent the sum of P2,000.00.Respondent judge is believed to be a drunkard and, in

all probability, would need money to serve his vice.
In view of this statement, the NBI agents assigned to the case caused respondent
judge to be entrapped, for which reason, the judge was thought to have been caught in
flagrante delicto. NBI agents Villarta and Olazo filed the following report:
On 25 March 1993, at about 4:00 in the afternoon, CANDIDO CRUZ met with Judge
PASCUAL at the Colegio de Sta. Monica, near the Municipal Building of Angat, Bulacan,
where Subject is attending the graduation of his daughter. CANDIDO CRUZ told Judge
PASCUAL that he already had the P2,000.00 which he (Judge PASCUAL) is asking
him. However, Judge PASCUAL did not receive the money because according to him there
were plenty of people around. He then instructed CANDIDO CRUZ to see him (Judge
PASCUAL) at his office the following day.
At about 8:30 in the morning of the following day (26 March 1993), CANDIDO CRUZ
proceeded to the office of Judge PASCUAL at the Municipal Trial Court of Angat, Bulacan,
and thereat handed to him four (4) pieces of P500.00 bills contained in a white mailing
envelope previously marked and glazed with fluorescent powder.
In the meantime, the Undersigned stayed outside the court room and after about
15 minutes, CANDIDO CRUZ came out of the room and signaled to the Undersigned that
Judge PASCUAL had already received the marked money. The Undersigned immediately
entered the room and informed Subject about the entrapment. Subject denied having
received anything from CANDIDO CRUZ, but after a thorough search, the marked money
was found inserted between the pages of a blue book on top of his table.
Subject was invited to the Office of the NBI-NCR, Manila wherein he was subjected
to ultra violet light examination. After finding Subjects right hand for the presence of
fluorescent powder, he was booked, photographed and fingerprinted in accordance
with our Standard Operating Procedure (S.O.P.).
On even date, the results of our investigation together with the person of Judge
FILOMENO PASCUAL was referred to the Inquest Prosecutor of the Office of the Special
Prosecutor, Ombudsman, with the recommendation that he be charged and prosecuted
for Bribery as defined and penalized under Article 210 of the Revised Penal Code of the
Philippines. (Rollo, pp. 47-48.)
On May 11, 1994, by resolution of the Third Division of this Court, this case was
referred to Executive Judge Natividad G. Dizon for investigation, report and
[4]
recommendation.
In connection with this investigation, respondent filed a Memorandum, dated July
28, 1995, wherein respondent presented his version of the case:
Sometime in February 1993, one Ceferino Tigas, a fictitious person according to
the NBI, wrote a letter to Court Administrator Ernani Pao of the Supreme Court, alleging
irregularities committed by the accused. Deputy Court Administrator Reynaldo L. Suarez
endorsed the letter to the NBI Director requesting `discreet investigation of the Tigas
letter. An NBI tandem of Agents Edward Villarta and Reynaldo Olazo proceeded to

Angat, Bulacan, to investigate. Said tandems assignment was merely to conduct discreet
investigation supposedly, but it led to incriminatory machinations, planting evidence,
unlawful arrest, illegal search and seizure. They contacted Candido Cruz who was
mentioned in the letter. They, however, discovered that Ceferino Tigas, the alleged
letter writer, was an inexistent person, fictitious as shown by the synopsis report of the
NBI agents (Exhibit 8). Having contacted Candido Cruz, the NBI agents persuaded him to
participate in what they called `entrapment operation. The NBI agents prepared an
affidavit, then a supplementary affidavit and had them signed by Candido Cruz. They
also went to the NBI Headquarters and had four (4) P500 bills dusted with fluorescent
powder which they used in theoperation against the accused.
In the afternoon of March 25, 1993, the NBI, along with Candido Cruz, proceeded to
the municipal building of Angat, Bulacan, where the accused judge was holding
office. However, they learned that the accused judge was not in his office but was then
attending the graduation rites of his son at the nearby Colegio de Sta. Monica, and so
they decided to move their operation to the school grounds. The ceremonies had not yet
begun. Candido Cruz saw the accused in one corner of the compound and approached
him. He tried to give the accused an envelope allegedly containing money, but the judge
refused to accept it and angrily drove Candido Cruz away. Rebuffed, the NBI agents
decided to reset their operation the following day.
At around 9:30 in the morning of March 26, 1993, the NBI agents and Candido Cruz
arrived at the municipal building of Angat, Bulacan. Cruz, as planned, entered the
accused judges chambers and placed an envelope, allegedly containing marked money,
right on his (judges) desk. He thought it was a pleading for filing and he told Candido
Cruz to file it with the office of the clerk of court at the adjacent room. Cruz replied that
it was the money the judge was asking for. Upon hearing the reply, the accused
suddenly erupted in anger, he grabbed the envelope on the desk and hurled it to
Cruz. The envelope fell on the floor, the accused picked it up and inserted it inside the
pocket of Cruzs polo shirt and drove him out of the chamber.
Just seconds thereafter, agents Villarta and Olazo entered the door of the chamber
which door was open at that time. They introduced themselves and told the accused
that the money that Cruz gave him was marked. Accused told them that he did not
receive or accept money from Cruz. But they proceeded to search the room, the table,
its drawers, and every nook and cranny of his room, including the pockets of the
accuseds pants. After scouring the place, the agents failed to find the envelope with the
marked money. And so, one of the agents called for Candido Cruz who was waiting
outside at a waiting shed fronting the municipal building, and asked him where the
envelope was. Cruz came back to the room and, together with agent Olazo, approached
the cabinet and said heto pala.
Then, the accuseds humiliating experience began. Thereafter, despite the strident
protestations of the accused, the envelope, which came from the pocket of Cruzs polo
shirt, was placed on top of the table of the judge, pictures were taken, and the accused
[5]
was arrested by the NBI agents.
On August 11, 1995, Executive Judge Natividad G. Dizon submitted the following
report and recommendation:

The Investigating Judge respectfully submits her findings based on the evidence at
hand.
As against the respondent judges denials, the undersigned submits that the sworn
affidavits of complainants and NBI Agents and documentary proofs attached to the
records are more convincing and nearer to the truth. They have no motive for fabricating
this charge, except to bring justice. Credence should be given to the testimony of the NBI
Agents coming as it does from an unpolluted source. These Agents had no reason to
testify falsely against the respondent judge. They were just doing their duty. On the
other hand, the respondent judge had to protect himself against the testimonial and
technical/scientific evidence that he had received the envelope and to reject its
implications of such evidence.
Furthermore, his defense that he was just instigated to commit a crime is likewise
untenable. The principle evolved from the cases appears to be that in a prosecution for
an offense against the public welfare, such as accepting bribe, the defense of
entrapment cannot be successfully interposed; x x x.
One may well wonder over the manner the envelope containing the money was
proffered to the respondent judge as he narrated his story on how he got mad at
Candido Cruz when he proffered the said envelope, how he threw, picked it up and
placed it in the pocket of the latter and how he drove him away. He even testified that it
was just planted by the NBI Agents when the latter allegedly placed the envelope inside
a directory which was placed on top of a cabinet.
x x x. Why was he not surprised that somebody barged into his chamber or was he
really accustomed with people directly dealing or negotiating at his chamber, as what
Cruz did, instead of dealing with his staff. His angry words and his actuations, according
to his testimony, were not convincing at all to show that he was that fuming mad at
Candido Cruzs offer. More so, his claim that NBI Agents connived with Candido Cruz just
for their own personal glory was not even persuasive. His excuse of the presence of
fluorescent powder on his hand was flimsy and incredible.
The act of the respondent shows that he can be influenced by monetary
considerations. This act of the respondent of demanding and receiving money from a
party-litigant before his court constitutes serious misconduct in office. It is this kind of
gross and flaunting misconduct, no matter how nominal the amount involved on the part
of those who are charged with the responsibility of administering the law that will surely
erode the peoples respect for law and lose faith and trust in the courts which are
expected to render fair and equal justice to all.
Such act go against Canons 2 and 3 of the Code of Judicial Conduct which state: A
Judge should avoid impropriety and the appearance of impropriety in all activities and a
judge should perform official duties honestly, and with impartiality and diligence.
xxx xxx xxx
With the above, the Investigating Judge respectfully recommends that appropriate
penalty be imposed upon the respondent.

We find that the evidence on record does not warrant conviction.

We note that the only bases for the Report and Recommendation submitted by
Executive Judge Natividad G. Dizon consist of: The Complaint, the Answer, the
Memorandum of the respondent, and the transcript of stenographic notes of the
hearing of the bribery case of respondent judge at the Sandiganbayan. The respondent
was, therefore, not afforded the right to open trial wherein respondent can confront the
witnesses against him and present evidence in his defense.
This lapse in due process is unfortunate. The Rules, even in an administrative
cases, demand that, if the respondent judge should be disciplined for grave misconduct
or any graver offense, the evidence against him should be competent and should be
[6]
derived from direct knowledge. The Judiciary to which respondent belongs demands
no less. Before any of its members could be faulted, it should be only after due
investigation and after presentation of competent evidence, especially since the charge
[7]
is penal in character. The above-quoted Report and Recommendation of the
investigating judge had fallen short of the requirements of due process.
The evidence aforesaid admits of irreconcilable inconsistencies in the testimonies
of principal witness, Candido Cruz, and NBI Agent SI Reynaldo Olazo on several material
points.
It will be remembered that the charge was intimated by someone who must have
had an ax to grind against the respondent judge but who, by reason of cowardice or lack
of evidence to put up a righteous case, did not come out in the open and instead wrote
an anonymous letter. The letter-writer, naming himself as Ceferino Tigas, did not specify
crimes committed or illegal acts perpetrated but charged respondent with anomalies in
general terms. Respondent judge could not have been expected to make a valid answer
or to otherwise defend himself from such vague accusations.
While then NBI Director Epimaco Velasco, upon being apprised of the Tigas letter,
ordered the NBI investigating team to make a discreet investigation of respondent, the
NBI team had instead caused an instigation or the entrapment of respondent judge. Not
having found letter-writer Tigas and concluding that no such person exists, they sought
out an accused before respondents court who could possibly be respondent judges
virtual victim. Approached by the NBI team was Candido Cruz, a person who had been
brought before the Municipal Trial Court of Angat, Bulacan, for preliminary investigation
on the charge of Frustrated Murder. Respondent judge gave judgment to the effect that
the crime committed by Candido Cruz was that of physical injuries merely. He declared
then that he had original jurisdiction to try the case.
But, respondents action in this regard was perpetrated some time before Candido
Cruz was persuaded to participate in what they (the NBI agents) called entrapment
operation. The opportune time to bribe the respondent should have been before he
acted in reducing Cruz criminal liability from Frustrated Murder to Physical Injuries. No
bribe was asked then. It was unlikely that respondent would ask for it on the date of the
entrapment on March 26, 1993, the favorable verdict having been rendered already.
[8]

It is significant to note that NBI Agent Olazo admitted that, despite the fact that
he scoured the table of the respondent in search of the envelope, with marked money

in it, no envelope was found and so he had to call Candido Cruz who was already outside
so that Cruz can locate the envelope.
In view of these antecedents, we find reason to favorably consider the allegations
of respondent judge in his defense that, at around 9:30 oclock in the morning of March
26, 1993, Candido Cruz, along with the NBI agents, went to the Municipal Building of
Angat, Bulacan. Candido Cruz, alone, went inside respondent judges chambers, located
thereat, and placed before respondent judge an envelope containing marked
money. Respondent judge thought that what was placed before him was a pleading for
filing and so, he told Candido Cruz to file it with the Office of the Clerk of Court, that is,
in a room adjacent to his chambers. Candido Cruz replied that it was the money the
judge was asking for. Upon hearing this reply, respondent judge suddenly erupted in
anger. He grabbed the envelope on the desk and hurled it at Candido Cruz. The
envelope fell on the floor. Respondent judge then picked it up and inserted it inside the
pocket of Cruz polo shirt and drove him out of his chambers. NBI Agents Villarta and
Olazo immediately entered the door of the judges chambers, introduced themselves,
and told respondent judge that the money that Cruz gave him was marked. Respondent
judge told them that he did not receive or accept money from Candido Cruz. After
respondent judge said this, the NBI Agents nevertheless proceeded to search the room,
examined tables, drawers, and every nook and cranny of respondents chambers, and
the pockets of the pants of respondent judge. Even after rigid search of the chambers of
respondent, the NBI Agents failed to find the envelope containing marked money
allegedly given by Candido Cruz to respondent judge.
Candido Cruz, who had gone down to the waiting shed, was called for by one of
the agents. Candido Cruz was asked as to the whereabouts of the envelope containing
money.Candido Cruz went back to the judges chambers and made the motions of
conducting a search. Eventually, he went straight to the top of a cabinet and, in the
manner of a magician, produced the envelope with marked money, saying, heto pala.
Thereafter, photographs were taken of respondent judge who was humiliated no
end by the fact that the envelope with marked money was placed on top of his desk
with respondent judge in front of it.
In his testimony before the Sandiganbayan, NBI Agent SI Reynaldo Olazo stated
that the marked money used in their entrapment operation actually came from Candido
[9]
Cruz and not from the NBI; and he was not able to see what actually transpired
between Candido Cruz and respondent judge inside the chambers of the judge. He was
outside the judges chambers and entered it only after Candido Cruz gave the signal that
[10]
the money was already delivered by him to the respondent. Candido Cruz, on the
other hand, testified that the marked money used in the alleged entrapment operation
[11]
was given to him by the NBI and, when he went out of the judges chambers after
giving the money, he signaled to one, Col. Javier, who was then positioned immediately
[12]
outside the chambers.
In view of the foregoing facts, it is easy to conclude that the acts of the NBI agents
which triggered the incident that transpired inside respondent judges chambers
constituted instigation and not entrapment as claimed by the prosecution. It is evident
that Candido Cruz was induced to act as he did in order to place respondent judge in a

compromising situation, a situation which was not brought about by any request of
respondent judge. It is surprisingly strange that an accused in a case would simply barge
into the judges chambers without rhyme or reason, place bribe money on top of the
judges desk without so much as explaining what the money was for. Respondent judges
action on Candido Cruzs case which favored Cruz was effected long before. We can
believe the fact that, under the circumstances, respondent judge did react in anger and
threw the envelope at the accused Candido Cruz. The judge must have given back the
money to Candido Cruz and literally drove Cruz out of his chambers bringing the money
with him. This explains the reason why the NBI Agents notwithstanding a relentless
search did not find the money inside the chambers. Four (4) NBI Agents made the
search and they were unable to find the envelope with the marked money in it. This fact
NBI Agent Olazo in effect admitted because he had to call back Candido Cruz in order to
make Cruz divulge as to where the bribe money was placed. When, after all, Candido
Cruz produced the money when he went back to the judges chambers, it became
obvious that the money when offered to respondent judge was not received by the
latter.
The foregoing set of facts smacks of unlawful prosecution and planting of evidence
amounting to persecution. It is reprehensible to say the least that NBI agents should
entrap the respondent judge by illegal means, besmirch his reputation by the planting of
evidence against him and make public the foregoing charges of bribery against him in
the face of the unjustified and illegal incriminatory machinations perpetrated by the NBI
agents in connivance with Candido Cruz.
We, thus, hold respondent Judge Filomeno Pascual blameless of the charge of
bribery against him.
It should be noted that Candido Cruz insisted that he had participated in the
alleged entrapment operation only because of the fact that the NBI agents made him
[13]
believe that there was an order therefor from the Supreme Court. Considering that
he is illiterate and is already more than 70 years of age, it is understandable why he was
easily persuaded by the NBI agents to cooperate without need of any threat
whatsoever. Inconsistencies in his testimony is likewise attributed to his aforesaid
personal circumstances for it does not jibe with practical experience that a person
telling the truth will still have to struggle to remember everything that transpired, he
having been a participant in the operation. Gross mistakes on very important points not
[14]
easily forgotten are very strong indicia of the falsity of the story given by a witness.
We reiterate the ruling in the case of Raquiza v. Castaneda, Jr.,

[15]

that:

The ground for the removal of a judicial officer should be established beyond
reasonable doubt. Such is the rule where the charges on which the removal is sought is
misconduct in office, willful neglect, corruption, incompetency, etc. The general rules in
regard to admissibility of evidence in criminal trials apply.
Reasonable doubt is the inability to let the judicial mind rest easy upon the
[16]
certainty of guilt after a thorough investigation of the whole evidence. The principle
of reasonable doubt being applicable in the instant case, therefore, we find that the

alleged act of bribery committed by respondent has not been sufficiently and
convincingly proven to warrant the imposition of any penalty against respondent.
WHEREFORE, in view of the foregoing, respondent judge is hereby exonerated and
the administrative case against him is DISMISSED.
SO ORDERED.
Padilla (Chairman), Bellosillo, Vitug, and Kapunan, JJ., concur.

THIRD DIVISION
[Adm. Matter No. MTJ-00-1241. January 20, 2000]

7. [sic] That the actuation of Judge Reynaldo Blanco Bellosillo is

certainly oppressive, arrogant, and a gross misconduct affecting his
integrity and efficiency which merits a dismissal from the service;

DECISION

8. That such despotic act of Judge Bellosillo is likewise indicative of

partiality and gross ignorance of the Constitution and the
constitutional right of accused Meriam Colapo to choose her own
counsel to defend her in court;

PURISIMA, J.:

9. That such arrogant act of Judge Bellosillo would certainly violate

ATTY. NAPOLEON S. VALENZUELA, complainant vs. JUDGE REYNALDO B.

BELLOSILLO, respondent

The Affidavit-Complaint dated October 17, 1997 of Attorney Napoleon S. Valenzuela

charged respondent Judge Reynaldo Blanco Bellosillo of Branch 34 of the Metropolitan
Trial Court of Quezon City with gross violation of the constitutional right of subject
accused to assistance by counsel of her own choice, gross misconduct, oppression,
partiality and violation of the Code of Judicial Ethics; averring:
"2. That on September 4, 1997, I was hired as counsel for the accused
in Criminal Case No. 65382-86 entitled People of the Philippines vs.
Ms. Meriam V. Colapo for Violation of B.P. 22 which case is being
heard before Quezon City Metropolitan Trial Court Branch 34,
presided by Hon. Judge Reynaldo Blanco Bellosillo;
3. That subsequently, I then filed a Manifestation praying for the
Honorable Court to allow the accused to post bail; a copy of the
Manifestation is hereto attached as Annex A and A-1 and made as
integral parts hereof;

[1]

xxx."

The Answer, dated February 16, 1998, of respondent Judge denied the allegations of the
complaint, branded the same without any legal and factual basis; theorizing:
"1. That when Complainants Accused Client and Witness, Meriam J.
[sic] Colapo, appeared before the undersigned respondent to post Bail
she was unassisted by Complainant-Counsel and upon inquiry
informed that she is allegedly changing him not having liked the idea
of being referred by a Metro-TC Branch 34 Personnel to its PAO
Lawyer Joseph B. Sia, who rejected her due to the Prohibitive policy of
his office to represent an Accused in BP 22 Cases and instead referred
her to the Complainant-Lawyer, Napoleon S. Valenzuela, a former PAO
Employee, who allegedly changed [sic] her unreasonably for the
preparation of a mere Manifestation To Post Bail;

4. That Judge Reynaldo Bellosillo as was his custom, talked to my client

before granting bail for her provisional liberty inside his chambers and
in my absence;

2. That respondent could not have referred Complainants Accused

Client Witness to tha [sic] PALAO knowing its Prohibitive Policy to also
represent Accused in BP 22 Cases as previously made clear by its Chief,
Atty. Jose Puhawan;

5. That the next day, September 5, 1997, my client Meriam Colapo

informed me that Judge Reynaldo B. Bellosillo had angrily ordered her
to remove me as counsel and even suggested one Atty. Puhawan of
the PALAO QUEZON CITY as my replacement; xxx

3. That out of delicadeza and in recognition of Complainants right to

practice the law profession, respondent never talked to him about it;

6. That as a consequence thereof, the undersigned had no recourse

but to file a Notice of Withdrawal with the conformity of my client
Meriam V. Colapo xxx;

4. That the Motion to Withdraw filed by Complainant with the

Conformity of his Accused Client Witness, Meriam V. Colapo, is a
matter strictly just between the two of them, to which respondent
was never a privy;

7. That although I was aghast and flabbergasted with the

unfathomable actuation of Judge Bellosillo, I can think of no reason
what impelled him with anger to order my client for my replacement;

5. That had Complainant been more prudent, he could have just

verified from the respondent the veracity of his clients statements
which for legal intents and purposes are inadmissible for being

hearsay, thus, this unfounded time consuming Complaint could have

been avoided;
6. That respondent discharges his functions with all integrity and good
faith and without fear or favor knowing that justice must never be
distorted as to do so would make even the wise blind and subvert tha
[sic] cause of the innocent;
[2]

xxx"
[3]

In the Resolution issued on June 16, 1999, this Third Division referred the Complaint to
the Executive Judge of the Regional Trial Court of Quezon City, for investigation, report
and recommendation.
On September 22, 1999, Executive Judge Perlita J. Tria Tirona sent in the following
Report and Recommendation, to wit:
"Complainant alleged that: on September 4, 1997, he filed a motion
praying that his client Meriam V. Colapo accused in a BP 22 case then
pending in Metropolitan Trial Court, Branch 34, Quezon City, presided
over at that time by respondent, be allowed to post bail for her
provisional liberty. Respondent before acting on the Motion allegedly
talked to the accused and ordered her to replace her counsel, herein
complainant, with Atty. Puhawan from PALAO, Quezon City. Accused
Colapo informed him of this incident and told him she was terminating
his services pursuant to the instructions of the respondent.
In deference to his clients wishes, complainant filed a Notice of
Withdrawal of his appearance with his clients (Colapos)

According to complainant, he could not think of any reason for

respondent to order his client to replace him.
On cross examination, complainant stated that he worked with the
Public Attorneys Office for seven (7) to eight (8) years. He resigned in
1995. Complainants wife used to be an officemate of respondent at
the Public Attorneys Office in Makati in 1988.
Complainant admitted that his client Colapo was referred to him by
Atty. Sia, his friend, who is with the Public Attorneys Office (PAO)
where he used to work. He is aware of the PAO/PALAO policy not to
represent any person charged with BP 22. Complainant likewise
admitted that he filed his notice of withdrawal on the basis of what his
client Colapo told him. However, he did not confront the respondent

about it. He believed his client because she was agitated. According to
his client Colapo, respondent recommended Atty. Puhawan and he
right away filed his withdrawal as counsel.
At first, complainant stated that the affidavit of his client Colapo was
prepared by the Notary Public Lino Soriano. Then he stated that he
assisted her in the preparation of the same.
Complainant further alleged that it was also on September 5, 1997
(when his clients bond was approved) that Colapo informed him that
respondent wanted him changed as counsel.
However, in his Notice of Withdrawal as counsel which he filed in
Court, he stated that he was informed by his client Colapo on
September 7, 1997, which complainant again claims to be a
typographical error.
Complainant further admitted that his Notice of Withdrawal was with
the conformity of his client Colapo.
No other witness was presented by the complainant.
Respondent Judge Bellosillo, testified that he does not personally
know Miriam [sic] Colapo. He first met her when she appeared before
him in his Court for the approval of her bail bond. She was allowed to
post bail on the basis of the manifestation filed by her counsel on
record, complainant Atty. Napoleon S. Valenzuela. At that time she
was notassisted [sic] by her counsel (complainant was absent) but he
(respondent) allowed her just the same to post bail because according
to him he personally knows Colapos counsel complainant Atty.
Valenzuela.
Respondent further stated that when he inquired from Ms. Colapo
where her lawyer was, Ms. Colapo, in a very disappointing mood said
that she was going to change her counsel because she did not like the
idea of paying somebody who could not appear for her at the time she
needed him most. Later on he was informed of the notice of
withdrawal filed by complainant Napoleon Valenzuela with the
conformity of his client Colapo. He did not bother to read the
withdrawal anymore because anyway it contained the conformity of
his client Colapo. It was only when he received the 1st indorsement of
the Court Administrator which contained the complaint and the
annexes to the complaint of Atty. Valenzuela that he came to read the
notice of withdrawal. Had he read the notice of withdrawal earlier, he
could have called them for a conference, and confront both of them,
considering that the information given to him (complainant) by Colapo

is different from what appeared in the notice of withdrawal as

counsel, filed by herein complainant. Respondent likewise stated that
in all honesty and good faith, he honored the entry of appearance of
the new counsel and dismissed the case against Ms. Colapo on the
basis of the Affidavit of Desistance filed by the complaining witness in

On cross examination, respondent admitted that he talked to accused

Colapo before he approved the bail, who was then not assisted by her
counsel, to find out if she is the one who appears in the picture
attached to the bail bond, and to inform her of her undertaking under
the bail, and when he inquired from Colapo where her lawyer was, she
answered in a very disappointed manner that she was going to change
her counsel because she did not like the idea of paying somebody who
could not represent her at the time she needed him most and because
of the fact that she was referred to one Atty. Sia of the PAO Office
who in turn referred her (Colapo) to complainant who allegedly
charged her (complainant) so much for the preparation of the
manifestation.
Respondent likewise denied that he ever referred Ms. Colapo,
complainants client to the PALAO knowing fully well that the PALAO
does not represent an accused in a BP 22 case. Besides, according to
respondent, it was none of his business whether Colapo would want
to change her counsel. He (respondent) stated that he is not aware
whether Atty. Gusapos, the lawyer who replaced the complainant, is a
PALAO lawyer since he used his private or residential address when he
entered his appearance."
Prescinding from the foregoing, Judge Tirona concluded:
"The undersigned finds the evidence adduced by the complainant
insufficient to substantiate his charges against respondent Judge
Bellosillo.
The basis of complainants complaint is the affidavit of his client
Meriam Colapo to the effect that respondent Judge suggested to her
(Meriam Colapo) that she should change her counsel (herein
complainant), and that respondent recommended Atty. Puhawan of
the PALAO.
However, Meriam Colapo was not presented by complainant to testify
because she is presently in Brunei. While complainant claims that
Meriam Colapo is willing to testify, said willingness is not sufficient to
lend credence to the present charge since respondent has every right
to cross examine said witness.

It should likewise be noted that the lawyer who replaced complainant

as counsel for Meriam Colapo was not Atty. Puhawan, the lawyer
allegedly suggested by respondent but one Atty. Gusapos allegedly of
the PALAO, although no evidence was presented by complainant to
show that indeed Atty. Gusapos is also with PALAO notwithstanding
the fact that he promised to submit a certification from PALAO that

If Meriam Colapo has to discharge complainant as allegedly suggested

by respondent so as not to antagonize said respondent judge, why did
they not engage the services of Atty. Puhawan, the lawyer allegedly
suggested by respondent to take complainants place as counsel?
On the other hand, respondent in denying the charge, stated that he
could not have even suggested Atty. Puhawan of PALAO to take
complainants place as counsel since PALAO lawyers are not allowed to
represent an accused in a BP 22 case.
Besides, even complainant himself could see no reason why
respondent would suggest to Meriam Colapo to change complainant
as counsel and instead to engage the services of Atty. Puhawan.
Thus, the only evidence of the complainant, which is the Affidavit of
his client Meriam Colapo, cannot be the basis of a finding of guilt even
in an administrative case.
In view of the foregoing, the undersigned respectfully recommends
that the charges against respondent Judge Reynaldo B. Bellosillo be
dismissed for lack of evidence."
All the facts of the case studiedly considered, with a thorough evaluation of the records
on hand, the Court finds merit in the findings and recommendations of Executive Judge
Tirona, absent any discernible basis for adjudging respondent Judge Bellosillo liable
under the premises.
Apart from his testimony and affidavit-complaint, complainant did not adduce enough
evidence to prove his charges. He did not even present his primary witness, Meriam
Colapo, to support the charge that respondent Judge Bellosillo pressured the latter to
[4]
replace him as defense counsel. The affidavit of Meriam Colapo cannot be given
credence and is inadmissible without the said affiant placed on the witness stand to give
[5]
the respondent Judge an opportunity to test the veracity of affiants allegations. An
[6]
affidavit is hearsay unless the affiant is presented for cross-examination.
Sans the testimony of witness Meriam Colapo, to corroborate complainants allegations
and submission, the case against the respondent judge cannot prosper. The
employment or profession of a person is a property right within the constitutional

[7]

guaranty of due process of law. Respondent judge cannot therefore be adjudged guilty
of the charges against him without affording him a chance to confront the said witness,
Meriam Colapo; otherwise, his right to due process would be infringed.
WHEREFORE, for insufficiency of evidence, the Complaint at bar against respondent
Judge Reynaldo Blanco Bellosillo is hereby DISMISSED.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban and Gonzaga-Reyes, JJ., concur.

THIRD DIVISION
[G.R. No. 110379. November 28, 1997]
HON. ARMAND FABELLA, in his capacity as SECRETARY OF THE DEPARTMENT OF
EDUCATION, CULTURE AND SPORTS; DR. NILO ROSAS, in his capacity as
REGIONAL DIRECTOR, DECS-NCR; DR. BIENVENIDO ICASIANO, in his capacity
as the SUPERINTENDENT OF THE QUEZON CITY SCHOOLS and DIVISION; ALMA
BELLA O. BAUTISTA, AURORA C. VALENZUELA and TERESITA V.
DIMAGMALIW, petitioners, vs. THE COURT OF APPEALS, ROSARITO A.
SEPTIMO, ERLINDA B. DE LEON, CLARISSA T. DIMAANO, WILFREDO N.
BACANI, MARINA R. VIVAR, VICTORIA S. UBALDO, JENNIE L. DOGWE, NORMA
L. RONGCALES, EDITA C. SEPTIMO, TERESITA E. EVANGELISTA, CATALINA R.
FRAGANTE, REBECCA D. BAGDOG, MARILYNNA C. KU, MARISSA M. SAMSON,
HENEDINA B.CARILLO, NICASIO C. BRAVO, RUTH F. LACANILAO, MIRASOL C.
BALIGOD, FELISA S. VILLACRUEL, MA. VIOLETA ELIZABETH Y. HERNANDEZ,
ANTONIO C. OCAMPO, ADRIANO S. VALENCIA and ELEUTERIO S.
VARGAS, respondents.
DECISION

On September 17, 1990, then DECS Secretary Cario issued a return-to-work order to all
public school teachers who had participated in talk-outs and strikes on various dates
during the period September 26, 1990 to October 18, 1990. The mass action had been
staged to demand payment of 13th month differentials, clothing allowances and
passage of a debt-cap bill in Congress, among other things.
On October 18, 1990, Secretary Cario filed administrative cases against herein
petitioner-appellees, who are teachers of the Mandaluyong High School. The charge
sheets required petitioner-appellees to explain in writing why they should not be
punished for having taken part in the mass action in violation of civil service laws and
regulations, to wit:
1. grave misconduct;
2. gross neglect of duty;
3. gross violation of Civil Service Law and rules on reasonable office regulations;
4. refusal to perform official duty;

PANGANIBAN, J.:
5. conduct prejudicial to the best interest of the service;
Due process of law requires notice and hearing. Hearing, on the other hand,
presupposes a competent and impartial tribunal. The right to be heard and, ultimately,
the right to due process of law lose meaning in the absence of an independent,
competent and impartial tribunal.
Statement of the Case
This principium is explained by this Court as it resolves this petition for review on
[1]
[2]
certiorari assailing the May 21, 1993 Decision of the Court of Appeals in CA-G.R. SP
[3]
No. 29107 which affirmed the trial courts decision, as follows:
WHEREFORE, the decision appealed from is AFFIRMED and the appeal is DISMISSED.
The Hon. Armand Fabella is hereby ORDERED substituted as respondent-appellant in
place of former Secretary Isidro Cario and henceforth this fact should be reflected in the
title of this case.
SO ORDERED.

[4]

The Antecedent Facts

The facts, as found by Respondent Court, are as follows:

6. absence without leave (AWOL)

At the same time, Secretary Cario ordered petitioner-appellee to be placed under
preventive suspension.
The charges were subsequently amended by DECS-NCR Regional Director Nilo
Rosas on November 7, 1990 to include the specific dates when petitioner-appellees
allegedly took part in the strike.
Administrative hearings started on December 20, 1990. Petitioner-appellees
counsel objected to the procedure adopted by the committee and demanded that he be
furnished a copy of the guidelines adopted by the committee for the investigation and
imposition of penalties. As he received no response from the committee, counsel
walked out. Later, however, counsel, was able to obtain a copy of the guidelines.
On April 10, 1991, the teachers filed a an injunctive suit (Civil Case No. 60675) with
the Regional Trial Court in Quezon City, charging the committee appointed by Secretary
Cario with fraud and deceit and praying that it be stopped from further investigating
them and from rendering any decision in the administrative case. However, the trial
court denied them a restraining order.
They then amended their complaint and made it one for certiorari
and mandamus. They alleged that the investigating committee was acting with grave
abuse of discretion because its guidelines for investigation place the burden of proof on

them by requiring them to prove their innocence instead of requiring Secretary Cario
and his staff to adduce evidence to prove the charges against the teachers.
On May 30, 1991, petitioner-appellee Adriano S. Valencia of the Ramon Magsaysay
High School filed a motion to intervene, alleging that he was in the same situation as
petitioners since he had likewise been charged and preventively suspended by
respondent-appellant Cario for the same grounds as the other petitioner-appellees and
made to shoulder the burden of proving his innocence under the committees
guidelines. The trial court granted his motion on June 3, 1991 and allowed him to
intervene.

on June 26, 1992 because of prior commitment in Cavite. It was pointed out that Cario
was represented by Atty. Reno Capinpin, while the other respondents were represented
by Atty. Jocelyn Pili, both of the DECS-NCR and that both had special powers of
attorney. But the Solicitor Generals motion for reconsideration was denied by the trial
court. In its order of July 15, 1992, the court stated:
The Motion For Reconsideration dated July 3, 1992 filed by the respondents thru
counsel, is hereby DENIED for lack of merit. It appears too obvious that respondents
simply did not want to comply with the lawful orders of the Court.

On June 11, 1991, the Solicitor General answered the petitioner for certiorari and
mandamus in behalf of respondent DECS Secretary. In the main he contended that, in
accordance with the doctrine of primary resort, the trial court should not interfere in
the administrative proceedings.

The respondents having lost their standing in Court, the Manifestation and Motion,
dated July 3, 1992 filed by the Office of the Solicitor General is hereby DENIED due
course.

The Solicitor General also asked the trial court to reconsider its order of June 3,
1991, allowing petitioner-appellee Adriano S. Valencia to intervene in the case.

SO ORDERED.

Meanwhile, the DECS investigating committee rendered a decision on August 6,

1991, finding the petitioner-appellees guilty, as charged and ordering their immediate
dismissal.
On August 15, 1991, the trial court dismissed the petition for certiorari and
mandamus for lack of merit. Petitioner-appellees moved for a reconsideration, but their
motion was denied on September 11, 1991.
The teachers then filed a petition for certiorari with the Supreme Court which, on
February 18, 1992, issued a resolution en banc declaring void the trial courts order of
dismissal and reinstating petitioner-appellees action, even as it ordered the latters
reinstatement pending decision of their case.
Accordingly, on March 25, 1992, the trial court set the case for hearing. June 8,
1992, it issued a pre-trial order which reads:
As prayed for by Solicitor Bernard Hernandez, let this case be set for pre-trial conference
on June 17, 1992 at 1:30 p.m., so as to expedite the proceedings hereof. In which case,
DECS Secretary Isidro Cario, as the principal respondent, is hereby ordered to
PERSONALLY APPEAR before this Court on said date and time, with a warning that
should he fail to show up on said date, the Court will declare him as IN DEFAULT. Stated
otherwise, for the said Pre-Trial Conference, the Court will not recognize any
representative of his.
By agreement of the parties, the trial conference was reset on June 26,
1992. However, Secretary Cario failed to appear in court on the date set. It was
explained that he had to attend a conference in Maragondon, Cavite. Instead, he was
represented by Atty. Reno Capinpin, while the other respondents were represented by
Atty. Jocelyn Pili. But the court just the same declared them as in default. The Solicitor
General moved for a reconsideration, reiterating that Cario could not personally come

On July 3, 1992, the Solicitor General informed the trial court that Cario had ceased
to be DECS Secretary and asked for his substitution. But the court failed to act on his
motion.
The hearing of the case was thereafter conducted ex parte with only the teachers
allowed to present their evidence.
On August 10, 1992, the trial court rendered a decision, in which it stated:
The Court is in full accord with petitioners contention that Rep. Act No. 4670 otherwise
known as the Magna Carta for Public School Teachers is the primary law that governs
the conduct of investigation in administrative cases filed against public school teachers,
with Pres. Decree No. 807 as its supplemental law. Respondents erred in believing and
contending that Rep. Act. No. 4670 has already been superseded by the applicable
provisions of Pres. Decree No. 807 and Exec. Order No. 292. Under the Rules of
Statutory Construction, a special law, Rep. Act. No. 4670 in the case at bar, is not
regarded as having been replaced by a general law, Pres. Decree No. 807, unless the
intent to repeal or alter the same is manifest. A perusal of Pres. Decree No. 807 reveals
no such intention exists, hence, Rep. Act No. 4670 stands. In the event that there is
conflict between a special and a general law, the former shall prevail since it evidences
the legislators intent more clearly than that of the general statute and must be taken as
an exception to the General Act. The provision of Rep. Act No. 4670 therefore prevails
over Pres. Decree No. 807 in the composition and selection of the members of the
investigating committee.Consequently, the committee tasked to investigate the charges
filed against petitioners was illegally constituted, their composition and appointment
being violative of Sec. 9 of Rep. Act. No. 4670 hence all acts done by said body possess
no legal color whatsoever.
Anent petitioners claim that their dismissal was effected without any formal
investigation, the Court, after consideration of the circumstances surrounding the case,
finds such claim meritorious. Although it cannot be gain said that respondents have a

cause of action against the petitioner, the same is not sufficient reason to detract from
the necessity of basic fair play. The manner of dismissal of the teachers is tainted with
illegality. It is a dismissal without due process. While there was a semblance of
investigation conducted by the respondents their intention to dismiss petitioners was
already manifest when it adopted a procedure provided for by law, by shifting the
burden of proof to the petitioners, knowing fully well that the teachers would boycott
the proceedings thereby giving them cause to render judgment ex-parte.
The DISMISSAL therefore of the teachers is not justified, it being arbitrary and violative
of the teachers right to due process. Due process must be observed in dismissing the
teachers because it affects not only their position but also their means of livelihood.
WHEREFORE, premises considered, the present petition is hereby GRANTED and all the
questioned orders/decisions of the respondents are hereby declared NULL and VOID
and are hereby SET ASIDE.

The Issues
Before us, petitioners raise the following issues:
I.

II.

III.

Whether or not Respondent Court of Appeals committed grave abuse of

discretion in holding in effect that private respondents were denied due
process of law.
Whether or not Respondent Court of Appeals seriously erred and
committed grave abuse of discretion in applying strictly the provision of
R.A. No. 4670 in the composition of the investigating committee.
Whether or not Respondent Court of Appeals committed grave abuse of
discretion in dismissing the appeal and in affirming the trial courts
[8]
decision.

These issues, all closely related, boil down to a single question: whether private
respondents were denied due process of law.

The reinstatement of all the petitioners to their former positions without loss of
seniority and promotional rights is hereby ORDERED.

The Courts Ruling

The payment, if any, of all the petitioners back salaries, allowances, bonuses, and other
benefits and emoluments which may have accrued to them during the entire period of
their preventive suspension and/or dismissal from the service is hereby likewise
ORDERED.

Denial of Due Process

SO ORDERED.

[5]

From this adverse decision of the trial court, former DECS Secretary Isidro Cario
filed an appeal with the Court of Appeals raising the following grounds:
I. The trial court seriously erred in declaring appellants as in default.
II. The trial court seriously erred in not ordering the proper substitution of
parties.
III. The trial court seriously erred in holding that R.A. No. 4670, otherwise
known as Magna Carta for Public School Teachers, should govern the
conduct of the investigations conducted.
IV. The trial court seriously erred in ruling that the dismissal of the teachers
[6]
are without due process.
As mentioned earlier, the Court of Appeals affirmed the RTC decision, holding in
the main that private respondents were denied due process in the administrative
proceedings instituted against them.
Hence, this petition for review.

[7]

The petition is bereft of merit. We agree with the Court of Appeals that private
respondents were denied due process of law.

At the outset, we must stress that we are tasked only to determine whether or not
due process of law was observed in the administrative proceedings against herein
private respondents. We note the Solicitor Generals extensive disquisition that
[9]
government employees do not have the right to strike. On this point, the Court, in the
[10]
case of Bangalisan vs. Court of Appeals, has recently pronounced, through Mr. Justice
Florenz D. Regalado:
It is the settled rule in this jurisdiction that employees in the public service may not
engage in strikes. While the Constitution recognizes the right of government employees
to organize, they are prohibited from staging strikes, demonstrations mass leaves, walkouts and other forms of mass action which will result in temporary stoppage or
disruption of public services. The right of government employees to organize is limited
only to the formation of unions or associations, without including the right to strike.
[11]

More recently, in Jacinto vs. Court of Appeals, the Court explained the
schoolteachers right to peaceful assembly vis-a-vis their right to mass protest:
Moreover, the petitioners here, except Merlinda Jacinto, were not penalized for the
exercise of their right to assemble peacefully and to petition the government for a
redress of grievances. Rather, the Civil Service Commission found them guilty of conduct
prejudicial to the best interest of the service for having absented themselves without
proper authority, from their schools during regular school days, in order to participate in
the mass protest, their absence ineluctably resulting in the non-holding of classes and in
the deprivation of students of education, for which they were responsible. Had

petitioners availed themselves of their free time -- recess, after classes, weekends or
holidays -- to dramatize their grievances and to dialogue with the proper authorities
within the bounds of law, no one -- not the DECS, the CSC or even this Court -- could
have held them liable for the valid exercise of their constitutionally guaranteed
rights. As it was, the temporary stoppage of classes resulting from their activity
necessarily disrupted public services, the very evil sought to be forestalled by the
prohibition against strikes by government workers. Their act by its nature was enjoined
by the Civil Service law, rules and regulations, for which they must, therefore, be made
[12]
answerable.
In the present case, however, the issue is not whether the private respondents
engaged in any prohibited activity which may warrant the imposition of disciplinary
sanctions against them as a result of administrative proceedings. As already observed,
the resolution of this case revolves around the question of due process of law, not on
the right of government workers to strike. The issue is not whether private respondents
may be punished for engaging in a prohibited action but whether, in the course of the
investigation of the alleged proscribed activity, their right to due process has been
violated. In short, before they can be investigated and meted out any penalty, due
process must first be observed.
In administrative proceedings, due process has been recognized to include the
following: (1) the right to actual or constructive notice of the institution of proceedings
which may affect a respondents legal rights; (2) a real opportunity to be heard
personally or with the assistance of counsel, to present witnesses and evidence in ones
favor, and to defend ones rights; (3) a tribunal vested with competent jurisdiction and so
constituted as to afford a person charged administratively a reasonable guarantee of
honesty as well as impartiality; and (4) a finding by said tribunal which is supported by
substantial evidence submitted for consideration during the hearing or contained in the
[13]
records or made known to the parties affected.
The legislature enacted a special law, RA 4670 known as the Magna Carta for
Public School Teachers, which specifically covers administrative proceedings involving
public schoolteachers. Section 9 of said law expressly provides that the committee to
hear public schoolteachers administrative cases should be composed of the school
superintendent of the division as chairman, a representative of the local or any existing
provincial or national teachers organization and a supervisor of the division. The
pertinent provisions of RA 4670 read:
Sec. 8. Safeguards in Disciplinary Procedure. Every teacher shall enjoy equitable
safeguards at each stage of any disciplinary procedure and shall have:
a. the right to be informed, in writing, of the charges;
b. the right to full access to the evidence in the case;

c. the right to defend himself and to be defended by a representative of his choice

and/or by his organization, adequate time being given to the teacher for the
preparation of his defense; and
c. the right to appeal to clearly designated authorities. No publicity shall be given to any
disciplinary action being taken against a teacher during the pendency of his case.
Sec. 9. Administrative Charges. Administrative charges against a teacher shall be heard
initially by a committee composed of the corresponding School Superintendent of the
Division or a duly authorized representative who would at least have the rank of a
division supervisor, where the teacher belongs, as chairman, a representative of the
local or, in its absence, any existing provincial or national teachers organization and a
supervisor of the Division, the last two to be designated by the Director of Public
Schools. The committee shall submit its findings, and recommendations to the Director
of Public Schools within thirty days from the termination of the hearings: Provided,
however, That where the school superintendent is the complainant or an interested
party, all the members of the committee shall be appointed by the Secretary of
Education.
The foregoing provisions implement the Declaration of Policy of the statute; that
is, to promote the terms of employment and career prospects of schoolteachers.
In the present case, the various committees formed by DECS to hear the
administrative charges against private respondents did not include a representative of
the local or, in its absence, any existing provincial or national teachers organization as
required by Section 9 of RA 4670. Accordingly, these committees were deemed to have
no competent jurisdiction.Thus, all proceedings undertaken by them were necessarily
void. They could not provide any basis for the suspension or dismissal of private
respondents. The inclusion of a representative of a teachers organization in these
committees was indispensable to ensure an impartial tribunal. It was this requirement
that would have given substance and meaning to the right to be heard. Indeed, in any
proceeding, the essence of procedural due process is embodied in the basic
[14]
requirement of notice and a real opportunity to be heard.
Petitioners argue that the DECS complied with Section 9 of RA 4670, because all
the teachers who were members of the various committees are members of either the
Quezon City Secondary Teachers Federation or the Quezon City Elementary Teachers
[15]
Federation and are deemed to be the representatives of a teachers organization as
required by Section 9 of RA 4670.
We disagree. Mere membership of said teachers in their respective teachers
organizations does not ipso facto make them authorized representatives of such
organizations as contemplated by Section 9 of RA 4670. Under this section, the teachers
organization possesses the right to indicate its choice of representative to be included
by the DECS in the investigating committee. Such right to designate cannot be usurped
by the secretary of education or the director of public schools or their underlings. In the
instant case, there is no dispute that none of the teachers appointed by the DECS as

members of its investigating committee was ever designated or authorized by a

teachers organization as its representative in said committee.

government, or chiefs of agencies, or regional directors, or upon sworn, written

complaint of any other persons.

[16]

Contrary to petitioners asseverations, RA 4670 is applicable to this case. It has

not been expressly repealed by the general law PD 807, which was enacted later, nor
has it been shown to be inconsistent with the latter. It is a fundamental rule of statutory
construction that repeals by implication are not favored. An implied repeal will not be
allowed unless it is convincingly and unambiguously demonstrated that the two laws are
so clearly repugnant and patently inconsistent that they cannot co-exist. This is based
on the rationale that the will of the legislature cannot be overturned by the judicial
function of construction and interpretation. Courts cannot take the place of Congress in
repealing statutes. Their function is to try to harmonize, as much as possible, seeming
conflicts in the laws and resolve doubts in favor of their validity and co[17]
existence. Thus, a subsequent general law does not repeal a prior special law, unless
the intent to repeal or alter is manifest, although the terms of the general law are broad
[18]
enough to include the cases embraced in the special law.
The aforementioned Section 9 of RA 4670, therefore, reflects the legislative intent
to impose a standard and a separate set of procedural requirements in connection with
administrative proceedings involving public schoolteachers. Clearly, private respondents
right to due process of law requires compliance with these requirements laid down by
RA 4670. Verba legis non est recedendum.
Hence, Respondent Court of Appeals, through Mr. Justice Vicente V. Mendoza who
is now a member of this Court, perceptively and correctly stated:
Respondent-appellants argue that the Magna Carta has been superseded by the Civil
Service Decree (P.D. No. 807) and that pursuant to the latter law the head of a
department, like the DECS secretary, or a regional director, like the respondentappellant Nilo Rosas, can file administrative charges against a subordinate, investigate
him and take disciplinary action against him if warranted by his findings.Respondentappellants cite in support of their argument the following provisions of the Civil Service
Decree (P.D. No. 807):
Sec. 37. Disciplinary Jurisdiction. -xxx xxx xxx
b) The heads of departments, agencies and instrumentalities xxx shall have jurisdiction
to investigate and decide matters involving disciplinary action against officers and
employees under their jurisdiction xxx .
Sec. 38,. Procedure in Administrative Cases Against Non-Presidential Appointees. a) Administrative Proceedings may be commenced against a subordinate officer or the
employee by the head of department or officer of equivalent rank, or head of local

There is really no repugnance between the Civil Service Decree and the Magna Carta for
Public School Teachers. Although the Civil Service Decree gives the head of department
or the regional director jurisdiction to investigate and decide disciplinary matters, the
fact is that such power is exercised through committees. In cases involving public school
teachers, the Magna Carta provides that the committee be constituted as follows:
Sec. 9. Administrative Charges. - Administrative charges against a teacher shall be heard
initially by a committee composed of the corresponding School Superintendent of the
Division or a duly authorized representative who would at least have the rank of a
division supervisor, where the teacher belongs, as chairman, a representative of the
local or, in its absence, any existing provincial or national teachers organization and a
supervisor of the Division, the last two to be designated by the Director of Public
Schools. The committee shall submit its findings, and recommendations to the Director
of Public Schools within thirty days from the termination of the hearings: Provided,
however, that where the school superintendent is the complainant or an interested
party, all the members of the committee shall be appointed by the Secretary of
Education.
Indeed, in the case at bar, neither the DECS [s]ecretary nor the DECS-NCR regional
director personally conducted the investigation but entrusted it to a committee
composed of a division supervisor, secondary and elementary school teachers, and
consultants. But there was no representative of a teachers organization. This is a serious
flaw in the composition of the committee because the provision for the representation
of a teachers organization is intended by law for the protection of the rights of teachers
facing administrative charges.
There is thus nothing in the Magna Carta that is in any way inconsistent with the Civil
Service Decree insofar as procedures for investigation is concerned. To the contrary, the
Civil Service Decree, [S]ec. 38(b) affirms the Magna Carta by providing that the
respondent in an administrative case may ask for a formal investigation, which was what
the teachers did in this case by questioning the absence of a representative of a
teachers organization in the investigating committee.
The administrative committee considered the teachers to have waived their right to a
hearing after the latters counsel walked out of the preliminary hearing. The committee
should not have made such a ruling because the walk out was staged in protest against
the procedures of the committee and its refusal to give the teachers counsel a copy of
the guidelines. The committee concluded its investigation and ordered the dismissal of
the teachers without giving the teachers the right to full access of the evidence against
them and the opportunity to defend themselves. Its predisposition to find petitionerappellees guilty of the charges was in fact noted by the Supreme Court when in its
resolution in G.R. No. 101943 (Rosario Septimo v. Judge Martin Villarama, Jr.) it stated:

The facts and issues in this case are similar to the facts and issues in Hon. Isidro Cario, et
al. v. Hon. Carlos C. Ofilada, et al. G.R. No. 100206, August 22, 1961.
As in the Cario v. Ofilada case, the officials of the Department of Culture and Education
are predisposed to summarily hold the petitioners guilty of the charges against them. In
fact, in this case Secretary Cario, without awaiting formal administrative procedures and
on the basis of reports and implied admissions found the petitioners guilty as charged
and dismissed them from the service in separate decisions dated May 16, 1991 and
[19]
August 6, 1991. The teachers went to court. The Court dismissed the case.
Furthermore, this Court sees no valid reason to disregard the factual findings and
conclusions of the Court of Appeals. It is not our function to assess and evaluate all over
again the evidence, testimonial and documentary, adduced by the parties particularly
where, such as here, the findings of both the trial court and the appellate court
[20]
coincide.
It is as clear as day to us that the Court of Appeals committed no reversible error in
affirming the trial courts decision setting aside the questioned orders of petitioners; and
ordering the unqualified reinstatement of private respondents and the payment to
them of salaries, allowances, bonuses and other benefits that accrued to their benefit
[21]
during the entire duration of their suspension or dismissal. Because the
administrative proceedings involved in this case are void, no delinquency or misconduct
may be imputed to private respondents. Moreover, the suspension or dismissal meted
[22]
on them is baseless. Private respondents should, as a consequence, be reinstated and
awarded all monetary benefits that may have accrued to them during the period of their
[23]
unjustified suspension or dismissal. This Court will never countenance a denial of the
fundamental right to due process, which is a cornerstone of our legal system.
WHEREFORE, premises considered, the petition is hereby DENIED for its utter
failure to show any reversible error on the part of the Court of Appeals. The assailed
Decision is thusAFFIRMED.
SO ORDERED.
Narvasa, C.J., (Chairman), Romero, Melo, and Francisco, JJ., concur.

EN BANC

papers submitted, private respondent appears to be charged in the United States with
violation of the following provisions of the United States Code (USC):

[G.R. No. 139465. January 18, 2000]

SECRETARY OF JUSTICE, petitioner, vs. HON. RALPH C. LANTION, Presiding Judge,
Regional Trial Court of Manila, Branch 25, and MARK B. JIMENEZ,respondents.
DECISION

A)......18 USC 371 (Conspiracy to commit offense or to defraud the

United States; two [2] counts; Maximum Penalty 5 years on each
count);
B)......26 USC 7201 (Attempt to evade or defeat tax; four [4] counts;
Maximum Penalty 5 years on each count);

MELO, J.:
The individual citizen is but a speck of particle or molecule vis--vis the vast and
overwhelming powers of government. His only guarantee against oppression and
tyranny are his fundamental liberties under the Bill of Rights which shield him in times
of need. The Court is now called to decide whether to uphold a citizens basic due
process rights, or the governments ironclad duties under a treaty. The bugle sounds and
this Court must once again act as the faithful guardian of the fundamental writ.

C)......18 USC 1343 (Fraud by wire, radio, or television; two [2] counts;
Maximum Penalty 5 years on each count);
D)......18 USC 1001 (False statement or entries; six [6] counts;
Maximum Penalty 5 years on each count);
E)......2 USC 441f (Election contributions in name of another; thirtythree [33] counts; Maximum Penalty less than one year).

The petition at our doorstep is cast against the following factual backdrop:
(p. 14, Rollo.)
On January 13, 1977, then President Ferdinand E. Marcos issued Presidential Decree No.
1069 "Prescribing the Procedure for the Extradition of Persons Who Have Committed
Crimes in a Foreign Country". The Decree is founded on: the doctrine of incorporation
under the Constitution; the mutual concern for the suppression of crime both in the
state where it was committed and the state where the criminal may have escaped; the
extradition treaty with the Republic of Indonesia and the intention of the Philippines to
enter into similar treaties with other interested countries; and the need for rules to
guide the executive department and the courts in the proper implementation of said
treaties.
On November 13, 1994, then Secretary of Justice Franklin M. Drilon, representing the
Government of the Republic of the Philippines, signed in Manila the "Extradition Treaty
Between the Government of the Republic of the Philippines and the Government of the
United States of America" (hereinafter referred to as the RP-US Extradition Treaty). The
Senate, by way of Resolution No. 11, expressed its concurrence in the ratification of said
treaty. It also expressed its concurrence in the Diplomatic Notes correcting Paragraph
(5)(a), Article 7 thereof (on the admissibility of the documents accompanying an
extradition request upon certification by the principal diplomatic or consular officer of
the requested state resident in the Requesting State).
On June 18, 1999, the Department of Justice received from the Department of Foreign
Affairs U. S. Note Verbale No. 0522 containing a request for the extradition of private
respondent Mark Jimenez to the United States. Attached to the Note Verbale were the
Grand Jury Indictment, the warrant of arrest issued by the U.S. District Court, Southern
District of Florida, and other supporting documents for said extradition. Based on the

On the same day, petitioner issued Department Order No. 249 designating and
authorizing a panel of attorneys to take charge of and to handle the case pursuant to
Section 5(1) of Presidential Decree No. 1069. Accordingly, the panel began with the
"technical evaluation and assessment" of the extradition request and the documents in
support thereof. The panel found that the "official English translation of some
documents in Spanish were not attached to the request and that there are some other
matters that needed to be addressed" (p. 15, Rollo).
Pending evaluation of the aforestated extradition documents, private respondent,
through counsel, wrote a letter dated July 1, 1999 addressed to petitioner requesting
copies of the official extradition request from the U. S. Government, as well as all
documents and papers submitted therewith; and that he be given ample time to
comment on the request after he shall have received copies of the requested papers.
Private respondent also requested that the proceedings on the matter be held in
abeyance in the meantime.
Later, private respondent requested that preliminarily, he be given at least a copy of, or
access to, the request of the United States Government, and after receiving a copy of
the Diplomatic Note, a period of time to amplify on his request.
In response to private respondents July 1, 1999 letter, petitioner, in a reply-letter dated
July 13, 1999 (but received by private respondent only on August 4, 1999), denied the
foregoing requests for the following reasons:

1. We find it premature to furnish you with copies of the extradition

request and supporting documents from the United States
Government, pending evaluation by this Department of the sufficiency
of the extradition documents submitted in accordance with the
provisions of the extradition treaty and our extradition law. Article 7 of
the Extradition Treaty between the Philippines and the United States
enumerates the documentary requirements and establishes the
procedures under which the documents submitted shall be received
and admitted as evidence. Evidentiary requirements under our
domestic law are also set forth in Section 4 of P.D. No. 1069.
Evaluation by this Department of the aforementioned documents is
not a preliminary investigation nor akin to preliminary investigation of
criminal cases. We merely determine whether the procedures and
requirements under the relevant law and treaty have been complied
with by the Requesting Government. The constitutionally guaranteed
rights of the accused in all criminal prosecutions are therefore not
available.
It is only after the filing of the petition for extradition when the person
sought to be extradited will be furnished by the court with copies of
the petition, request and extradition documents and this Department
will not pose any objection to a request for ample time to evaluate
said documents.
2. The formal request for extradition of the United States contains
grand jury information and documents obtained through grand jury
process covered by strict secrecy rules under United States law. The
United States had to secure orders from the concerned District Courts
authorizing the United States to disclose certain grand jury
information to Philippine government and law enforcement personnel
for the purpose of extradition of Mr. Jimenez. Any further disclosure
of the said information is not authorized by the United States District
Courts. In this particular extradition request the United States
Government requested the Philippine Government to prevent
unauthorized disclosure of the subject information. This Departments
denial of your request is consistent with Article 7 of the RP-US
Extradition Treaty which provides that the Philippine Government
must represent the interests of the United States in any proceedings
arising out of a request for extradition. The Department of Justice
under P.D. No. 1069 is the counsel of the foreign governments in all
extradition requests.
3. This Department is not in a position to hold in abeyance
proceedings in connection with an extradition request. Article 26 of
the Vienna Convention on the Law of Treaties, to which we are a party

provides that "[E]very treaty in force is binding upon the parties to it

and must be performed by them in good faith". Extradition is a tool of
criminal law enforcement and to be effective, requests for extradition
or surrender of accused or convicted persons must be processed
expeditiously.
(pp. 77-78, Rollo.)
Such was the state of affairs when, on August 6, 1999, private respondent filed with the
Regional Trial Court of the National Capital Judicial Region a petition against the
Secretary of Justice, the Secretary of Foreign Affairs, and the Director of the National
Bureau of Investigation, for mandamus (to compel herein petitioner to furnish private
respondent the extradition documents, to give him access thereto, and to afford him an
opportunity to comment on, or oppose, the extradition request, and thereafter to
evaluate the request impartially, fairly and objectively); certiorari (to set aside herein
petitioners letter dated July 13, 1999); and prohibition (to restrain petitioner from
considering the extradition request and from filing an extradition petition in court; and
to enjoin the Secretary of Foreign Affairs and the Director of the NBI from performing
any act directed to the extradition of private respondent to the United States), with an
application for the issuance of a temporary restraining order and a writ of preliminary
injunction (pp. 104-105, Rollo).
The aforementioned petition was docketed as Civil Case No. 99-94684 and thereafter
raffled to Branch 25 of said regional trial court stationed in Manila which is presided
over by the Honorable Ralph C. Lantion.
After due notice to the parties, the case was heard on August 9, 1999. Petitioner, who
appeared in his own behalf, moved that he be given ample time to file a memorandum,
but the same was denied.
On August 10, 1999, respondent judge issued an order dated the previous day,
disposing:
WHEREFORE, this Court hereby Orders the respondents, namely: the
Secretary of Justice, the Secretary of Foreign Affairs and the Director
of the National Bureau of Investigation, their agents and/or
representatives to maintain the status quo by refraining from
committing the acts complained of; from conducting further
proceedings in connection with the request of the United States
Government for the extradition of the petitioner; from filing the
corresponding Petition with a Regional Trial court; and from
performing any act directed to the extradition of the petitioner to the
United States, for a period of twenty (20) days from service on
respondents of this Order, pursuant to Section 5, Rule 58 of the 1997
Rules of Court.

The hearing as to whether or not this Court shall issue the preliminary
injunction, as agreed upon by the counsels for the parties herein, is set
on August 17, 1999 at 9:00 oclock in the morning. The respondents
are, likewise, ordered to file their written comment and/or opposition
to the issuance of a Preliminary Injunction on or before said date.
SO ORDERED.
(pp. 110-111, Rollo.)
Forthwith, petitioner initiated the instant proceedings, arguing that:
PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION AMOUNTING
TO LACK OR EXCESS OF JURISDICTION IN ISSUING THE TEMPORARY
RESTRAINING ORDER BECAUSE:
I.

II.

III.
IV.

BY ORDERING HEREIN PETITIONER TO REFRAIN FROM COMMITTING THE

ACTS COMPLAINED OF, I. E., TO DESIST FROM REFUSING PRIVATE
RESPONDENT ACCESS TO THE OFFICIAL EXTRADITION REQUEST AND
DOCUMENTS AND FROM DENYING PRIVATE RESPONDENT AN
OPPORTUNITY TO FILE A COMMENT ON, OR OPPOSITION TO, THE
REQUEST, THE MAIN PRAYER FOR A WRIT OF MANDAMUS IN THE
PETITION FOR MANDAMUS, CERTIORARI AND PROHIBITION WAS, IN
EFFECT, GRANTED SO AS TO CONSTITUTE AN ADJUDICATION ON THE
MERITS OF THE MANDAMUS ISSUES;
PETITIONER WAS UNQUALIFIEDLY PREVENTED FROM PERFORMING LEGAL
DUTIES UNDER THE EXTRADITION TREATY AND THE PHILIPPINE
EXTRADITION LAW;
THE PETITION FOR (MANDAMUS), CERTIORARI AND PROHIBITION IS, ON
ITS FACE, FORMALLY AND SUBSTANTIALLY DEFICIENT; AND
PRIVATE RESPONDENT HAS NO RIGHT IN ESSE THAT NEEDS PROTECTION
AND ENFORCEMENT, AND WILL NOT SUFFER ANY IRREPARABLE INJURY.
(pp. 19-20, Rollo.)

On August 17, 1999, the Court required private respondent to file his comment. Also
issued, as prayed for, was a temporary restraining order (TRO) providing:
NOW, THEREFORE, effective immediately and continuing until further
orders from this Court, You, Respondent Judge Ralph C. Lantion, your
agents, representatives or any person or persons acting in your place
or stead are hereby ORDERED to CEASE and DESIST from enforcing the
assailed order dated August 9, 1999 issued by public respondent in
Civil Case No. 99-94684.

GIVEN by the Honorable HILARIO G. DAVIDE, JR., Chief Justice,

Supreme Court of the Philippines, this 17th day of August 1999.
(pp. 120-121, Rollo.)
The case was heard on oral argument on August 31, 1999, after which the parties, as
directed, filed their respective memoranda.
From the pleadings of the opposing parties, both procedural and substantive issues are
patent. However, a review of these issues as well as the extensive arguments of both
parties, compel us to delineate the focal point raised by the pleadings: During the
evaluation stage of the extradition proceedings, is private respondent entitled to the
two basic due process rights of notice and hearing? An affirmative answer would
necessarily render the proceedings at the trial court, moot and academic (the issues of
which are substantially the same as those before us now), while a negative resolution
would call for the immediate lifting of the TRO issued by this Court dated August 24,
1999, thus allowing petitioner to fast-track the process leading to the filing of the
extradition petition with the proper regional trial court. Corollarily, in the event that
private respondent is adjudged entitled to basic due process rights at the evaluation
stage of the extradition proceedings, would this entitlement constitute a breach of the
legal commitments and obligations of the Philippine Government under the RP-US
Extradition Treaty? And assuming that the result would indeed be a breach, is there any
conflict between private respondents basic due process rights and the provisions of the
RP-US Extradition Treaty?
The issues having transcendental importance, the Court has elected to go directly into
the substantive merits of the case, brushing aside peripheral procedural matters which
concern the proceedings in Civil Case No. 99-94684, particularly the propriety of the
filing of the petition therein, and of the issuance of the TRO of August 17, 1999 by the
trial court.
To be sure, the issues call for a review of the extradition procedure. The RP-US
Extradition Treaty which was executed only on November 13, 1994, ushered into force
the implementing provisions of Presidential Decree No. 1069, also called as the
Philippine Extradition Law. Section 2(a) thereof defines extradition as "the removal of an
accused from the Philippines with the object of placing him at the disposal of foreign
authorities to enable the requesting state or government to hold him in connection with
any criminal investigation directed against him or the execution of a penalty imposed on
him under the penal or criminal law of the requesting state or government." The
portions of the Decree relevant to the instant case which involves a charged and not
convicted individual, are abstracted as follows:
The Extradition Request
The request is made by the Foreign Diplomat of the Requesting State, addressed to the
Secretary of Foreign Affairs, and shall be accompanied by:

1. The original or an authentic copy of the criminal charge and the warrant of arrest
issued by the authority of the Requesting State having jurisdiction over the matter, or
some other instruments having equivalent legal force;
2. A recital of the acts for which extradition is requested, with the fullest particulars as
to the name and identity of the accused, his whereabouts in the Philippines, if known,
the acts or omissions complained of, and the time and place of the commission of these
acts;
3. The text of the applicable law or a statement of the contents of said law, and the
designation or description of the offense by the law, sufficient for evaluation of the
request; and

5. A statement of the provisions of the law describing any time limit on the prosecution
or the execution of punishment for the offense;
6. Documents, statements, or other types of information specified in paragraph 3 or
paragraph 4 of said Article, as applicable.
(Paragraph 2, Article 7, Presidential Decree No. 1069.)
7. Such evidence as, according to the law of the Requested State, would provide
probable cause for his arrest and committal for trial if the offense had been committed
there;

4. Such other documents or information in support of the request.

8. A copy of the warrant or order of arrest issued by a judge or other competent

authority; and

(Section 4, Presidential Decree No. 1069.)

9. A copy of the charging document.

Section 5 of the Presidential Decree, which sets forth the duty of the Secretary of
Foreign Affairs, pertinently provides:

(Paragraph 3, ibid.)

. . . (1) Unless it appears to the Secretary of Foreign Affairs that the

request fails to meet the requirements of this law and the relevant
treaty or convention, he shall forward the request together with the
related documents to the Secretary of Justice, who shall immediately
designate and authorize an attorney in his office to take charge of the
case.
The above provision shows only too clearly that the executive authority given the task of
evaluating the sufficiency of the request and the supporting documents is the Secretary
of Foreign Affairs. What then is the coverage of this task?

The executive authority (Secretary of Foreign Affairs) must also see to it that the
accompanying documents received in support of the request had been certified by the
principal diplomatic or consular officer of the Requested State resident in the
Requesting State (Embassy Note No. 052 from U. S. Embassy; Embassy Note No. 951309
from the Department of Foreign Affairs).
In this light, Paragraph 3, Article 3 of the Treaty provides that "[e]xtradition shall not be
granted if the executive authority of the Requested State determines that the request is
politically motivated, or that the offense is a military offense which is not punishable
under non-military penal legislation."
The Extradition Petition

In accordance with Paragraphs 2 and 3, Article 7 of the RP-US Extradition Treaty, the
executive authority must ascertain whether or not the request is supported by:
1. Documents, statements, or other types of information which describe the identity
and probable location of the person sought;
2. A statement of the facts of the offense and the procedural history of the case;
3. A statement of the provisions of the law describing the essential elements of the
offense for which extradition is requested;
4. A statement of the provisions of law describing the punishment for the
offense;

Upon a finding made by the Secretary of Foreign Affairs that the extradition request and
its supporting documents are sufficient and complete in form and substance, he shall
deliver the same to the Secretary of Justice, who shall immediately designate and
authorize an attorney in his office to take charge of the case (Paragraph [1], Section 5, P.
D. No. 1069). The lawyer designated shall then file a written petition with the proper
regional trial court of the province or city, with a prayer that the court take the
extradition request under consideration (Paragraph [2], ibid.).
The presiding judge of the regional trial court, upon receipt of the petition for
extradition, shall, as soon as practicable, issue an order summoning the prospective
extraditee to appear and to answer the petition on the day and hour fixed in the order.
The judge may issue a warrant of arrest if it appears that the immediate arrest and

temporary detention of the accused will best serve the ends of justice (Paragraph [1],
Section 6, ibid.), particularly to prevent the flight of the prospective extraditee.
The Extradition Hearing
The Extradition Law does not specifically indicate whether the extradition proceeding is
criminal, civil, or a special proceeding. Nevertheless, Paragraph [1], Section 9 thereof
provides that in the hearing of the extradition petition, the provisions of the Rules of
Court, insofar as practicable and not inconsistent with the summary nature of the
proceedings, shall apply. During the hearing, Section 8 of the Decree provides that the
attorney having charge of the case may, upon application by the Requesting State,
represent the latter throughout the proceedings.
Upon conclusion of the hearing, the court shall render a decision granting the
extradition and giving the reasons therefor upon a showing of the existence of a prima
facie case, or dismiss the petition (Section 10, ibid.). Said decision is appealable to the
Court of Appeals, whose decision shall be final and immediately executory (Section
12, ibid.). The provisions of the Rules of Court governing appeal in criminal cases in the
Court of Appeals shall apply in the aforementioned appeal, except for the required 15day period to file brief (Section 13, ibid.).
The trial court determines whether or not the offense mentioned in the petition is
extraditable based on the application of the dual criminality rule and other conditions
mentioned in Article 2 of the RP-US Extradition Treaty. The trial court also determines
whether or not the offense for which extradition is requested is a political one
(Paragraph [1], Article 3, RP-US Extradition Treaty).
With the foregoing abstract of the extradition proceedings as backdrop, the following
query presents itself: What is the nature of the role of the Department of Justice at the
evaluation stage of the extradition proceedings?
A strict observance of the Extradition Law indicates that the only duty of the Secretary
of Justice is to file the extradition petition after the request and all the supporting
papers are forwarded to him by the Secretary of Foreign Affairs. It is the latter official
who is authorized to evaluate the extradition papers, to assure their sufficiency, and
under Paragraph [3], Article 3 of the Treaty, to determine whether or not the request is
politically motivated, or that the offense is a military offense which is not punishable
under non-military penal legislation. Ipso facto, as expressly provided in Paragraph [1],
Section 5 of the Extradition Law, the Secretary of Justice has the ministerial duty of filing
the extradition papers.
However, looking at the factual milieu of the case before us, it would appear that there
was failure to abide by the provisions of Presidential Decree No. 1069. For while it is
true that the extradition request was delivered to the Department of Foreign Affairs on
June 17, 1999, the following day or less than 24 hours later, the Department of Justice
received the request, apparently without the Department of Foreign Affairs discharging

its duty of thoroughly evaluating the same and its accompanying documents. The
statement of an assistant secretary at the Department of Foreign Affairs that his
Department, in this regard, is merely acting as a post office, for which reason he simply
forwarded the request to the Department of Justice, indicates the magnitude of the
error of the Department of Foreign Affairs in taking lightly its responsibilities.
Thereafter, the Department of Justice took it upon itself to determine the completeness
of the documents and to evaluate the same to find out whether they comply with the
requirements laid down in the Extradition Law and the RP-US Extradition Treaty.
Petitioner ratiocinates in this connection that although the Department of Justice had
no obligation to evaluate the extradition documents, the Department also had to go
over them so as to be able to prepare an extradition petition (tsn, August 31, 1999, pp.
24-25). Notably, it was also at this stage where private respondent insisted on the
following: (1) the right to be furnished the request and the supporting papers; (2) the
right to be heard which consists in having a reasonable period of time to oppose the
request, and to present evidence in support of the opposition; and (3) that the
evaluation proceedings be held in abeyance pending the filing of private respondent's
opposition to the request.
The two Departments seem to have misread the scope of their duties and authority, one
abdicating its powers and the other enlarging its commission. The Department of
Foreign Affairs, moreover, has, through the Solicitor General, filed a manifestation that
it is adopting the instant petition as its own, indirectly conveying the message that if it
were to evaluate the extradition request, it would not allow private respondent to
participate in the process of evaluation.
Plainly then, the record cannot support the presumption of regularity that the
Department of Foreign Affairs thoroughly reviewed the extradition request and
supporting documents and that it arrived at a well-founded judgment that the request
and its annexed documents satisfy the requirements of law. The Secretary of Justice,
eminent as he is in the field of law, could not privately review the papers all by himself.
He had to officially constitute a panel of attorneys. How then could the DFA Secretary or
his undersecretary, in less than one day, make the more authoritative determination?
The evaluation process, just like the extradition proceedings proper, belongs to a class
by itself. It is sui generis. It is not a criminal investigation, but it is also erroneous to say
that it is purely an exercise of ministerial functions. At such stage, the executive
authority has the power: (a) to make a technical assessment of the completeness and
sufficiency of the extradition papers; (b) to outrightly deny the request if on its face and
on the face of the supporting documents the crimes indicated are not extraditable; and
(c) to make a determination whether or not the request is politically motivated, or that
the offense is a military one which is not punishable under non-military penal legislation
(tsn, August 31, 1999, pp. 28-29; Article 2 & and Paragraph [3], Article 3, RP-US
Extradition Treaty). Hence, said process may be characterized as an investigative or
inquisitorial process in contrast to a proceeding conducted in the exercise of an
administrative bodys quasi-judicial power.

In administrative law, a quasi-judicial proceeding involves: (a) taking and evaluation of

evidence; (b) determining facts based upon the evidence presented; and (c) rendering
an order or decision supported by the facts proved (De Leon, Administrative Law: Text
and Cases, 1993 ed., p. 198, citing Morgan vs. United States, 304 U.S. 1). Inquisitorial
power, which is also known as examining or investigatory power, is one of the
determinative powers of an administrative body which better enables it to exercise its
quasi-judicial authority (Cruz, Phil. Administrative Law, 1996 ed., p. 26). This power
allows the administrative body to inspect the records and premises, and investigate the
activities, of persons or entities coming under its jurisdiction (Ibid., p. 27), or to require
disclosure of information by means of accounts, records, reports, testimony of
witnesses, production of documents, or otherwise (De Leon, op. cit., p. 64).
The power of investigation consists in gathering, organizing, and analyzing evidence,
which is a useful aid or tool in an administrative agencys performance of its rule-making
or quasi-judicial functions. Notably, investigation is indispensable to prosecution.
In Ruperto v. Torres (100 Phil. 1098 [1957], unreported), the Court had occasion to rule
on the functions of an investigatory body with the sole power of investigation. It does
not exercise judicial functions and its power is limited to investigating the facts and
making findings in respect thereto. The Court laid down the test of determining whether
an administrative body is exercising judicial functions or merely investigatory functions:
Adjudication signifies the exercise of power and authority to adjudicate upon the rights
and obligations of the parties before it. Hence, if the only purpose for investigation is to
evaluate evidence submitted before it based on the facts and circumstances presented
to it, and if the agency is not authorized to make a final pronouncement affecting the
parties, then there is an absence of judicial discretion and judgment.
The above description in Ruperto applies to an administrative body authorized to
evaluate extradition documents. The body has no power to adjudicate in regard to the
rights and obligations of both the Requesting State and the prospective extraditee. Its
only power is to determine whether the papers comply with the requirements of the
law and the treaty and, therefore, sufficient to be the basis of an extradition petition.
Such finding is thus merely initial and not final. The body has no power to determine
whether or not the extradition should be effected. That is the role of the court. The
bodys power is limited to an initial finding of whether or not the extradition petition can
be filed in court.
It is to be noted, however, that in contrast to ordinary investigations, the evaluation
procedure is characterized by certain peculiarities. Primarily, it sets into motion the
wheels of the extradition process. Ultimately, it may result in the deprivation of liberty
of the prospective extraditee. This deprivation can be effected at two stages: First, the
provisional arrest of the prospective extraditee pending the submission of the request.
This is so because the Treaty provides that in case of urgency, a contracting party may
request the provisional arrest of the person sought pending presentation of the request
(Paragraph [1], Article 9, RP-US Extradition Treaty), but he shall be automatically
discharged after 60 days if no request is submitted (Paragraph 4). Presidential Decree

No. 1069 provides for a shorter period of 20 days after which the arrested person could
be discharged (Section 20[d]). Logically, although the Extradition Law is silent on this
respect, the provisions only mean that once a request is forwarded to the Requested
State, the prospective extraditee may be continuously detained, or if not, subsequently
rearrested (Paragraph [5], Article 9, RP-US Extradition Treaty), for he will only be
discharged if no request is submitted. Practically, the purpose of this detention is to
prevent his possible flight from the Requested State. Second, the temporary arrest of
the prospective extraditee during the pendency of the extradition petition in court
(Section 6, Presidential Decree No. 1069).
Clearly, there is an impending threat to a prospective extraditees liberty as early as
during the evaluation stage. It is not only an imagined threat to his liberty, but a very
imminent one.
Because of these possible consequences, we conclude that the evaluation process is
akin to an administrative agency conducting an investigative proceeding, the
consequences of which are essentially criminal since such technical assessment sets off
or commences the procedure for, and ultimately, the deprivation of liberty of a
prospective extraditee. As described by petitioner himself, this is a "tool" for criminal
law enforcement (p. 78, Rollo). In essence, therefore, the evaluation process partakes of
the nature of a criminal investigation. In a number of cases, we had occasion to make
available to a respondent in an administrative case or investigation certain
constitutional rights that are ordinarily available only in criminal prosecutions. Further,
as pointed out by Mr. Justice Mendoza during the oral arguments, there are rights
formerly available only at the trial stage that had been advanced to an earlier stage in
the proceedings, such as the right to counsel and the right against self-incrimination
(tsn, August 31, 1999, p. 135;Escobedo vs. Illinois, 378 U.S. 478; Gideon vs. Wainwright,
372 U.S. 335; Miranda vs. Arizona, 384 U.S. 436).
In Pascual v. Board of Medical Examiners (28 SCRA 344 [1969]), we held that the right
against self-incrimination under Section 17, Article III of the 1987 Constitution which is
ordinarily available only in criminal prosecutions, extends to administrative proceedings
which possess a criminal or penal aspect, such as an administrative investigation of a
licensed physician who is charged with immorality, which could result in his loss of the
privilege to practice medicine if found guilty. The Court, citing the earlier case of Cabal
vs. Kapunan (6 SCRA 1059 [1962]), pointed out that the revocation of ones license as a
medical practitioner, is an even greater deprivation than forfeiture of property.
Cabal vs. Kapunan (supra) involved an administrative charge of unexplained wealth
against a respondent which was filed under Republic Act No. 1379, or the Anti-Graft
Law. Again, we therein ruled that since the investigation may result in forfeiture of
property, the administrative proceedings are deemed criminal or penal, and such
forfeiture partakes the nature of a penalty. There is also the earlier case ofAlmeda, Sr.
vs. Perez (5 SCRA 970 [1962]), where the Court, citing American jurisprudence, laid
down the test to determine whether a proceeding is civil or criminal: If the proceeding is
under a statute such that if an indictment is presented the forfeiture can be included in

the criminal case, such proceeding is criminal in nature, although it may be civil in form;
and where it must be gathered from the statute that the action is meant to be criminal
in its nature, it cannot be considered as civil. If, however, the proceeding does not
involve the conviction of the wrongdoer for the offense charged, the proceeding is civil
in nature.
The cases mentioned above refer to an impending threat of deprivation of ones
property or property right. No less is this true, but even more so in the case before us,
involving as it does the possible deprivation of liberty, which, based on the hierarchy of
constitutionally protected rights, is placed second only to life itself and enjoys
precedence over property, for while forfeited property can be returned or replaced, the
time spent in incarceration is irretrievable and beyond recompense.
By comparison, a favorable action in an extradition request exposes a person to
eventual extradition to a foreign country, thus saliently exhibiting the criminal or penal
aspect of the process. In this sense, the evaluation procedure is akin to a preliminary
investigation since both procedures may have the same result the arrest and
imprisonment of the respondent or the person charged. Similar to the evaluation stage
of extradition proceedings, a preliminary investigation, which may result in the filing of
an information against the respondent, can possibly lead to his arrest, and to the
deprivation of his liberty.
Petitioners reliance on Wright vs. Court of Appeals (235 SCRA 241 [1992]) (p. 8,
Petitioners Memorandum) that the extradition treaty is neither a piece of criminal
legislation nor a criminal procedural statute is not well-taken. Wright is not authority for
petitioners conclusion that his preliminary processing is not akin to a preliminary
investigation. The characterization of a treaty in Wright was in reference to the
applicability of the prohibition against an ex post facto law. It had nothing to do with the
denial of the right to notice, information, and hearing.
As early as 1884, the United States Supreme Court ruled that "any legal proceeding
enforced by public authority, whether sanctioned by age or custom, or newly devised in
the discretion of the legislative power, in furtherance of the general public good, which
regards and preserves these principles of liberty and justice, must be held to be due
process of law" (Hurtado vs. California, 110 U.S. 516). Compliance with due process
requirements cannot be deemed non-compliance with treaty commitments.
The United States and the Philippines share a mutual concern about the suppression
and punishment of crime in their respective jurisdictions. At the same time, both States
accord common due process protection to their respective citizens.
The due process clauses in the American and Philippine Constitutions are not only
worded in exactly identical language and terminology, but more importantly, they are
alike in what their respective Supreme Courts have expounded as the spirit with which
the provisions are informed and impressed, the elasticity in their interpretation, their
dynamic and resilient character which make them capable of meeting every modern

problem, and their having been designed from earliest time to the present to meet the
exigencies of an undefined and expanding future. The requirements of due process are
interpreted in both the United States and the Philippines as not denying to the law the
capacity for progress and improvement. Toward this effect and in order to avoid the
confines of a legal straitjacket, the courts instead prefer to have the meaning of the due
process clause "gradually ascertained by the process of inclusion and exclusion in the
course of the decisions of cases as they arise" (Twining vs. New Jersey, 211 U.S. 78).
Capsulized, it refers to "the embodiment of the sporting idea of fair play" (ErmitaMalate Hotel and Motel Owners Association vs. City Mayor of Manila, 20 SCRA 849
[1967]). It relates to certain immutable principles of justice which inhere in the very idea
of free government (Holden vs. Hardy, 169 U.S. 366).
Due process is comprised of two components substantive due process which requires
the intrinsic validity of the law in interfering with the rights of the person to his life,
liberty, or property, and procedural due process which consists of the two basic rights of
notice and hearing, as well as the guarantee of being heard by an impartial and
competent tribunal (Cruz, Constitutional Law, 1993 Ed., pp. 102-106).
True to the mandate of the due process clause, the basic rights of notice and hearing
pervade not only in criminal and civil proceedings, but in administrative proceedings as
well. Non-observance of these rights will invalidate the proceedings. Individuals are
entitled to be notified of any pending case affecting their interests, and upon notice,
they may claim the right to appear therein and present their side and to refute the
position of the opposing parties (Cruz, Phil. Administrative Law, 1996 ed., p. 64).
In a preliminary investigation which is an administrative investigatory proceeding,
Section 3, Rule 112 of the Rules of Court guarantees the respondents basic due process
rights, granting him the right to be furnished a copy of the complaint, the affidavits, and
other supporting documents, and the right to submit counter-affidavits and other
supporting documents within ten days from receipt thereof. Moreover, the respondent
shall have the right to examine all other evidence submitted by the complainant.
These twin rights may, however, be considered dispensable in certain instances, such as:
1. In proceedings where there is an urgent need for immediate action, like the summary
abatement of a nuisance per se (Article 704, Civil Code), the preventive suspension of a
public servant facing administrative charges (Section 63, Local Government Code, B. P.
Blg. 337), the padlocking of filthy restaurants or theaters showing obscene movies or
like establishments which are immediate threats to public health and decency, and the
cancellation of a passport of a person sought for criminal prosecution;
2. Where there is tentativeness of administrative action, that is, where the respondent
is not precluded from enjoying the right to notice and hearing at a later time without
prejudice to the person affected, such as the summary distraint and levy of the property
of a delinquent taxpayer, and the replacement of a temporary appointee; and

3. Where the twin rights have previously been offered but the right to exercise them
had not been claimed.

governed by a combination of treaties (with special reference to the RP-US Extradition

Treaty), federal statutes, and judicial decisions, to wit:

Applying the above principles to the case at bar, the query may be asked: Does the
evaluation stage of the extradition proceedings fall under any of the described
situations mentioned above?

1. All requests for extradition are transmitted through the diplomatic channel. In urgent
cases, requests for the provisional arrest of an individual may be made directly by the
Philippine Department of Justice to the U.S. Department of Justice, and vice-versa. In
the event of a provisional arrest, a formal request for extradition is transmitted
subsequently through the diplomatic channel.

Let us take a brief look at the nature of American extradition proceedings which are
quite noteworthy considering that the subject treaty involves the U.S.
Government.
American jurisprudence distinguishes between interstate rendition or extradition which
is based on the Extradition Clause in the U.S. Constitution (Art. IV, 2 cl 2), and
international extradition proceedings. In interstate rendition or extradition, the
governor of the asylum state has the duty to deliver the fugitive to the demanding state.
The Extradition Clause and the implementing statute are given a liberal construction to
carry out their manifest purpose, which is to effect the return as swiftly as possible of
persons for trial to the state in which they have been charged with crime (31A Am Jur 2d
754-755). In order to achieve extradition of an alleged fugitive, the requisition papers or
the demand must be in proper form, and all the elements or jurisdictional facts essential
to the extradition must appear on the face of the papers, such as the allegation that the
person demanded was in the demanding state at the time the offense charged was
committed, and that the person demanded is charged with the commission of the crime
or that prosecution has been begun in the demanding state before some court or
magistrate (35 C.J.S. 406-407). The extradition documents are then filed with the
governor of the asylum state, and must contain such papers and documents prescribed
by statute, which essentially include a copy of the instrument charging the person
demanded with a crime, such as an indictment or an affidavit made before a magistrate.
Statutory requirements with respect to said charging instrument or papers are
mandatory since said papers are necessary in order to confer jurisdiction on the
governor of the asylum state to effect the extradition (35 C.J.S. 408-410). A statutory
provision requiring duplicate copies of the indictment, information, affidavit, or
judgment of conviction or sentence and other instruments accompanying the demand
or requisitions be furnished and delivered to the fugitive or his attorney is directory.
However, the right being such a basic one has been held to be a right mandatory on
demand (Ibid., p. 410, citing Ex parte Moore, 256 S.W. 2d 103, 158 Tex. Cr. 407 and Ex
parte Tucker, Cr., 324, S.W.2d 853).
In international proceedings, extradition treaties generally provide for the presentation
to the executive authority of the Requested State of a requisition or demand for the
return of the alleged offender, and the designation of the particular officer having
authority to act in behalf of the demanding nation (31A Am Jur 2d 815).
In petitioners memorandum filed on September 15, 1999, he attached thereto a letter
dated September 13, 1999 from the Criminal Division of the U.S. Department of Justice,
summarizing the U.S. extradition procedures and principles, which are basically

2. The Department of State forwards the incoming Philippine extradition request to the
Department of Justice. Before doing so, the Department of State prepares a declaration
confirming that a formal request has been made, that the treaty is in full force and
effect, that under Article 17 thereof the parties provide reciprocal legal representation
in extradition proceedings, that the offenses are covered as extraditable offenses under
Article 2 thereof, and that the documents have been authenticated in accordance with
the federal statute that ensures admissibility at any subsequent extradition hearing.
3. A judge or magistrate judge is authorized to issue a warrant for the arrest of the
prospective extraditee (18 U.S.C. 3184). Said judge or magistrate is authorized to hold a
hearing to consider the evidence offered in support of the extradition request (Ibid.)
4. At the hearing, the court must determine whether the person arrested is extraditable
to the foreign country. The court must also determine that (a) it has jurisdiction over the
defendant and jurisdiction to conduct the hearing; (b) the defendant is being sought for
offenses for which the applicable treaty permits extradition; and (c) there is probable
cause to believe that the defendant is the person sought and that he committed the
offenses charged (Ibid.)
5. The judge or magistrate judge is vested with jurisdiction to certify extraditability after
having received a "complaint made under oath, charging any person found within his
jurisdiction" with having committed any of the crimes provided for by the governing
treaty in the country requesting extradition (Ibid.) [In this regard, it is noted that a long
line of American decisions pronounce that international extradition proceedings partake
of the character of a preliminary examination before a committing magistrate, rather
than a trial of the guilt or innocence of the alleged fugitive (31A Am Jur 2d 826).]
6. If the court decides that the elements necessary for extradition are present, it
incorporates its determinations in factual findings and conclusions of law and certifies
the persons extraditability. The court then forwards this certification of extraditability to
the Department of State for disposition by the Secretary of State. The ultimate decision
whether to surrender an individual rests with the Secretary of State (18 U.S.C. 3186).
7. The subject of an extradition request may not litigate questions concerning the
motives of the requesting government in seeking his extradition. However, a person
facing extradition may present whatever information he deems relevant to the

Secretary of State, who makes the final determination whether to surrender an

individual to the foreign government concerned.
From the foregoing, it may be observed that in the United States, extradition begins and
ends with one entity the Department of State which has the power to evaluate the
request and the extradition documents in the beginning, and, in the person of the
Secretary of State, the power to act or not to act on the courts determination of
extraditability. In the Philippine setting, it is the Department of Foreign Affairs which
should make the initial evaluation of the request, and having satisfied itself on the
points earlier mentioned (see pp. 10-12), then forwards the request to the Department
of Justice for the preparation and filing of the petition for extradition. Sadly, however,
the Department of Foreign Affairs, in the instant case, perfunctorily turned over the
request to the Department of Justice which has taken over the task of evaluating the
request as well as thereafter, if so warranted, preparing, filing, and prosecuting the
petition for extradition.
Private respondent asks what prejudice will be caused to the U.S. Government should
the person sought to be extradited be given due process rights by the Philippines in the
evaluation stage. He emphasizes that petitioners primary concern is the possible delay
in the evaluation process.

One of the basic principles of the democratic system is that where the
rights of the individual are concerned, the end does not justify the
means. It is not enough that there be a valid objective; it is also
necessary that the means employed to pursue it be in keeping with
the Constitution. Mere expediency will not excuse constitutional
shortcuts. There is no question that not even the strongest moral
conviction or the most urgent public need, subject only to a few
notable exceptions, will excuse the bypassing of an individuals rights.
It is no exaggeration to say that a person invoking a right guaranteed
under Article III of the Constitution is a majority of one even as against
the rest of the nation who would deny him that right (Association of
Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian
Reform, 175 SCRA 343, 375-376 [1989]).
There can be no dispute over petitioners argument that extradition is a tool of criminal
law enforcement. To be effective, requests for extradition or the surrender of accused
or convicted persons must be processed expeditiously. Nevertheless, accelerated or
fast-tracked proceedings and adherence to fair procedures are, however, not always
incompatible. They do not always clash in discord. Summary does not mean precipitous
haste. It does not carry a disregard of the basic principles inherent in "ordered
liberty."

We agree with private respondents citation of an American Supreme Court ruling:

The establishment of prompt efficacious procedures to achieve
legitimate state ends is a proper state interest worthy of cognizance in
constitutional adjudication. But the Constitution recognizes higher
values than speed and efficiency. Indeed, one might fairly say of the
Bill of Rights in general, and the Due Process Clause, in particular, that
they were designed to protect the fragile values of a vulnerable
citizenry from the overbearing concern for efficiency and efficacy that
may characterize praiseworthy government officials no less, and
perhaps more, than mediocre ones.
(Stanley vs. Illinois, 404 U.S. 645, 656)
The United States, no doubt, shares the same interest as the
Philippine Government that no right that of liberty secured not only by
the Bills of Rights of the Philippines Constitution but of the United
States as well, is sacrificed at the altar of expediency.
(pp. 40-41, Private Respondents Memorandum.)
In the Philippine context, this Courts ruling is invoked:

Is there really an urgent need for immediate action at the evaluation stage? At that
point, there is no extraditee yet in the strict sense of the word. Extradition may or may
not occur. In interstate extradition, the governor of the asylum state may not, in the
absence of mandatory statute, be compelled to act favorably (37 C.J.S. 387) since after a
close evaluation of the extradition papers, he may hold that federal and statutory
requirements, which are significantly jurisdictional, have not been met (31 Am Jur 2d
819). Similarly, under an extradition treaty, the executive authority of the requested
state has the power to deny the behest from the requesting state. Accordingly, if after a
careful examination of the extradition documents the Secretary of Foreign Affairs finds
that the request fails to meet the requirements of the law and the treaty, he shall not
forward the request to the Department of Justice for the filing of the extradition
petition since non-compliance with the aforesaid requirements will not vest our
government with jurisdiction to effect the extradition.
In this light, it should be observed that the Department of Justice exerted notable
efforts in assuring compliance with the requirements of the law and the treaty since it
even informed the U.S. Government of certain problems in the extradition papers (such
as those that are in Spanish and without the official English translation, and those that
are not properly authenticated). In fact, petitioner even admits that consultation
meetings are still supposed to take place between the lawyers in his Department and
those from the U.S. Justice Department. With the meticulous nature of the evaluation,
which cannot just be completed in an abbreviated period of time due to its intricacies,
how then can we say that it is a proceeding that urgently necessitates immediate and
prompt action where notice and hearing can be dispensed with?

Worthy of inquiry is the issue of whether or not there is tentativeness of administrative

action. Is private respondent precluded from enjoying the right to notice and hearing at
a later time without prejudice to him? Here lies the peculiarity and deviant characteristic
of the evaluation procedure. On one hand, there is yet no extraditee, but ironically on
the other, it results in an administrative determination which, if adverse to the person
involved, may cause his immediate incarceration. The grant of the request shall lead to
the filing of the extradition petition in court. The "accused" (as Section 2[c] of
Presidential Decree No. 1069 calls him), faces the threat of arrest, not only after the
extradition petition is filed in court, but even during the evaluation proceeding itself by
virtue of the provisional arrest allowed under the treaty and the implementing law. The
prejudice to the "accused" is thus blatant and manifest.
Plainly, the notice and hearing requirements of administrative due process cannot be
dispensed with and shelved aside.
Apart from the due process clause of the Constitution, private respondent likewise
invokes Section 7 of Article III which reads:
Sec. 7. The right of the people to information on matters of public
concern shall be recognized. Access to official records, and to
documents and papers pertaining to official acts, transactions, or
decisions, as well as to government research data used as basis for
policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law.
The above provision guarantees political rights which are available to citizens of the
Philippines, namely: (1) the right to information on matters of public concern, and (2)
the corollary right of access to official records and documents. The general right
guaranteed by said provision is the right to information on matters of public concern. In
its implementation, the right of access to official records is likewise conferred. These
cognate or related rights are "subject to limitations as may be provided by law" (Bernas,
The 1987 Phil. Constitution A Reviewer-Primer, 1997 ed., p. 104) and rely on the
premise that ultimately it is an informed and critical public opinion which alone can
protect the values of democratic government (Ibid.).
Petitioner argues that the matters covered by private respondents letter-request dated
July 1, 1999 do not fall under the guarantee of the foregoing provision since the matters
contained in the documents requested are not of public concern. On the other hand,
private respondent argues that the distinction between matters vested with public
interest and matters which are of purely private interest only becomes material when a
third person, who is not directly affected by the matters requested, invokes the right to
information. However, if the person invoking the right is the one directly affected
thereby, his right to information becomes absolute.
The concept of matters of public concern escapes exact definition. Strictly speaking,
every act of a public officer in the conduct of the governmental process is a matter of

public concern (Bernas, The 1987 Constitution of the Republic of the Philippines, 1996
ed., p. 336). This concept embraces a broad spectrum of subjects which the public may
want to know, either because these directly affect their lives or simply because such
matters arouse the interest of an ordinary citizen (Legaspi v. Civil Service
Commission, 150 SCRA 530 [1987]). Hence, the real party in interest is the people and

When the individual himself is involved in official government action because said action
has a direct bearing on his life, and may either cause him some kind of deprivation or
injury, he actually invokes the basic right to be notified under Section 1 of the Bill of
Rights and not exactly the right to information on matters of public concern. As to an
accused in a criminal proceeding, he invokes Section 14, particularly the right to be
informed of the nature and cause of the accusation against him.
The right to information is implemented by the right of access to information within the
control of the government (Bernas, The 1987 Constitution of the Republic of the
Philippines, 1996 ed., p. 337). Such information may be contained in official records, and
in documents and papers pertaining to official acts, transactions, or decisions.
In the case at bar, the papers requested by private respondent pertain to official
government action from the U. S. Government. No official action from our country has
yet been taken. Moreover, the papers have some relation to matters of foreign relations
with the U. S. Government. Consequently, if a third party invokes this constitutional
provision, stating that the extradition papers are matters of public concern since they
may result in the extradition of a Filipino, we are afraid that the balance must be tilted,
at such particular time, in favor of the interests necessary for the proper functioning of
the government. During the evaluation procedure, no official governmental action of
our own government has as yet been done; hence the invocation of the right is
premature. Later, and in contrast, records of the extradition hearing would already fall
under matters of public concern, because our government by then shall have already
made an official decision to grant the extradition request. The extradition of a fellow
Filipino would be forthcoming.
We now pass upon the final issue pertinent to the subject matter of the instant
controversy: Would private respondents entitlement to notice and hearing during the
evaluation stage of the proceedings constitute a breach of the legal duties of the
Philippine Government under the RP-Extradition Treaty? Assuming the answer is in the
affirmative, is there really a conflict between the treaty and the due process clause in
the Constitution?
First and foremost, let us categorically say that this is not the proper time to pass upon
the constitutionality of the provisions of the RP-US Extradition Treaty nor the Extradition
Law implementing the same. We limit ourselves only to the effect of the grant of the
basic rights of notice and hearing to private respondent on foreign relations.

The rule of pacta sunt servanda, one of the oldest and most fundamental maxims of
international law, requires the parties to a treaty to keep their agreement therein in
good faith. The observance of our country's legal duties under a treaty is also compelled
by Section 2, Article II of the Constitution which provides that "[t]he Philippines
renounces war as an instrument of national policy, adopts the generally accepted
principles of international law as part of the law of the land, and adheres to the policy of
peace, equality, justice, freedom, cooperation and amity with all nations." Under the
doctrine of incorporation, rules of international law form part of the law of the land and
no further legislative action is needed to make such rules applicable in the domestic
sphere (Salonga & Yap, Public International Law, 1992 ed., p. 12).
The doctrine of incorporation is applied whenever municipal tribunals (or local courts)
are confronted with situations in which there appears to be a conflict between a rule of
international law and the provisions of the constitution or statute of the local state.
Efforts should first be exerted to harmonize them, so as to give effect to both since it is
to be presumed that municipal law was enacted with proper regard for the generally
accepted principles of international law in observance of the Incorporation Clause in the
above-cited constitutional provision (Cruz, Philippine Political Law, 1996 ed., p. 55). In a
situation, however, where the conflict is irreconcilable and a choice has to be made
between a rule of international law and municipal law, jurisprudence dictates that
municipal law should be upheld by the municipal courts (Ichong vs. Hernandez, 101 Phil.
1155 [1957]; Gonzales vs. Hechanova, 9 SCRA 230 [1963]; In re: Garcia, 2 SCRA 984
[1961]) for the reason that such courts are organs of municipal law and are accordingly
bound by it in all circumstances (Salonga & Yap, op. cit., p. 13). The fact that
international law has been made part of the law of the land does not pertain to or imply
the primacy of international law over national or municipal law in the municipal sphere.
The doctrine of incorporation, as applied in most countries, decrees that rules of
international law are given equal standing with, but are not superior to, national
legislative enactments. Accordingly, the principle lex posterior derogat priori takes effect
a treaty may repeal a statute and a statute may repeal a treaty. In states where the
constitution is the highest law of the land, such as the Republic of the Philippines, both
statutes and treaties may be invalidated if they are in conflict with the constitution
(Ibid.).
In the case at bar, is there really a conflict between international law and municipal or
national law? En contrario, these two components of the law of the land are not pitted
against each other. There is no occasion to choose which of the two should be upheld.
Instead, we see a void in the provisions of the RP-US Extradition Treaty, as implemented
by Presidential Decree No. 1069, as regards the basic due process rights of a prospective
extraditee at the evaluation stage of extradition proceedings. From the procedures
earlier abstracted, after the filing of the extradition petition and during the judicial
determination of the propriety of extradition, the rights of notice and hearing are clearly
granted to the prospective extraditee. However, prior thereto, the law is silent as to
these rights. Reference to the U.S. extradition procedures also manifests this silence.

Petitioner interprets this silence as unavailability of these rights. Consequently, he

describes the evaluation procedure as an "ex parte technical assessment" of the
sufficiency of the extradition request and the supporting documents.
We disagree.
In the absence of a law or principle of law, we must apply the rules of fair play. An
application of the basic twin due process rights of notice and hearing will not go against
the treaty or the implementing law. Neither the Treaty nor the Extradition Law
precludes these rights from a prospective extraditee. Similarly, American jurisprudence
and procedures on extradition pose no proscription. In fact, in interstate extradition
proceedings as explained above, the prospective extraditee may even request for copies
of the extradition documents from the governor of the asylum state, and if he does, his
right to be supplied the same becomes a demandable right (35 C.J.S. 410).
Petitioner contends that the United States requested the Philippine Government to
prevent unauthorized disclosure of confidential information. Hence, the secrecy
surrounding the action of the Department of Justice Panel of Attorneys. The
confidentiality argument is, however, overturned by petitioners revelation that
everything it refuses to make available at this stage would be obtainable during trial.
The Department of Justice states that the U.S. District Court concerned has authorized
the disclosure of certain grand jury information. If the information is truly confidential,
the veil of secrecy cannot be lifted at any stage of the extradition proceedings. Not even
during trial.
A libertarian approach is thus called for under the premises.
One will search in vain the RP-US Extradition Treaty, the Extradition Law, as well as
American jurisprudence and procedures on extradition, for any prohibition against the
conferment of the two basic due process rights of notice and hearing during the
evaluation stage of the extradition proceedings. We have to consider similar situations
in jurisprudence for an application by analogy.
Earlier, we stated that there are similarities between the evaluation process and a
preliminary investigation since both procedures may result in the arrest of the
respondent or the prospective extraditee. In the evaluation process, a provisional arrest
is even allowed by the Treaty and the Extradition Law (Article 9, RP-US Extradition
Treaty; Sec. 20, Presidential Decree No. 1069). Following petitioners theory, because
there is no provision of its availability, does this imply that for a period of time, the
privilege of the writ of habeas corpus is suspended, despite Section 15, Article III of the
Constitution which states that "[t]he privilege of the writ of habeas corpus shall not be
suspended except in cases of invasion or rebellion when the public safety requires it"?
Petitioners theory would also infer that bail is not available during the arrest of the
prospective extraditee when the extradition petition has already been filed in court
since Presidential Decree No. 1069 does not provide therefor, notwithstanding Section
13, Article III of the Constitution which provides that "[a]ll persons, except those

charged with offenses punishable by reclusion perpetua when evidence of guilt is strong,
shall, before conviction, be bailable by sufficient sureties, or be released on
recognizance as may be provided by law. The right to bail shall not be impaired even
when the privilege of the writ of habeas corpus is suspended " Can petitioner validly
argue that since these contraventions are by virtue of a treaty and hence affecting
foreign relations, the aforestated guarantees in the Bill of Rights could thus be
subservient thereto?
The basic principles of administrative law instruct us that "the essence of due process in
administrative proceedings is an opportunity to explain ones side or an opportunity to
seek reconsideration of the actions or ruling complained of (Mirano vs. NLRC, 270 SCRA
96 [1997]; Padilla vs. NLRC, 273 SCRA 457 [1997]; PLDT vs. NLRC, 276 SCRA 1
[1997]; Helpmate, Inc. vs. NLRC, 276 SCRA 315 [1997];Aquinas School vs. Magnaye, 278
SCRA 602 [1997]; Jamer vs. NLRC, 278 SCRA 632 [1997]). In essence, procedural due
process refers to the method or manner by which the law is enforced (Corona vs. United
Harbor Pilots Association of the Phils., 283 SCRA 31 [1997]). This Court will not tolerate
the least disregard of constitutional guarantees in the enforcement of a law or treaty.
Petitioners fears that the Requesting State may have valid objections to the Requested
States non-performance of its commitments under the Extradition Treaty are
insubstantial and should not be given paramount consideration.
How then do we implement the RP-US Extradition Treaty? Do we limit ourselves to the
four corners of Presidential Decree No. 1069?
Of analogous application are the rulings in Government Service Insurance System vs.
Court of Appeals (201 SCRA 661 [1991]) and Go vs. National Police Commission (271
SCRA 447 [1997]) where we ruled that in summary proceedings under Presidential
Decree No. 807 (Providing for the Organization of the Civil Service Commission in
Accordance with Provisions of the Constitution, Prescribing its Powers and Functions
and for Other Purposes), and Presidential Decree No. 971 (Providing Legal Assistance for
Members of the Integrated National Police who may be charged for Service-Connected
Offenses and Improving the Disciplinary System in the Integrated National Police,
Appropriating Funds Therefor and for other purposes), as amended by Presidential
Decree No. 1707, although summary dismissals may be effected without the necessity
of a formal investigation, the minimum requirements of due process still operate. As
held in GSIS vs. Court of Appeals:
... [I]t is clear to us that what the opening sentence of Section 40 is
saying is that an employee may be removed or dismissed even without
formal investigation, in certain instances. It is equally clear to us that
an employee must be informed of the charges preferred against him,
and that the normal way by which the employee is so informed is by
furnishing him with a copy of the charges against him. This is a basic
procedural requirement that a statute cannot dispense with and still
remain consistent with the constitutional provision on due process.
The second minimum requirement is that the employee charged with

some misfeasance or malfeasance must have a reasonable

opportunity to present his side of the matter, that is to say, his
defenses against the charges levelled against him and to present
evidence in support of his defenses.
(at p. 671)
Said summary dismissal proceedings are also non-litigious in nature, yet we upheld the
due process rights of the respondent.
In the case at bar, private respondent does not only face a clear and present danger of
loss of property or employment, but of liberty itself, which may eventually lead to his
forcible banishment to a foreign land. The convergence of petitioners favorable action
on the extradition request and the deprivation of private respondents liberty is easily
comprehensible.
We have ruled time and again that this Courts equity jurisdiction, which is aptly
described as "justice outside legality," may be availed of only in the absence of, and
never against, statutory law or judicial pronouncements (Smith Bell & Co., Inc. vs. Court
of Appeals, 267 SCRA 530 [1997]; David-Chan vs. Court of Appeals, 268 SCRA 677
[1997]). The constitutional issue in the case at bar does not even call for "justice outside
legality," since private respondents due process rights, although not guaranteed by
statute or by treaty, are protected by constitutional guarantees. We would not be true
to the organic law of the land if we choose strict construction over guarantees against
the deprivation of liberty. That would not be in keeping with the principles of
democracy on which our Constitution is premised.
Verily, as one traverses treacherous waters of conflicting and opposing currents of
liberty and government authority, he must ever hold the oar of freedom in the stronger
arm, lest an errant and wayward course be laid.
WHEREFORE, in view of the foregoing premises, the instant petition is hereby
DISMISSED for lack of merit. Petitioner is ordered to furnish private respondent copies
of the extradition request and its supporting papers, and to grant him a reasonable
period within which to file his comment with supporting evidence. The incidents in Civil
Case No. 99-94684 having been rendered moot and academic by this decision, the same
is hereby ordered dismissed.
SO ORDERED. 6/2/00 2:12 PM
Davide, Jr., C.J., joins Mr. Justice Puno in his dissent.
Bellosillo, Purisima, Buena, and De Leon, Jr., JJ., concur.
Puno, J., please see dissent.

EN BANC
[G.R. No. 148571. September 24, 2002]
GOVERNMENT OF THE UNITED STATES OF AMERICA, represented by the Philippine
Department of Justice, petitioner, vs. Hon. GUILLERMO G. PURGANAN,
Morales, and Presiding Judge, Regional Trial Court of Manila, Branch 42; and
MARK B. JIMENEZ a.k.a. MARIO BATACAN CRESPO,respondents.
DECISION
PANGANIBAN, J.:
In extradition proceedings, are prospective extraditees entitled to notice and
hearing before warrants for their arrest can be issued? Equally important, are they
entitled to the right to bail and provisional liberty while the extradition proceedings are
pending? In general, the answer to these two novel questions is No. The explanation of
and the reasons for, as well as theexceptions to, this rule are laid out in this Decision.
The Case
Before us is a Petition for Certiorari under Rule 65 of the Rules of Court, seeking to
[1]
[2]
void and set aside the Orders dated May 23, 2001 and July 3, 2001 issued by the
[3]
Regional Trial Court (RTC) of Manila, Branch 42. The first assailed Order set for hearing
petitioners application for the issuance of a warrant for the arrest of Respondent Mark
B. Jimenez.
The second challenged Order, on the other hand, directed the issuance of a
warrant, but at the same time granted bail to Jimenez. The dispositive portion of the
Order reads as follows:
WHEREFORE, in the light of the foregoing, the [Court] finds probable cause against
respondent Mark Jimenez. Accordingly let a Warrant for the arrest of the respondent be
issued. Consequently and taking into consideration Section 9, Rule 114 of the Revised
Rules of Criminal Procedure, this Court fixes the reasonable amount of bail for
respondents temporary liberty at ONE MILLION PESOS (Php 1,000,000.00), the same to
be paid in cash.
Furthermore respondent is directed to immediately surrender to this Court his passport
and the Bureau of Immigration and Deportation is likewise directed to include the name
[4]
of the respondent in its Hold Departure List.
Essentially, the Petition prays for the lifting of the bail Order, the cancellation of
the bond, and the taking of Jimenez into legal custody.
The Facts
This Petition is really a sequel to GR No. 139465 entitled Secretary of Justice v.
[5]
Ralph C. Lantion.

[6]

Pursuant to the existing RP-US Extradition Treaty, the United States Government,
through diplomatic channels, sent to the Philippine Government Note Verbale No. 0522
dated June 16, 1999, supplemented by Note Nos. 0597, 0720 and 0809 and
accompanied by duly authenticated documents requesting the extradition of Mark B.
Jimenez, also known as Mario Batacan Crespo. Upon receipt of the Notes and
documents, the secretary of foreign affairs (SFA) transmitted them to the secretary of
justice (SOJ) for appropriate action, pursuant to Section 5 of Presidential Decree (PD)
No. 1069, also known as the Extradition Law.
Upon learning of the request for his extradition, Jimenez sought and was granted a
[7]
Temporary Restraining Order (TRO) by the RTC of Manila, Branch 25. The TRO
prohibited the Department of Justice (DOJ) from filing with the RTC a petition for his
extradition. The validity of the TRO was, however, assailed by the SOJ in a Petition
before this Court in the said GR No. 139465. Initially, the Court -- by a vote of 9-6 -dismissed the Petition. The SOJ was ordered to furnish private respondent copies of the
extradition request and its supporting papers and to grant the latter a reasonable period
[8]
within which to file a comment and supporting evidence.
Acting on the Motion for Reconsideration filed by the SOJ, this Court issued its
[9]
October 17, 2000 Resolution. By an identical vote of 9-6 -- after three justices changed
their votes -- it reconsidered and reversed its earlier Decision. It held that private
respondent was bereft of the right to notice and hearing during the evaluation stage of
the extradition process. This Resolution has become final and executory.
Finding no more legal obstacle, the Government of the United States of America,
represented by the Philippine DOJ, filed with the RTC on May 18, 2001, the appropriate
Petition for Extradition which was docketed as Extradition Case No. 01192061. The
Petition alleged, inter alia, that Jimenez was the subject of an arrest warrant issued by
the United States District Court for the Southern District of Florida on April 15,
1999. The warrant had been issued in connection with the following charges in
Indictment No. 99-00281 CR-SEITZ: (1) conspiracy to defraud the United States and to
commit certain offenses in violation of Title 18 US Code Section 371; (2) tax evasion, in
violation of Title 26 US Code Section 7201; (3) wire fraud, in violation of Title 18 US Code
Sections 1343 and 2; (4) false statements, in violation of Title 18 US Code Sections 1001
and 2; and (5) illegal campaign contributions, in violation of Title 2 US Code Sections
441b, 441f and 437g(d) and Title 18 US Code Section 2. In order to prevent the flight of
Jimenez, the Petition prayed for the issuance of an order for his immediate arrest
pursuant to Section 6 of PD No. 1069.
Before the RTC could act on the Petition, Respondent Jimenez filed before it an
[10]
Urgent Manifestation/Ex-Parte Motion, which prayed that petitioners application for
an arrest warrant be set for hearing.
In its assailed May 23, 2001 Order, the RTC granted the Motion of Jimenez and set
the case for hearing on June 5, 2001. In that hearing, petitioner manifested its
reservations on the procedure adopted by the trial court allowing the accused in an
extradition case to be heard prior to the issuance of a warrant of arrest.

After the hearing, the court a quo required the parties to submit their respective
memoranda. In his Memorandum, Jimenez sought an alternative prayer: that in case a
warrant should issue, he be allowed to post bail in the amount of P100,000.
The alternative prayer of Jimenez was also set for hearing on June 15,
2001. Thereafter, the court below issued its questioned July 3, 2001 Order, directing the
issuance of a warrant for his arrest and fixing bail for his temporary liberty at one million
[11]
pesos in cash. After he had surrendered his passport and posted the required cash
bond, Jimenez was granted provisional liberty via the challenged Order dated July 4,
[12]
2001.
Hence, this Petition.

[13]

Issues
Petitioner presents the following issues for the consideration of this Court:
I.

The public respondent acted without or in excess of jurisdiction or with

grave abuse of discretion amounting to lack or excess of jurisdiction in
adopting a procedure of first hearing a potential extraditee before issuing
an arrest warrant under Section 6 of PD No. 1069.

II. The public respondent acted without or in excess of jurisdiction or with grave abuse
of discretion amounting to lack or excess of jurisdiction in granting the prayer for bail
and in allowing Jimenez to go on provisional liberty because:
1. An extradition court has no power to authorize bail, in the absence of any
law that provides for such power.
2. Section 13, Article III (right to bail clause) of the 1987 Philippine Constitution
and Section 4, Rule 114 (Bail) of the Rules of Court, as amended, which [were] relied
upon, cannot be used as bases for allowing bail in extradition proceedings.
3. The presumption is against bail in extradition proceedings or proceedings
leading to extradition.
4. On the assumption that bail is available in extradition proceedings or
proceedings leading to extradition, bail is not a matter of right but only of discretion
upon clear showing by the applicant of the existence of special circumstances.
5. Assuming that bail is a matter of discretion in extradition proceedings, the
public respondent received no evidence of special circumstances which may justify
release on bail.
6. The risk that Jimenez will flee is high, and no special circumstance exists that
will engender a well-founded belief that he will not flee.

7. The conditions attached to the grant of bail are ineffectual and do not ensure
compliance by the Philippines with its obligations under the RP-US Extradition Treaty.
8. The Court of Appeals Resolution promulgated on May 10, 2001 in the case
entitled Eduardo T. Rodriguez et al. vs. The Hon. Presiding Judge, RTC, Branch 17,
Manila, CA-G.R. SP No. 64589, relied upon by the public respondent in granting bail, had
[14]
been recalled before the issuance of the subject bail orders.
In sum, the substantive questions that this Court will address are: (1) whether
Jimenez is entitled to notice and hearing before a warrant for his arrest can be issued,
and (2) whether he is entitled to bail and to provisional liberty while the extradition
proceedings are pending. Preliminarily, we shall take up the alleged prematurity of the
Petition for Certiorari arising from petitioners failure to file a Motion for
Reconsideration in the RTC and to seek relief in the Court of Appeals (CA), instead of in
[15]
this Court. We shall also preliminarily discuss five extradition postulates that will
guide us in disposing of the substantive issues.
The Courts Ruling
The Petition is meritorious.
Preliminary Matters
Alleged Prematurity of Present Petition
Petitioner submits the following justifications for not filing a Motion for
Reconsideration in the Extradition Court: (1) the issues were fully considered by such
court after requiring the parties to submit their respective memoranda and position
papers on the matter and thus, the filing of a reconsideration motion would serve no
useful purpose; (2) the assailed orders are a patent nullity, absent factual and legal basis
therefor; and (3) the need for relief is extremely urgent, as the passage of sufficient time
would give Jimenez ample opportunity to escape and avoid extradition; and (4) the
[16]
issues raised are purely of law.
For resorting directly to this Court instead of the CA, petitioner submits the
following reasons: (1) even if the petition is lodged with the Court of Appeals and such
appellate court takes cognizance of the issues and decides them, the parties would still
bring the matter to this Honorable Court to have the issues resolved once and for all
[and] to have a binding precedent that all lower courts ought to follow; (2) the
[17]
Honorable Court of Appeals had in one case ruled on the issue by disallowing bail but
the court below refused to recognize the decision as a judicial guide and all other courts
might likewise adopt the same attitude of refusal; and (3) there are pending issues on
bail both in the extradition courts and the Court of Appeals, which, unless guided by the
decision that this Honorable Court will render in this case, would resolve to grant bail in
favor of the potential extraditees and would give them opportunity to flee and thus,
cause adverse effect on the ability of the Philippines to comply with its obligations
[18]
under existing extradition treaties.

As a general rule, a petition for certiorari before a higher court will not prosper
unless the inferior court has been given, through a motion for reconsideration, a chance
to correct the errors imputed to it. This rule, though, has certain exceptions: (1) when
the issue raised is purely of law, (2) when public interest is involved, or (3) in case of
[19]
urgency. As a fourth exception, the Court has also ruled that the filing of a motion for
reconsideration before availment of the remedy of certiorari is not a sine qua non, when
the questions raised are the same as those that have already been squarely argued and
[20]
exhaustively passed upon by the lower court. Aside from being of this nature, the
issues in the present case also involve pure questions of law that are of public
interest. Hence, a motion for reconsideration may be dispensed with.
Likewise, this Court has allowed a direct invocation of its original jurisdiction to
issue writs of certiorari when there are special and important reasons
[21]
[22]
therefor. In Fortich v. Corona we stated:
[T]he Supreme Court has the full discretionary power to take cognizance of the petition
filed directly [before] it if compelling reasons, or the nature and importance of the
issues raised, warrant. This has been the judicial policy to be observed and which has
been reiterated in subsequent cases, namely: Uy vs. Contreras, et. al., Torres vs.
Arranz, Bercero vs. De Guzman, and, Advincula vs. Legaspi, et. al. As we have further
stated in Cuaresma:
x x x. A direct invocation of the Supreme Courts original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor, clearly
and specifically set out in the petition. This is established policy. x x x.
Pursuant to said judicial policy, we resolve to take primary jurisdiction over the present
petition in the interest of speedy justice and to avoid future litigations so as to promptly
put an end to the present controversy which, as correctly observed by petitioners, has
sparked national interest because of the magnitude of the problem created by the
issuance of the assailed resolution. Moreover, x x x requiring the petitioners to file their
petition first with the Court of Appeals would only result in a waste of time and money.
That the Court has the power to set aside its own rules in the higher interests of justice
is well-entrenched in our jurisprudence. We reiterate what we said in Piczon vs. Court of
[23]
Appeals:
Be it remembered that rules of procedure are but mere tools designed to facilitate the
attainment of justice. Their strict and rigid application, which would result in
technicalities that tend to frustrate rather than promote substantial justice, must always
be avoided. Time and again, this Court has suspended its own rules and excepted a
particular case from their operation whenever the higher interests of justice so
require. In the instant petition, we forego a lengthy disquisition of the proper procedure
that should have been taken by the parties involved and proceed directly to the merits
of the case.

In a number of other exceptional cases,

[24]

we held as follows:

This Court has original jurisdiction, concurrent with that of Regional Trial Courts and the
Court of Appeals, over petitions for certiorari, prohibition, mandamus, quo
warranto and habeas corpus, and we entertain direct resort to us in cases where special
and important reasons or exceptional and compelling circumstances justify the same.
In the interest of justice and to settle once and for all the important issue of bail in
extradition proceedings, we deem it best to take cognizance of the present case. Such
proceedings constitute a matter of first impression over which there is, as yet, no local
jurisprudence to guide lower courts.
Five Postulates of Extradition
The substantive issues raised in this case require an interpretation or construction
of the treaty and the law on extradition. A cardinal rule in the interpretation of a treaty
[25]
or a law is to ascertain and give effect to its intent. Since PD 1069 is intended as a
guide for the implementation of extradition treaties to which the Philippines is a
[26]
signatory, understanding certain postulates of extradition will aid us in properly
deciding the issues raised here.
1. Extradition Is a Major Instrument for the Suppression of Crime.
First, extradition treaties are entered into for the purpose of suppressing
[27]
[28]
[29]
crime by facilitating the arrest and the custodial transfer of a fugitive from one
state to the other.
With the advent of easier and faster means of international travel, the flight of
affluent criminals from one country to another for the purpose of committing crime and
evading prosecution has become more frequent. Accordingly, governments are
adjusting their methods of dealing with criminals and crimes that transcend
international boundaries.
Today, a majority of nations in the world community have come to look
upon extradition as the major effective instrument of international co-operation in the
[30]
suppression of crime. It is the only regular system that has been devised to return
fugitives to the jurisdiction of a court competent to try them in accordance with
[31]
municipal and international law.
An important practical effect x x x of the recognition of the principle that criminals
should be restored to a jurisdiction competent to try and punish them is that the
number of criminals seeking refuge abroad will be reduced. For to the extent that
efficient means of detection and the threat of punishment play a significant role in the
deterrence of crime within the territorial limits of a State, so the existence of effective
extradition arrangements and the consequent certainty of return to the locus delicti
commissi play a corresponding role in the deterrence of flight abroad in order to escape
the consequence of crime. x x x. From an absence of extradition arrangements flight
abroad by the ingenious criminal receives direct encouragement and thus indirectly
[32]
does the commission of crime itself.

In Secretary v. Lantion

[33]

we explained:

The Philippines also has a national interest to help in suppressing crimes and one way to
do it is to facilitate the extradition of persons covered by treaties duly entered [into] by
our government. More and more, crimes are becoming the concern of one world. Laws
involving crimes and crime prevention are undergoing universalization. One manifest
purpose of this trend towards globalization is to deny easy refuge to a criminal whose
activities threaten the peace and progress of civilized countries. It is to the great interest
of the Philippines to be part of this irreversible movement in light of its vulnerability to
crimes, especially transnational crimes.
Indeed, in this era of globalization, easier and faster international travel, and an
expanding ring of international crimes and criminals, we cannot afford to be an
isolationist state. We need to cooperate with other states in order to improve our
chances of suppressing crime in our own country.
2. The Requesting State Will Accord Due Process to the Accused
Second, an extradition treaty presupposes that both parties thereto have
examined, and that both accept and trust, each others legal system and judicial
[34]
process. More pointedly, our duly authorized representatives signature on an
extradition treaty signifies our confidence in the capacity and the willingness of the
[35]
other state to protect the basic rights of the person sought to be extradited. That
signature signifies our full faith that the accused will be given, upon extradition to the
requesting state, all relevant and basic rights in the criminal proceedings that will take
place therein; otherwise, the treaty would not have been signed, or would have been
directly attacked for its unconstitutionality.

evidence in an extradition proceeding allow admission of evidence under less stringent

standards. In terms of the quantum of evidence to be satisfied, a criminal case requires
proof beyond reasonable doubt for conviction while a fugitive may be ordered
extradited upon showing of the existence of a prima facie case. Finally, unlike in a
criminal case where judgment becomes executory upon being rendered final, in an
extradition proceeding, our courts may adjudge an individual extraditable but the
President has the final discretion to extradite him. The United States adheres to a
similar practice whereby the Secretary of State exercises wide discretion in balancing
the equities of the case and the demands of the nations foreign relations before making
the ultimate decision to extradite.
Given the foregoing, it is evident that the extradition court is not called upon to
[37]
ascertain the guilt or the innocence of the person sought to be extradited. Such
determination during the extradition proceedings will only result in needless duplication
and delay. Extradition is merely a measure of international judicial assistance through
which a person charged with or convicted of a crime is restored to a jurisdiction with the
best claim to try that person. It is not part of the function of the assisting authorities to
enter
into
questions
that
are
the
prerogative
of
that
[38]
jurisdiction. The ultimate purpose of extradition proceedings in court is only to
determine whether the extradition request complies with the Extradition Treaty, and
[39]
whether the person sought is extraditable.
4. Compliance Shall Be in Good Faith.
Fourth, our executive branch of government voluntarily entered into the
Extradition Treaty, and our legislative branch ratified it. Hence, the Treaty carries the
presumption that its implementation will serve the national interest.
[40]

3. The Proceedings Are Sui Generis

[36]

Third, as pointed out in Secretary of Justice v. Lantion, extradition proceedings

are not criminal in nature. In criminal proceedings, the constitutional rights of the
accused are at fore; in extradition which is sui generis -- in a class by itself -- they are
not.
An extradition [proceeding] is sui generis. It is not a criminal proceeding which will call
into operation all the rights of an accused as guaranteed by the Bill of Rights. To begin
with, the process of extradition does not involve the determination of the guilt or
innocence of an accused. His guilt or innocence will be adjudged in the court of the state
where he will be extradited. Hence, as a rule, constitutional rights that are only relevant
to determine the guilt or innocence of an accused cannot be invoked by an extraditee x
x x.

Fulfilling our obligations under the Extradition Treaty promotes comity with the
requesting state. On the other hand, failure to fulfill our obligations thereunder paints a
bad image of our country before the world community. Such failure would discourage
other states from entering into treaties with us, particularly an extradition treaty that
[41]
hinges on reciprocity.
Verily, we are bound by pacta sunt servanda to comply in good faith with our
[42]
obligations under the Treaty. This principle requires that we deliver the accused to
the requesting country if the conditions precedent to extradition, as set forth in the
Treaty, are satisfied. In other words, [t]he demanding government, when it has done all
that the treaty and the law require it to do, is entitled to the delivery of the accused on
the issue of the proper warrant, and the other government is under obligation to make
[43]
the surrender. Accordingly, the Philippines must be ready and in a position to deliver
the accused, should it be found proper.
5. There Is an Underlying Risk of Flight

xxxxxxxxx
There are other differences between an extradition proceeding and a criminal
proceeding. An extradition proceeding is summary in nature while criminal proceedings
involve a full-blown trial. In contradistinction to a criminal proceeding, the rules of

Fifth, persons to be extradited are presumed to be flight risks. This prima facie
[44]
presumption finds reinforcement in the experience of the executive branch: nothing
short of confinement can ensure that the accused will not flee the jurisdiction of the
requested state in order to thwart their extradition to the requesting state.

The present extradition case further validates the premise that persons sought to
be extradited have a propensity to flee. Indeed, extradition hearings would not even
begin, if only the accused were willing to submit to trial in the requesting
[45]
country. Prior acts of herein respondent -- (1) leaving the requesting state right
before the conclusion of his indictment proceedings there; and (2) remaining in the
requested state despite learning that the requesting state is seeking his return and that
the crimes he is charged with are bailable -- eloquently speak of his aversion to the
processes in the requesting state, as well as his predisposition to avoid them at all
cost. These circumstances point to an ever-present, underlying high risk of flight. He has
demonstrated that he has the capacity and the will to flee. Having fled once, what is
there to stop him, given sufficient opportunity, from fleeing a second time?
First Substantive Issue: Is Respondent Entitled to Notice and Hearing Before the
Issuance of a Warrant of Arrest?
Petitioner contends that the procedure adopted by the RTC --informing the
accused, a fugitive from justice, that an Extradition Petition has been filed against him,
and that petitioner is seeking his arrest -- gives him notice to escape and to avoid
extradition. Moreover, petitioner pleads that such procedure may set a dangerous
precedent, in that those sought to be extradited -- including terrorists, mass murderers
and war criminals -- may invoke it in future extradition cases.
On the other hand, Respondent Jimenez argues that he should not be hurriedly
and arbitrarily deprived of his constitutional right to liberty without due process. He
further asserts that there is as yet no specific law or rule setting forth the procedure
prior to the issuance of a warrant of arrest, after the petition for extradition has been
filed in court; ergo, the formulation of that procedure is within the discretion of the
presiding judge.
Both parties cite Section 6 of PD 1069 in support of their arguments. It states:
SEC. 6. Issuance of Summons; Temporary Arrest; Hearing, Service of Notices.- (1)
Immediately upon receipt of the petition, the presiding judge of the court shall, as soon
as practicable, summon the accused to appear and to answer the petition on the day
and hour fixed in the order. [H]e may issue a warrant for the immediate arrest of the
accused which may be served any where within the Philippines if it appears to the
presiding judge that the immediate arrest and temporary detention of the accused
will best serve the ends of justice. Upon receipt of the answer, or should the accused
after having received the summons fail to answer within the time fixed, the presiding
judge shall hear the case or set another date for the hearing thereof.
(2) The order and notice as well as a copy of the warrant of arrest, if issued, shall be
promptly served each upon the accused and the attorney having charge of the
case. (Emphasis ours)
Does this provision sanction RTC Judge Purganans act of immediately setting for
hearing the issuance of a warrant of arrest? We rule in the negative.

1. On the Basis of the Extradition Law

It is significant to note that Section 6 of PD 1069, our Extradition Law, uses the
word immediate to qualify the arrest of the accused. This qualification would be
rendered nugatory by setting for hearing the issuance of the arrest warrant. Hearing
[46]
[47]
entails sending notices to the opposing parties, receiving facts and arguments from
[48]
them, and giving them time to prepare and present such facts and arguments. Arrest
subsequent to a hearing can no longer be considered immediate. The law could not
have intended the word as a mere superfluity but, on the whole, as a means of
imparting a sense of urgency and swiftness in the determination of whether a warrant
of arrest should be issued.
By using the phrase if it appears, the law further conveys that accuracy is not as
important as speed at such early stage. The trial court is not expected to make
an exhaustivedetermination to ferret out the true and actual situation, immediately
upon the filing of the petition. From the knowledge and the material then available to it,
the court is expected merely to get a good first impression -- a prima facie finding -sufficient to make a speedy initial determination as regards the arrest and detention of
the accused.
Attached to the Petition for Extradition, with a Certificate of Authentication among
others, were the following: (1) Annex H, the Affidavit executed on May 26, 1999 by Mr.
Michael E. Savage -- trial attorney in the Campaign Financing Task Force of the Criminal
Division of the US Department of Justice; (2) Annexes H to G, evidentiary Appendices of
various exhibits that constituted evidence of the crimes charged in the Indictment, with
Exhibits 1 to 120 (duly authenticated exhibits that constituted evidence of the crimes
charged in the Indictment); (3) Annex BB, the Exhibit I Appendix of Witness [excerpts]
Statements Referenced in the Affidavit of Angela Byers and enclosed Statements in two
volumes; (4) Annex GG, the Exhibit J Table of Contents for Supplemental Evidentiary
Appendix with enclosed Exhibits 121 to 132; and (5) Annex MM, the Exhibit L Appendix
of Witness [excerpts] Statements Referenced in the Affidavit of Betty Steward and
[49]
enclosed Statements in two volumes.
It is evident that respondent judge could have already gotten an impression from
these records adequate for him to make an initial determination of whether the accused
was someone who should immediately be arrested in order to best serve the ends of
justice. He could have determined whether such facts and circumstances existed as
would lead a reasonably discreet and prudent person to believe that the extradition
request was prima facie meritorious. In point of fact, he actually concluded from these
supporting documents that probable cause did exist.In the second questioned Order, he
stated:
In the instant petition, the documents sent by the US Government in support of [its]
request for extradition of herein respondent are enough to convince the Court of the
[50]
existence of probable cause to proceed with the hearing against the extraditee.
We stress that the prima facie existence of probable cause for hearing the petition
and, a priori, for issuing an arrest warrant was already evident from the Petition itself

and its supporting documents. Hence, after having already determined therefrom that
a prima facie finding did exist, respondent judge gravely abused his discretion when he
[51]
set the matter for hearing upon motion of Jimenez.
Moreover, the law specifies that the court sets a hearing upon receipt of the
answer or upon failure of the accused to answer after receiving the summons. In
connection with the matter of immediate arrest, however, the word hearing is notably
absent from the provision. Evidently, had the holding of a hearing at that stage been
intended, the law could have easily so provided. It also bears emphasizing at this point
[52]
that extradition proceedings are summary in nature. Hence, the silence of the Law
and the Treaty leans to the more reasonable interpretation that there is no intention to
punctuate with a hearing every little step in the entire proceedings.
It is taken for granted that the contracting parties intend something reasonable and
something not inconsistent with generally recognized principles of International Law,
nor with previous treaty obligations towards third States. If, therefore, the meaning of a
treaty is ambiguous, the reasonable meaning is to be preferred to the unreasonable, the
[53]
more reasonable to the less reasonable x x x .
Verily, as argued by petitioner, sending to persons sought to be extradited a notice
of the request for their arrest and setting it for hearing at some future date would give
them ample opportunity to prepare and execute an escape. Neither the Treaty nor the
Law could have intended that consequence, for the very purpose of both would have
been defeated by the escape of the accused from the requested state.
2. On the Basis of the Constitution
Even Section 2 of Article III of our Constitution, which is invoked by Jimenez, does
not require a notice or a hearing before the issuance of a warrant of arrest. It provides:
Sec. 2. The right of the people to be secure in their persons, houses, papers, and effects
against unreasonable searches and seizures of whatever nature and for any purpose
shall be inviolable, and no search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after examination under oath
or affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched and the persons or things to be seized.
To determine probable cause for the issuance of arrest warrants, the Constitution
itself requires only the examination -- under oath or affirmation -- of complainants and
the witnesses they may produce. There is no requirement to notify and hear
the accused before the issuance of warrants of arrest.
[54]

In Ho v. People and in all the cases cited therein, never was a judge required to
go to the extent of conducting a hearing just for the purpose of personally determining
probable cause for the issuance of a warrant of arrest. All we required was that the
judge must have sufficient supporting documents upon which to make his independent
judgment, or at the very least, upon which to verify the findings of the prosecutor as to
[55]
the existence of probable cause.

[56]

In Webb v. De Leon, the Court categorically stated that a judge was not
supposed to conduct a hearing before issuing a warrant of arrest:
Again, we stress that before issuing warrants of arrest, judges merely determine
personally the probability, not the certainty of guilt of an accused. In doing so, judges do
not conduct a de novo hearing to determine the existence of probable cause. They just
personally review the initial determination of the prosecutor finding a probable cause to
see if it is supported by substantial evidence.
At most, in cases of clear insufficiency of evidence on record, judges merely further
[57]
examine complainants and their witnesses. In the present case, validating the act of
respondent judge and instituting the practice of hearing the accused and his witnesses
at this early stage would be discordant with the rationale for the entire system. If the
accused were allowed to be heard and necessarily to present evidence during the prima
facie determination for the issuance of a warrant of arrest, what would stop him from
presenting his entire plethora of defenses at this stage -- if he so desires -- in his effort
to negate a prima facie finding? Such a procedure could convert the determination of a
prima facie case into a full-blown trial of the entire proceedings and possibly make trial
of the main case superfluous. This scenario is also anathema to the summary nature of
extraditions.
That the case under consideration is an extradition and not a criminal action is not
sufficient to justify the adoption of a set of procedures more protective of the
accused. If a different procedure were called for at all, a more restrictive one -- not the
opposite -- would be justified in view of respondents demonstrated predisposition to
flee.
Since this is a matter of first impression, we deem it wise to restate the proper
procedure:
Upon receipt of a petition for extradition and its supporting documents, the judge
must study them and make, as soon as possible, a prima facie finding whether (a) they
are sufficient in form and substance, (b) they show compliance with the Extradition
Treaty and Law, and (c) the person sought is extraditable. At his discretion, the judge
may require the submission of further documentation or may personally examine the
affiants and witnesses of the petitioner. If, in spite of this study and examination,
[58]
no prima facie finding is possible, the petition may be dismissed at the discretion of
the judge.
On the other hand, if the presence of a prima facie case is determined, then the
magistrate must immediately issue a warrant for the arrest of the extraditee, who is at
the same time summoned to answer the petition and to appear at scheduled summary
hearings. Prior to the issuance of the warrant, the judge must not inform or notify the
potential extraditee of the pendency of the petition, lest the latter be given the
opportunity to escape and frustrate the proceedings. In our opinion, the foregoing
procedure will best serve the ends of justice in extradition cases.

Second Substantive Issue: Is Respondent Entitled to Bail?

Article III, Section 13 of the Constitution, is worded as follows:

which he is charged. He should apply for bail before the courts trying the criminal cases
against him, not before the extradition court.
No Violation of Due Process

Art. III, Sec. 13. All persons, except those charged with offenses punishable by reclusion
perpetua when evidence of guilt is strong, shall, before conviction, be bailable by
sufficient sureties, or be released on recognizance as may be provided by law. The right
to bail shall not be impaired even when the privilege of the writ of habeas corpus is
suspended. Excessive bail shall not be required.
Respondent Mark B. Jimenez maintains that this constitutional provision secures
the right to bail of all persons, including those sought to be extradited. Supposedly, the
only exceptions are the ones charged with offenses punishable with reclusion
perpetua, when evidence of guilt is strong. He also alleges the relevance to the present
[59]
case of Section 4 of Rule 114 of the Rules of Court which, insofar as practicable and
consistent with the summary nature of extradition proceedings, shall also apply
according to Section 9 of PD 1069.
On the other hand, petitioner claims that there is no provision in the Philippine
Constitution granting the right to bail to a person who is the subject of an extradition
request and arrest warrant.
Extradition Different from Ordinary Criminal Proceedings
We agree with petitioner. As suggested by the use of the word conviction, the
constitutional provision on bail quoted above, as well as Section 4 of Rule 114 of the
Rules of Court, applies only when a person has been arrested and detained for violation
of Philippine criminal laws. It does not apply to extradition proceedings, because
extradition courts do not render judgments of conviction or acquittal.
Moreover, the constitutional right to bail flows from the presumption of innocence
in favor of every accused who should not be subjected to the loss of freedom as
thereafter he would be entitled to acquittal, unless his guilt be proved beyond
[60]
reasonable doubt. It follows that the constitutional provision on bail will not apply to
a case like extradition, where the presumption of innocence is not at issue.
The provision in the Constitution stating that the right to bail shall not be impaired
even when the privilege of the writ of habeas corpus is suspended does not detract
from the rule that the constitutional right to bail is available only in criminal
proceedings. It must be noted that the suspension of the privilege of the writ of habeas
corpus finds application only to persons judicially charged for rebellion or offenses
[61]
inherent in or directly connected with invasion. Hence, the second sentence in the
constitutional provision on bail merely emphasizes the right to bail in criminal
proceedings for the aforementioned offenses. It cannot be taken to mean that the right
is available even in extradition proceedings that are not criminal in nature.
That the offenses for which Jimenez is sought to be extradited are bailable in the
United States is not an argument to grant him one in the present case. To stress,
extradition proceedings are separate and distinct from the trial for the offenses for

[62]

Respondent Jimenez cites the foreign case Paretti in arguing that,

constitutionally, [n]o one shall be deprived of x x x liberty x x x without due process of
law.
Contrary to his contention, his detention prior to the conclusion of the extradition
proceedings does not amount to a violation of his right to due process. We iterate the
[63]
familiar doctrine that the essence of due process is the opportunity to be heard but,
at the same time, point out that the doctrine does not always call for a prior opportunity
[64]
to be heard. Where the circumstances -- such as those present in an extradition case [65]
- call for it, a subsequent opportunity to be heard is enough. In the present case,
respondent will be given full opportunity to be heard subsequently, when the
extradition court hears the Petition for Extradition. Hence, there is no violation of his
right to due process and fundamental fairness.
Contrary to the contention of Jimenez, we find no arbitrariness, either, in the
immediate deprivation of his liberty prior to his being heard. That his arrest and
detention will not be arbitrary is sufficiently ensured by (1) the DOJs filing in court the
Petition with its supporting documents after a determination that the extradition
request meets the requirements of the law and the relevant treaty; (2) the extradition
judges independent prima facie determination that his arrest will best serve the ends of
justice before the issuance of a warrant for his arrest; and (3) his opportunity, once he is
under the courts custody, to apply for bail as an exception to the no-initial-bail rule.
It is also worth noting that before the US government requested the extradition of
respondent, proceedings had already been conducted in that country. But because he
left the jurisdiction of the requesting state before those proceedings could be
completed, it was hindered from continuing with the due processes prescribed under its
laws. His invocation of due process now has thus become hollow. He already had that
opportunity in the requesting state; yet, instead of taking it, he ran away.
In this light, would it be proper and just for the government to increase the risk of
violating its treaty obligations in order to accord Respondent Jimenez his personal
liberty in the span of time that it takes to resolve the Petition for Extradition? His
supposed immediate deprivation of liberty without the due process that he had
previously shunned pales against the governments interest in fulfilling its Extradition
Treaty obligations and in cooperating with the world community in the suppression of
crime. Indeed, [c]onstitutional liberties do not exist in a vacuum; the due process rights
accorded to individuals must be carefully balanced against exigent and palpable
[66]
government interests.
Too, we cannot allow our country to be a haven for fugitives, cowards and
weaklings who, instead of facing the consequences of their actions, choose to run and
hide. Hence, it would not be good policy to increase the risk of violating our treaty
obligations if, through overprotection or excessively liberal treatment, persons sought
to be extradited are able to evade arrest or escape from our custody. In the absence of

any provision -- in the Constitution, the law or the treaty -- expressly guaranteeing the
right to bail in extradition proceedings, adopting the practice of not granting them bail,
as a general rule, would be a step towards deterring fugitives from coming to the
Philippines to hide from or evade their prosecutors.
The denial of bail as a matter of course in extradition cases falls into place with and
[67]
gives life to Article 14 of the Treaty, since this practice would encourage the accused
to voluntarily surrender to the requesting state to cut short their detention
here. Likewise, their detention pending the resolution of extradition proceedings would
fall into place with the emphasis of the Extradition Law on the summary nature of
extradition cases and the need for their speedy disposition.
Exceptions to the No Bail Rule
The rule, we repeat, is that bail is not a matter of right in extradition
cases. However, the judiciary has the constitutional duty to curb grave abuse of
[68]
discretion and tyranny, as well as the power to promulgate rules to protect and
[69]
enforce constitutional rights. Furthermore, we believe that the right to due process is
broad enough to include the grant of basic fairness to extraditees. Indeed, the right to
due process extends to the life, liberty or property of every person. It is dynamic and
[70]
resilient, adaptable to every situation calling for its application.
Accordingly and to best serve the ends of justice, we believe and so hold that, after
a potential extraditee has been arrested or placed under the custody of the law, bail
may be applied for and granted as an exception, only upon a clear and convincing
showing (1) that, once granted bail, the applicant will not be a flight risk or a danger to
the community; and (2) that there exist special, humanitarian and compelling
[71]
circumstances including, as a matter of reciprocity, those cited by the highest court in
the requesting state when it grants provisional liberty in extradition cases therein.
Since this exception has no express or specific statutory basis, and since it is
derived essentially from general principles of justice and fairness, the applicant bears
the burden of proving the above two-tiered requirement with clarity, precision and
emphatic forcefulness. The Court realizes that extradition is basically an executive, not a
judicial, responsibility arising from the presidential power to conduct foreign
relations. In its barest concept, it partakes of the nature of police assistance amongst
states, which is not normally a judicial prerogative.Hence, any intrusion by the courts
into the exercise of this power should be characterized by caution, so that the vital
international and bilateral interests of our country will not be unreasonably impeded or
compromised. In short, while this Court is ever protective of the sporting idea of fair
play, it also recognizes the limits of its own prerogatives and the need to fulfill
international obligations.
Along this line, Jimenez contends that there are special circumstances that are
compelling enough for the Court to grant his request for provisional release on bail. We
have carefully examined these circumstances and shall now discuss them.

1. Alleged Disenfranchisement
While his extradition was pending, Respondent Jimenez was elected as a member
of the House of Representatives. On that basis, he claims that his detention will
disenfranchise his Manila district of 600,000 residents. We are not persuaded. In People
[72]
v. Jalosjos, the Court has already debunked the disenfranchisement argument when it
ruled thus:
When the voters of his district elected the accused-appellant to Congress, they did so
with full awareness of the limitations on his freedom of action. They did so with the
knowledge that he could achieve only such legislative results which he could accomplish
within the confines of prison. To give a more drastic illustration, if voters elect a person
with full knowledge that he is suffering from a terminal illness, they do so knowing that
at any time, he may no longer serve his full term in office.
In the ultimate analysis, the issue before us boils down to a question of constitutional
equal protection.
The Constitution guarantees: x x x nor shall any person be denied the equal protection
of laws. This simply means that all persons similarly situated shall be treated alike both
in rights enjoyed and responsibilities imposed. The organs of government may not show
any undue favoritism or hostility to any person. Neither partiality nor prejudice shall be
displayed.
Does being an elective official result in a substantial distinction that allows different
treatment? Is being a Congressman a substantial differentiation which removes the
accused-appellant as a prisoner from the same class as all persons validly confined
under law?
The performance of legitimate and even essential duties by public officers has never
been an excuse to free a person validly [from] prison. The duties imposed by the
mandate of the people are multifarious.The accused-appellant asserts that the duty to
legislate ranks highest in the hierarchy of government. The accused-appellant is only
one of 250 members of the House of Representatives, not to mention the 24 members
of the Senate, charged with the duties of legislation. Congress continues to function well
in the physical absence of one or a few of its members. Depending on the exigency of
Government that has to be addressed, the President or the Supreme Court can also be
deemed the highest for that particular duty. The importance of a function depends on
the need for its exercise. The duty of a mother to nurse her infant is most compelling
under the law of nature. A doctor with unique skills has the duty to save the lives of
those with a particular affliction. An elective governor has to serve provincial
constituents. A police officer must maintain peace and order. Never has the call of a
particular duty lifted a prisoner into a different classification from those others who are
validly restrained by law.

A strict scrutiny of classifications is essential lest[,] wittingly or otherwise, insidious

discriminations are made in favor of or against groups or types of individuals.
The Court cannot validate badges of inequality. The necessities imposed by public
welfare may justify exercise of government authority to regulate even if thereby certain
groups may plausibly assert that their interests are disregarded.
We, therefore, find that election to the position of Congressman is not a reasonable
classification in criminal law enforcement. The functions and duties of the office are not
substantial distinctions which lift him from the class of prisoners interrupted in their
freedom and restricted in liberty of movement. Lawful arrest and confinement are
germane to the purposes of the law and apply to all those belonging to the same
[73]
class.
It must be noted that even before private respondent ran for and won a
congressional seat in Manila, it was already of public knowledge that the United States
was requesting his extradition. Hence, his constituents were or should have been
prepared for the consequences of the extradition case against their representative,
including his detention pending the final resolution of the case. Premises considered
and in line with Jalosjos, we are constrained to rule against his claim that his election to
public office is by itself a compelling reason to grant him bail.
2. Anticipated Delay
Respondent Jimenez further contends that because the extradition proceedings
are lengthy, it would be unfair to confine him during the pendency of the case. Again we
are not convinced. We must emphasize that extradition cases are summary in
nature. They are resorted to merely to determine whether the extradition petition and
its annexes conform to the Extradition Treaty, not to determine guilt or
innocence. Neither is it, as a rule, intended to address issues relevant to the
constitutional rights available to the accused in a criminal action.
We are not overruling the possibility that petitioner may, in bad faith, unduly delay
the proceedings. This is quite another matter that is not at issue here. Thus, any further
discussion of this point would be merely anticipatory and academic.
However, if the delay is due to maneuverings of respondent, with all the more
reason would the grant of bail not be justified. Giving premium to delay by considering it
as a special circumstance for the grant of bail would be tantamount to giving him the
power to grant bail to himself. It would also encourage him to stretch out and
unreasonably delay the extradition proceedings even more. This we cannot allow.
3. Not a Flight Risk?
Jimenez further claims that he is not a flight risk. To support this claim, he stresses
that he learned of the extradition request in June 1999; yet, he has not fled the
country. True, he has not actually fled during the preliminary stages of the request for
his extradition. Yet, this fact cannot be taken to mean that he will not flee as the process
moves forward to its conclusion, as he hears the footsteps of the requesting

government inching closer and closer. That he has not yet fled from the Philippines
cannot be taken to mean that he will stand his ground and still be within reach of our
government if and when it matters; that is, upon the resolution of the Petition for
Extradition.
In any event, it is settled that bail may be applied for and granted by the trial court
at anytime after the applicant has been taken into custody and prior to judgment, even
after bail has been previously denied. In the present case, the extradition court may
continue hearing evidence on the application for bail, which may be granted in
accordance with the guidelines in this Decision.
Brief Refutation of Dissents
The proposal to remand this case to the extradition court, we believe, is totally
unnecessary; in fact, it is a cop-out. The parties -- in particular, Respondent Jimenez -have been given more than sufficient opportunity both by the trial court and this Court
to discuss fully and exhaustively private respondents claim to bail. As already stated, the
RTC set for hearing not only petitioners application for an arrest warrant, but also
private respondents prayer for temporary liberty. Thereafter required by the RTC were
memoranda on the arrest, then position papers on the application for bail, both of
which were separately filed by the parties.
This Court has meticulously pored over the Petition, the Comment, the Reply, the
lengthy Memoranda and the Position Papers of both parties. Additionally, it has
patiently heard them in Oral Arguments, a procedure not normally observed in the great
majority of cases in this Tribunal. Moreover, after the Memos had been submitted, the
parties -- particularly the potential extraditee -- have bombarded this Court with
additional pleadings -- entitled Manifestations by both parties and CounterManifestation by private respondent -- in which the main topic was Mr. Jimenezs plea
for bail.
A remand would mean that this long, tedious process would be repeated in its
entirety. The trial court would again hear factual and evidentiary matters. Be it noted,
however, that, in all his voluminous pleadings and verbal propositions, private
respondent has not asked for a remand. Evidently, even he realizes that there is
absolutely no need to rehear factual matters.Indeed, the inadequacy lies not in
the factual presentation
of
Mr.
Jimenez. Rather,
it
lies
in
his legal arguments. Remanding the case will not solve this utter lack of persuasion and
strength in his legal reasoning.
In short, this Court -- as shown by this Decision and the spirited Concurring,
Separate and Dissenting Opinions written by the learned justices themselves -- has
exhaustively deliberated and carefully passed upon all relevant questions in this
case. Thus, a remand will not serve any useful purpose; it will only further delay these
[74]
already very delayed proceedings, which our Extradition Law requires to
be summary in character. What we need now is prudent and deliberate speed, not
unnecessary and convoluted delay. What is needed is a firm decision on the merits, not
a circuitous cop-out.

Then, there is also the suggestion that this Court is allegedly disregarding basic
freedoms when a case is one of extradition. We believe that this charge is not only
baseless, but also unfair. Suffice it to say that, in its length and breath, this Decision has
taken special cognizance of the rights to due process and fundamental fairness of
potential extraditees.
Summation
As we draw to a close, it is now time to summarize and stress these ten points:
1. The ultimate purpose of extradition proceedings is to determine whether the
request expressed in the petition, supported by its annexes and the evidence that may
be adduced during the hearing of the petition, complies with the Extradition Treaty and
Law; and whether the person sought is extraditable. The proceedings are intended
merely to assist the requesting state in bringing the accused -- or the fugitive who has
illegally escaped -- back to its territory, so that the criminal process may proceed
therein.
2. By entering into an extradition treaty, the Philippines is deemed to have reposed
its trust in the reliability or soundness of the legal and judicial system of its treaty
partner, as well as in the ability and the willingness of the latter to grant basic rights to
the accused in the pending criminal case therein.
3. By nature then, extradition proceedings are not equivalent to a criminal case in
which guilt or innocence is determined. Consequently, an extradition case is not one in
which the constitutional rights of the accused are necessarily available. It is more akin, if
at all, to a courts request to police authorities for the arrest of the accused who is at
large or has escaped detention or jumped bail. Having once escaped the jurisdiction of
the requesting state, the reasonable prima facie presumption is that the person would
escape again if given the opportunity.
4. Immediately upon receipt of the petition for extradition and its supporting
documents, the judge shall make a prima facie finding whether the petition is sufficient
in form and substance, whether it complies with the Extradition Treaty and Law, and
whether the person sought is extraditable. The magistrate has discretion to require the
petitioner to submit further documentation, or to personally examine the affiants or
witnesses. If convinced that a prima facie case exists, the judge immediately issues a
warrant for the arrest of the potential extraditee and summons him or her to answer
and to appear at scheduled hearings on the petition.
5. After being taken into custody, potential extraditees may apply for bail. Since
the applicants have a history of absconding, they have the burden of showing that (a)
there is no flight risk and no danger to the community; and (b) there exist special,
humanitarian or compelling circumstances. The grounds used by the highest court in the
requesting state for the grant of bail therein may be considered, under the principle of
reciprocity as a special circumstance. In extradition cases, bail is not a matter of right; it
is subject to judicial discretion in the context of the peculiar facts of each case.
6. Potential extraditees are entitled to the rights to due process and to
fundamental fairness. Due process does not always call for a prior opportunity to be

heard. A subsequentopportunity is sufficient due to the flight risk involved. Indeed,

available during the hearings on the petition and the answer is the full chance to be
heard and to enjoy fundamental fairness that is compatible with the summary nature of
extradition.
7. This Court will always remain a protector of human rights, a bastion of liberty, a
bulwark of democracy and the conscience of society. But it is also well aware of the
limitations of its authority and of the need for respect for the prerogatives of the other
co-equal and co-independent organs of government.
8. We realize that extradition is essentially an executive, not a judicial,
responsibility arising out of the presidential power to conduct foreign relations and to
implement treaties. Thus, the Executive Department of government has broad
discretion in its duty and power of implementation.
9. On the other hand, courts merely perform oversight functions and exercise
review authority to prevent or excise grave abuse and tyranny. They should not allow
contortions, delays and over-due process every little step of the way, lest
these summary extradition proceedings become not only inutile but also sources of
international embarrassment due to our inability to comply in good faith with a treaty
partners simple request to return a fugitive. Worse, our country should not be
converted into a dubious haven where fugitives and escapees can unreasonably delay,
mummify, mock, frustrate, checkmate and defeat the quest for bilateral justice and
international cooperation.
10. At bottom, extradition proceedings should be conducted with all deliberate
speed to determine compliance with the Extradition Treaty and Law; and, while
safeguarding
basic
individual
rights,
to
avoid
the
legalistic contortions, delays and technicalities that may negate that purpose.
WHEREFORE, the Petition is GRANTED. The assailed RTC Order dated May 23, 2001
is hereby declared NULL and VOID, while the challenged Order dated July 3, 2001 is SET
ASIDE insofar as it granted bail to Respondent Mark Jimenez. The bail bond posted by
private respondent is CANCELLED. The Regional Trial Court of Manila is directed to
conduct the extradition proceedings before it, with all deliberate speed pursuant to the
spirit and the letter of our Extradition Treaty with the United States as well as our
Extradition Law. No costs.
SO ORDERED.
Austria-Martinez, Corona, and Carpio-Morales, JJ., concur.
Davide, Jr., C.J., Mendoza, and Callejo, Sr., joins in the concurring opinion of Justice
Carpio.
Bellosillo, J., see Separate Opinion.
Puno, J., see Separate Opinion.
Vitug, J., see Dissenting Opinion.
Quisumbing, J., concur in the separate opinion of Justice Puno.
Ynares-Santiago, J., see Dissenting Opinion.
Sandoval-Gutierrez, J., join in the Separate Opinion of Justice Ynares-Santiago.
Carpio, J., see concurring Opinion.

Republic of the Philippines

SUPREME COURT
Manila

On September 13, 1999, the DOJ received from the Hong Kong Department of Justice a
request for the provisional arrest of private respondent. The DOJ then forwarded the
request to the National Bureau of Investigation (NBI) which, in turn, filed with the RTC of
Manila, Branch 19 an application for the provisional arrest of private respondent.

EN BANC
G.R. No. 153675

April 19, 2007

GOVERNMENT OF HONG KONG SPECIAL ADMINISTRATIVE REGION, represented by

the Philippine Department of Justice, Petitioner,
vs.
HON. FELIXBERTO T. OLALIA, JR. and JUAN ANTONIO MUOZ, Respondents.
DECISION
SANDOVAL-GUTIERREZ, J.:
For our resolution is the instant Petition for Certiorari under Rule 65 of the 1997 Rules
of Civil Procedure, as amended, seeking to nullify the two Orders of the Regional Trial
Court (RTC), Branch 8, Manila (presided by respondent Judge Felixberto T. Olalia, Jr.)
issued in Civil Case No. 99-95773. These are: (1) the Order dated December 20, 2001
allowing Juan Antonio Muoz, private respondent, to post bail; and (2) the Order dated
April 10, 2002 denying the motion to vacate the said Order of December 20, 2001 filed
by the Government of Hong Kong Special Administrative Region, represented by the
Philippine Department of Justice (DOJ), petitioner. The petition alleges that both Orders
were issued by respondent judge with grave abuse of discretion amounting to lack or
excess of jurisdiction as there is no provision in the Constitution granting bail to a
potential extraditee.
The facts are:
On January 30, 1995, the Republic of the Philippines and the then British Crown Colony
of Hong Kong signed an "Agreement for the Surrender of Accused and Convicted
Persons." It took effect on June 20, 1997.
On July 1, 1997, Hong Kong reverted back to the Peoples Republic of China and became
the Hong Kong Special Administrative Region.
Private respondent Muoz was charged before the Hong Kong Court with three (3)
counts of the offense of "accepting an advantage as agent," in violation of Section 9 (1)
(a) of the Prevention of Bribery Ordinance, Cap. 201 of Hong Kong. He also faces seven
(7) counts of the offense of conspiracy to defraud, penalized by the common law of
Hong Kong. On August 23, 1997 and October 25, 1999, warrants of arrest were issued
against him. If convicted, he faces a jail term of seven (7) to fourteen (14) years for each
charge.

On September 23, 1999, the RTC, Branch 19, Manila issued an Order of Arrest against
private respondent. That same day, the NBI agents arrested and detained him.
On October 14, 1999, private respondent filed with the Court of Appeals a petition for
certiorari, prohibition andmandamus with application for preliminary mandatory
injunction and/or writ of habeas corpus questioning the validity of the Order of Arrest.
On November 9, 1999, the Court of Appeals rendered its Decision declaring the Order of
Arrest void.
On November 12, 1999, the DOJ filed with this Court a petition for review on certiorari,
docketed as G.R. No. 140520, praying that the Decision of the Court of Appeals be
reversed.
On December 18, 2000, this Court rendered a Decision granting the petition of the DOJ
and sustaining the validity of the Order of Arrest against private respondent. The
Decision became final and executory on April 10, 2001.
Meanwhile, as early as November 22, 1999, petitioner Hong Kong Special Administrative
Region filed with the RTC of Manila a petition for the extradition of private respondent,
docketed as Civil Case No. 99-95733, raffled off to Branch 10, presided by Judge Ricardo
Bernardo, Jr. For his part, private respondent filed, in the same case,-a petition for
bail which was opposed by petitioner.
After hearing, or on October 8, 2001, Judge Bernardo, Jr. issued an Order denying the
petition for bail, holding that there is no Philippine law granting bail in extradition cases
and that private respondent is a high "flight risk."
On October 22, 2001, Judge Bernardo, Jr. inhibited himself from further hearing Civil
Case No. 99-95733. It was then raffled off to Branch 8 presided by respondent judge.
On October 30, 2001, private respondent filed a motion for reconsideration of the Order
denying his application for bail. This was granted by respondent judge in an Order dated
December 20, 2001 allowing private respondent to post bail, thus:
In conclusion, this Court will not contribute to accuseds further erosion of civil liberties.
The petition for bail is granted subject to the following conditions:
1. Bail is set at Php750,000.00 in cash with the condition that accused hereby
undertakes that he will appear and answer the issues raised in these

proceedings and will at all times hold himself amenable to orders and
processes of this Court, will further appear for judgment. If accused fails in this
undertaking, the cash bond will be forfeited in favor of the government;
2. Accused must surrender his valid passport to this Court;
3. The Department of Justice is given immediate notice and discretion of filing
its own motion for hold departure order before this Court even in extradition
proceeding; and
4. Accused is required to report to the government prosecutors handling this
case or if they so desire to the nearest office, at any time and day of the week;
and if they further desire, manifest before this Court to require that all the
assets of accused, real and personal, be filed with this Court soonest, with the
condition that if the accused flees from his undertaking, said assets be forfeited
in favor of the government and that the corresponding lien/annotation be
noted therein accordingly.

In Government of United States of America v. Hon. Guillermo G. Purganan, Presiding

Judge, RTC of Manila, Branch 42, and Mark B. Jimenez, a.k.a. Mario Batacan
1
Crespo, this Court, speaking through then Associate Justice Artemio V. Panganiban,
later Chief Justice, held that the constitutional provision on bail does not apply to
extradition proceedings. It is "available only in criminal proceedings," thus:
x x x. As suggested by the use of the word "conviction," the constitutional provision on
bail quoted above, as well as Section 4, Rule 114 of the Rules of Court, applies only
when a person has been arrested and detained for violation of Philippine criminal laws.
It does not apply to extradition proceedings because extradition courts do not render
judgments of conviction or acquittal.
Moreover, the constitutional right to bail "flows from the presumption of innocence in
favor of every accused who should not be subjected to the loss of freedom as thereafter
he would be entitled to acquittal, unless his guilt be proved beyond reasonable doubt"
(De la Camara v. Enage, 41 SCRA 1, 6, September 17, 1971, per Fernando,J., later CJ). It
follows that the constitutional provision on bail will not apply to a case like extradition,
where the presumption of innocence is not at issue.

SO ORDERED.
On December 21, 2001, petitioner filed an urgent motion to vacate the above Order, but
it was denied by respondent judge in his Order dated April 10, 2002.
Hence, the instant petition. Petitioner alleged that the trial court committed grave
abuse of discretion amounting to lack or excess of jurisdiction in admitting private
respondent to bail; that there is nothing in the Constitution or statutory law providing
that a potential extraditee has a right to bail, the right being limited solely to criminal
proceedings.
In his comment on the petition, private respondent maintained that the right to bail
guaranteed under the Bill of Rights extends to a prospective extraditee; and that
extradition is a harsh process resulting in a prolonged deprivation of ones liberty.
Section 13, Article III of the Constitution provides that the right to bail shall not be
impaired, thus:
Sec. 13. All persons, except those charged with offenses punishable by reclusion
perpetua when evidence of guilt is strong, shall, before conviction, be bailable by
sufficient sureties, or be released on recognizance as may be provided by law. The right
to bail shall not be impaired even when the privilege of the writ of habeas corpus is
suspended. Excessive bail shall not be required.
Jurisprudence on extradition is but in its infancy in this jurisdiction. Nonetheless, this is
not the first time that this Court has an occasion to resolve the question of whether a
prospective extraditee may be granted bail.

The provision in the Constitution stating that the "right to bail shall not be impaired
even when the privilege of the writ of habeas corpus is suspended" does not detract
from the rule that the constitutional right to bail is available only in criminal
proceedings. It must be noted that the suspension of the privilege of the writ of habeas
corpusfinds application "only to persons judicially charged for rebellion or offenses
inherent in or directly connected with invasion" (Sec. 18, Art. VIII, Constitution). Hence,
the second sentence in the constitutional provision on bail merely emphasizes the right
to bail in criminal proceedings for the aforementioned offenses. It cannot be taken to
mean that the right is available even in extradition proceedings that are not criminal in
nature.
At first glance, the above ruling applies squarely to private respondents case. However,
this Court cannot ignore the following trends in international law: (1) the growing
importance of the individual person in public international law who, in the 20th century,
has gradually attained global recognition; (2) the higher value now being given to
human rights in the international sphere; (3) the corresponding duty of countries to
observe these universal human rights in fulfilling their treaty obligations; and (4) the
duty of this Court to balance the rights of the individual under our fundamental law, on
one hand, and the law on extradition, on the other.
The modern trend in public international law is the primacy placed on the worth of
the individual person and the sanctity of human rights. Slowly, the recognition that the
individual person may properly be a subject of international law is now taking root. The
vulnerable doctrine that the subjects of international law are limited only to states was
dramatically eroded towards the second half of the past century. For one, the
Nuremberg and Tokyo trials after World War II resulted in the unprecedented spectacle
of individual defendants for acts characterized as violations of the laws of war, crimes

against peace, and crimes against humanity. Recently, under the Nuremberg principle,
Serbian leaders have been persecuted for war crimes and crimes against humanity
committed in the former Yugoslavia. These significant events show that the individual
person is now a valid subject of international law.
On a more positive note, also after World War II, both international organizations and
states gave recognition and importance to human rights. Thus, on December 10, 1948,
the United Nations General Assembly adopted the Universal Declaration of Human
Rights in which the right to life, liberty and all the other fundamental rights of every
person were proclaimed. While not a treaty, the principles contained in the said
Declaration are now recognized as customarily binding upon the members of the
2
international community. Thus, in Mejoff v. Director of Prisons, this Court, in granting
3
bail to a prospective deportee, held that under the Constitution, the principles set
forth in that Declaration are part of the law of the land. In 1966, the UN General
Assembly also adopted the International Covenant on Civil and Political Rights which the
Philippines signed and ratified. Fundamental among the rights enshrined therein are the
rights of every person to life, liberty, and due process.
The Philippines, along with the other members of the family of nations, committed to
uphold the fundamental human rights as well as value the worth and dignity of every
person. This commitment is enshrined in Section II, Article II of our Constitution which
provides: "The State values the dignity of every human person and guarantees full
respect for human rights." The Philippines, therefore, has the responsibility of
protecting and promoting the right of every person to liberty and due process, ensuring
that those detained or arrested can participate in the proceedings before a court, to
enable it to decide without delay on the legality of the detention and order their release
if justified. In other words, the Philippine authorities are under obligation to make
available to every person under detention such remedies which safeguard their
fundamental right to liberty. These remedies include the right to be admitted to bail.
While this Court in Purganan limited the exercise of the right to bail to criminal
proceedings, however, in light of the various international treaties giving recognition
and protection to human rights, particularly the right to life and liberty, a reexamination
of this Courts ruling in Purganan is in order.
First, we note that the exercise of the States power to deprive an individual of
his liberty is not necessarily limited to criminal proceedings. Respondents in
4
administrative proceedings, such as deportation and quarantine, have likewise
been detained.
Second, to limit bail to criminal proceedings would be to close our eyes to our
jurisprudential history. Philippine jurisprudence has not limited the exercise of
the right to bail to criminal proceedings only. This Court has admitted to bail
persons who are not involved in criminal proceedings. In fact, bail has been
allowed in this jurisdiction to persons in detention during the pendency of
administrative proceedings, taking into cognizance the obligation of the
Philippines under international conventions to uphold human rights.

The 1909 case of US v. Go-Sioco is illustrative. In this case, a Chinese facing deportation
for failure to secure the necessary certificate of registration was granted bail pending his
appeal. After noting that the prospective deportee had committed no crime, the Court
opined that "To refuse him bail is to treat him as a person who has committed the most
serious crime known to law;" and that while deportation is not a criminal proceeding,
some of the machinery used "is the machinery of criminal law." Thus, the provisions
relating to bail was applied to deportation proceedings.
6

In Mejoff v. Director of Prisons and Chirskoff v. Commission of Immigration, this Court

ruled that foreign nationals against whom no formal criminal charges have been filed
may be released on bail pending the finality of an order of deportation. As previously
stated, the Court in Mejoff relied upon the Universal declaration of Human Rights in
sustaining the detainees right to bail.
If bail can be granted in deportation cases, we see no justification why it should not also
be allowed in extradition cases. Likewise, considering that the Universal Declaration of
Human Rights applies to deportation cases, there is no reason why it cannot be invoked
in extradition cases. After all, both are administrative proceedings where the innocence
or guilt of the person detained is not in issue.
Clearly, the right of a prospective extraditee to apply for bail in this jurisdiction must be
viewed in the light of the various treaty obligations of the Philippines concerning respect
for the promotion and protection of human rights. Under these treaties, the
presumption lies in favor of human liberty. Thus, the Philippines should see to it that the
right to liberty of every individual is not impaired.
Section 2(a) of Presidential Decree (P.D.) No. 1069 (The Philippine Extradition Law)
defines "extradition" as "the removal of an accused from the Philippines with the object
of placing him at the disposal of foreign authorities to enable the requesting state or
government to hold him in connection with any criminal investigation directed against
him or the execution of a penalty imposed on him under the penal or criminal law of the
requesting state or government."
Extradition has thus been characterized as the right of a foreign power, created by
treaty, to demand the surrender of one accused or convicted of a crime within its
territorial jurisdiction, and the correlative duty of the other state to surrender him to
8
9
the demanding state. It is not a criminal proceeding. Even if the potential extraditee is
a criminal, an extradition proceeding is not by its nature criminal, for it is not
10
punishment for a crime, even though such punishment may follow extradition. It is sui
11
generis, tracing its existence wholly to treaty obligations between different nations. It
12
is not a trial to determine the guilt or innocence of the potential extraditee. Nor is it
13
a full-blown civil action, but one that is merely administrative in character. Its object is
to prevent the escape of a person accused or convicted of a crime and to secure his
14
return to the state from which he fled, for the purpose of trial or punishment.

But while extradition is not a criminal proceeding, it is characterized by the following: (a)
it entails a deprivation of liberty on the part of the potential extraditee and (b) the
means employed to attain the purpose of extradition is also "the machinery of
criminal law." This is shown by Section 6 of P.D. No. 1069 (The Philippine Extradition
Law) which mandates the "immediate arrest and temporary detention of the accused"
if such "will best serve the interest of justice." We further note that Section 20 allows
the requesting state "in case of urgency" to ask for the "provisional arrest of the
accused, pending receipt of the request for extradition;" and that release from
provisional arrest "shall not prejudice re-arrest and extradition of the accused if a
request for extradition is received subsequently."
Obviously, an extradition proceeding, while ostensibly administrative, bears all earmarks
of a criminal process. A potential extraditee may be subjected to arrest, to a prolonged
restraint of liberty, and forced to transfer to the demanding state following the
proceedings. "Temporary detention" may be a necessary step in the process of
extradition, but the length of time of the detention should be reasonable.
Records show that private respondent was arrested on September 23, 1999, and
remained incarcerated until December 20, 2001, when the trial court ordered his
admission to bail. In other words, he had been detained for over two (2) years without
having been convicted of any crime. By any standard, such an extended period of
detention is a serious deprivation of his fundamental right to liberty. In fact, it was this
prolonged deprivation of liberty which prompted the extradition court to grant him bail.
While our extradition law does not provide for the grant of bail to an extraditee,
however, there is no provision prohibiting him or her from filing a motion for bail, a
right to due process under the Constitution.
The applicable standard of due process, however, should not be the same as that in
criminal proceedings. In the latter, the standard of due process is premised on the
presumption of innocence of the accused. As Purganancorrectly points out, it is from
this major premise that the ancillary presumption in favor of admitting to bail arises.
Bearing in mind the purpose of extradition proceedings, the premise behind the
issuance of the arrest warrant and the "temporary detention" is the possibility of flight
of the potential extraditee. This is based on the assumption that such extraditee is a
15
fugitive from justice. Given the foregoing, the prospective extraditee thus bears
the onus probandi of showing that he or she is not a flight risk and should be granted
bail.
The time-honored principle of pacta sunt servanda demands that the Philippines honor
its obligations under the Extradition Treaty it entered into with the Hong Kong Special
Administrative Region. Failure to comply with these obligations is a setback in our
foreign relations and defeats the purpose of extradition. However, it does not
necessarily mean that in keeping with its treaty obligations, the Philippines should
diminish a potential extraditees rights to life, liberty, and due process. More so, where
these rights are guaranteed, not only by our Constitution, but also by international

conventions, to which the Philippines is a party. We should not, therefore, deprive an

extraditee of his right to apply for bail, provided that a certain standard for the grant is
satisfactorily met.
An extradition proceeding being sui generis, the standard of proof required in granting
or denying bail can neither be the proof beyond reasonable doubt in criminal cases nor
the standard of proof of preponderance of evidence in civil cases. While administrative
in character, the standard of substantial evidence used in administrative cases cannot
likewise apply given the object of extradition law which is to prevent the prospective
extraditee from fleeing our jurisdiction. In his Separate Opinion in Purganan, then
Associate Justice, now Chief Justice Reynato S. Puno, proposed that a new standard
which he termed "clear and convincing evidence" should be used in granting bail in
extradition cases. According to him, this standard should be lower than proof beyond
reasonable doubt but higher than preponderance of evidence. The potential extraditee
must prove by "clear and convincing evidence" that he is not a flight risk and will abide
with all the orders and processes of the extradition court.
In this case, there is no showing that private respondent presented evidence to show
that he is not a flight risk. Consequently, this case should be remanded to the trial court
to determine whether private respondent may be granted bail on the basis of "clear and
convincing evidence."
WHEREFORE, we DISMISS the petition. This case is REMANDED to the trial court to
determine whether private respondent is entitled to bail on the basis of "clear and
convincing evidence." If not, the trial court should order the cancellation of his bail bond
and his immediate detention; and thereafter, conduct the extradition proceedings with
dispatch.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

1) that "petitioners' failure to enroll for the first semester of the school year 1984-1985
is due to their own fault and not because of their allegedexercise of their constitutional
and human rights;"

EN BANC

2) that petitioner Urbiztondo, sought to re-enroll only on July 5, 1986 "when the
enrollment period was already closed;"

G.R. No. L-68288 July 11, 1986

DIOSDADO GUZMAN, ULYSSES URBIZTONDO, and ARIEL RAMACULA, petitioners,
vs.
NATIONAL UNIVERSITY and DOMINGO L. JHOCSON in his capacity as President of
National University,respondents.
Efren H. Mercado and Haydee Yorac for petitioners.
Samson S. Alcantara for respondents.
NARVASA, J.:
Petitioners Diosdado Guzman, Ulysses Urbiztondo and Ariel Ramacula, students of
respondent National University, have come to this Court to seek relief from what they
describe as their school's "continued and persistent refusal to allow them to enrol." In
their petition "for extraordinary legal and equitable remedies with prayer for
preliminary mandatory injunction" dated August 7, 1984, they allege:
1) that respondent University's avowed reason for its refusal to reenroll them in their respective courses is "the latter's participation in
peaceful mass actions within the premises of the University.
2) that this "attitude of the (University) is simply a continuation of its
cavalier if not hostile attitude to the student's exercise of their basic
constitutional and human rights already recorded in Rockie C. San Juan
vs. National University, S.C. G.R. No. 65443 (1983) and its utter
contempt for the principle of due process of law to the prejudice of
petitioners;" and
3) that "in effect petitioners are subjected to the extreme penalty of
expulsion without cause or if there be any, without being informed of
such cause and without being afforded the opportunity to defend
themselves. Berina v. Philippine Maritime Institute (117 SCRA 581
[1983]).
In the comment filed on September 24, 1986 for respondent University and its President
1
pursuant to this Court's requirement therefor , respondents make the claim:

3) that as regards petitioner Guzman, his "academic showing" was "poor", "due to his
activities in leading boycotts of classes"; that when his father was notified of this
development sometime in August, 1982, the latter had demanded that his son "reform
or else we will recall him to the province"; that Guzman was one of the petitioners in
G.R. No. 65443 entitled "Rockie San Juan, et al. vs. National University, et al.," at the
hearing of which on November 23, 1983 this Court had admonished "the students
involved (to) take advantage and make the most of the opportunity given to them to
study;" that Guzman "however continued to lead or actively participate in activities
within the university premises, conducted without prior permit from school authorities,
that disturbed or disrupted classes therein;" that moreover, Guzman "is facing criminal
charges for malicious mischief before the Metropolitan Trial Court of Manila (Crim. Case
No. 066446) in connection with the destruction of properties of respondent University
on September 12, 1983 ", and "is also one of the defendants in Civil Case No. 8320483 of
the Regional Trial Court of Manila entitled 'National University, Inc. vs. Rockie San Juan
et al.' for damages arising from destruction of university properties
4) that as regards petitioner Ramacula, like Guzman "he continued to lead or actively
participate, contrary to the spirit of the Resolution dated November 23, 1983 of this ...
Court (in G.R. No. 65443 in which he was also one of the petitioners) and to university
rules and regulations, within university premises but without permit from university
officials in activities that disturbed or disrupted classes;" and
5) that petitioners have "failures in their records, (and) are not of good scholastic
standing. "
Respondents close their comment with the following assertions, to wit:
1) By their actuations, petitioners must be deemed to have forfeited their privilege, if
any, to seek enrollment in respondent university. The rights of respondent university, as
an institution of higher learning, must also be respected. It is also beyond
comprehension why petitioners, who continually despise and villify respondent
university and its officials and faculty members, should persist in seeking enrollment in
an institution that they hate.
2) Under the circumstances, and without regard to legal technicalities, it is not to the
best interest of all concerned that petitioners be allowed to enroll in respondent
university.

3) In any event, petitioners' enrollment being on the semestral basis, respondents

cannot be compelled to enroll them after the end of the semester.
On October 2, 1984 this Court issued a resolution reading as follows:
... Acting on the Comment submitted by respondent, the Court
Resolved to NOTE the same and to require a REPLY to such Comment.
The Court further Resolved to ISSUE a MANDATORY INJUNCTION,
enjoining respondent to allow the enrolment of petitioners for the
coming semester without prejudice to any disciplinary proceeding to
which any or all of them may be subjected with their right to lawful
defense recognized and respected. As regards petitioner Diosdado
Guzman, even if it be a fact that there is a pending criminal charge
against him for malicious mischief, the Court nonetheless is of the
opinion that, as above-noted, without prejudice to the continuation of
any disciplinary proceeding against him, that he be allowed to resume
his studies in the meanwhile. As shown in Annex 2 of the petition
itself, Mr. Juan P. Guzman, father of said petitioner, is extending full
cooperation with petitioners to assure that whatever protest or
grievance petitioner Guzman may have would be ventilated in a lawful
and peaceful manner.
Petitioners' REPLY inter alia
1) denied that Urbiztondo attempted to enroll only on July 5, 1984 (when enrollment
was already closed), it being alleged that "while he did try to enroll that day, he also
attempted to do so several times before that date, all to no avail, because respondents
... persistently refused to allow him to do so" respondents' ostensible reason being that
Urbiztondo (had) participated in mass actions ... within the school premises," although
there were no existing disciplinary charge against petitioner Urbiztondo" at the time;
2

2) asserted that "neither the text nor the context of the resolution justifies the
conclusion that "petitioners' right to exercise their constitutional freedoms" had thereby
been restricted or limited; and
3) alleged that "the holding of activities (mass action) in the school premises without the
permission of the school ... can be explained by the fact that the respondents
persistently refused to issue such permit repeatedly sought by the students. "
On November 23, 1984, this Court promulgated another resolution, this time reading as
follows:
... The Court, after considering the pleadings filed and deliberating on
the issues raised in the petition for extraordinary legal and equitable
remedies with prayer for preliminary mandatory injunction as well as
the respondents' comment on the petition and the reply of counsel for

petitioners to the respondents' comment, Resolved to (a) give DUE

COURSE to the petition; (b) consider the respondents' comment as
ANSWER to the petition; and (c) require the parties to file their
respective MEMORANDA within twenty (20) days from notice. ... .
Immediately apparent from a reading of respondents' comment and memorandum is
the fact that they had never conducted proceedings of any sort to determine whether or
not petitioners-students had indeed led or participated "in activities within the
university premises, conducted without prior permit from school authorities, that
3
disturbed or disrupted classes therein" or perpetrated acts of "vandalism, coercion and
intimidation, slander, noise barrage and other acts showing disdain for and defiance of
4
University authority." Parenthetically, the pendency of a civil case for damages and a
criminal case for malicious mischief against petitioner Guzman, cannot, without more,
furnish sufficient warrant for his expulsion or debarment from re-enrollment. Also
apparent is the omission of respondents to cite this Court to any duly published rule of
theirs by which students may be expelled or refused re-enrollment for poor scholastic
standing.
5

Under the Education Act of 1982, the petitioners, as students, have the right among
others "to freely choose their field of study subject to existing curricula and to continue
their course therein up to graduation, except in case of academic deficiency, or violation
6
of disciplinary regulations." Petitioners were being denied this right, or being
disciplined, without due process, in violation of the admonition in the Manual of
7
Regulations for Private Schools that "(n)o penalty shall be imposed upon any student
except for cause as defined in ... (the) Manual and/or in the school rules and regulations
8
as duly promulgated and only after due investigation shall have been conducted." This
9
Court is therefore constrained, as in Berina v. Philippine Maritime Institute, to declare
illegal this act of respondents of imposing sanctions on students without due
investigation.
Educational institutions of course have the power to "adopt and enforce such rules as
may be deemed expedient for ... (its) government, ... (this being)" incident to the very
object of incorporation, and indispensable to the successful management of the
10
college." The rules may include those governing student discipline. Indeed, the
maintenance of "good school discipline" is a duty specifically enjoined on "every private
11
school" by the Manual of Regulations for Private Schools; and in this connection, the
Manual further provides that... The school rules governing discipline and the corresponding
sanctions therefor must be clearly specified and defined in writing and
made known to the students and/or their parents or guardians.
Schools shall have the authority and prerogative to promulgate such
rules and regulations as they may deem necessary from time to time
effective as of the date of their promulgation unless otherwise
12
specified.

But, to repeat, the imposition of disciplinary sanctions requires observance of

procedural due process. And it bears stressing that due process in disciplinary cases
involving students does not entail proceedings and hearings similar to those prescribed
for actions and proceedings in courts of justice. The proceedings in student discipline
cases may be summary; and cross-examination is not, 'contrary to petitioners' view, an
essential part thereof. There are withal minimum standards which must be met to
satisfy the demands of procedural due process; and these are, that (1) the students
must be informed in writing of the nature and cause of any accusation against them; (2)
they shag have the right to answer the charges against them, with the assistance of
counsel, if desired; (3) they shall be informed of the evidence against them; (4) they
shall have the right to adduce evidence in their own behalf; and (5) the evidence must
be duly considered by the investigating committee or official designated by the school
authorities to hear and decide the case.
WHEREFORE, the petition is granted and the respondents are directed to allow the
petitioners to re-enroll or otherwise continue with their respective courses, without
prejudice to any disciplinary proceedings to which any or all of them may be subjected
in accordance with the standards herein set forth.
SO ORDERED.
Teehankee, CJ., Abad Santos, Feria, Yap, Fernan, Melencio-Herrera, Alampay, Gutierrez,
Jr., Cruz and Paras, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

The motion likewise points out the fact that two of the faculty members, namely Mr.
Asser (Bong) Tamayo, and Mr. Rene Encarnacion, supposedly found guilty by the
Investigating Committee headed by Mr. Antonio M. Magtalas (p. 342, Rollo), had been
issued permanent appointments (not mere temporary contracts) by no less than the
President of the School himself. The appointment of Mr. Asser (Bong) Tamayo dated
August 9, 1986 (p. 887, Rollo) can attest to this claim.

G.R. No.76353 September 29,1989

SOPHIA ALCUAZ, MA. CECILIA ALINDAYU, BERNADETTE ANG, IRNA ANONAS, MA.
REMEDIOS BALTAZAR, CORAZON BUNDOC, JOHN CARMONA, ANNA SHEILA DINOSO,
RAFAEL ENCARNACION, ANNALIZA EVIDENTE, FRANCIS FERNANDO, ZENNY GUDITO,
EDGAR LIBERATO, JULIET LIPORADA, GABRIEL MONDRAGON, JOSE MARIA PACKING,
DOMINIC PETILLA, MA. SHALINA PITOY, SEVERINO RAMOS, VICTOR SANTIAGO,
CAROLINA SARMIENTO, FERDINAND TORRES, RICARDO VENTIGAN and other students
of the PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION (Q.C.) similarly
situated,petitioners,
vs.
PHILIPPINE SCHOOL OF BUSINESS ADMINISTRATION, Quezon City Branch (PSBA), DR.
JUAN D. LIM, in his capacity as President and Chairman of the Board of Trustees of
PSBA, ATTY. BENJAMIN P. PAULINO, in his capacity as Vice- President for Admission
and Registration, MR. RUBEN ESTRELLA, in his capacity as Officer-in-Charge, MR.
RAMON AGAPAY, in his capacity as Director of the Office of Student Affairs and MR.
ROMEO RAFER, in his capacity as Chief Security of PSBA, respondents.
RESOLUTION
PARAS, J.:
On May 2, 1988, this Court through its Second Division rendered a Decision in the
instant case which prodded the Intervenor Union (hereinafter referred to as the Union)
to file a motion for reconsideration. Its argument hinges on the pronouncement that
x x x. Likewise, it is provided in the Manual, that the "written
contracts" required for college teachers are for one semester. It is thus
evident that after the close of the first semester, the PSBA-QC no
longer has any existing contract either with the students or with
intervening teachers. Such being the case, charge of denial of due
process is untenable. It is time-honored principle that contracts are
respected as the law between the contracting parties. x x x (p. 12,
Decision, italics supplied).(p. 874-875, Rollo)
with the allegedly inevitable consequence of extenuating the pernicious practice of
management to arbitrarily and wantonly terminate teachers simply because their
contracts of employment have already lapsed.

It is on the basis of the foregoing that We hereby amend Our previous statements on
the matter.
1

In a recent Decision, this Court had the opportunity to quite emphatically enunciate
the precept that full-time teachers who have rendered three (3) years of satisfactory
service shall be considered permanent (par. 75 of the Manual of Regulations for Private
Schools). Thus, having attained a permanent status, they cannot be removed from office
except for just cause and after due process.
Now applying the same principle in the case at bar, Mr. Asser (Bong) Tamayo having
stayed in the Philippine School of Business Administration, Quezon City Branch (PSBA,
for brevity) for three and one-half (3 1/2) years (in a full-time capacity) may be deemed
a permanent faculty member provided, of course, the services rendered have been
satisfactory to the school. However, because the investigation showed that Mr. Tamayo
had participated in the unlawful demonstration, his services cannot be deemed
satisfactory.
In the case of Mr. Rene Encarnacion, and Mr. Severino Cortes, Jr. who taught in PSBA for
two and one-half (2 1/2) years and one and one-half (1 1/2) years respectively, to them
a permanent status cannot be accorded for failure to meet the minimum requirement
of three (3) years set by the aforementioned Manual of Regulations. Of equal
importance, at this point, is the fact that the letter of appointment had been extended
only to Mr. Tamayo and not to Mr. Encarnacion, neither to Mr. Cortes, Jr.
WHEREFORE, for the reasons adverted to hereinabove, the motion for reconsideration,
except insofar as We have made the aforementioned clarificatory statements about the
tenure of full-time teachers and professors, is hereby DENIED.
In conclusion, We wish to reiterate that while We value the right of students to
complete their education in the school or university of their choice, and while We fully
respect their right to resort to rallies and demonstrations for the redress of their
grievances and as a part of their freedom of speech and their right to assemble, still
such rallies, demonstrations, and assemblies must always be conducted peacefully, and
without resort to intimidation, coercion, or violence. Academic freedom in all its forms,
demands the full display of discipline. To hold otherwise would be to subvert freedom
into degenerate license.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 99327 May 27, 1993
ATENEO DE MANILA UNIVERSITY, FATHER JOAQUIN BERNAS, S. J., DEAN CYNTHIA
ROXAS-DEL CASTILLO, JUDGE RUPERTO KAPUNAN, JR., JUSTICE VENICIO ESCOLIN,
FISCAL MIGUEL ALBAR, ATTYS. MARCOS HERRAS, FERDINAND CASIS, JOSE CLARO
TESORO, RAMON CAGUIOA, and RAMON ERENETA. petitioners,
vs.
HON. IGNACIO M. CAPULONG, Presiding Judge of the RTC-Makati, Br. 134, ZOSIMO
MENDOZA, JR. ERNEST MONTECILLO, ADEL ABAS, JOSEPH LLEDO AMADO SABBAN,
DALMACIO LIM JR., MANUEL ESCONA and JUDE FERNANDEZ, respondents.
Bengzon, Zarraga, Narciso, Cudala, Pecson, Benson & Jimenes for petitioners.
Romulo, Mabanta, Buenaventura, Sayoc & De Los Angeles for petitioner Cynthia Roxasdel Castillo.
Fabregas, Calida & Remollo for private respondents.
ROMERO, J.:
In 1975, the Court was confronted with a mandamus proceeding to compel the Faculty
Admission Committee of the Loyola School of Theology, a religious seminary which has a
working arrangement with the Ateneo de Manila University regarding accreditation of
common students, to allow petitioner who had taken some courses therein for credit
1
during summer, to continue her studies. Squarely meeting the issue, we dismissed the
petition on the ground that students in the position of petitioner possess, not a right,
but a privilege, to be admitted to the institution. Not having satisfied the prime and
indispensable requisite of a mandamus proceeding since there is no duty, much less a
clear duty, on the part of the respondent to admit the petitioner, the petition did not
prosper.
In support of its decision, the Court invoked academic freedom of institutions of higher
learning, as recognized by the Constitution, the concept encompassing the right of a
school to choose its students.
Eighteen (18) years later, the right of a University to refuse admittance to its students,
this time in Ateneo de Manila University proper, is again challenged.

Whereas, in the Garcia case referred to in the opening paragraph, the individual
concerned was not a regular student, the respondents in the case at bar, having been
previously enrolled in the University, seek re-admission. Moreover, in the earlier case,
the petitioner was refused admittance, not on such considerations as personality traits
and character orientation, or even inability to meet the institution's academic or
intellectual standards, but because of her behavior in the classroom. The school
pointedly informed her that ". . . it would seem to be in your best interest to work with a
Faculty that is more compatible with your orientations."
On the other hand, students who are now being refused admission into petitioner
University have been found guilty of violating Rule No. 3 of the Ateneo Law School Rules
on Discipline which prohibits participation in hazing activities. The case attracted much
publicity due to the death of one of the neophytes and serious physical injuries inflicted
on another.
Herein lies an opportunity for the Court to add another dimension to the concept of
academic freedom of institutions of higher learning, this time a case fraught with social
and emotional overtones.
The facts which gave rise to this case which is far from novel, are as follows:
As a requisite to membership, the Aquila Legis, a fraternity organized in the Ateneo Law
School, held its initiation rites on February 8, 9 and 10, 1991, for students interested in
joining its ranks. As a result of such initiation rites, Leonardo "Lennie" H. Villa, a first
year student of petitioner university, died of serious physical injuries at Chinese General
Hospital on February 10, 1991. He was not the lone victim, though, for another
freshman by the name of Bienvenido Marquez was also hospitalized at the Capitol
Medical Center for acute renal failure occasioned by the serious physical injuries
inflicted upon him on the same occasion.
In a notice dated February 11, 1991, petitioner Dean Cynthia del Castillo created a Joint
2
Administration-Faculty-Student Investigating Committee which was tasked to
investigate and submit a report within 72 hours on the circumstances surrounding the
death of Lennie Villa. Said notice also required respondent students to submit their
written statements within twenty-four (24) hours from receipt. Although respondent
students received a copy of the written notice, they failed to file a reply. In the
3
meantime, they were placed on preventive suspension. Through their respective
counsels, they requested copies of the charges and pertinent documents or affidavits.
In a notice dated February 14, 1991, the Joint Administration-Faculty-Student
Investigating Committee, after receiving the written statements and hearing the
testimonies of several witness, found a prima facie case against respondent students for
4
violation of Rule 3 of the Law School Catalogue entitled "Discipline."

Respondent students were then required to file their written answers to the formal
charge on or before February 18, 1991; otherwise, they would be deemed to have
waived their right to present their defenses.
On February 20, 1991, petitioner Dean created a Disciplinary Board composed of
petitioners Judge Ruperto Kapunan, Justice Venicio Escolin, Atty. Marcos Herras, Fiscal
Miguel Albar and Atty. Ferdinand Casis, to hear the charges against respondent
students.
In a letter dated February 20, 1991, respondent students were informed that they had
violated Rule No. 3 of the Rules on Discipline contained in the Law School Catalogue.
Said letter also states: "The complaint/charge against you arose from initiations held on
February 8-10, 1991. The evidence against you consist of testimonies of students,
showing your participation in acts prohibited by the School regulations." Finally, it
ordered respondent students to file their written answers to the above charge on or
before February 22 1991, otherwise they would be deemed to have waived their
5
defenses.
In a motion dated February 21, 1991, respondent students, through counsel, requested
that the investigation against them be held in abeyance, pending action on their request
6
for copies of the evidence against them.
Respondent students were then directed by the Board to appear before it at a hearing
on February 28, 1991 to clarify their answer with regard to the charges filed by the
investigating committee for violation of Rule No. 3. However, in a letter to a petitioners
dated February 27, 1991, counsel for respondent students moved to postpone the
7
hearing from February 28, 1991 to March 1, 1991.
Subsequently, respondent students were directed to appear on March 2, 1991 for
8
clarificatory questions. They were also informed that:
a) The proceedings will be summary in nature in accordance with the
9
rules laid down in the case ofGuzman vs. National University;
b) Petitioners have no right to cross-examine the affiants-neophytes;
c) Hazing which is not defined in the School catalogue shall be defined
in accordance with the proposed bill of Sen. Jose Lina, Senate Bill No.
3815;
d) The Board will take into consideration the degree of participation of
the petitioners in the alleged hazing incident in imposing the penalty;
e) The Decision of the Board shall be appealable to the President of
the University, i. e., Respondent Joaquin Bernas S. J.

On March 5, 1991, petitioner Bernas wrote Dean Castillo that, "in cases where the
Disciplinary Board is not prepared to impose the penalty of dismissal, I would prefer that
the Board leave the decision on the penalty to the Administration so that this case be
10
decided not just on the Law School level but also on the University level."
In a resolution dated March 9, 1991, the Board found respondent students guilty of
violating Rule No. 3 of the Ateneo Law School Rules on Discipline which prohibits
participation in hazing activities. The Board found that respondent students acted as
master auxiliaries or "auxies" during the initiation rites of Aquila Legis, and exercised the
"auxies privilege," which allows them to participate in the physical hazing. Although
respondent students claim that they were there to assist and attend to the needs of the
neophytes, actually they were assigned a definite supportive role to play in the
organized activity. Their guilt was heightened by the fact that they made no effort to
prevent the infliction of further physical punishment on the neophytes under their care.
The Board considered respondent students part and parcel of the integral process of
hazing. In conclusion, the Board pronounced respondents guilty of hazing, either by
active participation or through acquiescence. However, in view of the lack of unanimity
among the members of the Board on the penalty of dismissal, the Board left the
11
imposition of the penalty to the University Administration. Petitioner Dean del Castillo
waived her prerogative to review the decision of the Board and left to the President of
the University the decision of whether to expel respondents or not.
Consequently, in a resolution dated March 10, 1991, petitioner Fr. Joaquin G. Bernas, as
President of the Ateneo de Manila University, accepted the factual findings of the
Board, thus: "that as Master Auxiliaries they exercised the 'auxie's privilege;' that even
assuming they did not lay hands on the neophytes," respondents students are still guilty
in accordance with the principle that "where two or more persons act together in the
commission of a crime, whether they act through the physical volition of one or of all,
proceeding severally or collectively, each individual whose will contributes to the
wrongdoing is responsible for the whole." Fr. Bernas, in describing the offense which led
to the death of Leonardo Villa, concluded that the "offense of the respondents can be
characterized as grave and serious, subversive of the goals of Christian education and
contrary to civilized behavior." Accordingly, he imposed the penalty of dismissal on all
12
respondent students.
13

In a resolution dated March 18, 1991 and concurred in by petitioner Fr. Bernas, the
Board excluded respondent students Abas and Mendoza from the coverage of the
resolution of March 10, 1991, inasmuch as at the time the latter resolution was
promulgated, neither had as yet submitted their case to the Board. Said resolution also
set the investigation of the two students on March 21, 1991.
On March 18, 1991, respondent students filed with the Regional Trial Court of Makati, a
petition for certiorari, prohibition and mandamus with prayer for temporary restraining
14
order and preliminary injunction alleging that they were currently enrolled as students
for the second semester of school year 1990-91. Unless a temporary restraining order is

issued, they would be prevented from taking their examinations. The petition principally
centered on the alleged lack of due process in their dismissal.
On the same day, Judge Madayag issued a temporary restraining order the enjoining
petitioners from dismissing respondent students and stopping the former from
15
conducting hearings relative to the hazing incident.
Hearings in connection with the issuance of the temporary restraining order were then
held. On April 7, 1991, the temporary restraining order were issued on March 18, 1991
lapsed. Consequently, a day after the expiration of the temporary restraining order,
Dean del Castillo created a Special Board composed of Atty.(s) Jose Claro Tesoro, Ramon
Caguioa, and Ramon Ereeta to investigate the charges of hazing against respondent
students Abas and Mendoza.
Respondent students reacted immediately by filing a Supplemental Petition of certiorari,
prohibition andmandamus with prayer for a temporary restraining order and
preliminary injunction, to include the aforesaid members of the Special Board, as
16
additional respondents to the original petition.
Petitioners moved to strike out the Supplement Petition arguing that the creation of the
Special Board was totally unrelated to the original petition which alleged lack of due
process in the conduct of investigations by the Disciplinary Board against respondent
students; that a supplemental petition cannot be admitted without the same being set
for hearing and that the supplemental petition for the issuance of a temporary
restraining order will, in effect, extend the previous restraining order beyond its
17
mandatory 20-day lifetime. Acting on the urgent motion to admit the supplemental
petition with prayer for a temporary restraining order, Judge Amin, as pairing judge of
18
respondents Judge Capulong, granted respondent students' prayer on April 10, 1991.
On May 17, 1991, respondent Judge ordered petitioners to reinstate respondent
students. Simultaneously, the court ordered petitioners to conduct special examinations
in lieu of the final examinations which allegedly the students were not allowed to take,
and enjoined them to maintain the status quo with regard to the cases of Adel Abas and
Zosimo Mendoza pending final determination of the issue of the instant case. Lastly, it
19
directed respondent students to file a bond in the amount of P50,000.00.
On the same date, May 17, 1991, the Special Board investigating petitioners Abas and
20
Mendoza and directed the dropping of their names from its roll of students.
The following day or on May 21, 1991, respondent judge issued the writ of preliminary
injunction upon posting by respondents of a bond dated May 17, 1991 in the amount of
P50,000.00.
Hence, this special civil action of certiorari under Rule 65 with prayer for the issuance of
a temporary restraining order enjoining the enforcement of the May 17, 1991 order of
21
respondent judge.

In the case at bar, we come to grips with two relevant issues on academic freedom,
namely: (1) whether a school is within its rights in expelling students from its academic
community pursuant to its disciplinary rules and moral standards; and (2) whether or
not the penalty imposed by the school administration is proper under the
circumstances.
We grant the petition and reverse the order of respondent judge ordering readmission
of respondent students. Respondent judge committed grave abuse of discretion when
he ruled that respondent students had been denied due process in the investigation of
the charges against them.
It is the threshold argument of respondent students that the decision of petitioner Fr.
Joaquin Bernas, S. J., then President of the Ateneo de Manila University, to expel them
was arrived at without affording them their right to procedural due process. We are
constrained to disagree as we find no indication that such right has been violated. On
the contrary, respondent students' rights in a school disciplinary proceeding, as
22
enunciated in the cases of Guzman v. National University, Alcuaz v. PSBA, Q.C.
23
24
Branch and Non v. Dames II have been meticulously respected by petitioners in the
various investigative proceedings held before they were expelled.
Corollary to their contention of denials of due process is their argument that it is Ang
25
Tibay case and not theGuzman case which is applicable in the case at bar. Though
both cases essentially deal with the requirements of due process, the Guzman case is
more apropos to the instant case, since the latter deals specifically with the minimum
standards to be satisfied in the imposition of disciplinary sanctions in academic
institutions, such as petitioner university herein, thus:
(1) the students must be informed in writing of the nature and cause
of any accusation against them; (2) that they shall have the right to
answer the charges against them with the assistance of counsel, if
desired: (3) they shall be informed of the evidence against them (4)
they shall have the right to adduce evidence in their own behalf; and
(5) the evidence must be duly considered by the investigating
committee or official designated by the school authorities to hear and
26
decide the case.
It cannot seriously be asserted that the above requirements were not met. When, in
view of the death of Leonardo Villa, petitioner Cynthia del Castillo, as Dean of the
Ateneo Law School, notified and required respondent students on February 11, 1991 to
27
submit within twenty-four hours their written statement on the incident, the records
show that instead of filing a reply, respondent students requested through their
28
counsel, copies of the charges. While of the students mentioned in the February 11,
1991 notice duly submitted written statements, the others failed to do so. Thus, the
29
latter were granted an extension of up to February 18, 1991 to file their statements.

Indubitably, the nature and cause of the accusation were adequately spelled out in
30
petitioners' notices dated February 14 and 20, 1991. It is to be noted that the
February 20, 1991 letter which quoted Rule No. 3 of its Rules of Discipline as contained
in the Ateneo Law School Catalogue was addressed individually to respondent students.
Petitioners' notices/letters dated February 11, February 14 and 20 clearly show that
respondent students were given ample opportunity to adduce evidence in their behalf
and to answer the charges leveled against them.
The requisite assistance of counsel was met when, from the very start of the
investigations before the Joint Administration Faculty-Student Committee, the law firm
of Gonzales Batiler and Bilog and Associates put in its appearance and filed pleadings in
behalf of respondent students.
Respondent students may not use the argument that since they were not accorded the
opportunity to see and examine the written statements which became the basis of
petitioners' February 14, 1991 order, they were denied procedural due
31
process. Granting that they were denied such opportunity, the same may not be said
to detract from the observance of due process, for disciplinary cases involving students
need not necessarily include the right to cross examination. An administrative
proceeding conducted to investigate students' participation in a hazing activity need not
be clothed with the attributes of a judicial proceeding. A closer examination of the
March 2, 1991 hearing which characterized the rules on the investigation as being
summary in nature and that respondent students have no right to examine affiants32
neophytes, reveals that this is but a reiteration of our previous ruling in Alcuaz.
Respondent students' contention that the investigating committee failed to consider
their evidence is far from the truth because the February 14, 1992 ordered clearly states
that it was reached only after receiving the written statements and hearing the
33
testimonies of several witnesses. Similarly, the Disciplinary Board's resolution dated
March 10, 1991 was preceded by a hearing on March 2, 1991 wherein respondent
students were summoned to answer clarificatory questions.
With regard to the charge of hazing, respondent students fault petitioners for not
explicitly defining the word "hazing" and allege that there is no proof that they were
furnished copies of the 1990-91 Ateneo Law School Catalogue which prohibits hazing.
Such flawed sophistry is not worthy of students who aspire to be future members of the
Bar. It cannot be overemphasized that the charge filed before the Joint AdministrationFaculty-Student Investigating Committee and the Disciplinary Board is not a criminal
case requiring proof beyond reasonable doubt but is merely administrative in character.
As such, it is not subject to the rigorous requirements of criminal due process,
particularly with respect to the specification of the charge involved. As we have had
occasion to declare in previous cases a similar nature, due process in disciplinary cases
involving students does not entail proceedings and hearings identical to those
34
prescribed for actions and proceedings in courts of justice. Accordingly, disciplinary
charges against a student need not be drawn with the precision of a criminal
information or complaint. Having given prior notice to the students involved that

"hazing" which is not defined in the School Catalogue shall be defined in accordance
with Senate Bill No. 3815, the proposed bill on the subject of Sen. Jose Lina, petitioners
have said what needs to be said. We deem this sufficient for purposes of the
investigation under scrutiny.
Hazing, as a ground for disciplining a students, to the extent of dismissal or expulsion,
finds its raison d' etre in the increasing frequency of injury, even death, inflicted upon
the neophytes by their insensate "masters." Assuredly, it passes the test of
reasonableness and absence of malice on the part of the school authorities. Far from
fostering comradeship and esprit d' corps, it has merely fed upon the cruel and baser
instincts of those who aspire to eventual leadership in our country.
Respondent students argue that petitioners are not in a position to file the instant
petition under Rule 65 considering that they failed to file a motion for reconsideration
35
first before the trial court, thereby by passing the latter and the Court of Appeals.
It is accepted legal doctrine that an exception to the doctrine of exhaustion of remedies
36
is when the case involves a question of law, as in this case, where the issue is whether
or not respondent students have been afforded procedural due process prior to their
dismissal from petitioner university.
Lastly, respondent students argue that we erred in issuing a Temporary Restraining
Order since petitioners do not stand to suffer irreperable damage in the event that
private respondents are allowed to re-enroll. No one can be so myopic as to doubt that
the immediate reinstatement of respondent students who have been investigated and
found by the Disciplinary Board to have violated petitioner university's disciplinary rules
and standards will certainly undermine the authority of the administration of the school.
This we would be most loathe to do.
More importantly, it will seriously impair petitioner university's academic freedom
which has been enshrined in the 1935, 1973 and the present 1987 Constitutions.
At this juncture, it would be meet to recall the essential freedoms subsumed by Justice
Felix Frankfurter in the term "academic freedom" cited in the case of Sweezy v. New
37
Hampshire, thus: (1) who may teach: (2) what may be taught; (3) how it shall be
taught; and (4) who may be admitted to study.
Socrates, the "first of the great moralists of Greece," proud to claim the title "gadfly of
the State" has deservedly earned for himself a respected place in the annals of history
as a martyr to the cause of free intellectual inquiry. To Plato, this great teacher of his
was the "best, the most sensible, and the most sensible, and the most just man of his
age." In 399 B.C., he willingly quaffed the goblet of hemlock as punishment for alleged
"corruption" of the youth of Athens. He describes in his own words how this charge of
"corruption," the forerunner of the concept of academic freedom, came about:

Young men of the richer classes, who have not much to do, come
about me of their own accord: they like to heart the pretenders
examined, and they often imitate me, and examine others themselves;
there are plenty of person, as they soon discover, who think that they
know something, but really know little or nothing; and then those who
are examined by them instead of being angry with themselves are
angry with me. This confounded Socrates, they say; this villainous
misleader of youth. And then if somebody asks them, Why, what evil
does he practice or teach? they do not know, and cannot tell; but in
order that they may not appear to be at a loss, they repeat the readymade charges which are used against all philosophers about teaching
things up in the clouds and under the earth, and having no gods, and
making the worse appear the better cause; for they do not like to
confess that their pretense of knowledge has been detected which
is the truth; and as they are numerous and ambitious and energetic,
and are all in battle array and have persuasive tongues, they have
38
filled your ears with their loud and inveterate calumnies.
Since Socrates, numberless individuals of the same heroic mold have similarly defied the
stifling strictures of authority, whether State, Church, or various interest groups, to be
able to give free rein to their ideas. Particularly odious were the insidious and blatant
attempts at thought control during the time of the Inquisition until even the Medieval
universities, renowned as intellectual centers in Europe, gradually lost their autonomy.
In time, such noble strivings, gathering libertarian encrustations along the way, were
gradually crystallized in the cluster of freedoms which awaited the champions and
martyrs of the dawning modern age. This was exemplified by the professors of the new
German universities in the 16th and 17th centuries such as the Universities of Leiden
(1554), Helmstatdt (1574) and Heidelberg (1652). The movement back to freedom of
inquiry gained adherents among the exponents of fundamental human rights of the
19th and 20th centuries. "Academic freedom", the term as it evolved to describe the
emerging rights related to intellectual liberty, has traditionally been associated with
freedom of thought, speech, expression and the press; in other words, with the right of
individuals in university communities, such as professors, researchers and
administrators, to investigate, pursue, discuss and, in the immortal words of Socrates,
"to follow the argument wherever it may lead," free from internal and external
interference or pressure.
But obviously, its optimum impact is best realized where the freedom is exercised
judiciously and does not degenerate into unbridled license. Early cases on this individual
aspect of academic freedom have been stressed the need for assuring to such
individuals a measure of independence through the guarantees of autonomy and
security of tenure. The components of this aspect of academic freedom have been
categorized under the areas of: (1) who may teach and (2) how to teach.

It is to be realized that this individual aspects of academic freedom could have

developed only pari passu with its institutional counterpart. As corporate entities,
educational institutions of higher learning are inherently endowed with the right to
establish their policies, academic and otherwise, unhampered by external controls or
pressure. In the Frankfurter formulation, this is articulated in the areas of: (1) what shall
be taught, e.g., the curriculum and (2) who may be admitted to study.
In the Philippines, the Acts which are passed with the change of sovereignty from the
Spanish to the American government, namely, the Philippine Bill of 1902 and the
Philippine Autonomy Act of 1916 made no mention of the rights now subsumed under
the catch-all term of "academic freedom." This is most especially true with respect to
the institutional aspect of the term. It had to await the drafting of the Philippine
Constitutions to be recognized as deserving of legal protection.
The breakthrough for the concept itself was found in Section 5 of the 1935 Constitution
which stated: "Universities established by the State shall enjoy academic freedom." The
only State University at that time, being the University of the Philippines, the Charter
was perceived by some as exhibiting rank favoritism for the said institution at the
expense of the rest.
In attempt to broaden the coverage of the provision, the 1973 Constitution provided in
its Section 8(2): "All institutions of higher learning shall enjoy academic freedom." In his
interpretation of the provision, former U.P. President Vicente G. Sinco, who was also a
delegate to the 1971 Constitutional Convention, declared that it "definitely grants the
right of academic freedom to the University as an institution as distinguished from the
39
academic freedom of a university professor."
Has the right been carried over the to the present Constitution? In an attempt to give an
explicit definition with an expanded coverage, the Commissioners of the Constitutional
Commission of the 1986 came up with this formulation: "Academic freedom shall be
enjoyed by students, by teachers, and by researchers." After protracted debate and
ringing speeches, the final version which was none too different from the way it was
couched in the previous two (2) Constitutions, as found in Article XIV, Section 5(2)
states: "Academic freedom shall be enjoyed in all institutions of higher learning." In
anticipation of the question as to whether and what aspects of academic freedom are
included herein, ConCom Commissioner Adolfo S. Azcuna explained: "Since academic
freedom is a dynamic concept, we want to expand the frontiers of freedom, especially in
education, therefore, we shall leave it to the courts to develop further the parameters
40
of academic freedom."
More to the point, Commissioner Jose Luis Martin C. Gascon asked: "When we speak of
the sentence 'academic freedom shall be enjoyed in all institutions of higher learning,'
do we mean that academic freedom shall be enjoyed by the institution itself?" Azcuna
replied: "Not only that, it also includes . . . . " Gascon finished off the broken thought,
"the faculty and the students." Azcuna replied: "Yes."

Since Garcia v. Loyola School of Theology, we have consistently upheld the salutary
proposition that admission to an institution of higher learning is discretionary upon a
school, the same being a privilege on the part of the student rather than a right. While
under the education Act of 1982, students have a right "to freely choose their field of
study, subject to existing curricula and to continue their course therein up to
graduation," such right is subject, as all rights are, to the established academic and
42
disciplinary standards laid down by the academic institution.

41

Quite applicable to this case is our pronouncement in Yap Chin Fah v. Court of
Appeals that: "The maintenance of a morally conducive and orderly educational
environment will be seriously imperiled if, under the circumstances of this case, Grace
Christian is forced to admit petitioner's children and to reintegrate them to the student
46
body." Thus, the decision of petitioner university to expel them is but congruent with
the gravity of their misdeeds. That there must be such a congruence between the
47
offense committed and the sanction imposed was stressed in Malabanan v. Ramento.

"For private schools have the right to establish reasonable rules and regulations for the
admission, discipline and promotion of students. This . . . extends as well to parents . . .
as parents are under a social and moral (if not legal) obligation, individually and
43
collectively, to assist and cooperate with the schools."

Having carefully reviewed the records and the procedure followed by petitioner
university, we see no reason to reverse its decision founded on the following
undisputed facts: that on February 8, 9 and 10, 1991, the Aquila Legis Fraternity
conducted hazing activities; that respondent students were present at the hazing as
auxiliaries, and that as a result of the hazing, Leonardo Villa died from serious physical
injuries, while Bienvenido Marquez was hospitalized. In light of the vicious acts of
respondent students upon those whom ironically they would claim as "brothers" after
the initiation rites, how can we countenance the imposition of such nominal penalties as
reprimand or even suspension? We, therefore, affirm petitioners' imposition of the
penalty of dismissal upon respondent students. This finds authority and justification in
48
Section 146 of the Manual of Regulations for Private Schools.

Such rules are "incident to the very object of incorporation and indispensable to the
successful management of the college. The rules may include those governing student
44
discipline." Going a step further, the establishment of rules governing universitystudent relations, particularly those pertaining to student discipline, may be regarded as
vital, not merely to the smooth and efficient operation of the institution, but to its very
survival.
Within memory of the current generation is the eruption of militancy in the academic
groves as collectively, the students demanded and plucked for themselves from the
ponoply of academic freedom their own rights encapsulized under the rubric of "right to
education" forgetting that, in Holfeldian terms, they have a concomitant duty, and that
is, their duty to learn under the rules laid down by the school.
Considering that respondent students are proud to claim as their own a Christian school
that includes Theology as part of its curriculum and assidously strives to turn out
individuals of unimpeachable morals and integrity in the mold of the founder of the
order of the Society of Jesus, St. Ignatius of Loyola, and their God-fearing forbears, their
barbaric and ruthless acts are the more reprehensible. It must be borne in mind that
universities are established, not merely to develop the intellect and skills of the
studentry, but to inculcate lofty values, ideals and attitudes; nay, the development, or
flowering if you will, of the total man.
In essence, education must ultimately be religious not in the sense that the founders
or charter members of the institution are sectarian or profess a religious ideology.
Rather, a religious education, as the renowned philosopher Alfred North Whitehead
45
said, is "an education which inculcates duty and reverence." It appears that the
particular brand of religious education offered by the Ateneo de Manila has been lost on
the respondent students.
Certainly, they do not deserve to claim such a venerable institution as the Ateneo de
Manila University as their own a minute longer, for they may foreseeably cast a
malevolent influence on the students currently enrolled, as well as those who come
after them.

WHEREFORE, the instant petition is GRANTED; the order of respondent Judge dated
May 17, 1991 reinstating respondents students into petitioner university is hereby
REVERSED. The resolution of petitioner Joaquin Bernas S. J., then President of Ateneo de
Manila University dated March 1991, is REINSTATED and the decision of the Special
Board DISMISSING respondent students ADEL ABAS and ZOSIMO MENDOZA dated May
20, 1991 is hereby AFFIRMED.
Narvasa, C.J., Feliciano Padilla, Bidin, Regalado, Davide, Jr., Nocon, Bellosillo, Melo and
Quiason, JJ., concur.
Grio-Aquino, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 110280 October 12, 1993
UNIVERSITY OF THE PHILIPPINES BOARD OF REGENTS and DR. OLIVIA C. CAOILI in her
capacity as Secretary of the Board, petitioners,
vs.
HON. ELSIE LIGOT-TELAN in her capacity as Presiding Judge of Branch 87, Regional Trial
Court of Quezon City and RAMON P. NADAL, respondents.
U.P. Office of Legal Services for petitioners.
Bonifacio A. Alentajon for private respondent.
ROMERO, J.:
In an effort to make the University of the Philippines (U.P.) truly the university of the
people, the U.P. administration conceptualized and implemented the socialized scheme
of tuition fee payments through the Socialized Tuition Fee and Assistance Program
(STFAP), popularly known as the "Iskolar ng Bayan" program. Spawned by the public
clamor to overcome what was perceived as the sharpening elitist profile of the U.P
studentry, the STFAP aspired to expand the coverage of government educational
subsidies so as to include the deserving in the lower rungs of the socio-economic ladder.
After broad consultations with the various university constituencies by U.P. President
Jose V. Abueva, the U.P. Board of Regents issued on April 28, 1988 a Resolution
establishing the STFAP. A year later, it was granted official recognition when the
Congress of the Philippines allocated a portion of the National Budget for the
implementation of the program.
In the interest of democratizing admission to the State University, all students are
entitled to apply for STFAP benefits which include reduction in fees, living and book
subsidies and student assistantships which give undergraduate students the opportunity
to earn P12.00 per hour by working for the University.
Applicants are required to accomplish a questionnaire where, among others, they state
the amount and source of the annual income of the family, their real and personal
properties and special circumstances from which the University may evaluate their
financial status and need on the basis of which they are categorized into brackets. At the
end the application form, the student applicant, as well as his parent, signs a sworn
statement, as follows:

Statement of the Student

I hereby certify, upon my honor, that all the data and information
which I have furnished are accurate and complete. I understand that
any willful misinformation and/or withholding of information will
automatically disqualify me from receiving any financial assistance or
subsidy, and may serve as ground for my expulsion from the
University. Furthermore, is such misinformation and/or withholding of
information on my part is discovered after I have been awarded tuition
scholarship or any form of financial assistance, I will be required to
reimburse all financial benefits plus the legal rate of interest prevailing
at the time of the reimbursement without prejudice to the filing of
charges against me. (Emphasis supplied for emphasis)
Moreover, I understand that the University may send a fact-finding
team to visit my home/residence to verify the veracity of the
information provided in this application and I will give my utmost
cooperation in this regard. I also understand that my refusal to
cooperate with the fact-finding team may mean suspension of
withdrawal of STFAP benefits and privileges.

Student's Signature
Statement of the Applicant's Parent or Guardian
I hereby certify to the truthfulness and completeness of the information which my
son/daughter/dependent has furnished in this application together with all the
documents attached. I further recognize that in signing this application form, I share
with my son/daughter/dependent the responsibility for the truthfulness and
completeness of the information supplied herein. (Emphasis supplied for emphasis)
Moreover, I understand that the University may send a fact-finding team to visit my
home/residence to verify the information provided in this application and I will give my
utmost cooperation in this regard. I also understand that my refusal to cooperate with
the fact-finding team may mean suspension or withdrawal of STFAP benefits and
privileges of my son/daughter/dependent.

1
Parent's/Legal Guardian's/Spouse's Signature
From the early stages of its implementation, measures were adopted to safeguard the
integrity of the program. One such precautionary measure was the inclusion as one of
the punishable acts under Section 2 (a) of the Rules and Regulations on Student Conduct
and Discipline of the University the deliberate falsification or suppression/withholding
of any material information required in the application form.

To further insure the integrity of the program, a random sampling scheme of verification
of data indicated in a student's application form is undertaken. Among those who
applied for STFAP benefits for School Year 1989-90 was Ramon P. Nadal, a student
enrolled in the College of Law.
On March 14, 1991, a team composed of Arsenio L. Dona and Jose Carlo Manalo
conducted a home investigation at the residence of Nadal at 31 Twinpeaks Drive, Blue
Ridge, Quezon City.

(a) That he has and maintains a car (Toyota Corolla,

Model 1977); and
(b) The income of his mother (Natividad Packing
Nadal) in the U.S.A., in support of the studies of his
brothers Antonio and Federico,

Ms. Cristeta Packing, Nadal's aunt, was interviewed and the team submitted a home
visit report. Consolacion Urbino, Scholarship Affairs Officer II, found discrepancies
between the report and Nadal's application form. Forthwith, she and Bella M.
Villanueva, head of the Office of Scholarships and Student Services, presented the
2
matter to the Diliman Committee on Scholarships and Financial Assistance.

which acts of willfully withholding information is tantamount to acts of

dishonesty in relation to his studies, in violation of paragraph (a),
Section 2, of the Rules and Regulations on Student Conduct and
Discipline, as amended. (Approved by the B.O.R. at its 876th meeting
on 02 September 1976, amended at the 923rd B.O.R. meeting on 31
January 1980, and further amended at its 1017th B.O.R. meeting on 08
5
December 1988).

In compliance with the said Committee's directive, Bella Villanueva wrote Nadal
informing him that the investigation showed that he had failed to declare, not only the
fact that he had been maintaining a 1977 Corolla car which was owned by his brother
but also the income of his mother who was supporting his brothers Antonio and
Federico. Nadal was likewise informed that the Diliman Committee had reclassified him
to Bracket 9 (from Bracket 4), retroactive to June 1989, unless he could submit "proofs
to the contrary." Nadal was required "to pay back the equivalent amount of full school
fees" with "interest based on current commercial rates." Failure to settle his account
would mean the suspension of his registration privileges and the withholding of
clearance and transcript of records. He was also warned that his case might be referred
3
to the Student Disciplinary Tribunal for further investigation.

On October 27, 1992, after hearing, the SDT rendered a decision in SDT Case No. 91026 exculpating Nadal of the charge of deliberately withholding in his STFAP application
form information that he was maintaining a Toyota Corolla car, but finding him guilty of
"wilfully and deliberately withholding information about the income of his mother, who
7
is living abroad, in support of the studies of his brothers Antonio and Federico, which is
tantamount to acts of dishonesty in relation to his studies in violation of paragraph [a],
Section 2 of the Rules [now covered by paragraph (i), Section 2 of the Rules, as amended
25 June 1992]." As such, the SDT imposed upon Nadal the penalty of expulsion from the
University and required him to reimburse all STFAP benefits he had received but if he
does not voluntarily make reimbursement, it shall be "effected by the University thru
8
outside legal action."

On July 12, 1991, Nadal issued a certification stating, among other things, that his
mother migrated to the United States in 1981 but because her residency status had not
yet been legalized, she had not been able to find a "stable, regular, well-paying
employment." He also stated that his mother, jointly with his brother Virgilio, was
4
shouldering the expenses of the college education of his two younger brothers.

The SDT decision was thereafter automatically elevated to the Executive Committee of
U.P. Diliman for review pursuant to Sec. 20 of the U.P. Rules on Student Conduct and
Discipline. On November 26, 1992, the Executive Committee, voting 13:4, affirmed the
decision of the SDT; whereupon, Nadal appealed to the Board of Regents (BOR). The
9
appeal was included in the agenda of the BOR meeting on January 25, 1993.

Noting further discrepancies between Nadal's application form and the certification, the
U.P. charged Nadal before the Student Disciplinary Tribunal (SDT) on August 23, 1991
with the following:

On January 18, 1993, upon her assumption to the Chairmanship of the Senate
Committee on Education, thereby making her automatically a member of the BOR,
Senator Leticia Ramos-Shahani wrote the BOR a letter expressing her view that, after a
close review of Nadal s case by her legal staff, "it is only fair and just to find Mr. Nadal's
appeal meritorious and his arguments worthy of belief. Consequently, he should be
10
allowed to graduate and take the bar examinations this year."

That respondent RAMON P. NADAL (UP Student No. 83-11640), a

student of the College of Law, UP System, Diliman, Quezon City, and
STFAP (ISKOLAR NG BAYAN) recipient (Bracket 4 for SY 1989-1990;
Bracket 5 for SY 1990-1991) in his applications for STFAP (ISKOLAR NG
BAYAN) benefits which he filed for schoolyear 1989-1990, and
schoolyear 1990-1991, with the Office of Scholarship and Student
Services (formerly Scholarship and Financial Assistance Service)
voluntarily and willfully withheld and did not declare the following:

At its January 25, 1993 meeting, the BOR affirmed the decision of the SDT but because
"the Board was willing to grant a degree of compassion to the appellant in view of the
alleged status and predicament of the mother as an immigrant 'TNT' in the United
States," the penalty was modified "from Expulsion to One Year- Suspension, effective
immediately, plus reimbursement of all benefits received from the STFAP, with legal

interest." The BOR also decided against giving Nadal, a certification of good moral
11
character.
Nadal forthwith filed a motion for reconsideration of the BOR decision, allegedly against
12
the advice of his counsel. The motion was placed on the agenda of the February 25,
1993 meeting of the BOR. A day before said date, Senator Shahani wrote the BOR
another letter requesting that deliberation on Nadal's case be deferred until such time
as she could attend a BOR meeting.
On March 15, 1993, the U.P. filed an opposition to Nadal's motion for reconsideration.
Thereafter, the BOR held a special meeting to accommodate the request of Regent
Shahani with Nadal's case as the sole item on its agenda. Again, Nadal's motion for
reconsideration was included in the March 23, 1993 agenda but in view of the absence
of Senator Shahani, the decision thereon was deferred.
At the special meeting of the BOR on March 28, 1993 at the Board Room of the Manila
Polo Club in Forbes Park, Makati, Regent Antonio T. Carpio raised the "material
importance" of verifying the truth of Nadal's claim that earlier, he was a beneficiary of a
scholarship and financial aid from the Ateneo de Manila University (AdeMU). Learning
that the "certification issued by the AdeMU that it had not given Nadal financial aid
while he was a student there was made through a telephone call," Regent Carpio
declared that there was as yet "no direct evidence in the records to substantiate the
charge." According to Carpio, if it should be disclosed that Nadal Falsely stated that he
received such financial aid, it would be a clear case of gross and material
misrepresentation that would even warrant the penalty of expulsion. Hence, he cast a
conditional vote that would depend on the verification of Nadal's claim on the matter.
U.P. President and concurrently Regent Jose V. Abueva countered by stating that "a
decision should not be anchored solely on one piece of information which he considered
irrelevant, and which would ignore the whole pattern of the respondent's dishonesty
and deception from 1989 which had been established in the investigation and the
reviews." He added that "the respondent's eligibility for his AdeMU high school
scholarship and financial assistance from 1979 to 1983 does not in any way establish
that he is 'not guilty as charged' before the SDT," since the formal charges against him
do not include withholding of information regarding scholarship grants received from
other schools.
At the said March 28, 1993 special meeting, the Board decided to go into executive
session where the following transpired:
The Chairman of the Board, together with the President, directed the
Secretary to reflect in the minutes of the meeting the following
decisions of the Board in executive session, with only the Board
members present.

A vote was held by secret ballot on whether Ramon P. Nadal was

guilty or not guilty as charged of willful withholding of information in
relation to his application for Socialized Tuition and Financial
Assistance Program (STFAP) benefits which he filed for Schoolyears
1989-1990 and 1990-1991 which is tantamount to act of dishonesty in
relation to his studies, in violation of paragraph (a), Section 2 of the
Rules and Regulations on Student Conduct and Discipline, as
amended.
The Chairman gave the following results of the Board action during the
Executive Session: four (4) voted guilty; three (3) voted not guilty; and
three (3) gave conditional votes, pending verification with Father
Raymond Holscher of Ateneo de Manila University of Ramon P.
Nadal's statement in his STFAP application that he was granted
scholarship while he was in high school. Should Ateneo confirm that
Nadal had not received financial assistance, then the conditional votes
would be considered as guilty, and if otherwise, then not guilty. The
Chairman requested the President to make the verification as soon as
possible the next day. In answer to a query, the Chairman clarified that
once the information was received from Ateneo, there would be no
need for another meeting to validate the decision.
The President reiterated his objections to the casting of conditional
votes.
The Chairman himself did not vote.

13

In the morning of March 29, 1993, the AdeMU issued a certification to the effect that
Nadal was indeed a recipient of a scholarship grant from 1979 to 1983. That evening,
the BOR met again at a special meeting at the Westin Philippine Plaza Hotel. According
to Regent Carpio, in executive session, the BOR found Nadal "guilty" as the members
voted as follows: six members guilty, three members not guilty, and three
14
members abstained. Consequently, the BOR imposed on Nadal the penalties of
suspension for one (1) year effective March 29, 1993, non-issuance of any certificate of
good moral character during the suspension and/or as long as Nadal has not reimbursed
the STFAP benefits he had received with 12% interest per annum from march 30, 1993
and non-issuance of his transcript of records until he has settled his financial obligations
15
with the university.
On March 30, 1993, Nadal wrote President Abueva a handwritten letter stating that
"after learning of the latest decision" of the BOR, he had been "intensely concentrating
on (his) job so that (he) can earn enough to pay for (his) financial obligations to the
University." Alleging that he was "now letting nature take its course," Nadal begged
16
President Abueva not to issue any press release regarding the case.

However, on April 22, 1993, Nadal filed with the Regional Trial Court of Quezon City a
petition for mandamus with preliminary injunction and prayer for a temporary
restraining order against President Abueva, the BOR, Oscar M. Alfonso, Cesar A.
Buenaventura, Armand V. Fabella and Olivia C. Caoili. The petition prayed:
After trial on the merits, judgment be rendered as follows:
a. Making the preliminary injunction permanent;
b. Ordering respondents 'to uphold and implement their decision
rendered on 28 March 1993, exonerating petitioner from all the
charges against him, and accordingly dismissing SDT No. 91-026;
c. Ordering respondents jointly and severally to pay petitioner
litigation expenses of at least P150,000.00.
Other just and equitable reliefs are likewise prayed for.

17

The motion for the issuance of a temporary restraining order and the writ of preliminary
injunction was immediately set for hearing. At the May 10, 1993 hearing, the lower
court declared that the only issue to be resolved was "whether or not the respondents
in Civil Case No. 93-15665 violated (Nadal's) right to due process when it rendered a
decision finding Nadal guilty of the charges against him" during the March 29, 1993
meeting. After the respondents had presented their first witness, Dr. Olivia C. Caoili, the
lower court asked respondents' counsel whether they were amenable to maintaining
the status quo. Said counsel replied in the negative, asserting the University's
18
prerogative to discipline students found guilty of violating its rules of discipline.
On the same day, the lower court

19

issued the following Order:

The parties were heard on their respective positions on the incident

(application for preliminary injunction and prayer for temporary
restraining order and opposition thereto). For lack of material time set
this for continuation on May 17 and 18, 1993 both at 2:30 p.m.
In the meantime, in order that the proceedings of this case may not be
rendered moot and academic, the respondents herein, namely: Jose V.
Abueva, President of the University of the Philippines and ViceChairman of the U.P. Board of Regents, Oscar M. Alfonso, Cesar A.
Buenaventura and Armand V. Fabella, members of the U.P. Board of
Regents, Olivia C. Caoili, the officers, agents, representatives, and all
persons acting in their behalf, are hereby temporarily restrained from
implementing their decision rendered on March 29, 1993 in
Administrative SDT Case No. 91-026 entitled University of the
Philippines vs. Ramon P. Nadal, as reflected in the Minutes of the

1062nd meeting of the Board of Regents, U.P. held at the Romblon

Room, Westin Phil. Plaza, Manila, until further order from this Court.
SO ORDERED.
Thereafter, Nadal presented as witnesses Regents Emerenciana Y. Arcellana, Ariel P.
Tanangonan, Leticia R. Shahani and Antonio T. Carpio. The University, on the other
hand, presented Dr. Olivia Caoili and Nadal himself as a hostile witness. On May 29,
1993, the lower court issued the following Order:
The petitioner complains that he was not afforded due process when,
after the Board Meeting on SDT Case No. 91-026 on March 28, 1993
that resulted in a decision of "NOT GUILTY" in his favor, the Chairman
of the U.P. Board of Regents, without notice to the herein petitioner,
called another meeting the following day to deliberate on his (the
Chairman's) MOTION FOR RECONSIDERATION, which this time
resulted in a decision of "GUILTY." While he main issue of violation of
due process raised in the petition pends trial and resolution, the
petitioner prays for the issuance of a writ of preliminary injunction
prohibiting the respondents from further proceeding with SDT Case
No. 21-026 and from suspending the petitioner for one year.
It is a basic requirement in the issuance of the preliminary injunctive
writ that there must be a right to be protected. As the issue in the case
at bar is due process in the March 29 Board meeting, there is, indeed,
a right to be protected for, in administrative proceedings, a
respondent's right to due process exists not only at the early stages
but also at the final stage thereof.
With the circulation to the members of the Board of Regents, as well
as to other UP personnel, of the Minutes of the March 29, 1993
meeting, even after this case had already been filed, the Court is
convinced that there now exists a threat to the petitioner (respondent
in SDT Case No, 91-026) that the decision of the Board of Regents
finally finding him guilty of willfully withholding information material
to his application for Socialized Tuition and Financial Assistance
Program (STFAP) benefits, will be implemented at any time, especially
during the enrollment period, and this implementation would work
injustice to the petitioner as it would delay him in finishing his course,
and, consequently, in getting a decent and good paying job. The injury
thus caused would be irreparable.
"Damages are irreparable within the meaning of the
rule where there is no standard by which their
amount can be measured with reasonable accuracy.
Where the damage is susceptible of mathematical

computation, it is not irreparable." (Social Security

Commission v. Bayona, et al., G.R. No. L-13555, May
30, 1962).
IN VIEW OF THE FOREGOING, and so as not to render moot the issues
in the instant proceedings, let a writ of preliminary injunction be
issued restraining the respondents, their officers, agent(s),
representatives, and all persons acting in their behalf, from further
proceeding with SDT Case No. 91-026, and from suspending
petitioner, upon the latter's filing a bond in the amount of P3,000.00.
IT IS SO ORDERED.

20

Dispensing with the filing of a motion for reconsideration, the petitioners filed the
instant petition for certiorari and prohibition with prayer for the issuance of an
injunction or temporary restraining order, raising the following issues: whether or not
Nadal was denied due process in the administrative disciplinary proceedings against
him, and, whether or not the respondent judge gravely abused her discretion in issuing
the May 29, 1993 writ of preliminary injunction thereby preventing the BOR from
implementing the suspension penalty it had imposed on Nadal.
Before proceeding with the discussion of the merits of the instant petition, we shall
confront a threshold issue raised by private respondent, namely, that Dr. Caoili, not
having been authorized by the Board of Regents as a collegial body to file the instant
petition, and Dr. Abueva, who verified the petition, not being the "Board of Regents"
nor "the University of the Philippines," they are not real parties in interest who should
21
file the same.
A real party in interest is one "who stands to be benefited or injured by the judgment or
the party entitled to the avails of the suit. 'Interest' within the meaning of the rule
means material interest, an interest in issue and to be affected by the decree, as
distinguished from mere interest in the question involved, or a mere incidental
22
interest." Undoubtedly, the U.P. Board of Regents has an interest to protect inasmuch
as what is in issue here is its power to impose disciplinary action against a student who
violated the Rules and Regulations on Student Conduct and Discipline by withholding
information in connection with his application for STFAP benefits, which information, if
disclosed, would have sufficed to disqualify him from receiving the financial assistance
he sought. Such dishonesty, if left unpunished, would have the effect of subverting a
commendable program into which the University officials had devoted much time and
expended precious resources, from the conceptualization to the implementation stage,
to rationalize the socialized scheme of tuition fee payments in order that more students
may benefit from the public funds allocated to the State University.
Having specifically named Drs. Abueva and Caoili as respondents in the petition
for mandamus that he filed below, Nadal is now estopped from questioning their
23
personality to file the instant petition. Moreover, under Sec. 7 of the U.P. Charter (Act

1870) and Sec. 11 of the University Code "all process" against the BOR shall be served
on "the president or secretary thereof'." It is in accordance with these legal provisions
that Dr. Caoili is named as a petitioner. Necessarily, Dr. Abueva, the University President
and member of the BOR, has to verify the petition. It is not mandatory, however, that
each and every member of the BOR be named petitioners. As the Court has time and
again held, an action may be entertained, notwithstanding the failure to include an
indispensable party where it appears that the naming of the party would be but a
24
formality.
No longer novel, as this is not a case of first impression, is the issue on the right of an
academic institution to refuse admission to a student arising from the imposition upon
him of an administrative disciplinary sanction. In our recent decision in Ateneo de
25
Manila University v. Hon. Ignacio M. Capulong, wherein certain law students were
dismissed for hazing resulting in the death of another, we held that the matter of
admission of students is within the ambit of academic freedom and therefore, beyond
the province of the courts to decide. Certain fundamental principles bear stressing.
One of the arguments of Nadal in his petition for mandamus below was that he was
denied due process. To clarify, the so-called lack of due process referred only to the
March 29, 1993 meeting of the BOR. As stated by respondent's counsel: "What was
conceded by undersigned counsel was that Nadal was afforded due process from the
start of the administrative proceeding up to the meeting of the Board of Regents on
26
March 28, 1993."
With respect to the March 29, 1993 meeting, respondent considers the same as
"unquestionably void for lack of due process" inasmuch as he was not sent a notice of
27
said meeting. Counsel cites the ruling in Non v. Dames II that imposition of sanctions
28
on students requires "observance of procedural due process," the phrase obviously
referring to the sending of notice of the meeting.
Attention is drawn to the disparate factual environments obtaining in Non v. Dames
II and in the instant case. In the former case, the students were refused admission for
having led or participated in student mass actions against the school, thereby posing a
collision between constitutionally cherished rights freedom of expression and
academic freedom. In the case at bar, Nadal was suspended for having breached the
University's disciplinary rules. In the Non case, the Court ruled that the students were
not afforded due process for even the refusal to re-enroll them appeared to have been a
mere afterthought on part of the school administrators. Here, Nadal does not dispute
the fact that his right to due process was held inviolate until the BOR decided to meet
on March 29, 1993 with his case as the sole item on the agenda.
In any event it is gross error to equate due process in the instant case with the sending
of notice of the March 29, 1993 BOR meeting to respondent. University rules do not
require the attendance in BOR meetings of individuals whose cases are included as
items on the agenda of the Board. This is not exclusive of students whose disciplinary
cases have been appealed to the Board of Regents as the final review body. At no time

did respondent complain of lack of notice given to him to attend any of the regular and
special BOR meetings where his case was up for deliberation. He would make an
exception of the March 29, 1993 meeting for it was "supposed to reconsider the
decision made on March 28, 1993 exonerating respondent Nadal from all administrative
29
charges against him."
Regent Antonio T. Carpio, in his testimony before the lower court on May 25, 1993
admitted that there was no final verdict at the March 28, 1993 meeting in view of the
conditional votes resulting from his assertion that he was "not morally convinced that
there was sufficient evidence to make a finding of guilty against Nadal because there
was no direct evidence that his mother received income from the United States and this
30
income was sent to the Philippines to support the studies of the children." Two
regents shared the view of Regent Carpio, with the following result: four voted guilty,
three, not guilty, and three cast conditional votes. The BOR agreed that, upon the
suggestion of Regent Carpio, they would still verify from the AdeMU about Nadal's
alleged scholarship as a student in said institution. Consequently, no definitive decision
was arrived at by the BOR on March 28, 1993, Much less was a verdict of exoneration
handed down as averred by respondent.
Regent Carpio testified, with respect to the March 29, 1993 meeting where all twelve
members of the BOR were present, that all of them participated in the voting held to
reconsider the previous day's decision. He stated "I remember Regent Arcellana
questioning the voting again on the ground that there was already a final decision, but
there was a vote taken on whether a motion for reconsideration can be decided by the
board, and a majority of the board ruled that the matter can be reconsidered again
31
upon motion of the chairman."
At said meeting, six (6) regents voted to find respondent guilty, three (3) voted that he
was not guilty and three (3) abstained. As succinctly announced by Regent Carpio, the
final decision was that which was rendered on March 29, 1993 as "no other decision
32
was made by the Board with respect to the same issue."
Counsel for Nadal charged before the lower court that his client was "not given due
process in the March 29 meeting because the ground upon which he was again
33
convicted was not the same as the original charge." Obviously, he was referring to the
basis of the conditional votes on March 28, i.e., whether or not Nadal was telling the
truth when he claimed that he received a scholarship grant from the AdeMU. However,
Regent Carpio himself testified that the charge considered was "exactly the same
34
charge" of withholding information on the income of Nadal's mother. It should be
stressed that the reason why Regent Carpio requested a verification of Nadal's claim
that he was a scholar at the AdeMU was that Regent Carpio was not "morally
convinced" yet as to the guilt of Nadal. In other words, he sought additional insights into
the character of Nadal through the information that would be obtained from the
AdeMU.

In this regard, we find such information to be irrelevant and a mere superfluity. In his
July, 12, 1991 certification aforementioned, Nadal admitted, although inconsistently,
that his mother was a "TNT" who could not find a "stable, regular, well-paying
employment" but that she was supporting the education of his brothers with the help of
another son. To our mind, this constitutes sufficient admission that Nadal withheld
information on the income, however measly and irregular, of his mother. Unlike in
criminal cases which require proof beyond reasonable doubt as basis for a judgment, in
administrative or quasi-judicial proceedings, only substantial evidence is required, that
which means more than a mere scintilla or relevant evidence as a reasonable mind
might accept as adequate to support a conclusion, even if other minds equally
35
reasonable might conceivably opine otherwise. In light of the foregoing circumstances,
we find that Nadal has been sufficiently proven to have violated his undertaking to
divulge all information needed when he applied for the benefits of the STFAP.
Let it not be forgotten that respondent aspires to join the ranks of the professionals who
would uphold truth at all costs so that justice may prevail. The sentinels who stand
guard at the portals leading to the hallowed Temples of Justice cannot be overzealous in
admitting only those who are intellectually and morally fit. In those who exhibit duplicity
in their student days, one spots the shady character who is bound to sow the seeds of
chicanery in the practice of his profession.
Having reached his senior year, respondent is presumably aware that the bedrock
axiom, Canon I, Rule 1.01 of the Code of Professional Responsibility states: "A lawyer
shall not engage in unlawful, dishonest, immoral or deceitful conduct." Further on,
Canon 7, Rule 7.01 provides: "A lawyer shall be answerable for knowingly making a false
statement or suppressing a material fact in connection with his application for
admission to the bar." (Emphasis supplied for emphasis)
Surely, it is not too early to warn entrants to the noble profession of law that honesty
and integrity are requirements no less weighty than hurdling the Bar examinations. This
is the reason why a certification of good moral character is one of the documents that
must be submitted in applying to take said examination. In fact, a charge of immoral or
deceitful conduct on the part of an applicant, when proved, is a ground for disqualifying
him.
To revert to the instant case, inasmuch as it has been shown sufficiently that
respondent has committed an act of dishonesty in withholding vital information in
connection with his application for STFAP benefits, all in blatant violation of the Rules
and Regulations on Student Conduct and Discipline of petitioner University, the latter's
inherent power and authority to impose disciplinary sanction may be invoked and
rightfully exercised.
As a Bohemian proverb puts it: "A school without discipline is like a mill without water."
Insofar as the water turns the mill, so does the school's disciplinary power assure its
right to survive and continue operating. In more relevant terms, through its power to
impose disciplinary sanctions, an educational institution is able to exercise its academic

freedom which is, in the case at bar, the right to suspend and refuse admission to a
student who has subverted its authority in the implementation of the critically
important STFAP.
At the risk of being repetitious, the matter of admission to a University is encompassed
by the right of academic freedom. In Garcia v. The Faculty Admission Committee, Loyola
36
School of Theology the Court stated that a school or college which is possessed of the
right of academic freedom "decides for itself its aims and objectives and how best to
attain them. It is free from outside coercion or interference save possibly when the
overriding public welfare calls for some restraint. It has a wide sphere of autonomy
certainly extending to the choice of students." Elucidating, in Ateneo de Manila
37
University v. Hon. Ignacio M. Capulong, the Court further expounded:
Since Garcia v. Loyola School of Theology, we have consistently upheld
the salutary proposition that admission to an institution of higher
learning is discretionary upon a school, the same being a privilege on
the part of the student rather than a right. While under the Education
Act of 1982, students have a right "to freely choose their field of study,
subject to existing curricula and to continue their course therein up to
graduation," such right is subject, as all rights are, to the established
academic and disciplinary standards laid down by the academic
institution.
For private schools have the right to establish reasonable rules and
regulations for the admission, discipline and promotion of students.
This right . . . extends as well to parents . . . as parents are under a
social and moral (if not legal) obligation, individually and collectively,
to assist and cooperate with the schools.
Such rules are "incident to the very object of incorporation and
indispensable to the successful management of the college. The rules
may include those governing student discipline." Going a step further,
the establishment of rules governing university-student relations,
particularly those pertaining to student discipline, may be regarded as
vital, if not merely to the smooth and efficient operation of the
institution, but to its very survival.
Within memory of the current generation is the eruption of militancy
in the academic groves as collectively, the students demanded and
plucked for themselves from the panoply of academic freedom their
own rights encapsulized under the rubric of "right to education"
forgetting that, in Hohfeldian terms, they have a concomitant duty,
that is, their duty to learn under the rules laid down by the school.
(Emphasis supplied.)

On the second issue presented for adjudication, the Court finds that the lower court
gravely abused its discretion in issuing the writ of preliminary injunction of May 29,
1993. The issuance of the said writ was based on the lower court's finding that the
implementation of the disciplinary sanction of suspension on Nadal "would work
injustice to the petitioner as it would delay him in finishing his course, and
consequently, in getting a decent and good paying job." Sadly, such a ruling considers
only the situation of Nadal without taking into account the circumstances clearly of his
own making, which led him into such a predicament. More importantly, it has
completely disregarded the overriding issue of academic freedom which provides more
than ample justification for the imposition of a disciplinary sanction upon an erring
student of an institution of higher learning.
From the foregoing arguments, it is clear that the lower court should have restrained
itself from assuming jurisdiction over the petition filed by Nadal. Mandamus is never
issued in doubtful cases, a showing of a clear and certain right on the part of the
38
petitioner being required. It is of no avail against an official or government agency
39
whose duty requires the exercise of discretion or judgment.
Hence, by issuing the writ of preliminary injunction, the lower court dared to tread upon
legally forbidden grounds. For, by virtue of the writ, the University's exercise of
academic freedom was peremptorily curtailed. Moreover, the door was flung wide open
for Nadal to do exactly what the decision of the BOR prohibited him from doing and that
is, to violate the suspension order by enrolling for the first semester of 1993-1994. It
must have been with consternation that the University officials helplessly watching him
40
complete his academic requirements for taking the Bar. In the event that he be
allowed to continue with his studies he would, in effect render moot and academic the
disciplinary sanction of suspension legally imposed upon him by the BOR's final decision
of March 29, 1993. What is to prevent other aspirants for STFAP scholarships from
misleading the University authorities by misrepresenting certain facts or as in instant
case, withholding vital information and stating downright falsehoods, in their
application forms with impunity? Not only would this undermine the authority of the
U.P. to discipline its students who violated the rules and regulations of the institution
but, more importantly, subvert the very concept and lofty intent to give financial
assistance to poor but deserving students through the STFAP which, incidentally, has not
ceased refining and modifying it's operations.
WHEREFORE, the instant petition is GRANTED and the lower court is hereby ordered to
DISMISS the petition formandamus.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

Said respondents then filed with this Court on February 11, 1982 a petition for certiorari
and prohibition with a prayer for the issuance of a writ of preliminary injunction and
restraining order docketed as G.R. No. 59619. After requiring a comment thereon, on
April 28, 1982 this court en banc resolved to dismiss the petition for lack of merit.

FIRST DIVISION
G.R. No. 81798 December 29, 1989
LAO GI alias FILOMENO CHIA, SR., his wife, ONG UE, and his children FILOMENO, JR.,
MANUEL, ROSITA VICENTA and DOMINGA, all surnamed CHIA, petitioners
vs.
HONORABLE COURT OF APPEALS AND COMMISSION ON IMMIGRATION AND
DEPORTATION,respondents.
Dakila F. Castro & Associates for petitioners.
GANCAYCO, J.:
On September 3, 1958 the Secretary of Justice rendered Opinion No. 191, series of 1958
finding Filomeno Chia, Jr., alias Sia Pieng Hui to be a Filipino citizen as it appears that his
father Filomeno Chia, Sr. is a Filipino citizen born on November 28, 1899 being the
legitimate son of Inocencio Chia and Maria Layug of Guagua, Pampanga. However on
October 3, 1980 the Minister of Justice rendered Opinion No. 147, series of 1980
cancelling Opinion No. 191, series of 1958 and setting aside the citizenship of Filomeno
Chia, Sr. on the ground that it was founded on fraud and misrepresentation. A motion
for reconsideration of said Opinion was denied by the Minister of Justice on February
13, 1981.
On March 9, 1981 a charge for deportation was filed with the Commission on
Immigration and Deportation (CID) against Lao Gi alias Filomeno Chia, Sr., his wife and
children.
An amended charge was filed with the CID on March 19,1981 alleging that said
respondents refused to register as aliens having been required to do so and continued
to refuse to register as such. On August 31, 1981 another amended charge was filed
alleging that Manuel Chia committed acts of undesirability.
On September 4, 1981 said respondents filed a motion to dismiss the amended charges
on the ground that the CID has no authority to reopen a matter long settled under
Opinion No. 191, series of 1958. The motion to dismiss was opposed by the private
prosecutor. The CID special prosecutor also filed an opposition on the ground that the
citizenship may be threshed out as the occasion may demand and that due process was
accorded to respondents. The respondents filed a reply thereto. The motion to dismiss
was denied by the CID and a motion for reconsideration of said denial was also denied in
a resolution dated December 10, 1981.

Earlier, Manuel Chia was charged with falsification of public documents in the Court of
First Instance (CFI) of Manila in Criminal Case No. 60172 for alleging that he was a
Filipino citizen in the execution of a Deed of Absolute Sale of certain real property. He
was acquitted by the trial court in an order dated May 5, 1982 on the ground that
Opinion No. 191, series of 1958 of the Secretary of Justice may be equated as res
judicata and that revocation thereof by Opinion No. 147, series of 1980 cannot be
considered just, fair and reasonable.
On June 1, 1982 respondents filed a motion for reconsideration of the aforesaid
resolution of this Court dismissing the petition but this was denied by another
resolution of this Court dated August 17, 1982. A second motion for reconsideration
thereof was also denied by this Court on September 16, 1982.
On September 23, 1982 the CID set the deportation case against respondents for
hearing and Acting Commissioner Victor G. Nituda gave respondents three (3) days to
move for reconsideration of the order directing them to register as aliens and to oppose
the motion for their arrest. On September 27, 1982 respondents filed said motion for
reconsideration and opposition but this was denied by Acting Commissioner Nituda on
September 28, 1982. The latter directed respondents to register as aliens within two (2)
days from notice thereof. The deportation case was set for hearing on October 5, 1 982
but on the same day respondents filed the petition for certiorari and prohibition with a
prayer for injunctive relief in the Court of First Instance of Manila docketed as Civil Case
No. 82- 12935 whereby a writ of preliminary injunction was issued. On April 17,1985 a
decision was rendered by the trial court dismissing the petition for lack of legal basis
and for want of supervisory jurisdiction on the part of the trial court on the particular
subject involved. The writ of preliminary injunction previously issued was dissolved.
An appeal therefrom was interposed to the Court of Appeals. In due course a decision
was rendered on August 19, 1987 dismissing the appeal with costs against petitioners. A
motion for reconsideration of the decision filed by petitioners was also denied in a
resolution dated January 7, 1988.
Hence, the herein petition for certiorari filed by petitioners wherein they seek to set
aside the decision of the Court of Appeals and ask that a new one be rendered setting
aside the order of the CID dated September 28, 1982 and directing it to proceed with
the reception of the evidence in support of the charges against the petitioners. The
issues raised in the petition are as follows:
1. The issues raised in G.R. No. 59619 before the Honorable Supreme Court were
different from the issues raised in Civil Case No. 82-12935-CV.

2. The minute resolution of the Honorable Supreme Court in G.R. No. 59619 did not
make a categorical ruling that petitioner entered and remained in the Philippines by
false pretenses.
3. The issue of whether or not petitioners' citizenship was secured by fraud is precisely
the subject matter of the proceedings before the Commission on Immigration and
Deportation, in which no evidence had been presented yet in support of the charge of
fraud in the acquisition of petitioners' citizenship.
4. Petitioners are not subject to immediate deportation.
5. The order for the arrest of petitioners in case of failure to register as aliens was
premature since there was no competent determination yet that their citizenship was
indeed procured by fraud.
6. The Honorable Court of Appeals overstepped its appellate jurisdiction, when it ruled
on matters not covered by the Decision of the lower court.
There can be no question that the CID has the authority and jurisdiction to hear and
determine the deportation case against petitioners and in the process determine also
the question of citizenship raised by the petitioners. Section 37(a) (1) of the Immigration
Act provides as follows:
SEC. 37. (a) The following aliens shall be arrested upon the warrant of
the Commissioner of Immigration or of any other officer designated by
him for the purpose and deported upon the warrant of the
Commissioner of Immigration after a determination by the Board of
Commissioners of the existence of the ground for deportation as
charged against the alien:
(1) Any alien who enters the Philippines after the effective date of this
Act by means of false and misleading statements or without inspection
and admission by the immigration authorities at a designated port of
entry or at any place other than at a designated port of entry. (As
amended by Sec. 13, Rep. Act No. 503.) ...
From the foregoing provision it is clear that before any alien may be deported upon a
warrant of the Commissioner of Immigration, there should be a prior determination by
the Board of Commissioners of the existence of the ground as charged against the alien.
In this case it appears that petitioners are charged with having entered the Philippines
by means of false and misleading statements or without inspection or admission by the
immigration authorities at a designated port of entry.

After appropriate charges are filed in the CID the specific grounds of which he should be
duly informed of, a hearing should be conducted, and it is only after such a hearing by
the CID that the alien may be ordered deported. In such a hearing, Opinion No. 191,
Series of 1958 of the Secretary of Justice and Opinion No. 147, Series of 1980 of the
Minister of Justice will bear much weight in the determination by the CID of the
citizenship of said petitioners.
The petitioners question the Order of Acting Commissioner Nituda that they register as
aliens as required by the Immigration Act. While it is not disputed that it is also within
the power and authority of the Commissioner to require an alien to so register, such a
requirement must be predicated on a positive finding that the person who is so required
is an alien. In this case where the very citizenship of the petitioners is in issue there
should be a previous determination by the CID that they are aliens before the
petitioners may be directed and required to register as aliens.
The power to deport an alien is an act of the State. It is an act by or under the authority
1
of the sovereign power. It is a police measure against undesirable aliens whose
presence in the country is found to be injurious to the public good and domestic
2
tranquility of the people.
Although a deportation proceeding does not partake of the nature of a criminal action,
however, considering that it is a harsh and extraordinary administrative proceeding
affecting the freedom and liberty of a person, the constitutional right of such person to
due process should not be denied. Thus, the provisions of the Rules of Court of the
Philippines particularly on criminal procedure are applicable to deportation proceedings.
Under Section 37(c) of the Philippine Immigration Act of 1940 as amended, it is
provided:
c No alien shall be deported without being informed of the specific
grounds for deportation nor without being given a hearing under rules
of procedure to be prescribed by the Commissioner of Immigration.
Hence, the charge against an alien must specify the acts or omissions complained of
which must be stated in ordinary and concise language to enable a person of common
understanding to know on what ground he is intended to be deported and enable the
3
CID to pronounce a proper judgment.
Before any charge should be filed in the CID a preliminary investigation must be
conducted to determine if there is a sufficient cause to charge the respondent for
4
deportation. The issuance of warrants of arrest, arrests without warrant and service of
warrants should be in accordance likewise with Rule 113 of the 1985 Rules of Criminal
5
Procedure; search warrants issued by the CID shall be governed by Rule 126 of the
6
1985 Rules of Criminal Procedure; and so the matter of bail, motion to quash, and
7
trial, among others. Fealty to the prescribed rules of procedure in deportation cases
shall insure a speedy, fair and just dispensation of justice.

The Court takes note of the fact that a private prosecutor is assisting in the prosecution
of the case by the special prosecutor of the CID. The Court sees no reason why a private
prosecutor should be allowed to participate in a deportation case. Under the 1985 Rules
on Criminal Procedure, particularly Section 16, Rule 110 thereof, an offended party may
intervene in a criminal prosecution when there is civil liability arising from the criminal
action claimed by said party. In such case he may intervene by counsel.
In deportation cases, the Court cannot conceive of any justification for a private party to
have any right to intervene. Even if such party can establish any damages due him
arising from the deportation charge against the alien, such relief cannot be afforded him
in the deportation proceeding. His recourse if at all is in the ordinary courts. Thus the
Court rules that the intervention of a private prosecutor should not be allowed in
deportation cases. The possibility of oppression, harrassment and persecution cannot
be discounted. The deportation of an alien is the sole concern of the State. This is the
reason why there are special prosecutors and fiscals tasked to prosecute such cases.
WHEREFORE, the petition is hereby GRANTED and the questioned order of the
respondent Commission on Immigration and Deportation dated September 28, 1982 is
hereby set aside. The respondent Commission on Immigration and Deportation is
hereby directed to continue hearing the deportation case against petitioners and
thereafter, based on the evidence before it, to resolve the issue of citizenship of
petitioners, and if found to be aliens, to determine whether or not the petitioners
should be deported and/or otherwise ordered to register as aliens. No costs.
SO ORDERED.
Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

SECOND DIVISION
[G.R. No. 154745. January 29, 2004]
COMMISSIONER ANDREA D. DOMINGO, BUREAU OF IMMIGRATION, petitioner, vs.
HERBERT MARKUS EMIL SCHEER, respondent.
DECISION
CALLEJO, SR., J.:
This is a petition for review under Rule 45 of the Rules of Court, as amended, of the
[1]
Decision of the Court of Appeals in CA-G.R. SP No. 71094 granting the respondents
petition forcertiorari and prohibition annulling the order of arrest issued by the
petitioner, and permanently enjoining her from deporting the respondent from the
Philippines. Through its decision, the CA virtually reversed the Summary Deportation
[2]
[3]
Order of the Board of Commissioners (BOC) and its Omnibus Resolution denying the
respondents Urgent Motion for Reconsideration of said Order, and enjoining the
petitioner from deporting the respondent.
The facts as culled from the records are as follows:
Respondent Herbert Markus Emil Scheer, a native of Ochsenfurt, Germany, was a
frequent visitor of the Philippines. On July 18, 1986, his application for permanent
[4]
resident status was granted. The Bureau of Immigration and Deportation (BID) issued
in favor of the respondent Alien Certificate of Registration No. B-396907 dated
[5]
September 16, 1987 and Immigration Certificate of Residence No. 256789 dated
[6]
February 24, 1988. The Commissioner stated that the granting of the petition would
[7]
redound to the benefit of the Filipino people. During his sojourn in the Philippines, the
[8]
respondent married widowed Edith delos Reyes with whom he had two daughters.
[9]
They had a son, Herbert Scheer, Jr., but he passed away on November 13, 1995. They
resided in Puerto Princesa City, Palawan, where the respondent established and
managed the Bavaria Restaurant. On May 21, 1991, he was appointed Confidential
[10]
Agent by then NBI Director Alfredo S. Lim.
In a Letter dated June 29, 1995, Vice Consul Jutta Hippelein informed the
Philippine Ambassador to Bonn, Germany, that the respondent had police records and
[11]
financial liabilities in Germany.
The Department of Foreign Affairs received from the German Embassy in Manila
Note Verbale No. 369/95 dated July 26, 1995, informing it that the respondent was
wanted by the German Federal Police; that a warrant of arrest had been issued against
him; and that the respondent will be served with an official document requesting him to
turn over his German passport to the Embassy which was invalidated on July 2,
[12]
1995. The Embassy requested the Department of Foreign Affairs to inform the
competent Philippine authorities of the matter.The BOC thereafter issued a Summary
Deportation Order dated September 27, 1997. The penultimate paragraph of the Order
reads:

WHEREFORE, the foregoing considered, the Board of Commissioners hereby orders the
following:
1. Cancellation of respondents permanent residence visa;
2. Respondents summary deportation and permanent exclusion from the
Philippines; and
3. Inclusion of his name on the Bureaus Blacklist.
PROVIDED, however that said summary deportation should be held in abeyance in case
said alien has a pending final and executory criminal conviction where the imposed
penalty is imprisonment, in which case, he has to serve first such imposed penalty,
and/or has a pending criminal, civil or administrative action and a Hold Departure Order
has been issued or that his presence in said action is indispensable. In such instances,
the alien should remain in the custody of the Bureau until his turnover to the proper
authorities in case he has to serve imprisonment or in case of pendency of civil or
criminal administrative action, he shall remain in the custody of the Bureau until such
time that his pending cases shall have been decided, terminated or settled, as the case
may be, unless circumstances demand the immediate implementation of this summary
deportation.. . .
SO ORDERED.

[13]

In issuing the said order, the BOC relied on the correspondence from the German
Vice Consul on its speculation that it was unlikely that the German Embassy will issue a
new passport to the respondent; on the warrant of arrest issued by the District Court of
Germany against the respondent for insurance fraud; and on the alleged illegal activities
[14]
of the respondent in Palawan. The BOC concluded that the respondent was not only
an undocumented but an undesirable alien as well.
When the respondent was apprised of the deportation order, he forthwith aired
his side to then BID Commissioner Leandro T. Verceles. The Commissioner allowed the
respondent to remain in the Philippines, giving the latter time to secure a clearance and
[15]
a new passport from the German Embassy. Then Presidential Assistant Teodorico K.
Imperial wrote a Testimonial dated November 24, 1995, in behalf of the respondent
addressed to Commissioner Verceles. Nonetheless, the respondent, through counsel,
filed on December 5, 1995 an Urgent Motion for Reconsideration of the Summary
[16]
Deportation Order of the BOC. In his motion, the respondent alleged, inter alia, that:
1. The elementary rules of due process require notice and opportunity to be heard
before a person can be lawfully deprived of his right (Ute Paterok vs. Bureau of
Customs, 193 SCRA 132). In the instant case, although it is acknowledged that the
Honorable Office may conduct summary deportation proceedings, respondent was not
given notice and opportunity to be heard before said Summary Deportation Order was
issued. Respondents right to procedural due process was therefore violated.
Consequently, the Summary Deportation Order is invalid.

2. In issuing, the Summary Deportation Order, this Honorable Office relied on Note
Verbal No. 369/95 issued by the Embassy of the Federal Republic of Germany, Manila,
notifying the Department of Foreign Affairs and this Honorable Office about the warrant
of arrest against respondent for alleged illegal insurance fraud and illegal activities.
However, a close scrutiny of said note verbal shows that nowhere therein does it state
that respondent was involved in insurance fraud or in any kind of illegal activities in
Germany or anywhere else in the world, such as in Palawan. Therefore, the main basis
of the Summary Deportation Order is incompetent as evidence against respondent who
is, like every Filipino, presumed to be innocent until his guilt is proven beyond
reasonable doubt.
3. The power to deport alien is a police power measure necessary against undesirable
alien whose presence in the country is injurious to the public good and domestic
tranquility of the country (Board of Commissioner Commission on Immigration vs. De la
Rosa, 197 SCRA 853). It is respectfully submitted that respondent is not an undesirable
alien. He has stayed in the Philippines for more or less than (10) years. He has married a
Filipina and has three (3) minor children. He has established his business in Palawan and
he has no police record whatsoever. Respondent has considered the Philippines his
second home and he has nowhere else to go back to in Germany. Under the
circumstances and for humanitarian considerations, respondent is not an undesirable
alien whose deportation is warranted. Likewise, the mere fact that his passport was not
renewed by the German Embassy does not also automatically justify the deportation of
[17]
respondent.
However, the BOC did not resolve the respondents motion. The respondent was
neither arrested nor deported.
Meanwhile, on February 15, 1996, the District Court of Straubing rendered a
[18]
Decision dismissing the criminal case against the respondent for physical injuries. The
German Embassy in Manila, thereafter, issued a temporary passport to the respondent.
In a Letter dated March 1, 1996, the respondent informed Commissioner Verceles
that his passport had been renewed following the dismissal of the said criminal case. He
reiterated his request for the cancellation of the Summary Deportation Order dated
September 27, 1995 and the restoration of his permanent resident
[19]
status. Subsequently, on March 12, 1996, the German Embassy issued to the
respondent a regular passport, to expire on March 11, 2006.
The BOC still failed to resolve the respondents Urgent Motion for Reconsideration.
Commissioner Verceles did not respond to the respondents March 1, 1996 Letter. The
respondent remained in the Philippines and maintained his business in Palawan. On
March 20, 1997, the Department of Labor and Employment approved his application for
Alien Employment Registration Certificate as manager of the Bavaria Restaurant in
Puerto Princesa City.
In the meantime, petitioner Immigration Commissioner Andrea T. Domingo
assumed office. She wrote the German Embassy and inquired if the respondent was
wanted by the German police. On April 12, 2002, the German Embassy replied that the

[20]

respondent was not so wanted. At about midnight on June 6, 2002, Marine

operatives and BID agents apprehended the respondent in his residence on orders of
the petitioner. He was whisked to the BID Manila Office and there held in custody while
[21]
awaiting his deportation. Despite entreaties from the respondents wife and his
[22]
employees, the petitioner refused to release the respondent.
Shocked at the sudden turn of events, the respondent promptly communicated
with his lawyer. The latter filed with the BID a motion for bail to secure the respondents
temporary liberty.On June 11, 2002, the respondents counsel filed with the Court of
Appeals a petition for certiorari, prohibition and mandamus with a prayer for temporary
restraining order and writ of preliminary injunction, to enjoin the petitioner from
[23]
proceeding with the respondents deportation. The respondent (petitioner therein)
alleged, inter alia, that his arrest and detention were premature, unjust, wrongful, illegal
and unconstitutional, effected without sufficient cause and without jurisdiction or with
grave abuse of discretion. He asserted that there was no speedy remedy open to him in
[24]
the ordinary course of law and that his Urgent Motion for Reconsideration of the
Summary Deportation Order of the BOC had not yet been resolved despite the lapse of
more than six years. The respondent averred that he was a fully documented alien, a
permanent resident and a law-abiding citizen. He, thus, prayed as follows:
PRAYER
WHEREFORE, it is most respectfully prayed of this Honorable Court that:
1. Upon the filing of this Petition, this Honorable Court issue a Temporary Restraining
Order to enjoin respondent Commissioner from enforcing any order to deport
petitioner;
2. After due hearing, a writ of preliminary and mandatory injunction be correspondingly
issued to maintain the status quo pending resolution of the Petition on the merits.
3. After hearing, judgment be rendered:
a) Directing and mandating respondent Commissioner and the body she heads to
resolve the Motion for Reconsideration filed in 1995, in his favor, and nullifying or
suspending the implementation of any order, oral or written, she may have issued or
issue to deport petitioner; and
b) Making the injunction in petitioners favor permanent.
Petitioner likewise prays for such other and further relief as may be deemed just and
equitable in the premises, such as directing respondent, if Herbert Scheer is deported
[25]
before the matter is heard on notice, to authorize his return.
The BOC ruled that its September 27, 1995 Order had become final and executory
[26]
[27]
after the lapse of one year, citing our rulings in Sy vs. Vivo, and Lou vs. Vivo. The

BOC also held that it was not competent to reverse the September 27, 1995 Order,
[28]
citing our ruling in Immigration Commissioner vs. Fernandez. It declared that the
respondent may seek the waiver of his exclusion via deportation proceedings through
[29]
the exceptions provided by Commonwealth Act No. 613, Section 29 (a)(15), but that
his application for the waiver presupposes his prior removal from the Philippines.

counsel manifested to the appellate court that he had just been informed by the OSG of
the Omnibus Resolution of the BOC dated June 14, 2002.
In her Comment on the Petition, the petitioner (the respondent therein)
alleged, inter alia, the following:

In a parallel development, the respondent procured a letter from the National

Bureau of Investigation (NBI) in Puerto Princesa City certifying that he had no pending
[30]
criminal record. The Puerto Princesa City Philippine National Police (PNP) also issued a
certification that the respondent had no pending criminal or derogatory records in the
[31]
said office.

1) that the BOC was an indispensable party to the petition;

Meanwhile, on June 26, 2002, the Court of Appeals issued a status quo order
restraining the petitioner from deporting the respondent on a bond
[32]
of P100,000.00. On July 18, 2002, the BOC issued an Omnibus Resolution dated June
14, 2002, pendente lite denying the respondents Urgent Motion for Reconsideration,
Motion for Bail/Recognizance, and the Letter dated June 11, 2002. The decretal portion
of the resolution reads:

3) the allowance by then Immigration Commissioner Leandro Verceles for the

petitioner therein to renew his passport and secure clearances, even if
proved, was not binding on the BOC;

Wherefore, in view of the foregoing circumstances, we deny the prayers of the Urgent
Motion for Reconsideration of 5 December 1995, the Motion for Bail/Recognizance
dated 7 June 2002 and the Letter of 11 June 2002. Further, we hereby order the
following:

5) the German Embassys issuance of a new passport did not legalize the
respondents stay in this country, which became illegal on July 2, 1995
when his passport expired;

2) the petitioners failure to implead the BOC warranted the denial of the
petition;

4) the September 27, 1995 Order of the BOC was already executory when the
respondent filed her petition in the CA;

6) the respondent therein did not act with abuse of discretion in causing the
arrest and detention of the respondent based on the BOCs Summary
Deportation Order; and

1. Subject to the submission of appropriate clearances, the summary deportation order

the respondent Herbert Scheer, German, under BI Office Memorandum Order No. 34
(series of 1989) and the BOC Summary Deportation Order of 27 September 1995;

7) the BOC did not act with grave abuse of discretion in issuing its Summary
Deportation Order and Omnibus Resolution and such order and
resolution were not mooted by the German Embassys issuance of a
new passport in favor of the respondent.

2. Permanent exclusion of Herbert Scheer from the Philippines under C.A. No. 613,
Section 40 (a)(15).
3. Inclusion of the name of Herbert Scheer in the Immigration Black List; and
4. Forfeiture of the bail bond, if any, of Herbert Scheer under C.A. No. 613, Section 40
(a)(15).

In view of the Omnibus Resolution of the BOC, the respondent (petitioner therein)
in his Memorandum prayed for the nullification of the BOCs Order, as well as its
Omnibus Resolution denying his Urgent Motion for Reconsideration considering that
with the issuance of a new passport, there was no more basis for his deportation, thus:

...
RELIEF
IT IS SO ORDERED.

[33]

WHEREFORE, it is most respectfully prayed of this Honorable Court that:

During the hearing of the respondents plea for a writ of preliminary mandatory
injunction before the CA on July 22, 2002, the Office of the Solicitor General (OSG)
manifested that the State had no opposition to the respondents re-entry and stay in the
Philippines, provided that he leave the country first and re-apply for admission and
[34]
residency status with the assurance that he would be re-admitted. The respondents

1. Upon the filing of this Memorandum, this Honorable Court forthwith direct and
authorize the immediate release of petitioner, even on undersigneds recognizance, until
further orders from this Honorable Court;

2. The Summary Deportation Order of September 27, 19[9]5, affirmed by respondent

allegedly on June 14, 2002 and made known only yesterday, be nullified to the extent
that it directs the deportation of petitioner, who has removed the very basis of said
Order of not having a valid passport, and that the Resolution of June 14, 2002 be
nullified in toto; and,
3. The Temporary Restraining Order of June 26, 2002 be converted into a permanent
injunction or writ of prohibition.
Petitioner likewise prays for such other and further relief as may be deemed just and
[35]
equitable in the premises.

a) There are quite a number of cases in relevant jurisprudence wherein only the
Immigration Commissioner was impleaded to decide whether an alien may stay or be
deported, such as in the case of Vivo vs. Arca (19 SCRA 878) and Vivo vs. Cloribel (22
SCRA 159).
b) In the case of Caruncho III vs. COMELEC (315 SCRA 693), it was pronounced that:
Ordinarily, the nonjoinder of an indispensable party or the real party interest is not by
itself a ground for the dismissal of the petition. The court before which the petition is
filed must first require the joinder of such party. It is the noncompliance with said order
that would be a ground for the dismissal of the petition.
thus, c) respondent may be estopped for not raising such issue earlier.

Surprisingly, the respondents counsel received on July 24, 2003 a Letter from the
petitioner dated July 16, 2002 stating that, the BOC was in the course of reviewing the
[36]
deportation case against Mr. Scheer, and that its findings would be given in due time.
On August 20, 2002, the Court of Appeals rendered a Decision in favor of the
respondent granting his petition for certiorari and prohibition and permanently
enjoining the petitioner from deporting the respondent. The decretal portion of the
Decision reads:

[38]

Aggrieved, the respondent therein, now the petitioner, through the Office of the
Solicitor General, appealed to us for relief. The petitioner contends that the Court of
Appeals erred on a question of law in granting the respondents petition in CA-G.R. SP
[39]
No. 71094.
In support of his contention, the Solicitor General has submitted the following
arguments:

WHEREFORE, premises considered, the petitions for certiorari and prohibition are
hereby GRANTED. Accordingly, any order, oral or written, issued by respondent
Commissioner Domingo against petitioner, in relation to his deportation, is hereby
ANNULLED, and respondent Commissioner Domingo is hereby permanently
enjoined/prohibited from deporting petitioner, in so far as this case is concerned.

I. THE WRIT OF MANDAMUS DOES NOT LIE AGAINST THE COMMISSIONER OF THE
BUREAU OF IMMIGRATION TO RESOLVE RESPONDENTS URGENT MOTION FOR
RECONSIDERATION OF THE SUMMARY DEPORTATION ORDER, CONSIDERING THAT IT IS
THE BOARD OF COMMISSIONERS, AND NOT THE COMMISSIONER ALONE, WHICH HAS
AUTHORITY TO MAKE SAID RESOLUTION.

It is likewise ordered that petitioner be released from his confinement/detention in the

Bureau of Immigration UNLESS there is/are fresh new grounds/cases that will warrant
his continued detention.

II. THE WRIT OF CERTIORARI DOES NOT LIE AGAINST THE COMMISSIONER OF THE
BUREAU OF IMMIGRATION, CONSIDERING THAT IT IS THE BOARD OF COMMISSIONERS,
AND NOT THE COMMISSIONER ALONE, WHICH ISSUED THE SUMMARY DEPORTATION
ORDER AND THE OMNIBUS RESOLUTION.

SO ORDERED.

[37]

The Court of Appeals ruled that the German Embassys subsequent issuance of
passport to the respondent before the BOCs issuance of its Omnibus Resolution had
mooted the September 27, 1995 Summary Deportation Order, as well as the arrest and
detention of the respondent. According to the court, it made no sense to require the
respondent to leave the country and thereafter re-apply for admission with the
BOC. Furthermore, since the grounds cited by the BOC in its Summary Deportation
Order no longer existed, there was no factual and legal basis to disqualify the
respondent from staying in the country.
On the issue of whether the members of the BOC were indispensable parties, the
CA ruled as follows:

III. THE WRIT OF PROHIBITION DOES NOT LIE AGAINST THE COMMISSIONER OF THE
BUREAU OF IMMIGRATION, PROHIBITING THE IMPLEMENTATION OF THE SUMMARY
DEPORTATION ORDER AND THE OMNIBUS RESOLUTION, CONSIDERING THAT THE
BOARD OF COMMISSIONERS WAS NOT IMPLEADED AS PARTY-RESPONDENT IN THE
PETITION IN CA-G.R. SP NO. 71094.
IV. ASSUMING BUT WITHOUT ADMITTING THAT THE BOARD OF COMMISSIONERS WAS
PROPERLY IMPLEADED AS PARTY-RESPONDENT IN THE PETITION IN CA-G.R. SP NO.
71094, NEVERTHELESS, THE SUMMARY DEPORTATION ORDER AND THE OMNIBUS
RESOLUTION WERE NOT ISSUED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF (SIC) EXCESS OF JURISDICTION.
V. FURTHER ASSUMING BUT WITHOUT ADMITTING THAT THE BOARD OF
COMMISSIONERS WAS PROPERLY IMPLEADED AS PARTY-RESPONDENT IN THE PETITION

IN CA-G.R. SP NO. 71094, THE COMMISSIONER OF THE BUREAU OF IMMIGRATION DID

NOT ACT WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN IMPLEMENTING THE
[40]
SUMMARY DEPORTATION ORDER AND THE OMNIBUS RESOLUTION.
Elucidating on his first three arguments, the petitioner maintains that the
respondents petition for certiorari, prohibition and mandamus before the Court of
Appeals should have been dismissed because he failed to implead the real party-ininterest as mandated by Rule 3, Section 7 of the Rules of Court, as amended; in this
case, the BOC. According to the Solicitor General, this was a fatal procedural error. The
inclusion of the BOC as respondent in the case was necessary in order that its actions
could be directly attacked and for the court to acquire jurisdiction over it. The fact that
Immigration Commissioner Andrea T. Domingo was impleaded as the sole respondent
was not enough, as she is only one of the four Commissioners.Furthermore, the assailed
Orders were issued by the Board, and not by the Immigration Commissioner alone.
The respondent counters that the petitioner is already estopped from raising this
issue. He argues that In quite a number of jurisprudence, only the Immigration Commissioner is impleaded to
decide whether an alien may stay here or not. The bottom line is petitioner, head of the
Bureau of Immigration, was more than fully heard on its institutional position, a Bureau
which speaks with a single voice in this case. She is in estoppel for not raising the issue
[41]
earlier, either in a timely Comment or during the oral argument
In Caruncho III v. Comelec, it was held that[O]rdinarily, the nonjoinder of an indispensable party or real party in interest is not by
itself a ground for the dismissal of the petition. The court before which the petition is
filed must first require the joinder of such party. It is the noncompliance with said order
that would be a ground for the dismissal of the petition.
But even as the Court of Appeals did not require respondent of such joinder of parties,
the respondent, in fact, begged leave, ad cautelam, in its Reply Memorandum dated July
31, 2002 to implead the Board which speaks with a single voice anyway in this case, and
[42]
therefore, no claim can be made that a valid point of view has not been heard
Moreover, according to the respondent, the petitioner is clearly the BIDs chosen
instrumentality for the relevant purpose. What the respondent ultimately questioned
are the acts or orders of the petitioner for the arrest and immediate deportation of the
respondent by way of implementing the BOCs Summary Deportation Order.
By way of reply, the Office of the Solicitor General asserted that the Summary
Deportation Order and Omnibus Resolution were collegial actions of the BOC and not of
the petitioner alone. Although its Chairperson, the petitioner, is merely a member
thereof, her decisions and actions are still subject to the collective will of the
[43]
majority.

The Ruling of the Court

The BOC is an
Indispensable
Party
We agree with the petitioners contention that the BOC was an indispensable party
to the respondents petition for certiorari, prohibition and mandamus in the Court of
Appeals. The respondent was arrested and detained on the basis of the Summary
Deportation Order of the BOC. The petitioner caused the arrest of the respondent in
obedience to the said Deportation Order. The respondent, in his Memorandum, prayed
that the CA annul not only the Summary Deportation Order of the BOC but also the
latters Omnibus Resolution, and, thus, order the respondents immediate release. The
respondent also prayed that the CA issue a writ of mandamus for the immediate
resolution of his Urgent Motion for Reconsideration. The said motion had to be resolved
by the BOC as the order sought to be resolved and reconsidered was issued by it and not
by the petitioner alone. The powers and duties of the BOC may not be exercised by the
[44]
individual members of the Commission.
Section 7, Rule 3 of the Rules of Court, as amended, requires indispensable parties
to be joined as plaintiffs or defendants. The joinder of indispensable parties is
mandatory. Without the presence of indispensable parties to the suit, the judgment of
[45]
the court cannot attain real finality. Strangers to a case are not bound by the
[46]
judgment rendered by the court. The absence of an indispensable party renders all
subsequent actions of the court null and void. Lack of authority to act not only of the
[47]
absent party but also as to those present. The responsibility of impleading all the
[48]
indispensable parties rests on the petitioner/plaintiff.
However, the non-joinder of indispensable parties is not a ground for the dismissal
of an action. Parties may be added by order of the court on motion of the party or on its
[49]
own initiative at any stage of the action and/or such times as are just. If the
petitioner/plaintiff refuses to implead an indispensable party despite the order of the
court, the latter may dismiss the complaint/petition for the petitioner/plaintiffs failure
[50]
to comply therefor. The remedy is to implead the non-party claimed to be
[51]
indispensable. In this case, the CA did not require the respondent (petitioner therein)
to implead the BOC as respondent, but merely relied on the rulings of the Court in Vivo
[52]
[53]
v. Arca, and Vivo v. Cloribel. The CAs reliance on the said rulings is, however,
misplaced. The acts subject of the petition in the two cases were those of the
Immigration Commissioner and not those of the BOC; hence, the BOC was not a
necessary nor even an indispensable party in the aforecited cases.
The Non-joinder of an
Indispensable Party is not
a Ground for the Dismissal
of the Petition
The Court may be curing the defect in this case by adding the BOC as partypetitioner. The petition should not be dismissed because the second action would only

[54]

[55]

be a repetition of the first. In Salvador, et al., v. Court of Appeals, et al., we held

that this Court has full powers, apart from that power and authority which is inherent,
to amend the processes, pleadings, proceedings and decisions by substituting as partyplaintiff the real party-in-interest. The Court has the power to avoid delay in the
disposition of this case, to order its amendment as to implead the BOC as partyrespondent. Indeed, it may no longer be necessary to do so taking into account the
[56]
unique backdrop in this case, involving as it does an issue of public interest. After all,
the Office of the Solicitor General has represented the petitioner in the instant
proceedings, as well as in the appellate court, and maintained the validity of the
deportation order and of the BOCs Omnibus Resolution. It cannot, thus, be claimed by
the State that the BOC was not afforded its day in court, simply because only the
[57]
petitioner, the Chairperson of the BOC, was the respondent in the CA, and the
[58]
petitioner in the instant recourse. In Alonso v. Villamor, we had the occasion to state:
There is nothing sacred about processes or pleadings, their forms or contents. Their sole
purpose is to facilitate the application of justice to the rival claims of contending parties.
They were created, not to hinder and delay, but to facilitate and promote, the
administration of justice. They do not constitute the thing itself, which courts are always
striving to secure to litigants. They are designed as the means best adapted to obtain
that thing. In other words, they are a means to an end. When they lose the character of
the one and become the other, the administration of justice is at fault and courts are
correspondingly remiss in the performance of their obvious duty.
The CA had Jurisdiction
Over the Petition for
Certiorari, Prohibition
and Mandamus
We do not agree with the petitioners contention that the issue before the CA, as to
the power of the President to determine whether an alien may remain or be deported
from the Philippines, is beyond the appellate courts competence to delve into and
resolve. The contention of the petitioner is based on a wrong premise.
The settled rule is that the authority to exclude or expel aliens by a power affecting
international relation is vested in the political department of the government, and is to
be regulated by treaty or by an act of Congress, and to be executed by the executive
authority according to the regulations so established, except in so far as the judicial
department has been authorized by treaty or by statute, or is required by the
[59]
Constitution to intervene. The judicial department cannot properly express an
opinion upon the wisdom or the justice of the measures executed by Congress in the
[60]
exercise of the power conferred on it, by statute or as required by the Constitution.
Congress may, by statute, allow the decision or order of the Immigration Commissioner
or the BOC to be reviewed by the President of the Philippines or by the courts, on the
grounds and in the manner prescribed by law.
Article VIII, Section 1 of the Constitution has vested judicial power in the Supreme
Court and the lower courts such as the Court of Appeals, as established by law. Although
the courts are without power to directly decide matters over which full discretionary

authority has been delegated to the legislative or executive branch of the government
and are not empowered to execute absolutely their own judgment from that of
[61]
Congress or of the President, the Court may look into and resolve questions of
whether or not such judgment has been made with grave abuse of discretion, when the
act of the legislative or executive department violates the law or the
[62]
Constitution. In Harvy Bridges v. I.F. Wixon, the United States Federal Supreme Court
reversed an Order of Deportation made by the Attorney General for insufficiency of
[63]
evidence and for improper admission of evidence. In Nging v. Nagh, the United States
th
Court of Appeals (9 Circuit Court) held that conclusions of administrative offices on the
issues of facts are invulnerable in courts unless when they are not rendered by fair[64]
minded men; hence, are arbitrary. In Toon v. Stump, the Court ruled that courts may
supervise the actions of the administrative offices authorized to deport aliens and
reverse their rulings when there is no evidence to sustain them. When acts or omissions
of a quasi-judicial agency are involved, a petition for certiorari or prohibition may be
[65]
filed in the Court of Appeals as provided by law or by the Rules of Court, as amended.
In this case, the respondent alleges that the petitioner acted arbitrarily, contrary to
law and with grave abuse of discretion in causing his arrest and detention at a time
when his Urgent Motion for Reconsideration of the BOCs Summary Deportation Order
had yet to be resolved. There was no factual or legal basis for his deportation
considering that he was a documented alien and a law-abiding citizen; the respondent,
thus, prayed for a writ of mandamus to compel the petitioner, the Chairperson of the
BOC, to resolve the said motion. The petition before the CA did not involve the act or
power of the President of the Philippines to deport or exclude an alien from the country.
This being so, the petition necessarily did not call for a substitution of the Presidents
discretion on the matter of the deportation of the respondent with that of the judgment
of the CA.
Irrefragably, the CA had jurisdiction over the petition of the respondent.
The BOC Committed a Grave
Abuse of Discretion Amounting
To Lack or Excess of Jurisdiction
In Issuing its Summary Deportation
Order and Omnibus Resolution; The
Petitioner Committed a Grave Abuse
Of Her Discretion Amounting to
Lack or Excess of Jurisdiction in
Causing the Arrest and Detention
Of The Private Respondent
On the Solicitor Generals fourth and fifth arguments, we are convinced that the
BOC committed a grave abuse of discretion amounting to excess or lack of jurisdiction in
issuing its Summary Deportation Order and Omnibus Resolution, and that the petitioner
committed grave abuse of discretion amounting to excess or lack of jurisdiction in
causing the arrest and detention of the private respondent.
The settled rule is that the entry or stay of aliens in the Philippines is merely a
privilege and a matter of grace; such privilege is not absolute nor permanent and may

be revoked. However, aliens may be expelled or deported from the Philippines only on
grounds and in the manner provided for by the Constitution, the Immigration Act of
1940, as amended, and administrative issuances pursuant thereto. In Mejoff v. Director
[66]
of Prisons, we held, thus:
Moreover, by its Constitution (Art. II, Sec. 3) the Philippines adopts the generally
accepted principles of international law a part of the law of Nation. And in a resolution
entitled Universal Declaration of Human Rights and approved by the General Assembly
of the United Nations of which the Philippines is a member, at its plenary meeting on
December 10, 1948, the right to life and liberty and all other fundamental rights as
applied to all human beings were proclaimed. It was there resolved that All human
beings are born free and equal in degree and rights (Art. 1); that Everyone is entitled to
all the rights and freedom set forth in this Declaration, without distinction of any kind,
such as race, color, sex, language, religion, political or other opinion, nationality or social
origin, property, birth, or other status (Art. 2); that Every one has the right to an
effective remedy by the competent national tribunals for acts violating the fundamental
rights granted him by the Constitution or by law (Art. 8); that No one shall be subjected
to arbitrary arrest, detention or exile (Art. 9); etc.
In this case, the BOC ordered the private respondents deportation on September
27, 1995 without even conducting summary deportation proceedings. The BOC merely
relied on the June 29, 1995 Letter of the German Vice Consul and of the German
Embassys Note Verbale No. 369/95 dated July 26, 1995. It issued the Summary
Deportation Order on September 27, 1995 allegedly under paragraph 3 of Office
Memorandum Order No. 34 dated August 21, 1989 which reads:
3. If a foreign embassy cancels the passport of the alien or does not reissue a valid
passport to him, the alien loses the privilege to remain in the country, under the
Immigration Act, Sections 10 and 15 (Schonemann vs. Santiago, et al., G.R. No. 81461,
30 May 1989). The automatic loss of the privilege obviates deportation proceedings. In
such instance, the Board of Commissioners may issue summary judgment of deportation
which shall be immediately executory.
However, as gleaned from the Summary Deportation Order, the respondent was
ordered deported not only because his passport had already expired; the BOC
speculated that the respondent committed insurance fraud and illegal activities in the
Philippines and would not, thus, be issued a new passport. This, in turn, caused the BOC
to conclude that the respondent was an undesirable alien. Section 37(c) of
Commonwealth Act No. 613, as amended, provides that:
No alien shall be deported without being informed of the specific grounds for
deportation or without being given a hearing under rules of procedure to be prescribed
by the Commissioner of Immigration.

Under paragraphs 4 and 5 of Office Memorandum Order No. 34, an alien cannot be
deported unless he is given a chance to be heard in a full deportation hearing, with the
right to adduce evidence in his behalf, thus:
4. All other cases shall be tried in full deportation hearing, with due observance of the
pertinent provisions of Law Instruction No. 39.
5. In all cases, the right of the alien to be informed of the charges against him, to be
notified of the time and place of hearing, when necessary, to examine the evidence
against him, and to present evidence in his own behalf, where appropriate, shall be
observed.
The respondent was not afforded any hearing at all. The BOC simply concluded
that the respondent committed insurance fraud and illegal activities in Palawan without
any evidence. The respondent was not afforded a chance to refute the charges. He
cannot, thus, be arrested and deported without due process of law as required by the
[67]
Bill of Rights of the Constitution.In Lao Gi v. Court of Appeals, we held that:
Although a deportation proceeding does not partake of the nature of a criminal action,
however, considering that it is a harsh and extraordinary administrative proceeding
affecting the freedom and liberty of a person, the constitutional right of such person to
due process should not be denied. Thus, the provisions of the Rules of Court of the
Philippines particularly on criminal procedure are applicable to deportation proceedings.
It must be noted that the respondent was a permanent resident before his
[68]
passport expired on July 2, 1995. In Chew v. Colding, the United States Federal
Supreme Court ruled:
It is well established that if an alien is a lawful permanent resident of the United States
and remains physically present there, he is a person within the protection of the Fifth
Amendment. He may not be deprived of his life, liberty or property without due process
of law. Although it later may be established, as respondents contend, that petitioner can
be expelled and deported, yet before his expulsion, he is entitled to notice of the nature
of the charge and a hearing at least before an executive or administrative tribunal.
Although Congress may prescribe conditions for his expulsion and deportation, not even
Congress may expel him without allowing him a fair opportunity to be heard.
[69]

As Mr. Justice Murphy said in his concurring opinion in Bridges v. Wixon:

The Bill of Rights belongs to them as well as to all citizens. It protects them as long as
they reside within the boundaries of our land. It protects them in the exercise of the
great individual rights necessary to a sound political and economic democracy.
[70]

According to Vattal, an alien who is a permanent resident in a country is a

member of the new society, at least as a permanent inhabitant, and is a kind of citizen

of inferior order from the native citizens; but is, nevertheless, limited and subject to the
society, without participating in all its advantages. Sir Robert Philconse called them de
[71]
facto, though not de jure citizens of the country of their domicile.
[72]

Such permanent resident may be classified as a denizen, a kind of middle state

between alien and a natural-born subject and partakes of both. Paraphrasing Justice
[73]
Brewer in his dissenting opinion in Fong Yue Ting v. United States, when the right to
liberty and residence is involved, some other protection than the mere discretion of the
petitioner or the BOC is required. We recall the warning of the United States Supreme
[74]
Court in Boyd v. United States:
Illegitimate and unconstitutional practices get their first footing in that way, namely, by
silent approaches and slight deviations from legal modes of procedure. This can only be
obviated by adhering to the rule that constitutional provisions for the security of person
and property should be liberally construed. A close and literal construction deprives
them of half their efficacy, and leads to a gradual depreciation of the right, as if it
consisted more in sound than in substance. It is the duty of the courts to be watchful for
the constitutional rights of the citizen, and against any stealthy encroachments
thereon. Their motto should be obsta principiis.
In sum, the arrest and detention of the respondent and his deportation under the
Summary Deportation Order of the BOC for insurance fraud and illegal activities in
Palawan violated his constitutional and statutory rights to due process.
The Respondents Arrest and
Detention was Premature,
Unwarranted and Arbitrary
We agree that the Immigration Commissioner is mandated to implement a legal
and valid Summary Deportation Order within a reasonable time. But in this case, the
arrest of the respondent in his house, at near midnight, and his subsequent detention
was premature, unwarranted and arbitrary. Like a thunderbolt in the sky, the BID agents
and marines arrested the respondent on June 6, 2002, on orders of the petitioner based
on the September 27, 1995 Summary Deportation Order. Under the basic rudiments of
fair play and due process, the petitioner was required to first resolve the respondents
Urgent Motion for Reconsideration of the said Order, which was filed more than six
years before or on December 5, 1995.
It may be argued that respondents filing of an Urgent Motion for Reconsideration
did not ipso facto suspend the efficacy of the BOCs deportation order. However, such an
argument cannot be sustained in this case because of the extant and peculiar factual
milieu. It bears stressing that more than six years had elapsed, from the time the
Summary Deportation Order was issued, until the respondent was finally arrested.
Supervening facts and circumstances rendered the respondents arrest and detention
unjust, unreasonable, barren of factual and legal basis. The BOC should have set the
respondents motion for hearing to afford him a chance to be heard and adduce
evidence in support thereon. It was bad enough that the BOC issued its Summary
Deportation Order without a hearing; the BOC dealt the respondent a more severe blow

when it refused to resolve his motion for reconsideration before causing his arrest on
June 6, 2002.
As aforestated, the BOC ordered the deportation of the respondent after a
summary proceeding without prior notice on the following grounds: (a) the respondents
German passport had expired; (b) there was a pending criminal case for physical injuries
against him in Germany; (c) the respondent indulged in illegal activities in Palawan; (d)
that in all likelihood, the respondents passport will not be renewed by the German
Embassy as he was wanted for insurance fraud in Germany; and, (e) he was an
undesirable alien. But then, in response to the written query of no less than the
petitioner herself, the German Embassy declared that the respondent was not wanted
by the German police for any crime, including insurance fraud. This could only mean
that the warrant of arrest issued by the German Federal police mentioned in
Note Verbale No. 369/95 had been lifted, and that the respondent was not involved in
any illegal activities in Germany. The criminal case against the respondent for physical
injuries, which does not involve moral turpitude, was dismissed by the German District
Court.Furthermore, there was no evidence of insurance fraud against the respondent.
The BOC issued its Summary Deportation Order without affording the respondent
the right to be heard on his motion and adduce evidence thereon. It merely concluded
that the respondent was involved in illegal activities in Palawan. What made matters
worse was that the BOC indulged in sheer speculation, that the German Embassy is
unlikely to issue a new passport to the respondent. The deportation of aliens should not
be based on mere speculation or a mere product of procrastinations as in this case. As it
turned out, the German Embassy re-issued the respondents passport; he was issued a
temporary passport, and, thereafter, a regular passport, yet to expire on March 12,
2006. The petitioner cannot feign ignorance of this matter because the respondent
himself, six years before he was arrested, informed then Immigration Commissioner
Verceles in a Letter dated March 1, 1996. The respondents letter forms part of the
records of the BOC. There is no evidence on record that the respondent committed any
illegal activities in Palawan. He was even designated as special agent of the NBI, and
was, in fact, issued clearances by the PNP and the NBI no less. Despite all the foregoing,
the petitioner ordered and caused the arrest and detention of the respondent.
What is most nettlesome is the apparent antedating of the BOC Omnibus
Resolution. The records show that the petitioner sought to assuage the respondents
concern on the belated resolution of his pending urgent motion for reconsideration in a
Letter to the latters counsel dated July 18, 2002 in which the petitioner assured the
respondent that the BOC will provide him of its action on the said motion:
Dear Atty. Sagisag,
We respond to your letter of 17 June 2002 by informing you that the case of Mr.
Herbert Scheer is being evaluated by the Board of Commissioners (BOC). The BOC will
provide you of the results of its collegial action in due time.
Very truly yours,

(Sgd.) ANDREA D. DOMINGO

Commissioner

[75]

However, the Omnibus Resolution of the BOC was dated June 14, 2002, although
on its face it was filed with the Records Division of the BID only on July 18, 2002.
The foregoing gave reason for the CA to suspect that the Omnibus Resolution of
[76]
the BOC was antedated. The petition of the respondent in the CA must have jolted
the petitioner and the BOC from its stupor because it came out with its Omnibus
Resolution on July 18, 2002, which was, however, dated as early as June 14, 2002. The
respondent had to wait in anxiety for the BOC to quench his quest for justice. The BOCs
wanton acts amounted to an abdication of its duty to act and/or resolve cases/incidents
with reasonable dispatch. To recall our ruling inBoard of Commissioners v. De la
[77]
[78]
Rosa, citing Sheor v. Bengson, thus:
This inaction or oversight on the part of the immigration officials has created an
anomalous situation which, for reasons of equity, should be resolved in favor of the
minor herein involved.
The petitioner and the BOC should have taken to heart the following
[79]
pronouncement in Commissioner of Immigration v. Fernandez:
In the face of the disclosure that Teban Caoili had been all along working in the Avenue
Electrical Supply Co. (Avesco), located at No. 653 Rizal Avenue, Manila, until his arrest,
and the documentary evidence showing that he had been issued a Philippine Passport;
had regularly paid his Residence Tax Certificates (A & B), and filed Income Tax Returns, a
finding of fact is necessary whether the Commissioner really had intended to notify
Teban Caoili of the exclusion proceedings the Board had conducted in his absence.
While it may be true that the proceedings is purely administrative in nature, such a
circumstance did not excuse the serving of notice. There are cardinal primary rights
which must be respected even in proceedings of administrative character, the first of
which is the right of the party interested or affected to present his own case and submit
[80]
evidence in support thereof.
...
Since the proceedings affected Caoilis status and liberty, notice should have been given.
And in the light of the actuations of the new Board of Commissioners, there is a
necessity of determining whether the findings of the Board of Special Inquiry and the
old Board of Commissioners are correct or not. This calls for an examination of the
[81]
evidence, and, the law on the matter.
Apparently, the BOC did not bother to review its own records in resolving the
respondents Urgent Motion for Reconsideration. It anchored its Omnibus Resolution
only on the following: the membership of the BOC had changed when it issued its
September 27, 1995 Summary Deportation Order and under Commonwealth Act No.

613, Section 27(b); the BOC is precluded from reversing a previous order issued by
[82]
C and, the September 27, 1995 Order of the BOC had become final and could no
it;
[83]
longer be reviewed and reversed by it after the lapse of one year. However, the
rulings cited by the petitioner are not applicable in the instant case, as the said cases
cited involve appeals to the BOC from the decisions of the Board of Special Inquiry (BSI).
[84]
[85]
In Sy v. Vivo and Lou v. Vivo, we ruled that under Section 27(b) of Commonwealth
Act No. 613, as amended, the Decision of the BOC on appeal from the decision of the BSI
becomes final and executory after one year:
(b) A board of special inquiry shall have authority (1) to determine whether an alien
seeking to enter or land in the Philippines shall be allowed to enter or land or shall be
excluded, and (2) to make its findings and recommendations in all the cases provided for
in section twenty-nine of this Act wherein the Commissioner of Immigration may admit
an alien who is otherwise inadmissible. For this purpose, the board or any member
thereof, may administer oaths and take evidence and in case of necessity may
issue subpoena and/or subpoena duces tecum. The hearing of all cases brought before a
board of special inquiry shall be conducted under rules of procedure to be prescribed by
the Commissioner of Immigration. The decision of any two members of the board shall
prevail and shall be final unless reversed on appeal by the Board of Commissioners as
hereafter stated, or in the absence of an appeal, unless reversed by the Board of
Commissioners after a review by it, motu propio, of the entire proceedings within one
year from the promulgation of the decision.
[86]

In Commissioner of Immigration v. Fernandez, we held that the BOC composed

of new members is precluded from reversing, motu proprio, the decision of the BOC on
appeal from a BSI decision. But not to be ignored was our ruling that at any rate, the
issue of authority should be made in accordance with the procedure established by law,
[87]
with a view to protecting the rights of individuals.
In this case, the Summary Deportation Order was issued by the BOC in the exercise
of its authority under Office Memorandum Order No. 34, and not in the exercise of its
appellate jurisdiction of BSI decisions. There is no law nor rule which provides that a
Summary Deportation Order issued by the BOC in the exercise of its authority becomes
[88]
final after one year from its issuance, or that the aggrieved party is barred from filing
a motion for a reconsideration of any order or decision of the BOC. The Rules of Court
[89]
may be applied in a suppletory manner to deportation proceedings and under Rule
37, a motion for reconsideration of a decision or final order may be filed by the
aggrieved party.
Neither is there any law nor rule providing that the BOC, composed of new
members, cannot revise a Summary Deportation Order previously issued by a different
body of Commissioners. The BOC that issued the Summary Deportation Order and the
BOC which resolved the respondents Urgent Motion for Reconsideration are one and
the same government entity, with the same powers and duties regardless of its
membership. Similarly, an RTC judge who replaces another judge who presided over a
case may review the judgment or order of his predecessor as long as the said judgment

or order has not as yet become final or executory. The act subject of review is not the
act of the judge but the act of the court.
The petitioners contention that it failed to resolve the respondents motion for
reconsideration because of the change of administration in the BOC was branded by the
CA as flimsy, if not bordering on the absurd:
Firstly, it was issued three days (June 14, 2002) after petitioner filed this instant petition
on June 11, 2002 or almost seven years from the time the motion for reconsideration
was filed;
Secondly, respondents counsels excuse that it took such time to resolve it because it
was only later that the motion for reconsideration was discovered because of change of
[90]
administration, is flimsy, if not bordering on the absurd;
The Issuance of a New and Regular
Passport to the Respondent
Rendered the Summary
Deportation Order Moot and
Academic, and the Omnibus
Resolution of the BOC Lacking
in Legal Basis
We agree with the petitioner that a foreign embassys cancellation of the passport
it had issued to its citizens, or its refusal to issue a new one in lieu of a passport that has
expired, will result in the loss of the aliens privilege to stay in this country and his
subsequent deportation therefrom. But even the BOC asserted in its Summary
Deportation Order that an embassys issuance of a new passport to any of its citizens
may bar the latters deportation, citing the resolution of this Court in Schonemann v.
[91]
Commissioner Santiago.
Irrefragably, Commissioner Verceles was mandated to cause the arrest of the
respondent preparatory to his deportation from the Philippines. However, there was no
fixed period in the Order within which to comply with the same. The Commissioner is
not mandated to deport an alien immediately upon receipt of the BOCs deportation
order. It is enough that the Commissioner complies with the Order within a reasonable
[92]
time, which, in Mejoff v. Director of Prisons, we held to connote as follows:
The meaning of reasonable time depends upon the circumstances, specially the
difficulties of obtaining a passport, the availability of transportation, the diplomatic
arrangements with the governments concerned and the efforts displayed to send the
deportee away; but the Court warned that under established precedents, too long a
detention may justify the issuance of a writ of habeas corpus.
In this case, the BOC had yet to act on the respondents Urgent Motion for
Reconsideration. The respondent was also given a chance to secure a clearance and a
new passport with the German Embassy. After all, the possibility that the German

Embassy would renew the respondents passport could not be ruled out. This was
exactly what happened: the German Embassy issued a new passport to the respondent
on March 12, 1996 after the German District Court dismissed the case for physical
injuries. Thus, the respondent was no longer an undocumented alien; nor was he an
undesirable one for that matter.
The petitioner even admits that there is no longer a legal or factual basis to
disqualify the respondent from remaining in the country as a permanent resident. Yet,
the OSG insists that he has to be deported first so that the BOCs Summary Deportation
Order could be implemented. This contention was rejected by the CA, thus:
During the hearing of petitioners prayer for issuance of a writ of preliminary injunction
before Us, respondents counsel from the Office of the Solicitor General had the
occasion to manifest in open court that the State has no opposition to petitioners stay in
the country provided he first leave and re-enter and re-apply for residency if only to
comply with the Summary Deportation Order of 1995. That, to Our mind, seems
preposterous, if not ridiculous. An individuals human rights and rights to freedom,
liberty and self-determination recognize no boundaries in the democratic, free and
civilized world. Such rights follow him wherever he may be. If presently, there is no
factual or legal impediment to disqualify petitioner in his stay in the country, other than
allegedly those relied upon in the Summary Deportation Order of 1995 (as hereinbefore
discussed, had ceased to exist), requiring petitioner to leave the country and re-enter
and re-apply for residency makes little sense or no sense at all, more so, in the case of
petitioner who, for many years past, had lived herein and nurtured a family that is
Filipino.
Thus, opined, We, therefore, believe and hereby rule, that there is presently every
reason to enjoin/prohibit the Bureau of Immigration, respondent Commissioner
[93]
Domingo in particular, from presently deporting petitioner.
We agree with the Court of Appeals. The Summary Deportation Order had been
rendered moot and academic upon the German Embassys issuance of a new passport to
the respondent. The respondent had been in the Philippines as a permanent resident
since July 18, 1986, and had married a Filipino citizen, with whom he has two children.
He is not a burden to the country nor to the people of Palawan. He put up, and has been
managing, the Bavaria Restaurant with about 30 employees. He has no pending criminal
case; nor does he have any derogatory record. The respondent was allowed by then
Immigration Commissioner Verceles to renew his passport and was given time to secure
a clearance from the German Embassy.The respondent was able to do so. The case
against him for physical injuries was dismissed by the German District Court. Thus, the
inceptual basis for the respondents deportation had ceased to exist.
The power to deport is a police matter against undesirable aliens, whose presence
in the country is found to be injurious to the public good. We believe that the
deportation of the respondent late in the day did not achieve the said purpose. The
petitioner admitted that there is no longer a factual and legal basis to disqualify the
respondent from staying in the country.He is not an undesirable alien; nor is his

presence in the country injurious to public good. He is even an entrepreneur and a

productive member of society.
Arrest, detention and deportation orders of aliens should not be enforced blindly
and indiscriminately, without regard to facts and circumstances that will render the
[94]
same unjust, unfair or illegal. To direct the respondent to leave the country first
[95]
before allowing him re-entry is downright iniquitous. If the respondent does leave the
country, he would thereby be accepting the force and effect of the BOCs Summary
Deportation Order with its attendant infirmities. He will thereby lose his permanent
resident status and admit the efficacy of the cancellation of his permanent resident visa.
Moreover, his entry into the country will be subject to such conditions as the petitioner
may impose.
The deportation of an alien is not intended as a punishment or penalty. But in a
[96]
real sense, it is. In Bridges v. Wixon, Mr. Justice Murphy declared that the impact of
deportation upon the life of an alien is often as great if not greater than the imposition
of a criminal sentence. In dealing with deportation, there is no justifiable reason for
disregarding the democratic and human tenets of our legal system and descending to
the practices of despotism. As Justice Brewer opined in Fong Yue Ting v. United
[97]
States, deportation is a punishment because it requires first, an arrest, a deprivation
of liberty and second, a removal from home, from family, from business, from
property. To be forcibly taken away from home, family, business and property and sent
across the ocean to a distant land is punishment; and that oftentimes is most severe and
cruel. It would be putting salt on the respondents woes occasioned by the BOCs
ineptitude. Considering the peculiar backdrop and the equities in this case, the
respondents deportation and the cancellation of his permanent resident visa as a
precondition to his re-entry into this country is severe and cruel; it is a form of
punishment.
[98]

Our ruling in Vivo v. Cloribel, has no application in this case, precisely because
the factual milieu here is entirely different. In that case, the Commissioner of
Immigration required the respondents to leave the country on or before September 12,
1962, because their stay in the country as approved by the Secretary of Justice had been
[99]
cancelled. Our ruling in Bing v. Commission on Immigration, even buttresses the case
for the respondent since we ruled therein that an alien entitled to a permanent stay
cannot be deported without being accorded due notice and hearing.
IN LIGHT OF ALL THE FOREGOING, the petition is DENIED. The Decision of the
Court of Appeals is AFFIRMED.
SO ORDERED.
Puno, (Chairman), Quisumbing, Austria-Martinez, and Tinga, JJ., concur.

2. In 1968, earth station standard "A" antenna (Pinugay I) was

established. Pinugay I provided direct satellite communication links
with the Pacific Ocean Region (the United States, Australia, Canada,
Hawaii, Guam, Korea, Thailand, China [PROC], New Zealand and
Brunei) thru the Pacific Ocean INTELSAT satellite.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 84818 December 18, 1989
PHILIPPINE COMMUNICATIONS SATELLITE CORPORATION, petitioner,
vs.
JOSE LUIS A. ALCUAZ, as NTC Commissioner, and NATIONAL TELECOMMUNICATIONS
COMMISSION,respondents.

3. In 1971, a second earth station standard "A" antenna(Pinugay III)

was established. Pinugay II provided links with the Indian Ocean
Region (major cities in Europe, Middle East, Africa, and other Asia
Pacific countries operating within the region) thru the Indian Ocean
INTELSAT satellite.
4. In 1983, a third earth station standard "B" antenna (Pinugay III) was
established to temporarily assume the functions of Pinugay I and then
Pinugay II while they were being refurbished. Pinugay III now serves as
spare or reserved antenna for possible contingencies.

Rilloraza, Africa, De Ocampo & Africa for petitioner.

Victor de la Serna for respondent Alcuaz.
REGALADO, J.:
This case is posed as one of first impression in the sense that it involves the public utility
services of the petitioner Philippine Communications Satellite Corporation
(PHILCOMSAT, for short) which is the only one rendering such services in the
Philippines.
1

The petition before us seeks to annul and set aside an Order issued by respondent
Commissioner Jose Luis Alcuaz of the National Telecommunications Commission
(hereafter, NTC), dated September 2, 1988, which directs the provisional reduction of
the rates which may be charged by petitioner for certain specified lines of its services by
fifteen percent (15%) with the reservation to make further reductions later, for being
violative of the constitutional prohibition against undue delegation of legislative power
and a denial of procedural, as well as substantive, due process of law.
2

The antecedental facts as summarized by petitioner are not in dispute. By virtue of

Republic Act No. 5514, PHILCOMSAT was granted "a franchise to establish, construct,
maintain and operate in the Philippines, at such places as the grantee may select,
station or stations and associated equipment and facilities for international satellite
communications." Under this franchise, it was likewise granted the authority to
"construct and operate such ground facilities as needed to deliver telecommunications
services from the communications satellite system and ground terminal or terminals."

5. In 1983, PHILCOMSAT constructed and installed a standard "B"

antenna at Clark Air Field, Pampanga as a television receive-only earth
station which provides the U.S. Military bases with a 24-hour
television service.
6. In 1989, petitioner completed the installation of a third standard
"A" earth station (Pinugay IV) to take over the links in Pinugay I due to
3
obsolescence.
By designation of the Republic of the Philippines, the petitioner is also the sole signatory
for the Philippines in the Agreement and the Operating Agreement relating to the
International Telecommunications Satellite Organization (INTELSAT) of 115 member
nations, as well as in the Convention and the Operating Agreement of the International
Maritime Satellite Organization (INMARSAT) of 53 member nations, which two global
commercial telecommunications satellite corporations were collectively established by
various states in line with the principles set forth in Resolution 1721 (XVI) of the General
Assembly of the United Nations.
Since 1968, the petitioner has been leasing its satellite circuits to:
1. Philippine Long Distance Telephone Company;
2. Philippine Global Communications, Inc.;

Pursuant to said franchise, petitioner puts on record that it undertook the following
activities and established the following installations:
1. In 1967, PHILCOMSAT established its provisional earth station in
Pinugay, Rizal.

3. Eastern Telecommunications Phils., Inc.;

4. Globe Mackay Cable and Radio Corp. ITT; and

5. Capitol Wireless, Inc.

PHILCOMSAT assails the above-quoted order for the following reasons:

or their predecessors-in-interest. The satellite services thus provided by petitioner

enable said international carriers to serve the public with indispensable communication
services, such as overseas telephone, telex, facsimile, telegrams, high speed data, live
television in full color, and television standard conversion from European to American or
vice versa.

1. The enabling act (Executive Order No. 546) of respondent NTC empowering it to fix
rates for public service communications does not provide the necessary standards
constitutionally required, hence there is an undue delegation of legislative power,
particularly the adjudicatory powers of NTC;

Under Section 5 of Republic Act No. 5514, petitioner was exempt from the jurisdiction of
the then Public Service Commission, now respondent NTC. However, pursuant to
Executive Order No. 196 issued on June 17, 1987, petitioner was placed under the
jurisdiction, control and regulation of respondent NTC, including all its facilities and
services and the fixing of rates. Implementing said Executive Order No. 196,
respondents required petitioner to apply for the requisite certificate of public
convenience and necessity covering its facilities and the services it renders, as well as
the corresponding authority to charge rates therefor.
Consequently, under date of September 9, 1987, petitioner filed with respondent NTC
4
an application for authority to continue operating and maintaining the same facilities it
has been continuously operating and maintaining since 1967, to continue providing the
international satellite communications services it has likewise been providing since
1967, and to charge the current rates applied for in rendering such services. Pending
hearing, it also applied for a provisional authority so that it can continue to operate and
maintain the above mentioned facilities, provide the services and charge therefor the
aforesaid rates therein applied for.
On September 16, 1987, petitioner was granted a provisional authority to continue
operating its existing facilities, to render the services it was then offering, and to charge
the rates it was then charging. This authority was valid for six (6) months from the date
5
of said order. When said provisional authority expired on March 17, 1988, it was
extended for another six (6) months, or up to September 16, 1988.
The NTC order now in controversy had further extended the provisional authority of the
petitioner for another six (6) months, counted from September 16, 1988, but it directed
the petitioner to charge modified reduced rates through a reduction of fifteen percent
(15%) on the present authorized rates. Respondent Commissioner ordered said
reduction on the following ground:
The Commission in its on-going review of present service rates takes
note that after an initial evaluation by the Rates Regulation Division of
the Common Carriers Authorization Department of the financial
statements of applicant, there is merit in a REDUCTION in some of
applicant's rates, subject to further reductions, should the Commission
finds (sic) in its further evaluation that more reduction should be
effected either on the basis of a provisional authorization or in the
6
final consideration of the case.

2. Assuming arguendo that the rate-fixing power was properly and constitutionally
conferred, the same was exercised in an unconstitutional manner, hence it is ultra vires,
in that (a) the questioned order violates procedural due process for having been issued
without prior notice and hearing; and (b) the rate reduction it imposes is unjust,
unreasonable and confiscatory, thus constitutive of a violation of substantive due
process.
I. Petitioner asseverates that nowhere in the provisions of Executive Order No. 546,
providing for the creation of respondent NTC and granting its rate-fixing powers, nor of
Executive Order No. 196, placing petitioner under the jurisdiction of respondent NTC,
can it be inferred that respondent NTC is guided by any standard in the exercise of its
rate-fixing and adjudicatory powers. While petitioner in its petition-in-chief raised the
issue of undue delegation of legislative power, it subsequently clarified its said
submission to mean that the order mandating a reduction of certain rates is undue
delegation not of legislative but of quasi-judicial power to respondent NTC, the exercise
of which allegedly requires an express conferment by the legislative body.
Whichever way it is presented, petitioner is in effect questioning the constitutionality of
Executive Orders Nos. 546 and 196 on the ground that the same do not fix a standard
for the exercise of the power therein conferred.
We hold otherwise.
Fundamental is the rule that delegation of legislative power may be sustained only upon
the ground that some standard for its exercise is provided and that the legislature in
making the delegation has prescribed the manner of the exercise of the delegated
power. Therefore, when the administrative agency concerned, respondent NTC in this
case, establishes a rate, its act must both be non- confiscatory and must have been
established in the manner prescribed by the legislature; otherwise, in the absence of a
fixed standard, the delegation of power becomes unconstitutional. In case of a
delegation of rate-fixing power, the only standard which the legislature is required to
prescribe for the guidance of the administrative authority is that the rate be reasonable
and just. However, it has been held that even in the absence of an express requirement
7
as to reasonableness, this standard may be implied.
It becomes important then to ascertain the nature of the power delegated to
respondent NTC and the manner required by the statute for the lawful exercise thereof.

Pursuant to Executive Orders Nos. 546 and 196, respondent NTC is empowered, among
others, to determine and prescribe rates pertinent to the operation of public service
communications which necessarily include the power to promulgate rules and
regulations in connection therewith. And, under Section 15(g) of Executive Order No.
546, respondent NTC should be guided by the requirements of public safety, public
interest and reasonable feasibility of maintaining effective competition of private
entities in communications and broadcasting facilities. Likewise, in Section 6(d) thereof,
which provides for the creation of the Ministry of Transportation and Communications
with control and supervision over respondent NTC, it is specifically provided that the
national economic viability of the entire network or components of the communications
systems contemplated therein should be maintained at reasonable rates. We need not
go into an in-depth analysis of the pertinent provisions of the law in order to conclude
that respondent NTC, in the exercise of its rate-fixing power, is limited by the
requirements of public safety, public interest, reasonable feasibility and reasonable
rates, which conjointly more than satisfy the requirements of a valid delegation of
legislative power.
II. On another tack, petitioner submits that the questioned order violates procedural
due process because it was issued motu proprio, without notice to petitioner and
without the benefit of a hearing. Petitioner laments that said order was based merely on
an "initial evaluation," which is a unilateral evaluation, but had petitioner been given an
opportunity to present its side before the order in question was issued, the confiscatory
nature of the rate reduction and the consequent deterioration of the public service
could have been shown and demonstrated to respondents. Petitioner argues that the
function involved in the rate fixing-power of NTC is adjudicatory and hence quasijudicial, not quasi- legislative; thus, notice and hearing are necessary and the absence
thereof results in a violation of due process.
Respondents admit that the application of a policy like the fixing of rates as exercised by
administrative bodies is quasi-judicial rather than quasi-legislative: that where the
function of the administrative agency is legislative, notice and hearing are not required,
but where an order applies to a named person, as in the instant case, the function
8
involved is adjudicatory. Nonetheless, they insist that under the facts obtaining the
order in question need not be preceded by a hearing, not because it was issued
pursuant to respondent NTC's legislative function but because the assailed order is
merely interlocutory, it being an incident in the ongoing proceedings on petitioner's
application for a certificate of public convenience; and that petitioner is not the only
primary source of data or information since respondent is currently engaged in a
continuing review of the rates charged.
We find merit in petitioner's contention.
9

In Vigan Electric Light Co., Inc. vs. Public Service Commission, we made a categorical
classification as to when the rate-filing power of administrative bodies is quasi-judicial
and when it is legislative, thus:

Moreover, although the rule-making power and even the power to fix
rates- when such rules and/or rates are meant to apply to all
enterprises of a given kind throughout the Philippines-may partake of
a legislative character, such is not the nature of the order complained
of. Indeed, the same applies exclusively to petitioner herein. What is
more, it is predicated upon the finding of fact-based upon a report
submitted by the General Auditing Office-that petitioner is making a
profit of more than 12% of its invested capital, which is denied by
petitioner. Obviously, the latter is entitled to cross-examine the maker
of said report, and to introduce evidence to disprove the contents
thereof and/or explain or complement the same, as well as to refute
the conclusion drawn therefrom by the respondent. In other words, in
making said finding of fact, respondent performed a function
partaking of a quasi-judicial character, the valid exercise of which
demands previous notice and hearing.
This rule was further explained in the subsequent case of The Central Bank of the
10
Philippines vs. Cloribel, et al. to wit:
It is also clear from the authorities that where the function of the
administrative body is legislative, notice of hearing is not required by
due process of law (See Oppenheimer, Administrative Law, 2 Md. L.R.
185, 204, supra, where it is said: 'If the nature of the administrative
agency is essentially legislative, the requirements of notice and
hearing are not necessary. The validity of a rule of future action which
affects a group, if vested rights of liberty or property are not involved,
is not determined according to the same rules which apply in the case
of the direct application of a policy to a specific individual) ... It is said
in 73 C.J.S. Public Administrative Bodies and Procedure, sec. 130,
pages 452 and 453: 'Aside from statute, the necessity of notice and
hearing in an administrative proceeding depends on the character of
the proceeding and the circumstances involved. In so far as
generalization is possible in view of the great variety of administrative
proceedings, it may be stated as a general rule that notice and hearing
are not essential to the validity of administrative action where the
administrative body acts in the exercise of executive, administrative,
or legislative functions; but where a public administrative body acts in
a judicial or quasi-judicial matter, and its acts are particular and
immediate rather than general and prospective, the person whose
rights or property may be affected by the action is entitled to notice
11
and hearing.
The order in question which was issued by respondent Alcuaz no doubt contains all the
attributes of a quasi-judicial adjudication. Foremost is the fact that said order pertains
exclusively to petitioner and to no other. Further, it is premised on a finding of fact,
although patently superficial, that there is merit in a reduction of some of the rates

charged- based on an initial evaluation of petitioner's financial statements-without

affording petitioner the benefit of an explanation as to what particular aspect or aspects
of the financial statements warranted a corresponding rate reduction. No rationalization
was offered nor were the attending contingencies, if any, discussed, which prompted
respondents to impose as much as a fifteen percent (15%) rate reduction. It is not farfetched to assume that petitioner could be in a better position to rationalize its rates
vis-a-vis the viability of its business requirements. The rates it charges result from an
exhaustive and detailed study it conducts of the multi-faceted intricacies attendant to a
public service undertaking of such nature and magnitude. We are, therefore, inclined to
lend greater credence to petitioner's ratiocination that an immediate reduction in its
rates would adversely affect its operations and the quality of its service to the public
considering the maintenance requirements, the projects it still has to undertake and the
financial outlay involved. Notably, petitioner was not even afforded the opportunity to
cross-examine the inspector who issued the report on which respondent NTC based its
questioned order.
At any rate, there remains the categorical admission made by respondent NTC that the
questioned order was issued pursuant to its quasi-judicial functions. It, however, insists
that notice and hearing are not necessary since the assailed order is merely incidental to
the entire proceedings and, therefore, temporary in nature. This postulate is bereft of
merit.
While respondents may fix a temporary rate pending final determination of the
application of petitioner, such rate-fixing order, temporary though it may be, is not
exempt from the statutory procedural requirements of notice and hearing, as well as
the requirement of reasonableness. Assuming that such power is vested in NTC, it may
not exercise the same in an arbitrary and confiscatory manner. Categorizing such an
order as temporary in nature does not perforce entail the applicability of a different rule
of statutory procedure than would otherwise be applied to any other order on the same
matter unless otherwise provided by the applicable law. In the case at bar, the
applicable statutory provision is Section 16(c) of the Public Service Act which provides:
Section 16. Proceedings of the Commission, upon notice and hearing
the Commission shall have power, upon proper notice and hearing in
accordance with the rules and provisions of this Act, subject to the
limitations and exceptions mentioned and saving provisions to the
contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, ... which shall be
imposed, observed and followed thereafter by any public service; ...
There is no reason to assume that the aforesaid provision does not apply to respondent
NTC, there being no limiting, excepting, or saving provisions to the contrary in Executive
Orders Nos. 546 and 196.

It is thus clear that with regard to rate-fixing, respondent has no authority to make such
order without first giving petitioner a hearing, whether the order be temporary or
permanent, and it is immaterial whether the same is made upon a complaint, a
summary investigation, or upon the commission's own motion as in the present case.
That such a hearing is required is evident in respondents' order of September 16, 1987
in NTC Case No. 87-94 which granted PHILCOMSAT a provisional authority "to continue
operating its existing facilities, to render the services it presently offers, and to charge
the rates as reduced by them "under the condition that "(s)ubject to hearing and the
final consideration of the merit of this application, the Commission may modify, revise
12
or amend the rates ..."
While it may be true that for purposes of rate-fixing respondents may have other
sources of information or data, still, since a hearing is essential, respondent NTC should
act solely on the basis of the evidence before it and not on knowledge or information
otherwise acquired by it but which is not offered in evidence or, even if so adduced,
petitioner was given no opportunity to controvert.
Again, the order requires the new reduced rates to be made effective on a specified
date. It becomes a final legislative act as to the period during which it has to remain in
13
force pending the final determination of the case. An order of respondent NTC
prescribing reduced rates, even for a temporary period, could be unjust, unreasonable
or even confiscatory, especially if the rates are unreasonably low, since the utility
permanently loses its just revenue during the prescribed period. In fact, such order is in
effect final insofar as the revenue during the period covered by the order is concerned.
Upon a showing, therefore, that the order requiring a reduced rate is confiscatory, and
will unduly deprive petitioner of a reasonable return upon its property, a declaration of
its nullity becomes inductible, which brings us to the issue on substantive due process.
III. Petitioner contends that the rate reduction is confiscatory in that its implementation
would virtually result in a cessation of its operations and eventual closure of business.
On the other hand, respondents assert that since petitioner is operating its
communications satellite facilities through a legislative franchise, as such grantee it has
no vested right therein. What it has is merely a privilege or license which may be
revoked at will by the State at any time without necessarily violating any vested
property right of herein petitioner. While petitioner concedes this thesis of respondent,
it counters that the withdrawal of such privilege should nevertheless be neither
whimsical nor arbitrary, but it must be fair and reasonable.
There is no question that petitioner is a mere grantee of a legislative franchise which is
subject to amendment, alteration, or repeal by Congress when the common good so
14
requires. Apparently, therefore, such grant cannot be unilaterally revoked absent a
showing that the termination of the operation of said utility is required by the common
good.
The rule is that the power of the State to regulate the conduct and business of public
utilities is limited by the consideration that it is not the owner of the property of the

utility, or clothed with the general power of management incident to ownership, since
the private right of ownership to such property remains and is not to be destroyed by
the regulatory power. The power to regulate is not the power to destroy useful and
harmless enterprises, but is the power to protect, foster, promote, preserve, and
control with due regard for the interest, first and foremost, of the public, then of the
utility and of its patrons. Any regulation, therefore, which operates as an effective
confiscation of private property or constitutes an arbitrary or unreasonable
infringement of property rights is void, because it is repugnant to the constitutional
15
guaranties of due process and equal protection of the laws.
Hence, the inherent power and authority of the State, or its authorized agent, to
regulate the rates charged by public utilities should be subject always to the
requirement that the rates so fixed shall be reasonable and just. A commission has no
power to fix rates which are unreasonable or to regulate them arbitrarily. This basic
requirement of reasonableness comprehends such rates which must not be so low as to
16
be confiscatory, or too high as to be oppressive.
What is a just and reasonable rate is not a question of formula but of sound business
17
judgment based upon the evidence it is a question of fact calling for the exercise of
18
discretion, good sense, and a fair, enlightened and independent judgment. In
determining whether a rate is confiscatory, it is essential also to consider the given
situation, requirements and opportunities of the utility. A method often employed in
determining reasonableness is the fair return upon the value of the property to the
public utility. Competition is also a very important factor in determining the
reasonableness of rates since a carrier is allowed to make such rates as are necessary to
19
meet competition.
A cursory perusal of the assailed order reveals that the rate reduction is solely and
primarily based on the initial evaluation made on the financial statements of petitioner,
contrary to respondent NTC's allegation that it has several other sources of information
without, however, divulging such sources. Furthermore, it did not as much as make an
attempt to elaborate on how it arrived at the prescribed rates. It just perfunctorily
declared that based on the financial statements, there is merit for a rate reduction
without any elucidation on what implications and conclusions were necessarily inferred
by it from said statements. Nor did it deign to explain how the data reflected in the
financial statements influenced its decision to impose a rate reduction.
On the other hand, petitioner may likely suffer a severe drawback, with the consequent
detriment to the public service, should the order of respondent NTC turn out to be
unreasonable and improvident. The business in which petitioner is engaged is unique in
that its machinery and equipment have always to be taken in relation to the equipment
on the other end of the transmission arrangement. Any lack, aging, acquisition,
rehabilitation, or refurbishment of machinery and equipment necessarily entails a major
adjustment or innovation on the business of petitioner. As pointed out by petitioner,
any change in the sending end abroad has to be matched with the corresponding
change in the receiving end in the Philippines. Conversely, any in the receiving end

abroad has to be matched with the corresponding change in the sending end in the
Philippines. An inability on the part of petitioner to meet the variegations demanded be
technology could result in a deterioration or total failure of the service of satellite
communications.
At present, petitioner is engaged in several projects aimed at refurbishing,
rehabilitating, and renewing its machinery and equipment in order to keep up with the
continuing charges of the times and to maintain its facilities at a competitive level with
the technological advances abroad. There projected undertakings were formulated on
the premise that rates are maintained at their present or at reasonable levels. Hence, an
undue reduction thereof may practically lead to a cessation of its business. While we
concede the primacy of the public interest in an adequate and efficient service, the
same is not necessarily to be equated with reduced rates. Reasonableness in the rates
assumes that the same is fair to both the public utility and the consumer.
Consequently, we hold that the challenged order, particularly on the issue of rates
provided therein, being violative of the due process clause is void and should be
nullified. Respondents should now proceed, as they should heretofore have done, with
the hearing and determination of petitioner's pending application for a certificate of
public convenience and necessity and in which proceeding the subject of rates involved
in the present controversy, as well as other matter involved in said application, be duly
adjudicated with reasonable dispatch and with due observance of our pronouncements
herein.
WHEREFORE, the writ prayed for is GRANTED and the order of respondents, dated
September 2, 1988, in NTC Case No. 87-94 is hereby SET ASIDE. The temporary
restraining order issued under our resolution of September 13, 1988, as specifically
directed against the aforesaid order of respondents on the matter of existing rates on
petitioner's present authorized services, is hereby made permanent.
SO ORDERED.
Fernan, (C.J.), Narvasa, Melencio-Herrera, Cruz, Paras, Feliciano, Gancayco, Bidin,
Sarmiento, Cortes, Grio-Aquino and Medialdea, JJ., concur.
Padilla, J., took no part.

Republic of the Philippines

SUPREME COURT
Manila

Sorsogon stating that under Executive Order No. 546, a certificate of public convenience
and necessity is mandatory for the operation of communication utilities and services
including radio communications.

SECOND DIVISION

On September 4, 1984, the petitioner filed a motion for reconsideration which was
denied in an order dated September 12, 1984.

G.R. No. L-68729 May 29, 1987

RADIO COMMUNICATIONS OF THE PHILIPPINES, INC., petitioner,
vs.
NATIONAL TELECOMMUNICATIONS COMMISSION and KAYUMANGGI RADIO
NETWORK INCORPORATED,respondents.
GUTIERREZ, JR, J.:
This petition seeks the reversal of the decision of the National Telecommunications
Commission (NTC) which ordered petitioner Radio Communications of the Philippines,
Incorporated (RCPI) to desist from operating its radio telephone services in Catarman,
Northern Samar; San Jose, Occidental Mindoro; and Sorsogon, Sorsogon.
Petitioner has been operating a radio communications system since 1957 under its
legislative franchise granted by Republic Act No. 2036 which was enacted on June 23,
1957.
In 1968, the petitioner established a radio telegraph service in Sorsogon, Sorsogon. In
1971, another radio telegraph service was put up in San Jose, Mindoro followed by
another in Catarman, Samar in 1976. The installation of radio telephone services started
in 1971 in San Jose, Mindoro; then in Sorsogon, Sorsogon and Catarman, Samar in 1983.
In a decision dated June 24, 1980 in NTC Case No. 80-08, private respondent
Kayumanggi Radio Network Incorporated was authorized by the public respondent to
operate radio communications systems in Catarman, Samar and in San Jose, Mindoro.

On October 1, 1984, the present petition was filed raising the issue of whether or not
petitioner RCPI, a grantee of a legislative franchise to operate a radio company, is
required to secure a certificate of public convenience and necessity before it can validly
operate its radio stations including radio telephone services in Catarman, Northern
Samar; San Jose, Occidental Mindoro; and Sorsogon, Sorsogon.
The petitioner's main argument states that the abolition of the Public Service
Commission under Presidential Decree No. 1 and the creation of the National
Telecommunications Commission under Executive Order No. 546 to replace the defunct
Public Service Commission did not affect sections 14 and 15 of the Public Service Law
(Commonwealth Act. No. 146, as amended).
The provisions of the Public Service Law pertinent to the petitioner's allegation are as
follows:
Section 13. (a) the Commission shall have jurisdiction, supervision, and
control over all public services and their franchises, equipment and
other properties, and in the exercise of its authority, it shall have the
necessary powers and the aid of public force: ...
Section 14. The following are exempted from the provisions of the
preceding section:
xxx xxx xxx
(d) Radio companies except with respect to the fixing of rates;

On December 14, 1983, the private respondent filed a complaint with the NTC alleging
that the petitioner was operating in Catarman, Samar and in San Jose, Mindoro without
a certificate of public covenience and necessity. The petitioner, on the other hand,
counter-alleged that its telephone services in the places subject of the complaint are
covered by the legislative franchise recognized by both the public respondent and its
predecessor, the Public Service Commission. In its supplemental reply, the petitioner
further stated that it has been in operation in the questioned places long before private
respondent Kayumanggi filed its application to operate in the same places.
After conducting a hearing, NTC, in its decision dated August 22, 1984 ordered
petitioner RCPI to immediately cease or desist from the operation of its radio telephone
services in Catarman Northern Samar; San Jose, Occidental Mindoro; and Sorsogon,

xxx xxx xxx

Section 15. With the exception of those enumerated in the preceding
section, no public service shall operate in the Philippines without
possessing a valid and subsisting certificate from the Public Service
Commission, known as "certificate of public convenience," or
"certificate of convenience and public necessity," as the case may be,
to the effect that the operation of said service and the authorization
to do business will promote the public interests in a proper and
suitable manner. ...

We find no merit in the petitioner's contention.

Pursuant to Presidential Decree No. 1 dated September 23,1972, reorganizing the
executive branch of the National Government, the Public Service Commission was
abolished and its functions were transferred to three specialized regulatory boards, as
follows: the Board of Transportation, the Board of Communications and the Board of
Power and Waterworks. The functions so transferred were still subject to the limitations
provided in sections 14 and 15 of the Public Service Law, as amended. With the
enactment of Executive Order No. 546 on July 23, 1979 implementing P.D. No.1, the
Board of Communications and the Telecommunications Control Bureau were abolished
and their functions were transferred to the National Telecommunications Commission
(Sec. 19(d), Executive Order No. 546). Section 15 of said Executive Order spells out the
functions of the National Telecommunications Commission as follows:
Sec. 15. Functions of the Commission.-The Commission shall exercise
the following functions:
a. Issue Certificate of Public Convenience for the operation of
communications utilities and services, radio communications petitions
systems, wire or wireless telephone or telegraph system, radio and
television broadcasting system and other similar public utilities;
b. Establish, prescribe and regulate areas of operation of particular
operators of public service communications; and determine and
prescribe charges or rates pertinent to the operation of such public
utility facilities and services except in cases where charges or rates are
established by international bodies or associations of which the
Philippines is a participating member or by bodies recognized by the
Philippine Government as the proper arbiter of such charges or rates;
c. Grant permits for the use of radio frequencies for wireless
telephone and telegraph systems and radio communication systems
including amateur radio stations and radio and television broadcasting
systems;
d. Sub-allocate series of frequencies of bands allocated by the
International Telecommunications Union to the specific services;

g. Promulgate such rules and regulations, as public safety and interest

may require, to encourage a larger and more effective use of
communications, radio and television broadcasting facilities, and to
maintain effective competition among private entities in these
activities whenever the Commission finds it reasonably feasible;
h. Supervise and inspect the operation of radio stations and
telecommunications facilities;
i. Undertake the examination and licensing of radio operators;
j. Undertake, whenever necessary, the registration of radio
transmitters and transceivers; and
k. Perform such other functions as may be prescribed by law.
It is clear from the aforequoted provision that the exemption enjoyed by radio
companies from the jurisdiction of the Public Service Commission and the Board of
Communications no longer exists because of the changes effected by the Reorganization
Law and implementing executive orders. The petitioner's claim that its franchise cannot
be affected by Executive Order No. 546 on the ground that it has long been in operation
since 1957 cannot be sustained.
A franchise started out as a "royal privilege or (a) branch of the King's prerogative,
subsisting in the hands of a subject." This definition was given by Finch, adopted by
Blackstone, and accepted by every authority since (State v. Twin Village Water Co., 98
Me 214, 56 A 763 (1903)). Today, a franchise, being merely a privilege emanating from
the sovereign power of the state and owing its existence to a grant, is subject to
regulation by the state itself by virtue of its police power through its administrative
agencies. We ruled in Pangasinan transportation Co., Inc. v. Public Service
Commission (70 Phil. 221) that:
... statutes enacted for the regulation of public utilities, being a proper
exercise by the State of its police power, are applicable not only to
those public utilities coming into existence after its passage, but
likewise to those already established and in operation ...

e. Establish and prescribe rules, regulations, standards, specifications

in all cases related to the issued Certificate of Public Convenience and
administer and enforce the same;

Executive Order No. 546, being an implementing measure of P.D. No. I insofar as it
amends the Public Service Law (CA No. 146, as amended) is applicable to the petitioner
who must be bound by its provisions. The petitioner cannot install and operate radio
telephone services on the basis of its legislative franchise alone.

f. Coordinate and cooperate with government agencies and other

entities concerned with any aspect involving communications with a
view to continuously improve the communications service in the
country;

The position of the petitioner that by the mere grant of its franchise under RA No. 2036
it can operate a radio communications system anywhere within the Philippines is
erroneous. Section 1 of said statute reads:

Section 1. Subject to the provisions of the Constitution, and to the

provisions, not inconsistent herewith, of Act Numbered Three
thousand eight hundred and forty-six, entitled.' An Act providing for
the regulation of radio stations and radio communications in the
Philippine Islands, and for other purposes;' Commonwealth Act
Numbered One hundred forty-six, known as the Public Service Act,
and their amendments, and other applicable laws, there is hereby
granted to the Radio Communications of the Philippines, its successors
or assigns, the right and privilege of constructing, installing,
establishing and operating in the Philippines, at such places as the said
corporation may select and the Secretary of Public Works and
Communications may approve, radio stations for the reception and
transmission of wireless messages on radiotelegraphy and/or
radiotelephone,
including
both
coastal
and
marine
telecommunications, each station to consist of two radio apparatus
comprising of a receiving and sending radio apparatus. (Emphasis
supplied).
Section 4(a) of the same Act further provides that:
Sec. 4(a). This franchise shall not take effect nor shall any powers
thereunder be exercised by the grantee until the Secretary of Public
works and Communications shall have allotted to the grantee the
frequencies and wave lengths to be used, and issued to the grantee a
license for such case. (Emphasis supplied)
Thus, in the words of R.A. No. 2036 itself, approval of the then Secretary of Public Works
and Communications was a precondition before the petitioner could put up radio
stations in areas where it desires to operate. It has been repeated time and again that
where the statutory norm speaks unequivocally, there is nothing for the courts to do
except to apply it. The law, leaving no doubt as to the scope of its operation, must be
obeyed. (Gonzaga v. Court of Appeals, 51 SCRA 381).
The records of the case do not show any grant of authority from the then Secretary of
Public Works and Communications before the petitioner installed the questioned radio
telephone services in San Jose, Mindoro in 1971. The same is true as regards the radio
telephone services opened in Sorsogon, Sorsogon and Catarman, Samar in 1983. No
certificate of public convenience and necessity appears to have been secured by the
petitioner from the public respondent when such certificate,was required by the
applicable public utility regulations (See executive Order No. 546, sec.
15, supra.; Philippine Long Distance Telephone Co. v. City of Davao, 15 SCRA 75;
Olongapo Electric Light and Power Corp. v. National Power Corporation, et al., G.R. No.
L-24912, promulgated April 9, 1987.)
It was well within the powers of the public respondent to authorize the installation by
the private respondent network of radio communications systems in Catarman, Samar

and San Jose, Mindoro. Under the circumstances of this case, the mere fact that the
petitioner possesses a franchise to put up and operate a radio communications system
in certain areas is not an insuperable obstacle to the public respondent's issuing the
proper certificate to an applicant desiring to extend the same services to those areas.
The Constitution mandates that a franchise cannot be exclusive in nature nor can a
franchise be granted except that it must be subject to amendment, alteration, or even
repeal by the legislature when the common good so requires. (Art. XII, sec. 11 of the
1986 Constitution). There is an express provision in the petitioner's franchise which
provides compliance with the above mandate R.A. 2036, sec. 15).
In view of the foregoing, we find no reason to disturb the public respondent's findings of
fact, and conclusions of law insofar as the private respondent was authorized to operate
in Catarman, Samar and San Jose, Mindoro. As a rule, the Commission's findings of fact,
if supported by substantial evidence, are conclusive upon this Court. We may modify or
ignore them only when it clearly appears that there is no evidence to
support reasonably such a conclusion. (Halili v. Daplas, 14 SCRA 14). The petitioner has
not shown why the private respondent should be denied the authority to operate its
services in Samar and Mindoro. It has not overcome the presumption that when the
public respondent disturbed the petitioner's monopoly in certain areas, it was doing so
pursuant to public interest and the common good.
WHEREFORE, the challenged order of the public respondent dated August 22, 1984 is
hereby AFFIRMED. The petition is dismissed for lack of merit.
SO ORDERED.
Fernan (Chairman), Paras, Padilla, Bidin and Cortes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 143964

July 26, 2004

GLOBE TELECOM, INC., petitioner,

vs.
THE NATIONAL TELECOMMUNICATIONS COMMISSION, COMMISSIONER JOSEPH A.
SANTIAGO, DEPUTY COMMISSIONERS AURELIO M. UMALI and NESTOR DACANAY, and
SMART COMMUNICATIONS, INC.respondents.

DECISION
TINGA, J.:
Telecommunications services are affected by a high degree of public
1
interest. Telephone companies have historically been regulated as common
2
carriers, and indeed, the 1936 Public Service Act has classified wire or wireless
3
communications systems as a "public service," along with other common carriers.
Yet with the advent of rapid technological changes affecting the telecommunications
industry, there has been a marked reevaluation of the traditional paradigm governing
state regulation over telecommunications. For example, the United States Federal
Communications Commission has chosen not to impose strict common regulations on
incumbent cellular providers, choosing instead to let go of the reins and rely on market
4
forces to govern pricing and service terms.
In the Philippines, a similar paradigm shift can be discerned with the passage of the
Public Telecommunications Act of 1995 ("PTA"). As noted by one of the law's principal
authors, Sen. John Osmea, under prior laws, the government regulated the entry of
pricing and operation of all public telecommunications entities. The new law proposed
to dismantle gradually the barriers to entry, replace government control on price and
income with market instruments, and shift the focus of government's intervention
5
towards ensuring service standards and protection of customers. Towards this goal,
Article II, Section 8 of the PTA sets forth the regulatory logic, mandating that "a healthy
competitive environment shall be fostered, one in which telecommunications carriers
are free to make business decisions and to interact with one another in providing
telecommunications services, with the end in view of encouraging their financial
6
viability while maintaining affordable rates." The statute itself defines the role of the
government to "promote a fair, efficient and responsive market to stimulate growth and
7
development of the telecommunications facilities and services."

The present petition dramatizes to a degree the clash of philosophies between

traditional notions of regulation and the au corant trend to deregulation. Appropriately,
it involves the most ubiquitous feature of the mobile phone, Short Messaging Service
8
("SMS") or "text messaging," which has been transformed from a mere technological
fad into a vital means of communication. And propitiously, the case allows the Court to
evaluate the role of the National Telecommunications Commission ("NTC") in this day
and age.
The NTC is at the forefront of the government response to the avalanche of inventions
and innovations in the dynamic telecommunications field. Every regulatory action it
undertakes is of keen interest not only to industry analysts and players but to the public
at large. The intensive scrutiny is understandable given the high financial stakes
involved and the inexorable impact on consumers. And its rulings are traditionally
accorded respect even by the courts, owing traditional deference to administrative
agencies equipped with special knowledge, experience and capability to hear and
9
determine promptly disputes on technical matters.
At the same time, judicial review of actions of administrative agencies is essential, as a
10
check on the unique powers vested unto these instrumentalities. Review is available to
reverse the findings of the specialized administrative agency if the record before the
Court clearly precludes the agency's decision from being justified by a fair estimate of
the worth of the testimony of witnesses or its informed judgment on matters within its
11
special competence, or both. Review may also be warranted to ensure that the NTC or
similarly empowered agencies act within the confines of their legal mandate and
12
conform to the demands of due process and equal protection.
Antecedent Facts
Globe and private respondent Smart Communications, Inc. ("Smart") are both grantees
13
of valid and subsisting legislative franchises, authorizing them, among others, to
operate a Cellular Mobile Telephone System("CMTS"), utilizing the Global System for
14
Mobile Communication ("GSM") technology. Among the inherent services supported
15
by the GSM network is the Short Message Services (SMS), also known colloquially as
"texting," which has attained immense popularity in the Philippines as a mode of
electronic communication.
16

On 4 June 1999, Smart filed a Complaint with public respondent NTC, praying that NTC
order the immediate interconnection of Smart's and Globe's GSM networks, particularly
their respective SMS or texting services. TheComplaint arose from the inability of the
two leading CMTS providers to effect interconnection. Smart alleged that Globe, with
evident bad faith and malice, refused to grant Smart's request for the interconnection of
17
SMS.
On 7 June 1999, NTC issued a Show Cause Order, informing Globe of
the Complaint, specifically the allegations therein that, "among othersdespite formal
request made by Smart to Globe for the interconnection of their respective SMS or text

messaging services, Globe, with evident bad faith, malice and to the prejudice of Smart
and Globe and the public in general, refused to grant Smart's request for the
interconnection of their respective SMS or text messaging services, in violation of the
mandate of Republic Act 7925, Executive Order No. 39, and their respective
18
implementing rules and regulations."
Globe filed its Answer with Motion to Dismiss on 7 June 1999, interposing grounds that
the Complaint was premature, Smart's failure to comply with the conditions precedent
19
required in Section 6 of NTC Memorandum Circular 9-7-93, and its omission of the
20
mandatory Certification of Non-Forum Shopping. Smart responded that it had already
submitted the voluminous documents asked by Globe in connection with other
interconnection agreements between the two carriers, and that with those voluminous
documents the interconnection of the SMS systems could be expedited by merely
21
amending the parties' existing CMTS-to-CMTS interconnection agreements.
On 19 July 1999, NTC issued the Order now subject of the present petition. In the Order,
after noting that both Smart and Globe were "equally blameworthy" for their lack of
cooperation in the submission of the documentation required for interconnection and
22
for having "unduly maneuvered the situation into the present impasse," NTC held that
since SMS falls squarely within the definition of "value-added service" or "enhancedservice" given in NTC Memorandum Circular No. 8-9-95 (MC No. 8-9-95)
the implementation of SMS interconnection is mandatory pursuant to Executive Order
23
(E.O.) No. 59.
The NTC also declared that both Smart and Globe have been providing SMS without
authority from it, in violation of Section 420 (f) of MC No. 8-9-95 which requires PTEs
intending to provide value-added services (VAS) to secure prior approval from NTC
through an administrative process. Yet, in view of what it noted as the "peculiar
circumstances" of the case, NTC refrained from issuing a Show Cause Order with a Cease
and Desist Order, and instead directed the parties to secure the requisite authority to
provide SMS within thirty (30) days, subject to the payment of fine in the amount of two
hundred pesos (P200.00) "from the date of violation and for every day during which
24
such violation continues."
25

Globe filed with the Court of Appeals a Petition for Certiorari and Prohibition to nullify
and set aside the Orderand to prohibit NTC from taking any further action in the case. It
reiterated its previous arguments that the complaint should have been dismissed for
failure to comply with conditions precedent and the non-forum shopping rule. It also
claimed that NTC acted without jurisdiction in declaring that it had no authority to
render SMS, pointing out that the matter was not raised as an issue before it at
all. Finally, Globe alleged that the Orderis a patent nullity as it imposed an
administrative penalty for an offense for which neither it nor Smart was sufficiently
26
charged nor heard on in violation of their right to due process.
The Court of Appeals issued a Temporary Restraining Order on 31 August 1999.

In its Memorandum, Globe also called the attention of the appellate court to the earlier
decision of NTC pertaining to the application of Isla Communications Co., Inc.
("Islacom") to provide SMS, allegedly holding that SMS is a deregulated special feature
of the telephone network and therefore does not require the prior approval of
27
NTC. Globe alleged that its departure from its ruling in the Islacom case constitutes a
denial of equal protection of the law.
28

On 22 November 1999, a Decision was promulgated by the Former Special Fifth

29
Division of the Court of Appeals affirming in toto the NTC Order. Interestingly, on the
same day Globe and Smart voluntarily agreed to interconnect their respective SMS
30
systems, and the interconnection was effected at midnight of that day.
31

Yet, on 21 December 1999, Globe filed a Motion for Partial Reconsideration, seeking to
reconsider only the portion of the Decision that upheld NTC's finding that Globe lacked
the authority to provide SMS and its imposition of a fine. Both Smart and NTC filed their
respective comments, stressing therein that Globe indeed lacked the authority to
32
provide SMS. In reply, Globe asserted that the more salient issue was whether NTC
complied with its own Rules of Practice and Procedure before making the finding of
want of authority and imposing the fine. Globe also reiterated that it has been legally
operating its SMS system since 1994 and that SMS being a deregulated special feature
of the telephone network it may operate SMS without prior approval of NTC.
33

After the Court of Appeals denied the Motion for Partial Reconsideration, Globe
elevated the controversy to this Court.
Globe contends that the Court of Appeals erred in holding that the NTC has the power
34
under Section 17 of the Public Service Law to subject Globe to an administrative
sanction and a fine without prior notice and hearing in violation of the due process
requirements; that specifically due process was denied Globe because the hearings
actually conducted dwelt on different issues; and, the appellate court erred in holding
that any possible violation of due process committed by NTC was cured by the fact that
NTC refrained from issuing a Show Cause Order with a Cease and Desist Order, directing
instead the parties to secure the requisite authority within thirty days. Globe also
contends that in treating it differently from other carriers providing SMS the Court of
Appeals denied it equal protection of the law.
The case was called for oral argument on 22 March 2004. Significantly, Smart has
deviated from its original position. It no longer prays that the Court affirm the
assailed Decision and Order, and the twin rulings therein that SMS is VAS and that Globe
was required to secure prior authority before offering SMS. Instead, Smart now argues
that SMS is not VAS and that NTC may not legally require either Smart or Globe to
secure prior approval before providing SMS. Smart has also chosen not to make any
35
submission on Globe's claim of due process violations.
As presented during the oral arguments, the central issues are: (1) whether NTC may
legally require Globe to secure NTC approval before it continues providing SMS; (2)

whether SMS is a VAS under the PTA, or special feature under NTC MC No. 14-11-97;
36
and (3) whether NTC acted with due process in levying the fine against Globe. Another
issue is also raised whether Globe should have first filed a motion for reconsideration
before the NTC, but this relatively minor question can be resolved in brief.
Necessity of Filing Motion for Reconsideration
Globe deliberately did not file a motion for reconsideration with the NTC before
elevating the matter to the Court of Appeals via a petition for certiorari. Generally, a
37
motion for reconsideration is a prerequisite for the filing of a petition for certiorari. In
opting not to file the motion for reconsideration, Globe asserted before the Court of
38
Appeals that the case fell within the exceptions to the general rule. The appellate
39
court in the questionedDecision cited the purported procedural defect, yet chose
anyway to rule on the merits as well.
Globe's election to elevate the case directly to the Court of Appeals, skipping the
standard motion for reconsideration, is not a mortal mistake. According to Globe,
the Order is a patent nullity, it being violative of due process; the motion for
reconsideration was a useless or idle ceremony; and, the issue raised purely one of
40
law. Indeed, the circumstances adverted to are among the recognized exceptions to
41
the general rule. Besides, the issues presented are of relative importance and
42
novelty so much so that it is judicious for the Court to resolve them on the merits
instead of hiding behind procedural fineries.
The Merits
Now, on to the merits of the petition.
Deregulation is the mantra in this age of globalization. Globe invokes it in support of its
claim that it need not secure prior authority from NTC in order to operate SMS. The
claim has to be evaluated carefully. After all, deregulation is not a magic incantation
that wards off the spectre of intrusive government with the mere invocation of its
name. The principles, guidelines, rules and regulations that govern a deregulated system
must be firmly rooted in the law and regulations that institute or implement the
43
deregulation regime. The implementation must likewise be fair and evenhanded.
Globe hinges its claim of exemption from obtaining prior approval from the NTC on NTC
Memorandum Circular No. 14-11-97 ("MC No. 14-11-97"). Globe notes that in a 7
October 1998 ruling on the application of Islacom for the operation of SMS, NTC
44
declared that the applicable circular for SMS is MC No. 14-11-97. Under this ruling, it is
alleged, NTC effectively denominated SMS as a "special feature" which under MC No.
14-11-97 is a deregulated service that needs no prior authorization from NTC. Globe
further contends that NTC's requiring it to secure prior authorization violates the due
process and equal protection clauses, since earlier it had exempted the similarly
45
situated Islacom from securing NTC approval prior to its operation of SMS.

On the other hand, the assailed NTC Decision invokes the NTC Implementing Rules of
the PTA (MC No. 8-9-95) to justify its claim that Globe and Smart need to secure prior
authority from the NTC before offering SMS.
The statutory basis for the NTC's determination must be thoroughly examined. Our first
level of inquiry should be into the PTA. It is the authority behind MC No. 8-9-95. It is also
46
the law that governs all public telecommunications entities ("PTEs") in the Philippines.
Public Telecommunications Act
The PTA has not strictly adopted laissez-faire as its underlying philosophy to promote
the telecommunications industry. In fact, the law imposes strictures that restrain within
reason how PTEs conduct their business. For example, it requires that any access
charge/revenue sharing arrangements between all interconnecting carriers that are
47
entered into have to be submitted for approval to NTC. Each "telecommunication
48
category" established in the PTA is governed by detailed regulations. Also, international
carriers and operators of mobile radio services are required to provide local exchange
49
service in unserved or underserved areas.
At the same time, the general thrust of the PTA is towards modernizing the legal
framework for the telecommunications services sector. The transmutation has become
necessary due to the rapid changes as well within the telecommunications industry. As
noted by Senator Osmea in his sponsorship speech:
[D]ramatic developments during the last 15 years in the field of
semiconductors have drastically changed the telecommunications sector
worldwide as well as in the Philippines. New technologies have fundamentally
altered the structure, the economics and the nature of competition in the
telecommunications business. Voice telephony is perhaps the most popular
face of telecommunications, but it is no longer the only one. There are other
faces such as data communications, electronic mail, voice mail, facsimile
transmission, video conferencing, mobile radio services like trunked radio,
cellular radio, and personal communications services, radio paging, and so
on. Because of the mind-boggling developments in semiconductors, the
traditional boundaries between computers, telecommunications, and
50
broadcasting are increasingly becoming blurred.
One of the novel introductions of the PTA is the concept of a "value-added service"
("VAS"). Section 11 of the PTA governs the operations of a "value-added service
provider," which the law defines as "an entity which relying on the transmission,
switching and local distribution facilities of the local exchange and inter-exchange
operators, and overseas carriers, offers enhanced services beyond those ordinarily
51
provided for by such carriers." Section 11 recognizes that VAS providers need not
52
secure a franchise, provided that they do not put up their own network. However, a
different rule is laid down for telecommunications entities such as Globe and PLDT. The

section unequivocally requires NTC approval for the operation of a value-added

service. It reads, viz:
Telecommunications entities may provide VAS, subject to the additional requirements
that:
a)
prior approval of the Commission is secured to ensure that such VAS
offerings are not cross-subsidized from the proceeds of their utility
operations;
b)
other providers of VAS are not discriminated against in rates nor denied
equitable access to their facilities; and

example, but merely supplementary to the basic service. Ultimately, the regulatory
attitude of the State towards VAS offerings by PTEs is to treat its provisioning as a
"business decision" subject to the discretion of the offeror, so long as such services do
not interfere with mandatory public service requirements imposed on PTEs such as
those under E.O. No. 109. Thus, non-PTEs are not similarly required to secure prior
approval before offering VAS, as they are not burdened by the public service
61
requirements prescribed on PTEs. Due regard must be accorded to this attitude,
which is in consonance with the general philosophy of deregulation expressed in the
PTA.
The Pertinent NTC Memorandum Circulars
Next, we examine the regulatory framework devised by NTC in dealing with VAS.

c)
separate books of accounts are maintained for the VAS. (Emphasis
53
supplied)
Oddly enough, neither the NTC nor the Court of Appeals cited the above-quoted
provision in their respective decisions, which after all, is the statutory premise for the
assailed regulatory action. This failure is but a mere indicia of the pattern of ignorance
or incompetence that sadly attends the actions assailed in this petition.
It is clear that the PTA has left open-ended what services are classified as "value-added,"
prescribing instead a general standard, set forth as a matter of principle and
54
fundamental policy by the legislature. The validity of this standard set by Section 11 is
not put into question by the present petition, and there is no need to inquire into its
55
propriety. The power to enforce the provisions of the PTA, including the
56
implementation of the standards set therein, is clearly reposed with the NTC.
It can also be gleaned from Section 11 that the requirement that PTEs secure prior
approval before offering VAS is tied to a definite purpose, i.e., "to ensure that such VAS
offerings are not cross-subsidized from the proceeds of their utility operations." The
57
reason is related to the fact that PTEs are considered as public services, and mandated
to perform certain public service functions. Section 11 should be seen in relation to E.O.
109, which mandates that "international gateway operators shall be required to provide
58
local exchange service," for the purpose of ensuring availability of reliable and
affordable telecommunications service in both urban and rural areas of the
59
country. Under E.O. No. 109, local exchange services are to be cross-subsidized by
other telecommunications services within the same company until universal access is
60
achieved. Section 10 of the PTA specifically affirms the requirements set by E.O. No.
109. The relevance to VAS is clear: public policy maintains that the offer of VAS by PTEs
cannot interfere with the fundamental provision by PTEs of their other public service
requirements.
More pertinently to the case at bar, the qualification highlights the fact that the legal
rationale for regulation of VAS is severely limited. There is an implicit recognition that
VAS is not strictly a public service offering in the way that voice-to-voice lines are, for

NTC relied on Section 420(f) of the Implementing Rules of the PTA ("Implementing
Rules") as basis for its claim that prior approval must be secured from it before Globe
can operate SMS. Section 420 of the Implementing Rules, contained in MC No. 8-9-95,
states in full:
VALUE ADDED SERVICES (VAS)
(a) A non-PTE VAS provider shall not be required to secure a franchise from
Congress.
(b) A non-PTE VAS provider can utilize its own equipment capable only of
routing, storing and forwarding messages in whatever format for the purpose
of providing enhanced or augmented telecommunications services. It shall not
put up its own network. It shall use the transmission network, toll or local
distribution, of the authorized PTES.
(c) The provision of VAS shall not in any way affect the cross subsidy to the
local exchange network by the international and national toll services and
CMTS service.
(d) Entities intending to provide value added services only shall submit to the
commission application for registration for approval. The application form shall
include documents showing, among others, system configuration, mode of
operation, method of charging rates, lease agreement with the PTE, etc.
(e) The application for registration shall be acted upon by the Commission
through an administrative process within thirty (30) days from date of
application.
(f) PTEs intending to provide value added services are required to secure
prior approval by the Commission through an administrative process.

(g) VAS providers shall comply strictly with the service performance and other
standards prescribed commission. (Emphasis supplied.)

SUBJECT: DEREGULATING THE PROVISION OF SPECIAL FEATURES IN THE

TELEPHONE NETWORK.

Instead of expressly defining what VAS is, the Implementing Rules defines what
"enhanced services" are, namely: "a service which adds a feature or value not ordinarily
provided by a public telecommunications entity such as format, media conversion,
62
encryption, enhanced security features, computer processing, and the like." Given that
the PTA defines VAS as "enhanced services," the definition provided in the
Implementing Rules may likewise be applied to VAS. Still, the language of the
Implementing Rules is unnecessarily confusing. Much trouble would have been spared
had the NTC consistently used the term "VAS" as it is used in the PTA.

For the purpose of exempting specific telecommunications service from rate or

tariff regulations if the service has sufficient competition to ensure fair and
reasonable rates or tariffs, the Commission hereby deregulates the provision
of special features inherent to the Telephone Network.

The definition of "enhanced services" in the Implementing Rules, while more distinct
than that under the PTA, is still too sweeping. Rather than enumerating what possible
features could be classified as VAS or enhanced services, the Implementing Rules
instead focuses on the characteristics of these features. The use of the phrase "the
63
like," and its implications of analogy, presumes that a whole myriad of technologies
can eventually be subsumed under the definition of "enhanced services." The NTC
should not be necessarily faulted for such indistinct formulation since it could not have
64
known in 1995 what possible VAS would be available in the future. The definition laid
down in the Implementing Rules may validly serve as a guide for the NTC to determine
what emergent offerings would fall under VAS.
Still, owing to the general nature of the definition laid down in the Implementing Rules,
the expectation arises that the NTC would promulgate further issuances defining
whether or not a specific feature newly available in the market is a VAS. Such
expectation is especially demanded if the NTC is to penalize PTEs who fail to obtain prior
approval in accordance with Section 11 of the PTA. To our knowledge, the NTC has yet
to come out with an administrative rule or regulation listing which of the offerings in the
market today fall under VAS or "enhanced services."
Still, there is MC No. 14-11-97, entitled "Deregulating the Provision of Special Features
in the Telephone Network." Globe invokes this circular as it had been previously cited by
the NTC as applicable to SMS.
On 2 October 1998, Islacom wrote a letter to the NTC, informing the agency that "it will
be offering the special feature" of SMS for its CMTS, and citing therein that the notice
65
was being given pursuant to NTC Memorandum Circular No. 14-11-97. In response, the
NTC acknowledged receipt of the letter "informing" it of Islacom's "offering the special
feature" of SMS for its CMTS, and instructed Islacom to "adhere to the provisions of MC
66
No. 14-11-97." The clear implication of the letter is that NTC considers the Circular as
applicable to SMS.
An examination of MC No. 14-11-97 further highlights the state of regulatory confusion
befalling the NTC. The relevant portions thereof are reproduced below:

Section 1. For the purpose of this Circular, Special Feature shall refer to a
feature inherent to the telephone network which may not be ordinarily
provided by a Telephone Service Provider such as call waiting, call forwarding,
conference calling, speed dialing, caller ID, malicious call ID, call transfer,
charging information, call pick-up, call barring, recorded announcement, no
double connect, warm line, wake-up call, hotline, voicemail, and special
features offered to customers with PABXs such as direct inward dialing and
number hunting, and the like; provided that in the provision of the feature, no
law, rule, regulation or international convention on telecommunications is
circumvented or violated. The Commission shall periodically update the list of
special features in the Telephone Network which, including the charging of
rates therefor, shall be deregulated.
Section 2. A duly authorized Telephone Service Provider shall inform the
Commission in writing of the special features it can offer and
the corresponding rates thirty (30) days prior to launch date.
xxx
Section 4. Authorized Telephone Service Providers shall continue to charge
their duly approved rates for special services for 3 months from the effectivity
of this circular, after which they may set their own rates.
xxx (Emphasis supplied)
Just like VAS as defined under the PTA, "special features" are also "not ordinarily
provided" by the telephone company. Considering that MC No. 14-11-97 was
promulgated after the passage of the PTA, it can be assumed that the authors of the
Circular were well aware of the regulatory scheme formed under the PTA. Moreover,
MC No. 14-11-97 repeatedly invokes the word "deregulation," and it cannot be denied
that the liberalization ethos was introduced by the PTA. Yet, the net effect of MC No.
14-11-97 is to add to the haze beclouding the NTC's rationale for regulation. The
introduction of a new concept, "special feature," which is not provided for in the PTA
just adds to the confusion, especially in light of the similarities between "special
features" and VAS. Moreover, there is no requirement that a PTE seeking to offer
"special features" must secure prior approval from the NTC.

Is SMS a VAS, "enhanced service," or a "special feature"? Apparently, even the NTC is
unsure. It had told Islacom that SMS was a "special feature," then subsequently held
that it was a "VAS." However, the pertinent laws and regulations had not changed from
the time of the Islacom letter up to the day the Order was issued. Only the thinking of
NTC did.
More significantly, NTC never required ISLACOM to apply for prior approval in order to
provide SMS, even after the Order to that effect was promulgated against Globe and
67
Smart. This fact was admitted by NTC during oral arguments. NTC's treatment of
Islacom, apart from being obviously discriminatory, puts into question whether or not
NTC truly believes that SMS is VAS. NTC is unable to point out any subsequent rule or
regulation, enacted after it promulgated the adverse order against Globe and Smart,
affirming the newly-arrived determination that SMS is VAS.
In fact, as Smart admitted during the oral arguments, while it did comply with the
NTC Order requiring it to secure prior approval, it was never informed by the NTC of any
68
action on its request. While NTC counters that it did issue a Certificate of Registration
to Smart, authorizing the latter as a provider of SMS, such Certificate of Registration was
issued only on 13 March 2003, or nearly four (4) years after Smart had made its
69
request. This inaction indicates a lack of seriousness on the part of the NTC to
implement its own rulings. Also, it tends to indicate the lack of belief or confusion on
NTC's part as to how SMS should be treated. Given the abstract set of rules the NTC has
chosen to implement, this should come as no surprise. Yet no matter how content the
NTC may be with its attitude of sloth towards regulation, the effect may prove ruinous
to the sector it regulates.
Every party subject to administrative regulation deserves an opportunity to know,
through reasonable regulations promulgated by the agency, of the objective standards
that have to be met. Such rule is integral to due process, as it protects substantive
rights. Such rule also promotes harmony within the service or industry subject to
regulation. It provides indubitable opportunities to weed out the most frivolous
conflicts with minimum hassle, and certain footing in deciding more substantive claims.
If this results in a tenfold in administrative rules and regulations, such price is worth
paying if it also results in clarity and consistency in the operative rules of the game. The
70
administrative process will best be vindicated by clarity in its exercise.
In short, the legal basis invoked by NTC in claiming that SMS is VAS has not been duly
established. The fault falls squarely on NTC. With the dual classification of SMS as a
special feature and a VAS and the varying rules pertinent to each classification, NTC has
unnecessarily complicated the regulatory framework to the detriment of the industry
and the consumers. But does that translate to a finding that the NTC Order subjecting
Globe to prior approval is void? There is a fine line between professional mediocrity and
illegality. NTC's byzantine approach to SMS regulation is certainly inefficient.
Unfortunately for NTC, its actions have also transgressed due process in many ways, as
shown in the ensuing elucidation.

Penalized Via a Quasi-Judicial Process, Globe and Smart are Entitled to Corresponding
Protection
It is essential to understand that the assailed Order was promulgated by NTC in the
exercise of its quasi-judicial functions. The case arose when Smart had filed the initial
71
complaint against Globe before NTC for interconnection of SMS. NTC issued a Show
Cause Order requiring Globe to answer Smart's charges. Hearings were conducted, and
a decision made on the merits, signed by the three Commissioners of the NTC, sitting as
72
a collegial body.
The initial controversy may have involved a different subject matter, interconnection,
which is no longer contested. It cannot be denied though that the findings and penalty
now assailed before us was premised on the same exercise of jurisdiction. Thus, it is not
relevant to this case that the process for obtaining prior approval under the PTA and its
Implementing Rules is administrative in nature. While this may be so, the assailed NTC's
determination and corresponding penalty were rendered in the exercise of quasi-judicial
functions. Therefore, all the requirements of due process attendant to the exercise of
quasi-judicial power apply to the present case. Among them are the seven cardinal
primary rights in justiciable cases before administrative tribunals, as enumerated in Ang
73
Tibay v. CIR. They are synthesized in a subsequent case, as follows:
There are cardinal primary rights which must be respected even in proceedings
of this character. The first of these rights is the right to a hearing, which
includes the right of the party interested or affected to present his own case
and submit evidence in support thereof. Not only must the party be given an
opportunity to present his case and to adduce evidence tending to establish
the rights which he asserts but the tribunal must consider the evidence
presented. While the duty to deliberate does not impose the obligation to
decide right, it does imply a necessity which cannot be disregarded, namely,
that of having something to support its decision. Not only must there be some
evidence to support a finding or conclusion, but the evidence must be
substantial. The decision must be rendered on the evidence presented at the
hearing, or at least contained in the record and disclosed to the parties
74
affected.
NTC violated several of these cardinal rights due Globe in the promulgation of the
assailed Order.
First. The NTC Order is not supported by substantial evidence. Neither does it
sufficiently explain the reasons for the decision rendered.
Our earlier discussion pertained to the lack of clear legal basis for classifying SMS as
VAS, owing to the failure of the NTC to adopt clear rules and regulations to that effect.
Muddled as the legal milieu governing SMS already is, NTC's attempt to apply its
confusing standards in the case of Globe and Smart is even more disconcerting. The
very rationale adopted by the NTC in its Order holding that SMS is VAS is short and

shoddy. Astoundingly, the Court of Appeals affirmed the rationale bereft of intelligent
inquiry, much less comment. Stated in full, the relevant portion of the NTC Order reads:
xxx Getting down [to] the nitty-gritty, Globe's SMS involves the transmission of
data over its CMTS which is Globe's basic service. SMS is not ordinarily provided
by
a
CMTS
operator
like
Globe,
and
since
SMS enhances Globe's CMTS, SMS fits in to a nicety [sic] with the definition
of "value-added-service" or "enhanced-service" under NTC Memorandum
8
15 75
Circular -9-95 (Rule 001, Item ).
The Court usually accords great respect to the technical findings of administrative
agencies in the fields of their expertise, even if they are infelicitously worded. However,
the above-quoted "finding" is nothing more than bare assertions, unsupported by
76
substantial evidence. The Order reveals that no deep inquiry was made as to the
nature of SMS or what its provisioning entails. In fact, the Court is unable to find how
exactly does SMS "fits into a nicety" with NTC M.C. No. 8-9-95, which defines "enhanced
services" as analogous to "format, media conversion, encryption, enhanced security
77
features, computer processing, and the like." The NTC merely notes that SMS involves
the "transmission of data over [the] CMTS," a phraseology that evinces no causal
relation to the definition in M.C. No. 8-9-95. Neither did the NTC endeavor to explain
why the "transmission of data" necessarily classifies SMS as a VAS.
In fact, if "the transmission of data over [the] CMTS" is to be reckoned as the
determinative characteristic of SMS, it would seem that this is already sufficiently
78
covered by Globe and Smart's respective legislative franchises. Smart is authorized
under its legislative franchise to establish and operate integrated
telecommunications/computer/ electronic services for public domestic and
79
international communications, while Globe is empowered to establish and operate
domestic telecommunications, and stations for transmission and reception of messages
by means of electricity, electromagnetic waves or any kind of energy, force, variations
or impulses, whether conveyed by wires, radiated through space or transmitted through
80
other media and for the handling of any and all types of telecommunications services.
The question of the proper legal classification of VAS is uniquely technical, tied as at is to
the scientific and technological application of the service or feature. Owing to the
dearth of substantive technical findings and data from the NTC on which a judicial
review may reasonably be premised, it is not opportunely proper for the Court to make
its own technical evaluation of VAS, especially in relation to SMS. Judicial fact-finding of
the de novo kind is generally abhorred and the shift of decisional responsibility to the
judiciary is not favored as against the substantiated and specialized determination of
81
administrative agencies. With greater reason should this be the standard for the
exercise of judicial review when the administrative agency concerned has not in the first
place come out with a technical finding based on evidence, as in this case.
Yet at the same time, this absence of substantial evidence in support of the finding that
SMS is VAS already renders reversible that portion of the NTC Order.

Moreover, the Order does not explain why the NTC was according the VAS offerings of
Globe and Smart a different regulatory treatment from that of Islacom. Indeed, to this
day, NTC has not offered any sensible explanation why Islacom was accorded to a less
onerous regulatory requirement, nor have they compelled Islacom to suffer the same
burdens as Globe and Smart.
While stability in the law, particularly in the business field, is desirable, there is no
82
demand that the NTC slavishly follow precedent. However, we think it essential, for
the sake of clarity and intellectual honesty, that if an administrative agency decides
inconsistently with previous action, that it explain thoroughly why a different result is
warranted, or if need be, why the previous standards should no longer apply or should
83
be overturned. Such explanation is warranted in order to sufficiently establish a
84
decision as having rational basis. Any inconsistent decision lacking thorough,
ratiocination in support may be struck down as being arbitrary. And any decision with
85
absolutely nothing to support it is a nullity.
Second. Globe and Smart were denied opportunity to present evidence on the issues
relating to the nature of VAS and the prior approval.
Another disturbing circumstance attending this petition is that until the promulgation of
the assailed Order Globe and Smart were never informed of the fact that their operation
of SMS without prior authority was at all an issue for consideration. As a result, neither
Globe or Smart was afforded an opportunity to present evidence in their behalf on that
point.
NTC asserts that since Globe and Smart were required to submit their respective
Certificates of Public Convenience and Necessity and franchises, the parties were
sufficiently notified that the authority to operate such service was a matter which NTC
could look into. This is wrong-headed considering the governing law and regulations. It
is clear that before NTC could penalize Globe and Smart for unauthorized provision of
SMS, it must first establish that SMS is VAS. Since there was no express rule or
regulation on that question, Globe and Smart would be well within reason if they
submitted evidence to establish that SMS was not VAS. Unfortunately, no such
opportunity arose and no such arguments were raised simply because Globe and Smart
were not aware that the question of their authority to provide SMS was an issue at all.
Neither could it be said that the requisite of prior authority was indubitable under the
existing rules and regulations. Considering the prior treatment towards Islacom, Globe
(and Smart, had it chosen to do so) had every right to rely on NTC's disposal of Islacom's
initiative and to believe that prior approval was not necessary.
Neither was the matter ever raised during the hearings conducted by NTC on Smart's
petition. This claim has been repeatedly invoked by Globe. It is borne out by the records
or the absence thereof. NTC could have easily rebuffed this claim by pointing to a
definitive record. Yet strikingly, NTC has not asserted that the matter of Globe's
authority was raised in any pleading or proceeding. In fact, Globe in its Consolidated
Reply before this Court challenged NTC to produce the transcripts of the hearings it

conducted to prove that the issue of Globe's authority to provide SMS was put in
86
issue. The Court similarly ordered the NTC to produce such transcripts. NTC failed to
87
produce any.
The opportunity to adduce evidence is essential in the administrative process, as
decisions must be rendered on the evidence presented, either in the hearing, or at least
88
contained in the record and disclosed to the parties affected. The requirement that
agencies hold hearings in which parties affected by the agency's action can be
represented by counsel may be viewed as an effort to regularize this struggle for
89
advantage within a legislative adversary framework. It necessarily follows that if no
evidence is procured pertinent to a particular issue, any eventual resolution of that issue
on substantive grounds despite the absence of evidence is flawed. Moreover, if the
parties did have evidence to counter the ruling but were wrongfully denied the
opportunity to offer the evidence, the result would be embarrassing on the adjudicator.
Thus, the comical, though expected, result of a definitive order which is totally
unsupported by evidence. To this blatant violation of due process, this Court stands
athwart.
Third. The imposition of fine is void for violation of due process
The matter of whether NTC could have imposed the fine on Globe in the
assailed Order is necessarily related to due process considerations. Since this question
would also call to fore the relevant provisions of the Public Service Act, it deserves its
own extensive discussion.
Globe claims that the issue of its authority to operate SMS services was never raised as
an issue in the Complaintfiled against it by Smart. Nor did NTC ever require Globe to
justify its authority to operate SMS services beforethe issuance of the Order imposing
the fine.
The Court of Appeals, in its assailed decision, upheld the power of NTC to impose a fine
and to make a pronouncement on Globe's alleged lack of operational authority without
90
need of hearing, simply by citing the provision of the Public Service Act which
enumerates the instances when NTC may act motu proprio. That is Section 17,
paragraph (a), which reads thus:
Sec. 17. Proceedings of [the National Telecommunications Commission]
without previous hearing. The Commission shall have power, without previous
hearing, subject to established limitations and exceptions and saving provisions
to the contrary:
(a) To investigate, upon its own initiative, or upon complaint in writing, any
matter concerning any public service as regards matters under its jurisdiction;
to require any public service to furnish safe, adequate, and proper service as
the public interest may require and warrant; to enforce compliance with any

standard, rule, regulation, order or other requirement of this Act or of the

Commission, and to prohibit or prevent any public service as herein defined
from operating without having first secured a certificate of public convenience
or public necessity and convenience, as the case may be, and require existing
public services to pay the fees provided for in this Act for the issuance of the
proper certificate of public convenience or certificate of public necessity and
convenience, as the case may be, under the penalty, in the discretion of the
Commission, of the revocation and cancellation of any acquired rights.
On the other hand, NTC itself, in the Order, cites Section 21 as the basis for its
imposition of fine on Globe. The provision states:
Sec. 21. Every public service violating or failing to comply with the terms and
conditions of any certificate or any orders, decisions or regulations of the
Commission shall be subject to a fine of not exceeding two hundred pesos per
day for every day during which such default or violation continues; and the
Commission is hereby authorized and empowered to impose such fine, after
due notice and hearing. [Emphasis supplied.]
Sections 17 and 21 of the Public Service Act confer two distinct powers on NTC. Under
Section 17, NTC has the power to investigate a PTE compliance with a standard, rule,
regulation, order, or other requirement imposed by law or the regulations promulgated
by NTC, as well as require compliance if necessary. By the explicit language of the
provision, NTC may exercise the power without need of prior hearing. However, Section
17 does not include the power to impose fine in its enumeration. It is Section 21 which
adverts to the power to impose fine and in the same breath requires that the power
may be exercised only after notice and hearing.
Section 21 requires notice and hearing because fine is a sanction, regulatory and even
punitive in character. Indeed, the requirement is the essence of due process. Notice
and hearing are the bulwark of administrative due process, the right to which is among
91
the primary rights that must be respected even in administrative proceedings. The
right is guaranteed by the Constitution itself and does not need legislative enactment.
The statutory affirmation of the requirement serves merely to enhance the fundamental
precept. The right to notice and hearing is essential to due process and its non92
observance will, as a rule, invalidate the administrative proceedings.
In citing Section 21 as the basis of the fine, NTC effectively concedes the necessity of
prior notice and hearing. Yet the agency contends that the sanction was justified by
arguing that when it took cognizance of Smart's complaint for interconnection, "it may
very well look into the issue of whether the parties had the requisite authority to
93
operate such services." As a result, both parties were sufficiently notified that this was
a matter that NTC could look into in the course of the proceedings. The parties
94
subsequently attended at least five hearings presided by NTC.

That particular argument of the NTC has been previously disposed of. But it is essential
to emphasize the need for a hearing before a fine may be imposed, as it is clearly a
punitive measure undertaken by an administrative agency in the exercise of its quasijudicial functions. Inherently, notice and hearing are indispensable for the valid exercise
by an administrative agency of its quasi-judicial functions. As the Court held in Central
95
Bank of the Phil. v. Hon. Cloribel:
[T]he necessity of notice and hearing in an administrative proceeding depends
on the character of the proceeding and the circumstances involved. In so far as
generalization is possible in view of the great variety of administrative
proceedings, it may be stated as a general rule that notice and hearing are not
essential to the validity of administrative action where the administrative body
acts in the exercise of executive, administrative, or legislative functions; but
where a public administrative body acts in a judicial or quasi-judicial matter,
and its acts are particular and immediate rather than general and prospective,
the person whose rights or property may be affected by the action is entitled to
96
notice and hearing.
The requirement of notice and hearing becomes even more imperative if the statute
itself demands it, as in the case of Section 21 of the Public Service Act.
As earlier stated, the Court is convinced that prior to the promulgation of the
assailed Order Globe was never notified that its authority to operate SMS was put in
issue. There is an established procedure within NTC that provides for the steps that
should be undertaken before an entity such as Globe could be subjected to a disciplinary
measure. Section 1, Rule 10 of the NTC Rules of Procedure provides that any action, the
object of which is to subject a holder of a certificate of public convenience or
authorization, or any person operating without authority from NTC, to any penalty or a
disciplinary or other measure shall be commenced by the filing of a complaint. Further,
the complaint should state, whenever practicable, the provisions of law or regulation
97
violated, and the acts or omissions complained of as constituting the offense. While a
complaint was indeed filed against Globe by Smart, the lack of Globe's authority to
operate SMS was not raised in the Complaint, solely predicated as it was on Globe's
98
refusal to interconnect with Smart.
Under the NTC Rules of Procedure, NTC is to serve a Show Cause Order on the
respondent to the complaint, containing therein a "statement of the particulars and
matters concerning which the Commission is inquiring and the reasons for such
99
actions." The Show Cause Order served on Globe in this case gave notice of Smart's
charge that Globe, acting in bad faith and contrary to law, refused to allow the
100
interconnection of their respective SMS systems. Again, the lack of authority to
operate SMS was not adverted to in NTC's Show Cause Order.
The records also indicate that the issue of Globe's authority was never raised in the
subsequent hearings on Smart's complaint. Quite noticeably, the respondents
themselves have never asserted that the matter of Globe's authority was raised in any

pleading or proceeding. In fact, Globe in its Consolidated Reply before this Court
challenged NTC to produce the transcripts of the hearings it conducted to prove that the
issue of Globe's authority to provide SMS was put in issue. It did not produce any
transcript.
Being an agency of the government, NTC should, at all times, maintain a due regard for
101
the constitutional rights of party litigants. In this case, NTC blindsided Globe with a
punitive measure for a reason Globe was not made aware of, and in a manner that
contravened express provisions of law. Consequently, the fine imposed by NTC on Globe
is also invalid. Otherwise put, since the very basis for the fine was invalidly laid, the fine
is necessarily void.
Conclusion
In summary: (i) there is no legal basis under the PTA or the memorandum circulars
promulgated by the NTC to denominate SMS as VAS, and any subsequent determination
by the NTC on whether SMS is VAS should be made with proper regard for due process
and in conformity with the PTA; (ii) the assailed Order violates due process for failure to
sufficiently explain the reason for the decision rendered, for being unsupported by
substantial evidence, and for imputing violation to, and issuing a corresponding fine on,
Globe despite the absence of due notice and hearing which would have afforded Globe
the right to present evidence on its behalf.
Thus, the Order effectively discriminatory and arbitrary as it is, was issued with grave
abuse of discretion and it must be set aside. NTC may not legally require Globe to
secure its approval for Globe to continue providing SMS. This does not imply though
that NTC lacks authority to regulate SMS or to classify it as VAS. However, the move
should be implemented properly, through unequivocal regulations applicable to all
entities that are similarly situated, and in an even-handed manner.
Concurrently, the Court realizes that the PTA is not intended to constrain the industry
102
within a cumbersome regulatory regime. The policy as pre-ordained by legislative fiat
renders the traditionally regimented business in an elementary free state to make
business decisions, avowing that it is under this atmosphere that the industry would
103
prosper. It is disappointing at least if the deregulation thrust of the law is skirted
deliberately. But it is ignominious if the spirit is defeated through a crazy quilt of vague,
overlapping rules that are implemented haphazardly.
By no means should this Decision be interpreted as removing SMS from the ambit of
jurisdiction and review by the NTC. The issue before the Court is only the prior approval
requirement as imposed on Globe and Smart. The NTC will continue to exercise, by way
of its broad grant, jurisdiction over Globe and Smart's SMS offerings, including questions
of rates and customer complaints. Yet caution must be had. Much complication could
have been avoided had the NTC adopted a proactive position, promulgating the
necessary rules and regulations to cope up with the advent of the technologies it
superintends. With the persistent advent of new offerings in the telecommunications

industry, the NTC's role will become more crucial than at any time before. If NTC's
behavior in the present case is but indicative of a malaise pervading this crucial
regulatory arm of the State, the Court fears the resultant confusion within the industry
and the consuming public. The credibility of an administrative agency entrusted with
specialized fields subsists not on judicial doctrine alone, but more so on its intellectual
strength, adherence to law, and basic fairness.
WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals dated 22
November 1999, as well as its Resolution dated 29 July 2000, and the assailed Order of
the NTC dated 19 July 1999 are hereby SET ASIDE. No cost.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.

EN BANC
[G.R. No. 111953. December 12, 1997]
HON. RENATO C. CORONA, in his capacity as Assistant Secretary for Legal Affairs, HON.
JESUS B. GARCIA, in his capacity as Acting Secretary, Department of
Transportation and Communications, and ROGELIO A. DAYAN, in his capacity
as General Manager of Philippine Ports Authority,petitioners, vs. UNITED
HARBOR PILOTS ASSOCIATION OF THE PHILIPPINES and MANILA PILOTS
ASSOCIATION, respondents.
DECISION
ROMERO, J.:
In issuing Administrative Order No. 04-92 (PPA-AO No. 04-92), limiting the term of
appointment of harbor pilots to one year subject to yearly renewal or cancellation, did
the Philippine Ports Authority (PPA) violate respondents right to exercise their
profession and their right to due process of law?
The PPA was created on July 11, 1974, by virtue of Presidential Decree No. 505. On
December 23, 1975, Presidential Decree No. 857 was issued revising the PPAs
charter. Pursuant to its power of control, regulation, and supervision of pilots and the
[1]
[2]
pilotage profession, the PPA promulgated PPA-AO-03-85 on March 21, 1985, which
embodied the Rules and Regulations Governing Pilotage Services, the Conduct of Pilots
and Pilotage Fees in Philippine Ports. These rules mandate, inter alia, that aspiring pilots
[3]
must be holders of pilot licenses and must train as probationary pilots in outports for
three months and in the Port of Manila for four months. It is only after they have
[4]
achieved satisfactory performance that they are givenpermanent and regular
[5]
appointments by the PPA itself to exercise harbor pilotage until they reach the age of
70, unless sooner removed by reason of mental or physical unfitness by the PPA General
[6]
Manager. Harbor pilots in every harbor district are further required to organize
themselves into pilot associations which would make available such equipment as may
be required by the PPA for effective pilotage services. In view of this mandate, pilot
associations invested in floating, communications, and office equipment. In fact, every
new pilot appointed by the PPA automatically becomes a member of a pilot association
and is required to pay a proportionate equivalent equity or capital before being allowed
to assume his duties, as reimbursement to the association concerned of the amount it
paid to his predecessor.
Subsequently, then PPA General Manager Rogelio A. Dayan issued PPA-AO No. 04[7]
92 on July 15, 1992, whose avowed policy was to instill effective discipline and
thereby afford better protection to the port users through the improvement of pilotage
services. This was implemented by providing therein that all existing regular
appointments which have been previously issued either by the Bureau of Customs or
the PPA shall remain valid up to 31 December 1992 only and that all appointments to
harbor pilot positions in all pilotage districts shall, henceforth, be only for a term of one

(1) year from date of effectivity subject to yearly renewal or cancellation by the
Authority after conduct of a rigid evaluation of performance.
On August 12, 1992, respondents United Harbor Pilots Association and the Manila
Pilots Association, through Capt. Alberto C. Compas, questioned PPA-AO No. 04-92
before the Department of Transportation and Communication, but they were informed
by then DOTC Secretary Jesus B. Garcia that the matter of reviewing, recalling or
annulling PPAs administrative issuances lies exclusively with its Board of Directors as its
governing body.
Meanwhile, on August 31, 1992, the PPA issued Memorandum Order No. 08[8]
92 which laid down the criteria or factors to be considered in the reappointment of
[9]
harbor pilots, viz.: (1) Qualifying Factors: safety record and physical/mental medical
[10]
exam report and (2) Criteria for Evaluation:
promptness in servicing vessels,
compliance with PPA Pilotage Guidelines, number of years as a harbor pilot, average
GRT of vessels serviced as pilot, awards/commendations as harbor pilot, and age.
Respondents reiterated their request for the suspension of the implementation
of PPA-AO No. 04-92, but Secretary Garcia insisted on his position that the matter was
within the jurisdiction of the Board of Directors of the PPA. Compas appealed this ruling
to the Office of the President (OP), reiterating his arguments before the DOTC.
On December 23, 1992, the OP issued an order directing the PPA to hold in
abeyance the implementation of PPA-AO No. 04-92. In its answer, the PPA countered
that said administrative order was issued in the exercise of its administrative control
and supervision over harbor pilots under Section 6-a (viii), Article IV of P. D. No. 857, as
amended, and it, along with its implementing guidelines, was intended to restore order
in the ports and to improve the quality of port services.
On March 17, 1993, the OP, through then Assistant Executive Secretary for Legal
Affairs Renato C. Corona, dismissed the appeal/petition and lifted the restraining order
[11]
issued earlier. He concluded that PPA-AO No. 04-92 applied to all harbor pilots and,
for all intents and purposes, was not the act of Dayan, but of the PPA, which was merely
implementing Section 6 of P.D. No. 857, mandating it to control, regulate and supervise
pilotage and conduct of pilots in any port district.
On the alleged unconstitutionality and illegality of PPA-AO No. 04-92 and its
implementing memoranda and circulars, Secretary Corona opined that:
The exercise of ones profession falls within the constitutional guarantee against
wrongful deprivation of, or interference with, property rights without due process. In
the limited context of this case, PPA-AO 04-92 does not constitute a wrongful
interference with, let alone a wrongful deprivation of, the property rights of those
affected thereby. As may be noted, the issuance aims no more than to improve pilotage
services by limiting the appointment to harbor pilot positions to one year, subject to
renewal or cancellation after a rigid evaluation of the appointees performance.
PPA-AO 04-92 does not forbid, but merely regulates, the exercise by harbor pilots of
their profession in PPAs jurisdictional area. (Emphasis supplied)

Finally, as regards the alleged absence of ample prior consultation before the
issuance of the administrative order, Secretary Corona cited Section 26 of P.D. No. 857,
which merely requires the PPA to consult with relevant Government agencies. Since the
PPA Board of Directors is composed of the Secretaries of the DOTC, the Department of
Public Works and Highways, the Department of Finance, and the Department of
Environment and Natural Resources, as well as the Director-General of the National
Economic Development Agency, the Administrator of the Maritime Industry Authority
(MARINA), and the private sector representative who, due to his knowledge and
expertise, was appointed by the President to the Board, he concluded that the law has
been sufficiently complied with by the PPA in issuing the assailed administrative order.
Consequently, respondents filed a petition for certiorari, prohibition and injunction
with prayer for the issuance of a temporary restraining order and damages, before
Branch 6 of the Regional Trial Court of Manila, which was docketed as Civil Case No. 93[12]
65673. On September 6, 1993, the trial court rendered the following judgment:
WHEREFORE, for all the foregoing, this Court hereby rules that:
1. Respondents (herein petitioners) have acted in excess of jurisdiction and
with grave abuse of discretion and in a capricious, whimsical and
arbitrary manner in promulgating PPA Administrative Order 04-92
including all its implementing Memoranda, Circulars and Orders;
2. PPA Administrative Order 04-92 and its implementing Circulars and Orders are
declared null and void;
3. The respondents are permanently enjoined from implementing PPA Administrative
Order 04-92 and its implementing Memoranda, Circulars and Orders.
No costs.
SO ORDERED.
The court a quo pointed out that the Bureau of Customs, the precursor of the PPA,
recognized pilotage as a profession and, therefore, a property right
[13]
under Callanta v. Carnation Philippines, Inc. Thus, abbreviating the term within which
that privilege may be exercised would be an interference with the property rights of the
harbor pilots. Consequently, any withdrawal or alteration of such property right must be
strictly made in accordance with the constitutional mandate of due process of law. This
was apparently not followed by the PPA when it did not conduct public hearings prior to
the issuance of PPA-AO No. 04-92; respondents allegedly learned about it only after its
publication in the newspapers. From this decision, petitioners elevated their case to this
Court on certiorari.
After carefully examining the records and deliberating on the arguments of the
parties, the Court is convinced that PPA-AO No. 04-92 was issued in stark disregard of

respondents right against deprivation of property without due process of

law. Consequently, the instant petition must be denied.
Section 1 of the Bill of Rights lays down what is known as the due process clause of
the Constitution, viz.:
SECTION 1. No person shall be deprived of life, liberty, or property without
due process of law, x x x.
In order to fall within the aegis of this provision, two conditions must concur,
namely, that there is a deprivation and that such deprivation is done without proper
observance of due process. When one speaks of due process of law, however, a
distinction must be made between matters of procedure and matters of substance. In
essence, procedural due process refers to the method or manner by which the law is
enforced, while substantive due process requires that the law itself, not merely the
[14]
procedures by which the law would be enforced, is fair, reasonable, and just.
PPA-AO
No. 04-92 must be examined in light of this distinction.
Respondents argue that due process was not observed in the adoption of PPA-AO
No. 04-92 allegedly because no hearing was conducted whereby relevant government
agencies and the pilots themselves could ventilate their views. They are obviously
referring to the procedural aspect of the enactment. Fortunately, the Court has
maintained a clear position in this regard, a stance it has stressed in the recent case
[15]
of Lumiqued v. Hon. Exevea,
where it declared that (a)s long as a party was given the
opportunity to defend his interests in due course, he cannot be said to have been
denied due process of law, for this opportunity to be heard is the very essence of due
process. Moreover, this constitutional mandate is deemed satisfied if a person is
granted an opportunity to seek reconsideration of the action or ruling complained of.
In the case at bar, respondents questioned PPA-AO No. 04-92 no less than four
[16]
times
before the matter was finally elevated to this Tribunal. Their arguments on this
score, however, fail to persuade. While respondents emphasize that the Philippine
Coast Guard, which issues the licenses of pilots after administering the pilots
[17]
examinations, was not consulted,
the facts show that the MARINA, which took over
the licensing function of the Philippine Coast Guard, was duly represented in the Board
of Directors of the PPA. Thus, petitioners correctly argued that, there being no matters
of naval defense involved in the issuance of the administrative order, the Philippine
[18]
Coast Guard need not be consulted.
Neither does the fact that the pilots themselves were not consulted in any way
taint the validity of the administrative order. As a general rule, notice and hearing, as
the fundamental requirements of procedural due process, are essential only when an
administrative body exercises its quasi-judicial function. In the performance of its
executive or legislative functions, such as issuing rules and regulations, an
[19]
administrative body need not comply with the requirements of notice and hearing.
Upon the other hand, it is also contended that the sole and exclusive right to the
exercise of harbor pilotage by pilots is a settled issue. Respondents aver that said right
has become vested and can only be withdrawn or shortened by observing the
constitutional mandate of due process of law. Their argument has thus shifted from the

procedural to one of substance. It is here where PPA-AO No. 04-92 fails to meet the
condition set by the organic law.
There is no dispute that pilotage as a profession has taken on the nature of a
property right. Even petitioner Corona recognized this when he stated in his March 17,
1993, decision that (t)he exercise of ones profession falls within the constitutional
guarantee against wrongful deprivation of, or interference with, property rights without
[20]
due process.
He merely expressed the opinion that (i)n the limited context of this
case, PPA-AO 04-92 does not constitute a wrongful interference with, let alone a
wrongful deprivation of, the property rights of those affected thereby, and that PPA-AO
04-92 does not forbid, but merely regulates, the exercise by harbor pilots of their
profession. As will be presently demonstrated, such supposition is gravely erroneous
and tends to perpetuate an administrative order which is not only unreasonable but
also superfluous.
Pilotage, just like other professions, may be practiced only by duly licensed
individuals. Licensure is the granting of license especially to practice a profession. It is
also the system of granting licenses (as for professional practice) in accordance with
[21]
established standards.
A license is a right or permission granted by some competent
authority to carry on a business or do an act which, without such license, would be
[22]
illegal.
Before harbor pilots can earn a license to practice their profession, they literally
have to pass through the proverbial eye of a needle by taking, not one
but five examinations, each followed by actual training and practice. Thus, the court a
quo observed:
Petitioners (herein respondents) contend, and the respondents (herein petitioners) do
not deny, that here (sic) in this jurisdiction, before a person can be a harbor pilot, he
must pass five (5) government professional examinations, namely, (1) For Third Mate
and after which he must work, train and practice on board a vessel for at least a year;
(2) For Second Mate and after which he must work, train and practice for at least a year;
(3) For Chief Mate and after which he must work, train and practice for at least a year;
(4) For a Master Mariner and after which he must work as Captain of vessels for at least
two (2) years to qualify for an examination to be a pilot; and finally, of course, that given
for pilots.
Their license is granted in the form of an appointment which allows them to
engage in pilotage until they retire at the age 70 years. This is a vested right. Under the
terms of PPA-AO No. 04-92, (a)ll existing regular appointments which have been
previously issued by the Bureau of Customs or the PPA shall remain valid up to 31
December 1992 only, and (a)ll appointments to harbor pilot positions in all pilotage
districts shall, henceforth, be only for a term of one (1) year from date of effectivity
subject to renewal or cancellation by the Authority after conduct of a rigid evaluation of
performance.
It is readily apparent that PPA-AO No. 04-92 unduly restricts the right of harbor
pilots to enjoy their profession before their compulsory retirement. In the past, they

enjoyed a measure of security knowing that after passing five examinations and
undergoing years of on-the-job training, they would have a license which they could use
until their retirement, unless sooner revoked by the PPA for mental or physical
unfitness. Under the new issuance, they have to contend with an annual cancellation of
their license which can be temporary or permanent depending on the outcome of their
performance evaluation. Veteran pilots and neophytes alike are suddenly confronted
with one-year terms which ipso facto expire at the end of that period. Renewal of their
license is now dependent on a rigid evaluation of performance which is conducted only
after the license has already been cancelled. Hence, the use of the term renewal. It is
this pre-evaluation cancellation which primarily makes PPA-AO No. 04-92 unreasonable
and constitutionally infirm. In a real sense, it is a deprivation of property without due
process of law.
The Court notes that PPA-AO No. 04-92 and PPA-MO No. 08-92 are already
covered by PPA-AO No. 03-85, which is still operational. Respondents are correct in
[23]
pointing out that PPA-AO No. 04-92 is a surplusage and, therefore, an unnecessary
enactment. PPA-AO 03-85 is a comprehensive order setting forth the Rules and
Regulations Governing Pilotage Services, the Conduct of Pilots and Pilotage Fees in
Philippine Ports. It provides, inter alia, for the qualification, appointment, performance
evaluation, disciplining and removal of harbor pilots - matters which are duplicated in
PPA-AO No. 04-92 and its implementing memorandum order. Since it adds nothing new
or substantial, PPA-AO No. 04-92 must be struck down.
Finally, respondents insinuation that then PPA General Manager Dayan was
responsible for the issuance of the questioned administrative order may have some
factual basis; after all, power and authority were vested in his office to propose rules
and regulations. The trial courts finding of animosity between him and private
respondents might likewise have a grain of truth.Yet the number of cases filed in court
between private respondents and Dayan, including cases which have reached this Court,
cannot certainly be considered the primordial reason for the issuance of PPA-AO No. 0492. In the absence of proof to the contrary, Dayan should be presumed to have acted in
accordance with law and the best of professional motives. In any event, his actions are
certainly always subject to scrutiny by higher administrative authorities.
WHEREFORE, the instant petition is hereby DISMISSED and the assailed decision of
the court a quo dated September 6, 1993, in Civil Case No. 93-65673 is AFFIRMED. No
pronouncement as to costs.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Bellosillo, Melo, Puno, Vitug, Kapunan,
Mendoza, Francisco, and Panganiban, JJ., concur.
Martinez, J., no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 76118 March 30, 1993
THE CENTRAL BANK OF THE PHILIPPINES and RAMON V. TIAOQUI, petitioners,
vs.
COURT OF APPEALS and TRIUMPH SAVINGS BANK, respondents.
Sycip, Salazar, Hernandez & Gatmaitan for petitioners.
Quisumbing, Torres & Evangelista for Triumph Savings Bank.
BELLOSILLO, J.:
May a Monetary Board resolution placing a private bank under receivership be annulled
on the ground of lack of prior notice and hearing?
This petition seeks review of the decision of the Court of Appeals in CA G.R. S.P. No.
07867 entitled "The Central Bank of the Philippines and Ramon V. Tiaoqui vs. Hon. Jose
C. de Guzman and Triumph Savings Bank," promulgated 26 September 1986, which
affirmed the twin orders of the Regional Trial Court of Quezon City issued 11 November
1
1985 denying herein petitioners' motion to dismiss Civil Case No. Q-45139, and
directing petitioner Ramon V. Tiaoqui to restore the private management of Triumph
Savings Bank (TSB) to its elected board of directors and officers, subject to Central Bank
2
comptrollership.
The antecedent facts: Based on examination reports submitted by the Supervision and
Examination Sector (SES), Department II, of the Central Bank (CB) "that the financial
condition of TSB is one of insolvency and its continuance in business would involve
3
probable loss to its depositors and creditors," the Monetary Board (MB) issued on 31
May 1985 Resolution No. 596 ordering the closure of TSB, forbidding it from doing
business in the Philippines, placing it under receivership, and appointing Ramon V.
4
Tiaoqui as receiver. Tiaoqui assumed office on 3 June 1985.
On 11 June 1985, TSB filed a complaint with the Regional Trial Court of Quezon City,
docketed as Civil Case No. Q-45139, against Central Bank and Ramon V. Tiaoqui to annul
MB Resolution No. 596, with prayer for injunction, challenging in the process the
constitutionality of Sec. 29 of R.A. 269, otherwise known as "The Central Bank Act," as
amended, insofar as it authorizes the Central Bank to take over a banking institution
even if it is not charged with violation of any law or regulation, much less found guilty
5
thereof.

On 1 July 1985, the trial court temporarily restrained petitioners from implementing MB
Resolution No. 596 "until further orders", thus prompting them to move for the quashal
of the restraining order (TRO) on the ground that it did not comply with said Sec. 29, i.e.,
that TSB failed to show convincing proof of arbitrariness and bad faith on the part of
petitioners;' and, that TSB failed to post the requisite bond in favor of Central Bank.
On 19 July 1985, acting on the motion to quash the restraining order, the trial court
granted the relief sought and denied the application of TSB for injunction. Thereafter,
Triumph Savings Bank filed with Us a petition for certiorariunder Rule 65 of the Rules of
6
Court dated 25 July 1985 seeking to enjoin the continued implementation of the
questioned MB resolution.
Meanwhile, on 9 August 1985; Central Bank and Ramon Tiaoqui filed a motion to
dismiss the complaint before the RTC for failure to state a cause of action, i.e., it did not
allege ultimate facts showing that the action was plainly arbitrary and made in bad faith,
which are the only grounds for the annulment of Monetary Board resolutions placing a
bank under conservatorship, and that TSB was without legal capacity to sue except
7
through its receiver.
On 9 September 1985, TSB filed an urgent motion in the RTC to direct receiver Ramon V.
Tiaoqui to restore TSB to its private management. On 11 November 1985, the RTC in
separate orders denied petitioners' motion to dismiss and ordered receiver Tiaoqui to
restore the management of TSB to its elected board of directors and officers, subject to
CB comptrollership.
Since the orders of the trial court rendered moot the petition for certiorari then pending
before this Court, Central Bank and Tiaoqui moved on 2 December 1985 for the
8
dismissal of G.R. No. 71465 which We granted on 18 December 1985.
Instead of proceeding to trial, petitioners elevated the twin orders of the RTC to the
9
Court of Appeals on a petition for certiorari and prohibition under Rule 65. On 26
September 1986, the appellate court, upheld the orders of the trial court thus
Petitioners' motion to dismiss was premised on two grounds, namely,
that the complaint failed to state a cause of action and that the
Triumph Savings Bank was without capacity to sue except through its
appointed receiver.
Concerning the first ground, petitioners themselves admit that the
Monetary Board resolution placing the Triumph Savings Bank under
the receivership of the officials of the Central Bank was done without
prior hearing, that is, without first hearing the side of the bank. They
further admit that said resolution can be the subject of judicial review
and may be set aside should it be found that the same was issued with
arbitrariness and in bad faith.

The charge of lack of due process in the complaint may be taken as

constitutive of allegations of arbitrariness and bad faith. This is not of
course to be taken as meaning that there must be previous hearing
before the Monetary Board may exercise its powers under Section 29
of its Charter. Rather, judicial review of such action not being
foreclosed, it would be best should private respondent be given the
chance to show and prove arbitrariness and bad faith in the issuance
of the questioned resolution, especially so in the light of the
statement of private respondent that neither the bank itself nor its
officials were even informed of any charge of violating banking laws.
In regard to lack of capacity to sue on the part of Triumph Savings
Bank, we view such argument as being specious, for if we get the drift
of petitioners' argument, they mean to convey the impression that
only the CB appointed receiver himself may question the CB resolution
appointing him as such. This may be asking for the impossible, for it
cannot be expected that the master, the CB, will allow the receiver it
has appointed to question that very appointment. Should the
argument of petitioners be given circulation, then judicial review of
actions of the CB would be effectively checked and foreclosed to the
very bank officials who may feel, as in the case at bar, that the CB
action ousting them from the bank deserves to be set aside.
xxx xxx xxx
On the questioned restoration order, this Court must say that it finds
nothing whimsical, despotic, capricious, or arbitrary in its issuance,
said action only being in line and congruent to the action of the
Supreme Court in the Banco Filipino Case (G.R. No. 70054) where
management of the bank was restored to its duly elected directors
10
and officers, but subject to the Central Bank comptrollership.
On 15 October 1986, Central Bank and its appointed receiver, Ramon V. Tiaoqui, filed
this petition under Rule 45 of the Rules of Court praying that the decision of the Court of
Appeals in CA-G.R. SP No. 07867 be set aside, and that the civil case pending before the
RTC
of
Quezon
City,
Civil
Case
No.
Q-45139, be dismissed. Petitioners allege that the Court of Appeals erred
(1) in affirming that an insolvent bank that had been summarily closed
by the Monetary Board should be restored to its private management
supposedly because such summary closure was "arbitrary and in bad
faith" and a denial of "due process";
(2) in holding that the "charge of lack of due process" for "want of
prior hearing" in a complaint to annul a Monetary Board receivership

resolution under Sec. 29 of R.A. 265 "may be taken as . . allegations of

arbitrariness and bad faith"; and
(3) in holding that the owners and former officers of an insolvent bank
may still act or sue in the name and corporate capacity of such bank,
even after it had been ordered closed and placed under
11
receivership.
The respondents, on the other hand, allege inter alia that in the Banco
12
Filipino case, We held that CB violated the rule on administrative due process laid
down in Ang Tibay vs. CIR (69 Phil. 635) and Eastern Telecom Corp. vs. Dans, Jr. (137
SCRA 628) which requires that prior notice and hearing be afforded to all parties in
administrative proceedings. Since MB Resolution No. 596 was adopted without TSB
being previously notified and heard, according to respondents, the same is void for want
of due process; consequently, the bank's management should be restored to its board
13
of directors and officers.
Petitioners claim that it is the essence of Sec. 29 of R.A. 265 that prior notice and
hearing in cases involving bank closures should not be required since in all probability a
hearing would not only cause unnecessary delay but also provide bank "insiders" and
stockholders the opportunity to further dissipate the bank's resources, create liabilities
for the bank up to the insured amount of P40,000.00, and even destroy evidence of
fraud or irregularity in the bank's operations to the prejudice of its depositors and
14
creditors. Petitioners further argue that the legislative intent of Sec. 29 is to repose in
the Monetary Board exclusive power to determine the existence of statutory grounds
for the closure and liquidation of banks, having the required expertise and specialized
competence to do so.
The first issue raised before Us is whether absence of prior notice and hearing may be
considered acts of arbitrariness and bad faith sufficient to annul a Monetary Board
resolution enjoining a bank from doing business and placing it under receivership.
Otherwise stated, is absence of prior notice and hearing constitutive of acts of
arbitrariness and bad faith?
15

Under Sec. 29 of R.A. 265, the Central Bank, through the Monetary Board, is vested
with exclusive authority to assess, evaluate and determine the condition of any bank,
and finding such condition to be one of insolvency, or that its continuance in business
would involve probable loss to its depositors or creditors, forbid the bank or non-bank
financial institution to do business in the Philippines; and shall designate an official of
the CB or other competent person as receiver to immediately take charge of its assets
16
and liabilities. The fourth paragraph, which was then in effect at the time the action
was commenced, allows the filing of a case to set aside the actions of the Monetary
Board which are tainted with arbitrariness and bad faith.
Contrary to the notion of private respondent, Sec. 29 does not contemplate prior notice
and hearing before a bank may be directed to stop operations and placed under

receivership. When par. 4 (now par. 5, as amended by E.O. 289) provides for the filing of
a case within ten (10) days after the receiver takes charge of the assets of the bank, it is
unmistakable that the assailed actions should precede the filing of the case. Plainly, the
legislature could not have intended to authorize "no prior notice and hearing" in the
closure of the bank and at the same time allow a suit to annul it on the basis of absence
thereof.
17

In the early case of Rural Bank of Lucena, Inc. v. Arca [1965], We held that a previous
hearing is nowhere required in Sec. 29 nor does the constitutional requirement of due
process demand that the correctness of the Monetary Board's resolution to stop
operation and proceed to liquidation be first adjudged before making the resolution
effective. It is enough that a subsequent judicial review be provided.
18

Even in Banco Filipino, We reiterated that Sec. 29 of R.A. 265 does not require a
previous hearing before the Monetary Board can implement its resolution closing a
bank, since its action is subject to judicial scrutiny as provided by law.
It may be emphasized that Sec. 29 does not altogether divest a bank or a non-bank
financial institution placed under receivership of the opportunity to be heard and
present evidence on arbitrariness and bad faith because within ten (10) days from the
date the receiver takes charge of the assets of the bank, resort to judicial review may be
had by filing an appropriate pleading with the court. Respondent TSB did in fact avail of
this remedy by filing a complaint with the RTC of Quezon City on the 8th day following
the takeover by the receiver of the bank's assets on 3 June 1985.
This "close now and hear later" scheme is grounded on practical and legal
considerations to prevent unwarranted dissipation of the bank's assets and as a valid
exercise of police power to protect the depositors, creditors, stockholders and the
general public.
In Rural Bank of Buhi, Inc. v. Court of Appeals,

19

We stated that

. . . due process does not necessarily require a prior hearing; a hearing

or an opportunity to be heard may be subsequent to the closure. One
can just imagine the dire consequences of a prior hearing: bank runs
would be the order of the day, resulting in panic and hysteria. In the
process, fortunes may be wiped out and disillusionment will run the
gamut of the entire banking community.
We stressed in Central Bank of the Philippines v. Court of Appeals

20

that

. . . the banking business is properly subject to reasonable regulation

under the police power of the state because of its nature and relation
to the fiscal affairs of the people and the revenues of the state (9 CJS
32). Banks are affected with public interest because they receive funds
from the general public in the form of deposits. Due to the nature of

their transactions and functions, a fiduciary relationship is created

between the banking institutions and their depositors. Therefore,
banks are under the obligation to treat with meticulous care and
utmost fidelity the accounts of those who have reposed their trust and
confidence in them (Simex International [Manila], Inc., v. Court of
Appeals, 183 SCRA 360 [1990]).
It is then the Government's responsibility to see to it that the financial
interests of those who deal with the banks and banking institutions, as
depositors or otherwise, are protected. In this country, that task is
delegated to the Central Bank which, pursuant to its Charter (R.A. 265,
as amended), is authorized to administer the monetary, banking and
credit system of the Philippines. Under both the 1973 and 1987
Constitutions, the Central Bank is tasked with providing policy
direction in the areas of money, banking and credit; corollarily, it shall
have supervision over the operations of banks (Sec. 14, Art. XV, 1973
Constitution, and Sec. 20, Art. XII, 1987 Constitution). Under its
charter, the CB is further authorized to take the necessary steps
against any banking institution if its continued operation would cause
prejudice to its depositors, creditors and the general public as well.
This power has been expressly recognized by this Court. In Philippine
Veterans Bank Employees Union-NUBE v. Philippine Veterans Banks
(189 SCRA 14 [1990], this Court held that:
. . . [u]nless adequate and determined efforts are
taken by the government against distressed and
mismanaged banks, public faith in the banking
system is certain to deteriorate to the prejudice of
the national economy itself, not to mention the
losses suffered by the bank depositors, creditors,
and stockholders, who all deserve the protection of
the government. The government cannot simply
cross its arms while the assets of a bank are being
depleted through mismanagement or irregularities.
It is the duty of the Central Bank in such an event to
step in and salvage the remaining resources of the
bank so that they may not continue to be dissipated
or plundered by those entrusted with their
management.
Section 29 of R.A. 265 should be viewed in this light; otherwise, We would be
subscribing to a situation where the procedural rights invoked by private respondent
would take precedence over the substantive interests of depositors, creditors and
stockholders over the assets of the bank.

Admittedly, the mere filing of a case for receivership by the Central Bank can trigger a
bank run and drain its assets in days or even hours leading to insolvency even if the bank
be actually solvent. The procedure prescribed in Sec. 29 is truly designed to protect the
interest of all concerned, i.e., the depositors, creditors and stockholders, the bank itself,
and the general public, and the summary closure pales in comparison to the protection
afforded public interest. At any rate, the bank is given full opportunity to
prove arbitrariness and bad faith in placing the bank under receivership, in which event,
the resolution may be properly nullified and the receivership lifted as the trial court may
determine.
The heavy reliance of respondents on the Banco Filipino case is misplaced in view of
factual circumstances therein which are not attendant in the present case. We ruled
in Banco Filipino that the closure of the bank was arbitrary and attendant with grave
abuse of discretion, not because of the absence of prior notice and hearing, but that the
Monetary Board had no sufficient basis to arrive at a sound conclusion of insolvency to
justify the closure. In other words, the arbitrariness, bad faith and abuse of discretion
were determined only after the bank was placed under conservatorship and evidence
thereon was received by the trial court. As this Court found in that case, the Valenzuela,
Aurellano and Tiaoqui Reports contained unfounded assumptions and deductions which
did not reflect the true financial condition of the bank. For instance, the subtraction of
an uncertain amount as valuation reserve from the assets of the bank would merely
result in its net worth or the unimpaired capital and surplus; it did not reflect the total
financial condition of Banco Filipino.
Furthermore, the same reports showed that the total assets of Banco Filipino far
exceeded its total liabilities. Consequently, on the basis thereof, the Monetary Board
had no valid reason to liquidate the bank; perhaps it could have merely ordered its
reorganization or rehabilitation, if need be. Clearly, there was in that case a manifest
arbitrariness, abuse of discretion and bad faith in the closure of Banco Filipino by the
Monetary Board. But, this is not the case before Us. For here, what is being raised as
arbitrary by private respondent is the denial of prior notice and hearing by the
Monetary Board, a matter long settled in this jurisdiction, and not the arbitrariness
which the conclusions of the Supervision and Examination Sector (SES), Department II,
of the Central Bank were reached.
Once again We refer to Rural Bank of Buhi, Inc. v. Court of Appeals,
pronouncement therein that

21

In sum, appeal to procedural due process cannot just outweigh the evil sought to be
prevented; hence, We rule that Sec. 29 of R.A. 265 is a sound legislation promulgated in
accordance with the Constitution in the exercise of police power of the state.
Consequently, the absence of notice and hearing is not a valid ground to annul a
Monetary Board resolution placing a bank under receivership. The absence of prior
notice and hearing cannot be deemed acts of arbitrariness and bad faith. Thus, an MB
resolution placing a bank under receivership, or conservatorship for that matter, may
only be annulled after a determination has been made by the trial court that its issuance
was tainted with arbitrariness and bad faith. Until such determination is made, the
status quo shall be maintained, i.e., the bank shall continue to be under receivership.
As regards the second ground, to rule that only the receiver may bring suit in behalf of
the bank is, to echo the respondent appellate court, "asking for the impossible, for it
cannot be expected that the master, the CB, will allow the receiver it has appointed to
question that very appointment." Consequently, only stockholders of a bank could file
an action for annulment of a Monetary Board resolution placing the bank under
22
receivership and prohibiting it from continuing operations. In Central Bank v. Court of
23
Appeals, We explained the purpose of the law
. . . in requiring that only the stockholders of record representing the
majority of the capital stock may bring the action to set aside a
resolution to place a bank under conservatorship is to ensure that it
be not frustrated or defeated by the incumbent Board of Directors or
officers who may immediately resort to court action to prevent its
implementation or enforcement. It is presumed that such a resolution
is directed principally against acts of said Directors and officers which
place the bank in a state of continuing inability to maintain a condition
of liquidity adequate to protect the interest of depositors and
creditors. Indirectly, it is likewise intended to protect and safeguard
the rights and interests of the stockholders. Common sense and public
policy dictate then that the authority to decide on whether to contest
the resolution should be lodged with the stockholders owning a
majority of the shares for they are expected to be more objective in
determining whether the resolution is plainly arbitrary and issued in
bad faith.

and reiterate Our

. . . the law is explicit as to the conditions prerequisite to the action of

the Monetary Board to forbid the institution to do business in the
Philippines and to appoint a receiver to immediately take charge of
the bank's assets and liabilities. They are: (a) an examination made by
the examining department of the Central Bank; (b) report by said
department to the Monetary Board; and (c) prima facieshowing that
its continuance in business would involve probable loss to its
depositors or creditors.

It is observed that the complaint in this case was filed on 11 June 1985 or two (2) years
prior to 25 July 1987 when E.O. 289 was issued, to be effective sixty (60) days after its
approval (Sec. 5). The implication is that before E.O
. 289, any party in interest could institute court proceedings to question a Monetary
Board resolution placing a bank under receivership. Consequently, since the instant
complaint was filed by parties representing themselves to be officers of respondent
Bank (Officer-in-Charge and Vice President), the case before the trial court should now
take its natural course. However, after the effectivity of E.O. 289, the procedure stated
therein should be followed and observed.

PREMISES considered, the Decision of the Court of Appeals in CA-G.R. SP No. 07867
is AFFIRMED, except insofar as it upholds the Order of the trial court of 11 November
1985 directing petitioner RAMON V. TIAOQUI to restore the management of TRIUMPH
SAVINGS BANK to its elected Board of Directors and Officers, which is hereby SET ASIDE.
Let this case be remanded to the Regional Trial Court of Quezon City for further
proceedings to determine whether the issuance of Resolution No. 596 of the Monetary
Board was tainted with arbitrariness and bad faith and to decide the case accordingly.
SO ORDERED.
Narvasa, C.J., Cruz, Padilla, Bidin, Grio-Aquino, Regalado, Davide, Jr., Romero, Nocon,
Campos, Jr. and Quiason, JJ., concur.
Feliciano and Melo, JJ., took no part.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-61689 June 20, 1988
RURAL BANK OF BUHI, INC., and HONORABLE JUDGE CARLOS R.
BUENVIAJE, petitioners,
vs.
HONORABLE COURT OF APPEALS, CENTRAL BANK OF THE PHILIPPINES and
CONSOLACION ODRA,respondents.
Manuel B. Tomacruz and Rustico Pasilavan for petitioners.
I.B. Regalado, Jr. and Pacifica T. Torres for respondents.
PARAS, J.:
This is a petition for review on certiorari with preliminary mandatory injunction seeking
the reversal of the orders of the Court of Appeals dated March 19, 1982 and March 24,
1982 and its decision * (HATOL) promulgated on June 17,1982 in CA-G.R. No. 13944
entitled "Banko Central ng Pilipinas at Consolacion Odra Laban Kina Rural Bank of Buhi
(Camarines Sur), Inc." and praying for a restraining order or a preliminary mandatory
injunction to restrain respondents from enforcing aforesaid orders and decision of the
respondent Court, and to give due course to the petitioners' complaint in IR-428,
pending before Hon. Judge Carlos R. Buenviaje of Branch VII, CFI, Camarines Sur.
The decretal portion of the appealed decision reads:
DAHIL DITO, ang utos ng pinasasagot sa Hukom noong ika-9 ng Marso,
1982, ay isinasang-tabi. Kapalit nito, isang utos and ipinalabas na naguutos sa pinasasagot sa Hukom na itigil ang anumang pagpapatuloy o
pagdidinig kaugnay sa usaping IR-428 na pinawawalang saysay din ng
Hukumang ito.
SIYANG IPINAG-UUTOS.
The antecedent facts of the case are as follows:
The petitioner Rural Bank of Buhi, Inc. (hereinafter referred to as Buhi) is a juridical
entity existing under the laws of the Philippines. Buhi is a rural bank that started its
operations only on December 26,1975 (Rollo, p. 86).

In 1980, an examination of the books and affairs of Buhi was ordered conducted by the
Rural Banks and Savings and Loan Association (DRBSLA), Central Bank of the Philippines,
which by law, has charge of the supervision and examination of rural banks and savings
and loan associations in the Philippines. However, said petitioner refused to be
examined and as a result thereof, financial assistance was suspended.
On January 10, 1980, a general examination of the bank's affairs and operations was
conducted and there were found by DRBSLA represented by herein respondent,
Consolacion V. Odra, Director of DRBSLA, among others, massive irregularities in its
operations consisting of loans to unknown and fictitious borrowers, where the sum of P
1,704,782.00 was past due and another sum of P1,130,000.00 was also past due in favor
of the Central Bank (Rollo, p. 86). The promissory notes evidencing these loans were
rediscounted with the Central Bank for cash. As a result thereof, the bank became
insolvent and prejudiced its depositors and creditors.
Respondent, Consolacion V. Odra, submitted a report recommending to the Monetary
Board of the Central Bank the placing of Buhi under receivership in accordance with
Section 29 of Republic Act No. 265, as amended, the designation of the Director,
DRBSLA, as receiver thereof. On March 28, 1980, the Monetary Board, finding the report
to be true, adopted Resolution No. 583 placing Buhi, petitioner herein, under
receivership and designated respondent, Consolacion V. Odra, as Receiver, pursuant to
the provisions of Section 29 of Republic Act No. 265 as amended (Rollo, p. 111).
In a letter dated April 8, 1980, respondent Consolacion V. Odra, as receiver,
implemented and carried out said Monetary Board Resolution No. 583 by authorizing
deputies of the receiver to take control, possession and charge of Buhi, its assets and
liabilities (Rollo, p. 109).
Imelda del Rosario, Manager of herein petitioner Buhi, filed a petition for injunction
with Restraining Order dated April 23, 1980, docketed as Special Proceedings IR-428
against respondent Consolacion V. Odra and DRBSLA deputies in the Court of First
Instance of Camarines Sur, Branch VII, Iriga City, entitled Rural Bank of Buhi vs. Central
Bank, which assailed the action of herein respondent Odra in recommending the
receivership over Buhias a violation of the provisions of Sections 28 and 29 of Republic
Act No. 265 as amended, and Section 10 of Republic Act No. 720 (The Rural Banks Act)
and as being ultra vires and done with grave abuse of discretion and in excess of
jurisdiction (Rollo, p. 120).
Respondents filed their motion to dismiss dated May 27, 1980 alleging that the petition
did not allege a cause of action and is not sufficient in form and substance and that it
was filed in violation of Section 29, Republic Act No. 265 as amended by Presidential
Decree No. 1007 (Rollo, p. 36).
Petitioners, through their counsel, filed an opposition to the motion to dismiss dated
June 17, 1980 averring that the petition alleged a valid cause of action and that
respondents have violated the due process clause of the Constitution (Rollo, p. 49).

Later, respondents filed a reply to the opposition dated July 1, 1980, claiming that the
petition is not proper; that Imelda del Rosario is not the proper representative of the
bank; that the petition failed to state a cause of action; and, that the provisions of
Section 29 of Republic Act No. 265 had been faithfully observed (Rollo, p. 57).

On March 15,1982, herein petitioner Judge issued the order admitting the bond of
P300,220.00 filed by the petitioner, and directing the respondents to surrender the
possession of the Rural Bank of Buhi, together with all its equipments, accessories, etc.
to the petitioners (Rollo, p. 6).

On August 22, 1980, the Central Bank Monetary Board issued a Resolution No. 1514
ordering the liquidation of the Rural Bank of Buhi (Rollo, p. 108).

Consequently, on March 16, 1982, herein petitioner Judge issued the writ of execution
directing the Acting Provincial Sheriff of Camarines Sur to implement the Court's order
of March 9, 1982 (Rollo, p. 268). Complying with the said order of the Court, the Deputy
Provincial Sheriff went to the Buhi premises to implement the writ of execution but the
vault of the petitioner bank was locked and no inventory was made, as evidenced by the
Sheriffs Report (Rollo, pp. 83-84). Thus, the petitioner herein filed with the Court an
"Urgent Ex-Parte Motion to Allow Sheriff Calope to Force Open Bank Vault" on the same
day (Rollo, p. 268). Accordingly, on March 17, 1982, herein petitioner Judge granted the
aforesaid Ex-Parte Motion to Force Open the Bank Vault (Rollo, p. 269).

On September 1, 1981, the Office of the Solicitor General, in accordance with Republic
Act No. 265, Section 29, filed in the same Court of First Instance of Camarines Sur,
Branch VII, a petition for Assistance in the Liquidation of Buhi, which petition was
docketed as SP-IR-553, pursuant to the Monetary Board Resolution No. 1514 (Rollo, pp.
89; 264).
Meanwhile, respondent Central Bank filed on September 15, 1981, in Civil Case No. IR428 a Supplemental Motion To Dismiss on the ground that the receivership of Buhi, in
view of the issuance of the Monetary Board Resolution No. 1514 had completely
become moot and academic (Rollo, p. 68) and the fact that Case SP-IR-553 for the
liquidation of Buhi was already pending with the same Court (Rollo, p. 69).
On October 16, 1981, petitioners herein filed their amended complaint in Civil Case No.
IR-428 alleging that the issuance of Monetary Board Resolution No. 583 was plainly
arbitrary and in bad faith under aforequoted Section 29 of Republic Act No. 265 as
amended, among others (Rollo, p. 28). On the same day, petitioner herein filed a
rejoinder to its opposition to the motion to dismiss (Rollo, p. 145).
On March 9,1982, herein petitioner Judge Buenviaje, issued an order denying the
respondents' motion to dismiss, supplemental motion to dismiss and granting a
temporary restraining order enjoining respondents from further managing and
administering the Rural Bank of Buhi and to deliver the possession and control thereof
to the petitioner Bank under the same conditions and with the same financial status as
when the same was taken over by herein respondents (defendants) on April 16, 1980
and further enjoining petitioner to post a bond in the amount of three hundred
thousand pesos (P300,000.00) (Rollo, p. 72).
The dispositive portion of said decision reads:
WHEREFORE, premises considered, the motion to dismiss and
supplemental motion to dismiss, in the light of petitioners' opposition,
for want of sufficient merit is denied. Respondents are hereby
directed to file their answer within ten (10) days from receipt of a copy
of this order. (Rollo, p. 4).
On March 11, 1982, petitioner Buhi through counsel, conformably with the abovementioned order, filed a Motion to Admit Bond in the amount of P300,220.00 (Rollo, pp.
78-80).

On March 18, 1982, counsel for petitioner filed another "Urgent Ex-Parte Motion to
Order Manager of City Trust to Allow Petitioner to Withdraw Rural Bank Deposits" while
a separate "Urgent Ex-Parte Motion to Order Manager of Metrobank to Release
Deposits of Petitioners" was filed on the same date. The motion was granted by the
Court in an order directing the Manager of Metro Bank-Naga City (Rollo, p. 269) to
comply as prayed for.
In view thereof, herein respondents filed in the Court of Appeals a petition for certiorari
and prohibition with preliminary injunction docketed as CA-G.R. No. 13944 against
herein petitioners, seeking to set aside the restraining order and reiterating therein that
petitioner Buhi's complaint in the lower court be dismissed (Rollo, p. 270).
On March 19, 1982, the Court of Appeals issued a Resolution (KAPASIYAHAN) in tagalog,
restraining the Hon. Judge Carlos R. Buenviaje, from enforcing his order of March 9,1982
and suspending further proceedings in Sp. Proc. No. IR-428 pending before him while
giving the Central Bank counsel, Atty. Ricardo Quintos, authority to carry out personally
said orders and directing the "Punong Kawani" of the Court of Appeals to send
telegrams to the Office of the President and the Supreme Court (Rollo, p. 168).
Herein petitioners did not comply with the Court of Appeals' order of March 19, 1982,
but filed instead on March 21, 1982 a motion for reconsideration of said order of the
Court of Appeals, claiming that the lower court's order of March 9, 1982 referred only to
the denial of therein respondents' motion to dismiss and supplemental motion to
dismiss and that the return of Buhi to the petitioners was already an accomplished fact.
The motion was denied by the respondent court in a resolution dated June 1, 1982
(Rollo, p. 301).
In view of petitioners' refusal to obey the Court of Appeals' Order of March 19, 1982,
herein respondents filed with the Court of Appeals a Motion to Cite Petitioners in
Contempt, dated April 22, 1982 (Rollo, p. 174).

The Court of Appeals issued on May 24, 1982 an order requiring herein petitioner Rural
Bank of Buhi, Inc., through its then Acting Manager, Imelda del Rosario and herein
petitioner Judge Carlos Buenviaje, as well as Manuel Genova and Rodolfo Sosa, to show
cause within ten (10) days from notice why they should not be held in contempt of court
and further directing the Ministry of National Defense or its representative to cause the
return of possession and management of the Rural Bank to the respondents Central
Bank and Consolacion Odra (Rollo, p. 180).
On June 9, 1982, petitioners filed their objection to respondents' motion for contempt
dated June 5, 1982 claiming that the properties, subject of the order, had already been
returned to the herein petitioners who are the lawful owners thereof and that the
returning could no longer be undone (Rollo, p. 181).
Later, petitioners filed another motion dated June 17, 1982 for the reconsideration of
the resolution of June 1, 1982 of the Court of Appeals alleging that the same
contravened and departed from the rulings of the Supreme Court that consummated
acts or acts already done could no longer be the subject of mandatory injunction and
that the respondent Court of Appeals had no jurisdiction to issue the order unless it was
in aid of its appellate jurisdiction, claiming that the case (CA-G.R. No. 13944) did not
come to it on appeal (Rollo, p. 302).
As aforestated, on June 17, 1982, respondent Court of Appeals rendered its decision
(HATOL) setting aside the lower court's restraining order dated March 9,1982 and
ordering the dismissal of herein petitioners' amended complaint in Civil Case No. IR-428
(Rollo, p. 186).
On July 9, 1982, petitioners (respondents in CA-G.R. No. 13944) filed a Motion for
Reconsideration of the Decision dated June 17, 1982 insofar as the complaint with the
lower court (Civil Case No. IR-428 was ordered dismissed (Rollo, p. 305).
On August 23, 1982, the respondent Court of Appeals issued its Resolution denying for
lack of merit, herein petitioners' motion for reconsideration of the resolution issued by
the respondent Court of Appeals on June 1, 1982 and set on August 31, 1982 the
hearing of the motion to cite the respondents in CA-G.R. No. SP-13944 (herein
petitioner) for contempt (Rollo, p. 193).
At said hearing, counsel for Rural Bank of Buhi agreed and promised in open court to
restore and return to the Central Bank the possession and control of the Bank within
three (3) days from August 31, 1982.
However on September 3,1982, Rosalia Guevara, Manager thereof, vigorously and
adamantly refused to surrender the premises unless she received a written order from
the Court.
In a subsequent hearing of the contempt incident, the Court of Appeals issued its Order
dated October 13,1982, but Rosalia Guevara still refused to obey, whereupon she was

placed under arrest and the Court of Appeals ordered her to be detained until she
decided to obey the Court's Order (Rollo, pp. 273-274).
Earlier, on September 14, 1982 petitioners had filed this petition even while a motion
for reconsideration of the decision of June 17,1982 was still pending consideration in
the Court of Appeals.
In the resolution of October 20, 1982, the Second Division of this Court without giving
due course to the petition required respondents to COMMENT (Rollo, p. 225).
Counsel for respondents manifested (Rollo, p. 226) that they could not file the required
comment because they were not given a copy of the petition. Meanwhile, they filed an
urgent motion dated October 28, 1982 with the Court of Appeals to place the bank
through its representatives in possession of the Rural Bank of Buhi (Camarines Sur), Inc.
(Rollo, p. 237).
On December 9, 1982, petitioners filed a Supplemental Petition with urgent motion for
the issuance of a restraining order dated December 2, 1982 praying that the restraining
order be issued against respondent court (Rollo, p. 229).
In the resolution of December 15,1982, the Court resolved to require petitioners to
furnish the respondents with a copy of the petition and to require the respondents to
comment on both the original and the supplemental petitions (Rollo, p. 243).
In a resolution of February 21, 1983, the Court NOTED Rosalia V. Guevara's letter dated
February 4, 1983 (Rollo, p. 252) addressed to Hon. Chief Justice Enrique M. Fernando,
requesting that she be allowed to file a petition for the issuance of a writ of habeas
corpus (Rollo, p. 256).
At the hearing of the said petition on February 23, 1983 where the counsel of both
parties appeared, this Court noted the Return of the Writ of Habeas Corpus as well as
the release of petitioner Rosalia V. Guevara from detention by the National Bureau of
Investigation. After hearing aforesaid counsel and petitioner herself, and it appearing
that the latter had resigned since January 18,1983 as Manager of the Rural Bank of Buhi,
Inc. and that the Central Bank might avail of more than adequate legal measures to take
over the management, possession and control of the said bank (and not through
contempt proceedings and detention and confinement of petitioner), with Assistant
Solicitor General Andin manifesting that respondents were not insisting on the
continued detention of petitioner, the Court Resolved to SET the petitioner at liberty
and to consider the contempt incident closed (Rollo, p. 339).
On April 11, 1983, respondents filed their comment on the original and supplemental
petitions.

Meanwhile, the Court of Appeals, acting on respondents' urgent motion filed on

October 28, 1982 ordered on April 13, 1983 the return to the petitioners (herein
respondents) or their duly authorized representatives of the possession, management
and control of subject Rural Bank (Rollo, p. 319), together with its properties.
On April 28, 1983, petitioner filed an urgent motion: (1) to give due course to the
petition and (2) for immediate issuance of a Restraining Order against the respondent
court to prevent it from enforcing its aforesaid resolution dated April 13, 1983 and from
further proceeding in AC-G.R. No. 13944-SP (Rollo, p. 315).
On May 16, 1983, this Court resolved to deny the petition for lack of merit (Rollo, p.
321). On July 25, 1983, petitioners filed their verified Motion for Reconsideration (Rollo,
p. 337) praying that the HATOL dated June 17, 1982 of the Court of Appeals be set aside
as null and void and that Special Proceedings No. IR-428 of CFI-Camarines Sur, Iriga City,
Branch VII, be ordered remanded to the RTC of Camarines Sur, Iriga City, for further
proceedings.
A Motion for Early Resolution was filed by herein petitioners on March 12,1984 (Rollo,
p. 348).
Petitioners raised the following legal issues in their motion for reconsideration:
I. UNDER SEC. 29, R.A. 265, AS AMENDED, MAY THE MONETARY BOARD (MB) OF THE
CENTRAL BANK (CB) PLACE A RURAL BANK UNDER RECEIVERSHIP WITHOUT PRIOR
NOTICE TO SAID RURAL BANK TO ENABLE IT TO BE HEARD ON THE GROUND RELIED
UPON FOR SUCH RECEIVERSHIP?
II. UNDER THE SAME SECTION OF SAID LAW, WHERE THE MONETARY BOARD (MB) OF
THE CENTRAL BANK (CB) HAS PLACED A RURAL BANK UNDER RECEIVERSHIP, IS SUCH
ACTION OF THE MONETARY BOARD (MB) SUBJECT TO JUDICIAL REVIEW? IF SO, WHICH
COURT MAY EXERCISE SUCH POWER AND WHEN MAY IT EXERCISE THE SAME?
III. UNDER THE SAID SECTION OF THE LAW, SUPPOSE A CIVIL CASE IS INSTITUTED
SEEKING ANNULMENT OF THE RECEIVERSHIP ON THE GROUND OF ARBITRARINESS AND
BAD FAITH ON THE PART OF THE MONETARY BOARD (MB), MAY SUCH CASE BE
DISMISSED BY THE IAC (THEN CA) ON THE GROUND OF INSUFFICIENCY OF EVIDENCE
EVEN IF THE TRIAL COURT HAS NOT HAD A CHANCE YET TO RECEIVE EVIDENCE AND THE
PARTIES HAVE NOT YET PRESENTED EVIDENCE EITHER IN THE TRIAL COURT OR IN SAID
APPELLATE COURT? (Rollo, pp. 330-331).
I. Petitioner Rural Bank's position is to the effect that due process was not observed by
the Monetary Board before said bank was placed under receivership. Said Rural Bank
claimed that it was not given the chance to deny and disprove such claim of insolvency
and/or any other ground which the Monetary Board used in justification of its action.

Relative thereto, the provision of Republic Act No. 265 on the proceedings upon
insolvency reads:
SEC. 29. Proceedings upon insolvency. Whenever, upon examination
by the head of the appropriate supervising and examining department
or his examiners or agents into the condition of any banking
institution, it shall be disclosed that the condition of the same is one of
insolvency, or that its continuance in business would involve probable
loss to its depositors or creditors, it shall be the duty of the
department head concerned forthwith, in writing, to inform the
Monetary Board of the facts, and the Board may, upon finding the
statements of the department head to be true, forbid the institution
to do business in the Philippines and shall designate an official of the
Central Bank, or a person of recognized competence in banking, as
receiver to immediately take charge of its assets and liabilities, as
expeditiously as possible collect and gather all the assets and
administer the same for the benefit of its creditors, exercising all the
powers necessary for these purposes including, but not limited to,
bringing suits and foreclosing mortgages in the name of the banking
institution.
The Monetary Board shall thereupon determine within sixty days
whether the institution may be recognized or otherwise placed in such
a condition so that it may be permitted to resume business with safety
to its depositors and creditors and the general public and shall
prescribe the conditions under which such redemption of business
shall take place as the time for fulfillment of such conditions. In such
case, the expenses and fees in the collection and administration of the
assets of the institution shall be determined by the Board and shall be
paid to the Central Bank out of the assets of such banking institution.
If the Monetary Board shall determine and confirm within the said
period that the banking institution is insolvent or cannot resume
business with safety to its depositors, creditors and the general public,
it shall, if the public interest requires, order its liquidation, indicate the
manner of its liquidation and approve a liquidation plan. The Central
Bank shall, by the Solicitor General, file a petition in the Court of First
Instance reciting the proceedings which have been taken and praying
the assistance of the court in the liquidation of the banking institution.
The Court shall have jurisdiction in the same proceedings to adjudicate
disputed claims against the bank and enforce individual liabilities of
the stockholders and do all that is necessary to preserve the assets of
the banking institution and to implement the liquidation plan
approved by the Monetary Board. The Monetary Board shall designate
an official of the Central Bank or a person of recognized competence
in banking, as liquidator who shall take over the functions of the

receiver previously appointed by the Monetary Board under this

Section. The liquidator shall, with all convenient speed, convert the
assets of the banking institution to money or sell, assign or otherwise
dispose of the same to creditors and other parties for the purpose of
paying the debts of such bank and he may, in the name of the banking
institution, institute such actions as may be necessary in the
appropriate court to collect and recover accounts and assets of the
banking institution.
The provisions of any law to the contrary notwithstanding the actions
of the Monetary Board under this Section and the second paragraph
of Section 34 of this Act shall be final and executory, and can be set
aside by the court only if there is convincing proof that the action is
plainly arbitrary and made in bad faith. No restraining order or
injunction shall be issued by the court enjoining the Central Bank from
implementing its actions under this Section and the second paragraph
of Section 34 of this Act, unless there is convincing proof that the
action of the Monetary Board is plainly arbitrary and made in bad faith
and the petitioner or plaintiff files with the clerk or judge of the court
in which the action is pending a bond executed in favor of the Central
Bank, in an amount to be fixed by the court. The restraining order or
injunction shall be refused or, if granted, shall be dissolved upon filing
by the Central Bank of a bond, which shall be in the form of cash or
Central Bank cashier's check, in an amount twice the amount of the
bond of the petitioner, or plaintiff conditioned that it will pay the
damages which the petitioner or plaintiff may suffer by the refusal or
the dissolution of the injunction. The provisions of Rule 58 of the New
Rules of Court insofar as they are applicable and not inconsistent with
the provisions of this Section shall govern the issuance and dissolution
of the restraining order or injunction contemplated in this Section.

the conditions prerequisite to the action of the Monetary Board to forbid the institution
to do business in the Philippines and to appoint a receiver to immediately take charge of
the bank's assets and liabilities. They are: (a) an examination made by the examining
department of the Central Bank; (b) report by said department to the Monetary Board;
and (c) prima facie showing that the bank is in a condition of insolvency or so situated
that its continuance in business would involve probable loss to its depositors or
creditors.
Supportive of this theory is the ruling of this Court, which established the authority of
the Central Bank under the foregoing circumstances, which reads:
As will be noted, whenever it shall appear prima facie that a banking
institution is in "a condition of insolvency" or so situated "that its
continuance in business would involved probable loss to its depositors
or creditors," the Monetary Board has authority:
First, to forbid the institution to do business and appoint a receiver
therefor; and
Second, to determine, within 60 days, whether or not:
1) the institution may be reorganized and
rehabilitated to such an extent as to be permitted to
resume business with safety to depositors, creditors
and the general public; or
2) it is indeed insolvent or cannot resume business
with safety to depositors, creditors and the general
public, and public interest requires that it be
liquidated.

Insolvency, under this Act, shall be understood to mean the inability of

a banking institution to pay its liabilities as they fall due in the usual
and ordinary course of business: Provided, however, that this shall not
include the inability to pay of an otherwise non-insolvent bank caused
by extraordinary demands induced by financial panic commonly
evidenced by a run on the banks in the banking community.

In this latter case (i.e., the bank can no longer resume business with safety to
depositors, creditors and the public, etc.) its liquidation will be ordered and a liquidator
appointed by the Monetary Board. The Central Bank shall thereafter file a petition in the
Regional Trial Court praying for the Court's assistance in the liquidation of the bank." ...
(Salud vs. Central Bank, 143 SCRA 590 [1986]).

The appointment of a conservator under Section 28-A of this Act or

the appointment of receiver under this Section shall be vested
exclusively with the Monetary Board, the provision of any law, general
or special, to the contrary not withstanding.

Petitioner further argues, that there is also that constitutional guarantee that no
property shall be taken without due process of law, so that Section 29, R.A. 265, as
amended, could not have intended to disregard and do away with such constitutional
requirement when it conferred upon the Monetary Board the power to place Rural
Banks under receivership (Rollo, p. 333).

It will be observed from the foregoing provision of law, that there is no requirement
whether express or implied, that a hearing be first conducted before a banking
institution may be placed under receivership. On the contrary, the law is explicit as to

The contention is without merit. It has long been established and recognized in this
jurisdiction that the closure and liquidation of a bank may be considered as an exercise

of police power. Such exercise may, however, be subject to judicial inquiry and could be
set aside if found to be capricious, discriminatory, whimsical, arbitrary, unjust or a
denial of the due process and equal protection clauses of the Constitution (Central Bank
vs. Court of Appeals, 106 SCRA 155 [1981]).
The evident implication of the law, therefore, is that the appointment of a receiver may
be made by the Monetary Board without notice and hearing but its action is subject to
judicial inquiry to insure the protection of the banking institution. Stated otherwise, due
process does not necessarily require a prior hearing; a hearing or an opportunity to be
heard may be subsequent to the closure. One can just imagine the dire consequences of
a prior hearing: bank runs would be the order of the day, resulting in panic and hysteria.
In the process, fortunes may be wiped out, and disillusionment will run the gamut of the
entire banking community.

It has likewise been held that resolutions of the Monetary Board under Section 29 of the
Central Bank Act, such as: forbidding bank institutions to do business on account of a
"condition of insolvency" or because its continuance in business would involve probable
loss to depositors or creditors; or appointing a receiver to take charge of the bank's
assets and liabilities, or determining whether the bank may be rehabilitated or should
be liquidated and appointing a liquidator for that purpose, are under the law "final and
executory" and may be set aside only on one ground, that is "if there is convincing proof
that the action is plainly arbitrary and made in bad faith" (Salud vs. Central Bank, supra).
There is no dispute that under the above-quoted Section 29 of the Central Bank Act, the
Regional Trial Court has jurisdiction to adjudicate the question of whether or not the
action of the Monetary Board directing the dissolution of the subject Rural Bank is
attended by arbitrariness and bad faith. Such position has been sustained by this Court
in Salud vs. Central Bank of the Philippines (supra).

In Mendiola vs. Court of Appeals, (106 SCRA 130), the Supreme Court held:
The pivotal issue raised by petitioner is whether or not the
appointment of a receiver by the Court of First Instance on January 14,
1969 was in order.
Respondent Court correctly stated that the appointment of a receiver
pendente lite is a matter principally addressed to and resting largely
on the sound discretion of the court to which the application is made.
This Tribunal has so held in a number of cases. However, receivership
being admittedly a harsh remedy, it should be granted with extreme
caution. Sound reasons for receivership must appear of record, and
there should be a clear showing of a necessity therefor. Before
granting the remedy, the court is advised to consider the consequence
or effects thereof in order to avoid irreparable injustice or injury to
others who are entitled to as much consideration as those seeking it.
xxx xxx xxx
This is not to say that a hearing is an indispensable requirement for
the appointment of a receiver. As petitioner correctly contends in his
first assignment of error, courts may appoint receivers without prior
presentation of evidence and solely on the basis of the averments of
the pleadings. Rule 59 of the Revised Rules of Court allows the
appointment of a receiver upon an ex parte application.
There is no question that the action of the Monetary Board in this regard may be subject
to judicial review. Thus, it has been held that the courts may interfere with the Central
Bank's exercise of discretion in determining whether or not a distressed bank shall be
supported or liquidated. Discretion has its limits and has never been held to include
arbitrariness, discrimination or bad faith (Ramos vs. Central Bank of the Philippines, 41
SCRA 567 [1971]).

In the same case, the Court ruled further that a banking institution's claim that a
resolution of the Monetary Board under Section 29 of the Central Bank Act should be
set aside as plainly arbitrary and made in bad faith, may be asserted as an affirmative
defense (Sections 1 and 4[b], Rule 6, Rules of Court) or a counterclaim (Section 6, Rule 6;
Section 2, Rule 72 of the Rules of Court) in the proceedings for assistance in liquidation
or as a cause of action in a separate and distinct action where the latter was filed ahead
of the petition for assistance in liquidation (ibid; Central Bank vs. Court of Appeals, 106
SCRA 143 [1981]).
III. It will be noted that in the issuance of the Order of the Court of First Instance of
Camarines Sur, Branch VII, Iriga City, dated March 9, 1982 (Rollo, pp. 72-77), there was
no trial on the merits. Based on the pleadings filed, the Court merely acted on the
Central Bank's Motion to Dismiss and Supplemental Motion to Dismiss, denying both for
lack of sufficient merit. Evidently, the trial court merely acted on an incident and has not
as yet inquired, as mandated by Section 29 of the Central Bank Act, into the merits of
the claim that the Monetary Board's action is plainly arbitrary and made in bad faith. It
has not appreciated certain facts which would render the remedy of liquidation proper
and rehabilitation improper, involving as it does an examination of the probative value
of the evidence presented by the parties properly belonging to the trial court and not
properly cognizable on appeal (Central Bank vs. Court of Appeals, supra, p. 156).
Still further, without a hearing held for both parties to substantiate their allegations in
their respective pleadings, there is lacking that "convincing proof" prerequisite to justify
the temporary restraining order (mandatory injunction) issued by the trial court in its
Order of March 9, 1982.
PREMISES CONSIDERED, the decision of the Court of Appeals is MODIFIED; We hereby
order the remand of this case to the Regional Trial Court for further proceedings, but
We LIFT the temporary restraining order issued by the trial court in its Order dated
March 9, 1982. SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila

without permit and to explain within seventy-two (72) hours from receipt of Director
Boquiren's letter dated 9 July 1986 why no drastic action should be taken against it but
said communication was never answered; and, (c) petitioner did not correct the
deficiencies indicated in the renewal permit for 1985-1986.

EN BANC
G.R. No. 112844 June 2, 1995
PHILIPPINE MERCHANT MARINE SCHOOL, INC., represented by JUAN O. NOLASCO
III, petitioner,
vs.
COURT OF APPEALS, THE OFFICE OF THE EXECUTIVE SECRETARY, EDELMIRO AMANTE,
RENATO CORONA, and the DEPARTMENT OF EDUCATION, CULTURE AND
SPORTS, respondents.

Accordingly, in a 3rd Indorsement dated 23 September 1986 the DECS through then
Minister Lourdes R. Quisumbing approved the following courses of action for petitioner:
(a) the students in the two courses who were graduating for SY 1986-1987 would be
allowed to graduate even without permit for said courses as a special case provided that
they completed the requirements for graduation and subject to prior issuance of Special
Order; and, (b) the remaining students should be allowed to transfer to other
authorized schools.
In a letter dated 30 September 1986 Director Boquiren, informed petitioner of the
aforementioned courses of action and directed immediate implementation thereof.

BELLOSILLO, JR., J.:

PHILIPPINE MERCHANT MARINE SCHOOL, INC. (PMMSI), was established in Manila in
1950 to train and produce competent marine officers. It offers a two-year course in
Marine Engineering (A.M.E.) and a four-year course in Marine Transportation (B.S.M.T.).
In 1978 it established a branch in Talon, Las Pias, Metro Manila. But we are here
concerned only with the main school in Manila.
For several times prior to 1985 respondent Department of Education, Culture and Sports
(DECS) disapproved petitioner's requests for renewal permit/recognition. However, on
11 March 1986 the DECS issued petitioner a renewal permit for SY 1985-1986. Later,
petitioner applied for a summer permit for 1986 which the DECS favorably indorsed to
the Minister of Education in consideration of the graduating students for summer.
Thereafter the application was returned to Director Modesta Boquiren of the DECS for
evaluation and decision pursuant to the authority delegated to the Regions under
Department Order No. 22, series of 1975. Director Boquiren issued petitioner the
summer permit for 1986 based on the previously stated humanitarian reason but
subject to the condition that petitioner should not enroll students for the first semester
of SY 1986-1987 until a permit therefor was granted and that the enrollment list for the
summer term be submitted immediately.
Sometime in 1986 the DECS received a complaint from Felixberto B. Galvez, president of
petitioner's Faculty Association, NAFLU-KMU, concerning the issuance of summer
permit to petitioner and of its holding of classes for courses not recognized by the
Government. Galvez requested that the matter be looked into as well as the possible
revocation of petitioner's authority due to persistent violation of the orders of the DECS.
In response, the DECS through Director Boquiren recommended that petitioner's
summer permit be revoked and that the school be closed effective SY 1986-1987 on the
ground that: (a) petitioner did not have a renewal permit/recognition for SY 1986-1987;
(b) several communications were sent to petitioner's head telling him not to operate

On 9 April 1987 the DECS Inter-Agency Technical Committee (IATCOM) recommended

renewal of permits for the maritime courses offered by petitioner provided that a
development plan for the improvement of its buildings classrooms, laboratory rooms,
library offices and other rooms be formulated and implemented before the start of
school year 1987-1988.
Despite lack of permit, petitioner continued to enroll students and offer courses in
Marine Engineering and Marine Transportation for SY 1987-1988. This prompted the
DECS through Director Hernando Dizon to write petitioner on 4 August 1988 directing it
not to operate without permit and inviting its attention to the provisions of the Private
1
2
School Law as reiterated in the Education Act of 1982 which prohibits operation of
unauthorized schools/courses.
On 28 October 1988 petitioner sent a letter to Director Dizon applying for
permit/recognition to conduct classes for the two (2) maritime courses retroactive from
summer of 1987 up to SY 1988-1989 and informing him of its transfer to the 5th Floor of
the Republic Supermarket Building, corner Rizal Avenue and Soler St., Sta. Cruz, Manila.
On the basis of the favorable report of a supervisor of the Bureau of Higher Education
who visited the premises of petitioner on 14 November 1988, a director of said Bureau
recommended renewal of petitioner's permit. However, in a DECS-PAMI survey
conducted by the DECS technical staff in 1988, petitioner scored only 32 points out of a
possible 1,026 points for requirements in Nautical Engineering, and only 207 points out
of 905 points in Marine Engineering, way below the DECS requirements.
Subsequent inspection of petitioner's premises by the Bureau of Higher Education-DECS
Technical Panel for Maritime Education (TPME) affirmed the findings of the DECS-PAMI
survey. It found petitioner deficient in terms of the minimum requirements as provided
in DECS Order No. III, series of 1987, which refers to the policies and standards for

Maritime Education Plan. In a memorandum dated 19 January 1989 addressed to DECS

Director Nilo Rosas, it set forth the following recommendations:

1. PMMS, Manila, has inadequate training facilities and equipment for

BSMT Nautical Studies and AME programs.

1. The PMMS administration may be given a last chance to put up at

least 60% of the minimum standard equipment for a period of about
two months (January-March 1989).

2. The school has not acquired its own school site and building. The
present school campus is not conducive for training and is found to be
very limited in space so that there is difficulty for school development
and expansion.

2. The DECS with TPME will conduct a re-inspection sometime the first
week of April to monitor the progress of the requirements.
3. No new and old students will be allowed to enroll during summer of
1989 and the subsequent semesters pending issuance of a permit.
4. Therefore, issuance of a school permit for 1987-1988 to 1988-89
shall be held in abeyance pending compliance of at least 60% of the
requirements.
5. DECS higher authorities shall decide whether the graduating
students for the second semester 1988-89 will be allowed to graduate
and a retroactive school permit for the school years 1987-88, 1988-89
3
can be granted.
As recommended, the TPME Secretariat conducted a reinspection of petitioner's
premises, then submitted a report dated 18 April 1989 with the following new
recommendations
1. Gradual phasing out of the BSMT Nautical Studies and Associate in
Marine Engineering programs. Under this scheme, no new enrollees
should be accepted anymore for the 1st year BSMT Nautical Studies
and AME starting 1st semester of school year 1989-90.
2. If the school can come up with the DECS minimum standard within
the phasing out period, suspension order may be lifted.
3. If the school fails to meet the DECS minimum standard at the end of
the phasing out period, closure order will be issued.
4. No special permit for the BSMT Nautical Studies and AME courses
should be granted as a special case. However, during the phasing out
period students may be allowed to graduate under PMMS, Talon, Las
Pias,
based on these considerations

3. On 23 September 1986, the Secretary of Education, Culture and

Sports already issued a cease to operate order to the school head of
PMMS. The said indorsement letter also provided humanitarian
decision (reason?) which granted permit to PMMS as a special case,
just to allow BSMT and AME students to graduate and the remaining
students were advised to transfer to authorized/recognized schools.
4. Labor dispute occurred in 1987. The conflict between the
employees and employer is a manifestation of mismanagement of
4
school.
In a letter dated 27 April 1989 Director Rosas informed petitioner of the TPME report
and recommendations and invited it for a conference on 2 May 1989 before any major
decision and action would be made.
On 2 May 1989, the TPME Secretariat submitted another memorandum on its
reinspection of petitioner's premises made on 28 April 1989. Based on its findings that
no substantial improvement in terms of minimum requirements, equipment and
training facilities since the January 1989 inspection was made, it reiterated the
recommendations it submitted to the DECS Bureau of Higher Education. For this reason,
in the letter dated 25 May 1989 Director Rosas notified petitioner about the
aforementioned report and the DECS' decision that:
1. The BSMT Nautical Studies and Associate in Marine Engineering
courses be gradually phased out. Such being the case, the school shall
no longer be allowed to accept 1st year students and new enrollees
starting 1st semester of school year 1989-90.
2. The second year and third year students may be allowed to remain
until they graduate. However, the school may opt to transfer these
students to PMMS, Talon, Las Pias,
due to the following considerations:
1. The school's training equipment and instructional facilities are very
far below the standards set by DECS.

2. The school site and building are not owned by the school but only
leased with contract of renewal to be made annually.
3. The present location of the school does not warrant for expansion,
development and improvement.
4. The present location of the school is not conducive for learning, it
being located on the 5th floor of a supermarket in the downtown
section of the city.
5. A cease to operate order was issued by Secretary Lourdes R.
Quisumbing sometime in 1986, which order was violated by the
5
school.
In a letter dated 11 July 1989 the DECS through Secretary Quisumbing informed
petitioner that it had received reports that petitioner enrolled freshmen for its maritime
programs which were ordered phased out effective SY 1989-1990 per letter of Director
Rosas dated 25 May 1989; called petitioner's attention to the provision of Sec. 1, Rule 1,
Part V, of the Implementing Rules of the Education Act of 1982 which makes it
punishable and subject to penalties the operation of a school through the conduct or
offering of Educational Programs or Courses of Studies/Training, without prior
government authorization and/or in violation of any of the terms and conditions of said
permit or recognition; directed that in accordance with the phase-out order, petitioner's
Manila campus is allowed to operate only the 2nd, 3rd and 4th years of the authorized
maritime programs which shall be gradually phased out; and, required petitioner to
comment on the reported unauthorized enrollment.
In its letter to the DECS dated 26 July 1989, petitioner moved for reconsideration stating
that the finding that it had not complied with the minimum requirements was due to
the following: that as early as 21 June 1989 it filed a letter requesting reconsideration of
the letter dated 25 May 1989 of Director Rosas; that since there was no reply it believed
that the 25 May 1989 order was reconsidered sub-silencio and that petitioner was
allowed to enroll 1st year students for SY 1989-1990; and, that it had undertaken
improvements in all of its facilities in compliance with DECS requirements. In this regard,
it requested another inspection of its premises.
Pursuant to petitioner's request, another inspection of the Manila premises was
conducted by the TPME-Secretariat on 8 August 1989. However, petitioner only
obtained a general rating of 31.17% for Nautical Studies and 28.53% for Marine
Engineering. Consequently, the inspection team reiterated its previous recommendation
to gradually phase out the maritime programs of petitioner's Manila campus effective
SY 1990-1991 and that no new freshman students be accepted beginning SY 1990-1991.
Accordingly, in a letter dated 25 September 1989 the DECS through Secretary
Quisumbing ordered petitioner to discontinue its Maritime program in the Manila
campus effective school year 1990-1991 and suggested that efforts be made towards

the development of PMMS, Las Pias, which has a great potential of being a good
6
Maritime School. The phase-out order was reiterated in subsequent letters dated 19
February 1990 and 9 May 1990 of Director Rosas and then DECS Secretary Isidro D.
Cario, respectively.
Subsequently, petitioner moved to reconsider the phase-out order in its letter of 21
May 1990, which request was denied by the DECS through Undersecretary Benjamin
Tayabas in his letter of 1 June 1990. The letter reads
With reference to your request to rescind an order to phase-out the
maritime courses at PMMS, Manila, please be informed that this
Department sees no reason for such action as the conditions obtaining
in the school when the phase-out order was issued haven't shown any
significant improvement inspite of the fact that the PMMS had been
given reasonable period to comply with the minimum standard
requirements prescribed by the Department of Education, Culture and
Sports.
Maritime Education courses are highly specialized and require
adequate training facilities and equipment in order to ensure quality.
However, the series of visits made by the staff of the BHE, NCR, and
members of the Technical Panel on Maritime Education revealed the
following findings:
(a) On April 9, 1987 the Inter-Agency Technical
Committee (IATCOM) recommended the renewal of
permits of the maritime courses, provided, that a
development plan for the improvement of the
buildings, classrooms, laboratory rooms, library
offices and other rooms shall be formulated and
implemented before the start of SY 1987-1988.
(b) In 1988, the DECS-PAMI survey conducted by
technical persons, revealed that PMMS, then located
at the 5th floor of the Republic Supermarket,
obtained a general score of 32 out of 1,026 points
for requirements in the Nautical course and 207 out
of 905 points for the Marina Engineering course. It is
needless to say that these findings are way below
the DECS requirements. Above all, the school site
was described as not conducive for offering
maritime program due to its limited area.
Furthermore, the lease on the premises is not a long
term lease (2 years), a condition which would deter
the school from fully developing the school site.

(c) In January of 1989, the findings of the Secretariat

for the Technical Panel for Maritime Education
(TPME) re-affirmed the findings of the DECS-PAMI
Survey. Very few equipment were found for the
Maritime courses. You concurred with these findings
in a dialogue with the Director of the Bureau of
Higher Education Secretariat. You appealed for
another chance and requested for re-inspection
before the opening of SY 1989-1990.
(d) As per agreement, on April 28, 1989 another reinspection was made and it showed that the school
did not show any substantial improvement.
Then on May 25, 1989, Secretary Lourdes
Quisumbing issued the phase-out order of our
maritime programs in Manila campus.
However, the Department again allowed PMMS,
Manila, to operate the maritime courses for SY 19891990 despite the above phase-out order.
(e) Another evaluation of your school was conducted
by technical people on August 8, 1989, as requested.
The findings revealed that your school obtained a
general rating of 31.17% for Nautical Studies and
28.53% for Marine Engineering.
The PMMS has been provided with the Policies and Standards for
Maritime Education and, as revealed by the foregoing facts, the series
of inspection and evaluation were (sic) done by technical persons who
have expertise in the field of maritime education. Therefore, the
requests relative to these are not valid.
It is therefore with regrets that this Department cannot rescind its
order to phase-out the Maritime courses at PMMS, Manila and the
school is admonished not to accept incoming first year students
starting school year 1990-1991. So that by school year 1992-1993, the
maritime courses at the Manila campus would be fully phased-out. . .
7
.
It is suggested that PMMS concentrate its development plans in the
Las Pias Campus which has a great potential of being a good
maritime school.

Not satisfied therewith, petitioner appealed the matter to respondent Office of the
President.
During the pendency of the appeal the DECS thru Secretary Cario issued a Closure
Order dated 27 August 1991
In view of the report which was confirmed by the evaluation team
from the National Capital Region DECS Regional Office, that Philippine
Merchant Marine School (PMMS), Manila, has been accepting
freshman students of the maritime programs despite the phase-out
order which was issued last September 28, (sic) 1989 by former
Secretary Lourdes R. Quisumbing and further reiterated by the
undersigned, dated May 9, 1990, the Department, hereby orders
Closure of your maritime programs of your school effective second
semester school year 1991-1992, otherwise this Department shall be
constrained to institute the appropriate administrative, civil and
criminal proceedings against you and the other responsible officers of
your school pursuant to Section 68, Batas Pambansa Blg. 232. . . .
The transfer of the affected students shall be facilitated by the
National Capital Region in accordance with our Memorandum dated
August 16, 1991, xerox copy of which is hereto attached for your
information.
For your guidance and strict compliance.

In a Letter dated 24 August 1992 petitioner sought reconsideration of the 27 August

1991 Closure Order and at the same time requested that special orders be issued to its
graduates for SY 1991-1992. In letters filed with the Office of the President dated 2 and
3 October 1992 petitioner alleged compliance with DECS requirements. The letters were
referred to the DECS for consideration.
On 10 November 1992 the Office of the President through respondent Executive
9
Secretary Edelmiro Amante rendered a Resolution dismissing petitioner's appeal. It
found no plausible reason to disturb the action of the DECS Secretary in the light of the
conspicuous fact that petitioner had repeatedly failed to comply with the phase-out
order since 1986. Moreover, the grounds advanced by petitioner have already been
passed upon by the DECS.
Petitioner moved for reconsideration praying that the case be remanded to the DECS for
another ocular inspection and evaluation of its alleged improved facilities. Petitioner
anchored its motion on the proposition that since it had made substantial
improvements on school equipment and facilities there existed no valid ground to deny
them a permit to offer maritime courses. After another circumspect review of the case,
the Office of the President found no cogent reason to set aside its previous resolution. It
opined that

Mere alleged efforts to improve the facilities and equipments (sic)

which were long due since 1986, do not warrant the reversal of our
previous resolution. It bears stressing as the records may show, that
the phase-out order of DECS was based not only on PMMSI's failure to
provide adequate equipment and facilities but also on PMMSI's failure
to comply with the standard requirements prescribed for a school site.
xxx xxx xxx
Apart from these, PMMSI's adamant refusal to comply with the orders
of the DECS to phase out its unauthorized courses is sufficient ground
to uphold the order appealed from. Since 1986, PMMSI has been
applying for a permit to offer maritime courses but has been invariably
denied for failure to comply with the minimum requirements
prescribed by DECS. Notwithstanding these denials, PMMSI continues
to offer maritime courses and to admit freshmen students in clear
violation of Section 1, Rule 1, of the Education Act of 1982 . . . .
xxx xxx xxx
PMMSI's refusal to comply with the phase-out order on the ground
that the same is not yet final and executory is untenable. While said
phase-out may not be final and executory, there was no reason for
PMMSI to offer maritime courses without the requisite prior authority
of the DECS. PMMSI possessed no valid permit prior to the issuance of
10
the phase-out. There was no authority to speak of.
Thus the motion was denied in the Resolution dated 12 January 1993 through
11
respondent Assistant Executive Secretary Renato Corona.
Petitioner assailed both resolutions of the Office of the President before respondent
Court of Appeals by way ofcertiorari. It alleged that the resolutions failed to meet the
constitutional requirement of due process because the basis for affirming the DECS
phase-out and closure orders was not sufficiently disclosed. Furthermore, its letters
dated 2 and 3 October 1992 which presented incontrovertible proof that it had
introduced substantial improvements on its facilities for the past two and a half years
while its appeal was pending were not taken into account, thereby gravely abusing its
discretion.
Respondent Court of Appeals brushed aside the allegations of petitioner since
[T]he Office of the President, in the resolution dated November 10,
1992, appears to have restated the report of the respondent DECS,
meaning, that it adopted as its own the DECS' report, but that is not a
violation of the Constitution and the Rules of Court, in line with Alba
Patio De Makati vs. Alba Patio De Makati Employees Association, 128

SCRA 253, 264- 265 . . . Petitioner's latest attempt at improving its

facilities does not warrant a reversal of the phase-out order. For, in
spite of the claim that it spent on improvements, the basic problem
remained as it still occupies the fifth floor of the William Liao building,
which is not conducive to learning and has a limited area for
12
expansion and development.
On 22 July 1993 the petition was dismissed.
14
reconsideration was denied.

13

On 26 November 1993 the motion for

Petitioner imputes error on respondent court: (1) in not setting aside the questioned
resolutions and orders of public respondents which were rendered without due process
of law since (a) petitioner was not afforded the right to fully present its case and submit
evidence in support thereof; (b) public respondents did not consider the evidence
presented by petitioner; (c) public respondents' decisions have no substantial evidence
to support them; (d) public respondents' decisions did not disclose the bases therefor;
and, (2) in implementing the closure orders which had not become final and executory.
Petitioner asseverates that the DECS denied its right to a hearing on the supposed
deficiencies which allegedly justified denial of its request for issuance of a renewal
permit. Likewise, the DECS denied petitioner the opportunity to correct such
deficiencies. The Office of the President totally ignored supervening events properly
brought to its attention in the letters of petitioner dated 2 and 3 October 1992. It issued
resolutions strictly on the basis of the DECS' representations which do not amount to
substantial evidence. The 10 November 1992 Resolution failed to sufficiently disclose
the basis for affirmation of the DECS' phase-out and closure orders. The 12 January 1993
Resolution still refused to take into consideration petitioner's compliance with the DECS'
requirements. Petitioner did not violate the Education Act of 1992 because it was
authorized to operate by virtue of the provisional authorities issued by the DECS. The
DECS orders were not final and executory because petitioner challenged them and
appropriately availed itself of the remedies available to it under the law.
Before proceeding to resolve the merits of this case, we shall state briefly the concept
regarding establishment of schools. The educational operation of schools is subject to
prior authorization of the government and is effected by recognition. In the case of
government-operated schools, whether local, regional or national, recognition of
educational programs and/or operations is deemed granted simultaneously with
establishment. In all other cases the rules and regulations governing recognition are
prescribed and enforced by the DECS, defining therein who are qualified to apply,
providing for a permit system, stating the conditions for the grant of recognition and for
15
its cancellation and withdrawal, and providing for related matters. The requirement
on prior government authorization is pursuant to the State policy that educational
programs and/or operations shall be of good quality and therefore shall at least satisfy
minimum standards with respect to curricula, teaching staff, physical plant and facilities
16
and of administrative or management viability.

Set against the records of the case, the assertion of petitioner that it was deprived of its
right to a hearing and any opportunity whatsoever to correct the alleged deficiencies
readily collapses. The earlier narration of facts clearly demonstrates that before the
DECS issued the phase-out and closure orders, petitioner was duly notified, warned and
given several opportunities to correct its deficiencies and to comply with pertinent
orders and regulations.

ten thousand pesos (P10,000.00) or imprisonment for a maximum

period of two (2) years, or both, in the discretion of the court.

Petitioner has gone all the way up to the Office of the President to seek a reversal of the
phase-out and closure orders. There is thus no reason to complain of lack of opportunity
17
to explain its side as well as to comply with the alleged deficiencies. We agree with
the observation of the Office of the Solicitor General that

Sec. 69. Administrative Sanction. The Minister (Secretary) of

Education, Culture and Sports may prescribe and impose such
administrative sanction as he may deem reasonable and appropriate
in the implementing rules and regulations promulgated pursuant to
this Act for any of the following causes . . . . 5. Unauthorized operation
of a school, or course, or any component thereof . . . .

As long as the parties were given opportunity to be heard before

judgment was rendered, the demands of due process were sufficiently
met (Lindo v. COMELEC, 194 SCRA 25). It should also be noted that
petitioner herein repeatedly sought reconsideration of the various
orders of respondent DECS and its motions were duly considered by
respondent DECS to the extent of allowing and granting its request for
re-inspection of its premises. In connection therewith, it has been
ruled that the opportunity to be heard is the essence of procedural
due process and that any defect is cured by the filing of a motion for
reconsideration (Medenilla v. Civil Service Commission, 194 SCRA
18
278).
Furthermore, the Office of the President properly ignored (in the sense that it did not
find worthy of consideration) the alleged supervening events, i.e., substantial
improvements on school equipment and facilities during the pendency of the case
before said Office because the improvements should have been undertaken starting
1986. Moreover, the phase-out and closure orders were based not only on petitioner's
deficiencies as a maritime institute but also on its continued operation without the
requisite authorization from the DECS and acceptance of freshman students in blatant
violation of the latter's orders and/or persistent warnings not to do so. Verily, there are
sufficient grounds to uphold the phase-out and closure orders of the DECS which were
issued conformably with Sec. 28 of the Education Act of 1982 which provides:
Sec. 28. . . . . Punishable Violation. . . . Operation of schools and
educational programs without authorization, and/or operation thereof
in violation of the terms of recognition, are hereby declared
punishable violations subject to the penalties provided in this Act.
Secs. 68 and 69 of the same Act provide the penalties:
Sec. 68. Penalty Clause. Any person upon conviction for an act in
violation of Section 28, Chapter 3, Title III, shall be punished with a
fine of not less than two thousand pesos (P2,000.00) nor more than

If the act is committed by a school corporation, the school head

together with the person or persons responsible for the offense or
violation shall be equally liable.

The corresponding rules implementing Secs. 68 and 69 read

Sec. 1. Punishable Acts and Penalties. The operation of a school,
through the conduct or offering of educational programs or courses of
studies/training without prior government authorization in the form of
permit or recognition as provided for in Rule III, PART III of these
Rules, and/or in violation of any of the terms and conditions of the
said permit or recognition, have been declared punishable violations
of the Act, subject to the penalties provided therein.
Any person, therefore, upon conviction for an act constituting any of
the foregoing punishable violations, shall be punished with a fine of
not less than Two Thousand Pesos (P2,000.00) nor more than Ten
Thousand Pesos (P10,000.00), or imprisonment for a maximum period
of two (2) years, or both, in the discretion of the Court: Provided,
however, that when the act is committed by a school corporation, the
school head together with the person or persons responsible for the
violation or offense shall be deemed equally liable.
Sec. 2. Administrative Sanction. Without prejudice to the interest of
students, teachers and employees, and independently of the penalty
imposed in Sec. 1 under this Rule, the Minister may withdraw,
suspend, revoke or cancel a school's authority to operate as an
educational institution or to conduct educational programs or courses
of studies/training, for any of the following causes, viz: . . . . e.
Unauthorized operation of a school, or program or course of studies or
component thereof, or any violation of the prescribed rules governing
advertisements or announcements of educational institutions.
Substantial evidence has been defined to be such relevant evidence as a reasonable
19
mind might accept as adequate to support a conclusion. A perusal of the questioned
resolutions of the Office of the President reveals that they are based on the records of

the case which constitute substantial evidence, proving distinctly not only petitioner's
consistent failure to meet the DECS' minimum standards for maritime institutes and
correct its deficiencies but also its continued operation and offering of maritime courses
despite the lack of permit.

decision rendered by him should not and will not be subject to review
and reversal by any court.
Of course, if it should be made to appear to the Court that those
powers were in a case exercised so whimsically, capriciously,
oppressively, despotically or arbitrarily as to call for peremptory
correction or stated otherwise, that the Secretary had acted with
grave abuse of discretion, or had unlawfully neglected the
performance of an act which the law specifically enjoins as a duty, or
excluded another from the use or enjoyment of a right or office to
which such other is entitled it becomes the Court's duty to rectify
such action through the extraordinary remedies of certiorari,
prohibition, or mandamus, whichever may properly apply. Yet even in
these extreme instances, where a Court finds that there has been
abuse of powers by the Secretary and consequently nullifies and/or
forbids such an abuse of power, or commands whatever is needful to
keep its exercise within bounds, the Court, absent any compelling
reason to do otherwise, should still leave to the Secretary the ultimate
determination of the issue of the satisfaction of fulfillment by an
educational institution of the standards set down for its legitimate
operation, as to which it should not ordinarily substitute its own
22
judgment for that of said office.

Contrary to the claim of petitioner, the 10 November 1992 Resolution of the Office of
the President sufficiently disclosed the basis for its affirmance of the DECS' phase-out
and closure orders:
After a careful study, we are constrained to resolve that there exists
no sufficient justification to modify, alter or reverse the appealed
order. We find no plausible reason to disturb the action of the
Secretary of Education, Culture and Sports, more so in light of the
conspicuous fact that PMMS has repeatedly failed to comply with the
phase out order since 1986. What is more, the grounds advanced by
PMMS have already been passed upon, and separately resolved by the
20
office a quo.
Petitioner's persistent refusal to comply with the phase-out orders on the ground that
the same were not yet final and executory is untenable. As correctly held by the Office
of the President
. . . . While said phase-out (orders) may not be final and executory,
there was no reason for PMMSI to offer maritime courses without, the
requisite prior authority of the DECS. PMMSI possessed no valid
permit prior to the issuance of the phase-out. There was no authority
21
to speak of.
By reason of the special knowledge and expertise of administrative departments over
matters falling under their jurisdiction, they are in a better position to pass judgment
thereon and their findings of fact in that regard are generally accorded respect, if not
finality, by the courts. In the case at bench, it is not the function of this Court nor any
other court for that matter
. . . to review the decisions and orders of the Secretary on the issue of
whether or not an educational institution meets the norms and
standards required for permission to operate and to continue
operating as such. On this question, no Court has the power or
prerogative to substitute its opinion for that of the Secretary. Indeed,
it is obviously not expected that any Court would have the
competence to do so.
The only authority reposed in the Courts on the matter is the
determination of whether or not the Secretary of Education, Culture
and Sports has acted within the scope of powers granted him by law
and the Constitution. As long as it appears that he has done so, any

There being no grave abuse of discretion committed by respondents representing the

Office of the President in issuing the Resolutions of 10 November 1992 and 12 January
1993, respondent Court of Appeals did not err in sustaining the resolutions in question.
WHEREFORE , the petition is DENIED. The questioned Decision of the Court of Appeals
dated 22 July 1993, as well as its Resolution of 26 November 1993, is AFFIRMED.
Costs against petitioner.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Regalado, Davide, Jr., Romero, Melo, Puno, Vitug,
Kapunan, Mendoza and Francisco, JJ., concur.
Quiason, J., is on leave.

differential amounting to TWO THOUSAND ONE HUNDRED FIFTY (P2,150.00)

Pesos, or the aggregate amount of ONE HUNDRED TWENTY ONE THOUSAND
SIX HUNDRED SEVENTY EIGHT & 93/100 (P121,678.93) Pesos for Jenny Agabon,
and ONE HUNDRED TWENTY THREE THOUSAND EIGHT HUNDRED TWENTY
EIGHT & 93/100 (P123,828.93) Pesos for Virgilio Agabon, as per attached
computation of Julieta C. Nicolas, OIC, Research and Computation Unit, NCR.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 158693

November 17, 2004

SO ORDERED.

JENNY M. AGABON and VIRGILIO C. AGABON, petitioners,

vs.
NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS,
INC. and VICENTE ANGELES, respondents.

On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners
had abandoned their work, and were not entitled to backwages and separation pay. The
other money claims awarded by the Labor Arbiter were also denied for lack of
5
evidence.

DECISION
Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari
with the Court of Appeals.

YNARES-SANTIAGO, J.:
This petition for review seeks to reverse the decision of the Court of Appeals dated
January 23, 2003, in CA-G.R. SP No. 63017, modifying the decision of National Labor
Relations Commission (NLRC) in NLRC-NCR Case No. 023442-00.

The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal
because they had abandoned their employment but ordered the payment of money
claims. The dispositive portion of the decision reads:

Private respondent Riviera Home Improvements, Inc. is engaged in the business of

selling and installing ornamental and construction materials. It employed petitioners
Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2,
2
1992 until February 23, 1999 when they were dismissed for abandonment of work.

WHEREFORE, the decision of the National Labor Relations Commission is

REVERSED only insofar as it dismissed petitioner's money claims. Private
respondents are ordered to pay petitioners holiday pay for four (4) regular
holidays in 1996, 1997, and 1998, as well as their service incentive leave pay for
said years, and to pay the balance of petitioner Virgilio Agabon's 13th month
pay for 1998 in the amount of P2,150.00.

Petitioners then filed a complaint for illegal dismissal and payment of money claims and
on December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals
illegal and ordered private respondent to pay the monetary claims. The dispositive
portion of the decision states:
WHEREFORE, premises considered, We find the termination of the
complainants illegal. Accordingly, respondent is hereby ordered to pay them
their backwages up to November 29, 1999 in the sum of:
1. Jenny M. Agabon - P56, 231.93
2. Virgilio C. Agabon - 56, 231.93
and, in lieu of reinstatement to pay them their separation pay of one (1) month
for every year of service from date of hiring up to November 29, 1999.
Respondent is further ordered to pay the complainants their holiday pay and
service incentive leave pay for the years 1996, 1997 and 1998 as well as their
premium pay for holidays and rest days and Virgilio Agabon's 13th month pay

SO ORDERED.

Hence, this petition for review on the sole issue of whether petitioners were illegally
7
dismissed.
Petitioners assert that they were dismissed because the private respondent refused to
give them assignments unless they agreed to work on a "pakyaw" basis when they
reported for duty on February 23, 1999. They did not agree on this arrangement
because it would mean losing benefits as Social Security System (SSS) members.
Petitioners also claim that private respondent did not comply with the twin
8
requirements of notice and hearing.
Private respondent, on the other hand, maintained that petitioners were not dismissed
9
but had abandoned their work. In fact, private respondent sent two letters to the last
known addresses of the petitioners advising them to report for work. Private
respondent's manager even talked to petitioner Virgilio Agabon by telephone sometime
in June 1999 to tell him about the new assignment at Pacific Plaza Towers involving

40,000 square meters of cornice installation work. However, petitioners did not report
for work because they had subcontracted to perform installation work for another
company. Petitioners also demanded for an increase in their wage to P280.00 per day.
When this was not granted, petitioners stopped reporting for work and filed the illegal
10
dismissal case.
It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are
accorded not only respect but even finality if the findings are supported by substantial
evidence. This is especially so when such findings were affirmed by the Court of
11
Appeals. However, if the factual findings of the NLRC and the Labor Arbiter are
conflicting, as in this case, the reviewing court may delve into the records and examine
12
for itself the questioned findings.
Accordingly, the Court of Appeals, after a careful review of the facts, ruled that
petitioners' dismissal was for a just cause. They had abandoned their employment and
were already working for another employer.
To dismiss an employee, the law requires not only the existence of a just and valid cause
but also enjoins the employer to give the employee the opportunity to be heard and to
13
defend himself. Article 282 of the Labor Code enumerates the just causes for
termination by the employer: (a) serious misconduct or willful disobedience by the
employee of the lawful orders of his employer or the latter's representative in
connection with the employee's work; (b) gross and habitual neglect by the employee of
his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his
employer or his duly authorized representative; (d) commission of a crime or offense by
the employee against the person of his employer or any immediate member of his
family or his duly authorized representative; and (e) other causes analogous to the
foregoing.
Abandonment is the deliberate and unjustified refusal of an employee to resume his
14
employment. It is a form of neglect of duty, hence, a just cause for termination of
15
employment by the employer. For a valid finding of abandonment, these two factors
should be present: (1) the failure to report for work or absence without valid or
justifiable reason; and (2) a clear intention to sever employer-employee relationship,
with the second as the more determinative factor which is manifested by overt acts
from which it may be deduced that the employees has no more intention to work. The
intent to discontinue the employment must be shown by clear proof that it was
16
deliberate and unjustified.
In February 1999, petitioners were frequently absent having subcontracted for an
installation work for another company. Subcontracting for another company clearly
showed the intention to sever the employer-employee relationship with private
respondent. This was not the first time they did this. In January 1996, they did not
report for work because they were working for another company. Private respondent at
that time warned petitioners that they would be dismissed if this happened again.
Petitioners disregarded the warning and exhibited a clear intention to sever their

employer-employee relationship. The record of an employee is a relevant consideration

17
in determining the penalty that should be meted out to him.
18

In Sandoval Shipyard v. Clave, we held that an employee who deliberately absented

from work without leave or permission from his employer, for the purpose of looking for
a job elsewhere, is considered to have abandoned his job. We should apply that rule
with more reason here where petitioners were absent because they were already
working in another company.
The law imposes many obligations on the employer such as providing just compensation
to workers, observance of the procedural requirements of notice and hearing in the
termination of employment. On the other hand, the law also recognizes the right of the
employer to expect from its workers not only good performance, adequate work and
19
diligence, but also good conduct and loyalty. The employer may not be compelled to
continue to employ such persons whose continuance in the service will patently be
20
inimical to his interests.
After establishing that the terminations were for a just and valid cause, we now
determine if the procedures for dismissal were observed.
The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of
the Omnibus Rules Implementing the Labor Code:
Standards of due process: requirements of notice. In all cases of termination
of employment, the following standards of due process shall be substantially
observed:
I. For termination of employment based on just causes as defined in Article 282
of the Code:
(a) A written notice served on the employee specifying the ground or grounds
for termination, and giving to said employee reasonable opportunity within
which to explain his side;
(b) A hearing or conference during which the employee concerned, with the
assistance of counsel if the employee so desires, is given opportunity to
respond to the charge, present his evidence or rebut the evidence presented
against him; and
(c) A written notice of termination served on the employee indicating that
upon due consideration of all the circumstances, grounds have been
established to justify his termination.
In case of termination, the foregoing notices shall be served on the employee's
last known address.

Dismissals based on just causes contemplate acts or omissions attributable to the

employee while dismissals based on authorized causes involve grounds under the Labor
Code which allow the employer to terminate employees. A termination for an
authorized cause requires payment of separation pay. When the termination of
employment is declared illegal, reinstatement and full backwages are mandated under
Article 279. If reinstatement is no longer possible where the dismissal was unjust,
separation pay may be granted.
Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer
must give the employee two written notices and a hearing or opportunity to be heard if
requested by the employee before terminating the employment: a notice specifying the
grounds for which dismissal is sought a hearing or an opportunity to be heard and after
hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the
dismissal is based on authorized causes under Articles 283 and 284, the employer must
give the employee and the Department of Labor and Employment written notices 30
days prior to the effectivity of his separation.
From the foregoing rules four possible situations may be derived: (1) the dismissal is for
a just cause under Article 282 of the Labor Code, for an authorized cause under Article
283, or for health reasons under Article 284, and due process was observed; (2) the
dismissal is without just or authorized cause but due process was observed; (3) the
dismissal is without just or authorized cause and there was no due process; and (4) the
dismissal is for just or authorized cause but due process was not observed.
In the first situation, the dismissal is undoubtedly valid and the employer will not suffer
any liability.
In the second and third situations where the dismissals are illegal, Article 279 mandates
that the employee is entitled to reinstatement without loss of seniority rights and other
privileges and full backwages, inclusive of allowances, and other benefits or their
monetary equivalent computed from the time the compensation was not paid up to the
time of actual reinstatement.
In the fourth situation, the dismissal should be upheld. While the procedural infirmity
cannot be cured, it should not invalidate the dismissal. However, the employer should
be held liable for non-compliance with the procedural requirements of due process.
The present case squarely falls under the fourth situation. The dismissal should be
upheld because it was established that the petitioners abandoned their jobs to work for
another company. Private respondent, however, did not follow the notice requirements
and instead argued that sending notices to the last known addresses would have been
useless because they did not reside there anymore. Unfortunately for the private
respondent, this is not a valid excuse because the law mandates the twin notice
21
requirements to the employee's last known address. Thus, it should be held liable for
non-compliance with the procedural requirements of due process.

A review and re-examination of the relevant legal principles is appropriate and timely to
clarify the various rulings on employment termination in the light of Serrano v. National
22
Labor Relations Commission.
Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was
not given any notice. In the 1989 case of Wenphil Corp. v. National Labor Relations
23
Commission, we reversed this long-standing rule and held that the dismissed
employee, although not given any notice and hearing, was not entitled to reinstatement
and backwages because the dismissal was for grave misconduct and insubordination, a
just ground for termination under Article 282. The employee had a violent temper and
caused trouble during office hours, defying superiors who tried to pacify him. We
concluded that reinstating the employee and awarding backwages "may encourage him
to do even worse and will render a mockery of the rules of discipline that employees are
24
required to observe." We further held that:
Under the circumstances, the dismissal of the private respondent for just cause
should be maintained. He has no right to return to his former employment.
However, the petitioner must nevertheless be held to account for failure to
extend to private respondent his right to an investigation before causing his
dismissal. The rule is explicit as above discussed. The dismissal of an employee
must be for just or authorized cause and after due process. Petitioner
committed an infraction of the second requirement. Thus, it must be imposed a
sanction for its failure to give a formal notice and conduct an investigation as
required by law before dismissing petitioner from employment. Considering
the circumstances of this case petitioner must indemnify the private
respondent the amount of P1,000.00. The measure of this award depends on
the facts of each case and the gravity of the omission committed by the
25
employer.
The rule thus evolved: where the employer had a valid reason to dismiss an employee
but did not follow the due process requirement, the dismissal may be upheld but the
employer will be penalized to pay an indemnity to the employee. This became known as
the Wenphil or Belated Due Process Rule.
On January 27, 2000, in Serrano, the rule on the extent of the sanction was changed. We
held that the violation by the employer of the notice requirement in termination for just
or authorized causes was not a denial of due process that will nullify the termination.
However, the dismissal is ineffectual and the employer must pay full backwages from
the time of termination until it is judicially declared that the dismissal was for a just or
authorized cause.
The rationale for the re-examination of the Wenphil doctrine in Serrano was the
significant number of cases involving dismissals without requisite notices. We concluded
that the imposition of penalty by way of damages for violation of the notice
requirement was not serving as a deterrent. Hence, we now required payment of full

backwages from the time of dismissal until the time the Court finds the dismissal was for
a just or authorized cause.
Serrano was confronting the practice of employers to "dismiss now and pay later" by
imposing full backwages.
We believe, however, that the ruling in Serrano did not consider the full meaning of
Article 279 of the Labor Code which states:
ART. 279. Security of Tenure. In cases of regular employment, the employer
shall not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work shall
be entitled to reinstatement without loss of seniority rights and other privileges
and to his full backwages, inclusive of allowances, and to his other benefits or
their monetary equivalent computed from the time his compensation was
withheld from him up to the time of his actual reinstatement.
This means that the termination is illegal only if it is not for any of the justified or
authorized causes provided by law. Payment of backwages and other benefits, including
reinstatement, is justified only if the employee was unjustly dismissed.
The fact that the Serrano ruling can cause unfairness and injustice which elicited strong
dissent has prompted us to revisit the doctrine.
To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies
a system of rights based on moral principles so deeply imbedded in the traditions and
feelings of our people as to be deemed fundamental to a civilized society as conceived
by our entire history. Due process is that which comports with the deepest notions of
26
what is fair and right and just. It is a constitutional restraint on the legislative as well as
on the executive and judicial powers of the government provided by the Bill of Rights.
Due process under the Labor Code, like Constitutional due process, has two aspects:
substantive, i.e., the valid and authorized causes of employment termination under the
Labor Code; and procedural, i.e., the manner of dismissal. Procedural due process
requirements for dismissal are found in the Implementing Rules of P.D. 442, as
amended, otherwise known as the Labor Code of the Philippines in Book VI, Rule I, Sec.
27
2, as amended by Department Order Nos. 9 and 10. Breaches of these due
process requirements violate the Labor Code. Therefore statutory due process should be
differentiated from failure to comply with constitutional due process.
Constitutional due process protects the individual from the government and assures him
of his rights in criminal, civil or administrative proceedings; while statutory due
process found in the Labor Code and Implementing Rules protects employees from
being unjustly terminated without just cause after notice and hearing.

28

In Sebuguero v. National Labor Relations Commission, the dismissal was for a just and
valid cause but the employee was not accorded due process. The dismissal was upheld
by the Court but the employer was sanctioned. The sanction should be in the nature of
indemnification or penalty, and depends on the facts of each case and the gravity of the
omission committed by the employer.
29

In Nath v. National Labor Relations Commission, it was ruled that even if the employee
was not given due process, the failure did not operate to eradicate the just causes for
dismissal. The dismissal being for just cause,albeit without due process, did not entitle
the employee to reinstatement, backwages, damages and attorney's fees.
Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc. v. National
30
Labor Relations Commission, which opinion he reiterated in Serrano, stated:
C. Where there is just cause for dismissal but due process has not been
properly observed by an employer, it would not be right to order either the
reinstatement of the dismissed employee or the payment of backwages to him.
In failing, however, to comply with the procedure prescribed by law in
terminating the services of the employee, the employer must be deemed to
have opted or, in any case, should be made liable, for the payment of
separation pay. It might be pointed out that the notice to be given and the
hearing to be conducted generally constitute the two-part due process
requirement of law to be accorded to the employee by the employer.
Nevertheless, peculiar circumstances might obtain in certain situations where
to undertake the above steps would be no more than a useless formality and
where, accordingly, it would not be imprudent to apply the res ipsa
loquitur rule and award, in lieu of separation pay, nominal damages to the
31
employee. x x x.
After carefully analyzing the consequences of the divergent doctrines in the law on
employment termination, we believe that in cases involving dismissals for cause but
without observance of the twin requirements of notice and hearing, the better rule is to
abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was
for just cause but imposing sanctions on the employer. Such sanctions, however, must
be stiffer than that imposed in Wenphil. By doing so, this Court would be able to achieve
a fair result by dispensing justice not just to employees, but to employers as well.
The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes
but not complying with statutory due process may have far-reaching consequences.
This would encourage frivolous suits, where even the most notorious violators of
company policy are rewarded by invoking due process. This also creates absurd
situations where there is a just or authorized cause for dismissal but a procedural
infirmity invalidates the termination. Let us take for example a case where the
employee is caught stealing or threatens the lives of his co-employees or has become a
criminal, who has fled and cannot be found, or where serious business losses demand

that operations be ceased in less than a month. Invalidating the dismissal would not
serve public interest. It could also discourage investments that can generate
employment in the local economy.
The constitutional policy to provide full protection to labor is not meant to be a sword
to oppress employers. The commitment of this Court to the cause of labor does not
prevent us from sustaining the employer when it is in the right, as in this
32
case. Certainly, an employer should not be compelled to pay employees for work not
actually performed and in fact abandoned.
The employer should not be compelled to continue employing a person who is
admittedly guilty of misfeasance or malfeasance and whose continued employment is
patently inimical to the employer. The law protecting the rights of the laborer
33
authorizes neither oppression nor self-destruction of the employer.
It must be stressed that in the present case, the petitioners committed a grave offense,
i.e., abandonment, which, if the requirements of due process were complied with,
would undoubtedly result in a valid dismissal.
An employee who is clearly guilty of conduct violative of Article 282 should not be
protected by the Social Justice Clause of the Constitution. Social justice, as the term
suggests, should be used only to correct an injustice. As the eminent Justice Jose P.
Laurel observed, social justice must be founded on the recognition of the necessity of
interdependence among diverse units of a society and of the protection that should be
equally and evenly extended to all groups as a combined force in our social and
economic life, consistent with the fundamental and paramount objective of the state of
promoting the health, comfort, and quiet of all persons, and of bringing about "the
34
greatest good to the greatest number."
This is not to say that the Court was wrong when it ruled the way it did
in Wenphil, Serrano and related cases. Social justice is not based on rigid formulas set in
stone. It has to allow for changing times and circumstances.
Justice Isagani Cruz strongly asserts the need to apply a balanced approach to labormanagement relations and dispense justice with an even hand in every case:
We have repeatedly stressed that social justice or any justice for that matter
is for the deserving, whether he be a millionaire in his mansion or a pauper in
his hovel. It is true that, in case of reasonable doubt, we are to tilt the balance
in favor of the poor to whom the Constitution fittingly extends its sympathy
and compassion. But never is it justified to give preference to the poor simply
because they are poor, or reject the rich simply because they are rich, for
justice must always be served for the poor and the rich alike, according to the
35
mandate of the law.

Justice in every case should only be for the deserving party. It should not be presumed
that every case of illegal dismissal would automatically be decided in favor of labor, as
management has rights that should be fully respected and enforced by this Court. As
interdependent and indispensable partners in nation-building, labor and management
need each other to foster productivity and economic growth; hence, the need to weigh
and balance the rights and welfare of both the employee and employer.
Where the dismissal is for a just cause, as in the instant case, the lack of statutory due
process should not nullify the dismissal, or render it illegal, or ineffectual. However, the
employer should indemnify the employee for the violation of his statutory rights, as
36
ruled in Reta v. National Labor Relations Commission. The indemnity to be imposed
should be stiffer to discourage the abhorrent practice of "dismiss now, pay later," which
we sought to deter in the Serrano ruling. The sanction should be in the nature of
indemnification or penalty and should depend on the facts of each case, taking into
special consideration the gravity of the due process violation of the employer.
Under the Civil Code, nominal damages is adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by
37
him.
38

As enunciated by this Court in Viernes v. National Labor Relations Commissions, an

employer is liable to pay indemnity in the form of nominal damages to an employee
who has been dismissed if, in effecting such dismissal, the employer fails to comply with
the requirements of due process. The Court, after considering the circumstances
therein, fixed the indemnity at P2,590.50, which was equivalent to the employee's one
month salary. This indemnity is intended not to penalize the employer but to vindicate
or recognize the employee's right to statutory due process which was violated by the
39
employer.
The violation of the petitioners' right to statutory due process by the private respondent
warrants the payment of indemnity in the form of nominal damages. The amount of
such damages is addressed to the sound discretion of the court, taking into account the
40
relevant circumstances. Considering the prevailing circumstances in the case at bar,
we deem it proper to fix it at P30,000.00. We believe this form of damages would serve
to deter employers from future violations of the statutory due process rights of
employees. At the very least, it provides a vindication or recognition of this fundamental
right granted to the latter under the Labor Code and its Implementing Rules.
Private respondent claims that the Court of Appeals erred in holding that it failed to pay
petitioners' holiday pay, service incentive leave pay and 13th month pay.
We are not persuaded.

We affirm the ruling of the appellate court on petitioners' money claims. Private
respondent is liable for petitioners' holiday pay, service incentive leave pay and 13th
month pay without deductions.
As a general rule, one who pleads payment has the burden of proving it. Even where the
employee must allege non-payment, the general rule is that the burden rests on the
employer to prove payment, rather than on the employee to prove non-payment. The
reason for the rule is that the pertinent personnel files, payrolls, records, remittances
and other similar documents which will show that overtime, differentials, service
incentive leave and other claims of workers have been paid are not in the possession
41
of the worker but in the custody and absolute control of the employer.
In the case at bar, if private respondent indeed paid petitioners' holiday pay and service
incentive leave pay, it could have easily presented documentary proofs of such
monetary benefits to disprove the claims of the petitioners. But it did not, except with
respect to the 13th month pay wherein it presented cash vouchers showing payments of
42
the benefit in the years disputed. Allegations by private respondent that it does not
operate during holidays and that it allows its employees 10 days leave with pay, other
than being self-serving, do not constitute proof of payment. Consequently, it failed to
discharge the onus probandi thereby making it liable for such claims to the petitioners.
Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio
Agabon's 13th month pay, we find the same to be unauthorized. The evident intention
of Presidential Decree No. 851 is to grant an additional income in the form of the 13th
43
month pay to employees not already receiving the same so as "to further protect the
44
level of real wages from the ravages of world-wide inflation." Clearly, as additional
income, the 13th month pay is included in the definition of wage under Article 97(f) of
the Labor Code, to wit:
(f) "Wage" paid to any employee shall mean the remuneration or earnings,
however designated, capable of being expressed in terms of money whether
fixed or ascertained on a time, task, piece , or commission basis, or other
method of calculating the same, which is payable by an employer to an
employee under a written or unwritten contract of employment for work done
or to be done, or for services rendered or to be rendered and includes the fair
and reasonable value, as determined by the Secretary of Labor, of board,
lodging, or other facilities customarily furnished by the employer to the
employee"
45

from which an employer is prohibited under Article 113 of the same Code from making
any deductions without the employee's knowledge and consent. In the instant case,
private respondent failed to show that the deduction of the SSS loan and the value of
the shoes from petitioner Virgilio Agabon's 13th month pay was authorized by the
latter. The lack of authority to deduct is further bolstered by the fact that petitioner
Virgilio Agabon included the same as one of his money claims against private
respondent.

The Court of Appeals properly reinstated the monetary claims awarded by the Labor
Arbiter ordering the private respondent to pay each of the petitioners holiday pay for
four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive
leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio
Agabon's thirteenth month pay for 1998 in the amount of P2,150.00.
WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court
of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, finding that petitioners'
Jenny and Virgilio Agabon abandoned their work, and ordering private respondent to
pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in
the amount of P6,520.00, service incentive leave pay for the same period in the amount
of P3,255.00 and the balance of Virgilio Agabon's thirteenth month pay for 1998 in the
amount of P2,150.00 isAFFIRMED with the MODIFICATION that private respondent
Riviera Home Improvements, Inc. is furtherORDERED to pay each of the petitioners the
amount of P30,000.00 as nominal damages for non-compliance with statutory due
process.
No costs.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Sandoval-Gutierrez, Carpio, AustriaMartinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, Chico-Nazario, and Garcia,
JJ., concur.

EN BANC

If complainants could not be reinstated, respondents are ordered to pay them

separation pay equivalent to one month salary for very (sic) year of service.

[G.R. No. 151378. March 28, 2005]

JAKA FOOD PROCESSING CORPORATION, petitioner, vs. DARWIN PACOT, ROBERT
PAROHINOG, DAVID BISNAR, MARLON DOMINGO, RHOEL LESCANO and
JONATHAN CAGABCAB, respondents.
DECISION

SO ORDERED.
Therefrom, JAKA went on appeal to the NLRC, which, in a decision dated August
[4]
30, 1999, affirmed in toto that of the Labor Arbiter.
JAKA filed a motion for reconsideration. Acting thereon, the NLRC came out with
[5]
another decision dated January 28, 2000, this time modifying its earlier decision, thus:

GARCIA, J.:

2. Resolution dated 8 January 2002, denying petitioners motion for

reconsideration.

WHEREFORE, premises considered, the instant motion for reconsideration is hereby

GRANTED and the challenged decision of this Commission [dated] 30 August 1999 and
the decision of the Labor Arbiter xxx are hereby modified by reversing an setting aside
the awards of backwages, service incentive leave pay. Each of the complainantsappellees shall be entitled to a separation pay equivalent to one month. In addition,
respondents-appellants is (sic) ordered to pay each of the complainants-appellees the
sum of P2,000.00 as indemnification for its failure to observe due process in effecting
the retrenchment.

The material facts may be briefly stated, as follows:

SO ORDERED.

Assailed and sought to be set aside in this appeal by way of a petition for review on
certiorari under rule 45 of the Rules of Court are the following issuances of the Court of
Appeals in CA-G.R. SP. No. 59847, to wit:
[1]

1. Decision dated 16 November 2001, reversing and setting aside an earlier

decision of the National Labor Relations Commission (NLRC); and
[2]

Respondents Darwin Pacot, Robert Parohinog, David Bisnar, Marlon Domingo,

Rhoel Lescano and Jonathan Cagabcab were earlier hired by petitioner JAKA Foods
Processing Corporation (JAKA, for short) until the latter terminated their employment
on August 29, 1997 because the corporation was in dire financial straits. It is not
disputed, however, that the termination was effected without JAKA complying with the
requirement under Article 283 of the Labor Code regarding the service of a written
notice upon the employees and the Department of Labor and Employment at least one
(1) month before the intended date of termination.
In time, respondents separately filed with the regional Arbitration Branch of the
National Labor Relations Commission (NLRC) complaints for illegal dismissal,
th
underpayment of wages and nonpayment of service incentive leave and 13 month pay
against JAKA and its HRD Manager, Rosana Castelo.
[3]

After due proceedings, the Labor Arbiter rendered a decision declaring the
termination illegal and ordering JAKA and its HRD Manager to reinstate respondents
with full backwages, and separation pay if reinstatement is not possible. More
specifically the decision dispositively reads:
WHEREFORE, judgment is hereby rendered declaring as illegal the termination of
complainants and ordering respondents to reinstate them to their positions with full
backwages which as of July 30, 1998 have already amounted to P339,768.00.
Respondents are also ordered to pay complainants the amount of P2,775.00
representing the unpaid service incentive leave pay of Parohinog, Lescano and Cagabcab
th
an the amount of P19,239.96 as payment for 1997 13 month pay as alluded in the
above computation.

Their motion for reconsideration having been denied by the NLRC in its resolution
[6]
of April 28, 2000, respondents went to the Court of Appeals via a petition for
certiorari, thereat docketed as CA-G.R. SP No. 59847.
As stated at the outset hereof, the Court of Appeals, in a decision dated November
[7]
16, 2000, applying the doctrine laid down by this Court in Serrano vs. NLRC, reversed
and set aside the NLRCs decision of January 28, 2000, thus:
WHEREFORE, the decision dated January 28, 2000 of the National Labor Relations
Commission is REVERSED and SET ASIDE and another one entered ordering respondent
JAKA Foods Processing Corporation to pay petitioners separation pay equivalent to one
th
(1) month salary, the proportionate 13 month pay and, in addition, full backwages
from the time their employment was terminated on August 29, 1997 up to the time the
Decision herein becomes final.
SO ORDERED.
This time, JAKA moved for a reconsideration but its motion was denied by the
appellate court in its resolution of January 8, 2002.
Hence, JAKAs present recourse, submitting, for our consideration, the following
issues:
I. WHETHER OR NOT THE COURT OF APPEALS CORRECTLY AWARDED FULL
BACKWAGES TO RESPONDENTS.

II. WHETHER OR NOT THE ASSAILED DECISION CORRECTLY AWARDED

SEPARATION PAY TO RESPONDENTS.
As we see it, there is only one question that requires resolution, i.e. what are the
legal implications of a situation where an employee is dismissed for cause but such
dismissal was effected without the employers compliance with the notice requirement
under the Labor Code.
This, certainly, is not a case of first impression. In the very recent case of Agabon
[8]
vs. NLRC, we had the opportunity to resolve a similar question. Therein, we found that
the employees committed a grave offense, i.e., abandonment, which is a form of a
neglect of duty which, in turn, is one of the just causes enumerated under Article 282 of
the Labor Code. In said case, we upheld the validity of the dismissal despite noncompliance with the notice requirement of the Labor Code. However, we required the
employer to pay the dismissed employees the amount of P30,000.00, representing
nominal damages for non-compliance with statutory due process, thus:
Where the dismissal is for a just cause, as in the instant case, the lack of statutory due
process should not nullify the dismissal, or render it illegal, or ineffectual. However, the
employer should indemnify the employee for the violation of his statutory rights, as
ruled in Reta vs. National Labor Relations Commission. The indemnity to be imposed
should be stiffer to discourage the abhorrent practice of dismiss now, pay later, which
we sought to deter in the Serrano ruling. The sanction should be in the nature of
indemnification or penalty and should depend on the facts of each case, taking into
special consideration the gravity of the due process violation of the employer.
xxx xxx xxx
The violation of petitioners right to statutory due process by the private respondent
warrants the payment of indemnity in the form of nominal damages. The amount of
such damages is addressed to the sound discretion of the court, taking into account the
relevant circumstances. Considering the prevailing circumstances in the case at bar, we
deem it proper to fix it at P30,000.00. We believe this form of damages would serve to
deter employers from future violations of the statutory due process rights of
employees. At the very least, it provides a vindication or recognition of this fundamental
right granted to the latter under the Labor Code and its Implementing Rules, (Emphasis
supplied).
The difference between Agabon and the instant case is that in the former, the
dismissal was based on a just cause under Article 282 of the Labor Code while in the
present case, respondents were dismissed due to retrenchment, which is one of the
authorized causes under Article 283 of the same Code.
At this point, we note that there are divergent implications of a dismissal for just
cause under Article 282, on one hand, and a dismissal for authorized cause under Article
283, on the other.

A dismissal for just cause under Article 282 implies that the employee concerned
has committed, or is guilty of, some violation against the employer, i.e. the employee
has committed some serious misconduct, is guilty of some fraud against the employer,
or, as in Agabon, he has neglected his duties. Thus, it can be said that the employee
himself initiated the dismissal process.
On another breath, a dismissal for an authorized cause under Article 283 does not
necessarily imply delinquency or culpability on the part of the employee. Instead, the
dismissal process is initiated by the employers exercise of his management
prerogative, i.e. when the employer opts to install labor saving devices, when he decides
to cease business operations or when, as in this case, he undertakes to implement a
retrenchment program.
The clear-cut distinction between a dismissal for just cause under Article 282 and a
dismissal for authorized cause under Article 283 is further reinforced by the fact that in
the first, payment of separation pay, as a rule, is not required, while in the second, the
[9]
law requires payment of separation pay.
For these reasons, there ought to be a difference in treatment when the ground
for dismissal is one of the just causes under Article 282, and when based on one of the
authorized causes under Article 283.
Accordingly, it is wise to hold that: (1) if the dismissal is based on a just cause
under Article 282 but the employer failed to comply with the notice requirement, the
sanction to be imposed upon him should be tempered because the dismissal process
was, in effect, initiated by an act imputable to the employee; and (2) if the dismissal is
based on an authorized cause under Article 283 but the employer failed to comply with
the notice requirement, the sanction should be stiffer because the dismissal process was
initiated by the employers exercise of his management prerogative.
The records before us reveal that, indeed, JAKA was suffering from serious
business losses at the time it terminated respondents employment. As aptly found by
the NLRC:
A careful study of the evidence presented by the respondent-appellant corporation
shows that the audited Financial Statement of the corporation for the periods 1996,
1997 and 1998 were submitted by the respondent-appellant corporation, The
Statement of Income and Deficit found in the Audited Financial Statement of the
respondent-appellant corporation clearly shows the following in 1996, the deficit of the
respondent-appellant corporation was P188,218,419.00 or 94.11% of the stockholders
[sic] equity which amounts to P200,000,000.00. In 1997 when the retrenchment
program of respondent-appellant corporation was undertaken, the deficit ballooned to
P247,222,569.00 or 123.61% of the stockholders equity, thus a capital deficiency or
impairment of equity ensued. In 1998, the deficit grew to P355,794,897.00 or 177% of
the stockholders equity. From 1996 to 1997, the deficit grew by more that (sic) 31%
while in 1998 the deficit grew by more than 47%.

The Statement of Income and Deficit of the respondent-appellant corporation to prove

its alleged losses was prepared by an independent auditor, SGV & Co. It convincingly
showed that the respondent-appellant corporation was in dire financial straits, which
the complainants-appellees failed to dispute. The losses incurred by the respondentappellant corporation are clearly substantial and sufficiently proven with clear and
satisfactory evidence. Losses incurred were adequately shown with respondentappellants audited financial statement. Having established the loss incurred by the
respondent-appellant corporation, it necessarily necessarily (sic) follows that the ground
in support of retrenchment existed at the time the complainants-appellees were
terminated. We cannot therefore sustain the findings of the Labor Arbiter that the
alleged losses of the respondent-appellant was [sic] not well substantiated by
substantial proofs. It is therefore logical for the corporation to implement a
[10]
retrenchment program to prevent further losses.
Noteworthy it is, moreover, to state that herein respondents did not assail the
foregoing finding of the NLRC which, incidentally, was also affirmed by the Court of
Appeals.
It is, therefore, established that there was ground for respondents
dismissal, i.e., retrenchment, which is one of the authorized causes enumerated under
Article 283 of the Labor Code. Likewise, it is established that JAKA failed to comply with
the notice requirement under the same Article. Considering the factual circumstances in
the instant case and the above ratiocination, we, therefore, deem it proper to fix the
indemnity at P50,000.00.
We likewise find the Court of Appeals to have been in error when it ordered JAKA
to pay respondents separation pay equivalent to one (1) month salary for every year of
[11]
service. This is because in Reahs Corporation vs. NLRC, we made the following
declaration:
The rule, therefore, is that in all cases of business closure or cessation of operation or
undertaking of the employer, the affected employee is entitled to separation pay. This is
consistent with the state policy of treating labor as a primary social economic force,
affording full protection to its rights as well as its welfare. The exception is when the
closure of business or cessation of operations is due to serious business losses or
financial reverses; duly proved, in which case, the right of affected employees to
separation pay is lost for obvious reasons. xxx. (Emphasis supplied)
WHEREFORE, the instant petition is GRANTED. Accordingly, the assailed decision
and resolution of the Court of Appeals respectively dated November 16, 2001 and
January 8, 2002 are hereby SET ASIDE and a new one entered upholding the legality of
the dismissal but ordering petitioner to pay each of the respondents the amount of
P50,000.00, representing nominal damages for non-compliance with statutory due
process.
SO ORDERED.

Davide, Jr., C.J., Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, AustriaMartinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, and Chico-Nazario, JJ., concur.
Puno, J., reiterate dissent in Agaban & Serrano.
Panganiban, J., reiterate dissent in Agaban v. NLRC, GR 158693, Nov. 17, 2004, and
Serrano v. NLRC, 380 Phil. 416, Jan. 27, 2000.
Tinga, J., only in the result. See separate opinion.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-5060

January 26, 1910

THE UNITED STATES, plaintiff-appellee,

vs.
LUIS TORIBIO, defendant-appellant.
Rodriguez & Del Rosario, for appellant.
Attorney-General Villamor, for appellee.
CARSON, J.:
The evidence of record fully sustains the findings of the trial court that the appellant
slaughtered or caused to be slaughtered for human consumption, the carabao described
in the information, without a permit from the municipal treasure of the municipality
wherein it was slaughtered, in violation of the provisions of sections 30 and 33 of Act
No. 1147, an Act regulating the registration, branding, and slaughter of large cattle.
It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was
slaughtered there is no municipal slaughterhouse, and counsel for appellant contends
that under such circumstances the provisions of Act No. 1147 do not prohibit nor
penalize the slaughter of large cattle without a permit of the municipal treasure.
Sections 30, 31, 32, and 33 of the Act are as follows:
SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal
slaughterhouse except upon permit secured from the municipal treasure.
Before issuing the permit for the slaughter of large cattle for human
consumption, the municipal treasurer shall require for branded cattle the
production of the original certificate of ownership and certificates of transfer
showing title in the person applying for the permit, and for unbranded cattle
such evidence as may satisfy said treasurer as to the ownership of the animals
for which permit to slaughter has been requested.
SEC. 31. No permit to slaughter has been carabaos shall be granted by the
municipal treasurer unless such animals are unfit for agricultural work or for
draft purposes, and in no event shall a permit be given to slaughter for food
any animal of any kind which is not fit for human consumption.
SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter
issued by him, and such record shall show the name and residence of the

owner, and the class, sex, age, brands, knots of radiated hair commonly know
as remolinos or cowlicks, and other marks of identification of the animal for the
slaughter of which permit is issued and the date on which such permit is issued.
Names of owners shall be alphabetically arranged in the record, together with
date of permit.
A copy of the record of permits granted for slaughter shall be forwarded
monthly to the provincial treasurer, who shall file and properly index the same
under the name of the owner, together with date of permit.
SEC. 33. Any person slaughtering or causing to be slaughtered for human
consumption or killing for food at the municipal slaughterhouse any large cattle
except upon permit duly secured from the municipal treasurer, shall be
punished by a fine of not less than ten nor more than five hundred pesos,
Philippine currency, or by imprisonment for not less than one month nor more
than six months, or by both such fine and imprisonment, in the discretion of
the court.
It is contended that the proper construction of the language of these provisions limits
the prohibition contained in section 30 and the penalty imposed in section 33 to cases
(1) of slaughter of large cattle for human consumptionin a municipal slaughter without a
permit duly secured from the municipal treasurer, and (2) cases of killing of large cattle
for food in a municipal slaughterhouse without a permit duly secured from the
municipal treasurer; and it is urged that the municipality of Carmen not being provided
with a municipal slaughterhouse, neither the prohibition nor the penalty is applicable to
cases of slaughter of large cattle without a permit in that municipality.
We are of opinion, however, that the prohibition contained in section 30 refers (1) to
the slaughter of large cattle for human consumption, anywhere, without a permit duly
secured from the municipal treasurer, and (2) expressly and specifically to the killing for
food of large cattle at a municipal slaughterhouse without such permit; and that the
penalty provided in section 33 applies generally to the slaughter of large cattle for
human consumption, anywhere, without a permit duly secured from the municipal
treasurer, and specifically to the killing for food of large cattle at a municipal
slaughterhouse without such permit.
It may be admitted at once, that the pertinent language of those sections taken by itself
and examined apart from the context fairly admits of two constructions: one whereby
the phrase "at the municipal slaughterhouse" may be taken as limiting and restricting
both the word "slaughtered" and the words "killed for food" in section 30, and the
words "slaughtering or causing to be slaughtered for human consumption" and the
words "killing for food" in section 33; and the other whereby the phrase "at the
municipal slaughterhouse" may be taken as limiting and restricting merely the words
"killed for food" and "killing for food" as used in those sections. But upon a reading of
the whole Act, and keeping in mind the manifest and expressed purpose and object of

its enactment, it is very clear that the latter construction is that which should be
adopted.
The Act primarily seeks to protect the "large cattle" of the Philippine Islands against
theft and to make easy the recovery and return of such cattle to their proper owners
when lost, strayed, or stolen. To this end it provides an elaborate and compulsory
system for the separate branding and registry of ownership of all such cattle throughout
the Islands, whereby owners are enabled readily and easily to establish their title; it
prohibits and invalidates all transfers of large cattle unaccompanied by certificates of
transfer issued by the proper officer in the municipality where the contract of sale is
made; and it provides also for the disposition of thieves or persons unlawfully in
possession, so as to protect the rights of the true owners. All this, manifestly, in order to
make it difficult for any one but the rightful owner of such cattle to retain them in his
possession or to dispose of them to others. But the usefulness of this elaborate and
compulsory system of identification, resting as it does on the official registry of the
brands and marks on each separate animal throughout the Islands, would be largely
impaired, if not totally destroyed, if such animals were requiring proof of ownership and
the production of certificates of registry by the person slaughtering or causing them to
be slaughtered, and this especially if the animals were slaughtered privately or in a
clandestine manner outside of a municipal slaughterhouse. Hence, as it would appear,
sections 30 and 33 prohibit and penalize the slaughter for human consumption or killing
for food at a municipal slaughterhouse of such animals without a permit issued by the
municipal treasurer, and section 32 provides for the keeping of detailed records of all
such permits in the office of the municipal and also of the provincial treasurer.
If, however, the construction be placed on these sections which is contended for by the
appellant, it will readily be seen that all these carefully worked out provisions for the
registry and record of the brands and marks of identification of all large cattle in the
Islands would prove in large part abortion, since thieves and persons unlawfully in
possession of such cattle, and naturally would, evade the provisions of the law by
slaughtering them outside of municipal slaughterhouses, and thus enjoy the fruits of
their wrongdoing without exposing themselves to the danger of detection incident to
the bringing of the animals to the public slaughterhouse, where the brands and other
identification marks might be scrutinized and proof of ownership required.
Where the language of a statute is fairly susceptible of two or more constructions, that
construction should be adopted which will most tend to give effect to the manifest
intent of the lawmaker and promote the object for which the statute was enacted, and
a construction should be rejected which would tend to render abortive other provisions
of the statute and to defeat the object which the legislator sought to attain by its
enactment. We are of opinion, therefore, that sections 30 and 33 of the Act prohibit and
penalize the slaughtering or causing to be slaughtered for human consumption of large
cattle at any place without the permit provided for in section 30.
It is not essential that an explanation be found for the express prohibition in these
sections of the "killing for food at a municipal slaughterhouse" of such animals, despite

the fact that this prohibition is clearly included in the general prohibition of the
slaughter of such animals for human consumption anywhere; but it is not improbable
that the requirement for the issue of a permit in such cases was expressly and
specifically mentioned out of superabundance of precaution, and to avoid all possibility
of misunderstanding in the event that some of the municipalities should be disposed to
modify or vary the general provisions of the law by the passage of local ordinances or
regulations for the control of municipal slaughterhouse.
Similar reasoning applied to the specific provisions of section 31 of the Act leads to the
same conclusion. One of the secondary purposes of the law, as set out in that section, is
to prevent the slaughter for food of carabaos fit for agricultural and draft purposes, and
of all animals unfit for human consumption. A construction which would limit the
prohibitions and penalties prescribed in the statute to the killing of such animals in
municipal slaughterhouses, leaving unprohibited and unpenalized their slaughter
outside of such establishments, so manifestly tends to defeat the purpose and object of
the legislator, that unless imperatively demanded by the language of the statute it
should be rejected; and, as we have already indicated, the language of the statute is
clearly susceptible of the construction which we have placed upon it, which tends to
make effective the provisions of this as well as all the other sections of the Act.
It appears that the defendant did in fact apply for a permit to slaughter his carabao, and
that it was denied him on the ground that the animal was not unfit "for agricultural
work or for draft purposes." Counsel for appellant contends that the statute, in so far as
it undertakes to penalize the slaughter of carabaos for human consumption as food,
without first obtaining a permit which can not be procured in the event that the animal
is not unfit "for agricultural work or draft purposes," is unconstitutional and in violation
of the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which
provides that "no law shall be enacted which shall deprive any person of life, liberty, or
property without due process of law."
It is not quite clear from the argument of counsel whether his contention is that this
provision of the statute constitutes a taking of property for public use in the exercise of
the right of eminent domain without providing for the compensation of the owners, or
that it is an undue and unauthorized exercise of the police power of the State. But
whatever may be the basis of his contention, we are of opinion, appropriating, with
necessary modifications understood, the language of that great jurist, Chief Justice Shaw
(in the case of Com. vs. Tewksbury, 11 Met., 55, where the question involved was the
constitutionality of a statute prohibiting and penalizing the taking or carrying away by
any person, including the owner, of any stones, gravel, or sand, from any of the beaches
in the town of Chesea,) that the law in question "is not a taking of the property for
public use, within the meaning of the constitution, but is a just and legitimate exercise
of the power of the legislature to regulate and restrain such particular use of the
property as would be inconsistent with or injurious to the rights of the public. All
property is acquired and held under the tacit condition that it shall not be so used as to
injure the equal rights of others or greatly impair the public rights and interest of the
community."

It may be conceded that the benificial use and exclusive enjoyment of the property of all
carabao owners in these Islands is to a greater or less degree interfered with by the
provisions of the statute; and that, without inquiring what quantum of interest thus
passes from the owners of such cattle, it is an interest the deprivation of which detracts
from their right and authority, and in some degree interferes with their exclusive
possession and control of their property, so that if the regulations in question were
enacted for purely private purpose, the statute, in so far as these regulations are
concerned, would be a violation of the provisions of the Philippine Bill relied on be
appellant; but we are satisfied that it is not such a taking, such an interference with the
right and title of the owners, as is involved in the exercise by the State of the right of
eminent domain, so as to entitle these owners to compensation, and that it is no more
than "a just restrain of an injurious private use of the property, which the legislature had
authority to impose."
In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid down in
Com. vs. Tewksbury (supra) was reviewed and affirmed, the same eminent jurist who
wrote the former opinion, in distinguishing the exercise of the right of eminent domain
from the exercise of the sovereign police powers of the State, said:
We think it is settled principle, growing out of the nature of well-ordered civil
society, that every holder of property, however absolute and unqualified may
be his title, holds it under the implied liability that his use of it may be so
regulated that is shall not be injurious to the equal enjoyment of others having
an equal right to the enjoyment of their property, nor injurious to the rights of
the community. . . . Rights of property, like all other social and conventional
rights, are subject to such reasonable limitations in their enjoyment as shall
prevent them from being injurious, and to such reasonable restrain and
regulations establish by law, as the legislature, under the governing and
controlling power vested in them by the constitution, may think necessary and
expedient.
This is very different from the right of eminent domain, the right of a
government to take and appropriate private property to public use, whenever
the public exigency requires it; which can be done only on condition of
providing a reasonable compensation therefor. The power we allude to is
rather the police power, the power vested in the legislature by the
constitution, to make, ordain, and establish all manner of wholesome and
reasonable laws, statutes, and ordinances, either with penalties or without, not
repugnant to the constitution, as they shall judge to be for the good and
welfare of the commonwealth, and of the subjects of the same.
It is much easier to perceive and realize the existence and sources of this power
than to mark its boundaries or prescribe limits to its exercise.
Applying these principles, we are opinion that the restrain placed by the law on the
slaughter for human consumption of carabaos fit for agricultural work and draft purpose

is not an appropriation of property interests to a "public use," and is not, therefore,

within the principle of the exercise by the State of the right of eminent domain. It is fact
a mere restriction or limitation upon a private use, which the legislature deemed to be
determental to the public welfare. And we think that an examination of the general
provisions of the statute in relation to the public interest which it seeks to safeguard
and the public necessities for which it provides, leaves no room for doubt that the
limitations and restraints imposed upon the exercise of rights of ownership by the
particular provisions of the statute under consideration were imposed not for private
purposes but, strictly, in the promotion of the "general welfare" and "the public
interest" in the exercise of the sovereign police power which every State possesses for
the general public welfare and which "reaches to every species of property within the
commonwealth."
For several years prior to the enactment of the statute a virulent contagious or
infectious disease had threatened the total extinction of carabaos in these Islands, in
many sections sweeping away seventy, eighty, and in some cases as much as ninety and
even one hundred per cent of these animals. Agriculture being the principal occupation
of the people, and the carabao being the work animal almost exclusively in use in the
fields as well as for draft purposes, the ravages of the disease with which they were
infected struck an almost vital blow at the material welfare of the country. large areas of
productive land lay waste for years, and the production of rice, the staple food of the
inhabitants of the Islands, fell off to such an extent that the impoverished people were
compelled to spend many millions of pesos in its importation, notwithstanding the fact
that with sufficient work animals to cultivate the fields the arable rice lands of the
country could easily be made to produce a supply more that sufficient for its own needs.
The drain upon the resources of the Islands was such that famine soon began to make
itself felt, hope sank in the breast of the people, and in many provinces the energies of
the breadwinners seemed to be paralyzed by the apparently hopeless struggle for
existence with which they were confronted.
To meet these conditions, large sums of money were expended by the Government in
relieving the immediate needs of the starving people, three millions of dollars were
voted by the Congress of the United States as a relief or famine fund, public works were
undertaken to furnish employment in the provinces where the need was most pressing,
and every effort made to alleviate the suffering incident to the widespread failure of the
crops throughout the Islands, due in large measure to the lack of animals fit for
agricultural work and draft purposes.
Such measures, however, could only temporarily relieve the situation, because in an
agricultural community material progress and permanent prosperity could hardly be
hoped for in the absence of the work animals upon which such a community must
necessarily rely for the cultivation of the fields and the transportation of the products of
the fields to market. Accordingly efforts were made by the Government to increase the
supply of these animals by importation, but, as appears from the official reports on this
subject, hope for the future depended largely on the conservation of those animals

which had been spared from the ravages of the diseased, and their redistribution
throughout the Islands where the need for them was greatest.
At large expense, the services of experts were employed, with a view to the discovery
and applications of preventive and curative remedies, and it is hoped that these
measures have proved in some degree successful in protecting the present inadequate
supply of large cattle, and that the gradual increase and redistribution of these animals
throughout the Archipelago, in response to the operation of the laws of supply and
demand, will ultimately results in practically relieving those sections which suffered
most by the loss of their work animals.
As was to be expected under such conditions, the price of carabaos rapidly increase
from the three to five fold or more, and it may fairly be presumed that even if the
conservative measures now adopted prove entirely successful, the scant supply will
keep the price of these animals at a high figure until the natural increase shall have
more nearly equalized the supply to the demand.
Coincident with and probably intimately connected with this sudden rise in the price of
cattle, the crime of cattle stealing became extremely prevalent throughout the Islands,
necessitating the enactment of a special law penalizing with the severest penalties the
theft of carabaos and other personal property by roving bands; and it must be assumed
from the legislative authority found that the general welfare of the Islands necessitated
the enactment of special and somewhat burdensome provisions for the branding and
registration of large cattle, and supervision and restriction of their slaughter for food. It
will hardly be questioned that the provisions of the statute touching the branding and
registration of such cattle, and prohibiting and penalizing the slaughter of diseased
cattle for food were enacted in the due and proper exercise of the police power of the
State; and we are of opinion that, under all the circumstances, the provision of the
statute prohibiting and penalizing the slaughter for human consumption of carabaos fit
for work were in like manner enacted in the due and proper exercise of that power,
justified by the exigent necessities of existing conditions, and the right of the State to
protect itself against the overwhelming disaster incident to the further reduction of the
supply of animals fit for agricultural work or draft purposes.
It is, we think, a fact of common knowledge in these Islands, and disclosed by the official
reports and records of the administrative and legislative departments of the
Government, that not merely the material welfare and future prosperity of this
agricultural community were threatened by the ravages of the disease which swept
away the work animals during the years prior to the enactment of the law under
consideration, but that the very life and existence of the inhabitants of these Islands as a
civilized people would be more or less imperiled by the continued destruction of large
cattle by disease or otherwise. Confronted by such conditions, there can be no doubt of
the right of the Legislature to adopt reasonable measures for the preservation of work
animals, even to the extent of prohibiting and penalizing what would, under ordinary
conditions, be a perfectly legitimate and proper exercise of rights of ownership and
control of the private property of the citizen. The police power rests upon necessity and

the right of self-protection and if ever the invasion of private property by police
regulation can be justified, we think that the reasonable restriction placed upon the use
of carabaos by the provision of the law under discussion must be held to be authorized
as a reasonable and proper exercise of that power.
As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152 U.S.,
133, 136):
The extent and limits of what is known as the police power have been a fruitful
subject of discussion in the appellate courts of nearly every State in the Union.
It is universally conceded to include everything essential to the public safely,
health, and morals, and to justify the destruction or abatement, by summary
proceedings, of whatever may be regarded as a public nuisance. Under this
power it has been held that the State may order the destruction of a house
falling to decay or otherwise endangering the lives of passers-by; the
demolition of such as are in the path of a conflagration; the slaughter of
diseased cattle; the destruction of decayed or unwholesome food; the
prohibition of wooden buildings in cities; the regulation of railways and other
means of public conveyance, and of interments in burial grounds; the
restriction of objectionable trades to certain localities; the compulsary
vaccination of children; the confinement of the insane or those afficted with
contagious deceases; the restraint of vagrants, beggars, and habitual
drunkards; the suppression of obscene publications and houses of ill fame; and
the prohibition of gambling houses and places where intoxicating liquors are
sold. Beyond this, however, the State may interfere wherever the public
interests demand it, and in this particular a large discretion is necessarily vested
in the legislature to determine, not only what the interests of the public require,
but what measures are necessary for the protection of such interests.
(Barbier vs. Connolly, 113 U. S., 27; Kidd vs. Pearson, 128 U. S., 1.) To justify the
State in thus interposing its authority in behalf of the public, it must appear,
first, that the interests of the public generally, as distinguished from those of a
particular class, require such interference; and, second, that the means are
reasonably necessary for the accomplishment of the purpose, and not unduly
oppressive upon individuals. The legislature may not, under the guise of
protecting the public interests, arbitrarily interfere with private business, or
impose unusual and unnecessary restrictions upon lawful occupations. In other
words, its determination as to what is a proper exercise of its police powers is
not final or conclusive, but is subject to the supervision of the court.
From what has been said, we think it is clear that the enactment of the provisions of the
statute under consideration was required by "the interests of the public generally, as
distinguished from those of a particular class;" and that the prohibition of the slaughter
of carabaos for human consumption, so long as these animals are fit for agricultural
work or draft purposes was a "reasonably necessary" limitation on private ownership, to
protect the community from the loss of the services of such animals by their slaughter
by improvident owners, tempted either by greed of momentary gain, or by a desire to

enjoy the luxury of animal food, even when by so doing the productive power of the
community may be measurably and dangerously affected.
Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt., 140), said (p.
149) that by this "general police power of the State, persons and property are subjected
to all kinds of restraints and burdens, in order to secure the general comfort, health, and
prosperity of the State; of the perfect right in the legislature to do which no question
ever was, or, upon acknowledge and general principles, ever can be made, so far as
natural persons are concerned."
And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:
It would be quite impossible to enumerate all the instances in which the police
power is or may be exercised, because the various cases in which the exercise
by one individual of his rights may conflict with a similar exercise by others, or
may be detrimental to the public order or safety, are infinite in number and in
variety. And there are other cases where it becomes necessary for the public
authorities to interfere with the control by individuals of their property, and
even to destroy it, where the owners themselves have fully observed all their
duties to their fellows and to the State, but where, nevertheless, some
controlling public necessity demands the interference or destruction. A strong
instance of this description is where it becomes necessary to take, use, or
destroy the private property of individuals to prevent the spreading of a fire,
the ravages of a pestilence, the advance of a hostile army, or any other great
public calamity. Here the individual is in no degree in fault, but his interest
must yield to that "necessity" which "knows no law." The establishment of
limits within the denser portions of cities and villages within which buildings
constructed of inflammable materials shall not be erected or repaired may also,
in some cases, be equivalent to a destruction of private property; but
regulations for this purpose have been sustained notwithstanding this result.
Wharf lines may also be established for the general good, even though they
prevent the owners of water-fronts from building out on soil which constitutes
private property. And, whenever the legislature deem it necessary to the
protection of a harbor to forbid the removal of stones, gravel, or sand from the
beach, they may establish regulations to that effect under penalties, and make
them applicable to the owners of the soil equally with other persons. Such
regulations are only "a just restraint of an injurious use of property, which the
legislature have authority" to impose.
So a particular use of property may sometimes be forbidden, where, by a
change of circumstances, and without the fault of the power, that which was
once lawful, proper, and unobjectionable has now become a public nuisance,
endangering the public health or the public safety. Milldams are sometimes
destroyed upon this grounds; and churchyards which prove, in the advance of
urban population, to be detrimental to the public health, or in danger of
becoming so, are liable to be closed against further use for cemetery purposes.

These citations from some of the highest judicial and text-book authorities in the United
States clearly indicate the wide scope and extent which has there been given to the
doctrine us in our opinion that the provision of the statute in question being a proper
exercise of that power is not in violation of the terms of section 5 of the Philippine Bill,
which provide that "no law shall be enacted which shall deprive any person of life,
liberty, or property without due process of law," a provision which itself is adopted from
the Constitution of the United States, and is found in substance in the constitution of
most if not all of the States of the Union.
The judgment of conviction and the sentence imposed by the trial court should be
affirmed with the costs of this instance against the appellant. So ordered.
Arellano, C.J., Torres, Johnson, Moreland and Elliott, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-10572 December 21, 1915
FRANCIS A. CHURCHILL and STEWART TAIT, plaintiffs-appellees,
vs.
JAMES J. RAFFERTY, Collector of Internal Revenue, defendant-appellant.
Attorney-General Avancea for appellant.
Aitken and DeSelms for appellees.
TRENT, J.:
The judgment appealed from in this case perpetually restrains and prohibits the
defendant and his deputies from collecting and enforcing against the plaintiffs and their
property the annual tax mentioned and described in subsection (b) of section 100 of Act
No. 2339, effective July 1, 1914, and from destroying or removing any sign, signboard, or
billboard, the property of the plaintiffs, for the sole reason that such sign, signboard, or
billboard is, or may be, offensive to the sight; and decrees the cancellation of the bond
given by the plaintiffs to secure the issuance of the preliminary injunction granted soon
after the commencement of this action.
This case divides itself into two parts and gives rise to two main questions; (1) that
relating to the power of the court to restrain by injunction the collection of the tax
complained of, and (2) that relating to the validity of those provisions of subsection (b)
of section 100 of Act No. 2339, conferring power upon the Collector of Internal Revenue
to remove any sign, signboard, or billboard upon the ground that the same is offensive
to the sight or is otherwise a nuisance.
The first question is one of the jurisdiction and is of vital importance to the Government.
The sections of Act No. 2339, which bear directly upon the subject, are 139 and 140. The
first expressly forbids the use of an injunction to stay the collection of any internal
revenue tax; the second provides a remedy for any wrong in connection with such taxes,
and this remedy was intended to be exclusive, thereby precluding the remedy by
injunction, which remedy is claimed to be constitutional. The two sections, then, involve
the right of a dissatisfied taxpayers to use an exceptional remedy to test the validity of
any tax or to determine any other question connected therewith, and the question
whether the remedy by injunction is exceptional.
Preventive remedies of the courts are extraordinary and are not the usual remedies. The
origin and history of the writ of injunction show that it has always been regarded as an

extraordinary, preventive remedy, as distinguished from the common course of the law
to redress evils after they have been consummated. No injunction issues as of course,
but is granted only upon the oath of a party and when there is no adequate remedy at
law. The Government does, by section 139 and 140, take away the preventive remedy of
injunction, if it ever existed, and leaves the taxpayer, in a contest with it, the same
ordinary remedial actions which prevail between citizen and citizen. The AttorneyGeneral, on behalf of the defendant, contends that there is no provisions of the
paramount law which prohibits such a course. While, on the other hand, counsel for
plaintiffs urge that the two sections are unconstitutional because (a) they attempt to
deprive aggrieved taxpayers of all substantial remedy for the protection of their
property, thereby, in effect, depriving them of their property without due process of
law, and (b) they attempt to diminish the jurisdiction of the courts, as conferred upon
them by Acts Nos. 136 and 190, which jurisdiction was ratified and confirmed by the Act
of Congress of July 1, 1902.
In the first place, it has been suggested that section 139 does not apply to the tax in
question because the section, in speaking of a "tax," means only legal taxes; and that an
illegal tax (the one complained of) is not a tax, and, therefore, does not fall within the
inhibition of the section, and may be restrained by injunction. There is no force in this
suggestion. The inhibition applies to all internal revenue taxes imposes, or authorized to
be imposed, by Act No. 2339. (Snyder vs. Marks, 109 U.S., 189.) And, furthermore, the
mere fact that a tax is illegal, or that the law, by virtue of which it is imposed, is
unconstitutional, does not authorize a court of equity to restrain its collection by
injunction. There must be a further showing that there are special circumstances which
bring the case under some well recognized head of equity jurisprudence, such as that
irreparable injury, multiplicity of suits, or a cloud upon title to real estate will result, and
also that there is, as we have indicated, no adequate remedy at law. This is the settled
law in the United States, even in the absence of statutory enactments such as sections
139 and 140. (Hannewinkle vs. Mayor, etc., of Georgetown, 82 U.S., 547; Indiana Mfg.
Co. vs. Koehne, 188 U.S., 681; Ohio Tax cases, 232 U. S., 576, 587; Pittsburgh C. C. & St.
L. R. Co. vs. Board of Public Works, 172 U. S., 32; Shelton vs. Plat, 139 U.S., 591; State
Railroad Tax Cases, 92 U. S., 575.) Therefore, this branch of the case must be controlled
by sections 139 and 140, unless the same be held unconstitutional, and consequently,
null and void.
The right and power of judicial tribunals to declare whether enactments of the
legislature exceed the constitutional limitations and are invalid has always been
considered a grave responsibility, as well as a solemn duty. The courts
invariably give the most careful consideration to questions involving the
interpretation and application of the Constitution, and approach constitutional
questions with great deliberation, exercising their power in this respect with
the greatest possible caution and even reluctance; and they should never
declare a statute void, unless its invalidity is, in their judgment, beyond
reasonable doubt. To justify a court in pronouncing a legislative act
unconstitutional, or a provision of a state constitution to be in contravention of
the Constitution of the United States, the case must be so clear to be free from

doubt, and the conflict of the statute with the constitution must be
irreconcilable, because it is but a decent respect to the wisdom, the integrity,
and the patriotism of the legislative body by which any law is passed to
presume in favor of its validity until the contrary is shown beyond reasonable
doubt. Therefore, in no doubtful case will the judiciary pronounce a legislative
act to be contrary to the constitution. To doubt the constitutionality of a law is
to resolve the doubt in favor of its validity. (6 Ruling Case Law, secs. 71, 72, and
73, and cases cited therein.)
It is also the settled law in the United States that "due process of law" does not always
require, in respect to the Government, the same process that is required between
citizens, though it generally implies and includes regular allegations, opportunity to
answer, and a trial according to some well settled course of judicial proceedings. The
case with which we are dealing is in point. A citizen's property, both real and personal,
may be taken, and usually is taken, by the government in payment of its taxes without
any judicial proceedings whatever. In this country, as well as in the United States, the
officer charged with the collection of taxes is authorized to seize and sell the property of
delinquent taxpayers without applying to the courts for assistance, and the
constitutionality of the law authorizing this procedure never has been seriously
questioned. (City of Philadelphia vs. [Diehl] The Collector, 5 Wall., 720; Nicholl vs. U.S., 7
Wall., 122, and cases cited.) This must necessarily be the course, because it is upon
taxation that the Government chiefly relies to obtain the means to carry on its
operations, and it is of the utmost importance that the modes adopted to enforce the
collection of the taxes levied should be summary and interfered with as little as
possible. No government could exist if every litigious man were permitted to delay the
collection of its taxes. This principle of public policy must be constantly borne in mind in
determining cases such as the one under consideration.
With these principles to guide us, we will proceed to inquire whether there is any merit
in the two propositions insisted upon by counsel for the plaintiffs. Section 5 of the
Philippine Bill provides: "That no law shall be enacted in said Islands which shall deprive
any person of life, liberty, or property without due process of law, or deny to any person
therein the equal protection of the law."
The origin and history of these provisions are well-known. They are found in substance
in the Constitution of the United States and in that of ever state in the Union.
Section 3224 of the Revised Statutes of the United States, effective since 1867, provides
that: "No suit for the purpose of restraining the assessment or collection of any tax shall
be maintained in any court."
Section 139, with which we have been dealing, reads: "No court shall have authority to
grant an injunction to restrain the collection of any internal-revenue tax."
A comparison of these two sections show that they are essentially the same. Both
expressly prohibit the restraining of taxes by injunction. If the Supreme Court of the

United States has clearly and definitely held that the provisions of section 3224 do not
violate the "due process of law" and "equal protection of the law" clauses in the
Constitution, we would be going too far to hold that section 139 violates those same
provisions in the Philippine Bill. That the Supreme Court of the United States has so
held, cannot be doubted.
In Cheatham vs. United States (92 U.S., 85,89) which involved the validity of an income
tax levied by an act of Congress prior to the one in issue in the case of
Pollock vs. Farmers' Loan & Trust Co. (157 U.S., 429) the court, through Mr. Justice
Miller, said: "If there existed in the courts, state or National, any general power of
impeding or controlling the collection of taxes, or relieving the hardship incident to
taxation, the very existence of the government might be placed in the power of a hostile
judiciary. (Dows vs. The City of Chicago, 11 Wall., 108.) While a free course of
remonstrance and appeal is allowed within the departments before the money is finally
exacted, the General Government has wisely made the payment of the tax claimed,
whether of customs or of internal revenue, a condition precedent to a resort to the
courts by the party against whom the tax is assessed. In the internal revenue branch it
has further prescribed that no such suit shall be brought until the remedy by appeal has
been tried; and, if brought after this, it must be within six months after the decision on
the appeal. We regard this as a condition on which alone the government consents to
litigate the lawfulness of the original tax. It is not a hard condition. Few governments
have conceded such a right on any condition. If the compliance with this condition
requires the party aggrieved to pay the money, he must do it."
Again, in State Railroad Tax Cases (92 U.S., 575, 613), the court said: "That there might
be no misunderstanding of the universality of this principle, it was expressly enacted, in
1867, that "no suit for the purpose of restraining the assessment or collection of any tax
shall be maintained in any court." (Rev, Stat., sec. 3224.) And though this was intended
to apply alone to taxes levied by the United States, it shows the sense of Congress of the
evils to be feared if courts of justice could, in any case, interfere with the process of
collecting taxes on which the government depends for its continued existence. It is a
wise policy. It is founded in the simple philosophy derived from the experience of ages,
that the payment of taxes has to be enforced by summary and stringent means against a
reluctant and often adverse sentiment; and to do this successfully, other
instrumentalities and other modes of procedure are necessary, than those which belong
to courts of justice."
And again, in Snyder vs. Marks (109 U.S., 189), the court said: "The remedy of a suit to
recover back the tax after it is paid is provided by statute, and a suit to restrain its
collection is forbidden. The remedy so given is exclusive, and no other remedy can be
substituted for it. Such has been the current of decisions in the Circuit Courts of the
United States, and we are satisfied it is a correct view of the law."itc-a1f
In the consideration of the plaintiffs' second proposition, we will attempt to show (1)
that the Philippine courts never have had, since the American occupation, the power to
restrain by injunction the collection of any tax imposed by the Insular Government for

its own purpose and benefit, and (2) that assuming that our courts had or have such
power, this power has not been diminished or curtailed by sections 139 and 140.
We will first review briefly the former and present systems of taxation. Upon the
American occupation of the Philippine, there was found a fairly complete system of
taxation. This system was continued in force by the military authorities, with but few
changes, until the Civil Government assumed charge of the subject. The principal
sources of revenue under the Spanish regime were derived from customs receipts, the
so-called industrial taxes, the urbana taxes, the stamp tax, the personal cedula tax, and
the sale of the public domain. The industrial and urbana taxes constituted practically an
income tax of some 5 per cent on the net income of persons engaged in industrial and
commercial pursuits and on the income of owners of improved city property. The sale of
stamped paper and adhesive stamp tax. The cedula tax was a graduated tax, ranging
from nothing up to P37.50. The revenue derived from the sale of the public domain was
not considered a tax. The American authorities at once abolished the cedula tax, but
later restored it in a modified form, charging for each cedula twenty centavos, an
amount which was supposed to be just sufficient to cover the cost of issuance. The
urbana tax was abolished by Act No. 223, effective September 6, 1901.
The "Municipal Code" (Act No. 82) and the Provincial Government Act (No. 83), both
enacted in 1901, authorize municipal councils and provincial boards to impose an ad
valorem tax on real estate. The Municipal Code did not apply to the city of Manila. This
city was given a special charter (Act No. 183), effective August 30, 1901; Under this
charter the Municipal Board of Manila is authorized and empowered to impose taxes
upon real estate and, like municipal councils, to license and regulate certain
occupations. Customs matters were completely reorganized by Act No. 355, effective at
the port of Manila on February 7, 1902, and at other ports in the Philippine Islands the
day after the receipt of a certified copy of the Act. The Internal Revenue Law of 1904
(Act No. 1189), repealed all existing laws, ordinances, etc., imposing taxes upon the
persons, objects, or occupations taxed under that act, and all industrial taxes and stamp
taxes imposed under the Spanish regime were eliminated, but the industrial tax was
continued in force until January 1, 1905. This Internal Revenue Law did not take away
from municipal councils, provincial boards, and the Municipal Board of the city of
Manila the power to impose taxes upon real estate. This Act (No. 1189), with its
amendments, was repealed by Act No. 2339, an act "revising and consolidating the laws
relative to internal revenue."
Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing the
validity of a tax assessed under this act until the taxpayer shall have paid, under protest,
the taxes assessed against him, . . . ."
This inhibition was inserted in section 17 of Act No. 83 and applies to taxes imposed by
provincial boards. The inhibition was not inserted in the Manila Charter until the
passage of Act No. 1793, effective October 12, 1907. Act No. 355 expressly makes the
payment of the exactions claimed a condition precedent to a resort to the courts by
dissatisfied importers. Section 52 of Act No. 1189 provides "That no courts shall have

authority to grant an injunction restraining the collection of any taxes imposed by virtue
of the provisions of this Act, but the remedy of the taxpayer who claims that he is
unjustly assessed or taxed shall be by payment under protest of the sum claimed from
him by the Collector of Internal Revenue and by action to recover back the sum claimed
to have been illegally collected."
Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the same
prohibition and remedy. The result is that the courts have been expressly forbidden, in
every act creating or imposing taxes or imposts enacted by the legislative body of the
Philippines since the American occupation, to entertain any suit assailing the validity of
any tax or impost thus imposed until the tax shall have been paid under protest. The
only taxes which have not been brought within the express inhibition were those
included in that part of the old Spanish system which completely disappeared on or
before January 1, 1905, and possibly the old customs duties which disappeared in
February, 1902.
Section 56 of the Organic Act (No. 136), effective June 16, 1901, provides that "Courts of
First Instance shall have original jurisdiction:
xxx

xxx

xxx

2. In all civil actions which involve the ... legality of any tax, impost, or
assessment, . . . .
xxx

xxx

xxx

7. Said courts and their judges, or any of them, shall have 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
Code of Civil Procedure.
The provisions of the Code of Civil Procedure (Act No. 190), effective October 1, 1901,
which deals with the subject of injunctions, are sections 162 to 172, inclusive.
Injunctions, as here defined, are of two kinds; preliminary and final. The former may be
granted at any time after the commencement of the action and before final judgment,
and the latter at the termination of the trial as the relief or part of the relief prayed for
(sec. 162). Any judge of the Supreme Court may grant a preliminary injunction in any
action pending in that court or in any Court of First Instance. A preliminary injunction
may also be granted by a judge of the Court of First Instance in actions pending in his
district in which he has original jurisdiction (sec. 163). But such injunctions may be
granted onlywhen the complaint shows facts entitling the plaintiff to the relief
demanded (sec. 166), and before a final or permanent injunction can be granted, it must
appear upon the trial of the action that the plaintiff is entitled to have commission or
continuance of the acts complained of perpetually restrained (sec. 171). These
provisions authorize the institution in Courts of First Instance of what are known as
"injunction suits," the sole object of which is to obtain the issuance of a final injunction.

They also authorize the granting of injunctions as aiders in ordinary civil actions. We
have defined in Davesa vs. Arbes (13 Phil. Rep., 273), an injunction to be "A "special
remedy" adopted in that code (Act 190) from American practice, and originally
borrowed from English legal procedure, which was there issued by the authority and
under the seal of a court of equity, and limited, as in other cases where equitable relief
is sought, to those cases where there is no "plain, adequate, and complete remedy at
law,"which will not be granted while the rights between the parties are undetermined,
except in extraordinary cases where material and irreparable injury will be done,"which
cannot be compensated in damages . . .
By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of the various
subsequent Acts heretofore mentioned, the Insular Government has consented to
litigate with aggrieved persons the validity of any original tax or impost imposed by it on
condition that this be done in ordinary civil actions after the taxes or exactions shall
have been paid. But it is said that paragraph 2 confers original jurisdiction upon Courts
of First Instance to hear and determine "all civil actions" which involve the validity of
any tax, impost or assessment, and that if the all-inclusive words "all" and "any" be
given their natural and unrestricted meaning, no action wherein that question is
involved can arise over which such courts do not have jurisdiction. (Barrameda vs. Moir,
25 Phil. Rep., 44.) This is true. But the term "civil actions" had its well defined meaning
at the time the paragraph was enacted. The same legislative body which enacted
paragraph 2 on June 16, 1901, had, just a few months prior to that time, defined the
only kind of action in which the legality of any tax imposed by it might be assailed. (Sec.
84, Act 82, enacted January 31, 1901, and sec. 17, Act No. 83, enacted February 6,
1901.) That kind of action being payment of the tax under protest and an ordinary suit
to recover and no other, there can be no doubt that Courts of First Instance have
jurisdiction over all such actions. The subsequent legislation on the same subject shows
clearly that the Commission, in enacting paragraph 2, supra, did not intend to change or
modify in any way section 84 of Act No. 82 and section 17 of Act No. 83, but, on the
contrary, it was intended that "civil actions," mentioned in said paragraph, should be
understood to mean, in so far as testing the legality of taxes were concerned, only those
of the kind and character provided for in the two sections above mentioned. It is also
urged that the power to restrain by injunction the collection of taxes or imposts is
conferred upon Courts of First Instance by paragraph 7 of section 56, supra. This
paragraph does empower those courts to grant injunctions, both preliminary and final,
in any civil action pending in their districts, provided always, that the complaint shows
facts entitling the plaintiff to the relief demanded. Injunction suits, such as the one at
bar, are "civil actions," but of a special or extraordinary character. It cannot be said that
the Commission intended to give a broader or different meaning to the word "action,"
used in Chapter 9 of the Code of Civil Procedure in connection with injunctions, than it
gave to the same word found in paragraph 2 of section 56 of the Organic Act. The
Insular Government, in exercising the power conferred upon it by the Congress of the
United States, has declared that the citizens and residents of this country shall pay
certain specified taxes and imposts. The power to tax necessarily carries with it the
power to collect the taxes. This being true, the weight of authority supports the
proposition that the Government may fix the conditions upon which it will consent to
litigate the validity of its original taxes. (Tennessee vs. Sneed, 96 U.S., 69.)

We must, therefore, conclude that paragraph 2 and 7 of section 56 of Act No. 136,
construed in the light of the prior and subsequent legislation to which we have referred,
and the legislative and judicial history of the same subject in the United States with
which the Commission was familiar, do not empower Courts of firs Instance to interfere
by injunction with the collection of the taxes in question in this case.1awphil.net
If we are in error as to the scope of paragraph 2 and 7, supra, and the Commission did
intend to confer the power upon the courts to restrain the collection of taxes, it does
not necessarily follow that this power or jurisdiction has been taken away by section
139 of Act No. 2339, for the reason that all agree that an injunction will not issue in any
case if there is an adequate remedy at law. The very nature of the writ itself prevents its
issuance under such circumstances. Legislation forbidding the issuing of injunctions in
such cases is unnecessary. So the only question to be here determined is whether the
remedy provided for in section 140 of Act No. 2339 is adequate. If it is, the writs which
form the basis of this appeal should not have been issued. If this is the correct view, the
authority to issue injunctions will not have been taken away by section 139, but
rendered inoperative only by reason of an adequate remedy having been made
available.
The legislative body of the Philippine Islands has declared from the beginning (Act No.
82) that payment under protest and suit to recover is an adequate remedy to test the
legality of any tax or impost, and that this remedy is exclusive. Can we say that the
remedy is not adequate or that it is not exclusive, or both? The plaintiffs in the case at
bar are the first, in so far as we are aware, to question either the adequacy or
exclusiveness of this remedy. We will refer to a few cases in the United States where
statutes similar to sections 139 and 140 have been construed and applied.
In May, 1874, one Bloomstein presented a petition to the circuit court sitting in
Nashville, Tennessee, stating that his real and personal property had been assessed for
state taxes in the year 1872 to the amount of $132.60; that he tendered to the collector
this amount in "funds receivable by law for such purposes;" and that the collector
refused to receive the same. He prayed for an alternative writ of mandamus to compel
the collector to receive the bills in payment for such taxes, or to show cause to the
contrary. To this petition the collector, in his answer, set up the defense that the
petitioner's suit was expressly prohibited by the Act of the General Assembly of the
State of Tennessee, passed in 1873. The petition was dismissed and the relief prayed for
refused. An appeal to the supreme court of the State resulted in the affirmance of the
judgment of the lower court. The case was then carried to the Supreme Court of the
United States (Tennessee vs. Sneed, 96 U. S., 69), where the judgment was again
affirmed.
The two sections of the Act of [March 21,] 1873, drawn in question in that cases, read as
follows:
1. That in all cases in which an officer, charged by law with the collection of
revenue due the State, shall institute any proceeding, or take any steps for the

collection of the same, alleged or claimed to be due by said officer from any
citizen, the party against whom the proceeding or step is taken shall, if he
conceives the same to be unjust or illegal, or against any statute or clause of
the Constitution of the State, pay the same under protest; and, upon his
making said payment, the officer or collector shall pay such revenue into the
State Treasury, giving notice at the time of payment to the Comptroller that the
same was paid under protest; and the party paying said revenue may, at any
time within thirty days after making said payment, and not longer thereafter,
sue the said officer having collected said sum, for the recovery thereof. And the
same may be tried in any court having the jurisdiction of the amount and
parties; and, if it be determined that the same was wrongfully collected, as not
being due from said party to the State, for any reason going to the merits of the
same, then the court trying the case may certify of record that the same was
wrongfully paid and ought to be refunded; and thereupon the Comptroller shall
issue his warrant for the same, which shall be paid in preference to other
claims on the Treasury.
2. That there shall be no other remedy, in any case of the collection of revenue,
or attempt to collect revenue illegally, or attempt to collect revenue in funds
only receivable by said officer under the law, the same being other or different
funds than such as the tax payer may tender, or claim the right to pay, than
that above provided; and no writ for the prevention of the collection of any
revenue claimed, or to hinder or delay the collection of the same, shall in
anywise issue, either injunction, supersedeas, prohibition, or any other writ or
process whatever; but in all cases in which, for any reason, any person shall
claim that the tax so collected was wrongfully or illegally collected, the remedy
for said party shall be as above provided, and in no other manner."
In discussing the adequacy of the remedy provided by the Tennessee Legislature, as
above set forth, the Supreme Court of the United States, in the case just cited, said:
"This remedy is simple and effective. A suit at law to recover money unlawfully exacted
is as speedy, as easily tried, and less complicated than a proceeding bymandamus. ... In
revenue cases, whether arising upon its (United States) Internal Revenue Laws or those
providing for the collection of duties upon foreign imports, it (United States) adopts the
rule prescribed by the State of Tennessee. It requires the contestant to pay the amount
as fixed by the Government, and gives him power to sue the collector, and in such suit
to test the legality of the tax. There is nothing illegal or even harsh in this. It is a wise
and reasonable precaution for the security of the Government."
Thomas C. Platt commenced an action in the Circuit Court of the United States for the
Eastern District of Tennessee to restrain the collection of a license tax from the
company which he represented. The defense was that sections 1 and 2 of the Act of
1873, supra, prohibited the bringing of that suit. This case also reached the Supreme
Court of the United States. (Shelton vs. Platt, 139 U. 591.) In speaking of the inhibitory
provisions of sections 1 and 2 of the Act of 1873, the court said: "This Act has been
sanctioned and applied by the Courts of Tennessee. (Nashville vs. Smith, 86 Tenn., 213;

Louisville & N. R. Co. vs. State, 8 Heisk., 663, 804.) It is, as counsel observe, similar to the
Act of Congress forbidding suit for the purpose of restraining the assessment or
collection of taxes under the Internal Revenue Laws, in respect to which this court held
that the remedy by suit to recover back the tax after payment, provided for by the
Statute, was exclusive. (Snyder vs. Marks, of this character has been called for by the
embarrassments resulting from the improvident employment of the writ of injunction in
arresting the collection of the public revenue; and, even in its absence, the strong arm
of the court of chancery ought not to be interposed in that direction except where
resort to that court is grounded upon the settled principles which govern its
jurisdiction."
In Louisville & N.R. Co. vs. State (8 Heisk. [64 Tenn.], 663, 804), cited by the Supreme
Court of the United States in Shelton vs. Platt, supra, the court said: "It was urged that
this statute (sections 1 and 2 of the Act of 1873,supra) is unconstitutional and void, as it
deprives the citizen of the remedy by certiorari, guaranteed by the organic law."
By the 10th section of the sixth article of the Constitution, [Tennessee] it is provided
that: "The judges or justices of inferior courts of law and equity shall have power in all
civil cases to issue writs of certiorari, to remove any cause, or the transcript of the
record thereof, from any inferior jurisdiction into such court of law, on sufficient cause,
supported by oath or affirmation."
The court held the act valid as not being in conflict with these provisions of the State
constitution.
In Eddy vs. The Township of Lee (73 Mich., 123), the complainants sought to enjoin the
collection of certain taxes for the year 1886. The defendants, in support of their
demurrer, insisted that the remedy by injunction had been taken away by section 107 of
the Act of 1885, which section reads as follows: "No injunction shall issue to stay
proceedings for the assessment or collection of taxes under this Act."
It was claimed by the complainants that the above quoted provisions of the Act of 1885
were unconstitutional and void as being in conflict with article 6, sec. 8, of the
Constitution, which provides that: "The circuit courts shall have original jurisdiction in all
matters, civil and criminal, not excepted in this Constitution, and not prohibited by law.
... They shall also have power to issue writs of habeas corpus, mandamus,
injunction, quo warranto, certiorari, and other writs necessary to carry into effect their
orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court, said: "I have no doubt that the Legislature
has the constitutional authority, where it has provided a plain, adequate, and complete
remedy at law to recover back taxes illegally assessed and collected, to take away the
remedy by injunction to restrain their collection."
Section 9 of the Philippine Bill reads in part as follows: "That the Supreme Court and the
Courts of First Instance of the Philippine Islands shall possess and exercise jurisdiction as

heretofore provided and such additional jurisdiction as shall hereafter be prescribed by

the Government of said Islands, subject to the power of said Government to change the
practice and method of procedure."

business as to collect from him a tax of equal amount. This is not what is known to the
law as irreparable injury. The courts have never recognized the consequences of the
mere enforcement of a money demand as falling within that category."

It will be seen that this section has not taken away from the Philippine Government the
power to change the practice and method of procedure. If sections 139 and 140,
considered together, and this must always be done, are nothing more than a mode of
procedure, then it would seem that the Legislature did not exceed its constitutional
authority in enacting them. Conceding for the moment that the duly authorized
procedure for the determination of the validity of any tax, impost, or assessment was by
injunction suits and that this method was available to aggrieved taxpayers prior to the
passage of Act No. 2339, may the Legislature change this method of procedure? That
the Legislature has the power to do this, there can be no doubt, provided some other
adequate remedy is substituted in lieu thereof. In speaking of the modes of enforcing
rights created by contracts, the Supreme Court of the United States, in
Tennessee vs. Sneed, supra, said: "The rule seems to be that in modes of proceedings
and of forms to enforce the contract the Legislature has the control, and may enlarge,
limit or alter them, provided that it does not deny a remedy, or so embarrass it with
conditions and restrictions as seriously to impair the value of the right."

Certain specified sections of Act No. 2339 were amended by Act No. 2432, enacted
December 23, 1914, effective January 1, 1915, by imposing increased and additional
taxes. Act No. 2432 was amended, were ratified by the Congress of the United States on
March 4, 1915. The opposition manifested against the taxes imposed by Acts Nos. 2339
and 2432 is a matter of local history. A great many business men thought the taxes thus
imposed were too high. If the collection of the new taxes on signs, signboards, and
billboards may be restrained, we see no well-founded reason why injunctions cannot be
granted restraining the collection of all or at least a number of the other increased
taxes. The fact that this may be done, shows the wisdom of the Legislature in denying
the use of the writ of injunction to restrain the collection of any tax imposed by the
Acts. When this was done, an equitable remedy was made available to all dissatisfied
taxpayers.

In that case the petitioner urged that the Acts of 1873 were laws impairing the
obligation of the contract contained in the charter of the Bank of Tennessee, which
contract was entered into with the State in 1838. It was claimed that this was done by
placing such impediments and obstructions in the way of its enforcement, thereby so
impairing the remedies as practically to render the obligation of no value. In disposing of
this contention, the court said: "If we assume that prior to 1873 the relator had
authority to prosecute his claim against the State bymandamus, and that by the statutes
of that year the further use of that form was prohibited to him, the question remains.
whether an effectual remedy was left to him or provided for him. We think the
regulation of the statute gave him an abundant means of enforcing such right as he
possessed. It provided that he might pay his claim to the collector under protest, giving
notice thereof to the Comptroller of the Treasury; that at any time within thirty days
thereafter he might sue the officer making the collection; that the case should be tried
by any court having jurisdiction and, if found in favor of the plaintiff on the merits, the
court should certify that the same was wrongfully paid and ought to be refunded and
the Comptroller should thereupon issue his warrant therefor, which should be paid in
preference to other claim on the Treasury."
But great stress is laid upon the fact that the plaintiffs in the case under consideration
are unable to pay the taxes assessed against them and that if the law is enforced, they
will be compelled to suspend business. This point may be best answered by quoting
from the case of Youngblood vs. Sexton (32 Mich., 406), wherein Judge Cooley, speaking
for the court, said: "But if this consideration is sufficient to justify the transfer of a
controversy from a court of law to a court of equity, then every controversy where
money is demanded may be made the subject of equitable cognizance. To enforce
against a dealer a promissory note may in some cases as effectually break up his

The question now arises whether, the case being one of which the court below had no
jurisdiction, this court, on appeal, shall proceed to express an opinion upon the validity
of provisions of subsection (b) of section 100 of Act No. 2339, imposing the taxes
complained of. As a general rule, an opinion on the merits of a controversy ought to be
declined when the court is powerless to give the relief demanded. But it is claimed that
this case is, in many particulars, exceptional. It is true that it has been argued on the
merits, and there is no reason for any suggestion or suspicion that it is not a bona fide
controversy. The legal points involved in the merits have been presented with force,
clearness, and great ability by the learned counsel of both sides. If the law assailed were
still in force, we would feel that an opinion on its validity would be justifiable, but, as the
amendment became effective on January 1, 1915, we think it advisable to proceed no
further with this branch of the case.
The next question arises in connection with the supplementary complaint, the object of
which is to enjoin the Collector of Internal Revenue from removing certain billboards,
the property of the plaintiffs located upon private lands in the Province of Rizal. The
plaintiffs allege that the billboards here in question "in no sense constitute a nuisance
and are not deleterious to the health, morals, or general welfare of the community, or
of any persons." The defendant denies these allegations in his answer and claims that
after due investigation made upon the complaints of the British and German Consuls, he
"decided that the billboard complained of was and still is offensive to the sight, and is
otherwise a nuisance." The plaintiffs proved by Mr. Churchill that the "billboards were
quite a distance from the road and that they were strongly built, not dangerous to the
safety of the people, and contained no advertising matter which is filthy, indecent, or
deleterious to the morals of the community." The defendant presented no testimony
upon this point. In the agreed statement of facts submitted by the parties, the plaintiffs
"admit that the billboards mentioned were and still are offensive to the sight."

The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If after
due investigation the Collector of Internal Revenue shall decide that any sign, signboard,
or billboard displayed or exposed to public view is offensive to the sight or is otherwise
a nuisance, he may by summary order direct the removal of such sign, signboard, or
billboard, and if same is not removed within ten days after he has issued such order he
my himself cause its removal, and the sign, signboard, or billboard shall thereupon be
forfeited to the Government, and the owner thereof charged with the expenses of the
removal so effected. When the sign, signboard, or billboard ordered to be removed as
herein provided shall not comply with the provisions of the general regulations of the
Collector of Internal Revenue, no rebate or refund shall be allowed for any portion of a
year for which the tax may have been paid. Otherwise, the Collector of Internal Revenue
may in his discretion make a proportionate refund of the tax for the portion of the year
remaining for which the taxes were paid. An appeal may be had from the order of the
Collector of Internal Revenue to the Secretary of Finance and Justice whose decision
thereon shall be final."
The Attorney-General, on behalf of the defendant, says: "The question which the case
presents under this head for determination, resolves itself into this inquiry: Is the
suppression of advertising signs displayed or exposed to public view, which are
admittedly offensive to the sight, conducive to the public interest?"
And cunsel for the plaintiffs states the question thus: "We contend that that portion of
section 100 of Act No. 2339, empowering the Collector of Internal Revenue to remove
billboards as nuisances, if objectionable to the sight, is unconstitutional, as constituting
a deprivation of property without due process of law."
From the position taken by counsel for both sides, it is clear that our inquiry is limited to
the question whether the enactment assailed by the plaintiffs was a legitimate exercise
of the police power of the Government; for all property is held subject to that power.
As a consequence of the foregoing, all discussion and authorities cited, which go to the
power of the state to authorize administrative officers to find, as a fact, that legitimate
trades, callings, and businesses are, under certain circumstances, statutory nuisances,
and whether the procedure prescribed for this purpose is due process of law, are
foreign to the issue here presented.
There can be no doubt that the exercise of the police power of the Philippine
Government belongs to the Legislature and that this power is limited only by the Acts of
Congress and those fundamentals principles which lie at the foundation of all republican
forms of government. An Act of the Legislature which is obviously and undoubtedly
foreign to any of the purposes of the police power and interferes with the ordinary
enjoyment of property would, without doubt, be held to be invalid. But where the Act is
reasonably within a proper consideration of and care for the public health, safety, or
comfort, it should not be disturbed by the courts. The courts cannot substitute their
own views for what is proper in the premises for those of the Legislature. In
Munn vs. Illinois (94 U.S., 113), the United States Supreme Court states the rule thus: "If

no state of circumstances could exist to justify such statute, then we may declare this
one void because in excess of the legislative power of this state; but if it could, we must
presume it did. Of the propriety of legislative interference, within the scope of the
legislative power, a legislature is the exclusive judge."
This rule very fully discussed and declared in Powell vs. Pennsylvania (127 U.S., 678)
"oleo-margarine" case. (See also Crowley vs. Christensen, 137 U.S., 86, 87;
Camfield vs. U.S., 167 U.S., 518.) While the state may interfere wherever the public
interests demand it, and in this particular a large discretion is necessarily vested in the
legislature to determine, not only what the interest of the public require, but what
measures are necessary for the protection of such interests; yet, its determination in
these matters is not final or conclusive, but is subject to the supervision of the courts.
(Lawton vs. Steele, 152 U.S., 133.) Can it be said judicially that signs, signboards, and
billboards, which are admittedly offensive to the sight, are not with the category of
things which interfere with the public safety, welfare, and comfort, and therefore
beyond the reach of the police power of the Philippine Government?
The numerous attempts which have been made to limit by definition the scope of the
police power are only interesting as illustrating its rapid extension within comparatively
recent years to points heretofore deemed entirely within the field of private liberty and
property rights. Blackstone's definition of the police power was as follows: "The due
regulation and domestic order of the kingdom, whereby the individuals of the state, like
members of a well governed family, are bound to conform their general behavior to the
rules of propriety, good neigborhood, and good manners, to be decent, industrious, and
inoffensive in their respective stations." (Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the authority of the state "to regulate
unwholesome trades, slaughter houses, operations offensive to the senses." Chief
Justice Shaw of Massachusetts defined it as follows: "The power vested in the legislature
by the constitution to make, ordain, and establish all manner of wholesome and
reasonable laws, statutes, and ordinances, either with penalties or without, not
repugnant to the constitution, as they shall judge to be for the good and welfare of the
commonwealth, and of the subjects of the same." (Com.vs. Alger, 7 Cush., 53.)
In the case of Butchers' Union Slaughter-house, etc. Co. vs. Crescent City Live Stock
Landing, etc. Co. (111 U.S., 746), it was suggested that the public health and public
morals are matters of legislative concern of which the legislature cannot divest itself.
(See State vs. Mountain Timber Co. [1913], 75 Wash., 581, where these definitions are
collated.)
In Champer vs. Greencastle (138 Ind., 339), it was said: "The police power of the State,
so far, has not received a full and complete definition. It may be said, however, to be the
right of the State, or state functionary, to prescribe regulations for the good order,
peace, health, protection, comfort, convenience and morals of the community, which do
not ... violate any of the provisions of the organic law." (Quoted with approval in
Hopkins vs. Richmond [Va., 1915], 86 S.E., 139.)

In Com. vs. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The police power of
the state is difficult of definition, but it has been held by the courts to be the right to
prescribe regulations for the good order, peace, health, protection, comfort,
convenience and morals of the community, which does not encroach on a like power
vested in congress or state legislatures by the federal constitution, or does not violate
the provisions of the organic law; and it has been expressly held that the fourteenth
amendment to the federal constitution was not designed to interfere with the exercise
of that power by the state."
In People vs. Brazee ([Mich., 1914], 149 N.W., 1053), it was said: "It [the police power]
has for its object the improvement of social and economic conditioned affecting the
community at large and collectively with a view to bring about "he greatest good of the
greatest number."Courts have consistently and wisely declined to set any fixed
limitations upon subjects calling for the exercise of this power. It is elastic and is
exercised from time to time as varying social conditions demand correction."
In 8 Cyc., 863, it is said: "Police power is the name given to that inherent sovereignty
which it is the right and duty of the government or its agents to exercise whenever
public policy, in a broad sense, demands, for the benefit of society at large, regulations
to guard its morals, safety, health, order or to insure in any respect such economic
conditions as an advancing civilization of a high complex character requires." (As quoted
with approval in Stettlervs. O'Hara [1914], 69 Ore, 519.)
Finally, the Supreme Court of the United States has said in Noble State Bank vs. Haskell
(219 U.S. [1911], 575: "It may be said in a general way that the police power extends to
all the great public needs. It may be put forth in aid of what is sanctioned by usage, or
held by the prevailing morality or strong and preponderant opinion to be greatly and
immediately necessary to the public welfare."
This statement, recent as it is, has been quoted with approval by several courts.
(Cunningham vs. Northwestern Imp. Co. [1911], 44 Mont., 180; State vs. Mountain
Timber Co. [1913], 75 Wash., 581; McDavid vs. Bank of Bay Minette [Ala., 1915], 69
Sou., 452; Hopkins vs. City of Richmond [Va., 1915], 86 S.E., 139; State vs. Philipps [Miss.
1915], 67 Sou., 651.)
It was said in Com. vs. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is much easier to
perceive and realize the existence and sources of this police power than to mark its
boundaries, or to prescribe limits to its exercise." In Stone vs. Mississippi (101 U.S., 814),
it was said: "Many attempts have been made in this court and elsewhere to define the
police power, but never with entire success. It is always easier to determine whether a
particular case comes within the general scope of the power, than to give an abstract
definition of the power itself, which will be in all respects accurate."
Other courts have held the same vow of efforts to evolve a satisfactory definition of the
police power. Manifestly, definitions which fail to anticipate cases properly within the
scope of the police power are deficient. It is necessary, therefore, to confine our

discussion to the principle involved and determine whether the cases as they come up
are within that principle. The basic idea of civil polity in the United States is that
government should interfere with individual effort only to the extent necessary to
preserve a healthy social and economic condition of the country. State interference with
the use of private property may be exercised in three ways. First, through the power of
taxation, second, through the power of eminent domain, and third, through the police
power. Buy the first method it is assumed that the individual receives the equivalent of
the tax in the form of protection and benefit he receives from the government as such.
By the second method he receives the market value of the property taken from him. But
under the third method the benefits he derived are only such as may arise from the
maintenance of a healthy economic standard of society and is often referred to
as damnum absque injuria. (Com. vs. Plymouth Coal Co. 232 Pa., 141; Bemis vs. Guirl
Drainage Co., 182 Ind., 36.) There was a time when state interference with the use of
private property under the guise of the police power was practically confined to the
suppression of common nuisances. At the present day, however, industry is organized
along lines which make it possible for large combinations of capital to profit at the
expense of the socio-economic progress of the nation by controlling prices and dictating
to industrial workers wages and conditions of labor. Not only this but the universal use
of mechanical contrivances by producers and common carriers has enormously
increased the toll of human life and limb in the production and distribution of
consumption goods. To the extent that these businesses affect not only the public
health, safety, and morals, but also the general social and economic life of the nation, it
has been and will continue to be necessary for the state to interfere by regulation. By so
doing, it is true that the enjoyment of private property is interfered with in no small
degree and in ways that would have been considered entirely unnecessary in years gone
by. The regulation of rates charged by common carriers, for instance, or the limitation of
hours of work in industrial establishments have only a very indirect bearing upon the
public health, safety, and morals, but do bear directly upon social and economic
conditions. To permit each individual unit of society to feel that his industry will bring a
fair return; to see that his work shall be done under conditions that will not either
immediately or eventually ruin his health; to prevent the artificial inflation of prices of
the things which are necessary for his physical well being are matters which the
individual is no longer capable of attending to himself. It is within the province of the
police power to render assistance to the people to the extent that may be necessary to
safeguard these rights. Hence, laws providing for the regulation of wages and hours of
labor of coal miners (Rail & River Coal Co. vs. Taylor, 234 U.S., 224); requiring payment
of employees of railroads and other industrial concerns in legal tender and requiring
salaries to be paid semimonthly (Erie R.R. Co. vs. Williams, 233 U.S., 685); providing a
maximum number of hours of labor for women (Miller vs. Wilson, U.S. Sup. Ct. [Feb. 23,
1915], Adv. Opns., p. 342); prohibiting child labor (Sturges & Burn vs. Beauchamp, 231
U.S., 320); restricting the hours of labor in public laundries (In re Wong Wing, 167 Cal.,
109); limiting hours of labor in industrial establishment generally (State vs. Bunting, 71
Ore., 259); Sunday Closing Laws (State vs. Nicholls [Ore., 1915], 151 Pac., 473;
People vs. C. Klinck Packing Co. [N.Y., 1915], 108 N. E., 278; Hiller vs. State [Md., 1914],
92 Atl., 842; State vs.Penny, 42 Mont., 118; City of Springfield vs. Richter, 257 Ill., 578,
580; State vs. Hondros [S.C., 1915], 84 S.E., 781); have all been upheld as a valid exercise
of the police power. Again, workmen's compensation laws have been quite generally

upheld. These statutes discard the common law theory that employers are not liable for
industrial accidents and make them responsible for all accidents resulting from trade
risks, it being considered that such accidents are a legitimate charge against production
and that the employer by controlling the prices of his product may shift the burden to
the community. Laws requiring state banks to join in establishing a depositors'
guarantee fund have also been upheld by the Federal Supreme Court in Noble State
Bank vs. Haskell (219 U. S., 104), and Assaria State Bank vs. Dolley (219 U.S., 121).
Offensive noises and smells have been for a long time considered susceptible of
suppression in thickly populated districts. Barring livery stables from such locations was
approved of in Reinman vs. Little Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S. Adv. Opns., p.
511). And a municipal ordinance was recently upheld (People vs. Ericsson, 263 Ill., 368),
which prohibited the location of garages within two hundred feet of any hospital,
church, or school, or in any block used exclusively for residential purposes, unless the
consent of the majority of the property owners be obtained. Such statutes as these are
usually upheld on the theory of safeguarding the public health. But we apprehend that
in point of fact they have little bearing upon the health of the normal person, but a
great deal to do with his physical comfort and convenience and not a little to do with his
peace of mind. Without entering into the realm of psychology, we think it quite
demonstrable that sight is as valuable to a human being as any of his other senses, and
that the proper ministration to this sense conduces as much to his contentment as the
care bestowed upon the senses of hearing or smell, and probably as much as both
together. Objects may be offensive to the eye as well as to the nose or ear. Man's
esthetic feelings are constantly being appealed to through his sense of sight. Large
investments have been made in theaters and other forms of amusement, in paintings
and spectacular displays, the success of which depends in great part upon the appeal
made through the sense of sight. Moving picture shows could not possible without the
sense of sight. Governments have spent millions on parks and boulevards and other
forms of civic beauty, the first aim of which is to appeal to the sense of sight. Why, then,
should the Government not interpose to protect from annoyance this most valuable of
man's senses as readily as to protect him from offensive noises and smells?
The advertising industry is a legitimate one. It is at the same time a cause and an effect
of the great industrial age through which the world is now passing. Millions are spent
each year in this manner to guide the consumer to the articles which he needs. The
sense of sight is the primary essential to advertising success. Billboard advertising, as it
is now conducted, is a comparatively recent form of advertising. It is conducted out of
doors and along the arteries of travel, and compels attention by the strategic locations
of the boards, which obstruct the range of vision at points where travelers are most
likely to direct their eyes. Beautiful landscapes are marred or may not be seen at all by
the traveler because of the gaudy array of posters announcing a particular kind of
breakfast food, or underwear, the coming of a circus, an incomparable soap, nostrums
or medicines for the curing of all the ills to which the flesh is heir, etc. It is quite natural
for people to protest against this indiscriminate and wholesale use of the landscape by
advertisers and the intrusion of tradesmen upon their hours of leisure and relaxation
from work. Outdoor life must lose much of its charm and pleasure if this form of

advertising is permitted to continue unhampered until it converts the streets and

highways into veritable canyons through which the world must travel in going to work
or in search of outdoor pleasure.
The success of billboard advertising depends not so much upon the use of private
property as it does upon the use of the channels of travel used by the general public.
Suppose that the owner of private property, who so vigorously objects to the restriction
of this form of advertising, should require the advertiser to paste his posters upon the
billboards so that they would face the interior of the property instead of the exterior.
Billboard advertising would die a natural death if this were done, and its real
dependency not upon the unrestricted use of private property but upon the
unrestricted use of the public highways is at once apparent. Ostensibly located on
private property, the real and sole value of the billboard is its proximity to the public
thoroughfares. Hence, we conceive that the regulation of billboards and their restriction
is not so much a regulation of private property as it is a regulation of the use of the
streets and other public thoroughfares.
We would not be understood as saying that billboard advertising is not a legitimate
business any more than we would say that a livery stable or an automobile garage is
not. Even a billboard is more sightly than piles of rubbish or an open sewer. But all these
businesses are offensive to the senses under certain conditions.
It has been urged against ministering to the sense of sight that tastes are so diversified
that there is no safe standard of legislation in this direction. We answer in the language
of the Supreme Court in Noble State Bank vs.Haskell (219 U.S., 104), and which has
already been adopted by several state courts (see supra), that "the prevailing morality
or strong and preponderating opinion" demands such legislation. The agitation against
the unrestrained development of the billboard business has produced results in nearly
all the countries of Europe. (Ency. Britannica, vol. 1, pp. 237-240.) Many drastic
ordinances and state laws have been passed in the United States seeking to make the
business amenable to regulation. But their regulation in the United states is hampered
by what we conceive an unwarranted restriction upon the scope of the police power by
the courts. If the police power may be exercised to encourage a healthy social and
economic condition in the country, and if the comfort and convenience of the people
are included within those subjects, everything which encroaches upon such territory is
amenable to the police power. A source of annoyance and irritation to the public does
not minister to the comfort and convenience of the public. And we are of the opinion
that the prevailing sentiment is manifestly against the erection of billboards which are
offensive to the sight.
We do not consider that we are in conflict with the decision in Eubank vs. Richmond
(226 U.S., 137), where a municipal ordinance establishing a building line to which
property owners must conform was held unconstitutional. As we have pointed out,
billboard advertising is not so much a use of private property as it is a use of the public
thoroughfares. It derives its value to the power solely because the posters are exposed
to the public gaze. It may well be that the state may not require private property owners

to conform to a building line, but may prescribe the conditions under which they shall
make use of the adjoining streets and highways. Nor is the law in question to be held
invalid as denying equal protection of the laws. In Keokee Coke Co. vs. Taylor (234 U.S.,
224), it was said: "It is more pressed that the act discriminates unconstitutionally against
certain classes. But while there are differences of opinion as to the degree and kind of
discrimination permitted by the Fourteenth Amendment, it is established by repeated
decisions that a statute aimed at what is deemed an evil, and hitting it presumably
where experience shows it to be most felt, is not to be upset by thinking up and
enumerating other instances to which it might have been applied equally well, so far as
the court can see. That is for the legislature to judge unless the case is very clear."
But we have not overlooked the fact that we are not in harmony with the highest courts
of a number of the states in the American Union upon this point. Those courts being of
the opinion that statutes which are prompted and inspired by esthetic considerations
merely, having for their sole purpose the promotion and gratification of the esthetic
sense, and not the promotion or protection of the public safety, the public peace and
good order of society, must be held invalid and contrary to constitutional provisions
holding inviolate the rights of private property. Or, in other words, the police power
cannot interfere with private property rights for purely esthetic purposes. The courts,
taking this view, rest their decisions upon the proposition that the esthetic sense is
disassociated entirely from any relation to the public health, morals, comfort, or general
welfare and is, therefore, beyond the police power of the state. But we are of the
opinion, as above indicated, that unsightly advertisements or signs, signboards, or
billboards which are offensive to the sight, are not disassociated from the general
welfare of the public. This is not establishing a new principle, but carrying a well
recognized principle to further application. (Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment appealed from is hereby reversed and the
action dismissed upon the merits, with costs. So ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.
TRENT, J.:
Counsel for the plaintiffs call our attention to the case of Ex parte Young (209 U.S., 123);
and say that they are of the opinion that this case "is the absolutely determinative of
the question of jurisdiction in injunctions of this kind." We did not refer to this case in
our former opinion because we were satisfied that the reasoning of the case is not
applicable to section 100 (b), 139 and 140 of Act No. 2339. The principles announced in
the Young case are stated as follows: "It may therefore be said that when the penalties
for disobedience are by fines so enormous and imprisonment so severe as to intimidate
the company and its officers from resorting to the courts to test the validity of the
legislation, the result is the same as if the law in terms prohibited the company from
seeking judicial construction of laws which deeply affect its rights.

It is urged that there is no principle upon which to base the claim that a person
is entitled to disobey a statute at least once, for the purpose of testing its
validity without subjecting himself to the penalties for disobedience provided
by the statute in case it is valid. This is not an accurate statement of the case.
Ordinarily a law creating offenses in the nature of misdemeanors or felonies
relates to a subject over which the jurisdiction of the legislature is complete in
any event. In these case, however, of the establishment of certain rates
without any hearing, the validity of such rates necessarily depends upon
whether they are high enough to permit at least some return upon the
investment (how much it is not now necessary to state), and an inquiry as to
that fact is a proper subject of judicial investigation. If it turns out that the rates
are too low for that purpose, then they are illegal. Now, to impose upon a party
interested the burden of obtaining a judicial decision of such a question (no
prior hearing having ever been given) only upon the condition that, if
unsuccessful, he must suffer imprisonment and pay fines as provided in these
acts, is, in effect, to close up all approaches to the courts, and thus prevent any
hearing upon the question whether the rates as provided by the acts are not
too low, and therefore invalid. The distinction is obvious between a case where
the validity of the acts depends upon the existence of a fact which can be
determined only after investigation of a very complicated and technical
character, and the ordinary case of a statute upon a subject requiring no such
investigation and over which the jurisdiction of the legislature is complete in
any event.
An examination of the sections of our Internal Revenue Law and of the circumstances
under which and the purposes for which they were enacted, will show that, unlike the
statutes under consideration in the above cited case, their enactment involved no
attempt on the part of the Legislature to prevent dissatisfied taxpayers "from resorting
to the courts to test the validity of the legislation;" no effort to prevent any inquiry as to
their validity. While section 139 does prevent the testing of the validity of subsection (b)
of section 100 in injunction suits instituted for the purpose of restraining the collection
of internal revenue taxes, section 140 provides a complete remedy for that purpose.
And furthermore, the validity of subsection (b) does not depend upon "the existence of
a fact which can be determined only after investigation of a very complicated and
technical character," but the jurisdiction of the Legislature over the subject with which
the subsection deals "is complete in any event." The judgment of the court in the Young
case rests upon the proposition that the aggrieved parties had no adequate remedy at
law.
Neither did we overlook the case of General Oil Co. vs. Crain (209 U.S., 211),
decided the same day and citing Ex parte Young, supra. In that case the plaintiff
was a Tennessee corporation, with its principal place of business in Memphis,
Tennessee. It was engaged in the manufacture and sale of coal oil, etc. Its wells
and plant were located in Pennsylvania and Ohio. Memphis was not only its
place of business, at which place it sold oil to the residents of Tennessee, but
also a distributing point to which oils were shipped from Pennsylvania and Ohio

and unloaded into various tanks for the purpose of being forwarded to the
Arkansas, Louisiana, and Mississippi customers. Notwithstanding the fact that
the company separated its oils, which were designated to meet the
requirements of the orders from those States, from the oils for sale in
Tennessee, the defendant insisted that he had a right, under the Act of the
Tennessee Legislature, approved April 21, 1899, to inspect all the oils unlocated
in Memphis, whether for sale in that State or not, and charge and collect for
such inspection a regular fee of twenty-five cents per barrel. The company,
being advised that the defendant had no such right, instituted this action in the
inferior States court for the purpose of enjoining the defendant, upon the
grounds stated in the bill, from inspecting or attempting to inspect its oils.
Upon trial, the preliminary injunction which had been granted at the
commencement of the action, was continued in force. Upon appeal, the
supreme court of the State of Tennessee decided that the suit was one against
the State and reversed the judgment of the Chancellor. In the Supreme Court
of the United States, where the case was reviewed upon a writ of error, the
contentions of the parties were stated by the court as follows: "It is contended
by defendant in error that this court is without jurisdiction because no matter
sought to be litigated by plaintiff in error was determined by the Supreme
Court of Tennessee. The court simply held, it is paid, that, under the laws of the
State, it had no jurisdiction to entertain the suit for any purpose. And it is
insisted "hat this holding involved no Federal question, but only the powers
and jurisdiction of the courts of the State of Tennessee, in respect to which the
Supreme Court of Tennessee is the final arbiter."
Opposing these contentions, plaintiff in error urges that whether a suit is one
against a State cannot depend upon the declaration of a statute, but depends
upon the essential nature ofthe suit, and that the Supreme Court recognized
that the statute "aded nothing to the axiomatic principle that the State, as a
sovereign, is not subject to suit save by its own consent."And it is hence
insisted that the court by dismissing the bill gave effect to the law which was
attacked. It is further insisted that the bill undoubtedly present rights under the
Constitution of the United States and conditions which entitle plaintiff in error
to an injunction for the protection of such rights, and that a statute of the State
which operates to deny such rights, or such relief, `is itself in conflict with the
Constitution of the United States."
That statute of Tennessee, which the supreme court of that State construed and held to
be prohibitory of the suit, was an act passed February 28, 1873, which provides: "That
no court in the State of Tennessee has, nor shall hereafter have, any power, jurisdiction,
or authority to entertain any suit against the State, or any officer acting by the authority
of the State, with a view to reach the State, its treasury, funds or property; and all such
suits now pending, or hereafter brought, shall be dismissed as to the State, or such
officer, on motion, plea or demurrer of the law officer of the State, or counsel employed
by the State."

The Supreme Court of the United States, after reviewing many cases, said: "Necessarily,
to give adequate protection to constitutional rights a distinction must be made between
valid and invalid state laws, as determining the character of the suit against state
officers. And the suit at bar illustrates the necessity. If a suit against state officer is
precluded in the national courts by the Eleventh Amendment to the Constitution, and
may be forbidden by a State to its courts, as it is contended in the case at bar that it may
be, without power of review by this court, it must be evident that an easy way is open to
prevent the enforcement of many provisions of the Constitution; and the Fourteenth
Amendment, which is directed at state action, could be nullified as to much of its
operation. ... It being then the right of a party to be protected against a law which
violates a constitutional right, whether by its terms or the manner of its enforcement, it
is manifest that a decision which denies such protection gives effect to the law, and the
decision is reviewable by this court."
The court then proceeded to consider whether the law of 1899 would, if administered
against the oils in question, violate any constitutional right of the plaintiff and after
finding and adjudging that the oils were not in movement through the States, that they
had reached the destination of their first shipment, and were held there, not in
necessary delay at means of transportation but for the business purposes and profit of
the company, and resting its judgment upon the taxing power of the State, affirmed the
decree of the supreme court of the State of Tennessee.
From the foregoing it will be seen that the Supreme Court of Tennessee dismissed the
case for want of jurisdiction because the suit was one against the State, which was
prohibited by the Tennessee Legislature. The Supreme Court of the United States took
jurisdiction of the controversy for the reasons above quoted and sustained the Act of
1899 as a revenue law.
The case of Tennessee vs. Sneed (96 U.S., 69), and Shelton vs. Platt (139 U.S., 591),
relied upon in our former opinion, were not cited in General Oil Co. vs. Crain, supra,
because the questions presented and the statutes under consideration were entirely
different. The Act approved March 31, 1873, expressly prohibits the courts from
restraining the collection of any tax, leaving the dissatisfied taxpayer to his exclusive
remedy payment under protest and suit to recover while the Act approved
February 28, 1873, prohibits suits against the State.
In upholding the statute which authorizes the removal of signboards or billboards upon
the sole ground that they are offensive to the sight, we recognized the fact that we are
not in harmony with various state courts in the American Union. We have just examined
the decision of the Supreme Court of the State of Illinois in the recent case (October
[December], 1914) of Thomas Cusack Co. vs. City of Chicago (267 Ill., 344), wherein the
court upheld the validity of a municipal ordinances, which reads as follows:
"707. Frontage consents required. It shall be unlawful for any person, firm or
corporation to erect or construct any bill-board or sign-board in any block on any public
street in which one-half of the buildings on both sides of the street are used exclusively
for residence purposes, without first obtaining the consent, in writing, of the owners or

duly authorized agents of said owners owning a majority of the frontage of the
property, on both sides of the street, in the block in which such bill-board or sign-board
is to be erected, constructed or located. Such written consent shall be filed with the
commissioner of buildings before a permit shall be issued for the erection, construction
or location of such bill-board or sign-board."

and which are attractive not only to the residents of the country but to visitors. If the
billboard industry is permitted without constraint or control to hide these historic sites
from the passerby, the country will be less attractive to the tourist and the people will
suffer a district economic loss.
The motion for a rehearing is therefore denied.

The evidence which the Illinois court relied upon was the danger of fires, the fact that
billboards promote the commission of various immoral and filthy acts by disorderly
persons, and the inadequate police protection furnished to residential districts. The last
objection has no virtue unless one or the other of the other objections are valid. If the
billboard industry does, in fact, promote such municipal evils to noticeable extent, it
seems a curious inconsistency that a majority of the property owners on a given block
may legalize the business. However, the decision is undoubtedly a considerable advance
over the views taken by other high courts in the United States and distinguishes several
Illinois decisions. It is an advance because it permits the suppression of billboards where
they are undesirable. The ordinance which the court approved will no doubt cause the
virtual suppression of the business in the residential districts. Hence, it is recognized
that under certain circumstances billboards may be suppressed as an unlawful use of
private property. Logically, it would seem that the premise of fact relied upon is not very
solid. Objections to the billboard upon police, sanitary, and moral grounds have been, as
pointed out by counsel for Churchill and Tait, duly considered by numerous high courts
in the United States, and, with one exception, have been rejected as without
foundation. The exception is the Supreme Court of Missouri, which advances practically
the same line of reasoning as has the Illinois court in this recent case. (St. Louis Gunning
Advt. Co. vs. City of St. Louis, 137 S. W., 929.) In fact, the Illinois court, in Haller Sign
Works vs. Physical Culture Training School (249 Ill., 436), "distinguished" in the recent
case, said: "There is nothing inherently dangerous to the health or safety of the public in
structures that are properly erected for advertising purposes."
If a billboard is so constructed as to offer no room for objections on sanitary or moral
grounds, it would seem that the ordinance above quoted would have to be sustained
upon the very grounds which we have advanced in sustaining our own statute.
It might be well to note that billboard legislation in the United States is attempting to
eradicate a business which has already been firmly established. This business was
allowed to expand unchecked until its very extent called attention to its objectionable
features. In the Philippine Islands such legislation has almost anticipated the business,
which is not yet of such proportions that it can be said to be fairly established. It may be
that the courts in the United States have committed themselves to a course of decisions
with respect to billboard advertising, the full consequences of which were not perceived
for the reason that the development of the business has been so recent that the
objectionable features of it did not present themselves clearly to the courts nor to the
people. We, in this country, have the benefit of the experience of the people of the
United States and may make our legislation preventive rather than corrective. There are
in this country, moreover, on every hand in those districts where Spanish civilization has
held sway for so many centuries, examples of architecture now belonging to a past age,

Arellano, C.J., Torres, and Carson, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-12172

August 29, 1958

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
JUAN F. FAJARDO, ET AL., defendants-appellants.
Assistant Solicitor General Esmeraldo Umali and Higinio V. Catalan for appellee.
Prila, Pardalis and Pejo for appellants.
REYES, J. B. L., J.:
Appeal from the decision of the Court of First Instance of Camarines Sur convicting
defendants-appellants Juan F. Fajardo and Pedro Babilonia of a violation of Ordinance
No. 7, Series of 1950, of the Municipality of Baao, Camarines Sur, for having constructed
without a permit from the municipal mayor a building that destroys the view of the
public plaza.
It appears that on August 15, 1950, during the incumbency of defendant-appellant Juan
F. Fajardo as mayor of the municipality of Baao, Camarines Sur, the municipal council
passed the ordinance in question providing as follows:
SECTION 1. Any person or persons who will construct or repair a building
should, before constructing or repairing, obtain a written permit from the
Municipal Mayor.
SEC. 2. A fee of not less than P2.00 should be charged for each building permit
and P1.00 for each repair permit issued.
SEC. 3. PENALTY Any violation of the provisions of the above, this ordinance,
shall make the violation liable to pay a fine of not less than P25 nor more than
P50 or imprisonment of not less than 12 days nor more than 24 days or both, at
the discretion of the court. If said building destroys the view of the Public Plaza
or occupies any public property, it shall be removed at the expense of the
owner of the building or house.
SEC. 4. EFFECTIVITY This ordinance shall take effect on its approval. (Orig.
Recs., P. 3)

Four years later, after the term of appellant Fajardo as mayor had expired, he and his
son in-law, appellant Babilonia, filed a written request with the incumbent municipal
mayor for a permit to construct a building adjacent to their gasoline station on a parcel
of land registered in Fajardo's name, located along the national highway and separated
from the public plaza by a creek (Exh. D). On January 16, 1954, the request was denied,
for the reason among others that the proposed building would destroy the view or
beauty of the public plaza (Exh. E). On January 18, 1954, defendants reiterated their
request for a building permit (Exh. 3), but again the request was turned down by the
mayor. Whereupon, appellants proceeded with the construction of the building without
a permit, because they needed a place of residence very badly, their former house
having been destroyed by a typhoon and hitherto they had been living on leased
property.
On February 26, 1954, appellants were charged before and convicted by the justice of
the peace court of Baao, Camarines Sur, for violation of the ordinance in question.
Defendants appealed to the Court of First Instance, which affirmed the conviction, and
sentenced appellants to pay a fine of P35 each and the costs, as well as to demolish the
building in question because it destroys the view of the public plaza of Baao, in that "it
hinders the view of travelers from the National Highway to the said public plaza." From
this decision, the accused appealed to the Court of Appeals, but the latter forwarded
the records to us because the appeal attacks the constitutionality of the ordinance in
question.
We find that the appealed conviction can not stand.
A first objection to the validity of the ordinance in question is that under it the mayor
has absolute discretion to issue or deny a permit. The ordinance fails to state any policy,
or to set up any standard to guide or limit the mayor's action. No purpose to be attained
by requiring the permit is expressed; no conditions for its grant or refusal are
enumerated. It is not merely a case of deficient standards; standards are entirely
lacking. The ordinance thus confers upon the mayor arbitrary and unrestricted power to
grant or deny the issuance of building permits, and it is a settled rule that such an
undefined and unlimited delegation of power to allow or prevent an activity, per
se lawful, is invalid (People vs. Vera, 65 Phil., 56; Primicias vs. Fugoso, 80 Phil., 71;
Schloss Poster Adv. Co. vs. Rock Hill, 2 SE (2d) 392)
The ordinance in question in no way controls or guides the discretion vested
thereby in the respondents. It prescribes no uniform rule upon which the
special permission of the city is to be granted. Thus the city is clothed with the
uncontrolled power to capriciously grant the privilege to some and deny it
others; to refuse the application of one landowner or lessee and to grant that
of another, when for all material purposes, the two applying for precisely the
same privileges under the same circumstances. The danger of such an
ordinance is that it makes possible arbitrary discriminations and abuses in its
execution, depending upon no conditions or qualifications whatever, other
than the unregulated arbitrary will of the city authorities as the touchstone by

which its validity is to be tested. Fundamental rights under our government do

not depend for their existence upon such a slender and uncertain thread.
Ordinances which thus invest a city council with a discretion which is purely
arbitrary, and which may be exercised in the interest of a favored few, are
unreasonable and invalid. The ordinance should have established a rule by
which its impartial enforcement could be secured. All of the authorities cited
above sustain this conclusion.
As was said in City of Richmond vs. Dudley, 129 Ind. 112,28 N. E. 312, 314 13 L.
R. A. 587, 28 Am. St. Rep. 180: "It seems from the foregoing authorities to be
well established that municipal ordinances placing restrictions upon lawful
conduct or the lawful use of property must, in order to be valid, specify the
rules and conditions to be observed in such conduct or business; and must
admit of the exercise of the privilege of all citizens alike who will comply with
such rules and conditions; and must not admit of the exercise, or of an
opportunity for the exercise, of any arbitrary discrimination by the municipal
authorities between citizens who will so comply. (Schloss Poster Adv. Co., Inc.
vs. City of Rock Hill, et al., 2 SE (2d), pp. 394-395).
It is contended, on the other hand, that the mayor can refuse a permit solely in case
that the proposed building "destroys the view of the public plaza or occupies any public
property" (as stated in its section 3); and in fact, the refusal of the Mayor of Baao to
issue a building permit to the appellant was predicated on the ground that the proposed
building would "destroy the view of the public plaza" by preventing its being seen from
the public highway. Even thus interpreted, the ordinance is unreasonable and
oppressive, in that it operates to permanently deprive appellants of the right to use
their own property; hence, it oversteps the bounds of police power, and amounts to a
taking of appellants property without just compensation. We do not overlook that the
modern tendency is to regard the beautification of neighborhoods as conducive to the
comfort and happiness of residents. But while property may be regulated in the interest
of the general welfare, and in its pursuit, the State may prohibit structures offensive to
the sight (Churchill and Tait vs. Rafferty, 32 Phil. 580), the State may not, under the
guise of police power, permanently divest owners of the beneficial use of their property
and practically confiscate them solely to preserve or assure the aesthetic appearance of
the community. As the case now stands, every structure that may be erected on
appellants' land, regardless of its own beauty, stands condemned under the ordinance
in question, because it would interfere with the view of the public plaza from the
highway. The appellants would, in effect, be constrained to let their land remain idle
and unused for the obvious purpose for which it is best suited, being urban in character.
To legally achieve that result, the municipality must give appellants just compensation
and an opportunity to be heard.
An ordinance which permanently so restricts the use of property that it can not
be used for any reasonable purpose goes, it is plain, beyond regulation and
must be recognized as a taking of the property. The only substantial difference,
in such case, between restriction and actual taking, is that the restriction leaves

the owner subject to the burden of payment of taxation, while outright

confiscation would relieve him of that burden. (Arverne Bay Constr. Co. vs.
Thatcher (N.Y.) 117 ALR. 1110, 1116).
A regulation which substantially deprives an owner of all beneficial use of his
property is confiscation and is a deprivation within the meaning of the 14th
Amendment. (Sundlum vs. Zoning Bd., 145 Atl. 451; also Eaton vs. Sweeny, 177
NE 412; Taylor vs. Jacksonville, 133 So. 114).
Zoning which admittedly limits property to a use which can not reasonably be
made of it cannot be said to set aside such property to a use but constitutes
the taking of such property without just compensation. Use of property is an
element of ownership therein. Regardless of the opinion of zealots that
property may properly, by zoning, be utterly destroyed without compensation,
such principle finds no support in the genius of our government nor in the
principles of justice as we known them. Such a doctrine shocks the sense of
justice. If it be of public benefit that property remain open and unused, then
certainly the public, and not the private individuals, should bear the cost of
reasonable compensation for such property under the rules of law governing
the condemnation of private property for public use. (Tews vs. Woolhiser (1933)
352 I11. 212, 185 N.E. 827) (Emphasis supplied.)
The validity of the ordinance in question was justified by the court below under section
2243, par. (c), of the Revised Administrative Code, as amended. This section provides:
SEC. 2243. Certain legislative powers of discretionary character. The
municipal council shall have authority to exercise the following discretionary
powers:
xxx

xxx

xxx

(c) To establish fire limits in populous centers, prescribe the kinds of buildings
that may be constructed or repaired within them, and issue permits for the
creation or repair thereof, charging a fee which shall be determined by the
municipal council and which shall not be less than two pesos for each building
permit and one peso for each repair permit issued. The fees collected under
the provisions of this subsection shall accrue to the municipal school fund.
Under the provisions of the section above quoted, however, the power of the municipal
council to require the issuance of building permits rests upon its first establishing fire
limits in populous parts of the town and prescribing the kinds of buildings that may be
constructed or repaired within them. As there is absolutely no showing in this case that
the municipal council had either established fire limits within the municipality or set
standards for the kind or kinds of buildings to be constructed or repaired within them
before it passed the ordinance in question, it is clear that said ordinance was not
conceived and promulgated under the express authority of sec. 2243 (c) aforequoted.

We rule that the regulation in question, Municipal Ordinance No. 7, Series of 1950, of
the Municipality of Baao, Camarines Sur, was beyond the authority of said municipality
to enact, and is therefore null and void. Hence, the conviction of herein appellants is
reversed, and said accused are acquitted, with costs de oficio. So ordered.
Paras, C. J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion,
Endencia and Felix, JJ.,concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-14078

The provincial governor, Hon. Juan Morente, Jr., presented the following
resolution:
"Whereas several attempts and schemes have been made for the
advancement of the non-Christian people of Mindoro, which were all a
failure,

March 7, 1919

RUBI, ET AL. (manguianes), plaintiffs,

vs.
THE PROVINCIAL BOARD OF MINDORO, defendant.
D. R. Williams & Filemon Sotto for plaintiff.
Office of the Solicitor-General Paredes for defendant.
MALCOLM, J.:
In one of the cases which denote a landmark in American Constitutional History
(Worcester vs. Georgia [1832], 6 Pet., 515), Chief Justice Marshall, the first luminary of
American jurisprudence, began his opinion (relating to the status of an Indian) with
words which, with a slight change in phraseology, can be made to introduce the present
opinion This cause, in every point of view in which it can be placed, is of the deepest
interest. The legislative power of state, the controlling power of the constitution and
laws, the rights if they have any, the political existence of a people, the personal liberty
of a citizen, are all involved in the subject now to be considered.
To imitate still further the opinion of the Chief Justice, we adopt his outline and proceed
first, to introduce the facts and the issues, next to give a history of the so called "nonChristians," next to compare the status of the "non-Christians" with that of the
American Indians, and, lastly, to resolve the constitutional questions presented.
I. INTRODUCTION.
This is an application for habeas corpus in favor of Rubi and other Manguianes of the
Province of Mindoro. It is alleged that the Maguianes are being illegally deprived of their
liberty by the provincial officials of that province. Rubi and his companions are said to
be held on the reservation established at Tigbao, Mindoro, against their will, and one
Dabalos is said to be held under the custody of the provincial sheriff in the prison at
Calapan for having run away form the reservation.
The return of the Solicitor-General alleges:
1. That on February 1, 1917, the provincial board of Mindoro adopted
resolution No. 25 which is as follows:

"Whereas it has been found out and proved that unless some other
measure is taken for the Mangyan work of this province, no successful
result will be obtained toward educating these people.
"Whereas it is deemed necessary to obliged them to live in one place
in order to make a permanent settlement,
"Whereas the provincial governor of any province in which nonChristian inhabitants are found is authorized, when such a course is
deemed necessary in the interest of law and order, to direct such
inhabitants to take up their habitation on sites on unoccupied public
lands to be selected by him and approved by the provincial board.
"Whereas the provincial governor is of the opinion that the sitio of
Tigbao on Lake Naujan is a place most convenient for the Mangyanes
to live on, Now, therefore be it
"Resolved, that under section 2077 of the Administrative Code, 800 hectares of
public land in the sitio of Tigbao on Naujan Lake be selected as a site for the
permanent settlement of Mangyanes in Mindoro subject to the approval of the
Honorable Secretary of the Interior, and
"Resolved further, That Mangyans may only solicit homesteads on this
reservation providing that said homestead applications are previously
recommended by the provincial governor."
2. That said resolution No. 25 (series 1917) of the provincial board of Mindoro
was approved by the Secretary of the Interior of February 21, 1917.
3. That on December 4, 1917, the provincial governor of Mindoro issued
executive order No. 2 which says:
"Whereas the provincial board, by Resolution No. 25, current series,
has selected a site in the sitio of Tigbao on Naujan Lake for the
permanent settlement of Mangyanes in Mindoro.
"Whereas said resolution has been duly approve by the Honorable,
the Secretary of the Interior, on February 21, 1917.

"Now, therefore, I, Juan Morente, jr., provincial governor of Mindoro,

pursuant to the provisions of section 2145 of the revised
Administrative Code, do hereby direct that all the Mangyans in the
townships of Naujan and Pola and the Mangyans east of the Baco
River including those in the districts of Dulangan and Rubi's place in
Calapan, to take up their habitation on the site of Tigbao, Naujan Lake,
not later than December 31, 1917.
"Any Mangyan who shall refuse to comply with this order shall upon
conviction be imprisoned not exceed in sixty days, in accordance with
section 2759 of the revised Administrative Code."
4. That the resolution of the provincial board of Mindoro copied in paragraph 1
and the executive order of the governor of the same province copied in
paragraph 3, were necessary measures for the protection of the Mangyanes of
Mindoro as well as the protection of public forests in which they roam, and to
introduce civilized customs among them.
5. That Rubi and those living in his rancheria have not fixed their dwelling
within the reservation of Tigbao and are liable to be punished in accordance
with section 2759 of Act No. 2711.
6. That the undersigned has not information that Doroteo Dabalos is being
detained by the sheriff of Mindoro but if he is so detained it must be by virtue
of the provisions of articles Nos. 2145 and 2759 of Act No. 2711.

In connection with the above-quoted provisions, there should be noted section 2759 of
the same Code, which read as follows:
SEC. 2759. Refusal of a non-Christian to take up appointed habitation. Any
non-Christian who shall refuse to comply with the directions lawfully given by a
provincial governor, pursuant to section two thousand one hundred and fortyfive of this Code, to take up habitation upon a site designated by said governor
shall upon conviction be imprisonment for a period not exceeding sixty days.
The substance of what is now found in said section 2145 is not new to Philippine law.
The genealogical tree of this section, if we may be permitted to use such terminology,
would read: Section 2077, Administrative Code of 1916; section 62, Act No. 1397;
section 2 of various special provincial laws, notably of Act No. 547, specifically relating
to the Manguianes; section 69, Act No. 387.
Section 2145 and its antecedent laws make use of the term "non-Christians." This word,
as will later be disclosed, is also found in varying forms in other laws of the Philippine
Islands. In order to put the phrase in its proper category, and in order to understand the
policy of the Government of the Philippine Islands with reference to the uncivilized
elements of the Islands, it is well first of all to set down a skeleton history of the attitude
assumed by the authorities towards these "non-Christians," with particular regard for
the legislation on the subject.
II. HISTORY.
A. BEFORE ACQUISITION OF THE PHILIPPINE BY THE UNITED STATES.

It thus appears that the provincial governor of Mindoro and the provincial board thereof
directed the Manguianes in question to take up their habitation in Tigbao, a site on the
shore of Lake Naujan, selected by the provincial governor and approved by the
provincial board. The action was taken in accordance with section 2145 of the
Administrative Code of 1917, and was duly approved by the Secretary of the Interior as
required by said action. Petitioners, however, challenge the validity of this section of the
Administrative Code. This, therefore, becomes the paramount question which the court
is called upon the decide.
Section 2145 of the Administrative Code of 1917 reads as follows:
SEC. 2145. Establishment of non-Christina upon sites selected by provincial
governor. With the prior approval of the Department Head, the provincial
governor of any province in which non-Christian inhabitants are found is
authorized, when such a course is deemed necessary in the interest of law and
order, to direct such inhabitants to take up their habitation on sites on
unoccupied public lands to be selected by him an approved by the provincial
board.

The most important of the laws of the Indies having reference to the subject at hand are
compiled in Book VI, Title III, in the following language.
LAW I.
The Emperor Charles and the Prince, the governor, at Cigales, on March 21,
1551. Philip II at Toledo, on February 19, 1560. In the forest of Segovia on
September 13, 1565. In the Escorial on November 10, 1568. Ordinance 149 of
the poblaciones of 1573. In San Lorenzo, on May 20, 1578,
THAT THE "INDIOS" BE REDUCED INTO "POBLACIONES" COMMUNITIES).
In order that the indios may be instructed in the Sacred Catholic Faith and the
evangelical law, and in order that they may forget the blunders of their ancient
rites and ceremonies to the end that they may live in harmony and in a civilized
manner, it has always been endeavored, with great care and special attention,
to use all the means most convenient to the attainment of these purposes. To
carry out this work with success, our Council of the Indies and other religious

persons met at various times; the prelates of new Spain assembled by order of
Emperor Charles V of glorious memory in the year one thousand five hundred
and forty-six all of which meetings were actuated with a desire to serve God
an our Kingdom. At these meetings it was resolved that indios be made to live
in communities, and not to live in places divided and separated from one
another by sierras and mountains, wherein they are deprived of all spiritual and
temporal benefits and wherein they cannot profit from the aid of our ministers
and from that which gives rise to those human necessities which men are
obliged to give one another. Having realized that convenience of this
resolution, our kings, our predecessors, by different orders, have entrusted and
ordered the viceroys, presidents, and governors to execute with great care and
moderation the concentration of the indios into reducciones; and to deal with
their doctrine with such forbearance and gentleness, without causing
inconveniences, so that those who would not presently settle and who would
see the good treatment and the protection of those already in settlements
would, of their own accord, present themselves, and it is ordained that they be
not required to pay taxes more than what is ordered. Because the above has
been executed in the greater part of our Indies, we hereby order and decree
that the same be complied with in all the remaining parts of the Indies, and
the encomederos shall entreat compliance thereof in the manner and form
prescribed by the laws of this title.
xxx

xxx

which they may have in the places left by them. We hereby order that no
change shall be made in this respect, and that they be allowed to retain the
lands held by them previously so that they may cultivate them and profit
therefrom.
xxx

THE SAME AS ABOVE.

THAT THE "REDUCCIONES" BE NOT REMOVED WITHOUT ORDER OF THE KING, VICEROY,
OR COURT.
No governor, or magistrate, or alcalde mayor, or any other court, has the right
to alter or to remove thepueblos or the reducciones once constituted and
founded, without our express order or that of the viceroy, president, or the
royal district court, provided, however, that the encomenderos, priests,
or indios request such a change or consent to it by offering or giving
information to that en. And, because these claims are often made for private
interests and not for those of the indios, we hereby order that this law be
always complied with, otherwise the change will be considered fraudulently
obtained. The penalty of one thousand pesos shall be imposed upon the judge
or encomendero who should violate this law.

LAW VIII.

THE "REDUCCTIONES" BE MADE IN ACCORDANCE WITH THE CONDITIONS OF THIS LAW.

The places wherein the pueblos and reducciones shall be formed should have
the facilities of waters. lands, and mountains, ingress and egress, husbandry
and passageway of one league long, wherein the indioscan have their live stock
that they may not be mixed with those of the Spaniards.
LAW IX.
Philip II at Toledo, on February 19, 1956.
THAT THE "INDIOS" IN "REDUCCIONES" BE NOT DEPRIVED OF THE LANDS PREVIOUSLY
HELD BY THEM.
With more good-will and promptness, the indios shall be concentrated
in reducciones. Provided they shall not be deprived of the lands and granaries

xxx

LAW XIII.

xxx

Philip II at the Pardo, on December 1, 1573. Philip III at Madrid, October 10,
1618.

xxx

LAW XV.
Philip III at Madrid, on October 10, 1618.
THAT THERE BE MAYORS AND ALDERMEN IN THE "REDUCTIONES," WHO SHALL BE
"INDIOS."
We order that in each town and reduccion there be a mayor, who should be
an indio of the samereduccion; if there be more than eighty houses, there
should be two mayors and two aldermen, also indios; and, even if the town be
a big one, there should, nevertheless, be more than two mayors and four
aldermen, If there be less than eighty indios but not less than forty, there
should be not more than one mayor and one alderman, who should annually
elect nine others, in the presence of the priests , as is the practice in town
inhabited by Spaniards and indios.
LAW XXI.
Philip II, in Madrid, On May 2, 1563, and on November 25, 1578. At Tomar, on
May 8, 1581. At Madrid, on January 10, 1589. Philip III, at Todesillas, on July 12,

1600. Philip IV, at Madrid, on October 1 and December 17, 1646. For this law
and the one following, see Law I, Tit. 4, Book 7.

It is but just to admit the fact that all the governments have occupied
themselves with this most important question, and that much has been
heretofore accomplished with the help and self-denial of the missionary fathers
who have even sacrificed their lives to the end that those degenerate races
might be brought to the principles of Christianity, but the means and the
preaching employed to allure them have been insufficient to complete the
work undertaken. Neither have the punishments imposed been sufficient in
certain cases and in those which have not been guarded against, thus giving
and customs of isolation.

THAT IN THE TOWNS OF THE "INDIOS," THERE SHALL LIVE NO SPANIARDS, NEGROES,
"MESTIZOS," AND MULATTOES.
We hereby prohibit and forbid Spaniards, negroes, mulattores, or mestizos to
live to live in the reduccionesand towns and towns of the indios, because it has
been found that some Spaniards who deal, trade, live, and associate with the
indios are men of troublesome nature, of dirty ways of living; robbers,
gamblers, and vicious and useless men; and, to avoid the wrongs done them,
the indios would leave their towns and provinces; and the negroes, mestizos,
and mulattoes, besides maltreating them and utilizing their services,
contaminate them with their bad customs, idleness, and also some of their
blunders and vices which may corrupt and pervert the goal which we desire to
reach with regard to their salvation, increase, and tranquillity. We hereby order
the imposition of grave penalties upon the commission of the acts abovementioned which should not be tolerated in the towns, and that the viceroys,
presidents, governors, and courts take great care in executing the law within
their powers and avail themselves of the cooperation of the ministers who are
truly honest. As regards the mestizos and Indian and Chinese half-breeds
(zambaigos), who are children of indias and born among them, and who are to
inherit their houses andhaciendas, they all not be affected by this law, it
appearing to be a harsh thing to separate them from their parents. (Law of the
Indies, vol. 2, pp. 228, 229, 230, 231.)

As it is impossible to consent to the continuation of such a lamentable state of

things, taking into account the prestige which the country demands and the
inevitable duty which every government has in enforcing respect and
obedience to the national laws on the part of all who reside within the territory
under its control, I have proceeded in the premises by giving the most careful
study of this serious question which involves important interests for civilization,
from the moral and material as well as the political standpoints. After hearing
the illustrious opinions of all the local authorities, ecclesiastics, and
missionaries of the provinces of Northern Luzon, and also after finding the
unanimous conformity of the meeting held with the Archbishop of Manila, the
Bishops of Jaro and Cebu, and the provincial prelates of the orders of the
Dominicans, Agustinians, Recoletos, Franciscans, and Jesuits as also of the
meeting of the Council of Authorities, held for the object so indicated, I have
arrived at an intimate conviction of the inevitable necessity of proceeding in a
practical manner for the submission of the said pagan and isolated races, as
well as of the manner and the only form of accomplishing such a task.

A clear exposition of the purposes of the Spanish government, in its efforts to improve
the condition of the less advanced inhabitants of the Islands by concentrating them in
"reducciones," is found in the Decree of the Governor-General of the Philippine Islands
of January 14, 1881, reading as follows:

For the reasons above stated and for the purpose of carrying out these objects,
I hereby promulgate the following:
DECREE.

It is a legal principle as well as a national right that every inhabitant of a

territory recognized as an integral part of a nation should respect and obey the
laws in force therein; while, on other hand, it is the duty to conscience and to
humanity for all governments to civilize those backward races that might exist
in the nation, and which living in the obscurity of ignorance, lack of all the
nations which enable them to grasp the moral and material advantages that
may be acquired in those towns under the protection and vigilance afforded
them by the same laws.
It is equally highly depressive to our national honor to tolerate any longer the
separation and isolation of the non-Christian races from the social life of the
civilized and Christian towns; to allow any longer the commission of
depredations, precisely in the Island of Luzon wherein is located the seat of the
representative of the Government of the, metropolis.

1. All the indian inhabitants (indios) of the Islands of Luzon are, from this date,
to be governed by the common law, save those exceptions prescribed in this
decree which are bases upon the differences of instructions, of the customs,
and of the necessities of the different pagan races which occupy a part of its
territory.
2. The diverse rules which should be promulgated for each of these races
which may be divided into three classes; one, which comprises those which live
isolated and roaming about without forming a town nor a home; another,
made up of those subdued pagans who have not as yet entered completely the
social life; and the third, of those mountain and rebellious pagans shall be
published in their respective dialects, and the officials, priests, and missionaries
of the provinces wherein they are found are hereby entrusted in the work of
having these races learn these rules. These rules shall have executive character,

beginning with the first day of next April, and, as to their compliance, they must
be observed in the manner prescribed below.
3. The provincial authorities in conjunction with the priests shall proceed, from
now on, with all the means which their zeal may suggest to them, to the taking
of the census of the inhabitants of the towns or settlement already subdued,
and shall adopt the necessary regulations for the appointment of local
authorities, if there be none as yet; for the construction of courts and schools,
and for the opening or fixing up of means of communication, endeavoring, as
regards the administrative organization of the said towns or settlements, that
this be finished before the first day of next July, so that at the beginning of the
fiscal year they shall have the same rights and obligations which affect the
remaining towns of the archipelago, with the only exception that in the first
two years they shall not be obliged to render personal services other than
those previously indicated.
4. So long as these subdued towns or settlements are located infertile lands
appropriate for cultivation, the inhabitants thereof shall not be obliged to
move their dwelling-houses; and only in case of absolute necessity shall a new
residence be fixed for them, choosing for this purpose the place most
convenient for them and which prejudices the least their interest; and, in either
of these cases, an effort must be made to establish their homes with the reach
of the sound of the bell.
5. For the protection and defense of these new towns, there shall be
established an armed force composed precisely of native Christian, the
organization and service of which shall be determined in a regulations based
upon that of the abolished Tercios de Policia (division of the Guardia Civil).
6. The authorities shall see to it that the inhabitants of the new towns
understand all the rights and duties affecting them and the liberty which they
have as to where and now they shall till their lands and sell the products
thereof, with the only exception of the tobacco which shall be bought by
the Hacienda at the same price and conditions allowed other producers, and
with the prohibition against these new towns as well as the others from
engaging in commerce of any other transaction with the rebellious indios, the
violation of which shall be punished with deportation.
7. In order to properly carry out this express prohibition, the limits of the
territory of the rebellious indiosshall be fixed; and whoever should go beyond
the said limits shall be detained and assigned governmentally wherever
convenient.
8. For the purpose of assisting in the conversion of the pagans into the
fraternity of the Catholic Church, all by this fact along be exempt for eight years
from rendering personal labor.

9. The authorities shall offer in the name of the State to the races not subdued
(aetas and mountains igorrots the following advantages in returns for their
voluntary submission: to live in towns; unity among their families; concession
of good lands and the right to cultivate them in the manner they wish and in
the way them deem most productive; support during a year, and clothes upon
effecting submission; respect for their habits and customs in so far as the same
are not opposed to natural law; freedom to decide of their own accord as to
whether they want to be Christians or not; the establishment of missions and
families of recognized honesty who shall teach, direct, protect, and give them
security and trust them; the purchase or facility of the sale of their harvests;
the exemption from contributions and tributes for ten years and from
thequintas (a kind of tax) for twenty years; and lastly, that those who are
governed by the local authorities as the ones who elect such officials under the
direct charge of the authorities of the province or district.
10. The races indicated in the preceding article, who voluntarily admit the
advantages offered, shall, in return, have the obligation of constituting their
new towns, of constructing their town hall, schools, and country roads which
place them in communication with one another and with the Christians;
provided, the location of these towns be distant from their actual residences,
when the latter do not have the good conditions of location and cultivations,
and provided further the putting of families in a place so selected by them be
authorized in the towns already constituted.
11. The armed force shall proceed to the prosecution and punishment of the
tribes, that, disregarding the peace, protection, and advantages offered them,
continue in their rebellious attitude on the first of next April, committing from
now on the crimes and vexations against the Christian towns; and for the this
purposes, the Captain General's Office shall proceed with the organization of
the divisions of the Army which, in conjunction with the rural guards
(cuadrilleros), shall have to enter the territory of such tribes. On the expiration
of the term, they shall destroy their dwelling-houses, labors, and implements,
and confiscate their products and cattle. Such a punishment shall necessarily
be repeated twice a year, and for this purpose the military headquarters shall
immediately order a detachment of the military staff to study the zones where
such operations shall take place and everything conducive to the successful
accomplishment of the same.
12. The chiefs of provinces, priests, and missioners, local authorities, and other
subordinates to my authorities, local authorities, and other subordinates to
may authority, civil as well as military authorities, shall give the most effective
aid and cooperation to the said forces in all that is within the attributes and the
scope of the authority of each.

13. With respect to the reduccion of the pagan races found in some of the
provinces in the southern part of the Archipelago, which I intend to visit, the
preceding provisions shall conveniently be applied to them.
14. There shall be created, under my presidency as Governor-General, ViceRoyal Patron, a council or permanent commission which shall attend to and
decide all the questions relative to the application of the foregoing regulations
that may be brought to it for consultations by the chiefs of provinces and
priests and missionaries.
15. The secondary provisions which may be necessary, as a complement to the
foregoing, in brining about due compliance with this decree, shall be
promulgated by the respective official centers within their respective
jurisdictions. (Gaceta de Manila, No. 15) (Diccionario de la Administracion, vol.
7, pp. 128-134.)

Christian portion of the Islands. The Philippine Commission was to retain exclusive
jurisdiction of that part of said Islands inhabited by Moros or other non-Christian tribes.
The latest Act of Congress, nearest to a Constitution for the Philippines, is the Act of
Congress of August 29, 1916, commonly known as the Jones Law. This transferred the
exclusive legislative jurisdiction and authority theretofore exercised by the Philippine
Commission, to the Philippine Legislature (sec. 12). It divided the Philippine Islands into
twelve senatorial districts, the twelfth district to be composed of the Mountain
Province, Baguio, Nueva Vizcaya, and the Department of Mindanao and Sulu. The
Governor-General of the Philippine Islands was authorized to appoint senators and
representatives for the territory which, at the time of the passage of the Jones Law, was
not represented in the Philippine Assembly, that is, for the twelfth district (sec. 16). The
law establish a bureau to be known as the "Bureau of non-Christian Tribes" which shall
have general supervision over the public affairs of the inhabitants which are
represented in the Legislature by appointed senators and representatives( sec. 22).

Ever since the acquisition of the Philippine Islands by the United States, the question as
to the best method for dealing with the primitive inhabitants has been a perplexing one.

Philippine organic law may, therefore, be said to recognized a dividing line between the
territory not inhabited by Moros or other non-Christian tribes, and the territory which
Moros or other non-Christian tribes, and the territory which is inhabited by Moros or
other non-Christian tribes.

1. Organic law.

2. Statute law.

The first order of an organic character after the inauguration of the American
Government in the Philippines was President McKinley's Instructions to the Commission
of April 7, 1900, later expressly approved and ratified by section 1 of the Philippine Bill,
the Act of Congress of July 1, 1902. Portions of these instructions have remained
undisturbed by subsequent congressional legislation. One paragraph of particular
interest should here be quoted, namely:

Local governments in the Philippines have been provided for by various acts of the
Philippine Commission and Legislature. The most notable are Acts Nos. 48 and 49
concerning the Province of Benguet and the Igorots; Act NO. 82, the Municipal Code;
;Act no. 83, the Provincial Government Act; Act No. 183, the Character of the city of
Manila; Act No. 7887, providing for the organization and government of the Moro
Province; Act No. 1396, the Special Provincial Government Act; Act No. 1397, the
Township Government Act; Act No. 1667, relating to the organization of settlements;
Act No. 1963, the Baguio charger; and Act No. 2408, the Organic Act of the Department
of Mindanao and Sulu. The major portion of these laws have been carried forward into
the Administrative Codes of 1916 an d1917.

B. AFTER ACQUISITON OF THE PHILIPPINES BY THE UNITED STATES.

In dealing with the uncivilized tribes of the Islands, the Commission should
adopt the same course followed by Congress in permitting the tribes of our
North American Indians to maintain their tribal organization and government
and under which many of these tribes are now living in peace and
contentment, surrounded by civilization to which they are unable or unwilling
to conform. Such tribal governments should, however, be subjected to wise
and firm regulation; and, without undue or petty interference, constant and
active effort should be exercised to prevent barbarous practices and introduce
civilized customs.
Next comes the Philippine Bill, the Act of Congress of July 1, 1902, in the nature of an
Organic Act for the Philippines. The purpose of section 7 of the Philippine Bill was to
provide for a legislative body and, with this end in view, to name the prerequisites for
the organization of the Philippine Assembly. The Philippine Legislature, composed of the
Philippine Commission and the Philippine Assembly, was to have jurisdiction over the

Of more particular interest are certain special laws concerning the government of the
primitive peoples. Beginning with Act No. 387, sections 68-71, enacted on April 9, 1902,
by the United States Philippine Commission, having reference to the Province of Nueva
Vizcaya, Acts Nos. 4111, 422, 445, 500, 547, 548, 549, 550, 579, 753, 855, 1113, 1145,
4568, 1306 were enacted for the provinces of Abra, Antique, Bataan, Ilocos Norte, Ilocos
Sur, Isabela. Lepanto-Bontoc, Mindoro, Misamis, Nueva Vizcaya, Pangasinan, Paragua
(Palawan), Tarlac, Tayabas, and Zambales. As an example of these laws, because
referring to the Manguianes, we insert Act No. 547:
No. 547. AN ACT PROVIDING FOR THE ESTABLISHMENT OF LOCAL
CIVIL GOVERNMENTS FOR THE MANGUIANES IN THE PROVINCE OF
MINDORO.

By authority of the United States, be it enacted by the Philippine Commission,

that:
SECTION 1. Whereas the Manguianes of the Provinces of Mindoro have not
progressed sufficiently in civilization to make it practicable to bring them under
any form of municipal government, the provincial governor is authorized,
subject to the approval of the Secretary of the Interior, in dealing with these
Manguianes to appoint officers from among them, to fix their designations and
badges of office, and to prescribe their powers and duties: Provided, That the
powers and duties thus prescribed shall not be in excess of those conferred
upon township officers by Act Numbered Three hundred and eighty-seven
entitled "An Act providing for the establishment of local civil Governments in
the townships and settlements of Nueva Vizcaya."
SEC. 2. Subject to the approval of the Secretary of the Interior, the provincial
governor is further authorized, when he deems such a course necessary in the
interest of law and order, to direct such Manguianes to take up their habitation
on sites on unoccupied public lands to be selected by him and approved by the
provincial board. Manguianes who refuse to comply with such directions shall
upon conviction be imprisonment for a period not exceeding sixty days.
SEC. 3. The constant aim of the governor shall be to aid the Manguianes of his
province to acquire the knowledge and experience necessary for successful
local popular government, and his supervision and control over them shall be
exercised to this end, an to the end that law and order and individual freedom
shall be maintained.
SEC. 4. When in the opinion of the provincial board of Mindoro any settlement
of Manguianes has advanced sufficiently to make such a course practicable, it
may be organized under the provisions of sections one to sixty-seven, inclusive,
of Act Numbered three hundred and eighty-seven, as a township, and the
geographical limits of such township shall be fixed by the provincial board.
SEC. 5. The public good requiring the speedy enactment of this bill, the passage
of the same is hereby expedited in accordance with section two of 'An Act
prescribing the order of procedure by the Commission in the enactment of
laws,' passed September twenty-sixth, nineteen hundred.
SEC. 6. This Act shall take effect on its passage.
Enacted, December 4, 1902.
All of these special laws, with the exception of Act No. 1306, were repealed by Act No.
1396 and 1397. The last named Act incorporated and embodied the provisions in
general language. In turn, Act No. 1397 was repealed by the Administrative Code of
1916. The two Administrative Codes retained the provisions in questions.

These different laws, if they of the non-Christian inhabitants of the Philippines and a
settled and consistent practice with reference to the methods to be followed for their
advancement.
C. TERMINOLOGY.
The terms made use of by these laws, organic and statutory, are found in varying forms.
"Uncivilized tribes" is the denomination in President McKinley's instruction to the
Commission.
The most commonly accepted usage has sanctioned the term "non-Christian tribes."
These words are to be found in section 7 of the Philippine Bill and in section 22 of the
Jones Law. They are also to be found in Act No. 253 of the Philippines Commission,
establishing a Bureau of non-Christian Tribes and in Act No. 2674 of the Philippine
Legislature, carried forward into sections 701-705 of the Administrative Code of 1917,
reestablishing this Bureau. Among other laws which contain the phrase, there can be
mentioned Acts Nos. 127, 128, 387, 547, 548, 549, 550, 1397, 1639, and 2551.
"Non-Christian people," "non-Christian inhabitants," and "non-Christian Filipinos" have
been the favorite nomenclature, in lieu of the unpopular word "tribes," since the
coming into being of a Filipinized legislature. These terms can be found in sections 2076,
2077, 2390, 2394, Administrative Code of 1916; sections 701-705, 2145, 2422, 2426,
Administrative Code of 1917; and in Acts Nos. 2404, 2435, 2444, 2674 of the Philippine
Legislatures, as well as in Act No. 1667 of the Philippine Commission.
The Administrative Code specifically provides that the term "non-Christian" shall include
Mohammedans and pagans. (Sec. 2576, Administrative Code of 1917; sec. 2561,
Administrative Code of 1916, taken from Act No. 2408, sec. 3.)
D. MEANING OF TERM "NON-CHRISTIAN."
If we were to follow the literal meaning of the word "non-Christian," it would of course
result in giving to it a religious signification. Obviously, Christian would be those who
profess the Christian religion, and non-Christians, would be those who do not profess
the Christian religion. In partial corroboration of this view, there could also be cited
section 2576 of the last Administrative Code and certain well-known authorities, as
Zuiga, "Estadismo de las Islas Filipinas," Professor Ferdinand Blumentritt, "Philippine
Tribes and Languages," and Dr. N. M. Saleeby, "The Origin of Malayan Filipinos." (See
Blair & Robertson, "The Philippine Islands," 1493-1898, vol. III, p. 300, note; CraigBenitez, "Philippine Progress prior to 1898," vol. I. p. 107.)
Not content with the apparent definition of the word, we shall investigate further to
ascertain what is its true meaning.

In one sense, the word can have a geographical signification. This is plainly to be seen by
the provisions of many laws. Thus, according to the Philippine Bill, the authority of the
Philippine Assembly was recognized in the "territory" of the Islands not inhabited by
Moros or other non-Christian tribes. Again, the Jones Law confers similar recognition in
the authorization of the twelfth senatorial district for the "territory not now
represented in the Philippine Assembly." The Philippines Legislature has, time and again,
adopted acts making certain other acts applicable to that "part" of the Philippine Islands
inhabited by Moros or other non-Christian tribes.

determining the most practicable means for bringing about their advancement in
civilization and material property prosperity."

Section 2145, is found in article XII of the Provincial Law of the Administrative Code. The
first section of this article, preceding section 2145, makes the provisions of the article
applicable only in specially organized provinces. The specially organized provinces are
the Mountain Province, Nueva Vizcaya, Mindoro, Batanes, and Palawan. These are the
provinces to which the Philippine Legislature has never seen fit to give all the powers of
local self-government. They do not, however, exactly coincide with the portion of the
Philippines which is not granted popular representation. Nevertheless, it is still a
geographical description.

. . . we are not advised of any provision of law which recognizes as legal a tribal
marriage of so-called non-Christians or members of uncivilized tribes,
celebrated within that province without compliance with the requisites
prescribed by General Orders no. 68. . . . We hold also that the fact that the
accused is shown to be a member of an uncivilized tribe, of a low order of
intelligence, uncultured and uneducated, should be taken into consideration as
a second marked extenuating circumstance.

It is well-known that within the specially organized provinces, there live persons some of
who are Christians and some of whom are not Christians. In fact, the law specifically
recognizes this. ( Sec. 2422, Administrative Code of 1917, etc.)
If the religious conception is not satisfactory, so against the geographical conception is
likewise inadquate. The reason it that the motive of the law relates not to a particular
people, because of their religion, or to a particular province because of its location, but
the whole intent of the law is predicated n the civilization or lack of civilization of the
inhabitants.
At most, "non-Christian" is an awkward and unsatisfactory word. Apologetic words
usually introduce the term. "The so-called non-Christian" is a favorite expression. The
Secretary of the Interior who for so many years had these people under his jurisdiction,
recognizing the difficulty of selecting an exact designation, speaks of the "backward
Philippine peoples, commonly known as the 'non-Christian tribes."' (See Hearings before
the Committee on the Philippines, United States Senate, Sixty-third Congress, third
session on H.R. 18459, An Act to declare the purpose of the People of the United States
as to the future political status of the Philippine Islands and to provide a more
autonomous government for the Islands, pp. 346, 351; letter of the Secretary of the
Interior of June 30, 1906, circulated by the Executive Secretary.)
The idea that the term "non-Christian" is intended to relate to degree of civilization, is
substantiated by reference to legislative, judicial, and executive authority.
The legislative intent is borne out by Acts Nos. 48, 253, 387, 1667, and 2674, and
sections 701 et seq, and sections 2422 et seq, of the Administrative Code of 1917. For
instance, Act No. 253 charged the Bureau of non-Christian tribes to conduct "systematic
investigations with reference to non-Christian tribes . . . with special view to

As authority of a judicial nature is the decision of the Supreme Court in the case of
United States vs. Tubban [Kalinga] ([1915], 29, Phil., 434). The question here arose as to
the effect of a tribal marriage in connection with article 423 of the Penal code
concerning the husband who surprises his wife in the act of adultery. In discussing the
point, the court makes use of the following language:

Of much more moment is the uniform construction of execution officials who have been
called upon to interpret and enforce the law. The official who, as a member of the
Philippine Commission, drafted much of the legislation relating to the so-called
Christians and who had these people under his authority, was the former Secretary of
the Interior. Under date of June 30, 1906, this official addressed a letter to all governor
of provinces, organized under the Special Provincial Government Act, a letter which
later received recognition by the Governor-General and was circulated by the Executive
Secretary, reading as follows:
Sir: Within the past few months, the question has arisen as to whether people
who were originally non-Christian but have recently been baptized or who are
children of persons who have been recently baptized are, for the purposes of
Act 1396 and 1397, to be considered Christian or non-Christians.
It has been extremely difficult, in framing legislation for the tribes in these
islands which are not advanced far in civilization, to hit upon any suitable
designation which will fit all cases. The number of individual tribes is so great
that it is almost out of the question to enumerate all of them in an Act. It was
finally decided to adopt the designation 'non-Christians' as the one most
satisfactory, but the real purpose of the Commission was not so much to
legislate for people having any particular religious belief as for those lacking
sufficient advancement so that they could, to their own advantage, be brought
under the Provincial Government Act and the Municipal Code.
The mere act of baptism does not, of course, in itself change the degree of
civilization to which the person baptized has attained at the time the act of
baptism is performed. For practical purposes, therefore, you will give the
member of so-called "wild tribes" of your province the benefit of the doubt
even though they may recently have embraced Christianity.

The determining factor in deciding whether they are to be allowed to remain

under the jurisdiction of regularly organized municipalities or what form of
government shall be afforded to them should be the degree of civilization to
which they have attained and you are requested to govern yourself
accordingly.
I have discussed this matter with the Honorable, the Governor-General, who
concurs in the opinion above expressed and who will have the necessary
instructions given to the governors of the provinces organized under the
Provincial Government Act. (Internal Revenue Manual, p. 214.)
The present Secretary of the Interior, in a memorandum furnished a member of this
court, has the following to say on the subject:
As far as names are concerned the classification is indeed unfortunate, but
while no other better classification has as yet been made the present
classification should be allowed to stand . . . I believe the term carries the same
meaning as the expressed in the letter of the Secretary of the Interior (of June
30, 1906, herein quoted). It is indicative of the degree of civilization rather than
of religious denomination, for the hold that it is indicative of religious
denomination will make the law invalid as against that Constitutional guaranty
of religious freedom.
Another official who was concerned with the status of the non-Christians, was the
Collector of Internal Revenue. The question arose for ruling relatives to the cedula
taxation of the Manobos and the Aetas. Thereupon, the view of the Secretary of the
Interior was requested on the point, who, by return indorsement, agreed with the
interpretation of the Collector of Internal Revenue. This Construction of the Collector of
Internal Revenue can be found in circular letter No. 188 of the Bureau of Internal
Revenue, dated June 11, 1907, reading as follows (Internal Revenue Manual, p. 214):
The internal revenue law exempts "members of non-Christian tribes" from the
payment of cedula taxes. The Collector of Internal Revenue has interpreted this
provision of law to mean not that persons who profess some form of Christian
worship are alone subject to the cedula tax, and that all other person are
exempt; he has interpreted it to mean that all persons preserving tribal
relations with the so-called non-Christian tribes are exempt from the cedula
tax, and that all others, including Jews, Mohammedans, Confucians, Buddists,
etc., are subject to said tax so long as they live in cities or towns, or in the
country in a civilized condition. In other words, it is not so much a matter of a
man's form of religious worship or profession that decides whether or not he is
subject to the cedula tax; it is more dependent on whether he is living in a
civilized manner or is associated with the mountain tribes, either as a member
thereof or as a recruit. So far, this question has not come up as to whether a
Christian, maintaining his religious belief, but throwing his lot and living with a
non-Christian tribe, would or would not be subject to the cedula tax. On one

occasion a prominent Hebrew of Manila claimed to this office that he was

exempt from the cedula tax, inasmuch as he was not a Christian. This Office,
however, continued to collect cedula taxes from all the Jews, East Indians,
Arabs, Chinamen, etc., residing in Manila. Quite a large proportion of the
cedula taxes paid in this city are paid by men belonging to the nationalities
mentioned. Chinamen, Arabs and other s are quite widely scattered throughout
the Islands, and a condition similar to that which exist in Manila also exists in
most of the large provincial towns. Cedula taxes are therefore being collected
by this Office in all parts of these Islands on the broad ground that civilized
people are subject to such taxes, and non-civilized people preserving their
tribal relations are not subject thereto.
(Sgd.)
JNO.
S.
HORD,
Collector of Internal Revenue.
On September 17, 1910, the Collector of Internal Revenue addressed circular letter No.
327, approved by the Secretary of Finance and Justice, to all provincial treasurers. This
letter in part reads:
In view of the many questions that have been raised by provincial treasurers
regarding cedula taxes due from members of non-Christian tribes when they
come in from the hills for the purposes of settling down and becoming
members of the body politic of the Philippine Islands, the following clarification
of the laws governing such questions and digest of rulings thereunder is hereby
published for the information of all concerned:
Non-Christian inhabitants of the Philippine Islands are so classed, not by reason
of the fact that they do not profess Christianity, but because of their uncivilized
mode of life and low state of development. All inhabitants of the Philippine
Islands classed as members of non-Christian tribes may be divided into three
classes in so far as the cedula tax law is concerned . . .
Whenever any member of an non-Christian tribe leaves his wild and uncivilized
mode of life, severs whatever tribal relations he may have had and attaches
himself civilized community, belonging a member of the body politic, he
thereby makes himself subject to precisely the same law that governs the other
members of that community and from and after the date when he so attaches
himself to the community the same cedula and other taxes are due from him as
from other members thereof. If he comes in after the expiration of the
delinquency period the same rule should apply to him as to persons arriving
from foreign countries or reaching the age of eighteen subsequent to the
expiration of such period, and a regular class A, D, F, or H cedula, as the case
may be, should be furnished him without penalty and without requiring him to
pay the tax for former years.

In conclusion, it should be borne in mind that the prime factors in determining

whether or not a man is subject to the regular cedula tax is not the
circumstance that he does or does not profess Christianity, nor even his
maintenance of or failure to maintain tribal relations with some of the well
known wild tribes, but his mode of life, degree of advancement in civilization
and connection or lack of connection with some civilized community. For this
reason so called "Remontados" and "Montescos" will be classed by this office
as members of non-Christian tribes in so far as the application of the Internal
Revenue Law is concerned, since, even though they belong to no well
recognized tribe, their mode of life, degree of advancement and so forth are
practically the same as those of the Igorrots and members of other recognized
non-Christina tribes.
Very respectfully,
(Sgd.) ELLIS CROMWELL,
Collector of Internal Revenue,
Approved:
(Sgd.) GREGORIO ARANETA,
Secretary of Finance and Justice.
The two circular above quoted have since been repealed by Bureau of Internal Revenue
Regulations No. 1, promulgated by Venancio Concepcion, Acting Collector of Internal
Revenue, and approved on April 16, 1915, by Honorable Victorino Mapa, Secretary of
Finance and Justice. Section 30 of the regulations is practically a transcript of Circular
Letter No. 327.
The subject has come before the Attorney-General for consideration. The Chief of
Constabulary request the opinion of the Attorney-General as to the status of a nonChristian who has been baptized by a minister of the Gospel. The precise questions were
these: "Does he remain non-Christian or is he entitled to the privileges of a Christian? By
purchasing intoxicating liquors, does he commit an infraction of the law and does the
person selling same lay himself liable under the provision of Act No. 1639?" The opinion
of Attorney-General Avancea, after quoting the same authorities hereinbefore set out,
concludes:
In conformity with the above quoted constructions, it is probable that is
probable that the person in question remains a non-Christian, so that, in
purchasing intoxicating liquors both he and the person selling the same make
themselves liable to prosecution under the provisions of Act No. 1639. At least,
I advise you that these should be the constructions place upon the law until a
court shall hold otherwise.
Solicitor-General Paredes in his brief in this case says:

With respect to the meaning which the phrase non-Christian inhabitants has in
the provisions of the Administrative code which we are studying, we submit
that said phrase does not have its natural meaning which would include all
non-Christian inhabitants of the Islands, whether Filipino or strangers, civilized
or uncivilized, but simply refers to those uncivilized members of the nonChristian tribes of the Philippines who, living without home or fixed residence,
roam in the mountains, beyond the reach of law and order . . .
The Philippine Commission in denominating in its laws that portion of the
inhabitants of the Philippines which live in tribes as non-Christian tribes, as
distinguished from the common Filipinos which carry on a social and civilized
life, did not intended to establish a distinction based on the religious beliefs of
the individual, but, without dwelling on the difficulties which later would be
occasioned by the phrase, adopted the expression which the Spanish legislation
employed to designate the uncivilized portion of the inhabitants of the
Philippines.
The phrase 'non-Christian inhabitants' used in the provisions of articles 2077
and 2741 of Act No. 2657 (articles 2145 and 2759) should be understood as
equivalent to members of uncivilized tribes of the Philippines, not only because
this is the evident intention of the law, but because to give it its lateral meaning
would make the law null and unconstitutional as making distinctions base the
religion of the individual.
The Official Census of 1903, in the portion written by no less an authority than De. David
P. Barrows, then "Chief of the Bureau of non-Christian Tribes," divides the population in
the Christian or Civilized Tribes, and non-Christian or Wild Tribes. (Census of the
Philippine Islands [1903], vol. 1, pp. 411 et seq). The present Director of the Census,
Hon. Ignacio Villamor, writes that the classification likely to be used in the Census now
being taken is: "Filipinos and Primitive Filipinos." In a Pronouncing Gazetteer and
Geographical Dictionary of the Philippine Islands, prepared in the Bureau of Insular
Affairs, War Department, a sub-division under the title non-Christian tribes is, "Physical
and Political Characteristics of the non-Christian Tribes," which sufficiently shows that
the terms refers to culture and not to religion.
In resume, therefore, the Legislature and the Judiciary, inferentially, and different
executive officials, specifically, join in the proposition that the term "non-Christian"
refers, not to religious belief, but, in a way , to geographical area, and, more directly, to
natives of the Philippine Islands of a law grade of civilization, usually living in tribal
relationship apart from settled communities.
E. THE MANGUIANES.
The so-called non-Christians are in various state approaching civilization. The Philippine
Census of 1903 divided them into four classes. Of the third class, are the Manguianes (or
Mangyans) of Mindoro.

Of the derivation of the name "Manguian" Dr. T. H. Pardo de Tavera in his Etimilogia de
los nombres de Rozas de Filipinas, says:
In Tagalog, Bicol, and Visaya, Manguian signifies "savage," "mountainer,"
"pagan," "negro." It may be that the use of this word is applicable to a great
number of Filipinos, but nevertheless it has been applied only to certain
inhabitants of Mindoro. Even in primitive times without doubt this name was
given to those of that island who bear it to-day, but its employed in three
Filipino languages shows that the radical ngian had in all these languages a
sense to-day forgotten. In Pampango this ending still exists and signifies
"ancient," from which we can deduce that the name was applied to men
considered to be the ancient inhabitants, and that these men were pushed
back into the interior by the modern invaders, in whose language they were
called the "ancients."
The Manguianes are very low in culture. They have considerable Negrito blood and have
not advanced beyond the Negritos in civilization. They are a peaceful, timid, primitive,
semi-nomadic people. They number approximately 15,000. The manguianes have shown
no desire for community life, and, as indicated in the preamble to Act No. 547, have not
progressed sufficiently in civilization to make it practicable to bring them under any
form of municipal government. (See Census of the Philippine (Islands [1903], vol. I, pp.
22, 23, 460.)
III. COMPARATIVE THE AMERICAN INDIANS.
Reference was made in the Presidents' instructions to the Commission to the policy
adopted by the United States for the Indian Tribes. The methods followed by the
Government of the Philippines Islands in its dealings with the so-called non-Christian
people is said, on argument, to be practically identical with that followed by the United
States Government in its dealings with the Indian tribes. Valuable lessons, it is insisted,
can be derived by an investigation of the American-Indian policy.
From the beginning of the United States, and even before, the Indians have been
treated as "in a state of pupilage." The recognized relation between the Government of
the United States and the Indians may be described as that of guardian and ward. It is
for the Congress to determine when and how the guardianship shall be terminated. The
Indians are always subject to the plenary authority of the United States.
Chief Justice Marshall in his opinion in Worcester vs. Georgia, hereinbefore mentioned,
tells how the Congress passed an Act in 1819 "for promoting those humane designs of
civilizing the neighboring Indians." After quoting the Act, the opinion goes on "This
act avowedly contemplates the preservation of the Indian nations as an object sought
by the United States, and proposes to effect this object by civilizing and converting them
from hunters into agriculturists."

A leading case which discusses the status of the Indians is that of the United
States vs. Kagama ([1886], 118 U.S., 375). Reference is herein made to the clause of the
United States Constitution which gives Congress "power to regulate commerce with
foreign nations, and among the several States, and with the Indian tribes." The court
then proceeds to indicate a brief history of the position of the Indians in the United
States (a more extended account of which can be found in Marshall's opinion in
Worcester vs. Georgia, supra), as follows:
The relation of the Indian tribes living within the borders of the United States,
both before and since the Revolution, to the people of the United States, has
always been an anomalous one and of a complex character.
Following the policy of the European Governments in the discovery of
American towards the Indians who were found here, the colonies before the
Revolution and the States and the United States since, have recognized in the
Indians a possessory right to the soil over which they roamed and hunted and
established occasional villages. But they asserted an ultimate title in the land
itself, by which the Indian tribes were forbidden to sell or transfer it to other
nations or peoples without the consent of this paramount authority. When a
tribe wished to dispose of its lands, or any part of it, or the State or the United
States wished to purchase it, a treaty with the tribe was the only mode in which
this could be done. The United States recognized no right in private persons, or
in other nations, to make such a purchase by treaty or otherwise. With the
Indians themselves these relation are equally difficult to define. They were, and
always have been, regarded as having a semi-independent position when they
preserved their tribal relations; not as States, not as nation not a possessed of
the fall attributes of sovereignty, but as a separate people, with the power of
regulating their internal and social relations, and thus far not brought under
the laws of the Union or of the State within whose limits they resided.
The opinion then continues:
It seems to us that this (effect of the law) is within the competency of Congress.
These Indian tribes are the wards of the nation. The are
communities dependent on the United States. dependent largely for their daily
food. Dependent for their political rights. They owe no allegiance to the States,
and receive from the no protection. Because of the local ill feeling, the people
of the States where they are found are often their deadliest enemies. From
their very weakness and helplessness, so largely due to the course of dealing of
the Federal Government with them and the treaties in which it has been
promised, there arise the duty of protection, and with it the power. This has
always been recognized by the Executive and by Congress, and by this court,
whenever the question has arisen . . . The power of the General Government
over these remnants of race once powerful, now weak and diminished in
numbers, is necessary to their protection, as well as to the safety of those
among whom they dwell. it must exist in that government, because it never has

existed anywhere else, because the theater of its exercise is within the
geographical limits of the United States, because it has never been denied, and
because it alone can enforce its laws on all the tribes.
In the later case of United States vs. Sandoval ([1913], 231 U.S., 28) the question to be
considered was whether the status of the Pueblo Indians and their lands was such that
Congress could prohibit the introduction of intoxicating liquor into those lands
notwithstanding the admission of New Mexico to statehood. The court looked to the
reports of the different superintendent charged with guarding their interests and founds
that these Indians are dependent upon the fostering care and protection of the
government "like reservation Indians in general." Continuing, the court said "that during
the Spanish dominion, the Indians of the pueblos were treated as wards requiring
special protection, where subjected to restraints and official supervisions in the
alienation of their property." And finally, we not the following: "Not only does the
Constitution expressly authorize Congress to regulate commerce with the Indians tribes,
but long-continued legislative and executive usage and an unbroken current of judicial
decisions have attributed to the United States as a superior and civilized nation the
power and the duty of exercising a fostering care and protection over all dependent
Indian communities within its borders, whether within its original territory or territory
subsequently acquired, and whether within or without the limits of a state."
With reference to laws affecting the Indians, it has been held that it is not within the
power of the courts to overrule the judgment of Congress. For very good reason, the
subject has always been deemed political in nature, not subject to the jurisdiction of the
judicial department of the government. (Matter of Heff [1905], 197 U.S., 488;
U.S. vs. Celestine
[1909],
215
U.S.,
278;
U.S. vs. Sandoval, supra;
Worcester vs. Georgia, supra; U.S.vs. Rogers [1846], 4 How., 567; the Cherokee Tobacco
[1871], 11 Wall, 616; Roff vs. Burney [1897], 168 U.S., 218; Thomas vs. Gay [1898], 169
U.S.., 264; Lone Wolf vs. Hitchcock[1903], 187 U.S., 553; Wallace vs. Adams [1907], 204
U.S., 415; Conley vs. Bollinger [1910], 216 U.S., 84; Tiger vs. Western Invest. Co. [1911],
221 U.S., 286; U.S. vs. Lane [1913], 232 U.S.., 598; Cyr vs. Walker (1911], 29 Okla, 281;
35 L.R.A. [N. S.], 795.) Whenever, therefore, the United States sets apart any public land
as an Indian reservation, it has full authority to pass such laws and authorize such
measures as may be necessary to give to the Indians thereon full protection in their
persons and property. (U.S. vs. Thomas [1894], 151 U.S., 577.)
All this borne out by long-continued legislative and executive usage, and an unbroken
line of judicial decisions.
The only case which is even remotely in point and which, if followed literally, might
result in the issuance ofhabeas corpus, is that of United States vs. Crook ([1879], Fed.
Cas. No. 14891). This was a hearing upon return to a writ of habeas corpus issued
against Brigadier General George Crook at the relation of Standing Bear and other
Indians, formerly belonging to the Ponca Tribe of Indians. The petition alleged in
substance that the relators are Indians who have formerly belonged to the Ponca tribe
of Indians, now located in the Indian Territory; that they had some time previously

withdrawn from the tribe, and completely severed their tribal relations therewith, and
had adopted the general habits of the whites, and were then endeavoring to maintain
themselves by their own exertions, and without aid or assistance from the general
government; that whilst they were thus engaged, and without being guilty of violating
any of the laws of the United States, they were arrested and restrained of their liberty
by order of the respondent, George Crook. The substance of the return to the writ was
that the relators are individual members of, and connected with, the Ponca tribe of
Indians; that they had fled or escaped form a reservation situated some place within the
limits of the Indian Territory had departed therefrom without permission from the
Government; and, at the request of the Secretary of the Interior, the General of the
Army had issued an order which required the respondent to arrest and return the
relators to their tribe in the Indian Territory, and that, pursuant to the said order, he had
caused the relators to be arrested on the Omaha Indian Territory.
The first question was whether an Indian can test the validity of an illegal imprisonment
by habeas corpus. The second question, of much greater importance, related to the
right of the Government to arrest and hold the relators for a time, for the purpose of
being returned to the Indian Territory from which it was alleged the Indian escaped. In
discussing this question, the court reviewed the policy the Government had adopted in
its dealing with the friendly tribe of Poncase. Then, continuing, the court said: "Laws
passed for the government of the Indian country, and for the purpose of regulating
trade and intercourse with the Indian tribes, confer upon certain officers of the
Government almost unlimited power over the persons who go upon the reservations
without lawful authority . . . Whether such an extensive discretionary power is wisely
vested in the commissioner of Indian affairs or not , need not be questioned. It is
enough to know that the power rightfully exists, and, where existing, the exercise of the
power must be upheld." The decision concluded as follows:
The reasoning advanced in support of my views, leads me to conclude:
1. that an Indian is a 'person' within the meaning of the laws of the United
States, and has, therefore, the right to sue out a writ of habeas corpus in a
federal court, or before a federal judge, in all cases where he may be confined
or in custody under color of authority of the United States or where he is
restrained of liberty in violation of the constitution or laws of the United States.
2. That General George Crook, the respondent, being commander of the
military department of the Platte, has the custody of the relators, under color
of authority of the United States, and in violation of the laws therefore.
3. That n rightful authority exists for removing by force any of the relators to
the Indian Territory, as the respondent has been directed to do.
4. that the Indians possess the inherent right of expatriation, as well as the
more fortunate white race, and have the inalienable right to "life, liberty, and

the pursuit of happiness," so long as they obey the laws and do not trespass on
forbidden ground. And,
5. Being restrained of liberty under color of authority of the United States, and
in violation of the laws thereof, the relators must be discharged from custody,
and it is so ordered.
As far as the first point is concerned, the decision just quoted could be used as authority
to determine that Rubi, the Manguian petitioner, a Filipino, and a citizen of the
Philippine Islands, is a "person" within the meaning of theHabeas Corpus Act, and as
such, entitled to sue out a writ in the Philippine courts. (See also In re Race Horse
[1895], 70 Fed., 598.) We so decide.
As to the second point the facts in the Standing Bear case an the Rubi case are not
exactly identical. But even admitting similarity of facts, yet it is known to all that Indian
reservations do exist in the United States, that Indians have been taken from different
parts of the country and placed on these reservation, without any previous consultation
as to their own wishes, and that, when once so located, they have been made to remain
on the reservation for their own good and for the general good of the country. If any
lesson can be drawn form the Indian policy of the United States, it is that the
determination of this policy is for the legislative and executive branches of the
government and that when once so decided upon, the courts should not interfere to
upset a carefully planned governmental system. Perhaps, just as may forceful reasons
exists for the segregation as existed for the segregation of the different Indian tribes in
the United States.
IV. CONSTITUTIONAL QUESTIONS.
A. DELEGATION OF LEGISLATIVE POWER.
The first constitutional objection which confronts us is that the Legislature could not
delegate this power to provincial authorities. In so attempting, it is contended, the
Philippine Legislature has abdicated its authority and avoided its full responsibility.
That the maxim of Constitutional Law forbidding the delegation of legislative power
should be zealously protected, we agree. An understanding of the rule will, however,
disclose that it has not bee violated in his instance.
The rule has nowhere been better stated than in the early Ohio case decided by Judge
Ranney, and since followed in a multitude of case, namely: "The true distinction
therefore is between the delegation of power to make the law, which necessarily
involves a discretion as to what it shall be, and conferring an authority or discretion as
to its execution, to be exercised under and in pursuance of the law. The first cannot be
done; to the later no valid objection can be made." (Cincinnati, W. & Z. R.
Co. vs. Comm'rs. Clinton County [1852], 1 Ohio S.t, 88.) Discretion, as held by Chief
Justice Marshall in Wayman vs. Southard ([1825], 10 Wheat., 1) may be committed by

the Legislature to an executive department or official. The Legislature may make

decisions of executive departments of subordinate official thereof, to whom t has
committed the execution of certain acts, final on questions of fact. (U.S. vs. Kinkead
[1918], 248 Fed., 141.) The growing tendency in the decision is to give prominence to
the "necessity" of the case.
Is not all this exactly what the Legislature has attempted to accomplish by the
enactment of section 21454 of the Administrative Code? Has not the Legislature merely
conferred upon the provincial governor, with the approval of the provincial board and
the Department Head, discretionary authority as to the execution of the law? Is not this
"necessary"?
The case of West vs. Hitchock, ([1906], 205 U.S., 80) was a petition for mandamus to
require the Secretary of the Interior to approve the selection and taking of one hundred
and sixty acres by the relator out of the lands ceded to the United States by the Wichita
and affiliated bands of Indians. Section 463 of the United States Revised Statutes
provided: "The Commissioner of Indian Affairs shall, under the direction of the Secretary
of the Interior, and agreeably to such regulations as the President may prescribe, have
the management of all Indian affairs, and of all matters arising out to the Indian
relations." Justice Holmes said: "We should hesitate a good deal, especially in view of
the long established practice of the Department, before saying that this language was
not broad enough to warrant a regulation obviously made for the welfare of the rather
helpless people concerned. The power of Congress is not doubted. The Indians have
been treated as wards of the nation. Some such supervision was necessary, and has
been exercised. In the absence of special provisions naturally it would be exercised by
the Indian Department." (See also as corroborative authority, it any is needed, Union
Bridge Co. vs. U.S. [1907], 204 U.S.., 364, reviewing the previous decisions of the United
States Supreme Court: U.S. vs. Lane [1914], 232 U.S., 598.)
There is another aspect of the question, which once accepted, is decisive. An exception
to the general rule. sanctioned by immemorial practice, permits the central legislative
body to delegate legislative powers to local authorities. The Philippine Legislature has
here conferred authority upon the Province of Mindoro, to be exercised by the
provincial governor and the provincial board.
Who but the provincial governor and the provincial board, as the official representatives
of the province, are better qualified to judge "when such as course is deemed necessary
in the interest of law and order?" As officials charged with the administration of the
province and the protection of its inhabitants, who but they are better fitted to select
sites which have the conditions most favorable for improving the people who have the
misfortune of being in a backward state?
Section 2145 of the Administrative Code of 1917 is not an unlawful delegation of
legislative power by the Philippine Legislature to provincial official and a department
head.

B. RELIGIOUS DISCRIMINATION
The attorney de officio, for petitioners, in a truly remarkable brief, submitted on behalf
of his unknown clients, says that "The statute is perfectly clear and unambiguous. In
limpid English, and in words as plain and unequivocal as language can express, it
provides for the segregation of 'non-Christians' and none other." The inevitable result,
them, is that the law "constitutes an attempt by the Legislature to discriminate between
individuals because of their religious beliefs, and is, consequently, unconstitutional."
Counsel's premise once being conceded, his arguments is answerable the Legislature
must be understood to mean what it has plainly expressed; judicial construction is then
excluded; religious equality is demanded by the Organic Law; the statute has violated
this constitutional guaranty, and Q. E. D. is invalid. But, as hereinbefore stated, we do
not feel free to discard the long continued meaning given to a common expression,
especially as classification of inhabitants according to religious belief leads the court to
what it should avoid, the nullification of legislative action. We hold that the term "nonChristian" refers to natives of the Philippines Islands of a low grade of civilization, and
that section 2145 of the Administrative Code of 1917, does not discriminate between
individuals an account of religious differences.
C. LIBERTY; DUE PROCESS OF LAW; EQUAL PROTECTION OF THE LAWS.
The third constitutional argument is grounded on those portions of the President's
instructions of to the Commission, the Philippine Bill, and the Jones Law, providing "That
no law shall be enacted in said Islands which shall deprive any person of life, liberty, or
property without due process of law, or deny to any person therein the equal protection
of the laws." This constitutional limitation is derived from the Fourteenth Amendment
to the United States Constitution and these provisions, it has been said "are universal
in their application, to all persons within the territorial jurisdiction, without regard to
any differences of race, of color, or of nationality." (Yick Wo vs. Hopkins [1886], 118
U.S., 356.) The protection afforded the individual is then as much for the non-Christian
as for the Christian.
The conception of civil liberty has been variously expressed thus:
Every man may claim the fullest liberty to exercise his faculties, compatible
with the possession of like liberty by every other. (Spencer, Social Statistics, p.
94.)
Liberty is the creature of law, essentially different from that authorized
licentiousness that trespasses on right. That authorized licentiousness that
trespasses on right. It is a legal and a refined idea, the offspring of high
civilization, which the savage never understood, and never can understand.
Liberty exists in proportion to wholesome restraint; the more restraint on
others to keep off from us, the more liberty we have . . . that man is free who is
protected from injury. (II Webster's Works, p. 393.)

Liberty consists in the ability to do what one caught to desire and in not being
forced to do what one ought not do desire. (Montesque, spirit of the Laws.)
Even liberty itself, the greatest of all rights, is no unrestricted license to ac
according to one's own will. It is only freedom from restraint under conditions
essential to the equal enjoyment of the same right by others. (Field, J., in
Crowley vs. Christensen [1890], 137 U.S., 86.)
Liberty does not import "an absolute right in each person to be, at all times and
in all circumstances, wholly freed from restraint. There are manifold restraints
to which every person is necessarily subject for the common good. On any
other basis, organized society could not exist with safety to its members.
Society based on the rule that each one is a law unto himself would soon be
confronted with disorder and anarchy. Real liberty for all could not exist under
the operation of a principle which recognizes the right of each individual
person to use his own, whether in respect of his person or his property,
regardless of the injury that may be done to others . . . There is, of course, a
sphere with which the individual may asserts the supremacy of his own will,
and rightfully dispute the authority of any human government especially of
any free government existing under a written Constitution to interfere with
the exercise of that will. But it is equally true that in very well-ordered society
charged with the duty of conserving the safety of its members, the rights of the
individual in respect of his liberty may at times, under the pressure of great
dangers, be subjected to such restraint to be enforced by reasonable
regulations, as the safety of the general public may demand." (Harlan, J., In
Jacobson vs. Massachusetts [1905] 197 U.S., 11.)
Liberty is freedom to do right and never wrong; it is ever guided by reason and
the upright and honorable conscience of the individual. (Apolinario Mabini.)
Civil Liberty may be said to mean that measure of freedom which may be enjoyed in a
civilized community, consistently with the peaceful enjoyment of like freedom in others.
The right to Liberty guaranteed by the Constitution includes the right to exist and the
right to be free from arbitrary personal restraint or servitude. The term cannot be
dwarfed into mere freedom from physical restraint of the person of the citizen, but is
deemed to embrace the right of man to enjoy the faculties with which he has been
endowed by this Creator, subject only to such restraints as are necessary for the
common welfare. As enunciated in a long array of authorities including epoch-making
decisions of the United States Supreme Court, Liberty includes the right of the citizens
to be free to use his faculties in all lawful ways; to live an work where he will; to earn his
livelihood by an lawful calling; to pursue any avocations, an for that purpose. to enter
into all contracts which may be proper, necessary, and essential to his carrying out these
purposes to a successful conclusion. The chief elements of the guaranty are the right to
contract, the right to choose one's employment, the right to labor, and the right of
locomotion.

In general, it may be said that Liberty means the opportunity to do those things which
are ordinarily done by free men. (There can be noted Cummings vs. Missouri [1866], 4
Wall, 277; Wilkinson vs. Leland [1829], 2 Pet., 627; Williams vs. Fears [1900], 179 U.S.,
274; Allgeyer vs. Louisiana [1896], 165, U.S., 578; State vs. Kreutzberg [1902], 114 Wis.,
530. See 6 R.C.L., 258, 261.)
One thought which runs through all these different conceptions of Liberty is plainly
apparent. It is this: "Liberty" as understood in democracies, is not license; it is "Liberty
regulated by law." Implied in the term is restraint by law for the good of the individual
and for the greater good of the peace and order of society and the general well-being.
No man can do exactly as he pleases. Every man must renounce unbridled license. The
right of the individual is necessarily subject to reasonable restraint by general law for
the common good. Whenever and wherever the natural rights of citizen would, if
exercises without restraint, deprive other citizens of rights which are also and equally
natural, such assumed rights must yield to the regulation of law. The Liberty of the
citizens may be restrained in the interest of the public health, or of the public order and
safety, or otherwise within the proper scope of the police power. (See Hall vs. GeigerJones [1916], 242 U.S., 539; Hardie-Tynes Manufacturing Co. vs.Cruz [1914], 189 Al., 66.)
None of the rights of the citizen can be taken away except by due process of law. Daniel
Webster, in the course of the argument in the Dartmouth College Case before the
United States Supreme Court, since a classic in forensic literature, said that the meaning
of "due process of law" is, that "every citizen shall hold his life, liberty, property, an
immunities under the protection of the general rules which govern society." To
constitute "due process of law," as has been often held, a judicial proceeding is not
always necessary. In some instances, even a hearing and notice are not requisite a rule
which is especially true where much must be left to the discretion of the administrative
officers in applying a law to particular cases. (See McGehee, Due Process of Law, p. 371.)
Neither is due process a stationary and blind sentinel of liberty. "Any legal proceeding
enforced by public authority, whether sanctioned by age and customs, or newly devised
in the discretion of the legislative power, in furtherance of the public good, which
regards and preserves these principles of liberty and justice, must be held to be due
process of law." (Hurtado vs. California [1883], 110, U.S., 516.) "Due process of law"
means simply . . . "first, that there shall be a law prescribed in harmony with the general
powers of the legislative department of the Government; second, that this law shall be
reasonable in its operation; third, that it shall be enforced according to the regular
methods of procedure prescribed; and fourth, that it shall be applicable alike to all the
citizens of the state or to all of a class." (U.S. vs. Ling Su Fan [1908], 10 Phil., 104,
affirmed on appeal to the United States Supreme Court. 1) "What is due process of law
depends on circumstances. It varies with the subject-matter and necessities of the
situation." (Moyer vs. Peablody [1909], 212 U. S., 82.)
The pledge that no person shall be denied the equal protection of the laws is not
infringed by a statute which is applicable to all of a class. The classification must have a
reasonable basis and cannot be purely arbitrary in nature.

We break off with the foregoing statement, leaving the logical deductions to be made
later on.
D. SLAVERY AND INVOLUNTARY SERVITUDE.
The fourth constitutional contention of petitioner relates to the Thirteen Amendment to
the United States Constitution particularly as found in those portions of Philippine
Organic Law providing "That slavery shall not exist in said Islands; nor shall involuntary
servitude exist except as a punishment for crime whereof the party shall have been duly
convicted." It is quite possible that the Thirteenth Amendment, since reaching to "any
place subject to" the "jurisdiction" of the United States, has force in the Philippine.
However this may be, the Philippine Legislature has, by adoption, with necessary
modifications, of sections 268 to 271 inclusive of the United States Criminal Code,
prescribed the punishment for these crimes. Slavery and involuntary servitude, together
wit their corollary, peonage, all denote "a condition of enforced, compulsory service of
one to another." (Hodges vs. U.S. [1906], 203 U.S., 1.) The term of broadest scope is
possibly involuntary servitude. It has been applied to any servitude in fact involuntary,
no matter under what form such servitude may have been disguised.
(Bailey vs. Alabama [1910], 219 U.S., 219.)
So much for an analysis of those constitutional provisions on which petitioners rely for
their freedom. Next must come a description of the police power under which the State
must act if section 2145 is to be held valid.
E. THE POLICE POWER.
Not attempting to phrase a definition of police power, all that it is necessary to note at
this moment is the farreaching scope of the power, that it has become almost possible
to limit its weep, and that among its purposes is the power to prescribe regulations to
promote the health, peace, morals, education, and good order of the people, and to
legislate so as to increase the industries of the State, develop its resources and add to is
wealth and prosperity. (See Barbier vs. Connolly [1884], 113 U.S., 27.) What we are not
interested in is the right of the government to restrain liberty by the exercise of the
police power.
"The police power of the State," one court has said, . . . "is a power coextensive with
self-protection, and is not inaptly termed the 'law of overruling necessity.' It may be said
to be that inherent and plenary power in the State which enables it to prohibit all things
hurtful to the comfort, safety and welfare of society." (Lake View vs. Rose Hill Cemetery
Co. [1873], 70 Ill., 191.) Carried onward by the current of legislation, the judiciary rarely
attempt to dam the on rushing power of legislative discretion, provided the purposes of
the law do not go beyond the great principles that mean security for the public welfare
or do not arbitrarily interfere with the right of the individual.
The Government of the Philippine Islands has both on reason and authority the right to
exercise the sovereign police power in the promotion of the general welfare and the

public interest. "There can be not doubt that the exercise of the police power of the
Philippine Government belongs to the Legislature and that this power is limited only by
the Acts of Congress and those fundamental principles which lie at the foundation of all
republican forms of government." (Churchill and Tait vs. Rafferty [1915], 32 Phil., 580;
U.S. vs. Pompeya [1915], 31 Phil., 245.)

them useful citizens of this country. To permit them to live a wayfaring

life will ultimately result in a burden to the state and on account of
their ignorance, they will commit crimes and make depredation, or if
not they will be subject to involuntary servitude by those who may
want to abuse them."

With the foregoing approximation of the applicable basic principles before us, before
finally deciding whether any constitutional provision has indeed been violated by
section 2145 of the Administrative Code, we should endeavor to ascertain the intention
of the Legislature in enacting this section. If legally possible, such legislative intention
should be effectuated.

The Secretary of the Interior, who is the official charged with the supervision of all the
non-Christian people, has adopted as the polaris of his administration "the
advancement of the non-Christian elements of our population to equality and
unification with the highly civilized Christian inhabitants." This is carried on by the
adoption of the following measures:

F. LEGISLATIVE INTENT.
The preamble of the resolution of the provincial board of Mindoro which set apart the
Tigbao reservation, it will be remembered, assigned as reasons fort the action, the
following: (1) The failure of former attempts for the advancement of the non-Christian
people of the province; and (2) the only successfully method for educating the
Manguianes was to oblige them to live in a permanent settlement. The Solicitor-General
adds the following; (3) The protection of the Manguianes; (4) the protection of the
public forests in which they roam; (5) the necessity of introducing civilized customs
among the Manguianes.
The present Secretary of the Interior says of the Tigbao reservation and of the motives
for its selection, the following:
To inform himself of the conditions of those Manguianes who were taken
together to Tigbao, the Secretary of the Interior on June 10 to 13, 1918, made a
trip to the place. There he found that the site selected is a good one; that
creditable progress has been made in the clearing of forests, construction of
buildings, etc., that there appears to be encouraging reaction by the boys to
the work of the school the requirements of which they appear to meet with
enthusiastic interest after the first weeks which are necessarily a somewhat
trying period for children wholly unaccustomed to orderly behaviour and habit
of life. He also gathered the impression that the results obtained during the
period of less than one year since the beginning of the institution definitely
justify its continuance and development.
Of course, there were many who were protesting against that segregation.
Such was naturally to be expected. But the Secretary of the Interior, upon his
return to Manila, made the following statement to the press:
"It is not deemed wise to abandon the present policy over those who
prefer to live a nomadic life and evade the influence of civilization. The
Government will follow its policy to organize them into political
communities and to educate their children with the object of making

(a) Pursuance of the closer settlement policy whereby people of seminomadic

race are induced to leave their wild habitat and settle in organized
communities.
(b) The extension of the public school system and the system of public health
throughout the regions inhabited by the non-Christian people.
(c) The extention of public works throughout the Mohammedan regions to
facilitate their development and the extention of government control.
(d) Construction of roads and trials between one place and another among
non-Christians, to promote social and commercial intercourse and maintain
amicable relations among them and with the Christian people.
(e) Pursuance of the development of natural economic resources, especially
agriculture.
( f ) The encouragement of immigration into, and of the investment of private
capital in, the fertile regions of Mindanao and Sulu.
The Secretary adds:
To attain the end desired, work of a civilizing influence have been continued
among the non-Christian people. These people are being taught and guided to
improve their living conditions in order that they may fully appreciate the
benefits of civilization. Those of them who are still given to nomadic habits are
being persuaded to abandon their wild habitat and settle in organized
settlements. They are being made to understand that it is the purpose of the
Government to organize them politically into fixed and per manent
communities, thus bringing them under the control of the Government, to aid
them to live and work, protect them from involuntary servitude and abuse,
educate their children, and show them the advantages of leading a civilized life
with their civilized brothers. In short, they are being impressed with the

purposes and objectives of the Government of leading them to economic,

social, and political equality, and unification with the more highly civilized
inhabitants of the country. (See Report of the Department for 1917.)
The fundamental objective of governmental policy is to establish friendly relations with
the so-called non-Christians, and to promote their educational, agricultural, industrial,
and economic development and advancement in civilization. (Note Acts Nos. 2208,
2404, 2444.) Act No. 2674 in reestablishing the Bureau of non-Christian Tribes, defines
the aim of the Government towards the non-Christian people in the following
unequivocal terms:
It shall be the duty of the Bureau of non-Christian Tribes to continue the work
for advancement and liberty in favor of the region inhabited by non-Christian
Filipinos and foster by all adequate means and in a systematical, rapid, and
complete manner the moral, material, economic, social, and political
development of those regions, always having in view the aim of rendering
permanent the mutual intelligence between, and complete fusion of, all the
Christian and non-Christian elements populating the provinces of the
Archipelago. (Sec. 3.)
May the Manguianes not be considered, as are the Indians in the United States, proper
wards of the Filipino people? By the fostering care of a wise Government, may not these
unfortunates advance in the "habits and arts of civilization?" Would it be advisable for
the courts to intrude upon a plan, carefully formulated, and apparently working out for
the ultimate good of these people?
In so far as the Manguianes themselves are concerned, the purpose of the Government
is evident. Here, we have on the Island of Mindoro, the Manguianes, leading a nomadic
life, making depredations on their more fortunate neighbors, uneducated in the ways of
civilization, and doing nothing for the advancement of the Philippine Islands. What the
Government wished to do by bringing than into a reservation was to gather together the
children for educational purposes, and to improve the health and morals was in fine,
to begin the process of civilization. this method was termed in Spanish times, "bringing
under the bells." The same idea adapted to the existing situation, has been followed
with reference to the Manguianes and other peoples of the same class, because it
required, if they are to be improved, that they be gathered together. On these few
reservations there live under restraint in some cases, and in other instances voluntarily,
a few thousands of the uncivilized people. Segregation really constitutes protection for
the manguianes.
Theoretically, one may assert that all men are created free and equal. Practically, we
know that the axiom is not precisely accurate. The Manguianes, for instance, are not
free, as civilized men are free, and they are not the equals of their more fortunate
brothers. True, indeed, they are citizens, with many but not all the rights which
citizenship implies. And true, indeed, they are Filipinos. But just as surely, the

Manguianes are citizens of a low degree of intelligence, and Filipinos who are a drag
upon the progress of the State.
In so far as the relation of the Manguianes to the State is concerned, the purposes of
the Legislature in enacting the law, and of the executive branch in enforcing it, are again
plain. Settlers in Mindoro must have their crops and persons protected from predatory
men, or they will leave the country. It is no argument to say that such crimes are
punished by the Penal Code, because these penalties are imposed after commission of
the offense and not before. If immigrants are to be encouraged to develop the
resources of the great Islands of Mindoro, and its, as yet, unproductive regions, the
Government must be in a position to guarantee peace and order.
Waste lands do not produce wealth. Waste people do not advance the interest of the
State. Illiteracy and thriftlessness are not conducive to homogeneity. The State to
protect itself from destruction must prod on the laggard and the sluggard. The great law
of overwhelming necessity is all convincing.
To quote again from the instructive memorandum of the Secretary of the Interior:
Living a nomadic and a wayfaring life and evading the influence of civilization,
they (the manguianes) are engaged in the works of destruction burning and
destroying the forests and making illegal caigins thereon. Not bringing any
benefit to the State but instead injuring and damaging its interests, what will
ultimately become of these people with the sort of liberty they wish to
preserve and for which they are now fighting in court? They will ultimately
become a heavy burden to the State and on account of their ignorance they
will commit crimes and make depredations, or if not they will be subjected to
involuntary servitude by those who may want to abuse them.
There is no doubt in my mind that this people a right conception of liberty and
does not practice liberty in a rightful way. They understand liberty as the right
to do anything they will going from one place to another in the mountains,
burning and destroying forests and making illegal caigins thereon.
Not knowing what true liberty is and not practising the same rightfully, how can
they allege that they are being deprived thereof without due process of law?
xxx

xxx

xxx

But does the Constitutional guaranty that 'no person shall be deprived of his
liberty without due process of law' apply to a class of persons who do not have
a correct idea of what liberty is and do not practise liberty in a rightful way?
To say that it does will mean to sanction and defend an erroneous idea of such
class of persons as to what liberty is. It will mean, in the case at bar, that the

Government should not adopt any measures looking to the welfare and
advancement of the class of persons in question. It will mean that this people
should be let along in the mountains and in a permanent state of savagery
without even the remotest hope of coming to understand liberty in its true and
noble sense.
In dealing with the backward population, like the Manguianes, the Government
has been placed in the alternative of either letting them alone or guiding them
in the path of civilization. The latter measure was adopted as the one more in
accord with humanity and with national conscience.
xxx

xxx

xxx

The national legislation on the subject of non-Christian people has tended

more and more towards the education and civilization of such people and
fitting them to be citizens. The progress of those people under the tutelage of
the Government is indeed encouraging and the signs of the times point to a day
which is not far distant when they will become useful citizens. In the light of
what has already been accomplished which has been winning the gratitude of
most of the backward people, shall we give up the noble work simply because a
certain element, believing that their personal interests would be injured by
such a measure has come forward and challenged the authority of the
Government to lead this people in the pat of civilization? Shall we, after
expending sweat, treasure, and even blood only to redeem this people from
the claws of ignorance and superstition, now willingly retire because there has
been erroneously invoked in their favor that Constitutional guaranty that no
person shall be deprived of his liberty without due process of law? To allow
them to successfully invoke that Constitutional guaranty at this time will leave
the Government without recourse to pursue the works of civilizing them and
making them useful citizens. They will thus left in a permanent state of
savagery and become a vulnerable point to attack by those who doubt, nay
challenge, the ability of the nation to deal with our backward brothers.
The manguianes in question have been directed to live together at Tigbao.
There they are being taught and guided to improve their living conditions. They
are being made to understand that they object of the government is to
organize them politically into fixed and permanent communities. They are
being aided to live and work. Their children are being educated in a school
especially established for them. In short, everything is being done from them in
order that their advancement in civilization and material prosperity may be
assured. Certainly their living together in Tigbao does not make them slaves or
put them in a condition compelled to do services for another. They do not work
for anybody but for themselves. There is, therefore, no involuntary servitude.
But they are compelled to live there and prohibited from emigrating to some
other places under penalty of imprisonment. Attention in this connection is

invited to the fact that this people, living a nomadic and wayfaring life, do not
have permanent individual property. They move from one place to another as
the conditions of living warrants, and the entire space where they are roving
about is the property of the nation, the greater part being lands of public
domain. Wandering from one place to another on the public lands, why can not
the government adopt a measure to concentrate them in a certain fixed place
on the public lands, instead of permitting them to roam all over the entire
territory? This measure is necessary both in the interest of the public as owner
of the lands about which they are roving and for the proper accomplishment of
the purposes and objectives of the government. For as people accustomed to
nomadic habit, they will always long to return to the mountains and follow a
wayfaring life, and unless a penalty is provinced for, you can not make them
live together and the noble intention of the Government of organizing them
politically will come to naught.
G. APPLICATION AND CONCLUSION.
Our exhaustive study should have left us in a position to answer specific objections and
to reach a general conclusion.
In the first place, it is argued that the citizen has the right, generally speaking, to go
where he pleases. Could be not, however, be kept away from certain localities ? To
furnish an example from the Indian legislation. The early Act of Congress of 1802 (2 U.S.
Stat. at L., p. 141) Indian reservation. Those citizens certainly did not possess absolute
freedom of locomotion. Again the same law provided for the apprehension of
marauding Indians. Without any doubt, this law and other similar were accepted and
followed time and again without question.
It is said that, if we hold this section to be constitutional, we leave this weak and
defenseless people confined as in a prison at the mercy of unscrupulous official. What, it
is asked, would be the remedy of any oppressed Manguian? The answer would naturally
be that the official into whose hands are given the enforcement of the law would have
little or not motive to oppress these people; on the contrary, the presumption would all
be that they would endeavor to carry out the purposes of the law intelligently and
patriotically. If, indeed, they did ill-treat any person thus confined, there always exists
the power of removal in the hands of superior officers, and the courts are always open
for a redress of grievances. When, however, only the validity of the law is generally
challenged and no particular case of oppression is called to the attention of the courts, it
would seems that the Judiciary should not unnecessarily hamper the Government in the
accomplishment of its laudable purpose.
The question is above all one of sociology. How far, consistently with freedom, may the
right and liberties of the individual members of society be subordinated to the will of
the Government? It is a question which has assailed the very existence of government
from the beginning of time. Now purely an ethical or philosophical subject, nor now to
be decided by force, it has been transferred to the peaceful forum of the Judiciary. In

resolving such an issue, the Judiciary must realize that the very existence of government
renders imperatives a power to restrain the individual to some extent, dependent, of
course, on the necessities of the class attempted to be benefited. As to the particular
degree to which the Legislature and the Executive can go in interfering with the rights of
the citizen, this is, and for a along time to come will be, impossible for the courts to
determine.
The doctrines of laissez faire and of unrestricted freedom of the individual, as axioms of
economics and political theory, are of the past. The modern period has shown as
widespread belief in the amplest possible demonstration of governmental activity. The
courts unfortunately have sometimes seemed to trial after the other two branches of
the government in this progressive march.
Considered, therefore, purely as an exercise of the police power, the courts cannot fairly
say that the Legislature has exceeded its rightful authority. it is, indeed, an unusual
exercise of that power. But a great malady requires an equally drastic remedy.
Further, one cannot hold that the liberty of the citizen is unduly interfered without
when the degree of civilization of the Manguianes is considered. They are restrained for
their own good and the general good of the Philippines. Nor can one say that due
process of law has not been followed. To go back to our definition of due process of law
and equal protection of the law, there exists a law ; the law seems to be reasonable; it is
enforced according to the regular methods of procedure prescribed; and it applies alike
to all of a class.
As a point which has been left for the end of this decision and which, in case of doubt,
would lead to the determination that section 2145 is valid. it the attitude which the
courts should assume towards the settled policy of the Government. In a late decision
with which we are in full accord, Gambles vs. Vanderbilt University (200 Southwestern
Reporter, 510) the Chief Justice of the Supreme Court of Tennessee writes:

intelligence. If the Philippines is to be a rich and powerful country, Mindoro must be

populated, and its fertile regions must be developed. The public policy of the
Government of the Philippine Islands is shaped with a view to benefit the Filipino people
as a whole. The Manguianes, in order to fulfill this governmental policy, must be
confined for a time, as we have said, for their own good and the good of the country.
Most cautiously should the power of this court to overrule the judgment of the
Philippine Legislature, a coordinate branch, be exercised. The whole tendency of the
best considered case is toward non-interference on the part of the courts whenever
political ideas are the moving consideration. Justice Holmes, in one of the aphorisms for
which he is justly famous, said that "constitutional law, like other mortal contrivances,
has to take some chances." (Blinn vs. Nelson [1911], 222 U.S., 1.) If in the final decision
of the many grave questions which this case presents, the courts must take "a chance,"
it should be with a view to upholding the law, with a view to the effectuation of the
general governmental policy, and with a view to the court's performing its duty in no
narrow and bigoted sense, but with that broad conception which will make the courts as
progressive and effective a force as are the other departments of the Government.
We are of the opinion that action pursuant to section 2145 of the Administrative Code
does not deprive a person of his liberty without due process of law and does not deny to
him the equal protection of the laws, and that confinement in reservations in
accordance with said section does not constitute slavery and involuntary servitude. We
are further of the opinion that section 2145 of the Administrative Code is a legitimate
exertion of the police power, somewhat analogous to the Indian policy of the United
States. Section 2145 of the Administrative Code of 1917 is constitutional.
Petitioners are not unlawfully imprisoned or restrained of their liberty. Habeas corpus
can, therefore, not issue. This is the true ruling of the court. Costs shall be taxes against
petitioners. So ordered.
Arellano, C.J., Torres and Avancea, JJ., concur.

We can seen objection to the application of public policy as a ratio decidendi. Every
really new question that comes before the courts is, in the last analysis, determined on
that theory, when not determined by differentiation of the principle of a prior case or
line of cases, or by the aid of analogies furnished by such prior case. In balancing
conflicting solutions, that one is perceived to tip the scales which the court believes will
best promote the public welfare in its probable operation as a general rule or principle.
But public policy is not a thing inflexible. No court is wise enough to forecast its
influence in all possible contingencies. Distinctions must be made from time to time as
sound reason and a true sense of justice may dictate."
Our attempt at giving a brief history of the Philippines with reference to the so-called
non-Christians has been in vain, if we fail to realize that a consistent governmental
policy has been effective in the Philippines from early days to the present. The idea to
unify the people of the Philippines so that they may approach the highest conception of
nationality. If all are to be equal before the law, all must be approximately equal in

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-24693

July 31, 1967

ERMITA-MALATE HOTEL AND MOTEL OPERATORS ASSOCIATION, INC., HOTEL DEL

MAR INC. and GO CHIU, petitioners-appellees,
vs.
THE HONORABLE CITY MAYOR OF MANILA, respondent-appellant.
VICTOR ALABANZA, intervenor-appellee.
Panganiban, Abad and Associates Law Office for respondent-appellant.
J. M. Aruego, Tenchavez and Associates for intervenor-appellee.
FERNANDO, J.:
The principal question in this appeal from a judgment of the lower court in an action for
prohibition is whether Ordinance No. 4760 of the City of Manila is violative of the due
process clause. The lower court held that it is and adjudged it "unconstitutional, and,
therefore, null and void." For reasons to be more specifically set forth, such judgment
must be reversed, there being a failure of the requisite showing to sustain an attack
against its validity.
The petition for prohibition against Ordinance No. 4760 was filed on July 5, 1963 by the
petitioners, Ermita-Malate Hotel and Motel Operators Association, one of its members,
Hotel del Mar Inc., and a certain Go Chiu, who is "the president and general manager of
the second petitioner" against the respondent Mayor of the City of Manila who was
sued in his capacity as such "charged with the general power and duty to enforce
ordinances of the City of Manila and to give the necessary orders for the faithful
execution and enforcement of such ordinances." (par. 1). It was alleged that the
petitioner non-stock corporation is dedicated to the promotion and protection of the
interest of its eighteen (18) members "operating hotels and motels, characterized as
legitimate businesses duly licensed by both national and city authorities, regularly
paying taxes, employing and giving livelihood to not less than 2,500 person and
1
representing an investment of more than P3 million." (par. 2). It was then alleged that
on June 13, 1963, the Municipal Board of the City of Manila enacted Ordinance No.
4760, approved on June 14, 1963 by the then Vice-Mayor Herminio Astorga, who was at
the time acting as Mayor of the City of Manila. (par. 3).
After which the alleged grievances against the ordinance were set forth in detail. There
was the assertion of its being beyond the powers of the Municipal Board of the City of
Manila to enact insofar as it would regulate motels, on the ground that in the revised
charter of the City of Manila or in any other law, no reference is made to motels; that

Section 1 of the challenged ordinance is unconstitutional and void for being

unreasonable and violative of due process insofar as it would impose P6,000.00 fee per
annum for first class motels and P4,500.00 for second class motels; that the provision in
the same section which would require the owner, manager, keeper or duly authorized
representative of a hotel, motel, or lodging house to refrain from entertaining or
accepting any guest or customer or letting any room or other quarter to any person or
persons without his filling up the prescribed form in a lobby open to public view at all
times and in his presence, wherein the surname, given name and middle name, the date
of birth, the address, the occupation, the sex, the nationality, the length of stay and the
number of companions in the room, if any, with the name, relationship, age and sex
would be specified, with data furnished as to his residence certificate as well as his
passport number, if any, coupled with a certification that a person signing such form has
personally filled it up and affixed his signature in the presence of such owner, manager,
keeper or duly authorized representative, with such registration forms and records kept
and bound together, it also being provided that the premises and facilities of such
hotels, motels and lodging houses would be open for inspection either by the City
Mayor, or the Chief of Police, or their duly authorized representatives is
unconstitutional and void again on due process grounds, not only for being arbitrary,
unreasonable or oppressive but also for being vague, indefinite and uncertain, and
likewise for the alleged invasion of the right to privacy and the guaranty against selfincrimination; that Section 2 of the challenged ordinance classifying motels into two
classes and requiring the maintenance of certain minimum facilities in first class motels
such as a telephone in each room, a dining room or, restaurant and laundry similarly
offends against the due process clause for being arbitrary, unreasonable and oppressive,
a conclusion which applies to the portion of the ordinance requiring second class motels
to have a dining room; that the provision of Section 2 of the challenged ordinance
prohibiting a person less than 18 years old from being accepted in such hotels, motels,
lodging houses, tavern or common inn unless accompanied by parents or a lawful
guardian and making it unlawful for the owner, manager, keeper or duly authorized
representative of such establishments to lease any room or portion thereof more than
twice every 24 hours, runs counter to the due process guaranty for lack of certainty and
for its unreasonable, arbitrary and oppressive character; and that insofar as the penalty
provided for in Section 4 of the challenged ordinance for a subsequent conviction
would, cause the automatic cancellation of the license of the offended party, in effect
causing the destruction of the business and loss of its investments, there is once again a
transgression of the due process clause.
There was a plea for the issuance of preliminary injunction and for a final judgment
declaring the above ordinance null and void and unenforceable. The lower court on July
6, 1963 issued a writ of preliminary injunction ordering respondent Mayor to refrain
from enforcing said Ordinance No. 4760 from and after July 8, 1963.
In the a answer filed on August 3, 1963, there was an admission of the personal
circumstances regarding the respondent Mayor and of the fact that petitioners are
licensed to engage in the hotel or motel business in the City of Manila, of the provisions
of the cited Ordinance but a denial of its alleged nullity, whether on statutory or

constitutional grounds. After setting forth that the petition did fail to state a cause of
action and that the challenged ordinance bears a reasonable relation, to a proper
purpose, which is to curb immorality, a valid and proper exercise of the police power
and that only the guests or customers not before the court could complain of the
alleged invasion of the right to privacy and the guaranty against self incrimination, with
the assertion that the issuance of the preliminary injunction ex parte was contrary to
law, respondent Mayor prayed for, its dissolution and the dismissal of the petition.

citing not only U.S. v. Salaveria, but likewise applicable American authorities. Such a
memorandum likewise refuted point by point the arguments advanced by petitioners
against its validity. Then barely two weeks later, on February 4, 1965, the memorandum
for petitioners was filed reiterating in detail what was set forth in the petition, with
citations of what they considered to be applicable American authorities and praying for
a judgment declaring the challenged ordinance "null and void and unenforceable" and
making permanent the writ of preliminary injunction issued.

Instead of evidence being offered by both parties, there was submitted a stipulation of
facts dated September 28, 1964, which reads:

After referring to the motels and hotels, which are members of the petitioners
association, and referring to the alleged constitutional questions raised by the party, the
lower court observed: "The only remaining issue here being purely a question of law,
the parties, with the nod of the Court, agreed to file memoranda and thereafter, to
submit the case for decision of the Court." It does appear obvious then that without any
evidence submitted by the parties, the decision passed upon the alleged infirmity on
constitutional grounds of the challenged ordinance, dismissing as is undoubtedly right
and proper the untenable objection on the alleged lack of authority of the City of Manila
to regulate motels, and came to the conclusion that "the challenged Ordinance No. 4760
of the City of Manila, would be unconstitutional and, therefore, null and void." It made
permanent the preliminary injunction issued against respondent Mayor and his agents
"to restrain him from enforcing the ordinance in question." Hence this appeal.

1. That the petitioners Ermita-Malate Hotel and Motel Operators Association,

Inc. and Hotel del Mar Inc. are duly organized and existing under the laws of
the Philippines, both with offices in the City of Manila, while the petitioner Go
Chin is the president and general manager of Hotel del Mar Inc., and the
intervenor Victor Alabanza is a resident of Baguio City, all having the capacity to
sue and be sued;
2. That the respondent Mayor is the duly elected and incumbent City Mayor
and chief executive of the City of Manila charged with the general power and
duty to enforce ordinances of the City of Manila and to give the necessary
orders for the faithful execution and enforcement of such ordinances;
3. That the petitioners are duly licensed to engage in the business of operating
hotels and motels in Malate and Ermita districts in Manila;
4. That on June 13, 1963, the Municipal Board of the City of Manila enacted
Ordinance No. 4760, which was approved on June 14, 1963, by Vice-Mayor
Herminio Astorga, then the acting City Mayor of Manila, in the absence of the
respondent regular City Mayor, amending sections 661, 662, 668-a, 668-b and
669 of the compilation of the ordinances of the City of Manila besides inserting
therein three new sections. This ordinance is similar to the one vetoed by the
respondent Mayor (Annex A) for the reasons stated in its 4th Indorsement
dated February 15, 1963 (Annex B);
5. That the explanatory note signed by then Councilor Herminio Astorga was
submitted with the proposed ordinance (now Ordinance 4760) to the Municipal
Board, copy of which is attached hereto as Annex C;
6. That the City of Manila derived in 1963 an annual income of P101,904.05
from license fees paid by the 105 hotels and motels (including herein
petitioners) operating in the City of Manila.1wph1.t
Thereafter came a memorandum for respondent on January 22, 1965, wherein stress
was laid on the presumption of the validity of the challenged ordinance, the burden of
showing its lack of conformity to the Constitution resting on the party who assails it,

As noted at the outset, the judgment must be reversed. A decent regard for
constitutional doctrines of a fundamental character ought to have admonished the
lower court against such a sweeping condemnation of the challenged ordinance. Its
decision cannot be allowed to stand, consistently with what has hitherto been the
accepted standards of constitutional adjudication, in both procedural and substantive
aspects.
Primarily what calls for a reversal of such a decision is the absence of any evidence to
offset the presumption of validity that attaches to a challenged statute or ordinance. As
was expressed categorically by Justice Malcolm: "The presumption is all in favor of
validity x x x . The action of the elected representatives of the people cannot be lightly
set aside. The councilors must, in the very nature of things, be familiar with the
necessities of their particular municipality and with all the facts and circumstances
which surround the subject and necessitate action. The local legislative body, by
enacting the ordinance, has in effect given notice that the regulations are essential to
the well being of the people x x x . The Judiciary should not lightly set aside legislative
action when there is not a clear invasion of personal or property rights under the guise
2
of police regulation.
It admits of no doubt therefore that there being a presumption of validity, the necessity
for evidence to rebut it is unavoidable, unless the statute or ordinance is void on its face
which is not the case here. The principle has been nowhere better expressed than in the
3
leading case of O'Gorman & Young v. Hartford Fire Insurance Co., where the American
Supreme Court through Justice Brandeis tersely and succinctly summed up the matter
thus: The statute here questioned deals with a subject clearly within the scope of the

police power. We are asked to declare it void on the ground that the specific method of
regulation prescribed is unreasonable and hence deprives the plaintiff of due process of
law. As underlying questions of fact may condition the constitutionality of legislation of
this character, the resumption of constitutionality must prevail in the absence of some
factual foundation of record for overthrowing the statute." No such factual foundation
being laid in the present case, the lower court deciding the matter on the pleadings and
the stipulation of facts, the presumption of validity must prevail and the judgment
against the ordinance set aside.
Nor may petitioners assert with plausibility that on its face the ordinance is fatally
defective as being repugnant to the due process clause of the Constitution. The mantle
of protection associated with the due process guaranty does not cover petitioners. This
particular manifestation of a police power measure being specifically aimed to
safeguard public morals is immune from such imputation of nullity resting purely on
conjecture and unsupported by anything of substance. To hold otherwise would be to
unduly restrict and narrow the scope of police power which has been properly
characterized as the most essential, insistent and the least limitable of
4
5
powers, extending as it does "to all the great public needs." It would be, to paraphrase
another leading decision, to destroy the very purpose of the state if it could be deprived
or allowed itself to be deprived of its competence to promote public health, public
6
morals, public safety and the genera welfare. Negatively put, police power is "that
inherent and plenary power in the State which enables it to prohibit all that is hurt full
7
to the comfort, safety, and welfare of society.
There is no question but that the challenged ordinance was precisely enacted to
minimize certain practices hurtful to public morals. The explanatory note of the
Councilor Herminio Astorga included as annex to the stipulation of facts, speaks of the
alarming increase in the rate of prostitution, adultery and fornication in Manila
traceable in great part to the existence of motels, which "provide a necessary
atmosphere for clandestine entry, presence and exit" and thus become the "ideal haven
for prostitutes and thrill-seekers." The challenged ordinance then proposes to check the
clandestine harboring of transients and guests of these establishments by requiring
these transients and guests to fill up a registration form, prepared for the purpose, in a
lobby open to public view at all times, and by introducing several other amendatory
provisions calculated to shatter the privacy that characterizes the registration of
transients and guests." Moreover, the increase in the licensed fees was intended to
discourage "establishments of the kind from operating for purpose other than legal" and
at the same time, to increase "the income of the city government." It would appear
therefore that the stipulation of facts, far from sustaining any attack against the validity
of the ordinance, argues eloquently for it.
It is a fact worth noting that this Court has invariably stamped with the seal of its
approval, ordinances punishing vagrancy and classifying a pimp or procurer as a
8
vagrant; provide a license tax for and regulating the maintenance or operation of public
9
10
11
12
dance halls; prohibiting gambling; prohibiting jueteng; and monte; prohibiting
13
playing of panguingui on days other than Sundays or legal holidays; prohibiting the

14

operation of pinball machines; and prohibiting any person from keeping, conducting or
maintaining an opium joint or visiting a place where opium is smoked or otherwise
15
used, all of which are intended to protect public morals.
On the legislative organs of the government, whether national or local, primarily rest
the exercise of the police power, which, it cannot be too often emphasized, is the power
to prescribe regulations to promote the health, morals, peace, good order, safety and
general welfare of the people. In view of the requirements of due process, equal
protection and other applicable constitutional guaranties however, the exercise of such
police power insofar as it may affect the life, liberty or property of any person is subject
to judicial inquiry. Where such exercise of police power may be considered as either
capricious, whimsical, unjust or unreasonable, a denial of due process or a violation of
any other applicable constitutional guaranty may call for correction by the courts.
We are thus led to considering the insistent, almost shrill tone, in which the objection is
16
raised to the question of due process. There is no controlling and precise definition of
due process. It furnishes though a standard to which the governmental action should
conform in order that deprivation of life, liberty or property, in each appropriate case,
be valid. What then is the standard of due process which must exist both as a
procedural and a substantive requisite to free the challenged ordinance, or any
governmental action for that matter, from the imputation of legal infirmity sufficient to
spell its doom? It is responsiveness to the supremacy of reason, obedience to the
dictates of justice. Negatively put, arbitrariness is ruled out and unfairness avoided. To
satisfy the due process requirement, official action, to paraphrase Cardozo, must not
outrun the bounds of reason and result in sheer oppression. Due process is thus hostile
to any official action marred by lack of reasonableness. Correctly it has been identified
17
as freedom from arbitrariness. It is the embodiment of the sporting idea of fair play. It
exacts fealty "to those strivings for justice" and judges the act of officialdom of
whatever branch "in the light of reason drawn from considerations of fairness that
18
reflect [democratic] traditions of legal and political thought." It is not a narrow or
"technical conception with fixed content unrelated to time, place and
19
circumstances," decisions based on such a clause requiring a "close and perceptive
20
inquiry into fundamental principles of our society." Questions of due process are not
21
to be treated narrowly or pedantically in slavery to form or phrases.
It would thus be an affront to reason to stigmatize an ordinance enacted precisely to
meet what a municipal lawmaking body considers an evil of rather serious proportion an
arbitrary and capricious exercise of authority. It would seem that what should be
deemed unreasonable and what would amount to an abdication of the power to govern
is inaction in the face of an admitted deterioration of the state of public morals. To be
more specific, the Municipal Board of the City of Manila felt the need for a remedial
measure. It provided it with the enactment of the challenged ordinance. A strong case
must be found in the records, and, as has been set forth, none is even attempted here
to attach to an ordinance of such character the taint of nullity for an alleged failure to
meet the due process requirement. Nor does it lend any semblance even of deceptive
plausibility to petitioners' indictment of Ordinance No. 4760 on due process grounds to

single out such features as the increased fees for motels and hotels, the curtailment of
the area of freedom to contract, and, in certain particulars, its alleged vagueness.
Admittedly there was a decided increase of the annual license fees provided for by the
challenged ordinance for hotels and motels, 150% for the former and over 200% for the
latter, first-class motels being required to pay a P6,000 annual fee and second-class
motels, P4,500 yearly. It has been the settled law however, as far back as 1922 that
municipal license fees could be classified into those imposed for regulating occupations
or regular enterprises, for the regulation or restriction of non-useful occupations or
22
enterprises and for revenue purposes only. As was explained more in detail in the
above Cu Unjieng case: (2) Licenses for non-useful occupations are also incidental to the
police power and the right to exact a fee may be implied from the power to license and
regulate, but in fixing amount of the license fees the municipal corporations are allowed
a much wider discretion in this class of cases than in the former, and aside from
applying the well-known legal principle that municipal ordinances must not be
unreasonable, oppressive, or tyrannical, courts have, as a general rule, declined to
interfere with such discretion. The desirability of imposing restraint upon the number of
persons who might otherwise engage in non-useful enterprises is, of course, generally
an important factor in the determination of the amount of this kind of license fee.
Hence license fees clearly in the nature of privilege taxes for revenue have frequently
been upheld, especially in of licenses for the sale of liquors. In fact, in the latter cases
23
the fees have rarely been declared unreasonable.
24

Moreover in the equally leading case of Lutz v. Araneta this Court affirmed the
doctrine earlier announced by the American Supreme Court that taxation may be made
to implement the state's police power. Only the other day, this Court had occasion to
affirm that the broad taxing authority conferred by the Local Autonomy Act of 1959 to
cities and municipalities is sufficiently plenary to cover a wide range of subjects with the
25
only limitation that the tax so levied is for public purposes, just and uniform.
As a matter of fact, even without reference to the wide latitude enjoyed by the City of
Manila in imposing licenses for revenue, it has been explicitly held in one case that
"much discretion is given to municipal corporations in determining the amount," here
the license fee of the operator of a massage clinic, even if it were viewed purely as a
26
police power measure. The discussion of this particular matter may fitly close with this
pertinent citation from another decision of significance: "It is urged on behalf of the
plaintiffs-appellees that the enforcement of the ordinance could deprive them of their
lawful occupation and means of livelihood because they can not rent stalls in the public
markets. But it appears that plaintiffs are also dealers in refrigerated or cold storage
meat, the sale of which outside the city markets under certain conditions is permitted x
x x . And surely, the mere fact, that some individuals in the community may be deprived
of their present business or a particular mode of earning a living cannot prevent the
exercise of the police power. As was said in a case, persons licensed to pursue
occupations which may in the public need and interest be affected by the exercise of the
police power embark in these occupations subject to the disadvantages which may
27
result from the legal exercise of that power."

Nor does the restriction on the freedom to contract, insofar as the challenged ordinance
makes it unlawful for the owner, manager, keeper or duly authorized representative of
any hotel, motel, lodging house, tavern, common inn or the like, to lease or rent room
or portion thereof more than twice every 24 hours, with a proviso that in all cases full
payment shall be charged, call for a different conclusion. Again, such a limitation cannot
be viewed as a transgression against the command of due process. It is neither
unreasonable nor arbitrary. Precisely it was intended to curb the opportunity for the
immoral or illegitimate use to which such premises could be, and, according to the
explanatory note, are being devoted. How could it then be arbitrary or oppressive when
there appears a correspondence between the undeniable existence of an undesirable
situation and the legislative attempt at correction. Moreover, petitioners cannot be
unaware that every regulation of conduct amounts to curtailment of liberty which as
pointed out by Justice Malcolm cannot be absolute. Thus: "One thought which runs
through all these different conceptions of liberty is plainly apparent. It is this: 'Liberty' as
understood in democracies, is not license; it is 'liberty regulated by law.' Implied in the
term is restraint by law for the good of the individual and for the greater good of the
peace and order of society and the general well-being. No man can do exactly as he
pleases. Every man must renounce unbridled license. The right of the individual is
necessarily subject to reasonable restraint by general law for the common good x x x
The liberty of the citizen may be restrained in the interest of the public health, or of the
28
public order and safety, or otherwise within the proper scope of the police power."
A similar observation was made by Justice Laurel: "Public welfare, then, lies at the
bottom of the enactment of said law, and the state in order to promote the general
welfare may interfere with personal liberty, with property, and with business and
occupations. Persons and property may be subjected to all kinds of restraints and
burdens, in order to secure the general comfort, health, and prosperity of the state x x x
To this fundamental aim of our Government the rights of the individual are
subordinated. Liberty is a blessing without which life is a misery, but liberty should not
be made to prevail over authority because then society will fall into anarchy. Neither
should authority be made to prevail over liberty because then the individual will fall into
slavery. The citizen should achieve the required balance of liberty and authority in his
mind through education and personal discipline, so that there may be established the
29
resultant equilibrium, which means peace and order and happiness for all.
It is noteworthy that the only decision of this Court nullifying legislation because of
30
undue deprivation of freedom to contract, People v. Pomar, no longer "retains its
virtuality as a living principle. The policy of laissez faire has to some extent given way to
the assumption by the government of the right of intervention even in contractual
31
relations affected with public interest. What may be stressed sufficiently is that if the
liberty involved were freedom of the mind or the person, the standard for the validity of
governmental acts is much more rigorous and exacting, but where the liberty curtailed
affects at the most rights of property, the permissible scope of regulatory measure is
32
wider. How justify then the allegation of a denial of due process?

Lastly, there is the attempt to impugn the ordinance on another due process ground by
invoking the principles of vagueness or uncertainty. It would appear from a recital in the
petition itself that what seems to be the gravamen of the alleged grievance is that the
provisions are too detailed and specific rather than vague or uncertain. Petitioners,
however, point to the requirement that a guest should give the name, relationship, age
and sex of the companion or companions as indefinite and uncertain in view of the
necessity for determining whether the companion or companions referred to are those
arriving with the customer or guest at the time of the registry or entering the room With
him at about the same time or coming at any indefinite time later to join him; a proviso
in one of its sections which cast doubt as to whether the maintenance of a restaurant in
a motel is dependent upon the discretion of its owners or operators; another proviso
which from their standpoint would require a guess as to whether the "full rate of
payment" to be charged for every such lease thereof means a full day's or merely a halfday's rate. It may be asked, do these allegations suffice to render the ordinance void on
its face for alleged vagueness or uncertainty? To ask the question is to answer it.
33
34
From Connally v. General Construction Co. toAdderley v. Florida, the principle has
been consistently upheld that what makes a statute susceptible to such a charge is an
enactment either forbidding or requiring the doing of an act that men of common
intelligence must necessarily guess at its meaning and differ as to its application. Is this
the situation before us? A citation from Justice Holmes would prove illuminating: "We
agree to all the generalities about not supplying criminal laws with what they omit but
there is no canon against using common sense in construing laws as saying what they
35
obviously mean."
That is all then that this case presents. As it stands, with all due allowance for the
arguments pressed with such vigor and determination, the attack against the validity of
the challenged ordinance cannot be considered a success. Far from it. Respect for
constitutional law principles so uniformly held and so uninterruptedly adhered to by this
Court compels a reversal of the appealed decision.
Wherefore, the judgment of the lower court is reversed and the injunction issued lifted
forthwith. With costs.
Reyes, J.B.L., Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro and Angeles, JJ.,
concur.
Concepcion, C.J. and Dizon, J., are on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-49112 February 2, 1979
LEOVILLO C. AGUSTIN, petitioner,
vs.
HON. ROMEO F. EDU, in his capacity as Land Transportation Commissioner; HON.
JUAN PONCE ENRILE, in his capacity as Minister of National Defense; HON. ALFREDO L.
JUINIO, in his capacity as Minister Of Public Works, Transportation and
Communications; and HON: BALTAZAR AQUINO, in his capacity as Minister of Public
Highways, respondents.
Leovillo C. Agustin Law Office for petitioner.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General Ruben E. Agpalo and
Solicitor Amado D. Aquino for respondents.

FERNANDO, J.:
1

The validity of a letter of Instruction providing for an early seaming device for motor
vehicles is assailed in this prohibition proceeding as being violative of the constitutional
guarantee of due process and, insofar as the rules and regulations for its
implementation are concerned, for transgressing the fundamental principle of nondelegation of legislative power. The Letter of Instruction is stigmatized by petitioner
who is possessed of the requisite standing, as being arbitrary and oppressive. A
temporary restraining order as issued and respondents Romeo F. Edu, Land
Transportation Commissioner Juan Ponce Enrile, Minister of National Defense; Alfredo
L. Juinio, Minister of Public Works, Transportation and Communications; and Baltazar
Aquino, Minister of Public Highways; were to answer. That they did in a pleading
2
submitted by Solicitor General Estelito P. Mendoza. Impressed with a highly persuasive
quality, it makes devoid clear that the imputation of a constitutional infirmity is devoid
of justification The Letter of Instruction on is a valid police power measure. Nor could
the implementing rules and regulations issued by respondent Edu be considered as
amounting to an exercise of legislative power. Accordingly, the petition must be
dismissed.
The facts are undisputed. The assailed Letter of Instruction No. 229 of President Marcos,
issued on December 2, 1974, reads in full: "[Whereas], statistics show that one of the
major causes of fatal or serious accidents in land transportation is the presence of

disabled, stalled or parked motor vehicles along streets or highways without any
appropriate early warning device to signal approaching motorists of their presence;
[Whereas], the hazards posed by such obstructions to traffic have been recognized by
international bodies concerned with traffic safety, the 1968 Vienna Convention on Road
Signs and Signals and the United Nations Organization (U.N.); [Whereas], the said
Vienna Convention which was ratified by the Philippine Government under P.D. No. 207,
recommended the enactment of local legislation for the installation of road safety signs
and devices; [Now, therefore, I, Ferdinand E. Marcos], President of the Philippines, in
the interest of safety on all streets and highways, including expressways or limited
access roads, do hereby direct: 1. That all owners, users or drivers of motor vehicles
shall have at all times in their motor vehicles at least one (1) pair of early warning device
consisting of triangular, collapsible reflectorized plates in red and yellow colors at least
15 cms. at the base and 40 cms. at the sides. 2. Whenever any motor vehicle is stalled or
disabled or is parked for thirty (30) minutes or more on any street or highway, including
expressways or limited access roads, the owner, user or driver thereof shall cause the
warning device mentioned herein to be installed at least four meters away to the front
and rear of the motor vehicle staged, disabled or parked. 3. The Land Transportation
Commissioner shall cause Reflectorized Triangular Early Warning Devices, as herein
described, to be prepared and issued to registered owners of motor vehicles, except
motorcycles and trailers, charging for each piece not more than 15 % of the acquisition
cost. He shall also promulgate such rules and regulations as are appropriate to
effectively implement this order. 4. All hereby concerned shall closely coordinate and
take such measures as are necessary or appropriate to carry into effect then
3
instruction. Thereafter, on November 15, 1976, it was amended by Letter of
Instruction No. 479 in this wise. "Paragraph 3 of Letter of Instruction No. 229 is hereby
amended to read as follows: 3. The Land transportation Commissioner shall require
every motor vehicle owner to procure from any and present at the registration of his
vehicle, one pair of a reflectorized early warning device, as d bed of any brand or make
chosen by mid motor vehicle . The Land Transportation Commissioner shall also
promulgate such rule and regulations as are appropriate to effectively implement this
4
order.'" There was issued accordingly, by respondent Edu, the implementing rules and
5
regulations on December 10, 1976. They were not enforced as President Marcos on
January 25, 1977, ordered a six-month period of suspension insofar as the installation of
early warning device as a pre-registration requirement for motor vehicle was
6
7
concerned. Then on June 30, 1978, another Letter of Instruction the lifting of such
suspension and directed the immediate implementation of Letter of Instruction No. 229
8
as amended. It was not until August 29, 1978 that respondent Edu issued
Memorandum Circular No. 32, worded thus: "In pursuance of Letter of Instruction No.
716, dated June 30, 1978, the implementation of Letter of Instruction No. 229, as
amended by Letter of Instructions No. 479, requiring the use of Early Warning Devices
(EWD) on motor vehicle, the following rules and regulations are hereby issued: 1. LTC
Administrative Order No. 1, dated December 10, 1976; shall now be implemented
provided that the device may come from whatever source and that it shall have
substantially complied with the EWD specifications contained in Section 2 of said
administrative order; 2. In order to insure that every motor vehicle , except motorcycles,
is equipped with the device, a pair of serially numbered stickers, to be issued free of
charge by this Commission, shall be attached to each EWD. The EWD. serial number

shall be indicated on the registration certificate and official receipt of payment of

current registration fees of the motor vehicle concerned. All Orders, Circulars, and
Memoranda in conflict herewith are hereby superseded, This Order shall take effect
9
immediately. It was for immediate implementation by respondent Alfredo L. Juinio, as
10
Minister of Public Works, transportation, and Communications.
Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle Car, Model
13035, already properly equipped when it came out from the assembly lines with
blinking lights fore and aft, which could very well serve as an early warning device in
case of the emergencies mentioned in Letter of Instructions No. 229, as amended, as
well as the implementing rules and regulations in Administrative Order No. 1 issued by
11
the land transportation Commission," alleged that said Letter of Instruction No. 229,
as amended, "clearly violates the provisions and delegation of police power, [sic] * * *: "
For him they are "oppressive, unreasonable, arbitrary, confiscatory, nay
12
unconstitutional and contrary to the precepts of our compassionate New Society." He
contended that they are "infected with arbitrariness because it is harsh, cruel and
13
unconscionable to the motoring public;" are "one-sided, onerous and patently illegal
and immoral because [they] will make manufacturers and dealers instant millionaires at
the expense of car owners who are compelled to buy a set of the so-called early warning
14
device at the rate of P 56.00 to P72.00 per set." are unlawful and unconstitutional and
contrary to the precepts of a compassionate New Society [as being] compulsory and
confiscatory on the part of the motorists who could very well provide a practical
15
alternative road safety device, or a better substitute to the specified set of EWD's." He
therefore prayed for a judgment both the assailed Letters of Instructions and
Memorandum Circular void and unconstitutional and for a restraining order in the
meanwhile.
A resolution to this effect was handed down by this Court on October 19, 1978: "L49112 (Leovillo C. Agustin v. Hon. Romeo F. Edu, etc., et al.) Considering the
allegations contained, the issues raised and the arguments adduced in the petition for
prohibition with writ of p prohibitory and/or mandatory injunction, the Court Resolved
to (require) the respondents to file an answer thereto within ton (10) days from notice
and not to move to dismiss the petition. The Court further Resolved to [issue] a
[temporary restraining order] effective as of this date and continuing until otherwise
16
ordered by this Court.
Two motions for extension were filed by the Office of the Solicitor General and granted.
Then on November 15, 1978, he Answer for respondents was submitted. After admitting
the factual allegations and stating that they lacked knowledge or information sufficient
to form a belief as to petitioner owning a Volkswagen Beetle car," they "specifically
deny the allegations and stating they lacked knowledge or information sufficient to form
17
a belief as to petitioner owning a Volkswagen Beetle Car, they specifically deny the
allegations in paragraphs X and XI (including its subparagraphs 1, 2, 3, 4) of Petition to
the effect that Letter of Instruction No. 229 as amended by Letters of Instructions Nos.
479 and 716 as well as Land transportation Commission Administrative Order No. 1 and
its Memorandum Circular No. 32 violates the constitutional provisions on due process of

law, equal protection of law and undue delegation of police power, and that the same
are likewise oppressive, arbitrary, confiscatory, one-sided, onerous, immoral
unreasonable and illegal the truth being that said allegations are without legal and
factual basis and for the reasons alleged in the Special and Affirmative Defenses of this
18
Answer." Unlike petitioner who contented himself with a rhetorical recital of his litany
of grievances and merely invoked the sacramental phrases of constitutional litigation,
the Answer, in demonstrating that the assailed Letter of Instruction was a valid exercise
of the police power and implementing rules and regulations of respondent Edu not
susceptible to the charge that there was unlawful delegation of legislative power, there
was in the portion captioned Special and Affirmative Defenses, a citation of what
respondents believed to be the authoritative decisions of this Tribunal calling for
19
20
application. They are Calalang v. Williams, Morfe v. Mutuc, and Edu v.
21
Ericta. Reference was likewise made to the 1968 Vienna Conventions of the United
Nations on road traffic, road signs, and signals, of which the Philippines was a signatory
22
and which was duly ratified. Solicitor General Mendoza took pains to refute in detail,
in language calm and dispassionate, the vigorous, at times intemperate, accusation of
petitioner that the assailed Letter of Instruction and the implementing rules and
regulations cannot survive the test of rigorous scrutiny. To repeat, its highly-persuasive
quality cannot be denied.
This Court thus considered the petition submitted for decision, the issues being clearly
joined. As noted at the outset, it is far from meritorious and must be dismissed.
1. The Letter of Instruction in question was issued in the exercise of the police power.
That is conceded by petitioner and is the main reliance of respondents. It is the
submission of the former, however, that while embraced in such a category, it has
offended against the due process and equal protection safeguards of the Constitution,
although the latter point was mentioned only in passing. The broad and expansive scope
of the police power which was originally Identified by Chief Justice Taney of the
American Supreme Court in an 1847 decision as "nothing more or less than the powers
23
of government inherent in every sovereignty" was stressed in the aforementioned
case of Edu v. Ericta thus: "Justice Laurel, in the first leading decision after the
Constitution came into force, Calalang v. Williams, Identified police power with state
authority to enact legislation that may interfere with personal liberty or property in
order to promote the general welfare. Persons and property could thus 'be subjected to
all kinds of restraints and burdens in order to we the general comfort, health and
prosperity of the state.' Shortly after independence in 1948, Primicias v.
Fugoso reiterated the doctrine, such a competence being referred to as 'the power to
prescribe regulations to promote the health, morals, peace, education, good order or
safety, and general welfare of the people. The concept was set forth in negative terms
by Justice Malcolm in a pre-Commonwealth decision as 'that inherent and plenary
power in the State which enables it to prohibit all things hurtful to the comfort, safety
and welfare of society. In that sense it could be hardly distinguishable as noted by this
Court in Morfe v. Mutuc with the totality of legislative power. It is in the above sense
the greatest and most powerful at. tribute of government. It is, to quote Justice
Malcolm anew, 'the most essential, insistent, and at least table powers, I extending as

Justice Holmes aptly pointed out 'to all the great public needs.' Its scope, everexpanding to meet the exigencies of the times, even to anticipate the future where it
could be done, provides enough room for an efficient and flexible response to
conditions and circumstances thus assuring the greatest benefits. In the language of
Justice Cardozo: 'Needs that were narrow or parochial in the past may be interwoven in
the present with the well-being of the nation. What is critical or urgent changes with the
time.' The police power is thus a dynamic agency, suitably vague and far from precisely
defined, rooted in the conception that men in organizing the state and imposing upon
its government limitations to safeguard constitutional rights did not intend thereby to
enable an individual citizen or a group of citizens to obstruct unreasonably the
enactment of such salutary measures calculated to communal peace, safety, good
24
order, and welfare."

(p. 12 of petition). Petitioner's statistics is not backed up by demonstrable data on

record. As aptly stated by this Honorable Court: Further: "It admits of no doubt
therefore that there being a presumption of validity, the necessity for evidence to rebut
it is unavoidable, unless the statute or ordinance is void on its face, which is not the case
here"' * * *. But even as g the verity of petitioner's statistics, is that not reason enough
to require the installation of early warning devices to prevent another 390 rear-end
collisions that could mean the death of 390 or more Filipinos and the deaths that could
30
likewise result from head-on or frontal collisions with stalled vehicles?" It is quite
manifest then that the issuance of such Letter of Instruction is encased in the armor of
prior, careful study by the Executive Department. To set it aside for alleged repugnancy
to the due process clause is to give sanction to conjectural claims that exceeded even
the broadest permissible limits of a pleader's well known penchant for exaggeration.

2. It was thus a heavy burden to be shouldered by petitioner, compounded by the fact

that the particular police power measure challenged was clearly intended to promote
public safety. It would be a rare occurrence indeed for this Court to invalidate a
legislative or executive act of that character. None has been called to our attention, an
indication of its being non-existent. The latest decision in point, Edu v. Ericta, sustained
25
the validity of the Reflector Law, an enactment conceived with the same end in
view. Calalang v. Williams found nothing objectionable in a statute, the purpose of
which was: "To promote safe transit upon, and. avoid obstruction on roads and streets
26
designated as national roads * * *. As a matter of fact, the first law sought to be
27
nullified after the effectivity of the 1935 Constitution, the National Defense Act, with
petitioner failing in his quest, was likewise prompted by the imperative demands of
public safety.

5. The rather wild and fantastic nature of the charge of oppressiveness of this Letter of
Instruction was exposed in the Answer of the Solicitor General thus: "Such early warning
device requirement is not an expensive redundancy, nor oppressive, for car owners
whose cars are already equipped with 1) blinking lights in the fore and aft of said motor
vehicles,' 2) "battery-powered blinking lights inside motor vehicles," 3) "built-in
reflectorized tapes on front and rear bumpers of motor vehicles," or 4) "well-lighted two
(2) petroleum lamps (the Kinke) * * * because: Being universal among the signatory
countries to the said 1968 Vienna Conventions, and visible even under adverse
conditions at a distance of at least 400 meters, any motorist from this country or from
any part of the world, who sees a reflectorized rectangular early seaming device
installed on the roads, highways or expressways, will conclude, without thinking, that
somewhere along the travelled portion of that road, highway, or expressway, there is a
motor vehicle which is stationary, stalled or disabled which obstructs or endangers
passing traffic. On the other hand, a motorist who sees any of the aforementioned other
built in warning devices or the petroleum lamps will not immediately get adequate
advance warning because he will still think what that blinking light is all about. Is it an
emergency vehicle? Is it a law enforcement car? Is it an ambulance? Such confusion or
uncertainty in the mind of the motorist will thus increase, rather than decrease, the
31
danger of collision.

3. The futility of petitioner's effort to nullify both the Letter of Instruction and the
implementing rules and regulations becomes even more apparent considering his failure
to lay the necessary factual foundation to rebut the presumption of validity. So it was
held in Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of
28
Manila. The rationale was clearly set forth in an excerpt from a decision of Justice
Branders of the American Supreme Court, quoted in the opinion: "The statute here
questioned deals with a subject clearly within the scope of the police power. We are
asked to declare it void on the ground that the specific method of regulation prescribed
is unreasonable and hence deprives the plaintiff of due process of law. As underlying
questions of fact may condition the constitutionality of legislation of this character, the
presumption of constitutionality must prevail in the absence of some factual foundation
29
of record in overthrowing the statute.
4. Nor did the Solicitor General as he very well could, rely solely on such rebutted
presumption of validity. As was pointed out in his Answer "The President certainly had
in his possession the necessary statistical information and data at the time he issued
said letter of instructions, and such factual foundation cannot be defeated by
petitioner's naked assertion that early warning devices 'are not too vital to the
prevention of nighttime vehicular accidents' because allegedly only 390 or 1.5 per cent
of the supposed 26,000 motor vehicle accidents that in 1976 involved rear-end collisions

6. Nor did the other extravagant assertions of constitutional deficiency go unrefuted in

the Answer of the Solicitor General "There is nothing in the questioned Letter of
Instruction No. 229, as amended, or in Administrative Order No. 1, which requires or
compels motor vehicle owners to purchase the early warning device prescribed thereby.
All that is required is for motor vehicle owners concerned like petitioner, to equip their
motor vehicles with a pair of this early warning device in question, procuring or
obtaining the same from whatever source. In fact, with a little of industry and practical
ingenuity, motor vehicle owners can even personally make or produce this early
warning device so long as the same substantially conforms with the specifications laid
down in said letter of instruction and administrative order. Accordingly the early
warning device requirement can neither be oppressive, onerous, immoral, nor
confiscatory, much less does it make manufacturers and dealers of said devices 'instant
millionaires at the expense of car owners' as petitioner so sweepingly concludes * * *.

Petitioner's fear that with the early warning device requirement 'a more subtle racket
may be committed by those called upon to enforce it * * * is an unfounded speculation.
Besides, that unscrupulous officials may try to enforce said requirement in an
unreasonable manner or to an unreasonable degree, does not render the same illegal or
immoral where, as in the instant case, the challenged Letter of Instruction No. 229 and
32
implementing order disclose none of the constitutional defects alleged against it.
7 It does appear clearly that petitioner's objection to this Letter of Instruction is not
premised on lack of power, the justification for a finding of unconstitutionality, but on
the pessimistic, not to say negative, view he entertains as to its wisdom. That approach,
it put it at its mildest, is distinguished, if that is the appropriate word, by its
unorthodoxy. It bears repeating "that this Court, in the language of Justice Laurel, 'does
not pass upon questions of wisdom justice or expediency of legislation.' As expressed by
Justice Tuason: 'It is not the province of the courts to supervise legislation and keep it
within the bounds of propriety and common sense. That is primarily and exclusively a
legislative concern.' There can be no possible objection then to the observation of
Justice Montemayor. 'As long as laws do not violate any Constitutional provision, the
Courts merely interpret and apply them regardless of whether or not they are wise or
salutary. For they, according to Justice Labrador, 'are not supposed to override
legitimate policy and * * * never inquire into the wisdom of the law.' It is thus settled, to
paraphrase Chief Justice Concepcion in Gonzales v. Commission on Elections, that only
congressional power or competence, not the wisdom of the action taken, may be the
basis for declaring a statute invalid. This is as it ought to be. The principle of separation
of powers has in the main wisely allocated the respective authority of each department
and confined its jurisdiction to such a sphere. There would then be intrusion not
allowable under the Constitution if on a matter left to the discretion of a coordinate
branch, the judiciary would substitute its own. If there be adherence to the rule of law,
as there ought to be, the last offender should be courts of justice, to which rightly
litigants submit their controversy precisely to maintain unimpaired the supremacy of
legal norms and prescriptions. The attack on the validity of the challenged provision
likewise insofar as there may be objections, even if valid and cogent on is wisdom
33
cannot be sustained.
8. The alleged infringement of the fundamental principle of non-delegation of legislative
power is equally without any support well-settled legal doctrines. Had petitioner taken
the trouble to acquaint himself with authoritative pronouncements from this Tribunal,
he would not have the temerity to make such an assertion. An exempt from the
aforecited decision of Edu v. Ericta sheds light on the matter: "To avoid the taint of
unlawful delegation, there must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lays down fundamental policy.
Otherwise, the charge of complete abdication may be hard to repel A standard thus
defines legislative policy, marks its maps out its boundaries and specifies the public
agency to apply it. It indicates the circumstances under which the legislative command is
to be effected. It is the criterion by which legislative purpose may be carried out.
Thereafter, the executive or administrative office designated may in pursuance of the
above guidelines promulgate supplemental rules and regulations. The standard may be

either express or implied. If the former, the non-delegation objection is easily met. The
standard though does not have to be spelled out specifically. It could be implied from
the policy and purpose of the act considered as a whole. In the Reflector Law clearly, the
legislative objective is public safety. What is sought to be attained as in Calalang v.
Williams is "safe transit upon the roads.' This is to adhere to the recognition given
expression by Justice Laurel in a decision announced not too long after the Constitution
came into force and effect that the principle of non-delegation "has been made to adapt
itself to the complexities of modern governments, giving rise to the adoption, within
certain limits, of the principle of "subordinate legislation" not only in the United States
and England but in practically all modern governments.' He continued: 'Accordingly,
with the growing complexity of modern life, the multiplication of the subjects of
governmental regulation, and the increased difficulty of administering the laws, there is
a constantly growing tendency toward the delegation of greater powers by the
legislature and toward the approval of the practice by the courts.' Consistency with the
conceptual approach requires the reminder that what is delegated is authority nonlegislative in character, the completeness of the statute when it leaves the hands of
34
Congress being assumed."
9. The conclusion reached by this Court that this petition must be dismissed is
reinforced by this consideration. The petition itself quoted these two whereas clauses of
the assailed Letter of Instruction: "[Whereas], the hazards posed by such obstructions to
traffic have been recognized by international bodies concerned with traffic safety, the
1968 Vienna Convention on Road Signs and Signals and the United Nations Organization
(U.N.); [Whereas], the said Vionna Convention, which was ratified by the Philippine
Government under P.D. No. 207, recommended the enactment of local legislation for
35
the installation of road safety signs and devices; * * * " It cannot be disputed then
that this Declaration of Principle found in the Constitution possesses relevance: "The
Philippines * * * adopts the generally accepted principles of international law as part of
36
the law of the land * * *." The 1968 Vienna Convention on Road Signs and Signals is
impressed with such a character. It is not for this country to repudiate a commitment to
which it had pledged its word. The concept of Pacta sunt servanda stands in the way of
such an attitude, which is, moreover, at war with the principle of international morality.
10. That is about all that needs be said. The rather court reference to equal protection
did not even elicit any attempt on the Part of Petitioner to substantiate in a manner
clear, positive, and categorical why such a casual observation should be taken seriously.
In no case is there a more appropriate occasion for insistence on what was referred to
37
as "the general rule" in Santiago v. Far Eastern Broadcasting Co., namely, "that the
constitutionality of a law wig not be considered unless the point is specially pleaded,
38
insisted upon, and adequately argued." "Equal protection" is not a talismanic formula
at the mere invocation of which a party to a lawsuit can rightfully expect that success
will crown his efforts. The law is anything but that.
WHEREFORE, this petition is dismissed. The restraining order is lifted. This decision is
immediately executory. No costs.

THIRD DIVISION

On May 19,1992, Damalerio filed with the Labor Arbiter a Complaint for illegal
dismissal against the petitioner.

[G.R. No. 123880. February 23, 1999]

MARANAW HOTELS AND RESORT CORPORATION, (Owner of Century Park Sheraton
Manila), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and EDDIE
DAMALERIO, respondents.
DECISION
PURISIMA, J.:
This special civil action for certiorari under Rule 65 of the Revised Rules of Court
seeks to annul and set aside the Decision, dated September 18, 1995, of the National
[1]
[2]
Labor Relations Commission (NLRC) , and the Order , dated January 30, 1996, denying
petitioner's motion for reconsideration in NLRC-NCR-CA No. 005642-93, on the ground
of lack or excess of jurisdiction or grave abuse of discretion.
On April 2, 1992, Eddie Damalerio (Damalerio), a room attendant of the Century
Park Sheraton Hotel, operated by Maranaw Hotel and Resort Corporation, was seen by
hotel guest Jamie Glaser (Glaser) with left hand inside the latter's suitcase. Confronted
with what he was doing, Damalerio explained that he was trying to tidy up the
room. Not satisfied with the explanation of Damalerio, Glaser lodged a written
complaint before William D. Despuig, shift-in-charge of security of the hotel. Glaser also
reported that Damalerio had previously asked from him souvenirs, cassettes, and other
giveaways. The complaint was later brought by Despuig to the attention of Major Eddie
Buluran, chief of Security of the hotel.
On April 3, 1992, Damalerio was given a Disciplinary Action Notice (DAN). The next
day, an administrative hearing was conducted on the matter. Among those present at
the hearing were: 1) Lourdes Ricardo (room attendant), 2) Angelito Torres (floor
supervisor), 3)
Major
Eddie
Buluran (chief of
security), 4)
Susan
Dino (Personnel representative), 5) Alfredo San Gabriel (senior floor supervisor) and 6)
Ben Hur Amador (union representative).
Taking the witness stand on his own behalf, Damalerio denied the accusation
against him, theorizing that when he found the room of Glaser in disarray, and was
about to make the bed, he noticed some belongings, such as socks and T-shirts of the
said hotel guest scattered around, so much so that he thought of placing the same in his
luggage. While doing so, Glaser arrived. When asked by the latter if something was
wrong, he (Damalerio) said "I'm just cleaning your room," and Glaser
remarked, "Good work," and then, the two of them chatted about Glaser's concert at
the Araneta Coliseum.
[3]

On April 13, 1992, Damalerio received a memorandum issued by Alfredo San

Gabriel, Sr., Floor Supervisor, bearing the approval of Nicolas R. Kirit, Executive
Housekeeper, stating that he (Damalerio) was found to have committed qualified theft
in violation of House Rule No. 1, Section 3 of Hotel Rules and Regulations. The same
memorandum served as a notice of termination of his employment.

On August 20, 1993, after the parties had sent in their position papers, Labor
Arbiter Ceferina J. Diosana decided the case; disposing, thus:
"WHEREFORE, judgment is hereby rendered finding the dismissal of complainant to be
illegal and ordering the respondents to reinstate him to his former or equivalent position
without loss of seniority rights and with backwages from April 15, 1992 when he was
preventively suspended up to actual reinstatement and other benefits, including but not
limited to his share in the charges and/or tips which he failed to receive, and all other
CBA benefits that have accrued since his dismissal.
SO ORDERED.
From the aforesaid Labor Arbiter's disposition, the petitioner appealed to the
NLRC, which modified the appealed decision by giving petitioner the option of paying
Damalerio a separation pay equivalent to one (1) month pay for every year of service,
instead of reinstating him.
On November 22, 1995, petitioner interposed a motion for reconsideration but to
no avail. NLRC denied the same on January 30, 1996.
Undaunted, petitioner has come to this Court via the present petition; posing the
questions:
1. WHETHER OR NOT RESPONDENT NLRC COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT
PETITIONER FAILED TO ADDUCE CONCLUSIVE EVIDENCE IN SUPPORT OF
ITS VERSION OF THE INCIDENT, CONSIDERING THE FACT THAT THE
EVIDENCE ON RECORD INELUCTABLY SHOWS THAT PRIVATE RESPONDENT
WAS CAUGHT IN FLAGRANTE DELICTO; and
2. WHETHER OR NOT RESPONDENT NLRC COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT REVERSING
THAT PORTION OF THE DECISION OF THE LABOR ARBITER ORDERING
HEREIN PETITIONER TO PAY PRIVATE RESPONDENT HIS SHARE IN THE
SERVICE CHARGE WHICH WAS COLLECTED DURING THE TIME HE WAS
NOT WORKING IN THE HOTEL.
The petition is barren of merit.
Petitioner's theory that Damalerio was caught committing qualified theft
in flagrante delicto is anemic of evidentiary support. Records disclose petitioner's failure
to substantiate such imputation against him. During the investigation presided over by
the Labor Arbiter, Damalerio narrated a plausible and satisfactory explanation for his
behavior complained of. According to him, he was then cleaning the hotel room of
Glaser, and while in the process of placing inside the luggage the personal belongings of

Glaser scattered near the bed, the latter entered the room. Glaser did not bother to
testify as all his things were intact.
Although it was not completely proper for Damalerio to be touching the things of a
hotel guest while cleaning the hotel rooms, personal belongings of hotel guests being
off-limits to roomboys, under the attendant facts and circumstances, we believe that
the dismissal of Damalerio was unwarranted. To be sure, the investigation held by the
hotel security people did not unearth enough evidence of culpability. It bears repeating
that subject hotel guest lost nothing. Albeit petitioner may have reasons to doubt the
honesty and trustworthiness of Damalerio, as a result of what happened, absent
sufficient proof of guilt, he (Damalerio), who is a rank-and-file employee, cannot be
[4]
legally dismissed. Unsubstantiated suspicions and baseless conclusions by employers
are not legal justification for dismissing employees. The burden of proving the existence
[5]
of a valid and authorized cause of termination is on the employer. Any doubt should
be resolved in favor of the employee, in keeping with the principle of social justice
[6]
enshrined in the Constitution.
All things studiedly considered and viewed in proper perspective, the dismissal of
Damalerio, under the premises, cannot be countenanced.
As regards the share of Damalerio in the service charges collected during the
period of his preventive suspension, the same form part of his earnings, and his
dismissal having been adjudged to be illegal, he is entitled not only to full backwages but
also to other benefits, including a just share in the service charges, to be computed from
the start of his preventive suspension until his reinstatement.
However, mindful of the animosity and strained relations between the parties,
emanating from this litigation, we uphold the ruling a quo that in lieu of reinstatement,
separation pay may be given to the private respondent, at the rate of one (1) month pay
for every year of service. Should petitioner opt in favor of separation pay, the private
respondent shall no longer be entitled to share in the service charges collected during
his preventive suspension.
WHEREFORE, the petition is hereby DISMISSED and the Court affirms the
questioned Decision of the National Labor Relations Commission, to be implemented
according to law and this disposition.No pronouncement as to costs.
SO ORDERED.
Romero (Chairman), Panganiban, and Gonzaga-Reyes, JJ., concur.
Vitug, J., on official leave.

Republic of the Philippines

SUPREME COURT
Manila

Sec. 1. That pursuant to the policy of the city banning the operation
of casino within its territorial jurisdiction, no business permit shall be
issued to any person, partnership or corporation for the operation of
casino within the city limits.

EN BANC
G.R. No. 111097 July 20, 1994
MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,
vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION,respondents.

Sec. 2. That it shall be a violation of existing business permit by any

persons, partnership or corporation to use its business establishment
or portion thereof, or allow the use thereof by others for casino
operation and other gambling activities.
Sec. 3. PENALTIES. Any violation of such existing business permit
as defined in the preceding section shall suffer the following penalties,
to wit:

Aquilino G. Pimentel, Jr. and Associates for petitioners.

a) Suspension of the business
permit for sixty (60) days for the
first offense and a fine of
P1,000.00/day

R.R. Torralba & Associates for private respondent.

CRUZ, J.:

b) Suspension of the business

permit for Six (6) months for the
second offense, and a fine of
P3,000.00/day

There was instant opposition when PAGCOR announced the opening of a casino in
Cagayan de Oro City. Civic organizations angrily denounced the project. The religious
elements echoed the objection and so did the women's groups and the youth.
Demonstrations were led by the mayor and the city legislators. The media trumpeted
the protest, describing the casino as an affront to the welfare of the city.
The trouble arose when in 1992, flush with its tremendous success in several cities,
PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased
a portion of a building belonging to Pryce Properties Corporation, Inc., one of the herein
private respondents, renovated and equipped the same, and prepared to inaugurate its
casino there during the Christmas season.
The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and
hostile. On December 7, 1992, it enacted Ordinance No. 3353 reading as follows:
ORDINANCE NO. 3353
AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT
AND CANCELLING EXISTING BUSINESS PERMIT TO ANY
ESTABLISHMENT FOR THE USING AND ALLOWING TO BE USED ITS
PREMISES OR PORTION THEREOF FOR THE OPERATION OF CASINO.
BE IT ORDAINED by the Sangguniang Panlungsod of the City of
Cagayan de Oro, in session assembled that:

c) Permanent revocation of the

business permit and imprisonment
of One (1) year, for the third and
subsequent offenses.
Sec. 4. This Ordinance shall take effect ten (10) days from
publication thereof.
Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading
as follows:
ORDINANCE NO. 3375-93
AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND
PROVIDING PENALTY FOR VIOLATION THEREFOR.
WHEREAS, the City Council established a policy as early as 1990
against CASINO under its Resolution No. 2295;

WHEREAS, on October 14, 1992, the City Council passed another

Resolution No. 2673, reiterating its policy against the establishment of
CASINO;

March 31, 1993, the Court of Appeals declared the ordinances invalid and issued the
1
writ prayed for to prohibit their enforcement. Reconsideration of this decision was
2
denied on July 13, 1993.

WHEREAS, subsequently, thereafter, it likewise passed Ordinance No.

3353, prohibiting the issuance of Business Permit and to cancel
existing Business Permit to any establishment for the using and
allowing to be used its premises or portion thereof for the operation
of CASINO;

Cagayan de Oro City and its mayor are now before us in this petition for review under
3
Rule 45 of the Rules of Court. They aver that the respondent Court of Appeals erred in
holding that:

WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the
Local Government Code of 1991 (Rep. Act 7160) and under Art. 99,
No. (4), Paragraph VI of the implementing rules of the Local
Government Code, the City Council as the Legislative Body shall enact
measure to suppress any activity inimical to public morals and general
welfare of the people and/or regulate or prohibit such activity
pertaining to amusement or entertainment in order to protect social
and moral welfare of the community;

1. Under existing laws, the Sangguniang Panlungsod of the City of

Cagayan de Oro does not have the power and authority to prohibit the
establishment and operation of a PAGCOR gambling casino within the
City's territorial limits.
2. The phrase "gambling and other prohibited games of chance" found
in Sec. 458, par. (a), sub-par. (1) (v) of R.A. 7160 could only mean
"illegal gambling."
3. The questioned Ordinances in effect annul P.D. 1869 and are
therefore invalid on that point.

NOW THEREFORE,
BE IT ORDAINED by the City Council in session duly assembled that:
Sec. 1. The operation of gambling CASINO in the City of Cagayan de
Oro is hereby prohibited.
Sec. 2. Any violation of this Ordinance shall be subject to the
following penalties:
a) Administrative fine of P5,000.00 shall be imposed against the
proprietor, partnership or corporation undertaking the operation,
conduct, maintenance of gambling CASINO in the City and closure
thereof;
b) Imprisonment of not less than six (6) months nor more than one (1)
year or a fine in the amount of P5,000.00 or both at the discretion of
the court against the manager, supervisor, and/or any person
responsible in the establishment, conduct and maintenance of
gambling CASINO.

4. The questioned Ordinances are discriminatory to casino and partial

to cockfighting and are therefore invalid on that point.
5. The questioned Ordinances are not reasonable, not consonant with
the general powers and purposes of the instrumentality concerned
and inconsistent with the laws or policy of the State.
6. It had no option but to follow the ruling in the case of Basco, et al. v.
PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 53 in disposing of
the issues presented in this present case.
PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all
games of chance, including casinos on land and sea within the territorial jurisdiction of
4
the Philippines. In Basco v. Philippine Amusements and Gaming Corporation, this Court
sustained the constitutionality of the decree and even cited the benefits of the entity to
the national economy as the third highest revenue-earner in the government, next only
to the BIR and the Bureau of Customs.

Sec. 3. This Ordinance shall take effect ten (10) days after its
publication in a local newspaper of general circulation.

Cagayan de Oro City, like other local political subdivisions, is empowered to enact
ordinances for the purposes indicated in the Local Government Code. It is expressly
vested with the police power under what is known as the General Welfare Clause now
embodied in Section 16 as follows:

Pryce assailed the ordinances before the Court of Appeals, where it was joined by
PAGCOR as intervenor and supplemental petitioner. Their challenge succeeded. On

Sec. 16. General Welfare. Every local government unit shall

exercise the powers expressly granted, those necessarily implied

therefrom, as well as powers necessary, appropriate, or incidental for

its efficient and effective governance, and those which are essential to
the promotion of the general welfare. Within their respective
territorial jurisdictions, local government units shall ensure and
support, among other things, the preservation and enrichment of
culture, promote health and safety, enhance the right of the people to
a balanced ecology, encourage and support the development of
appropriate and self-reliant scientific and technological capabilities,
improve public morals, enhance economic prosperity and social
justice, promote full employment among their residents, maintain
peace and order, and preserve the comfort and convenience of their
inhabitants.
In addition, Section 458 of the said Code specifically declares that:
Sec. 458. Powers, Duties, Functions and Compensation. (a) The
Sangguniang Panlungsod, as the legislative body of the city, shall enact
ordinances, approve resolutions and appropriate funds for the general
welfare of the city and its inhabitants pursuant to Section 16 of this
Code and in the proper exercise of the corporate powers of the city as
provided for under Section 22 of this Code, and shall:
(1) Approve ordinances and pass resolutions necessary for an efficient
and effective city government, and in this connection, shall:
xxx xxx xxx
(v) Enact ordinances intended to
prevent, suppress and impose
appropriate penalties for habitual
drunkenness in public places,
vagrancy,
mendicancy,
prostitution, establishment and
maintenance of houses of ill
repute,gambling and
other
prohibited games of chance,
fraudulent devices and ways to
obtain money or property, drug
addiction, maintenance of drug
dens, drug pushing, juvenile
delinquency,
the
printing,
distribution or exhibition of
obscene or pornographic materials
or publications, and such other
activities inimical to the welfare

and morals of the inhabitants of

the city;
This section also authorizes the local government units to regulate properties and
5
businesses within their territorial limits in the interest of the general welfare.
The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod
may prohibit the operation of casinos because they involve games of chance, which are
detrimental to the people. Gambling is not allowed by general law and even by the
Constitution itself. The legislative power conferred upon local government units may be
exercised over all kinds of gambling and not only over "illegal gambling" as the
respondents erroneously argue. Even if the operation of casinos may have been
permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to
prohibit them within its territory pursuant to the authority entrusted to it by the Local
Government Code.
It is submitted that this interpretation is consonant with the policy of local autonomy as
mandated in Article II, Section 25, and Article X of the Constitution, as well as various
other provisions therein seeking to strengthen the character of the nation. In giving the
local government units the power to prevent or suppress gambling and other social
problems, the Local Government Code has recognized the competence of such
communities to determine and adopt the measures best expected to promote the
general welfare of their inhabitants in line with the policies of the State.
The petitioners also stress that when the Code expressly authorized the local
government units to prevent and suppress gambling and other prohibited games of
chance, like craps, baccarat, blackjack and roulette, it meant allforms of gambling
6
without distinction. Ubi lex non distinguit, nec nos distinguere debemos. Otherwise, it
would have expressly excluded from the scope of their power casinos and other forms
of gambling authorized by special law, as it could have easily done. The fact that it did
not do so simply means that the local government units are permitted to prohibit all
kinds of gambling within their territories, including the operation of casinos.
The adoption of the Local Government Code, it is pointed out, had the effect of
modifying the charter of the PAGCOR. The Code is not only a later enactment than P.D.
1869 and so is deemed to prevail in case of inconsistencies between them. More than
this, the powers of the PAGCOR under the decree are expressly discontinued by the
Code insofar as they do not conform to its philosophy and provisions, pursuant to Par.
(f) of its repealing clause reading as follows:
(f) All general and special laws, acts, city charters, decrees, executive
orders, proclamations and administrative regulations, or part or parts
thereof which are inconsistent with any of the provisions of this Code
are hereby repealed or modified accordingly.

It is also maintained that assuming there is doubt regarding the effect of the Local
Government Code on P.D. 1869, the doubt must be resolved in favor of the petitioners,
in accordance with the direction in the Code calling for its liberal interpretation in favor
of the local government units. Section 5 of the Code specifically provides:
Sec. 5. Rules of Interpretation. In the interpretation of the
provisions of this Code, the following rules shall apply:
(a) Any provision on a power of a local government unit shall be
liberally interpreted in its favor, and in case of doubt, any question
thereon shall be resolved in favor of devolution of powers and of the
lower local government unit. Any fair and reasonable doubt as to the
existence of the power shall be interpreted in favor of the local
government unit concerned;

of statutes are not addressed to the judiciary but may be resolved only by the legislative
and executive departments, to which the function belongs in our scheme of
government. That function is exclusive. Whichever way these branches decide, they are
answerable only to their own conscience and the constituents who will ultimately judge
their acts, and not to the courts of justice.
The only question we can and shall resolve in this petition is the validity of Ordinance
No. 3355 and Ordinance No. 3375-93 as enacted by the Sangguniang Panlungsod of
Cagayan de Oro City. And we shall do so only by the criteria laid down by law and not by
our own convictions on the propriety of gambling.
9

The tests of a valid ordinance are well established. A long line of decisions has held
that to be valid, an ordinance must conform to the following substantive requirements:
1) It must not contravene the constitution or any statute.

xxx xxx xxx

2) It must not be unfair or oppressive.
(c) The general welfare provisions in this Code shall be liberally
interpreted to give more powers to local government units in
accelerating economic development and upgrading the quality of life
for the people in the community; . . . (Emphasis supplied.)
Finally, the petitioners also attack gambling as intrinsically harmful and cite various
provisions of the Constitution and several decisions of this Court expressive of the
general and official disapprobation of the vice. They invoke the State policies on the
family and the proper upbringing of the youth and, as might be expected, call attention
7
to the old case of U.S. v. Salaveria, which sustained a municipal ordinance prohibiting
the playing of panguingue. The petitioners decry the immorality of gambling. They also
impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in
creating PAGCOR and authorizing it to operate casinos "on land and sea within the
territorial jurisdiction of the Philippines."
This is the opportune time to stress an important point.
The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it
is generally considered inimical to the interests of the people, there is nothing in the
Constitution categorically proscribing or penalizing gambling or, for that matter, even
mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the
exercise of its own discretion, the legislature may prohibit gambling altogether or allow
it without limitation or it may prohibit some forms of gambling and allow others for
whatever
reasons
it
may
consider
sufficient.
Thus,
it
has
prohibited jueteng and monte but permits lotteries, cockfighting and horse-racing. In
making such choices, Congress has consulted its own wisdom, which this Court has no
authority to review, much less reverse. Well has it been said that courts do not sit to
8
resolve the merits of conflicting theories. That is the prerogative of the political
departments. It is settled that questions regarding the wisdom, morality, or practicibility

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.
5) It must be general and consistent with public policy.
6) It must not be unreasonable.
We begin by observing that under Sec. 458 of the Local Government Code, local
government units are authorized to prevent or suppress, among others, "gambling
and other prohibited games of chance." Obviously, this provision excludes games of
chance which are not prohibited but are in fact permitted by law. The petitioners are
less than accurate in claiming that the Code could have excluded such games of chance
but did not. In fact it does. The language of the section is clear and unmistakable. Under
the rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or
given the same meaning of, words with which it is associated. Accordingly, we conclude
that since the word "gambling" is associated with "and other prohibited games of
chance," the word should be read as referring to only illegal gambling which, like
the other prohibited games of chance, must be prevented or suppressed.
We could stop here as this interpretation should settle the problem quite conclusively.
But we will not. The vigorous efforts of the petitioners on behalf of the inhabitants of
Cagayan de Oro City, and the earnestness of their advocacy, deserve more than short
shrift from this Court.
The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and
the public policy embodied therein insofar as they prevent PAGCOR from exercising the

power conferred on it to operate a casino in Cagayan de Oro City. The petitioners have
an ingenious answer to this misgiving. They deny that it is the ordinances that have
changed P.D. 1869 for an ordinance admittedly cannot prevail against a statute. Their
theory is that the change has been made by the Local Government Code itself, which
was also enacted by the national lawmaking authority. In their view, the decree has
been, not really repealed by the Code, but merely "modified pro tanto" in the sense that
PAGCOR cannot now operate a casino over the objection of the local government unit
concerned. This modification of P.D. 1869 by the Local Government Code is permissible
because one law can change or repeal another law.
It seems to us that the petitioners are playing with words. While insisting that the
decree has only been "modifiedpro tanto," they are actually arguing that it is already
dead, repealed and useless for all intents and purposes because the Code has shorn
PAGCOR of all power to centralize and regulate casinos. Strictly speaking, its operations
may now be not only prohibited by the local government unit; in fact, the prohibition is
not only discretionary but mandated by Section 458 of the Code if the word "shall" as
used therein is to be given its accepted meaning. Local government units have now no
choice but to prevent and suppress gambling, which in the petitioners' view includes
both legal and illegal gambling. Under this construction, PAGCOR will have no more
games of chance to regulate or centralize as they must all be prohibited by the local
government units pursuant to the mandatory duty imposed upon them by the Code. In
this situation, PAGCOR cannot continue to exist except only as a toothless tiger or a
white elephant and will no longer be able to exercise its powers as a prime source of
government revenue through the operation of casinos.
It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause,
conveniently discarding the rest of the provision which painstakingly mentions the
specific laws or the parts thereof which are repealed (or modified) by the Code.
Significantly, P.D. 1869 is not one of them. A reading of the entire repealing clause,
which is reproduced below, will disclose the omission:
Sec. 534. Repealing Clause. (a) Batas Pambansa Blg. 337, otherwise
known as the "Local Government Code," Executive Order No. 112
(1987), and Executive Order No. 319 (1988) are hereby repealed.
(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees,
orders, instructions, memoranda and issuances related to or
concerning the barangay are hereby repealed.
(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939
regarding hospital fund; Section 3, a (3) and b (2) of Republic Act. No.
5447 regarding the Special Education Fund; Presidential Decree No.
144 as amended by Presidential Decree Nos. 559 and 1741;
Presidential Decree No. 231 as amended; Presidential Decree No. 436
as amended by Presidential Decree No. 558; and Presidential Decree

Nos. 381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed
and rendered of no force and effect.
(d) Presidential Decree No. 1594 is hereby repealed insofar as it
governs locally-funded projects.
(e) The following provisions are hereby repealed or amended insofar
as they are inconsistent with the provisions of this Code: Sections 2,
16, and 29 of Presidential Decree No. 704; Sections 12 of Presidential
Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72,
73, and 74 of Presidential Decree No. 463, as amended; and Section 16
of Presidential Decree No. 972, as amended, and
(f) All general and special laws, acts, city charters, decrees, executive
orders, proclamations and administrative regulations, or part or parts
thereof which are inconsistent with any of the provisions of this Code
are hereby repealed or modified accordingly.
Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the
absence of a clear and unmistakable showing of such intention. In Lichauco & Co. v.
10
Apostol, this Court explained:
The cases relating to the subject of repeal by implication all proceed
on the assumption that if the act of later date clearly reveals an
intention on the part of the lawmaking power to abrogate the prior
law, this intention must be given effect; but there must always be a
sufficient revelation of this intention, and it has become an unbending
rule of statutory construction that the intention to repeal a former law
will not be imputed to the Legislature when it appears that the two
statutes, or provisions, with reference to which the question arises
bear to each other the relation of general to special.
There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as
the private respondent points out, PAGCOR is mentioned as the source of funding in
two later enactments of Congress, to wit, R.A. 7309, creating a Board of Claims under
the Department of Justice for the benefit of victims of unjust punishment or detention
or of violent crimes, and R.A. 7648, providing for measures for the solution of the power
crisis. PAGCOR revenues are tapped by these two statutes. This would show that the
PAGCOR charter has not been repealed by the Local Government Code but has in fact
been improved as it were to make the entity more responsive to the fiscal problems of
the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in
an inevitably destructive confrontation, courts must exert every effort to reconcile
them, remembering that both laws deserve a becoming respect as the handiwork of a
coordinate branch of the government. On the assumption of a conflict between P.D.

1869 and the Code, the proper action is not to uphold one and annul the other but to
give effect to both by harmonizing them if possible. This is possible in the case before
us. The proper resolution of the problem at hand is to hold that under the Local
Government Code, local government units may (and indeed must) prevent and suppress
all kinds of gambling within their territories except only those allowed by statutes like
P.D. 1869. The exception reserved in such laws must be read into the Code, to make
both the Code and such laws equally effective and mutually complementary.
This approach would also affirm that there are indeed two kinds of gambling, to wit, the
illegal and those authorized by law. Legalized gambling is not a modern concept; it is
probably as old as illegal gambling, if not indeed more so. The petitioners' suggestion
that the Code authorizes them to prohibit all kinds of gambling would erase the
distinction between these two forms of gambling without a clear indication that this is
the will of the legislature. Plausibly, following this theory, the City of Manila could, by
mere ordinance, prohibit the Philippine Charity Sweepstakes Office from conducting a
lottery as authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro
Hippodrome as authorized by R.A. 309 and R.A. 983.
In light of all the above considerations, we see no way of arriving at the conclusion
urged on us by the petitioners that the ordinances in question are valid. On the
contrary, we find that the ordinances violate P.D. 1869, which has the character and
force of a statute, as well as the public policy expressed in the decree allowing the
playing of certain games of chance despite the prohibition of gambling in general.
The rationale of the requirement that the ordinances should not contravene a statute is
obvious. Municipal governments are only agents of the national government. Local
councils exercise only delegated legislative powers conferred on them by Congress as
the national lawmaking body. The delegate cannot be superior to the principal or
exercise powers higher than those of the latter. It is a heresy to suggest that the local
government units can undo the acts of Congress, from which they have derived their
power in the first place, and negate by mere ordinance the mandate of the statute.
Municipal corporations owe their origin to, and derive their powers
and rights wholly from the legislature. It breathes into them the
breath of life, without which they cannot exist. As it creates, so it may
destroy. As it may destroy, it may abridge and control. Unless there is
some constitutional limitation on the right, the legislature might, by a
single act, and if we can suppose it capable of so great a folly and so
great a wrong, sweep from existence all of the municipal corporations
in the State, and the corporation could not prevent it. We know of no
limitation on the right so far as to the corporation themselves are
concerned. They are, so to phrase it, the mere tenants at will of the
11
legislature.
This basic relationship between the national legislature and the local government units
has not been enfeebled by the new provisions in the Constitution strengthening the

policy of local autonomy. Without meaning to detract from that policy, we here confirm
that Congress retains control of the local government units although in significantly
reduced degree now than under our previous Constitutions. The power to create still
includes the power to destroy. The power to grant still includes the power to withhold
or recall. True, there are certain notable innovations in the Constitution, like the direct
12
conferment on the local government units of the power to tax, which cannot now be
withdrawn by mere statute. By and large, however, the national legislature is still the
principal of the local government units, which cannot defy its will or modify or violate it.
The Court understands and admires the concern of the petitioners for the welfare of
their constituents and their apprehensions that the welfare of Cagayan de Oro City will
be endangered by the opening of the casino. We share the view that "the hope of large
13
or easy gain, obtained without special effort, turns the head of the workman" and
14
15
that "habitual gambling is a cause of laziness and ruin." In People v. Gorostiza, we
declared: "The social scourge of gambling must be stamped out. The laws against
gambling must be enforced to the limit." George Washington called gambling "the child
of avarice, the brother of iniquity and the father of mischief." Nevertheless, we must
recognize the power of the legislature to decide, in its own wisdom, to legalize certain
forms of gambling, as was done in P.D. 1869 and impliedly affirmed in the Local
Government Code. That decision can be revoked by this Court only if it contravenes the
Constitution as the touchstone of all official acts. We do not find such contravention
here.
We hold that the power of PAGCOR to centralize and regulate all games of chance,
including casinos on land and sea within the territorial jurisdiction of the Philippines,
remains unimpaired. P.D. 1869 has not been modified by the Local Government Code,
which empowers the local government units to prevent or suppress only those forms of
gambling prohibited by law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that
cannot be amended or nullified by a mere ordinance. Hence, it was not competent for
the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353
prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93
prohibiting the operation of casinos. For all their praiseworthy motives, these
ordinances are contrary to P.D. 1869 and the public policy announced therein and are
therefore ultra vires and void.
WHEREFORE, the petition is DENIED and the challenged decision of the respondent
Court of Appeals is AFFIRMED, with costs against the petitioners. It is so ordered.
Narvasa, C.J., Feliciano, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason,
Puno, Vitug, Kapunan and Mendoza, JJ., concur.

THIRD DIVISION
[G.R. No. 127073. January 29, 1998]
JOSE P. DANS, JR., petitioner, vs. PEOPLE OF THE PHILIPPINES, respondent.
[G.R. No. 126995. January 29, 1998]
IMELDA R. MARCOS, petitioner, vs. THE HONORABLE SANDIGANBAYAN (FIRST
DIVISION), AND THE PEOPLE OF THE PHILIPPINES, respondents.
DECISION
ROMERO, J.:
A mans signature, even if merely a flourish or even if indecipherable, may signify
authority, agreement, acknowledgment and ownership. As indelible as his fingerprints,
dental records or DNA genetic map, it denotes trust and honor. But the same trust and
honor may be tainted by polluted intentions, as when signing is done in bad faith, or to
perpetrate a fraud, to deceive others, or to commit a crime. The petitions at bar will
illustrate how ones John Hancock can bring a man, or a woman for that matter, to ruin.
Sometime in 1984, then Minister of Human Settlements Imelda R. Marcos and
then Transportation and Communications Minister Jose P. Dans, Jr., petitioners herein,
entered into several contracts involving the Light Rail Transit Authority (LRTA) and the
Philippine General Hospital Foundation, Inc. (PGHFI). Concurrently and respectively,
Marcos and Dans served asex-oficio Chairman and ex-oficio Vice-Chairman of the LRTA,
and as Chairman and Director of the Board of Trustees of the PGHFI. By virtue of these
agreements, which were authorized and in fact ratified by the LRTA Board of Directors,
two vacant LRTA lots consisting of a 7,340-square meter parcel of land located in Pasay
City (the Pasay lot), and a 1,141.20-square meter lot in Carriedo, Sta. Cruz, Manila (the
Sta. Cruz lot), were leased out to the PGHFI. Specifically, the LRTA and the PGHFI,
represented by Dans and Marcos, respectively, approved three deeds, namely, an
Agreement for the Development of the Areas Adjacent to the Light Rail Transit System
[1]
Stations and the Management and Operation of the Concession Areas Therein, and
[2]
two lease agreements dated June 8 and June 18, 1984, covering the Pasay and the Sta.
Cruz lots. The terms of the lease agreements were identical except as to the price:the
lease would be good for 25 years subject to an annual escalation of 7.5%; PGHFI had the
right to sublease the lots; and the monthly lease was P102,760.00 for the Pasay lot
andP92,437.20 for the Sta. Cruz lot. Within the same month, the Pasay lot was
subleased by PGHFI, through Marcos, to Transnational Construction Corporation
[3]
[4]
(TNCC) for P734,000.00 a month, while the Sta. Cruz lot was allegedly subleased to
[5]
Joy Mart Consolidated Corporation (Joy Mart) for P199,710.00 per month.
Because of these deeds, petitioners were charged on January 14, 1992, with a
violation of Republic Act No. 3019 (the Anti-Graft and Corrupt Practices Act), to wit:
Criminal Case No. 17449

The undersigned Special Prosecution Officer I, Office of the Special

Prosecutor, hereby accuses IMELDA R. MARCOS and JOSE P. DANS, JR. of
Violation of Section 3(g) of RA 3019, as amended, committed as follows:
That on or about September 8, 1982, and for sometime prior or
subsequent thereto, in Manila, Philippines, and within the
jurisdiction of this Honorable Court, the accused IMELDA R. MARCOS
and JOSE P. DANS, JR., public officers, being then the Chairman and
Vice-Chairman, respectively, of the Light Rail Transit Authority
(LRTA), a government corporate entity created under Executive
Order No. 603 of the former President Ferdinand E. Marcos, while in
the performance of their official functions, taking advantage of their
positions and committing the crime in relation to their offices, did
then and there wilfully, unlawfully and criminally conspiring with one
another, enter on behalf of the aforesaid government corporation
into an agreement for the development of the areas adjacent to the
LRTA stations and the management and operation of the concession
areas therein, with the Philippine General Hospital Foundation, Inc.
(PGHFI), a private enterprise, under terms and conditions manifestly
and grossly disadvantageous to the government.
CONTRARY TO LAW.
Criminal Case No. 17450
The undersigned Special Prosecution Officer I, Office of the Special
Prosecutor, hereby accuses IMELDA R. MARCOS and JOSE P. DANS, JR. of
Violation of Section 3(g) of RA 3019, as amended, committed as follows:
That on or about June 8, 1984, and for sometime prior or subsequent
thereto, in Makati, Metro Manila, Philippines, and within the
jurisdiction of this Honorable Court, the accused IMELDA R. MARCOS
and JOSE P. DANS, JR., public officers, being then the Chairman and
Vice-Chairman, respectively, of the Light Rail Transit Authority
(LRTA), a government corporate entity created under Executive
Order No. 603 of the former President Ferdinand E. Marcos, while in
the performance of their official functions, taking advantage of their
positions and committing the crime in relation to their offices, did
then and there wilfully, unlawfully and criminally conspiring with one
another, enter on behalf of the aforesaid government corporation
into a Lease Agreement covering LRTA property located in Pasay City,
with the Philippine General Hospital Foundation, Inc. (PGHFI), a
private enterprise, under terms and conditions manifestly and grossly
disadvantageous to the government.
CONTRARY TO LAW.
Criminal Case No. 17451

The undersigned Special Prosecution Officer I, Office of the Special

Prosecutor, hereby accuses IMELDA R. MARCOS of Violation of Section 3(d) of
RA 3019, as amended, committed as follows:
That on or about June 8, 1984, and for sometime prior or subsequent
thereto, in Makati, Metro Manila, Philippines, and within the
jurisdiction of this Honorable Court, the accused IMELDA R. MARCOS,
a public officer, being then the Chairman of the Light Rail Transit
Authority (LRTA), a government corporate entity created under
Executive Order No. 603 of the former President Ferdinand E.
Marcos, while in the performance of her official functions, taking
advantage of her position and committing the offense in relation to
her office, did then and there wilfully, unlawfully and criminally
accepted employment and/or acted as Chairman of (the) Philippine
General Hospital Foundation, Inc. (PGHFI), a private corporation duly
organized under the laws of the Philippines, which private enterprise
had, at that time(,) pending business transactions with the accused,
in her capacity as Chairman of LRTA.
CONTRARY TO LAW.
Criminal Case No. 17452
The undersigned Special Prosecution Officer I, Office of the Special
Prosecutor, hereby accuses JOSE P. DANS, JR. of Violation of Section 3(d) of RA
3019, as amended, committed as follows:
That on or about June 8, 1984, and for sometime prior or subsequent
thereto, in Makati, Metro Manila, Philippines, and within the
jurisdiction of this Honorable Court, the accused JOSE P. DANS, JR., a
public officer, being then the Vice-Chairman of the Light Rail Transit
Authority (LRTA), a government corporate entity created under
Executive Order No. 603 of the former President Ferdinand E.
Marcos, while in the performance of his official functions, taking
advantage of his position and committing the offense in relation to
his office, did then and there wilfully, unlawfully and criminally
accepted employment and/or acted as Director of (the) Philippine
General Hospital Foundation, Inc. (PGHFI), a private corporation duly
organized under the laws of the Philippines, which private enterprise
had, at that time(,) pending business transactions with the accused,
in his capacity as Vice-Chairman of LRTA.
CONTRARY TO LAW.
Criminal Case No. 17453
The undersigned Special Prosecution Officer, Office of the Special Prosecutor,
hereby accuses IMELDA R. MARCOS and JOSE P. DANS, JR. of Violation of
Section 3(g) of RA 3019, as amended, committed as follows:

That on or about June 18, 1984, and for sometime prior or

subsequent thereto, in Makati, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, the accused IMELDA R.
MARCOS and JOSE P. DANS, JR., public officers, being then the
Chairman and Vice-Chairman, respectively, of the Light Rail Transit
Authority (LRTA), a government corporate entity created under
Executive Order No. 603 of the former President Ferdinand E.
Marcos, while in the performance of their official functions, taking
advantage of their positions and committing the crime in relation to
their offices, did then and there wilfully, unlawfully and criminally
conspiring with one another, enter on behalf of the aforesaid
government corporation into a Lease Agreement covering LRTA
property located in Sta. Cruz, Manila, with the Philippine General
Hospital Foundation, Inc. (PGHFI), a private enterprise, under terms
and conditions manifestly and grossly disadvantageous to the
government.
CONTRARY TO LAW.
In short, Marcos and Dans were separately charged under Criminal Case Nos.
17451 and 17452 for accepting employment in and/or acting as Chairman and Director,
respectively, of the PGHFI while the latter had pending business (the lease agreements)
with the LRTA, which they both also headed. With regard to the other cases, Criminal
Case Nos. 17449, 17450 and 17453, the accusations against both of them stemmed
from the contracts they signed in representation of the LRTA and of the PGHFI which
were allegedly entered into under terms and conditions manifestly and grossly
disadvantageous to the government.
When arraigned, petitioners pleaded not guilty to all of the charges. Before trial
could commence, Dans moved for the advance examination of defense witness Ramon
F. Cuervo, Jr., a real estate broker, appraiser and friend of Dans who, as an expert
witness, was in a position to inform the court that the agreed lease prices stated in the
subject agreements were fair based on standard industry valuation standards. The
court a quo granted said motion, and Cuervo was allowed to testify on August 12, 13,
and 19, 1992. During this time, Marcos never questioned Cuervo and later expressed
[6]
that she had no desire to further examine him. Five days after the final hearing of
Cuervos testimony, the trial of the five cases opened with the formal offer of the
prosecutions documentary evidence, which included, inter alia, the five agreements
mentioned earlier. On November 23, 1992, the court issued an order admitting all the
exhibits except Exhibits D and E as to Dans, who challenged the two sublease
agreements, and Exhibit E-1 as to Marcos, who, while accepting the validity of said
sublease agreement, nevertheless questioned the authenticity of her signature thereon.
In Criminal Case No. 17543, Dans filed a Motion to Dismiss (demurrer to evidence)
dated December 7, 1992, but the court denied the same, as well as his motion for
reconsideration thereof.
By the time the case was submitted for decision, Marcos had neither submitted a
[7]
formal offer of evidence, despite notice of the courts orders to do so, nor the required

memorandum.She did file a motion for inhibition of the justices of the Sandiganbayans
First Division on the ground of pre-judgment of her case based on the courts denial of
Dans demurrer to evidence, but this was denied in the courts resolution of May 20,
1993.
[8]

On September 24, 1993, the court a quo rendered judgment, acquitting

petitioners in Criminal Case Nos. 17449, 17451, and 17452, but convicting them in
Criminal Case Nos. 17450 and 17453. The decretal portion of the assailed decision is
reproduced hereunder:
WHEREFORE, judgment is now rendered
1. ACQUITTING the accused IMELDA R. MARCOS and the accused
JOSE P. DANS, JR. of the charge in Criminal Case No. 17449, there
being no manifest and gross disadvantage brought about by the
contract dated September 8, 1982;
2. ACQUITTING accused IMELDA R. MARCOS in Criminal Case No.
17451, it not having been demonstrated that the Information
charging her had given her adequate notice of the acts for which she
could be held liable under the law;
3. ACQUITTING accused JOSE P. DANS, JR. in Criminal Case No.
17452, it not having been demonstrated that the Information
charging him had given him adequate notice of the acts for which he
could be held liable under the law;
and considering that the charges against them have been proved
beyond reasonable doubt
4. CONVICTING accused IMELDA R. MARCOS and JOSE P. DANS, JR. in
Criminal Case No. 17450 under Sec. 3(g) of R.A. No. 3019, otherwise
known as the Anti-Graft and Corrupt Practices Act, and hereby
imposes upon each accused the penalty of imprisonment for an
indeterminate period of nine (9) years and one (1) day as minimum
to twelve (12) years and ten (10) days as maximum.
Both accused shall also suffer the additional penalty of perpetual
disqualification from public office as provided in Sec. 9 of R.A. No.
3019;
5. CONVICTING accused IMELDA R. MARCOS and JOSE P. DANS, JR. in
Criminal Case No. 17453 under Sec. 3(g) of R.A. No. 3019, otherwise
known as the Anti-Graft and Corrupt Practices Act, and hereby
imposes upon each accused the penalty of imprisonment for the
indeterminate period of nine (9) years and one (1) day as minimum
to twelve (12) years and ten (10) days as maximum.

Both accused shall also suffer the additional penalty of perpetual

disqualification from public office as provided in Sec. 9 of R.A. No.
3019.
The Ombudsman is given thirty (30) days from today within which to make a
determination of whether or not the other members of the Board of Directors
of the Light Rail Transit Authority during the relevant periods with respect to
the lease contracts dated June 8, 1984 and June 18, 1984 executed by said
Authority with the Philippine General Hospital Foundation, Inc. may also be
prosecuted under Sec. 3(g) of R.A. No. 3019, and to report to this Court at the
end of said period whatever determination he has made including the steps
intended to be taken hereon towards a new preliminary investigation, if the
same is appropriate.
The bonds posted for the provisional liberty of accused IMELDA R. MARCOS
and accused JOSE P. DANS, JR. in Criminal Case No. 17449, No. 17451 and No.
17452 are hereby CANCELLED.
SO ORDERED.
Petitioners filed their respective motions for reconsideration of the courts decision
on October 8, 1993. The Office of the Solicitor General also filed a motion for partial
reconsideration on the same date, seeking civil indemnity for the People of the
Philippines. On November 13, 1996, respondent court promulgated two resolutions, one
[9]
denying the motion of Dans, and another denying that of Marcos and modifying the
assailed September 24, 1993, decision with the addition of a sixth paragraph in the
[10]
dispositive portion which dealt with the civil liability of petitioners, viz.:
6. Accused IMELDA R. MARCOS and JOSE P. DANS, JR. are hereby ordered
jointly and solidarily to reimburse the Light Railway Transit Authority for the
prejudice that they have caused to said Light Railway Transit Authority
through the lease contracts which they executed.
(a) Under Criminal Case No. 17450, the sum of THIRTY TWO MILLION
ONE HUNDRED SEVENTY TWO THOUSAND PESOS (P32,172,000.00);
(b) Under Criminal Case No. 17453, the sum of NINETY TWO MILLION
TWO HUNDRED SIXTY EIGHT THOUSAND EIGHT HUNDRED FORTY
PESOS (P92,268,840.00).
Aggrieved, petitioners separately elevated their case to this Court for a review on
the following grounds:
G.R. No. 127073
I. Respondent Court erred in denying petitioners demurrer to evidence in
Criminal Case No. 17453 on the basis of baseless assumptions and conjectures
not established by evidence. Worse, in violation of mandatory rules of
evidence, the denial of the demurrer was made to rest on the advance,
conditional testimony of defense witness Ramon Cuervo which had not yet
been offered in evidence.

II. Respondent Court erred in concluding that the two lease contracts in
question were manifestly and grossly disadvantageous to the government
despite unrebutted evidence that their terms and conditions were fair and
reasonable and did not prejudice the Government.
III. Respondent Court erred when it assumed without evidentiary basis that
LRTA had put up or would put up buildings on the leased land.
IV. Respondent Court erred in holding that the lease contracts were also
grossly disadvantageous to the Government because non-payment of rentals .
. . was not actionable unless the rentals were in arrears for one year, citing
the stipulation: Should there be a delay in any payment of the rental
consideration equivalent to one year, the lessor shall have the right to take
possession of the premises, the property and improvements thereon, the
ownership of all improvements thereby accruing to the lessor. (Stip. II, par. 4).
V. Assuming without admitting that LRTA would receive less than fair rental
under the disputed lease contracts, respondent Court erred when it
considered injury to LRTA as necessarily an injury to the Government,
notwithstanding that such supposed injury to LRTA was offset by the
corresponding benefit enuring to the Philippine General Hospital (a
government hospital funded by government funds), which is inconsistent with
the theory that the disputed lease contracts were disadvantageous to the
Government. Under Sec. 3(g) of R.A. No. 3019 which seeks to protect public
interest in general by condemning contracts disadvantageous to the
Government, the term government is used in its widest sense so as to include
the national government, the government-owned and government-controlled
corporations, and all other instrumentalities or agencies of the Republic of the
Philippines and their branches. [Sec. 2(a)].
VI. While respondent Court was duty-bound to be just and impartial, it failed
to give petitioner a fair trial, who was thereby denied due process of
law. Respondent Court was plainly biased against, if not downright hostile to,
petitioner; it unfairly allied itself with the prosecution, which made it
prosecutor and judge at the same time.
VII. Aside from the foregoing, the appealed decision is flawed by fatal
infirmities which have effectively denied petitioner due process of law.
G.R. No. 126995
A. The questioned Decision is a nullity because Section 3 (g) of the Anti-Graft
and Corrupt Practices Act (RA 3019, as amended) is unconstitutional for being,
on its face, void for vagueness.
B. The questioned Decision is a nullity because Section 3 (g) of the Anti-Graft
and Corrupt Practices Act (RA 3019, as amended) is unconstitutional for being
a rider.

C. The questioned Decision is a nullity because the Informations in SB Criminal

Cases Nos. 17450 and 17453 did not state all the essential facts constituting
the offense but instead stated conclusions of law, thereby denying the
Petitioner her constitutional right to be informed of the nature and the cause
of the accusation against her (Sec. 14 (2), Bill of Rights).
D. The questioned Decision is a nullity because the Information in said SB
Criminal Cases Nos. 17450 and 17453 charged only two of the total number of
members in the Board of Directors of the LRTA and the Board of Directors of
the PGH Foundation, who had participated in the collective acts, thereby
singling Petitioner and her companion for discriminatory prosecution, in
violation of her right to Equal Protection of the Laws, which violation existed
from the filing of the information and cannot be cured by
post hoc proceedings.
E. The questioned Decision is a nullity, because of the participation therein of
Mr. Justice Garchitorena, whose long-standing bias and hostility towards
President Marcos and Petitioner Imelda R. Marcos prevented him from having
the requisite cold neutrality of an impartial judge, in violation of her right as
an accused person to Procedural Due Process of Law.
F. The questioned Decision is a nullity because Petitioner was denied of her
Constitutional Right to counsel.
1. Facts of record showing that Petitioner was deprived of and
denied her Right to Counsel.
2. Under the circumstances of record, the absence of counsel
resulting from imposition of suspension from the practice of law
upon her retained counsel, constituted deprivation of or denial of the
Right to Counsel.
3. Facts of record showing legal representation of Petitioner Imelda
Marcos was not adequate.
G. The questioned Decision is premature and had disregarded the
constitutional right of the Petitioner to present evidence in her behalf. Her
right to testify in her own behalf is a guaranteed right, the exercise of which is
her personal choice alone, and which counsel had no authority to waive in her
behalf. Besides, counsel being suspended, he could not have made a
waiver. This constitutional right to be heard by himself and counsel she is
invoking now, as part of her right to due process (Sec. 14 (1) and (2), Bill of
Rights).
H. The questioned Decision is a nullity for it was rendered in derogation of
Petitioners subsisting right to be heard and to submit evidence in her
defense. The finding of waiver is a prejudicial error. The evidence thereof on
the record is tenuous. A waiver by an accused person of the right to be heard
in her defense, including her right to testify in her own behalf must be

indubitable, and is valid only if personally exercised through her own

manifestation in open court.
I. The questioned Decision is a nullity because the crime charged was not
proven beyond a reasonable doubt, and the presumption of innocence was
not overcome, which is required by Due Process.
1. There was no disadvantage to the Government.
i. PGH Foundation is part of the Government.
ii. There was no disadvantage to the Government because
the PGH, which is part of the Government benefitted.
iii. Facts of record, especially the questioned leases, show
no disadvantage.
iv. Conviction was based on pure speculation.
v. Respondent Sandiganbayan (First Division) erred in
holding the leases disadvantageous as to rental in absence
of evidence existing at the time that higher rentals should
have been paid.
vi. Respondent Sandiganbayan erred in holding that
rentals for sub-leases were evidence of disadvantage
when such sub-leases were made later and negotiated by
a charitable foundation deserving of support through
higher rentals.
2. Assuming arguendo alleged disadvantage, the same was not
manifest nor gross.
3. Petitioner Marcos did not enter into the questioned lease
contracts on behalf of the Government.
4. The charge of conspiracy was not proved hence no basis for
liability.
5. Conviction was based on weakness of defense evidence and not
(on) strength of prosecutions evidence.
J. The questioned Decision and Resolution are null and void because the
Respondent Sandiganbayan (First Division) acted without jurisdiction in
issuing the questioned Decision and Resolution since the records clearly show
that the Court with jurisdiction over these cases is the Special Division of Five
Justices created by Admin. Order 288-93 pursuant to Sec. 5 of PD 1606 as
amended and not Respondent Sandiganbayan (First Division).
The Court resolved to consolidate the two cases inasmuch as they raise similar
issues and seek the same reliefs. The questions may be stated thus:

1) Was respondent court correct in denying the demurrer to evidence of petitioner Dans
in Criminal Case No. 17453?
After the prosecution had rested its case, Dans filed a Motion to Dismiss (Demurrer
to Evidence) dated December 7, 1992, based on Section 15, Rule 119 of the Rules of
[11]
Court. He argued that the prosecution failed to establish the fact that the lease
agreement covering the Sta. Cruz lot (Exhibit C) was manifestly and grossly
[12]
disadvantageous to the government.
On February 10, 1993, the court a quo denied the said motion in this wise:
Since per testimony of witness Ramon Cuervo, Jr. (tsn, pp. 20 to 26, August 13, 1992)
that considering the nature of the terminal at the Sta. Cruz Station, which would be
(the) subject of the lease contract between the Light Rail Transit Authority and the PGH
Foundation, Inc. (Exhibit C), the rental of the premises in question could go up
to P400,000.00 per month if the LRTA would put up the building as against the
stipulated rental of P92,437.00 actually entered into between the parties, there would
appear cause to believe that the lease contract in question was grossly disadvantageous
for (sic) the government.
For this reason, the Demurrer to Evidence of accused Jose P. Dans, Jr., dated December
7, 1992, is DENIED for lack of merit.
Dans questioned the denial on the ground that the demurrer should have been
resolved solely on the basis of the prosecutions evidence; and even assuming that it
could be resolved using the evidence for the defense, the latter must have been
[13]
previously formally offered.
These arguments are specious and must, therefore, be rejected.
Although a demurrer to evidence must be resolved based on the evidence of the
prosecution, there is nothing in the rules which would bar the court from taking
cognizance of any matter taken up during the trial or which has become part of the
records of the case, especially in this instance where the disputed evidence was taken in
advance at the request of the defendant himself. Additionally, it is erroneous to suppose
that Cuervos testimony was not formally offered at the time because (t)estimonial
[14]
evidence is formally offered by the calling of the witness to the stand. Thus, we find
merit in the manner by which the trial court justified the denial of Dans demurrer to
[15]
evidence, viz.:
First, the advance testimony of Mr. Cuervo taken at the instance of Engr. Dans
on August 12 and 13, 1992, was already part of the record(s) in these cases
when the Demurrer to Evidence was filed by Engr. Dans on December 7,
1992. The testimony was introduced into the record in exactly the same
manner as any other testimony would be presented in evidence during
trial. x x x.

Being already part of the record in these cases, the advance testimony of Mr.
Cuervo could be taken judicial notice of.
xxx xxx xxx
. . . . (J)udicial notice takes the place of proof and is of equal force. As a means
of establishing facts it is therefore superior to evidence. In its appropriate field
it displaces evidence since, as it stands for proof, it fulfills the objects which
the evidence is designed to fulfill and makes evidence
[16]
unnecessary. Consequently, the party desiring to establish a fact is relieved,
when judicial notice is taken of the fact, from introducing evidence to prove
[17]
it.
Second, having been given in the course of the proceedings in these cases, the
testimony of Mr. Cuervo constitutes judicial admission of Engr. Dans who
made it part of the record of these cases.
xxx xxx xxx

disadvantageous to the government. The allegations in the two informations are hereby
reproduced for quick reference:
That on or about June 8 [18], 1984, and for sometime prior or subsequent
thereto, in Makati, Metro Manila, Philippines, and within the jurisdiction of
this Honorable Court, the accused IMELDA R. MARCOS and JOSE P. DANS,
JR., public officers, being then the Chairman and Vice-Chairman, respectively,
of the Light Rail Transit Authority (LRTA), a government corporate entity
created under Executive Order No. 603 of the former President Ferdinand E.
Marcos, while in the performance of their official functions, taking advantage
of their positions and committing the crime in relation to their offices, did
then and there wilfully, unlawfully and criminally conspiring with one
another, enter on behalf of the aforesaid government corporation into a
Lease Agreement covering LRTA property located in Pasay City [Sta. Cruz,
Manila], with the Philippine General Hospital Foundation, Inc. (PGHFI), a
private enterprise, under terms and conditions manifestly and grossly
[21]
disadvantageous to the government. (Underscoring supplied)

As in judicial notice of a fact, admissions made in the course of the judicial

proceedings are substitutes for, and dispense with, the actual proof of
[18]
facts. The party benefited by the admission is relieved of the duty of
presenting evidence of the admitted fact and (t)he court, for the proper
decision of the case, may and should consider, without the introduction of
[19]
evidence, the fact admitted by the parties.

As can be readily observed, the informations meet the minimum requirements for them
to be upheld in court.

Third, since the advance testimony of Mr. Cuervo was given in open court and
duly recorded, the Court could not just ignore the solemn declarations therein
on the technicality that the testimony had not been formally offered in
evidence. x x x.

Assuming that the matters which Marcos wanted to see alleged in the
informations are not evidentiary in character, and that they are really vague and
ambiguous, other courses of action could have been taken, such as filing a motion for a
[23]
bill of particulars. This is what the Court precisely suggested in People v. Arlegui, viz.:

In any event, even if the testimony of Cuervo were to be excluded, there was
enough evidence proffered by the prosecution, particularly Exhibits B (the lease
agreement in favor of the PGHFI) and D (the sublease agreement in favor of TNCC)
which would have more than justified the denial of the demurrer. In other words,
notwithstanding Cuervos testimony, these exhibits constitute solid documentary proof
of petitioners liability under Section 3(g) of R.A. No. 3019, as amended, as will be shown
later in our discussion of Issue No. 5, Was the evidence properly appreciated by
respondent court?

. . . A bill of particulars while provided for under Section 6 of Rule 116 is not a
popular procedure among lawyers for the accused in criminal cases. For one
thing, it may invite an amended information which is not only clearer but may
also be stronger and more incriminating. However, it would have clarified and
corrected at an early stage the kind of doubt which the accused in this
particular case alleged to have entertained. Section 6 of Rule 116 provides:

2) Were the informations filed in Criminal Case Nos. 17450 and 17453 sufficient in form?
There appears to be no doubt that the questioned informations are reasonably
adequate as to apprise Marcos on the nature and cause of the accusations against
[20]
her. In the case of Luciano v. Estrella, the Court had occasion to enumerate the
elements of the crime under Section 3(g), R.A. No. 3019, namely, (1) that the accused is
a public officer; (2) that he entered into a contract or transaction on behalf of the
government; and (3) that such contract or transaction is grossly and manifestly

It is also alleged that for a criminal complaint or information to sufficiently inform

the accused of the nature and cause of the accusation against him, all the essential facts
[22]
constituting the offense must be stated therein, and not mere conclusions of law.

SEC. 6. Bill of Particulars. -- Defendant may, at any time on or before

arraignment, move for or demand a more definite statement or a bill
of particulars of any matter which is not averred with sufficient
definiteness or particularity to enable him properly to plead or
prepare for trial. The motion shall point out the defects complained
[24]
of and the details desired.
The more appropriate procedure under the circumstances would have been
an order from the court directing the Fiscal to amend the information because
the defect, if there ever was one, was curable by the simplest of amendments
or clarifications. (Underscoring supplied)

[25]

In fact, the records reveal that Marcos did file such a motion. After the prosecution
had filed its answer thereto, she was given an opportunity to file a reply, but she did
not, thereby indicating that she was satisfied with what was already stated in the
answer.
3) Is Section 3(g), R.A. No. 3019, as amended, constitutional?
The validity of this provision is being assailed by petitioner Marcos on grounds of
vagueness and superfluity. She claims that the phrase manifestly and grossly
disadvantageous to the government is vague for it does not set a definite standard by
which the court will be guided, thus, leaving it open to human subjectivity.
There is, however, nothing vague about the statute. The assailed provision answers
the basic query What is the violation? Anything beyond this, the hows and the whys, are
evidentiary matters which the law itself cannot possibly disclose in view of the
uniqueness of every case. The disadvantage in this instance is something that still has to
be addressed by the States evidence as the trial progresses. It may be said that the law
is intended to be flexible in order to allow the judge a certain latitude in determining if
the disadvantage to the government occasioned by the act of a public officer in entering
into a particular contract is, indeed, gross and manifest.
The personal circumstances of an accused are, in this regard, also immaterial,
[26]
because of the nature of the statute. As the Court declared in Luciano,
. . . In other words, the act treated thereunder partakes of the nature of
a malum prohibitum; it is the commission of that act as defined by the law,
not the character or effect thereof, that determines whether or not the
provision has been violated. And this construction would be in consonance
with the announced purpose for which Republic Act (No.) 3019 was enacted,
which is the repression of certain acts of public officers and private persons
constituting graft or corrupt practices or which may lead thereto. Note that
the law does not merely contemplate repression of acts that are unlawful or
corrupt per se, but even of those that may lead to or result in graft and
corruption. Thus, to require for conviction under the Anti-Graft and Corrupt
Practices Act that the validity of the contract or transaction be first proved
would be to enervate, if not defeat, the intention of the Act.
We, therefore, affirm the constitutionality of Section 3(g) of R.A No. 3019, as
amended.
4) Was petitioner Marcos deprived of her constitutional right to be heard by herself or
counsel?
Marcos claims that she was not adequately represented by counsel at the trial due
to the suspension from the practice of law of her counsel of record, Atty. Antonio
Coronel. It appears from the records, however, that during the absence of Atty. Coronel
and sometime thereafter, she was still represented by other lawyers, including Renato
Dilag, Luis Sillano, Perfecto V. Fernandez, Jose and Cristobal Fernandez, Vicente D.

Millora, Juan T. David, Balbino Diego, and the law firm of Manuel M. Lazaro and
Associates. The representation of Atty. Millora and the Fernandezes subsisted even in
this Court, where they were later substituted by Atty. Estelito Mendoza. In any event, at
the time Atty. Coronel and his replacements withdrew their respective appearances, all
evidence had already been presented. It is just that Marcos opted not to present any
evidence for her defense, relying, perhaps, on what she perceived to be glaringly weak
prosecution evidence. Or it is not impossible or far-fetched that her refusal may have
been due to her indifference to or open defiance of the justice system.
5) Was the evidence properly appreciated by respondent court?
In proclaiming his innocence, Dans relied only on his and Cuervos
testimony. Marcos, on the other hand, presented no evidence at all, claiming that she
had been prejudged by respondent court. The prosecution submitted documentary
evidence and nothing else. The question that must first be answered, therefore, is: Was
the States evidence sufficient to prove beyond a shadow of a doubt that the accused,
petitioners herein, committed the crimes for which they were held accountable?
Petitioners were charged with and found guilty of violating Section 3(g) of R.A. No.
3019, as amended. It states thus:
SEC. 3. Corrupt practices of public officers. -- In addition to acts or omissions
of public officers already penalized by existing law, the following shall
constitute corrupt practices of any public officer and are hereby declared to
be unlawful:
xxx xxx xxx
(g) Entering, on behalf of the Government, into any contract or transaction
manifestly and grossly disadvantageous to the same, whether or not the
public officer profited or will profit thereby.
It is clear that for liability to attach under the aforequoted provision, the public
officer concerned must have entered into a contract which is manifestly and grossly
disadvantageous to the Government. The court a quo phrased the focal issue in these
petitions in this wise: (A)re exhibits A, B and C, the Lease Agreements executed by the
LRTA with the PGH Foundation over the LRT property at the stations in Pasay City and
Sta. Cruz (Manila) manifestly and grossly disadvantageous to the government?
A perusal of the prosecutions documentary evidence would readily reveal, even
from a laymans perspective, that the Government was seriously prejudiced in the
transactions under review.
We concur with the observation of the court a quo that, by itself, Exhibit A, the
mother contract which initially granted the PGHFI a virtual exclusive license or franchise
over the subject properties, would neither be prejudicial (n)or beneficial to
anybody, because it did not refer to any specific property or consideration. Hence,
petitioners were correctly acquitted in Criminal Case No. 17449, which was based on
this agreement.

With regard to Criminal Case Nos. 17450 and 17453, the Court is likewise
constrained to agree with the trial court that the Government suffered a manifest and
gross disadvantage with the execution of the two lease agreements, Exhibits B and
C. The facts in this regard are undisputed.
The monthly rental price agreed upon between the LRTA and the PGHFI for the
lease of the Pasay lot was P102,760.00, and for the Sta. Cruz lot, it
was P92,437.20. Barely ten days later, the very same properties were subleased by
PGHFI to private entities for P734,000.00 (for the Pasay lot) and P199,710.00 (for the
Sta. Cruz lot). The difference in the lease price is too enormous to ignore, for no market
force could possibly have raised the rental cost in the same site by that margin in just
over a week. Even by conservative estimates, the properties could have originally been
[27]
leased out for at least P500,000.00 more. The Government was thereby deprived of
at least an additional half a million pesos per month.
Indubitably, there was some kind of conflict of interest in the premises. Marcos
and Dans, who were then Cabinet members, occupied the highest positions in the
Boards of the LRTA and the PGHFI in a concurrent capacity at the time the questioned
deals were made. They were, as it were, playing both ends; but on paper, one was
acting for the lessor and the other for the lessee. The fact that petitioners were cleared
of the charge that they acted improperly in accepting seats in the PGHFI Board of
Trustees at the time when it had pending business transactions with the LRTA, of which
they were also officers is of no moment. First, their acquittal in Criminal Case No. 17451
and No. 17452 was simply due to the insufficiency of the informations. Second, the
accusation in said informations have no bearing whatsoever on the subject matter of
the other cases filed against them as signatories to the assailed lease agreements. Even
Justice Garchitorena had occasion to advert to this conflict of interest in his resolution of
[28]
November 13, 1996.
The focus now shifts to the testimony of defense witness Ramon Cuervo. An
examination of the pleadings filed in these petitions, including all their attachments,
would demonstrate the confusion sown by Cuervos expert opinion. Petitioners insist
that Cuervo confirmed their allegation that the lease price stated in the questioned
agreements was a fair valuation based on the comparative rental costs in the immediate
vicinity of the subject properties. This inference was drawn from Cuervos calculation of
[29]
the fair monthly rental value of the Pasay lot atP73,400.00 and the Sta. Cruz lot
[30]
at P80,825.64, using standard appraisal techniques in the industry.
The court, on the other hand, interpreted his testimony differently and arrived at a
much higher valuation, that is, P210,000.00 a month for the Pasay lot and P400,000.00
monthly for the Sta. Cruz lot.
In view of this conflict in opinion, with petitioners and respondent court holding
steadfast to their respective interpretations of Cuervos testimony, this Court has no
alternative but to fall back on the documentary evidence.
Dans, in his motion to dismiss dated December 7, 1992, actually made an implied
recognition that the prosecution was able to establish the manifest and gross
disadvantage to the government brought about by the lease agreement over the Pasay

lot (Exhibit B), when he raised no objection to the presentation by the prosecution of
the sublease agreement between the PGHFI and TNCC over the same property (Exhibit
D). Just as he read the lease and sublease agreements over the Sta. Cruz lot (Exhibits C
and E) together in order to demonstrate to the court that the prosecutions evidence in
Criminal Case No. 17453 was weak, Exhibit B must also be appreciated in connection
with Exhibit D so that the gross and manifest disadvantage to the government in
Criminal Case No. 17450 can be established.
It must be noted that Dans objected vigorously to Exhibit E on the ground that it
was a mere photocopy of the original. Despite diligent efforts to locate an original
duplicate or an authentic copy, the prosecution could not produce one, so that as to
Dans, said exhibit was not admitted. The same cannot be said of Marcos who never
challenged the authenticity of Exhibit E, although she contested the validity of her
signature thereon as representative of the PGHFI, the lessor.
For a better appreciation of the evidence at hand, the lease agreements (Exhibits B
and C) must be read simultaneously with the sublease agreements (Exhibits D and
E). While Dans signed the lease agreements in behalf of the LRTA, he apparently had no
hand in the ensuing sublease of the properties, as indicated by the absence of his
signature from the two subsequent agreements. Marcos, on the other
hand, represented the PGHFI twice, first in the lease contract and later in the sublease
agreements. Within the very brief period of time that separated the lease and the
sublease of the LRTAs prime lots, Marcos inevitably generated a situation where the
[31]
LRTA, a government corporation, lost out to the PGHFI, a private
[32]
enterprise headed by Marcos herself.
But, considering that there is an allegation of conspiracy in the informations, the
sufficiency of which we have earlier upheld, should the liability of Dans be the same as
that of Marcos?
The court a quo entertained no doubt that the prosecutions evidence amply
established a conspiracy between Dans and Marcos, thus:
. . . ., (T)he avowed purpose of both accused in entering into the Lease
Agreements was not to earn additional income for the use of the LRTA in its
operations, but to give financial assistance to the PGHF in the pursuit of its
charitable objectives.
xxx xxx xxx
This expressly admitted purpose explains why the rentals stipulated in the
Lease Agreements were so low that when compared with the rentals provided
in the Sub-Lease Agreements, the latter deceivingly appear, to borrow the
words of Mr. Cuervo, to be extra-ordinarily high. To have fixed much higher
rentals would have been to reduce the income which both the accused would
like the PGHF to earn from the lease contracts. And the rentals in the Lease
Agreements all the more became very low in light of the fact that the
Agreement for the development of the areas adjacent to the LRT stations was
[33]
without any valuable consideration.

xxx xxx xxx

In these cases, Engr. Dans and Mrs. Marcos had a common objective, namely,
to lease in favor of the PGHF the Pasay City and Sta. Cruz properties under
such terms and conditions so favorable to the PGHF as to result in manifest
and gross disadvantage to the LRTA. This common purpose they pursued
together and in concert with each other, being in the position to do so
because they were both ranking officials of the LRTA and the PGHF.
Thus, on September 8, 1982, avowedly desirous to extend financial support to
the PGHF (not to the PGH), Engr. Dans, representing the LRTA, and Mrs.
Marcos, as chairman of the PGHF, executed an agreement wherein without
any valuable consideration, the latter was granted (exclusive) authority to
develop areas adjacent to the LRT stations and to operate commercial
concessions therein.
In furtherance of their common design and pursuant to their intention to
financially benefit the PGHF, Engr. Dans and Mrs. Marcos, acting in their said
representative capacities, entered into a Lease Agreement on June 8, 1984,
over the Pasay City area for P102,760.00 a month and another Lease
Agreement ten days later over the Sta. Cruz Area forP92,437.20 per month. As
already demonstrated, the monthly rentals and other stipulations in both
contracts placed the LRTA in a manifestly and grossly disadvantageous
position.
Engr. Dans and Mrs. Marcos were, therefore, both co-conspirators for having
acted in conspiracy with each other and co-principals by direct participation
for having taken direct part in the execution of the acts charged. Engr. Dans
could not have committed the offenses without Mrs. Marcos and vice[34]
versa.
While these observations cannot be said to be flawed, they were made only after
the trial, in fact, after the assailed decision was promulgated, and these conclusions are
the courts alone. The prosecution never attempted to establish a connection between
the two defendants in committing the acts for which they were charged. It is a
fundamental rule, however, that a charge of conspiracy must be proven just like any
[35]
other criminal accusation, that is, independently and beyond reasonable doubt. In
this regard, therefore, this Courts opinion that the alleged conspiracy between the
petitioners was not sufficiently established by the States evidence.

are now being impugned by petitioners who argue that the extensive questioning of
[36]
Cuervo made the Sandiganbayan, particularly Justice Garchitorena, not only a judge,
but a prosecutor as well.
To be sure, instead of being satisfied with Cuervos testimonial affirmation of what
it had all along considered to be the fair rental value of the properties, the court a
quo relied on his responses to numerous postulated queries thereby concluding there
was a gross disparity in the lease price, as agreed upon by the parties, and the projected
rental price, as estimated by Cuervo. Indeed, if the trial courts conclusions were to be
followed, the Pasay lot should fetch a monthly rental of P210,000.00 and the Sta. Cruz
lot, P400,000.00. These figures are extrapolated from the potential rental price of the
lots, considering its location.
Petitioners point out that the limitations on the right of judges to ask questions
during the trial were not observed by the Sandiganbayan. They accuse Justice
Garchitorena of acting more of a prosecutor than the impartial judge he is supposed to
be, particularly during the examination of Cuervo. Lest we be distracted by this
allegation of bias on the part of respondent court, it must be remembered that
[37]
petitioners were never prejudiced by such questioning, which is about the only thing
that would make a string of queries by a judge objectionable. As the following discussion
will reveal, the trial courts interpretation of Cuervos testimony is immaterial because of
the sufficiency of the documentary evidence of the prosecution to prove the charges
against herein petitioners.
In view of the circumstances obtaining here, we find that the trial courts active role
in this regard was necessary to clarify the mostly technical aspect of Cuervos
testimony. Respondent court defended its action by declaring that:
It was precisely for the reason that Mr. Cuervo was merely asked by Engr.
Dans lawyer as to the fair and reasonable rentals of the leased premises as
without improvements, without the LRT stations being adjacent thereto, and
not parts of commercial centers, that the Court, through Presiding Justice
Garchitorena, was constrained to propound questions on the fair and
reasonable rentals of the leased areas by considering them as not ordinary
[38]
parcels of land.

6) Were the members of the Sandiganbayans First Division biased against

petitioners? Consequently, is the assailed decision dated September 24, 1993, valid?

The Court notes that while petitioners have been making such an outcry since the
promulgation of the questioned judgment regarding the line of questioning followed by
respondent court, none of them ever objected to such queries during the trial. Neither
did they attempt to salvage the situation by asking questions on re-direct examination if
they harbored the impression that the courts cross-examination seriously prejudiced
their case. This observation was likewise made by the court a quo, to wit:

Petitioners consider erroneous the active participation of the members of the

Sandiganbayans First Division during the hearing of Cuervos testimony. The records
reveal that, indeed, the court a quo may have participated more actively than usual in
the examination of Cuervo in order to elicit from him the information that would nail
down the prosecutions basic theory, thus rendering unassailable the conclusions which

It is now too late in the day to object to the alleged leading, misleading, and
badgering questions of the Presiding Justice Garchitorena and to ask (the
court) to expunge the answers thereto from the record. Needless to say, Engr.
Dans (and Marcos, for that matter) should have done so when the supposed
objectionable nature of the questions and/or answers were propounded or
given. (Section 36, Rule 132, 1985 Rules on Evidence). As it happened, he (and

she) did not even raise his (and her) objections at the close of the testimony
of Mr. Cuervo. He (and she) did not also ask re-direct questions to correct
whatever mistakes or misimpressions allegedly crept into Mr. Cuervos
testimony. Instead, he formally offered the entire testimony without making
[39]
any exceptions or reservations.
We should stress that in affirming the conviction of petitioner Marcos, this Court
relies mainly on the prosecutions documentary evidence showing the chasmic disparity
between theP102,760.00 monthly rental stipulated in Exhibit B and the P734,000.00
monthly rental provided in Exhibit D. The testimony of Cuervo is, at best, opinion only,
but the amounts mentioned in the said two exhibits are facts which cannot be altered
by opinion, however expert. Regardless of Cuervos expert opinion on the probable
rental rate of the Pasay lot, the stubborn fact and cold reality is that the PGHFI was able
to lease it out for an amount that was seven times more than what it stipulated to pay
the government. The sublease (Exhibit D) is the best monument to the gross and
manifest disadvantage suffered by the government due to the willful actions of
Marcos. Hence, even if the questions of Justice Garchitorena and the answers thereto of
Cuervo were totally ignored by this Court, the prosecutions evidence would still firmly
stand, and would definitely be more than sufficient to warrant a conviction beyond
reasonable doubt.
Going further, petitioners insist that some impropriety attended the promulgation
of the challenged decision. This allegation stems from the dissolution of the Special
Division earlier created by Justice Garchitorena because of the lack of unanimity among
the members of the First Division.
It appears from the records that Justice Narciso T. Atienza initially wanted to acquit
the defendants in Criminal Case Nos. 17449, 17451 and 17452, while Justices
Garchitorena and Balajadia wanted to convict them in Criminal Case Nos. 17450, 17451,
17452 and 17453. There was, therefore, no unanimous vote in Criminal Case Nos. 17451
and 17452. Thereupon, aSpecial Division was constituted, with the addition of Justices
Augusto M. Amores and Cipriano A. del Rosario. Over an informal luncheon among the
[40]
members of the newly-created Special Division, however, where the merits of the
cases were incidentally discussed, an understanding was reached whereby the two
newly-appointed members agreed with Justice Atienza that the defendants should be
cleared of the charges in Criminal Case Nos. 17451 and 17452. The stance of those
present was that if the actual voting were to take place, the majority would acquit the
defendants in Criminal Case Nos. 17451 and 17452. Consequently, Justices Garchitorena
and Balajadia decided to change their opinions in said two cases, thus giving the First
Division a unanimous vote in all the cases. There seemed to be no further need for the
Special Division; hence, it was dissolved. The result is the assailed decision promulgated,
as scheduled, on September 24, 1993.
Petitioners point out that once the Special Division was created, the First Division
was thereby divested of jurisdiction to decide the case. They also maintain that the
informal discussion of the merits of the cases inside a restaurant was unofficial business
and, therefore, should have no binding effect.

While it is true that under Section 5 of Presidential Decree No. 1606, as amended,
when a unanimous vote is not reached by a division, two other justices shall be
designated by the Presiding Justice to sit in a special division, and their majority vote
shall be required to reach a valid verdict, this provision does not totally rule out a
situation where all members of the 3-justice division eventually come to a common
agreement to reach a unanimous decision, thus, making another divisions participation
in these cases redundant. This is exactly what transpired in this case. The change of
heart of Justices Garchitorena and Balajadia, though reached unofficially, may be
perceived as a supervening event which rendered the Special Divisions functions
superfluous. In any case, the fact that Justice Atienza signed his concurrence cured the
defect, if any, in the questioned judgment; again, an illustration of the curative effect of
ones signature. Petitioners are of the impression that this chain of events was meant to
railroad their conviction, thus making the magistrates concerned vulnerable to
criticism.While the Court is averse to encouraging this kind of behavior in judges, it is of
the view, however, that the assailed decision is in harmony with the basic right of an
accused to a speedy disposition of his case. This, to our mind, is more important than
any consideration of technical impropriety in resolving a case.
Summing up, was the guilt of petitioners proved beyond a reasonable doubt by the
prosecution?
We distinguish.
In Criminal Case No. 17453, we do not concur with the conclusions reached by the
court a quo. The culpability of petitioners in this case stems from their entering into the
lease agreement (Exhibit C) over the Sta. Cruz lot under terms and conditions manifestly
and grossly disadvantageous to the government, which, in this instance, is the LRTA. To
prove this assertion, the prosecution presented in evidence the sublease agreement
(Exhibit E) over the same property showing the disparity in the rental price. While the
authenticity of Exhibit D, which was used to prove the manifest and gross disadvantage
to the government occasioned by Exhibit B, was admitted by the court and by the
parties themselves, the validity of Exhibit E cannot, even up to this point, be determined
with certainty because it is a mere uncertified photocopy of the original. Thus, the gross
and manifest disadvantage to the government, which Exhibit E was supposed to
engender, remains an allegation which cannot be proved by other direct evidence. The
fact that only Dans objected to its admissibility does not mean that it is valid as to
Marcos. As a result, both petitioners should be, as they are hereby, acquitted in Criminal
Case No. 17453 on ground of reasonable doubt.
In Criminal Case No. 17450, we must further qualify our judgment.
As regards petitioner Dans, the Court is of the opinion that the prosecution failed
to prove his guilt in committing the offenses charged beyond a reasonable doubt. We
believe that his liability, if any, could only stem from a knowledge of the terms of the
sublease agreements, Exhibits D and E, which formed the core of the Courts appraisal of
the manifest and gross disadvantage to the government. Exhibit E, as already discussed,
was correctly disregarded by the court a quo for being unauthenticated. Even though he
was a Board Director of the PGHFI, Dans denied any knowledge of the execution of
Exhibits D and E, and his denial was never disproved by the prosecution. In fact, his

signature does not appear in either sublease agreements. Neither was the alleged
conspiracy between him and Marcos established by the prosecution.
It is this Courts opinion, however, that the guilt of petitioner Marcos was proved by
the State beyond reasonable doubt. She was charged with violation of Section 3(g) of
R.A. No. 3019, as amended, for executing a lease agreement (Exhibit B) in behalf of the
PGHFI, a private enterprise of which she was the Chairman, over a lot located in Pasay
City owned by the LRTA, a government corporation of which she was undeniably also
the Chairman. The consideration therefor was shown to be unfair and unreasonable
upon comparison with the rental price stipulated in the sublease agreement (Exhibit D)
which she subsequently signed for the PGHFI in favor of TNCC. That she should be held
responsible is shown by the presence of her signature in Exhibits A to E, where she acts
in different capacities. She cannot, under these circumstances, claim ignorance of the
great disparity between the rental price stipulated in the lease and the sublease
agreements. Consequently, in Criminal Case No. 17450, the conviction of petitioner
Marcos should be, as it is hereby, upheld.
Finally, the Court observes that the Sandiganbayan awarded damages to the
People in the amount of P32,172,000.00 in Criminal Case No. 17450 and P92,268,840.00
in Criminal Case No. 17453. This must be accordingly corrected.
Considering that petitioners were acquitted in Criminal Case No. 17453 due to lack
of evidence, the Court deems them likewise free from any civil liability since the fact
[41]
from which such liability might arise no longer exists.
On the other hand, in Criminal Case No. 17450, the Court observes that an error
has been committed in the computation of the damages to be awarded to the
People. The trial court based its figures on the amount it perceived to be the fair rental
value of the Pasay lot, as estimated by Cuervo, less the rental price stated in Exhibit
B. Thus, it deducted P102,760.00 (the stipulated monthly rental for the Pasay lot)
from P210,000.00 (Cuervos estimate, as interpreted by the court a quo) to arrive at a
difference of P107,240.00, which was multiplied by 12 months to reach an annual loss
[42]
of P1,286,880.00. This amount was then multiplied by the life span of the lease
[43]
contract, which is 25 years, to come up with the final award ofP32,172,000.00.
Since the estimates of Cuervo were found to be mere estimates, it is difficult to
imagine why the trial court used them as basis for its calculation of damages. As we
have already demonstrated, the gross and manifest disadvantage to the government in
Criminal Case No. 17450 was determined by comparing Exhibits B and D. The conviction
of Marcos was predicated on the nexus between these two documents, as well as on
her obvious conflict of interest in entering into them. By the same token, her civil
liability must also be made to depend on these two pieces of evidence. The correct
figures should be those stated in Exhibits B and D, to wit: P734,000.00 (the stipulated
monthly sublease rental for the Pasay lot) lessP102,760.00 (the agreed monthly lease
price for said property) times 12 months times 25 years. Thus, P734,000.00 P102,760.00 = P631,240.00 x 12 months = P7,574,880.00 x 25 years= P189,372,000.00.
WHEREFORE, judgment is hereby rendered:

1) AFFIRMING the CONVICTION of petitioner Imelda R. Marcos in Criminal Case No.

17450, with the modification that said petitioner is hereby ordered to pay the Light Rail
Transit Authority (LRTA) the amount of ONE HUNDRED EIGHTY-NINE MILLION, THREE
HUNDRED SEVENTY-TWO THOUSAND PESOS (P189,372,000.00), as and by way of
reimbursement for the prejudice caused thereto resulting from the execution of the
lease contract dated June 8, 1984; and
2) REVERSING the CONVICTION of petitioner Imelda R. Marcos in Criminal Case No.
17453 and of petitioner Jose P. Dans, Jr. in Criminal Case No. 17450 and No. 17453, on
ground of reasonable doubt.
Costs against petitioners.
SO ORDERED.
Narvasa, C.J. (Chairman), and Panganiban, JJ., concurs.
Melo, and Francisco JJ., see concurring and dissenting opinion.

Republic of the Philippines

SUPREME COURT
Manila

NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the

Philippines, by virtue of the powers vested in me by law, do hereby
direct the following:

EN BANC

Sec. 1. Establishment of a National Compoterized Identification

Reference System. A decentralized Identification Reference System
among the key basic services and social security providers is hereby
established.

G.R. No. 127685 July 23, 1998

BLAS F. OPLE, petitioner, vs.RUBEN D. TORRES, ALEXANDER AGUIRRE, HECTOR
VILLANUEVA, CIELITO HABITO, ROBERT BARBERS, CARMENCITA REODICA, CESAR
SARINO, RENATO VALENCIA, TOMAS P. AFRICA, HEAD OF THE NATIONAL COMPUTER
CENTER and CHAIRMAN OF THE COMMISSION ON AUDIT, respondents.
PUNO, J.:

Sec. 2. Inter-Agency Coordinating Committee. An Inter-Agency

Coordinating Committee (IACC) to draw-up the implementing
guidelines and oversee the implementation of the System is hereby
created, chaired by the Executive Secretary, with the following as
members:

The petition at bar is a commendable effort on the part of Senator Blas F. Ople to
prevent the shrinking of the right to privacy, which the revered Mr. Justice Brandeis
considered as "the most comprehensive of rights and the right most valued by civilized
1
men." Petitioner Ople prays that we invalidate Administrative Order No. 308 entitled
"Adoption of a National Computerized Identification Reference System" on two
important constitutional grounds, viz: one, it is a usurpation of the power of Congress to
legislate, and two, it impermissibly intrudes on our citizenry's protected zone of privacy.
We grant the petition for the rights sought to be vindicated by the petitioner need
stronger barriers against further erosion.

Head, Presidential Management Staff

A.O. No. 308 was issued by President Fidel V. Ramos On December 12, 1996 and reads
as follows:

Administrator, Social Security System,

ADOPTION OF A NATIONAL COMPUTERIZED

IDENTIFICATION REFERENCE SYSTEM
WHEREAS, there is a need to provide Filipino citizens and foreign
residents with the facility to conveniently transact business with basic
service and social security providers and other government
instrumentalities;
WHEREAS, this will require a computerized system to properly and
efficiently identify persons seeking basic services on social security and
reduce, if not totally eradicate fraudulent transactions and
misrepresentations;
WHEREAS, a concerted and collaborative effort among the various
basic services and social security providing agencies and other
government intrumentalities is required to achieve such a system;

Secretary, National Economic Development Authority

Secretary, Department of the Interior and Local Government
Secretary, Department of Health
Administrator, Government Service Insurance System,

Administrator, National Statistics Office

Managing Director, National Computer Center.
Sec. 3. Secretariat. The National Computer Center (NCC) is hereby
designated as secretariat to the IACC and as such shall provide
administrative and technical support to the IACC.
Sec. 4. Linkage Among Agencies. The Population Reference Number
(PRN) generated by the NSO shall serve as the common reference
number to establish a linkage among concerned agencies. The IACC
Secretariat shall coordinate with the different Social Security and
Services Agencies to establish the standards in the use of Biometrics
Technology and in computer application designs of their respective
systems.
Sec. 5. Conduct of Information Dissemination Campaign. The Office of
the Press Secretary, in coordination with the National Statistics Office,

the GSIS and SSS as lead agencies and other concerned agencies shall
undertake a massive tri-media information dissemination campaign to
educate and raise public awareness on the importance and use of the
PRN and the Social Security Identification Reference.

Respondents counter-argue:
A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD
WARRANT A JUDICIAL REVIEW;

Sec. 6. Funding. The funds necessary for the implementation of the

system shall be sourced from the respective budgets of the concerned
agencies.

B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND
ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT
ENCROACHING ON THE LEGISLATIVE POWERS OF CONGRESS;

Sec. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall
submit regular reports to the Office of the President through the IACC,
on the status of implementation of this undertaking.

C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE

IDENTIFICATION REFERENCE SYSTEM MAY BE SOURCED FROM THE
BUDGETS OF THE CONCERNED AGENCIES;

Sec. 8. Effectivity. This Administrative Order shall take effect

immediately.

D. A.O. NO. 308 [1996] PROTECTS AN INDIVIDUAL'S INTEREST IN

3
PRIVACY.

DONE in the City of Manila, this 12th day of December in the year of
Our Lord, Nineteen Hundred and Ninety-Six.

We now resolve.
I.

(SGD.) FIDEL V. RAMOS

A.O. No. 308 was published in four newspapers of general circulation on January 22,
1997 and January 23, 1997. On January 24, 1997, petitioner filed the instant petition
against respondents, then Executive Secretary Ruben Torres and the heads of the
government agencies, who as members of the Inter-Agency Coordinating Committee,
are charged with the implementation of A.O. No. 308. On April 8, 1997, we issued a
temporary restraining order enjoining its implementation.
Petitioner contends:
A. THE ESTABLISNMENT OF A NATIONAL COMPUTERIZED
IDENTIFICATION REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT.
THE ISSUANCE OF A.O. NO. 308 BY THE PRESIDENT OF THE REPUBLIC
OF THE PHILIPPINES IS, THEREFORE, AN UNCONSTITUTIONAL
USURPATION OF THE LEGISLATIVE POWERS OF THE CONGRESS OF THE
REPUBLIC OF THE PHILIPPINES.
B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE
IMPLEMENTATION OF A.O. NO. 308 IS AN UNCONSTITUTIONAL
USURPATION OF THE EXCLUSIVE RIGHT OF CONGRESS TO
APPROPRIATE PUBLIC FUNDS FOR EXPENDITURE.
C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE
GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF
2
RIGHTS ENSHRINED IN THE CONSTITUTION.

As is usual in constitutional litigation, respondents raise the threshold

issues relating to the standing to sue of the petitioner and the
justiciability of the case at bar. More specifically, respondents aver
that petitioner has no legal interest to uphold and that the
implementing rules of A.O. No. 308 have yet to be promulgated.

These submissions do not deserve our sympathetic ear. Petitioner Ople is a

distinguished member of our Senate. As a Senator, petitioner is possessed of the
requisite standing to bring suit raising the issue that the issuance of A.O. No. 308 is a
4
usurpation of legislative power. As taxpayer and member of the Government Service
Insurance System (GSIS), petitioner can also impugn the legality of the misalignment of
5
public funds and the misuse of GSIS funds to implement A.O. No. 308.
The ripeness for adjudication of the Petition at bar is not affected by the fact that the
implementing rules of A.O. No. 308 have yet to be promulgated. Petitioner Ople assails
A.O. No. 308 as invalid per se and as infirmed on its face. His action is not premature for
the rules yet to be promulgated cannot cure its fatal defects. Moreover, the
respondents themselves have started the implementation of A.O. No. 308 without
waiting for the rules. As early as January 19, 1997, respondent Social Security System
(SSS) caused the publication of a notice to bid for the manufacture of the National
6
Identification (ID) card. Respondent Executive Secretary Torres has publicly announced
that representatives from the GSIS and the SSS have completed the guidelines for the
7
national identification system. All signals from the respondents show their unswerving
will to implement A.O. No. 308 and we need not wait for the formality of the rules to
pass judgment on its constitutionality. In this light, the dissenters insistence that we
tighten the rule on standing is not a commendable stance as its result would be to
throttle an important constitutional principle and a fundamental right.

II.

We now come to the core issues. Petitioner claims that A.O. No. 308 is
not a mere administrative order but a law and hence, beyond the
power of the President to issue. He alleges that A.O. No. 308
establishes a system of identification that is all-encompassing in scope,
affects the life and liberty of every Filipino citizen and foreign resident,
and more particularly, violates their right to privacy.

Petitioner's sedulous concern for the Executive not to trespass on the lawmaking
domain of Congress is understandable. The blurring of the demarcation line between
the power of the Legislature to make laws and the power of the Executive to execute
laws will disturb their delicate balance of power and cannot be allowed. Hence, the
exercise by one branch of government of power belonging to another will be given a
stricter scrutiny by this Court.
The line that delineates Legislative and Executive power is not indistinct. Legislative
power is "the authority, under the Constitution, to make laws, and to alter and repeal
8
them." The Constitution, as the will of the people in their original, sovereign and
9
unlimited capacity, has vested this power in the Congress of the Philippines. The grant
10
of legislative power to Congress is broad, general and comprehensive. The legislative
11
body possesses plenary power for all purposes of civil government. Any power,
deemed to be legislative by usage and tradition, is necessarily possessed by Congress,
12
unless the Constitution has lodged it elsewhere. In fine, except as limited by the
Constitution, either expressly or impliedly, legislative power embraces all subjects and
13
extends to matters of general concern or common interest.
While Congress is vested with the power to enact laws, the President executes the
14
15
laws. The executive power is vested in the Presidents. It is generally defined as the
16
power to enforce and administer the laws. It is the power of carrying the laws into
17
practical operation and enforcing their due observance.
As head of the Executive Department, the President is the Chief Executive. He
represents the government as a whole and sees to it that all laws are enforced by the
18
officials and employees of his department. He has control over the executive
department, bureaus and offices. This means that he has the authority to assume
directly the functions of the executive department, bureau and office or interfere with
19
the discretion of its officials. Corollary to the power of control, the President also has
the duty of supervising the enforcement of laws for the maintenance of general peace
and public order. Thus, he is granted administrative power over bureaus and offices
20
under his control to enable him to discharge his duties effectively.
Administrative power is concerned with the work of applying policies and enforcing
21
orders as determined by proper governmental organs. It enables the President to fix a
uniform standard of administrative efficiency and check the official conduct of his
22
agents. To this end, he can issue administrative orders, rules and regulations.

Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not
appropriate to be covered by an administrative order. An administrative order is:
Sec. 3. Administrative Orders. Acts of the President which relate to
particular aspects of governmental operation in pursuance of his
duties as administrative head shall be promulgated in administrative
23
orders.
An administrative order is an ordinance issued by the President which relates
to specific aspects in the administrative operation of government. It must be in
harmony with the law and should be for the sole purpose of implementing the
24
law and carrying out the legislative policy. We reject the argument that A.O.
No. 308 implements the legislative policy of the Administrative Code of 1987.
The Code is a general law and "incorporates in a unified document the major
25
structural, functional and procedural principles of governance." and
"embodies changes in administrative structure and procedures designed to
serve
the
26
people." The Code is divided into seven (7) Books: Book I deals with
Sovereignty and General Administration, Book II with the Distribution of
Powers of the three branches of Government, Book III on the Office of the
President, Book IV on the Executive Branch, Book V on Constitutional
Commissions, Book VI on National Government Budgeting, and Book VII on
Administrative Procedure. These Books contain provisions on the organization,
powers and general administration of the executive, legislative and judicial
branches of government, the organization and administration of departments,
bureaus and offices under the executive branch, the organization and functions
of the Constitutional Commissions and other constitutional bodies, the rules on
the national government budget, as well as guideline for the exercise by
administrative agencies of quasi-legislative and quasi-judicial powers. The Code
covers both the internal administration of government, i.e, internal
organization, personnel and recruitment, supervision and discipline, and the
effects of the functions performed by administrative officials on private
27
individuals or parties outside government.
It cannot be simplistically argued that A.O. No. 308 merely implements the
Administrative Code of 1987. It establishes for the first time a National Computerized
Identification Reference System. Such a System requires a delicate adjustment of
various contending state policies the primacy of national security, the extent of
privacy interest against dossier-gathering by government, the choice of policies, etc.
Indeed, the dissent of Mr. Justice Mendoza states that the A.O. No. 308 involves the allimportant freedom of thought. As said administrative order redefines the parameters of
some basic rights of our citizenry vis-a-vis the State as well as the line that separates the
administrative power of the President to make rules and the legislative power of
Congress, it ought to be evident that it deals with a subject that should be covered by
law.

Nor is it correct to argue as the dissenters do that A.D. No. 308 is not a law because it
confers no right, imposes no duty, affords no proctection, and creates no office. Under
A.O. No. 308, a citizen cannot transact business with government agencies delivering
basic services to the people without the contemplated identification card. No citizen will
refuse to get this identification card for no one can avoid dealing with government. It is
thus clear as daylight that without the ID, a citizen will have difficulty exercising his
rights and enjoying his privileges. Given this reality, the contention that A.O. No. 308
gives no right and imposes no duty cannot stand.
Again, with due respect, the dissenting opinions unduly expand the limits of
administrative legislation and consequently erodes the plenary power of Congress to
make laws. This is contrary to the established approach defining the traditional limits of
administrative legislation. As well stated by Fisher: ". . . Many regulations however, bear
directly on the public. It is here that administrative legislation must he restricted in its
scope and application. Regulations are not supposed to be a substitute for the general
policy-making that Congress enacts in the form of a public law. Although administrative
regulations are entitled to respect, the authority to prescribe rules and regulations is not
28
an independent source of power to make laws."
III.

Assuming, arguendo, that A.O. No. 308 need not be the subject of a
law, still it cannot pass constitutional muster as an administrative
legislation because facially it violates the right to privacy. The essence
29
of privacy is the "right to be let alone." In the 1965 case of Griswold
30
v. Connecticut, the United States Supreme Court gave more
substance to the right of privacy when it ruled that the right has a
constitutional foundation. It held that there is a right of privacy which
can be found within the penumbras of the First, Third, Fourth, Fifth
31
and Ninth Amendments, viz:
Specific guarantees in the Bill of Rights have penumbras formed by
emanations from these guarantees that help give them life and
substance . . . various guarantees create zones of privacy. The right of
association contained in the penumbra of the First Amendment is one,
as we have seen. The Third Amendment in its prohibition against the
quartering of soldiers "in any house" in time of peace without the
consent of the owner is another facet of that privacy. The Fourth
Amendment explicitly affirms the ''right of the people to be secure in
their persons, houses and effects, against unreasonable searches and
seizures." The Fifth Amendment in its Self-Incrimination Clause
enables the citizen to create a zone of privacy which government may
not force him to surrender to his detriment. The Ninth Amendment
provides: "The enumeration in the Constitution, of certain rights, shall
not be construed to deny or disparage others retained by the people."

32

In the 1968 case of Morfe v. Mutuc, we adopted the Griswold ruling that
there is a constitutional right to privacy. Speaking thru Mr. Justice, later Chief
Justice, Enrique Fernando, we held:
xxx xxx xxx
The Griswold case invalidated a Connecticut statute which made the
use of contraceptives a criminal offence on the ground of its
amounting to an unconstitutional invasion of the right of privacy of
married persons; rightfully it stressed "a relationship lying within the
zone of privacy created by several fundamental constitutional
guarantees." It has wider implications though. The constitutional right
to privacy has come into its own.
So it is likewise in our jurisdiction. The right to privacy as such is
accorded recognition independently of its identification with liberty; in
itself, it is fully deserving of constitutional protection. The language of
Prof. Emerson is particularly apt: "The concept of limited government
has always included the idea that governmental powers stop short of
certain intrusions into the personal life of the citizen. This is indeed
one of the basic distinctions between absolute and limited
government. Ultimate and pervasive control of the individual, in all
aspects of his life, is the hallmark of the absolute state. In contrast, a
system of limited government safeguards a private sector, which
belongs to the individual, firmly distinguishing it from the public
sector, which the state can control. Protection of this private sector
protection, in other words, of the dignity and integrity of the
individual has become increasingly important as modern society
has developed. All the forces of a technological age
industrialization, urbanization, and organization operate to narrow
the area of privacy and facilitate intrusion into it. In modern terms, the
capacity to maintain and support this enclave of private life marks the
difference between a democratic and a totalitarian society."
Indeed, if we extend our judicial gaze we will find that the right of privacy is recognized
33
and enshrined in several provisions of our Constitution. It is expressly recognized in
section 3 (1) of the Bill of Rights:
Sec. 3. (1) The privacy of communication and correspondence shall be
inviolable except upon lawful order of the court, or when public safety
or order requires otherwise as prescribed by law.
Other facets of the right to privacy are protectad in various provisions of the
34
Bill of Rights, viz:

Sec. 1. No person shall be deprived of life, liberty, or property without

due process of law, nor shall any person be denied the equal
protection of the laws.
Sec. 2. The right of the people to be secure in their persons, houses
papers, and effects against unreasonable searches and seizures of
whatever nature and for any purpose shall be inviolable, and no
search warrant or warrant of arrest shall issue except upon probable
cause to be determined personally by the judge after examination
under oath or affirmation of the complainant and the witnesses he
may produce, and particularly describing the place to be searched and
the persons or things to be seized.
xxx xxx xxx
Sec. 6. The liberty of abode and of changing the same within the limits
prescribed by law shall not be impaired except upon lawful order of
the court. Neither shall the right to travel be impaired except in the
interest of national security, public safety, or public health as may be
provided by law.
xxx xxx xxx
Sec. 8. The right of the people, including those employed in the public
and private sectors, to form unions, associations, or societies for
purposes not contrary to law shall not be abridged.
Sec. 17. No person shall be compelled to be a witness against himself.
Zones of privacy are likewise recognized and protected in our laws. The Civil Code
provides that "[e]very person shall respect the dignity, personality, privacy and peace of
mind of his neighbors and other persons" and punishes as actionable torts several acts
35
by a person of meddling and prying into the privacy of another. It also holds a public
officer or employee or any private individual liable for damages for any violation of the
36
rights and liberties of another person, and recognizes the privacy of letters and other
37
private communications. The Revised Penal Code makes a crime the violation of
38
39
secrets by an officer, the revelation of trade and industrial secrets, and trespass to
40
dwelling. Invasion of privacy is an offense in special laws like the Anti-Wiretapping
41
42
43
Law, the Secrecy of Bank Deposits Act and the Intellectual Property Code. The
Rules of Court on privileged communication likewise recognize the privacy of certain
44
information.
Unlike the dissenters, we prescind from the premise that the right to privacy is a
fundamental right guaranteed by the Constitution, hence, it is the burden of
government to show that A.O. No. 308 is justified by some compelling state interest and
that it is narrowly drawn. A.O. No. 308 is predicated on two considerations: (1) the need

to provides our citizens and foreigners with the facility to conveniently transact business
with basic service and social security providers and other government instrumentalities
and (2) the need to reduce, if not totally eradicate, fraudulent transactions and
misrepresentations by persons seeking basic services. It is debatable whether these
interests are compelling enough to warrant the issuance of A.O. No. 308. But what is not
arguable is the broadness, the vagueness, the overbreadth of A.O. No. 308 which if
implemented will put our people's right to privacy in clear and present danger.
The heart of A.O. No. 308 lies in its Section 4 which provides for a Population Reference
Number (PRN) as a "common reference number to establish a linkage among concerned
agencies" through the use of "Biometrics Technology" and "computer application
designs."
Biometry or biometrics is "the science of the applicatin of statistical methods to
45
biological facts; a mathematical analysis of biological data." The term "biometrics" has
evolved into a broad category of technologies which provide precise confirmation of an
individual's identity through the use of the individual's own physiological and behavioral
46
characteristics. A physiological characteristic is a relatively stable physical
characteristic such as a fingerprint, retinal scan, hand geometry or facial features. A
behavioral characteristic is influenced by the individual's personality and includes voice
47
print, signature and keystroke. Most biometric idenfication systems use a card or
personal identificatin number (PIN) for initial identification. The biometric measurement
is used to verify that the individual holding the card or entering the PIN is the legitimate
48
owner of the card or PIN.
A most common form of biological encoding is finger-scanning where technology scans
a fingertip and turns the unique pattern therein into an individual number which is
49
called a biocrypt. The biocrypt is stored in computer data banks and becomes a means
of identifying an individual using a service. This technology requires one's fingertip to be
50
scanned every time service or access is provided. Another method is the retinal scan.
Retinal scan technology employs optical technology to map the capillary pattern of the
retina of the eye. This technology produces a unique print similar to a finger
51
print. Another biometric method is known as the "artificial nose." This device
chemically analyzes the unique combination of substances excreted from the skin of
52
people. The latest on the list of biometric achievements is the thermogram. Scientists
have found that by taking pictures of a face using infra-red cameras, a unique heat
distribution pattern is seen. The different densities of bone, skin, fat and blood vessels
53
all contribute to the individual's personal "heat signature."
In the last few decades, technology has progressed at a galloping rate. Some science
fictions are now science facts. Today, biometrics is no longer limited to the use of
fingerprint to identify an individual. It is a new science that uses various technologies in
encoding any and all biological characteristics of an individual for identification. It is
noteworthy that A.O. No. 308 does not state what specific biological characteristics and
what particular biometrics technology shall be used to identify people who will seek its

coverage. Considering the banquest of options available to the implementors of A.O.

No. 308, the fear that it threatens the right to privacy of our people is not groundless.
A.O. No. 308 should also raise our antennas for a further look will show that it does not
state whether encoding of data is limited to biological information alone for
identification purposes. In fact, the Solicitor General claims that the adoption of the
Identification Reference System will contribute to the "generation of population data for
54
development planning." This is an admission that the PRN will not be used solely for
identification but the generation of other data with remote relation to the avowed
purposes of A.O. No. 308. Clearly, the indefiniteness of A.O. No. 308 can give the
government the roving authority to store and retrieve information for a purpose other
than the identification of the individual through his PRN.
The potential for misuse of the data to be gathered under A.O. No. 308 cannot be
undarplayed as the dissenters do. Pursuant to said administrative order, an individual
must present his PRN everytime he deals with a government agency to avail of basic
services and security. His transactions with the government agency will necessarily be
recorded whether it be in the computer or in the documentary file of the agency. The
individual's file may include his transactions for loan availments, income tax returns,
statement of assets and liabilities, reimbursements for medication, hospitalization, etc.
The more frequent the use of the PRN, the better the chance of building a huge
55
formidable informatin base through the electronic linkage of the files. The data may
be gathered for gainful and useful government purposes; but the existence of this vast
reservoir of personal information constitutes a covert invitation to misuse, a temptation
56
that may be too great for some of our authorities to resist.
We can even grant, arguendo, that the computer data file will be limited to the name,
57
address and other basic personal infomation about the individual. Even that
hospitable assumption will not save A.O. No. 308 from constitutional infirmity for again
said order does not tell us in clear and categorical terms how these information
gathered shall he handled. It does not provide who shall control and access the data,
under what circumstances and for what purpose. These factors are essential to
58
safeguard the privacy and guaranty the integrity of the information. Well to note, the
computer linkage gives other government agencies access to the information. Yet, there
are no controls to guard against leakage of information. When the access code of the
control programs of the particular computer system is broken, an intruder, without fear
of sanction or penalty, can make use of the data for whatever purpose, or worse,
59
manipulate the data stored within the system.
It is plain and we hold that A.O. No. 308 falls short of assuring that personal information
which will be gathered about our people will only be processed for unequivocally
60
specified purposes. The lack of proper safeguards in this regard of A.O. No. 308 may
interfere with the individual's liberty of abode and travel by enabling authorities to track
down his movement; it may also enable unscrupulous persons to access confidential
information and circumvent the right against self-incrimination; it may pave the way for
"fishing expeditions" by government authorities and evade the right against

61

unreasonable searches and seizures. The possibilities of abuse and misuse of the PRN,
biometrics and computer technology are accentuated when we consider that the
individual lacks control over what can be read or placed on his ID, much less verify the
62
correctness of the data encoded. They threaten the very abuses that the Bill of Rights
63
seeks to prevent.
The ability of sophisticated data center to generate a comprehensive cradle-to-grave
dossier on an individual and transmit it over a national network is one of the most
64
graphic threats of the computer revolution. The computer is capable of producing a
comprehensive dossier on individuals out of information given at different times and for
65
varied purposes. It can continue adding to the stored data and keeping the
information up to date. Retrieval of stored date is simple. When information of a
privileged character finds its way into the computer, it can be extracted together with
66
other data on the subject. Once extracted, the information is putty in the hands of any
person. The end of privacy begins.
Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions would
dismiss its danger to the right to privacy as speculative and hypothetical. Again, we
cannot countenance such a laidback posture. The Court will not be true to its role as the
ultimate guardian of the people's liberty if it would not immediately smother the sparks
that endanger their rights but would rather wait for the fire that could consume them.
We reject the argument of the Solicitor General that an individual has a reasonable
expectation of privacy with regard to the Natioal ID and the use of biometrics
technology as it stands on quicksand. The reasonableness of a person's expectation of
privacy depends on a two-part test: (1) whether by his conduct, the individual has
exhibited an expectation of privacy; and (2) whether this expectation is one that society
67
recognizes as reasonable. The factual circumstances of the case determines the
68
reasonableness of the expectation. However, other factors, such as customs, physical
surroundings and practices of a particular activity, may serve to create or diminish this
69
expectation. The use of biometrics and computer technology in A.O. No. 308 does not
70
assure the individual of a reasonable expectation of privacy. As technology advances,
71
the level of reasonably expected privacy decreases. The measure of protection
granted by the reasonable expectation diminishes as relevant technology becomes
72
more widely accepted. The security of the computer data file depends not only on the
physical inaccessibility of the file but also on the advances in hardware and software
computer technology. A.O. No. 308 is so widely drawn that a minimum standard for a
reasonable expectation of privacy, regardless of technology used, cannot be inferred
from its provisions.
The rules and regulations to be by the IACC cannot remedy this fatal defect. Rules and
regulations merely implement the policy of the law or order. On its face, A.O. No. gives
the IACC virtually infettered discretion to determine the metes and bounds of the ID
System.

Nor do your present laws prvide adequate safeguards for a reasonable expectation of
privacy. Commonwealth Act. No. 591 penalizes the disclosure by any person of data
73
furnished by the individual to the NSO with imprisonment and fine. Republic Act. No.
74
1161 prohibits public disclosure of SSS employment records and reports. These laws,
however, apply to records and data with the NSO and the SSS. It is not clear whether
they may be applied to data with the other government agencies forming part of the
National ID System. The need to clarify the penal aspect of A.O. No. 308 is another
reason why its enactment should be given to Congress.
Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right of
75
privacy by using the rational relationship test. He stressed that the purposes of A.O.
No. 308 are: (1) to streamline and speed up the implementation of basic government
services, (2) eradicate fraud by avoiding duplication of services, and (3) generate
population data for development planning. He cocludes that these purposes justify the
76
incursions into the right to privacy for the means are rationally related to the end.
77

We are not impressed by the argument. In Morfe v. Mutuc, we upheld the

constitutionality of R.A. 3019, the Anti-Graft and Corrupt Practices Act, as a valid police
power measure. We declared that the law, in compelling a public officer to make an
annual report disclosing his assets and liabilities, his sources of income and expenses,
did not infringe on the individual's right to privacy. The law was enacted to promote
morality in public administration by curtailing and minimizing the opportunities for
78
official corruption and maintaining a standard of honesty in the public service.
The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a statute,
not an administrative order. Secondly, R.A. 3019 itself is sufficiently detailed. The law is
clear on what practices were prohibited and penalized, and it was narrowly drawn to
avoid abuses. IN the case at bar, A.O. No. 308 may have been impelled by a worthy
purpose, but, it cannot pass constitutional scrutiny for it is not narrowly drawn. And we
now hod that when the integrity of a fundamental right is at stake, this court will give
the challenged law, administrative order, rule or regulation a stricter scrutiny. It will not
do for the authorities to invoke the presumption of regularity in the performance of
official duties. Nor is it enough for the authorities to prove that their act is not irrational
for a basic right can be diminished, if not defeated, even when the government does not
act irrationally. They must satisfactorily show the presence of compelling state interests
and that the law, rule or regulation is narrowly drawn to preclude abuses. This approach
is demanded by the 1987 Constitution whose entire matrix is designed to protect
human rights and to prevent authoritarianism. In case of doubt, the least we can do is to
lean towards the stance that will not put in danger the rights protected by the
Constitutions.
79

The case of Whalen v. Roe cited by the Solicitor General is also off-line. In Whalen, the
United States Supreme Court was presented with the question of whether the State of
New York could keep a centralized computer record of the names and addresses of all
persons who obtained certain drugs pursuant to a doctor's prescription. The New York
State Controlled Substance Act of 1972 required physicians to identify parties obtaining

prescription drugs enumerated in the statute, i.e., drugs with a recognized medical use
but with a potential for abuse, so that the names and addresses of the patients can be
recorded in a centralized computer file of the State Department of Health. The plaintiffs,
who were patients and doctors, claimed that some people might decline necessary
medication because of their fear that the computerized data may be readily available
and open to public disclosure; and that once disclosed, it may stigmatize them as drug
80
addicts. The plaintiffs alleged that the statute invaded a constitutionally protected
zone of privacy, i.e., the individual interest in avoiding disclosure of personal matters,
and the interest in independence in making certain kinds of important decisions. The
U.S. Supreme Court held that while an individual's interest in avoiding disclosuer of
personal matter is an aspect of the right to privacy, the statute did not pose a grievous
threat to establish a constitutional violation. The Court found that the statute was
necessary to aid in the enforcement of laws designed to minimize the misuse of
dangerous drugs. The patient-identification requirement was a product of an orderly
and rational legislative decision made upon recommmendation by a specially appointed
commission which held extensive hearings on the matter. Moreover, the statute was
narrowly drawn and contained numerous safeguards against indiscriminate disclosure.
The statute laid down the procedure and requirements for the gathering, storage and
retrieval of the informatin. It ebumerated who were authorized to access the data. It
also prohibited public disclosure of the data by imposing penalties for its violation. In
view of these safeguards, the infringement of the patients' right to privacy was justified
by a valid exercise of police power. As we discussed above, A.O. No. 308 lacks these vital
safeguards.
Even while we strike down A.O. No. 308, we spell out in neon that the Court is not per
se agains the use of computers to accumulate, store, process, retvieve and transmit data
to improve our bureaucracy. Computers work wonders to achieve the efficiency which
both government and private industry seek. Many information system in different
countries make use of the computer to facilitate important social objective, such as
better law enforcement, faster delivery of public services, more efficient management
of credit and insurance programs, improvement of telecommunications and
81
streamlining of financial activities. Used wisely, data stored in the computer could
help good administration by making accurate and comprehensive information for those
82
who have to frame policy and make key decisions. The benefits of the computer has
83
revolutionized information technology. It developed the internet, introduced the
84
concept of cyberspace and the information superhighway where the individual, armed
only with his personal computer, may surf and search all kinds and classes of
information from libraries and databases connected to the net.
In no uncertain terms, we also underscore that the right to privacy does not bar all
incursions into individual privacy. The right is not intended to stifle scientific and
technological advancements that enhance public service and the common good. It
85
merely requires that the law be narrowly focused and a compelling interest justify
86
such intrusions. Intrusions into the right must be accompanied by proper safeguards
and well-defined standards to prevent unconstitutional invasions. We reiterate that any

law or order that invades individual privacy will be subjected by this Court to strict
scrutiny. The reason for this stance was laid down in Morfe v. Mutuc, to wit:

Narvasa, C.J., I join Justices Kapunan and Mendoza in their dissents.

Regalado, J., In the result.

The concept of limited government has always included the idea that
governmental powers stop short of certain intrusions into the
personal life of the citizen. This is indeed one of the basic disctinctions
between absolute and limited government. Ultimate and pervasive
control of the individual, in all aspects of his life, is the hallmark of the
absolute state. In contrast, a system of limited government safeguards
a private sector, which belongs to the individual, firmly distinguishing
it from the public sector, which the state can control. Protection of
this private sector protection, in other words, of the dignity and
integrity of the individual has become increasingly important as
modern society has developed. All the forces of a technological age
industrialization, urbanization, and organization operate to narrow
the area of privacy and facilitate intrusion into it. In modern terms, the
capacity to maintain and support this enclave of private life marks the
87
difference between a democratic and a totalitarian society.
IV.

The right to privacy is one of the most threatened rights of man living
in a mass society. The threats emanate from various sources
88
governments, journalists, employers, social scientists, etc. In th case
at bar, the threat comes from the executive branch of government
which by issuing A.O. No. 308 pressures the people to surrender their
privacy by giving information about themselves on the pretext that it
will facilitate delivery of basic services. Given the record-keeping
power of the computer, only the indifferent fail to perceive the danger
that A.O. No. 308 gives the government the power to compile a
devastating dossier against unsuspecting citizens. It is timely to take
note of the well-worded warning of Kalvin, Jr., "the disturbing result
could be that everyone will live burdened by an unerasable record of
his past and his limitations. In a way, the threat is that because of its
record-keeping, the society will have lost its benign capacity to
89
forget." Oblivious to this counsel, the dissents still say we should not
be too quick in labelling the right to privacy as a fundamental right.
We close with the statement that the right to privacy was not
engraved in our Constitution for flattery.

IN VIEW WHEREOF, the petition is granted and Adminisrative Order No. 308 entitled
"Adoption of a National Computerized Identification Reference System" declared null
and void for being unconstitutional.
SO ORDERED.
Bellosillo and Martinez, JJ., concur.

Davide, Jr., In the result and I join Mr. Justice Panganiban in his separate opinion.
Romero, J., Please see separate opinion.
Melo, J., I join the dissents of Justices Kapunan and Mendoza.
Vitug, J., See separate opinion.
Kapunan, J., See dissenting opinion.
Mendoza, J., Please see dissenting opinion.
Panganiban, J., Please see Separate Opinion.
Quisumbing, J., I join in dissenting opinion of JJ. Mendoza and Kapunan.
Purisima, J., I join in Justice Mendoza's dissenting.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-45987

May 5, 1939

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
CAYAT, defendant-appellant.

Act, except as provided in section one hereof; and it shall be the duty of any
police officer or other duly authorized agent of the Insular or any provincial,
municipal or township government to seize and forthwith destroy any such
liquors found unlawfully in the possession of any member of a non-Christian
tribe.
SEC. 3. Any person violating the provisions of section one or section two of this
Act shall, upon conviction thereof, be punishable for each offense by a fine of
not exceeding two hundred pesos or by imprisonment for a term not exceeding
six months, in the discretion of the court.
The accused challenges the constitutionality of the Act on the following grounds:

Sinai Hamada y Cario for appellant.

Office of the Solicitor-General Tuason for appellee.

(1) That it is discriminatory and denies the equal protection of the laws;

MORAN, J.:

(2) That it is violative of the due process clause of the Constitution: and.

Prosecuted for violation of Act No. 1639 (secs. 2 and 3), the accused, Cayat, a native of
Baguio, Benguet, Mountain Province, was sentenced by the justice of the peace court of
Baguio to pay a fine of five pesos (P5) or suffer subsidiary imprisonment in case of
insolvency. On appeal of the Court of First Instance, the following information was filed
against him:

(3) That it is improper exercise of the police power of the state.

That on or about the 25th day of January, 1937, in the City of Baguio,
Commonwealth of the Philippines, and within the jurisdiction of this court, the
above-named accused, Cayat, being a member of the non-Christian tribes, did
then and there willfully, unlawfully, and illegally receive, acquire, and have in
his possession and under his control or custody, one bottle of A-1-1 gin, an
intoxicating liquor, other than the so-called native wines and liquors which the
members of such tribes have been accustomed themselves to make prior to
the passage of Act No. 1639.
Accused interposed a demurrer which was overruled. At the trial, he admitted all the
facts alleged in the information, but pleaded not guilty to the charge for the reasons
adduced in his demurrer and submitted the case on the pleadings. The trial court found
him guilty of the crime charged and sentenced him to pay a fine of fifty pesos (P50) or
supper subsidiary imprisonment in case of insolvency. The case is now before this court
on appeal. Sections 2 and 3 of Act No. 1639 read:
SEC. 2. It shall be unlawful for any native of the Philippine Islands who is a
member of a non-Christian tribe within the meaning of the Act Numbered
Thirteen hundred and ninety-seven, to buy, receive, have in his possession, or
drink any ardent spirits, ale, beer, wine, or intoxicating liquors of any kind,
other than the so-called native wines and liquors which the members of such
tribes have been accustomed themselves to make prior to the passage of this

Counsel for the appellant holds out his brief as the "brief for the non-Christian tribes." It
is said that as these less civilized elements of the Filipino population are "jealous of their
rights in a democracy," any attempt to treat them with discrimination or "mark them as
inferior or less capable rate or less entitled" will meet with their instant challenge. As
the constitutionality of the Act here involved is questioned for purposes thus
mentioned, it becomes imperative to examine and resolve the issues raised in the light
of the policy of the government towards the non-Christian tribes adopted and
consistently followed from the Spanish times to the present, more often with sacrifice
and tribulation but always with conscience and humanity.
As early as 1551, the Spanish Government had assumed an unvarying solicitous attitude
toward these inhabitants, and in the different laws of the Indies, their concentration in
so-called "reducciones" (communities) have been persistently attempted with the end
in view of according them the "spiritual and temporal benefits" of civilized life.
Throughout the Spanish regime, it had been regarded by the Spanish Government as a
sacred "duty to conscience and humanity" to civilize these less fortunate people living
"in the obscurity of ignorance" and to accord them the "the moral and material
advantages" of community life and the "protection and vigilance afforded them by the
same laws." (Decree of the Governor-General of the Philippines, Jan. 14, 1887.) This
policy had not been deflected from during the American period. President McKinley in
his instructions to the Philippine Commission of April 7, 1900, said:
In dealing with the uncivilized tribes of the Islands, the Commission should
adopt the same course followed by Congress in permitting the tribes of our
North American Indians to maintain their tribal organization and government,
and under which many of those tribes are now living in peace and
contentment, surrounded by civilization to which they are unable or unwilling

to conform. Such tribal government should, however, be subjected to wise and

firm regulation; and, without undue or petty interference, constant and active
effort should be exercised to prevent barbarous practices and introduce
civilized customs.
Since then and up to the present, the government has been constantly vexed with the
problem of determining "those practicable means of bringing about their advancement
in civilization and material prosperity." (See, Act No. 253.) "Placed in an alternative of
either letting them alone or guiding them in the path of civilization," the present
government "has chosen to adopt the latter measure as one more in accord with
humanity and with the national conscience." (Memorandum of Secretary of the Interior,
quoted in Rubi vs. Provincial Board of Mindoro, 39 Phil., 660, 714.) To this end, their
homes and firesides have been brought in contact with civilized communities through a
network of highways and communications; the benefits of public education have to
them been extended; and more lately, even the right of suffrage. And to complement
this policy of attraction and assimilation, the Legislature has passed Act No. 1639
undoubtedly to secure for them the blessings of peace and harmony; to facilitate, and
not to mar, their rapid and steady march to civilization and culture. It is, therefore, in
this light that the Act must be understood and applied.
It is an established principle of constitutional law that the guaranty of the equal
protection of the laws is not equal protection of the laws is not violated by a legislation
based on reasonable classification. And the classification, to be reasonable, (1) must rest
on substantial distinctions; (2) must be germane to the purposes of the law; (3) must
not be limited to existing conditions only; and (4) must apply equally to all members of
the same class. (Borgnisvs. Falk Co., 133 N.W., 209; Lindsley vs. Natural Carbonic Gas
Co., 220 U.S. 61; 55 Law. ed., Rubi vs. Provincial Board of Mindoro, 39 Phil., 660; People
and Hongkong & Shanghai Banking Corporation vs. Vera and Cu Unjieng, 37 Off. Gaz .,
187.)
Act No. 1639 satisfies these requirements. The classification rests on real and
substantial, not merely imaginary or whimsical, distinctions. It is not based upon
"accident of birth or parentage," as counsel to the appellant asserts, but upon the
degree of civilization and culture. "The term 'non-Christian tribes' refers, not to religious
belief, but, in a way, to the geographical area, and, more directly, to natives of the
Philippine Islands of a low grade of civilization, usually living in tribal relationship apart
from settled communities." (Rubi vs. Provincial Board of Mindoro, supra.) This
distinction is unquestionably reasonable, for the Act was intended to meet the peculiar
conditions existing in the non-Christian tribes. The exceptional cases of certain members
thereof who at present have reached a position of cultural equality with their Christian
brothers, cannot affect the reasonableness of the classification thus established.
That it is germane to the purposes of law cannot be doubted. The prohibition "to buy,
receive, have in his possession, or drink any ardent spirits, ale, beer, wine, or
intoxicating liquors of any kind, other than the so-called native wines and liquors which
the members of such tribes have been accustomed themselves to make prior to the

passage of this Act.," is unquestionably designed to insure peace and order in and
among the non-Christian tribes. It has been the sad experience of the past, as the
observations of the lower court disclose, that the free use of highly intoxicating liquors
by the non-Christian tribes have often resulted in lawlessness and crimes, thereby
hampering the efforts of the government to raise their standard of life and civilization.
The law is not limited in its application to conditions existing at the time of its
enactment. It is intended to apply for all times as long as those conditions exist. The Act
was not predicated, as counsel for appellant asserts, upon the assumption that the nonChristians are "impermeable to any civilizing influence." On the contrary, the Legislature
understood that the civilization of a people is a slow process and that hand in hand with
it must go measures of protection and security.
Finally, that the Act applies equally to all members of the class is evident from a perusal
thereof. That it may be unfair in its operation against a certain number non-Christians
by reason of their degree of culture, is not an argument against the equality of its
application.
Appellants contends that that provision of the law empowering any police officer or
other duly authorized agent of the government to seize and forthwith destroy any
prohibited liquors found unlawfully in the possession of any member of the nonChristian tribes is violative of the due process of law provided in the Constitution. But
this provision is not involved in the case at bar. Besides, to constitute due process of
law, notice and hearing are not always necessary. This rule is especially true where
much must be left to the discretion of the administrative officials in applying a law to
particular cases. (McGehee, Due Process of Law p. 371, cited with approval in
Rubivs. Provincial Board of Mindoro, supra.) Due process of law means simply: (1) that
there shall be a law prescribed in harmony with the general powers of the legislative
department of the government; (2) that it shall be reasonable in its operation; (3) that it
shall be enforced according to the regular methods of procedure prescribed; and (4)
that it shall be applicable alike to all citizens of the state or to all of the class.
(U.S. vs. Ling Su Fan, 10 Phil., 104, affirmed on appeal by the United States Supreme
Court, 218 U.S., 302: 54 Law. ed., 1049.) Thus, a person's property may be seized by the
government in payment of taxes without judicial hearing; or property used in violation
of law may be confiscated (U.S. vs. Surla, 20 Phil., 163, 167), or when the property
constitutes corpus delicti, as in the instant case (Moreno vs. Ago Chi, 12 Phil., 439, 442).
Neither is the Act an improper exercise of the police power of the state. It has been said
that the police power is the most insistent and least limitable of all powers of the
government. It has been aptly described as a power co-extensive with self-protection
and constitutes the law of overruling necessity. Any measure intended to promote the
health, peace, morals, education and good order of the people or to increase the
industries of the state, develop its resources and add to its wealth and prosperity
(Barbier vs. Connolly, 113 U.S., 27), is a legitimate exercise of the police power, unless
shown to be whimsical or capricious as to unduly interfere with the rights of an
individual, the same must be upheld.

Act No. 1639, as above stated, is designed to promote peace and order in the nonChristian tribes so as to remove all obstacles to their moral and intellectual growth and,
eventually, to hasten their equalization and unification with the rest of their Christian
brothers. Its ultimate purpose can be no other than to unify the Filipino people with a
view to a greater Philippines.
The law, then, does not seek to mark the non-Christian tribes as "an inferior or less
capable race." On the contrary, all measures thus far adopted in the promotion of the
public policy towards them rest upon a recognition of their inherent right to equality in
tht enjoyment of those privileges now enjoyed by their Christian brothers. But as there
can be no true equality before the law, if there is, in fact, no equality in education, the
government has endeavored, by appropriate measures, to raise their culture and
civilization and secure for them the benefits of their progress, with the ultimate end in
view of placing them with their Christian brothers on the basis of true equality. It is
indeed gratifying that the non-Christian tribes "far from retrograding, are definitely
asserting themselves in a competitive world," as appellant's attorney impressively avers,
and that they are "a virile, up-and -coming people eager to take their place in the
world's social scheme." As a matter of fact, there are now lawyers, doctors and other
professionals educated in the best institutions here and in America. Their active
participation in the multifarious welfare activities of community life or in the delicate
duties of government is certainly a source of pride and gratification to people of the
Philippines. But whether conditions have so changed as to warrant a partial or complete
abrogation of the law, is a matter which rests exclusively within the prerogative of the
National Assembly to determine. In the constitutional scheme of our government, this
court can go no farther than to inquire whether the Legislature had the power to enact
the law. If the power exists, and we hold it does exist, the wisdom of the policy adopted,
and the adequacy under existing conditions of the measures enacted to forward it, are
matters which this court has no authority to pass upon. And, if in the application of the
law, the educated non-Christians shall incidentally suffer, the justification still exists in
the all-comprehending principle of salus populi suprema est lex. When the public safety
or the public morals require the discontinuance of a certain practice by certain class of
persons, the hand of the Legislature cannot be stayed from providing for its
discontinuance by any incidental inconvenience which some members of the class may
suffer. The private interests of such members must yield to the paramount interests of
the nation (Cf. Boston Beer Co. vs. Mass., 97 U.S., 25; 24 law. ed., 989).
Judgment is affirmed, with costs against appellant.
Avancea, C.J., Villa-Real, Imperial, Diaz, Laurel, and Conception, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-29646 November 10, 1978
MAYOR ANTONIO J. VILLEGAS, petitioner,
vs.
HIU CHIONG TSAI PAO HO and JUDGE FRANCISCO ARCA, respondents.
Angel C. Cruz, Gregorio A. Ejercito, Felix C. Chaves & Jose Laureta for petitioner.
Sotero H. Laurel for respondents.
FERNANDEZ, J.:
This is a petition for certiorari to review tile decision dated September 17, 1968 of
respondent Judge Francisco Arca of the Court of First Instance of Manila, Branch I, in
Civil Case No. 72797, the dispositive portion of winch reads.
Wherefore, judgment is hereby rendered in favor of the petitioner and
against the respondents, declaring Ordinance No. 6 37 of the City of
Manila null and void. The preliminary injunction is made permanent.
No pronouncement as to cost.
SO ORDERED.
Manila, Philippines, September 17, 1968.
(SGD.) FRANCISCO ARCA
Judge

The controverted Ordinance No. 6537 was passed by the Municipal Board of Manila on
February 22, 1968 and signed by the herein petitioner Mayor Antonio J. Villegas of
2
Manila on March 27, 1968.
City Ordinance No. 6537 is entitled:
AN ORDINANCE MAKING IT UNLAWFUL FOR ANY PERSON NOT A
CITIZEN OF THE PHILIPPINES TO BE EMPLOYED IN ANY PLACE OF
EMPLOYMENT OR TO BE ENGAGED IN ANY KIND OF TRADE, BUSINESS

OR OCCUPATION WITHIN THE CITY OF MANILA WITHOUT FIRST

SECURING AN EMPLOYMENT PERMIT FROM THE MAYOR OF MANILA;
3
AND FOR OTHER PURPOSES.
4

Section 1 of said Ordinance No. 6537 prohibits aliens from being employed or to
engage or participate in any position or occupation or business enumerated therein,
whether permanent, temporary or casual, without first securing an employment permit
from the Mayor of Manila and paying the permit fee of P50.00 except persons
employed in the diplomatic or consular missions of foreign countries, or in the technical
assistance programs of both the Philippine Government and any foreign government,
and those working in their respective households, and members of religious orders or
congregations, sect or denomination, who are not paid monetarily or in kind.
Violations of this ordinance is punishable by an imprisonment of not less than three (3)
months to six (6) months or fine of not less than P100.00 but not more than P200.00 or
5
both such fine and imprisonment, upon conviction.
On May 4, 1968, private respondent Hiu Chiong Tsai Pao Ho who was employed in
Manila, filed a petition with the Court of First Instance of Manila, Branch I, denominated
as Civil Case No. 72797, praying for the issuance of the writ of preliminary injunction
and restraining order to stop the enforcement of Ordinance No. 6537 as well as for a
6
judgment declaring said Ordinance No. 6537 null and void.
In this petition, Hiu Chiong Tsai Pao Ho assigned the following as his grounds for wanting
the ordinance declared null and void:
1) As a revenue measure imposed on aliens employed in the City of
Manila, Ordinance No. 6537 is discriminatory and violative of the rule
of the uniformity in taxation;
2) As a police power measure, it makes no distinction between useful
and non-useful occupations, imposing a fixed P50.00 employment
permit, which is out of proportion to the cost of registration and that
it fails to prescribe any standard to guide and/or limit the action of the
Mayor, thus, violating the fundamental principle on illegal delegation
of legislative powers:
3) It is arbitrary, oppressive and unreasonable, being applied only to
aliens who are thus, deprived of their rights to life, liberty and
property and therefore, violates the due process and equal protection
7
clauses of the Constitution.
On May 24, 1968, respondent Judge issued the writ of preliminary injunction and on
September 17, 1968 rendered judgment declaring Ordinance No. 6537 null and void and
8
making permanent the writ of preliminary injunction.

Contesting the aforecited decision of respondent Judge, then Mayor Antonio J. Villegas
filed the present petition on March 27, 1969. Petitioner assigned the following as errors
allegedly committed by respondent Judge in the latter's decision of September
9
17,1968:
I.

II.

III.

THE RESPONDENT JUDGE COMMITTED A SERIOUS AND

PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO.
6537 VIOLATED THE CARDINAL RULE OF UNIFORMITY OF
TAXATION.
RESPONDENT JUDGE LIKEWISE COMMITTED A GRAVE AND
PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO.
6537 VIOLATED THE PRINCIPLE AGAINST UNDUE
DESIGNATION OF LEGISLATIVE POWER.
RESPONDENT JUDGE FURTHER COMMITTED A SERIOUS AND
PATENT ERROR OF LAW IN RULING THAT ORDINANCE NO.
6537 VIOLATED THE DUE PROCESS AND EQUAL PROTECTION
CLAUSES OF THE CONSTITUTION.

Petitioner Mayor Villegas argues that Ordinance No. 6537 cannot be declared null and
void on the ground that it violated the rule on uniformity of taxation because the rule
on uniformity of taxation applies only to purely tax or revenue measures and that
Ordinance No. 6537 is not a tax or revenue measure but is an exercise of the police
power of the state, it being principally a regulatory measure in nature.
The contention that Ordinance No. 6537 is not a purely tax or revenue measure because
its principal purpose is regulatory in nature has no merit. While it is true that the first
part which requires that the alien shall secure an employment permit from the Mayor
involves the exercise of discretion and judgment in the processing and approval or
disapproval of applications for employment permits and therefore is regulatory in
character the second part which requires the payment of P50.00 as employee's fee is
not regulatory but a revenue measure. There is no logic or justification in exacting
P50.00 from aliens who have been cleared for employment. It is obvious that the
purpose of the ordinance is to raise money under the guise of regulation.
The P50.00 fee is unreasonable not only because it is excessive but because it fails to
consider valid substantial differences in situation among individual aliens who are
required to pay it. Although the equal protection clause of the Constitution does not
forbid classification, it is imperative that the classification should be based on real and
substantial differences having a reasonable relation to the subject of the particular
legislation. The same amount of P50.00 is being collected from every employed alien
whether he is casual or permanent, part time or full time or whether he is a lowly
employee or a highly paid executive

expresses no purpose to be attained by requiring a permit, enumerates no conditions

for its grant or refusal, and entirely lacks standard, thus conferring upon the Mayor
arbitrary and unrestricted power to grant or deny the issuance of building permits, such
ordinance is invalid, being an undefined and unlimited delegation of power to allow or
10
prevent an activity per se lawful.
11

In Chinese Flour Importers Association vs. Price Stabilization Board, where a law
granted a government agency power to determine the allocation of wheat flour among
importers, the Supreme Court ruled against the interpretation of uncontrolled power as
it vested in the administrative officer an arbitrary discretion to be exercised without a
policy, rule, or standard from which it can be measured or controlled.
12

It was also held in Primicias vs. Fugoso that the authority and discretion to grant and
refuse permits of all classes conferred upon the Mayor of Manila by the Revised Charter
of Manila is not uncontrolled discretion but legal discretion to be exercised within the
limits of the law.
Ordinance No. 6537 is void because it does not contain or suggest any standard or
criterion to guide the mayor in the exercise of the power which has been granted to him
by the ordinance.
The ordinance in question violates the due process of law and equal protection rule of
the Constitution.
Requiring a person before he can be employed to get a permit from the City Mayor of
Manila who may withhold or refuse it at will is tantamount to denying him the basic
right of the people in the Philippines to engage in a means of livelihood. While it is true
that the Philippines as a State is not obliged to admit aliens within its territory, once an
alien is admitted, he cannot be deprived of life without due process of law. This
guarantee includes the means of livelihood. The shelter of protection under the due
13
process and equal protection clause is given to all persons, both aliens and citizens.
The trial court did not commit the errors assigned.
WHEREFORE, the decision appealed from is hereby affirmed, without pronouncement as
to costs.
SO ORDERED.
Barredo, Makasiar, Muoz Palma, Santos and Guerrero, JJ., concur.
Castro, C.J., Antonio and Aquino, Fernando, JJ., concur in the result.

Ordinance No. 6537 does not lay down any criterion or standard to guide the Mayor in
the exercise of his discretion. It has been held that where an ordinance of a municipality
fails to state any policy or to set up any standard to guide or limit the mayor's action,

Concepcion, Jr., J., took no part.

Republic of the Philippines

SUPREME COURT
Manila

Petitioner Dumlao alleges that the aforecited provision is directed insidiously against
him, and that the classification provided therein is based on "purely arbitrary grounds
and, therefore, class legislation."

EN BANC

For their part, petitioners igot and Salapantan, Jr. assail the validity of the following
statutory provisions:

G.R. No. L-52245 January 22, 1980

PATRICIO DUMLAO, ROMEO B. IGOT, and ALFREDO SALAPANTAN, JR., petitioners,
vs.
COMMISSION ON ELECTIONS, respondent.

Sec 7. Terms of Office Unless sooner removed for cause, all local
elective officials hereinabove mentioned shall hold office for a term of
six (6) years, which shall commence on the first Monday of March
1980.

Raul M. Gonzales for petitioners

.... (Batas Pambansa Blg. 51) Sec. 4.

Office of the Solicitor General for respondent.

Sec. 4. ...

MELENCIO-HERRERA, J:

Any person who has committed any act of disloyalty to the State,
including acts amounting to subversion, insurrection, rebellion or
other similar crimes, shall not be qualified to be a candidate for any of
the offices covered by this Act, or to participate in any partisan
political activity therein:

This is a Petition for Prohibition with Preliminary Injunction and/or Restraining Order
filed by petitioners, in their own behalf and all others allegedly similarly situated,
seeking to enjoin respondent Commission on Elections (COMELEC) from implementing
certain provisions of Batas Pambansa Big. 51, 52, and 53 for being unconstitutional.
The Petition alleges that petitioner, Patricio Dumlao, is a former Governor of Nueva
Vizcaya, who has filed his certificate of candidacy for said position of Governor in the
forthcoming elections of January 30, 1980. Petitioner, Romeo B. Igot, is a taxpayer, a
qualified voter and a member of the Bar who, as such, has taken his oath to support the
Constitution and obey the laws of the land. Petitioner, Alfredo Salapantan, Jr., is also a
taxpayer, a qualified voter, and a resident of San Miguel, Iloilo.

provided that a judgment of conviction for any of the aforementioned

crimes shall be conclusive evidence of such fact and
the filing of charges for the commission of such crimes before a civil
court or military tribunal after preliminary investigation shall be prima
fascie evidence of such fact.
... (Batas Pambansa Big. 52) (Paragraphing and Emphasis supplied).

Petitioner Dumlao specifically questions the constitutionality of section 4 of Batas

Pambansa Blg. 52 as discriminatory and contrary to the equal protection and due
process guarantees of the Constitution. Said Section 4 provides:

Section 1. Election of certain Local Officials ... The election shall be

held on January 30, 1980. (Batas Pambansa, Blg. 52)

Sec. 4. Special Disqualification in addition to violation of section 10 of

Art. XI I-C of the Constitution and disqualification mentioned in
existing laws, which are hereby declared as disqualification for any of
the elective officials enumerated in section 1 hereof.

Section 6. Election and Campaign Period The election period shall

be fixed by the Commission on Elections in accordance with Section 6,
Art. XII-C of the Constitution. The period of campaign shall commence
on December 29, 1979 and terminate on January 28, 1980. (ibid.)

Any retired elective provincial city or municipal official who has

received payment of the retirement benefits to which he is entitled
under the law, and who shall have been 6,5 years of age at the
commencement of the term of office to which he seeks to be elected
shall not be qualified to run for the same elective local office from
which he has retired (Emphasis supplied)

In addition to the above-cited provisions, petitioners Igot and Salapantan, Jr. also
question the accreditation of some political parties by respondent COMELEC, as
authorized by Batas Pambansa Blg. 53, on the ground that it is contrary to section
9(1)Art. XIIC of the Constitution, which provides that a "bona fide candidate for any
public office shall be it. from any form of harassment and discrimination. "The question

of accreditation will not be taken up in this case but in that of Bacalso, et als. vs.
COMELEC et als. No. L-52232) where the issue has been squarely raised,
Petitioners then pray that the statutory provisions they have challenged be declared null
and void for being violative of the Constitution.

abstract, a hypothetical issue, and in effect, a petition for an advisory opinion from this
Court to be rendered without the benefit of a detailed factual record Petitioner
Dumlao's case is clearly within the primary jurisdiction (see concurring Opinion of now
Chief Justice Fernando in Peralta vs. Comelec, 82 SCRA 30, 96 [1978]) of respondent
COMELEC as provided for in section 2, Art. XII-C, for the Constitution the pertinent
portion of which reads:

I . The procedural Aspect

"Section 2. The Commission on Elections shall have the following power and functions:
At the outset, it should be stated that this Petition suffers from basic procedural
infirmities, hence, traditionally unacceptable for judicial resolution. For one, there is a
misjoinder of parties and actions. Petitioner Dumlao's interest is alien to that of
petitioners Igot and Salapantan Petitioner Dumlao does not join petitioners Igot and
Salapantan in the burden of their complaint, nor do the latter join Dumlao in his. The
respectively contest completely different statutory provisions. Petitioner Dumlao has
joined this suit in his individual capacity as a candidate. The action of petitioners Igot
and Salapantan is more in the nature of a taxpayer's suit. Although petitioners plead
nine constraints as the reason of their joint Petition, it would have required only a
modicum more of effort tor petitioner Dumlao, on one hand said petitioners lgot and
Salapantan, on the other, to have filed separate suits, in the interest of orderly
procedure.
For another, there are standards that have to be followed inthe exercise of the function
of judicial review, namely (1) the existence of an appropriate case:, (2) an interest
personal and substantial by the party raising the constitutional question: (3) the plea
that the function be exercised at the earliest opportunity and (4) the necessity that the
constiutional question be passed upon in order to decide the case (People vs. Vera 65
Phil. 56 [1937]).
It may be conceded that the third requisite has been complied with, which is, that the
parties have raised the issue of constitutionality early enough in their pleadings.
This Petition, however, has fallen far short of the other three criteria.
A. Actual case and controversy.
It is basic that the power of judicial review is limited to the determination of actual cases
and controversies.
Petitioner Dumlao assails the constitutionality of the first paragraph of section 4 of
Batas Pambansa Blg. 52, quoted earlier, as being contrary to the equal protection clause
guaranteed by the Constitution, and seeks to prohibit respondent COMELEC from
implementing said provision. Yet, Dumlao has not been adversely affected by the
application of that provision. No petition seeking Dumlao's disqualification has been
filed before the COMELEC. There is no ruling of that constitutional body on the matter,
which this Court is being asked to review on Certiorari. His is a question posed in the

1) xxx
2) Be the sole judge of all contests relating to the elections, returns
and qualifications of all members of the National Assembly and
elective provincial and city officials. (Emphasis supplied)
The aforequoted provision must also be related to section 11 of Art. XII-C, which
provides:
Section 11. Any decision, order, or ruling of the Commission may be
brought to the Supreme Court on certiorari by the aggrieved party
within thirty days from his receipt of a copy thereof.
B. Proper party.
The long-standing rule has been that "the person who impugns the validity of a statute
must have a personal and substantial interest in the case such that he has sustained, or
will sustain, direct injury as a result of its enforcement" (People vs. Vera, supra).
In the case of petitioners Igot and Salapantan, it was only during the hearing, not in their
Petition, that Igot is said to be a candidate for Councilor. Even then, it cannot be denied
that neither one has been convicted nor charged with acts of disloyalty to the State, nor
disqualified from being candidates for local elective positions. Neither one of them has
been calle ed to have been adversely affected by the operation of the statutory
provisions they assail as unconstitutional Theirs is a generated grievance. They have no
personal nor substantial interest at stake. In the absence of any litigate interest, they
can claim no locus standi in seeking judicial redress.
It is true that petitioners Igot and Salapantan have instituted this case as a taxpayer's
suit, and that the rule enunciated in People vs. Vera, above stated, has been relaxed in
Pascual vs. The Secretary of Public Works (110 Phil. 331 [1960], thus:
... it is well settled that the validity of a statute may be contested only
by one who will sustain a direct injury in consequence of its
enforcement. Yet, there are many decisions nullifying at the instance
of taxpayers, laws providing for the disbursement of public funds,

upon the theory that "the expenditure of public funds, by an officer of

the State for the purpose of administering an unconstitutional act
constitutes a misapplication of such funds," which may be enjoined at
the request of a taxpayer.
In the same vein, it has been held:
In the determination of the degree of interest essential to give the
requisite standing to attack the constitutionality of a statute, the
general rule is that not only persons individually affected, but also
taxpayers have sufficient interest in preventing the illegal expenditure
of moneys raised by taxation and they may, therefore, question the
constitutionality of statutes requiring expenditure of public moneys.
(Philippine Constitution Association, Inc., et als., vs. Gimenez, et als.,
15 SCRA 479 [1965]).

II. The substantive viewpoint.

We have resolved, however, to rule squarely on two of the challenged provisions, the
Courts not being entirely without discretion in the matter. Thus, adherence to the strict
procedural standard was relaxed in Tinio vs. Mina(26 SCRA 512 [1968]); Edu vs.
Ericta (35 SCRA 481 [1970]); and in Gonzalez vs. Comelec (27 SCRA 835 [1969]), the
Opinion in the Tinio and Gonzalez cases having been penned by our present Chief
Justice. The reasons which have impelled us are the paramount public interest involved
and the proximity of the elections which will be held only a few days hence.
Petitioner Dumlao's contention that section 4 of BP Blg. 52 is discriminatory against him
personally is belied by the fact that several petitions for the disqualification of other
candidates for local positions based on the challenged provision have already been filed
with the COMELEC (as listed in p. 15, respondent's Comment). This tellingly overthrows
Dumlao's contention of intentional or purposeful discrimination.

However, the statutory provisions questioned in this case, namely, sec. 7, BP Blg. 51,
and sections 4, 1, and 6 BP Blg. 52, do not directly involve the disbursement of public
funds. While, concededly, the elections to be held involve the expenditure of public
moneys, nowhere in their Petition do said petitioners allege that their tax money is
"being extracted and spent in violation of specific constitutional protections against
abuses of legislative power" (Flast v. Cohen, 392 U.S., 83 [1960]), or that there is a
misapplication of such funds by respondent COMELEC (see Pascual vs. Secretary of
Public Works, 110 Phil. 331 [1960]), or that public money is being deflected to any
improper purpose. Neither do petitioners seek to restrain respondent from wasting
public funds through the enforcement of an invalid or unconstitutional law. (Philippine
Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine Constitution
Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution of a taxpayer's
suit, per se is no assurance of judicial review. As held by this Court in Tan vs.
Macapagal (43 SCRA 677 [1972]), speaking through our present Chief Justice, this Court
is vested with discretion as to whether or not a taxpayer's suit should be entertained.

The assertion that Section 4 of BP Blg. 52 is contrary to the safer guard of equal
protection is neither well taken. The constitutional guarantee of equal protection of the
laws is subject to rational classification. If the groupings are based on reasonable and
real differentiations, one class can be treated and regulated differently from another
class. For purposes of public service, employees 65 years of age, have been validly
classified differently from younger employees. Employees attaining that age are subject
to compulsory retirement, while those of younger ages are not so compulsorily
retirable.

C. Unavoidability of constitutional question.

Coming now to the case of retirees. Retirement from government service may or may
not be a reasonable disqualification for elective local officials. For one thing, there can
also be retirees from government service at ages, say below 65. It may neither be
reasonable to disqualify retirees, aged 65, for a 65 year old retiree could be a good local
official just like one, aged 65, who is not a retiree.

Again upon the authority of People vs. Vera, "it is a wellsettled rule that the
constitutionality of an act of the legislature will not be determined by the courts unless
that question is properly raised and presented in appropriate cases and is necessary to a
determination of the case; i.e., the issue of constitutionality must be the very lis mota
presented."
We have already stated that, by the standards set forth in People vs. Vera, the present is
not an "appropriate case" for either petitioner Dumlao or for petitioners Igot and
Salapantan. They are actually without cause of action. It follows that the necessity for
resolving the issue of constitutionality is absent, and procedural regularity would
require that this suit be dismissed.

In respect of election to provincial, city, or municipal positions, to require that

candidates should not be more than 65 years of age at the time they assume office, if
applicable to everyone, might or might not be a reasonable classification although, as
the Solicitor General has intimated, a good policy of the law would be to promote the
emergence of younger blood in our political elective echelons. On the other hand, it
might be that persons more than 65 years old may also be good elective local officials.

But, in the case of a 65-year old elective local official, who has retired from a provincial,
city or municipal office, there is reason to disqualify him from running for the same
office from which he had retired, as provided for in the challenged provision. The need
for new blood assumes relevance. The tiredness of the retiree for government work is
present, and what is emphatically significant is that the retired employee has already
declared himself tired and unavailable for the same government work, but, which, by
virtue of a change of mind, he would like to assume again. It is for this very reason that
inequality will neither result from the application of the challenged provision. Just as

that provision does not deny equal protection neither does it permit of such denial (see
People vs. Vera, 65 Phil. 56 [1933]). Persons similarly situated are sinlilarly treated.
In fine, it bears reiteration that the equal protection clause does not forbid all legal
classification. What is proscribes is a classification which is arbitrary and unreasonable.
That constitutional guarantee is not violated by a reasonable classification based upon
substantial distinctions, where the classification is germane to the purpose of the law
and applies to all Chose belonging to the same class (Peralta vs. Comelec, 82 SCRA 30
[1978] citing Felwa vs. Salas, 18 SCRA 606 [1966]; Rafael v. Embroidery and Apparel
Control and Inspection Board, 21 SCRA 336 [1967]; Inchong etc., et al. vs. Hernandez
101 Phil. 1155 [1957]). The purpose of the law is to allow the emergence of younger
blood in local governments. The classification in question being pursuant to that
purpose, it cannot be considered invalid "even it at times, it may be susceptible to the
objection that it is marred by theoretical inconsistencies" (Chief Justice Fernando, The
Constitution of the Philippines, 1977 ed., p. 547).
There is an additional consideration. Absent herein is a showing of the clear invalidity of
the questioned provision. Well accepted is the rule that to justify the nullification of a
law, there must be a clear and unequivocal breach of the Constitution, not a doubtful
and equivocal breach. Courts are practically unanimous in the pronouncement that laws
shall not be declared invalid unless the conflict with the Constitution is clear beyond
reasonable doubt (Peralta vs. COMELEC, 82 SCRA 55 [1978], citing Cooper vs. Telfair 4
Dall 14; Dodd, Cases on Constitutional Law, 3rd ed. 1942, 56). Lastly, it is within the
compentence of the legislature to prescribe qualifications for one who desires to
become a candidate for office provided they are reasonable, as in this case.
In so far as the petition of Igot and Salapantan are concerned, the second paragraph of
section 4 of Batas Pambansa Blg. 52, quoted in full earlier, and which they challenge,
may be divided in two parts. The first provides:

him before a civil or military tribunal. It condemns before one is fully heard. In ultimate
effect, except as to the degree of proof, no distinction is made between a person
convicted of acts of dislotalty and one against whom charges have been filed for such
acts, as both of them would be ineligible to run for public office. A person disqualified to
run for public office on the ground that charges have been filed against him is virtually
placed in the same category as a person already convicted of a crime with the penalty
of arresto, which carries with it the accessory penalty of suspension of the right to hold
office during the term of the sentence (Art. 44, Revised Penal Code).
And although the filing of charges is considered as but prima facie evidence, and
therefore, may be rebutted, yet. there is "clear and present danger" that because of the
proximity of the elections, time constraints will prevent one charged with acts of
disloyalty from offering contrary proof to overcome the prima facie evidence against
him.
Additionally, it is best that evidence pro and con of acts of disloyalty be aired before the
Courts rather than before an administrative body such as the COMELEC. A highly
possible conflict of findings between two government bodies, to the extreme detriment
of a person charged, will thereby be avoided. Furthermore, a legislative/administrative
determination of guilt should not be allowed to be substituted for a judicial
determination.
Being infected with constitutional infirmity, a partial declaration of nullity of only that
objectionable portion is mandated. It is separable from the first portion of the second
paragraph of section 4 of Batas Pambansa Big. 52 which can stand by itself.
WHEREFORE, 1) the first paragraph of section 4 of Batas pambansa Bilang 52 is hereby
declared valid. Said paragraph reads:

The supremacy of the Constitution stands out as the cardinal principle. We are aware of
the presumption of validity that attaches to a challenged statute, of the well-settled
principle that "all reasonable doubts should be resolved in favor of constitutionality,"
and that Courts will not set aside a statute as constitutionally defective "except in a
clear case." (People vs. Vera, supra). We are constrained to hold that this is one such
clear case.

SEC. 4. Special disqualification. In addition to violation of Section 10

of Article XII(C) of the Constitution and disqualifications mentioned in
existing laws which are hereby declared as disqualification for any of
the elective officials enumerated in Section 1 hereof, any retired
elective provincial, city or municipal official, who has received
payment of the retirement benefits to which he is entitled under the
law and who shall have been 65 years of age at the commencement of
the term of office to which he seeks to be elected, shall not be
qualified to run for the same elective local office from which he has
retired.

Explicit is the constitutional provision that, in all criminal prosecutions, the accused shall
be presumed innocent until the contrary is proved, and shall enjoy the right to be heard
by himself and counsel (Article IV, section 19, 1973 Constitution). An accusation,
according to the fundamental law, is not synonymous with guilt. The challenged proviso
contravenes the constitutional presumption of innocence, as a candidate is disqualified
from running for public office on the ground alone that charges have been filed against

2) That portion of the second paragraph of section 4 of Batas

Pambansa Bilang 52 providing that "... the filing of charges for the
commission of such crimes before a civil court or military tribunal after
preliminary investigation shall be prima facie evidence of such fact", is
hereby declared null and void, for being violative of the constitutional
presumption of innocence guaranteed to an accused.

a. judgment of conviction jor any of the aforementioned crimes shall

be conclusive evidence of such fact ...

G.R. No. L-23794

Republic of the Philippines

SUPREME COURT
Manila

upheld the constitutionality of the ordinance and declared the taxing power of
defendant chartered city broadened by the Local Autonomy Act to include all other
forms of taxes, licenses or fees not excluded in its charter.

EN BANC

Appeal therefrom was directly taken to Us by plaintiff Ormoc Sugar Company, Inc.
Appellant alleges the same statutory and constitutional violations in the aforesaid taxing
ordinance mentioned earlier.

February 17, 1968

ORMOC SUGAR COMPANY, INC., plaintiff-appellant,

vs.
THE TREASURER OF ORMOC CITY, THE MUNICIPAL BOARD OF ORMOC CITY, HON.
ESTEBAN C. CONEJOS as Mayor of Ormoc City and ORMOC CITY, defendants-appellees.
Ponce Enrile, Siguion Reyna, Montecillo & Belo and Teehankee, Carreon & Taada for
plaintiff-appellant.
Ramon O. de Veyra for defendants-appellees.
BENGZON, J.P., J.:
1

On January 29, 1964, the Municipal Board of Ormoc City passed Ordinance No. 4,
Series of 1964, imposing "on any and all productions of centrifugal sugar milled at the
Ormoc Sugar Company, Inc., in Ormoc City a municipal tax equivalent to one per centum
2
(1%) per export sale to the United States of America and other foreign countries."
Payments for said tax were made, under protest, by Ormoc Sugar Company, Inc.
on March 20, 1964 for P7,087.50 and on April 20, 1964 for P5,000, or a total of
P12,087.50.
On June 1, 1964, Ormoc Sugar Company, Inc. filed before the Court of First
3
Instance of Leyte, with service of a copy upon the Solicitor General, a complaint against
the City of Ormoc as well as its Treasurer, Municipal Board and Mayor, alleging that the
afore-stated ordinance is unconstitutional for being violative of the equal protection
clause (Sec. 1[1], Art. III, Constitution) and the rule of uniformity of taxation (Sec. 22[1]),
Art. VI, Constitution), aside from being an export tax forbidden under Section 2287 of
the Revised Administrative Code. It further alleged that the tax is neither a production
nor a license tax which Ormoc City under Section 15-kk of its charter and under Section
2 of Republic Act 2264, otherwise known as the Local Autonomy Act, is authorized to
impose; and that the tax amounts to a customs duty, fee or charge in violation of
paragraph 1 of Section 2 of Republic Act 2264 because the tax is on both the sale and
export of sugar.
Answering, the defendants asserted that the tax ordinance was within defendant
city's power to enact under the Local Autonomy Act and that the same did not violate
the afore-cited constitutional limitations. After pre-trial and submission of the case on
memoranda, the Court of First Instance, on August 6, 1964, rendered a decision that

Section 1 of the ordinance states: "There shall be paid to the City Treasurer on any
and all productions of centrifugal sugar milled at the Ormoc Sugar Company,
Incorporated, in Ormoc City, a municipal tax equivalent to one per centum (1%) per
export sale to the United States of America and other foreign countries." Though
referred to as a tax on the export of centrifugal sugar produced at Ormoc Sugar
Company, Inc. For production of sugar alone is not taxable; the only time the tax applies
is when the sugar produced is exported.
Appellant questions the authority of the defendant Municipal Board to levy such
an export tax, in view of Section 2287 of the Revised Administrative Code which denies
from municipal councils the power to impose an export tax. Section 2287 in part states:
"It shall not be in the power of the municipal council to impose a tax in any form
whatever, upon goods and merchandise carried into the municipality, or out of the
same, and any attempt to impose an import or export tax upon such goods in the guise
of an unreasonable charge for wharfage use of bridges or otherwise, shall be void."
Subsequently, however, Section 2 of Republic Act 2264 effective June 19, 1959,
gave chartered cities, municipalities and municipal districts authority to levy for public
purposes just and uniform taxes, licenses or fees. Anent the inconsistency between
Section 2287 of the Revised Administrative Code and Section 2 of Republic Act 2264,
4
this Court, in Nin Bay Mining Co. v. Municipality of Roxas held the former to have been
repealed by the latter. And expressing Our awareness of the transcendental effects that
municipal export or import taxes or licenses will have on the national economy, due to
Section 2 of Republic Act 2264, We stated that there was no other alternative until
Congress acts to provide remedial measures to forestall any unfavorable results.
The point remains to be determined, however, whether constitutional limits on
the power of taxation, specifically the equal protection clause and rule of uniformity of
taxation, were infringed.
The Constitution in the bill of rights provides: ". . . nor shall any person be denied
5
the equal protection of the laws." (Sec. 1 [1], Art. III) In Felwa vs. Salas, We ruled that
the equal protection clause applies only to persons or things identically situated and
does not bar a reasonable classification of the subject of legislation, and a classification
is reasonable where (1) it is based on substantial distinctions which make real
differences; (2) these are germane to the purpose of the law; (3) the classification
applies not only to present conditions but also to future conditions which are

substantially identical to those of the present; (4) the classification applies only to those
who belong to the same class.
A perusal of the requisites instantly shows that the questioned ordinance does not
meet them, for it taxes only centrifugal sugar produced and exported by the Ormoc
Sugar Company, Inc. and none other. At the time of the taxing ordinance's enactment,
Ormoc Sugar Company, Inc., it is true, was the only sugar central in the city of Ormoc.
Still, the classification, to be reasonable, should be in terms applicable to future
conditions as well. The taxing ordinance should not be singular and exclusive as to
exclude any subsequently established sugar central, of the same class as plaintiff, for the
coverage of the tax. As it is now, even if later a similar company is set up, it cannot be
subject to the tax because the ordinance expressly points only to Ormoc City Sugar
Company, Inc. as the entity to be levied upon.
Appellant, however, is not entitled to interest; on the refund because the taxes
6
were not arbitrarily collected (Collector of Internal Revenue v. Binalbagan). At the time
of collection, the ordinance provided a sufficient basis to preclude arbitrariness, the
same being then presumed constitutional until declared otherwise.
WHEREFORE, the decision appealed from is hereby reversed, the challenged
ordinance is declared unconstitutional and the defendants-appellees are hereby
ordered to refund the P12,087.50 plaintiff-appellant paid under protest. No costs. So
ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and
Fernando, JJ., concur.1wph1.t

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 91649

In their Second Amended Petition, petitioners also claim that PD 1869 is contrary to the
declared national policy of the "new restored democracy" and the people's will as
expressed in the 1987 Constitution. The decree is said to have a "gambling objective"
and therefore is contrary to Sections 11, 12 and 13 of Article II, Sec. 1 of Article VIII and
Section 3 (2) of Article XIV, of the present Constitution (p. 3, Second Amended Petition;
p. 21, Rollo).

May 14, 1991

ATTORNEYS HUMBERTO BASCO, EDILBERTO BALCE, SOCRATES MARANAN AND

LORENZO SANCHEZ,petitioners,
vs.
PHILIPPINE AMUSEMENTS AND GAMING CORPORATION (PAGCOR), respondent.
H.B. Basco & Associates for petitioners.
Valmonte Law Offices collaborating counsel for petitioners.
Aguirre, Laborte and Capule for respondent PAGCOR.
PARAS, J.:
A TV ad proudly announces:
"The new PAGCOR responding through responsible gaming."
But the petitioners think otherwise, that is why, they filed the instant petition seeking to
annul the Philippine Amusement and Gaming Corporation (PAGCOR) Charter PD
1869, because it is allegedly contrary to morals, public policy and order, and because
A. It constitutes a waiver of a right prejudicial to a third person with a right
recognized by law. It waived the Manila City government's right to impose
taxes and license fees, which is recognized by law;
B. For the same reason stated in the immediately preceding paragraph, the law
has intruded into the local government's right to impose local taxes and license
fees. This, in contravention of the constitutionally enshrined principle of local
autonomy;
C. It violates the equal protection clause of the constitution in that it legalizes
PAGCOR conducted gambling, while most other forms of gambling are
outlawed, together with prostitution, drug trafficking and other vices;
D. It violates the avowed trend of the Cory government away from
monopolistic and crony economy, and toward free enterprise and privatization.
(p. 2, Amended Petition; p. 7, Rollo)

The procedural issue is whether petitioners, as taxpayers and practicing lawyers

(petitioner Basco being also the Chairman of the Committee on Laws of the City Council
of Manila), can question and seek the annulment of PD 1869 on the alleged grounds
mentioned above.
The Philippine Amusements and Gaming Corporation (PAGCOR) was created by virtue of
P.D. 1067-A dated January 1, 1977 and was granted a franchise under P.D. 1067-B also
dated January 1, 1977 "to establish, operate and maintain gambling casinos on land or
water within the territorial jurisdiction of the Philippines." Its operation was originally
conducted in the well known floating casino "Philippine Tourist." The operation was
considered a success for it proved to be a potential source of revenue to fund
infrastructure and socio-economic projects, thus, P.D. 1399 was passed on June 2, 1978
for PAGCOR to fully attain this objective.
Subsequently, on July 11, 1983, PAGCOR was created under P.D. 1869 to enable the
Government to regulate and centralize all games of chance authorized by existing
franchise or permitted by law, under the following declared policy
Sec. 1. Declaration of Policy. It is hereby declared to be the policy of the
State to centralize and integrate all games of chance not heretofore authorized
by existing franchises or permitted by law in order to attain the following
objectives:
(a) To centralize and integrate the right and authority to operate and conduct
games of chance into one corporate entity to be controlled, administered and
supervised by the Government.
(b) To establish and operate clubs and casinos, for amusement and recreation,
including sports gaming pools, (basketball, football, lotteries, etc.) and such
other forms of amusement and recreation including games of chance, which
may be allowed by law within the territorial jurisdiction of the Philippines and
which will: (1) generate sources of additional revenue to fund infrastructure
and socio-civic projects, such as flood control programs, beautification,
sewerage and sewage projects, Tulungan ng Bayan Centers, Nutritional
Programs, Population Control and such other essential public services; (2)
create recreation and integrated facilities which will expand and improve the
country's existing tourist attractions; and (3) minimize, if not totally eradicate,
all the evils, malpractices and corruptions that are normally prevalent on the

conduct and operation of gambling clubs and casinos without direct

government involvement. (Section 1, P.D. 1869)
To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines.
Under its Charter's repealing clause, all laws, decrees, executive orders, rules and
regulations, inconsistent therewith, are accordingly repealed, amended or modified.

. . . thoroughly established principle which must be followed in all cases where

questions of constitutionality as obtain in the instant cases are involved. All
presumptions are indulged in favor of constitutionality; one who attacks a
statute alleging unconstitutionality must prove its invalidity beyond a
reasonable doubt; that a law may work hardship does not render it
unconstitutional; that if any reasonable basis may be conceived which supports
the statute, it will be upheld and the challenger must negate all possible basis;
that the courts are not concerned with the wisdom, justice, policy or
expediency of a statute and that a liberal interpretation of the constitution in
favor of the constitutionality of legislation should be adopted. (Danner v. Hass,
194 N.W. 2nd 534, 539; Spurbeck v. Statton, 106 N.W. 2nd 660, 663; 59 SCRA
66; see also e.g. Salas v. Jarencio, 46 SCRA 734, 739 [1970]; Peralta v.
Commission on Elections, 82 SCRA 30, 55 [1978]; and Heirs of Ordona v. Reyes,
125 SCRA 220, 241-242 [1983] cited in Citizens Alliance for Consumer
Protection v. Energy Regulatory Board, 162 SCRA 521, 540)

It is reported that PAGCOR is the third largest source of government revenue, next to
the Bureau of Internal Revenue and the Bureau of Customs. In 1989 alone, PAGCOR
earned P3.43 Billion, and directly remitted to the National Government a total of P2.5
Billion in form of franchise tax, government's income share, the President's Social Fund
and Host Cities' share. In addition, PAGCOR sponsored other socio-cultural and
charitable projects on its own or in cooperation with various governmental agencies,
and other private associations and organizations. In its 3 1/2 years of operation under
the present administration, PAGCOR remitted to the government a total of P6.2 Billion.
As of December 31, 1989, PAGCOR was employing 4,494 employees in its nine (9)
casinos nationwide, directly supporting the livelihood of Four Thousand Four Hundred
Ninety-Four (4,494) families.

Of course, there is first, the procedural issue. The respondents are questioning the legal
personality of petitioners to file the instant petition.

But the petitioners, are questioning the validity of P.D. No. 1869. They allege that the
same is "null and void" for being "contrary to morals, public policy and public order,"
monopolistic and tends toward "crony economy", and is violative of the equal
protection clause and local autonomy as well as for running counter to the state policies
enunciated in Sections 11 (Personal Dignity and Human Rights), 12 (Family) and 13 (Role
of Youth) of Article II, Section 1 (Social Justice) of Article XIII and Section 2 (Educational
Values) of Article XIV of the 1987 Constitution.

Considering however the importance to the public of the case at bar, and in keeping
with the Court's duty, under the 1987 Constitution, to determine whether or not the
other branches of government have kept themselves within the limits of the
Constitution and the laws and that they have not abused the discretion given to them,
the Court has brushed aside technicalities of procedure and has taken cognizance of this
petition. (Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas Inc. v. Tan, 163
SCRA 371)

This challenge to P.D. No. 1869 deserves a searching and thorough scrutiny and the
most deliberate consideration by the Court, involving as it does the exercise of what has
been described as "the highest and most delicate function which belongs to the judicial
department of the government." (State v. Manuel, 20 N.C. 144; Lozano v. Martinez, 146
SCRA 323).

With particular regard to the requirement of proper party as applied in the

cases before us, We hold that the same is satisfied by the petitioners and
intervenors because each of them has sustained or is in danger of sustaining an
immediate injury as a result of the acts or measures complained of. And even
if, strictly speaking they are not covered by the definition, it is still within the
wide discretion of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional questions
raised.

As We enter upon the task of passing on the validity of an act of a co-equal and
coordinate branch of the government We need not be reminded of the time-honored
principle, deeply ingrained in our jurisprudence, that a statute is presumed to be valid.
Every presumption must be indulged in favor of its constitutionality. This is not to say
that We approach Our task with diffidence or timidity. Where it is clear that the
legislature or the executive for that matter, has over-stepped the limits of its authority
under the constitution, We should not hesitate to wield the axe and let it fall heavily, as
fall it must, on the offending statute (Lozano v. Martinez, supra).
In Victoriano v. Elizalde Rope Workers' Union, et al, 59 SCRA 54, the Court thru Mr.
Justice Zaldivar underscored the

In the first Emergency Powers Cases, ordinary citizens and taxpayers were
allowed to question the constitutionality of several executive orders issued by
President Quirino although they were involving only an indirect and general
interest shared in common with the public. The Court dismissed the objection
that they were not proper parties and ruled that "the transcendental
importance to the public of these cases demands that they be settled promptly
and definitely, brushing aside, if we must technicalities of procedure." We have
since then applied the exception in many other cases. (Association of Small
Landowners in the Philippines, Inc. v. Sec. of Agrarian Reform, 175 SCRA 343).

Having disposed of the procedural issue, We will now discuss the substantive issues
raised.
Gambling in all its forms, unless allowed by law, is generally prohibited. But the
prohibition of gambling does not mean that the Government cannot regulate it in the
exercise of its police power.
The concept of police power is well-established in this jurisdiction. It has been defined
as the "state authority to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare." (Edu v. Ericta, 35 SCRA 481, 487) As
defined, it consists of (1) an imposition or restraint upon liberty or property, (2) in order
to foster the common good. It is not capable of an exact definition but has been,
purposely, veiled in general terms to underscore its all-comprehensive embrace.
(Philippine Association of Service Exporters, Inc. v. Drilon, 163 SCRA 386).
Its scope, ever-expanding to meet the exigencies of the times, even to anticipate the
future where it could be done, provides enough room for an efficient and flexible
response to conditions and circumstances thus assuming the greatest benefits. (Edu v.
Ericta, supra)
It finds no specific Constitutional grant for the plain reason that it does not owe its
origin to the charter. Along with the taxing power and eminent domain, it is inborn in
the very fact of statehood and sovereignty. It is a fundamental attribute of government
that has enabled it to perform the most vital functions of governance. Marshall, to
whom the expression has been credited, refers to it succinctly as the plenary power of
the state "to govern its citizens". (Tribe, American Constitutional Law, 323, 1978). The
police power of the State is a power co-extensive with self-protection and is most aptly
termed the "law of overwhelming necessity." (Rubi v. Provincial Board of Mindoro, 39
Phil. 660, 708) It is "the most essential, insistent, and illimitable of powers." (Smith Bell
& Co. v. National, 40 Phil. 136) It is a dynamic force that enables the state to meet the
agencies of the winds of change.
What was the reason behind the enactment of P.D. 1869?
P.D. 1869 was enacted pursuant to the policy of the government to "regulate and
centralize thru an appropriate institution all games of chance authorized by existing
franchise or permitted by law" (1st whereas clause, PD 1869). As was subsequently
proved, regulating and centralizing gambling operations in one corporate entity the
PAGCOR, was beneficial not just to the Government but to society in general. It is a
reliable source of much needed revenue for the cash strapped Government. It provided
funds for social impact projects and subjected gambling to "close scrutiny, regulation,
supervision and control of the Government" (4th Whereas Clause, PD 1869). With the
creation of PAGCOR and the direct intervention of the Government, the evil practices
and corruptions that go with gambling will be minimized if not totally eradicated. Public
welfare, then, lies at the bottom of the enactment of PD 1896.

Petitioners contend that P.D. 1869 constitutes a waiver of the right of the City of Manila
to impose taxes and legal fees; that the exemption clause in P.D. 1869 is violative of the
principle of local autonomy. They must be referring to Section 13 par. (2) of P.D. 1869
which exempts PAGCOR, as the franchise holder from paying any "tax of any kind or
form, income or otherwise, as well as fees, charges or levies of whatever nature,
whether National or Local."
(2) Income and other taxes. a) Franchise Holder: No tax of any kind or form,
income or otherwise as well as fees, charges or levies of whatever nature,
whether National or Local, shall be assessed and collected under this franchise
from the Corporation; nor shall any form or tax or charge attach in any way to
the earnings of the Corporation, except a franchise tax of five (5%) percent of
the gross revenues or earnings derived by the Corporation from its operations
under this franchise. Such tax shall be due and payable quarterly to the
National Government and shall be in lieu of all kinds of taxes, levies, fees or
assessments of any kind, nature or description, levied, established or collected
by any municipal, provincial or national government authority (Section 13 [2]).
Their contention stated hereinabove is without merit for the following reasons:
(a) The City of Manila, being a mere Municipal corporation has no inherent right to
impose taxes (Icard v. City of Baguio, 83 Phil. 870; City of Iloilo v. Villanueva, 105 Phil.
337; Santos v. Municipality of Caloocan, 7 SCRA 643). Thus, "the Charter or statute must
plainly show an intent to confer that power or the municipality cannot assume it"
(Medina v. City of Baguio, 12 SCRA 62). Its "power to tax" therefore must always yield to
a legislative act which is superior having been passed upon by the state itself which has
the "inherent power to tax" (Bernas, the Revised [1973] Philippine Constitution, Vol. 1,
1983 ed. p. 445).
(b) The Charter of the City of Manila is subject to control by Congress. It should be
stressed that "municipal corporations are mere creatures of Congress" (Unson v. Lacson,
G.R. No. 7909, January 18, 1957) which has the power to "create and abolish municipal
corporations" due to its "general legislative powers" (Asuncion v. Yriantes, 28 Phil. 67;
Merdanillo v. Orandia, 5 SCRA 541). Congress, therefore, has the power of control over
Local governments (Hebron v. Reyes, G.R. No. 9124, July 2, 1950). And if Congress can
grant the City of Manila the power to tax certain matters, it can also provide for
exemptions or even take back the power.
(c) The City of Manila's power to impose license fees on gambling, has long been
revoked. As early as 1975, the power of local governments to regulate gambling thru the
grant of "franchise, licenses or permits" was withdrawn by P.D. No. 771 and was vested
exclusively on the National Government, thus:
Sec. 1. Any provision of law to the contrary notwithstanding, the authority of
chartered cities and other local governments to issue license, permit or other

form of franchise to operate, maintain and establish horse and dog race tracks,
jai-alai and other forms of gambling is hereby revoked.
Sec. 2. Hereafter, all permits or franchises to operate, maintain and establish,
horse and dog race tracks, jai-alai and other forms of gambling shall be issued
by the national government upon proper application and verification of the
qualification of the applicant . . .
Therefore, only the National Government has the power to issue "licenses or permits"
for the operation of gambling. Necessarily, the power to demand or collect license fees
which is a consequence of the issuance of "licenses or permits" is no longer vested in
the City of Manila.
(d) Local governments have no power to tax instrumentalities of the National
Government. PAGCOR is a government owned or controlled corporation with an original
charter, PD 1869. All of its shares of stocks are owned by the National Government. In
addition to its corporate powers (Sec. 3, Title II, PD 1869) it also exercises regulatory
powers thus:
Sec. 9. Regulatory Power. The Corporation shall maintain a Registry of the
affiliated entities, and shall exercise all the powers, authority and the
responsibilities vested in the Securities and Exchange Commission over such
affiliating entities mentioned under the preceding section, including, but not
limited to amendments of Articles of Incorporation and By-Laws, changes in
corporate term, structure, capitalization and other matters concerning the
operation of the affiliated entities, the provisions of the Corporation Code of
the Philippines to the contrary notwithstanding, except only with respect to
original incorporation.
PAGCOR has a dual role, to operate and to regulate gambling casinos. The latter role is
governmental, which places it in the category of an agency or instrumentality of the
Government. Being an instrumentality of the Government, PAGCOR should be and
actually is exempt from local taxes. Otherwise, its operation might be burdened,
impeded or subjected to control by a mere Local government.
The states have no power by taxation or otherwise, to retard, impede, burden
or in any manner control the operation of constitutional laws enacted by
Congress to carry into execution the powers vested in the federal government.
(MC Culloch v. Marland, 4 Wheat 316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local
governments.
Justice Holmes, speaking for the Supreme Court, made reference to the entire
absence of power on the part of the States to touch, in that way (taxation) at
least, the instrumentalities of the United States (Johnson v. Maryland, 254 US

51) and it can be agreed that no state or political subdivision can regulate a
federal instrumentality in such a way as to prevent it from consummating its
federal responsibilities, or even to seriously burden it in the accomplishment of
them. (Antieau, Modern Constitutional Law, Vol. 2, p. 140, emphasis supplied)
Otherwise, mere creatures of the State can defeat National policies thru extermination
of what local authorities may perceive to be undesirable activities or enterprise using
the power to tax as "a tool for regulation" (U.S. v. Sanchez, 340 US 42).
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc
Culloch v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation
of the very entity which has the inherent power to wield it.
(e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be
violated by P.D. 1869. This is a pointless argument. Article X of the 1987 Constitution (on
Local Autonomy) provides:
Sec. 5. Each local government unit shall have the power to create its own
source of revenue and to levy taxes, fees, and other charges subject to such
guidelines and limitation as the congress may provide, consistent with the basic
policy on local autonomy. Such taxes, fees and charges shall accrue exclusively
to the local government. (emphasis supplied)
The power of local government to "impose taxes and fees" is always subject to
"limitations" which Congress may provide by law. Since PD 1869 remains an "operative"
law until "amended, repealed or revoked" (Sec. 3, Art. XVIII, 1987 Constitution), its
"exemption clause" remains as an exception to the exercise of the power of local
governments to impose taxes and fees. It cannot therefore be violative but rather is
consistent with the principle of local autonomy.
Besides, the principle of local autonomy under the 1987 Constitution simply means
"decentralization" (III Records of the 1987 Constitutional Commission, pp. 435-436, as
cited in Bernas, The Constitution of the Republic of the Philippines, Vol. II, First Ed.,
1988, p. 374). It does not make local governments sovereign within the state or an
"imperium in imperio."
Local Government has been described as a political subdivision of a nation or
state which is constituted by law and has substantial control of local affairs. In a
unitary system of government, such as the government under the Philippine
Constitution, local governments can only be an intra sovereign subdivision of
one sovereign nation, it cannot be an imperium in imperio. Local government in
such a system can only mean a measure of decentralization of the function of
government. (emphasis supplied)
As to what state powers should be "decentralized" and what may be delegated to local
government units remains a matter of policy, which concerns wisdom. It is therefore a

political question. (Citizens Alliance for Consumer Protection v. Energy Regulatory

Board, 162 SCRA 539).
What is settled is that the matter of regulating, taxing or otherwise dealing with
gambling is a State concern and hence, it is the sole prerogative of the State to retain it
or delegate it to local governments.
As gambling is usually an offense against the State, legislative grant or express
charter power is generally necessary to empower the local corporation to deal
with the subject. . . . In the absence of express grant of power to
enact, ordinance provisions on this subject which are inconsistent with the state
laws are void. (Ligan v. Gadsden, Ala App. 107 So. 733 Ex-Parte Solomon, 9,
Cals. 440, 27 PAC 757 following in re Ah You, 88 Cal. 99, 25 PAC 974, 22 Am St.
Rep. 280, 11 LRA 480, as cited in Mc Quinllan Vol. 3 Ibid, p. 548, emphasis
supplied)
Petitioners next contend that P.D. 1869 violates the equal protection clause of the
Constitution, because "it legalized PAGCOR conducted gambling, while most
gambling are outlawed together with prostitution, drug trafficking and other vices" (p.
82, Rollo).
We, likewise, find no valid ground to sustain this contention. The petitioners' posture
ignores the well-accepted meaning of the clause "equal protection of the laws." The
clause does not preclude classification of individuals who may be accorded different
treatment under the law as long as the classification is not unreasonable or arbitrary
(Itchong v. Hernandez, 101 Phil. 1155). A law does not have to operate in equal force on
all persons or things to be conformable to Article III, Section 1 of the Constitution (DECS
v. San Diego, G.R. No. 89572, December 21, 1989).
The "equal protection clause" does not prohibit the Legislature from establishing classes
of individuals or objects upon which different rules shall operate (Laurel v. Misa, 43 O.G.
2847). The Constitution does not require situations which are different in fact or opinion
to be treated in law as though they were the same (Gomez v. Palomar, 25 SCRA 827).
Just how P.D. 1869 in legalizing gambling conducted by PAGCOR is violative of the equal
protection is not clearly explained in the petition. The mere fact that some gambling
activities like cockfighting (P.D 449) horse racing (R.A. 306 as amended by RA 983),
sweepstakes, lotteries and races (RA 1169 as amended by B.P. 42) are legalized under
certain conditions, while others are prohibited, does not render the applicable laws, P.D.
1869 for one, unconstitutional.
If the law presumably hits the evil where it is most felt, it is not to be
overthrown because there are other instances to which it might have been
applied. (Gomez v. Palomar, 25 SCRA 827)

The equal protection clause of the 14th Amendment does not mean that all
occupations called by the same name must be treated the same way; the state
may do what it can to prevent which is deemed as evil and stop short of those
cases in which harm to the few concerned is not less than the harm to the
public that would insure if the rule laid down were made mathematically exact.
(Dominican Hotel v. Arizona, 249 US 2651).
Anent petitioners' claim that PD 1869 is contrary to the "avowed trend of the Cory
Government away from monopolies and crony economy and toward free enterprise and
privatization" suffice it to state that this is not a ground for this Court to nullify P.D.
1869. If, indeed, PD 1869 runs counter to the government's policies then it is for the
Executive Department to recommend to Congress its repeal or amendment.
The judiciary does not settle policy issues. The Court can only declare what the
law is and not what the law should be.1wphi1 Under our system of
government, policy issues are within the domain of the political branches of
government and of the people themselves as the repository of all state power.
(Valmonte v. Belmonte, Jr., 170 SCRA 256).
On the issue of "monopoly," however, the Constitution provides that:
Sec. 19. The State shall regulate or prohibit monopolies when public interest so
requires. No combinations in restraint of trade or unfair competition shall be
allowed. (Art. XII, National Economy and Patrimony)
It should be noted that, as the provision is worded, monopolies are not necessarily
prohibited by the Constitution. The state must still decide whether public interest
demands that monopolies be regulated or prohibited. Again, this is a matter of policy for
the Legislature to decide.
On petitioners' allegation that P.D. 1869 violates Sections 11 (Personality Dignity) 12
(Family) and 13 (Role of Youth) of Article II; Section 13 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987 Constitution, suffice it to state
also that these are merely statements of principles and, policies. As such, they are
basically not self-executing, meaning a law should be passed by Congress to clearly
define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended to be selfexecuting principles ready for enforcement through the courts. They were
rather directives addressed to the executive and the legislature. If the
executive and the legislature failed to heed the directives of the articles the
available remedy was not judicial or political. The electorate could express their
displeasure with the failure of the executive and the legislature through the
language of the ballot. (Bernas, Vol. II, p. 2)

Every law has in its favor the presumption of constitutionality (Yu Cong Eng v. Trinidad,
47 Phil. 387; Salas v. Jarencio, 48 SCRA 734; Peralta v. Comelec, 82 SCRA 30; Abbas v.
Comelec, 179 SCRA 287). Therefore, for PD 1869 to be nullified, it must be shown that
there is a clear and unequivocal breach of the Constitution, not merely a doubtful and
equivocal one. In other words, the grounds for nullity must be clear and beyond
reasonable doubt. (Peralta v. Comelec, supra) Those who petition this Court to declare a
law, or parts thereof, unconstitutional must clearly establish the basis for such a
declaration. Otherwise, their petition must fail. Based on the grounds raised by
petitioners to challenge the constitutionality of P.D. 1869, the Court finds that
petitioners have failed to overcome the presumption. The dismissal of this petition is
therefore, inevitable. But as to whether P.D. 1869 remains a wise legislation considering
the issues of "morality, monopoly, trend to free enterprise, privatization as well as the
state principles on social justice, role of youth and educational values" being raised, is
up for Congress to determine.
As this Court held in Citizens' Alliance for Consumer Protection v. Energy Regulatory
Board, 162 SCRA 521
Presidential Decree No. 1956, as amended by Executive Order No. 137 has, in
any case, in its favor the presumption of validity and constitutionality which
petitioners Valmonte and the KMU have not overturned. Petitioners have not
undertaken to identify the provisions in the Constitution which they claim to
have been violated by that statute. This Court, however, is not compelled to
speculate and to imagine how the assailed legislation may possibly offend
some provision of the Constitution. The Court notes, further, in this respect
that petitioners have in the main put in question the wisdom, justice and
expediency of the establishment of the OPSF, issues which are not properly
addressed to this Court and which this Court may not constitutionally pass
upon. Those issues should be addressed rather to the political departments of
government: the President and the Congress.
Parenthetically, We wish to state that gambling is generally immoral, and this is
precisely so when the gambling resorted to is excessive. This excessiveness necessarily
depends not only on the financial resources of the gambler and his family but also on his
mental, social, and spiritual outlook on life. However, the mere fact that some persons
may have lost their material fortunes, mental control, physical health, or even their lives
does not necessarily mean that the same are directly attributable to gambling. Gambling
may have been the antecedent, but certainly not necessarily the cause. For the same
consequences could have been preceded by an overdose of food, drink, exercise, work,
and even sex.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Feliciano, Gancayco, Bidin, Sarmiento, GrioAquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

Resolution No. 60 was referred to respondent Commission on Audit (COA) for its
expected allowance in audit. Based on its preliminary findings, respondent COA
disapproved Resolution No. 60 and disallowed in audit the disbursement of finds for the
implementation thereof. (Rollo, Annex "D", P. 44)

EN BANC
G.R. No. 92389 September 11, 1991
HON. JEJOMAR C. BINAY and the MUNICIPALITY OF MAKATI, petitioners,
vs.
HON. EUFEMIO DOMINGO and the COMMISSION ON AUDIT, respondents.
Jejomar C. Binay for himself and for his co-petitioner.
Manuel D. Tamase and Rafael C. Marquez for respondents.
PARAS, J.:p
The only pivotal issue before Us is whether or not Resolution No. 60, re-enacted under
Resolution No. 243, of the Municipality of Makati is a valid exercise of police power
under the general welfare clause.
The pertinent facts are:
On September 27, 1988, petitioner Municipality, through its Council, approved
Resolution No. 60 which reads:
A RESOLUTION TO CONFIRM AND/OR RATIFY THE ONGOING BURIAL
ASSISTANCE PROGRAM INITIATED BY THE OFFICE OF THE MAYOR, OF
EXTENDING FINANCIAL ASSISTANCE OF FIVE HUNDRED PESOS
(P500.00) TO A BEREAVED FAMILY, FUNDS TO BE TAKEN OUT OF
UNAPPROPRIATED AVAILABLE FUNDS EXISTING IN THE MUNICIPAL
TREASURY. (Rollo, Annnex "A" p. 39)
Qualified beneficiaries, under the Burial Assistance Program, are bereaved families of
Makati whose gross family income does not exceed two thousand pesos (P2,000.00) a
month. The beneficiaries, upon fulfillment of other requirements, would receive the
amount of five hundred pesos (P500.00) cash relief from the Municipality of Makati.
(Reno, Annex "13", p. 41)
Metro Manila Commission approved Resolution No. 60. Thereafter, the municipal
secretary certified a disbursement fired of four hundred thousand pesos (P400,000.00)
for the implementation of the Burial Assistance Program. (Rollo, Annex "C", p. 43).

Two letters for reconsideration (Annexes "E" and "F", Rollo, pp. 45 and 48, respectively)
filed by petitioners Mayor Jejomar Binay, were denied by respondent in its Decision No.
1159, in the following manner:
Your request for reconsideration is predicated on the following
grounds, to wit:
1. Subject Resolution No. 60, s. 1988, of the Municipal Council of
Makati and the intended disbursements fall within the twin principles
of 'police power and parens patriae and
2. The Metropolitan Manila Commission (MMC), under a Certification,
dated June 5, 1989, has already appropriated the amount of
P400,000.00 to implement the Id resolution, and the only function of
COA on the matter is to allow the financial assistance in question.
The first contention is believed untenable. Suffice it to state that:
a statute or ordinance must have a real substantial,
or rational relation to the public safety, health,
morals, or general welfare to be sustained as a
legitimate exercise of the police power. The mere
assertion by the legislature that a statute relates to
the public health, safety, or welfare does not in itself
bring the statute within the police power of a state
for there must always be an obvious and real
connection between the actual provisions of a police
regulations and its avowed purpose, and the
regulation adopted must be reasonably adapted to
accomplish the end sought to be attained. 16 Am. Jur
2d, pp. 542-543; emphasis supplied).
Here, we see no perceptible connection or relation between the
objective sought to be attained under Resolution No. 60, s.
1988, supra, and the alleged public safety, general welfare, etc. of the
inhabitants of Makati.
Anent the second contention, let it be stressed that Resolution No. 60
is still subject to the limitation that the expenditure covered thereby
should be for a public purpose, i.e., that the disbursement of the
amount of P500.00 as burial assistance to a bereaved family of the

Municipality of Makati, or a total of P400,000.00 appropriated under

the Resolution, should be for the benefit of the whole, if not the
majority, of the inhabitants of the Municipality and not for the benefit
of only a few individuals as in the present case. On this point
government funds or property shall be spent or used solely for public
purposes. (Cf. Section 4[2], P.D. 1445). (pp. 50-51, Rollo)
Bent on pursuing the Burial Assistance Program the Municipality of Makati, through its
Council, passed Resolution No. 243, re-affirming Resolution No. 60 (Rollo, Annex "H", p.
52).
However, the Burial Assistance Program has been stayed by COA Decision No. 1159.
Petitioner, through its Mayor, was constrained to file this special civil action of certiorari
praying that COA Decision No. 1159 be set aside as null and void.
The police power is a governmental function, an inherent attribute of sovereignty,
which was born with civilized government. It is founded largely on the maxims, "Sic
utere tuo et ahenum non laedas and "Salus populi est suprema lex Its fundamental
purpose is securing the general welfare, comfort and convenience of the people.
Police power is inherent in the state but not in municipal corporations (Balacuit v. CFI of
Agusan del Norte, 163 SCRA 182). Before a municipal corporation may exercise such
power, there must be a valid delegation of such power by the legislature which is the
repository of the inherent powers of the State. A valid delegation of police power may
arise from express delegation, or be inferred from the mere fact of the creation of the
municipal corporation; and as a general rule, municipal corporations may exercise police
powers within the fair intent and purpose of their creation which are reasonably proper
to give effect to the powers expressly granted, and statutes conferring powers on public
corporations have been construed as empowering them to do the things essential to the
enjoyment of life and desirable for the safety of the people. (62 C.J.S., p. 277). The socalled inferred police powers of such corporations are as much delegated powers as are
those conferred in express terms, the inference of their delegation growing out of the
fact of the creation of the municipal corporation and the additional fact that the
corporation can only fully accomplish the objects of its creation by exercising such
powers. (Crawfordsville vs. Braden, 28 N.E. 849). Furthermore, municipal corporations,
as governmental agencies, must have such measures of the power as are necessary to
enable them to perform their governmental functions. The power is a continuing one,
founded on public necessity. (62 C.J.S. p. 273) Thus, not only does the State effectuate
its purposes through the exercise of the police power but the municipality does also.
(U.S. v. Salaveria, 39 Phil. 102).
Municipal governments exercise this power under the general welfare clause: pursuant
thereto they are clothed with authority to "enact such ordinances and issue such
regulations as may be necessary to carry out and discharge the responsibilities
conferred upon it by law, and such as shall be necessary and proper to provide for the
health, safety, comfort and convenience, maintain peace and order, improve public

morals, promote the prosperity and general welfare of the municipality and the
inhabitants thereof, and insure the protection of property therein." (Sections 91, 149,
177 and 208, BP 337). And under Section 7 of BP 337, "every local government unit shall
exercise the powers expressly granted, those necessarily implied therefrom, as well as
powers necessary and proper for governance such as to promote health and safety,
enhance prosperity, improve morals, and maintain peace and order in the local
government unit, and preserve the comfort and convenience of the inhabitants
therein."
Police power is the power to prescribe regulations to promote the health, morals,
peace, education, good order or safety and general welfare of the people. It is the most
essential, insistent, and illimitable of powers. In a sense it is the greatest and most
powerful attribute of the government. It is elastic and must be responsive to various
social conditions. (Sangalang, et al. vs. IAC, 176 SCRA 719). On it depends the security of
social order, the life and health of the citizen, the comfort of an existence in a thickly
populated community, the enjoyment of private and social life, and the beneficial use of
property, and it has been said to be the very foundation on which our social system
rests. (16 C.J.S., P. 896) However, it is not confined within narrow circumstances of
precedents resting on past conditions; it must follow the legal progress of a democratic
way of life. (Sangalang, et al. vs. IAC,supra).
In the case at bar, COA is of the position that there is "no perceptible connection or
relation between the objective sought to be attained under Resolution No. 60, s. 1988,
supra, and the alleged public safety, general welfare. etc. of the inhabitants of Makati."
(Rollo, Annex "G", p. 51).
Apparently, COA tries to re-define the scope of police power by circumscribing its
exercise to "public safety, general welfare, etc. of the inhabitants of Makati."
In the case of Sangalang vs. IAC, supra, We ruled that police power is not capable of an
exact definition but has been, purposely, veiled in general terms to underscore its all
comprehensiveness. Its scope, over-expanding to meet the exigencies of the times, even
to anticipate the future where it could be done, provides enough room for an efficient
and flexible response to conditions and circumstances thus assuring the greatest
benefits.
The police power of a municipal corporation is broad, and has been said to be
commensurate with, but not to exceed, the duty to provide for the real needs of the
people in their health, safety, comfort, and convenience as consistently as may be with
private rights. It extends to all the great public needs, and, in a broad sense includes all
legislation and almost every function of the municipal government. It covers a wide
scope of subjects, and, while it is especially occupied with whatever affects the peace,
security, health, morals, and general welfare of the community, it is not limited thereto,
but is broadened to deal with conditions which exists so as to bring out of them the
greatest welfare of the people by promoting public convenience or general prosperity,
and to everything worthwhile for the preservation of comfort of the inhabitants of the

corporation (62 C.J.S. Sec. 128). Thus, it is deemed inadvisable to attempt to frame any
definition which shall absolutely indicate the limits of police power.
COA's additional objection is based on its contention that "Resolution No. 60 is still
subject to the limitation that the expenditure covered thereby should be for a public
purpose, ... should be for the benefit of the whole, if not the majority, of the inhabitants
of the Municipality and not for the benefit of only a few individuals as in the present
case." (Rollo, Annex "G", p. 51).
COA is not attuned to the changing of the times. Public purpose is not unconstitutional
merely because it incidentally benefits a limited number of persons. As correctly pointed
out by the Office of the Solicitor General, "the drift is towards social welfare legislation
geared towards state policies to provide adequate social services (Section 9, Art. II,
Constitution), the promotion of the general welfare (Section 5, Ibid) social justice
(Section 10, Ibid) as well as human dignity and respect for human rights. (Section
11, Ibid." (Comment, p. 12)
The care for the poor is generally recognized as a public duty. The support for the poor
has long been an accepted exercise of police power in the promotion of the common
good.
There is no violation of the equal protection clause in classifying paupers as subject of
legislation. Paupers may be reasonably classified. Different groups may receive varying
treatment. Precious to the hearts of our legislators, down to our local councilors, is the
welfare of the paupers. Thus, statutes have been passed giving rights and benefits to the
disabled, emancipating the tenant-farmer from the bondage of the soil, housing the
urban poor, etc.
Resolution No. 60, re-enacted under Resolution No. 243, of the Municipality of Makati is
a paragon of the continuing program of our government towards social justice. The
Burial Assistance Program is a relief of pauperism, though not complete. The loss of a
member of a family is a painful experience, and it is more painful for the poor to be
financially burdened by such death. Resolution No. 60 vivifies the very words of the late
President Ramon Magsaysay 'those who have less in life, should have more in law." This
decision, however must not be taken as a precedent, or as an official go-signal for
municipal governments to embark on a philanthropic orgy of inordinate dole-outs for
motives political or otherwise.
PREMISES CONSIDERED, and with the afore-mentioned caveat, this petition is hereby
GRANTED and the Commission on Audit's Decision No. 1159 is hereby SET ASIDE.
SO ORDERED.
Fernan, C.J., Narvasa, Melencio-Herrera, Cruz, Padilla, Bidin, Sarmiento, Grio-Aquino,
Medialdea, Regalado and Davide, Jr., JJ., concur.

Gutierrez, Jr. and Feliciano, JJ., are on leave.

Republic of the Philippines

SUPREME COURT
Manila

Based on the above provision, petitioners sent notices of retirement to private

respondents who are all members of the defunct Philippine Constabulary and have
reached the age of fifty-six (56).

EN BANC

In response, private respondents filed a complaint on December 19, 1991 for

declaratory relief with prayer for the issuance of an ex parte restraining order and/or
injunction (docketed as Civil Case No. 91-3498) before the Regional Trial Court of
Makati, Branch 142. In their complaint, respondents aver that the age of retirement set
at fifty-six (56) by Section 39 of RA 6975 cannot be applied to them since they are also
covered by Sec. 89 thereof which provides:

G.R. No. 106724 February 9, 1994

THE NATIONAL POLICE COMMISSION, represented by its Acting Chairman, Cesar
Sarino, Teodolo C. Natividad, Vice-Chairman and Executive Officer, Brig. Gen. Virgilio
H. David, Edgar Dula Torre, Guillermo P. Enriquez, Commissioners, and Chief Supt.
Levy D. Macasiano Director for Personnel, petitioners,
vs.
Honorable Judge Salvador de Guzman, Jr., Chief Supt. Norberto M. Lina, Chief Supt.
Ricardo Trinidad, Jr., Sr. Supt. Manuel Suarez, Supt. Justito B. Tagum, Sr. Supt.
Tranquilino Aspiras, Sr., Supt. Ramon I. Navarro,
Sr. Supt. Ramon I. Navarro, Sr. Supt. Jose P. Suria, Sr. Supt. Agaton Abiera, Chief Insp.
Bienvenido Torres, and the National (ROTC) Alumni Association Inc. (NARRA),
represented by its President Col. Benjamin Gundran, and Director Hermogenes
Peralta, Jr., respondents.

Any provision hereof to the contrary notwithstanding, and within the

transition period of four (4) years following the effectivity of this Act,
the following members of the INP shall be considered compulsorily
retired:
a) Those who shall attain the age of sixty (60) on the first year of the
effectivity of this Act.
b) Those who shall attain the age of fifty-nine (59) on the second year
of the effectivity of this Act.

The Solicitor General for petitioners.

Renecio R. Espiritu for private respondents.
Diosdado P. Peralta for respondent-intervenor.

c) Those who shall attain the age of fifty-eight (58) on the third year of
the effectivity of this Act.
d) Those who shall attain the age of fifty-seven (57) on the fourth year
of the effectivity of this Act.

BIDIN, J.:
The case at bar had its origin in the implementation of the compulsory retirement of
PNP officers as mandated in Sec. 39, RA 6975, otherwise known as "An Act Establishing
the Philippine National Police Under a Reorganized Department of the Interior and Local
Government",
which
took
effect
on
January 2, 1991. Among others, RA 6975 provides for a uniform retirement system for
PNP members. Section 39 thereof reads:
Sec. 39. Compulsory Retirement. Compulsory retirement, for officer
and non-officer, shall be upon the attainment of age fifty-six
(56); Provided, That, in case of any officer with the rank of chief
superintendent, director or deputy director general, the Commission
may allow his retention in the service for an unextendible period of
one (1) year.

It is the submission of respondents that the term "INP" includes both the former
members of the Philippine Constabulary and the local police force who were earlier
constituted as the Integrated National Police (INP) by virtue of
PD 765 in 1975.
On the other hand, it is the belief of petitioners that the 4-year transition period
provided in Section 89 applies only to the local police forces who previously retire,
compulsorily, at age sixty (60) for those in the ranks of Police/Fire Lieutenant or higher
(Sec. 33, PD 1184); while the retirement age for the PC had already been set at fifty-six
(56) under the AFP law.
On December 23, 1991, respondent judge issued a restraining order followed by a writ
of injunction on January 8, 1992 upon posting of a P100,000.00 bond by private
respondents.

After the parties have submitted their respective pleadings, the case was submitted for
resolution and on August 14, 1992, the respondent judge rendered the assailed
decision, the decretal portion of which reads:
WHEREFORE, the court hereby declares that the term "INP" in Section
89 of the PNP Law includes all members of the present Philippine
National Police, irrespective of the original status of the present
members of the Philippine National Police before its creation and
establishment, and that Section 39 thereof shall become operative
after the lapse of the four-year transition period.
The preliminary injunction issued is made permanent.
SO ORDERED. (Rollo, pp. 29-30)
Petitioners filed the instant petition on October 8, 1992 seeking the reversal of the
above judgment. On January 12, 1993, the Court resolved to treat the respondents'
Comment as Answer and gave due course to the petition.
In ruling in favor of private respondents, respondent judge observed, among others,
that:
It may have been the intention of Congress to refer to the local police
forces as the "INP" but the PNP Law failed to define who or what
constituted the INP. The natural recourse of the court is to trace the
source of the "INP" as courts are permitted to look to prior laws on the
same subject and to investigate the antecedents involved. There is
nothing extant in the statute books except that which was created and
established
under
PD 765 pursuant to the mandate of Article XV of the 1973 Constitution
providing that the "State shall establish and maintain an integrated
national police force whose organization, administration and
operation shall be provided by law." Heretofore, INP was unknown.
And the said law categorically declared the PC "as the principal
component of the Integrated National Police" (Sec. 5, PD 765).
The court was supplied by respondents (petitioners herein) with
excerpts taken from the discussion amongst the members of Congress
concerning the particular provision of Section 89. The court is not
persuaded by said discussion; it was a simple matter for the members
of the legislature to state precisely in clear and unequivocal terms
their meaning, such as "integrated police" as used in PD 765. Instead,
they employed "INP", a generic term that includes the PC as the
principal component of the INP, supra. In failing to categorically
restrict the application of Section 89 as the members of legislature are
said to have intended, it gave rise to the presumption that it has not

limited nor intended to limit the meaning of the word when the bill
was finally passed into law. It is not difficult for the court to also
presume that in drafting the wording of the PNP Law, the legislators
were aware of the historical legislative origin of the "INP".
xxx xxx xxx
The court takes particular note of the fact that Section 89 is found in
the Transitory Provisions of the law which do not provide for any
distinction between the former PC officers and those belonging to the
civilian police forces. These provision are specifically enacted to
regulate the period covering the dissolution of the PC and the creation
of the PNP, a period that necessarily would be attended by imbalances
and or confusion occasioned by the wholesale and mass integration. In
fact, the retirement payment scheme of the INP is still to be
formulated, leaving the impression that nothing is really settled until
after the transition of four years has lapsed. Section 89 therefore
prevails over Section 39 up to the year 1995 when the retirement age
for the members of the PNP shall then be age 56; after the year 1995,
Section 39 shall then be the applicable law on retirement of PNP
members. (Rollo, pp. 27-28; emphasis supplied)
Petitioners disagree and claim that the use of the term INP in Sec. 89 does not imply the
same meaning contemplated under PD 765 wherein it is provided:
Sec. 1. Constitution of the Integrated National Police. There is
hereby established and constituted the Integrated National Police
(INP) which shall be composed of the Philippine Constabulary as the
nucleus, and the integrated police forces as established by Presidential
Decrees
Nos. 421, 482, 531, 585 and 641, as components, under the
Department of National Defense.
On the other hand, private respondents assert that being the nucleus of the Integrated
National Police (INP) under PD 765, former members of the Philippine Constabulary (PC)
should not be discriminated against from the coverage of the term "INP" in Sec. 89, RA
6975. Clearly, it is argued, the term "INP" found in Section 89 of RA 6975 refers to the
INP in PD 765. Thus, where the law does not distinguish, the courts should not
distinguish.
Does the law, RA 6975, distinguish INP from the PC? Petitioners submit that it does and
cite Sections 23 and 85 to stress the point, viz.:
Sec. 23. Composition. Subject to the limitations provided for in this
Act, the Philippine National Police, hereinafter referred to as the PNP,
is hereby established, initially consisting of the members of the police

forces who were integrated into the Integrated National Police (INP)
pursuant to Presidential Decree No. 765, and the officers and enlisted
personnel of the Philippine Constabulary (PC). . .
xxx xxx xxx
The permanent civilian employees of the present PC, INP, Narcotics
Command, CIS and the technical command of the AFP assigned with
the PC, including NAPOLCOM hearing officers holding regular items as
such, shall be absorbed by the Department as employees thereof,
subject to existing laws and regulations.
xxx xxx xxx
Sec. 85. Phase of Implementation. The implementation of this Act
shall be undertaken in three (3) phases, to wit:
Phase I Exercise of option by the uniformed members of the
Philippine Constabulary, the PC elements assigned with the Narcotics
Command, CIS, and the personnel of the technical services of the AFP
assigned with the PC to include the regular CIS investigating agents
and the operatives and agents of the NAPOLCOM Inspection,
Investigation and Intelligence Branch, and the personnel of the
absorbed National Action Committee on Anti-Hijacking (NACAH) of the
Department of National Defense, to be completed within six (6)
months from the date of the effectivity of this Act. At the end of this
phase, all personnel from the INP, PC, technical Services, NACAH, and
NAPOLCOM Inspection, Investigation and Intelligence Branch shall
have been covered by official orders assigning them to the PNP . . .

Sec. 86. Assumption by the PNP of Police Functions. The PNP shall
absorb the functions of the PC, the INP and the Narcotics Command
upon the effectivity of this Act.
From a careful perusal of the above provisions, it appears therefore that the use of the
term INP is not synonymous with the PC. Had it been otherwise, the statute could have
just made a uniform reference to the members of the whole Philippine National Police
(PNP) for retirement purposes and not just the INP. The law itself distinguishes INP from
the PC and it cannot be construed that "INP" as used in Sec. 89 includes the members of
the PC.
And contrary to the pronouncement of respondent judge that the law failed to define
who constitutes the INP, Sec. 90 of RA 6975 has in fact defined the same. Thus,
Sec. 90. Status of Present NAPOLCOM, PC-INP. Upon the effectivity
of this Act, the present National Police Commission and the Philippine
Constabulary-Integrated National Police shall cease to exist. The
Philippine Constabulary, which is the nucleus of the Philippine
Constabulary-Integrated National Police shall cease to be a major
service of the Armed Forces of the Philippines. The Integrated
National Police, which is the civilian component of the Philippine
Constabulary-Integrated National Police, shall cease to be the national
police force and lieu thereof, a new police force shall be established
and constituted pursuant to this Act. (emphasis supplied)
It is not altogether correct to state, therefore, that the legislature failed to define who
the members of the INP are. In this regard, it is of no moment that the legislature failed
to categorically restrict the application of the transition period in Sec. 89 specifically in
favor of the local police forces for it would be a mere superfluity as the PC component
of the INP was already retirable at age fifty-six (56).

xxx xxx xxx

. . . Any PC-INP officer or enlisted personnel may, within the twelvemonth period from the effectivity of this Act, retire . . .
Phase III . . . To accomplish the tasks of Phase III, the Commission
shall create a Board of Officers composed of the following:
NAPOLCOM Commissioner as Chairman and one (1) representative
each from the PC, INP, Civil Service Commission and the Department
of Budget and Management.
Section 86 of the same law further provides:

Having defined the meaning of INP, the trial court need not have belabored on the
supposed dubious meaning of the term. Nonetheless, if confronted with such a
situation, courts are not without recourse in determining the construction of the statute
with doubtful meaning for they may avail themselves of the actual proceedings of the
legislative body. In case of doubt as to what a provision of a statute means, the meaning
put to the provision during the legislative deliberations may be adopted (De Villa v.
Court
of
Appeals,
195 SCRA 722 [1991] citing Palanca v. City of Manila, 41 Phil. 125 [1920]; Arenas v. City
of San Carlos, 82 SCRA 318 [1978]).
Courts should not give a literal interpretation to the letter of the law if it runs counter to
the legislative intent (Yellow Taxi and Pasay Transportation Workers' Association v.
Manila Yellow Taxi Cab. Co., 80 Phil. 83 [1948]).

Examining the records of the Bicameral Conference Committee, we find that the
legislature did intent to exclude the members of the PC from the coverage of Sec. 89
insofar as the retirement age is concerned, thus:
THE CHAIRMAN. (SEN. MACEDA). Well, it seems what people really
want is one common rule, so if it is fifty-six, fifty-six; of course, the PC
wants sixty for everybody. Of course, it is not acceptable to us in the
sense that we tied this up really to the question of: If you are lax in
allowing their (the PC) entry into the PNP, then tighten up the
retirement. If we will be strict in, like requiring examinations and other
conditions for their original entry, then since we have sifted out a
certain amount of undesirables, then we can allow a longer retirement
age. That was the rationale, that was the tie-up. Since we are relaxing
the entry, we should speed up . . .
THE CHAIRMAN. (REP. GUTANG). Exit.
THE CHAIRMAN. (SEN. MACEDA) . . . the retirement, the exit.
THE CHAIRMAN. (REP. GUTANG). So let me get it very clear, Mr.
Chairman. Fifty-six, let's say, that will not make any adjustment in the
PC because there (they) are (retirable at age) fifty-six.
THE CHAIRMAN. (SEN. MACEDA). Kaya nga, wala na silang masasabi.
THE CHAIRMAN. (REP. GUTANG). In the case of the Police, since they
are retireable now at sixty, for the officers, it will be
applicable to them on a one-year every year basis for a total period of
four years transition. (Bicameral Conference Committee on National
Defense, March 12, 1990)
REP. GUTANG. On the first year of effectivity, the police will retire at
60 years.
THE CHAIRMAN. (SEN. MACEDA). Sixty.
REP. GUTANG. On the second year, 59.
THE CHAIRMAN. (SEN. MACEDA). Oo.
REP. GUTANG. On the third year, 58.
THE CHAIRMAN. (SEN. MACEDA). Fifty-eight. So 'yung 55, on the third
year, 58, doon siya re-retire.

REP. GUTANG. Oo.

SEN. SAGUISAG. So kung 55, when the law becomes effective . . .
THE CHAIRMAN. (SEN. MACEDA). He will retire at 58, doon siya aabot.
REP. UNICO. Pwede.
SEN. SAGUISAG. Dahil 'yon, may time to . . .
THE CHAIRMAN. (SEN. MACEDA). Walang problema dito sa transition
ng pulis, acceptable ito, eh.
THE CHAIRMAN. (REP. COJUANGCO). Sa PC?
THE CHAIRMAN. (SEN. MACEDA). PC, walang mawawala sa kanila, 56
ang retirement age nilang talaga, eh. Kaya ayaw ko
ngang dagdagan 'yung 56 nila at 'yon din ang sa Armed Forces, 56.
(Ibid., May 22, 1990)
In applying the provisions of Sec. 89 in favor of the local police force as established in PD
765,
the
Court
does
not,
in
any
manner,
give
any
undue preferential treatment in favor of the other group. On the contrary, the Court is
merely giving life to the real intent of the legislators based on the deliberations of the
Bicameral Conference Committee that preceded the enactment of RA 6975.
The legislative intent to classify the INP in such manner that Section 89 of RA 6975 is
applicable only to the local police force is clear. The question now is whether the
classification is valid. The test for this is reasonableness such that it must conform to the
following requirements: (1) It must be based upon substantial distinctions; (2) It must be
germane to the purpose of the law; (3) It must not be limited to existing conditions only;
(4) It must apply equally to all members of the same class (People vs. Cayat, 68 Phil. 12
[1939]).
The classification is based upon substantial distinctions. The PC, before the effectivity of
the law (RA 6975), were already retirable at age 56 while the local police force were
retirable
at
60,
and
governed
by
different
laws
(P.D. 1184, Sec. 33 and Sec. 50). The distinction is relevant for the purpose of the
statute, which is to enable the local police force to plan for their retirement which
would be earlier than usual because of the new law. Section 89 is merely transitory,
remedial in nature, and loses its force and effect once the four-year transitory period
has elapsed. Finally, it applies not only to some but to all local police officers.
It may be appropriate to state at this point that it seems absurd that a law will grant an
extension to PC officers' retirable age from 56 to 60 and then gradually lower it back to

56 without any cogent reason at all. Why should the retirement age of PC officers be
increased during the transitory period to the exclusion of other PC officers who would
retire at age 56 after such period? Such absurdity was never contemplated by the law
and would defeat its purpose of providing a uniform retirement age for PNP members.
WHEREFORE, the petition is GRANTED. The writ of injunction issued on January 8, 1992
is hereby LIFTED and the assailed decision of respondent judge is REVERSED and SET
ASIDE.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo,
Quiason, Puno, Vitug and Kapunan, JJ., concur.
Nocon, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 113811 October 7, 1994
ISHMAEL HIMAGAN, petitioner,
vs.
PEOPLE OF THE PHILIPPINES and HON. JUDGE HILARIO MAPAYO, RTC, Br. 11, Davao
City, respondents.
Victorio S. Advincula for petitioner.

We find the petition devoid of merit.

There is no question that the case of petitioner who is charged with murder and
attempted murder under the Revised Penal Code falls squarely under Sec. 47 of RA 6975
which specifically applies to members of the PNP. In dispute however, is whether the
provision limits the period of suspension to 90 days, considering that while the first
sentence of Sec. 47 provides that the accused who is charged with grave felonies where
the penalty imposed is six (6) years and one (1) day shall be suspended from office "until
the case is terminated", the second sentence of the same section mandates that the
case, which shall be subject to continuous trial, shall be terminated within 90 days from
the arraignment of the accused.
Petitioner posits that as a member of the Philippine National Police, under Sec. 91 of RA
6975 which reads:
Sec. 91. The Civil Service Law and its implementing rules and
regulations shall apply to all personnel of the Department.

KAPUNAN, J.:
Petitioner, a policeman assigned with the medical company of the Philippine National
Police Regional Headquarters at Camp Catitigan, Davao City, was implicated in the killing
of Benjamin Machitar, Jr. and the attempted murder of Bernabe Machitar. After the
1
2
informations for murder and attempted murder were filed with the Regional Trial
Court, Branch 11, Davao City, on September 16, 1992, the trial court issued an Order
suspending petitioner until the termination of the case on the basis of Section 47, R.A.
6975, otherwise known as Department of Interior and Local Government Act of 1990,
which provides:
Sec. 47. Preventive Suspension Pending Criminal Case. Upon the
filing of a complaint or information sufficient in form and substance
against a member of the PNP for grave felonies where the penalty
imposed by law is six (6) years and one (1) day or more, the court shall
immediately suspend the accused from office until the case is
terminated. Such case shall be subject to continuous trial and shall be
terminated within ninety (90) days from arraignment of the accused
(Emphasis ours).
On October 11, 1993, petitioner filed a motion to lift the order for his
3
suspension, relying on Section 42 of P.D. 807 of the Civil Service Decree, that his
suspension should be limited to ninety (90) days and, also, on our ruling in Deloso v.
4
5
Sandiganbayan, and Layno v. Sandiganbayan. In his order dated December 14,
6
1993 respondent judge denied the motion pointing out that under Section 47 of R.A.
6975, the accused shall be suspended from office until his case is terminated. The
7
motion for reconsideration of the order of denial was, likewise, denied. Hence, the
petition for certiorari andmandamus to set aside the orders of respondent Judge and to
command him to lift petitioner's preventive suspension.

he is covered by the Civil Service Law, particularly Sec. 42 of PD 807 of the Civil Service
Decree, which limits the maximum period of suspension to ninety (90) days, thus:
Sec. 42. Lifting of Preventive Suspension Pending Administrative
Investigation. When the administrative case against the officer or
employee under preventive suspension is not finally decided by the
disciplining authority within the period of ninety (90) days after the
date of suspension of the respondent who is not a presidential
appointee, the respondent shall be automatically reinstated in the
service; Provided, That when the delay in the disposition of the case is
due to the fault, negligence or petition of the respondent, the period
of delay shall not be counted in computing the period of suspension
herein provided.
He claims that an imposition of preventive suspension of over 90 days is contrary to the
Civil Service Law and would be a violation of his constitutional right to equal protection
of
laws.
He
further
asserts
that
the
requirements
in
Sec. 47 of R.A. 6975 that "the court shall immediately suspend the accused from office
until the case is terminated" and the succeeding sentence, "Such case shall be subject to
continuous trial and shall be terminated within ninety (90) days from arraignment of the
accused" are both substantive and should be taken together to mean that if the case is
not terminated within 90 days, the period of preventive suspension must be lifted
because of the command that the trial must be terminated within ninety (90) days from
arraignment.
We disagree.

First. The language of the first sentence of Sec. 47 of R.A. 6975 is clear, plain and free
from ambiguity. It gives no other meaning than that the suspension from office of the
member of the PNP charged with grave offense where the penalty is six years and one
day or more shall last until the termination of the case. The suspension cannot be lifted
before the termination of the case. The second sentence of the same Section providing
that the trial must be terminated within ninety (90) days from arraignment does not
qualify or limit the first sentence. The two can stand independently of each other. The
first refers to the period of suspension. The second deals with the time frame within
which the trial should be finished.
Suppose the trial is not terminated within ninety days from arraignment, should the
suspension of accused be lifted? The answer is certainly no. While the law uses the
mandatory word "shall" before the phrase "be terminated within ninety (90) days",
there is nothing in R.A. 6975 that suggests that the preventive suspension of the
accused will be lifted if the trial is not terminated within that period. Nonetheless, the
Judge who fails to decide the case within the period without justifiable reason may be
subject to administrative sanctions and, in appropriate cases where the facts so
8
9
warrant, to criminal or civil liability. If the trial is unreasonably delayed without fault
of the accused such that he is deprived of his right to a speedy trial, he is not without a
remedy. He may ask for the dismissal of the case. Should the court refuse to dismiss the
case, the accused can compel its dismissal by certiorari, prohibition ormandamus, or
10
secure his liberty by habeas corpus.
Second. Petitioner misapplies Sec. 42 of PD 807. A meticulous reading of the section
clearly shows that it refers to the lifting of preventive suspension in pending
administrative investigation, not in criminal cases, as here. What is more, Section 42
expressly limits the period of preventive suspension to ninety (90) days. Sec. 91 of R.A.
6975 which states that "The Civil Service Law and its implementing rules shall apply to
all personnel of the Department" simply means that the provisions of the Civil Service
Law and its implementing rules and regulations are applicable to members of the
Philippine National Police insofar as the provisions, rules and regulations are not
inconsistent
with
R.A. 6975. Certainly, Section 42 of the Civil Service Decree which limits the preventive
suspension to ninety (90) days cannot apply to members of the PNP because Sec. 47 of
R.A. 6995 provides differently, that is, the suspension where the penalty imposed by law
exceeds six (6) years shall continue until the case is terminated.
Third. Petitioner's reliance on Layno and Deloso is misplaced. These cases all stemmed
from charges in violation of R.A. 3019 (1060), otherwise known as the Anti-Graft and
Corrupt
Practices
Act
which,
unlike
R.A. 6975, is silent on the duration of the preventive suspension. Sec. 13 of R.A. 3019
reads as follows:
Suspension and loss of benefits. Any public officer against whom
any criminal prosecution under a valid information under this Act or
under the provisions of the Revised Penal Code on bribery is pending

in court, shall be suspended from office. Should he be convicted by

final judgment, he shall lose all retirement or gratuity benefits under
any law, but if he is acquitted, he shall be entitled to reinstatement
and to the salaries and benefits which he failed to receive during
suspension, unless in the meantime administrative proceedings have
been filed against him.
In the case of Layno, the duly elected mayor of Lianga, Surigao del Sur, was preventively
suspended after an information was filed against him for offenses under R.A. 3019
(1060), the Anti-Graft Corrupt Practices Act. He had been suspended for four (4) months
at the time he filed a motion to lift his preventive suspension. We held that his
indefinite preventive suspension violated the "equal protection clause" and shortened
his term of office. Thus:
2. Petitioner is a duly elected municipal mayor of Lianga, Surigao del
Sur. His term of office does not expire until 1986. Were it not for this
information and the suspension decreed by the Sandiganbayan
according to the Anti-Graft and Corrupt Practices Act, he would have
been all this while in the full discharge of his functions as such
municipal mayor. He was elected precisely to do so. As of October 26,
1983, he has been unable to. It is a basic assumption of the electoral
process implicit in the right of suffrage that the people are entitled to
the services of elective officials of their choice. For misfeasance or
malfeasance, any of them could, of course, be proceeded against
administratively or, as in this instance, criminally. In either case, his
culpability must be established. Moreover, if there be a criminal
action, he is entitled to the constitutional presumption of innocence. A
preventive suspension may be justified. Its continuance, however, for
an unreasonable length of time raises a due process question. For
even if thereafter he were acquitted, in the meanwhile his right to
hold office had been nullified. Clearly, there would be in such a case
an injustice suffered by him. Nor is he the only victim. There is
injustice inflicted likewise on the people of Lianga. They were deprived
of the services of the man they had elected to serve as mayor. In that
sense, to paraphrase Justice Cardozo, the protracted continuance of
this preventive suspension had outrun the bounds of reason and
resulted in sheer oppression. A denial of due process is thus quite
manifest. It is to avoid such an unconstitutional application that the
order of suspension should be lifted.
3. Nor is it solely the denial of procedural due process that is apparent.
There is likewise an equal protection question. If the case against
petitioner Layno were administrative in character the Local
Government Code would be applicable. It is therein clearly provided
that while preventive suspension is allowable for the causes therein
enumerated, there is this emphatic limitation on the duration thereof:

"In all cases, preventive suspension shall not extend beyond sixty days
after the start of said suspension." It may be recalled that the principle
against indefinite suspension applies equally to national government
officials. So it was held in the leading case of Garcia v. Hon. Executive
Secretary. According to the opinion of Justice Barrera: "To adopt the
theory of respondents that an officer appointed by the President,
facing administrative charges, can be preventively suspended
indefinitely, would be to countenance a situation where the
preventive suspension can, in effect, be the penalty itself without a
finding of guilt after due hearing, contrary to the express mandate of
the Constitution and the Civil Service law." Further: "In the guise of a
preventive suspension, his term of office could be shortened and he
could in effect, be removed without a finding of a cause duly
established after due hearing, in violation of the Constitution. Clearly
then, the policy of the law mandated by the Constitution frowns at a
suspension of indefinite duration. In this particular case, the mere fact
that petitioner is facing a charge under the Anti-Graft and Corrupt
Practices Act does not justify a different rule of law. To do so would be
11
to negate the safeguard of the equal protection guarantee.
The case of Deloso, likewise, involved another elective official who
was preventively suspended as provincial governor, also under RA 3019 the Anti-Graft
Law. This Court, faced with similar factual circumstances as in Layno, applied the ruling
in the latter case "in relation to the principles of due process and equal protection."
It is readily apparent that Section 13 of R.A. 3019 upon which the preventive suspension
of the accused in Laynoand Deloso was based is silent with respect to the duration of
the preventive suspension, such that the suspension of the accused therein for a
prolonged and unreasonable length of time raised a due process question. Not so in the
instant case. Petitioner is charged with murder under the Revised Penal Code and it is
undisputed that he falls squarely under Sec. 47 of R.A. 6975 which categorically states
that his suspension shall last until the case is terminated. The succeeding sentence of
the same section requires the case to be subjected to continuous trial which shall be
terminated within ninety (90) days from arraignment of the accused. As previously
emphasized, nowhere in the law does it say that after the lapse of the 90-day period for
trial, the preventive suspension should be lifted. The law is clear, the ninety (90) days
duration applies to the trial of the case not to the suspension. Nothing else should be
read into the law. When the words and phrases of the statute are clear and unequivocal,
their meaning determined from the language employed and the statute must be taken
12
to mean exactly what it says.
Fourth. From the deliberations of the Bicameral Conference Committee on National
Defense relative to the bill that became R.A. 6975, the meaning of Section 47 of R.A.
6975 insofar as the period of suspension is concerned becomes all the more clear. We
quote:

So other than that in that particular section, ano ba

itong "Jurisdiction in Criminal Cases?" What is this all
about?
REP. ZAMORA. In case they are charged with crimes.
THE CHAIRMAN (SEN. MACEDA). Ah, the previous
one is administrative, no. Now, if it is charged with a
crime, regular courts.
SEN. GONZALES. Ano, the courts mismo ang
magsasabing . . .
THE CHAIRMAN (SEN. MACEDA). No, the jurisdiction.
REP. ZAMORA. The jurisdiction if there is robbery.
THE CHAIRMAN (SEN. MACEDA). Okay. "Preventive
Suspension Pending Criminal Case. Upon the filing of
a complaint or informations sufficient in form and
substance against a member of the PNP for grave
felonies where the penalty imposed by law is six
years and one day or more, the court shall
immediately suspend the accused from the office
until the case is terminated."
REP. ALBANO. Where are we now Mr. Chairman.
THE CHAIRMAN (SEN. MACEDA). Grave felonies ito e.
Six years and one day or more.
SEN. SAGUISAG. Kung five years and litigation ng
Supreme Court, ganoon ba and . . .?
THE CHAIRMAN (SEN. MACEDA). Hindi, dahil iyong
iba panay disciplinary iyon e.
SEN. PIMENTEL. Anong page iyan, Rene?
THE CHAIRMAN (SEN. MACEDA). Page 29
Preventive Suspension.
REP. GUTANG. Ang complaint kasi ng mga tao,
pagka may pulis na may criminal case at may baril

pa rin at nag-uuniforme, hindi magandang tingnan

e. So parang natatakot iyong mga witnesses.

REP. ALBANO. One solution, Mr. Chairman.

SEN. GONZALES. Anyway, kung ma-exempt na rito

naman siya e.

THE CHAIRMAN (SEN. MACEDA). Criminal

case? Hindi ba that has all been held as directory
even if you put it in the law?

REP.
GUTANG.
Mayroong
reinstatement and pay. . . .

SEN. PIMENTEL. I know, but, iyon na nga, we are

looking at some solution to a particular situation.

entitlement

to

xxx xxx xxx

SEN. ANGARA. Let's have continuous hearing and be

terminated not later than ninety days.
SEN. PIMENTEL. Dito sa "Preventive Suspension
Pending Criminal Case." Okay ito but I think we
should also mandate the early termination of the
case. Ibig sabihin, okay, hindi ba "the suspension of
the accused from office until the case is
terminated?" Alam naman natin ang takbo ng mga
kaso rito sa ating bansa e.

REP. ZAMORA. Ang point ni Ernie, that's really only

the directory. All of these, well, looks exactly the
same thing.
SEN. ANGARA. No, but at least, we will shorten it up
in a case like this. We are really keen on having it
quick, swift.

REP. ZAMORA. Twenty days, okay na.

SEN. PIMENTEL. Swift justice.
SEN. PIMENTEL. Hindi, and ibig kong sabihin, let us
just assume that a case can be, as Rene pointed out,
can
run
to
six
years
bago
ma-terminate, sometimes ten years pa nga e. Okay,
but maybe we should mandate. . .

REP. ALBANO. Mr. Chairman.

THE CHAIRMAN. (SEN. MACEDA). Yes.

SEN. PIMENTEL. Not only that, but the case must be

terminated within a period.

REP. ALBANO. Following the Veloso case in Anti-graft

cases before the Sandiganbayan, the preventive
suspension is only ninety days. In no case shall it go
beyond ninety days which can also be applicable
here because this is a preventive suspension.

REP. ALBANO. Ninety days na ho sa Supreme Court

the trial.

SEN. PIMENTEL. No, because you can legislate at

least.

SEN. PIMENTEL. Ha?

SEN. SAGUISAG. But then the case may be anti-graft

ha. The case filed against a policeman may be antigraft in nature. . .

REP. ZAMORA. Continuous hearing.

REP. ALBANO. The trial must be done within ninety

days,
SEN. PIMENTEL. Ang ibig kong sabihin kung maari
sanang ilagay rito that the case shall also be
terminated in one year from the time . . . aywan ko
kung kaya nating gawin iyon.

SEN. PIMENTEL. Correct, correct, but is that a

constitutional provision? Is it?
REP. ALBANO. No, but as a standard procedure.
SEN. PIMENTEL. Then you can legislate.

THE CHAIRMAN (SEN. MACEDA). No, because this

particular provision is for criminal cases. I know antigraft is a criminal case but here we are talking, let's
say, of murder, rape, treason, robbery. That's why it
is in that context that there is a difference between a
purely anti-graft case and a criminal case which
could be a serious case since it is six years and one
day or more, so it must be already a grave felony.

The foregoing discussions reveal the legislative intent to place on preventive suspension
a member of the PNP charged with grave felonies where the penalty imposed by law
exceeds six years of imprisonment and which suspension continues until the case
against him is terminated.

REP. ALBANO. . . .

If a suspended policeman criminally charged with a serious offense is reinstated to his

post while his case is pending, his victim and the witnesses against him are obviously
exposed to constant threat and thus easily cowed to silence by the mere fact that the
accused is in uniform and armed. The imposition of preventive suspension for over 90
days
under
Section
47
of
R.A. 6975 does not violate the suspended policeman's constitutional right to equal
protection of the laws.

xxx xxx xxx

What I mean to say is, preventive suspension, we

can
use
the
Veloso case.
THE CHAIRMAN (SEN. MACEDA). No, that's too short,
that's what I am saying. The feeling here is, for
policeman, we have to be stricter especially if it is a
criminal case.
What Rene is just trying to say is, he is agreeable
that the suspension is until the case is terminated,
but he just wants some administrative balancing to
expedite it. So let us study what kind of language
could be done along that line. So just on the National
Police Commission . . .
SEN. ANGARA. Can I suggest a language that may
reflect. . .
THE CHAIRMAN (SEN. MACEDA). Okay, please.
SEN. ANGARA. "Such case shall be subject to
continuous trial and be terminated not later than . .
." whatever we agree.
THE CHAIRMAN (SEN. MACEDA). Okay, so let's study
that.
So if there are any further amendments to Chapter 2
13
on the National Police Commission. . . . . .

The reason why members of the PNP are treated differently from the other classes of
persons charged criminally or administratively insofar as the application of the rule on
preventive suspension is concerned is that policemen carry weapons and the badge of
the law which can be used to harass or intimidate witnesses against them, as succinctly
brought out in the legislative discussions.

The equal protection clause exists to prevent undue favor or privilege. It is intended to
eliminate discrimination and oppression based on inequality. Recognizing the existence
of real differences among men, the equal protection clause does not demand absolute
equality. It merely requires that all persons shall be treated alike, under like
circumstances and conditions both as to the privileges conferred and liabilities
14
enforced. Thus, the equal protection clause does not absolutely forbid classifications,
such as the one which exists in the instant case. If the classification is based on real and
15
16
substantial differences; is germane to the purpose of the law; applies to all
members
of
the
same
17
18
class; and applies to current as well as future conditions, the classification may not
be impugned as violating the Constitution's equal protection guarantee. A distinction
based on real and reasonable considerations related to a proper legislative purpose such
as that which exists here is neither unreasonable, capricious nor unfounded.
ACCORDINGLY, the petition is hereby DISMISSED.
SO ORDERED.
Narvasa, C.J., Cruz, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Quiason, Puno, Vitug
and Mendoza, JJ., concur.
Feliciano, Padilla and Bidin, JJ., are on leave.

Republic of the Philippines

SUPREME COURT
Manila

Section 1. Objectives. This Act provides for and shall govern

(a) the standardization and regulation of medical education (b) the examination
for registration of physicians; and (c) the supervision, control and regulation of
the practice of medicine in the Philippines. (Underscoring supplied)

EN BANC
G.R. No. 78164

July 31, 1987

TERESITA TABLARIN, MA, LUZ CIRIACO, MA NIMFA B. ROVIRA, EVANGELINA S. LABAO,

in their behalf and in behalf of applicants for admission into the Medical Colleges
during the school year 1987-88 and future years who have not taken or successfully
hurdled tile National Medical Admission Test (NMAT).petitioners,
vs.
THE HONORABLE JUDGE ANGELINA S. GUTIERREZ, Presiding Judge of Branch XXXVII of
the Regional Trial Court of the National Capital Judicial Region with seat at Manila,
THE HONORABLE SECRETARY LOURDES QUISUMBING, in her capacity as Chairman of
the BOARD OF MEDICAL EDUCATION, and THE CENTER FOR EDUCATIONAL
MEASUREMENT (CEM), respondents.
FELICIANO, J.:
The petitioners sought admission into colleges or schools of medicine for the school
year 1987-1988. However, the petitioners either did not take or did not successfully
take the National Medical Admission Test (NMAT) required by the Board of Medical
Education, one of the public respondents, and administered by the private respondent,
the Center for Educational Measurement (CEM).
On 5 March 1987, the petitioners filed with the Regional Trial Court, National Capital
Judicial Region, a Petition for Declaratory Judgment and Prohibition with a prayer for
Temporary Restraining Order and Preliminary Injunction. The petitioners sought to
enjoin the Secretary of Education, Culture and Sports, the Board of Medical Education
and the Center for Educational Measurement from enforcing Section 5 (a) and (f) of
Republic Act No. 2382, as amended, and MECS Order No. 52, series of 1985, dated 23
August 1985 and from requiring the taking and passing of the NMAT as a condition for
securing certificates of eligibility for admission, from proceeding with accepting
applications for taking the NMAT and from administering the NMAT as scheduled on 26
April 1987 and in the future. After hearing on the petition for issuance of preliminary
injunction, the trial court denied said petition on 20 April 1987. The NMAT was
conducted and administered as previously scheduled.
Petitioners accordingly filed this Special Civil Action for certiorari with this Court to set
aside the Order of the respondent judge denying the petition for issuance of a writ of
preliminary injunction.
Republic Act 2382, as amended by Republic Acts Nos. 4224 and 5946, known as the
"Medical Act of 1959" defines its basic objectives in the following manner:

The statute, among other things, created a Board of Medical Education which is
composed of (a) the Secretary of Education, Culture and Sports or his duly authorized
representative, as Chairman; (b) the Secretary of Health or his duly authorized
representative; (c) the Director of Higher Education or his duly authorized
representative; (d) the Chairman of the Medical Board or his duly authorized
representative; (e) a representative of the Philippine Medical Association; (f) the Dean
of the College of Medicine, University of the Philippines; (g) a representative of the
Council of Deans of Philippine Medical Schools; and (h) a representative of the
Association of Philippine Medical Colleges, as members. The functions of the Board of
Medical Education specified in Section 5 of the statute include the following:
(a) To determine and prescribe equirements for admission into a recognized
college of medicine;
(b) To determine and prescribe requirements for minimum physical facilities of
colleges of medicine, to wit: buildings, including hospitals, equipment and
supplies, apparatus, instruments, appliances, laboratories, bed capacity for
instruction purposes, operating and delivery rooms, facilities for outpatient
services, and others, used for didactic and practical instruction in accordance
with modern trends;
(c) To determine and prescribe the minimum number and minimum
qualifications of teaching personnel, including student-teachers ratio;
(d) To determine and prescribe the minimum required curriculum leading to
the degree of Doctor of Medicine;
(e) To authorize the implementation of experimental medical curriculum in a
medical school that has exceptional faculty and instrumental facilities. Such an
experimental curriculum may prescribe admission and graduation
requirements other than those prescribed in this Act; Provided, That only
exceptional students shall be enrolled in the experimental curriculum;
(f) To accept applications for certification for admission to a medical school and
keep a register of those issued said certificate; and to collect from said
applicants the amount of twenty-five pesos each which shall accrue to the
operating fund of the Board of Medical Education;
(g) To select, determine and approve hospitals or some departments of the
hospitals for training which comply with the minimum specific physical facilities
as provided in subparagraph (b) hereof; and

(h) To promulgate and prescribe and enforce the necessary rules and
regulations for the proper implementation of the foregoing functions.
(Emphasis supplied)

Pursuant to MECS Order No. 52, s. 1985, the private respondent Center conducted
NMATs for entrance to medical colleges during the school year 1986-1987. In December
1986 and in April 1987, respondent Center conducted the NMATs for admission to
medical colleges during the school year 1987.1988.1avvphi1

Section 7 prescribes certain minimum requirements for applicants to medical schools:

Admission requirements. The medical college may admit any student who
has not been convicted by any court of competent jurisdiction of any offense
involving moral turpitude and who presents (a) a record of completion of a
bachelor's degree in science or arts; (b) a certificate of eligibility for entrance to
a medical school from the Board of Medical Education; (c) a certificate of good
moral character issued by two former professors in the college of liberal arts;
and (d) birth certificate. Nothing in this act shall be construed to inhibit any
college of medicine from establishing, in addition to the preceding, other
entrance requirements that may be deemed admissible.
xxx

xxx

x x x (Emphasis supplied)

MECS Order No. 52, s. 1985, issued by the then Minister of Education, Culture and
Sports and dated 23 August 1985, established a uniform admission test called the
National Medical Admission Test (NMAT) as an additional requirement for issuance of a
certificate of eligibility for admission into medical schools of the Philippines, beginning
with the school year 1986-1987. This Order goes on to state that:

Petitioners raise the question of whether or not a writ of preliminary injunction may be
issued to enjoin the enforcement of Section 5 (a) and (f) of Republic Act No. 2382, as
amended, and MECS Order No. 52, s. 1985, pending resolution of the issue of
constitutionality of the assailed statute and administrative order. We regard this issue as
entirely peripheral in nature. It scarcely needs documentation that a court would issue a
writ of preliminary injunction only when the petitioner assailing a statute or
administrative order has made out a case of unconstitutionality strong enough to
overcome, in the mind of the judge, the presumption of constitutionality, aside from
showing a clear legal right to the remedy sought. The fundamental issue is of course the
constitutionality of the statute or order assailed.
1. The petitioners invoke a number of provisions of the 1987 Constitution which are, in
their assertion, violated by the continued implementation of Section 5 (a) and (f) of
Republic Act 2381, as amended, and MECS Order No. 52, s. 1985. The provisions invoked
read as follows:
(a) Article 11, Section 11: "The state values the dignity of every human person
and guarantees full respect of human rights. "

2. The NMAT, an aptitude test, is considered as an instrument toward

upgrading the selection of applicants for admission into the medical schools and
its calculated to improve the quality of medical education in the country. The
cutoff score for the successful applicants, based on the scores on the NMAT,
shall be determined every year by the Board of Medical Education after
consultation with the Association of Philippine Medical Colleges. The NMAT
rating of each applicant, together with the other admission requirements as
presently called for under existing rules, shall serve as a basis for the issuance of
the prescribed certificate of elegibility for admission into the medical colleges.

(b) ArticleII, Section l3: "The State recognizes the vital role of the youth in
nation building and shall promote and protect their physical, moral, spiritual,
intellectual and social well being. It shall inculcate in the youth patriotism and
nationalism, and encourage their involvement in public and civic affairs."

3. Subject to the prior approval of the Board of Medical Education, each

medical college may give other tests for applicants who have been issued a
corresponding certificate of eligibility for admission that will yield information
on other aspects of the applicant's personality to complement the information
derived from the NMAT.

(d) Article XIV, Section l: "The State shall protect and promote the right of all
citizens to quality education at all levels and take appropriate steps to make
such education accessible to all. "

xxx

xxx

xxx

8. No applicant shall be issued the requisite Certificate of Eligibility for

Admission (CEA), or admitted for enrollment as first year student in any medical
college, beginning the school year, 1986-87, without the required NMAT
qualification as called for under this Order. (Underscoring supplied)

(c) Article II, Section 17: "The State shall give priority to education, science and
technology, arts, culture and sports to foster patriotism and nationalism,
accelerate social progress and to promote total human liberation and
development. "

(e) Article XIV, Section 5 (3): "Every citizen has a right to select a profession or
course of study, subject to fair, reasonable and equitable admission and
academic requirements."
Article II of the 1987 Constitution sets forth in its second half certain "State policies"
which the government is enjoined to pursue and promote. The petitioners here have
not seriously undertaken to demonstrate to what extent or in what manner the statute
and the administrative order they assail collide with the State policies embodied in

Sections 11, 13 and 17. They have not, in other words, discharged the burden of proof
which lies upon them. This burden is heavy enough where the constitutional provision
invoked is relatively specific, rather than abstract, in character and cast in behavioral or
operational terms. That burden of proof becomes of necessity heavier where the
constitutional provision invoked is cast, as the second portion of Article II is cast, in
language descriptive of basic policies, or more precisely, of basic objectives of State
policy and therefore highly generalized in tenor. The petitioners have not made their
case, even a prima facie case, and we are not compelled to speculate and to imagine
how the legislation and regulation impugned as unconstitutional could possibly offend
the constitutional provisions pointed to by the petitioners.
Turning to Article XIV, Section 1, of the 1987 Constitution, we note that once more
petitioners have failed to demonstrate that the statute and regulation they assail in fact
clash with that provision. On the contrary we may note-in anticipation of
discussion infra that the statute and the regulation which petitioners attack are in
fact designed to promote "quality education" at the level of professional schools. When
one reads Section 1 in relation to Section 5 (3) of Article XIV as one must one cannot but
note that the latter phrase of Section 1 is not to be read with absolute literalness. The
State is not really enjoined to take appropriate steps to make quality education "
accessible to all who might for any number of reasons wish to enroll in a professional
school but rather merely to make such education accessible to all who qualify under
"fair, reasonable and equitable admission and academic requirements. "
2. In the trial court, petitioners had made the argument that Section 5 (a) and (f) of
Republic Act No. 2382, as amended, offend against the constitutional principle which
forbids the undue delegation of legislative power, by failing to establish the necessary
standard to be followed by the delegate, the Board of Medical Education. The general
principle of non-delegation of legislative power, which both flows from the reinforces
the more fundamental rule of the separation and allocation of powers among the three
1
great departments of government, must be applied with circumspection in respect of
statutes which like the Medical Act of 1959, deal with subjects as obviously complex and
technical as medical education and the practice of medicine in our present day world.
Mr. Justice Laurel stressed this point 47 years ago in Pangasinan Transportation Co., Inc.
2
vs. The Public Service Commission:
One thing, however, is apparent in the development of the principle of
separation of powers and that is that the maxim of delegatus non potest
delegare or delegate potestas non potest delegare, adopted this practice
(Delegibus et Consuetudiniis Anglia edited by G.E. Woodbine, Yale University
Press, 1922, Vol. 2, p. 167) but which is also recognized in principle in the
Roman Law (d. 17.18.3) has been made to adapt itself to the complexities of
modern government, giving rise to the adoption, within certain limits of the
principle of "subordinate legislation," not only in the United States and England
but in practically all modern governments. (People vs. Rosenthal and Osmena
[68 Phil. 318, 1939]. Accordingly, with the growing complexity of modern life,
the multiplication of the subjects of governmental regulation and the increased

difficulty of administering the laws, there is a constantly growing

tendency toward the delegation of greater power by the legislature, and
3
toward the approval of the practice by the courts."
The standards set for subordinate legislation in the exercise of rule making authority by
an administrative agency like the Board of Medical Education are necessarily broad and
4
highly abstract. As explained by then Mr. Justice Fernando in Edu v. Ericta
The standard may be either expressed or implied. If the former, the nondelegation objection is easily met.The standard though does not have to be
spelled out specifically. It could be implied from the policy and purpose of the
act considered as a whole. In the Reflector Law, clearly the legislative objective
is public safety. What is sought to be attained as in Calalang v. Williams is "safe
5
transit upon the roads.
We believe and so hold that the necessary standards are set forth in Section 1 of the
1959 Medical Act: "the standardization and regulation of medical education" and in
Section 5 (a) and 7 of the same Act, the body of the statute itself, and that these
considered together are sufficient compliance with the requirements of the nondelegation principle.
3. The petitioners also urge that the NMAT prescribed in MECS Order No. 52, s. 1985, is
an "unfair, unreasonable and inequitable requirement," which results in a denial of due
process. Again, petitioners have failed to specify just what factors or features of the
NMAT render it "unfair" and "unreasonable" or "inequitable." They appear to suggest
that passing the NMAT is an unnecessary requirement when added on top of the
admission requirements set out in Section 7 of the Medical Act of 1959, and other
admission requirements established by internal regulations of the various medical
schools, public or private. Petitioners arguments thus appear to relate to utility and
wisdom or desirability of the NMAT requirement. But constitutionality is essentially a
question of power or authority: this Court has neither commission or competence to
pass upon questions of the desirability or wisdom or utility of legislation or
administrative regulation. Those questions must be address to the political departments
of the government not to the courts.
There is another reason why the petitioners' arguments must fail: the legislative and
administrative provisions impugned by them constitute, to the mind of the Court, a valid
exercise of the police power of the state. The police power, it is commonplace learning,
is the pervasive and non-waivable power and authority of the sovereign to secure and
promote an the important interests and needs in a word, the public order of the
6
general community. An important component of that public order is the health and
physical safety and well being of the population, the securing of which no one can deny
7
is a legitimate objective of governmental effort and regulation.
Perhaps the only issue that needs some consideration is whether there is some
reasonable relation between the prescribing of passing the NMAT as a condition for

admission to medical school on the one hand, and the securing of the health and safety
of the general community, on the other hand. This question is perhaps most usefully
approached by recalling that the regulation of the practice of medicine in all its branches
has long been recognized as a reasonable method of protecting the health and safety of
8
the public. That the power to regulate and control the practice of medicine includes the
power to regulate admission to the ranks of those authorized to practice medicine, is
also well recognized. thus, legislation and administrative regulations requiring those
who wish to practice medicine first to take and pass medical board examinations have
9
long ago been recognized as valid exercises of governmental power. Similarly, the
establishment of minimum medical educational requirements i.e., the completion of
prescribed courses in a recognized medical school for admission to the medical
profession, has also been sustained as a legitimate exercise of the regulatory authority
10
of the state. What we have before us in the instant case is closely related: the
regulation of access to medical schools. MECS Order No. 52, s. 1985, as noted earlier,
articulates the rationale of regulation of this type: the improvement of the professional
and technical quality of the graduates of medical schools, by upgrading the quality of
those admitted to the student body of the medical schools. That upgrading is sought by
selectivity in the process of admission, selectivity consisting, among other things, of
limiting admission to those who exhibit in the required degree the aptitude for medical
studies and eventually for medical practice. The need to maintain, and the difficulties of
maintaining, high standards in our professional schools in general, and medical schools
in particular, in the current stage of our social and economic development, are widely
known.

infringes the requirements of equal protection. They assert, in other words, that
students seeking admission during a given school year, e.g., 1987-1988, when subjected
to a different cutoff score than that established for an, e.g., earlier school year, are
discriminated against and that this renders the MECS Order "arbitrary and capricious."
The force of this argument is more apparent than real. Different cutoff scores for
different school years may be dictated by differing conditions obtaining during those
years. Thus, the appropriate cutoff score for a given year may be a function of such
factors as the number of students who have reached the cutoff score established the
preceding year; the number of places available in medical schools during the current
year; the average score attained during the current year; the level of difficulty of the
test given during the current year, and so forth. To establish a permanent and
immutable cutoff score regardless of changes in circumstances from year to year, may
wen result in an unreasonable rigidity. The above language in MECS Order No. 52, far
from being arbitrary or capricious, leaves the Board of Medical Education with the
measure of flexibility needed to meet circumstances as they change.

We believe that the government is entitled to prescribe an admission test like the NMAT
as a means for achieving its stated objective of "upgrading the selection of applicants
into [our] medical schools" and of "improv[ing] the quality of medical education in the
country." Given the widespread use today of such admission tests in, for instance,
medical schools in the United States of America (the Medical College Admission Test
11
[MCAT] and quite probably in other countries with far more developed educational
resources than our own, and taking into account the failure or inability of the petitioners
to even attempt to prove otherwise, we are entitled to hold that the NMAT is
reasonably related to the securing of the ultimate end of legislation and regulation in
this area. That end, it is useful to recall, is the protection of the public from the
potentially deadly effects of incompetence and ignorance in those who would
undertake to treat our bodies and minds for disease or trauma.

SO ORDERED.

4. Petitioners have contended, finally, that MECS Order No. 52, s. 1985, is in conflict
with the equal protection clause of the Constitution. More specifically, petitioners assert
that that portion of the MECS Order which provides that
the cutoff score for the successful applicants, based on the scores on the
NMAT, shall be determined every-year by the Board of Medical 11 Education
after consultation with the Association of Philippine Medical Colleges.
(Emphasis supplied)

We conclude that prescribing the NMAT and requiring certain minimum scores therein
as a condition for admission to medical schools in the Philippines, do not constitute an
unconstitutional imposition.
WHEREFORE, the Petition for certiorari is DISMISSED and the Order of the respondent
trial court denying the petition for a writ of preliminary injunction is AFFIRMED. Costs
against petitioners.

Teehankee, C.J., Yap, Fernan, Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras,
Gancayco, Padilla, Bidin, Sarmiento and Cortes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila

The order dated 28 march 1994 was in turn issued upon motion by ADC for execution of
a final judgment rendered on 9 September 1988 which ordered the Manila Mayor to
immediately issue to ADC the permit/licenseto operate the jai-alai in Manila, under
Manila Ordinance No. 7065.

EN BANC
G.R. No. 115044 January 27, 1995
HON. ALFREDO S. LIM, in his capacity as Mayor of Manila, and the City of
Manila, petitioners,
vs.
HON. FELIPE G. PACQUING, as Judge, branch 40, Regional Trial Court of Manila and
ASSOCIATED CORPORATION, respondents.
G.R. No. 117263 January 27, 1995
TEOFISTO GUINGONA, JR. and DOMINADOR R. CEPEDA, petitioners,
vs.
HON. VETINO REYES and ASSOCIATED DEVELOPMENT CORPORATION, respondents.
PADILLA, J.:
These two (2) cases which are inter-related actually involve simple issues. if these issues
have apparently become complicated, it is not by reason of their nature because of the
events and dramatis personae involved.
The petition in G.R. No. 115044 was dismissed by the First Division of this Court on 01
September 1994 based on a finding that there was "no abuse of discretion, much less
lack of or excess of jurisdiction, on the part of respondent judge [Pacquing]", in issuing
the questioned orders. Judge Pacquing had earlier issued in Civil Case No. 88-45660, RTC
of Manila, Branch 40, the following orders which were assailed by the Mayor of the City
of Manila, Hon. Alfredo S. Lim, in said G.R. No. 115044:
a. order dated 28 March 1994 directing Manila mayor Alfredo S. Lim to
issue the permit/license to operate the jai-alai in favor of Associated
Development Corporation (ADC).
b. order dated 11 April 1994 directing mayor Lim to explain why he
should not be cited for contempt for non-compliance with the order
dated 28 March 1994.
c. order dated 20 April 1994 reiterating the previous order directing
Mayor Lim to immediately issue the permit/license to Associated
Development Corporation (ADC).

On 13 September 1994, petitioner Guingona (as executive secretary) issued a directive

to then chairman of the Games and Amusements Board (GAB) Francisco R. Sumulong, jr.
to hold in abeyance the grant of authority, or if any had been issued, to withdraw such
grant of authority, to Associated Development Corporation to operate the jai-alai in the
City of Manila, until the following legal questions are properly resolved:
1. Whether P.D. 771 which revoked all existing Jai-Alai franchisers
issued by local governments as of 20 August 1975 is unconstitutional.
2. Assuming that the City of Manila had the power on 7 September
1971 to issue a Jai-Alai franchise to Associated Development
Corporation, whether the franchise granted is valied considering that
the franchise has no duration, and appears to be granted in
perpetuity.
3. Whether the City of Manila had the power to issue a Jai-Alai
franchise to Associated Development Corporation on 7 September
1971 in view of executive Order No. 392 dated 1 January 1951 which
transferred from local governments to the Games and Amusements
1
Board the power to regulate Jai-Alai.
On 15 September 1994, respondent Associated Development Corporation (ADC) filed a
petition for prohibition,mandamus, injunction and damages with prayer for temporary
restraining order and/or writ of preliminary injunction in the Regional Trial Court of
Manila against petitioner Guingona and then GAB chairman Sumulong, docketed as Civil
Case No. 94-71656, seeking to prevent GAB from withdrawing the provisional authority
that had earlier been granted to ADC. On the same day, the RTC of Manila, Branch 4,
through presiding Judge Vetino Reyes, issued a temporary restraining order enjoining
the GAB from withdrawing ADC's provisional authority. This temporary restraining order
was converted into a writ of preliminary injunction upon ADC's posting of a bond in the
2
amount of P2,000,000.00.
Subsequently, also in G.R. No. 115044, the Republic of the Philippines, through the
Games and Amusements Board, filed a "Motion for Intervention; for Leave to File a
Motion for reconsideration in Intervention; and to Refer the case to the Court En Banc"
and later a "Motion for Leave to File Supplemental Motion for Reconsideration-inIntervention and to Admit Attached Supplemental Motion for Reconsideration-inIntervention".

In an En Banc Resolution dated 20 September 1994, this Court referred G.R. No. 115044
to the Court En Bancand required the respondents therein to comment on the
aforementioned motions.
Meanwhile, Judge Reyes on 19 October 1994 issued another order, this time, granting
ADC a writ of preliminarymandatory injunction against Guingona and GAB to compel
them to issue in favor of ADC the authority to operate jai-alai.
Guingona, as executive secretary, and Dominador Cepeda, Jr. as the new GAB chairman,
then filed the petition in G.R. No. 117263 assailing the abovementioned orders of
respondent Judge Vetino Reyes.
On 25 October 1994, in G.R. No. 117263, this Court granted petitioner's motion
for leave to file supplemental petition and to admit attached supplemental petition with
urgent prayer for restraining order. The Court further required respondents to file their
comment on the petition and supplemental petition with urgent prayer for restraining
order. The Court likewise set the case and all incidents thereof for hearing on 10
November 1994.
At the hearing on 10 November 1994, the issues to be resolved were formulated by the
Court as follows:
1. whether or not intervention by the Republic of the Philippines at
this stage of the proceedings is proper;
2. assuming such intervention is proper, whether or not the
Associated Development Corporation has a valid and subsisting
franchise to maintain and operate the jai-alai;
3. whether or not there was grave abuse of discretion committed by
respondent Judge Reyes in issuing the aforementioned temporary
restraining order (later writ of preliminary injunction); and
4. whether or not there was grave abuse of discretion committed by
respondent Judge Reyes in issuing the aforementioned writ of
preliminary mandatory injunction.
On the issue of the propriety of the intervention by the Republic of the Philippines, a
question was raised during the hearing on 10 November 1994 as to whether
intervention in G.R. No. 115044 was the proper remedy for the national government to
take in questioning the existence of a valid ADC franchise to operate the jai-alai or
whether a separate action for quo warranto under Section 2, Rule 66 of the Rules of
Court was the proper remedy.

We need not belabor this issue since counsel for respondent ADC agreed to the
suggestion that this Court once and for all settle all substantive issues raised by the
parties in these cases. Moreover, this Court can consider the petition filed in G.R. No.
117263 as one for quo warranto which is within the original jurisdiction of the Court
3
under section 5(1), Article VIII of the Constitution.
On the propriety of intervention by the Republic, however, it will be recalled that this
Court in Director of Lands v. Court of Appeals (93 SCRA 238) allowed intervention even
beyond the period prescribed in Section 2 Rule 12 of the Rules of Court. The Court ruled
in said case that a denial of the motions for intervention would "lead the Court to
commit an act of injustice to the movants, to their successor-in-interest and to all
purchasers for value and in good faith and thereby open the door to fraud, falsehood
and misrepresentation, should intervenors' claim be proven to be true."
In the present case, the resulting injustice and injury, should the national government's
allegations be proven correct, are manifest, since the latter has squarely questioned the
very existence of a valid franchise to maintain and operate the jai-alai (which is a
gambling operation) in favor of ADC. As will be more extensively discussed later, the
national government contends that Manila Ordinance No. 7065 which purported to
grant to ADC a franchise to conduct jai-alai operations is void and ultra vires since
Republic Act No. 954, approved on 20 June 1953, or very much earlier than said
Ordinance No. 7065, the latter approved 7 September 1971, in Section 4 thereof,
requires a legislative franchise, not a municipal franchise, for the operation of jai-alai.
Additionally, the national government argues that even assuming, arguendo, that the
abovementioned ordinance is valid, ADC's franchise was nonetheless effectively revoked
by Presidential decree No. 771, issued on 20 August 1975, Sec. 3 of which expressly
revoked all existing franchises and permits to operate all forms of gambling facilities
(including the jai-alai) issued by local governments.
On the other hand, ADC's position is that Ordinance No. 7065 was validly enacted by the
City of Manila pursuant to its delegated powers under it charter, Republic Act No. 409.
ADC also squarely assails the constitutionality of PD No. 771 as violative of the equal
protection and non-impairment clauses of the Constitution. In this connection, counsel
for ADC contends that this Court should really rule on the validity of PD No. 771 to be
able to determine whether ADC continues to possess a valid franchise.
It will undoubtedly be a grave injustice to both parties in this case if this Court were to
shirk from ruling on the issue of constitutionality of PD No. 771. Such issue has, in our
view, become the very lis mota in resolving the present controversy, in view of ADC's
insistence that it was granted a valid and legal franchise by Ordinance No. 7065 to
operate the jai-alai.
The time-honored doctrine is that all laws (PD No. 771 included) are presumed valid and
constitutional until or unless otherwise ruled by this Court. Not only this; Article XVIII
Section 3 of the Constitution states:

Sec. 3. All existing laws, decrees, executive orders, proclamations,

letters of instructions and other executive issuances not inconsistent
with this Constitution shall remain operative until amended, repealed
or revoked.
There is nothing on record to show or even suggest that PD No. 771 has been repealed,
altered or amended by any subsequent law or presidential issuance (when the executive
still exercised legislative powers).
Neither can it be tenably stated that the issue of the continued existence of ADC's
franchise by reason of the unconstitutionality of PD No. 771 was settled in G.R. No.
115044, for the decision of the Court's First Division in said case, aside from not being
final, cannot have the effect of nullifying PD No. 771 as unconstitutional, since only the
4
Court En Banc has that power under Article VIII, Section 4(2) of the Constitution.
And on the question of whether or not the government is estopped from contesting
ADC's possession of a valid franchise, the well-settled rule is that the State cannot be
put in estoppel by the mistakes or errors, if any, of its officials or agents (Republic v.
Intermediate Appellate Court, 209 SCRA 90)
Consequently, in the light of the foregoing expostulation, we conclude that the republic
(in contra distinction to the City of Manila) may be allowed to intervene in G.R. No.
115044. The Republic is intervening in G.R. No. 115044 in the exercise, not of its
business or proprietary functions, but in the exercise of its governmental functions to
protect public morals and promote the general welfare.
II
Anent the question of whether ADC has a valid franchise to operate the Jai-Alai de
Manila, a statement of the pertinent laws is in order.
1. The Charter of the City of Manila was enacted by Congress on 18 June 1949. Section
18 thereof provides:
Sec. 18. Legislative Powers. The Municipal Board shall have the
following legislative powers:
xxx xxx xxx
(jj) To tax, license, permit and regulate wagers or betting by the public
on boxing, sipa, bowling, billiards, pools, horse and dog races, cockpits,
jai-alai, roller or ice-skating on any sporting or athletic contests, as
well as grant exclusive rights to establishments for this purpose,
notwithstanding any existing law to the contrary.

2. On 1 January 1951, Executive Order No. 392 was issued transferring the authority
to regulate jai-alais from local government to the Games and Amusements Board (GAB).
3. On 20 June 1953, Congress enacted Republic Act No. 954, entitled "An Act to Prohibit
With Horse Races and Basque Pelota Games (Jai-Alai), And To Prescribe Penalties For Its
Violation". The provisions of Republic Act No. 954 relating to jai-alai are as follows:
Sec. 4. No person, or group of persons other than the operator or
maintainer of a fronton with legislative franchise to conduct basque
pelota games (Jai-alai), shall offer, to take or arrange bets on any
basque pelota game or event, or maintain or use a totalizator or other
device, method or system to bet or gamble on any basque pelota
game or event. (emphasis supplied).
Sec. 5. No person, operator or maintainer of a fronton with legislative
franchise to conduct basque pelota games shall offer, take, or arrange
bets on any basque pelota game or event, or maintain or use a
totalizator or other device, method or system to bet or gamble on any
basque pelota game or event outside the place, enclosure, or fronton
where the basque pelota game is held. (emphasis supplied).
4. On 07 September 1971, however, the Municipal Board of Manila nonetheless passed
Ordinance No. 7065 entitled "An Ordinance Authorizing the Mayor To Allow And Permit
The Associated Development Corporation To Establish, Maintain And Operate A Jai-Alai
In The City Of Manila, Under Certain Terms And Conditions And For Other Purposes."
5. On 20 August 1975, Presidential Decree No. 771 was issued by then President
Marcos. The decree, entitled "Revoking All Powers and Authority of Local
Government(s) To Grant Franchise, License or Permit And Regulate Wagers Or Betting
By The Public On Horse And Dog Races, Jai-Alai Or Basque Pelota, And Other Forms Of
Gambling", in Section 3 thereof, expressly revoked all existing franchises and permits
issued by local governments.
6. On 16 October 1975, Presidential Decree No. 810, entitled "An Act granting The
Philippine Jai-Alai And Amusement Corporation A Franchise To Operate, Construct And
Maintain A Fronton For Basque Pelota And Similar Games of Skill In THE Greater Manila
Area," was promulgated.
7 On 08 May 1987, then President Aquino, by virtue of Article XVIII, Section 6, of the
Constitution, which allowed the incumbent legislative powers until the first Congress
was convened, issued Executive Order No. 169 expressly repealing PD 810 and revoking
and cancelling the franchise granted to the Philippine Jai-Alai and Amusement
Corporation.
Petitioners in G.R. No. 117263 argue that Republic Act No. 954 effectively removed the
power of the Municipal Board of Manila to grant franchises for gambling operations. It is

argued that the term "legislative franchise" in Rep. Act No. 954 is used to refer to
franchises issued by Congress.
On the other hand, ADC contends that Republic Act N. 409 (Manila Chapter) gives
legislative powers to the Municipal Board to grant franchises, and since Republic Act No.
954 does not specifically qualify the word "legislative" as referring exclusively to
Congress, then Rep. Act No. 954 did not remove the power of the Municipal Board
under Section 18(jj) of Republic Act No. 409 and consequently it was within the power
of the City of Manila to allow ADC to operate the jai-alai in the City of Manila.
On this point, the government counter-argues that the term "legislative powers" is used
in Rep. Act No. 409 merely to distinguish the powers under Section 18 of the law from
the other powers of the Municipal Board, but that the term "legislative franchise" in
Rep. Act No. 954 refers to a franchise granted solely by Congress.
Further, the government argues that Executive Order No. 392 dated 01 January 1951
transferred even the power to regulate Jai-Alai from the local governments to the
Games and Amusements Board (GAB), a national government agency.
It is worthy of note that neither of the authorities relied upon by ADC to support its
alleged possession of a valid franchise, namely the Charter of the City of Manila (Rep.
Act No. 409) and Manila Ordinance No. 7065 uses the word "franchise". Rep. Act No.
409 empowers the Municipal Board of Manila to "tax, license,
permit and regulatewagers or betting" and to "grant exclusive rights to establishments",
while Ordinance No. 7065 authorized the Manila City Mayor to "allow and permit" ADC
to operate jai-alai facilities in the City of Manila.
It is clear from the foregoing that Congress did not delegate to the City of Manila the
power "to franchise" wagers or betting, including the jai-alai, but retained for itself such
power "to franchise". What Congress delegated to the City of Manila in Rep. Act No.
409, with respect to wagers or betting, was the power to "license, permit, or regulate"
which therefore means that a license or permit issued by the City of Manila to operate a
wager or betting activity, such as the jai-alai where bets are accepted, would not
amount to something meaningful UNLESS the holder of the permit or license was also
FRANCHISED by the national government to so operate. Moreover, even this power to
license, permit, or regulate wagers or betting on jai-alai was removed from local
governments, including the City of Manila, and transferred to the GAB on 1 January
1951 by Executive Order No. 392. The net result is that the authority to grant franchises
for the operation of jai-alai frontons is in Congress, while the regulatory function is
vested in the GAB.
In relation, therefore, to the facts of this case, since ADC has no franchise from Congress
to operate the jai-alai, it may not so operate even if its has a license or permit from the
City Mayor to operate the jai-alai in the City of Manila.

It cannot be overlooked, in this connection, that the Revised Penal Code punishes
gambling and betting under Articles 195 to 199 thereof. Gambling is thus generally
prohibited by law, unless another law is enacted byCongress expressly exempting or
excluding certain forms of gambling from the reach of criminal law. Among these form
the reach of criminal law. Among these forms of gambling allowed by special law are the
horse races authorized by Republic Acts Nos. 309 and 983 and gambling casinos
authorized under Presidential Decree No. 1869.
While jai-alai as a sport is not illegal per se, the accepting of bets or wagers on the
results of jai-alai games is undoubtedly gambling and, therefore, a criminal offense
punishable under Articles 195-199 of the Revised Penal Code, unless it is shown that a
later or special law had been passed allowing it. ADC has not shown any such special
law.
Republic Act No. 409 (the Revised Charter of the City of Manila) which was enacted by
Congress on 18 June 1949 gave the Municipal Board certain delegated legislative powers
under Section 18. A perusal of the powers enumerated under Section 18 shows that
5
these powers are basically regulatory in nature. The regulatory nature of these powers
finds support not only in the plain words of the enumerations under Section 28 but also
in this Court's ruling inPeople v. Vera (65 Phil. 56).
In Vera, this Court declared that a law which gives the Provincial Board the discretion to
determine whether or not a law of general application (such as, the Probation law-Act
No. 4221) would or would not be operative within the province, is unconstitutional for
being an undue delegation of legislative power.
From the ruling in Vera, it would be logical to conclude that, if ADC's arguments were to
prevail, this Court would likewise declare Section 18(jj) of the Revised Charter of Manila
unconstitutional for the power it would delegate to the Municipal Board of Manila
would give the latter the absolute and unlimited discretion to render the penal code
provisions on gambling inapplicable or inoperative to persons or entities issued permits
to operate gambling establishments in the City of Manila.
We need not go to this extent, however, since the rule is that laws must be presumed
valid, constitutional and in harmony with other laws. Thus, the relevant provisions of
Rep. Acts Nos. 409 and 954 and Ordinance No. 7065 should be taken together and it
should then be clear that the legislative powers of the Municipal Board should be
understood to be regulatory in nature and that Republic Act No. 954 should be
understood to refer tocongressional franchises, as a necessity for the operation of jaialai.
We need not, however, again belabor this issue further since the task at hand which will
ultimately, and with finality, decide the issues in this case is to determine whether PD
No. 771 validly revoked ADC's franchise to operate the jai-alai, assuming (without
conceding) that it indeed possessed such franchise under Ordinance No. 7065.

ADC argues that PD No. 771 is unconstitutional for being violative of the equal
protection and non-impairment provisions of the Constitution. On the other hand, the
government contends that PD No. 771 is a valid exercise of the inherent police power of
the State.
The police power has been described as the least limitable of the inherent powers of the
State. It is based on the ancient doctrine salus populi est suprema lex (the welfare of
the people is the supreme law.) In the early case of Rubi v. Provincial Board of
Mindoro (39 Phil. 660), this Court through Mr. Justice George A. Malcolm stated thus:
The police power of the State . . . is a power co-extensive with selfprotection, and is not inaptly termed the "law of overruling necessity."
It may be said to be that inherent and plenary power in the State
which enables it to prohibit all things hurtful to the comfort, safety
and welfare of society. Carried onward by the current of legislation,
the judiciary rarely attempts to dam the onrushing power of legislative
discretion, provided the purposes of the law do not go beyond the
great principles that mean security for the public welfare or do not
arbitrarily interfere with the right of the individual.
In the matter of PD No. 771, the purpose of the law is clearly stated in the "whereas
clause" as follows:
WHEREAS, it has been reported that in spite of the current drive of our
law enforcement agencies against vices and illegal gambling, these
social ills are still prevalent in many areas of the country;
WHEREAS, there is need to consolidate all the efforts of the
government to eradicate and minimize vices and other forms of social
ills in pursuance of the social and economic development program
under the new society;
WHEREAS, in order to effectively control and regulate wagers or
betting by the public on horse and dog races, jai-alai and other forms
of gambling there is a necessity to transfer the issuance of permit
and/or franchise from local government to the National Government.
It cannot be argued that the control and regulation of gambling do not promote public
morals and welfare. Gambling is essentially antagonistic and self-reliance. It breeds
indolence and erodes the value of good, honest and hard work. It is, as very aptly stated
by PD No. 771, a vice and a social ill which government must minimize (if not eradicate)
in pursuit of social and economic development.
In Magtajas v. Pryce Properties Corporation (20 July 1994, G.R. No. 111097), this Court
stated thru Mr. Justice Isagani A. Cruz:

In the exercise of its own discretion, the legislative power may prohibit
gambling altogether or allow it without limitation or it may prohibit
some forms of gambling and allow others for whatever reasons it may
consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such
choices, Congress has consulted its own wisdom, which this Court
has no authority to review, much less reverse. Well has it been said
that courts do not sit to resolve the merits of conflicting theories. That
is the prerogative of the political departments. It is settled that
questions regarding wisdom, morality and practicability of statutes are
not addressed to the judiciary but may be resolved only by the
executive and legislative departments, to which the function belongs
in our scheme of government. (Emphasis supplied)
Talks regarding the supposed vanishing line between right and privilege in American
constitutional law has no relevance in the context of these cases since the reference
there is to economic regulations. On the other hand, jai-alai is not a mere economic
activity which the law seeks to regulate. It is essentially gambling and whether it should
be permitted and, if so, under what conditions are questions primarily for the
lawmaking authority to determine, talking into account national and local interests.
Here, it is the police power of the State that is paramount.
ADC questions the motive for the issuance of PD Nos. 771. Clearly, however, this Court
cannot look into allegations that PD No. 771 was enacted to benefit a select group
which was later given authority to operate the jai-alai under PD No. 810. The
examination of legislative motivation is generally prohibited. (Palmer v. Thompson, 403
U.S. 217, 29 L. Ed. 2d 438 [1971] per Black, J.) There is, the first place, absolute lack of
evidence to support ADC's allegation of improper motivation in the issuance of PD No.
771. In the second place, as already averred, this Court cannot go behind the expressed
and proclaimed purposes of PD No. 771, which are reasonable and even laudable.
It should also be remembered that PD No. 771 provides that the national
government can subsequently grant franchises "upon proper application and verification
of the qualifications of the applicant." ADC has not alleged that it filed an application for
a franchise with the national government subsequent to the enactment of PD No. 771;
thus, the allegations abovementioned (of preference to a select group) are based on
conjectures, speculations and imagined biases which do not warrant the consideration
of this Court.
On the other hand, it is noteworthy that while then president Aquino issued Executive
Order No. 169 revoking PD No. 810 (which granted a franchise to a Marcos-crony to
operate the jai-alai), she did not scrap or repeal PD No. 771 which had revoked all
franchises to operate jai-alais issued by local governments, thereby re-affirming the
government policy that franchises to operate jai-alais are for the national government
(not local governments) to consider and approve.

On the alleged violation of the non-impairment and equal protection clauses of the
Constitution, it should be remembered that a franchise is not in the strict sense a simple
contract but rather it is more importantly, a mere privilege specially in matters which
are within the government's power to regulate and even prohibit through the exercise
of the police power. Thus, a gambling franchise is always subject to the exercise of
police power for the public welfare.

III

In RCPI v. NTC (150 SCRA 450), we held that:

Section 3, Rule 58 of the rules of Court provides for the grounds for the issuance of a
preliminary injunction. While ADC could allege these grounds, respondent judge should
have taken judicial notice of Republic Act No. 954 and PD 771, under Section 1 rule 129
of the Rules of court. These laws negate the existence of any legal right on the part of
ADC to the reliefs it sought so as to justify the issuance of a writ of preliminary
injunction. since PD No. 771 and Republic Act No. 954 are presumed valid and
constitutional until ruled otherwise by the Supreme Court after due hearing, ADC was
not entitled to the writs issued and consequently there was grave abuse of discretion in
issuing them.

A franchise started out as a "royal privilege or (a) branch of the King's

prerogative, subsisting in the hands of a subject." This definition was
given by Finch, adopted by Blackstone, and accepted by every
authority since . . . Today, a franchise being merely a privilege
emanating from the sovereign power of the state and owing its
existence to a grant, is subject to regulation by the state itself by
virtue of its police power through its administrative agencies.
There is a stronger reason for holding ADC's permit to be a mere privilege because jaialai, when played for bets, is pure and simple gambling. To analogize a gambling
franchise for the operation of a public utility, such as public transportation company, is
to trivialize the great historic origin of this branch of royal privilege.

On the issue of whether or not there was grave abuse of discretion committed by
respondent Judge Reyes in issuing the temporary restraining order (later converted to a
writ of preliminary injunction) and the writ of preliminary mandatory injunction, we
hold and rule there was.

WHEREFORE, for the foregoing reasons, judgment is hereby rendered:

1. allowing the Republic of the Philippines to intervene in G.R. No.
115044.

As earlier noted, ADC has not alleged ever applying for a franchise under the provisions
of PD No. 771. and yet, the purpose of PD No. 771 is quite clear from its provisions, i.e.,
to give to the national government the exclusive power to grant gambling franchises.
Thus, all franchises then existing were revoked but were made subject to reissuance by
the national government upon compliance by the applicant with government-set
qualifications and requirements.

2. declaring Presidential Decree No. 771 valid and constitutional.

There was no violation by PD No. 771 of the equal protection clause since the decree
revoked all franchises issued by local governments without qualification or exception.
ADC cannot allege violation of the equal protection clause simply because it was the
only one affected by the decree, for as correctly pointed out by the government, ADC
was not singled out when all jai-alai franchises were revoked. Besides, it is too late in
the day for ADC to seek redress for alleged violation of its constitutional rights for it
could have raised these issues as early as 1975, almost twenty 920) years ago.

4. setting aside the writs of preliminary injunction and preliminary

mandatory injunction issued by respondent Judge Vetino Reyes in civil
Case No. 94-71656.

Finally, we do not agree that Section 3 of PD No. 771 and the requirement of a
legislative franchise in Republic Act No. 954 are "riders" to the two 92) laws and are
violative of the rule that laws should embrace one subject which shall be expressed in
the title, as argued by ADC. In Cordero v. Cabatuando (6 SCRA 418), this Court ruled that
the requirement under the constitution that all laws should embrace only one subject
which shall be expressed in the title is sufficiently met if the title is comprehensive
enough reasonably to include the general object which the statute seeks to effect,
without expressing each and every end and means necessary or convenient for the
accomplishing of the objective.

3. declaring that respondent Associated Development corporation

(ADC) does not possess the required congressional franchise to
operate and conduct the jai-alai under Republic Act No. 954 and
Presidential Decree No. 771.

SO ORDERED.
Feliciano, Bidin, Regalado, Romero, Bellosillo and Mendoza, JJ., concur.
Narvasa, C.J. and Francisco, JJ., took no part.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. 105371 November 11, 1993
THE PHILIPPINE JUDGES ASSOCIATION, duly rep. by its President, BERNARDO P.
ABESAMIS, Vice-President for Legal Affairs, MARIANO M. UMALI, Director for Pasig,
Makati, and Pasay, Metro Manila, ALFREDO C. FLORES, and Chairman of the
Committee on Legal Aid, JESUS G. BERSAMIRA, Presiding Judges of the Regional Trial
Court, Branch 85, Quezon City and Branches 160, 167 and 166, Pasig, Metro Manila,
respectively: the NATIONAL CONFEDERATION OF THE JUDGES ASSOCIATION OF THE
PHILIPPINES, composed of the METROPOLITAN TRIAL COURT JUDGES ASSOCIATION
rep. by its President. REINATO QUILALA of the MUNICIPAL TRIAL CIRCUIT COURT,
Manila; THE MUNICIPAL JUDGES LEAGUE OF THE PHILIPPINES rep. by its President,
TOMAS G. TALAVERA; by themselves and in behalf of all the Judges of the Regional
Trial and Shari'a Courts, Metropolitan Trial Courts and Municipal Courts throughout
the Country, petitioners,
vs.
HON. PETE PRADO, in his capacity as Secretary of the Department of Transportation
and Communications, JORGE V. SARMIENTO, in his capacity as Postmaster General,
and the PHILIPPINE POSTAL CORP., respondents.
CRUZ, J.:
The basic issue raised in this petition is the independence of the Judiciary. It is asserted
by the petitioners that this hallmark of republicanism is impaired by the statute and
circular they are here challenging. The Supreme Court is itself affected by these
measures and is thus an interested party that should ordinarily not also be a judge at
the same time. Under our system of government, however, it cannot inhibit itself and
must rule upon the challenge, because no other office has the authority to do so. We
shall therefore act upon this matter not with officiousness but in the discharge of an
unavoidable duty and, as always, with detachment and fairness.
The main target of this petition is Section 35 of R.A. No. 7354 as implemented by the
Philippine
Postal
Corporation
through
its
Circular
No.
92-28. These measures withdraw the franking privilege from the Supreme Court, the
Court of Appeals, the Regional Trial Courts, the Metropolitan Trial Courts, the Municipal
Trial Courts, and the Land Registration Commission and its Registers of Deeds, along
with certain other government offices.
The petitioners are members of the lower courts who feel that their official functions as
judges will be prejudiced by the above-named measures. The National Land Registration
Authority has taken common cause with them insofar as its own activities, such as

sending of requisite notices in registration cases, affect judicial proceedings. On its

motion, it has been allowed to intervene.
The petition assails the constitutionality of R.A. No. 7354 on the grounds that: (1) its title
embraces more than one subject and does not express its purposes; (2) it did not pass
the required readings in both Houses of Congress and printed copies of the bill in its
final form were not distributed among the members before its passage; and (3) it is
discriminatory and encroaches on the independence of the Judiciary.
We approach these issues with one important principle in mind, to wit, the presumption
of the constitutionality of statutes. The theory is that as the joint act of the Legislature
and the Executive, every statute is supposed to have first been carefully studied and
determined to be constitutional before it was finally enacted. Hence, unless it is clearly
shown that it is constitutionally flawed, the attack against its validity must be rejected
and the law itself upheld. To doubt is to sustain.
I.

We consider first the objection based on Article VI, Sec. 26(l), of the
Constitution providing that "Every bill passed by the Congress shall
embrace only one subject which shall be expressed in the title thereof."

The purposes of this rule are: (1) to prevent hodge-podge or "log-rolling" legislation; (2)
to prevent surprise or fraud upon the legislature by means of provisions in bills of which
the title gives no intimation, and which might therefore be overlooked and carelessly
and unintentionally adopted; and (3) to fairly apprise the people, through such
publication of legislative proceedings as is usually made, of the subject of legislation that
is being considered, in order that they may have opportunity of being heard thereon, by
1
petition or otherwise, if they shall so desire.
It is the submission of the petitioners that Section 35 of R.A. No. 7354 which withdrew
the franking privilege from the Judiciary is not expressed in the title of the law, nor does
it reflect its purposes.
R.A. No. 7354 is entitled "An Act Creating the Philippine Postal Corporation, Defining its
Powers, Functions and Responsibilities, Providing for Regulation of the Industry and for
Other Purposes Connected Therewith."
The objectives of the law are enumerated in Section 3, which provides:
The State shall pursue the following objectives of a nationwide postal
system:
a) to enable the economical and speedy transfer of mail and other
postal matters, from sender to addressee, with full recognition of their
privacy or confidentiality;

b) to promote international interchange, cooperation and

understanding through the unhampered flow or exchange of postal
matters between nations;
c) to cause or effect a wide range of postal services to cater to
different users and changing needs, including but not limited to,
philately, transfer of monies and valuables, and the like;
d) to ensure that sufficient revenues are generated by and within the
industry to finance the overall cost of providing the varied range of
postal delivery and messengerial services as well as the expansion and
continuous upgrading of service standards by the same.
Sec. 35 of R.A. No. 7354, which is the principal target of the petition, reads as follows:
Sec. 35. Repealing Clause. All acts, decrees, orders, executive
orders, instructions, rules and regulations or parts thereof inconsistent
with the provisions of this Act are repealed or modified accordingly.
All franking privileges authorized by law are hereby repealed, except
those provided for under Commonwealth Act No. 265, Republic Acts
Numbered 69, 180, 1414, 2087 and 5059. The Corporation may
continue the franking privilege under Circular No. 35 dated October
24, 1977 and that of the Vice President, under such arrangements and
conditions as may obviate abuse or unauthorized use thereof.

execution. If such matters are properly connected with the subject as

expressed in the title, it is unnecessary that they should also have
special mention in the title (Southern Pac. Co. v. Bartine, 170 Fed.
725).
This is particularly true of the repealing clause, on which Cooley writes: "The repeal of a
statute on a given subject is properly connected with the subject matter of a new
statute on the same subject; and therefore a repealing section in the new statute is
valid, notwithstanding that the title is silent on the subject. It would be difficult to
conceive of a matter more germane to an act and to the object to be accomplished
4
thereby than the repeal of previous legislations connected therewith."
The reason is that where a statute repeals a former law, such repeal is the effect and
not the subject of the statute; and it is the subject, not the effect of a law, which is
5
6
required to be briefly expressed in its title. As observed in one case, if the title of an
act embraces only one subject, we apprehend it was never claimed that every other act
which repeals it or alters by implication must be mentioned in the title of the new act.
Any such rule would be neither within the reason of the Constitution, nor practicable.
We are convinced that the withdrawal of the franking privilege from some agencies is
germane to the accomplishment of the principal objective of R.A. No. 7354, which is the
creation of a more efficient and effective postal service system. Our ruling is that, by
virtue of its nature as a repealing clause, Section 35 did not have to be expressly
included in the title of the said law.
II.

The petitioners' contention is untenable. We do not agree that the title of the
challenged act violates the Constitution.
The title of the bill is not required to be an index to the body of the act, or to be as
comprehensive as to cover every single detail of the measure. It has been held that if
the title fairly indicates the general subject, and reasonably covers all the provisions of
the act, and is not calculated to mislead the legislature or the people, there is sufficient
2
compliance with the constitutional requirement.
To require every end and means necessary for the accomplishment of the general
objectives of the statute to be expressed in its title would not only be unreasonable but
3
would actually render legislation impossible. As has been correctly explained:
The details of a legislative act need not be specifically stated in its title,
but matter germane to the subject as expressed in the title, and
adopted to the accomplishment of the object in view, may properly be
included in the act. Thus, it is proper to create in the same act the
machinery by which the act is to be enforced, to prescribe the
penalties for its infraction, and to remove obstacles in the way of its

The petitioners maintain that the second paragraph of Sec. 35 covering the
repeal of the franking privilege from the petitioners and this Court under
E.O. 207, PD 1882 and PD 26 was not included in the original version of
Senate Bill No. 720 or House Bill No. 4200. As this paragraph appeared only
in the Conference Committee Report, its addition, violates Article VI, Sec.
26(2) of the Constitution, reading as follows:
(2) No bill passed by either House shall become a law unless it has
passed three readings on separate days, and printed copies thereof in
its final form have been distributed to its Members three days before
its passage, except when the President certifies to the necessity of its
immediate enactment to meet a public calamity or emergency. Upon
the last reading of a bill, no amendment thereto shall be allowed, and
the vote thereon shall be taken immediately thereafter, and
the yeasand nays entered in the Journal.

The petitioners also invoke Sec. 74 of the Rules of the House of Representatives,
requiring that amendment to any bill when the House and the Senate shall have
differences thereon may be settled by a conference committee of both chambers. They
stress that Sec. 35 was never a subject of any disagreement between both Houses and
so the second paragraph could not have been validly added as an amendment.

These argument are unacceptable.

While it is true that a conference committee is the mechanism for compromising
differences between the Senate and the House, it is not limited in its jurisdiction to this
question. Its broader function is described thus:
A conference committee may, deal generally with the subject matter
or it may be limited to resolving the precise differences between the
two houses. Even where the conference committee is not by rule
limited in its jurisdiction, legislative custom severely limits the
freedom with which new subject matter can be inserted into the
conference bill. But occasionally a conference committee produces
unexpected results, results beyond its mandate, These excursions
occur even where the rules impose strict limitations on conference
committee jurisdiction. This is symptomatic of the authoritarian power
of conference committee (Davies, Legislative Law and Process: In a
Nutshell, 1986 Ed., p.81).
It is a matter of record that the conference Committee Report on the bill in question
was returned to and duly approved by both the Senate and the House of
Representatives. Thereafter, the bill was enrolled with its certification by Senate
President Neptali A. Gonzales and Speaker Ramon V. Mitra of the House of
Representatives as having been duly passed by both Houses of Congress. It was then
presented to and approved by President Corazon C. Aquino on April 3, 1992.
Under the doctrine of separation powers, the Court may not inquire beyond the
certification of the approval of a bill from the presiding officers of Congress. Casco
7
Philippine Chemical Co. v. Gimenez laid down the rule that the enrolled bill, is
conclusive upon the Judiciary (except in matters that have to be entered in the journals
like
the yeas andnays on
the
final
reading
of
the
8
bill). The journals are themselves also binding on the Supreme Court, as we held in the
9
old (but still valid) case of U.S. vs. Pons, where we explained the reason thus:
To inquire into the veracity of the journals of the Philippine legislature
when they are, as we have said, clear and explicit, would be to violate
both the, letter and spirit of the organic laws by which the Philippine
Government was brought into existence, to invade a coordinate and
independent department of the Government, and to interfere with
the legitimate powers and functions, of the Legislature.
Applying these principles, we shall decline to look into the petitioners' charges that an
amendment was made upon the last reading of the bill that eventually became R.A. No.
7354 and that copies thereof in its final form were not distributed among the members
of each House. Both the enrolled bill and the legislative journals certify that the measure
was duly enacted i.e., in accordance with Article VI, Sec. 26(2) of the Constitution. We

are bound by such official assurances from a coordinate department of the government,
to which we owe, at the very least, a becoming courtesy.
III.

The third and most serious challenge of the petitioners is based on the
equal protection clause.

It is alleged that R.A. No. 7354 is discriminatory because while withdrawing the franking
privilege from the Judiciary, it retains the same for the President of the Philippines, the
Vice President of the Philippines; Senators and Members of the House of
Representatives, the Commission on Elections; former Presidents of the Philippines; the
National Census and Statistics Office; and the general public in the filing of complaints
10
against public offices and officers.
The respondents counter that there is no discrimination because the law is based on a
valid classification in accordance with the equal protection clause. In fact, the franking
privilege has been withdrawn not only from the Judiciary but also the Office of Adult
Education, the Institute of National Language; the Telecommunications Office; the
Philippine Deposit Insurance Corporation; the National Historical Commission; the
Armed Forces of the Philippines; the Armed Forces of the Philippines Ladies Steering
Committee; the City and Provincial Prosecutors; the Tanodbayan (Office of Special
Prosecutor); the Kabataang Barangay; the Commission on the Filipino Language; the
Provincial and City Assessors; and the National Council for the Welfare of Disabled
11
Persons.
The equal protection of the laws is embraced in the concept of due process, as every
unfair discrimination offends the requirements of justice and fair play. It has
nonetheless been embodied in a separate clause in Article III Sec. 1., of the Constitution
to provide for a more, specific guaranty against any form of undue favoritism or hostility
from the government. Arbitrariness in general may be challenged on the basis of the
due process clause. But if the particular act assailed partakes of an unwarranted
partiality or prejudice, the sharper weapon to cut it down is the equal protection clause.
According to a long line of decisions, equal protection simply requires that all persons or
things similarly situated should be treated alike, both as to rights conferred and
12
responsibilities imposed, Similar subjects, in other words, should not be treated
differently, so as to give undue favor to some and unjustly discriminate against others.
The equal protection clause does not require the universal application of the laws on all
persons or things without distinction. This might in fact sometimes result in unequal
protection, as where, for example, a law prohibiting mature books to all persons,
regardless of age, would benefit the morals of the youth but violate the liberty of adults.
What the clause requires is equality among equals as determined according to a valid
classification. By classification is meant the grouping of persons or things similar to each
13
other in certain particulars and different from all others in these same particulars.

What is the reason for the grant of the franking privilege in the first place? Is the
franking privilege extended to the President of the Philippines or the Commission on
Elections or to former Presidents of the Philippines purely as acourtesy from the
lawmaking body? Is it offered because of the importance or status of the grantee or
because of its need for the privilege? Or have the grantees been chosen pell-mell, as it
were, without any basis at all for the selection?
We reject outright the last conjecture as there is no doubt that the statute as a whole
was carefully deliberated upon, by the political departments before it was finally
enacted. There is reason to suspect, however, that not enough care or attention was
given to its repealing clause, resulting in the unwitting withdrawal of the franking
privilege from the Judiciary.
We also do not believe that the basis of the classification was mere courtesy, for it is
unimaginable that the political departments would have intended this serious slight to
the Judiciary as the third of the major and equal departments the government. The
same observations are made if the importance or status of the grantee was the criterion
used for the extension of the franking privilege, which is enjoyed by the National Census
and Statistics Office and even some private individuals but not the courts of justice.
In our view, the only acceptable reason for the grant of the franking privilege was the
perceived need of the grantee for the accommodation, which would justify a waiver of
substantial revenue by the Corporation in the interest of providing for a smoother flow
of communication between the government and the people.
Assuming that basis, we cannot understand why, of all the departments of the
government, it is the Judiciary, that has been denied the franking privilege. There is no
question that if there is any major branch of the government that needs the privilege, it
is the Judicial Department, as the respondents themselves point out. Curiously, the
respondents would justify the distinction on the basis precisely of this need and, on this
basis, deny the Judiciary the franking privilege while extending it to others less
deserving.
In their Comment, the respondents point out that available data from the Postal Service
Office show that from January 1988 to June 1992, the total volume of frank mails
amounted to P90,424,175.00. Of this amount, frank mails from the Judiciary and other
agencies whose functions include the service of judicial processes, such as the
intervenor, the Department of Justice and the Office of the Ombudsman, amounted to
P86,481,759. Frank mails coming fromthe Judiciary amounted to P73,574,864.00, and
those coming from the petitioners reached the total amount of P60,991,431.00. The
respondents' conclusion is that because of this considerable volume of mail from the
Judiciary, the franking privilege must be withdrawn from it.
The argument is self-defeating. The respondents are in effect saying that the franking
privilege should be extended only to those who do not need it very much, if at all, (like
the widows of former Presidents) but not to those who need it badly (especially the

courts of justice). It is like saying that a person may be allowed cosmetic surgery
although it is not really necessary but not an operation that can save his life.
If the problem of the respondents is the loss of revenues from the franking privilege, the
remedy, it seems to us, is to withdraw it altogether from all agencies of government,
including those who do not need it. The problem is not solved by retaining it for some
and withdrawing it from others, especially where there is no substantial distinction
between those favored, which may or may not need it at all, and the Judiciary, which
definitely needs it. The problem is not solved by violating the Constitution.
In lumping the Judiciary with the other offices from which the franking privilege has
been withdrawn, Section 35 has placed the courts of justice in a category to which it
does not belong. If it recognizes the need of the President of the Philippines and the
members of Congress for the franking privilege, there is no reason why it should not
recognize a similar and in fact greater need on the part of the Judiciary for such
privilege. While we may appreciate the withdrawal of the franking privilege from the
Armed Forces of the Philippines Ladies Steering Committee, we fail to understand why
the Supreme Court should be similarly treated as that Committee. And while we may
concede the need of the National Census and Statistics Office for the franking privilege,
we are intrigued that a similar if not greater need is not recognized in the courts of
justice.
(On second thought, there does not seem to be any justifiable need for withdrawing the
privilege from the Armed Forces of the Philippines Ladies Steering Committee, which,
like former Presidents of the Philippines or their widows, does not send as much frank
mail as the Judiciary.)
It is worth observing that the Philippine Postal Corporation, as a government-controlled
corporation, was created and is expected to operate for the purpose of promoting the
public service. While it may have been established primarily for private gain, it cannot
excuse itself from performing certain functions for the benefit of the public in exchange
for the franchise extended to it by the government and the many advantages it enjoys
14
under its charter. Among the services it should be prepared to extend is free carriage
of mail for certain offices of the government that need the franking privilege in the
discharge of their own public functions.
We also note that under Section 9 of the law, the Corporation is capitalized at P10
billion pesos, 55% of which is supplied by the Government, and that it derives
substantial revenues from the sources enumerated in Section 10, on top of the
exemptions it enjoys. It is not likely that the retention of the franking privilege of the
Judiciary will cripple the Corporation.
At this time when the Judiciary is being faulted for the delay in the administration of
justice, the withdrawal from it of the franking privilege can only further deepen this
serious problem. The volume of judicial mail, as emphasized by the respondents
themselves, should stress the dependence of the courts of justice on the postal service

for communicating with lawyers and litigants as part of the judicial process. The
Judiciary has the lowest appropriation in the national budget compared to the
Legislative and Executive Departments; of the P309 billion budgeted for 1993, only
.84%, or less than 1%, is alloted for the judiciary. It should not be hard to imagine the
increased difficulties of our courts if they have to affix a purchased stamp to every
process they send in the discharge of their judicial functions.
We are unable to agree with the respondents that Section 35 of R.A. No. 7354
represents a valid exercise of discretion by the Legislature under the police power. On
the contrary, we find its repealing clause to be a discriminatory provision that denies the
Judiciary the equal protection of the laws guaranteed for all persons or things similarly
situated. The distinction made by the law is superficial. It is not based on substantial
distinctions that make real differences between the Judiciary and the grantees of the
franking privilege.
This is not a question of wisdom or power into which the Judiciary may not intrude. It is
a matter of arbitrariness that this Court has the duty and power to correct.
IV.

In sum, we sustain R.A. No. 7354 against the attack that its subject is not
expressed in its title and that it was not passed in accordance with the
prescribed procedure. However, we annul Section 35 of the law as
violative of Article 3, Sec. 1, of the Constitution providing that no person
shall "be deprived of the equal protection of laws."

We arrive at these conclusions with a full awareness of the criticism it is certain to

provoke. While ruling against the discrimination in this case, we may ourselves be
accused of similar discrimination through the exercise of our ultimate power in our own
favor. This is inevitable. Criticism of judicial conduct, however undeserved, is a fact of
life in the political system that we are prepared to accept.. As judges, we cannot debate
with our detractors. We can only decide the cases before us as law imposes on us the
duty to be fair and our own conscience gives us the light to be right.
ACCORDINGLY, the petition is partially GRANTED and Section 35 of R.A. No. 7354 is
declared UNCONSTITUTIONAL. Circular No. 92-28 is SET ASIDE insofar as it withdraws
the franking privilege from the Supreme Court, the Court of Appeals, the Regional trail
Courts, the Municipal trial Courts, and the National Land Registration Authority and its
Register of Deeds to all of which offices the said privilege shall be RESTORED. The
temporary restraining order dated June 2, 1992, is made permanent.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Davide, Jr., Romero, Nocon, Melo,
Quiason, Puno and Vitug, JJ., concur.
Bellosillo, J., is on leave.

Republic of the Philippines

SUPREME COURT
Manila

while correctly quoted or paraghraph do not support petitioner's stand." 10 The prayer
is for the dismissal of the petition for lack of merit.
This Court finds such a plea more than justified. The petition must be dismissed.

EN BANC
G.R. No. L-59431 July 25, 1984
ANTERO M. SISON, JR., petitioner,
vs.
RUBEN B. ANCHETA, Acting Commissioner, Bureau of Internal Revenue; ROMULO
VILLA, Deputy Commissioner, Bureau of Internal Revenue; TOMAS TOLEDO Deputy
Commissioner, Bureau of Internal Revenue; MANUEL ALBA, Minister of Budget,
FRANCISCO TANTUICO, Chairman, Commissioner on Audit, and CESAR E. A. VIRATA,
Minister of Finance, respondents.

1. It is manifest that the field of state activity has assumed a much wider scope, The
reason was so clearly set forth by retired Chief Justice Makalintal thus: "The areas which
used to be left to private enterprise and initiative and which the government was called
upon to enter optionally, and only 'because it was better equipped to administer for the
public welfare than is any private individual or group of individuals,' continue to lose
their well-defined boundaries and to be absorbed within activities that the government
must undertake in its sovereign capacity if it is to meet the increasing social challenges
of the times." 11 Hence the need for more revenues. The power to tax, an inherent
prerogative, has to be availed of to assure the performance of vital state functions. It is
the source of the bulk of public funds. To praphrase a recent decision, taxes being the
lifeblood of the government, their prompt and certain availability is of the essence. 12

Antero Sison for petitioner and for his own behalf.

The Solicitor General for respondents.
FERNANDO, C.J.:
The success of the challenge posed in this suit for declaratory relief or prohibition
proceeding 1 on the validity of Section I of Batas Pambansa Blg. 135 depends upon a
showing of its constitutional infirmity. The assailed provision further amends Section 21
of the National Internal Revenue Code of 1977, which provides for rates of tax on
citizens or residents on (a) taxable compensation income, (b) taxable net income, (c)
royalties, prizes, and other winnings, (d) interest from bank deposits and yield or any
other monetary benefit from deposit substitutes and from trust fund and similar
arrangements, (e) dividends and share of individual partner in the net profits of taxable
2
3
partnership, (f) adjusted gross income. Petitioner as taxpayer alleges that by virtue
thereof, "he would be unduly discriminated against by the imposition of higher rates of
tax upon his income arising from the exercise of his profession vis-a-vis those which are
4
imposed upon fixed income or salaried individual taxpayers. He characterizes the
above sction as arbitrary amounting to class legislation, oppressive and capricious in
5
character For petitioner, therefore, there is a transgression of both the equal
6
protection and due process clauses of the Constitution as well as of the rule requiring
7
uniformity in taxation.
The Court, in a resolution of January 26, 1982, required respondents to file an answer
within 10 days from notice. Such an answer, after two extensions were granted the
8
Office of the Solicitor General, was filed on May 28, 1982. The facts as alleged were
admitted but not the allegations which to their mind are "mere arguments, opinions or
conclusions on the part of the petitioner, the truth [for them] being those stated [in
9
their] Special and Affirmative Defenses." The answer then affirmed: "Batas Pambansa
Big. 135 is a valid exercise of the State's power to tax. The authorities and cases cited

2. The power to tax moreover, to borrow from Justice Malcolm, "is an attribute of
sovereignty. It is the strongest of all the powers of of government." 13 It is, of course, to
be admitted that for all its plenitude 'the power to tax is not unconfined. There are
restrictions. The Constitution sets forth such limits . Adversely affecting as it does
properly rights, both the due process and equal protection clauses inay properly be
invoked, all petitioner does, to invalidate in appropriate cases a revenue measure. if it
were otherwise, there would -be truth to the 1803 dictum of Chief Justice Marshall that
"the power to tax involves the power to destroy." 14 In a separate opinion in Graves v.
New York, 15 Justice Frankfurter, after referring to it as an 1, unfortunate remark
characterized it as "a flourish of rhetoric [attributable to] the intellectual fashion of the
times following] a free use of absolutes." 16 This is merely to emphasize that it is riot
and there cannot be such a constitutional mandate. Justice Frankfurter could rightfully
conclude: "The web of unreality spun from Marshall's famous dictum was brushed away
by one stroke of Mr. Justice Holmess pen: 'The power to tax is not the power to destroy
while this Court sits." 17 So it is in the Philippines.
3. This Court then is left with no choice. The Constitution as the fundamental law
overrides any legislative or executive, act that runs counter to it. In any case therefore
where it can be demonstrated that the challenged statutory provision as petitioner
here alleges fails to abide by its command, then this Court must so declare and
adjudge it null. The injury thus is centered on the question of whether the imposition of
a higher tax rate on taxable net income derived from business or profession than on
compensation is constitutionally infirm.
4, The difficulty confronting petitioner is thus apparent. He alleges arbitrariness. A mere
allegation, as here. does not suffice. There must be a factual foundation of such
unconstitutional taint. Considering that petitioner here would condemn such a provision
as void or its face, he has not made out a case. This is merely to adhere to the
authoritative doctrine that were the due process and equal protection clauses are

invoked, considering that they arc not fixed rules but rather broad standards, there is a
need for of such persuasive character as would lead to such a conclusion. Absent such a
showing, the presumption of validity must prevail. 18
5. It is undoubted that the due process clause may be invoked where a taxing statute is
so arbitrary that it finds no support in the Constitution. An obvious example is where it
can be shown to amount to the confiscation of property. That would be a clear abuse of
power. It then becomes the duty of this Court to say that such an arbitrary act
amounted to the exercise of an authority not conferred. That properly calls for the
application of the Holmes dictum. It has also been held that where the assailed tax
measure is beyond the jurisdiction of the state, or is not for a public purpose, or, in case
of a retroactive statute is so harsh and unreasonable, it is subject to attack on due
process grounds. 19
6. Now for equal protection. The applicable standard to avoid the charge that there is a
denial of this constitutional mandate whether the assailed act is in the exercise of the
lice power or the power of eminent domain is to demonstrated that the governmental
act assailed, far from being inspired by the attainment of the common weal was
prompted by the spirit of hostility, or at the very least, discrimination that finds no
support in reason. It suffices then that the laws operate equally and uniformly on all
persons under similar circumstances or that all persons must be treated in the same
manner, the conditions not being different, both in the privileges conferred and the
liabilities imposed. Favoritism and undue preference cannot be allowed. For the
principle is that equal protection and security shall be given to every person under
circumtances which if not Identical are analogous. If law be looked upon in terms of
burden or charges, those that fall within a class should be treated in the same fashion,
20
whatever restrictions cast on some in the group equally binding on the rest." That
same formulation applies as well to taxation measures. The equal protection clause is,
of course, inspired by the noble concept of approximating the Ideal of the laws benefits
being available to all and the affairs of men being governed by that serene and impartial
uniformity, which is of the very essence of the Idea of law. There is, however, wisdom,
as well as realism in these words of Justice Frankfurter: "The equality at which the 'equal
protection' clause aims is not a disembodied equality. The Fourteenth Amendment
enjoins 'the equal protection of the laws,' and laws are not abstract propositions. They
do not relate to abstract units A, B and C, but are expressions of policy arising out of
specific difficulties, address to the attainment of specific ends by the use of specific
remedies. The Constitution does not require things which are different in fact or opinion
21
to be treated in law as though they were the same." Hence the constant reiteration of
the view that classification if rational in character is allowable. As a matter of fact, in a
22
leading case of Lutz V. Araneta, this Court, through Justice J.B.L. Reyes, went so far as
to hold "at any rate, it is inherent in the power to tax that a state be free to select the
subjects of taxation, and it has been repeatedly held that 'inequalities which result from
a singling out of one particular class for taxation, or exemption infringe no constitutional
23
limitation.'"

7. Petitioner likewise invoked the kindred concept of uniformity. According to the

24
Constitution: "The rule of taxation shag be uniform and equitable." This requirement
25
is met according to Justice Laurel in Philippine Trust Company v. Yatco, decided in
1940, when the tax "operates with the same force and effect in every place where the
26
subject may be found. " He likewise added: "The rule of uniformity does not call for
27
perfect uniformity or perfect equality, because this is hardly attainable." The problem
of classification did not present itself in that case. It did not arise until nine years later,
when the Supreme Court held: "Equality and uniformity in taxation means that all
taxable articles or kinds of property of the same class shall be taxed at the same rate.
The taxing power has the authority to make reasonable and natural classifications for
28
purposes of taxation, ... . As clarified by Justice Tuason, where "the differentiation"
complained of "conforms to the practical dictates of justice and equity" it "is not
29
discriminatory within the meaning of this clause and is therefore uniform." There is
quite a similarity then to the standard of equal protection for all that is required is that
the tax "applies equally to all persons, firms and corporations placed in similar
30
situation."
8. Further on this point. Apparently, what misled petitioner is his failure to take into
consideration the distinction between a tax rate and a tax base. There is no legal
objection to a broader tax base or taxable income by eliminating all deductible items
and at the same time reducing the applicable tax rate. Taxpayers may be classified into
different categories. To repeat, it. is enough that the classification must rest upon
substantial distinctions that make real differences. In the case of the gross income
taxation embodied in Batas Pambansa Blg. 135, the, discernible basis of classification is
the susceptibility of the income to the application of generalized rules removing all
deductible items for all taxpayers within the class and fixing a set of reduced tax rates to
be applied to all of them. Taxpayers who are recipients of compensation income are set
apart as a class. As there is practically no overhead expense, these taxpayers are e not
entitled to make deductions for income tax purposes because they are in the same
situation more or less. On the other hand, in the case of professionals in the practice of
their calling and businessmen, there is no uniformity in the costs or expenses necessary
to produce their income. It would not be just then to disregard the disparities by giving
all of them zero deduction and indiscriminately impose on all alike the same tax rates on
the basis of gross income. There is ample justification then for the Batasang Pambansa
to adopt the gross system of income taxation to compensation income, while continuing
the system of net income taxation as regards professional and business income.
9. Nothing can be clearer, therefore, than that the petition is without merit, considering
the (1) lack of factual foundation to show the arbitrary character of the assailed
31
provision; (2) the force of controlling doctrines on due process, equal protection, and
uniformity in taxation and (3) the reasonableness of the distinction between
compensation and taxable net income of professionals and businessman certainly not a
suspect classification,
WHEREFORE, the petition is dismissed. Costs against petitioner.

EN BANC
[G.R. No. 122250 & 122258. July 21, 1997]
EDGARDO C. NOLASCO, petitioner, vs. COMMISSION ON ELECTIONS, MUNICIPAL
BOARD OF CANVASSERS, MEYCAUAYAN, BULACAN, and EDUARDO A.
ALARILLA, respondents.

A. Virgilio Luna y Valderama 1. PYTHOM (sic) Cal. 347 SN 26946 with six (6) Rounds of Ammo.
2. INGRAM M10 Cal. 45 MP with Suppressor SN: 45457 with two (2)
Mags and 54 Rounds of Ammo.

FLORENTINO P. BLANCO, petitioner, vs. COMMISSION ON ELECTIONS and EDUARDO A.

ALARILLA, respondents.

B. Raymundo Bahala y Pon -

DECISION

1. HKMP5 Sn. C334644 with two (2) Mags and 47 Rounds of Ammo.

PUNO, J.:

C.Roberto Santos y Sacris -

First, we rewind the facts. The election for mayor of Meycauayan, Bulacan was
held on May 8, 1995. The principal protagonists were petitioner Florentino P. Blanco
and private respondent Eduardo A. Alarilla. Blanco received 29,753 votes, while Alarilla
[1]
got 23,038 votes. Edgardo Nolasco was elected Vice-Mayor with 37,240 votes.

D. Melchor Cabanero y Oreil -

On May 9, 1995, Alarilla filed with the COMELEC a petition to disqualify Blanco. He
alleged:

1. Armscor 12 Gauge with three (3) Rounds of Ammo.

xxxxxxxxx
4. Based on intelligence reports that respondent was maintaining his own `private army'
at his aforesaid resident, P/Insp. Ronaldo O. Lee of the Philippine National Police
assigned with the Intelligence Command at Camp Crame, applied for and was granted
search warrant no. 95-147 by Branch 37 of the Regional Trial Court of Manila on 5 May
1995. A copy of the said search warrant is attached as Annex "A" hereof.
5. In compliance with said search warrant no. 95-147, an elite composite team of the
PNP Intelligence Command, Criminal Investigation Service (CIS), and Bulacan Provincial
Command, backed up by the Philippine National Police Special Action Force,
accompanied by mediamen who witnessed and recorded the search by video and still
cameras, raided the house of respondent Florentino Blanco at his stated address at
Bancal, Meycauayan, Bulacan.
6. Enclosed as Annex "A-1" is a video tape taken of the proceedings during the raid.
7. The composite team was able to enter the said premises of respondent Florentino
Blanco where they conducted a search of the subject firearms and ammunition.
8. The search resulted in the arrest of six (6) men who were found carrying various high
powered firearms without any license or authority to use or possess such long arms.
These persons composing respondent's `private army,' and the unlicensed firearms are
as follows:

1. Smith and Wesson 357 Magnum Sn: 522218 with six (6) Rounds of
Ammo.

E. Edgardo Orteza y Asuncion 1. Paltik Cal. 38 Rev with six (6) Rounds of Ammo.
F. Francisco Libari y Calimag 1. Paltik Cal. 38 SN: 36869
Copies of the inventory receipts are hereto attached as Annexes "B" to "B-5" hereof.
9. During the search, members of the composite team saw through a large clear glass
window, respondent's Galil assault rifle on a sofa inside a closed room of the subject
premises.
10. Not allowed entry thereto by respondent and his wife, the members of the
composite police-military team applied for the issuance of a second search warrant
(Annex "B-6") so that they could enter the said room to seize the said firearm.
11. While waiting for the issuance of the second search warrant, respondent's wife and
respondent's brother, Mariano Blanco, claiming to be the campaign manager of
respondent in the Nationalist People's Coalition Party, asked permission to enter the
locked room so they could withdraw money in a vault inside the locked room to pay
their watchers, and the teachers of Meycauayan in the 8 May 1995 elections.

12. For reasons not known to petitioner, Mrs. Florentino Blanco and Mariano Blanco,
were allowed to withdraw ten (10) large plastic bags from the vault.

Luisa de los Reyes Cruz stating that when she went to her precinct to vote, her name
was already voted upon by another person. This entry was noted by Leticia T. Villanco,
Poll Chairman; Estelita Artajo, - Poll Clerk; and Nelson John Nito - Poll Member.

13. When the said PNP composite team examined the ten (10) black plastic bags, they
found out that each bag contained ten (10) shoe boxes. Each shoe box when examined
contained 200 pay envelopes, and each pay envelope when opened contained the
amount of P1,000.00. When questioned, respondent's brother Mariano Blanco and
respondent's wife, admitted to the raiding team that the total amount of money in the
ten (10) plastic bags is P10,000,000.00.

18. Earlier before the election, respondent used his tremendous money to get in the
good graces of the local Comelec Registrar, who was replaced by this Office upon the
petition of the people of Meycauayan.Attached as Annex "H" hereof is an article in the 3
May 1995 issue of Abante entitled `1 M Suhol sa Comelec Registrar.'

14. The labels found in the envelope shows that the money were intended as
respondent's bribe money to the teachers of Meycauayan. Attached as Annex "C" is the
cover of one of the shoe boxes containing the inscription that it is intended to the
teachers of Brgy. Lawa, Meycauayan, Bulacan.

19. The second search warrant on respondent's residence yielded to more firearms and
thousands of rounds of ammunition. These guns were used by respondent to terrorize
the population and make the people afraid to complain against respondent's massive
vote buying and cheating in today's elections. Respondent's bribery of the teachers
ensured the implementation of his vote-buying ballot box switching, impersonations,
and other cheating schemes.

15. On election day 8 May 1995, respondent perpetrated the most massive vote-buying
activity ever in the history of Meycauayan politics. Attached as Annex "D" is the
envelope where this P10,000,000.00 was placed in 100 peso denominations totalling
one thousand pesos per envelope with the inscription `VOTE!!! TINOY.'

Attached as Annexes `I-1' to I-2' are the pertinent Receipts of the guns and ammunitions
seized from respondent. Attached as Annex "J" is a Certification to the same effect.

This massive vote-buying activity was engineered by the respondent through his
organization called `MTB' or `MOVEMENT FOR TINOY BLANCO VOLUNTEERS.' The
chairman of this movement is respondent's brother, Mariano P. Blanco, who admitted
to the police during the raid that these money were for the teachers and watchers of
Meycauayan, Bulacan.

20. The above acts committed by respondent are clear grounds for disqualification
under Sec. 68 of the Omnibus Election Code for giving money to influence, induce or
corrupt the voters or public officials performing election functions; for committing acts
of terrorism to enhance his candidacy; and for spending in his election campaign an
amount in excess of that allowed by the Election Code. There are only 97,000 registered
voters in Meycauayan versus respondent's expenses of at least P10,000,000.00 as
admitted above. (Emphasis supplied).

Attached as Annex "E" hereof is an MTB ID issued to one Armando Bulan of Precinct 77A, Brgy. Jasmin, Bancal, Meycauayan, Bulacan. You will note that the ID is perforated in
the middle. The purpose is for the voter to tear the office copy and return it to
respondent's headquarters to receive the balance of the P500.00 of the bribe money
after voting for respondent during the elections. The voter will initially be given a downpayment of P500.00.
16. This massive vote-buying was also perpetrated by respondent thru the familiar use
of flying voters. Attached as Annex "F" hereof is a copy of the Police Blotter dated 8 May
1995 showing that six (6) flying voters were caught in different precincts of
Meycauayan, Bulacan, who admitted after being caught and arrested that they were
paid P200.00 to P300.00 by respondent and his followers, to vote for other voters in the
voter's list.
17. Not satisfied, and with his overflowing supply of money, respondent used another
scheme as follows. Respondent's paid voter will identify his target from the list of voter
and will impersonate said voter in the list and falsify his signature.
Attached as Annex "G" hereof is the Minutes of Voting and Counting of Votes in Precinct
No. 26, Brgy. Calvario, Meycauayan, Bulacan. Annex "G-1" is the statement of one Ma.

On May 15, 1995, Alarilla filed a Very Urgent Ex Parte Motion to Suspend
Proclamation. The COMELEC (First Division) granted the motion after finding that there
was a "probable commission of election offenses which are grounds for disqualification
pursuant to the provisions of section 68 of the Omnibus Election Code (BP 881), and the
evidence in support of disqualification is strong." It directed the Municipal Board of
Canvassers "to complete the canvassing of election returns of the municipality of
Meycauayan, but to suspend proclamation of respondent Florentino P. Blanco should he
obtain the winning number of votes for the position of Mayor of Meycauayan, Bulacan
until such time when the petitions for disqualification against him shall have been
resolved."
On May 25, 1995, Blanco filed a Motion to Lift or Set Aside the Order suspending
his proclamation. On May 29, 1995, he filed his Answer to the petition to disqualify him.
On May 30, 1995, the COMELEC (First Division) heard the petition to disqualify
[2]
Blanco. The parties thereafter submitted their position papers. Blanco even replied to
the position paper of Alarilla on June 9, 1995.
On August 15, 1995, the COMELEC (First Division) disqualified Blanco on the
[3]
ground of vote-buying, viz.:

xxxxxxxxx
"WHEREFORE, premises considered, the Commission (First Division) RESOLVES to
DISQUALIFY Respondent Florentino P. Blanco as a candidate for the Office of Mayor of
Meycauayan, Bulacan in the May 8, 1995 elections for having violated Section 261 (a) of
the Omnibus Election Code. The Order suspending the proclamation of herein
Respondent is now made PERMANENT. The Municipal Board of Canvassers of
Meycauayan, Bulacan shall immediately reconvene and, on the basis of the completed
canvass of the election returns, determine the winner out of the remaining qualified
candidates who shall be immediately proclaimed.
SO ORDERED."
Blanco moved for reconsideration on August 19, 1995 in the COMELEC en
[4]
banc. Nolasco, as vice mayor, intervened in the proceedings. He moved for
reconsideration of that part of the resolution directing the Municipal Board of
Canvassers to "immediately reconvene and, on the basis of the completed canvass of
the election returns, determine the winner out of the remaining qualified candidates
who shall be immediately proclaimed." He urged that as vice-mayor he should be
declared mayor in the event Blanco was finally disqualified. The motions were heard on
September 7, 1995. The parties were allowed to file their memoranda with right of
reply. On October 23, 1995, the COMELEC en banc denied the motions for
reconsideration.
[5]

In this petition for certiorari, Blanco contends:

xxxxxxxxx
18. Respondent COMELEC En Banc committed grave abuse of discretion amounting to
lack or excess of jurisdiction and acted arbitrarily in affirming en toto and adopting as its
own the majority decision of the First Division in that:
18.1 It upheld the validity of the May 17, 1995 order suspending proclamation of
Petitioner Blanco herein as the winning candidate for Mayor of Meycauayan without the
benefit of any notice or hearing in gross and palpable violation of Blanco's constitutional
right to due process of law.
18.2 It violated the provisions of COMELEC Res. No. 2050 as amended, prescribing the
procedure for disposing of disqualification cases arising out of the prohibited acts
mentioned in Sec. 68 of the Omnibus Election Code, which Resolution this Honorable
Tribunal explicitly sanctioned in the case of Lozano vs. Yorac. Moreover, it (COMELEC)
violated Blanco's right to equal protection of the laws by setting him apart from other
respondents facing similar disqualification suits whose case were referred by COMELEC
to the Law Department pursuant to Com. Res. No. 2050 and ordering their proclamation
-- an act which evidently discriminated against Petitioner Blanco herein.

18.3 It decided Petitioner Blanco's disqualification case in a SUMMARY PROCEEDING in

violation of law and the precedents which consistently hold that questions of VOTEBUYING, terrorism and similar such acts should be resolve in a formal election protest
where the issue of vote buying is subjected to a full-dress hearing instead of disposing of
the issue in a summary proceeding;
18.4 It declared Petitioner Blanco as having been involved in a conspiracy to engage in
VOTE-BUYING without that minimum quantum of proof required to establish a
disputable presumption of vote-buying in gross and palpable violation of the provisions
of Section 28, Rep. Act. 6646;
18.5 It ordered the proclamation of a SECOND PLACER as the duly elected Mayor of
Meycauayan, Bulacan, in gross violation and utter disregard of the doctrine laid down by
this Honorable Supreme Court in the case of LABO vs. COMELEC which was reiterated
only recently in the case of Aquino vs. Syjuco.
[6]

On the other hand, Nolasco contends in his petition for certiorari that he should
be declared as Mayor in view of the disqualification of Blanco. He cites section 44 of R.A.
No. 7160 otherwise known as the Local Government Code of 1991 and our decision in
[7]
Labo vs. COMELEC.
We shall first resolve the Blanco petition.
Blanco was not denied due process when the COMELEC (First Division) suspended
his proclamation as mayor pending determination of the petition for disqualification
against him.Section 6 of R.A. No. 6646 and sections 4 and 5 of the Rule 25 of the
Comelec Rules of Procedure merely require that evidence of guilt should be strong to
justify the COMELEC in suspending a winning candidate's proclamation. It ought to be
emphasized that the suspension order is provisional in nature and can be lifted when
the evidence so warrants. It is akin to a temporary restraining order which a court can
issue ex-parte under exigent circumstances.
In any event, Blanco was given all the opportunity to prove that the evidence on
his disqualification was not strong. On May 25, 1995, he filed a Motion to Lift or Set
Aside the Order suspending his proclamation. On May 29, 1995, he filed his Answer to
the petition to disqualify him. The COMELEC heard the petition. Blanco thereafter
submitted his position paper and reply to Alarilla's position paper. The COMELEC
considered the evidence of the parties and their arguments and thereafter affirmed his
disqualification. The hoary rule is that due process does not mean prior hearing but only
an opportunity to be heard. The COMELEC gave Blanco all the opportunity to be heard.
[8]
Petitions for disqualification are subject to summary hearings.
Blanco also faults the COMELEC for departing from the procedure laid down in
COMELEC Resolution 2050 as amended, in disqualification cases. The resolution
pertinently provides:
xxxxxxxxx

Where a similar complaint is filed after election but before proclamation of the
respondent candidate the complaint shall, nevertheless, be dismissed as a
disqualification case. However, the complaint shall be referred for preliminary
investigation to the Law Department. If, before proclamation, the Law Department
makes a prima facie finding of guilt and the corresponding information has been filed
with the appropriate trial court, the complainant may file a petition for suspension of
the proclamation of the respondent with the court before which the criminal case is
pending and the said court may order the suspension of the proclamation if the
evidence of guilt is strong."
It is alleged that the violation is fatal as it deprived Blanco of equal protection of
our laws.
We do not agree. It cannot be denied that the COMELEC has jurisdiction over
proclamation and disqualification cases. Article IX-C, section 2 of the Constitution
endows the COMELEC the all encompassing power to "enforce and administer all laws
and regulations relative to the conduct of an election x x x." We have long ruled that this
[9]
broad power includes the power to cancel proclamations. Our laws are no less explicit
on the matter. Section 68 of B.P. Blg. 881 (Omnibus Election Code) provides:
"Sec. 68. Disqualifications. - Any candidate who, in an action or protest in which he is a
party is declared by final decision of a competent court guilty of, or found by the
Commission of having (a) given money or other material consideration to influence,
induce or corrupt the voters or public officials performing electoral functions; (b)
committed acts of terrorism to enhance his candidacy; (c) spent in his election campaign
an amount in excess of that allowed by this Code; (d) solicited, received or made any
contribution prohibited under Sections 89, 95, 96, 97 and 104; or (e) violated any of
Sections 80, 83, 85, 86 and 261, paragraphs d, e, k, v, and cc, sub-paragraph 6, shall be
disqualified from continuing as a candidate, or if he has been elected, from holding the
office. Any person who is a permanent resident of or an immigrant to a foreign country
shall not be qualified to run for an elective office under this Code, unless said person has
waived his status as permanent resident or immigrant of a foreign country in
accordance with the residence requirement provided for in the elections laws."
Section 6 of R.A. No. 6646 likewise provides:
"Sec. 6. Effect of Disqualification Case - Any candidate who has been declared by final
judgment to be disqualified shall not be voted for, and the votes cast for him shall not
be counted. If for any reason a candidate is not declared by final judgment before an
election to be disqualified and he is voted for and receives the winning number of votes
in such election, the Court or Commission shall continue with the trial and hearing of
the action, inquiry or protest and, upon motion of the complainant or any intervenor,
may during the pendency thereof order the suspension of the proclamation of such
candidate whenever the evidence of his guilt is strong."

Despite these laws and existing jurisprudence, Blanco contends that COMELEC
must follow the procedure in Resolution No. 2050 as amended. We hold that COMELEC
cannot always be straitjacketed by this procedural rule. The COMELEC has explained
that the resolution was passed to take care of the proliferation of disqualification cases
at that time. It deemed it wise to delegate its authority to its Law Department as partial
solution to the problem. The May 8, 1995 elections, however, did not result in a surfeit
of disqualification cases which the COMELEC cannot handle. Hence, its decision to
resolve the disqualification case of Blanco directly and without referring it to its Law
Department is within its authority, a sound exercise of its discretion. The action of the
COMELEC is in accord with Section 28 of R.A. No. 6646, viz:
"x x x.
"SEC. 28. Prosecution of Vote-Buying and Vote-selling. - The presentation of a complaint
for violations of paragraph (a) or (b) of Section 261 of Batas Pambansa Blg. 881
supported by affidavits of complaining witness attesting to the offer or promise by or of
the voter's acceptance of money or other consideration from the relatives, leaders or
sympathizers of a candidate, shall be sufficient basis for an investigation to be
immediately conducted by the Commission, directly or through its duly authorized legal
officers under Section 68 or Section 265 of said Batas Pambansa Blg. 881. (emphasis
supplied)
"x x x."
Indeed, even Commissioner Maambong who dissented from the majority ruling,
clings to the view that "Resolution No. 2050 cannot divest the Commission of its duty to
resolve disqualification cases under the clear provision of section 6 of R.A. No.
[10]
6646." Clearly too, Blanco's contention that he was denied equal protection of the
law is off-line. He was not the object of any invidious discrimination. COMELEC assumed
direct jurisdiction over his disqualification case not to favor anybody but to discharge its
constitutional duty of disposing the case in a fair and as fast a manner as possible.
Blanco also urges that COMELEC erred in using summary proceedings to resolve his
disqualification case. Again, the COMELEC action is safely anchored on section 4 of its
Rules of Procedure which expressly provides that petitions for disqualification "shall be
heard summarily after due notice." Vote-buying has its criminal and electoral aspects. Its
criminal aspect to determine the guilt or innocence of the accused cannot be the subject
of summary hearing. However, its electoral aspect to ascertain whether the offender
should be disqualified from office can be determined in an administrative proceeding
that is summary in character.
The next issue is whether there is substantial evidence to prove the vote buying
activities of Blanco. The factual findings of the COMELEC (First Division) are as
[11]
follows:
"x x x

"Respondent argues that the claim of vote-buying has no factual basis because the
affidavits and sworn statements admitted as evidence against him are products of
hearsay; inadmissible because of the illegal searches; they violate the Rule of Res Inter
Alios Acta and the offense of vote-buying requires consummation.
We are not impressed.
A studied reading of the affidavits [Respondent's affidavit is unsigned] attached to the
Reply of the Respondent to the Position Paper of the Petitioner [Annexes 1, 2 and 3]
would reveal that they are in the nature of general denials emanating from individuals
closely associated or related to respondent Blanco.
The same holds true with the affidavits attached to Respondent's Position Paper
[Annexes 1, 2, 3 and 4]. Said affidavits were executed by Blanco's political leaders and
private secretary.

In People of the Philippines vs. Rolando Precioso, et al., G.R. No. 95890, May 12, 1993,
221 SCRA 1993, the Supreme Court observed that,
`We have consistently ruled that denials if unsubstantiated by clear and convincing
evidence are negative and self-serving evidence which deserves no weight in law and
cannot be given greater evidentiary weight over the testimony of credible
witnesses. Ergo, as between the positive declarations of the prosecution witness and
the negative statements of the accused, the former deserves more credence." [page
754].'
However, Respondent conveniently resorts to section 33, Rule 130 of the Revised Rules
of Court which states that a declaration of an accused acknowledging his guilt of the
offense charged, or of any offense necessarily included herein, may be given in evidence
against him [affiants who executed Exhibits E-1 to E-10] but not against Respondent.
There is no merit in this contention.

On the other hand, the affidavit of Romeo Burgos [Exhibit "E-1"] is rich in detail as to
how the alleged vote-buying was conducted.
Moreover, the same is corroborated by object evidence in the nature of MTB
[Movement for Tinoy Blanco] cards which were in the possession of the affiants and
allegedly used as a means to facilitate the vote-buying scheme.
There are also admissions of certain individuals who received money to vote for
Respondent [Annexes "E-2", "E-3", "E-4", "E-5", "E-6", "E-7", "E-8", "E-9" and "E-10"].
On the day of the elections, two individuals were apprehended for attempting to vote
for Respondent when they allegedly are not registered voters of Meycauayan. A criminal
complaint for violation of section 261 [2] of BP 881 was filed by P/Sr. Inspector Alfred S.
Corpus on May 9, 1995 with the Municipal Trial Court of Bulacan. The same was
docketed as Criminal Case 95-16996 [Exhibit F-2].
Again, similar pay envelopes with money inside them were found in the possession of
the suspected flying voters.
The incident was corroborated by Adriano Llorente in his affidavit narrating the same
[Exhibit "F-1"]. Llorente, a poll watcher of Petitioner, was the one who accosted the two
suspected flying voters when the latter attempted to vote despite failing to locate their
names in the voter's list.
From this rich backdrop of detail, We are disappointed by the general denial offered by
Respondent. In People of the Philippines vs. Navarro, G.R. No. 96251, May 11, 1993, 222
SCRA 684, the Supreme Court noted that "Denial is the weakest defense' [page 692].

The affiants are not the accused. Their participation in the herein case is in the nature of
witnesses who have assumed the risk of being subsequently charged with violating
Section 261 [1] of BP 881. In fact, their affidavits were sought by the Petitioner and not
by any law enforcement agency. Even Respondent admits this finding when he filed his
Reply to Petitioner's Position Paper and Motion to Refer for Preliminary Investigation
and Filing of Information in Court against the Persons Who Executed Exhibits E-1 to E-10
for Having Admitted Commission of Election Offense. If they were the accused, why file
the motion? Would not this be redundant if not irrelevant?
xxx
Another telling blow is the unexplained money destined for the teachers. Why such a
huge amount? Why should the Respondent, a mayoralty candidate, and according to his
own admission, be giving money to teachers a day before the elections? What were the
peso bills doing in pay envelopes with the inscription "VOTE!!! TINOY", and kept in shoe
boxes with the word "Teachers" written on the covers thereof?
There is also something wrong with the issuance of the aforementioned MTB cards
when one considers the testimony of Burgos that more or less 50,000 of these cards,
which is equivalent to more or less 52% of the 97,000 registered voters of Meycauayan,
Bulacan, were printed by respondent; that there are only 443 precincts in Meycauayan;
that under the law, a candidate is allowed only one watcher per polling place and
canvassing area; and, finally, that there is no explanation at all by the respondent as to
what these "watchers" did in order to get paid P300.00 each.
xxx

Respondent also avers that for an allegation of vote-buying to prosper, the act of giving
must be consummated.

(c) A tie between or among the highest ranking sangguniang members shall be resolved
by the drawing of lots.

Section 281 [a] of BP 881 states "any person who gives, offers, or promises money x x x."
Section 28 of RA 6646 also states that "the giver, offeror, the promisor as well as the
solicitor, recipient and conspirator referred to in paragraphs [a] and [b] of section 261 of
Batas Pambansa Blg. 881 shall be liable as principals: x x x.

(d) The successors as defined herein shall serve only the unexpired terms of their
predecessors.

While the giving must be consummated, the mere act of offering or promising
something in consideration for someone's vote constitutes the offense of vote-buying.
In the case at bar, the acts of offering and promising money in consideration for the
votes of said affiants is sufficient for a finding of the commission of the offense of votebuying."
These factual findings were affirmed by the COMELEC en banc against the lone
dissent of Commissioner Maambong.
There is an attempt to discredit these findings. Immediately obvious in the effort is
the resort to our technical rules of evidence. Again, our ingrained jurisprudence is that
technical rules of evidence should not be rigorously applied in administrative
proceedings especially where the law calls for the proceeding to be summary in
character. More importantly, we cannot depart from the settled norm of reviewing
decisions of the COMELEC, i.e., that "this Court cannot review the factual findings of the
COMELEC absent a grave abuse of discretion and a showing of arbitrariness in its
[12]
decision, order or resolution."
We now come to the petition of Nolasco that he should be declared as mayor in
[13]
the event Blanco is finally disqualified. We sustain the plea. Section 44, Chapter 2 of
the Local Government Code of 1991 (R.A. No. 7160) is unequivocal, thus:
"x x x
"SEC. 44. Permanent Vacancies in the Offices of the Governor, Vice Governor, Mayor,
and Vice Mayor.- (a) If a permanent vacancy occurs in the office of the governor or
mayor, the vice governor or vice mayor concerned shall become the governor or
mayor. If a permanent vacancy occurs in the offices of the governor, vice governor,
mayor, or vice mayor, the highest ranking sanggunian member or, in case of his
permanent inability, the second highest ranking sanggunian member, shall become the
governor, vice governor, mayor or vice mayor, as the case may be. Subsequent
vacancies in the said office shall be filled automatically by the other sanggunian
members according to their ranking as defined herein.
(b) If a permanent vacancy occurs in the office of the punong barangay, the highest
ranking sanggunian barangay member or, in case of his permanent inability, the second
highest ranking sanggunian member, shall become the punong barangay.

For purposes of this Chapter, a permanent vacancy arises when an elective local official
fills a higher vacant office, refuses to assume office, fails to qualify, dies, is removed
from office, voluntarily resigns, or is otherwise permanently incapacitated to discharge
the functions of his office.
For purposes of succession as provided in this Chapter, ranking in the sanggunian shall
be determined on the basis of the proportion of votes obtained by each winning
candidate to the total number of registered voters in each distribution the immediately
preceding election."
In the same vein, Article 83 of the Rules and Regulations Implementing, the Local
Government Code of 1991 provides:
"x x x.
"ART. 83. Vacancies and Succession of Elective Local Officials.- (a) What constitutes
permanent vacancy - A permanent vacancy arises when an elective local official fills a
higher vacant office, refuses to assume office, fails to qualify, dies, is removed from
office, voluntarily resigns, or is otherwise permanently incapacitated to discharge the
functions of his office.
(b) Permanent vacancies in the offices of the governor, vice governor, mayor and vice
mayor (1) If a permanent vacancy occurs in the office of the governor or mayor, the vice
governor or vice mayor concerned shall ipso facto become the governor or mayor. If a
permanent vacancy occurs in the offices of the governor, vice governor, mayor, or vice
mayor, the highest ranking sanggunian member or, in case of his permanent inability,
the second highest ranking sanggunian member, shall ipso facto become the governor,
vice governor, mayor or vice mayor, as the case may be. Subsequent vacancies in the
said office shall be filled automatically by the other sanggunian members according to
their ranking as defined in this Article."
Our case law is now settled that in a mayoralty election, the candidate who
obtained the second highest number of votes, in this case Alarilla, cannot be proclaimed
winner in case the winning candidate is disqualified. Thus, we reiterated the rule in the
[14]
fairly recent case of Reyes v. COMELEC, viz:
"x x x x x x x x x

"We likewise find no grave abuse of discretion on the part of the COMELEC in denying
petitioner Julius O. Garcia's petition to be proclaimed mayor in view of the
disqualification of Renato U. Reyes.
"That the candidate who obtains the second highest number of votes may not be
proclaimed winner in case the winning candidate is disqualified is now settled. The
doctrinal instability caused by see-sawing rulings has since been removed. In the latest
ruling on the question, this Court said:
To simplistically assume that the second placer would have received the other votes
would be to substitute our judgment for the mind of the voter. The second placer is just
that, a second placer. He lost the elections. He was repudiated by either a majority or
plurality of voters. He could not be considered the first among qualified candidates
because in a field which excludes the disqualified candidate, the conditions would have
substantially changed. We are not prepared to extrapolate the results under the
circumstances.
"Garcia's plea that the votes cast for Reyes be invalidated is without merit. The votes
cast for Reyes are presumed to have been cast in the belief that Reyes was qualified and
for that reason can not be treated as stray, void, or meaningless. The subsequent finding
that he is disqualified cannot retroact to the date of the elections so as to invalidate the
votes cast for him."
Consequently, respondent COMELEC committed grave abuse of discretion insofar
as it failed to follow the above doctrine, a descendant of our ruling in Labo v.
[15]
COMELEC.
A final word. The dispute at bar involves more than the mayoralty of the municipality of
Meycauyan, Bulacan. It concerns the right of suffrage which is the bedrock of
republicanism. Suffrage is the means by which our people express their sovereign
judgment. Its free exercise must be protected especially against the purchasing power
[16]
of the peso. As we succinctly held in People v. San Juan, "each time the enfranchised
citizen goes to the polls to assert this sovereign will, that abiding credo of republicanism
is translated into living reality. If that will must remain undefiled at the starting level of
its expression and application, every assumption must be indulged in and every
guarantee adopted to assure the unmolested exercise of the citizen's free choice. For to
impede, without authority valid in law, the free and orderly exercise of the right of
suffrage, is to inflict the ultimate indignity on the democratic process."
IN VIEW WHEREOF, the resolution of the respondent COMELEC en banc dated
October 23, 1995 is affirmed with the modification that petitioner Edgardo C. Nolasco is
adjudged as Mayor of Meycauyan, Bulacan in view of the disqualification of Florentino
P. Blanco. No costs.
SO ORDERED.

Narvasa, C.J., Regalado, Davide, Jr., Romero, Melo, Vitug, Mendoza and Francisco,
JJ., concur.
Bellosillo, J., please see Concurring and Dissenting Opinion.
Hermosisima, Jr., and Torres, Jr., JJ., on official leave.
Kapunan, J., on leave.
Padilla, J., no part on leave during deliberation.
Panganiban, J., no part. Former law office was counsel of petitioner Blanco.

Republic of the Philippines

SUPREME COURT
Baguio City
EN BANC
G.R. No. 132922 April 21, 1998
TELECOMMUNICATIONS AND BROADCAST ATTORNEYS OF THE PHILIPPINES, INC. and
GMA NETWORK, INC., petitioners,
vs.
THE COMMISSION ON ELECTIONS, respondent.
MENDOZA, J.:
1

In Osmea v. COMELEC, G.R. No. 132231, decided March 31, 1998, we upheld the
validity of 11(b) of R.A. No. 6646 which prohibits the sale or donation of print space or
air time for political ads, except to the Commission on Elections under 90, of B.P. No.
881, the Omnibus Election Code, with respect to print media, and 92, with respect to
broadcast media. In the present case, we consider the validity of 92 of B.P. Blg. No. 881
against claims that the requirement that radio and television time be given free takes
property without due process of law; that it violates the eminent domain clause of the
Constitution which provides for the payment of just compensation; that it denies
broadcast media the equal protection of the laws; and that, in any event, it violates the
terms of the franchise of petitioner GMA Network, Inc.
Petitioner Telecommunications and Broadcast Attorneys of the Philippines, Inc. is an
organization of lawyers of radio and television broadcasting companies. They are suing
as citizens, taxpayers, and registered voters. The other petitioner, GMA Network, Inc.,
operates radio and television broadcasting stations throughout the Philippines under a
franchise granted by Congress.
Petitioners challenge the validity of 92 on the ground (1) that it takes property without
due process of law and without just compensation; (2) that it denies radio and television
broadcast companies the equal protection of the laws; and (3) that it is in excess of the
power given to the COMELEC to supervise or regulate the operation of media of
communication or information during the period of election.
The Question of Standing
At the threshold of this suit is the question of standing of petitioner
Telecommunications and Broadcast Attorneys of the Philippines, Inc. (TELEBAP). As
already noted, its members assert an interest as lawyers of radio and television
broadcasting companies and as citizens, taxpayers, and registered voters.

In those cases in which citizens were authorized to sue, this Court upheld their
standing in view of the "transcendental importance" of the constitutional question
raised which justified the granting of relief. In contrast, in the case at bar, as will
presently be shown, petitioner's substantive claim is without merit. To the extent,
therefore, that a party's standing is determined by the substantive merit of his case or
preliminary estimate thereof, petitioner TELEBAP must be held to be without standing.
Indeed, a citizen will be allowed to raise a constitutional question only when he can
show that he has personally suffered some actual or threatened injury as a result of the
allegedly illegal conduct of the government; the injury fairly is fairly traceable to the
challenged action; and the injury is likely to be redressed by a favorable
3
action. Members of petitioner have not shown that they have suffered harm as a result
of the operation of 92 of B.P. Blg. 881.
Nor do members of petitioner TELEBAP have an interest as registered voters since this
case does not concern their right of suffrage. Their interest in 92 of B.P. Blg. 881 should
be precisely in upholding its validity.
Much less do they have an interest as taxpayers since this case does not involve the
4
exercise by Congress of its taxing or spending power. A party suing as a taxpayer must
specifically show that he has a sufficient interest in preventing the illegal expenditure of
money raised by taxation and that he will sustain a direct injury as a result of the
enforcement of the questioned statute.
Nor indeed as a corporate entity does TELEBAP have standing to assert the rights of
radio and television broadcasting companies. Standing jus tertii will be recognized only if
it can be shown that the party suing has some substantial relation to the third party, or
that the third party cannot assert his constitutional right, or that the eight of the third
party will be diluted unless the party in court is allowed to espouse the third party's
constitutional claim. None of these circumstances is here present. The mere fact that
TELEBAP is composed of lawyers in the broadcast industry does not entitle them to
bring this suit in their name as representatives of the affected companies.
Nevertheless, we have decided to take this case since the other petitioner, GMA
Network, Inc., appears to have the requisite standing to bring this constitutional
challenge. Petitioner operates radio and television broadcast stations in the Philippines
affected by the enforcement of 92 of B.P. Blg. 881 requiring radio and television
broadcast companies to provide free air time to the COMELEC for the use of candidates
for campaign and other political purposes.
Petitioner claims that it suffered losses running to several million pesos in providing
COMELEC Time in connection with the 1992 presidential election and the 1995
senatorial election and that it stands to suffer even more should it be required to do so
again this year. Petitioner's allegation that it will suffer losses again because it is
required to provide free air time is sufficient to give it standing to question the validity
5
of 92.

Airing of COMELEC Time, a

television stations are hereby amended so as to provide radio or television

time, free of charge, during the period of the campaign. (Sec. 46, 1978 EC)

Reasonable Condition for

Grant of Petitioner's
Franchise
As pointed out in our decision in Osmea v. COMELEC, 11(b) of R.A. No. 6646 and 90
and 92 of the B.P. Blg. 881 are part and parcel of a regulatory scheme designed to
equalize the opportunity of candidates in an election in regard to the use of mass media
for political campaigns. These statutory provisions state in relevant parts:

Thus, the law prohibits mass media from selling or donating print space and air time to
the candidates and requires the COMELEC instead to procure print space and air time
for allocation to the candidates. It will be noted that while 90 of B.P. Blg. 881 requires
the COMELEC to procure print space which, as we have held, should be paid for, 92
states that air time shall be procured by the COMELEC free of charge.
6

xxx xxx xxx

Petitioners contend that 92 of BP Blg. 881 violates the due process clause and the
7
eminent domain provision of the Constitution by taking air time from radio and
television broadcasting stations without payment of just compensation. Petitioners
claim that the primary source of revenue of the radio and television stations is the sale
of air time to advertisers and that to require these stations to provide free air time is to
authorize a taking which is not "a de minimis temporary limitation or restraint upon the
use of private property." According to petitioners, in 1992, the GMA Network, Inc. lost
P22,498,560.00 in providing free air time of one (1) hour every morning from Mondays
to Fridays and one (1) hour on Tuesdays and Thursday from 7:00 to 8:00 p.m. (prime
time) and, in this year's elections, it stands to lose P58,980,850.00 in view of COMELEC'S
requirement that radio and television stations provide at least 30 minutes of prime time
8
daily for the COMELEC Time.

(b) for any newspapers, radio broadcasting or television station, or other mass
media, or any person making use of the mass media to sell or to give free of
charge print space or air time for campaign or other political purposes except
to the Commission as provided under Section 90 and 92 of Batas Pambansa Blg.
881. Any mass media columnist, commentator, announcer or personality who
is a candidate for any elective public office shall take a leave of absence from
his work as such during the campaign period.

Petitioners' argument is without merit, All broadcasting, whether by radio or by

television stations, is licensed by the government. Airwave frequencies have to be
allocated as there are more individuals who want to broadcast than there are
9
frequencies to assign. A franchise is thus a privilege subject, among other things, to
amended by Congress in accordance with the constitutional provision that "any such
franchise or right granted . . . shall be subject to amendment, alteration or repeal by the
10
Congress when the common good so requires."

B.P. Blg. 881, (Omnibus Election Code)

The idea that broadcast stations may be required to provide COMELEC Time free of
charge is not new. It goes back to the Election Code of 1971 (R.A. No. 6388), which
provided:

R.A. No. 6646

Sec. 11. Prohibited Forms of Election Propaganda. In addition to the forms of
election propaganda prohibited under Section 85 of Batas Pambansa Blg. 881,
it shall be unlawful:

Sec. 90. Comelec space. The Commission shall procure space in at least one
newspaper of general circulation in every province or city; Provided,
however, That in the absence of said newspaper, publication shall be done in
any other magazine or periodical in said province or city, which shall be known
as "Comelec Space" wherein candidates can announce their candidacy. Said
space shall be allocated, free of charge, equally and impartially by the
Commission among all candidates within the area in which the newspaper is
circulated. (Sec. 45, 1978 EC).
Sec. 92. Comelec time. The commission shall procure radio and television
time to be known as "Comelec Time" which shall be allocated equally and
impartially among the candidates within the area of coverage of all radio and
television stations. For this purpose, the franchise of all radio broadcasting and

Sec. 49. Regulation of election propaganda through mass media. (a) The
franchise of all radio broadcasting and television stations are hereby amended
so as to require each such station to furnish free of charge, upon request of the
Commission [on Elections], during the period of sixty days before the election
not more than fifteen minutes of prime time once a week which shall be known
as "Comelec Time" and which shall be used exclusively by the Commission to
disseminate vital election information. Said "Comelec Time" shall be considered
as part of the public service time said stations are required to furnish the
Government for the dissemination of public information and education under
their respective franchises or permits.

The provision was carried over with slight modification by the 1978 Election Code (P.D.
No. 1296), which provided:
Sec. 46. COMELEC Time. The Commission [on Elections] shall procure radio
and television time to be known as "COMELEC Time" which shall be allocated
equally and impartially among the candidates within the area of coverage of
said radio and television stations. For this purpose, the franchises of all radio
broadcasting and television stations are hereby amended so as to require such
stations to furnish the Commission radio or television time, free of charge,
during the period of the campaign, at least once but not oftener than every
other day.
Substantially the same provision is now embodied in 92 of B.P. Blg. 881.
Indeed, provisions for COMELEC Tima have been made by amendment of the franchises
of radio and television broadcast stations and, until the present case was brought, such
provisions had not been thought of as taking property without just compensation. Art.
XII, 11 of the Constitution authorizes the amendment of franchises for "the common
good." What better measure can be conceived for the common good than one for free
air time for the benefit not only of candidates but even more of the public, particularly
the voters, so that they will be fully informed of the issues in an election? "[I]t is the
right of the viewers and listeners, not the right of the broadcasters, which is
11
paramount."
Nor indeed can there be any constitutional objection to the requirement that broadcast
stations give free air time. Even in the United States, there are responsible scholars who
believe that government controls on broadcast media can constitutionally be instituted
to ensure diversity of views and attention to public affairs to further the system of free
expression. For this purpose, broadcast stations may be required to give free air time to
12
candidates in an election. Thus, Professor Cass R. Sunstein of the University of Chicago
Law School, in urging reforms in regulations affecting the broadcast industry, writes:
Elections. We could do a lot to improve coverage of electoral campaigns. Most
important, government should ensure free media time for candidates. Almost
all European nations make such provisions; the United States does not. Perhaps
government should pay for such time on its own. Perhaps broadcasters should
have to offer it as a condition for receiving a license. Perhaps a commitment to
provide free time would count in favor of the grant of a license in the first
instance. Steps of this sort would simultaneously promote attention to public
affairs and greater diversity of view. They would also help overcome the
distorting effects of "soundbites" and the corrosive financial pressures faced by
candidates in seeking time on the media. 13
In truth, radio and television broadcasting companies, which are given franchises, do not
own the airwaves and frequencies through which they transmit broadcast signals and
images. They are merely given the temporary privilege of using them. Since a franchise

is a mere privilege, the exercise of the privilege may reasonably be burdened with the
performance by the grantee of some form of public service. Thus, in De Villata
14
v. Stanley, a regulation requiring interisland vessels licensed to engage in the
interisland trade to carry mail and, for this purpose, to give advance notice to postal
authorities of date and hour of sailings of vessels and of changes of sailing hours to
enable them to tender mail for transportation at the last practicable hour prior to the
vessel's departure, was held to be a reasonable condition for the state grant of license.
Although the question of compensation for the carriage of mail was not in issue, the
Court strongly implied that such service could be without compensation, as in fact under
15
Spanish sovereignty the mail was carried free.
16

In Philippine Long Distance Telephone Company v. NTC, the Court ordered the PLDT to
allow the interconnection of its domestic telephone system with the international
gateway facility of Eastern Telecom. The Court cited (1) the provisions of the legislative
franchise allowing such interconnection; (2) the absence of any physical, technical, or
economic basis for restricting the linking up of two separate telephone systems; and (3)
the possibility of increase in the volume of international traffic and more efficient
service, at more moderate cost, as a result of interconnection.
Similarly, in the earlier case of PLDT v. NTC,

17

it was held:

Such regulation of the use and ownership of telecommunications systems is in

the exercise of the plenary police power of the State for the promotion of the
general welfare. The 1987 Constitution recognizes the existence of that power
when it provides:
Sec. 6. The use of property bears a social function, and all
economic agents shall contribute to the common good.
Individuals and private groups, including corporations,
cooperatives, and similar collective organizations, shall have
the right to own, establish, and operate economic
enterprises, subject to the duty of the State to promote
distributive justice and to intervene when the common good
so demands (Article XII).
The interconnection which has been required of PLDT is a form of
"intervention" with property rights dictated by "the objective of government to
promote the rapid expansion of telecommunications services in all areas of the
Philippines, . . . to maximize the use of telecommunications facilities available, .
. . in recognition of the vital role of communications in nation building . . . and
to ensure that all users of the public telecommunications service have access to
all other users of the service wherever they may be within the Philippines at an
acceptable standard of service and at reasonable cost" (DOTC Circular No. 90248). Undoubtedly, the encompassing objective is the common good. The NTC,
as the regulatory agency of the State, merely exercised its delegated authority

to regulate the use of telecommunications networks when it decreed

interconnection.

claim. Expenses for these items will be for the account of the candidates. COMELEC
Resolution No. 2983, 6(d) specifically provides in this connection:

In the granting of the privilege to operate broadcast stations and thereafter supervising
radio and television stations, the state spends considerable public funds in licensing and
18
supervising such stations. It would be strange if it cannot even require the licensees to
render public service by giving free air time.

(d) Additional services such as tape-recording or video-taping of programs, the

preparation of visual aids, terms and condition thereof, and consideration to be
paid therefor may be arranged by the candidates with the radio/television
station concerned. However, no radio/television station shall make any
discrimination among candidates relative to charges, terms, practices or
facilities for in connection with the services rendered.

Considerable effort is made in the dissent of Mr. Justice Panganiban to show that the
production of television programs involves large expenditure and requires the use of
equipment for which huge investments have to be made. The dissent cites the claim of
GMA Network that the grant of free air time to the COMELEC for the duration of the
1998 campaign period would cost the company P52,380,000, representing revenue it
would otherwise earn if the air time were sold to advertisers, and the amount of
P6,600,850, representing the cost of producing a program for the COMELEC Time, or the
total amount of P58,980,850.
The claim that petitioner would be losing P52,380,000 in unrealized revenue from
advertising is based on the assumption that air time is "finished product" which, it is
said, become the property of the company, like oil produced from refining or similar
natural resources after undergoing a process for their production. But air time is not
19
owned by broadcast companies. As held in Red Lion Broadcasting Co. v. F.C.C., which
upheld the right of a party personally attacked to reply, "licenses to broadcast do not
confer ownership of designated frequencies, but only the temporary privilege of using
them." Consequently, "a license permits broadcasting, but the license has no
constitutional right to be the one who holds the license or to monopolize a radio
frequency to the exclusion of his fellow citizens. There is nothing in the First
Amendment which prevents the Government from requiring a licensee to share his
frequency with others and to conduct himself as a proxy or fiduciary with obligations to
present those views and voices which are representative of his community and which
20
would otherwise, by necessity, be barred from the airwaves." As radio and television
broadcast stations do not own the airwaves, no private property is taken by the
requirement that they provide air time to the COMELEC.
Justice Panganiban's dissent quotes from Tolentino on the Civil Code which says that
"the air lanes themselves 'are not property because they cannot be appropriated for the
benefit of any individual.'" (p. 5) That means neither the State nor the stations own the
air lanes. Yet the dissent also says that "The franchise holders can recover their huge
investments only by selling air time to advertisers." (p. 13) If air lanes cannot be
appropriated, how can they be used to produce air time which the franchise holders can
sell to recover their investment? There is a contradiction here.
As to the additional amount of P6,600,850, it is claimed that this is the cost of producing
a program and it is for such items as "sets and props," "video tapes," "miscellaneous
(other rental, supplies, transportation, etc.)," and "technical facilities (technical crew
such as director and cameraman as well as 'on air plugs')." There is no basis for this

It is unfortunate that in the effort to show that there is taking of private property worth
millions of pesos, the unsubstantiated charge is made that by its decision the Court
permits the "grand larceny of precious time," and allows itself to become "the people's
unwitting
oppressor."
The
charge
is
really
unfortunate.
In Jackson
21
v.Rosenbaun, Justice Holmes was so incensed by the resistance of property owners to
the erection of party walls that he was led to say in his original draft, "a statute, which
embodies the community's understanding of the reciprocal rights and duties of
neighboring landowners, does not need to invoke thepenalty larceny of the police
power in its justification." Holmes's brethren corrected his taste, and Holmes had to
amend the passage so that in the end it spoke only of invoking "the police
22
power." Justice Holmes spoke of the "petty larceny" of the police power. Now we are
being told of the "grand larceny [by means of the police power] of precious air time."
Giving Free Air Time a Duty
Assumed by Petitioner
Petitioners claim that 92 is an invalid amendment of R.A. No. 7252 which granted GMA
Network, Inc. a franchise for the operation of radio and television broadcasting stations.
They argue that although 5 of R.A. No. 7252 gives the government the power to
temporarily use and operate the stations of petitioner GMA Network or to authorize
such use and operation, the exercise of this right must be compensated.
The cited provision of. R.A. No. 7252 states:
Sec. 5. Right of Government. A special right is hereby reserved to the
President of the Philippines, in times of rebellion, public peril, calamity,
emergency, disaster or disturbance of peace and order, to temporarily take
over and operate the stations of the grantee, to temporarily suspend the
operation of any station in the interest of public safety, security and public
welfare, or to authorize the temporary use and operation thereof by any
agency of the Government, upon due compensation to the grantee, for the use
of said stations during the period when they shall be so operated.
The basic flaw in petitioner's argument is that it assumes that the provision for
COMELEC Time constitutes the use and operation of the stations of the GMA Network,

Inc., This is not so. Under 92 of B.P. Blg. 881, the COMELEC does not take over the
operation of radio and television stations but only the allocation of air time to the
candidates for the purpose of ensuring, among other things, equal opportunity, time,
23
and the right to reply as mandated by the Constitution.
Indeed, it is wrong to claim an amendment of petitioner's franchise for the reason that
24
B.P. Blg. 881, which is said to have amended R.A. No. 7252, actually antedated it. The
provision of 92 of B.P. Blg. 881 must be deemed instead to be incorporated in R.A. No.
7252. And, indeed, 4 of the latter statute does.
For the fact is that the duty imposed on the GMA Network, Inc. by its franchise to
render "adequate public service time" implements 92 of B.P. Blg. 881. Undoubtedly, its
purpose is to enable the government to communicate with the people on matters of
public interest. Thus, R.A. No. 7252 provides:

This is because the amendment providing for the payment of "just compensation" is
invalid, being in contravention of 92 of B.P. Blg. 881 that radio and television time
given during the period of the campaign shall be "free of charge." Indeed, Resolution
No. 2983 originally provided that the time allocated shall be "free of charge," just as 92
requires such time to be given "free of charge." The amendment appears to be a
reaction to petitioner's claim in this case that the original provision was unconstitutional
because it allegedly authorized the taking of property without just compensation.
The Solicitor General, relying on the amendment, claims that there should be no more
dispute because the payment of compensation is now provided for. It is basic, however,
that an administrative agency cannot, in the exercise of lawmaking, amend a statute of
Congress. Since 2 of Resolution No. 2983-A is invalid, it cannot be invoked by the
parties.
Law Allows Flextime for Programming

Sec. 4. Responsibility to the Public. The grantee shall provide adequate public
service time to enable the Government, through the said broadcasting stations,
to reach the population on important public issues; provide at all times sound
and balanced programming; promote public participation such as in community
programming; assist in the functions of public information and education;
conform to the ethics of honest enterprise; and not use its station for the
broadcasting of obscene and indecent language, speech, act or scene, or for
the dissemination of deliberately false information or willful misrepresentation,
or to the detriment of the public interest, or to incite, encourage, or assist in
subversive or treasonable acts. (Emphasis added).
It is noteworthy that 40 of R.A. No. 6388, from which 92 of B.P. Blg. 881 was taken,
expressly provided that the COMELEC Time should "be considered as part of the public
service time said stations are required to furnish the Government for the dissemination
of public information and education under their respective franchises or permits." There
is no reason to suppose that 92 of B.P. Blg. 881 considers the COMELEC Time therein
provided to be otherwise than as a public service which petitioner is required to render
under 4 of its charter (R.A. No. 7252). In sum, B.P. Blg. 881, 92 is not an invalid
amendment of petitioner's franchise but the enforcement of a duty voluntarily assumed
by petitioner in accepting a public grant of privilege.
Thus far, we have confined the discussion to the provision of 92 of B.P. Blg. 881 for free
air time without taking into account COMELEC Resolution No. 2983-A, 2 of which
states:
Sec. 2. Grant of "Comelec Time." Every radio broadcasting and television
station operating under franchise shall grant the Commission, upon payment of
just compensation, at least thirty (30) minutes of prime time daily, to be known
as "Comelec Time", effective February 10, 1998 for candidates for President,
Vice-President and Senators, and effective March 27, 1998, for candidates for
local elective offices, until May 9, 1998. (Emphasis added).

by Stations, Not Confiscation of

Air Time by COMELEC
It is claimed that there is no standard in the law to guide the COMELEC in procuring free
air time and that "theoretically the COMELEC can demand all of the air time of such
25
stations." Petitioners do not claim that COMELEC Resolution No. 2983-A arbitrarily
sequesters radio and television time. What they claim is that because of the breadth of
the statutory language, the provision in question is susceptible of "unbridled, arbitrary
26
and oppressive exercise."
The contention has no basis. For one, the COMELEC is required to procure free air time
for candidates "within the area of coverage" of a particular radio or television
broadcaster so that it cannot, for example, procure such time for candidates outside
that area. At what time of the day and how much time the COMELEC may procure will
have to be determined by it in relation to the overall objective of informing the public
about the candidates, their qualifications and their programs of government. As stated
in Osmea v. COMELEC, the COMELEC Time provided for in 92, as well as the COMELEC
Space provided for in 90, is in lieu of paid ads which candidates are prohibited to have
under 11(b) of R.A. No. 6646. Accordingly, this objective must be kept in mind in
determining the details of the COMELEC Time as well as those of the COMELEC Space.
There would indeed be objection to the grant of power to the COMELEC if 92 were so
detailed as to leave no room for accommodation of the demands of radio and television
programming. For were that the case, there could be an intrusion into the editorial
prerogatives of radio and television stations.
Differential Treatment of

Broadcast Media Justified

Petitioners complain that B.P. Blg. 881, 92 singles out radio and television stations to
provide free air time. They contend that newspapers and magazines are not similarly
27
required as, in fact, in Philippine Press Institute v.COMELEC, we upheld their right to
the payment of just compensation for the print space they may provide under 90.
The argument will not bear analysis. It rests on the fallacy that broadcast media are
entitled to the same treatment under the free speech guarantee of the Constitution as
the print media. There are important differences in the characteristics of the two media,
however, which justify their differential treatment for free speech purposes. Because of
the physical limitations of the broadcast spectrum, the government must, of necessity,
allocate broadcast frequencies to those wishing to use them. There is no similar
28
justification for government allocation and regulation of the print media.
In the allocation of limited resources, relevant conditions may validly be imposed on the
grantees or licensees. The reason for this is that, as already noted, the government
spends public funds for the allocation and regulation of the broadcast industry, which it
does not do in the case of the print media. To require the radio and television broadcast
industry to provide free air time for the COMELEC Time is a fair exchange for what the
industry gets.
From another point of view, this Court has also held that because of the unique and
pervasive influence of the broadcast media, "[n]ecessarily . . . the freedom of television
and radio broadcasting is somewhat lesser in scope than the freedom accorded to
29
newspaper and print media."
The broadcast media have also established a uniquely pervasive presence in the lives of
all Filipinos. Newspapers and current books are found only in metropolitan areas and in
the poblaciones of municipalities accessible to fast and regular transportation. Even
here, there are low income masses who find the cost of books, newspapers, and
magazines beyond their humble means. Basic needs like food and shelter perforce enjoy
high priorities.
On the other hand, the transistor radio is found everywhere. The television set
is also becoming universal. Their message may be simultaneously received by a
national or regional audience of listeners including the indifferent or unwilling
who happen to be within reach of a blaring radio or television set. The
materials broadcast over the airwaves reach every person of every age,
persons of varying susceptibilities to persuasion, persons of different I.Q.s and
mental capabilities, persons whose reactions to inflammatory or offensive
speech would he difficult to monitor or predict. The impact of the vibrant
speech is forceful and immediate. Unlike readers of the printed work, the radio
audience has lesser opportunity to cogitate, analyze, and reject the
utterance. 30

Petitioners' assertion therefore that 92 of B.P. Blg. 881 denies them the equal
protection of the law has no basis. In addition, their plea that 92 (free air time) and
11(b) of R.A. No. 6646 (ban on paid political ads) should be invalidated would pave the
way for a return to the old regime where moneyed candidates could monopolize media
advertising to the disadvantage of candidates with less resources. That is what Congress
tried to reform in 1987 with the enactment of R.A. No. 6646. We are not free to set
aside the judgment of Congress, especially in light of the recent failure of interested
parties to have the law repealed or at least modified.
Requirement of COMELEC Time, a
Reasonable Exercise of the
State's Power to Regulate
Use of Franchises
Finally, it is argued that the power to supervise or regulate given to the COMELEC under
Art. IX-C, 4 of the Constitution does not include the power to prohibit. In the first place,
what the COMELEC is authorized to supervise or regulate by Art. IX-C, 4 of the
31
Constitution, among other things, is the use by media of information of their
franchises or permits, while what Congress (not the COMELEC) prohibits is the sale or
donation of print space or air time for political ads. In other words, the object of
supervision or regulation is different from the object of the prohibition. It is another
fallacy for petitioners to contend that the power to regulate does not include the power
to prohibit. This may have force if the object of the power were the same.
In the second place, the prohibition in 11(b) of R.A. No. 6646 is only half of the
regulatory provision in the statute. The other half is the mandate to the COMELEC to
procure print space and air time for allocation to candidates. As we said in Osmea
v. COMELEC:
The term political "ad ban" when used to describe 11(b) of R.A. No. 6646, is
misleading, for even as 11(b) prohibits the sale or donation of print space and
air time to political candidates, it mandates the COMELEC to procure and itself
allocate to the candidates space and time in the media. There is no suppression
of political ads but only a regulation of the time and manner of advertising.
xxx xxx xxx
. . . What is involved here is simply regulation of this nature. Instead of leaving
candidates to advertise freely in the mass media, the law provides for
allocation, by the COMELEC of print space and air time to give all candidates
equal time and space for the purpose of ensuring "free, orderly, honest,
peaceful, and credible elections."

With the prohibition on media advertising by candidates themselves, the COMELEC

Time and COMELEC Space are about the only means through which candidates can
advertise their qualifications and programs of government. More than merely depriving
their qualifications and programs of government. More than merely depriving
candidates of time for their ads, the failure of broadcast stations to provide air time
unless paid by the government would clearly deprive the people of their right to know.
Art III, 7 of the Constitution provides that "the right of the people to information on
matters of public concern shall be recognized," while Art. XII, 6 states that "the use of
property bears a social function [and] the right to own, establish, and operate economic
enterprises [is] subject to the duty of the State to promote distributive justice and to
intervene when the common good so demands."
To affirm the validity of 92 of B.P. Blg. 881 is to hold public broadcasters to their
obligation to see to it that the variety and vigor of public debate on issues in an election
is maintained. For while broadcast media are not mere common carriers but entities
with free speech rights, they are also public trustees charged with the duty of ensuring
that the people have access to the diversity of views on political issues. This right of the
people is paramount to the autonomy of broadcast media. To affirm the validity of 92,
therefore, is likewise to uphold the people's right to information on matters of public
concern. The use of property bears a social function and is subject to the state's duty to
intervene for the common good. Broadcast media can find their just and highest reward
in the fact that whatever altruistic service they may render in connection with the
holding of elections is for that common good.
For the foregoing reasons, the petition is dismissed.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Bellosillo, Melo, Puno, Kapunan, Martinez and
Quisumbing, JJ., concur.

EN BANC

CONRADO L. TIU, JUAN T. MONTELIBANO JR. and ISAGANI M. JUNGCO, petitioners,

vs. COURT OF APPEALS, HON. TEOFISTO T. GUINGONA JR., BASES
CONVERSION AND DEVELOPMENT AUTHORITY, SUBIC BAY METROPOLITAN
AUTHORITY, BUREAU OF INTERNAL REVENUE, CITY TREASURER OF
OLONGAPO and MUNICIPAL TREASURER OF SUBIC, ZAMBALES, respondents.

Agreement between the Philippines and the United States of America as amended, and
within the territorial jurisdiction of the Municipalities of Morong and Hermosa, Province
of Bataan, hereinafter referred to as the Subic Special Economic Zone whose metes and
bounds shall be delineated in a proclamation to be issued by the President of the
Philippines. Within thirty (30) days after the approval of this Act, each local government
unit shall submit its resolution of concurrence to join the Subic Special Economic Zone to
the Office of the President. Thereafter, the President of the Philippines shall issue a
proclamation defining the metes and bounds of the zone as provided herein.

DECISION

The abovementioned zone shall be subject to the following policies:

PANGANIBAN, J.:

(a) Within the framework and subject to the mandate and limitations of the Constitution
and the pertinent provisions of the Local Government Code, the Subic Special Economic
Zone shall be developed into a self-sustaining, industrial, commercial, financial and
investment center to generate employment opportunities in and around the zone and
to attract and promote productive foreign investments;

[G.R. No. 127410. January 20, 1999]

The constitutional right to equal protection of the law is not violated by an

executive order, issued pursuant to law, granting tax and duty incentives only to
businesses and residents within the secured area of the Subic Special Economic Zone
and denying them to those who live within the Zone but outside such fenced-in
territory. The Constitution does not require absolute equality among residents. It is
enough that all persons under like circumstances or conditions are given the same
privileges and required to follow the same obligations. In short, a classification based on
valid and reasonable standards does not violate the equal protection clause.
The Case
Before us is a petition for review under Rule 45 of the Rules of Court, seeking the
[1]
reversal of the Court of Appeals Decision promulgated on August 29, 1996, and
[2]
[3]
Resolution dated November 13, 1996, in CA-GR SP No. 37788. The challenged
Decision upheld the constitutionality and validity of Executive Order No. 97-A (EO 97-A),
according to which the grant and enjoyment of the tax and duty incentives authorized
under Republic Act No. 7227 (RA 7227) were limited to the business enterprises and
residents within the fenced-in area of the Subic Special Economic Zone (SSEZ).
The assailed Resolution denied the petitioners motion for reconsideration.
The Facts
On March 13, 1992, Congress, with the approval of the President, passed into law
RA 7227 entitled An Act Accelerating the Conversion of Military Reservations Into Other
Productive Uses, Creating the Bases Conversion and Development Authority for this
Purpose, Providing Funds Therefor and for Other Purposes. Section 12 thereof created
the Subic Special Economic Zone and granted thereto special privileges, as follows:
SEC. 12. Subic Special Economic Zone. -- Subject to the concurrence by resolution of
the sangguniang panlungsod of the City of Olongapo and the sangguniang bayan of the
Municipalities of Subic, Morong and Hermosa, there is hereby created a Special
Economic and Free-port Zone consisting of the City of Olongapo and the Municipality of
Subic, Province of Zambales, the lands occupied by the Subic Naval Base and its
contiguous extensions as embraced, covered, and defined by the 1947 Military Bases

(b) The Subic Special Economic Zone shall be operated and managed as a separate
customs territory ensuring free flow or movement of goods and capital within, into and
exported out of the Subic Special Economic Zone, as well as provide incentives such as
tax and duty-free importations of raw materials, capital and equipment. However,
exportation or removal of goods from the territory of the Subic Special Economic Zone
to the other parts of the Philippine territory shall be subject to customs duties and taxes
under the Customs and Tariff Code and other relevant tax laws of the Philippines;
(c) The provision of existing laws, rules and regulations to the contrary notwithstanding,
no taxes, local and national, shall be imposed within the Subic Special Economic Zone. In
lieu of paying taxes, three percent (3%) of the gross income earned by all businesses and
enterprises within the Subic Special Economic Zone shall be remitted to the National
Government, one percent (1%) each to the local government units affected by the
declaration of the zone in proportion to their population area, and other factors. In
addition, there is hereby established a development fund of one percent (1%) of the
gross income earned by all businesses and enterprises within the Subic Special Economic
Zone to be utilized for the development of municipalities outside the City of Olongapo
and the Municipality of Subic, and other municipalities contiguous to the base areas.
In case of conflict between national and local laws with respect to tax exemption
privileges in the Subic Special Economic Zone, the same shall be resolved in favor of the
latter;
(d) No exchange control policy shall be applied and free markets for foreign exchange,
gold, securities and future shall be allowed and maintained in the Subic Special
Economic Zone;

(e) The Central Bank, through the Monetary Board, shall supervise and regulate the
operations of banks and other financial institutions within the Subic Special Economic
Zone;

Section 2. On All Other Taxes. -- In lieu of all local and national taxes (except import
taxes and duties), all business enterprises in the SSEZ shall be required to pay the tax
specified in Section 12(c) of R.A. No. 7227.

(f) Banking and finance shall be liberalized with the establishment of foreign currency
depository units of local commercial banks and offshore banking units of foreign banks
with minimum Central Bank regulation;

Nine days after, on June 19, 1993, the President issued Executive Order No. 97-A
(EO 97-A), specifying the area within which the tax-and-duty-free privilege was
operative, viz.:

(g) Any investor within the Subic Special Economic Zone whose continuing investment
shall not be less than two hundred fifty thousand dollars ($250,000), his/her spouse and
dependent children under twenty-one (21) years of age, shall be granted permanent
resident status within the Subic Special Economic Zone. They shall have the freedom of
ingress and egress to and from the Subic Special Economic Zone without any need of
special authorization from the Bureau of Immigration and Deportation. The Subic Bay
Metropolitan Authority referred to in Section 13 of this Act may also issue working visas
renewable every two (2) years to foreign executives and other aliens possessing highly
technical skills which no Filipino within the Subic Special Economic Zone possesses, as
certified by the Department of Labor and Employment. The names of aliens granted
permanent residence status and working visas by the Subic Bay Metropolitan Authority
shall be reported to the Bureau of Immigration and Deportation within thirty (30) days
after issuance thereof;

Section 1.1. The Secured Area consisting of the presently fenced-in former Subic Naval
Base shall be the only completely tax and duty-free area in the SSEFPZ [Subic Special
Economic and Free Port Zone].Business enterprises and individuals (Filipinos and
foreigners) residing within the Secured Area are free to import raw materials, capital
goods, equipment, and consumer items tax and duty-free. Consumption items,
however, must be consumed within the Secured Area. Removal of raw materials, capital
goods, equipment and consumer items out of the Secured Area for sale to non-SSEFPZ
registered enterprises shall be subject to the usual taxes and duties, except as may be
provided herein

(h) The defense of the zone and the security of its perimeters shall be the responsibility
of the National Government in coordination with the Subic Bay Metropolitan Authority.
The Subic Bay Metropolitan Authority shall provide and establish its own security and
fire-fighting forces; and

On October 26, 1994, the petitioners challenged before this Court the
constitutionality of EO 97-A for allegedly being violative of their right to equal protection
of the laws. In a Resolution dated June 27, 1995, this Court referred the matter to the
Court of Appeals, pursuant to Revised Administrative Circular No. 1-95.
Incidentally, on February 1, 1995, Proclamation No. 532 was issued by President
Ramos. It delineated the exact metes and bounds of the Subic Special Economic and
Free Port Zone, pursuant to Section 12 of RA 7227.
Ruling of the Court of Appeals

(i) Except as herein provided, the local government units comprising the Subic Special
Economic Zone shall retain their basic autonomy and identity. The cities shall be
governed by their respective charters and the municipalities shall operate and function
in accordance with Republic Act No. 7160, otherwise known as the Local Government
Code of 1991.
On June 10, 1993, then President Fidel V. Ramos issued Executive Order No. 97 (EO
97), clarifying the application of the tax and duty incentives thus:
Section 1. On Import Taxes and Duties -- Tax and duty-free importations shall apply only
to raw materials, capital goods and equipment brought in by business enterprises into
the SSEZ. Except for these items, importations of other goods into the SSEZ, whether by
business enterprises or resident individuals, are subject to taxes and duties under
relevant Philippine laws.
The exportation or removal of tax and duty-free goods from the territory of the SSEZ to
other parts of the Philippine territory shall be subject to duties and taxes under relevant
Philippine laws.

Respondent Court held that there is no substantial difference between the

provisions of EO 97-A and Section 12 of RA 7227. In both, the Secured Area is precise
and well-defined as xxx the lands occupied by the Subic Naval Base and its contiguous
extensions as embraced, covered and defined by the 1947 Military Bases Agreement
between the Philippines and the United States of America, as amended, xxx. The
appellate court concluded that such being the case, petitioners could not claim that EO
97-A is unconstitutional, while at the same time maintaining the validity of RA 7227.
The court a quo also explained that the intention of Congress was to confine the
coverage of the SSEZ to the secured area and not to include the entire Olongapo City
and other areas mentioned in Section 12 of the law. It relied on the following
deliberations in the Senate:
Senator Paterno. Thank you, Mr. President. My first question is the extent of the
economic zone. Since this will be a free port, in effect, I believe that it is important to
delineate or make sure that the delineation will be quite precise[. M]y question is: Is it
the intention that the entire of Olongapo City, the Municipality of Subic and the
Municipality of Dinalupihan will be covered by the special economic zone or only
portions thereof?

Senator Shahani. Only portions, Mr. President. In other words, where the actual
operations of the free port will take place.

Main Issue: The Constitutionality of EO 97-A

Senator Paterno. I see. So, we should say, COVERING THE DESIGNATED PORTIONS
OR CERTAIN PORTIONS OF OLONGAPO CITY, SUBIC AND DINALUPIHAN to make it clear
that it is not supposed to cover the entire area of all of these territories.

Citing Section 12 of RA 7227, petitioners contend that the SSEZ encompasses (1)
the City of Olongapo, (2) the Municipality of Subic in Zambales, and (3) the area
formerly occupied by the Subic Naval Base. However, EO 97-A, according to them,
narrowed down the area within which the special privileges granted to the entire zone
would apply to the present fenced-in former Subic Naval Base only. It has thereby
excluded the residents of the first two components of the zone from enjoying the
benefits granted by the law. It has effectively discriminated against them, without
reasonable or valid standards, in contravention of the equal protection guarantee.

Senator Shahani. So, the Gentleman is proposing that the words CERTAIN AREAS
...
The President. The Chair would want to invite the attention of the Sponsor and
Senator Paterno to letter C, which says: THE PRESIDENT OF THE PHILIPPINES IS HEREBY
AUTHORIZED TO PROCLAIM, DELINEATE AND SPECIFY THE METES AND BOUNDS OF
OTHER SPECIAL ECONOMIC ZONES WHICH MAY BE CREATED IN THE CLARK MILITARY
RESERVATIONS AND ITS EXTENSIONS.
Probably, this provision can be expanded since, apparently, the intention is that
what is referred to in Olongapo as Metro Olongapo is not by itself ipso jure already a
special economic zone.
Senator Paterno. That is correct.
The President. Someone, some authority must declare which portions of the same
shall be the economic zone. Is it the intention of the author that it is the President of the
Philippines who will make such delineation?
Senator Shahani. Yes, Mr. President.
The Court of Appeals further justified the limited application of the tax incentives
as being within the prerogative of the legislature, pursuant to its avowed purpose [of
serving] some public benefit or interest. It ruled that EO 97-A merely implements the
legislative purpose of [RA 7227].
Disagreeing, petitioners now seek before us a review of the aforecited Court of
Appeals Decision and Resolution.
The Issue
Petitioners submit the following issue for the resolution of the Court:
[W]hether or not Executive Order No. 97-A violates the equal protection clause of the
Constitution. Specifically the issue is whether the provisions of Executive Order No. 97-A
confining the application of R.A. 7227 within the secured area and excluding the
[4]
residents of the zone outside of the secured area is discriminatory or not.
The Courts Ruling

On the other hand, the solicitor general defends, on behalf of respondents, the
validity of EO 97-A, arguing that Section 12 of RA 7227 clearly vests in the President the
authority to delineate the metes and bounds of the SSEZ. He adds that the issuance fully
complies with the requirements of a valid classification.
We rule in favor of the constitutionality and validity of the assailed EO. Said Order
is not violative of the equal protection clause; neither is it discriminatory. Rather, we
find real and substantive distinctions between the circumstances obtaining inside and
those outside the Subic Naval Base, thereby justifying a valid and reasonable
classification.
The fundamental right of equal protection of the laws is not absolute, but is
subject to reasonable classification. If the groupings are characterized by substantial
distinctions that make real differences, one class may be treated and regulated
[6]
differently from another. The classification must also be germane to the purpose of
[7]
the law and must apply to all those belonging to the same class. Explaining the nature
[8]
of the equal protection guarantee, the Court in Ichong v. Hernandez said:
The equal protection of the law clause is against undue favor and individual or class
privilege, as well as hostile discrimination or the oppression of inequality. It is not
intended to prohibit legislation which is limited either [by] the object to which it is
directed or by [the] territory within which it is to operate. It does not demand absolute
equality among residents; it merely requires that all persons shall be treated alike, under
like circumstances and conditions both as to privileges conferred and liabilities
enforced. The equal protection clause is not infringed by legislation which applies only
to those persons falling within a specified class, if it applies alike to all persons within
such class, and reasonable grounds exist for making a distinction between those who fall
within such class and those who do not.
Classification, to be valid, must (1) rest on substantial distinctions, (2) be germane
to the purpose of the law, (3) not be limited to existing conditions only, and (4) apply
[9]
equally to all members of the same class.

[5]

The petition is bereft of merit.

We first determine the purpose of the law. From the very title itself, it is clear that
RA 7227 aims primarily to accelerate the conversion of military reservations into

productive uses. Obviously, the lands covered under the 1947 Military Bases Agreement
are its object. Thus, the law avows this policy:
SEC. 2. Declaration of Policies. -- It is hereby declared the policy of the Government to
accelerate the sound and balanced conversion into alternative productive uses of the
Clark and Subic military reservations and their extensions (John Hay Station, Wallace Air
Station, ODonnell Transmitter Station, San Miguel Naval Communications Station and
Capas Relay Station), to raise funds by the sale of portions of Metro Manila military
camps, and to apply said funds as provided herein for the development and conversion
to productive civilian use of the lands covered under the 1947 Military Bases Agreement
between the Philippines and the United States of America, as amended.
To undertake the above objectives, the same law created the Bases Conversion
and Development Authority, some of whose relevant defined purposes are:
(b) To adopt, prepare and implement a comprehensive and detailed development plan
embodying a list of projects including but not limited to those provided in the
Legislative-Executive Bases Council (LEBC) framework plan for the sound and balanced
conversion of the Clark and Subic military reservations and their extensions consistent
with ecological and environmental standards, into other productive uses to promote the
economic and social development of Central Luzon in particular and the country in
general;
(c) To encourage the active participation of the private sector in transforming the Clark
and Subic military reservations and their extensions into other productive uses;
Further, in creating the SSEZ, the law declared it a policy to develop the zone into a self[10]
sustaining, industrial, commercial, financial and investment center.
From the above provisions of the law, it can easily be deduced that the real
concern of RA 7227 is to convert the lands formerly occupied by the US military bases
into economic or industrial areas. In furtherance of such objective, Congress deemed it
necessary to extend economic incentives to attract and encourage investors, both local
[11]
and foreign. Among such enticements are: (1) a separate customs territory within the
zone, (2) tax-and-duty-free importations, (3) restructured income tax rates on business
enterprises within the zone, (4) no foreign exchange control, (5) liberalized regulations
on banking and finance, and (6) the grant of resident status to certain investors and of
working visas to certain foreign executives and workers.
We believe it was reasonable for the President to have delimited the application of
some incentives to the confines of the former Subic military base. It is this specific area
which the government intends to transform and develop from its status quo ante as an
abandoned naval facility into a self-sustaining industrial and commercial zone,
particularly for big foreign and local investors to use as operational bases for their
businesses and industries. Why the seeming bias for big investors? Undeniably, they are
the ones who can pour huge investments to spur economic growth in the country and to

generate employment opportunities for the Filipinos, the ultimate goals of the
government for such conversion. The classification is, therefore, germane to the
[12]
purposes of the law. And as the legal maxim goes, The intent of a statute is the law.
Certainly, there are substantial differences between the big investors who are
being lured to establish and operate their industries in the so-called secured area and
the present business operators outside the area. On the one hand, we are talking of
billion-peso investments and thousands of new jobs. On the other hand, definitely none
of such magnitude. In the first, the economic impact will be national; in the second, only
local. Even more important, at this time the business activities outside the secured area
are not likely to have any impact in achieving the purpose of the law, which is to turn
the former military base to productive use for the benefit of the Philippine
economy. There is, then, hardly any reasonable basis to extend to them the benefits and
incentives accorded in RA 7227. Additionally, as the Court of Appeals pointed out, it will
be easier to manage and monitor the activities within the secured area, which is already
fenced off, to prevent fraudulent importation of merchandise or smuggling.
It is well-settled that the equal-protection guarantee does not require territorial
[13]
uniformity of laws. As long as there are actual and material differences between
territories, there is no violation of the constitutional clause. And of course, anyone,
including the petitioners, possessing the requisite investment capital can always avail of
the same benefits by channeling his or her resources or business operations into the
fenced-off free port zone.
We believe that the classification set forth by the executive issuance does not
apply merely to existing conditions. As laid down in RA 7227, the objective is to establish
a self-sustaining, industrial, commercial, financial and investment center in the
area. There will, therefore, be a long-term difference between such investment center
and the areas outside it.
Lastly, the classification applies equally to all the resident individuals and
businesses within the secured area. The residents, being in like circumstances or
contributing directly to the achievement of the end purpose of the law, are not
categorized further. Instead, they are all similarly treated, both in privileges granted and
in obligations required.
All told, the Court holds that no undue favor or privilege was extended. The
classification occasioned by EO 97-A was not unreasonable, capricious or unfounded. To
repeat, it was based, rather, on fair and substantive considerations that were germane
to the legislative purpose.
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision and
Resolution are hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr., C.J., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza,
Martinez, Quisumbing, Purisima, Pardo, Buena, and Gonzaga-Reyes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC

and not a shoot-out between the Kuratong Baleleng gang members and the ABRITG,
Ombudsman Aniano Desierto formed a panel of investigators headed by the Deputy
Ombudsman for Military Affairs, Bienvenido Blancaflor, to investigate the incident. This
panel later absolved from any criminal liability all the PNP officers and personal
allegedly involved in May 18, 1995 incident, with a finding that the said incident was a
1
legitimate police operation.

G.R. No. 128096 January 20, 1999

PANFILO M. LACSON, petitioner,
vs.
THE EXECUTIVE SECRETARY, THE SANDIGANBAYAN, OFFICE OF THE SPECIAL
PROSECUTOR, THE DEPARTMENT OF JUSTICE, MYRNA ABALORA, NENITA ALAP-AP,
IMELDA PANCHO MONTERO, and THE PEOPLE OF THE PHILIPPINES, respondent.
ROMEO M. ACOP AND FRANCISCO G. ZUBIA, JR., petitioner-intervenors.

However, a review board led by Overall Deputy Ombudsman Francisco Villa modified
modified the Blancaflor panel's finding and recommended the indictment for multiple
murder against twenty-six (26) respondents, including herein petitioner and intervenors.
The recommendation was approved by the Ombudsman except for the withdrawal of
the charges against Chief Supt. Ricardo de Leon.
Thus, on November 2, 1995, petitioner Panfilo Lacson was among those charged as
2
principal in eleven (11) information for murder before the Sandiganbayan's Second
Division, while intervenors Romeo Acop and Francisco Zubia, Jr. were among those
charged in the same informations as accessories after-in-the-fact.
3

MARTINEZ, J.:
The constitutionality of Sections 4 and 7 of Republic Act No. 8249 an act which
further defines the jurisdiction of the Sandiganbayan is being challenged in this
petition for prohibition and mandamus. Petitioner Panfilo Lacson, joined by petitionersintervenors Romeo Acop and Francisco Zubia, Jr., also seeks to prevent the
Sandiganbayan from proceedings with the trial of Criminal Cases Nos. 23047-23057 (for
multiple murder) against them on the ground of lack of jurisdiction.
The antecedents of this case, as gathered from the parties' pleadings and documentary
proofs, are as follows:
In the early morning of May 18, 1995, eleven (11) persons believed to be members of
the Kuratong Baleleng gang, reportedly an organized crime syndicate which had been
involved in a spate of bank robberies in Metro Manila, where slain along
Commonwealth Avenue in Quezon City by elements of the Anti-Bank Robbery and
Intelligence Task Group (ABRITG) headed by Chieff Superintendent Jewel Canson of the
Philippine National Police (PNP). The ABRITG was composed of police officers from the
Traffic Management Command (TMC) led by petitioner-intervenor Senior
Superintendent Francisco Zubia, Jr.; Presidential Anti-Crime Commission Task Force
Habagat (PACC-TFH) headed by petitioner Chief Superintendent Panfilo M. Lacson;
Central Police District Command (CPDC) led by Chief Superintendent Ricardo de Leon;
and the Criminal Investigation Command (CIC) headed by petitioner-intervenor Chief
Superintendent Romeo Acop.
Acting on a media expose of SPO2 Eduardo delos Reyes, a member of the CIC, that what
actually transpired at dawn of May 18, 1995 was a summary execution (or a rub out)

Upon motion by all the accused in the 11 information, the Sandiganbayan allowed
4
them to file a motion for reconsideration of the Ombudsman's action.
After conducting a reinvestigation, the Ombudsman filed on March 1, 1996 eleven (11)
5
amended informations before the Sandiganbayan, wherein petitioner was charged only
as an accessory, together with Romeo Acop and Francisco Zubia, Jr. and other. One of
6
the accused was dropped from the case.
On March 5-6, 1996, all the accused filed separate motions questioning the jurisdiction
of the Sandiganbayan, asserting that under the amended informations, the cases fall
within the jurisdiction of the Regional Trial Court pursuant to Section 2 (paragraphs a
7
and c) of Republic Act No. 7975. They contend that the said law limited the jurisdiction
of the Sandiganbayan to cases where one or more of the "principal accused" are
government officials with Salary Grade (SG) 27 or higher, or PNP officials with the rank
of Chief Superintendent (Brigadier General) or higher. The highest ranking principal
accused in the amended informations has the rank of only a Chief Inspector, and none
has the equivalent of at least SG 27.
8

Thereafter, in a Resolution dated May 8, 1996 (promulgated on May 9, 1996), penned

by Justice Demetriou, with Justices Lagman and de Leon concurring, and Justices
9
Balajadia and Garchitorena dissenting, the Sandiganbayan admitted the amended
information and ordered the cases transferred to the Quezon City Regional Trial Court
which has original and exclusive jurisdiction under R.A. 7975, as none of the principal
accused has the rank of Chief Superintendent or higher.
On May 17, 1996, the Office of the Special Prosecutor moved for a reconsideration,
insisting that the cases should remain with the Sandiganbayan. This was opposed by
petitioner and some of the accused.

While these motions for reconsideration were pending resolution, and even before the
issue of jurisdiction cropped up with the filing of the amended informations on March 1,
10
11
1996, House Bill No. 2299 and No. 1094 (sponsored by Representatives Edcel C.
Lagman and Lagman and Neptali M. Gonzales II, respectively), as well as Senate Bill No.
12
844 (sponsored by Senator Neptali Gonzales), were introduced in Congress, defining
expanding the jurisdiction of the Sandiganbayan. Specifically, the said bills sought,
among others, to amend the jurisdiction of the Sandiganbayan by deleting the word
"principal" from the phrase "principal accused" in Section 2 (paragraphs a and c) of R.A.
No. 7975.
These bills were consolidated and later approved into law as R.A. No. 8249
President of the Philippines on February 5, 1997.

13

by the

Subsequently, on March 5, 1997, the Sandiganbayan promulgated a

14
Resolution denying the motion for reconsideration of the Special Prosecutor, ruling
that it "stands pat in its resolution dated May 8, 1996."
15

On the same day the Sandiganbayan issued and ADDENDUM to its March 5, 1997
Resolution, the pertinent portion of which reads:
After Justice Lagman wrote the Resolution and Justice Demetriou
concurred in it, but before Justice de Leon. Jr. rendered his concurring
and dissenting opinion, the legislature enacted Republic Act 8249 and
the President of the Philippines approved it on February 5, 1997.
Considering the pertinent provisions of the new law, Justices Lagman
and Demetriou are now in favor of granting, as they are now granting,
the Special Prosecutor's motion for reconsideration. Justice de Leon
has already done so in his concurring and dissenting opinion.

any court over which trial has not begun as to the approval hereof." Petitioner argues
that:
a) The questioned provisions of the statute were introduced by the
authors thereof in bad faith as it was made to precisely suit the
situation in which petitioner's cases were in at the Sandiganbayan by
restoring jurisdiction thereof to it, thereby violating his right to
procedural due process and the equal protection clause of the
Constitution. Further, from the way the Sandiganbayan has footdragged for nine (9) months the resolution of a pending incident
involving the transfer of the cases to the Regional Trial Court, the
passage of the law may have been timed to overtake such resolution
to render the issue therein moot, and frustrate the exercise of
petitioner's vested rights under the old Sandiganbayan law (RA 7975)
b) Retroactive application of the law is plan from the fact that it was
again made to suit the peculiar circumstances in which petitioner's
cases were under, namely, that the trial had not yet commenced, as
provided in Section 7, to make certain that those cases will no longer
be remanded to the Quezon City Regional Trial Court, as the
Sandiganbayan alone should try them, thus making it an ex post
facto legislation and a denial of the right of petitioner as an accused in
Criminal Case Nos. 23047-23057 to procedural due process.
c) The title of the law is misleading in that it contains the aforesaid
"innocuous" provisions in Sections 4 and 7 which actually expands
rather than defines the old Sandiganbayan law (RA 7975), thereby
violating the one-title one-subject requirement for the passage of
17
statutes under Section 26 (1), Article VI of the Constitution.

xxx xxx xxx

Considering that three of the accused in each of these cases are PNP
Chief Superintendents: namely, Jewel T. Canson, Romeo M. Acop and
Panfilo M. Lacson, and that trial has not yet begun in all these cases
in fact, no order of arrest has been issued this court has
competence to take cognizance of these cases.
To recapitulate, the net result of all the foregoing is that by the vote of
3 of 2, the court admitted the Amended Informations in these cases by
the unanimous vote of 4 with 1 neither concurring not dissenting,
16
retained jurisdiction to try and decide the cases (Empahasis
supplied)
Petitioner now questions the constitutionality of Section 4 of R.A. No. 8249, including
Section 7 thereof which provides that the said law "shall apply to all cases pending in

For their part, the intervenors, in their petition-in-intervention, add that "while Republic
Act No. 8249 innocuously appears to have merely expanded the jurisdiction of the
Sandiganbayan, the introduction of Section 4 and 7 in said statute impressed upon it the
character of a class legislation and an ex-post facto statute intended to apply specifically
18
to the accused in the Kuratong Baleleng case pending before the Sandiganbayan. They
further argued that if their case is tried before the Sandiganbayan their right to
procedural due process would be violated as they could no longer avail of the twotiered appeal to the Sandiganbayan, which they acquired under R.A. 7975, before
recourse to the Supreme Court.
Both the Office of the Ombudsman and the Solicitor-General filed separate pleadings in
support of the constitutionality of the challenged provisions of the law in question and
praying that both the petition and the petition-in-intervention be dismissed.
19

This Court then issued a Resolution requiring the parties to file simultaneously within
a nonextendible period of ten (10) days from notice thereof additional memoranda on

the question of whether the subject amended informations filed a Criminal Case Nos.
23047-23057 sufficiently allege the commission by the accused therein of the crime
charged within the meaning Section 4 b of Republic Act No. 8249, so as to bring the said
cases within the exclusive original jurisdiction of the Sandiganbayan.
The parties, except for the Solicitor General who is representing the People of the
Philippines, filed the required supplemental memorandum within the nonextendible
reglementary period.
The established rule is that every law has in its favor the presumption of
constitutionality, and to justify its nullification there must be a clear and unequivocal
20
breach of the Constitution, not a doubtful and argumentative one. The burden of
proving the invalidity of the law lies with those who challenge it. That burden, we regret
to say, was not convincingly discharged in the present case.
The creation of the Sandiganbayn was mandated in Section 5, Article XIII of the 1973
Constitution, which provides:
Sec. 5. The Batasang Pambansa shall create a special court, to be
known as Sandiganbayan, which shall have jurisdiction over criminal
and civil cases involving graft and corrupt practices and such other
offenses committed by public officers and employees including those
in government-owned or controlled corporations, in relation to their
office as may be determined by law.
The said special court is retained in the new (1987) Constitution under the following
provisions in Article XI, Section 4:
Sec. 4. The present anti-graft court known as the Sandiganbayan shall
continue to function and exercise its jurisdiction as now or hereafter
may be provided by law.
21

Pursuant to the constitutional mandate, Presidential Decree No. 1486 created the
Sandiganbayan. Thereafter, the following laws on the Sandiganbayan, in chronological
22
23
order, were enacted: P.D. No. 1606, Section 20 of Batas Pambansa Blg. 123, P.D. No.
24
25
26
27
1860, P.D. No. 1861, R.A. No. 7975, and R.A. No. 8249. Under the latest
amendments introduced by Section 4 of R.A. No. 8249, the Sandiganbayan has
jurisdiction over the following cases:
Sec 4. Section 4 of the same decree [P.D. No. 1606, as amended] is
hereby further amended to read as follows:
Sec. 4. Jurisdiction The Sandiganbayan shall exercise exclusive
original jurisdiction in all cases involving:

a. Violations of Republic Act No. 3019, as amended, otherwise known

as the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and
Chapter II, Section 2, Titile VII, Book II of the Revised Penal Code,
where one or more of the accused are officials occupying the following
positions in the government, whether in a permanent, acting or
interim capacity, at the time of the commission of the offense:
(1) Officials of the executive branch occupying the positions of
regional director and higher, otherwise classified as Grade "27" and
higher, of the Compensation and Position Classification Act of 1989
(Republic Act No. 6758), specifically including:
(a) Provincial governors, vice-governors, members of
the sangguniang panlalawigan, and provincial
treasurers, assessors, engineers, and other provincial
department heads;
(b) City mayors, vice-mayors, members of the
sangguniang panlungsod, city treasurers, assessors,
engineers, and other city department heads;
(c) Officials of the diplomatic service occupying the
position of consul and higher;
(d) Philippine Army and air force colonels, naval
captains, and all officers of higher rank;
(e) Officers of the Philippines National Police while
occupying the position of provincial director and
those holding the rank of senior superintendent or
higher.
(f) City of provincial prosecutors and their assistants,
and officials and prosecutors in the Office of the
Ombudsman and special prosecutor;
(g) Presidents, directors or trustees or managers of
government-owned or controlled corporations, state
universities or educational institutions or
foundations;
(2) Members of Congress or officials thereof classified as-Grade "27"
and up under the Compensation and Position Classification Act of
1989;

(3) Members of the judiciary without prejudice to the provisions of the

Constitution;

People of the Philippines, except in cases filed pursuant to Executive

Order Nos. 1, 2, 14, and 4-A, issued in 1986.

(4) Chairman and members of the Constitutional Commissions,

without prejudice to the provisions of the Constitution;

In case private individuals are charged as co-principals, accomplices or

accessories with the public officers or employee, including those
employed in government-owned or controlled corporations, they shall
be tried jointly with said public officers and employees in the proper
courts which shall exercise exclusive jurisdiction over them.

(5) All other national and local officials classified as Grade "27" or
higher under the Compensation and Position Classification Act of
1989.

xxx xxx xxx (Emphasis supplied)

b. Other offenses or felonies whether simple or complexed with other
crimes committed by the public officials and employees mentioned in
Subsection a of this section in relation to their office.
c. Civil and criminal cases filed pursuant to and connection with
Executive Orders Nos. 1,2, 14 and 14-A, issued in 1986.
In cases where none of the accused are occupying positions
corresponding to salary Grade "27" or higher, as prescribed in the said
Republic Act 6758, or military and PNP officers mentioned above,
exclusive original jurisdiction thereof shall be vested in the proper
regional trial court, metropolitan trial court, municipal trial court, and
municipal circuit trial court, as the case may be, pursuant to their
jurisdictions as privided in Batas Pambansa Blg. 129, as amended.
The Sandiganbayan shall exercise exclusive appellate jurisdiction over
final judgments, resolutions or orders of regional trial courts whether
in the exercise of their own original jurisdiction or of their appellate
jurisdiction as herein provided.
The Sandiganbayan shall have exclusive original jurisdiction over
petitions of the issuance of the writs of mandamus,
prohibition, certiorari, habeas corpus, injunctions, and other ancillary
writs and processes in aid of its appellate jurisdiction and over
petitions of similar nature, including quo warranto, arising or that may
arise in cases filed or which may be filed under Executive Order Nos. 1,
2, 14 and 14-A, issued in 1986: Provided, That the jurisdiction over
these petitions shall not be exclusive of the Supreme Court.
The procedure prescribed in Batas Pambansa Blg. 129, as well as the
implementing rules that the Supreme Court has promulgated and may
hereafter promulgate, relative to appeals/petitions for review to the
Court of Appeals, shall apply to appeals and petitions for review filed
with the Sandiganbayan. In all cases elevated to the Sandiganbayan
and from the Sandiganbayan to the Supreme Court, the Office of the
Ombudsman, through its special prosecutor, shall represent the

Sec. 7 of R.A. No. 8249 states:

Sec. 7. Transitory provision This act shall apply to all cases pending
in any court over which trial has not begun as of the approval hereof.
(Emphasis supplied)
The Sandiganbayan law prior to R.A. 8249 was R.A. 7975. Section 2 of R.A. 7975
provides:
Sec. 2. Section 4 of the same decree [Presidential Decree No. 1606, as
amended) is hereby further amended to read as follows:
Sec 4. Jurisdiction The Sandiganbayan shall exercise exclusive
original jurisdiction in all cases involving:
a. Violations of Republic Act No. 3019, as amended, otherwise known
as the Anti-Graft and Corrupt Practices Act, Republic Act No. 1379, and
Chapter II, Section 2, Title VII, Book II of the Revised Penal Code,
where one or more of the pricipal accused are afficials occupying the
following positions in the government, whether in a permanent, acting
or interim capacity, at the time of the commission of the offense:
(1) Officials of the executive branch occupying the positions of
regional director and higher, otherwise classified as Grade "27" and
higher, of the Compensation and Position Classification Act of 1989
(Republic Act No. 6758), specifically including:
(a) Provincial governors, vice-governors, members of
the sangguniang panlalawigan, and provincial
treasurers, assessors, engineer, and other provincial
department heads;

(b) City mayors, vice-mayors, members of the

sangguniang panlungsod, city treasurers, assessors,
engineers, and other city department heads;
(c) Officials of the diplomatic service occupying the
position of consul and higher;
(d) Philippine Army and air force colonels, naval
captains, and all officers of higher rank;
(e) PNP chief superintendent and PNP officers of
higher rank;

Republic Act 6758, or PNP officers occupying the rank of

superintendent or higher, or their equivalent, exclusive jurisdiction
thereof shall be vested in the proper regional trial court, metropolitan
trial court, municipal trial court, and municipal circuit trial court, as the
case may be, pursuant to their respective jurisdictions as provided in
Batas Pambansa Blg. 129.
The Sandiganbayan shall exercise exclusive appellate jurisdiction on
appelas from the final judgment, resolutions or orders of regular court
where all the accused are occupying positions lower than grade "27,"
or not otherwise covered by the preceding enumeration.
xxx xxx xxx

(f) City and provincial prosecutors and their

assistants, and officials and prosecutors in the Office
of the Ombudsman and special prosecutor;
(g) Presidents, directors or trustees, or managers of
government-owned or controlled corporations, state
universities or educational institutions or
foundations;
(2) Members of Congress or officials thereof classified as Grade "27"
and up under the Compensation and Position Classification Act of
1989;
(3) Members of the judiciary without prejudice to the provisions of the
Constitution;
(4) Chairman and members of the Constitutional Commissions,
without prejudice to the provisions of the Constitution;
(5) All other national and local officials classified as Grade "27" or
higher under the Compensation and Position Classification Act of
1989.
b. Other offenses or felonies committed by the public officials and
employees mentioned in Subsection a of this section in relation to
their office.
c. Civil and criminal cases files pursuant to and in connection with
Executive Order Nos. 1, 2, 14, and 4-A.
In cases where none of the principal accused are occupying positions
corresponding to salary Grade "27" or higher, as presribed in the said

In case private individuals are charged as co-principals, accomplices or

accessories with the public officers or employees, including those
employed in government-owned or controlled corporations, they shall
be tried jointly with said public officers and employees in the proper
courts which shall have exclusive jurisdiction over them.
xxx xxx xxx (Emphasis supplied)
Sec. 7 of R.A. No. 7975 reads:
Sec. 7. Upon the effectivity of this Act, all criminal cases in which trial
has not begun in the Sandiganbayan shall be referred to the proper
courts.
Under paragraphs a and c, Section 4 of R.A. 8249, the word "principal" before the word
"accused" appearing in the above-quoted Section 2 (paragraphs a and c) of R.A. 7975,
was deleted. It is due to this deletion of the word "principal" that the parties herein are
at loggerheads over the jurisdiction of the Sandiganbayan. Petitioner and intervenors,
relying on R.A. 7975, argue that the Regional Trial Court, not the Sandiganbayan, has
jurisdiction over the subject criminal cases since none of the principal accused under the
28
amended information has the rank of Superintendent or higher. On the other hand,
the Office of the Ombudsman, through the Special Prosecutor who is tasked to
29
represent the People before the Supreme Court except in certain cases, contends that
the Sandiganbayan has jurisdiction pursuant to R.A. 8249.
A perusal of the aforequoted Section 4 of R.A. 8249 reveals that to fall under the
exclusive original jurisdiction of the Sandiganbayan, the following requisites must
concur: (1) the offense committed is a violation of (a) R.A. 3019, as amended (the AntiGraft and Corrupt Practices Act), (b) R.A. 1379 (the law on ill-gotten wealth), (c) Chapter
30
II, Section 2, Title VII, Book II of the Revised Penal Code (the law on bribery), (d)
31
Executive Order Nos. 1, 2, 14, and 14-A, issued in 1986 (sequestration cases), or (e)
other offenses or felonies whether simple or complexed with other crimes; (2) the

offender comitting the offenses in items (a), (b), (c) and (e) is a public official or
32
employee holding any of the positions enumerated in paragraph a of Section 4; and
(3) the offense committed is in relation to the office.
Considering that herein petitioner and intervenors are being charged with murder which
is a felony punishable under Title VIII of the Revised Penal Code, the governing on the
jurisdictional offense is not paragraph a but paragraph b, Section 4 of R.A. 8249. This
paragraph b pertains to "other offenses or felonies whether simple or complexed with
other crimes committed by the public officials and employees mentioned in subsection
a of (Section 4, R.A. 8249) in relation to their office. "The phrase" other offenses or
felonies" is too broad as to include the crime of murder, provided it was committed in
relation to the accused's officials functions. Thus, under said paragraph b, what
determines the Sandiganbayan's jurisdiction is the official position or rank of the
offender that is, whether he is one of those public officers or employees enumerated
in paragraph a of Section 4. The offenses mentioned in pargraphs a, b and c of the same
Section 4 do not make any reference to the criminal participation of the accused public
officer as to whether he is charged as a principal, accomplice or accessory. In enacting
R.A. 8249, the Congress simply restored the original provisions of P.D. 1606 which does
not mention the criminal participation of the public officer as a requisite to determine
the jurisdiction of the Sandiganbayan.
Petitioner and entervenors' posture that Section 4 and 7 of R.A. 8249 violate their right
33
to equal protection of the law because its enactment was particularly directed only to
the Kuratong Baleleng cases in the Sandiganbayan, is a contention too shallow to
deserve merit. No concrete evidence and convincing argument were presented to
warrant a declaration of an act of the entire Congress and signed into law by the highest
officer of the co-equal executive department as unconstitutional. Every classification
made by law is presumed reasonable. Thus, the party who challenges the law must
34
present proof of arbitrariness.
It is an established precept in constitutional law that the guaranty of the equal
protection of the laws is not violated by a legislation based on reasonable classification.
The classification is reasonable and not arbitrary when there is concurrence of four
elements, namely:
(1) it must rest on substantial distinction;
(2) it must be germane to the purpose of the law;
(3) must not be limited to existing conditions only, and
(4) must apply equaly to all members of the same class,
all of which are present in this case.

35

The challengers of Sections 4 and 7 of R.A. 8249 failed to rebut the presumption of
constitutionality and reasonables of the questioned provisions. The classification
between those pending cases involving the concerned public officials whose trial has not
yet commence and whose cases could have been affected by the amendments of the
Sandiganbayan jurisdiction under R.A. 8249, as against those cases where trial had
already started as of the approval of the law, rests on substantial distinction that makes
36
real differences. In the first instance, evidence against them were not yet presented,
whereas in the latter the parties had already submitted their respective proofs,
examined witnesses and presented documents. Since it is within the power of Congress
37
to define the jurisdiction of courts subject to the constitutional limitations, it can be
reasonably anticipated that an alteration of that jurisdiction would necessarily affect
pending cases, which is why it has to privide for a remedy in the form of a transitory
provision. Thus, petitioner and intervenors cannot now claim that Sections 4 and 7
placed them under a different category from those similarly situated as them. Precisely,
paragraph a of Section 4 provides that it shall apply to "all case involving" certain public
officials and, under the transitory provision in Section 7, to "all cases pending in any
court." Contrary to petitioner and intervenors' argument, the law is not particularly
directed only to the Kuratong Baleleng cases. The transitory provision does not only
cover cases which are in the Sandiganbayan but also in "any court." It just happened
that Kuratong Baleleng cases are one of those affected by the law. Moreover, those
cases where trial had already begun are not affected by the transitory provision under
Section 7 of the new law (R.A. 8249).
In their futile attempt to have said sections nullified, heavy reliance is premised on what
is perceived as bad faith on the part of a Senator and two Justices of the
38
Sandiganbaya for their participation in the passage of the said provisions. In particular,
it is stressed that the Senator had expressed strong sentiments against those officials
involved in the Kuratong Baleleng cases during the hearings conducted on the matter by
the committee headed by the Senator. Petitioner further contends that the legislature is
biased against him as he claims to have been selected from among the 67 million other
Filipinos as the object of the deletion of the word "principal" in paragraph a, Section 4 of
39
P.D. 1606, as amended, and of the transitory provision of R.A. 8249. R.A 8249, while
still a bill, was acted, deliberated, considered by 23 other Senators and by about 250
Representatives, and was separately approved by the Senate and House of
Representatives and, finally, by the President of the Philippines.
On the perceived bias that the Sandiganbayan Justices allegedly had against petitioner
during the committe hearings, the same would not constitute sufficient justification to
nullify an otherwise valid law. Their presence and participation in the legislative
hearings was deemed necessary by Congress since the matter before the committee
involves the graft court of which one is the head of the Sandiganbayan and the other a
member thereof. The Congress, in its plenary legislative powers, is particularly
empowered by the Constitution to invite persons to appear before it whenever it
40
decides to conduct inquiries in aid of legislation.

Petitioner and entervenors further further argued that the retroactive application of
41
R.A. 8249 to the Kuratong Baleleng cases constitutes an ex post facto law for they are
deprived of their right to procedural due process as they can no longer avail of the twotiered appeal which they had allegedly acquired under R.A. 7975.

Court as not a penal law, but clearly a procedural statute, i.e. one which prescribes rules
of procedure by which courts applying laws of all kinds can properly administer
49
justice. Not being a penal law, the retroactive application of R.A. 8249 cannot be
challenged as unconstitutional.

Again, this contention is erroneous. There is nothing ex post facto in R.A. 8249. In Calder
42
v. Bull, an ex post facto law is one

Petitioner's and entervenors' contention that their right to a two-tiered appeal which
they acquired under R.A. 7975 has been diluted by the enactment of R.A. 8249, is
incorrect. The same contention has already been rejected by the court several
50
times considering that the right to appeal is not a natural right but statutory in nature
that can be regulated by law. The mode of procedure provided for in the statutory right
51
of appeal is not included in the prohibition against ex post facto laws. R.A. 8249
pertains only to matters of procedure, and being merely an amendatory statute it does
not partake the nature of an ex post facto law. It does not mete out a penalty and,
52
therefore, does not come within the prohibition. Moreover, the law did not alter the
53
rules of evidence or the mode of trial. It has been ruled that adjective statutes may be
54
made applicable to actions pending and unresolved at the time of their passage.

(a) which makes an act done criminal before the

passing of the law and which was innocent when
committed, and punishes such action; or
(b) which aggravates a crime or makes it greater
than when it was committed; or
(c) which changes the punishment and inflicts a
greater punishment than the law annexed to the
crime when it was committed.
(d) which alters the legal rules of evidence and
recieves less or different testimony that the law
required at the time of the commission of the
43
offense on order to convict the defendant.
(e) Every law which, in relation to the offense or its
consequences, alters the situation of a person to his
44
disadvantage.
This Court added two more to the list, namely:
(f) that which assumes to regulate civil rights and
remedies only but in effect imposes a penalty or
deprivation of a right which when done was lawful;
(g) deprives a person accussed of crime of some
lawful protection to which he has become entitled,
such as the protection of a former conviction or
45
acquittal, or a proclamation of a amnesty.
46

Ex post facto law, generally, prohibits retrospectivity of penal laws. R.A. 8249 is not
penal law. It is a substantive law on jurisdiction which is not penal in character. Penal
laws are those acts of the Legislature which prohibit certain acts and establish penalties
47
for their violations; or those that define crimes, treat of their nature, and provide dor
48
their punishment. R.A 7975, which amended P.D. 1606 as regards the Sandiganbayan's
jurisdiction, its mode of appeal and other procedural matters, has been declared by the

In any case; R.A. 8249 has preserved the accused's right to appeal to the Supreme Court
55
to review questions of law. On the removal of the intermediate review of facts, the
Supreme Court still has the power of review to determine if he presumption of
56
innocence has been convincing overcome.
Another point. The challenged law does not violate the one-title-one-subject provision
of the Constitution. Much emphasis is placed on the wording in the title of the law that
it "defines" the Sandiganbayan jurisdiction when what it allegedly does is to "expand" its
jurisdiction. The expantion in the jurisdiction of the Sandiganbayan, if it can be
considered as such, does not have to be expressly stated in the title of the law because
such is the necessary consequence of the amendments. The requirement that every bill
57
must only have one subject expressed in the title is satisfied if the title is
comprehensive enough, as in this case, to include subjects related to the general
58
purpose which the statute seeks to achieve. Such rule is liberally interpreted and
should be given a practical rather than a technical construction. There is here sufficient
compliance with such requirement, since the title of R.A. 8249 expresses the general
subject (involving the jurisdiction of the Sandiganbayan and the amendment of P.D.
1606, as amended) and all the provisions of the law are germane to that general
59
subject. The Congress, in employing the word "define" in the title of the law, acted
within its power since Section 2, Article VIII of the Constitution itself empowers the
60
legislative body to "define, prescribe, and apportion the jurisdiction of various courts.
There being no unconstitutional infirmity in both the subject amendatory provision of
Section 4 and the retroactive procedural application of the law as provided in Section 7
of R.A. No. 8249, we shall now determine whether under the allegations in the
Informations, it is the Sandiganbayan or Regional Trial Court which has jurisdictions over
the multiple murder case against herein petitioner and entervenors.

The jurisdiction of a court is defined by the Constitution or statute. The elements of that
definition must appear in the complaint or information so as to ascertain which court
has jurisdiction over a case. Hence the elementary rule that the jurisdiction of a court is
61
determined by the allegations in the complaint or informations, and not by the
62
evidence presented by the parties at the trial.
As stated earlier, the multiple murder charge against petitioner and intervenors falls
under Section 4 [paragraph b] of R.A. 8249. Section 4 requires that the offense charged
must be committed by the offender in relation to his office in order for the
63
Sandiganbayan to have jurisdiction over it. This jurisdictional requirement is in
accordance with Section 5, Article XIII of the 1973 Constitution which mandated that the
Sandiganbayan shall have jurisdiction over criminal cases committed by the public
officers and employees, including those in goverment-owned or controlled
corporations, "in relation to their office as may be determined by law." This
constitutional mandate was reiterated in the new (1987) Constitution when it declared
in Section 4 thereof that the Sandiganbayan shall continue to function and exercise its
jurisdiction as now or hereafter may be provided by law.
The remaining question to be resolved then is whether the offense of multiple murder
was committed in relation to the office of the accussed PNP officers.
64

In People vs. Montejo, we held that an offense is said to have been committed in
relation to the office if it (the offense) is "intimately connected" with the office of the
offender and perpetrated while he was in the performance of his official
65
functions. This intimate relation between the offense charged and the discharge of
66
official duties "must be alleged in the informations."
As to how the offense charged be stated in the informations, Section 9, Rule 110 of the
Revised Rules of Court mandates:

The object of this written accusations was First; To furnish the

accused with such a descretion of the charge against him as will
enable him to make his defense and second to avail himself of his
conviction or acquittal for protection against a further prosecution for
the same cause and third, to inform the court of the facts alleged so
that it may decide whether they are sufficient in law to support a
conviction if one should be had. In order that the requirement may be
satisfied, facts must be stated, not conclusions of law. Every crime is
made up of certain acts and intent these must be set forth in the
complaint with reasonable particularly of time, place, names (plaintiff
and defendant) and circumstances. In short, the complaint must
contain a specific allegation of every fact andcircumstance necessary
to constitute the crime charged. (Emphasis supplied)
It is essential, therefore, that the accused be informed of the facts that are imputed to
him as "he is presumed to have no indefendent knowledge of the facts that constitute
70
the offense."
Applying these legal principles and doctrines to the present case, we find the amended
informations for murder against herein petitioner and intervenors wanting of specific
factual averments to show the intimate relation/connection between the offense
charged and the discharge of official function of the offenders.
In the present case, one of the eleven (11) amended informations

71

for murder reads:

AMENDED INFORMATIONS

As early as 1954 we pronounced that "the factor that characterizes the charge is the
67
actual recital of the facts." The real nature of the criminal charge is determined not
from the caption or preamble of the informations nor from the specification of the
provision of law alleged to have been violated, they being conclusions of law, but by the
68
actual recital of facts in the complaint or information.

The undersigned Special Prosecution Officer III. Office of the

Ombudsman hereby accuses CHIEF INSP. MICHAEL RAY AQUINO,
CHIEF INSP. ERWIN T. VILLACORTE, SENIOR INSP. JOSELITO T.
ESQUIVEL, INSP. RICARDO G. DANDAN, SPO4 VICENTE P. ARNADO,
SPO4 ROBERTO F. LANGCAUON, SPO2 VIRGILIO V. PARAGAS, SPO2
ROLANDO R. JIMENEZ, SPO1 WILFREDO C. CUARTERO, SPO1 ROBERTO
O. AGBALOG, SPO1 OSMUNDO B. CARINO, CHIEF SUPT. JEWEL F.
CANSON, CHIEF SUPT. ROMEO M. ACOP, CHIEF SUPT. PANFILO M.
LACSON, SENIOR SUPT. FRANCISCO G. ZUBIA JR., SUPT. ALMARIO A.
HILARIO, CHIEF INSP. CESAR O. MANCAO III, CHIEF INSP. GIL L.
MENESES, SENIOR INSP. GLENN DUMLAO, SENIOR INSP. ROLANDO
ANDUYAN, INSP. CEASAR TANNAGAN, SPO3 WILLY NUAS, SPO3
CICERO S. BACOLOD, SPO2 NORBERTO LASAGA, PO2 LEONARDO
GLORIA, and PO2 ALEJANDRO G. LIWANAG of the crime of Murder as
defined and penalize under Article 248 of the Revised Penal Code
committed as follows

The noble object or written accusations cannot be overemphasized. This was explained
in U.S. v. Karelsen: 69

That on or about May 18, 1995 in Mariano Marcos Avenue, Quezon

City Philippines and within the jurisdiction of his Honorable Court, the

Sec. 9 Couse of accusation The acts or omissions complied of as

constituting the offense must be stated in ordinary and concise
language without repetition not necessarily in the terms of the statute
defining the offense, but in such from as is sufficient to enable a person
of common understanding to know what offense is intended to be
charged, and enable the court to pronounce proper judgment.
(Emphasis supplied)

accused CHIEF INSP. MICHAEL RAY AQUINO, CHIEF INSP. ERWIN T.

VILLACORTE, SENIOR INSP. JOSELITO T. ESQUIVEL, INSP. RICARDO G.
DANDAN, SPO4 VICENTE ARNADO, SPO4 ROBERTO F. LANGCAUON,
SPO2 VIRGILIO V. PARAGAS, SPO2 ROLANDO R. JIMENEZ, SPO1
WILFREDO C. CUARTERO, SPO1 ROBERTO O. AGBALOG, and SPO1
OSMUNDO B. CARINO, all taking advantage of their public and official
positions as officers and members of the Philippine National Police
and committing the acts herein alleged in relation to their public
office, conspiring with intent to kill and using firearms with treachery
evident premeditation and taking advantage of their superior
strenghts did then and there willfully unlawfully and feloniously shoot
JOEL AMORA, thereby inflicting upon the latter mortal wounds which
caused his instantaneous death to the damage and prejudice of the
heirs of the said victim.
That accused CHIEF SUPT. JEWEL F. CANSON, CHIEF SUPT. ROMOE M.
ACOP, CHIEF SUPT. PANFILO M. LACSON, SENIOR SUPT. FRANCISCO G.
ZUBIAM JR., SUPT. ALMARIO A. HILARIO, CHIEF INSP. CESAR O.
MANCAO II, CHIEF INSP. GIL L. MENESES, SENIOR INSP. GLENN
DUMLAO, SENIOR INSP. ROLANDO ANDUYAN, INSP. CEASAR
TANNAGAN, SPO3 WILLY NUAS, SPO3 CICERO S. BACOLOD, PO2
ALEJANDRO G. LIWANAG committing the acts in relation to office as
officers and members of the Philippine National Police are charged
herein as accessories after-the-fact for concealing the crime herein
above alleged by among others falsely representing that there
where no arrest made during the read conducted by the accused
herein at Superville Subdivision, Paranaque, Metro Manila on or about
the early dawn of May 18, 1995.
CONTRARY LAW.
While the above-quoted information states that the above-named principal accused
committed the crime of murder "in relation to thier public office, there is, however, no
specific allegation of facts that the shooting of the victim by the said principal accused
was intimately related to the discharge of their official duties as police officers. Likewise,
the amended information does not indicate that the said accused arrested and
investigated the victim and then killed the latter while in their custody.
Even the allegations concerning the criminal participation of herein petitioner and
intevenors as among the accessories after-the-facts, the amended information is vague
on this. It is alleged therein that the said accessories concelead "the crime herein-above
alleged by, among others, falsely representing that there were no arrests made during
the raid conducted by the accused herein at Superville Subdivision, Paranaque Metro
Manila, on or about the early dawn of May 18, 1995." The sudden mention of the
"arrests made during the raid conducted by the accused" surprises the reader. There is
no indication in the amended information that the victim was one of those arrested by

the accused during the "raid." Worse, the raid and arrests were allegedly conducted "at
Superville Subdivision, Paranaque, Metro Manila" but, as alleged in the immediately
preceding paragraph of the amended information, the shooting of the victim by the
principal accused occurred in Mariano Marcos Avenue, Quezon City." How the raid,
arrests and shooting happened in the two places far away from each other is puzzling.
Again, while there is the allegation in the amended information that the said accessories
committed the offense "in relation to office as officers and members of the (PNP)," we,
however, do not see the intimate connection between the offense charged and the
accused's official functions, which, as earlier discussed, is an essential element in
determining the jurisdiction of the Sandiganbayan.
The stringent requirement that the charge be set forth with such particularly as will
reasonably indicate the exact offense which the accused is alleged to have committed in
relation to his office was, sad to say, not satisfied. We believe that the mere allegation
in the amended information that the offense was committed by the accused public
officer in relation to his office is not sufficient. That phrase is merely a conclusion
between of law, not a factual avernment that would show the close intimacy between
the offense charged and the discharge of the accused's official duties.
72

In People vs. Magallanes, where the jurisdiction between the Regional Trial Court and
the Sandiganbayan was at issue, we ruled:
It is an elementary rule that jurisdiction is determined by the
allegations in the complaint or information and not by the result of
evidence after trial.
In (People vs) Montejo (108 Phil 613 (1960), where the amended
information alleged
Leroy S. Brown City Mayor of Basilan City, as such,
has organized groups of police patrol and civilian
commandoes consisting of regular policeman and . .
. special policemen appointed and provided by him
with pistols and higher power guns and then
established a camp . . . at Tipo-tipo which is under
his command . . . supervision and control where his
co-defendants were stationed entertained criminal
complaints and conducted the corresponding
investigations as well as assumed the authority to
arrest and detain person without due process of law
and without bringing them to the proper court, and
that in line with this set-up established by said
Mayor of Basilan City as such, and acting upon his
orders his co-defendants arrested and maltreated
Awalin Tebag who denied in consequence thereof.

we held that the offense charged was committed in relation to the

office of the accused because it was perpetreated while they were in
the performance, though improper or irregular of their official
functions and would not have been committed had they not held their
office, besides, the accused had no personal motive in committing the
crime thus, there was an intimate connection between the offense
and the office of the accused.
Unlike in Montejo the informations in Criminal Cases Nos. 15562 and
15563 in the court below do not indicate that the accused arrested
and investigated the victims and then killed the latter in the course of
the investigation. The informations merely allege that the accused for
the purpose of extracting or extortin the sum of P353,000.00
abducted, kidnapped and detained the two victims, and failing in their
common purpose they shot; and killed the said victims. For the
purpose of determining jurisdiction, it is these allegations that shall
control, and not the evidence presented by the prosecution at the
trial.
In the aforecited case of People vs. Montejo, it is noteworthy that the phrase committed
in relation to public office "does not appear in the information, which only signifies that
the said phrase is not what determines the jurisdiction of the Sandiganbayan. What is
controlling is the specific factual allegations in the information that would indicate the
close intimacy between the discharge of the accused's official duties and the
commission of the offense charged, in order to qualify the crime as having been
committed in relation to public office.
Consequently, for failure to show in the amended informations that the charge of
murder was intimately connected with the discharge of official functions of the accused
PNP officers, the offense charged in the subject criminal cases is plain murder and,
73
therefore, within the exclusive original jurisdiction of the Regional Trial Court, not the
Sandiganbayan.
WHEREFORE, the constitutionality of Sections 4 and 7 of R.A. 8249 is hereby sustained.
The Addendum to the March 5, 1997 Resolution of the Sandiganbayan is REVERSED. The
Sandiganbayan is hereby directed to transfer Criminal Cases Nos. 23047 to 23057 (for
multiple murder) to the Regional Trial Court of Quezon City which has exclusive original
jurisdiction over the said cases.1wphi1.nt
SO ORDERED.
Davide, Jr., CJ., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza, Panganiban,
Quisumbing, Purisima, Pardo, Buena and Gonzaga-Reyes, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 123936 March 4, 1999

RONALD SORIANO, petitioner,
vs.
COURT OF APPEALS; HON. RODOLFO V. TOLEDANO, Presiding Judge of the Regional
Trial Court, Branch 69, Third Judicial Region, Iba Zambales; THE PROVINCIAL SHERIFF,
Third Judicial Region, Iba, Zambales; Ms. NELDA DA MAYCONG, Suprvising Parole and
Probation Officer and Officer-in-Charge, Zambales Parole and Probation Office; and
THE PEOPLE OF THE PHILIPPINES, respondents.
QUISUMBING, J.:
This is a petition for certiorari of the decision of the Court of Appeals in C.A. G.R. SP No.
1
35550, which upheld the trial court's orders holding petitioner in contempt and
revoking his probation.
The fact of the case are as follows:
Petitioner Ronald Santiago was convicted of the crime of Reckless Imprudence resulting
to homicide, serious physical injuries and damage to property on December 7,
2
1993. His application for probation was granted on March 8, 1994, and among the
3
terms and conditions imposed by the trial court were the following:
xxx xxx xxx
7. He shall meet his family responsibilities.
8. He shall devote himself to a specific employment and shall not
change employment without prior notice to the supervising officer;
and/or shall pursue a prescribed secular study or vocational training.

On April 26, 1994, Assistant Prosecutor Benjamin A Fadera filed a motion to cancel
petitioner's probation due to his failure to satisfy his civil liability to the heirs of the
victim, and a supplemental motion alleging petitioner's commission of another crime for
which at that time he was awaiting arraignment. The Zambales Parole and Probation
Office filed a comment recommending that the petitioner be allowed to continue with
his probation and that he be required instead to submit a program of payment of his
civil liability.
On June 20, 1994, the trial court denied the prosecutor's motion and directed petitioner
to submit a program of payment of the civil liability imposed upon him.
Thereafter, probation officer Nelda D. Maycong received information that petitioners
father who owned the vehicle involved in the accident which killed Daluyong, received
P16,500.00 as insurance payment. This amount was not turned over to the heirs of
Daluyong and Da Maycong considered this a violation of the terms and conditions of the
probation. She submitted a manifestation to the trial court praying that the petitioner
be made to explain his non-compliance with the court's order of June 20, 1994, or that
be cited for contempt for such non-compliance. Da Maycong also asked that petitioner
be made to submit a program of payment as soon as possible. The trial court granted his
prayers in an order dated August 15, 1994. Petitioner was once again ordered to
submits his program of payment. Petitioner instead filed a motion for reconsideration
explaining that he did not receive a copy of said order on June 23, 1994 but failed to
notify petitioner. Thus, the latter failed to comply with said order.
On October 4, 1994, the trial court issued an order declaring petitioner in contempt of
court for his failure to comply with its orders of June 20, 1994 and August 15, 1994. The
court likewise revoked the grant of probation to petitioner and ordered that he be
arrested to serve the sentence originally imposed upon him. According to the trial court,
among the violation committed by petitioner as regards his probation are his failure to
(1) meet his responsibilities to his family, (2) engage in a specific employment, and (3)
cooperate with his program of supervision.
Petitioner then filed a special civil action for certiorari with the Court of Appeals. He
claimed that respondent judge committed grave abuse of discretion amounting to lack
of, or in excess of, jurisdiction in holding petitioner in contempt and revoking his
probation. The Court of Appeals dismissed the petition, holding that petitioner's
"stubborn unwillingness" to comply with the orders of the trial court "shows his refusal
4
to reform himself and to correct a wrong."
According to the Court of Appeals:

xxx xxx xxx

11. He is to indemnify the heirs of the victim Isidrino Daluyong in the
amount of P98,560.00 as ordered by the Court.
xxx xxx xxx

Where probation was approved and probationer has proven to be

unrepentant and disrespectful and even showed clear defiance to two
lawful court orders, as in the case of herein petitioner, the court is not
5
barred from revoking the same.

Petitioner's motion for reconsideration was likewise denied by the Court of Appeals for
lack of merit.

program of payment of civil liability must take into consideration the needs and capacity
9
of petitioner."

Hence, this petition for review, in which petitioner makes the following assignment of
6
errors.

Petitioner claims that his failure to meet his responsibilities to his family and to engage
in gainful employment is not deliberate but is due to his poverty. He adds that his being
unskilled, with a criminal record to his name, does not exactly enhance his chances for
employment.

1. Respondent Court of Appeals erred in failing to rule that respondent

judge committed grave abuse of discretion in finding that there was
deliberate refusal on the part of petitioner to comply with his orders
dated June 20, 1994 and August 15, 1994 and subsequently declaring
petitioner in contempt.
2. Respondent Court of Appeals erred in failing to rule that respondent
judge committed grave abuse of discretion in revoking the probation
order he earlier issued in favor of petitioner on the ground that
petitioner failed to satisfy the award of civil indemnity for the heirs of
the accident victim.
3. Respondent Court of Appeals erred in failing to rule that respondent
judge committed grave abuse of discretion in revoking the probation
order he earlier issued in favor of petitioner on the ground that the
latter violated the conditions of his probation three times.
Petitioner asserts that he had no intention to ignore the orders of the trial court. The
court's order of June 20, 1994 was received by his counsel who, however, did not notify
petitioner. Petitioner says that his "former counsel's irresponsible delay (in informing
7
him of the order) should not prejudice him."
He explains that his non-compliance with the order to submit a program of payment of
his civil liability is, ultimately, due to his poor financial condition. He only relies on his
parents for support. He claims that it is impossible for him to formulate a payment
program because, in the first place, he is in no position to comply with the same.
Petitioner avers that to require him to satisfy his civil liability in order to continue to
avail of the benefits of probation is to violate the constitutional proscription against
unequal protection of the law. He says only moneyed probationers will be able to
benefit from probation if satisfaction of civil liability is made a condition.
Petitioner contends that his enjoyment of probation should not be made to depend on
the satisfaction of his civil liability. He invokes the separate opinion of Justice Isagani A.
8
Cruz in Salgado v. Court of Appeals, particularly Justice Cruz' reservation about the
validity of imposing satisfaction of civil liability as a condition for probation such an
imposition is in the nature of an amendment of the decision of the trial court in the
criminal case against him, which cannot be allowed since the decision is already final
and executory. He further invokes the majority decision in Salgado and asserts that "any

Finally, petitioner cites our decision in Baclayon v. Mutia:

10

. . . Conditions should be interpreted with flexibility in their application

and each case should be judged on its own merits on the basis of
the problems, needs and capacity of the probationer. The very
liberality of the probation should not be made a tool by trial courts to
11
stipulate instead unrealistic terms.
In his comment, the Solicitor General asks for the dismissal of the petition. The only
issue to be resolved according to him is whether or not petitioner has violated the terms
and conditions of his probation warrant its revocation. The Solicitor General argues that
petitioner has committed violations, thus justifying the trial court' s revocation of the
grant of probation. He further points out that our ruling in Salgado is inapplicable to the
case of petitioner since what was involved in Salgado was a program of payment
already imposed upon petitioner therein. In this case, however, it is petitioner who is
being asked to submit his own program of payment and he had not submitted any such
program:
The only issue for us to resolve in this case is whether or not the revocation of
petitioner's probation is lawful and proper.
Petitioner asserts that his non-compliance with the orders of the trial court requiring
him to submit a program of payment was not deliberate. To our mind, his refusal to
comply with said orders cannot be anything but deliberate. He had notice of both
orders, although the notice of the order of June 20, 1994 came belatedly. He has, up to
this point, refused to comply with the trial court's directive, by questioning instead the
constitutionality of the requirement imposed and harping on his alleged poverty as the
reason for his failure to comply.
Contrary to his assertion, this requirement is not violative of the equal protection clause
of the Constitution. Note that payment of the civil liability is not made a
condition precedent to probation. If it were, then perhaps there might be some basis to
petitioner's assertion that only moneyed convicts may avail of the benefits of probation.
In this case, however, petitioner's application for probation had already been granted.
Satisfaction of his civil liability was not made a requirement before he could avail a
probation, but was a condition for his continued enjoyment of the same.

The trial court could not have done away with imposing payment of civil liability as a
condition for probation, as petitioner suggests. This is not an arbitrary imposition but
one required by law. It is a consequence of petitioner's having been convicted of a
12
crime, and petitioner is bound to satisfy this obligation regardless of whether or not
he is placed under probation.
We fail to see why petitioner cannot comply with a simple order to furnish the trial
court with a program of payment of his civil liability. He may, indeed, be poor, but this is
precisely the reason why the trial court gave him the chance to make his own program
of payment. Knowing his own financial condition, he is in the best position to formulate
a program of payment that fits his needs and capacity.
Petitioner blames his former counsel's "irresponsible delay" in informing him of the trial
court's order to come up with a program of payment for his failure to make such a
program. Petitioner wants to take exception to the rule that notice to counsel is notice
to client.
We find no reason to make an exception in this case. Petitioner's counsel has not been
shown to be grossly irresponsible as to cause prejudice to petitioner's
13
rights. Moreover, we note that petitioner later on discovered that such a court order
was received by his counsel. He could have endeavored to comply with the order then.
In the June 20, 1994 order, he was given 10 days from receipt of the order within which
to comply. The same period was given him in the order of August 15, 1994. Petitioner
does not claim that he failed to receive notice of the latter order. In fact, he submitted a
motion for reconsideration of said order, but still without the required program of
payment.
No justifiable reason has been given by petitioner for ignoring those two orders. The
trial court could not be faulted for citing him in contempt for his failure to comply with
its orders. Nor did it abuse gravely its discretion in issuing said orders. Hence, we are in
full agreement with respondent appellate court's decision as well.

court's decision had already become final, it can no longer be amended by imposing a
program of payment, in installments, of the civil liability.
We held in Salgado, that the program of payment is not an amendment of the decision
of the trial court because it does not increase or decrease the liability and the obligation
to pay is to be fulfilled during the period of probation.
Unlike in Salgado, herein petitioner was being asked to make a program of payment.
But he failed to do so. Hence, in this case, there is yet no program of payment to speak
of, because of petitioner's stubborn refusal and delay as well as failure to abide by the
trial court's orders.
Petitioner's reliance on Baclayon is likewise misplaced. In that case, what was being
assailed as an unrealistic condition was the trial court's requirement that petitioner
therein, a teacher convicted of Serious Oral Defamation, refrain from exercising her
profession. This condition was deemed unreasonable because teaching was the only
profession she knew and it appeared that she excelled in teaching. No unrealistic
condition similar to the one inBaclayan has been imposed upon petitioner herein.
As regards the other violations committed by petitioner, the question of whether or not
petitioner has, indeed, violated the terms and conditions of his probation is evidently a
factual one which had already been passed upon by both the trial court and the Court of
Appeals. Settled is the rule in this jurisdiction that findings of fact of the trial court are
14
entitled to great weight, more so when they are affirmed by the Court of Appeals, as
in this case.
Besides, petitioner himself admits in his petition that he is unemployed and only
15
depends on his parents for support. He can barely support his family. Petitioner ought
to be reminded of what is incumbent on a probationer, including those requirements
that the trial court may set.
As Section 10 of the Probation Law states:

Moreover, petitioner's continued refusal to submit a program of payment, along with

his prayer for the deletion of the requirement of payment of civil liability from his
probation order, creates the impression that he wants to completely avoid paying his
civil liability. This he cannot do. He cannot escape payment of his civil liability, with or
without a program of payment.
Petitioner's reliance on Salgado is misplaced. In that case, the trial court itself
formulated the manner by which Salgado was to satisfy his civil liability. He was able to
comply for a few months. When he started skipping his payments, his victim sought the
issuance of a writ of execution to enforce full payment of the civil liability. The trial court
granted this motion and it was sustained by the Court of Appeals which ruled that the
program of payment amounted to an amendment of the decision of the trial court
ordering payment of civil liability but without a program of payment. Since the trial

Sec. 10. Conditions of Probation. . . .

The court may also require the probationer to:
(a) Cooperate with a program of supervision;
(b) Meet his family responsibilities;
(c) Devote himself to a specific employment and not to change said
employment without the prior written approval of the probation
officer

xxx xxx xxx

(e) Pursue a prescribed secular study or vocational training;
xxx xxx xxx

16

Clearly, these conditions are not whims of the trial court but are requirements laid
down by statute. They are among the conditions that the trial court is empowered to
impose and the petitioner, as probationer, is required to follow. Only by satisfying these
conditions may the purposes of probation be fulfilled. These include promoting the
correction and rehabilitation of an offender by providing him with individualized
treatment, and providing an opportunity for the reformation of a penitent offender
16
which might be less probable if he were to serve a prison sentence. a Failure to comply
will result in the revocation of the order granting probation, pursuant to the Probation
Law:
Sec. 11. Effetivity of Probation Order. A probation order shall take
effect upon its issuance, at which time the court shall inform the
offender of the consequences thereof and explain that upon his failure
to comply with any of the conditions prescribed in the said order or his
commission of another offense, he shall serve the penalty imposed for
16
the offense under which he was placed on probation." b (Emphasis
supplied.)
Probation is not an absolute right. It is a mere privilege whose grant rests upon the
17
discretion of the trial court. Its grant is subject to certain terms and conditions that
may be imposed by the trial court. Having the power to grant probation, it follows that
the trial court also has the power to order its revocation in a proper case and under
appropriate circumstances.
Moreover, having admittedly violated the terms and conditions of his probation,
petitioner cannot now assail the revocation of his probation. Regrettably, he has
squandered the opportunity granted him by the trial court to remain outside prison
bars, and must now suffer the consequences of those aforecited violations.
WHEREFORE, the petition is hereby DENIED and the assailed decision of the Court of
Appeals in C.A. G.R. SP No. 35550 is AFFIRMED.
SO ORDERED.
Bellosillo, Puno, Mendoza, and Buena, JJ., concur.

EN BANC
[G.R. No. 133676. April 14, 1999]
TUPAY T. LOONG, petitioner, vs. COMMISSION ON ELECTIONS and ABDUSAKUR
TAN, respondents, YUSOP JIKIRI, intervenor.
DECISION
PUNO, J.:
In a bid to improve our elections, Congress enacted R.A. No. 8436 on December 22,
1997 prescribing the adoption of an automated election system. The new system was
used in the May 11, 1998 regular elections held in the Autonomous Region in Muslim
Mindanao (ARMM) which includes the Province of Sulu. Atty. Jose Tolentino, Jr. headed
the COMELEC Task Force to have administrative oversight of the elections in Sulu.
[1]

The voting in Sulu was relatively peaceful and orderly. The problem started
during the automated counting of votes for the local officials of Sulu at the Sulu State
College. At about 6 a.m. of May 12, 1998, some election inspectors and watchers
informed Atty. Tolentino, Jr. of discrepancies between the election returns and the
votes cast for the mayoralty candidates in the municipality of Pata. Some ballots picked
at random by Atty. Tolentino, Jr. confirmed that votes in favor of a mayoralty candidate
were not reflected in the printed election returns. He suspended the automated
counting of ballots in Pata and immediately communicated the problem to the technical
experts of COMELEC and the suppliers of the automated machine. Afterconsultations,
the experts told him that the problem was caused by the misalignment of the ovals
opposite the names of candidates in the local ballots. They found nothing wrong with
the automated machines. The error was in the printing of the local ballots, as a
[2]
consequence of which, the automated machines failed to read them correctly.
At 12:30 p.m. of the same day, Atty. Tolentino, Jr. called for an emergency
meeting of the local candidates and the military-police officials overseeing the Sulu
elections. Those who attended were the various candidates for governor, namely,
petitioner Tupay Loong, private respondent Abdusakur Tan, intervenor Yusop Jikiri and
Kimar Tulawie. Also in attendance were Brig. Gen. Edgardo Espinosa, AFP, Marine
forces, Southern Philippines, Brig. Gen. Percival Subala, AFP, 3rd Marine Brigade, Supt.
Charlemagne Alejandrino, Provincial Director, Sulu, PNP Command and congressional
[3]
candidate Bensandi Tulawie.
The meeting discussed how the ballots in Pata should be counted in light of the
misaligned ovals. There was lack of agreement. Those who recommended a shift to
manual count were Brig. Generals Espinosa and Subala, PNP Director Alejandrino,
gubernatorial candidates Tan and Tulawie and congressional candidate Bensandi
Tulawie. Those who insisted on an automated count were gubernatorial candidates
Loong and Jikiri. In view of their differences in opinion, Atty. Tolentino, Jr. requested the
[4]
parties to submit their written position papers.

Reports that the automated counting of ballots in other municipalities in Sulu

was not working well were received by the COMELEC Task Force. Local ballots in five
(5) municipalities were rejected by the automated machines. These municipalities
were Talipao, Siasi, Tudanan, Tapul and Jolo. The ballots were rejected because they
[5]
had the wrong sequence code.
Private respondent Tan and Atty. Tolentino, Jr. sent separate communications to
the COMELEC en banc in Manila. Still, on May 12, 1998, Tan requested for the
[6]
suspension of the automated counting of ballots throughout the Sulu province. On the
same day, COMELEC issued Minute Resolution No. 98-1747 ordering a manual count but
[7]
only in the municipality of Pata. The resolution reads:
"x x x x x x x x x
"In the matter of the Petition dated May 12, 1998 of Abdusakur Tan, Governor, Sulu, to
suspend or stop counting of ballots through automation (sic) machines for the following
grounds, quoted to wit
'1.. The Election Returns for the Municipality of Pata, Province of Sulu-District II do not
reflect or reveal the mandate of the voters:
'DISCUSSIONS
'That the watchers called the attention of our political leaders and candidates regarding
their discovery that the election returns generated after the last ballots for a precinct is
scanned revealed that some candidates obtained zero votes, among others the
Provincial Board Members, Mayor, Vice-Mayor, and the councilors for the LAKAS-NUCDUMDP;
'That the top ballot, however, reveals that the ballots contained votes for
Anton Burahan, candidate for Municipal Mayor while the Election Return shows zero
vote;
'That further review of the Election Return reveals that John Masillam, candidate for
Mayor under the LAKAS-NUCD-UMDP-MNLF obtains (sic) 100% votes of the total
number of voters who actually voted;
'The foregoing discrepancies were likewise noted and confirmed by the chairmen, poll
clerks and members of the Board of Election Inspectors (BEI) such as Rena Jawan,
Matanka Hajirul, Dulba Kadil, Teddy Mirajuli, Rainer Talcon, Mike Jupakal, Armina
Akmad, Romulo Roldan and Lerma Marawali to mention some;
'The Pata incident can be confirmed by no less than Atty. Jose Tolentino, Head, Task
Force Sulu, whose attention was called regarding the discrepancies;

'The foregoing is a clear evidence that the automated machine (scanner) cannot be
relied upon as to truly reflect the contents of the ballots. If such happened in the
Municipality of Pata, it is very possible that the same is happening in the counting of
votes in the other municipalities of this province. If this will not be suspended or
stopped, the use of automated machines will serve as a vehicle to frustrate the will of
the sovereign people of Sulu;

"2. Petition of Governor Sakur Tan for manual counting;

'Wherefore, the foregoing premises considered and in the interest of an honest and
orderly election, it is respectfully prayed of this Honorable Commission that an Order be
issued immediately suspending or stopping the use of the automated machine (scanner)
in the counting of votes for all the eighteen (18) municipalities in the Province of Sulu
and in lieu thereof, to avoid delay, counting be done through the usual way known and
tested by us.'

"5. Recommendation of General E.V. Espinosa, General PM Subala, and PD CS

Alejandrino for manual count;

"While the commission does not agree with the conclusions stated in the petition, and
the failure of the machine to read the votes may have been occasioned by other
factors, a matter that requires immediate investigation, but in the public interest, the
Commission,
'RESOLVED to grant the Petition dated May 12, 1998 and to Order that the counting of
votes shall be done manually in the Municipality of PATA, the only place in Sulu where
the automated machine failed to read the ballots, subject to notice to all
parties concerned."'
Before midnight of May 12,1998, Atty. Tolentino, Jr. was able to send to the
COMELEC en banc his report and recommendation, urging the use of the manual count
[8]
in the entire Province of Sulu, viz:
"The undersigned stopped the counting in the municipality of Pata since he discovered
that votes for a candidate for mayor was credited in favor of the other
candidate. Verification with the Sulu Technical Staff, including Pat Squires of ES & S,
reveals that the cause of the error is the way the ballot was printed. Aside from
misalignment of the ovals and use of codes assigned to another municipality (which
caused the rejection of all local ballots in one precinct in Talipao), error messages
appeared on the screen although the actual condition of the ballots would have shown a
different message. Because of these, the undersigned directed that counting for all
ballots in Sulu be stopped to enable the Commission to determine the problem and
rectify the same. It is submitted that stopping the counting is more in consonance with
the Commission's mandate than proceeding with an automated but inaccurate count.
"In view of the error discovered in Pata and the undersigned's order to suspend the
counting, the following documents were submitted to him.
"1. Unsigned letter dated May 12, 1998 submitted by Congressman Tulawie for manual
counting and canvassing;

"3. Position paper of Tupay Loong, Benjamin Loong and Asani Tamang for automated
count;
"4. MNLF Position for automated count; and

"Additional marines have been deployed at the SSC. The undersigned is not sure if it is
merely intended to tame a disorderly crowd, inside and outside SSC, or a show of force.
"It is submitted that since an error was discovered in a machine which is supposed to
have an error rate of 1: 1,000,000, not a few people would believe that this error in
Pata would extend to the other municipalities. Whether or not this is true, it would be
more prudent to stay away from a lifeless thing that has sown tension and anxiety
among and between the voters of Sulu.
Respectfully
submitted:
12 May 1998
(Sgd.)
JOSE
TOLENTINO, JR."

M.

The next day, May 13, 1998, COMELEC issued Resolution No. 98-1750 approving
Atty. Tolentino, Jr.'s recommendation and the manner of its implementation as
[9]
suggested by Executive Director Resurreccion Z. Borra. The Resolution reads:
"In the matter of the Memorandum dated 13 May 1998 of Executive Director
Resurreccion Z. Borra, pertinent portion of which is quoted as follows:
"In connection with Min. Res. No. 98-1747 promulgated May 12, 1998 which resolved to
order that the counting of votes shall be done manually in the municipality of Pata, the
only place in Sulu where the automated counting machine failed to read the ballots,
subject to notice to all parties concerned, please find the following:
"1. Handwritten Memo of Director Jose M. Tolentino, Jr., Task Force Head, Sulu,
addressed to the Executive Director on the subject counting and canvassing in the
municipality of Pata due to the errors of the counting of votes by the machine brought
about by the error in the printing of the ballot, causing misalignment of ovals and use of
codes assigned to another municipality.
He recommended to revert to the manual counting of votes in the whole of Sulu. He
attached the stand of Congressman Tulawie, Governor Sakur Tan and recommendation
of Brigadier General Edgardo Espinosa, General Percival Subla, P/Supt. Charlemagne

Alejandrino for manual counting. The position paper of former Governor Tupay Loong,
Mr. Benjamin Loong and Mr. Asani S. Tammang, who are candidates for Governor and
Congressman of 1st and 2nd Districts respectively, who wanted the continuation of the
automated counting.
"While the forces of AFP are ready to provide arm (sic) security to our Comelec
officials, BEIs and other deputies, the political tensions and imminent violence and
bloodshed may not be prevented, as per report received, the MNLF forces are
readying their forces to surround the venue for automated counting and canvassing in
Sulu in order that the automation process will continue.
"Director Borra recommends, that while he supports Minute Resolution No. 98-1747,
implementation thereof shall be done as follows:
"1. That all the counting machines from Jolo, Sulu be transported back by C130 to
Manila and be located at the available space at PICC for purposes of both automated
and manual operations. This approach will keep the COMELEC officials away from
violence and bloodshed between the two camps who are determined to slug each
other as above mentioned in Jolo, Sulu. Only authorized political party and candidate
watchers will be allowed in PICC with proper security, both inside and outside the
perimeters of the venue at PICC.
"2. With this process, there will be an objective analysis and supervision of the
automated and manual operations by both the MIS and Technical Expert of the ES & S
away from the thundering mortars and the sounds of sophisticated heavy weapons
from both sides of the warring factions.
"3. Lastly, it will be directly under the close supervision and control of Commission on
Elections En Banc.
"RESOLVED:
"1. To transport all counting machines from Jolo, Sulu by C130 to Manila for purposes
of both automated and manual operations, with notice to all parties concerned;
"2. To authorize the official travel of the board of canvassers concerned for the
conduct of the automated and manual operations of the counting of votes at PICC
under the close supervision and control of the Commission En Banc. For this purpose,
to make available a designated space at the PICC;
"3. To authorize the presence of only the duly authorized representative of the
political parties concerned and the candidates watchers both outside and inside the
perimeters of the venue at PICC."

Atty. Tolentino, Jr. furnished the parties with copies of Minute Resolution No. 981750 and called for another meeting the next day, May 14, 1998, to discuss the
[10]
implementation of the resolution. The meeting was attended by the parties, by Lt.
Gen. Joselin Nazareno, then the Chief of the AFP Southern Command, the NAMFREL,
media, and the public. Especially discussed was the manner of transporting the ballots
and the counting machines to the PICC in Manila. They agreed to allow each political
party to have at least one (1) escort/ watcher for every municipality to acompany the
[11]
flight. Two C130s were used for the purpose.
On May 15, 1998, the COMELEC en banc issued Minute Resolution No. 98-1796
[12]
laying down the rules for the manual count, viz:
"In the matter of the Memorandum dated 15 May 1998 of Executive Director
Resurreccion Z. Borra, quoted to wit:
'In the implementation of COMELEC Min. Resolution No. 98-1750 promulgated 13 May
1998 in the manual counting of votes of Pata, Sulu, and in view of the arrival of the
counting machines, ballot boxes, documents and other election paraphernalia for the
whole province of Sulu now stored in PICC, as well as the arrival of the Municipal Board
of Canvassers of said Municipality in Sulu, and after conference with some members of
the Senior Staff and Technical Committee of this Commission, the following are hereby
respectfully recommended:
'1. Manual counting of the local ballots of the automated election system in Pata, Sulu;
'2. Automated counting of the national ballots considering that there are no questions
raised on the National Elective Officials as pre-printed in the mark-sensed ballots;
'3. The creation of the following Special Boards of Inspectors under the supervision of
Atty. Jose M. Tolentino, Jr., Task Force Head, Sulu, namely:
a) Atty. Mamasapunod M. Aguam
Ms. Gloria Fernandez
Ms. Esperanza Nicolas
b) Director Ester L. Villaflor-Roxas
Ms. Celia Romero
Ms. Rebecca Macaraya
c) Atty. Zenaida S. Soriano
Ms. Jocelyn Guiang
Ma. Jacelyn Tan
d) Atty. Erlinda C. Echavia
Ms. Theresa A. Torralba
Ms. Ma. Carmen Llamas

e) Director Estrella P. de Mesa

Ms. Teresita Velasco
Ms. Nelly Jaena

of Lugus and Panglima Tahil has been completed. There is no legal basis for the 'parallel
manual counting' ordained in the disputed minute resolution."
Nonetheless, COMELEC started the manual count on the same date, May 18,1998.

'4. Additional Special Board of Inspectors may be created when necesary.

'5. The Provincial Board of Canvassers which by standing Resolution is headed by the
Task Force Sulu Head shall consolidate the manual and automated results as submitted
by the Municipal Boards of Canvassers of the whole province with two members
composed of Directors Estrella P. de Mesa and Ester L. Villaflor-Roxas;
'6. The political parties and the candidates in Sulu as well as the Party-List Candidates
are authorized to appoint their own watchers upon approval of the Commission',
'RESOLVED to approve the foregoing recommendations in the implementation of Min.
Resolution No. 98-1750 promulgated on 13 May 1998 providing for the manual counting
of votes in the municipality of Pata, Sulu.
'RESOLVED, moreover, considering the recommendation of Comm. Manolo B. Gorospe,
Commissioner-In-Charge, ARMM, to conduct a parallel manual counting on all 18
municipalities of Sulu as a final guidance of the reliability of the counting machine which
will serve as basis for the proclamation of the winning candidates and for future
reference on the use of the automated counting machine."'
On May 18, 1998, petitioner filed his objection to Minute Resolution No. 98[13]
1796, viz:
"1. The minute resolution under agenda No. 98-1796 violates the provisions of Republic
Act No. 8436 providing for an automated counting of the ballots in the Autonomous
Region in Muslim Mindanao. The automated counting is mandatory and could not be
substituted by a manual counting. Where the machines are allegedly defective, the only
remedy provided for by law is to replace the machine. Manual counting is prohibited by
law;
"2. There are strong indications that in the municipality of Pata the ballots of the said
municipality were rejected by the counting machine because the ballots were tampered
and/or the texture of the ballots fed to the counting machine are not the official ballots
of the Comelec;
"3. The automated counting machines of the Comelec have been designed in such a way
that only genuine official ballots could be read and counted by the machine;
"4. The counting machines in the other municipalities are in order. In fact, the
automated counting has already started. The automated counting in the municipalities

On May 25, 1998, petitioner filed with this Court a petition for certiorari and
prohibition under Rule 65 of the Rules of Court. He contended that: (a) COMELEC issued
Minute Resolution Nos. 98-1747, 98-1750, and 98-1798 without prior notice and hearing
to him; (b) the order for manual counting violated R.A. No. 8436; (c) manual counting
gave "opportunity to the following election cheatings," namely:
"(a) The counting by human hands of the tampered, fake and counterfeit ballots which
the counting machines have been programmed to reject (Section 7, 8 & 9 of Rep. Act
8436).
"(b) The opportunity to substitute the ballots all stored at the PICC. In fact, no less than
the head of the COMELEC Task Force of Sulu, Atty. Jose M. Tolentino, Jr. who
recommended to the COMELEC the anomalous manual counting, had approached the
watchers of petitioners to allow the retrieval of the ballots, saying "tayo, tayo lang mga
watchers, pag-usapan natin,"dearly indicating overtures of possible bribery of the
watchers of petitioner (ANNEX E).
"(c) With the creation by the COMELEC of only 22 Boards of Election Inspectors to
manually count the 1,194 precincts, the manipulators are given sufficient time to
change and tamper the ballots to be manually counted.
"(d) There is the opportunity of delaying the proclamation of the winning candidates
through the usually dilatory moves in a pre-proclamation controversy because the
returns and certificates of canvass are already human (sic) made. In the automated
counting there is no room for any dilatory pre-proclamation controversy because the
returns and the MBC and PBC certificates of canvass are machine made and immediate
proclamation is ordained thereafter."
Petitioner then prayed:
"WHEREFORE, it is most especially prayed of the Honorable Court that:
"1. upon filing of this petition, a temporary restraining order be issued enjoining the
COMELEC from conducting a manual counting of the ballots of the 1,194 precincts of the
18 municipalities of the Province of Sulu but instead proceed with the automated
counting of the ballots, preparation of the election returns and MBC, PBC certificates of
canvass and proclaim the winning candidates on the basis of the automated counting
and consolidation of results;
"2. this petition be given due course and the respondents be required to answer;

"3. after due hearing, the questioned COMELEC En Banc Minute Resolutions of May 12,
13, 15, and 17, 1998 be all declared null and void ab initio for having been issued
without jurisdiction and/or with grave abuse of discretion amounting to lack of
jurisdiction and for being in violation of due process of law;

3. Assuming the manual count is illegal and that its result is unreliable,
whether or not it is proper to call for a special election for the position of
governor of Sulu.

" 4. the winning candidates of the Province of Sulu be proclaimed on the basis of the
results of the automated counting, automated election returns, automated MBC and
PBC certificates of canvass;

First. We hold that certiorari is the proper remedy of the petitioner. Section 7,
Article IX(A) of the 1987 Constitution states that if "unless provided by this Constitution
or by law, any decision, order or ruling of each Commission may be brought to the
Supreme Court on certiorari by the aggrieved party within thirty days from receipt of a
copy thereof." We have interpreted this provision to mean final orders, rulings and
decisions of the COMELEC rendered in the exercise of its adjudicatory or quasi-judicial
[19]
powers. Contrariwise, administrative orders of the COMELEC are not, as a general
rule, fit subjects of a petition for certiorari. The main issue in the case at bar is whether
the COMELEC gravely abused its discretion when it ordered a manual count of the 1998
Sulu local elections. A resolution of the issue will involve an interpretation of R.A. No.
8436 on automated election in relation to the broad power of the COMELEC under
Section 2(1), Article IX(C) of the Constitution "to enforce and administer all laws and
regulations relative to the conduct of an election x x x." The issue is not only legal but
one of first impression and undoubtedly suffused with significance to the entire
nation. It is adjudicatory of the right of the petitioner, the private respondent and the
intervenor to the position of governor of Sulu. These are enough considerations to call
for an exercise of the certiorari jurisdiction of this Court.

"x x x."
On June 8, 1998, private respondent Tan was proclaimed governor- elect of Sulu
[14]
on the basis of the manual count. Private respondent garnered 43,573
votes. Petitioner was third with 35,452 votes or a difference of 8,121 votes.
On June 23, 1998, this Court required the respondents to file their Comment to the
petition and directed the parties "to maintain the status quo prevailing at the time of
[15]
the filing of the petition." The vice-governor elect was allowed to temporarily
discharge the powers and functions of governor.
On August 20, 1998, Yusop Jikiri, the LAKAS-NUCD-UMDP-MNLF candidate for
[16]
governor filed a motion for intervention and a Memorandum in Intervention. The
result of the manual count showed he received 38,993 votes and placed
second. Similarly, he alleged denial of due process, lack of factual basis of the COMELEC
resolutions and illegality of manual count in light of R.A. No. 8436. TheCourt noted his
[17]
intervention. As similar petition for intervention filed by Abdulwahid Sahidulla, a
candidate for vice-governor, on October 7, 1998 was denied as it was filed too late.
In due time, the parties filed their respective Comments. On September 25, 1998,
[18]
the Court heard the parties in oral arguments which was followed by the submission
of their written memoranda.
The issues for resolution are the following:
1. Whether or not a petition for certiorari and prohibition under Rule 65 of
the Rules of Court is the appropriate remedy to invalidate the disputed
COMELEC resolutions.
2. Assuming the appropriateness of the remedy, whether or not COMELEC
committed grave abuse of discretion amounting to lack of jurisdiction in
ordering a manual count.
2.a. Is there a legal basis for the manual count?
2-b. Are its factual bases reasonable?
2.c. Were the petitioner and the intervenor denied due process by the
COMELEC when it ordered a manual count?

We shall resolve the issues in seriatim.

Second. The big issue, one of first impression, is whether the COMELEC committed
grave abuse of discretion amounting to lack of jurisdiction when it ordered a manual
count in light of R.A. No. 8436. The post election realities on ground will show that the
order for a manual count cannot be characterized as arbitrary, capricious or whimsical.
a. It is well established that the automated machines failed to read correctly
the ballots in the municipality of Pata. A mayoralty candidate, Mr. Anton
Burahan, obtained zero votes despite the representations of the
Chairman of the Board of Election Inspectors and others that they voted
for him. Another candidate garnered 100% of the votes.
b. It is likewise conceded that the automated machines rejected and would
not count the local ballots in the municipalities of Talipao, Siasi, Indanan,
Tapal and Jolo.
c. These flaws in the automated counting of local ballots in the municipalities
of Pata, Talipao, Siasi, Indanan, Tapal and Jolo were carefully analyzed by
the technical experts of COMELEC and the supplier of the automated
machines. All of them found nothing wrong with the automated
machines. They traced the problem to the printing of local ballots by the
National Printing Office. In the case of the municipality of Pata, it was
discovered that the ovals of the local ballots were misaligned and could
not be read correctly by the automated machines. In the case of the
municipalities of Talipao, Siasi, Indanan, Tapal and Jolo, it turned out that
the local ballots contained the wrong sequence code. Each municipality

was assigned a sequence code as a security measure. Ballots with the

wrong sequence code were programmed to be rejected by the automated
machines.
It is plain that to continue with the automated count in these five (5) municipalities
would result in a grossly erroneous count. It cannot also be gainsaid that the count in
these five (5) municipalities will affect the local elections in Sulu. There was no need for
more sampling of local ballots in these municipalities as they suffered from the same
defects. All local ballots in Pata with misaligned ovals will be erroneously read by the
automated machines. Similarly, all local ballots in Talipao, Siasi, Indanan, Tapal and Jolo
with wrong sequence codes are certain to be rejected by the automated
machines. There is no showing in the records that the local ballots in these five (5)
municipalities are dissimilar which could justify the call for their greater sampling.
Third. These failures of automated counting created post election tension in Sulu,
a province with a history of violent elections. COMELEC had to act decisively in view of
the fast deteriorating peace and order situation caused by the delay in the counting of
votes. The evidence of this fragile peace and order cannot be downgraded. In his
handwritten report to the COMELEC dated May 12, 1998, Atty. Tolentino, Jr. stated:
"x x x
"Additional marines have been deployed at the SSC. The undersigned is not sure if it is
merely intended to tame a disorderly crowd inside and outside SSC, or a show of force.
"It is submitted that since an error was discovered in a machine which is supposed to
have an error rate of 1:1,000,000, not a few people would believe that this error in Pata
would extend to the other municipalities. Whether or not this is true, it would be more
prudent to stay away from a lifeless thing that has sown tension and anxiety among
and between the voters of Sulu."
Executive Director Resurreccion Z. Borra, Task Force Head, ARMM in his May 13,1998
Memorandum to the COMELEC likewise stated:
"x x x
"While the forces of AFP are ready to provide arm (sic) security to our COMELEC
officials, BEI's and other deputies, the political tensions and imminent violence and
bloodshed may not be prevented, as per report received, the MNLF forces are
readying their forces to surround the venue for automated counting and canvassing in
Sulu in order that automation process will continue."
Last but not the least, the military and the police authorities unanimously
recommended manual counting to preserve peace and order. Brig. Gen. Edgardo V.
Espinosa, Commanding General, Marine Forces Southern Philippines, Brig. Gen. Percival
M. Subala, Commanding General, 3rd Marine Brigade, and Supt. Charlemagne S.
Alejandrino, Provincial Director, Sulu PNP Command explained that it "x x x will not only
serve the interest of majority of the political parties involved in the electoral process but

also serve the interest of the military and police forces in maintaining peace and order
throughout the province of Sulu."
An automated count of the local votes in Sulu would have resulted in a wrong
count, a travesty of the sovereignty of the electorate. Its aftermath could have been a
bloodbath.COMELEC avoided this imminent probability by ordering a manual count of
the votes. It would be the height of irony if the Court condemns COMELEC for aborting
violence in the Sulu elections.
Fourth. We also find that petitioner Loong and intervenor Jikiri were not denied
due process. The Tolentino memorandum clearly shows that they were given every
opportunity to oppose the manual count of the local ballots in Sulu. They were orally
heard. They later submitted written position papers. Their representatives escorted the
transfer of the ballots and the automated machines from Sulu to Manila. Their watchers
observed the manual count from beginning to end. We quote the Tolentino
memorandum, viz:
"x x x
"On or about 6:00 a.m. of May 12, 1998, while automated counting of all the ballots for
the province of Sulu was being conducted at the counting center located at the Sulu
State College, the COMELEC Sulu Task Force Head (TF Head) proceeded to the room
where the counting machine assigned to the municipality of Pata was installed to verify
the cause of the commotion therein.
"During the interview conducted by the TF Head, the members of the Board of Election
Inspectors (BEI) and watchers present in said room stated that the counting machine
assigned to the municipality of Pata did not reflect the true results of the voting
thereat. The members of the BEI complained that their votes were not reflected in the
printout of the election returns since per election returns of their precincts, the
candidate they voted for obtained "zero". After verifying the printout of some election
returns as against the official ballots, the TF Head discovered that votes cast in favor of a
mayoralty candidate were credited in favor of his opponents.
"In his attempt to remedy the situation, the TF Head suspended the counting of all
ballots for said municipality to enable COMELEC field technicians to determine the cause
of the technical error, rectify the same, and thereafter proceed with automated
counting. In the meantime, the counting of the ballots for the other municipalities
proceeded under the automated system.
"Technical experts of the supplier based in Manila were informed of the problem and
after numerous consultations through long distance calls, the technical experts
concluded that the cause of the error was in the manner the ballots for local positions
were printed by the National Printing Office (NPO), namely, that the ovals opposite the
names of the candidates were not properly aligned. As regards the ballots for national
positions, no error was found.

"Since the problem was not machine-related, it was obvious that the use of counting
machines from other municipalities to count the ballots of the municipality of Pata
would still result in the same erroneous count. Thus, it was found necessary to
determine the extent of the error in the ballot printing process before proceeding with
the automated counting.

2. Brig. Gen. Percival Subala

"To avoid a situation where proceeding with automation will result in an erroneous
count, the TF Head, on or about 11:45 a.m. ordered the suspension of the counting of all
ballots in the province to enable him to call a meeting with the heads of the political
parties which fielded candidates in the province, inform them of the technical error, and
find solutions to the problem.

5. Gubernatorial Candidate Kimar Tulawie

"On or about 12:30 p.m., the TF Head presided over a conference at Camp General
Bautista (3rd Marine Brigade) to discuss the process by which the will of the electorate
could be determined. Present during the meeting were:
1. Brig. Gen. Edgardo Espinoza
Marine Forces, Southern Philippines
2. Brig. Gen. Percival Subala
3rd Marine Brigade
3. Provincial Dir. Charlemagne Alejandrino
Sulu PNP Command
4. Gubernatorial Candidate Tupay Loong
LAKAS-NUCD Loong Wing
5. Gubernatorial Candidate Abdusakur Tan
LAKAS-NUCD Tan Wing
6. Gubernatorial Candidate Yusop Jikiri
LAKAS-NUCD-MNLF Wing
7. Gubernatorial Candidate Kimar Tulawie
LAMMP
8. Congressional Candidate Bensaudi Tulawie
LAMMP
"During said meeting, all of the above parties verbally advanced their respective
positions. Those in favor of a manual count were:
1. Brig. Gen. Edgardo Espinoza

3. Provincial Dir. Charlemagne Alenjandrino

4. Gubernatorial Candidate Abdusakur Tan

6. Congressional Candidate Bensaudi Tulawie and those in favor of an automated count

were:
1. Gubernatorial Candidate Tupay Loong
2. Gubernatorial Candidate Yusop Jikiri
"Said parties were then requested by the TF Head to submit their respective position
papers so that the same may be forwarded to the Commission en banc, together with
the recommendations of the TF Head.
'The TF Head returned to the counting center at the Sulu State College and called his
technical staff to determine the extent of the technical error and to enable him to
submit the appropriate recommendation to the Commission en banc.
"Upon consultation with the technical staff, it was discovered that in the Municipality of
Talipao, some of the local ballots were rejected by the machine. Verification showed
that while the ballots were genuine, ballot paper bearing a wrong "sequence code" was
used by the NPO during the printing process.
"Briefly, the following is the manner by which a sequence code" determined
genuineness of a ballot. A municipality is assigned a specific machine (except for Jolo,
which was assigned two (2) machines, and sharing of one (1) machine by two (2)
municipalities, namely, H.P. Tahil and Maimbung, Pandami and K. Caluang, Pata and
Tongkil and Panamao and Lugus). A machine is then assigned a specific "sequence code"
as one of the security features to detect whether the ballots passing through it are
genuine. Since a counting machine is programmed to read the specific "sequence code"
assigned to it, ballots which bear a "sequence code" assigned to another
machine/municipality, even if said ballots were genuine, will be rejected by the
machine.
"Other municipalities, such as Siasi, Indanan, Tapul and Jolo also had the same problem
of rejected ballots. However, since the machine operators were not aware that one of
the reasons for rejection of ballots is the use of wrong "sequence code", they failed to
determine whether the cause for rejection of ballots for said municipalities was the
same as that for the municipality of Talipao.

"In the case of 'misaligned ovals', the counting machine will not reject the ballot
because all the security features, such as "sequence code", are present in the ballot,
however, since the oval is misaligned or not placed in its proper position, the machine
will credit the shaded oval for the position where the machine is programmed to "read"
the oval. Thus, instead of rejecting the ballot, the machine will credit the votes of a
candidate in favor of his opponent, or in the adjacent space where the oval should be
properly placed.
"It could not be determined if the other municipalities also had the same technical error
in their official ballots since the "misaligned ovals" were discovered only after members
of the Board of Election Inspectors of the Municipality of Pata complained that their
votes were not reflected in the printout of the election returns.
"As the extent or coverage of the technical errors could not be determined, the TF Head,
upon consultation with his technical staff, was of the belief that it would be more
prudent to count the ballots manually than to proceed with an automated system which
will result in an erroneous count.
"The TF Head thus ordered the indefinite suspension of counting of ballots until such
time as the Commission shall have resolved the petition/position papers to be
submitted by the parties.The TF Head and his staff returned to Camp General Bautista to
await the submission of the position papers of the parties concerned.
"Upon receipt of the position papers of the parties, the TF Head faxed the same in the
evening of May 12, 1998, together with his handwritten recommendation to proceed
with a manual count." Attached are copies of the recommendations of the TF Head
(Annex "1"), and the position papers of the Philippine Marines and Philippine National
Police (Annex "2"), LAKAS-NUCD Tan Wing Annex (Annex "3"), Lakas-NUCD Loong Wing
(Annex "4"), LAKAS-NUCD-MNLF Wing (Annex "5") and LAMMP (Annex "6"). Said
recommendations and position papers were the bases for the promulgation of
COMELEC Minute Resolution No. 98-1750 dated May 13, 1998 (Annex "7"), directing
among other things, that the ballots and counting machines be transported by C130 to
Manila for both automated and manual operations.
"Minute Resolution No. 98-1750 was received by the TF Head through fax on or about
5:30 in the evening of May 13, 1998. Copies were then served through personal
delivery to the heads of the political parties, with notice to them that another
conference will be conducted at the 3rd Marine Brigade on May 14, 1998 at 9:00
o'clock in the morning, this time, with Lt. General Joselin Nazareno, then AFP
Commander, Southern Command. Attached is a copy of said notice (Annex
"8") bearing the signatures of candidates Tan (Annex "8-A") and Loong (Annex "8-B"),
and the representatives of candidates Tulawie (Annex "8-C") and Jikiri (Annex "8-D").
"On May 14, 1998, the TF Head presided over said conference in the presence of the
heads of the political parties of Sulu, together with their counsel, including Lt. Gen.
Nazareno, Brig. Gen. Subala, representatives of the NAMFREL, media and the public.

"After hearing the sides of all parties concerned, including that of NAMFREL, the
procedure by which the ballots and counting machines were to be transported
to Manila was finalized, with each political party authorized to send at least one (1)
escort/watcher for every municipality to accompany the ballot boxes and counting
machines from the counting center at the Sulu State College to the Sulu Airport up to
the PICC, where the COMELEC was then conducting its Senatorial Canvass. There being
four parties, a total of seventy-two (72) escorts/watchers accompanied the ballots
and counting machines.
"Two C130s left Sulu on May 15, 1998 to transport all the ballot boxes and counting
machines, accompanied by all the authorized escorts. Said ballots boxes reached the
PICC on the same day, with all the escorts/watchers allowed to station themselves at
the ballot box storage area. On May 17, 1998, another C130 left Sulu to ferry the
members of the board of canvassers."
Fifth. The evidence is clear that the integrity of the local ballots was safeguarded
when they were transferred from Sulu to Manila and when they were manually
counted.
As shown by the Tolentino memorandum, representatives of the political parties
escorted the transfer of ballots from Sulu to PICC. Indeed, in his May 14, 1992 letter to
Atty. Tolentino, Jr., petitioner Tupay Loong himself submitted the names of his
representatives who would accompany the ballot boxes and other election
[20]
paraphernalia, viz:
"Dear Atty. Tolentino:
"Submitted herewith are the names of escort(s) to accompany the ballot boxes and
other election pharaphernalia to be transported to COMELEC, Manila, to wit:
1. Jolo - Joseph Lu
2. Patikul - Fathie B. Loong
3. Indanan - - Dixon Jadi
4. Siasi - Jamal Ismael
5. K. Kaluang - Enjimar Abam
6. Pata - Marvin Hassan
7. Parang - Siyang Loong
8. Pangutaran - Hji. Nasser Loong
9. Marunggas - Taib Mangkabong
10. Luuk - Jun Arbison
11. Pandami - Orkan Osman
12. Tongkil - Usman Sahidulla
13. Tapul - Alphawanis Tupay
14. Lugus - Patta Alih
15. Maimbong - Mike Bangahan
16. P. Estino - Yasir lbba

17. Panamao - Hamba Loong

18. Talipao - Ismael Sali

'I. Common Provisions:

'1. Open the ballot box, retrieve the Minutes of Voting and the uncounted
ballots or the envelope containing the counted ballots as the case may
be;

"Hoping for your kind and (sic) consideration for approval on this matter.
"Thank you.

'2. Segregate the national ballots from the local ballots;

Very truly yours,
(Sgd.) Tupay T.
Loong

'3. Count the number of pieces of both the national and local ballots and
compare the same with the number of votes who actually voted as
stated in the Minutes of Voting:

(Sgd.) Asani S.
Tammang"

- If there is no Minutes of Voting, refer to the Voting Records at the back of

the VRRs to determine the number of voters who actually voted.

The ballot boxes were consistently under the watchful eyes of the parties'
representatives. They were placed in an open space at the PICC. The watchers stationed
themselves some five (5) meters away from the ballot boxes. They watched 24 hours a
[21]
day and slept at the PICC.

- If there are more ballots than the number of voters who actually voted, the
poll clerk shall draw out as many local and national ballots as may be
equal to the excess and place them in the envelope for excess ballots.

The parties' watchers again accompanied the transfer of the ballot boxes from
PICC to the public schools of Pasay City where the ballots were counted. After the
[22]
counting they once more escorted the return of the ballot boxes to PICC.
In fine, petitioner's charge that the ballots could have been tampered with before
the manual counting is totally unfounded.
Sixth. The evidence also reveals that the result of the manual count is reliable.
It bears stressing that the ballots used in the case at bar were specially made to
suit an automated election. The ballots were uncomplicated. They had fairly large ovals
opposite the names of candidates. A voter needed only to check the oval opposite the
name of his candidate. When the COMELEC ordered a manual count of the votes, it
issued special rules as the counting involved a different kind of ballot, albeit, more
simple ballots. The Omnibus Election Code rules on appreciation of ballots cannot apply
for they only apply to elections where the names of candidates are handwritten in the
[23]
ballots. The rules were spelled out in Minute Resolution 98-1798, viz:
"In the matter of the Memorandum dated 17 May 1998 of Executive Director
Resurreccion Z. Borra, re procedure of the counting of votes for Sulu for the convening
of the Board of Election Inspectors, the Municipal Board of Canvassers and the
Provincial Board of Canvassers on May 18, 1998 at 9:00 a.m. at the Philippine
International Convention Center (PICC),
'RESOLVED to approve the following procedure for the counting of votes for Sulu at the
PICC:

'II Counting of Votes

'A. National Ballots:
'1. If the national ballots have already been counted, return the same inside
the envelope for counted ballots, reseal and place the envelope inside
the ballot box;
'2. If the national ballots have not yet been counted, place them inside an
envelope and give the envelope through a liaison officer to the
machine operator concerned for counting and printing of the election
returns;
'3. The machine operator shall affix his signature and thumbmark thereon,
and return the same to the members of the BEI concerned for their
signatures and thumbmarks;
'4. The said returns shall then be placed in corresponding envelopes for distribution;
'B. Local Ballots:
'1. Group the local ballots in piles of fifty (50);
'2. The Chairman shall read the votes while the poll clerk and the third
member shall simultaneously accomplish the election returns and the
tally board respectively.

'If the voters shaded more ovals than the number of positions to
be voted for, no vote shall be counted in favor of any candidate.
'3. After all the local ballots shall have been manually counted, the same shall
be given to the machine operator concerned for counting by the
scanning machine. The machine operator shall then save the results in
a diskette and print out the election returns for COMELEC reference.
'4. The BEI shall accomplish the certification portion of the election returns and
announce the results;
'5. Place the election returns in their respective envelopes and distribute them
accordingly;
'6. Return all pertinent election documents and paraphernalia inside the ballot box.

'Let the Executive Director implement this resolution."'

As aforestated, five (5) Special Boards were initially created under Atty. Tolentino,
[24]
Jr. to undertake the manual counting, viz:
"a) Atty. Mamasapunod M. Aguam
Ms. Gloria Fernandez
Ms. Esperanza Nicolas
b) Director Ester L. Villaflor-Roxas
Ms. Celia Romero
Ms. Rebecca Macaraya
c) Atty. Zenaida S. Soriano
Ms. Jocelyn Guiang
Ma. Jocelyn Tan

'III. Consolidation of Results

'A. National Ballots
'1. The results of the counting for the national ballots for each municipality
shall be consolidated by using the ERs of the automated election
system;
'2. After the consolidation, the Machine Operator shall print the certificate of
canvass by municipality and statement of votes by precinct;
'3. To consolidate the provincial results, the MO shall load all the diskettes used in the
scanner to the ERs;
'4. The MO shall print the provincial certificate of canvass and the SOV by municipality;
'5. In case there is system failure in the counting and/or consolidation of the
results, the POBC/MOBC shall revert to manual consolidation.
'B. Local Ballots
'1. - The consolidation of votes shall be done manually by the Provincial/Municipal
Board of Canvassers;
'2. The proclamation of winning candidates shall be based on the manual consolidation.
'RESOLVED, moreover, that the pertinent provisions of COMELEC Resolution
Nos. 2971 and 3030 shall apply.

d) Atty. Erlinda C. Echavia

Ms. Teresa A. Torralba
Ms. Ma. Carmen Llamas
e) Director Estrella P. de Mesa
Ms. Teresita Velasco
Ms. Nelly Jaena"
Later, the COMELEC utilized the services of 600 public school teachers from Pasay City
to do the manual counting. Five (5) elementary schools served as the venues of the
[25]
counting, viz:
"1. Gotamco Elementary School, Gotamco Street, Pasay City - for the municipalities of
Indanan, Pangutaran, Panglima Tahil, Maimbung;
"2. Zamora Elementary School, Zamora Street, Pasay City - for the municipalities of Jolo,
Talipao, Panglima Estino, and Tapul;
"3. Epifanio Elementary School, Tramo Street, Pasay City - for the municipalities of
Parang, Lugus, Panamao;
"4. Burgos Elementary School, Burgos Street, Pasay City - for the municipalities of Luuk
and Tongkil;
5. Palma Elementary School - for the municipalities of Siasi and Kalingalang Caluang."
From beginning to end, the manual counting was done with the watchers of the
parties concerned in attendance. Thereafter, the certificates of canvass were prepared

and signed by the City/Municipal Board of Canvassers composed of the Chairman,

[26]
Vice-Chairman, and Secretary. They were also signed by the parties' watchers.
The correctness of the manual count cannot therefore be doubted. There was no
need for an expert to count the votes. The naked eye could see the checkmarks
opposite the big ovals.Indeed, nobody complained that the votes could not be read and
counted. The COMELEC representatives had no difficulty counting the votes. The 600
public school teachers of Pasay City had no difficulty. The watchers of the parties had no
difficulty. Petitioner did not object to the rules on manual count on the ground that the
ballots cannot be manually counted. Indeed, in his original Petition, petitioner did not
complain that the local ballots could not be counted by a layman. Neither did the
intervenor complain in his petition for intervention. The allegation that it will take a
trained eye to read the ballots is more imagined than real.
This is not all. As private respondent Tan alleged, the manual count could not have
been manipulated in his favor because the results show that most of his political
opponents won.Thus, "the official results show that the two congressional seats in Sulu
st
were won by Congressman Hussin Amin of the LAKAS-MNLF Wing for the 1 District and
Congressman Asani Tammang of the LAKAS-Loong Wing for the 2nd District. In the
provincial level, of the eight (8) seats for the Sangguniang Panlalawigan, two (2) were
won by the camp of respondent Tan; three (3) by the camp of petitioner Loong; two (2)
by the MNLF; and one (1) by LAMMP. In the mayoral race, seven (7) out of eighteen (18)
victorious municipal mayors were identified with respondent Tan; four (4) with
petitioner Loong; three (3) with the MNLF; two (2) with LAMMP and one (1) with
[27]
REPORMA." There is logic to private respondent Tan's contention that if the manual
count was tampered, his candidates would not have miserably lost.
Seventh. We further hold that petitioner cannot insist on automated counting
under R.A. No. 8436 after the machines misread or rejected the local ballots in five (5)
municipalities in Sulu. Section 9 of R.A. No. 8436 provides:
"SEC. 9. Systems Breakdown in the Counting Center. In the event of a systems
breakdown of all assigned machines in the counting center, the Commission shall use
any available machine or any component thereof from another city/municipality upon
approval of the Commission En Banc or any of its divisions.
The transfer of such machines or any component thereof shall be undertaken in the
presence of representatives of political parties and citizens' arm of the Commission who
shall be notified by the election officer of such transfer.
There is a systems breakdown in the counting center when the machine fails to read the
ballots or fails to store/save results or fails to print the results after it has read the
ballots; or when the computer fails to consolidate election results/reports or fails to
print election results/reports after consolidation."
As the facts show, it was inutile for the COMELEC to use other machines to count the
local votes in Sulu. The errors in counting were due to the misprinting of ovals and the

use of wrong sequence codes in the local ballots. The errors were not machinerelated. Needless to state, to grant petitioner's prayer to continue the machine count of
the local ballots will certainly result in an erroneous count and subvert the will of the
electorate.
Eighth. In enacting R.A. No. 8436, Congress obviously failed to provide a remedy
where the error in counting is not machine-related for human foresight is not allseeing. We hold, however, that the vacuum in the law cannot prevent the COMELEC
from levitating above the problem. Section 2(1) of Article IX(C) of the Constitution gives
the COMELEC the broad power "to enforce and administer all laws and regulations
relative to the conduct of an election, plebiscite, initiative, referendum and
recall." Undoubtedly, the text and intent of this provision is to have COMELEC all the
necessary and incidental powers for it to achieve the objective of holding free, orderly,
honest, peaceful, and credible elections. Congruent to this intent, this Court has not
been niggardly in defining the parameters of powers of COMELEC in the conduct of our
[28]
elections. Thus, we held in Sumulong v. COMELEC:
"Politics is a practical matter, and political questions must be dealt with realistically - not
from the standpoint of pure theory. The Commission on Elections, because of its factfinding facilities, its contacts with political strategists, and its knowledge derived from
actual experience in dealing with political controversies, is in a peculiarly advantageous
position to decide complex political questions x x x. There are no ready made formulas
for solving public problems. Time and experience are necessary to evolve patterns that
will serve the ends of good government. In the matter of the administration of laws
relative to the conduct of election, x x x we must not by any excessive zeal take away
from the Commission on Elections the initiative which by constitutional and legal
mandates properly belongs to it."
In the case at bar, the COMELEC order for a manual count was not only reasonable. It
was the only way to count the decisive local votes in the six (6) municipalities of Pata,
Talipao, Siasi, Tudanan, Tapul and Jolo. The bottom line is that by means of the manual
count, the will of the voters of Sulu was honestly determined. We cannot kick away the
will of the people by giving a literal interpretation to R.A. 8436. R.A. 8436 did not
prohibit manual counting when machine count does not work. Counting is part and
parcel of the conduct of an election which is under the control and supervision of the
COMELEC. It ought to be self-evident that the Constitution did not envision a COMELEC
that cannot count the result of an election.
Ninth. Our elections are not conducted under laboratory conditions. In running for
public offices, candidates do not follow the rules of Emily Post. Too often, COMELEC has
to make snap judgments to meet unforseen circumstances that threaten to subvert the
will of our voters. In the process, the actions of COMELEC may not be impeccable,
indeed, may even be debatable. We cannot, however, engage in a swivel chair criticism
of these actions often taken under very difficult circumstances. Even more, we cannot
order a special election unless demanded by exceptional circumstances. Thus, the plea
for this Court to call a special election for the governorship of Sulu is completely off-

line. The plea can only be grounded on failure of election. Section 6 of the Omnibus
Election Code tells us when there is a failure of election, viz:
"Sec. 6. Failure of election. - If on account of force majeure, terrorism, fraud, or other
analogous causes, the election in any polling place has not been held on the date fixed,
or had been suspended before the hour fixed by law for the closing of the voting, or
after the voting and during the preparation and the transmission of the election returns
or in the custody or canvass thereof, such election results in a failure to elect, and in any
of such cases the failure or suspension of election would affect the result of the
election, the Commission shall on the basis of a verified petition by any interested party
and after due notice and hearing, call for the holding or continuation of the election, not
held, suspended or which resulted in a failure to elect but not later than thirty days after
the cessation of the cause of such postponement or suspension of the election or failure
to elect."
To begin with, the plea for a special election must be addressed to the COMELEC and
not to this Court. Section 6 of the Omnibus Election Code should be read in relation to
Section 4 of R.A. No. 7166 which provides:
"Sec. 4. Postponement, Failure of Election and Special Elections. - The postponement,
declaration of failure of elections and the calling of special elections as provided in
Sections 5, 6, and 7 of the Omnibus Election Code shall be decided by the Commission
en banc by a majority vote of its members. The causes for the declaration of a failure of
election may occur before or after casting of votes or on the day of the election."
The grounds for failure of election - force majeure, terrorism, fraud or other analogous
causes - clearly involve questions of fact. It is for this reason that they can only be
determined by the COMELEC en banc after due notice and hearing to the parties. In the
case at bar, petitioner never asked the COMILEC en banc to call for a special election in
Sulu. Even in his original petition with this Court, petitioner did not pray for a special
election. His plea for a special election is a mere afterthought. Too late in the day and
too unprocedural. Worse, the grounds for failure of election are inexistent. The records
show that the voters of Sulu were able to cast their votes freely and fairly. Their votes
were counted correctly, albeit manually. The people have spoken. Their sovereign will
has to be obeyed.
There is another reason why a special election cannot be ordered by this Court. To
hold a special election only for the position of Governor will be discriminatory and will
violate the right of private respondent to equal protection of the law. The records show
that all elected officials in Sulu have been proclaimed and are now discharging their
powers and duties. Thus, two (2) congressmen, a vice-governor, eight (8) members of
the Sangguniang Panlalawigan and eighteen (18) mayors, numerous vice-mayors and
municipal councilors are now serving in their official capacities. These officials were
proclaimed on the basis of the same manually counted votes of Sulu. If manual counting
is illegal, their assumption of office cannot also be countenanced. Private respondent's
election cannot be singled out as invalid for alikes cannot be treated unalikes.

A final word. Our decision merely reinforces our collective efforts to endow
COMELEC with enough power to hold free, honest, orderly and credible elections. A
quick flashback of its history is necessary lest our efforts be lost in the labyrinth of time.
The COMELEC was organized under Commonwealth Act No. 607 enacted on
August 22,1940. The power to enforce our election laws was originally vested in the
President and exercised through the Department of Interior. According to Dean
[29]
Sinco, the view ultimately emerged that an independent body could better protect
the right of suffrage of our people.Hence, the enforcement of our election laws, while
an executive power, was transferred to the COMELEC.
From a statutory creation, the COMELEC was transformed to a constitutional body
by virtue of the 1940 amendments to the 1935 Constitution which took effect on
December 2, 1940.COMELEC was generously granted the power to "have exclusive
charge of the enforcement and administration of all laws relative to the conduct of
[30]
elections x x x."
Then came the 1973 Constitution. It further broadened the powers of COMELEC by
making it the sole Judge of all election contests relating to the election, returns and
qualifications of members of the national legislature and elective provincial and city
[31]
officials. In fine, the COMELEC was given judicial power aside from its traditional
administrative and executive functions.
The 1987 Constitution quickened this trend of strengthening the COMELEC. Today,
COMLEC enforces and administers all laws and regulations relative to the conduct of
elections, plebiscites, initiatives, referenda and recalls. Election contests involving
regional, provincial and city elective officials are under its exclusive original
jurisdiction. All contests involving elective municipal and barangay officials are under its
[32]
appellate jurisdiction.
Our decisions have been in cadence with the movement towards empowering the
COMELEC in order that it can more effectively perform its duty of safeguarding the
[33]
sanctity of our elections. In Cauton vs. COMELEC, we laid down this liberal
approach, viz:
xxx
'The purpose of the Revised Election Code is to protect the integrity of elections and to
suppress all evils that may violate its purity and defeat the will of the voters. The purity
of the elections is one of the most fundamental requisites of popular government. The
Commission on Elections, by constitutional mandate, must do everything in its power to
secure a fair and honest canvass of the votes cast in the elections. In the performance of
its duties, the Commission must be given a considerable latitude in adopting means and
methods that will insure the accomplishment of the great objective for which it was
created -- to promote free, orderly, and honest elections. The choice of means taken by
the Commission on Elections, unless they are clearly illegal or constitute grave abuse
of discretion, should not be interfered with."

[34]

In Pacis vs. COMELEC, we reiterated the guiding principle that "clean elections
control the appropriateness of the remedy." The dissent, for all its depth, is out of step
with this movement. It condemns the COMELEC for exercising its discretion to resort to
manual count when this was its only viable alternative. It would set aside the results of
the manual count even when the results are free from fraud and irregularity. Worse, it
would set aside the judgment of the people electing the private respondent as
Governor. Upholding the sovereignty of the people is what democracy is all
about. When the sovereignty of the people expressed thru the ballot is at stake, it is
not enough for this Court to make a statement but it should do everything to have
that sovereignty obeyed by all. Well done is always better than well said.
IN VIEW WHEREOF, the petition of Tupay Loong and the petition in intervention of
Yusop Jikiri are dismissed, there being no showing that public respondent gravely
abused its discretion in issuing Minute Resolution Nos. 98-1748, 98-1750, 98-1796 and
98-1798. Our status quo order of June 23, 1998 is lifted. No costs.
SO ORDERED.
Davide, Jr., C.J., Romero, Bellosillo, Melo, Vitug, Kapunan, Mendoza, Quisumbing,
Purisima, Buena, and Gonzaga-Reyes, JJ., concur.
Pardo, J., No part.
Panganiban, J., see dissenting opinion.
Ynares Santiago, J., no part. Did not participate in the deliberation.

FIRST DIVISION
[G.R. No. 128845. June 1, 2000]
INTERNATIONAL SCHOOL ALLIANCE OF EDUCATORS (ISAE), petitioner, vs. HON.
LEONARDO A. QUISUMBING in his capacity as the Secretary of Labor and Employment;
HON. CRESENCIANO B. TRAJANO in his capacity as the Acting Secretary of Labor and
Employment; DR. BRIAN MACCAULEY in his capacity as the Superintendent of
International School-Manila; and INTERNATIONAL SCHOOL, INC., respondents.
DECISION
KAPUNAN, J.:
Receiving salaries less than their counterparts hired abroad, the local-hires of private
respondent School, mostly Filipinos, cry discrimination. We agree. That the local-hires
are paid more than their colleagues in other schools is, of course, beside the point. The
point is that employees should be given equal pay for work of equal value. That is a
principle long honored in this jurisdiction. That is a principle that rests on fundamental
notions of justice. That is the principle we uphold today.
Private respondent International School, Inc. (the School, for short), pursuant to
Presidential Decree 732, is a domestic educational institution established primarily for
[1]
dependents of foreign diplomatic personnel and other temporary residents. To enable
the School to continue carrying out its educational program and improve its standard of
instruction, Section 2(c) of the same decree authorizes the School to
employ its own teaching and management personnel selected by it
either locally or abroad, from Philippine or other nationalities, such
personnel being exempt from otherwise applicable laws and
regulations attending their employment, except laws that have been
or will be enacted for the protection of employees.
Accordingly, the School hires both foreign and local teachers as members of its faculty,
classifying the same into two: (1) foreign-hires and (2) local-hires. The School employs
four tests to determine whether a faculty member should be classified as a foreign-hire
or a local hire:
a.....What is one's domicile?
b.....Where is one's home economy?
c.....To which country does one owe economic allegiance?

d.....Was the individual hired abroad specifically to work in the School

and was the School responsible for bringing that individual to the
[2]
Philippines?
Should the answer to any of these queries point to the Philippines, the faculty member
is classified as a local hire; otherwise, he or she is deemed a foreign-hire.
The School grants foreign-hires certain benefits not accorded local-hires. These include
housing, transportation, shipping costs, taxes, and home leave travel allowance.
Foreign-hires are also paid a salary rate twenty-five percent (25%) more than local-hires.
The School justifies the difference on two "significant economic disadvantages" foreignhires have to endure, namely: (a) the "dislocation factor" and (b) limited tenure. The
School explains:
A foreign-hire would necessarily have to uproot himself from his home
country, leave his family and friends, and take the risk of deviating
from a promising career path-all for the purpose of pursuing his
profession as an educator, but this time in a foreign land. The new
foreign hire is faced with economic realities: decent abode for oneself
and/or for one's family, effective means of transportation, allowance
for the education of one's children, adequate insurance against illness
and death, and of course the primary benefit of a basic
salary/retirement compensation.
Because of a limited tenure, the foreign hire is confronted again with
the same economic reality after his term: that he will eventually and
inevitably return to his home country where he will have to confront
the uncertainty of obtaining suitable employment after a long period
in a foreign land.
The compensation scheme is simply the School's adaptive measure to
remain competitive on an international level in terms of attracting
[3]
competent professionals in the field of international education.
When negotiations for a new collective bargaining agreement were held on June 1995,
petitioner International School Alliance of Educators, "a legitimate labor union and the
[4]
collective bargaining representative of all faculty members" of the School, contested
the difference in salary rates between foreign and local-hires. This issue, as well as the
question of whether foreign-hires should be included in the appropriate bargaining unit,
eventually caused a deadlock between the parties.
On September 7, 1995, petitioner filed a notice of strike. The failure of the National
Conciliation and Mediation Board to bring the parties to a compromise prompted the
Department of Labor and Employment (DOLE) to assume jurisdiction over the dispute.
On June 10, 1996, the DOLE Acting Secretary, Crescenciano B. Trajano, issued an Order
resolving the parity and representation issues in favor of the School. Then DOLE

Secretary Leonardo A. Quisumbing subsequently denied petitioner's motion for

reconsideration in an Order dated March 19, 1997. Petitioner now seeks relief in this
Court.

School has the discretion to recruit and hire

expatriate teachers from abroad, under terms and
conditions that are consistent with accepted
international practice.

Petitioner claims that the point-of-hire classification employed by the School is

discriminatory to Filipinos and that the grant of higher salaries to foreign-hires
constitutes racial discrimination.

Appendix C of said CBA further provides:

The new salary schedule is deemed at equity with
the Overseas Recruited Staff (OSRS) salary schedule.
The 25% differential is reflective of the agreed value
of system displacement and contracted status of the
OSRS as differentiated from the tenured status of
Locally Recruited Staff (LRS).

The School disputes these claims and gives a breakdown of its faculty members,
numbering 38 in all, with nationalities other than Filipino, who have been hired locally
[5]
and classified as local hires. The Acting Secretary of Labor found that these non-Filipino
local-hires received the same benefits as the Filipino local-hires:
The compensation package given to local-hires has been shown to apply to all,
regardless of race. Truth to tell, there are foreigners who have been hired locally and
[6]
who are paid equally as Filipino local hires.

To our mind, these provisions demonstrate the parties' recognition of

the difference in the status of two types of employees, hence, the
difference in their salaries.

The Acting Secretary upheld the point-of-hire classification for the distinction in salary
rates:

The Union cannot also invoke the equal protection clause to justify its
claim of parity. It is an established principle of constitutional law that
the guarantee of equal protection of the laws is not violated by
legislation or private covenants based on reasonable classification. A
classification is reasonable if it is based on substantial distinctions and
apply to all members of the same class. Verily, there is a substantial
distinction between foreign hires and local hires, the former enjoying
only a limited tenure, having no amenities of their own in the
Philippines and have to be given a good compensation package in
[7]
order to attract them to join the teaching faculty of the School.

The principle "equal pay for equal work" does not find application in
the present case. The international character of the School requires
the hiring of foreign personnel to deal with different nationalities and
different cultures, among the student population.
We also take cognizance of the existence of a system of salaries and
benefits accorded to foreign hired personnel which system is
universally recognized. We agree that certain amenities have to be
provided to these people in order to entice them to render their
services in the Philippines and in the process remain competitive in
the international market.
Furthermore, we took note of the fact that foreign hires have limited
contract of employment unlike the local hires who enjoy security of
tenure. To apply parity therefore, in wages and other benefits would
also require parity in other terms and conditions of employment which
include the employment contract.
A perusal of the parties' 1992-1995 CBA points us to the conditions
and provisions for salary and professional compensation wherein the
parties agree as follows:
All members of the bargaining unit shall be
compensated only in accordance with Appendix C
hereof provided that the Superintendent of the

We cannot agree.
That public policy abhors inequality and discrimination is beyond contention. Our
[8]
Constitution and laws reflect the policy against these evils. The Constitution in the
Article on Social Justice and Human Rights exhorts Congress to "give highest priority to
the enactment of measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities." The very broad Article 19 of
the Civil Code requires every person, "in the exercise of his rights and in the
performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith."
[9]

International law, which springs from general principles of law, likewise proscribes
[10]
discrimination. General principles of law include principles of equity, i.e., the general
[11]
principles of fairness and justice, based on the test of what is reasonable. The
[12]
Universal Declaration of Human Rights, the International Covenant on Economic,
[13]
Social, and Cultural Rights, the International Convention on the Elimination of All
[14]
Forms of Racial Discrimination, the Convention against Discrimination in

[15]

Education, the Convention (No. 111) Concerning Discrimination in Respect of

[16]
Employment and Occupation - all embody the general principle against
discrimination, the very antithesis of fairness and justice. The Philippines, through its
Constitution, has incorporated this principle as part of its national laws.
In the workplace, where the relations between capital and labor are often skewed in
favor of capital, inequality and discrimination by the employer are all the more
reprehensible.
[17]

The Constitution specifically provides that labor is entitled to "humane conditions of

work." These conditions are not restricted to the physical workplace - the factory, the
office or the field - but include as well the manner by which employers treat their
employees.

The foregoing provisions impregnably institutionalize in this jurisdiction the long

honored legal truism of "equal pay for equal work." Persons who work with substantially
equal qualifications, skill, effort and responsibility, under similar conditions, should be
[22]
paid similar salaries. This rule applies to the School, its "international character"
notwithstanding.
The School contends that petitioner has not adduced evidence that local-hires perform
[23]
work equal to that of foreign-hires. The Court finds this argument a little cavalier. If
an employer accords employees the same position and rank, the presumption is that
these employees perform equal work. This presumption is borne by logic and human
experience. If the employer pays one employee less than the rest, it is not for that
employee to explain why he receives less or why the others receive more. That would
be adding insult to injury. The employer has discriminated against that employee; it is
for the employer to explain why the employee is treated unfairly.

[18]

The Constitution also directs the State to promote "equality of employment

[19]
opportunities for all." Similarly, the Labor Code provides that the State shall "ensure
equal work opportunities regardless of sex, race or creed." It would be an affront to
both the spirit and letter of these provisions if the State, in spite of its primordial
obligation to promote and ensure equal employment opportunities, closes its eyes to
[20]
unequal and discriminatory terms and conditions of employment.
Discrimination, particularly in terms of wages, is frowned upon by the Labor Code.
[21]
Article 135, for example, prohibits and penalizes the payment of lesser compensation
to a female employee as against a male employee for work of equal value. Article 248
declares it an unfair labor practice for an employer to discriminate in regard to wages in
order to encourage or discourage membership in any labor organization.
Notably, the International Covenant on Economic, Social, and Cultural Rights, supra, in
Article 7 thereof, provides:
The States Parties to the present Covenant recognize the right of
everyone to the enjoyment of just and favourable conditions of work,
which ensure, in particular:

The employer in this case has failed to discharge this burden. There is no evidence here
that foreign-hires perform 25% more efficiently or effectively than the local-hires. Both
groups have similar functions and responsibilities, which they perform under similar
working conditions.
The School cannot invoke the need to entice foreign-hires to leave their domicile to
rationalize the distinction in salary rates without violating the principle of equal work for
equal pay.
"Salary" is defined in Black's Law Dictionary (5th ed.) as "a reward or recompense for
services performed." Similarly, the Philippine Legal Encyclopedia states that "salary" is
the "[c]onsideration paid at regular intervals for the rendering of services." In Songco v.
[24]
National Labor Relations Commission, we said that:
"salary" means a recompense or consideration made to a person for
his pains or industry in another man's business. Whether it be derived
from "salarium," or more fancifully from "sal," the pay of the Roman
soldier, it carries with it the fundamental idea of compensation for
services rendered. (Emphasis supplied.)

a.....Remuneration which provides all workers, as a minimum, with:

i.....Fair wages and equal remuneration for work of
equal value without distinction of any kind, in
particular women being guaranteed conditions of
work not inferior to those enjoyed by men, with
equal pay for equal work;
x x x.

While we recognize the need of the School to attract foreign-hires, salaries should not
be used as an enticement to the prejudice of local-hires. The local-hires perform the
same services as foreign-hires and they ought to be paid the same salaries as the latter.
For the same reason, the "dislocation factor" and the foreign-hires' limited tenure also
cannot serve as valid bases for the distinction in salary rates. The dislocation factor and
limited tenure affecting foreign-hires are adequately compensated by certain benefits
accorded them which are not enjoyed by local-hires, such as housing, transportation,
shipping costs, taxes and home leave travel allowances.
The Constitution enjoins the State to "protect the rights of workers and promote their
[25]
[26]
welfare," "to afford labor full protection." The State, therefore, has the right and

[27]

duty to regulate the relations between labor and capital. These relations are not
merely contractual but are so impressed with public interest that labor contracts,
[28]
collective bargaining agreements included, must yield to the common good. Should
such contracts contain stipulations that are contrary to public policy, courts will not
hesitate to strike down these stipulations.
In this case, we find the point-of-hire classification employed by respondent School to
justify the distinction in the salary rates of foreign-hires and local hires to be an invalid
classification. There is no reasonable distinction between the services rendered by
foreign-hires and local-hires. The practice of the School of according higher salaries to
foreign-hires contravenes public policy and, certainly, does not deserve the sympathy of
this Court.
We agree, however, that foreign-hires do not belong to the same bargaining unit as the
local-hires.
A bargaining unit is "a group of employees of a given employer, comprised of all or less
than all of the entire body of employees, consistent with equity to the employer
indicate to be the best suited to serve the reciprocal rights and duties of the parties
[29]
under the collective bargaining provisions of the law." The factors in determining the
appropriate collective bargaining unit are (1) the will of the employees (Globe Doctrine);
(2) affinity and unity of the employees' interest, such as substantial similarity of work
and duties, or similarity of compensation and working conditions (Substantial Mutual
Interests Rule); (3) prior collective bargaining history; and (4) similarity of employment
[30]
status. The basic test of an asserted bargaining unit's acceptability is whether or not it
is fundamentally the combination which will best assure to all employees the exercise of
[31]
their collective bargaining rights.
It does not appear that foreign-hires have indicated their intention to be grouped
together with local-hires for purposes of collective bargaining. The collective bargaining
history in the School also shows that these groups were always treated separately.
Foreign-hires have limited tenure; local-hires enjoy security of tenure. Although foreignhires perform similar functions under the same working conditions as the local-hires,
foreign-hires are accorded certain benefits not granted to local-hires. These benefits,
such as housing, transportation, shipping costs, taxes, and home leave travel allowance,
are reasonably related to their status as foreign-hires, and justify the exclusion of the
former from the latter. To include foreign-hires in a bargaining unit with local-hires
would not assure either group the exercise of their respective collective bargaining
rights.
WHEREFORE, the petition is GIVEN DUE COURSE. The petition is hereby GRANTED IN
PART. The Orders of the Secretary of Labor and Employment dated June 10, 1996 and
March 19, 1997, are hereby REVERSED and SET ASIDE insofar as they uphold the
practice of respondent School of according foreign-hires higher salaries than local-hires.
SO ORDERED.

Puno, and Pardo, JJ., concur.

Davide, Jr., C.J., (Chairman), on official leave.
Ynares-Santiago, J., on leave.

EN BANC
[G.R. No. 129118. July 19, 2000]
AGRIPINO A. DE GUZMAN, JR., NARCISO M. ARABE, LETICIA T. ENDOMA,
ARISTIDES A. RAMOS, PANCHO M. RIVERA, TERESITA A. DE CASTRO, CANDIDA
C. HABANA, AZUCENA C. FALCON, MARIA LUZ P. CAEDO, YOLANDA V. RIO,
RUBEN S. ANIEVAS, LELISA L. SANCHEZ, VILLARDO A. TRINIDAD, ENRIQUE CH.
ZUNIGA, ROMEO A. GONZALES, CASIANO G. ATUEL, JR., GEMMA L. BANARES,
PERFECTO T. CAMPOS, ARNULFO A. AGUILAR, RUDOLPH R. MELON,
MAGDALENA M. LAO, MARINA GERONA, FLORIANA O. DE GUIA, EMETERIO B.
BRUCAL, NILDA C. CONCHA, YOLANDA P. FERMA, TEOTISTA C. ANGKIKO,
FRANCISCO V. TRIAS, JENELYN E. ESTERNON, MILAGROS M. ABELLAR, ALICIA
T. MOJICA, ELVIRA E. BAYBAY, PRICILLA P. GOLFO, ELISEA M. HIERCO,
TERESITA L. DIMACUHA, MYRNA GUILLERMO, GRACIANO R. SAMELA, JR.,
NIMFA M. LAGASCA, JOSEFINA P. JARENO, NORMA V. ORDENES, FRANCISCO
T. SERVANDO, VIOLETA M. ANONUEVO, ALFREDO O. BAYANI, MARIO J.
RAMOS, EME FEROLINO, LEONIDES P. COMIA, MILAGROS E. GENEBLAZO,
LORNA L. MENORCA, REYNALDO DE LA CRUZ, ROMULO A. FAZ, LIMUEL G.
GADO, REY G. FABELLA, DOMINGUITO G. TACASA, IMELDA R.B. ROTONI, TITA
FOJA, NOEMI F. CASTRO, LILIA B. CAWALING, ROBERT A. REYES, CONCEPCION
H. PARRENO, SERAFIN L. OLMEDO, ADOLFO L. ALLAN, PROSPERO D. CASTRO,
ROSELLER C. GAPULAO, GLICERIO B. LAURENTE, BERNICE E. BERNABE, ADINA
L. FERNANDEZ, ANITA M. PAALAN, ROSA P. PINOON, INOCENCIA P. DANGUE,
JULITA E. MENDOZA, ELENA O. RAMOS, GENE BE BARTE, FLORENCIA Z.
MAGANITO, PABLO A. ARGA, PEDRO S. LUNA, CARMELITA P. LAUREL,
VICTORINO I. MARASIGAN, ROMEO M. MENDOZA, JUAN C. MALABANAN,
MANUEL B. ABRELI, JOSEPH T. MACAHIYA, LEONOR P. ARADA, JULIA G.
PEREZ, MODESTO M. VILLADELREY, ARNULFO Y. FAJILAN, MARLON P.
HERRERA, JAIME A. BISCOCHO, MICHAEL D. CASTILLO, MILAGROS H.
BAYLOSIS, ARSENIO T. GUSTE, ALFREDO V. ORAYANI, DANTE A. PENAMANTE,
ROMEO A. DE CHAVEZ, MANUEL M. ILAGAN, ALFREDO O. MANZA, JR.,
DOMINGO B. GUNIO, FIDEL V. PALERACIO, VICENTE V. DEL MORO, JUSTINO R.
DEQUILLA, ERNESTO A. RUZOL, ROMEO D. DELGADO, ERLINDA P. MAGSINO,
VERONICA R. CAMBRONERO, NORMA A. DEQUINA, WELLIE R. RAVINA,
CORAZON T. LOPEZ, REMEDIOS R. QUIZON, LORETA E. VERGARA, MELECIA M.
ASTRERA, VICENTA R. SAMANTE, HELEN M. CUENTO-BUENDICHO, ANICIA V.
MORALES, RISALINA C. GONZALES, ROSARIO CHARITO R. PABELLON, LOLITA L.
MALADAGA, MAXIMO A. GLINDO, WILFREDO A. RODELAS, CELSO O. ROGO,
RAMON C. VALENCIA, FELIPE R. FRANDO, ADEN B. DUNGO, OFELIA N.
QUIBEN, LIGAYA S. VALENZUELA, EUNICE S. FAMILARIN, MARCELA DE LEON,
ADELA M. JAMILLA, RENY ABLES, ADELA E. FABERES, ALICIA P. BALDOMAR,
EDNA C. GARCIA, ANGELINA V. GARRIDO, ELOISA P. TORRENO, CHARITO M.
LACAMENTO, CLARENCIA M. AQUINO, HILDA DIMALANTA, ELSIE SIBAL,
PURIFICACION TANGONAN, AMELITA FERNANDEZ, TEDDY C. MARIANO,
LORETO SANGGALANG, GERARDO GONZALES, FEDERICO ONATE, JR., ARTURO

BALIGNASAY, FELIX M. CABARIOS, JR., NORBERTO PUNZALAN, JAIME G.

ALCANTARA, ERNESTO VILLANUEVA, ESTANISLAO SANCHEZ, ADORACION L.
PINEDA, LUCILA S. DUNGCA, ADELAIDA B. LAOIJINDANUM, ROLANDO A.
BALUYUT, FRANCISCO M. DAVID, LEONELLE S. MENDOZA, MA. LUZ A.
BASILIO, NESTOR J. TIMBANG, HILDA P. DIZON, EMMANUEL E. IGNACIO,
RAMON S. ABELLA, JOSELITO MATIAS, HEZEQUIAS B. GALANG, ERLINDA C.
ZAPATA, IMELDA R. MANALASTAS, PEDRO L. PALO, AURECIO C. TRASPE,
JOSEPHINE GALANG, FLORINDA R. MADULID, MAGDALENA W. SADI, NYDIA
V.A. BOLISAY, PRESENTACION A. PALOM, ANTONIO B. ANCHETA, MACARIO L.
SADI, PACIFICO E. GISAPON, FELICIANO C. CRUZ, IMELDA A. QUIMEL, LINDA D.
SANDOVAL, MARILOU R. ORTIZ, NORMA F. SANTOS, MAGPAYO V. ABESAMIS,
BONIFACIO B. VILLAFLOR, DANIEL O. TABIOS, CONSTANTE T. CATRIZ, JESUS E.
ALICANTE, FEDERICO SACLAYAN, JR., NOLY G. UMINGA, FE FRAELI L. DE
GUZMAN, RODRIGO S. WYCOCO, JOVEN HERMOGENES, RODOLFO D.
BANAWA, ABELARDO O. CAPANZANA, ERNESTO Q. TIONGSON, ROSANNA
CRUZ, OSCAR C. ONGOCO, CONSUELO A. KABIGTING, JULITA V. PASTELERO,
ARSENIA V. BONDOC, ISIDRO A. TOMAS, ANGELINA V. GARRIDO,
CONSOLACION N. LABOG, ELENITA A. RIVERA, SOCORRO NOCES, RODOLFO
GALLARDO, CARMENCITA M. ONGEO, CAMILO L. SEDURIFA, ARLEEN VIC B.
OCHANDRA, EDGARDO E. APOSTOL, CLOTILDE C. CANETE, ALEJANDRO B. DEL
AGUA, PILAR R. BUENO, TEODOICO C. MAGALLANES, PETRONIO N. PIANGCO,
JR., JOSE M. FLORENDO, BIBIANO A. CAGNAN, ALICIA A. TUBI, RODOLFO C.
NATAN, JAIME B. MENDONEZ, EDILBERTO EDANG, ROSENDA T. JENOVEVA,
VEDASTO B. ELIZAN, JR., MILAGROS P. DE LUNA, ATILANO L. ISAAC, CORAZON
L. J. PEPITO, LUCILA S. PINEDA, ROCHE B. CERRO, JOCELYN KL. LIBUT,
REMBERTO L. GUTIERREZ, NAZARIO A. TRASMONTE, REYNALDO O.
MACARAT, FLORENCIA M. MALIBAGO, IMELDA G. TUYAY, JUAN A. GIBA, JR.,
JOSE M. CAPACITE, ARCITA M. GARCIA, ANGEL G. DACUNO, RITA M.
BEDIANG, RENATO L. CANDIDO, NESTORIO B. BOCO, JONATHAN C. AMBIDA,
MONICA MACABARE, BENITO A. MONTALLANA, CLOTILDE C. APURAVALDEMORO, CIRIACO J. ARCENO, PABLO L. FORMARAN, JR., PROSPERO S.
OLMEDO, IGNACIO V. CASCANO, SERAFIN L. CLUTARIO, ARTURO L. DIN,
JUCHITA C. SY, RODOLFO L. ASUERO, PIO T. PORTES, MARILOU F. TAMAYO,
MILAGROS P. LAMBINO, ESTANISLAO A. ESPINA, RENERIO D. ENGO,
FERNANDO A. MOSCARE, CONCHITA A. PICARDAL, ELIAS T. TURLA,
BONIFACIO T. LIM, JOSEFINA A. AGUILAR, ANTONIO O. TEPACE, GAVINO S.
ASOTES, RENE P. MAGBUTAY, NICOLAS C. UY, JR., JESUS B. LAVA, SENORA C.
CALAGOS, RAFAEL A. PAYOD, MACARIO L. CIEGO, SALVADOR T. CRUZ,
VIRGINIA V. BESAS, RAUL S. FIGUERDA, EDGAR R. DELOS REYES, TERESO R.
ROSEL, JOSE J. MABANGUE, PRIMO D. PALOMO, JOHN C. YANGZON, ROMULO
D. JABON, FIDENCIO Z. LA TORRE, JR., LETICIA R. MACARIOLA, CARLOS P.
VARELA, JR., ANTONIO L. PEDRAZA, SALVACION A. LAMBAN, LINO L. JAPSON,
EUNIA H. VACAL, ANTONIO F. VALDEZ, NATIVIDAD E. PRADO, LORENZO C.
MERKA, GAUDIOSO A. RUEGO, ETERIO Z. ABOCEJO, DEMETRIA O. COROLLO,
MARIA S. OBEN, ARTHUR V. LEYSON, PEDRO L. AVILA, DOMINADOR S.
RODILLA, MARCIAL MAGPATOC, FEDERICO D. BARCELON, EVANGELINE DELA
ROSA, ELENO GIL, ARSENIA GARCIA, HUMILDA ALICUM, DIOSDADO CAS,

ABRAHAM MASAOY, SAMUEL ORALLO, AMELIA OLORES, CANDIDO URBANO,

LOURDES FRIAS, ROEL SORIANO, EMELDA AGUSTIN, PAQUITO SORIANO,
GERMAN BALOLONG, BENJAMIN C. ROSARIO, EFREN BUYA, LEONIDA
LEGASPI, TOMAS ABELLA, JR., JOVENCIA CANTO, JUAN DACONO, MIGUEL
BAUTISTA, LORNA PASCUAL, FERDINAND BRAGANZA, PRISCILLA PEREZ, ALMA
LUZ SORIANO, JUAN VALENCIA, JR., JULIAN APOSTOL, ROSARIO GUICO,
BONITA VIDAL, GUIA GARCIA, LEOCADIO GINEZ, CATALINA BANEZ, VERONICA
TABILIN, ELVIRA CALSADO, ALIPIO LOPEZ, JOSEPHINE MALANA, PIO
ANONUEVO, ELMA DEL ROSARIO, RUFINO FLORES, ANTONIO ORDONEZ,
CARMEN CLAVERIA, ESTRELLA RAMOS, petitioners, vs. COMMISSION ON
ELECTIONS, respondent.

III.
IV.

V.

VI.
DECISION
PURISIMA, J.:
At bar is a petition for certiorari and prohibition with urgent prayer for the
issuance of a writ of preliminary injunction and temporary restraining order,
assailing the validity of Section 44 of Republic Act No. 8189 (RA 8189)
otherwise known as "The Voters Registration Act of 1996".
RA 8189 was enacted on June 10, 1996 and approved by President Fidel V.
Ramos on June 11, 1996. Section 44 thereof provides:
"SEC. 44. Reassignment of Election Officers. - No Election Officer shall
hold office in a particular city or municipality for more than four (4)
years. Any election officer who, either at the time of the approval of
this Act or subsequent thereto, has served for at least four (4) years in
a particular city or municipality shall automatically be reassigned by
the Commission to a new station outside the original congressional
district."
By virtue of the aforequoted provision of law, the Commission on Elections
[1]
[2]
(COMELEC) promulgated Resolution Nos. 97-0002 and 97-0610 for the
implementation thereof. Thereafter, the COMELEC issued several
[3]
directives reassigning the petitioners, who are either City or Municipal
Election Officers, to different stations.
Aggrieved by the issuance of the aforesaid directives and resolutions,
petitioners found their way to this Court via the present petition assailing the
validity of Section 44 of RA 8189, contending that:
I.
II.

SECTION 44 OF REPUBLIC ACT NO. 8189 VIOLATES THE EQUAL

PROTECTION CLAUSE ENSHRINED IN THE CONSTITUTION;
SECTION 44 OF REPUBLIC ACT NO. 8189 VIOLATES THE CONSTITUTIONAL
GUARANTEE ON SECURITY OF TENURE OF CIVIL SERVANTS;

SECTION 44 OF REPUBLIC ACT NO. 8189 CONSTITUTES A DEPRIVATION OF

PROPERTY WITHOUT DUE PROCESS OF LAW;
SECTION 44 OF REPUBLIC ACT NO. 8189 UNDERMINES THE
CONSTITUTIONAL INDEPENDENCE OF COMELEC AND COMELECS
CONSTITUTIONAL AUTHORITY TO NAME, DESIGNATE AND APPOINT AND
THEN REASSIGN AND TRANSFER ITS VERY OWN OFFICIALS AND
EMPLOYEES;
SECTION 44 OF REPUBLIC ACT NO. 8189 CONTRAVENES THE BASIC
CONSTITUTIONAL PRECEPT [Article VI, SECTION 26(1), Phil. Constitution]
THAT EVERY BILL PASSED BY CONGRESS SHALL EMBRACE ONLY ONE
SUBJECT WHICH MUST BE EXPRESSED IN THE TITLE THEREOF; and
SECTION 44 OF REPUBLIC ACT NO. 8189 IS VOID FOR FAILURE TO COMPLY
WITH THE CONSTITUTIONAL REQUIREMENT [ARTICLE VI, SECTION 26 (2)]
OF THREE READINGS ON SEPARATE DAYS AND DISTRIBUTION OF PRINTED
COPIES IN ITS FINAL FORM THREE DAYS BEFORE ITS PASSAGE.
Petitioners contentions revolve on the pivotal issue, whether Section 44 of RA
8189 is valid and constitutional.
The petition is barren of merit. Section 44 of RA 8189 enjoys the presumption
of validity, and the Court discerns no ground to invalidate it.
Petitioners theorize that Section 44 of RA 8189 is violative of the "equal
protection clause" of the 1987 Constitution because it singles out the City and
Municipal Election Officers of the COMELEC as prohibited from holding office in
the same city or municipality for more than four (4) years. They maintain that
there is no substantial distinction between them and other COMELEC officials,
and therefore, there is no valid classification to justify the objective of the
provision of law under attack.
The Court is not persuaded by petitioners arguments. The "equal protection
clause" of the 1987 Constitution permits a valid classification under the
following conditions:
1. The classification must rest on substantial distinctions;
2. The classification must be germane to the purpose of the law;
3. The classification must not be limited to existing conditions only;
and
4. The classification must apply equally to all members of the same
[4]
class.

After a careful study, the ineluctable conclusion is that the classification under
Section 44 of RA 8189 satisfies the aforestated requirements.
The singling out of election officers in order to "ensure the impartiality of
election officials by preventing them from developing familiarity with the
people of their place of assignment" does not violate the equal protection
clause of the Constitution.
[5]

In Lutz vs. Araneta, it was held that "the legislature is not required by the
Constitution to adhere to a policy of all or none". This is so for
underinclusiveness is not an argument against a valid classification. It may be
true that all the other officers of COMELEC referred to by petitioners are
exposed to the same evils sought to be addressed by the statute. However, in
this case, it can be discerned that the legislature thought the noble purpose of
the law would be sufficiently served by breaking an important link in the chain
of corruption than by breaking up each and every link thereof. Verily, under
Section 3(n) of RA 8189, election officers are the highest officials or authorized
representatives of the COMELEC in a city or municipality. It is safe to say that
without the complicity of such officials, large scale anomalies in the registration
of voters can hardly be carried out.
Moreover, to require the COMELEC to reassign all employees (connected with
the registration of voters) who have served at least four years in a given city or
municipality would entail a lot of administrative burden on the part of the
COMELEC.

Untenable is petitioners contention that Section 44 of RA 8189 undermines the

authority of COMELEC to appoint its own officials and employees. As stressed
upon by the Solicitor General, Section 44 establishes a guideline for the
COMELEC to follow. Said section provides the criterion or basis for the
reassignment or transfer of an election officer and does not deprive the
COMELEC of its power to appoint, and maintain its authority over its officials
and employees. As a matter of fact, the questioned COMELEC resolutions and
directives illustrate that it is still the COMELEC which has the power to reassign
and transfer its officials and employees. But as a government agency tasked
with the implementation and enforcement of election laws, the COMELEC is
duty bound to comply with the laws passed by Congress.
The independence of the COMELEC is not at issue here. There is no impairment
or emasculation of its power to appoint its own officials and employees. In fact,
Section 44 even strengthens the COMELECs power of appointment, as the
power to reassign or transfer is within its exclusive jurisdiction and domain.
Petitioners contention that Section 44 has an isolated and different subject
from that of RA 8189 and that the same is not expressed in the title of the law,
is equally untenable.
The objectives of Section 26(1), Article VI of the 1987 Constitution, that
"[e]very bill passed by the Congress shall embrace only one subject which shall
be expressed in the title thereof", are:
1. To prevent hodge-podge or log-rolling legislation;

Neither does Section 44 of RA 8189 infringe the security of tenure of

petitioners nor unduly deprive them of due process of law. As held in Sta.
[6]
Maria vs. Lopez.
"xxx the rule that outlaws unconsented transfers as anathema to
security of tenure applies only to an officer who is appointed - not
merely assigned - to a particular station. Such a rule does not
pr[o]scribe a transfer carried out under a specific statute that
empowers the head of an agency to periodically reassign the
employees and officers in order to improve the service of the agency.
xxx" (italics supplied)
The guarantee of security of tenure under the Constitution is not a guarantee
of perpetual employment. It only means that an employee cannot be dismissed
(or transferred) from the service for causes other than those provided by law
and after due process is accorded the employee. What it seeks to prevent is
capricious exercise of the power to dismiss. But, where it is the law-making
authority itself which furnishes the ground for the transfer of a class of
employees, no such capriciousness can be raised for so long as the remedy
proposed to cure a perceived evil is germane to the purposes of the law.

2. To prevent surprise or fraud upon the legislature by means of

provisions in bills of which the titles gave no information, and which
might therefore be overlooked and carelessly and unintentionally
adopted; and
3. To fairly apprise the people, through such publication of legislative
proceedings as is usually made, of the subjects of legislation that are
being considered, in order that they may have opportunity of being
[7]
heard thereon by petition or otherwise if they shall so desire.
Section 26(1) of Article VI of the 1987 Constitution is sufficiently complied with
where, as in this case, the title is comprehensive enough to embrace the
general objective it seeks to achieve, and if all the parts of the statute are
related and germane to the subject matter embodied in the title or so long as
the same are not inconsistent with or foreign to the general subject and
[8]
title. Section 44 of RA 8189 is not isolated considering that it is related and
germane to the subject matter stated in the title of the law. The title of RA
8189 is "The Voters Registration Act of 1996" with a subject matter enunciated
in the explanatory note as "AN ACT PROVIDING FOR A GENERAL REGISTRATION

OF VOTERS, ADOPTING A SYSTEM OF CONTINUING REGISTRATION,

PRESCRIBING THE PROCEDURES THEREOF AND AUTHORIZING THE
APPROPRIATION OF FUNDS THEREFOR." Section 44, which provides for the
reassignment of election officers, is relevant to the subject matter of
registration as it seeks to ensure the integrity of the registration process by
providing a guideline for the COMELEC to follow in the reassignment of election
officers. It is not an alien provision but one which is related to the conduct and
procedure of continuing registration of voters. In this regard, it bears stressing
that the Constitution does not require Congress to employ in the title of an
enactment, language of such precision as to mirror, fully index or catalogue, all
[9]
the contents and the minute details therein.
In determining the constitutionality of a statute dubbed as defectively titled,
[10]
the presumption is in favor of its validity.
As regards the issue raised by petitioners - whether Section 44 of RA 8189 was
enacted in accordance with Section 26 (2), Article VI of the 1987 Constitution,
petitioners have not convincingly shown grave abuse of discretion on the part
of Congress. Respect due to co-equal departments of the government in
matters entrusted to them by the Constitution, and the absence of a clear
[11]
showing of grave abuse of discretion suffice to stay the judicial hand.
WHEREFORE, the petition is DISMISSED; and the constitutionality and validity
of Section 44 of RA 8189 UPHELD. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Bellosillo, Melo, Puno, Vitug, Kapunan, Mendoza,
Panganiban, Quisumbing, Buena, Gonzaga-Reyes, Ynares-Santiago, and De
Leon, Jr., JJ., concur.
Pardo, J., no part.

EN BANC
[G.R. No. 158359. March 23, 2004]
ABDULLAH D. DIMAPORO, petitioner, vs. HOUSE OF REPRESENTATIVES ELECTORAL
TRIBUNAL and ABDULLAH S. MANGOTARA, respondents.
DECISION
TINGA, J.:
Before the Court is a petition brought by Congressman Abdullah D. Dimaporo
[1]
(Dimaporo), as petitioner, seeking to nullify the twin Resolutions of the House of
Representatives Electoral Tribunal (HRET) which denied his Motion for Technical
Evaluation of the Thumbmarks and Signatures Affixed in the Voters Registration Records
[2]
and Voting Records and Motion for Reconsideration of Resolution No. 03-408 Denying
[3]
the Motion for Technical Examination of Voting Records .
A brief factual background is in order.
On July 20, 2001, Dimaporo was proclaimed a Member of the House of
nd
Representatives, representing the 2 Legislative District of Lanao del Norte.
[4]

Pursuant to the 1998 Rules of the HRET (HRET Rules), congressional candidate
Abdullah S. Mangotara (Mangotara) filed on July 30, 2001 a Petition of Protest (Ad
[5]
Cautelam), seeking, among others, the technical examination of the signatures and
thumbmarks appearing on the Voters Registration Records (VRRs)/Book of Voters and
the List of Voters with Voting Records in all the protested precincts of the municipality
of Sultan Naga Dimaporo (SND). Mangotara alleged that the massive substitution of
voters and other electoral irregularities perpetrated by Dimaporos supporters will be
uncovered and proven by the revision of ballots and the comparison between the
signatures and thumbmarks appearing in the VRRs/Book of Voters and those appearing
in the List of Voters with Voting Records used on election day or those affixed at the
back of the VRRs. From this and other premises, he concluded that he is the dulynd
elected representative of the 2 District of Lanao del Norte.
[6]

On October 10, 2001, Dimaporo filed an Answer with Counter-Protest impugning

all the ballots and votes counted in favor of Mangotara in all precincts of all the 15
municipalities of Lanao del Norte, except SND. He alleged that irregularities and
electoral frauds, consisting of massive substitute voting, i.e., persons other than the
registered voters voted in favor of Mangotara, were committed in the counterprotested precincts. Moreover, pairs or groups of ballots written by only one person
were counted in favor of Mangotara. Accordingly, Dimaporo prayed for, among others,
the technical examination of the signatures and thumbmarks of the voters who
allegedly voted in the questioned precincts.
Before revision proceedings were conducted, Mangotara filed an Urgent Motion
[7]
for Technical Examination dated May 3, 2002, praying for the technical examination of
the signatures and thumbmarks appearing on the Registration Records/Book of Voters
and List of Voters with Voting Records in all the precincts of SND. According to him, the

fire that gutted all the ballot boxes used in SND made the revision of ballots in the said
municipality physically impossible. Hence, technical examination was the only means by
which the HRET can determine Mangotaras claim of massive substitute voting.
Mangotara also argued that the Commission on Elections (Comelec) had started
retrieving the election records needed for the forthcoming Sangguniang Kabataan (SK)
elections. There was no assurance that the integrity of these records will be
preserved. Thus, there was an urgent need for technical examination of the election
records. Moreover, Mangotara averred that the results of the technical examination are
determinative of the final resolution of the election protest in view of the fact that
Dimaporos presumptive lead over him was only 5,487 votes.
Dimaporo filed an Opposition to the Motion for Technical Examination on May 24,
2002.
Noting that the Tribunal cannot evaluate the questioned ballots because there are
no ballots but only election documents to consider, the HRET granted Mangotaras
motion and permitted the latter to engage an expert to assist him in the prosecution of
[8]
his case. Accordingly, the National Bureau of Investigation conducted the technical
examination of the signatures and thumbmarks of the voters of SND affixed in their
VRRs and other voting records.
After the completion of the revision of ballots, Dimaporo filed on November 11,
2002 a Motion for Technical Examination of the Thumbmarks and Signatures Affixed in
[9]
the Voters Registration Records and Voting Records of: (a) 198 revised pilot counterprotested precincts; (b) 47 pilot counter-protested precincts; and (c) 36 precincts of
the municipality of Tangcal(Tangcal). The motion was filed allegedly in order to
substantiate Dimaporos claims that pairs or groups of ballots were written by only one
person and that there was massive substitute voting in the counter-protested
precincts. Dimaporo further alleged that, upon opening 47 ballot boxes of the 47
counter-protested precincts, it was discovered that the boxes did not contain any
ballot. Hence, no revision could be made. Likewise, the ballots for 36 precincts of
Tangcal could no longer be revised because the ballot boxes had been burned. Citing
these circumstances as akin to those mentioned by Mangotara in his motion, Dimaporo
moved that his request for technical examination be granted.
[10]

The HRET denied Dimaporos motion in its assailed Resolution No. 03-408. The
Tribunal declared that Dimaporos allegations that pairs or groups of ballots were
written by only one person and that substitute voting took place in the first and second
groups of precincts are matters which are well within the judicial determination of the
[11]
Tribunal and which may be determined without resort to technical examination. As
regards the 36 precincts of Tangcal, the HRET found it physically impossible to conduct a
technical examination of the signatures and thumbmarks of voters as found in the VRRs
and Book of Voters due to the destruction of the pertinent election documents. In its
[12]
questioned Resolution No. 03-166, the Tribunal denied Dimaporos Motion for
Reconsideration of Resolution No. 03-408 Denying the Motion for Technical Examination
[13]
of Voting Records.
Hence, Dimaporo filed the instant Petition for Certiorari and/or Mandamus with
[14]
Prayer for the Issuance of a Writ of Preliminary Injunction on June 8, 2003.

Dimaporo claims that the HRET deprived him of equal protection when the latter
denied his motion for technical examination even as it had previously granted
Mangotaras similar motion. According to him, his motion should have been granted
because there is no valid distinction between the counter-protested precincts and the
precincts in SND subject of Mangotaras motion since, in both instances, the ballots were
no longer available for revision. He also asserts that the denial of his motion deprived
him of procedural due process or the right to present scientific evidence to show the
massive substitute voting committed in the counter-protested precincts.
[15]

On July 21, 2003, Mangotara filed his Comment averring that the petition is an
obvious dilatory tactic to render the election protest moot and academic by the
expiration of the term involved. He points out that there are substantial differences
between his own motion for technical examination and that of petitioner. For instance,
in SND, all the ballot boxes were destroyed by fire, whereas those of the 47 counterprotested precincts were not. In fact, except for the ballots themselves, the election
documents and other paraphernalia remained intact.Another difference is that
[16]
Mangotara specifically contested the election results in SND on the ground of
substitution of voters, whereas massive substitute voting was allegedly a mere general
averment in Dimaporos counter-protest. Moreover, Mangotara moved for technical
examination even before the revision proceedings, whereas Dimaporos motion was
[17]
anchored on Rule 42 of the HRET Rules and was filed only after the revision of
ballots. As regards the counter-protested precincts of Tangcal, Mangotara avers that
destruction of the ballot boxes is not among the grounds for technical examination
under Rule 42 of the HRET Rules, the provision cited by Dimaporo. Mangotara further
claims that the former cannot ask for technical examination under Rule 42 of the HRET
Rules in order to substantiate allegations of substitute voting because this was not cited
as a ground for objection in the course of the revision of ballots. Rule 42 of the HRET
Rules provides that the party moving for technical examination must specify the
objections made in the course of the revision of ballots which the movant intends to
substantiate with the results of the technical examination. Furthermore, Dimaporo was
not deprived of his right to present evidence because the questioned Resolution No. 03408 itself states that all election documents are still subject to the scrutiny of the
Tribunal during the appreciation of evidence. Hence, at the appropriate time and in
accordance with HRET Rules, Dimaporo will be given an opportunity to present his
evidence.
[18]

The Solicitor General filed a Comment on July 29, 2003 arguing that there is a
distinction between the motions filed by Mangotara and Dimaporo. Whereas
Mangotaras motion was filed before the completion of the reviefore the completion of
the reviro was filed after the revision of ballots. The HRET acted within the confines of
its discretion. Hence, there is no need for this Court to exercise its extraordinary power
of certiorari.
Dimaporo filed a Consolidated Reply to the Comments of the Public and Private
[19]
Respondent on August
12,
2003. Thereafter,
the
parties
filed
their
[20]
respective Memoranda as required by the Court.

We are not prepared to conclude that the assailed Resolutions of the HRET offend
the equal protection clause. Equal protection simply means that all persons and things
similarly situated must be treated alike both as to the rights conferred and the liabilities
[21]
imposed. It follows that the existence of a valid and substantial distinction justifies
divergent treatment.
It should be mentioned that Dimaporo does not question the HRET Rules but only
the Tribunals exercise or implementation thereof as manifested in the
questioned Resolutions.According to him, since the ballot boxes subject of his petition
and that of Mangotara were both unavailable for revision, his motion, like Mangotaras,
should be granted.
This argument is rather simplistic. Purposely or not, it fails to take into account the
distinctions extant in Mangotaras protest vis--vis Dimaporos counter-protest which
validate the grant of Mangotaras motion and the denial of Dimaporos.
First. The election results in SND were the sole subjects of Mangotaras protest. The
opposite is true with regard to Dimaporos counter-protest as he contested the election
results in all municipalities but SND.
Significantly, the results of the technical examination of the election records of
SND are determinative of the final outcome of the election protest against Dimaporo.
The same cannot be said of the precincts subject of Dimaporos motion.
The election results show that Mangotara won over Dimaporo in 10 out of 15
municipalities of Lanao del Norte. Dimaporo prevailed only in five (5) municipalities,
including SND. His winning margin in four (4) of these municipalities was small, but in
SND, Dimaporo obtained 22,358 votes as opposed to Mangotaras 477 votes. This means
that Dimaporo won by a margin of 21,881 votes over Mangotara in SND. Further, the
election results show that Mangotara was credited with zero (0) vote in 73 out of 130
precincts of the said municipality. That Dimaporo won the elections by a margin of 5,487
votes establishes the fact that the results of the election in SND handed the victory to
[22]
him.
The technical examination of the election records of SND and the consequent
determination of the true will of the electorate therein, therefore, serves the interest
nd
not only of the parties but also of the constituency of the 2 District of Lanao del Norte.
Second. Mangotara filed a motion for technical examination before the start of the
revision proceedings on the ground that the destruction of the ballot boxes of all
precincts of SND rendered revision physically impossible. The urgency of technical
examination was due to the impending SK elections and the resultant need for the
Comelec to retrieve the election records of the municipality.
On the other hand, Dimaporo filed a motion for technical examination after the
revision of ballots. No circumstance of necessity or urgency was averred in the motion.
Third. The HRET was informed and it is not disputed that the ballot boxes and
other election documents pertaining to Tangcal were totally gutted by fire making
[23]
technical examination an impossibility.

On the other hand, although the ballot boxes of the precincts of SND were also
destroyed by fire, the other election records, e.g., Lists of Voters with Voting Records
and Voters Affidavits contained in the Book of Voters, were not. Thus, technical
examination of the available election records could still be had.
Fourth. With regard to the other counter-protested precincts, the HRET correctly
pointed out that Dimaporos claims that pairs or groups of ballots were written by only
one person and that massive substitute voting took place may be resolved by the
Tribunal without need for technical examination. Although no ballots were found inside
the ballot boxes of 47 counter-protested precincts, the election returns and tally boards
were still intact. These documents may yet be considered by the Tribunal in its
resolution of the election protest. Thus, technical examination was uncalled for as it was
not absolutely necessary.
It should be emphasized that the grant of a motion for technical examination is
[24]
subject to the sound discretion of the HRET. In this case, the Tribunal deemed it
useful in the conduct of the revision proceedings to grant Mangotaras motion for
technical examination. Conversely, it found Dimaporos motion unpersuasive and
accordingly denied the same. In so doing, the HRET merely acted within the bounds of
[25]
its Constitutionally-granted jurisdiction. After all, the Constitution confers full
authority on the electoral tribunals of the House of Representatives and the Senate as
the sole judges of all contests relating to the election, returns, and qualifications of their
[26]
respective members. Such jurisdiction is original and exclusive.
Anent Dimaporos contention that the assailed Resolutions denied him the right to
procedural due process and to present evidence to substantiate his claim of massive
substitute voting committed in the counter-protested precincts, suffice it to state that
the HRET itself may ascertain the validity of Dimaporos allegations without resort to
technical examination. To this end, the Tribunal declared that the ballots, election
documents and other election paraphernalia are still subject to its scrutiny in the
[27]
appreciation of evidence.
Moreover, it should be noted that the records are replete with evidence,
documentary and testimonial, presented by Dimaporo. He has, in fact, already filed
[28]
a Formal Offer of Evidenceon January 29, 2004 to which Mangotara filed
[29]
a Comment on February 4, 2004. Hence, Dimaporos allegation of denial of due
process is an indefensible pretense.
For the reasons above-mentioned, we are not convinced that the Tribunal
committed grave abuse of discretion, much less exceeded its jurisdiction in issuing the
questionedResolutions.
WHEREFORE, the instant petition is DISMISSED for lack of merit.
SO ORDERED.
Davide, Jr., C.J., Ynares-Santiago, Carpio, Austria-Martinez, Corona, CarpioMorales, Callejo, Sr., and Azcuna, JJ., concur.
Puno, J., no part.
Vitug, J., no part. On official leave.

Panganiban, J., on leave.

Quisumbing, J., no part.
Sandoval-Gutierrez, J., no part.

SECOND DIVISION
MA. CHONA M. DIMAYUGA, petitioner vs. OFFICE OF THE OMBUDSMAN, respondent
G.R. No. 129099, July 20, 2006
DECISION
AZCUNA, J.:
This is a petition for certiorari with a plea for temporary restraining order and writ of
preliminary injunction. Petitioners, Ma. Chona M. Dimayuga, Felipe T. Aguinaldo and
Noel C. Inumerable, seek to enjoin respondent, Office of the Ombudsman, from
conducting a preliminary investigation and any further proceedings in OMB 0-950430. Petitioners likewise seek to annul the following: an order dated June 27, 1996,
which denied a motion for the suspension of the preliminary investigation;

[1]

an order

dated November 18, 1996, which denied a motion for reconsideration of the earlier

on August 30, 1995. Undaunted, petitioners then filed a Notice of

Appeal with a corresponding Motion for Extension of Time to File
Memorandum on Appeal before the COA Chairman. In a letter
addressed to petitioner Dimayuga, the COA Chairman acknowledged
receipt of said documents and granted petitioners request for
extension of time to file their Memorandum on Appeal. Petitioners
filed said Memorandum on Appeal onNovember 20, 1995.
Meanwhile, the audit report was forwarded to the DPWH Secretary,
who then indorsed the same to respondent Ombudsman for
appropriate action on February 16, 1995. Accordingly, petitioners
were charged with violation of the Anti-Graft Law or Republic Act
3019, docketed as OMB 0-95-0430. On June 15, 1995, respondent
Ombudsman required state auditors Eleanor M. Tejada and
Jose Rey Binamira of the COAs Special Action Team to submit their
sworn complaint on the basis of their report for purposes of initiating
the preliminary investigation, which was set on June 28, 1995. In view
of this, petitioners filed a Motion for Suspension of Preliminary
Investigation on June 26, 1996 with the Evaluation and Preliminary
Investigation Bureau of respondent. In said motion, petitioners argue
that the SAO report was not yet final, considering that their appeal
with the Commission had not yet been resolved.

[2]

order; and an order dated March 13, 1997, which denied a letter-appeal questioning
the last mentioned order.

[3]

Respondent, however, denied petitioners motion for reconsideration

on June 27, 1996 x x x.
xxx

The factual antecedents are not in dispute:

Petitioners
Maria Chona Dimayuga,
Noel Inumerable and
Felipe Aguinaldo were employees of the Traffic Regulatory Board
(TRB) of [the] Department of Public Works and Highways
(DPWH). Petitioner Dimayuga used to be the TRBs executive director.
In June 1992, an anonymous complaint was filed against petitioners
concerning certain transactions of the TRB from 1989 to May
1992. Consequently, a special audit was conducted by the Special
Audit Office (SAO) of the Commission on Audit (COA).
The SAO report, detailing the audit of selected transactions of the TRB
was finalized on November 4, 1994. As a consequence of said report,
certain irregularities were uncovered, in which petitioners were
implicated. It therefore recommended appropriate action against
petitioners.
Petitioners filed a motion for reconsideration of said report
on February 28, 1995. The COA Chairman, however, denied the same

Unsatisfied with the said Order, petitioners filed an Omnibus Motion

for Reconsideration dated June 27, 1996, reiterating as
ground therefor,
the pendency of
their
appeal
before
theComission. In arguing for the suspension of the preliminary
investigation before respondent, petitioners cited the supposedly
similar case of COA v. Gabor, OMB-0-93-0718. The COA on the other
hand, through the Special Audit Office, filed a Manifestation with
Motion dated September 9, 1996, concurring with the position of
respondent Ombudsman, denying the previous Motion for
Reconsideration of petitioners.
On November 18, 1996, respondent denied petitioners Omnibus
Motion x x x.
xxx
Subsequent to these Motions, petitioners likewise filed a LetterAppeal
dated December
5,
1996,
addressed
to
Ombudsman Aniano Desierto, based on the same grounds stated in

previous motions. Respondent denied said Letter-Appeal in an Order

[4]
dated March 13, 1997 x x x.

On May 27, 1997, petitioners filed this petition. This Court issued a temporary
restraining order on August 20, 1997 enjoining respondent from conducting a

Sec. 13. The Office of the Ombudsman shall have the following
powers, functions, and duties:
(1)
Investigate on its own, or on complaint by any
person, any act or omission of any public official, employee, office or
agency, when such act or omission appears to be illegal, unjust,
improper, or inefficient.

[5]

preliminary investigation and any further proceedings in OMB 0-95-0430.

Section 15 of the Ombudsman Act of 1989 states:

Petitioners raise the following issues:
I.

THE INVESTIGATION OF THE CHARGES IN THE COMPLAINT

FILED BY THE SAO-COA AGAINST PETITIONERS IS
PREMATURE, BECAUSE THEIR APPEAL FROM THE FINDINGS
OF THE SAO-COA IS STILL PENDING RESOLUTION BEFORE THE
COMMISSION PROPER. IN THE EXACTLY SIMILAR CASE
OF COA v. GABOR,
OMB
0-93-0714,
RESPONDENT
OMBUDSMAN HAD DISMISSED AND CONSIDERED
UNDOCKETED THE COMPLAINT ON THE SAME GROUNDS.

II.

RESPONDENT OMBUDSMAN VIOLATED PETITIONERS

CONSTITUTIONAL RIGHT TO EQUAL PROTECTION OF THE
LAWS, GUARANTEED UNDER SECTION 1 OF ARTICLE II OF
THE CONSTITUTION, IN NOT AFFORDING PETITIONERS THE
SAME RELIEF IT AFFORDED TO THE PUBLIC OFFICIAL
[6]
INVOLVED IN COA v. GABOR, SUPRA.

As to the first issue: In deference to the virtually unlimited investigatory and

prosecutorial powers granted to the Ombudsman by the Constitution and by law, the
Court has maintained a policy of non-interference with such powers. Sections 12 and 13,

Sec. 15. Powers, Functions and Duties.The Office of the Ombudsman

shall have the following powers, functions and duties:
(1) Investigate and prosecute on its own or on complaint by any
person, any act or omission of any public officer or employee, office
or agency, when such act or omission appears to be illegal, unjust,
improper or inefficient. It has primary jurisdiction over cases
cognizable by the Sandiganbayan and, in the exercise of this primary
jurisdiction, it may take over, at any stage, from any investigatory
agency of government, the investigation of such cases;
x x x.

[7]

[8]

This Court in Quiambao v. Desierto stated that:

As a rule, we have consistently adopted a policy of non-interference
in the conduct of preliminary investigations and provided sufficient
latitude of discretion to the investigating prosecutor to determine
what constitutes sufficient evidence as will establish probable cause.
As we held in the case of The Presidential Ad-Hoc Fact Finding
Committee on Behest Loans v. OmbudsmanAniano Desierto (418 Phil.
715; 362 SCRA 730, 735-736 [2001]):

Article XI of the Constitution provide:

Sec. 12. The Ombudsman and his Deputies, as protectors of the
people, shall act promptly on complaints filed in any form or manner
against public officials or employees of the government, or any
subdivision, agency or instrumentality thereof, including
governmentowned or controlled corporations, and shall, in
appropriate cases, notify the complainants of the action taken and
results thereof.

The prosecution of offenses committed by

public officers is vested in the Office of the
Ombudsman. To insulate the Office from outside
pressure and improper influence, the Constitution
as well as R.A. 6770 has endowed it with a wide
latitude of investigatory and prosecutor[ial] powers
virtually free from legislative, executive or judicial
intervention. This court consistently refrains from
interfering with the exercise of its powers, and

respects the initiative and independence inherent in

the Ombudsman who, "beholden to no one, acts as
the champion of the people and the preserver of
[9]
the integrity of the public service.

independence that allows the Office of the Ombudsman to achieve its constitutional
purpose and objective.

Furthermore, although the Commission on Audit (COA) report may aid the Office of the
In Kara-an v. Office of the Ombudsman,

[10]

this Court further expounded, thus:

Ombudsman in conducting its preliminary investigation, such report is not a

prerequisite.Both the Constitution and the Ombudsman Act of 1989 state that the Office

x x x The consistent policy of the Court is not to interfere

with
the
Ombudsmans
exercise
of
his
investigatory
and prosecutory powers. We held in Alba v. Nitorreda that:
x x x this Court has consistently refrained from interfering
with the exercise by the Ombudsman of his constitutionally
mandated investigatory and prosecutor[ial] powers. Otherwise
stated, it is beyond the ambit of this Court to review the exercise of
discretion of the Ombudsman in prosecuting or dismissing a
complaint filed before it. Such initiative and independence are
inherent in the Ombudsman who, beholden to no one, acts as the
champion of the people and preserver of the integrity of the public
service.
The Court explained the rationale underlying its policy of
non-interference in this wise:
x x x The rule is based not only upon respect for the
investigatory and prosecutor[ial] powers granted by the Constitution
to the Office of the Ombudsman but upon practicality as well.
Otherwise, the functions of the courts will be grievously hampered by
innumerable petitions assailing the dismissal of investigatory
proceedings conducted by the Office of the Ombudsman with regard
to complaints filed before it, in much the same way that the courts
would be extremely swamped if they would be compelled to review
the exercise of discretion on the part of the fiscals or prosecuting
attorneys each time they decide to file an information in court or
[11]
dismiss a complaint by a private complainant.

It is thus the practice of this Court to uphold the constitutionally conferred

investigatory and prosecutorial independence of the Ombudsman. It is precisely this

of the Ombudsman may undertake an investigation on complaint or on its own

initiative. Therefore, with or without the report from COA, the Ombudsman can conduct
a preliminary investigation. This Court has declared that the findings in a COA report or
the finality or lack of finality of such report is irrelevant to the investigation of the Office
of the Ombudsman in its determination of probable cause. In Cabrera v. Marcelo,
Court declared:
Petitioners cannot fault the Ombudsman for relying on the COA Audit
Report, notwithstanding that it had not yet attained finality. The
initial basis for the Ombudsman's investigation was not the COA Audit
Report, but the complaints filed by Casanova. While the allegations
in the complaint happened to be similar with those contained in the
COA Audit Report, the Ombudsman could very well conduct an
independent investigation based on the complaints for the purpose
of whether criminal charges should be filed against the
petitioners. The Ombudsman is reposed with broad investigatory
powers in the pursuit and of its constitutional mandate as protector
of the people and investigator of complaints filed against public
officials. It is even empowered to request from any government
agency such as the COA, the information necessary in the discharge of
its responsibilities and to examine, if necessary, pertinent records and
documents.
It should be borne in mind that the interest of the COA is solely
administrative, and that its investigation does not foreclose the
Ombudsman's authority to investigate and determine whether
there is a crime to be prosecuted for which a public official is
answerable. In Ramos v. Aquino, the Court ruled that the fact that
petitioners' accounts and vouchers had passed in audit is not a
ground for enjoining the provincial fiscal from conducting a
preliminary investigation for the purpose of determining the criminal

[12]

this

liability of petitioners for malversation. Clearly then, a finding of

probable cause does not derive its veracity from the findings of the
COA, but from the independent determination of the
[13]
Ombudsman.

the Office of the Ombudsman the discretion to dismiss without prejudice a preliminary
investigation if it finds that the final decision of COA is necessary for its investigation and
the future prosecution of the case. In another case with similar factual antecedents, it

Further, this Court in Aguinaldo v. Sandiganbayan

[14]

said:

may pursue the investigation because it realizes that the decision of COA is irrelevant or
unnecessary to the investigation and prosecution of the case. Since the Office of the

Therefore, as correctly stated by the Sandiganbayan in its order

of April 12, 1996, while the COA may assist in gathering evidence to
substantiate a charge of malversation, any determination made by it
will not be conclusive as to whether adequate cause exists to
prosecute a case. This is so because the Ombudsman is given the
power to investigate on its own an illegal act or omission of a public
[15]
official.

Ombudsman is granted such latitude, its varying treatment of similarly situated

investigations cannot by itself be considered a violation of any of the parties rights to the
equal protection of the laws.

Thus, petitioners have not shown that respondent committed a grave abuse of
And Layus v. Sandiganbayan

[16]

pronounced:

discretion amounting to lack or excess of jurisdiction in denying their motions to dismiss

the case or to suspend the proceedings.

The contention that a prior COA Report is necessary to determine

LAYUS' culpability is without merit. Under R.A. No. 6770, the
Ombudsman has the power to investigate and prosecute individuals
on matters and complaints referred to or filed before it. Such power
is plenary.
We likewise disagree with LAYUS' reliance on the regularity of her
COA Report. A COA approval of a government official's disbursement
only relates to the administrative aspect of his accountability, but it
does not foreclose the Ombudsman's authority to investigate and
determine whether there is a crime to be prosecuted for which such
official may be answerable. For, while the COA may regard a
government official to have substantially complied with its accounting
[17]
rules, this fact is not sufficient to dismiss the criminal case.
Therefore, the investigation of the charges in the complaint filed by the Special Audit
Office-COA against petitioners is not premature.
Regarding the second issue:
As stated, the Office of the Ombudsman has been granted virtually plenary
investigatory powers by the Constitution and by law. Thus, as a rule, the Office of the
Ombudsman may, for every particular investigation, whether instigated by a complaint
or on its own initiative, decide how best to pursue each investigation. This power gives

WHEREFORE, the petition is DISMISSED and the prayer for a writ of preliminary
injunction is DENIED. The temporary restraining order issued through the resolution
datedAugust 20, 1997 is LIFTED and respondent Office of the Ombudsman may proceed
with the preliminary investigation and/or any further proceedings in OMB 0-95-0430
entitledCommission on Audit v. Chona Dimayuga, et al. No costs.

SO ORDERED.

EN BANC

program: Provided, That the Monetary Board shall make its own system
conform as closely as possible with the principles provided for under Republic
Act No. 6758 [Salary Standardization Act]. Provided, however, That
compensation and wage structure of employees whose positions fall under
salary grade 19 and below shall be in accordance with the rates prescribed
under Republic Act No. 6758. [emphasis supplied]

[G.R. No. 148208. December 15, 2004]

CENTRAL BANK (now Bangko Sentral ng Pilipinas) EMPLOYEES ASSOCIATION,
INC., petitioner, vs. BANGKO SENTRAL NG PILIPINAS and the EXECUTIVE
SECRETARY, respondents.
DECISION
PUNO, J.:
Can a provision of law, initially valid, become subsequently unconstitutional, on
the ground that its continued operation would violate the equal protection of the law?
We hold that with the passage of the subsequent laws amending the charter of seven
(7) other governmental financial institutions (GFIs), the continued operation of the
last proviso of Section 15(c), Article II of Republic Act (R.A.) No. 7653, constitutes
invidious discrimination on the 2,994 rank-and-file employees of the Bangko Sentral ng
Pilipinas (BSP).
I.

The Case

First the facts.

On July 3, 1993, R.A. No. 7653 (the New Central Bank Act) took effect. It abolished
the old Central Bank of the Philippines, and created a new BSP.
On June 8, 2001, almost eight years after the effectivity of R.A. No. 7653,
petitioner Central Bank (now BSP) Employees Association, Inc., filed a petition for
prohibition against BSP and the Executive Secretary of the Office of the President, to
restrain respondents from further implementing the last proviso in Section 15(c), Article
II of R.A. No. 7653, on the ground that it is unconstitutional.
Article II, Section 15(c) of R.A. No. 7653 provides:
Section 15. Exercise of Authority - In the exercise of its authority, the Monetary Board
shall:
xxx xxx xxx
(c) establish a human resource management system which shall govern the
selection, hiring, appointment, transfer, promotion, or dismissal of all
personnel. Such system shall aim to establish professionalism and excellence
at all levels of the Bangko Sentral in accordance with sound principles of
management.
A compensation structure, based on job evaluation studies and wage surveys
and subject to the Boards approval, shall be instituted as an integral
component of the Bangko Sentrals human resource development

The thrust of petitioners challenge is that the above proviso makes

an unconstitutional cut between two classes of employees in the BSP, viz: (1) the
BSP officers or those exempted from the coverage of the Salary Standardization Law
(SSL) (exempt class); and (2) the rank-and-file (Salary Grade [SG] 19 and below), or
those not exempted from the coverage of the SSL (non-exempt class). It is contended
that this classification is a classic case of class legislation, allegedly not based on
substantial distinctions which make real differences, but solely on the SG of the BSP
personnels position. Petitioner also claims that it is not germane to the purposes of
Section 15(c), Article II of R.A. No. 7653, the most important of which is to establish
[1]
professionalism and excellence at all levels in the BSP. Petitioner offers the following
sub-set of arguments:
a.

the legislative history of R.A. No. 7653 shows that the

questioned proviso does not appear in the original and amended versions
of House Bill No. 7037, nor in the original version of Senate Bill No.
[2]
1235;

b. subjecting the compensation of the BSP rank-and-file employees to the

[3]
rate prescribed by the SSL actually defeats the purpose of the law of
establishing professionalism and excellence at all levels in the
[4]
BSP; (emphasis supplied)
c. the assailed proviso was the product of amendments introduced during the
deliberation of Senate Bill No. 1235, without showing its relevance to the
objectives of the law, and even admitted by one senator as discriminatory
[5]
against low-salaried employees of the BSP;
d. GSIS, LBP, DBP and SSS personnel are all exempted from the coverage of
the SSL; thus within the class of rank-and-file personnel of government
financial institutions (GFIs), the BSP rank-and-file are also discriminated
[6]
upon; and
e. the assailed proviso has caused the demoralization among the BSP rankand-file and resulted in the gross disparity between their compensation
[7]
and that of the BSP officers.
In sum, petitioner posits that the classification is not reasonable but arbitrary and
[8]
capricious, and violates the equal protection clause of the Constitution. Petitioner also
stresses: (a) that R.A. No. 7653 has a separability clause, which will allow the declaration
of the unconstitutionality of the proviso in question without affecting the other
provisions; and (b) the urgency and propriety of the petition, as some 2,994 BSP rankand-file employees have been prejudiced since 1994 when the proviso was

implemented. Petitioner concludes that: (1) since the inequitable proviso has no force
and effect of law, respondents implementation of such amounts to lack of jurisdiction;
and (2) it has no appeal nor any other plain, speedy and adequate remedy in the
ordinary course except through this petition for prohibition, which this Court should
take cognizance of, considering the transcendental importance of the legal issue
[9]
involved.
[10]

Respondent BSP, in its comment, contends that the provision does not violate
the equal protection clause and can stand the constitutional test, provided it is
construed in harmony with other provisions of the same law, such as fiscal and
administrative autonomy of BSP, and the mandate of the Monetary Board to establish
professionalism and excellence at all levels in accordance with sound principles of
management.
The Solicitor General, on behalf of respondent Executive Secretary, also defends
the validity of the provision. Quite simplistically, he argues that the classification is
based on actual and real differentiation, even as it adheres to the enunciated policy of
R.A. No. 7653 to establish professionalism and excellence within the BSP subject to
[11]
prevailing laws and policies of the national government.
II.

Issue

Thus, the sole - albeit significant - issue to be resolved in this case is whether the
last paragraph of Section 15(c), Article II of R.A. No. 7653, runs afoul of the
constitutional mandate that "No person shall be. . . denied the equal protection of the
[12]
laws."
III. Ruling

A. UNDER THE PRESENT STANDARDS OF EQUAL

PROTECTION, SECTION 15(c), ARTICLE II OF R.A. NO. 7653
IS VALID.
Jurisprudential standards for equal protection challenges indubitably show that the
classification created by the questioned proviso, on its face and in its operation, bears
no constitutional infirmities.
It is settled in constitutional law that the "equal protection" clause does not
prevent the Legislature from establishing classes of individuals or objects upon which
different rules shall operate - so long as the classification is not unreasonable. As held
[13]
in Victoriano v. Elizalde Rope Workers Union, and reiterated in a long line of
[14]
cases:
The guaranty of equal protection of the laws is not a guaranty of equality in the
application of the laws upon all citizens of the state. It is not, therefore, a requirement,
in order to avoid the constitutional prohibition against inequality, that every man,
woman and child should be affected alike by a statute. Equality of operation of statutes

does not mean indiscriminate operation on persons merely as such, but on persons
according to the circumstances surrounding them. It guarantees equality, not identity of
rights. The Constitution does not require that things which are different in fact be
treated in law as though they were the same. The equal protection clause does not
forbid discrimination as to things that are different. It does not prohibit legislation which
is limited either in the object to which it is directed or by the territory within which it is
to operate.
The equal protection of the laws clause of the Constitution allows classification.
Classification in law, as in the other departments of knowledge or practice, is the
grouping of things in speculation or practice because they agree with one another in
certain particulars. A law is not invalid because of simple inequality. The very idea of
classification is that of inequality, so that it goes without saying that the mere fact of
inequality in no manner determines the matter of constitutionality. All that is required
of a valid classification is that it be reasonable, which means that the classification
should be based on substantial distinctions which make for real differences, that it must
be germane to the purpose of the law; that it must not be limited to existing conditions
only; and that it must apply equally to each member of the class. This Court has held
that the standard is satisfied if the classification or distinction is based on a reasonable
foundation or rational basis and is not palpably arbitrary.
In the exercise of its power to make classifications for the purpose of enacting laws over
matters within its jurisdiction, the state is recognized as enjoying a wide range of
discretion. It is not necessary that the classification be based on scientific or marked
differences of things or in their relation. Neither is it necessary that the classification be
made with mathematical nicety. Hence, legislative classification may in many cases
properly rest on narrow distinctions, for the equal protection guaranty does not
preclude the legislature from recognizing degrees of evil or harm, and legislation is
addressed to evils as they may appear. (citations omitted)
[15]

Congress is allowed a wide leeway in providing for a valid classification. The

equal protection clause is not infringed by legislation which applies only to those
[16]
persons falling within a specified class. If the groupings are characterized by
substantial distinctions that make real differences, one class may be treated and
[17]
regulated differently from another. The classification must also be germane to the
[18]
purpose of the law and must apply to all those belonging to the same class.
In the case at bar, it is clear in the legislative deliberations that the exemption of
officers (SG 20 and above) from the SSL was intended to address the BSPs lack of
competitiveness in terms of attracting competent officers and executives. It was not
intended to discriminate against the rank-and-file. If the end-result did in fact lead to a
disparity of treatment between the officers and the rank-and-file in terms of salaries
and benefits, the discrimination or distinction has a rational basis and is not palpably,
[19]
purely, and entirely arbitrary in the legislative sense.
That the provision was a product of amendments introduced during the
deliberation of the Senate Bill does not detract from its validity. As early as 1947 and

[20]

reiterated in subsequent cases, this Court has subscribed to the conclusiveness of an

enrolled bill to refuse invalidating a provision of law, on the ground that the bill from
which it originated contained no such provision and was merely inserted by the
bicameral conference committee of both Houses.
Moreover, it is a fundamental and familiar teaching that all reasonable doubts
[21]
should be resolved in favor of the constitutionality of a statute. An act of the
legislature, approved by the executive, is presumed to be within constitutional
[22]
limitations. To justify the nullification of a law, there must be a clear and unequivocal
[23]
breach of the Constitution, not a doubtful and equivocal breach.

B. THE ENACTMENT, HOWEVER, OF SUBSEQUENT LAWS EXEMPTING ALL OTHER RANK-AND-FILE EMPLOYEES
OF GFIs FROM THE SSL - RENDERS THE CONTINUED
APPLICATION OF THE CHALLENGED PROVISION
A VIOLATION OF THE EQUAL PROTECTION CLAUSE.
While R.A. No. 7653 started as a valid measure well within the legislatures power,
we hold that the enactment of subsequent laws exempting all rank-and-file employees
of other GFIs leeched all validity out of the challenged proviso.
1. The concept of relative constitutionality.
The constitutionality of a statute cannot, in every instance, be determined by a
mere comparison of its provisions with applicable provisions of the Constitution, since
the statute may be constitutionally valid as applied to one set of facts and invalid in its
[24]
application to another.
A statute valid at one time may become void at another time because of altered
[25]
circumstances. Thus, if a statute in its practical operation becomes arbitrary or
confiscatory, its validity, even though affirmed by a former adjudication, is open to
[26]
inquiry and investigation in the light of changed conditions.
Demonstrative of this doctrine is Vernon Park Realty v. City of Mount
[27]
Vernon, where the Court of Appeals of New York declared as unreasonable and
arbitrary a zoning ordinance which placed the plaintiff's property in a residential district,
although it was located in the center of a business area. Later amendments to the
ordinance then prohibited the use of the property except for parking and storage of
automobiles, and service station within a parking area. The Court found the ordinance
to constitute an invasion of property rights which was contrary to constitutional due
process. It ruled:
While the common council has the unquestioned right to enact zoning laws respecting
the use of property in accordance with a well-considered and comprehensive plan
designed to promote public health, safety and general welfare, such power is subject to
the constitutional limitation that it may not be exerted arbitrarily or unreasonably and

this is so whenever the zoning ordinance precludes the use of the property for any
purpose for which it is reasonably adapted. By the same token, an ordinance valid
when adopted will nevertheless be stricken down as invalid when, at a later time, its
operation under changed conditions proves confiscatory such, for instance, as when
the greater part of its value is destroyed, for which the courts will afford relief in an
[28]
appropriate case. (citations omitted, emphasis supplied)
In the Philippine setting, this Court declared the continued enforcement of a valid
law as unconstitutional as a consequence of significant changes in circumstances.
[29]
Rutter v. Esteban upheld the constitutionality of the moratorium law - its enactment
[30]
and operation being a valid exercise by the State of its police power - but also ruled
that the continued enforcement of the otherwise valid law would be unreasonable
and oppressive. It noted the subsequent changes in the countrys business, industry and
agriculture. Thus, the law was set aside because its continued operation would be
grossly discriminatory and lead to the oppression of the creditors. The landmark ruling
[31]
states:
The question now to be determined is, is the period of eight (8) years which Republic
Act No. 342 grants to debtors of a monetary obligation contracted before the last global
war and who is a war sufferer with a claim duly approved by the Philippine War Damage
Commission reasonable under the present circumstances?
It should be noted that Republic Act No. 342 only extends relief to debtors of prewar
obligations who suffered from the ravages of the last war and who filed a claim for their
losses with the Philippine War Damage Commission. It is therein provided that said
obligation shall not be due and demandable for a period of eight (8) years from and
after settlement of the claim filed by the debtor with said Commission. The purpose of
the law is to afford to prewar debtors an opportunity to rehabilitate themselves by
giving them a reasonable time within which to pay their prewar debts so as to prevent
them from being victimized by their creditors. While it is admitted in said law that since
liberation conditions have gradually returned to normal, this is not so with regard to
those who have suffered the ravages of war and so it was therein declared as a policy
that as to them the debt moratorium should be continued in force (Section 1).
But we should not lose sight of the fact that these obligations had been pending since
1945 as a result of the issuance of Executive Orders Nos. 25 and 32 and at present their
enforcement is still inhibited because of the enactment of Republic Act No. 342 and
would continue to be unenforceable during the eight-year period granted to prewar
debtors to afford them an opportunity to rehabilitate themselves, which in plain
language means that the creditors would have to observe a vigil of at least twelve (12)
years before they could effect a liquidation of their investment dating as far back as
1941. his period seems to us unreasonable, if not oppressive. While the purpose of
Congress is plausible, and should be commended, the relief accorded works injustice to
creditors who are practically left at the mercy of the debtors. Their hope to effect
collection becomes extremely remote, more so if the credits are unsecured. And the

injustice is more patent when, under the law, the debtor is not even required to pay
interest during the operation of the relief, unlike similar statutes in the United States.
xxx xxx xxx
In the face of the foregoing observations, and consistent with what we believe to be as
the only course dictated by justice, fairness and righteousness, we feel that the only way
open to us under the present circumstances is to declare that the continued operation
and enforcement of Republic Act No. 342 at the present time is unreasonable and
oppressive, and should not be prolonged a minute longer, and, therefore, the same
should be declared null and void and without effect. (emphasis supplied, citations
omitted)
2. Applicability of the equal protection clause.
In the realm of equal protection, the U.S. case of Atlantic Coast Line R. Co. v.
[32]
Ivey is illuminating. The Supreme Court of Florida ruled against the continued
application of statutes authorizing the recovery of double damages plus attorney's fees
against railroad companies, for animals killed on unfenced railroad right of way without
proof of negligence. Competitive motor carriers, though creating greater hazards, were
not subjected to similar liability because they were not yet in existence when the
statutes were enacted. The Court ruled that the statutes became invalid as denying
equal protection of the law, in view of changed conditions since their enactment.
[33]

In another U.S. case, Louisville & N.R. Co. v. Faulkner, the Court of Appeals of
Kentucky declared unconstitutional a provision of a statute which imposed a duty upon
a railroad company of proving that it was free from negligence in the killing or injury of
cattle by its engine or cars. This, notwithstanding that the constitutionality of the
statute, enacted in 1893, had been previously sustained. Ruled the Court:
The constitutionality of such legislation was sustained because it applied to all similar
corporations and had for its object the safety of persons on a train and the protection of
property. Of course, there were no automobiles in those days.
The subsequent inauguration and development of transportation by motor vehicles on
the public highways by common carriers of freight and passengers created even greater
risks to the safety of occupants of the vehicles and of danger of injury and death of
domestic animals. Yet, under the law the operators of that mode of competitive
transportation are not subject to the same extraordinary legal responsibility for killing
such animals on the public roads as are railroad companies for killing them on their
private rights of way.
The Supreme Court, speaking through Justice Brandeis in Nashville, C. & St. L. Ry. Co. v.
Walters, 294 U.S. 405, 55 S.Ct. 486, 488, 79 L.Ed. 949, stated, A statute valid when
enacted may become invalid by change in the conditions to which it is applied. The
police power is subject to the constitutional limitation that it may not be exerted
arbitrarily or unreasonably. A number of prior opinions of that court are cited in support
of the statement. The State of Florida for many years had a statute, F.S.A. 356.01 et seq.

imposing extraordinary and special duties upon railroad companies, among which was
that a railroad company was liable for double damages and an attorney's fee for killing
livestock by a train without the owner having to prove any act of negligence on the part
of the carrier in the operation of its train. In Atlantic Coast Line Railroad Co. v. Ivey, it
was held that the changed conditions brought about by motor vehicle transportation
rendered the statute unconstitutional since if a common carrier by motor vehicle had
killed the same animal, the owner would have been required to prove negligence in the
operation of its equipment. Said the court, This certainly is not equal protection of the
[34]
law. (emphasis supplied)
Echoes of these rulings resonate in our case law, viz:
[C]ourts are not confined to the language of the statute under challenge in determining
whether that statute has any discriminatory effect. A statute nondiscriminatory on its
face may be grossly discriminatory in its operation. Though the law itself be fair on its
face and impartial in appearance, yet, if it is applied and administered by public
authority with an evil eye and unequal hand, so as practically to make unjust and illegal
discriminations between persons in similar circumstances, material to their rights, the
[35]
denial of equal justice is still within the prohibition of the Constitution. (emphasis
supplied, citations omitted)
[W]e see no difference between a law which denies equal protection and a law which
permits of such denial. A law may appear to be fair on its face and impartial in
appearance, yet, if it permits of unjust and illegal discrimination, it is within the
constitutional prohibition.. In other words, statutes may be adjudged unconstitutional
because of their effect in operation. If a law has the effect of denying the equal
[36]
protection of the law it is unconstitutional. . (emphasis supplied, citations omitted
3. Enactment of R.A. Nos. 7907 + 8282 + 8289 + 8291 + 8523 + 8763
+ 9302 = consequential unconstitutionality of challenged proviso.
According to petitioner, the last proviso of Section 15(c), Article II of R.A. No. 7653
is also violative of the equal protection clause because after it was enacted, the charters
of the GSIS, LBP, DBP and SSS were also amended, but the personnel of the latter GFIs
[37]
were all exempted from the coverage of the SSL. Thus, within the class of rank-andfile personnel of GFIs, the BSP rank-and-file are also discriminated upon.
Indeed, we take judicial notice that after the new BSP charter was enacted in 1993,
Congress also undertook the amendment of the charters of the GSIS, LBP, DBP and SSS,
and three other GFIs, from 1995 to 2004, viz:
1. R.A. No. 7907 (1995) for Land Bank of the Philippines (LBP);
2. R.A. No. 8282 (1997) for Social Security System (SSS);
3. R.A. No. 8289 (1997) for Small Business Guarantee and Finance
Corporation, (SBGFC);
4. R.A. No. 8291 (1997) for Government Service Insurance System (GSIS);

5. R.A. No. 8523 (1998) for Development Bank of the Philippines (DBP);
6. R.A. No. 8763 (2000) for Home Guaranty Corporation (HGC);

[38]

and

7. R.A. No. 9302 (2004) for Philippine Deposit Insurance Corporation (PDIC).
It is noteworthy, as petitioner points out, that the subsequent charters of the
seven other GFIs share this common proviso: a blanket exemption of all their
employees from the coverage of the SSL, expressly or impliedly, as illustrated below:

regulations: Provided, finally, That the SSS shall be exempt from the provisions of
Republic Act No. 6758 and Republic Act No. 7430. (emphasis supplied)
3. SBGFC (R.A. No. 8289)
Section 8. [Amending R.A. No. 6977, Section 11]:
xxx xxx xxx

1. LBP (R.A. No. 7907)

The Small Business Guarantee and Finance Corporation shall:
Section 10. Section 90 of [R.A. No. 3844] is hereby amended to read as follows:
xxx xxx xxx
Section 90. Personnel. xxx xxx xxx
All positions in the Bank shall be governed by a compensation, position classification
system and qualification standards approved by the Banks Board of Directors based on a
comprehensive job analysis and audit of actual duties and responsibilities. The
compensation plan shall be comparable with the prevailing compensation plans in the
private sector and shall be subject to periodic review by the Board no more than once
every two (2) years without prejudice to yearly merit reviews or increases based on
productivity and profitability. The Bank shall therefore be exempt from existing laws,
rules and regulations on compensation, position classification and qualification
standards. It shall however endeavor to make its system conform as closely as possible
with the principles under Republic Act No. 6758. (emphasis supplied)
xxx xxx xxx
2. SSS (R.A. No. 8282)
Section 1. [Amending R.A. No. 1161, Section 3(c)]:
xxx xxx xxx
(c)The Commission, upon the recommendation of the SSS President, shall appoint an
actuary and such other personnel as may [be] deemed necessary; fix their reasonable
compensation, allowances and other benefits; prescribe their duties and establish such
methods and procedures as may be necessary to insure the efficient, honest and
economical administration of the provisions and purposes of this Act: Provided,
however, That the personnel of the SSS below the rank of Vice President shall be
appointed by the SSS President: Provided, further, That the personnel appointed by the
SSS President, except those below the rank of assistant manager, shall be subject to the
confirmation by the Commission; Provided further, That the personnel of the SSS shall
be selected only from civil service eligibles and be subject to civil service rules and

(e) notwithstanding the provisions of Republic Act No. 6758, and Compensation
Circular No. 10, series of 1989 issued by the Department of Budget and
Management, the Board of Directors of SBGFC shall have the authority to extend to
the employees and personnel thereof the allowance and fringe benefits similar to
those extended to and currently enjoyed by the employees and personnel of other
government financial institutions. (emphases supplied)
4. GSIS (R.A. No. 8291)
Section 1. [Amending Section 43(d)].
xxx xxx xxx
Sec. 43. Powers and Functions of the Board of Trustees. - The Board of Trustees shall
have the following powers and functions:
xxx xxx xxx
(d) upon the recommendation of the President and General Manager, to approve the
GSIS organizational and administrative structures and staffing pattern, and to establish,
fix, review, revise and adjust the appropriate compensation package for the officers and
employees of the GSIS with reasonable allowances, incentives, bonuses, privileges and
other benefits as may be necessary or proper for the effective management, operation
and administration of the GSIS, which shall be exempt from Republic Act No. 6758,
otherwise known as the Salary Standardization Law and Republic Act No. 7430,
otherwise known as the Attrition Law. (emphasis supplied)
xxx xxx xxx
5. DBP (R.A. No. 8523)

Section 6. [Amending E.O. No. 81, Section 13]:

Section 13. Other Officers and Employees. - The Board of Directors shall provide for an
organization and staff of officers and employees of the Bank and upon recommendation
of the President of the Bank, fix their remunerations and other emoluments. All
positions in the Bank shall be governed by the compensation, position classification
system and qualification standards approved by the Board of Directors based on a
comprehensive job analysis of actual duties and responsibilities. The compensation plan
shall be comparable with the prevailing compensation plans in the private sector and
shall be subject to periodic review by the Board of Directors once every two (2) years,
without prejudice to yearly merit or increases based on the Banks productivity and
profitability. The Bank shall, therefore, be exempt from existing laws, rules, and
regulations on compensation, position classification and qualification standards. The
Bank shall however, endeavor to make its system conform as closely as possible with
the principles under Compensation and Position Classification Act of 1989 (Republic
Act No. 6758, as amended). (emphasis supplied)

3.
xxx xxx xxx
A compensation structure, based on job evaluation studies and wage surveys and
subject to the Boards approval, shall be instituted as an integral component of the
Corporations human resource development program: Provided, That all positions in the
Corporation shall be governed by a compensation, position classification system and
qualification standards approved by the Board based on a comprehensive job analysis
and audit of actual duties and responsibilities. The compensation plan shall be
comparable with the prevailing compensation plans of other government financial
institutions and shall be subject to review by the Board no more than once every two
(2) years without prejudice to yearly merit reviews or increases based on productivity
and profitability. The Corporation shall therefore be exempt from existing laws, rules
and regulations on compensation, position classification and qualification standards. It
shall however endeavor to make its system conform as closely as possible with the
principles under Republic Act No. 6758, as amended. (emphases supplied)

6. HGC (R.A. No. 8763)

Section 9. Powers, Functions and Duties of the Board of Directors. - The Board shall have
the following powers, functions and duties:
xxx xxx xxx
(e) To create offices or positions necessary for the efficient management, operation and
administration of the Corporation: Provided, That all positions in the Home Guaranty
Corporation (HGC) shall be governed by a compensation and position classification
system and qualifications standards approved by the Corporations Board of Directors
based on a comprehensive job analysis and audit of actual duties and
responsibilities: Provided, further, That the compensation plan shall be comparable
with the prevailing compensation plans in the private sector and which shall be
exempt from Republic Act No. 6758, otherwise known as the Salary Standardization
Law, and from other laws, rules and regulations on salaries and compensations; and to
establish a Provident Fund and determine the Corporations and the employees
contributions to the Fund; (emphasis supplied)
xxx xxx xxx
7. PDIC (R.A. No. 9302)
Section 2. Section 2 of [Republic Act No. 3591, as amended] is hereby further amended
to read:
xxx xxx xxx

Thus, eleven years after the amendment of the BSP charter, the rank-and-file of
seven other GFIs were granted the exemption that was specifically denied to the rankand-file of the BSP. And as if to add insult to petitioners injury, even the Securities and
Exchange Commission (SEC) was granted the same blanket exemption from the SSL in
[39]
2000!
The prior view on the constitutionality of R.A. No. 7653 was confined to an
evaluation of its classification between the rank-and-file and the officers of the
BSP, found reasonable because there were substantial distinctions that made real
differences between the two classes.
The above-mentioned subsequent enactments, however, constitute significant
changes in circumstance that considerably alter the reasonability of the continued
operation of the last proviso of Section 15(c), Article II of Republic Act No. 7653,
thereby exposing the proviso to more serious scrutiny. This time, the scrutiny relates to
the constitutionality of the classification - albeit made indirectly as a consequence of the
passage of eight other laws - between the rank-and-file of the BSP and the seven other
GFIs. The classification must not only be reasonable, but must also apply equally to all
members of the class. The proviso may be fair on its face and impartial in
appearance but it cannot be grossly discriminatory in its operation, so as practically to
[40]
make unjust distinctions between persons who are without differences.
Stated differently, the second level of inquiry deals with the following questions:
Given that Congress chose to exempt other GFIs (aside the BSP) from the coverage of
the SSL, can the exclusion of the rank-and-file employees of the BSP stand constitutional
scrutiny in the light of the fact that Congress did not exclude the rank-and-file
employees of the other GFIs? Is Congress power to classify so unbridled as to sanction
unequal and discriminatory treatment, simply because the inequity manifested itself,
not instantly through a single overt act, but gradually and progressively, through seven

separate acts of Congress? Is the right to equal protection of the law bounded in time
and space that: (a) the right can only be invoked against a classification made directly
and deliberately, as opposed to a discrimination that arises indirectly, or as a
consequence of several other acts; and (b) is the legal analysis confined to determining
the validity within the parameters of the statute or ordinance (where the inclusion or
exclusion is articulated), thereby proscribing any evaluation vis--vis the grouping, or the
lack thereof, among several similar enactments made over a period of time?
In this second level of scrutiny, the inequality of treatment cannot be justified on
the mere assertion that each exemption (granted to the seven other GFIs) rests on a
policy determination by the legislature. All legislative enactments necessarily rest on a
policy determination - even those that have been declared to contravene the
Constitution. Verily, if this could serve as a magic wand to sustain the validity of a
statute, then no due process and equal protection challenges would ever prosper. There
is nothing inherently sacrosanct in a policy determination made by Congress or by the
Executive; it cannot run riot and overrun the ramparts of protection of the Constitution.
In fine, the policy determination argument may support the inequality of
treatment between the rank-and-file and the officers of the BSP, but it cannot justify the
inequality of treatment between BSP rank-and-file and other GFIs who are similarly
situated. It fails to appreciate that what is at issue in the second level of scrutiny is not
the declared policy of each law per se, but the oppressive results of Congress
inconsistent and unequal policy towards the BSP rank-and-file and those of the seven
other GFIs. At bottom, the second challenge to the constitutionality of Section 15(c),
Article II of Republic Act No. 7653 is premised precisely on the irrational discriminatory
policy adopted by Congress in its treatment of persons similarly situated. In the field of
equal protection, the guarantee that "no person shall be denied the equal protection of
the laws includes the prohibition against enacting laws that allow invidious
discrimination, directly or indirectly. If a law has the effect of denying the equal
[41]
protection of the law, or permits such denial, it is unconstitutional.

employees to be supported fully from their corporate funds and for such technical
[42]
positions as may be approved by the President in critical government agencies.
The same favored treatment is made for the GFIs and the GOCCs under the SSL.
Section 3(b) provides that one of the principles governing the Compensation and
Position Classification System of the Government is that: [b]asic compensation for all
personnel in the government and government-owned or controlled corporations and
financial institutions shall generally be comparable with those in the private sector
doing comparable work, and must be in accordance with prevailing laws on minimum
wages.
Thus, the BSP and all other GFIs and GOCCs were under the unified Compensation
[43]
and Position Classification System of the SSL, but rates of pay under the SSL were
determined on the basis of, among others, prevailing rates in the private sector for
comparable work. Notably, the Compensation and Position Classification System was to
be governed by the following principles: (a) just and equitable wages, with the ratio of
[44]
compensation between pay distinctions maintained at equitable levels; and (b) basic
compensation generally comparable with the private sector, in accordance with
[45]
prevailing laws on minimum wages. Also, the Department of Budget and
Management was directed to use, as guide for preparing the Index of Occupational
[46]
Services, the Benchmark Position Schedule, and the following factors:
(1) the education and experience required to perform the duties and
responsibilities of the positions;
(2) the nature and complexity of the work to be performed;
(3) the kind of supervision received;
(4) mental and/or physical strain required in the completion of the work;
(5) nature and extent of internal and external relationships;

It is against this standard that the disparate treatment of the BSP rank-and-file
from the other GFIs cannot stand judicial scrutiny. For as regards the exemption from
the coverage of the SSL, there exist no substantial distinctions so as to differentiate, the
BSP rank-and-file from the other rank-and-file of the seven GFIs. On the contrary, our
legal history shows that GFIs have long been recognized as comprising one distinct
class, separate from other governmental entities.

(6) kind of supervision exercised;

Before the SSL, Presidential Decree (P.D.) No. 985 (1976) declared it as a State
policy (1) to provide equal pay for substantially equal work, and (2) to base differences
in pay upon substantive differences in duties and responsibilities, and qualification
requirements of the positions. P.D. No. 985 was passed to address disparities in pay
among similar or comparable positions which had given rise to dissension among
government employees. But even then, GFIs and government-owned and/or
controlled corporations (GOCCs) were already identified as a distinct class among
government employees. Thus, Section 2 also provided, [t]hat notwithstanding a
standardized salary system established for all employees, additional financial incentives
may be established by government corporation and financial institutions for their

(10) hardship, hazard and personal risk involved in the job.

(7) decision-making responsibility;

(8) responsibility for accuracy of records and reports;
(9) accountability for funds, properties and equipment; and

The Benchmark Position Schedule enumerates the position titles that fall within
Salary Grades 1 to 20.
Clearly, under R.A. No. 6758, the rank-and-file of all GFIs were similarly situated in
all aspects pertaining to compensation and position classification, in consonance with
[47]
Section 5, Article IX-B of the 1997 Constitution.
Then came the enactment of the amended charter of the BSP, implicitly
exempting the Monetary Board from the SSL by giving it express authority to determine
and institute its own compensation and wage structure. However, employees whose

positions fall under SG 19 and below were specifically limited to the rates prescribed
under the SSL.
Subsequent amendments to the charters of other GFIs followed. Significantly,
each government financial institution (GFI) was not only expressly authorized to
determine and institute its own compensation and wage structure, but also explicitly
exempted - without distinction as to salary grade or position - all employees of the GFI
from the SSL.
It has been proffered that legislative deliberations justify the grant or withdrawal
of exemption from the SSL, based on the perceived need to fulfill the mandate of the
institution concerned considering, among others, that: (1) the GOCC or GFI is essentially
proprietary in character; (2) the GOCC or GFI is in direct competition with
their [sic] counterparts in the private sector, not only in terms of the provisions of goods
or services, but also in terms of hiring and retaining competent personnel; and (3) the
GOCC or GFI are or were [sic] experiencing difficulties filling up plantilla positions with
competent personnel and/or retaining these personnel. The need for the scope of
exemption necessarily varies with the particular circumstances of each institution, and
the corresponding variance in the benefits received by the employees is merely
incidental.
The fragility of this argument is manifest. First, the BSP is the central monetary
[48]
[49]
authority, and the banker of the government and all its political subdivisions. It
[50]
has the sole power and authority to issue currency; provide policy directions in the
areas of money, banking, and credit; and supervise banks and regulate finance
companies and non-bank financial institutions performing quasi-banking
[51]
functions, including the exempted GFIs. Hence, the argument that the rank-and-file
employees of the seven GFIs were exempted because of the importance of their
institutions mandate cannot stand any more than an empty sack can stand.
Second, it is certainly misleading to say that the need for the scope of exemption
necessarily varies with the particular circumstances of each institution. Nowhere in the
deliberations is there a cogent basis for the exclusion of the BSP rank-and-file from the
exemption which was granted to the rank-and-file of the other GFIs and the SEC. As
point in fact, the BSP and the seven GFIs are similarly situated in so far as Congress
deemed it necessary for these institutions to be exempted from the SSL. True, the SSLexemption of the BSP and the seven GFIs was granted in the amended charters of each
GFI, enacted separately and over a period of time. But it bears emphasis that, while
each GFI has a mandate different and distinct from that of another, the deliberations
show that the raison dtre of the SSL-exemption was inextricably linked to and for the
most part based on factors common to the eight GFIs, i.e., (1) the pivotal role they play
in the economy; (2) the necessity of hiring and retaining qualified and effective
personnel to carry out the GFIs mandate; and (3) the recognition that the compensation
package of these GFIs is not competitive, and fall substantially below industry standards.
Considering further that (a) the BSP was the first GFI granted SSL exemption; and (b) the
subsequent exemptions of other GFIs did not distinguish between the officers and the
rank-and-file; it is patent that the classification made between the BSP rank-and-file
and those of the other seven GFIs was inadvertent, and NOT intended, i.e., it was not

based on any substantial distinction vis--vis the particular circumstances of each GFI.
Moreover, the exemption granted to two GFIs makes express reference to allowance
and fringe benefits similar to those extended to and currently enjoyed by the employees
[52]
and personnel of other GFIs, underscoring that GFIs are a particular class within the
realm of government entities.
It is precisely this unpremeditated discrepancy in treatment of the rank-and-file of
the BSP - made manifest and glaring with each and every consequential grant of blanket
exemption from the SSL to the other GFIs - that cannot be rationalized or justified. Even
more so, when the SEC - which is not a GFI - was given leave to have a compensation
plan that shall be comparable with the prevailing compensation plan in the [BSP] and
[53]
other [GFIs], then granted a blanket exemption from the SSL, and its rank-and-file
endowed a more preferred treatment than the rank-and-file of the BSP.
The violation to the equal protection clause becomes even more pronounced
when we are faced with this undeniable truth: that if Congress had enacted a law for the
sole purpose of exempting the eight GFIs from the coverage of the SSL, the exclusion of
the BSP rank-and-file employees would have been devoid of any substantial or material
basis. It bears no moment, therefore, that the unlawful discrimination was not a direct
result arising from one law. Nemo potest facere per alium quod non potest facere per
directum. No one is allowed to do indirectly what he is prohibited to do directly.
It has also been proffered that similarities alone are not sufficient to support the
conclusion that rank-and-file employees of the BSP may be lumped together with similar
employees of the other GOCCs for purposes of compensation, position classification and
qualification standards. The fact that certain persons have some attributes in common
does not automatically make them members of the same class with respect to a
[54]
legislative classification. Cited is the ruling in Johnson v. Robinson: this finding of
similarity ignores that a common characteristic shared by beneficiaries and
nonbeneficiaries alike, is not sufficient to invalidate a statute when other characteristics
peculiar to only one group rationally explain the statutes different treatment of the two
groups.
The reference to Johnson is inapropos. In Johnson, the US Court sustained the
validity of the classification as there were quantitative and qualitative distinctions,
expressly recognized by Congress, which formed a rational basis for the
classification limiting educational benefits to military service veterans as a means of
helping them readjust to civilian life. The Court listed the peculiar characteristics as
follows:
First, the disruption caused by military service is quantitatively greater than that caused
by alternative civilian service. A conscientious objector performing alternative service is
obligated to work for two years. Service in the Armed Forces, on the other hand,
involves a six-year commitment
xxx xxx xxx

Second, the disruptions suffered by military veterans and alternative service performers
are qualitatively different. Military veterans suffer a far greater loss of personal freedom
during their service careers. Uprooted from civilian life, the military veteran becomes
part of the military establishment, subject to its discipline and potentially hazardous
duty. Congress was acutely aware of the peculiar disabilities caused by military service,
in consequence of which military servicemen have a special need for readjustment
[55]
benefits (citations omitted)
In the case at bar, it is precisely the fact that as regards the exemption from the
SSL, there are no characteristics peculiar only to the seven GFIs or their rank-and-file
so as to justify the exemption which BSP rank-and-file employees were denied (not to
mention the anomaly of the SEC getting one). The distinction made by the law is not
[56]
only superficial, but also arbitrary. It is not based on substantial distinctions that make
real differences between the BSP rank-and-file and the seven other GFIs.
Moreover, the issue in this case is not - as the dissenting opinion of Mme. Justice
Carpio-Morales would put it - whether being an employee of a GOCC or GFI is
reasonable and sufficient basis for exemption from R.A. No. 6758. It is Congress itself
that distinguished the GFIs from other government agencies, not once but eight times,
through the enactment of R.A. Nos. 7653, 7907, 8282, 8289, 8291, 8523, 8763, and
9302. These laws may have created a preferred sub-class within government
employees, but the present challenge is not directed at the wisdom of these laws.
Rather, it is a legal conundrum involving the exercise of legislative power, the validity of
which must be measured not only by looking at the specific exercise in and by itself (R.A.
No. 7653), but also as to the legal effects brought about by seven separate exercises albeit indirectly and without intent.
Thus, even if petitioner had not alleged a comparable change in the factual milieu
as regards the compensation, position classification and qualification standards of the
employees of the BSP (whether of the executive level or of the rank-and-file) since the
[57]
enactment of the new Central Bank Act is of no moment. In GSIS v. Montesclaros, this
Court resolved the issue of constitutionality notwithstanding that claimant had
manifested that she was no longer interested in pursuing the case, and even when the
constitutionality of the said provision was not squarely raised as an issue, because the
issue involved not only the claimant but also others similarly situated and whose claims
GSIS would also deny based on the challenged proviso. The Court held that social justice
and public interest demanded the resolution of the constitutionality of the proviso. And
so it is with the challenged proviso in the case at bar.
It bears stressing that the exemption from the SSL is a privilege fully within the
legislative prerogative to give or deny. However, its subsequent grant to the rank-andfile of the seven other GFIs and continued denial to the BSP rank-and-file employees
breached the latters right to equal protection. In other words, while the granting of a
privilege per se is a matter of policy exclusively within the domain and prerogative of
Congress, the validity or legality of the exercise of this prerogative is subject to judicial
[58]
review. So when the distinction made is superficial, and not based on substantial
distinctions that make real differences between those included and excluded, it
becomes a matter of arbitrariness that this Court has the duty and the power to

[59]

correct. As held in the United Kingdom case of Hooper v. Secretary of State for Work
[60]
and Pensions, once the State has chosen to confer benefits, discrimination contrary
to law may occur where favorable treatment already afforded to one group is refused to
another, even though the State is under no obligation to provide that favorable
[61]
treatment.
The disparity of treatment between BSP rank-and-file and the rank-and-file of the
other seven GFIs definitely bears the unmistakable badge of invidious discrimination no one can, with candor and fairness, deny the discriminatory character of the
subsequent blanket and total exemption of the seven other GFIs from the SSL when
such was withheld from the BSP. Alikes are being treated as unalikes without any
rational basis.
Again, it must be emphasized that the equal protection clause does not demand
absolute equality but it requires that all persons shall be treated alike, under like
circumstances and conditions both as to privileges conferred and liabilities
enforced. Favoritism and undue preference cannot be allowed. For the principle is that
equal protection and security shall be given to every person under circumstances which,
if not identical, are analogous. If law be looked upon in terms of burden or charges,
those that fall within a class should be treated in the same fashion; whatever
[62]
restrictions cast on some in the group is equally binding on the rest.
In light of the lack of real and substantial distinctions that would justify the
unequal treatment between the rank-and-file of BSP from the seven other GFIs, it is
clear that the enactment of the seven subsequent charters has rendered the continued
application of the challenged proviso anathema to the equal protection of the law, and
the same should be declared as an outlaw.
IV. Equal Protection Under International Lens
In our jurisdiction, the standard and analysis of equal protection challenges in the
main have followed the rational basis test, coupled with a deferential attitude to
[63]
legislative classifications and a reluctance to invalidate a law unless there is a showing
[64]
of a clear and unequivocal breach of the Constitution.
A. Equal Protection
in the United States
In contrast, jurisprudence in the U.S. has gone beyond the static rational basis
test. Professor Gunther highlights the development in equal protection jurisprudential
[65]
analysis, to wit:
Traditionally, equal protection supported only minimal judicial intervention in most
contexts. Ordinarily, the command of equal protection was only that government must
not impose differences in treatment except upon some reasonable differentiation fairly
related to the object of regulation. The old variety of equal protection scrutiny focused
solely on the meansused by the legislature: it insisted merely that the classification in
the statute reasonably relates to the legislative purpose. Unlike substantive due
process, equal protection scrutiny was not typically concerned with identifying

fundamental values and restraining legislative ends. And usually the rational
classification requirement was readily satisfied: the courts did not demand a tight fit
between classification and purpose; perfect congruence between means and ends was
not required.

identified during this time were voting and access to the ballot, while suspect
classifications included sex, alienage and illegitimacy.]

xxx xxx xxx

Even while the two-tier scheme has often been adhered to in form, there has also been
an increasingly noticeable resistance to the sharp difference between deferential old
and interventionist new equal protection. A number of justices sought formulations that
would blur the sharp distinctions of the two-tiered approach or that would narrow the
gap between strict scrutiny and deferential review. The most elaborate attack came
from Justice Marshall, whose frequently stated position was developed most
[66]
elaborately in his dissent in the Rodriguezcase:

[From marginal intervention to major cutting edge: The Warren Courts new equal
protection and the two-tier approach.]
From its traditional modest role, equal protection burgeoned into a major intervention
tool during the Warren era, especially in the 1960s. The Warren Court did not abandon
the deferential ingredients of the old equal protection: in most areas of economic and
social legislation, the demands imposed by equal protection remained as minimal as
everBut the Court launched an equal protection revolution by finding large new areas
for strict rather than deferential scrutiny. A sharply differentiated two-tier
approach evolved by the late 1960s: in addition to the deferential old equal protection,
a new equal protection, connoting strict scrutiny, arose. The intensive review associated
with the new equal protection imposed two demands - a demand not only as to means
but also one as to ends. Legislation qualifying for strict scrutiny required a far closer fit
between classification and statutory purpose than the rough and ready flexibility
traditionally tolerated by the old equal protection: means had to be shown necessary
to achieve statutory ends, not merely reasonably related ones.Moreover, equal
protection became a source of ends scrutiny as well: legislation in the areas of the new
equal protection had to be justified by compelling state interests, not merely the wide
spectrum of legitimate state ends.
The Warren Court identified the areas appropriate for strict scrutiny by searching
for two characteristics: the presence of a suspect classification; or an impact on
fundamental rights or interests. In the category of suspect classifications, the Warren
Courts major contribution was to intensify the strict scrutiny in the traditionally
interventionist area of racial classifications. But other cases also suggested that there
might be more other suspect categories as well: illegitimacy and wealth for example.
But it was the fundamental interests ingredient of the new equal protection that proved
particularly dynamic, open-ended, and amorphous.. [Other fundamental interests
included voting, criminal appeals, and the right of interstate travel .]
xxx xxx xxx
The Burger Court and Equal Protection.
The Burger Court was reluctant to expand the scope of the new equal protection,
although its best established ingredient retains vitality. There was also mounting
discontent with the rigid two-tier formulations of the Warren Courts equal protection
doctrine. It was prepared to use the clause as an interventionist tool without resorting
to the strict language of the new equal protection. [Among the fundamental interests

xxx xxx xxx

The Court apparently seeks to establish [that] equal protection cases fall into one of two
neat categories which dictate the appropriate standard of review - strict scrutiny or
mere rationality. But this (sic) Courts [decisions] defy such easy categorization. A
principled reading of what this Court has done reveals that it has applied a spectrum of
standards in reviewing discrimination allegedly violative of the equal protection clause.
This spectrum clearly comprehends variations in the degree of care with which Court
will scrutinize particular classification, depending, I believe, on the constitutional and
societal importance of the interests adversely affected and the recognized invidiousness
of the basis upon which the particular classification is drawn.
Justice Marshalls sliding scale approach describes many of the modern decisions,
although it is a formulation that the majority refused to embrace. But the Burger Courts
results indicate at least two significant changes in equal protection
law: First, invocation of the old equal protection formula no longer signals, as it did with
the Warren Court, an extreme deference to legislative classifications and a virtually
automatic validation of challenged statutes. Instead, several cases, even while voicing
the minimal rationality hands-off standards of the old equal protection, proceed to find
the statute unconstitutional. Second, in some areas the modern Court has put forth
standards for equal protection review that, while clearly more intensive than the
deference of the old equal protection, are less demanding than the strictness of the new
equal protection. Sex discrimination is the best established example of anintermediate
level of review. Thus, in one case, the Court said that classifications by gender must
serve important governmental objectives and must be substantially related to
achievement of those objectives. That standard is intermediate with respect to both
ends and means: where ends must be compelling to survive strict scrutiny and merely
legitimate under the old mode, important objectives are required here; and where
means must be necessary under the new equal protection, and merely rationally related
under the old equal protection, they must be substantially related to survive the
intermediate level of review. (emphasis supplied, citations omitted)
B. Equal Protection
in Europe

The United Kingdom and other members of the European Community have also
gone forward in discriminatory legislation and jurisprudence. Within the United
Kingdom domestic law, the most extensive list of protected grounds can be found
in Article 14 of the European Convention on Human Rights (ECHR). It prohibits
discrimination on grounds such as sex, race, colour, language, religion, political or other
opinion, national or social origin, association with a national minority, property, birth or
other status. This list is illustrative and not exhaustive. Discrimination on the basis of
race, sex and religion is regarded as grounds that require strict scrutiny. A further
indication that certain forms of discrimination are regarded as particularly
suspect under the Covenant can be gleaned from Article 4, which, while allowing states
to derogate from certain Covenant articles in times of national emergency, prohibits
derogation by measures that discriminate solely on the grounds of race, colour,
[67]
language, religion or social origin.
Moreover, the European Court of Human Rights has developed a test of
justification which varies with the ground of discrimination. In the Belgian
[68]
Linguistics case the European Court set the standard of justification at a low level:
discrimination would contravene the Convention only if it had no legitimate aim, or
there was no reasonable relationship of proportionality between the means employed
[69]
and the aim sought to be realised. But over the years, the European Court has
developed a hierarchy of grounds covered by Article 14 of the ECHR, a much higher
level of justification being required in respect of those regarded as suspect (sex, race,
nationality, illegitimacy, or sexual orientation) than of others. Thus,
[70]
in Abdulaziz, the European Court declared that:
. . . [t]he advancement of the equality of the sexes is today a major goal in the member
States of the Council of Europe. This means that very weighty reasons would have to be
advanced before a difference of treatment on the ground of sex could be regarded as
compatible with the Convention.
[71]

And in Gaygusuz v. Austria, the European Court held that very weighty
reasons would have to be put forward before the Court could regard a difference of
treatment based exclusively on the ground of nationality as compatible with the
[72]
Convention. The European Court will then permit States a very much narrower
margin of appreciation in relation to discrimination on grounds of sex, race, etc., in the
application of the Convention rights than it will in relation to distinctions drawn by
[73]
states between, for example, large and small land-owners.
C. Equality under
International Law
The principle of equality has long been recognized under international law. Article
1 of the Universal Declaration of Human Rights proclaims that all human beings are
born free and equal in dignity and rights. Non-discrimination, together with equality
before the law and equal protection of the law without any discrimination, constitutes
[74]
basic principles in the protection of human rights.

Most, if not all, international human rights instruments include some prohibition
[75]
on discrimination and/or provisions about equality. The general international
provisions pertinent to discrimination and/or equality are the International Covenant on
[76]
Civil and Political Rights (ICCPR); the International Covenant on Economic, Social and
Cultural Rights (ICESCR); the International Convention on the Elimination of all Forms of
[77]
Racial Discrimination (CERD); the Convention on the Elimination of all Forms of
Discrimination against Women (CEDAW); and the Convention on the Rights of the Child
(CRC).
In the broader international context, equality is also enshrined in regional
[78]
instruments such as the American Convention on Human Rights; the African Charter
[79]
[80]
on Human and People's Rights; the European Convention on Human Rights; the
European Social Charter of 1961 and revised Social Charter of 1996; and the European
Union Charter of Rights (of particular importance to European states). Even the Council
of the League of Arab States has adopted the Arab Charter on Human Rights in 1994,
[81]
although it has yet to be ratified by the Member States of the League.
The equality provisions in these instruments do not merely function as
traditional "first generation" rights, commonly viewed as concerned only with
constraining rather than requiring State action. Article 26 of the ICCPR requires
guarantee[s] of equal and effective protection against discrimination while Articles 1
and 14 of the American and European Conventions oblige States Parties to ensure ... the
full and free exercise of [the rights guaranteed] ... without any discrimination and to
[82]
secure without discrimination the enjoyment of the rights guaranteed. These
provisions impose a measure of positive obligation on States Parties to take steps to
eradicate discrimination.
In the employment field, basic detailed minimum standards ensuring equality and
[83]
prevention of discrimination, are laid down in the ICESCR and in a very large number
of Conventions administered by the International Labour Organisation, a United Nations
[84]
body. Additionally, many of the other international and regional human rights
[85]
instruments have specific provisions relating to employment.
The United Nations Human Rights Committee has also gone beyond the earlier
tendency to view the prohibition against discrimination (Article 26) as confined to the
[86]
[87]
[88]
ICCPR rights. In Broeks and Zwaan-de Vries, the issue before the Committee was
whether discriminatory provisions in the Dutch Unemployment Benefits Act (WWV) fell
within the scope of Article 26. The Dutch government submitted that discrimination in
social security benefit provision was not within the scope of Article 26, as the right was
contained in the ICESCR and not the ICCPR. They accepted that Article 26 could go
beyond the rights contained in the Covenant to other civil and political rights, such as
discrimination in the field of taxation, but contended that Article 26 did not extend to
the social, economic, and cultural rights contained in ICESCR. The Committee rejected
this argument. In its view, Article 26 applied to rights beyond the Covenant including the
rights in other international treaties such as the right to social security found in ICESCR:
Although Article 26 requires that legislation should prohibit discrimination, it does not
of itself contain any obligation with respect to the matters that may be provided for by

legislation. Thus it does not, for example, require any state to enact legislation to
provide for social security. However, when such legislation is adopted in the exercise of
a State's sovereign power, thensuch legislation must comply with Article 26 of the
[89]
Covenant.
Breaches of the right to equal protection occur directly or indirectly. A
classification may be struck down if it has the purpose or effect of violating the right to
equal protection. International law recognizes that discrimination may occur
[90]
indirectly, as the Human Rights Committee took into account the definitions of
discrimination adopted by CERD and CEDAW in declaring that:
. . . discrimination as used in the [ICCPR] should be understood to imply any distinction,
exclusion, restriction or preference which is based on any ground such as race, colour,
sex, language, religion, political or other opinion, national or social origin, property,
birth or other status, and which has the purpose or effect of nullifying or impairing the
recognition, enjoyment or exercise by all persons, on an equal footing, of all rights and
[91]
freedoms. (emphasis supplied)
Thus, the two-tier analysis made in the case at bar of the challenged provision,
and its conclusion of unconstitutionality by subsequent operation, are in cadence and
in consonance with the progressive trend of other jurisdictions and in international
law. There should be no hesitation in using the equal protection clause as a major
cutting edge to eliminate every conceivable irrational discrimination in our society.
Indeed, the social justice imperatives in the Constitution, coupled with the special status
[92]
and protection afforded to labor, compel this approach.
Apropos the special protection afforded to labor under our Constitution and
international law, we held in International School Alliance of Educators v.
[93]
Quisumbing:

the general principle against discrimination, the very antithesis of fairness and justice.
The Philippines, through its Constitution, has incorporated this principle as part of its
national laws.
In the workplace, where the relations between capital and labor are often skewed in
favor of capital, inequality and discrimination by the employer are all the more
reprehensible.
The Constitution specifically provides that labor is entitled to "humane conditions of
work." These conditions are not restricted to the physical workplace - the factory, the
office or the field - but include as well the manner by which employers treat their
employees.
The Constitution also directs the State to promote "equality of employment
opportunities for all." Similarly, the Labor Code provides that the State shall "ensure
equal work opportunities regardless of sex, race or creed." It would be an affront to
both the spirit and letter of these provisions if the State, in spite of its primordial
obligation to promote and ensure equal employment opportunities, closes its eyes to
unequal and discriminatory terms and conditions of employment.
xxx xxx xxx
Notably, the International Covenant on Economic, Social, and Cultural Rights, in Article 7
thereof, provides:
The States Parties to the present Covenant recognize the right of everyone to the
enjoyment of just and [favorable] conditions of work, which ensure, in particular:
a. Remuneration which provides all workers, as a minimum, with:

That public policy abhors inequality and discrimination is beyond contention. Our
Constitution and laws reflect the policy against these evils. The Constitution in the
Article on Social Justice and Human Rights exhorts Congress to "give highest priority to
the enactment of measures that protect and enhance the right of all people to human
dignity, reduce social, economic, and political inequalities." The very broad Article 19 of
the Civil Code requires every person, "in the exercise of his rights and in the
performance of his duties, [to] act with justice, give everyone his due, and observe
honesty and good faith."
International law, which springs from general principles of law, likewise proscribes
discrimination. General principles of law include principles of equity, i.e., the general
principles of fairness and justice, based on the test of what is reasonable. The Universal
Declaration of Human Rights, the International Covenant on Economic, Social, and
Cultural Rights, the International Convention on the Elimination of All Forms of Racial
Discrimination, the Convention against Discrimination in Education, the Convention (No.
111) Concerning Discrimination in Respect of Employment and Occupation - all embody

i. Fair wages and equal remuneration for work of equal value

without distinction of any kind, in particular women being
guaranteed conditions of work not inferior to those enjoyed
by men, with equal pay for equal work;
xxx xxx xxx
The foregoing provisions impregnably institutionalize in this jurisdiction the long
honored legal truism of "equal pay for equal work." Persons who work with substantially
equal qualifications, skill, effort and responsibility, under similar conditions, should be
paid similar salaries. (citations omitted)
Congress retains its wide discretion in providing for a valid classification, and its
policies should be accorded recognition and respect by the courts of justice except
[94]
when they run afoul of the Constitution. The deference stops where the

classification violates a fundamental right, or prejudices persons accorded special

protection by the Constitution. When these violations arise, this Court must discharge
its primary role as the vanguard of constitutional guaranties, and require a stricter and
more exacting adherence to constitutional limitations. Rational basis should not
suffice.
Admittedly, the view that prejudice to persons accorded special protection by the
Constitution requires a stricter judicial scrutiny finds no support in American or English
jurisprudence. Nevertheless, these foreign decisions and authorities are not per
se controlling in this jurisdiction. At best, they are persuasive and have been used to
[95]
support many of our decisions. We should not place undue and fawning reliance upon
them and regard them as indispensable mental crutches without which we cannot come
to our own decisions through the employment of our own endowments. We live in a
different ambience and must decide our own problems in the light of our own interests
and needs, and of our qualities and even idiosyncrasies as a people, and always with our
[96]
own concept of law and justice. Our laws must be construed in accordance with the
intention of our own lawmakers and such intent may be deduced from the language of
each law and the context of other local legislation related thereto. More importantly,
they must be construed to serve our own public interest which is the be-all and the endall of all our laws. And it need not be stressed that our public interest is distinct and
[97]
different from others.
In the 2003 case of Francisco v. House of Representatives, this Court has stated
that: [A]merican jurisprudence and authorities, much less the American Constitution,
are of dubious application for these are no longer controlling within our jurisdiction and
have only limited persuasive merit insofar as Philippine constitutional law is
concerned....[I]n resolving constitutional disputes, [this Court] should not be beguiled by
foreign jurisprudence some of which are hardly applicable because they have been
[98]
dictated by different constitutional settings and needs. Indeed, although the
Philippine Constitution can trace its origins to that of the United States, their paths of
[99]
development have long since diverged.
Further, the quest for a better and more equal world calls for the use of equal
protection as a tool of effective judicial intervention.
Equality is one ideal which cries out for bold attention and action in the Constitution.
The Preamble proclaims equality as an ideal precisely in protest against crushing
inequities in Philippine society. The command to promote social justice in Article II,
Section 10, in all phases of national development, further explicitated in Article XIII, are
clear commands to the State to take affirmative action in the direction of greater
equality. [T]here is thus in the Philippine Constitution no lack of doctrinal support for a
[100]
more vigorous state effort towards achieving a reasonable measure of equality.
Our present Constitution has gone further in guaranteeing vital social and
[101]
economic rights to marginalized groups of society, including labor.
Under the policy
of social justice, the law bends over backward to accommodate the interests of the
working class on the humane justification that those with less privilege in life should
[102]
have more in law.
And the obligation to afford protection to labor is incumbent not

only on the legislative and executive branches but also on the judiciary to translate this
[103]
pledge into a living reality.
Social justice calls for the humanization of laws and the
equalization of social and economic forces by the State so that justice in its rational and
[104]
objectively secular conception may at least be approximated.
V. A Final Word
Finally, concerns have been raised as to the propriety of a ruling voiding the
challenged provision. It has been proffered that the remedy of petitioner is not with this
Court, but with Congress, which alone has the power to erase any inequity perpetrated
by R.A. No. 7653. Indeed, a bill proposing the exemption of the BSP rank-and-file from
the SSL has supposedly been filed.
Under most circumstances, the Court will exercise judicial restraint in deciding
questions of constitutionality, recognizing the broad discretion given to Congress in
exercising its legislative power. Judicial scrutiny would be based on the rational basis
[105]
test, and the legislative discretion would be given deferential treatment.
But if the challenge to the statute is premised on the denial of a fundamental
right, or the perpetuation of prejudice against persons favored by the Constitution
with special protection, judicial scrutiny ought to be more strict. A weak and watered
down view would call for the abdication of this Courts solemn duty to strike down any
law repugnant to the Constitution and the rights it enshrines. This is true whether the
actor committing the unconstitutional act is a private person or the government itself or
one of its instrumentalities. Oppressive acts will be struck down regardless of the
[106]
character or nature of the actor.
Accordingly, when the grant of power is qualified, conditional or subject to limitations,
the issue on whether or not the prescribed qualifications or conditions have been met,
or the limitations respected, is justiciable or non-political, the crux of the problem being
one of legality or validity of the contested act, not its wisdom. Otherwise, said
qualifications, conditions or limitations - particularly those prescribed or imposed by the
Constitution - would be set at naught. What is more, the judicial inquiry into such issue
and the settlement thereof are the main functions of courts of justice under the
Presidential form of government adopted in our 1935 Constitution, and the system of
checks and balances, one of its basic predicates. As a consequence, We have neither the
authority nor the discretion to decline passing upon said issue, but are under the
ineluctable obligation - made particularly more exacting and peremptory by our oath,
as members of the highest Court of the land, to support and defend the Constitution to settle it. This explains why, in Miller v. Johnson, it was held that courts have a "duty,
rather than a power", to determine whether another branch of the government has
"kept within constitutional limits." Not satisfied with this postulate, the court went
farther and stressed that, if the Constitution provides how it may be amended - as it is in
our 1935 Constitution - "then, unless the manner is followed, the judiciary as the
interpreter of that constitution, will declare the amendment invalid." In fact, this very
Court - speaking through Justice Laurel, an outstanding authority on Philippine
Constitutional Law, as well as one of the highly respected and foremost leaders of the
Convention that drafted the 1935 Constitution - declared, as early as July 15, 1936, that

"(i)n times of social disquietude or political excitement, the great landmarks of the
Constitution are apt to be forgotten or marred, if not entirely obliterated. In cases of
conflict, the judicial department is the only constitutional organ which can be called
upon to determine the proper allocation of powers between the several departments"
[107]
of the government.
(citations omitted; emphasis supplied)
In the case at bar, the challenged proviso operates on the basis of the salary grade
or officer-employee status. It is akin to a distinction based on economic class and
status, with the higher grades as recipients of a benefit specifically withheld from the
lower grades. Officers of the BSP now receive higher compensation packages that are
competitive with the industry, while the poorer, low-salaried employees are limited to
the rates prescribed by the SSL. The implications are quite disturbing: BSP rank-and-file
employees are paid the strictly regimented rates of the SSL while employees higher in
rank - possessing higher and better education and opportunities for career
advancement - are given higher compensation packages to entice them to
stay. Considering that majority, if not all, the rank-and-file employees consist of
people whose status and rank in life are less and limited, especially in terms of job
marketability, it is they - and not the officers - who have the real economic and
financial need for the adjustment This is in accord with the policy of the Constitution
"to free the people from poverty, provide adequate social services, extend to them a
[108]
decent standard of living, and improve the quality of life for all.
Any act of Congress
that runs counter to this constitutional desideratum deserves strict scrutiny by this
Court before it can pass muster.
To be sure, the BSP rank-and-file employees merit greater concern from this
Court. They represent the more impotent rank-and-file government employees who,
unlike employees in the private sector, have no specific right to organize as a collective
bargaining unit and negotiate for better terms and conditions of employment, nor the
power to hold a strike to protest unfair labor practices. Not only are they impotent as a
labor unit, but their efficacy to lobby in Congress is almost nil as R.A. No. 7653
effectively isolated them from the other GFI rank-and-file in compensation. These BSP
rank-and-file employees represent the politically powerless and they should not be
compelled to seek a political solution to their unequal and iniquitous
treatment. Indeed, they have waited for many years for the legislature to act. They
cannot be asked to wait some more for discrimination cannot be given any waiting time.
Unless the equal protection clause of the Constitution is a mere platitude, it is the
Courts duty to save them from reasonless discrimination.
IN VIEW WHEREOF, we hold that the continued operation and implementation of
the last proviso of Section 15(c), Article II of Republic Act No. 7653 is unconstitutional.
Davide, Jr., C.J., Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, AustriaMartinez, Azcuna, Tinga, and Chico-Nazario, JJ., concur.
Panganiban, Carpio, Carpio-Morales, and Garcia, JJ., see dissenting.
Corona, and Callejo, Sr., JJ., on leave.

EN BANC

combinations in restraint of trade), and Section 12, Article XII (preferential use of
Filipino labor, domestic materials and locally produced goods).

[G.R. No. 132527. July 29, 2005]

COCONUT OIL REFINERS ASSOCIATION, INC. represented by its President, JESUS L.
ARRANZA, PHILIPPINE ASSOCIATION OF MEAT PROCESSORS, INC. (PAMPI),
represented by its Secretary, ROMEO G. HIDALGO, FEDERATION OF FREE
FARMERS (FFF), represented by its President, JEREMIAS U. MONTEMAYOR,
and BUKLURAN NG MANGGAGAWANG PILIPINO (BMP), represented by its
Chairperson, FELIMON C. LAGMAN, petitioners, vs. HON. RUBEN TORRES, in
his capacity as Executive Secretary; BASES CONVERSION AND DEVELOPMENT
AUTHORITY, CLARK DEVELOPMENT CORPORATION, SUBIC BAY
METROPOLITAN AUTHORITY, 88 MART DUTY FREE, FREEPORT TRADERS, PX
CLUB, AMERICAN HARDWARE, ROYAL DUTY FREE SHOPS, INC., DFS SPORTS,
ASIA PACIFIC, MCI DUTY FREE DISTRIBUTOR CORP. (formerly MCI RESOURCES,
CORP.), PARK & SHOP, DUTY FREE COMMODITIES, L. FURNISHING,
SHAMBURGH, SUBIC DFS, ARGAN TRADING CORP., ASIPINE CORP., BEST BUY,
INC., PX CLUB, CLARK TRADING, DEMAGUS TRADING CORP., D.F.S. SPORTS
UNLIMITED, INC., DUTY FREE FIRST SUPERSTORE, INC., FREEPORT, JC MALL
DUTY FREE INC. (formerly 88 Mart [Clark] Duty Free Corp.), LILLY HILL CORP.,
MARSHALL, PUREGOLD DUTY FREE, INC., ROYAL DFS and ZAXXON
PHILIPPINES, INC., respondents.
DECISION
AZCUNA, J.:
This is a Petition for Prohibition and Injunction seeking to enjoin and prohibit the
Executive Branch, through the public respondents Ruben Torres in his capacity as
Executive Secretary, the Bases Conversion Development Authority (BCDA), the Clark
Development Corporation (CDC) and the Subic Bay Metropolitan Authority (SBMA),
from allowing, and the private respondents from continuing with, the operation of tax
and duty-free shops located at the Subic Special Economic Zone (SSEZ) and the Clark
Special Economic Zone (CSEZ), and to declare the following issuances as
unconstitutional, illegal, and void:
[1]

1. Section 5 of Executive Order No. 80, dated April 3, 1993, regarding the
CSEZ.
2. Executive Order No. 97-A, dated June 19, 1993, pertaining to the SSEZ.
[2]

3. Section 4 of BCDA Board Resolution No. 93-05-034, dated May 18, 1993,
pertaining to the CSEZ.
Petitioners contend that the aforecited issuances are unconstitutional and void as
they constitute executive lawmaking, and that they are contrary to Republic Act No.
[3]
7227 and in violation of the Constitution, particularly Section 1, Article III (equal
protection clause), Section 19, Article XII (prohibition of unfair competition and

The facts are as follows:

On March 13, 1992, Republic Act No. 7227 was enacted, providing for, among
other things, the sound and balanced conversion of the Clark and Subic military
reservations and their extensions into alternative productive uses in the form of special
economic zones in order to promote the economic and social development of Central
Luzon in particular and the country in general. Among the salient provisions are as
follows:
SECTION 12. Subic Special Economic Zone.
...
The abovementioned zone shall be subject to the following policies:
(a) Within the framework and subject to the mandate and limitations of the Constitution
and the pertinent provisions of the Local Government Code, the Subic Special Economic
Zone shall be developed into a self-sustaining, industrial, commercial, financial and
investment center to generate employment opportunities in and around the zone and
to attract and promote productive foreign investments;
(b) The Subic Special Economic Zone shall be operated and managed as a separate
customs territory ensuring free flow or movement of goods and capital within, into and
exported out of the Subic Special Economic Zone, as well as provide incentives such as
tax and duty-free importations of raw materials, capital and equipment. However,
exportation or removal of goods from the territory of the Subic Special Economic Zone
to the other parts of the Philippine territory shall be subject to customs duties and taxes
[4]
under the Customs and Tariff Code and other relevant tax laws of the Philippines;
(c) The provision of existing laws, rules and regulations to the contrary notwithstanding,
no taxes, local and national, shall be imposed within the Subic Special Economic Zone. In
lieu of paying taxes, three percent (3%) of the gross income earned by all businesses and
enterprises within the Subic Special Ecoomic Zone shall be remitted to the National
Government, one percent (1%) each to the local government units affected by the
declaration of the zone in proportion to their population area, and other factors. In
addition, there is hereby established a development fund of one percent (1%) of the
gross income earned by all businesses and enterprises within the Subic Special Economic
Zone to be utilized for the development of municipalities outside the City of Olangapo
and the Municipality of Subic, and other municipalities contiguous to the base areas.
...

SECTION 15. Clark and Other Special Economic Zones. Subject to the concurrence by
resolution of the local government units directly affected, the President is hereby
authorized to create by executive proclamation a Special Economic Zone covering the
lands occupied by the Clark military reservations and its contiguous extensions as
embraced, covered and defined by the 1947 Military Bases Agreement between the
Philippines and the United States of America, as amended, located within the territorial
jurisdiction of Angeles City, Municipalities of Mabalacat and Porac, Province of
Pampanga and the Municipality of Capas, Province of Tarlac, in accordance with the
policies as herein provided insofar as applicable to the Clark military reservations.
The governing body of the Clark Special Economic Zone shall likewise be established by
executive proclamation with such powers and functions exercised by the Export
Processing Zone Authority pursuant to Presidential Decree No. 66 as amended.

limited incentives. The full incentives in the Clark SEZ Main Zone and the limited
incentives in the Clark SEZ Sub-Zone shall be determined by the BCDA.
Pursuant to the directive under Executive Order No. 80, the BCDA passed Board
Resolution No. 93-05-034 on May 18, 1993, allowing the tax and duty-free sale at retail
of consumer goods imported via Clark for consumption outside the CSEZ. The assailed
provisions of said resolution read, as follows:
Section 4. SPECIFIC INCENTIVES IN THE CSEZ MAIN ZONE. The CSEZ-registered
enterprises/businesses shall be entitled to all the incentives available under R.A. No.
7227, E.O. No. 226 and R.A. No. 7042 which shall include, but not limited to, the
following:
I. As in Subic Economic and Free Port Zone:

The policies to govern and regulate the Clark Special Economic Zone shall be determined
upon consultation with the inhabitants of the local government units directly affected
which shall be conducted within six (6) months upon approval of this Act.
Similarly, subject to the concurrence by resolution of the local government units directly
affected, the President shall create other Special Economic Zones, in the base areas of
Wallace Air Station in San Fernando, La Union (excluding areas designated for
communications, advance warning and radar requirements of the Philippine Air Force to
be determined by the Conversion Authority) and Camp John Hay in the City of Baguio.
Upon recommendation of the Conversion Authority, the President is likewise authorized
to create Special Economic Zones covering the Municipalities of Morong, Hermosa,
Dinalupihan, Castillejos and San Marcelino.
On April 3, 1993, President Fidel V. Ramos issued Executive Order No. 80, which
declared, among others, that Clark shall have all the applicable incentives granted to the
Subic Special Economic and Free Port Zone under Republic Act No. 7227. The pertinent
provision assailed therein is as follows:
SECTION 5. Investments Climate in the CSEZ. Pursuant to Section 5(m) and Section 15 of
RA 7227, the BCDA shall promulgate all necessary policies, rules and regulations
governing the CSEZ, including investment incentives, in consultation with the local
government units and pertinent government departments for implementation by the
CDC.
Among others, the CSEZ shall have all the applicable incentives in the Subic Special
Economic and Free Port Zone under RA 7227 and those applicable incentives granted in
the Export Processing Zones, the Omnibus Investments Code of 1987, the Foreign
Investments Act of 1991 and new investments laws which may hereinafter be enacted.
The CSEZ Main Zone covering the Clark Air Base proper shall have all the aforecited
investment incentives, while the CSEZ Sub-Zone covering the rest of the CSEZ shall have

A. Customs:
...
4. Tax and duty-free purchase and consumption of goods/articles (duty
free shopping) within the CSEZ Main Zone.
5. For individuals, duty-free consumer goods may be brought out of the
CSEZ Main Zone into the Philippine Customs territory but not to
exceed US$200.00 per month per CDC-registered person, similar to
the limits imposed in the Subic SEZ. This privilege shall be enjoyed
only once a month. Any excess shall be levied taxes and duties by
the Bureau of Customs.
On June 10, 1993, the President issued Executive Order No. 97, Clarifying the Tax
and Duty Free Incentive Within the Subic Special Economic Zone Pursuant to R.A. No.
7227. Said issuance in part states, thus:
SECTION 1. On Import Taxes and Duties Tax and duty-free importations shall apply only
to raw materials, capital goods and equipment brought in by business enterprises into
the SSEZ. Except for these items, importations of other goods into the SSEZ, whether by
business enterprises or resident individuals, are subject to taxes and duties under
relevant Philippine laws.
The exportation or removal of tax and duty-free goods from the territory of the SSEZ to
other parts of the Philippine territory shall be subject to duties and taxes under relevant
Philippine laws.

Nine days after, on June 19, 1993, Executive Order No. 97-A was issued, Further
Clarifying the Tax and Duty-Free Privilege Within the Subic Special Economic and Free
Port Zone. The relevant provisions read, as follows:
SECTION 1. The following guidelines shall govern the tax and duty-free privilege within
the Secured Area of the Subic Special Economic and Free Port Zone:
1.1 The Secured Area consisting of the presently fenced-in former Subic Naval Base shall
be the only completely tax and duty-free area in the SSEFPZ. Business enterprises and
individuals (Filipinos and foreigners) residing within the Secured Area are free to import
raw materials, capital goods, equipment, and consumer items tax and duty-free.
Consumption items, however, must be consumed within the Secured Area. Removal of
raw materials, capital goods, equipment and consumer items out of the Secured Area
for sale to non-SSEFPZ registered enterprises shall be subject to the usual taxes and
duties, except as may be provided herein.
1.2. Residents of the SSEFPZ living outside the Secured Area can enter the Secured Area
and consume any quantity of consumption items in hotels and restaurants within the
Secured Area. However, these residents can purchase and bring out of the Secured Area
to other parts of the Philippine territory consumer items worth not exceeding US$100
per month per person. Only residents age 15 and over are entitled to this privilege.

IV.

THE CONTINUED IMPLEMENTATION OF THE CHALLENGED ISSUANCES IF

NOT RESTRAINED WILL CONTINUE TO CAUSE PETITIONERS TO SUFFER
[5]
GRAVE AND IRREPARABLE INJURY.

In their Comments, respondents point out procedural issues, alleging lack of

petitioners legal standing, the unreasonable delay in the filing of the petition, laches,
and the propriety of the remedy of prohibition.
Anent the claim on lack of legal standing, respondents argue that petitioners, being
mere suppliers of the local retailers operating outside the special economic zones, do
not stand to suffer direct injury in the enforcement of the issuances being assailed
herein. Assuming this is true, this Court has nevertheless held that in cases of
paramount importance where serious constitutional questions are involved, the
standing requirements may be relaxed and a suit may be allowed to prosper even where
[6]
there is no direct injury to the party claiming the right of judicial review.
In the same vein, with respect to the other alleged procedural flaws, even
assuming the existence of such defects, this Court, in the exercise of its discretion,
brushes aside these technicalities and takes cognizance of the petition considering the
importance to the public of the present case and in keeping with the duty to determine
whether the other branches of the government have kept themselves within the limits
[7]
of the Constitution.
Now, on the constitutional arguments raised:

1.3. Filipinos not residing within the SSEFPZ can enter the Secured Area and consume
any quantity of consumption items in hotels and restaurants within the Secured Area.
However, they can purchase and bring out [of] the Secured Area to other parts of the
Philippine territory consumer items worth not exceeding US$200 per year per person.
Only Filipinos age 15 and over are entitled to this privilege.
Petitioners assail the $100 monthly and $200 yearly tax-free shopping privileges
granted by the aforecited provisions respectively to SSEZ residents living outside the
Secured Area of the SSEZ and to Filipinos aged 15 and over residing outside the SSEZ.
On February 23, 1998, petitioners thus filed the instant petition, seeking the
declaration of nullity of the assailed issuances on the following grounds:
I.

EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80,

AND SECTION 4 OF BCDA BOARD RESOLUTION NO. 93-05-034 ARE NULL
AND VOID [FOR] BEING AN EXERCISE OF EXECUTIVE LAWMAKING.

II.

EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80,

AND SECTION 4 OF BCDA BOARD RESOLUTION NO. 93-05-034 ARE
UNCONSTITUTIONAL FOR BEING VIOLATIVE OF THE EQUAL PROTECTION
CLAUSE AND THE PROHIBITION AGAINST UNFAIR COMPETITION AND
PRACTICES IN RESTRAINT OF TRADE.

III.

EXECUTIVE ORDER NO. 97-A, SECTION 5 OF EXECUTIVE ORDER NO. 80,

AND SECTION 4 OF BCDA BOARD RESOLUTION NO. 93-05-034 ARE NULL
AND VOID [FOR] BEING VIOLATIVE OF REPUBLIC ACT NO. 7227.

As this Court enters upon the task of passing on the validity of an act of a co-equal
and coordinate branch of the Government, it bears emphasis that deeply ingrained in
our jurisprudence is the time-honored principle that a statute is presumed to be
[8]
valid. This presumption is rooted in the doctrine of separation of powers which enjoins
upon the three coordinate departments of the Government a becoming courtesy for
[9]
each others acts. Hence, to doubt is to sustain. The theory is that before the act was
done or the law was enacted, earnest studies were made by Congress, or the President,
[10]
or both, to insure that the Constitution would not be breached. This Court, however,
may declare a law, or portions thereof, unconstitutional where a petitioner has shown a
clear and unequivocal breach of the Constitution, not merely a doubtful or
[11]
argumentative one. In other words, before a statute or a portion thereof may be
declared unconstitutional, it must be shown that the statute or issuance violates the
Constitution clearly, palpably and plainly, and in such a manner as to leave no doubt or
[12]
hesitation in the mind of the Court.
The Issue on Executive Legislation
Petitioners claim that the assailed issuances (Executive Order No. 97-A; Section 5
of Executive Order No. 80; and Section 4 of BCDA Board Resolution No. 93-05-034)
constitute executive legislation, in violation of the rule on separation of powers.
Petitioners argue that the Executive Department, by allowing through the questioned
issuances the setting up of tax and duty-free shops and the removal of consumer goods
and items from the zones without payment of corresponding duties and taxes,
arbitrarily provided additional exemptions to the limitations imposed by Republic Act
No. 7227, which limitations petitioners identify as follows:

(1) [Republic Act No. 7227] allowed only tax and duty-free importation of raw
materials, capital and equipment.
(2) It provides that any exportation or removal of goods from the territory of
the Subic Special Economic Zone to other parts of the Philippine
territory shall be subject to customs duties and taxes under the
Customs and Tariff Code and other relevant tax laws of the Philippines.
Anent the first alleged limitation, petitioners contend that the wording of Republic
Act No. 7227 clearly limits the grant of tax incentives to the importation of raw
materials, capital and equipment only. Hence, they claim that the assailed issuances
constitute executive legislation for invalidly granting tax incentives in the importation of
consumer goods such as those being sold in the duty-free shops, in violation of the
letter and intent of Republic Act No. 7227.
A careful reading of Section 12 of Republic Act No. 7227, which pertains to the
SSEZ, would show that it does not restrict the duty-free importation only to raw
materials, capital and equipment. Section 12 of the cited law is partly reproduced, as
follows:
SECTION 12. Subic Special Economic Zone.

located inside the special economic zone only to raw materials, capital and equipment
clearly runs counter to the intention of the Legislature to create a free port where the
free flow of goods or capital within, into, and out of the zones is insured.
The phrase tax and duty-free importations of raw materials, capital and equipment
was merely cited as an example of incentives that may be given to entities operating
within the zone. Public respondent SBMA correctly argued that the maxim expressio
unius est exclusio alterius, on which petitioners impliedly rely to support their restrictive
[15]
interpretation, does not apply when words are mentioned by way of example. It is
obvious from the wording of Republic Act No. 7227, particularly the use of the phrase
such as, that the enumeration only meant to illustrate incentives that the SSEZ is
authorized to grant, in line with its being a free port zone.
Furthermore, said legal maxim should be applied only as a means of discovering
legislative intent which is not otherwise manifest, and should not be permitted to defeat
[16]
the plainly indicated purpose of the Legislature.
The records of the Senate containing the discussion of the concept of special
economic zone in Section 12 (a) of Republic Act No. 7227 show the legislative intent that
consumer goods entering the SSEZ which satisfy the needs of the zone and are
consumed there are not subject to duties and taxes in accordance with Philippine laws,
thus:

...
The abovementioned zone shall be subject to the following policies:
...
(b) The Subic Special Economic Zone shall be operated and managed as a
separate customs territory ensuring free flow or movement of goods
and capital within, into and exported out of the Subic Special Economic
Zone, as well as provide incentives such as tax and duty-free
importations of raw materials, capital and equipment. However,
exportation or removal of goods from the territory of the Subic Special
Economic Zone to the other parts of the Philippine territory shall be
subject to customs duties and taxes under the Customs and Tariff Code
[13]
and other relevant tax laws of the Philippines.
While it is true that Section 12 (b) of Republic Act No. 7227 mentions only raw
materials, capital and equipment, this does not necessarily mean that the tax and dutyfree buying privilege is limited to these types of articles to the exclusion of consumer
goods. It must be remembered that in construing statutes, the proper course is to start
out and follow the true intent of the Legislature and to adopt that sense which
harmonizes best with the context and promotes in the fullest manner the policy and
[14]
objects of the Legislature.
In the present case, there appears to be no logic in following the narrow
interpretation petitioners urge. To limit the tax-free importation privilege of enterprises

Senator Guingona. . . . The concept of Special Economic Zone is one that really includes
the concept of a free port, but it is broader. While a free port is necessarily included in
the Special Economic Zone, the reverse is not true that a free port would include a
special economic zone.
Special Economic Zone, Mr. President, would include not only the incoming and
outgoing of vessels, duty-free and tax-free, but it would involve also tourism, servicing,
financing and all the appurtenances of an investment center. So, that is the concept, Mr.
President. It is broader. It includes the free port concept and would cater to the greater
needs of Olangapo City, Subic Bay and the surrounding municipalities.
Senator Enrile. May I know then if a factory located within the jurisdiction of Morong,
Bataan that was originally a part of the Subic Naval reservation, be entitled to a free
port treatment or just a special economic zone treatment?
Senator Guingona. As far as the goods required for manufacture is concerned, Mr.
President, it would have privileges of duty-free and tax-free. But in addition, the Special
Economic Zone could embrace the needs of tourism, could embrace the needs of
servicing, could embrace the needs of financing and other investment aspects.
Senator Enrile. When a hotel is constructed, Mr. President, in this geographical unit
which we call a special economic zone, will the goods entering to be consumed by the
customers or guests of the hotel be subject to duties?

Senator Guingona. That is the concept that we are crafting, Mr. President.
Senator Enrile. No. I am asking whether those goods will be duty-free, because it is
constructed within a free port.
Senator Guingona. For as long as it services the needs of the Special Economic Zone, yes.
Senator Enrile. For as long as the goods remain within the zone, whether we call it an
economic zone or a free port, for as long as we say in this law that all goods entering this
particular territory will be duty-free and tax-free, for as long as they remain there,
consumed there or reexported or destroyed in that place, then they are not subject to
the duties and taxes in accordance with the laws of the Philippines?
Senator Guingona. Yes.

[17]

WHEREAS, Republic Act No. 7227 provides that within the framework and subject to the
mandate and limitations of the Constitution and the pertinent provisions of the Local
Government Code, the Subic Special Economic and Free Port Zone (SSEFPZ) shall be
developed into a self-sustaining industrial, commercial, financial and investment center
to generate employment opportunities in and around the zone and to attract and
promote productive foreign investments; and
WHEREAS, a special tax and duty-free privilege within a Secured Area in the SSEFPZ
subject, to existing laws has been determined necessary to attract local and foreign
visitors to the zone.
Executive Order No. 97-A provides guidelines to govern the tax and duty-free
privileges within the Secured Area of the Subic Special Economic and Free Port Zone.
Paragraph 1.6 thereof states that (t)he sale of tax and duty-free consumer items in the
Secured Area shall only be allowed in duly authorized duty-free shops.

Petitioners rely on Committee Report No. 1206 submitted by the Ad Hoc Oversight
Committee on Bases Conversion on June 26, 1995. Petitioners put emphasis on the
reports finding that the setting up of duty-free stores never figured in the minds of the
authors of Republic Act No. 7227 in attracting foreign investors to the former military
baselands. They maintain that said law aimed to attract manufacturing and service
enterprises that will employ the dislocated former military base workers, but not
investors who would buy consumer goods from duty-free stores.

The Court finds that the setting up of such commercial establishments which are
the only ones duly authorized to sell consumer items tax and duty-free is still well within
the policy enunciated in Section 12 of Republic Act No. 7227 that . . .the Subic Special
Economic Zone shall be developed into a self-sustaining, industrial,
commercial, financial and investment center to generate employment opportunities in
and around the zone and to attract and promote productive foreign investments.
(Emphasis supplied.)

The Court is not persuaded. Indeed, it is well-established that opinions expressed

in the debates and proceedings of the Legislature, steps taken in the enactment of a
law, or the history of the passage of the law through the Legislature, may be resorted to
[18]
as aids in the interpretation of a statute with a doubtful meaning. Petitioners posture,
however, overlooks the fact that the 1995 Committee Report they are referring to came
into being well after the enactment of Republic Act No. 7227 in 1993. Hence, as pointed
out by respondent Executive Secretary Torres, the aforementioned report cannot be
said to form part of Republic Act No. 7227s legislative history.

However, the Court reiterates that the second sentences of paragraphs 1.2 and
1.3 of Executive Order No. 97-A, allowing tax and duty-free removal of goods to certain
individuals, even in a limited amount, from the Secured Area of the SSEZ, are null and
void for being contrary to Section 12 of Republic Act No. 7227. Said Section clearly
provides that exportation or removal of goods from the territory of the Subic Special
Economic Zone to the other parts of the Philippine territory shall be subject to customs
duties and taxes under the Customs and Tariff Code and other relevant tax laws of the
Philippines.

Section 12 of Republic Act No. 7227, provides in part, thus:

SEC. 12. Subic Special Economic Zone. -- . . .
The abovementioned zone shall be subject to the following policies:
(a) Within the framework and subject to the mandate and limitations of the Constitution
and the pertinent provisions of the Local Government Code, the Subic Special Economic
Zone shall be developed into a self-sustaining, industrial, commercial, financial and
investment center to generate employment opportunities in and around the zone and
[19]
to attract and promote productive foreign investments.
The aforecited policy was mentioned as a basis for the issuance of Executive Order
No. 97-A, thus:

On the other hand, insofar as the CSEZ is concerned, the case for an invalid
exercise of executive legislation is tenable.
[20]

In John Hay Peoples Alternative Coalition, et al. v. Victor Lim, et al., this Court
resolved an issue, very much like the one herein, concerning the legality of the tax
exemption benefits given to the John Hay Economic Zone under Presidential
Proclamation No. 420, Series of 1994, CREATING AND DESIGNATING A PORTION OF THE
AREA COVERED BY THE FORMER CAMP JOHN AS THE JOHN HAY SPECIAL ECONOMIC
ZONE PURSUANT TO REPUBLIC ACT NO. 7227.
In that case, among the arguments raised was that the granting of tax exemptions
to John Hay was an invalid and illegal exercise by the President of the powers granted
only to the Legislature. Petitioners therein argued that Republic Act No. 7227 expressly
granted tax exemption only to Subic and not to the other economic zones yet to be
established. Thus, the grant of tax exemption to John Hay by Presidential Proclamation

contravenes the constitutional mandate that [n]o law granting any tax exemption shall
[21]
be passed without the concurrence of a majority of all the members of Congress.
This Court sustained the argument and ruled that the incentives under Republic
Act No. 7227 are exclusive only to the SSEZ. The President, therefore, had no authority
to extend their application to John Hay. To quote from the Decision:
More importantly, the nature of most of the assailed privileges is one of tax exemption.
It is the legislature, unless limited by a provision of a state constitution, that has full
power to exempt any person or corporation or class of property from taxation, its power
to exempt being as broad as its power to tax. Other than Congress, the Constitution may
itself provide for specific tax exemptions, or local governments may pass ordinances on
exemption only from local taxes.
The challenged grant of tax exemption would circumvent the Constitutions imposition
that a law granting any tax exemption must have the concurrence of a majority of all the
members of Congress. In the same vein, the other kinds of privileges extended to the
John Hay SEZ are by tradition and usage for Congress to legislate upon.
Contrary to public respondents suggestions, the claimed statutory exemption of the
John Hay SEZ from taxation should be manifest and unmistakable from the language of
the law on which it is based; it must be expressly granted in a statute stated in a
language too clear to be mistaken. Tax exemption cannot be implied as it must be
categorically and unmistakably expressed.
If it were the intent of the legislature to grant to John Hay SEZ the same tax exemption
and incentives given to the Subic SEZ, it would have so expressly provided in R.A. No.
[22]
7227.
In the present case, while Section 12 of Republic Act No. 7227 expressly provides
for the grant of incentives to the SSEZ, it fails to make any similar grant in favor of other
economic zones, including the CSEZ. Tax and duty-free incentives being in the nature of
tax exemptions, the basis thereof should be categorically and unmistakably expressed
from the language of the statute. Consequently, in the absence of any express grant of
tax and duty-free privileges to the CSEZ in Republic Act No. 7227, there would be no
legal basis to uphold the questioned portions of two issuances: Section 5 of Executive
Order No. 80 and Section 4 of BCDA Board Resolution No. 93-05-034, which both pertain
to the CSEZ.
Petitioners also contend that the questioned issuances constitute executive
legislation for allowing the removal of consumer goods and items from the zones
without payment of corresponding duties and taxes in violation of Republic Act No.
7227 as Section 12 thereof provides for the taxation of goods that are exported or
removed from the SSEZ to other parts of the Philippine territory.
On September 26, 1997, Executive Order No. 444 was issued, curtailing the dutyfree shopping privileges in the SSEZ and the CSEZ to prevent abuse of duty-free privilege

and to protect local industries from unfair competition. The pertinent provisions of said
issuance state, as follows:
SECTION 3. Special Shopping Privileges Granted During the Year-round Centennial
Anniversary Celebration in 1998. Upon effectivity of this Order and up to the Centennial
Year 1998, in addition to the permanent residents, locators and employees of the
fenced-in areas of the Subic Special Economic and Freeport Zone and the Clark Special
Economic Zone who are allowed unlimited duty free purchases, provided these are
consumed within said fenced-in areas of the Zones, the residents of the municipalities
adjacent to Subic and Clark as respectively provided in R.A. 7227 (1992) and E.O. 97-A s.
1993 shall continue to be allowed One Hundred US Dollars (US$100) monthly shopping
privilege until 31 December 1998. Domestic tourists visiting Subic and Clark shall be
allowed a shopping privilege of US$25 for consumable goods which shall be consumed
only in the fenced-in area during their visit therein.
SECTION 4. Grant of Duty Free Shopping Privileges Limited Only To Individuals Allowed
by Law. Starting 1 January 1999, only the following persons shall continue to be eligible
to shop in duty free shops/outlets with their corresponding purchase limits:
a. Tourists and Filipinos traveling to or returning from foreign destinations under E.O. 97-A s.
1993 One Thousand US Dollars (US$1,000) but not to exceed Ten Thousand US Dollars
(US$10,000) in any given year;
b. Overseas Filipino Workers (OFWs) and Balikbayans defined under R.A. 6768 dated 3
November 1989 Two Thousand US Dollars (US$2,000);
c. Residents, eighteen (18) years old and above, of the fenced-in areas of the freeports under
R.A. 7227 (1992) and E.O. 97-A s. 1993 Unlimited purchase as long as these are for
consumption within these freeports.
The term "Residents" mentioned in item c above shall refer to individuals who, by virtue
of domicile or employment, reside on permanent basis within the freeport area. The
term excludes (1) non-residents who have entered into short- or long-term property
lease inside the freeport, (2) outsiders engaged in doing business within the freeport,
and (3) members of private clubs (e.g., yacht and golf clubs) based or located within the
freeport. In this regard, duty free privileges granted to any of the above individuals (e.g.,
[23]
unlimited shopping privilege, tax-free importation of cars, etc.) are hereby revoked.
A perusal of the above provisions indicates that effective January 1, 1999, the
grant of duty-free shopping privileges to domestic tourists and to residents living
adjacent to SSEZ and the CSEZ had been revoked. Residents of the fenced-in area of the
free port are still allowed unlimited purchase of consumer goods, as long as these are
for consumption within these freeports. Hence, the only individuals allowed by law to
shop in the duty-free outlets and remove consumer goods out of the free ports tax-free
are tourists and Filipinos traveling to or returning from foreign destinations, and
[24]
Overseas Filipino Workers and Balikbayans as defined under Republic Act No. 6768.

Subsequently, on October 20, 2000, Executive Order No. 303 was issued, amending
Executive Order No. 444. Pursuant to the limited duration of the privileges granted
under the preceding issuance, Section 2 of Executive Order No. 303 declared that [a]ll
special shopping privileges as granted under Section 3 of Executive Order 444, s. 1997,
are hereby deemed terminated. The grant of duty free shopping privileges shall be
restricted to qualified individuals as provided by law.
It bears noting at this point that the shopping privileges currently being enjoyed by
Overseas Filipino Workers, Balikbayans, and tourists traveling to and from foreign
destinations, draw authority not from the issuances being assailed herein, but from
[25]
Executive Order No. 46 and Republic Act No. 6768, both enacted prior to the
promulgation of Republic Act No. 7227.
From the foregoing, it appears that petitioners objection to the allowance of taxfree removal of goods from the special economic zones as previously authorized by the
questioned issuances has become moot and academic.
In any event, Republic Act No. 7227, specifically Section 12 (b) thereof, clearly
provides that exportation or removal of goods from the territory of the Subic Special
Economic Zone to the other parts of the Philippine territory shall be subject to customs
duties and taxes under the Customs and Tariff Code and other relevant tax laws of the
Philippines.
Thus, the removal of goods from the SSEZ to other parts of the Philippine territory
without payment of said customs duties and taxes is not authorized by the Act.
Consequently, the following italicized provisions found in the second sentences of
paragraphs 1.2 and 1.3, Section 1 of Executive Order No. 97-A are null and void:
1.2 Residents of the SSEFPZ living outside the Secured Area can enter and consume
any quantity of consumption items in hotels and restaurants within the
Secured Area. However, these residents can purchase and bring out of the
Secured Area to other parts of the Philippine territory consumer items worth
not exceeding US $100 per month per person. Only residents age 15 and over
are entitled to this privilege.
1.3 Filipinos not residing within the SSEFPZ can enter the Secured Area and
consume any quantity of consumption items in hotels and restaurants within
the Secured Area. However, they can purchase and bring out of the Secured
Area to other parts of the Philippine territory consumer items worth not
exceeding US $200 per year per person. Only Filipinos age 15 and over are
[26]
entitled to this privilege.
A similar provision found in paragraph 5, Section 4(A) of BCDA Board Resolution
No. 93-05-034 is also null and void. Said Resolution applied the incentives given to the
SSEZ under Republic Act No. 7227 to the CSEZ, which, as aforestated, is without legal
basis.

Having concluded earlier that the CSEZ is excluded from the tax and duty-free
incentives provided under Republic Act No. 7227, this Court will resolve the remaining
arguments only with regard to the operations of the SSEZ. Thus, the assailed issuance
that will be discussed is solely Executive Order No. 97-A, since it is the only one among
the three questioned issuances which pertains to the SSEZ.
Equal Protection of the Laws
Petitioners argue that the assailed issuance (Executive Order No. 97-A) is violative
of their right to equal protection of the laws, as enshrined in Section 1, Article III of the
Constitution. To support this argument, they assert that private respondents operating
inside the SSEZ are not different from the retail establishments located outside, the
products sold being essentially the same. The only distinction, they claim, lies in the
products variety and source, and the fact that private respondents import their items
tax-free, to the prejudice of the retailers and manufacturers located outside the zone.
Petitioners contention cannot be sustained. It is an established principle of
constitutional law that the guaranty of the equal protection of the laws is not violated
[27]
by a legislation based on a reasonable classification. Classification, to be valid, must
(1) rest on substantial distinction, (2) be germane to the purpose of the law, (3) not be
limited to existing conditions only, and (4) apply equally to all members of the same
[28]
class.
Applying the foregoing test to the present case, this Court finds no violation of the
right to equal protection of the laws. First, contrary to petitioners claim, substantial
distinctions lie between the establishments inside and outside the zone, justifying the
[29]
difference in their treatment. In Tiu v. Court of Appeals, the constitutionality of
Executive Order No. 97-A was challenged for being violative of the equal protection
clause. In that case, petitioners claimed that Executive Order No. 97-A was
discriminatory in confining the application of Republic Act No. 7227 within a secured
area of the SSEZ, to the exclusion of those outside but are, nevertheless, still within the
economic zone.
Upholding the constitutionality of Executive Order No. 97-A, this Court therein
found substantial differences between the retailers inside and outside the secured area,
thereby justifying a valid and reasonable classification:
Certainly, there are substantial differences between the big investors who are being
lured to establish and operate their industries in the so-called secured area and the
present business operators outside the area. On the one hand, we are talking of billionpeso investments and thousands of new jobs. On the other hand, definitely none of such
magnitude. In the first, the economic impact will be national; in the second, only local.
Even more important, at this time the business activities outside the secured area are
not likely to have any impact in achieving the purpose of the law, which is to turn the
former military base to productive use for the benefit of the Philippine economy. There
is, then, hardly any reasonable basis to extend to them the benefits and incentives
accorded in R.A. 7227. Additionally, as the Court of Appeals pointed out, it will be easier
to manage and monitor the activities within the secured area, which is already fenced
off, to prevent fraudulent importation of merchandise or smuggling.

It is well-settled that the equal-protection guarantee does not require territorial

uniformity of laws. As long as there are actual and material differences between
territories, there is no violation of the constitutional clause. And of course, anyone,
including the petitioners, possessing the requisite investment capital can always avail of
the same benefits by channeling his or her resources or business operations into the
[30]
fenced-off free port zone.
The Court in Tiu found real and substantial distinctions between residents within
the secured area and those living within the economic zone but outside the fenced-off
area. Similarly, real and substantial differences exist between the establishments herein
involved. A significant distinction between the two groups is that enterprises outside the
zones maintain their businesses within Philippine customs territory, while private
respondents and the other duly-registered zone enterprises operate within the so-called
separate customs territory. To grant the same tax incentives given to enterprises within
the zones to businesses operating outside the zones, as petitioners insist, would clearly
defeat the statutes intent to carve a territory out of the military reservations in Subic
Bay where free flow of goods and capital is maintained.
The classification is germane to the purpose of Republic Act No. 7227. As held
in Tiu, the real concern of Republic Act No. 7227 is to convert the lands formerly
occupied by the US military bases into economic or industrial areas. In furtherance of
such objective, Congress deemed it necessary to extend economic incentives to the
establishments within the zone to attract and encourage foreign and local investors.
This is the very rationale behind Republic Act No. 7227 and other similar special
economic zone laws which grant a complete package of tax incentives and other
benefits.
The classification, moreover, is not limited to the existing conditions when the law
was promulgated, but to future conditions as well, inasmuch as the law envisioned the
former military reservation to ultimately develop into a self-sustaining investment
center.
And, lastly, the classification applies equally to all retailers found within the
secured area. As ruled in Tiu, the individuals and businesses within the secured area,
being in like circumstances or contributing directly to the achievement of the end
purpose of the law, are not categorized further. They are all similarly treated, both in
privileges granted and in obligations required.
With all the four requisites for a reasonable classification present, there is no
ground to invalidate Executive Order No. 97-A for being violative of the equal protection
clause.
Prohibition against Unfair Competition and Practices in Restraint of Trade
Petitioners next argue that the grant of special tax exemptions and privileges gave
the private respondents undue advantage over local enterprises which do not operate
inside the SSEZ, thereby creating unfair competition in violation of the constitutional
prohibition against unfair competition and practices in restraint of trade.

The argument is without merit. Just how the assailed issuance is violative of the
prohibition against unfair competition and practices in restraint of trade is not clearly
explained in the petition. Republic Act No. 7227, and consequently Executive Order No.
97-A, cannot be said to be distinctively arbitrary against the welfare of businesses
outside the zones. The mere fact that incentives and privileges are granted to certain
enterprises to the exclusion of others does not render the issuance unconstitutional for
espousing unfair competition. Said constitutional prohibition cannot hinder the
Legislature from using tax incentives as a tool to pursue its policies.
Suffice it to say that Congress had justifiable reasons in granting incentives to the
private respondents, in accordance with Republic Act No. 7227s policy of developing the
SSEZ into a self-sustaining entity that will generate employment and attract foreign and
local investment. If petitioners had wanted to avoid any alleged unfavorable
consequences on their profits, they should upgrade their standards of quality so as to
effectively compete in the market. In the alternative, if petitioners really wanted the
preferential treatment accorded to the private respondents, they could have opted to
register with SSEZ in order to operate within the special economic zone.
Preferential Use of Filipino Labor, Domestic Materials and Locally Produced Goods
Lastly, petitioners claim that the questioned issuance (Executive Order No. 97-A)
openly violated the State policy of promoting the preferential use of Filipino labor,
domestic materials and locally produced goods and adopting measures to help make
them competitive.
Again, the argument lacks merit. This Court notes that petitioners failed to
substantiate their sweeping conclusion that the issuance has violated the State policy of
giving preference to Filipino goods and labor. The mere fact that said issuance
authorizes the importation and trade of foreign goods does not suffice to declare it
unconstitutional on this ground.
[31]

Petitioners cite Manila Prince Hotel v. GSIS which, however, does not apply. That
case dealt with the policy enunciated under the second paragraph of Section 10, Article
[32]
XII of the Constitution, applicable to the grant of rights, privileges, and concessions
covering the national economy and patrimony, which is different from the policy
invoked in this petition, specifically that of giving preference to Filipino materials and
labor found under Section 12 of the same Article of the Constitution. (Emphasis
supplied).
[33]

In Taada v. Angara, this Court elaborated on the meaning of Section 12, Article
XII of the Constitution in this wise:
[W]hile the Constitution indeed mandates a bias in favor of Filipino goods, services,
labor and enterprises, at the same time, it recognizes the need for business exchange
with the rest of the world on the bases of equality and reciprocity and limits protection
of Filipino enterprises only against foreign competition and trade practices that are
unfair. In other words, the Constitution did not intend to pursue an isolationist policy. It
did not shut out foreign investments, goods and services in the development of the
Philippine economy. While the Constitution does not encourage the unlimited entry of

foreign goods, services and investments into the country, it does not prohibit them
either. In fact, it allows an exchange on the basis of equality and reciprocity, frowning
[34]
only on foreign competition that is unfair.
This Court notes that the Executive Department, with its subsequent issuance of
Executive Order Nos. 444 and 303, has provided certain measures to prevent unfair
competition. In particular, Executive Order Nos. 444 and 303 have restricted the special
[35]
shopping privileges to certain individuals. Executive Order No. 303 has limited the
[36]
range of items that may be sold in the duty-free outlets, and imposed sanctions to
[37]
curb abuses of duty-free privileges. With these measures, this Court finds no reason
to strike down Executive Order No. 97-A for allegedly being prejudicial to Filipino labor,
domestic materials and locally produced goods.
WHEREFORE, the petition is PARTLY GRANTED. Section 5 of Executive Order No. 80
and Section 4 of BCDA Board Resolution No. 93-05-034 are hereby declared NULL and
VOID and are accordingly declared of no legal force and effect. Respondents are hereby
enjoined from implementing the aforesaid void provisions. All portions of Executive
Order No. 97-A are valid and effective, except the second sentences in paragraphs 1.2
and 1.3 of said Executive Order, which are hereby declared INVALID.
No costs.
SO ORDERED.
Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, SandovalGutierrez,
Austria-Martinez,
Carpio-Morales,
Callejo,
Sr.,
Tinga,
ChicoNazario, and Garcia, JJ., concur.
Carpio, J., no part.
Corona, J., on official leave.

EN BANC

RODOLFO S. BELTRAN, doing G.R. No. 133640

business under the name and style,
OUR LADY OF FATIMA BLOOD BANK,
FELY G. MOSALE, doing business under
the name and style, MOTHER SEATON
BLOOD BANK; PEOPLES BLOOD BANK,
INC.; MARIA VICTORIA T. VITO, M.D.,
doing business under the name and
style, AVENUE BLOOD BANK; JESUS M.
GARCIA, M.D., doing business under
the name and style, HOLY REDEEMER
BLOOD BANK, ALBERT L. LAPITAN,
doing business under the name and
style,
BLUE
CROSS
BLOOD
TRANSFUSION SERVICES; EDGARDO R.
RODAS, M.D., doing business under the
name and style, RECORD BLOOD BANK,
in their individual capacities and for
and
in
behalf
of
PHILIPPINE
ASSOCIATION OF BLOOD BANKS,
Petitioners,

versus

BANK, FELY G. MOSALE, doing Present:

business under the name and style,
MOTHER SEATON BLOOD BANK; DAVIDE, JR., C.J.,
PEOPLES BLOOD BANK, INC.; PUNO,
MARIA VICTORIA T. VITO, M.D., PANGANIBAN,
doing business under the name and QUISUMBING,
style, AVENUE BLOOD BANK; YNARES-SANTIAGO,
JESUS M. GARCIA, M.D., doing SANDOVAL-GUTIERREZ,
business under the name and style, CARPIO,
HOLY REDEEMER BLOOD BANK, AUSTRIA-MARTINEZ,
ALBERT L. LAPITAN, doing CORONA,
business under the name and style, CARPIO-MORALES,
BLUE CROSS BLOOD CALLEJO, SR.,
TRANSFUSION SERVICES; AZCUNA,
EDGARDO R. RODAS, M.D., doing TINGA,
*
business under the name and style, CHIZO-NAZARIO, and
RECORD BLOOD BANK, in their GARCIA, JJ.
Individual capacities and for
and in behalf of PHILIPPINE Promulgated:
ASSOCIATION OF BLOOD BANKS,
Petitioners, November 25, 2005
versus
THE SECRETARY OF HEALTH,
Respondent.
x ---------------------------------------------------------------------------------------- x
DECISION
AZCUNA, J.:

THE SECRETARY OF HEALTH,

Respondent.
x ------------------------------------------------ x
DOCTORS BLOOD CENTER, G.R. No. 133661
Petitioner,
- versus

Before this Court are petitions assailing primarily the constitutionality of Section 7 of
Republic Act No. 7719, otherwise known as the National Blood Services Act of 1994, and
the validity of Administrative Order (A.O.) No. 9, series of 1995 or the Rules and
Regulations Implementing Republic Act No. 7719.
[1]

G.R. No. 133640, entitled Rodolfo S. Beltran, doing business under the name and
style, Our Lady of Fatima Blood Bank, et al., vs. The Secretary of Health and G.R. No.
[2]

DEPARTMENT OF HEALTH.
Respondent.
x --------------------------------------------- x

133661, entitled Doctors Blood Bank Center vs. Department of Health are petitions for
certiorari and mandamus, respectively, seeking the annulment of the following: (1)
Section 7 of Republic Act No. 7719; and, (2) Administrative Order (A.O.) No. 9, series of
1995. Both petitions likewise pray for the issuance of a writ of prohibitory injunction

RODOLFO S. BELTRAN, doing G.R. No. 139147

business under the name and style,
OUR LADY OF FATIMA BLOOD

enjoining the Secretary of Health from implementing and enforcing the aforementioned
law and its Implementing Rules and Regulations; and, for a mandatory injunction

ordering and commanding the Secretary of Health to grant, issue or renew petitioners

the effectivity of this Act, extendable to a maximum period of two (2)

years by the Secretary.

license to operate free standing blood banks (FSBB).

The above cases were consolidated in a resolution of the Court En Banc dated June 2,
1998.

Section 23 of Administrative Order No. 9 provides:

[3]
[4]

G.R. No. 139147, entitled Rodolfo S. Beltran, doing business under the name and
style, Our Lady of Fatima Blood Bank, et al., vs. The Secretary of Health, on the other
hand, is a petition to show cause why respondent Secretary of Health should not be
held in contempt of court.
This case was originally assigned to the Third Division of this Court and later
consolidated with G.R. Nos. 133640 and 133661 in a resolution dated August 4, 1999.

[5]

Petitioners comprise the majority of the Board of Directors of the Philippine

Association of Blood Banks, a duly registered non-stock and non-profit association
composed of free standing blood banks.
Public respondent Secretary of Health is being sued in his capacity as the public official
directly involved and charged with the enforcement and implementation of the law in
question.

Republic Act No. 7719 or the National Blood Services Act of 1994 was enacted into law
on April 2, 1994. The Act seeks to provide an adequate supply of safe blood by
promoting voluntary blood donation and by regulating blood banks in the country. It
was approved by then President Fidel V. Ramos on May 15, 1994 and was subsequently
published in the Official Gazette on August 18, 1994. The law took effect on August 23,
1994.
On April 28, 1995, Administrative Order No. 9, Series of 1995, constituting the
Implementing Rules and Regulations of said law was promulgated by respondent

Section 7 of R.A. 7719

[7]

Years prior to the passage of the National Blood Services Act of 1994, petitioners have
already been operating commercial blood banks under Republic Act No. 1517, entitled
An Act Regulating the Collection, Processing and Sale of Human Blood, and the
Establishment and Operation of Blood Banks and Blood Processing Laboratories. The
law, which was enacted on June 16, 1956, allowed the establishment and operation by
licensed physicians of blood banks and blood processing laboratories. The Bureau of

The facts of the case are as follows:

Secretary of the Department of Health (DOH).

Section 23. Process of Phasing Out. -- The Department shall effect the
phasing-out of all commercial blood banks over a period of two (2)
years, extendible for a maximum period of two (2) years after the
effectivity of R.A. 7719. The decision to extend shall be based on the
result of a careful study and review of the blood supply and demand
[8]
and public safety.
Blood banking and blood transfusion services in the country have been
arranged in four (4) categories: blood centers run by the Philippine National
Red Cross (PNRC), government-run blood services, private hospital blood
banks, and commercial blood services.

[6]

provides:

Section 7. Phase-out of Commercial Blood Banks - All commercial

blood banks shall be phased-out over a period of two (2) years after

Research and Laboratories (BRL) was created in 1958 and was given the power to
regulate clinical laboratories in 1966 under Republic Act No. 4688. In 1971, the
Licensure Section was created within the BRL. It was given the duty to enforce the
licensure requirements for blood banks as well as clinical laboratories. Due to this
development, Administrative Order No. 156, Series of 1971, was issued. The new rules
and regulations triggered a stricter enforcement of the Blood Banking Law, which was
characterized by frequent spot checks, immediate suspension and communication of
such suspensions to hospitals, a more systematic record-keeping and frequent
communication with blood banks through monthly information bulletins. Unfortunately,
by the 1980s, financial difficulties constrained the BRL to reduce the frequency of its
supervisory visits to the blood banks.

[9]

Meanwhile, in the international scene, concern for the safety of blood and blood
products intensified when the dreaded disease Acute Immune Deficiency Syndrome
(AIDS) was first described in 1979. In 1980, the International Society of Blood

Transfusion (ISBT) formulated the Code of Ethics for Blood Donation and Transfusion. In

numbers in mind, the study deduced that each commercial blood bank produces five

1982, the first case of transfusion-associated AIDS was described in an infant. Hence,

times more blood than the Red Cross and fifteen times more than the government-run

the ISBT drafted in 1984, a model for a national blood policy outlining certain principles

blood banks. The study, therefore, showed that the Philippines heavily relied on

that should be taken into consideration. By 1985, the ISBT had disseminated guidelines

commercial sources of blood. The study likewise revealed that 99.6% of the donors of

requiring AIDS testing of blood and blood products for transfusion.

[10]

commercial blood banks and 77.0% of the donors of private-hospital based blood banks

In 1989, another revision of the Blood Banking Guidelines was made. The DOH issued

are paid donors. Paid donors are those who receive remuneration for donating their

Administrative Order No. 57, Series of 1989, which classified banks into primary,

blood. Blood donors of the PNRC and government-run hospitals, on the other hand, are

secondary and tertiary depending on the services they provided. The standards were

mostly voluntary.

adjusted according to this classification. For instance, floor area requirements varied

It was further found, among other things, that blood sold by persons to blood

according to classification level. The new guidelines likewise required Hepatitis B and

commercial banks are three times more likely to have any of the four (4) tested

HIV testing, and that the blood bank be headed by a pathologist or a hematologist.

[11]

[14]

infections or blood transfusion transmissible diseases, namely, malaria, syphilis,

In 1992, the DOH issued Administrative Order No. 118-A institutionalizing the National

Hepatitis B and Acquired Immune Deficiency Syndrome (AIDS) than those donated to

Blood Services Program (NBSP). The BRL was designated as the central office primarily

PNRC.

responsible for the NBSP. The program paved the way for the creation of a committee

Commercial blood banks give paid donors varying rates around P50 to P150, and

that will implement the policies of the program and the formation of the Regional Blood

because of this arrangement, many of these donors are poor, and often they are

Councils.

students, who need cash immediately. Since they need the money, these donors are not

In August 1992, Senate Bill No. 1011, entitled An Act Promoting Voluntary Blood

usually honest about their medical or social history. Thus, blood from healthy, voluntary

Donation, Providing for an Adequate Supply of Safe Blood, Regulating Blood Banks and

donors who give their true medical and social history are about three times much safer

Providing Penalties for Violations Thereof, and for other Purposes was introduced in the

than blood from paid donors.

Senate.

[12]

[15]

[16]

What the study also found alarming is that many Filipino doctors are not yet fully

Meanwhile, in the House of Representatives, House Bills No. 384, 546, 780 and 1978

trained on the specific indications for blood component transfusion. They are not aware

were being deliberated to address the issue of safety of the Philippine blood bank

of the lack of blood supply and do not feel the need to adjust their practices and use of

system. Subsequently, the Senate and House Bills were referred to the appropriate

blood and blood products. It also does not matter to them where the blood comes

committees and subsequently consolidated.

[13]

from.

[17]

In January of 1994, the New Tropical Medicine Foundation, with the assistance of the

On August 23, 1994, the National Blood Services Act providing for the phase out of

U.S. Agency for International Development (USAID) released its final report of a study on

commercial blood banks took effect. On April 28, 1995, Administrative Order No. 9,

the Philippine blood banking system entitled Project to Evaluate the Safety of the

Series of 1995, constituting the Implementing Rules and Regulations of said law was

Philippine Blood Banking System. It was revealed that of the blood units collected in

promulgated by DOH.

1992, 64.4 % were supplied by commercial blood banks, 14.5% by the PNRC, 13.7% by

The phase-out period was extended for two years by the DOH pursuant to Section 7 of

government hospital-based blood banks, and 7.4% by private hospital-based blood

Republic Act No. 7719 and Section 23 of its Implementing Rules and Regulations.

banks. During the time the study was made, there were only twenty-four (24) registered

Pursuant to said Act, all commercial blood banks should have been phased out by May

or licensed free-standing or commercial blood banks in the country. Hence, with these

28, 1998. Hence, petitioners were granted by the Secretary of Health their licenses to
open and operate a blood bank only until May 27, 1998.

1.

Was it passed in the exercise of police power,

and was it a valid exercise of such power?

2.

Does it not amount to deprivation of

property without due process?

On May 20, 1998, prior to the expiration of the licenses granted to petitioners, they filed
a petition for certiorari with application for the issuance of a writ of preliminary
injunction or temporary restraining order under Rule 65 of the Rules of Court assailing
the constitutionality and validity of the aforementioned Act and its Implementing Rules

3.

Does it not unlawfully impair the obligation

of contracts?

and Regulations. The case was entitled Rodolfo S. Beltran, doing business under the

On June 1, 1998, petitioners filed an Amended Petition for Certiorari with Prayer for

4. With the commercial blood banks being abolished and with no

ready machinery to deliver the same supply and services,
does R.A. 7719 truly serve the public welfare?

Issuance of a Temporary Restraining Order, writ of preliminary mandatory injunction

On June 2, 1998, this Court issued a Resolution directing respondent DOH to file a

name and style, Our Lady of Fatima Blood Bank, docketed as G.R. No. 133640.

and/or status quo ante order.

[18]

consolidated comment. In the same Resolution, the Court issued a temporary

In the aforementioned petition, petitioners assail the constitutionality of the

restraining order (TRO) for respondent to cease and desist from implementing and

questioned legal provisions, namely, Section 7 of Republic Act No. 7719 and Section 23

enforcing Section 7 of Republic Act No. 7719 and its implementing rules and regulations

of Administrative Order No. 9, Series of 1995, on the following grounds:

1.

2.

[19]

The questioned legal provisions of the National Blood Services

Act and its Implementing Rules violate the equal protection
clause for irrationally discriminating against free standing
blood banks in a manner which is not germane to the
purpose of the law;
The questioned provisions of the National Blood Services
Act and its Implementing Rules represent undue delegation if
not outright abdication of the police power of the state; and,

until further orders from the Court.

[23]

On August 26, 1998, respondent Secretary of Health filed a Consolidated Comment on

the petitions for certiorari and mandamus in G.R. Nos. 133640 and 133661, with
opposition to the issuance of a temporary restraining order.

[24]

In the Consolidated Comment, respondent Secretary of Health submitted that blood

from commercial blood banks is unsafe and therefore the State, in the exercise of its
police power, can close down commercial blood banks to protect the public. He cited
the record of deliberations on Senate Bill No. 1101 which later became Republic Act No.

3.

The questioned provisions of the National Blood Services

Act and its Implementing Rules are unwarranted deprivation
of personal liberty.

On May 22, 1998, the Doctors Blood Center filed a similar petition for
mandamus with a prayer for the issuance of a temporary restraining order,
preliminary prohibitory and mandatory injunction before this Court
entitled Doctors Blood Center vs. Department of Health, docketed as G.R. No.
[20]
[21]
133661. This was consolidated with G.R. No. 133640.
Similarly, the petition attacked the constitutionality of Republic Act No. 7719 and its
implementing rules and regulations, thus, praying for the issuance of a license to
operate commercial blood banks beyond May 27, 1998. Specifically, with regard to
Republic Act No. 7719, the petition submitted the following questions

[22]

for resolution:

7719, and the sponsorship speech of Senator Orlando Mercado.

The rationale for the closure of these commercial blood banks can be found in the
deliberations of Senate Bill No. 1011, excerpts of which are quoted below:
Senator Mercado: I am providing over a period of two years to phase
out all commercial blood banks. So that in the end, the new section
would have a provision that states:
ALL COMMERCIAL BLOOD BANKS SHALL BE PHASED OUT
OVER A PERIOD OF TWO YEARS AFTER THE EFFECTIVITY OF THIS ACT.
BLOOD SHALL BE COLLECTED FROM VOLUNTARY DONORS ONLY AND
THE SERVICE FEE TO BE CHARGED FOR EVERY BLOOD PRODUCT

ISSUED SHALL BE LIMITED TO THE NECESSARY EXPENSES ENTAILED IN

COLLECTING AND PROCESSING OF BLOOD. THE SERVICE FEE SHALL BE
MADE UNIFORM THROUGH GUIDELINES TO BE SET BY THE
DEPARTMENTOF HEALTH.
I am supporting Mr. President, the finding of a study called
Project to Evaluate the Safety of the Philippine Blood Banking System.
This has been taken note of. This is a study done with the assistance of
the USAID by doctors under the New Tropical Medicine Foundation in
Alabang.
Part of the long-term measures proposed by this particular
study is to improve laws, outlaw buying and selling of blood and legally
define good manufacturing processes for blood. This goes to the very
heart of my amendment which seeks to put into law the principle that
blood should not be subject of commerce of man.
The Presiding Officer [Senator Aquino]: What does the sponsor say?
Senator Webb: Mr. President, just for clarity, I would like to
find out how the Gentleman defines a commercial blood bank. I am at
a loss at times what a commercial blood bank really is.
Senator Mercado: We have a definition, I believe, in the
measure, Mr. President.
The Presiding Officer [Senator Aquino]: It is a business where
profit is considered.
Senator Mercado: If the Chairman of the Committee would accept it,
we can put a provision on Section 3, a definition of a commercial
blood bank, which, as defined in this law, exists for profit and engages
in the buying and selling of blood or its components.

If we give the responsibility of the testing of blood to those

commercial blood banks, they will cut corners because it will protect
their profit.
In the first place, the people who sell their blood are the
people who are normally in the high-risk category. So we should stop
the system of selling and buying blood so that we can go into a
national voluntary blood program.
It has been said here in this report, and I quote:
Why is buying and selling of blood not safe? This is not safe
because a donor who expects payment for his blood will not tell the
truth about his illnesses and will deny any risky social behavior such as
sexual promiscuity which increases the risk of having syphilis or AIDS
or abuse of intravenous addictive drugs. Laboratory tests are of
limited value and will not detect early infections. Laboratory tests are
required only for four diseases in the Philippines. There are other
blood transmissible diseases we do not yet screen for and there could
be others where there are no tests available yet.
A blood bank owner expecting to gain profit from selling
blood will also try his best to limit his expenses. Usually he tries to
increase his profit by buying cheaper reagents or test kits, hiring
cheaper manpower or skipping some tests altogether. He may also try
to sell blood even though these have infections in them. Because
there is no existing system of counterchecking these, the blood bank
owner can usually get away with many unethical practices.
The experience of Germany, Mr. President is illustrative of
this issue. The reason why contaminated blood was sold was that
there were corners cut by commercial blood banks in the testing
[25]
process. They were protecting their profits.

Senator Webb: That is a good description, Mr. President.

Senator Mercado: I refer, Mr. President, to a letter written by
Dr. Jaime Galvez-Tan, the Chief of Staff, Undersecretary of Health, to
the good Chairperson of the Committee on Health.
In recommendation No. 4, he says:
The need to phase out all commercial blood banks within a
two-year period will give the Department of Health enough time to
build up governments capability to provide an adequate supply of
blood for the needs of the nation...the use of blood for transfusion is a
medical service and not a sale of commodity.
Taking into consideration the experience of the National
Kidney Institute, which has succeeded in making the hospital 100
percent dependent on voluntary blood donation, here is a success
story of a hospital that does not buy blood. All those who are operated
on and need blood have to convince their relatives or have to get
volunteers who would donate blood

The sponsorship speech of Senator Mercado further elucidated his stand on the issue:

Senator Mercado: Today, across the country, hundreds of povertystricken, sickly and weak Filipinos, who, unemployed, without hope
and without money to buy the next meal, will walk into a commercial
blood bank, extend their arms and plead that their blood be bought.
They will lie about their age, their medical history. They will lie about
when they last sold their blood. For doing this, they will receive close
to a hundred pesos. This may tide them over for the next few days. Of
course, until the next bloodletting.
This same blood will travel to the posh city hospitals and urbane
medical centers. This same blood will now be bought by the rich at a
price over 500% of the value for which it was sold. Between this
buying and selling, obviously, someone has made a very fast buck.

Every doctor has handled at least one transfusion-related disease in an

otherwise normal patient. Patients come in for minor surgery of the
hand or whatever and they leave with hepatitis B. A patient comes in
for an appendectomy and he leaves with malaria. The worst
nightmare: A patient comes in for a Caesarian section and leaves with
AIDS.
We do not expect good blood from donors who sell their blood
because of poverty. The humane dimension of blood transfusion is not
in the act of receiving blood, but in the act of giving it

advisory leaflets, posters and flyers to the public which state that blood banks are closed
or will be closed. According to respondent Secretary, the same were printed and
circulated in anticipation of the closure of the commercial blood banks in accordance
with R.A. No. 7719, and were printed and circulated prior to the issuance of the TRO.

[28]

On July 15, 1999, petitioners in G.R. No. 133640 filed a Petition to Show Cause
Why Public Respondent Should Not be Held in Contempt of Court, docketed as G.R. No.
139147, citing public respondents willful disobedience of or resistance to the restraining

For years, our people have been at the mercy of commercial blood
banks that lobby their interests among medical technologists, hospital
administrators and sometimes even physicians so that a proactive
system for collection of blood from healthy donors becomes difficult,
tedious and unrewarding.

order issued by the Court in the said case. Petitioners alleged that respondents act

The Department of Health has never institutionalized a comprehensive

national program for safe blood and for voluntary blood donation
even if this is a serious public health concern and has fallen for the
linen of commercial blood bankers, hook, line and sinker because it is
more convenient to tell the patient to buy blood.

respondent, in his effort to strike down the existence of commercial blood banks,

Commercial blood banks hold us hostage to their threat that if we are

to close them down, there will be no blood supply. This is true if the
Government does not step in to ensure that safe supply of blood. We
cannot allow commercial interest groups to dictate policy on what is
and what should be a humanitarian effort. This cannot and will never
work because their interest in blood donation is merely monetary. We
cannot expect commercial blood banks to take the lead in voluntary
blood donation. Only the Government can do it, and the Government
[26]
must do it.

rely on government blood banks.

On May 5, 1999, petitioners filed a Motion for Issuance of Expanded Temporary

constitutes circumvention of the temporary restraining order and a mockery of the

authority of the Court and the orderly administration of justice.

[29]

Petitioners added

that despite the issuance of the temporary restraining order in G.R. No. 133640,

disseminated misleading information under the guise of health advisories, press

releases, leaflets, brochures and flyers stating, among others, that this year [1998] all
commercial blood banks will be closed by 27 May. Those who need blood will have to
[30]

Petitioners further claimed that respondent

Secretary of Health announced in a press conference during the Blood Donors Week
that commercial blood banks are illegal and dangerous and that they are at the moment
protected by a restraining order on the basis that their commercial interest is more
important than the lives of the people. These were all posted in bulletin boards and
other conspicuous places in all government hospitals as well as other medical and health
centers.

[31]

Restraining Order for the Court to order respondent Secretary of Health to cease and
desist from announcing the closure of commercial blood banks, compelling the public to
source the needed blood from voluntary donors only, and committing similar acts that
will ultimately cause the shutdown of petitioners blood banks.

[27]

On July 8, 1999, respondent Secretary filed his Comment and/or Opposition to

the above motion stating that he has not ordered the closure of commercial blood
banks on account of the Temporary Restraining Order (TRO) issued on June 2, 1998 by
the Court. In compliance with the TRO, DOH had likewise ceased to distribute the health

In respondent Secretarys Comment to the Petition to Show Cause Why Public

Respondent Should Not Be Held in Contempt of Court, dated January 3, 2000, it was
explained that nothing was issued by the department ordering the closure of
commercial blood banks. The subject health advisory leaflets pertaining to said closure
pursuant to Republic Act No. 7719 were printed and circulated prior to the Courts
issuance of a temporary restraining order on June 21, 1998.

[32]

Public respondent further claimed that the primary purpose of the information
campaign was to promote the importance and safety of voluntary blood donation and

to educate the public about the hazards of patronizing blood supplies from commercial
blood banks.

[33]

In doing so, he was merely performing his regular functions and duties

selling blood or charging fees other than those allowed by law is even penalized under
Section 12.

[37]

as the Secretary of Health to protect the health and welfare of the public. Moreover, the
DOH is the main proponent of the voluntary blood donation program espoused by

Thus, in view of these, the Court is now tasked to pass upon the constitutionality of

Republic Act No. 7719, particularly Section 4 thereof which provides that, in order to

Section 7 of Republic Act No. 7719 or the National Blood Services Act of 1994 and its

ensure the adequate supply of human blood, voluntary blood donation shall be

Implementing Rules and Regulations.

promoted through public education, promotion in schools, professional education,

establishment of blood services network, and walking blood donors.

In resolving the controversy, this Court deems it necessary to address the

issues and/or questions raised by petitioners concerning the constitutionality of the

Hence, by authority of the law, respondent Secretary contends that he has the

aforesaid Act in G.R. No. 133640 and 133661 as summarized hereunder:

duty to promote the program of voluntary blood donation. Certainly, his act of
encouraging the public to donate blood voluntarily and educating the people on the

I.

WHETHER OR NOT SECTION 7 OF R.A. 7719 CONSTITUTES

UNDUE DELEGATION OF LEGISLATIVE POWER;

II.

WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS

IMPLEMENTING RULES AND REGULATIONS VIOLATE THE
EQUAL PROTECTION CLAUSE;

III.

WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS

IMPLEMENTING RULES AND REGULATIONS VIOLATE THE
NON-IMPAIRMENT CLAUSE;
WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS
IMPLEMENTING RULES AND REGULATIONS CONSTITUTE
DEPRIVATION OF PERSONAL LIBERTYAND PROPERTY;

risks associated with blood coming from a paid donor promotes general health and
welfare and which should be given more importance than the commercial businesses of
petitioners.

[34]

On July 29, 1999, interposing personal and substantial interest in the case as taxpayers
and citizens, a Petition-in-Intervention was filed interjecting the same arguments and
issues as laid down by petitioners in G.R. No. 133640 and 133661, namely, the

IV.

unconstitutionality of the Acts, and, the issuance of a writ of prohibitory injunction. The
intervenors are the immediate relatives of individuals who had died allegedly because of
shortage of blood supply at a critical time.

V.

WHETHER OR NOT R.A. 7719 IS A VALID EXERCISE OF POLICE

POWER; and,

VI.

WHETHER OR NOT SECTION 7 OF R.A. 7719 AND ITS

IMPLEMENTING RULES AND REGULATIONS TRULY SERVE
PUBLIC WELFARE.

[35]

The intervenors contended that Republic Act No. 7719 constitutes undue
delegation of legislative powers and unwarranted deprivation of personal liberty.

[36]

In a resolution, dated September 7, 1999, and without giving due course to the
aforementioned petition, the Court granted the Motion for Intervention that was filed

As to the first ground upon which the constitutionality of the Act is being challenged, it

by the above intervenors on August 9, 1999.

is the contention of petitioners that the phase out of commercial or free standing blood
banks is unconstitutional because it is an improper and unwarranted delegation of

In his Comment to the petition-in-intervention, respondent Secretary of Health

legislative power. According to petitioners, the Act was incomplete when it was passed

stated that the sale of blood is contrary to the spirit and letter of the Act that blood

by the Legislature, and the latter failed to fix a standard to which the Secretary of Health

donation is a humanitarian act and blood transfusion is a professional medical service

must conform in the performance of his functions. Petitioners also contend that the

and not a sale of commodity (Section 2[a] and [b] of Republic Act No. 7719). The act of

two-year extension period that may be granted by the Secretary of Health for the

phasing out of commercial blood banks pursuant to Section 7 of the Act constrained the

Republic Act No. 7719. Administrative Order. No. 9 effectively filled in the details of the

Secretary to legislate, thus constituting undue delegation of legislative power.

law for its proper implementation.

In testing whether a statute constitutes an undue delegation of legislative

power or not, it is usual to inquire whether the statute was complete in all its terms and

Specifically, Section 23 of Administrative Order No. 9 provides that the phase-

provisions when it left the hands of the Legislature so that nothing was left to the

out period for commercial blood banks shall be extended for another two years until

judgment of the administrative body or any other appointee or delegate of the

May 28, 1998 based on the result of a careful study and review of the blood supply and

Legislature.

[38]

Except as to matters of detail that may be left to be filled in by rules and

demand and public safety. This power to ascertain the existence of facts and conditions

regulations to be adopted or promulgated by executive officers and administrative

upon which the Secretary may effect a period of extension for said phase-out can be

boards, an act of the Legislature, as a general rule, is incomplete and hence invalid if it

delegated by Congress. The true distinction between the power to make laws and

does not lay down any rule or definite standard by which the administrative board may

discretion as to its execution is illustrated by the fact that the delegation of power to

be guided in the exercise of the discretionary powers delegated to it.

[39]

make the law, which necessarily involves a discretion as to what it shall be, and

Republic Act No. 7719 or the National Blood Services Act of 1994 is complete in

conferring an authority or discretion as to its execution, to be exercised under and in

itself. It is clear from the provisions of the Act that the Legislature intended primarily to

pursuance of the law. The first cannot be done; to the latter no valid objection can be

safeguard the health of the people and has mandated several measures to attain this

made.

[41]

objective. One of these is the phase out of commercial blood banks in the country. The
law has sufficiently provided a definite standard for the guidance of the Secretary of

In this regard, the Secretary did not go beyond the powers granted to him by

Health in carrying out its provisions, that is, the promotion of public health by providing

the Act when said phase-out period was extended in accordance with the Act as laid out

a safe and adequate supply of blood through voluntary blood donation. By its

in Section 2 thereof:
SECTION 2. Declaration of Policy In order to promote public
health, it is hereby declared the policy of the state:

provisions, it has conferred the power and authority to the Secretary of Health as to its
execution, to be exercised under and in pursuance of the law.
Congress may validly delegate to administrative agencies the authority to

a)

to promote and encourage voluntary blood donation

by the citizenry and to instill public consciousness of the
principle that blood donation is a humanitarian act;

b)

to lay down the legal principle that the provision of

blood for transfusion is a medical service and not a sale
of commodity;
to provide for adequate, safe, affordable and
equitable distribution of blood supply and blood
products;

promulgate rules and regulations to implement a given legislation and effectuate its
policies.

[40]

The Secretary of Health has been given, under Republic Act No. 7719, broad

powers to execute the provisions of said Act. Section 11 of the Act states:
SEC. 11. Rules and Regulations. The implementation of the provisions
of the Act shall be in accordance with the rules and regulations to be
promulgated by the Secretary, within sixty (60) days from the approval
hereof

c)

d)

to inform the public of the need for voluntary blood

donation to curb the hazards caused by the commercial
sale of blood;

e)

to teach the benefits and rationale of voluntary blood

donation in the existing health subjects of the formal

This is what respondent Secretary exactly did when DOH, by virtue of the
administrative bodys authority and expertise in the matter, came out with
Administrative Order No.9, series of 1995 or the Rules and Regulations Implementing

education system in all public and private schools as well

as the non-formal system;

classification on a reasonable basis and not made arbitrarily or capriciously is permitted.

The classification, however, to be reasonable: (a) must be based on substantial

f)

g)

h)

to mobilize all sectors of the community to

participate in mechanisms for voluntary and non-profit
collection of blood;
to mandate the Department of Health to establish and
organize a National Blood Transfusion Service Network in
order to rationalize and improve the provision of
adequate and safe supply of blood;
to provide for adequate assistance to institutions
promoting voluntary blood donation and providing nonprofit blood services, either through a system of
reimbursement for costs from patients who can afford to
pay, or donations from governmental and nongovernmental entities;

distinctions which make real differences; (b) must be germane to the purpose of the
law; (c) must not be limited to existing conditions only; and, (d) must apply equally to
each member of the class.

[43]

Republic Act No. 7719 or The National Blood Services Act of 1994, was enacted
for the promotion of public health and welfare. In the aforementioned study conducted
by the New Tropical Medicine Foundation, it was revealed that the Philippine blood
banking system is disturbingly primitive and unsafe, and with its current condition, the
spread of infectious diseases such as malaria, AIDS, Hepatitis B and syphilis chiefly from
blood transfusion is unavoidable. The situation becomes more distressing as the study
showed that almost 70% of the blood supply in the country is sourced from paid blood
donors who are three times riskier than voluntary blood donors because they are

i)

to require all blood collection units and blood

banks/centers to operate on a non-profit basis;

j)

to establish scientific and professional standards for

the operation of blood collection units and blood
banks/centers in the Philippines;

unlikely to disclose their medical or social history during the blood screening.

[44]

The above study led to the passage of Republic Act No. 7719, to instill public

k)

l)

to regulate and ensure the safety of all activities

related to the collection, storage and banking of blood;
and,
to require upgrading of blood banks/centers to
include preventive services and education to control
spread of blood transfusion transmissible diseases.

consciousness of the importance and benefits of voluntary blood donation, safe blood
supply and proper blood collection from healthy donors. To do this, the Legislature
decided to order the phase out of commercial blood banks to improve the Philippine
blood banking system, to regulate the supply and proper collection of safe blood, and so
as not to derail the implementation of the voluntary blood donation program of the
government. In lieu of commercial blood banks, non-profit blood banks or blood
centers, in strict adherence to professional and scientific standards to be established by
the DOH, shall be set in place.

Based on the foregoing, the Legislature never intended for the law to create a

Petitioners also assert that the law and its implementing rules and regulations
violate the equal protection clause enshrined in the Constitution because it unduly
discriminates against commercial or free standing blood banks in a manner that is not
germane to the purpose of the law.

[42]

situation in which unjustifiable discrimination and inequality shall be allowed. To

effectuate its policy, a classification was made between nonprofit blood banks/centers
and commercial blood banks.

We deem the classification to be valid and reasonable for the following

What may be regarded as a denial of the equal protection of the laws is a question not
always easily determined. No rule that will cover every case can be formulated. Class
legislation, discriminating against some and favoring others is prohibited but

[45]

reasons:
One, it was based on substantial distinctions. The former operates for purely
humanitarian reasons and as a medical service while the latter is motivated by profit.

Also, while the former wholly encourages voluntary blood donation, the latter treats

blood banks but their interests must give way to serve a higher end for the interest of

blood as a sale of commodity.

the public.

Two, the classification, and the consequent phase out of commercial blood
banks is germane to the purpose of the law, that is, to provide the nation with an

The Court finds that the National Blood Services Act is a valid exercise of the

adequate supply of safe blood by promoting voluntary blood donation and treating

States police power. Therefore, the Legislature, under the circumstances, adopted a

blood transfusion as a humanitarian or medical service rather than a commodity. This

course of action that is both necessary and reasonable for the common good. Police

necessarily involves the phase out of commercial blood banks based on the fact that

power is the State authority to enact legislation that may interfere with personal liberty

they operate as a business enterprise, and they source their blood supply from paid

or property in order to promote the general welfare.

blood donors who are considered unsafe compared to voluntary blood donors as shown

It is in this regard that the Court finds the related grounds and/or issues raised by

by the USAID-sponsored study on the Philippine blood banking system.

petitioners, namely, deprivation of personal liberty and property, and violation of the

Three, the Legislature intended for the general application of the law. Its

non-impairment clause, to be unmeritorious.

enactment was not solely to address the peculiar circumstances of the situation nor was
it intended to apply only to the existing conditions.

[47]

Petitioners are of the opinion that the Act is unconstitutional and void because
it infringes on the freedom of choice of an individual in connection to what he wants to

Lastly, the law applies equally to all commercial blood banks without exception.

do with his blood which should be outside the domain of State intervention.

Having said that, this Court comes to the inquiry as to whether or not Republic

Additionally, and in relation to the issue of classification, petitioners asseverate that,

Act No. 7719 constitutes a valid exercise of police power.

indeed, under the Civil Code, the human body and its organs like the heart, the kidney

The promotion of public health is a fundamental obligation of the State. The health of

and the liver are outside the commerce of man but this cannot be made to apply to

the people is a primordial governmental concern. Basically, the National Blood Services

human blood because the latter can be replenished by the body. To treat human blood

Act was enacted in the exercise of the States police power in order to promote and

equally as the human organs would constitute invalid classification.

preserve public health and safety.

[48]

Petitioners likewise claim that the phase out of the commercial blood banks

Police power of the state is validly exercised if (a) the interest of the public

will be disadvantageous to them as it will affect their businesses and existing contracts

generally, as distinguished from those of a particular class, requires the interference of

with hospitals and other health institutions, hence Section 7 of the Act should be struck

the State; and, (b) the means employed are reasonably necessary to the attainment of

down because it violates the non-impairment clause provided by the Constitution.

the objective sought to be accomplished and not unduly oppressive upon individuals.

[46]

As stated above, the State, in order to promote the general welfare, may

In the earlier discussion, the Court has mentioned of the avowed policy of the

interfere with personal liberty, with property, and with business and occupations. Thus,

law for the protection of public health by ensuring an adequate supply of safe blood in

persons may be subjected to certain kinds of restraints and burdens in order to secure

the country through voluntary blood donation. Attaining this objective requires the

the general welfare of the State and to this fundamental aim of government, the rights

interference of the State given the disturbing condition of the Philippine blood banking

of the individual may be subordinated.

system.

Moreover, in the case of Philippine Association of Service Exporters, Inc. v.

In serving the interest of the public, and to give meaning to the purpose of the law, the

Drilon,

Legislature deemed it necessary to phase out commercial blood banks. This action may

yield to the loftier purposes targeted by the government. The right granted by this

seriously affect the owners and operators, as well as the employees, of commercial

provision must submit to the demands and necessities of the States power of

[50]

[49]

settled is the rule that the non-impairment clause of the Constitution must

regulation. While the Court understands the grave implications of Section 7 of the law in

In sum, the Court has been unable to find any constitutional infirmity in the questioned

question, the concern of the Government in this case, however, is not necessarily to

provisions of the National Blood Services Act of 1994 and its Implementing Rules and

maintain profits of business firms. In the ordinary sequence of events, it is profits that

Regulations.

suffer as a result of government regulation.

The fundamental criterion is that all reasonable doubts should be resolved in

Furthermore, the freedom to contract is not absolute; all contracts and all

favor of the constitutionality of a statute. Every law has in its favor the presumption of

rights are subject to the police power of the State and not only may regulations which

constitutionality. For a law to be nullified, it must be shown that there is a clear and

affect them be established by the State, but all such regulations must be subject to

unequivocal breach of the Constitution. The ground for nullity must be clear and beyond

change from time to time, as the general well-being of the community may require, or

reasonable doubt.

as the circumstances may change, or as experience may demonstrate the

unconstitutional must clearly establish the basis therefor. Otherwise, the petition must

necessity.

[51]

This doctrine was reiterated in the case of Vda. de Genuino v. Court of

Agrarian Relations

[52]

where the Court held that individual rights to contract and to

[56]

Those who petition this Court to declare a law, or parts thereof,

fail.
Based on the grounds raised by petitioners to challenge the constitutionality of the

property have to give way to police power exercised for public welfare.

National Blood Services Act of 1994 and its Implementing Rules and Regulations, the

As for determining whether or not the shutdown of commercial blood banks will truly

Court finds that petitioners have failed to overcome the presumption of

serve the general public considering the shortage of blood supply in the country as

constitutionality of the law. As to whether the Act constitutes a wise legislation,

proffered by petitioners, we maintain that the wisdom of the Legislature in the lawful

considering the issues being raised by petitioners, is for Congress to determine.

[57]

exercise of its power to enact laws cannot be inquired into by the Court. Doing so would
be in derogation of the principle of separation of powers.

[53]

WHEREFORE, premises considered, the Court renders judgment as follows:

That, under the circumstances, proper regulation of all blood banks without distinction
in order to achieve the objective of the law as contended by petitioners is, of course,

1.

In G.R. Nos. 133640 and 133661, the Court UPHOLDS

possible; but, this would be arguing on what the law may be or should be and not what

THE VALIDITY of Section 7 of Republic Act No. 7719, otherwise known

the law is. Between is and ought there is a far cry. The wisdom and propriety of

as the National Blood Services Act of 1994, and Administrative Order

legislation is not for this Court to pass upon.

[54]

No. 9, Series of 1995 or the Rules and Regulations Implementing

Finally, with regard to the petition for contempt in G.R. No. 139147, on the other hand,

Republic Act No. 7719. The petitions are DISMISSED. Consequently,

the Court finds respondent Secretary of Healths explanation satisfactory. The

the Temporary Restraining Order issued by this Court on June 2, 1998,

statements in the flyers and posters were not aimed at influencing or threatening the

is LIFTED.

Court in deciding in favor of the constitutionality of the law.

2.
Contempt of court presupposes a contumacious attitude, a flouting or arrogant
belligerence in defiance of the court.

[55]

In G.R. No. 139147, the petition seeking to cite the

Secretary of Health in contempt of court is DENIED for lack of merit.

There is nothing contemptuous about the

statements and information contained in the health advisory that were distributed by

No costs.

DOH before the TRO was issued by this Court ordering the former to cease and desist
from distributing the same.

SO ORDERED.

EN BANC
British American Tobacco, petitioner vs. Jose Isidro N. Camacho, in his capacity
as Secretary of Department of Finance and Guillermo L. Parayno, Jr., in his
capacity as Commissioner of the Bureau of Internal Revenue, respondents;
Philip Morris Philippines Manufacturing, Inc., Fortune Tobacco, Corp., Mighty
Corporation and JT International , S.A., respondents-in-intervention
G.R. No. 163583, August 20, 2008
DECISION
YNARES-SANTIAGO, J.:
This petition for review assails the validity of: (1) Section 145 of the National
Internal Revenue Code (NIRC), as recodified by Republic Act (RA) 8424; (2) RA
9334, which further amended Section 145 of the NIRC on January 1, 2005; (3)
Revenue Regulations Nos. 1-97, 9-2003, and 22-2003; and (4) Revenue
Memorandum Order No. 6-2003.Petitioner argues that the said provisions are
violative of the equal protection and uniformity clauses of the Constitution.
RA 8240, entitled An Act Amending Sections 138, 139, 140, and 142 of the
NIRC, as Amended and For Other Purposes, took effect on January 1, 1997. In
the same year, Congress passed RA 8424 or The Tax Reform Act of 1997, recodifying the NIRC. Section 142 was renumbered as Section 145 of the NIRC.
Paragraph (c) of Section 145 provides for four tiers of tax rates based
on the net retail price per pack of cigarettes. To determine the applicable tax
rates of existing cigarette brands, a survey of the net retail prices per pack of
cigarettes was conducted as of October 1, 1996, the results of which were

(c) Cigarettes packed by machine. There shall be levied,

assessed and collected on cigarettes packed by machine a tax
at the rates prescribed below:
(1) If the net retail price (excluding the
excise tax and the value-added tax) is above
Ten pesos (P10.00) per pack, the tax shall
be Thirteen pesos and forty-four centavos
(P13.44) per pack;
(2) If the net retail price (excluding the
excise tax and the value-added tax) exceeds
Six pesos and fifty centavos (P6.50) but
does not exceed Ten pesos (10.00) per
pack, the tax shall be Eight pesos and
ninety-six centavos (P8.96) per pack;
(3) If the net retail price (excluding the
excise tax and the value-added tax) is Five
pesos (P5.00) but does not exceed Six pesos
and fifty centavos (P6.50) per pack, the tax
shall be Five pesos and sixty centavos
(P5.60) per pack;
(4) If the net retail price (excluding
the excise tax and the value-added tax) is
below Five pesos (P5.00) per pack, the tax
shall be One peso and twelve centavos
(P1.12) per pack.
Variants of existing brands of cigarettes which are
introduced in the domestic market after the effectivity of this
Act shall be taxed under the highest classification of any
variant of that brand.
xxxx

embodied in Annex D of the NIRC as the duly registered, existing or active

New brands shall be
their current net retail price.

brands of cigarettes.
Paragraph (c) of Section 145,

[1]

SEC. 145. Cigars and cigarettes.

xxxx

states

classified

according

to

For the above purpose, net retail price shall mean

the price at which the cigarette is sold on retail in 20 major
supermarkets in Metro Manila (for brands of cigarettes
marketed nationally), excluding the amount intended to
cover the applicable excise tax and the value-added tax. For
brands which are marketed only outside Metro Manila, the
net retail price shall mean the price at which the cigarette is
sold in five major supermarkets in the region excluding the

amount intended to cover the applicable excise tax and the

value-added tax.

has not yet been established, the suggested net retail price
shall be used to determine the specific tax
classification. Thereafter, a survey shall be conducted in 20
major supermarkets or retail outlets in Metro Manila (for
brands of cigarette marketed nationally) or in five (5) major
supermarkets or retail outlets in the region (for brands which
are marketed only outside Metro Manila) at which the
cigarette is sold on retail in reams/cartons, three (3) months
after the initial removal of the new brand to determine the
actual net retail price excluding the excise tax and value
added tax which shall then be the basis in determining the
specific tax classification. In case the current net retail price is
higher than the suggested net retail price, the former shall
prevail. Any difference in specific tax due shall be assessed
and collected inclusive of increments as provided for by the
National Internal Revenue Code, as amended.

The classification of each brand of cigarettes based

on its average net retail price as of October 1, 1996, as set
forth in Annex D of this Act, shall remain in force until
revised by Congress. (Emphasis supplied)

As such, new brands of cigarettes shall be taxed according to their current net
retail price while existing or old brands shall be taxed based on their net retail
price as ofOctober 1, 1996.
To implement RA 8240, the Bureau of Internal Revenue (BIR)
[2]

issued Revenue Regulations No. 1-97, which classified the existing brands of
cigarettes as those duly registered or active brands prior to January 1,
1997. New brands, or those registered after January 1, 1997, shall be initially

In June 2001, petitioner British American Tobacco introduced into the market

assessed at their suggested retail price until such time that the appropriate

Lucky Strike Filter, Lucky Strike Lights and Lucky Strike Menthol Lights

survey to determine their current net retail price is conducted. Pertinent

cigarettes, with a suggested retail price of P9.90 per pack. Pursuant to Sec.

portion of the regulations reads

145 (c) quoted above, the Lucky Strike brands were initially assessed the excise

[3]

SECTION 2. Definition of Terms.

tax at P8.96 per pack.

xxxx
3. Duly registered or existing brand of cigarettes shall
include duly registered, existing or active brands of cigarettes,
prior to January 1, 1997.

On February 17, 2003, Revenue Regulations No. 9-2003, amended Revenue

xxxx
6. New Brands shall mean brands duly registered
after January 1, 1997 and shall include duly registered,
inactive brands of cigarette not sold in commercial quantity
before January 1, 1997.
SECTION 4. Classification and Manner of Taxation of Existing
Brands, New Brands and Variant of Existing Brands.
xxxx
B. New Brand
New brands shall be classified according to their current net
retail price. In the meantime that the current net retail price

[4]

Regulations No. 1-97 by providing, among others, a periodic review every two
years or earlier of the current net retail price of new brands and variants
thereof for the purpose of establishing and updating their tax classification,
thus:
For the purpose of establishing or updating the tax
classification of new brands and variant(s) thereof, their
current net retail price shall be reviewed periodically through
the conduct of survey or any other appropriate activity, as
mentioned above, every two (2) years unless earlier ordered
by the Commissioner. However, notwithstanding any increase
in the current net retail price, the tax classification of such
new brands shall remain in force until the same is altered or
changed through the issuance of an appropriate Revenue
Regulations.

[5]

[15]

Pursuant thereto, Revenue Memorandum Order No. 6-2003 was issued on

On May 12, 2004, the trial court rendered a decision

March 11, 2003, prescribing the guidelines and procedures in establishing

constitutionality of Section 145 of the NIRC, Revenue Regulations Nos. 1-97, 9-

current net retail prices of new brands of cigarettes and alcohol products.

2003, 22-2003 and Revenue Memorandum Order No. 6-2003. The trial court

[6]

Subsequently, Revenue Regulations No. 22-2003 was issued on

August 8, 2003 to implement the revised tax classification of certain new
brands introduced in the market after January 1, 1997, based on the survey of
their current net retail price. The survey revealed that Lucky Strike Filter, Lucky
Strike Lights, and Lucky Strike Menthol Lights, are sold at the current net retail
[7]

upholding the

also lifted the writ of preliminary injunction. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, the instant Petition is
hereby DISMISSED for lack of merit. The Writ of Preliminary
Injunction previously issued is hereby lifted and dissolved.

price of P22.54, P22.61 and P21.23, per pack, respectively. Respondent

Commissioner of the Bureau of Internal Revenue thus recommended the

SO ORDERED.

[16]

applicable tax rate of P13.44 per pack inasmuch as Lucky Strikes average net
retail price is above P10.00 per pack.
Thus, on September 1, 2003, petitioner filed before the Regional Trial Court
(RTC) of Makati, Branch 61, a petition for injunction with prayer for the
issuance of a temporary restraining order (TRO) and/or writ of preliminary
injunction, docketed as Civil Case No. 03-1032. Said petition sought to enjoin
the implementation of Section 145 of the NIRC, Revenue Regulations Nos. 1-97,
9-2003, 22-2003 and Revenue Memorandum Order No. 6-2003 on the ground
that they discriminate against new brands of cigarettes, in violation of the

Petitioner brought the instant petition for review directly with this
Court on a pure question of law.
While the petition was pending, RA 9334 (An Act Increasing The Excise
Tax Rates Imposed on Alcohol And Tobacco Products, Amending For The
Purpose Sections 131, 141, 143, 144, 145 and 288 of the NIRC of 1997, As
Amended), took effect on January 1, 2005. The statute, among others,

equal protection and uniformity provisions of the Constitution.

Respondent Commissioner of Internal Revenue filed an Opposition

(1) increased the excise tax rates provided in

[8]

paragraph (c) of Section 145;

to the

application for the issuance of a TRO. On September 4, 2003, the trial court

(2) mandated that new brands of cigarettes shall

denied the application for TRO, holding that the courts have no authority to

initially be classified according to their suggested net retail

[9]

restrain the collection of taxes. Meanwhile, respondent Secretary of Finance

filed a Motion to Dismiss,

[10]

contending that the petition is premature for lack

of an actual controversy or urgent necessity to justify judicial intervention.

price, until such time that their correct tax bracket is finally
determined under a specified period and, after which, their
classification shall remain in force until revised by Congress;

In an Order dated March 4, 2004, the trial court denied the motion to dismiss

(3) retained Annex D as tax base of those surveyed

and issued a writ of preliminary injunction to enjoin the implementation of

as of October 1, 1996 including the classification of brands for

Revenue Regulations Nos. 1-97, 9-2003, 22-2003 and Revenue Memorandum

the same products which, although not set forth in said

Order No. 6-2003.

[11]

Respondents filed a Motion for Reconsideration

[12]

and

Annex D, were registered on or before January 1, 1997 and

At the hearing on the said

were being commercially produced and marketed on or after

motions, petitioner and respondent Commissioner of Internal Revenue

October 1, 1996, and which continue to be commercially

stipulated that the only issue in this case is the constitutionality of the assailed

produced and marketed after the effectivity of this Act. Said

Supplemental Motion for Reconsideration.

law, order, and regulations.

[14]

[13]

classification shall remain in force until revised by Congress;

and

(4) provided a legislative freeze on brands of

cigarettes
[17]

1997

introduced

between

the

period January

2,

to December 31, 2003, such that said cigarettesshall

remain in the classification under which the BIR has

determined them to belong as of December 31, 2003, until
revised by Congress.
Pertinent portions, of RA 9334, provides:

Effective on January 1, 2007, Six

pesos and seventy-four centavos
(P6.74) per pack;
Effective on January 1, 2009, Seven
pesos and fourteen centavos
(P7.14) per pack; and
Effective on January 1, 2011, Seven
pesos and fifty-six centavos (P7.56)
per pack.

SEC. 145. Cigars and Cigarettes.

xxxx
(C) Cigarettes Packed by Machine. There shall be
levied, assessed and collected on cigarettes packed by
machine a tax at the rates prescribed below:
(1) If the net retail price (excluding the excise tax and
the value-added tax) is below Five pesos (P5.00) per pack, the
tax shall be:
Effective on January 1, 2005, Two
pesos (P2.00) per pack;
Effective on January 1, 2007, Two
pesos and twenty-three centavos
(P2.23) per pack;
Effective on January 1, 2009, Two
pesos and forty-seven centavos
(P2.47) per pack; and
Effective on January 1, 2011, Two
pesos and seventy-two centavos
(P2.72) per pack.
(2) If the net retail price (excluding the excise tax and the
value-added tax) is Five pesos (P5.00) but does not exceed Six
pesos and fifty centavos (P6.50) per pack, the tax shall be:
Effective on January 1, 2005, Six
pesos and thirty-five centavos
(P6.35) per pack;

(3) If the net retail price (excluding the excise tax and
the value-added tax) exceeds Six pesos and fifty centavos
(P6.50) but does not exceed Ten pesos (P10.00) per pack, the
tax shall be:
Effective on January 1, 2005, Ten
pesos and thirty-five centavos
(10.35) per pack;
Effective on January 1, 2007, Ten
pesos and eighty-eight centavos
(P10.88) per pack;
Effective on January 1, 2009,
Eleven pesos and forty-three
centavos (P11.43) per pack; and
Effective on January 1, 2011,
Twelve pesos (P12.00) per pack.
(4) If the net retail price (excluding the excise tax and
the value-added tax) is above Ten pesos (P10.00) per pack,
the tax shall be:
Effective on January 1, 2005,
Twenty-five pesos (P25.00) per
pack;
Effective on January 1, 2007,
Twenty-six pesos and six centavos
(P26.06) per pack;
Effective on January 1, 2009,
Twenty-seven pesos and sixteen
centavos (P27.16) per pack; and

Effective on January 1, 2011,

Twenty-eight pesos and thirty
centavos (P28.30) per pack.
xxxx
New brands, as defined in the immediately following
paragraph, shall initially be classified according to their
suggested net retail price.
New brands shall mean a brand registered after the date of
effectivity of R.A. No. 8240.
Suggested net retail price shall mean the net retail price at
which new brands, as defined above, of locally manufactured
or imported cigarettes are intended by the manufacturer or
importer to be sold on retail in major supermarkets or retail
outlets in Metro Manila for those marketed nationwide, and
in other regions, for those with regional markets. At the end
of three (3) months from the product launch, the Bureau of
Internal Revenue shall validate the suggested net retail price
of the new brand against the net retail price as defined herein
and determine the correct tax bracket under which a
particular new brand of cigarette, as defined above, shall be
classified. After the end of eighteen (18) months from such
validation, the Bureau of Internal Revenue shall revalidate the
initially validated net retail price against the net retail price as
of the time of revalidation in order to finally determine the
correct tax bracket under which a particular new brand of
cigarettes shall be classified; Provided however, That brands
of cigarettes introduced in the domestic market between
January 1, 1997 [should be January 2, 1997] and December
31, 2003 shall remain in the classification under which the
Bureau of Internal Revenue has determined them to belong
as of December 31, 2003. Such classification of new brands
and
brands
introduced
between January
1,
1997 and December 31, 2003 shall not be revised except by
an act of Congress.
Net retail price, as determined by the Bureau of Internal
Revenue through a price survey to be conducted by the
Bureau of Internal Revenue itself, or the National Statistics
Office when deputized for the purpose by the Bureau of
Internal Revenue, shall mean the price at which the cigarette
is sold in retail in at least twenty (20) major supermarkets in
Metro Manila (for brands of cigarettes marketed nationally),

excluding the amount intended to cover the applicable excise

tax and the value-added tax. For brands which are marketed
only outside Metro Manila, the net retail price shall mean the
price at which the cigarette is sold in at least five (5) major
supermarkets in the region excluding the amount intended to
cover the applicable excise tax and value-added tax.
The classification of each brand of cigarettes based on its
average net retail price as of October 1, 1996, as set forth in
Annex D, including the classification of brands for the same
products which, although not set forth in said Annex D,
were registered and were being commercially produced and
marketed on or after October 1, 1996, and which continue
to be commercially produced and marketed after the
effectivity of this Act, shall remain in force until revised by
Congress. (Emphasis added)
Under RA 9334, the excise tax due on petitioners products was
increased to P25.00 per pack. In the implementation thereof, respondent
Commissioner assessed petitioners importation of 911,000 packs of Lucky
Strike cigarettes at the increased tax rate of P25.00 per pack, rendering it liable
for taxes in the total sum of P22,775,000.00.

[18]

Hence, petitioner filed a Motion to Admit Attached Supplement

a Supplement

[20]

[19]

and

to the petition for review, assailing the constitutionality of RA

9334 insofar as it retained Annex D and praying for a downward classification

of Lucky Strike products at the bracket taxable at P8.96 per pack. Petitioner
contended that the continued use of Annex D as the tax base of existing brands
of cigarettes gives undue protection to said brands which are still taxed based
on their price as of October 1996 notwithstanding that they are now sold at the
same or even at a higher price than new brands like Lucky Strike. Thus, old
brands of cigarettes such as Marlboro and Philip Morris which, like Lucky Strike,
are sold at or more than P22.00 per pack, are taxed at the rate of P10.88 per
pack, while Lucky Strike products are taxed at P26.06 per pack.
In its Comment to the supplemental petition, respondents, through
the Office of the Solicitor General (OSG), argued that the passage of RA 9334,
specifically the provision imposing a legislative freeze on the classification of
cigarettes introduced into the market between January 2, 1997 and December
31, 2003, rendered the instant petition academic. The OSG claims that the
provision in Section 145, as amended by RA 9334, prohibiting the

reclassification of cigarettes introduced during said period, cured the perceived

Tax Appeals (CTA) and not the RTC because it is the CTA which has exclusive

defect of Section 145 considering that, like the cigarettes under Annex D,

appellate jurisdiction over decisions of the BIR in tax disputes.

petitioners brands and other brands introduced between January 2, 1997 and
December 31, 2003, shall remain in the classification under which the BIR has
placed them and only Congress has the power to reclassify them.

On August 7, 2006, the OSG manifested that it interposes no objection

to the motions for intervention.

[24]

Therefore, considering the substantial

interest of the intervenors, and in the higher interest of justice, the Court
On March 20, 2006, Philip Morris Philippines Manufacturing
Incorporated filed a Motion for Leave to Intervene with attached Comment-inIntervention.
Fortune

[21]

This was followed by the Motions for Leave to Intervene of

Tobacco

International, S.A.,

with

Corporation,
their

[22]

Mighty

respective

Corporation,

[23]

and JT

Comments-in-Intervention. The

admits their intervention.

Before going into the substantive issues of this case, we must first
address the matter of jurisdiction, in light of Fortune Tobaccos contention that
petitioner should have brought its petition before the Court of Tax Appeals
rather than the regional trial court.

Intervenors claim that they are parties-in-interest who stand to be affected by

the ruling of the Court on the constitutionality of Section 145 of the NIRC and

The jurisdiction of the Court of Tax Appeals is defined in Republic Act

its Annex D because they are manufacturers of cigarette brands which are

No. 1125, as amended by Republic Act No. 9282. Section 7 thereof states, in

included in the said Annex. Hence, their intervention is proper since the

pertinent part:

protection of their interest cannot be addressed in a separate proceeding.

Sec. 7. Jurisdiction. The CTA shall exercise:
According to the Intervenors, no inequality exists because cigarettes
classified by the BIR based on their net retail price as of December 31,

a. Exclusive appellate jurisdiction to review by appeal, as

herein provided:

2003 now enjoy the samestatus quo provision that prevents the BIR from
reclassifying cigarettes included in Annex D. It added that the Court has no
power to pass upon the wisdom of the legislature in retaining Annex D in RA
9334; and that the nullification of said Annex would bring about tremendous
loss of revenue to the government, chaos in the collection of taxes, illicit trade
of cigarettes, and cause decline in cigarette demand to the detriment of the
farmers who depend on the tobacco industry.
Intervenor Fortune Tobacco further contends that petitioner is
estopped from questioning the constitutionality of Section 145 and its
implementing rules and regulations because it entered into the cigarette
industry fully aware of the existing tax system and its consequences. Petitioner
imported cigarettes into the country knowing that its suggested retail price,
which will be the initial basis of its tax classification, will be confirmed and

1. Decisions of the Commissioner of Internal Revenue in cases

involving disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties in
relation thereto, or other matters arising under the
National Internal Revenue or other laws
administered by the Bureau of Internal Revenue;
2. Inaction by the Commissioner of Internal Revenue in cases
involving disputed assessments, refunds of internal
revenue taxes, fees or other charges, penalties in
relations thereto, or other matters arising under the
National Internal Revenue Code or other laws
administered by the Bureau of Internal Revenue,
where the National Internal Revenue Code provides
a specific period of action, in which case the inaction
[25]
shall be deemed a denial; xxx.

validated through a survey by the BIR to determine the correct tax that would
be levied on its cigarettes.
While the above statute confers on the CTA jurisdiction to resolve tax
Moreover, Fortune Tobacco claims that the challenge to the validity of

disputes in general, this does not include cases where the constitutionality of a

the BIR issuances should have been brought by petitioner before the Court of

law or rule is challenged. Where what is assailed is the validity or

constitutionality of a law, or a rule or regulation issued by the administrative

assailed provisions. The determination of whether the assailed law and its

agency in the performance of its quasi-legislative function, the regular courts

implementing rules and regulations contravene the Constitution is within the

have jurisdiction to pass upon the same. The determination of whether a

jurisdiction of regular courts. The Constitution vests the power of judicial

specific rule or set of rules issued by an administrative agency contravenes the

review or the power to declare a law, treaty, international or executive

law or the constitution is within the jurisdiction of the regular courts. Indeed,

agreement, presidential decree, order, instruction, ordinance, or regulation in

the Constitution vests the power of judicial review or the power to declare a

the courts, including the regional trial courts.

law, treaty, international or executive agreement, presidential decree, order,

filed the subject case before the RTC.

[28]

Petitioner, therefore, properly

instruction, ordinance, or regulation in the courts, including the regional trial

courts. This is within the scope of judicial power, which includes the authority

We come now to the issue of whether petitioner is estopped from

of the courts to determine in an appropriate action the validity of the acts of

assailing the authority of the Commissioner of Internal Revenue. Fortune

the political departments. Judicial power includes the duty of the courts of

Tobacco raises this objection by pointing out that when petitioner requested

justice to settle actual controversies involving rights which are legally

the Commissioner for a ruling that its Lucky Strike Soft Pack cigarettes was a

demandable and enforceable, and to determine whether or not there has been

new brand rather than a variant of an existing brand, and thus subject to a

a grave abuse of discretion amounting to lack or excess of jurisdiction on the

lower specific tax rate, petitioner executed an undertaking to comply with the

part of any branch or instrumentality of the Government.

[26]

procedures under existing regulations for the assessment of deficiency internal

revenue taxes.

In Drilon v. Lim,

[27]

it was held:

We stress at the outset that the lower court had

jurisdiction to consider the constitutionality of Section 187,
this authority being embraced in the general definition of the
judicial power to determine what are the valid and binding
laws by the criterion of their conformity to the fundamental
law. Specifically, B.P. 129 vests in the regional trial courts
jurisdiction over all civil cases in which the subject of the
litigation is incapable of pecuniary estimation, even as the
accused in a criminal action has the right to question in his
defense the constitutionality of a law he is charged with
violating and of the proceedings taken against him,
particularly as they contravene the Bill of Rights. Moreover,
Article X, Section 5(2), of the Constitution vests in the
Supreme Court appellate jurisdiction over final judgments
and orders of lower courts in all cases in which the
constitutionality or validity of any treaty, international or
executive agreement, law, presidential decree, proclamation,
order, instruction, ordinance, or regulation is in question.

Fortune Tobacco argues that petitioner, after invoking the authority of

the Commissioner of Internal Revenue, cannot later on turn around when the
ruling is adverse to it.
Estoppel, an equitable principle rooted in natural justice, prevents
persons from going back on their own acts and representations, to the
prejudice of others who have relied on them.

[29]

The principle is codified in

Article 1431 of the Civil Code, which provides:

Through estoppel, an admission or representation is
rendered conclusive upon the person making it and cannot be
denied or disproved as against the person relying thereon.
Estoppel can also be found in Rule 131, Section 2 (a) of the Rules of
Court, viz:
Sec. 2. Conclusive presumptions. The following are
instances of conclusive presumptions:

The petition for injunction filed by petitioner before the RTC is a direct
attack on the constitutionality of Section 145(C) of the NIRC, as amended, and
the validity of its implementing rules and regulations. In fact, the RTC limited
the resolution of the subject case to the issue of the constitutionality of the

(a) Whenever a party has by his own declaration, act

or omission, intentionally and deliberately led another to
believe a particular thing true, and to act upon such belief, he

cannot, in any litigation arising out of such declaration, act or

omission be permitted to falsify it.

To place this case in its proper context, we deem it necessary to first

discuss how the assailed law operates in order to identify, with precision, the
specific provisions which, according to petitioner, have created a grossly

The elements of estoppel are: first, the actor who usually must have

discriminatory classification scheme between old and new brands. The

knowledge, notice or suspicion of the true facts, communicates something to

pertinent portions of RA 8240, as amended by RA 9334, are reproduced below

another in a misleading way, either by words, conduct or silence; second, the

for ready reference:

other in fact relies, and relies reasonably or justifiably, upon that

communication; third, the other would be harmed materially if the actor is
later permitted to assert any claim inconsistent with his earlier conduct;

SEC. 145. Cigars and Cigarettes.

xxxx

and fourth, the actor knows, expects or foresees that the other would act upon
the information given or that a reasonable person in the actor's position would
expect or foresee such action.

[30]

In the early case of Kalalo v. Luz,

[31]

the elements of estoppel, as

related to the party to be estopped, are: (1) conduct amounting to false

representation or concealment of material facts; or at least calculated to
convey the impression that the facts are other than, and inconsistent with,
those which the party subsequently attempts to assert; (2) intent,or at least

(C) Cigarettes Packed by Machine. There shall be

levied, assessed and collected on cigarettes packed by
machine a tax at the rates prescribed below:
(1) If the net retail price (excluding the excise tax and
the value-added tax) is below Five pesos (P5.00) per pack, the
tax shall be:
Effective on January 1, 2005, Two
pesos (P2.00) per pack;

expectation that this conduct shall be acted upon by, or at least influence, the
other party; and (3) knowledge, actual or constructive, of the real facts.
We find that petitioner was not guilty of estoppel. When it made the
undertaking to comply with all issuances of the BIR, which at that time it
considered as valid, petitioner did not commit any false misrepresentation or
misleading act. Indeed, petitioner cannot be faulted for initially undertaking to
comply with, and subjecting itself to the operation of Section 145(C), and only
later on filing the subject case praying for the declaration of its
unconstitutionality when the circumstances change and the law results in what
it perceives to be unlawful discrimination. The mere fact that a law has been
relied upon in the past and all that time has not been attacked as
unconstitutional is not a ground for considering petitioner estopped from

Effective on January 1, 2007, Two

pesos and twenty-three centavos
(P2.23) per pack;
Effective on January 1, 2009, Two
pesos and forty-seven centavos
(P2.47) per pack; and
Effective on January 1, 2011, Two
pesos and seventy-two centavos
(P2.72) per pack.
(2) If the net retail price (excluding the excise tax and the
value-added tax) is Five pesos (P5.00) but does not exceed Six
pesos and fifty centavos (P6.50) per pack, the tax shall be:

assailing its validity. For courts will pass upon a constitutional question only
when presented before it in bona fide cases for determination, and the fact
that the question has not been raised before is not a valid reason for refusing
to allow it to be raised later.

[32]

Now to the substantive issues.

Effective on January 1, 2005, Six

pesos and thirty-five centavos
(P6.35) per pack;
Effective on January 1, 2007, Six
pesos and seventy-four centavos
(P6.74) per pack;

Effective on January 1, 2011,

Twenty-eight pesos and thirty
centavos (P28.30) per pack.

Effective on January 1, 2009, Seven

pesos and fourteen centavos
(P7.14) per pack; and
xxxx
Effective on January 1, 2011, Seven
pesos and fifty-six centavos (P7.56)
per pack.
(3) If the net retail price (excluding the excise tax and
the value-added tax) exceeds Six pesos and fifty centavos
(P6.50) but does not exceed Ten pesos (P10.00) per pack, the
tax shall be:
Effective on January 1, 2005, Ten
pesos and thirty-five centavos
(10.35) per pack;
Effective on January 1, 2007, Ten
pesos and eighty-eight centavos
(P10.88) per pack;
Effective on January 1, 2009,
Eleven pesos and forty-three
centavos (P11.43) per pack; and
Effective on January 1, 2011,
Twelve pesos (P12.00) per pack.
(4) If the net retail price (excluding the excise tax and
the value-added tax) is above Ten pesos (P10.00) per pack,
the tax shall be:
Effective on January 1, 2005,
Twenty-five pesos (P25.00) per
pack;
Effective on January 1, 2007,
Twenty-six pesos and six centavos
(P26.06) per pack;
Effective on January 1, 2009,
Twenty-seven pesos and sixteen
centavos (P27.16) per pack; and

New brands, as defined in the immediately following

paragraph, shall initially be classified according to their
suggested net retail price.
New brands shall mean a brand registered after the date of
effectivity of R.A. No. 8240.
Suggested net retail price shall mean the net retail price at
which new brands, as defined above, of locally manufactured
or imported cigarettes are intended by the manufacturer or
importer to be sold on retail in major supermarkets or retail
outlets in Metro Manila for those marketed nationwide, and
in other regions, for those with regional markets. At the end
of three (3) months from the product launch, the Bureau of
Internal Revenue shall validate the suggested net retail price
of the new brand against the net retail price as defined herein
and determine the correct tax bracket under which a
particular new brand of cigarette, as defined above, shall be
classified. After the end of eighteen (18) months from such
validation, the Bureau of Internal Revenue shall revalidate the
initially validated net retail price against the net retail price as
of the time of revalidation in order to finally determine the
correct tax bracket under which a particular new brand of
cigarettes shall be classified; Provided however, That brands
of cigarettes introduced in the domestic market between
January 1, 1997 [should be January 2, 1997] and December
31, 2003 shall remain in the classification under which the
Bureau of Internal Revenue has determined them to belong
as of December 31, 2003. Such classification of new brands
and
brands
introduced
between January
1,
1997 and December 31, 2003 shall not be revised except by
an act of Congress.
Net retail price, as determined by the Bureau of Internal
Revenue through a price survey to be conducted by the
Bureau of Internal Revenue itself, or the National Statistics
Office when deputized for the purpose by the Bureau of
Internal Revenue, shall mean the price at which the cigarette
is sold in retail in at least twenty (20) major supermarkets in
Metro Manila (for brands of cigarettes marketed nationally),
excluding the amount intended to cover the applicable excise

tax and the value-added tax. For brands which are marketed
only outside Metro Manila, the net retail price shall mean the
price at which the cigarette is sold in at least five (5) major
supermarkets in the region excluding the amount intended to
cover the applicable excise tax and value-added tax.

Petitioner claims that this is what happened in 2004 to the Marlboro and Philip
Morris brands, which were permanently classified under Annex D. As of
October 1, 1996, Marlboro had net retail prices ranging from P6.78 to P6.84
while Philip Morris had net retail prices ranging from P7.39 to P7.48. Thus,

The classification of each brand of cigarettes based on its

average net retail price as of October 1, 1996, as set forth in
Annex D, including the classification of brands for the same
products which, although not set forth in said Annex D, were
registered and were being commercially produced and
marketed on or after October 1, 1996, and which continue to
be commercially produced and marketed after the effectivity
of this Act, shall remain in force until revised by Congress.
As can be seen, the law creates a four-tiered system which we may
refer to as the low-priced,
priced

[36]

[33]

medium-priced,

[34]

high-priced,

[35]

and premium-

tax brackets. When a brand is introduced in the market, the current

net retail price is determined through the aforequoted specified procedure.

The current net retail price is then used to classify under which tax bracket the
brand belongs in order to finally determine the corresponding excise tax rate
on a per pack basis. The assailed feature of this law pertains to the mechanism
where, after a brand is classified based on its current net retail price, the
classification is frozen and only Congress can thereafter reclassify the
same. From a practical point of view, Annex D is merely a by-product of the
whole mechanism and philosophy of the assailed law. That is, the brands under
Annex D were also classified based on their current net retail price, the only
difference being that they were the first ones so classified since they were the
only brands surveyed as of October 1, 1996, or prior to the effectivity of RA
8240 on January 1, 1997.

under Annex D or a new brand classified after the effectivity of RA 8240 on

January 1, 1997, would increase (due to inflation, increase of production costs,
manufacturers decision to increase its prices, etc.) to a point that its net retail
classified.

[38]

the

Marlboro and Philip Morris were classified under the

high-priced tax bracket and subjected to an excise tax rate of P8.96 per
pack. Petitioner then presented evidence showing that after the lapse of about
seven years or sometime in 2004, Marlboros and Philip Morris net retail prices
per pack both increased to about P15.59.

[40]

This meant that they would fall

under the premium-priced tax bracket, with a higher excise tax rate of P13.44
per pack,

[41]

had they been classified based on their 2004 net retail

prices. However, due to the legislative classification freeze, they continued to

be classified under the high-priced tax bracket with a lower excise tax
rate. Petitioner thereafter deplores the fact that its Lucky Strike Filter, Lucky
Strike Lights, and Lucky Strike Menthol Lights cigarettes, introduced in the
market sometime in 2001 and validated by a BIR survey in 2003, were found to
have net retail prices of P11.53, P11.59 and P10.34,

[42]

respectively, which are

lower than those of Marlboro and Philip Morris. However, since petitioners
cigarettes were newly introduced brands in the market, they were taxed based
on their current net retail prices and, thus, fall under the premium-priced tax
bracket with a higher excise tax rate of P13.44 per pack. This unequal tax
treatment between Marlboro and Philip Morris, on the one hand, and Lucky
Strike, on the other, is the crux of petitioners contention that the legislative
classification freeze violates the equal protection and uniformity of taxation
clauses of the Constitution.
It is apparent that, contrary to its assertions, petitioner is not only

time the net retail price of a previously classified brand, whether it be a brand

pierces

[39]

[37]

Due to this legislative classification scheme, it is possible that over

price

pursuant to RA 8240,

tax

bracket

to

which

it

was

previously

Consequently, even if its present day net retail price would make it

fall under a higher tax bracket, the previously classified brand would continue
to be subject to the excise tax rate under the lower tax bracket by virtue of the
legislative classification freeze.

questioning the undue favoritism accorded to brands under Annex D, but the
entire mechanism and philosophy of the law which freezes the tax classification
of a cigarette brand based on its current net retail price. Stated differently, the
alleged discrimination arising from the legislative classification freeze between
the brands under Annex D and petitioners newly introduced brands
arose only because the former were classified based on their current net retail
price as of October 1, 1996 and petitioners newly introduced brands were
classified based on their current net retail price as of 2003. Without this
corresponding freezing of the classification of petitioners newly introduced
brands based on their current net retail price, it would be impossible to

establish that a disparate tax treatment occurred between the Annex D brands
and petitioners newly introduced brands.
This clarification is significant because, under these circumstances, a
declaration of unconstitutionality would necessarily entail nullifying the whole
mechanism of the law and not just Annex D. Consequently, if the assailed law is
declared unconstitutional on equal protection grounds, the entire method by
which a brand of cigarette is classified would have to be invalidated. As a result,
no method to classify brands under Annex D as well as new brands would be
left behind and the whole Section 145 of the NIRC, as amended, would become
inoperative.

[43]

To simplify the succeeding discussions, we shall refer to the whole

mechanism and philosophy of the assailed law which freezes the tax
classification of a cigarette brand based on its current net retail price and
which, thus, produced different classes of brands based on the time of their
introduction in the market (starting with the brands in Annex D since they were
the first brands so classified as of October 1, 1996) as the classification freeze
provision.

[44]

As thus formulated, the central issue is whether or not the classification freeze
provision violates the equal protection and uniformity of taxation clauses of the
Constitution.
In Sison, Jr. v. Ancheta,

[45]

this Court, through Chief Justice Fernando, explained

imposed. Favoritism and undue preference cannot be

allowed. For the principle is that equal protection and
security shall be given to every person under circumstances,
which if not identical are analogous. If law be looks upon in
terms of burden or charges, those that fall within a class
should be treated in the same fashion, whatever restrictions
cast on some in the group equally binding on the rest." That
same formulation applies as well to taxation measures. The
equal protection clause is, of course, inspired by the noble
concept of approximating the ideal of the laws's benefits
being available to all and the affairs of men being governed
by that serene and impartial uniformity, which is of the very
essence of the idea of law. There is, however, wisdom, as well
as realism, in these words of Justice Frankfurter: "The
equality at which the 'equal protection' clause aims is not a
disembodied equality. The Fourteenth Amendment enjoins
'the equal protection of the laws,' and laws are not abstract
propositions. They do not relate to abstract units A, B and C,
but are expressions of policy arising out of specific difficulties,
addressed to the attainment of specific ends by the use of
specific remedies. The Constitution does not require things
which are different in fact or opinion to be treated in law as
though they were the same." Hence the constant reiteration
of the view that classification if rational in character is
allowable. As a matter of fact, in a leading case of Lutz v.
Araneta, this Court, through Justice J.B.L. Reyes, went so far
as to hold "at any rate, it is inherent in the power to tax that a
state be free to select the subjects of taxation, and it has
been repeatedly held that 'inequalities which result from a
singling out of one particular class for taxation, or exemption
infringe no constitutional limitation.'"

the applicable standard in deciding equal protection and uniformity of taxation

challenges:
Now for equal protection. The applicable standard to
avoid the charge that there is a denial of this constitutional
mandate whether the assailed act is in the exercise of the
police power or the power of eminent domain is to
demonstrate "that the governmental act assailed, far from
being inspired by the attainment of the common weal was
prompted by the spirit of hostility, or at the very least,
discrimination that finds no support in reason. It suffices then
that the laws operate equally and uniformly on all persons
under similar circumstances or that all persons must be
treated in the same manner, the conditions not being
different, both in the privileges conferred and the liabilities

Petitioner likewise invoked the kindred concept of

uniformity. According to the Constitution: "The rule of
taxation shall be uniform and equitable." This requirement is
met according to Justice Laurel in Philippine Trust Company v.
Yatco, decided in 1940, when the tax "operates with the
same force and effect in every place where the subject may
be found." He likewise added: "The rule of uniformity does
not call for perfect uniformity or perfect equality, because
this is hardly attainable." The problem of classification did not
present itself in that case. It did not arise until nine years
later, when the Supreme Court held: "Equality and uniformity
in taxation means that all taxable articles or kinds of property
of the same class shall be taxed at the same rate. The taxing
power has the authority to make reasonable and natural
classifications for purposes of taxation, . . . As clarified by

Justice Tuason, where "the differentiation" complained of

"conforms to the practical dictates of justice and equity" it "is
not discriminatory within the meaning of this clause and is
therefore uniform." There is quite a similarity then to the
standard of equal protection for all that is required is that the
tax "applies equally to all persons, firms and corporations
[46]
placed in similar situation." (Emphasis supplied)

used to classify the brands under Annex D as of October 1, 1996, was thus the

In consonance thereto, we have held that in our jurisdiction, the standard and

mechanism to newer brands was already in place even prior to the

analysis of equal protection challenges in the main have followed the rational

amendments introduced by RA 9334 to RA 8240.) This does not explain,

basis test, coupled with a deferential attitude to legislative classifications and a

however, why the classification is frozen after its determination based on

reluctance to invalidate a law unless there is a showing of a clear and

current net retail price and how this is germane to the purpose of the assailed

unequivocal breach of the Constitution.

[47]

Within the present context of tax

legislation on sin products which neither contains a suspect classification nor

logical and practical choice. Further, with the amendments introduced by RA

9334, the freezing of the tax classifications now expressly applies not just to
Annex D brands but to newer brands introduced after the effectivity of RA 8240
on January 1, 1997 and any new brand that will be introduced in the
future.

[53]

(However, as will be discussed later, the intent to apply the freezing

law. An examination of the legislative history of RA 8240 provides interesting

answers to this question.

impinges on a fundamental right, the rational-basis test thus finds

application. Under this test, a legislative classification, to survive an equal

RA 8240 was the first of three parts in the Comprehensive Tax Reform

protection challenge, must be shown to rationally further a legitimate state

Package then being pushed by the Ramos Administration. It was enacted with

interest.

[48]

The classifications must be reasonable and rest upon some ground

of difference having a fair and substantial relation to the object of the

legislation.

[49]

Ponce Enrile (Senator Enrile), viz:

Since every law has in its favor the presumption of

constitutionality, the burden of proof is on the one attacking the

constitutionality of the law to prove beyond reasonable doubt that the
legislative classification is without rational basis.

[50]

The presumption of

constitutionality can be overcome only by the most explicit demonstration that

a classification is a hostile and oppressive discrimination against particular
persons and classes, and that there is no conceivable basis which might support
it.

the following objectives stated in the Sponsorship Speech of Senator Juan

[51]

A legislative classification that is reasonable does not offend the

First, to evolve a tax structure which will promote

fair competition among the players in the industries
concerned and generate buoyant and stable revenue for the
government.
Second, to ensure that the tax burden is equitably
distributed not only amongst the industries affected but
equally amongst the various levels of our society that are
involved in various markets that are going to be affected by
the excise tax on distilled spirits, fermented liquor, cigars and
cigarettes.

constitutional guaranty of the equal protection of the laws. The classification is

considered valid and reasonable provided that: (1) it rests on substantial
distinctions; (2) it is germane to the purpose of the law; (3) it applies, all things
being equal, to both present and future conditions; and (4) it applies equally to
all those belonging to the same class.

In the case of firms engaged in the industries

producing the products that we are about to tax, this means
relating the tax burden to their market share, not only in
terms of quantity, Mr. President, but in terms of value.

[52]

The first, third and fourth requisites are satisfied. The classification
freeze provision was inserted in the law for reasons of practicality and

In case of consumers, this will mean evolving a multitiered rate structure so that low-priced products are subject
to lower tax rates and higher-priced products are subject to
higher tax rates.

expediency. That is, since a new brand was not yet in existence at the time of
the passage of RA 8240, then Congress needed a uniform mechanism to fix the
tax bracket of a new brand. The current net retail price, similar to what was

Third, to simplify the tax administration and

compliance with the tax laws that are about to unfold in

order to minimize losses arising from inefficiencies and tax

[54]
avoidance scheme, if not outright tax evasion.
In the initial stages of the crafting of the assailed law, the Department of
Finance (DOF) recommended to Congress a shift from the then existing ad
valorem taxation system to a specific taxation system with respect to sin

exceeds three pesos and ninety centavos (P3.90), the tax rate
shall be one peso (P1.00).
Variants of existing brands and new brands of
cigarettes packed by machine to be introduced in the
domestic market after the effectivity of this Act, shall be
taxed under paragraph (c)(1) hereof.

products, including cigarettes. The DOF noted that the ad valorem taxation
system was a source of massive tax leakages because the taxpayer was able to
evade paying the correct amount of taxes through the undervaluation of the
price of cigarettes using various marketing arms and dummy corporations. In
order to address this problem, the DOF proposed a specific taxation system
where the cigarettes would be taxed based on volume or on a per pack basis
which was believed to be less susceptible to price manipulation. The reason
was that the BIR would only need to monitor the sales volume of cigarettes,
from which it could easily compute the corresponding tax liability of cigarette
manufacturers. Thus, the DOF suggested the use of a three-tiered system
which operates in substantially the same manner as the four-tiered system
under RA 8240 as earlier discussed. The proposal of the DOF was embodied in
House Bill (H.B.) No. 6060, the pertinent portions of which states
SEC. 142. Cigars and cigarettes.
(c) Cigarettes packed by machine. There shall be
levied, assessed and collected on cigarettes packed by
machine a tax at the rates prescribed below:
(1) If the manufacturers or importers wholesale price
(net of excise tax and value-added tax) per pack exceeds four
pesos and twenty centavos (P4.20), the tax shall be seven
pesos and fifty centavos (P7.50);

The rates of specific tax on cigars and cigarettes

under paragraphs (a), (b), and (c) hereof, including the price
levels for purposes of classifying cigarettes packed by
machine, shall be revised upward two (2) years after the
effectivity of this Act and every two years thereafter by the
Commissioner of Internal Revenue, subject to the approval
of the Secretary of Finance, taking into account the
movement of the consumer price index for cigars and
cigarettes as established by the National Statistics
Office: provided, that the increase in taxes and/or price
levels shall be equal to the present change in such consumer
price index for the two-year period: provided, further, that
the President, upon the recommendation of the Secretary of
Finance, may suspend or defer the adjustment in price levels
and tax rates when the interest of the national economy
and general welfare so require, such as the need to obviate
unemployment,
and
economic
and
social
dislocation: provided, finally, that the revised price levels
and tax rates authorized herein shall in all cases be rounded
off to the nearest centavo and shall be in force and effect on
the date of publication thereof in a newspaper of general
circulation. x x x (Emphasis supplied)
What is of particular interest with respect to the proposal of the DOF
is that it contained a provision for the periodic adjustment of the excise tax
rates and tax brackets, and a corresponding periodic resurvey and

(2) If the manufacturers or importers wholesale price

(net of excise tax and value-added tax) per pack exceeds
three pesos and ninety centavos (P3.90) but does not exceed
four pesos and twenty centavos (P4.20), the tax shall be five
pesos and fifty centavos (P5.50): provided, that after two (2)
years from the effectivity of this Act, cigarettes otherwise
subject to tax under this subparagraph shall be taxed under
subparagraph (1) above.

reclassification of cigarette brands based on the increase in the consumer price

(3) If the manufacturers or importers wholesale price

(net of excise tax and value-added tax) per pack does not

based on their respective values at the end of every two years in order to align

index as determined by the Commissioner of Internal Revenue subject to

certain guidelines. The evident intent was to prevent inflation from eroding the
value of the excise taxes that would be collected from cigarettes over time by
adjusting the tax rate and tax brackets based on the increase in the consumer
price index. Further, under this proposal, old brands as well as new brands
introduced thereafter would be subjected to a resurvey and reclassification

them with the adjustment of the excise tax rate and tax brackets due to the
movement in the consumer price index.

[55]

Of course, we now know that the DOF proposal, insofar as the periodic
adjustment of tax rates and tax brackets, and the periodic resurvey and
reclassification of cigarette brands are concerned, did not gain approval from
Congress. The House and Senate pushed through with their own versions of the
excise tax system on beers and cigarettes both denominated as H.B. No.
7198. For convenience, we shall refer to the bill deliberated upon by the House
as the House Version and that of the Senate as the Senate Version.
The Houses Committee on Ways and Means, then chaired by Congressman
Exequiel B. Javier (Congressman Javier), roundly rejected the DOF
proposal. Instead, in its Committee Report submitted to the plenary, it
proposed a different excise tax system which used a specific tax as a basic tax
with an ad valorem comparator. Further, it deleted the proposal to have a
periodic adjustment of tax rates and the tax brackets as well as periodic
resurvey and reclassification of cigarette brands, to wit:
The rigidity of the specific tax system calls for the need for
frequent congressional intervention to adjust the tax rates to
inflation and to keep pace with the expanding needs of
government for more revenues. The DOF admits this flaw
inherent in the tax system it proposed. Hence, to obviate the
need for remedial legislation, the DOF is asking Congress to
grant to the Commissioner the power to revise, one, the
specific tax rates: and two, the price levels of beer and
cigarettes. What the DOF is asking, Mr. Speaker, is for
Congress to delegate to the Commissioner of Internal
Revenue the power to fix the tax rates and classify the
subjects of taxation based on their price levels for purposes
of fixing the tax rates. While we sympathize with the
predicament of the DOF, it is not for Congress to abdicate
such power. The power sought to be delegated to be
exercised by the Commissioner of Internal Revenue is a
legislative power vested by the Constitution in Congress
pursuant to Section 1, Article VI of the Constitution. Where
the power is vested, there it must remain in Congress, a body
of representatives elected by the people. Congress may not
delegate such power, much less abdicate it.
xxxx

Moreover, the grant of such power, if at all

constitutionally permissible, to the Commissioner of Internal
Revenue is fraught with ethical implications. The debates on
how much revenue will be raised, how much money will be
taken from the pockets of taxpayers, will inexorably shift
from the democratic Halls of Congress to the secret and nontransparent corridors of unelected agencies of government,
the Department of Finance and the Bureau of Internal
Revenue, which are not accountable to our people. We
cannot countenance the shift for ethical reasons, lest we be
accused of betraying the trust reposed on this Chamber by
the people. x x x
A final point on this proposal, Mr. Speaker, is the
exercise of the taxing power of the Commissioner of Internal
Revenue which will be triggered by inflation rates based on
the consumer price index. Simply stated, Mr. Speaker, the
specific tax rates will be fixed by the Commissioner
depending on the price levels of beers and cigarettes as
determined by the consumers price index. This is a novel
idea, if not necessarily weird in the field of taxation. What if
the brewer or the cigarette manufacturer sells at a price
below the consumers price index? Will it be taxed on the
basis of the consumers price index which is over and above its
wholesale or retail price as the case may be? This is a weird
form of exaction where the tax is based not on what the
brewer or manufacturer actually realized but on an imaginary
wholesale or retail price. This amounts to a taxation based on
presumptive price levels and renders the specific tax a
presumptive tax. We hope, the DOF and the BIR will also
honor a presumptive tax payment.
Moreover, specific tax rates based on price levels
tied to consumers price index as proposed by the DOF
engenders anti-trust concerns. The proposal if enacted into
law will serve as a barrier to the entry of new players in the
beer and cigarette industries which are presently dominated
by shared monopolies. A new player in these industries will
be denied business flexibility to fix its price levels to promote
its product and penetrate the market as the price levels are
dictated by the consumer price index. The proposed tax
regime, Mr. Speaker, will merely enhance the stranglehold of
the oligopolies in the beer and cigarette industries, thus,
reversing the governments policy of dismantling monopolies
[56]
and combinations in restraint of trade.

For its part, the Senates Committee on Ways and Means, then chaired
by Senator Juan Ponce Enrile (Senator Enrile), developed its own version of the
excise tax system on cigarettes. The Senate Version consisted of a four-tiered

Act shall be taxed under the highest classification of any

variant of that brand.
xxx

system and, interestingly enough, contained a periodic excise tax rate and tax
bracket adjustment as well as a periodic resurvey and reclassification of brands
provision (periodic adjustment and reclassification provision, for brevity) to be
conducted by the DOF in coordination with the BIR and the National Statistics
Office based on the increase in the consumer price index similar to the one
proposed by the DOF, viz:
SEC. 4 Section 142 of the National Internal Revenue
Code, as amended, is hereby further amended to read as
follows:
SEC. 142. Cigars and cigarettes.
xxxx
(c) Cigarettes packed by machine. There shall be levied,
assessed and collected on cigarettes packed by machine a tax
at the rates prescribed below:
(1) If the net retail price (excluding the
excise tax and the value-added tax) is above
Ten pesos (P10.00) per pack, the tax shall
be Twelve pesos (P12.00) per pack;
(2) If the net retail price (excluding the
excise tax and the value-added tax) exceeds
Six pesos and fifty centavos (P6.50) per
pack, the tax shall be Eight pesos (P8.00)
per pack;
(3) If the net retail price (excluding
the excise tax and the value-added tax) is
Five pesos (P5.00) up to Six pesos and fifty
centavos (P6.50) per pack, the tax shall be
Five pesos (P5.00) per pack;
(4) If the net retail price (excluding
the excise tax and the value-added tax) is
below Five pesos (P5.00) per pack, the tax
shall be One peso (P1.00) per pack.
Variants of existing brands of cigarettes which are
introduced in the domestic market after the effectivity of this

The rates of specific tax on cigars and cigarettes

under subparagraph (a), (b) and (c) hereof, including the net
retail prices for purposes of classification, shall be adjusted
on the sixth of January three years after the effectivity of
this Act and every three years thereafter. The adjustment
shall be in accordance with the inflation rate measured by
the average increase in the consumer price index over the
three-year period. The adjusted tax rates and net price
levels shall be in force on the eighth of January.
Within the period hereinabove mentioned, the
Secretary of Finance shall direct the conduct of a survey of
retail prices of each brand of cigarettes in coordination with
the Bureau of Internal Revenue and the National Statistics
Office.
For purposes of this Section, net retail price shall
mean the price at which the cigarette is sold on retail in 20
major supermarkets in Metro Manila (for brands of cigarettes
marketed nationally), excluding the amount intended to
cover the applicable excise tax and the value-added tax. For
brands which are marketed only outside Metro Manila, the
net retail price shall mean the price at which the cigarette is
sold in five major supermarkets in the region excluding the
amount intended to cover the applicable excise tax and the
value-added tax.
The classification of each brand of cigarettes in the
initial year of implementation of this Act shall be based on
its average net retail price as of October 1, 1996. The said
classification by brand shall remain in force until January 7,
2000.
New brands shall be classified according to their
[57]
current net retail price. (Emphasis supplied)
During the period of interpellations, the late Senator Raul S. Roco
(Senator Roco) expressed doubts as to the legality and wisdom of putting a
periodic adjustment and reclassification provision:
Senator Enrile: This will be the first time that a tax
burden will be allowed to be automatically adjusted upwards

based on a system of indexing tied up with the Consumers

Price Index (CPI). Although I must add that we have adopted a
similar system in adjusting the personal tax exemption from
income tax of our individual taxpayers.
Senator Roco: They are not exactly the same, Mr. President.
But even then, we do note that this the first time we are
trying to put an automatic adjustment. My concern is, why do
we propose now this automatic adjustment? What is the
reason that impels the committee? Maybe we can be
enlightened and maybe we shall embrace it forthwith. But
what is the reason?
Senator Enrile: Mr. President, we will recall that in
the House of Representatives, it has adopted a tax proposal
on these products based on a specific tax as a basic tax with
an ad valorem comparator. The Committee on Ways and
Means of the Senate has not seen it fit to adopt this system,
but it recognized the possibility that there may be an
occasion where the price movement in the country might
unwarrantedly move upwards, in which case, if we peg the
government to a specific tax rate of P6.30, P9.30 and P12.30
[58]
for beer, since we are talking of beer, the government
might lose in the process.
In order to consider the interest of the government
in this, Mr. President, and in order to obviate the possibility
that some of these products categorized under the different
tiers with different specific tax rates from moving upwards
and piercing their own tiers and thereby expose themselves
to an incremental tax of higher magnitude, it was felt that we
should adopt a system where, in spite of any escalation in the
price of these products in the future, the tax rates could be
adjusted upwards so that none of these products would leave
their own tier. That was the basic principle under which we
crafted this portion of the tax proposal.
Senator Roco: Mr. President, we certainly share the judgment
of the distinguished gentleman as regards the comparator
provision in the House of Representatives and we appreciate
the reasons given. But we are under the impression that the
House also, aside from the comparator, has an adjustment
clause that is fixed. It has fixed rates for the adjustment. So
that one of the basic differences between the Senate
proposed version now and the House version is that, the
House of Representatives has manifested its will and
judgment as regards the tax to which we will adjust, whereas

the Senate version relegates fundamentally that judgment to

the Department of Finance.
Senator Enrile: That is correct, Mr. President, because we felt
that in imposing a fixed adjustment, we might be fixing an
amount that is either too high or too low. We cannot foresee
the economic trends in this country over a period of two
years, three years, let alone ten years. So we felt that a
mechanism ought to be adopted in order to serve the interest
of the government, the interest of the producers, and the
interest of the consuming public.
Senator Roco: This is where, Mr. President, my policy
difficulties start. Under the Constitution I think it is Article VI,
Section 24, and it was the distinguished chairman of the
Committee on Ways and Means who made this Chamber very
conscious of this provision revenue measures and tariff
measures shall originate exclusively from the House of
Representatives.
The reason for this, Mr. President, is, there is a long history
why the House of Representatives must originate judgments
on tax. The House members represent specific districts. They
represent specific constituencies, and the whole history of
parliamentarism, the whole history of Congress as an
institution is founded on the proposition that the direct
representatives of the people must speak about taxes.
Mr. President, while the Senate can concur and can introduce
amendments, the proposed change here is radical. This is the
policy difficulty that I wish to clarify with the gentleman
because the judgment call now on the amount of tax to be
imposed is not coming from Congress. It is shifted to the
Department of Finance. True, the Secretary of Finance may
have been the best finance officer two years ago and now the
best finance officer in Asia, but that does not make him
qualified to replace the judgment call of the House of
Representatives. That is my first difficulty.
Senator Enrile: Mr. President, precisely the law, in effect,
authorizes this rate beforehand. The computation of the rate
is the only thing that was left to the Department of Finance as
a tax implementor of Congress. This is not unusual because
we have already, as I said, adopted a system similar to this. If
we adjust the personal exemption of an individual taxpayer,
we are in effect adjusting the applicable tax rate to him.

Senator Roco: But the point I was trying to

demonstrate, Mr. President, is that we depart precisely from
the mandate of the Constitution that judgment on revenue
must emanate from Congress. Here, it is shifted to the
Department of Finance for no visible or patent reason insofar
as I could understand. The only difference is, who will make
the judgment? Should it be Congress?
Senator Enrile: Mr. President, forgive me for
answering sooner than I should. My understanding of the
Constitution is that all revenue measures must emanate from
the House. That is all the Constitution says.

Finance shall direct the conduct of survey of retail prices of

each brand of fermented liquor in coordination with the
Bureau of Internal Revenue and the National Statistics Office.
These offices are not exactly noted, Mr. President, for having
been sanctified by the Holy Spirit in their noble intentions. x x
[60]
x (Emphasis supplied)
Pressing this point, Senator Roco continued his query:
Senator Roco: x x x [On page 8, lines 5 to 9] it says
that during the two-year period, the Secretary of Finance
shall direct the conduct of the survey. How? When? Which
retail prices and what brand shall he consider? When he
coordinates with the Bureau of Internal Revenue, what is the
Bureau of Internal Revenue supposed to be doing? What is
the National Statistics Office supposed to be doing, and under
what guides and standards?

Now, it does not say that the judgment call must belong to
the House. The judgment call can belong both to the House
and to the Senate. We can change whatever proposal the
House did. Precisely, we are now crafting a measure, and we
are saying that this is the rate subject to an adjustment which
we also provide. We are not giving any unusual power to the
Secretary of Finance because we tell him, This is the formula
that you must adopt in arriving at the adjustment so that you
[59]
do not have to come back to us.

May the gentleman wish to demonstrate how this will be

done? My point, Mr. President, is, by giving the Secretary of
Finance, the BIR and the National Statistics Office discretion
over a two-year period will invite corruption and
arbitrariness, which is more dangerous than letting the
House of Representatives and this Chamber set the
adjustment rate. Why not set the adjustment rate? Why
should Congress not exercise that judgment now? x x x

Apart from his doubts as to the legality of the delegation of taxing

power to the DOF and BIR, Senator Roco also voiced out his concern about the
possible abuse and corruption that will arise from the periodic adjustment and
reclassification provision. Continuing
Senator Roco: Mr. President, if that is the argument, that the
distinguished gentleman has a different legal interpretation,
we will then now examine the choice. Because his legal
interpretation is different from mine, then the issues
becomes: Is it more advantageous that this judgment be
exercised by the House? Should we not concur or modify in
terms of the exercise by the House of its power or are we
better off giving this judgment call to the Department of
Finance?
Let me now submit, Mr. President, that in so doing, it is
more advantageous to fix the rate so that even if we modify
the rates identified by Congress, it is better and less
susceptible to abuse.
For instance, Mr. President, would the gentlemen wish to
demonstrate to us how this will be done? On page 8, lines 5
to 9, there is a provision here as to when the Secretary of

Senator Enrile: x x x
Senator Roco: x x x We respectfully submit that the
Chairman consider choosing the judgment of this Chamber
and the House of Representatives over a delegated judgment
of the Department of Finance.
Again, it is not to say that I do not trust the Department of
Finance. It has won awards, and I also trust the
undersecretary. But that is beside the point. Tomorrow, they
[61]
may not be there. (Emphasis supplied)

This point was further dissected by the two senators. There was a
genuine difference of opinion as to which system one with a fixed excise tax
rate and classification or the other with a periodic adjustment of excise tax rate
and reclassification was less susceptible to abuse, as the following exchanges
show:

Senator Enrile: Mr. President, considering the

sensitivity of these products from the viewpoint of exerted
pressures because of the understandable impact of this
measure on the pockets of the major players producing these
products, the committee felt that perhaps to lessen such
pressures, it is best that we now establish a norm where the
tax will be adjusted without incurring too much political
controversy as has happened in the case of this proposal.
Senator Roco: But that is exactly the same reason we
say we must rely upon Congress because Congress, if it is
subjected to pressure, at least balances off because of
political factors.
When the Secretary of Finance is now subjected to
pressure, are we saying that the Secretary of Finance and the
Department of Finance is better-suited to withstand the
pressure? Or are we saying Let the Finance Secretary decide
whom to yield?
I am saying that the temptation and the pressure on
the Secretary of Finance is more dangerous and more
corruption-friendly than ascertaining for ourselves now a
fixed rate of increase for a fixed period.
Senator Enrile: Mr. President, perhaps the
gentleman may not agree with this representation, but in my
humble opinion, this formulation is less susceptible to
pressure because there is a definite point of reference which
is the consumer price index, and that consumer price index is
not going to be used only for this purpose. The CPI is used for
a national purpose, and there is less possibility of tinkering
[62]
with it.
Further, Senator Roco, like Congressman Javier, expressed the view
that the periodic adjustment and reclassification provision would create an
anti-competitive atmosphere. Again, Senators Roco and Enrile had genuine
divergence of opinions on this matter, to wit:
Senator Roco: x x x On the marketing level, an
adjustment clause may, in fact, be disadvantageous to both
companies, whether it is the Lucio Tan companies or the San
Miguel companies. If we have to adjust our marketing
position every two years based on the adjustment clause, the
established company may survive, but the new ones will have

tremendous difficulty. Therefore, this provision tends to

indicate an anticompetitive bias.
It is good for San Miguel and the Lucio Tan companies, but
the new companies assuming there may be new companies
and we want to encourage them because of the old point of
liberalization will be at a disadvantage under this situation. If
this observation will find receptivity in the policy
consideration of the distinguished Gentleman, maybe we can
also further, later on, seek amendments to this automatic
adjustment clause in some manner.
Senator Enrile: Mr. President, I cannot foresee any anticompetitiveness of this provision with respect to a new
entrant, because a new entrant will not just come in without
studying the market. He is a lousy businessman if he will just
come in without studying the market. If he comes in, he will
determine at what retail price level he will market his
product, and he will be coming under any of the tiers
depending upon his net retail price. Therefore, I do not see
how this particular provision will affect a new entrant.
Senator Roco: Be that as it may, Mr. President, we obviously
will not resort to debate until this evening, and we will have
to look for other ways of resolving the policy options.
Let me just close that particular area of my interpellation, by
summarizing the points we were hoping could be clarified.
1. That the automatic adjustment clause is at best
questionable in law.
2. It is corruption-friendly in the sense that it shifts
the discretion from the House of Representatives
and this Chamber to the Secretary of Finance, no
matter how saintly he may be.
3. There is, although the judgment call of the
gentleman disagrees to our view, an anticompetitive
[63]
situation that is geared at
After these lengthy exchanges, it appears that the views of Senator Enrile were
sustained by the Senate Body because the Senate Version was passed on Third
Reading without substantially altering the periodic adjustment and
reclassification provision.

It was actually at the Bicameral Conference Committee level where

the Senate Version underwent major changes. The Senate Panel prevailed upon
the

House

Panel

to

abandon

the

basic

excise

tax

rate

and ad

valorem comparator as the means to determine the applicable excise tax

rate. Thus, the Senates four-tiered system was retained with minor
adjustments as to the excise tax rate per tier. However, the House Panel
prevailed upon the Senate Panel to delete the power of the DOF and BIR to
periodically adjust the excise tax rate and tax brackets, and periodically
resurvey and reclassify the cigarette brands based on the increase in the
consumer price index.

Congressman Javier later added that the frozen classification was

intended to give stability to the industry as the BIR would be prevented from
tinkering with the classification since it would remain unchanged despite the
increase in the net retail prices of the previously classified brands.

[66]

This

would also assure the industry players that there would be no new impositions
as long as the law is unchanged.

[67]

From the foregoing, it is quite evident that the classification freeze

In lieu thereof, the classification of existing brands based on their

average net retail price as of October 1, 1996 was frozen and a fixed acrossthe-board 12% increase in the excise tax rate of each tier after three years from
the effectivity of the Act was put in place. There is a dearth of discussion in the
deliberations as to the applicability of the freezing mechanism to new brands
after their classification is determined based on their current net retail
price. But a plain reading of the text of RA 8240, even before its amendment by
RA 9334, as well as the previously discussed deliberations would readily lead to
the conclusion that the intent of Congress was to likewise apply the freezing
mechanism to new brands. Precisely, Congress rejected the proposal to allow
the DOF and BIR to periodically adjust the excise tax rate and tax brackets as
well as to periodically resurvey and reclassify cigarettes brands which would
have encompassed old and new brands alike. Thus, it would be absurd for us to
conclude that Congress intended to allow the periodic reclassification of new
brands by the BIR after their classification is determined based on their current
net retail price. We shall return to this point when we tackle the second issue.
In explaining the changes made at the Bicameral Conference
Committee level, Senator Enrile, in his report to the Senate plenary, noted that
the fixing of the excise tax rates was done to avoid confusion.

Secretary of Finance the power to fix the rates and to

[65]
classify the products for tax purposes. (Emphasis supplied)

[64]

Congressman

Javier, for his part, reported to the House plenary the reasons for fixing the
excise tax rate and freezing the classification, thus:
Finally, this twin feature, Mr. Speaker, fixed specific
tax rates and frozen classification, rejects the Senate version
which seeks to abdicate the power of Congress to tax by
pegging the rates as well as the classification of sin products
to consumer price index which practically vests in the

provision could hardly be considered arbitrary, or motivated by a hostile or

oppressive attitude to unduly favor older brands over newer brands. Congress
was unequivocal in its unwillingness to delegate the power to periodically
adjust the excise tax rate and tax brackets as well as to periodically resurvey
and reclassify the cigarette brands based on the increase in the consumer price
index to the DOF and the BIR. Congress doubted the constitutionality of such
delegation of power, and likewise, considered the ethical implications
thereof. Curiously, the classification freeze provision was put in place of the
periodic adjustment and reclassification provision because of the belief that the
latter would foster an anti-competitive atmosphere in the market. Yet, as it is,
this same criticism is being foisted by petitioner upon the classification freeze
provision.
To our mind, the classification freeze provision was in the main the
result of Congresss earnest efforts to improve the efficiency and effectivity of
the tax administration over sin products while trying to balance the same with
other state interests. In particular, the questioned provision addressed
Congresss administrative concerns regarding delegating too much authority to
the DOF and BIR as this will open the tax system to potential areas for abuse
and corruption. Congress may have reasonably conceived that a tax system
which would give the least amount of discretion to the tax implementers would
address the problems of tax avoidance and tax evasion.
To elaborate a little, Congress could have reasonably foreseen that,
under the DOF proposal and the Senate Version, the periodic reclassification of
brands would tempt the cigarette manufacturers to manipulate their price
levels or bribe the tax implementers in order to allow their brands to be

classified at a lower tax bracket even if their net retail prices have already

amount of taxes that a cigarette manufacturer would pay given the trend in its

migrated to a higher tax bracket after the adjustment of the tax brackets to the

sales volume over time. The reason for this is that the previously classified

increase in the consumer price index. Presumably, this could be done when a

cigarette brands would be prevented from moving either upward or downward

resurvey and reclassification is forthcoming. As briefly touched upon in the

their tax brackets despite the changes in their net retail prices in the future

Congressional deliberations, the difference of the excise tax rate between the

and, as a result, the amount of taxes due from them would remain

medium-priced and the high-priced tax brackets under RA 8240, prior to its

predictable. The classification freeze provision would, thus, aid in the revenue

amendment, was P3.36. For a moderately popular brand which sells around

planning of the government.

100 million packs per year, this easily translates to P336,000,000.

[68]

[71]

The

incentive for tax avoidance, if not outright tax evasion, would clearly be

All in all, the classification freeze provision addressed Congresss

present. Then again, the tax implementers may use the power to periodically

administrative concerns in the simplification of tax administration of sin

adjust the tax rate and reclassify the brands as a tool to unduly oppress the

products, elimination of potential areas for abuse and corruption in tax

taxpayer in order for the government to achieve its revenue targets for a given

collection, buoyant and stable revenue generation, and ease of projection of

year.

revenues. Consequently, there can be no denial of the equal protection of the

laws since the rational-basis test is amply satisfied.
Thus, Congress sought to, among others, simplify the whole tax

system for sin products to remove these potential areas of abuse and

Going now to the contention of petitioner that the classification freeze

corruption from both the side of the taxpayer and the government. Without

provision unduly favors older brands over newer brands, we must first

doubt, the classification freeze provision was an integral part of this overall

contextualize the basis of this claim. As previously discussed, the evidence

plan. This is in line with one of the avowed objectives of the assailed law to

presented by the petitioner merely showed that in 2004, Marlboro and Philip

simplify the tax administration and compliance with the tax laws that are about

Morris, on the one hand, and Lucky Strike, on the other, would have been

to unfold in order to minimize losses arising from inefficiencies and tax

taxed at the same rate had the classification freeze provision been not in

avoidance scheme, if not outright tax evasion.

[69]

RA 9334 did not alter

place. But due to the operation of the classification freeze provision, Lucky

this classification freeze provision of RA 8240. On the contrary, Congress

Strike was taxed higher. From here, petitioner generalizes that this differential

affirmed this freezing mechanism by clarifying the wording of the law. We can

tax treatment arising from the classification freeze provision adversely impacts

thus reasonably conclude, as the deliberations on RA 9334 readily show, that

the fairness of the playing field in the industry, particularly, between older and

the administrative concerns in tax administration, which moved Congress to

newer brands. Thus, it is virtually impossible for new brands to enter the

enact the classification freeze provision in RA 8240, were merely continued by

market.

RA 9334. Indeed, administrative concerns may provide a legitimate, rational

basis for legislative classification.

[70]

In the case at bar, these administrative

Petitioner did not, however, clearly demonstrate the exact extent of

concerns in the measurement and collection of excise taxes on sin products are

such impact. It has not been shown that the net retail prices of other older

readily apparent as afore-discussed.

brands previously classified under this classification system have already

pierced their tax brackets, and, if so, how this has affected the overall

Aside from the major concern regarding the elimination of potential

competition in the market. Further, it does not necessarily follow that newer

areas for abuse and corruption from the tax administration of sin products, the

brands cannot compete against older brands because price is not the only

legislative deliberations also show that the classification freeze provision was

factor in the market as there are other factors like consumer preference, brand

intended to generate buoyant and stable revenues for government. With the

loyalty, etc. In other words, even if the newer brands are priced higher due to

frozen tax classifications, the revenue inflow would remain stable and the

the differential tax treatment, it does not mean that they cannot compete in

government would be able to predict with a greater degree of certainty the

the market especially since cigarettes contain addictive ingredients so that a

consumer may be willing to pay a higher price for a particular brand solely due

the enactment of the questioned provision was impelled by an earnest desire

to its unique formulation. It may also be noted that in 2003, the BIR surveyed

to improve the efficiency and effectivity of the tax administration of sin

29 new brands

[72]

that were introduced in the market after the effectivity of RA

products. For as long as the legislative classification is rationally related to

8240 on January 1, 1997, thus negating the sweeping generalization of

furthering some legitimate state interest, as here, the rational-basis test is

petitioner

satisfied and the constitutional challenge is perfunctorily defeated.

that

the classification

freeze

provision has

become

an

insurmountable barrier to the entry of new brands. Verily, where there is a

claim of breach of the due process and equal protection clauses, considering

We do not sit in judgment as a supra-legislature to decide, after a law

that they are not fixed rules but rather broad standards, there is a need for

is passed by Congress, which state interest is superior over another, or which

proof of such persuasive character as would lead to such a conclusion. Absent

method is better suited to achieve one, some or all of the states interests, or

such a showing, the presumption of validity must prevail.

[73]

what these interests should be in the first place. This policy-determining power,
by constitutional fiat, belongs to Congress as it is its function to determine and

Be that as it may, petitioners evidence does suggest that, at least in

balance these interests or choose which ones to pursue. Time and again we

2004, Philip Morris and Marlboro, older brands, would have been taxed at the

have ruled that the judiciary does not settle policy issues. The Court can only

same rate as Lucky Strike, a newer brand, due to certain conditions (i.e., the

declare what the law is and not what the law should be. Under our system of

increase of the older brands net retail prices beyond the tax bracket to which

government, policy issues are within the domain of the political branches of

they were previously classified after the lapse of some time) were it not for

government and of the people themselves as the repository of all state

the classification freeze provision. It may be conceded that this has adversely

power.

affected, to a certain extent, the ability of petitioner to competitively price its

provision, after having been shown to be rationally related to achieve certain

newer brands vis--vis the subject older brands. Thus, to a limited extent, the

legitimate state interests and done in good faith, must, perforce, end our

assailed law seems to derogate one of its avowed objectives, i.e. promoting fair

inquiry.

[74]

Thus, the legislative classification under the classification freeze

competition among the players in the industry. Yet, will this occurrence, by
itself, render the assailed law unconstitutional on equal protection grounds?

Concededly, the finding that the assailed law seems to derogate, to a

limited extent, one of its avowed objectives (i.e. promoting fair competition

We answer in the negative.

among the players in the industry) would suggest that, by Congresss own
standards, the current excise tax system on sin products is imperfect. But,

Whether Congress acted improvidently in derogating, to a limited

certainly, we cannot declare a statute unconstitutional merely because it can

extent, the states interest in promoting fair competition among the players in

be improved or that it does not tend to achieve all of its stated

the industry, while pursuing other state interests regarding the simplification of

objectives.

tax administration of sin products, elimination of potential areas for abuse and

addresses and impacts multiple state interests.

corruption in tax collection, buoyant and stable revenue generation, and ease

breach of constitutional limitations, Congress, owing to its vast experience and

of projection of revenues through the classification freeze provision, and

expertise in the field of taxation, must be given sufficient leeway to formulate

whether the questioned provision is the best means to achieve these state

and experiment with different tax systems to address the complex issues and

interests, necessarily go into the wisdom of the assailed law which we cannot

problems related to tax administration. Whatever imperfections that may

inquire into, much less overrule. The classification freeze provision has not

occur, the same should be addressed to the democratic process to refine and

been shown to be precipitated by a veiled attempt, or hostile attitude on the

evolve a taxation system which ideally will achieve most, if not all, of the states

part of Congress to unduly favor older brands over newer brands. On the

objectives.

contrary, we must reasonably assume, owing to the respect due a co-equal

branch of government and as revealed by the Congressional deliberations, that

[75]

This is especially true for tax legislation which simultaneously

[76]

Absent a clear showing of

In fine, petitioner may have valid reasons to disagree with the policy
decision of Congress and the method by which the latter sought to achieve the

changed through the issuance of an appropriate Revenue

Regulations.

same. But its remedy is with Congress and not this Court. As succinctly
[77]

articulated in Vance v. Bradley:

(2)

The Constitution presumes that, absent some reason to infer

antipathy, even improvident decisions will eventually be
rectified by the democratic process, and that judicial
intervention is generally unwarranted no matter how
unwisely we may think a political branch has acted. Thus, we
will not overturn such a statute unless the varying treatment
of different groups or persons is so unrelated to the
achievement of any combination of legitimate purposes that
we can only conclude that the legislature's actions were
[78]
irrational.

Sections II(1)(b), II(4)(b), II(6), II(7), III (Large Tax Payers

Assistance Division II) II(b) of Revenue Memorandum Order
No. 6-2003, insofar as pertinent to cigarettes packed by
machine, viz:

II. POLICIES AND GUIDELINES

1. The conduct of survey covered by this Order, for
purposes of determining the current retail prices of
new brands of cigarettes and alcohol products
introduced in the market on or after January 1, 1997,
shall be undertaken in the following instances:

We now tackle the second issue.

xxxx
Petitioner asserts that Revenue Regulations No. 1-97, as amended by
Revenue Regulations No. 9-2003, Revenue Regulations No. 22-2003 and
Revenue Memorandum Order No. 6-2003, are invalid insofar as they empower

b. For reclassification of new brands of said excisable

products that were introduced in the market after
January 1, 1997.

the BIR to reclassify or update the classification of new brands of cigarettes

based on their current net retail prices every two years or earlier. It claims that

xxxx

RA 8240, even prior to its amendment by RA 9334, did not authorize the BIR to

4. The determination of the current retail prices of

new brands of the aforesaid excisable products shall
be initiated as follows:

conduct said periodic resurvey and reclassification.

The questioned provisions are found in the following sections of the
assailed issuances:
(1)

nd

Section 4(B)(e)(c), 2 paragraph of Revenue Regulations

No. 1-97, as amended by Section 2 of Revenue Regulations 92003, viz:

For the purpose of establishing or updating the tax

classification of new brands and variant(s) thereof, their
current net retail price shall be reviewed periodically through
the conduct of survey or any other appropriate activity, as
mentioned above, every two (2) years unless earlier ordered
by the Commissioner. However, notwithstanding any increase
in the current net retail price, the tax classification of such
new brands shall remain in force until the same is altered or

xxxx
b. After the lapse of the prescribed two-year period
or as the Commissioner may otherwise direct, the
appropriate tax reclassification of these brands
based on the current net retail prices thereof shall
be determined by a survey to be conducted upon a
written directive by the Commissioner.
For this purpose, a memorandum order to
the Assistant Commissioner, Large Taxpayers
Service, Heads, Excise Tax Areas, and Regional
Directors of all Revenue Regions, except Revenue
Region Nos. 4, 5, 6, 7, 8 and 9, shall be issued by the
Commissioner for the submission of the list of major
supermarkets/retail outlets where the above

excisable products are being sold, as well as the list

of selected revenue officers who shall be designated
to conduct the said activity(ies).

be conducted, and the personnel selected to

conduct the survey.
xxxx

xxxx
b. On the tax reclassification of new brands
6. The results of the survey conducted in Revenue
Region Nos. 4 to 9 shall be submitted directly to the
Chief, LT Assistance Division II (LTAD II), National
Office for consolidation. On the other hand, the
results of the survey conducted in Revenue Regions
other than Revenue Region Nos. 4 to 9, shall be
submitted to the Office of the Regional Director for
regional consolidation. The consolidated regional
survey, together with the accomplished survey forms
shall be transmitted to the Chief, LTAD II for national
consolidation within three (3) days from date of
actual receipt from the survey teams. The LTAD II
shall be responsible for the evaluation and analysis
of the submitted survey forms and the preparation
of the recommendation for the updating/revision of
the tax classification of each brand of cigarettes and
alcohol products. The said recommendation, duly
validated by the ACIR, LTS, shall be submitted to the
Commissioner for final review within ten (10) days
from the date of actual receipt of complete reports
from all the surveying Offices.
7. Upon final review by the Commissioner of the
revised tax classification of the different new brands
of cigarettes and alcohol products, the appropriate
revenue regulations shall be prepared and submitted
for approval by the Secretary of Finance.
xxxx
III. PROCEDURES

i. Submit a master list of registered brands

covered by the survey pursuant to the provisions of
Item II.2 of this Order containing the complete
description of each brand, existing net retail price
and the corresponding tax rate thereof.
ii. Submit to the ACIR, LTS, a list of major
supermarkets/retail outlets within the territorial
jurisdiction of the concerned revenue regions where
the survey will be conducted to be used as basis in
the issuance of Mission Orders. Ensure that the
minimum number of establishments to be surveyed,
as prescribed under existing revenue laws and
regulations, is complied with. In addition, the names
and designations of revenue officers selected to
conduct the survey shall be clearly indicated
opposite the names of the establishments to be
surveyed.

There is merit to the contention.

In order to implement RA 8240 following its effectivity on January 1,
1997, the BIR issued Revenue Regulations No. 1-97, dated December 13, 1996,
which mandates a one-time classification only.

[79]

Upon their launch, new

brands shall be initially taxed based on their suggested net retail

price. Thereafter, a survey shall be conducted within three (3) months to
determine their current net retail prices and, thus, fix their official tax
classifications. However, the BIR made a turnaround by issuing Revenue

xxxx

Regulations No. 9-2003, dated February 17, 2003, which partly amended

Large Taxpayers Assistance Division II

Revenue Regulations No. 1-97, by authorizing the BIR to periodically reclassify

new brands (i.e., every two years or earlier) based on their current net retail
prices. Thereafter, the BIR issued Revenue Memorandum Order No. 6-2003,

xxxx
1. Perform the following preparatory procedures on
the identification of brands to be surveyed,
supermarkets/retail outlets where the survey shall

dated March 11, 2003, prescribing the guidelines on the implementation of

Revenue Regulations No. 9-2003. This was patent error on the part of the BIR
for being contrary to the plain text and legislative intent of RA 8240.

It is clear that the afore-quoted portions of Revenue Regulations No.

1-97, as amended by Section 2 of Revenue Regulations 9-2003, and Revenue
Memorandum Order No. 6-2003 unjustifiably emasculate the operation of

think it was the intention of Congress to allow the BIR to

classify a new brand every two years, for example, because
[80]
it will be arbitrary for the BIR to do so. x x x (Emphasis
supplied)

Section 145 of the NIRC because they authorize the Commissioner of Internal
Revenue to update the tax classification of new brands every two years or

For these reasons, the amendments introduced by RA 9334 to RA 8240, insofar

earlier subject only to its issuance of the appropriate Revenue Regulations,

as the freezing mechanism is concerned, must be seen merely as underscoring

when nowhere in Section 145 is such authority granted to the Bureau. Unless

the legislative intent already in place then, i.e. new brands as being covered by

expressly granted to the BIR, the power to reclassify cigarette brands remains a

the freezing mechanism after their classification based on their current net

prerogative of the legislature which cannot be usurped by the former.

retail prices.

More importantly, as previously discussed, the clear legislative intent

Unfortunately for petitioner, this result will not cause a downward

was for new brands to benefit from the same freezing mechanism accorded to

reclassification of Lucky Strike. It will be recalled that petitioner introduced

Annex D brands. To reiterate, in enacting RA 8240, Congress categorically

Lucky Strike in June 2001.However, as admitted by petitioner itself, the BIR did

rejected the DOF proposal and Senate Version which would have empowered

not conduct the required market survey within three months from product

the DOF and BIR to periodically adjust the excise tax rate and tax brackets, and

launch. As a result, Lucky Strike was never classified based on its actual current

to periodically resurvey and reclassify cigarette brands. (This resurvey and

net retail price. Petitioner failed to timely seek redress to compel the BIR to

reclassification would have naturally encompassed both old and new brands.) It

conduct the requisite market survey in order to fix the tax classification of

would thus, be absurd for us to conclude that Congress intended to allow the

Lucky Strike. In the meantime, Lucky Strike was taxed based on

periodic reclassification of new brands by the BIR after their classification is

its suggested net retail price of P9.90 per pack, which is within the high-priced

determined based on their current net retail price while limiting the freezing of

tax bracket. It was only after the lapse of two years or in 2003 that the BIR

the classification to Annex D brands. Incidentally, Senator Ralph G. Recto

conducted

expressed the following views during the deliberations on RA 9334, which later

Strikes actual current net retail price was surveyed and found to be

amended RA 8240:

from P10.34 to P11.53 per pack, which is within the premium-priced tax

Senator Recto: Because, like I said, when Congress

agreed to adopt a specific tax system [under R.A. 8240], when
Congress did not index the brackets, and Congress did not
index the rates but only provided for a one rate increase in
the year 2000, we shifted from ad valorem which was based
on value to a system of specific which is based on volume.
Congress then, in effect, determined the classification based
on the prices at that particular period of time and classified
these products accordingly.

market

survey

which

was

the first

time that

Lucky

bracket. The case of petitioner falls under a situation where there was
no reclassification based on its current net retail price which would have been
invalid as previously explained. Thus, we cannot grant petitioners prayer for a
downward reclassification of Lucky Strike because it was never reclassified by
the BIR based on its actual current net retail price.
It should be noted though that on August 8, 2003, the BIR issued
Revenue Regulations No. 22-2003 which implemented the revised tax
classifications of new brands based on their current net retail prices through

Of course, Congress then decided on what will

happen to the new brands or variants of existing brands. To
favor government, a variant would be classified as the highest
rate of tax for that particular brand. In case of a new brand,
Mr. President, then the BIR should classify them. But I do not
think it was the intention of Congress then to give the BIR
the authority to reclassify them every so often. I do not

the market survey conducted pursuant to Revenue Regulations No. 9-2003.

Annex A of Revenue Regulations No. 22-2003 lists the result of the market
survey and the corresponding recommended tax classification of the new
brands therein aside from Lucky Strike. However, whether these other brands
were illegally reclassified based on their actual current net retail prices by the
BIR must be determined on a case-to-case basis because it is possible that

these brands were classified based on their actual current net retail price for

Thus, Revenue Regulations No. 9-2003 and Revenue Memorandum Order No.

the first time in the year 2003 just like Lucky Strike. Thus, we shall not make

6-2003 should be deemed modified by the above provisions from the date of

any pronouncement as to the validity of the tax classifications of the other

effectivity of RA 9334 on January 1, 2005.

brands listed therein.

nd

In sum, Section 4(B)(e)(c), 2 paragraph of Revenue Regulations No. 1-97, as

Finally, it must be noted that RA 9334 introduced changes in the

amended by Section 2 of Revenue Regulations 9-2003, and Sections II(1)(b),

manner by which the current net retail price of a new brand is determined and

II(4)(b), II(6), II(7), III (Large Tax Payers Assistance Division II) II(b) of Revenue

how its classification is permanently fixed, to wit:

Memorandum Order No. 6-2003, as pertinent to cigarettes packed by machine,

New brands, as defined in the immediately following

paragraph, shall initially be classified according to their
suggested net retail price.

are invalid insofar as they grant the BIR the power to reclassify or update the
classification of new brands every two years or earlier. Further, these
provisions are deemed modified upon the effectivity of RA 9334 on January 1,
2005 insofar as the manner of determining the permanent classification of new

New brands shall mean a brand registered after the date of

effectivity of R.A. No. 8240 [on January 1, 1997].

brands is concerned.

Suggested net retail price shall mean the net retail price at
which new brands, as defined above, of locally manufactured
or imported cigarettes are intended by the manufacture or
importer to be sold on retail in major supermarkets or retail
outlets in Metro Manila for those marketed nationwide, and
in other regions, for those with regional markets. At the end
of three (3) months from the product launch, the Bureau of
Internal Revenue shall validate the suggested net retail price
of the new brand against the net retail price as defined
herein and determine the correct tax bracket under which a
particular new brand of cigarette, as defined above, shall be
classified. After the end of eighteen (18) months from such
validation, the Bureau of Internal Revenue shall revalidate
the initially validated net retail price against the net retail
price as of the time of revalidation in order to finally
determine the correct tax bracket under which a particular
new brand of cigarettes shall be classified; Provided
however, That brands of cigarettes introduced in the
domestic market between January 1, 1997 and December 31,
2003 shall remain in the classification under which the
Bureau of Internal Revenue has determined them to belong
as of December 31, 2003. Such classification of new brands
and
brands
introduced
between January
1,
1997 and December 31, 2003 shall not be revised except by
an act of Congress. (Emphasis supplied)

We now tackle the last issue.

Petitioner contends that RA 8240, as amended by RA 9334, and its
implementing rules and regulations violate the General Agreement on Tariffs
and Trade (GATT) of 1947, as amended, specifically, Paragraph 2, Article III, Part
II:
2. The products of the territory of any contracting party
imported into the territory of any other contracting party
shall not be subject, directly or indirectly, to internal taxes or
other internal charges of any kind in excess of those applied,
directly or indirectly, to like domestic products. Moreover, no
contracting party shall otherwise apply internal taxes or other
internal charges to imported or domestic products in a
manner contrary to the principles set forth in paragraph 1.
It claims that it is the duty of this Court to correct, in favor of the GATT,
whatever inconsistency exists between the assailed law and the GATT in order
to prevent triggering the international dispute settlement mechanism under
the GATT-WTO Agreement.
We disagree.
The classification freeze provision uniformly applies to all newly
introduced brands in the market, whether imported or locally manufactured. It

does not purport to single out imported cigarettes in order to unduly favor
locally produced ones. Further, petitioners evidence was anchored on the
alleged unequal tax treatment between old and new brands which involves a
different frame of reference vis--vis local and imported products. Petitioner
has, therefore, failed to clearly prove its case, both factually and legally, within
the parameters of the GATT.

PUBLIC INTERNATIONAL LAW 320 (4th ed., 1974), citing Head

Money Cases, 112 U.S. 580 (1884) and Foster v. Nelson, 2 Pet.
253 (1829)]. Thus, if at all, R.A. No. 6734 would be
amendatory of the Tripoli Agreement, being a subsequent
law. Only a determination by this Court that R.A. No. 6734
contravenes the Constitution would result in the granting of
the reliefs sought. (Emphasis supplied)

At any rate, even assuming arguendo that petitioner was able to prove

WHEREFORE, the petition is PARTIALLY GRANTED and the decision of

that the classification freeze provision violates the GATT, the outcome would

the Regional Trial Court of Makati, Branch 61, in Civil Case No. 03-1032,

still be the same. The GATT is a treaty duly ratified by the Philippine Senate and

is AFFIRMEDwith MODIFICATION. As modified, this Court declares that:

under Article VII, Section 21

of a statute.

[82]

[81]

of the Constitution, it merely acquired the status

Applying the basic principles of statutory construction in case of

irreconcilable conflict between statutes, RA 8240, as amended by RA 9334,

(1) Section 145 of the NIRC, as amended by Republic Act No. 9334,
is CONSTITUTIONAL; and that

would prevail over the GATT either as a later enactment by Congress or as a

special law dealing with the taxation of sin products. Thus, in Abbas v.
Commission on Elections,

[83]

we had occasion to explain:

nd

(2) Section 4(B)(e)(c), 2 paragraph of Revenue Regulations No. 1-97,

as amended by Section 2 of Revenue Regulations 9-2003, and Sections II(1)(b),
II(4)(b), II(6), II(7), III (Large Tax Payers Assistance Division II) II(b) of Revenue

Petitioners premise their arguments on the

assumption that the Tripoli Agreement is part of the law of
the land, being a binding international agreement. The
Solicitor General asserts that the Tripoli Agreement is neither
a binding treaty, not having been entered into by the
Republic of the Philippines with a sovereign state and ratified
according to the provisions of the 1973 or 1987 Constitutions,
nor a binding international agreement.
We find it neither necessary nor determinative of
the case to rule on the nature of the Tripoli Agreement and
its binding effect on the Philippine Government whether
under public international or internal Philippine law. In the
first place, it is now the Constitution itself that provides for
the creation of an autonomous region in Muslim Mindanao.
The standard for any inquiry into the validity of R.A. No. 6734
would therefore be what is so provided in the Constitution.
Thus, any conflict between the provisions of R.A. No. 6734
and the provisions of the Tripoli Agreement will not have the
effect of enjoining the implementation of the Organic
Act. Assuming for the sake of argument that
the Tripoli Agreement is a binding treaty or international
agreement, it would then constitute part of the law of the
land. But as internal law it would not be superior to R.A. No.
6734, an enactment of the Congress of the Philippines,
rather it would be in the same class as the latter [SALONGA,

Memorandum Order No. 6-2003, insofar as pertinent to cigarettes packed by

machine, are INVALID insofar as they grant the BIR the power to reclassify or
update the classification of new brands every two years or earlier.
SO ORDERED.