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G.R. No.

96032 July 31, 1991

JESUS N. BORROMEO, petitioner, vs. THE HON. CIVIL SERVICE COMMISSION and SECRETARY OF BUDGET AND MANAGEMENT, respondents.

GUTIERREZ, JR., J.:p

Should the terminal leave pay of petitioner Borromeo, Chairman of the Civil Service Commission (CSC) until his retirement on April 1, 1986, be computed on the basis of the highest monthly salary plus cost of living allowance (COLA) and representation and transportation allowance (RATA) or solely on the basis of highest monthly salary without said allowances? This is the issue that confronts the Court.

On August 18, 1988, the petitioner wrote a letter to the Commission on Audit (COA) Chairman, coursed through the CSC Chairman, requesting an opinion on whether or not the money value of the terminal leave of retired Constitutional Commission members should include the allowances received at the time of retirement. The petitioner, in his letter, further stated that while retired members of other Constitutional Commissions received terminal leave pay computed on the basis of highest monthly salary including allowances, the former's terminal leave was computed solely on the basis of highest monthly salary.

In a First Indorsement to the COA Chairman on September 1, 1988, the CSC Chairman recommended the approval of the petitioner's request for payment of the money value of his terminal leave based on salary plus allowances.

On September 28, 1989, the COA rendered Decision No. 992 (hereinafter referred to as the COA decision) stating that "in line with the action taken by this Commission in the previous similar cases of former COA Commissioners Hermogenes P. Pobre and Silvestre D. Sarmiento," the COA "will interpose no objection" to the petitioner's claim.

Upon the petitioner's request for payment of terminal leave differential representing the unpaid COLA and RATA amounting to P111,229.04, the CSC Chairman informed the petitioner that the release of the corresponding advice of allotment and cash outlay to cover the payment of his

terminal leave differential had already been requested from the Department of Budget and Management (DBM).

On January 25,1990, in a letter addressed to the CSC Chairman, the DBM denied the petitioner's request for payment of terminal leave differential for the following reasons, among others:

1) Computation of the money value of vacation and sick leave is based on "basic pay" or "basic salary" pursuant to the provisions of the Revised Administrative Code, as amended by R.A. No. 1081.

2) Under Section 2(1) of P.D. No. 1146, the term salary refers to the basic pay or salary received by an employee, excluding per diems, bonuses, overtime pay and allowance.

3) The cases of former COA Commissioners Pobre and Sarmiento cannot be validly invoked as precedents for purposes of DBM Budgetary action since said claims were processed without prior involvement of the DBM.

Faced with the DBM refusal to release the corresponding allotment, the CSC yielded to DBM instead of asserting its initial determination. It issued Resolution No. 90-514 dated May 30, 1990 wherein the Commission deemed it proper not to rule on the issue on "ethical considerations" and "compulsions of delicadeza" and advised the petitioner to file an action for declaratory relief (sic) on the issue with the Supreme Court.

Petitioner Borromeo sought reconsideration of CSC Resolution No. 90-514, reasoning that neither the CSC Resolution nor the opinion of the DBM Secretary could prevail over the COA decision which had become final and executory.

On October 18, 1990, the CSC issued Resolution No. 90-945 denying reconsideration of the petitioner's case. Inspite of the CSC Chairman's earlier approval of the claim for payment, the CSC ruled that the COA decision "has no sufficient legal mooring and therefore cannot be the basis for allowing payment of the claims." The Resolution likewise cited a June 13, 1990 letter from former Court Administrator Meynardo A. Tiro informing the CSC that "the money value of the terminal leave credits of the Justices of the Supreme Court and other members of the Judiciary is based only on the highest basic salary (plus longevity pay) but excluding RATA as certified to by our Director of Fiscal Management and Budget Office."

Hence, this petition.

The Secretary of Budget and Management was ordered impleaded by the Court in a resolution dated January 31, 1991.

The petitioner seeks the nullification of CSC Resolution Nos. 90-514 and 90-945. He urges that the COA decision which interposed no objection to the computation of his terminal leave pay based on salary plus allowances had already become final and executory since no timely appeal had been taken therefrom.

Respondent CSC, on the other hand, maintains that the COA decision is not final and conclusive since said decision merely stated that the COA will not interpose any objection to the payment of the petitioners claim. More importantly, respondent CSC adds, the determination of the legality of claims on leave matters is within the province of the CSC.

On this preliminary issue, the Court rules against the petitioner's assertion that the COA decision has become final and executory and, therefore, beyond review; that the DBM has no alternative but to obey it. Article IX-A Section 7 of the 1987 Constitution provides:

. . . Unless otherwise 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 (30) days from receipt of a copy thereof.

The above-cited article refers to an aggrieved party raising a decision to this Court. Unfortunately for the petitioner, neither the Civil Service Commission nor the Secretary of Budget and Management may be viewed as an aggrieved party. The CSC is not an aggrieved party because it recommended the approval of the petitioner's request for payment of terminal leave computed on the basis of his monthly salary plus allowances and likewise interceded in behalf of the petitioner for the release of funds from the DBM. The COA upheld this initial position. Nor is the DBM an aggrieved party because it was not privy to the case before the COA. Moreover, even if the DBM was eventually apprised of the COA decision, the DBM's recourse was not to bring the matter on a petition for certiorari before the Court. As the agency tasked to release government funds, it simply ignored the COA ruling with which it disagreed. It refused to approve the release of allotment and outlay for terminal leave differential since in its opinion, payment thereof had no legal basis. The records do not show any authority of COA to compel acceptance of its ruling in this particular case.

The respondent CSC's stance, however, that it is the body empowered to determine the legality of claims on leave matters, to the exclusion of COA, is not well-taken. While the implementation and enforcement of leave benefits are matters within the functions of the CSC as the central personnel agency of the government, the duty to examine accounts and expenditures relating to leave benefits properly pertains to the COA. Where government expenditures or use of funds is involved, the CSC cannot claims an exclusive domain simply because leave matters are also involved.

The COA, the CSC, and the Commission on Elections are equally pre-eminent in their respective spheres. Neither one may claim dominance over the others. In case of conflicting rulings, it is the Judiciary which interprets the meaning of the law and ascertains which view shall prevail.

The basic question for the Court's consideration is whether or not RATA and COLA should be added to the highest monthly salary in computing the petitioner's terminal leave pay.

The petitioner anchors his claim on the Memorandum Order issued by President Marcos on November 20, 1980. Apparently, this Memorandum Order was also the basis for the COA decision, invoked by the petitioner as final and executory, interposing no objection to his claim for terminal leave differential. The Memorandum Order reads:

TO: The Chairman

Commission on Audit

Quezon City

With reference to the request of that Office for clarification on the accumulated leave credits of retired Chairman Perez and Commissioners Duque and Bayot, I hereby direct that:

1. The computation of the terminal leave in question shall be computed on the basis of the total number of days of leave credits each accumulated by Chairman Perez and Commissioners Duque and Bayot on the day of their retirement, not on the basis of 300 days as provided in Sec. 1014 of P.D. 1587.

2. The money value of the terminal leave shall be paid as computed on the basis of the highest monthly salary including allowance received at the time of the retirement.

(Sgd.) FERDINAND E. MARCOS

President of the Philippines

November 20, 1980. (p. 27, Rollo)

The above Order was the former President's response to a July 7, 1980 query initiated by former COA Chairman Francisco A. Tantuico, Jr. seeking clarification from the Office of the President respecting the claim of retired Chairman Leonardo B. Perez and Commissioners Venancio S. Duque and Flores A. Bayot of the Commission on Elections for the payment of the money value of their accumulated leaves. Since the Memorandum order specifically applies to these three officials, then said Order cannot automatically benefit others not mentioned therein. While it has persuasive value as a matter of contemporaneous interpretation especially as regards Presidential Decrees or other presidential acts, we cannot confer upon this Order the status of a law of general application.

The petitioner also invokes Administrative Order No. 44 dated December 13, 1979, extending to the Chairman and members of the Constitutional Commissions the same benefits enjoyed by retiring members of the Judiciary in the matter of rationalized rate of allowances and liberalized computation of retirement benefits and accumulated leave credits.

The Solicitor General, acting on behalf of the CSC and Secretary of Budget and Management, advances the argument that there is no provision in Administrative Order No. 444, or in any other law, which expressly authorizes the inclusion of allowances in the computation of the money value of the petitioner's accumulated leaves.

The pertinent portions of Administrative Order No. 444 provide:

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3. The accumulated leave credit of a Chairman/Commissioner of a Constitutional Commission shall be computed under the same rules as those applicable to members of the Judiciary.

4. Upon retirement, the lump sum of five years gratuity as provided under R.A. 3595 for the Chairman/Commissioner shall be computed on the basis of the highest monthly salary plus the duly authorized transportation, living and representation allowances in the last month prior to retirement or expiration of term.

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The law pertaining to retirement benefits respecting members of the Judiciary is Republic Act (R.A.) No. 910, as amended by Presidential Decree No. 1438, which reads:

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Sec. 3. Upon retirement, a justice of the Supreme Court or of the Court of Appeals, or a judge of the Court of First Instance, Circuit Criminal Court, Agrarian Relations, Tax Appeals, Juvenile and Domestic Relations, city or municipal court, or any other court hereafter established shall be automatically entitled to a lump sum of five years gratuity computed on the basis of the highest monthly salary plus the highest monthly aggregate of transportation, living and representation allowances he was receiving on the date of his retirement; . . . .

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It is clear from RA 91 0 as amended that the five-year gratuity is based on highest monthly salary plus transportation, living and representation allowance. Should the computation of terminal leave pay, which is given on the same occasion of retirement and which arises from the same considerations of government gratitude that for most retirees is based on a lifetime of service, be accorded similar treatment?

The Solicitor General stresses that under Section 286 of the Revised Administrative Code, as amended by Republic Act No. 1081 and Executive Order No. 1077, the computation of the money value of the terminal leave pay is based only on monthly basic salary.

Section 286 of the Revised Administrative Code, as amended by RA No. 1081, states:

Section 286. When vacation leave and sick leave may be taken. Vacation leave and sick leave shall be cumulative and any part thereof which may not be taken within the calendar year in which earned may be carried over to the succeeding years, but whenever any officer, employee, or laborer of the Government of the Philippines shall voluntarily resign or be separated from the service through no fault of his own, he shall be entitled to the commutation of all accumulated vacation and/or sick leaves to his credit: Provided, That the total vacation leave and sick leave that can accumulate to the credit of any officer of employee shall, in no case, exceed ten months: Provided, further, That the proper Department Head may in his discretion authorize the commutation of the salary that would be received during the period of vacation and sick leave of any appointed officer or employee or teacher or laborer of the Philippine Government and direct its payment on or before the beginning of such leave from the fund out of which the salary would have been paid: Provided, furthermore, That no person whose leave has been commuted following his separation from the service shall be reappointed or reemployed under the Government of the Philippines before the expiration of the leave commuted unless he first refunds the money value of the unexpired portion of the leave commuted. (Emphasis supplied)

(Executive Order No. 1077 later amended Section 286 by removing the limitation on the number of days of vacation and sick leaves that a retiree may accumulate, although all employees are required to go on a minimum of five days vacation leave annually.)

The only provision in Section 286 of the Revised Administrative Code, as amended, which could seemingly support the Solicitor General's view is the above underlined clause which allows the "commutation of salary" of a government officer, employee or laborer.

"Commutation of salary" as used in Section 286 is, however, not the same as "commutation of leave credits." The former is applied for by an employee during employment when he goes on ordinary leave. Thus, if his Department Head allows it, the employee may receive his salary for the period of the vacation or sick leave before the beginning of such leave; otherwise, he gets his salary only on the pay days covered by the vacation or sick leave period or upon returning to work. In contrast, commutation of leave credits, more commonly known as terminal leave, is applied for by an officer or employee who retires, resigns or is separated from the service through no fault of his own. (Manual on Leave Administration Course for Effectiveness published by the Civil Service Commission, pages 16-17). In the exercise of sound personnel policy, the Government encourages unused leaves to be accumulated. The Government recognizes that for most public servants, retirement pay is always less than generous if not meager and scrimpy. A modest nest egg which the senior citizen may look forward to is thus provided. Terminal leave payments are given not only at the same time but also for the same policy considerations governing retirement benefits.

Since terminal leave is applied for by an officer or employee who has already severed his connection with his employer and who is no longer working, then it follows that the terminal leave pay, which is the cash value of his accumulated leave credits, should not be treated as compensation for services rendered at that time. (Re: Request of Atty. Bernardo Zialcita, 190 SCRA 851 [1990]) It can not be viewed as salary for purposes which would reduce it. (supra) There can thus be no "commutation of salary" when a government retiree applies for terminal leave because he is not receiving it as salary. What he applies for is a "commutation of leave credits." It is an accumulation of credits intended for old age or separation from the service. Hence, Section 286 of the Revised Administrative Code is not applicable. It cannot be construed as limiting the basis of the computation of terminal leave pay to monthly salary only.

In the light of the reasons which impelled the law to include COLA and RATA in computing retirement benefits of certain officials, we rule that terminal leave payments must also be governed by the same principle. COLA and RATA should be included in computing the terminal leave credits when the officials retire or the official relationship is lawfully terminated.

The Solicitor General cites our ruling in Paredes v. Acting Chairman, 116 SCRA 176 [1982] to support his position.

Commonwealth Act (CA) No. 186, as amended, provides for the retirement of government employees, other than members of the Judiciary, Constitutional Commissions and those whose retirement is not covered by special law. Section 12(c) of CA 186 reads:

(c) Retirement is likewise allowed to any official or employee, appointive or elective, regardless of age and employment status, who has rendered a total of at least twenty years of service, the last three years of which are continuous. The benefit shall, in additional to the return of his personal contributions with interest compounded monthly and the payment of corresponding employer's premiums described in subsection (a) of Section five hereof, without interest, be only a gratuity equivalent to one month's salary for every year of the first twenty years of service, plus one and one-half month's salary for every year of service over twenty but below thirty years and two month's salary for every year of service over thirty years in case of employees based on the highest rate received and in case of elected officials on the rates of pay as provided by law. . . . Officials and employees retired under this Act shall be entitled to the commutation of the unused vacation and sick leave, based on the highest rate receiver, which they may have to their credit at the time of retirement.

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Under the last sentence, officials and employees retired under CA 186, as amended, shall be entitled to the commutation of the vacation and sick leave credits based on the highest rate received.

In Paredes v. Acting Chairman, supra, the Court construed the phrase "highest rate received" as referring to the retiree's "highest monthly salary":

The foregoing legal provision [Section 12(c)] of CA 186 requires the computation of the money value of the terminal leave to be based on the retiree's highest rate received. And a reading of the entire provision shows that the highest rate received refers to the retiree's highest monthly salary.

The petitioner in that case was a former Assistant City Auditor of Manila who sought to have his RATA included in the computation of his terminal leave pay. The Court therein held that it "allowances are not considered part of salary for purposes of retirement and payment of the money value of terminal leave."

It must be noted, however, that the Court, in that case, construed "highest rate received" as highest monthly salary mainly because the retirement gratuity received by employees under Section 12(c) of CA 186 is based only on monthly salary. Thus, under the aforementioned provision, the benefit for employees shall be "a gratuity equivalent to one month's salary for every year of the first twenty years of service, plus one and one-half month's salary for every years of service over 20 but below 30 years and two month's salary for every year of service over thirty years . . . based on the highest rate received . . . Officials and employees retired under this act shall be entitled to the commutation of the unused vacation and sick leave, based on the highest rate received . . . ." (Emphasis supplied.)

A reading of Section 12(c) of CA 186 therefore reveals an intent on the part of the legislature to provide a uniform basis in computing both the retirement gratuity and the terminal leave pay. In CA 186, that uniform basis is salary.

A different law, R.A. 910 as amended, governs the petitioner. In the case of members of the Judiciary and Constitutional Commissions, the basis in computing the retirement gratuity is the highest monthly salary plus the highest monthly aggregate of transportation, living and representation allowance (COLA and RATA). The same rule of uniformity which we applied in Paredes v. Acting Chairman for those retiring under CA 186 as amended should also apply for those who retire under R.A. 910 as amended. The rate used in computing retirement gratuities also applies in the computation of terminal leave credits.

It is axiomatic that retirement laws are liberally construed and administered in favor of the persons intended to be benefited. All doubts as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian purposes. (In Re: Amount of the Monthly Pension of Judges and Justices starting from the Sixth year of their Retirement and after the Expiration of the Initial FiveYear Period of Retirement, 190 SCRA 315 [1990]; Ortiz v. Commission on Elections, 162 SCRA 812 [1988]; Bautista v. Auditor General, 104 Phil. 428 [1958])

Although terminal leave pay is not synonymous with, and is not a part of, the five-year lump sum gratuity provided under RA 910 as amended and Administrative Order No. 444, the former may, in a broad sense, partake of the nature of a gratuity rather than actual salary. A gratuity is that paid to the beneficiary for past services rendered purely out of generosity of the giver or grantor. (Peralta v. Auditor General, 100 Phil 1051 [1957]) It is a mere bounty given by the government in consideration or in recognition of meritorious services and springs from the appreciation and graciousness of the government. (Pirovano v. De La Rama Steamship Co., 96 Phil. 335, 357 [1954]) While it is true that vacation and sick leave credits are earned during one's period of employment, they are, by their very nature and purpose, supposed to be enjoyed or exhausted during employment. When these accumulated leave benefits are allowed to be accumulated, not to be paid while one is working but to be reserved for old age, then this constitutes the gratuity.

Through the years, laws pertaining to accumulation of leave credits show a liberal trend with a view to favoring the retiring employee. Under Act 2711 (dated March 10, 1917), accumulated leaves that may be commuted cannot exceed 5 months. Republic Act No. 1081 (dated June 15, 1954) increased the limit from 5 to 10 months. With the passage of Executive Order No. 1077 on January 9, 1986, the retiring employee became entitled to the commutation of all accumulated vacation and sick leaves to his credit, without limitation as to the number of days of vacation and sick leave that he may accumulate.

Since terminal leave pay may also be considered a gratuity, then applying the rule on liberal interpretation of retirement laws, the basis for its computation in the case of members of the

Judiciary and Constitutional Commissions must be the same as that used in computing the 5-year lump sum gratuity under RA 910 as amended and Administrative Order No. 444.

The Court is cognizant of the incongruity that may ensue if the terminal leave pay of members of the Judiciary and Constitutional Commissions is computed only on the basis of highest basic monthly salary.

If, for example a member of the CSC has an accumulated leave credit of one month and, in the two months immediately prior to retiring, consumes his accumulated leaves by going on fifteen days' vacation leave twice, there is no dispute that he will be paid two months' salary plus COLA and RATA for this two-month period, although no work has been rendered by him. If, on the other hand, he chooses to work until the last day of employment and upon retirement, applies for the commutation of his accumulated leave credit of one month, following the proposition of the Solicitor General, he will receive terminal leave pay equivalent only to one month's salary, without COLA and RATA. In the latter case, why should he be penalized for faithfully working continuously and not consuming his leave credits until his last working day? Why should the basis for the commutation of leave credits be different just because he chose to avail himself of his leave benefits immediately before and not immediately after retirement? Surely this disparity in consequence could not have been intended by our lawmakers.

There is more reason now to include COLA in the computation of terminal leave pay. Section 12 of Republic Act 6758, known as the Compensation and Position Classification Act of 1989, mandated the integration of COLA to the basic salary and, therefore, to the retirement pay of all employees. While it is true that RA 6758 took effect only on July 1, 1989, long after petitioner had already retired on April 1, 1986, his COLA should nevertheless have been included in computing terminal leave pay for the same reasons stated above.

In Re: Request of Atty. Bernardo Zialcita, supra, the affected agency filed a motion for partial reconsideration stressing that the benefits of our ruling should not be open-ended and made to apply retroactively to all the unknown and uncomplaining persons who may have retired as far back as decades ago. We provided a cut-off date. The same practical considerations and budgetary restraints constrain the Court to impose a cut-off date for claims for terminal leave differentials. The Court therefore, rules that the inclusion of COLA and RATA as basis in arriving at terminal leave pay shall apply only to those qualified members of the Judiciary and Constitutional Commissions who retired or shall retire on or after the change of government in February, 1986.

WHEREFORE, the petition is hereby GRANTED. Resolutions 90-514 and 90-945 issued by the Civil Service Commission are set aside. The Secretary of Budget and Management is ordered to release the corresponding allotment and cash outlay for the terminal leave differential claimed by the petitioner. The terminal leave pay of qualified members of the Judiciary and Constitutional Commissions who retired or shall retire on or after the February, 1986 political upheaval shall be based on highest monthly salary plus COLA and RATA.

SO ORDERED.

G.R. No. 101428 August 5, 1992

DR. ISABELITA VITAL-GOZON, in her official capacity as MEDICAL CENTER CHIEF OF THE NATIONAL CHILDREN'S HOSPITAL, petitioner, vs. THE HONORABLE COURT OF APPEALS and DR. ALEJANDRO S. DE LA FUENTE, respondents.

Gregorio San Agustin for private respondent.

NARVASA, C.J.:

Whether or not the Court of Appeals has jurisdiction, in a special civil action of mandamus against a public officer, to take cognizance of the matter of damages sought to be recovered from the defendant officer, is the chief issue raised in the certiorari action at bar. Also put the issue is whether or not the Solicitor General may represent the defendant public officer in the mandamus suit, in so far as the claim for damages is concerned, in light of the Court's rulings in Urbano , et al. v. Chavez, et al., and Co v. Regional Trial Court of Pasig, et al. 1

There is no dispute about the facts from which these issues arise.

In the early months of 1987 and pursuant to Executive Order No. 119 issued on January 30, 1987 by President Corazon Aquino reorganization of the various offices of the Ministry of Health commenced; existing offices were abolished, transfers of personnel effected.

At the time of the reorganization, Dr. Alejandro S. de la Fuente was the Chief of the Clinics of the National Children's Hospital, having been appointed to that position on December 20, 1978. Prior thereto, he occupied the post of Medical Specialist II, a position to which he was promoted in 1977 after serving as Medical Specialist I of the same hospital for six (6) years (since 1971).

On February 4, 1988 Dr. de la Fuente received notice from the Department of Health that he would be re-appointed "Medical Specialist II." Considering this is to be a demotion by no less than two

ranks from his post as Chief of Clinics, Dr. de la Fuente filed a protest with the DOH Reorganization Board. When his protest was ignored, he brought his case to the Civil Service Commission where it was docketed as CSC Case No. 4. In the meantime "the duties and responsibilities pertaining to the position of Chief of Clinics were turned over to and were allowed to be exercised by Dr. Jose D. Merencilla, Jr." 2

Dr. de la Fuente's case was decided by the Civil Service Commission in a Resolution dated August 9, 1988. In that Resolution, the Commission made the following conclusion and disposition, to wit:

. . (The Commission) declares the demotion/transfer of appellant de la Fuente, Jr. from Chief of Clinics to Medical Specialists II as null and void: hence, illegal. Considering further that since the National Children's Hospital was not abolished and the position therein remained intact although the title or the position of Chief of Clinics was changed to "Chief of Medical Professional Staff" with substantially the same functions and responsibilities, the Commission hereby orders that:

1. Appellant de la Fuente, Jr. be retained or considering as never having relinquished his position of Chief of Clinics (now Chief of Medical Professional Staff) without loss of seniority rights; and

2. He be paid back salaries, transportation, representation and housing allowances and such other benefits withheld from him from the date of his illegal demotion/transfer.

No motion for reconsideration of this Resolution was ever submitted nor appeal therefrom essayed to the Supreme Court, within the thirty-day period prescribed therefor by the Constitution. 3 Consequently, the resolution became final, on September 21, 1988.

De la Fuente thereupon sent two (2) letters to Dr. Vital-Gozon, the Medical Center Chief of National Children's Hospital, 4 demanding the implementation of the Commission's decision. Dr. Vital-Gozon referred "de la Fuente's claims to the Department of Health Assistant Secretary for Legal Affairs for appropriate advice and/or action . . (She did this allegedly because, according to the Solicitor General, she was) unaware when and how a CSC Resolution becomes final and executory, whether such Resolution had in fact become final and executory and whether the DOH Legal Department would officially assail the mentioned Resolution." 5 But she did not answer Dr. de la Fuente's letters, not even to inform him of the referral thereof to the Assistant Secretary. She chose simply to await "legal guidance from the DOH Legal Department." On the other hand, no one in the DOH Legal Department bothered to reply to Dr. de la Fuente, or to take steps to comply or otherwise advise compliance, with the final and executory Resolution of the Civil Service Commission. In fact, de la Fuente claims that Vital-Gozon had "actually threatened to stop paying . . . (his) salary and allowances on the pretext that he has as yet no 'approved' appointment even as 'Medical Specialist II' . . . 6

Three months having elapsed without any word from Vital-Gozon or anyone in her behalf, or any indication whatever that the CSC Resolution of August 9, 1988 would be obeyed, and apprehensive that the funds to cover the salaries and allowances otherwise due him would revert to the General Fund, Dr. de al Fuente repaired to the Civil Service Commission and asked it to enforce its judgment. He was however "told to file in court a petition for mandamus because of the belief that the Commission had no coercive powers unlike a court to enforce its final decisions/resolutions. 7

So he instituted in the Court of Appeals on December 28, 1988 an action of "mandamus and damages with preliminary injunction" to compel Vital-Gozon, and the Administrative Officer, Budget Officer and Cashier of the NCH to comply with the final and executory resolution of the Civil Service Commission. He prayed for the following specific reliefs:

(1) (That) . . a temporary restraining order be issued immediately, ordering the principal and other respondents to revert the funds the of the NCH corresponding to the amounts necessary to implement the final resolution of the CSC in CSC Case No. 4 in favor of herein petitioner, Dr. Alejandro S. de la Fuente, Jr., and to pay such sums which have accrued and due and payable as of the date of said order;

(2) After hearing on the prayer for preliminary injunction, that the restraining order be converted to a writ of preliminary injunction; and that a writ of preliminary mandatory injunction be issued ordering principal respondent and the other respondents to implement in full the said final resolution; and

(3) That, after hearing on the merits of the petition, that judgment be rendered seeking (sic) permanent writs issued and that principal respondent be ordered and commanded to comply with and implement the said final resolution without further delay; and, furthermore, that the principal respondent be ordered to pay to the sums of P100,000.00 and P20,000.00 as moral and exemplary damages, and P10,000.00 for litigation expenses and attorney's fees.

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The Court of Appeals required the respondents to answer. It also issued a temporary restraining order as prayed for, and required the respondent to show cause why it should not be converted to a writ of preliminary injunction. The record shows that the respondents prayed for and were granted an extension of fifteen (15) days to file their answer "through counsel, who," as the Court of Appeals was later to point out, 8 "did not bother to indicate his address, thus notice was sent to him through the individual respondents. . . . (However, no) answer was filed; neither was there any show cause

(sic) against a writ of preliminary injunction." It was a certain Atty. Jose Fabia who appeared in Vital-Gozon's behalf. 9

About a month afterwards, de la Fuente filed with the same Court a "Supplemental/Amended Petition" dated February 2, 1989. The second petition described as one for "quo warranto" aside from "mandamus", added three respondents including Dr. Jose Merencilla, Jr.; and alleged inter alia that he (de la Fuente) had "clear title" to the position in question in virtue of the final and executory judgment of the Civil Service Commission; that even after the Commission's judgment had become final and executory and been communicated to Vital-Gozon, the latter allowed "Dr. Merencilla, Jr. as 'OIC Professional Service' to further usurp, intrude into and unlawfully hold and exercise the public office/position of petitioner, (under a duly approved permanent appointment as 'Chief of Clinics' since 1978). De la Fuente thus prayed, additionally, for judgment:

(a) Declaring that principal respondent Dr. Jose D. Merencilla, Jr. is not legally entitled to the office of "Chief of Clinics" (now retitled/known as "Chief of Medical Professional Staff," NCH), ousting him therefrom and ordering said respondent to immediately cease and desist from further performing as "OIC Professional Service" any and all duties and responsibilities of the said office; (and)

(b) Declaring that the petitioner, Dr. Alejandro S. de la Fuente, Jr., is the lawful or de jure Chief of Clinics (now known as "Chief of the Medical Professional Staff") and placing him in the possession of said office/position, without the need of reappointment or new appointment as held by the Civil Service Commission in its resolution of August 9, 1988, in CSC Case No. 4.

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Copy of the "Supplemental/Amended Petition" was sent to Atty. Jose A. Fabia, Counsel for Respondents c/o Dr. Ma. Isabelita Vital-Gozon, etc., National Children's Hospital, E. Rodriguez Ave., Quezon City (Atty. Fabia's address not being indicated or mentioned in his motion for Extension of Time). 10

Again the Court of Appeals required answer of the respondents. Again, none was filed. The petitions were consequently "resolved on the basis of their allegations and the annexes." The Appellate Court promulgated its judgment on June 9, 1989. 11 It held that

The question of whether petitioner may be divested of his position as Chief of Clinics by the expedient of having him appointed to another, lower position is no longer an issue. It ceased to be such when the resolution in CSC Case No. 4 became final. The said resolution is explicit in its mandate; petitioner was declared the lawful and de jure Chief of Clinics (Chief of the Medical Professional Staff) of the National Children's Hospital, and by this token, respondent Dr. Jose D. Merencilla, Jr. is not legally entitled to the office. Respondents, particularly Dr. Isabelita Vital-Gozon,

had no discretion or choice on the matter; the resolution had to be complied with. It was ill-advised of principal respondent, and violative of the rule of law, that the resolution has not been obeyed or implemented.

and accordingly ordered

. . . respondents, particularly Dr. Isabelita Vital-Gozon, . . . to forthwith comply with, obey and implement the resolution CSC Case No. 4 (and) . . . Dr. Jose D. Merencilla, Jr., who is not entitled to the office, . . . to immediately cease and desist from further performing and acting as OIC Professional Service.

But de la Fuente's prayer for damages founded essentially on the refusal of Gozon, et al. to obey the final and executory judgment of the Civil Service Commission, which thus compelled him to litigate anew in a different forum was denied by the Court of Appeals on the ground that the "petitions (for mandamus) are not the vehicle nor is the Court the forum for . . . (said) claim of damages."

Gozon acknowledged in writing that she received a copy of the Appellate Tribunal's Decision of June 9, 1989 on June 15, 1989. 12 Respondent de la Fuente acknowledged receipt of his own copy on June 15, 1989. 13 Neither Vital-Gozon nor her co-party, Dr. Merencilla, Jr., moved for reconsideration of, or attempted to appeal the decision.

It was de la Fuente who sought reconsideration of the judgment, by motion filed through new counsel, Atty. Ceferino Gaddi. 14 He insisted that the Appellate Court had competence to award damages in a mandamus action. He argued that while such a claim for damages might not have been proper in a mandamus proceeding in the Appellate Court "before the enactment of B.P. Blg. 129 because the Court of Appeals had authority to issue such writs only 'in aid of its appellate jurisdiction,'" the situation was changed by said BP 129 in virtue of which three levels of courts the Supreme Court, the Regional Trial Court, and the Court of Appeals were conferred concurrent original jurisdiction to issue said writs, and the Court of Appeals was given power to conduct hearings and receive evidence to resolve factual issues. To require him to separately litigate the matter of damages he continued, would lead to that multiplicity of suits which is abhorred by the law.

While his motion for reconsideration was pending, de la Fuente sought to enforce the judgment of the Court of Appeals of June 9, 1989 directing his reinstatement pursuant to the Civil Service Commission's Resolution of August 9, 1988, supra. He filed on July 4, 1989 a "Motion for Execution," alleging that the judgment of June 9, 1989 had become final and executory for failure of Gozon, et al. served with notice thereof on June 16, 1989 to move for its reconsideration or elevate the same to the Supreme Court. 15 His motion was granted by the Court of Appeals in a Resolution dated July 7, 1989, 16 reading as follows:

The decision of June 9, 1989 having become final and executory, as prayed for, let the writ of execution issue forthwith.

The corresponding writ of execution issued on July 13, 1989, 17 on the invoked authority of Section 9, Rule 39. 18 The writ quoted the dispositive portion of the judgment of June 9, 1989, including, as the Solicitor General's Office points out, the second paragraph to the effect that the petitions "are not the vehicle nor is the Court the forum for the claim of damages; (hence,) the prayer therefor is denied."

The writ of execution notwithstanding, compliance with the June 9, 1989 judgment was not effected. Consequently, de la Fuente filed, on July 20, 1989, an "Urgent Ex Parte Manifestation with Prayer to Cite Respondents for Contempt," complaining that although Gozon and her co-parties had been served with the writ of execution on July 14, they had not complied therewith. By Resolution dated July 26, 1989, the Court required Gozon and Merencilla to appear before it on August 3, 1989 to answer the charge and show cause "why they should not be adjudged in contempt for disobeying and/or resisting the judgment." 19

At the hearing Gozon and Merencilla duly presented themselves, accompanied by their individual private lawyers one for Gozon (Felipe Hidalgo, Jr.), two for Merencilla (Bernardo S. Nera and Moises S. Rimando). One other lawyer appeared in their behalf, from the Health Department, Artemio Manalo, who stated that he was there "in behalf of Jose A. Fabia." 20 They explained that they had no intention to defy the Court, they had simply referred the matter to their superiors in good faith; and they were perfectly willing to comply with the judgment, undertaking to do so "even in the afternoon" of that same day. The Court consequently ordered them "to comply with their undertaking . . . without any further delay," and report the action taken towards this end, within five (5) days.

On August 9, 1989, Gozon as "Medical Center Chief," sent a letter to Associate Justice Pedro A. Ramirez, advising that under Hospital Special Order No. 31 dated August 3, 1989, de la Fuente had been directed to assume the position of Chief of the Medical Professional Staff, and that a voucher for the payment of his allowances had been prepared and was being processed. 21

More than a month later, or more precisely on September 27, 1989, the Court of Appeals promulgated another Resolution, this time resolving de la Fuente's motion for reconsideration of June 29, 1989. 22 It modified the Decision of June 9, 1989 by (a) deleting its last paragraph (disallowing the claim of damages, supra), (b) consequently describing and treating it as a "PARTIAL DECISION," and (c) scheduling "further proceedings for the purpose of receiving evidence (of damages)," since said question "cannot be resolved by mere reference to the pleadings." 23 This was done in reliance on Section 3, Rule 65 of the Rules of Court, invoked by de la Fuente, which reads as follows: 24

Sec. 3. 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 the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant.

At about this time, yet another lawyer, Atty. Pedro F. Martinez entered his appearance for Isabelita Gozon. 25 At his instance, the Court gave him an "opportunity to . . . file a motion for reconsideration" of the Resolution of September 27, 1989. 26 That motion he filed by registered mail on November 10, 1989. 27 His basic contentions were (a) that the decision of June 9, 1989 could no longer be altered, having become final and executory and having in fact been executed, and (b) that under BP 129, the Appellate Court had no jurisdiction over the question of damages in a mandamus action.

The Office of the Solicitor General also put in an appearance in Gozon's behalf at this juncture, saying that the case had been referred to it only on November 14, 1989. It, too, sought reconsideration of the Resolution of September 27, 1989. It filed on November 16, 1989 an "Omnibus Motion; I. For Reconsideration of Resolution dated September 27, 1989; and II. To defer hearing on petitioner's claims for damages." 28

Both motions were denied by the Court of Appeals in a Resolution dated January 11, 1991. In that Resolution, the Court

1) declared that the amended decision had already become final and could no longer be re-opened because, although "a copy of the amendatory resolution was received by counsel who was representing Gozon on October 3, 1989," the first motion for reconsideration was not mailed until November 10, 1989 and the Solicitor General's "Omnibus Motion" was not filed until November 16, 1989; and

2) prohibited the Solicitor General from representing Gozon "in connection with . . . (de la Fuente's) claim for damages," on the authority of this Court's ruling promulgated on March 19, 1990 in G.R. No. 87977 (Urbano, et al. v. Chavez, et al.) and G.R. No. 88578 (Co v. Regional Trial Court of Pasig). 29

Notice of this Resolution of January 11, 1991 was served on the Solicitor General's Office on January 18, 1991. 30 Again the Solicitor General sought reconsideration, by motion dated January 25, 1991

and filed on January 30, 1991. 31 Again it was rebuffed. In a Resolution rendered on August 7, 1991, 32 served on the Solicitor General's Office on August 20, 1991, 33 the Court of Appeals denied the motion. It ruled that the "question of the authority of the Solicitor General to appear as counsel for respondent Gozon . . . (had already) been extensively discussed," and that its "jurisdiction . . . to hear and determine issues on damages proceeds from Sec. 9, Batas Pambansa 129 as amended."

In an attempt to nullify the adverse dispositions of the Court of Appeals and obtain "the ultimate and corollary relief of dismissing respondent de la Fuente's claim for damages" the Solicitor General's Office had instituted the special civil action of certiorari at bar. It contends that the Court of Appeals is not legally competent to take cognizance of and decide the question of damages in a mandamus suit. It argues that

1) B.P. Blg. 129 does not confer jurisdiction upon the Court of Appeals to hear, as a trial court, claims for moral and exemplary damages;

2) assuming that the Court of Appeals does have jurisdiction over the claims for damages, it lost the power to take cognizance thereof after the Decision of June 9, 1989 had, by its own pronouncement, become final and executory; and

3) the Urbano and Co doctrines cited by the Appellate Tribunal do not disqualify the Solicitor General's Office from representing government officials sued in their official capacities and in damage claims not arising from a felony.

It is in light of these facts, just narrated, that this Court will now proceed to deal with the legal issues raised in this action. But first, a few brief observations respecting the proceedings in the Civil Service Commission.

The record demonstrates that Vital-Gozon was fully aware of the following acts and events: 34

1) the proceedings commenced by de la Fuente in the Civil Service Commission in protest against his demotion;

2) the Commission's Resolution of August 9, 1988 as well, particularly, as the direction therein that de la Fuente be reinstated and paid all his back salaries and other monetary benefits otherwise due him, this being couched in fairly simple language obviously understandable to persons of ordinary or normal intelligence;

3) no less than two (2) written demands of de la Fuente for implementation of the CSC's aforesaid Resolution of August 9, 1988;

4) the petition filed by de la Fuente in the Court of Appeals for enforcement of the CSC Resolution of August 9, 1988;

5) the extension granted by said Court of Appeals within which to file answer, notice thereof having been sent directly to her and her co-respondents since the attorney who sought the extension in their behalf (Atty. Fabia) did not set out his address in his motion for extension;

6) the "supplemental/amended petition" subsequently presented by de la Fuente, copy of which was sent to Atty. Fabia, c/o Dr. Vital-Gozon; and

7) the Decision and Amendatory Decision sent to her counsel on October 3, 1989.

To all these, her reaction, and that of the officials of the Department of Health concerned, was a regrettably cavalier one, to say the least. Neither she nor the Health officials concerned accorded said acts and events any importance. She never bothered to find out what was being done to contest or negate de la Fuente's petitions and actions, notwithstanding that as time went by, de la Fuente's efforts were being met with success.

Nothing in the record even remotely suggests that Vital-Gozon merits relief from the final and executory Resolution of the Civil Service Commission. This Court will not disturb that Resolution. It is satisfied that no procedural or substantive errors taint that Resolution, or its becoming final and executory.

II

Now, final and executory judgments are enforced by writ of execution and not by another, separate action, whether of mandamus or otherwise. Hence, execution of the Civil Service Commission's decision of August 9, 1988 should have been ordered and effected by the Commission itself, when de la Fuente filed a motion therefor. It declined to do so, however, on the alleged ground, as de la Fuente claims he was told, that it "had no coercive powers unlike a court to enforce its final decisions/resolutions." 35 That proposition, communicated to de la Fuente, of the Commission's supposed lack of coercive power to enforce its final judgments, is incorrect. It is inconsistent with previous acts of the Commission of actually directing execution of its decisions and resolutions, which this Court has sanctioned in several cases; 36 and it is not in truth a correct assessment of its powers under the Constitution and the relevant laws.

In an En Banc Decision promulgated on October 15, 1991 in G.R. No. 96938 entitled "Government Service Insurance System (GSIS) versus Civil Service Commission, et al.," 37 this Court declared that in light of the pertinent provisions of the Constitution and relevant statutes

. . . it would appear absurd to deny to the Civil Service Commission the power or authority to enforce or order execution of its decisions, resolutions or orders which, it should be stressed, it has been exercising through the years. It would seem quite obvious that the authority to decide cases in inutile unless accompanied by the authority to see that what has been decided is carried out. Hence, the grant to a tribunal or agency of adjudicatory power, or the authority to hear and adjudge cases, should normally and logically be deemed to include the grant of authority to enforce or execute the judgments it thus renders, unless the law otherwise provides.

In any event, the Commission's exercise of that power of execution has been sanctioned by this Court in several cases.

Be this as it may, the fact is that by reason of the Commission's mistaken refusal to execute its final and executory Resolution of August 9, 1988, extended proceedings have taken place in the Court of Appeals and certain issues have been expressly raised in relation thereto, supra. Those issues appear to the Court to be important enough to deserve serious treatment and resolution, instead of simply being given short shrift by a terse ruling that the proceedings in the Court Service Commission actually had the power to execute its final and executory Resolution.

III

The first such issue is whether or not the Court of Appeals has jurisdiction to take cognizance of the matter of damages in a special civil action of mandamus. The Solicitor General's Office argues that since jurisdiction is conferred only by law, not by agreement of the parties, or acquiescence of the court, and since the law conferring jurisdiction on the Court of Appeals, Section 9 of B.P. Blg. 129, makes no reference to "actions for moral and exemplary damages, as those claimed by . . . (de la Fuente)," it follows that the Court of Appeals has no competence to act on said claim of damages. And Section 3 of Rule 65, which authorizes the petitioner in a mandamus suit to pray for judgment commanding the defendant inter alia "to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant," is "nothing more than a procedural rule allowing joinder of causes of action, i.e., mandamus and damages," and such an award of damages is allowable only in actions commenced in Regional Trial Courts but not in the Court of Appeals or this Court.

The argument is specious. It cannot be sustained.

The Solicitor General's Office correctly identifies Section 9, B.P. 129 as the legal provision specifying the original and appellate jurisdiction of the Court of Appeals. The section pertinently declares that the "Intermediate Appellate Court (now the Court of Appeals) shall exercise . .," among others:

. . . Original jurisdiction to issue writs of mandamus, prohibition, certiorari, habeas corpus, and quo warranto, and auxiliary writs or processes, whether or not in aid of its appellate jurisdiction . . . 38

The Solicitor General's Office evidently searched said Section 9 for an explicit and specific statement regarding "actions for moral and exemplary damages," and finding none, concluded that the Court of Appeals had not been granted competence to assume cognizance of claims for such damages. The conclusion is incorrect. Section 19, governing the exclusive original jurisdiction of Regional Trial Courts in civil cases, contains no reference whatever to claims "for moral and exemplary damages," and indeed does not use the word "damages" at all; yet it is indisputable that said courts have power to try and decide claims for moral, exemplary and other classes of damages accompanying any of the types or kinds of cases falling within their specified jurisdiction. The Solicitor General's theory that the rule in question is a mere procedural one allowing joinder of an action of mandamus and another for damages, is untenable, for it implies that a claim for damages arising from the omission or failure to do an act subject of a mandamus suit may be litigated separately from the latter, the matter of damages not being inextricably linked to the cause of action for mandamus, which is certainly not the case.

Now, at the time of the enactment of B.P. 129, the issuance of the extraordinary writs above mentioned was controlled by the Rules of Court of 1964, as they continue to date to be so controlled. More particularly, the principal writs of mandamus, prohibition and certiorari were (and continue to be) governed by Rule 65; the writ of habeas corpus, by Rule 102; and the writ of quo warranto, by Rule 66. The so-called auxiliary writs were (and continue to be) also governed by the same code e.g., preliminary attachment, by Rule 57; preliminary injunction, by Rule 58, receivership, by Rule 59; writ of seizure or delivery in a replevin suit, by Rule 60.

At that time, Section 3 of Rule 65 authorized (as it continues to authorize to date) rendition of judgment in a mandamus action "commanding the defendant, immediately or at some other specified time, to do the act required to be done to protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant." 39 The provision makes plain that the damages are an incident, or the result of, the defendant's wrongful act in failing and refusing to do the act required to be done. It is noteworthy that the Rules of 1940 had an identical counterpart provision. 40

Moreover, Section 4 of the same Rule 65 authorized, as it continues to authorize to date, the filing of the petition "in the Supreme Court, or, if it relates to the acts or omissions of an inferior court, or of a corporation, board, officer or person, in a Court of First Instance (now Regional Trial Court) having jurisdiction thereof," as well as "in the Court of Appeals (whether or not) 41 in aid of its appellate jurisdiction."

Worthy of note, too, is that Rule 66 of the Rules of Court similarly authorizes the recovery of damages in a quo warranto action against a corporate officer an action within the concurrent jurisdiction of the Court of Appeals as follows: 42

Sec. 14. Liability of officer neglecting to deliver property of corporation to receiver. An officer of such corporation who refuses or neglects, upon demand, to deliver over to the receiver all money, property, books, deeds, notes, bills, obligations, and papers of every description within his power or control, belonging to the corporation, or in any wise necessary for the settlement of its affairs, or the discharge of its debts and liabilities, may be punished for contempt as having disobeyed a lawful order of the court, and shall be liable to the receiver for the value of all money or other things so refused or neglected to be surrendered, together with all damages that may have been sustained by the stockholders and creditors of the corporation, or any of them, in consequence of such neglect or refusal.

An award of damages was and is also allowed in connection with the auxiliary writ of preliminary attachment, preliminary injunction or receivership which the Court of Appeals has the power to issue in common with the Supreme Court and the Regional Trial Courts, 43 payable by the sureties of the bond given in support of the writ, upon seasonable application and summary hearing. 44

Since it cannot but be assumed that in formulating, and incorporating in BP 129, the provision governing the jurisdiction of the Intermediate Appellate Court, now Court of Appeals, the Batasang Pambansa was fully cognizant of the relevant provisions of the Rules of Court just cited, as well as the rule against multiplicity of actions, it follows that in conferring on the Court of Appeals original jurisdiction over the special civil action of mandamus, among others, as well as over the issuance of auxiliary writs or processes, the Batasang Pambansa clearly intended that said Court should exercise all the powers then possessed by it under the Rules of Court in relation to said action of mandamus and auxiliary writs, including the adjudication of damages to the petitioner in the action in appropriate cases.

IV

The next issue is whether or not the Solicitor General may properly represent a public official like Dr. Vital-Gozon, who is sued for damages for allegedly refusing to comply with a lawful and executory judgment of competent authority. The doctrine laid down in the Urbano and Co cases already adverted to, 45 is quite clear:

. . . (T)he Office of the Solicitor General is not authorized to represent a public official at any stage of a criminal case. . . .

This observation should apply as well to a public official who is haled to court on a civil suit for damages arising from a felony allegedly committed by him (Article 100, Revised Penal Code). Any pecuniary liability he may be held to account for on the occasion of such civil suit is for his own account. The State is not liable for the same. A fortiori, the Office of the Solicitor General likewise has no authority to represent him in such a civil suit for damages.

It being quite evident that Dr. Vital-Gozon is not here charged with a crime, or civilly prosecuted for damages arising from a crime, there is no legal obstacle to her being represented by the Office of the Solicitor General.

The last issue is whether or not the decision of the Court of Appeals of June 9, 1989 could still be modified after it was pronounced final and executory and was in fact executed with respect to de la Fuente's reinstatement to his position and the payment of the salaries and allowances due him.

There would seem to be no question about the timeliness of de la Fuente's motion for reconsideration of the June 9, 1989 decision. As already narrated, notice of said decision was served on him on the 15th of June, and his motion for reconsideration was presented on June 29, 1989, or fourteen (14) days after receiving a copy of the judgment, i.e., within the fifteen-day period prescribed by Section 1, Rule 37 of the Rules of Court for filing a motion for new trial reconsideration.

This being so, it would certainly have been entirely within the authority of the Court of Appeals, under normal circumstances, to rule on that motion for reconsideration and, in its discretion, act favorably on it, as it did through its Resolution of September 27, 1991 by amending the decision of June 9, 1989, declaring it a partial judgment, and setting a date for reception of evidence on the la Fuente's claim for damages.

It would also appear that the motions for reconsideration of said Resolution of September 27, 1991 separately submitted in Gozon's behalf, by her own private attorney and by the Solicitor General's Office, were filed way out of time. As also already pointed out, notice of that Resolution of September 27, 1991 was served on Gozon's counsel on October 3, 1989 and on Gozon herself on October 4, 1989; but the motion for reconsideration of Atty. Martinez (Gozon's private lawyer) was not filed until November 10, 1989, thirty-eight (38) days afterwards, and that of the Solicitor General, until November 16, 1989, or forty-four (44) days later. What is worse is that, its motion for reconsideration of November 16, 1989 having been denied by a Resolution dated January 11, 1991, notice of which it received on January 18, 1991, the Solicitor General's Office filed still another motion for reconsideration on January 30, 1991, ostensibly directed against that Resolution of January 11, 1991 but actually seeking the setting aside of the Resolution of September 17, 1989. In effect it filed a second motion for reconsideration which, of course, is prohibited by law. 46

However, disposition of the question simply and solely on the foregoing premises is precluded by the fact that prior to the promulgation by the Appellate Court of its Resolution of September 27, 1989. granting de la Fuente's motion for reconsideration of June 29, 1989 de la Fuente had asked for and been granted by the Court of Appeals, authority to execute the decision of June 9, 1989 and had in fact succeeded in bringing about satisfaction thereof, in so far as concerned his reinstatement to the position from which he had been illegally ousted and the payment to him his salaries and allowances.

It has therefore become essential to determine the effect of the execution of said decision of June 9, 1989 at de la Fuente's instance, on the power of the Court of Appeals to modify that judgment as earlier prayed for by de la Fuente in such a way as to concede the latter's capacity to claim damages in his mandamus action, and consequently authorize him to present evidence on the matter.

The general rule is that when a judgment has been satisfied, it passes beyond review, satisfaction being the last act and end of the proceedings, and payment of satisfaction of the obligation thereby established produces permanent and irrevocable discharge; 47 hence, a judgment debtor who acquiesces in and voluntarily complies with the judgment, is estopped from taking an appeal therefrom. 48

On the other hand the question of whether or not a judgment creditor is estopped from appealing or seeking modification of a judgment which has been executed at his instance, is one dependent upon the nature of the judgment as being indivisible or not. This is the doctrine laid down by this Court in a case decided as early as 1925, Verches v. Rios. 49 In that case this Court held that although "there are cases holding the contrary view," where the judgment is indivisible, "the weight of authority is to the effect that an acceptance of full satisfaction of the judgment annihilates the right to further prosecute the appeal; . . . that a party who has recovered judgment on a claim which cannot be split up and made the basis of several causes of action, and afterwards coerced full satisfaction by writ of execution or authority of the court, cannot maintain an appeal from the judgment against the objections of the judgment debtor;" and that even partial execution by compulsory legal process at the instance of a party in whose favor a judgment appealed from was rendered, places said party in estoppel to ask that the judgment be amended, either "by appeal or answer to his adversary's appeal, or otherwise." 50

A converso, where the judgment is divisible, estoppel should not operate against the judgment creditor who causes implementation of a part of the decision by writ of execution. This is the clear import of Verches and the precedents therein invoked. It is an aspect of the principle above mentioned that is fully consistent not only with the dissenting opinion that "(a)cceptance of payment of . . . only the uncontroverted part of the claim . . . should not preclude the plaintiff from prosecuting his appeal, to determine whether he should not have been allowed more," 51 but also with logic and common sense.

In this case, the amended judgment of the Court of Appeals is clearly divisible, satisfaction of which may be "split up." One part has reference to the enforcement of the final and executory judgment of the Civil Service Commission, that de la Fuente should be reinstated to the position of Chief of Clinics (now Chief of Medical Professional Staff) without loss of seniority rights and that he be paid his back salaries and all monetary benefits due him from the date of his illegal demotion. This part is no longer issuable, and has not in truth been controverted by Gozon herself. The other part has reference to the damages which de la Fuente contends he suffered as a result of the unjustified refusal of Gozon and her co-parties to comply with the final and executory judgment of the Civil Service Commission, and which the Appellate Tribunal has allowed him to prove. Obviously, the second part cannot possibly affect the first. Whether de la Fuente succeeds or fails in his bid to recover damages against Gozon, et al. because of their refusal to obey the judgment of the Civil Service Commission, is a contingency that cannot affect the unalterable enforceability of that judgment. Similarly, the enforcement of the Commission's judgment (already accomplished by writ of execution of the Court of Appeals issued at de la Fuente's instance) cannot influence in any manner the question whether or not there was culpable refusal on the part of Gozon, et al. to comply with said judgment when first required so to do, and whether de la Fuente did in fact suffer compensable injury thereby.

It bears stressing that the juridical situation in which de la Fuente finds himself is not of his making. It is a consequence of circumstances not attributable to any fault on his part, i.e., the unwarranted refusal or neglect of his superiors to obey the executory judgment of the Civil Service Commission; the erroneous refusal of the Commission to execute its own decision which made necessary, in de la Fuente's view, the filing of a mandamus action in the Court of Appeals; the initial refusal of the latter Court to acknowledge his right to damages in connection with the mandamus suit; and ultimately, the change of view by the Court of Appeals, on de la Fuente's motion, as regards its competence to take cognizance of the matter of damages in relation to the mandamus proceeding.

Under these circumstances, there was no reason whatsoever to defer concession to de la Fuente of the relief of reinstatement to which he was indisputably already entitled in the meantime that issues arising after finality of the Civil Service Commission's judgment were being ventilated and resolved these issues being, to repeat, whether or not the refusal by Gozon, et al. obey said judgment of the Commission could be justified, and whether or not, by reason of that refusal to obey, de la Fuente did in fact suffer compensable injury.

It was therefore correct for the Court of Appeals, albeit by implication, to treat its judgment as divisible, or capable of being enforced by parts, and to consider de la Fuente as not having been placed in estoppel to pursue his claim for damages by seeking and obtaining authority for a partial execution of the judgment. De la Fuente not being in estoppel, it follows that his motion for reconsideration, timely filed, was not deemed abandoned or waived by the partial execution of the judgment, and jurisdiction of the Court of Appeals to amend the judgment was retained and not lost. It follows, too, that since no motion for reconsideration was filed against, or appeal attempted to be taken from, the Resolution of the Court of Appeals amending its original judgment, within the time

prescribed therefor by law, said amendatory resolution has long since become final and immutable, particularly in so far as it holds itself competent to take cognizance of the matter of damages and authorizes the reception of evidence on de la Fuente's claim therefor.

WHEREFORE, the petition is DENIED, and the challenged Resolutions of September 27, 1989, January 11, 1991 and August 7, 1991 are AFFIRMED, without pronouncement as to costs.

SO ORDERED.

[G.R. No. 118605. April 12, 2000]

EDGARDO MANCENIDO FOR HIMSELF AND OTHER TEACHERS OF CAMARINES NORTE HIGH SCHOOL, petitioners, vs. COURT OF APPEALS, THE PROVINCIAL BOARD, PROVINCIAL SCHOOL BOARD, PROVINCIAL GOVERNOR, PROVINCIAL TREASURER AND PROVINCIAL AUDITOR, ALL OF THE PROVINCE OF CAMARINES NORTE, respondents.

RESOLUTION

QUISUMBING, J.:

This is a petition for review of the decision dated October 17, 1994, by the Court of Appeals in CAG.R. SP No. 34331, enjoining the partial execution of the judgment dated December 20, 1993, of the Regional Trial Court (RTC) of Camarines Norte, Branch 38 in Civil Case No. 5864 entitled "Edgardo Mancenido, et al. v. The Provincial Board, et al. for mandamus and damages.

The antecedent facts as summarized by the Court of Appeals are as follows: h Y

"On September 6, 1990 private respondent [herein petitioner] Eduardo Mancenido filed an action for mandamus and damages with the Regional Trial of Camarines Norte, Branch 38, Daet (docketed as Civil Case No. 5864), against the petitioners provincial board of Camarines Norte, the school board, provincial governor, provincial treasurer, and provincial auditor to pay the teacher's claim for unpaid salary increases.

"On December 19, 1990, petitioners [herein co-respondents] filed their answer to the complaint.

"On December 20, 1993, the lower court rendered a decision ordering the Provincial School Board to appropriate and satisfy plaintiffs claim in the amount of P268,800.00, as unpaid salary increases.

"On February 21, 1994, petitioners [herein co-respondents] filed a notice of appeal.

"On February 24, 1994, respondent judge issued an order giving due course to petitioners appeal.

"On March 1, 1994, private respondents filed a notice of appeal.

"On the same date, private respondents filed an opposition to petitioners notice of appeal and a motion for partial execution of judgment.

"On April 8, 1994, respondent judge issued an order (1) recalling the order of February 23, 1994, granting the appeal of petitioners; (2) approving the appeal of private respondents; and (3) granting their motion for partial execution Sda adsc

"On April 14, 1994, petitioners filed a motion for reconsideration of the order of April 8, 1994

"On June 1, 1994, respondent judge denied the motion for reconsideration.".[1]

Dissatisfied with the denial, respondents herein filed a petition for mandamus, prohibition, and injunction with the Court of Appeals with the prayer, among others, that their notice of appeal be given due course and the trial court be prohibited from enforcing the partial execution of its judgment. Said petition was docketed as CA-G.R. SP No. 34331.

Subsequently, the appellate court rendered its decision of October 17, 1994, the dispositive portion of which reads:

"WHEREFORE, the Court GRANTS the petition for prohibition and mandamus and hereby orders respondent judge: (1) to elevate the original record of Civil Case No. 5864 to the Court of Appeals in due course of appeal; and (2) to desist from the partial execution of the decision in the case.

"No costs.

"SO ORDERED.".[2]

Petitioners then filed a motion to reconsider the appellate court's decision, which motion was denied by the Court of Appeals in its resolution dated December 21, 1994.

Hence, the instant petition anchored on the following assignment of errors:

"a. The Court of Appeals has erred in recognizing the authority of Atty. Jose Lapak to file the subject Notice of Appeal.

"b. The Court of Appeals has erred in recognizing that the service of a copy of the subject Notice of Appeal upon Petitioners themselves is valid.

"c. The Court of Appeals has erred in enjoining the partial execution of the Decision dated December 20, 1993 rendered by the Trial Court.".[3]

For our resolution now are the following issues: (1) Whether a private counsel may represent municipal officials sued in their official capacities; and (2) Whether a Notice of Appeal filed through private counsel and with notice to petitioners and not to their counsel is valid. Scmis

Anent the first issue, petitioners contend that Atty. Jose Lapak could not represent the respondents Provincial Treasurer and Provincial School Board, because both are instrumentalities of the National Government and may be represented only by the Office of the Solicitor General pursuant to Section 35, Chapter 12, Title 3, Book 4 of the Administrative Code of 1987. Only the Provincial Prosecutor of Camarines Norte may represent the Provincial Governor and the Provincial Board in accordance with Section 481 [1], par. B of the Local Government Code of 1991. Petitioners cite Province of Cebu v. IAC, 147 SCRA 447 (1987), where we held that:

"The municipality's authority to employ a private lawyer is expressly limited only to situations where the provincial fiscal is disqualified to represent it (De Guia v. The Auditor General, 44 SCRA 169; Municipality of Bocaue, et al. v. Manotok, 93 Phil. 173; Enriquez, Sr., v. Honorable Gimenez, 107 Phil. 932) as when he represents the province against a municipality.

"The lawmaker, in requiring that the local government should be represented in its court cases by a government lawyer, like its municipal attorney and the provincial fiscal, intended that the local government should not be burdened with the expenses of hiring a private lawyer. The lawmaker also assumed that the interests of the municipal corporation would be best protected if a government lawyer handles its litigations.".[4]

Petitioners also pray that the Notice of Appeal filed by respondents dated February 18, 1994, be deemed a mere scrap of paper. They claim that it was filed by a lawyer not authorized to do so. Even granting that Atty. Lapak could represent respondents in filing the Notice of Appeal, they add, it was not properly served since its copy was sent to petitioners and not to their counsel of record. They conclude that this error is fatal to their appeal. For in Riego v. Riego, 18 SCRA 91 (1966), we held:

"[W]here a party appears by attorney in an action or proceeding in a court of record, all notices thereafter required to be given therein must be given to the attorney and not to the client, and a notice given to the client and not to his attorney is not a notice in law.".[5]

Finally, petitioners point out, since the questioned Notice of Appeal had fatal defects, its filing did not toll the running of the period for the finality of judgment and petitioners could still file a motion for partial execution of the judgment.

After considering petitioners' arguments, however, we find their contentions far from persuasive. x law

Section 481, Article 11, Title V of the Local Government Code (R.A. No. 7160) provides for the appointment of a legal officer, whose function is:

"(I) Represent the local government unit in all civil actions and special proceedings wherein the local government unit or any official thereof, in his official capacity, is a party: Provided, That, in actions or proceedings where a component city or municipality is a party adverse to the provincial government or to another component city or municipality, a special legal officer may be employed to represent the adverse party;"

The Court has previously ruled on the representation of a local government unit by a private attorney. In Municipality of Bocaue v. Manotok, 93 Phil, 173 (1953), and succeeding cases, we held that only when the provincial fiscal is disqualified may the municipal council be authorized to hire the services of a special attorney. We reiterated this in De Guia v. Auditor General, 44 SCRA 169 (1972)..[6] In Enriquez, Sr. v. Gimenez, 107 Phil 932 (1960), we enumerated the instances when the provincial public prosecutor is disqualified from representing a particular municipality, i.e., when the jurisdiction of a case involving the municipality lies with the Supreme Court, when the municipality is a party adverse to the provincial government or to some other municipality in the same province, and when in a case involving the municipality, the provincial prosecutor, his spouse, or his child is involved as a creditor, heir, legatee, or otherwise.

But do these rulings equally apply to local government officials? In Alinsug v. RTC, Br. 58, San Carlos City, Negros Occidental, 225 SCRA 559 (1993), we laid down the rule that, in resolving whether a

local government official may secure the services of private counsel in an action filed against him in his official capacity, the nature of the action and the relief sought are to be considered. In Albuera v. Torres, 102 Phil. 211 (1957), we approved the representation by private counsel of a provincial governor sued in his official capacity, where the complaint contained other allegations and a prayer for moral damages, which, if due from the defendants, must be satisfied by them in their private capacity. In Province of Cebu v. Intermediate Appellate Court, supra, we declared that where rigid adherence to the law on representation would deprive a party of his right to redress for a valid grievance, the hiring of private counsel would be proper.

The present case had its origins in Civil Case No. 5864 filed before the RTC of Camarines Norte, Branch 38, for mandamus and damages. Notwithstanding the fact that the trial court granted mandamus, petitioners appealed to the Court of Appeals since the trial court did not award damages. In view of the damages sought which, if granted, could result in personal liability, respondents could not be deemed to have been improperly represented by private counsel. No error may thus be attributed to the appellate court when it recognized the right of respondents to be represented by private counsel. Korte

On the second issue, petitioners argue that respondents failed to perfect their appeal since respondents served a copy of their Notice of Appeal upon petitioners, and not upon their counsel of record. It is settled that the right to appeal is a mere statutory privilege and may be exercised only in accordance with the Rules of Court..[7]

Section 1, Rule 49 of the Rules of Court provides:

"Section 1. Pleadings, motions, service of papers and proof thereof. - Pleadings, motions, filing and service of papers, and proof thereof, except as otherwise provided, shall be governed by Rules 7, 8, 9, 13, and 15, in so far as they are not inconsistent with the provisions of this rule."

Section 2, Rule 13 of the Rules of Court states:

"Section 2. Papers to be filed and served. - Every order required by its terms to be served, every pleading subsequent to the complaint, every written motion other than one which may be heard ex parte, and every written notice, appearance, demand, offer of judgment or similar papers shall be filed with the court, and served upon the parties affected thereby. If any of such parties has appeared by an attorney or attorneys, service upon him shall be made upon his attorneys or one of them, unless service upon the party himself is ordered by the court. Where one attorney appears for several parties, he shall be entitled only to one copy of any paper served upon him by the opposite side." (Underscoring supplied).

Pursuant to the aforecited Rules, service of notice when a party is represented by counsel should be made upon counsel, and not upon the party. The purpose of the rule is to maintain a uniform procedure calculated to place in competent hands the prosecution of a party's case..[8] We find petitioners' reliance on Riego proper and to the point..[9]

We find, however, that no error was committed by the Court of Appeals when it ordered the trial court (a) to elevate the original record of Civil Case No. 5864 and (b) to desist from any further proceedings in said case. Petitioners did appeal the decision of the trial court to the appellate court within the reglementary period to perfect an appeal. Once a written notice of appeal is filed, appeal is perfected and the trial court loses jurisdiction over the case, both over the record and subject of the case..[10] Missdaa

With respect to the trial court's order of partial execution pending appeal, our view is that it was properly challenged by respondents in a special civil action..[11] We have held that the execution of a judgment before becoming final by reason of appeal is allowed, but only in exceptional cases and only if firmly founded upon good reasons for such execution..[12] In other words, a judge should state in his special order granting a writ of execution pending appeal "good reasons" justifying the issuance of said writ..[13] The Court of Appeals found the order of the judge bereft of such "good reasons." In the absence of good reasons which would justify execution pending appeal, it became incumbent upon the reviewing court, to order the elevation of the records of the case in due course, for its appropriate consideration, otherwise failure to do so might constitute grave abuse of discretion on its part..[14] To attribute error to the Court of Appeals when it rendered the assailed decision is to misunderstand the rationale for the action it had taken.

ACCORDINGLY, the instant petition is hereby DENIED and the decision of the Court of Appeals in CA-G.R. SP No. 34331 AFFIRMED.

SO ORDERED.

[G.R. No. 139792. November 22, 2000]

ANTONIO P. SANTOS, petitioner, vs. THE HONORABLE COURT OF APPEALS, METROPOLITAN AUTHORITY, now known as METROPOLITAN MANILA DEVELOPMENT AUTHORITY, and THE CIVIL SERVICE COMMISSION, respondents.

DECISION

DAVIDE, JR., C.J.:

In this petition for review on certiorari petitioner assails the decision of 19 August 1999 of the Court of Appeals[1] in CA-G.R. SP No. 48301, which held that petitioners separation pay under Section 11 of R.A. No. 7924 should be limited to the number of years of his service in the Metropolitan Manila Authority (MMA) only, excluding his years of service as judge of the Metropolitan Trial Court (MeTC) of Quezon City for which he has already been given retirement gratuity and pension.

The undisputed facts are as follows:

On 18 January 1983, petitioner was appointed Judge of the MeTC of Quezon City, and he thereafter assumed office. After the military-backed EDSA revolt, petitioner was reappointed to the same position.

On 1 April 1992, petitioner optionally retired from the Judiciary under R.A. No. 910,[2] as amended, and received his retirement gratuity under the law for his entire years in the government service; and five years thereafter he has been regularly receiving a monthly pension.

On 2 December 1993, petitioner re-entered the government service. He was appointed Director III of the Traffic Operation Center of the MMA. His appointment was approved by the Civil Service Commission (CSC).

On 1 March 1995, Congress enacted R.A. No. 7924, which reorganized the MMA and renamed it as Metropolitan Manila Development Authority (MMDA). Section 11 thereof reads:

Section 11. Transitory Provisions. To prevent disruption in the delivery of basic urban services pending the full implementation of the MMDAs organizational structure and staffing pattern, all officials and employees of the interim MMA shall continue to exercise their duties and functions and receive their salaries and allowances until they shall have been given notice of change of duties and functions, and of being transferred to another office or position.

...

The civil service laws, rules and regulations pertinent to the displacement of personnel affected by this Act shall be strictly enforced. The national government shall provide such amounts as may be necessary to pay the benefits accruing to displaced employees at the rate of one and one-fourth (1) months salary for every year of service: Provided, That, if qualified for retirement under existing retirement laws, said employees may opt to receive the benefits thereunder.

On 16 May 1996, the President of the Philippines issued Memorandum Order No. 372 approving the Rules and Regulations Implementing R.A. No. 7924. Pursuant thereto, the MMDA issued Resolution No. 16, series of 1996, which, inter alia, authorized the payment of separation benefits to the officials and employees of the former MMA who would be separated as a result of the implementation of R.A. No. 7924.

On 30 August 1996, the MMDA issued a Memorandum to petitioner informing him that in view of his voluntary option to be separated from the service his services would automatically cease effective at the close of office hours on 15 September 1996, and that he would be entitled to separation benefits equivalent to one and one-fourth (1) monthly salary for every year of service as provided under Section 11 of the MMDA Law.

In view of some doubt or confusion as to the extent of his separation benefits, petitioner submitted a Position Paper wherein he asserted that since the retirement gratuity he received under R.A. No. 910, as amended, is not an additional or double compensation, all the years of his government service, including those years in the Judiciary, should be credited in the computation of his separation benefits under R.A. No. 7924. The Assistant Manager for Finance of the MMDA referred the Position Paper to the Regional Office of the CSC-NCR.

On 7 October 1996, Director IV Nelson Acebedo of the CSC-NCR handed down an opinion that the payment of petitioners separation pay must be in accordance with Civil Service Resolution No. 92063, pertinent portions of which read:

[T]he payment of separation/[retirement] benefits cannot be subject to the prohibition against the [sic] double compensation in cases when officers and employees who were previously granted said benefits are rehired or reemployed in another government Agency or Office. Thus, there is no need for separated employees to refund the separation/retirement benefits they received when subsequently reemployed in another government agency or office.

This being so, while an employee who was paid separation/retirement benefits is not required to refund the same once reemployed in the government service, as aforestated, for reasons of equity however, it would be proper and logical that said separation/retirement benefits should nevertheless be deducted from the retirement/[separation] pay to be received by the employee concerned. Moreover, in this instance, the employee concerned has the option either to refund his separation/retirement benefits and claim his gross retirement/separation pay without any deduction corresponding to his separation pay received, or not [to] refund his separation/retirement pay but suffer a deduction of his retirement/separation gratuity for the total amount representing his previous separation/retirement pay received.

His motion for reconsideration having been denied, petitioner elevated the opinion of Director Acebedo to the CSC.

On 21 October 1997, the CSC promulgated Resolution No. 97-4266 affirming the opinion of Director Acebedo and dismissing petitioners appeal. Citing Chaves v. Mathay,[3] it held that petitioner cannot be paid retirement benefits twice one under R.A. No. 910, as amended, and another under R.A. No. 7924 for the same services he rendered as MeTC Judge. He can only exercise one of two options in the computation of his separation pay under R.A. 7924. These options are (1) to refund the gratuity he received under R.A. No. 910, as amended, after he retired from the MeTC and get the full separation pay for his entire years in the government, that is 9 years and 2 months with the MeTC plus two (2) years and eight (8) months for his services as Director III in the defunct MMA, at the rate of one and one-fourth salary for every year of service pursuant to MMDA Memorandum dated 30 August 1996; or (2) to retain the gratuity pay he received for his services as MeTC Judge but an equivalent amount shall be deducted from the separation benefits due from the former MMA for his entire government service.

On 9 June 1998, the CSC promulgated Resolution No. 98-1422 denying petitioners motion for reconsideration. Accordingly, petitioner filed with the Court of Appeals a petition to set aside these Resolutions.

On 19 August 1999, the Court of Appeals promulgated its decision, now challenged in this case. It held that the CSC was correct in dismissing petitioners appeal from the opinion of Director Acebedo. It ratiocinated as follows:

There is no specific rule of law which applies to petitioners case. Nevertheless, the Court finds it equitable to deny his claim for payment of separation pay at the rate of one and one-fourth (1) months salary for every year of his service in government, that is, inclusive of the number of years he served as Judge of the Metropolitan Trial Court of Manila [sic].

Petitioner already received and is continually receiving gratuity for his years of service as a Metropolitan Trial Court Judge. Equity dictates that he should no longer be allowed to receive further gratuity for said years of service in the guise of separation pay.

Suffice it to state that upon his retirement from his office as a Judge, petitioner has already closed a chapter of his government service. The State has already shown its gratitude for his services when he was paid retirement benefits under Republic Act No. 901 [sic]. For that is what retirement benefits are for. Rewards [are] given to an employee who has given up the best years of his life to the service of his country (Govt. Service Insurance System v. Civil Service Commission, 245 SCRA 179, 188).

Now, the state again wishes to show its gratitude to petitioner by awarding him separation pay for his services as a director of the Metro Manila Authority (MMA), another chapter of petitioners

government service which has come to a close by the reorganization of the MMA into the Metropolitan Manila Development Authority.

The Court, in limiting the computation of petitioners separation pay to the number of years of his service at the MMA, merely is implementing the ruling in Chavez, Sr. vs. Mathay (37 SCRA 776), which ruling, if not actually in point, is nevertheless applicable owing to its common-sense consideration. Said ruling reads:

The common-sense consideration stated by Mr. Justice J.B.L. Reyes for the Court in Espejo, that if a retiree is being credited with his years of service under his first retirement in computing his gratuity under his second retirement, it is but just that the retirement gratuity received by him under his first retirement should also be charged to his account, manifestly govern the case at bar. It is but in accordance with the rule consistently enunciated by the Court as in Anciano v. Otadoy, affirming Borromeo, that claims for double retirement or pension such as petitioners, would run roughshod over the well-settled rule that in the absence of an express legal exception, pension and gratuity laws should be so construed as to preclude any person from receiving double pension. (p. 780, underscoring supplied)

The case at bench is not, strictly speaking, about double pension. It is, however, about the interpretation of a gratuity law, viz., Section 11 of Republic Act No. 7924 which awards separation pay to those government employees who were displaced by the reorganization of the MMA into the MMDA, which should be construed to preclude a government employee from receiving double gratuity for the same years of service.

We affirm the assailed judgment. We agree with the Court of Appeals and the Civil Service Commission that for the purpose of computing or determining petitioners separation pay under Section 11 of R.A. No. 7924, his years of service in the Judiciary should be excluded and that his separation pay should be solely confined to his services in the MMA.

In the first place, the last paragraph of Section 11 of R.A. No. 7924 on the grant of separation pay at the rate of one and one-fourth (1) months of salary for every year of service cannot by any stretch of logic or imagination be interpreted to refer to the total length of service of an MMA employee in the government, i.e., to include such service in the government outside the MMA. Since it allows the grant of separation pay to employees who were to be displaced thereby the separation pay can be based only on the length of service in the MMA. The displacement amounted to an abolition of the office or position of the displaced employees, such as that of petitioner. The rule is settled that Congress may abolish public offices. Such a power is a consequent prerogative of its power to create public offices.[4] However, the power to abolish is subject to the condition that it be exercised in good faith.[5] The separation partook of the nature of a disturbance of compensation; hence, the separation pay must relate only to the employment thus affected.

Second, petitioner himself must have realized that Section 11 does not allow the tacking in of his previous government service. If he were convinced that it does he could have instead applied for retirement benefits, since by adding his years of service in the MMA to his previous years of service in the Government he could have retired under the third paragraph of Section 11, which pertinently reads:

Provided, That, if qualified for retirement under existing retirement laws, said employee may opt to receive the benefits thereunder.

Third, after the approval of his optional retirement on 1 April 1992, petitioner was fully paid of his retirement gratuity under R.A. No. 910, as amended; and five years thereafter he has been receiving a monthly pension.

The petitioner cannot take refuge under the second paragraph of Section 8 of Article IX-B of the Constitution, which provides:

Pensions or gratuities shall not be considered as additional, double, or indirect compensation.

This provision simply means that a retiree receiving pension or gratuity can continue to receive such pension or gratuity even if he accepts another government position to which another compensation is attached.[6]

Indeed, the retirement benefits which petitioner had received or has been receiving under R.A. No. 910, as amended, do not constitute double compensation. He could continue receiving the same even if after his retirement he had been receiving salary from the defunct MMA as Director III thereof. This is but just because said retirement benefits are rewards for his services as MeTC Judge, while his salary was his compensation for his services as Director III of the MMA.

However, to credit his years of service in the Judiciary in the computation of his separation pay under R.A. No. 7924 notwithstanding the fact that he had received or has been receiving the retirement benefits under R.A. No. 910, as amended, would be to countenance double compensation for exactly the same services, i.e., his services as MeTC Judge. Such would run counter to the policy of this Court against double compensation for exactly the same services.[7] More important, it would be in violation of the first paragraph of Section 8 of Article IX-B of the Constitution, which proscribes additional, double, or indirect compensation. Said provision reads:

No elective or appointive public officer or employee shall receive additional, double, or indirect compensation, unless specifically authorized by law .

Section 11 of R.A. No. 7924 does not specifically authorize payment of additional compensation for years of government service outside of the MMA.

WHEREFORE, finding no reversible error in the judgment appealed from, the petition in this case is DENIED for want of merit, and the decision of 19 August 1999 of the Court of Appeals in CA-G.R. SP No. 48301 is AFFIRMED.

Costs against petitioner.

SO ORDERED.

G.R. No. 97419 July 3, 1992

GAUDENCIO T. CENA, petitioner, vs. THE CIVIL SERVICE COMMISSION, and THE HON. PATRICIA A. STO. TOMAS, in her capacity as Chairman of the Civil Service Commission, respondents.

MEDIALDEA, J.:

May a government employee who has reached the compulsory retirement age of 65 years, but who has rendered 11 years, 9 months and 6 days of government service, be allowed to continue in the service to complete the 15-year service requirement to enable him to retire with the benefits of an old-age pension under Section 11 par. (b) of the Revised Government Service Insurance Act of 1977? This is the issue raised before this Court by petitioner Gaudencio T. Cena, a Registrar of the Register of Deeds of Malabon, Metro Manila.

The facts are not disputed.

Petitioner Gaudencio T. Cena entered the government service on November 16, 1978 as Legal Officer II of the Law Department of Caloocan City where he stayed for seven (7) years until his transfer on November 16, 1986 to the Office of the Congressman of the First District of Caloocan

City where he worked for only three (3) months, or until February 15, 1987, as Supervising Staff Officer.

On July 16, 1987, he was appointed as Registrar of the Register of Deeds of Malabon, Metro Manila, the position he held at the time he reached the compulsory retirement age of 65 years on January 22, 1991. By then, he would have rendered a total government service of 11 years, 9 months and 6 days. Before reaching his 65th birthday, he requested the Secretary of Justice, through Administrator Teodoro G. Bonifacio of the Land Registration Authority (LRA), that he be allowed to extend his service to complete the 15-year service requirement to enable him to retire with full benefits of old-age pension under Section 11, par. (b) of P.D. 1146.

The LRA Administrator, for his part, sought a ruling from the Civil Service Commission whether or not to allow the extension of service of petitioner Cena as he is covered by Civil Service Memorandum No. 27, series 1990. In his 2nd Indorsement dated August 6, 1990, the LRA Administrator observed that if petitioner's service as of January 22, 1991 of 10 years, 6 months and 6 days (should be 11 years, 9 months and 6 days) would be extended to 15 years, he would have to retire on April 15, 1994 at the age of 68 years.

On July 31, 1990, the Civil Service Commission denied petitioner Cena's request for extension of service in its CSC Resolution No. 90-681, declaring therein, that Mr. Cena shall be considered retired from the service on January 22, 1991, the date when he shall reach the compulsory retirement age of sixty-five (65) years, unless his retention for another year is sought by the head of office under Civil Service Memorandum Circular No. 27, s. 1990.

Petitioner Cena filed a motion for reconsideration. On October 17, 1990, the Civil Service Commission set aside its CSC Resolution No. 90-681 and allowed Gaudencio Cena a one-year extension of his service from January 22, 1991 to January 22, 1992, citing CSC Memorandum Circular No. 27, series of 1990, the pertinent of which reads:

1. Any request for the extension of service of compulsory retirees to complete the fifteen (15) years service requirement for retirement shall be allowed only to permanent appointees in the career service who are regular members of the Government Service Insurance System (GSIS), and shall be granted for a period not exceeding one (1) year.

On January 22, 1991, petitioner's second motion for reconsideration was denied in its CSC Resolution No. 91-101.

Hence, the instant petition for review on certiorari alleging that the Civil Service Commission committed a grave abuse of discretion when it granted the extension of petitioner's service as

Registrar of Deeds of Malabon, Metro Manila, for a period of only one (1) year pursuant to CSC Memorandum Circular No. 27, Series of 1990, instead of three (3) years and three (3) months to complete the 15-year service requirement for his retirement with full benefits as provided under Section 11, par. (b) of Presidential Degree No. 1146, otherwise known as the Revised Government Service Insurance Act of 1977.

Petitioner contends that reliance of the Commission on par. (1) of Memorandum Circular No. 27 allowing an extension of service of a compulsory retiree for a period not exceeding one (1) year is both erroneous and contrary to the "benevolent and munificent intentions" of Section 11 of P.D. 1146. Petitioner points out that par. (b), Section 11 of P.D. No. 1146 does not limit nor specify the maximum number of years the retiree may avail of to complete the 15 years of service.

The Solicitor-General agrees with petitioner Cena. He argues that the questioned provision being generally worded, Section 11 par. (b), P.D. 1146 has general application, thus respondent CSC has no authority to limit through CSC Memorandum Circular No. 27 the privilege under said section to government employees who lack just one year to complete the 15-year service requirement.

The Civil Service Commission, however, contends that since public respondent CSC is the central personnel agency of the government, it is vested with the power and authority, among others, to grant or allow extension of service beyond retirement age pursuant to Section 14 par. (14), Chapter 3, Subtitle A, Title I, Book V of Executive Order No. 292 (Administrative Code of 1987). In interpreting Section 11 par. (b) of P.D. 1146, public respondent CSC contends that the phrase "Provided, That if he has less than fifteen years of service, he shall be allowed to continue in the service to complete the fifteen years", is qualified by the clause: "Unless the service is extended by appropriate authorities," which means that the extension of service must be first authorized by the Commission, as the appropriate authority referred to in Section 11, par. (b), P.D. 1146, before the service of a compulsory retiree (one who has already reached age of 65 years with at least 15 years of service) can be extended.

We grant the petition.

Section 12, par. (14), Chapter 3, Subtitle A, Title I, Book V of the Administrative Code of 1987 (November 24, 1987) cannot be interpreted to authorize the Civil Service Commission to limit to only one (1) year the extension of service of an employee who has reached the compulsory retirement age of 65 without having completed 15 years of service, when said limitation his no relation to or connection with the provision of the law supposed to be carried into effect.

Section 12, par. (14), Chapter 3, Subtitle A, Title I, Book V of the Administrative Code of 1987 provides thus:

Sec. 12. Powers and Functions. The Commission shall have the following powers and functions:

xxx xxx xxx

(14) Take appropriate action on all appointments and other personnel matters in the Civil Service including extension of service beyond retirement age;

As a law of general application, the Administrative Code of 1987 cannot authorize the modification of an express provision of a special law (Revised Government Service Insurance of 1977). Otherwise, the intent and purpose of the provisions on retirement and pension of the Revised Government Service Insurance Act of 1977 (P.D. 1146) would be rendered nugatory and meaningless.

Section 11 paragraph (b) of the Revised Government Service Insurance Act of 1977 expressly provides, thus:

Sec. 11. Conditions for Old-Age Pension. (a) Old-age pension shall be paid to a member who:

xxx xxx xxx

(b) Unless the service is extended by appropriate authorities, retirement shall be compulsory for an employee of sixty-five years of age with at least fifteen years of service: Provided, That if he has less than fifteen years of service, he shall be allowed to continue in the service to complete the fifteen years. (Emphasis supplied)

Being remedial in character, a statute creating a pension or establishing retirement plan should be liberally construed and administered in favor of the persons intended to be benefited thereby. The liberal approach aims to achieve the humanitarian purposes of the law in order that the efficiency, security and well-being of government employees may be enhanced (Bautista vs. Auditor General, 104 Phil 428; Ortiz vs. Commission on Elections, G.R. No. L-78957, June 28, 1988, 162 SCRA 812).

The Court stated in Abad Santos vs. Auditor General, 79 Phil. 176, that a pension partakes of the nature of "retained wages" of the retiree for a double purpose: (1) to entice competent men and women to enter the government service, and (2) permit them to retire from the service with relative security, not only for those who have retained their vigor, but more so for those who have been incapacitated by illness or accident.

We have applied the liberal approach in interpreting statutes creating pension or establishing retirement plans in cases involving officials of the Judiciary who lacked the age and service requirement for retirement. We see no cogent reason to rule otherwise in the case of ordinary employees of the Executive Branch, as in the case of petitioner Cena, who has reached 65 but opted to avail of the statutory privilege under Section 11 par. (b) of P.D. 1146 to continue in the service to complete the 15-year service requirement in order to avail of old-age pension.

In Re: Application for Gratuity Benefits of Associate Justice Efren I. Plana, Adm. Matter No. 5460, En Banc Resolution, March 24, 1988, the Court, applying the liberal approach, ruled that Justice Plana, who at the time of his courtesy resignation on March 25, 1986 lacked a few months to meet the age requirement for retirement under the law, is entitled to full retirement benefits under R.A. 910 because his accrued leave credits would have entitled him to go on leave until beyond the age requirement for retirement.

The above ruling of the Court was reiterated in Re: Application for Retirement under Rep. Act No. 910 of Associate Justice Ramon B. Britanico of the Intermediate Appellate Court, Adm. Matter No. 6484 Ret., May 15, 1989. By liberally interpreting Section 3 of R.A. 910, as amended, in favor of the persons intended to be benefited by them, the Court also allowed the conversion of the application for disability retirement of Justice Ruperto Martin under said Section 3 of R.A. 910, as amended (10-year lump sum without the lifetime annuity) into an application for voluntary retirement under Section 1 (5-year lump sum with lifetime annuity) eleven years after his disability retirement was approved on January 10, 1978 (In Re: Application for Life Pension under Rep. Act 910. Ruperto G. Martin, applicant, 187 SCRA 477). The ten-year lump sum which he had received was considered by the Court as payment under Section 1 of the five-year lump sum, to which he was entitled, and of his monthly pensions for the next five years.

However, the Court pointed out in Re: Gregorio G. Pineda, Adm. Matter No. 2076-RET., July 13, 1990, and its six (6) companion cases, 187 SCRA 469, that when the Court allows seeming exceptions to fixed rules for certain retired Judges or Justices, there are ample reasons behind each grant of an exception. The crediting of accumulated leaves to make up for lack of required age or length of service is not done indiscriminately. It is always on case to case basis.

There is thus no justifiable reason in not allowing ordinary employees in the Executive Branch on a case to case basis, to continue in the service to complete the 15-year service requirement to avail of the old-age pension under Section 11 of P.D. 1146. By limiting the extension of service to only one (1) year would defeat the beneficial intendment of the retirement provisions of P.D. 1146.

In resolving the question whether or not to allow a compulsory retiree to continue in the service to complete the 15-year service, there must be present an essential factor before an application under Section 11 par. (b) of P.D. 1146 may be granted by the employer or government office concerned. In

the case of officials of the Judiciary, the Court allows a making up or compensating for lack of required age or service only if satisfied that the career of the retiree was marked by competence, integrity, and dedication to the public service (Re: Gregorio Pineda, supra). It must be so in the instant case.

It is interesting to note that the phrase "he shall be allowed to continue in the service to complete the fifteen years" found in Section 11 (b) of P.D. 1146 is a reproduction of the phrase in the original text found in Section 12 (e) of Commonwealth Act 186, as amended, otherwise known as the "Government Service Insurance Act" approved on November 14, 1936. There is nothing in the original text as well as in the revised version which would serve as the basis for providing the allowable extension period to only one (1) year. There is likewise no indication that Section 11 par. (b) of P.D. 1146 contemplates a borderline situation where a compulsory retiree on his 65th birthday has completed more than 14, but less than 15 years of government service., i.e. only a few months short of the 15-year requirement which would enable him to collect an old-age pension.

While it is true that the Administrative Code of 1987 has given the Civil Service Commission the authority "to take appropriate action on all appointments and other personnel matters in the Civil Service including extension of service beyond retirement age", the said provision cannot be extended to embrace matters not covered by the Revised Government Service Insurance Act of 1977 (Sto. Tomas vs. Board of Tax Appeals, 93 Phil. 376, 382, "citing 12 C.J. 845-46). The authority referred to therein is limited only to carrying into effect what the special law, Revised Government Insurance Act of 1977, or any other retirement law being invoked provides. It cannot go beyond the terms and provisions of the basic law.

The Civil Service Commission Memorandum Circular No. 27 being in the nature of an administrative regulation, must be governed by the principle that administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions (People vs. Maceren, G.R. No. L-32166, October 18, 1977, 79 SCRA 450; Teoxon v. Members of the Board of Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel v. General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660; Deluao v. Casteel, L-21906, August 29, 1969, 29 SCRA 350).

The pronouncement of the Court in the case of Augusta Toledo vs. Civil Service Commission, et al., G.R. No. 92646-47, October 4, 1991, squarely applies in the instant case. We declared in the case of Toledo that the rule prohibiting 57-year old persons from employment, reinstatement, or re-employment in the government service provided under Section 22, Rule III of the Civil Service Rules on Personnel Actions and Policies (CSRPAP) cannot be accorded validity, because it is entirely a creation of the Civil Service Commission, having no basis in the law itself which it was meant to implement and it cannot be related to or connected with any specific provision of the law which it is meant to carry into effect. The Court, speaking thru Justice Edgardo L. Paras, stated, thus:

The power vested in the Civil Service Commission was to implement the law or put it into effect, not to add to it; to carry the law into effect or execution, not to supply perceived omissions in it. "By its administrative regulations, of course, the law itself can not be extended; said regulations cannot amend an act of Congress." (Teoxon v. Members of the Board of Administrators, Philippine Veterans Administration, 33 SCRA 585, 589 [1970], citing Santos v. Estenzo, 109 Phil. 419 [1960]; see also, Animos v. Philippine Veterans Affairs Office, 174 SCRA 214, 223-224 [1989] in turn citing Teoxon).

The considerations just expounded also conduce to the conclusion of the invalidity of Section 22, Rule III of the CSRPAP. The enactment of said section, relative to 57-year old persons, was also an act of supererogation on the part of the Civil Service Commission since the rule has no relation to or connection with any provision of the law supposed to be carried into effect. The section was an addition to or extension of the law, not merely a mode of carrying it into effect. (Emphasis supplied)

The governing retirement law in the instant case is P.D. 1146 otherwise known as the "Revised Government Service Insurance Act of 1977." The rule on limiting to only one (1) year the extension of service of an employee who has reached the compulsory retirement age of 65 years, but has less than 15 years of service under Civil Service Memorandum Circular No. 27 s. 1990, cannot likewise be accorded validity because it has no relation to or connection with any provision of P.D. 1146 supposed to be carried into effect. The rule was an addition to or extension of the law, not merely a mode of carrying it into effect. The Civil Service Commission has no power to supply perceived omissions in P.D. 1146.

As a matter of fact, We have liberally applied Section 11 par. (b) of P.D. 1146 in two (2) recent cases where We allowed two employees in the Judiciary who have reached the age of 65 to continue in the government service to complete the 15-year service requirement to be entitled to the benefits under P.D. 1146.

In a resolution dated January 23, 1990 in A.M. No. 87-7-1329-MTC, We allowed Mrs. Florentina J. Bocade, Clerk of Court, Municipal Trial Court, Dagami, Leyte, who at the time she reached the age of 65 years on October 16, 1987 had only 10 years of government service, to continue her services until October 10, 1992. Thus, she was given a period of 5 years, to complete the 15-year service requirement to be entitled to the retirement benefits under Section 11 par. (b) of P.D. 1146. The Court observed that Mrs. Bocade is still performing her duties without any adverse complaints from her superior and that she is physically fit for work per report of the Medical Clinic.

The Court, in a resolution dated April 18, 1991, in A.M. No. 91-3-003-SC.-Re: Request for the extension of service of Mrs. Crisanta T. Tiangco, allowed Mrs. Crisanta T. Tiangco, Budget Officer V, Budget Division, Fiscal Management and Budget Office of the Supreme Court to continue her services until February 10, 1995. She was granted a period of 3 years, 10 months and 13 days because she has to her credit only 11 years, 1 month and 17 days of government service at the time

she reached the age of 65 years on March 29, 1991 in order that she be entitled to the retirement benefits under P.D. No. 1146.

It is erroneous to apply to petitioner Cena who has rendered 11 years, 9 months and 6 days of government service, Section 12, par. (b) of P.D. 1146 which provides that "a member who has rendered at least three (3) years but less than 15 years of service at the time of separation shall, . . . upon separation after age sixty, receive a cash equivalent to 100% of his average monthly compensation for every year of service."

The applicable law should be Section 11 par. (b) of P.D. 1146 which allows him to extend his 11 years, 9 months and 6 days to complete the 15-year of service consistent with the beneficial intendment of P.D. 1146 and which right is subject to the discretion of the government office concerned.

Section 12 par. (b) of P.D. 1146 does not apply to the case of herein Cena, because he opted to continue in the service to complete the 15-year service requirement pursuant to Section 11 par. (b) of P.D. 1146. The completion of the 15-year service requirement under Section 11 par. (b) partakes the nature of a privilege given to an employee who has reached the compulsory retirement age of 65 years, but has less than 15 years of service. If said employee opted to avail of said privilege, he is entitled to the benefits of the old-age pension. On the other hand, if the said employee opted to retire upon reaching the compulsory retirement age of 65 years although he has less than 15 years of service, he is entitled to the benefits provided for under Section 12 of P.D. 1146 i.e. a cash equivalent to 100% of his average monthly compensation for every year of service.

The right under Section 11, par. (b) is open to all employees similarly situated, so it does not offend the constitutional guarantee of equal protection of the law. There is nothing absurd or inequitable in rewarding an employee for completion of the 15-year service beyond the retirement age. If he would be better off than the one who has served for 14 years but who is separated from the service at the age of 64, it would be only just and proper as he would have worked for the whole period of 15 years as required by law for entitlement of the old-age pension. Indeed, a longer service should merit a greater reward. Besides, his entitlement to the old-age pension is conditioned upon such completion. Thus, if the service is not completed due to death or incapacity, he would be entitled to the benefit under Section 12, par. (b), i.e. cash equivalent to 100% of his average monthly compensation for every year of service.

Finally, in view of the aforesaid right accorded under Section 11, par. (b) of P.D. 1146, petitioner Cena should not be covered by Memorandum Circular No. 65 issued by then Executive Secretary Catalino Macaraig on June 14, 1988. Memorandum Circular No. 65 allowing retention of service for only six (6) months for "extremely meritorious reasons" should apply only to employees or officials who have reached the compulsory retirement age of 65 years but who, at the same time, have completed the 15-year service requirement for retirement purposes. It should not apply to employees or officials who have reached the compulsory retirement age of 65 years, but who opted

to avail of the old-age pension under par. (b), Section 11 of P.D. 1146, in which case, they are allowed, at the discretion of the agency concerned, to complete the 15-year service requirement.

ACCORDINGLY, the petition is granted. The Land Registration Authority (LRA) of the Department of Justice has the discretion to allow petitioner Gaudencio Cena to extend his 11 years, 9 months and 6 days of government service to complete the 15-year service so that he may retire with full benefits under Section 11 par. (b) of P.D. 1146.

SO ORDERED.

G.R. No. 111812 May 31, 1995

DIONISIO M. RABOR, petitioner, vs. CIVIL SERVICE COMMISSION, respondent.

FELICIANO, J.:

Petitioner Dionisio M. Rabor is a Utility Worker in the Office of the Mayor, Davao City. He entered the government service as a Utility worker on 10 April 1978 at the age of 55 years.

Sometime in May 1991, 1 Alma, D. Pagatpatan, an official in the Office of the Mayor of Davao City, advised Dionisio M. Rabor to apply for retirement, considering that he had already reached the age of sixty-eight (68) years and seven (7) months, with thirteen (13) years and one (1) month of government service. Rabor responded to this advice by exhibiting a "Certificate of Membership" 2 issued by the Government Service Insurance System ("GSIS") and dated 12 May 1988. At the bottom of this "Certificate of Membership" is a typewritten statement of the following tenor: "Service extended to comply 15 years service reqts." This statement is followed by a non-legible initial with the following date "2/28/91."

Thereupon, the Davao City Government, through Ms. Pagatpatan, wrote to the Regional Director of the Civil Service Commission, Region XI, Davao City ("CSRO-XI"), informing the latter of the foregoing and requesting advice "as to what action [should] be taken on this matter."

In a letter dated 26 July 1991, Director Filemon B. Cawad of CSRO-XI advised Davao City Mayor Rodrigo R. Duterte as follows:

Please be informed that the extension of services of Mr. Rabor is contrary to M.C. No. 65 of the Office of the President, the relevant portion of which is hereunder quoted:

Officials and employees who have reached the compulsory retirement age of 65 years shall not be retained the service, except for extremely meritorious reasons in which case the retention shall not exceed six (6) months.

IN VIEW WHEREFORE, please be advised that the services of Mr. Dominador [M.] Rabor as Utility Worker in that office, is already non-extend[i]ble. 3

Accordingly, on 8 August l991, Mayor Duterte furnished a copy of the 26 July 1991 letter of Director Cawad to Rabor and advised him "to stop reporting for work effective August 16, 1991." 4

Petitioner Rabor then sent to the Regional Director, CSRO-XI, a letter dated 14 August 1991, asking for extension of his services in the City Government until he "shall have completed the fifteen (15) years service [requirement] in the Government so that [he] could also avail of the benefits of the retirement laws given to employees of the Government." The extension he was asking for was about two (2) years. Asserting that he was "still in good health and very able to perform the duties and functions of [his] position as Utility Worker," Rabor sought "extension of [his] service as an exception to Memorandum Circular No. 65 of the Office of the President." 5 This request was denied by Director Cawad on 15 August 1991.

Petitioner Rabor next wrote to the Office of the President on 29 January 1992 seeking reconsideration of the decision of Director Cawad, CSRO-XI. The Office of the President referred Mr. Rabor's letter to the Chairman of the Civil Service Commission on 5 March 1992.

In its Resolution No. 92-594, dated 28 April 1992, the Civil Service Commission dismissed the appeal of Mr. Rabor and affirmed the action of Director Cawad embodied in the latter's letter of 26 July 1991. This Resolution stated in part:

In his appeal, Rabor requested that he be allowed to continue rendering services as Utility Worker in order to complete the fifteen (15) year service requirement under P.D. 1146.

CSC Memorandum Circular No. 27, s. 1990 provides, in part:

1. Any request for extension of service of compulsory retirees to complete the fifteen years service requirement for retirement shall be allowed only to permanent appointees in the career service who are regular members of the Government Service Insurance System (GSIS) and shall be granted for a period of not exceeding one (1) year.

Considering that as early as October 18, 1988, Rabor was already due for retirement, his request for further extension of service cannot be given due course. 6 (Emphasis in the original)

On 28 October 1992, Mr. Rabor sought reconsideration of Resolution No. 92-594 of the Civil Service Commission this time invoking the Decision of this Court in Cena v. Civil Service Commission. 7 Petitioner also asked for reinstatement with back salaries and benefits, having been separated from the government service effective 16 August 1991. Rabor's motion for reconsideration was denied by the Commission.

Petitioner Rabor sent another letter dated 16 April 1993 to the Office of the Mayor, Davao City, again requesting that he be allowed to continue rendering service to the Davao City Government as Utility Worker in order to complete the fifteen (15) years service requirement under P.D. No. 1146. This request was once more denied by Mayor Duterte in a letter to petitioner dated 19 May 1993. In this letter, Mayor Duterte pointed out that, under Cena grant of the extension of service was discretionary on the part of the City Mayor, but that he could not grant the extension requested. Mayor Duterte's letter, in relevant part, read:

The matter was referred to the City Legal Office and the Chairman of the Civil Service Commission, in the advent of the decision of the Supreme Court in the Cena vs. CSC, et al. (G.R. No. 97419 dated July 3, 1992), for legal opinion. Both the City Legal Officer and the Chairman of the Civil Service Commission are one in these opinion that extending you an appointment in order that you may be able to complete the fifteen-year service requirement is discretionary [on the part of] the City Mayor.

Much as we desire to extend you an appointment but circumstances are that we can no longer do so. As you are already nearing your 70th birthday may no longer be able to perform the duties attached to your position. Moreover, the position you had vacated was already filled up.

We therefore regret to inform you that we cannot act favorably on your request. 8 (Emphases supplied)

At this point, Mr. Rabor decided to come to this Court. He filed a Letter/Petition dated 6 July 1993 appealing from Civil Service Resolution No. 92-594 and from Mayor Duterte's letter of 10 May 1993.

The Court required petitioner Rabor to comply with the formal requirements for instituting a special civil action of certiorari to review the assailed Resolution of the Civil Service Commission. In turn, the Commission was required to comment on petitioner's Letter/Petition. 9 The Court subsequently noted petitioner's Letter of 13 September 1993 relating to compliance with the mentioned formal requirements and directed the Clerk of Court to advise petitioner to engage the services of counsel or to ask for legal assistance from the Public Attorney's Office (PAO). 10

The Civil Service Commission, through the Office of the Solicitor General, filed its comment on 16 November 1993. The Court then resolved to give due course to the Petition and required the parties to file memoranda. Both the Commission and Mr. Rabor (the latter through PAO counsel) did so.

In this proceeding, petitioner Rabor contends that his claim falls squarely within the ruling of this Court in Cena v. Civil Service Commission. 11

Upon the other hand, the Commission seeks to distinguish this case from Cena. The Commission, through the Solicitor General, stressed that in Cena, this Court had ruled that the employer agency, the Land Registration Authority of the Department of Justice, was vested with discretion to grant to Cena the extension requested by him. The Land Registration Authority had chosen not to exercise its discretion to grant or deny such extension. In contrast, in the instant case, the Davao City Government did exercise its discretion on the matter and decided to deny the extension sought by petitioner Rabor for legitimate reasons.

While the Cena decision is barely three (3) years old, the Court considers that it must reexamine the doctrine of Cena and the theoretical and policy underpinnings thereof. 12

We start by recalling the factual setting of Cena.

Gaudencio Cena was appointed Registrar of the Register of Deeds of Malabon, Metropolitan Manila, on 16 July 1987. He reached the compulsory retirement age of sixty-five (65) years on 22 January 1991. By the latter date, his government service would have reached a total of eleven (11) years, nine (9) months and six (6) days. Before reaching his 65th birthday, Cena requested the Secretary of Justice, through the Administrator of the Land Registration Authority ("LRA") that he be allowed to extend his service to complete the fifteen-year service requirement to enable him to retire with the full benefit of an Old-Age Pension under Section 11 (b) of P.D. No. 1146. If Cena's request were granted, he would complete fifteen (15) years of government service on 15 April 1994, at the age of sixty-eight (68) years.

The LRA Administrator sought a ruling from the Civil Service Commission on whether or not Cena's request could be granted considering that Cena was covered by Civil Service Memorandum No. 27, Series of 1990. On 17 October 1990, the Commission allowed Cena a one (1) year extension of his

service from 22 January 1991 to 22 January 1992 under its Memorandum Circular No. 27. Dissatisfied, Cena moved for reconsideration, without success. He then came to this Court, claiming that he was entitled to an extension of three (3) years, three (3) months and twenty-four (24) days to complete the fifteen-year service requirement for retirement with full benefits under Section 11 (b) of P.D. No. 1146.

This Court granted Cena' s petition in its Decision of 3 July 1992. Speaking through Mr. Justice Medialdea, the Court held that a government employee who has reached the compulsory retirement age of sixty-five (65) years, but at the same time has not yet completed fifteen (15) years of government service required under Section 11 (b) of P.D. No. 1146 to qualify for the Old-Age Pension Benefit, may be granted an extension of his government service for such period of time as may be necessary to "fill up" or comply with the fifteen (15)-year service requirement. The Court also held that the authority to grant the extension was a discretionary one vested in the head of the agency concerned. Thus the Court concluded:

Accordingly, the Petition is GRANTED. The Land Registration Authority (LRA) and Department of Justice has the discretion to allow petitioner Gaudencio Cena to extend his 11 years, 9 months and 6 days of government to complete the fifteen-year service so that he may retire with full benefits under Section 11, paragraph (b) of P.D. 1146. 13 (Emphases supplied)

The Court reached the above conclusion primarily on the basis of the "plain and ordinary meaning" of Section 11 (b) of P.D. No. 1146. Section 11 may be quoted in its entirety:

Sec. 11 Conditions for Old-Age Pension. (a) Old-Age Pension shall be paid to a member who

(1) has at least fifteen (15) years of service;

(2) is at least sixty (60) years of age; and

(3) is separated from the service.

(b) unless the service is extended by appropriate authorities, retirement shall be compulsory for an employee at sixty-five-(65) years of age with at least fifteen (15) years of service; Provided, that if he has less than fifteen (15) years of service, he shall he allowed to continue in the service to completed the fifteen (15) years. (Emphases supplied)

The Court went on to rely upon the canon of liberal construction which has often been invoked in respect of retirement statutes:

Being remedial in character, a statute granting a pension or establishing [a] retirement plan should be liberally construed and administered in favor of persons intended to be benefitted thereby. The liberal approach aims to achieve the humanitarian purposes of the law in order that efficiency, security and well-being of government employees may be enhanced. 14 (Citations omitted)

While Section 11 (b) appeared cast in verbally unqualified terms, there were (and still are) two (2) administrative issuances which prescribe limitations on the extension of service that may be granted to an employee who has reached sixty-five (65) years of age.

The first administrative issuance is Civil Service Commission Circular No. 27, Series of 1990, which should be quoted in its entirety:

TO : ALL HEADS OF DEPARTMENTS, BUREAUS AND AGENCIES OF THE NATIONAL/LOCAL GOVERNMENTS INCLUDING GOVERNMENT- OWNED AND/OR CONTROLLED CORPORATIONS WITH ORIGINAL CHARTERS.

SUBJECT : Extension of Service of Compulsory Retiree to Complete the Fifteen Years Service Requirement for Retirement Purposes.

Pursuant to CSC Resolution No. 90-454 dated May 21, 1990, the Civil Service Commission hereby adopts and promulgates the following policies and guidelines in the extension of services of compulsory retirees to complete the fifteen years service requirement for retirement purposes:

1. Any request for the extension of service of compulsory retirees to complete the fifteen (15) years service requirement for retirement shall be allowed only to permanent appointees in the career service who are regular members of the Government Service Insurance System (GSIS), and shall be granted for a period not exceeding one (1) year.

2. Any request for the extension of service of compulsory retiree to complete the fifteen (15) years service requirement for retirement who entered the government service at 57 years of age or over upon prior grant of authority to appoint him or her, shall no longer be granted.

3. Any request for the extension of service to complete the fifteen (15) years service requirement of retirement shall be filled not later than three (3) years prior to the date of compulsory retirement.

4. Any request for the extension of service of a compulsory retiree who meets the minimum number of years of service for retirement purposes may be granted for six (6) months only with no further extension.

This Memorandum Circular shall take effect immediately. (Emphases supplied)

The second administrative issuance Memorandum Circular No. 65 of the Office of the President, dated 14 June 1988 provides:

xxx xxx xxx

WHEREAS, this Office has been. receiving requests for reinstatement and/or retention in the service of employees who have reached the compulsory retirement age of 65 years, despite the strict conditions provided for in Memorandum Circular No. 163, dated March 5, 1968, as amended.

WHEREAS, the President has recently adopted a policy to adhere more strictly to the law providing for compulsory retirement age of 65 years and, in extremely meritorious cases, to limit the service beyond the age of 65 years to six (6) months only.

WHEREFORE, the pertinent provision of Memorandum Circular No. 163 or on the retention in the service of officials or employees who have reached the compulsory retirement age of 65 years, is hereby amended to read as follows:

Officials or employees who have reached the compulsory retirement age of 65 years shall not be retained in the service, except for extremely meritorious reasons in which case the retention shall not exceed six (6) months.

All heads of departments, bureaus, offices and instrumentalities of the government including government-owned or controlled corporations, are hereby enjoined to require their respective offices to strictly comply with this circular.

This Circular shall take effect immediately.

By authority of the President

(Sgd.)

CATALINO MACARAIG, JR. Executive Secretary

Manila, June 14, 1988. 15 (Emphasis supplied)

Medialdea, J. resolved the challenges posed by the above two (2) administrative regulations by, firstly, considering as invalid Civil Service Memorandum No. 27 and, secondly, by interpreting the Office of the President's Memorandum Circular No. 65 as inapplicable to the case of Gaudencio T. Cena.

We turn first to the Civil Service Commission's Memorandum Circular No. 27. Medialdea, J. wrote:

The Civil Service Commission Memorandum Circular No. 27 being in the nature of an administrative regulation, must be governed by the principle that administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions (People v. Maceren, G.R. No. L-32166, October 18, 1977, 79 SCRA 450; Teoxon v. Members of the Board of Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel v. General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660; Deluao v. Casteel, L-21906, August 29, 1969, 29 SCRA 350). . . . . The rule on limiting to one the year the extension of service of an employee who has reached the compulsory retirement age of sixty-five (65) years, but has less than fifteen (15) years of service under Civil Service Memorandum Circular No. 27, S. 1990, cannot likewise be accorded validity because it has no relationship or connection with any provision of P.D. 1146 supposed to be carried into effect. The rule was an addition to or extension of the law, not merely a mode of carrying it into effect. The Civil Service Commission has no power to supply perceived omissions in P.D. 1146. 16 (Emphasis supplied)

It will be seen that Cena, in striking down Civil Service Commission Memorandum No. 27, took a very narrow view on the question of what subordinate rule-making by an administrative agency is permissible and valid. That restrictive view must be contrasted with this Court's earlier ruling in People v. Exconde, 17 where Mr. Justice J.B.L. Reyes said:

It is well established in this jurisdiction that, while the making of laws is a non-delegable activity that corresponds exclusively to Congress, nevertheless, the latter may constitutionally delegate authority and promulgate rules and regulations to implement a given legislation and effectuate its policies, for the reason that the legislature often finds it impracticable (if not impossible) to anticipate and provide for the multifarious and complex situations that may be met in carrying the law into effect. All that is required is that the regulation should be germane to the objects and

purposes of the law; that the regulation be not in contradiction with it, but conform to standards that the law prescribes. 18 (Emphasis supplied)

In Tablarin v. Gutierrez, 19 the Court, in sustaining the validity of a MECS Order which established passing a uniform admission test called the National Medical Admission Test (NMAT) as a prerequisite for eligibility for admission into medical schools in the Philippines, said:

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 highly abstract. As explained by then Mr. Justice Fernando in Edu v. Ericta (35 SCRA 481 [1970])

The standards may be either expressed 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 in Calalang v. William is "safe 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 non-delegation principle. 20 (Citations omitted; emphasis partly in the original and partly supplied)

In Edu v. Ericta, 21 then Mr. Justice Fernando stressed the abstract and very general nature of the standards which our Court has in prior case law upheld as sufficient for purposes of compliance with the requirements for validity of subordinate or administrative rule-making:

This Court has considered as sufficient standards, "public welfare," (Municipality of Cardona v. Municipality of Binangonan, 36 Phil. 547 [1917]); "necessary in the interest of law and order," (Rubi v. Provincial Board, 39 Phil. 660 [1919]); "public interest," (People v. Rosenthal, 68 Phil. 328 [1939]); and "justice and equity and substantial merits of the case," (International Hardwood v. Pangil Federation of Labor, 17 Phil. 602 [1940]). 22 (Emphasis supplied)

Clearly, therefore, Cena when it required a considerably higher degree of detail in the statute to be implemented, went against prevailing doctrine. It seems clear that if the governing or enabling statute is quite detailed and specific to begin with, there would be very little need (or occasion) for implementing administrative regulations. It is, however, precisely the inability of legislative bodies to anticipate all (or many) possible detailed situations in respect of any relatively complex subject matter, that makes subordinate, delegated rule-making by administrative agencies so important and unavoidable. All that may be reasonably; demanded is a showing that the delegated legislation

consisting of administrative regulations are germane to the general purposes projected by the governing or enabling statute. This is the test that is appropriately applied in respect of Civil Service Memorandum Circular No. 27, Series of 1990, and to this test we now turn.

We consider that the enabling statute that should appropriately be examined is the present Civil Service law found in Book V, Title I, Subtitle A, of Executive Order No. 292 dated 25 July 1987, otherwise known as the Administrative Code of 1987 and not alone P.D. No. 1146, otherwise known as the "Revised Government Service Insurance Act of 1977." For the matter of extension of service of retirees who have reached sixty-five (65) years of age is an area that is covered by both statutes and not alone by Section 11 (b) of P.D. 1146. This is crystal clear from examination of many provisions of the present civil service law.

Section 12 of the present Civil Service law set out in the 1987 Administrative Code provides, in relevant part, as follows:

Sec. 12 Powers and Functions. The [Civil Service] Commission shall have the following powers and functions:

xxx xxx xxx

(2) Prescribe, amend and enforce rules and regulations for carrying into effect the provisions of the Civil Service Law and other pertinent laws;

(3) Promulgate policies, standards and guidelines for the Civil Service and adopt plans and programs to promote economical, efficient and effective personnel administration in the government;

xxx xxx xxx

(10) Formulate, administer and evaluate programs relative to the development and retention of a qualified and competent work force in the public service;

xxx xxx xxx

(14) Take appropriate action on all appointments and other personnel matters in the Civil Service including extension of service beyond retirement age;

xxx xxx xxx

(17) Administer the retirement program for government officials and employees, and accredit government services and evaluate qualifications for retirement;

xxx xxx xxx

(19) Perform all functions properly belonging to a central personnel agency and such other functions as may be provided by law. (Emphasis supplied)

It was on the bases of the above quoted provisions of the 1987 Administrative Code that the Civil Service Commission promulgated its Memorandum Circular No. 27. In doing so, the Commission was acting as "the central personnel agency of the government empowered to promulgate policies, standards and guidelines for efficient, responsive and effective personnel administration in the government." 23 It was also discharging its function of "administering the retirement program for government officials and employees" and of "evaluat[ing] qualifications for retirement."

In addition, the Civil Service Commission is charged by the 1987 Administrative Code with providing leadership and assistance "in the development and retention of qualified and efficient work force in the Civil Service" (Section 16 [10]) and with the "enforcement of the constitutional and statutory provisions, relative to retirement and the regulation for the effective implementation of the retirement of government officials and employees" (Section 16 [14]).

We find it very difficult to suppose that the limitation of permissible extensions of service after an employee has reached sixty-five (65) years of age has no reasonable relationship or is not germane to the foregoing provisions of the present Civil Service Law. The physiological and psychological processes associated with ageing in human beings are in fact related to the efficiency and quality of the service that may be expected from individual persons. The policy considerations which guided the Civil Service Commission in limiting the maximum extension of service allowable for compulsory retirees, were summarized by Grio-Aquino, J. in her dissenting opinion in Cena:

Worth pondering also are the points raised by the Civil Service Commission that extending the service of compulsory retirees for longer than one (1) year would: (1) give a premium to latecomers in the government service and in effect discriminate against those who enter the service at a younger age; (2) delay the promotion of the latter and of next-in-rank employees; and (3) prejudice the chances for employment of qualified young civil service applicants who have already passed the various government examination but must wait for jobs to be vacated by "extendees" who have long passed the mandatory retirement age but are enjoying extension of their government service to complete 15 years so they may qualify for old-age pension. 24 (Emphasis supplied).

Cena laid heavy stress on the interest of retirees or would be retirees, something that is, in itself, quite appropriate. At the same time, however, we are bound to note that there should be countervailing stress on the interests of the employer agency and of other government employees as a whole. The results flowing from the striking down of the limitation established in Civil Service Memorandum Circular No. 27 may well be "absurd and inequitable," as suggested by Mme. Justice Grio-Aquino in her dissenting opinion. An employee who has rendered only three (3) years of government service at age sixty-five (65) can have his service extended for twelve (12) years and finally retire at the age of seventy-seven (77). This reduces the significance of the general principle of compulsory retirement at age sixty-five (65) very close to the vanishing point.

The very real difficulties posed by the Cena doctrine for rational personnel administration and management in the Civil Service, are aggravated when Cena is considered together with the case of Toledo v. Civil Service Commission. 25 Toledo involved the provisions of Rule III, Section 22, of the Civil Service Rules on Personnel Action and Policies (CSRPAP) which prohibited the appointment of persons fifty-seven (57) years old or above in government service without prior approval of the Civil Service Commission. Civil Service Memorandum Circular No. 5, Series of 1983 provided that a person fifty-seven (57) years of age may be appointed to the Civil Service provided that the exigencies of the government service so required and provided that the appointee possesses special qualifications not possessed by other officers or employees in the Civil Service and that the vacancy cannot be filled by promotion of qualified officers or employees of the Civil Service. Petitioner Toledo was appointed Manager of the Education and Information Division of the Commission on Elections when he was almost fifty-nine (59) years old. No authority for such appointment had been obtained either from the President of the Philippines or from the Civil Service Commission and the Commission found that the other conditions laid down in Section 22 of Rule III, CSRPAP, did not exist. The Court nevertheless struck down Section 22, Rule III on the same exceedingly restrictive view of permissible administrative legislation that Cena relied on. 26

When one combines the doctrine of Toledo with the ruling in Cena, very strange results follow. Under these combined doctrines, a person sixty-four (64) years of age may be appointed to the government service and one (1) year later may demand extension of his service for the next fourteen (14) years; he would retire at age seventy-nine (79). The net effect is thus that the general statutory policy of compulsory retirement at sixty-five (65) years is heavily eroded and effectively becomes unenforceable. That general statutory policy may be seen to embody the notion that there should be a certain minimum turn-over in the government service and that opportunities for government service should be distributed as broadly as possible, specially to younger people, considering that the bulk of our population is below thirty (30) years of age. That same general policy also reflects the life expectancy of our people which is still significantly lower than the life expectancy of, e.g., people in Northern and Western Europe, North America and Japan.

Our conclusion is that the doctrine of Cena should be and is hereby modified to this extent: that Civil Service Memorandum Circular No. 27, Series of 1990, more specifically paragraph (1) thereof, is hereby declared valid and effective. Section 11 (b) of P.D. No. 1146 must, accordingly, be read

together with Memorandum Circular No. 27. We reiterate, however, the holding in Cena that the head of the government agency concerned is vested with discretionary authority to allow or disallow extension of the service of an official or employee who has reached sixty-five (65) years of age without completing fifteen (15) years of government service; this discretion is, nevertheless, to be exercised conformably with the provisions of Civil Service Memorandum Circular No. 27, Series of 1990.

We do not believe it necessary to deal specifically with Memorandum Circular No. 65 of the Office of the President dated 14 June 1988. It will be noted from the text quoted supra (pp. 11-12) that the text itself of Memorandum Circular No. 65 (and for that matter, that of Memorandum Circular No. 163, also of the Office of the President, dated 5 March 1968) 27 does not purport to apply only to officers or employees who have reached the age of sixty-five (65) years and who have at least fifteen (l5) years of government service. We noted earlier that Cena interpreted Memorandum Circular No. 65 as referring only to officers and employees who have both reached the compulsory retirement age of sixty-five (65) and completed the fifteen (15) years of government service. Cena so interpreted this Memorandum Circular precisely because Cena had reached the conclusion that employees who have reached sixty-five (65) years of age, but who have less than fifteen (15) years of government service, may be allowed such extension of service as may be needed to complete fifteen (15) years of service. In other words, Cena read Memorandum Circular No. 65 in such a way as to comfort with Cena's own conclusion reached without regard to that Memorandum Circular. In view of the conclusion that we today reached in the instant case, this last ruling of Cena is properly regarded as merely orbiter.

We also do not believe it necessary to determine whether Civil Service Memorandum Circular No. 27 is fully compatible with Office of the President's Memorandum Circular No. 65; this question must be reserved for detailed analysis in some future justiciable case.

Applying now the results of our reexamination of Cena to the instant case, we believe and so hold that Civil Service Resolution No. 92-594 dated 28 April 1992 dismissing the appeal of petitioner Rabor and affirming the action of CSRO-XI Director Cawad dated 26 July 1991, must be upheld and affirmed.

ACCORDINGLY, for all the foregoing, the Petition for Certiorari is hereby DISMISSED for lack of merit. No pronouncement as to costs.

SO ORDERED.

[G.R. No. 138381. November 10, 2004]

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. COMMISSION ON AUDIT, respondent.

[G.R. No. 141625. November 10, 2004]

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs. ALFREDO D. PINEDA, DANIEL GO, FELINO BULANDUS, FELICIMO J. FERRARIS, JR., BEN HUR PORLUCAS, LUIS HIPONIA, MARIA LUISA A. FERNANDEZ, VICTORINA JOVEN, CORAZON S. ALIWANAG, SILVER L. MARTINES, SR., RENATO PEREZ, LOLITA CAYLAN, DOUGLAS VALLEJO and LETICIA ALMAZAN, on their own behalf and on behalf of all GSIS retirees with all of whom they share a common and general interest, respondents.

RESOLUTION

YNARES-SANTIAGO, J.:

On April 16, 2002, the Court promulgated a decision on these two consolidated cases partially granting the petition in G.R. No. 138381 (first petition) thereby reversing the Commission on Audits (COA) disallowance of certain fringe benefits granted to GSIS employees. As a result, the Court ordered the refund of amounts representing fringe benefits corresponding to those allowed in the first petition in favor of the respondents in G.R. No. 141625 (second petition).

The benefits which the Court ordered to be refunded included increases in longevity pay, childrens allowance and management contribution to the Provident Fund as well as premiums for group personal accident insurance. On the other hand, the Court affirmed the COA disallowance of loyalty and service cash award as well as housing allowance in excess of that approved by the COA. Amounts corresponding to these benefits were previously deducted by GSIS from respondents retirement benefits in view of the COA disallowance in the first petition. COA did not seek reconsideration of the judgment ordering said refund, which thus became final and executory.

On August 7, 2002, the respondents in the second petition, all GSIS retirees, filed a motion for amendatory and clarificatory judgment (amendatory motion).[1] They averred that we did not categorically resolve the issue raised in the second petition, namely: whether or not the GSIS may lawfully deduct any amount from their retirement benefits in light of Section 39 of Republic Act No. 8291.

According to respondents, said provision of law clearly states that no amount whatsoever could be legally deducted from retirement benefits, even those amounts representing COA disallowances. They posit that we should have ordered refund not only of benefits allowed in the first petition, but all amounts claimed, regardless of whether or not these were allowed by the COA. These include items which were correctly disallowed by the COA in the first petition, as well as disallowed benefits under the second petition. The latter consists of initial payment of productivity bonus, accelerated implementation of the new salary schedule effective August 1, 1995, 1995 mid-year

financial assistance and increase in clothing, rice and meal allowances. Respondents further insist that we should have awarded damages in their favor, citing the GSIS alleged bad faith in making the deductions.

GSIS filed a comment[2] to respondents amendatory motion, as directed by the Court in a resolution dated September 3, 2002. GSIS posited that the other benefits not passed upon in the main judgment should be understood by respondents as having been impliedly denied by this Court. It also sought clarification of our decision insofar as it declared that there was no identity of subject matter between the COA proceedings, from which the first petition stemmed, and respondents claim under the second petition, which emanated from an order of the GSIS Board of Trustees (Board). As for the damages claimed by respondents, GSIS insists that it made the deductions in good faith for these were done in accordance with COA directives.

Respondents filed a reply[3] to the comment of GSIS on September 9, 2002.

Meanwhile, respondents filed a second motion, this time for leave to file a motion for discretionary and partial execution[4] (motion for execution). They prayed that GSIS be ordered to effect the refund, as finally adjudged in our decision, pending resolution of their amendatory motion as to the other deducted amounts. We granted the motion for execution on September 3, 2002.

Subsequently, on December 26, 2002, counsel for respondents, Atty. Agustin Sundiam, filed a motion for entry and enforcement of attorneys lien[5] (motion for charging lien) and a supplement[6] to this motion on January 10, 2003. He sought entry of a charging lien in the records of this case pursuant to Section 37 of Rule 138. He prayed for an order directing the GSIS to deduct, as his professional fees, 15% from respondents refund vouchers since the GSIS was already in the process of releasing his clients checks in compliance with our judgment in the first petition. The payment scheme was allegedly authorized by the Board of Directors of his clients, the GSIS Retirees Association, Inc. (GRIA), through a board resolution[7] that he has attached to the motion.

Atty. Sundiams motion for charging lien was opposed by petitioner GSIS on the ground that it was through its efforts, and not Atty. Sundiams, that the retirees were able to obtain a refund.[8] Meanwhile, the GRIA confirmed the payment scheme it adopted with Atty. Sundiam and prayed for its approval.[9]

Thereafter, on January 10, 2003, respondents filed another manifestation and motion as well as supplement thereto, claiming that GSIS was deducting new and unspecified sums from the amount it was refunding to respondents. These new deductions purportedly pertain to another set of COA disallowances.[10]

On January 21, 2003, respondents again filed a motion[11] praying for the inclusion in the refundable amount of dividends on the management contribution to the Provident Fund (motion for payment of dividends). Respondents claimed that the contribution, which amounted to Fifty Million Pesos (P50M), was retained by GSIS for more than five years and thus earned a considerable sum of income while under its control. GSIS declared and paid dividends on said contribution to incumbent officials and employees, but refused to extend the same benefits to respondents/retirees.

On March 6, 2003, GSIS filed a joint comment[12] to respondents two foregoing motions contending that the new deductions are legitimate. The deductions pertain to car loan arrearages, disallowed employees compensation claims and the like. As for the dividends on the Provident Fund contributions, respondents are not entitled to the same because while the first petition was pending, the contributions were not actually remitted to the fund but were withheld by COA pursuant to its earlier disallowance.

On October 2, 2003, respondents filed another motion[13] for an order to compel the GSIS to pay dividends on the Provident Fund contributions pending resolution of their other motions. They also sought refund of Permanent Partial Disability (PPD) benefits that GSIS supposedly paid to some of the respondents, but once again arbitrarily deducted from the amount which the Court ordered to be refunded.

In a minute resolution[14] dated November 11, 2003, we denied the last motion for lack of merit. We likewise denied with finality respondents motion for reconsideration from the denial of said motion.[15]

We now resolve the matters raised by the parties.

On the amendatory motion, it must be clarified that the question raised before this Court in the second petition was the issue of the Boards jurisdiction to resolve respondents claim for refund of amounts representing deductions from their retirement benefits. What was assailed in the second petition was the appellate courts ruling that the Board had jurisdiction over respondents claim since there was no identity of subject matter between the proceedings then pending before the COA and the petition brought by respondents before the Board. The Court of Appeals did not rule on the main controversy of whether COA disallowances could be deducted from retirement benefits because the Board ordered the dismissal of respondents claim for alleged lack of jurisdiction, before it could even decide on the principal issue.

Consequently, the only matter that was properly elevated to this Court was the issue of whether or not the Board had jurisdiction over respondents demands. We did not resolve the issue of whether or not the deductions were valid under Section 39 of RA 8291, for the simple reason that the Board, as well as the appellate court, did not tackle the issue. The doctrine of primary jurisdiction[16]

would ordinarily preclude us from resolving the matter, which calls for a ruling to be first made by the Board. It is the latter that is vested by law with exclusive and original jurisdiction to settle any dispute arising under RA 8291, as well as other matters related thereto.[17]

However, both the GSIS and respondents have extensively discussed the merits of the case in their respective pleadings and did not confine their arguments to the issue of jurisdiction. Respondents, in fact, submit that we should resolve the main issue on the ground that it is a purely legal question. Respondents further state that a remand of the case to the Board would merely result in unnecessary delay and needless expense for the parties. They thus urge the Court to decide the main question in order to finally put an end to the controversy.

Indeed, the principal issue pending before the Board does not involve any factual question, as it concerns only the correct application of the last paragraph of Section 39, RA 8291. The parties agreed that the lone issue is whether COA disallowances could be legally deducted from retirement benefits on the ground that these were respondents monetary liabilities to the GSIS under the said provision. There is no dispute that the amounts deducted by GSIS represented COA disallowances. Thus, the only question left for the Board to decide is whether the deductions are allowed under RA 8291.

Under certain exceptional circumstances, we have taken cognizance of questions of law even in the absence of an initial determination by a lower court or administrative body. In China Banking Corporation v. Court of Appeals,[18] the Court held:

At the outset, the Courts attention is drawn to the fact that since the filing of this suit before the trial court, none of the substantial issues have been resolved. To avoid and gloss over the issues raised by the parties, as what the trial court and respondent Court of Appeals did, would unduly prolong this litigation involving a rather simple case of foreclosure of mortgage. Undoubtedly, this will run counter to the avowed purpose of the rules, i.e., to assist the parties in obtaining just, speedy and inexpensive determination of every action or proceeding. The Court, therefore, feels that the central issues of the case, albeit unresolved by the courts below, should now be settled specially as they involved pure questions of law. Furthermore, the pleadings of the respective parties on file have amply ventilated their various positions and arguments on the matter necessitating prompt adjudication.

In Roman Catholic Archbishop of Manila v. Court of Appeals,[19] the Court likewise held that the remand of a case is not necessary where the court is in a position to resolve the dispute based on the records before it. The Court will decide actions on the merits in order to expedite the settlement of a controversy and if the ends of justice would not be subserved by a remand of the case.

Here, the primary issue calls for an application of a specific provision of RA 8291 as well as relevant jurisprudence on the matter. No useful purpose will indeed be served if we remand the matter to

the Board, only for its decision to be elevated again to the Court of Appeals and subsequently to this Court. Hence, we deem it sound to rule on the merits of the controversy rather than to remand the case for further proceedings.

The last paragraph of Section 39, RA 8291 specifically provides:

SEC. 39. Exemption from Tax, Legal Process and Lien.-

xxx

xxx

xxx

The funds and/or the properties referred to herein as well as the benefits, sums or monies corresponding to the benefits under this Act shall be exempt from attachment, garnishment, execution, levy or other processes issued by the courts, quasi-judicial agencies or administrative bodies including Commission on Audit (COA) disallowances and from all financial obligations of the members, including his pecuniary accountability arising from or caused or occasioned by his exercise or performance of his official functions or duties, or incurred relative to or in connection with his position or work except when his monetary liability, contractual or otherwise, is in favor of the GSIS.

It is clear from the above provision that COA disallowances cannot be deducted from benefits under RA 8291, as the same are explicitly made exempt by law from such deductions. Retirement benefits cannot be diminished by COA disallowances in view of the clear mandate of the foregoing provision. It is a basic rule in statutory construction that if a statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without interpretation. This is what is known as plain-meaning rule or verba legis.[20]

Accordingly, the GSIS interpretation of Section 39 that COA disallowances have become monetary liabilities of respondents to the GSIS and therefore fall under the exception stated in the law is wrong. No interpretation of the said provision is necessary given the clear language of the statute. A meaning that does not appear nor is intended or reflected in the very language of the statute cannot be placed therein by construction.[21]

Moreover, if we are to accept the GSIS interpretation, then it would be unnecessary to single out COA disallowances as among those from which benefits under RA 8291 are exempt. In such a case, the inclusion of COA disallowances in the enumeration of exemptions would be a mere surplusage since the GSIS could simply consider COA disallowances as monetary liabilities in its favor. Such a construction would empower the GSIS to withdraw, at its option, an exemption expressly granted by law. This could not have been the intention of the statute.

That retirement pay accruing to a public officer may not be withheld and applied to his indebtedness to the government has been settled in several cases. In Cruz v. Tantuico, Jr.,[22] the Court, citing Hunt v. Hernandez,[23] explained the reason for such policy thus:

x x x we are of the opinion that the exemption should be liberally construed in favor of the pensioner. Pension in this case is a bounty flowing from the graciousness of the Government intended to reward past services and, at the same time, to provide the pensioner with the means with which to support himself and his family. Unless otherwise clearly provided, the pension should inure wholly to the benefit of the pensioner. It is true that the withholding and application of the amount involved was had under section 624 of the Administrative Code and not by any judicial process, but if the gratuity could not be attached or levied upon execution in view of the prohibition of section 3 of Act No. 4051, the appropriation thereof by administrative action, if allowed, would lead to the same prohibited result and enable the respondents to do indirectly what they can not do directly under section 3 of Act No. 4051. Act No. 4051 is a later statute having been approved on February 21, 1933, whereas the Administrative Code of 1917 which embodies section 624 relied upon by the respondents was approved on March 10 of that year. Considering section 3 of Act No. 4051 as an exception to the general authority granted in section 624 of the Administrative Code, antagonism between the two provisions is avoided. (Underscoring supplied)

The above ruling was reiterated in Tantuico, Jr. v. Domingo,[24] where the Court similarly declared that benefits under retirement laws cannot be withheld regardless of the petitioners monetary liability to the government.

The policy of exempting retirement benefits from attachment, levy and execution, as well as unwarranted deductions, has been embodied in a long line of retirement statutes. Act No. 4051,[25] which provides for the payment of gratuity to officers and employees of the Insular Government upon retirement due to reorganization, expressly provides in its Section 3 that (t)he gratuity provided for in this Act shall not be attached or levied upon execution.

The law which established the GSIS, Commonwealth Act No. 186 (CA No. 186),[26] went further by providing as follows:

SEC. 23. Exemptions from legal process and liens. No policy of life insurance issued under this Act, or the proceeds thereof, except those corresponding to the annual premium thereon in excess of five hundred pesos per annum, when paid to any member thereunder, shall be liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law to pay any debt or liability of such member, or his beneficiary, or any other person who may have a right thereunder, either before or after payment; nor shall the proceeds thereof, when not made payable to a named beneficiary, constitute a part of the estate of the member for payment of his debt.

Presidential Decree No. 1146,[27] which amended CA No. 186, likewise contained a provision exempting benefits from attachment, garnishment, levy or other processes. However, the exemption was expressly made inapplicable to obligations of the member to the System, or to the employer, or when the benefits granted are assigned by the member with the authority of the System.[28]

The latest GSIS enactment, RA 8291,[29] provides for a more detailed and wider range of exemptions under Section 39. Aside from exempting benefits from judicial processes, it likewise unconditionally exempts benefits from quasi-judicial and administrative processes, including COA disallowances, as well as all financial obligations of the member. The latter includes any pecuniary accountability of the member which arose out of the exercise or performance of his official functions or duties or incurred relative to his position or work. The only exception to such pecuniary accountability is when the same is in favor of the GSIS.

Thus, monetary liability in favor of GSIS refers to indebtedness of the member to the System other than those which fall under the categories of pecuniary accountabilities exempted under the law. Such liability may include unpaid social insurance premiums and balances on loans obtained by the retiree from the System, which do not arise in the performance of his duties and are not incurred relative to his work. The general policy, as reflected in our retirement laws and jurisprudence, is to exempt benefits from all legal processes or liens, but not from outstanding obligations of the member to the System. This is to ensure maintenance of the GSIS fund reserves in order to guarantee fulfillment of all its obligations under RA 8291.

Notwithstanding the foregoing, however, we find it necessary to nonetheless differentiate between those benefits which were properly disallowed by the COA and those which were not.

Anent the benefits which were improperly disallowed, the same rightfully belong to respondents without qualification. As for benefits which were justifiably disallowed by the COA, the same were erroneously granted to and received by respondents who now have the obligation to return the same to the System.

It cannot be denied that respondents were recipients of benefits that were properly disallowed by the COA. These COA disallowances would otherwise have been deducted from their salaries, were it not for the fact that respondents retired before such deductions could be effected. The GSIS can no longer recover these amounts by any administrative means due to the specific exemption of retirement benefits from COA disallowances. Respondents resultantly retained benefits to which they were not legally entitled which, in turn, gave rise to an obligation on their part to return the amounts under the principle of solutio indebiti.

Under Article 2154 of the Civil Code,[30] if something is received and unduly delivered through mistake when there is no right to demand it, the obligation to return the thing arises. Payment by

reason of mistake in the construction or application of a doubtful or difficult question of law also comes within the scope of solutio indebiti.[31]

In the instant case, the confusion about the increase and payment of benefits to GSIS employees and executives, as well as its subsequent disallowance by the COA, arose on account of the application of RA 6758 or the Salary Standardization Law and its implementing rules, CCC No. 10. The complexity in the application of these laws is manifested by the several cases that have reached the Court since its passage in 1989.[32] The application of RA 6758 was made even more difficult when its implementing rules were nullified for non-publication.[33] Consequently, the delivery of benefits to respondents under an erroneous interpretation of RA 6758 gave rise to an actionable obligation for them to return the same.

While the GSIS cannot directly proceed against respondents retirement benefits, it can nonetheless seek restoration of the amounts by means of a proper court action for its recovery. Respondents themselves submit that this should be the case,[34] although any judgment rendered therein cannot be enforced against retirement benefits due to the exemption provided in Section 39 of RA 8291. However, there is no prohibition against enforcing a final monetary judgment against respondents other assets and properties. This is only fair and consistent with basic principles of due process.

As such, a proper accounting of the amounts due and refundable is in order. In rendering such accounting, the parties must observe the following guidelines:

(1) All deductions from respondents retirement benefits should be refunded except those amounts which may properly be defined as monetary liability to the GSIS;

(2) Any other amount to be deducted from retirement benefits must be agreed upon by and between the parties; and

(3) Refusal on the part of respondents to return disallowed benefits shall give rise to a right of action in favor of GSIS before the courts of law.

Conformably, any fees due to Atty. Sundiam for his professional services may be charged against respondents retirement benefits. The arrangement, however, must be covered by a proper agreement between him and his clients under (2) above.

As to whether respondents are entitled to dividends on the provident fund contributions, the same is not within the issues raised before the Court. The second petition refers only to the legality of the deductions made by GSIS from respondents retirement benefits. There are factual matters that need to be threshed out in determining respondents right to the payment of dividends, in view of

the GSIS assertion that the management contributions were not actually remitted to the fund. Thus, the payment of dividends should be the subject of a separate claim where the parties can present evidence to prove their respective assertions. The Court is in no position to resolve the matter since the material facts that would prove or disprove the claim are not on record.

In the interest of clarity, we reiterate herein our ruling that there is no identity of subject matter between the COA proceedings, from which the first petition stemmed, and respondents claim of refund before the Board. While the first petition referred to the propriety of the COA disallowances per se, respondents claim before the Board pertained to the legality of deducting the COA disallowances from retirement benefits under Section 39 of RA 8291.

Finally, on respondents claim that the GSIS acted in bad faith when it deducted the COA disallowances from their retirement benefits, except for bare allegations, there is no proof or evidence of the alleged bad faith and partiality of the GSIS. Moreover, the latter cannot be faulted for taking measures to ensure recovery of the COA disallowances since respondents have already retired and would be beyond its administrative reach. The GSIS merely acted upon its best judgment and chose to err in the side of prudence rather than suffer the consequence of not being able to account for the COA disallowances. It concededly erred in taking this recourse but it can hardly be accused of malice or bad faith in doing so.

WHEREFORE, in view of the foregoing, the April 16, 2002 Decision in G.R. Nos. 138381 and 141625 is AMENDED. In addition to the refund of amounts corresponding to benefits allowed in G.R. No. 138381, the GSIS is ordered to REFUND all deductions from retirement benefits EXCEPT amounts representing monetary liability of the respondents to the GSIS as well as all other amounts mutually agreed upon by the parties.

SO ORDERED.

G.R. No. 180643

September 4, 2008

ROMULO L. NERI, petitioner, vs. SENATE COMMITTEE ON ACCOUNTABILITY OF PUBLIC OFFICERS AND INVESTIGATIONS, SENATE COMMITTEE ON TRADE AND COMMERCE, AND SENATE COMMITTEE ON NATIONAL DEFENSE AND SECURITY, respondents.

RESOLUTION

LEONARDO-DE CASTRO, J.:

Executive privilege is not a personal privilege, but one that adheres to the Office of the President. It exists to protect public interest, not to benefit a particular public official. Its purpose, among others, is to assure that the nation will receive the benefit of candid, objective and untrammeled communication and exchange of information between the President and his/her advisers in the process of shaping or forming policies and arriving at decisions in the exercise of the functions of the Presidency under the Constitution. The confidentiality of the Presidents conversations and correspondence is not unique. It is akin to the confidentiality of judicial deliberations. It possesses the same value as the right to privacy of all citizens and more, because it is dictated by public interest and the constitutionally ordained separation of governmental powers.

In these proceedings, this Court has been called upon to exercise its power of review and arbitrate a hotly, even acrimoniously, debated dispute between the Courts co-equal branches of government. In this task, this Court should neither curb the legitimate powers of any of the co-equal and coordinate branches of government nor allow any of them to overstep the boundaries set for it by our Constitution. The competing interests in the case at bar are the claim of executive privilege by the President, on the one hand, and the respondent Senate Committees assertion of their power to conduct legislative inquiries, on the other. The particular facts and circumstances of the present case, stripped of the politically and emotionally charged rhetoric from both sides and viewed in the light of settled constitutional and legal doctrines, plainly lead to the conclusion that the claim of executive privilege must be upheld.

Assailed in this motion for reconsideration is our Decision dated March 25, 2008 (the "Decision"), granting the petition for certiorari filed by petitioner Romulo L. Neri against the respondent Senate Committees on Accountability of Public Officers and Investigations,1 Trade and Commerce,2 and National Defense and Security (collectively the "respondent Committees").3

A brief review of the facts is imperative.

On September 26, 2007, petitioner appeared before respondent Committees and testified for about eleven (11) hours on matters concerning the National Broadband Project (the "NBN Project"), a project awarded by the Department of Transportation and Communications ("DOTC") to Zhong Xing Telecommunications Equipment ("ZTE"). Petitioner disclosed that then Commission on Elections ("COMELEC") Chairman Benjamin Abalos offered him P200 Million in exchange for his approval of the NBN Project. He further narrated that he informed President Gloria Macapagal Arroyo ("President Arroyo") of the bribery attempt and that she instructed him not to accept the bribe. However, when probed further on President Arroyo and petitioners discussions relating to the NBN Project, petitioner refused to answer, invoking "executive privilege." To be specific, petitioner refused to answer questions on: (a) whether or not President Arroyo followed up the NBN Project,4 (b) whether or not she directed him to prioritize it,5 and (c) whether or not she directed him to approve it.6

Respondent Committees persisted in knowing petitioners answers to these three questions by requiring him to appear and testify once more on November 20, 2007. On November 15, 2007, Executive Secretary Eduardo R. Ermita wrote to respondent Committees and requested them to dispense with petitioners testimony on the ground of executive privilege.7 The letter of Executive Secretary Ermita pertinently stated:

Following the ruling in Senate v. Ermita, the foregoing questions fall under conversations and correspondence between the President and public officials which are considered executive privilege (Almonte v. Vasquez, G.R. 95637, 23 May 1995; Chavez v. PEA, G.R. 133250, July 9, 2002). Maintaining the confidentiality of conversations of the President is necessary in the exercise of her executive and policy decision making process. The expectation of a President to the confidentiality of her conversations and correspondences, like the value which we accord deference for the privacy of all citizens, is the necessity for protection of the public interest in candid, objective, and even blunt or harsh opinions in Presidential decision-making. Disclosure of conversations of the President will have a chilling effect on the President, and will hamper her in the effective discharge of her duties and responsibilities, if she is not protected by the confidentiality of her conversations.

The context in which executive privilege is being invoked is that the information sought to be disclosed might impair our diplomatic as well as economic relations with the Peoples Republic of China. Given the confidential nature in which these information were conveyed to the President, he cannot provide the Committee any further details of these conversations, without disclosing the very thing the privilege is designed to protect.

In light of the above considerations, this Office is constrained to invoke the settled doctrine of executive privilege as refined in Senate v. Ermita, and has advised Secretary Neri accordingly.

Considering that Sec. Neri has been lengthily interrogated on the subject in an unprecedented 11hour hearing, wherein he has answered all questions propounded to him except the foregoing questions involving executive privilege, we therefore request that his testimony on 20 November 2007 on the ZTE / NBN project be dispensed with.

On November 20, 2007, petitioner did not appear before respondent Committees upon orders of the President invoking executive privilege. On November 22, 2007, the respondent Committees issued the show-cause letter requiring him to explain why he should not be cited in contempt. On November 29, 2007, in petitioners reply to respondent Committees, he manifested that it was not his intention to ignore the Senate hearing and that he thought the only remaining questions were those he claimed to be covered by executive privilege. He also manifested his willingness to appear and testify should there be new matters to be taken up. He just requested that he be furnished "in advance as to what else" he "needs to clarify."

Respondent Committees found petitioners explanations unsatisfactory. Without responding to his request for advance notice of the matters that he should still clarify, they issued the Order dated January 30, 2008; In Re: P.S. Res. Nos. 127,129,136 & 144; and privilege speeches of Senator Lacson and Santiago (all on the ZTE-NBN Project), citing petitioner in contempt of respondent Committees and ordering his arrest and detention at the Office of the Senate Sergeant-at-Arms until such time that he would appear and give his testimony.

On the same date, petitioner moved for the reconsideration of the above Order.8 He insisted that he had not shown "any contemptible conduct worthy of contempt and arrest." He emphasized his willingness to testify on new matters, but respondent Committees did not respond to his request for advance notice of questions. He also mentioned the petition for certiorari he previously filed with this Court on December 7, 2007. According to him, this should restrain respondent Committees from enforcing the order dated January 30, 2008 which declared him in contempt and directed his arrest and detention.

Petitioner then filed his Supplemental Petition for Certiorari (with Urgent Application for TRO/Preliminary Injunction) on February 1, 2008. In the Courts Resolution dated February 4, 2008, the parties were required to observe the status quo prevailing prior to the Order dated January 30, 2008.

On March 25, 2008, the Court granted his petition for certiorari on two grounds: first, the communications elicited by the three (3) questions were covered by executive privilege; and second, respondent Committees committed grave abuse of discretion in issuing the contempt order. Anent the first ground, we considered the subject communications as falling under the presidential communications privilege because (a) they related to a quintessential and non-delegable power of the President, (b) they were received by a close advisor of the President, and (c) respondent Committees failed to adequately show a compelling need that would justify the limitation of the privilege and the unavailability of the information elsewhere by an appropriate investigating authority. As to the second ground, we found that respondent Committees committed grave abuse of discretion in issuing the contempt order because (a) there was a valid claim of executive privilege, (b) their invitations to petitioner did not contain the questions relevant to the inquiry, (c) there was a cloud of doubt as to the regularity of the proceeding that led to their issuance of the contempt order, (d) they violated Section 21, Article VI of the Constitution because their inquiry was not in accordance with the "duly published rules of procedure," and (e) they issued the contempt order arbitrarily and precipitately.

On April 8, 2008, respondent Committees filed the present motion for reconsideration, anchored on the following grounds:

CONTRARY TO THIS HONORABLE COURTS DECISION, THERE IS NO DOUBT THAT THE ASSAILED ORDERS WERE ISSUED BY RESPONDENT COMMITTEES PURSUANT TO THE EXERCISE OF THEIR LEGISLATIVE POWER, AND NOT MERELY THEIR OVERSIGHT FUNCTIONS.

II

CONTRARY TO THIS HONORABLE COURTS DECISION, THERE CAN BE NO PRESUMPTION THAT THE INFORMATION WITHHELD IN THE INSTANT CASE IS PRIVILEGED.

III

CONTRARY TO THIS HONORABLE COURTS DECISION, THERE IS NO FACTUAL OR LEGAL BASIS TO HOLD THAT THE COMMUNICATIONS ELICITED BY THE SUBJECT THREE (3) QUESTIONS ARE COVERED BY EXECUTIVE PRIVILEGE, CONSIDERING THAT:

A. THERE IS NO SHOWING THAT THE MATTERS FOR WHICH EXECUTIVE PRIVILEGE IS CLAIMED CONSTITUTE STATE SECRETS.

B. EVEN IF THE TESTS ADOPTED BY THIS HONORABLE COURT IN THE DECISION IS APPLIED, THERE IS NO SHOWING THAT THE ELEMENTS OF PRESIDENTIAL COMMUNICATIONS PRIVILEGE ARE PRESENT.

C. ON THE CONTRARY, THERE IS ADEQUATE SHOWING OF A COMPELLING NEED TO JUSTIFY THE DISCLOSURE OF THE INFORMATION SOUGHT.

D. TO UPHOLD THE CLAIM OF EXECUTIVE PRIVILEGE IN THE INSTANT CASE WOULD SERIOUSLY IMPAIR THE RESPONDENTS PERFORMANCE OF THEIR PRIMARY FUNCTION TO ENACT LAWS.

E. FINALLY, THE CONSTITUTIONAL RIGHT OF THE PEOPLE TO INFORMATION, AND THE CONSTITUTIONAL POLICIES ON PUBLIC ACCOUNTABILITY AND TRANSPARENCY OUTWEIGH THE CLAIM OF EXECUTIVE PRIVILEGE.

IV

CONTRARY TO THIS HONORABLE COURTS DECISION, RESPONDENTS DID NOT COMMIT GRAVE ABUSE OF DISCRETION IN ISSUING THE ASSAILED CONTEMPT ORDER, CONSIDERING THAT:

A. THERE IS NO LEGITIMATE CLAIM OF EXECUTIVE PRIVILEGE IN THE INSTANT CASE.

B. RESPONDENTS DID NOT VIOLATE THE SUPPOSED REQUIREMENTS LAID DOWN IN SENATE V. ERMITA.

C. RESPONDENTS DULY ISSUED THE CONTEMPT ORDER IN ACCORDANCE WITH THEIR INTERNAL RULES.

D. RESPONDENTS DID NOT VIOLATE THE REQUIREMENTS UNDER ARTICLE VI, SECTION 21 OF THE CONSTITUTION REQUIRING THAT ITS RULES OF PROCEDURE BE DULY PUBLISHED, AND WERE DENIED DUE PROCESS WHEN THE COURT CONSIDERED THE OSGS INTERVENTION ON THIS ISSUE WITHOUT GIVING RESPONDENTS THE OPPORTUNITY TO COMMENT.

E. RESPONDENTS ISSUANCE OF THE CONTEMPT ORDER IS NOT ARBITRARY OR PRECIPITATE.

In his Comment, petitioner charges respondent Committees with exaggerating and distorting the Decision of this Court. He avers that there is nothing in it that prohibits respondent Committees from investigating the NBN Project or asking him additional questions. According to petitioner, the Court merely applied the rule on executive privilege to the facts of the case. He further submits the following contentions: first, the assailed Decision did not reverse the presumption against executive secrecy laid down in Senate v. Ermita; second, respondent Committees failed to overcome the presumption of executive privilege because it appears that they could legislate even without the communications elicited by the three (3) questions, and they admitted that they could dispense with petitioners testimony if certain NEDA documents would be given to them; third, the requirement of specificity applies only to the privilege for State, military and diplomatic secrets, not to the necessarily broad and all-encompassing presidential communications privilege; fourth, there is no right to pry into the Presidents thought processes or exploratory exchanges; fifth, petitioner is not covering up or hiding anything illegal; sixth, the Court has the power and duty to annul the Senate Rules; seventh, the Senate is not a continuing body, thus the failure of the present Senate to publish its Rules of Procedure Governing Inquiries in Aid of Legislation (Rules) has a vitiating effect on them; eighth, the requirement for a witness to be furnished advance copy of questions comports with due process and the constitutional mandate that the rights of witnesses be respected; and ninth, neither petitioner nor respondent has the final say on the matter of executive privilege, only the Court.

For its part, the Office of the Solicitor General maintains that: (1) there is no categorical pronouncement from the Court that the assailed Orders were issued by respondent Committees pursuant to their oversight function; hence, there is no reason for them "to make much" of the distinction between Sections 21 and 22, Article VI of the Constitution; (2) presidential communications enjoy a presumptive privilege against disclosure as earlier held in Almonte v.

Vasquez9 and Chavez v. Public Estates Authority (PEA)10; (3) the communications elicited by the three (3) questions are covered by executive privilege, because all the elements of the presidential communications privilege are present; (4) the subpoena ad testificandum issued by respondent Committees to petitioner is fatally defective under existing law and jurisprudence; (5) the failure of the present Senate to publish its Rules renders the same void; and (6) respondent Committees arbitrarily issued the contempt order.

Incidentally, respondent Committees objection to the Resolution dated March 18, 2008 (granting the Office of the Solicitor Generals Motion for Leave to Intervene and to Admit Attached Memorandum) only after the promulgation of the Decision in this case is foreclosed by its untimeliness.

The core issues that arise from the foregoing respective contentions of the opposing parties are as follows:

(1) whether or not there is a recognized presumptive presidential communications privilege in our legal system;

(2) whether or not there is factual or legal basis to hold that the communications elicited by the three (3) questions are covered by executive privilege;

(3) whether or not respondent Committees have shown that the communications elicited by the three (3) questions are critical to the exercise of their functions; and

(4) whether or not respondent Committees committed grave abuse of discretion in issuing the contempt order.

We shall discuss these issues seriatim.

There Is a Recognized Presumptive Presidential Communications Privilege

Respondent Committees ardently argue that the Courts declaration that presidential communications are presumptively privileged reverses the "presumption" laid down in Senate v.

Ermita11 that "inclines heavily against executive secrecy and in favor of disclosure." Respondent Committees then claim that the Court erred in relying on the doctrine in Nixon.

Respondent Committees argue as if this were the first time the presumption in favor of the presidential communications privilege is mentioned and adopted in our legal system. That is far from the truth. The Court, in the earlier case of Almonte v. Vasquez,12 affirmed that the presidential communications privilege is fundamental to the operation of government and inextricably rooted in the separation of powers under the Constitution. Even Senate v. Ermita,13 the case relied upon by respondent Committees, reiterated this concept. There, the Court enumerated the cases in which the claim of executive privilege was recognized, among them Almonte v. Chavez, Chavez v. Presidential Commission on Good Government (PCGG),14 and Chavez v. PEA.15 The Court articulated in these cases that "there are certain types of information which the government may withhold from the public,16" that there is a "governmental privilege against public disclosure with respect to state secrets regarding military, diplomatic and other national security matters";17 and that "the right to information does not extend to matters recognized as privileged information under the separation of powers, by which the Court meant Presidential conversations, correspondences, and discussions in closed-door Cabinet meetings."18

Respondent Committees observation that this Courts Decision reversed the "presumption that inclines heavily against executive secrecy and in favor of disclosure" arises from a piecemeal interpretation of the said Decision. The Court has repeatedly held that in order to arrive at the true intent and meaning of a decision, no specific portion thereof should be isolated and resorted to, but the decision must be considered in its entirety.19

Note that the aforesaid presumption is made in the context of the circumstances obtaining in Senate v. Ermita, which declared void Sections 2(b) and 3 of Executive Order (E.O.) No. 464, Series of 2005. The pertinent portion of the decision in the said case reads:

From the above discussion on the meaning and scope of executive privilege, both in the United States and in this jurisprudence, a clear principle emerges. Executive privilege, whether asserted against Congress, the courts, or the public, is recognized only in relation to certain types of information of a sensitive character. While executive privilege is a constitutional concept, a claim thereof may be valid or not depending on the ground invoked to justify it and the context in which it is made. Noticeably absent is any recognition that executive officials are exempt from the duty to disclose information by the mere fact of being executive officials. Indeed, the extraordinary character of the exemptions indicates that the presumption inclines heavily against executive secrecy and in favor of disclosure. (Emphasis and underscoring supplied)

Obviously, the last sentence of the above-quoted paragraph in Senate v. Ermita refers to the "exemption" being claimed by the executive officials mentioned in Section 2(b) of E.O. No. 464, solely by virtue of their positions in the Executive Branch. This means that when an executive official, who is one of those mentioned in the said Sec. 2(b) of E.O. No. 464, claims to be exempt

from disclosure, there can be no presumption of authorization to invoke executive privilege given by the President to said executive official, such that the presumption in this situation inclines heavily against executive secrecy and in favor of disclosure.

Senate v. Ermita 20 expounds on the premise of the foregoing ruling in this wise:

Section 2(b) in relation to Section 3 virtually provides that, once the head of office determines that a certain information is privileged, such determination is presumed to bear the Presidents authority and has the effect of prohibiting the official from appearing before Congress, subject only to the express pronouncement of the President that it is allowing the appearance of such official. These provisions thus allow the President to authorize claims of privilege by mere silence.

Such presumptive authorization, however, is contrary to the exceptional nature of the privilege. Executive privilege, as already discussed, is recognized with respect to information the confidential nature of which is crucial to the fulfillment of the unique role and responsibilities of the executive branch, or in those instances where exemption from disclosure is necessary to the discharge of highly important executive responsibilities. The doctrine of executive privilege is thus premised on the fact that certain information must, as a matter of necessity, be kept confidential in pursuit of the public interest. The privilege being, by definition, an exemption from the obligation to disclose information, in this case to Congress, the necessity must be of such high degree as to outweigh the public interest in enforcing that obligation in a particular case.

In light of this highly exceptional nature of the privilege, the Court finds it essential to limit to the President the power to invoke the privilege. She may of course authorize the Executive Secretary to invoke the privilege on her behalf, in which case the Executive Secretary must state that the authority is "By order of the President", which means that he personally consulted with her. The privilege being an extraordinary power, it must be wielded only by the highest official in the executive hierarchy. In other words, the President may not authorize her subordinates to exercise such power. There is even less reason to uphold such authorization in the instant case where the authorization is not explicit but by mere silence. Section 3, in relation to Section 2(b), is further invalid on this score.

The constitutional infirmity found in the blanket authorization to invoke executive privilege granted by the President to executive officials in Sec. 2(b) of E.O. No. 464 does not obtain in this case.

In this case, it was the President herself, through Executive Secretary Ermita, who invoked executive privilege on a specific matter involving an executive agreement between the Philippines and China, which was the subject of the three (3) questions propounded to petitioner Neri in the course of the Senate Committees investigation. Thus, the factual setting of this case markedly differs from that passed upon in Senate v. Ermita.

Moreover, contrary to the claim of respondents, the Decision in this present case hews closely to the ruling in Senate v. Ermita,21 to wit:

Executive privilege

The phrase "executive privilege" is not new in this jurisdiction. It has been used even prior to the promulgation of the 1986 Constitution. Being of American origin, it is best understood in light of how it has been defined and used in the legal literature of the United States.

Schwart defines executive privilege as "the power of the Government to withhold information from the public, the courts, and the Congress. Similarly, Rozell defines it as "the right of the President and high-level executive branch officers to withhold information from Congress, the courts, and ultimately the public." x x x In this jurisdiction, the doctrine of executive privilege was recognized by this Court in Almonte v. Vasquez. Almonte used the term in reference to the same privilege subject of Nixon. It quoted the following portion of the Nixon decision which explains the basis for the privilege:

"The expectation of a President to the confidentiality of his conversations and correspondences, like the claim of confidentiality of judicial deliberations, for example, he has all the values to which we accord deference for the privacy of all citizens and, added to those values, is the necessity for protection of the public interest in candid, objective, and even blunt or harsh opinions in Presidential decision-making. A President and those who assist him must be free to explore alternatives in the process of shaping policies and making decisions and to do so in a way many would be unwilling to express except privately. These are the considerations justifying a presumptive privilege for Presidential communications. The privilege is fundamental to the operation of government and inextricably rooted in the separation of powers under the Constitution x x x " (Emphasis and italics supplied)

Clearly, therefore, even Senate v. Ermita adverts to "a presumptive privilege for Presidential communication," which was recognized early on in Almonte v. Vasquez. To construe the passage in Senate v. Ermita adverted to in the Motion for Reconsideration of respondent Committees, referring to the non-existence of a "presumptive authorization" of an executive official, to mean that the "presumption" in favor of executive privilege "inclines heavily against executive secrecy and in favor of disclosure" is to distort the ruling in the Senate v. Ermita and make the same engage in selfcontradiction.

Senate v. Ermita22 expounds on the constitutional underpinning of the relationship between the Executive Department and the Legislative Department to explain why there should be no implied authorization or presumptive authorization to invoke executive privilege by the Presidents subordinate officials, as follows:

When Congress exercises its power of inquiry, the only way for department heads to exempt themselves therefrom is by a valid claim of privilege. They are not exempt by the mere fact that they are department heads. Only one executive official may be exempted from this power - the President on whom executive power is vested, hence, beyond the reach of Congress except through the power of impeachment. It is based on he being the highest official of the executive branch, and the due respect accorded to a co-equal branch of governments which is sanctioned by a longstanding custom. (Underscoring supplied)

Thus, if what is involved is the presumptive privilege of presidential communications when invoked by the President on a matter clearly within the domain of the Executive, the said presumption dictates that the same be recognized and be given preference or priority, in the absence of proof of a compelling or critical need for disclosure by the one assailing such presumption. Any construction to the contrary will render meaningless the presumption accorded by settled jurisprudence in favor of executive privilege. In fact, Senate v. Ermita reiterates jurisprudence citing "the considerations justifying a presumptive privilege for Presidential communications."23

II

There Are Factual and Legal Bases to Hold that the Communications Elicited by the Three (3) Questions Are Covered by Executive Privilege

Respondent Committees claim that the communications elicited by the three (3) questions are not covered by executive privilege because the elements of the presidential communications privilege are not present.

A. The power to enter into an executive agreement is a "quintessential and non-delegable presidential power."

First, respondent Committees contend that the power to secure a foreign loan does not relate to a "quintessential and non-delegable presidential power," because the Constitution does not vest it in the President alone, but also in the Monetary Board which is required to give its prior concurrence and to report to Congress.

This argument is unpersuasive.

The fact that a power is subject to the concurrence of another entity does not make such power less executive. "Quintessential" is defined as the most perfect embodiment of something, the concentrated essence of substance.24 On the other hand, "non-delegable" means that a power or duty cannot be delegated to another or, even if delegated, the responsibility remains with the obligor.25 The power to enter into an executive agreement is in essence an executive power. This authority of the President to enter into executive agreements without the concurrence of the Legislature has traditionally been recognized in Philippine jurisprudence.26 Now, the fact that the President has to secure the prior concurrence of the Monetary Board, which shall submit to Congress a complete report of its decision before contracting or guaranteeing foreign loans, does not diminish the executive nature of the power.

The inviolate doctrine of separation of powers among the legislative, executive and judicial branches of government by no means prescribes absolute autonomy in the discharge by each branch of that part of the governmental power assigned to it by the sovereign people. There is the corollary doctrine of checks and balances, which has been carefully calibrated by the Constitution to temper the official acts of each of these three branches. Thus, by analogy, the fact that certain legislative acts require action from the President for their validity does not render such acts less legislative in nature. A good example is the power to pass a law. Article VI, Section 27 of the Constitution mandates that every bill passed by Congress shall, before it becomes a law, be presented to the President who shall approve or veto the same. The fact that the approval or vetoing of the bill is lodged with the President does not render the power to pass law executive in nature. This is because the power to pass law is generally a quintessential and non-delegable power of the Legislature. In the same vein, the executive power to enter or not to enter into a contract to secure foreign loans does not become less executive in nature because of conditions laid down in the Constitution. The final decision in the exercise of the said executive power is still lodged in the Office of the President.

B. The "doctrine of operational proximity" was laid down precisely to limit the scope of the presidential communications privilege but, in any case, it is not conclusive.

Second, respondent Committees also seek reconsideration of the application of the "doctrine of operational proximity" for the reason that "it maybe misconstrued to expand the scope of the presidential communications privilege to communications between those who are operationally proximate to the President but who may have "no direct communications with her."

It must be stressed that the doctrine of "operational proximity" was laid down in In re: Sealed Case27precisely to limit the scope of the presidential communications privilege. The U.S. court was aware of the dangers that a limitless extension of the privilege risks and, therefore, carefully cabined its reach by explicitly confining it to White House staff, and not to staffs of the agencies, and then only to White House staff that has "operational proximity" to direct presidential decisionmaking, thus:

We are aware that such an extension, unless carefully circumscribed to accomplish the purposes of the privilege, could pose a significant risk of expanding to a large swath of the executive branch a privilege that is bottomed on a recognition of the unique role of the President. In order to limit this risk, the presidential communications privilege should be construed as narrowly as is consistent with ensuring that the confidentiality of the Presidents decision-making process is adequately protected. Not every person who plays a role in the development of presidential advice, no matter how remote and removed from the President, can qualify for the privilege. In particular, the privilege should not extend to staff outside the White House in executive branch agencies. Instead, the privilege should apply only to communications authored or solicited and received by those members of an immediate White House advisors staff who have broad and significant responsibility for investigation and formulating the advice to be given the President on the particular matter to which the communications relate. Only communications at that level are close enough to the President to be revelatory of his deliberations or to pose a risk to the candor of his advisers. See AAPS, 997 F.2d at 910 (it is "operational proximity" to the President that matters in determining whether "[t]he Presidents confidentiality interests" is implicated). (Emphasis supplied)

In the case at bar, the danger of expanding the privilege "to a large swath of the executive branch" (a fear apparently entertained by respondents) is absent because the official involved here is a member of the Cabinet, thus, properly within the term "advisor" of the President; in fact, her alter ego and a member of her official family. Nevertheless, in circumstances in which the official involved is far too remote, this Court also mentioned in the Decision the organizational test laid down in Judicial Watch, Inc. v. Department of Justice.28 This goes to show that the operational proximity test used in the Decision is not considered conclusive in every case. In determining which test to use, the main consideration is to limit the availability of executive privilege only to officials who stand proximate to the President, not only by reason of their function, but also by reason of their positions in the Executives organizational structure. Thus, respondent Committees fear that the scope of the privilege would be unnecessarily expanded with the use of the operational proximity test is unfounded.

C. The Presidents claim of executive privilege is not merely based on a generalized interest; and in balancing respondent Committees and the Presidents clashing interests, the Court did not disregard the 1987 Constitutional provisions on government transparency, accountability and disclosure of information.

Third, respondent Committees claim that the Court erred in upholding the Presidents invocation, through the Executive Secretary, of executive privilege because (a) between respondent Committees specific and demonstrated need and the Presidents generalized interest in confidentiality, there is a need to strike the balance in favor of the former; and (b) in the balancing of interest, the Court disregarded the provisions of the 1987 Philippine Constitution on government transparency, accountability and disclosure of information, specifically, Article III, Section 7;29 Article II, Sections 2430 and 28;31 Article XI, Section 1;32 Article XVI, Section 10;33 Article VII, Section 20;34 and Article XII, Sections 9,35 21,36 and 22.37

It must be stressed that the Presidents claim of executive privilege is not merely founded on her generalized interest in confidentiality. The Letter dated November 15, 2007 of Executive Secretary Ermita specified presidential communications privilege in relation to diplomatic and economic relations with another sovereign nation as the bases for the claim. Thus, the Letter stated:

The context in which executive privilege is being invoked is that the information sought to be disclosed might impair our diplomatic as well as economic relations with the Peoples Republic of China. Given the confidential nature in which this information were conveyed to the President, he cannot provide the Committee any further details of these conversations, without disclosing the very thing the privilege is designed to protect. (emphasis supplied)

Even in Senate v. Ermita, it was held that Congress must not require the Executive to state the reasons for the claim with such particularity as to compel disclosure of the information which the privilege is meant to protect. This is a matter of respect for a coordinate and co-equal department.

It is easy to discern the danger that goes with the disclosure of the Presidents communication with her advisor. The NBN Project involves a foreign country as a party to the agreement. It was actually a product of the meeting of minds between officials of the Philippines and China. Whatever the President says about the agreement - particularly while official negotiations are ongoing - are matters which China will surely view with particular interest. There is danger in such kind of exposure. It could adversely affect our diplomatic as well as economic relations with the Peoples Republic of China. We reiterate the importance of secrecy in matters involving foreign negotiations as stated in United States v. Curtiss-Wright Export Corp., 38 thus:

The nature of foreign negotiations requires caution, and their success must often depend on secrecy, and even when brought to a conclusion, a full disclosure of all the measures, demands, or eventual concessions which may have been proposed or contemplated would be extremely impolitic, for this might have a pernicious influence on future negotiations or produce immediate inconveniences, perhaps danger and mischief, in relation to other powers. The necessity of such caution and secrecy was one cogent reason for vesting the power of making treaties in the President, with the advice and consent of the Senate, the principle on which the body was formed confining it to a small number of members. To admit, then, a right in the House of Representatives to demand and to have as a matter of course all the papers respecting a negotiation with a foreign power would be to establish a dangerous precedent.

US jurisprudence clearly guards against the dangers of allowing Congress access to all papers relating to a negotiation with a foreign power. In this jurisdiction, the recent case of Akbayan Citizens Action Party, et al. v. Thomas G. Aquino, et al.39 upheld the privileged character of diplomatic negotiations. In Akbayan, the Court stated:

Privileged character of diplomatic negotiations

The privileged character of diplomatic negotiations has been recognized in this jurisdiction. In discussing valid limitations on the right to information, the Court in Chavez v. PCGG held that "information on inter-government exchanges prior to the conclusion of treaties and executive agreements may be subject to reasonable safeguards for the sake of national interest." Even earlier, the same privilege was upheld in Peoples Movement for Press Freedom (PMPF) v. Manglapus wherein the Court discussed the reasons for the privilege in more precise terms.

In PMPF v. Manglapus, the therein petitioners were seeking information from the Presidents representatives on the state of the then on-going negotiations of the RP-US Military Bases Agreement. The Court denied the petition, stressing that "secrecy of negotiations with foreign countries is not violative of the constitutional provisions of freedom of speech or of the press nor of the freedom of access to information." The Resolution went on to state, thus:

The nature of diplomacy requires centralization of authority and expedition of decision which are inherent in executive action. Another essential characteristic of diplomacy is its confidential nature. Although much has been said about "open" and "secret" diplomacy, with disparagement of the latter, Secretaries of State Hughes and Stimson have clearly analyzed and justified the practice. In the words of Mr. Stimson:

"A complicated negotiation cannot be carried through without many, many private talks and discussion, man to man; many tentative suggestions and proposals. Delegates from other countries come and tell you in confidence of their troubles at home and of their differences with other countries and with other delegates; they tell you of what they would do under certain circumstances and would not do under other circumstances If these reports should become public who would ever trust American Delegations in another conference? (United States Department of State, Press Releases, June 7, 1930, pp. 282-284)

xxxx

There is frequent criticism of the secrecy in which negotiation with foreign powers on nearly all subjects is concerned. This, it is claimed, is incompatible with the substance of democracy. As expressed by one writer, "It can be said that there is no more rigid system of silence anywhere in the world." (E.J. Young, Looking Behind the Censorship, J. B. Lipincott Co., 1938) President Wilson in starting his efforts for the conclusion of the World War declared that we must have "open covenants, openly arrived at." He quickly abandoned his thought.

No one who has studied the question believes that such a method of publicity is possible. In the moment that negotiations are started, pressure groups attempt to "muscle in." An ill-timed speech

by one of the parties or a frank declaration of the concession which are exacted or offered on both sides would quickly lead to a widespread propaganda to block the negotiations. After a treaty has been drafted and its terms are fully published, there is ample opportunity for discussion before it is approved. (The New American Government and Its Works, James T. Young, 4th Edition, p. 194) (Emphasis and underscoring supplied)

Still in PMPF v. Manglapus, the Court adopted the doctrine in U.S. v. Curtiss-Wright Export Corp. that the President is the sole organ of the nation in its negotiations with foreign countries,viz:

"x x x In this vast external realm, with its important, complicated, delicate and manifold problems, the President alone has the power to speak or listen as a representative of the nation. He makes treaties with the advice and consent of the Senate; but he alone negotiates. Into the field of negotiation the Senate cannot intrude; and Congress itself is powerless to invade it. As Marshall said in his great arguments of March 7, 1800, in the House of Representatives, "The President is the sole organ of the nation in its external relations, and its sole representative with foreign nations." Annals, 6th Cong., col. 613 (Emphasis supplied; underscoring in the original)

Considering that the information sought through the three (3) questions subject of this Petition involves the Presidents dealings with a foreign nation, with more reason, this Court is wary of approving the view that Congress may peremptorily inquire into not only official, documented acts of the President but even her confidential and informal discussions with her close advisors on the pretext that said questions serve some vague legislative need. Regardless of who is in office, this Court can easily foresee unwanted consequences of subjecting a Chief Executive to unrestricted congressional inquiries done with increased frequency and great publicity. No Executive can effectively discharge constitutional functions in the face of intense and unchecked legislative incursion into the core of the Presidents decision-making process, which inevitably would involve her conversations with a member of her Cabinet.

With respect to respondent Committees invocation of constitutional prescriptions regarding the right of the people to information and public accountability and transparency, the Court finds nothing in these arguments to support respondent Committees case.

There is no debate as to the importance of the constitutional right of the people to information and the constitutional policies on public accountability and transparency. These are the twin postulates vital to the effective functioning of a democratic government. The citizenry can become prey to the whims and caprices of those to whom the power has been delegated if they are denied access to information. And the policies on public accountability and democratic government would certainly be mere empty words if access to such information of public concern is denied.

In the case at bar, this Court, in upholding executive privilege with respect to three (3) specific questions, did not in any way curb the publics right to information or diminish the importance of public accountability and transparency.

This Court did not rule that the Senate has no power to investigate the NBN Project in aid of legislation. There is nothing in the assailed Decision that prohibits respondent Committees from inquiring into the NBN Project. They could continue the investigation and even call petitioner Neri to testify again. He himself has repeatedly expressed his willingness to do so. Our Decision merely excludes from the scope of respondents investigation the three (3) questions that elicit answers covered by executive privilege and rules that petitioner cannot be compelled to appear before respondents to answer the said questions. We have discussed the reasons why these answers are covered by executive privilege. That there is a recognized public interest in the confidentiality of such information is a recognized principle in other democratic States. To put it simply, the right to information is not an absolute right.

Indeed, the constitutional provisions cited by respondent Committees do not espouse an absolute right to information. By their wording, the intention of the Framers to subject such right to the regulation of the law is unmistakable. The highlighted portions of the following provisions show the obvious limitations on the right to information, thus:

Article III, 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 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.

Article II, Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest. (Emphasis supplied)

In Chavez v. Presidential Commission on Good Government,40 it was stated that there are no specific laws prescribing the exact limitations within which the right may be exercised or the correlative state duty may be obliged. Nonetheless, it enumerated the recognized restrictions to such rights, among them: (1) national security matters, (2) trade secrets and banking transactions, (3) criminal matters, and (4) other confidential information. National security matters include state secrets regarding military and diplomatic matters, as well as information on inter-government exchanges prior to the conclusion of treaties and executive agreements. It was further held that even where there is no need to protect such state secrets, they must be "examined in strict confidence and given scrupulous protection."

Incidentally, the right primarily involved here is the right of respondent Committees to obtain information allegedly in aid of legislation, not the peoples right to public information. This is the reason why we stressed in the assailed Decision the distinction between these two rights. As laid down in Senate v. Ermita, "the demand of a citizen for the production of documents pursuant to his right to information does not have the same obligatory force as a subpoena duces tecum issued by Congress" and "neither does the right to information grant a citizen the power to exact testimony from government officials." As pointed out, these rights belong to Congress, not to the individual citizen. It is worth mentioning at this juncture that the parties here are respondent Committees and petitioner Neri and that there was no prior request for information on the part of any individual citizen. This Court will not be swayed by attempts to blur the distinctions between the Legislature's right to information in a legitimate legislative inquiry and the public's right to information.

For clarity, it must be emphasized that the assailed Decision did not enjoin respondent Committees from inquiring into the NBN Project. All that is expected from them is to respect matters that are covered by executive privilege.

III.

Respondent Committees Failed to Show That the Communications Elicited by the Three Questions Are Critical to the Exercise of their Functions

In their Motion for Reconsideration, respondent Committees devote an unusually lengthy discussion on the purported legislative nature of their entire inquiry, as opposed to an oversight inquiry.

At the outset, it must be clarified that the Decision did not pass upon the nature of respondent Committees inquiry into the NBN Project. To reiterate, this Court recognizes respondent Committees power to investigate the NBN Project in aid of legislation. However, this Court cannot uphold the view that when a constitutionally guaranteed privilege or right is validly invoked by a witness in the course of a legislative investigation, the legislative purpose of respondent Committees questions can be sufficiently supported by the expedient of mentioning statutes and/or pending bills to which their inquiry as a whole may have relevance. The jurisprudential test laid down by this Court in past decisions on executive privilege is that the presumption of privilege can only be overturned by a showing of compelling need for disclosure of the information covered by executive privilege.

In the Decision, the majority held that "there is no adequate showing of a compelling need that would justify the limitation of the privilege and of the unavailability of the information elsewhere by an appropriate investigating authority." In the Motion for Reconsideration, respondent

Committees argue that the information elicited by the three (3) questions are necessary in the discharge of their legislative functions, among them, (a) to consider the three (3) pending Senate Bills, and (b) to curb graft and corruption.

We remain unpersuaded by respondents assertions.

In U.S. v. Nixon, the U.S. Court held that executive privilege is subject to balancing against other interests and it is necessary to resolve the competing interests in a manner that would preserve the essential functions of each branch. There, the Court weighed between presidential privilege and the legitimate claims of the judicial process. In giving more weight to the latter, the Court ruled that the President's generalized assertion of privilege must yield to the demonstrated, specific need for evidence in a pending criminal trial.

The Nixon Court ruled that an absolute and unqualified privilege would stand in the way of the primary constitutional duty of the Judicial Branch to do justice in criminal prosecutions. The said Court further ratiocinated, through its ruling extensively quoted in the Honorable Chief Justice Puno's dissenting opinion, as follows:

"... this presumptive privilege must be considered in light of our historic commitment to the rule of law. This is nowhere more profoundly manifest than in our view that 'the twofold aim (of criminal justice) is that guild shall not escape or innocence suffer.' Berger v. United States, 295 U.S., at 88, 55 S.Ct., at 633. We have elected to employ an adversary system of criminal justice in which the parties contest all issues before a court of law. The need to develop all relevant facts in the adversary system is both fundamental and comprehensive. The ends of criminal justice would be defeated if judgments were to be founded on a partial or speculative presentation of the facts. The very integrity of the judicial system and public confidence in the system depend on full disclosure of all the facts, within the framework of the rules of evidence. To ensure that justice is done, it is imperative to the function of courts that compulsory process be available for the production of evidence needed either by the prosecution or by the defense.

xxx xxx xxx

The right to the production of all evidence at a criminal trial similarly has constitutional dimensions. The Sixth Amendment explicitly confers upon every defendant in a criminal trial the right 'to be confronted with the witness against him' and 'to have compulsory process for obtaining witnesses in his favor.' Moreover, the Fifth Amendment also guarantees that no person shall be deprived of liberty without due process of law. It is the manifest duty of the courts to vindicate those guarantees, and to accomplish that it is essential that all relevant and admissible evidence be produced.

In this case we must weigh the importance of the general privilege of confidentiality of Presidential communications in performance of the President's responsibilities against the inroads of such a privilege on the fair administration of criminal justice. (emphasis supplied)

xxx xxx xxx

...the allowance of the privilege to withhold evidence that is demonstrably relevant in a criminal trial would cut deeply into the guarantee of due process of law and gravely impair the basic function of the courts. A President's acknowledged need for confidentiality in the communications of his office is general in nature, whereas the constitutional need for production of relevant evidence in a criminal proceeding is specific and central to the fair adjudication of a particular criminal case in the administration of justice. Without access to specific facts a criminal prosecution may be totally frustrated. The President's broad interest in confidentiality of communication will not be vitiated by disclosure of a limited number of conversations preliminarily shown to have some bearing on the pending criminal cases.

We conclude that when the ground for asserting privilege as to subpoenaed materials sought for use in a criminal trial is based only on the generalized interest in confidentiality, it cannot prevail over the fundamental demands of due process of law in the fair administration of criminal justice. The generalized assertion of privilege must yield to the demonstrated, specific need for evidence in a pending criminal trial. (emphasis supplied)

In the case at bar, we are not confronted with a courts need for facts in order to adjudge liability in a criminal case but rather with the Senates need for information in relation to its legislative functions. This leads us to consider once again just how critical is the subject information in the discharge of respondent Committees functions. The burden to show this is on the respondent Committees, since they seek to intrude into the sphere of competence of the President in order to gather information which, according to said respondents, would "aid" them in crafting legislation.

Senate Select Committee on Presidential Campaign Activities v. Nixon41 expounded on the nature of a legislative inquiry in aid of legislation in this wise:

The sufficiency of the Committee's showing of need has come to depend, therefore, entirely on whether the subpoenaed materials are critical to the performance of its legislative functions. There is a clear difference between Congress' legislative tasks and the responsibility of a grand jury, or any institution engaged in like functions. While fact-finding by a legislative committee is undeniably a part of its task, legislative judgments normally depend more on the predicted consequences of proposed legislative actions and their political acceptability, than on precise reconstruction of past events; Congress frequently legislates on the basis of conflicting information provided in its hearings. In contrast, the responsibility of the grand jury turns entirely on its ability to determine whether there is probable cause to believe that certain named individuals did or did not commit

specific crimes. If, for example, as in Nixon v. Sirica, one of those crimes is perjury concerning the content of certain conversations, the grand jury's need for the most precise evidence, the exact text of oral statements recorded in their original form, is undeniable. We see no comparable need in the legislative process, at least not in the circumstances of this case. Indeed, whatever force there might once have been in the Committee's argument that the subpoenaed materials are necessary to its legislative judgments has been substantially undermined by subsequent events. (Emphasis supplied)

Clearly, the need for hard facts in crafting legislation cannot be equated with the compelling or demonstratively critical and specific need for facts which is so essential to the judicial power to adjudicate actual controversies. Also, the bare standard of "pertinency" set in Arnault cannot be lightly applied to the instant case, which unlike Arnault involves a conflict between two (2) separate, co-equal and coordinate Branches of the Government.

Whatever test we may apply, the starting point in resolving the conflicting claims between the Executive and the Legislative Branches is the recognized existence of the presumptive presidential communications privilege. This is conceded even in the Dissenting Opinion of the Honorable Chief Justice Puno, which states:

A hard look at Senate v. Ermita ought to yield the conclusion that it bestowed a qualified presumption in favor of the Presidential communications privilege. As shown in the previous discussion, U.S. v. Nixon, as well as the other related Nixon cases Sirica and Senate Select Committee on Presidential Campaign Activities, et al., v. Nixon in the D.C. Court of Appeals, as well as subsequent cases all recognize that there is a presumptive privilege in favor of Presidential communications. The Almonte case quoted U.S. v. Nixon and recognized a presumption in favor of confidentiality of Presidential communications.

The presumption in favor of Presidential communications puts the burden on the respondent Senate Committees to overturn the presumption by demonstrating their specific need for the information to be elicited by the answers to the three (3) questions subject of this case, to enable them to craft legislation. Here, there is simply a generalized assertion that the information is pertinent to the exercise of the power to legislate and a broad and non-specific reference to pending Senate bills. It is not clear what matters relating to these bills could not be determined without the said information sought by the three (3) questions. As correctly pointed out by the Honorable Justice Dante O. Tinga in his Separate Concurring Opinion:

If respondents are operating under the premise that the president and/or her executive officials have committed wrongdoings that need to be corrected or prevented from recurring by remedial legislation, the answer to those three questions will not necessarily bolster or inhibit respondents from proceeding with such legislation. They could easily presume the worst of the president in enacting such legislation.

For sure, a factual basis for situations covered by bills is not critically needed before legislatives bodies can come up with relevant legislation unlike in the adjudication of cases by courts of law. Interestingly, during the Oral Argument before this Court, the counsel for respondent Committees impliedly admitted that the Senate could still come up with legislations even without petitioner answering the three (3) questions. In other words, the information being elicited is not so critical after all. Thus:

CHIEF JUSTICE PUNO

So can you tell the Court how critical are these questions to the lawmaking function of the Senate. For instance, question Number 1 whether the President followed up the NBN project. According to the other counsel this question has already been asked, is that correct?

ATTY. AGABIN

Well, the question has been asked but it was not answered, Your Honor.

CHIEF JUSTICE PUNO

Yes. But my question is how critical is this to the lawmaking function of the Senate?

ATTY. AGABIN

I believe it is critical, Your Honor.

CHIEF JUSTICE PUNO

Why?

ATTY. AGABIN

For instance, with respect to the proposed Bill of Senator Miriam Santiago, she would like to indorse a Bill to include Executive Agreements had been used as a device to the circumventing the Procurement Law.

CHIEF JUSTICE PUNO

But the question is just following it up.

ATTY. AGABIN

I believe that may be the initial question, Your Honor, because if we look at this problem in its factual setting as counsel for petitioner has observed, there are intimations of a bribery scandal involving high government officials.

CHIEF JUSTICE PUNO

Again, about the second question, were you dictated to prioritize this ZTE, is that critical to the lawmaking function of the Senate? Will it result to the failure of the Senate to cobble a Bill without this question?

ATTY. AGABIN

I think it is critical to lay the factual foundations for a proposed amendment to the Procurement Law, Your Honor, because the petitioner had already testified that he was offered a P200 Million bribe, so if he was offered a P200 Million bribe it is possible that other government officials who had something to do with the approval of the contract would be offered the same amount of bribes.

CHIEF JUSTICE PUNO

Again, that is speculative.

ATTY. AGABIN

That is why they want to continue with the investigation, Your Honor.

CHIEF JUSTICE PUNO

How about the third question, whether the President said to go ahead and approve the project after being told about the alleged bribe. How critical is that to the lawmaking function of the Senate? And the question is may they craft a Bill a remedial law without forcing petitioner Neri to answer this question?

ATTY. AGABIN

Well, they can craft it, Your Honor, based on mere speculation. And sound legislation requires that a proposed Bill should have some basis in fact.42

The failure of the counsel for respondent Committees to pinpoint the specific need for the information sought or how the withholding of the information sought will hinder the accomplishment of their legislative purpose is very evident in the above oral exchanges. Due to the failure of the respondent Committees to successfully discharge this burden, the presumption in favor of confidentiality of presidential communication stands. The implication of the said presumption, like any other, is to dispense with the burden of proof as to whether the disclosure will significantly impair the Presidents performance of her function. Needless to state this is assumed, by virtue of the presumption.

Anent respondent Committees bewailing that they would have to "speculate" regarding the questions covered by the privilege, this does not evince a compelling need for the information sought. Indeed, Senate Select Committee on Presidential Campaign Activities v. Nixon43 held that while fact-finding by a legislative committee is undeniably a part of its task, legislative judgments normally depend more on the predicted consequences of proposed legislative actions and their political acceptability than on a precise reconstruction of past events. It added that, normally, Congress legislates on the basis of conflicting information provided in its hearings. We cannot subscribe to the respondent Committees self-defeating proposition that without the answers to the three (3) questions objected to as privileged, the distinguished members of the respondent Committees cannot intelligently craft legislation.

Anent the function to curb graft and corruption, it must be stressed that respondent Committees need for information in the exercise of this function is not as compelling as in instances when the purpose of the inquiry is legislative in nature. This is because curbing graft and corruption is merely an oversight function of Congress.44 And if this is the primary objective of respondent Committees in asking the three (3) questions covered by privilege, it may even contradict their claim that their purpose is legislative in nature and not oversight. In any event, whether or not investigating graft and corruption is a legislative or oversight function of Congress, respondent Committees investigation cannot transgress bounds set by the Constitution.

In Bengzon, Jr. v. Senate Blue Ribbon Committee,45 this Court ruled:

The "allocation of constitutional boundaries" is a task that this Court must perform under the Constitution. Moreover, as held in a recent case, "the political question doctrine neither interposes an obstacle to judicial determination of the rival claims. The jurisdiction to delimit constitutional boundaries has been given to this Court. It cannot abdicate that obligation mandated by the 1987 Constitution, although said provision by no means does away with the applicability of the principle in appropriate cases.46 (Emphasis supplied)

There, the Court further ratiocinated that "the contemplated inquiry by respondent Committee is not really in aid of legislation because it is not related to a purpose within the jurisdiction of Congress, since the aim of the investigation is to find out whether or not the relatives of the President or Mr. Ricardo Lopa had violated Section 5 of R.A. No. 3019, the Anti-Graft and Corrupt Practices Act, a matter that appears more within the province of the courts rather than of the Legislature."47 (Emphasis and underscoring supplied)

The general thrust and the tenor of the three (3) questions is to trace the alleged bribery to the Office of the President.48 While it may be a worthy endeavor to investigate the potential culpability of high government officials, including the President, in a given government transaction, it is simply not a task for the Senate to perform. The role of the Legislature is to make laws, not to determine anyones guilt of a crime or wrongdoing. Our Constitution has not bestowed upon the Legislature the latter role. Just as the Judiciary cannot legislate, neither can the Legislature adjudicate or prosecute.

Respondent Committees claim that they are conducting an inquiry in aid of legislation and a "search for truth," which in respondent Committees view appears to be equated with the search for persons responsible for "anomalies" in government contracts.

No matter how noble the intentions of respondent Committees are, they cannot assume the power reposed upon our prosecutorial bodies and courts. The determination of who is/are liable for a crime or illegal activity, the investigation of the role played by each official, the determination of who should be haled to court for prosecution and the task of coming up with conclusions and finding of facts regarding anomalies, especially the determination of criminal guilt, are not functions of the Senate. Congress is neither a law enforcement nor a trial agency. Moreover, it bears stressing that no inquiry is an end in itself; it must be related to, and in furtherance of, a legitimate task of the Congress, i.e. legislation. Investigations conducted solely to gather incriminatory evidence and "punish" those investigated are indefensible. There is no Congressional power to expose for the sake of exposure.49 In this regard, the pronouncement in Barenblatt v. United States50 is instructive, thus:

Broad as it is, the power is not, however, without limitations. Since Congress may only investigate into the areas in which it may potentially legislate or appropriate, it cannot inquire into matters which are within the exclusive province of one of the other branches of the government. Lacking the judicial power given to the Judiciary, it cannot inquire into matters that are exclusively the

concern of the Judiciary. Neither can it supplant the Executive in what exclusively belongs to the Executive. (Emphasis supplied.)

At this juncture, it is important to stress that complaints relating to the NBN Project have already been filed against President Arroyo and other personalities before the Office of the Ombudsman. Under our Constitution, it is the Ombudsman who has the duty "to investigate 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."51 The Office of the Ombudsman is the body properly equipped by the Constitution and our laws to preliminarily determine whether or not the allegations of anomaly are true and who are liable therefor. The same holds true for our courts upon which the Constitution reposes the duty to determine criminal guilt with finality. Indeed, the rules of procedure in the Office of the Ombudsman and the courts are well-defined and ensure that the constitutionally guaranteed rights of all persons, parties and witnesses alike, are protected and safeguarded.

Should respondent Committees uncover information related to a possible crime in the course of their investigation, they have the constitutional duty to refer the matter to the appropriate agency or branch of government. Thus, the Legislatures need for information in an investigation of graft and corruption cannot be deemed compelling enough to pierce the confidentiality of information validly covered by executive privilege. As discussed above, the Legislature can still legislate on graft and corruption even without the information covered by the three (3) questions subject of the petition.

Corollarily, respondent Committees justify their rejection of petitioners claim of executive privilege on the ground that there is no privilege when the information sought might involve a crime or illegal activity, despite the absence of an administrative or judicial determination to that effect. Significantly, however, in Nixon v. Sirica,52 the showing required to overcome the presumption favoring confidentiality turned, not on the nature of the presidential conduct that the subpoenaed material might reveal, but, instead, on the nature and appropriateness of the function in the performance of which the material was sought, and the degree to which the material was necessary to its fulfillment.

Respondent Committees assert that Senate Select Committee on Presidential Campaign Activities v. Nixon does not apply to the case at bar because, unlike in the said case, no impeachment proceeding has been initiated at present. The Court is not persuaded. While it is true that no impeachment proceeding has been initiated, however, complaints relating to the NBN Project have already been filed against President Arroyo and other personalities before the Office of the Ombudsman. As the Court has said earlier, the prosecutorial and judicial arms of government are the bodies equipped and mandated by the Constitution and our laws to determine whether or not the allegations of anomaly in the NBN Project are true and, if so, who should be prosecuted and penalized for criminal conduct.

Legislative inquiries, unlike court proceedings, are not subject to the exacting standards of evidence essential to arrive at accurate factual findings to which to apply the law. Hence, Section 10 of the Senate Rules of Procedure Governing Inquiries in Aid of Legislation provides that "technical rules of evidence applicable to judicial proceedings which do not affect substantive rights need not be observed by the Committee." Court rules which prohibit leading, hypothetical, or repetitive questions or questions calling for a hearsay answer, to name a few, do not apply to a legislative inquiry. Every person, from the highest public official to the most ordinary citizen, has the right to be presumed innocent until proven guilty in proper proceedings by a competent court or body.

IV

Respondent Committees Committed Grave Abuse of Discretion in Issuing the Contempt Order

Respondent Committees insist that they did not commit grave abuse of discretion in issuing the contempt order because (1) there is no legitimate claim of executive privilege; (2) they did not violate the requirements laid down in Senate v. Ermita; (3) they issued the contempt order in accordance with their internal Rules; (4) they did not violate the requirement under Article VI, Section 21 of the Constitution requiring the publication of their Rules; and (5) their issuance of the contempt order is not arbitrary or precipitate.

We reaffirm our earlier ruling.

The legitimacy of the claim of executive privilege having been fully discussed in the preceding pages, we see no reason to discuss it once again.

Respondent Committees second argument rests on the view that the ruling in Senate v. Ermita, requiring invitations or subpoenas to contain the "possible needed statute which prompted the need for the inquiry" along with the "usual indication of the subject of inquiry and the questions relative to and in furtherance thereof" is not provided for by the Constitution and is merely an obiter dictum.

On the contrary, the Court sees the rationale and necessity of compliance with these requirements.

An unconstrained congressional investigative power, like an unchecked Executive, generates its own abuses. Consequently, claims that the investigative power of Congress has been abused (or has the potential for abuse) have been raised many times.53 Constant exposure to congressional subpoena takes its toll on the ability of the Executive to function effectively. The requirements set forth in Senate v. Ermita are modest mechanisms that would not unduly limit Congress power. The

legislative inquiry must be confined to permissible areas and thus, prevent the "roving commissions" referred to in the U.S. case, Kilbourn v. Thompson.54 Likewise, witnesses have their constitutional right to due process. They should be adequately informed what matters are to be covered by the inquiry. It will also allow them to prepare the pertinent information and documents. To our mind, these requirements concede too little political costs or burdens on the part of Congress when viewed vis--vis the immensity of its power of inquiry. The logic of these requirements is well articulated in the study conducted by William P. Marshall,55 to wit:

A second concern that might be addressed is that the current system allows committees to continually investigate the Executive without constraint. One process solution addressing this concern is to require each investigation be tied to a clearly stated purpose. At present, the charters of some congressional committees are so broad that virtually any matter involving the Executive can be construed to fall within their province. Accordingly, investigations can proceed without articulation of specific need or purpose. A requirement for a more precise charge in order to begin an inquiry should immediately work to limit the initial scope of the investigation and should also serve to contain the investigation once it is instituted. Additionally, to the extent clear statements of rules cause legislatures to pause and seriously consider the constitutional implications of proposed courses of action in other areas, they would serve that goal in the context of congressional investigations as well.

The key to this reform is in its details. A system that allows a standing committee to simply articulate its reasons to investigate pro forma does no more than imposes minimal drafting burdens. Rather, the system must be designed in a manner that imposes actual burdens on the committee to articulate its need for investigation and allows for meaningful debate about the merits of proceeding with the investigation. (Emphasis supplied)

Clearly, petitioners request to be furnished an advance copy of questions is a reasonable demand that should have been granted by respondent Committees.

Unfortunately, the Subpoena Ad Testificandum dated November 13, 2007 made no specific reference to any pending Senate bill. It did not also inform petitioner of the questions to be asked. As it were, the subpoena merely commanded him to "testify on what he knows relative to the subject matter under inquiry."

Anent the third argument, respondent Committees contend that their Rules of Procedure Governing Inquiries in Aid of Legislation (the "Rules") are beyond the reach of this Court. While it is true that this Court must refrain from reviewing the internal processes of Congress, as a co-equal branch of government, however, when a constitutional requirement exists, the Court has the duty to look into Congress compliance therewith. We cannot turn a blind eye to possible violations of the Constitution simply out of courtesy. In this regard, the pronouncement in Arroyo v. De Venecia56 is enlightening, thus:

"Cases both here and abroad, in varying forms of expression, all deny to the courts the power to inquire into allegations that, in enacting a law, a House of Congress failed to comply with its own rules, in the absence of showing that there was a violation of a constitutional provision or the rights of private individuals.

United States v. Ballin, Joseph & Co., the rule was stated thus: The Constitution empowers each House to determine its rules of proceedings. It may not by its rules ignore constitutional restraints or violate fundamental rights, and there should be a reasonable relation between the mode or method of proceeding established by the rule and the result which is sought to be attained."

In the present case, the Courts exercise of its power of judicial review is warranted because there appears to be a clear abuse of the power of contempt on the part of respondent Committees. Section 18 of the Rules provides that:

"The Committee, by a vote of majority of all its members, may punish for contempt any witness before it who disobey any order of the Committee or refuses to be sworn or to testify or to answer proper questions by the Committee or any of its members." (Emphasis supplied)

In the assailed Decision, we said that there is a cloud of doubt as to the validity of the contempt order because during the deliberation of the three (3) respondent Committees, only seven (7) Senators were present. This number could hardly fulfill the majority requirement needed by respondent Committee on Accountability of Public Officers and Investigations which has a membership of seventeen (17) Senators and respondent Committee on National Defense and Security which has a membership of eighteen (18) Senators. With respect to respondent Committee on Trade and Commerce which has a membership of nine (9) Senators, only three (3) members were present.57 These facts prompted us to quote in the Decision the exchanges between Senators Alan Peter Cayetano and Aquilino Pimentel, Jr. whereby the former raised the issue of lack of the required majority to deliberate and vote on the contempt order.

When asked about such voting during the March 4, 2008 hearing before this Court, Senator Francis Pangilinan stated that any defect in the committee voting had been cured because two-thirds of the Senators effectively signed for the Senate in plenary session.58

Obviously the deliberation of the respondent Committees that led to the issuance of the contempt order is flawed. Instead of being submitted to a full debate by all the members of the respondent Committees, the contempt order was prepared and thereafter presented to the other members for signing. As a result, the contempt order which was issued on January 30, 2008 was not a faithful representation of the proceedings that took place on said date. Records clearly show that not all of those who signed the contempt order were present during the January 30, 2008 deliberation when the matter was taken up.

Section 21, Article VI of the Constitution states that:

The Senate or the House of Representatives or any of its respective committees may conduct inquiries in aid of legislation in accordance with its duly published rules of procedure. The rights of person appearing in or affected by such inquiries shall be respected. (Emphasis supplied)

All the limitations embodied in the foregoing provision form part of the witness settled expectation. If the limitations are not observed, the witness settled expectation is shattered. Here, how could there be a majority vote when the members in attendance are not enough to arrive at such majority? Petitioner has the right to expect that he can be cited in contempt only through a majority vote in a proceeding in which the matter has been fully deliberated upon. There is a greater measure of protection for the witness when the concerns and objections of the members are fully articulated in such proceeding. We do not believe that respondent Committees have the discretion to set aside their rules anytime they wish. This is especially true here where what is involved is the contempt power. It must be stressed that the Rules are not promulgated for their benefit. More than anybody else, it is the witness who has the highest stake in the proper observance of the Rules.

Having touched the subject of the Rules, we now proceed to respondent Committees fourth argument. Respondent Committees argue that the Senate does not have to publish its Rules because the same was published in 1995 and in 2006. Further, they claim that the Senate is a continuing body; thus, it is not required to republish the Rules, unless the same is repealed or amended.

On the nature of the Senate as a "continuing body," this Court sees fit to issue a clarification. Certainly, there is no debate that the Senate as an institution is "continuing", as it is not dissolved as an entity with each national election or change in the composition of its members. However, in the conduct of its day-to-day business the Senate of each Congress acts separately and independently of the Senate of the Congress before it. The Rules of the Senate itself confirms this when it states:

RULE XLIV UNFINISHED BUSINESS

SEC. 123. Unfinished business at the end of the session shall be taken up at the next session in the same status.

All pending matters and proceedings shall terminate upon the expiration of one (1) Congress, but may be taken by the succeeding Congress as if present for the first time. (emphasis supplied)

Undeniably from the foregoing, all pending matters and proceedings, i.e. unpassed bills and even legislative investigations, of the Senate of a particular Congress are considered terminated upon the expiration of that Congress and it is merely optional on the Senate of the succeeding Congress to take up such unfinished matters, not in the same status, but as if presented for the first time. The logic and practicality of such a rule is readily apparent considering that the Senate of the succeeding Congress (which will typically have a different composition as that of the previous Congress) should not be bound by the acts and deliberations of the Senate of which they had no part. If the Senate is a continuing body even with respect to the conduct of its business, then pending matters will not be deemed terminated with the expiration of one Congress but will, as a matter of course, continue into the next Congress with the same status.

This dichotomy of the continuity of the Senate as an institution and of the opposite nature of the conduct of its business is reflected in its Rules. The Rules of the Senate (i.e. the Senates main rules of procedure) states:

RULE LI AMENDMENTS TO, OR REVISIONS OF, THE RULES

SEC. 136. At the start of each session in which the Senators elected in the preceding elections shall begin their term of office, the President may endorse the Rules to the appropriate committee for amendment or revision.

The Rules may also be amended by means of a motion which should be presented at least one day before its consideration, and the vote of the majority of the Senators present in the session shall be required for its approval. (emphasis supplied)

RULE LII DATE OF TAKING EFFECT

SEC. 137. These Rules shall take effect on the date of their adoption and shall remain in force until they are amended or repealed. (emphasis supplied)

Section 136 of the Senate Rules quoted above takes into account the new composition of the Senate after an election and the possibility of the amendment or revision of the Rules at the start of each session in which the newly elected Senators shall begin their term.

However, it is evident that the Senate has determined that its main rules are intended to be valid from the date of their adoption until they are amended or repealed. Such language is conspicuously

absent from the Rules. The Rules simply state "(t)hese Rules shall take effect seven (7) days after publication in two (2) newspapers of general circulation."59 The latter does not explicitly provide for the continued effectivity of such rules until they are amended or repealed. In view of the difference in the language of the two sets of Senate rules, it cannot be presumed that the Rules (on legislative inquiries) would continue into the next Congress. The Senate of the next Congress may easily adopt different rules for its legislative inquiries which come within the rule on unfinished business.

The language of Section 21, Article VI of the Constitution requiring that the inquiry be conducted in accordance with the duly published rules of procedure is categorical. It is incumbent upon the Senate to publish the rules for its legislative inquiries in each Congress or otherwise make the published rules clearly state that the same shall be effective in subsequent Congresses or until they are amended or repealed to sufficiently put public on notice.

If it was the intention of the Senate for its present rules on legislative inquiries to be effective even in the next Congress, it could have easily adopted the same language it had used in its main rules regarding effectivity.

Lest the Court be misconstrued, it should likewise be stressed that not all orders issued or proceedings conducted pursuant to the subject Rules are null and void. Only those that result in violation of the rights of witnesses should be considered null and void, considering that the rationale for the publication is to protect the rights of witnesses as expressed in Section 21, Article VI of the Constitution. Sans such violation, orders and proceedings are considered valid and effective.

Respondent Committees last argument is that their issuance of the contempt order is not precipitate or arbitrary. Taking into account the totality of circumstances, we find no merit in their argument.

As we have stressed before, petitioner is not an unwilling witness, and contrary to the assertion of respondent Committees, petitioner did not assume that they no longer had any other questions for him. He repeatedly manifested his willingness to attend subsequent hearings and respond to new matters. His only request was that he be furnished a copy of the new questions in advance to enable him to adequately prepare as a resource person. He did not attend the November 20, 2007 hearing because Executive Secretary Ermita requested respondent Committees to dispense with his testimony on the ground of executive privilege. Note that petitioner is an executive official under the direct control and supervision of the Chief Executive. Why punish petitioner for contempt when he was merely directed by his superior? Besides, save for the three (3) questions, he was very cooperative during the September 26, 2007 hearing.

On the part of respondent Committees, this Court observes their haste and impatience. Instead of ruling on Executive Secretary Ermitas claim of executive privilege, they curtly dismissed it as unsatisfactory and ordered the arrest of petitioner. They could have informed petitioner of their ruling and given him time to decide whether to accede or file a motion for reconsideration. After all, he is not just an ordinary witness; he is a high- ranking official in a co-equal branch of government. He is an alter ego of the President. The same haste and impatience marked the issuance of the contempt order, despite the absence of the majority of the members of the respondent Committees, and their subsequent disregard of petitioners motion for reconsideration alleging the pendency of his petition for certiorari before this Court.

On a concluding note, we are not unmindful of the fact that the Executive and the Legislature are political branches of government. In a free and democratic society, the interests of these branches inevitably clash, but each must treat the other with official courtesy and respect. This Court wholeheartedly concurs with the proposition that it is imperative for the continued health of our democratic institutions that we preserve the constitutionally mandated checks and balances among the different branches of government.

In the present case, it is respondent Committees contention that their determination on the validity of executive privilege should be binding on the Executive and the Courts. It is their assertion that their internal procedures and deliberations cannot be inquired into by this Court supposedly in accordance with the principle of respect between co-equal branches of government. Interestingly, it is a courtesy that they appear to be unwilling to extend to the Executive (on the matter of executive privilege) or this Court (on the matter of judicial review). It moves this Court to wonder: In respondent Committees paradigm of checks and balances, what are the checks to the Legislatures all-encompassing, awesome power of investigation? It is a power, like any other, that is susceptible to grave abuse.

While this Court finds laudable the respondent Committees well-intentioned efforts to ferret out corruption, even in the highest echelons of government, such lofty intentions do not validate or accord to Congress powers denied to it by the Constitution and granted instead to the other branches of government.

There is no question that any story of government malfeasance deserves an inquiry into its veracity. As respondent Committees contend, this is founded on the constitutional command of transparency and public accountability. The recent clamor for a "search for truth" by the general public, the religious community and the academe is an indication of a concerned citizenry, a nation that demands an accounting of an entrusted power. However, the best venue for this noble undertaking is not in the political branches of government. The customary partisanship and the absence of generally accepted rules on evidence are too great an obstacle in arriving at the truth or achieving justice that meets the test of the constitutional guarantee of due process of law. We believe the people deserve a more exacting "search for truth" than the process here in question, if that is its objective.

WHEREFORE, respondent Committees Motion for Reconsideration dated April 8, 2008 is hereby DENIED.

SO ORDERED.

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