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I.

JUDICIAL POWER

G.R. No. 209287 February 3, 2015


MARIA CAROLINA P. ARAULLO, CHAIRPERSON, BAGONG ALYANSANG MAKABAYAN; JUDY M.
TAGUIWALO, PROFESSOR, UNIVERSITY OF THE PHILIPPINES DILIMAN, CO-CHAIRPERSON,
PAGBABAGO; HENRI KAHN, CONCERNED CITIZENS MOVEMENT; REP. LUZ ILAGAN, GABRIELA
WOMEN'S PARTY REPRESENTATIVE; REP. TERRY L. RIDON, KABATAAN PARTYLIST REPRESENTATIVE;
REP. CARLOS ISAGANI ZARATE, BAYAN MUNA PARTY-LIST REPRESENTATIVE; RENATO M. REYES, JR.,
SECRETARY GENERAL OF BAYAN; MANUEL K. DAYRIT, CHAIRMAN, ANG KAPATIRAN PARTY; VENCER
MARI E. CRISOSTOMO, CHAIRPERSON, ANAKBAYAN; VICTOR VILLANUEVA, CONVENOR, YOUTH ACT
NOW, Petitioners,
vs.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO N.
OCHOA, JR., EXECUTIVE SECRETARY; AND FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT
OF BUDGET AND MANAGEMENT, Respondents.
x-----------------------x
G.R. No. 209135
AUGUSTO L. SYJUCO JR., Ph.D., Petitioner,
vs.
FLORENCIO B. ABAD, IN HIS CAPACITY AS THE SECRETARY OF DEPARTMENT OF BUDGET AND
MANAGEMENT; AND HON. FRANKLIN MAGTUNAO DRILON, IN HIS CAPACITY AS THE SENATE
PRESIDENT OF THE PHILIPPINES, Respondents.
x-----------------------x
G.R. No. 209136
MANUELITO R. LUNA, Petitioner,
vs.
SECRETARY FLORENCIO ABAD, IN HIS OFFICIAL CAPACITY AS HEAD OF THE DEPARTMENT OF BUDGET
AND MANAGEMENT; AND EXECUTIVE SECRETARY PAQUITO OCHOA, IN HIS OFFICIAL CAPACITY AS
ALTER EGO OF THE PRESIDENT, Respondents.
x-----------------------x
G.R. No. 209155
ATTY. JOSE MALVAR VILLEGAS, JR. Petitioner
vs.
THE HONORABLE EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR.; AND THE SECRETARY OF BUDGET
AND MANAGEMENT FLORENCIO B. ABAD, Respondents.
x-----------------------x
G.R. No. 209164
PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), REPRESENTED BY DEAN FROILAN M.
BACUNGAN, BENJAMIN E. DIOKNO AND LEONOR M. BRIONES, Petitioners,
vs.
DEPARTMENT OF BUDGET AND MANAGEMENT AND/OR HON. FLORENCIO B. ABAD, Respondents.
x-----------------------x
G.R. No. 209260
INTEGRATED BAR OF THE PHILIPPINES (IBP), Petitioner,
vs.
SECRETARY FLORENCIO B. ABAD OF THE DEPARTMENT OF BUDGET AND MANAGEMENT
(DBM),Respondent.
x-----------------------x
G.R. No. 209442
GRECO ANTONIOUS BEDA B. BELGICA; BISHOP REUBEN M. ABANTE AND REV. JOSE L.
GONZALEZ,Petitioners,
vs.
PRESIDENT BENIGNO SIMEON C. AQUINO III, THE SENATE OF THE PHILIPPINES, REPRESENTED BY
SENATE PRESIDENT FRANKLIN M. DRILON; THE HOUSE OF REPRESENTATIVES, REPRESENTED BY
SPEAKER FELICIANO BELMONTE, JR.; THE EXECUTIVE OFFICE, REPRESENTED BY EXECUTIVE
SECRETARY PAQUITO N. OCHOA, JR.; THE DEPARTMENT OF BUDGET AND MANAGEMENT,
REPRESENTED BY SECRETARY FLORENCIO ABAD; THE DEPARTMENT OF FINANCE, REPRESENTED BY
1
SECRETARY CESAR V. PURISIMA; AND THE BUREAU OF TREASURY, REPRESENTED BY ROSALIA V. DE
LEON, Respondents.
x-----------------------x
G.R. No. 209517
CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT EMPLOYEES
(COURAGE), REPRESENTED BY ITS 1ST VICE PRESIDENT, SANTIAGO DASMARINAS, JR.; ROSALINDA
NARTATES, FOR HERSELF AND AS NATIONAL PRESIDENT OF THE CONSOLIDATED UNION OF
EMPLOYEES NATIONAL HOUSING AUTHORITY (CUE-NHA); MANUEL BACLAGON, FOR HIMSELF AND AS
PRESIDENT OF THE SOCIAL WELFARE EMPLOYEES ASSOCIATION OF THE PHILIPPINES, DEPARTMENT
OF SOCIAL WELFARE AND DEVELOPMENT CENTRAL OFFICE (SWEAP-DSWD CO); ANTONIA PASCUAL,
FOR HERSELF AND AS NATIONAL PRESIDENT OF THE DEPARTMENT OF AGRARIAN REFORM
EMPLOYEES ASSOCIATION (DAREA); ALBERT MAGALANG, FOR HIMSELF AND AS PRESIDENT OF THE
ENVIRONMENT AND MANAGEMENT BUREAU EMPLOYEES UNION (EMBEU); AND MARCIAL ARABA, FOR
HIMSELF AND AS PRESIDENT OF THE KAPISANAN PARA SA KAGALINGAN NG MGA KAW ANI NG MMDA
(KKK-MMDA), Petitioners,
vs.
BENIGNO SIMEON C. AQUINO III, PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES; PAQUITO OCHOA,
JR., EXECUTIVE SECRETARY; AND HON. FLORENCIO B. ABAD, SECRETARY OF THE DEPARTMENT OF
BUDGET AND MANAGEMENT, Respondents.
x-----------------------x
G.R. No. 209569
VOLUNTEERS AGAINST CRIME AND CORRUPTION (V ACC), REPRESENTED BY DANTE L.
JIMENEZ,Petitioner,
vs.
PAQUITO N. OCHOA, EXECUTIVE SECRETARY, AND FLORENCIO B. ABAD, SECRETARY OF THE
DEPARTMENT OF BUDGET AND MANAGEMENT, Respondents.
RESOLUTION
BERSAMIN, J.:
The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not be
allowed to sap its strength nor greed for power debase its rectitude.1
Before the Court are the Motion for Reconsideration2 filed by the respondents, and the Motion for Partial
Reconsideration3 filed by the petitioners in G.R. No. 209442.
In their Motion for Reconsideration, the respondents assail the decision4 promulgated on July 1 2014 upon the
following procedural and substantive errors, viz:
PROCEDURAL
I
WITHOUT AN ACTUAL CASE OR CONTROVERSY, ALLEGATIONS OF GRAVE ABUSE OF DISCRETION ON
THE PART OF ANY INSTRUMENTALITY OF THE GOVERNMENT CANNOT CONFER ON THIS HONORABLE
COURT THE POWER TO DETERMINE THE CONSTITUTIONALITY OF THE DAP AND NBC NO. 541
II
PETITIONERS’ ACTIONS DO NOT PRESENT AN ACTUAL CASE OR CONTROVERSY AND THEREFORE THIS
HONORABLE COURT DID NOT ACQUIRE JURISDICTION
III
PETITIONERS HAVE NEITHER BEEN INJURED NOR THREATENED WITH INJURY AS A RESULT OF THE
OPERATION OF THE DAP AND THEREFORE SHOULD HAVE BEEN HELD TO HAVE NO STANDING TO BRING
THESE SUITS FOR CERTIORARI AND PROHIBITION
IV
NOR CAN PETITIONERS’ STANDING BE SUSTAINED ON THE GROUND THAT THEY ARE BRINGING THESE
SUITS AS CITIZENS AND AS TAXPAYERS
V
THE DECISION OF THIS HONORABLE COURT IS NOT BASED ON A CONSIDERATION OF THE ACTUAL
APPLICATIONS OF THE DAP IN 116 CASES BUT SOLELY ON AN ABSTRACT CONSIDERATION OF NBC NO.
5415
SUBSTANTIVE
I
THE EXECUTIVE DEPARTMENT PROPERLY INTERPRETED "SAVINGS" UNDER THE RELEVANT
PROVISIONS OF THE GAA
2
II
ALL DAP APPLICATIONS HAVE APPROPRIATION COVER
III
THE PRESIDENT HAS AUTHORITY TO TRANSFER SAVINGS TO OTHER DEPARTMENTS PURSUANT TO HIS
CONSTITUTIONAL POWERS
IV
THE 2011, 2012 AND 2013 GAAS ONLY REQUIRE THAT REVENUE COLLECTIONS FROM EACH SOURCE OF
REVENUE ENUMERATED IN THE BUDGET PROPOSAL MUST EXCEED THE CORRESPONDING REVENUE
TARGET
V
THE OPERATIVE FACT DOCTRINE WAS WRONGLY APPLIED6
The respondents maintain that the issues in these consolidated cases were mischaracterized and unnecessarily
constitutionalized; that the Court’s interpretation of savings can be overturned by legislation considering that savings
is defined in the General Appropriations Act (GAA), hence making savings a statutory issue;7 that the withdrawn
unobligated allotments and unreleased appropriations constitute savings and may be used for augmentation;8 and
that the Court should apply legally recognized norms and principles, most especially the presumption of good faith,
in resolving their motion.9
On their part, the petitioners in G.R. No. 209442 pray for the partial reconsideration of the decision on the ground
that the Court thereby:
FAILED TO DECLARE AS UNCONSTITUTIONAL AND ILLEGAL ALL MONEYS UNDER THE DISBURSEMENT
ACCELERATION PROGRAM (DAP) USED FOR ALLEGED AUGMENTATION OF APPROPRIATION ITEMS THAT
DID NOT HAVE ACTUAL DEFICIENCIES10
They submit that augmentation of items beyond the maximum amounts recommended by the President for the
programs, activities and projects (PAPs) contained in the budget submitted to Congress should be declared
unconstitutional.
Ruling of the Court
We deny the motion for reconsideration of the petitioners in G.R. No. 209442, and partially grant the motion for
reconsideration of the respondents.
The procedural challenges raised by the respondents, being a mere rehash of their earlier arguments herein, are
dismissed for being already passed upon in the assailed decision.
As to the substantive challenges, the Court discerns that the grounds are also reiterations of the arguments that
were already thoroughly discussed and passed upon in the assailed decision. However, certain declarations in our
July 1, 2014 Decision are modified in order to clarify certain matters and dispel further uncertainty.
1.
The Court’s power of judicial review
The respondents argue that the Executive has not violated the GAA because savings as a conceptis an ordinary
species of interpretation that calls for legislative, instead of judicial, determination.11
This argument cannot stand.
The consolidated petitions distinctly raised the question of the constitutionality of the acts and practices under the
DAP, particularly their non-conformity with Section 25(5), Article VI of the Constitution and the principles of
separation of power and equal protection. Hence, the matter is still entirely within the Court’s competence, and its
determination does not pertain to Congress to the exclusion of the Court. Indeed, the interpretation of the GAA and
its definition of savings is a foremost judicial function. This is because the power of judicial review vested in the
Court is exclusive. As clarified in Endencia and Jugo v. David:12
Under our system of constitutional government, the Legislative department is assigned the power to make and enact
laws. The Executive department is charged with the execution of carrying out of the provisions of said laws. But the
interpretation and application of said laws belong exclusively to the Judicial department. And this authority to
interpret and apply the laws extends to the Constitution. Before the courts can determine whether a law is
constitutional or not, it will have to interpret and ascertain the meaning not only of said law, but also of the pertinent
portion of the Constitution in order to decide whether there is a conflict between the two, because if there is, then the
law will have to give way and has to be declared invalid and unconstitutional.
xxxx
We have already said that the Legislature under our form of government is assigned the task and the power to make
and enact laws, but not to interpret them. This is more true with regard to the interpretation of the basic law, the
Constitution, which is not within the sphere of the Legislative department. If the Legislature may declare what a law
means, or what a specific portion of the Constitution means, especially after the courts have in actual case ascertain
its meaning by interpretation and applied it in a decision, this would surely cause confusion and instability in judicial
3
processes and court decisions. Under such a system, a final court determination of a case based on a judicial
interpretation of the law of the Constitution may be undermined or even annulled by a subsequent and different
interpretation of the law or of the Constitution by the Legislative department. That would be neither wise nor
desirable, besides being clearly violative of the fundamental, principles of our constitutional system of government,
particularly those governing the separation of powers.13
The respondents cannot also ignore the glaring fact that the petitions primarily and significantly alleged grave abuse
of discretion on the part of the Executive in the implementation of the DAP. The resolution of the petitions thus
demanded the exercise by the Court of its aforedescribed power of judicial review as mandated by the Constitution.
2.
Strict construction on the accumulation and utilization of savings
The decision of the Court has underscored that the exercise of the power to augment shall be strictly construed by
virtue of its being an exception to the general rule that the funding of PAPs shall be limited to the amount fixed by
Congress for the purpose.14 Necessarily, savings, their utilization and their management will also be strictly
construed against expanding the scope of the power to augment.15 Such a strict interpretation is essential in order to
keep the Executive and other budget implementors within the limits of their prerogatives during budget execution,
and to prevent them from unduly transgressing Congress’ power of the purse.16 Hence, regardless of the perceived
beneficial purposes of the DAP, and regardless of whether the DAP is viewed as an effective tool of stimulating the
national economy, the acts and practices under the DAP and the relevant provisions of NBC No. 541 cited in the
Decision should remain illegal and unconstitutional as long as the funds used to finance the projects mentioned
therein are sourced from savings that deviated from the relevant provisions of the GAA, as well as the limitation on
the power to augment under Section 25(5), Article VI of the Constitution. In a society governed by laws, even the
best intentions must come within the parameters defined and set by the Constitution and the law. Laudable
purposes must be carried out through legal methods.17
Respondents contend, however, that withdrawn unobligated allotments and unreleased appropriations under the
DAP are savings that may be used for augmentation, and that the withdrawal of unobligated allotments were made
pursuant to Section 38 Chapter 5, Book VI of the Administrative Code;18 that Section 38 and Section 39, Chapter 5,
Book VI of the Administrative Code are consistent with Section 25(5), Article VI of the Constitution, which, taken
together, constitute "a framework for which economic managers of the nation may pull various levers in the form of
authorization from Congress to efficiently steer the economy towards the specific and general purposes of the
GAA;"19 and that the President’s augmentation of deficient items is in accordance with the standing authority issued
by Congress through Section 39.
Section 25(5), Article VI of the Constitution states:
Section 25. x x x x x x x
5) No law shall be passed authorizing any transfer of appropriations; however, the President, the President of the
Senate, the Speaker of the House of Representatives, the Chief Justice of the Supreme Court, and the heads of
Constitutional Commissions may, by law, be authorized to augment any item in the general appropriations law for
their respective offices from savings in other items of their respective appropriations.
xxxx
Section 38 and Section 39, Chapter 5, Book VI of the Administrative Code provide:
Section 38. Suspension of Expenditure of Appropriations. - Except as otherwise provided in the General
Appropriations Act and whenever in his judgment the public interest so requires, the President, upon notice to the
head of office concerned, is authorized to suspend or otherwise stop further expenditure of funds allotted for any
agency, or any other expenditure authorized in the General Appropriations Act, except for personal services
appropriations used for permanent officials and employees.
Section 39. Authority to Use Savings in Appropriations to Cover Deficits.—Except as otherwise provided in the
General Appropriations Act, any savings in the regular appropriations authorized in the General Appropriations Act
for programs and projects of any department, office or agency, may, with the approval of the President, be used to
cover a deficit in any other item of the regular appropriations: Provided, that the creation of new positions or
increase of salaries shall not be allowed to be funded from budgetary savings except when specifically authorized
by law: Provided, further, that whenever authorized positions are transferred from one program or project to another
within the same department, office or agency, the corresponding amounts appropriated for personal services are
also deemed transferred, without, however increasing the total outlay for personal services of the department, office
or agency concerned. (Bold underscoring supplied for emphasis)
In the Decision, we said that:
Unobligated allotments, on the other hand, were encompassed by the first part of the definition of "savings" in the
GAA, that is, as "portions or balances of any programmed appropriation in this Act free from any obligation or
encumbrance." But the first part of the definition was further qualified by the three enumerated instances of when
4
savings would be realized. As such, unobligated allotments could not be indiscriminately declared as savings
without first determining whether any of the three instances existed. This signified that the DBM’s withdrawal of
unobligated allotments had disregarded the definition of savings under the GAAs.
xxxx
The respondents rely on Section 38, Chapter 5, Book VI of the Administrative Code of 1987 to justify the withdrawal
of unobligated allotments. But the provision authorized only the suspension or stoppage of further expenditures, not
the withdrawal of unobligated allotments, to wit:
xxxx
Moreover, the DBM did not suspend or stop further expenditures in accordance with Section 38, supra, but instead
transferred the funds to other PAPs.20
We now clarify.
Section 38 refers to the authority of the President "to suspend or otherwise stop further expenditure of funds allotted
for any agency, or any other expenditure authorized in the General Appropriations Act." When the President
suspends or stops expenditure of funds, savings are not automatically generated until it has been established that
such funds or appropriations are free from any obligation or encumbrance, and that the work, activity or purpose for
which the appropriation is authorized has been completed, discontinued or abandoned.
It is necessary to reiterate that under Section 5.7 of NBC No. 541, the withdrawn unobligated allotments may be:
5.7.1 Reissued for the original programs and projects of the agencies/OUs concerned, from which the allotments
were withdrawn;
5.7.2 Realigned to cover additional funding for other existing programs and projects of the agency/OU; or
5.7.3 Used to augment existing programs and projects of any agency and to fund priority programs and projects not
considered in the 2012 budget but expected to be started or implemented during the current year.
Although the withdrawal of unobligated allotments may have effectively resulted in the suspension or stoppage of
expenditures through the issuance of negative Special Allotment Release Orders (SARO), the reissuance of
withdrawn allotments to the original programs and projects is a clear indication that the program or project from
which the allotments were withdrawn has not been discontinued or abandoned. Consequently, as we have pointed
out in the Decision, "the purpose for which the withdrawn funds had been appropriated was not yet fulfilled, or did
not yet cease to exist, rendering the declaration of the funds as savings impossible."21 In this regard, the withdrawal
and transfer of unobligated allotments remain unconstitutional. But then, whether the withdrawn allotments have
actually been reissued to their original programs or projects is a factual matter determinable by the proper tribunal.
Also, withdrawals of unobligated allotments pursuant to NBC No. 541 which shortened the availability of
appropriations for MOOE and capital outlays, and those which were transferred to PAPs that were not determined to
be deficient, are still constitutionally infirm and invalid.
At this point, it is likewise important to underscore that the reversion to the General Fund of unexpended balances of
appropriations – savings included – pursuant to Section 28 Chapter IV, Book VI of the Administrative Code22 does
not apply to the Constitutional Fiscal Autonomy Group (CFAG), which include the Judiciary, Civil Service
Commission, Commission on Audit, Commission on Elections, Commission on Human Rights, and the Office of the
Ombudsman. The reason for this is that the fiscal autonomy enjoyed by the CFAG –
x x x contemplates a guarantee of full flexibility to allocate and utilize their resources with the wisdom and dispatch
that their needs require. It recognizes the power and authority to levy, assess and collect fees, fix rates of
compensation not exceeding the highest rates authorized by law for compensation and pay plans of the government
and allocate and disburse such sums as may be provided by law or prescribed by them in the course of the
discharge of their functions.
Fiscal autonomy means freedom from outside control. If the Supreme Court says it needs 100 typewriters but DBM
rules we need only 10 typewriters and sends its recommendations to Congress without even informing us, the
autonomy given by the Constitution becomes an empty and illusory platitude.
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility
needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner
the independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to
fiscal autonomy and violative not only of the express mandate of the Constitution but especially as regards the
Supreme Court, of the independence and separation of powers upon which the entire fabric of our constitutional
system is based. x x x23
On the other hand, Section 39 is evidently in conflict with the plain text of Section 25(5), Article VI of the Constitution
because it allows the President to approve the use of any savings in the regular appropriations authorized in the
GAA for programs and projects of any department, office or agency to cover a deficit in any other item of the regular
appropriations. As such, Section 39 violates the mandate of Section 25(5) because the latter expressly limits the
authority of the President to augment an item in the GAA to only those in his own Department out of the savings in
5
other items of his own Department’s appropriations. Accordingly, Section 39 cannot serve as a valid authority to
justify cross-border transfers under the DAP. Augmentations under the DAP which are made by the Executive within
its department shall, however, remain valid so long as the requisites under Section 25(5) are complied with.
In this connection, the respondents must always be reminded that the Constitution is the basic law to which all laws
must conform. No act that conflicts with the Constitution can be valid.24 In Mutuc v. Commission on
Elections,25therefore, we have emphasized the importance of recognizing and bowing to the supremacy of the
Constitution:
x x x The concept of the Constitution as the fundamental law, setting forth the criterion for the validity of any public
act whether proceeding from the highest official or the lowest functionary, is a postulate of our system of
government. That is to manifest fealty to the rule of law, with priority accorded to that which occupies the topmost
rung in the legal hierarchy. The three departments of government in the discharge of the functions with which it is
[sic] entrusted have no choice but to yield obedience to its commands. Whatever limits it imposes must be
observed. Congress in the enactment of statutes must ever be on guard lest the restrictions on its authority, whether
substantive or formal, be transcended. The Presidency in the execution of the laws cannot ignore or disregard what
it ordains. In its task of applying the law to the facts as found in deciding cases, the judiciary is called upon to
maintain inviolate what is decreed by the fundamental law. Even its power of judicial review to pass upon the validity
of the acts of the coordinate branches in the course of adjudication is a logical corollary of this basic principle that
the Constitution is paramount. It overrides any governmental measure that fails to live up to its mandates. Thereby
there is a recognition of its being the supreme law.
Also, in Biraogo v. Philippine Truth Commission of 2010,26 we have reminded that: – The role of the Constitution
cannot be overlooked. It is through the Constitution that the fundamental powers of government are established,
limited and defined, and by which these powers are distributed among the several departments. The Constitution is
the basic and paramount law to which all other laws must conform and to which all persons, including the highest
officials of the land, must defer. Constitutional doctrines must remain steadfast no matter what may be the tides of
time. It cannot be simply made to sway and accommodate the call of situations and much more tailor itself to the
whims and caprices of government and the people who run it.27
3.
The power to augment cannot be used to fund non-existent provisions in the GAA
The respondents posit that the Court has erroneously invalidated all the DAP-funded projects by overlooking the
difference between an item and an allotment class, and by concluding that they do not have appropriation cover;
and that such error may induce Congress and the Executive (through the DBM) to ensure that all items should have
at least ₱1 funding in order to allow augmentation by the President.28
At the outset, we allay the respondents’ apprehension regarding the validity of the DAP funded projects. It is to be
emphatically indicated that the Decision did not declare the en masse invalidation of the 116 DAP-funded projects.
To be sure, the Court recognized the encouraging effects of the DAP on the country’s economy,29 and
acknowledged its laudable purposes, most especially those directed towards infrastructure development and
efficient delivery of basic social services.30 It bears repeating that the DAP is a policy instrument that the Executive,
by its own prerogative, may utilize to spur economic growth and development.
Nonetheless, the Decision did find doubtful those projects that appeared to have no appropriation cover under the
relevant GAAs on the basis that: (1) the DAP funded projects that originally did not contain any appropriation for
some of the expense categories (personnel, MOOE and capital outlay); and (2) the appropriation code and the
particulars appearing in the SARO did not correspond with the program specified in the GAA. The respondents
assert, however, that there is no constitutional requirement for Congress to create allotment classes within an item.
What is required is for Congress to create items to comply with the line-item veto of the President.31
After a careful reexamination of existing laws and jurisprudence, we find merit in the respondents’ argument.
Indeed, Section 25(5) of the 1987 Constitution mentions of the term item that may be the object of augmentation by
the President, the Senate President, the Speaker of the House, the Chief Justice, and the heads of the
Constitutional Commissions. In Belgica v. Ochoa,32 we said that an item that is the distinct and several part of the
appropriation bill, in line with the item-veto power of the President, must contain "specific appropriations of money"
and not be only general provisions, thus:
For the President to exercise his item-veto power, it necessarily follows that there exists a proper "item" which may
be the object of the veto. An item, as defined in the field of appropriations, pertains to "the particulars, the details,
the distinct and severable parts of the appropriation or of the bill." In the case of Bengzon v. Secretary of Justice of
the Philippine Islands, the US Supreme Court characterized an item of appropriation as follows:
An item of an appropriation bill obviously means an item which, in itself, is a specific appropriation of money, not
some general provision of law which happens to be put into an appropriation bill. (Emphases supplied)

6
On this premise, it may be concluded that an appropriation bill, to ensure that the President may be able to exercise
his power of item veto, must contain "specific appropriations of money" and notonly "general provisions" which
provide for parameters of appropriation.
Further, it is significant to point out that an item of appropriation must be an item characterized by singular
correspondence – meaning an allocation of a specified singular amount for a specified singular purpose, otherwise
known as a "line-item." This treatment not only allows the item to be consistent with its definition as a "specific
appropriation of money" but also ensures that the President may discernibly veto the same. Based on the foregoing
formulation, the existing Calamity Fund, Contingent Fund and the Intelligence Fund, being appropriations which
state a specified amount for a specific purpose, would then be considered as "line-item" appropriations which are
rightfully subject to item veto. Likewise, it must be observed that an appropriation may be validly apportioned into
component percentages or values; however, it is crucial that each percentage or value must be allocated for its own
corresponding purpose for such component to be considered as a proper line-item. Moreover, as Justice Carpio
correctly pointed out, a valid appropriation may even have several related purposes that are by accounting and
budgeting practice considered as one purpose, e.g., MOOE (maintenance and other operating expenses), in which
case the related purposes shall be deemed sufficiently specific for the exercise of the President‘s item veto power.
Finally, special purpose funds and discretionary funds would equally square with the constitutional mechanism of
item-veto for as long as they follow the rule on singular correspondence as herein discussed. x x x (Emphasis
supplied)33
Accordingly, the item referred to by Section 25(5) of the Constitution is the last and indivisible purpose of a program
in the appropriation law, which is distinct from the expense category or allotment class. There is no specificity,
indeed, either in the Constitution or in the relevant GAAs that the object of augmentation should be the expense
category or allotment class. In the same vein, the President cannot exercise his veto power over an expense
category; he may only veto the item to which that expense category belongs to.
Further, in Nazareth v. Villar,34 we clarified that there must be an existing item, project or activity, purpose or object
of expenditure with an appropriation to which savings may be transferred for the purpose of augmentation.
Accordingly, so long as there is an item in the GAA for which Congress had set aside a specified amount of public
fund, savings may be transferred thereto for augmentation purposes. This interpretation is consistent not only with
the Constitution and the GAAs, but also with the degree of flexibility allowed to the Executive during budget
execution in responding to unforeseeable contingencies.
Nonetheless, this modified interpretation does not take away the cave at that only DAP projects found in the
appropriate GAAs may be the subject of augmentation by legally accumulated savings. Whether or not the 116
DAP-funded projects had appropriation cover and were validly augmented require factual determination that is not
within the scope of the present consolidated petitions under Rule 65.
4.
Cross-border transfers are constitutionally impermissible
The respondents assail the pronouncement of unconstitutionality of cross-border transfers made by the President.
They submit that Section 25(5), Article VI of the Constitution prohibits only the transfer of appropriation, not savings.
They relate that cross-border transfers have been the practice in the past, being consistent with the President’s role
as the Chief Executive.35
In view of the clarity of the text of Section 25(5), however, the Court stands by its pronouncement, and will not brook
any strained interpretations.
5.
Unprogrammed funds may only be released upon proof that the total revenues exceeded the target
Based on the 2011, 2012 and 2013 GAAs, the respondents contend that each source of revenue in the budget
proposal must exceed the respective target to authorize release of unprogrammed funds. Accordingly, the Court’s
ruling thereon nullified the intention of the authors of the unprogrammed fund, and renders useless the special
provisions in the relevant GAAs.36
The respondents’ contentions are without merit.
To recall, the respondents justified the use of unprogrammed funds by submitting certifications from the Bureau of
Treasury and the Department of Finance (DOF) regarding the dividends derived from the shares of stock held by the
Government in government-owned and controlled corporations.37 In the decision, the Court has held that the
requirement under the relevant GAAs should be construed in light of the purpose for which the unprogrammed funds
were denominated as "standby appropriations." Hence, revenue targets should be considered as a whole, not
individually; otherwise, we would be dealing with artificial revenue surpluses. We have even cautioned that the
release of unprogrammed funds based on the respondents’ position could be unsound fiscal management for
disregarding the budget plan and fostering budget deficits, contrary to the Government’s surplus budget policy.38

7
While we maintain the position that aggregate revenue collection must first exceed aggregate revenue target as a
pre-requisite to the use of unprogrammed funds, we clarify the respondents’ notion that the release of
unprogrammed funds may only occur at the end of the fiscal year.
There must be consistent monitoring as a component of the budget accountability phase of every agency’s
performance in terms of the agency’s budget utilization as provided in Book VI, Chapter 6, Section 51 and Section
52 of the Administrative Code of 1987,which state:
SECTION 51. Evaluation of Agency Performance.—The President, through the Secretary shall evaluate on a
continuing basis the quantitative and qualitative measures of agency performance as reflected in the units of work
measurement and other indicators of agency performance, including the standard and actual costs per unit of work.
SECTION 52. Budget Monitoring and Information System.—The Secretary of Budget shall determine accounting
and other items of information, financial or otherwise, needed to monitor budget performance and to assess
effectiveness of agencies’ operations and shall prescribe the forms, schedule of submission, and other components
of reporting systems, including the maintenance of subsidiary and other records which will enable agencies to
accomplish and submit said information requirements: Provided, that the Commission on Audit shall, in coordination
with the Secretary of Budget, issue rules and regulations that may be applicable when the reporting requirements
affect accounting functions of agencies: Provided, further, that the applicable rules and regulations shall be issued
by the Commission on Audit within a period of thirty (30) days after the Department of Budget and Management
prescribes the reporting requirements.
Pursuant to the foregoing, the Department of Budget and Management (DBM) and the Commission on Audit (COA)
require agencies under various joint circulars to submit budget and financial accountability reports (BFAR) on a
regular basis,39 one of which is the Quarterly Report of Income or Quarterly Report of Revenue and Other
Receipts.40 On the other hand, as Justice Carpio points out in his Separate Opinion, the Development Budget
Coordination Committee (DBCC) sets quarterly revenue targets for aspecific fiscal year.41 Since information on both
actual revenue collections and targets are made available every quarter, or at such time as the DBM may prescribe,
actual revenue surplus may be determined accordingly and eleases from the unprogrammed fund may take place
even prior to the end of the fiscal year.42
In fact, the eleventh special provision for unprogrammed funds in the 2011 GAA requires the DBM to submit
quarterly reports stating the details of the use and releases from the unprogrammed funds, viz:
11. Reportorial Requirement. The DBM shall submit to the House Committee on Appropriations and the Senate
Committee on Finance separate quarterly reports stating the releases from the Unprogrammed Fund, the amounts
released and purposes thereof, and the recipient departments, bureaus, agencies or offices, GOCCs and GFIs,
including the authority under which the funds are released under Special Provision No. 1 of the Unprogrammed
Fund.
Similar provisions are contained in the 2012 and 2013 GAAs.43
However, the Court’s construction of the provision on unprogrammed funds is a statutory, not a constitutional,
interpretation of an ambiguous phrase. Thus, the construction should be given prospective effect.44
6.
The presumption of good faith stands despite the obiter pronouncement
The remaining concern involves the application of the operative fact doctrine.
The respondents decry the misapplication of the operative fact doctrine, stating:
110. The doctrine of operative fact has nothing to do with the potential liability of persons who acted pursuant to a
then-constitutional statute, order, or practice. They are presumed to have acted in good faith and the court cannot
load the dice, so to speak, by disabling possible defenses in potential suits against so-called "authors, proponents
and implementors." The mere nullification are still deemed valid on the theory that judicial nullification is a contingent
or unforeseen event.
111. The cases before us are about the statutory and constitutional interpretations of so-called acts and practices
under a government program, DAP. These are not civil, administrative, or criminal actions against the public officials
responsible for DAP, and any statement about bad faith may be unfairly and maliciously exploited for political ends.
At the same time, any negation of the presumption of good faith, which is the unfortunate implication of paragraphs
3 and 4 of page 90 of the Decision, violates the constitutional presumption of innocence, and is inconsistent with the
Honorable Court’s recognition that "the implementation of the DAP yielded undeniably positive results that
enhanced the economic welfare of the country."
112. The policy behind the operative fact doctrine is consistent with the idea that regardless of the nullification of
certain acts and practices under the DAP and/or NBC No. 541, it does not operate to impute bad faith to authors,
proponents and implementors who continue to enjoy the presumption of innocence and regularity in the
performance of official functions and duties. Good faith is presumed, whereas bad faith requires the existence of

8
facts. To hold otherwise would send a chilling effect to all public officers whether of minimal or significant discretion,
the result of which would be a dangerous paralysis of bureaucratic activity.45 (Emphasis supplied)
In the speech he delivered on July 14, 2014, President Aquino III also expressed the view that in applying the
doctrine of operative fact, the Court has already presumed the absence of good faith on the part of the authors,
proponents and implementors of the DAP, so that they would have to prove good faith during trial.46
Hence, in their Motion for Reconsideration, the respondents now urge that the Court should extend the presumption
of good faith in favor of the President and his officials who co-authored, proposed or implemented the DAP.47
The paragraphs 3 and 4 of page 90 of the Decision alluded to by the respondents read:
Nonetheless, as Justice Brion has pointed out during the deliberations, the doctrine of operative fact does not
always apply, and is not always the consequence of every declaration of constitutional invalidity. It can be invoked
only in situations where the nullification of the effects of what used to be a valid law would result in inequity and
injustice; but where no such result would ensue, the general rule that an unconstitutional law is totally ineffective
should apply.
In that context, as Justice Brion has clarified, the doctrine of operative fact can apply only to the PAPs that can no
longer be undone, and whose beneficiaries relied in good faith on the validity of the DAP, but cannot apply to the
authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by
the proper tribunals determining their criminal, civil, administrative and other liabilities.48 (Bold underscoring is
supplied)
The quoted text of paragraphs 3 and 4 shows that the Court has neither thrown out the presumption of good faith
nor imputed bad faith to the authors, proponents and implementors of the DAP. The contrary is true, because the
Court has still presumed their good faith by pointing out that "the doctrine of operative fact xxx cannot apply to the
authors, proponents and implementors of the DAP, unless there are concrete findings of good faith in their favor by
the proper tribunals determining their criminal, civil, administrative and other liabilities." Note that the proper
tribunals can make "concrete findings of good faith in their favor" only after a full hearing of all the parties in any
given case, and such a hearing can begin to proceed only after according all the presumptions, particularly that of
good faith, by initially requiring the complainants, plaintiffs or accusers to first establish their complaints or charges
before the respondent authors, proponents and implementors of the DAP.
It is equally important to stress that the ascertainment of good faith, or the lack of it, and the determination of
whether or not due diligence and prudence were exercised, are questions of fact.49 The want of good faith is thus
better determined by tribunals other than this Court, which is not a trier of facts.50
For sure, the Court cannot jettison the presumption of good faith in this or in any other case. The presumption is a
1âw phi 1

matter of law. It has had a long history. Indeed, good faith has long been established as a legal principle even in the
heydays of the Roman Empire.51In Soriano v. Marcelo,52 citing Collantes v. Marcelo,53 the Court emphasizes the
necessity of the presumption of good faith, thus:
Well-settled is the rule that good faith is always presumed and the Chapter on Human Relations of the Civil Code
directs every person, inter alia, to observe good faith which springs from the fountain of good conscience.
Specifically, a public officer is presumed to have acted in good faith in the performance of his duties. Mistakes
committed by a public officer are not actionable absent any clear showing that they were motivated by malice or
gross negligence amounting to bad faith. "Bad faith" does not simply connote bad moral judgment or negligence.
There must be some dishonest purpose or some moral obliquity and conscious doing of a wrong, a breach of a
sworn duty through some motive or intent or ill will. It partakes of the nature of fraud. It contemplates a state of mind
affirmatively operating with furtive design or some motive of self-interest or ill will for ulterior purposes.
The law also requires that the public officer’s action caused undue injury to any party, including the government, or
gave any private party unwarranted benefits, advantage or preference in the discharge of his functions. x x x
The Court has further explained in Philippine Agila Satellite, Inc. v. Trinidad-Lichauco: 54
We do not doubt the existence of the presumptions of "good faith" or "regular performance of official duty", yet these
presumptions are disputable and may be contradicted and overcome by other evidence. Many civil actions are
oriented towards overcoming any number of these presumptions, and a cause of action can certainly be geared
towards such effect. The very purpose of trial is to allow a party to present evidence to overcome the disputable
presumptions involved. Otherwise, if trial is deemed irrelevant or unnecessary, owing to the perceived indisputability
of the presumptions, the judicial exercise would be relegated to a mere ascertainment of what presumptions apply in
a given case, nothing more. Consequently, the entire Rules of Court is rendered as excess verbiage, save perhaps
for the provisions laying down the legal presumptions.
Relevantly, the authors, proponents and implementors of the DAP, being public officers, further enjoy the
presumption of regularity in the performance of their functions. This presumption is necessary because they are
clothed with some part of the sovereignty of the State, and because they act in the interest of the public as required
by law.55 However, the presumption may be disputed.56
9
At any rate, the Court has agreed during its deliberations to extend to the proponents and implementors of the DAP
the benefit of the doctrine of operative fact. This is because they had nothing to do at all with the adoption of the
invalid acts and practices.
7.
The PAPs under the DAP remain effective under the operative fact doctrine
As a general rule, the nullification of an unconstitutional law or act carries with it the illegality of its effects. However,
in cases where nullification of the effects will result in inequity and injustice, the operative fact doctrine may apply.57In
so ruling, the Court has essentially recognized the impact on the beneficiaries and the country as a whole if its ruling
would pave the way for the nullification of the ₱144.378 Billions58 worth of infrastructure projects, social and
economic services funded through the DAP. Bearing in mind the disastrous impact of nullifying these projects by
virtue alone of the invalidation of certain acts and practices under the DAP, the Court has upheld the efficacy of
such DAP-funded projects by applying the operative fact doctrine. For this reason, we cannot sustain the Motion for
Partial Reconsideration of the petitioners in G.R. No. 209442.
IN VIEW OF THE FOREGOING, and SUBJECT TO THE FOREGOING CLARIFICATIONS, the Court PARTIALLY
GRANTS the Motion for Reconsideration filed by the respondents, and DENIES the Motion for Partial
Reconsideration filed by the petitioners in G.R. No. 209442 for lack of merit.
ACCORDINGLY, the dispositive portion of the Decision promulgated on July 1, 2014 is hereby MODIFIED as
follows:
WHEREFORE, the Court PARTIALLY GRANTS the petitions for certiorari and prohibition; and DECLARES the
following acts and practices under the Disbursement Acceleration Program, National Budget Circular No. 541 and
related executive issuances UNCONSTITUTIONAL for being in violation of Section 25(5), Article VI of the 1987
Constitution and the doctrine of separation of powers, namely:
(a) The withdrawal of unobligated allotments from the implementing agencies, and the declaration of the
withdrawn unobligated allotments and unreleased appropriations as savings prior to the end of the fiscal
year without complying with the statutory definition of savings contained in the General Appropriations Acts;
and
(b) The cross-border transfers of the savings of the Executive to augment the appropriations of other offices
outside the Executive.
The Court further DECLARES VOID the use of unprogrammed funds despite the absence of a certification by the
National Treasurer that the revenue collections exceeded the revenue targets for non-compliance with the
conditions provided in the relevant General Appropriations Acts.
SO ORDERED.

10
EN BANC

G.R. No. 211362 February 24, 2015

FIRST CLASS CADET ALDRIN JEFF P. CUDIA of the Philippine Military Academy, represented by his father
RENATO P. CUDIA, who also acts on his own behalf, and BERTENI CATALUNA CAUSING, Petitioners,
vs.
THE SUPERINTENDENT OF THE PHILIPPINE MILITARY ACADEMY (PMA), THE HONOR COMMITTEE (HC)
OF 2014 OF THE PMA and HC MEMBERS, and the CADET REVIEW AND APPEALS BOARD
(CRAB),Respondents.

x-----------------------x
FILIPINA P. CUDIA, in behalf of CADET FIRST CLASS ALDRIN JEFF P. CUDIA, and on her own
behalf,Petitioner-Intervenor.

DECISION

PERALTA, J.:

The true test of a cadet's character as a leader rests on his personal commitment to uphold what is morally and
ethically righteous at the most critical and trying times, and at the most challenging circumstances. When a cadet
must face a dilemma between what is true and right as against his security, well-being, pleasures and comfort, or
dignity, what is at stake is his honor and those that [define] his values. A man of an honorable character does not
think twice and chooses the fore. This is the essence of and. the Spirit of the Honor Code - it is championing truth
and righteousness even if it may mean the surrender of one's basic rights and privileges.1

The Procedural Antecedents

Six days prior to the March 16, 2014 graduation ceremonies of the Philippine Military Academy (PMA), petitioners
Renato P. Cudia, acting for himself and in behalf of his son, Cadet First Class Aldrin Jeff P. Cudia (Cadet JCL
Cudia), and Berteni Catalufta Causing filed this petition for certiorari, prohibition, and mandamus with application for
extremely urgent temporary restraining order (TRO).2

In a Resolution dated March 1 7, 2014, the Court denied the prayer for TRO and instead, required respondents to
file their comment on the petition.3

On March 25, 2014, Filipina P. Cudia, acting for herself and in behalf of her son Cadet 1 CL Cudia, filed a motion for
leave to intervene, attaching thereto the petition-in-intervention.4 Per Resolution dated March 31, 2014, the Court
granted the motion and resolved to await respondents' comment on the petition.5

A manifestation was then filed by petitioners on April 3, 2014, recommending the admission of the petition-in-
intervention and adopting it as an integral part of their petition.6 On May 20, 2014, petitioner-intervenor filed a
manifestation with motion for leave to admit the Final Investigation Report of the Commission on Human Rights
(CHR) dated April 25, 2014.7 The Report8 was relative to CHR-CAR Case No. 2014-0029 filed by the spouses
Renato and Filipina Cudia (Spouses Cudia), for themselves and in behalf of their son, against the PMA Honor
Committee (HC) members and Major Vladimir P. Gracilla (Maj. Gracilla)9 for violation of Cadet lCL Cudia's rights to
due process, education, and privacy of communication. Subsequently, on June 3, 2014, petitioners filed a motion for
leave to adopt the submission of the CHR Report.10 The manifestation was granted and the motion was noted by the
Court in its Resolution dated July 7, 2014.

After filing three motions for extension of time,11 respondents filed their Consolidated Comment12 on June 19, 2014.
In a motion, petitioner-intervenor filed a Reply, which was later adopted by petitioners.13 Submitted as Annex "A" of
the Reply was a copy of the CHR Resolution dated May 22, 2014 regarding CHR-CAR Case No. 2014-0029.14 We
noted and granted the same on August 11, 2014 and October 13, 2014.

11
Petitioner-intervenor twice filed a manifestation with motion to submit the case for early resolution,15 which the Court
noted in a Resolution dated August 11, 2014 and October 3, 2014.16

The Facts

Cadet 1 CL Cudia was a member of Siklab Diwa Class of 2014 of the PMA, the country's premiere military academy
located at Fort Gregorio del Pilar in Baguio City. He belonged to the "A" Company and was the Deputy Baron of his
class. As claimed by petitioners and petitioner-intervenor (hereinafter collectively called "petitioners," unless
otherwise indicated), he was supposed to graduate with honors as the class salutatorian, receive the Philippine
Navy Saber as the top Navy cadet graduate, and be commissioned as an ensign of the Philippine Navy.

On November 14, 2013, the combined classes of the Navy and Air Force 1 CL cadets had a lesson examination
(LE) on Operations Research (OR432) under Dr. Maria Monica C. Costales (Dr. Costales) at the PMAFI Room. Per
published schedule from the Headquarters Academic Group, the 4th period class in OR432 was from 1 :30-3:00
p.m. (1330H-1500H), while the 5th period class in ENG412 was from 3:05-4:05 p.m. (1505H-1605H).

Five days after, Professor Juanita Berong (Prof. Berong) of the 5th period class issued a Delinquency Report (DR)
against Cadet 1 CL Cudia because he was "[/]ate for two (2) minutes in his Eng 412 class x x x. "17 Cadets 1 CL
Narciso, Arcangel, Miranda, Pontillas, Diaz, Otila, and Dela Cruz were also reported late for five minutes.18

On December 4, 2013, the DRs reached the Department of Tactical Officers. They were logged and transmitted to
the Company Tactical Officers ( CTO) for explanation of the concerned cadets. Two days later, Cadet lCL Cudia
received his DR.

In his Explanation of Report dated December 8, 2013, Cadet lCL Cudia reasoned out that: "I came directly from
OR432 Class. We were dismissed a bit late by our instructor Sir."19

On December 19, 2013, Major Rommel Dennis Hindang (Maj. Hindang), the CTO of Cadet 1 CL Cudia, meted out
to him the penalty of 11 demerits and 13 touring hours. Immediately, Cadet lCL Cudia clarified with Maj. Hindang his
alleged violation. The latter told him that the basis of the punishment was the result of his conversation with Dr.
Costales, who responded that she never dismissed her class late, and the protocol to dismiss the class 10-15
minutes earlier than scheduled. When he expressed his intention to appeal and seek reconsideration of the
punishment, he was · advised to put the request in writing. Hence, that same day, Cadet 1 CL Cudia addressed his
Request for Reconsideration of Meted Punishment to Maj. Benjamin L. Leander, Senior Tactical Officer (STO),
asserting:

I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and our 5th period
class, which is ENG412, started 1500H also. Immediately after 4t period class, I went to my next class without any
intention of being late Sir.20

A day after, Maj. Leander instructed Maj. Hindang to give his comments on the request of Cadet 1 CL Cudia and to
indicate if there were other cadets belonging to the same section who were also late.

On December 28, 2013, Maj. Hindang submitted his reply to Maj. Leander pointing out that, based on his
investigation, the 4th period class was not dismissed late. As a result, Maj. Leander sustained the penalty imposed.
Petitioners alleged that Cadet 1 CL Cudia came to know of the denial of his request only on January 24, 2014 upon
inquiry with Maj. Leander.

Several days passed, and on January 7, 2014, Cadet lCL Cudia was informed that Maj. Hindang reported him to the
HC21 for violation of the Honor Code. The Honor Report stated:

Lying that is giving statement that perverts the truth in his written appeal, stating that his 4th period class ended at l
500H that made him late in the succeeding class.22

12
Upon asking the HC Chairman, Cadet 1 CL Mike Anthony P. Mogol (Cadet 1 CL Mogol), as to what Maj. Hindang
meant in his Report, Cadet lCL Cudia learned that it was based on Maj. Hindang's conversations with their
instructors and classmates as well as his statement in the request for reconsideration to Maj. Leander. He then
verbally applied for and was granted an extension of time to answer the charge against him because Dr. Costales,
who could shed light on the matter, was on emergency leave.

On January 13, 2014, Dr. Costales sent text messages to Cadet lCL Cudia, conveying:

Gud pm cdt cudia. Mam belandres gave me bkground na. She told me its a report dated november. When maj
hindang ask me, no time referens. (04:25:11 P.M.)

All the while I thot he was refering to dismisal during last day last december. Whc i told, i wud presume they wil
finish early bee its grp work. (04:29:21 P.M.)23

The next day, Cadets lCL Cudia and Arcangel approached Dr. Costales, who reaffirmed that she and Maj. Hindang
were not in the same time reference when the latter asked her.

Later, Cadet 1 CL Cudia submitted his letter of explanation on the Honor Report. He averred:

Sir, We had an LE that day (14 November 2013) in OR432 class. When the first bell rang (1455), I stood up,
reviewed my paper and submitted it to my instructor, Ms. Costales. After which, I and Cadet lcl Arcangel asked for
some query with regards (sic) to the deductions of our previous LE. Our instructor gladly answered our question.
She then told me that she will give the copy of our section grade, so I waited at the hallway outside the ACAD5
office, and then she came out of the room and gave me a copy of the grades. Cadet Arcangel, Cadet Narciso and I
immediately went to our 5ti period class which is ENG412.

With these statements, I would like to clarify the following:

1. How could this be lying?

2. What is wrong with the side of Maj. Hindang (why did he come up to that honor report)?

3. What are his assumptions?

I appeal, in the name of clarity, fairness and truth[,] that my case be reopened and carefully reviewed for I did not
violate the honor code/system, I can answer NO to both questions (Did I intend to deceive? Did I intend to take
undue advantage?) and for the following reasons:

1. The honor report of Maj. Hindang was already settled and finalized given the fact that no face-to-
face personal conversation with Ms. Costales was conducted to clarify what and when exactly was
the issue at hand.

2. Statements of the respondents support my explanation.

3. My explanation to my appeal to my DR (Request for reconsideration of meted punishment) further


supports my explanation in my delinquency report.

4. My understanding of the duration of the "CLASS" covers not just a lecture in a typical classroom
instruction but includes every transaction and communication a teacher does with her students,
especially that in our case some cadets asked for queries, and I am given instruction by which (sic)
were directly related to our CLASS. Her transaction and communication with our other classmates
may have already ended but ours extended for a little bit.

13
I agree and consider that because Cadet CUDIA is under my instruction to wait, and the
other cadets still have business with me, it is reasonable enough for him to say that "Our
class was dismissed a bit late" (dealing with matter of seconds or a minute particularly 45
seconds to 1 minute and 30 seconds)

And with concern to (sic) OR432 class, I can say it ended on time (1500H).

(signed)
M COSTALES

w/ attached certification

5. I was transparent and honest in explaining the 2-minute delay and did not attempt to conceal
anything that happened or I did.

6. Furthermore, CPT DULA WAN PA, the Tactical Officer of Hawk Company[,] and I had a
conversation with regards (sic) to the same matter for which he can give important points of my
case.

7. Cadet lcl DIAZ "D" Co can also stand as a witness that I waited for Ms. Costales. 24

On January 15, 2014, the HC constituted a team to conduct a preliminary investigation on the reported honor
violation of Cadet 1 CL Cudia. The Foxtrot Company was designated as the investigating team and was composed
of Cadet 1 CL Hasigan as Presiding Officer, and Cadets 1 CL Mogol, lCL Raguindin, 2CL Gumilab, 2CL Saldua,
3CL Espejo, and 3CL Poncardas as members.25 Soon after, the team submitted its Preliminary Investigation Report
recommending that the case be formalized.

The formal investigation against Cadet 1 CL Cu di a then ensued. The Presiding Officer was Cadet 1 CL Rhona K.
Salvacion, while the nine (9) voting members were Cadets lCL Jairus 0. Fantin, lCL Bryan Sonny S. Arlegui, 1 CL
Kim Adrian R. Martal, 1 CL J eanelyn P. Cabrido, 1 CL ShuAydan G. Ayada, 1 CL Dalton John G. Lagura, 2CL
Renato A. Carifio, Jr., 2CL Arwi C. Martinez, and 2CL Niko Angelo C. Tarayao.26 Acting as recorders tasked to
document the entire proceedings were 4CL Jennifer A. Cuarteron and 3CL Leoncio Nico A. de Jesus 11.27 Those
who observed the trial were Cadets 1 CL Balmeo, Dag-uman, Hasigan, Raguindin, Paulino, Arcangel, and Narciso;
Cadets 2CL Jocson and Saldua, Jr.; and Cadet 3CL Umaguing.28

The first formal hearing started late evening of January 20, 2014 and lasted until early morning the next day. Cadet
lCL Cudia was informed of the charge against him, as to which he pleaded "Not Guilty." Among those who testified
were Cadet 1 CL Cudia, Maj. Hindang, and Cadets 1 CL Arcangel and Narciso. On the second night of the hearing
held on January 21, 2014, Cadet 1 CL Cudia again appeared and was called to the witness stand along with Cadets
Brit and Barrawed. Dr. Costales also testified under oath via phone on a loudspeaker. Deliberation among the HC
voting members followed. After that, the ballot sheets were distributed. The members cast their votes through secret
balloting and submitted their accomplished ballot sheets together with their written justification. The result was 8-1 in
favor of a guilty verdict. Cadet lCL Dalton John G. Lagura (Cadet lCL Lagura) was the lone dissenter. Allegedly,
upon the order ofHC Chairman Cadet 1 CL Mogol, the Presiding Officer and voting members went inside a chamber
adjoining the court room for further deliberation. After several minutes, they went out and the Presiding Officer
announced the 9-0 guilty verdict. Cadet 1 CL Cudia, who already served nine (9) touring hours, was then informed
of the unanimous votes finding him guilty of violating the Honor Code. He was immediately placed in the PMA
Holding Center until the resolution of his appeal.

On January 24, 2014, Cadet ICL Cudia filed a written appeal addressed to the HC Chairman, the full text of which
stated:

WRITTEN APPEAL

14 NOVEMBER 2013
14
This is when I was reported for "Late for two (2) minutes in Eng412 class", my explanation on this delinquency
report when I received it, is that "Our class was dismissed a (little) bit late and I came directly from 4th period class
... etc". Knowing the fact that in my delinquency report, it is stated that ENG412 classes started 1500H and I am late
for two minutes, it is logical enough for I (sic) to interpret it as "I came 1502H during that class". This is the
explanation that came into my mind that time. (I just cannot recall the exact words I used in explaining that
delinquency report, but what I want to say is that I have no intention to be late). In my statements, I convey my
message as "since I was not the only one left in that class, and the instructor is with us, I used the term "CLASS", I
used the word "DISMISSED" because I was under instruction (to wait for her to give the section grade) by the
instructor, Ms. Costales. The other cadets (lCL MIRANDA, lCL ARCANGEL) still have queries and business with her
that made me decide to use the word "CLASS", while the others who don't have queries and business with her (ex:
lCL NARCISO and 1 CL DIAZ) were also around.

Note:

The four named cadets were also reported late.

Reference: Para 171. 0. (Leaving the Classroom Prior to Dismissal Time)(Sec XVII, CCAFPR s2008)

It is stated in this reference that "Cadets shall not linger in the place of instruction after the section has been
dismissed. EXCEPT when told or allowed to do so by the instructor or by any competent authority for official
purposes. "

The instruction by Ms. Costales was given to me before the two bells rang (indicating the end of class hour, 1500H).
I waited for her for about 45 seconds to 1 minute and 30 seconds, that made me to decide to write "a little bit late" in
my explanation. Truly, the class ENDED 1500H but due to official purpose (instruction by Ms. Costales to wait) and
the conflict in academic schedule (to which I am not in control of the circumstances, 4th PD class 1330H-1500H and
5th PD class 1500H-1 600H), and since Ms. Costales, my other classmates, and I were there, I used the word
"CLASS".

19 December 2013

I was informed that my delinquency report was awarded, 11 Demerits and 13 Touring hours. Not because I don't
want to serve punishment, but because I know I did nothing wrong, I obeyed instruction, and believing that my
reason is justifiable and valid, that is why I approached our tactical officer, MAJ HINDANG PAF, to clarify and ask
why it was awarded that day.

In our conversation, he said that he had a phone call to my instructor and he even added that they have a protocol
to dismiss the class, 15 minutes or 10 minutes before 1500H. I explained:

Sir, I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and our 5th
period class, which is ENG412, started 1500H also. Immediately after 4th period class, I went to my next class
without any intention of being late Sir.

These statements are supplementary to my explanation in my delinquency report, in here, I specified the conflict in
the schedule and again, I have no intention to be late. After explaining it further with these statements, my tactical
officer said that since I was reported in a written form, I should make an appeal in a written form. Thinking that he
already understood what I want to say, I immediately made an appeal that day stating the words that I used in
having conversation with him.29

Attached to the written appeal was a Certification dated January 24, 2014, wherein Dr. Costales attested:

1. That Cadet MIRANDA, ARCANGEL, [and] NARCISO was (sic) with Cadet CUDIA in making query about
their latest grades in OR432 and/or results of UEl outside the ACADS office. The following facts may explain
their queries on 14 November 2013:

15
a. That I held my class in the PMAFI room instead of room 104.

b. That OR432 releases grades every Wednesday and cadets are informed during Thursday, either
in class or posted grades in the bulletin board (grades released was [sic J based on the previous
LEs: latest LE before UE was Decision Trees).

c. That UE papers were already checked but not yet recorded due to (sic) other cadets have not
taken the UE. Cadets were allowed to verify scores but not to look at the papers.

d. Last 23 January 2014, Captain Dulawan clarified if indeed Cadet NARCISO and ARCANGEL
verified grades. The two cadets said that they verified something with me after the OR432 class and
they were with Cadet CUD IA. That the statements of the three (3) cadets are all the same and
consistent, thus[,] I honor that as true.

2. As to the aspect of dismissing late, I could not really account for the specific time that I dismissed the
class. To this date, I [cannot] really recall an account that is more than two (2) months earlier. According to
my records, there was a lecture followed by an LE during (sic) on 14 November 2013. To determine the time
of my dismissal, maybe it can be verified with the other members of class I was handling on that said date.30

Respondents contend that the HC denied the appeal the same day, January · 24, as it found no reason to conduct a
re-trial based on the arguments and evidence presented.31 Petitioners, however, claim that the written appeal was
not acted upon until the filing of the petition-in-intervention.32

From January 25 to February 7, 2014, respondents allege that the Headquarters Tactics Group (HTG) conducted an
informal review to check the findings of the HC. During the course of the investigation, Prof. Berong was said to
have confirmed with the Officer-in-Charge of the HC that classes started as scheduled (i.e., 3:05 p.m. or 1505H),
and that Cadet lCL Barrawed, the acting class marcher of ENG412, verified before the Commandant, Assistant
Commandant, and STO that the class started not earlier than scheduled.

Meantime, on February 4, 2014, the OIC of the HC forwarded the Formal Investigation Report to the Staff Judge
Advocate (SJA) for review. The next day, the SJA found the report to be legally in order.

On February 8, 2014, Colonel Rozzano D. Briguez (Col. Briguez), the Commandant of Cadets, affirmed the HC
findings and recommended to Vice Admiral Edgar Abogado, then PMA Superintendent, the separation from the
PMA of Cadet lCL Cudia for violation of the First Tenet of the Honor Code (Lying, pursuant to Sec. VII.12.b of the
CCAFPR S-2008). On the same date, Special Orders No. 26 was issued by the PMA Headquarters placing Cadet 1
CL Cudia on indefinite leave of absence without pay and allowances effective February 10, 2014 pending approval
of his separation by the AFPGHQ, barring him from future appointment and/or admission as cadet, and not
permitting him to qualify for any entrance requirements to the PMA. 33

Two days later, Vice Admiral Abogado approved the recommendation to dismiss Cadet 1 CL Cudia.

On February 13, 2014, Cadet lCL Cudia submitted a letter to the Office of the Commandant of Cadets requesting for
reinstatement by the PMA of his status as a cadet.34

Four days passed, Annavee P. Cudia (Annavee ), the sister of Cadet 1 CL Cudia, posted his plight in her Face book
account. The day after, the Spouses Cudia gave a letter to Major General Oscar Lopez (Maj. Gen. Lopez), the new
PMA Superintendent, asking to recognize the 8-1 voting of the HC.35 Copies of which were furnished to the AFP
Chief of Staff and other concerned military officials. Subsequently, Maj. Gen. Lopez was directed to review Cadet
lCL Cudia's case. The latter, in turn, referred the matter to the Cadet Review and Appeals Board (CRAB).

On February 19, 2014, Cadet lCL Cudia made his personal appeal letter to Maj. Gen. Lopez. On even date, the AFP
Chief of Staff ordered a reinvestigation following the viral Facebook post of Annavee demanding the intervention of
the military leadership.

16
Petitioners claim that, on February 21, 2014, Special Order No. 1 was issued directing all PMA cadets to ostracize
Cadet 1 CL Cudia by not talking to him and by separating him from all activities/functions of the cadets. It is said that
any violation shall be a "Class 1" offense entailing 45 demerits, 90 hours touring, and 90 hours confinement. Cadet
1 CL Cudia was not given a copy of the order and learned about it only from the media.36 According to an alleged
news report, PMA Spokesperson Major Agnes Lynette Flores (Maj. Flores) confirmed the HC order to ostracize
Cadet 1 CL Cudia. Among his offenses were: breach of confidentiality by putting documents in the social media,
violation of the PMA Honor Code, lack of initiative to resign, and smearing the name of the PMA.37

On February 24, 2014, Cadet 1CL Cudia requested the CRAB for additional time, until March 4, 2014, to file an
appeal on the ground that his intended witnesses are in on-the-job training ( OJT).38 As additional evidence to
support his appeal, he also requested for copies of the Minutes of the HC proceedings, relevant documents
pertaining to the case, and video footages and recordings of the HC hearings.

The next day, Cadet 1 CL Cudia and his family engaged the services of the Public Attorney's Office (PAO) in Baguio
City.

The CRAB conducted a review of the case based on the following: (a) letter of appeal of the Spouses Cudia dated
February 18, 2014; (b) directive from the AFP-GHQ to reinvestigate the case; and ( c) guidance from Maj. Gen.
Lopez.

On February 26, 2014, Brigadier General Andre M. Costales, Jr. (Brig. Gen. Costales, Jr.), the CRAB Chairman,
informed Cadet lCL Cudia that, pending approval of the latter's request for extension, the CRAB would continue to
review the case and submit its recommendations based on whatever evidence and testimonies received, and that it
could not favorably consider his request for copies of the HC minutes, relevant documents, and video footages and
recordings of the HC hearings since it was neither the appropriate nor the authorized body to take action
thereon.39Subsequently, upon verbal advice, Cadet 1 CL Cudia wrote a letter to Maj. Gen. Lopez reiterating his
request.40

Two days after, the Spouses Cudia filed a letter-complaint before the CHR-Cordillera Administrative Region (CAR)
Office against the HC members and Maj. Gracilla for alleged violation of the human rights of Cadet lCL Cudia,
particularly his rights to due process, education, and privacy of communication.41

On March 4, 2014, Cadet 1 CL Cudia, through the PAO, moved for additional time, until March 19, 2014, to file his
appeal and submit evidence. PAO also wrote a letter to AFP Chief of Staff General Emmanuel T. Bautista (Gen.
Bautista) seeking for immediate directive to the PMA to expeditiously and favorably act on Cadet 1CL Cudia's
requests.42

Exactly a week prior to the commencement exercises of Siklab Diwa Class, the following events transpired:

On March 10, 2014, Annavee sought the assistance of PAO Chief Public Attorney Persida V. Rueda-Acosta.43 On
the other hand, the CRAB submitted a report to the AFP-GHQ upholding the dismissal of Cadet 1 CL Cudia.44

On March 11, 2014, PAO received a letter from Maj. Gen. Lopez stating the denial of Cadet 1CL Cudia's requests
for extension of time to file an Appeal Memorandum in view of the ample time already given, and to be furnished
with a copy of relevant documents because of confidentiality and presumption of regularity of the HC
proceedings.45Cadet 1CL Cudia, through PAO, then filed an Appeal Memorandum46 before the CRAB.

On March 12, 2014, Spouses Cudia wrote a letter to President Benigno Simeon C. Aquino III (Pres. Aquino), who is
the Commander-in-Chief of the AFP, attaching thereto the Appeal Memorandum.47 On the same day, Special Orders
No. 48 was issued by the PMA constituting a Fact-Finding Board/Investigation Body composed of the CRAB
members and PMA senior officers to conduct a deliberate investigation pertaining to Cadet 1CL Cudia's Appeal
Memorandum.48 The focus of the inquiry was not just to find out whether the appeal has merit or may be considered
but also to investigate possible involvement of other cadets and members of the command related to the incident
and to establish specific violation of policy or regulations that had been violated by other cadets and members of the
HC.49

17
On March 13, 2014, the Cudia family and the Chief Public Attorney had a dialogue with Maj. Gen. Lopez. On March
14, 2014, the CHR-CAR came out with its preliminary findings, which recommended the following:

a. For the PMA and the Honor Committee to respect and uphold the 8 Guilty - 1 Not guilty vote;

b. For the PMA and the Honor Committee to officially pronounce Cdt Cudia as Not Guilty of the charge filed
against him before the Honor Committee;

c. For the PMA to restore Cadet Cudia's rights and entitlements as a full-fledge graduating cadet and allow
him to graduate on Sunday, 16 March 2014;

d. For the PMA to fully cooperate with the CHR in the investigation of Cudia's Case.50

On March 15, 2014, Cadet 1CL Cudia and his family had a meeting with Pres. Aquino and Department of National
Defense (DND) Secretary Voltaire T. Gazmin. The President recommended that they put in writing their appeal,
requests, and other concerns. According to respondents, the parties agreed that Cadet 1 CL Cudia would not join
the graduation but it was without prejudice to the result of the appeal, which was elevated to the AFP Chief of Staff.
The President then tasked Gen. Bautista to handle the reinvestigation of the case, with Maj. Gen. Oscar Lopez
supervising the group conducting the review.

Four days after Siklab Diwa Class' graduation day, petitioner Renato S. Cudia received a letter dated March 11,
2014 from the Office of the AFP Adjutant General and signed by Brig. Gen. Ronald N. Albano for the AFP Chief of
Staff, affirming the CRAB' s denial of Cadet 1 CL Cudia' s appeal. It held:

After review, The Judge Advocate General, APP finds that the action of the PMA CRAB in denying the appeal for
reinvestigation is legally in order. There was enough evidence to sustain the finding of guilt and the proprietary (sic)
of the punishment imposed. Also, your son was afforded sufficient time to file his appeal from the date he was
informed of the final verdict on January 21, 2014, when the decision of the Honor Committee was read to him in
person, until the time the PMA CRAB conducted its review on the case. Moreover, the continued stay of your son at
the Academy was voluntary. As such, he remained subject to the Academy's policy regarding visitation. Further,
there was no violation of his right to due process considering that the procedure undertaken by the Honor
Committee and PMA CRAB was consistent with existing policy. Thus, the previous finding and recommendation of
the Honor Committee finding your son, subject Cadet guilty of "Lying" and recommending his separation from the
Academy is sustained.

In view of the foregoing, this Headquarters resolved to deny your appeal for lack of merit.51 Thereafter, the Fact-
Finding Board/Investigating Body issued its Final Investigation Report on March 23, 2014 denying Cadet 1 CL
Cudia's appeal.52 Subsequently, on April 28, 2014, the special investigation board tasked to probe the case
submitted its final report to the President.53 Pursuant to the administrative appeals process, the DND issued a
Memorandum dated May 23, 2014, directing the Office of AFP Chief of Staff to submit the complete records of the
case for purposes of DND review and recommendation for disposition by the President.54

Meanwhile, on May 22, 2014, the CHR-CAR issued its Resolution with respect to CHR-CAR Case No. 2014-0029,
concluding and recommending as follows:

WHEREFORE, PREMISES CONSIDERED, the Commission on Human Rights-CAR Office finds PROBABLE
CAUSE FOR HUMAN RIGHTS VIOLATIONS against the officers and members of the PMA Honor Committee and ..
certain PMA officials, specifically for violations of the rights of CADET ALDRIN JEFF P. CUDIA to dignity, due
process, education, privacy/privacy of communication, and good life.

IN VIEW OF THE FOREGOING, the CHR-CAR Office RESOLVED to indorse to competent authorities for their
immediate appropriate action on the following recommendations:

18
1. The Philippine Military Academy must set aside the "9-Guilty, 0-Not Guilty" verdict against Cadet
Aldrin Jeff P. Cudia, for being null and void; to uphold and respect the "8-Guilty, 1-Not Guilty" voting
result and make an official pronouncement of NOT GUILTY in favor of Cadet Cudia;

2. The PMA, the AFP Chief of Staff, and the President in whose hands rest the ends of justice and
fate of Cadet Cudia, to:

2.1 officially proclaim Cadet Cudia a graduate and alumnus of the Philippine Military
Academy;

2.2 issue to Cadet Cudia the corresponding Diploma for the degree of Bachelors of Science;
and

2.3 Issue to Cadet Cudia the corresponding official transcript 'of his academic records for his
BS degree, without conditions therein as to his status as a PMA cadet.

3. The Public Attorneys' Office to provide legal services to Cadet Cudia in pursuing administrative,
criminal and civil suits against the officers and members of the Honor Committee named hereunder,
for violation of the Honor Code and System and the Procedure in Formal Investigation, dishonesty,
violation of the secrecy of the ballot, tampering the true result of the voting, perjury, intentional
omission in the Minutes of substantive part of the formal trial proceedings which are prejudicial to the
interest of justice and Cadet Cudia's fundamental rights to dignity, non-discrimination and due
process, which led to the infringement of his right to education and even transgressing his right to a
good life.

3.1 Cdt lCL MIKE ANTHONY MOGUL, now 2nd Lt. of the AFP

3.2 Cdt lCL RHONA K. SALVACION, now 2nd Lt. of the AFP

3.3 Cdt 2CL ARWI C. MARTINEZ

3.4 Cdt 2CL RENATO A. CARINO, JR.

3.5 Cdt 2CL NIKOANGELOC. TARAYAO

3.6 Cdt lCL JEANEL YN P. CABRIDO, now 2nd Lt. of the AFP

3.7 Cdt lCL KIM ADRIAN R. MARTAL, now 2nd Lt. of the AFP

3.8 Cdt lCL JAIRUS 0. FANTIN, now 2nd Lt. of the AFP

3.9 Cdt lCL BRYAN SONNY S. ARLEGUI, now 2nd Lt. of the AFP

3.10 Cdt lCL DALTON JOHN G. LAGURA, now 2nd Lt. of the AFP

3.11 Cdt 1 CL BIANCHIHEIMER L. EDRA, now 2nd Lt. of the AFP

3.12 Cdt 4CL JENNIFER A. CUARTERON (recorder)

3.13 Cdt 3CL LEONCIO NICO A. DE JESUS II (record)

4. The Office of the AFP Chief of Staff and the PMA competent authorities should investigate and file
appropriate charges against Maj. VLADIMIR P. GRACILLA, for violation of the right to privacy of

19
Cadet Cudia and/or failure, as intelligence officer, to ensure the protection of the right to privacy of
Cudia who was then billeted at the PMA Holding Center;

5. The Office of the AFP Chief of Staff and PMA competent authorities should investigate Maj.
DENNIS ROMMEL HINDANG for his failure and ineptness to exercise his responsibility as a
competent Tactical Officer and a good father of his cadets, in this case, to Cadet Cudia; for failure to
respect exhaustion of administrative remedies;

6. The Secretary of National Defense, the Chief of Staff of the Armed Forces of the Philppines, the
PMA Superintendent, to immediately cause the comprehensive review of all rules of procedures,
regulations, policies, including the so-called practices in the implementation of the Honor Code; and,
thereafter, adopt new policies, rules of procedures and relevant regulations which are human-rights
based and consistent with the Constitution and other applicable laws;

7. The Congress of the Philippines to consider the enactment of a law defining and penalizing
ostracism and discrimination, which is apparently being practiced in the PMA, as a criminal offense
in this jurisdiction;

8. His Excellency The President of the Philippines to certify as priority, the passage of an anti-
ostracism and/or anti-discrimination law; and

9. Finally, for the AFP Chief of Staff and the PMA authorities to ensure respect and protection of the
rights of those who testified for the cause of justice and truth as well as human rights of Cadet
Cudia.

RESOLVED FURTHER, to monitor the actions by the competent authorities on the foregoing CHR
recommendations.

Let copy of this resolution be served by personal service or by substituted service to the complainants (the spouses
Renato and Filipina Cudia; and Aldrin Jeff P. Cudia), and all the respondents. Also, to the PMA Superintendent, the
AFP Chief of Staff, the Secretary of National Defense, His Excellency The President of the Philippines, The Public
Attorneys' Office.

SO RESOLVED.55

On June 11, 2014, the Office of the President sustained the findings of the AFP Chief of Staff and the CRAB. The
letter, which was addressed to the Spouses Cudia and signed by Executive Secretary Paquito N. Ochoa, Jr., stated
in whole:

This refers to your letters to the President dated 12 March 2014 and 26 March 2014 appealing for a reconsideration
of the decision of the Philippine Military Academy (PMA) Honor Committee on the case of your son, Cadet 1 CL
Aldrin Jeff Cudia.

After carefully studying the records of the case of Cadet Cudia, the decision of the Chief of Staff of the Armed
Forces of the Philippines (AFP), and the Honor Code System of the AFP Cadet Corps, this Office has found no
substantial basis to disturb the findings of the AFP and the PMA Cadet Review Appeals Board (CRAB). There is no
competent evidence to support the claim that the decision of the Honor Committee members was initially at 8
"Guilty" votes and 1 "Not Guilty" vote. The lone affidavit of an officer, based on his purported conversation with one
Honor Committee member, lacks personal knowledge on the deliberations of the said Committee and is hearsay at
best.

Similarly, the initial recommendations of the Commission on Human Rights cannot be adopted as basis that Cadet
Cudia's due process rights were violated. Apart from being explicitly preliminary in nature, such recommendations
are anchored on a finding that there was an 8-1 vote which, as discussed above, is not supported by competent
evidence.
20
In the evaluation of Cadet Cudia's case, this Office has been guided by the precept that military law is regarded to
be in a class of its own, "applicable only to military personnel because the military constitutes an armed organization
requiring a system of discipline separate from that of civilians" (Gonzales v. Abaya, G.R. No. 164007, 10 August
2005 citing Calley v. Callaway, 519 F. 2d 184 [1975] and Orloff v. Willoughby, 345 US 83 [1953]). Thus, this Office
regarded the findings of the AFP Chief, particularly his conclusion that there was nothing irregular in the
proceedings that ensued, as carrying great weight.

Accordingly, please be informed that the President has sustained the findings of the AFP Chief and the PMA
CRAB.56

The Issues

To petitioners, the issues for resolution are:

I.

WHETHER THE PHILIPPINE MILITARY ACADEMY, THE HONOR COMMITTEE AND THE CADET REVIEW AND
APPEALS BOARD COMMITTED GRAVE ABUSE OF DISCRETION IN DISMISSING CADET FIRST CLASS
ALDRIN JEFF P. CUDIA FROM THE ACADEMY IN UTTER DISREGARD OF HIS RIGHT TO DUE PROCESS
CONSIDERING THAT:

A. Despite repeated requests for relevant documents regarding his case, Cadet First Class Aldrin Jeff Cudia
was deprived of his right to have access to evidence which would have proven his defense, would have
totally belied the charge against him, and more importantly, would have shown the irregularity in the Honor
Committee's hearing and rendition of decision

B. Cadet First Class Aldrin Jeff Cudia was vaguely informed of the decisions arrived at by the Honor
Committee, the Cadet Review and Appeals Board and the Philippine Military Academy

C. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military Academy have
afforded Cadet First Class Aldrin Jeff Cudia nothing but a sham trial

D. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military Academy
violated their own rules and principles as embodied in the Honor Code

E. The Honor Committee, the Cadet Review and Appeals Board and the Philippine Military Academy, in
deciding Cadet First Class Aldrin Jeff Cudia's case, grossly and in bad faith, misapplied the Honor Code so
as to defy the 1987 Constitution, notwithstanding the unquestionable fact that the former should yield to the
latter.

II

WHETHER THE PHILIPPINE MILITARY ACADEMY, THE HONOR COMMITTEE AND THE CADET REVIEW AND
APPEALS BOARD COMMITTED GRAVE ABUSE OF DISCRETION IN HOLDING THAT CADET FIRST CLASS
ALDRIN JEFF P. CUDIA LIED, THEREBY VIOLATING THE HONOR CODE

III

WHETHER THE RESULT OF THE FACT-FINDING INVESTIGATION INDEPENDENTLY CONDUCTED BY THE


COMMISSION ON HUMAN RIGHTS IS OF SUCH GREAT WEIGHT AND PERSUASIVE NATURE THAT THIS
HONORABLE COURT MAY HONOR, UPHOLD AND RESPECT57

On the other hand, in support of their prayer to dismiss the petition, respondents presented the issues below:

21
PROCEDURAL GROUNDS

I.

THE MANDAMUS PETITION PRAYING THAT CADET CUDIA BE INCLUDED IN THE LIST OF GRADUATES OF
SIKLAB DIWA CLASS OF 2014 AND BE ALLOWED TO TAKE PART IN THE COMMENCEMENT EXERCISES
HAS ALREADY BEEN RENDERED MOOT.

II.

THE ISSUES RAISED IN THE PETITIONS ARE ACTUALLY FACTUAL WHICH ARE BEYOND THE SCOPE OF A
PETITION FOR CERTIORARI, PROHIBITION AND MANDAMUS.

III.

MANDAMUS DOES NOT LIE TO COMPEL RESPONDENTS TO GRANT THE RELIEFS PRAYED FOR. IV. IT IS
PREMATURE TO INVOKE JUDICIAL REDRESS PENDING THE DECISION OF THE PRESIDENT ON CADET
CUDIA'S APPEAL.

V.

WITH UTMOST DUE RESPECT, THE HONORABLE COURT MUST EXERCISE CAREFUL RESTRAINT AND
REFRAIN FROM UNDULY OR PREMATURELY INTERFERING WITH LEGITIMATE MILITARY MATTERS.

SUBSTANTIVE GROUNDS

VI.

CADET CUDIA HAS NECESSARILY AND VOLUNTARILY RELINQUISHED CERTAIN CIVIL LIBERTIES BY
VIRTUE OF HIS ENTRY INTO THE PMA.

VII.

THE PMA ENJOYS THE ACADEMIC FREEDOM WHICH AUTHORIZES IT TO IMPOSE DISCIPLINARY
MEASURES AND PUNISHMENT AS IT DEEMS FIT AND CONSISTENT WITH THE PECULIAR NEEDS OF THE
ACADEMY.

VIII.

CADET CUDIA WAS PROPERLY AFFORDED PROCEDURAL DUE PROCESS.

The PMA has regulatory authority to administratively terminate cadets despite the absence of statutory authority.

Violation of the Honor Code warrants the administrative dismissal of a guilty cadet.

Cadet Cudia violated the first tenet of the Honor Code by providing untruthful statements in the explanation for his
tardiness.

The higher authorities of the PMA did not blindly adopt the findings of the Honor Committee.

The procedural safeguards in a student disciplinary case were properly accorded to Cadet Cudia.

22
The subtle evolution in the voting process of the Honor Committee, by incorporating executive session/chambering,
was adopted to further strengthen the voting procedure of the Honor Committee. Cadet Lagura voluntarily changed
his vote without any pressure from the other voting members of the Honor Committee.

Ostracism is not a sanctioned practice of the PMA.

The findings of the Commission on Human Rights are not binding on the Honorable Court, and are, at best,
recommendatory.

Cadet Cudia was not effectively deprived of his future when he was dismissed from the PMA.58

The Ruling of the Court

PROCEDURAL GROUNDS

Propriety of a petition for mandamus

Respondents argue that the mandamus aspect of the petition praying that Cadet 1 CL Cudia be included in the list
of graduating cadets and for him to take part in the commencement exercises was already rendered moot and
academic when the graduation ceremonies of the PMA Siklab Diwa Class took place on March 16, 2014. Also, a
petition for mandamus is improper since it does not lie to compel the performance of a discretionary duty. Invoking
Garcia v. The Faculty Admission Committee, Loyola School of Theology,59 respondents assert that a mandamus
petition could not be availed of to compel an academic institution to allow a student to continue studying therein
because it is merely a privilege and not a right. In this case, there is a clear failure on petitioners' part to establish
that the PMA has the, ministerial duty to include Cadet 1 CL Cudia in the list, much less award him with academic
honors and commission him to the Philippine Navy. Similar to the case of University of San Agustin, Inc. v. Court of
Appeals,60 it is submitted that the PMA may rightfully exercise its discretionary power on who may be admitted to
study pursuant to its academic freedom.

In response, petitioners contend that while the plea to allow Cadet 1 CL Cudia to participate in the PMA 2014
commencement exercises could no longer be had, the Court may still grant the other reliefs prayed for. They add
that Garcia enunciated that a respondent can be ordered to act in a particular manner when there is a violation of a
constitutional right, and that the certiorari aspect of the petition must still be considered because it is within the
province of the Court to determine whether a branch of the government or any of its officials has acted without or in
excess of jurisdiction or with grave abuse of discretion amounting to lack or excess thereof.

We agree that a petition for mandamus is improper.

Under Section 3, Rule 65 of the Rules of Civil Procedure, a petition for mandamus may be filed when any tribunal,
corporation, board, officer, or person unlawfully neglects the performance of an act which the law specifically enjoins
as a duty resulting from an office, trust, or station. It may also be filed when any tribunal, corporation, board, officer,
or person unlawfully excludes another from the use and enjoyment of a right or office to which such other is entitled.

For mandamus to lie, the act sought to be enjoined must be a ministerial act or duty. An act is ministerial if the act
should be performed "[under] a given state of facts, in a prescribed manner, in obedience to the mandate of a legal
authority, without regard to or the exercise of [the tribunal or corporation's] own judgment upon the propriety or
impropriety of the act done." The tribunal, corporation, board, officer, or person must have no choice but to perform
the act specifically enjoined by law. This is opposed to a discretionary act whereby the officer has the choice to
decide how or when to perform the duty.61

In this case, petitioners pray for, among others: Also, after due notice and hearing, it is prayed of the Court to issue
a Writ of Mandamus to:

1. direct the PMA to include Cadet Cudia in the list of graduates of Siklab Diwa Class of 2014 of the PMA,
including inclusion in the yearbook;
23
2. direct the PMA to allow Cadet Cudia to take part in the commencement exercises if he completed all the
requirements for his baccalaureate degree;

3. direct the PMA to award unto Cadet Cudia the academic honors he deserves, and the commission as a
new Philippine Navy ensign;

4. direct the Honor Committee to submit to the CRAB of the PMA all its records of the proceedings taken
against Cadet Cudia, including the video footage and audio recordings of the deliberations and voting, for
the purpose of allowing the CRAB to conduct intelligent review of the case of Cadet Cudia;

5. direct the PMA's CRAB to conduct a review de nova of all the records without requiring Cadet Cudia to
submit new evidence if it was physically impossible to do so;

6. direct the PMA's CRAB to take into account the certification signed by Dr. Costales, the new evidence
consisting of the affidavit of a military officer declaring under oath that the cadet who voted "not guilty"
revealed to this officer that this cadet was coerced into changing his vote, and other new evidence if there is
any;

7. direct the PMA's CRAB to give Cadet Cudia the right to a counsel who is allowed to participate actively in
the proceedings as well as in the cross-examinations during the exercise of the right to confront witnesses
against him; and

8. direct the Honor Committee in case of remand of the case by the CRAB to allow Cadet Cudia a
representation of a counsel.62

Similarly, petitioner-intervenor seeks for the following reliefs:

A. xxx

B. a Writ of Mandamus be issued commanding:

a.) The PMA, Honor Committee, and CRAB to respect and uphold the 8 Guilty -1 Not Guilty vote;

b.) The PMA, Honor Committee, and CRAB to officially pronounce Cadet Cudia as Not Guilty of the
charge filed against him before the Honor Committee;

c.) The PMA to restore Cadet Cudia's rights and entitlements as a full-fledged graduating cadet,
including his diploma and awards.63

Anent the plea to direct the PMA to include Cadet 1 CL Cudia in the list of graduates of Siklab Diwa Class of 2014
and to allow him to take part in the commencement exercises, the same was rendered moot and academic when
the graduation ceremonies pushed through on March 16, 2014 without including Cadet 1 CL Cudia in the roll of
graduates.

With respect to the prayer directing the PMA to restore Cadet 1 CL Cudia's rights and entitlements as a full-fledged
graduating cadet, including his diploma, awards, and commission as a new Philippine Navy ensign, the same
cannot be granted in a petition for mandamus on the basis of academic freedom, which We shall discuss in more
detail below. Suffice it to say at this point that these matters are within the ambit of or encompassed by the right of
academic freedom; therefore, beyond the province of the Court to decide.64 The powers to confer degrees at the
PMA, grant awards, and commission officers in the military service are discretionary acts on the part of the
President as the AFP Commander-in-Chief. Borrowing the words of Garcia:

There are standards that must be met. There are policies to be pursued. Discretion appears to be of the essence. In
terms of Hohfeld's terminology, what a student in the position of petitioner possesses is a privilege rather than a

24
right. She [in this case, Cadet 1 CL Cudia] cannot therefore satisfy the prime and indispensable requisite of a
mandamus proceeding.65

Certainly, mandamus is never issued in doubtful cases. It cannot be availed against an official or government
agency whose duty requires the exercise of discretion or judgment.66 For a writ to issue, petitioners should have a
clear legal right to the thing demanded, and there should be an imperative duty on the part of respondents to
perform the act sought to be mandated.67

The same reasons can be said as regards the other reliefs being sought by petitioners, which pertain to the HC and
the CRAB proceedings. In the absence of a clear and unmistakable provision of a law, a mandamus petition does
not lie to require anyone to a specific course of conduct or to control or review the exercise of discretion; it will not
issue to compel an official to do anything which is not his duty to do or which is his duty not to do or give to the
applicant anything to which he is not entitled by law.68

The foregoing notwithstanding, the resolution of the case must proceed since, as argued by petitioners, the Court is
empowered to settle via petition for certiorari whether there is grave abuse of discretion on the part of respondents
in dismissing Cadet 1 CL Cudia from the PMA.

Factual nature of the issues

According to respondents, the petition raises issues that actually require the Court to make findings of fact because
it sets forth several factual disputes which include, among others: the tardiness of Cadet 1 CL Cudia in , his
ENG412 class and his explanation thereto, the circumstances that transpired in the investigation of his Honor Code
violation, the proceedings before the HC, and the allegation that Cadet 1 CL Lagura was forced to change his vote
during the executive session/"chambering."

In opposition, petitioners claim that the instant controversy presents legal issues. Rather than determining which
between the two conflicting versions of the parties is true, the case allegedly centers on the application,
appreciation, and interpretation of a person's rights to due process, to education, and to property; the interpretation
of the PMA Honor Code and Honor System; and the conclusion on whether Cadet 1 CL Cudia's explanation
constitutes lying. Even if the instant case involves questions of fact, petitioners still hold that the Court is empowered
to settle mixed questions of fact and law. Petitioners are correct.

There is a question of law when the issue does not call for an examination of the probative value of evidence
presented, the truth or falsehood of facts being admitted and the doubt concerns the correct application of law and
jurisprudence on the matter. On the other hand, there is a question of fact when the doubt or controversy arises as
to the truth or falsity of the alleged facts. When there is no dispute as to fact, the question of whether or not the
conclusion drawn therefrom is correct is a question of law.69 The petition does not exclusively present factual matters
for the Court to decide. As pointed out, the all-encompassing issue of more importance is the determination of
whether a PMA cadet has rights to due process, to education, and to property in the context of the Honor Code and
the Honor System, and, if in the affirmative, the extent or limit thereof. Notably, even respondents themselves raise
substantive grounds that We have to resolve. In support of their contention that the Court must exercise careful
restraint and should refrain from unduly or prematurely interfering in legitimate military matters, they argue that
Cadet 1 CL Cudia has necessarily and voluntarily relinquished certain civil liberties by virtue of his entry into the
PMA, and that the Academy enjoys academic freedom authorizing the imposition of disciplinary measures and
punishment as it deems fit and consistent with the peculiar needs of the PMA. These issues, aside from being
purely legal being purely legal questions, are of first impression; hence, the Court must not hesitate to make a
categorical ruling.

Exhaustion of administrative remedies

Respondents assert that the Court must decline jurisdiction over the petition pending President Aquino’s resolution
of Cadet 1 CL Cudia' appeal. They say that there is an obvious non-exhaustion of the full administrative process.
While Cadet 1 CL Cudia underwent the review procedures of his guilty verdict at the Academy level - the
determination by the SJA of whether the HC acted according to the established procedures of the Honor System,

25
the assessment by the Commandant of Cadets of the procedural and legal correctness of the guilty verdict, the
evaluation of the PMA Superintendent to warrant the administrative separation of the guilty cadet, and the appellate
review proceedings before the CRAB - he still appealed to the President, who has the utmost latitude in making
decisions affecting the military. It is contended that the President's power over the persons and actions of the
members of the armed forces is recognized in B/Gen. (Ret.) Gudani v. Lt./Gen. Senga70 and in Section 3171 of
Commonwealth Act (CA.) No. 1 (also known as "The National Defense Act''). As such, the President could still
overturn the decision of the PMA. In respondents' view, the filing of this petition while the case is pending resolution
of the President is an irresponsible defiance, if not a personal affront. For them, comity dictates that courts of justice
should shy away from a dispute until the system of administrative redress has been completed.

From the unfolding of events, petitioners, however, consider that President Aquino effectively denied the appeal of
Cadet 1 CL Cudia. They claim that his family exerted insurmountable efforts to seek reconsideration of the HC
recommendation from the APP officials and the President, but was in vain. The circumstances prior to, during, and
after the PMA 2014 graduation rites, which was attended by President Aquino after he talked to Cadet lCL Cudia's
family the night before, foreclose the possibility that the challenged findings would still be overturned. In any case,
petitioners insist that the· rule on exhaustion of administrative remedies is not absolute based on the Corsiga v.
Defensor72 and Verceles v. BLR-DOLE73 rulings.

We rule for petitioners.

In general, no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative
remedy has been exhausted. The rationale behind the doctrine of exhaustion of administrative remedies is that
"courts, for reasons of law, comity, and convenience, should not entertain suits unless the available administrative
remedies have first been resorted to and the proper authorities, who are competent to act upon the matter
complained of, have been given the appropriate opportunity to act and correct their alleged errors, if any, committed
in the administrative forum."74 In the U.S. case of Ringgold v. United States,75 which was cited by respondents, it was
specifically held that in a typical case involving a decision by military authorities, the plaintiff must exhaust his
remedies within the military before appealing to the court, the doctrine being designed both to preserve the balance
between military and civilian authorities and to conserve judicial resources.

Nonetheless, there are exceptions to the rule. In this jurisdiction, a party may directly resort to judicial remedies if
any of the following is present:

1. when there is a violation of due process;

2. when the issue involved is purely a legal question;

3. when the administrative action is patently illegal amounting to lack or excess of jurisdiction;

4. when there is estoppel on the part of the administrative agency concerned;

5. when there is irreparable injury;

6. when the respondent is a department secretary whose acts as an alter ego of the President bear the
implied and assumed approval of the latter;

7. when to require exhaustion of administrative remedies would be unreasonable;

8. when it would amount to a nullification of a claim;

9. when the subject matter is a private land in land case proceedings;

10. when the rule does not provide a plain, speedy and adequate remedy; and

11. when there are circumstances indicating the urgency of judicial intervention.76
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Petitioners essentially raise the lack of due process in the dismissal of Cadet 1 CL Cudia from the PMA. Thus, it
may be a ground to give due course to the petition despite the non-exhaustion of administrative remedies. Yet more
significant is the fact that during the pendency of this case, particularly on June 11, 2014, the Office of the President
finally issued its ruling, which sustained the findings of the AFP Chief and the CRAB. Hence, the occurrence of this
supervening event bars any objection to the petition based on failure to exhaust administrative remedies.

Court's interference within military affairs

Respondents cite the U.S. cases of Bois v. Marsh77 and Schlesinger v. Councilman78 to support their contention that
judicial intervention would pose substantial threat to military discipline and that there should be a deferential review
of military statutes and regulations since political branches have particular expertise and competence in assessing
military needs. Likewise, in Orloff v. Willoughby79 and Parker v. Levy,80 it was allegedly opined by the U.S. Supreme
Court that the military constitutes a specialized community governed by a separate discipline from that of the
civilian. According to respondents, the U.S. courts' respect to the military recognizes that constitutional rights may
apply differently in the military context than in civilian society as a whole. Such military deference is exercised either
by refusing to apply due process and equal protection doctrines in military cases or applying them but with leniency.

In respondents' view, although Philippine courts have the power of judicial review in cases attended with grave
abuse of discretion amounting to lack or excess of jurisdiction, policy considerations call for the widest latitude of
deference to military affairs. Such respect is exercised by the court where the issues to be resolved entail a
substantial consideration of legitimate governmental interest. They suppose that allowing Cadet 1 CL Cudia's case
to prosper will set an institutionally dangerous precedent, opening a Pandora's box of other challenges against the
specialized system of discipline of the PMA. They state that with the PMA's mandate to train cadets for permanent
commission in the AFP, its disciplinary rules and procedure necessarily must impose h different standard of conduct
compared with civilian institutions.

Petitioners, on the other hand, consider that this Court is part of the State's check-and-balance machinery,
specifically mandated by Article VIII of the 1987 Constitution to ensure that no branch of the government or any of
its officials acts without or in excess of jurisdiction or with grave abuse of, discretion amounting to lack or excess of
jurisdiction. They assert that judicial non-interference in military affairs is not deemed as absolute even in the U.S.
They cite Schlesinger and Parker, which were invoked by respondents, as well as Burns v. Wilson81 and Harmon v.
Brucker,82 wherein the U.S. Supreme Court reviewed the proceedings of military tribunals on account of issues
posed concerning due process and violations of constitutional rights. Also, in Magno v. De Villa83 decided by this
Court, petitioners note that We, in fact, exercised the judicial power to determine whether the APP and the members
of the court martial acted with grave abuse o.f discretion in their military investigation.

Petitioners' contentions are tenable.

Admittedly, the Constitution entrusts the political branches of the government, not the courts, with superintendence
and control over the military because the courts generally lack the competence and expertise necessary to evaluate
military decisions and they are ill-equipped to determine the impact upon discipline that any particular intrusion upon
military authority might have.84 Nevertheless, for the sake of brevity, We rule that the facts as well as the legal issues
in the U.S. cases cited by respondents are not on all fours with the case of Cadet 1 CL Cudia. Instead, what applies
is the 1975 U.S. case of Andrews v. Knowlton,85 which similarly involved cadets who were separated from the United
States Military Academy due to Honor Code violations. Following Wasson v. Trowbridge86 and Hagopian v.
Knowlton,87 Andrews re-affirmed the power of the district courts to review procedures used at the service academies
in the separation or dismissal of cadets and midshipmen. While it recognized the "constitutional permissibility of the
military to set and enforce uncommonly high standards of conduct and ethics," it said that the courts "have
expanded at an accelerated pace the scope of judicial access for review of military determinations." Later, in Kolesa
v. Lehman,88 it was opined that it has been well settled that federal courts have jurisdiction "where there is a
substantial claim that prescribed military procedures violates one's constitutional rights." By 1983, the U.S.
Congress eventually made major revisions to the Uniform Code of Military Justice (UCMJ) by expressly providing,
among others; for a direct review by the U.S. Supreme Court of decisions by the military's highest appellate
authority.89

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Even without referring to U.S. cases, the position of petitioners is still formidable. In this jurisdiction, Section 1 Article
VIII of the 1987 Constitution expanded the scope of judicial power by mandating that the duty of the courts of justice
includes not only "to settle actual controversies involving rights which are legally demandable and enforceable" but
also "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government" even if the latter does not exercise
judicial, quasi-judicial or ministerial functions.90 Grave abuse of discretion implies such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction or where the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, which must be so patent and gross as to amount to an
evasion of positive duty or to a virtual refusal to perform the duty enjoined or to act at all in contemplation of law.91

The proceedings of the Cadet Honor Committee can, for purposes of the Due Process Clause, be considered a
governmental activity. As ruled in Andrews:

The relationship between the Cadet Honor Committee and the separation process at the Academy has been
sufficiently formalized, and is sufficiently interdependent, so as to bring that committee's activities within the
definition of governmental activity for the purposes of our review. While the Academy has long had the informal
practice of referring all alleged violations to the Cadet Honor Committee, the relationship between that committee
and the separation process has to a degree been formalized. x x x

Regardless of whether the relationship be deemed formal or informal, the Honor Committee under its own
procedures provides that a single "not guilty" vote by a member ends the matter, while a "guilty" finding confronts a
cadet with the hard choice of either resigning or electing to go before a Board of Officers. An adverse finding there
results not only in formal separation from the Academy but also in a damaging record that will follow the cadet
through life. Accordingly, we conclude that the Cadet Honor Committee, acting not unlike a grand jury, is clearly part
of the process whereby a cadet can ultimately be adjudged to have violated the Cadet Honor Code and be
separated from the Academy. Therefore, the effect of the committee's procedures and determinations on the
separation process is sufficiently intertwined with the formal governmental activity which may follow as to bring it
properly under judicial review92

No one is above the law, including the military. In fact, the present Constitution declares it as a matter of principle
that civilian authority is, at all times, supreme over the military.93 Consistent with the republican system of checks
and balances, the Court has been entrusted, expressly or by necessary implication, with both the duty and the
obligation of determining, in appropriate cases, the validity of any assailed legislative or executive action.94

SUBSTANTIVE GROUNDS

Cadet's relinquishment of certain civil liberties

Respondents assert that the standard of rights applicable to a cadet is not the same as that of a civilian because the
former' s rights have already been recalibrated to best serve the military purpose and necessity. They claim that
both Gudani and Lt. Col. Kapunan, Jr. v. Gen. De Villa95 recognized that, to a certain degree, individual rights of
persons in the military service may be curtailed by the rules of military discipline in order to ensure its effectiveness
in fulfilling the duties required to be discharged under the law. Respondents remind that, as a military student
aspiring to a commissioned post in the military service, Cadet 1 CL Cudia voluntarily gave up certain civil and
political rights which the rest of the civilian population enjoys. The deliberate surrender of certain freedoms on his
part is embodied in the cadets' Honor Code Handbook. It is noted that at the beginning of their academic life in the
PMA, Cadet 1 CL Cudia, along with the rest of Cadet Corps, took an oath and undertaking to stand by the Honor
Code and the Honor System.

To say that a PMA cadet surrenders his fundamental human rights, including the right to due process, is, for
petitioners, contrary to the provisions of Section 3, Article II of the 1987 Constitution,96 Executive Order (E.O.) No.
17897 (as amended by E.O. No. 100598), AFP Code of Ethics, Oath of Cadet Corps to the Honor Code and the Honor
System, military professionalism, and, in general, military culture. They maintain that the HC, the CRAB, and the
PMA, grossly and in bad faith misapplied the Honor Code and the Honor System in deciding Cadet lCL Cudia's case
considering that these should not be implemented at the expense of human rights, due process, and fair play.
Further, under the doctrine of constitutional supremacy, they can never overpower or defy the 1987 Constitution
28
since the former should yield to the latter. Petitioners stress that the statement that "a cadet can be compelled to
surrender some civil rights and liberties in order for the Code and System to be implemented" simply pertains to
what cadets have to sacrifice in order to prove that they are men or women of integrity and honor, such as the right
to entertain vices and the right to freely choose what they want to say or do. In the context of disciplinary
investigation, it does not contemplate a surrender of the right to due process but, at most, refers to the cadets' rights
to privacy and to remain silent.

We concur with the stand of petitioners.

Of course, a student at a military academy must be prepared to subordinate his private interests for the proper
functioning of the educational institution he attends to, one that is with a greater degree than a student at a civilian
public school.99 In fact, the Honor Code and Honor System Handbook of the PMA expresses that, "[as] a training
environment, the Cadet Corps is a society which has its own norms. Each member binds himself to what is good for
him, his subordinates, and his peers. To be part of the Cadet Corps requires the surrender of some basic rights and
liberties for the good of the group."100

It is clear, however, from the teachings of Wasson and Hagopian, which were adopted by Andrews, that a cadet
facing dismissal from the military academy for misconduct has constitutionally protected private interests (life,
liberty, or property); hence, disciplinary proceedings conducted within the bounds of procedural due process is a
must.101For that reason, the PMA is not immune from the strictures of due process. Where a person's good name,
reputation, honor, or integrity is at stake because of what the government is doing to him, the minimal requirements
of the due process clause must be satisfied.102 Likewise, the cadet faces far more severe sanctions of being expelled
from a course of college instruction which he or she has pursued with a view to becoming a career officer and of
probably

being forever denied that career.103

The cases of Gudani and Kapunan, Jr. are inapplicable as they do not specifically pertain to dismissal proceedings
of a cadet in a military academy due to honor violation. In Gudani, the Court denied the petition that sought to annul
the directive from then President Gloria Macapagal-Arroyo, which' enjoined petitioners from testifying before the
Congress without her consent. We ruled that petitioners may be subjected to military discipline for their defiance of a
direct order of the AFP Chief of Staff. On the other hand, in Kapunan, Jr., this Court upheld the restriction imposed
on petitioner since the conditions for his "house arrest" (particularly, that he may not issue any press statements or
give any press conference during the period of his detention) are justified by the requirements of military discipline.
In these two cases, the constitutional rights to information, transparency in matters of public concern, and to free
speech - not to due process clause - were restricted to better serve the greater military purpose. Academic freedom
of the PMA

Petitioners posit that there is no law providing that a guilty finding by the HC may be used by the PMA to dismiss or
recommend the dismissal of a cadet from the PMA. They argue that Honor Code violation is not among those listed
as justifications for the attrition of cadets considering that the Honor Code and the Honor System do not state that a
guilty cadet is automatically terminated or dismissed from service. To them, the Honor Code and Honor System are
"gentleman's agreement" that cannot take precedence over public interest - in the defense of the nation and in view
of the taxpayer's money spent for each cadet. Petitioners contend that, based on the Civil Code, all written or verbal
agreements are null and void if they violate the law, good morals, good customs, public policy, and public safety.

In opposition, respondents claim that the PMA may impose disciplinary measures and punishment as it deems fit
and consistent with the peculiar needs of the Academy. Even without express provision of a law, the PMA has
regulatory authority to administratively dismiss erring cadets since it is deemed reasonably written into C.A. No. 1.
Moreover, although said law grants to the President the authority of terminating a cadet's appointment, such power
may be delegated to the PMA Superintendent, who may exercise direct supervision and control over the cadets.

Respondents likewise contend that, as an academic institution, the PMA has the inherent right to promulgate
reasonable norms, rules and regulations that it may deem necessary for the maintenance of school discipline, which
is specifically mandated by Section 3 (2),104 Article XIV of the 1987 Constitution. As the premiere military educational
institution of the AFP in accordance with Section 30,105 Article III of C.A. No. 1 and Sections 58 and 59,106 Chapter 9,
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Subtitle II, Title VIII, Book IV of E.O. No. 292 ("Administrative Code of 1987"), the PMA is an institution that enjoys
academic freedom guaranteed by Section 5 (2),107 Article XIV of the 1987 Constitution. In Miriam College
Foundation, Inc. v. Court of Appeals,108 it was held that concomitant with such freedom is the right and duty to instill
and impose discipline upon its students. Also, consistent with lsabelo, Jr. v. Perpetual Help College of Rizal,
Inc.109 and Ateneo de Manila University v. Capulong,110 the PMA has the freedom on who to admit (and, conversely,
to expel) given the high degree of discipline and honor expected from its students who are to form part of the AFP.

For respondents, Cadet 1 CL Cudia cannot, therefore, belatedly assail the Honor Code as basis of the HC' s
decision to recommend his dismissal from the PMA. When he enlisted for enrolment and studied in the PMA for four
years, he knew or should have been fully aware of the standards of discipline imposed on all cadets and the
corresponding penalty for failing to abide by these standards.

In their Reply, petitioners counter that, as shown in lsabelo, Jr. and Ateneo, academic freedom is not absolute and
cannot be exercised in blatant disregard of the right to due process and the 1987 Constitution. Although schools
have the prerogative to choose what to teach, how to teach, and who to teach, the same does not go so far as to
deprive a student of the right to graduate when there is clear evidence that he is entitled to the same since, in such
a case, the right to graduate becomes a vested right which takes precedence over the limited and restricted right of
the educational institution.

While both parties have valid points to consider, the arguments of respondents are more in line with the facts of this
case. We have ruled that the school-student relationship is contractual in nature. Once admitted, a student's
enrolment is not only semestral in duration but for the entire period he or she is expected to complete it.111 An
institution of learning has an obligation to afford its students a fair opportunity to complete the course they seek to
pursue.112 Such contract is imbued with public interest because of the high priority given by the Constitution to
education and the grant to the State of supervisory and regulatory powers over a educational institutions.113

The school-student relationship has also been held as reciprocal. "[It] has consequences appurtenant to and
inherent in all contracts of such kind -it gives rise to bilateral or reciprocal rights and obligations. The school
undertakes to provide students with education sufficient to enable them to pursue higher education or a profession.
On the other hand, the students agree to abide by the academic requirements of the school and to observe its rules
and regulations."114

Academic freedom or, to be precise, the institutional autonomy of universities and institutions of higher
learning,115has been enshrined in our Constitutions of 1935, 1973, and 1987.116 In Garcia, this Court espoused the
concurring opinion of U.S. Supreme Court Justice Felix Frankfurter in Sweezy v. New Hampshire,117 which
enumerated "the four essential freedoms" of a university: To determine for itself on academic grounds (1) who may
teach, (2) what may be taught, (3) how it shall be taught, and (4) who may be admitted to study.118 An educational
institution has the power to adopt and enforce such rules as may be deemed expedient for its government, this
being incident to the very object of incorporation, and indispensable to the successful management of the
college.119 It can decide for itself its aims and objectives and how best to attain them, free from outside coercion or
interference except when there is an overriding public welfare which would call for some restraint.120 Indeed,
"academic freedom has never been meant to be an unabridged license. It is a privilege that assumes a correlative
duty to exercise it responsibly. An equally telling precept is a long recognized mandate, so well expressed in Article
19 of the Civil Code, that every 'person must, in the exercise of his rights and in the performance of his duties, act
with justice, give everyone his due, and observe honesty and good faith."'121

The schools' power to instill discipline in their students is subsumed in their academic freedom and that "the
establishment of rules governing university-student relations, particularly those pertaining to student discipline, may
be regarded as vital, not merely to the smooth and efficient operation of the institution, but to its very survival."122 As
a Bohemian proverb puts it: "A school without discipline is like a mill without water." Insofar as the water turns the
mill, so does the school's disciplinary power assure its right to survive and continue operating.123 In this regard, the
Court has always recognized the right of schools to impose disciplinary sanctions, which includes the power to
dismiss or expel, on students who violate disciplinary rules.124 In Miriam College Foundation, Inc. v. Court of
Appeals,125 this Court elucidated:

30
The right of the school to discipline its students is at once apparent in the third freedom, i.e., "how it shall be taught."
A school certainly cannot function in an atmosphere of anarchy.

Thus, there can be no doubt that the establishment of an educational institution requires rules and regulations
necessary for the maintenance of an orderly educational program and the creation of an educational environment
conducive to learning. Such rules and regulations are equally necessary for the protection of the students, faculty,
and property.

Moreover, the school has an interest in teaching the student discipline, a necessary, if not indispensable, value in
any field of learning. By instilling discipline, the school teaches discipline. Accordingly, the right to discipline the
student likewise finds basis in the freedom "what to teach." Incidentally, the school not only has the right but the duty
to develop discipline in its students. The Constitution no less imposes such duty.

[All educational institutions] shall inculcate patriotism and nationalism, foster love of humanity, respect for human
rights, appreciation of the role of national heroes in the historical development of the country, teach the rights and
duties of citizenship, strengthen ethical and spiritual values, develop moral character and personal discipline,
encourage critical and creative thinking, broaden scientific and technological knowledge, and promote vocational
efficiency.

In Angeles vs. Sison, we also said that discipline was a means for the school to carry out its responsibility to help its
students "grow and develop into mature, responsible, effective and worthy citizens of the community."

Finally, nowhere in the above formulation is the right to discipline more evident than in "who may be admitted to
study." If a school has the freedom to determine whom to admit, logic dictates that it also has the right to determine
whom to exclude or expel, as well as upon whom to impose lesser sanctions such as suspension and the
withholding of graduation privileges.126

The power of the school to impose disciplinary measures extends even after graduation for any act done by the
student prior thereto. In University of the Phils. Board of Regents v. Court of Appeals,127 We upheld the university's
withdrawal of a doctorate degree already conferred on a student who was found to have committed intellectual
dishonesty in her dissertation. Thus:

Art. XIV, §5 (2) of the Constitution provides that "[a]cademic freedom shall be enjoyed in all institutions of higher
learning." This is nothing new. The 1935 Constitution and the 1973 Constitution likewise provided for the academic
freedom or, more precisely, for the institutional autonomy of universities and institutions of higher learning. As
pointed out by this Court in Garcia v. Faculty Admission Committee, Loyola School of Theology, it is a freedom
granted to "institutions of higher learning" which is thus given "a wide sphere of authority certainly extending to the
choice of students." If such institution of higher learning can decide who can and who cannot study in it, it certainly
can also determine on whom it can confer the honor and distinction of being its graduates.

Where it is shown that the conferment of an honor or distinction was obtained through fraud, a university has the
right to revoke or withdraw the honor or distinction it has thus conferred. This freedom of a university does not
terminate upon the "graduation" of a student, .as the Court of Appeals held. For it is precisely the "graduation" of
such a student that is in question. It is noteworthy that the investigation of private respondent's case began before
her graduation. If she was able to join the graduation ceremonies on April 24, 1993, it was because of too many
investigations conducted before the Board of Regents finally decided she should not have been allowed to graduate.

Wide indeed is the sphere of autonomy granted to institutions of higher learning, for the constitutional grant of
academic freedom, to quote again from Garcia v. Faculty Admission Committee, Loyola School of Theology, "is not
to be construed in a niggardly manner or in a grudging fashion."

Under the U.P. Charter, the Board of Regents is the highest governing body of the University of the Philippines. It
has the power to confer degrees upon the recommendation of the University Council. It follows that if the conferment
of a degree is founded on error or fraud, the Board of Regents is also empowered, subject to the observance of due
process, to withdraw what it has granted without violating a student's rights. An institution of higher learning cannot

31
be powerless if it discovers that an academic degree it has conferred is not rightfully deserved. Nothing can be more
objectionable than bestowing a university's highest academic degree upon an individual who has obtained the same
through fraud or deceit. The pursuit of academic excellence is the university's concern. It should be empowered, as
an act of self-defense, to take measures to protect itself from serious threats to its integrity.

While it is true that the students are entitled to the right to pursue their education, the USC as an educational
institution is also entitled to pursue its academic freedom and in the process has the concomitant right to see to it
that this freedom is not jeopardized.128

It must be borne in mind that schools are established, not merely to develop the intellect and skills of the studentry,
but to inculcate lofty values, ideals and attitudes; nay, the development, or flowering if you will, of the total
man.129Essentially, education must ultimately be religious, i.e., one which inculcates duty and reverence.130 Under the
rubric of "right to education," students have a concomitant duty to learn under the rules laid down by the
school.131 Every citizen has a right to select a profession or, course of study, subject to fair, reasonable, and
equitable admission and academic requirements.132 The PMA is not different. As the primary training and educational
institution of the AFP, it certainly has the right to invoke academic freedom in the enforcement of its internal rules
and regulations, which are the Honor Code and the Honor System in particular.

The Honor Code is a set of basic and fundamental ethical and moral principle. It is the minimum standard for cadet
behavior and serves as the guiding spirit behind each cadet's action. It is the cadet's responsibility to maintain the
highest standard of honor. Throughout a cadet's stay in the PMA, he or she is absolutely bound thereto. It binds as
well the members of the Cadet Corps from its alumni or the member of the so-called "Long Gray Line."

Likewise, the Honor Code constitutes the foundation for the cadets' character development. It defines the desirable
values they must possess to remain part of the Corps; it develops the atmosphere of trust so essential in a military
organization; and it makes them professional military soldiers.133 As it is for character building, it should not only be
kept within the society of cadets. It is best adopted by the Cadet Corps with the end view of applying it outside as an
officer of the AFP and as a product of the PMA.134

The Honor Code and System could be justified as the primary means of achieving the cadets' character
development and as ways by which the Academy has chosen to identify those who are deficient in conduct.135 Upon
the Code rests the ethical standards of the Cadet Corps and it is also an institutional goal, ensuring that graduates
have strong character, unimpeachable integrity, and moral standards of the highest order.136 To emphasize, the
Academy's disciplinary system as a whole is characterized as "correctional and educational in nature rather than
being legalistic and punitive." Its purpose is to teach the cadets "to be prepared to accept full responsibility for all
that they do or fail to do and to place loyalty to the service above self-interest or loyalty to friends or associates.
"137Procedural safeguards in a student disciplinary case

Respondents stress that Guzman v. National University138 is more appropriate in determining the minimum standards
for the imposition of disciplinary sanctions in academic institutions. Similarly, with the guideposts set in Andrews,
they believe that Cadet 1 CL Cudia was accorded due process.

On the other hand, petitioners argue that the HC, the CRAB and the PMA fell short in observing the important
safeguards laid down in Ang Tibay v. CIR139 and Non v. Judge Dames II,140 which set the minimum standards to
satisfy the demands of procedural due process in the imposition of disciplinary sanctions. For them, Guzman did not
entirely do away with the due process requirements outlined in Ang Tibay as the Court merely stated that the
minimum requirements in the Guzman case are more apropos.

Respondents rightly argued.

Ateneo de Manila University v. Capulong141 already settled the issue as it held that although both Ang Tibay and
Guzman essentially deal with the requirements of due process, the latter case is more apropos since it specifically
deals with the minimum standards to be satisfied in the imposition of disciplinary sanctions in academic institutions.
That Guzman is the authority on the procedural rights of students in disciplinary cases was reaffirmed by the Court
in the fairly recent case of Go v. Colegio De San Juan De Letran.142

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In Guzman, the Court held that there are minimum standards which must be met to satisfy the demands of
procedural due process, to wit:

(1) the students must be informed in writing of the nature and cause of any accusation against them; (2) they shall
have the right to answer the charges against them, with the assistance of counsel, if desired; (3) they shall be
informed of the evidence against them; ( 4) they shall have the right to adduce evidence in their own behalf; and (5)
the evidence must be duly considered by the investigating committee or official designated by the school authorities
to hear and decide the case.143

We have been consistent in reminding that due process in disciplinary cases involving students does not entail
proceedings and hearings similar to those prescribed for actions and proceedings in courts of justice;144 that the
proceedings may be summary;145 that cross-examination is not an essential part of the investigation or hearing;146and
that the required proof in a student disciplinary action, which is an administrative case, is neither proof beyond
reasonable doubt nor preponderance of evidence but only substantial evidence or "such relevant evidence as a
reasonable mind might accept as adequate to support a conclusion."147

What is crucial is that official action must meet minimum standards of fairness to the individual, which generally
encompass the right of adequate notice and a meaningful opportunity to be heard.148 As held in De La Salle
University, Inc. v. Court of Appeals:149

Notice and hearing is the bulwark of administrative due process, the right to which is among the primary rights that
must be respected even in administrative proceedings. The essence of due process is simply an opportunity to be
heard, or as applied to administrative proceedings, an opportunity to explain one's side or an opportunity to seek
reconsideration of the action or ruling complained of. So long as the party is given the opportunity to advocate her
cause or defend her interest in due course, it cannot be said that there was denial of due process.

A formal trial-type hearing is not, at all times and in all instances, essential to due process - it is enough that the
parties are given a fair and reasonable opportunity to explain their respective sides of the controversy and to present
supporting evidence on which a fair decision can be based. "To be heard" does not only mean presentation of
testimonial evidence in court - one may also be heard through pleadings and where the opportunity to be heard
through pleadings is accorded, there is no denial of due process.150

The PMA Honor Code explicitly recognizes that an administrative proceeding conducted to investigate a cadet's
honor violation need not be clothed with the attributes of a judicial proceeding. It articulates that – The Spirit of the
Honor Code guides the Corps in identifying and assessing misconduct. While cadets are interested in legal
precedents in cases involving Honor violations, those who hold the Spirit of the Honor Code dare not look into these
precedents for loopholes to justify questionable acts and they are not to interpret the system to their own advantage.

The Spirit of the Honor Code is a way for the cadets to internalize Honor in a substantive way. Technical and
procedural misgivings of the legal systems may avert the true essence of imparting the Spirit of the Code for the
reason that it can be used to make unlawful attempt to get into the truth of matters especially when a cadet can be
compelled to surrender some civil rights and liberties in order for the Code and System to be implemented. By virtue
of being a cadet, a member of the CCAFP becomes a subject of the Honor Code and System. Cadet's actions are
bound by the existing norms that are logically applied through the Code and System in order to realize the
Academy's mission to produce leaders of character - men of integrity and honor.151

One of the fundamental principles of the Honor System also states:

2. The Honor System correlates with legal procedures of the state's Justice System but it does not demean its Spirit
by reducing the Code to a systematic list of externally observed rules. Where misinterpretations and loopholes arise
through legalism and its technicalities, the objective of building the character of the cadets becomes futile. While,
generally, Public Law penalizes only the faulty acts, the Honor System tries to examine both the action and the
intention.152

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Like in other institutions of higher learning, there is aversion towards undue judicialization of an administrative
hearing in the military academy. It has been said that the mission of the military is unique in the sense that its
primary business is to fight or be ready to fight wars should the occasion arise, and that over-proceduralizing military
determinations necessarily gives soldiers less time to accomplish this task.153 Extensive cadet investigations and
complex due process hearing could sacrifice simplicity, practicality, and timeliness. Investigations that last for
several days or weeks, sessions that become increasingly involved with legal and procedural' points, and legal
motions and evidentiary objections that are irrelevant and inconsequential tend to disrupt, delay, and confuse the
dismissal proceedings and make them unmanageable. Excessive delays cannot be tolerated since it is unfair to the
accused, to his or her fellow cadets, to the Academy, and, generally, to the Armed Forces. A good balance should,
therefore, be struck to achieve fairness, thoroughness, and efficiency.154 Considering that the case of Cadet 1 CL
Cudia is one of first impression in the sense that this Court has not previously dealt with the particular issue of a
dismissed cadet's right to due process, it is necessary for Us to refer to U.S. jurisprudence for some guidance.
Notably, our armed forces have been patterned after the U.S. Army and the U.S. military code produced a salutary
effect in the military justice system of the Philippines.155 Hence, pertinent case laws interpreting the U.S. military code
and practices have persuasive, if not the same, effect in this jurisdiction.

We begin by stating that U.S. courts have uniformly viewed that "due process" is a flexible concept, requiring
consideration in each case of a variety of circumstances and calling for such procedural protections as the particular
situation demands.156 Hagopian opined:

In approaching the question of what process is due before governmental action adversely affecting private interests
may properly be taken, it must be recognized that due process is not a rigid formula or simple rule of thumb to be
applied undeviatingly to any given set of facts. On the contrary, it is a flexible concept which depends upon the
balancing of various factors, including the nature of the private right or interest that is threatened, the extent to which
the proceeding is adversarial in character, the severity and consequences of any action that might be taken, the
burden that would be imposed by requiring use of all or part of the full panoply of trial-type procedures, and the
existence of other overriding interests, such as the necessity for prompt action in the conduct of crucial military
operations. The full context must therefore be considered in each case.157 (Emphasis supplied)

Wasson, which was cited by Hagopian, broadly outlined the minimum standards of due process required in the
dismissal of a cadet. Thus:

[W]hen the government affects the private interests of individuals, it may not proceed arbitrarily but must observe
due process of law. x x x Nevertheless, the flexibility which is inherent in the concept of due process of law
precludes the dogmatic application of specific rules developed in one context to entirely distinct forms of government
action. "For, though 'due process of law' generally implies and includes actor, reus, judex, regular allegations,
opportunity to answer, and a trial according to some settled course of judicial proceedings, * * * yet, this is not
universally true." x x x Thus, to determine in any given case what procedures due process requires, the court must
carefully determine and balance the nature of the private interest affected and of the government interest involved,
taking account of history and the precise circumstances surrounding the case at hand.

While the government must always have a legitimate concern with the subject matter before it may validly affect
private interests, in particularly vital and sensitive areas of government concern such as national security and
military affairs, the private interest must yield to a greater degree to the governmental. x x x Few decisions properly
rest so exclusively within the discretion of the appropriate government officials than the selection, training, discipline
and dismissal of the future officers of the military and Merchant Marine. Instilling and maintaining discipline and
morale in these young men who will be required to bear weighty responsibility in the face of adversity -- at times
extreme -- is a matter of substantial national importance scarcely within the competence of the judiciary. And it
cannot be doubted that because of these factors historically the military has been permitted greater freedom to
fashion its disciplinary procedures than the civilian authorities.

We conclude, therefore, that due process only requires for the dismissal of a Cadet from the Merchant Marine
Academy that he be given a fair hearing at which he is apprised of the charges against him and permitted a
defense. x x x For the guidance of the parties x x x the rudiments of a fair hearing in broad outline are plain. The
Cadet must be apprised of the specific charges against him. He must be given an adequate opportunity to present
his defense both from the point of view of time and the use of witnesses and other evidence. We do not suggest,
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however, that the Cadet must be given this opportunity both when demerits are awarded and when dismissal is
considered. The hearing may be procedurally informal and need not be adversarial.158 (Emphasis supplied)

In Andrews, the U.S. Court of Appeals held that Wasson and Hagopian are equally controlling in cases where
cadets were separated from the military academy for violation of the Honor Code. Following the two previous cases,
it was ruled that in order to be proper and immune from constitutional infirmity, a cadet who is sought to be
dismissed or separated from the academy must be afforded a hearing, be apprised of the specific charges against
him, and be given an adequate opportunity to present his or her defense both from the point of view of time and the
use of witnesses and other evidence.159 Conspicuously, these vital conditions are not too far from what We have
already set in Guzman and the subsequent rulings in Alcuaz v. Philippine School of Business Administration160 and
De La Salle University, Inc. v. Court of Appeals.161

In this case, the investigation of Cadet 1 CL Cudia' s Honor Code violation followed the prescribed procedure and
existing practices in the PMA. He was notified of the Honor Report from Maj. Hindang. He was then given the
opportunity to explain the report against him. He was informed about his options and the entire process that the
case would undergo. The preliminary investigation immediately followed after he replied and submitted a written
explanation. Upon its completion, the investigating team submitted a written report together with its recommendation
to the HC Chairman. The HC thereafter reviewed the findings and recommendations. When the honor case was
submitted for formal investigation, a new team was assigned to conduct the hearing. During the formal
investigation/hearing, he was informed of the charge against him and given the right to enter his plea. He had the
chance to explain his side, confront the witnesses against him, and present evidence in his behalf. After a thorough
discussion of the HC voting members, he was found to have violated the ' Honor Code. Thereafter, the guilty verdict
underwent the review process at the Academy level - from the OIC of the HC, to the SJA, to the Commandant of
Cadets, and to the PMA Superintendent. A separate investigation was also conducted by the HTG. Then, upon the
directive of the AFP-GHQ to reinvestigate the case, a review was conducted by the CRAB. Further, a Fact-Finding
Board/Investigation Body composed of the CRAB members and the PMA senior officers was constituted to conduct
a deliberate investigation of the case. Finally, he had the opportunity to appeal to the President. Sadly for him, all
had issued unfavorable rulings.

It is well settled that by reason of their special knowledge and expertise gained from the handling of specific matters
falling under their respective jurisdictions, the factual findings of administrative tribunals are ordinarily accorded
respect if not finality by the Court, unless such findings are not supported by evidence or vitiated by fraud, imposition
or collusion; where the procedure which led to the findings is irregular; when palpable errors are committed; or when
a grave abuse of discretion, arbitrariness, or capriciousness is manifest.162 In the case of Cadet 1 CL Cudia, We find
no reason to deviate from the general rule. The grounds therefor are discussed below seriatim:

As to the right to be represented by a counsel –

For petitioners, respondents must be compelled to give Cadet 1 CL Cudia the right to be represented by a counsel
who could actively participate in the proceedings like in the cross-examination of the witnesses against him before
the CRAB or HC, if remanded. This is because while the CRAB allowed him to be represented by a PAO lawyer, the
counsel was only made an observer without any right to intervene and demand respect of Cadet 1 CL Cudia's
rights.163 According to them, he was not sufficiently given the opportunity to seek a counsel and was not even asked
if he would like to have one. He was only properly represented when it was already nearing graduation day after his
family sought the assistance of the PAO. Petitioners assert that Guzman is specific in stating that the erring student
has the right to answer the charges against him or her with the assistance of counsel, if desired.

On the other hand, respondents cited Lumiqued v. Exevea164 and Nera v. The Auditor General165 in asserting that the
right to a counsel is not imperative in administrative investigations or non-criminal proceedings. Also, based on
Cadet lCL Cudia's academic standing, he is said to be obviously not untutored to fully understand his rights and
express himself. Moreover, the confidentiality of the HC proceedings worked against his right to be represented by a
counsel. In any event, respondents claim that Cadet 1 CL Cudia was not precluded from seeking a counsel's advice
in preparing his defense prior to the HC hearing.

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Essentially, petitioners claim .. that Cadet lCL Cudia is guaranteed the right to have his counsel not just in assisting
him in the preparation for the investigative hearing before the HC and the CRAB but in participating fully in said
hearings. The Court disagrees.

Consistent with Lumiqued and Nera, there is nothing in the 1987 Constitution stating that a party in a non-litigation
proceeding is entitled to be represented by counsel. The assistance of a lawyer, while desirable, is not
indispensable. Further, in Remolona v. Civil Service Commission,166 the Court held that "a party in an administrative
inquiry may or may not be assisted by counsel, irrespective of the nature of the charges and of the respondent's
capacity to represent himself, and no duty rests on such body to furnish the person being investigated with counsel."
Hence, the administrative body is under no duty to provide the person with counsel because assistance of counsel
is not an absolute requirement.

More in point is the opinion in Wasson, which We adopt. Thus:

The requirement of counsel as an ingredient of fairness is a function of all of the other aspects of the hearing. Where
the proceeding is non-criminal in nature, where the hearing is investigative and not adversarial and the government
does not proceed through counsel, where the individual concerned is mature and educated, where his knowledge of
the events x x x should enable him to develop the facts adequately through available sources, and where the other
aspects of the hearing taken as a whole are fair, due process does not require representation by counsel.167

To note, U.S. courts, in general, have declined to recognize a right to representation by counsel, as a function of
due process, in military academy disciplinary proceedings.168 This rule is principally motivated by the policy of
"treading lightly on the military domain, with scrupulous regard for the power and authority of the military
establishment to govern its own affairs within the broad confines of constitutional due process" and the courts' views
that disciplinary proceedings are not judicial in nature and should be kept informal, and that literate and educated
cadets should be able to defend themselves.169 In Hagopian, it was ruled that the importance of informality in the
proceeding militates against a requirement that the cadet be accorded the right to representation by counsel before
the Academic Board and that unlike the welfare recipient who lacks the training and education needed to
understand his rights and express himself, the cadet should be capable of doing so.170 In the subsequent case of
Wimmer v. Lehman,171 the issue was not access to counsel but the opportunity to have counsel, instead of oneself,
examine and cross-examine witnesses, make objections, and argue the case during the hearing. Disposing of the
case, the U.S. Court of Appeals for the Fourth Circuit was not persuaded by the argument that an individual of a
midshipman's presumed intelligence, selected because he is expected to be able to care for himself and others,
often under difficult circumstances, and who has full awareness of what he is facing, with counsel's advice, was
deprived of due process by being required to present his defense in person at an investigatory hearing.

In the case before Us, while the records are bereft of evidence that Cadet 1 CL Cudia was given the option or was
able to seek legal advice prior to and/or during the HC hearing, it is indubitable that he was assisted by a counsel, a
PAO lawyer to be exact, when the CRAB reviewed and reinvestigated the case. The requirement of due process is
already satisfied since, at the very least, the counsel aided him in the drafting and filing of the Appeal Memorandum
and even acted as an observer who had no right to actively participate in the proceedings (such as conducting the
cross-examination). Moreover, not to be missed out are the facts that the offense committed by Cadet 1 CL Cudia is
not criminal in nature; that the hearings before the HC and the CRAB were investigative and not adversarial; and
that Cadet lCL Cudia's excellent-academic standing puts him in the best position to look after his own vested
interest in the Academy.

As to the confidentiality of records of the proceedings –

Petitioners allege that when Maj. Gen. Lopez denied in his March 11, 2014 letter Cadet lCL Cudia's request for
documents, footages, and recordings relevant to the HC hearings, the vital evidence negating the regularity of the
HC trial and supporting his defense have been surely overlooked by the CRAB in its case review. Indeed, for them,
the answers on whether Cadet 1 CL Cudia was deprived of due process and whether he lied could easily be
unearthed from the video and other records of the HC investigation. Respondents did not deny their existence but
they refused to present them for the parties and the Court to peruse. In particular, they note that the Minutes of the
HC dated January 21, 2014 and the HC Formal Investigation Report dated January 20, 2014 were considered by
the CRAB but were not furnished to petitioners and the Court; hence, there is no way to confirm the truth of the
36
alleged statements therein. In their view, failure to furnish these documents could only mean that it would be
adverse if produced pursuant to Section 3 (e), Rule 131 of the Rules of Court.172

For lack of legal basis on PMA' s claim of confidentiality of records, petitioners contend that it is the ministerial duty
of the HC to submit to the CRAB, for the conduct of intelligent review of the case, all its records of the proceedings,
including video footages of the deliberations and voting. They likewise argue that PMA' s refusal to release relevant
documents to Cadet 1 CL Cudia under the guise of confidentiality reveals another misapplication of the Honor Code,
which merely provides: "A cadet who becomes part of any investigation is subject to the existing regulations
pertaining to rules of confidentiality and, therefore, must abide to the creed of secrecy. Nothing shall be disclosed
without proper guidance from those with authority" (IV. The Honor System, Honor Committee, Cadet Observer).
This provision, they say, does not deprive Cadet 1 CL Cudia of his right to obtain copies and examine relevant
documents pertaining to his case.

Basically, petitioners want Us to assume that the documents, footages, and recordings relevant to the HC hearings
are favorable to Cadet 1 CL Cudia's cause, and, consequently, to rule that respondents' refusal to produce and have
them examined is tantamount to the denial of his right to procedural due process. They are mistaken.

In this case, petitioners have not particularly identified any documents, witness testimony, or oral or written
presentation of facts submitted at the hearing that would support Cadet 1 CL Cudia's defense. The Court may
require that an administrative record be supplemented, but only "where there is a 'strong showing or bad faith or
improper behavior' on the part of the agency,"173 both of which are not present here. Petitioners have not specifically
indicated the nature of the concealed evidence, if any, and the reason for withholding it. What they did was simply
supposing that Cadet 1 CL Cudia's guilty verdict would be overturned with the production and examination of such
documents, footages, and recordings. As will be further shown in the discussions below, the requested matters,
even if denied, would not relieve Cadet 1 CL Cudia's predicament. If at all, such denial was a harmless procedural
error since he was not seriously prejudiced thereby.

As to the ostracism in the PMA –

To petitioners, the CRAB considered only biased testimonies and evidence because Special Order No. 1 issued on
February 21, 2014, which directed the ostracism of Cadet 1 CL Cudia, left him without any opportunity, to secure
statements of his own witnesses. He could not have access to or approach the cadets who were present during the
trial and who saw the 8-1 voting result. It is argued that the Order directing Cadet 1 CL Cudia's ostracism is of
doubtful legal validity because the Honor Code unequivocally announced: "x x x But by wholeheartedly dismissing
the cruel method of ostracizing Honor Code violators, PMA will not have to resort to other humiliating means and
shall only have the option to make known among its alumni the names of those who have not sincerely felt remorse
for violating the Honor Code."

On their part, respondents assert that neither the petition nor the petition-in-intervention attached a full text copy of
the alleged Special Order No. 1. In any case, attributing its issuance to PMA is improper and misplaced because of
petitioners' admission that ostracism has been absolutely dismissed as an Academy-sanctioned activity consistent
with the trend in International Humanitarian Law that the PMA has included in its curriculum. Assuming that said
Order was issued, respondents contend that it purely originated from the cadets themselves, the sole purpose of
which was to give a strong voice to the Cadet Corps by declaring that they did not tolerate Cadet 1 CL Cudia's
honor violation and breach of confindentiality of the HC proceedings.

More importantly, respondents add that it is highly improbable and unlikely that Cadet 1 CL Cudia was ostracized by
his fellow cadets. They manifest that as early as January 22, 2014, he was already transferred to the Holding
Center. The practice of billeting an accused cadet at the Holding Center is provided for in the Honor Code
Handbook. Although within the PMA compound, the Holding Center is off-limits to cadets who do not have any
business to conduct therein. The cadets could not also ostracize him during mess times since Cadet 1 CL Cudia
opted to take his meals at the Holding Center. The circumstances obtaining when Special Order No. 1 was issued
clearly foreclose the possibility that he was ostracized in common areas accessible to other cadets. He remained in
the Holding Center until March 16, 2014 when he voluntarily left the PMA. Contrary to his claim, guests were also
free to visit him in the Holding Center.

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However, petitioners swear that Cadet 1 CL Cudia suffered from ostracism in the PMA. The practice was somehow
recognized by respondents in their Consolidated Comment and by PMA Spokesperson Maj. Flores in a news report.
The CHR likewise confirmed the same in its Resolution dated May 22, 2014. For them, it does not matter where the
ostracism order originated from because the PMA appeared to sanction it even if it came from the cadets
themselves. There was a tacit approval of an illegal act. If not, those cadets responsible for ostracism would have
been charged by the PMA officials. Finally, it is claimed that Cadet 1 CL Cudia did not choose to take his meals at
the Holding Center as he was not allowed to leave the place. Petitioners opine that placing the accused cadet in the
Holding Center is inconsistent with his or her presumed innocence and certainly gives the implication of ostracism.

We agree with respondents. Neither the petition nor the petition-inintervention attached a full text copy or even a
pertinent portion of the alleged Special Order No. 1, which authorized the ostracism of Cadet 1 CL Cudia. Being
hearsay, its existence and contents are of doubtful veracity. Hence, a definite ruling on the matter can never be
granted in this case.

The Court cannot close its eyes though on what appears to be an admission of Cadet 1 CL Mogol during the CHR
hearing that, upon consultation with the entire class, the baron, and the Cadet Conduct Policy Board, they issued an
ostracism order against Cadet 1 CL Cudia.174 While not something new in a military academy,175 ostracism's
continued existence in the modem times should no longer be countenanced. There are those who argue that the
"silence" is a punishment resulting in the loss of private interests, primarily that of reputation, and that such penalty
may render illusory the possibility of vindication by the reviewing body once found guilty by the HC.176 Furthermore,
in Our mind, ostracism practically denies the accused cadet's protected rights to present witnesses or evidence in
his or her behalf and to be presumed innocent until finally proven otherwise in a proper proceeding.

As to Cadet 1 CL Cudia's stay in the Holding Center, the Court upholds the same. The Honor Code and Honor
System Handbook provides that, in case a cadet has been found guilty by the HC of violating the Honor Code and
has opted not to resign, he or she may stay and wait for the disposition of the case. In such event, the cadet is not
on full-duty status and shall be billeted at the HTG Holding Center.177 Similarly, in the U.S., the purpose of "Boarders
Ward" is to quarter those cadets who are undergoing separation actions. Permitted to attend classes, the cadet is
sequestered , therein until final disposition of the case. In Andrews, it was opined that the segregation of cadets in
the Ward was a proper exercise of the discretionary authority of Academy officials. It relied on the traditional
doctrine that "with respect to decisions made by Army authorities, 'orderly government requires us to tread lightly on
the military domain, with scrupulous regard for the power and authority of the military establishment to govern its
own affairs within the broad confines of constitutional due process.'" Also, in Birdwell v. Schlesinger,178 the
"administrative segregation" was held to be a reasonable exercise of military discipline and could not be considered
an invasion of the rights to freedom of speech and freedom of association.

Late and vague decisions –

It is claimed that Cadet 1 CL Cudia was kept in the dark as to the charge against him and the decisions arrived at by
the HC, the CRAB, and the PMA. No written decision was furnished to him, and if any, the information was unjustly
belated and the justifications for the decisions were vague. He had to constantly seek clarification and queries just to
be apprised of what he was confronted with.

Petitioners relate that upon being informed of the "guilty" verdict, Cadet 1 CL Cudia immediately inquired as to the
grounds therefor, but Cadet 1 CL Mogol answered that it is confidential since he would still appeal the same. By
March 11, 2014, Maj. Gen. Lopez informed Cadet 1 CL Cudia that the CRAB already forwarded their
recommendation for his dismissal to the General Headquarters sometime in February-March 2014. Even then, he
received no decision/recommendation on his case, verbally or in writing. The PMA commencement exercises
pushed through with no written decision from the CRAB or the PMA on his appeal. The letter from the Office of the
Adjutant General of the AFP was suspiciously delayed when the Cudia family received the same only on March 20,
2014. Moreover, it fell short in laying down with specificity the factual and legal bases used by the CRAB and even
by the Office of the Adjutant General. There remains no proof that the CRAB and the PMA considered the evidence
presented by Cadet 1 CL Cudia, it being uncertain as to what evidence was weighed by the CRAB, whether the
same is substantial, and whether the new evidence submitted by him was ever taken into account.

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In refutation, respondents allege the existence of PMA's· practice of orally declaring the HC finding, not putting it in
a written document so as to protect the integrity of the erring cadet and guard the confidentiality of the HC
proceedings pursuant to the Honor System. Further, they aver that a copy of the report of the CRAB, dated March
10, 2014, was not furnished to Cadet 1 CL Cudia because it was his parents who filed the appeal, hence, were the
ones who were given a copy thereof.

Petitioners' contentions have no leg to stand on. While there is a constitutional mandate stating that "[no] decision
shall be rendered by any court without expressing therein clearly and distinctly the facts and the law on which it is
based,"179 such provision does not apply in Cadet 1 CL Cudia's case. Neither Guzman nor Andrews require a
specific form and content of a decision issued in disciplinary proceedings. The Honor Code and Honor System
Handbook also has no written rule on the matter. Even if the provision applies, nowhere does it demand that a point-
by-point consideration and resolution of the issues raised by the parties are necessary.180 What counts is that, albeit
furnished to him late, Cadet 1 CL Cudia was informed of how it was decided, with an explanation of the factual and
legal reasons that led to the conclusions of the reviewing body, assuring that it went through the processes of legal
reasoning. He was not left in the dark as to how it was reached and he knows exactly the reasons why he lost, and
is able to pinpoint the possible errors for review.

As to the blind adoption of the HC findings –

Petitioners assert that, conformably with Sections 30 and 31 of C.A. No. 1, only President Aquino as the
Commander-in-Chief has the power to appoint and remove a cadet for a valid/legal cause. The law gives no
authority to the HC as the sole body to determine the guilt or innocence of a cadet. It also does not empower the
PMA to adopt the guilty findings of the HC as a basis for recommending the cadet's dismissal. In the case of Cadet
1 CL Cudia, it is claimed that the PMA blindly followed the HC's finding of guilt in terminating his military service.

Further, it is the ministerial duty of the CRAB to conduct a review de nova of all records without requiring Cadet 1 CL
Cudia to submit new evidence if it is physically impossible for him to do so. In their minds, respondents cannot claim
that the CRAB and the PMA thoroughly reviewed the HC recommendation and heard Cadet lCL Cudia's side. As
clearly stated in the letter from the Office of the AFP Adjutant General, "[in] its report dated March 10, 2014, PMA
CRAB sustained the findings and recommendations of the Honor Committee x x x It also resolved the appeal filed
by the subject Cadet." However, the Final Investigation Report of the CRAB was dated March 23, 2014. While such
report states that a report was submitted to the AFP General Headquarters on March 10, 2014 and that it was only
on March 12, 2014 that it was designated as a Fact-Finding Board/Investigating Body, it is unusual that the CRAB
would do the same things twice. This raised a valid and well-grounded suspicion that the CRAB never undertook an
in-depth investigation/review the first time it came out with its report, and the Final Investigation Report was drafted
merely as an afterthought when the lack of written decision was pointed out by petitioners so as to remedy the
apparent lack of due process during the CRAB investigation and review.

Despite the arguments, respondents assure that there was a proper assessment of the procedural and legal
correctness of the guilty verdict against Cadet 1 CL Cudia. They assert that the higher authorities of the PMA did not
merely rely on the findings of the HC, noting that there was also a separate investigation conducted by the HTG
from January 25 to February 7, 2014. Likewise, contrary to the contention of petitioners that the CRAB continued
with the review of the case despite the absence of necessary documents, the CRAB conducted its own review of the
case and even conducted another investigation by constituting the Fact-Finding Board/Investigating Body. For
respondents, petitioners failed to discharge the burden of proof in showing bad faith on the part of the PMA. In the
absence of evidence to the contrary and considering further that petitioners' allegations are merely self-serving and
baseless, good faith on the part of the PMA' s higher authorities is presumed and should, therefore, prevail.

We agree with respondents.

The Honor Committee, acting on behalf of the Cadet Corps, has a limited role of investigating and determining
whether or not the alleged offender has actually violated the Honor Code.181 It is given the responsibility of
administering the Honor Code and, in case of breach, its task is entirely investigative, examining in the first instance
a suspected violation. As a means of encouraging self-discipline, without ceding to it any authority to make final
adjudications, the Academy has assigned it the function of identifying suspected violators.182 Contrary to petitioners'
assertion, the HC does not have the authority to order the separation of a cadet from the Academy. The results of its
39
proceedings are purely recommendatory and have no binding effect. The HC determination is somewhat like an
indictment, an allegation, which, in Cadet 1 CL Cudia's case, the PMA-CRAB investigated de novo.183 In the U.S., it
was even opined that due process safeguards do not actually apply at the Honor Committee level because it is only
a "charging body whose decisions had no effect other than to initiate de nova proceedings before a Board of
Officers."184

Granting, for argument's sake, that the HC is covered by the due process clause and that irregularities in its
proceedings were in fact committed, still, We cannot rule for petitioners. It is not required that procedural due
process be afforded at every stage of developing disciplinary action. What is required is that an adequate hearing be
held before the final act of dismissing a cadet from the military academy.185 In the case of Cadet 1 CL Cudia, the OIC
of HC, the SJA, the Commandant of Cadets, and the PMA Superintendent reviewed the HC findings. A separate
investigation was also conducted by the HTG. Then, upon the directive of the AFP-GHQ to reinvestigate the case, a
review was conducted by the CRAB. Finally, a Fact-Finding Board/Investigating Body composed of the CRAB
members and the PMA senior officers was constituted to conduct a deliberate investigation of the case. The
Board/Body actually held hearings on March 12, 13, 14 and 20, 2014. Instead of commendation, petitioners find it
"unusual" that the CRAB would do the same things twice and suspect that it never undertook an in-depth
investigation/review the first time it came out with its report. Such assertion is mere conjecture that deserves scant
consideration.

As to the dismissal proceedings as sham trial –

According to petitioners, the proceedings before the HC were a sham. The people behind Cadet ICL Cudia's
charge, investigation, and conviction were actually the ones who had the intent to deceive and who took advantage
of the situation. Cadet 1 CL Raguindin, who was a senior HC member and was the second in rank to Cadet 1 CL
Cudia in the Navy cadet 1 CL, was part of the team which conducted the preliminary investigation. Also, Cadet I CL
Mogol, the HC Chairman, previously charged Cadet 1 CL Cudia with honor violation allegedly for cheating
(particularly, conniving with and tutoring his fellow cadets on a difficult topic by giving solutions to a retake exam) but
the charge was dismissed for lack of merit. Even if he was a non-voting member, he was in a position of influence
and authority. Thus, it would be a futile exercise for Cadet 1 CL Cudia to resort to the procedure for the removal of
HC members.186

Further, no sufficient prior notice of the scheduled CRAB hearing was given to Cadet I CL Cudia, his family, or his
PAO counsel. During one of her visits to him in the Holding Center, petitioner-intervenor was advised to convince his
son to resign and immediately leave the PMA. Brig. Gen. Costales, who later became the CRAB Head, also
categorically uttered to Annavee: "Your brother, he lied!" The CRAB conferences were merely used to formalize his
dismissal and the PMA never really intended to hear his side. For petitioners, these are manifestations of PMA's
clear resolve to dismiss him no matter what.

For their part, respondents contend that the CllR's allegation that Maj. Hindang acted in obvious bad faith and that
he failed to discharge his duty to be a good father of cadets when he "paved the road to [Cadet 1 CL Cudia's] sham
trial by the Honor Committee" is an unfounded accusation. They note that when Maj. Hindang was given the DR of
Cadet 1 CL Cudia, he revoked the penalty awarded because of his explanation. However, all revocations of
awarded penalties are subject to the review of the STO. Therefore, it was at the instance of Maj. Leander and the
established procedure followed at the PMA that Maj. Hindang was prompted to investigate the circumstances
surrounding Cadet 1 CL Cudia's tardiness. Respondents add that bad faith cannot likewise be imputed against Maj.
Hindang by referring to the actions taken by Maj. Jekyll Dulawan, the CTO of Cadets 1 CL Narciso and Arcangel
who also arrived late for their next class. Unlike the other cadets, Cadet 1 CL Cudia did not admit his being late and
effectively evaded responsibility by ascribing his tardiness to Dr. Costales.

As to the CHR' s finding that Cadet 1 CL Mogol was likewise "in bad faith and determined to destroy [Cadet 1 CL]
Cudia, for reasons of his own" because the former previously reported the latter for an honor violation in November
2013, respondents argue that the bias ascribed against him is groundless as there is failure to note that Cadet 1 CL
Mogol was a non-voting member of the HC. Further, he cannot be faulted for reporting a possible honor violation
since he is the HC Chairman and nothing less is expected of him. Respondents emphasize that the representatives
of the HC are elected from each company, while the HC Chairman is elected by secret ballot from the incoming first

40
class representatives. Thus, if Cadet 1 CL Cu'dia believed that there was bias against him, he should have resorted
to the procedure for the removal of HC members provided for in the Honor Code Handbook.

Finally, respondents declare that there is no reason or ill-motive on the part of the PMA to prevent Cadet 1 CL Cudia
from graduating because the Academy does not stand to gain anything from his dismissal. On the contrary, in view
of his academic standing, the separation militates against PMA' s mission to produce outstanding, honorable, and
exceptional cadets.

The Court differs with petitioners.

Partiality, like fraudulent intent, can never be presumed. Absent some showing of actual bias, petitioners' allegations
do not hold water. The mere imputation of ill-motive without proof is speculative at best. Kolesa teaches us that to
sustain the challenge, specific evidence must be presented to overcome

a presumption of honesty and integrity in those serving as adjudicators; and it must convince that, under a realistic
appraisal of psychological tendencies and human weaknesses, conferring investigative and adjudicative powers on
the same individual poses such a risk of actual bias or prejudgment that the practice must be forbidden if the
guarantee of due process is to be implemented.187

Although a CTO like Maj. Hindang must decide whether demerits are to be awarded, he is not an adversary of the
cadet but an educator who shares an identity of interest with the cadet, whom he counsels from time to time as a
future leader.188 When the occasion calls for it, cadets may be questioned as to the accuracy or completeness of a
submitted work. A particular point or issue may be clarified. In this case, the question asked of Cadet 1 CL Cudia
concerning his being late in class is proper, since there is evidence indicating that a breach of regulation may have
occurred and there is reasonable cause to believe that he was involved in the breach of regulations.189

For lack of actual proof of bad faith or ill-motive, the Court shall rely on the non-toleration clause of the Honor Code,
i.e., "We do not tolerate those who violate the Code." Cadets are reminded that they are charged with a tremendous
duty far more superior to their personal feeling or friendship.190 They must learn to help others by guiding them to
accept the truth and do what is right, rather than tolerating actions against truth and justice.191 Likewise, cadets are
presumed to be characteristically honorable; they cannot overlook or arbitrarily ignore the dishonorable action of
their peers, seniors, or subordinates.192 These are what Cadet 1 CL Mogol exactly did, although he was later proven
to have erred in his accusation. Note that even the Honor Code and Honor System Handbook recognizes that
interpretation of one's honor is generally subjective.193

Moreover, assuming, for the sake of argument, that Cadets 1 CL' Raguindin and Mogol as well as Brig. Gen.
Costales have an axe to grind against Cadet 1 CL Cudia and were bent on causing, no matter what, the latter's
downfall, their nefarious conduct would still be insignificant. This is so since the HC (both the preliminary and formal
investigation), the CRAB, and the Fact-Finding Board/Investigating Body are collegial bodies. Hence, the claim that
the proceedings/hearings conducted were merely a farce because the three personalities participated therein is
tantamount to implying the existence of a conspiracy, distrusting the competence, independence, and integrity of the
other members who constituted the majority. Again, in the absence of specifics and substantial evidence, the Court
cannot easily give credence to this baseless insinuation.

As to the HC executive session/chambering –

Petitioners narrate that there was an irregular administrative hearing in the case of Cadet 1 CL Cudia because two
voting rounds took place. After the result of the secret balloting, Cadet 1 CL Mogol ordered the voting members to
go to a room without the cadet recorders. Therein, the lone dissenter, Cadet lCL Lagura, was asked to explain his
"not guilty" vote. Pressured to change his vote, he was made to cast a new one finding Cadet 1 CL Cudia guilty. The
original ballot was discarded and replaced. There was no record of the change in vote from 8-1 to 9-0 that was
mentioned in the HC formal report.

41
The Affidavit of Commander Junjie B. Tabuada executed on March 6, 2014 was submitted by petitioners since he
purportedly recalled Cadet 1 CL Lagura telling him that he was pressured to change his "not guilty" vote after the
voting members were "chambered." In the sworn statement, Commander Tabuada said:

1. That after CDT lCL CUDIA [was] convicted for honor violation, I [cannot] remember exactly the date but
sometime in the morning of 23rd or 24th of January 2014, I was in my office filling up forms for the renewal
of my passport, CDT 1CL LAGURA entered and had business with my staff;

2. When he was about to leave I called him. "Lags, halika muna dito," and he approached me and I let him
sit down on the chair in front of my table. I told and asked him, "Talagang nadali si Cudia ah ... ano ha ang
nangyari? Mag-Tagalog or mag-Bisaya ka." He replied, "Talagang NOT GUILTY ang vote ko sa kanya sir",
and I asked him, "Oh, bakit naging guilty di ha pag may isang nag NOT GUILTY, abswelto na? He replied
"Chinamber ako sir, bale pinapa-justify kung bakit NOT GUILTY vote ko, at na-pressure din ako sir kaya
binago ko, sir." So, I told him, "Sayang sya, matalino at mabait pa naman" and he replied "oo nga sir". After
that conversation, I let him go.194

It is claimed that the HC gravely abused its discretion when it committed voting manipulation since, under the rules,
it is required to have a unanimous nine (9) votes finding an accused cadet guilty. There is nothing in the procedure
that permits the HC Chairman to order the "chambering" of a member who voted contrary to the majority and
subjects him or her to reconsider in order to reflect a unanimous vote. Neither is there an order from the Chief of
Staff or the President sanctioning the HC procedure or approving any change therein pursuant to Sections 30 and
31 of C.A. No. 1. The HC, the CRAB, and the PMA violated their own rules and principles as embodied in the Honor
Code. Being a clear deviation from the established procedures, the second deliberation should be considered null
and void.

Petitioners further contend that the requirement of unanimous vote involves a substantive right which cannot be
unceremoniously changed without a corresponding amendment/revision in the Honor Code and Honor System
Handbook. In their view, "chambering" totally defeats the purpose of voting by secret ballot as it glaringly destroys
the very essence and philosophy behind the provisions of the Honor System, which is to ensure that the voting
member is free to vote what is in his or her heart and mind and that no one can pressure or persuade another to
change his or her vote. They suggest that if one voting member acquits an accused cadet who is obviously guilty of
the offense, the solution is to remove him or her from the HC through the vote of non-confidence as provided for in
the Honor Code.195 Anent the above arguments, respondents contend that a distinction must be made between the
concepts of the Honor Code and the Honor System. According to them, the former sets the standard for a cadet's,
minimum ethical and moral behavior and does not change, while the latter is a set of rules for the conduct of the
observance and implementation of the· Honor Code and may undergo necessary adjustments as may be warranted
by the incumbent members of the HC in order to be more responsive to the moral training and character
development of the cadets. The HC may provide guidelines when the Honor System can be used to supplement
regulations. This being so, the voting process is continuously subject to change.

Respondents note that, historically, a non-unanimous guilty verdict automatically acquits a cadet from the charge of
Honor violation. The voting members only write either "guilty" or "not guilty" in the voting sheets without stating their
name or their justification. However, this situation drew criticisms since there were instances where a reported cadet
already admitted his honor violation but was acquitted due to the lone vote of a sympathetic voting member.

In the case of Cadet 1 CL Cudia, the HC adopted an existing practice that should the voting result in 7-2 or 8-1 the
HC would automatically sanction a jury type of discussion called "executive session" or "chambering," which is
intended to elicit the explanation and insights of the voting member/s. This prevents the tyranny of the minority or
lone dissenter from prevailing over the manifest proof of guilt. The assailed voting practice has been adopted and
widely accepted by the PMA Siklab Diwa Class of 2014 since their first year in the Academy. The allegations of
conspiracy and sham trial are, therefore, negated by the fact that such practice was in place and applied to all cases
of honor violations, not solely to the case of Cadet 1CL Cudia.

It is emphasized by respondents that any decision to change vote rests solely on the personal conviction of the
dissenter/s, without any compulsion from the other voting members. There can also be no pressuring to change

42
one's vote to speak of since a vote may only be considered as final when the Presiding Officer has affixed his
signature.

To debunk Commander Tabuada's statements, respondents raise the argument that the Fact-Finding
Board/Investigating Body summoned Cadet 1 CL Lagura for inquiry. Aside from his oral testimony made under oath,
he submitted to the Board/Body an affidavit explaining that:

11. Sometime on 23rd or 24th of January 2014, I went to the Department of Naval Warfare to ask permission if it is
possible not to attend the Navy duty for the reason that I will be attending our baseball game outside the Academy.

12. After I was permitted not to attend my Navy Duty and when I was about to exit out of the Office, CDR JUNJIE B
T ABU ADA PN, our Head Department Naval Warfare Officer, called my attention. I approached him and he said:
"Talagang nadali si Cudia ah. Ano ba talaga ang nangyari?" At first, I was hesitant to answer because of the
confidentiality of the Honor Committee proceedings. He again said: "Wag kang mag-alala, atin, atin lang ito, alam ko
naman na bawal magsabi." Then I answered: "Ako yung isang not guilty Sir. Kaya [yung] Presiding Officer nagsabi
na pumunta muna kami sa Chamber. Nung nasa chamber kami, nagsalita [yung] mga nagvote ng Guilty tapos isa-
isa nagsabi kung bakit ang boto nila Guilty. Nung pakinggan ko, eh naliwanagan ako. Pinalitan ko yung boto ko from
Not Guilty to Guilty Sir." He replied: "Sayang si Cudia ano?" And I said: "Oo nga sir, [s]ayang si Cudia, mabait pa
naman at matalino."196

Cadet 1 CL Lagura restated the above in the Counter-Affidavit executed on March 12, 2014, which he submitted
before the CHR wherein he attested to the following:

3. I was chosen to be a voting member of the Honor Committee for Honor Code violation committed by
Cadet Cudia, for "lying". As a voting member, we are the one who assess or investigate the case whether
the reported Cadet is Guilty for his actions or not.

4. I was the only one who INITIALLY voted "NOT GUILTY" among the nine (9) voting members of the Honor
Committee in the case of Cdt Cudia for Lying.

5. I initially voted "NOT GUILTY" for the reason that after the proceedings and before the presiding Officer
told the members to vote, I was confused of the case of Cadet Cudia. I have gathered some facts from the
investigation to make my decision but for me it is not yet enough to give my verdict of guilty to Cdt Cudia so I
decided to vote "NOT GUILTY" with a reservation in my mind that we will still be discussing our verdicts if
we will arrive at 8-1 or 7-2. Thus, I can still change my vote if I may be enlightened with the other's
justifications.

6. After the votes were collected, the Presiding Officer told us that the vote is 8 for guilty and 1 for not guilty.
By way of practice and as I predicted, we were told to go inside the anteroom for executive meeting and to
discuss our respective justifications. I have been a member for two (2) years and the voting committee will
always go for executive meeting whenever it will meet 8-1 or 7-2 votes.

7. I listened to them and they listened to me, then I saw things that enlightened my confusions that time. I
gave a thumbs-up sign and asked for another sheet of voting paper. I then changed my vote from "NOT
GUILTY" to "GUILTY" and the voting members of the Honor Committee came up with the final vote of nine
(9) votes for guilty and zero (0) votes for not guilty.

9. Cdt Cudia was called inside the courtroom and told that the verdict was GUILTY of LYING. After that, all
persons inside the courtroom went back to barracks.

10. Right after I changed to sleeping uniform, I was approached by Cdt Jocson and Cdt Cudia, inquiring and
said: "Bakit ka naman nagpalit ng boto? ., I answered: "Nasa process yan, may mali talaga sa rason mo."
They also asked who were inside the Chamber and I mentioned only Cdt Arlegui and Cdt Mogol. That was
the last time that Cdt Cudia and Cdt Jocson talked to me.

43
11. Sometime on 23rd or 24th of January 2014, I went to the Department of Naval Warfare to asked (sic)
permission if it is possible not to attend the Navy duty for the reason that I will be attending our baseball
game outside the Academy.

12. After I was permitted not to attend my Navy Duty and when I was about to exit out of the Office, CDR
JUNJIE B TABUADA PN, our Head Department Naval Warfare Officer, called my attention. I approached
him and he said: "Talagang nadali si Cudia ah. Ano ba talaga ang nangyari?" At first, I was hesitant to
answer because of the confidentiality of the Honor Committee proceedings. He again said: "Wag kang mag-
alala, atin, atin lang ito, alam ko naman na bawal magsabi. " Then I answered: "Ako yung isang not guilty
Sir. Kaya [yung} Presiding Officer nagsabi na pumunta muna kami sa Chamher. Nung nasa chamber kami,
nagsalita [yung] mga nagvote ng Guilty tapos isa-isa nagsabi kung bakit ang boto nila Guilty. Nung
pakinggan ko, eh naliwanagan aka. Pinalitan ko yung boto ko from Not Guilty to Guilty Sir. " He replied:
"Sayang si Cudia ano?" And I said: "Oo nga sir, [s]ayang si Cudia, mabait pa naman at matalino. "197

Still not to be outdone, petitioners argue that the very fact that Cadet 1 CL Lagura, as the lone dissenter, was made
to explain in the presence of other HC members, who were in disagreement with him, gives a semblance of
intimidation, force, or pressure. For them, the records of the HC proceedings, which were not presented assuming
they actually exist, could have been the best way to ensure that he was free to express his views, reject the opinion
of the majority, and stick to his decision. Also, it was pointed out that Cadet 1 CL Lagura failed to clearly explain in
his affidavit why he initially found Cadet 1 CL Cudia "not guilty" and what made him change his mind. His use of
general statements like he "was confused of the case " and "saw things that enlightened my confusions " could
hardly suffice to establish why he changed his vote. Finally, petitioners note the admission of ·Cadet 1 CL Lagura
during the CHR investigation that he was the only one who was given another ballot sheet while in the chamber and
that he accomplished it in the barracks which he only submitted the following day. However, as the CHR found, the
announcement of the 9-0 vote was done immediately after the HC came out from the chamber and before Cadet 1
CL Lagura submitted his accomplished ballot sheet.

We rule for respondents.

As to the manner of voting by the HC members, the Honor Code tersely provides:

After a thorough discussion and deliberation, the presiding member of the Board will call for the members to vote
whether the accused is GUILTY or NOT GUILTY. A unanimous vote (9 votes) of GUILTY decides that a cadet is
found guilty of violating the Honor Code.198

From the above-quoted provision, it readily appears that the HC practice of conducting "executive session" or
"chambering" is not at all prohibited. The HC is given leeway on the voting procedures in' actual cases taking into
account the exigency of the times. What is important is that, in the end, there must be a unanimous nine votes in
order to hold a cadet guilty of violating the Honor Code.

Granting, for argument's sake, that the HC violated its written procedure,199 We still rule that there is nothing
inherently wrong with the practice of "chambering" considering that the presence of intimidation or force cannot
automatically be inferred therefrom. The essence of secret balloting and the freedom to vote based on what is in the
heart and mind of the voting member is not necessarily diluted by the fact that a second/final voting was conducted.
As explained by Cadet 1CL Mogol before the CRAB:

13. x x x [The] dissenting voter would have to explain his side and insights regarding the case at hand. The other
members, on the other hand, would be given the chance to explain their votes as well as their insights to the
dissenting voter. The decision to change the vote of the dissenting voter rests solely on his personal conviction.
Thus, if he [or she] opted not to change his/her vote despite the discussion, his [or her] vote is accorded respect by
the Honor Committee.200

It is elementary that intimidation or force is never presumed. Mere allegation is definitely not evidence. It must be
1âwphi1

substantiated and proved because a person is presumed to be innocent of a crime or wrong and that official duty
has been regularly performed.201

44
The oral and written statements of Cadet 1 CL Lagura should settle the issue. Before the Fact-Finding
Board/Investigating Body and the CHR, he consistently denied that he was pressured by the other voting members
of the HC. His representation must be accepted as it is regardless of whether he has satisfactorily elaborated his
decision to change his vote. Being the one who was "chambered," he is more credible to clarify the issue. In case of
doubt, We have to rely on the faith that Cadet 1 CL Lagura observed the Honor Code, which clearly states that
every cadet must be his or her own Final' Authority in honor; that he or she should not let other cadets dictate on
him or her their sense of honor.202 Moreover, the Code implies that any person can have confidence that a cadet and
any graduate of the PMA will be fair and just in dealing with him; that his actions, words and ways are sincere and
true.203

As to the other alleged "irregularities" committed such as not putting on record the initial/first voting and Cadet 1CL
Lagura's bringing of his ballot sheet to and accomplishing it in the barracks, the Court shall no longer dwell on the
same for being harmless procedural errors that do not materially affect the validity of the HC proceedings.

Cadet 1 CL Cudia 's alleged untruthful statements

Petitioners insist that Cadet 1 CL Cudia did not lie. According to them, there is no clear time reference as to when
was the actual dismissal or what was the exact time of dismissal - whether it should be the dismissal inside the room
or the dismissal after the section grade was given by Dr. Costales -in the minds of Cadet 1 CL Cudia, Maj. Hindang,
and the HC investigators and voting members. They claim that during long examinations, the time of dismissal was
usually five minutes before the class was set to end and the protocol of dismissing the class 15 minutes earlier was
not observed. When Maj. Hindang stated in accusatory language that Cadet 1 CL Cudia perverted the truth by
stating that OR432 class ended at 1500H, he did not state what was the true time of dismissal. He did not mention
whether the truth he was relying on was 5 or 15 minutes before the scheduled end of class.

It is also averred that Cadet 1 CL Cudia's only business was to ask Dr. Costales a query such that his business was
already finished as soon as she gave an answer. However, a new business was initiated by Dr. Costales, which is,
Cadet 1 CL Cudia must stay and wait for the section grade. At that point in time, he was no longer in control of the
circumstances. Petitioners claim that Dr. Costales never categorically stated that Cadet lCL Cudia was lying. She
recognized the confusion. Her text messages to him clarified his alleged violation. Also, the CHR noted during its
investigation that she could not exactly recall what happened in her class on November 14, 2013.

Furthermore, petitioners reasoned out that when respondents stated that ENG412 class started at 3:05 p.m., it
proves that Cadet 1 CL Cudia was obviously not late. If, as indicated in his Delinquency Report, he was late two (2)
minutes in his 1500-1600H class in ENG 412, he must have arrived 3:02 p.m. Respondents, however, claim that the
class started at 3:05 p.m. Thus, Cadet 1 CL Cudia was not late.

Relative to his explanation to the delinquency report, petitioners were of the view that what appears to have caused
confusion in the minds of respondents is just a matter of semantics; that the entire incident was a product of
inaccuracy, not lying. It is malicious for them to insinuate that Cadet 1 CL Cudia purposely used incorrect language
to hide the truth. Citing Merriam Webster's Dictionary, petitioners argue that "dismiss" means to permit or cause to
leave, while "class" refers to a body of students meeting regularly to study the same subject. According to them,
these two words do not have definite and precise meanings but are generic terms. Other than the words "class" and
"dismiss" used by Cadet 1 CL Cudia, which may actually be used in their generic sense, there is nothing deceiving
about what he said. Thus, the answer he chose might be wrong or not correct, but it is not false or not true.

For petitioners, Cadet lCL Cudia's explanations are evidently truthful and with no intent to deceive or mislead. He
did not manipulate any fact and was truthful of his explanation. His .. statements were clear and unambiguous but
were given a narrow-minded interpretation. Even the Honor Code acknowledges that "[e]xperience demonstrates
that human communication is imperfect at best, and some actions are often misinterpreted."

Lastly, petitioners contend that Cadet 1 CL Cudia's transcript of records reflects not only his outstanding academic
performance but proves his good conduct during his four-year stay in the Academy. He has above-average grades
in Conduct, with grades ranging from 96 to 100 in Conduct I to XI. His propensity to lie is, therefore, far from the
truth.

45
On the other hand, respondents were equally adamant to contend that Cadet 1 CL Cudia was obviously quibbling,
which, in the military parlance, is tantamount to lying. He fell short in telling a simple truth. He lied by making
untruthful statements in his written explanation. Respondents want Us to consider the following:

First, their OR432 class was not dismissed late. During the formal investigation, Dr. Costales testified that a class is
dismissed as long as the instructor is not there and the bell has rung. In cases of lesson examinations (LE), cadets
are dismissed from the time they have answered their respective LEs. Here, as Cadet Cudia stated in his Request
for Reconsideration of Meted Punishment, "We had an LE that day (14 November 2013) in OR432 class. When the
first bell rang (1455), I stood up, reviewed my paper and submitted it to my instructor, Ms. Costales. xxx" Clearly, at
the time Cadet Cudia submitted his papers, he was already considered dismissed. Thus, he cannot claim that his
[OR432] class ended at 3:00 in the afternoon (1500H) or "a bit late."

Second, Cadet Cudia was in control of the circumstances leading to his tardiness. After submitting his paper, Cadet
Cudia is free to leave and attend his next class. However, he initiated a conversation with Dr. Costales regarding
their grades. He was not under instruction by Dr. Costales to stay beyond the period of her class.

Furthermore, during the investigation of the Fact-Finding Board/Investigating Body, Dr. Costales clarified her
statements in her written explanation. She explained that the "instruction to wait" is a response to Cadet Cudia' s
request and that it was not her initiated instruction. Clearly, there was no directive from Dr. Costales for Cadet Cudia
and the other cadets to stay. On the contrary, it was them who wanted to meet with the instructor. Third, contrary to
Cadet Cudia's explanation, his subsequent class, ENG412, did not exactly start at 3:00 in the afternoon (1500H). In
the informal review conducted by the HTG to check the findings of the HC, Professor Berong confirmed that her
English class started as scheduled (3:05 in the afternoon, or 1505H) and not earlier. Cadet 1 CL Barrawed, the
acting class marcher of ENG412 also testified that their class started as scheduled (3 :05 in the afternoon, or 1505)
and not earlier.204

Respondents were unimpressed with the excuse that Cadet 1 CL Cudia had no intention to mislead or deceive but
merely used wrong and unfitting words in his explanations. For them, considering his academic standing, it is highly
improbable that he used incorrect language to justify his mistake. Respondents' arguments are tenable.

The issue of whether Cadet 1 CL Cudia committed lying is an issue of fact. Unfortunately for petitioners, the Court,
not being a trier of facts, cannot pass upon factual matters as it is not duty-bound to analyze and weigh again the
evidence considered in the proceedings below. Moreover, We reiterate the long standing rule that factual findings of
administrative tribunals are ordinarily accorded respect if not finality by the Court. In this case, as shown in the
previous discussions, there is no evidence that the findings of the investigating and reviewing bodies below are not
supported by evidence or vitiated by fraud, imposition or collusion; that the procedure which led to the findings is
irregular; that palpable errors were committed; or that a grave abuse of discretion, arbitrariness, or capriciousness is
manifest. With respect to the core issue of whether lying is present in this case, all investigating and reviewing
bodies are in consonance in holding that Cadet 1 CL Cudia in truth and in fact lied.

For purposes of emphasis though, We shall supplement some points.

As succinctly worded, the Honor Code of the Cadet Corps Armed Forces of the Philippines (CCAFP) states: "We,
the Cadets, do not lie, cheat, steal, nor tolerate among us those who do. "

The First Tenet of the Honor-Code is "We do not lie. " Cadets violate the Honor Code by lying if they make an oral
or written statement which is contrary to what is true or use doubtful information with the intent to deceive or
mislead.205 It is expected that every cadet's word is accepted without challenge on its truthfulness; that it is true
without qualification; and that the cadets must answer directly, completely and truthfully even though the answer
may result in punitive action under the CCPB and CCAFPR.206

To refresh, in his Explanation of Report dated December 8, 2013, Cadet 1 CL Cudia justified that: "I came directly
from OR432 Class. We were dismissed a bit late by our instructor Sir." Subsequently, in his Request for
Reconsideration of Meted Punishment to Maj. Leander, he reasoned out as follows:

46
I strongly believe that I am not in control of the circumstances, our 4th period class ended 1500H and our 5th period
class, which is ENG412, started 1500H also. Immediately after 4t period class, I went to my next class without any
intention of being late Sir.207

In this case, the Court agrees with respondents that Cadet 1 CL Cudia committed quibbling; hence, he lied in
violation of the Honor Code.

Following an Honor Reference Handbook, the term "Quibbling" has been defined in one U.S. case as follows:

A person can easily create a false impression in the mind of his listener by cleverly wording what he says, omitting
relevant facts, or telling a partial truth. When he knowingly does so with the intent to deceive or mislead, he is
quibbling. Because it is an intentional deception, quibbling is a form of lying.208

The above definition can be applied in the instant case. Here, instead of directly and completely telling the cause of
his being late in the ENG412 class of Prof. Berong, Cadet 1 CL Cudia chose to omit relevant facts, thereby, telling a
half-truth.

The two elements that must be presented for a cadet to have committed an honor violation are:

1. The act and/or omission, and

2. The intent pertinent to it.

Intent does not only refer to the intent to violate the Honor Code, but intent to commit or omit the act itself.209

The basic questions a cadet must always seek to answer unequivocally are:

1. Do I intend to deceive?

2. Do I intend to take undue advantage?

If a cadet can answer NO to BOTH questions, he or she is doing the honorable thing.210

Intent, being a state of mind, is rarely susceptible of direct proof, but must ordinarily be inferred from the facts, and
therefore, can only be proved by unguarded expressions, conduct and circumstances generally.211 In this case,
Cadet 1 CL Cudia's intent to deceive is manifested from the very act of capitalizing on the use of the words "dismiss"
and "class." The truth of the matter is that the ordinary usage of these two terms, in the context of an educational
institution, does not correspond to what Cadet 1 CL Cudia is trying to make it appear. In that sense, the words are
not generic and have definite and precise meaning.

By no stretch of the imagination can Cadets 1 CL Cudia, Miranda, Arcangel, and Narciso already constitute a
"class." The Court cannot agree that such term includes "every transaction and communication a teacher does with
her students." Clearly, it does not take too much intelligence to conclude that Cadet 1 CL Cudia should have been
accurate by pinpointing who were with him when he was late in the next class. His deceptive explanation is made
more obvious when compared with what Cadets 1 CL Archangel and Narciso wrote in their DR explanation, which
was: "We approached our instructor after our class."212

Further, it is unimportant whether the time of dismissal on November 14, 2013 was five or fifteen minutes ahead of
the scheduled end of class. Worth noting is that even Dr. Costales, who stood as a witness for Cadet 1 CL Cudia,
consistently admitted before the HC, the Fact-Finding Board/Investigating Body, and the CHR that he was already
dismissed when he passed his LE paper.213 During the hearing of the Board/Body, she also declared that she merely
responded to his request to see the results of the UE 1 and that she had reservations on the phrases "under my
instruction" and "dismissed a bit late" used in his letter of explanation to the HC. In addition, Dr. Costales manifested
her view before the CHR that the act of Cadet 1 CL Cudia of inquiring about his grade outside their classroom after
he submitted his LE paper is not part of the class time because the consultation, being cadet-initiated, is
47
voluntary.214 Assuming, for the sake of argument, that a new business was initiated by Dr. Costales when Cadet 1 CL
Cudia was asked to stay and wait for the section grade, still, this does not acquit him. Given such situation, a
responsible cadet who is fully aware of the time constraint has the last say, that is, to politely decline the invitation
and immediately go to the next class. This was not done by Cadet 1 CL Cudia. Thus, it cannot be said that he
already lost control over the circumstances.

It is apparent, therefore, that Cadet 1 CL Cudia cunningly chose words which led to confusion in the minds of
respondents and eventually commenced the HC inquiry. His case is not just a matter of semantics and a product of
plain and simple inaccuracy. There is manipulation of facts and presentation of untruthful explanation constitutive of
Honor Code violation.

Evidence of prior good conduct cannot clear Cadet 1 CL Cudia .. While his Transcript of Records (TOR) may reflect
not only his outstanding academic performance but his excellent grade in subjects on Conduct during his four-year
stay in the PMA,215 it does not necessarily follow that he is innocent of the offense charged. It is enough to say that
"evidence that one did or did not do a certain thing at one time is not admissible to prove that he did or did not do
the same or similar thing at another time."216 While the TOR may be received to prove his identity or habit as an
exceptional PMA student, it does not show his specific intent, plan, or scheme as cadet accused of committing a
specific Honor Code violation.

Dismissal from the PMA as unjust and cruel punishment

Respondents insist that violation of the Honor Code warrants separation of the guilty cadet from the cadet corps.
Under the Cadet Corps Armed Forces of the Philippines Regulation (CCAFPR), a violation of the Cadet Honor Code
is considered Grave (Class 1) delinquency which merits a recommendation for a cadet's dismissal from the PMA
Superintendent. The same is likewise clear from the Honor Code and Honor System Handbook. Cadet 1 CL Cudia
is, therefore, presumed to know that the Honor Code does not accommodate a gradation or degree of offenses.
There is no difference between a little lie and a huge falsehood. Respondents emphasize that the Honor Code has
always been considered as an absolute yardstick against which cadets have measured themselves ever since the
PMA began and that the Honor Code and System seek to assure that only those who are able to meet the high
standards of integrity and honor are produced by the PMA. As held in Andrews, it is constitutionally permissible for
the military "to set and enforce uncommonly high standards of conduct and ethics. " Thus, in violating the Honor
Code, Cadet 1 CL Cudia forfeits his privilege to graduate from the PMA.

On their part, petitioners concede that if it is proven that a cadet breached the Honor Code, the offense warrants his
or her dismissal since such a policy may be the only means to maintain and uphold the spirit of integrity in the
military.217 They maintain though that in Cadet 1 CL Cudia's case there is no need to distinguish between a "little lie"
and a "huge falsehood" since he did not lie at all. Absent any intent to deceive and to take undue advantage, the
penalty imposed on him is considered as unjust and cruel. Under the circumstances obtaining in this case, the
penalty of dismissal is not commensurate to the fact that he is a graduating cadet with honors and what he allegedly
committed does not amount to an academic deficiency or an intentional and flagrant violation of the PMA non-
academic rules and regulations. Citing Non, petitioners argue that the penalty imposed must be proportionate to the
offense. Further, lsabelo, Jr. is squarely applicable to the facts of the case. Cadet 1 CL Cudia was deprived of his
right to education, the only means by which he may have a secure life and future.

Considering Our finding that Cadet 1 CL Cudia in truth and in fact lied and his acceptance that violation of the Honor
Code warrants the ultimate penalty of dismissal from the PMA, there is actually no more dispute to resolve. Indeed,
the sanction is clearly set forth and Cadet 1 CL Cudia, by contract, risked this when he entered the Academy.218 We
adopt the ruling in Andrews219 wherein it was held that, while the penalty is severe, it is nevertheless reasonable and
not arbitrary, and, therefore, not in violation of due process. It quoted the disposition of the district court, thus:

The fact that a cadet will be separated from the Academy upon a finding that he has violated the Honor Code is
known to all cadets even prior to the beginning of their careers there. The finding of a Code violation by hypothesis
includes a finding of scienter on the part of the offender. While separation is admittedly a drastic and tragic
consequence of a cadet's transgression, it is not an unconstitutionally arbitrary one, but rather a reasonable albeit
severe method of preventing men who have suffered ethical lapses from becoming career officers. That a policy of
admonitions or lesser penalties for single violations might be more compassionate --or even more effective in
48
achieving the intended result --is quite immaterial to the question of whether the harsher penalty violates due
process.220

Nature of the CHR Findings

Petitioners contend that the PMA turned a blind eye on the CHR's recommendations. The CHR, they note, is a
constitutional body mandated by the 1987 Constitution to investigate all forms of human rights violations involving
civil and political rights, and to conduct investigative monitoring of economic, social, and cultural rights, particularly
of vulnerable sectors of society. Further, it was contended that the results of CHR's investigation and
recommendations are so persuasive that this Court, on several occasions like in the cases of Cruz v. Sec. of
Environment & Natural Resources221 and Ang Ladlad LGBT Party v. Commission on Elections,222 gave its findings
serious consideration. It is not, therefore, too late for the Court to hear what an independent and unbiased fact-
finding body has to say on the case.

In opposition, respondents assert that Simon, Jr. v. Commission on Human Rights223 ruled that the CHR is merely a
recommendatory body that is not empowered to arrive at a conclusive determination of any controversy.

We are in accord with respondents.

The findings of fact and the conclusions of law of the CHR are merely recommendatory and, therefore, not binding
to this Court. The reason is that the CHR's constitutional mandate extends only to the investigation of all forms of
human rights violations involving civil and political rights.224 As held in Cariño v. Commission on Human Rights225and
a number of subsequent cases,226 the CHR is only a fact-finding body, not a court of justice or a quasi-judicial
agency. It is not empowered to adjudicate claims on the merits or settle actual case or controversies. The power to
investigate is not the same as adjudication:

The most that may be conceded to the Commission in the way of adjudicative power is that it may investigate, i.e.,
receive evidence and make findings of fact as regards claimed human rights violations involving civil and political
rights. But fact-finding is not adjudication, and cannot be likened to the judicial function of a court of justice, or even
a quasi-judicial agency or official. The function of receiving evidence and ascertaining therefrom the facts of a
controversy is not a judicial function, properly speaking. To be considered such, the faculty of receiving evidence
and making factual conclusions in a controversy must be accompanied by the authority of applying the law to those
factual conclusions to the end that the controversy may be decided or determined authoritatively, finally and
definitively, subject to such appeals or modes of review as may be provided by law. This function, to repeat, the
Commission does not have.

xxxx

[i]t cannot try and decide cases (or hear and determine causes) as courts of justice, or even quasi-judicial bodies do.
To investigate is not to adjudicate or adjudge. Whether in the popular or the technical sense, these terms have well
understood and quite distinct meanings.

"Investigate, "commonly understood, means to examine, explore, inquire or delve or probe into, research on, study.
The dictionary definition of "investigate" is "to observe or study closely: inquire into systematically: "to search or
inquire into: x x x to subject to an official probe x x x: to conduct an official inquiry;" The purpose of investigation, of
course, is to discover, to find out, to learn, obtain information. Nowhere included or intimated is the notion of settling,
deciding or resolving a controversy involved in the facts inquired into by application of the law to the facts
established by the inquiry.

The legal meaning of "investigate" is essentially the same: "(t)o follow up step by step by patient inquiry or
observation. To trace or track; to search into; to examine and inquire into with care and accuracy; to find out by
careful inquisition; examination; the taking of evidence; a legal inquiry;" "to inquire; to make an investigation,"
"investigation" being in turn described as "(a)n administrative function, the exercise of which ordinarily does not
require a hearing. 2 Am J2d Adm L Sec. 257; xx x an inquiry, judicial or otherwise, for the discovery and collection of
facts concerning a certain matter or matters."

49
"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine, resolve,
rule on, settle. The dictionary defines the term as "to settle finally (the rights and duties of the parties to a court
case) on the merits of issues raised: xx to pass judgment on: settle judicially: x x x act as judge." And "adjudge"
means "to decide or rule upon as a judge or with judicial or quasi-judicial powers: xx to award or grant judicially in a
case of controversy x x x."

In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally.
1âwphi1

Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or
decree, or to sentence or condemn. xx Implies a judicial determination of a fact, and the entry of a judgment. "226

All told, petitioners are not entitled to moral and exemplary damages in accordance with Articles 19, 2217, 2219 and
2229 of the Civil Code. The dismissal of Cadet 1 CL Cudia from the PMA did not effectively deprive him of a future.
Cliche though it may sound, being a PMA graduate is not the "be-all and end-all" of his existence. A cadet separated
from the PMA may still continue to pursue military or civilian career elsewhere without suffering the stigma attached
to his or her dismissal. For one, as suggested by respondents, DND-AFP Circular No. 13, dated July 15, 1991, on
the enlistment and reenlistment in the APP Regular Force, provides under Section 14 (b) thereof that priority shall
be given to, among others, the ex-PMA or PAFFFS cadets.227 If the positions open does not appeal to his interest for
being way below the rank he could have achieved as a PMA graduate, Cadet 1 CL Cudia could still practice other
equally noble profession or calling that is best suited to his credentials, competence, and potential. Definitely,
nobody can deprive him of that choice.

WHEREFORE, the Petition is DENIED. The dismissal of Cadet First Class Aldrin Jeff P. Cudia from the Philippine
Military Academy is hereby AFFIRMED. No costs.

SO ORDERED.

50
SECOND DIVISION

G.R. No. 212381, April 22, 2015

REYNALDO M. JACOMILLE, Petitioner, v. HON. JOSEPH EMILIO A. ABAYA, IN HIS CAPACITY AS SECRETARY OF
TRANSPORTATION AND COMMUNICATIONS (DOTC); ATTY. ALFONSO V. TAN, JR., IN HIS CAPACITY AS
ASSISTANT SECRETARY OF THE LAND TRANSPORTATION OFFICE (LTO); HON. FLORENCIO ABAD, IN HIS
CAPACITY AS SECRETARY OF BUDGET AND MANAGEMENT (DBM); HON. ARSENIO M. BALISACAN, IN HIS
CAPACITY AS DIRECTOR GENERAL OF THE NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY (NEDA); HON.
MARIA GRACIA M. PULIDO TAN, IN HER CAPACITY AS CHAIRPERSON OF THE COMMISSION ON AUDIT (COA)
AND POWER PLATES DEVELOPMENT CONCEPTS, INC.,/J. KNIERIEM B.V. GOES (JKG) (JOINT VENTURE)
REPRESENTED BY ITS MANAGING DIRECTOR, CHRISTIAN S. CALALANG, Respondents.

DECISION

MENDOZA, J.:
Government projects are the tangible manifestation of hard-earned public funds. These undertakings are built brick-by-brick
through the combined efforts of the nation's taxpayers. Our laws have ventured into great lengths to establish the rigorous
safeguards and procedures in the planning, procurement and implementation of these projects, through robust policies on
fiscal governance and public accountability. And the Judiciary must do its part and carry out its duty to ensure that these
projects do not result in regretful potholes, stale construction sites and substandard products, looming into the memories of
empty promises and generic assurances.

Before this Court is a petition for certiorari and prohibition under Rule 65 of the 1997 Revised Rules of Civil Procedure which
assails the legality of the procurement of the Land Transportation Office Motor Vehicle License Plate Standardization
Program.

The Antecedents

The Department of Transportation and Communications (DOTC) is the primary policy, planning, programming, coordinating,
implementing, regulating, and administrative entity of the Executive Branch of the government in the promotion,
development and regulation of dependable and coordinated networks of transportation and communications systems as well
as in the fast, safe, efficient, and reliable postal, transportation and communication services. One of its line agencies is the
Land Transportation Office (LTO) which is tasked, among others, to register motor vehicles and regulate their operation.

In accordance with its mandate, the LTO is required to issue motor vehicle license plates which serve to identify the
registered vehicles as they ply the roads. These plates should at all times be conspicuously displayed on the front and rear
portions of the registered vehicles to assure quick and expedient identification should there be a need, as in the case of
motor vehicle accidents or infraction of traffic rules.

Recently, the LTO formulated the Motor Vehicle License Plate Standardization Program (MVPSP) to supply the new license
plates for both old and new vehicle registrants. On February 20, 2013, the DOTC published in newspapers of general
circulation the Invitation To Bid for the supply and delivery of motor vehicle license plates for the MVPSP, to wit: chanrob l esvirt uallawl ibra ry

The Department of Transportation and Communications (DOTC)/ Land Transportation Office (LTO) are inviting bids for its
LTO MV Plate Standardization Program which involves the procurement, supply and delivery of Motor Vehicle License Plates.
The program shall run from July 2013 until June 2018 when the supply and delivery of the Motor Vehicle License Plates of the
LTO MV Plate Standardization program is completed.

The LTO, through the General Appropriations Act, intends to apply the sum of Three Billion Eight Hundred Fifty One Million
Six Hundred Thousand One Hundred Pesos (Php 3,851,600,100.00) being the Approved Budget for the Contract (ABC), for
payment of approximately 5,236,439 for Motor Vehicles (MV) and approximately 9,968,017 for motorcycles (MC), under the
contract for the Supply and Delivery of Motor Vehicle License Plate for the Land Transportation Office Motor Vehicle License
Plate Standardization Program or the "LTO MV Plate Standardization Program".1 cralawlawlib rary

On February 25, 2013, the DOTC Bids and Awards Committee (BAC) issued BAC General Bid Bulletin No. 002-2013 setting
the Submission and Opening of Bids on March 25, 2013. On February 28, 2013, the first Pre-Bid Conference was held at the
offices of the BAC.

On March 6, 2013, BAC General Bid Bulletin No. 003-2013 was issued, amending paragraph 1 of the Invitation to Bid, to
wit:
chan roble svi rtual lawlib rary

The Department of Transportation and Communication (DOTC) / Land Transportation Office (LTO), through the General
Appropriations Act, intends to apply the sum of Three Billion Eight Hundred Fifty One Million Six Hundred Thousand One
Hundred Pesos (Php 3,851,600,100.00) being the Approved Budget for the Contract (ABC), to payments for:

a. Lot 1 - Motor Vehicle License Plates (MV): 5,236,439 pairs for MV amounting to Two Billion Three Hundred
Fifty Six Million Three Hundred Ninety Seven Thousand Five Hundred Fifty Pesos (Php 2,356,397,550.00)
51
b. Lot 2 - Motorcycles Plates (MC): 9,968,017 pieces for MC amounting to One Billion Four Hundred Ninety Five
Million Two Hundred Two Thousand Five Hundred Fifty Pesos (Php 1,495,202,550.00) under the contract for
the Supply and Delivery of Motor Vehicle License Plate for the Land Transportation Office Motor Vehicle
License Plate Standardization Program (herein after the "LTO MV Plate Standardization Program").
On March 7, 2013, the second Pre-Bid Conference was held at the office of the BAC. On March 8, 2013, BAG General Bid
Bulletin No. 005-2013 extended the submission and opening of bids to April 8, 2013 to give the prospective bidders ample
time to prepare their bidding documents. On April 22, 2013, the BAC again rescheduled the submission and opening of bids
to May 6, 2013.

On May 6 and 7, 2013, the BAC proceeded with the opening of bids. After examining the eligibility documents and technical
proposals submitted by eight (8) interested groups, only two (2) were found eligible by the DOTC, to wit: chanroble svirtuallaw lib rary

a. The joint venture of the Netherlands' J. Knieriem B.V. Goes and local company Power Plates Development
Concepts, Inc. (JKG-Power Plates); and
b. The joint venture of Spain's Industrias Samar't and local company Datatrail Corporation (Industrias Samar't-
Datatrial).
As the only eligible bidders, their financial proposals were then opened to reveal that JKG-Power Plates made the lowest
offers. For Lot 1, JKG-Power Plates proposed to supply the MV License Plates for a total of P1.98 Billion, while Industrias
Samar't-Datatrial offered it at P2.03 Billion. On the other hand, for Lot 2, JKG-Power Plates aimed to supply the MC License
Plates for a total of P1.196 Billion, while Industrias Samar't-Datatrial's offer was at P1.275 Billion.

On July 22, 2013, the DOTC issued the Notice of Award to JKG-Power Plates.2 It was only on August 8, 2013, however, when
JKG-Power Plates signified its conforme on the Notice of Award.3 On August 12, 2013, the Notice of Award was posted in the
DOTC website; while the Award Notice Abstract was posted in the Philippine Government Electronic Procurement System
(PhilGEPS) website on even date.

Despite the notice of award, the contract signing of the project was not immediately undertaken. On February 17, 2014, the
DOTC issued the Notice to Proceed4 to JKG-Power Plates and directed it to commence delivery of the items within seven (7)
calendar days from the date of the issuance of the said notice.

On February 21, 2014, the contract for MVPSP5 was finally signed by Jose Perpetuo M. Lotilla, as DOTC Undersecretary for
Legal Affairs, and by Christian S. Calalang, as Chief Executive Officer of JKG-Power Plates. It was approved by public
respondent Joseph Emilio A. Abaya (Secretary Abaya), as DOTC Secretary.

On March 11, 2014, the Senate Committee on Public' Services, pursuant to Resolution No. 31, conducted an inquiry in aid of
legislation on the reported delays in the release of motor vehicle license plates, stickers and tags by the LTO. On April 4,
2014, JKG-Power Plates delivered the first batch of plates to the DOTC/LTO.6

On May 19, 2014, petitioner Reynaldo M. Jacomille (petitioner) filed this subject petition for certiorari and prohibition,
assailing the legality of MVPSP anchored on the following: chan roble svirtual lawlib rary

GROUNDS

LACK OF ADEQUATE BUDGETARY APPROPRIATIONS IN THE GENERAL APPROPRIATIONS ACT OF 2013, WHEN
THE PROJECT WAS BIDDED;
II

FAILURE OF THE PROCURING ENTITY TO OBTAIN FIRST THE REQUIRED MULTI-YEAR OBLIGATION AUTHORITY
(MYOA) FROM THE DEPARTMENT OF BUDGET AND MANAGEMENT;
III

NON-REFERRAL OF THE MULTI-BILLION PROJECT TO THE INVESTMENT COORDINATION COMMITTEE/NATIONAL


ECONOMIC DEVELOPMENT AUTHORITY FOR ITS REVIEW AND APPROVAL.7 cralawlawlibra ry

Arguments of Petitioner

Petitioner, by counsel and assisted by Retired Justice Leonardo A. Quisumbing, instituted this taxpayer suit, averring that he
was a diligent citizen paying his correct taxes to the Philippine Government regularly; that he was a registered vehicle owner,
as evidenced by the Certificate of Registration of his motor vehicle and a registered licensed driver; that he would be affected
by the government issuance of vehicle plates thru its MVPSP upon his renewal of the registration of his vehicle; that not
being a participant to the bidding process, he could not avail of the administrative remedies and procedure provided under
Republic Act (R.A.) No. 9184 or the Government Procurement Reform Act, and its Implementing Rules and Regulations
(IRR); that as far as he was concerned, there was no appeal or any plain or speedy remedy available to him; and that he
firmly believed that the actuation of the DOTC in proceeding with the bidding process and giving the award to JKG-Power
Plates without the requisite MYOA and adequate budgetary appropriations was null and void.

52
As to the substantive merits, petitioner raised several arguments. First, the procurement process of MVPSP exceeded the
mandatory periods prescribed by R.A. No. 9184 and its IRR. The notice of award was. issued by the DOTC beyond the three
(3)-month period set by law since the last day fell on August 7, 2013. The said notice was posted in the PhilGEPS website
only on August 12, 2013.

Moreover, with R.A. No. 9184 requiring that the contract signing be done within (10) calendar days from the receipt of the
winning bidder of the notice of award, which in this case was posted on August 12, 2013, the contract was signed only on
February 21, 2014, way beyond the required 10-day period, because MVPSP was not adequately funded.

Second, when the procurement for MVPSP was commenced, there was no adequate funding. The invitation to bid for MVPSP,
published on February 20, 2013, stated that the source of funding in the amount of P3,851,600,100.00 would be the General
Appropriations Act (GAA).

A perusal of R.A. No. 10352 or the General Appropriations Act of 2013 (GAA 2013), would show that Congress appropriated
only the amount of P187,293,000.00 under the specific heading of Motor Vehicle Plate-Making Project.8

Noticeably then, the DOTC bidded out MVPSP even while there was no sufficient funds legally appropriated for this purpose
under the GAA 2013. Petitioner saw this as a clear misrepresentation or even a deception by the said office against the
government and the general public as a whole. Petitioner also pointed to the Senate Committee on Public Services Hearing
on March 11, 2014, wherein it was admitted that there was no adequate budgetary appropriation for MVPSP in GAA 2013.

In his Reply,9 dated October 16, 2014, petitioner claimed that the appropriation in the General Appropriations Act of 2014
(GAA 2014) could not be applied to MVPSP. The said project, as contemplated in the invitation to bid, was not the same as
the "Motor Vehicle Registration and Driver's Licensing Regulatory Services" mentioned in GAA 2014.

Third, the DOTC failed to obtain the required Multi-Year Obligational Authority (MYOA) from the Department of Budget and
Management (DBM). The invitation to bid for MVPSP provided for the payment of license plates, which would be delivered
within a period of five (5) years.

Section 33 of the General Provisions of R.A. No. 9206, or the General Appropriations Act of 2009, states that "[i]n the
implementation of multi-year projects, no agency shall enter into a multi-year contract without a Multi-Year Obligational
Authority issued by the DBM for the purpose." This provision had been substantially re-enacted under the General Provisions
of GAA 2013. Given that MVPSP would entail the delivery of plates within a period of five (5) years, petitioner posited that it
was a multi-year project (MYP) which would necessitate a MYOA as a jurisdictional requirement.

Petitioner added that MVPSP involved a multi-year contract (MYC), requiring a MYOA, because at the time of its
implementation, the appropriation for it was not available under GAA 2013. The implementation was supposed to have taken
place in Fiscal Year 2013 when the notice of award was issued on July 22, 2013.

Lastly, the project had the proposed budget of P3,851,600,100.00 for the year 2013 when it was intended to be bidded out
and awarded to the lowest bidder. As required by law, particularly the IRR of R,A. No. 7718 or the Built-Operate-Transfer
Law, all projects with substantial investment must be reviewed and approved first by Investment Coordination Committee
(ICC) of the National Economic Development Authority (NEDA). chanRob lesvi rtua lLawl ibra ry

Arguments of Public Respondents

On August 15, 2014, the Office of the Solicitor General (OSG), as counsel for the public respondents, filed its Comment.10

With respect to procedural matters, the OSG stated that the issues presented had been rendered moot and academic as the
gap in the budget of MVPSP was already bridged and covered by the full and specific funding by GAA 2014 in the amount of
P4,843,753,000.00 for the item "Motor Vehicle Registration and Driver's Licensing Regulatory Services."11 With the signing of
MVPSP on February 21, 2014, after the enactment of GAA 2014, the OSG claimed that all objections that petitioner might
have, whether right or wrong, had been rendered naught.

Assuming arguendo that the petition had not yet been rendered moot and academic, the OSG asserted that the same must
be dismissed on the ground of lack of locus standi because petitioner failed to prove that he had a personal and substantial
interest in the case at hand. According to petitioner, the government's implementation of MVPSP would affect his interest
when he would renew his vehicle's registration. Like petitioner, however, other vehicle owners would also be affected by the
implementation of MVPSP. The OSG opined that petitioner hardly qualified as an interested party which would clothe him with
standing to raise the particular issues in his petition.

On the merits, the OSG argued that, first, the timeline for the procurement activity under R.A. No. 9184 was not mandatory.
Notably, Section 38 of the said law states that the procurement activity shall be completed within a reasonable period.

The notice of award of contract was issued by the DOTC to JKG-Power Plates as early as July 22, 2013. The signing of the
contract with the winning bidder, however, was halted on August 15, 2013, when the DBM informed the DOTC that they
should have first secured a MYOA. On January 23, 2014, the Department of Justice (DOJ) issued a resolution,12 finding that
the conflict had been resolved by the enactment of GAA 2014. Finally, on February 21, 2014, the contract for MVPSP was
53
signed. These events would show that, despite exceeding the 3-month period under R.A. No. 9.184, the DOTC managed to
conclude the procurement activity within a reasonable time.

Second, R.A. No. 9184 did not require that the allotment under the GAA be equivalent to the Approved Budget for the
Contract (ABC). During the Bicameral Conference Committee on the Disagreeing Provisions of Senate Bill No. 2248 and
House Bill No. 4809, the members agreed that the proposed ABC need not be corresponding to the allotment under the GAA
of the procuring entity.

The OSG contended that Sec. 7.5 of the IRR of R.A. No. 9184 highlighted that, in certain instances, a procuring entity may
be constrained to begin the procurement process even before the actual approval of the GAA. The amount or budget
appearing in the ABC for the project could be sourced - not from the GAA at the time of the start of the procurement process
- but from the GAA that was still waiting for approval.

Third, R.A. No. 9184 did not contemplate MYP. Instead, the GPPB, as the implementing body of R.A. No. 9184, issued
Circular No. 01-2009, which discussed the MYP and the MYC. The basis of the said circular was DBM Circular Letter 2004-12,
which defined the MYOA.

Under DBM Circular Letter 2004-12, only MYC would require a MYOA. In its definition of terms, MYC would not include MYP
with appropriations available in full during the first year of implementation. The OSG clarified that MVPSP did not involve MYC
because it had an appropriation available in full under GAA 2014. Logically, MVPSP did not require MYOA.

Lastly, as to the allegation that MVPSP was covered by R.A. No. 7718, the OSG relayed that the DOTC and the LTO secured
the opinion of the NEDA. In a letter,13 dated December 23, 2012, the NEDA wrote that MVPSP neither involved a capital
investment nor would it be implemented through public-private partnership (PPP). Thus, the said project was not covered by
the review and approval process of the ICC.
Arguments of Private Respondent JKG-Power Plates

On July 24, 2014, JKG-Power Plates filed its Comment.14 JKG-Power Plates averred that petitioner had no locus standi. It
pointed out that petitioner had admitted that he was not one of the bidders in MVPSP and so he would not suffer any direct
injury.

Likewise, the present case was not a proper subject of taxpayer suit because no taxes would be spent for this project. The
money to be paid for the plates would not come from taxes, but from payments of vehicle owners, who would pay P450.00
for every pair of motor vehicle license plate, and P120.00 for every motorcycle license plate. Out of the P450.00, the cost of
the motor vehicle plate would only be P380.00. In effect, the government would even earn P70.00 from every pair of plate.15

As to its substantial arguments, JKG-Power Plates submitted that there was nothing in R.A. No. 9184 which required full
budgetary approval prior to the commencement of the bidding. It also explained that the purpose of MYOA was to ensure
that the agency was committed to include the annual budgetary requirements of the project in its budget proposal for the
succeeding years while the project was being implemented. Thus, MYOA was not a requirement for projects that already had
full funding in the GAA in a specific year. The full budgetary requirement of P3.851 billion of MVPSP was already provided for
in GAA 2014.

Moreover, JKG-Power Plates asserted that based on R.A. No. 7718, the ICC/NEDA did not have to review and approve MVPSP
because the law pertained to a private financing of the construction, operation and maintenance of infrastructure projects.
JKG-Power Plates explained that MVPSP was a public contract which supplied the plates to the DOTC with no investment
involved.cha nRoblesvi rt ualLaw lib rary

The Court's Ruling

Before resolving the petition on its merits, the Court shall first rule on the following procedural issues raised by the
respondents: (1) whether the issue had been rendered moot and academic; and (2) whether petitioner has a legal standing
or locus standi to file the present suit. chanRoblesv irt ual Lawlib rary

Procedural Matters

The case is already moot and academic; notwithstanding, the substantive issues needed to be resolved

Petitioner assails the procurement process of MVPSP with a budget of P3,851,600,100.00 that was initiated even though the
corresponding line item in GAA 2013 only provided an appropriation of P187,293,000.00. The OSG, however, points out that
GAA 2014 already provided for the full budget of MVPSP in the amount of P4,843,753,000.00; hence, the present petition is
moot and academic.

The rule is well-settled that for a court to exercise its power of adjudication, there must be an actual case or controversy -
one which involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution. The case
must not be moot or academic or based on extra-legal or other similar considerations not cognizable by a court of justice.
Where the issue has become moot and academic, there is no justiciable controversy, and an adjudication thereon would be of
no practical use or value as courts do not sit to adjudicate mere academic questions to satisfy scholarly interest, however
intellectually challenging.16
54
The Court agrees with the OSG that the present controversy has been rendered moot by the passage of GAA 2014. The
essence of petitioner's case is that MVPSP was not sufficiently funded under GAA 2013. Because of GAA 2014, however, the
amount of P4,843,753,000.00 had been appropriated by Congress to MVPSP before the contract was entered into on
February 21, 2014.

By appropriating the amount of P4,843,753,000.00 for MVPSP, Congress agreed with the DOTC and the LTO that the said
project should be funded and implemented. Verily, the Court cannot question the wisdom of the legislative department in
appropriating the full budget of MVPSP in GAA 2014.

Thus, it is settled that MVPSP was adequately funded before the contract was signed by the parties. Petitioner even admits,
and the Court takes judicial notice, that the new vehicle plates under MVPSP are being distributed by the LTO and released to
new vehicle owners.

Nevertheless, there were occasions in the past when the Court passed upon issues although supervening events had
rendered those petitions moot and academic. After all, the moot and academic principle is not a magical formula that can
automatically dissuade the courts from resolving a case. Courts will decide cases, otherwise moot and academic, if: first,
there is a grave violation of the Constitution; second, the exceptional character of the situation and the paramount public
interest is involved; third, when the constitutional issue raised requires formulation of controlling principles to guide the
bench, the bar, and the public; and fourth, the case is capable of repetition yet evading review.17

In David v. Arroyo,18 for instance, several petitions assailed the constitutionality of the declaration of a state of national
emergency by then President Gloria Macapagal-Arroyo. During the pendency of the suits, the said declaration was lifted.
Nonetheless, this Court still resolved the cases on the merits because the issues involved a grave violation of the Constitution
and affected the public interest.

Recently, there was Deutsche Bank AG v. CA,19 which involved the consolidation of different petitions for certiorari before the
CA assailing an order in the rehabilitation court. While the case was on going, the private respondent therein moved to
withdraw its earlier motion to consolidate the petitions. The Court ruled that the issue of whether the CA could validly order
the consolidation of cases, although rendered moot, was capable of repetition. Thus, the Court proceeded to resolve the
issues therein.

In the case at bench, the issues presented must still be passed upon because paramount public interest is involved and the
case is capable of repetition yet evading review. MVPSP is a nationwide project which affects new and old registrants of
motor vehicles and it involves P3,851,6D0,100.00 of the taxpayers' money. Also, the act complained of is capable of
repetition because the procurement process under R.A. No. 9184 is regularly made by various government agencies. Hence,
it is but prudent for the Court to rule on the substantial merits of the case.

Petitioner has locus standi to initiate the instant suit

Locus standi is defined as the right of appearance in a court of justice on a given question. The fundamental question is
whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions.20

In the case of Aquino v. COMELEC,21 this Court resolved the issues raised by the petition due to their "far reaching
implications," even though the petitioner had no personality to file the suit. Consequently, the Court, in a catena of
cases,22 invariably adopted a liberal stance on locus standi, including those cases involving taxpayers.

In the present case, petitioner justifies his locus standi by claiming that the petition raises issues of transcendental
importance and that he institutes the same as a taxpayer's suit. It must be noted that the Court has provided the following
instructive guides to determine whether a matter is of transcendental importance, namely: "(1) the character of the funds or
other assets involved in the case; (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by
the public respondent agency or instrumentality of the government; and (3) the lack of any other party with a more direct
and specific interest in the questions being raised."23

Petitioner sufficiently showed that his case presents a matter of transcendental importance based on the above-cited
determinants. He elucidated that, first, around P3.851 billion in public funds stood to be illegally disbursed; second, the IRR
of R.A. No. 9184 and R.A. No. 7718 were violated and the contract for MVPSP was awarded to respondent JKG-Power Plates
despite the utter disregard of the said laws; third, there was no other party with a more direct and specific interest who had
raised the issues therein; and fourth, MVPSP had a wide range of impact because all registered motor vehicles owners would
be affected.24

Petitioner also established a valid taxpayer's suit. A person suing as a taxpayer must show that the act complained of directly
involves the illegal disbursement of public funds derived from taxation.25 Contrary to the assertion of JKG-Power Plates,
MVPSP clearly involves the expenditure of public funds. While the motor vehicle registrants will pay for the license plates, the
bid documents and contract for MVPSP26indicate, that the government shall bear the burden of paying for the project. Every
portion of the national treasury, when appropriated by Congress, must be properly allocated and disbursed. Necessarily, an
55
allegation that public funds in the amount of P3.851 billion shall be used in a project that has undergone an improper
procurement process cannot be easily brushed off by the Court.

Having passed the procedural barriers, the Court shall now discuss the substantive merits of the petition on the following
issues: (1) whether the MVPSP followed the timelines in R.A. No. 9184 and its IRR; (2) whether MVPSP was sufficiently
funded when its procurement process began; (3) whether MYOA is required for MVPSP; and (4) whether the ICC/NEDA is
obliged to review and approve MVPSP under R.A. No. 7718. chanRoblesv irt ual Lawlib rary

Substantive Merits

The present petition revolves around the procurement of MVPSP. Currently, the law that governs the government
procurement processes would be R.A. No. 9184. As early as the year 1900, competitive public biddings were used by the
government to procure materials and to build public infrastructures. Back then, however, the provisions for the procurement
of public projects were to be found in different laws and regulations. Thus, R.A. No. 9184 was specifically enacted to
consolidate the rules on procurement.

Public bidding, as a method of government procurement, is governed by the principles of transparency, competitiveness,
simplicity and accountability. These principles permeate the provisions of R.A. No. 9184 from the procurement process to the
implementation of awarded contracts.27 The declared policy of R.A. No. 9184 is to promote the ideals of good governance in
all government branches, departments, agencies, subdivisions, and instrumentalities, including government-owned and/or
controlled corporations and local government units.28

Timeliness of the Procurement Process for MVPSP

The first substantive argument against MVPSP would be the delay in the procurement process. R.A. No. 9184 provides the
different periods within which certain stages of the procurement process must be completed, especially in the awarding stage
of the contract. The law provides:cha nrob lesvi rtua llawli bra ry

Section 37. Notice and Execution of Award. - Within a period not exceeding fifteen (15) calendar days from the determination
and declaration by the BAC of the Lowest Calculated Responsive Bid or Highest Rated Responsive Bid, and the
recommendation of the award, the Head of the Procuring Entity or his duly authorized representative shall approve or
disapprove the said , recommendation. In case of approval, the Head of the Procuring Entity or his duly authorized
representative shall immediately issue the Notice of Award to the bidder with the Lowest Calculated Responsive Bid or
Highest Rated Responsive Bid.

Within ten (10) calendar days from receipt of the Notice of Award, the winning bidder shall formally enter into contract with
the Procuring Entity. When further approval of higher authority is required, the approving authority for the contract shall be
given a maximum of twenty (20) calendar days to approve or disapprove it.

In the case of government owned and/or controlled corporations, the concerned board shall take action on the said
recommendation within thirty (30) calendar days from receipt thereof.

The Procuring Entity shall issue the Notice to Proceed to the winning bidder not later than seven (7) calendar days from the
date of approval of the contract by the appropriate authority. All notices called for by the terms of the contract shall be
effective only at the time of receipt thereof by the contractor.

Section 38. Period of Action on Procurement Activities. - The procurement process from the opening of bids up to the award
of contract shall not exceed three (3) months, or a shorter period to be determined by the procuring entity concerned.
Without prejudice to the provisions of the preceding section, the different procurement activities shall be completed
within reasonable periods to be specified in the IRR.

If no action on the contract is taken by the head of the procuring entity, or by his duly authorized representative, or by the
concerned board, in the case of government owned and/or controlled corporations, within the periods specified in the
preceding paragraph, the contract concerned shall be deemed approved. (Emphases supplied)
Petitioner contends that the public respondents failed to comply with the periods provided by law, specifically the 3-month
period from the opening of the bids up to the award of the contract under Sec. 38 of R.A. No. 9184. The OSG admits that the
3-month period was not complied with, but argues that it was not fatal because the provision was only directory.

The Court does not agree with the OSG that the 3-month period is merely directory. The said provision contains the word
"shall" which is mandatory in character. Such period was placed in a separate provision under Section 38, rather than
compressed with Section 37, to emphasize its importance. There is nothing in the law which states that the 3-month period
can be disregarded. Non-compliance with the period will certainly affect the validity of the bidding process. In fact, Section
38.1 of the IRR of R.A. No. 9184 reaffirms the obligatory 3-month period: cha nrob lesvi rtua llawli bra ry

The procurement process from the opening of bids up to the award of contract shall not exceed three (3) months, or a
shorter period to be determined by the procuring entity concerned. All members of the BAC shall be on a "jury duty" type of
assignment until the Notice of Award is issued by the Head of the Procuring Entity in order to complete the entire
procurement process at the earliest possible time. (Emphasis supplied)
Nevertheless, the mandatory period of three (3) months under Section 38 was complied with by the public respondents. The
law clearly refers to the period from the opening of the bids up to the award of the contract and not, as petitioner claims, up
56
to the posting of the notice of award in the PhilGEPS website. The opening of the bids was done on May 6 and 7, 2013, and
the notice of award was issued after two and a half months, or on July 22, 2013.29

The specific periods of Section 37, however, were not observed. The said provision states that within ten (10) calendar days
from receipt of the notice of award, the winning bidder shall formally enter into a contract with the procuring entity. It also
provides that the procuring entity shall issue to the winning bidder the notice to proceed not later than seven (7) calendar
days from the date of approval of the contract by the appropriate authority.

Here, the notice of award was issued by the DOTC on July 22, 2013. Yet, the contract was signed only on February 21, 2014,
or seven (7) months, thereafter. Also, the notice to proceed was issued on February 17, 2014, prior to the signing of the
contract.

The project was not sufficiently funded at the commencement of the procurement process

Before the enactment of R.A. No. 9184, there were already laws that required sufficient appropriation before the government
could enter into a contract. The Administrative Code of 1987 expressly prohibits the entering into contracts involving the
expenditure of public funds unless two prior requirements are satisfied. First, there must be an appropriation law authorizing
the expenditure required in the contract. Second, there must be a certification by the proper accounting official and auditor,
attached to the contract, attesting that funds have been appropriated by law and such funds are available. Failure to comply
with any of these two requirements renders the contract void.30

The Government Auditing Code of the Philippines also provides for the same provisions.31 It further declares that any
contract entered into contrary to above-cited two requirements shall be void, and the officer or officers entering into the
contract shall be liable to the government for any consequent damage.32

These laws were applied by jurisprudence to invalidate government contracts without proper appropriations. In Osme�a v.
COA,33 the Court invalidated a contract entered into by then Mayor Duterte because the agreed cost for the project was way
beyond the appropriated amount. It was stated therein that "fund availability is, as it has always been, an indispensable
prerequisite to the execution of any government contract involving the expenditure of public funds by all government
agencies at all levels."

Recently, in PNR v. Kanlaon Construction Enterprise Co., Inc.,34 the Court invalidated three contracts between PNR and
Kanlaon because they did not comply with the requirement of a certification of appropriation and fund availability. The clear
purpose of these requirements is to insure that government contracts are never signed unless supported by the
corresponding appropriation law and fund availability.

The requirement of availability of funds before the execution of a government contract, however, has been modified by R.A.
No. 9184. The said law presents a novel policy which requires, not only the sufficiency of funds at the time of the
signing of the contract, but also upon the commencement of the procurement process. This progressive shift can be
gleaned from several provisions of R.A. No. 9184, to wit: chan roblesv irtuallawl ib rary

Section 5. Definition of Terms. - xxx

(a) Approved Budget for the Contract (ABC) - refers to the budget for the contract duly approved by the Head of the
Procuring Entity, as provided for in the General Appropriations Act and/or continuing appropriations, in the
National Government Agencies; the Corporate Budget for the contract approved by the governing Boards, pursuant to
E.O.No.518, series of 1979, in the case of Government Financial Institutions and State Universities and Colleges; and the
Budget for the contract approved by the respective Sanggunian, in the case of Local Government Units. cralawlawlib ra ry

xxxx

Section 7. Procurement Planning and Budgeting Linkage. - All procurement should be within the approved budget of
the Procuring Entity and should be meticulously and judiciously planned by the Procuring Entity concerned. Consistent with
government fiscal discipline measures, only those considered crucial to the efficient discharge of governmental functions shall
be included in the Annual Procurement Plan to be specified in the IRR.

Section 20. Pre-Procurement Conference. - Prior to the issuance of the Invitation to Bid, the BAC is mandated to hold a pre-
procurement conference on each and every procurement, except those contracts below a certain level or amount specified in
the IRR, in which case, the holding of the same is optional.

The pre-procurement conference shall assess the readiness of the procurement in terms of confirming the
certification of availability of funds, as well as reviewing all relevant documents and the draft Invitation to Bid, as well as
consultants hired by the agency concerned and the representative of the end-user. (Emphases supplied)
The above-cited provisions of R.A. No. 9184 demonstrate that the law requires the availability of funds before the procuring
entity commences the procurement of a government project. As early as the conception of the ABC, the procuring entity is
mandated by law to ensure that its budget is within the GAA and/or continuing appropriation. In the procurement planning
stage, the procuring entity is again reminded that all procurement must be within its approved budget. Also, even before the
issuance of the invitation to bid, the law requires a pre-procurement conference to confirm the certification that the funds for
the government project are indeed available.
57
In the case at bench, the February 20, 2013 invitation to bid stated that the ABC for MVPSP was P3.851 billion and to be
funded through the GAA. Yet, GAA 2013 only provided an appropriation of P187,293,000.00. During the Senate Committee
on Public Works Hearing, it was recognized that the project was not amply covered by GAA 2013, but was funded by GAA
2014, as follows:chanro blesv irt uallawl ibra ry

THE CHAIRMAN: Hindi. So base din dun sa invitation to bid, ang amount ng proyekto is 3.85 billion, tama, hindi ba?

MR. ABAYA: Yes, Your Honor.

THE CHAIRMAN: Ang nakalagay sa GAA of 2013 ay 187 million lang, saan po kukunin ang pondo nito?

MR. ABAYA: The GAA 2014 provides for the budget, Your Honor.
The OSG counters that the ABC for MVPSP was not required to be exactly equivalent with the line item in the GAA 2013. The
OSG cites the discussion in the Bicameral Conference Committee on the Disagreeing Provisions of Senate Bill No. 2248 and
House Bill No. 4809, which eventually became R.A. No. 9184, to wit: chan roblesv irt uallawl ibra ry

REP. ABAYA: Just for clarification, Mr. Chairman, yung definition natin ng "approved budget" particularly is defined with
reference to the General Appropriations Act.

THE CHAIRMAN (SEN. ANGARA): Yes.

REP. ABAYA: When we place the "approved budget" for a certain project, that includes usually other right-of-way is included
if we are referring to what is stated in the GAA. So, to be more specific, I propose that we amend this and use the phrase
"approved project estimate," not "approved budget," in the definition of terms.

THE CHAIRMAN (SEN. ANGARA): We'll consult the expert. Okay.

MR. ENCARNACION: Yung approved budget, as I said, sir, earlier, kasi modified the content no, otherwise what appear in the
GAA is approved budget for the project but that budget is broken down into - sa works no contract works, right-of-way,
supervision, etcetera. We're only talking of the important parts of the contract. Ito, sa...

THE CHAIRMAN (SEN. ANGARA): And so, the definition....

REP. ABAYA: Yeah, But in the definition of terms, the approved budgets are the budget for the contract as approved by the
head of the procuring entity in accordance with the GAA.

MR. ENCARNACION: Oho. But for the contract lang. It is less - it could be less than the amount in the GAA. For example, the
GAA would be 10 million there, so the contract itself could be 9 million na kasi 9 million maaring right-of-way. So pinag-
uusapan natin...

THE CHAIRMAN (SEN. ANGARA): At saka sigura nga Del, that differentiation in the IRR, puwede natin ilagay sa...

REP. ABAYA: Ilagay sa IRR na.

THE CHAIRMAN (SEN. ANGARA): Oo. It's minus the right-of-way, etcetera, etcetera.
The cited discussion does not support the position of the OSG. The recommendation to change the term "approved budget
for the contract" to "approved estimate for the project" was not adopted by Congress. Instead, R.A. No. 9184 provides that
the ABC refers to the budget for the contract duly approved by the head of the procuring entity, as provided for in the GAA
and/or continuing appropriations. Thus, when the budget for government projects is prepared, it must have a basis in law,
either in the current GAA, or in continuing appropriations35 of previous GAAs or other appropriation laws.

The OSG then contends that the IRR of R.A. No. 9184. allows a procuring entity to proceed with the procurement activity
even though the GAA, containing the budget of the project, has not been enacted. The IRR provides: chan roble svirtual lawlib rary

7.5. The ABC as reflected in the APP or PPMP shall be at all times consistent with the appropriations for the project
authorized in the GAA, continuing, and automatic appropriations, the corporate budget, and the appropriation ordinance, as
the case may be. For NGAs, to facilitate the immediate implementation of projects even pending approval of the
GAA, the ABC shall be based on the budget levels under the proposed national budget submitted by the
President to Congress. (Emphasis supplied)
The same provision in the IRR was extended in the GPPB Circular No. 01-2009, as follows: c hanro blesvi rt uallawl ibra ry

4.2 To facilitate the immediate implementation of projects even pending approval of the GAA, the ABC shall be based on the
budget levels under the NEP submitted to Congress.

4.3 For specifically appropriated projects, agencies can proceed with the procurement activities prior to issuance of the notice
of award using as basis the NEP figures.36 cralawlaw lib rary

Although the IRR allows a national government agency to implement a project even pending the approval of the GAA, the
contention of the OSG does not reinforce its position. The proposed national budget submitted by the President to Congress
is the National Expenditure Program (NEP). The OSG, however, failed to present the 2014 NEP to substantiate its claim that
it contained the full budget for MVPSP. More so, the invitation to bid for MVPSP was published on February 20, 2013, even
58
before the 2014 NEP was submitted to Congress.37

Nevertheless, a copy of the 2014 NEP can be viewed through the DBM's website.38 Regrettably, the 2014 NEP does not
provide for the sufficient budget for the MVPSP, to wit: chanroblesv irtua llawli bra ry

PROPOSED 2014
Operations by MFO PS MOOE CO TOTAL
Motor vehicle registration
MFO2: and driver's licensing 314,981,0002,039,297,000375,0002,354,653,000
regulatory services
As can be gleaned from the 2014 NEP above, the proposed budget for the motor vehicle registration and driver's licensing
regulatory services was only P2,354,653,000.00, which was utterly short to cover the ABC of MVPSP in the amount of P3.851
billion. Thus, the DOTC and the LTO cannot claim that they based the ABC of MVPSP on the 2014 NEP when the procurement
was commenced.

Worse, on July 22, 2013, the DOTC issued the notice of award to JKG-Power Plates still without a corresponding
appropriation under GAA 2013 and, necessarily, without an allotment issued by the DBM. This was contrary to the provisions
of GPPB Circular No. 01-2009, to wit:chanroblesv irt uallawl ibra ry

4.7 The notice of award, regardless of whether the procurement is to be conducted through competitive bidding or any of the
alternative methods of procurement, shall only be made under the following instances: chan roble svirtuallaw lib rary

4.7.1 Upon receipt of the ABM or SARO for the full cost of the project; and

4.7.2 Upon receipt of actual cash transfer for GOCCs/LGUs.


All told, the provisions of R.A. No. 9184 requiring a procuring agency to secure a corresponding appropriation before
engaging in the procurement process must be upheld. The law was so enacted to protect the welfare of the prospective
bidders and the general public. Unless R.A. No. 9184 is amended or repealed, all future government projects must first have
a sufficient appropriation before engaging the procurement activity.

MYOA must be secured before the commencement of the procurement process

MYOA or Multi-Year Obligational Authority is an authorization document issued by the DBM to government agencies that
undertake MYP with funding requirements spread over two (2) years or more. Such projects are evidenced by MYC entered
into by the parties. In GAA 2013, the requirement of MYOA is stated as follows: chanrob lesvi rtua llawlib ra ry

Sec. 21. Contracting Multi-Year Projects. In the implementation of multi-year projects where the total cost is not provided in
this Act, department, bureaus and offices shall request the DBM for the issuance of a Multi-Year Obligational Authority
following the guidelines under DBM Circular Letter No. 2004-12 dated October 27, 2004. Notwithstanding the issuance of a
Multi-Year Obligation Authority, the obligation to be incurred in any given year, shall in no case exceed the allotment
released for the purpose during the year.
As early as October 27, 2004, the DBM issued the DBM Circular No. 2004-12 to prescribe the guidelines and procedure to
implement the MYOA requirement. The circular defines the different terms affecting MYOA, such as: chanroblesv irt uallawl ibra ry

3.1 Multi-Year Obligational Authority (MYOA) - refers to an authority issued by the Department of Budget and Management
(DBM) to enable an agency to enter into a multi-year contract whether for locally funded projects (LFPs) or foreign assisted
projects (FAPs).

3.2 Multi-Year Project (MYP) - refers to a program/project which will take more than one (1) year to complete including
suppliers' credit. These may be classified into:

a. MYPs with appropriations available in full during the first year of implementation
b. MYPs which require multi-year appropriations; and
c. Annual Recurring Projects/Activities which require multi- year appropriations
3.3 Multi-Year Contract (MYC) - refers to a contract for MYPs the implementation of which will take more than one year to
complete, and require multi-year appropriations. Thus, contract executed for MYPs with appropriations available in
full during the first year of implementation, or those falling under 3.2.a above, do not fall under this
definition. (Emphases supplied)
The GPPB, as the implementing body of R.A. No. 9184, considered the effects of MYOA on government procurement and
issued GPPB Circular No. 01-2009 on January 20, 2009, as follows: chan roblesv irt uallawl ibra ry

4.5 For MYPs, for which the initial funding � sourced from either the existing/current year's budget or the NEP � is not
sufficient to cover the total cost of the project, it is required that a MYOA must already have been issued in accord with DBM
Circular Letter 2004-12 prior to commencement of any procurement activity. Thus, the MYOA shall be a pre-requisite for
procurement of a multiyear contract. All procurement activities should be within the total project cost and categories
reflected in the MYOA issued by DBM for the said MYP. (Emphasis supplied)
The same policy was expounded in GPPB Circular No. 2010-9, issued on December 30, 2010, viz: chan roble svirtuallaw lib rary

5.4 Consistent with DBM Circular Letter No. 2004-12, prior to-the procurement of multi-year contracts for MYPs, the
procuring agency should first secure a MYOA from DBM. This pre-requisite shall ensure that funding of the
procurement activities of such MYP is within the total project cost and categories (e.g. civil work, vehicles, equipment,

59
materials, consultancy, training, operation and maintenance, taxes, loan charges, contingencies and others) reflected in the
MYOA. Consistent with the amended DBM Circular on the issuance of MYOA, the MYOA to be issued shall be supported with
the Project Evaluation Report (PER) of the Investment Coordination Committee - Technical Board (ICC-TB). Upon approval of
the projects by the ICC Cabinet Committee/BEDA Board, the same shall be forwarded by the agency concerned to DBM for
reference. (Emphasis supplied)
Likewise, Budget Secretary Florencio Ahad issued a memorandum39 on October 18, 2010 as a Primer on MYOA. Its salient
provision reads:c hanro blesvi rt uallawl ibra ry

Multi-Year Projects for which the initial funding sourced either from the existing/current year's budget or the National
Expenditure Program (NEP) - is not sufficient to cover the total cost of the project, it is required that MYOA must already
have been issued prior to the commencement of any procurement activity. (Emphasis and underscoring supplied)
The DBM explained the nature of MYOA.40 When the government entered into MYC, it was committed to annually pay a given
amount to the contractor/supplier of the project, even without the government planning for its payment. Thus, the
imperative for MYOA arose, which gave an assurance that the financial commitments included in MYC are considered in the
succeeding proposed budget submitted to Congress. With the issuance of MYOA, the DBM commits to recommend to
Congress the funding of the MYP until its completion. Evidently, without MYOA, the government runs the risk of breach of
contractual obligations if its financial commitments are not met for lack of funding.

The case of COMELEC v. Quijano-Padilla,41 involving the procurement of the Voter's Registration and Identification System
Project (VRIS Project), mentioned the requirement of MYOA. The said project was awarded to PHOTOKINA on account of its
bid in the amount of P6.588 billion. Under the GAA, however, the appropriated fund for the project was only PI billion.
PHOTOKINA argued that the awarded project was only for the Phase I of the whole VRIS Project and, thus, there was no
need to allocate for the entire fund. The Court disagreed with such argument because no MYOA was secured by the procuring
agency. The Court held that not only was the arrangement disallowed by our budgetary laws and practices, but it was also
disadvantageous to the COMELEC because of the uncertainty that loomed over its modernization project for an indefinite
period of time.

Here, petitioner contends that MVPSP is MYP and it involves MYC, but the DOTC failed to secure the necessary MYOA. The
OSG, on the other hand, argues that although MVPSP is MYP, it does not involve MYC because the appropriations for the
project was available in full during its first year of implementation in 2014, thus, there was no need to secure the MYOA.

Indeed, MVPSP falls within the definition of MYP because it is a project which will take more than one (1) year to complete.
Whether MVPSP involves MYC, however, depends on the determining factor of the availability of appropriation in full
during its first year of implementation. If in the affirmative, then the project is MYP that does not involve MYC;
otherwise, it is MYP that involves MYC. and necessarily requires MYOA.

The ultimate question, therefore, is: what is considered the first year of implementation of MVPSP?

Petitioner contends that the first year of implementation of the project was fiscal year 2013 when the notice of award was
issued to JKG-Power Plates on July 22, 2013, pursuant to the invitation to bid. The OSG, on the other hand, avers that it was
fiscal year 2014, after the contract was signed by the parties on February 21, 2014, citing the DOJ Resolution.42

The Court holds that the first year of implementation of MVPSP was 2013 when the notice of award was issued on July 22,
2013. The issuance of the notice of award ignites the implementation stage of a project, and the procuring agency must
ensure that funds are fully allotted therein. An agency can only issue a notice of award once the DBM has released a SARO or
ABM for the full cost of the project.43 If the funds are not fully allotted to the project at the time the notice of award was
issued, then MYOA will guarantee that the DBM commits to recommend to Congress the funding of the project until its
completion. Thus, MVPSP is MYP, which involves MYC and requires MYOA.

This will prevent the scheme of delaying the project to circumvent the requirement of MYOA. As stated earlier, Sec. 38 of
R.A. No. 9184 provides that the procurement process, from the opening of bids up to the award of contract, shall not exceed
three (3) months. This is a mandatory "provision and non-compliance thereto shall affect the validity of the bidding process.
Procuring agencies have no other option but to observe the 3-month period and issue the notice of award on time. Thus,
they will be forced to secure the MYOA from the DBM beforehand.

The Court cannot uphold the position of the OSG because of its detrimental implications. Like in the case at bench, the
procuring agencies that did not have the requisite MYOA could simply postpone the signing of the contract until Congress
appropriated the full amount of the project. It would defeat the very essence of MYOA which seeks to prevent delays in the
implementation of the project due to lack of budget.

As to the issue of when the MYOA should be secured by the procuring agency, DBM Circular No. 2004-12 does not provide for
a time period. GPPB Circular No. 01-2009, GPPB Circular No. 2010-9 and DBM Memorandum October 18, 2010, nonetheless,
state that MYOA must be secured before the procurement begins. This is in line with the policy of R.A. No. 9184 that a
government project's budget must be fully appropriated at the start of the procurement process.

Based on the foregoing discussion, a procuring agency must ensure that it has a sufficient appropriation for the project
before commencing the procurement activity. If the procuring agency believes that the project will not be given its full
appropriation by the time the notice of award is to be issued, then the procuring agency must also secure the MYOA from the
60
DBM at the start of the procurement process. Hence, the general public will be assured that the government projects are
adequately funded and their implementation will not be delayed. These are the practices that must be instilled to achieve
effective fiscal governance.

The review and approval of the ICC/NEDA is not required for MVPSP

Petitioner alleges that MVPSP must be reviewed and approved by the ICC/NEDA under R.A. No. 7718. The OSG counters that
MVPSP is not covered by R.A. No. 7718 because it is neither an investment nor a BOT project.

The Court agrees with the OSG that MVPSP is not covered by R.A. No. 7718. The difference between R.A. No. 7718 and R.A.
No. 9184 has been discussed in the case of Department of Foreign Affairs v. Judge Falcon,44 as follows: chanrob lesvi rtual lawlib rary

Undeniably, under the BOT Law, wherein the projects are to be privately funded, the entire information technology
project, including the civil works component and the technological aspect thereof, is considered an infrastructure or
development project and treated similarly as traditional "infrastructure" projects, xxxx

In contrast, under Republic Act No. 9184 or the Government Procurement Reform Act, which contemplates
projects to be funded by public funds, the term "infrastructure project" was limited to only the "civil works component"
of information technology projects, xxx (Emphasis supplied)
Moreover, in a letter,45 dated December 13, 2012, the NED A stated that MVPSP was part, of the mandate of the LTO; that it
did not involve capital investment; and that it would be financed by the national government. It further noted that the
project was not covered by R.A. No. 7718, but by R.A. No. 9184. At this point, there is no need to belabor on the other
arguments of petitioner.chanRoble svi rtual Lawli bra ry

Conclusion

The Court concludes that MVPSP did not follow the timelines provided in Sec. 37 of R.A. No. 9184. As earlier recited, the
project did not have the adequate appropriation when its procurement was commenced on February 20, 2013, contrary to
the provisions of Sections 5a, 7 and 20 of R.A. No. 9184. The DOTC and the LTO likewise failed to secure the MYOA before
the start of the procurement process even though MVPSP is MYP involving MYC. All these irregularities tainted the earlier
procurement process and rendered it null and void.

At the outset, however, the Court has stated that the present petition has been rendered moot and academic by the
appropriation for the full amount of the project fund in GAA 2014. Said appropriation "cured" whatever defect the process
had.

As to whether the responsible public officials should be held accountable for the irregularities in the procurement process of
MVPSP, the Court deems that it is not the proper forum to resolve the issue as it is not a trier of facts and it cannot receive
new evidence from the parties to aid it in the prompt resolution of the issue.46

WHEREFORE, the petition is DISMISSED for being moot and academic.

61
AR EAST BANK AND TRUST COMPANY, Petitioner, v. LILIA S. CHUA, Respondent.

DECISION

LEONEN, J.:

Respondent Lilia S. Chua (Chua) was dismissed by petitioner Far East Bank and Trust Co. (Far East Bank) due to a finding
that she engaged in multiple kiting transactions which was a serious violation of Far East Bank's Code of Conduct. The Labor
Arbiter ruled that there was illegal dismissal. This was reversed by the National Labor Relations Commission. Chua
participated in the appeal proceedings before the National Labor Relations Commission.

The Court of Appeals reversed the National Labor Relations Commission's ruling, stating that Far East Bank's appeal before
the National Labor Relations Commission was not perfected.

We are asked in this Petition to reverse the ruling of the Court of Appeals.

Chua was employed as a bank executive by Far East Bank, rising through the latter's ranks and holding the position of
Assistant Vice President from October 1, 1997 until the termination of her employment.1 redarc law

It is not disputed that on July 1, 1999, Chua's employment was terminated as Far East Bank found Chua to have engaged in
multiple kiting transactions,2 which are fraudulent transactions "involving the] drawing out [of] money from a bank account
that does not have sufficient funds [in order] to cover [a] check."3 redarclaw

Assailing Far East Bank's basis for terminating her employment, Chua filed a Complaint for illegal dismissal and monetary
claims before the Regional Arbitration Branch XII, Cotabato City of the National Labor Relations Commission.4 reda rclaw

In the course of the proceedings before the Regional Arbitration Branch, the parties were ordered to submit their respective
Position Papers. Despite an extension having been given to Far East Bank, it failed to timely file its Position Paper.5 reda rclaw

On April 25, 2000, Executive Labor Arbiter Quintin B. Cueto III (Executive Labor Arbiter Cueto) rendered a Decision6 finding
Chua to have been illegally dismissed. The dispositive portion of the Decision reads:
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WHEREFORE, in view of the foregoing, judgment is hereby rendered declaring the dismissal of the complainant Lilia S.
Chua by respondent FAR EAST BANK AND TRUST COMPANY (FEBTC) ILLEGAL, thereby entitling her to reinstatement
and full backwages inclusive of allowances and other benefits computed from the time her compensation was withheld from
her up to the time of her actual reinstatement.

Respondent FEBTC is hereby ordered to pay the backwages of the complainant until April 25, 2000 (date of this decision) and
her other benefit [sic] as above-discussed for the interim total of ONE MILLION ONE HUNDRED EIGHTY-ONE
THOUSAND EIGHT HUNDRED FOUR PESOS & 19/100 (P1,181,804.19).

All other additional claims of the complainant as discussed above are still to be substantiated inorder [sic] for Us to arrive at
an accurate computation.

SO ORDERED. 7 cralawlawlibra ry

On the same date, Far East Bank filed a Motion to admit its Position Paper. On May 15, 2000, this Motion was denied.8 reda rc law

On May 25, 2000, Far East Bank directly filed its Notice of Appeal and Memorandum of Appeal before the National Labor
Relations Commission.9 redarclaw

On April 30, 2001, the National Labor Relations Commission Fifth Division issued a Resolution10 reversing and setting aside
the April 25, 2000 Decision of Executive Labor Arbiter Cueto.11 It held that Far East Bank's delay of "a few days"12 in filing its
Position Paper was excusable, especially considering that it and its counsel were based in different cities, Cotabato City and
General Santos City, respectively.13 It added that it was successfully shown by Far East Bank that Chua "had indeed
committed irregular acts in relation to his [sic] position as Assistant Vice President[,]"14 "acts that would constitute for [sic]
loss of trust and confidence[,]"15 thereby justifying the termination of her employment.

Chua then filed a Motion for Reconsideration16 dated May 25, 2001, relying on the following grounds:
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ALTHOUGH THE HONORABLE COMMISSION WAS CORRECT IN THE ORDER OF THE PRESENTATION OF THE ISSUES IN THAT
THE 1st WAS "WHETHER OR NOT RESPONDENTS ARE GUILTY OF INEXCUSABLE DELAY AND NEGLECT FOR FAILURE TO
SUBMIT THEIR POSITION PAPER BEFORE THE ARBITRATION BRANCH OF ORIGIN[,]" BECAUSE IF THE ANSWER IS IN THE
NEGATIVE, THEN THE APPEAL SHOULD BE CONFINED ONLY TO THE APPEALED DECISION OF THE RAB XII, YET, NOT ONLY
WAS THIS ISSUE SKIPPED BY THE HONORABLE COMMISSION, BUT IN RESOLVING THIS ISSUE, THE HONORABLE

62
COMMISSION DEPENDED ON THE POSITION PAPER OF APPELLANTS, WHICH WAS THE VERY FIRST ISSUE UNDER
CONSIDERATION.17 redarc law

SINCE WHAT IS THE SUBJECT OF THE APPEAL IS THE DECISION OF THE RAB XII, IT OUGHT TO HAVE BEEN WHAT THE
HONORABLE COMMISSION SHOULD HAVE REVIEWED AS AN APPELLATE BODY YET NOT ONLY WAS THE DECISION OF RAB
XII SKIPPED BY THE HONORABLE COMMISSION BUT IN DETERMINING THE FACT [sic] OF THE CASE THE HONORABLE
COMMISSION ENTIRELY DEPENDED ON THE MATTERS PRESENTED IN THE POSITION PAPER OF RESPONDENTS, THE
ADMISSION OR THE DENIAL OF ADMISSION OF THE SAME WAS NOT ONLY THE FIRST ISSUE BUT THE RESOLUTION OF
WHICH WAS SKIPPED BY THE HONORABLE COMMISSION.18 redarclaw

EVERY MATERIAL POINT RAISED BY RESPONDENTS IN ITS POSITION PAPER THE ADMISSION AND DENIAL OF WHICH HAS
NOT BEEN RESOLVED BY THE HONORABLE COMMISSION HAS BEEN TOUCHED IN THE DECISION OF THE RAB XII, WHICH IS
THE CENTERPIECE OF REVIEW, AND THE POSITION PAPER OF APPELLEE WHICH LEGALLY, FORMS PART OF THE RECORD[S]
OF THE CASE, AND THE LEAST THAT THE HONORABLE COMMISSION COULD HAVE DONE WAS TO REVIEW BOTH THEN
COMPARE IT WITH THE FACTS AS PRESENTED BY THE RESPONDENTS IN THEIR POSITION PAPER WITH THE DOCUMENTS
AVAILABLE ON HAND AS CONFIRMATORY EVIDENCE, AND HAD THIS BEEN DONE, UNDOUBTEDLY, THE CONCLUSION THAT
WOULD HAVE BEEN ARRIVED AT WAS THAT THE CASE OF APPEALLEE [sic] IS MERITORIOUS. 19
In the Resolution dated December 21, 2001, the National Labor Relations Commission denied Chua's Motion for
Reconsideration.20 re darc law

Aggrieved, Chua filed a Petition21 for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure before the Court of
Appeals. Chua averred the following issue in this Petition:
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ISSUE

WHETHER OR NOT PUBLIC RESPONDENT ACTED WITHOUT OR IN EXCESS OF JURISDICTION OR WITH GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR IN EXCESS OF JURISDICTION IN TAKING COGNIZANCE OF THE DIRECTLY FILED
UNPERFECTED APPEAL OF RESPONDENTS22
Specifically, Chua claimed that the National Labor Relations Commission should not have entertained Far East Bank's appeal
for the following reasons: first, it failed to "pay the appeal fee of P100.00;"23 second, it failed to "post the appeal bond
equivalent to the amount of the monetary award;"24 third, it failed to "attach a certification of non-forum shopping[;]"25 and
fourth, it "directly filed its appeal with public respondent [National Labor Relations Commission] contrary to the
requirements of Rule VI, Section 326of the New Rules of Procedure of the National Labor Relations Commission."27 redarclaw

In its assailed June 30, 2008 Decision,28 the Court of Appeals Twenty-third Division declared the April 30, 2001 and
December 21, 2001 Resolutions of the National Labor Relations Commission null and void and reinstated Executive Labor
Arbiter Cueto's April 25, 2000 Decision.29 reda rclaw

Citing Rule VI, Sections 3 and 430 of the 1999 Rules of Procedure of the National Labor Relations Commission31 which were
then in effect, the Court of Appeals stated that it "is clear and unambiguous that the memorandum on appeal must be filed
with the Regional Arbitration Branch which rendered the decision sought to be appealed."32 As Far East Bank's
Notice of Appeal and Memorandum of Appeal were both directly filed before the National Labor Relations Commission (rather
than being filed before the Regional Arbitration Branch XII, Cotabato City), the Court of Appeals concluded that "no appeal
before public respondent [National Labor Relations Commission] could have been perfected."33Thus, Executive Labor Arbiter
Cueto's April 25, 2000 Decision "has attained finality[.]"34 redarclaw

In its assailed March 20, 2009 Resolution,35 the Court of Appeals denied Far East Bank's Motion for Reconsideration.36 reda rclaw

Hence, this Petition37 was filed.

For resolution is the sole issue of whether Executive Labor Arbiter Quintin B. Cueto Ill's April 25, 2000 Decision attained
finality in light of petitioner Far East Bank and Trust Co.'s direct filing of its appeal before the National Labor Relations
Commission, rather than before the Regional Arbitration Branch XII, Cotabato City.
I

Petitioner admits to directly filing its Memorandum of Appeal before the National Labor Relations Commission.38 However, it
banks on what it claims was the National Labor Relations Commission's "discretion to admit appeal[s] directly filed with it on
reasonable and meritorious grounds[.]"39 It argues thus that "[i]n accepting the appeal memorandum which petitioner
directly filed with it, the [National Labor Relations Commission] was guided by its own policy that, in line with the
jurisprudence set by the Supreme Court, technicalities in labor cases must yield to substantial justice."40 redarclaw

Apart from this, petitioner faults respondent for raising the issue of jurisdiction for the first time in her Rule 65 Petition before
the Court of Appeals. It asserts that because of respondent's failure to timely raise this matter while petitioner's own appeal
was still pending before the National Labor Relations Commission, estoppel set in and respondent could not belatedly
repudiate the adverse decision by only then invoking the issue of jurisdiction.41 reda rclaw

63
Petitioner's contentions are well-taken. A mere procedural lapse in the venue where petitioner filed its Memorandum of
Appeal is not fatal to its cause. This is especially so in light of how respondent estopped herself in failing to raise the issue of
jurisdiction while petitioner's appeal was pending before the National Labor Relations Commission. Respondent is bound by
her inaction and cannot belatedly invoke this issue on certiorari before the Court of Appeals.
II

In a long line of cases, this court has held that "[a]lthough the issue of jurisdiction may be raised at any stage of the
proceedings as the same is conferred by law, it is nonetheless settled that a party may be barred from raising it on ground of
laches or estoppel."42 reda rclaw

The rule is stated in La'O v. Republic of the Philippines and the Government Service Insurance System:43
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While it is true that jurisdiction over the subject matter of a case may be raised at any stage of the proceedings since it is
conferred by law, it is nevertheless settled that a party may be barred from raising it on the ground of estoppel. After
voluntarily submitting a cause and encountering an adverse decision on the merits, it is improper and too late for the losing
party to question the jurisdiction of the court. A party who has invoked the jurisdiction of a court over a particular matter to
secure affirmative relief cannot be permitted to afterwards deny that same jurisdiction to escape liability.44 (Citations
omitted)
The wisdom that underlies this was explained at length in Tijam, et al. v. Sibonghanoy, et al.:45
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A party may be estopped or barred from raising a question in different ways and for different reasons. Thus we speak of
estoppel in pais, of estoppel by deed or by record, and of estoppel by laches.

Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.

The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires, for the peace of society,
the discouragement of stale claims and, unlike the statute of limitations, is not a mere question of time but is principally a
question of the inequity or unfairness of permitting a right or claim to be enforced or asserted.

It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and,
after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction. In the case just cited, by way of
explaining the rule, it was further said that the question whether the court had jurisdiction either of the subject matter of the
action or of the parties was not important in such cases because the party is barred from such conduct not because the
judgment or order of the court is valid and conclusive as an adjudication, but for the reason that such a practice cannot be
tolerated � obviously for reasons of public policy.

Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the
merits, it is too late for the loser to question the jurisdiction or power of the court. And in Littleton vs. Burgess, 16 Wyo. 58,
the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to
secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.

Upon this same principle is what We said in the three cases mentioned in the resolution of the Court of Appeals of May 20,
1963 (supra) � to the effect that we frown upon the "undesirable practice" of a party submitting his case for decision and
then accepting the judgment, only if favorable, and attacking it for lack of jurisdiction, when adverse � as well as in
Pindangan etc. vs. Dans et al., G. R. L-14591, September 26, 1962; Montelibano et al. vs. Bacolod-Murcia Milling Co., Inc.,
G. R. L-15092; Young Men Labor Union etc. vs. the Court of Industrial Relations et al., G. R. L-20307, Feb. 26, 1965, and
Mejia vs. Lucas, 100 Phil. p. 277.46 (Citations omitted)
III

The rationale that animates the rule on estoppel vis-a-vis jurisdiction applies with equal force to quasi-judicial agencies as it
does to courts. The public policy consideration that frowns upon the undesirable practice of n submitting a case for decision
only to subsequently decry the supposed lack of jurisdiction is as compelling in cases concerning the National Labor Relations
Commission as it is to courts of law.

In this respect, it is of no consequence that distinctions may be drawn between administrative agencies, on the one hand,
and judicial bodies, on the other.

Courts derive their authority from the Constitution's recognition that they shall be the sole and exclusive investees of judicial
power. This, even as the Constitution leaves to the legislature the authority to establish lower courts, as well as "to define,
prescribe, and apportion the jurisdiction of the various courts[,]"47 except of this court. Article VIII, Section 1 of the 1987
Constitution provides that "[t]he judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law."

For their part, administrative agencies are statutory constructs. Thus, they are limited by the statutes which created them
and which spelled out their powers and functions. "It is a fundamental rule that an administrative agency has only such

64
powers as are expressly granted to it by law and those that are necessarily implied in the exercise
thereof[.]"48 Administrative agencies may exercise quasi-judicial powers, but only to the extent warranted by administrative
action. They may not exercise judicial functions. This is illustrated in Philex Mining Corporation v. Zaldivia, et al.,49 which
distinguished between judicial questions and "questions of fact."50 It is only the latter � questions of fact � which was ruled
to be within the competence of the Director of Mines to resolve:
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We see nothing in sections 61 and 73 of the Mining Law that indicates a legislative intent to confer real judicial power upon
the Director of Mines. The very terms of section 73 of the Mining Law, as amended by Republic Act No. 4388, in requiring
that the adverse claim must "state in full detail the nature, boundaries and extent of the adverse claim" show that the
conflicts to be decided by reason such adverse claim refer primarily to questions of fact. This is made even clearer by the
explanatory note to House Bill No. 2522, later to become Republic Act 4388, that "sections 61 and 73 that refer to the
overlapping of claims are amended to expedite resolutions of mining conflicts. . . ." The controversies to be submitted and
resolved by the Director of Mines under the sections refer therefore only to the overlapping of claims, and administrative
matters incidental thereto.

As already shown, petitioner's adverse claim is not one grounded on overlapping of claims nor is it a mining conflict arising
out of mining locations (there being only one involved) but one originating from the alleged fiduciary or contractual
relationship between petitioner and locator Scholey and his transferees Yrastorza and respondent Zaldivia. As such, the
adverse claim is not within the executive or administrative authority of the mining director to resolve, but in that of the
courts, as it has been correctly held, on the basis of the doctrine stated in Espinosa vs. Makalintal, 79 Phil. 134.51 (Emphasis
supplied)
Unlike courts, the National Labor Relations Commission's existence is not borne out of constitutional fiat. It owes its
existence to Article 213 of the Labor Code:
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Art. 213. National Labor Relations Commission. There shall be a National Labor Relations Commission which shall be
attached to the Department of Labor and Employment for program and policy coordination only, composed of a Chairman
and fourteen (14) Members. (Emphasis in the original)
So, too, its jurisdiction (as well as those of Labor Arbiters) is spelled out by Article 217 of the Labor Code:
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Art. 217. Jurisdiction of the Labor Arbiters and the Commission.

1. Except as otherwise provided under this Code, the Labor Arbiters shall have original and exclusive
jurisdiction to hear and decide, within thirty (30) calendar days after the submission of the case by the
parties for decision without extension, even in the absence of stenographic notes, the following cases
involving all workers, whether agricultural or non-agricultural: Lawl ibra ryofCRAlaw

1. Unfair labor practice cases; chanRobles virtua lLawl ibra ry

2. Termination disputes; chanRob lesvi rtua lLawl ibra ry

3. If accompanied with a claim for reinstatement, those cases that workers may file involving wages,
rates of pay, hours of work and other terms and conditions of employment; chanRoble svirtual Lawlib ra ry

4. Claims for actual, moral, exemplary and other forms of damages arising from the employer-
employee relations: Lawl ibra ryofCRAlaw

5. Cases arising from any violation of Article 264 of this Code, including questions involving the legality
of strikes and lockouts; and
6. Except claims for Employees Compensation, Social Security, Medicare and maternity benefits, all
other claims arising from employer-employee relations, including those of persons in domestic or
household service, involving an amount exceeding five thousand pesos (P5,000.00) regardless of
whether accompanied with a claim for reinstatement.

2.
The Commission shall have exclusive appellate jurisdiction over all cases decided by Labor Arbiters.
3.
Cases arising from the interpretation or implementation of collective bargaining agreements and those
arising from the interpretation or enforcement of company personnel policies shall be disposed of by the
Labor Arbiter by referring the same to the grievance machinery and voluntary arbitration as may be
provided in said agreements. (Emphasis in the original)
Nevertheless, there is no basis for distinguishing between courts and quasi-judicial agencies with respect to the effects of a
party's failure to timely assail errors in jurisdiction. These effects have nothing to do with the distinction between the
competencies of courts and quasi-judicial agencies as spelled out by the Constitution and statutes.

In a long line of cases, this court has held the rule on estoppel vis-a�-vis jurisdiction, as initially articulated in 1968
in Tijam to be equally applicable to cases involving the National Labor Relations Commission (and its related agencies).

By way of example, in Philippine Overseas Drilling and Oil Development Corporation v. Hon. Ministry of Labor,52 this court
stated:
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Petitioner is now barred by estoppel from raising the issue of jurisdiction, regardless of its merits. In the case of Tijam vs.
Sibonghanoy, April 15, 1968, 23 SCRA 29, the Court laid down the rule of estoppel to raise the question of jurisdiction. This
rule was reiterated in numerous cases enumerated in the decision in the case of Solicitor General vs. Colomapromulgated on
July 7, 1986. In the case of Akay Printing Press vs. Minister of Labor and Employment, the Court ruled as follows:
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65
When the illegal dismissal case was pending before the MOLE Regional Director, petitioner did not raise the issue of
jurisdiction either during the hearing or in its subsequent motion for reconsideration. Its defense was a stout denial of the
dismissal of private respondents, who were averred instead to have abandoned their work. After the adverse decision of the
Regional Director and upon the elevation of the case on appeal to the Ministry of Labor and Employment, still no jurisdictional
challenge was made. It was only when petitioner moved to reconsider the MOLE decision of affirmance that it assailed the
jurisdiction of the Regional Director. But then, it was too late. Estoppel had barred him from raising the issue, regardless of
its merits. (December 6, 1985, 140 SCRA 381, 384)53
Likewise, as stated in M. Ramirez Industries v. Secretary of Labor and Employment:54
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Moreover, petitioner is estopped from questioning the jurisdiction of the Regional Director, having previously invoked it by
filing a motion to dismiss. As has been held:
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[A] party can not invoke the jurisdiction of a court to secure affirmative relief against his opponent and, after obtaining or
failing to obtain such relief, repudiate or question that same jurisdiction.

In the case just cited, by way of explaining the rule, it was further said that the question whether the court had jurisdiction
either of the subject-matter of the action or of the parties is barred from such conduct not because the judgment or order of
the court is valid and conclusive as an adjudication, but for the reason that such a practice can not be tolerated � obviously
for reasons of public policy.

Furthermore, it has also been held that after voluntarily submitting a cause and encountering an adverse decision on the
merits, it is too late for the loser to question the jurisdiction or power of the court . . . And in Littleton vs. Burges, Wyo, 58,
the Court said that it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to
secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.55
IV

Article 218 of the Labor Code vests in the National Labor Relations Commission the authority to adopt procedural rules:
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Art. 218. Powers of the Commission. The Commission shall have the power and authority: Lawlib raryofCRAlaw

1.
To promulgate rules and regulations governing the hearing and disposition of cases before it and its regional
branches, as well as those pertaining to its internal functions and such rules and regulations as may be
necessary to carry out the purposes of this Code[.]
It is consistent with this power that the National Labor Relations Commission adopted the rules that are at the core of the
present controversy. Rule VI, Section 3 of the 1999 Rules of Procedure of the National Labor Relations Commission that were
in effect when petitioner appealed from Executive Labor Arbiter Cueto's Decision provides for the requisites that must be
satisfied in order that an appeal from a decision of a Labor Arbiter may be perfected:
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Section 3. Requisites for Perfection of Appeal. � (a) The appeal shall be filed within the reglementary period as provided in
Section 1 of this Rule; shall be under oath with proof of payment of the required appeal fee and the posting of a cash or
surety bond as provided in Section 5 of this Rule; shall be accompanied by a memorandum of appeal which shall state the
grounds relied upon and the arguments in support thereof; the relief prayed for; and a statement of the date when the
appellant received the appealed decision, order or award and proof of service on the other party of such appeal.

A mere notice of appeal without complying with the other requisite aforestated shall not stop the running of the period for
perfecting an appeal.

(b) The appellee may file with the Regional Arbitration Branch, Regional Office or in the POEA where the appeal was filed, his
answer or reply to appellant's memorandum of appeal, not later than ten (10) calendar days from receipt thereof. Failure on
the part of the appellee who was properly furnished with a copy of the appeal to file his answer or reply within the said
period may be construed as a waiver on his part to file the same.

(c)� Subject to the provisions of Article 218, once the appeal is perfected in accordance with these rules, the Commission
may limit itself to reviewing and deciding specific issues that were elevated on appeal. (Emphasis in the original)
Rule VI, Section 4 of the same rules stipulates where appeals must be filed:
ChanRobles Vi rtualaw lib rary
Lawlib ra ryofCRAlaw

Section 4. Where Filed. � The appeal in five (5) legibly typewritten copies shall be filed with the respective Regional
Arbitration Branch, the Regional Office, or the Philippine Overseas Employment Administration where the case was heard and
decided. (Emphasis in the original)
This venue for filing appeals is unequivocal. The Court of Appeals was thus correct in stating that it "is clear and
unambiguous that the memorandum on appeal must be filed with the Regional Arbitration Branch which rendered the
decision sought to be appealed."56 redarclaw

It is not disputed that this rule was violated by petitioner. In the present Petition, petitioner categorically admitted that it
"filed its memorandum of appeal directly with the [National Labor Relations Commission.]"57 redarclaw

Thus, there is basis for positing, as respondent and the Court of Appeals did, that "no appeal before [the National Labor
Relations Commission] could have been perfected[.]"58 The logical consequence of this position, assuming it is correct, is that
Executive Labor Arbiter Cueto's April 25, 2000 Decision "has attained finality[.]"59 redarclaw

This conclusion, however, fails to consider that the error committed by petitioner pertains to the place for filing appeals and
66
not the requisites for perfecting an appeal which Rule VI, Section 3 enumerates. The place where appeals must be filed is
governed by a distinct provision (i.e., Section 4) and is thus a matter that is different from the requisites for perfecting
appeals. Per Section 3, only the following are necessary in order that petitioner may perfect its appeal:
ChanRobles Vi rtualaw lib rary
Lawl ib raryofCRAlaw

(1) Filing within the applicable reglementary period as provided by Section 1;60 re darc law

(2) That the appeal was under oath;

(3) That the appeal fee must have been paid;

(4) That the appeal bond must have been posted;

(5) A memorandum of appeal which states: Lawlibra ryofCRAlaw

a. the grounds relied upon and the arguments in support of the appeal; chanRoblesv irt ual Lawlib rary

b. the relief sought; and


c. a statement of the date when the assailed decision was received; and
(6) Proof of service of the appeal on the adverse party.
Likewise, this conclusion presupposes that procedural rules in labor cases must be adhered to with uncompromising
exactitude. This is misguided. The same rules which respondent and the Court of Appeals rely on allow for the liberal
application of procedural rules. In Rule VII, Section 10, it states:
ChanRobles Vi rtualaw lib rary
Lawlibra ryofCRAlaw

Section 10. Technical rules not binding. � The rules of procedure and evidence prevailing in courts of law and equity shall
not be controlling and the Commission shall use every and all reasonable means to ascertain the facts in each case speedily
and objectively, without regard to technicalities of law procedure, all in the interest of due process.

In any proceeding before the Commission, the parties may be represented by legal counsel but it shall be the duty of the
Chairman, any Presiding commissioner or Commissioner to exercise complete control of the proceedings at all stages.
The need for liberality in this case is underscored by how the National Labor Relations Commission acquiesced to the filing of
an appeal directly before it. As pointed out by petitioner, not only did the National Labor Relations Commission admit its
Memorandum of Appeal, it also "required petitioner to pay the appeal fee and to post the required bond."61 As the agency
statutorily vested with jurisdiction over petitioner's appeal, petitioner could very easily have mistaken that the filing of its
Memorandum of Appeal was rightly made before the National Labor Relations Commission. If at all, the provision that filing
of a Memorandum of Appeal must be made before the Regional Arbitration Branch is merely a delegation of a function more
appropriately pertaining to the appellate body itself.

In any case, the National Labor Relations Commission could have very easily advised petitioner if there was anything
irregular with its direct filing of a Memorandum of Appeal. Its silence on this matter would have induced in petitioner no other
reasonable conclusion than that direct filing before the National Labor Relations Commission was in keeping with the
procedural requirements for filing appeals.
V

Not only did the National Labor Relations Commission acquiesce to the direct filing of an appeal before it, so did respondent.
The matter of the propriety of the National Labor Relations Commission's assumption of jurisdiction was never raised by
respondent before the Commission. Even after petitioner's appeal had been initially decided against her and she filed her
Motion for Reconsideration, respondent totally overlooked this matter. As was evident from the recital of grounds62 invoked
in her Motion for Reconsideration, respondent's contentions centered merely on the National Labor Relations Commission's
supposedly erroneous reliance on petitioner's Position Paper.

The Court of Appeals thus failed to account for the crucial fact that the issue of jurisdiction was invoked by respondent only
upon her elevation to it of the case. It failed to recognize that respondent had all the opportunity to raise this issue before
the very tribunal whom she claims to have had no competence to rule on the appeal, but that it was only after the same
tribunal ruled against her twice � first, in its initial Resolution and second, in denying her reconsideration � that she saw it
fit to assail its jurisdiction. The Court of Appeals failed to see through respondent's own failure to seasonably act and failed to
realize that she was guilty of estoppel by laches, taking "an unreasonable . . . length of time, to do that which, by exercising
due diligence, could or should have been done earlier[.]"63 reda rclaw

Respondent cannot now profit from her own inaction. She actively participated in the proceedings and vigorously argued her
case before the National Labor Relations Commission without the slightest indication that she found anything objectionable to
the conduct of those proceedings. It is thus but appropriate to consider her as acceding to and bound by how the National
Labor Relations Commission was to resolve and, ultimately did resolve, petitioner's appeal. Its findings that the requisites of
substantive and procedural due process were satisfied in terminating respondent's employment now stand undisturbed.

WHEREFORE, the Petition for Review on Certiorari is GRANTED. The June 30, 2008 Decision and the March 20, 2009
Resolution of the Court of Appeals in CA-G.R. SP No. 69361-MIN are REVERSED and SET ASIDE. The April 30, 2001
Resolution of the National Labor Relations Commission is REINSTATED.

SO ORDERED. cralawlawlibra ry

67
G.R. No. 207145 July 28, 2015

GIL G. CAWAD, MARIO BENEDICT P. GALON, DOMINGO E. LUSAYA, JEAN V. APOLINARES, MA. LUISA S.
OREZCA, JULIO R. GARCIA, NESTOR M. INTIA, RUBEN C. CALIWATAN, ADOLFO Q. ROSALES, MA. LUISA
NAVARRO, and the PHILIPPINE PUBLIC HEALTH ASSOCIATION, INC., Petitioners,
vs.
FLORENCIO B. ABAD, in his capacity as Secretary of the Department of Budget and Management (DBM);
ENRIQUE T. ONA, in his capacity as Secretary of the Department of Health (DOH); and FRANCISCO T.
DUQUE III, in his capacity as Chairman of the Civil Service Commission (CSC), Respondents.

DECISION

PERALTA, J.:

Before the Court is a petition for certiorari and prohibition under Rule 65 of the Rules of Court filed by the officers
and members of the Philippine Public Health Association, Inc. (PPHAI) assailing the validity of Joint Circular No.
11dated November 29, 2012 of the Department of Budget and Management (DBM) and the Department of Health
(DOH) as well as Item 6.5 of the Joint Circular2 dated September 3, 2012 of the DBM and the Civil Service
Commission (CSC).

The antecedent facts are as follows:

On March 26, 1992, Republic Act (RA) No. 7305, otherwise known as The Magna Carta of Public Health
Workerswas signed into law in order to promote the social and economic well-being of health workers, their living
and working conditions and terms of employment, to develop their skills and capabilities to be better equipped to
deliver health projects and programs, and to encourage those with proper qualifications and excellent abilities to join
and remain in government service.3 Accordingly, public health workers (PHWs) were granted the following
allowances and benefits, among others:

Section 20. Additional Compensation. - Notwithstanding Section 12 of Republic Act No. 6758, public health workers
shall receive the following allowances: hazard allowance, subsistence allowance, longevity pay, laundry allowance
and remote assignment allowance.

Section 21. Hazard Allowance. - Public health workers in hospitals, sanitaria, rural health units, main health
centers, health infirmaries, barangay health stations, clinics and other health-related establishments located in
difficult areas, strife-torn or embattled areas, distressed or isolated stations, prisons camps, mental hospitals,
radiation exposed clinics, laboratories or disease-infested areas or in areas declared under state of calamity or
emergency for the duration thereof which expose them to great danger, contagion, radiation, volcanic
activity/eruption, occupational risks or perils to life as determined by the Secretary of Health or the Head of the unit
with the approval of the Secretary of Health, shall be compensated hazard allowances equivalent to at least twenty-
five percent (25%) of the monthly basic salary of health workers receiving salary grade 19 and below, and five
percent (5%) for health workers with<="" b="">

Section 22. Subsistence Allowance. - Public health workers who are required to render service within the premises
of hospitals, sanitaria, health infirmaries, main health centers, rural health units and barangay health stations, or
clinics, and other health-related establishments in order to make their services available at any and all times, shall
be entitled to full subsistence allowance of three (3) meals which may be computed in accordance with
prevailing circumstances as determined by the Secretary of Health in consultation with the Management-Health
Worker's Consultative Councils, as established under Section 33 of this Act: Provided, That representation and
travel allowance shall be given to rural health physicians as enjoyed by municipal agriculturists, municipal planning
and development officers and budget officers.

68
Section 23. Longevity Pay.- A monthly longevity pay equivalent to five percent (5%)of the monthly basic pay shall
be paid to a health worker for every five (5) years of continuous, efficient and meritorious services rendered as
certified by the chief of office concerned, commencing with the service after the approval of this Act.4

Pursuant to Section 355 of the Magna Carta, the Secretary of Health promulgated its Implementing Rules and
Regulations (IRR) in July 1992. Thereafter, in November 1999, the DOH, in collaboration with various government
agencies and health workers' organizations, promulgated a Revised IRR consolidating all additional and clarificatory
rules issued by the former Secretaries of Health dating back from the effectivity of the Magna Carta. The pertinent
provisions of said Revised IRR provide:

6.3. Longevity Pay.- A monthly longevity pay equivalent to five percent (5%)of the present monthly basic pay shall
be paid to public health workers for every five (5) years of continuous, efficient and meritorious services rendered as
certified by the Head of Agency/Local Chief Executives commencing after the approval of the Act. (April 17, 1992)

xxxx

7.1.1. Eligibility to Receive Hazard Pay.- All public health workers covered under RA 7305 are eligible to receive
hazard pay when the nature of their work exposes them to high risk/low risk hazards for at least fifty percent (50%)
of their working hours as determined and approved by the Secretary of Health or his authorized representatives.

xxxx

7.2.1. Eligibility for Subsistence Allowance

a. All public health workers covered under RA 7305 are eligible to receive full subsistence allowance
as long as they render actual duty.

b. Public Health Workers shall be entitled to full Subsistence Allowance of three (3) meals which
may be computed in accordance with prevailing circumstances as determined by the Secretary of
Health in consultation with the Management-Health Workers Consultative Council, as established
under Section 33 of the Act.

c. Those public health workers who are out of station shall be entitled to per diems in place of
Subsistence Allowance. Subsistence Allowance may also be commuted.

xxxx

7.2.3 Rates of Subsistence Allowance

a. Subsistence allowance shall be implemented at not less than Ph₱50.00 per day or Ph₱1,500.00
per month as certified by head of agency.

xxxx

d. Part-time public health workers/consultants are entitled to one-half (1/2)of the prescribed rates
received by full-time public health workers.6

On July 28, 2008, the Fourteenth Congress issued Joint Resolution No. 4, entitled Joint Resolution Authorizing the
President of the Philippines to Modify the Compensation and Position Classification System of Civilian Personnel
and the Base Pay Schedule of Military and Uniformed Personnel in the Government, and for other Purposes,
approved by then President Gloria Macapagal-Arroyo on June 17,2009, which provided for certain amendments in
the Magna Carta and its IRR.

69
On September 3, 2012, respondents DBM and CSC issued one of the two assailed issuances, DBM-CSC Joint
Circular No. 1, Series of 2012, to prescribe the rules on the grant of Step Increments due to meritorious
performance and Step Increment due to length of service.7 Specifically, it provided that "an official or employee
authorized to be granted Longevity Pay under an existing law is not eligible for the grant of Step Increment due to
length of service."8 Shortly thereafter, on November29, 2012, respondents DBM and DOH then circulated the other
assailed issuance, DBM-DOH Joint Circular No. 1, Series of 2012, the relevant provisions of which state:

7.0. Hazard Pay. - Hazard pay is an additional compensation for performing hazardous duties and for enduring
physical hardships in the course of performance of duties.

As a general compensation policy, and in line with Section 21 of R. A. No. 7305, Hazard Pay may be granted to
PHWs only if the nature of the duties and responsibilities of their positions, their actual services, and location of work
expose them to great danger, occupational risks, perils of life, and physical hardships; and only during periods of
actual exposure to hazards and hardships.

xxxx

8.3 The Subsistence Allowance shall be ₱50for each day of actual full-time service, or ₱25for each day of actual
part-time service.

xxxx

9.0 Longevity Pay (LP)

9.1 Pursuant to Section 23 of R.A. No. 7305, a PHW may be granted LP at 5% of his/her current monthly basic
salary, in recognition of every 5 years of continuous, efficient, and meritorious services rendered as PHW. The grant
thereof is based on the following criteria:

9.1.1 The PHW holds a position in the agency plantilla of regular positions; and

9.1.2 He/She has rendered at least satisfactory performance and has not been found guilty of any administrative or
criminal case within all rating periods covered by the 5-year period.

In a letter9 dated January 23, 2013 addressed to respondents Secretary of Budget and Management and Secretary
of Health, petitioners expressed their opposition to the Joint Circular cited above on the ground that the same
diminishes the benefits granted by the Magna Carta to PHWs.

Unsatisfied, petitioners, on May 30, 2013, filed the instant petition raising the following issues:

I.

WHETHER RESPONDENTS ENRIQUE T. ONA AND FLORENCIO B. ABAD ACTED WITH GRAVE ABUSE OF
DISCRETION AND VIOLATED SUBSTANTIVE DUE PROCESS WHEN THEY ISSUED DBM-DOH JOINT
CIRCULAR NO. 1, S. 2012 WHICH:

A) MADE THE PAYMENT OF HAZARD PAY DEPENDENT ON THE ACTUAL DAYS OF


EXPOSURE TO THE RISK INVOLVED;

B) ALLOWED PAYMENT OF SUBSISTENCE ALLOWANCE AT ₱50 FOR EACH DAY OF ACTUAL


FULL-TIME SERVICE OR ₱25 FOR EACH DAY OF ACTUAL PART-TIME SERVICE WITHOUT
CONSIDERATION OF THE PREVAILING CIRCUMSTANCES AS DETERMINED BY THE
SECRETARY OF HEALTH IN CONSULTATION WITH THE MANAGEMENT HEALTH WORKERS'
CONSULTATIVE COUNCILS;

70
C) REQUIRED THAT LONGEVITY PAY BE GRANTED ONLY TO PHWs WHO HOLD PLANTILLA
AND REGULAR POSITIONS; AND

D) MADE THE JOINT CIRCULAR EFFECTIVE ON JANUARY 1, 2013, BARELY THREE (3) DAYS
AFTER IT WAS PUBLISHED IN A NEWSPAPER OF GENERAL CIRCULATION ON DECEMBER
29, 2012, IN VIOLATION OF THE RULES ON PUBLICATION.

II.

WHETHER RESPONDENTS FRANCISCO T. DUQUE AND FLORENCIO B. ABAD ACTED WITH GRAVE ABUSE
OF DISCRETION WHEN THEY ISSUED DBM-CSC JOINT CIRCULAR NO. 1, S. 2012 DATED SEPTEMBER 2,
2012 WHICH PROVIDED THAT AN OFFICIAL OR EMPLOYEE ENTITLED TO LONGEVITY PAY UNDER
EXISTING LAW SHALL NO LONGER BE GRANTED STEP INCREMENT DUE TO LENGTH OF SERVICE.

III.

WHETHER RESPONDENTS' ISSUANCE OF DBM-DOH JOINT CIRCULAR NO. 1, S. 2012 IS NULL AND VOID
FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY ADMINISTRATIVE BODIES WHEN
RESPONDENT ONA ALLOWED RESPONDENT ABAD TOSIGNIFICANTLY SHARE THE POWER TO
FORMULATE AND PREPARE THE NECESSARY RULES AND REGULATIONS TO IMPLEMENT THE
PROVISIONS OF THE MAGNA CARTA.

IV.

WHETHER RESPONDENT ONA WAS REMISS IN IMPLEMENTING THE MANDATE OF THE MAGNA CARTA
WHEN HE DID NOT INCLUDE THE MAGNA CARTA BENEFITS IN THE DEPARTMENT'S YEARLY BUDGET.

V.

WHETHER RESPONDENTS' ISSUANCE OF DBM-DOH JOINT CIRCULAR NO. 1, S. 2012 IS NULL AND VOID
FOR BEING AN UNDUE EXERCISE OF LEGISLATIVE POWER BY ADMINISTRATIVE BODIES WHEN THE
SAME WAS ISSUED SANS CONSULTATION WITH PROFESSIONAL AND HEALTH WORKERS'
ORGANZATIONS AND UNIONS.

Petitioners contend that respondents acted with grave abuse of discretion when they issued DBM-DOH Joint
Circular No. 1, Series of 2012 and DBM-CSC Joint Circular No. 1, Series of 2012 which prescribe certain
requirements on the grant of benefits that are not otherwise required by RA No. 7305. Specifically, petitioners assert
that the DBM-DOH Joint Circular grants the payment of Hazard Pay only if the nature of the PHWs' duties expose
them to danger when RA No. 7305 does not make any qualification. They likewise claim that said circular unduly
fixes Subsistence Allowance at ₱50 for each day of full-time service and ₱25 for part-time service which are not in
accordance with prevailing circumstances determined by the Secretary of Health as required by RA No. 7305.
Moreover, petitioners fault respondents for the premature effectivity of the DBM-DOH Joint Circular which they
believe should have been on January 29, 2012 and not on January 1, 2012. As to the grant of Longevity Pay,
petitioners posit that the same was wrongfully granted only to PHWs holding regular plantilla positions. Petitioners
likewise criticize the DBM-CSC Joint Circular insofar as it withheld the Step Increment due to length of service from
those who are already being granted Longevity Pay. As a result, petitioners claim that the subject circulars are void
for being an undue exercise of legislative power by administrative bodies.

In their Comment, respondents, through the Solicitor General, refute petitioners' allegations in stating that the
assailed circulars were issued within the scope of their authority, and are therefore valid and binding. They also
assert the authority of Joint Resolution No. 4, Series of 2009, approved by the President, in accordance with the
prescribed procedure. Moreover, respondents question the remedies of Certiorari and Prohibition used by
petitioners for the assailed circulars were done in the exercise of their quasi-legislative, and not of their judicial or
quasi-judicial functions.

71
The petition is partly meritorious.

At the outset, the petition for certiorari and prohibition filed by petitioners is not the appropriate remedy to assail the
validity of respondents' circulars. Sections 1 and 2 of Rule 65 of the Rules of Court provide:

RULE 65
CERTIORARI, PROHIBITION AND MANDAMUS

Section 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-judicial functions
has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a
person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying
that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting
such incidental reliefs as law and justice may require.

xxxx

Sec. 2. Petition for Prohibition. - When the proceedings of any tribunal, corporation, board, officer or person,
whether exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal or any other plain,
speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition
in the proper court, alleging the facts with certainty and praying that judgment be rendered commanding the
respondent to desist from further proceedings in the action or matter specified therein, or otherwise granting such
incidental reliefs as law and justice may require.10

Thus, on the one hand, certiorari as a special civil action is available only if: (1) it is directed against a tribunal,
board, or officer exercising judicial or quasi-judicial functions; (2) the tribunal, board, or officer acted without or in
excess of jurisdiction or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no
appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.11

On the other hand, prohibition is available only if: (1) it is directed against a tribunal, corporation, board, officer, or
person exercising functions, judicial, quasi-judicial, or ministerial; (2) the tribunal, corporation, board or person acted
without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction;
and (3) there is no appeal or any other plain, speedy, and adequate remedy in the ordinary course of law.12 Based
on the foregoing, this Court has consistently reiterated that petitions for certiorari and prohibition may be invoked
only against tribunals, corporations, boards, officers, or persons exercising judicial, quasi-judicial or ministerial
functions, and not against their exercise of legislative or quasi-legislative functions.13

Judicial functions involve the power to determine what the law is and what the legal rights of the parties are, and
then undertaking to determine these questions and adjudicate upon the rights of the parties.14 Quasi judicial
functions apply to the actions and discretion of public administrative officers or bodies required to investigate facts,
hold hearings, and draw conclusions from them as a basis for their official action, in their exercise of discretion of a
judicial nature.15 Ministerial functions are those which an officer or tribunal performs in the context of a given set of
facts, in a prescribed manner and without regard to the exercise of his own judgment upon the propriety or
impropriety of the act done.16

Before a tribunal, board, or officer may exercise judicial or quasi-judicial acts, it is necessary that there be a law that
gives rise to some specific rights under which adverse claims are made, and the controversy ensuing therefrom is
brought before a tribunal, board, or officer clothed with authority to determine the law and adjudicate the respective
rights of the contending parties.17 In this case, respondents did not act in any judicial, quasi-judicial, or ministerial
capacity in their issuance of the assailed joint circulars. In issuing and implementing the subject circulars,
respondents were not called upon to adjudicate the rights of contending parties to exercise, in any manner,
discretion of a judicial nature. The issuance and enforcement by the Secretaries of the DBM, CSC and DOH of the
questioned joint circulars were done in the exercise of their quasi-legislative and administrative functions. It was in
the nature of subordinate legislation, promulgated by them in their exercise of delegated power. Quasi-legislative

72
power is exercised by administrative agencies through the promulgation of rules and regulations within the confines
of the granting statute and the doctrine of non-delegation of powers from the separation of the branches of the
government.18

Based on the foregoing, certiorari and prohibition do not lie against herein respondents' issuances. It is beyond the
province of certiorari to declare the aforesaid administrative issuances illegal because petitions for certiorari seek
solely to correct defects in jurisdiction, and not to correct just any error committed by a court, board, or officer
exercising judicial or quasi-judicial functions unless such court, board, or officer thereby acts without or in excess of
jurisdiction or with such grave abuse of discretion amounting to lack of jurisdiction.19

It is likewise beyond the territory of a writ of prohibition since generally, the purpose of the same is to keep a lower
court within the limits of its jurisdiction in order to maintain the administration of justice in orderly channels. It affords
relief against usurpation of jurisdiction by an inferior court, or when, in the exercise of jurisdiction, the inferior court
transgresses the bounds prescribed by the law, or where there is no adequate remedy available in the ordinary
course of law.20

Be that as it may, We proceed to discuss the substantive issues raised in the petition in order to finally resolve the
doubt over the Joint Circulars' validity. For proper guidance, the pressing issue of whether or not the joint circulars
regulating the salaries and benefits relied upon by public health workers were tainted with grave abuse of discretion
rightly deserves its prompt resolution. With respect to the infirmities of the DBM-DOH Joint Circular raised in the
petition, they cannot be said to have been issued with grave abuse of discretion for not only are they reasonable,
they were likewise issued well within the scope of authority granted to the respondents. In fact, as may be gathered
from prior issuances on the matter, the circular did not make any substantial deviation therefrom, but actually
remained consistent with, and germane to, the purposes of the law.

First, the qualification imposed by the DBM-DOH Joint Circular granting the payment of Hazard Pay only if the
nature of PHWs' duties expose them to danger and depending on whether the risk involved is high or low was
merely derived from Section 7.1.1 of the Revised IRR of RA No. 7305, duly promulgated by the DOH in
collaboration with various government health agencies and health workers' organizations in November 1999, to wit:

SECTION 7.1.1. Eligibility to Receive Hazard Pay. - All public health workers covered under RA 7305 are eligible to
receive hazard pay when the nature of their work exposes them to high risk/low risk hazards for at least fifty percent
(50%) of their working hours as determined and approved by the Secretary of Health or his authorized
representatives.21

Second, fixing the Subsistence Allowance at ₱50 for each day of full-time service and ₱25 for part-time service was
also merely a reiteration of the limits prescribed by the Revised IRR, validly issued by the Secretary of Health
pursuant to Section 3522 of RA No. 7305, the pertinent portions of which states:

Section 7.2.3 Rates of Subsistence Allowance

a. Subsistence allowance shall be implemented at not less than Ph₱50.00 per day or Ph₱1,500.00 per month as
certified by head of agency.

xxxx

d. Part-time public health workers/consultants are entitled to one-half (1/2)of the prescribed rates received by full-
time public health workers.

Third, the condition imposed by the DBM-DOH Joint Circular granting longevity pay only to those PHWs holding
regular plantilla positions merely implements the qualification imposed by the Revised IRR which provides:

6.3. Longevity Pay. - A monthly longevity pay equivalent to five percent (5%) of the present monthly basic pay shall
be paid to public health workers for every five (5) years of continuous, efficient and meritorious services rendered as
certified by the Head of Agency/Local Chief Executives commencing after the approval of the Act. (April 17, 1992)
73
6.3.1. Criteria for Efficient and Meritorious Service A Public Worker shall have:

a. At least a satisfactory performance rating within the rating period.

b. Not been found guilty of any administrative or criminal case within the rating period.

As can be gleaned from the aforequoted provision, petitioners failed to show any real inconsistency in granting
longevity pay to PHWs holding regular plantilla positions. Not only are they based on the same premise, but the
intent of longevity pay, which is paid to workers for every five (5) years of continuous, efficient and meritorious
services, necessarily coincides with that of regularization. Thus, the assailed circular cannot be invalidated for its
issuance is consistent with, and germane to, the purposes of the law.

Anent petitioners' contention that the DBM-DOH Joint Circular is null and void for its failure to comply with Section
3523 of RA No. 7305 providing that its implementing rules shall take effect thirty (30) days after publication in a
newspaper of general circulation, as well as its failure to file a copy of the same with the University of the Philippines
Law Center-Office of the National Administrative Register (UP Law Center-ONAR), jurisprudence as well as the
circumstances of this case dictate otherwise.

Indeed, publication, as a basic postulate of procedural due process, is required by law in order for administrative
rules and regulations to be effective.24 There are, however, several exceptions, one of which are interpretative
regulations which "need nothing further than their bare issuance for they give no real consequence more than what
the law itself has already prescribed."25 These regulations need not be published for they add nothing to the law and
do not affect substantial rights of any person.26

Thus, in Association of Southern Tagalog Electric Cooperatives, et. al. v. Energy Regulatory Commission
(ERC),27wherein several orders issued by the ERC were sought to be invalidated for lack of publication and non-
submission of copies thereof to the UP Law Center - ONAR, it has been held that since they merely interpret RA No.
7832 and its IRR, particularly on the computation of the cost of purchased power, without modifying, amending or
supplanting the same, they cannot be rendered ineffective, to wit:

When the policy guidelines of the ERC directed the exclusion of discounts extended by power suppliers in the
computation of the cost of purchased power, the guidelines merely affirmed the plain and unambiguous meaning of
"cost" in Section 5, Rule IX of the IRR of R.A. No. 7832."Cost" is an item of outlay, and must therefore exclude
discounts since these are "not amounts paid or charged for the sale of electricity, but are reductions in rates.

xxxx

Thus, the policy guidelines of the ERC on the treatment of discounts extended by power suppliers "give no real
consequence more than what the law itself has already prescribed." Publication is not necessary for the effectivity of
the policy guidelines.

As interpretative regulations, the policy guidelines of the ERC on the treatment of discounts extended by power
suppliers are also not required to be filed with the U.P. Law Center in order to be effective. Section 4, Chapter 2,
Book VII of the Administrative Code of 1987 requires every rule adopted by an agency to be filed with the U.P. Law
Center to be effective. However, in Board of Trustees of the Government Service Insurance System v. Velasco, this
Court pronounced that "not all rules and regulations adopted by every government agency are to be filed with the
UP Law Center." Interpretative regulations and those merely internal in nature are not required to be filed with the
U.P. Law Center. Paragraph 9 (a) of the Guidelines for Receiving and Publication of Rules and Regulations Filed
with the U.P. Law Center states:

9. Rules and Regulations which need not be filed with the U.P. Law Center, shall, among others, include but not be
limited to, the following:

a. Those which are interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the Administrative agency and not the public.
74
xxxx

Furthermore, the policy guidelines of the ERC did not create a new obligation and impose a new duty, nor
did it attach a new disability. As previously discussed, the policy guidelines merely interpret R.A. No. 7832
and its IRR, particularly on the computation of the cost of purchased power. The policy guidelines did not
modify, amend or supplant the IRR.

Similarly, in Republic v. Drugmaker's Laboratories, Inc.,28 the validity of circulars issued by the Food and Drug
Administration (FDA) was upheld in spite of the non-compliance with the publication, prior hearing, and consultation
requirements for they merely implemented the provisions of Administrative Order No. 67, entitled "Revised Rules
and Regulations on Registration of Pharmaceutical Products" issued by the DOH, in the following wise:

A careful scrutiny of the foregoing issuances would reveal that AO 67, s. 1989 is actually the rule that
originally introduced the BA/BE testing requirement as a component of applications for the issuance of
CPRs covering certain pharmaceutical products. As such, it is considered an administrative regulation - a
legislative rule to be exact - issued by the Secretary of Health in consonance with the express authority granted to
him by RA 3720 to implement the statutory mandate that all drugs and devices should first be registered with the
FDA prior to their manufacture and sale. Considering that neither party contested the validity of its issuance, the
Court deems that AO 67, s. 1989 complied with the requirements of prior hearing, notice, and publication pursuant
to the presumption of regularity accorded to the government in the exercise of its official duties.42

On the other hand, Circular Nos. 1 and 8, s. 1997 cannot be considered as administrative regulations
because they do not: (a) implement a primary legislation by providing the details thereof; (b) interpret,
clarify, or explain existing statutory regulations under which the FDA operates; and/or (c) ascertain the
existence of certain facts or things upon which the enforcement of RA 3720 depends. In fact, the only
purpose of these circulars is for the FDA to administer and supervise the implementation of the provisions
of AO 67, s. 1989, including those covering the BA/BE testing requirement, consistent with and pursuant to
RA 3720.43 Therefore, the FDA has sufficient authority to issue the said circulars and since they would not
affect the substantive rights of the parties that they seek to govern - as they are not, strictly speaking,
administrative regulations in the first place - no prior hearing, consultation, and publication are needed for
their validity.

In this case, the DBM-DOH Joint Circular in question gives no real consequence more than what the law itself had
already prescribed. As previously discussed, the qualification of actual exposure to danger for the PHW's
entitlement to hazard pay, the rates of ₱50 and ₱25 subsistence allowance, and the entitlement to longevity pay on
the basis of PHW's status in the plantilla of regular positions were already prescribed and authorized by pre-existing
law. There is really no new obligation or duty imposed by the subject circular for it merely reiterated those embodied
in RA No. 7305 and its Revised IRR. The Joint Circular did not modify, amend nor supplant the Revised IRR, the
validity of which is undisputed. Consequently, whether it was duly published and filed with the UP Law Center -
ONAR is necessarily immaterial to its validity because in view of the pronouncements above, interpretative
regulations, such as the DBM-DOH circular herein, need not be published nor filed with the UP Law Center - ONAR
in order to be effective. Neither is prior hearing or consultation mandatory.

Nevertheless, it bears stressing that in spite of the immateriality of the publication requirement in this case, and even
assuming the necessity of the same, its basic objective in informing the public of the contents of the law was
sufficiently accomplished when the DBM-DOH Joint Circular was published in the Philippine Star, a newspaper of
general circulation, on December 29, 2012.29

As to petitioners' allegation of grave abuse of discretion on the part of respondent DOH Secretary in failing to
include the Magna Carta benefits in his department's yearly budget, the same is belied by the fact that petitioners
themselves specifically provided in their petition an account of the amounts allocated for the same in the years 2012
and 2013.30

Based on the foregoing, it must be recalled that administrative regulations, such as the DBM-DOH Joint Circular
herein, enacted by administrative agencies to implement and interpret the law they are entrusted to enforce are
entitled to great respect.31 They partake of the nature of a statute and are just as binding as if they have been written
75
in the statute itself. As such, administrative regulations have the force and effect of law and enjoy the presumption of
legality. Unless and until they are overcome by sufficient evidence showing that they exceeded the bounds of the
law,32 their validity and legality must be upheld.

Thus, notwithstanding the contention that the Joint Resolution No. 4 promulgated by Congress cannot be a proper
source of delegated power, the subject Circular was nevertheless issued well within the scope of authority granted
to the respondents. The issue in this case is not whether the Joint Resolution No. 4 can become law and,
consequently, authorize the issuance of the regulation in question, but whether the circular can be struck down as
invalid for being tainted with grave abuse of discretion. Regardless, therefore, of the validity or invalidity of Joint
Resolution No. 4, the DBMDOH Joint Circular assailed herein cannot be said to have been arbitrarily or capriciously
issued for being consistent with prior issuances duly promulgated pursuant to valid and binding law.

Distinction must be made, however, with respect to the DBM-CSC Joint Circular, the contested provision of which
states:

6.5 An official or employee authorized to be granted Longevity Pay under an existing law is not eligible for the grant
of Step Increment Due to Length of Service.

A review of RA No. 7305 and its Revised IRR reveals that the law does not similarly impose such condition on the
grant of longevity pay to PHWs in the government service. As such, the DBM-CSC Joint Circular effectively created
a new imposition which was not otherwise stipulated in the law it sought to interpret. Consequently, the same
exception granted to the DBM-DOH Joint Circular cannot be applied to the DBM-CSC Joint Circular insofar as the
requirements on publication and submission with the UP Law Center - ONAR are concerned. Thus, while it was well
within the authority of the respondents to issue rules regulating the grant of step increments as provided by RA No.
6758, otherwise known as the Compensation and Position Classification Act of 1989, which pertinently states:

Section 13. Pay Adjustments. - Paragraphs (b) and (c), Section 15 of Presidential Decree No. 985 are hereby
amended to read as follows:

xxxx

(c) Step Increments- Effective January 1, 1990 step increments shall be granted based on merit and/or length of
service in accordance with rules and regulations that will be promulgated jointly by the DBM and the Civil Service
Commission,

and while it was duly published in the Philippine Star, a newspaper of general circulation, on September 15,
2012,33the DBM-CSC Joint Circular remains unenforceable for the failure of respondents to file the same with the UP
Law Center - ONAR.34 Moreover, insofar as the DBM-DOH Joint Circular similarly withholds the Step Increment due
to length of service from those who are already being granted Longevity Pay, the same must likewise be declared
unenforceable.[35

Note also that the DBM-DOH Joint Circular must further be invalidated insofar as it lowers the hazard pay at rates
below the minimum prescribed by Section 21 of RA No. 7305 and Section 7.1.5 (a) of its Revised IRR as follows:

SEC. 21. Hazard Allowance. - Public health worker in hospitals, sanitaria, rural health units, main centers, health
infirmaries, barangay health stations, clinics and other health-related establishments located in difficult areas, strife-
torn or embattled areas, distresses or isolated stations, prisons camps, mental hospitals, radiation-exposed clinics,
laboratories or disease-infested areas or in areas declared under state of calamity or emergency for the duration
thereof which expose them to great danger, contagion, radiation, volcanic activity/eruption occupational risks or
perils to life as determined by the Secretary of Health or the Head of the unit with the approval of the Secretary of
Health, shall be compensated hazard allowance equivalent to at least twenty-five percent (25%)of the monthly basic
salary of health workers receiving salary grade 19 and below, and five percent (5%) for health workers with salary
grade 20 and above.

xxxx
76
7.1.5. Rates of Hazard Pay

a. Public health workers shall be compensated hazard allowances equivalent to at least twenty five (25%)of the
monthly basic salary of health workers, receiving salary grade 19 and below, and five percent (5%)for health
workers with salary grade 20 and above. This may be granted on a monthly, quarterly or annual basis.

It is evident from the foregoing provisions that the rates of hazard pay must be at least25% of the basic monthly
salary of PWHs receiving salary grade 19 and below, and 5% receiving salary grade 20 and above. As such, RA No.
7305 and its implementing rules noticeably prescribe the minimum rates of hazard pay due all PHWs in the
government, as is clear in the self-explanatory phrase "at least" used in both the law and the rules.36 Thus, the
following rates embodied in Section 7.2 of DBM-DOH Joint Circular must be struck down as invalid for being
contrary to the mandate of RA No. 7305 and its Revised IRR:

7.2.1 For PHWs whose positions are at SG-19 and below, Hazard Pay shall be based on the degree of exposure to
high risk or low risk hazards, as specified in sub-items 7 .1.1 and 7 .1.2 above, and the number of workdays of
actual exposure over 22 workdays in a month, at rates not to exceed 25% of monthly basic salary. In case of
exposure to both high risk and low risk hazards, the Hazard Pay for the month shall be based on only one risk level,
whichever is more advantageous to the PHW.

7.2.2 PHWs whose positions are at SG-20 and above may be entitled to Hazard Pay at 5% of their monthly basic
salaries for all days of exposure to high risk and/or low risk hazards. However, those exposed to high risk hazards
for 12 or more days in a month may be entitled to a fixed amount of ₱4,989.75 per month.

Rates of Hazard Pay


Actual Exposure/ High Risk Low Risk
Level of Risk
12 or more days 25% of monthly basic salary 14% of monthly basic salary
6 to 11 days 14% of monthly basic salary 8% of monthly basic salary
Less than 6 days 8% monthly basic salary 5% of monthly basic salary

WHEREFORE, premises considered, the instant petition is PARTLY GRANTED. The DBM-DOH Joint Circular,
insofar as it lowers the hazard pay at rates below the minimum prescribed by Section 21 of RA No. 7305 and
Section 7.1.5 (a) of its Revised IRR, is declared INVALID. The DBM-CSC Joint Circular, insofar as it provides that
an official or employee authorized to be granted Longevity Pay under an existing law is not eligible for the grant of
Step Increment Due to Length of Service, is declared UNENFORCEABLE. The validity, however, of the DBM-DOH
Joint Circular as to the qualification of actual exposure to danger for the PHW's entitlement to hazard pay, the rates
of ₱50 and ₱25 subsistence allowance, and the entitlement to longevity pay on the basis of the PHW' s status in the
plantilla of regular positions, is UPHELD.

SO ORDERED.

77
SPECIAL THIRD DIVISION

G.R. No. 212686, October 05, 2016

SERGIO R. OSME�A III, Petitioner, v. POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION,
EMMANUEL R. LEDESMA, JR., SPC POWER CORPORATION, AND THERMA POWER VISAYAS, INC., Respondents.

RESOLUTION

VELASCO JR., J.:

For resolution of the Court is the Manifestation/Motion dated March 16, 2016 of private respondent Therma Power Visayas,
Inc. (TPVI). As TVPI expounded,1 a Notice of Award dated April 30, 2014 was issued in its favor for the purchase of the Naga
Power Plant Complex (NPPC). The award, however, was cancelled because of the exercise by SPC Power Corporation (SPC) of
its Right to Top. TVPI then implores the Court to clarify the effect on the Notice of Award of the subsequent annulment of the
said Right to Top in our September 28, 2015 Decision, and prays for the reinstatement thereof.
The Facts

On December 27, 2013, the Board of Directors of the Power Sector Assets and Liabilities Management Corporation (PSALM)
approved the commencement of the 3rd round of bidding for the sale of the 153.1MW NPPC. Respondents SPC Power
Corporation (SPC) and TVPI submitted their respective bids for the project.2 The results of the bidding are as follows:3

TPVI SPC

a. Purchase Price 441,191,500.00 211,391,388.88

b. Rentals 588,735,000.00 588,735,000.00

c. Option Price 58,873,500.00 58,873,500.00

Financial Bid, PhP 1,088,800,000.00 858,999,888.88


In due course, PSALM issued a Notice of Award dated April 30, 2014 in favor of TPVI, declaring the latter as the Winning
Bidder. The execution of a Land Lease Agreement (LLA) and Assets Purchase Agreement (APA) in favor of TPVI, however,
was subject to SPC's non-exercise of its Right to Top. The pertinent portion of the Notice of Award provides:4
In accordance with the bidding procedures for the sale of the 153.1MW Naga Power Plant dated 6 February 2014, the Power
Sector Assets and Liabilities Management Corporation (PSALM) Privatization Bids and Awards Committee (PBAC) hereby
issues this Notice of Award which declares that TPVI is the Winning Bidder for the Sale of NPP.

PSALM's execution of the APA, however, shall be subject to the second paragraph of Section IB-20 (Award to the Winning
Bidder) of the Bidding Procedures, which provides that: "PSALM's entering into the Asset Purchase Agreement with the
Winning Bidder shall be subject to SPC's rights under Section 3.02 of the LLA. Hence, if the exercise of the rights of SPC
under Section 3.02 of the LLA is legally and validly consummated, PSALM shall not enter into the Asset Purchase Agreement
with the Winning Bidder. Should SPC not exercise its rights under Section 3.02 of the LLA or if the exercise of the rights of
SPC under Section 3.02 of the LLA is not legally and validly consummated, upon notice by PSALM, the Winning Bidder must
enter into and fully and faithfully comply with the Asset Purchase Agreement."
On the assumption that SPC validly exercised its Right to Top, PSALM executed the NPPC-APA and NPPC-LLA in SPC's favor,
cancelling TPVI's Notice of Award in the process. The Right to Top and the resultant agreements from its exercise, however,
were subsequently nullified by the Court through its September 28, 2015 Decision, the dispositive portion of which reads: ChanRobles Virtualawl ibra ry

WHEREFORE, the petition is hereby GIVEN DUE COURSE and the writ prayed for accordingly GRANTED. The right of first
refusal (right to top) granted to Saicon Power Corporation under the 2009 Naga LBGT-LLA is hereby declared NULL and
VOID. Consequently, the Asset Purchase Agreement (NPPC-APA) and Land Lease Agreement (NPPC-LLA) executed by the
Power Sector Assets and Liabilities Management Corporation and SPC are ANNULLED and SET ASIDE.

No costs.

SO ORDERED.
Petitioner Sergio R. Osme�a III (Osme�a) and respondents PSALM and SPC filed their respective motions for
reconsideration. Meanwhile, respondent TPVI filed the instant Manifestation/Motion wherein it maintained that the
nullification of SPC's Right to Top calls for the reinstatement of the cancelled April 30, 2014 Notice of Award in its favor.

The Court resolved to deny with finality SPC's motion on December 9, 2015,5 and those of Osme�a and PSALM on April 6,
2016. Notwithstanding the denial with finality of their respective motions, they were nevertheless required to comment on

78
TPVI's Manifestation/Motion that remained unresolved.6 For their part, respondents SPC and PSALM contend that the Decision
resulted in the material alteration of the terms of the public bidding and called for the conduct of another in its stead.
Our Ruling

TPVI's motion is impressed with merit.

The Bidding Procedures contain a severability clause that allows the award in favor of TPVI to survive

Section IB-20 of the PSALM Bidding Procedures pertinently provides:7


Anything in these bidding procedures notwithstanding, PSALM's entering into the Asset Purchase Agreement with the Winning
Bidder shall be subject to SPC's rights under Section 3.02 of the LLA. Hence, if the exercise of the rights of SPC under
Section 3.02 of the LLA is legally and validly consummated, PSALM shall not enter into the Asset Purchase Agreement
with the Winning Bidder. Should SPC not exercise its rights under Section 3.02 of the LLA or if the exercise of the
rights of SPC under Section 3.02 of the LLA is not legally or validly consummated, upon Notice by PSALM, the
Winning Bidder must enter into and fully and faithfully comply with the Asset Purchase Agreement. (emphasis added)
Tucked at the end of the guidelines, however, is a severability clause that reads:8
IB-28 General Conditions

xxxx

26. If any one or more of the provisions of the Bidding Procedures or any part of the bidding package is held to
be invalid, illegal or unenforceable, the validity, legality, or enforceability of the remaining provisions will not be
affected thereby and shall remain in full force and effect. (emphasis added)
Contrary to the postulations of respondents PSALM and SPC, the nullification of the Right to Top did not change the
complexion of the bidding. By no means should this be considered an alteration of the terms of the public bidding, let alone a
material one, for it was clearly a contingency expressly covered by the provisions of the Bidding Procedure as evidenced by
the severability clause.

The afore-quoted severability clause conveys the clear intention to isolate and detach any invalid provision from the rest so
that the latter may continue to be in force and effect. It operates to salvage the surviving provisions of the Bidding
Procedures as valid, legal, and enforceable, despite the nullity of a component part.

Our Decision nullifying SPC's Right to Top ought not then be construed as the nullification of the entire third round of the
public bidding. It merely called for the application of the severability clause to prevent PSALM, as much as possible, from
having to repeat the process for the fourth time. Consistently, the Court never expressly declared the third round of bidding
as invalid. Clear from the language of the dispositive portion of the Court's Decision is that the nullification was limited only
to SPC's Right to Top and the NPPC-LLA and NPPC-APA in its favor, nothing more. The results of the prior conducted bidding
process should then be upheld, and the Notice of Award dated April 30, 2014, reinstated.

The Notice of Award dated April 30, 2014 is a perfected contract between PSALM and TPVI.9 As can be recalled, it states that
the obligation of PSALM to execute the NPPC-APA and NPPC-LLA in favor of TPVI is conditioned on SPC's non-exercise or
failure to legally and validly exercise its Right to Top. This agreement is the law between the contracting parties with which
they are required to comply in good faith.10 chanrobles law

In view of the Court's Decision, however, the condition in the Notice of Award should be deemed as not written, and the
obligation to award the NPPC-LLA and NPPC-APA to TPVI, due and demandable. Furthermore, the mutual obligation of the
parties to abide by their covenant in good faith remains, entitling TPVI to demand compliance from PSALM, including the
award of the purchase contracts in its favor. This is but the proper application of the severability clause.

Articles 1181 and 1185 of the Civil Code find application in this case

The award of the NPPC-LLA and NPPC-LLA to TPVI further finds justification under Arts. 1181 and 1185 of the Civil Code,
viz:
ChanRoble sVirtualawl ibra ry

Article 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already
acquired, shall depend upon the happening of the event which constitutes the condition.

xxxx

Article 1185. The condition that some event will not happen at a determinate time shall render the obligation
effective from the moment the time indicated has elapsed, or if it has become evident that the event cannot occur. x x
x (emphasis added)
The Court explained in The Wellex Group, Inc. v. U-Land Airlines, Co., Ltd.11 that, under Art. 1185, if an obligation is
conditioned on the non-occurrence of a particular event at a determinate time, that obligation arises (a) at the lapse of the
indicated time, or (b) if it has become evident that the event cannot occur. To illustrate:12
Petitioner Wellex and respondent U-Land bound themselves to negotiate with each other within a 40-day period to enter into
a share purchase agreement. If no share purchase agreement was entered into, both parties would be freed from their
respective undertakings.
79
It is the non-occurrence or non-execution of the share purchase agreement that would give rise to the obligation to both
parties to free each other from their respective undertakings. This includes returning to each other all that they received in
pursuit of entering into the share purchase agreement.

At the lapse of the 40-day period, the parties failed to enter into a share purchase agreement. This lapse is the first
circumstance provided for in Article 118.5 that gives rise to the obligation. Applying Article 1185, the parties were then
obligated to return to each other all that they had received in order to be freed from their respective undertakings.

However, the parties continued their negotiations after the lapse of the 40-day period. They made subsequent transactions
with the intention to enter into the share purchase agreement. Despite that, they still failed to enter into a share purchase
agreement. Communication between the parties ceased, and no further transactions took place.

It became evident that, once again, the parties would not enter into the share purchase agreement. This is the second
circumstance provided for in Article 1185. Thus, the obligation to free each other from their respective undertakings
remained.
In the case at bar, PSALM's obligation to award the contract in TPVI's favor was dependent on the non-occurrence of an
event: SPC's legal and valid exercise of its Right to Top. As phrased by PSALM: "the approval of the sale to TPVI was a
conditional one, the consummation of which is dependent on the non-exercise by SPC of its right to top."13 It has become
apparent, however, that such event will never occur. SPC can never legally and validly invoke its Right to Top in view of its
nullity. The condition, therefore, is deemed complied with by operation of law, and the obligation to execute the purchase
contracts in favor of TPVI, due and demandable.

There was genuine competition when the public bidding was conducted

In JG Summit Holdings, Inc. v. Court of Appeals,14 the Court enumerated the three principles of public bidding, thusly: (1)
the offer to the public; (2) an opportunity for competition; and (3) a basis for comparison of bids. As long as these three
principles are complied with, the public bidding can be considered valid and legal.

In the case at bar, respondents PSALM and SPC challenge the conduct of the bidding process for allegedly violating the
second principle. They posit that SPC's Right to Top prevented genuine competition by discouraging other corporations from
submitting their respective bids.

PSALM and SPC's contentions are untenable.

It bears stressing on the outset that the severability clause under IB-28, paragraph 26 was known to the bidders, as it was
embodied in the Bidding Procedures itself. Thus, any interested party had prior knowledge of the possibility of the eventual
nullification of SPC's Right to Top and of its repercussions.

That aside, the allegation that the Right to Top discouraged parties from participating in the bidding process is speculative.
There is no guarantee that conducting another round of bidding will increase the number of bidders.

To put the situation into perspective, it is well to recall that SPC's right to top can be found in IB-20 of the Bidding Procedure.
Thus, parties interested in buying the NPPC would only know of SPC's Right to Top if they availed of the bid documents.
There is no showing, however, that there is a disparity between the number of parties who purchased the bid documents, on
the one hand, and the number of parties who actually submitted their respective bids, on the other. Only then could PSALM
and SPC have possibly, but not even conclusively, established that the Right to Top dissuaded other parties from submitting
their bids.

It is likewise worthy to note that this is already the third round of bidding for the purchase of NPPC and in this round, only
two companies participated: respondents SPC and TPVI. It may then be that the properties subjected to bidding are just
really not attractive assets to begin with so as to appeal to the public.

Furthermore, almost three (3) years had already elapsed since the third round of bidding commenced, and even longer since
the first. NPPC's assets, by now, have already significantly depreciated and may no longer fetch the same price as that
offered by TPVI. It is not entirely implausible, therefore, that the new bids would even be lower than TPVI's winning bid.

Similarly, there is no assurance that the new winning bid would be higher than TPVI's proposal, for it is possible that the
Right to Top even encouraged TPVI to maximize its bid in this third round. It could even be said that the existence of the
Right to Top drove the interested parties to bid an amount that would have been difficult, if not impossible, for SPC to meet,
if not exceed.

To pursue the argument that other parties were dissuaded by the Right to Top would be to consider its exercise as an
absolute eventual certainty rather than a mere possibility. This would run counter to the clear language of the Bidding
Guidelines that the contract will be awarded to the winning bidder "should SPC not exercise its right."

Neither can SPC claim that its Right to Top influenced its bid. That SPC mistakenly rested chiefly on its Right to Top is no
80
one's fault but its own. To recall, SPC's Right to Top is embodied in Sec. 3.02 of the LBGT-LLA.15 The same document,
however, likewise contains a severability clause that mirrors that in paragraph 26 of IB-28 of the Bidding Procedure:16
14.16. Severability

If any one or more of the provisions of this Agreement is declared invalid or unenforceable in any respect under any
Philippine Law, the validity, legality or enforceability of the remaining provisions contained herein shall not in any way be
affected or impaired.
Thus, SPC was fully aware of the possibility that the Land-Based Gas Turbine (LBGT)-LLA provisions, the Right to Top
included, would not necessarily be upheld by the courts at every turn.

Moreover, the Court was also not remiss in reminding bidders of government contracts against their blind reliance on their
alleged preferential rights. As held in LTFRB v. Stronghold:17
In the field of public contracts, these stipulations are weighed with the taint of invalidity for contravening the policy
requiring government contracts to be awarded through public bidding. Unless clearly falling under statutory exceptions,
government contracts for the procurement of goods or services are required to undergo public bidding "to protect the public
interest by giving the public the best possible advantages thru open competition." x x x

These clauses escape the taint of invalidity only in the narrow instance where the right of first refusal (or "right
to top") is founded on the beneficiary's "interest on the object over which the right of first refusal is to be
exercised" (such as a "tenant with respect to the land occupied, a lessee vis-a-vis the property leased, a stockholder as
regards shares of stock, and a mortgagor in relation to the subject of the mortgage") and the government stands to benefit
from the stipulation. x x x (emphasis added)
The above disquisition served as nothing less than a warning. The clear message conveyed is that the advantage granted
is generally viewed as invalid, in consonance with the more fundamental principle that all government procurement must
undergo public bidding under equal terms. It must first be established that the beneficiary has an existing interest in the
object of the contract before his preferential right can "escape the taint of invalidity.

In this case, however, SPC had knowledge that it did not possess the requisite subsisting interest in the NPPC project. It was
then aware that its Right to Top under the LBGT contract, which involves a separate and distinct power plant from that in the
NPPC project, could not possibly be able to withstand judicial scrutiny.

In view of the foregoing circumstances�the Severability Clause in Sec. 14.16 of the LBGT-LLA and in IB-28 of the Bidding
Procedure, the Court's warning in Stronghold, and SPC's knowledge of its lack of subsisting interest�SPC should, therefore,
be bound by its initial bid of P858,999,888.88. It was never deprived of a fair chance to bid, notwithstanding the Court's
subsequent nullification of its Right to Top. It was simply mistaken when it put much premium on its alleged Right to Top
when it calculated its bid, even though it knew or ought to have known of its defect.

SPC did not legally and validly exercise its Right to Top

Regardless of whether or not the Right to Top was nullified, however, the award of the purchase contracts to TPVI would still
be in order, for it appears that SPC did not validly exercise its erstwhile advantage.

The exercise of the Right to Top is no different from the manner of perfecting any other sales contract. It is perfected by
mere consent, upon a meeting of the minds on the offer and the acceptance thereof based on subject matter, price and
terms of payment.18 chanroble slaw

In the case at bar, PSALM Chief Emmanuel R. Ledesma, Jr., on April 29, 2014, wrote to SPC informing the latter that it has
the right to top the winning bid of TPVI for a 10-year lease on NPPC that will expire on January 29, 2020. The letter likewise
directed SPC to pay within thirty (30) days should it exercise the said right. This is constitutive of a defmite offer.

In reply, SPC wrote to PSALM in the following wise:19


As SPC also participated in the bidding, the bid for the lease component clearly computed on the basis of, and was for
twenty-five (25) years. However, by now stating in your letter that the "lease has a Term often (10) years and will
expire on 29 January 2020," SPC would effectively have less than six (6) years from today to use the property, which is
extremely short for the lease component computed and based on the twenty-five (25) year term that was offered during the
bidding. While we are aware that the second paragraph of Section 3.02 of the LLA-LBGT provides that the property covered
by the right to top will be "governed" by the LLA-LBGT, we are of the reasonable belief that this does not include "Term"
under Section 2.01 thereof considering that the "Draft Land Lease Agreement for the 153.1-MW Naga Power Plant," which
formed part of the bid documents, specifically provided for a "Term" of twenty-five (25) years.

On the basis of the foregoing, SPC confirms that it is exercising its right to top the winning bid of TPVI and will pay
the amount of P1,143,240,000.00 on the understanding that the Term of the lease is twenty-five (25) years from
closing date.
It is clear from the tenor of SPC's letter that its acceptance of PSALM's offer can never be categorized as unqualified. Instead,
what SPC communicated was its counter-offer for a longer lease period. This is further made evident by our pronouncement
in Development Bank of the Philippines v. Medrano(Medrano),20 to wit: ChanRobles Virtualawl ibra ry

81
Under the law, a contract is perfected by mere consent, that is, from the moment that there is a meeting of the offer and the
acceptance upon the thing and the cause that constitute the contract. The law requires that the offer must be certain
and the acceptance absolute and unqualified. An acceptance of an offer may be express and implied; a qualified offer
constitutes a counter-offer. Case law holds that an offer, to be considered certain, must be definite, while an acceptance is
considered absolute and unqualified when it is identical in all respects with that of the offer so as to produce
consent or a meeting of the minds. We have also previously held that the ascertainment of whether there is a meeting of
minds on the offer and acceptance depends on the circumstances surrounding the case.
As applied, it can readily be seen that there is no identity between what was offered and what was accepted. There is a
glaring difference not only in the term of the lease but also in its reckoning period. It cannot then meet the criteria of an
"unqualified acceptance" as discussed in the Medrano case.

Furthermore, whether the lease should only be until 2020 or 25 years from closing date was an issue that reached the Office
of the Government Corporate Counsel (OGCC). Through Opinion No. 98, Series of 2014,21 dated May 21, 2014, the OGCC
opined in the following wise:22
We agree with PSALM's position that SPC's Right to Top should be consistent with the 2009 LLA provisions. It is established
that the 2009 LLA is the source of SPC's Right to Top and explicitly provides that such right is to be exercised in accordance
with its provisions.

Section 3.02 of the 2009 LLA is clear. If SPC opts to exercise the Right to Top, the property will form part of the Leased
Premises and shall be subject to the LLA's provisions. Section 2.01 of the LLA is explicit that the lease shall expire on 29
January 2020. Should SPC opt to exercise the Right to Top, it must do so within the 2009 LLA's parameters.
Thus, when the 30-day period to exercise the Right to Top was about to lapse, the standing offer to SPC was for a lease
expiring on January 29, 2020. Without SPC communicating its unqualified acceptance of such offer before the Right to Top
expired, the award of the purchase contracts to TPVI became due.

Although the Department of Justice eventually found for SPC on June 23, 2014,23 the 30-day period to exercise the Right to
Top has already elapsed, and the said right, by then, could no longer be validly or legally consummated. It was incumbent
upon SPC to seek judicial intervention to toll the running of the 30-day period pending the resolution of the issue. No
recourse, however, was interposed by SPC.

The finality of Decision prevents the Court from departing from the clear language of the ruling

Lastly, in treating the Manifestation/Motion, due regard must be given to the finality of the judgment accorded to the Court's
September 28, 2015 ruling. Jurisprudence teaches that a decision that has acquired finality becomes immutable and
unalterable, and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions
of fact and law, and whether it be made by the court that rendered it or by the Highest Court of the land.24 chanrobleslaw

The dispositive portion of the September 28, 2015 Decision is clear. Only SPC's Right to Top and the documents executed
pursuant to its exercise were nullified by the Court. The Court never invalidated the entire bidding process since it was
not established that there was a deviation from the procedure outlined in Republic Act No. 9184, otherwise known as
the Government Procurement Reform Act, nor from the bidding guidelines. The acts of the procuring agency prior to SPC's
exercise of its Right to Top, therefore, subsist. Consequently, there is merit in TPVI's motion that the Notice of Award dated
April 30, 2014 be reinstated and the purchase contracts in its favor ordered executed.

This should in no way be construed as a departure from the express wording of the Court's Decision. On the contrary, it
adheres to the plain wording of its fallo: that only SPC's Right to Top and the NPPC-LLA and NPPC-APA in its favor were
declared null and void.

Furthermore, it bears stressing in this case that the finality of the September 28, 2015 Decision extends only to petitioner
Osme�a and respondents SPC and PSALM. Noticeably, while their respective motions for reconsideration have already been
denied with finality, the Court has yet to resolve TPVI's pending Manifestation/Motion. The Court even ordered the other
parties to Comment thereon, thereby reserving the power to grant the same. The Court can still, therefore, grant TPVI's
motion and uphold the validity of the prior-conducted bidding process.

In any event, the Court is not precluded from rendering a nunc pro tunc judgment to amend the dispositive portion of the
September 28, 2015 Decision for it to truly reflect the action of the Court.25 The lack of directive in the fallo on how to
cralawred

proceed from the nullification of SPC's Right to Top and its NPPC-APA and NPPC-LLA contracts, nothing more, left the parties
at a quandary, prompting them to seek judicial intervention anew. The Court must, therefore, supply herein what was
inadvertently omitted in the Decision�the natural and logical consequence of our September 28, 2015 ruling. Otherwise, a
rejection of the plea of TPVI will only spawn a multiplicity of suits and clogging of the court docket. Such event is without a
doubt contrary to the established policy of the Court to provide in its rules of procedure a just, speedy, and inexpensive
disposition of every action and proceeding.26c han robles law

WHEREFORE, premises considered, the Manifestation/Motion dated March 16, 2016 of respondent TPVI is
hereby GRANTED. The Entry of Judgment is LIFTED. The fallo of the September 28, 2015 Decision is hereby amended to
include a directive that the April 30, 2014 Notice of Award in favor of said respondent be REINSTATED, excluding the

82
portion therein granting to SPC the Right to Top. Respondent PSALM is further directed to execute the NPPC-APA and NPPC-
LLA in favor of respondent TPVI with dispatch. As amended, the fallo of said Decision shall read:
ChanRobles Vi rtua lawlib rary

WHEREFORE, the petition is hereby GIVEN DUE COURSE and the writ prayed for accordingly GRANTED. The right of first
refusal (right to top) granted to Salcon Power Corporation (now SPC Power Corporation) under the 2009 Naga LBGT-LLA is
hereby declared NULL and VOID. Consequently, the Asset Purchase Agreement (NPPC-APA) and Land Lease Agreement
(NPPC-LLA) executed by the Power Sector Assets and Liabilities Management Corporation and SPC are ANNULLED and SET
ASIDE. The Notice of Award dated April 30, 2014 in favor of Therma Power Visayas, Inc. is hereby REINSTATED, excluding
the portion therein granting to SPC the Right to Top. Respondent PSALM is directed to execute the NPPC-APA and NPPC-LLA
in favor of TPVI with dispatch.

No costs.
SO ORDERED. chanRoblesvirt ual Lawlib rary

83
SECOND DIVISION

G.R. No. 191031, October 05, 2015

DOLORES L. HACBANG AND BERNARDO J. HACBANG, Petitioners, v. ATTY. BASILIO H. ALO, Respondent.

DECISION

BRION, J.:*

This petition for review on certiorari seeks to reverse the 13 October 2009 Decision and the 21 January 2010 resolution of
the Court of Appeals (CA) in CA-G.R CV No. 83137.1 The CA affirmed the Quezon City Regional Trial Court's (RTC) dismissal
of the petitioners' complaint in Civil Case No. Q 99-366602for lack of cause of action.
ANTECEDENTS

On 3 April 1937, Bishop Sofronio Hacbang (Bishop Sofronio) died leaving several properties behind. Among these was Lot No.
8-A of subdivision Plan Psd-6227 located at Espa�a Street, San Juan, Rizal,3covered by Transfer Certificate of Title (TCT)
No. (19896) 227644 (the subject lot).

Bishop Sofronio was survived by his parents, Basilio and Maria Hacbang, and his siblings: Perfecto Hacbang, Joaquin
Hacbang, Lucia Teresita Hacbang, and Dolores Hacbang Alo. Petitioner Dolores L. Hacbang is the grandchild of Perfecto while
petitioner Bernardo Hacbang (Bernardo) is a son of Joaquin. The respondent Basilio Alo is the son of Dolores.

Bishop Sofronio left a will denominated as Ultima Voluntad y Testamento. He left one-half of his properties to his parents and
devised the other half - including the subject lot - to his sister Dolores. The pertinent portions of his will read: cra lawlawlib ra ry

FOURTH: By these presents I give, name, declare and institute as heirs my parents BASILIO HACBANG and MARIA GABORNY
DE HACBANG of one-half of all my properties, whether real, personal or mixed, in whatever place they may be found,
whether they were acquired before or after the execution of this testament, including all the properties that at the time of my
death I may have the power to dispose of by will, and which properties consist of the following: chanRob lesvi rtua lLawl ibra ry

Fifty (50) percent of the shares of stock that I own in the "SAMAR NAVIGATION CO. INC."

A parcel of land with its camarin situated in the Municipality of Carigara, Province of Leyte.

A parcel of land in the Barrio of Pinamopuan, of the Municipality of Capoocan, Province of Leyte.

A parcel of land with house and planted to coconuts in the Barrio of Sorsogon, Municipality of Sta. Margarita, Province of
Samar.

FIFTH: The other remaining half of my properties wherever they may be located, by these presents I give, cede
and hand over to my sister Dolores Hacbang, which properties are more particularly described as follows: cha nRoblesv irtua lLawl ibra ry

Fifty (50) percent of my stockholdings in the "SAMAR NAVIGATION CO. INC."

A piece of land with one house where the Botica San Antonio is located, in the Municipality of Calbayog, Province of Samar.

A piece of land with house in Acedillo St., Municipality of Calbayog, Province of Samar.

A piece of land with 1 camarin in the barrio of Sorsogon, Municipality of Sta. Margarita, Province of Samar.

Six (6) Parcels of land located in "NEW MANILA," Municipality of San Juan, Province of Rizal, in 7th St., described as follows:
Block 7, Lots 16, 18, 20 and 22, and in 3rd Street, Block 3, Lots 4 and 6.

A piece of land situated in Espana St., Municipality of San Juan del Monte of the Province of Rizal, marked as Lot
8-A, Block 17, of 1,403 square meters in area.4 chan roble slaw

On 16 April 1937, a petition for the probate of Bishop Sofronio's will and the settlement of his estate was filed before the
then Court of First Instance (CFI) of Manila. The petition was docketed as SP. PROC. No. 51199.
84
On 21 May 1937, the CFI admitted Bishop Sofronio's will to probate.5

The records are bare with respect to what happened next. They show, however, that the CFI ordered the proceedings to be
archived on 2 November 1957.

On 24 September 1971, the Register of Deeds of Quezon City appears to have issued TCT No. 169342over the subject lot in
the name of respondent Basilio H. Alo. TCT No. 169342 cancelled TCT No. 117322/T-500. However, this Court cannot
determine the circumstances surrounding the issuance of TCT No. 169342 or the relationship between TCT No. 117322/T-
500 and TCT No. (19896) 227644 due to the inadequacy of the documents on record.

On 17 March 1975, Dolores Hacbang Alo moved to revive the settlement proceedings because the CFI had not yet completed
adjudicating the properties.

On 23 May 1975, the CFI denied the motion for revival because the order to archive "had long become final and executory."6

On 1 February 1999, petitioners Dolores L. Hacbang and Bernardo filed a petition to cancel TCT No. 169342 on the ground
that it was fraudulently secured. In support of their allegations, they submitted the 5 March 1997 Investigation Report of
Land Registration Authority (LRA) Investigator Rodrigo I. Del Rosario. The report concluded that TCT No. 117322 was of
"doubtful authenticity" and was neither derived from TCT No. 117322 nor issued by the Registry of Deeds of Quezon City on
24 September 1971 at 2:30 PM.

In his Answer dated 18 August 1999, Basilio denied all allegations of irregularity and wrongdoing. He also moved to dismiss
the petition because the petitioners were neither heirs nor devisees of Bishop Sofronio and had no legal interest in the
subject lot.

On 7 January 2003, the RTC dismissed the petition because the petitioners had no right to prosecute the case on the subject
lot. The RTC noted that Bishop Sofronio's will had already been admitted into probate in 1937; thus, the intrinsic validity of
the will is no longer in question. Though the settlement proceedings were archived, Bishop Sofronio already designated his
heirs: Bishop Sofronio's parents were compulsory heirs entitled to half of his estate while the respondent's mother, Dolores
Hacbang Alo, was devised the remaining half (the free portion). Thus, the petitioners, who are neither compulsory nor
testamentary heirs, are not real parties in interest.

The petitioners moved for reconsideration which the RTC denied on 19 August 2003.

The petitioners appealed to the CA, arguing that: (1) Bishop Sofronio's will did not validly transfer the subject property to
Dolores Hacbang Alo; (2) the probate of the will is not conclusive as to the validity of its intrinsic provisions; and (3) only a
final decree of distribution of the estate vests title on the properties from the estate on the distributees.7 The appeal was
docketed as CA-G.R CV No. 83137.

They further argued that the distribution of the estate should be governed by intestate succession because: (1) the subject
property was not adjudicated; and (2) the settlement proceedings were archived and dismissed. Thus, all the properties
passed on to and became part of the estate of Bishop Sofronio's parents. The petitioners concluded that they had legal
interest in the subject lot as representatives of their ascendants, the other children of Bishop Sofronio's parents.

In his appeal brief, the respondent insisted that the petitioners do not have a clear legal right to maintain the suit because:
(1) as collateral relatives, they cannot invoke the right of representation to the estate of Bishop Sofronio; and (2) they are
not real parties in interest and have no right of action over the subject lot.

On 13 October 2009, the CA affirmed the RTC's order of dismissal. The CA held that the admission of Bishop Sofronio's will to
probate precluded intestate succession unless the will was intrinsically invalid or failed to completely dispose of his estate.
Contrary to the petitioners' contention, the settlement proceedings were not dismissed but archived; the will did not lose its
validity merely because the proceedings were archived. Undoubtedly, Bishop Sofronio did not die intestate.

The CA denied the petitioners' claim to a right of inheritance by representation. It held that the presence of Bishop Sofronio's
parents during his death excluded his brothers and sisters from being compulsory heirs; the petitioners cannot represent
those who are hot entitled to succeed. Considering that they are neither compulsory nor testamentary heirs, petitioners have
no legal interest in the subject property.

The petitioners moved for reconsideration which the CA denied on 21 January 2010. The denial paved the way for the
petitioners to file the present petition for review on certiorari.
THE PETITION

The petitioners argue: (1) that the CA erred when it failed to rule on the validity of TCT No. 169342; (2) that the probate
proceedings of the estate was dismissed, not archived; and (3) that the CA erred when it used Bishop Sofronio's will as basis
to declare that they are not real parties in interest.

85
In his Comment, the respondent maintained that the petitioners had no right over the property and moved to dismiss the
present petition.
OUR RULING

At the outset, this Court observes that the parties and even the lower courts erroneously applied the provisions of the
present Civil Code to the will and the estate of Bishop Sofronio. The law in force at the time of the decedent's death
determines the applicable law over the settlement of his estate.8 Bishop Sofronio died in 1937 before the enactment of the
Civil Code in 1949. Therefore, the correct applicable laws to the settlement of his estate are the 1889 Spanish Civil Code and
the 1901 Code of Civil Procedure.

In any case, under both the Spanish Code and our Civil Code, successional rights are vested at the precise moment of the
death of the decedent. Section 657 of the Spanish code provides: c ralawlaw lib rary

Art. 657. Los derechos a la sucesion de una persona se transmiten desde el momento de su muerte.9 chanro bleslaw

The inheritance vests immediately upon the decedent's death without a moment's interruption. This provision was later on
translated and adopted as Article 777 of our Civil Code.10

As a consequence of this principle, ownership over the inheritance passes to the heirs at the precisemoment of death - not at
the time the heirs are declared, nor at the time of the partition, nor at the distribution of the properties. There is no
interruption between the end of the decedent's ownership and the start of the heir/legatee/devisee's ownership.

For intestate heirs, this means that they are immediately entitled to their hereditary shares in the estate even though they
may not be entitled to any particular properties yet. For legatees and devisees granted specific properties, this means that
they acquire ownership over the legacies and devises at that immediate moment without prejudice to the legitimes of
compulsory heirs.

Undoubtedly, Bishop Sofronio did not die intestate. He left a will that was probated in 1937. He left half of his properties to
his parents and the remaining half to his sister Dolores Hacbang Alo. The admission of his will to probate is conclusive with
respect to its due execution and extrinsic validity.11

Unfortunately, the settlement proceedings were never concluded; the case was archived without any pronouncement as to
the intrinsic validity of the will or an adjudication of the properties. Because of this, the petitioners posit that intestate
succession should govern. They maintain that the entire inheritance should have gone to Bishop Sofronio's parents, the
petitioners' ascendants. Thus, they claim to have a legal interest in the subject lot as representatives of the other children of
Bishop Sofronio's parents.

We do not find the petitioners' argument meritorious.

Our jurisdiction has always respected a decedent's freedom to dispose of his estate, whether under the Spanish Civil Code or
under the present Civil Code. Article 763 of the Spanish Code provides: c ralawlawl ibra ry

Art. 763. El que no tuviere herederos forzosos puede disponer por testamento de todos sus bienes o de parte de ellos en
favor de cualquiera persona que tenga capacidad para adquirirlos. El que tuviere herederos forzosos solo podra disponer de
sus bienes en la forma y con las limitaciones que se establecen en la section quinta de este capitulo. chan robles law

This provision states that a person without compulsory heirs may dispose of his estate, either in part or in its entirety, in
favor of anyone capacitated to succeed him; if the testator has compulsory heirs, he can dispose of his property provided he
does not impair their legitimes. This provision was later translated and adopted as Article 842 of our Civil Code.12

Our jurisdiction accords great respect to the testator's freedom of disposition. Hence, testate succession has always been
preferred over intestacy.13 As much as possible, a testator's will is treated and interpreted in a way that would render all of
its provisions operative.14 Hence, there is no basis to apply the provisions on intestacy when testate succession evidently
applies.

Even though the CFI archived the settlement proceedings, there is no indication that it declared any of the dispositions in the
will invalid. The records are understandably bare considering the probate proceedings were initiated as early as 1937.
Nonetheless, we find no reason to doubt the intrinsic validity of the will.

Bishop Sofronio was free to dispose of his estate without prejudice to the legitimes of his compulsory heirs. Bishop Sofronio's
only compulsory heirs were his parents.15 Their legitime was one-half of Bishop Sofronio's estate.16 Considering that Bishop
Sofronio gave his parents half of his estate, then he was free to dispose of the free portion of his estate in favor of his sister,
Dolores Hacbang Alo.� Thus, his will was intrinsically valid.

The CFPs failure to adjudicate the specific properties is irrelevant because Bishop Sofronio did not just name his heirs; he
also identified the specific properties forming part of their inheritance. The dispositions in the will rendered court adjudication
and distribution unnecessary.

The petitioners' contention that only a final decree of distribution of the estate vests title to the land of the estate in the
86
distributees is also incorrect. Again, ownership over the inheritance vests upon the heirs, legatees, and devisees immediately
upon the death of the decedent.

At the precise moment of death, the heirs become owners of the estate pro-indiviso. They become absolute owners of their
undivided aliquot share but with respect to the individual properties of the estate, they become co-owners. This co-ownership
remains until partition and distribution. Until then, the individual heirs cannot claim any rights over a specific property from
the estate. This is because the heirs do not know which properties will be adjudicated to them yet. Hence, there is a need for
a partition before title over particular properties vest in the distributee-heirs.

However, heirs, legatees, and devisees bequeathed specific properties do not require Court adjudication to identify which
particular properties become theirs; the testator had already identified these. From the very moment of the testator's death,
title over these particular properties vests on the heir, legatee, or devisee.

On 3 April 1937, title over the subject lot passed on to the respondent's mother, Dolores Hacbang Alo, at the exact moment
of her brother's death. From that moment on, she was free to dispose of the subject lot as a consequence of her ownership.

On the other hand, Bishop Sofronio's parents, Basilio and Maria Gaborny Hacbang, never acquired the title over the subject
lot. Thus, it never became part of their estate. Clearly, the petitioners - who claim to represent the children of Basilio and
Maria Gaborny in the spouses' estate -have no legal right or interest over the subject lot.

Every ordinary civil action must be based on a cause of action - an act or omission that violates the rights of the plaintiff.17 A
cause of action requires: c hanRoblesv irtual Lawlib rary

(1) a legal right in favor of the plaintiff; ChanRoble sVirt ualawli bra ry

(2) a correlative duty of the defendant to respect the plaintiffs right; and

(3) an act or omission of the defendant in violation of the plaintiffs right.18

Every action must also be prosecuted or defended in the name of the real party in interest: the party who stands to be
benefited or injured by the judgment.19 These fundamental requirements are not merely technical matters; they go into the
very substance of every suit.

The petitioners came to the courts praying for the annulment of the respondent's title yet they failed to show that they are
entitled to even ask for such relief. They have no right over the subject lot and the respondent has no legal obligation to
them with respect to the subject lot. Even if we assume that the respondent fraudulently or irregularly secured his certificate
of title, the bottom-line is that the petitioners have no legal standing to sue for the cancellation of this title. This right only
belongs to the rightful owner of the subject lot.

Judicial power is the duty of the courts to settle actual controversies involving rights which are legally demandable
and enforceable.20 Courts settle real legal disputes involving the rights and obligations between parties. If either of the
parties is not the real party in interest, the Court cannot grant the reliefs prayed for because that party has no legal right or
duty with respect to his opponent. Further litigation becomes an academic exercise in legal theory that eventually settles
nothing - a waste of time that could have been spent resolving actual justiciable controversies.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. Costs against the petitioners.

SO ORDERED. chanroblesvi rtua llawli bra ry

87
G.R. No. 181284

LOLOY UNDURAN, BARANGAY CAPTAIN ROMEO PACANA, NESTOR MACAPAYAG, RUPERTO DOGIA,
JIMMY TALINO, ERMELITO ANGEL, PETOY BESTO, VICTORINO ANGEL, RUEL BOLING, JERMY ANGEL,
BERTING SULOD, RIO BESTO, BENDIJO SIMBALAN, and MARK BRAZIL, Petitioners
vs.
RAMON ABERASTURI, CRISTINA C. LOPEZ, CESAR LOPEZ JR., DIONISIO A. LOPEZ, MERCEDES L.
GASTON, AGNES H. LOPEZ, EUSEBIO S. LOPEZ, JOSE MARIA S. LOPEZ, ANTON B. ABERASTURI, MA.
RAISSA A. VELEZ, ZOILO ANTONIO A. VELEZ, CRISTINA ABERASTURI, EDUARDO LOPEZ JR., ROSARIO
S. LOPEZ, JUAN S. LOPEZ, CESAR ANTHONY R. LOPEZ, VENANCIO L. GASTON, ROSEMARIE S. LOPEZ,
JAY A. ASUNCION, NICOLO ABERASTURI, LISA A. ASUNCION, INEZ A. VERAY, HERNAN A. ASUNCION,
ASUNCION LOPEZ, THOMAS A. VELEZ, LUIS ENRIQUE VELEZ, ANTONIO H. LOPEZ, CHARLES H. LOPEZ,
ANA L. ZAYCO, PILAR L. QUIROS, CRISTINA L. PICAZO, RENATO SANTOS, GERALDINE AGUIRRE, MARIA
CARMENCITA T. LOPEZ, and as represented by attorney-in-fact RAMON ABERASTURI, Respondents

DECISION

PERALTA, J.:

This is a petition for review on certiorari1 assailing the Decision2 dated August 17, 2006 of the Court of Appeals (CA)
in CA-G.R. SP No. 00204-MIN, and the Resolution3 dated July 4, 2007, which denied petitioners' motion for
reconsideration.

Petitioners, except for Mark Brazil and Nestor Macapayag, are members of the Miarayon, Lapok, Lirongan,
Talaandig Tribal Association (MILALITTRA), or Talaandig tribe, who claimed to have been living since birth on the
land located at Barangay Miarayon, Talakag, Bukidnon, Mindanao, which they inherited from their forefathers.

On the other hand, respondents, represented by attorney-in-fact Ramon Aberasturi, claimed to be the lawful owners
and possessor of an unregistered parcel of agricultural land (Lot No. 7367 Cad 630-D), with an area of 105.7361
hectares, which appears to be located within the ancestral domain of the Talaandig tribe.

On March 3, 2004, respondents filed a Petition for Accion Reivindicatoria, with Prayer for the Issuance of a
Temporary Restraining Order or Preliminary Prohibitory Injunction with Damages4 (original complaint for accion
reivindicatoria) against petitioners before the Regional Trial Court of Manolo Fortich, Bukidnon (RTC). Docketed as
Civil Case No. 04-03-01, the petition was raffled off to Branch 11.

On March 20, 2004, petitioners Macapayag and Brazil filed their Answer, alleging that respondents have no cause
of action against them. On March 23, 2004, the rest of the petitioners filed their Motion to Dismiss, alleging that the
RTC had no jurisdiction over the case. Petitioners alleged that with the advent of Republic Act No. (RA) 8371,
otherwise known as the Indigenous Peoples' Rights Act (IPRA), they, together with the rest of the tribe members,
assisted the National Commission on Indigenous Peoples (NCIP) in the processing, validation, and delineation of
their Ancestral Domain claim in May 2003. On July 25, 2003, Certificate of Ancestral Domain Title (CADT) No. R-10-
TAL-0703-0010 was issued by virtue of NCIP En Banc Resolution No. 08-02003 to the Talaandig tribe over its
ancestral domain in Talakag, Bukidnon, containing an area of 11,105.5657 hectares. On October 30, 2003,
President Gloria Macapagal Arroyo awarded the said CADT to the Talaandig tribe. As awardees of a CADT,
petitioners argued that NCIP has exclusive and original jurisdiction over the case, as the subject matter concerns a
dispute and controversy over an ancestral land/domain of Indigenous Cultural Communities (ICCs)/Indigenous
Peoples (IPs).

On July 1, 2004, the NCIP through Atty. Melanie Pimentel, filed a Motion to Refer the Case to the Regional Hearing
Office-National Commission on Indigenous Peoples (RHO-NCIP), alleging that the RTC had no jurisdiction over the
subject matter.

88
On July 5, 2004, respondents filed a Motion to Amend and Supplement Complaint from Accion Reivindicatoria to
one for "Injunction, Damages, and Other Relief," with the attached Amended and Supplemental
Complaint5(amended complaint for injunction). On July 30, 2004, petitioners filed an Opposition thereto.

On August 1, 2004, petitioners filed a Motion to Dismiss the Amended and Supplemental Complaint, alleging that
the RTC had no jurisdiction over the subject matter of the case and to issue a writ of injunction therein.

On August 10, 2004, the RTC issued an Order granting the Motion to Amend and Supplement Complaint, and
declared petitioners’ Motion to Refer the Case to the RHO-NCIP and Motion to Dismiss moot and academic as a
consequence of the grant of the said motion to amend and supplement complaint.

On August 17, 2004, petitioners filed a Manifestation praying for an ocular inspection of the disputed land to
determine the last, actual, peaceable, uncontested status of the area.

On August 25, 2004, petitioners filed another Motion to Refer the Case to the RHO-NCIP and Motion to Dismiss the
Amended Complaint.

On September 14, 2004, respondents filed their Opposition and Motion for Judgment by Default.

On February 14, 2005, the RTC issued an Order6 resolving all pending incidents before it, the dispositive portion of
which reads:

WHEREFORE, premises considered, defendant's [herein petitioners’] motion to refer the case to the RHO-NCIP
and its manifestation for an ocular inspection are hereby denied for being bereft of merit. Further, defendants
[petitioners], except Macapayag and Brazil, are hereby declared in default for their failure to file their Answer to the
Amended Complaint. Accordingly, let this case, as against defendants Macapayag and Brazil, be called for pre-trial
and ex-parte presentation of evidence as against the rest of defendants [petitioners] on May 2, 2005 at 9:00 o'clock
in the morning. Furthermore, the injunctive writ prayed for by the plaintiffs is hereby GRANTED for being
meritorious. Accordingly, defendants [petitioners], their agents and privies, or any other or all persons acting for and
in their behalves, are hereby ordered to observe, maintain and preserve the status quo subject of the action and/or
the relation between the parties in order to protect the rights of the plaintiffs while the case is pending in court and to
cease and desist from performing any acts that in one way or another contravene the tenor of this order, while
awaiting final determination of the instant suit or until further orders of this court. Furthermore, to answer for
whatever damage that defendants [petitioners] may sustain by reason of this injunction order if the court should
finally decide that plaintiffs [respondents] are not entitled to the relief it prayed for, plaintiffs [respondents] are hereby
directed to put up a bond in the amount of ONE HUNDRED THOUSAND PESOS (₱100,000.00) executed in favor
of the party enjoined.

SO ORDERED.7

On April 12, 2005, petitioners filed before the Court of Appeals a Petition for Certiorari and Prohibition with Prayer
for Preliminary Injunction and Issuance of a Temporary Restraining Order.

On August 17, 2006, the CA rendered a Decision affirming the RTC's February 14, 2005 Order, which in turn denied
the referral of the case to the NCIP, the dispositive portion of which states:

WHEREFORE, in view of the foregoing, the petition is hereby partly GRANTED. The assailed Order dated February
14, 2005 is hereby AFFIRMED with MODIFICATION that the order of default against petitioners, except Macapayag
and Brazil, is hereby LIFTED.

SO ORDERED.8

The CA ruled that the RTC correctly granted the amendment of the complaint and properly refused to refer the case
to the RHO-NCIP. Based on the allegations of both original complaint [accion reivindicatoria] and amended
complaint [injunction], the CA found that the subject matter of both complaints is well within the jurisdiction of the
89
RTC. The CA noted that the only substantial amendment made was with regard to the nature of the action which
originally was one of accion reivindicatoria and then changed to one for damages. And except for some
amendments as to petitioners' alleged violent acts and the prayer for declaration of their title to the subject property,
the rest of the amended complaint was basically the same as the original one, including the reliefs prayed for by
respondents. Anent the writ of preliminary injunction, the CA held that the RTC's assailed February 14, 2005 Order
is self-explanatory as to why the issuance of the same was proper considering the circumstances of the case.

On July 4, 2007, the CA denied petitioners' motion for reconsideration of its August 17, 2006 Decision.

Hence, this appeal on certiorari raising the following issues:

I. THE COURT OF APPEALS ERRED IN AFFIRMING THE JURISDICTION OF THE COURT A QUO OVER A
COMPLAINT FOR INJUNCTION INVOLVING AN ANCESTRAL DOMAIN OF THE TALAANDIGS.

II. THE COURT OF APPEALS ERRED IN AFFIRMING THE RESOLUTION OF THE COURT A QUO ALLOWING
THE AMENDMENT OF THE COMPLAINT, THE SOLE PURPOSE OF WHICH IS TO CONFER JURISDICTION ON
THE LOWER COURT.

III. THE COURT OF APPEALS ERRED IN RESOLVING THAT EVIDENCE MUST BE PRESENTED BEFORE THE
REGIONAL TRIAL COURT WHEN IN THE ORIGINAL ACTION FOR SPECIAL CIVIL ACTION FOR CERTIORARI
BEFORE IT, THE COURT A QUO HAS ADMITTED THAT A CADT WAS ISSUED IN FAVOR OF PETITIONERS. 9

On the first issue, petitioners contend that the RTC has no jurisdiction over Civil Case No. 04-03-0 for Injunction,
Damages and other Relief, because the 105.7361-hectare land claimed by respondents is undisputedly within the
ancestral domain of the Talaandig tribe over which a CADT has already been issued. Petitioners insist that, even
granting that the case is purely a personal action, the NCIP has exclusive and original jurisdiction over it as it
concerns a claim and dispute involving rights of ICCs/IPs over their ancestral domain.

On the second issue, petitioners argue that the amendment of the complaint from accion reivindicatoria to injunction
with damages was clearly meant to oust the NCIP of its jurisdiction over the case and confer it on the RTC by
concealing the real issue in the case, which is the parties' conflicting claims over the 105.7361-hectare land in
Miarayon, Talakag Bukidnon. According to petitioners, the cause of action in the complaint for accion
reivindicatoriais the claim of ownership and recovery of possession of the said land which is undisputedly found
within the Talaandig tribe's ancestral domain covered by CADT No. R10-TAL-0703-0010; hence, a claim within the
exclusive and original jurisdiction of the NCIP. Petitioners contend that respondents amended the complaint to one
for injunction to downplay the real issue which is the dispute over a land that is within the Talaandig tribe's ancestral
domain, and mainly capitalized on the acts complained of, such as harassment, threats, acts of terrorism, among
others, supposedly committed against respondents.

On the third issue, petitioners fault the CA in ruling that whether the complaint is one for Injunction or Accion
Reivindicatoria, the RTC has jurisdiction because nowhere in respondents' original and amended complaints is it
stated that petitioners were members of the ICCs or IPs and that the disputed property was part of their ancestral
domain. Petitioners take exception to the rule that jurisdiction over the subject matter is determined by the
allegations of the complaint, as strict adherence thereto would open the floodgates to the unscrupulous practice of
litigants divesting the NCIP of jurisdiction by crafting their complaints in such a way as would confer jurisdiction on
their court of choice. Petitioners contend that the literal averments of the complaint are not determinative of the
jurisdiction over the subject matter where the actual issues are evidenced by subsequent pleadings; in certain
cases, the real nature and character of the pleadings and issues are not merely found in the complaint, but also in
the subsequent pleadings submitted by both parties. Petitioners stress that although the complaint banners the
subject matter as one for injunction, the pleadings of respondents show that the subject matter is the conflicting
ownership claims over the land. In fact, petitioners point out that the records of the case show that various pieces of
evidence have been presented to prove that the dispute involves conflicting claims over a land covered by a CADT.

For their part, respondents contend that petitioners do not have legal capacity or standing and locus standi to file
this petition, since they failed to make prima facie showing that they are members of IPs/ICCs, or that they were

90
authorized to represent the Talaandig tribe. Respondents insist that based on the allegations in their amended
complaint for injunction and damages, the RTC has jurisdiction over the subject matter which is a purely personal
action and incapable of pecuniary estimation. Respondents assert that the real issue is whether or not petitioners
are guilty of wrongful acts of violence, terrorism, destruction, intimidation, harassment, etc., to justify a permanent
injunction and hold the latter liable for damages. Respondents also point out that petitioners cannot invoke
protection under the IPRA 8731, because the conflict does not involve an ancestral domain and they (respondents)
are not IPs so the condition precedent before bringing a dispute before the NCIP cannot be satisfied, i.e.,
exhaustion of remedies under customary laws by the parties.

The petition has no merit.

On the procedural issue raised by respondents, the Court disagrees with their contention that petitioners do not
have legal capacity or standing and locus standi to file the petition, for failure to show that they are members of
IPs/ICCs, or that they are authorized to represent the Talaandig tribe.

Locus standi is defined as a right of appearance in a court of justice on a given question. In private suits, standing is
governed by the "real parties in interest" rule found in Section 2,10 Rule 3 of the Rules of Court. Such concept of real
party-in-interest is adapted in Section 2,11 Rule VI of the 2014 Revised Rules of Procedure before the NCIP. That
petitioners are the real parties in interest can be gleaned from the Entry of Appearance with

Motion to Refer the Case to the Regional Hearing Office of the NCIP12 filed by the NCIP Special Transition Team-
Quick Response Unit (STRAT-QRU). The STRAT-QRU counsels alleged therein that the respondents' complaint for
recovery of ownership (accion reinvidicatoria) sought to recover an unregistered real property situated in Miarayon,
Bukidnon, from petitioners, all of whom are, with the exception of Nestor Macapayag and Mark Brazil, member-
beneficiaries of CADT No. R10-TAL-0703-0010 issued by the NCIP in the name of the Talaandig Indigenous
Peoples, located at Talakag, Province of Bukidnon. In support of their allegation, petitioners presented a
certification13 that the disputed land is within the area covered by the same CADT, and the NCIP List of Beneficiaries
of Talaandig Ancestral Domain of Miarayon, Lirongan, Lapok, San Miguel, Talakag, Bukidnon.14 In contrast,
respondents failed to submit any evidence to dispute petitioners' claim that they are members of the Talaandig
Tribe. Hence, respondents' contention that petitioners have no legal standing to file the petition, is without merit.

In resolving the pivotal issue of which between the RTC and the NCIP has jurisdiction over the respondents'
amended complaint, foremost in the Court's mind is the principle in "that jurisdiction over the subject matter of a
case is conferred by law and determined by the allegations in the complaint which comprise a concise statement of
the ultimate facts constituting the plaintiff's cause of action. The nature of an action, as well as which court or body
has jurisdiction over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective
of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. The averments in
the complaint and the character of the relief sought are the ones to be consulted. Once vested by the allegations in
the complaint, jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon
all or some of the claims asserted therein."15

Under Section 19 of B.P. 129, as amended (Judiciary Reorganization Act of 1980), the RTC shall exercise exclusive
original jurisdiction in all civil actions in which the subject of the litigation is incapable of pecuniary estimation, and in
all civil actions which involve title to, possession of, real property or any interest therein where the assessed value of
the property or interest therein exceeds Twenty Thousand Pesos (₱20,000.00) or, in civil actions in Metro Manila,
where such assessed value exceeds Fifty Thousand Pesos (₱50,000.00).

On the other hand, the NCIP's jurisdiction is defined under Section 66 of the IPRA as follows:

Sec. 66. Jurisdiction of the NCIP. − The NCIP, through its regional offices, shall have jurisdiction over all claims
and disputes involving rights of ICCs/IPs; Provided, however, That no such dispute shall be brought to the NCIP
unless the parties have exhausted all remedies provided under their customary laws. For this purpose, a certification
shall be issued by the Council of Elders/Leaders who participated in the attempt to settle the dispute that the same
has not been resolved, which certification shall be a condition precedent to the filing of a petition with the NCIP.16

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On the matter of NCIP's jurisdiction and of procedures for enforcement of rights, NCIP Administrative Order No. 1,
1998, the Implementing Rules and Regulations (NCIP-IRR) of the IPRA, Rule IX, Section 1 states:

Section 1. Primacy of Customary Law. - All conflicts related to the ancestral domain and lands, involving ICCs/IPs,
such as but not limited to the conflicting claims and boundary disputes, shall be resolved by the concerned parties
through the application of customary laws in the area where the disputed ancestral domain or land is located.

All conflicts related to the ancestral domain or lands where one of the parties is non-ICC/IP or where the
dispute could not be resolved through customary law shall be heard and adjudicated in accordance with the
Rules on Pleadings, Practice and Procedure before the NCIP to be adopted hereafter.

All decisions of the NCIP may be brought on Appeal by Petition for Review to the Court of Appeals within fifteen (15)
days from receipt of the Order or Decision.17

In line with Section 69 of the IPRA on the NCIP's quasi-judicial power to promulgate rules and regulations governing
the hearing and disposition of cases filed before it, the NCIP issued Administrative Circular No. 1-03 dated April 9,
2003, known as the Rules on Pleadings, Practice and Procedure (NCIP Rules), which reiterates its jurisdiction over
claims and disputes involving rights of ICCs/IPs and enumerates the actions that may be brought before it. Section
5, Rule III, of the NCIP Rules provides for the jurisdiction of the NCIP-RHO:

Sec. 5. Jurisdiction of the NCIP. − The NCIP through its Regional Hearing Offices shall exercise jurisdiction over all
claims and disputes involving rights of ICCs/IPs and all cases pertaining to the implementation, enforcement, and
interpretation of the IPRA 8371, including but not limited to the following:

(1) Original and Exclusive Jurisdiction of the Regional Hearing Officer (RHO):

a. Cases involving disputes, controversies over ancestral lands/domains of ICCs/IPs;

b. Cases involving violations of the requirement of free and prior and informed consent of ICC/IPs;

c. Actions for enforcement of decisions of ICCs/IPs involving violations of customary laws or desecration of
ceremonial sites, sacred places, or rituals;

d. Actions for redemption/reconveyance under Section 8(b) of R.A. 8371; and

e. Such other cases analogous to the foregoing.

(2) Original jurisdiction of the Regional Hearing Officer:

a. Cases affecting property rights, claims of ownership, hereditary succession, and settlement of land disputes,
between and among ICCs/IPs that have not been settled under customary laws; and

b. Actions for damages arising out of any violation of Republic Act No. 8371;

(3) Exclusive and Original Jurisdiction of the Commission:

a. Petition for cancellation of Certificate of Ancestral Domain Titles/Certificate of Ancestral Land Titles
(CADTs/CALTs) alleged to have been fraudulently acquired by, and issued to, any person or community as
provided for under Section 54 of R.A. 8371. Provided that such action is filed within one (1) year from the
date of registration.

Anent the condition precedent to the filing of a petition with the NCIP under Section 66 of the IPRA, Sections 13 and
14, Rule IV of the NCIP Rules pertinently provide:

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Section 13. Certification to File Action. - Upon the request of the proper party, members of the indigenous dispute
settlement group or council of elders shall likewise issue a certification to file action before the NCIP. In giving due
regard to customary laws, the certification may be in any form so long as it states in substance the failure of
settlement notwithstanding the efforts made under customary law or traditional practices.

Section 14. Exceptions. - The certification shall not be required in the following cases:

a. Where one of the parties is a public or private corporation, partnership, association or juridical person or
a public officer or employee and the dispute is in connection with the performance of his official functions;

b. Where one of the parties is non-IP/ICC or does not belong to the same IP/IC Community, except when he
voluntarily submits to the jurisdiction of the Council of Elders/Leaders;

c. Where the relief sought for in the complaint or petition seeks to prevent any grave, imminent and irreparable
damage or injury that may result if not acted upon immediately; and

d. Where the Council of Elders/Leaders refuse to issue the necessary certification without justifiable reasons.18

Having spelled out the jurisdictions conferred by law to the RTC and the NCIP over the subject matters of their
respective cases, the Court now examines the allegations in the original and amended complaints to find out which
tribunal may properly exercise jurisdiction over this case.

In their original complaint for accion reivindicatoria, respondents traced the provenance of their title over said land to
one Mamerto Decano, a Chieftain of Talaandig tribe, by virtue of a Deed of Sale executed on July 27, 1957. They
averred that, together with their predecessor-in-interest, they have religiously paid the real estate taxes thereon
since 1957 and that they have been in physical, actual, open, prior, notorious, continuous, public and adverse
possession of said land in the concept of owners for more than 50 years, even prior to June 12, 1945. They alleged
that said land was declared alienable and disposable since August 3, 1927 per certification of the Department of
Environment and Natural Resources. They claimed that by means of fraud, stealth and surreptitious means,
petitioners entered the said land, without permission and against the consent of the landowners, caused damages
therein and harassed respondents by indiscriminately firing upon their farm workers. They added that petitioners
continue such harassment by means of armed men frequenting the campsite and firing M-16 rifles at them during
nighttime, causing great fear and threat.

Respondents prayed before the RTC for the following reliefs, among others: (1) to cause the preliminary injunction
to be made permanent for the respondents to enjoy possession of their property, free from threats of physical harm,
harassment and undue obstruction caused by petitioners; (2) to order petitioners to respect and not to harass,
intimidate and cause trouble to the prior possession of respondents as the owners by virtue of right of title; (3) to
order petitioners to pay moral and exemplary damages, attorney's fees, appearance fees and costs of suit; and (4)
to declare respondents' title as having become a vested right, and as such entitled to all right and incident of an
absolute owner.

In their amended complaint for injunction and damages, on the other hand, respondents further alleged that
sometime in November 2003, petitioners harassed, intimidated, threatened, and fired high-powered rifles upon
respondents' farm workers to drive them away from the land, without legal or justifiable reason. They added that,
despite having hired private security guards to secure and protect their property, these violent incidents were
followed by more acts of violence, lawlessness, harassment, terrorism to drive away respondents from the land
which they claim to lawfully own and possess.

Respondents prayed before the RTC for the following reliefs: (1) to order petitioners and their representatives, to
stop and refrain from committing acts of violence, destruction, assault and other forms of lawlessness and terrorism
against respondents, and to maintain the peaceful possession and enjoyment of the 105-hectare land by
respondents as an attribute of ownership; (2) to declare petitioners to have committed acts of violence, harassment,
intimidation, destruction, assault and other forms of lawlessness against respondents, and to permanently order
petitioners to stop and refrain from committing similar acts; and (3) to hold petitioners jointly and severally liable to

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pay respondents actual damages, moral damages, exemplary damages, attorney's fees, litigation expenses and
treble costs.

After a perusal of the allegations and prayers in both original and amended complaints, the Court notes that
respondents neither alleged therein that the parties are members of ICCs/IPs nor that the case involves a dispute or
controversy over ancestral lands/domains of ICC/IPs. Rather, the allegations in respondents' original complaint
make up for an accion reivindicatoria, a civil action which involves an interest in a real property with an assessed
value of P683,760.00, while the allegations in their amended complaint make out a case for injunction, a civil action
which is incapable of pecuniary estimation. The Court therefore finds that the CA correctly ruled that the subject
matter of the amended complaint based on allegations therein was within the jurisdiction of the RTC.

Meanwhile, contrary to petitioners' contention, the mere fact that this case involves members of ICCs/IPs and their
ancestral land is not enough to for it to fall under the jurisdiction of the NCIP under Section 66 of the IPRA, to wit:

Sec. 66. Jurisdiction of the NCIP. − The NCIP, through its regional offices, shall have jurisdiction over all claims and
disputes involving rights of ICCs/IPs; Provided, however, That no such dispute shall be

brought to the NCIP unless the parties have exhausted all remedies provided under their customary laws. For this
purpose, a certification shall be issued by the Council of Elders/Leaders who participated in the attempt to settle the
dispute that the same has not been resolved, which certification shall be a condition precedent to the filing of a
petition with the NCIP.

A careful review of Section 66 shows that the NCIP shall have jurisdiction over claims and disputes involving rights
of ICCs/IPs only when they arise between or among parties belonging to the same ICC/IP. This can be gathered
from the qualifying provision that "no such dispute shall be brought to the NCIP unless the parties have exhausted
all remedies provided under their customary laws. For this purpose, a certification shall be issued by the Council of
Elders/Leaders who participated in the attempt to settle the dispute that the same has not been resolved, which
certification shall be a condition precedent to the filing of a petition with the NCIP."

The qualifying provision requires two conditions before such disputes may be brought before the NCIP, namely: (1)
exhaustion of remedies under customary laws of the parties, and (2) compliance with condition precedent through
the said certification by the Council of Elders/Leaders. This is in recognition of the rights of ICCs/IPs to use their own
commonly accepted justice systems, conflict resolution institutions, peace building processes or mechanisms and
other customary laws and practices within their respective communities, as may be compatible with the national
legal system and with internationally recognized human rights.19

Section 3 (f) of the IPRA defines customary laws as a body of written and/or unwritten rules, usages, customs and
practices traditionally and continually recognized, accepted and observed by respective ICCs/IPs. From this
restrictive definition, it can be gleaned that it is only when both parties to a case belong to the same ICC/IP that the
abovesaid two conditions can be complied with. If the parties to a case belong to different ICCs/IPs which are
recognized to have their own separate and distinct customary laws and Council of Elders/Leaders, they will fail to
meet the abovesaid two conditions. The same holds true if one of such parties was a non-ICC/IP member who is
neither bound by customary laws as contemplated by the IPRA nor governed by such council. Indeed, it would be
violative of the principles of fair play and due process for those parties who do not belong to the same ICC/IP to be
subjected to its customary laws and Council of Elders/Leaders.

Therefore, pursuant to Section 66 of the IPRA, the NCIP shall have jurisdiction over claims and disputes involving
rights of ICCs/IPs only when they arise between or among parties belonging to the same ICC/IP. When such claims
and disputes arise between or among parties who do not belong to the same ICC/IP, i.e., parties belonging to
different ICC/IPs or where one of the parties is a non-ICC/IP, the case shall fall under the jurisdiction of the proper
Courts of Justice, instead of the NCIP. In this case, while most of the petitioners belong to Talaandig Tribe,
respondents do not belong to the same ICC/IP. Thus, even if the real issue involves a dispute over land which
appear to be located within the ancestral domain of the Talaandig Tribe, it is not the NCIP but the RTC which shall
have the power to hear, try and decide this case.

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There are, however, exceptional cases where the NCIP shall still have jurisdiction over such claims and disputes
even if the parties involved do not belong to the same ICC/IP, viz.:

1. Cases under Sections 52 and 62 of the IPRA which contemplate a situation where a dispute over an ancestral
domain involving parties who do not belong to the same, but to different ICCs/IPs, to wit:

SECTION 52. Delineation Process. — The identification and delineation of ancestral domains shall be done in
accordance with the following procedures:

h) Endorsement to NCIP. — Within fifteen (15) days from publication, and of the inspection process, the Ancestral
Domains Office shall prepare a report to the NCIP endorsing a favorable action upon a claim that is deemed to have
sufficient proof. However, if the proof is deemed insufficient, the Ancestral Domains Office shall require the
submission of additional evidence: Provided, That the Ancestral Domains Office shall reject any claim that is
deemed patently false or fraudulent after inspection and verification: Provided, further, That in case of rejection, the
Ancestral Domains Office shall give the applicant due notice, copy furnished all concerned, containing the grounds
for denial. The denial shall be appealable to the NCIP: Provided, furthermore, That in cases where there are
conflicting claims among ICCs/IPs on the boundaries of ancestral domain claims, the Ancestral Domains Office shall
cause the contending parties to meet and assist them in coming up with a preliminary resolution of the conflict,
without prejudice to its full adjudication according to the section below.

SECTION 62. Resolution of Conflicts. — In cases of conflicting interest, where there are adverse claims within the
ancestral domains as delineated in the survey plan, and which can not be resolved, the NCIP shall hear and
decide, after notice to the proper parties, the disputes arising from the delineation of such ancestral
domains: Provided, That if the dispute is between and/or among ICCs/IPs regarding the traditional
boundaries of their respective ancestral domains, customary process shall be followed. The NCIP shall
promulgate the necessary rules and regulations to carry out its adjudicatory functions: Provided, further, That any
decision, order, award or ruling of the NCIP on any ancestral domain dispute or on any matter pertaining to the
application, implementation, enforcement and interpretation of this Act may be brought for Petition for Review to the
Court of Appeals within fifteen (15) days from receipt of a copy thereof.20

2. Cases under Section 54 of the IPRA over fraudulent claims by parties who are not members of the same ICC/IP,
to wit:

SECTION 54. Fraudulent Claims. — The Ancestral Domains Office may, upon written request from the ICCs/IPs,
review existing claims which have been fraudulently acquired by any person or community. Any claim found to be
fraudulently acquired by, and issued to, any person or community may be cancelled by the NCIP after due
notice and hearing of all parties concerned.21

Considering the general rule that the jurisdiction of the NCIP under Section 66 of the IPRA covers only disputes and
claims between and among members of the same ICCs/IPs involving their rights under the IPRA, as well as the
basic administrative law principle that an administrative rule or regulation must conform, not contradict the
provisions of the enabling law,22 the Court declares Rule IX, Section 1 of the IPRA-IRR23, Rule III, Section 524 and
Rule IV, Sections 13 and 14 of the NCIP Rules25 as null and void insofar as they expand the jurisdiction of the NCIP
under Section 66 of the IPRA to include such disputes where the parties do not belong to the same ICC/IP. As the
Court held in Paduran v. DARAB,26 "[j]urisdiction over a subject matter is conferred by the Constitution or the law and
rules of procedure yield to substantive law. Otherwise stated, jurisdiction must exist as a matter of law.27 Only a
statute can confer jurisdiction on courts and administrative agencies; rules of procedure cannot.28 In the abovesaid
exceptional cases where one of the parties is a non-ICC/IP or does not belong to the same ICC/IP, however, Rule
IV, Section 14 of the NCIP Rules validly dispenses with the requirement of certification issued by the Council of
Elders/Leaders who participated in the failed attempt to settle the dispute according to the customary laws of the
concerned ICC/IP.

WHEREFORE, the petition is DENIED and the Court of Appeals Decision dated August 17, 2006, and its Resolution
dated July 4, 2007, in CAG.R. SP No. 00204-MIN, are AFFIRMED.

95
EN BANC

G.R. Nos. 217126-27, November 10, 2015

CONCHITA CARPIO MORALES, IN HER CAPACITY AS THE OMBUDSMAN, Petitioner, v. COURT OF APPEALS (SIXTH
DIVISION) AND JEJOMAR ERWIN S. BINAY, JR., Respondents.

DECISION

PERLAS-BERNABE, J.:

"All government is a trust, every branch of government is a trust, and immemorially acknowledged so to be[.]"1 ChanRoblesVirtua lawlib rary

The Case

Before the Court is a petition for certiorari and prohibition2 filed on March 25, 2015 by petitioner Conchita Carpio Morales, in
her capacity as the Ombudsman (Ombudsman), through the Office of the Solicitor General (OSG), assailing: (a) the
Resolution3 dated March 16, 2015 of public respondent the Court of Appeals (CA) in CA-G.R. SP No. 139453, which granted
private respondent Jejomar Erwin S. Binay, Jr.'s (Binay, Jr.) prayer for the issuance of a temporary restraining order (TRO)
against the implementation of the Joint Order4 dated March 10, 20,15 of the Ombudsman in OMB-C-A-15-0058 to 0063
(preventive suspension order) preventively suspending him and several other public officers and employees of the City
Government of Makati, for six (6) months without pay; and (b) the Resolution5 dated March 20, 2015 of the CA, ordering the
Ombudsman to comment on Binay, Jr.'s petition for contempt6 in CA-G.R. SP No. 139504.

Pursuant to the Resolution7 dated April 6, 2015, the CA issued a writ of preliminary injunction8 (WPI) in CA-G.R. SP No.
139453 which further enjoined the implementation of the preventive suspension order, prompting the Ombudsman to file a
supplemental petition9 on April 13, 2015.

The Facts

On July 22, 2014, a complaint/affidavit10 was filed by Atty. Renato L. Bondal and Nicolas "Ching" Enciso VI before the Office
of the Ombudsman against Binay, Jr. and other public officers and employees of the City Government of Makati (Binay,
Jr., et al), accusing them of Plunder11 and violation of Republic Act No. (RA) 3019,12 otherwise known as "The Anti-Graft and
Corrupt Practices Act," in connection with the five (5) phases of the procurement and construction of the Makati City Hall
Parking Building (Makati Parking Building).13

On September 9, 2014, the Ombudsman constituted a Special Panel of Investigators14 to conduct a fact-finding investigation,
submit an investigation report, and file the necessary complaint, if warranted (1st Special Panel).15 Pursuant to the
Ombudsman's directive, on March 5, 2015, the 1st Special Panel filed a complaint16 (OMB Complaint) against Binay, Jr., et al,
charging them with six (6) administrative cases17for Grave Misconduct, Serious Dishonesty, and Conduct Prejudicial to the
Best Interest of the Service, and six (6) criminal cases18 for violation of Section 3 (e) of RA 3019, Malversation of Public
Funds, and Falsification of Public Documents (OMB Cases).19

As to Binay, Jr., the OMB Complaint alleged that he was involved in anomalous activities attending the following procurement
and construction phases of the Makati Parking Building project, committed during his previous and present terms as City
Mayor of Makati:

Binay, Jr.'s First Term (2010 to 2013)20


(a) On September 21, 2010, Binay, Jr. issued the Notice of Award21 for Phase III of the Makati Parking Building project to
Hilmarc's Construction Corporation (Hilmarc's), and consequently, executed the corresponding contract22 on September 28,
2010,23 without the required publication and the lack of architectural design,24 and approved the release of funds therefor in
the following amounts as follows: (1) P130,518,394.80 on December 15, 2010;25 (2) P134,470,659.64 on January 19,
2011;26 (3) P92,775,202.27 on February 25, 2011;27 (4) P57,148,625.51 on March 28, 2011;28 (5) P40,908,750.61
on May 3, 2011;29 and (6) P106,672,761.90 on July 7, 2011;30

(b) On August 11, 2011, Binay, Jr. issued the Notice of Award31 for Phase IV of the Makati Parking Building project to
Hilmarc's, and consequently, executed the corresponding contract32 on August 18, 2011,33 without the required publication
and the lack of architectural design,34 and approved the release of funds therefor in the following amounts as follows: (1)
P182,325,538.97 on October 4, 2O11;35 (2) P173,132,606.91 on October 28,2011;36 (3) P80,408,735.20 on December 12,
2011;37 (4) P62,878,291.81 on February 10, 2012;38 and (5) P59,639,167.90 on October 1, 2012;39

(c) On September 6, 2012, Binay, Jr. issued the Notice of Award40 for Phase V of the Makati Parking Building project to
Hilmarc's, and consequently, executed the corresponding contract41 on September 13, 2012,42 without the required

96
publication and the lack of architectural design,43 and approved the release of the funds therefor in the amounts of
P32,398,220.0544 and P30,582,629.3045 on December 20, 2012;� and

Binay, Jr.'s Second Term (2013 to 2016)46

(d) On July 3, 2013 and July 4, 2013, Binay, Jr. approved the release of funds for the remaining balance of the September
13, 2012 contract with Hilmarc's for Phase V of the Makati Parking Building project in the amount of P27,443,629.97;47 and

(e) On July 24, 2013, Binay, Jr. approved the release of funds for the remaining balance of the contract48 with MANA
Architecture & Interior Design Co. (MANA) for the design and architectural services covering the Makati Parking Building
project in the amount of P429,011.48.49

On March 6, 2015, the Ombudsman created another Special Panel of Investigators to conduct a preliminary investigation and
administrative adjudication on the OMB Cases (2nd Special Panel).50Thereafter, on March 9, 2015, the 2nd Special Panel issued
separate orders51 for each of the OMB Cases, requiring Binay, Jr., et al. to file their respective counter-affidavits.52

Before Binay, Jr., et al.'s filing of their counter-affidavits, the Ombudsman, upon the recommendation of the 2nd Special
Panel, issued on March 10, 2015, the subject preventive suspension order, placing Binay, Jr., et al. under preventive
suspension for not more than six (6) months without pay, during the pendency of the OMB Cases.53 The Ombudsman ruled
that the requisites for the preventive suspension of a public officer are present,54 finding that: (a) the evidence of Binay,
Jr., et al.'s guilt was strong given that (1) the losing bidders and members of the Bids and Awards Committee of Makati City
had attested to the irregularities attending the Makati Parking Building project; (2) the documents on record negated the
publication of bids; and (3) the disbursement vouchers, checks, and official receipts showed the release of funds; and (b) (1)
Binay, Jr., et al. were administratively charged with Grave Misconduct, Serious Dishonesty, and Conduct Prejudicial to the
Best Interest of the Service; (2) said charges, if proven to be true, warrant removal from public service under the Revised
Rules on Administrative Cases in the Civil Service (RRACCS), and (3) Binay, Jr., et al.'s respective positions give them access
to public records and allow them to influence possible witnesses; hence, their continued stay in office may prejudice the
investigation relative to the OMB Cases filed against them.55 Consequently, the Ombudsman directed the Department of
Interior and Local Government (DILG), through Secretary Manuel A. Roxas II (Secretary Roxas), to immediately implement
the preventive suspension order against Binay, Jr., et al., upon receipt of the same.56

On March 11, 2015, a copy of the preventive suspension order was sent to the Office of the City Mayor, and received by
Maricon Ausan, a member of Binay, Jr.'s staff.57

The Proceedings Before the CA

On even date,58 Binay, Jr. filed a petition for certiorari59 before the CA, docketed as CA-G.R. SP No. 139453, seeking the
nullification of the preventive suspension order, and praying for the issuance of a TRO and/or WPI to enjoin its
implementation.60Primarily, Binay, Jr. argued that he could not be held administratively liable for any anomalous
activity attending any of the five (5) phases of the Makati Parking Building project since: (a) Phases I and II were undertaken
before he was elected Mayor of Makati in 2010; and (b) Phases III to V transpired during his first term and that his re-
election as City Mayor of Makati for a second term effectively condoned his administrative liability therefor, if
any, thus rendering the administrative cases against him moot and academic.61In any event, Binay, Jr. claimed that the
Ombudsman's preventive suspension order failed to show that the evidence of guilt presented against him is
strong, maintaining that he did not participate in any of the purported irregularities.62 In support of his prayer for injunctive
relief, Binay, Jr. argued that he has a clear and unmistakable right to hold public office, having won by landslide vote in the
2010 and 2013 elections, and that, in view of the condonation doctrine, as well as the lack of evidence to sustain the charges
against him, his suspension from office would undeservedly deprive the electorate of the services of the person they have
conscientiously chosen and voted into office.63

On March 16, 2015, at around 8:24 a.m., Secretary Roxas caused the implementation of the preventive suspension order
through the DILG National Capital Region - Regional Director, Renato L. Brion, CESO III (Director Brion), who posted a copy
thereof on the wall of the Makati City Hall after failing to personally serve the same on Binay, Jr. as the points of entry to the
Makati City Hall were closed. At around 9:47 a.m., Assistant City Prosecutor of Makati Billy C. Evangelista administered the
oath of office on Makati City Vice Mayor Romulo V. Pe�a, Jr. (Pe�a, Jr.) who thereupon assumed office as Acting Mayor.64

At noon of the same day, the CA issued a Resolution65 (dated March 16, 2015), granting Binay, Jr.'s prayer for a
TRO,66 notwithstanding Pena, Jr.'s assumption of duties as Acting Mayor earlier that day.67Citing the case of Governor Garcia,
Jr. v. CA,68 the CA found that it was more prudent on its part to issue a TRO in view of the extreme urgency of the matter
and seriousness of the issues raised, considering that if it were established that the acts subject of the administrative cases
against Binay, Jr. were all committed during his prior term, then, applying the condonation doctrine, Binay, Jr.'s re-election
meant that he can no longer be administratively charged.69 The CA then directed the Ombudsman to comment on Binay, Jr.'s
petition for certiorari .70

On March 17, 2015, the Ombudsman manifested71 that the TRO did not state what act was being restrained and that since
the preventive suspension order had already been served and implemented, there was no longer any act to restrain.72
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On the same day, Binay, Jr. filed a petition for contempt,73� docketed as CA-G.R. SP No. 139504, accusing Secretary
Roxas, Director Brion, the officials of the Philippine National Police, and Pena, Jr. of deliberately refusing to obey the CA,
thereby allegedly impeding, obstructing, or degrading the administration of justice.74 The Ombudsman and Department of
Justice Secretary Leila M. De Lima were subsequently impleaded as additional respondents upon Binay, Jr.'s filing of the
amended and supplemental petition for contempt75 (petition for contempt) on March 19, 2015.76 Among others, Binay, Jr.
accused the Ombudsman and other respondents therein for willfully and maliciously ignoring the TRO issued by the CA
against the preventive suspension order.77

In a Resolution78dated March 20, 2015, the CA ordered the consolidation of CA-G.R. SP No. 139453 and CA-G.R. SP No.
139504, and, without necessarily giving due course to Binay, Jr.'s petition for contempt, directed the Ombudsman to
file her comment thereto.79 The cases were set for hearing of oral arguments on March 30 and 31, 2015.80

The Proceedings Before the Court

Prior to the hearing of the oral arguments before the CA, or on March 25, 2015, the Ombudsman filed the present petition
before this Court, assailing the CA's March 16, 2015 Resolution, which granted Binay, Jr.'s prayer for TRO in CA-G.R. SP No.
139453, and the March 20, 2015 Resolution directing her to file a comment on Binay, Jr.'s petition for contempt in CA-G.R.
SP No. 139504.81 The Ombudsman claims that: (a) the CA had no jurisdiction to grant Binay, Jr.'s prayer for a TRO, citing
Section 14 of RA 6770,82 or "The Ombudsman Act of 1989," which states that no injunctive writ could be issued to delay the
Ombudsman's investigation unless there is prima facie evidence that the subject matter thereof is outside the latter's
jurisdiction;83 and (b) the CA's directive for the Ombudsman to comment on Binay, Jr.'s petition for contempt is illegal and
improper, considering that the Ombudsman is an impeachable officer, and therefore, cannot be subjected to contempt
proceedings.84

In his comment85 filed on April 6, 2015, Binay, Jr. argues that Section 1, Article VIII of the 1987 Constitution specifically
grants the CA judicial power to review acts of any branch or instrumentality of government, including the Office of the
Ombudsman, in case of grave abuse of discretion amounting to lack or excess of jurisdiction, which he asserts was
committed in this case when said office issued the preventive suspension order against him.86 Binay, Jr. posits that it was
incumbent upon the Ombudsman to1 have been apprised of the condonation doctrine as this would have weighed heavily in
determining whether there was strong evidence to warrant the issuance of the preventive suspension order.87 In this
relation, Binay, Jr. maintains that the CA correctly enjoined the implementation of the preventive suspension order given his
clear and unmistakable right to public office, and that it is clear that he could not be held administratively liable for any of
the charges against him since his subsequent re-election in 2013 operated as a condonation of any administrative offenses
he may have committed during his previous term.88 As regards the CA's order for the Ombudsman to comment on his
petition for contempt, Binay, Jr. submits that while the Ombudsman is indeed an impeachable officer and, hence, cannot be
removed from office except by way of impeachment, an action for contempt imposes the penalty of fine and imprisonment,
without necessarily resulting in removal from office. Thus, the fact that the Ombudsman is an impeachable officer should not
deprive the CA of its inherent power to punish contempt.89

Meanwhile, the CA issued a Resolution90 dated April 6, 2015, after the oral arguments before it were held,91 granting
Binay, Jr.'s prayer for a WPI, which further enjoined the implementation of the preventive suspension order. In so ruling, the
CA found that Binay, Jr. has an ostensible right to the final relief prayed for, namely, the nullification of the preventive
suspension order, in view of the condonation doctrine, citing Aguinaldo v. Santos.92 Particularly, it found that the
Ombudsman can hardly impose preventive suspension against Binay, Jr. given that his re-election in 2013 as City Mayor of
Makati condoned any administrative liability arising from anomalous activities relative to the Makati Parking Building project
from 2007 to 2013.93 In this regard, the CA added that, although there were acts which were apparently committed by
Binay, Jr. beyond his first term � namely, the alleged payments on July 3, July 4, and July 24, 2013,94 corresponding to the
services of Hillmarc's and MANA - still, Binay, Jr. cannot be held administratively liable therefor based on the cases
of Salalima v. Guingona, Jr.,95 and Mayor Garcia v. Mojica96 wherein the condonation doctrine was still applied by the
Court although the payments were made after the official's re-election, reasoning that the payments were merely effected
pursuant to contracts executed before said re-election.97 To this, the CA added that there was no concrete evidence of Binay,
Jr.'s participation for the alleged payments made on July 3, 4, and 24, 2013.98

In view of the CA's supervening issuance of a WPI pursuant to its April 6, 2015 Resolution, the Ombudsman filed a
supplemental petition99 before this Court, arguing that the condonation doctrine is irrelevant to the determination of whether
the evidence of guilt is strong for purposes of issuing preventive suspension orders. The Ombudsman also maintained that a
reliance on the condonation doctrine is a matter of defense, which should have been raised by Binay, Jr. before it during the
administrative proceedings, and that, at any rate, there is no condonation because Binay, Jr. committed acts subject of the
OMB Complaint after his re-election in 2013.100

On April 14 and 21, 2015,101 the Court conducted hearings for the oral arguments of the parties. Thereafter, they were
required to file their respective memoranda.102 In compliance thereto, the Ombudsman filed her Memorandum103 on May 20,
2015, while Binay, Jr. submitted his Memorandum the following day.104

Pursuant to a Resolution105 dated June 16, 2015, the Court directed the parties to comment on each other's memoranda, and

98
the OSG to comment on the Ombudsman's Memorandum, all within ten (10) days from receipt of the notice.

On July 15, 2015, both parties filed their respective comments to each other's memoranda.106Meanwhile, on July 16, 2015,
the OSG filed its Manifestation In Lieu of Comment,107 simply stating that it was mutually agreed upon that the Office of the
Ombudsman would file its Memorandum, consistent with its desire to state its "institutional position."108 In her Memorandum
and Comment to Binay, Jr.'s Memorandum, the Ombudsman pleaded, among others, that this Court abandon the
condonation doctrine.109 In view of the foregoing, the case was deemed submitted for resolution. chan rob leslaw

The Issues Before the Court

Based on the parties' respective pleadings, and as raised during the oral arguments conducted before this Court, the main
issues to be resolved in seriatim are as follows:

I. Whether or not the present petition, and not motions for reconsideration of the assailed CA issuances in CA-
G.R. SP No. 139453 and CA-G.R. SP No. 139504, is the Ombudsman's plain, speedy, and adequate
remedy; c ralawlawli bra ry

II. Whether or not the CA has subject matter jurisdiction over the main petition for certiorari in CA-G.R. SP No.
139453; cra lawlawlib rary

III. Whether or not the CA has subject matter jurisdiction to issue a TRO and/or WPI enjoining the
implementation of a preventive suspension order issued by the Ombudsman; cralawlawlibra ry

IV. Whether or not the CA gravely abused its discretion in issuing the TRO and eventually, the WPI in CA-G.R.
SP No. 139453 enjoining the implementation of the preventive suspension order against Binay, Jr. based on
the condonation doctrine; and
V. Whether or not the CA's directive for the Ombudsman to ' comment on Binay, Jr.'s petition for contempt in
CA- G.R. SP No. 139504 is improper and illegal.

The Ruling of the Court

The petition is partly meritorious. chan robles law

I.

A common requirement to both a petition for certiorari and a petition for prohibition taken under Rule 65 of the 1997 Rules of
Civil Procedure is that the petitioner has no other plain, speedy, and adequate remedy in the ordinary course of law. Sections
1 and 2 thereof provide:

Section 1. Petition for certiorari. - When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and
there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved
thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be
rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law
and justice may require.

xxxx

Section 2. Petition for prohibition. - When the proceedings of any tribunal, corporation, board, officer or person, whether
exercising judicial, quasi-judicial or ministerial functions, are without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any other plain, speedy, and
adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper
court, alleging the facts r with certainty and praying that judgment be rendered commanding the respondent to desist from
further proceedings in the action or matter specified therein, or otherwise granting such incidental reliefs as law and justice
may require.

x x x x (Emphases supplied)

Hence, as a general rule, a motion for reconsideration must first be filed with the lower court prior to resorting to the
extraordinary remedy of certiorari or prohibition since a motion for reconsideration may still be considered as a plain,
speedy, and adequate remedy in the ordinary course of law. The rationale for the pre-requisite is to grant an opportunity for
the lower court or agency to correct any actual or perceived error attributed to it by the re-examination of the legal and
factual circumstances of the case.110

Jurisprudence states that "[i]t is [the] inadequacy, [and] not the mere absence of all other legal remedies and the danger of
failure of justice without the writ, that must usually determine the propriety of certiorari [or prohibition]. A remedy is plain,
99
speedy[,] and adequate if it will promptly relieve the petitioner from the injurious effects of the judgment, order, or
resolution of the lower court or agency, x x x."111

In this light, certain exceptions were crafted to the general rule requiring a prior motion for reconsideration before the filing
of a petition for certiorari, which exceptions also apply to a petition for prohibition.112 These are: (a) where the order is a
patent nullity, as where the court a quo has no jurisdiction; (b) where the questions raised in the certiorari proceedings have
been duly raised and passed upon by the lower court, or are the same as those raised and passed upon in the lower court;
(c) where there is an urgent necessity for the resolution of the question and any further delay would prejudice the interests
of the Government or of the petitioner or the subject matter of the action is perishable; (d) where, under the circumstances,
a motion for reconsideration would be useless; (e) where petitioner was deprived of due process and there is extreme
urgency for relief; (f) where, in a criminal case, relief from an order of arrest is urgent and the granting of such relief by the
trial court is improbable; (g) where the proceedings in the lower court are a nullity for lack of due process; (h) where the
proceedings were ex parte or in which the petitioner had no opportunity to object; and (i) where the issue raised is one
purely of law or where public interest is involved.113

In this case, it is ineluctably clear that the above-highlighted exceptions attend since, for the first time, the question on the
authority of the CA - and of this Court, for that matter - to enjoin the implementation of a preventive suspension order
issued by the Office of the Ombudsman is put to the fore. This case tests the constitutional and statutory limits of the
fundamental powers of key government institutions - namely, the Office of the Ombudsman, the Legislature, and the
Judiciary - and hence, involves an issue of transcendental public importance that demands no less than a careful but
expeditious resolution. Also raised is the equally important issue on the propriety of the continuous application of the
condonation doctrine as invoked by a public officer who desires exculpation from administrative liability. As such, the
Ombudsman's direct resort to certiorari and prohibition before this Court, notwithstanding her failure to move for the prior
reconsideration of the assailed issuances in CA-G.R. SP No. 139453 and CA-G.R. SP No. 139504 before the CA, is justified. chan robles law

II.

Albeit raised for the first time by the Ombudsman in her Memorandum,114 it is nonetheless proper to resolve the issue on the
CA's lack of subject matter jurisdiction over the main petition for certiorari in CA-G.R. SP No. 139453, in view of the well-
established rule that a court's jurisdiction over the subject matter may be raised at any stage of the proceedings. The
rationale is that subject matter jurisdiction is conferred by law, and the lack of it affects the very authority of the court to
take cognizance of and to render judgment on the action.115 Hence, it should be preliminarily determined if the CA indeed
had subject matter jurisdiction over the main CA-G.R. SP No. 139453 petition, as the same determines the validity of all
subsequent proceedings relative thereto. It is noteworthy to point out that Binay, Jr. was given the opportunity by this Court
to be heard on this issue,116 as he, in fact, duly submitted his opposition through his comment to the Ombudsman's
Memorandum.117 That being said, the Court perceives no reasonable objection against ruling on this issue.

The Ombudsman's argument against the CA's lack of subject matter jurisdiction over the main petition, and her corollary
prayer for its dismissal, is based on her interpretation of Section 14, RA 6770, or the Ombudsman Act,118 which reads in full:

Section 14. Restrictions. - No writ of injunction shall be issued by any court to delay an investigation being conducted by the
Ombudsman under this Act, unless there is a prima facie evidence that the subject matter of the investigation is outside the
jurisdiction of the Office of the Ombudsman.

No court shall hear any appeal or application for remedy against the decision or findings of the Ombudsman, except the
Supreme Court, on pure question of law.

The subject provision may be dissected into two (2) parts.

The first paragraph of Section 14, RA 6770 is a prohibition against any court (except the Supreme Court119) from issuing
a writ of injunction to delay an investigation being conducted by the Office of the Ombudsman. Generally speaking,
"[injunction is a judicial writ, process or proceeding whereby a party is ordered to do or refrain from doing a certain act. It
may be the main action or merely a provisional remedy for and as an incident in the main action."120 Considering the textual
qualifier "to delay," which connotes a suspension of an action while the main case remains pending, the "writ of injunction"
mentioned in this paragraph could only refer to injunctions of the provisional kind, consistent with the nature of a provisional
injunctive relief.

The exception to the no injunction policy is when there is prima facie evidence that the subject matter of the investigation is
outside the office's jurisdiction. The Office of the Ombudsman has disciplinary authority over all elective and appointive
officials of the government and its subdivisions, instrumentalities, and agencies, with the exception only of impeachable
officers, Members of Congress, and the Judiciary.121 Nonetheless, the Ombudsman retains the power to investigate any
serious misconduct in office allegedly committed by officials removable by impeachment, for the purpose of filing a verified
complaint for impeachment, if warranted.122 Note that the Ombudsman has concurrent jurisdiction over certain
administrative cases which are within the jurisdiction of the regular courts or administrative agencies, but has primary
jurisdiction to investigate any act or omission of a public officer or employee who is under the jurisdiction of the
Sandiganbayan.123
100
On the other hand, the second paragraph of Section 14, RA 6770 provides that no appeal or application for remedy may
be heard against the decision or findings of the Ombudsman, with the exception of the Supreme Court on pure questions of
law. This paragraph, which the Ombudsman particularly relies on in arguing that the CA had no jurisdiction over the main
CA-G.R. SP No. 139453 petition, as it is supposedly this Court which has the sole jurisdiction to conduct a judicial review of
its decisions or findings, is vague for two (2) reasons: (1) it is unclear what the phrase "application for remedy" or the word
"findings" refers to; and (2) it does not specify what procedural remedy is solely allowable to this Court, save that the same
be taken only against a pure question of law. The task then, is to apply the relevant principles of statutory construction to
resolve the ambiguity.

"The underlying principle of all construction is that the intent of the legislature should be sought in the words employed to
express it, and that when found[,] it should be made to govern, x x x. If the words of the law seem to be of doubtful import,
it may then perhaps become necessary to look beyond them in order to ascertain what was in the legislative mind at the
time the law was enacted; what the circumstances were, under which the action was taken; what evil, if any, was meant to
be redressed; x x x [a]nd where the law has contemporaneously been put into operation, and in doing so a construction has
necessarily been put upon it, this construction, especially if followed for some considerable period, is entitled to great
respect, as being very probably a true expression of the legislative purpose, and is not lightly to be overruled, although it is
not conclusive."124

As an aid to construction, courts may avail themselves of the actual proceedings of the legislative body in interpreting a
statute of doubtful meaning. In case of doubt as to what a provision of a statute means, the meaning put to the provision
during the legislative deliberations may be adopted,125 albeit not controlling in the interpretation of the law.126

A. The Senate deliberations cited by the


Ombudsman do not pertain to the second
paragraph of Section 14, RA 6770.

The Ombudsman submits that the legislative intent behind Section 14, RA 6770, particularly on the matter of judicial review
of her office's decisions or findings, is supposedly clear from the following Senate deliberations:127

Senator [Edgardo J.] Angara, x x x. On page 15, Mr. President, line 14, after the phrase "petition for" delete the word
"review" and in lieu thereof, insert the word CERTIORARI. So that, review or appeal from the decision of the Ombudsman
would only be taken not on a petition for review, but on certiorari.

The President [Jovito R. Salonga]. What is the practical effect of that? Will it be more difficult to reverse the
decision under review?

Senator Angara. It has two practical effect ways, Mr. President. First is that the findings of facts of the Ombudsman
would be almost conclusive if supported by substantial evidence. Second, we would not unnecessarily clog the
docket of the Supreme Court. So, it in effect will be a very strict appeal procedure.

xxxx

Senator [Teofisto T.] Guingona, [Jr.]. Does this mean that, for example, if there are exhaustive remedies available to a
respondent, the respondent himself has the right to exhaust the administrative remedies available to him?

Senator Angara. Yes, Mr. President, that is correct.

Senator Guingona. And he himself may cut the proceeding short by appealing to the Supreme Court only
on certiorari ?

Senator Angara. On question of law, yes.

Senator Guingona. And no other remedy is available to him?

Senator Angara. Going to the Supreme Court, Mr. President?

Senator Guingona. Yes. What I mean to say is, at what stage, for example, if he is a presidential appointee who is the
respondent, if there is f no certiorari available, is the respondent given the right to exhaust his administrative remedies first
before the Ombudsman can take the appropriate action?

Senator Angara. Yes, Mr. President, because we do not intend to change the administrative law principle that before one
can go to court, he must exhaust all administrative remedies xxx available to him before he goes and seeks judicial review.

xxxx

101
Senator [Neptali A.] Gonzales. What is the purpose of the Committee in changing the method of appeal from one
of a petition for review to a petition for certiorari?

Senator Angara. To make it consistent, Mr. President, with the provision here in the bill to the effect that
the finding of facts of the Ombudsman is conclusive if supported by substantial evidence.

Senator Gonzales. A statement has been made by the Honorable Presiding Officer to which I concur, that in an appeal
by certiorari , the appeal is more difficult. Because in certiorari it is a matter of discretion on the part of the
court, whether to give due course to the petition or dismiss it outright. Is that not correct, Mr. President?

Senator Angara. That is absolutely correct, Mr. President

Senator Gonzales. And in a petition for certiorari , the issue is limited to whether or not the Ombudsman here
has acted without jurisdiction and has committed a grave abuse of discretion amounting to lack of jurisdiction.
Is that not the consequence, Mr. President.

Senator Angara. That is correct, Mr. President.

Senator Gonzales. And it is, therefore, in this sense that the intention of the Committee is to make it harder to have
a judicial review, but should be limited only to cases that I have enumerated.

Senator Angara. Yes, Mr. President.

Senator Gonzales. I think, Mr. President, our Supreme Court has made a distinction between a petition for review and a
petition for certiorari ; because before, under the 1935 Constitution appeal from any order, ruling or decision of the
COMELEC shall be by means of review. But under the Constitution it is now by certiorari and the Supreme Court said that by
this change, the court exercising judicial review will not inquire into the facts, into the evidence, because we will not go
deeply by way of review into the evidence on record but its authority will be limited to a determination of whether the
administrative agency acted without, or in excess of, jurisdiction, or committed a grave abuse of discretion. So, I assume
that that is the purpose of this amendment, Mr. President.

Senator Angara. The distinguished Gentleman has stated it so well.

Senator Gonzales. I just want to put that in the Record. Senator Angara. It is very well stated, Mr. President.

xxxx

The President. It is evident that there must be some final authority to render decisions. Should it be the
Ombudsman or should it be the Supreme Court?

Senator Angara. As I understand it, under our scheme of government, Mr. President, it is and has to be the Supreme
Court to make the final determination.

The President. Then if that is so, we have to modify Section 17.

Senator Angara. That is why, Mr. President, some of our Colleagues have made a reservation to introduce an appropriate
change during the period of Individual Amendments.

xxxx

The President. All right. Is there any objection to the amendment inserting the word CERTIORARI instead of "review"?
[Silence] Hearing none, the same is approved.128

Upon an assiduous scrutiny of these deliberations, the Court is, however, unconvinced that the provision debated on was
Section 14, RA 6770, as the Ombudsman invokes. Note that the exchange begins with the suggestion of Senator Angara to
delete the word "review" that comes after the phrase "petition for review" and, in its stead, insert the word "certiorari" so
that the "review or appeal from the decision of the Ombudsman would not only be taken on a petition for review, but
on certiorari" The ensuing exchange between Senators Gonzales and Angara then dwells on the purpose of changing the
method of review from one of a petition for review to a petition for certiorari - that is, to make "the appeal x x x more
difficult." Ultimately, the amendment to the change in wording, from "petition for review" to "petition for certiorari" was
approved.

Noticeably, these references to a "petition for review" and the proposed "petition for certiorari" are nowhere to be found in
the text of Section 14, RA 6770. In fact, it was earlier mentioned that this provision, particularly its second paragraph, does
not indicate what specific procedural remedy one should take in assailing a decision or finding of the Ombudsman; it only
reveals that the remedy be taken to this Court based on pure questions of law. More so, it was even commented upon during

102
the oral arguments of this case129 that there was no debate or clarification made on the current formulation of the second
paragraph of Section 14, RA 6770 per the available excerpts of the Senate deliberations. In any case, at least for the above-
cited deliberations, the Court finds no adequate support to sustain the Ombudsman's entreaty that the CA had no subject
matter jurisdiction over the main CA-G.R. SP No. 139453 petition.

On the contrary, it actually makes greater sense to posit that these deliberations refer to another Ombudsman Act provision,
namely Section 27, RA 6770. This is because the latter textually reflects the approval of Senator Angara's suggested
amendment, i.e., that the Ombudsman's decision or finding may be assailed in a petition for certiorari to this Court (fourth
paragraph), and further, his comment on the conclusive nature of the factual findings of the Ombudsman, if supported by
substantial evidence (third paragraph):

Section 27. Effectivity and Finality of Decisions.� (1) All provisionary orders of the Office of the Ombudsman are immediately
effective and executory.

A motion for reconsideration of any order, directive or decision of the Office of the Ombudsman must be filed within five (5)
days after receipt of written notice and shall be entertained only on any of the following grounds: chanRoble svirtual Lawlib ra ry

(1) New evidence has been discovered which materially affects the order, directive or decision; c ralawlaw lib rary

(2) Errors of law or irregularities have been committed prejudicial to the interest of the movant. The motion for
reconsideration shall be resolved within three (3) days from filing: Provided, That only one motion for reconsideration shall
be entertained. ChanRobles Vi rt ualawlib ra ry

Findings of fact by the Office of the Ombudsman when supported by substantial evidence are conclusive. Any order, directive
or decision imposing the penalty of public censure or reprimand, suspension of not more than one (1) month's salary shall be
final and unappealable.

In all administrative disciplinary cases, orders, directives, or decisions of the Office of the Ombudsman may be
appealed to the Supreme Court by filing a petition for certiorari within ten (10) days from receipt of the written
notice of the order, directive or decision or denial of the motion for reconsideration in accordance with Rule 45
of the Rules of Court.

The above rules may be amended or modified by the Office of the ' Ombudsman as the interest of justice may require.
(Emphasis and underscoring supplied)

At first blush, it appears that Section 27, RA 6770 is equally ambiguous in stating that a "petition for certiorari" should be
taken in accordance with Rule 45 of the Rules of Court, as it is well-known that under the present 1997 Rules of Civil
Procedure, petitions for certiorari are governed by Rule 65 of the said Rules. However, it should be discerned that the
Ombudsman Act was passed way back in 1989130and, hence, before the advent of the 1997 Rules of Civil Procedure.131 At
that time, the governing 1964 Rules of Court,132 consistent with Section 27, RA 6770, referred to the appeal taken
thereunder as a petition for certiorari , thus possibly explaining the remedy's textual denomination, at least in the provision's
final approved version:

RULE 45
Appeal from Court of Appeals to Supreme Court

SECTION 1. Filing of Petition with Supreme Court. - A party may appeal by certiorari , from a judgment of the Court of
Appeals, by filing with the Supreme Court a petition forcertiorari , within fifteen (15) days from notice of judgment or of
the denial of his motion for reconsideration filed in due time, and paying at the same time, to the clerk of said court the
corresponding docketing fee. The petition shall not be acted upon without proof of service of a copy thereof to the Court of
Appeals. (Emphasis supplied)

B. Construing the second paragraph of


Section 14, RA 6770.

The Senate deliberations' lack of discussion on the second paragraph of Section 14, RA 6770 notwithstanding, the other
principles of statutory construction can apply to ascertain the meaning of the provision.

To recount, the second paragraph of Section 14, RA 6770 states that "[n]o court shall hear any appeal or application
for remedy against the decision or findings of the Ombudsman, except the Supreme Court, on pure question of
law."��� ; cralawlawlib rary

As a general rule, the second paragraph of Section 14, RA 6770 bans the whole range of remedies against issuances
of the Ombudsman, by prohibiting: (a) an appeal against any decision or finding of the Ombudsman, and (b) "any
application of remedy" (subject to the exception below) against the same. To clarify, the phrase "application for remedy,"
being a generally worded provision, and being separated from the term "appeal" by the disjunctive "or",133 refers to any
remedy (whether taken mainly or provisionally), except an appeal, following the maxim generalia verba sunt generaliter
103
intelligenda: general words are to be understood in a general sense.134 By the same principle, the word "findings," which is
also separated from the word "decision" by the disjunctive "or", would therefore refer to any finding made by the
Ombudsman (whether final or provisional), except a decision.

The subject provision, however, crafts an exception to the foregoing general rule. While the specific procedural vehicle is
not explicit from its text, it is fairly deducible that the second paragraph of Section 14, RA 6770 excepts, as the only
allowable remedy against "the decision or findings of the Ombudsman," a Rule 45 appeal, for the reason that it is the
only remedy taken to the Supreme Court on "pure questions of law," whether under the 1964 Rules of Court or the
1997 Rules of Civil Procedure:

Rule 45, 1964 Rules of Court

RULE 45
Appeal from Court of Appeals to Supreme Court

xxxx

Section 2. Contents of Petition. � The petition shall contain a concise statement of the matters involved, the assignment of
errors made in the court below, and the reasons relied on for the allowance of the petition, and it should be accompanied
with a true copy of the judgment sought to be reviewed, together with twelve (12) copies of the record on appeal, if any, and
of the petitioner's brief as filed in the Court of Appeals. A verified statement of the date when notice of judgment and denial
of the motion for reconsideration, if any, were received shall accompany the petition.

Only questions of law may be raised in the petition and must be distinctly set forth. If no record on appeal has been
filed in the Court of Appeals, the clerk of the Supreme Court, upon admission of the petition, shall demand from the Court of
Appeals the elevation of the whole record of the case. (Emphasis and underscoring supplied)

Rule 45, 1997 Rules of Civil Procedure

RULE 45
Appeal by Certiorari to the Supreme Court

Section 1. Filing of petition with Supreme Court. - A party desiring to appeal by certiorarifrom a judgment, final order or
resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts,
whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition may
include an application for a writ of preliminary injunction or other provisional remedies and shall raise only questions of
law, which must be distinctly set forth. The petitioner may seek the same provisional remedies by verified motion filed in
the same action or proceeding at any time during its pendency. (Emphasis and underscoring supplied)

That the remedy excepted in the second paragraph of Section 14, RA 6770 could be a petition for certiorari under Rule 65 of
the 1964 Rules of Court or the 1997 Rules of Procedure is a suggestion that defies traditional norms of procedure. It is basic
procedural law that a Rule 65 petition is based on errors of jurisdiction, and not errors of judgment to which the
classifications of (a) questions of fact, (b) questions of law, or (c) questions of mixed fact and law, relate to. In fact, there is
no procedural rule, whether in the old or new Rules, which grounds a Rule 65 petition on pure questions of law. Indeed, it is
also a statutory construction principle that the lawmaking body cannot be said to have intended the establishment of
conflicting and hostile systems on the same subject. Such a result would render legislation a useless and idle ceremony, and
subject the laws to uncertainty and unintelligibility.135 There should then be no confusion that the second paragraph of
Section 14, RA 6770 refers to a Rule 45 appeal to this Court, and no other. In sum, the appropriate construction of this
Ombudsman Act provision is that all remedies against issuances of the Office of the Ombudsman are prohibited, except the
above-stated Rule 45 remedy to the Court on pure questions of law.

C. Validity of the second paragraph of


Section 14, RA 6770.

Of course, the second paragraph of Section 14, RA 6770's extremely limited restriction on remedies is inappropriate since a
Rule 45 appeal -which is within the sphere of the rules of procedure promulgated by this Court - can only be taken against
final decisions or orders of lower courts,136 and not against "findings" of quasi-judicial agencies. As will be later elaborated
upon, Congress cannot interfere with matters of procedure; hence, it cannot alter the scope of a Rule 45 appeal so as to
apply to interlocutory "findings" issued by the Ombudsman. More significantly, by confining the remedy to a Rule 45
appeal, the provision takes away the remedy of certiorari, grounded on errors of jurisdiction, in denigration of the judicial
power constitutionally vested in courts. In this light, the second paragraph of Section 14, RA 6770 also increased this Court's
appellate jurisdiction, without a showing, however, that it gave its consent to the same. The provision is, in fact, very similar
to the fourth paragraph of Section 27, RA 6770 (as above-cited), which was invalidated in the case of Fabian v.
Desiertoni137 (Fabian).138

104
In Fabian, the Court struck down the fourth paragraph of Section 27, RA 6770 as unconstitutional since it had the effect of
increasing the appellate jurisdiction of the Court without its advice and concurrence in violation of Section 30, Article VI of
the 1987 Constitution.139 Moreover, this provision was found to be inconsistent with Section 1, Rule 45 of the present 1997
Rules of Procedure which, as above-intimated, applies only to a review of "judgments or final orders of the Court of Appeals,
the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court, or other courts authorized by law;" and not of quasi-
judicial agencies, such as the Office of the Ombudsman, the remedy now being a Rule 43 appeal to the Court of
Appeals. In Ruivivar v. Office of the Ombudsman,140 the Court's ratiocinations and ruling in Fabian were recounted:

The case of Fabian v. Desierto arose from the doubt created in the application of Section 27 of R.A. No. 6770 (The
Ombudsman's Act) and Section 7, Rule III of A.O. No. 7 (Rules of Procedure of the Office of the Ombudsman) on the
availability of appeal before the Supreme Court to assail a decision or order of the Ombudsman in administrative
cases. In Fabian, we invalidated Section 27 of R.A. No. 6770 (and Section 7, Rule III of A.O. No. 7 and the other
rules implementing the Act) insofar as it provided for appeal by certiorari under Rule 45 from the decisions or
orders of the Ombudsman in administrative cases. We held that Section 27 of R.A. No. 6770 had the effect, not
only of increasing the appellate jurisdiction of this Court without its advice and concurrence in violation of
Section 30, Article VI of the Constitution; it was also inconsistent with Section 1, Rule 45 of the Rules of Court
which provides that a petition for review on certiorari shall apply only to a review of "judgments or final orders
of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court, or other courts
authorized by law." We pointedly said: c hanRoble svirtual Lawlib rary

As a consequence of our ratiocination that Section 27 of Republic Act No. 6770 should be struck down as unconstitutional,
and in line with the regulatory philosophy adopted in appeals from quasi-judicial agencies in the 1997 Revised Rules of Civil
Procedure, appeals from decisions of the Office of the Ombudsman in administrative disciplinary cases should be taken to the
CA under the provisions of Rule 43.141 (Emphasis supplied)

Since the second paragraph of Section 14, RA 6770 limits the remedy against "decision or findings" of the Ombudsman to a
Rule 45 appeal and thus - similar to the fourth paragraph of Section 27, RA 6770142 - attempts to effectively increase the
Supreme Court's appellate jurisdiction without its advice and concurrence,143 it is therefore concluded that the former
provision is also unconstitutional and perforce, invalid. Contrary to the Ombudsman's posturing,144Fabian should squarely
apply since the above-stated Ombudsman Act provisions are in part materia in that they "cover the same specific or
particular subject matter,"145 that is, the manner of judicial review over issuances of the Ombudsman.

Note that since the second paragraph of Section 14, RA 6770 is clearly determinative of the existence of the CA's subject
matter jurisdiction over the main CA-G.R. SP No. 139453 petition, including all subsequent proceedings relative thereto, as
the Ombudsman herself has developed, the Court deems it proper to resolve this issue ex mero motu (on its own motion146).
This procedure, as was similarly adopted in Fabian, finds its bearings in settled case law:

The conventional rule, however, is that a challenge on constitutional grounds must be raised by a party to the case, neither
of whom did so in this case, but that is not an inflexible rule, as we shall explain.

Since the constitution is intended for the observance of the judiciary and other departments of the government and the
judges are sworn to support its provisions, the courts are not at liberty to overlook or disregard its commands or
countenance evasions thereof. When it is clear , that a statute transgresses the authority vested in a legislative body, it is
the duty of the courts to declare that the constitution, and not the statute, governs in a case before them for judgment.

Thus, while courts will not ordinarily pass upon constitutional questions which are not raised in the pleadings, the rule has
been recognized to admit of certain exceptions. It does not preclude a court from inquiring into its own jurisdiction or compel
it to enter a judgment that it lacks jurisdiction to enter. If a statute on which a court's jurisdiction in a proceeding depends is
unconstitutional, the court has no jurisdiction in the proceeding, and since it may determine whether or not it has
jurisdiction, it necessarily follows that it may inquire into the constitutionality of the statute.

Constitutional questions, not raised in the regular and orderly procedure in the trial are ordinarily rejected
unless the jurisdiction of the court below or that of the appellate court is involved in which case it may be raised
at any time or on the court's own motion. The Court ex mero motu may take cognizance of lack of jurisdiction at any
point in the case where that fact is developed. The court has a clearly recognized right to determine its own jurisdiction in
any proceeding.147 (Emphasis supplied)

D. Consequence of invalidity.

In this case, the Rule 65 petition for certiorari in CA-G.R. SP No. 139453 was filed by Binay, Jr. before the CA in order to
nullify the preventive suspension order issued by the Ombudsman, an interlocutory order,148 hence, unappealable.149

In several cases decided after Fabian, the Court has ruled that Rule 65 petitions for certiorari against unappelable
issuances150 of the Ombudsman should be filed before the CA, and not directly before this Court:

In Office of the Ombudsman v. Capulong151 (March 12, 2014), wherein a preventive suspension order issued by the Office of

105
the Ombudsman was - similar to this case - assailed through a Rule 65 petition for certiorari filed by the public officer before
the CA, the Court held that "[t]here being a finding of grave abuse of discretion on the part of the Ombudsman, it was
certainly imperative for the CA to grant incidental reliefs, as sanctioned by Section 1 of Rule 65."152

In Dagan v. Office of the Ombudsman153 (November 19, 2013), involving a Rule 65 petition for certiorariassailing a final and
unappealable order of the Office of the Ombudsman in an administrative case, the Court remarked that "petitioner employed
the correct mode of review in this case, i.e., a special civil action for certiorari before the Court of Appeals."154 In this
relation, it stated that while "a special civil action for Certiorari is within the concurrent original jurisdiction of the Supreme
Court and the Court of Appeals, such petition should be initially filed with the Court of Appeals in observance of the doctrine
of hierarchy of courts." Further, the Court upheld Barata v. Abalos, Jr.155 (June 6, 2001), wherein it was ruled that the
remedy against final and unappealable orders of the Office of the Ombudsman in an administrative case was a Rule 65
petition to the CA. The same verdict was reached in Ruivivar156(September 16, 2008).

Thus, with the unconstitutionality of the second paragraph of Section 14, RA 6770, the Court, consistent with existing
jurisprudence, concludes that the CA has subject matter jurisdiction over the main CA-G.R. SP No. 139453 petition. That
being said, the Court now examines the objections of the Ombudsman, this time against the CA's authority to issue the
assailed TRO and WPI against the implementation of the preventive suspension order, incidental to that main case.

III.

From the inception of these proceedings, the Ombudsman has been adamant that the CA has no jurisdiction to issue any
provisional injunctive writ against her office to enjoin its preventive suspension orders. As basis, she invokes the first
paragraph of Section 14, RA 6770 in conjunction with her office's independence under the 1987 Constitution. She
advances the idea that "[i]n order to further ensure [her office's] independence, [RA 6770] likewise insulated it from judicial
intervention,"157particularly, "from injunctive reliefs traditionally obtainable from the courts,"158 claiming that said writs may
work "just as effectively as direct harassment or political pressure would."159

A. The concept of Ombudsman independence.

Section 5, Article XI of the 1987 Constitution guarantees the independence of the Office of the Ombudsman:

Section 5. There is hereby created the independent Office of the Ombudsman, composed of the Ombudsman to be
known as Tanodbayan, one overall Deputy and at least one Deputy each for Luzon, Visayas[,] and Mindanao. A separate
Deputy for the military establishment may likewise be appointed. (Emphasis supplied)

In Gonzales III v. Office of the President160 (Gonzales III), the Court traced the historical underpinnings of the Office of the
Ombudsman:

Prior to the 1973 Constitution, past presidents established several Ombudsman-like agencies to serve as the people's
medium for airing grievances and for direct redress against abuses and misconduct in the government. Ultimately, however,
these agencies failed to fully realize their objective for lack of the political independence necessary for the effective
performance of their function as government critic.

It was under the 1973 Constitution that the Office of the Ombudsman became a constitutionally-mandated office to give it
political independence and adequate powers to enforce its mandate. Pursuant to the ( 1973 Constitution, President Ferdinand
Marcos enacted Presidential Decree (PD) No. 1487, as amended by PD No. 1607 and PD No. 1630, creating the Office of the
Ombudsman to be known as Tanodbayan. It was tasked principally to investigate, on complaint or motu proprio, any
administrative act of any administrative agency, including any government-owned or controlled corporation. When the Office
of the Tanodbayan was reorganized in 1979, the powers previously vested in the Special Prosecutor were transferred to the
Tanodbayan himself. He was given the exclusive authority to conduct preliminary investigation of all cases cognizable by the
Sandiganbayan, file the corresponding information, and control the prosecution of these cases.

With the advent of the 1987 Constitution, a new Office of the Ombudsman was created by constitutional fiat. Unlike in the
1973 Constitution, its independence was expressly and constitutionally guaranteed. Its objectives are to enforce
the state policy in Section 27, Article II and the standard of accountability in public service under Section 1, Article XI of the
1987 Constitution. These provisions read: cha nRoblesvi rtua lLaw lib rary

Section 27. The State shall maintain honesty and integrity in the public service and take positive and effective measures
against graft and corruption.

Section 1. Public office is a public trust. Public officers and employees must, at all times, be accountable to the people, serve
them with utmost responsibility, integrity, loyalty, and efficiency; act with patriotism and justice, and lead modest
lives.161 (Emphasis supplied)

More significantly, Gonzales III explained the broad scope of the office's mandate, and in correlation, the impetus behind its
independence:

106
Under Section 12, Article XI of the 1987 Constitution, the Office of the Ombudsman is envisioned to be the "protector of the
people" against the inept, abusive, and corrupt in the Government, to function essentially as a complaints and action bureau.
This constitutional vision of a Philippine Ombudsman practically intends to make the Ombudsman an authority to directly
check and guard against the ills, abuses and excesses , of the bureaucracy. Pursuant to Section 13 (8), Article XI of the 1987
Constitution, Congress enacted RA No. 6770 to enable it to further realize the vision of the Constitution. Section 21 of RA No.
6770 provides: chanRoble svirtual Lawli bra ry

Section 21. Official Subject to Disciplinary Authority; Exceptions. - The Office of the Ombudsman shall have disciplinary
authority over all elective and appointive officials of the Government and its subdivisions, instrumentalities, and agencies,
including Members of the Cabinet, local government, government-owned or controlled corporations and their subsidiaries,
except over officials who may be removed only by impeachment or over Members of Congress, and the Judiciary. ChanRobles Virtualawl ibra ry

As the Ombudsman is expected to be an "activist watchman," the < Court has upheld its actions, although not squarely
falling under the broad powers granted [to] it by the Constitution and by RA No. 6770, if these actions are reasonably in line
with its official function and consistent with the law and the Constitution.

The Ombudsman's broad investigative and disciplinary powers include all acts of malfeasance, misfeasance, and nonfeasance
of all public officials, including Members of the Cabinet and key Executive officers, during their tenure. To support these
broad powers, the Constitution saw it fit to insulate the Office of the Ombudsman from the pressures and
influence of officialdom and partisan politics and from fear of external reprisal by making it an "independent"
office, x x x.

xxxx

Given the scope of its disciplinary authority, the Office of the Ombudsman is a very powerful government constitutional
agency that is considered "a notch above other grievance-handling investigative bodies." It has powers, both constitutional
and statutory, that are commensurate , with its daunting task of enforcing accountability of public officers.162 (Emphasis and
underscoring supplied)

Gonzales III is the first case which grappled with the meaning of the Ombudsman's independence vis-a-vis the independence
of the other constitutional bodies. Pertinently, the Court observed:

(1) "[T]he independence enjoyed by the Office of the Ombudsman and by the Constitutional Commissions shares certain
characteristics - they do not owe their existence to any act of Congress, but are created by the Constitution itself;
additionally, they all enjoy fiscal autonomy. In general terms, the framers of the Constitution intended that these
'independent' bodies be insulated from political pressure to the extent that the absence of 'independence' would result
in the impairment of their core functions"163; cralawlawl ibra ry

(2) "[T]he Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence and flexibility
needed in the discharge of their constitutional duties. The imposition of restrictions and constraints on the manner the
independent constitutional offices allocate and utilize the funds appropriated for their operations is anathema to
fiscal autonomy and violative not only [of] the express mandate of the Constitution, but especially as regards the Supreme
Court, of the independence and separation of powers upon which the entire fabric of our constitutional system is
based";164 and

(3) "[T]he constitutional deliberations explain the Constitutional Commissions' need for independence. In the deliberations of
the 1973 Constitution, the delegates amended the 1935 Constitution by providing for a constitutionally-created Civil Service
Commission, instead of one created by law, on the premise that the effectivity of this body is dependent on its
freedom from the tentacles of politics. In a similar manner, the deliberations of the 1987 Constitution on the
Commission on Audit highlighted the developments in the past Constitutions geared towards insulating the Commission
on Audit from political pressure."165

At bottom, the decisive ruling in Gonzales III, however, was that the independence of the Office of the Ombudsman, as well
as that of the foregoing independent bodies, meant freedom from control or supervision of the Executive
Department:

[T]he independent constitutional commissions have been consistently intended by the framers to be independent from
executive control or supervision or any form of political influence. At least insofar as these bodies are concerned,
jurisprudence is not scarce on how the "independence" granted to these bodies prevents presidential interference.

In Brillantes, Jr. v. Yorac (G.R. No. 93867, December 18, 1990, 192 SCRA 358), we emphasized that the Constitutional
Commissions, which have been characterized under the Constitution as "independent," are not under the control of the
President, even if they discharge functions that are executive in nature. The Court declared as unconstitutional the
President's act of temporarily appointing the respondent in that case as Acting Chairman of the [Commission on Elections]
"however well-meaning" it might have been.

In Bautista v. Senator Salonga (254 Phil. 156, 179 [1989]), the Court categorically stated that the tenure of the

107
commissioners of the independent Commission on Human Rights could not be placed under the discretionary power of
the President.

xxxx

The kind of independence enjoyed by the Office of the Ombudsman certainly cannot be inferior - but is similar in degree and
kind - to the independence similarly guaranteed by the Constitution to the Constitutional Commissions since all these offices
fill the political interstices of a republican democracy that are crucial to its existence and proper functioning.166 (Emphases
and underscoring supplied)

Thus, in Gonzales III, the Court declared Section 8 (2), RA 6770, which provides that "[a] Deputy or the Special Prosecutor,
may be removed from office by the President for any of the grounds provided for the removal of the Ombudsman, and after
due process," partially unconstitutional insofar as it subjected the Deputy Ombudsman to the disciplinary authority of the
President for violating the principle of independence. Meanwhile, the validity of Section 8 (2), RA 6770 was maintained
insofar as the Office of the Special Prosecutor was concerned since said office was not considered to be constitutionally within
the Office of the Ombudsman and is, hence, not entitled to the independence the latter enjoys under the Constitution.167

As may be deduced from the various discourses in Gonzales III, the concept of Ombudsman's independence covers three (3)
things:

First: creation by the Constitution, which means that the office cannot be abolished, nor its constitutionally specified
functions and privileges, be removed, altered, or modified by law, unless the Constitution itself allows, or an amendment
thereto is made;cra lawlawlib rary

Second: fiscal autonomy, which means that the office "may not be obstructed from [its] freedom to use or dispose of [its]
funds for purposes germane to [its] functions;168hence, its budget cannot be strategically decreased by officials of the
political branches of government so as to impair said functions; and

Third: insulation from executive supervision and control, which means that those within the ranks of the office can
only be disciplined by an internal authority.

Evidently, all three aspects of independence intend to protect the Office of the Ombudsman from political harassment and
pressure, so as to free it from the "insidious tentacles of politics."169

That being the case, the concept of Ombudsman independence cannot be invoked as basis to insulate the Ombudsman from
judicial power constitutionally vested unto the courts. Courts are apolitical bodies, which are ordained to act as impartial
tribunals and apply even justice to all. Hence, the Ombudsman's notion that it can be exempt from an incident of judicial
power - that is, a provisional writ of injunction against a preventive suspension order - clearly strays from the concept's
rationale of insulating the office from political harassment or pressure.

B. The first paragraph of Section 14, RA


6770 in light of the powers of Congress and the
Court under the 1987 Constitution.

The Ombudsman's erroneous abstraction of her office's independence notwithstanding, it remains that the first paragraph of
Section 14, RA 6770 textually prohibits courts from extending provisional injunctive relief to delay any investigation
conducted by her office. Despite the usage of the general phrase "[n]o writ of injunction shall be issued by any court," the
Ombudsman herself concedes that the prohibition does not cover the Supreme Court.170 As support, she cites the following
Senate deliberations:

Senator [Ernesto M.] Maceda. Mr. President, I do not know if an amendment is necessary. I would just like to inquire
for the record whether below the Supreme Court, it is understood that there is no injunction policy against the
Ombudsman by lower courts. Or, is it necessary to have a special paragraph for that?

Senator Angara. Well, there is no provision here, Mr. President, that will prevent an injunction against the Ombudsman
being issued.

Senator Maceda. In which case, I think that the intention, this being one of the highest constitutional bodies, is
to subject this only to certiorari to the Supreme Court. I think an injunction from the Supreme Court is, of
course, in order but no lower courts should be allowed to interfere. We had a very bad experience with even, let us
say, the Forestry Code where no injunction is supposed to be issued against the Department of Natural
Resources. Injunctions are issued right and left by RTC judges all over the country.

The President. Why do we not make an express provision to that effect?

Senator Angara. We would welcome that, Mr. President.


108
The President. No [writs of injunction] from the trial courts other than the Supreme Court.

Senator Maceda. I so move, Mr. President, for that amendment.

The President. Is there any objection? [Silence] Hearing none, the same is approved.171

Further, she acknowledges that by virtue of Sections 1 and 5 (1), Article VIII of the 1987 Constitution, acts of the
Ombudsman, including interlocutory orders, are subject to the Supreme Court's power of judicial review As a corollary, the
Supreme Court may issue ancillary mjunctive writs or provisional remedies in the exercise of its power of judicial review over
matters pertaining to ongoing investigations by the Office of the Ombudsman. Respecting the CA, however, the Ombudsman
begs to differ.172

With these submissions, it is therefore apt to examine the validity of the first paragraph of Section 14, RA 6770 insofar as it
prohibits all courts, except this Court, from issuing provisional writs of injunction to enjoin an Ombudsman investigation.
That the constitutionality of this provision is the lis mota of this case has not been seriously disputed. In fact, the issue anent
its constitutionality was properly raised and presented during the course of these proceedings.173 More importantly, its
resolution is clearly necessary to the complete disposition of this case.174

In the enduring words of Justice Laurel in Angara v. The Electoral Commission (Angara),175 the "Constitution has blocked out
with deft strokes and in bold lines, allotment of power to the executive, the legislative[,] and the judicial departments of the
government."176 The constitutional demarcation of the three fundamental powers of government is more commonly known as
the principle of separation of powers. In the landmark case of Belgica v. Ochoa, Jr. (Belgica),177 the Court held that "there is
a violation of the separation of powers principle when one branch of government unduly encroaches on the domain of
another."178 In particular, "there is a violation of the principle when there is impermissible (a) interference with and/or (b)
assumption of another department's functions."179

Under Section 1, Article VIII of the 1987 Constitution, judicial power is allocated to the Supreme Court and all such
lower courts:

Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack
or excess of jurisdiction on the part of any branch or instrumentality of the Government.

This Court is the only court established by the Constitution, while all other lower courts may be established by laws
passed by Congress.� Thus, through the passage of Batas Pambansa Bilang (BP) 129,180 known as "The Judiciary
Reorganization Act of 1980," the Court of Appeals,181 the Regional Trial Courts,182 and the Metropolitan Trial Courts, Municipal
Trial Courts, and Municipal Circuit Trial Courts183 were established. Later, through the passage of RA 1125,184 and Presidential
Decree No. (PD) 1486,185 the Court of Tax Appeals, and the Sandiganbayan were respectively established.

In addition to the authority to establish lower courts, Section 2, Article VIII of the 1987 Constitution empowers
Congress to define, prescribe, and apportion the jurisdiction of all courts, exceptthat it may not deprive the
Supreme Court of its jurisdiction over cases enumerated in Section 5186 of the same Article:

Section 2. The Congress shall have the power to define, prescribe, ' and apportion the jurisdiction of the various courts but
may not deprive the Supreme Court of its jurisdiction over cases enumerated in Section 5 hereof.

xxxx ChanRoblesVi rt ualawlib ra ry

Jurisdiction, as hereinabove used, more accurately pertains to jurisdiction over the subject matter of an action. In The
Diocese ofBacolod v. Commission on Elections,187 subject matter jurisdiction was defined as "the authority 'to hear and
determine cases of the general class to which the proceedings in question belong and is conferred by the
sovereign authority which organizes the court and defines its powers.'"

Among others, Congress defined, prescribed, and apportioned the subject matter jurisdiction of this Court (subject to the
aforementioned constitutional limitations), the Court of Appeals, and the trial courts, through the passage of BP 129, as
amended.

In this case, the basis for the CA's subject matter jurisdiction over Binay, Jr.'s main petition for certiorari in CA-G.R. SP
No. 139453 is Section 9(1), Chapter I of BP 129, as amended:

Section 9. Jurisdiction. - The Court of Appeals shall exercise:

109
1. 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[.]

Note that the CA's certiorari jurisdiction, as above-stated, is not only original but also concurrent with the Regional Trial
Courts (under Section 21 (1), Chapter II of BP 129), and the Supreme Court (under Section 5, Article VIII of the 1987
Philippine Constitution). In view of the concurrence of these courts' jurisdiction over petitions for certiorari, the doctrine of
hierarchy of courts should be followed. In People v. Cuaresma,188 the doctrine was explained as follows:

[T]his concurrence of jurisdiction is not x x x to be taken as according to parties seeking any of the writs an absolute,
unrestrained freedom of choice of the court to which application therefor will be directed. There is after all a hierarchy of
courts. That hierarchy is determinative of the venue of appeals, and should also serve as a general determinant of the
appropriate forum for petitions for the extraordinary writs. A becoming regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary writs against first level ("inferior") courts should be filed with the
Regional Trial Court, and those against the latter, with the Court of Appeals.189

When a court has subject matter jurisdiction over a particular case, as conferred unto it by law, said court may
then exercise its jurisdiction acquired over that case, which is called judicial power.

Judicial power, as vested in the Supreme Court and all other courts established by law, has been defined as the "totality
of powers a court exercises when it assumes jurisdiction and hears and decides a case."190 Under Section 1, Article
VIII of the 1987 Constitution, it includes "the duty of the courts of justice to settle actual controversies involving rights
which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government."

In Oposa v. Factoran, Jr.191 the Court explained the expanded scope of judicial power under the 1987 Constitution:

The first part of the authority represents the traditional concept of judicial power, involving the settlement of conflicting
rights as conferred by law. The second part of the authority represents a broadening of f judicial power to enable the courts
of justice to review what was before forbidden territory, to wit, the discretion of the political departments of the government.

As worded, the new provision vests in the judiciary, and particularly the Supreme Court, the power to rule upon even the
wisdom of the decisions of the executive and the legislature and to declare their acts invalid for lack or excess of jurisdiction
because they are tainted with grave abuse of discretion. The catch, of course, is the meaning of "grave abuse of discretion,"
which is a very elastic phrase that can expand or contract according to the disposition of the judiciary.192

Judicial power is never exercised in a vacuum. A court's exercise of the jurisdiction it has acquired over a particular
case conforms to the limits and parameters of the rules of procedure duly promulgated by this Court. In other
words, procedure is the framework within which judicial power is exercised. In Manila Railroad Co. v. Attorney-General,193 the
Court elucidated that "[t]he power or authority of the court over the subject matter existed and was fixed before procedure
in a given cause began. Procedure does not alter or change that power or authority; it simply directs the manner
in which it shall be fully and justly exercised.� To be sure, in certain cases, if that power is not exercised in conformity
with the provisions of the procedural law, purely, the court attempting to exercise it loses the power to exercise it legally.
This does not mean that it loses jurisdiction of the subject matter."194

While the power to define, prescribe, and apportion the jurisdiction of the various courts is, by constitutional design, vested
unto Congress, the power to promulgate rules concerning the protection and enforcement of constitutional rights,
pleading, practice, and procedure in all courts belongs exclusively to this Court. Section 5 (5), Article VIII of the
1987 Constitution reads:

Section 5. The Supreme Court shall have the following powers:

xxxx

(5) Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice, and
procedure in all courts, the admission to the practice of law, the Integrated Bar, and legal assistance to the
underprivileged. Such rules shall provide a simplified and inexpensive procedure for the speedy disposition of cases, shall be
uniform for all courts of the same grade, and shall not diminish, increase, or modify substantive rights. Rules of procedure of
special courts and quasi-judicial bodies shall remain effective unless disapproved by the Supreme Court. (Emphases and
underscoring supplied)

In Echegaray v. Secretary of Justice195 (Echegaray), the Court traced the evolution of its rule-making authority, which, under
the 1935196 and 1973 Constitutions,197 had been priorly subjected to a power-sharing scheme with Congress.198 As it now

110
stands, the 1987 Constitution textually altered the old provisions by deleting the concurrent power of Congress to
amend the rules, thus solidifying in one body the Court's rule-making powers, in line with the Framers' vision of
institutionalizing a "[s]tronger and more independent judiciary."199

The records of the deliberations of the Constitutional Commission would show200 that the Framers debated on whether or not
the Court's rule-making powers should be shared with Congress. There was an initial suggestion to insert the sentence "The
National Assembly may repeal, alter, or supplement the said rules with the advice and concurrence of the Supreme Court",
right after the phrase "Promulgate rules concerning the protection and enforcement of constitutional rights, pleading,
practice, and procedure in all courts, the admission to the practice of law, the integrated bar, and legal assistance to the
underprivileged^" in the enumeration of powers of the Supreme Court. Later, Commissioner Felicitas S. Aquino proposed to
delete the former sentence and, instead, after the word "[underprivileged," place a comma (,) to be followed by "the phrase
with the concurrence of the National Assembly." Eventually, a compromise formulation was reached wherein (a) the
Committee members agreed to Commissioner Aquino's proposal to delete the phrase "the National Assembly may repeal,
alter, or supplement the said rules with the advice and concurrence of the Supreme Court" and (b) in turn, Commissioner
Aquino agreed to withdraw his proposal to add "the phrase with the concurrence of the National Assembly." The changes
were approved, thereby leading to the present lack of textual reference to any form of Congressional
participation in Section 5 (5), Article VIII, supra. The prevailing consideration was that "both bodies, the
Supreme Court and the Legislature, have their inherent powers."201

Thus, as it now stands, Congress has no authority to repeal, alter, or supplement rules concerning pleading, practice, and
procedure. As pronounced in Echegaray:

The rule making power of this Court was expanded. This Court for the first time was given the power to promulgate rules
concerning the protection and enforcement of constitutional rights. The Court was also r granted for the first time the power
to disapprove rules of procedure of special courts and quasi-judicial bodies. But most importantly, the 1987 Constitution
took away the power of Congress to repeal, alter, or supplement rules concerning pleading, practice and
procedure. In fine, the power to promulgate rules of pleading, practice and procedure is no longer shared by
this Court with Congress, more so with the Executive.202 (Emphasis and underscoring supplied)

Under its rule-making authority, the Court has periodically passed various rules of procedure, among others, the current
1997 Rules of Civil Procedure. Identifying the appropriate procedural remedies needed for the reasonable exercise
of every court's judicial power, the provisional remedies of temporary restraining orders and writs of
preliminary injunction were thus provided.

A temporary restraining order and a writ of preliminary injunction both constitute temporary measures availed of during the
pendency of the action. They are, by nature, ancillary because they are mere incidents in and are dependent upon the result
of the main action. It is well-settled that the sole objectof a temporary restraining order or a writ of preliminary
injunction, whether prohibitory or mandatory, is to preserve the status quo203 until the merits of the case can be
heard. They are usually granted when it is made to appear that there is a substantial controversy between the parties and
one of them is committing an act or threatening the immediate commission of an act that will cause irreparable injury or
destroy the status quo of the controversy before a full hearing can be had on the merits of the case. In other words, they are
preservative remedies for the protection of substantive rights or interests, and, hence, not a cause of action in itself, but
merely adjunct to a main suit.204 In a sense, they are regulatory processes meant to prevent a case from being mooted by
the interim acts of the parties.

Rule 58 of the 1997 Rules of Civil Procedure generally governs the provisional remedies of a TRO and a WPI. A preliminary
injunction is defined under Section 1,205 Rule 58, while Section 3206 of the same Rule enumerates the grounds for its
issuance. Meanwhile, under Section 5207 thereof, a TRO may be issued as a precursor to the issuance of a writ of preliminary
injunction under certain procedural parameters.

The power of a court to issue these provisional injunctive reliefs coincides with its inherent power to issue all auxiliary
writs, processes, and other means necessary to carry its acquired jurisdiction into effect under Section 6, Rule
135 of the Rules of Court which reads:

Section 6. Means to carry jurisdiction into effect. - When by law jurisdiction is conferred on a court or judicial officer, all
auxiliary writs, f processes and other means necessary to carry it into effect may be employed by such court or officer; and if
the procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law208 or by these rules, any
suitable process or mode of proceeding may be adopted which appears comfortable to the spirit of the said law or rules. ChanRoble sVirt ualawli bra ry

In City of Manila v. Grecia-Cuerdo,209 which is a case involving "[t]he supervisory power or jurisdiction of the [Court of Tax
Appeals] to issue a writ of certiorari in aid of its appellate jurisdiction"210 over "decisions, orders or resolutions of the RTCs
in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction,"211 the Court
ruled that said power "should coexist with, and be a complement to, its appellate jurisdiction to review, by appeal, the final
orders and decisions of the RTC, in order to have complete supervision over the acts of the latter:"212

111
A grant of appellate jurisdiction implies that there is included in it the power necessary to exercise it effectively, to
make all orders that ; will preserve the subject of the action, and to give effect to the final determination of the
appeal. It carries with it the power to protect that jurisdiction and to make the decisions of the court thereunder effective.
The court, in aid of its appellate jurisdiction, has authority to control all auxiliary and incidental matters necessary to the
efficient and proper exercise of that jurisdiction. For this purpose, it may, when necessary, prohibit or restrain the
performance of any act which might interfere with the proper exercise of its rightful jurisdiction in cases pending before
it.213 (Emphasis supplied)

In this light, the Court expounded on the inherent powers of a court endowed with subject matter jurisdiction:

[A] court which is endowed with a particular jurisdiction should have powers which are necessary to enable it to act
effectively within such jurisdiction. These should be regarded as powers which are inherent in its jurisdiction and
the court must possess them in order to enforce its rules of practice and to suppress any abuses of its process
and to t defeat any attempted thwarting of such process.

x x x x� cralawlawlib rary

Indeed, courts possess certain inherent powers which may be said to be implied from a general grant of jurisdiction, in
addition to those expressly conferred on them. These inherent powers are such powers as are necessary for the
ordinary and efficient exercise of jurisdiction; or are essential to the existence, dignity and functions of the
courts, as well as to the due administration of justice; or are directly appropriate, convenient and suitable to the
execution of their granted powers; and include the power to maintain the court's jurisdiction and render it
effective in behalf of the litigants.214 (Emphases and underscoring supplied)

Broadly speaking, the inherent powers of the courts resonates the long-entrenched constitutional principle, articulated way
back in the 1936 case of Angara, that "where a general power is conferred or duty enjoined, every particular power
necessary for the exercise of the one or the performance of the other is also conferred."215

In the United States, the "inherent powers doctrine refers to the principle, by which the courts deal with diverse matters
over which they are thought to have intrinsic authority like procedural [rule-making] and general judicial housekeeping. To
justify the invocation or exercise of inherent powers, a court must show that the powers are reasonably necessary to
achieve the specific purpose for which the exercise is sought. Inherent powers enable the judiciary to
accomplish its constitutionally mandated functions."216

In Smothers v. Lewis217 (Smothers), a case involving the constitutionality of a statute which prohibited courts from enjoining
the enforcement of a revocation order of an alcohol beverage license pending appeal,218 the Supreme Court of Kentucky
held:

[T]he Court is x x x vested with certain "inherent" powers to do that which is reasonably necessary for the
administration of justice within the scope of their jurisdiction. x x x [W]e said while considering the rule making
power and the judicial power to be one and the same that ". . . the grant of judicial power [rule making power] to the
courts by the constitution carries with it, as a necessary incident, the right to make that power effective in the
administration of justice." (Emphases supplied)

Significantly, Smothers characterized a court's issuance of provisional injunctive relief as an exercise of the court's inherent
power, and to this end, stated that any attempt on the part of Congress to interfere with the same was constitutionally
impermissible:

It is a result of this foregoing line of thinking that we now adopt the language framework of 28 Am.Jur.2d, Injunctions,
Section 15, and once and for all make clear that a court, once having obtained jurisdiction of a cause of action, has, as an
incidental to its constitutional grant of power, inherent power to do all things reasonably necessary to the administration of
justice in the case before it. In the exercise of this power, a court, when necessary in order to protect or preserve
the subject matter of the litigation, to protect its jurisdiction and to make its judgment effective, may grant or
issue a temporary injunction in aid of or ancillary to the principal action.

The control over this inherent judicial power, in this particular instance the injunction, is exclusively within the
constitutional realm of the courts. As such, it is not within the purview of the legislature to grant or deny the
power nor is it within the purview of the legislature to shape or fashion circumstances under which this
inherently judicial power may be or may not be granted or denied.

This Court has historically recognized constitutional limitations upon the power of the legislature to interfere with or to inhibit
the performance of constitutionally granted and inherently provided judicial functions, x x x

xxxx

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We reiterate our previously adopted language, ". . . a court, once having obtained jurisdiction of a cause of action, has, as
incidental to its general jurisdiction, inherent power to do all things reasonably necessary f to the administration of justice in
the case before it. . ." This includes the inherent power to issue injunctions. (Emphases supplied)

Smothers also pointed out that the legislature's authority to provide a right to appeal in the statute does not necessarily
mean that it could control the appellate judicial proceeding:

However, the fact that the legislature statutorily provided for this appeal does not give it the right to encroach upon the
constitutionally granted powers of the judiciary. Once the administrative action has ended and the right to appeal
arises the legislature is void of any right to control a subsequent appellate judicial proceeding. The judicial rules
have come into play and have preempted the field.219 (Emphasis supplied)

With these considerations in mind, the Court rules that when Congress passed the first paragraph of Section 14, RA 6770
and, in so doing, took away from the courts their power to issue a TRO and/or WPI to enjoin an investigation conducted by
the Ombudsman, it encroached upon this Court's constitutional rule-making authority. Clearly, these issuances, which are, by
nature, provisional reliefs and auxiliary writs created under the provisions of the Rules of Court, are matters of
procedure which belong exclusively within the province of this Court. Rule 58 of the Rules of Court did not create, define,
and regulate a right but merely prescribed the means of implementing an existing right220 since it only provided for
temporary reliefs to preserve the applicant's right in esse which is threatened to be violated during the course of a pending
litigation. In the case of Fabian,211 it was stated that:

If the rule takes away a vested right, it is not procedural. If the rule creates a right such as the right to appeal, it may be
classified as a substantive matter; but if it operates as a means of implementing an existing right then the rule deals merely
with procedure. ChanRoble sVirtualawli bra ry

Notably, there have been similar attempts on the part of Congress, in the exercise of its legislative power, to amend the
Rules of Court, as in the cases of: (a) In Re: Exemption of The National Power Corporation from Payment of Filing/ Docket
Fees;222 (b) Re: Petition for Recognition of the Exemption of the Government Service Insurance System (GSIS) from
Payment of Legal Fees;223 and (c) Baguio Market Vendors Multi-Purpose Cooperative (BAMARVEMPCO) v. Cabato-
Cortes224 While these cases involved legislative enactments exempting government owned and controlled corporations and
cooperatives from paying filing fees, thus, effectively modifying Rule 141 of the Rules of Court (Rule on Legal Fees), it was,
nonetheless, ruled that the prerogative to amend, repeal or even establish new rules of procedure 225 solely belongs
to the Court, to the exclusion of the legislative and executive branches of government. On this score, the Court
described its authority to promulgate rules on pleading, practice, and procedure as exclusive and "[o]ne of the safeguards
of [its] institutional independence."226

That Congress has been vested with the authority to define, prescribe, and apportion the jurisdiction of the various courts
under Section 2, Article VIII supra, as well as to create statutory courts under Section 1, Article VIII supra, does not result in
an abnegation of the Court's own power to promulgate rules of pleading, practice, and procedure under Section 5 (5), Article
VIII supra. Albeit operatively interrelated, these powers are nonetheless institutionally separate and distinct, each to be
preserved under its own sphere of authority. When Congress creates a court and delimits its jurisdiction, the
procedure for which its jurisdiction is exercised is fixed by the Court through the rules it promulgates. The first
paragraph of Section 14, RA 6770 is not a jurisdiction-vesting provision, as the Ombudsman misconceives,227 because it
does not define, prescribe, and apportion the subject matter jurisdiction of courts to act on certiorari cases;
the certiorari jurisdiction of courts, particularly the CA, stands under the relevant sections of BP 129 which were not shown to
have been repealed. Instead, through this provision, Congress interfered with a provisional remedy that was created
by this Court under its duly promulgated rules of procedure, which utility is both integral and inherent to every
court's exercise of judicial power. Without the Court's consent to the proscription, as may be manifested by an
adoption of the same as part of the rules of procedure through an administrative circular issued therefor, there
thus, stands to be a violation of the separation of powers principle.

In addition, it should be pointed out that the breach of Congress in prohibiting provisional injunctions, such as in the first
paragraph of Section 14, RA 6770, does not only undermine the constitutional allocation of powers; it also practically
dilutes a court's ability to carry out its functions. This is so since a particular case can easily be mooted by
supervening events if no provisional injunctive relief is extended while the court is hearing the same.
Accordingly, the court's acquired jurisdiction, through which it exercises its judicial power, is rendered nugatory. Indeed, the
force of judicial power, especially under the present Constitution, cannot be enervated due to a court's inability to regulate
what occurs during a proceeding's course. As earlier intimated, when jurisdiction over the subject matter is accorded by law
and has been acquired by a court, its exercise thereof should be undipped. To give true meaning to the judicial power
contemplated by the Framers of our Constitution, the Court's duly promulgated rules of procedure should therefore remain
unabridged, this, even by statute. Truth be told, the policy against provisional injunctive writs in whatever variant should
only subsist under rules of procedure duly promulgated by the Court given its sole prerogative over the same.

The following exchange between Associate Justice Marvic Mario Victor F. Leonen (Justice Leonen) and the Acting Solicitor
General Florin T. Hilbay (Acting Solicitor General Hilbay) mirrors the foregoing observations:
113
JUSTICE LEONEN:
Okay. Now, would you know what rule covers injunction in the Rules of Court?

ACTING SOLICITOR GENERAL HILBAY:


Rule 58, Your Honor.

JUSTICE LEONEN:
58, that is under the general rubric if Justice Bersamin will correct me if I will be mistaken under the rubric of what is called
provisional remedies, our resident expert because Justice Peralta is not here so Justice Bersamin for a while. So provisional
remedy you have injunction, x x x.

xxxx

JUSTICE LEONEN:
Okay, Now, we go to the Constitution. Section 5, subparagraph 5 of Article VIII of the Constitution, if you have a copy of the
Constitution, can you please read that provision? Section 5, Article VIII the Judiciary subparagraph 5, would you kindly read
that provision?

ACTING SOLICTOR GENERAL HILBAY.


"Promulgate rules concerning the protection and enforcement of constitutional rights, pleading, practice and procedure in all
courts..."

JUSTICE LEONEN:
Okay, we can stop with that, promulgate rules concerning pleading, practice and procedure in all courts. This is the power,
the competence, the jurisdiction of what constitutional organ?

ACTING SOLICITOR GENERAL HILBAY:


The Supreme Court, Your Honor.

JUSTICE LEONEN:
The Supreme Court. This is different from Article VIII Sections 1 and 2 which we've already been discussed with you by my
other colleagues, is that not correct?

ACTING SOLICITOR GENERAL HILBAY:


Correct, Your Honor.

JUSTICE LEONEN:
Okay, so in Section 2, [apportion] jurisdiction that is the power of Congress, is that not correct?

ACTING SOLICITOR GENERAL HILBAY:


Correct, Your Honor.

JUSTICE LEONEN:
On the other hand, the power to promulgate rules is with the Court, is that not correct?

ACTING SOLICITOR GENERAL HILBAY:


Correct, Your Honor.

JUSTICE LEONEN:
A TRO and a writ of preliminary injunction, would it be a separate case or is it part of litigation in an ordinary case?

ACTING SOLICITOR GENERAL HILBAY:


It is an ancillary remedy, Your Honor.

JUSTICE LEONEN:
In fact, it originated as an equitable remedy, is that not correct?

ACTING SOLICITOR GENERAL HILBAY:


Correct, Your Honor.

JUSTICE LEONEN:
In order to preserve the power of a court so that at the end of litigation, it will not be rendered moot and
academic, is that not correct?

ACTING SOLICITOR GENERAL HILBAY:


Correct, Your Honor.

114
JUSTICE LEONEN:
In that view, isn't Section 14, first paragraph, unconstitutional?

ACTING SOLICITOR GENERAL HILBAY:


No, Your Honor.

xxxx

JUSTICE LEONEN.
Can Congress say that a Court cannot prescribe Motions to Dismiss under Rule 16?

ACTING SOLICITOR GENERAL HILBAY:


Your Honor, Congress cannot impair the power of the Court to create remedies, x x x.

JUSTICE LEONEN.
What about bill [of] particulars, can Congress say, no Court shall have the power to issue the supplemental pleading called
the bill of t particular [s]? It cannot, because that's part of procedure...

ACTING SOLICITOR GENERAL HILBAY:


That is true.

JUSTICE LEONEN
...or for that matter, no Court shall act on a Motion to Quash, is that not correct?

ACTING SOLICITOR GENERAL HILBAY:


Correct.

JUSTICE LEONEN:
So what's different with the writ of injunction?

ACTING SOLICITOR GENERAL HILBAY:


Writ of injunction, Your Honor, requires the existence of jurisdiction on the part of a court that was created by Congress. In
the absence of jurisdiction... (interrupted)

JUSTICE LEONEN:
No, writ of injunction does not attach to a court. In other words, when they create a special agrarian court it has all
procedures with it but it does not attach particularly to that particular court, is that not correct?

ACTING SOLICTOR GENERAL HILBAY:


When Congress, Your Honor, creates a special court...

JUSTICE LEONEN:
Again, Counsel, what statute provides for a TRO, created the concept of a TRO? It was a Rule. A rule of procedure and the
Rules of Court, is that not correct?

ACTING SOLICITOR GENERAL HILBAY:


Yes, Your Honor.

JUSTICE LEONEN:
And a TRO and a writ of preliminary injunction does not exist unless it is [an] ancillary to a particular injunction in a court, is
that not correct?

ACTING SOLICITOR GENERAL HILBAY:


Correct, Your Honor.

xxxx228 (Emphasis supplied)

In Biraogo v. The Philippine Truth Commission of 2010,229 the Court instructed that "[i]t is through the Constitution that the
fundamental powers of government are established, limited and defined, and by which these powers are distributed among
the several departments. The Constitution is the basic and paramount law to which all other laws must conform and to which
all persons, including the highest officials of the land, must defer." It would then follow that laws that do not conform to the
Constitution shall be stricken down for being unconstitutional.230

However, despite the ostensible breach of the separation of powers principle, the Court is not oblivious to the policy
considerations behind the first paragraph of Section 14, RA 6770, as well as other statutory provisions of similar import.
Thus, pending deliberation on whether or not to adopt the same, the Court, under its sole prerogative and authority over all

115
matters of procedure, deems it proper to declare as ineffective the prohibition against courts other than the Supreme Court
from issuing provisional injunctive writs to enjoin investigations conducted by the Office of the Ombudsman, until it is
adopted as part of the rules of procedure through an administrative circular duly issued therefor.

Hence, with Congress interfering with matters of procedure (through passing the first paragraph of Section 14, RA 6770)
without the Court's consent thereto, it remains that the CA had the authority to issue the questioned injunctive writs
enjoining the implementation of the preventive suspension order against Binay, Jr. At the risk of belaboring the point, these
issuances were merely ancillary to the exercise of the CA's certiorari jurisdiction conferred to it under Section 9 (1), Chapter I
of BP 129, as amended, and which it had already acquired over the main CA-G.R. SP No. 139453 case.

IV.

The foregoing notwithstanding, the issue of whether or not the CA gravely abused its jurisdiction in issuing the TRO and WPI
in CA-G.R. SP No. 139453 against the preventive suspension order is a persisting objection to the validity of said injunctive
writs. For its proper analysis, the Court first provides the context of the assailed injunctive writs.

A. Subject matter of the CA's iniunctive writs is the preventive suspension order.

By nature, a preventive suspension order is not a penalty but only a preventive measure. In Quimbo v. Acting
Ombudsman Gervacio,231 the Court explained the distinction, stating that its purpose is to prevent the official to be
suspended from using his position and the powers and prerogatives of his office to influence potential witnesses
or tamper with records which may be vital in the prosecution of the case against him:

Jurisprudential law establishes a clear-cut distinction between suspension as preventive measure and suspension as penalty.
The distinction, by considering the purpose aspect of the suspensions, is readily cognizable as they have different ends
sought to be achieved.

Preventive suspension is merely a preventive measure, a preliminary step in an administrative investigation.


The purpose of the suspension order is to prevent the accused from using his position and the powers and
prerogatives of his office to influence potential witnesses or tamper with records which may be vital in the
prosecution of the case against him. If after such investigation, the charge is established and the person investigated is
found guilty of acts warranting his suspension or removal, then he is suspended, removed or dismissed. This is the penalty.

That preventive suspension is not a penalty is in fact explicitly provided by Section 24 of Rule XIV of the Omnibus Rules
Implementing Book V of the Administrative Code of 1987 (Executive Order No. 292) and other Pertinent Civil Service Laws.
Section. 24. Preventive suspension is not a punishment or penalty for misconduct in office but is considered to be a
preventive measure. (Emphasis supplied) ChanRo bles Vi rtualaw lib rary

Not being a penalty, the period within which one is under preventive suspension is not considered part of the actual penalty
of suspension. So Section 25 of the same Rule XIV provides: cha nRoblesv irt ual Lawlib rary

Section 25. The period within which a public officer or employee charged is placed under preventive suspension shall not be
considered part of the actual penalty of suspension imposed upon the employee found guilty.232(Emphases supplied) Cha nRobles Vi rtua lawlib rary

The requisites for issuing a preventive suspension order are explicitly stated in Section 24, RA 6770:

Section 24. Preventive Suspension. - The Ombudsman or his Deputy may preventively suspend any officer or employee
under his authority pending an investigation, if in his judgment the evidence of guilt is strong, and (a) the charge
against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in the
performance of duty; (b) the charges would warrant removal from the service; or (c) the respondent's
continued stay in office may prejudice the case filed against him.

The preventive suspension shall continue until the case is terminated by the Office of the Ombudsman but not more than six
(6) months, without pay, except when the delay in the disposition of the case by the Office of the Ombudsman is due to the
fault, negligence or petition of the respondent, in which case the period of such delay shall not be counted in computing the
period of suspension herein provided. (Emphasis and underscoring supplied)

In other words, the law sets forth two (2) conditions that must be satisfied to justify the issuance of an order of preventive
suspension pending an investigation, namely:

(1) The evidence of guilt is strong; and

(2) Either of the following circumstances co-exist with the first requirement: chanRob lesvi rtua lLawl ibra ry

(a) The charge involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; cralawlawli bra ry

(b) The charge would warrant removal from the service; or

116
(c) The respondent's continued stay in office may prejudice the case filed against him.233 ChanRobles Vi rtualaw lib rary

B. The basis of the CA's injunctive writs is the condonation doctrine.

Examining the CA's Resolutions in CA-G.R. SP No. 139453 would, however, show that the Ombudsman's non-compliance
with the requisites provided in Section 24, RA 6770 was not the basis for the issuance of the assailed injunctive writs.

The CA's March 16, 2015 Resolution which directed the issuance of the assailed TRO was based on the case of Governor
Garcia, Jr. v. CA234 (Governor Garcia, Jr.), wherein the Court emphasized that "if it were established in the CA that the acts
subject of the administrative complaint were indeed committed during petitioner [Garcia's] prior term, then, following settled
jurisprudence, he can no longer be administratively charged."235 Thus, the Court, contemplating the application of the
condonation doctrine, among others, cautioned, in the said case, that "it would have been more prudent for [the appellate
court] to have, at the very least, on account of the extreme urgency of the matter and the seriousness of the issues raised in
the certiorari petition, issued a TRO x x x"236 during the pendency of the proceedings.

Similarly, the CA's April 6, 2015 Resolution which directed the issuance of the assailed WPI was based on the condonation
doctrine, citing the case of Aguinaldo v. Santos237 The CA held that Binay, Jr. has an ostensible right to the final relief
prayed for, i.e., the nullification of the preventive suspension order, finding that the Ombudsman can hardly impose
preventive suspension against Binay, Jr. given that his re-election in 2013 as City Mayor of Makati condoned any
administrative liability arising from anomalous activities relative to the Makati Parking Building project from 2007 to
2013.238 Moreover, the CA observed that although there were acts which were apparently committed by Binay, Jr. beyond his
first term , i.e., the alleged payments on July 3, 4, and 24, 2013,239 corresponding to the services of Hillmarc's and MANA -
still, Binay, Jr. cannot be held administratively liable therefor based on the cases of Salalima v. Guingona,
Jr.,240 and Mayor Garcia v. Mojica,241 wherein the condonation dobtrine was applied by the Court although the payments
were made after the official's election, reasoning that the payments were merely effected pursuant to contracts executed
before said re-election.242

The Ombudsman contends that it was inappropriate for the CA to have considered the condonation doctrine since it was a
matter of defense which should have been raised and passed upon by her office during the administrative disciplinary
proceedings.243 However, the Court agrees with the CA that it was not precluded from considering the same given that it was
material to the propriety of according provisional injunctive relief in conformity with the ruling in Governor Garcia, Jr., which
was the subsisting jurisprudence at that time. Thus, since condonation was duly raised by Binay, Jr. in his petition in CA-G.R.
SP No. 139453,244 the CA did not err in passing upon the same. Note that although Binay, Jr. secondarily argued that the
evidence of guilt against him was not strong in his petition in CA-G.R. SP No. 139453,245it appears that the CA found that the
application of the condonation doctrine was already sufficient to enjoin the implementation of the preventive suspension
order. Again, there is nothing aberrant with this since, as remarked in the same case of Governor Garcia, Jr., if it was
established that the acts subject of the administrative complaint were indeed committed during Binay, Jr.'s prior term, then,
following the condonation doctrine, he can no longer be administratively charged. In other words, with condonation having
been invoked by Binay, Jr. as an exculpatory affirmative defense at the onset, the CA deemed it unnecessary to determine if
the evidence of guilt against him was strong, at least for the purpose of issuing the subject injunctive writs.

With the preliminary objection resolved and the basis of the assailed writs herein laid down, the Court now proceeds to
determine if the CA gravely abused its discretion in applying the condonation doctrine.

C. The origin of the condonation doctrine.

Generally speaking, condonation has been defined as "[a] victim's express or implied forgiveness of an offense,
[especially] by treating the offender as if there had been no offense."246

The condonation doctrine - which connotes this same sense of complete extinguishment of liability as will be herein
elaborated upon - is not based on statutory law. It is a jurisprudential creation that originated from the 1959
case of Pascual v. Hon. Provincial Board ofNueva Ecija,247 (Pascual), which was therefore decided under the 1935
Constitution.

In Pascual, therein petitioner, Arturo Pascual, was elected Mayor of San Jose, Nueva Ecija, sometime in November 1951, and
was later re-elected to the same position in 1955. During his second term, or on October 6, 1956, the Acting Provincial
Governor filed administrative charges before the Provincial Board of Nueva Ecija against him for grave abuse of authority
and usurpation of judicial functions for acting on a criminal complaint in Criminal Case No. 3556 on December 18 and 20,
1954. In defense, Arturo Pascual argued that he cannot be made liable for the acts charged against him since they were
committed during his previous term of office, and therefore, invalid grounds for disciplining him during his second term. The
Provincial Board, as well as the Court of First Instance of Nueva Ecija, later decided against Arturo Pascual, and when the
case reached this Court on appeal, it recognized that the controversy posed a novel issue - that is, whether or not an elective
official may be disciplined for a wrongful act committed by him during his immediately preceding term of office.

As there was no legal precedent on the issue at that time, the Court, in Pascual, resorted to American

117
authorities and "found that cases on the matter are conflicting due in part, probably, to differences in statutes and
constitutional provisions, and also, in part, to a divergence of views with respect to the question of whether the subsequent
election or appointment condones the prior misconduct."248Without going into the variables of these conflicting views
and cases, it proceeded to state that:

The weight of authorities x x x seems to incline toward the rule denying the right to remove one from office
because of misconduct during a prior term, to which we fully subscribe.249 (Emphasis and underscoring supplied)

The conclusion is at once problematic since this Court has now uncovered that there is really no established weight of
authority in the United States (US) favoring the doctrine of condonation, which, in the words of Pascual, theorizes that an
official's re-election denies the right to remove him from office due to a misconduct during a prior term. In fact, as pointed
out during the oral arguments of this case, at least seventeen (17) states in the US have abandoned the condonation
doctrine.250 The Ombudsman aptly cites several rulings of various US State courts, as well as literature published on the
matter, to demonstrate the fact that the doctrine is not uniformly applied across all state jurisdictions. Indeed, the treatment
is nuanced:

(1) For one, it has been widely recognized that the propriety of removing a public officer from his current term or office for
misconduct which he allegedly committed in a prior term of office is governed by the language of the statute or constitutional
provision applicable to the facts of a particular case (see In Re Removal of Member of Council Coppola).251 As an example, a
Texas statute, on the one hand, expressly allows removal only for an act committed during a present term: "no officer shall
be prosecuted or removed from office for any act he may have committed prior to his election to office" (see State ex rel.
Rowlings v. Loomis).252 On the other hand, the Supreme Court of Oklahoma allows removal from office for "acts of
commission, omission, or neglect committed, done or omitted during a previous or preceding term of office" (see State v.
Bailey)253 Meanwhile, in some states where the removal statute is silent or unclear, the case's resolution was contingent upon
the interpretation of the phrase "in office." On one end, the Supreme Court of Ohio strictly construed a removal statute
containing the phrase "misfeasance of malfeasance in office" and thereby declared that, in the absence of clear legislative
language making, the word "office" must be limited to the single term during which the offense charged against the public
officer occurred (see State ex rel. Stokes v. Probate Court of Cuyahoga County)254 Similarly, the Common Pleas Court of
Allegheny County, Pennsylvania decided that the phrase "in office" in its state constitution was a time limitation with regard
to the grounds of removal, so that an officer could not be removed for misbehaviour which occurred; prior to the taking of
the office (see Commonwealth v. Rudman)255 The opposite was construed in the Supreme Court of Louisiana which took the
view that an officer's inability to hold an office resulted from the commission of certain offenses, and at once rendered him
unfit to continue in office, adding the fact that the officer had been re-elected did not condone or purge the offense
(see State ex rel. Billon v. Bourgeois).256 Also, in the Supreme Court of New York, Apellate Division, Fourth Department, the
court construed the words "in office" to refer not to a particular term of office but to an entire tenure; it stated that the whole
purpose of the legislature in enacting the statute in question could easily be lost sight of, and the intent of the law-making
body be thwarted, if an unworthy official could not be removed during one term for misconduct for a previous one (Newman
v. Strobel).257

(2) For another, condonation depended on whether or not the public officer was a successor in the same office for which he
has been administratively charged. The "own-successor theory," which is recognized in numerous States as an exception to
condonation doctrine, is premised on the idea that each term of a re-elected incumbent is not taken as separate and distinct,
but rather, regarded as one continuous term of office. Thus, infractions committed in a previous term are grounds for
removal because a re-elected incumbent has no prior term to speak of258 (see Attorney-General v. Tufts;259State v.
Welsh;260Hawkins v. Common Council of Grand Rapids;261Territory v. Sanches;262 and Tibbs v. City of Atlanta).263

(3) Furthermore, some State courts took into consideration the continuing nature of an offense in cases where the
condonation doctrine was invoked. In State ex rel. Douglas v. Megaarden,264 the public officer charged with malversation of
public funds was denied the defense of condonation by the Supreme Court of Minnesota, observing that "the large sums of
money illegally collected during the previous years are still retained by him." In State ex rel. Beck v. Harvey265 the Supreme
Court of Kansas ruled that "there is no necessity" of applying the condonation doctrine since "the misconduct continued in
the present term of office[;] [thus] there was a duty upon defendant to restore this money on demand of the county
commissioners." Moreover, in State ex rel. Londerholm v. Schroeder,266 the Supreme Court of Kansas held that "insofar as
nondelivery and excessive prices are concerned, x x x there remains a continuing duty on the part of the defendant to make
restitution to the country x x x, this duty extends into the present term, and neglect to discharge it constitutes misconduct."

Overall, the foregoing data clearly contravenes the preliminary conclusion in Pascual that there is a "weight of authority" in
the US on the condonation doctrine. In fact, without any cogent exegesis to show that Pascual had accounted for the
numerous factors relevant to the debate on condonation, an outright adoption of the doctrine in this jurisdiction would not
have been proper.

At any rate, these US cases are only of persuasive value in the process of this Court's decision-making. "[They] are not relied
upon as precedents, but as guides of interpretation."267 Therefore, the ultimate analysis is on whether or not the condonation
doctrine, as espoused in Pascual, and carried over in numerous cases after, can be held up against prevailing legal norms.
Note that the doctrine of stare decisis does not preclude this Court from revisiting existing doctrine. As adjudged in the case
of Belgica, the stare decisis rule should not operate when there are powerful countervailing considerations against its
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application.268 In other words, stare decisis becomes an intractable rule only when circumstances exist to preclude reversal of
standing precedent.269 As the Ombudsman correctly points out, jurisprudence, after all, is not a rigid, atemporal abstraction;
it is an organic creature that develops and devolves along with the society within which it thrives.270 In the words of a recent
US Supreme Court Decision, "[w]hat we can decide, we can undecide."271

In this case, the Court agrees with the Ombudsman that since the time Pascual was decided, the legal landscape has
radically shifted. Again, Pascual was a 1959 case decided under the 1935 Constitution, which dated provisions do not reflect
the experience of the Filipino People under the 1973 and 1987 Constitutions. Therefore, the plain difference in setting,
including, of course, the sheer impact of the condonation doctrine on public accountability, calls for Pascual's judicious re-
examination.

D. Testing the Condonation Doctrine.

Pascual's ratio decidendi may be dissected into three (3) parts:

First, the penalty of removal may not be extended beyond the term in which the public officer was elected for each term is
separate and distinct:

Offenses committed, or acts done, during previous term are generally held not to furnish cause for removal and
this is especially true where the constitution provides that the penalty in proceedings for removal shall not extend beyond
the removal from office, and disqualification from holding office for the term for which the officer was elected or
appointed. (67 C.J.S. p. 248, citing Rice vs. State, 161 S.W. 2d. 401; Montgomery vs. Nowell, 40 S.W. 2d. 418; People ex
rel.Bagshaw vs. Thompson, 130 P. 2d. 237; Board of Com'rs of Kingfisher County vs. Shutter, 281 P. 222; State vs.
Blake, 280 P. 388; In re Fudula, 147 A. 67; State vs. Ward, 43 S.W. 2d. 217).
The underlying theory is that each term is separate from other terms x x x.272

Second, an elective official's re-election serves as a condonation of previous misconduct, thereby cutting the right to remove
him therefor; and

[T]hat the reelection to office operates as a condonation of the officer's previous misconduct to the extent of cutting off the
right to remove him therefor. (43 Am. Jur. p. 45, citing Atty. Gen. vs. Hasty, 184 Ala. 121, 63 So. 559, 50 L.R.A. (NS)
553.273(emphasis supplied)

Third, courts may not deprive the electorate, who are assumed to have known the life and character of candidates, of their
right to elect officers:

As held in Conant vs. Grogan (1887) 6 N.Y.S.R. 322, cited in 17 A.I.R. 281, 63 So. 559, 50 LRA (NS) 553 �
The Court should never remove a public officer for acts done prior to his present term of office. To do otherwise would be to
deprive the people of their right to elect their officers. When the people have elected a man to office, it must be
assumed that they did this with knowledge of his life and character, and that they disregarded or forgave his
faults or misconduct, if he had been guilty of any. It is not for the court, by reason of such faults or misconduct to
practically overrule the will of the people.274 (Emphases supplied)

The notable cases on condonation following Pascual are as follows:

(1) Lizares v. Hechanova275 (May 17, 1966) - wherein the Court first applied the condonation doctrine, thereby quoting the
above-stated passages from Pascual in verbatim.

(2) Insco v. Sanchez, et al.276 (December 18, 1967) - wherein the Court clarified that the condonation doctrine does not
apply to a criminal case. It was explained that a criminal case is different from an administrative case in that the former
involves the People of the Philippines as a community, and is a public wrong to the State at large; whereas, in the latter, only
the populace of the constituency he serves is affected. In addition, the Court noted that it is only the President who may
pardon a criminal offense.

(3) Aguinaldo v. Santos277 (Aguinaldo; August 21, 1992) - a case decided under the 1987 Constitution wherein the
condonation doctrine was applied in favor of then Cagayan Governor Rodolfo E. Aguinaldo although his re-election merely
supervened the pendency of, the proceedings.

(4) Salalima v. Guinsona, Jr.278 (Salalima; May 22, 1996) -wherein the Court reinforced the condonation doctrine by
stating that the same is justified by "sound public policy." According to the Court, condonation prevented the elective
official from being "hounded" by administrative cases filed by his "political enemies" during a new term, for which he has to
defend himself "to the detriment of public service." Also, the Court mentioned that the administrative liability condoned by
re-election covered the execution of the contract and the incidents related therewith.279

119
(5) Mayor Garcia v. Mojica280 (Mayor Garcia; September 10, 1999) - wherein the benefit of the doctrine was extended to
then Cebu City Mayor Alvin B. Garcia who was administratively charged for his involvement in an anomalous contract for the
supply of asphalt for Cebu City, executed only four (4) days before the upcoming elections. The Court ruled that
notwithstanding the timing of the contract's execution, the electorate is presumed to have known the petitioner's background
and character, including his past misconduct; hence, his subsequent re-election was deemed a condonation of his prior
transgressions. More importantly, the Court held that the determinative time element in applying the condonation doctrine
should be the time when the contract was perfected; this meant that as long as the contract was entered into during
a prior term, acts which were done to implement the same, even if done during a succeeding term, do not
negate the application of the condonation doctrine in favor of the elective official.

(6) Salumbides, Jr. v. Office of the Ombudsman281 (Salumbides, Jr.; April 23, 2010) - wherein the Court explained the
doctrinal innovations in the Salalima and Mayor Garcia rulings, to wit:

Salalima v. Guingona, Jr. and Mayor Garcia v. Hon. Mojica reinforced the doctrine. The condonation rule was applied
even if the administrative complaint was not filed before the reelection of the public official, and even if the
alleged misconduct occurred four days before the elections, respectively. Salalima did not distinguish as to the date
of filing of the administrative complaint, as long as the alleged misconduct was committed during the prior term, the precise
timing or period of which Garcia did not further distinguish, as long as the wrongdoing that gave rise to the public official's
culpability was committed prior to the date of reelection.282 (Emphasis supplied) ChanRob les Vi rtualaw lib rary

The Court, citing Civil Service Commission v. Sojor,283 also clarified that the condonation doctrine would not apply to
appointive officials since, as to them, there is no sovereign will to disenfranchise.

(7) And finally, the above discussed case of Governor Garcia, Jr. -wherein the Court remarked that it would have been
prudent for the appellate court therein to have issued a temporary restraining order against the implementation of a
preventive suspension order issued by the Ombudsman in view of the condonation doctrine.

A thorough review of the cases post-1987, among others, Aguinaldo, Salalima, Mayor Garcia, and Governor Garcia, Jr. - all
cited by the CA to justify its March 16, 2015 and April 6, 2015 Resolutions directing the issuance of the assailed injunctive
writs - would show that the basis for condonation under the prevailing constitutional and statutory framework was never
accounted for. What remains apparent from the text of these cases is that the basis for condonation, as jurisprudential
doctrine, was - and still remains - the above-cited postulates of Pascual, which was lifted from rulings of US courts where
condonation was amply supported by their own state laws. With respect to its applicability to administrative cases, the core
premise of condonation - that is, an elective official's re-election cuts qff the right to remove him for an administrative
offense committed during a prior term - was adopted hook, line, and sinker in our jurisprudence largely because the legality
of that doctrine was never tested against existing legal norms. As in the US, the propriety of condonation is - as it should be
-dependent on the legal foundation of the adjudicating jurisdiction. Hence, the Court undertakes an examination of our
current laws in order to determine if there is legal basis for the continued application of the doctrine of condonation.

The foundation of our entire legal system is the Constitution. It is the supreme law of the land;284 thus, the unbending rule is
that every statute should be read in light of the Constitution.285 Likewise, the Constitution is a framework of a workable
government; hence, its interpretation must take into account the complexities, realities, and politics attendant to the
operation of the political branches of government.286

As earlier intimated, Pascual was a decision promulgated in 1959. Therefore, it was decided within the context of the 1935
Constitution which was silent with respect to public accountability, or of the nature of public office being a public trust. The
provision in the 1935 Constitution that comes closest in dealing with public office is Section 2, Article II which states that
"[t]he defense of the State is a prime duty of government, and in the fulfillment of this duty all citizens may be required by
law to render personal military or civil service."287 Perhaps owing to the 1935 Constitution's silence on public accountability,
and considering the dearth of jurisprudential rulings on the matter, as well as the variance in the policy considerations, there
was no glaring objection confronting the Pascual Court in adopting the condonation doctrine that originated from select US
cases existing at that time.

With the advent of the 1973 Constitution, the approach in dealing with public officers underwent a significant change. The
new charter introduced an entire article on accountability of public officers, found in Article XIII. Section 1 thereof positively
recognized, acknowledged, and declared that "[p]ublic office is a public trust." Accordingly, "[p]ublic officers and
employees shall serve with the highest degree of responsibility, integrity, loyalty and efficiency, and shall
remain accountable to the people."

After the turbulent decades of Martial Law rule, the Filipino People have framed and adopted the 1987 Constitution, which
sets forth in the Declaration of Principles and State Policies in Article II that "[t]he State shall maintain honesty and
integrity in the public service and take positive and effective measures against graft and corruption."288 Learning
how unbridled power could corrupt public servants under the regime of a dictator, the Framers put primacy on the integrity
of the public service by declaring it as a constitutional principle and a State policy. More significantly, the 1987 Constitution
strengthened and solidified what has been first proclaimed in the 1973 Constitution by commanding public officers to be
accountable to the people at all times:
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Section 1. Public office is a public trust. Public officers and employees must at all timesbe accountable to the people,
serve them with utmost responsibility, integrity, loyalty, and efficiency and act with patriotism and justice, and
lead modest lives. ChanRobles Vi rtua lawlib rary

In Belgica, it was explained that:

[t]he aphorism forged under Section 1, Article XI of the 1987 Constitution, which states that "public office is a public trust,"
is an overarching reminder that every instrumentality of government should exercise their official functions only in
accordance with the principles of the Constitution which embodies the parameters of the people's trust. The notion of a
public trust connotes accountability x x x.289 (Emphasis supplied) ChanRo bles Vi rtualaw lib rary

The same mandate is found in the Revised Administrative Code under the section of the Civil Service Commission,290 and
also, in the Code of Conduct and Ethical Standards for Public Officials and Employees.291

For local elective officials like Binay, Jr., the grounds to discipline, suspend or remove an elective local official from
office are stated in Section 60 of Republic Act No. 7160,292 otherwise known as the "Local Government Code of 1991"
(LGC), which was approved on October 10 1991, and took effect on January 1, 1992:

Section 60. Grounds for Disciplinary Action. - An elective local official may be disciplined, suspended, or removed from office
on any of the r following grounds: chanRoblesv irt ual Lawlib rary

(a) Disloyalty to the Republic of the Philippines; c ralawlaw lib rary

(b) Culpable violation of the Constitution; cralawlawlib ra ry

(c) Dishonesty, oppression, misconduct in office, gross negligence, or dereliction of duty; cralawlawl ibra ry

(d) Commission of any offense involving moral turpitude or an offense punishable by at least prision mayor; cralawlawl ibra ry

(e) Abuse of authority; cralawlawlib rary

(f) Unauthorized absence for fifteen (15) consecutive working days, except in the case of members of the sangguniang
panlalawigan, sangguniang panlunsod, sanggunian bayan, and sangguniang barangay; cralawlawl ibra ry

(g) Application for, or acquisition of, foreign citizenship or residence or the status of an immigrant of another country; and
(h) Such other grounds as may be provided in this Code and other laws.
An elective local official may be removed from office on the grounds enumerated above by order of the proper court.

Related to this provision is Section 40 (b) of the LGC which states that those removed from office as a result of an
administrative case shall be disqualified from running for any elective local position:

Section 40. Disqualifications. - The following persons are disqualified from running for any elective local position:

xxxx

(b) Those removed from office as a result of an administrative case;

x x x x (Emphasis supplied) ChanRoblesVirtualawl ibra ry

In the same sense, Section 52 (a) of the RRACCS provides that the penalty of dismissal from service carries the
accessory penalty of perpetual disqualification from holding public office:

Section 52. - Administrative Disabilities Inherent in Certain Penalties. -

a. The penalty of dismissal shall carry with it cancellation of eligibility, forfeiture of retirement benefits,
perpetual disqualification from holding public office, and bar from taking the civil service examinations.

In contrast, Section 66 (b) of the LGC states that the penalty of suspension shall not exceed the unexpired term of the
elective local official nor constitute a bar to his candidacy for as long as he meets the qualifications required for the office.
Note, however, that the provision only pertains to the duration of the penalty and its effect on the official's
candidacy. Nothing therein states that the administrative liability therefor is extinguished by the fact of re-
election:

Section 66. Form and Notice of Decision. - x x x.

xxxx

(b) The penalty of suspension shall not exceed the unexpired term of the respondent or a period of six (6) months for every

121
administrative offense, nor shall said penalty be a bar to the candidacy of the respondent so suspended as long as he meets
the qualifications required for the office.

Reading the 1987 Constitution together with the above-cited legal provisions now leads this Court to the conclusion that the
doctrine of condonation is actually bereft of legal bases.

To begin with, the concept of public office is a public trust and the corollary requirement of accountability to the
people at all times, as mandated under the 1987 Constitution, is plainly inconsistent with the idea that an elective local
official's administrative liability for a misconduct committed during a prior term can be wiped off by the fact that he was
elected to a second term of office, or even another elective post. Election is not a mode of condoning an administrative
offense, and there is simply no constitutional or statutory basis in our jurisdiction to support the notion that an official
elected for a different term is fully absolved of any administrative liability arising from an offense done during a prior term.
In this jurisdiction, liability arising from administrative offenses may be condoned bv the President in light of
Section 19, Article VII of the 1987 Constitution which was interpreted in Llamas v. Orbos293 to apply to administrative
offenses:

The Constitution does not distinguish between which cases executive clemency may be exercised by the President, with the
sole exclusion of impeachment cases. By the same token, if executive clemency may be exercised only in criminal cases, it
would indeed be unnecessary to provide for the exclusion of impeachment cases from the coverage of Article VII, Section 19
of the Constitution. Following petitioner's proposed interpretation, cases of impeachment are automatically excluded
inasmuch as the same do not necessarily involve criminal offenses.

In the same vein, We do not clearly see any valid and convincing , reason why the President cannot grant executive
clemency in administrative cases. It is Our considered view that if the President can grant reprieves, commutations and
pardons, and remit fines and forfeitures in criminal cases, with much more reason can she grant executive clemency in
administrative cases, which are clearly less serious than criminal offenses.

Also, it cannot be inferred from Section 60 of the LGC that the grounds for discipline enumerated therein cannot anymore be
invoked against an elective local official to hold him administratively liable once he is re-elected to office. In fact, Section 40
(b) of the LGC precludes condonation since in the first place, an elective local official who is meted with the penalty of
removal could not be re-elected to an elective local position due to a direct disqualification from running for such post. In
similar regard, Section 52 (a) of the RRACCS imposes a penalty of perpetual disqualification from holding public office as an
accessory to the penalty of dismissal from service.

To compare, some of the cases adopted in Pascual were decided by US State jurisdictions wherein the doctrine of
condonation of administrative liability was supported by either a constitutional or statutory provision stating, in effect, that
an officer cannot be removed by a misconduct committed during a previous term,294 or that the disqualification to hold
the office does not extend beyond the term in which the official's delinquency occurred. 295 In one case,296 the
absence of a provision against the re-election of an officer removed - unlike Section 40 (b) of the LGC-was the justification
behind condonation. In another case,297 it was deemed that condonation through re-election was a policy under their
constitution - which adoption in this jurisdiction runs counter to our present Constitution's requirements on public
accountability. There was even one case where the doctrine of condonation was not adjudicated upon but only invoked by a
party as a ground;298 while in another case, which was not reported in full in the official series, the crux of the disposition
was that the evidence of a prior irregularity in no way pertained to the charge at issue and therefore, was deemed to be
incompetent.299Hence, owing to either their variance or inapplicability, none of these cases can be used as basis for the
continued adoption of the condonation doctrine under our existing laws.

At best, Section 66 (b) of the LGC prohibits the enforcement of the penalty of suspension beyond the unexpired portion
of the elective local official's prior term, and likewise allows said official to still run for re-election This treatment is similar
to People ex rel Bagshaw v. Thompson300 and Montgomery v. Novell301 both cited in Pascual, wherein it was ruled that an
officer cannot be suspended for a misconduct committed during a prior term. However, as previously stated, nothing in
Section 66 (b) states that the elective local official's administrative liability is extinguished by the fact of re-election. Thus, at
all events, no legal provision actually supports the theory that the liability is condoned.

Relatedly it should be clarified that there is no truth in Pascual's postulation that the courts would be depriving the electorate
of their right to elect their officers if condonation were not to be sanctioned. In political law, election pertains to the process
by which a particular constituency chooses an individual to hold a public office. In this jurisdiction, there is, again, no legal
basis to conclude that election automatically implies condonation. Neither is there any legal basis to say that every
democratic and republican state has an inherent regime of condonation. If condonation of an elective official's administrative
liability would perhaps, be allowed in this jurisdiction, then the same should have been provided by law under our governing
legal mechanisms. May it be at the time of Pascual or at present, by no means has it been shown that such a law, whether in
a constitutional or statutory provision, exists. Therefore, inferring from this manifest absence, it cannot be said that the
electorate's will has been abdicated.

Equally infirm is Pascual's proposition that the electorate, when re-electing a local official, are assumed to have done so with

122
knowledge of his life and character, and that they disregarded or forgave his faults or misconduct, if he had been guilty of
any. Suffice it to state that no such presumption exists in any statute or procedural rule. 302 Besides, it is contrary to
human experience that the electorate would have full knowledge of a public official's misdeeds. The Ombudsman correctly
points out the reality that most corrupt acts by public officers are shrouded in secrecy, and concealed from the
public. Misconduct committed by an elective official is easily covered up, and is almost always unknown to the
electorate when they cast their votes.303 At a conceptual level, condonation presupposes that the condoner has actual
knowledge of what is to be condoned. Thus, there could be no condonation of an act that is unknown. As observed
in Walsh v. City Council of Trenton304 decided by the New Jersey Supreme Court:

Many of the cases holding that re-election of a public official prevents his removal for acts done in a preceding term of office
are reasoned out on the theory of condonation. We cannot subscribe to that theory because condonation, implying as it does
forgiveness, connotes knowledge and in the absence of knowledge there can be no condonation. One cannot forgive
something of which one has no knowledge.

That being said, this Court simply finds no legal authority to sustain the condonation doctrine in this jurisdiction. As can be
seen from this discourse, it was a doctrine adopted from one class of US rulings way back in 1959 and thus, out of touch
from - and now rendered obsolete by - the current legal regime. In consequence, it is high time for this Court to abandon the
condonation doctrine that originated from Pascual, and affirmed in the cases following the same, such as Aguinaldo,
Salalima, Mayor Garcia, and Governor Garcia, Jr. which were all relied upon by the CA.

It should, however, be clarified that this Court's abandonment of the condonation doctrine should be prospective in
application for the reason that judicial decisions applying or interpreting the laws or the Constitution, until reversed, shall
form part of the legal system of the Philippines.305 Unto this Court devolves the sole authority to interpret what the
Constitution means, and all persons are bound to follow its interpretation. As explained in De Castro v. Judicial Bar
Council.306

Judicial decisions assume the same authority as a statute itself and, until authoritatively abandoned, necessarily become, to
the extent that they are applicable, the criteria that must control the actuations, not only of those called upon to abide by
them, but also of those duty-bound to enforce obedience to them.307

Hence, while the future may ultimately uncover a doctrine's error, it should be, as a general rule, recognized as "good law"
prior to its abandonment. Consequently, the people's reliance thereupon should be respected. The landmark case on this
matter is People v. Jabinal,308 wherein it was ruled:

[W]hen a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied
prospectively, and should not apply to parties who had relied on the old doctrine and acted on the faith thereof.

Later, in Spouses Benzonan v. CA,309 it was further elaborated:

[Pursuant to Article 8 of the Civil Code "judicial decisions applying or interpreting the laws or the Constitution shall form a
part of the legal system of the Philippines." But while our decisions form part of the law of the land, they are also subject to
Article 4 of the Civil Code which provides that "laws shall have no retroactive effect unless the contrary is provided." This is
expressed in the familiar legal maxim lex prospicit, non respicit, the law looks forward not backward. The rationale against
retroactivity is easy to perceive. The retroactive application of a law usually divests rights that have already become vested
or impairs the obligations of contract and hence, is unconstitutional.310ChanRobles Vi rtua lawlib rary

Indeed, the lessons of history teach us that institutions can greatly benefit from hindsight and rectify its ensuing course.
Thus, while it is truly perplexing to think that a doctrine which is barren of legal anchorage was able to endure in our
jurisprudence for a considerable length of time, this Court, under a new membership, takes up the cudgels and now
abandons the condonation doctrine.

E. Consequence of ruling.

As for this section of the Decision, the issue to be resolved is whether or not the CA committed grave abuse of
discretion amounting to lack or excess of jurisdiction in issuing the assailed injunctive writs.

It is well-settled that an act of a court or tribunal can only be considered as with grave abuse of discretion when such act is
done in a capricious or whimsical exercise of judgment as is equivalent to lack of jurisdiction. The abuse of
discretion must be so patent and gross as to amount to an evasion of a positive duty or to a virtual refusal to perform a duty
enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner
by reason of passion and hostility.311 It has also been held that "grave abuse of discretion arises when a lower court or
tribunal patently violates the Constitution, the law or existing jurisprudence."312

As earlier established, records disclose that the CA's resolutions directing the issuance of the assailed injunctive writs were all

123
hinged on cases enunciating the condonation doctrine. To recount, the March 16, 2015 Resolution directing the issuance of
the subject TRO was based on the case of Governor Garcia, Jr., while the April 6, 2015 Resolution directing the issuance of
the subject WPI was based on the cases of Aguinaldo, Salalima, Mayor Garcia, and again, Governor Garcia, Jr. Thus, by
merely following settled precedents on the condonation doctrine, which at that time, unwittingly remained "good law," it
cannot be concluded that the CA committed a grave abuse of discretion based on its legal attribution above. Accordingly, the
WPI against the Ombudsman's preventive suspension order was correctly issued.

With this, the ensuing course of action should have been for the CA to resolve the main petition for certiorari in CA-G.R. SP
No. 139453 on the merits. However, considering that the Ombudsman, on October 9, 2015, had already found Binay, Jr.
administratively liable and imposed upon him the penalty of dismissal, which carries the accessory penalty of perpetual
disqualification from holding public office, for the present administrative charges against him, the said CA petition appears to
have been mooted.313 As initially intimated, the preventive suspension order is only an ancillary issuance that, at its core,
serves the purpose of assisting the Office of the Ombudsman in its investigation. It therefore has no more purpose - and
perforce, dissolves - upon the termination of the office's process of investigation in the instant administrative case.

F. Exceptions to the mootness principle.

This notwithstanding, this Court deems it apt to clarify that the mootness of the issue regarding the validity of the preventive
suspension order subject of this case does not preclude any of its foregoing determinations, particularly, its abandonment of
the condonation doctrine. As explained in Belgica, '"the moot and academic principle' is not a magical formula that can
automatically dissuade the Court in resolving a case. The Court will decide cases, otherwise moot, if: first, there is a grave
violation of the Constitution; second, the exceptional character of the situation and the paramount public interest is
involved; third, when the constitutional issue raised requires formulation of controlling principles to guide the bench, the
bar, and the public; and fourth, the case is capable of repetition yet evading review."314 All of these scenarios obtain in this
case:

First, it would be a violation of the Court's own duty to uphold and defend the Constitution if it were not to abandon the
condonation doctrine now that its infirmities have become apparent. As extensively discussed, the continued application of
the condonation doctrine is simply impermissible under the auspices of the present Constitution which explicitly mandates
that public office is a public trust and that public officials shall be accountable to the people at all times.

Second, the condonation doctrine is a peculiar jurisprudential creation that has persisted as a defense of elective officials to
escape administrative liability. It is the first time that the legal intricacies of this doctrine have been brought to light; thus,
this is a situation of exceptional character which this Court must ultimately resolve. Further, since the doctrine has served as
a perennial obstacle against exacting public accountability from the multitude of elective local officials throughout the years,
it is indubitable that paramount public interest is involved.

Third, the issue on the validity of the condonation doctrine clearly requires the formulation of controlling principles to guide
the bench, the bar, and the public. The issue does not only involve an in-depth exegesis of administrative law principles, but
also puts to the forefront of legal discourse the potency of the accountability provisions of the 1987 Constitution. The Court
owes it to the bench, the bar, and the public to explain how this controversial doctrine came about, and now, its reasons for
abandoning the same in view of its relevance on the parameters of public office.

And fourth, the defense of condonation has been consistently invoked by elective local officials against the administrative
charges filed against them. To provide a sample size, the Ombudsman has informed the Court that "for the period of July
2013 to December 2014 alone, 85 cases from the Luzon Office and 24 cases from the Central Office were dismissed on the
ground of condonation. Thus, in just one and a half years, over a hundred cases of alleged misconduct - involving infractions
such as dishonesty, oppression, gross neglect of duty and grave misconduct - were placed beyond the reach of the
Ombudsman's investigatory and prosecutorial powers."315 Evidently, this fortifies the finding that the case is capable of
repetition and must therefore, not evade review.

In any event, the abandonment of a doctrine is wholly within the prerogative of the Court. As mentioned, it is its own
jurisprudential creation and may therefore, pursuant to its mandate to uphold and defend the Constitution, revoke it
notwithstanding supervening events that render the subject of discussion moot. chanro bleslaw

V.

With all matters pertaining to CA-G.R. SP No. 139453 passed upon, the Court now rules on the final issue on whether or not
the CA's Resolution316 dated March 20, 2015 directing the Ombudsman to comment on Binay, Jr.'s petition for contempt in
CA-G.R. SP No. 139504 is improper and illegal.

The sole premise of the Ombudsman's contention is that, as an impeachable officer, she cannot be the subject of a charge
for indirect contempt317 because this action is criminal in nature and the penalty therefor would result in her effective
removal from office.318 However, a reading of the aforesaid March 20, 2015 Resolution does not show that she has already
been subjected to contempt proceedings. This issuance, in? fact, makes it clear that notwithstanding the directive for the
Ombudsman to comment, the CA has not necessarily given due course to Binay, Jr.'s contempt petition:

124
Without necessarily giving due course to the Petition for Contempt respondents [Hon. Conchita Carpio Morales, in her
capacity as the Ombudsman, and the Department of Interior and Local Government] are hereby DIRECTED to file Comment
on the Petition/Amended and Supplemental Petition for Contempt (CA-G.R. SP No. 139504) within an inextendible period of
three (3) days from receipt hereof. (Emphasis and underscoring supplied) ChanRob les Virtualawl ibra ry

Thus, even if the Ombudsman accedes to the CA's directive by filing a comment, wherein she may properly raise her
objections to the contempt proceedings by virtue of her being an impeachable officer, the CA, in the exercise of its sound
judicial discretion, may still opt not to give due course to Binay, Jr.'s contempt petition and accordingly, dismiss the same.
Sjmply put, absent any indication that the contempt petition has been given due course by the CA, it would then be
premature for this Court to rule on the issue. The submission of the Ombudsman on this score is perforce denied.

WHEREFORE, the petition is PARTLY GRANTED. Under the premises of this Decision, the Court resolves as follows:

(a) the second paragraph of Section 14 of Republic Act No. 6770 is declared UNCONSTITUTIONAL, while the policy against
the issuance of provisional injunctive writs by courts other than the Supreme Court to enjoin an investigation conducted by
the Office of the Ombudsman under the first paragraph of the said provision is DECLARED ineffective until the Court adopts
the same as part of the rules of procedure through an administrative circular duly issued therefor; c ralawlawli bra ry

(b) The condonation doctrine is ABANDONED, but the abandonment is PROSPECTIVE in effect; cralawlawlib rary

(c) The Court of Appeals (CA) is DIRECTED to act on respondent Jejomar Erwin S. Binay, Jr.'s (Binay, Jr.) petition
for certiorari in CA-G.R. SP No. 139453 in light of the Office of the Ombudsman's supervening issuance of its Joint Decision
dated October 9, 2015 finding Binay, Jr. administratively liable in the six (6) administrative complamts, docketed as OMB-C-
A-15-0058, OMB-C-A-15-0059, OMB-C-A-15-0060, OMB-C-A-15-0061, OMB-C-A-15-0062, and OMB-C-A-15-0063; and

(d) After the filing of petitioner Ombudsman Conchita Carpio Morales's comment, the CA is DIRECTED to resolve Binay, Jr.'s
petition for contempt in CA-G.R. SP No. 139504 with utmost dispatch.

SO ORDERED. chanroblesvi rtua llawli bra ry

125
DEFINITION OF JURISDICTION

EN BANC

G.R. No. 209447, August 11, 2015

PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Petitioner, v. HON. WINLOVE M. DUMAYAS,


PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 59, MAKATI CITY AND UNITED COCONUT PLANTERS
BANK (UCPB), Respondents.

[G.R. NO. 210901]

PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Petitioner, v. HON. WINLOVE M. DUMAYAS,


PRESIDING JUDGE, REGIONAL TRIAL COURT, BRANCH 59, MAKATI CITY AND UNITED COCONUT PLANTERS LIFE
ASSURANCE CORPORATION (COCOLIFE), Respondents.

DECISION

VILLARAMA, JR., J.:

It is an important fundamental principle in our judicial system that every litigation must come to an end.� Litigation must
end and terminate sometime and somewhere, and it is essential to an effective and efficient administration of justice that,
once a judgment has become final, the winning party be, not through a mere subterfuge, deprived of the fruits of the
verdict.1� Adherence to the principle impacts upon the lives of about three million poor farmers who have long waited to
benefit from the outcome of the 27-year battle for the judicial recovery of assets acquired through illegal conversion of the
coconut levies collected during the Marcos regime into private funds.

The Case

Before us are the consolidated petitions seeking the reversal of the following Orders2 issued by respondent Presiding Judge of
the Regional Trial Court (RTC) of Makati City, Branch 59:� (a)� Order dated April 29, 2013 denying petitioner�s motion to
dismiss the complaint in Civil Case No. 12-1251;� (b)� Order dated June 28, 2013 denying the motion for reconsideration
filed by petitioner; (c) Omnibus Order dated May 15, 2013 denying petitioner�s motion to dismiss the complaint in Civil Case
No. 12-1252; and (d) Order dated December 4, 2013 denying the motion for reconsideration filed by petitioner.

The Antecedents

The factual background of this case is gathered from the records and the decisions of this Court involving the coconut levy
funds.� We reproduce the pertinent portions of the January 24, 2012 Decision in COCOFED v. Republic3: Lawlib raryofCR Alaw

In 1971, Republic Act No. (R.A.) 6260 was enacted creating the Coconut Investment Company (CIC) to administer
the Coconut Investment Fund (CIF), which, under Section 8 thereof, was to be sourced from a PhP 0.55 levy on the sale
of every 100 kg. of copra. Of the PhP 0.55 levy of which the copra seller was, or ought to be, issued COCOFUND receipts,
PhP 0.02 was placed at the disposition of COCOFED, the national association of coconut producers declared by the Philippine
Coconut Administration (PHILCOA, now PCA) as having the largest membership.

The declaration of martial law in September 1972 saw the issuance of several presidential decrees (�P.Ds.�) purportedly
designed to improve the coconut industry through the collection and use of the coconut levy fund. While coming generally
from impositions on the first sale of copra, the coconut levy fund came under various names x x x. Charged with the duty of
collecting and administering the Fund was PCA. Like COCOFED with which it had a legal linkage, the PCA, by statutory
provisions scattered in different coco levy decrees, had its share of the coco levy.

The following were some of the issuances on the coco levy, its collection and utilization, how the proceeds of the levy will be
managed and by whom, and the purpose it was supposed to serve: Lawl ibra ryofCRAlaw

1. P.D. No. 276 established the Coconut Consumers Stabilization Fund (CCSF) and declared the proceeds of the CCSF levy
as trust fund, to be utilized to subsidize the sale of coconut-based products, thus stabilizing the price of edible oil.

2. P.D. No. 582 created the Coconut Industry Development Fund (CIDF) to finance the operation of a hybrid coconut seed
farm.

3. Then came P.D. No. 755 providing under its Section 1 the following: Lawlib raryofCR Alaw

126
It is hereby declared that the policy of the State is to provide readily available credit facilities to the coconut farmers at a
preferential rates; that this policy can be expeditiously and efficiently realized by the implementation of the �Agreement for
the Acquisition of a Commercial Bank for the benefit of Coconut Farmers� executed by the [PCA] x x x; and that the [PCA] is
hereby authorized to distribute, for free, the shares of stock of the bank it acquired to the coconut farmers x x x.Towards
achieving the policy thus declared, P.D. No. 755, under its Section 2, authorized PCA to utilize the CCSF and the CIDF
collections to acquire a commercial bank and deposit the CCSF levy collections in said bank, interest free, the deposit
withdrawable only when the bank has attained a certain level of sufficiency in its equity capital. The same section also
decreed that all levies PCA is authorized to collect shall not be considered as special and/or fiduciary funds or form part of
the general funds of the government within the contemplation of P.D. No. 711.

4. P.D. No. 961 codified the various laws relating to the development of coconut/palm oil industries.

5. The relevant provisions of P.D. No. 961, as later amended by P.D. No. 1468 (Revised Coconut Industry Code), read: Lawlib raryofCR Alaw

ARTICLE III
Levies

Section 1. Coconut Consumers Stabilization Fund Levy. � The [PCA] is hereby empowered to impose and collect x x x the
Coconut Consumers Stabilization Fund Levy x x x.

xxxx

Section 5. Exemption. � The [CCSF] and the [CIDF] as well as all disbursements as herein authorized, shall not be construed
x x x as special and/or fiduciary funds, or as part of the general funds of the national government within the contemplation of
PD 711; x x x the intention being that said Fund and the disbursements thereof as herein authorized for the benefit of the
coconut farmers shall be owned by them in their private capacities: x x x. (Emphasis supplied.)
6. Letter of Instructions No. (LOI) 926, Series of 1979, made reference to the creation, out of other coco levy funds, of
the Coconut Industry Investment Fund (CIIF) in P.D. No. 1468 and entrusted a portion of the CIIF levy to UCPB for
investment, on behalf of coconut farmers, in oil mills and other private corporations, with the following equity
ownership structure:

Section 2. Organization of the Cooperative Endeavor. � The [UCPB], in its capacity as the investment arm of the coconut
farmers thru the [CIIF] x x x is hereby directed to invest, on behalf of the coconut farmers, such portion of the CIIF x x x in
private corporations x x x under the following guidelines:Lawlib raryofCR Alaw

a) The coconut farmers shall own or control at least x x x (50%) of the outstanding voting capital stock of the private
corporation [acquired] thru the CIIF and/or corporation owned or controlled by the farmers thru the CIIF x x x. (Words in
bracket added.)
Through the years, a part of the coconut levy funds went directly or indirectly to [finance] various projects and/or was
converted into different assets or investments. Of particular relevance to this case was their use to acquire the First United
Bank (FUB), later renamed UCPB, and the acquisition by UCPB, through the CIIF companies, of a large block of SMC shares.

xxxx

Shortly after the execution of the PCA-Cojuangco, Jr. Agreement, President Marcos issued, on July 29, 1975, P.D. No. 755
directing, as earlier narrated, PCA to use the CCSF and CIDF to acquire a commercial bank to provide coco farmers
with �readily available credit facilities at preferential rate,� and PCA �to distribute, for free,� the bank shares to coconut
farmers.

Then came the 1986 EDSA event. One of the priorities of then President Corazon C. Aquino�s revolutionary government was
the recovery of ill-gotten wealth reportedly amassed by the Marcos family and close relatives, their nominees and associates.
Apropos thereto, she issued Executive Order Nos. (E.Os.) 1, 2 and 14, as amended by E.O. 14-A, all Series of 1986. E.O. 1
created the PCGG and provided it with the tools and processes it may avail of in the recovery efforts; E.O. No. 2 asserted
that the ill-gotten assets and properties come in the form of shares of stocks, etc.; while E.O. No. 14 conferred on the
Sandiganbayan exclusive and original jurisdiction over ill-gotten wealth cases, with the proviso that �technical rules of
procedure and evidence shall not be applied strictly� to the civil cases filed under the E.O. Pursuant to these issuances, the
PCGG issued numerous orders of sequestration, among which were those handed out, as earlier
mentioned, against shares of stock in UCPB purportedly owned by or registered in the names of (a) more than a
million coconut farmers and (b) the CIIF companies, including the SMC shares held by the CIIF companies. On July
31, 1987, the PCGG instituted before the Sandiganbayan a recovery suit docketed thereat as CC No. 0033.

After the filing and subsequent amendments of the complaint in CC 0033, Lobregat, COCOFED, et al., and Ballares, et al.,
purportedly representing over a million coconut farmers, sought and were allowed to intervene. Meanwhile, the following
incidents/events transpired:Lawl ibra ryofCRAlaw

1. On the postulate, inter alia, that its coco-farmer members own at least 51% of the outstanding capital stock of UCPB, the

127
CIIF companies, etc., COCOFED, et al., on November 29, 1989, filed Class Action Omnibus Motion praying for the lifting of
the orders of sequestration referred to above and for a chance to present evidence to prove the coconut farmers� ownership
of the UCPB and CIIF shares. The plea to present evidence was denied;

2. Later, the Republic moved for and secured approval of a motion for separate trial which paved the way for the subdivision
of the causes of action in CC 0033, each detailing how the assets subject thereof were acquired and the key roles the
principal played;

3. Civil Case 0033, pursuant to an order of the Sandiganbayan would be subdivided into eight complaints, docketed as CC
0033-A to CC 0033-H.

xxxx

4. On February 23, 2001, Lobregat, COCOFED, Ballares, et al., filed a Class Action Omnibus Motion to enjoin the PCGG from
voting the sequestered UCPB shares and the SMC shares registered in the names of the CIIF companies. The Sandiganbayan,
by Order of February 28, 2001, granted the motion, sending the Republic to come to this Court on certiorari, docketed
as G.R. Nos. 147062-64, to annul said order; and

5. By Decision of December 14, 2001, in G.R. Nos. 147062-64 (Republic v. COCOFED), the Court declared the coco
levy funds as prima facie public funds. And purchased as the sequestered UCPB shares were by such funds,
beneficial ownership thereon and the corollary voting rights prima facie pertain, according to the Court, to the
government.4 (Additional emphasis, italics and underscoring supplied)
As mentioned in the above-cited case, the amended complaint in Civil Case No. 0033 revolved around the provisional take-
over by the PCGG of COCOFED, Cocomark, and Coconut Investment Company and their assets and the sequestration of
shares of stock in UCPB CIIF corporations (CIIF oil mills and the 14 CIIF holding companies), or CIIF companies, so-called for
having been either organized, acquired and/or funded as UCPB subsidiaries with the use of the CIIF levy.� The basic
complaint also contained allegations about the alleged misuse of the coconut levy funds to buy out the majority of the
outstanding shares of stock of San Miguel Corporation (SMC).5 redarclaw

The proceedings relevant to this case pertain to Civil Case No. 0033-A entitled, Republic of the Philippines, Plaintiff, v.
Eduardo M. Cojuangco, Jr., et al., Defendants, COCOFED, et al., BALLARES, et al., Class Action Movants (Re: Anomalous
Purchase and Use of [FUB] now [UCPB]), and Civil Case No. 0033-F entitled, Republic of the Philippines, Plaintiff, v. Eduardo
M. Cojuangco, Jr., et al., Defendants (Re: Acquisition of San Miguel Corporation Shares of Stock).

The Sandiganbayan rendered partial summary judgments in Civil Case No. 0033-A and 0033-F on July 11, 2003 and May 7,
2004, respectively.� In our Decision dated January 24, 2012 in COCOFED v. Republic,6 we affirmed with modification the
said partial summary judgments and also upheld the Sandiganbayan�s ruling that the coconut levy funds are special public
funds of the Government.� Citing Republic v. COCOFED7 which resolved the issue of whether the PCGG has the right to vote
the sequestered shares, we declared that the coconut levy funds are not only affected with public interest but are, in
fact, prima facie public funds. We also upheld the Sandiganbayan�s ruling that Sections 1 and 2 of P.D. 755, Section 3,
Article III of P.D. 961, and the implementing regulations of the PCA, are unconstitutional �for allowing the use and/or the
distribution of properties acquired through the coconut levy funds to private individuals for their own direct benefit and
absolute ownership.� As to the ownership of the six CIIF companies, the 14 holding companies, and the CIIF block of SMC
shares of stock, we held these to be owned by the Government, having likewise been acquired using the coconut levy funds.
Accordingly, �the properties subject of the January 24, 2012 Decision were declared owned by and ordered reconveyed to
the Government, to be used only for the benefit of all coconut farmers and for the development of the coconut industry.�8 redarclaw

Under the Resolution dated September 4, 2012, we denied with finality the motion for reconsideration filed by the petitioners
in G.R. Nos. 177857-58.

The dispositive portion of the September 4, 2012 Resolution in Philippine Coconut Producers Federation, Inc. (COCOFED) v.
Republic of the Philippines9 thus reads:
Lawlibra ryofCRAlaw

WHEREFORE, the Court resolves to DENY with FINALITY the instant Motion for Reconsideration dated February 14, 2012
for lack of merit.

The Court further resolves to CLARIFY that the 753,848,312 SMC Series 1 preferred shares of the CIIF companies converted
from the CIIF block of SMC shares, with all the dividend earnings as well as all increments arising from, but not limited to,
the exercise of preemptive rights subject of the September 17, 2009 Resolution, shall now be the subject matter of the
January 24, 2012 Decision and shall be declared owned by the Government and be used only for the benefit of all coconut
farmers and for the development of the coconut industry.

As modified, the fallo of the January 24, 2012 Decision shall read, as follows: Lawlib raryofCR Alaw

WHEREFORE, the petitions in G.R. Nos. 177857-58 and 178793 are hereby DENIED. The Partial Summary Judgment dated
July 11, 2003 in Civil Case No. 0033-A as reiterated with modification in Resolution dated June 5, 2007, as well as the Partial
Summary Judgment dated May 7, 2004 in Civil Case No. 0033-F, which was effectively amended in Resolution dated May 11,
128
2007, are AFFIRMED with MODIFICATION, only with respect to those issues subject of the petitions in G.R. Nos. 177857-
58 and 178193. However, the issues raised in G.R. No. 180705 in relation to Partial Summary Judgment dated July 11, 2003
and Resolution dated June 5, 2007 in Civil Case No. 0033-A, shall be decided by this Court in a separate decision.

The Partial Summary Judgment in Civil Case No. 0033-A dated July 11, 2003, is hereby MODIFIED, and shall read as
follows: Law lib raryofCRAlaw

WHEREFORE, in view of the foregoing, We rule as follows: Lawlib raryofCR Alaw

SUMMARY OF THE COURT�S RULING.

A.� Re: CLASS ACTION MOTION FOR A SEPARATE SUMMARY JUDGMENT dated April 11, 2001 filed by Defendant Maria Clara
L. Lobregat, COCOFED, et al., and Ballares, et al.

The Class Action Motion for Separate Summary Judgment dated April 11, 2001 filed by defendant Maria Clara L. Lobregat,
COCOFED, et al. and Ballares, et al., is hereby DENIED for lack of merit.

B. Re: MOTION FOR PARTIAL SUMMARY JUDGMENT (RE: COCOFED, ET AL. AND BALLARES, ET AL.) dated April 22, 2002 filed
by Plaintiff.

1. a. The portion of Section 1 of P.D. No. 755, which reads: Lawlibra ryofCRAlaw

x x x and that the Philippine Coconut Authority is hereby authorized to distribute, for free, the shares of stock of the
bank it acquired to the coconut farmers under such rules and regulations it may promulgate.
taken in relation to Section 2 of the same P.D., is unconstitutional: (i) for having allowed the use of the CCSF to
benefit directly private interest by the outright and unconditional grant of absolute ownership of the FUB/UCPB
shares paid for by PCA entirely with the CCSF to the undefined �coconut farmers�, which negated or circumvented
the national policy or public purpose declared by P.D. No. 755 to accelerate the growth and development of the
coconut industry and achieve its vertical integration; and (ii) for having unduly delegated legislative power to the
PCA.

b.� The implementing regulations issued by PCA, namely, Administrative Order No. 1, Series of 1975 and Resolution
No. 074-78 are likewise invalid for their failure to see to it that the distribution of shares serve exclusively or at least
primarily or directly the aforementioned public purpose or national policy declared by P.D. No. 755.

2. Section 2 of P.D. No. 755 which mandated that the coconut levy funds shall not be considered special and/or
fiduciary funds nor part of the general funds of the national government and similar provisions of Sec. 5, Art. III,
P.D. No. 961 and Sec. 5, Art. III, P.D. No. 1468 contravene the provisions of the Constitution, particularly, Art. IX
(D), Sec. 2; and Article VI, Sec. 29 (3).

3. Lobregat, COCOFED, et al. and Ballares, et al. have not legally and validly obtained title of ownership over the
subject UCPB shares by virtue of P.D. No. 755, the Agreement dated May 25, 1975 between the PCA and defendant
Cojuangco, and PCA implementing rules, namely, Adm. Order No. 1, s. 1975 and Resolution No. 074-78.

4. The so-called �Farmers� UCPB shares� covered by 64.98% of the UCPB shares of stock, which formed part of the
72.2% of the shares of stock of the former FUB and now of the UCPB, the entire consideration of which was charged
by PCA to the CCSF, are hereby declared conclusively owned by, the Plaintiff Republic of the Philippines.

xxxx

SO ORDERED.

The Partial Summary Judgment in Civil Case No. 0033-F dated May 7, 2004, is hereby MODIFIED, and shall read as
follows: Law lib raryofCRAlaw

WHEREFORE, the MOTION FOR EXECUTION OF PARTIAL SUMMARY JUDGMENT (RE: CIIF BLOCK OF SMC SHARES
OF STOCK) dated August 8, 2005 of the plaintiff is hereby denied for lack of merit. However, this Court orders the
severance of this particular claim of Plaintiff. The Partial Summary Judgment dated May 7, 2004 is now considered a separate
final and appealable judgment with respect to the said CIIF Block of SMC shares of stock.

The Partial Summary Judgment rendered on May 7, 2004 is modified by deleting the last paragraph of the dispositive
portion, which will now read, as follows: Lawlib raryofCRAlaw

WHEREFORE, in view of the foregoing, we hold that:

129
The Motion for Partial Summary Judgment (Re: Defendants CIIF Companies, 14 Holding Companies and Cocofed, et al.) filed
by Plaintiff is hereby GRANTED. ACCORDINGLY, THE CIIF COMPANIES, NAMELY:

1. Southern Luzon Coconut Oil Mills (SOLCOM);


2. Cagayan de Oro Oil Co., Inc. (CAGOIL);
3. Iligan Coconut Industries, Inc. (ILICOCO);
4. San Pablo Manufacturing Corp. (SPMC);
5. Granexport Manufacturing Corp. (GRANEX); and
6. Legaspi Oil Co., Inc. (LEGOIL),

AS WELL AS THE 14 HOLDING COMPANIES, NAMELY:�

1. Soriano Shares, Inc.;


2. ACS Investors, Inc.;
3. Roxas Shares, Inc.;
4. Arc Investors; Inc.;
5. Toda Holdings, Inc.;
6. AP Holdings, Inc.;
7. Fernandez Holdings, Inc.;
8. SMC Officers Corps, Inc.;
9. Te Deum Resources, Inc.;
10. Anglo Ventures, Inc.;
11. Randy Allied Ventures, Inc.;
12. Rock Steel Resources, Inc.;
13. Valhalla Properties Ltd., Inc.; and
14. First Meridian Development, Inc.

AND THE CONVERTED SMC SERIES 1 PREFERRED SHARES TOTALING 753,848,312 SHARES SUBJECT OF THE
RESOLUTION OF THE COURT DATED SEPTEMBER 17, 2009 TOGETHER WITH ALL DIVIDENDS DECLARED, PAID OR
ISSUED THEREON AFTER THAT DATE, AS WELL AS ANYINCREMENTS THERETO ARISING FROM, BUT NOT LIMITED
TO, EXERCISE OF PRE-EMPTIVE RIGHTS ARE DECLARED OWNED BY THE GOVERNMENT TO BE USED ONLY FOR
THE BENEFIT OF ALL COCONUT FARMERS AND FOR THE DEVELOPMENT OF THE COCONUT INDUSTRY, AND
ORDERED RECONVEYED TO THE GOVERNMENT.

THE COURT AFFIRMS THE RESOLUTIONS ISSUED BY THE SANDIGANBAYAN ON JUNE 5, 2007 IN CIVIL CASE NO.
0033-A AND ON MAY 11, 2007 IN CIVIL CASE NO. 0033-F, THAT THERE IS NO MORE NECESSITY OF FURTHER
TRIAL WITH RESPECT TO THE ISSUE OF OWNERSHIP OF(1) THE SEQUESTERED UCPB SHARES, (2) THE CIIF
FLOCK OF SMC SHARES, AND (3) THE CIIF COMPANIES, AS THEY HAVE FINALLY BEEN ADJUDICATED IN THE
AFOREMENTIONED PARTIAL SUMMARY JUDGMENTS DATED JULY 11, 2003 AND MAY 7, 2004.

SO ORDERED.
Costs against petitioners COCOFED, et al. in G.R. Nos. 177857-58 and Danilo S. Ursua in G.R. No. 178193.

No further pleadings shall be entertained. Let Entry of Judgment be made in due course.

SO ORDERED.10� (Boldface in the original; additional underscoring supplied)


On December 28, 2012, a petition for declaratory relief11 was filed by respondent UCPB in the RTC of Makati City (Civil Case
No. 12-1251) against the six CIIF oil mills and 14 holding companies (CIIF companies), PCGG and other corporations
�similarly situated.� A similar petition12 was also filed by respondent United Coconut Planters Life Assurance Corporation
(COCOLIFE) against the same defendants (Civil Case No. 12-1252).

Civil Case No. 12-1251

UCPB alleged that the capital or equity used in establishing the CIIF companies was not exclusively sourced from the coconut
levy funds. It claimed that while P633 Million was invested by it as Administrator of the CIIF, as universal bank it also
invested around P112 million in the six oil mill companies or oil mills group (CIIF OMG).� As to the 14 holding companies,
UCPB claimed that while it had the funds in mid-1983 to purchase the 33,133,266 shares in SMC then being sold by the
Soriano Group for the price of P1.656 Billion to Mr. Eduardo M. Cojuangco, Jr., it could not, under banking laws, directly
engage in the business of brewery. To make the equity investment, the 14 holding companies were established by the CIIF
OMG to serve as corporate vehicles for the investment in SMC shares (CIIF SMC Block of Shares).

With the foregoing supposed equity in the CIIF companies and contributions to the acquisition of the SMC shares, UCPB
claims 11.03% indirect ownership valued at P7.84 Billion, based on the P71.04 Billion present value of the said sequestered
shares (P56.5 Billion redemption price of the redeemed shares plus P14.54 Billion dividends and accrued interests for the

130
account of the 14 holding companies).� UCPB thus prayed for a judgment

declaring the rights and duties of [UCPB] affirming and confirming [UCPB�s] proportionate right, title and interest in the Oil
Mills Group Companies, its indirect equity of the 14 Coconut Industry Investment Funds (�CIIF�) Holding Companies and
the San Miguel Corporation (�SMC�) Shares, the dividends thereon and the proceeds of the redemption thereof and that
any disbursement or disposition thereof should x x x respect and take into account [UCPB�s] right, title and interest
thereto.13
PCGG filed a motion to dismiss citing the following grounds: (1) lack of jurisdiction over the subject matter of the case; (2)
the January 24, 2012 Decision of the Supreme Court cannot be the proper subject of a petition for declaratory relief; (3) a
petition for declaratory relief is unavailing since the alleged right or interest of UCPB over the CIIF companies and the CIIF
Block of SMC Shares had long been breached or violated upon the issuance of the writ of sequestration against the said
companies and shares of stock by the PCGG, which thereafter assumed their administration and voted the shares of stock;
(4) UCPB is now estopped from asserting its alleged right over the subject companies and shares of stock, having failed to
enforce it for a long time (25 years) from the date of filing by PCGG of the complaint in the Sandiganbayan in 1987 until the
Supreme Court decided with finality the issue of ownership of the subject sequestered companies and shares of stock on
September 4, 2012; and (5) the petition is defective, as it failed to implead an indispensable party, the Republic of the
Philippines.13-a
redarclaw

UCPB opposed the motion contending that the subject of its petition is not the Supreme Court Decision dated January 24,
2012 but the proper documents establishing UCPB�s ownership over the subject companies and shares of stock.� It further
asserted that there is no actual breach of right or estoppel that would bar UCPB�s claim considering that it was not even a
party to any previous legal suit involving the subject properties.13-breda rclaw

On April 29, 2013, respondent Judge issued the first assailed Order denying the motion to dismiss and directing the PCGG to
file its Answer.� PCGG�s motion for reconsideration was likewise denied under the Order dated June 28, 2013.

Civil Case No. 12-1252

COCOLIFE raised similar claims of ownership in the subject companies and shares of stock by virtue of its being a
stockholder, owning 146,610,567 UCPB shares independently of its right as direct shareholder of the CIIF OMG and the 14
holding companies, as well as the CIIF SMC Block of Shares. It alleged that on December 18, 1985, it purchased from UCPB
shares of stock in four CIIF oil companies. Using funds coming from COCOLIFE and UCPB, the CIIF OMG was able to raise the
money for the purchase of the 33,133,266 common shares in SMC.� Consequently, COCOLIFE�s percentage ownership in
the CIIF SMC Block of Shares being held by the 14 holding companies is 11.01%. According to COCOLIFE, its investment in
the CIIF OMG is evidenced by certificates of stock issued by San Pablo Manufacturing Corp., Southern Luzon Coconut Oil
Mills, Granexport Manufacturing Corp. and Legaspi Oil Co., Inc.

Like UCPB, COCOLIFE asserted that the CIIF OMG and 14 CIIF holding companies are not wholly owned by the
Government.� Since it was not impleaded in the complaint filed by the PCGG for the recovery of allegedly ill-gotten
properties (CIIF companies and CIIF SMC Block of Shares), COCOLIFE argued that it should not be deprived of its
proportionate interest (11.01%) in the said properties sequestered by PCGG. It thus prayed that judgment be rendered by
the RTC declaring the rights and duties of COCOLIFE affirming and confirming COCOLIFE�s proportionate interest in the four
CIIF oil companies, its indirect equity in the 14 CIIF holding companies and the CIIF SMC Block of Shares including the
proceeds or their equivalent, and that any disbursement or disposition thereof should preserve, respect and take into account
COCOLIFE�s right and interest.

Civil Case No. 12-1252 was consolidated with Civil Case No. 12-1251. PCGG likewise moved to dismiss the petition in Civil
Case No. 12-1252 on the same grounds it raised in Civil Case No. 12-1251.

The Omnibus Order dated May 15, 2013 denied the motion to dismiss and further required PCGG to file its Answer.�
PCGG�s motion for reconsideration was likewise denied by respondent Judge on December 4, 2013.

Petitioner�s Arguments

PCGG contends that respondent judge gravely abused his discretion in not dismissing the petitions for declaratory relief,
which� merely aim to re-litigate the issue of ownership already passed upon by the Sandiganbayan under the Partial
Summary Judgment rendered in Civil Case No. 0033-F and the January 24, 2012 Decision of this Court in COCOFED v.
Republic.14 It argues that the RTC has no jurisdiction over the acts performed by PCGG pursuant to its quasi-judicial
functions, particularly those relating to the issuance of writs of sequestration, and that all cases involving ill-gotten wealth
assets are under the unquestionable jurisdiction of the Sandiganbayan.

Contrary to the asseveration of respondents UCPB and COCOLIFE, PCGG maintains that their petitions for declaratory relief
actually seek to modify or alter the Decision of this Court in COCOFED v. Republic, which has become final and executory.�
PCGG also contends that documents like stock certificates cannot be a proper subject of a petition for declaratory relief
considering that the phrase �other written instruments� contemplated by the Rules of Court pertains to a written document
constituting a contract upon which rights and obligations are created, which terms could be interpreted by the courts so as to

131
avoid any conflicting interests between the parties.� Further, the alleged ownership or title of UCPB and COCOLIFE have
already been breached or violated by the issuance of writs of sequestration over the subject properties.

On account of their inaction for more than 25 years that the issue of ownership over the sequestered CIIF companies and
CIIF SMC Block of Shares were being litigated, PCGG argues that UCPB and COCOLIFE are now estopped from asserting any
such right in the said properties. And as to their non-participation in the cases before the Sandiganbayan, PCGG asserts it
has no legal obligation to implead UCPB and COCOLIFE, as held in Universal Broadcasting Corporation v.
Sandiganbayan (5th Div.).15 redarclaw

Respondents� Arguments

Respondents question the authority of Commissioner Vicente L. Gengos, Jr. in filing the present petitions before the Court
and signing the Verification and Certification Against Forum Shopping. They point out that the PCGG is a collegial body
created by virtue of EO 1, and it may function only as such �Commission.�� Consequently, the present action should have
been properly authorized by all members of the Commission.

On the issue of jurisdiction, UCPB and COCOLIFE argue that since they have properly alleged a case for declaratory relief,
jurisdiction over the subject matter lies in the regular courts such as the RTC of Makati City. Having filed a motion to dismiss,
PCGG is deemed to have admitted the material allegations of the complaint, specifically that UCPB and COCOLIFE had jointly
acquired the six CIIF oil mills by investing direct equity of P112 Million (UCPB) and P112 Million (COCOLIFE) for the four CIIF
oil mills.� Citing San Miguel Corporation v. Kahn16 where this Court held that the Sandiganbayan has no jurisdiction if the
subject matter of the case does not involve or has no relation to the recovery of ill-gotten wealth, UCPB and COCOLIFE insist
that the subject matter of their petitions is the declaration of their rights under corporate documents, which in turn relate to
UCPB and COCOLIFE�s investments not sourced from the coconut levy funds.� It is thus the allegations in the complaint
that determine the cause of action and what court has jurisdiction over such cause of action, and not the defenses raised in
the motion to dismiss and/or answer.

In the same vein, UCPB and COCOLIFE posit that, contrary to PCGG�s position, proceeding to hear the cases below will not
pave the way for re-examining the findings of this Court in its Decision in COCOFED v. Republic.� This is because the subject
matter of the petitions for declaratory relief is not the coconut levy funds but their own investments in the CIIF OMG and
consequent indirect ownership of the CIIF SMC Block of Shares. Neither do their petitions seek to lift the sequestration orders
as these pertain only to those shares in CIIF OMG which were acquired by UCPB as Administrator, using coconut levy
funds.� While respondents adhere to the wisdom of the Decision in COCOFED v. Republic, it is their position that the ruling
therein does not affect their respective claims to 11% proportional equity stake in the CIIF OMG companies.� Moreover,
since they were not impleaded in Sandiganbayan Civil Case No. 0033-F and in G.R. Nos. 177857-58 and 178193,
respondents maintain that they are not bound by any adjudication of ownership rendered therein.

Respondents further contend that the writ of sequestration issued by the Sandiganbayan cannot be considered a breach
which gives rise to a cause of action in favor of any of the parties. There was no �injury� on the part of UCPB and
COCOLIFE despite the sequestration proceedings because they were not impleaded as a party in the sequestration case.
They point out that their title and interest in the subject properties remained unaffected by the sequestration by PCGG
considering that the CIIF companies had not done anything to disown or deny UCPB and COCOLIFE�s stockholdings, as in
fact, in their Answer to the petition for declaratory relief, these companies expressly admitted the existence of respondents�
stockholdings in each respective company. Also, the CIIF OMG were all in agreement that there is a need for declaratory
relief judgment on respondents� claims in the sequestered properties notwithstanding the final decision of this Court which
resolved the issue of ownership in favor of the Government.

On February 26, 2014 in G.R. No. 210901, we issued a temporary restraining order (TRO) immediately enjoining the
respondent judge, the RTC of Makati City, Branch 59, their representatives, agents or other persons acting on their behalf,
from proceeding with the hearing of the petitions for declaratory relief in Civil Case Nos. 12-1251 and 12-1252.17� Likewise,
a TRO was issued in G.R. No. 209447 enjoining the respondent judge from further hearing the said petitions for declaratory
relief.18
reda rclaw

Issues

The issues generated by this controversy are the following: Lawli bra ryofCRAlaw

1)� Non-compliance with the rule on Verification and Certification of Non-Forum Shopping which was signed by only one
PCGG Commissioner;

2)� Lack of jurisdiction over the subject matter of Civil Case Nos. 12-1251 and 12-1252;

3)� Non-compliance with the requisites of a petition for declaratory relief complied with; and

4)� Application of res judicata and/or laches as bar to the suits for declaratory relief filed by UCPB and COCOLIFE.

132
Our Ruling

The petitions are meritorious.

Alleged Lack of Authority of PCGG


Commissioner Vicente L. Gengos, Jr.
to file the present petition�

Under Rule 46, Section 3, paragraph 3 of the 1997 Rules of Civil Procedure, as amended, petitions for certiorari must be
verified and accompanied by a sworn certification of non-forum shopping.19 A pleading is verified by an affidavit that the
affiant has read the pleading and that the allegations therein are true and correct of his personal knowledge or based on
authentic records.20� The party need not sign the verification.� A party�s representative, lawyer or any person who
personally knows the truth of the facts alleged in the pleading may sign the verification.21 redarc law

On the other hand, a certification of non-forum shopping is a certification under oath by the plaintiff or principal party in
the complaint or other initiatory pleading asserting a claim for relief or in a sworn certification annexed thereto and
simultaneously filed therewith, (a) that he has not theretofore commenced any action or filed any claim involving the same
issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is
pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and
(c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact
within five (5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.22 reda rclaw

It is obligatory that the one signing the verification and certification against forum shopping on behalf of the principal party
or the other petitioners has the authority to do the same.23� We hold that the signature of only one Commissioner of
petitioner PCGG in the verification and certification against forum shopping is not a fatal defect.

It has been consistently held that the verification of a pleading is only a formal, not a jurisdictional, requirement. The
purpose of requiring a verification is to secure an assurance that the allegations in the petition are true and correct, not
merely speculative. This requirement is simply a condition affecting the form of pleadings, and noncompliance therewith does
not necessarily render the pleading fatally defective.24reda rc law

As to the certification of non-forum shopping, a rigid application of the rules should not defeat the PCGG�s mandate under
EO 1, EO 2, EO 14 and EO 14-A to prosecute cases for the recovery of ill-gotten wealth, and to conserve sequestered assets
and corporations, which are in custodia legis, under its administration. Indeed, relaxation of the rules is warranted in this
case involving coconut levy funds previously declared by this Court as �affected with public interest� and judicially
determined as public funds.� Relevantly, after the promulgation of the decision of this Court in COCOFED v. Republic, EO
180 was issued on March 18, 2015 reiterating the Government�s policy to ensure that all coco levy funds and coco levy
assets be utilized �solely and exclusively for the benefit of all the coconut farmers and for the development of the coconut
industry.� In line with such policy, Section 3 thereof provides: Law lib raryofCRAlaw

Section 3. Actions to Preserve, Protect and Recover Coco Levy Assets.� The Office of the Solicitor General (OSG), the
Presidential Commission on Good Government (PCGG), and any other concerned government agency shall, under the general
supervision of the Secretary of Justice, file the proper pleadings or institute and maintain the necessary legal actions
to preserve, protect, or recover the Government�s rights and interests in the Coco Levy Assets and to prevent
any dissipation or reduction in their value.� (Emphasis and underscoring supplied)
Apropos PCGG v. Cojuangco, Jr.,25 involving the issue of who has the right to vote the sequestered SMC shares, we gave due
course to the petition for certiorari and mandamus despite the lack of signature of the Solicitor General; but it was signed by
two special counsels and the verification was signed by Commissioner Herminio Mendoza.� We noted the extraordinary
circumstances in the filing of the petition by the said government officials that justified a liberal interpretation of the rules.

The RTC has no jurisdiction over


suits involving the sequestered coco
levy assets and coco levy funds.

Jurisdiction is defined as the power and authority of a court to hear, try, and decide a case.26� Jurisdiction over the subject
matter is conferred by the Constitution or by law and is determined by the allegations of the complaint and the relief prayed
for, regardless of whether the plaintiff is entitled to recovery upon all or some of the claims prayed for therein.� Jurisdiction
is not acquired by agreement or consent of the parties, and neither does it depend upon the defenses raised in the answer or
in a motion to dismiss.27redarclaw

Under Section 4 (C) of P.D. No. 1606, as amended by R.A. No. 7975 and R.A. No. 8249, the jurisdiction of the
Sandiganbayan included suits for recovery of ill-gotten wealth and related cases: Lawlibra ryofCRAlaw

(C) Civil and criminal cases filed pursuant to and in connection with Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986.

133
xxxx

The Sandiganbayan shall have exclusive original jurisdiction over petitions for the issuance of the writs of mandamus,
prohibition, certiorari, habeas corpus, injunctions, and other ancillary writs and processes in aid of its appellate jurisdiction
and over petitions of similar nature, including quo warranto, arising or that may arise in cases filed or which may be filed
under Executive Order Nos. 1, 2, 14 and 14-A, issued in 1986: Provided, That the jurisdiction over these petitions shall not
be exclusive of the Supreme Court.� (Italics in the original; emphasis supplied)

In PCGG v. Pe�a,28 we made the following clarification on the extent of the Sandiganbayan�s jurisdiction: Lawlib raryofCR Alaw

x x x Under section 2 of the President�s Executive Order No. 14 issued on May 7, 1986, all cases of the Commission
regarding �the Funds, Moneys, Assets, and Properties Illegally Acquired or Misappropriated by Former President Ferdinand
Marcos, Mrs. Imelda Romualdez Marcos, their Close Relatives, Subordinates, Business Associates, Dummies, Agents, or
Nominees� whether civil or criminal, are lodged within the �exclusive and original jurisdiction of the Sandiganbayan� and
all incidents arising from, incidental to, or related to, such cases necessarily fall likewise under the Sandiganbayan�s
exclusive and original jurisdiction, subject to review on certiorari exclusively by the Supreme Court.29� (Emphasis supplied)

Soriano III v. Yuzon30 reiterated the above ruling, thus: LawlibraryofCR Alaw

Now, that exclusive jurisdiction conferred on the Sandiganbayan would evidently extend not only to the principal
causes of action, i.e., the recovery of alleged ill-gotten wealth, but also to �all incidents arising from, incidental
to, or related to, such cases,� such as the dispute over the sale of the shares, the propriety of the issuance of ancillary
writs or provisional remedies relative thereto, the sequestration thereof, which may not be made the subject of separate
actions or proceedings in another forum. As explained by the Court in Pe�a: Lawlibra ryofCRAlaw

�The rationale of the exclusivity of such jurisdiction is readily understood. Given the magnitude of the past regime�s
�organized pillage� and the ingenuity of the plunderers and pillagers with the assistance of the experts and best legal minds
available in the market, it is a matter of sheer necessity to restrict access to the lower courts, which would have
tied into knots and made impossible the commission�s gigantic task of recovering the plundered wealth of the
nation, whom the past regime in the process had saddled and laid prostrate with a huge $27 billion foreign debt that has
since ballooned to $28.5 billion.� (italics and emphasis supplied.) (Additional emphasis supplied)

Respondents� petitions for declaratory relief filed in the RTC asserted their claim of ownership over the sequestered CIIF
companies and indirectly the CIIF SMC Block of Shares, in the following percentages: 11.03% (UCPB) and 11.01%
(COCOLIFE).� Undeniably, these are related to the ill-gotten wealth cases (Civil Case Nos. 0033-A and 0033-F) involving the
issue of ownership of the aforesaid sequestered companies and shares of stock, which have been tried and decided by the
Sandiganbayan, and the� decision had been appealed to and finally disposed of by this Court in G.R. Nos. 177857-
5831 (COCOFED and Lobregat, et. al�s ownership claim over the CIIF companies and CIIF SMC Block of Shares) and G.R. No.
18070532 (Eduardo M. Cojuangco, Jr.�s claim over UCPB shares under an Agreement with PCA).

Contrary to respondents� contention, the subject matter of their petitions for declaratory relief, i.e., their purported
contribution to the acquisition of four CIIF OMG companies and the 14 holding companies, as well as indirect ownership of a
portion of the CIIF SMC Block of Shares, is inextricably intertwined with the issue of ownership judicially settled in the
aforementioned appeals from the Partial Summary Judgments rendered in Civil Case Nos. 0033-A and 0033-F.

The allegation that no coconut levy funds were actually used to purchase stockholdings in the CIIF companies is of no
moment.� Since the CIIF companies and CIIF SMC Block of Shares have long been sequestered and placed under the
administration of the PCGG, the latter�s functions may not be interfered with by a co-equal court.� In Republic v. Investa
Corporation33 involving the propriety of dilution of the Government�s percentage in the stockholdings of a sequestered
corporation (DOMSAT), we held that it is the Sandiganbayan and not the Securities and Exchange Commission (SEC) which
has jurisdiction over the petition filed by the Republic and DOMSAT.� As conservator of sequestered shares, PCGG has the
duty to ensure that the sequestered properties are not dissipated under its watch.

Previously, this Court affirmed the jurisdiction of the RTC in a suit also involving a claim of ownership in the sequestered
corporation, and ruled in this wise:34 reda rc law

We disagree with the RTC and the CA on the issue of jurisdiction. While there can be no dispute that PCOC was
sequestered, the fact of sequestration alone did not automatically oust the RTC of jurisdiction to decide upon the
question of ownership of the subject gaming and office equipment. The PCGG must be a party to the suit in
order that the Sandiganbayan�s exclusive jurisdiction may be correctly invoked.� This is deducible from no less
than E.O. No. 14, the �Pe�a� and �Nepomuceno� cases relied upon by both subordinates courts. Note that in Section 2 of
E.O. No. 14 which provides: Lawl i braryofCR Alaw

�Section 2. The Presidential Commission on Good Government shall file all such cases, whether civil or criminal, with the
Sandiganbayan, which shall have exclusive and original jurisdiction thereof.�

134
it speaks of the PCGG as party-plaintiff.� On the other hand, the PCGG was impleaded as co-defendant in both the �Pe�a�
and �Nepomuceno� cases. But here, the PCGG does not appear in either capacity, as the complaint is solely between
PAGCOR and respondents PCOC and Marcelo. The �Pe�a� and �Nepomuceno� cases which recognize the independence of
the PCGG and the Sandiganbayan in sequestration cases, therefore, cannot be invoked in the instant case so as to divest the
RTC of its jurisdiction, under Section 19 of B.P. 129, over PAGCOR�s action for recovery of personal property.35� (Emphasis
supplied)

In Cuenca v. PCGG,36 we upheld the exclusive jurisdiction of the Sandiganbayan over all incidents affecting the shares of a
sequestered corporation considering that the action before the RTC is inexorably entwined with the Government�s case for
recovery of ill-gotten wealth pending with the Sandiganbayan.� Thus: Lawlibra ryofCRAlaw

Petitioners contend that even if UHC was indeed sequestered, jurisdiction over the subject matter of petitioners� Complaint
for enforcement or rescission of contract between petitioners and respondents belonged to the RTC and not the
Sandiganbayan. Petitioners cited Philippine Amusement and Gaming Corporation v. Court of Appeals, x x x, this Court held
that the fact of sequestration alone did not automatically oust the RTC of jurisdiction to decide upon the question of
ownership of the disputed gaming and office equipment as PCGG must be a party to the suit in order that the
Sandiganbayan�s exclusive jurisdiction may be correctly invoked, and as Section 2 of EO 14 was duly applied in PCGG v.
Pe�aand PCGG v. Nepomuceno, which ineluctably spoke of respondent PCGG as a party-litigant.

xxxx

Sandiganbayan has exclusive jurisdiction over the instant case

A rigorous examination of the antecedent facts and existing records at hand shows that Sandiganbayan has exclusive
jurisdiction over the instant case.

Thus, the petition must fail for the following reasons: Law lib raryofCRAlaw

First, it is a fact that the shares of stock of UHC and CDCP, the subject matter of Civil Case No. 91-2721 before the Makati
City RTC, were also the subject matter of an ill-gotten wealth case, specifically Civil Case No. 0016 before the
Sandiganbayan. In Civil Case No. 91-2721 of the Makati City RTC, petitioners prayed for a judgment either transferring the
UHC shares or restoring and reconveying the PNCC shares to them. In the event a final judgment is rendered in said Makati
City RTC case in favor of petitioners, then such adjudication tends to render moot and academic the judgment to be rendered
in Sandiganbayan Civil Case No. 0016 considering that the legal ownership of either the UHC or PNCC shares would now be
transferred to petitioners Rodolfo Cuenca and CIC. Such adverse judgment would run counter to the rights of ownership of
the government over the UHC and PNCC shares in question. x x x

Moreover, inasmuch as UHC was impleaded in Civil Case No. 0016 as a defendant and was listed among the
corporations beneficially owned or controlled by petitioner Cuenca, the issue of the latter�s right to acquire
ownership of UHC shares is inexorably intertwined with the right of the Republic of the Philippines, through
PCGG, to retain ownership of said UHC shares.

It must be borne in mind that the Sandiganbayan was created in 1978 pursuant to Presidential Decree No. (PD) 1606.� Said
law has been amended during the interim period after the Edsa Revolution of 1986 and before the 1987 Constitution was
drafted, passed, and ratified. Thus, the executive issuances during such period before the ratification of the 1987
Constitution had the force and effect of laws. Specifically, then President Corazon C. Aquino issued the following Executive
Orders which amended PD 1606 in so far as the jurisdiction of the Sandiganbayan over civil and criminal cases instituted and
prosecuted by the PCGG is concerned, viz: Lawl ibra ryofCRAlaw

xxxx

Bearing on the jurisdiction of the Sandiganbayan over cases of ill-gotten wealth, EO 14, Secs. 1 and 2 provide: Lawli bra ryofCRAl aw

SECTION 1. Any provision of the law to the contrary notwithstanding, the Presidential Commission on Good
Government with the assistance of the Office of the Solicitor General and other government agencies, is
hereby empowered to file and prosecute all cases investigated by it under Executive Order No. 1, dated February
28, 1986 and Executive Order No. 2, dated March 12, 1986, as may be warranted by its findings.

SECTION 2. The Presidential Commission on Good Government shall file all such cases, whether civil or criminal, with the
Sandiganbayan, which shall have exclusive and original jurisdiction thereof. (Emphasis supplied.)
Notably, these amendments had been duly recognized and reflected in subsequent amendments to PD 1606, specifically
Republic Act Nos. 7975 and 8249.

In the light of the foregoing provisions, it is clear that it is the Sandiganbayan and not the Makati City RTC that
has jurisdiction over the disputed UHC and PNCC shares, being the alleged �ill-gotten wealth� of former
President Ferdinand E. Marcos and petitioner Cuenca. The fact that the Makati City RTC civil case involved the

135
performance of contractual obligations relative to the UHC shares is of no importance. The benchmark is whether said
UHC shares are alleged to be ill-gotten wealth of the Marcoses and their perceived cronies. More importantly,
the interests of orderly administration of justice dictate that all incidents affecting the UHC shares and PCGG�s
right of supervision or control over the UHC must be addressed to and resolved by the Sandiganbayan. Indeed,
the law and courts frown upon split jurisdiction and the resultant multiplicity of suits, which result in much lost time, wasted
effort, more expenses, and irreparable injury to the public interest.

Second, the UHC shares in dispute were sequestered by respondent PCGG. Sequestration is a provisional remedy or
freeze order issued by the PCGG designed to prevent the disposal and dissipation of ill-gotten wealth. The power to sequester
property means to
place or cause to be placed under [PCGG�s] possession or control said property, or any building or office wherein any such
property or any records pertaining thereto may be found, including business enterprises and entities, for the purpose of
preventing the destruction of, and otherwise conserving and preserving the same, until it can be determined, through
appropriate judicial proceedings, whether the property was in truth ill-gotten. (Silverio v. PCGG, 155 SCRA 60 [1987]).

Considering that the UHC shares were already sequestered, enabling the PCGG to exercise the power of
supervision, possession, and control over said shares, then such power would collide with the legal custody of
the Makati City RTC over the UHC shares subject of Civil Case No. 91-2721. Whatever the outcome of Civil Case No.
91-2721, whether from enforcement or rescission of the contract, would directly militate on PCGG�s control and
management of IRC and UHC, and consequently hamper or interfere with its mandate to recover ill-gotten wealth. As aptly
pointed out by respondents, petitioners� action is inexorably entwined with the Government�s action for the
recovery of ill-gotten wealth � the subject of the pending case before the Sandiganbayan. Verily, the transfer of
shares of stock of UHC to petitioners or the return of the shares of stock of CDCP (now PNCC) will wreak havoc on the
sequestration case as both UHC and CDCP are subject of sequestration by PCGG.

Third, Philippine Amusement and Gaming Corporation and Holiday Inn (Phils.), Inc. are not analogous to the case at bar. The
first dealt with ownership of gaming and office equipment, which is distinct from and will not impact on the sequestration
issue of PCOC. The second dealt with an ordinary civil case for performance of a contractual obligation which did not in any
way affect the sequestration proceeding of NRHDCI; thus, the complaint-in-intervention of Holiday Inn (Phils.), Inc. was
properly denied for lack of jurisdiction over the subject matter.

In both cases cited by petitioners, there was a substantial distinction between the sequestration proceedings
and the subject matter of the actions. This does not prevail in the instant case, as the ownership of the shares of
stock of the sequestered companies, UHC and CDCP, is the subject matter of a pending case and thus addressed
to the exclusive jurisdiction of the Sandiganbayan.

Sec. 2 of EO 14 pertinently provides: �The Presidential Commission on Good Government shall file all such cases, whether
civil or criminal, with the Sandiganbayan, which shall have exclusive and original jurisdiction thereof.�

The above proviso has been squarely applied in Pe�a, where this Court held that the exclusive jurisdiction conferred on the
Sandiganbayan would evidently extend not only to the principal causes of action, that is, recovery of alleged ill-gotten
wealth, but also to all incidents arising from, incidental to, or related to such cases, including a dispute over the sale of the
shares, the propriety of the issuance of ancillary writs of relative provisional remedies, and the sequestration of the shares,
which may not be made the subject of separate actions or proceedings in another forum. Indeed, the issue of the
ownership of the sequestered companies, UHC and PNCC, as well as IRC�s ownership of them, is undeniably
related to the recovery of the alleged ill-gotten wealth and can be squarely addressed via the exclusive
jurisdiction of the Sandiganbayan.

Fourth, while it is clear that the exclusive jurisdiction of the Sandiganbayan only encompasses cases where PCGG is
impleaded, such requirement is satisfied in the instant case. The appellate court clearly granted PCGG�s petition for
certiorari in CA-G.R. SP No. 49686, assailing the trial court�s denial of its Motion for Leave to Intervene with Motion to
Dismiss. Thus, the trial court�s April 20, 1998 Order was reversed and set aside by the appellate court through its assailed
Decision. Consequently, PCGG was granted the right to intervene and thus became properly impleaded in the
instant case. Without doubt, the trial court has no jurisdiction to hear and decide Civil Case No. 91-2721.37 (Additional
emphasis supplied)

In the light of the foregoing, it is clear that the Sandiganbayan has exclusive jurisdiction over the subject matter of Civil Case
Nos. 12-1251 and 12-1252.

First, the subject matters of respondents� petitions in Civil Case Nos. 0033-A and 0033-F filed by the PCGG against Eduardo
M. Cojuangco, et al. are the same, i.e., the ownership of� CIIF companies and CIIF SMC Block of Shares, which were
claimed by the Government as acquired by the defendants using public funds (coco levy funds). In the interest of orderly
administration of justice and the policy against multiplicity of suits, it is but proper that all incidents affecting the coconut
levy funds and assets be addressed and resolved by the Sandiganbayan. Claims of ownership of a portion of the subject CIIF
companies and SMC shares by private entities such as UCPB and COCOLIFE are inextricably related to the aforementioned ill-
gotten wealth cases filed in the Sandiganbayan.
136
Second, UCPB, along with the CIIF companies and CIIF SMC Block of Shares, were duly sequestered by the PCGG and had
been under the latter�s administration for more than 25 years.� With the final determination made by this Court
in COCOFED v. Republic that these properties unquestionably belong to the Government as they were acquired using the
coconut levy funds, the PCGG can now exercise full acts of ownership as evident from the latest executive issuance, EO 180,
by President Benigno Simeon C. Aquino III.

Third, aside from their sequestration by PCGG, the ownership of the aforesaid assets is the subject matter in both Civil Case
Nos. 12-1251 and 12-1252 filed in the RTC and Civil Case Nos. 0033-A and 0033-F in the Sandiganbayan.� Respondents�
assertion that the subject matter of their petitions for declaratory relief is different due to private funds used in buying
shares in UCPB and CIIF oil mills is but a feeble attempt to create an exception to the Sandiganbayan�s exclusive
jurisdiction.� As underscored in Cuenca v. PCGG,38 the benchmark is whether such shares of UCPB and CIIF oil mills are
alleged to be ill-gotten wealth of the Marcoses and their perceived cronies, which is sufficient to bring the case within the
exclusive jurisdiction of the Sandiganbayan pursuant to existing laws and decrees.

Fourth, the requirement in Pe�a and Nepomuceno that the PCGG must be a party to the suit in order to invoke the
Sandiganbayan�s exclusive jurisdiction was satisfied in this case. PCGG was impleaded as co-defendant in Civil Case Nos.
12-1251 and 12-1252.� It even filed a motion to dismiss in both cases and appealed from the denial of said motions by
respondent judge. Thus, while the Republic itself was not impleaded in the petitions for declaratory relief, PCGG was formally
made a party thereto.

Applicability of Res Judicata

The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction is
conclusive as to� the rights of the parties and their privies and constitutes� an absolute bar to subsequent actions�
involving the same claim, demand, or cause of action.39 The following requisites must obtain for the application of the
doctrine: (1) the former judgment or order must be final; (2) it must be a judgment or order on the merits, that is, it was
rendered after a consideration of the evidence or stipulations submitted by the parties at the trial of the case; (3) it must
have been rendered by a court having jurisdiction over the subject matter and the parties; and (4) there must be, between
the first and second actions, identity of parties, of subject matter and of cause of action. This requisite is satisfied if the two
actions are substantially between the same parties.40 redarc law

There is no question regarding compliance with the first, second and third requisites.� However, respondents maintain that
while they adhere to the Decision in COCOFED v. Republic, said decision did not affect their right or title to the subject
properties since the subject matter in their petitions for declaratory relief is not the coconut levy funds but their own
private funds used by them in purchasing shares from UCPB and CIIF companies, that in turn resulted in their indirect
ownership of the CIIF SMC Block of Shares in their respective proportions: 11.03% (UCPB) and 11.01% (COCOLIFE).

Respondents further assert that they are not bound by the adjudication of ownership in COCOFED v. Republic considering
that they were not impleaded as defendants in Civil Case Nos. 0033-A and 0033-F.

We disagree.

In Universal Broadcasting Corporation v. Sandiganbayan (5th Div.),41 we reiterated that it is not necessary to implead
companies which are the res of suits for recovery of ill-gotten wealth.� We held that �

Petitioner submits that the Sandiganbayan never acquired jurisdiction over it as it was not impleaded as a party-defendant in
Civil Case No. 0035.

The submission has no merit.

The Price Mansion property is an asset alleged to be ill-gotten. Like UBC, it is listed as among the properties of Benjamin
Romualdez. For sure, UBC is among the corporations listed as alleged repositories of shares of stock controlled by
Romualdez.

In Republic v. Sandiganbayan, the Court held that there is no need to implead firms which are merely the res of the
actions in ill-gotten wealth cases and that judgment may simply be directed against the assets, thus: LawlibraryofCR Alaw

C. Impleading Unnecessary Re Firms which are the Res of the Actions

And as to corporations organized with ill-gotten wealth, but are not themselves guilty of misappropriation, fraud or other
illicit conduct � in other words, the companies themselves are the object or thing involved in the action, the res thereof -
there is no need to implead them either.� Indeed, their impleading is not proper on the strength alone of their having
been formed with ill-gotten funds, absent any other particular wrongdoing on their part. The judgment may simply be
directed against the shares of stock shown to have been issued in consideration of ill-gotten wealth. x x x

137
x x x In this light, they are simply the res in the actions for the recovery of illegally acquired wealth, and there is, in
principle, no cause of action against them and no ground to implead them as defendants in said actions. x x x 42� (Additional
emphasis supplied)

The doctrine of res judicata has two aspects.� The first, known as �bar by prior judgment,� or �estoppel by verdict,� is
the effect of a judgment as a bar to the prosecution of a second action upon the same claim, demand or cause of action.�
The second, known as �conclusiveness of judgment,� otherwise known as the rule of auter action pendent, ordains that
issues actually and directly resolved in a former suit cannot again be raised in any future case between the same parties
involving a different cause of action.43 redarclaw

[C]onclusiveness of judgment � states that a fact or question which was in issue in a former suit and there was judicially
passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as
the parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action
between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or
different cause of action, while the judgment remains unreversed by proper authority. It has been held that in order that a
judgment in one action can be conclusive as to a particular matter in another action between the same parties or their
privies, it is essential that the issue be identical. If a particular point or question is in issue in the second action,
and the judgment will depend on the determination of that particular point or question, a former judgment
between the same parties or their privies will be final and conclusive in the second if that same point or
question was in issue and adjudicated in the first suit. Identity of cause of action is not required but merely
identity of issues.44� (Emphasis and italics supplied)

We have applied the doctrine of conclusiveness of judgment in a previous case involving ownership of shares of stock in a
sequestered corporation, as follows: Law lib raryofCRAlaw

In cases wherein the doctrine of �conclusiveness of judgment� applies, there is, as in Civil Case No. 0034 and Civil Case No.
0188 identity of issues not necessarily identity of causes of action. The prior adjudication of the Sandiganbayan
affirmed by this Court in G.R. No. 140615, as to the ownership of the 1/7 Piedras shares of Arambulo, is
conclusive in the second case, as it has been judicially resolved.

The filing of Civil Case No. 0188, although it has a different cause of action from Civil Case No. 0034, will not enable the
PCGG to escape the operation of the principle of res judicata.� A case litigated once shall not be relitigated in another action
as it would violate the interest of the State to put an end to litigation � republicae ut sit litium and the policy that no man
shall be vexed twice for the same cause � nemo debet bis vexari et eadem causa. Once a litigant�s rights had been
adjudicated in a valid final judgment by a competent court, he should not be granted an unbridled license to come back for
another try.45� (Additional italcis and emphasis supplied)

We hold that res judicata under the second aspect (conclusiveness of judgment) is applicable in this case.� The issue of
ownership of the sequestered CIIF companies and CIIF SMC Block of Shares was directly and actually resolved by the
Sandiganbayan and affirmed by this Court in COCOFED v. Republic.� More important, in the said decision, we categorically
affirmed the resolutions issued by the Sandiganbayan in Civil Case Nos. 0033-A and 0033-F �THAT THERE IS NO MORE
NECESSITY OF FURTHER TRIAL WITH RESPECT TO THE ISSUE OF OWNERSHIP OF (1) THE SEQUESTERED UCPB SHARES, (2)
THE CIIF BLOCK OF SMC SHARES, AND (3) THE CIIF COMPANIES, AS THEY HAVE FINALLY BEEN ADJUDICATED IN THE
AFOREMENTIONED PARTIAL SUMMARY JUDGMENTS DATED JULY 11, 2003 AND MAY 7, 2004.� Among the admitted facts set
forth in the Order dated February 23, 2004 is the acquisition by UCPB of the �controlling interests� in the six CIIF oil
mills.� The Partial Summary Judgment further quoted from the Answer to Third Amended Complaint (Subdivided) with
Compulsory Counterclaims dated January 7, 2000 filed by the CIIF oil mills and 14 holding companies, in which they also
alleged that pursuant to the authority granted to it by P.D. 961 and P.D. 1568, �UCPB acquired controlling interests� in
the six CIIF oil mills.46
reda rc law

In the same decision we specifically upheld the Sandiganbayan�s findings and conclusion on the issue of ownership of the
CIIF OMG, the 14 holding companies and the CIIF SMC Block of Shares, viz.: Lawlib raryofCRAlaw

The CIIF Companies and the CIIF Block


of SMC shares are public funds/assets

From the foregoing discussions, it is fairly established that the coconut levy funds are special public funds.
Consequently, any property purchased by means of the coconut levy funds should likewise be treated as public
funds or public property, subject to burdens and restrictions attached by law to such property.

In this case, the 6 CIIF Oil Mills were acquired by the UCPB using coconut levy funds. On the other hand, the 14
CIIF holding companies are wholly owned subsidiaries of the CIIF Oil Mills. Conversely, these companies were
acquired using or whose capitalization comes from the coconut levy funds. However, as in the case of UCPB, UCPB itself
distributed a part of its investments in the CIIF oil mills to coconut farmers, and retained a part thereof as administrator. The
portion distributed to the supposed coconut farmers followed the procedure outlined in PCA Resolution No. 033-78.� And as
138
the administrator of the CIIF holding companies, the UCPB authorized the acquisition of the SMC shares. In fact, these
companies were formed or organized solely for the purpose of holding the SMC shares. As found by the Sandiganbayan, the
14 CIIF holding companies used borrowed funds from the UCPB to acquire the SMC shares in the aggregate amount of
P1.656 Billion.

Since the CIIF companies and the CIIF block of SMC shares were acquired using coconut levy funds � funds, which have
been established to be public in character � it goes without saying that these acquired corporations and assets ought to be
regarded and treated as government assets. Being government properties, they are accordingly owned by the Government,
for the coconut industry pursuant to currently existing laws.

It may be conceded hypothetically, as COCOFED, et al. urge, that the 14 CIIF holding companies acquired the SMC shares in
question using advances from the CIIF companies and from UCPB loans. But there can be no gainsaying that the same
advances and UCPB loans are public in character, constituting as they do assets of the 14 holding companies, which in turn
are wholly-owned subsidiaries of the 6 CIIF Oil Mills. And these oil mills were organized, capitalized and/or financed
using coconut levy funds. In net effect, the CIIF block of SMC shares are simply the fruits of the coconut levy funds
acquired at the expense of the coconut industry. In Republic v. COCOFED, the en bancCourt, speaking through Justice (later
Chief Justice) Artemio Panganiban, stated: �Because the subject UCPB shares were acquired with government funds, the
government becomes their prima facie beneficial and true owner.�� By parity of reasoning, the adverted block of SMC
shares, acquired as they were with government funds, belong to the government as, at the very least, their beneficial and
true owner.

We thus affirm the decision of the Sandiganbayan on this point. But as We have earlier discussed, reiterating our holding
in Republic v. COCOFED, the State�s avowed policy or purpose in creating the coconut levy fund is for the development of
the entire coconut industry, which is one of the major industries that promotes sustained economic stability, and not merely
the livelihood of a significant segment of the population. Accordingly, We sustain the ruling of the Sandiganbayan in CC
No. 0033-F that the CIIF companies and the CIIF block of SMC shares are public funds necessarily owned by the
Government. We, however, modify the same in the following wise: These shares shall belong to the
Government, which shall be used only for the benefit of the coconut farmers and for the development of the
coconut industry.47 (Emphasis and underscoring supplied)

In G.R. No. 180705, separately decided by this Court on November 27, 2012, we also affirmed the Sandiganbayan�s
decision nullifying the shares of stock transfer to Eduardo M. Cojuangco, Jr.� We held that as the coconut levy funds partake
of the nature of taxes and can only be used for public purpose, and importantly, for the purpose for which it was exacted,
i.e., the development, rehabilitation and stabilization of the coconut industry, they cannot be used to benefit��whether
directly or indirectly��private individuals, be it by way of a commission, or as the PCA-Cojuangco Agreement words it,
compensation. Accordingly, the UCPB shares of stock representing the 7.22% fully paid shares subject of the petition, with
all dividends declared, paid or issued thereon, as well as any increments thereto arising from, but not limited to, the exercise
of pre-emptive rights, were ordered reconveyed to the Government of the Republic of the Philippines, which shall �be used
only for the benefit of all coconut farmers and for the development of the coconut industry.�48 redarc law

Having resolved that subject matter jurisdiction pertains to the Sandiganbayan and not the RTC, and that the petitions for
declaratory relief are barred by our January 24, 2012 Decision which settled with finality the issue of ownership of the CIIF
oil mills, the 14 holding companies and CIIF SMC Block of Shares, we deem it unnecessary to address the other issues
presented.

WHEREFORE, the petitions are GRANTED. The Orders dated April 29, 2013 and June 28, 2013 in Civil Case No. 12-1251;
and Omnibus Order dated May 15, 2013 (Branch 138) and Order dated December 4, 2013 in Civil Case Nos. 12-1251 and
12-1252 (consolidated petitions) of the� Regional Trial Court of Makati City, Branch 59, are hereby ANNULLED and SET
ASIDE.� The petitions in Civil Case Nos. 12-1251 and 12-1252 filed by UCPB and COCOLIFE, respectively, are DISMISSED.

No pronouncement as to costs.

SO ORDERED. cralawlawlibra ry

139
SECOND DIVISION

A.M. No. SCC-13-18-J (Formerly A.M. OCA IPI No. 11-36-SCC), July 01, 2015

BAGUAN M. MAMISCAL, Complainant, v. CLERK OF COURT MACALINOG S. ABDULLAH, SHARI'A CIRCUIT COURT,
MARAWI CITY, Respondent.

DECISION

MENDOZA, J.:

This resolves the complaint1 of Baguan M. Mamiscal (Mamiscal) against respondent Macalinog S. Abdullah (Abdullah), Clerk
of Court, Shari'a Circuit Court, Marawi City, for partiality, violation of due process, dishonesty, and conduct unbecoming of a
court employee. Originally, the complaint also charged Judge Aboali J. Cali (Judge Cali), Presiding Judge, Shari'a Circuit
Court, Marawi City, for his participation in the subject controversy. On January 9, 2013, the Court resolved to dismiss the
charges against Judge Cali for lack of merit.2 ChanRobles Vi rtua lawlib rary

The Facts

In his complaint, Mamiscal averred that on September 26, 2010, he and his wife, Adelaidah Lomondot (Adelaidah) had a
heated argument. In a fit of anger, Mamiscal decided to divorce his wife by repudiating her (talaq).3 The repudiation was
embodied in an agreement4 (kapasadan) signed by Mamiscal and Adelaidah.

The next day, Adelaidah left their conjugal dwelling in Iligan City and went back to her family's home in Marinaut, Marawi
City. A few days later, during the obligatory period of waiting ('iddah),5 Mamiscal had a change of heart and decided to make
peace with his wife. For the purpose, he sent their common relatives to see Adelaidah and make peace with her on his
behalf.6
ChanRobles Vi rtualawl ib rary

Almost five (5) months later, however, on February 23, 2011, Adelaidah filed7 the Certificate of Divorce (COD),8 dated
September 26, 2010, with the office of Abdullah for registration. Although unsigned, the certificate, purportedly executed by
Mamiscal, certified that he had pronounced talaq in the presence of two (2) witnesses and in accordance with Islamic Law for
the purpose of effecting divorce from Adelaidah. A notation on the certificate stated that it was being filed together with
the kapasadan.

On the same day, Abdullah, in the exercise of his duty as both Clerk of Court and Circuit Civil Registrar,9issued the
Invitation10 notifying the couple and their representatives to appear before the Shari'a Circuit Court on February 28, 2011, in
order to constitute the Agama Arbitration Council (AAC) that would explore the possibility of reconciling the spouses.11 ChanRobles Virtualawl ibra ry

On March 24, 2011, Abdullah issued the Certificate of Registration of Divorce12 (CRD) finalizing the divorce between Mamiscal
and Adelaidah.

Mamiscal sought the revocation of the CRD, questioning the validity of the kapasadan on which the CRD was based. In his
motion, Mamiscal contended that the kapasadan was invalid considering that he did not prepare the same. Moreover, there
were no witnesses to its execution. He claimed that he only signed the kapasadan because of Adelaidah's threats.

Mamiscal also questioned the validity of the COD, denying that he had executed and filed the same before the office of
Abdullah. Insisting that he never really intended to divorce his wife, Mamiscal pointed out the fact that on December 13,
2010, before the expiration of the 'iddah, he wrote his wife13 to inform her that he was revoking the repudiation he made on
September 26, 2010 and the kapasadan they entered into on the same day because he did it on the "spur of the
moment."14 ChanRoblesVi rtua lawlib rary

For Mamiscal, the CRD should be declared invalid considering that: a) he was deprived of due process because the AAC,
before which he and his children were supposed to express their sentiments regarding the divorce, was yet to be constituted;
b) three days before the issuance of the CRD, Professor Mustafa Lomala M. Dimaro, appeared before Judge Cali to discuss
the possibility of reconciliation between the parties; and c) their children, Adelah Rima and Nairn Mamiscal, prayed that the
trial court advise their mother not to proceed with the divorce.15 In addition to the revocation of the CRD, Mamiscal also
prayed that Abdullah order the reconvening of the AAC and, thereafter, grant the restoration of his marital rights with
Adelaidah.

On April 20, 2011, Abdullah denied Mamiscal's motion.16 In sustaining the divorce between Mamiscal and Abdullah, Abdullah
opined that it was simply his ministerial duty to receive the COD and the attached kapasadan filed by Adelaidah. Abdullah
also noted that when the AAC was convened during the February 28, 2010 hearing, only Mamiscal and his representatives

140
appeared. Considering the fact that Adelaidah manifested her opposition in writing to any reconciliation with her husband and
the fact that the 90-day period of 'iddah had already lapsed, Abdullah ruled that any move to reconstitute the AAC would
have been futile because the divorce between Mamiscal and his wife had already become final and irrevocable.

Contending that the issuance of the CRD was tainted with irregularity, Mamiscal comes to this Court, through the subject
complaint, charging Abdullah with partiality, violation of due process, dishonesty, and conduct unbecoming of a court
employee.

The Charge

In his complaint, Mamiscal averred that Abdullah should not have entertained or acted upon the COD and the kapasadan filed
by Adelaidah. He contended that under the Code of Muslim Personal Laws, a divorce under talaq could only be filed and
registered by the male spouse, considering that female Muslims could do so only if the divorce was through tafwid.17 ChanRoble sVirt ualawli bra ry

Moreover, Mamiscal alleged that Abdullah "fabricated and twisted the facts"18 when he declared that only Mamiscal and his
representative appeared when the AAC was convened. Mamiscal insisted that Adelaidah and her relatives were also present
during the hearing of February 28, 2010, and that the AAC was never convened because the parties agreed to reset the
proceedings so that they could explore the possibility of reconciling the differences between them. Notwithstanding the
ongoing mediation proceedings, Abdullah proceeded to act on the COD and finalized the divorce by issuing the CRD.

Finally, it was averred that Abdullah violated the Shari'a rules of procedure when he initially refused to receive Mamiscal's
motion for reconsideration when it was first filed. Mamiscal also argued that Abdullah should not have considered the
opposition of Adelaidah when he denied his attempt to seek reconsideration because he was never furnished a copy of
Adelaidah's opposition.

Abdullah's Comment

In his comment,19 Abdullah countered that although he had the authority to process the registration of the divorce as court
registrar, he could not be held responsible for the contents of the COD and the kapasadan because his functions were only
ministerial. Nevertheless, Abdullah asserted that the divorce between Mamiscal and Adelaidah had already attained finality,
not only because of the lapse of the required 'iddah, but also because the kapasadan and Adelaidah's opposition both proved
that there could be no reconciliation between the spouses.

Abdullah also discounted any impropriety for processing the unsigned COD, arguing that since it was accompanied by
the kapasadan which bore the signature of Mamiscal and his declaration that he was divorcing his wife by talaq - there was
nothing wrong with Adelaidah filing it with his office. Moreover, with the lapse of the 'iddah, Abdullah argued that the COD
had remained to be nothing more than a formality for the purpose of registering the divorce with the National Statistics
Office (NSO) and its issuance using the NSO security paper.

As to the allegations pertaining to the February 28, 2010 hearing, Abdullah stated that he only conducted the same because
it was required under the Muslim Personal Code. Abdullah explained that he did not convene the ACC anymore not only
because Adelaidah or her representatives were not present, but also because the divorcing couple's own children wrote to
him opposing the convening of the council.

As to Mamiscal's contention that he already revoked his repudiation of his wife, Abdullah pointed out that his office was not
informed of any revocation of the divorce. According to Abdullah, if Mamiscal had indeed revoked his repudiation, he should
have complied with the provisions of Rule II (1)(2) of NSO Administrative Order No. 1, series of 2001, which required the
husband to file five (5) copies of his sworn statement attesting to the fact of revocation, together with the written consent of
his wife.

In its report,20 the Office of the Court Administrator (OCA) found Abdullah guilty of gross ignorance of the law and
recommended that he be fined in the amount of P10,000.00 with a stern warning that a repetition of the same offense shall
be dealt with severely.

On January 30, 2014, Abdullah filed a motion,21 praying for the early resolution of the complaint filed against him.
Reiterating his plea for the dismissal of the said complaint, Abdullah claimed that he was due for compulsory retirement on
June 5, 2014. chanrob leslaw

The Court's Ruling

At the outset, it must first be pointed out that while it may seem to be a related issue, the validity of the divorce between
Mamiscal and Adelaidah is not in issue here. Whether or not Mamiscal had validly effected a divorce from his wife is a matter
that must first be addressed by the Shari'a Circuit Court which, under the Code of Muslim Personal Laws of the Philippines
(Muslim Code),22 enjoys exclusive original jurisdiction to resolve disputes relating to divorce.

Thus, Article 155 of the Muslim Code provides:


chanRoble svirtual Lawlib ra ry

141
Article 155. Jurisdiction. The Shari'a Circuit Courts shall have exclusive original jurisdiction over;

(1) All cases involving offenses defined and punished under this Code.

(2) All civil actions and proceedings between parties who are Muslims or have been married in accordance with Article 13
involving disputes relating to:

(a) Marriage;

(b) Divorce recognized under this Code;

(c) Betrothal or breach of contract to marry;

(d) Customary dower (mahr);

(e) Disposition and distribution of property upon divorce;

(f) Maintenance and support, and consolatory gifts, (mut'a); and

(g) Restitution of marital rights.

(3) All cases involving disputes relative to communal properties.

[Emphases Supplied]
Consequently, in resolving the subject complaint, the Court shall confine itself to the sole issue of whether or not Abdullah
should be held administratively liable for his actions in connection with the registration of the divorce between Mamiscal and
Adelaidah. A priori to the resolution of the foregoing issue is the question of whether this Court has jurisdiction to impose
administrative sanction against Abdullah for his acts.

The Court rules in the negative.

The civil registrar is the person charged by law for the recording of vital events and other documents affecting the civil status
of persons. The Civil Registry Law embraces all acts of civil life affecting the status of persons and is applicable to all persons
residing in the Philippines.23 Chan RoblesVirt ualawli bra ry

To ensure the proper registration of all facets of the civil life of Muslim Filipinos throughout the country, Article 81 of the
Muslim Code provides:
chanRoble svirtual Lawlib ra ry

Article 81. District Registrar. The Clerk of Court of the Shari' a District Court shall, in addition to his regular functions, act as
District Registrar of Muslim Marriages, Divorces, Revocations of Divorces, and Conversions within the territorial jurisdiction of
said court. The Clerk of Court of the Shari'a Circuit Court shall act as Circuit Registrar of Muslim Marriages,
Divorces, Revocations of Divorces, and Conversions within his jurisdiction.

[Emphasis Supplied]
In view of the above-quoted provision, it becomes apparent that the Clerk of Court of the Shari'a Circuit Court enjoys the
privilege of wearing two hats: first, as Clerk of Court of the Shari'a Circuit Court, and second, as Circuit Registrar within his
territorial jurisdiction. Although the Constitution vests the Court with the power of administrative supervision over all courts
and its personnel,24 this power must be taken with due regard to other prevailing laws.

Thus, Article 185 of the Muslim Code provides:


chanRoble svirtual Lawlib ra ry

Article 185. Neglect of duty by registrars. Any district registrar or circuit registrar who fails to perform properly his duties in
accordance with this Code shall be penalized in accordance with Section 18 of Act 3753.
chanroblesv irt uallawl ibra ry

Commonwealth Act (C.A.) No. 375325 is the primary law that governs the registry of civil status of persons. To ensure that
civil registrars perform their duties under the law, Section 18 of C.A. No. 3753 provides:
chanRoble svirtual Lawlib ra ry

Section 18. Neglect of duty with reference to the provisions of this Act. � Any local registrar who fails to properly perform
his duties in accordance with the provisions of this Act and of the regulations issued hereunder, shall be punished for the first
offense, by an administrative fine in a sum equal to his salary for not less than fifteen days nor more than three months, and
for a second or repeated offense, by removal from the service.

[Emphasis Supplied]
The same Act provides:
chanRoble svirtual Lawlib ra ry

Section 2. Civil Registrar-General his duties and powers. - The director of the National Library shall be Civil Registrar-General
and shall enforce the provisions of this Act. The Director of the National Library, in his capacity as Civil Registrar-General, is
hereby authorized to prepare and issue, with the approval of the Secretary of Justice, regulations for carrying out the

142
purposes of this Act, and to prepare and order printed the necessary forms for its proper compliance. In the exercise of his
functions as Civil Registrar-General, the Director of the National Library shall have the power to give orders and instructions
to the local Civil registrars with reference to the performance of their duties as such. It shall be the duty of the Director of
the National Library to report any violation of the provisions of this Act and all irregularities, negligence or
incompetency on the part of the officers designated as local civil registrars to the (Chief of the Executive Bureau
or the Director of the Non-Christian Tribes) Secretary of the Interior, as the case may be, who shall take the
proper disciplinary action against the offenders.

[Emphasis and Underscoring Supplied]


Prescinding from the foregoing, it becomes apparent that this Court does not have jurisdiction to impose the proper
disciplinary action against civil registrars. While he is undoubtedly a member of the Judiciary as Clerk of Court of the
Shari'a Circuit Court, a review of the subject complaint reveals that Mamiscal seeks to hold Abdullah liable for registering the
divorce and issuing the CRD pursuant to his duties as Circuit Registrar of Muslim divorces. It has been said that the
test of jurisdiction is the nature of the offense and not the personality of the offender.26 The fact that the complaint charges
Abdullah for "conduct unbecoming of a court employee" is of no moment. Well-settled is the rule that what controls is not the
designation of the offense but the actual facts recited in the complaint. Verily, unless jurisdiction has been conferred by some
legislative act, no court or tribunal can act on a matter submitted to it.27 ChanRoble sVirt ualawli bra ry

It bears to stress at this point that this Court can resolve the foregoing jurisdictional issue even if the matter of jurisdiction
was never raised by any of the parties. Jurisprudence is replete with rulings that jurisdiction, or the power and authority of a
court to hear, try and decide a case must first be acquired by the court or an adjudicative body over the subject matter and
the parties in order to have authority to dispose of the case on the merits.28 Elementary is the distinction between
jurisdiction over the subject matter and jurisdiction over the person. Jurisdiction over the subject matter is conferred by the
Constitution or by law. In contrast, jurisdiction over the person is acquired by the court by virtue of the party's voluntary
submission to the authority of the court or through the exercise of its coercive processes. Jurisdiction over the person is
waivable unlike jurisdiction over the subject matter which is neither subject to agreement nor conferred by consent of the
parties.29 ChanRobles Vi rt ualawlib ra ry

Having settled the foregoing issue, the following question now confronts the Court: Who, among the various agencies and
instrumentalities of the government, is empowered with administrative supervisory powers in order to impose disciplinary
sanctions against erring civil registrars?

On this score, a recap of the legislative history surrounding our system of civil registration is in order.

The system of civil registration was first established in the Philippines by the revolutionary government on June 18, 1898 or
barely six days after the declaration of the country's independence from Spain on June 12, 1898. Originally, the system was
decentralized in the sense that civil registration was purely a local government responsibility. It was only on February 27,
1931, when C.A. No. 375330 took effect and centralized the system of civil registration in the country. Under this law, the
director of the National Library was made responsible as the Civil Registrar-General to exercise technical supervision and
ensure the proper establishment and maintenance of our civil registry system.

Then, following C.A. No. 591,31 the duties exercised by the director of National Library with regard to matters concerning the
system of civil registration were transferred to the Bureau of Census and Statistics. This bureau subsequently became the
NSO,32 whose Administrator concurrently served as the Civil Registrar-General.33 At present, the National Statistician is
empowered by Republic Act (R.A.) No. 10625, as Civil Registrar-General to exercise technical supervision of civil
registrars.34 ChanRoble sVirtualawl ibra ry

Due to the need to address the cultural peculiarities practiced by our Muslim brethren, however, Congress saw the need to
designate the Clerk of Court of the Shari'a Circuit Court to act as the Circuit Registrar of Muslim marriages, divorces,
revocations of divorces, and conversions to Islam within his jurisdiction. As earlier cited, Article 181 of the Muslim Code
provides that: The Clerk of Court of the Shari'a Circuit Court shall act as Circuit Registrar of Muslim Marriages, Divorces,
Revocations of Divorces, and Conversions within his jurisdiction.

In order to ensure that Circuit Registrars remain faithful to their duties, Article 82 of the Muslim Code tasks the Clerks of
Court of the Shari'a District Court to act as District Registrars and exercise technical supervision over Circuit Registrars by
requiring them to keep a proper recording of all matters pertaining to the personal lives of Muslims. Thus:
chanRoble svirtual Lawlib ra ry

Article 82. Duties of District Registrar. Every District Registrar shall exercise supervision over Circuit Registrars in every
Shari'a District. He shall, in addition to an entry book, keep and bind copies of certificates of Marriage, Divorce,
Revocation of Divorce, and Conversion sent to him by the Circuit Registrars in separate general registers. He
shall send copies in accordance with Act. No. 3753, as amended, to the office of the Civil Registrar-General.
chanroblesv irt uallawl ibra ry

All these notwithstanding, the power of administrative supervision over civil registrars remains with the National
Government. As Section 2 of CA No. 3753 provides:
chanRoble svirtual Lawlib ra ry

Section 2. Civil Registrar-General his duties and powers. - The director of the National Library shall be Civil Registrar-General
and shall enforce the provisions of this Act. The Director of the National Library, in his capacity as Civil Registrar-General, is
hereby authorized to prepare and issue, with the approval of the Secretary of Justice, regulations for carrying out the

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purposes of this Act, and to prepare and order printed the necessary forms for its proper compliance. In the exercise of his
functions as Civil Registrar-General, the Director of the National Library shall have the power to give orders and instructions
to the local Civil registrars with reference to the performance of their duties as such. It shall be the duty of the Director of
the National Library to report any violation of the provisions of this Act and all irregularities, negligence or
incompetency on the part of the officers designated as local civil registrars to the (Chief of the Executive Bureau
or the Director of the Non-Christian Tribes) Secretary of the Interior, as the case may be, who shall take the
proper disciplinary action against the offenders.

[Emphasis Supplied]
It was only with the advent of the Local Government Code that the power of administrative supervision over civil registrars
was devolved to the municipal and city mayors of the respective local government units. Under the "faithful execution
clause" embodied in Section 455(b)(l)(x)35 and Section 444(b)(l)(x)36 of the Local Government Code, in relation to Section
47937 under Article IX, Title V38 of the same Code, the municipal and city mayors of the respective local government units, in
addition to their power to appoint city or municipal civil registrars are also given ample authority to exercise administrative
supervision over civil registrars. Thus, when Administrative Order No. 1, Series of 1993 of the Office of the Civil
Registrar-General (OCRG) was passed to implement CA No. 3753 it was declared:
chanRoble svirtual Lawlib ra ry

Rule 1. Duties and Powers of the Civil Registrar-General. - The Civil Registrar-General shall have the following duties and
powers:

a) To enforce the provisions of Act No. 3753;

b) To prepare and issue regulations for carrying out the purposes of Act No. 3753 and
other laws relative to civil registration, and to prepare and order printed the
necessary forms for its proper compliance;

c) To give orders and instructions to the city/municipal civil registrars with reference to
the performance of their duties as such; and

d) To report any violation of the provisions of Act No. 3753 and other laws on civil
registration, and all irregularities, negligence or incompetency of
city/municipal civil registrar to the concerned mayor who shall take the
proper disciplinary action against the offender.
This authority of the Mayor to exercise administrative jurisdiction over Circuit Registrars was also recognized generally, under
Section 47(2) of the Administrative Code of 1987,39 and specifically, under Rule 11 of Administrative Order No. 2, Series of
199340 of the OCRG, and the more recent Administrative Order No. 5, Series of 200541 of the same office, which applies
specially to the registration of acts and events concerning the civil status of Muslim Filipinos.

At this juncture, it should be remembered that the authority of the Mayor to exercise administrative supervision over C/MCRs
is not exclusive. The Civil Service Commission (CSC), as the central personnel agency of the government, has the power to
appoint and discipline its officials and employees and to hear and decide administrative cases instituted by or brought before
it directly or on appeal.42 Under Section 9 of the Revised Uniform Rules on Administrative Cases in the Civil Service, the CSC
is granted original concurrent jurisdiction over administrative cases. Thus:
chanRoble svirtual Lawlib ra ry

Section 9. Jurisdiction of Heads of Agencies. - The Secretaries and heads of agencies, and other instrumentalities, provinces,
cities and municipalities shall have original concurrent jurisdiction with the Commission over their respective officers and
employees. x x x
chanroblesv irt uallawl ibra ry

Consequently, it behooves the Court to also forward the subject complaint to the Office of the Mayor, Marawi City and to the
CSC for appropriate action.

WHEREFORE, the administrative matter against Macalinog S. Abdullah, Clerk of Court II, Shari'a Circuit Court, Marawi City,
for partiality, violation of due process, dishonesty, and conduct unbecoming a court employee is DISMISSED for lack of
jurisdiction, without prejudice. The complaint of Baguan M. Mamiscal against Macalinog S. Abdullah is hereby REFERRED to
the Office of the Mayor, Marawi City and the Civil Service Commission for appropriate action.

SO ORDERED. ChanRoblesVirtualawl ibra ry c ralawlawli bra ry

Carpio, (Chairperson), Bersamin,* Del Castillo, and Leonen, JJ., concur. chanrobles law

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JURISDICTION IN GENERAL

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