Republic of the Philippines to the agreed upon amount of P1,200.00.
The judgment of the
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-38736 May 21, 1984
FELIPE G. TAC-AN, petitioner,
vs.
HONORABLE COURT OF APPEALS and ELEUTERIO
ACOPIADO, MAXIMINO ACOPIADO, the SPOUSES JESUS
PAGHASIAN and PILAR LIBETARIO, respondents.
Liliano B. Neri for petitioner.
Vic T. Lacaya for private respondents.
ABAD SANTOS, J.:
The petitioner, Felipe G. Tac-An, is a lawyer whose services were
engaged by the brothers Eleuterio Acopiado and Maximino
Acopiado who were accused of frustrated murder and theft of
large cattle before the Municipal Court of New Piñan,
Zamboanga del Norte in March, 1960.
On April 4, 1960, Tac-An caused a document entitled, "Deed of
Quitclaim" to be thumb-marked by the Acopiado brothers
whereby for the sum of P1,200.00 representing his fees as their
lawyer in the criminal cases, they conveyed to him a parcel of
land with an area of three hectares. The document was
acknowledged before Notary Public Pacifico Cimafranca on the
same date who explained its contents to the Acopiados.
On April 6, 1960, or two days after the execution of the deed, the
Acopiados told Tac-An that they were terminating his services
because their wives and parents did not agree that the land be
given to pay for his services. They also said that they had hired
another lawyer, a relative, to defend them. But Tac-An continued
to represent them.
In the case for frustrated murder, the Acopiados were acquitted.
The cases for theft of large cattle were dismissed due to the
desistance of the complainants.
On April 2, 1961, Eleuterio sold his share of the land previously
conveyed to Tac-An to Jesus Paghasian and Pilar Libetario but
the latter did not take possession thereof.
In June, 1964, Tac-An appointed Irineo Villejo, a barrio captain,
as his overseer in the land. On July 2, 1964, Tac-An also secured
the approval of the Provincial Governor of Zamboanga del Norte
to the Deed of Quitclaim. And on October 7, 1964, Tac-An filed a
complaint against the Acopiado brothers, Paghasian and
Libetario in the CFI of Zamboanga del Norte. He prayed that he
be declared the owner of the land; that the sale made in favor of
Paghasian and owner Libetario be annulled; and that he be paid
damages, attorney's fees, etc.
The Court of First Instance decided in favor of Tac-An whereupon
the Acopiados, et al. appealed to the Court of Appeals.
The Court of Appeals voided the transfer of the land to Tac-An
but held that for his services in the criminal cases he was entitled
Court of Appeals reads as follows:
WHEREFORE, the judgment appealed from is
hereby reversed and set aside. In lieu thereof,
another one is rendered ordering the
defendants Acopiados to pay the plaintiff the
sum of P1,200.00 with interest at a legal rate
from the date of the finality of this judgment
until full payment thereof. No pronouncement
as to costs. (Rollo, pp. 40-41.)
Petitioner Tac-An prays that the decision of the Court of Appeals
be set aside and that the decision of the Court of First Instance
be upheld instead.
The petition is not impressed with merit.
The Court of Appeals found as a fact that the Acopiado brothers
fully understood the tenor of the Deed of Quitclaim which they
executed. But the Court of Appeals also found as a fact that the
Acopiado brothers are Non-Christians, more specifically
Subanons, and that each is married to a Subanon. And because
they are Non-Christians, the Court of Appeals applied Section
145 of the Administrative Code of Mindanao and Sulu which
reads as follows:
Sec. 145. Contracts with Non-Christians requisites.
-- Save and except contracts of sale or barter of personal
property and contracts of personal service comprehended
in chapter seventeen hereof no contract or agreement
shall be made in the Department by any person with any
Moro or other non-Christian tribe or portion thereof the
Department or with any individual Moro or other non-
Christian inhabitants of the same for the payment or
delivery of money or other things of value in present or in
prospective, or in the manner affecting or relating to any
real property, unless such contract or agreement be
executed and approved as follows:
xxx xxx xxx
(b) It shall be executed before a judge of a court of record,
justice or auxilliary justice of the peace, or notary public,
and shall bear the approval of the provincial governor
wherein the same was executed or his representative duly
authorized in writing for such purpose, indorsed upon it.
It should be stated that under Section 146 of the same Code,
contracts or agreements made in violation of Sec. 145 shall be
"null and void."
It should be recalled that on July 2, 1964, Tac-An secured the
approval of the Provincial Governor of Zamboanga del Norte to
the Deed of Quitclaim and that should have satisfied the
requirement of Sec. 145 of the Administrative Code for Mindanao
and Sulu. But it appears that on April 12, 1965, while Tac-An's
suit was pending in the trial court, the Governor of Zamboanga
del Norte revoked his approval for the reasons stated therein.
The petitioner now asserts that the revocation of the approval
which had been given by the Provincial Governor has no legal
effect and cannot affect his right to the land which had already
vested. But as Justice Conrado M. Vasquez, with Justices Mateo
Canonoy and Ameurfina M. Herrera concurring, said:
The approval by Provincial Governor Felipe Azcuna
appearing on the face of the Deed of Quitclaim (Exh. "E ")
made on July 2, 1964 may no longer be relied upon by the
 plaintiff in view of the revocation thereof by the same
official on April 12, 1965 (Exh. 4). The revocation was
based on the ground that the signature of Governor
Azcuna was obtained thru a false representation to the
effect that the alleged transaction was legal and voluntary
when in truth and in fact, as found out later, the said parcel
of land was the subject matter of a court litigation; and,
moreover, the non-Christian vendors were not brought
before him for interrogation, confirmation or ratification of
the alleged deed of quitclaim. The fact that the revocation
was made after the filing of instant action on October 10,
1964 does not vitiate the aforesaid action of the Provincial
Governor. Significantly, no attempt was made to disprove
the truth of the reasons stated in the certificate of
revocation (Exh. 4). (Rollo, p. 37.)
The petitioner also argues that the Administrative Code of
Mindanao and Sulu was repealed on June 19, 1965 by Republic
Act No, 4252, hence the approval of the Provincial Governor
became unnecessary. Suffice it to say that at times material to
the case, i.e. when the Deed of Quitclaim was executed, when
the approval by the Provincial Governor was given and when the
approval was revoked, Sections 145 and 146 of the
Administrative Code of Mindanao and Sulu were in full force and
effect and since they were substantive in nature the repealing
statute cannot be given retroactive effect. It should also be stated
that the land in question must be presumed to be conjugal in
nature and since the spouses of the Acopiado brothers did not
consent to its transfer to the petitioner, the transaction was at
least voidable.
WHEREFORE finding the petition to be lacking in merit, the
same is hereby dismissed with costs against the petitioner.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-31711 September 30, 1971
ANTONIO J. VILLEGAS as Mayor of the City of Manila and
MANUEL D. LAPID, petitioners-appellants,
vs.
ABELARDO SUBIDO as Civil Service Commissioner,
EDUARDO Z. ROMUALDEZ as Secretary of Finance, JOSE R.
GLORIA as Acting Asst. City Treasurer of Manila, and HON.
CONRADO M. VASQUEZ as Presiding Judge of Branch V,
Court of First Instance of Manila, respondents-appellees.
Gregorio A. Ejercito and Restituto R. Villanueva for petitioners-
appellants.
Office of the Solicitor General Felix Q. Antonio, Acting Assistant
Solicitor General Hector C. Fule and Solicitor Santiago M.
Kapunan for respondents-appellees.
FERNANDO, J.:
Petitioner Antonio J. Villegas, in this appeal from a decision of the
lower court dismissing a special civil action for prohibition, quo
warranto and mandamus would lay claim as the Mayor of the
City of Manila to the power of appointment of the Assistant City
Treasurer to which office the other petitioner, Manuel D. Lapid,
was by him named even if under its Charter 1 such a prerogative
is expressly vested in the President of the Philippines.2 He would
invoke a provision in the Decentralization Act to the effect that all
"other employees, except teachers, paid out of provincial, city or
municipal general funds, and other local funds shall, subject to
civil service law, rules and regulations, be appointed by the
provincial governor, city or municipal mayor upon
recommendation of the office head concerned."3 He is not
deterred by the rather general and in explicit character of such
statutory language as he contends for a construction rather
generous, if not latitudinarian, in scope purportedly in
consonance with the avowed purpose of the Act of enlarging
boundaries of local autonomy. Respondent Abelardo Subido, who
was proceeded against as Commissioner of the Civil
Service,4 takes a stand diametrically opposite not only because
there is no legal basis for such a claim in the light of what is
expressly ordained in the City Charter but also because such an
interpretation of the provision related upon would disregard the
well-settled doctrine that implied repeals are not favored. The
lower court, in a well-written decision by the Honorable Conrado
M. Vasquez, accepted such a view. After a careful study of the
matter, we cannot discern any error. We affirm.
The facts as found by the lower court follows: "In a letter dated
June 3, 1968, respondent Eduardo Z. Romualdez, Secretary of
Finance, authorized respondent Jose R. Gloria of the Office of
the City Treasurer of Manila to assume the duties of Assistant
City Treasurer effective June 1, 1968, vice Felino Fineza who
retired from the government service on May 31, 1968. In
administrative Order No. 40, series of 1968, dated June 17,
1968, petitioner Antonio J. Villegas, Mayor of the City of Manila,
directed respondent Gloria to desist and refrain from exercising
the duties and functions of the Assistant City Treasurer,' on the
ground that respondent Romualdez "is not empowered to make
such designation." On January 1, 1969, Mayor Villegas,
appointed petitioner Manuel D. Lapid, chief of the cash division of
the Office of the City Treasurer of Manila, as Assistant City
Treasurer. In a 1st endorsement dated February 14, 1969,
respondent Abelardo Subido, Commissioner of Civil Service
disapproved the appointment of Lapid, basing his action, on an
opinion of the Secretary of Justice dated September 19, 1968 to
the effect that the appointment of Assistant Provincial Treasurers
is still governed by Section 2088 (A) of the Revised
Administrative Code, and not by Section 4 of the Decentralization
Law, Republic Act No. 5185."5
Thereafter on February 25, 1969, to quote anew from the
appealed decision: "Mayor Villegas and Manuel D. Lapid filed the
instant petition for prohibition, quo warranto and mandamus, with
application for writ of preliminary injunction, praying that
judgment be rendered to declare illegal and void ab initio the
authorization given by respondent Romualdez to respondent
Gloria to assume the duties of assistant city treasurer of Manila,
and that a writ of mandamus be issued to respondent
Commissioner of Civil Service Subido commanding him to
approve the appointment of petitioner Lapid to the said office in
accordance with the civil Service Rules."6 It was not until the filing
of the petition that respondent Jose R. Gloria was nominated by
the President of the Philippines to the position of Assistant City
treasurer of Manila and thereafter duly confirmed. After the case
was submitted for judgment on the pleadings and the
documentary exhibits stipulated by the parties, the court
rendered its decision on August 4, 1969 dismissing the petition.
Hence this appeal by way of certiorari.
With this Tribunal, as with the court below, the decisive question
is the applicable law. The Charter of the City of Manila, enacted
in 1949, in express terms did confer on the President of the
Philippines, with the consent of the Commission on
Appointments, the power to appoint the Assistant City
Treasurer.7 On the other hand, support for the petition is
premised on the expansive interpretation that would be accorded
the general provisions found in the Decentralization Act of 1967
to the effect that it is a city mayor who has the power to appoint
all other employees paid out of city or local funds subject to civil
service law, rules and regulations.8
It is understandable why the choice for the lower court was not
difficult to make. What has been so clearly ordained in the
Charter is controlling. It survives in the face of the assertion that
the additional power granted local officials to appoint employees
paid out of local funds would suffice to transfer such authority to
petitioner Mayor. A perusal of the words of the statute, even if far
from searching would not justify such an interpretation. This is all
more evident, considering the fidelity manifested by this Court to
the doctrine that looks with less than favor on implied appeals.
The decision now on appeal, to repeat, must be affirmed.
1. The inherent weakness of the contention of petitioner Mayor
that would seize upon the vesting of the appointing power of all
other "employees" except teachers paid out of local funds to
justify his choice of petitioner Manuel D. Lapid as Assistant City
Treasurer is readily disclosed. The Revised Administrative Code
distinguishes one in that category from an "officer" to designate
those "whose duties, not being of a clerical or manual nature,
may be considered to involve the exercise of discretion in the
performance of the function of government, whether such duties
are precisely defined by law or not."9 Clearly, the Assistant and
City Treasurer is an officer, not an employee. Then, too, Section
4 of the Decentralization Act relied upon by petitioner City Mayor
specifically enumerates, the officials and their assistants whom
he can appoint, specifically excluding therefrom city
treasurers.10 The expansive interpretation contended for is thus
unwarranted.
Nor is the case strengthened for petitioner City Mayor by the
invocation of Pineda v. Claudio.11 It is not to be denied that in the
opinion of the Court, penned by Justice Castro, undue
interference with the power and prerogatives of a local executive
is sought to be avoided, considering his primary responsibility for
efficient governmental administration. What is not to be ignored
though is that such a principle was announced in connection with
the appointment of a department head, the chief of police, who
necessarily must enjoy the fullest confidence of the local
executive, one moreover whose appointment is expressly vested
in the city mayor. The principle therein announced does not
extend as far as the choice of an assistant city treasurer whose
functions do not require that much degree of confidence, not to
mention the specific grant of such authority to the President.
Equally unavailing then is Villegas v. Subido,12 where this Court,
through the then Justice Capistrano, recognized that the choice
of who the city legal officer should be rests solely on the city
mayor, such an office requiring as it does the highest degree of
confidence. It bears repeating that the situation in the case
before us is of a different category. The decision appealed from,
then, is not to be impugned as a failure to abide by controlling
pronouncements of this Tribunal.
2. Much less is reversal of the lower court decision justified on
the plea that the aforesaid provision in the Decentralization Act
had the effect of repealing what is specifically ordained in the city
charter. It has been the constant holding of this Court that
repeals by duplication are not favored and will not be so declared
unless it be manifest that the legislature so intended. Such a
doctrine goes as far back as United States v. Reyes, a 1908
decision.13 It is necessary then before such a repeal is deemed to
exist that it be shown that the statutes or statutory provisions
deal with the same subject matter and that the latter be
inconsistent with the former.14 There must be a showing of
repugnancy clear and convincing in character. The language
used in the latter statute must be such as to render it
irreconcilable with what had been formerly enacted. An
inconsistency that falls short of that standard does not suffice.
What is needed is a manifest indication of the legislative purpose
to repeal. 15
More specifically, a subsequent statute, general in character as
to its terms and application, is not to be construed as repealing a
special or specific enactment, unless the legislative purpose to
do so is manifest. This is so even if the provisions of the latter are
sufficiently comprehensive to include what was set forth in the
special act. This principle has likewise been consistently applied
in decisions of this Court from Manila Railroad Co. v.
Rafferty,16decided as far back as 1919. A citation from an opinion
of Justice Tuason is illuminating. Thus: "From another angle the
presumption against repeal is stronger. A special law is not
regarded as having been amended or repealed by a general law
unless the intent to repeal or alter is manifest. Generalia
specialibus non derogant. And this is true although the terms of
the general act are broad enough to include the matter in the
special statute. ... At any rate, in the event harmony between
provisions of this type in the same law or in two laws is
impossible, the specific provision controls unless the statute,
considered in its entirety, indicates a contrary intention upon the
part of the legislature. ... A general law is one which embraces a
class of subjects or places and does not omit any subject or
place naturally belonging to such class while a special act is one
which relates to particular persons or things of a class. 17
WHEREFORE, the lower court decision of August 4, 1969 is
affirmed. Without pronouncement as to costs.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 79974 December 17, 1987
ULPIANO P. SARMIENTO III AND JUANITO G.
ARCILLA, petitioners,
vs.
SALVADOR MISON, in his capacity as COMMISSIONER OF
THE BUREAU OF CUSTOMS, AND GUILLERMO CARAGUE,
in his capacity as SECRETARY OF THE DEPARTMENT OF
BUDGET, respondents, COMMISSION ON
APPOINTMENTS, intervenor.
PADILLA, J.:
Once more the Court is called upon to delineate constitutional
boundaries. In this petition for prohibition, the petitioners, who
are taxpayers, lawyers, members of the Integrated Bar of the
Philippines and professors of Constitutional Law, seek to enjoin
the respondent Salvador Mison from performing the functions of
the Office of Commissioner of the Bureau of Customs and the
respondent Guillermo Carague, as Secretary of the Department
of Budget, from effecting disbursements in payment of Mison's
salaries and emoluments, on the ground that Mison's
appointment as Commissioner of the Bureau of Customs is
unconstitutional by reason of its not having been confirmed by
the Commission on Appointments. The respondents, on the other
hand, maintain the constitutionality of respondent Mison's
appointment without the confirmation of the Commission on
Appointments.
Because of the demands of public interest, including the need for
stability in the public service, the Court resolved to give due
course to the petition and decide, setting aside the finer
procedural questions of whether prohibition is the proper remedy
to test respondent Mison's right to the Office of Commissioner of
the Bureau of Customs and of whether the petitioners have a
standing to bring this suit.
By the same token, and for the same purpose, the Court allowed
the Commission on Appointments to intervene and file a petition
in intervention. Comment was required of respondents on said
petition. The comment was filed, followed by intervenor's reply
thereto. The parties were also heard in oral argument on 8
December 1987.
This case assumes added significance because, at bottom line, it
involves a conflict between two (2) great departments of
government, the Executive and Legislative Departments. It also
occurs early in the life of the 1987 Constitution.
The task of the Court is rendered lighter by the existence of
relatively clear provisions in the Constitution. In cases like this,
we follow what the Court, speaking through Mr. Justice (later,
Chief Justice) Jose Abad Santos stated in Gold Creek Mining
Corp. vs. Rodriguez, 1 that:
The fundamental principle of constitutional construction
is to give effect to the intent of the framers of the organic
law and of the people adopting it. The intention to which
force is to be given is that which is embodied and
expressed in the constitutional provisions themselves.
The Court will thus construe the applicable constitutional
provisions, not in accordance with how the executive or the
legislative department may want them construed, but in
accordance with what they say and provide.
Section 16, Article VII of the 1987 Constitution says:
The President shall nominate and, with the consent of
the Commission on Appointments, appoint the heads of
the executive departments, ambassadors, other public
ministers and consuls, or officers of the armed forces
from the rank of colonel or naval captain, and other
officers whose appointments are vested in him in this
Constitution. He shall also appoint all other officers of
the Government whose appointments are not otherwise
provided for by law, and those whom he may be
authorized by law to appoint. The Congress may, by
law, vest the appointment of other officers lower in rank
in the President alone, in the courts, or in the heads of
the departments, agencies, commissions or boards.
The President shall have the power to make
appointments during the recess of the Congress,
whether voluntary or compulsory, but such
appointments shall be effective only until disapproval by
the Commission on Appointments or until the next
adjournment of the Congress.
It is readily apparent that under the provisions of the 1987
Constitution, just quoted, there are four (4) groups of officers
whom the President shall appoint. These four (4) groups, to
which we will hereafter refer from time to time, are:
First, the heads of the executive departments,
ambassadors, other public ministers and consuls,
officers of the armed forces from the rank of colonel or
naval captain, and other officers whose appointments
are vested in him in this Constitution; 2
Second, all other officers of the Government whose
appointments are not otherwise provided for by law; 3
Third, those whom the President may be authorized by
law to appoint;
Fourth, officers lower in rank 4 whose appointments the
Congress may by law vest in the President alone.
The first group of officers is clearly appointed with the consent of
the Commission on Appointments. Appointments of such officers
are initiated by nomination and, if the nomination is confirmed by
the Commission on Appointments, the President appoints. 5
The second, third and fourth groups of officers are the present
bone of contention. Should they be appointed by the President
with or without the consent (confirmation) of the Commission on
Appointments? By following the accepted rule in constitutional
and statutory construction that an express enumeration of
subjects excludes others not enumerated, it would follow that
only those appointments to positions expressly stated in the first
group require the consent (confirmation) of the Commission on
Appointments. But we need not rely solely on this basic rule of
constitutional construction. We can refer to historical background
as well as to the records of the 1986 Constitutional Commission
to determine, with more accuracy, if not precision, the intention of
the framers of the 1987 Constitution and the people adopting it,
on whether the appointments by the President, under the
second, third and fourth groups, require the consent
(confirmation) of the Commission on Appointments. Again, in this
task, the following advice of Mr. Chief Justice J. Abad Santos in
Gold Creek is apropos:
In deciding this point, it should be borne in mind that a
constitutional provision must be presumed to have been
framed and adopted in the light and understanding of
prior and existing laws and with reference to them.
"Courts are bound to presume that the people adopting
a constitution are familiar with the previous and existing
laws upon the subjects to which its provisions relate,
and upon which they express their judgment and
opinion in its adoption." (Barry vs. Truax 13 N.D., 131;
99 N.W., 769,65 L. R. A., 762.) 6
It will be recalled that, under Sec. 10, Article VII of the 1935
Constitution, it is provided that —
xxx xxx xxx
(3) The President shall nominate and with the consent
of the Commission on Appointments, shall appoint the
heads of the executive departments and bureaus,
officers of the army from the rank of colonel, of the Navy
and Air Forces from the rank of captain or commander,
and all other officers of the Government whose
appointments are not herein otherwise provided for, and
those whom he may be authorized by law to appoint;
but the Congress may by law vest the appointment of
inferior officers, in the President alone, in the courts, or
in the heads of departments.
(4) The President shall havethe power to make
appointments during the recess of the Congress, but
such appointments shall be effective only until
 disapproval by the Commission on Appointments or until
the next adjournment of the Congress.
xxx xxx xxx
(7) ..., and with the consent of the Commission on
Appointments, shall appoint ambassadors, other public
ministers and consuls ...
Upon the other hand, the 1973 Constitution provides that-
Section 10. The President shall appoint the heads of
bureaus and offices, the officers of the Armed Forces of
the Philippines from the rank of Brigadier General or
Commodore, and all other officers of The government
whose appointments are not herein otherwise provided
for, and those whom he may be authorized by law to
appoint. However, the Batasang Pambansa may by law
vest in the Prime Minister, members of the Cabinet, the
Executive Committee, Courts, Heads of Agencies,
Commissions, and Boards the power to appoint inferior
officers in their respective offices.
Thus, in the 1935 Constitution, almost all presidential
appointments required the consent (confirmation) of the
Commission on Appointments. It is now a sad part of our political
history that the power of confirmation by the Commission on
Appointments, under the 1935 Constitution, transformed that
commission, many times, into a venue of "horse-trading" and
similar malpractices.
On the other hand, the 1973 Constitution, consistent with the
authoritarian pattern in which it was molded and remolded by
successive amendments, placed the absolute power of
appointment in the President with hardly any check on the part of
the legislature.
Given the above two (2) extremes, one, in the 1935 Constitution
and the other, in the 1973 Constitution, it is not difficult for the
Court to state that the framers of the 1987 Constitution and the
people adopting it, struck a "middle ground" by requiring the
consent (confirmation) of the Commission on Appointments for
the first group of appointments and leaving to the President,
without such confirmation, the appointment of other officers, i.e.,
those in the second and third groups as well as those in the
fourth group, i.e., officers of lower rank.
The proceedings in the 1986 Constitutional Commission support
this conclusion. The original text of Section 16, Article VII, as
proposed by the Committee on the Executive of the 1986
Constitutional Commission, read as follows:
Section 16. The president shall nominate and, with the
consent of a Commission on Appointment, shall appoint
the heads of the executive departments and bureaus,
ambassadors, other public ministers and consuls, or
officers of the armed forces from the rank of colonel or
naval captain and all other officers of the Government
whose appointments are not otherwise provided for by
law, and those whom he may be authorized by law to
appoint. The Congress may by law vest the appointment
of inferior officers in the President alone, in the courts,
or in the heads of departments 7 [Emphasis supplied].
The above text is almost a verbatim copy of its counterpart
provision in the 1935 Constitution. When the frames discussed
on the floor of the Commission the proposed text of Section 16,
Article VII, a feeling was manifestly expressed to make the power
of the Commission on Appointments over presidential
appointments more limited than that held by the Commission in
the 1935 Constitution. Thus-
Mr. Rama: ... May I ask that Commissioner
Monsod be recognized
The President: We will call Commissioner
Davide later.
Mr. Monsod: With the Chair's indulgence, I just
want to take a few minutes of our time to lay
the basis for some of the amendments that I
would like to propose to the Committee this
morning.
xxx xxx xxx
On Section 16, I would like to suggest that the power of
the Commission on Appointments be limited to the
department heads, ambassadors, generals and so on
but not to the levels of bureau heads and colonels.
xxx xxx xxx 8 (Emphasis supplied.)
In the course of the debates on the text of Section 16, there were
two (2) major changes proposed and approved by the
Commission. These were (1) the exclusion of the appointments
of heads of bureaus from the requirement of confirmation by the
Commission on Appointments; and (2) the exclusion of
appointments made under the second sentence 9 of the section
from the same requirement. The records of the deliberations of
the Constitutional Commission show the following:
MR. ROMULO: I ask that Commissioner Foz
be recognized
THE PRESIDENT: Commissioner Foz is
recognized
MR. FOZ: Madam President, my proposed
amendment is on page 7, Section 16, line 26
which is to delete the words "and bureaus,"
and on line 28 of the same page, to change the
phrase 'colonel or naval captain to MAJOR
GENERAL OR REAR ADMIRAL. This last
amendment which is co-authored by
Commissioner de Castro is to put a period (.)
after the word ADMIRAL, and on line 29 of the
same page, start a new sentence with: HE
SHALL ALSO APPOINT, et cetera.
MR. REGALADO: May we have the
amendments one by one. The first proposed
amendment is to delete the words "and
bureaus" on line 26.
MR. FOZ: That is correct.
MR. REGALADO: For the benefit of the other
Commissioners, what would be the justification
of the proponent for such a deletion?
MR. FOZ: The position of bureau director is
actually quite low in the executive department,
and to require further confirmation of
presidential appointment of heads of bureaus
would subject them to political influence.
 MR. REGALADO: The Commissioner's
proposed amendment by deletion also includes
regional directors as distinguished from merely
staff directors, because the regional directors
have quite a plenitude of powers within the
regions as distinguished from staff directors
who only stay in the office.
MR. FOZ: Yes, but the regional directors are
under the supervisiopn of the staff bureau
directors.
xxx xxx xxx
MR. MAAMBONG: May I direct a question to
Commissioner Foz? The Commissioner
proposed an amendment to delete 'and
bureaus on Section 16. Who will then appoint
the bureau directors if it is not the President?
MR. FOZ: It is still the President who will
appoint them but their appointment shall no
longer be subject to confirmation by the
Commission on Appointments.
MR. MAAMBONG: In other words, it is in line
with the same answer of Commissioner de
Castro?
MR. FOZ: Yes.
MR. MAAMBONG: Thank you.
THE PRESIDENT: Is this clear now? What is
the reaction of the Committee?
xxx xxx xxx
THE PRESIDENT: Commissioner Foz is
recognized
MR. FOZ: Madam President, this is the third
proposed amendment on page 7, line 28. 1
propose to put a period (.) after 'captain' and
on line 29, delete 'and all' and substitute it with
HE SHALL ALSO APPOINT ANY.
MR. REGALADO: Madam President, the
Committee accepts the proposed amendment
because it makes it clear that those other
officers mentioned therein do not have to be
confirmed by the Commission on
Appointments.
MR. DAVIDE: Madam President.
THE PRESIDENT: Commissioner Davide is
recognized.
xxx xxx xxx
MR. DAVIDE: So would the proponent accept
an amendment to his amendment, so that after
"captain" we insert the following words: AND
OTHER OFFICERS WHOSE
APPOINTMENTS ARE VESTED IN HIM IN
THIS CONSTITUTION?
FR. BERNAS: It is a little vague.
MR. DAVIDE: In other words, there are
positions provided for in the Constitution whose
appointments are vested in the President, as a
matter of fact like those of the different
constitutional commissions.

MR. REGALADO: Madam President, the FR. BERNAS: That is correct. This list of
Committee feels that this matter should be officials found in Section 16 is not an exclusive
submitted to the body for a vote. list of those appointments which
constitutionally require confirmation of the
Commission on Appointments,
MR. DE CASTRO: Thank you.
MR. DAVIDE: That is the reason I seek the
MR. REGALADO: We will take the incorporation of the words I proposed.
amendments one by one. We will first vote on
the deletion of the phrase 'and bureaus on line
26, such that appointments of bureau directors FR. BERNAS: Will Commissioner Davide
no longer need confirmation by the restate his proposed amendment?
Commission on Appointment.
MR. DAVIDE: After 'captain,' add the following:
Section 16, therefore, would read: 'The President shall AND OTHER OFFICERS WHOSE
nominate, and with the consent of a Commission on APPOINTMENTS ARE VESTED IN HIM IN
Appointments, shall appoint the heads of the executive THIS CONSTITUTION.
departments, ambassadors. . . .
FR. BERNAS: How about:"AND OTHER
THE PRESIDENT: Is there any objection to OFFICERS WHOSE APPOINTMENTS
delete the phrase 'and bureaus' on page 7, line REQUIRE CONFIRMATION UNDER THIS
26? (Silence) The Chair hears none; the CONSTITUTION"?
amendments is approved.
MR. DAVIDE: Yes, Madam President, that is
xxx xxx xxx modified by the Committee.

MR. ROMULO: Madam President. FR. BERNAS: That will clarify things.

THE PRESIDENT: The Acting Floor Leader is THE PRESIDENT: Does the Committee
recognized. accept?
 MR. REGALADO: Just for the record, of
course, that excludes those officers which the
Constitution does not require confirmation by
the Commission on Appointments, like the
members of the judiciary and the Ombudsman.
MR. DAVIDE: That is correct. That is very clear
from the modification made by Commissioner
Bernas.
THE PRESIDENT: So we have now this
proposed amendment of Commissioners Foz
and Davide.
xxx xxx xxx
THE PRESIDENT: Is there any objection to this
proposed amendment of Commissioners Foz
and Davide as accepted by the Committee?
(Silence) The Chair hears none; the
amendment, as amended, is
approved 10 (Emphasis supplied).
It is, therefore, clear that appointments to the second
and third groups of officers can be made by the
President without the consent (confirmation) of the
Commission on Appointments.
It is contended by amicus curiae, Senator Neptali
Gonzales, that the second sentence of Sec. 16, Article
VII reading-
He (the President) shall also appoint all other officers of
the Government whose appointments are not otherwise
provided for by law and those whom he may be
authorized by law to appoint . . . . (Emphasis supplied)
with particular reference to the word "also," implies that the
President shall "in like manner" appoint the officers mentioned in
said second sentence. In other words, the President shall appoint
the officers mentioned in said second sentence in the same
manner as he appoints officers mentioned in the first sentence,
that is, by nomination and with the consent (confirmation) of the
Commission on Appointments.
Amicus curiae's reliance on the word "also" in said second
sentence is not necessarily supportive of the conclusion he
arrives at. For, as the Solicitor General argues, the word "also"
could mean "in addition; as well; besides, too" (Webster's
International Dictionary, p. 62, 1981 edition) which meanings
could, on the contrary, stress that the word "also" in said second
sentence means that the President, in addition to nominating
and, with the consent of the Commission on Appointments,
appointing the officers enumerated in the first sentence, can
appoint (without such consent (confirmation) the officers
mentioned in the second sentence-
Rather than limit the area of consideration to the possible
meanings of the word "also" as used in the context of said
second sentence, the Court has chosen to derive significance
from the fact that the first sentence speaks of nomination by the
President and appointment by the President with the consent of
the Commission on Appointments, whereas, the second
sentence speaks only of appointment by the President. And, this
use of different language in two (2) sentences proximate to each
other underscores a difference in message conveyed and
perceptions established, in line with Judge Learned Hand's
observation that "words are not pebbles in alien juxtaposition"
but, more so, because the recorded proceedings of the 1986
Constitutional Commission clearly and expressly justify such
differences.
As a result of the innovations introduced in Sec. 16, Article VII of
the 1987 Constitution, there are officers whose appointments
require no confirmation of the Commission on Appointments,
even if such officers may be higher in rank, compared to some
officers whose appointments have to be confirmed by the
Commission on Appointments under the first sentence of the
same Sec. 16, Art. VII. Thus, to illustrate, the appointment of the
Central Bank Governor requires no confirmation by the
Commission on Appointments, even if he is higher in rank than a
colonel in the Armed Forces of the Philippines or a consul in the
Consular Service.
But these contrasts, while initially impressive, merely underscore
the purposive intention and deliberate judgment of the framers of
the 1987 Constitution that, except as to those officers whose
appointments require the consent of the Commission on
Appointments by express mandate of the first sentence in Sec.
16, Art. VII, appointments of other officers are left to the
President without need of confirmation by the Commission on
Appointments. This conclusion is inevitable, if we are to presume,
as we must, that the framers of the 1987 Constitution were
knowledgeable of what they were doing and of the foreseable
effects thereof.
Besides, the power to appoint is fundamentally executive or
presidential in character. Limitations on or qualifications of such
power should be strictly construed against them. Such limitations
or qualifications must be clearly stated in order to be recognized.
But, it is only in the first sentence of Sec. 16, Art. VII where it is
clearly stated that appointments by the President to the positions
therein enumerated require the consent of the Commission on
Appointments.
As to the fourth group of officers whom the President can
appoint, the intervenor Commission on Appointments
underscores the third sentence in Sec. 16, Article VII of the 1987
Constitution, which reads:
The Congress may, by law, vest the appointment of
other officers lower in rank in the President alone, in the
courts, or in the heads of departments, agencies,
commissions, or boards. [Emphasis supplied].
and argues that, since a law is needed to vest the appointment of
lower-ranked officers in the President alone, this implies that, in
the absence of such a law, lower-ranked officers have to be
appointed by the President subject to confirmation by the
Commission on Appointments; and, if this is so, as to lower-
ranked officers, it follows that higher-ranked officers should be
appointed by the President, subject also to confirmation by the
Commission on Appointments.
The respondents, on the other hand, submit that the third
sentence of Sec. 16, Article VII, abovequoted, merely declares
that, as to lower-ranked officers, the Congress may by law vest
their appointment in the President, in the courts, or in the heads
of the various departments, agencies, commissions, or boards in
the government. No reason however is submitted for the use of
the word "alone" in said third sentence.
The Court is not impressed by both arguments. It is of the
considered opinion, after a careful study of the deliberations of
the 1986 Constitutional Commission, that the use of the word
alone" after the word "President" in said third sentence of Sec.
16, Article VII is, more than anything else, a slip or lapsus in
draftmanship. It will be recalled that, in the 1935 Constitution, the
following provision appears at the end of par. 3, section 1 0,
Article VII thereof —
 ...; but the Congress may by law vest the appointment of
inferior officers, in the President alone, in the courts, or
in the heads of departments. [Emphasis supplied].
The above provision in the 1935 Constitution appears
immediately after the provision which makes practically all
presidential appointments subject to confirmation by the
Commission on Appointments, thus-
3. The President shall nominate and with the consent of
the Commission on Appointments, shall appoint the
heads of the executive departments and bureaus,
officers of the Army from the rank of colonel, of the Navy
and Air Forces from the rank of captain or commander,
and all other officers of the Government whose
appointments are not herein provided for, and those
whom he may be authorized by law to appoint; ...
In other words, since the 1935 Constitution subjects, as a
general rule, presidential appointments to confirmation by the
Commission on Appointments, the same 1935 Constitution saw
fit, by way of an exception to such rule, to provide that Congress
may, however, by law vest the appointment of inferior officers
(equivalent to 11 officers lower in rank" referred to in the 1987
Constitution) in the President alone, in the courts, or in the heads
of departments,
In the 1987 Constitution, however, as already pointed out, the
clear and expressed intent of its framers was to exclude
presidential appointments from confirmation by the Commission
on Appointments, except appointments to offices expressly
mentioned in the first sentence of Sec. 16, Article VII.
Consequently, there was no reason to use in the third sentence
of Sec. 16, Article VII the word "alone" after the word "President"
in providing that Congress may by law vest the appointment of
lower-ranked officers in the President alone, or in the courts, or in
the heads of departments, because the power to appoint officers
whom he (the President) may be authorized by law to appoint is
already vested in the President, without need of confirmation by
the Commission on Appointments, in the second sentence of the
same Sec. 16, Article VII.
Therefore, the third sentence of Sec. 16, Article VII could have
stated merely that, in the case of lower-ranked officers, the
Congress may by law vest their appointment in the President, in
the courts, or in the heads of various departments of the
government. In short, the word "alone" in the third sentence of
Sec. 16, Article VII of the 1987 Constitution, as a literal import
from the last part of par. 3, section 10, Article VII of the 1935
Constitution, appears to be redundant in the light of the second
sentence of Sec. 16, Article VII. And, this redundancy cannot
prevail over the clear and positive intent of the framers of the
1987 Constitution that presidential appointments, except those
mentioned in the first sentence of Sec. 16, Article VII, are not
subject to confirmation by the Commission on Appointments.
Coming now to the immediate question before the Court, it is
evident that the position of Commissioner of the Bureau of
Customs (a bureau head) is not one of those within the first
group of appointments where the consent of the Commission on
Appointments is required. As a matter of fact, as already pointed
out, while the 1935 Constitution includes "heads of bureaus"
among those officers whose appointments need the consent of
the Commission on Appointments, the 1987 Constitution on the
other hand, deliberately excluded the position of "heads of
bureaus" from appointments that need the consent (confirmation)
of the Commission on Appointments.
Moreover, the President is expressly authorized by law to appoint
the Commissioner of the Bureau of Customs. The original text of
Sec. 601 of Republic Act No. 1937, otherwise known as the Tariff
and Customs Code of the Philippines, which was enacted by the
Congress of the Philippines on 22 June 1957, reads as follows:
601. Chief Officials of the Bureau.-The Bureau of
Customs shall have one chief and one assistant chief, to
be known respectively as the Commissioner (hereinafter
known as the 'Commissioner') and Assistant
Commissioner of Customs, who shall each receive an
annual compensation in accordance with the rates
prescribed by existing laws. The Assistant
Commissioner of Customs shall be appointed by the
proper department head.
Sec. 601 of Republic Act No. 1937, was amended on 27 October
1972 by Presidential Decree No. 34, amending the Tariff and
Customs Code of the Philippines. Sec. 601, as thus amended,
now reads as follows:
Sec. 601. Chief Officials of the Bureau of Customs.-The
Bureau of Customs shall have one chief and one
assistant chief, to be known respectively as the
Commissioner (hereinafter known as Commissioner)
and Deputy Commissioner of Customs, who shall each
receive an annual compensation in accordance with the
rates prescribed by existing law. The Commissioner and
the Deputy Commissioner of Customs shall be
appointed by the President of the Philippines (Emphasis
supplied.)
Of course, these laws (Rep. Act No. 1937 and PD No. 34) were
approved during the effectivity of the 1935 Constitution, under
which the President may nominate and, with the consent of the
Commission on Appointments, appoint the heads of bureaus, like
the Commissioner of the Bureau of Customs.
After the effectivity of the 1987 Constitution, however, Rep. Act
No. 1937 and PD No. 34 have to be read in harmony with Sec.
16, Art. VII, with the result that, while the appointment of the
Commissioner of the Bureau of Customs is one that devolves on
the President, as an appointment he is authorizedby law to make,
such appointment, however, no longer needs the confirmation of
the Commission on Appointments.
Consequently, we rule that the President of the Philippines acted
within her constitutional authority and power in appointing
respondent Salvador Mison, Commissioner of the Bureau of
Customs, without submitting his nomination to the Commission
on Appointments for confirmation. He is thus entitled to exercise
the full authority and functions of the office and to receive all the
salaries and emoluments pertaining thereto.
WHEREFORE, the petition and petition in intervention should be,
as they are, hereby DISMISSED. Without costs.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-2348 February 27, 1950
GREGORIO PERFECTO, plaintiff-appellee,
vs.
BIBIANO MEER, Collector of Internal Revenue, defendant-
appellant.
First Assistant Solicitor General Roberto A. Gianzon and Solicitor
Francisco Carreon for oppositor and appellant.
Gregorio Perfecto in his own behalf.
BENGZON, J.:
In April, 1947 the Collector of Internal Revenue required Mr.
Justice Gregorio Perfecto to pay income tax upon his salary as
member of this Court during the year 1946. After paying the
amount (P802), he instituted this action in the Manila Court of
First Instance contending that the assessment was illegal, his
salary not being taxable for the reason that imposition of taxes
thereon would reduce it in violation of the Constitution.
The Manila judge upheld his contention, and required the refund
of the amount collected. The defendant appealed.
The death of Mr. Justice Perfecto has freed us from the
embarrassment of passing upon the claim of a colleague. Still, as
the outcome indirectly affects all the members of the Court,
consideration of the matter is not without its vexing feature. Yet
adjudication may not be declined, because (a) we are not legally
disqualified; (b) jurisdiction may not be renounced, ad it is the
defendant who appeals to this Court, and there is no other
tribunal to which the controversy may be referred; (c) supreme
courts in the United States have decided similar disputes relating
to themselves; (d) the question touches all the members of the
judiciary from top to bottom; and (e) the issue involves the right
of other constitutional officers whose compensation is equally
protected by the Constitution, for instance, the President, the
Auditor-General and the members of the Commission on
Elections. Anyway the subject has been thoroughly discussed in
many American lawsuits and opinions, and we shall hardly do
nothing more than to borrow therefrom and to compare their
conclusions to local conditions. There shall be little occasion to
formulate new propositions, for the situation is not
unprecedented.
Our Constitution provides in its Article VIII, section 9, that the
members of the Supreme Court and all judges of inferior courts
"shall receive such compensation as may be fixed by law, which
shall not be diminished during their continuance in office." It also
provides that "until Congress shall provide otherwise, the Chief
Justice of the Supreme Court shall receive an annual
compensation of sixteen thousand pesos". When in 1945 Mr.
Justice Perfecto assumed office, Congress had not "provided
otherwise", by fixing a different salary for associate justices. He
received salary at the rate provided by the Constitution, i.e.,
fifteen thousand pesos a year.
Now, does the imposition of an income tax upon this salary in
1946 amount to a diminution thereof?.
A note found at page 534 of volume 11 of the American Law
Reports answers the question in the affirmative. It says:
Where the Constitution of a state provides that the
salaries of its judicial officers shall not be dismissed
during their continuance in office, it had been held that
the state legislature cannot impose a tax upon the
compensation paid to the judges of its court. New
Orleans v. Lea (1859) 14 La. Ann. 194; Opinion of
Attorney-General if N. C. (1856) 48 N. C. (3 Jones, L.)
Appx. 1; Re Taxation of Salaries of Judges (1902) 131
N. C. 692, 42 S. E. 970; Com. ex. rel. Hepburn v. Mann
(1843) 5 Watts & S,. (Pa.) 403 [but see to the contrary
the earlier and much criticized case of Northumberland
county v. Chapman (1829) 2 Rawle (Pa.) 73]*
A different rule prevails in Wisconsin, according to the same
annotation. Another state holding the contrary view is Missouri.
The Constitution of the United States, likes ours, forbids the
diminution of the compensation of Judges of the Supreme Court
and of inferior courts. The Federal Governments has an income
tax law. Does it embrace the salaries of federal judges? In
answering this question, we should consider four periods:
First period. No attempts was made to tax the compensation of
Federal judges up to 1862 1.
Second period. 1862-1918. In July, 1862, a statute was passed
subjecting the salaries of "civil officers of the United States" to an
income tax of three per cent. Revenue officers, construed it as
including the compensation of all judges; but Chief Justice Taney,
speaking for the judiciary, wrote to the Secretary of the Treasury
a letter of protest saying, among other things:
The act in question, as you interpret it, diminishes the
compensation of every judge 3 per cent, and if it can be
diminished to that extent by the name of a tax, it may, in
the same way, be reduced from time to time, at the
pleasure of the legislature.
The judiciary is one of the three great departments of
the government, created and established by the
Constitution. Its duties and powers are specifically set
forth, and are of a character that requires it to be
perfectly independent of the two other departments, and
in order to place it beyond the reach and above even
the suspicion of any such influence, the power to reduce
their compensation is expressly withheld from
Congress, and excepted from their powers of legislation.
Language could not be more plain than that used in the
Constitution. It is, moreover, one of its most important
and essential provisions. For the articles which limits the
powers of the legislative and executive branches of the
government, and those which provide safeguards for the
protection of the citizen in his person and property,
would be of little value without a judiciary to uphold and
maintain them, which was free from every influence,
direct and indirect, that might by possibility in times of
political excitement warp their judgments.
Upon these grounds I regard an act of Congress
retaining in the Treasury a portion of the Compensation
of the judges, as unconstitutional and void2.
The protest was unheeded, although it apparently bore the
approval of the whole Supreme Court, that ordered it printed
among its records. But in 1869 Attorney-General Hoar upon the
request of the Secretary of the Treasury rendered an opinion
agreeing with the Chief Justice. The collection of the tax was
consequently discontinued and the amounts theretofore received
were all refunded. For half a century thereafter judges' salaries
were not taxed as income.3
Third period. 1919-1938. The Federal Income Tax Act of
February 24, 1919 expressly provided that taxable income shall
include "the compensation of the judges of the Supreme Court
and inferior courts of the United States". Under such Act, Walter
Evans, United States judge since 1899, paid income tax on his
salary; and maintaining that the impost reduced his
compensation, he sued to recover the money he had delivered
under protest. He was upheld in 1920 by the Supreme Court in
an epoch-making decision.*, explaining the purpose, history and
meaning of the Constitutional provision forbidding impairment of
judicial salaries and the effect of an income tax upon the salary of
a judge.
With what purpose does the Constitution provide that
the compensation of the judges "shall not be diminished
during their continuance in office"? Is it primarily to
benefit the judges, or rather to promote the public weal
by giving them that independence which makes for an
impartial and courageous discharge of the judicial
function? Does the provision merely forbid direct
diminution, such as expressly reducing the
compensation from a greater to a less sum per year,
and thereby leave the way open for indirect, yet
effective, diminution, such as withholding or calling back
a part as tax on the whole? Or does it mean that the
judge shall have a sure and continuing right to the
compensation, whereon he confidently may rely for his
support during his continuance in office, so that he need
have no apprehension lest his situation in this regard
may be changed to his disadvantage?
The Constitution was framed on the fundamental theory
that a larger measure of liberty and justice would be
assured by vesting the three powers — the legislative,
the executive, and the judicial — in separate
departments, each relatively independent of the others
and it was recognized that without this independence —
if it was not made both real and enduring — the
separation would fail of its purpose. all agreed that
restraints and checks must be imposed to secure the
requisite measure of independence; for otherwise the
legislative department, inherently the strongest, might
encroach on or even come to dominate the others, and
the judicial, naturally the weakest, might be dwarf or
swayed by the other two, especially by the legislative.
The particular need for making the judiciary
independent was elaborately pointed our by Alexander
Hamilton in the Federalist, No. 78, from which we
excerpt the following:
xxx xxx xxx
At a later period John Marshall, whose rich experience
as lawyer, legislator, and chief justice enable him to
speak as no one else could, tersely said (debates Va.
Gonv. 1829-1831, pp. 616, 619): . . . Our courts are the
balance wheel of our whole constitutional system; and
our is the only constitutional system so balanced and
controlled. Other constitutional systems lacks complete
poise and certainly of operation because they lack the
support and interpretation of authoritative, undisputable
courts of law. It is clear beyond all need of exposition
that for the definite maintenance of constitutional
understandings it is indispensable, alike for the
preservation of the liberty of the individual and for the
preservation of the integrity of the powers of the
government, that there should be some nonpolitical
forum in which those understandings can be impartially
debated and determined. That forum our courts supply.
There the individual may assert his rights; there the
government must accept definition of its authority. There
the individual may challenge the legality of
governmental action and have it adjudged by the test of
fundamental principles, and that test the government
must abide; there the government can check the too
aggressive self-assertion of the individual and establish
its power upon lines which all can comprehend and
heed. The constitutional powers of the courts constitute
the ultimate safeguard alike of individual privilege and of
governmental prerogative. It is in this sense that our
judiciary is the balance wheel of our entire system; it is
meant to maintain that nice adjustment between
individual rights and governmental powers which
constitutes political liberty. Constitutional government in
the United States, pp. 17, 142.
Conscious in the nature and scope of the power being
vested in the national courts, recognizing that they
would be charge with responsibilities more delicate and
important than any ever before confide to judicial
tribunals, and appreciating that they were to be, in the
words of George Washington, "the keystone of our
political fabric", the convention with unusual accord
incorporated in the Constitution the provision that the
judges "shall hold their offices during good behavior,
and shall at stated times receive for their services a
compensation which shall not be diminished during their
continuance in office." Can there be any doubt that the
two things thus coupled in place — the clause in respect
of tenure during good behaviour and that in respect of
an undiminishable compensation-were equally coupled
in purpose? And is it not plain that their purposes was to
invest the judges with an independence in keeping with
the delicacy and importance of their task, and with the
imperative need for its impartial and fearless
performance? Mr. Hamilton said in explanation and
support of the provision (Federalist No. 79): "Next to
permanency in office, nothing can contribute more to the
independence of the judges than a fixed provision for
their support. . . . In the general course of human
nature, a power over a man's subsistence amounts to a
power over his will.
xxx xxx xxx
These considerations make it very plain, as we think,
that the primary purpose of the prohibition against
diminution was not to benefit the judges, but, like the
clause in respect of tenure, to attract good and
competent men to the bench, and to promote that
independence of action and judgment which is essential
to the maintenance of the guaranties, limitations, and
pervading principles of the constitution, and to the
admiration of justice without respect to persons, and
with equal concern for the poor and the rich.
xxx xxx xxx
But it is urged that what plaintiff was made to pay back
was an income tax, and that a like tax was exacted of
others engaged in private employment.
If the tax in respect of his compensation be prohibited, it
can find no justification in the taxation of other income
as to which there is no prohibition, for, of course, doing
what the Constitution permits gives no license to do
what it prohibits.
The prohibition is general, contains no excepting words,
and appears to be directed against all diminution,
whether for one purpose or another; and the reason for
its adoption, as publicly assigned at the time and
commonly accepted ever since, make with impelling
force for the conclusion that the fathers of the
Constitution intended to prohibit diminution by taxation
as well as otherwise, that they regarded the
independence of the judges as of far greater importance
than any revenue that could come from taxing their
salaries. (American law Reports, annotated, Vol. 11, pp.
522-25; Evans vs. Gore, supra.)
In September 1, 1919, Samuel J. Graham assumed office as
judge of the Unites States court of claims. His salary was taxed
by virtue of the same time income tax of February 24, 1919. At
the time he qualified, a statute fixed his salary at P7,500. He filed
action for reimbursement, submitting the same theory on which
Evans v. Gore had been decided. The Supreme Court of the
United States in 1925 reaffirmed that decision. It overruled the
distinction offered by Solicitor-General Beck that Judge Graham
took office after the income tax had been levied on judicial
salaries, (Evans qualified before), and that Congress had power
"to impose taxes which should apply to the salaries of Federal
judges appointed after the enactment of the taxing statute." (The
law had made no distinction as to judges appointed before or
after its passage)
Fourth period. 1939 — Foiled in their previous attempts, the
Revenue men persisted, and succeeded in inserting in the United
States Revenue Act of June, 1932 the modified proviso that
"gross income" on which taxes were payable included the
compensation "of judges of courts of the United States taking
office after June 6, 1932". Joseph W. Woodrough qualified as
United States circuit judge on May 1, 1933. His salary as judge
was taxed, and before the Supreme Court of the United States
the issue of decrease of remuneration again came up. That court,
however, ruled against him, declaring (in 1939) that Congress
had the power to adopt the law. It said:
The question immediately before us is whether
Congress exceeded its constitutional power in providing
that United States judges appointed after the Revenue
Act of 1932 shall not enjoy immunity from the incidence
of taxation to which everyone else within the defined
classes of income is subjected. Thereby, of course,
Congress has committed itself to the position that a non-
discriminatory tax laid generally on net income is not,
when applied to the income of federal judge, a
diminution of his salary within the prohibition of Article 3,
Sec. 1 of the Constitution. To suggest that it makes
inroads upon the independence of judges who took
office after the Congress has thus charged them with
the common duties of citizenship, by making them bear
their aliquot share of the cost of maintaining the
Government, is to trivialize the great historic experience
on which the framers based the safeguards of Article 3,
Sec. 1. To subject them to a general tax is merely to
recognize that judges also are citizens, and that their
particular function in government does not generate an
immunity from sharing with their fellow citizens the
material burden of the government whose Constitution
and laws they are charged with administering. (O'Malley
vs. Woodrough, 59 S. Ct. 838, A. L. R. 1379.)
Now, the case for the defendant-appellant Collector of Internal
Revenue is premised mainly on this decision (Note A). He claims
it holds "that federal judges are subject to the payment of income
taxes without violating the constitutional prohibition against the
reduction of their salaries during their continuance in office", and
that it "is a complete repudiation of the ratio decidenci of Evans
vs. Gore". To grasp the full import of the O'Malley precedent, we
should bear in mind that:
1. It does not entirely overturn Miles vs. Graham. "To the
extent that what the Court now says is inconsistent with what
said in Miles vs. Graham, the latter can not survive", Justice
Frankfurter announced.
2. It does not expressly touch nor amend the doctrine in Evans
vs, Gore, although it indicates that the Congressional Act in
dispute avoided in part the consequences of that case.
Carefully analyzing the three cases (Evans, Miles and O'Malley)
and piecing them together, the logical conclusion may be
reached that although Congress may validly declare by law that
salaries of judges appointed thereafter shall be taxed as income
(O'Malley vs. Woodrough) it may not tax the salaries of those
judges already in office at the time of such declaration because
such taxation would diminish their salaries (Evans vs. Gore;
Miles vs. Graham). In this manner the rationalizing principle that
will harmonize the allegedly discordant decision may be
condensed.
By the way, Justice Frankfurter, writing the O'Malley decision,
says the Evans precedent met with disfavor from legal
scholarship opinion. Examining the issues of Harvard Law review
at the time of Evans vs. Gore (Frankfurter is a Harvard graduate
and professor), we found that such school publication criticized it.
Believing this to be the "inarticulate consideration that may have
influenced the grounds on which the case went off"4, we looked
into the criticism, and discovered that it was predicated on the
position that the 16th Amendment empowered Congress "to
collect taxes on incomes from whatever source
derived" admitting of no exception. Said the Harvard Law
Journal:
In the recent case of Evans vs. Gore the Supreme Court
of the United States decided that by taxing the salary of
a federal judge as a part of his income, Congress was in
effect reducing his salary and thus violating Art. III, sec.
1, of the Constitution. Admitting for the present purpose
that such a tax really is a reduction of salary, even so it
would seem that the words of the amendment giving
power to tax 'incomes, from whatever source derived',
are sufficiently strong to overrule pro tanto the
provisions of Art. III, sec. 1. But, two years ago, the
court had already suggested that the amendment in no
way extended the subjects open to federal taxation. The
decision in Evans vs. Gore affirms that view, and
virtually strikes from the amendment the words "from
whatever source derived". (Harvard law Review, vol. 34,
p. 70)
The Unites States Court's shift of position5 might be attributed to
the above detraction which, without appearing on the surface, led
to Frankfurter's sweeping expression about judges being also
citizens liable to income tax. But it must be remembered that
undisclosed factor — the 16th Amendment — has no counterpart
in the Philippine legal system. Our Constitution does not repeat it.
Wherefore, as the underlying influence and the unuttered reason
has no validity in this jurisdiction, the broad generality loses much
of its force.
Anyhow the O'Malley case declares no more than that
Congress may validly enact a law taxing the salaries of judges
appointed after its passage. Here in the Philippines no such law
has been approved.
Besides, it is markworthy that, as Judge Woodrough had
qualified after the express legislative declaration taxing salaries,
he could not very well complain. The United States Supreme
Court probably had in mind what in other cases was maintained,
namely, that the tax levied on the salary in effect decreased the
emoluments of the office and therefore the judge qualified with
such reduced emoluments.6
The O'Malley ruling does not cover the situation in which judges
already in office are made to pay tax by executive interpretation,
without express legislative declaration. That state of affairs is
controlled by the administrative and judicial standards herein-
before described in the "second period" of the Federal
Government, namely, the views of Chief Justice Taney and of
Attorney-General Hoar and the constant practice from 1869 to
1938, i.e., when the Income Tax Law merely taxes "income" in
general, it does not include salaries of judges protected from
diminution.
In this connection the respondent would make capital of the
circumstance that the Act of 1932, upheld in the O'Malley case,
has subsequently been amended by making it applicable even to
judges who took office before1932. This shows, the appellant
argues, that Congress interprets the O'Malley ruling to permit
legislative taxation of the salary of judges whether appointed
before the tax or after. The answer to this is that the Federal
Supreme Court expressly withheld opinion on that amendment in
the O'Malley case. Which is significant. Anyway, and again, there
is here no congressional directive taxing judges' salaries.
Wherefore, unless and until our Legislature approves an
amendment to the Income Tax Law expressly taxing "that
salaries of judges thereafter appointed", the O'Malley case is not
relevant. As in the United States during the second period, we
must hold that salaries of judges are not included in the word
"income" taxed by the Income Tax Law. Two paramount
circumstances may additionally be indicated, to wit: First, when
the Income Tax Law was first applied to the Philippines 1913,
taxable "income" did not include salaries of judicial officers when
these are protected from diminution. That was the prevailing
official belief in the United States, which must be deemed to have
been transplanted here;7 and second, when the Philippine
Constitutional Convention approved (in 1935) the prohibition
against diminution off the judges' compensation, the Federal
principle was known that income tax on judicial salaries really
impairs them. Evans vs. Gore and Miles vs. Graham were then
outstanding doctrines; and the inference is not illogical that in
restraining the impairment of judicial compensation the Fathers
of the Constitution intended to preclude taxation of the same.8
It seems that prior to the O'Malley decision the Philippine
Government did not collect income tax on salaries of judges. This
may be gleaned from General Circular No. 449 of the
Department of Finance dated March 4, 1940, which says in part:
xxx xxx xxx
The question of whether or not the salaries of judges
should be taken into account in computing additional
residence taxes is closely linked with the liability of
judges to income tax on their salaries, in fact, whatever
resolution is adopted with respect to either of said taxes
be followed with respect to the other. The opinion of the
Supreme Court of the United States in the case
of O'Malley v. Woodrough, 59 S. Ct. 838, to which the
attention of this department has been drawn, appears to
have enunciated a new doctrine regarding the liability of
judges to income tax upon their salaries. In view of the
fact that the question is of great significance, the matter
was taken up in the Council of State, and the
Honorable, the Secretary of Justice was requested to
give an opinion on whether or not, having in mind the
said decision of the Supreme Court of the United States
in the case of O'Malley v. Woodrough, there is
justification in reversing our present ruling to the effect
that judges are not liable to tax on their salaries. After
going over the opinion of the court in the said case, the
Honorable, the Secretary of Justice, stated that
although the ruling of the Supreme Court of the United
States is not binding in the Philippines, the doctrine
therein enunciated has resolved the issue of the
taxability of judges' salaries into a question of policy.
Forthwith, His Excellency the President decided that the
best policy to adopt would be to collect income and
additional residence taxes from the President of the
Philippines, the members of the Judiciary, and the
Auditor General, and the undersigned was authorized to
act accordingly.
In view of the foregoing, income and additional
residence taxes should be levied on the salaries
received by the President of the Philippines, members
of the Judiciary, and the Auditor General during the
calendar year 1939 and thereafter. . . . . (Emphasis
ours.)
Of course, the Secretary of Justice correctly opined that the
O'Malley decision "resolved the issue of taxability of judges'
salaries into a question of policy." But that policy must be
enunciated by Congressional enactment, as was done in the
O'Malley case, not by Executive Fiat or interpretation.
This is not proclaiming a general tax immunity for men on the
bench. These pay taxes. Upon buying gasoline, or other
commodities, they pay the corresponding duties. Owning real
property, they pay taxes thereon. And on incomes other than their
judicial salary, assessments are levied. It is only when the tax is
charged directly on their salary and the effect of the tax is to
diminish their official stipend — that the taxation must be resisted
as an infringement of the fundamental charter.
Judges would indeed be hapless guardians of the Constitution if
they did not perceive and block encroachments upon their
prerogatives in whatever form. The undiminishable character of
judicial salaries is not a mere privilege of judges — personal and
therefore waivable — but a basic limitation upon legislative or
executive action imposed in the public interest. (Evans vs. Gore)
Indeed the exemption of the judicial salary from reduction by
taxation is not really a gratuity or privilege. Let the highest court
of Maryland speak:
The exemption of the judicial compensation from
reduction is not in any true sense a gratuity, privilege or
exemption. It is essentially and primarily compensation
based upon valuable consideration. The covenant on
the part of the government is a guaranty whose
fulfillment is as much as part of the consideration
agreed as is the money salary. The undertaking has its
own particular value to the citizens in securing the
independence of the judiciary in crises; and in the
establishment of the compensation upon a permanent
foundation whereby judicial preferment may be
prudently accepted by those who are qualified by talent,
knowledge, integrity and capacity, but are not
possessed of such a private fortune as to make an
assured salary an object of personal concern. On the
other hand, the members of the judiciary relinquish their
position at the bar, with all its professional emoluments,
sever their connection with their clients, and dedicate
themselves exclusively to the discharge of the onerous
duties of their high office. So, it is irrefutable that they
guaranty against a reduction of salary by the imposition
of a tax is not an exemption from taxation in the sense
of freedom from a burden or service to which others are
liable. The exemption for a public purpose or a valid
consideration is merely a nominal exemption, since the
valid and full consideration or the public purpose
promoted is received in the place of the tax. Theory and
Practice of Taxation (1900), D. A. Wells, p. 541. (Gordy
vs. Dennis (Md.) 1939, 5 Atl. Rep. 2d Series, p. 80)
It is hard to see, appellants asserts, how the imposition of the
income tax may imperil the independence of the judicial
department. The danger may be demonstrated. Suppose there is
power to tax the salary of judges, and the judiciary incurs the
displeasure of the Legislature and the Executive. In retaliation
the income tax law is amended so as to levy a 30 per cent on all
salaries of government officials on the level of judges. This
naturally reduces the salary of the judges by 30 per cent, but they
may not grumble because the tax is general on all receiving the
same amount of earning, and affects the Executive and the
Legislative branches in equal measure. However, means are
provided thereafter in other laws, for the increase of salaries of
the Executive and the Legislative branches, or their perquisites
such as allowances, per diems, quarters, etc. that actually
compensate for the 30 per cent reduction on their salaries.
Result: Judges compensation is thereby diminished during their
incumbency thanks to the income tax law. Consequence: Judges
must "toe the line" or else. Second consequence: Some few
judges might falter; the great majority will not. But knowing the
frailty of human nature, and this chink in the judicial armor, will
the parties losing their cases against the Executive or the
Congress believe that the judicature has not yielded to their
pressure?
Respondent asserts in argumentation that by executive order the
President has subjected his salary to the income tax law. In our
opinion this shows obviously that, without such voluntary act of
the President, his salary would not be taxable, because of
constitutional protection against diminution. To argue from this
executive gesture that the judiciary could, and should act in like
manner is to assume that, in the matter of compensation and
power and need of security, the judiciary is on a par with the
Executive. Such assumption certainly ignores the prevailing state
of affairs.
The judgment will be affirmed. So ordered.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-6355-56 August 31, 1953
PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-
appellees,
vs.
SATURNINO DAVID, as Collector of Internal
Revenue, defendant-appellant.
Office of the Solicitor General Juan R. Liwag and Solicitor Jose
P. Alejandro for appellant.
Manuel O. Chan for appellees.
MONTEMAYOR, J.:
This is a joint appeal from the decision of the Court of First
Instance of Manila declaring section 13 of Republic Act No. 590
unconstitutional, and ordering the appellant Saturnino David as
Collector of Internal Revenue to re-fund to Justice Pastor M.
Endencia the sum of P1,744.45, representing the income tax
collected on his salary as Associate Justice of the Court of
Appeals in 1951, and to Justice Fernando Jugo the amount of
P2,345.46, representing the income tax collected on his salary
from January 1,1950 to October 19, 1950, as Presiding Justice of
the Court of Appeals, and from October 20, 1950 to December
31,1950, as Associate Justice of the Supreme Court, without
special pronouncement as to costs.
Because of the similarity of the two cases, involving as they do
the same question of law, they were jointly submitted for
determination in the lower court. Judge Higinio B. Macadaeg
presiding, in a rather exhaustive and well considered decision
found and held that under the doctrine laid down by this Court in
the case of Perfecto vs. Meer, 85 Phil., 552, the collection of
income taxes from the salaries of Justice Jugo and Justice
Endencia was a diminution of their compensation and therefore
was in violation of the Constitution of the Philippines, and so
ordered the refund of said taxes.
We see no profit and necessity in again discussing and
considering the proposition and the arguments pro and cons
involved in the case of Perfecto vs. Meer, supra, which are
raised, brought up and presented here. In that case, we have
held despite the ruling enunciated by the United States Federal
Supreme Court in the case of O 'Malley vs. Woodrought 307 U.
S., 277, that taxing the salary of a judicial officer in the
Philippines is a diminution of such salary and so violates the
Constitution. We shall now confine our-selves to a discussion
and determination of the remaining question of whether or not
Republic Act No. 590, particularly section 13, can justify and
legalize the collection of income tax on the salary of judicial
officers.
According to the brief of the Solicitor General on behalf of
appellant Collector of Internal Revenue, our decision in the case
of Perfecto vs. Meer, supra, was not received favorably by
Congress, because immediately after its promulgation, Congress
enacted Republic Act No. 590. To bring home his point, the
Solicitor General reproduced what he considers the pertinent
discussion in the Lower House of House Bill No. 1127 which
became Republic Act No. 590.
For purposes of reference, we are reproducing section 9, Article
VIII of our Constitution:.
SEC. 9. The members of the Supreme Court and all
judges of inferior courts shall hold office during good
behavior, until they reach the age of seventy years, or
become incapacitated to discharge the duties of their
office. They shall receive such compensation as may be
fixed by law, which shall not be diminished during their
continuance in office. Until the Congress shall provide
otherwise, the Chief Justice of the Supreme Court shall
receive an annual compensation of sixteen thousand
pesos, and each Associate Justice, fifteen thousand
pesos.
As already stated construing and applying the above
constitutional provision, we held in the Perfecto case that judicial
officers are exempt from the payment of income tax on their
salaries, because the collection thereof by the Government was a
decrease or diminution of their salaries during their continuance
in office, a thing which is expressly prohibited by the Constitution.
Thereafter, according to the Solicitor General, because Congress
did not favorably receive the decision in the Perfecto case,
Congress promulgated Republic Act No. 590, if not to counteract
the ruling in that decision, at least now to authorize and legalize
the collection of income tax on the salaries of judicial officers. We
quote section 13 of Republic Act No. 590:
SEC 13. No salary wherever received by any public
officer of the Republic of the Philippines shall be
considered as exempt from the income tax, payment of
which is hereby declared not to be dimunition of his
compensation fixed by the Constitution or by law.
So we have this situation. The Supreme Court in a decision
interpreting the Constitution, particularly section 9, Article VIII,
has held that judicial officers are exempt from payment of income
tax on their salaries, because the collection thereof was a
diminution of such salaries, specifically prohibited by the
Constitution. Now comes the Legislature and in section 13,
Republic Act No. 590, says that "no salary wherever received by
any public officer of the Republic (naturally including a judicial
officer) shall be considered as exempt from the income tax," and
proceeds to declare that payment of said income tax is not a
diminution of his compensation. Can the Legislature validly do
this? May the Legislature lawfully declare the collection of
income tax on the salary of a public official, specially a judicial
officer, not a decrease of his salary, after the Supreme Court has
found and decided otherwise? To determine this question, we
shall have to go back to the fundamental principles regarding
separation of powers.
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.
Defining and interpreting the law is a judicial function
and the legislative branch may not limit or restrict the
power granted to the courts by the Constitution. (Bandy
vs. Mickelson et al., 44N. W., 2nd 341, 342.)
When it is clear that a statute transgresses the authority
vested in the legislature by the Constitution, it is the duty
of the courts to declare the act unconstitutional because
they cannot shrink from it without violating their oaths of
office. This duty of the courts to maintain the
Constitution as the fundamental law of the state is
imperative and unceasing; and, as Chief Justice
Marshall said, whenever a statute is in violation of the
fundamental law, the courts must so adjudge and
thereby give effect to the Constitution. Any other course
would lead to the destruction of the Constitution. Since
the question as to the constitutionality of a statute is a
judicial matter, the courts will not decline the exercise of
jurisdiction upon the suggestion that action might be
taken by political agencies in disregard of the judgment
of the judicial tribunals. (11 Am. Jur., 714-715.)
Under the American system of constitutional
government, among the most important functions in
trusted to the judiciary are the interpreting of
Constitutions and, as a closely connected power, the
determination of whether laws and acts of the
legislature are or are not contrary to the provisions of
the Federal and State Constitutions. (11 Am. Jur., 905.).
By legislative fiat as enunciated in section 13, Republic Act NO.
590, Congress says that taxing the salary of a judicial officer is
not a decrease of compensation. This is a clear example of
interpretation or ascertainment of the meaning of the phrase
"which shall not be diminished during their continuance in office,"
found in section 9, Article VIII of the Constitution, referring to the
salaries of judicial officers. This act of interpreting the
Constitution or any part thereof by the Legislature is an invasion
of the well-defined and established province and jurisdiction of
the Judiciary.
The rule is recognized elsewhere that the legislature
cannot pass any declaratory act, or act declaratory of
what the law was before its passage, so as to give it any
binding weight with the courts. A legislative definition of
a word as used in a statute is not conclusive of its
meaning as used elsewhere; otherwise, the legislature
would be usurping a judicial function in defining a term.
(11 Am. Jur., 914, emphasis supplied)
The legislature cannot, upon passing a law which
violates a constitutional provision, validate it so as to
prevent an attack thereon in the courts, by a declaration
that it shall be so construed as not to violate the
constitutional inhibition. (11 Am. Jur., 919, emphasis
supplied)
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 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.
So much for the constitutional aspect of the case. Considering
the practical side thereof, we believe that the collection of income
tax on a salary is an actual and evident diminution thereof. Under
the old system where the in-come tax was paid at the end of the
year or sometime thereafter, the decrease may not be so
apparent and clear. All that the official who had previously
received his full salary was called upon to do, was to fulfill his
obligation and to exercise his privilege of paying his income tax
on his salary. His salary fixed by law was received by him in the
amount of said tax comes from his other sources of income, he
may not fully realize the fact that his salary had been decreased
in the amount of said income tax. But under the present system
of withholding the income tax at the source, where the full
amount of the income tax corresponding to his salary is
computed in advance and divided into equal portions
corresponding to the number of pay-days during the year and
actually deducted from his salary corresponding to each payday,
said official actually does not receive his salary in full, because
the income tax is deducted therefrom every payday, that is to
say, twice a month. Let us take the case of Justice Endencia. As
Associate Justice of the Court of Appeals, his salary is fixed at
p12,000 a year, that is to say, he should receive P1,000 a month
or P500 every payday, — fifteenth and end of month. In the
present case, the amount collected by the Collector of Internal
Revenue on said salary is P1,744.45 for one year. Divided by
twelve (months) we shall have P145.37 a month. And further
dividing it by two paydays will bring it down to P72.685, which is
the income tax deducted form the collected on his salary each
half month. So, if Justice Endencia's salary as a judicial officer
were not exempt from payment of the income tax, instead of
receiving P500 every payday, he would be actually receiving
P427.31 only, and instead of receiving P12,000 a year, he would
be receiving but P10,255.55. Is it not therefor clear that every
payday, his salary is actually decreased by P72.685 and every
year is decreased by P1,744.45?
Reading the discussion in the lower House in connection with
House Bill No. 1127, which became Republic Act No. 590, it
would seem that one of the main reasons behind the enactment
of the law was the feeling among certain legislators that
members of the Supreme Court should not enjoy any exemption
and that as citizens, out of patriotism and love for their country,
they should pay income tax on their salaries. It might be stated in
this connection that the exemption is not enjoyed by the
members of the Supreme Court alone but also by all judicial
officers including Justices of the Court of Appeals and judges of
inferior courts. The exemption also extends to other constitutional
officers, like the President of the Republic, the Auditor General,
the members of the Commission on Elections, and possibly
members of the Board of Tax Appeals, commissioners of the
Public Service Commission, and judges of the Court of Industrial
Relations. Compares to the number of all these officials, that of
the Supreme Court Justices is relatively insignificant. There are
more than 990 other judicial officers enjoying the exemption,
including 15 Justices of the Court of Appeals, about 107 Judges
of First Instance, 38 Municipal Judges and about 830 Justices of
the Peace. The reason behind the exemption in the Constitution,
as interpreted by the United States Federal Supreme Court and
this Court, is to preserve the independence of the Judiciary, not
only of this High Tribunal but of the other courts, whose present
membership number more than 990 judicial officials.
The exemption was not primarily intended to benefit judicial
officers, but was grounded on public policy. As said by Justice
Van Devanter of the United States Supreme Court in the case of
Evans vs. Gore (253 U. S., 245):
The primary purpose of the prohibition against
diminution was not to benefit the judges, but, like the
clause in respect of tenure, to attract good and
competent men to the bench and to promote that
independence of action and judgment which is essential
to the maintenance of the guaranties, limitations and
pervading principles of the Constitution and to the
administration of justice without respect to person and
with equal concern for the poor and the rich. Such being
its purpose, it is to be construed, not as a private grant,
but as a limitation imposed in the public interest; in other
words, not restrictively, but in accord with its spirit and
the principle on which it proceeds.
Having in mind the limited number of judicial officers in the
Philippines enjoying this exemption, especially when the great
bulk thereof are justices of the peace, many of them receiving as
low as P200 a month, and considering further the other
exemptions allowed by the income tax law, such as P3,000 for a
married person and P600 for each dependent, the amount of
national revenue to be derived from income tax on the salaries of
judicial officers, were if not for the constitutional exemption, could
not be large or substantial. But even if it were otherwise, it should
not affect, much less outweigh the purpose and the
considerations that prompted the establishment of the
constitutional exemption. In the same case of Evans vs. Gore,
supra, the Federal Supreme Court declared "that they (fathers of
the Constitution) regarded the independence of the judges as far
as greater importance than any revenue that could come from
taxing their salaries.
When a judicial officer assumed office, he does not exactly ask
for exemption from payment of income tax on his salary, as a
privilege . It is already attached to his office, provided and
secured by the fundamental law, not primarily for his benefit, but
based on public interest, to secure and preserve his
independence of judicial thought and action. When we come to
the members of the Supreme Court, this excemption to them is
relatively of short duration. Because of the limited membership in
this High Tribunal, eleven, and due to the high standards of
experience, practice and training required, one generally enters
its portals and comes to join its membership quite late in life, on
the aver-age, around his sixtieth year, and being required to
retire at seventy, assuming that he does not die or become
incapacitated earlier, naturally he is not in a position to receive
the benefit of exemption for long. It is rather to the justices of the
peace that the exemption can give more benefit. They are
relatively more numerous, and because of the meager salary
they receive, they can less afford to pay the income tax on it and
its diminution by the amount of the income tax if paid would be
real, substantial and onerous.
Considering exemption in the abstract, there is nothing unusual
or abhorrent in it, as long as it is based on public policy or public
interest. While all other citizens are subject to arrest when
charged with the commission of a crime, members of the Senate
and House of Representatives except in cases of treason, felony
and breach of the peace are exempt from arrest, during their
attendance in the session of the Legislature; and while all other
citizens are generally liable for any speech, remark or statement,
oral or written, tending to cause the dishonor, discredit or
contempt of a natural or juridical person or to blacken the
memory of one who is dead, Senators and Congressmen in
making such statements during their sessions are extended
immunity and exemption.
And as to tax exemption, there are not a few citizens who enjoy
this exemption. Persons, natural and juridical, are exempt from
taxes on their lands, buildings and improvements thereon when
used exclusively for educational purposes, even if they derive
income therefrom. (Art. VI, Sec. 22 [3].) Holders of government
bonds are exempted from the payment of taxes on the income or
interest they receive therefrom (sec. 29 (b) [4], National Internal
Revenue Code as amended by Republic Act No. 566). Payments
or income received by any person residing in the Philippines
under the laws of the United States administered by the United
States Veterans Administration are exempt from taxation.
(Republic Act No. 360). Funds received by officers and enlisted
men of the Philippine Army who served in the Armed Forces of
the United States, allowances earned by virtue of such services
corresponding to the taxable years 1942 to 1945, inclusive, are
exempted from income tax. (Republic Act No. 210). The payment
of wages and allowances of officers and enlisted men of the
Army Forces of the Philippines sent to Korea are also exempted
from taxation. (Republic Act No. 35). In other words, for reasons
of public policy and public interest, a citizen may justifiably by
constitutional provision or statute be exempted from his ordinary
obligation of paying taxes on his income. Under the same public
policy and perhaps for the same it not higher considerations, the
framers of the Constitution deemed it wise and necessary to
exempt judicial officers from paying taxes on their salaries so as
not to decrease their compensation, thereby insuring the
independence of the Judiciary.
In conclusion we reiterate the doctrine laid down in the case
of Perfecto vs. Meer, supra, to the effect that the collection of
income tax on the salary of a judicial officer is a diminution
thereof and so violates the Constitution. We further hold that the
interpretation and application of the Constitution and of statutes
is within the exclusive province and jurisdiction of the Judicial
department, and that in enacting a law, the Legislature may not
legally provide therein that it be interpreted in such a way that it
may not violate a Constitutional prohibition, thereby tying the
hands of the courts in their task of later interpreting said statute,
specially when the interpretation sought and provided in said
statute runs counter to a previous interpretation already given in
a case by the highest court of the land.
In the views of the foregoing considerations, the decision
appealed from is hereby affirmed, with no pronouncement as to
costs.
Republic of the Philippines
SUPREME COURT
Manila
 EN BANC
G.R. No. 78780 July 23, 1987
DAVID G. NITAFAN, WENCESLAO M. POLO, and MAXIMO A.
SAVELLANO, JR., petitioners,
vs.
COMMISSIONER OF INTERNAL REVENUE and THE
FINANCIAL OFFICER, SUPREME COURT OF THE
PHILIPPINES, respondents.
RESOLUTION
MELENCIO-HERRERA, J.:
Petitioners, the duly appointed and qualified Judges presiding
over Branches 52, 19 and 53, respectively, of the Regional Trial
Court, National Capital Judicial Region, all with stations in
Manila, seek to prohibit and/or perpetually enjoin respondents,
the Commissioner of Internal Revenue and the Financial Officer
of the Supreme Court, from making any deduction of withholding
taxes from their salaries.
In a nutshell, they submit that "any tax withheld from their
emoluments or compensation as judicial officers constitutes a
decrease or diminution of their salaries, contrary to the provision
of Section 10, Article VIII of the 1987 Constitution mandating that
"(d)uring their continuance in office, their salary shall not be
decreased," even as it is anathema to the Ideal of an
independent judiciary envisioned in and by said Constitution."
It may be pointed out that, early on, the Court had dealt with the
matter administratively in response to representations that the
Court direct its Finance Officer to discontinue the withholding of
taxes from salaries of members of the Bench. Thus, on June 4,
1987, the Court en banc had reaffirmed the Chief Justice's
directive as follows:
RE: Question of exemption from income taxation. —
The Court REAFFIRMED the Chief Justice's previous
and standing directive to the Fiscal Management and
Budget Office of this Court to continue with the
deduction of the withholding taxes from the salaries of
the Justices of the Supreme Court as well as from the
salaries of all other members of the judiciary.
That should have resolved the question. However, with the filing
of this petition, the Court has deemed it best to settle the legal
issue raised through this judicial pronouncement. As will be
shown hereinafter, the clear intent of the Constitutional
Commission was to delete the proposed express grant of
exemption from payment of income tax to members of the
Judiciary, so as to "give substance to equality among the three
branches of Government" in the words of Commissioner Rigos.
In the course of the deliberations, it was further expressly made
clear, specially with regard to Commissioner Joaquin F. Bernas'
accepted amendment to the amendment of Commissioner Rigos,
that the salaries of members of the Judiciary would be subject to
the general income tax applied to all taxpayers.
This intent was somehow and inadvertently not clearly set forth in
the final text of the Constitution as approved and ratified in
February, 1987 (infra, pp. 7-8). Although the intent may have
been obscured by the failure to include in the General Provisions
a proscription against exemption of any public officer or
employee, including constitutional officers, from payment of
income tax, the Court since then has authorized the continuation
of the deduction of the withholding tax from the salaries of the
members of the Supreme Court, as well as from the salaries of
all other members of the Judiciary. The Court hereby makes of
record that it had then discarded the ruling in Perfecto vs. Meer
and Endencia vs. David, infra, that declared the salaries of
members of the Judiciary exempt from payment of the income
tax and considered such payment as a diminution of their
salaries during their continuance in office. The Court hereby
reiterates that the salaries of Justices and Judges are properly
subject to a general income tax law applicable to all income
earners and that the payment of such income tax by Justices and
Judges does not fall within the constitutional protection against
decrease of their salaries during their continuance in office.
A comparison of the Constitutional provisions involved is called
for. The 1935 Constitution provided:
... (The members of the Supreme Court and all judges
of inferior courts) shall receive such compensation as
may be fixed by law, which shall not
be diminished during their continuance in
office ... 1 (Emphasis supplied).
Under the 1973 Constitution, the same provision read:
The salary of the Chief Justice and of the Associate
Justices of the Supreme court, and of judges of inferior
courts shall be fixed by law, which shall not
be decreased during their continuance in
office. ... 2 (Emphasis ours).
And in respect of income tax exemption, another provision in the
same 1973 Constitution specifically stipulated:
No salary or any form of emolument of any public officer
or employee, including constitutional officers, shall be
exempt from payment of income tax. 3
The provision in the 1987 Constitution, which petitioners rely on,
reads:
The salary of the Chief Justice and of the Associate
Justices of the Supreme Court, and of judges of lower
courts shall be fixed by law. During their continuance in
office, their salary shall not be decreased. 4(Emphasis
supplied).
The 1987 Constitution does not contain a provision similar to
Section 6, Article XV of the 1973 Constitution, for which reason,
petitioners claim that the intent of the framers is to revert to the
original concept of "non-diminution "of salaries of judicial officers.
The deliberations of the 1986 Constitutional Commission relevant
to Section 10, Article VIII, negate such contention.
The draft proposal of Section 10, Article VIII, of the 1987
Constitution read:
Section 13. The salary of the Chief Justice and the
Associate Justices of the Supreme Court and of judges
of the lower courts shall be fixed by law. During their
continuance in office, their salary shall not be
diminished nor subjected to income tax. Until the
National Assembly shall provide otherwise, the Chief
Justice shall receive an annual salary of
_____________ and each Associate Justice
______________ pesos. 5(Emphasis ours)
During the debates on the draft Article (Committee Report No.
18), two Commissioners presented their objections to the
provision on tax exemption, thus:
 MS. AQUINO. Finally, on the matter of exemption from
tax of the salary of justices, does this not violate the
principle of the uniformity of taxation and the principle of
equal protection of the law? After all, tax is levied not on
the salary but on the combined income, such that when
the judge receives a salary and it is comingled with the
other income, we tax the income, not the salary. Why do
we have to give special privileges to the salary of
justices?
MR. CONCEPCION. It is the independence of the
judiciary. We prohibit the increase or decrease of their
salary during their term. This is an indirect way of
decreasing their salary and affecting the independence
of the judges.
MS. AQUINO. I appreciate that to be in the nature of a
clause to respect tenure, but the special privilege on
taxation might, in effect, be a violation of the principle of
uniformity in taxation and the equal protection clause. 6
xxx xxx xxx
MR. OPLE. x x x
Of course, we share deeply the concern expressed by
the sponsor, Commissioner Roberto Concepcion, for
whom we have the highest respect, to surround the
Supreme Court and the judicial system as a whole with
the whole armor of defense against the executive and
legislative invasion of their independence. But in so
doing, some of the citizens outside, especially the
humble government employees, might say that in trying
to erect a bastion of justice, we might end up with the
fortress of privileges, an island of extra territoriality
under the Republic of the Philippines, because a good
number of powers and rights accorded to the Judiciary
here may not be enjoyed in the remotest degree by
other employees of the government.
An example is the exception from income tax, which is a
kind of economic immunity, which is, of course, denied
to the entire executive department and the legislative. 7
And during the period of amendments on the draft Article, on July
14, 1986, Commissioner Cirilo A. Rigos proposed that the term
"diminished" be changed to "decreased" and that the words "nor
subjected to income tax" be deleted so as to "give substance to
equality among the three branches in the government.
Commissioner Florenz D. Regalado, on behalf of the Committee
on the Judiciary, defended the original draft and referred to the
ruling of this Court in Perfecto vs. Meer 8 that "the independence
of the judges is of far greater importance than any revenue that
could come from taxing their salaries." Commissioner Rigos then
moved that the matter be put to a vote. Commissioner Joaquin
G. Bernas stood up "in support of an amendment to the
amendment with the request for a modification of the
amendment," as follows:
FR. BERNAS. Yes. I am going to propose an
amendment to the amendment saying that it is not
enough to drop the phrase "shall not be subjected to
income tax," because if that is all that the Gentleman
will do, then he will just fall back on the decision
in Perfecto vs. Meer and in Dencia vs. David [should be
Endencia and Jugo vs. David, etc., 93 Phil. 696[ which
excludes them from income tax, but rather I would
propose that the statement will read: "During their
continuance in office, their salary shall not be
diminished BUT MAY BE SUBJECT TO GENERAL
INCOME TAX."IN support of this position, I would say
that the argument seems to be that the justice and
judges should not be subjected to income tax because
they already gave up the income from their practice.
That is true also of Cabinet members and all other
employees. And I know right now, for instance, there are
many people who have accepted employment in the
government involving a reduction of income and yet are
still subject to income tax. So, they are not the only
citizens whose income is reduced by accepting service
in government.
Commissioner Rigos accepted the proposed amendment to the
amendment. Commissioner Rustico F. de los Reyes, Jr. then
moved for a suspension of the session. Upon resumption,
Commissioner Bernas announced:
During the suspension, we came to an understanding
with the original proponent, Commissioner Rigos, that
his amendment on page 6,. line 4 would read: "During
their continuance in office, their salary shall not be
DECREASED."But this is on the understanding that
there will be a provision in the Constitution similar to
Section 6 of Article XV, the General Provisions of the
1973 Constitution, which says:
No salary or any form of emolument of any
public officer or employee, including
constitutional officers, shall be exempt from
payment of income tax.
So, we put a period (.) after "DECREASED" on the
understanding that the salary of justices is subject to
tax.
When queried about the specific Article in the General Provisions
on non-exemption from tax of salaries of public officers,
Commissioner Bernas replied:
FR BERNAS. Yes, I do not know if such an article will be
found in the General Provisions. But at any rate, when
we put a period (.) after "DECREASED," it is on the
understanding that the doctrine in Perfecto vs. Meer and
Dencia vs. David will not apply anymore.
The amendment to the original draft, as discussed and
understood, was finally approved without objection.
THE PRESIDING OFFICER (Mr. Bengzon). The
understanding, therefore, is that there will be a provision
under the Article on General Provisions. Could
Commissioner Rosario Braid kindly take note that the
salaries of officials of the government including
constitutional officers shall not be exempt from income
tax? The amendment proposed herein and accepted by
the Committee now reads as follows: "During their
continuance in office, their salary shall not be
DECREASED"; and the phrase "nor subjected to
income tax" is deleted.9
The debates, interpellations and opinions expressed regarding
the constitutional provision in question until it was finally
approved by the Commission disclosed that the true intent of the
framers of the 1987 Constitution, in adopting it, was to make the
salaries of members of the Judiciary taxable. The ascertainment
of that intent is but in keeping with the fundamental principle of
constitutional construction that the intent of the framers of the
organic law and of the people adopting it should be given
effect.10 The primary task in constitutional construction is to
ascertain and thereafter assure the realization of the purpose of
the framers and of the people in the adoption of the
Constitution.11it may also be safely assumed that the people in
ratifying the Constitution were guided mainly by the explanation
offered by the framers.12 1avvphi1
Besides, construing Section 10, Articles VIII, of the 1987
Constitution, which, for clarity, is again reproduced hereunder:
The salary of the Chief Justice and of the Associate
Justices of the Supreme Court, and of judges of lower
courts shall be fixed by law. During their continuance in
office, their salary shall not be decreased. (Emphasis
supplied).
it is plain that the Constitution authorizes Congress to pass a law
fixing another rate of compensation of Justices and Judges but
such rate must be higher than that which they are receiving at
the time of enactment, or if lower, it would be applicable only to
those appointed after its approval. It would be a strained
construction to read into the provision an exemption from
taxation in the light of the discussion in the Constitutional
Commission.
With the foregoing interpretation, and as stated heretofore, the
ruling that "the imposition of income tax upon the salary of judges
is a dimunition thereof, and so violates the Constitution"
in Perfecto vs. Meer,13 as affirmed in Endencia vs. David 14 must
be declared discarded. The framers of the fundamental law, as
the alter ego of the people, have expressed in clear and
unmistakable terms the meaning and import of Section 10, Article
VIII, of the 1987 Constitution that they have adopted
Stated otherwise, we accord due respect to the intent of the
people, through the discussions and deliberations of their
representatives, in the spirit that all citizens should bear their
aliquot part of the cost of maintaining the government and should
share the burden of general income taxation equitably.
WHEREFORE, the instant petition for Prohibition is hereby
dismissed.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-45459 March 13, 1937
GREGORIO AGLIPAY, petitioner,
vs.
JUAN RUIZ, respondent.
Vicente Sotto for petitioner.
Office of the Solicitor-General Tuason for respondent.
LAUREL, J.:
The petitioner, Mons. Gregorio Aglipay, Supreme Head of the
Philippine Independent Church, seeks the issuance from this
court of a writ of prohibition to prevent the respondent Director of
Posts from issuing and selling postage stamps commemorative
of the Thirty-third International Eucharistic Congress.
In May, 1936, the Director of Posts announced in the dailies of
Manila that he would order the issues of postage stamps
commemorating the celebration in the City of Manila of the Thirty-
third international Eucharistic Congress, organized by the Roman
Catholic Church. The petitioner, in the fulfillment of what he
considers to be a civic duty, requested Vicente Sotto, Esq.,
member of the Philippine Bar, to denounce the matter to the
President of the Philippines. In spite of the protest of the
petitioner's attorney, the respondent publicly announced having
sent to the United States the designs of the postage stamps for
printing as follows:
"In the center is chalice, with grape vine and stalks of wheat as
border design. The stamps are blue, green, brown, cardinal red,
violet and orange, 1 inch by 1,094 inches. The denominations are
for 2, 6, 16, 20, 36 and 50 centavos." The said stamps were
actually issued and sold though the greater part thereof, to this
day, remains unsold. The further sale of the stamps is sought to
be prevented by the petitioner herein.
The Solicitor-General contends that the writ of prohibition is not
the proper legal remedy in the instant case, although he admits
that the writ may properly restrain ministerial functions. While,
generally, prohibition as an extraordinary legal writ will not issue
to restrain or control the performance of other than judicial or
quasi-judicial functions (50 C. J., 6580, its issuance and
enforcement are regulated by statute and in this jurisdiction may
issue to . . . inferior tribunals, corporations, boards, or persons,
whether excercising functions judicial or ministerial, which are
without or in excess of the jurisdiction of such tribunal,
corporation, board, or person, . . . ." (Secs. 516 and 226, Code of
Civil Procedure.) The terms "judicial" and "ministerial" used with
reference to "functions" in the statute are undoubtedly
comprehensive and include the challenged act of the respondent
Director of Posts in the present case, which act because alleged
to be violative of the Constitution is a fortiorari "without or in
excess of . . . jurisdiction." The statutory rule, therefore, in the
jurisdiction is that the writ of prohibition is not confined
exclusively to courts or tribunals to keep them within the limits of
their own jurisdiction and to prevent them from encroaching upon
the jurisdiction of other tribunals, but will issue, in appropriate
cases, to an officer or person whose acts are without or in excess
of his authority. Not infrequently, "the writ is granted, where it is
necessary for the orderly administration of justice, or to prevent
the use of the strong arm of the law in an oppressive or vindictive
manner, or a multiplicity of actions." (Dimayuga and Fajardo vs.
Fernandez [1923], 43 Phil., 304, 307.)
The more important question raised refers to the alleged violation
of the Constitution by the respondent in issuing and selling
postage stamps commemorative of the Thirty-third International
Eucharistic Congress. It is alleged that this action of the
respondent is violative of the provisions of section 23, subsection
3, Article VI, of the Constitution of the Philippines, which provides
as follows:
No public money or property shall ever be appropriated,
applied, or used, directly or indirectly, for the use,
benefit, or support of any sect, church, denomination,
secretarian, institution, or system of religion, or for the
use, benefit, or support of any priest, preacher, minister,
or other religious teacher or dignitary as such, except
when such priest, preacher, minister, or dignitary is
assigned to the armed forces or to any penal institution,
orphanage, or leprosarium.
The prohibition herein expressed is a direct corollary of the
principle of separation of church and state. Without the necessity
of adverting to the historical background of this principle in our
country, it is sufficient to say that our history, not to speak of the
history of mankind, has taught us that the union of church and
state is prejudicial to both, for ocassions might arise when the
estate will use the church, and the church the state, as a weapon
in the furtherance of their recognized this principle of separation
of church and state in the early stages of our constitutional
development; it was inserted in the Treaty of Paris between the
United States and Spain of December 10, 1898, reiterated in
President McKinley's Instructions of the Philippine Commission,
reaffirmed in the Philippine Bill of 1902 and in the autonomy Act
of August 29, 1916, and finally embodied in the constitution of the
Philippines as the supreme expression of the Filipino people. It is
almost trite to say now that in this country we enjoy both religious
and civil freedom. All the officers of the Government, from the
highest to the lowest, in taking their oath to support and defend
the constitution, bind themselves to recognize and respect the
constitutional guarantee of religious freedom, with its inherent
limitations and recognized implications. It should be stated that
what is guaranteed by our Constitution is religious liberty, not
mere religious toleration.
Religious freedom, however, as a constitutional mandate is not
inhibition of profound reverence for religion and is not denial of its
influence in human affairs. Religion as a profession of faith to an
active power that binds and elevates man to his Creator is
recognized. And, in so far as it instills into the minds the purest
principles of morality, its influence is deeply felt and highly
appreciated. When the Filipino people, in the preamble of their
Constitution, implored "the aid of Divine Providence, in order to
establish a government that shall embody their ideals, conserve
and develop the patrimony of the nation, promote the general
welfare, and secure to themselves and their posterity the
blessings of independence under a regime of justice, liberty and
democracy," they thereby manifested reliance upon Him who
guides the destinies of men and nations. The elevating influence
of religion in human society is recognized here as elsewhere. In
fact, certain general concessions are indiscriminately accorded to
religious sects and denominations. Our Constitution and laws
exempt from taxation properties devoted exclusively to religious
purposes (sec. 14, subsec. 3, Art. VI, Constitution of the
Philippines and sec. 1, subsec. 4, Ordinance appended thereto;
Assessment Law, sec. 344, par. [c]. Adm. Code). Sectarian aid is
not prohibited when a priest, preacher, minister or other religious
teacher or dignitary as such is assigned to the armed forces or to
any penal institution, orphanage or leprosarium 9 sec. 13,
subsec. 3, Art. VI, Constitution of the Philippines). Optional
religious instruction in the public schools is by constitutional
mandate allowed (sec. 5, Art. XIII, Constitution of the Philippines,
in relation to sec. 928, Adm. Code). Thursday and Friday of Holy
Week, Thanksgiving Day, Christmas Day, and Sundays and
made legal holidays (sec. 29, Adm. Code) because of the secular
idea that their observance is conclusive to beneficial moral
results. The law allows divorce but punishes polygamy and
bigamy; and certain crimes against religious worship are
considered crimes against the fundamental laws of the state
(see arts. 132 and 133, Revised Penal Code).
In the case at bar, it appears that the respondent Director of
Posts issued the postage stamps in question under the
provisions of Act No. 4052 of the Philippine Legislature. This Act
is as follows:
No. 4052. — AN ACT APPROPRIATING THE SUM OF
SIXTY THOUSAND PESOS AND MAKING THE SAME
AVAILABLE OUT OF ANY FUNDS IN THE INSULAR
TREASURY NOT OTHERWISE APPROPRIATED FOR
THE COST OF PLATES AND PRINTING OF POSTAGE
STAMPS WITH NEW DESIGNS, AND FOR OTHER
PURPOSES.
Be it enacted by the Senate and House of
Representatives of the Philippines in Legislature
assembled and by the authority of the same:
SECTION 1. The sum of sixty thousand pesos is hereby
appropriated and made immediately available out of any funds in
the Insular Treasury not otherwise appropriated, for the costs of
plates and printing of postage stamps with new designs, and
other expenses incident thereto.
SEC. 2. The Director of Posts, with the approval of the Secretary
of Public Works and Communications, is hereby authorized to
dispose of the whole or any portion of the amount herein
appropriated in the manner indicated and as often as may be
deemed advantageous to the Government.
SEC. 3. This amount or any portion thereof not otherwise
expended shall not revert to the Treasury.
SEC. 4. This act shall take effect on its approval.
Approved, February 21, 1933.
It will be seen that the Act appropriates the sum of sixty thousand
pesos for the costs of plates and printing of postage stamps with
new designs and other expenses incident thereto, and authorizes
the Director of Posts, with the approval of the Secretary of Public
Works and Communications, to dispose of the amount
appropriated in the manner indicated and "as often as may be
deemed advantageous to the Government". The printing and
issuance of the postage stamps in question appears to have
been approved by authority of the President of the Philippines in
a letter dated September 1, 1936, made part of the respondent's
memorandum as Exhibit A. The respondent alleges that the
Government of the Philippines would suffer losses if the writ
prayed for is granted. He estimates the revenue to be derived
from the sale of the postage stamps in question at P1,618,17.10
and states that there still remain to be sold stamps worth
P1,402,279.02.
Act No. 4052 contemplates no religious purpose in view. What it
gives the Director of Posts is the discretionary power to
determine when the issuance of special postage stamps would
be "advantageous to the Government." Of course, the phrase
"advantageous to the Government" does not authorize the
violation of the Constitution. It does not authorize the
appropriation, use or application of public money or property for
the use, benefit or support of a particular sect or church. In the
present case, however, the issuance of the postage stamps in
question by the Director of Posts and the Secretary of Public
Works and Communications was not inspired by any sectarian
denomination. The stamps were not issue and sold for the benefit
of the Roman Catholic Church. Nor were money derived from the
sale of the stamps given to that church. On the contrary, it
appears from the latter of the Director of Posts of June 5, 1936,
incorporated on page 2 of the petitioner's complaint, that the only
purpose in issuing and selling the stamps was "to advertise the
Philippines and attract more tourist to this country." The officials
concerned merely, took advantage of an event considered of
international importance "to give publicity to the Philippines and
its people" (Letter of the Undersecretary of Public Works and
Communications to the President of the Philippines, June 9,
1936; p. 3, petitioner's complaint). It is significant to note that the
stamps as actually designed and printed (Exhibit 2), instead of
showing a Catholic Church chalice as originally planned, contains
a map of the Philippines and the location of the City of Manila,
and an inscription as follows: "Seat XXXIII International
Eucharistic Congress, Feb. 3-7,1937." What is emphasized is not
the Eucharistic Congress itself but Manila, the capital of the
Philippines, as the seat of that congress. It is obvious that while
the issuance and sale of the stamps in question may be said to
be inseparably linked with an event of a religious character, the
resulting propaganda, if any, received by the Roman Catholic
Church, was not the aim and purpose of the Government. We are
of the opinion that the Government should not be embarassed in
its activities simply because of incidental results, more or less
religious in character, if the purpose had in view is one which
could legitimately be undertaken by appropriate legislation. The
main purpose should not be frustrated by its subordinate to mere
incidental results not contemplated. (Vide Bradfield vs. Roberts,
175 U. S., 295; 20 Sup. Ct. Rep., 121; 44 Law. ed., 168.)
We are much impressed with the vehement appeal of counsel for
the petitioner to maintain inviolate the complete separation of
church and state and curb any attempt to infringe by indirection a
constitutional inhibition. Indeed, in the Philippines, once the
scene of religious intolerance and prescription, care should be
taken that at this stage of our political development nothing is
done by the Government or its officials that may lead to the belief
that the Government is taking sides or favoring a particular
religious sect or institution. But, upon very serious reflection,
examination of Act No. 4052, and scrutiny of the attending
circumstances, we have come to the conclusion that there has
been no constitutional infraction in the case at bar, Act No. 4052
grants the Director of Posts, with the approval of the Secretary of
Public Works and Communications, discretion to misuse postage
stamps with new designs "as often as may be deemed
advantageous to the Government." Even if we were to assume
that these officials made use of a poor judgment in issuing and
selling the postage stamps in question still, the case of the
petitioner would fail to take in weight. Between the exercise of a
poor judgment and the unconstitutionality of the step taken, a
gap exists which is yet to be filled to justify the court in setting
aside the official act assailed as coming within a constitutional
inhibition.
The petition for a writ of prohibition is hereby denied, without
pronouncement as to costs. So ordered.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. 122156 February 3, 1997
MANILA PRINCE HOTEL petitioner,
vs.
GOVERNMENT SERVICE INSURANCE SYSTEM, MANILA
HOTEL CORPORATION, COMMITTEE ON PRIVATIZATION
and OFFICE OF THE GOVERNMENT CORPORATE
COUNSEL, respondents.
BELLOSILLO, J.:
The FiIipino First Policy enshrined in the 1987
Constitution, i.e., in the grant of rights, privileges, and
concessions covering the national economy and patrimony, the
State shall give preference to qualified Filipinos,1 is in oked by
petitioner in its bid to acquire 51% of the shares of the Manila
Hotel Corporation (MHC) which owns the historic Manila Hotel.
Opposing, respondents maintain that the provision is not self-
executing but requires an implementing legislation for its
enforcement. Corollarily, they ask whether the 51% shares form
part of the national economy and patrimony covered by the
protective mantle of the Constitution.
The controversy arose when respondent Government Service
Insurance System (GSIS), pursuant to the privatization program
of the Philippine Government under Proclamation No. 50 dated 8
December 1986, decided to sell through public bidding 30% to
51% of the issued and outstanding shares of respondent MHC.
The winning bidder, or the eventual "strategic partner," is to
provide management expertise and/or an international
marketing/reservation system, and financial support to
strengthen the profitability and performance of the Manila
Hotel.2 In a close bidding held on 18 September 1995 only two
(2) bidders participated: petitioner Manila Prince Hotel
Corporation, a Filipino corporation, which offered to buy 51% of
the MHC or 15,300,000 shares at P41.58 per share, and Renong
Berhad, a Malaysian firm, with ITT-Sheraton as its hotel operator,
which bid for the same number of shares at P44.00 per share, or
P2.42 more than the bid of petitioner.
Pertinent provisions of the bidding rules prepared by respondent
GSIS state —
I. EXECUTION OF THE NECESSARY CONTRACTS
WITH GSIS/MHC —
1. The Highest Bidder must comply with the conditions set forth
below by October 23, 1995 (reset to November 3, 1995) or the
Highest Bidder will lose the right to purchase the Block of Shares
and GSIS will instead offer the Block of Shares to the other
Qualified Bidders:
a. The Highest Bidder must negotiate and execute with
the GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other type of
contract specified by the Highest Bidder in its strategic
plan for the Manila Hotel. . . .
b. The Highest Bidder must execute the Stock Purchase
and Sale Agreement with GSIS . . . .
K. DECLARATION OF THE WINNING
BIDDER/STRATEGIC PARTNER —
The Highest Bidder will be declared the Winning Bidder/Strategic
Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC
not later than October 23, 1995 (reset to November 3,
1995); and
b. Requisite approvals from the GSIS/MHC and COP
(Committee on Privatization)/OGCC (Office of the
Government Corporate Counsel) are obtained.3
Pending the declaration of Renong Berhad as the winning
bidder/strategic partner and the execution of the necessary
contracts, petitioner in a letter to respondent GSIS dated 28
September 1995 matched the bid price of P44.00 per share
tendered by Renong Berhad.4 In a subsequent letter dated 10
October 1995 petitioner sent a manager's check issued by
Philtrust Bank for Thirty-three Million Pesos (P33.000.000.00)
as Bid Security to match the bid of the Malaysian Group,
Messrs. Renong Berhad . . .5 which respondent GSIS refused to
accept.
On 17 October 1995, perhaps apprehensive that respondent
GSIS has disregarded the tender of the matching bid and that the
sale of 51% of the MHC may be hastened by respondent GSIS
and consummated with Renong Berhad, petitioner came to this
Court on prohibition and mandamus. On 18 October 1995 the
Court issued a temporary restraining order enjoining respondents
from perfecting and consummating the sale to the Malaysian
firm.
On 10 September 1996 the instant case was accepted by the
Court En Banc after it was referred to it by the First Division. The
case was then set for oral arguments with former Chief Justice
Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici
curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of
the 1987 Constitution and submits that the Manila Hotel has
been identified with the Filipino nation and has practically
become a historical monument which reflects the vibrancy of
Philippine heritage and culture. It is a proud legacy of an earlier
generation of Filipinos who believed in the nobility and
sacredness of independence and its power and capacity to
release the full potential of the Filipino people. To all intents and
purposes, it has become a part of the national
patrimony.6 Petitioner also argues that since 51% of the shares of
the MHC carries with it the ownership of the business of the hotel
which is owned by respondent GSIS, a government-owned and
controlled corporation, the hotel business of respondent GSIS
being a part of the tourism industry is unquestionably a part of
the national economy. Thus, any transaction involving 51% of the
shares of stock of the MHC is clearly covered by the
term national economy, to which Sec. 10, second par., Art. XII,
1987 Constitution, applies.7
It is also the thesis of petitioner that since Manila Hotel is part of
the national patrimony and its business also unquestionably part
of the national economy petitioner should be preferred after it has
matched the bid offer of the Malaysian firm. For the bidding rules
mandate that if for any reason, the Highest Bidder cannot be
awarded the Block of Shares, GSIS may offer this to the other
Qualified Bidders that have validly submitted bids provided that
these Qualified Bidders are willing to match the highest bid in
terms of price per share.8
Respondents except. They maintain that: First, Sec. 10, second
par., Art. XII, of the 1987 Constitution is merely a statement of
principle and policy since it is not a self-executing provision and
requires implementing legislation(s) . . . Thus, for the said
provision to Operate, there must be existing laws "to lay down
conditions under which business may be done."9
Second, granting that this provision is self-executing, Manila
Hotel does not fall under the term national patrimony which only
refers to lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna and all marine
wealth in its territorial sea, and exclusive marine zone as cited in
the first and second paragraphs of Sec. 2, Art. XII, 1987
Constitution. According to respondents, while petitioner speaks of
the guests who have slept in the hotel and the events that have
transpired therein which make the hotel historic, these alone do
not make the hotel fall under the patrimony of the nation. What is
more, the mandate of the Constitution is addressed to the State,
not to respondent GSIS which possesses a personality of its own
separate and distinct from the Philippines as a State.
Third, granting that the Manila Hotel forms part of the national
patrimony, the constitutional provision invoked is still inapplicable
since what is being sold is only 51% of the outstanding shares of
the corporation, not the hotel building nor the land upon which
the building stands. Certainly, 51% of the equity of the MHC
cannot be considered part of the national patrimony. Moreover, if
the disposition of the shares of the MHC is really contrary to the
Constitution, petitioner should have questioned it right from the
beginning and not after it had lost in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of the
bidding rules which provides that if for any reason, the Highest
Bidder cannot be awarded the Block of Shares, GSIS may offer
this to the other Qualified Bidders that have validly submitted
bids provided that these Qualified Bidders are willing to match
the highest bid in terms of price per share, is misplaced.
Respondents postulate that the privilege of submitting a matching
bid has not yet arisen since it only takes place if for any reason,
the Highest Bidder cannot be awarded the Block of Shares. Thus
the submission by petitioner of a matching bid is premature since
Renong Berhad could still very well be awarded the block of
shares and the condition giving rise to the exercise of the
privilege to submit a matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of
discretion should fail since respondent GSIS did not exercise its
discretion in a capricious, whimsical manner, and if ever it did
abuse its discretion it was not so patent and gross as to amount
to an evasion of a positive duty or a virtual refusal to perform a
duty enjoined by law. Similarly, the petition for mandamus should
fail as petitioner has no clear legal right to what it demands and
respondents do not have an imperative duty to perform the act
required of them by petitioner.
We now resolve. A constitution is a system of fundamental laws
for the governance and administration of a nation. It is supreme,
imperious, absolute and unalterable except by the authority from
which it emanates. It has been defined as the fundamental and
paramount law of the nation. 10 It prescribes the permanent
framework of a system of government, assigns to the different
departments their respective powers and duties, and establishes
certain fixed principles on which government is founded. The
fundamental conception in other words is that it is a supreme law
to which all other laws must conform and in accordance with
which all private rights must be determined and all public
authority administered. 11 Under the doctrine of constitutional
supremacy, if a law or contract violates any norm of the
constitution that law or contract whether promulgated by the
legislative or by the executive branch or entered into by private
persons for private purposes is null and void and without any
force and effect. Thus, since the Constitution is the fundamental,
paramount and supreme law of the nation, it is deemed written in
every statute and contract.
Admittedly, some constitutions are merely declarations of policies
and principles. Their provisions command the legislature to enact
laws and carry out the purposes of the framers who merely
establish an outline of government providing for the different
departments of the governmental machinery and securing certain
fundamental and inalienable rights of citizens. 12 A provision
which lays down a general principle, such as those found in Art. II
of the 1987 Constitution, is usually not self-executing. But a
provision which is complete in itself and becomes operative
without the aid of supplementary or enabling legislation, or that
which supplies sufficient rule by means of which the right it grants
may be enjoyed or protected, is self-executing. Thus a
constitutional provision is self-executing if the nature and extent
of the right conferred and the liability imposed are fixed by the
constitution itself, so that they can be determined by an
examination and construction of its terms, and there is no
language indicating that the subject is referred to the legislature
for action. 13
As against constitutions of the past, modern constitutions have
been generally drafted upon a different principle and have often
become in effect extensive codes of laws intended to operate
directly upon the people in a manner similar to that of statutory
enactments, and the function of constitutional conventions has
evolved into one more like that of a legislative body. Hence,
unless it is expressly provided that a legislative act is necessary
to enforce a constitutional mandate, the presumption now is that
all provisions of the constitution are self-executing If the
constitutional provisions are treated as requiring legislation
instead of self-executing, the legislature would have the power to
ignore and practically nullify the mandate of the fundamental
law.14 This can be cataclysmic. That is why the prevailing view is,
as it has always been, that —
. . . in case of doubt, the Constitution should be
considered self-executing rather than non-self-executing
. . . . Unless the contrary is clearly intended, the
provisions of the Constitution should be considered self-
executing, as a contrary rule would give the legislature
discretion to determine when, or whether, they shall be
effective. These provisions would be subordinated to the
will of the lawmaking body, which could make them
entirely meaningless by simply refusing to pass the
needed implementing statute. 15
Respondents argue that Sec. 10, second par., Art. XII, of the
1987 Constitution is clearly not self-executing, as they quote from
discussions on the floor of the 1986 Constitutional Commission
— over foreign investments within its national jurisdiction, as in the
MR. RODRIGO. Madam President, I am asking
this question as the Chairman of the
Committee on Style. If the wording of
"PREFERENCE" is given to QUALIFIED
FILIPINOS," can it be understood as a
preference to qualified Filipinos vis-a-
vis Filipinos who are not qualified. So, why do
we not make it clear? To qualified Filipinos as
against aliens?
THE PRESIDENT. What is the question of
Commissioner Rodrigo? Is it to remove the
word "QUALIFIED?".
MR. RODRIGO. No, no, but say definitely "TO
QUALIFIED FILIPINOS" as against whom? As
against aliens or over aliens?
MR. NOLLEDO. Madam President, I think that is
understood. We use the word "QUALIFIED" because
the existing laws or prospective laws will always lay
down conditions under which business may be
done. For example, qualifications on the setting up of
other financial structures, et cetera (emphasis supplied
by respondents)
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO Yes, 16
Quite apparently, Sec. 10, second par., of Art XII is couched in
such a way as not to make it appear that it is non-self-executing
but simply for purposes of style. But, certainly, the legislature is
not precluded from enacting other further laws to enforce the
constitutional provision so long as the contemplated statute
squares with the Constitution. Minor details may be left to the
legislature without impairing the self-executing nature of
constitutional provisions.
In self-executing constitutional provisions, the legislature may still
enact legislation to facilitate the exercise of powers directly
granted by the constitution, further the operation of such a
provision, prescribe a practice to be used for its enforcement,
provide a convenient remedy for the protection of the rights
secured or the determination thereof, or place reasonable
safeguards around the exercise of the right. The mere fact that
legislation may supplement and add to or prescribe a penalty for
the violation of a self-executing constitutional provision does not
render such a provision ineffective in the absence of such
legislation. The omission from a constitution of any express
provision for a remedy for enforcing a right or liability is not
necessarily an indication that it was not intended to be self-
executing. The rule is that a self-executing provision of the
constitution does not necessarily exhaust legislative power on the
subject, but any legislation must be in harmony with the
constitution, further the exercise of constitutional right and make
it more available. 17 Subsequent legislation however does not
necessarily mean that the subject constitutional provision is not,
by itself, fully enforceable.
Respondents also argue that the non-self-executing nature of
Sec. 10, second par., of Art. XII is implied from the tenor of the
first and third paragraphs of the same section which undoubtedly
are not self-executing. 18 The argument is flawed. If the first and
third paragraphs are not self-executing because Congress is still
to enact measures to encourage the formation and operation of
enterprises fully owned by Filipinos, as in the first paragraph, and
the State still needs legislation to regulate and exercise authority
third paragraph, then a fortiori, by the same logic, the second
paragraph can only be self-executing as it does not by its
language require any legislation in order to give preference to
qualified Filipinos in the grant of rights, privileges and
concessions covering the national economy and patrimony. A
constitutional provision may be self-executing in one part and
non-self-executing in another. 19
Even the cases cited by respondents holding that certain
constitutional provisions are merely statements of principles and
policies, which are basically not self-executing and only placed in
the Constitution as moral incentives to legislation, not as judicially
enforceable rights — are simply not in point. Basco v. Philippine
Amusements and Gaming Corporation 20 speaks of constitutional
provisions on personal dignity, 21 the sanctity of family life, 22 the
vital role of the youth in nation-building 23 the promotion of social
justice, 24 and the values of education. 25 Tolentino v. Secretary of
Finance 26 refers to the constitutional provisions on social justice
and human rights 27 and on education. 28 Lastly, Kilosbayan,
Inc. v. Morato 29 cites provisions on the promotion of general
welfare, 30 the sanctity of family life, 31 the vital role of the youth in
nation-building 32 and the promotion of total human liberation and
development. 33A reading of these provisions indeed clearly
shows that they are not judicially enforceable constitutional rights
but merely guidelines for legislation. The very terms of the
provisions manifest that they are only principles upon which the
legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the of the
1987 Constitution is a mandatory, positive command which is
complete in itself and which needs no further guidelines or
implementing laws or rules for its enforcement. From its very
words the provision does not require any legislation to put it in
operation. It is per se judicially enforceable When our
Constitution mandates that [i]n the grant of rights, privileges, and
concessions covering national economy and patrimony, the State
shall give preference to qualified Filipinos, it means just that —
qualified Filipinos shall be preferred. And when our Constitution
declares that a right exists in certain specified circumstances an
action may be maintained to enforce such right notwithstanding
the absence of any legislation on the subject; consequently, if
there is no statute especially enacted to enforce such
constitutional right, such right enforces itself by its own inherent
potency and puissance, and from which all legislations must take
their bearings. Where there is a right there is a remedy. Ubi jus
ibi remedium.
As regards our national patrimony, a member of the 1986
Constitutional Commission 34 explains —
 The patrimony of the Nation that should be conserved ASSOCIATIONS WHOSE CAPITAL OR
and developed refers not only to out rich natural CONTROLLING STOCK IS WHOLLY OWNED BY
resources but also to the cultural heritage of out race. It SUCH CITIZENS.
also refers to our intelligence in arts, sciences and
letters. Therefore, we should develop not only our lands, xxx xxx
forests, mines and other natural resources but also the
mental ability or faculty of our people.
MR. MONSOD. Madam President, apparently the
proponent is agreeable, but we have to raise a question.
We agree. In its plain and ordinary meaning, the term patrimony Suppose it is a corporation that is 80-percent Filipino, do
pertains to heritage. 35 When the Constitution speaks of national we not give it preference?
patrimony, it refers not only to the natural resources of the
Philippines, as the Constitution could have very well used the
term natural resources, but also to the cultural heritage of the MR. DAVIDE. The Nolledo amendment would refer to
Filipinos. an individual Filipino. What about a corporation wholly
owned by Filipino citizens?
Manila Hotel has become a landmark — a living testimonial of
Philippine heritage. While it was restrictively an American hotel MR. MONSOD. At least 60 percent, Madam President.
when it first opened in 1912, it immediately evolved to be truly
Filipino, Formerly a concourse for the elite, it has since then MR. DAVIDE. Is that the intention?
become the venue of various significant events which have
shaped Philippine history. It was called the Cultural Center of the MR. MONSOD. Yes, because, in fact, we would be
1930's. It was the site of the festivities during the inauguration of limiting it if we say that the preference should only be
the Philippine Commonwealth. Dubbed as the Official Guest 100-percent Filipino.
House of the Philippine Government. it plays host to dignitaries
and official visitors who are accorded the traditional Philippine
hospitality. 36 MR: DAVIDE. I want to get that meaning clear because
"QUALIFIED FILIPINOS" may refer only to individuals
and not to juridical personalities or entities.
The history of the hotel has been chronicled in the book The
Manila Hotel: The Heart and Memory of a City. 37During World
War II the hotel was converted by the Japanese Military MR. MONSOD. We agree, Madam President. 39
Administration into a military headquarters. When the American
forces returned to recapture Manila the hotel was selected by the xxx xxx xxx
Japanese together with Intramuros as the two (2) places fro their
final stand. Thereafter, in the 1950's and 1960's, the hotel
MR. RODRIGO. Before we vote, may I request that the
became the center of political activities, playing host to almost
amendment be read again.
every political convention. In 1970 the hotel reopened after a
renovation and reaped numerous international recognitions, an
acknowledgment of the Filipino talent and ingenuity. In 1986 the MR. NOLLEDO. The amendment will read: "IN THE
hotel was the site of a failed coup d' etat where an aspirant for GRANT OF RIGHTS, PRIVILEGES AND
vice-president was "proclaimed" President of the Philippine CONCESSIONS COVERING THE NATIONAL
Republic. ECONOMY AND PATRIMONY, THE STATE SHALL
GIVE PREFERENCE TO QUALIFIED FILIPINOS." And
the word "Filipinos" here, as intended by the
For more than eight (8) decades Manila Hotel has bore mute
proponents, will include not only individual Filipinos but
witness to the triumphs and failures, loves and frustrations of the
also Filipino-controlled entities or entities fully-controlled
Filipinos; its existence is impressed with public interest; its own
by Filipinos. 40
historicity associated with our struggle for sovereignty,
independence and nationhood. Verily, Manila Hotel has become
part of our national economy and patrimony. For sure, The phrase
51% preference to qualified Filipinos was explained thus —
of the
equity of the MHC comes within the purview of the constitutional
shelter for it comprises the majority and controlling stock, so that MR. FOZ. Madam President, I would like to request
anyone who acquires or owns the 51% will have actual control Commissioner Nolledo to please restate his amendment
and management of the hotel. In this instance, 51% of the MHC so that I can ask a question.
cannot be disassociated from the hotel and the land on which the
hotel edifice stands. Consequently, we cannot sustain
MR. NOLLEDO. "IN THE GRANT OF RIGHTS,
respondents' claim that the Filipino First Policy provision is not
PRIVILEGES AND CONCESSIONS COVERING THE
applicable since what is being sold is only 51% of
NATIONAL ECONOMY AND PATRIMONY, THE STATE
the outstanding shares of the corporation, not the Hotel building
38 SHALL GIVE PREFERENCE TO QUALIFIED
nor the land upon which the building stands.
FILIPINOS."

The argument is pure sophistry. The term qualified Filipinos as

MR FOZ. In connection with that amendment, if a
used in Our Constitution also includes corporations at least 60%
foreign enterprise is qualified and a Filipino enterprise is
of which is owned by Filipinos. This is very clear from the
also qualified, will the Filipino enterprise still be given a
proceedings of the 1986 Constitutional Commission
preference?

THE PRESIDENT. Commissioner Davide is recognized.

MR. NOLLEDO. Obviously.

MR. DAVIDE. I would like to introduce an amendment to

the Nolledo amendment. And the amendment would
consist in substituting the words "QUALIFIED
FILIPINOS" with the following: "CITIZENS OF THE
PHILIPPINES OR CORPORATIONS
MR. FOZ. If the foreigner is more qualified in some
aspects than the Filipino enterprise, will the Filipino still
be preferred?
OR
MR. NOLLEDO. The answer is "yes."
 MR. FOZ. Thank you, 41
Expounding further on the Filipino First Policy provision
Commissioner Nolledo continues —
MR. NOLLEDO. Yes, Madam President. Instead of
"MUST," it will be "SHALL — THE STATE SHALL GlVE
PREFERENCE TO QUALIFIED FILIPINOS. This
embodies the so-called "Filipino First" policy. That
means that Filipinos should be given preference in the
grant of concessions, privileges and rights covering the
national patrimony. 42
The exchange of views in the sessions of the Constitutional
Commission regarding the subject provision was still further
clarified by Commissioner Nolledo 43 —
Paragraph 2 of Section 10 explicitly mandates the "Pro-
Filipino" bias in all economic concerns. It is better
known as the FILIPINO FIRST Policy . . . This provision
was never found in previous Constitutions . . . .
The term "qualified Filipinos" simply means that
preference shall be given to those citizens who can
make a viable contribution to the common good,
because of credible competence and efficiency. It
certainly does NOT mandate the pampering and
preferential treatment to Filipino citizens or
organizations that are incompetent or inefficient, since
such an indiscriminate preference would be counter
productive and inimical to the common good.
In the granting of economic rights, privileges, and
concessions, when a choice has to be made between a
"qualified foreigner" end a "qualified Filipino," the latter
shall be chosen over the former."
Lastly, the word qualified is also determinable. Petitioner was so
considered by respondent GSIS and selected as one of
the qualified bidders. It was pre-qualified by respondent GSIS in
accordance with its own guidelines so that the sole inference
here is that petitioner has been found to be possessed of proven
management expertise in the hotel industry, or it has significant
equity ownership in another hotel company, or it has an overall
management and marketing proficiency to successfully operate
the Manila Hotel. 44
The penchant to try to whittle away the mandate of the
Constitution by arguing that the subject provision is not self-
executory and requires implementing legislation is quite
disturbing. The attempt to violate a clear constitutional provision
— by the government itself — is only too distressing. To adopt
such a line of reasoning is to renounce the duty to ensure
faithfulness to the Constitution. For, even some of the provisions
of the Constitution which evidently need implementing legislation
have juridical life of their own and can be the source of a judicial
remedy. We cannot simply afford the government a defense that
arises out of the failure to enact further enabling, implementing or
guiding legislation. In fine, the discourse of Fr. Joaquin G.
Bernas, S.J., on constitutional government is apt —
The executive department has a constitutional duty to
implement laws, including the Constitution, even before
Congress acts — provided that there are discoverable
legal standards for executive action. When the
executive acts, it must be guided by its own
understanding of the constitutional command and of
applicable laws. The responsibility for reading and
understanding the Constitution and the laws is not the
sole prerogative of Congress. If it were, the executive
would have to ask Congress, or perhaps the Court, for
an interpretation every time the executive is confronted
by a constitutional command. That is not how
constitutional government operates. 45
Respondents further argue that the constitutional provision is
addressed to the State, not to respondent GSIS which by itself
possesses a separate and distinct personality. This argument
again is at best specious. It is undisputed that the sale of 51% of
the MHC could only be carried out with the prior approval of the
State acting through respondent Committee on Privatization. As
correctly pointed out by Fr. Joaquin G. Bernas, S.J., this fact
alone makes the sale of the assets of respondents GSIS and
MHC a "state action." In constitutional jurisprudence, the acts of
persons distinct from the government are considered "state
action" covered by the Constitution (1) when the activity it
engages in is a "public function;" (2) when the government is so
significantly involved with the private actor as to make the
government responsible for his action; and, (3) when the
government has approved or authorized the action. It is evident
that the act of respondent GSIS in selling 51% of its share in
respondent MHC comes under the second and third categories of
"state action." Without doubt therefore the transaction. although
entered into by respondent GSIS, is in fact a transaction of the
State and therefore subject to the constitutional command. 46
When the Constitution addresses the State it refers not only to
the people but also to the government as elements of the State.
After all, government is composed of three (3) divisions of power
— legislative, executive and judicial. Accordingly, a constitutional
mandate directed to the State is correspondingly directed to the
three(3) branches of government. It is undeniable that in this
case the subject constitutional injunction is addressed among
others to the Executive Department and respondent GSIS, a
government instrumentality deriving its authority from the State.
It should be stressed that while the Malaysian firm offered the
higher bid it is not yet the winning bidder. The bidding rules
expressly provide that the highest bidder shall only be declared
the winning bidder after it has negotiated and executed the
necessary contracts, and secured the requisite approvals. Since
the "Filipino First Policy provision of the Constitution bestows
preference on qualified Filipinos the mere tending of the highest
bid is not an assurance that the highest bidder will be declared
the winning bidder. Resultantly, respondents are not bound to
make the award yet, nor are they under obligation to enter into
one with the highest bidder. For in choosing the awardee
respondents are mandated to abide by the dictates of the 1987
Constitution the provisions of which are presumed to be known to
all the bidders and other interested parties.
Adhering to the doctrine of constitutional supremacy, the subject
constitutional provision is, as it should be, impliedly written in the
bidding rules issued by respondent GSIS, lest the bidding rules
be nullified for being violative of the Constitution. It is a basic
principle in constitutional law that all laws and contracts must
conform with the fundamental law of the land. Those which
violate the Constitution lose their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [if] for any
reason the Highest Bidder cannot be awarded the Block of
Shares, GSIS may offer this to other Qualified Bidders that have
validly submitted bids provided that these Qualified Bidders are
willing to match the highest bid in terms of price per
share. 47 Certainly, the constitutional mandate itself is reason
enough not to award the block of shares immediately to the
foreign bidder notwithstanding its submission of a higher, or even
the highest, bid. In fact, we cannot conceive of a stronger reason
than the constitutional injunction itself.
In the instant case, where a foreign firm submits the highest bid
in a public bidding concerning the grant of rights, privileges and
concessions covering the national economy and patrimony,
thereby exceeding the bid of a Filipino, there is no question that
the Filipino will have to be allowed to match the bid of the foreign
entity. And if the Filipino matches the bid of a foreign firm the
award should go to the Filipino. It must be so if we are to give life
and meaning to the Filipino First Policy provision of the 1987
Constitution. For, while this may neither be expressly stated nor
contemplated in the bidding rules, the constitutional fiat is,
omnipresent to be simply disregarded. To ignore it would be to
sanction a perilous skirting of the basic law.
This Court does not discount the apprehension that this policy
may discourage foreign investors. But the Constitution and laws
of the Philippines are understood to be always open to public
scrutiny. These are given factors which investors must consider
when venturing into business in a foreign jurisdiction. Any person
therefore desiring to do business in the Philippines or with any of
its agencies or instrumentalities is presumed to know his rights
and obligations under the Constitution and the laws of the forum.
The argument of respondents that petitioner is now estopped
from questioning the sale to Renong Berhad since petitioner was
well aware from the beginning that a foreigner could participate in
the bidding is meritless. Undoubtedly, Filipinos and foreigners
alike were invited to the bidding. But foreigners may be awarded
the sale only if no Filipino qualifies, or if the qualified Filipino fails
to match the highest bid tendered by the foreign entity. In the
case before us, while petitioner was already preferred at the
inception of the bidding because of the constitutional mandate,
petitioner had not yet matched the bid offered by Renong
Berhad. Thus it did not have the right or personality then to
compel respondent GSIS to accept its earlier bid. Rightly, only
after it had matched the bid of the foreign firm and the apparent
disregard by respondent GSIS of petitioner's matching bid did the
latter have a cause of action.
Besides, there is no time frame for invoking the constitutional
safeguard unless perhaps the award has been finally made. To
insist on selling the Manila Hotel to foreigners when there is a
Filipino group willing to match the bid of the foreign group is to
insist that government be treated as any other ordinary market
player, and bound by its mistakes or gross errors of judgment,
regardless of the consequences to the Filipino people. The
miscomprehension of the Constitution is regrettable. Thus we
would rather remedy the indiscretion while there is still an
opportunity to do so than let the government develop the habit of
forgetting that the Constitution lays down the basic conditions
and parameters for its actions.
Since petitioner has already matched the bid price tendered by
Renong Berhad pursuant to the bidding rules, respondent GSIS
is left with no alternative but to award to petitioner the block of
shares of MHC and to execute the necessary agreements and
documents to effect the sale in accordance not only with the
bidding guidelines and procedures but with the Constitution as
well. The refusal of respondent GSIS to execute the
corresponding documents with petitioner as provided in the
bidding rules after the latter has matched the bid of the
Malaysian firm clearly constitutes grave abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It is
embodied in the 1987 Constitution not merely to be used as a
guideline for future legislation but primarily to be enforced; so
must it be enforced. This Court as the ultimate guardian of the
Constitution will never shun, under any reasonable circumstance,
the duty of upholding the majesty of the Constitution which it is
tasked to defend. It is worth emphasizing that it is not the
intention of this Court to impede and diminish, much less
undermine, the influx of foreign investments. Far from it, the
Court encourages and welcomes more business opportunities
but avowedly sanctions the preference for Filipinos whenever
such preference is ordained by the Constitution. The position of
the Court on this matter could have not been more appropriately
articulated by Chief Justice Narvasa —
As scrupulously as it has tried to observe that it
is not its function to substitute its judgment for
that of the legislature or the executive about
the wisdom and feasibility of legislation
economic in nature, the Supreme Court has
not been spared criticism for decisions
perceived as obstacles to economic progress
and development . . . in connection with a
temporary injunction issued by the Court's First
Division against the sale of the Manila Hotel to
a Malaysian Firm and its partner, certain
statements were published in a major daily to
the effect that injunction "again demonstrates
that the Philippine legal system can be a major
obstacle to doing business here.
Let it be stated for the record once again that
while it is no business of the Court to intervene
in contracts of the kind referred to or set itself
up as the judge of whether they are viable or
attainable, it is its bounden duty to make sure
that they do not violate the Constitution or the
laws, or are not adopted or implemented with
grave abuse of discretion amounting to lack or
excess of jurisdiction. It will never shirk that
duty, no matter how buffeted by winds of unfair
and ill-informed criticism. 48
Privatization of a business asset for purposes of enhancing its
business viability and preventing further losses, regardless of the
character of the asset, should not take precedence over non-
material values. A commercial, nay even a budgetary, objective
should not be pursued at the expense of national pride and
dignity. For the Constitution enshrines higher and nobler non-
material values. Indeed, the Court will always defer to the
Constitution in the proper governance of a free society; after all,
there is nothing so sacrosanct in any economic policy as to draw
itself beyond judicial review when the Constitution is involved. 49
Nationalism is inherent, in the very concept of the Philippines
being a democratic and republican state, with sovereignty
residing in the Filipino people and from whom all government
authority emanates. In nationalism, the happiness and welfare of
the people must be the goal. The nation-state can have no higher
purpose. Any interpretation of any constitutional provision must
adhere to such basic concept. Protection of foreign investments,
while laudible, is merely a policy. It cannot override the demands
of nationalism. 50
The Manila Hotel or, for that matter, 51% of the MHC, is not just
any commodity to be sold to the highest bidder solely for the
sake of privatization. We are not talking about an ordinary piece
of property in a commercial district. We are talking about a
historic relic that has hosted many of the most important events
in the short history of the Philippines as a nation. We are talking
about a hotel where heads of states would prefer to be housed
as a strong manifestation of their desire to cloak the dignity of the
highest state function to their official visits to the Philippines.
Thus the Manila Hotel has played and continues to play a
significant role as an authentic repository of twentieth century
Philippine history and culture. In this sense, it has become truly a
reflection of the Filipino soul — a place with a history of
grandeur; a most historical setting that has played a part in the
shaping of a country. 51
This Court cannot extract rhyme nor reason from the determined
efforts of respondents to sell the historical landmark —
this Grand Old Dame of hotels in Asia — to a total stranger. For,
indeed, the conveyance of this epic exponent of the Filipino
psyche to alien hands cannot be less than mephistophelian for it
is, in whatever manner viewed, a veritable alienation of a nation's
soul for some pieces of foreign silver. And so we ask: What
advantage, which cannot be equally drawn from a qualified
Filipino, can be gained by the Filipinos Manila Hotel — and all
that it stands for — is sold to a non-Filipino? How much of
national pride will vanish if the nation's cultural heritage is
entrusted to a foreign entity? On the other hand, how much
dignity will be preserved and realized if the national patrimony is
safekept in the hands of a qualified, zealous and well-meaning
Filipino? This is the plain and simple meaning of the Filipino First
Policy provision of the Philippine Constitution. And this Court,
heeding the clarion call of the Constitution and accepting the duty
of being the elderly watchman of the nation, will continue to
respect and protect the sanctity of the Constitution.

WHEREFORE, respondents GOVERNMENT SERVICE

INSURANCE SYSTEM, MANILA HOTEL CORPORATION,
COMMITTEE ON PRIVATIZATION and OFFICE OF THE
GOVERNMENT CORPORATE COUNSEL are directed to
CEASE and DESIST from selling 51% of the shares of the Manila
Hotel Corporation to RENONG BERHAD, and to ACCEPT the
matching bid of petitioner MANILA PRINCE HOTEL
CORPORATION to purchase the subject 51% of the shares of
the Manila Hotel Corporation at P44.00 per share and thereafter
to execute the necessary clearances and to do such other acts
and deeds as may be necessary for purpose.

SO ORDERED.