Hipolito vs. Mergas
The impeachment of President Marcos
Even if the offense is not very serious, the
nature of the position amounts the acts as
malfeasance. Public Service requires utmost
integrity and strictest discipline. The yardstick of
public service is honesty and integrity, both
imprinted in the 1973 and the 1987 constitution.
Public officers and employment shall serve with
the highest degree of responsibility, integrity,
loyalty and efficiency and shall remain
accountable to the people.
Public office a public trust– 195 SCRA 6
[Estafa, crim charges dismissed]
Facts: Respondent was a deputy sheriff of the
RTC in Manila. Petitioner was an applicant for a
small scale mining permit, in the Office of the
Prosecutor, Province of Tarlac. The Petitioner
charged respondent with acts allegedly
amounting to the crime of swindling or estafa. A
copy of an affidavit complaint, dated January 4,
1990, charging herein respondent with grave
misconduct and involving the same facts
subject of the aforesaid criminal case, together
with its corresponding attachments, was
received in the Office of the Court
Administrator. Criminal charges were
dismissed, on the theory that the evidence
shows that there was no unfaithfulness or
abuse of confidence on the part of respondent,
and the issue of falsification was not ruled upon
since no evidence proving the same was
submitted for proper appreciation and
consideration but evidence still subsisted.
Issue: Whether the dismissal of criminal case
filed is a bar to administrative sanctions?
Held: Court ordered his suspension.
investigating judge submitted that the acts of
respondent deputy sheriff are improper and not
conducive to the best interest of the service.
Respondent was held to have committed acts
which may be called "moonlighting" and which
are contrary to civil service rules and
regulations. He observed that respondent is not
supposed to be following up extraneous matters
outside Manila, in other government offices and
for private individuals, to the prejudice of his
work in the judiciary as a deputy sheriff of the
Regional Trial Court of Manila. Consequently,
his Honor recommended the penalty of
suspension from office for a period of six (6)
months without pay effective immediately.
Respondent failed to refute the fact that he was
indeed involved in the work and processes
involved in the application for the small scale
mining permit for complainant Marisol C.
Hipolito. This clearly shows that respondent
failed to observe and maintain that degree of
dedication to the duties and responsibilities
required of him as a deputy sheriff. Thus, it
bears mention at this juncture that although he
appears to have been exonerated by the
prosecutor of the criminal charges proffered
against him, such absolution is not per se a bar
to administrative sanctions where called for by
the malfeasance, misfeasance or nonfeasance
of a public officer.
ROMULO VS. YNIGUEZ
 Petitioners comprise more than 1/5 of
all the members of the Batasan. They
filed Resolution # 644, for the
together with a verified complaint
 This was referred to the Committee on
Justice, Human Rights and Good
Gov’t.
 The Committee found the complaint
insufficient in form and in substance.
They disapproved and dismissed all
the charges.
 They submitted a report to the Batasan
and sent it to the archives.
 Later, MP Ramon Mitra petitioned to
revive the complaint. This was denied
by the Batasan.
 The petitioners now file this case for
PROHIBITION to restrain the
enforcement of the Batasan Rules of
Procedure for Impeachment. They
wanted to compel the Committee to
recall its resolution. They sought to
annul the resolution.
 They claim that the Rules of Procedure
are unconstitutional because they
empower a smaller body and overrule
the complaint which is already
endorsed by 1/5 of the members. They
claim that the power to impeach or not
to impeach belongs solely to the
Batasan as a collegiate body.
 They further argue that the Rules
impose an illegal condition precedent
in order that the complaint for
impeachment can proceed to trial.
They say that the Rules of Procedure
impose an additional requirement,
which is not required by the
Constitution. For the Constitution
merely requires the endorsement of at
 least 1/5 for the initiation of the
impeachment proceedings.
 On the other hand, the Speaker of the
House Yniguez claims that the petition
should be dismissed because the
Court has no jurisdiction over the
same, it being a political question. He
also says that the Rules of Procedure
are constitutional and that because the
Batasan is a sovereign body, within its
own sphere, it has the power to
dismiss the case.
ISSUE: What the petitioners are really seeking
is to compel the Batasan to proceed with the
hearing on the impeachment of the President,
since more than 1/5 had filed a resolution for
impeachment. Does the Court have jurisdiction
to order the Committees to recall from the
Archives and report out the resolution for
impeachment? Can this court order the Batasan
to conduct trial on the charges contained in said
complaint for impeachment?
Held: NO.When the Batasan denied the motion
of Mitra for recall of the resolution, this had the
effect of confirming the action of the
Committees in dismissing the complaint for
impeachment. That the Batasan, by a majority
vote, dismiss the complaint cannot be seriously
disputed. A majority vote of all the members of
the Batasan thus confirmed the action of the
Committees, makes it mathematically
impossible to obtain at least 2/3 vote for
conviction. What purpose would be served by
such a proceeding if it is already obvious that
the required 2/3 vote for conviction cannot be
obtained? DISMISSAL OF THE
IMPEACHMENT COMPLAINT WAS IN
ORDER.
The dismissal by the Batasan of the Mitra’s
motion is an exercise of powers that have been
vested upon it by the Constitution and is beyond
the power of this court to review. This COURT
CANNOT COMPEL THE BATASAN TO
CONDUCT THE IMPEACHMENT
PROCEEDINGS.
Further, the said Committee cannot recall from
the Archives the resolution dismissing the
impeachment complaint without revoking or
rescinding the action of the Batasan when it
denied Mitra’s motion.
As to the constitutionality of the Rules of
Procedure, THEY ARE VALID.
The provision in the Constitution requiring the
concurrence of at least 2/3 votes of all members
for conviction is not violated by the provision in
the Rules of Procedure authorizing the
dismissal of the petition by a majority vote of the
Batasan since with such number of votes, it is
obvious that the 2/3 vote necessary for
conviction can no longer be obtained.
The provision in the Constitution providing that
an impeachment complaint may be initiated by
a vote of 1/5 of the members is not violated by
the provision in the Rules of Procedure
authorizing the Committee on Justice to dismiss
the complaint, when it finds that the complaint is
insufficient in form and in substance. Their
purpose is merely to determine whether the
complaint for impeachment initiated by the 1/5
members warrants being referred to the
Batasan for trial. They are not properly part of
the initiation phase of the impeachment
proceeding but of the trial phase.
Nevertheless, said Committee on Justice is still
required to submit its report to the Batasan who
has the ultimate decision whether to approve or
disapprove the report.
More importantly, the Rules of Procedure are
ALWAYS WITHIN THE POWER OF THE
BATASAN TO MODIFY, CHANGE OR
REPLACE AT ANY TIME. They do not have the
force of law but are merely in the nature of by-
laws prescribed for the orderly and convenient
conduct of the proceedings. They may be
waived or disregarded by the batasan itself and
the courts have no concern!
Francisco vs HOR
Facts: On 28 November 2001, the 12th
Congress of the House of Representatives
adopted and approved the Rules of Procedure
in Impeachment Proceedings, superseding the
previous House Impeachment Rules approved
by the 11th Congress. On 22 July 2002, the
House of Representatives adopted a
Resolution, which directed the Committee on
Justice "to conduct an investigation, in aid of
legislation, on the manner of disbursements and
expenditures by the Chief Justice of the
Supreme Court of the Judiciary Development
Fund (JDF). On 2 June 2003, former President
Joseph E. Estrada filed an impeachment
complaint (first impeachment complaint) against
Chief Justice Hilario G. Davide Jr. and seven
Associate Justices of the Supreme Court for
"culpable violation of the Constitution, betrayal
of the public trust and other high crimes." The
complaint was endorsed by House
Representatives, and was referred to the House
Committee on Justice on 5 August 2003 in
accordance with Section 3(2) of Article XI of the
Constitution. The House Committee on Justice
ruled on 13 October 2003 that the first
impeachment complaint was "sufficient in form,"
but voted to dismiss the same on 22 October
2003 for being insufficient in substance. Four
months and three weeks since the filing of the
first complaint or on 23 October 2003, a day
after the House Committee on Justice voted to
dismiss it, the second impeachment complaint
was filed with the Secretary General of the
House by House Representatives against Chief
Justice Hilario G. Davide, Jr., founded on the
alleged results of the legislative inquiry initiated
by above-mentioned House Resolution. The
second impeachment complaint was
accompanied by a "Resolution of
Endorsement/Impeachment" signed by at least
1/3 of all the Members of the House of
Representatives. Various petitions for certiorari,
prohibition, and mandamus were filed with the
Supreme Court against the House of
Representatives, et. al., most of which petitions
contend that the filing of the second
impeachment complaint is unconstitutional as it
violates the provision of Section 5 of Article XI
of the Constitution that "[n]o impeachment
proceedings shall be initiated against the same
official more than once within a period of one
year."
Issue: Whether the power of judicial review
extends to those arising from impeachment
proceedings.
Held: The Court's power of judicial review is
conferred on the judicial branch of the
government in Section 1, Article VIII of our
present 1987 Constitution. The "moderating
power" to "determine the proper allocation of
powers" of the different branches of government
and "to direct the course of government along
constitutional channels" is inherent in all courts
as a necessary consequence of the judicial
power itself, which is "the power of the court to
settle actual controversies involving rights which
are legally demandable and enforceable." As
indicated in Angara v. Electoral Commission,
judicial review is indeed an integral component
of the delicate system of checks and balances
which, together with the corollary principle of
separation of powers, forms the bedrock of our
republican form of government and insures that
its vast powers are utilized only for the benefit
of the people for which it serves. The separation
of powers is a fundamental principle in our
system of government. It obtains not through
express provision but by actual division in our
Constitution. Each department of the
government has exclusive cognizance of
matters within its jurisdiction, and is supreme
within its own sphere. But it does not follow
from the fact that the three powers are to be
kept separate and distinct that the Constitution
intended them to be absolutely unrestrained
and independent of each other. The
Constitution has provided for an elaborate
system of checks and balances to secure
coordination in the workings of the various
departments of the government. And the
judiciary in turn, with the Supreme Court as the
final arbiter, effectively checks the other
departments in the exercise of its power to
determine the law, and hence to declare
executive and legislative acts void if violative of
the Constitution.
The power of judicial review granted to the
Philippine Supreme Court and lower courts, as
expressly provided for in the Constitution, is not
just a power but also a duty, and it was given an
expanded definition to include the power to
correct any grave abuse of discretion on the
part of any government branch or
instrumentality. Our Constitution, though vesting
in the House of Representatives the exclusive
power to initiate impeachment cases, provides
for several limitations to the exercise of such
power as embodied in Section 3(2), (3), (4) and
(5), Article XI thereof. These limitations include
the manner of filing, required vote to impeach,
and the one year bar on the impeachment of
one and the same official. The people
expressed their will when they instituted the
above-mentioned safeguards in the
Constitution. This shows that the Constitution
did not intend to leave the matter of
impeachment to the sole discretion of
Congress. Instead, it provided for certain well-
defined limits, or "judicially discoverable
standards" for determining the validity of the
exercise of such discretion, through the power
of judicial review. Finally, there exists no
constitutional basis for the contention that the
exercise of judicial review over impeachment
proceedings would upset the system of checks
and balances. Verily, the Constitution is to be
interpreted as a whole and "one section is not to
be allowed to defeat another." Both are integral
components of the calibrated system of
independence and interdependence that
insures that no branch of government act
beyond the powers assigned to it by the
Constitution.
Mayor Lecaroz vs Sandiganbayan
Facts: Petitioner Francisco M. Lecaroz was the
Municipal Mayor of Santa Cruz, Marinduque,
while his son and co-petitioner Lenlie Lecaroz,
was the outgoing chairman of the Kabataang
Barangay (KB) of Barangay Bagong Silang,
Santa Cruz, and currently a member of its
SanguniangBayan (SB) representing the
Federation of Kabataang Barangays. In the
1985 election of the Kabataang Barangay Jowil
Red won the KB Chairman of Barangay
Matalaba, Santa Cruz. Red was appointed by
then President Marcos as member of the
Sangguniang Bayan of Santa Cruz representing
the KBs of the municipality. However, Mayor
Lecaroz informed Red that he could not yet sit
as member of the municipal council until the
Governor of Marinduque had cleared his
appointment. When Red finally received his
appointment papers, President Aquino was
already in power. But still Red was not allowed
to sit as sectoral representative in the
Sanggunian. Meanwhile with the approval of the
Mayor, Lenlie continued to receive his salary for
more than a year. Finally Red was able to
secure appointment papers from the Aquino
administration after three years and nine
months from the date he received his
appointment paper from President Marcos.
Subsequently, Red filed with the Office of the
Ombudsman several criminal complaints
against the Mayor and Lenlie arising from the
refusal of the two officials to let him assume the
position of KB sectoral representative. After
preliminary investigation, the Ombudsman filed
with the Sandiganbayan thirteen (13)
informations for estafa through falsification of
public documents against petitioners, and one
(1) information for violation of Sec. 3, par. (e), of
RA No. 3019, the Anti-Graft and Corrupt
Practices Act, against the Mayor alone. The
Sandiganbayan rendered a decision finding the
two accused guilty on all counts of estafa.
However, with respect to the charge of violation
of RA No. 3019, The Sandiganbayan acquitted
Mayor Lecaroz. The Sandiganbayan, having
denied their motion for reconsideration, the
accused, elevated their case to the Supreme
Court.
Issue:Whether or not an officer is entitled to
stay in office until his successor is appointed or
chosen or has qualified.
Held: YES. To resolve these issues, it is
necessary to refer to the laws on the terms of
office of KB youth sectoral representatives to
the SB and of the KB Federation Presidents.
Section 7 of BP Blg. 51 and Sec. 1 of the KB
Constitution respectively provide -
Sec 1. All incumbent officers of the Kabataang
Barangay shall continue to hold office until the
last Sunday of November 1985 or such time
that the newly elected officers shall have
qualified and assumed office in accordance with
this Constitution.
The theory of petitioners is that Red failed to
qualify as KB sectoral representative to the SB
since he did not present an authenticated copy
of his appointment papers; neither did he take a
valid oath of office. Resultantly, this enabled
petitioner Lenlie Lecaroz to continue as
member of the SB although in a holdover
capacity since his term had already expired.
The Sandiganbayan however rejected this
postulate declaring that the holdover provision
under Sec. 1 quoted above pertains only to
positions in the KB, clearly implying that since
no similar provision is found in Sec. 7 of B.P.
Blg. 51, there can be no holdover with respect
to positions in the SB.
The Supreme Court disagree with the
Sandiganbayan. The concept of holdover when
applied to a public officer implies that the office
has a fixed term and the incumbent is holding
onto the succeeding term. It is usually provided
by law that officers elected or appointed for a
fixed term shall remain in office not only for that
term but until their successors have been
elected and qualified. Where this provision is
found, the office does not become vacant upon
the expiration of the term if there is no
successor elected and qualified to assume it,
but the present incumbent will carry over until
his successor is elected and qualified, even
though it be beyond the term fixed by law.
In the instant case, although BP Blg. 51 does
not say that a Sanggunian member can
continue to occupy his post after the expiration
of his term in case his successor fails to qualify,
it does not also say that he is proscribed from
holding over. Absent an express or implied
constitutional or statutory provision to the
contrary, an officer is entitled to stay in office
until his successor is appointed or chosen and
has qualified. The legislative intent of not
allowing holdover must be clearly expressed or
at least implied in the legislative enactment,
otherwise it is reasonable to assume that the
law-making body favors the same.
Indeed, the law abhors a vacuum in public
offices,and courts generally indulge in the
strong presumption against a legislative intent
to create, by statute, a condition which may
result in an executive or administrative office
becoming, for any period of time, wholly vacant
or unoccupied by one lawfully authorized to
exercise its functions. This is founded on
obvious considerations of public policy, for the
principle of holdover is specifically intended to
prevent public convenience from suffering
because of a vacancy and to avoid a hiatus in
the performance of government functions
Zaldivar vs Sandiganbayan
Facts: The case stemmed from the resolution of
the Supreme Court stopping the respondent
from investigating graft cases involving Antique
Gov. Enrique Zaldivar. The Court ruled that
since the adoption of the 1987 Constitution,
respondent’s powers as Tanodbayan have
been superseded by the creation of the Office
of the Ombudsman, he however becomes the
Special Prosecutor of the State, and can only
conduct an investigation and file cases only
when so authorized by the Ombudsman. A
motion for reconsideration was filed by the
respondent wherein he included statements
which were unrelated in the Issue raised in the
Court. This include: (a)That he had been
approached twice by a leading member of the
court and he was asked to 'go slow on Zaldivar
and 'not to be too hard on him; (b) That he "was
approached and asked to refrain from
investigating the COA report on illegal
disbursements in the Supreme Court because 'it
will embarass the Court;" and (c) that in several
instances, the undersigned respondent was
called over the phone by a leading member of
the Court and was asked to dismiss the cases
against two Members of the Court." Statements
of the respondent saying that the SC’s order
'"heightens the people's apprehension over the
justice system in this country, especially
because the people have been thinking that
only the small fly can get it while big fishes go
scot-free” was publicized in leading
newspapers.
Now, the Court Resolved to require respondent
to explain in writing why he should not be
punished for contempt of court for making such
public statements reported in the media.
Respondent then sought to get some members
of the Court to inhibit themselves in the
resolution of the Zaldivar case for alleged bias
and prejudice against him. A little later, he in
effect asked the whole Court to inhibit itself from
passing upon the Issue involved in proceeding
and to pass on responsibility for this matter to
the Integrated Bar of the Philippines, upon the
ground that respondent cannot expect due
process from this Court, that the Court has
become incapable of judging him impartially
and fairly. The Court found respondent guilty of
contempt of court and indefinitely suspended
from the practice of law. Now, he assails said
conviction, invoking his freedom of speech.
Counsel for respondent urges that it is error "for
this Court to apply the "visible tendency" rule
rather than the "clear and present danger" rule
in disciplinary and contempt charges."
Issue: Whether or Not there was a violation of
the freedom of speech/expression.
Held: There was no violation. The Court did not
purport to announce a new doctrine of "visible
tendency," it was simply paraphrasing Section 3
(d) of Rule 71 of the Revised Rules of Court
which penalizes a variety of contumacious
conduct including: "any improper conduct
tending, directly or indirectly, to impede,
obstruct or degrade the administration of
justice."
Under either the "clear and present danger" test
or the "balancing-of-interest test," the Court held
that the statements made by respondent
Gonzalez are of such a nature and were made
in such a manner and under such
circumstances, as to transcend the permissible
limits of free speech. What is here at stake is
the authority of the Supreme Court to confront
and prevent a "substantive evil" consisting not
only of the obstruction of a free and fair hearing
of a particular case but also the avoidance of
the broader evil of the degradation of the
judicial system of a country and the destruction
of the standards of professional conduct
required from members of the bar and officers
of the courts, which has some implications to
the society.
BIR vs Ombudsman
Facts: The Office of the Ombudsman (R) issued
a subpoena duces tecum addressed to BIR
Commissioner Liwayway Vinzons-Chato (P)
ordering her to appear before Respondent and
to bring the complete original case dockets of
the allegedly anomalous refunds granted to
Disteleria Limtuaco and La Tondeña. Petitioner
moved to vacate the subpoena duces tecum
arguing inter alia, that the subpoena duces
tecum partook of the nature of an omnibus
subpoena because it did not specifically
described the particular documents to be
produced. Respondent denied the Motion to
Vacate the Subpoena Duces Tecum. It insisted
that the issuance of the subpoena duces tecum
had documents required for production were
clearly and particularly specified. P asserted
that the investigation conducted by R violated
due process, inasmuch as it commenced its
investigation by issuing the subpoena duces
tecum without first furnishing petitioner with a
summary of the complaint and requiring it to
submit a written answer.
Issue:Whether Respondent can issue the
subpoena duces tecum.
Held: No. According to the Court, Respondent
failed to afford Petitioner with the basics of due
process in conducting its investigation. The
Court held that the procedure taken by
Respondent did not comply with the safeguards
enumerated in Sec. 26, §(2) of RA 6770, or the
Ombudsman Act of 1989 wherein its jurisdiction
involves any malfeasance by a public officer.
The law clearly provides that if there is a
reasonable ground to investigate further, the
investigator of the Respondent shall first furnish
the respondent public officer or employee with a
summary of the complaint and require him to
submit a written answer within 72 hours from
receipt thereof. In the instant case, the BIR
officials concerned were never furnished by the
respondent with a summary of the complaint
and were not given the opportunity to submit
their counter-affidavits and controverting
evidence. Petitioners are already deemed
guilty, in view of Respondent, for granting
anomalous tax refunds.
No less than the 1987 Constitution enjoins that
the “Ombudsman and his Deputies, as
protectors of the people, shall act promptly on
complaints filed in any form or manner against
public officials or employees of the government,
or any subdivision, agency or instrumentality
thereof, including government-owned or
controlled corporations, and shall
Laurel vs. Desierto
Facts: Vice President Laurel was named as the
chairman of the National Centennial Committee
and virtue of his being the chairman, he also
became the chairman of EXPOCORP, a
corporation organized to undertake the
Freedom Ring Project in relation to the
centennial celebration. Later in 1999,
investigation was conducted by an independent
committed due to allegations of graft and
corruption against Laurel as NCC and
EXPOCORP chair. The committee
recommended the filing of charges by the
Ombudsman upon which the Office of the
Ombudsman took cognizance of the case.
Laurel then questioned the jurisdiction of the
Ombudsman by filing this petition, saying that
(1) EXPOCORP was a private corporation, (2)
that NCC is not a public office and (3) that he is
not a public officer as defined in the Anti-Graft
and Corrupt Practices Act.
Held: the Ombudsman has the power to
investigate any malfeasance, misfeasance and
non-feasance by a public officer or employee of
the government, or of any subdivision, agency
or instrumentality thereof, including
government-owned or controlled corporations.
However, is NCC a public office? Yes, it is
because it exercises executive functions by
implementing the policies set forth in the
Constitution regarding history and cultural
heritage, thus satisfying an important element of
public office: the delegation of sovereign
functions. It also follows that Laurel is a public
officer. That he did not receive compensation is
of no consequence. A salary is a usual but not a
necessary criterion for determining the nature of
the position. It is not conclusive. The salary is a
mere incident and forms no part of the office.
Where a salary or fees is annexed, the office is
provided for it is a naked or honorary office, and
is supposed to be accepted merely for the
public good. Hence, the office of petitioner as
NCC Chair may be characterized as an
honorary office, as opposed to a lucrative office
or an office of profit, i.e., one to which salary,
compensation or fees are attached. It bears
noting that under Section 3 (b) of Republic Act
No. 6713 (The Code of Conduct and Ethical
Standards for Public Officials and Employees),
one may be considered public official whether
or not one receives compensation, thus Public
Officials include elective and appointive officials
and employees, permanent or temporary,
whether in the career or non-career service
including military and police personnel, whether
or not they receive compensation, regardless of
amount.
Azarcon vs Guerrero
Facts: Petitioner Alfredo Azarcon owned and
operated an earth-moving business, hauling dirt
and ore. His services were contracted by
PICOP. Occasionally, he engaged the services
of sub-contractors like Jaime Ancla whose
trucks were left at the former’s premises.
On May 25, 1983, a Warrant of Distraint of
Personal Property was issued by BIR
commanding one of its Regional Directors to
distraint the goods, chattels or effects and other
personal property of Jaime Ancla, a sub-
contractor of accused Azarcon and a delinquent
taxpayer. A Warrant of Garnishment was issued
to and subsequently signed by accused
Azarcon ordering him to transfer, surrender,
transmit and/or remit to BIR the property in his
possession owned by Ancla. Azarcon then
volunteered himself to act as custodian of the
truck owned by Ancla.
After some time, Azarcon wrote a letter to the
Reg. Dir of BIR stating that while he had made
representations to retain possession of the
property of Ancla, he thereby relinquishes
whatever responsibility he had over the said
property since Ancla surreptitiously withdrew his
equipment from him. In his reply, the BIR Reg.
Dir. said that Azarcon’s failure to comply with
the provisions of the warrant did not relieve him
from his responsibility.
Along with his co-accused, Azarcon was
charged before the Sandiganbayan with the
crime of malversation of public funds or
property. On March 8, 1994, the
Sandiganbayan rendered a Decision sentencing
the accused to suffer the penalty of
imprisonment ranging from 10 yrs and 1 day of
prision mayor in its maximum period to 17 yrs, 4
mos and 1 day of reclusion temporal. Petitioner
filed a motion for new trial which was
subsequently denied by Sandiganbayan.
Hence, this petition.
Issue: Whether or not Sandiganbayan has
jurisdiction over a private individual designated
by BIR as a custodian of distrained property.
Held: SC held that the Sandiganbayan’s
decision was null and void for lack of
jurisdiction.
Sec. 4 of PD 1606 provides for the jurisdiction
of the Sandiganbayan. It was specified therein
that the only instances when the
Sandiganbayan will have jurisdiction over a
private individual is when the complaint charges
the private individual either as a co-principal,
accomplice or accessory of a public officer or
employee who has been charged with a crime
within its jurisdiction.
The Information does no charge petitioner
Azarcon of becoming a co-principal, accomplice
or accessory to a public officer committing an
offense under the Sandiganbayan’s jurisdiction.
Thus, unless the petitioner be proven a public
officer, Sandiganbayan will have no jurisdiction
over the crime charged.
Art. 203 of the RPC determines who public
officers are. Granting that the petitioner, in
signing the receipt for the truck constructively
distrained by the BIR, commenced to take part
in an activity constituting public functions, he
obviously may not be deemed authorized by
popular election. Neither was he appointed by
direct provision of law nor by competent
authority. While BIR had authority to require
Azarcon to sign a receipt for the distrained
truck, the National Internal Revenue Code did
not grant it power to appoint Azarcon a public
officer. The BIR’s power authorizing a private
individual to act as a depositary cannot be
stretched to include the power to appoint him as
a public officer. Thus, Azarcon is not a public
officer.
RABE V FLORES
FACTS: Respondent had collected her salary
from the Municipality of Panabo for the period of
May 16-31, 1991, when she was already
working atthe RTC as Interpreter III, RTC,
Branch IV, Panabo, Davao. She knew that she
was no longer entitled to a salary from the
municipal government, butshe took it just the
same. She returned the amount only upon
receipt of the Court Resolution dated January
17, 1996, or more than five (5) years later.She
posited that her overriding need for money from
the municipal government, aggravated by the
alleged delay in the processing of her initial
salaryfrom the Court caused the delay of the
delivery of the money because it was in the
month of June and she needed the money to
enroll her children toschool. Respondent further
averred that she did not divulge any business
interest in her Sworn Statement of Assets and
Liabilities and FinancialDisclosure for the years
1991-1994 because she was never engaged in
business during said period although she had a
stall in the market.
ISSUE: WON Delsa Flores is guilty of
Dishonesty?
HELD: Yes.Flores returned the money only
after receipt of the Court's Resolution dated
January 17, 1996, saying that she forgot all
about it. Forgetfulness or failure to remember is
never a rational or acceptable explanation.
It is well to stress once again the constitutional
declaration that a public office is a public trust.
Public officers and employees must at all times
be accountable to the people, serve them with
utmost responsibility,integrity, loyalty and
efficiency, act with patriotism and justice, and
lead modest lives. Respondent's malfeasance is
a clear contravention of the constitutional
dictum that the State shall maintain honesty and
integrity in the public service and take positive
and effective measures against graft and
corruption. Under the Omnibus Rules
Implementing Book V of EO No. 292 known as
the "Administrative Code of 1987" and other
pertinent Civil Service Laws, the penalty for
dishonesty is dismissal, even for the first
offense. Accordingly, for respondent's
dishonesty in receiving and keeping what she
was not lawfully entitled to, this Court has the
duty to impose on her the penalty prescribed by
law: dismissal. Aside from dishonesty, however,
respondent is also guilty of failure to perform
her legal obligation to disclose her business
interests. Respondent herself admitted that she
"had a stall in the market." The Office of the
Court Administrator also found that she had
been receiving rental payments from one
Rodolfo Luay for the use of the market stall.
That respondent had a stall in the market was
undoubtedly a business interest which should
have been reported in her Sworn Statement of
Assets and Liabilities. Her failure to do so
exposes her to administrative sanction
Pleyto vs CIDG
Facts;The (PNP-CIDG) charged petitioner and
the rest of his family for several
offenses/violations. Petitioner, then serving as a
DPWH Undersecretary reportedly amassed
unexplained wealth. Among the charge against
petitioner is that he did not honestly fill out his
Statements of Assets and Liabilities and
Networth (SALNs) for the years 2001 and 2002
for he failed to declare therein all of his and his
wife’s real and personal properties, the true
value thereof, and their business interests.
Petitioner is charged with gross misconduct and
dishonesty for failing to comply with Section 7 of
the Anti-Graft and Corrupt Practices Act, and
Section 8 of the Code of Conduct and Ethical
Standards for Public Officials and Employees,
requiring the submission of a statement of
assets and liabilities by a public officer or
employee. The Office of the Ombudsman
ordered the preventive suspension of petitioner
for six months without pay pending the conduct
of the administrative proceedings against him.
Issue:
1.Whether petitioner Pleyto is guilty of gross
misconduct and dishonesty based on the
grounds presented?
2. Whether Petitioner should have been given
the opportunity to correct his obviously
incomplete and/or not properly filed SALN in
accordance with the afore-quoted review and
compliance procedure?
Held: (1) Clear from the foregoing legal
definitions of “gross misconduct” and
“dishonesty” is that intention is an important
element in both. Petitioner’s admission of his
shortcomings in properly and completely filling
out his SALN, and his subsequent acts negate
any intention on his part to conceal his
properties. Missing the essential element of
intent to commit a wrong, this Court cannot
declare petitioner guilty of gross misconduct
and dishonesty.
An act done in good faith, which constitutes
only an error of judgment and for no ulterior
motives and/or purposes, does not qualify as
gross misconduct, and is merely simple
negligence. Thus, at most, petitioner is guilty of
negligence for having failed to ascertain that his
SALN was accomplished properly, accurately,
and in more detail.
Both Section 7 of the Anti-Graft and Corrupt
Practices Act and Section 8 of the Code of
Conduct and Ethical Standards for Public
Officials and Employees require the
accomplishment and submission of a true,
detailed and sworn statement of assets and
liabilities. Petitioner’s negligence, though, is
only simple and not gross, in the absence of
bad faith or the intent to mislead or deceive on
his part, and in consideration of the fact that his
SALNs actually disclose the full extent of his
assets and the fact that he and his wife had
other business interests.
(2) No. Under Art.XI, Sec.12: The Ombudsman
and his Deputies, as protectors of the people,
shall act promptly on complaints filed in any
form or manner against public officials or
employees of the Government, or any
subdivision, agency, or instrumentality thereof,
including government-owned or controlled
corporations, and shall, in appropriate cases,
notify the complainants of the action taken and
the result thereof.
In the event that a complaint is filed against a
public officer or employee concerning his SALN,
the Office of the Ombudsman shall be obliged
to comply, not with the review procedure for
heads of office in the Code of Conduct and
Ethical Standards for Public Officials and
Employees, but with the procedure for
administrative complaints as laid out in Rule III
of the Rules of Procedure of the Office of the
Ombudsman. Although in an administrative
case before the Office of the Ombudsman, the
public officer or employee is no longer afforded
the opportunity for corrective action on his
SALN, he is still allowed to file counter-affidavits
and other evidence in his defense.
Corona’s Impeachment
Enrile: If, indeed, any of the Respondent’s cash
deposits were commingled with the funds
belonging to other parties such as the Basa
Guidote Enterprises, Inc. (BGEI) or his children,
the Respondent was still duty-bound to declare
these deposits in his SALN, they being
admittedly under his name.
The evidence is devoid of any indication that
the Chief Justice was holding these funds in
trust for or that they were actually beneficially
owned by any one other than himself or his
wife.
Assuming that any part of such deposits in
truth belonged to third parties, the Respondent
could have indicated such third-party funds as
corresponding liabilities in his SALN. That
would have reflected his real net worth.
With all due respect, I believe that the
Respondent Chief Justice’s reliance on the
absolute confidentiality accorded to foreign
currency deposits under Section 8 of Republic
Act No. 6426 is grossly misplaced.
The Constitution, in Article XI, Sec. 17,
provides that “A public officer or employee shall,
upon assumption of office and as often as may
be required by law, submit a declaration under
oath of his assets, liabilities and net worth.
Are we now to say that this Constitutional
command is limited to a public official’s assets
or deposits in local currency? If so, would we
not be saying, in effect, that the Constitution
allows something less than a full, honest and
complete disclosure?
It bears noting that the prescribed form of the
SALN quite simply requires public officers and
employees to declare their assets, real and
personal, the latter to include cash and bank
deposits, bonds, etc. It does not require the
public officer or employee to indicate whether or
not he or she has foreign currency notes or
deposits. Neither does it require details such as
account numbers, account names, bank identity
nor any branch address. All that it requires is a
declaration of the total amount of the funds
deposited in any bank account or accounts
maintained by the public official or employee
concerned.
Surely, the Chief Justice knows the equivalent
value in local currency of his foreign currency
deposits to be able to declare the same as part
of his assets, especially since the aggregate
amount of these foreign currency deposits, by
his own account, amounts to US$2.4 Million.
The non-disclosure of these deposits, in both
local and foreign currency, would naturally
result in a corresponding distortion of the Chief
Justice’s real net worth.
Consistent with the position taken by this Court
in the case filed by the Philippine Savings Bank
before the Supreme Court last February,
pursuant to which the Supreme Court issued a
Temporary Restraining Order, I maintain that
the Constitutional principle of public
accountability overrides the absolute
confidentiality of foreign currency deposits.
The provisions of R.A. 6426 cannot be
interpreted as an exception to the unequivocal
command and tenor of Article XI, Sec. 17, of the
1987 Constitution, and I regret that the Highest
Magistrate of the land, no less, would think
otherwise.
Section 8 of R.A. 6426 provides that except
with the written permission of the depositor, “in
no instance shall foreign currency deposits be
examined, inquired or looked into by any
person, government official, bureau or office
whether judicial or administrative or legislative
or any other entity whether public or private.”
The so-called conflict of laws between R.A.
Nos. 6713 and 6426 is more illusory than real.
Section 8 of R.A. No. 6426 merely prohibits the
examination, inquiry or looking into a foreign
currency deposit account by an entity or person
other than the depositor himself. But there is
nothing in R.A. No. 6426 which prohibits the
depositor from making a declaration on his own
of such foreign currency funds, especially in this
case where the Constitution mandates the
depositor who is a public officer to declare all
assets under oath.
Some have raised the question: Why should
the Chief Justice be held accountable for an
offense which many, if not most others in
Government are guilty of, perhaps even more
than he is? They say that hardly anyone
declares his true net worth anyway.
Here lies what many have posited as a moral
dilemma. I believe it is our duty to resolve this
“dilemma” in favor of upholding the law and
sound public policy. If we were to agree with the
Respondent that he was correct in not
disclosing the value of his foreign currency
deposits because they are absolutely
confidential, can we ever expect any SALN to
be filed by public officials from hereon to be
more accurate and true than they are today?
Marcos’ Opinion:
Marcos said that Corona’s alleged failure to
declare his dollar accounts in his statement of
assets, liabilities and net worth (SALN) was not
an impeachable offense.
“The framers of the constitution intended
culpable violation of the Constitution to mean a
woeful and intentional violation of the
constitution. Betrayal of public trust meanwhile
was meant to be a catch all phrase to
encompass all acts violative of the oath of office
which render the officer unfit to continue in
service,” Marcos said.
“Both grounds however, were contemplated to
exclude unintentional or involuntary violations
errors made in good faith and honest mistakes
in judgement. Granting therefore that the CJ
[Chief Justice] violated the SALN law, this
certainly does not rise to the level of an
impeachable offense,”
ARTICLE 12 CASES:
Isagani Cruz v. Dept. of Energy and Natural
Resources
FACTS: Cruz, a noted constitutionalist, assailed
the validity of the RA 8371 or the Indigenous
People’s Rights Act on the ground that the law
amount to an unlawful deprivation of the State’s
ownership over lands of the public domain as
well as minerals and other natural resources
therein, in violation of the regalian doctrine
embodied in Section 2, Article XII of the
Constitution. The IPRA law basically
enumerates the rights of the indigenous
peoples over ancestral domains which may
include natural resources. Cruz et al content
that, by providing for an all-encompassing
definition of “ancestral domains” and “ancestral
lands” which might even include private lands
found within said areas, Sections 3(a) and 3(b)
of said law violate the rights of private
landowners.
ISSUE: Whether or not the IPRA law is
unconstitutional.
HELD: The SC deliberated upon the matter.
After deliberation they voted and reached a 7-7
vote. They deliberated again and the same
result transpired. Since there was no majority
vote, Cruz’s petition was dismissed and the
IPRA law was sustained. Hence, ancestral
domains may include natural resources –
somehow against the regalian doctrine.
When the Ipra Law was challenged before the
Supreme Court in Cruz v. DENR, the central
objection to its constitutionality was that it
unlawfully deprived the State of ownership over
lands of the public domain as well as of
minerals and other natural resources therein, in
violation of the regalian doctrine still embodied
in Section 2, Article XII of the Constitution.
Those who opposed the law argued that the
Cariño decision could not be superior to the will
of the sovereign people expressed in the 1935,
1973 and 1987 Constitutions. Moreover, as to
the Constitution’s reference to the applicability
of customary law, it was argued that what was
meant was that Congress should look closely
into the customary laws and, with specificity and
by proper recitals, hew them to, and make them
part of, the stream of laws and publish them in
order to satisfy the “due process clause.”
The main contention of those who defended the
Ipra Law, however, was that, even accepting
jura regalia, Spain could claim dominium only
over unoccupied and unclaimed portions of the
islands. The defenders therefore, arguing from
the due process clause, recognized the
existence of native title prior to arrival of the
colonists.
Ipra defined native title as referring to “pre-
conquest rights to lands and domains which, as
far back as memory reaches, have been held
under a claim of private ownership by ICCs/IPs,
have never been public lands and are thus
indisputably presumed to have been held that
way since before the Spanish Conquest.”
Moreover, Ipra still kept for the State control
over natural resources even in ancestral
domain.
As mentioned earlier, the Supreme Court voted
7 to 7 on unconstitutionality, thus failing to
muster a majority to declare the law
unconstitutional. Meanwhile, the composition of
the Supreme Court has changed, and change in
composition can result in alteration of doctrine.
SANTA ROSA MINING CO. V. LEIDO, JR.
Petitioner assails validity of Presidential
Decree No 1214 which requires holders of
subsisting and valid patentable mining claims
located under the provisions of the Philippine
Bill of 1902 to file a mining lease application
within one year from the approval of the decree.
Petitioner accordingly filed a mining lease
application, but “under protest”
Petitioner contends that its 50 mining claims
had already been declared as its own private
and exclusive property by a judgment of the
CFI. Also, that they already had a vested right
over its mining claims even before PD1214
Respondents claim that petitioner did not
exhaust all administrative remedies. They also
cited the pendency of petitioner’s appeal with
the office of the president, of the ruling of the
respondent secretary of natural resources
which stated that 44 of the mining claims were
void for lack of valid “tie points” as required
under the Philippine Bill of 1902, and that all the
mining claims have been abandoned and
cancelled for petitioner’s noncompliance.
Issue: W/N PD1214 is unconstitutional
Held: PD1214 is constitutional. It is a valid
exercise of the sovereign power of the state, as
owner, over lands of public domain of which
petitioner’s mining claims still form a part, and
over the patrimony of the nation, which mineral
deposits are a valuable asset.
Mere location does not mean absolute
ownership over the land / mining claim, to rule
otherwise would imply that location is all that is
needed to acquire and maintain rights over a
located mining claim. The locator should
faithfully and consistently comply with the
requirements for annual work and
improvements in the located mining claim.
Moreover, Presidential Decree No. 1214 is in
accord with Sec. 8, Art XIV of the 1937
Constitution.
Chavez vs PEA & AMARI
Facts: The Public Estates Authority is the
central implementing agency tasked to
undertake reclamation projects nationwide. It
took over the leasing and selling functions of
the DENR insofar as reclaimed or about to be
reclaimed foreshore lands are concerned.
PEA sought the transfer to AMARI, a private
corporation, of the ownership of 77.34 hectares
of the Freedom Islands. PEA also sought to
have 290.156 hectares of submerged areas of
Manila Bay to AMARI.
ISSUE: Whether or not the transfer is valid.
HELD: No. To allow vast areas of reclaimed
lands of the public domain to be transferred to
PEA as private lands will sanction a gross
violation of the constitutional ban on private
corporations from acquiring any kind of
alienable land of the public domain.
The Supreme Court affirmed that the 157.84
hectares of reclaimed lands comprising the
Freedom Islands, now covered by certificates of
title in the name of PEA, are alienable lands of
the public domain. The 592.15 hectares of
submerged areas of Manila Bay remain
inalienable natural resources of the public
domain. Since the Amended JVA seeks to
transfer to AMARI, a private corporation,
ownership of 77.34 hectares of the Freedom
Islands, such transfer is void for being contrary
to Section 3, Article XII of the 1987 Constitution
which prohibits private corporations from
acquiring any kind of alienable land of the public
domain. Furthermore, since the Amended JVA
also seeks to transfer to AMARI ownership of
290.156 hectares of still submerged areas of
Manila Bay, such transfer is void for being
contrary to Section 2, Article XII of the 1987
Constitution which prohibits the alienation of
natural resources other than agricultural lands
of the public domain.
La Bugal B’laan Tribal Assoc. V. DENR
Facts: R.A. No. 7942 defines the modes of
mineral agreements for mining operations,
outlines the procedure for their filing and
approval, assignment/transfer and withdrawal,
and fixes their terms. Similar provisions govern
financial or technical assistance agreements.
Petitioners filed the present petition for
prohibition and mandamus, with a prayer for a
temporary restraining order alleging that at the
time of the filing of the petition, 100 FTAA
applications had already been filed, covering an
area of 8.4 million hectares, 64 of which
applications are by fully foreign-owned
corporations covering a total of 5.8 million
hectares, and at least one by a fully foreign-
owned mining company over offshore areas.

Issue: Are foreign-owned corporations in the
large-scale exploration, development, and
utilization of petroleum, minerals and mineral
oils limited to “technical” or “financial”
assistance only?
Held: Only technical assistance or financial
assistance agreements may be entered into,
and only for large-scale activities. These are
contract forms which recognize and assert our
sovereignty and ownership over natural
resources since the foreign entity is just a pure
contractor and not a beneficial owner of our
economic resources. The proposal recognizes
the need for capital and technology to develop
our natural resources without sacrificing our
sovereignty and control over such resources by
the safeguard of a special law which requires
two-thirds vote of all the members of the
Legislature.
It is true that the word “technical” encompasses
a broad number of possible services. However,
the law follows the maxim “casus omisus pro
omisso habendus est” which means a person,
object or thing omitted from an enumeration
must be held to have been omitted intentionally.
MANILA PRINCE HOTEL VS. GSIS
[267 SCRA 408; G.R. No. 122156; 3 Feb 1997]
Facts:
Pursuant to the privatization program of the
government, GSIS decided to sell 30-51% of
the Manila Hotel Corporation. Two bidders
participated, Manila Prince Hotel (MPH) and
Malaysian Firm Renong Berhad (RB). MPH’s
bid was at P41.58/per share while RB’s bid was
at P44.00/share. RB was the highest bidder
hence it was logically considered as the winning
bidder but is yet to be declared so. Pending
declaration, MPH matches RB’s bid and
invoked the Filipino First policy enshrined under
par. 2, Sec. 10, Art. 12 of the 1987 Constitution,
but GSIS refused to accept. In turn MPH filed a
TRO to avoid the perfection/consummation of
the sale to RB.
RB then assailed the TRO issued in favor of
MPH arguing among others that:
1. Par. 2, Sec. 10, Art. 12 of the 1987
Constitution needs an implementing
law because it is merely a statement of
principle and policy (not self-
executing);
2. Even if said passage is self-executing,
Manila Hotel does not fall under
national patrimony.
ISSUE: Whether or not RB should be admitted
as the highest bidder and hence be proclaimed
as the legit buyer of shares.
HELD: No. MPH should be awarded the sale
pursuant to Art 12 of the 1987 Const. This is in
light of the Filipino First Policy.
Par. 2, Sec. 10, Art. 12 of the 1987 Constitution
is self executing. The Constitution is the
fundamental, paramount and supreme law of
the nation, it is deemed written in every statute
and contract.
Manila Hotel falls under national patrimony.
Patrimony in its plain and ordinary meaning
pertains to heritage. When the Constitution
speaks of national 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 Filipinos. It also refers to our
intelligence in arts, sciences and letters.
Therefore, we should develop not only our
lands, forests, mines and other natural
resources but also the mental ability or faculty
of our people. Note that, for more than 8
decades (9 now) Manila Hotel has bore mute
witness to the triumphs and failures, loves and
frustrations of the Filipinos; its existence is
impressed with public interest; its own historicity
associated with our struggle for sovereignty,
independence and nationhood.
Tanada vs angara
GR 118295
Facts: The instant case is a petition for
certiorari, prohibition and mandamus filed by
petitioner to contest the constitutionality of
joining the WTO which was concurred upon by
majority of the Senate. Petitioner contends that
it is in conflict with the provisions of our
constitution, specifically Art. 2, sec19 and Art
12, sec 10.
Issue: Whether or not such affiliation is
prohibited by our constitution
Held: The principles stated Art 2 of the
constitution are not self-executing. They are
used by the judiciary as aids or as guidelines in
the exercise of its power of judicial review, and
by the legislature in its enactments of laws.
They are not sources for causes of action.
Furthermore, the treaty is in harmony with the
generally accepted principles of international
law as part of the law of the land and the
adherence of the amity with all nations. The
deliberation and voting of the senate, voluntarily
and overwhelmingly gave its consent to the
WTO agreement, thereby making it a part of the
law of the land.
The petition is dismissed for lack of merit.
WILSON P. GAMBOA vs. FINANCE
SECRETARY TEVES
G.R. No. 176579, promulgated June 28, 2011
FACTS: This is a petition to nullify the sale of
shares of stock of Philippine
Telecommunications Investment Corporation
(PTIC) by the government of the Republic of the
Philippines, acting through the Inter-Agency
Privatization Council (IPC), to Metro Pacific
Assets Holdings, Inc. (MPAH), an affiliate of
First Pacific Company Limited (First Pacific), a
Hong Kong-based investment management and
holding company and a shareholder of the
Philippine Long Distance Telephone Company
(PLDT).
The petitioner questioned the sale on
the ground that it also involved an indirect sale
of 12 million shares (or about 6.3 percent of the
outstanding common shares) of PLDT owned
by PTIC to First Pacific. With the this sale, First
Pacific’s common shareholdings in PLDT
increased from 30.7 percent to 37 percent,
thereby increasing the total common
shareholdings of foreigners in PLDT to about
81.47%. This, according to the petitioner,
violates Section 11, Article XII of the 1987
Philippine Constitution which limits foreign
ownership of the capital of a public utility to not
more than 40%.
ISSUE: Does the term “capital” in Section 11,
Article XII of the Constitution refer to the total
common shares only, or to the total outstanding
capital stock (combined total of common and
non-voting preferred shares) of PLDT, a public
utility?
Held: Considering that common shares have
voting rights which translate to control, as
opposed to preferred shares which usually have
no voting rights, the term “capital” in Section 11,
Article XII of the Constitution refers only to
common shares. However, if the preferred
shares also have the right to vote in the election
of directors, then the term “capital” shall include
such preferred shares because the right to
participate in the control or management of the
corporation is exercised through the right to
vote in the election of directors. In short, the
term “capital” in Section 11, Article XII of the
Constitution refers only to shares of stock that
can vote in the election of directors. This
interpretation is consistent with the intent of the
framers of the Constitution to place in the hands
of Filipino citizens the control and management
of public utilities.
Albano vs. Reyes
175 SCRA 264 | Paras, J.
Facts:
The Philippine Ports Authority (PPA) board
directed the PPA management to prepare for
the public bidding of the development,
management and operation of the Manila
International Container Terminal (MICT) at the
Port of Manila. A Bidding Committee was
formed by the DOTC for the public bidding.
After evaluation of several bids, the Bidding
Committee recommended the award of the
contract to respondent International Container
Terminal Services, Inc. (ICTSI). Accordingly,
Rainerio Reyes, then DOTC secretary, declared
the ICTSI consortium as the winning bidder.
On May 18, 1988, the President of the
Philippines approved the same with directives
that PPA shall still have the responsibility for
planning, detailed engineering, construction,
expansion, rehabilitation and capital dredging of
the port, as well as the determination of how the
revenues of the port system shall be allocated
for future works; and the contractor shall not
collect taxes and duties except that in the case
of wharfage or tonnage dues.
Petitioner Albano, as taxpayer and
Congressman, assailed the legality of the award
and claimed that since the MICT is a public
utility, it needs a legislative franchise before it
can legally operate as a public utility.
ISSUE: Whether a franchise is needed for the
operation of the MICT?
Held: No. While the PPA has been tasked
under E.O. No. 30 with the management and
operation of the MICT and to undertake the
providing of cargo handling and port related
services thereat, the law provides that such
shall be “in accordance with P.D. 857 and other
applicable laws and regulations”. P.D. 857
expressly empowers the PPA to provide
services within Port Districts “whether on its
own, by contract, or otherwise”.
Even if the MICT be considered a public utility,
its operation would not necessarily call for a
franchise from the legislature because the law
has granted certain administrative agencies the
power to grant licenses for or to authorize the
operation of public utilities. Reading E.O. 30
and P.D. 857 together, it is clear that the
lawmaker has empowered the PPA to
undertake by itself the operation and
management of the MICP or to authorize its
operation and management by another by
contract or other means, at its option.
Doctrine: The law granted certain administrative
agencies the power to grant licenses for the
operation of public utilities. Theory that MICT is
a “wharf” or a “dock”, as contemplated under
the Public Service Act, would not necessarily
call for a franchise from the Legislative Branch.
Tatad v. Garcia
G.R. No. 114222
Facts:
EDSA LRT Consortium, a foreign
corporation, was awarded with the
construction of Light Rail Transit III (LRT
III) as the only bidder who has qualified
with the requirements provided by the
PBAC. The said foreign corporation will
construct the LRT III in a “Built -Lease-
Transfer” agreement that such p u b l i c
utility will be leased by the
government through the
Department of Transportation
a n d Communication (DOTC) and then it
would be subsequently sold by the corporation
to the government. An objection was raised
by the petitioner stating that the
awarding of the bid to the said
corporation is against the Constitution. It
was provided in the Constitution that
only Filipinos are entitled to operate a
public utility such as the LRT III.
Issue:
Whether or not the awarding of the bid to
EDSA LRT Consortium is against the
Constitution.
Held:
The Court held that there is a distinction in the
“operation” of a public utility and ownership in
the facilities and equipment to serve the public.
The EDSA LRT Consortium fall under the latter
because the said corporation will not
operate the public utility. The said
corporation will only own the facilities
and equipment such as the train carts,
the railings and the booths. In addition,
such ownership will then be subsequently
transferred to the government under “Built-
Lease-Transfer” agreement. With that said, the
operation of the public utility will fall to the
Filipinos through its government. Therefore, the
awarding of the bid to EDSA LRT Consortium is
not against the provisions of the Constitution.
JG Summit Holdings Inc. vs. CA
G.R. No. 124293, November 20, 2000
FACTS:
The National Investment and Development
Corporation (NIDC), a government corporation,
entered into a Joint Venture Agreement (JVA)
with Kawasaki Heavy Industries, Ltd. for the
construction, operation and management of the
Subic National Shipyard, Inc., later became the
Philippine Shipyard and Engineering
Corporation (PHILSECO). Under the JVA, NIDC
and Kawasaki would maintain a shareholding
proportion of 60%-40% and that the parties
have the right of first refusal in case of a sale.
Through a series of transfers, NIDC’s rights,
title and interest in PHILSECO eventually went
to the National Government. In the interest of
national economy, it was decided that
PHILSECO should be privatized by selling
87.67% of its total outstanding capital stock to
private entities. After negotiations, it was agreed
that Kawasaki’s right of first refusal under the
JVA be “exchanged” for the right to top by five
percent the highest bid for said shares.
Kawasaki that Philyards Holdings, Inc. (PHI), in
which it was a stockholder, would exercise this
right in its stead.
During bidding, Kawasaki/PHI Consortium is the
losing bidder. Even so, because of the right to
top by 5% percent the highest bid, it was able to
top JG Summit’s bid. JG Summit protested,
contending that PHILSECO, as a shipyard is a
public utility and, hence, must observe the 60%-
40% Filipino-foreign capitalization. By buying
87.67% of PHILSECO’s capital stock at bidding,
Kawasaki/PHI in effect now owns more than
40% of the stock.
ISSUE:
 Whether or not Kawasaki/PHI can
purchase beyond 40% of PHILSECO’s
stocks
HELD:
A shipyard such as PHILSECO being a public
utility as provided by law is therefore required to
comply with the 60%-40% capitalization under
the Constitution. Likewise, the JVA between
NIDC and Kawasaki manifests an intention of
the parties to abide by this constitutional
mandate. Thus, under the JVA, should the
NIDC opt to sell its shares of stock to a third
party, Kawasaki could only exercise its right of
first refusal to the extent that its total shares of
stock would not exceed 40% of the entire
shares of stock. The NIDC, on the other hand,
may purchase even beyond 60% of the total
shares. As a government corporation and
necessarily a 100% Filipino-owned corporation,
there is nothing to prevent its purchase of
stocks even beyond 60% of the capitalization as
the Constitution clearly limits only foreign
capitalization.
Kawasaki was bound by its contractual
obligation under the JVA that limits its right of
first refusal to 40% of the total capitalization of
PHILSECO. Thus, Kawasaki cannot purchase
beyond 40% of the capitalization of the joint
venture on account of both constitutional and
contractual proscriptions.
AGAN,JR.VS. PIATCO
[402 SCRA 612; G.R. No. 155001; 5 May 2003]
Facts:
Sometime in 1993, six business leaders,
explored the possibility of investing in the new
NAIA airport terminal, so they formed Asians
Emerging Dragon Corp. They submitted
proposals to the government for the
development of NAIA Intl. Passenger Terminal
III (NAIA IPT III). The NEDA approved the NAIA
IPT III project. Bidders were invited, and among
the proposal Peoples Air Cargo (Paircargo) was
chosen. AEDC protested alleging that
preference was given to Paircargo, but still the
project was awarded to Paircargo. Because of
that, it incorporated into, Phil. Intl. Airport
Terminals Co. (PIATCO). The DOTC and
PIATCO entered into a concession agreement
in 1997 to franchise and operate the said
terminal for 21 years. In Nov. 1998 it was
amended in the matters of pertaining to the
definition of the obligations given to the
concessionaire, development of facilities and
proceeds, fees and charges, and the
termination of contract. Since MIAA is charged
with the maintenance and operations of NAIA
terminals I and II, it has a contract with several
service providers. The workers filed the petition
for prohibition claiming that they would lose
their job, and the service providers joined them, Corporation (EASCO) filed a Petition for
filed a motion for intervention. Likewise several Certiorari and Prohibition assailing said
employees of the MIAA filed a petition assailing Memorandum Circular No. 2001-001 and the
the legality of arrangements. A group of implementing circulars claiming they had
congressmen filed similar petitions. Pres. deprived it of its right to engage in the
Arroyo declared in her speech that she will not passenger accident insurance business and are
honor PIATCO contracts which the Exec. violative of the constitutional proscription
Branch's legal office concluded null and void. against monopoly, unfair competition and
combination in restraint of trade.
Issue:
In authorizing and regulating two insurance
Whether or Not the 1997 concession agreement monopolies, the LTFRB acted within its
is void, together with its amendments for being prerogatives in promoting public interest and
contrary to the constitution. protecting the riding public. After all, the
consortia are open to all insurance companies,
Held: including petitioner. There is no discrimination
The 1997 concession agreement is void for against any legitimate insurer.
being contrary to public policy. The
amendments have the effect of changing it into
and entirely different agreement from the
contract bidded upon. The amendments present
new terms and conditions which provide
financial benefit to PIATCO which may have the
altered the technical and financial parameters of
other bidders had they know that such terms
were available. The 1997 concession
agreement, the amendments and supplements
thereto are set aside for being null and void.

[G.R. No. 149717. October 7, 2003.]

EASTERN ASSURANCE & SURETY
CORPORATION (EASCO), petitioner, vs.
LAND TRANSPORTATION FRANCHISING
and REGULATORY BOARD (LTFRB),

LTFRB issued Memorandum Circular No. 2001-

001 and implementing circulars fixing, among
others, the insurance coverage of PUVS on the
basis of the number of persons that may be
killed or injured instead of on the entire vehicle
alone and requiring as a condition for the
issuance of certificate of public convenience an
insurance policy or certificate provided by a
member of one of two accredited groups.
Petitioner Eastern Assurance and Surety