1

SECOND DIVISION

CYNTHIA S. BOLOS, G.R. No. 186400

Petitioner,

Present:

CARPIO, J., Chairperson,

NACHURA,

LEONARDO-DE CASTRO,*

- versus - PERALTA, and

MENDOZA, JJ.

DANILO T. BOLOS, Promulgated:

Respondent. October 20, 2010

x -----------------------------------------------------------------------------------------------------x

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking a review of the December 10, 2008 Decision[1] of
the Court of Appeals (CA) in an original action for certiorari under Rule 65 entitled Danilo T. Bolos v. Hon. Lorifel Lacap Pahimna
and Cynthia S. Bolos, docketed as CA-G.R. SP. No. 97872, reversing the January 16, 2007 Order of the Regional Trial Court of Pasig
City, Branch 69 (RTC), declaring its decision pronouncing the nullity of marriage between petitioner and respondent final and
executory.

On July 10, 2003, petitioner Cynthia Bolos (Cynthia) filed a petition for the declaration of nullity of her marriage to respondent
Danilo Bolos (Danilo) under Article 36 of the Family Code, docketed as JDRC No. 6211.

After trial on the merits, the RTC granted the petition for annulment in a Decision, dated August 2, 2006, with the following
disposition:
2

WHEREFORE, judgment is hereby rendered declaring the marriage between petitioner CYNTHIA S. BOLOS and respondent DANILO
T. BOLOS celebrated on February 14, 1980 as null and void ab initio on the ground of psychological incapacity on the part of both
petitioner and respondent under Article 36 of the Family Code with all the legal consequences provided by law.

Furnish the Local Civil Registrar of San Juan as well as the National Statistics Office (NSO) copy of this decision.

SO ORDERED.[2]

A copy of said decision was received by Danilo on August 25, 2006. He timely filed the Notice of Appeal on September 11, 2006.

In an order dated September 19, 2006, the RTC denied due course to the appeal for Danilos failure to file the required motion for
reconsideration or new trial, in violation of Section 20 of the Rule on Declaration of Absolute Nullity of Void Marriages and
Annulment of Voidable Marriages.

On November 23, 2006, a motion to reconsider the denial of Danilos appeal was likewise denied.

On January 16, 2007, the RTC issued the order declaring its August 2, 2006 decision final and executory and granting the Motion for
Entry of Judgment filed by Cynthia.

Not in conformity, Danilo filed with the CA a petition for certiorari under Rule 65 seeking to annul the orders of the RTC as they
were rendered with grave abuse of discretion amounting to lack or in excess of jurisdiction, to wit: 1) the September 19, 2006 Order
which denied due course to Danilos appeal; 2) the November 23, 2006 Order which denied the motion to reconsider the September
19, 2006 Order; and 3) the January 16, 2007 Order which declared the August 2, 2006 decision as final and executory.Danilo also
prayed that he be declared psychologically capacitated to render the essential marital obligations to Cynthia, who should be
declared guilty of abandoning him, the family home and their children.

As earlier stated, the CA granted the petition and reversed and set aside the assailed orders of the RTC. The appellate court stated
that the requirement of a motion for reconsideration as a prerequisite to appeal under A.M. No. 02-11-10-SC did not apply in this
case as the marriage between Cynthia and Danilo was solemnized on February 14, 1980 before the Family Code took effect. It relied
on the ruling of this Court in Enrico v. Heirs of Sps. Medinaceli[3] to the effect that the coverage [of A.M. No. 02-11-10-SC] extends
only to those marriages entered into during the effectivity of the Family Code which took effect on August 3, 1988.

Cynthia sought reconsideration of the ruling by filing her Manifestation with Motion for Extension of Time to File Motion for
Reconsideration and Motion for Partial Reconsideration [of the Honorable Courts Decision dated December 10, 2008]. The CA,
however, in its February 11, 2009 Resolution,[4] denied the motion for extension of time considering that the 15-day reglementary
period to file a motion for reconsideration is non-extendible, pursuant to Section 2, Rule 40, 1997 Rules on Civil Procedure
citing Habaluyas v. Japson, 142 SCRA 208. The motion for partial reconsideration was likewise denied.

Hence, Cynthia interposes the present petition via Rule 45 of the Rules of Court raising the following

ISSUES

THE COURT OF APPEALS GRAVELY ERRED IN ISSUING THE QUESTIONED DECISION DATED DECEMBER 10, 2008 CONSIDERING THAT:
3

A. THE PRONOUNCEMENT OF THE HONORABLE COURT IN ENRICO V. SPS. MEDINACELI IS NOT APPLICABLE TO THE INSTANT CASE
CONSIDERING THAT THE FACTS AND THE ISSUE THEREIN ARE NOT SIMILAR TO THE INSTANT CASE.

B. ASSUMING ARGUENDO THAT THE PRONOUNCEMENT OF THE HONORABLE COURT IS APLLICABLE TO THE INSTANT CASE, ITS
RULING IN ENRICO V. SPS. MEDINACELI IS PATENTLY ERRONEOUS BECAUSE THE PHRASE UNDER THE FAMILY CODE IN A.M. NO. 02-
11-10-SC PERTAINS TO THE WORD PETITIONS RATHER THAN TO THE WORD MARRIAGES.

C. FROM THE FOREGOING, A.M. NO. 02-11-10-SC ENTITLED RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARRIAGES
AND ANNULMENT OF VOIDABLE MARRIAGES IS APPLICABLE TO MARRIAGES SOLEMNIZED BEFORE THE EFFECTIVITY OF THE FAMILY
CODE. HENCE, A MOTION FOR RECONSIDERATION IS A PRECONDITION FOR AN APPEAL BY HEREIN RESPONDENT.

D. CONSIDERING THAT HEREIN RESPONDENT REFUSED TO COMPLY WITH A PRECONDITION FOR APPEAL, A RELAXATION OF THE
RULES ON APPEAL IS NOT PROPER IN HIS CASE.

II

THE COURT OF APPEALS GRAVELY ERRED IN ISSUING THE QUESTIONED RESOLUTION DATED FEBRUARY 11, 2009 CONSIDERING THE
FOREGOING AND THE FACTUAL CIRCUMSTANCES OF THIS CASE.

III

THE TENETS OF JUSTICE AND FAIR PLAY, THE NOVELTY AND IMPORTANCE OF THE ISSUE AND THE SPECIAL CIRCUMSTANCES IN THIS
CASE JUSTIFY AND WARRANT A LIBERAL VIEW OF THE RULES IN FAVOR OF THE PETITIONER. MOREOVER, THE INSTANT PETITION IS
MERITORIOUS AND NOT INTENDED FOR DELAY.[5]

From the arguments advanced by Cynthia, the principal question to be resolved is whether or not A.M. No. 02-11-10-SC entitled
Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages, is applicable to the case at bench.

Petitioner argues that A.M. No. 02-11-10-SC is also applicable to marriages solemnized before the effectivity of the Family
Code. According to Cynthia, the CA erroneously anchored its decision to an obiter dictum in the aforecited Enrico case, which did
not even involve a marriage solemnized before the effectivity of the Family Code.

She added that, even assuming arguendo that the pronouncement in the said case constituted a decision on its merits, still the
same cannot be applied because of the substantial disparity in the factual milieu of the Enrico case from this case. In the said case,
both the marriages sought to be declared null were solemnized, and the action for declaration of nullity was filed, after the
effectivity of both the Family Code in 1988 and of A.M. No. 02-11-10-SC in 2003. In this case, the marriage was solemnized before
the effectivity of the Family Code and A.M. No. 02-11-10-SC while the action was filed and decided after the effectivity of both.

Danilo, in his Comment,[6] counters that A.M. No. 02-11-10-SC is not applicable because his marriage with Cynthia was solemnized
on February 14, 1980, years before its effectivity. He further stresses the meritorious nature of his appeal from the decision of the
RTC declaring their marriage as null and void due to his purported psychological incapacity and citing the mere failure of the parties
who were supposedly remiss, but not incapacitated, to render marital obligations as required under Article 36 of the Family Code.
4

The Court finds the petition devoid of merit.

Petitioner insists that A.M. No. 02-11-10-SC governs this case. Her stance is unavailing. The Rule on Declaration of Absolute Nullity
of Void Marriages and Annulment of Voidable Marriages as contained in A.M. No. 02-11-10-SC which the Court promulgated
on March 15, 2003, is explicit in its scope. Section 1 of the Rule, in fact, reads:

Section 1. Scope This Rule shall govern petitions for declaration of absolute nullity of void marriages and annulment of voidable
marriages under the Family Code of the Philippines.

The Rules of Court shall apply suppletorily.

The categorical language of A.M. No. 02-11-10-SC leaves no room for doubt. The coverage extends only to those marriages entered
into during the effectivity of the Family Code which took effect on August 3, 1988.[7] The rule sets a demarcation line between
marriages covered by the Family Code and those solemnized under the Civil Code. [8]

The Court finds Itself unable to subscribe to petitioners interpretation that the phrase under the Family Code in A.M. No. 02-11-10-
SC refers to the word petitions rather than to the word marriages.

A cardinal rule in statutory construction is that when the law is clear and free from any doubt or ambiguity, there is no room for
construction or interpretation. There is only room for application.[9] As the statute is clear, plain, and free from ambiguity, it must
be given its literal meaning and applied without attempted interpretation. This is what is known as the plain-meaning rule or verba
legis. It is expressed in the maxim, index animi sermo, or speech is the index of intention. Furthermore, there is the maxim verba
legis non est recedendum, or from the words of a statute there should be no departure. [10]

There is no basis for petitioners assertion either that the tenets of substantial justice, the novelty and importance of the issue and
the meritorious nature of this case warrant a relaxation of the Rules in her favor. Time and again the Court has stressed that
the rules of procedure must be faithfully complied with and should not be discarded with the mere expediency of claiming
substantial merit.[11] As a corollary, rules prescribing the time for doing specific acts or for taking certain proceedings are
considered absolutely indispensable to prevent needless delays and to orderly and promptly discharge judicial business. By their
very nature, these rules are regarded as mandatory. [12]

The appellate court was correct in denying petitioners motion for extension of time to file a motion for reconsideration considering
that the reglementary period for filing the said motion for reconsideration is non-extendible. As pronounced in Apex Mining Co.,
Inc. v. Commissioner of Internal Revenue, [13]

The rule is and has been that the period for filing a motion for reconsideration is non-extendible. The Court has made this clear as
early as 1986 in Habaluyas Enterprises vs. Japzon. Since then, the Court has consistently and strictly adhered thereto.

Given the above, we rule without hesitation that the appellate courts denial of petitioners motion for reconsideration is justified,
precisely because petitioners earlier motion for extension of time did not suspend/toll the running of the 15-day reglementary
period for filing a motion for reconsideration. Under the circumstances, the CA decision has already attained finality when
petitioner filed its motion for reconsideration. It follows that the same decision was already beyond the review jurisdiction of this
Court.

In fine, the CA committed no reversible error in setting aside the RTC decision which denied due course to respondents appeal and
denying petitioners motion for extension of time to file a motion for reconsideration.
5

Appeal is an essential part of our judicial system. Its purpose is to bring up for review a final judgment of the lower court. The courts
should, thus, proceed with caution so as not to deprive a party of his right to appeal. [14] In the recent case of Almelor v. RTC of Las
Pinas City, Br. 254,[15] the Court reiterated: While the right to appeal is a statutory, not a natural right, nonetheless it is an essential
part of our judicial system and courts should proceed with caution so as not to deprive a party of the right to appeal, but rather,
ensure that every party-litigant has the amplest opportunity for the proper and just disposition of his cause, free from the
constraints of technicalities.

In the case at bench, the respondent should be given the fullest opportunity to establish the merits of his appeal considering that
what is at stake is the sacrosanct institution of marriage.

No less than the 1987 Constitution recognizes marriage as an inviolable social institution. This constitutional policy is echoed in our
Family Code. Article 1 thereof emphasizes its permanence and inviolability, thus:

Article 1. Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for
the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose nature,
consequences, and incidents are governed by law and not subject to stipulation, except that marriage settlements may fix the
property relations during the marriage within the limits provided by this Code.

This Court is not unmindful of the constitutional policy to protect and strengthen the family as the basic autonomous social
institution and marriage as the foundation of the family.[16]

Our family law is based on the policy that marriage is not a mere contract, but a social institution in which the State is vitally
interested. The State finds no stronger anchor than on good, solid and happy families. The break up of families weakens our social
and moral fabric and, hence, their preservation is not the concern alone of the family members. [17]

WHEREFORE, the petition is DENIED.

SO ORDERED.

A.M. No. RTJ-04-1868 August 13, 2004

RE: REQUEST OF JUDGE TITO G. GUSTILO THAT THE SECOND 25% GRANT OF THE SPECIAL ALLOWANCE FOR JUDGES BE INCLUDED
IN THE COMPUTATION OF HIS RETIREMENT BENEFITS

RESOLUTION

CALLEJO, SR., J.:

In his Letter dated May 26, 2004 addressed to Chief Justice Hilario G. Davide, Jr., Judge Tito G. Gustilo of the Regional Trial Court of
Iloilo City, Branch 23, avers that he is due to retire at the age of 70 (compulsory retirement) on September 29, 2004. By then, he would
have served the Judiciary for 21 years; 7 years and 11-and-1/2 months of which as Executive Judge of the RTC of Iloilo City. Judge
6

Gustilo requests that, considering his retirement is "barely one month from November 2004," the second tranche of the Special
Allowance granted to judges under Republic Act No. 92271 be included in the computation of his retirement benefits.

To recall, Rep. Act No. 9227, which took effect on November 11, 2003, 2 granted additional compensation in the form of Special
Allowance to justices, judges and all other positions in the Judiciary with the equivalent rank of justices of the Court of Appeals and
judges of the Regional Trial Court. Section 2 thereof reads:

Sec. 2. Grant of Special Allowances. – All justices, judges and all other positions in the Judiciary with the equivalent rank of
justices of the Court of Appeals and judges of the Regional Trial Court as authorized under existing laws shall be granted
special allowances equivalent to one hundred percent (100%) of the basic monthly salary specified for their respective salary
grades under Republic Act No. 6758, as amended, otherwise known as the Salary Standardization Law, to be implemented
for a period of four (4) years.

The grant of special allowances shall be implemented uniformly in such sums or amounts equivalent to twenty-five percent
(25%) of the basic salaries of the positions covered hereof. Subsequent implementation shall be in such sums and amounts
and up to the extent only that can be supported by the funding source specified in Section 3 hereof.

Further, Section 5 of the same law provides:

Sec. 5. Inclusion in the Computation of Retirement Benefits. – For purposes of retirement, only the allowances actually
received and the tranche or tranches of the special allowance already implemented and received pursuant to this Act by the
justices, judges and all other positions in the Judiciary with the equivalent rank of justices of the Court of Appeals and judges
of the Regional Trial Court as authorized under existing laws shall, at the date of their retirement, be included in the
computation of their respective retirement benefits.

On March 9, 2004, in A.M. No. 03-12-04-SC (Re: Possible Means to Implement the Special Allowance under R.A. 9227 and to Increase
the Judiciary Development Fund), the Court promulgated the GUIDELINES ON THE GRANT OF ADDITIONAL COMPENSATION IN THE
FORM OF SPECIAL ALLOWANCE FOR JUSTICES AND JUDGES IN THE JUDICIARY AND ALL OTHER OFFICIALS WITH THE EQUIVALENT RANK
OF JUSTICES OF THE COURT OF APPEALS AND JUDGES OF THE REGIONAL TRIAL COURT. The Guidelines provide for the manner of the
implementation in this wise:

4.1 The Special Allowance shall be implemented uniformly in such sums or amounts equivalent to twenty-five percent (25%)
of the actual basic monthly salaries for the positions covered starting 11 November 2003 until the one hundred percent
(100%) special allowance is fully implemented.

If the source of fund is insufficient to cover the twenty-five percent (25%) special allowance for any year, it shall be granted
in such sums and amounts and up to the extent only that can be supported by the funding source specified in Section 3 of
Rep. Act No. 9227; provided that annually the special allowance shall always be twenty-five percent (25%) of the actual "basic
monthly salary."

The Guidelines, likewise, reiterate that:

4.2 For purposes of computing the retirement benefits, only the special allowance actually received and that which has
accrued at the time of retirement shall be included.

Paragraph 7.0 thereof states that cases not covered thereby shall be referred to the Chief Justice for resolution.

Judge Gustilo claims that pursuant to OCA Circular No. 48-2004 dated March 3, 2004, the first tranche of the Special Allowance
equivalent to 25% was implemented starting November 11, 2003. The next 25% (second tranche) will be implemented on November
11, 2004. In this connection, Judge Gustilo appeals to the Chief Justice that, in the computation of his retirement benefits, the second
tranche of the Special Allowance be included since his retirement is only one (1) month and twelve (12) days before its implementation
on November 11, 2004.

In support thereof, Judge Gustilo points out that "in the past, Judges who retire in October are included in the grant of the December
13th month pay." He, thus, invokes the "liberal policy" of the Court "in granting benefits to the underpaid Trial Court Judges."

In the Memorandum dated June 18, 2004 for the Chief Justice, the Office of the Court Administrator (OCA) 3recommends that the
request of Judge Gustilo be granted. The OCA cites Judge Gustilo’s service record in the Judiciary, which started on January 18, 1983,
including his exemplary record of disposing cases at an average of 2.25 cases each month. It also mentions that Judge Gustilo, as
Executive Judge, introduced several innovations in the Iloilo City courts and was able to manage well the 17 judges under his
administrative supervision. Further, Judge Gustilo was the recipient of several "awards and recognitions." 4 Considering the foregoing,
the OCA concludes that "it is but just and fair that the second additional Special Allowance of 25% be granted to him and included in
the computation of his retirement benefits."5
7

In compliance with the Court’s Resolution dated July 6, 2004, referring Judge Gustilo’s letter and the OCA’s memorandum to her for
study and recommendation, Chief Attorney Edna E. Diño submitted her Report dated July 15, 2004. The Chief Attorney recommends
that Judge Gustilo’s request be denied for not being in accord with Rep. Act No. 9227 and the Guidelines promulgated by the Court.

After a careful evaluation of Judge Gustilo’s letter, the OCA’s memorandum and the Chief Attorney’s report, the Court, regrettably,
cannot grant the request of Judge Gustilo.

It is axiomatic that when the law is clear, the function of the courts is simple application, not interpretation or circumvention.6 With
respect to the manner of computation of the retirement benefits in light of the Special Allowance granted under Rep. Act No. 9227,
Section 5 thereof, quoted anew below, could not be any clearer:

Sec. 5. Inclusion in the Computation of Retirement Benefits. – For purposes of retirement, only the allowances actually
received and the tranche or tranches of the special allowance already implemented and received pursuant to this Act by the
justices, judges and all other positions in the Judiciary with the equivalent rank of justices of the Court of Appeals and judges
of the Regional Trial Court as authorized under existing laws shall, at the date of their retirement, be included in the
computation of their respective retirement benefits.

A plain reading of the above provision shows that, for purposes of retirement, only the allowances "actually received" and the tranche
or tranches "already received and implemented," upon the date of retirement, shall be included in the computation of the retirement
benefits. Otherwise put, before the Special Allowance could be considered in the computation of retirement benefits, it should have
been "actually received" and the tranche or tranches thereof should have been "already implemented and received" at the date of
retirement.

Section 5 of Rep. Act No. 9227 is clear and unambiguous. There is no room for its interpretation. Further, the foregoing exchange
among the members of the Bicameral Conference Committee7 on the Disagreeing Provisions of Senate Bill (SB) No. 2018 and House
Bill (HB) No. 51788 is particularly instructive:

...

THE CHAIRMAN (SEN. PANGILINAN). Accepted.

Section 4. No questions? (Silence)

Section 5. (Silence)

Just again for purposes of record and clarification, Section 5, lines 3 and 4, "For purposes of retirement, only the allowances
actually received…," and so forth and so on, I just like to make it clear that the computation of retirement would include the
salary already being received, plus the special allowance.

THE CO-CHAIRMAN (REP. ANDAYA). Yes.

THE CHAIRMAN (SEN. PANGILINAN). Because this seems to suggest that you compute, rather the computation of retirement
will be on the basis only of the special allowance. So, at least, let’s make that on record.

THE CO-CHAIRMAN (REP. ANDAYA). Yes. On record, yes.

And I think that first word in the title of Section 5, "Inclusion" also explains that.

REP. LIBANAN. Mr. Chairman.

THE CO-CHAIRMAN (REP. ANDAYA). Congressman Libanan.

REP. LIBANAN. For the sake of further clarification, would it mean that if, for example, a judge retires on the second year of
the implementation, so his retirement benefits would be only computed….

THE CHAIRMAN (SEN. PANGILINAN). On the basis of what he is already receiving.

REP. LIBANAN. … on the basis of [what] he is receiving, not on the 100 percent.

THE CO-CHAIRMAN (REP. ANDAYA). Actually receiving. That is correct.

REP. LIBANAN. Thank you, Mr. Chairman.

...
8

THE CHAIRMAN (SEN. PANGILINAN). Can we now go back to Section 5?

THE CHAIRMAN (REP. ANDAYA). Section 5, Mr. Chairman, just a suggestion but in the House panel

SEN. ARROYO. Kasi kung mandatory, doon sa voluntary, hindi naman dapat iyon.

THE CHAIRMAN (REP. ANDAYA). I’ll be constrained to withdraw my proposal.

SEN. ARROYO. But your idea is very attractive.

SEN. VILLAR. In fact, it’s too attractive. In the first place, iyong allowance is already part of the retirement benefit. Iyon,
malaking bagay na iyon, eh.

Mr. Chairman, may add-on pa. Medyo sobra naman yata na iyon.

SEN. ARROYO. No, because by the accident of birth, when they retire, they retire on the second year, halimbawa, 68 sila
ngayon. Pagkatapos, mandatorily they have to retire at the age of 70, di iyong benefits nila is …

THE CHAIRMAN (SEN. PANGILINAN). For those born in 1934 up to 1937.

THE CHAIRMAN (REP. ANDAYA). But the fact here remains, the allowances they have been receiving so far which is over and
above, kasama na talaga sa retirement. I mean, sobra-sobra na, eh. Lahat na lang ng allowance na puwedeng gawin, nandoon
na, eh. At saka nagre-retire pa sila sa 70, ibig sabihin talagang marami na iyan.

THE CHAIRMAN (SEN. PANGILINAN). Okay?

THE CHAIRMAN (REP. ANDAYA). Okay.

THE CHAIRMAN (SEN. PANGILINAN). So, as is?

THE CHAIRMAN (REP. ANDAYA). Nandoon na, eh.

THE CHAIRMAN (SEN. PANGILINAN). So, whether they retire at 60 or 70, whether they opt for early retirement or mandatory
retirement, they will receive the actual. Would it not be a good idea to encourage them to stay on … 9

Thus, the congressional records as well as the text itself of Rep. Act No. 9227 reveal the unequivocal intention of the lawmakers that
only the Special Allowance actually received at the date of retirement shall be included in the computation of the retirement benefits.

The Guidelines promulgated by this Court pursuant to Rep. Act No. 9227 is even more definite as it used the term "accrued" in this
wise: "only the special allowance actually received and that which has accrued at the time of retirement shall be included." As correctly
reasoned by the Chief Attorney:

Notably, the phrase "has accrued at the time of retirement" is used in the Guidelines instead of "the tranche or tranches of
the special allowance already implemented and received" which is used in Section 5 of Rep. Act No. 9227. Nevertheless, the
same meaning is conveyed. The word "accrue" means "to come into existence as an enforceable claim: vest as a right" or "to
come by way of increase or addition: arise as a growth or result" or "to be periodically accumulated in the process of time
whether as an increase or a decrease." Hence, a Special Allowance that has not yet come into existence as an enforceable
claim or has not yet vested on the recipient judge as a matter of right cannot be considered in the computation of retirement
benefits.10

Indeed, "accrue" in its past tense is "in sense of due and demandable; vested."11 In the case of Judge Gustilo, on the date of his
retirement, the second tranche of the Special Allowance has not accrued as yet; hence, it cannot be said that the same is due and
demandable or that it has vested insofar as he is concerned.

The Chief Attorney, likewise, correctly posits that the strict application of Section 5 of Rep. Act No. 9227 is called for by the fact that,
under Section 3 thereof,12 the source for the Special Allowance is the Judiciary Development Fund (JDF), established under Presidential
Decree No. 1949, which basically comes from the docket fees paid by litigants:

... As such, the JDF as a fund source is not constant or fixed in amount, as its amount depends on the amount collected by the
courts and the amount of increase in docket fees that the Court would impose. The fact of the JDF becoming insufficient has
been foreseen by the Court and is reflected in the second paragraph of 4.1 of the Guidelines quoted above. It is worth noting
that until now, the first tranche of the Special Allowance has been received only for the months of 11 November 2003 until
February 2004. The delay in receipt thereof may continue if courts nationwide do not timely transmit the reports of
9

collections to the OCA, as the JDF should be disbursed only if the reports of collections and the deposits under the JDF account
for the Special Allowance tally in accordance with accounting and auditing rules. 13

While this Court had, in certain cases,14 adopted a liberal stance in interpreting retirement laws in favor of the retiree, it cannot do so
in this case because, as earlier stated, Section 5 of Rep. Act No. 9227 is quite clear and unambiguous. In other words, there is no room
for interpretation but only simple application of the law.

ACCORDINGLY, the request of Judge Tito G. Gustilo that the second 25% or second tranche of the Special Allowance granted under
Rep. Act No. 9227 be included in the computation of his retirement benefits is DENIED.

SO ORDERED.

Davide, Jr., C.J., Puno, Panganiban, Quisumbing, Ynares-Santiago, Carpio, Austria-Martinez, Corona, Carpio-Morales, Azcuna, Tinga,
and Chico-Nazario, JJ., concur.
Sandoval-Gutierrez, J., on leave.

G.R. No. 125183 September 29, 1997

MUNICIPALITY OF SAN JUAN, METRO MANILA, petitioner,

vs.
COURT OF APPEALS, DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES, CORAZON DE JESUS HOMEOWNERS
ASSOCIATION, INC., ADRIANO A. DELAMIDA, SR. CELSO T. TORRES, TARCILA V. ZATA, QUIRICO T. TORRES, CATALINA BONGAT,
MILAGROS A. HERBOLARIO, ROSALINDA A. PIMENTEL, PURIFICACION MORELLA, FRANCISCO RENION, SR., MARCELINA CORPUZ,
BENEDICTO FALCON, MAXIMO FALCON, MARIO BOLANOS, VICENTE T. SURIAO, ROSARIO GREGORIA G. DORADO, JEREMIAS Z.
PATRON, ALEX RODRIGUEZ, MARIA LUISA ALPAPARA, HERMINIA C. RODRIGUEZ, VICTORIANO ESPANOL, MARIO L. AGUILAR,
FREDDIE AMADOR, SILVERIO PURISIMA, JR., PROCOPIO B. PENARANDA, ELADIO MAGLUYAN, HELENITA GUEI, CELESTINO
MONTANO, ROMEO GOMEZ, OFELIA LOGO, JIMMY MACION, DAISY A. MANGA, MAURO MANGA, ARTHUR HERBOLARIO,
MANOLITO HERBOLARIO, ROSARIO ANCHETA, TERESITA A. VICTORIA, ROSALINA SAMPAGA, MARIQUITA RUADO, FELIPE ANCHETA,
MAGDALENA CABREZA, MARIA BIANDILLA, NILDA ARENSOL, LORENZO S. TOLEDO, and NAPOLEON D. VILORIA, SR., respondents.

MELO, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court, assailing and seeking to reverse and set aside: a)
the decision dated November 23, 1995 of the Court of Appeals reversing the decision of the Regional Trial Court of Pasig, Metro
Manila, Branch 159; and b) the resolution dated May 28, 1996 denying reconsideration of said decision.

The generative facts of the case are as follows:

On February 17, 1978, then President Ferdinand Marcos issued Proclamation No. 1716 reserving for Municipal Government Center
Site Purposes certain parcels of land of the public domain located in the Municipality of San Juan, Metro Manila.

Considering that the land covered by the above-mentioned proclamation was occupied by squatters, the Municipality of San Juan
purchased an 18-hectare land in Taytay, Rizal as resettlement center for the said squatters. Only after resettling these squatters would
the municipality be able to develop and construct its municipal government center on the subject land.

After hundreds of squatter families were resettled, the Municipality of San Juan started to develop its government center by
constructing the INP Building, which now serves as the PNP Headquarters, the Fire Station Headquarters, and the site to house the
two salas of the Municipal Trial Courts and the Office of the Municipal Prosecutors. Also constructed thereon are the Central Post
Office Building and the Municipal High School Annex Building.

On October 6, 1987, after Congress had already convened on July 26, 1987, former President Corazon Aquino issued Proclamation No.
164, amending Proclamation No. 1716. Said amendatory proclamation pertinently reads as follows:

PROCLAMATION NO. 164

AMENDING PROCLAMATION NO. 1716, DATED FEBRUARY 17, 1978, WHICH RESERVED FOR
MUNICIPAL GOVERNMENT CENTER SITE PURPOSES CERTAIN PARCELS OF LAND OF THE PUBLIC
DOMAIN SITUATED IN THE MUNICIPALITY OF SAN JUAN, METROPOLITAN MANILA, ISLAND OF
LUZON, BY EXCLUDING FROM ITS OPERATION THE PARCELS OF LAND NOT BEING UTILIZED FOR
GOVERNMENT CENTER SITES PURPOSES BUT ACTUALLY OCCUPIED FOR RESIDENTIAL PURPOSES
AND DECLARING THE LAND OPEN TO DISPOSITION UNDER THE PROVISIONS OF THE PUBLIC LAND
ACT, AS AMENDED.
10

Upon recommendation of the Secretary of Environment and Natural Resources and by virtue of the powers vested
in me by law, I, CORAZON C. AQUINO, President of the Philippines, do hereby amend Proclamation No. 1716, dated
February 17, 1978, which established for municipal government center site purposes certain parcels of land
mentioned therein situated in the Municipality of San Juan, Metro Manila, by excluding from its operation the parcels
of land not being utilized for government center site purposes but actually occupied for residential purposes and
declaring the land so excluded, together with other parcels of land not covered by Proclamation No. 1716 but
nevertheless occupied for residential purposes, open to disposition under the provisions of the Public Land Act, as
amended, subject to future survey, which are hereunder particularly described as follows:

Lot 1 (Port.) Psu-73270

xxx xxx xxx

Lot 4 (Port.) Psd-740

and Psd-810

xxx xxx xxx

Lot 5 (Port.) Psu-73270

xxx xxx xxx

IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the Republic of the
Philippines to be affixed.

Done in the City of Manila, this 6th day of October in the year of Our Lord, nineteen hundred and
eighty-seven.

(Sgd.) CORAZON C. AQUINO

By the President:

(Sgd.) CATALINO MACARAIG, JR.

Acting Executive Secretary

(Rollo, pp. 148-151.)

On June 1, 1988, the Corazon de Jesus Homeowners Association, Inc., one of herein private respondents, filed with the Regional Trial
Court of the National Capital Judicial Region (Pasig, Branch 159) a petition for prohibition with urgent prayer for restraining order
against the Municipal Mayor and Engineer of San Juan and the Curator of Pinaglabanan Shrine, to enjoin them from either removing
or demolishing the houses of the association members who were claiming that the lots they occupied have been awarded to them by
Proclamation No. 164.

On September 14, 1990, the regional trial court dismissed the petition, ruling that the property in question is being utilized by the
Municipality of San Juan for government purposes and thus, the condition set forth in Proclamation No. 164 is absent.

The appeal before the Court of Appeals was dismissed in a decision dated July 17, 1991. This decision became final and the said
judgment was duly entered on April 8, 1992.

Disregarding the ruling of the court in this final judgment, private respondents hired a private surveyor to make consolidation-
subdivision plans of the land in question, submitting the same to respondent Department of Environment and Natural Resources
(DENR) in connection with their application for a grant under Proclamation No. 164.

To prevent DENR from issuing any grant to private respondents, petitioner municipality filed a petition for prohibition with prayer for
issuance of a temporary restraining order and preliminary injunction against respondent DENR and private respondent Corazon de
Jesus Homeowners Association.

The regional trial court sustained petitioner municipality, enjoining the DENR from disposing and awarding the parcels of land covered
by Proclamation No. 164.

The Court of Appeals reversed, hence, the present recourse.

Cutting through the other issues, it would appear that ultimately, the central question and bone of contention in the petition before
us boils down to the correct interpretation of Proclamation No. 164 in relation to Proclamation No. 1716.
11

Petitioner municipality assails the decision of the Court of Appeals by hammering on the issue of res judicata in view of the fact that
an earlier judgment, which had become final and executory, had already settled the respective rights of the parties under Proclamation
No. 164. This notwithstanding, petitioner reiterates the reasons why the court had previously ruled in favor of petitioner's rights over
the subject property against the claims of private respondents.

We find good legal basis to sustain petitioner's position on the issue of res judicata insofar as the particular area covered by
Proclamation No. 164, which was the subject matter of the earlier case, is concerned.

The basic elements of res judicata are: (a) the former judgment must be final; (b) the court which rendered it had jurisdiction over the
subject matter and the parties; (c) it must be a judgment on the merits; and (d) there must be between the first and second actions
identity of parties, subject matter, and cause of action (Mangoma vs. Court of Appeals, 241 SCRA 21 [1995]).

The existence of the first three elements can not be disputed. As to identity of parties, we have ruled that only substantial identity is
required and not absolute identity of parties (Suarez vs. Municipality of Naujan, 18 SCRA 682 [1966]). The addition of public respondent
DENR in the second case will thus be of no moment. Likewise, there is identity of cause of action since the right of the municipality
over the subject property, the corresponding obligation of private respondents to respect such right and the resulting violation of said
right all remain to be the same in both the first and the second actions despite the fact that in the first action, private respondents
were the plaintiff while in the second action, they were the respondents.

The last requisite is identity of subject matter. Res judicata only extends to such portion of land covered by Proclamation No. 164
which the court ruled may not be automatically segregated from the land covered by Proclamation No. 1716. It does not include those
portions which are outside the coverage of Proclamation No. 1716.

Withal, reversal of the decision of the Court of Appeals would be justified upon the above premise and our discussion may properly
end here. However, there exists a more basic reason for setting aside the appealed decision and this has reference to a fundamental
and gross error in the issuance of Proclamation No. 164 on October 16, 1987 by then President Aquino.

Proclamation No. 1716 was issued by the late President Ferdinand E. Marcos on February 17, 1978 in the due exercise of legislative
power vested upon him by Amendment No. 6 introduced in 1976. Being a valid act of legislation, said Proclamation may only be
amended by an equally valid act of legislation. Proclamation No. 164 is obviously not a valid act of legislation. After the so-called
bloodless revolution of February 1986, President Corazon Aquino took the reigns of power under a revolutionary government. On
March 24, 1986, she issued her historic Proclamation No. 3, promulgating the Provisional Constitution, or more popularly referred to
as the Freedom Constitution. Under Article II, Section 1 of the Freedom Constitution, the President shall continue to exercise legislative
power until a legislature is elected and convened under a new constitution. Then came the ratification of the draft constitution, to be
known later as the 1987 Constitution. When Congress was convened on July 26, 1987, President Aquino lost this legislative power
under the Freedom Constitution. Proclamation No. 164, amending Proclamation No. 1716 was issued on October 6, 1987 when
legislative power was already solely on Congress.

Although quite lamentably, this matter has escaped the attention of petitioner as well as the courts before which this case has already
passed through, this Court cannot help noticing this basic flaw in the issuance of Proclamation No. 164. Because this unauthorized act
by the then president constitutes a direct derogation of the most basic principle in the separation of powers between the three
branches of government enshrined in our Constitution, we cannot simply close our eyes and rely upon the principle of the presumption
of validity of a law.

There is a long standing principle that every statute is presumed to be valid (Salas vs. Jarencio, 48 SCRA 734 [1970]; Peralta vs. Comelec,
82 SCRA 30 [1978]). However, this rests upon the premise that the statute was duly enacted by legislature. This presumption cannot
apply when there is clear usurpation of legislative power by the executive branch. For this Court to allow such disregard of the most
basic of all constitutional principles by reason of the doctrine of presumption of validity of a law would be to turn its back to its sacred
duty to uphold and defend the Constitution. Thus, also, it is in the discharge of this task that we take this exception from the Court's
usual practice of not entertaining constitutional questions unless they are specifically raised, insisted upon, and adequately argued.

We, therefore, hold that the issuance of Proclamation No. 164 was an invalid exercise of legislative power. Consequently, said
Proclamation is hereby declared NULL and VOID.

WHEREFORE, the appealed decision of the Court of Appeals is hereby SET ASIDE. Public respondent Department of Environment and
Natural Resources is hereby permanently ENJOINED from enforcing Proclamation No. 164.

SO ORDERED.

EN BANC

LOUIS BAROK C. BIRAOGO, G.R. No. 192935

Petitioner,
12

- versus -

THE PHILIPPINE TRUTH COMMISSION OF 2010,

Respondent.
x-----------------------x
REP. EDCEL C. LAGMAN,
REP. RODOLFO B. ALBANO, JR., REP. SIMEON A. G.R. No. 193036
DATUMANONG, and REP. ORLANDO B. FUA, SR.,
Petitioners, Present:

CORONA, C.J.,
CARPIO,
- versus - CARPIO MORALES,
VELASCO, JR.,
NACHURA,
LEONARDO-DE CASTRO,
BRION,
PERALTA,
BERSAMIN,
DEL CASTILLO,
ABAD,
EXECUTIVE SECRETARY PAQUITO N. OCHOA, JR. and VILLARAMA, JR.,
DEPARTMENT OF BUDGET AND MANAGEMENT PEREZ,
SECRETARY FLORENCIO B. ABAD, MENDOZA, and
Respondents. SERENO, JJ.

Promulgated:

December 7, 2010

x -------------------------------------------------------------------------------------- x

DECISION

MENDOZA, J.:

When the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the
other departments; it does not in reality nullify or invalidate an act of the legislature, but only asserts the solemn and
sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the Constitution
and to establish for the parties in an actual controversy the rights which that instrument secures and guarantees to
them.

--- Justice Jose P. Laurel[1]

The role of the Constitution cannot be overlooked. It is through the Constitution that the fundamental powers of government are
established, limited and defined, and by which these powers are distributed among the several departments. [2] The Constitution is the
basic and paramount law to which all other laws must conform and to which all persons, including the highest officials of the land,
must defer.[3] Constitutional doctrines must remain steadfast no matter what may be the tides of time. It cannot be simply made to
sway and accommodate the call of situations and much more tailor itself to the whims and caprices of government and the people
who run it.[4]

For consideration before the Court are two consolidated cases[5] both of which essentially assail the validity and constitutionality of
Executive Order No. 1, dated July 30, 2010, entitled Creating the Philippine Truth Commission of 2010.

The first case is G.R. No. 192935, a special civil action for prohibition instituted by petitioner Louis Biraogo (Biraogo) in his
capacity as a citizen and taxpayer. Biraogo assails Executive Order No. 1 for being violative of the legislative power of Congress under
13

Section 1, Article VI of the Constitution[6] as it usurps the constitutional authority of the legislature to create a public office and to
appropriate funds therefor.[7]

The second case, G.R. No. 193036, is a special civil action for certiorari and prohibition filed by petitioners Edcel C. Lagman, Rodolfo B.
Albano Jr., Simeon A. Datumanong, and Orlando B. Fua, Sr. (petitioners-legislators) as incumbent members of the House of
Representatives.

The genesis of the foregoing cases can be traced to the events prior to the historic May 2010 elections, when then Senator Benigno
Simeon Aquino III declared his staunch condemnation of graft and corruption with his slogan, Kung walang corrupt, walang
mahirap. The Filipino people, convinced of his sincerity and of his ability to carry out this noble objective, catapulted the good senator
to the presidency.

To transform his campaign slogan into reality, President Aquino found a need for a special body to investigate reported cases
of graft and corruption allegedly committed during the previous administration.

Thus, at the dawn of his administration, the President on July 30, 2010, signed Executive Order No. 1 establishing
the Philippine Truth Commission of 2010 (Truth Commission). Pertinent provisions of said executive order read:
EXECUTIVE ORDER NO. 1

CREATING THE PHILIPPINE TRUTH COMMISSION OF 2010

WHEREAS, Article XI, Section 1 of the 1987 Constitution of the Philippines solemnly enshrines the principle that a
public office is a public trust and mandates that public officers and employees, who are servants of the people, must
at all times be accountable to the latter, serve them with utmost responsibility, integrity, loyalty and efficiency, act
with patriotism and justice, and lead modest lives;

WHEREAS, corruption is among the most despicable acts of defiance of this principle and notorious violation of this
mandate;

WHEREAS, corruption is an evil and scourge which seriously affects the political, economic, and social life of a nation;
in a very special way it inflicts untold misfortune and misery on the poor, the marginalized and underprivileged sector
of society;

WHEREAS, corruption in the Philippines has reached very alarming levels, and undermined the peoples trust and
confidence in the Government and its institutions;

WHEREAS, there is an urgent call for the determination of the truth regarding certain reports of large scale graft and
corruption in the government and to put a closure to them by the filing of the appropriate cases against those
involved, if warranted, and to deter others from committing the evil, restore the peoples faith and confidence in the
Government and in their public servants;

WHEREAS, the Presidents battlecry during his campaign for the Presidency in the last elections kung walang corrupt,
walang mahirap expresses a solemn pledge that if elected, he would end corruption and the evil it breeds;

WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning
the reported cases of graft and corruption during the previous administration, and which will recommend the
prosecution of the offenders and secure justice for all;
WHEREAS, Book III, Chapter 10, Section 31 of Executive Order No. 292, otherwise known as the Revised
Administrative Code of the Philippines, gives the President the continuing authority to reorganize the Office of the
President.

NOW, THEREFORE, I, BENIGNO SIMEON AQUINO III, President of the Republic of the Philippines, by virtue of the
powers vested in me by law, do hereby order:

SECTION 1. Creation of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter
referred to as the COMMISSION, which shall primarily seek and find the truth on, and toward this end, investigate
reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities
of the people, committed by public officers and employees, their co-principals, accomplices and accessories from
the private sector, if any, during the previous administration; and thereafter recommend the appropriate action or
measure to be taken thereon to ensure that the full measure of justice shall be served without fear or favor.
14

The Commission shall be composed of a Chairman and four (4) members who will act as an independent collegial
body.

SECTION 2. Powers and Functions. The Commission, which shall have all the powers of an investigative body under
Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-
finding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public
officers and higher, their co-principals, accomplices and accessories from the private sector, if any, during the
previous administration and thereafter submit its finding and recommendations to the President, Congress and the
Ombudsman.
In particular, it shall:

a) Identify and determine the reported cases of such graft and corruption which it will investigate;

b) Collect, receive, review and evaluate evidence related to or regarding the cases of large scale corruption which
it has chosen to investigate, and to this end require any agency, official or employee of the Executive Branch,
including government-owned or controlled corporations, to produce documents, books, records and other papers;

c) Upon proper request or representation, obtain information and documents from the Senate and the House of
Representatives records of investigations conducted by committees thereof relating to matters or subjects being
investigated by the Commission;

d) Upon proper request and representation, obtain information from the courts, including the Sandiganbayan and
the Office of the Court Administrator, information or documents in respect to corruption cases filed with the
Sandiganbayan or the regular courts, as the case may be;

e) Invite or subpoena witnesses and take their testimonies and for that purpose, administer oaths or affirmations
as the case may be;

f) Recommend, in cases where there is a need to utilize any person as a state witness to ensure that the ends of
justice be fully served, that such person who qualifies as a state witness under the Revised Rules of Court of the
Philippines be admitted for that purpose;

g) Turn over from time to time, for expeditious prosecution, to the appropriate prosecutorial authorities, by
means of a special or interim report and recommendation, all evidence on corruption of public officers and
employees and their private sector co-principals, accomplices or accessories, if any, when in the course of its
investigation the Commission finds that there is reasonable ground to believe that they are liable for graft and
corruption under pertinent applicable laws;

h) Call upon any government investigative or prosecutorial agency such as the Department of Justice or any of the
agencies under it, and the Presidential Anti-Graft Commission, for such assistance and cooperation as it may require
in the discharge of its functions and duties;

i) Engage or contract the services of resource persons, professionals and other personnel determined by it as
necessary to carry out its mandate;

j) Promulgate its rules and regulations or rules of procedure it deems necessary to effectively and efficiently carry
out the objectives of this Executive Order and to ensure the orderly conduct of its investigations, proceedings and
hearings, including the presentation of evidence;

k) Exercise such other acts incident to or are appropriate and necessary in connection with the objectives and
purposes of this Order.
SECTION 3. Staffing Requirements. x x x.

SECTION 4. Detail of Employees. x x x.

SECTION 5. Engagement of Experts. x x x

SECTION 6. Conduct of Proceedings. x x x.

SECTION 7. Right to Counsel of Witnesses/Resource Persons. x x x.
SECTION 8. Protection of Witnesses/Resource Persons. x x x.
SECTION 9. Refusal to Obey Subpoena, Take Oath or Give Testimony. Any government official or personnel who,
without lawful excuse, fails to appear upon subpoena issued by the Commission or who, appearing before the
Commission refuses to take oath or affirmation, give testimony or produce documents for inspection, when required,
shall be subject to administrative disciplinary action. Any private person who does the same may be dealt with in
accordance with law.
SECTION 10. Duty to Extend Assistance to the Commission. x x x.
SECTION 11. Budget for the Commission. The Office of the President shall provide the necessary funds for the
Commission to ensure that it can exercise its powers, execute its functions, and perform its duties and responsibilities
as effectively, efficiently, and expeditiously as possible.
15

SECTION 12. Office. x x x.

SECTION 13. Furniture/Equipment. x x x.

SECTION 14. Term of the Commission. The Commission shall accomplish its mission on or before December 31, 2012.

SECTION 15. Publication of Final Report. x x x.

SECTION 16. Transfer of Records and Facilities of the Commission. x x x.

SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to
expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and
instances of graft and corruption during the prior administrations, such mandate may be so extended accordingly by
way of a supplemental Executive Order.

SECTION 18. Separability Clause. If any provision of this Order is declared unconstitutional, the same shall not affect
the validity and effectivity of the other provisions hereof.

SECTION 19. Effectivity. This Executive Order shall take effect immediately.

DONE in the City of Manila, Philippines, this 30th day of July 2010.

(SGD.) BENIGNO S. AQUINO III

By the President:

(SGD.) PAQUITO N. OCHOA, JR.

Executive Secretary

Nature of the Truth Commission

As can be gleaned from the above-quoted provisions, the Philippine Truth Commission (PTC) is a mere ad hoc body formed
under the Office of the President with the primary task to investigate reports of graft and corruption committed by third-level public
officers and employees, their co-principals, accomplices and accessories during the previous administration, and thereafter to submit
its finding and recommendations to the President, Congress and the Ombudsman. Though it has been described as an independent
collegial body, it is essentially an entity within the Office of the President Proper and subject to his control. Doubtless, it constitutes a
public office, as an ad hoc body is one.[8]

To accomplish its task, the PTC shall have all the powers of an investigative body under Section 37, Chapter 9, Book I of the
Administrative Code of 1987. It is not, however, a quasi-judicial body as it cannot adjudicate, arbitrate, resolve, settle, or render
awards in disputes between contending parties. All it can do is gather, collect and assess evidence of graft and corruption and make
recommendations. It may have subpoena powers but it has no power to cite people in contempt, much less order their
arrest. Although it is a fact-finding body, it cannot determine from such facts if probable cause exists as to warrant the filing of an
information in our courts of law. Needless to state, it cannot impose criminal, civil or administrative penalties or sanctions.
The PTC is different from the truth commissions in other countries which have been created as official, transitory and non-
judicial fact-finding bodies to establish the facts and context of serious violations of human rights or of international humanitarian law
in a countrys past.[9] They are usually established by states emerging from periods of internal unrest, civil strife or authoritarianism to
serve as mechanisms for transitional justice.

Truth commissions have been described as bodies that share the following characteristics: (1) they examine only past events;
(2) they investigate patterns of abuse committed over a period of time, as opposed to a particular event; (3) they are temporary bodies
that finish their work with the submission of a report containing conclusions and recommendations; and (4) they are officially
sanctioned, authorized or empowered by the State.[10] Commissions members are usually empowered to conduct research, support
victims, and propose policy recommendations to prevent recurrence of crimes. Through their investigations, the commissions may
16

aim to discover and learn more about past abuses, or formally acknowledge them. They may aim to prepare the way for prosecutions
and recommend institutional reforms.[11]

Thus, their main goals range from retribution to reconciliation. The Nuremburg and Tokyo war crime tribunals are examples
of a retributory or vindicatory body set up to try and punish those responsible for crimes against humanity. A form of a reconciliatory
tribunal is the Truth and Reconciliation Commission of South Africa, the principal function of which was to heal the wounds of past
violence and to prevent future conflict by providing a cathartic experience for victims.

The PTC is a far cry from South Africas model. The latter placed more emphasis on reconciliation than on judicial retribution,
while the marching order of the PTC is the identification and punishment of perpetrators. As one writer [12] puts it:

The order ruled out reconciliation. It translated the Draconian code spelled out by Aquino in his inaugural
speech: To those who talk about reconciliation, if they mean that they would like us to simply forget about the
wrongs that they have committed in the past, we have this to say: There can be no reconciliation without justice.
When we allow crimes to go unpunished, we give consent to their occurring over and over again.

The Thrusts of the Petitions

Barely a month after the issuance of Executive Order No. 1, the petitioners asked the Court to declare it unconstitutional and
to enjoin the PTC from performing its functions. A perusal of the arguments of the petitioners in both cases shows that they are
essentially the same. The petitioners-legislators summarized them in the following manner:

(a) E.O. No. 1 violates the separation of powers as it arrogates the power of the Congress to create a public
office and appropriate funds for its operation.

(b) The provision of Book III, Chapter 10, Section 31 of the Administrative Code of 1987 cannot legitimize
E.O. No. 1 because the delegated authority of the President to structurally reorganize the Office of the President to
achieve economy, simplicity and efficiency does not include the power to create an entirely new public office which
was hitherto inexistent like the Truth Commission.

(c) E.O. No. 1 illegally amended the Constitution and pertinent statutes when it vested the Truth
Commission with quasi-judicial powers duplicating, if not superseding, those of the Office of the Ombudsman
created under the 1987 Constitution and the Department of Justice created under the Administrative Code of 1987.

(d) E.O. No. 1 violates the equal protection clause as it selectively targets for investigation and prosecution
officials and personnel of the previous administration as if corruption is their peculiar species even as it excludes
those of the other administrations, past and present, who may be indictable.

(e) The creation of the Philippine Truth Commission of 2010 violates the consistent and general
international practice of four decades wherein States constitute truth commissions to exclusively investigate human
rights violations, which customary practice forms part of the generally accepted principles of international law which
the Philippines is mandated to adhere to pursuant to the Declaration of Principles enshrined in the Constitution.

(f) The creation of the Truth Commission is an exercise in futility, an adventure in partisan hostility, a
launching pad for trial/conviction by publicity and a mere populist propaganda to mistakenly impress the people that
widespread poverty will altogether vanish if corruption is eliminated without even addressing the other major causes
of poverty.

(g) The mere fact that previous commissions were not constitutionally challenged is of no moment because
neither laches nor estoppel can bar an eventual question on the constitutionality and validity of an executive
issuance or even a statute.[13]

In their Consolidated Comment,[14] the respondents, through the Office of the Solicitor General (OSG), essentially questioned
the legal standing of petitioners and defended the assailed executive order with the following arguments:

1] E.O. No. 1 does not arrogate the powers of Congress to create a public office because the Presidents
executive power and power of control necessarily include the inherent power to conduct investigations to ensure
that laws are faithfully executed and that, in any event, the Constitution, Revised Administrative Code of 1987 (E.O.
17

No. 292), [15] Presidential Decree (P.D.) No. 1416[16] (as amended by P.D. No. 1772), R.A. No. 9970,[17] and settled
jurisprudence that authorize the President to create or form such bodies.

2] E.O. No. 1 does not usurp the power of Congress to appropriate funds because there is no appropriation
but a mere allocation of funds already appropriated by Congress.

3] The Truth Commission does not duplicate or supersede the functions of the Office of the
Ombudsman (Ombudsman) and the Department of Justice (DOJ),because it is a fact-finding body and not a quasi-
judicial body and its functions do not duplicate, supplant or erode the latters jurisdiction.

4] The Truth Commission does not violate the equal protection clause because it was validly created for
laudable purposes.

The OSG then points to the continued existence and validity of other executive orders and presidential issuances creating
similar bodies to justify the creation of the PTC such as Presidential Complaint and Action Commission (PCAC) by President Ramon B.
Magsaysay, Presidential Committee on Administrative Performance Efficiency (PCAPE)by President Carlos P. Garcia and Presidential
Agency on Reform and Government Operations (PARGO) by President Ferdinand E. Marcos.[18]
From the petitions, pleadings, transcripts, and memoranda, the following are the principal issues to be resolved:

1. Whether or not the petitioners have the legal standing to file their respective petitions and
question Executive Order No. 1;

2. Whether or not Executive Order No. 1 violates the principle of separation of powers by
usurping the powers of Congress to create and to appropriate funds for public offices, agencies and commissions;
3. Whether or not Executive Order No. 1 supplants the powers of the Ombudsman and the DOJ;

4. Whether or not Executive Order No. 1 violates the equal protection clause; and

5. Whether or not petitioners are entitled to injunctive relief.

Essential requisites for judicial review

Before proceeding to resolve the issue of the constitutionality of Executive Order No. 1, the Court needs to ascertain whether the
requisites for a valid exercise of its power of judicial review are present.

Like almost all powers conferred by the Constitution, the power of judicial review is subject to limitations, to wit: (1) there must be an
actual case or controversy calling for the exercise of judicial power; (2) the person challenging the act must have the standing to
question the validity of the subject act or issuance; otherwise stated, he must have a personal and substantial interest in the case such
that he has sustained, or will sustain, direct injury as a result of its enforcement; (3) the question of constitutionality must be raised
at the earliest opportunity; and (4) the issue of constitutionality must be the very lis mota of the case.[19]

Among all these limitations, only the legal standing of the petitioners has been put at issue.

Legal Standing of the Petitioners

The OSG attacks the legal personality of the petitioners-legislators to file their petition for failure to demonstrate their
personal stake in the outcome of the case. It argues that the petitioners have not shown that they have sustained or are in danger of
sustaining any personal injury attributable to the creation of the PTC. Not claiming to be the subject of the commissions investigations,
petitioners will not sustain injury in its creation or as a result of its proceedings. [20]
18

The Court disagrees with the OSG in questioning the legal standing of the petitioners-legislators to assail Executive Order No.
1. Evidently, their petition primarily invokes usurpation of the power of the Congress as a body to which they belong as members. This
certainly justifies their resolve to take the cudgels for Congress as an institution and present the complaints on the usurpation of their
power and rights as members of the legislature before the Court. As held in Philippine Constitution Association v. Enriquez,[21]

To the extent the powers of Congress are impaired, so is the power of each member thereof, since his office
confers a right to participate in the exercise of the powers of that institution.
An act of the Executive which injures the institution of Congress causes a derivative but nonetheless
substantial injury, which can be questioned by a member of Congress. In such a case, any member of Congress can
have a resort to the courts.

Indeed, legislators have a legal standing to see to it that the prerogative, powers and privileges vested by the Constitution in
their office remain inviolate. Thus, they are allowed to question the validity of any official action which, to their mind, infringes on
their prerogatives as legislators.[22]

With regard to Biraogo, the OSG argues that, as a taxpayer, he has no standing to question the creation of the PTC and the
budget for its operations.[23] It emphasizes that the funds to be used for the creation and operation of the commission are to be taken
from those funds already appropriated by Congress. Thus, the allocation and disbursement of funds for the commission will not entail
congressional action but will simply be an exercise of the Presidents power over contingent funds.

As correctly pointed out by the OSG, Biraogo has not shown that he sustained, or is in danger of sustaining, any personal and
direct injury attributable to the implementation of Executive Order No. 1. Nowhere in his petition is an assertion of a clear right that
may justify his clamor for the Court to exercise judicial power and to wield the axe over presidential issuances in defense of the
Constitution. The case of David v. Arroyo[24] explained the deep-seated rules on locus standi. Thus:

Locus standi is defined as a right of appearance in a court of justice on a given question. In private suits,
standing is governed by the real-parties-in interest rule as contained in Section 2, Rule 3 of the 1997 Rules of Civil
Procedure, as amended. It provides that every action must be prosecuted or defended in the name of the real party
in interest. Accordingly, the real-party-in interest is the party who stands to be benefited or injured by the judgment
in the suit or the party entitled to the avails of the suit.Succinctly put, the plaintiffs standing is based on his own right
to the relief sought.

The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a public right
in assailing an allegedly illegal official action, does so as a representative of the general public. He may be a person
who is affected no differently from any other person. He could be suing as a stranger, or in the category of a citizen,
or taxpayer. In either case, he has to adequately show that he is entitled to seek judicial protection. In other words,
he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a citizen or
taxpayer.

Case law in most jurisdictions now allows both citizen and taxpayer standing in public actions. The
distinction was first laid down in Beauchamp v. Silk, where it was held that the plaintiff in a taxpayers suit is in a
different category from the plaintiff in a citizens suit. In the former, the plaintiff is affected by the expenditure of
public funds, while in the latter, he is but the mere instrument of the public concern. As held by the New York
Supreme Court in People ex rel Case v. Collins: In matter of mere public right, howeverthe people are the real
partiesIt is at least the right, if not the duty, of every citizen to interfere and see that a public offence be properly
pursued and punished, and that a public grievance be remedied. With respect to taxpayers suits, Terr v. Jordan held
that the right of a citizen and a taxpayer to maintain an action in courts to restrain the unlawful use of public funds
to his injury cannot be denied.

However, to prevent just about any person from seeking judicial interference in any official policy or act
with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service,
the United State Supreme Court laid down the more stringent direct injury test in Ex Parte Levitt, later reaffirmed
in Tileston v. Ullman. The same Court ruled that for a private individual to invoke the judicial power to determine
the validity of an executive or legislative action, he must show that he has sustained a direct injury as a result of
that action, and it is not sufficient that he has a general interest common to all members of the public.

This Court adopted the direct injury test in our jurisdiction. In People v. Vera, it held that the person who
impugns the validity of a statute must have a personal and substantial interest in the case such that he has
19

sustained, or will sustain direct injury as a result. The Vera doctrine was upheld in a litany of cases, such as, Custodio
v. President of the Senate, Manila Race Horse Trainers Association v. De la Fuente, Pascual v. Secretary of Public
Works and Anti-Chinese League of the Philippines v. Felix. [Emphases included. Citations omitted]

Notwithstanding, the Court leans on the doctrine that the rule on standing is a matter of procedure, hence, can be relaxed
for nontraditional plaintiffs like ordinary citizens, taxpayers, and legislators when the public interest so requires, such as when the
matter is of transcendental importance, of overreaching significance to society, or of paramount public interest.[25]

Thus, in Coconut Oil Refiners Association, Inc. v. Torres,[26] the Court held that in cases of paramount importance where
serious constitutional questions are involved, the standing requirements may be relaxed and a suit may be allowed to prosper even
where there is no direct injury to the party claiming the right of judicial review. In the first Emergency Powers Cases,[27] ordinary citizens
and taxpayers were allowed to question the constitutionality of several executive orders although they had only an indirect and
general interest shared in common with the public.

The OSG claims that the determinants of transcendental importance[28] laid down in CREBA v. ERC and Meralco[29] are non-
existent in this case. The Court, however, finds reason in Biraogos assertion that the petition covers matters of transcendental
importance to justify the exercise of jurisdiction by the Court. There are constitutional issues in the petition which deserve the
attention of this Court in view of their seriousness, novelty and weight as precedents. Where the issues are of transcendental and
paramount importance not only to the public but also to the Bench and the Bar, they should be resolved for the guidance of
all.[30] Undoubtedly, the Filipino people are more than interested to know the status of the Presidents first effort to bring about a
promised change to the country. The Court takes cognizance of the petition not due to overwhelming political undertones that clothe
the issue in the eyes of the public, but because the Court stands firm in its oath to perform its constitutional duty to settle legal
controversies with overreaching significance to society.

Power of the President to Create the Truth Commission

In his memorandum in G.R. No. 192935, Biraogo asserts that the Truth Commission is a public office and not merely an adjunct
body of the Office of the President.[31]Thus, in order that the President may create a public office he must be empowered by the
Constitution, a statute or an authorization vested in him by law. According to petitioner, such power cannot be presumed [32] since
there is no provision in the Constitution or any specific law that authorizes the President to create a truth commission.[33] He adds that
Section 31 of the Administrative Code of 1987, granting the President the continuing authority to reorganize his office, cannot serve
as basis for the creation of a truth commission considering the aforesaid provision merely uses verbs such as reorganize, transfer,
consolidate, merge, and abolish.[34] Insofar as it vests in the President the plenary power to reorganize the Office of the President to
the extent of creating a public office, Section 31 is inconsistent with the principle of separation of powers enshrined in the Constitution
and must be deemed repealed upon the effectivity thereof. [35]

Similarly, in G.R. No. 193036, petitioners-legislators argue that the creation of a public office lies within the province of
Congress and not with the executive branch of government. They maintain that the delegated authority of the President to reorganize
under Section 31 of the Revised Administrative Code: 1) does not permit the President to create a public office, much less a truth
commission; 2) is limited to the reorganization of the administrative structure of the Office of the President; 3) is limited to the
restructuring of the internal organs of the Office of the President Proper, transfer of functions and transfer of agencies; and 4) only to
achieve simplicity, economy and efficiency.[36] Such continuing authority of the President to reorganize his office is limited, and by
issuing Executive Order No. 1, the President overstepped the limits of this delegated authority.

The OSG counters that there is nothing exclusively legislative about the creation by the President of a fact-finding body such
as a truth commission. Pointing to numerous offices created by past presidents, it argues that the authority of the President to create
public offices within the Office of the President Proper has long been recognized.[37]According to the OSG, the Executive, just like the
other two branches of government, possesses the inherent authority to create fact-finding committees to assist it in the performance
20

of its constitutionally mandated functions and in the exercise of its administrative functions. [38] This power, as the OSG explains it, is
but an adjunct of the plenary powers wielded by the President under Section 1 and his power of control under Section 17, both of
Article VII of the Constitution.[39]

It contends that the President is necessarily vested with the power to conduct fact-finding investigations, pursuant to his duty
to ensure that all laws are enforced by public officials and employees of his department and in the exercise of his authority to assume
directly the functions of the executive department, bureau and office, or interfere with the discretion of his officials. [40] The power of
the President to investigate is not limited to the exercise of his power of control over his subordinates in the executive branch, but
extends further in the exercise of his other powers, such as his power to discipline subordinates, [41] his power for rule making,
adjudication and licensing purposes[42] and in order to be informed on matters which he is entitled to know. [43]

The OSG also cites the recent case of Banda v. Ermita,[44] where it was held that the President has the power to reorganize
the offices and agencies in the executive department in line with his constitutionally granted power of control and by virtue of a valid
delegation of the legislative power to reorganize executive offices under existing statutes.

Thus, the OSG concludes that the power of control necessarily includes the power to create offices. For the OSG, the President
may create the PTC in order to, among others, put a closure to the reported large scale graft and corruption in the government.[45]

The question, therefore, before the Court is this: Does the creation of the PTC fall within the ambit of the power to reorganize
as expressed in Section 31 of the Revised Administrative Code? Section 31 contemplates reorganization as limited by the following
functional and structural lines: (1) restructuring the internal organization of the Office of the President Proper by abolishing,
consolidating or merging units thereof or transferring functions from one unit to another; (2) transferring any function under the
Office of the President to any other Department/Agency or vice versa; or (3) transferring any agency under the Office of the President
to any other Department/Agency or vice versa.Clearly, the provision refers to reduction of personnel, consolidation of offices, or
abolition thereof by reason of economy or redundancy of functions. These point to situations where a body or an office is already
existent but a modification or alteration thereof has to be effected. The creation of an office is nowhere mentioned, much less
envisioned in said provision. Accordingly, the answer to the question is in the negative.

To say that the PTC is borne out of a restructuring of the Office of the President under Section 31 is a misplaced supposition,
even in the plainest meaning attributable to the term restructure an alteration of an existing structure. Evidently, the PTC was not part
of the structure of the Office of the President prior to the enactment of Executive Order No. 1. As held in Buklod ng Kawaning EIIB v.
Hon. Executive Secretary,[46]

But of course, the list of legal basis authorizing the President to reorganize any department or agency in the
executive branch does not have to end here. We must not lose sight of the very source of the power that which
constitutes an express grant of power. Under Section 31, Book III of Executive Order No. 292 (otherwise known as
the Administrative Code of 1987), "the President, subject to the policy in the Executive Office and in order to achieve
simplicity, economy and efficiency, shall have the continuing authority to reorganize the administrative structure of
the Office of the President." For this purpose, he may transfer the functions of other Departments or Agencies to
the Office of the President. In Canonizado v. Aguirre [323 SCRA 312 (2000)], we ruled that reorganization "involves
the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of
functions." It takes place when there is an alteration of the existing structure of government offices or units
therein, including the lines of control, authority and responsibility between them. The EIIB is a bureau attached to
the Department of Finance. It falls under the Office of the President. Hence, it is subject to the Presidents continuing
authority to reorganize. [Emphasis Supplied]

In the same vein, the creation of the PTC is not justified by the Presidents power of control. Control is essentially the power
to alter or modify or nullify or set aside what a subordinate officer had done in the performance of his duties and to substitute the
judgment of the former with that of the latter.[47] Clearly, the power of control is entirely different from the power to create public
21

offices. The former is inherent in the Executive, while the latter finds basis from either a valid delegation from Congress, or his inherent
duty to faithfully execute the laws.

The question is this, is there a valid delegation of power from Congress, empowering the President to create a public office?

According to the OSG, the power to create a truth commission pursuant to the above provision finds statutory basis under
P.D. 1416, as amended by P.D. No. 1772.[48] The said law granted the President the continuing authority to reorganize the national
government, including the power to group, consolidate bureaus and agencies, to abolish offices, to transfer functions, to create and
classify functions, services and activities, transfer appropriations, and to standardize salaries and materials. This decree, in relation to
Section 20, Title I, Book III of E.O. 292 has been invoked in several cases such as Larin v. Executive Secretary.[49]

The Court, however, declines to recognize P.D. No. 1416 as a justification for the President to create a public office. Said
decree is already stale, anachronistic and inoperable. P.D. No. 1416 was a delegation to then President Marcos of the authority to
reorganize the administrative structure of the national government including the power to create offices and transfer appropriations
pursuant to one of the purposes of the decree, embodied in its last Whereas clause:

WHEREAS, the transition towards the parliamentary form of government will necessitate flexibility in the
organization of the national government.

Clearly, as it was only for the purpose of providing manageability and resiliency during the interim, P.D. No. 1416, as amended
by P.D. No. 1772, became functus oficioupon the convening of the First Congress, as expressly provided in Section 6, Article XVIII of
the 1987 Constitution. In fact, even the Solicitor General agrees with this view. Thus:

ASSOCIATE JUSTICE CARPIO: Because P.D. 1416 was enacted was the last whereas clause of P.D. 1416 says it was
enacted to prepare the transition from presidential to parliamentary.
Now, in a parliamentary form of government, the legislative and
executive powers are fused, correct?

SOLICITOR GENERAL CADIZ: Yes, Your Honor.

ASSOCIATE JUSTICE CARPIO: That is why, that P.D. 1416 was issued. Now would you agree with me that P.D. 1416
should not be considered effective anymore upon the promulgation,
adoption, ratification of the 1987 Constitution.

SOLICITOR GENERAL CADIZ: Not the whole of P.D. [No.] 1416, Your Honor.

ASSOCIATE JUSTICE CARPIO: The power of the President to reorganize the entire National Government is deemed
repealed, at least, upon the adoption of the 1987 Constitution,
correct.

SOLICITOR GENERAL CADIZ: Yes, Your Honor.[50]

While the power to create a truth commission cannot pass muster on the basis of P.D. No. 1416 as amended by P.D. No. 1772, the
creation of the PTC finds justification under Section 17, Article VII of the Constitution, imposing upon the President the duty to ensure
that the laws are faithfully executed. Section 17 reads:

Section 17. The President shall have control of all the executive departments, bureaus, and offices. He shall
ensure that the laws be faithfully executed. (Emphasis supplied).
22

As correctly pointed out by the respondents, the allocation of power in the three principal branches of government is a grant
of all powers inherent in them. The Presidents power to conduct investigations to aid him in ensuring the faithful execution of laws in
this case, fundamental laws on public accountability and transparency is inherent in the Presidents powers as the Chief Executive. That
the authority of the President to conduct investigations and to create bodies to execute this power is not explicitly mentioned in the
Constitution or in statutes does not mean that he is bereft of such authority. [51] As explained in the landmark case of Marcos v.
Manglapus:[52]

x x x. The 1987 Constitution, however, brought back the presidential system of government and restored
the separation of legislative, executive and judicial powers by their actual distribution among three distinct branches
of government with provision for checks and balances.

It would not be accurate, however, to state that "executive power" is the power to enforce the laws, for
the President is head of state as well as head of government and whatever powers inhere in such positions pertain
to the office unless the Constitution itself withholds it. Furthermore, the Constitution itself provides that the
execution of the laws is only one of the powers of the President. It also grants the President other powers that do
not involve the execution of any provision of law, e.g., his power over the country's foreign relations.

On these premises, we hold the view that although the 1987 Constitution imposes limitations on the
exercise of specific powers of the President, it maintains intact what is traditionally considered as within the scope
of "executive power." Corollarily, the powers of the President cannot be said to be limited only to the specific powers
enumerated in the Constitution. In other words, executive power is more than the sum of specific powers so
enumerated.

It has been advanced that whatever power inherent in the government that is neither legislative nor judicial
has to be executive. x x x.

Indeed, the Executive is given much leeway in ensuring that our laws are faithfully executed. As stated above, the powers of the
President are not limited to those specific powers under the Constitution. [53] One of the recognized powers of the President granted
pursuant to this constitutionally-mandated duty is the power to create ad hoc committees. This flows from the obvious need to
ascertain facts and determine if laws have been faithfully executed. Thus, in Department of Health v. Camposano,[54] the authority of
the President to issue Administrative Order No. 298, creating an investigative committee to look into the administrative charges filed
against the employees of the Department of Health for the anomalous purchase of medicines was upheld. In said case, it was ruled:

The Chief Executives power to create the Ad hoc Investigating Committee cannot be doubted. Having been
constitutionally granted full control of the Executive Department, to which respondents belong, the President has
the obligation to ensure that all executive officials and employees faithfully comply with the law. With AO 298 as
mandate, the legality of the investigation is sustained. Such validity is not affected by the fact that the investigating
team and the PCAGC had the same composition, or that the former used the offices and facilities of the latter in
conducting the inquiry. [Emphasis supplied]

It should be stressed that the purpose of allowing ad hoc investigating bodies to exist is to allow an inquiry into matters which
the President is entitled to know so that he can be properly advised and guided in the performance of his duties relative to the
execution and enforcement of the laws of the land. And if history is to be revisited, this was also the objective of the investigative
bodies created in the past like the PCAC, PCAPE, PARGO, the Feliciano Commission, the Melo Commission and the Zenarosa
Commission. There being no changes in the government structure, the Court is not inclined to declare such executive power as non-
existent just because the direction of the political winds have changed.

On the charge that Executive Order No. 1 transgresses the power of Congress to appropriate funds for the operation of a
public office, suffice it to say that there will be no appropriation but only an allotment or allocations of existing funds already
appropriated. Accordingly, there is no usurpation on the part of the Executive of the power of Congress to appropriate funds. Further,
there is no need to specify the amount to be earmarked for the operation of the commission because, in the words of the Solicitor
General, whatever funds the Congress has provided for the Office of the President will be the very source of the funds for the
commission.[55] Moreover, since the amount that would be allocated to the PTC shall be subject to existing auditing rules and
regulations, there is no impropriety in the funding.
23

Power of the Truth Commission to Investigate

The Presidents power to conduct investigations to ensure that laws are faithfully executed is well recognized. It flows from the faithful-
execution clause of the Constitution under Article VII, Section 17 thereof. [56] As the Chief Executive, the president represents the
government as a whole and sees to it that all laws are enforced by the officials and employees of his department. He has the authority
to directly assume the functions of the executive department. [57]

Invoking this authority, the President constituted the PTC to primarily investigate reports of graft and corruption and to recommend
the appropriate action. As previously stated, no quasi-judicial powers have been vested in the said body as it cannot adjudicate rights
of persons who come before it. It has been said that Quasi-judicial powers involve the power to hear and determine questions of fact
to which the legislative policy is to apply and to decide in accordance with the standards laid down by law itself in enforcing and
administering the same law.[58] In simpler terms, judicial discretion is involved in the exercise of these quasi-judicial power, such that
it is exclusively vested in the judiciary and must be clearly authorized by the legislature in the case of administrative agencies.

The distinction between the power to investigate and the power to adjudicate was delineated by the Court in Cario v.
Commission on Human Rights.[59] Thus:

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

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

"Adjudicate," commonly or popularly understood, means to adjudge, arbitrate, judge, decide, determine,
resolve, rule on, settle. The dictionary defines the term as "to settle finally (the rights and duties of the parties to a
court case) on the merits of issues raised: x x to pass judgment on: settle judicially: x x act as judge." And "adjudge"
means "to decide or rule upon as a judge or with judicial or quasi-judicial powers: x x to award or grant judicially in
a case of controversy x x."
In the legal sense, "adjudicate" means: "To settle in the exercise of judicial authority. To determine finally.
Synonymous with adjudge in its strictest sense;" and "adjudge" means: "To pass on judicially, to decide, settle or
decree, or to sentence or condemn. x x. Implies a judicial determination of a fact, and the entry of a
judgment." [Italics included. Citations Omitted]

Fact-finding is not adjudication and it cannot be likened to the judicial function of a court of justice, or even a quasi-judicial
agency or office. The function of receiving evidence and ascertaining therefrom the facts of a controversy is not a judicial function. To
be considered as such, the act of receiving evidence and arriving at factual conclusions in a controversy must be accompanied by the
authority of applying the law to the factual conclusions to the end that the controversy may be decided or resolved authoritatively,
finally and definitively, subject to appeals or modes of review as may be provided by law.[60] Even respondents themselves admit that
the commission is bereft of any quasi-judicial power.[61]

Contrary to petitioners apprehension, the PTC will not supplant the Ombudsman or the DOJ or erode their respective powers. If at all,
the investigative function of the commission will complement those of the two offices. As pointed out by the Solicitor General, the
recommendation to prosecute is but a consequence of the overall task of the commission to conduct a fact-finding
investigation.[62] The actual prosecution of suspected offenders, much less adjudication on the merits of the charges against them, [63] is
certainly not a function given to the commission. The phrase, when in the course of its investigation, under Section 2(g), highlights this
24

fact and gives credence to a contrary interpretation from that of the petitioners. The function of determining probable cause for the
filing of the appropriate complaints before the courts remains to be with the DOJ and the Ombudsman. [64]

At any rate, the Ombudsmans power to investigate under R.A. No. 6770 is not exclusive but is shared with other similarly authorized
government agencies. Thus, in the case of Ombudsman v. Galicia,[65] it was written:

This power of investigation granted to the Ombudsman by the 1987 Constitution and The Ombudsman Act is not
exclusive but is shared with other similarly authorized government agencies such as the PCGG and judges of
municipal trial courts and municipal circuit trial courts. The power to conduct preliminary investigation on charges
against public employees and officials is likewise concurrently shared with the Department of Justice. Despite the
passage of the Local Government Code in 1991, the Ombudsman retains concurrent jurisdiction with the Office of
the President and the local Sanggunians to investigate complaints against local elective officials. [Emphasis
supplied].

Also, Executive Order No. 1 cannot contravene the power of the Ombudsman to investigate criminal cases under Section 15 (1) of R.A.
No. 6770, which states:

(1) Investigate and prosecute on its own or on complaint by any person, any act or omission of any public
officer or employee, office or agency, when such act or omission appears to be illegal, unjust, improper or inefficient.
It has primary jurisdiction over cases cognizable by the Sandiganbayan and, in the exercise of its primary
jurisdiction, it may take over, at any stage, from any investigatory agency of government, the investigation of such
cases. [Emphases supplied]

The act of investigation by the Ombudsman as enunciated above contemplates the conduct of a preliminary investigation or
the determination of the existence of probable cause. This is categorically out of the PTCs sphere of functions. Its power to investigate
is limited to obtaining facts so that it can advise and guide the President in the performance of his duties relative to the execution and
enforcement of the laws of the land. In this regard, the PTC commits no act of usurpation of the Ombudsmans primordial duties.

The same holds true with respect to the DOJ. Its authority under Section 3 (2), Chapter 1, Title III, Book IV in the Revised Administrative
Code is by no means exclusive and, thus, can be shared with a body likewise tasked to investigate the commission of crimes.

Finally, nowhere in Executive Order No. 1 can it be inferred that the findings of the PTC are to be accorded conclusiveness. Much like
its predecessors, the Davide Commission, the Feliciano Commission and the Zenarosa Commission, its findings would, at best, be
recommendatory in nature. And being so, the Ombudsman and the DOJ have a wider degree of latitude to decide whether or not to
reject the recommendation. These offices, therefore, are not deprived of their mandated duties but will instead be aided by the reports
of the PTC for possible indictments for violations of graft laws.

Violation of the Equal Protection Clause

Although the purpose of the Truth Commission falls within the investigative power of the President, the Court finds difficulty
in upholding the constitutionality of Executive Order No. 1 in view of its apparent transgression of the equal protection clause
enshrined in Section 1, Article III (Bill of Rights) of the 1987 Constitution. Section 1 reads:

Section 1. No person shall be deprived of life, liberty, or property without due process of law, nor shall any
person be denied the equal protection of the laws.

The petitioners assail Executive Order No. 1 because it is violative of this constitutional safeguard. They contend that it does
not apply equally to all members of the same class such that the intent of singling out the previous administration as its sole object
makes the PTC an adventure in partisan hostility.[66] Thus, in order to be accorded with validity, the commission must also cover reports
of graft and corruption in virtually all administrations previous to that of former President Arroyo. [67]
25

The petitioners argue that the search for truth behind the reported cases of graft and corruption must encompass acts
committed not only during the administration of former President Arroyo but also during prior administrations where the same
magnitude of controversies and anomalies[68] were reported to have been committed against the Filipino people. They assail the
classification formulated by the respondents as it does not fall under the recognized exceptions because first, there is no substantial
distinction between the group of officials targeted for investigation by Executive Order No. 1 and other groups or persons who abused
their public office for personal gain; and second, the selective classification is not germane to the purpose of Executive Order No. 1 to
end corruption.[69] In order to attain constitutional permission, the petitioners advocate that the commission should deal with graft
and grafters prior and subsequent to the Arroyo administration with the strong arm of the law with equal force. [70]

Position of respondents

According to respondents, while Executive Order No. 1 identifies the previous administration as the initial subject of the
investigation, following Section 17 thereof, the PTC will not confine itself to cases of large scale graft and corruption solely during the
said administration.[71] Assuming arguendo that the commission would confine its proceedings to officials of the previous
administration, the petitioners argue that no offense is committed against the equal protection clause for the segregation of the
transactions of public officers during the previous administration as possible subjects of investigation is a valid classification based on
substantial distinctions and is germane to the evils which the Executive Order seeks to correct. [72] To distinguish the Arroyo
administration from past administrations, it recited the following:

First. E.O. No. 1 was issued in view of widespread reports of large scale graft and corruption in the previous
administration which have eroded public confidence in public institutions. There is, therefore, an urgent call for the
determination of the truth regarding certain reports of large scale graft and corruption in the government and to
put a closure to them by the filing of the appropriate cases against those involved, if warranted, and to deter others
from committing the evil, restore the peoples faith and confidence in the Government and in their public servants.

Second. The segregation of the preceding administration as the object of fact-finding is warranted by the
reality that unlike with administrations long gone, the current administration will most likely bear the immediate
consequence of the policies of the previous administration.

Third. The classification of the previous administration as a separate class for investigation lies in the reality
that the evidence of possible criminal activity, the evidence that could lead to recovery of public monies illegally
dissipated, the policy lessons to be learned to ensure that anti-corruption laws are faithfully executed, are more
easily established in the regime that immediately precede the current administration.

Fourth. Many administrations subject the transactions of their predecessors to investigations to provide
closure to issues that are pivotal to national life or even as a routine measure of due diligence and good
housekeeping by a nascent administration like the Presidential Commission on Good Government (PCGG), created
by the late President Corazon C. Aquino under Executive Order No. 1 to pursue the recovery of ill-gotten wealth of
her predecessor former President Ferdinand Marcos and his cronies, and the Saguisag Commission created by
former President Joseph Estrada under Administrative Order No, 53, to form an ad-hoc and independent citizens
committee to investigate all the facts and circumstances surrounding Philippine Centennial projects of his
predecessor, former President Fidel V. Ramos.[73] [Emphases supplied]

Concept of the Equal Protection Clause

One of the basic principles on which this government was founded is that of the equality of right which is embodied in Section 1,
Article III of the 1987 Constitution. The equal protection of the laws is embraced in the concept of due process, as every unfair
discrimination offends the requirements of justice and fair play. It has been embodied in a separate clause, however, to provide for a
more specific guaranty against any form of undue favoritism or hostility from the government. Arbitrariness in general may be
challenged on the basis of the due process clause. But if the particular act assailed partakes of an unwarranted partiality or prejudice,
the sharper weapon to cut it down is the equal protection clause.[74]
26

According to a long line of decisions, equal protection simply requires that all persons or things similarly situated should be
treated alike, both as to rights conferred and responsibilities imposed. [75] It requires public bodies and institutions to treat similarly
situated individuals in a similar manner.[76] The purpose of the equal protection clause is to secure every person within a states
jurisdiction against intentional and arbitrary discrimination, whether occasioned by the express terms of a statue or by its improper
execution through the states duly constituted authorities. [77] In other words, the concept of equal justice under the law requires the
state to govern impartially, and it may not draw distinctions between individuals solely on differences that are irrelevant to a legitimate
governmental objective.[78]

The equal protection clause is aimed at all official state actions, not just those of the legislature.[79] Its inhibitions cover all the
departments of the government including the political and executive departments, and extend to all actions of a state denying equal
protection of the laws, through whatever agency or whatever guise is taken. [80]

It, however, does not require the universal application of the laws to all persons or things without distinction. What it simply
requires is equality among equals as determined according to a valid classification. Indeed, the equal protection clause permits
classification. Such classification, however, to be valid must pass the test of reasonableness. The test has four requisites: (1) The
classification rests on substantial distinctions; (2) It is germane to the purpose of the law; (3) It is not limited to existing conditions
only; and
(4) It applies equally to all members of the same class.[81] Superficial differences do not make for a valid classification.[82]

For a classification to meet the requirements of constitutionality, it must include or embrace all persons who naturally belong
to the class.[83] The classification will be regarded as invalid if all the members of the class are not similarly treated, both as to rights
conferred and obligations imposed. It is not necessary that the classification be made with absolute symmetry, in the sense that the
members of the class should possess the same characteristics in equal degree. Substantial similarity will suffice; and as long as this is
achieved, all those covered by the classification are to be treated equally. The mere fact that an individual belonging to a class differs
from the other members, as long as that class is substantially distinguishable from all others, does not justify the non-application of
the law to him.[84]

The classification must not be based on existing circumstances only, or so constituted as to preclude addition to the number
included in the class. It must be of such a nature as to embrace all those who may thereafter be in similar circumstances and conditions.
It must not leave out or underinclude those that should otherwise fall into a certain classification. As elucidated in Victoriano v. Elizalde
Rope Workers' Union[85] and reiterated in a long line of cases,[86]
The guaranty of equal protection of the laws is not a guaranty of equality in the application of the laws upon
all citizens of the state. It is not, therefore, a requirement, in order to avoid the constitutional prohibition against
inequality, that every man, woman and child should be affected alike by a statute. Equality of operation of statutes
does not mean indiscriminate operation on persons merely as such, but on persons according to the circumstances
surrounding them. It guarantees equality, not identity of rights. The Constitution does not require that things which
are different in fact be treated in law as though they were the same. The equal protection clause does not forbid
discrimination as to things that are different. It does not prohibit legislation which is limited either in the object to
which it is directed or by the territory within which it is to operate.

The equal protection of the laws clause of the Constitution allows classification. Classification in law, as in the other
departments of knowledge or practice, is the grouping of things in speculation or practice because they agree with
one another in certain particulars. A law is not invalid because of simple inequality. The very idea of classification is
that of inequality, so that it goes without saying that the mere fact of inequality in no manner determines the matter
of constitutionality. All that is required of a valid classification is that it be reasonable, which means that the
classification should be based on substantial distinctions which make for real differences, that it must be germane
to the purpose of the law; that it must not be limited to existing conditions only; and that it must apply equally to
each member of the class. This Court has held that the standard is satisfied if the classification or distinction is based
on a reasonable foundation or rational basis and is not palpably arbitrary. [Citations omitted]

Applying these precepts to this case, Executive Order No. 1 should be struck down as violative of the equal protection
clause. The clear mandate of the envisioned truth commission is to investigate and find out the truth concerning the reported cases
27

of graft and corruption during the previous administration[87] only. The intent to single out the previous administration is plain, patent
and manifest. Mention of it has been made in at least three portions of the questioned executive order. Specifically, these are:

WHEREAS, there is a need for a separate body dedicated solely to investigating and finding out the truth concerning
the reported cases of graft and corruption during the previous administration, and which will recommend the
prosecution of the offenders and secure justice for all;

SECTION 1. Creation of a Commission. There is hereby created the PHILIPPINE TRUTH COMMISSION, hereinafter
referred to as the COMMISSION, which shall primarily seek and find the truth on, and toward this end, investigate
reports of graft and corruption of such scale and magnitude that shock and offend the moral and ethical sensibilities
of the people, committed by public officers and employees, their co-principals, accomplices and accessories from
the private sector, if any, during the previous administration; and thereafter recommend the appropriate action or
measure to be taken thereon to ensure that the full measure of justice shall be served without fear or favor.

SECTION 2. Powers and Functions. The Commission, which shall have all the powers of an investigative body under
Section 37, Chapter 9, Book I of the Administrative Code of 1987, is primarily tasked to conduct a thorough fact-
finding investigation of reported cases of graft and corruption referred to in Section 1, involving third level public
officers and higher, their co-principals, accomplices and accessories from the private sector, if any, during
the previous administration and thereafter submit its finding and recommendations to the President, Congress and
the Ombudsman. [Emphases supplied]

In this regard, it must be borne in mind that the Arroyo administration is but just a member of a class, that is, a class of past
administrations. It is not a class of its own. Not to include past administrations similarly situated constitutes arbitrariness which the
equal protection clause cannot sanction. Such discriminating differentiation clearly reverberates to label the commission as a vehicle
for vindictiveness and selective retribution.

Though the OSG enumerates several differences between the Arroyo administration and other past administrations, these
distinctions are not substantial enough to merit the restriction of the investigation to the previous administration only. The reports of
widespread corruption in the Arroyo administration cannot be taken as basis for distinguishing said administration from earlier
administrations which were also blemished by similar widespread reports of impropriety. They are not inherent in, and do not inure
solely to, the Arroyo administration. As Justice Isagani Cruz put it, Superficial differences do not make for a valid classification. [88]

The public needs to be enlightened why Executive Order No. 1 chooses to limit the scope of the intended investigation to the
previous administration only. The OSG ventures to opine that to include other past administrations, at this point, may unnecessarily
overburden the commission and lead it to lose its effectiveness.[89] The reason given is specious. It is without doubt irrelevant to the
legitimate and noble objective of the PTC to stamp out or end corruption and the evil it breeds. [90]

The probability that there would be difficulty in unearthing evidence or that the earlier reports involving the earlier
administrations were already inquired into is beside the point. Obviously, deceased presidents and cases which have already
prescribed can no longer be the subjects of inquiry by the PTC. Neither is the PTC expected to conduct simultaneous investigations of
previous administrations, given the bodys limited time and resources. The law does not require the impossible (Lex non cogit ad
impossibilia).[91]

Given the foregoing physical and legal impossibility, the Court logically recognizes the unfeasibility of investigating almost a
centurys worth of graft cases. However, the fact remains that Executive Order No. 1 suffers from arbitrary classification. The PTC, to
be true to its mandate of searching for the truth, must not exclude the other past administrations. The PTC must, at least, have the
authority to investigate all past administrations. While reasonable prioritization is permitted, it should not be arbitrary lest it be struck
down for being unconstitutional. In the often quoted language of Yick Wo v. Hopkins,[92]

Though the law itself be fair on its face and impartial in appearance, yet, if applied and administered by
public authority with an evil eye and an unequal hand, so as practically to make unjust and illegal discriminations
28

between persons in similar circumstances, material to their rights, the denial of equal justice is still within the
prohibition of the constitution. [Emphasis supplied]

It could be argued that considering that the PTC is an ad hoc body, its scope is limited. The Court, however, is of the
considered view that although its focus is restricted, the constitutional guarantee of equal protection under the laws should not in any
way be circumvented. The Constitution is the fundamental and paramount law of the nation to which all other laws must conform and
in accordance with which all private rights determined and all public authority administered. [93] Laws that do not conform to the
Constitution should be stricken down for being unconstitutional. [94] While the thrust of the PTC is specific, that is, for investigation of
acts of graft and corruption, Executive Order No. 1, to survive, must be read together with the provisions of the Constitution. To
exclude the earlier administrations in the guise of substantial distinctions would only confirm the petitioners lament that the subject
executive order is only an adventure in partisan hostility. In the case of US v. Cyprian,[95] it was written: A rather limited number of
such classifications have routinely been held or assumed to be arbitrary; those include: race, national origin, gender, political activity
or membership in a political party, union activity or membership in a labor union, or more generally the exercise of first amendment
rights.

To reiterate, in order for a classification to meet the requirements of constitutionality, it must include or embrace all persons
who naturally belong to the class.[96] Such a classification must not be based on existing circumstances only, or so constituted as to
preclude additions to the number included within a class, but must be of such a nature as to embrace all those who may thereafter
be in similar circumstances and conditions. Furthermore, all who are in situations and circumstances which are relative to the
discriminatory legislation and which are indistinguishable from those of the members of the class must be brought under the influence
of the law and treated by it in the same way as are the members of the class. [97]

The Court is not unaware that mere underinclusiveness is not fatal to the validity of a law under the equal protection
[98]
clause. Legislation is not unconstitutional merely because it is not all-embracing and does not include all the evils within its
reach.[99] It has been written that a regulation challenged under the equal protection clause is not devoid of a rational predicate simply
because it happens to be incomplete.[100] In several instances, the underinclusiveness was not considered a valid reason to strike down
a law or regulation where the purpose can be attained in future legislations or regulations. These cases refer to the step by step
process.[101] With regard to equal protection claims, a legislature does not run the risk of losing the entire remedial scheme simply
because it fails, through inadvertence or otherwise, to cover every evil that might conceivably have been attacked. [102]

In Executive Order No. 1, however, there is no inadvertence. That the previous administration was picked out was deliberate
and intentional as can be gleaned from the fact that it was underscored at least three times in the assailed executive order. It must be
noted that Executive Order No. 1 does not even mention any particular act, event or report to be focused on unlike the investigative
commissions created in the past. The equal protection clause is violated by purposeful and intentional discrimination. [103]

To disprove petitioners contention that there is deliberate discrimination, the OSG clarifies that the commission does not
only confine itself to cases of large scale graft and corruption committed during the previous administration. [104] The OSG points to
Section 17 of Executive Order No. 1, which provides:

SECTION 17. Special Provision Concerning Mandate. If and when in the judgment of the President there is a need to
expand the mandate of the Commission as defined in Section 1 hereof to include the investigation of cases and
instances of graft and corruption during the prior administrations, such mandate may be so extended accordingly by
way of a supplemental Executive Order.

The Court is not convinced. Although Section 17 allows the President the discretion to expand the scope of investigations of
the PTC so as to include the acts of graft and corruption committed in other past administrations, it does not guarantee that they
would be covered in the future. Such expanded mandate of the commission will still depend on the whim and caprice of the
29

President. If he would decide not to include them, the section would then be meaningless. This will only fortify the fears of the
petitioners that the Executive Order No. 1 was crafted to tailor-fit the prosecution of officials and personalities of the Arroyo
administration.[105]

The Court tried to seek guidance from the pronouncement in the case of Virata v. Sandiganbayan,[106] that the PCGG Charter
(composed of Executive Orders Nos. 1, 2 and 14) does not violate the equal protection clause. The decision, however, was devoid of
any discussion on how such conclusory statement was arrived at, the principal issue in said case being only the sufficiency of a cause
of action.

A final word

The issue that seems to take center stage at present is - whether or not the Supreme Court, in the exercise of its
constitutionally mandated power of Judicial Review with respect to recent initiatives of the legislature and the executive department,
is exercising undue interference. Is the Highest Tribunal, which is expected to be the protector of the Constitution, itself guilty of
violating fundamental tenets like the doctrine of separation of powers? Time and again, this issue has been addressed by the Court,
but it seems that the present political situation calls for it to once again explain the legal basis of its action lest it continually be accused
of being a hindrance to the nations thrust to progress.

The Philippine Supreme Court, according to Article VIII, Section 1 of the 1987 Constitution, is vested with Judicial Power that
includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable,
and to determine whether or not there has been a grave of abuse of discretion amounting to lack or excess of jurisdiction on the part
of any branch or instrumentality of the government.

Furthermore, in Section 4(2) thereof, it is vested with the power of judicial review which is the power to declare a treaty,
international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation
unconstitutional. This power also includes the duty to rule on the constitutionality of the application, or operation of presidential
decrees, proclamations, orders, instructions, ordinances, and other regulations. These provisions, however, have been fertile grounds
of conflict between the Supreme Court, on one hand, and the two co-equal bodies of government, on the other. Many times the Court
has been accused of asserting superiority over the other departments.

To answer this accusation, the words of Justice Laurel would be a good source of enlightenment, to wit: And when the
judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other departments; it does not in
reality nullify or invalidate an act of the legislature, but only asserts the solemn and sacred obligation assigned to it by the Constitution
to determine conflicting claims of authority under the Constitution and to establish for the parties in an actual controversy the rights
which that instrument secures and guarantees to them.[107]

Thus, the Court, in exercising its power of judicial review, is not imposing its own will upon a co-equal body but rather simply
making sure that any act of government is done in consonance with the authorities and rights allocated to it by the Constitution. And,
if after said review, the Court finds no constitutional violations of any sort, then, it has no more authority of proscribing the actions
under review. Otherwise, the Court will not be deterred to pronounce said act as void and unconstitutional.

It cannot be denied that most government actions are inspired with noble intentions, all geared towards the betterment of
the nation and its people. But then again, it is important to remember this ethical principle: The end does not justify the means. No
matter how noble and worthy of admiration the purpose of an act, but if the means to be employed in accomplishing it is simply
irreconcilable with constitutional parameters, then it cannot still be allowed. [108] The Court cannot just turn a blind eye and simply let
it pass. It will continue to uphold the Constitution and its enshrined principles.
30

The Constitution must ever remain supreme. All must bow to the mandate of this law. Expediency must not
be allowed to sap its strength nor greed for power debase its rectitude. [109]

Lest it be misunderstood, this is not the death knell for a truth commission as nobly envisioned by the present
administration. Perhaps a revision of the executive issuance so as to include the earlier past administrations would allow it to pass
the test of reasonableness and not be an affront to the Constitution. Of all the branches of the government, it is the judiciary which
is the most interested in knowing the truth and so it will not allow itself to be a hindrance or obstacle to its attainment. It must,
however, be emphasized that the search for the truth must be within constitutional bounds for ours is still a government of laws and
not of men.[110]

WHEREFORE, the petitions are GRANTED. Executive Order No. 1 is hereby declared UNCONSTITUTIONAL insofar as it is
violative of the equal protection clause of the Constitution.

As also prayed for, the respondents are hereby ordered to cease and desist from carrying out the provisions of Executive
Order No. 1.

SO ORDERED.

[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.

DECISION
BELLOSILLO, J.:

The Filipino 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 invoked 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 x x x x

b. The Highest Bidder must execute the Stock Purchase and Sale Agreement with GSIS x x x x
31

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 Berhard 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 managers 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 x x x x[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) x x x x 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.
32

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 -

x x x x in case of doubt, the Constitution should be considered self-executing rather than non-self-executing x x x x 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 -
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
capital, qualifications on the setting up of other financial structures, et cetera (underscoring 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 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 over foreign
33

investments within its national jurisdiction, as in the 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 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.[33] A 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 legislations must
be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII 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 and developed refers not only to our rich natural resources but
also to the cultural heritage of our race. 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.

We agree. In its plain and ordinary meaning, the term patrimony pertains to heritage.[35] 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.
Manila Hotel has become a landmark - a living testimonial of Philippine heritage. While it was restrictively an American hotel
when it first opened in 1912, it immediately evolved to be truly Filipino. Formerly a concourse for the elite, it has since then become
the venue of various significant events which have shaped Philippine history. It was called the Cultural Center of the 1930s. It was the
site of the festivities during the inauguration of the Philippine Commonwealth. Dubbed as the Official Guest House of the Philippine
Government it plays host to dignitaries and official visitors who are accorded the traditional Philippine hospitality. [36]
The history of the hotel has been chronicled in the book The Manila Hotel: The Heart and Memory of a City.[37] During World War
II the hotel was converted by the Japanese Military Administration into a military headquarters. When the American forces returned
to recapture Manila the hotel was selected by the Japanese together with Intramuros as the two (2) places for their final
stand. Thereafter, in the 1950s and 1960s, the hotel became the center of political activities, playing host to almost 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 hotel was the site of a failed coup d etat where an aspirant for vice-president was
proclaimed President of the Philippine Republic.
For more than eight (8) decades 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. Verily, Manila Hotel has become part of our national economy and patrimony. For sure, 51% of the equity of the
MHC comes within the purview of the constitutional shelter for it comprises the majority and controlling stock, so that anyone who
acquires or owns the 51% will have actual control and management of the hotel. In this instance, 51% of the MHC cannot be
disassociated from the hotel and the land on which the hotel edifice stands. Consequently, we cannot sustain respondents claim that
the Filipino First Policy provision is not applicable 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. [38]
The argument is pure sophistry. The term qualified Filipinos as used in our Constitution also includes corporations at least 60%
of which is owned by Filipinos. This is very clear from the proceedings of the 1986 Constitutional Commission -
THE PRESIDENT. Commissioner Davide is recognized.
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 OR
ASSOCIATIONS WHOSE CAPITAL OR CONTROLLING STOCK IS WHOLLY OWNED BY SUCH CITIZENS.
xxxx
MR. MONSOD. Madam President, apparently the proponent is agreeable, but we have to raise a question. Suppose it is a
corporation that is 80-percent Filipino, do we not give it preference?
34

MR. DAVIDE. The Nolledo amendment would refer to an individual Filipino. What about a corporation wholly owned by
Filipino citizens?
MR. MONSOD. At least 60 percent, Madam President.
MR. DAVIDE. Is that the intention?
MR. MONSOD. Yes, because, in fact, we would be limiting it if we say that the preference should only be 100-percent
Filipino.
MR. DAVIDE. I want to get that meaning clear because QUALIFIED FILIPINOS may refer only to individuals and not to juridical
personalities or entities.
MR. MONSOD. We agree, Madam President.[39]
xxxx
MR. RODRIGO. Before we vote, may I request that the amendment be read again.
MR. NOLLEDO. The amendment will read: IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE
NATIONAL ECONOMY AND PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS. And the word
Filipinos here, as intended by the proponents, will include not only individual Filipinos but also Filipino-controlled
entities or entities fully-controlled by Filipinos.[40]
The phrase preference to qualified Filipinos was explained thus -
MR. FOZ. Madam President, I would like to request Commissioner Nolledo to please restate his amendment so that I can
ask a question.
MR. NOLLEDO. IN THE GRANT OF RIGHTS, PRIVILEGES AND CONCESSIONS COVERING THE NATIONAL ECONOMY AND
PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO QUALIFIED FILIPINOS.
MR. FOZ. In connection with that amendment, if a foreign enterprise is qualified and a Filipino enterprise is also qualified,
will the Filipino enterprise still be given a preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects than the Filipino enterprise, will the Filipino still be preferred?
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 GIVE 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 x x x x This provision was never found in previous Constitutions x x x x

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
counterproductive 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 and 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
-
35

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 th e
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 [i]f 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 strongerreason 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 petitioners 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
36

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 x x x x in connection with a temporary injunction issued by the Courts
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 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 nations 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 if Manila Hotel - and all that it stands for - is sold to a non-Filipino? How much of national pride will vanish if the nations
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 Policyprovision 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 agreements and documents to effect the sale, to issue the necessary clearances and to do such other acts and
deeds as may be necessary for the purpose.
SO ORDERED.

Republic of the Philippines

Supreme Court
Manila
37

SECOND DIVISION

SPOUSES ROMAN A. PASCUAL and MERCEDITA R. G.R. No. 186269

PASCUAL, FRANCISCO A. PASCUAL, MARGARITA
CORAZON D. MARIANO, EDWIN D. MARIANO and Present:
DANNY R. MARIANO
Petitioners, CARPIO, J.,
Chairperson,
VILLARAMA, JR.,*
- versus - PEREZ,
SERENO, and
REYES, JJ.
SPOUSES ANTONIO BALLESTEROS and LORENZA
MELCHOR-BALLESTEROS,
Respondents.
Promulgated:

February 15, 2012

x-------------------------------------------------------------------------------------------x

RESOLUTION

REYES, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by the spouses Roman A. Pascual and
Mercedita R. Pascual (Spouses Pascual), Francisco A. Pascual (Francisco), Margarita Corazon D. Mariano (Margarita), Edwin D. Mariano
and Danny R. Mariano (petitioners) assailing the Decision[1] dated July 29, 2008 and Resolution[2] dated January 30, 2009 issued by the
Court of Appeals (CA) in CA-G.R. CV No. 89111.

The instant case involves a 1,539 square meter parcel of land (subject property) situated in Barangay Sta.
Maria, Laoag City and covered by Transfer Certificate of Title (TCT) No. T-30375[3] of the Laoag City registry. The subject property is
owned by the following persons, with the extent of their respective shares over the same: (1) the spouses Albino and Margarita
Corazon Mariano, 330 square meters; (2) Angela Melchor (Angela), 466.5 square meters; and (3) the spouses Melecio and Victoria
Melchor (Spouses Melchor), 796.5 square meters.

Upon the death of the Spouses Melchor, their share in the subject property was inherited by their daughter Lorenza Melchor
Ballesteros (Lorenza). Subsequently, Lorenza and her husband Antonio Ballesteros (respondents) acquired the share of Angela in the
subject property by virtue of an Affidavit of Extrajudicial Settlement with Absolute Sale [4] dated October 1, 1986.

On August 11, 2000, Margarita, then already widowed, together with her children, sold their share in the subject property to
Spouses Pascual and Francisco.[5]Subsequently, Spouses Pascual and Francisco caused the cancellation of TCT No. 30375 and, thus,
TCT No. T-32522[6] was then issued in their names together with Angela and Spouses Melchor.

Consequently, the respondents, claiming that they did not receive any written notice of the said sale in favor of Spouses
Pascual and Francisco, filed with the Regional Trial Court (RTC) of Laoag City a Complaint[7] for legal redemption against the petitioners.
The respondents claimed that they are entitled to redeem the portion of the subject property sold to Spouses Pascual and Francisco
being co-owners of the same.

For their part, the petitioners claimed that there was no co-ownership over the subject property considering that the shares
of the registered owners thereof had been particularized, specified and subdivided and, hence, the respondents has no right to redeem
the portion of the subject property that was sold to them.[8]
38

On January 31, 2007, the RTC rendered a decision [9] dismissing the complaint for legal redemption filed by the respondents.
In disposing of the said complaint, the RTC summed up the issues raised therein as follows: (1) whether the respondents herein and
the predecessors-in-interest of the petitioners are co-owners of the subject property who have the right of redemption under Article
1620 of the Civil Code; and (2) if so, whether that right was seasonably exercised by the respondents within the 30-day redemption
period under Article 1623 of the Civil Code.

On the first issue, the RTC held that the respondents and the predecessors-in-interest of the petitioners are co-owners of the
subject property considering that the petitioners failed to adduce any evidence showing that the respective shares of each of the
registered owners thereof were indeed particularized, specified and subdivided.

On the second issue, the RTC ruled that the respondents failed to seasonably exercise their right of redemption within the
30-day period pursuant to Article 1623 of the Civil Code. Notwithstanding the lack of a written notice of the sale of a portion of the
subject property to Spouses Pascual and Francisco, the RTC asserted that the respondents had actual notice of the said sale. Failing to
exercise their right of redemption within 30 days from actual notice of the said sale, the RTC opined that the respondents can no
longer seek for the redemption of the property as against the petitioners.

Thereupon, the respondents appealed from the January 31, 2007 decision of the RTC of Laoag City with the CA. On July 29,
2008, the CA rendered the herein assailed Decision[10] the decretal portion of which reads:

WHEREFORE, the appeal is GRANTED and the appealed January 31, 2007 Decision is,
accordingly, REVERSED and SET ASIDE. In lieu thereof, another is entered approving [respondents] legal redemption
of the portion in litigation. The rest of their monetary claims are, however, DENIED for lack of factual and/or legal
bases.

SO ORDERED.[11]

In allowing the respondents to exercise their right of redemption, the CA held that the 30-day period within which to exercise
the said right had not yet lapsed considering the absence of a written notice of the said sale. Thus, the CA stated that [t]he mandatory
nature of the written notice requirement is such that, notwithstanding the actual knowledge of the sale, written notice from the seller
is still necessary in order to remove all uncertainties about the sale, its terms and conditions, as well as its efficacy and status. [12]

The petitioners sought for a reconsideration of the said July 29, 2008 Decision, but it was denied by the CA in its
Resolution[13] dated January 30, 2009.

Undaunted, the petitioners instituted the instant petition for review on certiorari before this Court essentially asserting the
following arguments: (1) their predecessors-in-interest and the respondents are not co-owners of the subject property since their
respective shares therein had already been particularized, specified and subdivided; and (2) even if such co-ownership exists, the
respondents could no longer exercise their right of redemption having failed to exercise the same within 30 days from actual
knowledge of the said sale.

The petition is denied.

Primarily, Section 1, Rule 45 of the Rules of Court categorically states that the petition filed shall raise only questions of law,
which must be distinctly set forth. A question of law arises when there is doubt as to what the law is on a certain state of facts, while
there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same
must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of
39

the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of
the evidence presented, the question posed is one of fact.[14]

The first issue raised by the petitioners is a factual question as it entails a determination of whether the subject property was
indeed co-owned by the respondents and the predecessors-in-interest of the petitioners. Such determination would inevitably
necessitate a review of the probative value of the evidence adduced in the case below.

In any case, it ought to be stressed that both the RTC and the CA found that the subject property was indeed co-owned by
the respondents and the predecessors-in-interest of the petitioners. Thus, in the absence of any exceptional circumstances to warrant
the contrary, this Court must abide by
the prevailing rule that findings of fact of the trial court, more so when affirmed by the CA, are binding and conclusive upon it. [15]

Anent the second issue asserted by the petitioners, we find no reversible error on the part of the CA in ruling that the 30-day
period given to the respondents within which to exercise their right of redemption has not commenced in view of the absence of a
written notice. Verily, despite the respondents actual knowledge of the sale to the respondents, a written notice is still mandatory
and indispensable for purposes of the commencement of the 30-day period within which to exercise the right of redemption.

Article 1623 of the Civil Code succinctly provides that:

Article 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty
days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale
shall not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has given
written notice thereof to all possible redemptioners.

The right of redemption of co-owners excludes that of adjoining owners. (emphasis supplied)

The indispensability of the written notice requirement for purposes of the exercise of the right of redemption was explained
by this Court in Barcellano v. Baas,[16] thus:

Nothing in the records and pleadings submitted by the parties shows that there was a written notice sent
to the respondents. Without a written notice, the period of thirty days within which the right of legal pre-emption
may be exercised, does not start.

The indispensability of a written notice had long been discussed in the early case of Conejero v. Court of
Appeals, penned by Justice J.B.L. Reyes:

With regard to the written notice, we agree with petitioners that such notice is
indispensable, and that, in view of the terms in which Article of the Philippine Civil Code is couched,
mere knowledge of the sale, acquired in some other manner by the redemptioner, does not satisfy
the statute. The written notice was obviously exacted by the Code to remove all uncertainty as to
the sale, its terms and its validity, and to quiet any doubts that the alienation is not definitive. The
statute not having provided for any alternative, the method of notification prescribed remains
exclusive.

This is the same ruling in Verdad v. Court of Appeals:

The written notice of sale is mandatory. This Court has long established the rule that notwithstanding actual
knowledge of a co-owner, the latter is still entitled to a written notice from the selling co-owner in order to remove
all uncertainties about the sale, its terms and conditions, as well as its efficacy and status.

Lately, in Gosiengfiao Guillen v. The Court of Appeals, this Court again emphasized the mandatory character
of a written notice in legal redemption:

From these premises, we ruled that [P]etitioner-heirs have not lost their right to redeem,
for in the absence of a written notification of the sale by the vendors, the 30-day period has not
even begun to run. These premises and conclusion leave no doubt about the thrust
of Mariano: The right of the petitioner-heirs to exercise their right of legal redemption exists,
40

and the running of the period for its exercise has not even been triggered because they have not
been notified in writing of the fact of sale.

xxxx

Justice Edgardo Paras, referring to the origins of the requirement, would explain in his commentaries on
the New Civil Code that despite actual knowledge, the person having the right to redeem is STILL entitled to the
written notice. Both the letter and the spirit of the New Civil Code argue against any attempt to widen the scope of
the written notice by including therein any other kind of notice such as an oral one, or by registration. If the intent
of the law has been to include verbal notice or any other means of information as sufficient to give the effect of this
notice, there would have been no necessity or reason to specify in the article that said notice be in writing, for under
the old law, a verbal notice or mere information was already deemed sufficient.

Time and time again, it has been repeatedly declared by this Court that where the law speaks in clear and
categorical language, there is no room for interpretation. There is only room for application. Where the language of
a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation should be
resorted to only where a literal interpretation would be either impossible or absurd or would lead to an injustice. x
x x (citations omitted)

Here, it is undisputed that the respondents did not receive a written notice of the sale in favor of the petitioners. Accordingly,
the 30-day period stated under Article 1623 of the Civil Code within which to exercise their right of redemption has not begun to run.
Consequently, the respondents may still redeem from the petitioners the portion of the subject property that was sold to the latter.

WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. The assailed Decision dated July 29, 2008
and Resolution dated January 30, 2009 issued by the Court of Appeals in CA-G.R. CV No. 89111 are AFFIRMED.

SO ORDERED.

[G.R. No. 118712. July 5, 1996]

LAND BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, PEDRO L. YAP, HEIRS OF EMILIANO F. SANTIAGO,
AGRICULTURAL MANAGEMENT & DEVELOPMENT CORPORATION, respondents.

[G.R. No. 118745. July 5, 1996]

DEPARTMENT OF AGRARIAN REFORM, represented by the Secretary of Agrarian Reform, petitioner, vs. COURT OF APPEALS, PEDRO
L. YAP, HEIRS OF EMILIANO F. SANTIAGO, AGRICULTURAL MANAGEMENT AND DEVELOPMENT CORPORATION, ET
AL., respondents.

RESOLUTION
FRANCISCO, J.:

Consequent to the denial of their petitions for review on certiorari by this Court on October 6, 1995[1], petitioners Department
of Agrarian Reform (DAR) and Land Bank of the Philippines (LBP), filed their respective motions for reconsideration contending mainly
that, contrary to the Court's conclusion, the opening of trust accounts in favor of the rejecting landowners is sufficient compliance
with the mandate of Republic Act 6657. Moreover, it is argued that there is no legal basis for allowing the withdrawal of the money
deposited in trust for the rejecting landowners pending the determination of the final valuation of their properties.
41

Petitioner DAR maintains that "the deposit contemplated by Section 16(e) of Republic Act 6657, absent any specific indication,
may either be general or special, regular or irregular, voluntary or involuntary (necessary) or other forms known in law, and any thereof
should be, as it is the general rule, deemed complying."[2]
We reject this contention. Section 16(e) of Republic Act 6657 was very specific in limiting the type of deposit to be made as
compensation for the rejecting landowners, that is in "cash" or in "LBP bonds", to wit:

"Sec. 16. Procedure for Acquisition of Private Lands

xxx xxx xxx

(e) Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the landowner, upon
the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP bonds in accordance with this Act,
the DAR shall take immediate possession of the land and shall request the proper Register of Deeds to issue a Transfer Certificate of
Title (TCT) in the name of the Republic of the Philippines. x x x" (Italics supplied)

The provision is very clear and unambiguous, foreclosing any doubt as to allow an expanded construction that would include the
opening of "trust accounts" within the coverage of term "deposit. Accordingly, we must adhere to the well-settled rule that when the
law speaks in clear and categorical language, there is no reason for interpretation or construction, but only for application.[3] Thus,
recourse to any rule which allows the opening of trust accounts as a mode of deposit under Section 16(e) of R.A. 6657 goes beyond
the scope of the said provision and is therefore impermissible. As we have previously declared, the rule-making power must be
confined to details for regulating the mode or proceedings to carry into effect the law as it has been enacted, and it cannot be extended
to amend or expand the statutory requirements or to embrace matters not covered by the statute. [4] Administrative regulations must
always be in harmony with the provisions of the law because any resulting discrepancy between the two will always be resolved in
favor of the basic law.[5]
The validity of constituting trust accounts for the benefit of the rejecting landowners and withholding immediate payment to
them is further premised on the latter's refusal to accept the offered compensation thereby making it necessary that the amount
remains in the custody of the LBP for safekeeping and in trust for eventual payment to the landowners. [6] Additionally, it is argued that
the release of the amount deposited in trust prior to the final determination of the just compensation would be premature and expose
the government to unnecessary risks and disadvantages, citing the possibility that the government may subsequently decide to
abandon or withdraw from the coverage of the CARP certain portions of the properties that it has already acquired, through
supervening administrative determination that the subject land falls under the exempt category, or by subsequent legislation allowing
additional exemptions from the coverage, or even the total scrapping of the program itself. Force majeure is also contemplated in
view of the devastation suffered by Central Luzon de to lahar. Petitioner DAR maintains that under these conditions, the government
will be forced to institute numerous actions for the recovery of the amounts that it has already paid in advance to the rejecting
landowners.[7]
We are not persuaded. As an exercise of police power, the expropriation of private property under the CARP puts the landowner,
and not the government, in a situation where the odds are already stacked against his favor. He has no recourse but to allow it. His
only consolation is that he can negotiate for the amount of compensation to be paid for the expropriated property. As expected, the
landowner will exercise this right to the hilt, but subject however to the limitation that he can only be entitled to a "just compensation."
Clearly therefore, by rejecting and disputing the valuation of the DAR, the landowner is merely exercising his right to seek just
compensation. If we are to affirm the withholding of the release of the offered compensation despite depriving the landowner of the
possession and use of his property, we are in effect penalizing the latter for simply exercising a right afforded to him by law.
Obviously, this would render the right to seek a fair and just compensation illusory as it would discourage owners of private lands
from contesting the offered valuation of the DAR even if they find it unacceptable, for fear of the hardships that could result from long
delays in the resolution of their cases. This is contrary to the rules of fair play because the concept of just compensation embraces not
only the correct determination of the amount to be paid to the owners of the land, but also the payment of the land within a
reasonable time from its taking.Without prompt payment, compensation cannot be considered "just" for the property owner is made
to suffer the consequence of being immediately deprived of his land while being made to wait for a decade or more before actually
receiving the amount necessary to cope with his loss.[8] It is significant to note that despite petitioner's objections to the immediate
release of the rejected compensation, petitioner LBP, taking into account the plight of the rejecting landowners, has nevertheless
allowed partial withdrawal through LBP Executive Order No. 003,[9] limited to fifty (50) per cent of the net cash proceeds. This is a clear
confirmation that petitioners themselves realize the overriding need of the landowners' immediate access to the offered
compensation despite rejecting its valuation. But the effort, though laudable, still falls short because the release of the amount was
unexplainably limited to only fifty per cent instead of the total amount of the rejected offer, notwithstanding that the rejecting
landowner's property is taken in its entirety. The apprehension against the total release of the rejected compensation is discounted
since the government's interest is amply protected under the aforementioned payment scheme because among the conditions already
imposed is that the landowner must execute a Deed of Conditional Transfer for the subject property.[10]
Anent the aforecited risks and disadvantages to which the government allegedly will be unnecessarily exposed if immediate
withdrawal of the rejected compensation is allowed, suffice it to say that in the absence of any substantial evidence to support the
same, the contemplated scenarios are at the moment nothing but speculations. To allow the taking of the landowners' properties,
and in the meantime leave them empty handed by withholding payment of compensation while the government speculates on
whether or not it will pursue expropriation, or worse for government to subsequently decide to abandon the property and return it
to the landowner when it has already been rendered useless by force majeure, is undoubtedly an oppressive exercise of eminent
domain that must never be sanctioned. Legislations in pursuit of the agrarian reform program are not mere overnight creations but
were the result of long exhaustive studies and even heated debates. In implementation of the program, much is therefore expected
42

from the government. Unduly burdening the property owners from the resulting flaws in the implementation of the CARP which was
supposed to have been a carefully crafted legislation is plainly unfair and unacceptable.
WHEREFORE, in view of the foregoing, petitioners' motions for reconsideration are hereby DENIED for lack of merit.
SO ORDERED.

SOUTH PACIFIC SUGAR G.R. No. 180462

CORPORATION and SOUTH

EAST ASIA SUGAR MILL Present:

CORPORATION,

Petitioners, CARPIO, J., Chairperson,

NACHURA,

PERALTA,

- versus - ABAD, and

MENDOZA, JJ.

COURT OF APPEALS and

SUGAR REGULATORY Promulgated:

ADMINISTRATION,

Respondents. February 9, 2011

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO, J.:

The Case

This is a petition for review on certiorari1 of the 6 November 2007 Decision2 of the Court of Appeals in CA-G.R. SP No. 100571, which
set aside the 26 June 2007, 6 August 2007, and 31 August 2007 Orders 3 as well as the 6 September 2007 Writ of Execution and the 12
September 2007 Amended Writ of Execution of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236.

The Facts

In 1999, the government projected a shortage of some 500,000 metric tons of sugar due to the effects of El Nio and La Nia phenomena.
To fill the expected shortage and to ensure stable sugar prices, then President Joseph Ejercito Estrada issued Executive Order No. 87,
Series of 1999 (EO 87),4 facilitating sugar importation by the private sector.
43

Section 2 of EO 87 created a Committee on Sugar Conversion/Auction to determine procedures for sugar importation as well as for
collection and remittance of conversion fee.

Under Section 3 of EO 87, sugar conversion is by auction and is subject to conversion fee to be remitted by respondent Sugar
Regulatory Administration (SRA) to the Bureau of Treasury.

On 3 May 1999, the Committee on Sugar Conversion/Auction issued the Bidding Rules providing guidelines for sugar importation.
Under the Bidding Rules, the importer pays 25% of the conversion fee within three working days from receipt of notice of the bid
award and the 75% balance upon arrival of the imported sugar.

The Bidding Rules also provide that if the importer fails to make the importation or if the imported sugar fails to arrive on or before
the set arrival date, 25% of the conversion fee is forfeited in favor of the SRA, to wit:

G. Forfeiture of Conversion Fee

G.1 In case of failure of the importer to make the importation or for the imported sugar to arrive in the Philippines on or
before the Arrival Date, the 25% of Conversion Fee Bid already paid shall be forfeited in favor of the SRA and the imported
sugar shall not be classified as B (domestic sugar) unless, upon application with the SRA and without objection of the
Committee, the SRA allows such conversion after payment by the importer of 100% of the Conversion Fee applicable to the
shipment.5 (Emphasis supplied)

The SRA forthwith authorized the importation of 300,000 metric tons of sugar, to be made in three tranches, as follows:

Tranche Volume Arrival Date

1st 100,000MT 15 May-15 June 1999

2nd 100,000MT 15 June-July 15 1999

3rd 100,000MT 15 July-15 August 19996

The Committee on Sugar Conversion/Auction caused the publication of the invitation to bid. Several sugar importers submitted sealed
bid tenders. Petitioners Southeast Asia Sugar Mill Corporation (Sugar Mill) and South Pacific Sugar Corporation (Pacific Sugar) emerged
as winning bidders for the 1st, 2nd, and 3rd tranches.

For the 3rd tranche, Sugar Mill submitted the winning bid of P286.80 per 50 kilogram for 10,000 metric tons of sugar, while Pacific
Sugar submitted the winning bid of P285.99 per 50 kilogram for 20,000 metric tons of sugar, for a combined total volume of 30,000
metric tons of sugar.

Pursuant to the Bidding Rules, Sugar Mill paid 25% of the conversion fee amounting to P14,340,000.00, while Pacific Sugar paid 25%
of the conversion fee amounting to P28,599,000.00.
44

As it turned out, Sugar Mill and Pacific Sugar (sugar corporations) delivered only 10% of their sugar import allocation, or a total of only
3,000 metric tons of sugar. They requested the SRA to cancel the remaining 27,000 metric tons of sugar import allocation blaming
sharp decline in sugar prices. The sugar corporations sought immediate reimbursement of the corresponding 25% of the conversion
fee amounting to P38,637,000.00.

The SRA informed the sugar corporations that the conversion fee would be forfeited pursuant to paragraph G.1 of the Bidding Rules.
The SRA also notified the sugar corporations that the authority to reconsider their request for reimbursement was vested with the
Committee on Sugar Conversion/Auction.

On 26 February 2002, the sugar corporations filed a complaint for breach of contract and damages in the Regional Trial Court (Branch
77) of Quezon City, docketed as Civil Case No. Q-02-46236.

In its notice of appearance,7 the Office of the Solicitor General (OSG) deputized Atty. Raul Labay of the SRAs legal department to assist
the OSG in this case, thus:

Please be informed that Atty. Raul M. Labay has been authorized to appear in this case, and therefore, should also be
furnished with notices of hearings, orders, resolutions, decisions, and other processes. However, as the Solicitor General
retains supervision and control of the representation in this case and has to approve withdrawal of the case, non-appeal, or
other actions which appear to compromise the interests of the Government, only notices of orders, resolutions, and decisions
served on him will bind the party represented.8

The Ruling of the RTC

The RTC held that paragraph G.1 of the Bidding Rules contemplated delay in the arrival of imported sugar, not cancellation of sugar
importation. It concluded that the forfeiture provision did not apply to the sugar corporations which merely cancelled the sugar
importation. In its 19 December 2006 Decision,9 the RTC ruled, thus:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs, ORDERING the defendant Sugar
Regulatory Administration to pay plaintiffs the amount of P38,637,000.00as reimbursement of 25% of the conversion fee
they paid in 1999. The claim for legal interests, compensatory damages, exemplary damages, and attorneys fees is hereby
DENIED.

SO ORDERED.10

On 5 January 2007, the OSG received its copy of the RTC Decision.11 On 24 January 2007, the deputized SRA counsel, Atty. Raul Labay,
received his own copy of the Decision and filed a notice of appeal on 7 February 2007. 12

The sugar corporations moved to expunge the notice of appeal on the ground that only the OSG, as the principal counsel, can decide
whether an appeal should be made. The sugar corporations stressed that a lawyer deputized by the OSG has no authority to decide
whether an appeal should be made.

The OSG filed its opposition13 to the motion to expunge the notice of appeal. The OSG pointed out that in its notice of appearance, 14 it
authorized SRA counsel Atty. Labay to assist the OSG in this case.
45

In its 26 June 2007 Order, the RTC granted the motion to expunge the notice of appeal. The OSG moved for reconsideration stressing
that the OSG ratified Atty. Labays filing of a notice of appeal. The RTC, in its 6 August 2007 Order, denied the OSGs motion for
reconsideration.

In its 31 August 2007 Order, the RTC granted the sugar corporations motion for execution, to wit:

WHEREFORE, premises considered, the plaintiffs motion for execution is hereby granted. Accordingly, issue a writ of
execution for the enforcement of the decision rendered in this case.

SO ORDERED.15

Accordingly, the RTC issued on 6 September 2007 a Writ of Execution and on 12 September 2007 an Amended Writ of Execution.

Aggrieved, the SRA filed in the Court of Appeals a petition for certiorari under Rule 65 seeking to set aside the RTCs 26 June 2007, 6
August 2007, and 31 August 2007 Orders as well as the 6 September 2007 Writ of Execution and the 12 September 2007 Amended
Writ of Execution.

The Ruling of the Court of Appeals

The Court of Appeals held that the deputized SRA counsel had authority to file a notice of appeal. The appellate court thus directed
the RTC to give due course to the appeal that Atty. Labay timely filed. The decretal part of its 6 November 2007 Decision reads:

WHEREFORE, premises considered, the present petition is hereby GIVEN DUE COURSE and the writ prayed for accordingly
GRANTED. The Orders dated June 26, 2007, August 6, 2007, and August 31, 2007, as well as the Writ of Execution dated
September 6, 2007 and Amended Writ of Execution dated September 12, 2007 issued in Civil Case No. Q-02-46236 of the
Regional Trial Court of Quezon City, Branch 77 are hereby all ANNULLED and SET ASIDE. Said court is hereby DIRECTED to
GIVE DUE COURSE to the Notice of Appeal dated February 7, 2007 filed by Atty. Raul M. Labay in behalf of petitioner Sugar
Regulatory Administration.

No pronouncement as to costs.

SO ORDERED.16

Dissatisfied with the decision of the Court of Appeals, the sugar corporations filed in this Court a petition for review on certiorari.

The Issues

The issues are (1) whether a deputized SRA counsel may file a notice of appeal and (2) whether the sugar corporations are entitled to
reimbursement of P38,637,000.00 in conversion fee.
46

The Courts Ruling

The petition lacks merit.

The sugar corporations contend that the deputized SRA counsel, Atty. Labay, was not authorized to file a notice of appeal; that the
OSG, as the principal counsel, had the sole authority to file a notice of appeal; that certiorari may not be interposed as a substitute for
the lost remedy of appeal; and that the subject conversion fee amounting to P38,637,000.00 remained as private funds in view of its
summary forfeiture and as such, it could not be deemed part of public funds.

The OSG counters that assuming Atty. Labay had no authority to file the notice of appeal, the defect was cured when the OSG
subsequently filed its opposition to the sugar corporations motion to expunge the notice of appeal. The OSG claims that if the denial
of the appeal is sustained, the SRA would no longer have a remedy to assail the RTC decision adjudging it liable to reimburse the sugar
corporations P38,637,000.00 in conversion fee despite the admitted failure of the sugar corporations to comply with their contractual
undertaking to import sugar.

The deputized SRA counsel may file a notice of appeal.

Section 35, Chapter 12, Title III, Book IV of the Administrative Code of 1987 17 authorizes the OSG to represent the SRA, a government
agency established pursuant to Executive Order No. 18, Series of 1986,18 in any litigation, proceeding, investigation, or matter requiring
the services of lawyers. It provides:

SEC. 35. Powers and Functions. The Office of the Solicitor General shall represent the Government of the Philippines, its
agencies and instrumentalities and its officials and agents in any litigation, proceeding, investigation, or matter requiring
the services of lawyers. When authorized by the President or head of the office concerned, it shall also represent government
owned or controlled corporations. The Office of the Solicitor General shall constitute the law office of the Government and,
as such, shall discharge duties requiring the services of lawyers. (Emphasis supplied)

The OSG is empowered to deputize legal officers of government departments, bureaus, agencies, and offices in cases involving their
respective offices. Paragraph 8 of the same section reads:

(8) Deputize legal officers of government departments, bureaus, agencies, and offices to assist the Solicitor General and
appear or represent the Government in cases involving their respective offices, brought before the courts and exercise
supervision and control over such legal officers with respect to such cases. (Emphasis supplied)

In National Power Corporation v. Vine Development Corporation,19 this Court ruled that the deputization by the OSG of NAPOCOR
counsels in cases involving the NAPOCOR included the authority to file a notice of appeal. The Court explained that the OSG could
have withdrawn the appeal if it believed that the appeal would not advance the governments cause. The Court held that even if the
deputized NAPOCOR counsel had no authority to file a notice of appeal, the defect was cured by the OSGs subsequent manifestation
that the deputized NAPOCOR counsel had authority to file a notice of appeal.

The sugar corporations reliance on another NAPOCOR case, National Power Corporation v. NLRC,20 is misplaced. There, service of the
decision was never made on the OSG, the principal counsel for NAPOCOR. Only the deputized NAPOCOR counsel was served a copy of
the decision. Hence, the Court held that the period to appeal the decision did not commence to run. The Court explained that service
of the decision on the deputized NAPOCOR counsel was insufficient and not binding on the OSG. This was why the Court stated in that
case that the deputized NAPOCOR counsel had no authority to decide whether an appeal should be made.
47

Noteworthy, in National Power Corporation v. Vine Development Corporation, both the OSG and the deputized NAPOCOR counsel
were served copies of the decision subject of the appeal. In National Power Corporation v. NLRC, only the deputized NAPOCOR counsel
was furnished a copy of the appealed decision. Hence, the differing rulings by this Court.

In the present case, records show that both the OSG and the deputized SRA counsel were served copies of the RTC decision subject of
the appeal. Thus, what applies is National Power Corporation v. Vine Development Corporation. Applying here the doctrine laid down
in the said case, deputized SRA counsel Atty. Labay is, without a doubt, authorized to file a notice of appeal.

Assuming Atty. Labay had no authority to file a notice of appeal, such defect was cured when the OSG subsequently filed its opposition
to the motion to expunge the notice of appeal. As the OSG explained, its reservation 21 to approve the withdrawal of the case, the non-
appeal, or other actions which appear to compromise the interest of the government was meant to protect the interest of the
government in case the deputized SRA counsel acted in any manner prejudicial to government. Obviously, what required the approval
of the OSG was the non-appeal, not the appeal, of a decision adverse to government.

We hold that the RTC should have given due course to the notice of appeal that Atty. Labay timely filed. Thus, the 19 December 2006
Decision of the RTC in Civil Case No. Q-02-46236 cannot be deemed to have attained finality.

The next logical step is to remand the case to the RTC. However, a remand would only delay the resolution of this case and frustrate
the ends of justice. As a rule, remand is avoided in the following instances: (a) where the ends of justice would not be served; (b)
where public interest demands an early disposition of the case; or (c) where the trial court already received all the evidence presented
by both parties, and the Supreme Court is in a position, based upon said evidence, to decide the case on its merits. 22 All three
conditions are present here.

The sugar corporations are not entitled to reimbursement

of 25% of the conversion fee amounting to P38,637,000.00.

Section 2 of EO 87 granted the Committee on Sugar Conversion/Auction power to promulgate rules governing sugar importation by
the private sector. It provides:

SEC. 2. Committee on Sugar Conversion/Auction. There is hereby created a Committee on Sugar Conversion/Auction which
shall be headed by the DA, with the following as members: NEDA, DTI, DOF, SRA, and a representative each from the sugar
planters group and the sugar millers group. The Committee is hereby authorized to determine the parameters and
procedures on the importation of sugar by the private sector, and the collection and remittance of the fee for the conversion
of sugar from C (reserve sugar) to B (domestic sugar). (Emphasis supplied)

Pursuant to this authority, the Committee issued the Bidding Rules subject of the controversy, paragraph G.1 of which provides that
if the importer fails to make the importation, 25% of the conversion fee shall be forfeited in favor of the SRA, thus:

G. Forfeiture of Conversion Fee

G.1 In case of failure of the importer to make the importation or for the imported sugar to arrive in the Philippines on or
before the Arrival Date, the 25% of Conversion Fee Bid already paid shall be forfeited in favor of the SRA and the imported
sugar shall not be classified as B (domestic sugar) unless, upon application with the SRA and without objection of the
48

Committee, the SRA allows such conversion after payment by the importer of 100% of the Conversion Fee applicable to the
shipment.23 (Emphasis supplied)

In joining the bid for sugar importation, the sugar corporations are deemed to have assented to the Bidding Rules, including the
forfeiture provision under paragraph G.1. The Bidding Rules bind the sugar corporations. The latter cannot rely on the lame excuse
that they are not aware of the forfeiture provision.

At the trial, Teresita Tan testified that the Bidding Rules were duly published in a newspaper of general circulation. 24 Vicente Cenzon,
a sugar importer who participated in the bidding for the 3 rd tranche, testified that he attended the pre-bid conference where the
Bidding Rules were discussed and copies of the same were distributed to all the bidders. 25

On the other hand, all that the sugar corporations managed to come up with was the self-serving testimony of its witness,
Daniel Fajardo, that the sugar corporations were not informed of the forfeiture provision in the Bidding Rules. 26

The Bidding Rules passed through a consultative process actively participated by various government agencies and their counterpart
in the private sector: the Department of Agriculture, the National Economic Development Authority, the Department of Trade and
Industry, the Department of Finance, the Sugar Regulatory Administration, and a representative each from the sugar planters group
and the sugar millers group.27

We find nothing in the forfeiture provision of the Bidding Rules that is contrary to law, morals, good customs, public order, or public
policy. On the contrary, the forfeiture provision fully supports government efforts to aid the countrys ailing sugar industry. Conversion
fees, including those that are forfeited under paragraph G.1 of the Bidding Rules, are automatically remitted to the Bureau of Treasury
and go directly to the Agricultural Competitiveness Enhancement Fund. 28

It is unrefuted that the sugar corporations failed in their contractual undertaking to import the remaining 27,000 metric tons of sugar
specified in their sugar import allocation. Applying paragraph G.1 of the Bidding Rules, such failure is subject to forfeiture of the 25%
of the conversion fee the sugar corporations paid as part of their contractual undertaking.

The RTC gravely erred in ordering the SRA to return the forfeited conversion fee to the sugar corporations. Its strained interpretation
that paragraph G.1 of the Bidding Rules contemplates cases of delay in the arrival of imported sugar but not cases of cancellation of
sugar importation defies logic and the express provision of paragraph G.1. If delay in the arrival of imported sugar is subject to
forfeiture of 25% of the conversion fee, with more reason is outright failure to import sugar, by cancelling the sugar importation
altogether, subject to forfeiture of the 25% of the conversion fee.

Plainly and expressly, paragraph G.1 identifies two situations which would bring about the forfeiture of 25% of the conversion fee:
(1) when the importer fails to make the importation or (2) when the imported sugar fails to arrive in the Philippines on or before the
set arrival date. It is wrong for the RTC to interpret the forfeiture provision in a way departing from its plain and express language.

Where the language of a rule is clear, it is the duty of the court to enforce it according to the plain meaning of the word. There is no
occasion to resort to other means of interpretation. 29

WHEREFORE, we DENY the petition. We AFFIRM the 6 November 2007 Decision of the Court of Appeals in CA-G.R. SP No. 100571,
which set aside the 26 June 2007, 6 August 2007, and 31 August 2007 Orders as well as the 6 September 2007 Writ of Execution and
the 12 September 2007 Amended Writ of Execution of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-
49

46236. Further, the 19 December 2006 Decision of the Regional Trial Court (Branch 77) of Quezon City in Civil Case No. Q-02-46236
is SET ASIDE.

Costs against petitioners.

SO ORDERED.

[G.R. No. 120363. September 5, 1997]

CECILLEVILLE REALTY and SERVICE CORPORATION, petitioner, vs., THE COURT OF APPEALS and HERMINIGILDO
PASCUAL, respondents.

DECISION
FRANCISCO, J.:

In synthesis, these are the antecedent facts:

Petitioner Cecilleville Realty and Service Corporation is the owner of a parcel of land in Catmon, Sta. Maria, Bulacan, covered by
T.C.T. No. 86.494 (M). Private respondent Herminigildo Pascual occupies a portion thereof. Despite repeated demands, private
respondent refused to vacate and insisted that he is entitled to occupy the land since he is helping his mother Ana Pascual, petitioners
tenant, to cultivate the land in question. Thenceforth, petitioner instituted an ejectment suit against private respondent before the
Municipal Trial Court of Sta. Maria, Bulacan. Finding no tenancy relationship between petitioner and private respondent, the Municipal
Trial Court on September 17, 1992, ordered private respondent to vacate the land and to pay the sum of P10,000.00, as attorneys fees
and another sum of P500.00 monthly from the filing of [the] complaint. [1] Private respondent appealed to the Regional Trial Court
which, on April 4, 1994, set aside the Municipal Trial Courts decision and remanded the case to the DARAB for further
adjudication. Thus:

There is no question that Ana Pascual may seek the assistance of her immediate farm household in the cultivation of the land. The law
protects her in this regard. If the tenant Ana Pascual will be deprived of such right by ejecting her son Herminigildo Pascual from the
land, it is tantamount to circumventing the law as Ana Pascual will be deprived of the helping hands of her son. What could not be
done directly cannot be done indirectly. The issue of tenancy relationship between the plaintiff corporation and Ana Pascual cannot
be avoided in this ejectment case.

WHEREFORE, in the light of the foregoing, this Court hereby orders that the instant case be REMANDED to the DARAB for further
adjudication and the decision of the Court a quo is hereby SET ASIDE x x x. [2]

Petitioner moved for reconsideration but to no avail; hence, it appealed to respondent Court of Appeals. In its assailed
decision [3], respondent court [4] dismissed petitioners appeal. The entire ruling of respondent court in point states:

We find this petition devoid of merit.

There is a clear tenancy relationship between the plaintiff and the defendant, such that the defendant cannot be ejected from the
premises like a common squatter.

The tenancy relationship dated back to 1976 when the defendants father, Sotero Pascual, became the tenant of Jose A. Resurreccion,
the President of the Cecilleville Realty and Service Corporation. This tenancy continued until 1991 when Sotero Pascual died and was
succeeded by his wife Ann Pascual by operation of law. That Ana Pascual is entitled to the security of tenure was upheld by the DARAB
in its Decision of November 8, 1993 which ordered the plaintiff to respect and maintain the peaceful possession and cultivation of the
property by the defendant Ana Pascual and ordered the execution of a agricultural leasehold contract between the parties.

The defendant Herminigildo Pascual is occupying and working on the landholding to help his mother, a bona-fide tenant. He is an
immediate member of the family and is entitled to work on the land. As the lower court held:

Under Republic Act No. 1199, as amended by RA 2263, entitled An Act to Govern the Relations Between Landholders and Tenants of
Agricultural Lands (Leasehold and Share Tenancy), Section 5(a) defines the term tenant, to wit:
50

Sec. 5.

(a) A tenant shall mean a person who, himself and with the aid available from within his immediate farm household, cultivates the
land belonging to, or possessed by, another, with the latters consent for purposes of production, sharing the produce with the
landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or in money or
both, under the leasehold tenancy system.

Similarly, the term immediate farm household is defined in the same section as follows:

(o) Immediate farm household includes the members of the family of the tenant, and such other persons, whether related to the
tenant or not, who are dependent upon him for support and who usually help him operate the farm enterprise.

The defendant, although not the tenant himself, is afforded the protection provided by law as his mother is already old and infirm and
is allowed to avail of the labor of her immediate household. He is entitled to the security of tenure accorded his mother. His having a
house of his own on the property is merely incidental to the tenancy.

WHEREFORE, the Decision appealed from is AFFIRMED with costs against the petitioner. [5] (Underscoring supplied.)

Dissatisfied, petitioner filed the instant petition for review on certiorari anchored on a lone assignment of error, to wit:

Petitioner respectfully contends that the Honorable Court of Appeals erred in not finding that while the private respondent is entitled
to work on the agricultural land of petitioner in his capacity as member of the family of tenant Ana Pascual, nonetheless he can not
occupy a substantial portion thereof and utilize the same for residential purposes. [6]

On August 19, 1996, the Court gave due course to the petition and required the parties to submit their respective
memoranda. Thereafter, the Court deliberated on the arguments set out in their pleadings.
The petition is impressed with merit.
At the outset, the Court notes that petitioner does not dispute respondent courts finding that Ana Pascual, private respondents
mother, is its bona-fide tenant. Neither does petitioner question the right of Ana Pascual, the tenant, to be assisted by a member of
her household, who in this case is respondent Herminigildo Pascual. [7] What petitioner impugns as erroneous is respondent courts
gratuitous pronouncement which effectively granted private respondent not only a home lot, but also the right to maintain his own
house in petitioners small parcel of land [8] despite the fact that Ana Pascual, the adjudged bona-fide tenant, has previously been given
a home lot and has an existing house thereon. Private respondent Herminigildo Pascual, for his part, insists that he is entitled by
law, (Section 22, (3) of Rep. Act No.1199, as amended by Rep. Act No. 2263), [9] to a home lot and the right to maintain another house
different from that of his mother. To bolster his contention, private respondent adopts respondent courts ruling finding him as a
member of Ana Pascuals immediate farm household. Private respondent holds, quoting extensively from the assailed decision,
that although not the tenant himself, [he] is afforded the protection provided by law as his mother is already old and infirm and is
allowed to avail of the labor of her immediate household. x x x. [And] [h]is having a house of his own on the property is merely
incidental to the tenancy. [10]
As the Court sees it, the issue lies on the interpretation of Section 22, paragraph 3, of Rep. Act No. 1199, as amended by Rep. Act
No. 2263. This section provides in full as follows:

SEC. 22

xxxxxxxxx

(3) The tenant shall have the right to demand for a home lot suitable for dwelling with an area of not more than 3 per cent of the area
of his landholding provided that it does not exceed one thousand square meters and that it shall be located at a convenient and
suitable place within the land of the landholder to be designated by the latter where the tenant shall construct his dwelling and may
raise vegetables, poultry, pigs and other animals and engage in minor industries, the products of which shall accrue to
the tenant exclusively. The tenants dwelling shall not be removed from the lot already assigned to him by the landholder, except as
provided in section twenty-six unless there is a severance of the tenancy relationship between them as provided under section nine,
or unless the tenant is ejected for cause, and only after the expiration of forty-five days following such severance of relationship or
dismissal for cause. (Emphasis supplied)

The law is unambiguous and clear. Consequently, it must be applied according to its plain and obvious meaning, according to its
express terms. Verba legis non est recedendum, or from the words of a statute there should be no departure. [11] As clearly provided,
only a tenant is granted the right to have a home lot and the right to construct or maintain a house thereon.And here, private
respondent does not dispute that he is not petitioners tenant. In fact, he admits that he is a mere member of Ana Pascuals immediate
farm household. Under the law, therefore, we find private respondent not entitled to a home lot. Neither is he entitled to construct a
house of his own or to continue maintaining the same within the very small landholding of petitioner. To rule otherwise is to make a
mockery of the purpose of the tenancy relations between a bona-fide tenant and the landholder as envisioned by the very law, i.e.,
Rep. Act No. 1199, as amended, upon which private respondent relies, to wit:
51

Sec. 2. Purpose. It is the purpose of this Act to establish agricultural tenancy relations between landholders and tenants upon the
principle of social justice; to afford adequate protection to the rights of both tenants and landholders; to insure the equitable division
of the produce and income derived from the land; to provide tenant-farmers with incentives to greater and more efficient agricultural
production; to bolster their economic position and to encourage their participation in the development of peaceful, vigorous and
democratic rural communities. (Emphasis supplied)

Thus, if the Court were to follow private respondents argument and allow all the members of the tenants immediate farm
household to construct and maintain their houses and to be entitled to not more than one thousand (1,000) square meters each of
home lot, as what private respondent wanted this Court to dole-out, then farms will be virtually converted into rows, if not colonies,
of houses. How then can there be equitable division of the produce and income derived from the land and more efficient agricultural
production if the lands productivity and use for growing crops is lessened or, more appropriately, obliterated by its unceremonious
conversion into residential use? It is a fundamental principle that once the policy or purpose of the law has been ascertained, effect
should be given to it by the judiciary. [12] This Court should not deviate therefrom.
Further, it is undisputed that Ana Pascual, the tenant and private respondents mother, has an existing home lot and a house on
the subject property in which private respondent may take refuge while attending to his work. Curiously, despite its availability private
respondent chose to construct, without petitioners permission, a concrete house of his own thereby saving him the trouble of paying
appropriate rents. If the Court were to abide by the respondent courts inordinate pronouncement that private respondent is entitled
to maintain his own house then we will be condoning the deprivation of a landholders property without even a fraction of
compensation. It taxes the credulity of the Court, therefore, to insist that private respondents having a house of his own on the
property is merely incidental to the tenancy and to afford him the convenience of attending to the cultivation of the land for, in the
first place, he is not the tenant as he himself admits. Besides, the incidental use of his own house can very well be provided by the
existing house of his mother, who with her old and infirm condition, surely needs the attention and care of her children, one of whom
is herein private respondent. Be it emphasized that like the tenant the landholder is also entitled to the protection of the law as one
of the purposes of the Act is to afford adequate protection to the rights of BOTH tenants and landholders. [13] The policy of social
justice, we reiterate, is not intended to countenance wrongdoing simply because it is committed by the underprivileged. Compassion
for the poor, as we said in Galay, et. al. v. Court of Appeals, et. al. [14] is an imperative of every humane society but only when the
recipient is not a rascal claiming an undeserved privilege.
WHEREFORE, the petition is GRANTED. The part of the decision appealed from which is inconsistent herewith is REVERSED and
SET ASIDE. The decision of the Municipal Trial Court directing the private respondent Herminigildo Pascual to vacate the portion of
the landholding he occupies and to pay the petitioner attorneys fees in the amount of P10,000.00 and another sum of P500.00 monthly
from the filing of complaint is hereby REINSTATED.
Costs against private respondent.
SO ORDERED.

SECOND DIVISION

RAFAEL H. GALVEZ and KATHERINE L. GUY, G.R. No. 187919

Petitioners,

-versus-

HON. COURT OF APPEALS and ASIA UNITED

BANK,
Respondents.

x------------------------x
52

ASIA UNITED BANK,

Petitioner, G.R. No. 187979

-versus-

GILBERT G. GUY, PHILIP LEUNG, KATHERINE L. GUY,

RAFAEL H. GALVEZ and EUGENIO H. GALVEZ, JR.,
Respondents.

x--------------------------x

GILBERT G. GUY, PHILIP LEUNG and EUGENIO H. GALVEZ,

JR.,
Petitioners,
G.R. No. 188030

Present:

-versus- CARPIO, J.,

Chairperson,
BRION,
PEREZ,
ASIA UNITED BANK, SERENO, and
Respondent. REYES, JJ.

Promulgated:

April 25, 2012

x ----------------------------------------------------------------------------------------x

DECISION

PEREZ, J.:

THE FACTS
In 1999, Radio Marine Network (Smartnet) Inc. (RMSI) claiming to do business under the name Smartnet Philippines [1] and/or
Smartnet Philippines, Inc. (SPI),[2] applied for an Omnibus Credit Line for various credit facilities with Asia United Bank (AUB). To induce
AUB to extend the Omnibus Credit Line, RMSI, through its directors and officers, presented its Articles of Incorporation with its 400-
peso million capitalization and its congressional telecom franchise. RMSI was represented by the following officers and directors
occupying the following positions:

Gilbert Guy - Exec. V-Pres./Director

Philip Leung - Managing Director
Katherine Guy - Treasurer
Rafael Galvez - Executive Officer
Eugenio Galvez, Jr. - Chief Financial Officer/Comptroller

Satisfied with the credit worthiness of RMSI, AUB granted it a P250 million Omnibus Credit Line, under the name of Smartnet
Philippines, RMSIs Division. On 1 February 2000, the credit line was increased to P452 million pesos after a third-party real estate
mortgage by Goodland Company, Inc.,[3] an affiliate of Guy Group of Companies, in favor of Smartnet Philippines,[4] was offered to the
bank. Simultaneous to the increase of the Omibus Credit Line, RMSI submitted a proof of authority to open the Omnibus Credit Line
53

and peso and dollar accounts in the name of Smartnet Philippines, Inc., which Gilbert Guy, et al. represented as a division of RMSI,[5] as
evidenced by the letterhead used in its formal correspondences with the bank and the financial audit made by SGV & Co., an
independent accounting firm. Attached to this authority was the Amended Articles of Incorporation of RMSI, doing business under the
name of Smartnet Philippines, and the Secretarys Certificate of SPI authorizing its directors, Gilbert Guy and Philip Leung to transact
with AUB.[6] Prior to this major transaction, however, and, unknown to AUB, while RMSI was doing business under the name of
Smartnet Philippines, and that there was a division under the name Smartnet Philippines, Gilbert Guy, et al. formed a subsidiary
corporation, the SPI with a paid-up capital of only P62,500.00.

Believing that SPI is the same as Smartnet Philippines - the division of RMSI - AUB granted to it, among others, Irrevocable
Letter of Credit No. 990361 in the total sum of $29,300.00 in favor of Rohde & Schwarz Support Centre Asia Ptd. Ltd., which is the
subject of these consolidated petitions. To cover the liability of this Irrevocable Letter of Credit, Gilbert Guy executed Promissory Note
No. 010445 in behalf of SPI in favor of AUB. This promissory note was renewed twice, once, in the name of SPI (Promissory Note No.
011686), and last, in the name of Smartnet Philippines under Promissory Note No. 136131, bolstering AUBs belief that RMSIs directors
and officers consistently treated this letter of credit, among others, as obligations of RMSI.

When RMSIs obligations remained unpaid, AUB sent letters demanding payments. RMSI denied liability contending that the
transaction was incurred solely by SPI, a corporation which belongs to the Guy Group of Companies, but which has a separate and
distinct personality from RMSI. RMSI further claimed that while Smartnet Philippines is an RMSI division, SPI, is a subsidiary of RMSI,
and hence, is a separate entity.

Aggrieved, AUB filed a case of syndicated estafa under Article 315 (2) (a) of the Revised Penal Code in relation to Section 1 of
Presidential Decree (PD) No. 1689 against the interlocking directors of RMSI and SPI, namely, Gilbert G. Guy, Rafael H. Galvez, Philip
Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr., before the Office of the City Prosecutor of Pasig City.

AUB alleged that the directors of RMSI deceived it into believing that SPI was a division of RMSI, only to insist on its separate
juridical personality later on to escape from its liabilities with AUB. AUB contended that had it not been for the fraudulent scheme
employed by Gilbert Guy, et al., AUB would not have parted with its money, which, including the controversy subject of this petition,
amounted to hundreds of millions of pesos.
In a Resolution dated 3 April 2006,[7] the Prosecutor found probable cause to indict Gilbert G. Guy, et al. for estafa but
dismissed the charge of violation of PD No. 1689 against the same for insufficiency of evidence, thus:

WHEREFORE, it is recommended that respondents be charged for ESTAFA under Article 315, par. 2(a) of the
Revised Penal Code, and the attached information be filed with the Regional Trial Court in Pasig City, with a
recommended bail of P40,000.00 for each respondent.

It is further recommended that the charge of violation of P.D. 1689 against the said respondents be
dismissed for insufficiency of evidence.[8]

Accordingly, an Information dated 3 April 2006[9] was filed against Gilbert Guy, et al. with the Regional Trial Court of Pasig
City.
Both parties, i.e., the AUB and Gilbert Guy, et al., filed their respective Petitions for Review with the Department of Justice
(DOJ) assailing the 3 April 2006 Resolution of the Office of the City Prosecutor of Pasig City.
In a Resolution dated 15 August 2006,[10] the DOJ reversed the City Prosecutors Resolution and ordered the dismissal of
the estafa charges against Gilbert Guy, et al. for insufficiency of evidence.

The AUBs Motion for Reconsideration was denied, constraining it to assail the DOJ Resolution before the Court of Appeals
(CA).
54

The CA partially granted AUBs petition in a Decision dated 27 June 2008, thus:

WHEREFORE, the instant petition is GRANTED, finding probable cause against private respondents for the
crime of ESTAFA under Article 315, par 2 (a) of the Revised Penal Code. The assailed Resolution dated August 15,
2006 of the Department of Justice is REVERSED AND SET ASIDE, subject to our ruling that the private respondents
are not liable under P.D. 1689. The April 3, 2006 Resolution of Assistant City Prosecutor Paudac is
hereby REINSTATED.[11]

Aggrieved, Gilbert Guy, Philip Leung and Eugenio H. Galvez Jr. (in G.R. No. 188030) and separately, Rafael Galvez and Katherine
Guy (in G.R. No. 187919) filed the present petitions before this Court assailing the CA Decision which reinstated the City Prosecutors
Resolution indicting them of the crime of estafa. The AUB also filed its own petition before us, docketed as G.R. No. 187979, assailing
the Court of Appeals Decision for dismissing the charge in relation to Section 1 of PD No. 1689.

Hence, these consolidated petitions.

Gilbert Guy, et al. argue that this case is but a case for collection of sum of money, and, hence, civil in nature and that no
fraud or deceit was present at the onset of the transaction which gave rise to this controversy, an element indispensable for estafa to
prosper.[12]

AUB, on the other, insists that this controversy is within the scope of PD No. 1689, otherwise known as syndicated estafa. It
contends that Guy, et al., induced AUB to grant SPIs letter of credit to AUBs damage and prejudice by misleading AUB into believing
that SPI is one and the same entity as Smartnet Philippines which AUB granted an Omnibus Credit Transaction. After receiving and
profiting from the proceeds of the aforesaid letter of credit, Gilbert Guy, et al. denied and avoided liability therefrom by declaring that
the obligation should have been booked under SPI as RMSI never contracted, nor authorized the same. It is on this premise that AUB
accuses Gilbert Guy, et al. to have committed the crime of estafa under Article 315 (2) (a) of the Revised Penal Code in relation to PD
No. 1689.

At issue, therefore, is whether or not there is probable cause to prosecute Gilbert Guy, et al. for the crime of
syndicated estafa on the basis of fraudulent acts or fraudulent means employed to deceive AUB into releasing the proceeds of
Irrevocable Letter of Credit No. 990361 in favor of SPI.

Our Ruling

This controversy could have been just a simple case for collection of sum of money had it not been for the sophisticated
fraudulent scheme which Gilbert Guy, et al.employed in inducing AUB to part with its money.
Records show that on 17 February 1995, Radio Marine Network, Inc. (Radio Marine) amended its corporate name to what it
stands today Radio Marine Network (Smartnet), Inc. This was a month after organizing its subsidiary corporation the Smartnet
Philippines, Inc. with a capital of only P62,500.00.[13] A year earlier, Gilbert Guy, et al., established Smartnet Philippines as a division
of Radio Marine under which RMSI operated its business.

It was, however, only on 26 March 1998, when the Securities and Exchange Commission approved the amended corporate
name, and only in October 1999 did RMSI register Smartnet Philippines as its business name with the Department of Trade and
Industry.[14]

It is in this milieu that RMSI transacted business with AUB under the name Smartnet Philippines and/or SPI.

Article 315 (2) (a) of the Revised Penal Code provides:

55

Art. 315. Swindling (estafa) any person who shall defraud another by any of the means mentioned herein
below x x x :

xxxx

2. By means of any of the following false pretenses or fraudulent acts executed prior to or simultaneous with
the commission of the fraud:

(a) By using a fictitious name, or falsely pretending to possess power, influence, qualifications, property, credit,
agency, business or imaginary transactions; or by means of other similar deceits. x x x.

The elements of estafa by means of deceit are the following:

a. That there must be a false pretense, fraudulent act or fraudulent means;

b. That such false pretense, fraudulent act or fraudulent means must be made or executed prior to or
simultaneously with the commission of the fraud;
c. That the offended party must have relied on the false pretense, fraudulent act, or fraudulent means, that is,
he was induced to part with his money or property because of the false pretense, fraudulent act, or fraudulent
means;
d. That as a result thereof, the offended party suffered damage. [15]

First, Gilbert Guy, Philip Leung, Katherine Guy, Rafael Galvez and Eugene Galvez, Jr., interlocking directors of RMSI and SPI,
represented to AUB in their transactions that Smartnet Philippines and SPI were one and the same entity. While Eugene Galvez, Jr.
was not a director of SPI, he actively dealt with AUB in his capacity as RMSIs Chief Financial Officer/Comptroller by falsely representing
that SPI and RMSI were the same entity. Gilbert Guy, Philip Leung, Katherine Guy, Rafael Galvez, and Eugene Galvez, Jr. used the
business names Smartnet Philippines, RMSI, and SPI interchangeably and without any distinction. They successfully did this by using
the confusing similarity of RMSIs business name, i.e., Smartnet Philippines its division, and, Smartnet Philippines, Inc. the subsidiary
corporation. Further, they were able to hide the identity of SPI, by having almost the same directors as that of RMSI. In order to let it
appear that SPI is the same as that of Smartnet Philippines, they submitted in their application documents of RMSI, including its
Amended Articles of Incorporation,[16] third-party real estate mortgage of Goodland Company[17] in favor of Smartnet Philippines, and
audited annual financial statement of SGV & Co.[18] Gilbert Guy, et al. also used RMSI letterhead in their official communications with
the bank and the contents of these official communications[19]conclusively pointed to RMSI as the one which transacted with the bank.

These circumstances are all indicia of deceit. Deceit is the false representation of a matter of fact whether by words or
conduct, by false or misleading allegations, or by concealment of that which should have been disclosed which deceives or is intended
to deceive another so that he shall act upon it to his legal injury. [20]

Second, the intent to deceive AUB was manifest from the start. Gilbert Guy et al. laid down first all the necessary materials
they need for this deception before defrauding the bank by first establishing Smartnet Philippines as a division of Radio Marine under
which Radio Marine Network Inc. operated its business.[21] Then it organized a subsidiary corporation, the SPI, with a capital of
only P62,000.00.[22] Later, it changed the corporate name of Radio Marine Network Inc. into RMSI. [23]
Undoubtedly, deceit here was conceived in relation to Gilbert Guy, et al.s transaction with AUB. There was a plan,
documented in corporations papers, that led to the defraudation of the bank. The circumstances of the directors and officers acts in
inserting in Radio Marine the name of Smartnet; the creation of its division Smartnet Philippines; and its registration as business name
as Smartnet Philippines with the Department of Trade and Industry, together with the incorporation of its subsidiary, the SPI,
are indicia of a pre-conceived scheme to create this elaborate fraud, victimizing a banking institution, which perhaps, is the first of a
kind in Philippine business.
56

We emphasize that fraud in its general sense, is deemed to comprise anything calculated to deceive, including all acts,
omissions, and concealment involving a breach of legal duty or equitable duty, trust, or confidence justly reposed, resulting in damage
to another, or by which an undue and unconscientious advantage is taken of another.[24] It is a generic term embracing all multifarious
means which human ingenuity can device and which are resorted to by one individual to secure an advantage over another by false
suggestions or by suppression of truth and includes all surprise, trick, cunning, dissembling and any unfair way by which another is
cheated.[25]

As early as 1903, in U.S. v. Mendezona,[26] we held that an accused may be convicted for estafa if the deceit of false pretense
is committed prior to or simultaneous with fraud and is the efficient cause or primary consideration which induced the offended party
to part with his money or property.

Third, AUB would not have granted the Irrevocable Letter of Credit No. 990361, among others, had it known that SPI which
had only P62,500.00 paid-up capital and no assets, is a separate entity and not the division or business name of RMSI. Gilbert Guy, et
al. however, contends that the transaction subject in this controversy is a letter of credit and not a loan, hence, SPIs capital does not
matter.[27] This was also the contention of the DOJ in reversing the Resolution of the City Prosecutors Office of Pasig. The DOJ
contended that:

It is also noted that the subject transaction, one of the several series of transactions between complainant AUB and
SPI, is not a loan transaction. It is a letter of credit transaction intended to facilitate the importation of goods by SPI.
The allegation as to the lack of capitalization of SPI is therefore immaterial and irrelevant since it is a letter of credit
transaction. The seller gets paid only if it delivers the documents of title over the goods to the bank which issued the
letter of credit, while the buyer/importer acquires title to the goods once it reimburses the issuing bank. The
transaction secures the obligation of the buyer/importer to the issuing bank. [28]
It is true that ordinarily, in a letter of credit transaction, the bank merely substitutes its own promise to pay for the promise to pay of
one of its customers, who in turn promises to pay the bank the amount of funds mentioned in the letters of credit plus credit or
commitments fees mutually agreed upon. Once the issuing bank shall have paid the beneficiary after the latters compliance with the
terms of the letter of credit, the issuing bank is entitled to reimbursement for the amount it paid under the letter of credit. [29]

In the present case, however, no reimbursement was made outright, precisely because the letter of credit was secured by a
promissory note executed by SPI. The bank would have not agreed to this transaction had it not been deceived by Gilbert Guy, et
al. into believing the RMSI and SPI were one and the same entity. Guy and his cohorts acts in (1) securing the letter of credit guaranteed
by a promissory note in behalf of SPI; and, (2) their act of representing SPI as RMSIs Division, were indicia of fraudulent acts because
they fully well know, even before transacting with the bank, that: (a) SPI was a separate entity from Smartnet Philippines, the RMSIs
Division, which has the Omnibus Credit Line; and (b) despite this knowledge, they misrepresented to the bank that SPI is RMSIs
division. Had it not for this false representation, AUB would have not granted SPIs letter of credit to be secured with a promissory note
because SPI as a corporation has no credit line with AUB and SPI by its own, has no credit standing.
Fourth, it is not in dispute that the bank suffered damage, which, including this controversy, amounted to hundreds of millions
of pesos.

It is worth emphasizing that under Section 1, Rule 112 of the Revised Rules on Criminal Procedure, the function of a
preliminary investigation is to determine whether there is a sufficient ground to engender a well-grounded belief that a crime x x x
has been committed and that the respondent is probably guilty thereof and should be held for trial. [30]

A finding of probable cause needs only to rest on evidence showing that more likely than not, the accused committed the
[31]
crime. Preliminary investigation is not the occasion for the full and exhaustive display of the parties' evidence. [32] It is for the
presentation of such evidence only as may engender a well-founded belief that an offense has been committed and that the accused
is probably guilty thereof.[33] The validity and merits of a party's accusation or defense, as well as admissibility of testimonies and
evidence, are better ventilated during the trial proper. [34]
57

We, therefore, sustain the findings of the CA and the City Prosecutors Resolution finding that probable cause exists against
Gilbert Guy, et al. for the crime of estafa under Article 315 (2)(a) of the Revised Penal Code and that Gilbert Guy, et al. are probably
guilty thereof and should be held for trial. AUBs voluminous documents submitted to this Court overcome this difficulty and
established that there is sufficient ground to engender a well-grounded belief that a crime has been committed and that the
respondents are probably guilty thereof and should be held for trial.

Lest it be misunderstood, we reiterate that this Courts finding of probable cause is grounded on fraud committed through
deceit which surrounded Gilbert Guy, et al.transaction with AUB, thus, violating Article 315 (2) (a) of the Revised Penal Code; it is
neither their act of borrowing money and not paying them, nor their denial thereof, but their very act of deceiving AUB in order for
the latter to part with its money. As early as the Penal Code of Spain, which was enforced in the Philippines as early as 1887 until it
was replaced by the Revised Penal Code in 1932, the act of fraud through false pretenses or similar deceit was already being
punished. Article 335 of the Penal Code of Spain punished a person who defrauded another by falsely pretending to possess any
power, influence, qualification, property, credit, agency or business, or by means of similar deceit. [35]
Anent the issue as to whether or not Gilbert Guy, et al. should be charged for syndicated estafa in relation to Section 1 of PD
No. 1689, which states that:

SEC 1. Any person or persons who shall commit estafa or other forms of swindling as defined in Article 315
and 316 of the Revised Penal Code, as amended, shall be punished by life imprisonment to death if the swindling
(estafa) is committed by a syndicate consisting of five or more persons formed with the intention of carrying out the
unlawful or illegal act, transaction, enterprise or scheme, and the defraudation results in the misappropriation of
moneys contributed by stockholders, or members of rural banks, cooperatives, samahang nayon(s), or farmers
associations, or of funds solicited by corporations/ associations from the general public.

We hold that the afore-quoted law applies to the case at bar, for the following reasons:

Under Section 1 of PD No. 1689, the elements of syndicated estafa are: (a) estafa or other forms of swindling as defined in
Artilce 315 and 316 of the Revised Penal Code is committed; (b) the estafa or swindling is committed by a syndicate of five or more
persons; and (c) defraudation results in the misappropriation of moneys contributed by stockholders, or members of rural banks,
cooperatives, samahang nayon[s], or farmers associations or of funds solicited by corporations/associations from the general
public.[36]

First, as defined under Section 1 of PD No. 1689, a syndicate consists of five or more persons formed with the intention of
carrying out the unlawful or illegal act, transaction, enterprise or scheme. Five (5) accused, namely, Gilbert G. Guy, Rafael H. Galvez,
Philip Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr. were, (a) all involved in the formation of the entities used to defraud AUB;
and (b) they were the officers and directors, both of RMSI and SPI, whose conformities paved the way for AUB to grant the letter of
credit subject of this case, in AUBs honest belief that SPI, as Gilbert Guy, et al. represented, was a mere division of RMSI. As already
discussed, although Eugenio Galvez, Jr. was not a director of SPI, he, together with Gilbert Guy and Philip Leung, actively participated
in the scheme through their signed correspondences with the bank and their attendance in the meetings with executives of
AUB.[37] Rafael Galvez and Katherine Guy, on the other hand, were the directors of RMSI and SPI who caused and authorized Gilbert
Guy and Philip Leung to transact with AUB.[38]
Second, while these corporations were established presumably in accordance with law, it cannot be denied that Gilbert G.
Guy, Rafael H. Galvez, Philip Leung, Katherine L. Guy, and Eugenio H. Galvez, Jr. used these corporations to carry out the illegal and
unlawful act of misrepresenting SPI as a mere division of RMSI, and, despite knowing SPIs separate juridical personality, applied for a
letter of credit secured by SPIs promissory note, knowing fully that SPI has no credit line with AUB. The circumstances of the creation
of these entities and their dealings with the bank reveal this criminal intent to defraud and to deceive AUB.
Third, the fact that the defraudation of AUB resulted to misappropriation of the money which it solicited from the general
public in the form of deposits was substantially established.[39] Section 3.1 of the General Banking Law defines banks as entities
58

engaged in the lending of funds obtained in the form of deposits. The Old General Banking Act (R.A. No. 337) gave a fuller picture of
the basic banking function of obtaining funds from the public by way of deposits and the lending of these funds as follows:

Sec 2. Only entities duly authorized by the Monetary Board of the Central Bank may engage in the lending of funds
obtained from the public through the receipt of deposits of any kind, and all entities regularly conducting such
operations shall be considered as banking institutions, xxxx.
Gilbert Guy et al. want this Court to believe that AUB, being a commercial bank, is beyond the coverage of PD No. 1689. We
hold, however, that a bank is a corporation whose fund comes from the general public. P.D. No. 1689 does not distinguish the nature
of the corporation. It requires, rather, that the funds of such corporation should come from the general public. This is bolstered by the
third whereas clause of the quoted law which states that the same also applies to other corporations/associations operating on funds
solicited from the general public. This is precisely the very same scheme that PD No. 1689 contemplates that this species of estafa be
checked or at least be minimized by imposing capital punishment involving funds solicited by corporations/associations from the
general public because this erodes the confidence of the public in the banking and cooperative system, contravenes public interest
and constitutes economic sabotage that threatens the stability of the nation. [40]

Hence, for the stated reasons, we applied the law in People v. Balasa,[41] a non-stock/non-profit corporation the Panata
Foundation of the Philippines, Inc. We held that PD No. 1689 also applies to other corporations/associations operating on funds
solicited from the general public.
In People v. Romero,[42] we also applied the law to a stock corporation engaged in marketing, the Surigao San Andres
Industrial Development Corporation. Likewise, in People v. Menil,[43] we applied the law to another marketing firm known as ABM
Appliance and Upholstery.
In these cited cases, the accused used the legitimacy of their entities to perpetrate their unlawful and illegal acts. We see no
reason not to apply this law to a banking institution, a corporation imbued with public interest, when a clear reading of the PD 1689
reveals that it is within its coverage.

WHEREFORE, the Decision of the Court of Appeals dated 27 June 2008 in CA-G.R. SP No. 97160 is
hereby AFFIRMED with MODIFICATION that Gilbert G. Guy, Rafael H. Galvez, Philip Leung, Katherine L. Guy and Eugenio H. Galvez, Jr.
be charged for SYNDICATED ESTAFA under Article 315 (2) (a) of the Revised Penal Code in relation to Section 1 of Presidential Decree
No. 1689.

SO ORDERED.

G.R. No. 78742 July 14, 1989

ASSOCIATION OF SMALL LANDOWNERS IN THE PHILIPPINES, INC., JUANITO D. GOMEZ, GERARDO B. ALARCIO, FELIPE A. GUICO, JR.,
BERNARDO M. ALMONTE, CANUTO RAMIR B. CABRITO, ISIDRO T. GUICO, FELISA I. LLAMIDO, FAUSTO J. SALVA, REYNALDO G.
ESTRADA, FELISA C. BAUTISTA, ESMENIA J. CABE, TEODORO B. MADRIAGA, AUREA J. PRESTOSA, EMERENCIANA J. ISLA, FELICISIMA
C. ARRESTO, CONSUELO M. MORALES, BENJAMIN R. SEGISMUNDO, CIRILA A. JOSE & NAPOLEON S. FERRER, petitioners,
vs.
HONORABLE SECRETARY OF AGRARIAN REFORM, respondent.

G.R. No. 79310 July 14, 1989

ARSENIO AL. ACUNA, NEWTON JISON, VICTORINO FERRARIS, DENNIS JEREZA, HERMINIGILDO GUSTILO, PAULINO D. TOLENTINO
and PLANTERS' COMMITTEE, INC., Victorias Mill District, Victorias, Negros Occidental, petitioners,
vs.
JOKER ARROYO, PHILIP E. JUICO and PRESIDENTIAL AGRARIAN REFORM COUNCIL, respondents.

G.R. No. 79744 July 14, 1989

INOCENTES PABICO, petitioner,

vs.
HON. PHILIP E. JUICO, SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, HON. JOKER ARROYO, EXECUTIVE SECRETARY OF
59

THE OFFICE OF THE PRESIDENT, and Messrs. SALVADOR TALENTO, JAIME ABOGADO, CONRADO AVANCENA and ROBERTO
TAAY, respondents.

G.R. No. 79777 July 14, 1989

NICOLAS S. MANAAY and AGUSTIN HERMANO, JR., petitioners,

vs.
HON. PHILIP ELLA JUICO, as Secretary of Agrarian Reform, and LAND BANK OF THE PHILIPPINES, respondents.

CRUZ, J.:

In ancient mythology, Antaeus was a terrible giant who blocked and challenged Hercules for his life on his way to Mycenae after
performing his eleventh labor. The two wrestled mightily and Hercules flung his adversary to the ground thinking him dead, but
Antaeus rose even stronger to resume their struggle. This happened several times to Hercules' increasing amazement. Finally, as they
continued grappling, it dawned on Hercules that Antaeus was the son of Gaea and could never die as long as any part of his body was
touching his Mother Earth. Thus forewarned, Hercules then held Antaeus up in the air, beyond the reach of the sustaining soil, and
crushed him to death.

Mother Earth. The sustaining soil. The giver of life, without whose invigorating touch even the powerful Antaeus weakened and died.

The cases before us are not as fanciful as the foregoing tale. But they also tell of the elemental forces of life and death, of men and
women who, like Antaeus need the sustaining strength of the precious earth to stay alive.

"Land for the Landless" is a slogan that underscores the acute imbalance in the distribution of this precious resource among our
people. But it is more than a slogan. Through the brooding centuries, it has become a battle-cry dramatizing the increasingly urgent
demand of the dispossessed among us for a plot of earth as their place in the sun.

Recognizing this need, the Constitution in 1935 mandated the policy of social justice to "insure the well-being and economic security
of all the people," 1 especially the less privileged. In 1973, the new Constitution affirmed this goal adding specifically that "the State
shall regulate the acquisition, ownership, use, enjoyment and disposition of private property and equitably diffuse property ownership
and profits." 2 Significantly, there was also the specific injunction to "formulate and implement an agrarian reform program aimed at
emancipating the tenant from the bondage of the soil." 3

The Constitution of 1987 was not to be outdone. Besides echoing these sentiments, it also adopted one whole and separate Article
XIII on Social Justice and Human Rights, containing grandiose but undoubtedly sincere provisions for the uplift of the common people.
These include a call in the following words for the adoption by the State of an agrarian reform program:

SEC. 4. The State shall, by law, undertake an agrarian reform program founded on the right of farmers and regular
farmworkers, who are landless, to own directly or collectively the lands they till or, in the case of other farmworkers,
to receive a just share of the fruits thereof. To this end, the State shall encourage and undertake the just distribution
of all agricultural lands, subject to such priorities and reasonable retention limits as the Congress may prescribe,
taking into account ecological, developmental, or equity considerations and subject to the payment of just
compensation. In determining retention limits, the State shall respect the right of small landowners. The State shall
further provide incentives for voluntary land-sharing.

Earlier, in fact, R.A. No. 3844, otherwise known as the Agricultural Land Reform Code, had already been enacted by the Congress of
the Philippines on August 8, 1963, in line with the above-stated principles. This was substantially superseded almost a decade later by
P.D. No. 27, which was promulgated on October 21, 1972, along with martial law, to provide for the compulsory acquisition of private
lands for distribution among tenant-farmers and to specify maximum retention limits for landowners.

The people power revolution of 1986 did not change and indeed even energized the thrust for agrarian reform. Thus, on July 17, 1987,
President Corazon C. Aquino issued E.O. No. 228, declaring full land ownership in favor of the beneficiaries of P.D. No. 27 and providing
for the valuation of still unvalued lands covered by the decree as well as the manner of their payment. This was followed on July 22,
1987 by Presidential Proclamation No. 131, instituting a comprehensive agrarian reform program (CARP), and E.O. No. 229, providing
the mechanics for its implementation.

Subsequently, with its formal organization, the revived Congress of the Philippines took over legislative power from the President and
started its own deliberations, including extensive public hearings, on the improvement of the interests of farmers. The result, after
almost a year of spirited debate, was the enactment of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law
of 1988, which President Aquino signed on June 10, 1988. This law, while considerably changing the earlier mentioned enactments,
nevertheless gives them suppletory effect insofar as they are not inconsistent with its provisions. 4
60

The above-captioned cases have been consolidated because they involve common legal questions, including serious challenges to the
constitutionality of the several measures mentioned above. They will be the subject of one common discussion and resolution, The
different antecedents of each case will require separate treatment, however, and will first be explained hereunder.

G.R. No. 79777

Squarely raised in this petition is the constitutionality of P.D. No. 27, E.O. Nos. 228 and 229, and R.A. No. 6657.

The subjects of this petition are a 9-hectare riceland worked by four tenants and owned by petitioner Nicolas Manaay and his wife
and a 5-hectare riceland worked by four tenants and owned by petitioner Augustin Hermano, Jr. The tenants were declared full owners
of these lands by E.O. No. 228 as qualified farmers under P.D. No. 27.

The petitioners are questioning P.D. No. 27 and E.O. Nos. 228 and 229 on grounds inter alia of separation of powers, due process,
equal protection and the constitutional limitation that no private property shall be taken for public use without just compensation.

They contend that President Aquino usurped legislative power when she promulgated E.O. No. 228. The said measure is invalid also
for violation of Article XIII, Section 4, of the Constitution, for failure to provide for retention limits for small landowners. Moreover, it
does not conform to Article VI, Section 25(4) and the other requisites of a valid appropriation.

In connection with the determination of just compensation, the petitioners argue that the same may be made only by a court of justice
and not by the President of the Philippines. They invoke the recent cases of EPZA v. Dulay 5 andManotok v. National Food
Authority. 6 Moreover, the just compensation contemplated by the Bill of Rights is payable in money or in cash and not in the form of
bonds or other things of value.

In considering the rentals as advance payment on the land, the executive order also deprives the petitioners of their property rights
as protected by due process. The equal protection clause is also violated because the order places the burden of solving the agrarian
problems on the owners only of agricultural lands. No similar obligation is imposed on the owners of other properties.

The petitioners also maintain that in declaring the beneficiaries under P.D. No. 27 to be the owners of the lands occupied by them,
E.O. No. 228 ignored judicial prerogatives and so violated due process. Worse, the measure would not solve the agrarian problem
because even the small farmers are deprived of their lands and the retention rights guaranteed by the Constitution.

In his Comment, the Solicitor General stresses that P.D. No. 27 has already been upheld in the earlier cases ofChavez v.
Zobel, 7 Gonzales v. Estrella, 8 and Association of Rice and Corn Producers of the Philippines, Inc. v. The National Land Reform
Council. 9 The determination of just compensation by the executive authorities conformably to the formula prescribed under the
questioned order is at best initial or preliminary only. It does not foreclose judicial intervention whenever sought or warranted. At any
rate, the challenge to the order is premature because no valuation of their property has as yet been made by the Department of
Agrarian Reform. The petitioners are also not proper parties because the lands owned by them do not exceed the maximum retention
limit of 7 hectares.

Replying, the petitioners insist they are proper parties because P.D. No. 27 does not provide for retention limits on tenanted lands and
that in any event their petition is a class suit brought in behalf of landowners with landholdings below 24 hectares. They maintain that
the determination of just compensation by the administrative authorities is a final ascertainment. As for the cases invoked by the
public respondent, the constitutionality of P.D. No. 27 was merely assumed in Chavez, while what was decided in Gonzales was the
validity of the imposition of martial law.

In the amended petition dated November 22, 1588, it is contended that P.D. No. 27, E.O. Nos. 228 and 229 (except Sections 20 and
21) have been impliedly repealed by R.A. No. 6657. Nevertheless, this statute should itself also be declared unconstitutional because
it suffers from substantially the same infirmities as the earlier measures.

A petition for intervention was filed with leave of court on June 1, 1988 by Vicente Cruz, owner of a 1. 83- hectare land, who
complained that the DAR was insisting on the implementation of P.D. No. 27 and E.O. No. 228 despite a compromise agreement he
had reached with his tenant on the payment of rentals. In a subsequent motion dated April 10, 1989, he adopted the allegations in
the basic amended petition that the above- mentioned enactments have been impliedly repealed by R.A. No. 6657.

G.R. No. 79310

The petitioners herein are landowners and sugar planters in the Victorias Mill District, Victorias, Negros Occidental. Co-petitioner
Planters' Committee, Inc. is an organization composed of 1,400 planter-members. This petition seeks to prohibit the implementation
of Proc. No. 131 and E.O. No. 229.

The petitioners claim that the power to provide for a Comprehensive Agrarian Reform Program as decreed by the Constitution belongs
to Congress and not the President. Although they agree that the President could exercise legislative power until the Congress was
convened, she could do so only to enact emergency measures during the transition period. At that, even assuming that the interim
legislative power of the President was properly exercised, Proc. No. 131 and E.O. No. 229 would still have to be annulled for violating
the constitutional provisions on just compensation, due process, and equal protection.
61

They also argue that under Section 2 of Proc. No. 131 which provides:

Agrarian Reform Fund.-There is hereby created a special fund, to be known as the Agrarian Reform Fund, an initial amount of FIFTY
BILLION PESOS (P50,000,000,000.00) to cover the estimated cost of the Comprehensive Agrarian Reform Program from 1987 to 1992
which shall be sourced from the receipts of the sale of the assets of the Asset Privatization Trust and Receipts of sale of ill-gotten
wealth received through the Presidential Commission on Good Government and such other sources as government may deem
appropriate. The amounts collected and accruing to this special fund shall be considered automatically appropriated for the purpose
authorized in this Proclamation the amount appropriated is in futuro, not in esse. The money needed to cover the cost of the
contemplated expropriation has yet to be raised and cannot be appropriated at this time.

Furthermore, they contend that taking must be simultaneous with payment of just compensation as it is traditionally understood, i.e.,
with money and in full, but no such payment is contemplated in Section 5 of the E.O. No. 229. On the contrary, Section 6, thereof
provides that the Land Bank of the Philippines "shall compensate the landowner in an amount to be established by the government,
which shall be based on the owner's declaration of current fair market value as provided in Section 4 hereof, but subject to certain
controls to be defined and promulgated by the Presidential Agrarian Reform Council." This compensation may not be paid fully in
money but in any of several modes that may consist of part cash and part bond, with interest, maturing periodically, or direct payment
in cash or bond as may be mutually agreed upon by the beneficiary and the landowner or as may be prescribed or approved by the
PARC.

The petitioners also argue that in the issuance of the two measures, no effort was made to make a careful study of the sugar planters'
situation. There is no tenancy problem in the sugar areas that can justify the application of the CARP to them. To the extent that the
sugar planters have been lumped in the same legislation with other farmers, although they are a separate group with problems
exclusively their own, their right to equal protection has been violated.

A motion for intervention was filed on August 27,1987 by the National Federation of Sugarcane Planters (NASP) which claims a
membership of at least 20,000 individual sugar planters all over the country. On September 10, 1987, another motion for intervention
was filed, this time by Manuel Barcelona, et al., representing coconut and riceland owners. Both motions were granted by the Court.

NASP alleges that President Aquino had no authority to fund the Agrarian Reform Program and that, in any event, the appropriation
is invalid because of uncertainty in the amount appropriated. Section 2 of Proc. No. 131 and Sections 20 and 21 of E.O. No. 229 provide
for an initial appropriation of fifty billion pesos and thus specifies the minimum rather than the maximum authorized amount. This is
not allowed. Furthermore, the stated initial amount has not been certified to by the National Treasurer as actually available.

Two additional arguments are made by Barcelona, to wit, the failure to establish by clear and convincing evidence the necessity for
the exercise of the powers of eminent domain, and the violation of the fundamental right to own property.

The petitioners also decry the penalty for non-registration of the lands, which is the expropriation of the said land for an amount equal
to the government assessor's valuation of the land for tax purposes. On the other hand, if the landowner declares his own valuation
he is unjustly required to immediately pay the corresponding taxes on the land, in violation of the uniformity rule.

In his consolidated Comment, the Solicitor General first invokes the presumption of constitutionality in favor of Proc. No. 131 and E.O.
No. 229. He also justifies the necessity for the expropriation as explained in the "whereas" clauses of the Proclamation and submits
that, contrary to the petitioner's contention, a pilot project to determine the feasibility of CARP and a general survey on the people's
opinion thereon are not indispensable prerequisites to its promulgation.

On the alleged violation of the equal protection clause, the sugar planters have failed to show that they belong to a different class and
should be differently treated. The Comment also suggests the possibility of Congress first distributing public agricultural lands and
scheduling the expropriation of private agricultural lands later. From this viewpoint, the petition for prohibition would be premature.

The public respondent also points out that the constitutional prohibition is against the payment of public money without the
corresponding appropriation. There is no rule that only money already in existence can be the subject of an appropriation law. Finally,
the earmarking of fifty billion pesos as Agrarian Reform Fund, although denominated as an initial amount, is actually the maximum
sum appropriated. The word "initial" simply means that additional amounts may be appropriated later when necessary.

On April 11, 1988, Prudencio Serrano, a coconut planter, filed a petition on his own behalf, assailing the constitutionality of E.O. No.
229. In addition to the arguments already raised, Serrano contends that the measure is unconstitutional because:

(1) Only public lands should be included in the CARP;

(2) E.O. No. 229 embraces more than one subject which is not expressed in the title;

(3) The power of the President to legislate was terminated on July 2, 1987; and

(4) The appropriation of a P50 billion special fund from the National Treasury did not originate from the House of
Representatives.
62

G.R. No. 79744

The petitioner alleges that the then Secretary of Department of Agrarian Reform, in violation of due process and the requirement for
just compensation, placed his landholding under the coverage of Operation Land Transfer. Certificates of Land Transfer were
subsequently issued to the private respondents, who then refused payment of lease rentals to him.

On September 3, 1986, the petitioner protested the erroneous inclusion of his small landholding under Operation Land transfer and
asked for the recall and cancellation of the Certificates of Land Transfer in the name of the private respondents. He claims that on
December 24, 1986, his petition was denied without hearing. On February 17, 1987, he filed a motion for reconsideration, which had
not been acted upon when E.O. Nos. 228 and 229 were issued. These orders rendered his motion moot and academic because they
directly effected the transfer of his land to the private respondents.

The petitioner now argues that:

(1) E.O. Nos. 228 and 229 were invalidly issued by the President of the Philippines.

(2) The said executive orders are violative of the constitutional provision that no private property shall be taken
without due process or just compensation.

(3) The petitioner is denied the right of maximum retention provided for under the 1987 Constitution.

The petitioner contends that the issuance of E.0. Nos. 228 and 229 shortly before Congress convened is anomalous and arbitrary,
besides violating the doctrine of separation of powers. The legislative power granted to the President under the Transitory Provisions
refers only to emergency measures that may be promulgated in the proper exercise of the police power.

The petitioner also invokes his rights not to be deprived of his property without due process of law and to the retention of his small
parcels of riceholding as guaranteed under Article XIII, Section 4 of the Constitution. He likewise argues that, besides denying him just
compensation for his land, the provisions of E.O. No. 228 declaring that:

Lease rentals paid to the landowner by the farmer-beneficiary after October 21, 1972 shall be considered as advance
payment for the land.

is an unconstitutional taking of a vested property right. It is also his contention that the inclusion of even small landowners in the
program along with other landowners with lands consisting of seven hectares or more is undemocratic.

In his Comment, the Solicitor General submits that the petition is premature because the motion for reconsideration filed with the
Minister of Agrarian Reform is still unresolved. As for the validity of the issuance of E.O. Nos. 228 and 229, he argues that they were
enacted pursuant to Section 6, Article XVIII of the Transitory Provisions of the 1987 Constitution which reads:

The incumbent president shall continue to exercise legislative powers until the first Congress is convened.

On the issue of just compensation, his position is that when P.D. No. 27 was promulgated on October 21. 1972, the tenant-farmer of
agricultural land was deemed the owner of the land he was tilling. The leasehold rentals paid after that date should therefore be
considered amortization payments.

In his Reply to the public respondents, the petitioner maintains that the motion he filed was resolved on December 14, 1987. An
appeal to the Office of the President would be useless with the promulgation of E.O. Nos. 228 and 229, which in effect sanctioned the
validity of the public respondent's acts.

G.R. No. 78742

The petitioners in this case invoke the right of retention granted by P.D. No. 27 to owners of rice and corn lands not exceeding seven
hectares as long as they are cultivating or intend to cultivate the same. Their respective lands do not exceed the statutory limit but
are occupied by tenants who are actually cultivating such lands.

According to P.D. No. 316, which was promulgated in implementation of P.D. No. 27:

No tenant-farmer in agricultural lands primarily devoted to rice and corn shall be ejected or removed from his
farmholding until such time as the respective rights of the tenant- farmers and the landowner shall have been
determined in accordance with the rules and regulations implementing P.D. No. 27.

The petitioners claim they cannot eject their tenants and so are unable to enjoy their right of retention because the Department of
Agrarian Reform has so far not issued the implementing rules required under the above-quoted decree. They therefore ask the Court
for a writ of mandamus to compel the respondent to issue the said rules.
63

In his Comment, the public respondent argues that P.D. No. 27 has been amended by LOI 474 removing any right of retention from
persons who own other agricultural lands of more than 7 hectares in aggregate area or lands used for residential, commercial,
industrial or other purposes from which they derive adequate income for their family. And even assuming that the petitioners do not
fall under its terms, the regulations implementing P.D. No. 27 have already been issued, to wit, the Memorandum dated July 10, 1975
(Interim Guidelines on Retention by Small Landowners, with an accompanying Retention Guide Table), Memorandum Circular No. 11
dated April 21, 1978, (Implementation Guidelines of LOI No. 474), Memorandum Circular No. 18-81 dated December 29,1981
(Clarificatory Guidelines on Coverage of P.D. No. 27 and Retention by Small Landowners), and DAR Administrative Order No. 1, series
of 1985 (Providing for a Cut-off Date for Landowners to Apply for Retention and/or to Protest the Coverage of their Landholdings
under Operation Land Transfer pursuant to P.D. No. 27). For failure to file the corresponding applications for retention under these
measures, the petitioners are now barred from invoking this right.

The public respondent also stresses that the petitioners have prematurely initiated this case notwithstanding the pendency of their
appeal to the President of the Philippines. Moreover, the issuance of the implementing rules, assuming this has not yet been done,
involves the exercise of discretion which cannot be controlled through the writ of mandamus. This is especially true if this function is
entrusted, as in this case, to a separate department of the government.

In their Reply, the petitioners insist that the above-cited measures are not applicable to them because they do not own more than
seven hectares of agricultural land. Moreover, assuming arguendo that the rules were intended to cover them also, the said measures
are nevertheless not in force because they have not been published as required by law and the ruling of this Court in Tanada v.
Tuvera.10 As for LOI 474, the same is ineffective for the additional reason that a mere letter of instruction could not have repealed the
presidential decree.

Although holding neither purse nor sword and so regarded as the weakest of the three departments of the government, the judiciary
is nonetheless vested with the power to annul the acts of either the legislative or the executive or of both when not conformable to
the fundamental law. This is the reason for what some quarters call the doctrine of judicial supremacy. Even so, this power is not
lightly assumed or readily exercised. The doctrine of separation of powers imposes upon the courts a proper restraint, born of the
nature of their functions and of their respect for the other departments, in striking down the acts of the legislative and the executive
as unconstitutional. The policy, indeed, is a blend of courtesy and caution. To doubt is to sustain. The theory is that before the act was
done or the law was enacted, earnest studies were made by Congress or the President, or both, to insure that the Constitution would
not be breached.

In addition, the Constitution itself lays down stringent conditions for a declaration of unconstitutionality, requiring therefor the
concurrence of a majority of the members of the Supreme Court who took part in the deliberations and voted on the issue during
their session en banc.11 And as established by judge made doctrine, the Court will assume jurisdiction over a constitutional question
only if it is shown that the essential requisites of a judicial inquiry into such a question are first satisfied. Thus, there must be an actual
case or controversy involving a conflict of legal rights susceptible of judicial determination, the constitutional question must have been
opportunely raised by the proper party, and the resolution of the question is unavoidably necessary to the decision of the case itself. 12

With particular regard to the requirement of proper party as applied in the cases before us, we hold that the same is satisfied by the
petitioners and intervenors because each of them has sustained or is in danger of sustaining an immediate injury as a result of the
acts or measures complained of. 13 And even if, strictly speaking, they are not covered by the definition, it is still within the wide
discretion of the Court to waive the requirement and so remove the impediment to its addressing and resolving the serious
constitutional questions raised.

In the first Emergency Powers Cases, 14 ordinary citizens and taxpayers were allowed to question the constitutionality of several
executive orders issued by President Quirino although they were invoking only an indirect and general interest shared in common
with the public. The Court dismissed the objection that they were not proper parties and ruled that "the transcendental importance
to the public of these cases demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of
procedure." We have since then applied this exception in many other cases. 15

The other above-mentioned requisites have also been met in the present petitions.

In must be stressed that despite the inhibitions pressing upon the Court when confronted with constitutional issues like the ones now
before it, it will not hesitate to declare a law or act invalid when it is convinced that this must be done. In arriving at this conclusion,
its only criterion will be the Constitution as God and its conscience give it the light to probe its meaning and discover its purpose.
Personal motives and political considerations are irrelevancies that cannot influence its decision. Blandishment is as ineffectual as
intimidation.

For all the awesome power of the Congress and the Executive, the Court will not hesitate to "make the hammer fall, and heavily," to
use Justice Laurel's pithy language, where the acts of these departments, or of any public official, betray the people's will as expressed
in the Constitution.

It need only be added, to borrow again the words of Justice Laurel, that —
64

... when the judiciary mediates to allocate constitutional boundaries, it does not assert any superiority over the other
departments; it does not in reality nullify or invalidate an act of the Legislature, but only asserts the solemn and
sacred obligation assigned to it by the Constitution to determine conflicting claims of authority under the
Constitution and to establish for the parties in an actual controversy the rights which that instrument secures and
guarantees to them. This is in truth all that is involved in what is termed "judicial supremacy" which properly is the
power of judicial review under the Constitution. 16

The cases before us categorically raise constitutional questions that this Court must categorically resolve. And so we shall.

II

We proceed first to the examination of the preliminary issues before resolving the more serious challenges to the constitutionality of
the several measures involved in these petitions.

The promulgation of P.D. No. 27 by President Marcos in the exercise of his powers under martial law has already been sustained
in Gonzales v. Estrella and we find no reason to modify or reverse it on that issue. As for the power of President Aquino to promulgate
Proc. No. 131 and E.O. Nos. 228 and 229, the same was authorized under Section 6 of the Transitory Provisions of the 1987
Constitution, quoted above.

The said measures were issued by President Aquino before July 27, 1987, when the Congress of the Philippines was formally convened
and took over legislative power from her. They are not "midnight" enactments intended to pre-empt the legislature because E.O. No.
228 was issued on July 17, 1987, and the other measures, i.e., Proc. No. 131 and E.O. No. 229, were both issued on July 22, 1987.
Neither is it correct to say that these measures ceased to be valid when she lost her legislative power for, like any statute, they continue
to be in force unless modified or repealed by subsequent law or declared invalid by the courts. A statute does not ipso facto become
inoperative simply because of the dissolution of the legislature that enacted it. By the same token, President Aquino's loss of legislative
power did not have the effect of invalidating all the measures enacted by her when and as long as she possessed it.

Significantly, the Congress she is alleged to have undercut has not rejected but in fact substantially affirmed the challenged measures
and has specifically provided that they shall be suppletory to R.A. No. 6657 whenever not inconsistent with its provisions. 17 Indeed,
some portions of the said measures, like the creation of the P50 billion fund in Section 2 of Proc. No. 131, and Sections 20 and 21 of
E.O. No. 229, have been incorporated by reference in the CARP Law. 18

That fund, as earlier noted, is itself being questioned on the ground that it does not conform to the requirements of a valid
appropriation as specified in the Constitution. Clearly, however, Proc. No. 131 is not an appropriation measure even if it does provide
for the creation of said fund, for that is not its principal purpose. An appropriation law is one the primary and specific purpose of which
is to authorize the release of public funds from the treasury. 19 The creation of the fund is only incidental to the main objective of the
proclamation, which is agrarian reform.

It should follow that the specific constitutional provisions invoked, to wit, Section 24 and Section 25(4) of Article VI, are not applicable.
With particular reference to Section 24, this obviously could not have been complied with for the simple reason that the House of
Representatives, which now has the exclusive power to initiate appropriation measures, had not yet been convened when the
proclamation was issued. The legislative power was then solely vested in the President of the Philippines, who embodied, as it were,
both houses of Congress.

The argument of some of the petitioners that Proc. No. 131 and E.O. No. 229 should be invalidated because they do not provide for
retention limits as required by Article XIII, Section 4 of the Constitution is no longer tenable. R.A. No. 6657 does provide for such limits
now in Section 6 of the law, which in fact is one of its most controversial provisions. This section declares:

Retention Limits. — Except as otherwise provided in this Act, no person may own or retain, directly or indirectly, any
public or private agricultural land, the size of which shall vary according to factors governing a viable family-sized
farm, such as commodity produced, terrain, infrastructure, and soil fertility as determined by the Presidential
Agrarian Reform Council (PARC) created hereunder, but in no case shall retention by the landowner exceed five (5)
hectares. Three (3) hectares may be awarded to each child of the landowner, subject to the following qualifications:
(1) that he is at least fifteen (15) years of age; and (2) that he is actually tilling the land or directly managing the farm;
Provided, That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep
the area originally retained by them thereunder, further, That original homestead grantees or direct compulsory
heirs who still own the original homestead at the time of the approval of this Act shall retain the same areas as long
as they continue to cultivate said homestead.

The argument that E.O. No. 229 violates the constitutional requirement that a bill shall have only one subject, to be expressed in its
title, deserves only short attention. It is settled that the title of the bill does not have to be a catalogue of its contents and will suffice
if the matters embodied in the text are relevant to each other and may be inferred from the title. 20

The Court wryly observes that during the past dictatorship, every presidential issuance, by whatever name it was called, had the force
and effect of law because it came from President Marcos. Such are the ways of despots. Hence, it is futile to argue, as the petitioners
65

do in G.R. No. 79744, that LOI 474 could not have repealed P.D. No. 27 because the former was only a letter of instruction. The
important thing is that it was issued by President Marcos, whose word was law during that time.

But for all their peremptoriness, these issuances from the President Marcos still had to comply with the requirement for publication
as this Court held in Tanada v. Tuvera. 21 Hence, unless published in the Official Gazette in accordance with Article 2 of the Civil Code,
they could not have any force and effect if they were among those enactments successfully challenged in that case. LOI 474 was
published, though, in the Official Gazette dated November 29,1976.)

Finally, there is the contention of the public respondent in G.R. No. 78742 that the writ of mandamus cannot issue to compel the
performance of a discretionary act, especially by a specific department of the government. That is true as a general proposition but is
subject to one important qualification. Correctly and categorically stated, the rule is that mandamus will lie to compel the discharge
of the discretionary duty itself but not to control the discretion to be exercised. In other words, mandamus can issue to require action
only but not specific action.

Whenever a duty is imposed upon a public official and an unnecessary and unreasonable delay in the exercise of
such duty occurs, if it is a clear duty imposed by law, the courts will intervene by the extraordinary legal remedy of
mandamus to compel action. If the duty is purely ministerial, the courts will require specific action. If the duty is
purely discretionary, the courts by mandamus will require action only. For example, if an inferior court, public
official, or board should, for an unreasonable length of time, fail to decide a particular question to the great
detriment of all parties concerned, or a court should refuse to take jurisdiction of a cause when the law clearly gave
it jurisdiction mandamus will issue, in the first case to require a decision, and in the second to require that jurisdiction
be taken of the cause. 22

And while it is true that as a rule the writ will not be proper as long as there is still a plain, speedy and adequate remedy available from
the administrative authorities, resort to the courts may still be permitted if the issue raised is a question of law. 23

III

There are traditional distinctions between the police power and the power of eminent domain that logically preclude the application
of both powers at the same time on the same subject. In the case of City of Baguio v. NAWASA, 24for example, where a law required
the transfer of all municipal waterworks systems to the NAWASA in exchange for its assets of equivalent value, the Court held that the
power being exercised was eminent domain because the property involved was wholesome and intended for a public use. Property
condemned under the police power is noxious or intended for a noxious purpose, such as a building on the verge of collapse, which
should be demolished for the public safety, or obscene materials, which should be destroyed in the interest of public morals. The
confiscation of such property is not compensable, unlike the taking of property under the power of expropriation, which requires the
payment of just compensation to the owner.

In the case of Pennsylvania Coal Co. v. Mahon, 25 Justice Holmes laid down the limits of the police power in a famous aphorism: "The
general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a
taking." The regulation that went "too far" was a law prohibiting mining which might cause the subsidence of structures for human
habitation constructed on the land surface. This was resisted by a coal company which had earlier granted a deed to the land over its
mine but reserved all mining rights thereunder, with the grantee assuming all risks and waiving any damage claim. The Court held the
law could not be sustained without compensating the grantor. Justice Brandeis filed a lone dissent in which he argued that there was
a valid exercise of the police power. He said:

Every restriction upon the use of property imposed in the exercise of the police power deprives the owner of some
right theretofore enjoyed, and is, in that sense, an abridgment by the State of rights in property without making
compensation. But restriction imposed to protect the public health, safety or morals from dangers threatened is not
a taking. The restriction here in question is merely the prohibition of a noxious use. The property so restricted
remains in the possession of its owner. The state does not appropriate it or make any use of it. The state merely
prevents the owner from making a use which interferes with paramount rights of the public. Whenever the use
prohibited ceases to be noxious — as it may because of further changes in local or social conditions — the restriction
will have to be removed and the owner will again be free to enjoy his property as heretofore.

Recent trends, however, would indicate not a polarization but a mingling of the police power and the power of eminent domain, with
the latter being used as an implement of the former like the power of taxation. The employment of the taxing power to achieve a
police purpose has long been accepted. 26 As for the power of expropriation, Prof. John J. Costonis of the University of Illinois College
of Law (referring to the earlier case of Euclid v. Ambler Realty Co., 272 US 365, which sustained a zoning law under the police power)
makes the following significant remarks:

Euclid, moreover, was decided in an era when judges located the Police and eminent domain powers on different
planets. Generally speaking, they viewed eminent domain as encompassing public acquisition of private property
for improvements that would be available for public use," literally construed. To the police power, on the other
hand, they assigned the less intrusive task of preventing harmful externalities a point reflected in the Euclid opinion's
reliance on an analogy to nuisance law to bolster its support of zoning. So long as suppression of a privately authored
harm bore a plausible relation to some legitimate "public purpose," the pertinent measure need have afforded no
compensation whatever. With the progressive growth of government's involvement in land use, the distance
66

between the two powers has contracted considerably. Today government often employs eminent domain
interchangeably with or as a useful complement to the police power-- a trend expressly approved in the Supreme
Court's 1954 decision in Berman v. Parker, which broadened the reach of eminent domain's "public use" test to
match that of the police power's standard of "public purpose." 27

The Berman case sustained a redevelopment project and the improvement of blighted areas in the District of Columbia as a proper
exercise of the police power. On the role of eminent domain in the attainment of this purpose, Justice Douglas declared:

If those who govern the District of Columbia decide that the Nation's Capital should be beautiful as well as sanitary,
there is nothing in the Fifth Amendment that stands in the way.

Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is
clear.

For the power of eminent domain is merely the means to the end. 28

In Penn Central Transportation Co. v. New York City, 29 decided by a 6-3 vote in 1978, the U.S Supreme Court sustained the respondent's
Landmarks Preservation Law under which the owners of the Grand Central Terminal had not been allowed to construct a multi-story
office building over the Terminal, which had been designated a historic landmark. Preservation of the landmark was held to be a valid
objective of the police power. The problem, however, was that the owners of the Terminal would be deprived of the right to use the
airspace above it although other landowners in the area could do so over their respective properties. While insisting that there was
here no taking, the Court nonetheless recognized certain compensatory rights accruing to Grand Central Terminal which it said would
"undoubtedly mitigate" the loss caused by the regulation. This "fair compensation," as he called it, was explained by Prof. Costonis in
this wise:

In return for retaining the Terminal site in its pristine landmark status, Penn Central was authorized to transfer to neighboring
properties the authorized but unused rights accruing to the site prior to the Terminal's designation as a landmark — the rights which
would have been exhausted by the 59-story building that the city refused to countenance atop the Terminal. Prevailing bulk
restrictions on neighboring sites were proportionately relaxed, theoretically enabling Penn Central to recoup its losses at the Terminal
site by constructing or selling to others the right to construct larger, hence more profitable buildings on the transferee sites. 30

The cases before us present no knotty complication insofar as the question of compensable taking is concerned. To the extent that
the measures under challenge merely prescribe retention limits for landowners, there is an exercise of the police power for the
regulation of private property in accordance with the Constitution. But where, to carry out such regulation, it becomes necessary to
deprive such owners of whatever lands they may own in excess of the maximum area allowed, there is definitely a taking under the
power of eminent domain for which payment of just compensation is imperative. The taking contemplated is not a mere limitation of
the use of the land. What is required is the surrender of the title to and the physical possession of the said excess and all beneficial
rights accruing to the owner in favor of the farmer-beneficiary. This is definitely an exercise not of the police power but of the power
of eminent domain.

Whether as an exercise of the police power or of the power of eminent domain, the several measures before us are challenged as
violative of the due process and equal protection clauses.

The challenge to Proc. No. 131 and E.O. Nos. 228 and 299 on the ground that no retention limits are prescribed has already been
discussed and dismissed. It is noted that although they excited many bitter exchanges during the deliberation of the CARP Law in
Congress, the retention limits finally agreed upon are, curiously enough, not being questioned in these petitions. We therefore do not
discuss them here. The Court will come to the other claimed violations of due process in connection with our examination of the
adequacy of just compensation as required under the power of expropriation.

The argument of the small farmers that they have been denied equal protection because of the absence of retention limits has also
become academic under Section 6 of R.A. No. 6657. Significantly, they too have not questioned the area of such limits. There is also
the complaint that they should not be made to share the burden of agrarian reform, an objection also made by the sugar planters on
the ground that they belong to a particular class with particular interests of their own. However, no evidence has been submitted to
the Court that the requisites of a valid classification have been violated.

Classification has been defined as the grouping of persons or things similar to each other in certain particulars and different from each
other in these same particulars. 31 To be valid, it must conform to the following requirements: (1) it must be based on substantial
distinctions; (2) it must be germane to the purposes of the law; (3) it must not be limited to existing conditions only; and (4) it must
apply equally to all the members of the class. 32 The Court finds that all these requisites have been met by the measures here
challenged as arbitrary and discriminatory.

Equal protection simply means that all persons or things similarly situated must be treated alike both as to the rights conferred and
the liabilities imposed. 33 The petitioners have not shown that they belong to a different class and entitled to a different treatment.
The argument that not only landowners but also owners of other properties must be made to share the burden of implementing land
reform must be rejected. There is a substantial distinction between these two classes of owners that is clearly visible except to those
who will not see. There is no need to elaborate on this matter. In any event, the Congress is allowed a wide leeway in providing for a
67

valid classification. Its decision is accorded recognition and respect by the courts of justice except only where its discretion is abused
to the detriment of the Bill of Rights.

It is worth remarking at this juncture that a statute may be sustained under the police power only if there is a concurrence of the
lawful subject and the lawful method. Put otherwise, the interests of the public generally as distinguished from those of a particular
class require the interference of the State and, no less important, the means employed are reasonably necessary for the attainment
of the purpose sought to be achieved and not unduly oppressive upon individuals. 34 As the subject and purpose of agrarian reform
have been laid down by the Constitution itself, we may say that the first requirement has been satisfied. What remains to be examined
is the validity of the method employed to achieve the constitutional goal.

One of the basic principles of the democratic system is that where the rights of the individual are concerned, the end does not justify
the means. It is not enough that there be a valid objective; it is also necessary that the means employed to pursue it be in keeping
with the Constitution. Mere expediency will not excuse constitutional shortcuts. There is no question that not even the strongest
moral conviction or the most urgent public need, subject only to a few notable exceptions, will excuse the bypassing of an individual's
rights. It is no exaggeration to say that a, person invoking a right guaranteed under Article III of the Constitution is a majority of one
even as against the rest of the nation who would deny him that right.

That right covers the person's life, his liberty and his property under Section 1 of Article III of the Constitution. With regard to his
property, the owner enjoys the added protection of Section 9, which reaffirms the familiar rule that private property shall not be taken
for public use without just compensation.

This brings us now to the power of eminent domain.

IV

Eminent domain is an inherent power of the State that enables it to forcibly acquire private lands intended for public
use upon payment of just compensation to the owner. Obviously, there is no need to expropriate where the owner
is willing to sell under terms also acceptable to the purchaser, in which case an ordinary deed of sale may be agreed
upon by the parties. 35 It is only where the owner is unwilling to sell, or cannot accept the price or other conditions
offered by the vendee, that the power of eminent domain will come into play to assert the paramount authority of
the State over the interests of the property owner. Private rights must then yield to the irresistible demands of the
public interest on the time-honored justification, as in the case of the police power, that the welfare of the people
is the supreme law.

But for all its primacy and urgency, the power of expropriation is by no means absolute (as indeed no power is absolute). The limitation
is found in the constitutional injunction that "private property shall not be taken for public use without just compensation" and in the
abundant jurisprudence that has evolved from the interpretation of this principle. Basically, the requirements for a proper exercise of
the power are: (1) public use and (2) just compensation.

Let us dispose first of the argument raised by the petitioners in G.R. No. 79310 that the State should first distribute public agricultural
lands in the pursuit of agrarian reform instead of immediately disturbing property rights by forcibly acquiring private agricultural lands.
Parenthetically, it is not correct to say that only public agricultural lands may be covered by the CARP as the Constitution calls for "the
just distribution of all agricultural lands." In any event, the decision to redistribute private agricultural lands in the manner prescribed
by the CARP was made by the legislative and executive departments in the exercise of their discretion. We are not justified in reviewing
that discretion in the absence of a clear showing that it has been abused.

A becoming courtesy admonishes us to respect the decisions of the political departments when they decide what is known as the
political question. As explained by Chief Justice Concepcion in the case of Tañada v. Cuenco: 36

The term "political question" connotes what it means in ordinary parlance, namely, a question of policy. It refers to
"those questions which, under the Constitution, are to be decided by the people in their sovereign capacity; or in
regard to which full discretionary authority has been delegated to the legislative or executive branch of the
government." It is concerned with issues dependent upon the wisdom, not legality, of a particular measure.

It is true that the concept of the political question has been constricted with the enlargement of judicial power, which now includes
the authority of the courts "to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government." 37 Even so, this should not be construed as a license for
us to reverse the other departments simply because their views may not coincide with ours.

The legislature and the executive have been seen fit, in their wisdom, to include in the CARP the redistribution of private landholdings
(even as the distribution of public agricultural lands is first provided for, while also continuing apace under the Public Land Act and
other cognate laws). The Court sees no justification to interpose its authority, which we may assert only if we believe that the political
decision is not unwise, but illegal. We do not find it to be so.

In U.S. v. Chandler-Dunbar Water Power Company,38 it was held:

68

Congress having determined, as it did by the Act of March 3,1909 that the entire St. Mary's river between the
American bank and the international line, as well as all of the upland north of the present ship canal, throughout its
entire length, was "necessary for the purpose of navigation of said waters, and the waters connected therewith,"
that determination is conclusive in condemnation proceedings instituted by the United States under that Act, and
there is no room for judicial review of the judgment of Congress ... .

As earlier observed, the requirement for public use has already been settled for us by the Constitution itself No less than the 1987
Charter calls for agrarian reform, which is the reason why private agricultural lands are to be taken from their owners, subject to the
prescribed maximum retention limits. The purposes specified in P.D. No. 27, Proc. No. 131 and R.A. No. 6657 are only an elaboration
of the constitutional injunction that the State adopt the necessary measures "to encourage and undertake the just distribution of all
agricultural lands to enable farmers who are landless to own directly or collectively the lands they till." That public use, as pronounced
by the fundamental law itself, must be binding on us.

The second requirement, i.e., the payment of just compensation, needs a longer and more thoughtful examination.

Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. 39 It has been
repeatedly stressed by this Court that the measure is not the taker's gain but the owner's loss. 40 The word "just" is used to intensify
the meaning of the word "compensation" to convey the idea that the equivalent to be rendered for the property to be taken shall be
real, substantial, full, ample. 41

It bears repeating that the measures challenged in these petitions contemplate more than a mere regulation of the use of private
lands under the police power. We deal here with an actual taking of private agricultural lands that has dispossessed the owners of
their property and deprived them of all its beneficial use and enjoyment, to entitle them to the just compensation mandated by the
Constitution.

As held in Republic of the Philippines v. Castellvi, 42 there is compensable taking when the following conditions concur: (1) the
expropriator must enter a private property; (2) the entry must be for more than a momentary period; (3) the entry must be under
warrant or color of legal authority; (4) the property must be devoted to public use or otherwise informally appropriated or injuriously
affected; and (5) the utilization of the property for public use must be in such a way as to oust the owner and deprive him of beneficial
enjoyment of the property. All these requisites are envisioned in the measures before us.

Where the State itself is the expropriator, it is not necessary for it to make a deposit upon its taking possession of the condemned
property, as "the compensation is a public charge, the good faith of the public is pledged for its payment, and all the resources of
taxation may be employed in raising the amount." 43 Nevertheless, Section 16(e) of the CARP Law provides that:

Upon receipt by the landowner of the corresponding payment or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the proper
Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. The DAR
shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.

Objection is raised, however, to the manner of fixing the just compensation, which it is claimed is entrusted to the administrative
authorities in violation of judicial prerogatives. Specific reference is made to Section 16(d), which provides that in case of the rejection
or disregard by the owner of the offer of the government to buy his land-

... the DAR shall conduct summary administrative proceedings to determine the compensation for the land by
requiring the landowner, the LBP and other interested parties to submit evidence as to the just compensation for
the land, within fifteen (15) days from the receipt of the notice. After the expiration of the above period, the matter
is deemed submitted for decision. The DAR shall decide the case within thirty (30) days after it is submitted for
decision.

To be sure, the determination of just compensation is a function addressed to the courts of justice and may not be usurped by any
other branch or official of the government. EPZA v. Dulay 44 resolved a challenge to several decrees promulgated by President Marcos
providing that the just compensation for property under expropriation should be either the assessment of the property by the
government or the sworn valuation thereof by the owner, whichever was lower. In declaring these decrees unconstitutional, the Court
held through Mr. Justice Hugo E. Gutierrez, Jr.:

The method of ascertaining just compensation under the aforecited decrees constitutes impermissible
encroachment on judicial prerogatives. It tends to render this Court inutile in a matter which under this Constitution
is reserved to it for final determination.

Thus, although in an expropriation proceeding the court technically would still have the power to determine the just
compensation for the property, following the applicable decrees, its task would be relegated to simply stating the
lower value of the property as declared either by the owner or the assessor. As a necessary consequence, it would
be useless for the court to appoint commissioners under Rule 67 of the Rules of Court. Moreover, the need to satisfy
the due process clause in the taking of private property is seemingly fulfilled since it cannot be said that a judicial
69

proceeding was not had before the actual taking. However, the strict application of the decrees during the
proceedings would be nothing short of a mere formality or charade as the court has only to choose between the
valuation of the owner and that of the assessor, and its choice is always limited to the lower of the two. The court
cannot exercise its discretion or independence in determining what is just or fair. Even a grade school pupil could
substitute for the judge insofar as the determination of constitutional just compensation is concerned.

xxx

In the present petition, we are once again confronted with the same question of whether the courts under P.D. No.
1533, which contains the same provision on just compensation as its predecessor decrees, still have the power and
authority to determine just compensation, independent of what is stated by the decree and to this effect, to appoint
commissioners for such purpose.

This time, we answer in the affirmative.

xxx

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

A reading of the aforecited Section 16(d) will readily show that it does not suffer from the arbitrariness that rendered the challenged
decrees constitutionally objectionable. Although the proceedings are described as summary, the landowner and other interested
parties are nevertheless allowed an opportunity to submit evidence on the real value of the property. But more importantly, the
determination of the just compensation by the DAR is not by any means final and conclusive upon the landowner or any other
interested party, for Section 16(f) clearly provides:

Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation.

The determination made by the DAR is only preliminary unless accepted by all parties concerned. Otherwise, the courts of justice will
still have the right to review with finality the said determination in the exercise of what is admittedly a judicial function.

The second and more serious objection to the provisions on just compensation is not as easily resolved.

This refers to Section 18 of the CARP Law providing in full as follows:

SEC. 18. Valuation and Mode of Compensation. — The LBP shall compensate the landowner in such amount as may
be agreed upon by the landowner and the DAR and the LBP, in accordance with the criteria provided for in Sections
16 and 17, and other pertinent provisions hereof, or as may be finally determined by the court, as the just
compensation for the land.

The compensation shall be paid in one of the following modes, at the option of the landowner:

(1) Cash payment, under the following terms and conditions:

(a) For lands above fifty (50) hectares, insofar as the excess hectarage is
concerned — Twenty-five percent (25%) cash, the balance to be paid in
government financial instruments negotiable at any time.

(b) For lands above twenty-four (24) hectares and up to fifty (50) hectares —
Thirty percent (30%) cash, the balance to be paid in government financial
instruments negotiable at any time.

(c) For lands twenty-four (24) hectares and below — Thirty-five percent (35%)
cash, the balance to be paid in government financial instruments negotiable at
any time.

(2) Shares of stock in government-owned or controlled corporations, LBP preferred shares, physical assets or other
qualified investments in accordance with guidelines set by the PARC;

(3) Tax credits which can be used against any tax liability;
70

(4) LBP bonds, which shall have the following features:

(a) Market interest rates aligned with 91-day treasury bill rates. Ten percent
(10%) of the face value of the bonds shall mature every year from the date of
issuance until the tenth (10th) year: Provided, That should the landowner choose
to forego the cash portion, whether in full or in part, he shall be paid
correspondingly in LBP bonds;

(b) Transferability and negotiability. Such LBP bonds may be used by the
landowner, his successors-in- interest or his assigns, up to the amount of their
face value, for any of the following:

(i) Acquisition of land or other real properties of the government, including

assets under the Asset Privatization Program and other assets foreclosed by
government financial institutions in the same province or region where the lands
for which the bonds were paid are situated;

(ii) Acquisition of shares of stock of government-owned or controlled

corporations or shares of stock owned by the government in private
corporations;

(iii) Substitution for surety or bail bonds for the provisional release of accused
persons, or for performance bonds;

(iv) Security for loans with any government financial institution, provided the
proceeds of the loans shall be invested in an economic enterprise, preferably in
a small and medium- scale industry, in the same province or region as the land
for which the bonds are paid;

(v) Payment for various taxes and fees to government: Provided, That the use of
these bonds for these purposes will be limited to a certain percentage of the
outstanding balance of the financial instruments; Provided, further, That the
PARC shall determine the percentages mentioned above;

(vi) Payment for tuition fees of the immediate family of the original bondholder
in government universities, colleges, trade schools, and other institutions;

(vii) Payment for fees of the immediate family of the original bondholder in
government hospitals; and

(viii) Such other uses as the PARC may from time to time allow.

The contention of the petitioners in G.R. No. 79777 is that the above provision is unconstitutional insofar as it requires the owners of
the expropriated properties to accept just compensation therefor in less than money, which is the only medium of payment allowed.
In support of this contention, they cite jurisprudence holding that:

The fundamental rule in expropriation matters is that the owner of the property expropriated is entitled to a just
compensation, which should be neither more nor less, whenever it is possible to make the assessment, than the
money equivalent of said property. Just compensation has always been understood to be the just and complete
equivalent of the loss which the owner of the thing expropriated has to suffer by reason of the expropriation
. 45 (Emphasis supplied.)

In J.M. Tuazon Co. v. Land Tenure Administration, 46 this Court held:

It is well-settled that just compensation means the equivalent for the value of the property at the time of its taking.
Anything beyond that is more, and anything short of that is less, than just compensation. It means a fair and full
equivalent for the loss sustained, which is the measure of the indemnity, not whatever gain would accrue to the
expropriating entity. The market value of the land taken is the just compensation to which the owner of condemned
property is entitled, the market value being that sum of money which a person desirous, but not compelled to buy,
and an owner, willing, but not compelled to sell, would agree on as a price to be given and received for such property.
(Emphasis supplied.)

In the United States, where much of our jurisprudence on the subject has been derived, the weight of authority is also to the effect
that just compensation for property expropriated is payable only in money and not otherwise. Thus —
71

The medium of payment of compensation is ready money or cash. The condemnor cannot compel the owner to
accept anything but money, nor can the owner compel or require the condemnor to pay him on any other basis than
the value of the property in money at the time and in the manner prescribed by the Constitution and the statutes.
When the power of eminent domain is resorted to, there must be a standard medium of payment, binding upon
both parties, and the law has fixed that standard as money in cash. 47 (Emphasis supplied.)

Part cash and deferred payments are not and cannot, in the nature of things, be regarded as a reliable and constant
standard of compensation. 48

"Just compensation" for property taken by condemnation means a fair equivalent in money, which must be paid at
least within a reasonable time after the taking, and it is not within the power of the Legislature to substitute for such
payment future obligations, bonds, or other valuable advantage. 49(Emphasis supplied.)

It cannot be denied from these cases that the traditional medium for the payment of just compensation is money and no other. And
so, conformably, has just compensation been paid in the past solely in that medium. However, we do not deal here with the traditional
excercise of the power of eminent domain. This is not an ordinary expropriation where only a specific property of relatively limited
area is sought to be taken by the State from its owner for a specific and perhaps local purpose.

What we deal with here is a revolutionary kind of expropriation.

The expropriation before us affects all private agricultural lands whenever found and of whatever kind as long as they are in excess of
the maximum retention limits allowed their owners. This kind of expropriation is intended for the benefit not only of a particular
community or of a small segment of the population but of the entire Filipino nation, from all levels of our society, from the
impoverished farmer to the land-glutted owner. Its purpose does not cover only the whole territory of this country but goes beyond
in time to the foreseeable future, which it hopes to secure and edify with the vision and the sacrifice of the present generation of
Filipinos. Generations yet to come are as involved in this program as we are today, although hopefully only as beneficiaries of a richer
and more fulfilling life we will guarantee to them tomorrow through our thoughtfulness today. And, finally, let it not be forgotten that
it is no less than the Constitution itself that has ordained this revolution in the farms, calling for "a just distribution" among the farmers
of lands that have heretofore been the prison of their dreams but can now become the key at least to their deliverance.

Such a program will involve not mere millions of pesos. The cost will be tremendous. Considering the vast areas of land subject to
expropriation under the laws before us, we estimate that hundreds of billions of pesos will be needed, far more indeed than the
amount of P50 billion initially appropriated, which is already staggering as it is by our present standards. Such amount is in fact not
even fully available at this time.

We assume that the framers of the Constitution were aware of this difficulty when they called for agrarian reform as a top priority
project of the government. It is a part of this assumption that when they envisioned the expropriation that would be needed, they
also intended that the just compensation would have to be paid not in the orthodox way but a less conventional if more practical
method. There can be no doubt that they were aware of the financial limitations of the government and had no illusions that there
would be enough money to pay in cash and in full for the lands they wanted to be distributed among the farmers. We may therefore
assume that their intention was to allow such manner of payment as is now provided for by the CARP Law, particularly the payment
of the balance (if the owner cannot be paid fully with money), or indeed of the entire amount of the just compensation, with other
things of value. We may also suppose that what they had in mind was a similar scheme of payment as that prescribed in P.D. No. 27,
which was the law in force at the time they deliberated on the new Charter and with which they presumably agreed in principle.

The Court has not found in the records of the Constitutional Commission any categorical agreement among the members regarding
the meaning to be given the concept of just compensation as applied to the comprehensive agrarian reform program being
contemplated. There was the suggestion to "fine tune" the requirement to suit the demands of the project even as it was also felt that
they should "leave it to Congress" to determine how payment should be made to the landowner and reimbursement required from
the farmer-beneficiaries. Such innovations as "progressive compensation" and "State-subsidized compensation" were also proposed.
In the end, however, no special definition of the just compensation for the lands to be expropriated was reached by the Commission. 50

On the other hand, there is nothing in the records either that militates against the assumptions we are making of the general
sentiments and intention of the members on the content and manner of the payment to be made to the landowner in the light of the
magnitude of the expenditure and the limitations of the expropriator.

With these assumptions, the Court hereby declares that the content and manner of the just compensation provided for in the afore-
quoted Section 18 of the CARP Law is not violative of the Constitution. We do not mind admitting that a certain degree of pragmatism
has influenced our decision on this issue, but after all this Court is not a cloistered institution removed from the realities and demands
of society or oblivious to the need for its enhancement. The Court is as acutely anxious as the rest of our people to see the goal of
agrarian reform achieved at last after the frustrations and deprivations of our peasant masses during all these disappointing decades.
We are aware that invalidation of the said section will result in the nullification of the entire program, killing the farmer's hopes even
as they approach realization and resurrecting the spectre of discontent and dissent in the restless countryside. That is not in our view
the intention of the Constitution, and that is not what we shall decree today.

Accepting the theory that payment of the just compensation is not always required to be made fully in money, we find further that
the proportion of cash payment to the other things of value constituting the total payment, as determined on the basis of the areas
72

of the lands expropriated, is not unduly oppressive upon the landowner. It is noted that the smaller the land, the bigger the payment
in money, primarily because the small landowner will be needing it more than the big landowners, who can afford a bigger balance in
bonds and other things of value. No less importantly, the government financial instruments making up the balance of the payment
are "negotiable at any time." The other modes, which are likewise available to the landowner at his option, are also not unreasonable
because payment is made in shares of stock, LBP bonds, other properties or assets, tax credits, and other things of value equivalent
to the amount of just compensation.

Admittedly, the compensation contemplated in the law will cause the landowners, big and small, not a little inconvenience. As already
remarked, this cannot be avoided. Nevertheless, it is devoutly hoped that these countrymen of ours, conscious as we know they are
of the need for their forebearance and even sacrifice, will not begrudge us their indispensable share in the attainment of the ideal of
agrarian reform. Otherwise, our pursuit of this elusive goal will be like the quest for the Holy Grail.

The complaint against the effects of non-registration of the land under E.O. No. 229 does not seem to be viable any more as it appears
that Section 4 of the said Order has been superseded by Section 14 of the CARP Law. This repeats the requisites of registration as
embodied in the earlier measure but does not provide, as the latter did, that in case of failure or refusal to register the land, the
valuation thereof shall be that given by the provincial or city assessor for tax purposes. On the contrary, the CARP Law says that the
just compensation shall be ascertained on the basis of the factors mentioned in its Section 17 and in the manner provided for in Section
16.

The last major challenge to CARP is that the landowner is divested of his property even before actual payment to him in full of just
compensation, in contravention of a well- accepted principle of eminent domain.

The recognized rule, indeed, is that title to the property expropriated shall pass from the owner to the expropriator only upon full
payment of the just compensation. Jurisprudence on this settled principle is consistent both here and in other democratic jurisdictions.
Thus:

Title to property which is the subject of condemnation proceedings does not vest the condemnor until the judgment fixing just
compensation is entered and paid, but the condemnor's title relates back to the date on which the petition under the Eminent Domain
Act, or the commissioner's report under the Local Improvement Act, is filed. 51

... although the right to appropriate and use land taken for a canal is complete at the time of entry, title to the property taken remains
in the owner until payment is actually made. 52 (Emphasis supplied.)

In Kennedy v. Indianapolis, 53 the US Supreme Court cited several cases holding that title to property does not pass to the condemnor
until just compensation had actually been made. In fact, the decisions appear to be uniformly to this effect. As early as 1838,
in Rubottom v. McLure, 54 it was held that "actual payment to the owner of the condemned property was a condition precedent to the
investment of the title to the property in the State" albeit "not to the appropriation of it to public use." In Rexford v. Knight, 55 the
Court of Appeals of New York said that the construction upon the statutes was that the fee did not vest in the State until the payment
of the compensation although the authority to enter upon and appropriate the land was complete prior to the payment. Kennedy
further said that "both on principle and authority the rule is ... that the right to enter on and use the property is complete, as soon as
the property is actually appropriated under the authority of law for a public use, but that the title does not pass from the owner without
his consent, until just compensation has been made to him."

Our own Supreme Court has held in Visayan Refining Co. v. Camus and Paredes, 56 that:

If the laws which we have exhibited or cited in the preceding discussion are attentively examined it will be apparent
that the method of expropriation adopted in this jurisdiction is such as to afford absolute reassurance that no piece
of land can be finally and irrevocably taken from an unwilling owner until compensation is paid ... . (Emphasis
supplied.)

It is true that P.D. No. 27 expressly ordered the emancipation of tenant-farmer as October 21, 1972 and declared that he shall "be
deemed the owner" of a portion of land consisting of a family-sized farm except that "no title to the land owned by him was to be
actually issued to him unless and until he had become a full-fledged member of a duly recognized farmers' cooperative." It was
understood, however, that full payment of the just compensation also had to be made first, conformably to the constitutional
requirement.

When E.O. No. 228, categorically stated in its Section 1 that:

All qualified farmer-beneficiaries are now deemed full owners as of October 21, 1972 of the land they acquired by
virtue of Presidential Decree No. 27. (Emphasis supplied.)

it was obviously referring to lands already validly acquired under the said decree, after proof of full-fledged membership in the farmers'
cooperatives and full payment of just compensation. Hence, it was also perfectly proper for the Order to also provide in its Section 2
that the "lease rentals paid to the landowner by the farmer- beneficiary after October 21, 1972 (pending transfer of ownership after
full payment of just compensation), shall be considered as advance payment for the land."
73

The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt by the
landowner of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible
bank. Until then, title also remains with the landowner. 57 No outright change of ownership is contemplated either.

Hence, the argument that the assailed measures violate due process by arbitrarily transferring title before the land is fully paid for
must also be rejected.

It is worth stressing at this point that all rights acquired by the tenant-farmer under P.D. No. 27, as recognized under E.O. No. 228, are
retained by him even now under R.A. No. 6657. This should counter-balance the express provision in Section 6 of the said law that
"the landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to keep the area originally retained
by them thereunder, further, That original homestead grantees or direct compulsory heirs who still own the original homestead at the
time of the approval of this Act shall retain the same areas as long as they continue to cultivate said homestead."

In connection with these retained rights, it does not appear in G.R. No. 78742 that the appeal filed by the petitioners with the Office
of the President has already been resolved. Although we have said that the doctrine of exhaustion of administrative remedies need
not preclude immediate resort to judicial action, there are factual issues that have yet to be examined on the administrative level,
especially the claim that the petitioners are not covered by LOI 474 because they do not own other agricultural lands than the subjects
of their petition.

Obviously, the Court cannot resolve these issues. In any event, assuming that the petitioners have not yet exercised their retention
rights, if any, under P.D. No. 27, the Court holds that they are entitled to the new retention rights provided for by R.A. No. 6657, which
in fact are on the whole more liberal than those granted by the decree.

The CARP Law and the other enactments also involved in these cases have been the subject of bitter attack from those who point to
the shortcomings of these measures and ask that they be scrapped entirely. To be sure, these enactments are less than perfect; indeed,
they should be continuously re-examined and rehoned, that they may be sharper instruments for the better protection of the farmer's
rights. But we have to start somewhere. In the pursuit of agrarian reform, we do not tread on familiar ground but grope on terrain
fraught with pitfalls and expected difficulties. This is inevitable. The CARP Law is not a tried and tested project. On the contrary, to use
Justice Holmes's words, "it is an experiment, as all life is an experiment," and so we learn as we venture forward, and, if necessary, by
our own mistakes. We cannot expect perfection although we should strive for it by all means. Meantime, we struggle as best we can
in freeing the farmer from the iron shackles that have unconscionably, and for so long, fettered his soul to the soil.

By the decision we reach today, all major legal obstacles to the comprehensive agrarian reform program are removed, to clear the
way for the true freedom of the farmer. We may now glimpse the day he will be released not only from want but also from the
exploitation and disdain of the past and from his own feelings of inadequacy and helplessness. At last his servitude will be ended
forever. At last the farm on which he toils will be his farm. It will be his portion of the Mother Earth that will give him not only the staff
of life but also the joy of living. And where once it bred for him only deep despair, now can he see in it the fruition of his hopes for a
more fulfilling future. Now at last can he banish from his small plot of earth his insecurities and dark resentments and "rebuild in it
the music and the dream."

WHEREFORE, the Court holds as follows:

1. R.A. No. 6657, P.D. No. 27, Proc. No. 131, and E.O. Nos. 228 and 229 are SUSTAINED against all the constitutional
objections raised in the herein petitions.

2. Title to all expropriated properties shall be transferred to the State only upon full payment of compensation to
their respective owners.

3. All rights previously acquired by the tenant- farmers under P.D. No. 27 are retained and recognized.

4. Landowners who were unable to exercise their rights of retention under P.D. No. 27 shall enjoy the retention
rights granted by R.A. No. 6657 under the conditions therein prescribed.

5. Subject to the above-mentioned rulings all the petitions are DISMISSED, without pronouncement as to costs.

SO ORDERED.

G.R. No. 79416 September 5, 1989

ROSALINA BONIFACIO, surviving wife; and children GABRIEL, PONCIANO, TIBURCIO, BEATRIZ, GENEROSA, SILVERIA, LEONARDO,
FELOMENA, ENCARNACION and LEONILA, all surnamed BONIFACIO, petitioners,
vs.
74

HON. NATIVIDAD G. DIZON, Presiding Judge of the Regional Trial Court of Malolos, Branch XIII, Malolos, Bulacan and PASTORA SAN
MIGUEL, respondents.

FERNAN, C.J.:

The issue raised in the instant petition for certiorari certified to us by the Court of Appeals in its resolution 1 dated November 28, 1986
in CA-G.R. SP No. 10033 as involving a pure question of law is phrased by petitioners, thus:

WHETHER OR NOT, THE FAVORABLE JUDGMENT OBTAINED BY THE DECEDENT IS INHERITED BY THE COMPULSORY HEIRS, THEREBY
VESTING TO THE LATTER, ALL THE RIGHTS CONFERRED BY THE JUDGMENT TO (sic) THE DECEDENT. 2

The favorable judgment adverted to by petitioners traces its origin to the complaint filed on July 1, 1968 by Olimpio Bonifacio before
the then Court of Agrarian Relations, Fifth Regional District, Branch I-A of Baliwag, Bulacan, seeking the ejectment of private
respondent Pastora San Miguel from Bonifacio's two-hectare agricultural land situated at Patubig, Marilao, Bulacan and covered by
Transfer Certificate of Title No. T-27298. The ground relied upon therefor was personal cultivation under Section 36 (1) of R.A. 3844,
otherwise known as the Agricultural Land Reform Code (CAR Case No. 2160-B'68).

After trial on the merits, judgment was rendered therein on September 18, 1970 by Judge Manuel Jn. Serapio:

1. Granting authority to plaintiff OLIMPIO BONIFACIO to eject defendant PASTORA SAN MIGUEL from the landholding in question
situated at Patubig, Marilao, Bulacan with an area of two (2) hectares, more or less, and consequently, ordering said defendant to
vacate the same landholding and deliver possession thereof to said plaintiff for the latter's personal cultivation, subject to the
provisions of Section 25 of R.A. 3844; and

2. Dismissing all other claims and counterclaims of the parties. 3

On appeal by private respondent Pastora San Miguel, the Court of Appeals 4 modified said judgment with respect to her counterclaim
by ordering Olimpio Bonifacio to pay her the amount of P 1,376.00. The judgment was affirmed in all other respects. 5

Still dissatisfied, private respondent Pastora San Miguel sought relief from this Court. During the pendency of her petition, on August
7, 1983, Olimpio Bonifacio died. As no notice of such death was given to the Court, no order for the substitution of his heirs was made.
On July 31, 1985, the Court En Banc resolved to deny private respondent's petition for lack of merit and to affirm the decision of the
Court of Appeals. 6

Subsequently, petitioners Rosalina Bonifacio, as surviving wife, and Gabriel, Ponciano, Tiburcio, Beatriz, Generosa, Silveria, Leonardo,
Felomena, Encarnacion and Leonila all surnamed Bonifacio, as children and heirs of Olimpio Bonifacio, moved for the execution of the
decision in CAR Case No. 2160-B'68 before the respondent Regional Trial Court of Bulacan. A writ of execution was issued on February
20, 1986 and on March 6, 1986, the Deputy Sheriff submitted his Report (Partial Delivery of Possession), stating in part that except for
a portion thereof occupied by the house of Pastora San Miguel which the latter refused to vacate, he had delivered the land subject
matter of the action to Rosalina Bonifacio as surviving wife of Olimpio Bonifacio.

Thereafter, private respondent Pastora San Miguel moved to quash the writ of execution. This was opposed by petitioners who in turn
sought the issuance of a writ of demolition and an order declaring Pastora San Miguel in contempt of court for allegedly re-entering
the subject land.

After hearing, respondent Judge Natividad G. Dizon issued a resolution on July 15, 1986, the dispositive portion of which reads:

WHEREFORE, the implementation of the writ of execution of the Decision dated September 18, 1970 made by the Sheriff of this Court,
per directive contained in our Order of February 18, 1986, is hereby declared null and void; the "Motion for Demolition" filed by
plaintiff is hereby denied; and, the "Petition for Contempt" likewise denied.

SO ORDERED. 7

Petitioners assail this resolution in the petition for certiorari filed before the Court of Appeals, which as stated earlier, was certified to
us pursuant to Section 9 (3) of Batas Pambansa Blg. 129 in relation to Section 5 (2) [e], Art. X of the 1973 Constitution and Rule 50,
Sec. 3 of the Revised Rules of Court.

Petitioners contend that respondent judge committed grave abuse of discretion tantamount to lack of jurisdiction in ruling that the
decision in CAR Case No. 2160-B'68 can no longer be executed as said action is purely personal in character and therefore cannot,
upon Olimpio Bonifacio's death, be inherited by his heirs. They assert that CAR Case No. 2160-B'68, being an ejectment case and not
one of those specifically provided by law to be purely personal, survives the death of a party. Furthermore, as under Rule 39, Section
49 (b) of the Rules of Court, a judgment is binding not only upon the parties but also on their successors-in-interest, petitioners are
entitled to enforce the decision in CAR Case No. 2160-B'68.

Private respondent, on the other hand, places stress on the fact that the action under consideration is not an ordinary ejectment case
but an agrarian case for the ejectment of an agricultural lessee. She theorizes that the right being asserted in the action is personal to
Olimpio Bonifacio, which necessarily died with him. She further contends that the non-substitution of Olimpio Bonifacio by his heirs
rendered the proceedings taken after his death null and void. She also points to certain supervening events which allegedly prohibit
75

execution of the judgment in CAR Case No. 2160-B'68, to wit: the amendment of Section 36 (1), R.A. 3844 by R.A. No. 6389 and 2) the
promulgation of P.D. No. 27.

Private respondent is correct in characterizing CAR Case No. 2160-B'68 as more than an ordinary ejectment case. It is, indeed, an
agrarian case for the ejectment of an agricultural lessee, which in the light of the public policy involved, is more closely and strictly
regulated by the State. This factor, however, does not operate to bar the application to the instant case of the general rule that an
ejectment case survives the death of a party. 8

Much of the problem lies in the term "personal cultivation" by which the ground for ejectment under Section 36 (1) of R.A. 3844 was
loosely referred. As it is, the term gave the impression that the ejectment of an agricultural lessee was allowed only if and when the
landowner-lessor and no other opted to cultivate the landholding; thereby giving use to a bigger misconception that the right of
cultivation pertained exclusively to the landowner-lessor, and therefore his personal right alone. A reading of Section 36 (1), R.A. 3844
however readily demonstrates the fallacy of this interpretation. Said section provides:

Sec. 36. Possession of Landholding; Exceptions. — Notwithstanding any agreement as to the period or future surrender of the land, an
agricultural lessee shall continue in the enjoyment and possession of his landholding except when his dispossession has been
authorized by the Court in a judgment that is final and executory if after due hearing it is shown that:

(1) The agricultural lessor-owner or a member of the immediate family will personally cultivate the landholding or will convert the
landholding, if suitably located, into residential, factory, hospital or school site or other useful non-agricultural purposes . . . .

Under this provision, ejectment of an agricultural lessee was authorized not only when the landowner-lessor desired to cultivate the
landholding, but also when a member of his immediate family so desired. In so providing, the law clearly did not intend to limit the
right of cultivation strictly and personally to the landowner but to extend the exercise of such right to the members of his immediate
family. Clearly then, the right of cultivation as a ground for ejectment was not a right exclusive and personal to the landowner-lessor.
To say otherwise would be to put to naught the right of cultivation likewise conferred upon the landowner's immediate family
members.

The right of cultivation was extended to the landowner's immediate family members evidently to place the landowner-lessor in parity
with the agricultural lessee who was (and still is) allowed to cultivate the land with the aid of his farm household. In this regard, it must
be observed that an agricultural lessee who cultivates the landholding with the aid of his immediate farm household is within the
contemplation of the law engaged in "personal cultivation."

Thus, whether used in reference to the agricultural lessor or lessee, the term "personal cultivation" cannot be given a restricted
connotation to mean a right personal and exclusive to either lessor or lessee. In either case, the right extends to the members of the
lessor's or lessee's immediate family members.

Petitioners are not only the heirs and successors-in-interest, but the immediate family members of the deceased landowner-lessor as
well. The right to cultivate the landholding asserted in CAR Case No. 2160-B'68 not being a purely personal right of the deceased
landowner-lessor, the same was transmitted to petitioners as heirs and successors-in-interest. Petitioners are entitled to the
enforcement of the judgment in CAR Case No. 2160-B'68.

Rules of procedure make it the duty of the attorney to inform the court promptly of his client's death, incapacity or incompetency
during the pendency of the action and to give the name and residence of his executor, administrator, guardian or other legal
representative. 9 In case of a party's death, the court, if the action survives, shall then order upon proper notice the legal
representatives of the deceased to appear and to be substituted for the deceased within a period of 30 days or within such time as
may be granted.10

In the case at bar, Olimpio Bonifacio's death during the pendency of private respondent's petition was not communicated to the Court.
As ruled by this Court in the case of Florendo, Jr. vs. Coloma, supra, involving substantially the same facts and issue:

. . . The petitioners challenge the proceeding in the Court of Appeals after the death of the plaintiff-appellant Adela Salindon. They are
of the opinion that since there was no legal representative substituted for Salindon after her death, the appellate court lost its
jurisdiction over the case and consequently, the proceedings in the said court are null and void. This argument is without merit.

There is no dispute that an ejectment case survives the death of a party. The supervening death of plaintiff-appellant Salindon did not
extinguish her civil personality (Republic v. Bagtas 6 SCRA 242; Vda. de Haberes v. Court of Appeals, 104 SCRA 534). . . .

xxx xxx xxx

In the case at bar, Salindon's counsel after her death on December 11, 1976 failed to inform the court of Salindon's death. The appellate
court could not be expected to know or take judicial notice of the death of Salindon without the proper manifestation from Salindon's
counsel. In such a case and considering that the supervening death of appellant did not extinguish her civil personality, the appellate
court was well within its jurisdiction to proceed as it did with the case. There is no showing that the appellate court's proceedings in
the case were tainted with irregularities.

Private respondent's challenge against the proceedings held after Olimpio Bonifacio's death cannot therefore be heeded.
76

Neither can private respondent derive comfort from the amendment of Section 36 (1) of R.A. 3844 by Section 7 of R.A. No. 6389 11 and
the promulgation of P.D. No. 27. 12 In Nilo v. Court of Appeals, G.R. No. L-34586, April 2, 1984,128 SCRA 519, we categorically ruled
that both R.A. No. 6389 and P.D. No. 27 cannot be applied retroactively under the general rule that statutes have no retroactive effect
unless otherwise provided therein.

There being no cogent reason to nullify the implementation of the writ of execution in CAR Case No. 2160-B'68, respondent judge
acted with grave abuse of discretion in having done so. The writ prayed for should issue.

WHEREFORE, the petition is GRANTED. The assailed resolution dated July 15, 1986 is hereby SET ASIDE. The immediate execution of
the decision in CAR Case No. 2160-B'68 is ordered. This decision is immediately executory. No pronouncement as to costs.

SO ORDERED.

G.R. No. L-61388 April 20, 1983

IN THE ISSUANCE OF THE WRIT OF HABEAS CORPUS FOR DR. AURORA PARONG, NORBERTO PORTUGUESE, SABINO PADILLA,
FRANCIS DIVINAGRACIA, IMELDA DE LOS SANTOS, BENJAMIN PINEDA, ZENAIDA MALLARI, MARIANO SORIANO, TITO TANGUILIG,
LETTY BALLOGAN, BIENVENIDA GARCIA, EUFRONIO ORTIZ. JR., JUANITO GRANADA and TOM VASQUEZ. JOSEFINA GARCIA-
PADILLA, petitioner,
vs.
MINISTER JUAN PONCE ENRILE, GEN, FABIAN C. VER, GEN. FIDEL V. RAMOS, and FIDEL V. RAMOS, and LT. COL. MIGUEL
CORONEL, respondents.

Lorenzo M. Tanada, Jose W. Diokno, Joker P. Arroyo, Efren M Mercado and Alexander Padilla for petitioner.

The Solicitor General for respondents.

DE CASTRO, J.:

Petition for a writ of habeas corpus and mandamus seeking the following relief:

WHEREFORE, petitioners pray this Honorable Court:

1. To immediately issue a writ of habeas corpus directing respondents to appear and produce the bodies of Dr. AURORA PARONG,
NORBERTO PORTUGUESE, SABINO PADILLA, FRANCIS DIVINAGRACIA, IMELDA DE LOS SANTOS, BENJAMIN PINEDA, ZENAIDA MALLARI,
MARIANO SORIANO, TITO TANGUILIG, LETTY BALLOGAN, BIENVENIDA GARCIA, EUFRONIO ORTIZ, JR., JUANITO GRANADA and TOM
VASQUEZ, forthwith before this Honorable Court and to make due return of the writ therewith;

2. To issue, in addition or in the alternative to the writ of habeas corpus, a writ of mandamus compelling the respondents to disclose
the petitioners' present place of detention and to order the respondents to allow counsel and relatives to visit and confer with the
petitioners;

3. Pending the determination of the legality of their continued detention, to forthwith release the detainees on bail upon such terms
and conditions as the Court may fix, and after hearing, to order petitioners' immediate release; and

4. To grant petitioners such other and further relief as may be deemed just and equitable in the premises.

The records show that nine (9) of the fourteen (14) detainees herein were arrested on July 6, 1982 at about 1:45 p.m. when three (3)
teams of the PC/INP of Bayombong, Nueva Viscaya led by Lt. Col. Coronel, lst Lt. de Guzman and lst Lt. Baria, after securing a Search
Warrant No. S-82 issued by Judge Sofronio Sayo of the Court of First Instance of Nueva Viscaya conducted a raid at the residence of
Dra. Aurora Parong. Apprehended during the said raid were Dra. Aurora Parong, Benjamin Pineda, Sabino Padilla, Francisco
Divinagracia, Zenaida Mallari, Letty Ballogan, Norberto Portuguese, and Mariano Soriano who were then having a conference in the
dining room of Dra. Parong's residence which had been doing on since 10:00 a.m. of that same day.

The other four (4) detainees herein, namely: Imelda de los Santos, Eufronio Ortiz, Jr., Juanita Granada, and Bienvenida Garcia, were
arrested on the following day, July 7, 1982 by the same PC teams.

On July 15, 1982, Tom Vasquez was arrested, and his Volkswagen car, bearing Plate No. DAP 347, was seized by the PC authorities.

The herein fourteen (14) detainees (hereafter referred to sometimes as petitioners) were all detained at the PC/INP Command
Headquarters, Bayombong, Nueva Vizcaya from July 6, 1982 until their transfer on the morning of August 10, 1982 to an undisclosed
place reportedly to Camp Crame, Quezon City, to Echague, Isabela, and to Tuguegarao, Cagayan.

Hence, this petition for the writ of habeas corpus and mandamus filed by Josefina Garcia-Padilla, mother of detained petitioner Sabino
G. Padilla, Jr. on August 13, 1982. The mandamus aspect of the instant petition has, however, become moot and academic, and
whereabouts of petitioners having already become known to petitioner Josefina Garcia-Padilla.
77

It is alleged in the petition that the arrest of petitioners was patently unlawful and illegal since it was effected without any warrant of
arrest; that the PC/INP raiding team which made the arrest were only armed with a search warrant (No. 3-82) issued by Judge Sofronio
G. Sayo of the Court of First Instance of Nueva Viscaya, and nowhere in said warrant was authority given to make arrests, much less
detention; that the search warrant which authorized respondents to seize "subversive documents, firearms of assorted calibers,
medicine and other subversive paraphernalia" in the house and clinic of Dra. Aurora Parong was a roving and general warrant and is,
therefore, illegal per se because it does not state specifically the things that are to be seized (Stonehill vs. Diokno, 20 SCRA 383); that
no criminal charges have as of yet been filed against any of the detainees; that the fourteen (14) detainees were initially held at the
PC/INP Command in Bayombong, Nueva Viscaya from July 6 up to August 10, 1982, but were subsequently transferred by helicopter
in the morning of August 10, 1982 to a place or safehouse known only to respondents; that there is no judgment, decree, decision or
order from a court of law which would validate the continued detention of the petitioner; that while it is true that a purported telegram
stating the issuance of a Presidential Commitment Order (PCO) was shown to the detainees on or about July 11 and 12, 1982, but
counsel and the detainees have not yet been given a copy of such PCO nor notified of its contents, raising a doubt whether such
commitment order has in fact been issued.

It is further alleged that respondents are denying the detainees their constitutional right to counsel, averring that the detainees were
allowed regular visits by counsel and relatives during their period of detention from July 6 to August 10, 1982 at the PC/INP Command
in Bayombong, Nueva Viscaya; however, when a certain Major Cristobal and Lt. Marcos (alleged to be from the Camp Crame
Intelligence Units) took full control of the investigation, counsels were allowed to visit only on weekends; that when the detainees
were transferred on August 10, 1982 to a place known only to respondents, the detainees' counsels and relatives were not notified,
raising the apprehension that petitioners' constitutional rights to silence, to counsel and against self- incrimination are being violated;
that counsels have tried to locate if the detainees were taken to Camp Crame or Camp Bago Bantay but to no avail; that Major Forondo
of the PC Command in Nueva Viscaya informed Mrs. Josefina Padilla that the detainees were transferred to Tuguegarao, Cagayan,
others to Echague, Isabela; that there seems to be a deliberate and concerted effort by respondents to conceal from counsel and
relatives the detainees' place of detention, raising the apprehension that respondents are using force, violence, threat, intimidation
and other means which vitiate free will to obtain confession and statements from the detainees in violation of their constitutional
rights.

In the resolution of this Court en banc dated August 17, 1982, the writ of habeas corpus was issued and respondents were required to
make a return of the writ. Hearing on the petition was set on August 26, 1982.

In the return to the writ filed on August 23, 1982. respondents, through the Solicitor General, alleged, to wit:

I. AS TO HABEAS CORPUS

1. The detainees mentioned in the petition, with the exception of Tom Vasquez who was temporarily released on July 17, 1982, after
his arrest on July 15, 1982, are all being detained by virtue of a Presidential Commitment Order (PCO) issued on July 12, 1982, pursuant
to LOI No. 1211 dated March 9, 1982, in relation to Presidential Proclamation No. 2045 dated January 17, 1981. The said PCO was
issued by President Ferdinand E. Marcos for violation of P.D. No. 885. ...

2. The corresponding charges against the said detainees have been filed in court and before the Acting Provincial Fiscal of Nueva
Viscaya where they are pleading. A warrant of arrest against detainee Dra. Aurora Parong was issued on August 4, 1982, by the
Municipal Court of Bayombong, for illegal possession of firearm and ammunition. ...

II. AFFIRMATIVE DEFENSE ON HABEAS CORPUS

3. The persons named in the above-mentioned Presidential Commitment Order were arrested and are being detained for offenses
with respect to which under Proclamation No. 2045, the privilege of the writ of habeas corpus continues to be suspended, thus:

NOW, THEREFORE, I, FERDINAND E. MARCOS, President/Prime Minister of the Philippines, by virtue of the powers vested in me by the
Constitution, do hereby revoke Proclamation No. 1081 (Proclaiming a state of Martial Law in the Philippines) and Proclamation No.
1104 (Declaring the Continuation of Martial Law) and proclaim the termination of the state of martial law throughout the Philippines;
Provided, that the call to the Armed Forces of the Philippines to prevent or suppress lawless violence, insurrection, rebellion and
subversion shall continue to be in force and effect; and Provided that in the two autonomous regions in Mindanao, upon the request
of the residents therein, the suspension of the privilege of the writ of habeas corpus shag continue; and in all other places the
suspension of the privilege of the writ shall also continue with respect to persons at present detained as well as others who may
hereafter be similarly detained for the crimes of insurrection or rebellion, subversion, conspiracy or proposals to commit such crimes,
and for all other crimes and offenses committed by them in furtherance or on the occasion thereof, or incident thereto, or in connection
therewith. (Emphasis supplied)

The privilege of the writ of habeas corpus is unavailing as to them. Courts cannot inquire into the validity and cause of their arrest and
detention.

4. The power of the President in an emergency, such as that which necessitated the continued suspension of the privilege of the writ
of habeas corpus, to order the detention of persons believed engaged in crimes related to national security is recognized. (Aquino vs.
Enrile, 59 SCRA 83; Luneta, et al. vs. Special Military Commission, No. 1, et al., 102 SCRA 56).

5. In the instant petition, petitioner Josefina Garcia-Padilla does not appear to have been authorized by the thirteen (13) other
detainees to represent them in the case at bar."
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Accordingly, the petition was duly heard on August 26, 1982. After hearing, the Court issued the following resolution, to wit:

G.R. No. 61388 (In the Matter of the Petition for the Insurance of the Writ of Habeas Corpus of Dr. Aurora Parong, Norberto
Portuguese, Sabino Padilla, Francis Divinagracia, Imelda de los Santos, Benjamin Pineda, Zenaida Mallari, Mariano Soriano, Tito
Tanguilig, Letty Ballogan, Bienvenida Garcia, Eufronio Ortiz, Jr., Juanito Granada and Tom Vasquez; Josefina Garcia-Padilla vs. Minister
Juan Ponce Enrile, Gen. Fabian C. Ver, Gen. Fidel V. Ramos and Lt. Col. Miguel Coronel.)- The return of the writ of habeas corpus and
answer to the prayer for mandamus filed by the Solicitor General for respondents in compliance with the resolution of August 17,
1982 is NOTED.

At the hearing of this case this morning, former Senator Jose W. Diokno, Attorneys Alexander A. Padilla and Efren H. Mercado appeared
for petitioner. Solicitor General Estelito P. Mendoza and Assistant Solicitor General Ramon A. Barcelona, appeared for the respondents.
All of the detainees, except Tom Vasquez, who was temporarily released on July 17, 1982, were present in Court; Dr. Aurora Parong,
Norberto Portuguese, Sabino Padilla, Francis Divinagracia, Imelda de los Santos, Benjamin Pineda, Zenaida Mallari, Mariano Soriano,
Tito Tanguilig, Letty Ballogan, Bienvenida Garcia, Eufronio Ortiz, Jr. and Juanito Granada. Attorney Alexander A. Padilla argued for the
petitioner. Solicitor General Mendoza argued for the respondents. Former Senator Diokno argued in the rebuttal. The Court Resolved
to require the Solicitor General to SUBMIT within five (5) days from date the documents relevant to the issuance of the Presidential
Commitment Order. Thereafter, the case shall be considered SUBMITTED for resolution.

As required, the Solicitor General submitted the documents relevant to the issuance of the Presidential Commitment Order on August
27, 1982, after which the case was submitted for resolution.

The fundamental issue here, as in all petitioner for the writ of habeas corpus, is whether or not petitioners' detention is legal. We have
carefully gone over the claims of the parties in their respective pleadings as well as in the oral argument during the hearing on August
26, 1982, and We find that petitioners have not been illegally deprived of their constitutional right to liberty, neither in the manner of
their arrest, nor by their continued detention, and that the circumstances attendant in the herein case do not warrant their release
on a writ of habeas corpus.

1. At the time of the arrest of the nine (9) of the fourteen (14) detainees herein on July 6, 1982, records reveal that they were then
having conference in the dining room of Dra. Parong's residence from 10:00 a.m. of that same day. Prior thereto, all the fourteen (14)
detainees were under surveillance as they were then Identified as members of the Communist Party of the Philippines (CPP) engaging
in subversive activities and using the house of detainee Dra. Aurora Parong in Bayombong, Nueva Viscaya, as their headquarters.
Caught in flagrante delicto, the nine (9) detainees mentioned scampered towards different directions leaving in top of their conference
table numerous subversive documents, periodicals, pamphlets, books, correspondence, stationaries, and other papers, including a
plan on how they would infiltrate the youth and student sector (code-named YORK). Also found were one (1) .38 cal. revolver with
eight (8) live bullets, nineteen (19) rounds of ammunition for M16 armalite, eighteen thousand six hundred fifty pesos (P18,650.00)
cash believed to be CPP/NPA funds, assorted medicine packed and ready for distribution, as sizeable quantity of printing
paraphernalia, which were then seized. There is no doubt that circumstances attendant in the arrest of the herein detainees fall under
a situation where arrest is lawful even without a judicial warrant as specifically provided for under Section 6(a), Rule 113 of the Rules
of Court and allowed under existing jurisprudence on the matter. As provided therein, a peace officer or a private person may, without
a warrant, arrest a person when the person to be arrested has committed or actually committing, or is about to commit an offense in
his presence.

From the facts as above narrated, the claim of the petitioners that they were initially arrested illegally is, therefore, without basis in
law and in fact. The crimes of insurrection or rebellion, subversion, conspiracy or proposal to commit such crimes, and other crimes
and offenses committed in the furtherance on the occasion thereof, or incident thereto, or in connection therewith under Presidential
Proclamation No. 2045, are all in the nature of continuing offenses which set them apart from the common offenses, aside from their
essentially involving a massive conspiracy of nationwide magnitude. Clearly then, the arrest of the herein detainees was well within
the bounds of the law and existing jurisprudence in our jurisdiction.

2. The arrest of persons involved in the rebellion whether as its fighting armed elements, or for committing non-violent acts but in
furtherance of the rebellion, is more an act of capturing them in the course of an armed conflict, to quell the rebellion, than for the
purpose of immediately prosecuting them in court for a statutory offense. The arrest, therefore, need not follow the usual procedure
in the prosecution of offenses which requires the determination by a judge of the existence of probable cause before the issuance of
a judicial warrant of arrest and the granting of bail if the offense is bailable. Obviously, the absence of a judicial warrant is no legal
impediment to arresting or capturing persons committing overt acts of violence against government forces, or any other milder acts
but equally in pursuance of the rebellious movement. The arrest or capture is thus impelled by the exigencies of the situation that
involves the very survival of society and its government and duly constituted authorities. If killing and other acts of violence against
the rebels find justification in the exigencies of armed hostilities which is of the essence of waging a rebellion or insurrection, most
assuredly so in case of invasion, merely seizing their persons and detaining them while any of these contingencies continues cannot
be less justified. In the language of Moyer vs. Peabody, 1 cited with approval in Aquino, et al. vs. Ponce Enrile, 2 the President " shall
make the ordinary use of the soldiers to that end that he may kill persons who resist, and, of course, that he may use the milder
measure of seizing the bodies of those whom he considers to stand in the way of restoring peace. Such arrests are not necessarily for
punishment, but are by way of precaution, to prevent the exercise of hostile power."

Thus characterized, the arrest and detention of persons ordered by the President through the issuance of Presidential Commitment
Order PCO is merely preventive. "When it comes to a decision by the head of the State upon a matter involving its life, the ordinary
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rights of individuals must yield to what he deems the necessities of the moment. Public danger warrants the substitution of executive
process for judicial process." 3 What should be underscored is that if the greater violation against life itself such as killing, will not be
the subject of judicial inquiry, as it cannot be raised as transgressing against the due process clause that protects life, liberty and
property, lesser violations against liberty, such as arrest and detention, may not be insisted upon as reviewable by the courts.

3. Transcendentally important, therefore, is the question of whether the issuance of a Presidential Commitment Order (PCO) has
provided the legal basis of the detention of herein detainees following their arrest for Proclamation No. 2045 covered offenses. This
question has to be set at rest promptly and decisively, if We are to break a seemingly continuous flow of petitions for habeas corpus,
as what had been seen lately of such petitioners being filed in this Court one after the other.

The function of the PCO is to validate, on constitutional ground, the detention of a person for any of the offenses covered by
Proclamation No. 2045 which continues in force the suspension of the privilege of the writ of habeas corpus, if the arrest has been
made initially without any warrant, its legal effect is to render the writ unavailing as a means of judicially inquiring into the legality of
the detention in view of the suspension of the privilege of the writ. The grant of the power to suspend the said privilege provides the
basis for continuing with perfect legality the detention as long as the invasion or rebellion has not been repelled or quelled, and the
need therefor in the interest of public safety continues.

The significance of the conferment of this power, constitutionally upon the President as Commander-in-Chief, is that the exercise
thereof is not subject to judicial inquiry, with a view to determining its legality in the light of the bill of rights guarantee to individual
freedom. This must be so because the suspension of the privilege is a military measure the necessity of which the President alone may
determine as an incident of his grave responsibility as the Commander-in-Chief of the Armed Forces, of protecting not only public
safety but the very life of the State, the government and duly constituted authorities. This should be clear beyond doubt in the case
of "invasion," along which "rebellion" or "insurrection" is mentioned by the Constitution, which contingency does not present a legal
question on whether there is a violation of the right to personal liberty when any member of the invading force is captured and
detained.

The presidential responsibility is one attended with all urgency when so grave a peril to the life of the Nation besets the country in
times of the aforementioned contingencies. In the discharge of this awesome and sacred responsibility, the President should be free
from interference. The existence of warlike conditions as are created by invasion, rebellion or insurrection, the direst of all
emergencies that can possibly confront a nation, argues, beyond dispute, against subjecting his actions in this regard to judicial inquiry
or interference from whatever source. If freedom from judicial review is conceded in the exercise of his peacetime powers as that of
appointment and of granting pardon, denominated as political powers of the President, it should incontestably be more so with his
wartime power, as it were, to adopt any measure in dealing with situations calling for military action as in case of invasion, rebellion
or insurrection.

The suspension of the privilege of the writ of habeas corpus is one such measure. To be effective, the occasion for its application on
specific individuals should be left to the exclusive and sound judgment of the President, at least while the exigencies of invasion,
rebellion or insurrection persist, and the public safety requires it, a matter, likewise, which should be left for the sole determination
of the President as Commander-in-Chief of the Nation's armed forces. The need for a unified command in such contingencies is
imperative-even axiomatic-as a basic military concept in the art of warfare.

4. From the clear language of the Lansang case, 4 "the function of Court is merely to check — not to supplant — the Executive, or to
ascertain merely whether he has gone beyond the constitutional limits of his jurisdiction, not to exercise the power vested in him or
to determine the wisdom of his act. " If, however, the constitutional right to bail is granted to the herein petitioners by the court,
through the procedure laid down under Rule 114 of the Rules of court, what inevitably results is the supplanting of the decision of the
President to detain pursuant to Proclamation No. 2045, of persons who come under its coverage.

The specific mention in the Constitution of rebellion and insurrection along with invasion and imminent danger thereof, shows that
the terms "rebellion and insurrection" are used therein in the sense of a state or condition of the Nation, not in the concept of a
statutory offense. What, therefore, should determine the legality of imposing what is commonly referred to as "preventive detention"
resulting from the suspension of the privilege of habeas corpus, is the necessity of its adoption as a measure to suppress or quell the
rebellion, or beat off an invasion. The necessity for such measure as a means of defense for national survival quite clearly transcends
in importance and urgency the claim of those detained to the right to bail to obtain their freedom. To hold otherwise would defeat
the purpose of the constitutional grant of the power to suspend the privilege of the writ of habeas corpus on the occasions expressly
mentioned in the charter. For what indeed could the purpose be of suspending the privilege of the writ of habeas corpus other than
to restrict, at least for the duration of the emergency of invasion or rebellion, the right to personal liberty, dictated as it is, in the
greater interest of public safety and national security.

So it is that Proclamation No. 2045 mentions not only rebellion or insurrection as coming within the suspension of the privilege of the
writ of habeas corpus, but also other offenses, including subversion which is not mentioned in the Constitution, committed by reason
or on the occasion of the rebellion, or in connection therewith, or in the furtherance thereof. There need be no alarm over what
libertarian jurists fear as violation of the constitutional right to personal liberty when the President decrees the suspension of the
privilege of habeas corpus. Only those who give cause for it will be subject to restriction of their liberty, as the necessity therefor arises
in the interest of national defense and survival. The constitutional guarantee of individual freedom is intact in all its plenitude and
sanctity, save only as the Constitution has envisioned the need for its limitation, and only to a few, in relation to the entire population,
as the Constitution itself permits in case of overwhelming and imperious necessity.
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5. Worthy of profound notice and keen appreciation is the fact that the authority to suspend the privilege of the writ of habeas corpus
has been deliberately vested on the President as the Commander-in-Chief of the armed forces, together with the related power to call
out the armed forces to suppress lawless violence and impose martial law. 5The choice could not have been more wise and sound, for
no other official may, with equal capability and fitness, be entrusted with the grave responsibility that goes with the grant of the
authority. The legislature was considered in the alternative upon which to lodge the power, or to share in its exercise, but the distilled
wisdom of the Constitutional Convention finally made its choice for the President alone.

As previously noted, "invasion" which is not a statutorily-defined offense and "imminent danger thereof" as mentioned in the
Constitution indicate that "rebellion and insurrection" are also mentioned therein not in their concept as statutorily-defined public
crimes, but as a state or condition of extreme emergency resulting from the existence of the aforesaid events. Now, if captured
enemies from the invading force may not be charged with any statutory offense that would provide the occasion to demand the right
to bail, it is obvious that persons engaged in rebellion or insurrection may not claim the right to be released on bail when similarly
captured or arrested during the continuance of the aforesaid contingency. They may not even claim the right to be charged
immediately in court, as they may rightfully do so, were they being charged with an ordinary or common offense. This is so because
according to legal writers or publicists, the suspension of the privilege of the writ of habeas corpus "has the sole effect of allowing the
executive to defer the trials of persons charged with certain offenses during the period of emergency." 6 This clearly means denial of
the right to be released on bail on being charged in court with bailable offenses.

The suspension of the privilege of the writ of habeas corpus must, indeed, carry with it the suspension of the right to bail, if the
government's campaign to suppress the rebellion is to be enhanced and rendered effective. If the right to bail may be demanded
during the continuance of the rebellion, and those arrested, captured and detained in the course thereof will be released, they would,
without the least doubt, rejoin their comrades in the field thereby jeopardizing the success of government efforts to bring to an end
the invasion, rebellion or insurrection.

Realistically, a person engaged in the rebellion does not, upon being arrested or captured, cease to be as committed to the cause of
the movement. Through a grand conspiracy, as is of the essence of how rebellion is committed, involving a great mass of confederates
bound together by a common goal, he remains in a state of continued participation in the criminal act or design. His heart still beats
with the same emotion for the success of the movement of which he continues to be an ardent adherent and ally. It is simple logic
then to hold that there should be no legal compulsion for a captured rebel to be charged in court, only to be released on bail, while
he is, realistically and legally, still as much as part and parcel of the movement, continuing as it is, as those still engaged in carrying on
actively to attain their goal of overthrowing the established regime. Hence, it is easy to perceive how impressed with absolute verity
is the opinion expressed by two acknowledged authorities on Constitutional law in our country, 7 which We quote:

... If the return to the writ shows that the person in custody was apprehended and detained in areas where the privileges of the writ
have been suspended or for the crimes mentioned in the executive proclamation, the court will suspend further proceedings in the
action.

Impeccable as it is, the opinion could not but find a resonant echo as it did in the recent case of Buscayno vs. Military
Commission; 8 decided after Proclamation No. 2045 was issued, which in terms clear and categorical, held that the constitutional right
to bail is unavailing when the privilege of the writ of habeas corpus is suspended with respect to certain crimes as enumerated or
described in the abovementioned Proclamation.

It is, likewise, all too well-known that when the rebel forces capture government troopers or kidnap private individuals, they do not
accord to them any of the rights now being demanded by the herein petitioners, particularly to be set at liberty upon the filing of bail.
As a matter of common knowledge, captives of the rebels or insurgents are not only not given the right to be released, but also denied
trial of any kind. In some instances, they may even be liquidated unceremoniously. What is then sought by the suspension of the
privilege of the writ of habeas corpus is, among others, to put the government forces on equal fighting terms with the rebels, by
authorizing the detention of their own rebel or dissident captives as the rebellion goes on. In this way, the advantage the rebellion
forces have over those of the government, as when they resort to guerilla tactics with sophisticated weapons, is, at least, minimized,
thereby enhancing the latter's chances of beating their enemy. It would, therefore, seem to be ignoring realities in the name of
misplaced magnanimity and compassion, and for the sake of humanity, to grant the demand for respect of rights supposedly
guaranteed by the Constitution by those who themselves seek to destroy that very same instrument, trampling over it already as they
are still waging war against the government. This stark actuality gives added force and substance to the rationale of the suspension of
the privilege of the writ of habeas corpus in case of invasion, insurrection, rebellion, or imminent danger thereof, when public safety
requires it.

6. Invoking the Lansang case, 9 however, petitioners would ask this Court to review the issuance of the PCO against them, intimating
that arbitrariness attended its issuance because, relying on the evidence supposedly available in the hands of the military, they claim
they are not guilty of rebellion. They also contend that the provisions of LOI No. 1211 have not been complied with.

The Lansang case went no further than to pronounce the suspension of the writ of the privilege of habeas corpus on August 21, 1971,
valid and constitutional, on a finding that there was no arbitrariness attendant to the suspension. It never intended to suggest that for
every individual case of arrest and detention, the writ of habeas corpus is available, even after the suspension of this privilege, to
question the legality of the arrest and detention on ground of arbitrariness. When a person is charged in court for an ordinary offense,
the law does not authorize the filing of a petition for habeas corpus based on the ground that there is absolutely no evidence to hold
him for trial, which, in effect, constitutes an allegation of arbitrariness in the filing of the case against him. The law has afforded him
81

adequate safeguards against arbitrariness, such as the requirement of determining the existence of a probable cause by the judge
before the issuance of the warrant of arrest. The finding of such probable cause may not be immediately brought for review by this
Court in a habeas corpus proceeding, on the claim of arbitrariness. The matter is to be decided on the basis of the evidence, and this
Court is not the proper forum for the review sought, not being a trier of facts. If such a procedure were allowed, it would be easy to
delay and obstruct the prosecution of an offense by a resort to a petition for habeas corpus based on arbitrariness, which most accuse,
if not all, would be most inclined, specially when they are out on bail. The petition now before Us is exactly one of this kind. If granted,
the effect is to transfer the jurisdiction of the trial courts in criminal cases to this Court, which is simply inconceivable. Moreover,
arbitrariness, while so easy to allege, is hard to prove, in the face of the formidable obstacle built up by the presumption of regularity
in the performance of official duty. Unexhilaratingly, this is the revealing experience of this Court in the Lansang case, where it
doubtlessly realized how hardly possible it is to adduce evidence or proof upon which to show the President having acted with
arbitrariness.

7. The last question relates to the legality of the Presidential Commitment Order (PCO) issued by the President on July 12, 1982, tested
by the conformity of its issuance to the procedure laid down under LOI 1211, petitioners insisting that the LOI limits the authority of
the President to cause the arrest and detention of persons engaged in or charged with, the crimes mentioned in Proclamation No.
2045. They contend that the procedure prescribed in the LOI not having been observed, the PCO issued thereunder did not validate
the initial illegal arrest of the herein petitioners as wen as their continued detention.

It must be noted that LOI No. 1211, which provides the guidelines in the arrest and detention of persons engaged in, or charged with,
the crimes mentioned in Proclamation No. 2045, charged with, the crimes mentioned contemplates of three situations when an arrest
can be made, to wit:

1. The arrest and detention effected by virtue of a warrant issued by a judge;

2. The arrest and detention effected by a military commander or the head of a law enforcement agency after it is determined that the
person or persons to be arrested would probably escape or commit further acts which would endanger public order and safety. After
the arrest, however, the case shall be immediately referred to the city or provincial fiscal or to the municipal, city, circuit, or district
judge for preliminary examination or investigation who, if the evidence warrants, shall file the corresponding charges and, thereafter,
we a warrant of arrest;

3. The military commander or the head of the law enforcement agency may apply to the President thru the Minister of National
Defense, for a Presidential Commitment Order under the following circumstances:

(a) When resort to judicial process is not possible or expedient without endangering public order and safety; or

(b) When the release on bail of the person or persons already under arrest by virtue of a judicial warrant would endanger said public
order and safety.

Petitioners appear to place entire reliance on paragraphs 1 and 2 of LOI No. 1211, ignoring paragraph 3 of LOI No. 1211, which provides:

3. The above notwithstanding, the military commander or the head of the law enforcement agency may apply to the President thru
the Minister of National Defense, for a Presidential Commitment Order covering the person or persons believed to be participants in
the commission of the crimes referred to in paragraph 1 under the following circumstances:

(a) When resort to judicial process is not possible or expedient without endangering public order and safety; or

(b) When the release on bail of the person or persons already under arrest by virtue of a judicial warrant would endanger said public
order and safety.

The reliance of petitioners on paragraphs 1 and 2 of LOI 1211 as to the alleged necessity of judicial warrant before a person may be
arrested and detained is not well-founded. Neither is the contention that paragraph 3 of LOI 1211 applies only when judicial process
is not possible. This is a narrow and constricted interpretation of LOI 1211 when viewed in its entirety. Even in instances when a resort
to judicial process is possible, where, in the judgment of the President, a resort thereto would not be expedient because it would
endanger the public order or safety, a PCO is justified. So, too, when release on bail in the ordinary judicial process will invite the same
danger.

By its very nature, and clearly by its language, LOI 1211 is a mere directive of the President as Commander-in-Chief of the Armed
Forces of the Philippines to his subordinates or implementing officers for the ultimate objective of providing guidelines in the arrest
and detention of the persons covered by Presidential Proclamation No. 2045. The purpose is "to insure protection to individual
liberties without sacrificing the requirements of public order and safety and the effectiveness of the campaign against those seeking
the forcible overthrow of the government and duty constituted authorities. " LOI 1211 does not, in any manner, limit the authority of
the President to cause the arrest and detention of persons engaged in, or charged with the crimes or offenses mentioned in said
Proclamation in that he (President) would subject himself to the superior authority of the judge who, under normal judicial processes
in the prosecution of the common offenses, is the one authorized to issue a judicial warrant after a preliminary investigation is
conducted with a finding of probable cause. Those who would read such an intention on the part of the President in issuing LOI 1211
seems to do so in their view that LOI forms part of the law of the land under the 1976 amendment of the Constitution. 10 They would
then contend that a PCO issued not in compliance with the provisions of the LOI would be an illegality and of no effect.
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To form part of the law of the land, the decree, order or LOI must be issued by the President in the exercise of his extraordinary power
of legislation as contemplated in Section 6 of the 1976 amendments to the Constitution, whenever in his judgment, there exists a
grave emergency or a threat or imminence thereof, or whenever the interim Batasan Pambansa or the regular National Assembly fails
or is unable to act adequately on any matter for any reason that in his judgment requires immediate action. There can be no pretense,
much less a showing, that these conditions prompted the President to issue LOI 1211. Verily, not all LOI issued by the President should
be dignified into forming part of the law of the land.

In the event then that the judge believes no warrant shall issue, the President, under Presidential Proclamation No. 2045 and Letter
of Instruction No. 1211, is not bound by such finding, as explicitly provided in paragraph 2 of LOI 1211. That the President avails of the
facilities of the judicial machinery, as is the clear intent of LOI 1211, to aid him in exercising his power to restrain personal liberty, as
dictated by the necessities and exigencies of the emergency, does not indicate any intention on his part to renounce or to allow even
mere curtailment of his power such that the judicial process will thereupon take its normal course, under which the detainees or
accused would then be entitled to demand their right of due process, particularly in relation to their personal liberty. 11 The issuance
of the PCO by the President necessarily constitutes a finding that the conditions he has prescribed in LOI 1211 for the issuance of that
PCO have been met, and intends that the detention would be pursuant to the executive process incident to the government campaign
against the rebels, subversives and dissidents waging a rebellion or insurrection. The ruling in the Nava vs. Gatmaitan case,* as above
intimated, must have shown him that to prosecute the offense through the judicial process of forthwith instead of deferring it, would
neither be wise nor expedient if he were to deal effectively with the grave emergency at hand.

What has been said above shows the need of reexamining the Lansang case with a view to reverting to the ruling of Barcelon vs. Baker,
5 Phil. 87, a 1905 decision, and Montenegro vs. Castaneda, 91 Phil. 882 (1952), that the President's decision to suspend the privilege
of the writ of habeas corpus is "final and conclusive upon the courts, and all other persons." This well-settled ruling was diluted in the
Lansang case which declared that the "function of the Court is merely to check — not to supplant — the Executive, or ascertain merely
whether he has gone beyond the constitutional limits of his jurisdiction not to exercise the power vested in him or to determine the
wisdom of his act." Judicial interference was thus held as permissible, and the test as laid down therein is not whether the President
acted correctly but whether he acted arbitrarily. This would seem to be pure semanticism, if We consider that with particular reference
to the nature of the actions the President would take on the occasion of the grave emergency he has to deal with, which, as clearly
indicated in Section 9, Art. VII of the Constitution partakes of military measures, the judiciary can, with becoming modesty, ill afford
to assume the authority to check or reverse or supplant the presidential actions. On these occasions, the President takes absolute
command, for the very life of the Nation and its government, which, incidentally, includes the courts, is in grave peril. In so doing, the
President is answerable only to his conscience, the people and to God. For their part, in giving him the supreme mandate as their
President, the people can only trust and pray that, giving him their own loyalty with utmost patriotism, the President will not fail them.

In his separate opinion in the Lansang case, then Justice Fernando, now our learned Chief Justice, went along with the proposition
that the decision of the Executive in the exercise of his power to suspend the privilege of the writ of habeas corpus is his alone, and in
his own language, is "ordinarily beyond the ken of the Courts." This is so, as the Founding Fathers must have felt that in the particular
situations at hand, the Executive and the Judiciary should maintain a mutually deferential attitude. This is the very essence of the
doctrine of "political question, " as determining the justiciability of a case. The wisdom of this concept remains well-recognized in
advanced constitutional systems. To erase it from our own system as seems to be what was done in the Lansang case, may neither be
proper nor prudent. A good example could be given in the exercise of the presidential power of pardon which is beyond judicial review,
specially under the new Constitution where the condition that it may be granted only after final conviction has been done away with.

True, the Constitution is the law "equally in war and in peace," 12 as Chief Justice Fernando cited in his brilliant separate opinion in the
same Lansang case. Precisely, it is the Constitution that gives the President specific "military power" in times of warlike conditions as
exist on the occasion of invasion, insurrection or rebellion. Both power and right are constitutionally granted, with the difference that
the guarantee of the right to liberty is for personal benefit, while the grant of the presidential power is for public safety. Which of the
two enjoys primacy over the other is all too obvious. For the power is intended as a limitation of the right, in much the same way as
individual freedom yields to the exercise of the police power of the State in the interest of general welfare. The difference again is
that the power comes into being during extreme emergencies the exercise of which, for complete effectiveness for the purpose it was
granted should not permit intereference, while individual freedom is obviously for full enjoyment in time of peace, but in time of war
or grave peril to the nation, should be limited or restricted. In a true sense then, our Constitution is for both peacetime and in time of
war; it is not that in time of war the Constitution is silenced. The Founding Fathers, with admirable foresight and vision, inserted
provisions therein that come into play and application in time of war or similar emergencies. So it is that, as proclaimed by the
Constitution, the defense of the State is a prime duty of government. Compulsory military service may be imposed, certainly a mandate
that derogates on the right to personal liberty. It, therefore, becomes self-evident that the duty of the judiciary to protect individual
rights must yield to the power of the Executive to protect the State, for if the State perishes, the Constitution, with the Bill of Rights
that guarantees the right to personal liberty, perishes with it.

In times of war or national emergency, the legislature may surrender a part of its power of legislation to the President. 13 Would it not
be as proper and wholly acceptable to lay down the principle that during such crises, the judiciary should be less jealous of its power
and more trusting of the Executive in the exercise of its emergency powers in recognition of the same necessity? Verily, the existence
of the emergencies should be left to President's sole and unfettered determination. His exercise of the power to suspend the privilege
of the writ of habeas corpus on the occasion thereof, should also be beyond judicial review. Arbitrariness, as a ground for judicial
inquiry of presidential acts and decisions, sounds good in theory but impractical and unrealistic, considering how well-nigh impossible
it is for the courts to contradict the finding of the President on the existence of the emergency that gives occasion for the exercise of
83

the power to suspend the privilege of the writ. For the Court to insist on reviewing Presidential action on the ground of arbitrariness
may only result in a violent collision of two jealous powers with tragic consequences, by all means to be avoided, in favor of adhering
to the more desirable and long-tested doctrine of "political question" in reference to the power of judicial review. 14

Amendment No. 6 of the 1973 Constitution, as earlier cited, affords further reason for the reexamination of the Lansang doctrine and
reversion to that of Barcelon vs. Baker and Montenegro vs. Castaneda.

Accordingly, We hold that in times of war and similar emergency as expressly provided in the Constitution, the President may suspend
the privilege of the writ of habeas corpus, which has the effect of allowing the Executive to defer the prosecution of any of the offenses
covered by Proclamation No. 2045, including, as a necessary consequence, the withholding for the duration of the suspension of the
privilege, of the right to bail. The power could have been vested in Congress, instead of the President, as it was so vested in the United
States for which reason, when President Lincoln himself exercised the power in 1861, Chief Justice Taney of the U.S. Supreme Court
expressed the opinion that Congress alone possessed this power under the Constitutional., 15 Incidentally, it seems unimaginable that
the judiciary could subject the suspension, if decreed through congressional action, to the same inquiry as our Supreme Court did with
the act of the President, in the Lansang case, to determine if the Congress acted with arbitrariness.

We further hold that under LOI 1211, a Presidential Commitment Order, the issuance of which is the exclusive prerogative of the
President under the Constitution, may not be declared void by the courts, under the doctrine of "political question," as has been
applied in the Baker and Castaneda cases, on any ground, let alone its supposed violation of the provision of LOI 1211, thus diluting,
if not abandoning the doctrine of the Lansang case. The supreme mandate received by the President from the people and his oath to
do justice to every man should be sufficient guarantee, without need of judicial overseeing, against commission by him of an act of
arbitrariness in the discharge particularly of those duties imposed upon him for the protection of public safety which in itself includes
the protection of life, liberty and property. This Court is not possessed with the attribute of infallibility that when it reviews the acts
of the President in the exercise of his exclusive power, for possible fault of arbitrariness, it would not itself go so far as to commit the
self-same fault.

Finally, We hold that upon the issuance of the Presidential Commitment Order against herein petitioners, their continued detention
is rendered valid and legal, and their right to be released even after the filing of charges against them in court, to depend on the
President, who may order the release of a detainee or his being placed under house arrest, as he has done in meritorious cases.

WHEREFORE, the instant petition should be, as it is hereby dismissed.

SO ORDERED.

[G.R. No. 113539. March 12, 1998]

CELSO R. HALILI and ARTHUR R. HALILI, petitioners, vs. COURT OF APPEALS, HELEN MEYERS GUZMAN, DAVID REY GUZMAN and
EMILIANO CATANIAG, respondents.

DECISION

PANGANIBAN, J.:

The factual findings of a trial court, when affirmed by the Court of Appeals, may no longer be reviewed and reversed by this Court in
a petition for review under Rule 45 of the Rules of Court. The transfer of an interest in a piece of land to an alien may no longer be
assailed on constitutional grounds after the entire parcel has been sold to a qualified citizen.
The Case

These familiar and long-settled doctrines are applied by this Court in denying this petition under Rule 45 to set aside the Decision [1] of
the Court of Appeals[2] in CA-GR CV No. 37829 promulgated on September 14, 1993, the dispositive portion of which states: [3]

WHEREFORE, and upon all the foregoing, the Decision of the court below dated March 10, 1992 dismissing the complaint for lack of
merit is AFFIRMED without pronouncement as to costs.
The Facts

The factual antecedents, as narrated by Respondent Court, are not disputed by the parties. We reproduce them in part, as follows:

Simeon de Guzman, an American citizen, died sometime in 1968, leaving real properties in the Philippines. His forced heirs were his
widow, defendant appellee [herein private respondent] Helen Meyers Guzman, and his son, defendant appellee [also herein private
respondent] David Rey Guzman, both of whom are also American citizens. On August 9, 1989, Helen executed a deed of quitclaim
(Annex A-Complaint), assigning[,] transferring and conveying to David Rey all her rights, titles and interests in and over six parcels of
land which the two of them inherited from Simeon.
84

Among the said parcels of land is that now in litigation, x x x situated in Bagbaguin, Sta. Maria, Bulacan, containing an area of 6,695
square meters, covered by Transfer Certificate of Title No. T-170514 of the Registry of Deeds of Bulacan. The quitclaim having been
registered, TCT No. T-170514 was cancelled and TCT No. T-120259 was issued in the name of appellee David Rey Guzman.

On February 5, 1991, David Rey Guzman sold said parcel of land to defendant-appellee [also herein private respondent] Emiliano
Cataniag, upon which TCT No. T-120259 was cancelled and TCT No. T-130721(M) was issued in the latters name.[4]

Petitioners, who are owners of the adjoining lot, filed a complaint before the Regional Trial Court of Malolos, Bulacan, questioning the
constitutionality and validity of the two conveyances -- between Helen Guzman and David Rey Guzman, and between the latter and
Emiliano Cataniag -- and claiming ownership thereto based on their right of legal redemption under Art. 1621 [5]of the Civil Code.

In its decision[6] dated March 10, 1992,[7] the trial court dismissed the complaint. It ruled that Helen Guzmans waiver of her inheritance
in favor of her son was not contrary to the constitutional prohibition against the sale of land to an alien, since the purpose of the
waiver was simply to authorize David Rey Guzman to dispose of their properties in accordance with the Constitution and the laws of
the Philippines, and not to subvert them. On the second issue, it held that the subject land was urban; hence, petitioners had no
reason to invoke their right of redemption under Art. 1621 of the Civil Code.

The Halilis sought a reversal from the Court of Appeals which, however, denied their appeal. Respondent Court affirmed the factual
finding of the trial court that the subject land was urban. Citing Tejido vs. Zamacoma[8] and Yap vs. Grageda,[9] it further held that,
although the transfer of the land to David Rey may have been invalid for being contrary to the Constitution, there was no more point
in allowing herein petitioners to recover the property, since it has passed on to and was thus already owned by a qualified person.

Hence, this petition.[10]

Issues

The petition submits the following assignment of errors:

x x x the Honorable Court of Appeals -

1. Erred in affirming the conclusion of the trial court that the land in question is urban, not rural

2. Erred in denying petitioners right of redemption under Art. 1621 of the Civil Code

3. Having considered the conveyance from Helen Meyers Guzman to her son David Rey Guzman illegal, erred in not declaring the same
null and void[.][11]
The Courts Ruling

The petition has no merit.

First Issue: The Land Is Urban;

Thus, No Right of Redemption

The first two errors assigned by petitioners being interrelated -- the determination of the first being a prerequisite to the resolution
of the second -- shall be discussed together.

Subject Land Is Urban

Whether the land in dispute is rural or urban is a factual question which, as a rule, is not reviewable by this Court. [12] Basic and long-
settled is the doctrine that findings of fact of a trial judge, when affirmed by the Court of Appeals, are binding upon the Supreme
Court. This admits of only a few exceptions, such as when the findings are grounded entirely on speculation, surmises or conjectures;
when an inference made by the appellate court from its factual findings is manifestly mistaken, absurd or impossible; when there is
grave abuse of discretion in the appreciation of facts; when the findings of the appellate court go beyond the issues of the case, run
contrary to the admissions of the parties to the case or fail to notice certain relevant facts which, if properly considered, will justify a
different conclusion; when there is a misappreciation of facts; when the findings of fact are conclusions without mention of the specific
evidence on which they are based, are premised on the absence of evidence or are contradicted by evidence on record. [13]

The instant case does not fall within any of the aforecited exceptions. In fact, the conclusion of the trial court -- that the subject
property is urban land -- is based on clear and convincing evidence, as shown in its decision which disposed thus:

x x x As observed by the court, almost all the roadsides along the national ghighway [sic] of Bagbaguin, Sta. Maria, Bulacan, are lined
up with residential, commercial or industrial establishments. Lined up along the Bagbaguin Road are factories of feeds, woodcrafts
[sic] and garments, commercial stores for tires, upholstery materials, feeds supply and spare parts.Located therein likewise were the
Pepsi-Cola Warehouse, the Cruz Hospital, three gasoline stations, apartment buildings for commercial purposes and construction
firms. There is no doubt, therefore, that the community is a commercial area thriving in business activities. Only a short portion of said
road [is] vacant. It is to be noted that in the Tax Declaration in the name of Helen Meyers Guzman[,] the subject land is termed
agricultural[,] while in the letter addressed to defendant Emiliano Cataniag, dated October 3, 1991, the Land Regulatory Board attested
that the subject property is commercial and the trend of development along the road is commercial. The Boards classification is based
85

on the present condition of the property and the community thereat. Said classification is far more later [sic] than the tax
declaration.[14]

No Ground to Invoke Right of Redemption

In view of the finding that the subject land is urban in character, petitioners have indeed no right to invoke Art. 1621 of the Civil Code,
which presupposes that the land sought to be redeemed is rural. The provision is clearly worded and admits of no ambiguity in
construction:

ART. 1621. The owners of adjoining lands shall also have the right of redemption when a piece of rural land, the area of which does
not exceed one hectare, is alienated, unless the grantee does not own any rural land.

xxx xxx xxx

Under this article, both lands -- that sought to be redeemed and the adjacent lot belonging to the person exercising the right of
redemption -- must be rural. If one or both are urban, the right cannot be invoked.[15] The purpose of this provision which is limited in
scope to rural lands not exceeding one hectare, is to favor agricultural development. [16] The subject land not being rural and, therefore,
not agricultural, this purpose would not be served if petitioners are granted the right of redemption under Art. 1621. Plainly, under
the circumstances, they cannot invoke it.
Second Issue: Sale to Cataniag Valid

Neither do we find any reversible error in the appellate courts holding that the sale of the subject land to Private Respondent Cataniag
renders moot any question on the constitutionality of the prior transfer made by Helen Guzman to her son David Rey.

True, Helen Guzmans deed of quitclaim -- in which she assigned, transferred and conveyed to David Rey all her rights, titles and
interests over the property she had inherited from her husband -- collided with the Constitution, Article XII, Section 7 of which
provides:

SEC. 7. Save in cases of hereditary succession, no private lands shall be transferred or conveyed except to individuals, corporations, or
associations qualified to acquire or hold lands of the public domain.

The landmark case of Krivenko vs. Register of Deeds[17] settled the issue as to who are qualified (and disqualified) to own public as well
as private lands in the Philippines. Following a long discourse maintaining that the public agricultural lands mentioned in Section 1,
Article XIII of the 1935 Constitution, include residential, commercial and industrial lands, the Court then stated:

Under section 1 of Article XIII [now Sec. 2, Art. XII] of the Constitution, natural resources, with the exception of public agricultural land,
shall not be alienated, and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this constitutional
purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves
who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that section 5 is included in Article XIII, and
it reads as follows:

Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals,
corporations or associations qualified to acquire or hold lands of the public domain in the Philippines.

This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens hands. It
would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated
upon their becoming private agricultural lands in the hands of Filipino citizens. Undoubtedly, as above indicated, section 5 [now Sec.
7] is intended to insure the policy of nationalization contained in section 1 [now Sec. 2]. Both sections must, therefore, be read
together for they have the same purpose and the same subject matter. It must be noticed that the persons against whom the
prohibition is directed in section 5 [now Sec. 7] are the very same persons who under section 1 [now Sec. 2] are disqualified to acquire
or hold lands of the public domain in the Philippines. And the subject matter of both sections is the same, namely, the non
transferability of agricultural land to aliens. x x x[18]

The Krivenko rule was recently reiterated in Ong Ching Po vs. Court of Appeals,[19] which involves a sale of land to a Chinese citizen. The
Court said:

The capacity to acquire private land is made dependent upon the capacity to acquire or hold lands of the public domain. Private land
may be transferred or conveyed only to individuals or entities qualified to acquire lands of the public domain (II Bernas, The
Constitution of the Philippines 439-440 [1988 ed.]).

The 1935 Constitution reserved the right to participate in the disposition, exploitation, development and utilization of all lands of the
public domain and other natural resources of the Philippines for Filipino citizens or corporations at least sixty percent of the capital of
which was owned by Filipinos. Aliens, whether individuals or corporations, have been disqualified from acquiring public lands; hence,
they have also been disqualified from acquiring private lands.[20]

In fine, non-Filipinos cannot acquire or hold title to private lands or to lands of the public domain, except only by way of legal
succession.[21]
86

But what is the effect of a subsequent sale by the disqualified alien vendee to a qualified Filipino citizen? This is not a novel
question. Jurisprudence is consistent that if land is invalidly transferred to an alien who subsequently becomes a citizen or transfers it
to a citizen, the flaw in the original transaction is considered cured and the title of the transferee is rendered valid. [22]

Thus, in United Church Board of World Ministries vs. Sebastian,[23] in which an alien resident who owned properties in the Philippines
devised to an American non-stock corporation part of his shares of stock in a Filipino corporation that owned a tract of land in Davao
del Norte, the Court sustained the invalidity of such legacy. However, upon proof that ownership of the American corporation has
passed on to a 100 percent Filipino corporation, the Court ruled that the defect in the will was rectified by the subsequent transfer of
the property.

The present case is similar to De Castro vs. Tan.[24] In that case, a residential lot was sold to a Chinese. Upon his death, his widow and
children executed an extrajudicial settlement, whereby said lot was allotted to one of his sons who became a naturalized Filipino. The
Court did not allow the original vendor to have the sale annulled and to recover the property, for the reason that the land has since
become the property of a naturalized Filipino citizen who is constitutionally qualified to own land.

Likewise, in the cases of Sarsosa vs. Cuenco,[25] Godinez vs. Pak Luen,[26] Vasquez vs. Li Seng Giap[27] and Herrera vs. Luy Kim
Guan,[28] which similarly involved the sale of land to an alien who thereafter sold the same to a Filipino citizen, the Court again applied
the rule that the subsequent sale can no longer be impugned on the basis of the invalidity of the initial transfer.

The rationale of this principle was explained in Vasquez vs. Li Seng Giap thus:

x x x [I]f the ban on aliens from acquiring not only agricultural but also urban lands, as construed by this Court in the Krivenko case, is
to preserve the nations lands for future generations of Filipinos, that aim or purpose would not be thwarted but achieved by making
lawful the acquisition of real estate by aliens who became Filipino citizens by naturalization. [29]

Accordingly, since the disputed land is now owned by Private Respondent Cataniag, a Filipino citizen, the prior invalid transfer can no
longer be assailed. The objective of the constitutional provision -- to keep our land in Filipino hands -- has been served.

WHEREFORE, the petition is hereby DENIED. The challenged Decision is AFFIRMED. Costs against petitioner.

SO ORDERED.

G.R. No. 127255 June 26, 1998

JOKER P. ARROYO, EDCEL C. LAGMAN, JOHN HENRY R. OSMEÑA, WIGBERTO E. TAÑADA, and RONALDO B. ZAMORA, petitioners,
vs.
JOSE DE VENECIA, RAUL DAZA, RODOLFO ALBANO, THE EXECUTIVE SECRETARY, THE SECRETARY OF FINANCE, AND THE
COMMISSIONER OF INTERNAL REVENUE, respondents.

MENDOZA, J.:

Petitioners seek a rehearing and reconsideration of the Court's decision dismissing their petition for certiorari and prohibition.
Basically, their contention is that when the Majority Leader (Rep. Rodolfo Albano) moved for the approval of the conference
committee report on the bill that became R.A. No. 8240, leading the Chair (Deputy Speaker Raul Daza) to ask if there was any objection
to the motion, and Rep. Joker P. Arroyo asked, "What is that, Mr. Speaker?", the Chair allegedly ignored him and instead declared the
report approved. Petitioners claim that the question "What is that, Mr. Speaker?" was a privileged question or a point of order which,
under the rules of the House, has precedence over other matters, with the exception of motions to adjourn.

The contention has no merit. Rep. Arroyo did not have floor. Without first drawing the attention of the Chair, he simply stood up and
started talking. As a result, the Chair did not hear him and proceeded to ask if there were objections to the Majority Leader's motion.
Hearing none, he declared the report approved. Rule XVI, §96 of the Rules of the House of Representatives provides:

§96. Manner of Addressing the Chair. — When a member desires to speak, he shall rise and respectfully address the Chair "Mr.
Speaker."

The Rules of the Senate are even more emphatic. Rule XXVI, §59 says:

§59. Whenever a Senator wishes to speak, he shall rise and request the President or the Presiding Officer to allow him to have the
floor which consent shall be necessary before he may proceed.

If various Senators wish to have the floor, the President or Presiding Officer shall recognize the one who first made the request.

Indeed, the transcript of the proceedings of November 21, 1996 1 shows that after complaining that he was being "hurried" by the
Majority Leader to finish his interpellation of the sponsor (Rep. Javier) of the conference committee report Rep. Arroyo concluded
and then sat down. However, when the Majority Leader moved for the approval of the conference committee report and the Chair
87

asked if there was any objection to the motion, Rep. Arroyo stood up again and, without requesting to be recognized, asked, "What
is that, Mr. Speaker?" Apparently, the Chair did not hear Rep. Arroyo since his attention was on the Majority Leader. Thus, he
proceeded to ask if there was any objection and, hearing none, declared the report approved and brought down the gavel. At that
point, Rep. Arroyo shouted, "No, no, no, wait a minute," and asked what the question was. Only after he had been told that the
Chair had called for objection to the motion for approval of the report did Rep. Arroyo register his objection. It is not, therefore,
true that Rep. Arroyo was ignored. He was simply not heard because he had not first obtained recognition from the Chair.

Nor is it correct to say that the question ("What is that, Mr. Speaker?'') he was raising was a question of privilege or a point of older.
Rule XX, §121 of the Rules of the House defines a question of privilege as follows —

Sec. 121. Definition. — Questions of privilege are those affecting the duties, conduct, rights, privileges, dignity, integrity or
reputation of the House or of its members, collectively or individually.

while a point of order is defined as follows —

Points of order or questions of order are legislative devices used in requiring the House or any of its Members to observe its own
rules and to follow regular or established parliamentary procedure. In effect, they are either objections to pending proceedings as
violative of some of those rules or demands for immediate return to the aforementioned parliamentary procedure. 2

Petitioners further charge that there was a disregard of Rule XIX, §112 and Rule XVII, §103 of the Rules of the House which require
that the Chair should state a motion and ask for the individual votes of the members instead of merely asking whether there was
any objection to the motion. As explained already in the decision in this case, the practice in cases involving the approval of a
conference committee report is for the Chair simply to ask if there are objections to the motion for approval of the report. This
practice is well-established and is as much a part of parliamentary law as the formal rules of the House. As then Majority Leader
Arturo M. Tolentino explained in 1957 when this practice was questioned:

MR. TOLENTINO. The fact that nobody objects means a unanimous action of the House. Insofar as the matter of procedure is
concerned, this has been a precedent since I came here seven years ago, and it has been the procedure in this House that if
somebody objects, then a debate follows and after the debate, then the voting comes in.

xxx xxx xxx

Mr. Speaker, a point of order was raised by the gentleman from Leyte, and I wonder what his attitude is now on his point of order.
I should just like to state that I believe that we have had a substantial compliance with the Rules. The Rule invoked is not one that
refers to statutory or constitutional requirement, and a substantial compliance, to my mind, is sufficient. When the Chair announces
the vote by saying "Is there any objection?" and nobody objects, then the Chair announces "The bill is approved on second reading."
If there was any doubt as to the vote, any motion to divide would have been proper. So, if that motion is not presented, we assume
that the House approves the measure. So I believe there is substantial compliance here, and if anybody wants a division of the
House he can always ask for it, and the Chair can announce how many are in favor and how many are against. 3

At all events, Rep. Arroyo could have asked for a reconsideration of the ruling of the Chair declaring the conference committee
report approved. It is not true he was prevented from doing so. The session was suspended, obviously to settle the matter amicably.
From all appearances, the misunderstanding was patched up during the nearly hour-long suspension because, after the session was
resumed, Rep. Arroyo did not say anything anymore. As the Journal of November 21, 1996 of the House shows, the session was
thereafter adjourned.

On the same day, the bill was signed by the Speaker of the House and the President of the Senate, and certified by the respective
secretaries of both houses of Congress as having been finally passed. The following day, the bill was signed into law by the President
of the Philippines.

Finally, petitioners take exception to the following statement in the decision that "The question of quorum cannot be raised
repeatedly — especially when the quorum is obviously present — for the purpose of delaying the business of the House." 4 They
contend that, following this ruling, even if only 10 members of the House remain in the session hall because the others have gone
home, the quorum may not be questioned.

That was not the situation in this case, however. As noted in the decision, at 11:48 a.m. on November 21, 1996, Rep. Arroyo
questioned the existence of a quorum, but after a roll call, it was found that was one. After that, he announced he would again
question the quorum, apparently to delay the voting on the conference report. Hence, the statement in the decision that the
question of quorum cannot repeatedly be raised for the purpose of delaying the business of the House.

In sum, there is no basis for the charge that the approval of the conference committee report on what later became R.A. No. 8240
was railroaded through the House of Representatives. Nor is there any need for petitioners to invoke the power of this Court under
Art. VIII, §1 of the Constitution to determine whether, in enacting R.A. No. 8240, the House of Representatives acted with grave
abuse of discretion, since that is what we have precisely done, although the result of our review may not be what petitioners want.
It should be added that, even if petitioners' allegations are true, the disregard of the rules in this case would not affect the validity
of R.A. No. 8240, the rules allegedly violated being merely internal rules of procedure of the House rather than constitutional
requirements for the enactment of laws. It is well settled that a legislative act will not be declared invalid for non-compliance with
internal rules.
88

WHEREFORE, the motion for rehearing and reconsideration is DENIED with FINALITY.

SO ORDERED.

SIMON B. ALDOVINO, JR., DANILO B. FALLER AND G.R. No. 184836

FERDINAND N. TALABONG,

Petitioners,
PUNO, C J.,

CARPIO,

CORONA,

CARPIO MORALES,
- versus -
VELASCO, JR.,

NACHURA,

LEONARDO-DE CASTRO,

BRION,

PERALTA,

BERSAMIN,

DEL CASTILLO,

ABAD, and
COMMISSION ON ELECTIONS AND WILFREDO F. ASILO,
VILLARAMA, JR., JJ.
Respondents.

Promulgated:

December 23, 2009

x ------------------------------------------------------------------------------------------------------- x

DECISION

BRION, J.:

Is the preventive suspension of an elected public official an interruption of his term of office for purposes of the three-term limit rule
under Section 8, Article X of the Constitution and Section 43(b) of Republic Act No. 7160 (RA 7160, or the Local Government Code)?

The respondent Commission on Elections (COMELEC) ruled that preventive suspension is an effective interruption because it renders
the suspended public official unable to provide complete service for the full term; thus, such term should not be counted for the
purpose of the three-term limit rule.

The present petition[1] seeks to annul and set aside this COMELEC ruling for having been issued with grave abuse of discretion
amounting to lack or excess of jurisdiction.
89

THE ANTECEDENTS

The respondent Wilfredo F. Asilo (Asilo) was elected councilor of Lucena City for three consecutive terms: for the 1998-2001, 2001-
2004, and 2004-2007 terms, respectively. In September 2005 or during his 2004-2007 term of office, the Sandiganbayan preventively
suspended him for 90 days in relation with a criminal case he then faced. This Court, however, subsequently lifted the Sandiganbayans
suspension order; hence, he resumed performing the functions of his office and finished his term.

In the 2007 election, Asilo filed his certificate of candidacy for the same position. The petitioners Simon B. Aldovino, Jr., Danilo B.
Faller, and Ferdinand N. Talabong (the petitioners) sought to deny due course to Asilos certificate of candidacy or to cancel it on the
ground that he had been elected and had served for three terms; his candidacy for a fourth term therefore violated the three-term
limit rule under Section 8, Article X of the Constitution and Section 43(b) of RA 7160.

The COMELECs Second Division ruled against the petitioners and in Asilos favour in its Resolution of November 28, 2007. It reasoned
out that the three-term limit rule did not apply, as Asilo failed to render complete service for the 2004-2007 term because of the
suspension the Sandiganbayan had ordered.

The COMELEC en banc refused to reconsider the Second Divisions ruling in its October 7, 2008 Resolution; hence, the PRESENT
PETITION raising the following ISSUES:

1. Whether preventive suspension of an elected local official is an interruption of the three-term limit rule; and

2. Whether preventive suspension is considered involuntary renunciation as contemplated in Section 43(b) of RA 7160

Thus presented, the case raises the direct issue of whether Asilos preventive suspension constituted an interruption that allowed him
to run for a 4th term.

THE COURTS RULING

We find the petition meritorious.

General Considerations

The present case is not the first before this Court on the three-term limit provision of the Constitution, but is the first on the effect of
preventive suspension on the continuity of an elective officials term. To be sure, preventive suspension, as an interruption in the term
of an elective public official, has been mentioned as an example in Borja v. Commission on Elections.[2] Doctrinally, however, Borja is
not a controlling ruling; it did not deal with preventive suspension, but with the application of the three-term rule on the term that an
elective official acquired by succession.

a. The Three-term Limit Rule:

The Constitutional Provision Analyzed

Section 8, Article X of the Constitution states:

90

Section 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years
and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall
not be considered as an interruption in the continuity of his service for the full term for which he was elected.

Section 43 (b) of RA 7160 practically repeats the constitutional provision, and any difference in wording does not assume any
significance in this case.

As worded, the constitutional provision fixes the term of a local elective office and limits an elective officials stay in office to no more
than three consecutive terms. This is the first branch of the rule embodied in Section 8, Article X.

Significantly, this provision refers to a term as a period of time three years during which an official has title to office and can
serve. Appari v. Court of Appeals,[3] a Resolution promulgated on November 28, 2007, succinctly discusses what a term connotes, as
follows:

The word term in a legal sense means a fixed and definite period of time which the law describes that an officer may hold an
office. According to Mechem, the term of office is the period during which an office may be held. Upon expiration of the officers term,
unless he is authorized by law to holdover, his rights, duties and authority as a public officer must ipso factocease. In the law of public
officers, the most and natural frequent method by which a public officer ceases to be such is by the expiration of the terms for which
he was elected or appointed. [Emphasis supplied].

A later case, Gaminde v. Commission on Audit,[4] reiterated that [T]he term means the time during which the officer may claim to hold
office as of right, and fixes the interval after which the several incumbents shall succeed one another.

The limitation under this first branch of the provision is expressed in the negative no such official shall serve for more than three
consecutive terms. This formulation no more than three consecutive terms is a clear command suggesting the existence of an inflexible
rule. While it gives no exact indication of what to serve. . . three consecutive terms exactly connotes, the meaning is clear reference is
to the term, not to the service that a public official may render. In other words, the limitation refers to the term.

The second branch relates to the provisions express initiative to prevent any circumvention of the limitation through voluntary
severance of ties with the public office; it expressly states that voluntary renunciation of office shall not be considered as an
interruption in the continuity of his service for the full term for which he was elected. This declaration complements
the term limitation mandated by the first branch.

A notable feature of the second branch is that it does not textually state that voluntary renunciation is the only actual interruption of
service that does not affect continuity of service for a full term for purposes of the three-term limit rule. It is a pure declaratory
statement of what does not serve as an interruption of service for a full term, but the phrase voluntary renunciation, by itself, is not
without significance in determining constitutional intent.

The word renunciation carries the dictionary meaning of abandonment. To renounce is to give up, abandon, decline, or resign.[5] It is
an act that emanates from its author, as contrasted to an act that operates from the outside. Read with the definition of a term in
mind, renunciation, as mentioned under the second branch of the constitutional provision, cannot but mean an act that results in
cutting short the term, i.e., the loss of title to office. The descriptive word voluntary linked together with renunciation signifies an act
of surrender based on the surenderees own freely exercised will; in other words, a loss of title to office by conscious choice. In the
context of the three-term limit rule, such loss of title is not considered an interruption because it is presumed to be purposely sought
to avoid the application of the term limitation.

The following exchanges in the deliberations of the Constitutional Commission on the term voluntary renunciation shed further light
on the extent of the term voluntary renunciation:
91

MR. MAAMBONG. Could I address the clarificatory question to the Committee? This term voluntary renunciation does not appear in
Section 3 [of Article VI]; it also appears in Section 6 [of Article VI].

MR DAVIDE. Yes.

MR. MAAMBONG. It is also a recurring phrase all over the Constitution. Could the Committee please enlighten us exactly what
voluntary renunciation mean? Is this akin to abandonment?

MR. DAVIDE. Abandonment is voluntary. In other words, he cannot circumvent the restriction by merely resigning at any given time
on the second term.

MR. MAAMBONG. Is the Committee saying that the term voluntary renunciation is more general than abandonment and resignation?

MR. DAVIDE. It is more general, more embracing.[6]

From this exchange and Commissioner Davides expansive interpretation of the term voluntary renunciation, the framers intent
apparently was to close all gaps that an elective official may seize to defeat the three-term limit rule, in the way that voluntary
renunciation has been rendered unavailable as a mode of defeating the three-term limit rule. Harking back to the text of the
constitutional provision, we note further that Commissioner Davides view is consistent with the negative formulation of the first
branch of the provision and the inflexible interpretation that it suggests.

This examination of the wording of the constitutional provision and of the circumstances surrounding its formulation impresses upon
us the clear intent to make term limitation a high priority constitutional objective whose terms must be strictly construed and which
cannot be defeated by, nor sacrificed for, values of less than equal constitutional worth.We view preventive suspension vis--vis term
limitation with this firm mindset.

b. Relevant Jurisprudence on the

Three-term Limit Rule

Other than the above-cited materials, jurisprudence best gives us a lead into the concepts within the provisions contemplation,
particularly on the interruption in the continuity of service for the full term that it speaks of.

Lonzanida v. Commission on Elections[7] presented the question of whether the disqualification on the basis of the three-term limit
applies if the election of the public official (to be strictly accurate, the proclamation as winner of the public official) for his supposedly
third term had been declared invalid in a final and executory judgment. We ruled that the two requisites for the application of the
disqualification (viz., 1. that the official concerned has been elected for three consecutive terms in the same local government post;
and 2. that he has fully served three consecutive terms) were not present. In so ruling, we said:

The clear intent of the framers of the constitution to bar any attempt to circumvent the three-term limit by a voluntary renunciation
of office and at the same time respect the peoples choice and grant their elected official full service of a term is evident in this
provision. Voluntary renunciation of a term does not cancel the renounced term in the computation of the three term
limit; conversely, involuntary severance from office for any length of time short of the full term provided by law amounts to an
interruption of continuity of service. The petitioner vacated his post a few months before the next mayoral elections, not by voluntary
renunciation but in compliance with the legal process of writ of execution issued by the COMELEC to that effect. Such involuntary
severance from office is an interruption of continuity of service and thus, the petitioner did not fully serve the 1995-1998 mayoral term.
[Emphasis supplied]
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Our intended meaning under this ruling is clear: it is severance from office, or to be exact, loss of title, that renders the three-term
limit rule inapplicable.

Ong v. Alegre[8] and Rivera v. COMELEC,[9] like Lonzanida, also involved the issue of whether there had been a completed term for
purposes of the three-term limit disqualification. These cases, however, presented an interesting twist, as their final judgments in the
electoral contest came after the term of the contested office had expired so that the elective officials in these cases were never
effectively unseated.

Despite the ruling that Ong was never entitled to the office (and thus was never validly elected), the Court concluded that there was
nevertheless an election and service for a full term in contemplation of the three-term rule based on the following premises: (1) the
final decision that the third-termer lost the election was without practical and legal use and value, having been promulgated after the
term of the contested office had expired; and (2) the official assumed and continuously exercised the functions of the office from the
start to the end of the term. The Court noted in Ong the absurdity and the deleterious effect of a contrary view that the official
(referring to the winner in the election protest) would, under the three-term rule, be considered to have served a term by virtue of a
veritably meaningless electoral protest ruling, when another actually served the term pursuant to a proclamation made in due course
after an election. This factual variation led the Court to rule differently from Lonzanida.

In the same vein, the Court in Rivera rejected the theory that the official who finally lost the election contest was merely a caretaker
of the office or a mere de facto officer.The Court obeserved that Section 8, Article X of the Constitution is violated and its purpose
defeated when an official fully served in the same position for three consecutive terms. Whether as caretaker or de facto officer, he
exercised the powers and enjoyed the perquisites of the office that enabled him to stay on indefinitely.

Ong and Rivera are important rulings for purposes of the three-term limitation because of what they directly imply. Although the
election requisite was not actually present, the Court still gave full effect to the three-term limitation because of the constitutional
intent to strictly limit elective officials to service for three terms. By so ruling, the Court signalled how zealously it guards the three-
term limit rule. Effectively, these cases teach us to strictly interpret the term limitation rule in favor of limitation rather than its
exception.

Adormeo v. Commission on Elections[10] dealt with the effect of recall on the three-term limit disqualification. The case presented the
question of whether the disqualification applies if the official lost in the regular election for the supposed third term, but was elected
in a recall election covering that term. The Court upheld the COMELECs ruling that the official was not elected for three (3) consecutive
terms. The Court reasoned out that for nearly two years, the official was a private citizen; hence, the continuity of his mayorship was
disrupted by his defeat in the election for the third term.

Socrates v. Commission on Elections[11] also tackled recall vis--vis the three-term limit disqualification. Edward Hagedorn served three
full terms as mayor. As he was disqualified to run for a fourth term, he did not participate in the election that immediately followed
his third term. In this election, the petitioner Victorino Dennis M. Socrates was elected mayor. Less than 1 years after Mayor Socrates
assumed the functions of the office, recall proceedings were initiated against him, leading to the call for a recall election. Hagedorn
filed his certificate of candidacy for mayor in the recall election, but Socrates sought his disqualification on the ground that he
(Hagedorn) had fully served three terms prior to the recall election and was therefore disqualified to run because of the three-term
limit rule. We decided in Hagedorns favor, ruling that:

After three consecutive terms, an elective local official cannot seek immediate reelection for a fourth term. The prohibited election
refers to the next regular election for the same office following the end of the third consecutive term. Any subsequent election, like a
recall election, is no longer covered by the prohibition for two reasons. First, a subsequent election like a recall election is no longer
an immediate reelection after three consecutive terms. Second, the intervening period constitutes an involuntary interruption in
the continuity of service.

When the framers of the Constitution debated on the term limit of elective local officials, the question asked was whether there would
be no further election after three terms, or whether there would be no immediate reelection after three terms.

xxxx
93

Clearly, what the Constitution prohibits is an immediate reelection for a fourth term following three consecutive terms. The
Constitution, however, does not prohibit a subsequent reelection for a fourth term as long as the reelection is not immediately after
the end of the third consecutive term. A recall election mid-way in the term following the third consecutive term is a subsequent
election but not an immediate reelection after the third term.

Neither does the Constitution prohibit one barred from seeking immediate reelection to run in any other subsequent election involving
the same term of office. What the Constitution prohibits is a consecutive fourth term.[12]

Latasa v. Commission on Elections[13] presented the novel question of whether a municipal mayor who had fully served for three
consecutive terms could run as city mayor in light of the intervening conversion of the municipality into a city. During the third term,
the municipality was converted into a city; the cityhood charter provided that the elective officials of the municipality shall, in a
holdover capacity, continue to exercise their powers and functions until elections were held for the new city officials. The Court ruled
that the conversion of the municipality into a city did not convert the office of the municipal mayor into a local government post
different from the office of the city mayor the territorial jurisdiction of the city was the same as that of the municipality; the inhabitants
were the same group of voters who elected the municipal mayor for 3 consecutive terms; and they were the same inhabitants over
whom the municipal mayor held power and authority as their chief executive for nine years. The Court said:

This Court reiterates that the framers of the Constitution specifically included an exception to the peoples freedom to choose those
who will govern them in order to avoid the evil of a single person accumulating excessive power over a particular territorial
jurisdiction as a result of a prolonged stay in the same office. To allow petitioner Latasa to vie for the position of city mayor after
having served for three consecutive terms as a municipal mayor would obviously defeat the very intent of the framers when they
wrote this exception. Should he be allowed another three consecutive terms as mayor of the City of Digos, petitioner would then be
possibly holding office as chief executive over the same territorial jurisdiction and inhabitants for a total of
eighteen consecutive years. This is the very scenario sought to be avoided by the Constitution, if not abhorred by it. [14]

Latasa instructively highlights, after a review of Lonzanida, Adormeo and Socrates, that no three-term limit violation results if a rest
period or break in the service between terms or tenure in a given elective post intervened. In Lonzanida, the petitioner was a private
citizen with no title to any elective office for a few months before the next mayoral elections. Similarly, in Adormeo and Socrates, the
private respondents lived as private citizens for two years and fifteen months, respectively. Thus, these cases establish that the law
contemplates a complete break from office during which the local elective official steps down and ceases to exercise power or authority
over the inhabitants of the territorial jurisdiction of a particular local government unit.

Seemingly differing from these results is the case of Montebon v. Commission on Elections,[15] where the highest-ranking municipal
councilor succeeded to the position of vice-mayor by operation of law. The question posed when he subsequently ran for councilor
was whether his assumption as vice-mayor was an interruption of his term as councilor that would place him outside the operation of
the three-term limit rule. We ruled that an interruption had intervened so that he could again run as councilor. This result seemingly
deviates from the results in the cases heretofore discussed since the elective official continued to hold public office and did not become
a private citizen during the interim. The common thread that identifies Montebon with the rest, however, is that the elective
official vacated the office of councilor and assumed the higher post of vice-mayor by operation of law. Thus, for a time he ceased to
be councilor an interruption that effectively placed him outside the ambit of the three-term limit rule.

c. Conclusion Based on Law

and Jurisprudence

From all the above, we conclude that the interruption of a term exempting an elective official from the three-term limit rule is one
that involves no less than the involuntary loss of title to office. The elective official must have involuntarily left his office for a length
of time, however short, for an effective interruption to occur. This has to be the case if the thrust of Section 8, Article X and its strict
intent are to be faithfully served, i.e., to limit an elective officials continuous stay in office to no more than three consecutive terms,
using voluntary renunciation as an example and standard of what does not constitute an interruption.
94

Thus, based on this standard, loss of office by operation of law, being involuntary, is an effective interruption of service within a term,
as we held in Montebon. On the other hand, temporary inability or disqualification to exercise the functions of an elective post, even
if involuntary, should not be considered an effective interruption of a term because it does not involve the loss of title to office or at
least an effective break from holding office; the office holder, while retaining title, is simply barred from exercising the functions of
his office for a reason provided by law.

An interruption occurs when the term is broken because the office holder lost the right to hold on to his office, and cannot be equated
with the failure to render service. The latter occurs during an office holders term when he retains title to the office but cannot exercise
his functions for reasons established by law. Of course, the term failure to serve cannot be used once the right to office is lost; without
the right to hold office or to serve, then no service can be rendered so that none is really lost.

To put it differently although at the risk of repetition, Section 8, Article X both by structure and substance fixes an elective officials
term of office and limits his stay in office to three consecutive terms as an inflexible rule that is stressed, no less, by citing voluntary
renunciation as an example of a circumvention. The provision should be read in the context of interruption of term, not in the context
of interrupting the full continuity of the exercise of the powers of the elective position. The voluntary renunciation it speaks of refers
only to the elective officials voluntary relinquishment of office and loss of title to this office. It does not speak of the temporary
cessation of the exercise of power or authority that may occur for various reasons, with preventive suspension being only one of
them. To quote Latasa v. Comelec:[16]

Indeed, [T]he law contemplates a rest period during which the local elective official steps down from office and ceases to exercise
power or authority over the inhabitants of the territorial jurisdiction of a particular local government unit. [Emphasis supplied].

Preventive Suspension and

the Three-Term Limit Rule

a. Nature of Preventive Suspension

Preventive suspension whether under the Local Government Code,[17] the Anti-Graft and Corrupt Practices Act,[18] or the Ombudsman
Act[19] is an interim remedial measure to address the situation of an official who have been charged administratively or criminally,
where the evidence preliminarily indicates the likelihood of or potential for eventual guilt or liability.

Preventive suspension is imposed under the Local Government Code when the evidence of guilt is strong and given the gravity of the
offense, there is a possibility that the continuance in office of the respondent could influence the witnesses or pose a threat to the
safety and integrity of the records and other evidence. Under the Anti-Graft and Corrupt Practices Act, it is imposed after a valid
information (that requires a finding of probable cause) has been filed in court, while under the Ombudsman Act, it is imposed when,
in the judgment of the Ombudsman, the evidence of guilt is strong; and (a) the charge involves dishonesty, oppression or grave
misconduct or neglect in the performance of duty; or (b) the charges would warrant removal from the service; or (c) the respondents
continued stay in office may prejudice the case filed against him.

Notably in all cases of preventive suspension, the suspended official is barred from performing the functions of his office and does not
receive salary in the meanwhile, but does not vacate and lose title to his office; loss of office is a consequence that only results upon
an eventual finding of guilt or liability.

Preventive suspension is a remedial measure that operates under closely-controlled conditions and gives a premium to the protection
of the service rather than to the interests of the individual office holder. Even then, protection of the service goes only as far as
a temporary prohibition on the exercise of the functions of the officials office; the official is reinstated to the exercise of his position as
soon as the preventive suspension is lifted. Thus, while a temporary incapacity in the exercise of power results, no position is vacated
when a public official is preventively suspended. This was what exactly happened to Asilo.
95

That the imposition of preventive suspension can be abused is a reality that is true in the exercise of all powers and prerogative under
the Constitution and the laws. The imposition of preventive suspension, however, is not an unlimited power; there are limitations built
into the laws[20] themselves that the courts can enforce when these limitations are transgressed, particularly when grave abuse of
discretion is present. In light of this well-defined parameters in the imposition of preventive suspension, we should not view preventive
suspension from the extreme situation that it can totally deprive an elective office holder of the prerogative to serve and is thus an
effective interruption of an election officials term.

Term limitation and preventive suspension are two vastly different aspects of an elective officials service in office and they do not
overlap. As already mentioned above, preventive suspension involves protection of the service and of the people being served, and
prevents the office holder from temporarily exercising the power of his office. Term limitation, on the other hand, is triggered after
an elective official has served his three terms in office without any break. Its companion concept interruption of a term on the other
hand, requires loss of title to office. If preventive suspension and term limitation or interruption have any commonality at all, this
common point may be with respect to the discontinuity of service that may occur in both. But even on this point, they merely run
parallel to each other and never intersect; preventive suspension, by its nature, is a temporary incapacity to render service during an
unbroken term; in the context of term limitation, interruption of service occurs after there has been a break in the term.

b. Preventive Suspension and

the Intent of the Three-Term

Limit Rule

Strict adherence to the intent of the three-term limit rule demands that preventive suspension should not be considered an
interruption that allows an elective officials stay in office beyond three terms. A preventive suspension cannot simply be a term
interruption because the suspended official continues to stay in office although he is barred from exercising the functions and
prerogatives of the office within the suspension period. The best indicator of the suspended officials continuity in office is the absence
of a permanent replacement and the lack of the authority to appoint one since no vacancy exists.

To allow a preventively suspended elective official to run for a fourth and prohibited term is to close our eyes to this reality and to
allow a constitutional violation through sophistry by equating the temporary inability to discharge the functions of office with the
interruption of term that the constitutional provision contemplates. To be sure, many reasons exist, voluntary or involuntary some of
them personal and some of them by operation of law that may temporarily prevent an elective office holder from exercising the
functions of his office in the way that preventive suspension does. A serious extended illness, inability through force majeure, or the
enforcement of a suspension as a penalty, to cite some involuntary examples, may prevent an office holder from exercising the
functions of his office for a time without forfeiting title to office. Preventive suspension is no different because it disrupts actual
delivery of service for a time within a term. Adopting such interruption of actual service as the standard to determine effective
interruption of term under the three-term rule raises at least the possibility of confusion in implementing this rule, given the many
modes and occasions when actual service may be interrupted in the course of serving a term of office. The standard may reduce the
enforcement of the three-term limit rule to a case-to-case and possibly see-sawing determination of what an effective interruption is.

c. Preventive Suspension and

Voluntary Renunciation

Preventive suspension, because it is imposed by operation of law, does not involve a voluntary act on the part of the suspended
official, except in the indirect sense that he may have voluntarily committed the act that became the basis of the charge against him.
From this perspective, preventive suspension does not have the element of voluntariness that voluntary renunciation embodies.
Neither does it contain the element of renunciation or loss of title to office as it merely involves the temporary incapacity to perform
the service that an elective office demands. Thus viewed, preventive suspension is by its very nature the exact opposite of voluntary
renunciation; it is involuntary and temporary, and involves only the actual delivery of service, not the title to the office. The easy
conclusion therefore is that they are, by nature, different and non-comparable.
96

But beyond the obvious comparison of their respective natures is the more important consideration of how they affect the three-term
limit rule.

Voluntary renunciation, while involving loss of office and the total incapacity to render service, is disallowed by the Constitution as an
effective interruption of a term. It is therefore not allowed as a mode of circumventing the three-term limit rule.

Preventive suspension, by its nature, does not involve an effective interruption of a term and should therefore not be a reason to
avoid the three-term limitation. It can pose as a threat, however, if we shall disregard its nature and consider it an effective
interruption of a term. Let it be noted that a preventive suspension is easier to undertake than voluntary renunciation, as it does not
require relinquishment or loss of office even for the briefest time. It merely requires an easily fabricated administrative charge that
can be dismissed soon after a preventive suspension has been imposed. In this sense, recognizing preventive suspension as an effective
interruption of a term can serve as a circumvention more potent than the voluntary renunciation that the Constitution expressly
disallows as an interruption.

Conclusion

To recapitulate, Asilos 2004-2007 term was not interrupted by the Sandiganbayan-imposed preventive suspension in 2005, as
preventive suspension does not interrupt an elective officials term. Thus, the COMELEC refused to apply the legal command of Section
8, Article X of the Constitution when it granted due course to Asilos certificate of candidacy for a prohibited fourth term. By so refusing,
the COMELEC effectively committed grave abuse of discretion amounting to lack or excess of jurisdiction; its action was a refusal to
perform a positive duty required by no less than the Constitution and was one undertaken outside the contemplation of law. [21]

WHEREFORE, premises considered, we GRANT the petition and accordingly NULLIFY the assailed COMELEC rulings. The private
respondent Wilfredo F. Asilo is declared DISQUALIFIED to run, and perforce to serve, as Councilor of Lucena City for a prohibited fourth
term. Costs against private respondent Asilo.

SO ORDERED.

[G.R. No. 154512. November 12, 2002]

VICTORINO DENNIS M. SOCRATES, Mayor of Puerto Princesa City, petitioner, vs. THE COMMISSION ON ELECTIONS, THE
PREPARATORY RECALL ASSEMBLY (PRA) of Puerto Princesa City, PRA Interim Chairman Punong Bgy. MARK DAVID HAGEDORN, PRA
Interim Secretary Punong Bgy. BENJAMIN JARILLA, PRA Chairman and Presiding Officer Punong Bgy. EARL S. BUENVIAJE and PRA
Secretary Punong Bgy. CARLOS ABALLA, JR. respondents.

[G.R. No. 154683. November 12, 2002]

VICENTE S. SANDOVAL, JR., petitioner, vs. THE COMMISSION ON ELECTIONS, respondent.

[G.R. Nos. 155083-84. November 12, 2002]

MA. FLORES P. ADOVO, MERCY E. GILO and BIENVENIDO OLLAVE, SR., petitioners, vs. THE COMMISSION ON ELECTIONS, and
EDWARD S. HAGEDORN, respondents.

DECISION

CARPIO, J.:

The Case

Before us are consolidated petitions for certiorari[1] seeking the reversal of the resolutions issued by the Commission on Elections
(COMELEC for brevity) in relation to the recall election for mayor of Puerto Princesa City, Palawan.

The Antecedents

On July 2, 2002, 312 out of 528 members of the then incumbent barangay officials of the Puerto Princesa convened themselves into a
Preparatory Recall Assembly (PRA for brevity) at the Gymnasium of Barangay San Jose from 9:00 a.m. to 12:00 noon. The PRA was
convened to initiate the recall[2] of Victorino Dennis M. Socrates (Socrates for brevity) who assumed office as Puerto Princesas mayor
97

on June 30, 2001. The members of the PRA designated Mark David M. Hagedorn, president of the Association of Barangay Captains,
as interim chair of the PRA.

On the same date, the PRA passed Resolution No. 01-02 (Recall Resolution for brevity) which declared its loss of confidence in Socrates
and called for his recall. The PRA requested the COMELEC to schedule the recall election for mayor within 30 days from receipt of the
Recall Resolution.

On July 16, 2002, Socrates filed with the COMELEC a petition, docketed as E.M. No. 02-010 (RC), to nullify and deny due course to the
Recall Resolution.

On August 14, 2002, the COMELEC en banc[3] promulgated a resolution dismissing for lack of merit Socrates petition. The COMELEC
gave due course to the Recall Resolution and scheduled the recall election on September 7, 2002.

On August 21, 2002, the COMELEC en banc promulgated Resolution No. 5673 prescribing the calendar of activities and periods of
certain prohibited acts in connection with the recall election. The COMELEC fixed the campaign period from August 27, 2002 to
September 5, 2002 or a period of 10 days.

On August 23, 2002, Edward M. Hagedorn (Hagedorn for brevity) filed his certificate of candidacy for mayor in the recall election.

On August 17, 2002, Ma. Flores F. Adovo (Adovo for brevity) and Merly E. Gilo (Gilo for brevity) filed a petition before the COMELEC,
docketed as SPA No. 02-492, to disqualify Hagedorn from running in the recall election and to cancel his certificate of candidacy. On
August 30, 2002, a certain Bienvenido Ollave, Sr. (Ollave for brevity) filed a petition-in-intervention in SPA No. 02-492 also seeking to
disqualify Hagedorn. On the same date, a certain Genaro V. Manaay filed another petition, docketed as SPA No. 02-539, against
Hagedorn alleging substantially the same facts and involving the same issues. The petitions were all anchored on the ground that
Hagedorn is disqualified from running for a fourth consecutive term, having been elected and having served as mayor of the city for
three (3) consecutive full terms immediately prior to the instant recall election for the same post. Subsequently, SPA Nos. 02-492 and
02-539 were consolidated.

In a resolution promulgated on September 20, 2002, the COMELECs First Division [4] dismissed for lack of merit SPA Nos. 02-492 and
02-539. The COMELEC declared Hagedorn qualified to run in the recall election. The COMELEC also reset the recall election from
September 7, 2002 to September 24, 2002.

On September 23, 2002, the COMELEC en banc promulgated a resolution denying the motion for reconsideration of Adovo and
Gilo. The COMELEC affirmed the resolution declaring Hagedorn qualified to run in the recall election.

Hence, the instant consolidated petitions.

G.R. No. 154512

Petitioner Socrates seeks to nullify the COMELEC en banc resolution dated August 14, 2002 in E.M. No. 02-010 (RC) which gave due
course to the Recall Resolution and scheduled the recall election on September 7, 2002.

Socrates alleges that the COMELEC gravely abused its discretion in upholding the Recall Resolution. Socrates cites the following
circumstances as legal infirmities attending the convening of the PRA and its issuance of the Recall Resolution: (1) not all members of
the PRA were notified of the meeting to adopt the resolution; (2) the proof of service of notice was palpably and legally deficient; (3)
the members of the PRA were themselves seeking a new electoral mandate from their respective constituents; (4) the adoption of the
resolution was exercised with grave abuse of authority; and (5) the PRA proceedings were conducted in a manner that violated his
and the publics constitutional right to information.

G.R. No. 154683

Petitioner Vicente S. Sandoval, Jr. seeks to annul COMELEC Resolution No. 5673 dated August 21, 2002 insofar as it fixed the recall
election on September 7, 2002, giving the candidates only a ten-day campaign period. He prayed that the COMELEC be enjoined from
holding the recall election on September 7, 2002 and that a new date be fixed giving the candidates at least an additional 15 days to
campaign.

In a resolution dated September 3, 2002, the Court en banc enjoined the COMELEC from implementing Resolution No. 5673 insofar
as it fixed the date of the recall election on September 7, 2002. The Court directed the COMELEC to give the candidates an additional
fifteen 15 days from September 7, 2002 within which to campaign.

Accordingly, on September 9, 2002, the COMELEC en banc issued Resolution No. 5708 giving the candidates an additional 15 days
from September 7, 2002 within which to campaign.Thus, the COMELEC reset the recall election to September 24, 2002.

G.R. Nos. 155083-84

Petitioners Adovo, Gilo and Ollave assail the COMELECs resolutions dated September 20, 2002 and September 23, 2002 in SPA Nos.
02-492 and 02-539 declaring Hagedorn qualified to run for mayor in the recall election. They likewise prayed for the issuance of a
temporary restraining order to enjoin the proclamation of the winning candidate in the recall election.

Petitioners argue that the COMELEC gravely abused its discretion in upholding Hagedorns qualification to run for mayor in the recall
election despite the constitutional and statutory prohibitions against a fourth consecutive term for elective local officials.
98

In a resolution dated September 24, 2002, the Court ordered the COMELEC to desist from proclaiming any winning candidate in the
recall election until further orders from the Court.Petitioners were required to post a P20,000 bond.

On September 27, 2002, Socrates filed a motion for leave to file an attached petition for intervention seeking the same reliefs as those
sought by Adovo, Gilo and Ollave.

In the meantime, Hagedorn garnered the highest number of votes in the recall election with 20,238 votes. Rival candidates Socrates
and Sandoval obtained 17,220 votes and 13,241 votes, respectively.

Hagedorn filed motions to lift the order restraining the COMELEC from proclaiming the winning candidate and to allow him to assume
office to give effect to the will of the electorate.

On October 1, 2002, the Court granted Socrates motion for leave to file a petition for intervention.

The Issues

The issues for resolution of the Court are:

1. In G.R. No. 154512, whether the COMELEC committed grave abuse of discretion in giving due course to the Recall Resolution and
scheduling the recall election for mayor of Puerto Princesa.

2. In G.R. Nos.155083-84, whether Hagedorn is qualified to run for mayor in the recall election of Puerto Princesa on September 24,
2002.

In G.R. No. 154683, the issue of whether the COMELEC committed grave abuse of discretion in fixing a campaign period of only 10
days has become moot. Our Resolution of September 3, 2002 and COMELEC Resolution No. 5708 granted an additional 15 days for
the campaign period as prayed for by petitioner.

First Issue: Validity of the Recall Resolution.

Petitioner Socrates argues that the COMELEC committed grave abuse of discretion in upholding the Recall Resolution despite the
absence of notice to 130 PRA members and the defective service of notice to other PRA members. The COMELEC, however, found
that

On various dates, in the month of June 2002, the proponents for the Recall of incumbent City Mayor Victorino Dennis M. Socrates sent
notices of the convening of the PRA to the members thereof pursuant to Section 70 of the Local Government Code. Copies of the said
notice are in Volumes I and II entitled Notices to PRA. Likewise, Proof of Service for each of the said notices were attached to the
Petition and marked as Annex G of Volumes II and III of the Petition.

Notices were likewise posted in conspicuous places particularly at the Barangay Hall. Photos establishing the same were attached to
the Petition and marked as Annex H. The proponents likewise utilized the broadcast mass media in the dissemination of the convening
of the PRA.

Notices of the convening of the Puerto Princesa PRA were also sent to the following: [a list of 25 names of provincial elective officials,
print and broadcast media practitioners, PNP officials, COMELEC city, regional and national officials, and DILG officials].

xxx

The City Election Officer of Puerto Princesa City in her Certification dated 10 July 2002 certified that upon a thorough and careful
verification of the signatures appearing in PRA Resolution 01-02, x x x the majority of all members of the PRA concerned approved
said resolution. She likewise certified that not a single member/signatory of the PRA complained or objected as to the veracity and
authenticity of their signatures.

The Provincial Election Supervisor of Palawan, Atty. Urbano Arlando, in his Indorsement dated 10 July 2002, stated, upon proper
review, all documents submitted are found in order.

The Acting Director IV, Region IV, in his study dated 30 July 2002 submitted the following recommendations:

This Office, after evaluating the documents filed, finds the instant Petition sufficient in form and substance. That the PRA was validly
constituted and that the majority of all members thereof approved Resolution No. 01-02 calling for the recall of Mayor Victorino
Dennis M. Socrates.

xxx.

This Court is bound by the findings of fact of the COMELEC on matters within the competence and expertise of the COMELEC, unless
the findings are patently erroneous. In Malonzo v. COMELEC,[5] which also dealt with alleged defective service of notice to PRA
members, we ruled that

Needless to state, the issue of propriety of the notices sent to the PRA members is factual in nature, and the determination of the
same is therefore a function of the COMELEC. In the absence of patent error, or serious inconsistencies in the findings, the Court
should not disturb the same. The factual findings of the COMELEC, based on its own assessments and duly supported by gathered
evidence, are conclusive upon the court, more so, in the absence of a substantiated attack on the validity of the same.
99

In the instant case, we do not find any valid reason to hold that the COMELECs findings of fact are patently erroneous.

Socrates also claims that the PRA members had no authority to adopt the Recall Resolution on July 2, 2002 because a majority of PRA
members were seeking a new electoral mandate in the barangay elections scheduled on July 15, 2002. This argument deserves scant
consideration considering that when the PRA members adopted the Recall Resolution their terms of office had not yet expired. They
were all de jure sangguniang barangay members with no legal disqualification to participate in the recall assembly under Section 70 of
the Local Government Code.

Socrates bewails that the manner private respondents conducted the PRA proceedings violated his constitutional right to information
on matters of public concern. Socrates, however, admits receiving notice of the PRA meeting and of even sending his representative
and counsel who were present during the entire PRA proceedings. Proponents of the recall election submitted to the COMELEC the
Recall Resolution, minutes of the PRA proceedings, the journal of the PRA assembly, attendance sheets, notices sent to PRA members,
and authenticated master list of barangay officials in Puerto Princesa. Socrates had the right to examine and copy all these public
records in the official custody of the COMELEC. Socrates, however, does not claim that the COMELEC denied him this right. There is
no legal basis in Socrates claim that respondents violated his constitutional right to information on matters of public concern.

Thus, we rule that the COMELEC did not commit grave abuse of discretion in upholding the validity of the Recall Resolution and in
scheduling the recall election on September 24, 2002.

Second Issue: Hagedorns qualification to run for mayor

in the recall election of September 24, 2002.

The three-term limit rule for elective local officials is found in Section 8, Article X of the Constitution, which states:

Section 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years
and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall
not be considered as an interruption in the continuity of his service for the full term for which he was elected.

This three-term limit rule is reiterated in Section 43 (b) of RA No. 7160, otherwise known as the Local Government Code, which
provides:

Section 43. Term of Office. (a) x x x

(b) No local elective official shall serve for more than three (3) consecutive terms in the same position. Voluntary renunciation of the
office for any length of time shall not be considered as an interruption in the continuity of service for the full term for which the
elective official was elected.

These constitutional and statutory provisions have two parts. The first part provides that an elective local official cannot serve for
more than three consecutive terms. The clear intent is that only consecutive terms count in determining the three-term limit rule. The
second part states that voluntary renunciation of office for any length of time does not interrupt the continuity of service. The clear
intent is that involuntary severance from office for any length of time interrupts continuity of service and prevents the service before
and after the interruption from being joined together to form a continuous service or consecutive terms.

After three consecutive terms, an elective local official cannot seek immediate reelection for a fourth term. The prohibited election
refers to the next regular election for the same office following the end of the third consecutive term. Any subsequent election, like a
recall election, is no longer covered by the prohibition for two reasons. First, a subsequent election like a recall election is no longer
an immediate reelection after three consecutive terms. Second, the intervening period constitutes an involuntary interruption in the
continuity of service.

When the framers of the Constitution debated on the term limit of elective local officials, the question asked was whether there would
be no further election after three terms, or whether there would be no immediate reelection after three terms. This is clear from the
following deliberations of the Constitutional Commission:

THE PRESIDENT: The Acting Floor Leader is recognized.

MR. ROMULO:[6] We are now ready to discuss the two issues, as indicated on the blackboard, and these are Alternative No. I where
there is no further election after a total of three terms and Alternative No. 2 where there is no immediate reelection after three
successive terms.[7]

The Journal of the Constitutional Commission reports the following manifestation on the term of elective local officials:

MANIFESTATION OF MR. ROMULO

Upon resumption of session, Mr. Romulo manifested that the Body would proceed to the consideration of two issues on the term of
Representatives and local officials, namely: 1) Alternative No. 1 (no further reelection after a total of three terms), and 2) Alternative
No. 2 (no immediate reelection after three successive terms).[8]

The framers of the Constitution used the same no immediate reelection question in voting for the term limits of Senators [9] and
Representatives of the House.[10]
100

Clearly, what the Constitution prohibits is an immediate reelection for a fourth term following three consecutive terms. The
Constitution, however, does not prohibit a subsequent reelection for a fourth term as long as the reelection is not immediately after
the end of the third consecutive term. A recall election mid-way in the term following the third consecutive term is a subsequent
election but not an immediate reelection after the third term.

Neither does the Constitution prohibit one barred from seeking immediate reelection to run in any other subsequent election involving
the same term of office. What the Constitution prohibits is a consecutive fourth term. The debates in the Constitutional Commission
evidently show that the prohibited election referred to by the framers of the Constitution is the immediate reelection after the third
term, not any other subsequent election.

If the prohibition on elective local officials is applied to any election within the three-year full term following the three-term limit, then
Senators should also be prohibited from running in any election within the six-year full term following their two-term limit. The
constitutional provision on the term limit of Senators is worded exactly like the term limit of elective local officials, thus:

No Senator shall serve for more than two consecutive terms. Voluntary renunciation of the office for any length of time shall not be
considered as an interruption in the continuity of his service for the full term for which he was elected. [11]

In the debates on the term limit of Senators, the following exchange in the Constitutional Convention is instructive:

GASCON:[12] I would like to ask a question with regard to the issue after the second term. We will allow the Senator to rest for a period
of time before he can run again?

DAVIDE:[13] That is correct.

GASCON: And the question that we left behind before - if the Gentleman will remember - was: How long will that period of rest be? Will
it be one election which is three years or one term which is six years?

DAVIDE: If the Gentleman will remember, Commissioner Rodrigo expressed the view that during the election following the expiration
of the first 12 years, whether such election will be on the third or on the sixth year thereafter, this particular member of the Senate
can run. So, it is not really a period of hibernation for six years. That was the Committees stand.

GASCON: So, effectively, the period of rest would be three years at the least.[14] (Emphasis supplied)

The framers of the Constitution thus clarified that a Senator can run after only three years[15] following his completion of two
terms. The framers expressly acknowledged that the prohibited election refers only to the immediate reelection, and not to any
subsequent election, during the six-year period following the two term limit. The framers of the Constitution did not intend the period
of rest of an elective official who has reached his term limit to be the full extent of the succeeding term.

In the case of Hagedorn, his candidacy in the recall election on September 24, 2002 is not an immediate reelection after his third
consecutive term which ended on June 30, 2001. The immediate reelection that the Constitution barred Hagedorn from seeking
referred to the regular elections in 2001. Hagedorn did not seek reelection in the 2001 elections.

Hagedorn was elected for three consecutive terms in the 1992, 1995 and 1998 elections and served in full his three consecutive terms
as mayor of Puerto Princesa. Under the Constitution and the Local Government Code, Hagedorn could no longer run for mayor in the
2001 elections. The Constitution and the Local Government Code disqualified Hagedorn, who had reached the maximum three-term
limit, from running for a fourth consecutive term as mayor. Thus, Hagedorn did not run for mayor in the 2001 elections. [16] Socrates
ran and won as mayor of Puerto Princesa in the 2001 elections. After Hagedorn ceased to be mayor on June 30, 2001, he became a
private citizen until the recall election of September 24, 2002 when he won by 3,018 votes over his closest opponent, Socrates.

From June 30, 2001 until the recall election on September 24, 2002, the mayor of Puerto Princesa was Socrates. During the same
period, Hagedorn was simply a private citizen. This period is clearly an interruption in the continuity of Hagedorns service as mayor,
not because of his voluntary renunciation, but because of a legal prohibition. Hagedorns three consecutive terms ended on June 30,
2001. Hagedorns new recall term from September 24, 2002 to June 30, 2004 is not a seamless continuation of his previous three
consecutive terms as mayor.One cannot stitch together Hagedorns previous three-terms with his new recall term to make the recall
term a fourth consecutive term because factually it is not. An involuntary interruption occurred from June 30, 2001 to September 24,
2002 which broke the continuity or consecutive character of Hagedorns service as mayor.

In Lonzanida v. Comelec,[17] the Court had occasion to explain interruption of continuity of service in this manner:

x x x The second sentence of the constitutional provision under scrutiny states, Voluntary renunciation of office for any length of
time shall not be considered as an interruption in the continuity of service for the full term for which he was elected. The clear intent
of the framers of the constitution to bar any attempt to circumvent the three-term limit by a voluntary renunciation of office and at
the same time respect the peoples choice and grant their elected official full service of a term is evident in this provision. Voluntary
renunciation of a term does not cancel the renounced term in the computation of the three-term limit; conversely, involuntary
severance from office for any length of time short of the full term provided by law amounts to an interruption of continuity of
service. x x x. (Emphasis supplied)

In Hagedorns case, the nearly 15-month period he was out of office, although short of a full term of three years, constituted an
interruption in the continuity of his service as mayor. The Constitution does not require the interruption or hiatus to be a full term of
101

three years. The clear intent is that interruption for any length of time, as long as the cause is involuntary, is sufficient to break an
elective local officials continuity of service.

In the recent case of Adormeo v. Comelec and Talaga,[18] a unanimous Court reiterated the rule that an interruption consisting of a
portion of a term of office breaks the continuity of service of an elective local official. In Adormeo, Ramon Y. Talaga, Jr. had served
two consecutive full terms as mayor of Lucena City. In his third bid for election as mayor in 1998, Talaga lost to Bernard G.
Tagarao. However, in the recall election of May 12, 2000, Talaga won and served the unexpired term of Tagarao from May 12, 2000
to June 30, 2001. When Talaga ran again for mayor in the 2001 elections, Raymundo Adormeo, the other candidate for mayor,
petitioned for Talagas disqualification on the ground that Talaga had already served three consecutive terms as mayor.

Thus, the issue in Adormeo was whether Talagas recall term was a continuation of his previous two terms so that he was deemed to
have already served three consecutive terms as mayor. The Court ruled that Talaga was qualified to run in the 2001 elections, stating
that the period from June 30, 1998 to May 12, 2000 when Talaga was out of office interrupted the continuity of his service as
mayor. Talagas recall term as mayor was not consecutive to his previous two terms because of this interruption, there having been a
break of almost two years during which time Tagarao was the mayor.

We held in Adormeo that the period an elective local official is out of office interrupts the continuity of his service and prevents his
recall term from being stitched together as a seamless continuation of his previous two consecutive terms. In the instant case, we
likewise hold that the nearly 15 months Hagedorn was out of office interrupted his continuity of service and prevents his recall term
from being stitched together as a seamless continuation of his previous three consecutive terms. The only difference
between Adormeo and the instant case is the time of the interruption. In Adormeo, the interruption occurred after the first two
consecutive terms. In the instant case, the interruption happened after the first three consecutive terms.In both cases, the
respondents were seeking election for a fourth term.

In Adormeo, the recall term of Talaga began only from the date he assumed office after winning the recall election. Talagas recall term
did not retroact to include the tenure in office of his predecessor. If Talagas recall term was made to so retroact, then he would have
been disqualified to run in the 2001 elections because he would already have served three consecutive terms prior to the 2001
elections. One who wins and serves a recall term does not serve the full term of his predecessor but only the unexpired term. The
period of time prior to the recall term, when another elective official holds office, constitutes an interruption in continuity of
service. Clearly, Adormeo established the rule that the winner in the recall election cannot be charged or credited with the full term
of three years for purposes of counting the consecutiveness of an elective officials terms in office.

In the same manner, Hagedorns recall term does not retroact to include the tenure in office of Socrates. Hagedorn can only be
disqualified to run in the September 24, 2002 recall election if the recall term is made to retroact to June 30, 2001, for only then can
the recall term constitute a fourth consecutive term. But to consider Hagedorns recall term as a full term of three years, retroacting
to June 30, 2001, despite the fact that he won his recall term only last September 24, 2002, is to ignore reality. This Court cannot
declare as consecutive or successive terms of office which historically and factually are not.

Worse, to make Hagedorns recall term retroact to June 30, 2001 creates a legal fiction that unduly curtails the freedom of the people
to choose their leaders through popular elections.The concept of term limits is in derogation of the sovereign will of the people to
elect the leaders of their own choosing. Term limits must be construed strictly to give the fullest possible effect to the sovereign will
of the people. As this Court aptly stated in Borja, Jr. v. Comelec:

Thus, a consideration of the historical background of Art. X, 8 of the Constitution reveals that the members of the Constitutional
Commission were as much concerned with preserving the freedom of choice of the people as they were with preventing the
monopolization of political power. Indeed, they rejected a proposal put forth by Commissioner Edmundo F. Garcia that after serving
three consecutive terms or nine years there should be no further reelection for local and legislative officials. Instead, they adopted
the alternative proposal of Commissioner Christian Monsod that such officials be simply barred from running for the same position
in the succeeding election following the expiration of the third consecutive term. Monsod warned against prescreening candidates
[from] whom the people will choose as a result of the proposed absolute disqualification, considering that the draft constitution
contained provisions recognizing people's power.[19] (Emphasis supplied)

A necessary consequence of the interruption of continuity of service is the start of a new term following the interruption. An official
elected in recall election serves the unexpired term of the recalled official. This unexpired term is in itself one term for purposes of
counting the three-term limit. This is clear from the following discussion in the Constitutional Commission:

SUAREZ:[20] For example, a special election is called for a Senator, and the Senator newly elected would have to serve the unexpired
portion of the term. Would that mean that serving the unexpired portion of the term is already considered one term? So, half a term,
which is actually the correct statement, plus one term would disqualify the Senator concerned from running? Is that the meaning of
this provision on disqualification, Madam President?

DAVIDE: Yes, because we speak of term, and if there is a special election, he will serve only for the unexpired portion of that particular
term plus one more term for the Senator and two more terms for the Members of the Lower House. [21]

Although the discussion referred to special elections for Senators and Representatives of the House, the same principle applies to a
recall election of local officials. Otherwise, an elective local official who serves a recall term can serve for more than nine consecutive
years comprising of the recall term plus the regular three full terms. A local official who serves a recall term should know that the
102

recall term is in itself one term although less than three years. This is the inherent limitation he takes by running and winning in the
recall election.

In summary, we hold that Hagedorn is qualified to run in the September 24, 2002 recall election for mayor of Puerto Princesa because:

1. Hagedorn is not running for immediate reelection following his three consecutive terms as mayor which ended on June 30, 2001;

2. Hagedorns continuity of service as mayor was involuntarily interrupted from June 30, 2001 to September 24, 2002 during which
time he was a private citizen;

3. Hagedorns recall term from September 24, 2002 to June 30, 2004 cannot be made to retroact to June 30, 2001 to make a fourth
consecutive term because factually the recall term is not a fourth consecutive term; and

4. Term limits should be construed strictly to give the fullest possible effect to the right of the electorate to choose their leaders.

WHEREFORE, the petitions in G.R. Nos. 154512, 154683 and 155083-84 are DISMISSED. The temporary restraining order issued by this
Court on September 24, 2002 enjoining the proclamation of the winning candidate for mayor of Puerto Princesa in the recall election
of September 24, 2002 is lifted. No costs.

SO ORDERED.

EN BANC

[G.R. No. 117040. January 27, 2000]

RUBEN SERRANO, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ISETANN DEPARTMENT STORE, respondents.

DECISION

MENDOZA, J.:

This is a petition seeking review of the resolutions, dated March 30, 1994 and August 26, 1994, of the National Labor Relations
Commission (NLRC) which reversed the decision of the Labor Arbiter and dismissed petitioner Ruben Serranos complaint for illegal
dismissal and denied his motion for reconsideration. The facts are as follows:

Petitioner was hired by private respondent Isetann Department Store as a security checker to apprehend shoplifters and prevent
pilferage of merchandise.[1] Initially hired on October 4, 1984 on contractual basis, petitioner eventually became a regular employee
on April 4, 1985. In 1988, he became head of the Security Checkers Section of private respondent.[2]

Sometime in 1991, as a cost-cutting measure, private respondent decided to phase out its entire security section and engage the
services of an independent security agency. For this reason, it wrote petitioner the following memorandum: [3]

October 11, 1991

MR. RUBEN SERRANO

PRESENT

Dear Mr. Serrano,

......In view of the retrenchment program of the company, we hereby reiterate our verbal notice to you of your termination as Security
Section Head effective October 11, 1991.

......Please secure your clearance from this office.

Very truly yours,

[Sgd.] TERESITA A. VILLANUEVA

Human Resources Division Manager

The loss of his employment prompted petitioner to file a complaint on December 3, 1991 for illegal dismissal, illegal layoff, unfair labor
practice, underpayment of wages, and nonpayment of salary and overtime pay.[4]

The parties were required to submit their position papers, on the basis of which the Labor Arbiter defined the issues as follows:[5]

Whether or not there is a valid ground for the dismissal of the complainant.

Whether or not complainant is entitled to his monetary claims for underpayment of wages, nonpayment of salaries, 13th month pay
for 1991 and overtime pay.

Whether or not Respondent is guilty of unfair labor practice.

103

Thereafter, the case was heard. On April 30, 1993, the Labor Arbiter rendered a decision finding petitioner to have been illegally
dismissed. He ruled that private respondent failed to establish that it had retrenched its security section to prevent or minimize losses
to its business; that private respondent failed to accord due process to petitioner; that private respondent failed to use reasonable
standards in selecting employees whose employment would be terminated; that private respondent had not shown that petitioner
and other employees in the security section were so inefficient so as to justify their replacement by a security agency, or that "cost-
saving devices [such as] secret video cameras (to monitor and prevent shoplifting) and secret code tags on the merchandise" could
not have been employed; instead, the day after petitioners dismissal, private respondent employed a safety and security supervisor
with duties and functions similar to those of petitioner.

Accordingly, the Labor Arbiter ordered:[6]

WHEREFORE, above premises considered, judgment is hereby decreed:

(a)......Finding the dismissal of the complainant to be illegal and concomitantly, Respondent is ordered to pay complainant full
backwages without qualification or deduction in the amount of P74,740.00 from the time of his dismissal until reinstatement
(computed till promulgation only) based on his monthly salary of P4,040.00/month at the time of his termination but limited to (3)
three years;

(b)......Ordering the Respondent to immediately reinstate the complainant to his former position as security section head or to a
reasonably equivalent supervisorial position in charges of security without loss of seniority rights, privileges and benefits. This order
is immediately executory even pending appeal;

(c)......Ordering the Respondent to pay complainant unpaid wages in the amount of P2,020.73 and proportionate 13th month pay in
the amount of P3,198.30;

(d)......Ordering the Respondent to pay complainant the amount of P7,995.91, representing 10% attorneys fees based on the total
judgment award of P79,959.12.

All other claims of the complainant whether monetary or otherwise is hereby dismissed for lack of merit.

SO ORDERED.

Private respondent appealed to the NLRC which, in its resolution of March 30, 1994, reversed the decision of the Labor Arbiter and
ordered petitioner to be given separation pay equivalent to one month pay for every year of service, unpaid salary, and proportionate
13th month pay. Petitioner filed a motion for reconsideration, but his motion was denied.

The NLRC held that the phase-out of private respondents security section and the hiring of an independent security agency constituted
an exercise by private respondent of "[a] legitimate business decision whose wisdom we do not intend to inquire into and for which
we cannot substitute our judgment"; that the distinction made by the Labor Arbiter between "retrenchment" and the employment of
"cost-saving devices" under Art. 283 of the Labor Code was insignificant because the company official who wrote the dismissal letter
apparently used the term "retrenchment" in its "plain and ordinary sense: to layoff or remove from ones job, regardless of the reason
therefor"; that the rule of "reasonable criteria" in the selection of the employees to be retrenched did not apply because all positions
in the security section had been abolished; and that the appointment of a safety and security supervisor referred to by petitioner to
prove bad faith on private respondents part was of no moment because the position had long been in existence and was separate
from petitioners position as head of the Security Checkers Section.

Hence this petition. Petitioner raises the following issue:

IS THE HIRING OF AN INDEPENDENT SECURITY AGENCY BY THE PRIVATE RESPONDENT TO REPLACE ITS CURRENT SECURITY SECTION A
VALID GROUND FOR THE DISMISSAL OF THE EMPLOYEES CLASSED UNDER THE LATTER?[7]

Petitioner contends that abolition of private respondents Security Checkers Section and the employment of an independent security
agency do not fall under any of the authorized causes for dismissal under Art. 283 of the Labor Code.

Petitioner Laid Off for Cause

Petitioners contention has no merit. Art. 283 provides:

Closure of establishment and reduction of personnel. - The employer may also terminate the employment of any employee due to the
installation of labor-saving devices, redundancy, retrenchment to prevent losses or the closing or cessation of operations of the
establishment or undertaking unless the closing is for the purpose of circumventing the provisions of this Title, by serving a written
notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date thereof. In case
of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least one (1) month pay or to at least one (1) month pay for every year of service, whichever is higher.
In case of retrenchment to prevent losses and in cases of closure or cessation of operations of establishment or undertaking not due
to serious business losses or financial reverses, the separation pay shall be equivalent to at least one (1) month pay or at least one-
half (1/2) month pay for every year of service, whichever is higher. A fraction of at least six (6) months shall be considered as one (1)
whole year.
104

In De Ocampo v. National Labor Relations Commission,[8] this Court upheld the termination of employment of three mechanics in a
transportation company and their replacement by a company rendering maintenance and repair services. It held:

In contracting the services of Gemac Machineries, as part of the companys cost-saving program, the services rendered by the
mechanics became redundant and superfluous, and therefore properly terminable. The company merely exercised its business
judgment or management prerogative. And in the absence of any proof that the management abused its discretion or acted in a
malicious or arbitrary manner, the court will not interfere with the exercise of such prerogative. [9]

In Asian Alcohol Corporation v. National Labor Relations Commission, [10] the Court likewise upheld the termination of employment of
water pump tenders and their replacement by independent contractors. It ruled that an employers good faith in implementing a
redundancy program is not necessarily put in doubt by the availment of the services of an independent contractor to replace the
services of the terminated employees to promote economy and efficiency.

Indeed, as we pointed out in another case, the "[management of a company] cannot be denied the faculty of promoting efficiency and
attaining economy by a study of what units are essential for its operation. To it belongs the ultimate determination of whether services
should be performed by its personnel or contracted to outside agencies . . . [While there] should be mutual consultation, eventually
deference is to be paid to what management decides." [11] Consequently, absent proof that management acted in a malicious or
arbitrary manner, the Court will not interfere with the exercise of judgment by an employer. [12]

In the case at bar, we have only the bare assertion of petitioner that, in abolishing the security section, private respondents real
purpose was to avoid payment to the security checkers of the wage increases provided in the collective bargaining agreement
approved in 1990.[13] Such an assertion is not a sufficient basis for concluding that the termination of petitioners employment was not
a bona fide decision of management to obtain reasonable return from its investment, which is a right guaranteed to employers under
the Constitution.[14] Indeed, that the phase-out of the security section constituted a "legitimate business decision" is a factual finding
of an administrative agency which must be accorded respect and even finality by this Court since nothing can be found in the record
which fairly detracts from such finding.[15]

Accordingly, we hold that the termination of petitioners services was for an authorized cause, i.e., redundancy. Hence, pursuant to
Art. 283 of the Labor Code, petitioner should be given separation pay at the rate of one month pay for every year of service.

Sanctions for Violations of the Notice Requirement

Art. 283 also provides that to terminate the employment of an employee for any of the authorized causes the employer must serve
"a written notice on the workers and the Department of Labor and Employment at least one (1) month before the intended date
thereof." In the case at bar, petitioner was given a notice of termination on October 11, 1991. On the same day, his services were
terminated. He was thus denied his right to be given written notice before the termination of his employment, and the question is the
appropriate sanction for the violation of petitioners right.

To be sure, this is not the first time this question has arisen. In Sebuguero v. NLRC,[16] workers in a garment factory were temporarily
laid off due to the cancellation of orders and a garment embargo. The Labor Arbiter found that the workers had been illegally dismissed
and ordered the company to pay separation pay and backwages. The NLRC, on the other hand, found that this was a case of
retrenchment due to business losses and ordered the payment of separation pay without backwages. This Court sustained the NLRCs
finding. However, as the company did not comply with the 30-day written notice in Art. 283 of the Labor Code, the Court ordered the
employer to pay the workers P2,000.00 each as indemnity.

The decision followed the ruling in several cases involving dismissals which, although based on any of the just causes under Art.
282,[17] were effected without notice and hearing to the employee as required by the implementing rules. [18] As this Court said: "It is
now settled that where the dismissal of one employee is in fact for a just and valid cause and is so proven to be but he is not accorded
his right to due process, i.e., he was not furnished the twin requirements of notice and opportunity to be heard, the dismissal shall be
upheld but the employer must be sanctioned for non-compliance with the requirements of, or for failure to observe, due process." [19]

The rule reversed a long standing policy theretofore followed that even though the dismissal is based on a just cause or the termination
of employment is for an authorized cause, the dismissal or termination is illegal if effected without notice to the employee. The shift
in doctrine took place in 1989 in Wenphil Corp. v. NLRC.[20] In announcing the change, this Court said:[21]

The Court holds that the policy of ordering the reinstatement to the service of an employee without loss of seniority and the payment
of his wages during the period of his separation until his actual reinstatement but not exceeding three (3) years without qualification
or deduction, when it appears he was not afforded due process, although his dismissal was found to be for just and authorized cause
in an appropriate proceeding in the Ministry of Labor and Employment, should be re-examined. It will be highly prejudicial to the
interests of the employer to impose on him the services of an employee who has been shown to be guilty of the charges that warranted
his dismissal from employment. Indeed, it will demoralize the rank and file if the undeserving, if not undesirable, remains in the service.

....

However, the petitioner must nevertheless be held to account for failure to extend to private respondent his right to an investigation
before causing his dismissal. The rule is explicit as above discussed. The dismissal of an employee must be for just or authorized cause
and after due process. Petitioner committed an infraction of the second requirement. Thus, it must be imposed a sanction for its failure
to give a formal notice and conduct an investigation as required by law before dismissing petitioner from employment. Considering
105

the circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00. The measure of this award
depends on the facts of each case and the gravity of the omission committed by the employer.

The fines imposed for violations of the notice requirement have varied
from P1,000.00[22] to P2,000.00[23] to P5,000.00[24] to P10,000.00.[25]

Need for Reexamining the Wenphil Doctrine

Today, we once again consider the question of appropriate sanctions for violations of the notice requirement in light of our experience
during the last decade or so with the Wenphil doctrine. The number of cases involving dismissals without the requisite notice to the
employee, although effected for just or authorized causes, suggests that the imposition of fine for violation of the notice requirement
has not been effective in deterring violations of the notice requirement. Justice Panganiban finds the monetary sanctions "too
insignificant, too niggardly, and sometimes even too late." On the other hand, Justice Puno says there has in effect been fostered a
policy of "dismiss now, pay later" which moneyed employers find more convenient to comply with than the requirement to serve a
30-day written notice (in the case of termination of employment for an authorized cause under Arts. 283-284) or to give notice and
hearing (in the case of dismissals for just causes under Art. 282).

For this reason, they regard any dismissal or layoff without the requisite notice to be null and void even though there are just or
authorized causes for such dismissal or layoff. Consequently, in their view, the employee concerned should be reinstated and paid
backwages.

Validity of Petitioners Layoff Not Affected by Lack of Notice

We agree with our esteemed colleagues, Justices Puno and Panganiban, that we should rethink the sanction of fine for an employers
disregard of the notice requirement. We do not agree, however, that disregard of this requirement by an employer renders the
dismissal or termination of employment null and void. Such a stance is actually a reversion to the discredited pre-Wenphil rule of
ordering an employee to be reinstated and paid backwages when it is shown that he has not been given notice and hearing although
his dismissal or layoff is later found to be for a just or authorized cause. Such rule was abandoned in Wenphil because it is really unjust
to require an employer to keep in his service one who is guilty, for example, of an attempt on the life of the employer or the latters
family, or when the employer is precisely retrenching in order to prevent losses.

The need is for a rule which, while recognizing the employees right to notice before he is dismissed or laid off, at the same time
acknowledges the right of the employer to dismiss for any of the just causes enumerated in Art. 282 or to terminate employment for
any of the authorized causes mentioned in Arts. 283-284. If the Wenphil rule imposing a fine on an employer who is found to have
dismissed an employee for cause without prior notice is deemed ineffective in deterring employer violations of the notice requirement,
the remedy is not to declare the dismissal void if there are just or valid grounds for such dismissal or if the termination is for an
authorized cause. That would be to uphold the right of the employee but deny the right of the employer to dismiss for cause. Rather,
the remedy is to order the payment to the employee of full backwages from the time of his dismissal until the court finds that the
dismissal was for a just cause. But, otherwise, his dismissal must be upheld and he should not be reinstated. This is because his
dismissal is ineffectual.

For the same reason, if an employee is laid off for any of the causes in Arts. 283-284, i.e., installation of a labor-saving device, but the
employer did not give him and the DOLE a 30-day written notice of termination in advance, then the termination of his employment
should be considered ineffectual and he should be paid backwages. However, the termination of his employment should not be
considered void but he should simply be paid separation pay as provided in Art. 283 in addition to backwages.

Justice Puno argues that an employers failure to comply with the notice requirement constitutes a denial of the employees right to
due process. Prescinding from this premise, he quotes the statement of Chief Justice Concepcion in Vda. de Cuaycong v. Vda. de
Sengbengco[26] that "acts of Congress, as well as of the Executive, can deny due process only under the pain of nullity, and judicial
proceedings suffering from the same flaw are subject to the same sanction, any statutory provision to the contrary notwithstanding."
Justice Puno concludes that the dismissal of an employee without notice and hearing, even if for a just cause, as provided in Art. 282,
or for an authorized cause, as provided in Arts. 283-284, is a nullity. Hence, even if just or authorized causes exist, the employee should
be reinstated with full back pay. On the other hand, Justice Panganiban quotes from the statement in People v. Bocar[27] that "[w]here
the denial of the fundamental right of due process is apparent, a decision rendered in disregard of that right is void for lack of
jurisdiction."

Violation of Notice Requirement Not a Denial of Due Process

The cases cited by both Justices Puno and Panganiban refer, however, to the denial of due process by the State, which is not the case
here. There are three reasons why, on the other hand, violation by the employer of the notice requirement cannot be considered a
denial of due process resulting in the nullity of the employees dismissal or layoff.

The first is that the Due Process Clause of the Constitution is a limitation on governmental powers. It does not apply to the exercise of
private power, such as the termination of employment under the Labor Code. This is plain from the text of Art. III, 1 of the
Constitution, viz.: "No person shall be deprived of life, liberty, or property without due process of law. . . ." The reason is simple: Only
the State has authority to take the life, liberty, or property of the individual. The purpose of the Due Process Clause is to ensure that
the exercise of this power is consistent with what are considered civilized methods.
106

The second reason is that notice and hearing are required under the Due Process Clause before the power of organized society are
brought to bear upon the individual. This is obviously not the case of termination of employment under Art. 283. Here the employee
is not faced with an aspect of the adversary system. The purpose for requiring a 30-day written notice before an employee is laid off
is not to afford him an opportunity to be heard on any charge against him, for there is none. The purpose rather is to give him time to
prepare for the eventual loss of his job and the DOLE an opportunity to determine whether economic causes do exist justifying the
termination of his employment.

Even in cases of dismissal under Art. 282, the purpose for the requirement of notice and hearing is not to comply with Due Process
Clause of the Constitution. The time for notice and hearing is at the trial stage. Then that is the time we speak of notice and hearing
as the essence of procedural due process. Thus, compliance by the employer with the notice requirement before he dismisses an
employee does not foreclose the right of the latter to question the legality of his dismissal. As Art. 277(b) provides, "Any decision taken
by the employer shall be without prejudice to the right of the worker to contest the validity or legality of his dismissal by filing a
complaint with the regional branch of the National Labor Relations Commission."

Indeed, to contend that the notice requirement in the Labor Code is an aspect of due process is to overlook the fact that Art. 283 had
its origin in Art. 302 of the Spanish Code of Commerce of 1882 which gave either party to the employer-employee relationship the
right to terminate their relationship by giving notice to the other one month in advance. In lieu of notice, an employee could be laid
off by paying him a mesada equivalent to his salary for one month.[28] This provision was repealed by Art. 2270 of the Civil Code, which
took effect on August 30, 1950. But on June 12, 1954, R.A. No. 1052, otherwise known as the Termination Pay Law, was enacted
reviving the mesada. On June 21, 1957, the law was amended by R.A. No. 1787 providing for the giving of advance notice or the
payment of compensation at the rate of one-half month for every year of service.[29]

The Termination Pay Law was held not to be a substantive law but a regulatory measure, the purpose of which was to give the employer
the opportunity to find a replacement or substitute, and the employee the equal opportunity to look for another job or source of
employment. Where the termination of employment was for a just cause, no notice was required to be given to the employee. [30] It
was only on September 4, 1981 that notice was required to be given even where the dismissal or termination of an employee was for
cause. This was made in the rules issued by the then Minister of Labor and Employment to implement B.P. Blg. 130 which amended
the Labor Code. And it was still much later when the notice requirement was embodied in the law with the amendment of Art. 277(b)
by R.A. No. 6715 on March 2, 1989. It cannot be that the former regime denied due process to the employee. Otherwise, there should
now likewise be a rule that, in case an employee leaves his job without cause and without prior notice to his employer, his act should
be void instead of simply making him liable for damages.

The third reason why the notice requirement under Art. 283 can not be considered a requirement of the Due Process Clause is that
the employer cannot really be expected to be entirely an impartial judge of his own cause. This is also the case in termination of
employment for a just cause under Art. 282 (i.e., serious misconduct or willful disobedience by the employee of the lawful orders of
the employer, gross and habitual neglect of duties, fraud or willful breach of trust of the employer, commission of crime against the
employer or the latters immediate family or duly authorized representatives, or other analogous cases).

Justice Puno disputes this. He says that "statistics in the DOLE will prove that many cases have been won by employees before the
grievance committees manned by impartial judges of the company." The grievance machinery is, however, different because it is
established by agreement of the employer and the employees and composed of representatives from both sides. That is why,
in Batangas Laguna Tayabas Bus Co. v. Court of Appeals,[31] which Justice Puno cites, it was held that "Since the right of [an employee]
to his labor is in itself a property and that the labor agreement between him and [his employer] is the law between the parties, his
summary and arbitrary dismissal amounted to deprivation of his property without due process of law." But here we are dealing with
dismissals and layoffs by employers alone, without the intervention of any grievance machinery. Accordingly in Montemayor v.
Araneta University Foundation,[32] although a professor was dismissed without a hearing by his university, his dismissal for having
made homosexual advances on a student was sustained, it appearing that in the NLRC, the employee was fully heard in his defense.

Lack of Notice Only Makes Termination Ineffectual

Not all notice requirements are requirements of due process. Some are simply part of a procedure to be followed before a right
granted to a party can be exercised. Others are simply an application of the Justinian precept, embodied in the Civil Code,[33] to act
with justice, give everyone his due, and observe honesty and good faith toward ones fellowmen. Such is the notice requirement in
Arts. 282-283. The consequence of the failure either of the employer or the employee to live up to this precept is to make him liable
in damages, not to render his act (dismissal or resignation, as the case may be) void. The measure of damages is the amount of wages
the employee should have received were it not for the termination of his employment without prior notice. If warranted, nominal and
moral damages may also be awarded.

We hold, therefore, that, with respect to Art. 283 of the Labor Code, the employers failure to comply with the notice requirement
does not constitute a denial of due process but a mere failure to observe a procedure for the termination of employment which makes
the termination of employment merely ineffectual. It is similar to the failure to observe the provisions of Art. 1592, in relation to Art.
1191, of the Civil Code[34] in rescinding a contract for the sale of immovable property. Under these provisions, while the power of a
party to rescind a contract is implied in reciprocal obligations, nonetheless, in cases involving the sale of immovable property, the
vendor cannot exercise this power even though the vendee defaults in the payment of the price, except by bringing an action in court
or giving notice of rescission by means of a notarial demand. [35] Consequently, a notice of rescission given in the letter of an attorney
has no legal effect, and the vendee can make payment even after the due date since no valid notice of rescission has been given.[36]
107

Indeed, under the Labor Code, only the absence of a just cause for the termination of employment can make the dismissal of an
employee illegal. This is clear from Art. 279 which provides:

Security of Tenure. - In cases of regular employment, the employer shall not terminate the services of an employee except for a just
cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without
loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. [37]

Thus, only if the termination of employment is not for any of the causes provided by law is it illegal and, therefore, the employee
should be reinstated and paid backwages. To contend, as Justices Puno and Panganiban do, that even if the termination is for a just
or authorized cause the employee concerned should be reinstated and paid backwages would be to amend Art. 279 by adding another
ground for considering a dismissal illegal. What is more, it would ignore the fact that under Art. 285, if it is the employee who fails to
give a written notice to the employer that he is leaving the service of the latter, at least one month in advance, his failure to comply
with the legal requirement does not result in making his resignation void but only in making him liable for damages. [38] This disparity
in legal treatment, which would result from the adoption of the theory of the minority cannot simply be explained by invoking
President Ramon Magsaysays motto that "he who has less in life should have more in law." That would be a misapplication of this
noble phrase originally from Professor Thomas Reed Powell of the Harvard Law School.

Justice Panganiban cites Pepsi-Cola Bottling Co. v. NLRC,[39] in support of his view that an illegal dismissal results not only from want
of legal cause but also from the failure to observe "due process." The Pepsi-Cola case actually involved a dismissal for an alleged loss
of trust and confidence which, as found by the Court, was not proven. The dismissal was, therefore, illegal, not because there was a
denial of due process, but because the dismissal was without cause. The statement that the failure of management to comply with
the notice requirement "taints the dismissal with illegality" was merely a dictum thrown in as additional grounds for holding the
dismissal to be illegal.

Given the nature of the violation, therefore, the appropriate sanction for the failure to give notice is the payment of backwages for
the period when the employee is considered not to have been effectively dismissed or his employment terminated. The sanction is
not the payment alone of nominal damages as Justice Vitug contends.

Unjust Results of Considering Dismissals/Layoffs Without Prior Notice As Illegal

The refusal to look beyond the validity of the initial action taken by the employer to terminate employment either for an authorized
or just cause can result in an injustice to the employer. For not giving notice and hearing before dismissing an employee, who is
otherwise guilty of, say, theft, or even of an attempt against the life of the employer, an employer will be forced to keep in his employ
such guilty employee. This is unjust.

It is true the Constitution regards labor as "a primary social economic force." [40] But so does it declare that it "recognizes the
indispensable role of the private sector, encourages private enterprise, and provides incentives to needed investment." [41] The
Constitution bids the State to "afford full protection to labor." [42] But it is equally true that "the law, in protecting the rights of the
laborer, authorizes neither oppression nor self-destruction of the employer."[43] And it is oppression to compel the employer to
continue in employment one who is guilty or to force the employer to remain in operation when it is not economically in his interest
to do so.

In sum, we hold that if in proceedings for reinstatement under Art. 283, it is shown that the termination of employment was due to
an authorized cause, then the employee concerned should not be ordered reinstated even though there is failure to comply with the
30-day notice requirement. Instead, he must be granted separation pay in accordance with Art. 283, to wit:

In case of termination due to the installation of labor-saving devices or redundancy, the worker affected thereby shall be entitled to a
separation pay equivalent to at least his one (1) month pay or to at least one month for every year of service, whichever is higher. In
case of retrenchment to prevent losses and in cases of closures or cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be equivalent to one (1) month pay or at least one-half (1/2)
month pay for every year of service, whichever is higher. A fraction of at least six months shall be considered one (1) whole year.

If the employees separation is without cause, instead of being given separation pay, he should be reinstated. In either case, whether
he is reinstated or only granted separation pay, he should be paid full backwages if he has been laid off without written notice at least
30 days in advance.

On the other hand, with respect to dismissals for cause under Art. 282, if it is shown that the employee was dismissed for any of the
just causes mentioned in said Art. 282, then, in accordance with that article, he should not be reinstated. However, he must be paid
backwages from the time his employment was terminated until it is determined that the termination of employment is for a just cause
because the failure to hear him before he is dismissed renders the termination of his employment without legal effect.

WHEREFORE, the petition is GRANTED and the resolution of the National Labor Relations Commission is MODIFIED by ordering private
respondent Isetann Department Store, Inc. to pay petitioner separation pay equivalent to one (1) month pay for every year of service,
his unpaid salary, and his proportionate 13th month pay and, in addition, full backwages from the time his employment was
terminated on October 11, 1991 up to the time the decision herein becomes final. For this purpose, this case is REMANDED to the
Labor Arbiter for computation of the separation pay, backwages, and other monetary awards to petitioner.
108

SO ORDERED.

EN BANC

JENNY M. AGABON and G.R. No. 158693

VIRGILIO C. AGABON,

Petitioners, Present:

Davide, Jr., C.J.,

Puno,

Panganiban,

Quisumbing,

Ynares-Santiago,

Sandoval-Gutierrez,

- versus - Carpio,

Austria-Martinez,

Corona,

Carpio-Morales,

Callejo, Sr.,

Azcuna,

Tinga,

Chico-Nazario, and

Garcia, JJ.

NATIONAL LABOR RELATIONS

COMMISSION (NLRC), RIVIERA

HOME IMPROVEMENTS, INC. Promulgated:

and VICENTE ANGELES,

Respondents. November 17, 2004

x ---------------------------------------------------------------------------------------- x

DECISION

YNARES-SANTIAGO, J.:

This petition for review seeks to reverse the decision [1] of the Court of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017,
modifying the decision of National Labor Relations Commission (NLRC) in NLRC-NCR Case No. 023442-00.
109

Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction
materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 1992[2] until
February 23, 1999 when they were dismissed for abandonment of work.

Petitioners then filed a complaint for illegal dismissal and payment of money claims[3] and on December 28, 1999, the Labor Arbiter
rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary claims. The dispositive portion
of the decision states:

WHEREFORE, premises considered, We find the termination of the complainants illegal. Accordingly, respondent is hereby ordered to
pay them their backwages up to November 29, 1999 in the sum of:

1. Jenny M. Agabon - P56, 231.93

2. Virgilio C. Agabon - 56, 231.93

and, in lieu of reinstatement to pay them their separation pay of one (1) month for every year of service from date of hiring up to
November 29, 1999.

Respondent is further ordered to pay the complainants their holiday pay and service incentive leave pay for the years 1996, 1997 and
1998 as well as their premium pay for holidays and rest days and Virgilio Agabons 13 th month pay differential amounting to TWO
THOUSAND ONE HUNDRED FIFTY (P2,150.00) Pesos, or the aggregate amount of ONE HUNDRED TWENTY ONE THOUSAND SIX
HUNDRED SEVENTY EIGHT & 93/100 (P121,678.93) Pesos for Jenny Agabon, and ONE HUNDRED TWENTY THREE THOUSAND EIGHT
HUNDRED TWENTY EIGHT & 93/100 (P123,828.93) Pesos for Virgilio Agabon, as per attached computation of Julieta C. Nicolas, OIC,
Research and Computation Unit, NCR.

SO ORDERED.[4]

On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their work, and were not entitled
to backwages and separation pay. The other money claims awarded by the Labor Arbiter were also denied for lack of evidence. [5]

Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari with the Court of Appeals.

The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment
but ordered the payment of money claims. The dispositive portion of the decision reads:

WHEREFORE, the decision of the National Labor Relations Commission is REVERSED only insofar as it dismissed petitioners money
claims. Private respondents are ordered to pay petitioners holiday pay for four (4) regular holidays in 1996, 1997, and 1998, as well as
their service incentive leave pay for said years, and to pay the balance of petitioner Virgilio Agabons 13 th month pay for 1998 in the
amount of P2,150.00.

SO ORDERED.[6]

Hence, this petition for review on the sole issue of whether petitioners were illegally dismissed.[7]

Petitioners assert that they were dismissed because the private respondent refused to give them assignments unless they agreed to
work on a pakyaw basis when they reported for duty on February 23, 1999. They did not agree on this arrangement because it would
mean losing benefits as Social Security System (SSS) members. Petitioners also claim that private respondent did not comply with the
twin requirements of notice and hearing.[8]
110

Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their work. [9] In fact,
private respondent sent two letters to the last known addresses of the petitioners advising them to report for work. Private
respondents manager even talked to petitioner Virgilio Agabon by telephone sometime in June 1999 to tell him about the new
assignment at Pacific Plaza Towers involving 40,000 square meters of cornice installation work. However, petitioners did not report
for work because they had subcontracted to perform installation work for another company. Petitioners also demanded for an
increase in their wage to P280.00 per day. When this was not granted, petitioners stopped reporting for work and filed the illegal
dismissal case.[10]

It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are accorded not only respect but even finality if the
findings are supported by substantial evidence. This is especially so when such findings were affirmed by the Court of
Appeals.[11] However, if the factual findings of the NLRC and the Labor Arbiter are conflicting, as in this case, the reviewing court may
delve into the records and examine for itself the questioned findings. [12]

Accordingly, the Court of Appeals, after a careful review of the facts, ruled that petitioners dismissal was for a just cause. They had
abandoned their employment and were already working for another employer.

To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the
employee the opportunity to be heard and to defend himself. [13] Article 282 of the Labor Code enumerates the just causes for
termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or
the latters representative in connection with the employees work; (b) gross and habitual neglect by the employee of his duties; (c)
fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d)
commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his
duly authorized representative; and (e) other causes analogous to the foregoing.

Abandonment is the deliberate and unjustified refusal of an employee to resume his employment. [14] It is a form of neglect of duty,
hence, a just cause for termination of employment by the employer. [15] For a valid finding of abandonment, these two factors should
be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-
employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be
deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear proof
that it was deliberate and unjustified.[16]

In February 1999, petitioners were frequently absent having subcontracted for an installation work for another company.
Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private
respondent. This was not the first time they did this. In January 1996, they did not report for work because they were working for
another company. Private respondent at that time warned petitioners that they would be dismissed if this happened again. Petitioners
disregarded the warning and exhibited a clear intention to sever their employer-employee relationship. The record of an employee is
a relevant consideration in determining the penalty that should be meted out to him. [17]

In Sandoval Shipyard v. Clave,[18] we held that an employee who deliberately absented from work without leave or permission from
his employer, for the purpose of looking for a job elsewhere, is considered to have abandoned his job. We should apply that rule with
more reason here where petitioners were absent because they were already working in another company.

The law imposes many obligations on the employer such as providing just compensation to workers, observance of the procedural
requirements of notice and hearing in the termination of employment. On the other hand, the law also recognizes the right of the
employer to expect from its workers not only good performance, adequate work and diligence, but also good conduct [19] and loyalty.
The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical
to his interests.[20]

After establishing that the terminations were for a just and valid cause, we now determine if the procedures for dismissal were
observed.

The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor
Code:

Standards of due process: requirements of notice. In all cases of termination of employment, the following standards of due process
shall be substantially observed:

I. For termination of employment based on just causes as defined in Article 282 of the Code:
111

(a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable
opportunity within which to explain his side;

(b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given
opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds
have been established to justify his termination.

In case of termination, the foregoing notices shall be served on the employees last known address.

Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized
causes involve grounds under the Labor Code which allow the employer to terminate employees. A termination for an authorized
cause requires payment of separation pay. When the termination of employment is declared illegal, reinstatement and full backwages
are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted.

Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices
and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the
grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice
of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give
the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation.

From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor
Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the
dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and
there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed.

In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability.

In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee is entitled to reinstatement
without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary
equivalent computed from the time the compensation was not paid up to the time of actual reinstatement.

In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the
dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.

The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the
petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements
and instead argued that sending notices to the last known addresses would have been useless because they did not reside there
anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements
to the employees last known address.[21] Thus, it should be held liable for non-compliance with the procedural requirements of due
process.

A review and re-examination of the relevant legal principles is appropriate and timely to clarify the various rulings on employment
termination in the light of Serrano v. National Labor Relations Commission.[22]
112

Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was not given any notice. In the 1989 case
of Wenphil Corp. v. National Labor Relations Commission,[23] we reversed this long-standing rule and held that the dismissed employee,
although not given any notice and hearing, was not entitled to reinstatement and backwages because the dismissal was for grave
misconduct and insubordination, a just ground for termination under Article 282. The employee had a violent temper and caused
trouble during office hours, defying superiors who tried to pacify him. We concluded that reinstating the employee and awarding
backwages may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to
observe.[24] We further held that:

Under the circumstances, the dismissal of the private respondent for just cause should be maintained. He has no right to return to his
former employment.

However, the petitioner must nevertheless be held to account for failure to extend to private respondent his right to an investigation
before causing his dismissal. The rule is explicit as above discussed. The dismissal of an employee must be for just or authorized cause
and after due process. Petitioner committed an infraction of the second requirement. Thus, it must be imposed a sanction for its failure
to give a formal notice and conduct an investigation as required by law before dismissing petitioner from employment. Considering
the circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00. The measure of this award
depends on the facts of each case and the gravity of the omission committed by the employer.[25]

The rule thus evolved: where the employer had a valid reason to dismiss an employee but did not follow the due process requirement,
the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as
the Wenphil or Belated Due Process Rule.

On January 27, 2000, in Serrano, the rule on the extent of the sanction was changed. We held that the violation by the employer of
the notice requirement in termination for just or authorized causes was not a denial of due process that will nullify the termination.
However, the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially
declared that the dismissal was for a just or authorized cause.

The rationale for the re-examination of the Wenphil doctrine in Serrano was the significant number of cases involving dismissals
without requisite notices. We concluded that the imposition of penalty by way of damages for violation of the notice requirement was
not serving as a deterrent. Hence, we now required payment of full backwages from the time of dismissal until the time the Court
finds the dismissal was for a just or authorized cause.

Serrano was confronting the practice of employers to dismiss now and pay later by imposing full backwages.

We believe, however, that the ruling in Serrano did not consider the full meaning of Article 279 of the Labor Code which states:

ART. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except
for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement
without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their
monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement.

This means that the termination is illegal only if it is not for any of the justified or authorized causes provided by law. Payment of
backwages and other benefits, including reinstatement, is justified only if the employee was unjustly dismissed.

The fact that the Serrano ruling can cause unfairness and injustice which elicited strong dissent has prompted us to revisit the doctrine.

To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies a system of rights based on moral principles
so deeply imbedded in the traditions and feelings of our people as to be deemed fundamental to a civilized society as conceived by
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our entire history. Due process is that which comports with the deepest notions of what is fair and right and just. [26] It is a constitutional
restraint on the legislative as well as on the executive and judicial powers of the government provided by the Bill of Rights.

Due process under the Labor Code, like Constitutional due process, has two aspects: substantive, i.e., the valid and authorized causes
of employment termination under the Labor Code; and procedural, i.e., the manner of dismissal. Procedural due process requirements
for dismissal are found in the Implementing Rules of P.D. 442, as amended, otherwise known as the Labor Code of the Philippines in
Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and 10. [27] Breaches of these due process requirements violate the
Labor Code. Therefore statutory due process should be differentiated from failure to comply with constitutional due process.

Constitutional due process protects the individual from the government and assures him of his rights in criminal, civil or administrative
proceedings; while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly
terminated without just cause after notice and hearing.

In Sebuguero v. National Labor Relations Commission,[28] the dismissal was for a just and valid cause but the employee was not
accorded due process. The dismissal was upheld by the Court but the employer was sanctioned. The sanction should be in the nature
of indemnification or penalty, and depends on the facts of each case and the gravity of the omission committed by the employer.

In Nath v. National Labor Relations Commission,[29] it was ruled that even if the employee was not given due process, the failure did
not operate to eradicate the just causes for dismissal. The dismissal being for just cause, albeit without due process, did not entitle
the employee to reinstatement, backwages, damages and attorneys fees.

Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc. v. National Labor Relations Commission,[30] which opinion
he reiterated in Serrano, stated:

C. Where there is just cause for dismissal but due process has not been properly observed by an employer, it would not be right to
order either the reinstatement of the dismissed employee or the payment of backwages to him. In failing, however, to comply with
the procedure prescribed by law in terminating the services of the employee, the employer must be deemed to have opted or, in any
case, should be made liable, for the payment of separation pay. It might be pointed out that the notice to be given and the hearing to
be conducted generally constitute the two-part due process requirement of law to be accorded to the employee by the employer.
Nevertheless, peculiar circumstances might obtain in certain situations where to undertake the above steps would be no more than a
useless formality and where, accordingly, it would not be imprudent to apply the res ipsa loquitur rule and award, in lieu of separation
pay, nominal damages to the employee. x x x.[31]

After carefully analyzing the consequences of the divergent doctrines in the law on employment termination, we believe that in cases
involving dismissals for cause but without observance of the twin requirements of notice and hearing, the better rule is to abandon
the Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the employer.
Such sanctions, however, must be stiffer than that imposed in Wenphil. By doing so, this Court would be able to achieve a fair result
by dispensing justice not just to employees, but to employers as well.

The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not complying with statutory due process
may have far-reaching consequences.

This would encourage frivolous suits, where even the most notorious violators of company policy are rewarded by invoking due
process. This also creates absurd situations where there is a just or authorized cause for dismissal but a procedural infirmity invalidates
the termination. Let us take for example a case where the employee is caught stealing or threatens the lives of his co-employees or
has become a criminal, who has fled and cannot be found, or where serious business losses demand that operations be ceased in less
than a month. Invalidating the dismissal would not serve public interest. It could also discourage investments that can generate
employment in the local economy.
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The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment of this
Court to the cause of labor does not prevent us from sustaining the employer when it is in the right, as in this case.[32] Certainly, an
employer should not be compelled to pay employees for work not actually performed and in fact abandoned.

The employer should not be compelled to continue employing a person who is admittedly guilty of misfeasance or malfeasance and
whose continued employment is patently inimical to the employer. The law protecting the rights of the laborer authorizes neither
oppression nor self-destruction of the employer.[33]

It must be stressed that in the present case, the petitioners committed a grave offense, i.e., abandonment, which, if the requirements
of due process were complied with, would undoubtedly result in a valid dismissal.

An employee who is clearly guilty of conduct violative of Article 282 should not be protected by the Social Justice Clause of the
Constitution. Social justice, as the term suggests, should be used only to correct an injustice. As the eminent Justice Jose P. Laurel
observed, social justice must be founded on the recognition of the necessity of interdependence among diverse units of a society
and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life,
consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and
of bringing about the greatest good to the greatest number. [34]

This is not to say that the Court was wrong when it ruled the way it did in Wenphil, Serrano and related cases. Social justice is not
based on rigid formulas set in stone. It has to allow for changing times and circumstances.

Justice Isagani Cruz strongly asserts the need to apply a balanced approach to labor-management relations and dispense justice with
an even hand in every case:

We have repeatedly stressed that social justice or any justice for that matter is for the deserving, whether he be a millionaire in his
mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are to tilt the balance in favor of the poor to whom
the Constitution fittingly extends its sympathy and compassion. But never is it justified to give preference to the poor simply because
they are poor, or reject the rich simply because they are rich, for justice must always be served for the poor and the rich alike, according
to the mandate of the law.[35]

Justice in every case should only be for the deserving party. It should not be presumed that every case of illegal dismissal would
automatically be decided in favor of labor, as management has rights that should be fully respected and enforced by this Court. As
interdependent and indispensable partners in nation-building, labor and management need each other to foster productivity and
economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer.

Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or
render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights, as ruled
in Reta v. National Labor Relations Commission.[36] The indemnity to be imposed should be stiffer to discourage the abhorrent practice
of dismiss now, pay later, which we sought to deter in the Serrano ruling. The sanction should be in the nature of indemnification or
penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the
employer.

Under the Civil Code, nominal damages is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the
defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.[37]

As enunciated by this Court in Viernes v. National Labor Relations Commissions,[38] an employer is liable to pay indemnity in the form
of nominal damages to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the
requirements of due process. The Court, after considering the circumstances therein, fixed the indemnity at P2,590.50, which was
equivalent to the employees one month salary. This indemnity is intended not to penalize the employer but to vindicate or recognize
the employees right to statutory due process which was violated by the employer. [39]
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The violation of the petitioners right to statutory due process by the private respondent warrants the payment of indemnity in the
form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the
relevant circumstances.[40] Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We
believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees.
At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its
Implementing Rules.

Private respondent claims that the Court of Appeals erred in holding that it failed to pay petitioners holiday pay, service incentive
leave pay and 13th month pay.

We are not persuaded.

We affirm the ruling of the appellate court on petitioners money claims. Private respondent is liable for petitioners holiday pay, service
incentive leave pay and 13th month pay without deductions.

As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege non-payment, the
general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. The
reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents which will show
that overtime, differentials, service incentive leave and other claims of workers have been paid are not in the possession of the worker
but in the custody and absolute control of the employer.[41]

In the case at bar, if private respondent indeed paid petitioners holiday pay and service incentive leave pay, it could have easily
presented documentary proofs of such monetary benefits to disprove the claims of the petitioners. But it did not, except with respect
to the 13th month pay wherein it presented cash vouchers showing payments of the benefit in the years disputed.[42] Allegations by
private respondent that it does not operate during holidays and that it allows its employees 10 days leave with pay, other than being
self-serving, do not constitute proof of payment. Consequently, it failed to discharge the onus probandi thereby making it liable for
such claims to the petitioners.

Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio Agabons 13th month pay, we find the same to be
unauthorized. The evident intention of Presidential Decree No. 851 is to grant an additional income in the form of the 13th month pay
to employees not already receiving the same[43] so as to further protect the level of real wages from the ravages of world-wide
inflation.[44] Clearly, as additional income, the 13th month pay is included in the definition of wage under Article 97(f) of the Labor
Code, to wit:

(f) Wage paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of
money whether fixed or ascertained on a time, task, piece , or commission basis, or other method of calculating the same, which is
payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for
services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board,
lodging, or other facilities customarily furnished by the employer to the employee

from which an employer is prohibited under Article 113[45] of the same Code from making any deductions without the employees
knowledge and consent. In the instant case, private respondent failed to show that the deduction of the SSS loan and the value of the
shoes from petitioner Virgilio Agabons 13th month pay was authorized by the latter. The lack of authority to deduct is further bolstered
by the fact that petitioner Virgilio Agabon included the same as one of his money claims against private respondent.

The Court of Appeals properly reinstated the monetary claims awarded by the Labor Arbiter ordering the private respondent to pay
each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive leave
pay for the same period in the amount of P3,255.00 and the balance of Virgilio Agabons thirteenth month pay for 1998 in the amount
of P2,150.00.
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WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals dated January 23, 2003, in CA-G.R.
SP No. 63017, finding that petitioners Jenny and Virgilio Agabon abandoned their work, and ordering private respondent to pay each
of the petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive leave pay for
the same period in the amount of P3,255.00 and the balance of Virgilio Agabons thirteenth month pay for 1998 in the amount of
P2,150.00 is AFFIRMED with the MODIFICATION that private respondent Riviera Home Improvements, Inc. is further ORDERED to pay
each of the petitioners the amount of P30,000.00 as nominal damages for non-compliance with statutory due process.

No costs.

SO ORDERED.