PHILIP MORRIS, INC., BENSON & HEDGES
With these caveat, we shall now shift our
(CANADA), INC., AND FABRIQUES OF TABAC
REUNIES, S.A. vs.
THE COURT OF APPEALS AND FORTUNE
TOBACCO CORPORATION
MELO, J.:
In the petition before us, petitioners Philip Morris, Inc.,
Benson and Hedges (Canada), Inc., and Fabriques of
Tabac Reunies, S.A., are ascribing whimsical exercise of
the faculty conferred upon magistrates by Section 6, Rule
58 of the Revised Rules of Court when respondent Court
of Appeals lifted the writ of preliminary injunction it earlier
had issued against Fortune Tobacco Corporation, herein
private respondent, from manufacturing and selling
"MARK" cigarettes in the local market.
Banking on the thesis that petitioners' respective symbols
"MARK VII", "MARK TEN", and "LARK", also for
cigarettes, must be protected against unauthorized
appropriation, petitioners twice solicited the ancillary writ
in the course the main suit for infringement but the court of
origin was unpersuaded.
Before we proceed to the generative facts of the case at
bar, it must be emphasized that resolution of the issue on
the propriety of lifting the writ of preliminary injunction
should not be construed as a prejudgment of the suit
below. Aware of the fact that the discussion we are about
to enter into involves a mere interlocutory order, a
discourse on the aspect infringement must thus be
avoided.
attention to the events which spawned the controversy.
As averred in the initial pleading, Philip Morris,
Incorporated is a corporation organized under the laws of
the State of Virginia, United States of America, and does
business at 100 Park Avenue, New York, New York,
United States of America. The two other plaintiff foreign
corporations, which are wholly-owned subsidiaries of
Philip Morris, Inc., are similarly not doing business in the
Philippines but are suing on an isolated transaction. As
registered owners "MARK VII", "MARK TEN", and "LARK"
per certificates of registration issued by the Philippine
Patent Office on April 26, 1973, May 28, 1964, and March
25, 1964, plaintiffs-petitioners asserted that defendant
Fortune Tobacco Corporation has no right to manufacture
and sell cigarettes bearing the allegedly identical or
confusingly similar trademark "MARK" in contravention of
Section 22 of the Trademark Law, and should, therefore,
be precluded during the pendency of the case from
performing the acts complained of via a preliminary
injunction (p. 75, Court of Appeals Rollo in AC-G.R. SP
No. 13132).
For its part, Fortune Tobacco Corporation admitted
petitioners' certificates of registration with the Philippine
Patent Office subject to the affirmative and special defense
on misjoinder of party plaintiffs. Private respondent alleged
further that it has been authorized by the Bureau of Internal
Revenue to manufacture and sell cigarettes bearing the
trademark "MARK", and that "MARK" is a common word
which cannot be exclusively appropriated (p.158, Court of
Appeals Rollo in A.C.-G.R. SP No. 13132). On March 28,
1983, petitioners' prayer for preliminary injunction was
denied by the Presiding Judge of Branch 166 of the
Regional Trial Court of the National Capital Judicial Region
stationed at Pasig, premised upon the following
propositions:
Plaintiffs admit in paragraph 2 of the complaint that ". . .
they are
not doing business in the Philippines and are suing on an
isolated transaction . . .". This simply means that they are
not engaged in the sale, manufacture, importation,
expor[t]ation and advertisement of their cigarette products
in the Philippines. With this admission, defendant asks: ".
. . how could defendant's "MARK" cigarettes cause the
former "irreparable damage" within the territorial limits of
the Philippines?" Plaintiffs maintain that since their
trademarks are entitled to protection by treaty obligation
under Article 2 of the Paris Convention of which the
Philippines is a member and ratified by Resolution No. 69
of the Senate of the Philippines and as such, have the
force and effect of law under Section 12, Article XVII of our
Constitution and since this is an action for a violation or
infringement of a trademark or trade name by defendant,
such mere allegation is sufficient even in the absence of
proof to support it. To the mind of the Court, precisely, this
is the issue in the main case to determine whether or not
there has been an invasion of plaintiffs' right of property to
such trademark or trade name. This claim of plaintiffs is
disputed by defendant in paragraphs 6 and 7 of the
Answer; hence, this cannot be made a basis for the
issuance of a writ of preliminary injunction.
There is no dispute that the First Plaintiff is the registered
owner of trademar[k] "MARK VII" with Certificate of
Registration No. 18723, dated April 26,1973 while the
Second Plaintiff is likewise the registered owner of
trademark "MARK TEN" under Certificate of Registration
No. 11147, dated May 28, 1963 and the Third Plaintiff is a
registrant of trademark "LARK" as shown by Certificate of
Registration No. 10953 dated March 23, 1964, in addition
to a pending application for registration of trademark
"MARK VII" filed on November 21, 1980 under Application
Serial No. 43243, all in the Philippine Patent Office. In
same the manner, defendant has a pending application for
registration of the trademark "LARK" cigarettes with the
Philippine Patent Office under Application Serial No.
44008. Defendant contends that since plaintiffs are "not
doing business in the Philippines" coupled the fact that the
Director of Patents has not denied their pending
application for registration of its trademark "MARK", the
grant of a writ of preliminary injunction is premature.
Plaintiffs contend that this act(s) of defendant is but a
subterfuge to give semblance of good faith intended to
deceive the public and patronizers into buying the products
and create the impression that defendant's goods are
identical with or come from the same source as plaintiffs'
products or that the defendant is a licensee of plaintiffs
when in truth and in fact the former is not. But the fact
remains that with its pending application, defendant has
embarked in the manufacturing, selling, distributing and
advertising of "MARK" cigarettes. The question of good
faith or bad faith on the part of defendant are matters which
are evidentiary in character which have to be proven
during the hearing on the merits; hence, until and unless
the Director of Patents has denied defendant's application,
the Court is of the opinion and so holds that issuance a
writ of preliminary injunction would not lie.
There is no question that defendant has been authorized
by the Bureau of Internal Revenue to manufacture
cigarettes bearing the trademark "MARK" (Letter of Ruben
B. Ancheta, Acting Commissioner addressed to Fortune
Tobacco Corporation dated April 3, 1981, marked as
Annex "A", defendant's "OPPOSITION, etc." dated
September 24, 1982). However, this authority is qualified .
. . that the said brands have been accepted and registered
by the Patent Office not later than six (6) months after you
have been manufacturing the cigarettes and placed the
same in the market." However, this grant ". . . does not
give you protection against any person or entity whose
rights may be prejudiced by infringement or unfair
competition in relation to your indicated
trademarks/brands". As aforestated, the registration of
defendant's application is still pending in the Philippine
Patent Office.
It has been repeatedly held in this jurisdiction as well as in
the United States that the right or title of the applicant for
injunction remedy must be clear and free from doubt.
Because of the disastrous and painful effects of an
injunction, Courts should be extremely careful, cautious
and conscionable in the exercise of its discretion
consistent with justice, equity and fair play.
There is no power the exercise of which is more delicate
which requires greater caution, deliberation, and sound
discretion, or (which is) more dangerous in a doubtful case
than the issuing of an injunction; it is the strong arm of
equity that never ought to be extended unless to cases of
great injury, where courts of law cannot afford an adequate
or commensurate remedy in damages. The right must be
clear, the injury impending or threatened, so as to be
averted only by the protecting preventive process of
injunction. (Bonaparte v. Camden, etc. N. Co., 3 F. Cas.
No. 1, 617, Baldw. 205, 217.)
Courts of equity constantly decline to lay down any rule
which injunction shall be granted or withheld. There is
wisdom in this course, for it is impossible to foresee all
exigencies of society which may require their aid to protect
rights and restrain wrongs. (Merced M. Go v. Freemont, 7
Gal. 317, 321; 68 Am. Dec. 262.)
It is the strong arm of the court; and to render its operation
begin and useful, it must be exercised with great
discretion, and when necessary requires it. (Attorney-
General v. Utica Inc. Co., P. John Ch. (N.Y.) 371.)
Having taken a panoramic view of the position[s] of both
parties as viewed from their pleadings, the picture reduced
to its minimum size would be this: At the crossroads are
the two (2) contending parties, plaintiffs vigorously
asserting the rights granted by law, treaty and
jurisprudence to restrain defendant in its activities of
manufacturing, selling, distributing and advertising its
"MARK" cigarettes and now comes defendant who
countered and refused to be restrained claiming that it has
been authorized temporarily by the Bureau of Internal
Revenue under certain conditions to do so as aforestated
coupled by its pending application for registration of
trademark "MARK" in the Philippine Patent Office. This
circumstance in itself has created a dispute between the
parties which to the mind of the Court does not warrant the
issuance of a writ of preliminary injunction.
It is well-settled principle that courts of equity will refuse an
application for the injunctive remedy where the principle of
law on which the right to preliminary injunction rests is
disputed and will admit of doubt, without a decision of the
court of law establishing such principle although satisfied
as to what is a correct conclusion of law upon the facts.
The fact, however, that there is no such dispute or conflict
does not in itself constitute a justifiable ground for the court
to refuse an application for the injunctive relief.
(Hackensack Impr. Commn. v. New Jersey Midland P. Co.,
22 N.J. Eg. 94.)
Hence, the status quo existing between the parties prior to
the filing of this case should be maintained. For after all,
an injunction, without reference to the parties, should be
violent, vicious nor even vindictive. (pp. 338-341, Rollo in
G.R. No. 91332.)
In the process of denying petitioners' subsequent motion
for reconsideration of the order denying issuance of the
requested writ, the court of origin took cognizance of the
certification executed on January 30, 1984 by the
Philippine Patent Office attesting to the fact that private
respondent's application for registration is still pending
appropriate action. Apart from this communication, what
prompted the trial court judge to entertain the idea of
prematurity and untimeliness of petitioners' application for
a writ of preliminary injunction was the letter from the
Bureau of Internal Revenue date February 2, 1984 which
reads:
MRS. TERESITA GANDIONGCO OLEDAN
Legal Counsel
Fortune Tobacco Corporation
Madam:
In connection with your letter dated January 25, 1984,
reiterating your query as to whether your label approval
automatically expires or becomes null and void after six (6)
months if the brand is not accepted and by the patent
office, please be informed that no provision in the Tax
Code or revenue regulation that requires an applicant to
comply with the aforementioned condition order that his
label approved will remain valid and existing.
Based on the document you presented, it shows that
registration of this particular label still pending resolution
by the Patent Office. These being so , you may therefore
continue with the production said brand of cigarette until
this Office is officially notified that the question of
ownership of "MARK" brand is finally resolved.
Very truly yours,
TEODORO D. PAREÑO
Chief, Manufactured Tobacco
Tax Division
TAN-P6531-D2830-A-6
(p. 348, Rollo.)
It appears from the testimony of Atty. Enrique Madarang,
Chief of the Trademark Division of the then Philippine
Patent Office that Fortune's application for its trademark is
still pending before said office (p. 311, Rollo).
Petitioners thereafter cited supervening events which
supposedly transpired since March 28, 1983, when the
trial court first declined issuing a writ of preliminary
injunction, that could alter the results of the case in that
Fortune's application had been rejected, nay, barred by
the Philippine Patent Office, and that the application had
been forfeited by abandonment, but the trial court
nonetheless denied the second motion for issuance of the
injunctive writ on April 22, 1987, thus:
For all the prolixity of their pleadings and testimonial
evidence, the plaintiffs-movants have fallen far short of the
legal requisites that would justify the grant of the writ of
preliminary injunction prayed for. For one, they did not
even bother to establish by competent evidence that the
products supposedly affected adversely by defendant's
trademark now subject of an application for registration
with the Philippine Patents Office, are in actual use in the
Philippines. For another, they concentrated their fire on the
alleged abandonment and forfeiture by defendant of said
application for registration.
The Court cannot help but take note of the fact that in their
complaint plaintiffs included a prayer for issuance
preliminary injunction. The petition was duly heard, and
thereafter matter was assiduously discussed lengthily and
resolved against plaintiffs in a 15-page Order issued by the
undersigned's predecessor on March 28, 1983. Plaintiffs'
motion for reconsideration was denied in another well-
argued 8 page Order issued on April 5, 1984,, and the
matter was made to rest.
However, on the strength of supposed changes in the
material facts of this case, plaintiffs came up with the
present motion citing therein the said changes which are:
that defendant's application had been rejected and barred
by the Philippine Patents Office, and that said application
has been deemed abandoned and forfeited. But defendant
has refiled the same.
Plaintiffs' arguments in support of the present motion
appear to be a mere rehash of their stand in the first above-
mentioned petition which has already been ruled upon
adversely against them. Granting that the alleged changes
in the material facts are sufficient grounds for a motion
seeking a favorable grant of what has already been
denied, this motion just the same cannot prosper.
In the first place there is no proof whatsoever that any of
plaintiffs' products which they seek to protect from any
adverse effect of the trademark applied for by defendant,
is in actual use and available for commercial purposes
anywhere in the Philippines. Secondly as shown by
plaintiffs' own evidence furnished by no less than the chief
of Trademarks Division of the Philippine Patent Office,
Atty. Enrique Madarang, the abandonment of an
application is of no moment, for the same can always be
refiled. He said there is no specific provision in the rules
prohibiting such refiling (TSN, November 21, 1986, pp. 60
& 64, Raviera). In fact, according to Madarang, the refiled
application of defendant is now pending before the Patents
Office. Hence, it appears that the motion has no leg to
stand on. (pp. 350-351, Rollo in G. R. No. 91332.)
Confronted with this rebuff, petitioners filed a previous
petition for certiorari before the Court, docketed as G.R.
No. 78141, but the petition was referred to the Court of
Appeals.
The Court of Appeals initially issued a resolution which set
aside the court of origin's order dated April 22, 1987, and
granted the issuance of a writ of preliminary injunction
enjoining Fortune, its agents, employees, and
representatives, from manufacturing, selling, and
advertising "MARK" cigarettes. The late Justice Cacdac,
speaking for the First Division of the Court of Appeals in
CA-G.R. SP No. 13132, remarked:
There is no dispute that petitioners are the registered
owners of the trademarks for cigarettes "MARK VII",
"MARK TEN", and "LARK".(Annexes B, C and D, petition).
As found and reiterated by the Philippine Patent Office in
two (2) official communications dated April 6, 1983 and
January 24, 1984, the trademark "MARK" is "confusingly
similar" to the trademarks of petitioners, hence registration
was barred under Sec. 4 (d) of Rep. Act. No. 166, as
amended (pp. 106, 139, SCA rollo). In a third official
communication dated April 8, 1986, the trademark
application of private respondent for the "MARK" under
Serial No. 44008 filed on February 13, 1981 which was
declared abandoned as of February 16, 1986, is now
deemed forfeited, there being no revival made pursuant to
Rule 98 of the Revised Rules of Practitioners in Trademark
Cases." (p. 107, CA rollo). The foregoing documents or
communications mentioned by petitioners as "the changes
in material facts which occurred after March 28, 1983", are
not also questioned by respondents.
Pitted against the petitioners' documentary evidence,
respondents pointed to (1) the letter dated January 30,
1979 (p. 137, CA rollo) of Conrado P. Diaz, then Acting
Commissioner of Internal Revenue, temporarily granting
the request of private respondent for a permit to
manufacture two (2) new brands of cigarettes one of which
is brand "MARK" filter-type blend, and (2) the certification
dated September 26, 1986 of Cesar G. Sandico, Director
of Patents (p. 138, CA rollo) issued upon the written
request of private respondents' counsel dated September
17, 1986 attesting that the records of his office would show
that the "trademark MARK" for cigarettes is now the
subject of a pending application under Serial No. 59872
filed on September 16, 1986.
Private respondent's documentary evidence provides the
reasons neutralizing or weakening their probative values.
The penultimate paragraph of Commissioner Diaz' letter of
authority reads:
Please be informed further that the authority herein
granted does not give you protection against any person
or entity whose rights may be prejudiced by infringement
or unfair competition in relation to your above-named
brands/trademark.
while Director Sandico's certification contained similar
conditions as follows:
This Certification, however, does not give protection as
against any person or entity whose right may be prejudiced
by infringement or unfair competition in relation to the
aforesaid trademark nor the right to register if contrary to
the provisions of the Trademark Law, Rep. Act No. 166 as
amended and the Revised Rules of Practice in Trademark
Cases.
The temporary permit to manufacture under the trademark
"MARK" for cigarettes and the acceptance of the second
application filed by private respondent in the height of their
dispute in the main case were evidently made subject to
the outcome of the said main case or Civil Case No. 47374
of the respondent Court. Thus, the Court has not missed
to note the absence of a mention in the Sandico letter of
September 26, 1986 of any reference to the pendency of
the instant action filed on August 18, 1982. We believe and
hold that petitioners have shown a prima facie case for the
issuance of the writ of prohibitory injunction for the
purposes stated in their complaint and subsequent
motions for the issuance of the prohibitory writ. (Buayan
Cattle Co. vs. Quintillan, 125 SCRA 276)
The requisites for the granting of preliminary injunction are
the existence of the right protected and the facts against
which the injunction is to be directed as violative of said
right. (Buayan Cattle Co. vs. Quintillan, supra; Ortigas &
Co. vs. Ruiz, 148 SCRA 326). It is a writ framed according
to the circumstances of the case commanding an act
which the Court regards as essential to justice and
restraining an act it deems contrary to equity and good
conscience (Rosauro vs. Cuneta, 151 SCRA 570). If it is
not issued, the defendant may, before final judgment, do
or continue the doing of the act which the plaintiff asks the
court to restrain, and thus make ineffectual the final
judgment rendered afterwards granting the relief sought by
the plaintiff (Calo vs. Roldan, 76 Phil. 445). Generally, its
grant or denial rests upon the sound discretion of the Court
except on a clear case of abuse (Belish Investment &
Finance Co. vs. State House, 151 SCRA 636). Petitioners'
right of exclusivity to their registered trademarks being
clear and beyond question, the respondent court's denial
of the prohibitive writ constituted excess of jurisdiction and
grave abuse discretion. If the lower court does not grant
preliminary injunction, the appellate court may grant the
same. (Service Specialists, Inc. vs. Sheriff of Manila, 145
SCRA 139). (pp. 165-167, Rollo in G.R. No. 91332.)
After private respondent Fortune's motion for
reconsideration was rejected, a motion to dissolve the
disputed writ of preliminary injunction with offer to post a
counterbond was submitted which was favorably acted
upon by the Court of Appeals, premised on the filing of a
sufficient counterbond to answer for
whatever perjuicio petitioners may suffer as a result
thereof, to wit:
The private respondent seeks to dissolve the preliminary
injunction previously granted by this Court with an offer to
file a counterbond. It was pointed out in its supplemental
motion that lots of workers employed will be laid off as a
consequence of the injunction and that the government will
stand to lose the amount of specific taxes being paid by
the
private respondent. The specific taxes being paid is the
sum total of P120,120, 295.98 from January to July 1989.
The petitioners argued in their comment that the damages
caused by the infringement of their trademark as well as
the goodwill it generates are incapable of pecuniary
estimation and monetary evaluation and not even the
counterbond could adequately compensate for the
damages it will incur as a result of the dissolution of the
bond. In addition, the petitioner further argued that doing
business in the Philippines is not relevant as the injunction
pertains to an infringement of a trademark right.
After a thorough re-examination of the issues involved and
the arguments advanced by both parties in the offer to file
a counterbond and the opposition thereto, WE believe that
there are sound and cogent reasons for US to grant the
dissolution of the writ of preliminary injunction by the offer
of the private respondent to put up a counterbond to
answer for whatever damages the petitioner may suffer as
a consequence of the dissolution of the preliminary
injunction.
The petitioner will not be prejudiced nor stand to suffer
irreparably as a consequence of the lifting of the
preliminary injunction considering that they are not actually
engaged in the manufacture of the cigarettes with the
trademark in question and the filing of the counterbond will
amply answer for such damages.
While the rule is that an offer of a counterbond does not
operate to dissolve an injunction previously granted,
nevertheless, it is equally true that an injunction could be
dissolved only upon good and valid grounds subject to the
sound discretion of the court. As WE have maintained the
view that there are sound and good reasons to lift the
preliminary injunction, the motion to file a counterbond is
granted. (pp. 53-54, Rollo in G.R. No. 91332.)
Petitioners, in turn, filed their own motion for re-
examination geared towards reimposition of the writ of
preliminary injunction but to no avail (p. 55, Rollo in G.R.
No. 91332).
Hence, the instant petition casting three aspersions that
respondent court gravely abused its discretion tantamount
to excess of jurisdiction when:
I. . . . it required, contrary to law and jurisprudence, that in
order that petitioners may suffer irreparable injury due to
the lifting of the injunction, petitioners should be using
actually their registered trademarks in commerce in the
Philippines;
II. . . . it lifted the injunction in violation of section 6 of Rule
58 of the Rules of Court; and
III. . . . after having found that the trial court had committed
grave abuse of discretion and exceeded its jurisdiction for
having refused to issue the writ of injunction to restrain
private respondent's acts that are contrary to equity and
good conscience, it made a complete about face for legally
insufficient grounds and authorized the private respondent
to continue performing the very same acts that it had
considered contrary to equity and good conscience,
thereby ignoring not only the mandates of the Trademark
Law, the international commitments of the Philippines, the
judicial admission of private respondent that it will have no
more right to use the trademark "MARK" after the Director
of Patents shall have rejected the application to register it,
and the admonitions of the Supreme Court. (pp. 24-25,
Petition; pp. 25-26, Rollo.)
To sustain a successful prosecution of their suit for
infringement, petitioners, as foreign corporations not
engaged in local commerce, rely on section 21-A of the
Trademark Law reading as follows:
Sec. 21-A. Any foreign corporation or juristic person to
which a mark or trade-name has been registered or
assigned under this act may bring an action hereunder for
infringement, for unfair competition, or false designation of
origin and false description, whether or not it has been
licensed to do business in the Philippines under Act
Numbered Fourteen hundred and fifty-nine, as amended,
otherwise known as the Corporation Law, at the time it
brings complaint: Provided, That the country of which the
said foreign corporation or juristic person is a citizen or in
which it is domiciled, by treaty, convention or law, grants a
similar privilege to corporate or juristic persons of the
Philippines. (As inserted by Sec. 7 of Republic Act No.
638.)
to drive home the point that they are not precluded from
initiating a cause of action in the Philippines on account of
the principal perception that another entity is pirating their
symbol without any lawful authority to do so. Judging from
a perusal of the aforequoted Section 21-A, the conclusion
reached by petitioners is certainly correct for the
proposition in support thereof is embedded in the
Philippine legal jurisprudence.
Indeed, it was stressed in General Garments Corporation
vs. Director of Patents (41 SCRA 50 [1971]) by then
Justice (later Chief Justice) Makalintal that:
Parenthetically, it may be stated that the ruling in the
Mentholatum case was subsequently derogated when
Congress, purposely to "counteract the effects" of said
case, enacted Republic Act No. 638, inserting Section 21-
A in the Trademark Law, which allows a foreign
corporation or juristic person to bring an action in
Philippine courts for infringement of a mark or tradename,
for unfair competition, or false designation of origin and
false description, "whether or not it has been licensed to
do business in the Philippines under Act Numbered
Fourteen hundred and fifty-nine, as amended, otherwise
known as the Corporation Law, at the time it brings
complaint."
Petitioner argues that Section 21-A militates against
respondent's capacity to maintain a suit for cancellation,
since it requires, before a foreign corporation may bring an
action, that its trademark or tradename has been
registered under the Trademark Law. The argument
misses the essential point in the said provision, which is
that the foreign corporation is allowed thereunder to sue
"whether or not it has been licensed to do business in the
Philippines" pursuant to the Corporation Law (precisely to
counteract the effects of the decision in the Mentholatum
case). (at p. 57.)
However, on May, 21, 1984, Section 21-A, the provision
under consideration, was qualified by this Court in La
Chemise Lacoste S.A. vs. Fernandez (129 SCRA 373
[1984]), to the effect that a foreign corporation not doing
business in the Philippines may have the right to sue
before Philippine Courts, but existing adjective axioms
require that qualifying circumstances necessary for the
assertion of such right should first be affirmatively pleaded
(2 Agbayani Commercial Laws of the Philippines, 1991
Ed., p. 598; 4 Martin, Philippine Commercial Laws, Rev.
Ed., 1986, p. 381). Indeed, it is not sufficient for a foreign
corporation suing under Section 21-A to simply allege its
alien origin. Rather, it must additionally allege its
personality to sue. Relative to this condition precedent, it
may be observed that petitioners were not remiss in
averring their personality to lodge a complaint for
infringement (p. 75, Rollo in AC-G.R. SP No. 13132)
especially so when they asserted that the main action for
infringement is anchored on an isolated transaction (p.
75, Rollo in AC-G.R. SP No. 13132; Atlantic Mutual Ins.
Co. vs. Cebu Stevedoring Co., Inc., 17 SCRA 1037 (1966),
1 Regalado, Remedial Law Compendium, Fifth Rev. Ed.,
1988, p. 103).
Another point which petitioners considered to be of
significant interest, and which they desire to impress upon
us is the protection they enjoy under the Paris Convention
of 1965 to which the Philippines is a signatory. Yet, insofar
as this discourse is concerned, there is no necessity to
treat the matter with an extensive response because
adherence of the Philippines to the 1965 international
covenant due to pact sunt servanda had been
acknowledged in La Chemise (supra at page 390).
Given these confluence of existing laws amidst the cases
involving trademarks, there can be no disagreement to the
guiding principle in commercial law that foreign
corporations not engaged in business in the Philippines
may maintain a cause of action for infringement primarily
because of Section 21-A of the Trademark Law when the
legal standing to sue is alleged, which petitioners have
done in the case at hand.
In assailing the justification arrived at by respondent court
when it recalled the writ of preliminary injunction,
petitioners are of the impression that actual use of their
trademarks in Philippine commercial dealings is not an
indispensable element under Article 2 of the Paris
Convention in that:
(2) . . . . no condition as to the possession of a domicile or
establishment in the country where protection is claimed
may be required of persons entitled to the benefits of the
Union for the enjoyment of any industrial property of any
industrial property rights. (p. 28, Petition; p. 29, Rollo in
G.R. No. 91332.)
Yet petitioners' perception along this line is nonetheless
resolved by Sections 2 and 2-A of the Trademark Law
which speak loudly, about necessity of actual commercial
use of the trademark in the local forum:
Sec. 2. What are registrable. — Trademarks, tradenames
and service marks owned by persons, corporations,
partnerships or associations domiciled in the Philippines
and by persons, corporations, partnerships or associations
domiciled in any foreign country may be registered in
accordance with the provisions of this Act; Provided, That
said trademarks, tradenames, or service marks are
actually in use in commerce and services not less than two
months in the Philippines before the time the applications
for registration are filed; And provided, further, That the
country of which the applicant for registration is a citizen
grants by law substantially similar privileges to citizens of
the Philippines, and such fact is officially certified, with a
certified true copy of the foreign law translated into the
English language, by the government of the foreign
country to the Government of the Republic of the
Philippines. (As amended by R.A. No. 865).
Sec. 2-A. Ownership of trademarks, tradenames and
service marks; how acquired. — Anyone who lawfully
produces or deals in merchandise of any kind or who
engages in any lawful business, or who renders any lawful
service in commerce, by actual use thereof in manufacture
or trade, in business,and in the service rendered, may
appropriate to his exclusive use a trademark, a tradename,
or a service mark not so appropriated by another, to
distinguish his merchandise, business or service from the
merchandise, business or service of others. The
ownership or possession of a trademark, tradename,
service mark, heretofore or hereafter appropriated, as in
this section provided, shall be recognized and protected in
the same manner and to the same extent as are other
property rights known to the law. (As amended by R.A. No.
638). (Kabushi Kaisha Isetan vs. Intermediate Appellate
Court, 203 SCRA 583 [1991], at pp. 589-590; emphasis
supplied.)
Following universal acquiescence and comity, our
municipal law on trademarks regarding the requirement of
actual use in the Philippines must subordinate an
international agreement inasmuch as the apparent clash
is being decided by a municipal tribunal (Mortensen vs.
Peters, Great Britain, High Court of Judiciary of Scotland,
1906, 8 Sessions 93; Paras, International Law and World
Organization, 1971 Ed., p. 20). Withal, the fact that
international law has been made part of the law of the land
does not by any means imply the primacy of international
law over national law in the municipal sphere. Under the
doctrine of incorporation as applied in most countries,
rules of international law are given a standing equal, not
superior, to national legislative enactments (Salonga and
Yap, Public International Law, Fourth ed., 1974, p. 16).
The aforequoted basic provisions of our Trademark Law,
according to Justice Gutierrez, Jr., in Kabushi Kaisha
Isetan vs. Intermediate Appellate Court (203 SCRA 583
[1991]), have been construed in this manner:
A fundamental principle of Philippine Trademark Law is
that actual use in commerce in the Philippines is a pre-
requisite to the acquisition of ownership over a trademark
or a tradename.
xxx xxx xxx
These provisions have been interpreted in Sterling
Products International, Inc. v. Farbenfabriken Bayer
Actiengesellschaft (27 SCRA 1214 [1969]) in this way:
A rule widely accepted and firmly entrenched because it
has come down through the years is that actual use in
commerce or business is a prerequisite to the acquisition
of the right of ownership over a trademark.
xxx xxx xxx
. . . Adoption alone of a trademark would not give exclusive
right thereto. Such right grows out of their actual use.
Adoption is not use. One may make advertisements, issue
circulars, give out price lists on certain goods; but these
alone would not give exclusive right of use. For trademark
is a creation of use. The underlying reason for all these is
that purchasers have come to understand the mark as
indicating the origin of the wares. Flowing from this is the
trader's right to protection in the trade he has built up and
the goodwill he has accumulated from use of the
trademark. . . .
In fact, a prior registrant cannot claim exclusive use of the
trademark unless it uses it in commerce.
We rule[d] in Pagasa Industrial Corporation v. Court of
Appeals (118 SCRA 526 [1982]):
3. The Trademark law is very clear. It requires actual
commercial use of the mark prior to its registration. There
is no dispute that respondent corporation was the first
registrant, yet it failed to fully substantiate its claim that it
used in trade or business in the Philippines the subject
mark; it did not present proof to invest it with exclusive,
continuous adoption of the trademark which should consist
among others, of considerable sales since its first use. The
invoices (Exhibits 7, 7-a, and 8-b) submitted by respondent
which were dated way back in 1957 show that the zippers
sent to the Philippines were to be used as "samples" and
"of no commercial value". The evidence for respondent
must be clear, definite and free from inconsistencies. (Sy
Ching v. Gaw Lui, 44 SCRA 148-149) "Samples" are not
for sale and therefore, the fact of exporting them to the
Philippines cannot be considered to be equivalent to the
"use" contemplated by the law. Respondent did not expect
income from such "samples". There were no receipts to
establish sale, and no proof were presented to show that
they were subsequently sold in the Philippines. (Pagasa
Industrial Corp. v. Court of Appeals, 118 SCRA 526 [1982];
Emphasis Supplied)
The records show that the petitioner has never conducted
any business in the Philippines. It has never promoted its
tradename or trademark in the Philippines. It is unknown
to Filipino except the very few who may have noticed it (Villarosa vs. Teodoro, Sr., 100 Phil. 25 [1956]). In point of
while travelling abroad. It has never paid a single centavo adjective law, the petition has its roots on a remedial
of tax to the Philippine government. Under the law, it has measure which is but ancillary to the main action for
no right to the remedy it seeks. (at pp. 589-591.) infringement still pending factual determination before the
court of origin. It is virtually needless to stress the obvious
In other words, petitioners may have the capacity to sue
reality that critical facts in an infringement case are not
for infringement irrespective of lack of business activity in
before us more so when even Justice Feliciano's opinion
the Philippines on account of Section 21-A of the
observes that "the evidence is scanty" and that petitioners
Trademark Law but the question whether they have an
"have yet to submit copies or photographs of their
exclusive right over their symbol as to justify issuance of
registered marks as used in cigarettes" while private
the controversial writ will depend on actual use of their
respondent has not, for its part, "submitted the actual
trademarks in the Philippines in line with Sections 2 and 2-
labels or packaging materials used in selling its "Mark"
A of the same law. It is thus incongruous for petitioners to
cigarettes." Petitioners therefore, may not be permitted to
claim that when a foreign corporation not licensed to do
presume a given state of facts on their so called right to
business in Philippines files a complaint for infringement,
the trademarks which could be subjected to irreparable
the entity need not be actually using its trademark in
injury and in the process, suggest the fact of infringement.
commerce in the Philippines. Such a foreign corporation
Such a ploy would practically place the cart ahead of the
may have the personality to file a suit for infringement but
horse. To our mind, what appears to be the
it may not necessarily be entitled to protection due to
insurmountable barrier to petitioners' portrayal of
absence of actual use of the emblem in the local market.
whimsical exercise of discretion by the Court of Appeals is
Going back to the first assigned error, we can not help but the well-taken remark of said court that:
notice the manner the ascription was framed which carries
The petitioner[s] will not be prejudiced nor stand to suffer
with it the implied but unwarranted assumption of the
irreparably as a consequence of the lifting of the
existence of petitioners' right to relief. It must be
preliminary injunction considering that they are not actually
emphasized that this aspect of exclusive dominion to the
engaged in the manufacture of the cigarettes with the
trademarks, together with the corollary allegation of
trademark in question and the filing of the counterbond will
irreparable injury, has yet to be established by petitioners
amply answer for such damages. (p. 54. Rollo in G.R. No.
by the requisite quantum of evidence in civil cases. It
91332.)
cannot be denied that our reluctance to issue a writ of
preliminary injunction is due to judicial deference to the More telling are the allegations of petitioners in their
lower courts, involved as there is mere interlocutory order complaint (p. 319, Rollo G.R. No. 91332) as well as in the
very petition filed with this Court (p. 2, Rollo in G.R. No.
91332) indicating that they are not doing business in the
Philippines, for these frank representations are
inconsistent and incongruent with any pretense of a right
which can breached (Article 1431, New Civil Code; Section
4, Rule 129; Section 3, Rule 58, Revised Rules of Court).
Indeed, to be entitled to an injunctive writ, petitioner must
show that there exists a right to be protected and that the
facts against which injunction is directed are violative of
said right (Searth Commodities Corporation vs. Court of
Appeals, 207 SCRA 622 [1992]). It may be added in this
connection that albeit petitioners are holders of certificate
of registration in the Philippines of their symbols as
admitted by private respondent, the fact of exclusive
ownership cannot be made to rest solely on these
documents since dominion over trademarks is not
acquired by the mere fact of registration alone and does
not perfect a trademark right (Unno Commercial
Enterprises, Inc. vs. General Milling Corporation, 120
SCRA 804 [1983]).
Even if we disregard the candid statements of petitioners
anent the absence of business activity here and rely on the
remaining statements of the complaint below, still, when
these averments are juxtaposed with the denials and
propositions of the answer submitted by private
respondent, the supposed right of petitioners to the symbol
have thereby been controverted. This is not to say,
however, that the manner the complaint was traversed by
the answer is sufficient to tilt the scales of justice in favor
of private respondent. Far from it. What we are simply
conveying is another basic tenet in remedial law that
before injunctive relief may properly issue, complainant's
right or title must be undisputed and demonstrated on the
strength of one's own title to such a degree as to
unquestionably exclude dark clouds of doubt, rather than
on the weakness of the adversary's evidence, inasmuch
as the possibility of irreparable damage, without prior proof
of transgression of an actual existing right, is no ground for
injunction being mere damnum absque injuria (Talisay-
Silay Milling Co., Inc. vs. CFI of Negros Occidental, 42
SCRA 577 [1971]; Francisco, Rules of Court, Second ed.,
1985, p. 225; 3 Martin, Rules of Court, 1986 ed., p. 82).
On the economic repercussion of this case, we are
extremely bothered by the thought of having to participate
in throwing into the streets Filipino workers engaged in the
manufacture and sale of private respondent's "MARK"
cigarettes who might be retrenched and forced to join the
ranks of the many unemployed and unproductive as a
result of the issuance of a simple writ of preliminary
injunction and this, during the pendency of the case before
the trial court, not to mention the diminution of tax
revenues represented to be close to a quarter million
pesos annually. On the other hand, if the status quo is
maintained, there will be no damage that would be
suffered by petitioners inasmuch as they are not doing
business in the Philippines.
With reference to the second and third issues raised by
petitioners on the lifting of the writ of preliminary injunction,
it cannot be gainsaid that respondent court acted well
within its prerogatives under Section 6, Rule 58 of the
Revised Rules of Court:
Sec. 6. Grounds for objection to, or for motion of
dissolution of injunction. — The injunction may be refused
or, if granted ex parte, may be dissolved, upon the
insufficiency of the complaint as shown by the complaint
itself, with or without notice to the adverse party. It may
also be refused or dissolved on other grounds upon
affidavits on the part of the defendants which may be
opposed by the plaintiff also by affidavits. It may further be
refused or, if granted, may be dissolved, if it appears after
hearing that although the plaintiff is entitled to the
injunction, the issuance or continuance thereof, as the
case may be, would cause great damage to the defendant
while the plaintiff can be fully compensated for such
damages as he may suffer, and the defendant files a bond
in an amount fixed by the judge conditioned that he will pay
all damages which the plaintiff may suffer by the refusal or
the dissolution of the injunction. If it appears that the extent
of the preliminary injunction granted is too great, it must be
modified.
Under the foregoing rule, injunction may be refused, or, if
granted, may be dissolved, on the following instances:
(1) If there is insufficiency of the complaint as shown by
the allegations therein. Refusal or dissolution may be
granted in this case with or without notice to the adverse
party.
(2) If it appears after hearing that although the plaintiff is
entitled to the injunction, the issuance or continuance
thereof would cause great damage to the defendant, while
the plaintiff can be fully compensated for such damages
as he may suffer. The defendant, in this case, must file a
bond in an amount fixed by the judge conditioned that he
will pay all damages which plaintiff may suffer by the
refusal or the dissolution of the injunction.
(3) On the other grounds upon affidavits on the part of the
defendant which may be opposed by the plaintiff also
affidavits.
Modification of the injunction may also be ordered by the
court if it appears that the extent of the preliminary
injunction granted is too great. (3 Martin, Rules of Court,
1986 ed., p. 99; Francisco, supra, at p. 268.)
In view of the explicit representation of petitioners in the
complaint that they are not engaged in business in the
Philippines, it inevitably follows that no conceivable
damage can be suffered by them not to mention the
foremost consideration heretofore discussed on the
absence of their "right" to be protected. At any rate, and
assuming in gratia argumenti that respondent court
erroneously lifted the writ it previously issued, the same
may be cured by appeal and not in the form of a petition
for certiorari (Clark vs. Philippine Ready Mix Concrete Co.,
88 Phil. 460 [1951]). Verily, and mindful of the rule that a
writ of preliminary injunction is an interlocutory order which
is always under the control of the court before final
judgment, petitioners' criticism must fall flat on the ground,
so to speak, more so when extinction of the previously
issued writ can even be made without previous notice to
the adverse party and without a hearing (Caluya vs.
Ramos, 79 Phil. 640 [1974]; 3 Moran, Rules of Court, 1970
ed., p. 81).
WHEREFORE, the petition is hereby DISMISSED and the
Resolutions of the Court of Appeals dated September 14,
1989 and November 29, 1989 are hereby AFFIRMED.
SO ORDERED.
FERDINAND E. MARCOS, IMELDA R.
MARCOS, FERDINAND R. MARCOS. JR.,
IRENE M. ARANETA, IMEE M. MANOTOC,
TOMAS MANOTOC, GREGORIO ARANETA,
PACIFICO E. MARCOS, NICANOR YÑIGUEZ
and PHILIPPINE CONSTITUTION
ASSOCIATION (PHILCONSA), represented by
its President, CONRADO F. ESTRELLA
vs.
HONORABLE RAUL MANGLAPUS, CATALINO
MACARAIG, SEDFREY ORDOÑEZ, MIRIAM
DEFENSOR SANTIAGO, FIDEL RAMOS,
RENATO DE VILLA, in their capacity as
Secretary of Foreign Affairs, Executive
Secretary, Secretary of Justice, Immigration
Commissioner, Secretary of National Defense
and Chief of Staff
EN BANC:
In its decision dated September 15,1989, the Court, by a
vote of eight (8) to seven (7), dismissed the petition, after
finding that the President did not act arbitrarily or with
grave abuse of discretion in determining that the return of
former President Marcos and his family at the present time
and under present circumstances pose a threat to national
interest and welfare and in prohibiting their return to the
Philippines. On September 28, 1989, former President
Marcos died in Honolulu, Hawaii. In a statement, President
Aquino said:
In the interest of the safety of those who will take the death
of Mr. Marcos in widely and passionately conflicting ways,
and for the tranquility of the state and order of society, the
remains of Ferdinand E. Marcos will not be allowed to be
brought to our country until such time as the government,
be it under this administration or the succeeding one, shall
otherwise decide. [Motion for Reconsideration, p. 1; Rollo,
p, 443.]
On October 2, 1989, a Motion for Reconsideration was
filed by petitioners, raising the following major arguments:
1. to bar former President Marcos and his family from
returning to the Philippines is to deny them not only the
inherent right of citizens to return to their country of birth
but also the protection of the Constitution and all of the
rights guaranteed to Filipinos under the Constitution;
2. the President has no power to bar a Filipino from his
own country; if she has, she had exercised it arbitrarily;
and
3. there is no basis for barring the return of the family of
former President Marcos. Thus, petitioners prayed that the
Court reconsider its decision, order respondents to issue
the necessary travel documents to enable Mrs. Imelda R.
Marcos, Ferdinand R. Marcos, Jr., Irene M. Araneta, Imee
M. Manotoc, Tommy Manotoc and Gregorio Araneta to
return to the Philippines, and enjoin respondents from
implementing President Aquino's decision to bar the return
of the remains of Mr. Marcos, and the other petitioners, to
the Philippines.
Commenting on the motion for reconsideration, the
Solicitor General argued that the motion for
reconsideration is moot and academic as to the deceased
Mr. Marcos. Moreover, he asserts that "the 'formal' rights
being invoked by the Marcoses under the label 'right to
return', including the label 'return of Marcos' remains, is in
reality or substance a 'right' to destabilize the country, a
'right' to hide the Marcoses' incessant shadowy
orchestrated efforts at destabilization." [Comment, p. 29.]
Thus, he prays that the Motion for Reconsideration be
denied for lack of merit.
We deny the motion for reconsideration.
1. It must be emphasized that as in all motions for
reconsideration, the burden is upon the movants,
petitioner herein, to show that there are compelling
reasons to reconsider the decision of the Court.
2. After a thorough consideration of the matters raised in
the motion for reconsideration, the Court is of the view that
no compelling reasons have been established by
petitioners to warrant a reconsideration of the Court's
decision.
The death of Mr. Marcos, although it may be viewed as a
supervening event, has not changed the factual scenario
under which the Court's decision was rendered. The
threats to the government, to which the return of the
Marcoses has been viewed to provide a catalytic effect,
have not been shown to have ceased. On the contrary,
instead of erasing fears as to the destabilization that will
be caused by the return of the Marcoses, Mrs. Marcos
reinforced the basis for the decision to bar their return
when she called President Aquino "illegal," claiming that it
is Mr. Marcos, not Mrs. Aquino, who is the "legal"
President of the Philippines, and declared that the matter
"should be brought to all the courts of the world."
[Comment, p. 1; Philippine Star, October 4, 1989.]
3. Contrary to petitioners' view, it cannot be denied that the
President, upon whom executive power is vested, has
unstated residual powers which are implied from the grant
of executive power and which are necessary for her to
comply with her duties under the Constitution. The powers
of the President are not limited to what are expressly
enumerated in the article on the Executive Department
and in scattered provisions of the Constitution. This is so,
notwithstanding the avowed intent of the members of the
Constitutional Commission of 1986 to limit the powers of
the President as a reaction to the abuses under the regime
of Mr. Marcos, for the result was a limitation of specific
power of the President, particularly those relating to the
commander-in-chief clause, but not a diminution of the
general grant of executive power.
That the President has powers other than those expressly
stated in the Constitution is nothing new. This is
recognized under the U.S. Constitution from which we
have patterned the distribution of governmental powers
among three (3) separate branches.
Article II, [section] 1, provides that "The Executive Power
shall be vested in a President of the United States of
America." In Alexander Hamilton's widely accepted view,
this statement cannot be read as mere shorthand for the
specific executive authorizations that follow it in [sections]
2 and 3. Hamilton stressed the difference between the
sweeping language of article II, section 1, and the
conditional language of article I, [section] 1: "All legislative
Powers herein granted shall be vested in a Congress of
the United States . . ." Hamilton submitted that "[t]he
[article III enumeration [in sections 2 and 31 ought
therefore to be considered, as intended merely to specify
the principal articles implied in the definition of execution
power; leaving the rest to flow from the general grant of
that power, interpreted in confomity with other parts of the
Constitution...
In Myers v. United States, the Supreme Court — accepted
Hamilton's proposition, concluding that the federal
executive, unlike the Congress, could exercise power from
sources not enumerated, so long as not forbidden by the
constitutional text: the executive power was given in
general terms, strengthened by specific terms where
emphasis was regarded as appropriate, and was limited
by direct expressions where limitation was needed. . ." The
language of Chief Justice Taft in Myers makes clear that
the constitutional concept of inherent power is not a
synonym for power without limit; rather, the concept
suggests only that not all powers granted in the
Constitution are themselves exhausted by internal
enumeration, so that, within a sphere properly regarded as
one of "executive' power, authority is implied unless there
or elsewhere expressly limited. [TRIBE, AMERICAN
CONSTITUTIONAL LAW 158-159 (1978).]
And neither can we subscribe to the view that a recognition
of the President's implied or residual powers is tantamount
to setting the stage for another dictatorship. Despite
petitioners' strained analogy, the residual powers of the
President under the Constitution should not be confused
with the power of the President under the 1973
Constitution to legislate pursuant to Amendment No. 6
which provides:
Whenever in the judgment of the President (Prime
Minister), there exists a grave emergency or a threat or
imminence thereof, or whenever the interim Batasang
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, he may, in
order to meet the exigency, issue the necessary decrees,
orders, or letters of instruction, which shall form part of the
law of the land,
There is no similarity between the residual powers of the
President under the 1987 Constitution and the power of
the President under the 1973 Constitution pursuant to
Amendment No. 6. First of all, Amendment No. 6 refers to
an express grant of power. It is not implied. Then,
Amendment No. 6 refers to a grant to the President of
the specific power of legislation.
4. Among the duties of the President under the
Constitution, in compliance with his (or her) oath of office,
is to protect and promote the interest and welfare of the
people. Her decision to bar the return of the Marcoses and
subsequently, the remains of Mr. Marcos at the present
time and under present circumstances is in compliance
with this bounden duty. In the absence of a clear showing
that she had acted with arbitrariness or with grave abuse
of discretion in arriving at this decision, the Court will not
enjoin the implementation of this decision.
ACCORDINGLY, the Court resolved to DENY the Motion
for Reconsideration for lack of merit."
JOSE B.L. REYES, in behalf of the ANTI-
BASES COALITION (ABC)
vs.
RAMON BAGATSING, as Mayor of the City of
Manila
FERNANDO, C.J.:ñé+.£ªwph!1
This Court, in this case of first impression, at least as to
some aspects, is called upon to delineate the boundaries
of the protected area of the cognate rights to free speech
and peaceable assembly, 1 against an alleged intrusion by
respondent Mayor Ramon Bagatsing. Petitioner, retired
Justice JB L. Reyes, on behalf of the Anti-Bases Coalition
sought a permit from the City of Manila to hold a peaceful
march and rally on October 26, 1983 from 2:00 to 5:00 in
the afternoon, starting from the Luneta, a public park, to
the gates of the United States Embassy, hardly two blocks
away. Once there, and in an open space of public property,
a short program would be held. 2 During the course of the
oral argument, 3 it was stated that after the delivery of two
brief speeches, a petition based on the resolution adopted
on the last day by the International Conference for General
Disbarmament, World Peace and the Removal of All
Foreign Military Bases held in Manila, would be presented
to a representative of the Embassy or any of its personnel
who may be there so that it may be delivered to the United
States Ambassador. The march would be attended by the
local and foreign participants of such conference. There
was likewise an assurance in the petition that in the
exercise of the constitutional rights to free speech and
assembly, all the necessary steps would be taken by it "to
ensure a peaceful march and rally." 4
The filing of this suit for mandamus with alternative prayer
for writ of preliminary mandatory injunction on October 20,
1983 was due to the fact that as of that date, petitioner had
not been informed of any action taken on his request on
behalf of the organization to hold a rally. On October 25,
1983, the answer of respondent Mayor was filed on his
behalf by Assistant Solicitor General Eduardo G.
Montenegro. 5 It turned out that on October 19, such
permit was denied. Petitioner was unaware of such a fact
as the denial was sent by ordinary mail. The reason for
refusing a permit was due to police intelligence reports
which strongly militate against the advisability of issuing
such permit at this time and at the place applied for." 6 To
be more specific, reference was made to persistent
intelligence reports affirm[ing] the plans of
subversive/criminal elements to infiltrate and/or disrupt
any assembly or congregations where a large number of
people is expected to attend." 7 Respondent Mayor
suggested, however, in accordance with the
recommendation of the police authorities, that "a permit
may be issued for the rally if it is to be held at the Rizal
Coliseum or any other enclosed area where the safety of
the participants themselves and the general public may be
ensured." 8
The oral argument was heard on October 25, 1983, the
very same day the answer was filed. The Court then
deliberated on the matter. That same afternoon, a minute
resolution was issued by the Court granting the mandatory
injunction prayed for on the ground that there was no
showing of the existence of a clear and present danger of
a substantive evil that could justify the denial of a permit.
On this point, the Court was unanimous, but there was a
dissent by Justice Aquino on the ground that the holding
of a rally in front of the US Embassy would be violative of
Ordinance No. 7295 of the City of Manila. The last
sentence of such minute resolution reads: "This resolution
is without prejudice to a more extended opinion." 9 Hence
this detailed exposition of the Court's stand on the matter.
1. It is thus clear that the Court is called upon to protect
the exercise of the cognate rights to free speech and
peaceful assembly, arising from the denial of a permit. The
Constitution is quite explicit: "No law shall be passed
abridging the freedom of speech, or of the press, or the
right of the people peaceably to assemble and petition the
Government for redress of grievances." 10 Free speech,
like free press, may be Identified with the liberty to discuss
publicly and truthfully any matter of public concern without
censorship or punishment. 11 There is to be then no
previous restraint on the communication of views or
subsequent liability whether in libel suits, 12 prosecution for
sedition, 13 or action for damages, 14 or contempt
proceedings 15 unless there be a clear and present danger
of a substantive evil that [the State] has a right to
prevent." 16 Freedom of assembly connotes the right
people to meet peaceably for consultation and discussion
of matters Of public concern.17 It is entitled to be accorded
the utmost deference and respect. It is hot to be limited,
much less denied, except on a showing, as 's the case with
freedom of expression, of a clear and present danger of a
substantive evil that the state has a right to
prevent. 18 Even prior to the 1935 Constitution, Justice
Maicolm had occasion to stress that it is a necessary
consequence of our republican institutions and
complements the right of free speech. 19 To paraphrase
opinion of Justice Rutledge speaking for the majority of
the American Supreme Court Thomas v. Collins, 20 it was
not by accident or coincidence that the right to freedom of
speech and of the press were toupled in a single
guarantee with the and to petition the rights of the people
peaceably to assemble and to petition the government for
redress of grievances. All these rights, while not Identical,
are inseparable. the every case, therefo re there is a
limitation placed on the exercise of this right, the judiciary
is called upon to examine the effects of the challenged
governmental actuation. The sole justification for a
limitation on the exercise of this right, so fundamental to
the maintenance of democratic institutions, is the danger,
of a character both grave and imminent, of a serious evil
to public safety, public morals, public health, or any other
legitimate public interest. 21
2. Nowhere is the rationale that underlies the freedom of
expression and peaceable assembly better expressed
than in this excerpt from an opinion of Justice Frankfurter:
"It must never be forgotten, however, that the Bill of Rights
was the child of the Enlightenment. Back of the guaranty
of free speech lay faith in the power of an appeal to reason
by all the peaceful means for gaining access to the mind.
It was in order to avert force and explosions due to
restrictions upon rational modes of communication that the high pitch of excitement, and the greater the grievance and
guaranty of free speech was given a generous scope. But the more intense the feeling, the less perfect, as a rule, will
utterance in a context of violence can lose its significance be the disciplinary control of the leaders over their
as an appeal to reason and become part of an instrument irresponsible followers." 24 It bears repeating that for the
of force. Such utterance was not meant to be sheltered by constitutional right to be invoked, riotous conduct, injury to
the Constitution." 22 What was rightfully stressed is the property, and acts of vandalism must be avoided, To give
abandonment of reason, the utterance, whether verbal or free rein to one's destructive urges is to call for
printed, being in a context of violence. It must always be condemnation. It is to make a mockery of the high estate
remembered that this right likewise provides for a safety occupied by intellectual liberty in our scheme of values.
valve, allowing parties the opportunity to give vent to their-
3. There can be no legal objection, absent the existence of
views, even if contrary to the prevailing climate of opinion.
a clear and present danger of a substantive evil, on the
For if the peaceful means of communication cannot be
choice of Luneta as the place where the peace rally would
availed of, resort to non-peaceful means may be the only
start. The Philippines is committed to the view expressed
alternative. Nor is this the sole reason for the expression
in the plurality opinion, of 1939 vintage, of Justice Roberts
of dissent. It means more than just the right to be heard of
in Hague v. CIO: 25 Whenever the title of streets and parks
the person who feels aggrieved or who is dissatisfied with
may rest, they have immemorially been held in trust for the
things as they are. Its value may lie in the fact that there
use of the public and, time out of mind, have been used for
may be something worth hearing from the dissenter. That
purposes of assembly, communicating thoughts between
is to ensure a true ferment of Ideas. There are, of course,
citizens, and discussing public questions. Such use of the
well-defined limits. What is guaranteed is peaceable
streets and public places has, from ancient times, been a
assembly. One may not advocate disorder in the name of
part of the privileges, immunities, rights, and liberties of
protest, much less preach rebellion under the cloak of
citizens. The privilege of a citizen of the United States to
dissent. The Constitution frowns on disorder or tumult
use the streets and parks for communication of views on
attending a rally or assembly. resort to force is ruled out
national questions may be regulated in the interest of all; it
and outbreaks of violence to be avoided. The utmost calm
is not absolute, but relative, and must be exercised in
though is not required. As pointed out in an early Philippine
subordination to the general comfort and convenience,
case, penned in 1907 to be precise, United States v.
and in consonance with peace and good order; but it must
Apurado: 23 "It is rather to be expected that more or less
not, in the guise of regulation, be abridged or
disorder will mark the public assembly of the people to
denied. 26 The above excerpt was quoted with approval in
protest against grievances whether real or imaginary,
Primicias v. Fugoso. 27 Primicias made explicit what was
because on such occasions feeling is always wrought to a
implicit in Municipality of Cavite v. Rojas," 28 a 1915 persons using the public streets for a parade or procession
decision, where this Court categorically affirmed that to procure a special license therefor from the local
plazas or parks and streets are outside the commerce of authorities is not an unconstitutional abridgment of the
man and thus nullified a contract that leased Plaza rights of assembly or of freedom of speech and press,
Soledad of plaintiff-municipality. Reference was made to where, as the statute is construed by the state courts, the
such plaza "being a promenade for public use," 29 which licensing authorities are strictly limited, in the issuance of
certainly is not the only purpose that it could serve. To licenses, to a consideration of the time, place, and manner
repeat, there can be no valid reason why a permit should of the parade or procession, with a view to conserving the
not be granted for the or oposed march and rally starting public convenience and of affording an opportunity to
from a public dark that is the Luneta. provide proper policing, and are not invested with arbitrary
discretion to issue or refuse license, ... " 30 Nor should the
4. Neither can there be any valid objection to the use of
point made by Chief Justice Hughes in a subsequent
the streets, to the gates of the US Embassy, hardly two
portion of the opinion be ignored, "Civil liberties, as
block-away at the Roxas Boulevard. Primicias v.
guaranteed by the Constitution, imply the existence of an
Fugoso has resolved any lurking doubt on the matter. In
organized society maintaining public order without which
holding that the then Mayor Fugoso of the City of Manila
liberty itself would be lost in the excesses of unrestricted
should grant a permit for a public meeting at Plaza Miranda
abuses. The authority of a municipality to impose
in Quiapo, this Court categorically declared: "Our
regulations in order to assure the safety and convenience
conclusion finds support in the decision in the case
of the people in the use of public highways has never been
of Willis Cox vs. State of New Hampshire, 312 U.S., 569.
regarded as inconsistent with civil liberties but rather as
In that case, the statute of New Hampshire P. L. chap. 145,
one of the means of safeguarding the good order upon
section 2, providing that 'no parade or procession upon
which they ultimately depend. The control of travel on the
any ground abutting thereon, shall 'De permitted unless a
streets of cities is the most familiar illustration of this
special license therefor shall first be explained from the
recognition of social need. Where a restriction of the use
selectmen of the town or from licensing committee,' was
of highways in that relation is designed to promote the
construed by the Supreme Court of New Hampshire as not
public convenience in the interest of all, it cannot be
conferring upon the licensing board unfettered discretion
disregarded by the attempted exercise of some civil right
to refuse to grant the license, and held valid. And the
which in other circumstances would be entitled to
Supreme Court of the United States, in its decision (1941)
protection." 31
penned by Chief Justice Hughes affirming the judgment of
the State Supreme Court, held that 'a statute requiring
5. There is a novel aspect to this case, If the rally were 7295 of the City of Manila prohibiting the holding or staging
confined to Luneta, no question, as noted, would have of rallies or demonstrations within a radius of five hundred
arisen. So, too, if the march would end at another park. As (500) feet from any foreign mission or chancery and for
previously mentioned though, there would be a short other purposes. Unless the ordinance is nullified, or
program upon reaching the public space between the two declared ultra vires, its invocation as a defense is
gates of the United States Embassy at Roxas Boulevard. understandable but not decisive, in view of the primacy
That would be followed by the handing over of a petition accorded the constitutional rights of free speech and
based on the resolution adopted at the closing session of peaceable assembly. Even if shown then to be applicable,
the Anti-Bases Coalition. The Philippines is a signatory of that question the confronts this Court.
the Vienna Convention on Diplomatic Relations adopted in
6. There is merit to the observation that except as to the
1961. It was concurred in by the then Philippine Senate on
novel aspects of a litigation, the judgment must be
May 3, 1965 and the instrument of ratification was signed
confined within the limits of previous decisions. The law
by the President on October 11, 1965, and was thereafter
declared on past occasions is, on the whole, a safe guide,
deposited with the Secretary General of the United Nations
So it has been here. Hence, as noted, on the afternoon of
on November 15. As of that date then, it was binding on
the hearing, October 25, 1983, this Court issued the
the Philippines. The second paragraph of the Article 22
minute resolution granting the mandatory injunction
reads: "2. The receiving State is under a special duty to
allowing the proposed march and rally scheduled for the
take appropriate steps to protect the premises of the
next day. That conclusion was inevitable ill the absence of
mission against any intrusion or damage and to prevent
a clear and present danger of a substantive, evil to a
any disturbance of the peace of the mission or impairment
legitimate public interest. There was no justification then to
of its dignity. " 32 The Constitution "adopts the generally
deny the exercise of the constitutional rights of tree speech
accepted principles of international law as part of the law
and peaceable assembly. These rights are assured by our
of the land. ..." 33 To the extent that the Vienna Convention
Constitution and the Universal Declaration of Human
is a restatement of the generally accepted principles of
Rights. 35 The participants to such assembly, composed
international law, it should be a part of the law of the
primarily of those in attendance at the International
land. 34 That being the case, if there were a clear and
Conference for General Disbarmament, World Peace and
present danger of any intrusion or damage, or disturbance
the Removal of All Foreign Military Bases would start from
of the peace of the mission, or impairment of its dignity,
the Luneta. proceeding through Roxas Boulevard to the
there would be a justification for the denial of the permit
gates of the United States Embassy located at the same
insofar as the terminal point would be the Embassy.
street. To repeat, it is settled law that as to public places,
Moreover, respondent Mayor relied on Ordinance No.
especially so as to parks and streets, there is freedom of
access. Nor is their use dependent on who is the applicant
for the permit, whether an individual or a group. If it were,
then the freedom of access becomes discriminatory
access, giving rise to an equal protection question. The
principle under American doctrines was given utterance by
Chief Justice Hughes in these words: "The question, if the
rights of free speech and peaceable assembly are to be
preserved, is not as to the auspices under which the
meeting is held but as to its purpose; not as to The
relations of the speakers, but whether their utterances
transcend the bounds of the freedom of speech which the
Constitution protects." 36 There could be danger to public
peace and safety if such a gathering were marked by
turbulence. That would deprive it of its peaceful character.
Even then, only the guilty parties should be held
accountable. It is true that the licensing official, here
respondent Mayor, is not devoid of discretion in
determining whether or not a permit would be granted. It is
not, however, unfettered discretion. While prudence
requires that there be a realistic appraisal not of what may
possibly occur but of what may probably occur, given all
the relevant circumstances, still the assumption —
especially so where the assembly is scheduled for a
specific public — place is that the permit must be for the
assembly being held there. The exercise of such a right, in
the language of Justice Roberts, speaking for the
American Supreme Court, is not to be "abridged on the
plea that it may be exercised in some other place." 37
7. In fairness to respondent Mayor, he acted on the belief
that Navarro v. Villegas 38 and Pagkakaisa ng
39
Manggagawang Pilipino (PMP.) v. Bagatsing, called for
application. While the General rule is that a permit should
recognize the right of the applicants to hold their assembly
at a public place of their choice, another place may be
designated by the licensing authority if it be shown that
there is a clear and present danger of a substantive evil if
no such change were made. In the Navarro and the
Pagkakaisa decisions, this Court was persuaded that the
clear and present danger test was satisfied. The present
situation is quite different. Hence the decision reached by
the Court. The mere assertion that subversives may
infiltrate the ranks of the demonstrators does not suffice.
Not that it should be overlooked. There was in this case,
however, the assurance of General Narciso Cabrera,
Superintendent, Western Police District, Metropolitan
Police Force, that the police force is in a position to cope
with such emergency should it arise That is to comply with
its duty to extend protection to the participants of such
peaceable assembly. Also from him came the
commendable admission that there were the least five
previous demonstrations at the Bayview hotel Area and
Plaza Ferguson in front of the United States Embassy
where no untoward event occurred. It was made clear by
petitioner, through counsel, that no act offensive to the
dignity of the United States Mission in the Philippines
would take place and that, as mentioned at the outset of
this opinion, "all the necessary steps would be taken by it
'to ensure a peaceful march and rally.' " 40Assistant
Solicitor General Montenegro expressed the view that the
presence of policemen may in itself be a provocation. It is
a sufficient answer that they should stay at a discreet
distance, but ever ready and alert to cope with any
contingency. There is no need to repeat what was pointed
out by Chief Justice Hughes in Cox that precisely, it is the
duty of the city authorities to provide the proper police
protection to those exercising their right to peaceable
assembly and freedom of expression.
8. By way of a summary The applicants for a permit to hold
an assembly should inform the licensing authority of the
date, the public place where and the time when it will take
place. If it were a private place, only the consent of the
owner or the one entitled to its legal possession is
required. Such application should be filed well ahead in
time to enable the public official concerned to appraise
whether there may be valid objections to the grant of the
permit or to its grant but at another public place. It is an
indispensable condition to such refusal or modification that
the clear and present danger test be the standard for the
decision reached. If he is of the view that there is such an
imminent and grave danger of a substantive evil, the
applicants must be heard on the matter. Thereafter, his
decision, whether favorable or adverse, must be
transmitted to them at the earliest opportunity. Thus if so
minded, then, can have recourse to the proper judicial
authority. Free speech and peaceable assembly, along
with the other intellectual freedoms, are highly ranked in
our scheme of constitutional values. It cannot be too
strongly stressed that on the judiciary, — even more so
than on the other departments — rests the grave and
delicate responsibility of assuring respect for and
deference to such preferred rights. No verbal formula, no
sanctifying phrase can, of course, dispense with what has
been so felicitiously termed by Justice Holmes "as the
sovereign prerogative of judgment." Nonetheless, the
presumption must be to incline the weight of the scales of
justice on the side of such rights, enjoying as they do
precedence and primacy. Clearly then, to the extent that
there may be inconsistencies between this resolution and
that of Navarro v. Villegas, that case is pro tanto modified.
So it was made clear in the original resolution of October
25, 1983.
9. Respondent Mayor posed the issue of the applicability
of Ordinance No. 7295 of the City of Manila prohibiting the
holding or staging of rallies or demonstrations within a
radius of five hundred (500) feet from any foreign mission
or chancery and for other purposes. It is to be admitted
that it finds support In the previously quoted Article 22 of
the Vienna Convention on Diplomatic Relations. There
was no showing, however, that the distance between the
chancery and the embassy gate is less than 500 feet. Even
if it could be shown that such a condition is satisfied. it
does not follow that respondent Mayor could legally act the
way he did. The validity of his denial of the permit sought
could still be challenged. It could be argued that a case of
unconstitutional application of such ordinance to the
exercise of the right of peaceable assembly presents itself.
As in this case there was no proof that the distance is less
than 500 feet, the need to pass on that issue was obviated,
Should it come, then the qualification and observation of
Justices Makasiar and Plana certainly cannot be
summarily brushed aside. The high estate accorded the
rights to free speech and peaceable assembly demands
nothing less.
10. Ordinarily, the remedy in cases of this character is to
set aside the denial or the modification of the permit sought
and order the respondent official, to grant it. Nonetheless,
as there was urgency in this case, the proposed march and
rally being scheduled for the next day after the hearing,
this Court. in the exercise of its conceded authority,
granted the mandatory injunction in the resolution of
October 25, 1983. It may be noted that the peaceful
character of the peace march and rally on October 26 was
not marred by any untoward incident. So it has been in
other assemblies held elsewhere. It is quite reassuring
such that both on the part of the national government and
the citizens, reason and moderation have prevailed. That
is as it should be.
WHEREFORE, the mandatory injunction prayed for is
granted. No costs.
LEOVILLO C. AGUSTIN,
vs.
HON. ROMEO F. EDU, in his capacity as Land
Transportation Commissioner; HON. JUAN
PONCE ENRILE, in his capacity as Minister of
National Defense; HON. ALFREDO L. JUINIO,
in his capacity as Minister Of Public Works,
Transportation and Communications; and
HON: BALTAZAR AQUINO, in his capacity as
Minister of Public Highways
FERNANDO, J.:
The validity of a letter of Instruction 1 providing for an early
seaming device for motor vehicles is assailed in this
prohibition proceeding as being violative of the
constitutional guarantee of due process and, insofar as the
rules and regulations for its implementation are
concerned, for transgressing the fundamental principle of
non- delegation of legislative power. The Letter of
Instruction is stigmatized by petitioner who is possessed
of the requisite standing, as being arbitrary and
oppressive. A temporary restraining order as issued and
respondents Romeo F. Edu, Land Transportation
Commissioner Juan Ponce Enrile, Minister of National
Defense; Alfredo L. Juinio, Minister of Public Works,
Transportation and Communications; and Baltazar
Aquino, Minister of Public Highways; were to answer. That
they did in a pleading submitted by Solicitor General
Estelito P. Mendoza. 2Impressed with a highly persuasive
quality, it makes devoid clear that the imputation of a
constitutional infirmity is devoid of justification The Letter
of Instruction on is a valid police power measure. Nor could
the implementing rules and regulations issued by
respondent Edu be considered as amounting to an
exercise of legislative power. Accordingly, the petition
must be dismissed.
The facts are undisputed. The assailed Letter of Instruction
No. 229 of President Marcos, issued on December 2,
1974, reads in full: "[Whereas], statistics show that one of
the major causes of fatal or serious accidents in land
transportation is the presence of disabled, stalled or
parked motor vehicles along streets or highways without
any appropriate early warning device to signal
approaching motorists of their presence; [Whereas], the
hazards posed by such obstructions to traffic have been
recognized by international bodies concerned with traffic
safety, the 1968 Vienna Convention on Road Signs and
Signals and the United Nations Organization (U.N.);
[Whereas], the said Vienna Convention which was ratified
by the Philippine Government under P.D. No. 207,
recommended the enactment of local legislation for the
installation of road safety signs and devices; [Now,
therefore, I, Ferdinand E. Marcos], President of the
Philippines, in the interest of safety on all streets and
highways, including expressways or limited access roads,
do hereby direct: 1. That all owners, users or drivers of
motor vehicles shall have at all times in their motor
vehicles at least one (1) pair of early warning device
consisting of triangular, collapsible reflectorized plates in
red and yellow colors at least 15 cms. at the base and 40
cms. at the sides. 2. Whenever any motor vehicle is stalled
or disabled or is parked for thirty (30) minutes or more on
any street or highway, including expressways or limited
access roads, the owner, user or driver thereof shall cause
the warning device mentioned herein to be installed at
least four meters away to the front and rear of the motor
vehicle staged, disabled or parked. 3. The Land
Transportation Commissioner shall cause Reflectorized
Triangular Early Warning Devices, as herein described, to
be prepared and issued to registered owners of motor
vehicles, except motorcycles and trailers, charging for
each piece not more than 15 % of the acquisition cost. He
shall also promulgate such rules and regulations as are
appropriate to effectively implement this order. 4. All
hereby concerned shall closely coordinate and take such
measures as are necessary or appropriate to carry into
effect then instruction. 3 Thereafter, on November 15,
1976, it was amended by Letter of Instruction No. 479 in
this wise. "Paragraph 3 of Letter of Instruction No. 229 is
hereby amended to read as follows: 3. The Land
transportation Commissioner shall require every motor
vehicle owner to procure from any and present at the
registration of his vehicle, one pair of a reflectorized early
warning device, as d bed of any brand or make chosen by
mid motor vehicle . The Land Transportation
Commissioner shall also promulgate such rule and
regulations as are appropriate to effectively implement this
order.'" 4 There was issued accordingly, by respondent
Edu, the implementing rules and regulations on December
10, 1976. 5 They were not enforced as President Marcos
on January 25, 1977, ordered a six-month period of
suspension insofar as the installation of early warning
device as a pre-registration requirement for motor vehicle
was concerned. 6 Then on June 30, 1978, another Letter
of Instruction 7 the lifting of such suspension and directed
the immediate implementation of Letter of Instruction No.
229 as amended. 8 It was not until August 29, 1978 that
respondent Edu issued Memorandum Circular No. 32,
worded thus: "In pursuance of Letter of Instruction No. 716,
dated June 30, 1978, the implementation of Letter of
Instruction No. 229, as amended by Letter of Instructions
No. 479, requiring the use of Early Warning Devices
(EWD) on motor vehicle, the following rules and
regulations are hereby issued: 1. LTC Administrative
Order No. 1, dated December 10, 1976; shall now be
implemented provided that the device may come from
whatever source and that it shall have substantially
complied with the EWD specifications contained in Section
2 of said administrative order; 2. In order to insure that
every motor vehicle , except motorcycles, is equipped with
the device, a pair of serially numbered stickers, to be
issued free of charge by this Commission, shall be
attached to each EWD. The EWD. serial number shall be
indicated on the registration certificate and official receipt
of payment of current registration fees of the motor vehicle
concerned. All Orders, Circulars, and Memoranda in
conflict herewith are hereby superseded, This Order shall
take effect immediately. 9 It was for immediate
implementation by respondent Alfredo L. Juinio, as
Minister of Public Works, transportation, and
Communications. 10
Petitioner, after setting forth that he "is the owner of a
Volkswagen Beetle Car, Model 13035, already properly
equipped when it came out from the assembly lines with
blinking lights fore and aft, which could very well serve as
an early warning device in case of the emergencies
mentioned in Letter of Instructions No. 229, as amended,
as well as the implementing rules and regulations in
Administrative Order No. 1 issued by the land
transportation Commission," 11 alleged that said Letter of
Instruction No. 229, as amended, "clearly violates the
provisions and delegation of police power, [sic] * * *: " For
him they are "oppressive, unreasonable, arbitrary,
confiscatory, nay unconstitutional and contrary to the
precepts of our compassionate New Society." 12 He
contended that they are "infected with arbitrariness
because it is harsh, cruel and unconscionable to the
motoring public;" 13 are "one-sided, onerous and patently
illegal and immoral because [they] will make
manufacturers and dealers instant millionaires at the
expense of car owners who are compelled to buy a set of
the so-called early warning device at the rate of P 56.00 to
P72.00 per set." 14 are unlawful and unconstitutional and
contrary to the precepts of a compassionate New Society
[as being] compulsory and confiscatory on the part of the
motorists who could very well provide a practical
alternative road safety device, or a better substitute to the
specified set of EWD's." 15 He therefore prayed for a
judgment both the assailed Letters of Instructions and
Memorandum Circular void and unconstitutional and for a
restraining order in the meanwhile.
A resolution to this effect was handed down by this Court
on October 19, 1978: "L-49112 (Leovillo C. Agustin v. Hon.
Romeo F. Edu, etc., et al.) — Considering the allegations
contained, the issues raised and the arguments adduced
in the petition for prohibition with writ of p prohibitory and/or
mandatory injunction, the Court Resolved to (require) the
respondents to file an answer thereto within ton (10) days
from notice and not to move to dismiss the petition. The
Court further Resolved to [issue] a [temporary restraining
order] effective as of this date and continuing until
otherwise ordered by this Court.16
Two motions for extension were filed by the Office of the
Solicitor General and granted. Then on November 15,
1978, he Answer for respondents was submitted. After
admitting the factual allegations and stating that they
lacked knowledge or information sufficient to form a belief
as to petitioner owning a Volkswagen Beetle car," they
"specifically deny the allegations and stating they lacked
knowledge or information sufficient to form a belief as to
petitioner owning a Volkswagen Beetle Car, 17 they
specifically deny the allegations in paragraphs X and XI
(including its subparagraphs 1, 2, 3, 4) of Petition to the
effect that Letter of Instruction No. 229 as amended by
Letters of Instructions Nos. 479 and 716 as well as Land
transportation Commission Administrative Order No. 1 and
its Memorandum Circular No. 32 violates the constitutional
provisions on due process of law, equal protection of law
and undue delegation of police power, and that the same
are likewise oppressive, arbitrary, confiscatory, one-sided,
onerous, immoral unreasonable and illegal the truth being
that said allegations are without legal and factual basis and
for the reasons alleged in the Special and Affirmative
Defenses of this Answer."18 Unlike petitioner who
contented himself with a rhetorical recital of his litany of
grievances and merely invoked the sacramental phrases
of constitutional litigation, the Answer, in demonstrating
that the assailed Letter of Instruction was a valid exercise
of the police power and implementing rules and
regulations of respondent Edu not susceptible to the
charge that there was unlawful delegation of legislative
power, there was in the portion captioned Special and
Affirmative Defenses, a citation of what respondents
believed to be the authoritative decisions of this Tribunal
calling for application. They are Calalang v.
Williams, 19 Morfe v. Mutuc, 20 and Edu v.
21
Ericta. Reference was likewise made to the 1968
Vienna Conventions of the United Nations on road traffic,
road signs, and signals, of which the Philippines was a
signatory and which was duly ratified. 22 Solicitor General
Mendoza took pains to refute in detail, in language calm
and dispassionate, the vigorous, at times intemperate,
accusation of petitioner that the assailed Letter of
Instruction and the implementing rules and regulations
cannot survive the test of rigorous scrutiny. To repeat, its
highly-persuasive quality cannot be denied.
This Court thus considered the petition submitted for
decision, the issues being clearly joined. As noted at the
outset, it is far from meritorious and must be dismissed.
1. The Letter of Instruction in question was issued in the
exercise of the police power. That is conceded by
petitioner and is the main reliance of respondents. It is the
submission of the former, however, that while embraced in
such a category, it has offended against the due process
and equal protection safeguards of the Constitution,
although the latter point was mentioned only in passing.
The broad and expansive scope of the police power which
was originally Identified by Chief Justice Taney of the
American Supreme Court in an 1847 decision as "nothing
more or less than the powers of government inherent in
every sovereignty" 23 was stressed in the aforementioned
case of Edu v. Ericta thus: "Justice Laurel, in the first
leading decision after the Constitution came into
force, Calalang v. Williams, Identified police power with
state authority to enact legislation that may interfere with
personal liberty or property in order to promote the general
welfare. Persons and property could thus 'be subjected to
all kinds of restraints and burdens in order to we the
general comfort, health and prosperity of the state.' Shortly
after independence in 1948, Primicias v.
Fugoso reiterated the doctrine, such a competence being
referred to as 'the power to prescribe regulations to
promote the health, morals, peace, education, good order
or safety, and general welfare of the people. The concept
was set forth in negative terms by Justice Malcolm in a pre-
Commonwealth decision as 'that inherent and plenary
power in the State which enables it to prohibit all things
hurtful to the comfort, safety and welfare of society. In that
sense it could be hardly distinguishable as noted by this
Court in Morfe v. Mutuc with the totality of legislative
power. It is in the above sense the greatest and most
powerful at. tribute of government. It is, to quote Justice
Malcolm anew, 'the most essential, insistent, and at least
table powers, I extending as Justice Holmes aptly pointed
out 'to all the great public needs.' Its scope, ever-
expanding to meet the exigencies of the times, even to
anticipate the future where it could be done, provides
enough room for an efficient and flexible response to
conditions and circumstances thus assuring the greatest
benefits. In the language of Justice Cardozo: 'Needs that
were narrow or parochial in the past may be interwoven in
the present with the well-being of the nation. What is
critical or urgent changes with the time.' The police power
is thus a dynamic agency, suitably vague and far from
precisely defined, rooted in the conception that men in
organizing the state and imposing upon its government
limitations to safeguard constitutional rights did not intend
thereby to enable an individual citizen or a group of
citizens to obstruct unreasonably the enactment of such
salutary measures calculated to communal peace, safety,
good order, and welfare." 24
2. It was thus a heavy burden to be shouldered by
petitioner, compounded by the fact that the particular
police power measure challenged was clearly intended to
promote public safety. It would be a rare occurrence
indeed for this Court to invalidate a legislative or executive
act of that character. None has been called to our
attention, an indication of its being non-existent. The latest
decision in point, Edu v. Ericta, sustained the validity of the
Reflector Law, 25 an enactment conceived with the same
end in view. Calalang v. Williams found nothing
objectionable in a statute, the purpose of which was: "To
promote safe transit upon, and. avoid obstruction on roads
and streets designated as national roads * * *. 26 As a
matter of fact, the first law sought to be nullified after the
effectivity of the 1935 Constitution, the National Defense
Act, 27 with petitioner failing in his quest, was likewise
prompted by the imperative demands of public safety.
3. The futility of petitioner's effort to nullify both the Letter
of Instruction and the implementing rules and regulations
becomes even more apparent considering his failure to lay
the necessary factual foundation to rebut the presumption
of validity. So it was held in Ermita-Malate Hotel and Motel
Operators Association, Inc. v. City Mayor of Manila. 28 The
rationale was clearly set forth in an excerpt from a decision
of Justice Branders of the American Supreme Court,
quoted in the opinion: "The statute here questioned deals
with a subject clearly within the scope of the police power.
We are asked to declare it void on the ground that the
specific method of regulation prescribed is unreasonable
and hence deprives the plaintiff of due process of law. As
underlying questions of fact may condition the
constitutionality of legislation of this character, the
presumption of constitutionality must prevail in the
absence of some factual foundation of record in
overthrowing the statute. 29
4. Nor did the Solicitor General as he very well could, rely
solely on such rebutted presumption of validity. As was
pointed out in his Answer "The President certainly had in
his possession the necessary statistical information and
data at the time he issued said letter of instructions, and
such factual foundation cannot be defeated by petitioner's
naked assertion that early warning devices 'are not too
vital to the prevention of nighttime vehicular accidents'
because allegedly only 390 or 1.5 per cent of the supposed
26,000 motor vehicle accidents that in 1976 involved rear-
end collisions (p. 12 of petition). Petitioner's statistics is not
backed up by demonstrable data on record. As aptly stated
by this Honorable Court: Further: "It admits of no doubt
therefore that there being a presumption of validity, the
necessity for evidence to rebut it is unavoidable, unless
the statute or ordinance is void on its face, which is not the
case here"' * * *. But even as g the verity of petitioner's
statistics, is that not reason enough to require the
installation of early warning devices to prevent another 390
rear-end collisions that could mean the death of 390 or
more Filipinos and the deaths that could likewise result
from head-on or frontal collisions with stalled
vehicles?" 30 It is quite manifest then that the issuance of
such Letter of Instruction is encased in the armor of prior,
careful study by the Executive Department. To set it aside
for alleged repugnancy to the due process clause is to give
sanction to conjectural claims that exceeded even the
broadest permissible limits of a pleader's well known
penchant for exaggeration.
5. The rather wild and fantastic nature of the charge of
oppressiveness of this Letter of Instruction was exposed in
the Answer of the Solicitor General thus: "Such early
warning device requirement is not an expensive
redundancy, nor oppressive, for car owners whose cars
are already equipped with 1) blinking lights in the fore and
aft of said motor vehicles,' 2) "battery-powered blinking
lights inside motor vehicles," 3) "built-in reflectorized tapes
on front and rear bumpers of motor vehicles," or 4) "well-
lighted two (2) petroleum lamps (the Kinke) * * * because:
Being universal among the signatory countries to the said
1968 Vienna Conventions, and visible even under adverse
conditions at a distance of at least 400 meters, any
motorist from this country or from any part of the world,
who sees a reflectorized rectangular early seaming device
installed on the roads, highways or expressways, will
conclude, without thinking, that somewhere along the
travelled portion of that road, highway, or expressway,
there is a motor vehicle which is stationary, stalled or
disabled which obstructs or endangers passing traffic. On
the other hand, a motorist who sees any of the
aforementioned other built in warning devices or the
petroleum lamps will not immediately get adequate
advance warning because he will still think what that
blinking light is all about. Is it an emergency vehicle? Is it
a law enforcement car? Is it an ambulance? Such
confusion or uncertainty in the mind of the motorist will
thus increase, rather than decrease, the danger of
collision. 31
6. Nor did the other extravagant assertions of
constitutional deficiency go unrefuted in the Answer of the
Solicitor General "There is nothing in the questioned Letter
of Instruction No. 229, as amended, or in Administrative
Order No. 1, which requires or compels motor vehicle
owners to purchase the early warning device prescribed
thereby. All that is required is for motor vehicle owners
concerned like petitioner, to equip their motor vehicles with
a pair of this early warning device in question, procuring or
obtaining the same from whatever source. In fact, with a
little of industry and practical ingenuity, motor vehicle
owners can even personally make or produce this early
warning device so long as the same substantially conforms
with the specifications laid down in said letter of instruction
and administrative order. Accordingly the early warning
device requirement can neither be oppressive, onerous,
immoral, nor confiscatory, much less does it make
manufacturers and dealers of said devices 'instant
millionaires at the expense of car owners' as petitioner so
sweepingly concludes * * *. Petitioner's fear that with the
early warning device requirement 'a more subtle racket
may be committed by those called upon to enforce it * * *
is an unfounded speculation. Besides, that unscrupulous
officials may try to enforce said requirement in an
unreasonable manner or to an unreasonable degree, does
not render the same illegal or immoral where, as in the
instant case, the challenged Letter of Instruction No. 229
and implementing order disclose none of the constitutional
defects alleged against it.32
7 It does appear clearly that petitioner's objection to this
Letter of Instruction is not premised on lack of power, the
justification for a finding of unconstitutionality, but on the
pessimistic, not to say negative, view he entertains as to
its wisdom. That approach, it put it at its mildest, is
distinguished, if that is the appropriate word, by its
unorthodoxy. It bears repeating "that this Court, in the
language of Justice Laurel, 'does not pass upon questions
of wisdom justice or expediency of legislation.' As
expressed by Justice Tuason: 'It is not the province of the
courts to supervise legislation and keep it within the
bounds of propriety and common sense. That is primarily
and exclusively a legislative concern.' There can be no
possible objection then to the observation of Justice
Montemayor. 'As long as laws do not violate any
Constitutional provision, the Courts merely interpret and
apply them regardless of whether or not they are wise or
salutary. For they, according to Justice Labrador, 'are not
supposed to override legitimate policy and * * * never
inquire into the wisdom of the law.' It is thus settled, to
paraphrase Chief Justice Concepcion in Gonzales v.
Commission on Elections, that only congressional power
or competence, not the wisdom of the action taken, may
be the basis for declaring a statute invalid. This is as it
ought to be. The principle of separation of powers has in
the main wisely allocated the respective authority of each
department and confined its jurisdiction to such a sphere.
There would then be intrusion not allowable under the
Constitution if on a matter left to the discretion of a
coordinate branch, the judiciary would substitute its own.
If there be adherence to the rule of law, as there ought to
be, the last offender should be courts of justice, to which
rightly litigants submit their controversy precisely to
maintain unimpaired the supremacy of legal norms and
prescriptions. The attack on the validity of the challenged
provision likewise insofar as there may be objections, even
if valid and cogent on is wisdom cannot be sustained. 33
8. The alleged infringement of the fundamental principle of
non-delegation of legislative power is equally without any
support well-settled legal doctrines. Had petitioner taken
the trouble to acquaint himself with authoritative
pronouncements from this Tribunal, he would not have the
temerity to make such an assertion. An exempt from the
aforecited decision of Edu v. Ericta sheds light on the
matter: "To avoid the taint of unlawful delegation, there
must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lays
down fundamental policy. Otherwise, the charge of
complete abdication may be hard to repel A standard thus
defines legislative policy, marks its maps out its
boundaries and specifies the public agency to apply it. It
indicates the circumstances under which the legislative
command is to be effected. It is the criterion by which
legislative purpose may be carried out. Thereafter, the
executive or administrative office designated may in
pursuance of the above guidelines promulgate
supplemental rules and regulations. The standard may be
either express or implied. If the former, the non-delegation
objection is easily met. The standard though does not have
to be spelled out specifically. It could be implied from the
policy and purpose of the act considered as a whole. In the
Reflector Law clearly, the legislative objective is public
safety. What is sought to be attained as in Calalang v.
Williams is "safe transit upon the roads.' This is to adhere
to the recognition given expression by Justice Laurel in a
decision announced not too long after the Constitution
came into force and effect that the principle of non-
delegation "has been made to adapt itself to the
complexities of modern governments, giving rise to the
adoption, within certain limits, of the principle of
"subordinate legislation" not only in the United States and
England but in practically all modern governments.' He
continued: 'Accordingly, with the growing complexity of
modern life, the multiplication of the subjects of
governmental regulation, and the increased difficulty of
administering the laws, there is a constantly growing
tendency toward the delegation of greater powers by the
legislature and toward the approval of the practice by the
courts.' Consistency with the conceptual approach
requires the reminder that what is delegated is authority
non-legislative in character, the completeness of the
statute when it leaves the hands of Congress being
assumed." 34
9. The conclusion reached by this Court that this petition
must be dismissed is reinforced by this consideration. The
petition itself quoted these two whereas clauses of the
assailed Letter of Instruction: "[Whereas], the hazards
posed by such obstructions to traffic have been recognized
by international bodies concerned with traffic safety, the
1968 Vienna Convention on Road Signs and Signals and
the United Nations Organization (U.N.); [Whereas], the
said Vionna Convention, which was ratified by the
Philippine Government under P.D. No. 207, recommended
the enactment of local legislation for the installation of road
safety signs and devices; * * * " 35 It cannot be disputed
then that this Declaration of Principle found in the
Constitution possesses relevance: "The Philippines * * *
adopts the generally accepted principles of international
law as part of the law of the land * * *." 36 The 1968 Vienna
Convention on Road Signs and Signals is impressed with
such a character. It is not for this country to repudiate a
commitment to which it had pledged its word. The concept
of Pacta sunt servanda stands in the way of such an
attitude, which is, moreover, at war with the principle of
international morality.
10. That is about all that needs be said. The rather court
reference to equal protection did not even elicit any
attempt on the Part of Petitioner to substantiate in a
manner clear, positive, and categorical why such a casual
observation should be taken seriously. In no case is there
a more appropriate occasion for insistence on what was
referred to as "the general rule" in Santiago v. Far Eastern
Broadcasting Co., 37 namely, "that the constitutionality of a
law wig not be considered unless the point is specially
pleaded, insisted upon, and adequately argued." 38"Equal
protection" is not a talismanic formula at the mere
invocation of which a party to a lawsuit can rightfully expect
that success will crown his efforts. The law is anything but
that.
WHEREFORE, this petition is dismissed. The restraining
order is lifted. This decision is immediately executory. No
costs.
SHIGENORI KURODA,
vs.
Major General RAFAEL JALANDONI, Brigadier
General CALIXTO DUQUE, Colonel
MARGARITO TORALBA, Colonel IRENEO
BUENCONSEJO, Colonel PEDRO TABUENA,
Major FEDERICO ARANAS, MELVILLE S.
HUSSEY and ROBERT PORT
MORAN, C.J.:
Shigenori Kuroda, formerly a Lieutenant-General of the
Japanese Imperial Army and Commanding General of the
Japanese Imperial Forces in The Philippines during a
period covering 19433 and 19444 who is now charged
before a military Commission convened by the Chief of
Staff of the Armed forces of the Philippines with having
unlawfully disregarded and failed "to discharge his duties
as such command, permitting them to commit brutal
atrocities and other high crimes against noncombatant
civilians and prisoners of the Imperial Japanese Forces in
violation of the laws and customs of war" — comes before
this Court seeking to establish the illegality of Executive
Order No. 68 of the President of the Philippines: to enjoin
and prohibit respondents Melville S. Hussey and Robert
Port from participating in the prosecution of petitioner's
case before the Military Commission and to permanently
prohibit respondents from proceeding with the case of
petitioners.
In support of his case petitioner tenders the following
principal arguments.
First. — "That Executive Order No. 68 is illegal on the
ground that it violates not only the provision of our
constitutional law but also our local laws to say nothing of
the fact (that) the Philippines is not a signatory nor an
adherent to the Hague Convention on Rules and
Regulations covering Land Warfare and therefore
petitioners is charged of 'crimes' not based on law, national
and international." Hence petitioner argues — "That in
view off the fact that this commission has been empanelled
by virtue of an unconstitutional law an illegal order this
commission is without jurisdiction to try herein petitioner."
Second. — That the participation in the prosecution of the
case against petitioner before the Commission in behalf of
the United State of America of attorneys Melville Hussey
and Robert Port who are not attorneys authorized by the
Supreme Court to practice law in the Philippines is a
diminution of our personality as an independent state and
their appointment as prosecutor are a violation of our
Constitution for the reason that they are not qualified to
practice law in the Philippines.
Third. — That Attorneys Hussey and Port have no
personality as prosecution the United State not being a
party in interest in the case.
Executive Order No. 68, establishing a National War
Crimes Office prescribing rule and regulation governing
the trial of accused war criminals, was issued by the
President of the Philippines on the 29th days of July, 1947
This Court holds that this order is valid and constitutional.
Article 2 of our Constitution provides in its section 3, that
— disciplinary measure those enemies who in their attempt
The Philippines renounces war as an instrument of
national policy and adopts the generally accepted
principles of international law as part of the of the nation.
In accordance with the generally accepted principle of
international law of the present day including the Hague
Convention the Geneva Convention and significant
precedents of international jurisprudence established by
the United Nation all those person military or civilian who
have been guilty of planning preparing or waging a war of
aggression and of the commission of crimes and offenses
consequential and incidental thereto in violation of the laws
and customs of war, of humanity and civilization are held
accountable therefor. Consequently in the promulgation
and enforcement of Execution Order No. 68 the President
of the Philippines has acted in conformity with the
generally accepted and policies of international law which
are part of the our Constitution.
The promulgation of said executive order is an exercise by
the President of his power as Commander in chief of all
our armed forces as upheld by this Court in the case of
Yamashita vs. Styer (L-129, 42 Off. Gaz., 664) 1 when we
said —
War is not ended simply because hostilities have ceased.
After cessation of armed hostilities incident of war may
remain pending which should be disposed of as in time of
war. An importance incident to a conduct of war is the
adoption of measure by the military command not only to
repel and defeat the enemies but to seize and subject to
to thwart or impede our military effort have violated the law
of war. (Ex parte Quirin 317 U.S., 1; 63 Sup. Ct., 2.) Indeed
the power to create a military commission for the trial and
punishment of war criminals is an aspect of waging war.
And in the language of a writer a military commission has
jurisdiction so long as a technical state of war continues.
This includes the period of an armistice or military
occupation up to the effective of a treaty of peace and may
extend beyond by treaty agreement. (Cowles Trial of
War Criminals by Military Tribunals, America Bar
Association Journal June, 1944.)
Consequently, the President as Commander in Chief is
fully empowered to consummate this unfinished aspect of
war namely the trial and punishment of war criminal
through the issuance and enforcement of Executive Order
No. 68.
Petitioner argues that respondent Military Commission has
no Jurisdiction to try petitioner for acts committed in
violation of the Hague Convention and the Geneva
Convention because the Philippines is not a signatory to
the first and signed the second only in 1947. It cannot be
denied that the rules and regulation of the Hague and
Geneva conventions form, part of and are wholly based on
the generally accepted principals of international law. In
facts these rules and principles were accepted by the two
belligerent nation the United State and Japan who were
signatories to the two Convention, Such rule and principles
therefore form part of the law of our nation even if the
Philippines was not a signatory to the conventions
embodying them for our Constitution has been deliberately
general and extensive in its scope and is not confined to
the recognition of rule and principle of international law as
continued inn treaties to which our government may have
been or shall be a signatory.
Furthermore when the crimes charged against petitioner
were allegedly committed the Philippines was under the
sovereignty of United States and thus we were equally
bound together with the United States and with Japan to
the right and obligation contained in the treaties between
the belligerent countries. These rights and obligation were
not erased by our assumption of full sovereignty. If at all
our emergency as a free state entitles us to enforce the
right on our own of trying and punishing those who
committed crimes against crimes against our people. In
this connection it is well to remember what we have said
in the case of Laurel vs. Misa (76 Phil., 372):
. . . The change of our form government from
Commonwealth to Republic does not affect the
prosecution of those charged with the crime of treason
committed during then Commonwealth because it is an
offense against the same sovereign people. . . .
By the same token war crimes committed against our
people and our government while we were a
Commonwealth are triable and punishable by our present
Republic.
Petitioner challenges the participation of two American
attorneys namely Melville S. Hussey and Robert Port in the
prosecution of his case on the ground that said attorney's
are not qualified to practice law in Philippines in
accordance with our Rules of court and the appointment of
said attorneys as prosecutors is violative of our national
sovereignty.
In the first place respondent Military Commission is a
special military tribunal governed by a special law and not
by the Rules of court which govern ordinary civil court. It
has already been shown that Executive Order No. 68
which provides for the organization of such military
commission is a valid and constitutional law. There is
nothing in said executive order which requires that counsel
appearing before said commission must be attorneys
qualified to practice law in the Philippines in accordance
with the Rules of Court. In facts it is common in military
tribunals that counsel for the parties are usually military
personnel who are neither attorneys nor even possessed
of legal training.
Secondly the appointment of the two American attorneys
is not violative of our nation sovereignty. It is only fair and
proper that United States, which has submitted the
vindication of crimes against her government and her
people to a tribunal of our nation should be allowed
representation in the trial of those very crimes. If there has
been any relinquishment of sovereignty it has not been by
our government but by the United State Government which
has yielded to us the trial and punishment of her enemies.
The least that we could do in the spirit of comity is to allow
them representation in said trials.
Alleging that the United State is not a party in interest in
the case petitioner challenges the personality of attorneys
Hussey and Port as prosecutors. It is of common
knowledge that the United State and its people have been
equally if not more greatly aggrieved by the crimes with
which petitioner stands charged before the Military
Commission. It can be considered a privilege for our
Republic that a leader nation should submit the vindication
of the honor of its citizens and its government to a military
tribunal of our country.
The Military Commission having been convened by virtue
of a valid law with jurisdiction over the crimes charged
which fall under the provisions of Executive Order No. 68,
and having said petitioner in its custody, this Court will not
interfere with the due process of such Military commission.
For all the foregoing the petition is denied with costs de
oficio.
WIGBERTO E. TAÑADA and ANNA ROCO, FRANCISCO TATAD and FREDDIE
DOMINIQUE COSETENG, as members of the WEBB, in their respective capacities as
Philippine Senate and as taxpayers; members of the Philippine Senate who
GREGORIO ANDOLANA and JOKER ARROYO concurred in the ratification by the President
as members of the House of Representatives of the Philippines of the Agreement
and as taxpayers; NICANOR P. PERLAS and Establishing the World Trade Organization;
HORACIO R. MORALES, both as taxpayers; SALVADOR ENRIQUEZ, in his capacity as
CIVIL LIBERTIES UNION, NATIONAL Secretary of Budget and Management;
ECONOMIC PROTECTIONISM ASSOCIATION, CARIDAD VALDEHUESA, in her capacity as
CENTER FOR ALTERNATIVE DEVELOPMENT National Treasurer; RIZALINO NAVARRO, in
INITIATIVES, LIKAS-KAYANG KAUNLARAN his capacity as Secretary of Trade and
FOUNDATION, INC., PHILIPPINE RURAL Industry; ROBERTO SEBASTIAN, in his
RECONSTRUCTION MOVEMENT, capacity as Secretary of Agriculture;
DEMOKRATIKONG KILUSAN NG ROBERTO DE OCAMPO, in his capacity as
MAGBUBUKID NG PILIPINAS, INC., and Secretary of Finance; ROBERTO ROMULO, in
PHILIPPINE PEASANT INSTITUTE, in his capacity as Secretary of Foreign Affairs;
representation of various taxpayers and as and TEOFISTO T. GUINGONA, in his capacity
non-governmental organizations as Executive Secretary
vs. PANGANIBAN, J.:
EDGARDO ANGARA, ALBERTO ROMULO,
LETICIA RAMOS-SHAHANI, HEHERSON The emergence on January 1, 1995 of the World Trade
Organization, abetted by the membership thereto of the
ALVAREZ, AGAPITO AQUINO, RODOLFO vast majority of countries has revolutionized international
BIAZON, NEPTALI GONZALES, ERNESTO business and economic relations amongst states. It has
HERRERA, JOSE LINA, GLORIA. irreversibly propelled the world towards trade liberalization
MACAPAGAL-ARROYO, ORLANDO and economic globalization. Liberalization, globalization,
MERCADO, BLAS OPLE, JOHN OSMEÑA, deregulation and privatization, the third-millennium buzz
SANTANINA RASUL, RAMON REVILLA, RAUL words, are ushering in a new borderless world of business
by sweeping away as mere historical relics the heretofore
traditional modes of promoting and protecting national
economies like tariffs, export subsidies, import quotas,
quantitative restrictions, tax exemptions and currency
controls. Finding market niches and becoming the best in
specific industries in a market-driven and export-oriented
global scenario are replacing age-old "beggar-thy-
neighbor" policies that unilaterally protect weak and
inefficient domestic producers of goods and services. In
the words of Peter Drucker, the well-known management
guru, "Increased participation in the world economy has
become the key to domestic economic growth and
prosperity."
Brief Historical Background
To hasten worldwide recovery from the devastation
wrought by the Second World War, plans for the
establishment of three multilateral institutions — inspired
by that grand political body, the United Nations — were
discussed at Dumbarton Oaks and Bretton Woods.
The first was the World Bank (WB) which was to address
the rehabilitation and reconstruction of war-ravaged and
later developing countries; the second, the International
Monetary Fund (IMF) which was to deal with currency
problems; and the third, the International Trade
Organization (ITO), which was to foster order and
predictability in world trade and to minimize unilateral
protectionist policies that invite challenge, even retaliation,
from other states. However, for a variety of reasons,
including its non-ratification by the United States, the ITO,
unlike the IMF and WB, never took off. What remained was
only GATT — the General Agreement on Tariffs and
Trade. GATT was a collection of treaties governing access
to the economies of treaty adherents with no
institutionalized body administering the agreements or
dependable system of dispute settlement.
After half a century and several dizzying rounds of
negotiations, principally the Kennedy Round, the Tokyo
Round and the Uruguay Round, the world finally gave birth
to that administering body — the World Trade
Organization — with the signing of the "Final Act" in
Marrakesh, Morocco and the ratification of the WTO
Agreement by its members.1
Like many other developing countries, the Philippines
joined WTO as a founding member with the goal, as
articulated by President Fidel V. Ramos in two letters to
the Senate (infra), of improving "Philippine access to
foreign markets, especially its major trading partners,
through the reduction of tariffs on its exports, particularly
agricultural and industrial products." The President also
saw in the WTO the opening of "new opportunities for the
services sector . . . , (the reduction of) costs and
uncertainty associated with exporting . . . , and (the
attraction of) more investments into the country." Although
the Chief Executive did not expressly mention it in his
letter, the Philippines — and this is of special interest to
the legal profession — will benefit from the WTO system
of dispute settlement by judicial adjudication through the
independent WTO settlement bodies called (1) Dispute
Settlement Panels and (2) Appellate Tribunal. Heretofore,
trade disputes were settled mainly through negotiations
where solutions were arrived at frequently on the basis of
relative bargaining strengths, and where naturally, weak
and underdeveloped countries were at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines
"to place nationals and products of member-countries on
the same footing as Filipinos and local products" and (2)
that the WTO "intrudes, limits and/or impairs" the
constitutional powers of both Congress and the Supreme
Court, the instant petition before this Court assails the
WTO Agreement for violating the mandate of the 1987
Constitution to "develop a self-reliant and independent
national economy effectively controlled by Filipinos . . . (to)
give preference to qualified Filipinos (and to) promote the
preferential use of Filipino labor, domestic materials and
locally produced goods."
Simply stated, does the Philippine Constitution prohibit
Philippine participation in worldwide trade liberalization
and economic globalization? Does it proscribe Philippine
integration into a global economy that is liberalized,
deregulated and privatized? These are the main questions
raised in this petition for certiorari, prohibition
and mandamus under Rule 65 of the Rules of Court
praying (1) for the nullification, on constitutional grounds,
of the concurrence of the Philippine Senate in the
ratification by the President of the Philippines of the
Agreement Establishing the World Trade Organization
(WTO Agreement, for brevity) and (2) for the prohibition of
its implementation and enforcement through the release
and utilization of public funds, the assignment of public
officials and employees, as well as the use of government
properties and resources by respondent-heads of various
executive offices concerned therewith. This concurrence
is embodied in Senate Resolution No. 97, dated December
14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then
Secretary of The Department of Trade and Industry
(Secretary Navarro, for brevity), representing the
Government of the Republic of the Philippines, signed in
Marrakesh, Morocco, the Final Act Embodying the Results
of the Uruguay Round of Multilateral Negotiations (Final
Act, for brevity).
By signing the Final Act,2 Secretary Navarro on behalf of
the Republic of the Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the
consideration of their respective competent authorities,
with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate
received a letter dated August 11, 1994 from the President
of the Philippines,3 stating among others that "the Uruguay
Round Final Act is hereby submitted to the Senate for its
concurrence pursuant to Section 21, Article VII of the
Constitution."
On August 13, 1994, the members of the Philippine Senate Annex 1A: Multilateral Agreement on Trade in Goods
received another letter from the President of the General Agreement on Tariffs and Trade 1994
Philippines4 likewise dated August 11, 1994, which stated Agreement on Agriculture
among others that "the Uruguay Round Final Act, the Agreement on the Application of Sanitary and
Agreement Establishing the World Trade Organization, the Phytosanitary Measures
Ministerial Declarations and Decisions, and the Agreement on Textiles and Clothing
Understanding on Commitments in Financial Services are Agreement on Technical Barriers to Trade
hereby submitted to the Senate for its concurrence Agreement on Trade-Related Investment Measures
pursuant to Section 21, Article VII of the Constitution." Agreement on Implementation of Article VI of he
General Agreement on Tariffs and Trade
On December 9, 1994, the President of the Philippines
1994
certified the necessity of the immediate adoption of P.S.
Agreement on Implementation of Article VII of the
1083, a resolution entitled "Concurring in the Ratification
General on Tariffs and Trade 1994
of the Agreement Establishing the World Trade
Agreement on Pre-Shipment Inspection
Organization."5
Agreement on Rules of Origin
On December 14, 1994, the Philippine Senate adopted Agreement on Imports Licensing Procedures
Resolution No. 97 which "Resolved, as it is hereby Agreement on Subsidies and Coordinating
resolved, that the Senate concur, as it hereby concurs, in Measures
the ratification by the President of the Philippines of the Agreement on Safeguards
Agreement Establishing the World Trade
6
Annex 1B: General Agreement on Trade in Services and
Organization." The text of the WTO Agreement is written
Annexes
on pages 137 et seq. of Volume I of the 36-
volume Uruguay Round of Multilateral Trade Annex 1C: Agreement on Trade-Related Aspects of
Negotiations and includes various agreements and Intellectual
associated legal instruments (identified in the said Property Rights
Agreement as Annexes 1, 2 and 3 thereto and collectively
ANNEX 2
referred to as Multilateral Trade Agreements, for brevity)
as follows: Understanding on Rules and Procedures Governing
the Settlement of Disputes
ANNEX 1
ANNEX 3
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines
signed7 the Instrument of Ratification, declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS,
President of the Republic of the Philippines, after having
seen and considered the aforementioned Agreement
Establishing the World Trade Organization and the
agreements and associated legal instruments included in
Annexes one (1), two (2) and three (3) of that Agreement
which are integral parts thereof, signed at Marrakesh,
Morocco on 15 April 1994, do hereby ratify and confirm the
same and every Article and Clause thereof.
To emphasize, the WTO Agreement ratified by the
President of the Philippines is composed of the Agreement
Proper and "the associated legal instruments included in
Annexes one (1), two (2) and three (3) of that Agreement
which are integral parts thereof."
On the other hand, the Final Act signed by Secretary
Navarro embodies not only the WTO Agreement (and its
integral annexes aforementioned) but also (1) the
Ministerial Declarations and Decisions and (2) the
Understanding on Commitments in Financial Services. In
his Memorandum dated May 13, 1996,8 the Solicitor
General describes these two latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five
declarations and decisions on a wide range of matters,
such as measures in favor of least developed countries,
notification procedures, relationship of WTO with the
International Monetary Fund (IMF), and agreements on
technical barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial Services
dwell on, among other things, standstill or limitations and
qualifications of commitments to existing non-conforming
measures, market access, national treatment, and
definitions of non-resident supplier of financial services,
commercial presence and new financial service.
On December 29, 1994, the present petition was filed.
After careful deliberation on respondents' comment and
petitioners' reply thereto, the Court resolved on December
12, 1995, to give due course to the petition, and the parties
thereafter filed their respective memoranda. The court also
requested the Honorable Lilia R. Bautista, the Philippine
Ambassador to the United Nations stationed in Geneva,
Switzerland, to submit a paper, hereafter referred to as
"Bautista Paper,"9 for brevity, (1) providing a historical
background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the
Court directed:
(a) the petitioners to submit the (1) Senate Committee
Report on the matter in controversy and (2) the transcript
of proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file
(1) a list of Philippine treaties signed prior to the Philippine
adherence to the WTO Agreement, which derogate from
Philippine sovereignty and (2) copies of the multi-volume
WTO Agreement and other documents mentioned in the
Final Act, as soon as possible.
After receipt of the foregoing documents, the Court said it
would consider the case submitted for resolution. In a
Compliance dated September 16, 1996, the Solicitor
General submitted a printed copy of the 36-
volume Uruguay Round of Multilateral Trade Negotiations,
and in another Compliance dated October 24, 1996, he
listed the various "bilateral or multilateral treaties or
international instruments involving derogation of Philippine
sovereignty." Petitioners, on the other hand, submitted
their Compliance dated January 28, 1997, on January 30,
1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners
summarized the issues as follows:
A. Whether the petition presents a political question or is
otherwise not justiciable.
B. Whether the petitioner members of the Senate who
participated in the deliberations and voting leading to the
concurrence are estopped from impugning the validity of
the Agreement Establishing the World Trade Organization
or of the validity of the concurrence.
C. Whether the provisions of the Agreement Establishing
the World Trade Organization contravene the provisions of
Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of
the 1987 Philippine Constitution.
D. Whether provisions of the Agreement Establishing the
World Trade Organization unduly limit, restrict and impair
Philippine sovereignty specifically the legislative power
which, under Sec. 2, Article VI, 1987 Philippine
Constitution is "vested in the Congress of the Philippines";
E. Whether provisions of the Agreement Establishing the
World Trade Organization interfere with the exercise of
judicial power.
F. Whether the respondent members of the Senate acted
in grave abuse of discretion amounting to lack or excess
of jurisdiction when they voted for concurrence in the
ratification of the constitutionally-infirm Agreement
Establishing the World Trade Organization.
G. Whether the respondent members of the Senate acted
in grave abuse of discretion amounting to lack or excess
of jurisdiction when they concurred only in the ratification
of the Agreement Establishing the World Trade
Organization, and not with the Presidential submission
which included the Final Act, Ministerial Declaration and
Decisions, and the Understanding on Commitments in
Financial Services.
On the other hand, the Solicitor General as counsel for
respondents "synthesized the several issues raised by
petitioners into the following": 10
1. Whether or not the provisions of the "Agreement
Establishing the World Trade Organization and the
Agreements and Associated Legal Instruments included in
Annexes one (1), two (2) and three (3) of that agreement"
cited by petitioners directly contravene or undermine the case — was deliberated upon by the Court and will thus
letter, spirit and intent of Section 19, Article II and Sections be ruled upon as the first issue;
10 and 12, Article XII of the 1987 Constitution.
(2) The matter of estoppel will not be taken up because
2. Whether or not certain provisions of the Agreement this defense is waivable and the respondents have
unduly limit, restrict or impair the exercise of legislative effectively waived it by not pursuing it in any of their
power by Congress. pleadings; in any event, this issue, even if ruled in
respondents' favor, will not cause the petition's dismissal
3. Whether or not certain provisions of the Agreement
as there are petitioners other than the two senators, who
impair the exercise of judicial power by this Honorable
are not vulnerable to the defense of estoppel; and
Court in promulgating the rules of evidence.
(3) The issue of alleged grave abuse of discretion on the
4. Whether or not the concurrence of the Senate "in the
part of the respondent senators will be taken up as an
ratification by the President of the Philippines of the
integral part of the disposition of the four issues raised by
Agreement establishing the World Trade Organization"
the Solicitor General.
implied rejection of the treaty embodied in the Final Act.
During its deliberations on the case, the Court noted that
By raising and arguing only four issues against the seven
the respondents did not question the locus standi of
presented by petitioners, the Solicitor General has
petitioners. Hence, they are also deemed to have waived
effectively ignored three, namely: (1) whether the petition
the benefit of such issue. They probably realized that
presents a political question or is otherwise not justiciable;
grave constitutional issues, expenditures of public funds
(2) whether petitioner-members of the Senate (Wigberto
and serious international commitments of the nation are
E. Tañada and Anna Dominique Coseteng) are estopped
involved here, and that transcendental public interest
from joining this suit; and (3) whether the respondent-
requires that the substantive issues be met head on and
members of the Senate acted in grave abuse of discretion
decided on the merits, rather than skirted or deflected by
when they voted for concurrence in the ratification of the
procedural matters. 11
WTO Agreement. The foregoing notwithstanding, this
Court resolved to deal with these three issues thus: To recapitulate, the issues that will be ruled upon shortly
are:
(1) The "political question" issue — being very
fundamental and vital, and being a matter that probes into (1) DOES THE PETITION PRESENT A JUSTICIABLE
the very jurisdiction of this Court to hear and decide this CONTROVERSY? OTHERWISE STATED, DOES THE
PETITION INVOLVE A POLITICAL QUESTION OVER
WHICH THIS COURT HAS NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT
AND ITS THREE ANNEXES CONTRAVENE SEC. 19,
ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OF
THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND
ITS ANNEXES LIMIT, RESTRICT, OR IMPAIR THE
EXERCISE OF LEGISLATIVE POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR
INTERFERE WITH THE EXERCISE OF JUDICIAL
POWER BY THIS COURT IN PROMULGATING RULES
ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE
WTO AGREEMENT AND ITS ANNEXES SUFFICIENT
AND/OR VALID, CONSIDERING THAT IT DID NOT
INCLUDE THE FINAL ACT, MINISTERIAL
DECLARATIONS AND DECISIONS, AND THE
UNDERSTANDING ON COMMITMENTS IN FINANCIAL
SERVICES?
The First Issue: Does the Court
Have Jurisdiction Over the Controversy?
In seeking to nullify an act of the Philippine Senate on the
ground that it contravenes the Constitution, the petition no
doubt raises a justiciable controversy. Where an action of
the legislative branch is seriously alleged to have infringed
the Constitution, it becomes not only the right but in fact
the duty of the judiciary to settle the dispute. "The question
thus posed is judicial rather than political. The duty (to
adjudicate) remains to assure that the supremacy of the
Constitution is upheld." 12 Once a "controversy as to the
application or interpretation of a constitutional provision is
raised before this Court (as in the instant case), it becomes
a legal issue which the Court is bound by constitutional
mandate to decide." 13
The jurisdiction of this Court to adjudicate the
matters 14 raised in the petition is clearly set out in the
1987 Constitution, 15 as follows:
Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are
legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the government.
The foregoing text emphasizes the judicial department's
duty and power to strike down grave abuse of discretion
on the part of any branch or instrumentality of government
including Congress. It is an innovation in our political
law. 16 As explained by former Chief Justice Roberto
Concepcion, 17 "the judiciary is the final arbiter on the
question of whether or not a branch of government or any
of its officials has acted without jurisdiction or in excess of
jurisdiction or so capriciously as to constitute an abuse of
discretion amounting to excess of jurisdiction. This is not
only a judicial power but a duty to pass judgment on
matters of this nature."
As this Court has repeatedly and firmly emphasized in Second Issue: The WTO Agreement
many cases, 18 it will not shirk, digress from or abandon its and Economic Nationalism
sacred duty and authority to uphold the Constitution in
This is the lis mota, the main issue, raised by the petition.
matters that involve grave abuse of discretion brought
before it in appropriate cases, committed by any officer, Petitioners vigorously argue that the "letter, spirit and
agency, instrumentality or department of the government. intent" of the Constitution mandating "economic
nationalism" are violated by the so-called "parity
As the petition alleges grave abuse of discretion and as
provisions" and "national treatment" clauses scattered in
there is no other plain, speedy or adequate remedy in the
various parts not only of the WTO Agreement and its
ordinary course of law, we have no hesitation at all in
annexes but also in the Ministerial Decisions and
holding that this petition should be given due course and
Declarations and in the Understanding on Commitments in
the vital questions raised therein ruled upon under Rule 65
Financial Services.
of the Rules of Court. Indeed, certiorari, prohibition
and mandamus are appropriate remedies to raise Specifically, the "flagship" constitutional provisions
constitutional issues and to review and/or prohibit/nullify, referred to are Sec 19, Article II, and Secs. 10 and 12,
when proper, acts of legislative and executive officials. On Article XII, of the Constitution, which are worded as
this, we have no equivocation. follows:
We should stress that, in deciding to take jurisdiction over Article II
this petition, this Court will not review the wisdom of the
decision of the President and the Senate in enlisting the DECLARATION OF PRINCIPLES
country into the WTO, or pass upon the merits of trade AND STATE POLICIES
liberalization as a policy espoused by said international xxx xxx xxx
body. Neither will it rule on the propriety of the
government's economic policy of reducing/removing Sec. 19. The State shall develop a self-reliant and
tariffs, taxes, subsidies, quantitative restrictions, and other independent national economy effectively controlled by
import/trade barriers. Rather, it will only exercise its Filipinos.
constitutional duty "to determine whether or not there had xxx xxx xxx
been a grave abuse of discretion amounting to lack or
excess of jurisdiction" on the part of the Senate in ratifying Article XII
the WTO Agreement and its three annexes. NATIONAL ECONOMY AND PATRIMONY
xxx xxx xxx
Sec. 10. . . . The Congress shall enact measures that will
encourage the formation and operation of enterprises
whose capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering
the national economy and patrimony, the State shall give
preference to qualified Filipinos.
xxx xxx xxx
Sec. 12. The State shall promote the preferential use of
Filipino labor, domestic materials and locally produced
goods, and adopt measures that help make them
competitive.
Petitioners aver that these sacred constitutional principles
are desecrated by the following WTO provisions quoted in
their memorandum: 19
a) In the area of investment measures related to trade in
goods (TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under
GATT 1994, no Member shall apply any TRIM that is
inconsistent with the provisions of Article II or Article XI of
GATT 1994.
2. An illustrative list of TRIMS that are inconsistent with the
obligations of general elimination of quantitative
restrictions provided for in paragraph I of Article XI of
GATT 1994 is contained in the Annex to this Agreement."
(Agreement on Trade-Related Investment Measures, Vol.
27, Uruguay Round, Legal Instruments, p. 22121,
emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of
national treatment provided for in paragraph 4 of Article III
of GATT 1994 include those which are mandatory or
enforceable under domestic law or under administrative
rulings, or compliance with which is necessary to obtain an
advantage, and which require:
(a) the purchase or use by an enterprise of products of
domestic origin or from any domestic source, whether
specified in terms of particular products, in terms of volume
or value of products, or in terms of proportion of volume or
value of its local production; or
(b) that an enterprise's purchases or use of imported
products be limited to an amount related to the volume or
value of local products that it exports.
2. TRIMS that are inconsistent with the obligations of
general elimination of quantitative restrictions provided for
in paragraph 1 of Article XI of GATT 1994 include those
which are mandatory or enforceable under domestic laws
or under administrative rulings, or compliance with which
is necessary to obtain an advantage, and which restrict:
(a) the importation by an enterprise of products used in or
related to the local production that it exports;
(b) the importation by an enterprise of products used in or
related to its local production by restricting its access to
foreign exchange inflows attributable to the enterprise; or
(c) the exportation or sale for export specified in terms of
particular products, in terms of volume or value of
products, or in terms of a preparation of volume or value
of its local production. (Annex to the Agreement on Trade-
Related Investment Measures, Vol. 27, Uruguay Round
Legal Documents, p. 22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is
quoted as follows:
The products of the territory of any contracting party
imported into the territory of any other contracting
party shall be accorded treatment no less favorable than
that accorded to like products of national origin in respect
of laws, regulations and requirements affecting their
internal sale, offering for sale, purchase, transportation,
distribution or use, the provisions of this paragraph shall
not prevent the application of differential internal
transportation charges which are based exclusively on the
economic operation of the means of transport and not on
the nationality of the product." (Article III, GATT 1947, as
amended by the Protocol Modifying Part II, and Article
XXVI of GATT, 14 September 1948, 62 UMTS 82-84 in
relation to paragraph 1(a) of the General Agreement on
Tariffs and Trade 1994, Vol. 1, Uruguay Round, Legal
Instruments p. 177, emphasis supplied).
(b) In the area of trade related aspects of intellectual
property rights (TRIPS, for brevity):
Each Member shall accord to the nationals of other
Members treatment no less favourable than that it accords
to its own nationals with regard to the protection of
intellectual property. . . (par. 1 Article 3, Agreement on
Trade-Related Aspect of Intellectual Property rights, Vol.
31, Uruguay Round, Legal Instruments, p. 25432
(emphasis supplied)
(c) In the area of the General Agreement on Trade in
Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to
any conditions and qualifications set out therein, each
Member shall accord to services and service suppliers of
any other Member, in respect of all measures affecting the
supply of services, treatment no less favourable than it
accords to its own like services and service suppliers.
2. A Member may meet the requirement of paragraph I by
according to services and service suppliers of any other
Member, either formally suppliers of any other Member,
either formally identical treatment or formally different
treatment to that it accords to its own like services and
service suppliers.
3. Formally identical or formally different treatment shall be
considered to be less favourable if it modifies the
conditions of completion in favour of services or service
suppliers of the Member compared to like services or
service suppliers of any other Member. (Article XVII,
General Agreement on Trade in Services, Vol. 28,
Uruguay Round Legal Instruments, p. 22610 emphasis
supplied).
It is petitioners' position that the foregoing "national
treatment" and "parity provisions" of the WTO Agreement
"place nationals and products of member countries on the
same footing as Filipinos and local products," in
contravention of the "Filipino First" policy of the
Constitution. They allegedly render meaningless the
phrase "effectively controlled by Filipinos." The
constitutional conflict becomes more manifest when
viewed in the context of the clear duty imposed on the
Philippines as a WTO member to ensure the conformity of
its laws, regulations and administrative procedures with its
obligations as provided in the annexed
20
agreements. Petitioners further argue that these
provisions contravene constitutional limitations on the role
exports play in national development and negate the
preferential treatment accorded to Filipino labor, domestic
materials and locally produced goods.
On the other hand, respondents through the Solicitor
General counter (1) that such Charter provisions are not
self-executing and merely set out general policies; (2) that
these nationalistic portions of the Constitution invoked by
petitioners should not be read in isolation but should be
related to other relevant provisions of Art. XII, particularly
Secs. 1 and 13 thereof; (3) that read properly, the cited
WTO clauses do not conflict with Constitution; and (4) that
the WTO Agreement contains sufficient provisions to
protect developing countries like the Philippines from the
harshness of sudden trade liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles
Not Self-Executing
By its very title, Article II of the Constitution is a
"declaration of principles and state policies." The
counterpart of this article in the 1935 Constitution 21 is
called the "basic political creed of the nation" by Dean
Vicente Sinco. 22These principles in Article II are not
intended to be self-executing principles ready for
enforcement through the courts. 23 They are used by the
judiciary as aids or as guides in the exercise of its power
of judicial review, and by the legislature in its enactment of
laws. As held in the leading case of Kilosbayan,
Incorporated vs. Morato, 24 the principles and state
policies enumerated in Article II and some sections of
Article XII are not "self-executing provisions, the disregard
of which can give rise to a cause of action in the courts.
They do not embody judicially enforceable constitutional
rights but guidelines for legislation."
In the same light, we held in Basco vs. Pagcor 25 that
broad constitutional principles need legislative enactments
to implement the, thus:
On petitioners' allegation that P.D. 1869 violates Sections
11 (Personal Dignity) 12 (Family) and 13 (Role of Youth)
of Article II; Section 13 (Social Justice) of Article XIII and
Section 2 (Educational Values) of Article XIV of the 1987
Constitution, suffice it to state also that these are merely
statements of principles and policies. As such, they are
basically not self-executing, meaning a law should be
passed by Congress to clearly define and effectuate such
principles.
In general, therefore, the 1935 provisions were not
intended to be self-executing principles ready for
enforcement through the courts. They were rather
directives addressed to the executive and to the
legislature. If the executive and the legislature failed to
heed the directives of the article, the available remedy was
not judicial but political. The electorate could express their
displeasure with the failure of the executive and the
legislature through the language of the ballot. (Bernas, Vol.
II, p. 2).
The reasons for denying a cause of action to an alleged
infringement of board constitutional principles are sourced
from basic considerations of due process and the lack of
judicial authority to wade "into the uncharted ocean of
social and economic policy making." Mr. Justice Florentino
P. Feliciano in his concurring opinion in Oposa
vs. Factoran, Jr., 26 explained these reasons as follows:
My suggestion is simply that petitioners must, before the
trial court, show a more specific legal right — a right cast
in language of a significantly lower order of generality than
Article II (15) of the Constitution — that is or may be
violated by the actions, or failures to act, imputed to the
public respondent by petitioners so that the trial court can
validly render judgment grating all or part of the relief
prayed for. To my mind, the court should be understood as
simply saying that such a more specific legal right or rights
may well exist in our corpus of law, considering the general
policy principles found in the Constitution and the
existence of the Philippine Environment Code, and that the
trial court should have given petitioners an effective
opportunity so to demonstrate, instead of aborting the
proceedings on a motion to dismiss.
It seems to me important that the legal right which is an
essential component of a cause of action be a specific,
operable legal right, rather than a constitutional or
statutory policy, for at least two (2) reasons. One is that
unless the legal right claimed to have been violated or
disregarded is given specification in operational terms,
defendants may well be unable to defend themselves
intelligently and effectively; in other words, there are due
process dimensions to this matter.
The second is a broader-gauge consideration — where a
specific violation of law or applicable regulation is not
alleged or proved, petitioners can be expected to fall back
on the expanded conception of judicial power in the
second paragraph of Section 1 of Article VIII of the
Constitution which reads:
Sec. 1. . . .
Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are
legally demandable and enforceable, and to determine
whether or not there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the part of
any branch or instrumentality of the Government.
(Emphasis supplied)
When substantive standards as general as "the right to a
balanced and healthy ecology" and "the right to health" are
combined with remedial standards as broad ranging as "a
grave abuse of discretion amounting to lack or excess of
jurisdiction," the result will be, it is respectfully submitted,
to propel courts into the uncharted ocean of social and
economic policy making. At least in respect of the vast
area of environmental protection and management, our
courts have no claim to special technical competence and
experience and professional qualification. Where no
specific, operable norms and standards are shown to exist,
then the policy making departments — the legislative and
executive departments — must be given a real and
effective opportunity to fashion and promulgate those
norms and standards, and to implement them before the
courts should intervene.
Economic Nationalism Should Be Read with
Other Constitutional Mandates to Attain
Balanced Development of Economy
On the other hand, Secs. 10 and 12 of Article XII, apart
from merely laying down general principles relating to the
national economy and patrimony, should be read and
understood in relation to the other sections in said article,
especially Secs. 1 and 13 thereof which read:
Sec. 1. The goals of the national economy are a more
equitable distribution of opportunities, income, and wealth;
a sustained increase in the amount of goods and services
produced by the nation for the benefit of the people; and
an expanding productivity as the key to raising the quality
of life for all especially the underprivileged.
The State shall promote industrialization and full
employment based on sound agricultural development
and agrarian reform, through industries that make full and
efficient use of human and natural resources, and which
are competitive in both domestic and foreign markets.
However, the State shall protect Filipino enterprises
against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy
and all regions of the country shall be given optimum
opportunity to develop. . . .
xxx xxx xxx
Sec. 13. The State shall pursue a trade policy that serves
the general welfare and utilizes all forms and
arrangements of exchange on the basis of equality and
reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down
the basic goals of national economic development, as
follows:
1. A more equitable distribution of opportunities, income
and wealth;
2. A sustained increase in the amount of goods and
services provided by the nation for the benefit of the
people; and
3. An expanding productivity as the key to raising the
quality of life for all especially the underprivileged.
With these goals in context, the Constitution then ordains
the ideals of economic nationalism (1) by expressing
preference in favor of qualified Filipinos "in the grant of
rights, privileges and concessions covering the national
economy and patrimony" 27 and in the use of "Filipino
labor, domestic materials and locally-produced goods"; (2)
by mandating the State to "adopt measures that help make
them competitive; 28 and (3) by requiring the State to
"develop a self-reliant and independent national economy
effectively controlled by Filipinos." 29 In similar language,
the Constitution takes into account the realities of the
outside world as it requires the pursuit of "a trade policy
that serves the general welfare and utilizes all forms and
arrangements of exchange on the basis of equality ad
reciprocity"; 30 and speaks of industries "which are
competitive in both domestic and foreign markets" as well
as of the protection of "Filipino enterprises
against unfair foreign competition and trade practices."
It is true that in the recent case of Manila Prince Hotel
vs. Government Service Insurance System, et al., 31 this
Court held that "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 rule 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."
However, as the constitutional provision itself states, it is
enforceable only in regard to "the grants of rights,
privileges and concessions covering national economy
and patrimony" and not to every aspect of trade and
commerce. It refers to exceptions rather than the rule. The
issue here is not whether this paragraph of Sec. 10 of Art.
XII is self-executing or not. Rather, the issue is whether,
as a rule, there are enough balancing provisions in the
Constitution to allow the Senate to ratify the Philippine
concurrence in the WTO Agreement. And we hold that
there are.
All told, while the Constitution indeed mandates a bias in
favor of Filipino goods, services, labor and enterprises, at
the same time, it recognizes the need for business
exchange with the rest of the world on the bases of
equality and reciprocity and limits protection of Filipino
enterprises only against foreign competition and trade
practices that are unfair. 32 In other words, the Constitution
did not intend to pursue an isolationist policy. It did not shut
out foreign investments, goods and services in the
development of the Philippine economy. While the
Constitution does not encourage the unlimited entry of
foreign goods, services and investments into the country,
it does not prohibit them either. In fact, it allows an
exchange on the basis of equality and reciprocity, frowning
only on foreign competition that is unfair.
WTO Recognizes Need to
Protect Weak Economies
Upon the other hand, respondents maintain that the WTO
itself has some built-in advantages to protect weak and
developing economies, which comprise the vast majority
of its members. Unlike in the UN where major states have
permanent seats and veto powers in the Security Council,
in the WTO, decisions are made on the basis of sovereign
equality, with each member's vote equal in weight to that
of any other. There is no WTO equivalent of the UN
Security Council.
WTO decides by consensus whenever possible,
otherwise, decisions of the Ministerial Conference and the
General Council shall be taken by the majority of the votes
cast, except in cases of interpretation of the Agreement or
waiver of the obligation of a member which would require
three fourths vote. Amendments would require two thirds
vote in general. Amendments to MFN provisions and the
Amendments provision will require assent of all members.
Any member may withdraw from the Agreement upon the
expiration of six months from the date of notice of
withdrawals. 33
Hence, poor countries can protect their common interests
more effectively through the WTO than through one-on-
one negotiations with developed countries. Within the
WTO, developing countries can form powerful blocs to
push their economic agenda more decisively than outside
the Organization. This is not merely a matter of practical
alliances but a negotiating strategy rooted in law. Thus, the
basic principles underlying the WTO Agreement recognize
the need of developing countries like the Philippines to
"share in the growth in international trade commensurate
with the needs of their economic development." These
basic principles are found in the preamble 34of the WTO
Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and
economic endeavour should be conducted with a view to
raising standards of living, ensuring full employment and a
large and steadily growing volume of real income and
effective demand, and expanding the production of and
trade in goods and services, while allowing for the optimal
use of the world's resources in accordance with the
objective of sustainable development, seeking both to
protect and preserve the environment and to enhance the
means for doing so in a manner consistent with their
respective needs and concerns at different levels of
economic development,
Recognizing further that there is need for positive efforts
designed to ensure that developing countries, and
especially the least developed among them, secure
a share in the growth in international trade commensurate
with the needs of their economic development,
Being desirous of contributing to these objectives by
entering into reciprocal and mutually advantageous
arrangements directed to the substantial reduction of
tariffs and other barriers to trade and to the elimination of
discriminatory treatment in international trade relations,
Resolved, therefore, to develop an integrated, more viable
and durable multilateral trading system encompassing the
General Agreement on Tariffs and Trade, the results of
past trade liberalization efforts, and all of the results of the
Uruguay Round of Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further
the objectives underlying this multilateral trading system, .
. . (emphasis supplied.)
Specific WTO Provisos
Protect Developing Countries
So too, the Solicitor General points out that pursuant to
and consistent with the foregoing basic principles, the
WTO Agreement grants developing countries a more
lenient treatment, giving their domestic industries some
protection from the rush of foreign competition. Thus, with
respect to tariffs in general, preferential treatment is given
to developing countries in terms of the amount of tariff
reduction and the period within which the reduction is to be
spread out. Specifically, GATT requires an average
tariff reduction rate of 36% for developed countries to be
effected within a period of six (6) years while developing
countries — including the Philippines — are required to
effect an average tariff reduction of only 24% within ten
(10) years.
In respect to domestic subsidy, GATT requires developed
countries to reduce domestic support to agricultural
products by 20% over six (6) years, as compared to only
13% for developing countries to be effected within ten (10)
years.
In regard to export subsidy for agricultural products, GATT
requires developed countries to reduce their budgetary
outlays for export subsidy by 36% and export volumes
receiving export subsidy by 21% within a period of six (6)
years. For developing countries, however, the reduction
rate is only two-thirds of that prescribed for developed
countries and a longer period of ten (10) years within
which to effect such reduction.
Moreover, GATT itself has provided built-in protection from
unfair foreign competition and trade practices including
anti-dumping measures, countervailing measures and
safeguards against import surges. Where local businesses
are jeopardized by unfair foreign competition, the
Philippines can avail of these measures. There is hardly
therefore any basis for the statement that under the WTO,
local industries and enterprises will all be wiped out and
that Filipinos will be deprived of control of the economy.
Quite the contrary, the weaker situations of developing
nations like the Philippines have been taken into account;
thus, there would be no basis to say that in joining the
WTO, the respondents have gravely abused their
discretion. True, they have made a bold decision to steer
the ship of state into the yet uncharted sea of economic
liberalization. But such decision cannot be set aside on the
ground of grave abuse of discretion, simply because we
disagree with it or simply because we believe only in other
economic policies. As earlier stated, the Court in taking
jurisdiction of this case will not pass upon the advantages
and disadvantages of trade liberalization as an economic
policy. It will only perform its constitutional duty of
determining whether the Senate committed grave abuse
of discretion.
Constitution Does Not
Rule Out Foreign Competition
Furthermore, the constitutional policy of a "self-reliant and
independent national economy" 35 does not necessarily
rule out the entry of foreign investments, goods and
services. It contemplates neither "economic seclusion" nor
"mendicancy in the international community." As explained
by Constitutional Commissioner Bernardo Villegas,
sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a
developing country that is keenly aware of
overdependence on external assistance for even its most
basic needs. It does not mean autarky or economic
seclusion; rather, it means avoiding mendicancy in the
international community. Independence refers to the
freedom from undue foreign control of the national
economy, especially in such strategic industries as in the
development of natural resources and public utilities. 36
The WTO reliance on "most favored nation," "national
treatment," and "trade without discrimination" cannot be
struck down as unconstitutional as in fact they are rules of
equality and reciprocity that apply to all WTO members.
Aside from envisioning a trade policy based on "equality
and reciprocity," 37 the fundamental law encourages
industries that are "competitive in both domestic and
foreign markets," thereby demonstrating a clear policy
against a sheltered domestic trade environment, but one
in favor of the gradual development of robust industries
that can compete with the best in the foreign markets.
Indeed, Filipino managers and Filipino enterprises have
shown capability and tenacity to compete internationally.
And given a free trade environment, Filipino entrepreneurs
and managers in Hongkong have demonstrated the
Filipino capacity to grow and to prosper against the best
offered under a policy of laissez faire.
Constitution Favors Consumers,
Not Industries or Enterprises
The Constitution has not really shown any unbalanced
bias in favor of any business or enterprise, nor does it
contain any specific pronouncement that Filipino
companies should be pampered with a total proscription of
foreign competition. On the other hand, respondents claim
that WTO/GATT aims to make available to the Filipino
consumer the best goods and services obtainable
anywhere in the world at the most reasonable prices.
Consequently, the question boils down to whether
WTO/GATT will favor the general welfare of the public at
large.
Will adherence to the WTO treaty bring this ideal (of
favoring the general welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos'
general welfare because it will — as promised by its
promoters — expand the country's exports and generate
more employment?
Will it bring more prosperity, employment, purchasing
power and quality products at the most reasonable rates
to the Filipino public?
The responses to these questions involve "judgment calls"
by our policy makers, for which they are answerable to our
people during appropriate electoral exercises. Such
questions and the answers thereto are not subject to
judicial pronouncements based on grave abuse of
discretion.
Constitution Designed to Meet
Future Events and Contingencies
No doubt, the WTO Agreement was not yet in existence
when the Constitution was drafted and ratified in 1987.
That does not mean however that the Charter is
necessarily flawed in the sense that its framers might not
have anticipated the advent of a borderless world of
business. By the same token, the United Nations was not
yet in existence when the 1935 Constitution became
effective. Did that necessarily mean that the then
Constitution might not have contemplated a diminution of
the absoluteness of sovereignty when the Philippines
signed the UN Charter, thereby effectively surrendering
part of its control over its foreign relations to the decisions
of various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are
designed to meet not only the vagaries of contemporary
events. They should be interpreted to cover even future
and unknown circumstances. It is to the credit of its
drafters that a Constitution can withstand the assaults of
bigots and infidels but at the same time bend with the
refreshing winds of change necessitated by unfolding
events. As one eminent political law writer and respected
jurist 38 explains:
The Constitution must be quintessential rather than
superficial, the root and not the blossom, the base and
frame-work only of the edifice that is yet to rise. It is but the
core of the dream that must take shape, not in a twinkling
by mandate of our delegates, but slowly "in the crucible of
Filipino minds and hearts," where it will in time develop its
sinews and gradually gather its strength and finally
achieve its substance. In fine, the Constitution cannot, like
the goddess Athena, rise full-grown from the brow of the
Constitutional Convention, nor can it conjure by mere fiat
an instant Utopia. It must grow with the society it seeks to
re-structure and march apace with the progress of the
race, drawing from the vicissitudes of history the
dynamism and vitality that will keep it, far from becoming
a petrified rule, a pulsing, living law attuned to the
heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that "(e)ach Member shall
ensure the conformity of its laws, regulations and
administrative procedures with its obligations as provided
in the annexed Agreements." 39 Petitioners maintain that
this undertaking "unduly limits, restricts and impairs
Philippine sovereignty, specifically the legislative power
which under Sec. 2, Article VI of the 1987 Philippine
Constitution is vested in the Congress of the Philippines. It
is an assault on the sovereign powers of the Philippines
because this means that Congress could not pass
legislation that will be good for our national interest and
general welfare if such legislation will not conform with the
WTO Agreement, which not only relates to the trade in
goods . . . but also to the flow of investments and money .
. . as well as to a whole slew of agreements on socio-
cultural matters . . . 40
More specifically, petitioners claim that said WTO proviso
derogates from the power to tax, which is lodged in the
Congress. 41 And while the Constitution allows Congress
to authorize the President to fix tariff rates, import and
export quotas, tonnage and wharfage dues, and other
duties or imposts, such authority is subject to "specified
limits and . . . such limitations and restrictions" as
Congress may provide, 42 as in fact it did under Sec. 401
of the Tariff and Customs Code.
Sovereignty Limited by
International Law and Treaties
This Court notes and appreciates the ferocity and passion
by which petitioners stressed their arguments on this
issue. However, while sovereignty has traditionally been
deemed absolute and all-encompassing on the domestic
level, it is however subject to restrictions and limitations
voluntarily agreed to by the Philippines, expressly or
impliedly, as a member of the family of nations.
Unquestionably, the Constitution did not envision a hermit-
type isolation of the country from the rest of the world. In
its Declaration of Principles and State Policies, the
Constitution "adopts the generally accepted principles of
international law as part of the law of the land, and adheres
to the policy of peace, equality, justice, freedom,
cooperation and amity, with all nations." 43 By the doctrine
of incorporation, the country is bound by generally
accepted principles of international law, which are
considered to be automatically part of our own
laws. 44 One of the oldest and most fundamental rules in
international law is pacta sunt servanda — international
agreements must be performed in good faith. "A treaty
engagement is not a mere moral obligation but creates a
legally binding obligation on the parties . . . A state which
has contracted valid international obligations is bound to
make in its legislations such modifications as may be
necessary to ensure the fulfillment of the obligations
undertaken." 45
By their inherent nature, treaties really limit or restrict the
absoluteness of sovereignty. By their voluntary act,
nations may surrender some aspects of their state power
in exchange for greater benefits granted by or derived from
a convention or pact. After all, states, like individuals, live
with coequals, and in pursuit of mutually covenanted
objectives and benefits, they also commonly agree to limit
the exercise of their otherwise absolute rights. Thus,
treaties have been used to record agreements between
States concerning such widely diverse matters as, for
example, the lease of naval bases, the sale or cession of
territory, the termination of war, the regulation of conduct
of hostilities, the formation of alliances, the regulation of
commercial relations, the settling of claims, the laying
down of rules governing conduct in peace and the
establishment of international organizations. 46 The
sovereignty of a state therefore cannot in fact and in reality
be considered absolute. Certain restrictions enter into the
picture: (1) limitations imposed by the very nature of
membership in the family of nations and (2) limitations
imposed by treaty stipulations. As aptly put by John F.
Kennedy, "Today, no nation can build its destiny alone.
The age of self-sufficient nationalism is over. The age of
interdependence is here." 47
UN Charter and Other Treaties
Limit Sovereignty
Thus, when the Philippines joined the United Nations as
one of its 51 charter members, it consented to restrict its
sovereign rights under the "concept of sovereignty as
auto-limitation."47-A Under Article 2 of the UN Charter,
"(a)ll members shall give the United Nations every
assistance in any action it takes in accordance with the
present Charter, and shall refrain from giving assistance to
any state against which the United Nations is taking
preventive or enforcement action." Such assistance
includes payment of its corresponding share not merely in
administrative expenses but also in expenditures for the
peace-keeping operations of the organization. In its
advisory opinion of July 20, 1961, the International Court
of Justice held that money used by the United Nations
Emergency Force in the Middle East and in the Congo
were "expenses of the United Nations" under Article 17,
paragraph 2, of the UN Charter. Hence, all its members
must bear their corresponding share in such expenses. In
this sense, the Philippine Congress is restricted in its
power to appropriate. It is compelled to appropriate funds
whether it agrees with such peace-keeping expenses or
not. So too, under Article 105 of the said Charter, the UN
and its representatives enjoy diplomatic privileges and
immunities, thereby limiting again the exercise of
sovereignty of members within their own territory. Another
example: although "sovereign equality" and "domestic
jurisdiction" of all members are set forth as underlying
principles in the UN Charter, such provisos are however
subject to enforcement measures decided by the Security
Council for the maintenance of international peace and
security under Chapter VII of the Charter. A final example:
under Article 103, "(i)n the event of a conflict between the
obligations of the Members of the United Nations under
the present Charter and their obligations under any other
international agreement, their obligation under the present
charter shall prevail," thus unquestionably denying the
Philippines — as a member — the sovereign power to
make a choice as to which of conflicting obligations, if any,
to honor.
Apart from the UN Treaty, the Philippines has entered into
many other international pacts — both bilateral and
multilateral — that involve limitations on Philippine
sovereignty. These are enumerated by the Solicitor
General in his Compliance dated October 24, 1996, as
follows:
(a) Bilateral convention with the United States regarding
taxes on income, where the Philippines agreed, among
others, to exempt from tax, income received in the
Philippines by, among others, the Federal Reserve Bank
of the United States, the Export/Import Bank of the United
States, the Overseas Private Investment Corporation of
the United States. Likewise, in said convention, wages,
salaries and similar remunerations paid by the United
States to its citizens for labor and personal services
performed by them as employees or officials of the United
States are exempt from income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing, among
others, for the avoidance of double taxation with respect to
taxes on income.
(c) Bilateral convention with the Kingdom of Sweden for
the avoidance of double taxation.
(d) Bilateral convention with the French Republic for the
avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the
Philippines agreed to exempt from all customs duties,
inspection fees and other duties or taxes aircrafts of South
Korea and the regular equipment, spare parts and supplies
arriving with said aircrafts.
(f) Bilateral air service agreement with Japan, where the
Philippines agreed to exempt from customs duties, excise
taxes, inspection fees and other similar duties, taxes or
charges fuel, lubricating oils, spare parts, regular
equipment, stores on board Japanese aircrafts while on
Philippine soil.
(g) Bilateral air service agreement with Belgium where the
Philippines granted Belgian air carriers the same
privileges as those granted to Japanese and Korean air
carriers under separate air service agreements.
(h) Bilateral notes with Israel for the abolition of transit and
visitor visas where the Philippines exempted Israeli
nationals from the requirement of obtaining transit or visitor
visas for a sojourn in the Philippines not exceeding 59
days.
(i) Bilateral agreement with France exempting French
nationals from the requirement of obtaining transit and
visitor visa for a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the
Philippines agreed that premises of Special Missions in the
Philippines are inviolable and its agents can not enter said
premises without consent of the Head of Mission
concerned. Special Missions are also exempted from
customs duties, taxes and related charges.
(k) Multilateral convention on the Law of Treaties. In this
convention, the Philippines agreed to be governed by the
Vienna Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting
compulsory jurisdiction of the International Court of
Justice. The International Court of Justice has jurisdiction
in all legal disputes concerning the interpretation of a
treaty, any question of international law, the existence of
any fact which, if established, would constitute a breach
"of international obligation."
In the foregoing treaties, the Philippines has effectively
agreed to limit the exercise of its sovereign powers of
taxation, eminent domain and police power. The
underlying consideration in this partial surrender of
sovereignty is the reciprocal commitment of the other
contracting states in granting the same privilege and
immunities to the Philippines, its officials and its citizens.
The same reciprocity characterizes the Philippine
commitments under WTO-GATT.
International treaties, whether relating to nuclear
disarmament, human rights, the environment, the law of
the sea, or trade, constrain domestic political sovereignty
through the assumption of external obligations. But unless
anarchy in international relations is preferred as an
alternative, in most cases we accept that the benefits of
the reciprocal obligations involved outweigh the costs
associated with any loss of political sovereignty. (T)rade
treaties that structure relations by reference to durable,
well-defined substantive norms and objective dispute
resolution procedures reduce the risks of larger countries
exploiting raw economic power to bully smaller countries,
by subjecting power relations to some form of legal
ordering. In addition, smaller countries typically stand to
gain disproportionately from trade liberalization. This is
due to the simple fact that liberalization will provide access
to a larger set of potential new trading relationship than in
case of the larger country gaining enhanced success to
the smaller country's market. 48
The point is that, as shown by the foregoing treaties, a
portion of sovereignty may be waived without violating the
Constitution, based on the rationale that the Philippines
"adopts the generally accepted principles of international
law as part of the law of the land and adheres to the policy
of . . . cooperation and amity with all nations."
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General
Provisions and Basic Principles of the Agreement on
Trade-Related Aspects of Intellectual Property Rights
(TRIPS) 49 intrudes on the power of the Supreme Court to
promulgate rules concerning pleading, practice and
procedures. 50
To understand the scope and meaning of Article 34,
TRIPS, 51 it will be fruitful to restate its full text as follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the
infringement of the rights of the owner referred to in
paragraph 1 (b) of Article 28, if the subject matter of a
patent is a process for obtaining a product, the judicial
authorities shall have the authority to order the defendant
to prove that the process to obtain an identical product is
different from the patented process. Therefore, Members
shall provide, in at least one of the following
circumstances, that any identical product when produced
without the consent of the patent owner shall, in the
absence of proof to the contrary, be deemed to have been
obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical
product was made by the process and the owner of the
patent has been unable through reasonable efforts to
determine the process actually used.
2. Any Member shall be free to provide that the burden of
proof indicated in paragraph 1 shall be on the alleged
infringer only if the condition referred to in subparagraph
(a) is fulfilled or only if the condition referred to in
subparagraph (b) is fulfilled.
3. In the adduction of proof to the contrary, the legitimate
interests of defendants in protecting their manufacturing
and business secrets shall be taken into account.
From the above, a WTO Member is required to provide a
rule of disputable (not the words "in the absence of proof
to the contrary") presumption that a product shown to be
identical to one produced with the use of a patented
process shall be deemed to have been obtained by the
(illegal) use of the said patented process, (1) where such
product obtained by the patented product is new, or (2)
where there is "substantial likelihood" that the identical
product was made with the use of the said patented
process but the owner of the patent could not determine
the exact process used in obtaining such identical product.
Hence, the "burden of proof" contemplated by Article 34
should actually be understood as the duty of the alleged
patent infringer to overthrow such presumption. Such
burden, properly understood, actually refers to the "burden
of evidence" (burden of going forward) placed on the
producer of the identical (or fake) product to show that his
product was produced without the use of the patented
process.
The foregoing notwithstanding, the patent owner still has
the "burden of proof" since, regardless of the presumption
provided under paragraph 1 of Article 34, such owner still
has to introduce evidence of the existence of the alleged
identical product, the fact that it is "identical" to the genuine
one produced by the patented process and the fact of
"newness" of the genuine product or the fact of "substantial
likelihood" that the identical product was made by the
patented process.
The foregoing should really present no problem in
changing the rules of evidence as the present law on the
subject, Republic Act No. 165, as amended, otherwise
known as the Patent Law, provides a similar presumption
in cases of infringement of patented design or utility model,
thus:
Sec. 60. Infringement. — Infringement of a design patent
or of a patent for utility model shall consist in unauthorized
copying of the patented design or utility model for the
purpose of trade or industry in the article or product and in
the making, using or selling of the article or product
copying the patented design or utility model. Identity or
substantial identity with the patented design or utility model
shall constitute evidence of copying. (emphasis supplied)
Moreover, it should be noted that the requirement of Article
34 to provide a disputable presumption applies only if (1)
the product obtained by the patented process in NEW or
(2) there is a substantial likelihood that the identical
product was made by the process and the process owner
has not been able through reasonable effort to determine
the process used. Where either of these two provisos does
not obtain, members shall be free to determine the
appropriate method of implementing the provisions of
TRIPS within their own internal systems and processes.
By and large, the arguments adduced in connection with
our disposition of the third issue — derogation of legislative
power — will apply to this fourth issue also. Suffice it to
say that the reciprocity clause more than justifies such
intrusion, if any actually exists. Besides, Article 34 does
not contain an unreasonable burden, consistent as it is
with due process and the concept of adversarial dispute
settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most
international conventions on patents, trademarks and
copyrights, the adjustment in legislation and rules of
procedure will not be substantial. 52
Fifth Issue: Concurrence Only in the WTO Agreement and
Not in Other Documents Contained in the Final Act
Petitioners allege that the Senate concurrence in the WTO
Agreement and its annexes — but not in the other
documents referred to in the Final Act, namely the
Ministerial Declaration and Decisions and the
Understanding on Commitments in Financial Services —
is defective and insufficient and thus constitutes abuse of
discretion. They submit that such concurrence in the WTO
Agreement alone is flawed because it is in effect a
rejection of the Final Act, which in turn was the document
signed by Secretary Navarro, in representation of the
Republic upon authority of the President. They contend
that the second letter of the President to the
Senate 53 which enumerated what constitutes the Final Act
should have been the subject of concurrence of the
Senate.
"A final act, sometimes called protocol de cloture, is an
instrument which records the winding up of the
proceedings of a diplomatic conference and usually
includes a reproduction of the texts of treaties,
conventions, recommendations and other acts agreed
upon and signed by the plenipotentiaries attending the
conference." 54 It is not the treaty itself. It is rather a
summary of the proceedings of a protracted conference
which may have taken place over several years. The text
of the "Final Act Embodying the Results of the Uruguay
Round of Multilateral Trade Negotiations" is contained in
just one page 55 in Vol. I of the 36-volume Uruguay Round
of Multilateral Trade Negotiations. By signing said Final
Act, Secretary Navarro as representative of the Republic
of the Philippines undertook:
(a) to submit, as appropriate, the WTO Agreement for the
consideration of their respective competent authorities
with a view to seeking approval of the Agreement in
accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
The assailed Senate Resolution No. 97 expressed
concurrence in exactly what the Final Act required from its
signatories, namely, concurrence of the Senate in the
WTO Agreement.
The Ministerial Declarations and Decisions were deemed
adopted without need for ratification. They were approved
by the ministers by virtue of Article XXV: 1 of GATT which
provides that representatives of the members can meet "to
give effect to those provisions of this Agreement which
invoke joint action, and generally with a view to facilitating
the operation and furthering the objectives of this
Agreement." 56
The Understanding on Commitments in Financial Services
also approved in Marrakesh does not apply to the
Philippines. It applies only to those 27 Members which
"have indicated in their respective schedules of
commitments on standstill, elimination of monopoly,
expansion of operation of existing financial service
suppliers, temporary entry of personnel, free transfer and
processing of information, and national treatment with
respect to access to payment, clearing systems and
refinancing available in the normal course of business."57
On the other hand, the WTO Agreement itself expresses
what multilateral agreements are deemed included as its
integral parts, 58 as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional frame-
work for the conduct of trade relations among its Members
in matters to the agreements and associated legal
instruments included in the Annexes to this Agreement.
2. The Agreements and associated legal instruments
included in Annexes 1, 2, and 3, (hereinafter referred to as
"Multilateral Agreements") are integral parts of this
Agreement, binding on all Members.
3. The Agreements and associated legal instruments
included in Annex 4 (hereinafter referred to as "Plurilateral
Trade Agreements") are also part of this Agreement for
those Members that have accepted them, and are binding
on those Members. The Plurilateral Trade Agreements do
not create either obligation or rights for Members that have
not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as
specified in annex 1A (hereinafter referred to as "GATT
1994") is legally distinct from the General Agreement on
Tariffs and Trade, dated 30 October 1947, annexed to the
Final Act adopted at the conclusion of the Second Session
of the Preparatory Committee of the United Nations
Conference on Trade and Employment, as subsequently
rectified, amended or modified (hereinafter referred to as
"GATT 1947").
It should be added that the Senate was well-aware of what
it was concurring in as shown by the members' deliberation
on August 25, 1994. After reading the letter of President
Ramos dated August 11, 1994, 59 the senators
of the Republic minutely dissected what the Senate was
concurring in, as follows: 60
THE CHAIRMAN: Yes. Now, the question of the validity of
the submission came up in the first day hearing of this
Committee yesterday. Was the observation made by
Senator Tañada that what was submitted to the Senate
was not the agreement on establishing the World Trade
Organization by the final act of the Uruguay Round which
is not the same as the agreement establishing the World
Trade Organization? And on that basis, Senator Tolentino
raised a point of order which, however, he agreed to
withdraw upon understanding that his suggestion for an
alternative solution at that time was acceptable. That
suggestion was to treat the proceedings of the Committee
as being in the nature of briefings for Senators until the
question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President
submitting a new . . . is he making a new submission which
improves on the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear
cut and there should be no misunderstanding, it was his
intention to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Tañada and later
on Senator Tolentino since they were the ones that raised
this question yesterday?
Senator Tañada, please.
SEN. TAÑADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now
clearly appear that what is being submitted to the Senate
for ratification is not the Final Act of the Uruguay Round,
but rather the Agreement on the World Trade Organization
as well as the Ministerial Declarations and Decisions, and
the Understanding and Commitments in Financial
Services.
I am now satisfied with the wording of the new submission
of President Ramos.
SEN. TAÑADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tañada. Can we
hear from Senator Tolentino? And after him Senator
Neptali Gonzales and Senator Lina.
SEN. TOLENTINO, Mr. Chairman, I have not seen the
new submission actually transmitted to us but I saw the
draft of his earlier, and I think it now complies with the
provisions of the Constitution, and with the Final Act
itself . The Constitution does not require us to ratify the
Final Act. It requires us to ratify the Agreement which is
now being submitted. The Final Act itself specifies what is
going to be submitted to with the governments of the
participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives
agree: (a) to submit as appropriate the WTO Agreement
for the consideration of the respective competent
authorities with a view to seeking approval of the
Agreement in accordance with their procedures.
In other words, it is not the Final Act that was agreed to be
submitted to the governments for ratification or
acceptance as whatever their constitutional procedures
may provide but it is the World Trade Organization
Agreement. And if that is the one that is being submitted
now, I think it satisfies both the Constitution and the Final
Act itself .
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call
on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter
are already a matter of record. And they had been
adequately reflected in the journal of yesterday's session
and I don't see any need for repeating the same.
Now, I would consider the new submission as an act ex
abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator
Lina, do you want to make any comment on this?
SEN. LINA. Mr. President, I agree with the observation
just made by Senator Gonzales out of the abundance of
question. Then the new submission is, I believe, stating
the obvious and therefore I have no further comment to
make.
Epilogue
In praying for the nullification of the Philippine ratification
of the WTO Agreement, petitioners are invoking this
Court's constitutionally imposed duty "to determine
whether or not there has been grave abuse of discretion
amounting to lack or excess of jurisdiction" on the part of
the Senate in giving its concurrence therein via Senate
Resolution No. 97. Procedurally, a writ
of certiorari grounded on grave abuse of discretion may be
issued by the Court under Rule 65 of the Rules of Court
when it is amply shown that petitioners have no other plain,
speedy and adequate remedy in the ordinary course of
law.
By grave abuse of discretion is meant such capricious and
whimsical exercise of judgment as is equivalent to lack of
jurisdiction. 61 Mere abuse of discretion is not enough. It
must be grave abuse of discretion as when the power is
exercised in an arbitrary or despotic manner by reason of
passion or personal hostility, and must be so patent and
so gross as to amount to an evasion of a positive duty or
to a virtual refusal to perform the duty enjoined or to act at
all in contemplation of law. 62 Failure on the part of the
petitioner to show grave abuse of discretion will result in
the dismissal of the petition. 63
In rendering this Decision, this Court never forgets that the
Senate, whose act is under review, is one of two sovereign
houses of Congress and is thus entitled to great respect in
its actions. It is itself a constitutional body independent and
coordinate, and thus its actions are presumed regular and
done in good faith. Unless convincing proof and
persuasive arguments are presented to overthrow such
presumptions, this Court will resolve every doubt in its
favor. Using the foregoing well-accepted definition of
grave abuse of discretion and the presumption of regularity
in the Senate's processes, this Court cannot find any
cogent reason to impute grave abuse of discretion to the
Senate's exercise of its power of concurrence in the WTO
Agreement granted it by Sec. 21 of Article VII of the petitioners that it is more advantageous to the national
Constitution. 64 interest to strike down Senate Resolution No. 97. But that
is not a legal reason to attribute grave abuse of discretion
It is true, as alleged by petitioners, that broad constitutional
to the Senate and to nullify its decision. To do so would
principles require the State to develop an independent
constitute grave abuse in the exercise of our own judicial
national economy effectively controlled by Filipinos; and to
power and duty. Ineludably, what the Senate did was a
protect and/or prefer Filipino labor, products, domestic
valid exercise of its authority. As to whether such exercise
materials and locally produced goods. But it is equally true
was wise, beneficial or viable is outside the realm of
that such principles — while serving as judicial and
judicial inquiry and review. That is a matter between the
legislative guides — are not in themselves sources of
elected policy makers and the people. As to whether the
causes of action. Moreover, there are other equally
nation should join the worldwide march toward trade
fundamental constitutional principles relied upon by the
liberalization and economic globalization is a matter that
Senate which mandate the pursuit of a "trade policy that
our people should determine in electing their policy
serves the general welfare and utilizes all forms and
makers. After all, the WTO Agreement allows withdrawal
arrangements of exchange on the basis of equality and
of membership, should this be the political desire of a
reciprocity" and the promotion of industries "which are
member.
competitive in both domestic and foreign markets," thereby
justifying its acceptance of said treaty. So too, the alleged The eminent futurist John Naisbitt, author of the best
impairment of sovereignty in the exercise of legislative and seller Megatrends, predicts an Asian
judicial powers is balanced by the adoption of the generally Renaissance 65 where "the East will become the dominant
accepted principles of international law as part of the law region of the world economically, politically and culturally
of the land and the adherence of the Constitution to the in the next century." He refers to the "free market"
policy of cooperation and amity with all nations. espoused by WTO as the "catalyst" in this coming Asian
ascendancy. There are at present about 31 countries
That the Senate, after deliberation and voting, voluntarily
including China, Russia and Saudi Arabia negotiating for
and overwhelmingly gave its consent to the WTO
membership in the WTO. Notwithstanding objections
Agreement thereby making it "a part of the law of the land"
against possible limitations on national sovereignty, the
is a legitimate exercise of its sovereign duty and power.
WTO remains as the only viable structure for multilateral
We find no "patent and gross" arbitrariness or despotism
trading and the veritable forum for the development of
"by reason of passion or personal hostility" in such
international trade law. The alternative to WTO is isolation,
exercise. It is not impossible to surmise that this Court, or
stagnation, if not economic self-destruction. Duly enriched
at least some of its members, may even agree with
with original membership, keenly aware of the advantages
and disadvantages of globalization with its on-line
experience, and endowed with a vision of the future, the
Philippines now straddles the crossroads of an
international strategy for economic prosperity and stability
in the new millennium. Let the people, through their duly
authorized elected officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of
merit.
SO ORDERED