G.R. No. 191618 November 23, 2010 ATTY. ROMULO B. MACALINTAL, Petitioner, vs. PRESIDENTIAL ELECTORAL TRIBUNAL, Respondent.

DECISION NACHURA, J.: Confronting us is an undesignated petition1 filed by Atty. Romulo B. Macalintal (Atty. Macalintal), that questions the constitution of the Presidential Electoral Tribunal (PET) as an illegal and unauthorized progeny of Section 4,2 Article VII of the Constitution: The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns, and qualifications of the President or Vice-President, and may promulgate its rules for the purpose. While petitioner concedes that the Supreme Court is "authorized to promulgate its rules for the purpose," he chafes at the creation of a purportedly "separate tribunal" complemented by a budget allocation, a seal, a set of personnel and confidential employees, to effect the constitutional mandate. Petitioners averment is supposedly supported by the provisions of the 2005 Rules of the Presidential Electoral Tribunal (2005 PET Rules),3 specifically: (1) Rule 3 which provides for membership of the PET wherein the Chief Justice and the Associate Justices are designated as "Chairman and Members," respectively; (2) Rule 8(e) which authorizes the Chairman of the PET to appoint employees and confidential employees of every member thereof; (3) Rule 9 which provides for a separate "Administrative Staff of the Tribunal" with the appointment of a Clerk and a Deputy Clerk of the Tribunal who, at the discretion of the PET, may designate the Clerk of Court (en banc) as the Clerk of the Tribunal; and (4) Rule 11 which provides for a "seal" separate and distinct from the Supreme Court seal. Grudgingly, petitioner throws us a bone by acknowledging that the invoked constitutional provision does allow the "appointment of additional personnel." Further, petitioner highlights our decision in Buac v. COMELEC4 which peripherally declared that "contests involving the President and the Vice-President fall within the exclusive original jurisdiction of the PET, x x x in the exercise of quasi-judicial power." On this point, petitioner reiterates that the constitution of the PET, with the designation of the Members of the Court as Chairman and Members thereof, contravenes Section 12, Article VIII of the Constitution, which prohibits the designation of Members of the Supreme Court and of other courts established by law to any agency performing quasi-judicial or administrative functions.

The Office of the Solicitor General (OSG), as directed in our Resolution dated April 6, 2010, filed a Comment5 thereon. At the outset, the OSG points out that the petition filed by Atty. Macalintal is unspecified and without statutory basis; "the liberal approach in its preparation x x x is a violation of the well known rules of practice and pleading in this jurisdiction." In all, the OSG crystallizes the following issues for resolution of the Court: I WHETHER x x x PETITIONER HAS LOCUS STANDI TO FILE THE INSTANT PETITION. II WHETHER x x x THE CREATION OF THE PRESIDENTIAL ELECTORAL TRIBUNAL IS UNCONSTITUTIONAL FOR BEING A VIOLATION OF PARAGRAPH 7, SECTION 4 OF ARTICLE VII OF THE 1987 CONSTITUTION. III WHETHER x x x THE DESIGNATION OF MEMBERS OF THE SUPREME COURT AS MEMBERS OF THE PRESIDENTIAL ELECTORAL TRIBUNAL IS UNCONSTITUTIONAL FOR BEING A VIOLATION OF SECTION 12, ARTICLE VIII OF THE 1987 CONSTITUTION.6 In his Reply,7 petitioner maintains that: 1. He has legal standing to file the petition given his averment of transcendental importance of the issues raised therein; 2. The creation of the PET, a separate tribunal from the Supreme Court, violates Section 4, Article VII of the Constitution; and 3. The PET, being a separate tribunal, exercises quasi-judicial functions contrary to Section 12, Article VIII of the Constitution. We winnow the meanderings of petitioner into the singular issue of whether the constitution of the PET, composed of the Members of this Court, is unconstitutional, and violates Section 4, Article VII and Section 12, Article VIII of the Constitution. But first, we dispose of the procedural issue of whether petitioner has standing to file the present petition. The issue of locus standi is derived from the following requisites of a judicial inquiry: 1. There must be an actual case or controversy; 2. The question of constitutionality must be raised by the proper party; 3. The constitutional question must be raised at the earliest possible opportunity; and

4. The decision of the constitutional question must be necessary to the determination of the case itself.8 On more than one occasion we have characterized a proper party as one who has sustained or is in immediate danger of sustaining an injury as a result of the act complained of.9 The dust has long settled on the test laid down in Baker v. Carr:10 "whether the party has alleged such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult questions."11 Until and unless such actual or threatened injury is established, the complainant is not clothed with legal personality to raise the constitutional question. Our pronouncements in David v. Macapagal-Arroyo12 illuminate: The difficulty of determining locus standi arises in public suits. Here, the plaintiff who asserts a "public right" in assailing an allegedly illegal official action, does so as a representative of the general public. He may be a person who is affected no differently from any other person. He could be suing as a "stranger," or in the category of a "citizen," or "taxpayer." In either case, he has to adequately show that he is entitled to seek judicial protection. In other words, he has to make out a sufficient interest in the vindication of the public order and the securing of relief as a" citizen" or "taxpayer." xxxx However, to prevent just about any person from seeking judicial interference in any official policy or act with which he disagreed with, and thus hinders the activities of governmental agencies engaged in public service, the United States Supreme Court laid down the more stringent "direct injury" test in Ex Parte Levitt, later reaffirmed in Tileston v. Ullman. The same Court ruled that for a private individual to invoke the judicial power to determine the validity of an executive or legislative action, he must show that he has sustained a direct injury as a result of that action, and it is not sufficient that he has a general interest common to all members of the public. This Court adopted the "direct injury" test in our jurisdiction. In People v. Vera, it held that the person who impugns the validity of a statute must have "a personal and substantial interest in the case such that he has sustained, or will sustain direct injury as a result." The Vera doctrine was upheld in a litany of cases, such as, Custodio v. President of the Senate, Manila Race Horse Trainers Association v. De la Fuente, Pascual v. Secretary of Public Works and AntiChinese League of the Philippines v. Felix. However, being a mere procedural technicality, the requirement of locus standi may be waived by the Court in the exercise of its discretion. This was done in the 1949 Emergency Powers Cases, Araneta v. Dinglasan, where the "transcendental importance" of the cases prompted the Court to act liberally. Such liberality was neither a rarity nor accidental. In Aquino v. Comelec, this Court resolved to pass upon the issues raised due to the "far-reaching implications" of the petition notwithstanding its categorical statement that petitioner therein had no personality to file the suit. Indeed, there is a chain of cases where this liberal policy has been observed, allowing ordinary citizens, members of Congress, and civic organizations to prosecute actions involving the constitutionality or validity of laws, regulations and rulings. xxxx

By way of summary, the following rules may be culled from the cases decided by this Court. Taxpayers, voters, concerned citizens, and legislators may be accorded standing to sue, provided that the following requirements are met: (1) cases involve constitutional issues; (2) for taxpayers, there must be a claim of illegal disbursement of public funds or that the tax measure is unconstitutional; (3) for voters, there must be a showing of obvious interest in the validity of the election law in question; (4) for concerned citizens, there must be a showing that the issues raised are of transcendental importance which must be settled early; and (5) for legislators, there must be a claim that the official action complained of infringes upon their prerogatives as legislators. Contrary to the well-settled actual and direct injury test, petitioner has simply alleged a generalized interest in the outcome of this case, and succeeds only in muddling the issues. Paragraph 2 of the petition reads: 2. x x x Since the creation and continued operation of the PET involves the use of public funds and the issue raised herein is of transcendental importance, it is petitioners humble submission that, as a citizen, a taxpayer and a member of the BAR, he has the legal standing to file this petition. But even if his submission is valid, petitioners standing is still imperiled by the white elephant in the petition, i.e., his appearance as counsel for former President Gloria Macapagal-Arroyo (Macapagal-Arroyo) in the election protest filed by 2004 presidential candidate Fernando Poe, Jr. before the Presidential Electoral Tribunal,13 because judicial inquiry, as mentioned above, requires that the constitutional question be raised at the earliest possible opportunity. 14 Such appearance as counsel before the Tribunal, to our mind, would have been the first opportunity to challenge the constitutionality of the Tribunals constitution. Although there are recognized exceptions to this requisite, we find none in this instance. Petitioner is unmistakably estopped from assailing the jurisdiction of the PET before which tribunal he had ubiquitously appeared and had acknowledged its jurisdiction in 2004. His failure to raise a seasonable constitutional challenge at that time, coupled with his unconditional acceptance of the Tribunals authority over the case he was defending, translates to the clear absence of an indispensable requisite for the proper invocation of this Courts power of judicial review. Even on this score alone, the petition ought to be dismissed outright. Prior to petitioners appearance as counsel for then protestee Macapagal-Arroyo, we had occasion to affirm the grant of original jurisdiction to this Court as a Presidential Electoral Tribunal in the auspicious case of Tecson v. Commission on Elections.15 Thus Petitioners Tecson, et al., in G.R. No. 161434, and Velez, in G.R. No. 161634, invoke the provisions of Article VII, Section 4, paragraph 7, of the 1987 Constitution in assailing the jurisdiction of the COMELEC when it took cognizance of SPA No. 04-003 and in urging the

Supreme Court to instead take on the petitions they directly instituted before it. The Constitutional provision cited reads: "The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns, and qualifications of the President or Vice-President, and may promulgate its rules for the purpose." The provision is an innovation of the 1987 Constitution. The omission in the 1935 and the 1973 Constitution to designate any tribunal to be the sole judge of presidential and vice-presidential contests, has constrained this Court to declare, in Lopez vs. Roxas, as "not (being) justiciable" controversies or disputes involving contests on the elections, returns and qualifications of the President or Vice-President. The constitutional lapse prompted Congress, on 21 June 1957, to enact Republic Act No. 1793, "An Act Constituting an Independent Presidential Electoral Tribunal to Try, Hear and Decide Protests Contesting the Election of the President-Elect and the Vice-President-Elect of the Philippines and Providing for the Manner of Hearing the Same." Republic Act 1793 designated the Chief Justice and the Associate Justices of the Supreme Court to be the members of the tribunal. Although the subsequent adoption of the parliamentary form of government under the 1973 Constitution might have implicitly affected Republic Act No. 1793, the statutory set-up, nonetheless, would now be deemed revived under the present Section 4, paragraph 7, of the 1987 Constitution. Former Chief Justice Reynato S. Puno, in his separate opinion, was even more categorical: The Court is unanimous on the issue of jurisdiction. It has no jurisdiction on the Tecson and Valdez petitions. Petitioners cannot invoke Article VII, Section 4, par. 7 of the Constitution which provides: "The Supreme Court, sitting en banc shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice President and may promulgate its rules for the purpose." The word "contest" in the provision means that the jurisdiction of this Court can only be invoked after the election and proclamation of a President or Vice President. There can be no "contest" before a winner is proclaimed.16 Similarly, in her separate opinion, Justice Alicia Austria-Martinez declared: G.R. Nos. 161434 and 161634 invoke the Courts exclusive jurisdiction under the last paragraph of Section 4, Article VII of the 1987 Constitution. I agree with the majority opinion that these petitions should be dismissed outright for prematurity. The Court has no jurisdiction at this point of time to entertain said petitions. The Supreme Court, as a Presidential Electoral Tribunal (PET), the Senate Electoral Tribunal (SET) and House of Representatives Electoral Tribunal (HRET) are electoral tribunals, each specifically and exclusively clothed with jurisdiction by the Constitution to act respectively as "sole judge of all contests relating to the election, returns, and qualifications" of the President and Vice-President, Senators, and Representatives. In a litany of cases, this Court has long recognized that these electoral tribunals exercise jurisdiction over election contests only after a candidate has already been proclaimed winner in an election. Rules 14 and 15 of the Rules of

the Presidential Electoral Tribunal provide that, for President or Vice-President, election protest or quo warranto may be filed after the proclamation of the winner.17 Petitioner, a prominent election lawyer who has filed several cases before this Court involving constitutional and election law issues, including, among others, the constitutionality of certain provisions of Republic Act (R.A.) No. 9189 (The Overseas Absentee Voting Act of 2003),18 cannot claim ignorance of: (1) the invocation of our jurisdiction under Section 4, Article VII of the Constitution; and (2) the unanimous holding thereon. Unquestionably, the overarching framework affirmed in Tecson v. Commission on Elections19 is that the Supreme Court has original jurisdiction to decide presidential and vice-presidential election protests while concurrently acting as an independent Electoral Tribunal. Despite the foregoing, petitioner is adamant on his contention that the provision, as worded, does not authorize the constitution of the PET. And although he concedes that the Supreme Court may promulgate its rules for this purpose, petitioner is insistent that the constitution of the PET is unconstitutional. However, petitioner avers that it allows the Court to appoint additional personnel for the purpose, notwithstanding the silence of the constitutional provision. Petitioners pastiche arguments are all hurled at the Court, hopeful that at least one might possibly stick. But these arguments fail to elucidate on the scope of the rules the Supreme Court is allowed to promulgate. Apparently, petitioners concept of this adjunct of judicial power is very restrictive. Fortunately, thanks in no part to petitioners opinion, we are guided by wellsettled principles of constitutional construction. Verba legis dictates that wherever possible, the words used in the Constitution must be given their ordinary meaning except where technical terms are employed, in which case the significance thus attached to them prevails. This Court, speaking through former Chief Justice Enrique Fernando, in J.M. Tuason & Co., Inc. v. Land Tenure Administration20 instructs: As the Constitution is not primarily a lawyers document, it being essential for the rule of law to obtain that it should ever be present in the peoples consciousness, its language as much as possible should be understood in the sense they have in common use. What it says according to the text of the provision to be construed compels acceptance and negates the power of the courts to alter it, based on the postulate that the framers and the people mean what they say. Thus these are cases where the need for construction is reduced to a minimum. However, where there is ambiguity or doubt, the words of the Constitution should be interpreted in accordance with the intent of its framers or ratio legis et anima. A doubtful provision must be examined in light of the history of the times, and the condition and circumstances surrounding the framing of the Constitution.21 In following this guideline, courts should bear in mind the object sought to be accomplished in adopting a doubtful constitutional provision, and the evils sought to be prevented or remedied.22 Consequently, the intent of the framers and the people ratifying the constitution, and not the panderings of self-indulgent men, should be given effect. Last, ut magis valeat quam pereat the Constitution is to be interpreted as a whole. We intoned thus in the landmark case of Civil Liberties Union v. Executive Secretary:23 It is a well-established rule in constitutional construction that no one provision of the Constitution is to be separated from all the others, to be considered alone, but that all the provisions bearing upon a particular subject are to be brought into view and to be so interpreted as to effectuate

the great purposes of the instrument. Sections bearing on a particular subject should be considered and interpreted together as to effectuate the whole purpose of the Constitution and one section is not to be allowed to defeat another, if by any reasonable construction, the two can be made to stand together. In other words, the court must harmonize them, if practicable, and must lean in favor of a construction which will render every word operative, rather than one which may make the words idle and nugatory. We had earlier expounded on this rule of construction in Chiongbian v. De Leon, et al.,
24

to wit:

[T]he members of the Constitutional Convention could not have dedicated a provision of our Constitution merely for the benefit of one person without considering that it could also affect others. When they adopted subsection 2, they permitted, if not willed, that said provision should function to the full extent of its substance and its terms, not by itself alone, but in conjunction with all other provisions of that great document. On its face, the contentious constitutional provision does not specify the establishment of the PET. But neither does it preclude, much less prohibit, otherwise. It entertains divergent interpretations which, though unacceptable to petitioner, do not include his restrictive view one which really does not offer a solution. Section 4, Article VII of the Constitution, the provision under scrutiny, should be read with other related provisions of the Constitution such as the parallel provisions on the Electoral Tribunals of the Senate and the House of Representatives. Before we resort to the records of the Constitutional Commission, we discuss the framework of judicial power mapped out in the Constitution. Contrary to petitioners assertion, the Supreme Courts constitutional mandate to act as sole judge of election contests involving our countrys highest public officials, and its rule-making authority in connection therewith, is not restricted; it includes all necessary powers implicit in the exercise thereof. We recall the unprecedented and trailblazing case of Marcos v. Manglapus:25 The 1987 Constitution has fully restored the separation of powers of the three great branches of government. To recall the words of Justice Laurel in Angara v. Electoral Commission, "the Constitution has blocked but with deft strokes and in bold lines, allotment of power to the executive, the legislative and the judicial departments of the government." Thus, the 1987 Constitution explicitly provides that "[t]he legislative power shall be vested in the Congress of the Philippines" [Art. VI, Sec. 1], "[t]he executive power shall be vested in the President of the Philippines" [Art. VII, Sec. 1], and "[t]he judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law" [Art. VIII, Sec. 1]. These provisions not only establish a separation of powers by actual division but also confer plenary legislative, executive and judicial powers subject only to limitations provided in the Constitution. For as the Supreme Court in Ocampo v. Cabangis pointed out "a grant of the legislative power means a grant of all legislative power; and a grant of the judicial power means a grant of all the judicial power which may be exercised under the government." The Court could not have been more explicit then on the plenary grant and exercise of judicial power. Plainly, the abstraction of the Supreme Court acting as a Presidential Electoral Tribunal

from the unequivocal grant of jurisdiction in the last paragraph of Section 4, Article VII of the Constitution is sound and tenable. The mirabile dictu of the grant of jurisdiction to this Court, albeit found in the Article on the executive branch of government, and the constitution of the PET, is evident in the discussions of the Constitutional Commission. On the exercise of this Courts judicial power as sole judge of presidential and vice-presidential election contests, and to promulgate its rules for this purpose, we find the proceedings in the Constitutional Commission most instructive: MR. DAVIDE. On line 25, after the words "Vice-President," I propose to add AND MAY PROMULGATE ITS RULES FOR THE PURPOSE. This refers to the Supreme Court sitting en banc. This is also to confer on the Supreme Court exclusive authority to enact the necessary rules while acting as sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President. MR. REGALADO. My personal position is that the rule-making power of the Supreme Court with respect to its internal procedure is already implicit under the Article on the Judiciary; considering, however, that according to the Commissioner, the purpose of this is to indicate the sole power of the Supreme Court without intervention by the legislature in the promulgation of its rules on this particular point, I think I will personally recommend its acceptance to the Committee.26 xxxx MR. NOLLEDO. x x x. With respect to Sections 10 and 11 on page 8, I understand that the Committee has also created an Electoral Tribunal in the Senate and a Commission on Appointments which may cover membership from both Houses. But my question is: It seems to me that the committee report does not indicate which body should promulgate the rules that shall govern the Electoral Tribunal and the Commission on Appointments. Who shall then promulgate the rules of these bodies? MR. DAVIDE. The Electoral Tribunal itself will establish and promulgate its rules because it is a body distinct and independent already from the House, and so with the Commission on Appointments also. It will have the authority to promulgate its own rules.27 On another point of discussion relative to the grant of judicial power, but equally cogent, we listen to former Chief Justice Roberto Concepcion: MR. SUAREZ. Thank you. Would the Commissioner not consider that violative of the doctrine of separation of powers? MR. CONCEPCION. I think Commissioner Bernas explained that this is a contest between two parties. This is a judicial power. MR. SUAREZ. We know, but practically the Committee is giving to the judiciary the right to declare who will be the President of our country, which to me is a political action.

MR. CONCEPCION. There are legal rights which are enforceable under the law, and these are essentially justiciable questions. MR. SUAREZ. If the election contest proved to be long, burdensome and tedious, practically all the time of the Supreme Court sitting en banc would be occupied with it considering that they will be going over millions and millions of ballots or election returns, Madam President. 28 Echoing the same sentiment and affirming the grant of judicial power to the Supreme Court, Justice Florenz D. Regalado29 and Fr. Joaquin Bernas30 both opined: MR. VILLACORTA. Thank you very much, Madam President. I am not sure whether Commissioner Suarez has expressed his point. On page 2, the fourth paragraph of Section 4 provides: The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President. May I seek clarification as to whether or not the matter of determining the outcome of the contests relating to the election returns and qualifications of the President or Vice-President is purely a political matter and, therefore, should not be left entirely to the judiciary. Will the abovequoted provision not impinge on the doctrine of separation of powers between the executive and the judicial departments of the government? MR. REGALADO. No, I really do not feel that would be a problem. This is a new provision incidentally. It was not in the 1935 Constitution nor in the 1973 Constitution. MR. VILLACORTA. That is right. MR. REGALADO. We feel that it will not be an intrusion into the separation of powers guaranteed to the judiciary because this is strictly an adversarial and judicial proceeding. MR. VILLACORTA. May I know the rationale of the Committee because this supersedes Republic Act 7950 which provides for the Presidential Electoral Tribunal? FR. BERNAS. Precisely, this is necessary. Election contests are, by their nature, judicial. Therefore, they are cognizable only by courts. If, for instance, we did not have a constitutional provision on an electoral tribunal for the Senate or an electoral tribunal for the House, normally, as composed, that cannot be given jurisdiction over contests. So, the background of this is really the case of Roxas v. Lopez. The Gentleman will remember that in that election, Lopez was declared winner. He filed a protest before the Supreme Court because there was a republic act which created the Supreme Court as the Presidential Electoral Tribunal. The question in this case was whether new powers could be given the Supreme Court by law. In effect, the conflict was actually whether there was an attempt to create two Supreme Courts and the answer of the Supreme Court was: "No, this did not involve the creation of two Supreme Courts, but precisely we are giving new jurisdiction to the Supreme Court, as it is allowed by the Constitution. Congress may allocate various jurisdictions."

Before the passage of that republic act, in case there was any contest between two presidential candidates or two vice-presidential candidates, no one had jurisdiction over it. So, it became necessary to create a Presidential Electoral Tribunal. What we have done is to constitutionalize what was statutory but it is not an infringement on the separation of powers because the power being given to the Supreme Court is a judicial power.31 Unmistakable from the foregoing is that the exercise of our power to judge presidential and vicepresidential election contests, as well as the rule-making power adjunct thereto, is plenary; it is not as restrictive as petitioner would interpret it. In fact, former Chief Justice Hilario G. Davide, Jr., who proposed the insertion of the phrase, intended the Supreme Court to exercise exclusive authority to promulgate its rules of procedure for that purpose. To this, Justice Regalado forthwith assented and then emphasized that the sole power ought to be without intervention by the legislative department. Evidently, even the legislature cannot limit the judicial power to resolve presidential and vice-presidential election contests and our rule-making power connected thereto. To foreclose all arguments of petitioner, we reiterate that the establishment of the PET simply constitutionalized what was statutory before the 1987 Constitution. The experiential context of the PET in our country cannot be denied.32 Consequently, we find it imperative to trace the historical antecedents of the PET. Article VII, Section 4, paragraph 7 of the 1987 Constitution is an innovation. The precursors of the present Constitution did not contain similar provisions and instead vested upon the legislature all phases of presidential and vice-presidential elections from the canvassing of election returns, to the proclamation of the president-elect and the vice-president elect, and even the determination, by ordinary legislation, of whether such proclamations may be contested. Unless the legislature enacted a law creating an institution that would hear election contests in the Presidential and Vice-Presidential race, a defeated candidate had no legal right to demand a recount of the votes cast for the office involved or to challenge the ineligibility of the proclaimed candidate. Effectively, presidential and vice-presidential contests were nonjusticiable in the then prevailing milieu. The omission in the 1935 Constitution was intentional. It was mainly influenced by the absence of a similar provision in its pattern, the Federal Constitution of the United States. Rather, the creation of such tribunal was left to the determination of the National Assembly. The journal of the 1935 Constitutional Convention is crystal clear on this point: Delegate Saguin. For an information. It seems that this Constitution does not contain any provision with respect to the entity or body which will look into the protests for the positions of the President and Vice-President. President Recto. Neither does the American constitution contain a provision over the subject. Delegate Saguin. But then, who will decide these protests? President Recto. I suppose that the National Assembly will decide on that.33 To fill the void in the 1935 Constitution, the National Assembly enacted R.A. No. 1793, establishing an independent PET to try, hear, and decide protests contesting the election of

President and Vice-President. The Chief Justice and the Associate Justices of the Supreme Court were tasked to sit as its Chairman and Members, respectively. Its composition was extended to retired Supreme Court Justices and incumbent Court of Appeals Justices who may be appointed as substitutes for ill, absent, or temporarily incapacitated regular members. The eleven-member tribunal was empowered to promulgate rules for the conduct of its proceedings. It was mandated to sit en banc in deciding presidential and vice-presidential contests and authorized to exercise powers similar to those conferred upon courts of justice, including the issuance of subpoena, taking of depositions, arrest of witnesses to compel their appearance, production of documents and other evidence, and the power to punish contemptuous acts and bearings. The tribunal was assigned a Clerk, subordinate officers, and employees necessary for the efficient performance of its functions. R.A. No. 1793 was implicitly repealed and superseded by the 1973 Constitution which replaced the bicameral legislature under the 1935 Constitution with the unicameral body of a parliamentary government. With the 1973 Constitution, a PET was rendered irrelevant, considering that the President was not directly chosen by the people but elected from among the members of the National Assembly, while the position of Vice-President was constitutionally non-existent. In 1981, several modifications were introduced to the parliamentary system. Executive power was restored to the President who was elected directly by the people. An Executive Committee was formed to assist the President in the performance of his functions and duties. Eventually, the Executive Committee was abolished and the Office of Vice-President was installed anew. These changes prompted the National Assembly to revive the PET by enacting, on December 3, 1985, Batas Pambansa Bilang (B.P. Blg.) 884, entitled "An Act Constituting an Independent Presidential Electoral Tribunal to Try, Hear and Decide Election Contests in the Office of the President and Vice-President of the Philippines, Appropriating Funds Therefor and For Other Purposes." This tribunal was composed of nine members, three of whom were the Chief Justice of the Supreme Court and two Associate Justices designated by him, while the six were divided equally between representatives of the majority and minority parties in the Batasang Pambansa. Aside from the license to wield powers akin to those of a court of justice, the PET was permitted to recommend the prosecution of persons, whether public officers or private individuals, who in its opinion had participated in any irregularity connected with the canvassing and/or accomplishing of election returns. The independence of the tribunal was highlighted by a provision allocating a specific budget from the national treasury or Special Activities Fund for its operational expenses. It was empowered to appoint its own clerk in accordance with its rules. However, the subordinate officers were strictly employees of the judiciary or other officers of the government who were merely designated to the tribunal. After the historic People Power Revolution that ended the martial law era and installed Corazon Aquino as President, civil liberties were restored and a new constitution was formed. With R.A. No. 1793 as framework, the 1986 Constitutional Commission transformed the then statutory PET into a constitutional institution, albeit without its traditional nomenclature:

FR. BERNAS. x x x. x x x. So it became necessary to create a Presidential Electoral Tribunal. What we have done is to constitutionalize what was statutory but it is not an infringement on the separation of powers because the power being given to the Supreme Court is a judicial power.34 Clearly, petitioners bete noire of the PET and the exercise of its power are unwarranted. His arguments that: (1) the Chief Justice and Associate Justices are referred to as "Chairman" and "Members," respectively; (2) the PET uses a different seal; (3) the Chairman is authorized to appoint personnel; and (4) additional compensation is allocated to the "Members," in order to bolster his claim of infirmity in the establishment of the PET, are too superficial to merit further attention by the Court. Be that as it may, we hasten to clarify the structure of the PET as a legitimate progeny of Section 4, Article VII of the Constitution, composed of members of the Supreme Court, sitting en banc. The following exchange in the 1986 Constitutional Commission should provide enlightenment: MR. SUAREZ. Thank you. Let me proceed to line 23, page 2, wherein it is provided, and I quote: The Supreme Court, sitting en banc[,] shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President. Are we not giving enormous work to the Supreme Court especially when it is directed to sit en banc as the sole judge of all presidential and vice-presidential election contests? MR. SUMULONG. That question will be referred to Commissioner Concepcion. MR. CONCEPCION. This function was discharged by the Supreme Court twice and the Supreme Court was able to dispose of each case in a period of one year as provided by law. Of course, that was probably during the late 1960s and early 1970s. I do not know how the present Supreme Court would react to such circumstances, but there is also the question of who else would hear the election protests. MR. SUAREZ. We are asking this question because between lines 23 to 25, there are no rules provided for the hearings and there is not time limit or duration for the election contest to be decided by the Supreme Court. Also, we will have to consider the historical background that when R.A. 1793, which organized the Presidential Electoral Tribunal, was promulgated on June 21, 1957, at least three famous election contests were presented and two of them ended up in withdrawal by the protestants out of sheer frustration because of the delay in the resolution of the cases. I am referring to the electoral protest that was lodged by former President Carlos P. Garcia against our "kabalen" former President Diosdado Macapagal in 1961 and the vicepresidential election contest filed by the late Senator Gerardo Roxas against Vice-President Fernando Lopez in 1965. MR. CONCEPCION. I cannot answer for what the protestants had in mind. But when that protest of Senator Roxas was withdrawn, the results were already available. Senator Roxas did not want to have a decision adverse to him. The votes were being counted already, and he did

not get what he expected so rather than have a decision adverse to his protest, he withdrew the case. xxxx MR. SUAREZ. I see. So the Commission would not have any objection to vesting in the Supreme Court this matter of resolving presidential and vice-presidential contests? MR. CONCEPCION. Personally, I would not have any objection. MR. SUAREZ. Thank you. Would the Commissioner not consider that violative of the doctrine of separation of powers? MR. CONCEPCION. I think Commissioner Bernas explained that this is a contest between two parties. This is a judicial power. MR. SUAREZ. We know, but practically the Committee is giving to the judiciary the right to declare who will be the President of our country, which to me is a political action. MR. CONCEPCION. There are legal rights which are enforceable under the law, and these are essentially justiciable questions. MR. SUAREZ. If the election contest proved to be long, burdensome and tedious, practically all the time of the Supreme Court sitting en banc would be occupied with it considering that they will be going over millions and millions of ballots or election returns, Madam President. MR. CONCEPCION. The time consumed or to be consumed in this contest for President is dependent upon they key number of teams of revisors. I have no experience insofar as contests in other offices are concerned. MR. SUAREZ. Although there is a requirement here that the Supreme Court is mandated to sit en banc? MR. CONCEPCION. Yes. MR. SUAREZ. I see. MR. CONCEPCION. The steps involved in this contest are: First, the ballot boxes are opened before teams of three, generally, a representative each of the court, of the protestant and of the "protestee." It is all a questions of how many teams are organized. Of course, that can be expensive, but it would be expensive whatever court one would choose. There were times that the Supreme Court, with sometimes 50 teams at the same time working, would classify the objections, the kind of problems, and the court would only go over the objected votes on which the parties could not agree. So it is not as awesome as it would appear insofar as the Court is concerned. What is awesome is the cost of the revision of the ballots because each party would have to appoint one representative for every team, and that may take quite a big amount.

MR. SUAREZ. If we draw from the Commissioners experience which he is sharing with us, what would be the reasonable period for the election contest to be decided? MR. CONCEPCION. Insofar as the Supreme Court is concerned, the Supreme Court always manages to dispose of the case in one year. MR. SUAREZ. In one year. Thank you for the clarification.35 Obvious from the foregoing is the intent to bestow independence to the Supreme Court as the PET, to undertake the Herculean task of deciding election protests involving presidential and vice-presidential candidates in accordance with the process outlined by former Chief Justice Roberto Concepcion. It was made in response to the concern aired by delegate Jose E. Suarez that the additional duty may prove too burdensome for the Supreme Court. This explicit grant of independence and of the plenary powers needed to discharge this burden justifies the budget allocation of the PET. The conferment of additional jurisdiction to the Supreme Court, with the duty characterized as an "awesome" task, includes the means necessary to carry it into effect under the doctrine of necessary implication.36 We cannot overemphasize that the abstraction of the PET from the explicit grant of power to the Supreme Court, given our abundant experience, is not unwarranted. A plain reading of Article VII, Section 4, paragraph 7, readily reveals a grant of authority to the Supreme Court sitting en banc. In the same vein, although the method by which the Supreme Court exercises this authority is not specified in the provision, the grant of power does not contain any limitation on the Supreme Courts exercise thereof. The Supreme Courts method of deciding presidential and vice-presidential election contests, through the PET, is actually a derivative of the exercise of the prerogative conferred by the aforequoted constitutional provision. Thus, the subsequent directive in the provision for the Supreme Court to "promulgate its rules for the purpose." The conferment of full authority to the Supreme Court, as a PET, is equivalent to the full authority conferred upon the electoral tribunals of the Senate and the House of Representatives, i.e., the Senate Electoral Tribunal (SET) and the House of Representatives Electoral Tribunal (HRET),37 which we have affirmed on numerous occasions.38 Particularly cogent are the discussions of the Constitutional Commission on the parallel provisions of the SET and the HRET. The discussions point to the inevitable conclusion that the different electoral tribunals, with the Supreme Court functioning as the PET, are constitutional bodies, independent of the three departments of government Executive, Legislative, and Judiciary but not separate therefrom. MR. MAAMBONG. x x x. My questions will be very basic so we can go as fast as we can. In the case of the electoral tribunal, either of the House or of the Senate, is it correct to say that these tribunals are constitutional creations? I will distinguish these with the case of the Tanodbayan and the Sandiganbayan which are created by mandate of the Constitution but they are not constitutional creations. Is that a good distinction?

xxxx MR. MAAMBONG. Could we, therefore, say that either the Senate Electoral Tribunal or the House Electoral Tribunal is a constitutional body? MR. AZCUNA. It is, Madam President. MR. MAAMBONG. If it is a constitutional body, is it then subject to constitutional restrictions? MR. AZCUNA. It would be subject to constitutional restrictions intended for that body. MR. MAAMBONG. I see. But I want to find out if the ruling in the case of Vera v. Avelino, 77 Phil. 192, will still be applicable to the present bodies we are creating since it ruled that the electoral tribunals are not separate departments of the government. Would that ruling still be valid? MR. AZCUNA. Yes, they are not separate departments because the separate departments are the legislative, the executive and the judiciary; but they are constitutional bodies.39 The view taken by Justices Adolfo S. Azcuna40 and Regalado E. Maambong41 is schooled by our holding in Lopez v. Roxas, et al.:42 Section 1 of Republic Act No. 1793, which provides that: "There shall be an independent Presidential Electoral Tribunal x x x which shall be the sole judge of all contests relating to the election, returns, and qualifications of the president-elect and the vice-president-elect of the Philippines." has the effect of giving said defeated candidate the legal right to contest judicially the election of the President-elect of Vice-President-elect and to demand a recount of the votes case for the office involved in the litigation, as well as to secure a judgment declaring that he is the one elected president or vice-president, as the case may be, and that, as such, he is entitled to assume the duties attached to said office. And by providing, further, that the Presidential Electoral Tribunal "shall be composed of the Chief Justice and the other ten Members of the Supreme Court," said legislation has conferred upon such Court an additional original jurisdiction of an exclusive character. Republic Act No. 1793 has not created a new or separate court. It has merely conferred upon the Supreme Court the functions of a Presidential Electoral Tribunal. The result of the enactment may be likened to the fact that courts of first instance perform the functions of such ordinary courts of first instance, those of court of land registration, those of probate courts, and those of courts of juvenile and domestic relations. It is, also, comparable to the situation obtaining when the municipal court of a provincial capital exercises its authority, pursuant to law, over a limited number of cases which were previously within the exclusive jurisdiction of courts of first instance. In all of these instances, the court (court of first instance or municipal court) is only one, although the functions may be distinct and, even, separate. Thus the powers of a court of first instance, in the exercise of its jurisdiction over ordinary civil cases, are broader than, as well as

distinct and separate from, those of the same court acting as a court of land registration or a probate court, or as a court of juvenile and domestic relations. So too, the authority of the municipal court of a provincial capital, when acting as such municipal court, is, territorially more limited than that of the same court when hearing the aforementioned cases which are primary within the jurisdiction of courts of first instance. In other words, there is only one court, although it may perform the functions pertaining to several types of courts, each having some characteristics different from those of the others. Indeed, the Supreme Court, the Court of Appeals and courts of first instance, are vested with original jurisdiction, as well as with appellate jurisdiction, in consequence of which they are both trial courts and, appellate courts, without detracting from the fact that there is only one Supreme Court, one Court of Appeals, and one court of first instance, clothed with authority to discharge said dual functions. A court of first instance, when performing the functions of a probate court or a court of land registration, or a court of juvenile and domestic relations, although with powers less broad than those of a court of first instance, hearing ordinary actions, is not inferior to the latter, for one cannot be inferior to itself. So too, the Presidential Electoral Tribunal is not inferior to the Supreme Court, since it is the same Court although the functions peculiar to said Tribunal are more limited in scope than those of the Supreme Court in the exercise of its ordinary functions. Hence, the enactment of Republic Act No. 1793, does not entail an assumption by Congress of the power of appointment vested by the Constitution in the President. It merely connotes the imposition of additional duties upon the Members of the Supreme Court. By the same token, the PET is not a separate and distinct entity from the Supreme Court, albeit it has functions peculiar only to the Tribunal. It is obvious that the PET was constituted in implementation of Section 4, Article VII of the Constitution, and it faithfully complies not unlawfully defies the constitutional directive. The adoption of a separate seal, as well as the change in the nomenclature of the Chief Justice and the Associate Justices into Chairman and Members of the Tribunal, respectively, was designed simply to highlight the singularity and exclusivity of the Tribunals functions as a special electoral court. As regards petitioners claim that the PET exercises quasi-judicial functions in contravention of Section 12, Article VIII of the Constitution, we point out that the issue in Buac v. COMELEC43 involved the characterization of the enforcement and administration of a law relative to the conduct of a plebiscite which falls under the jurisdiction of the Commission on Elections. However, petitioner latches on to the enumeration in Buac which declared, in an obiter, that "contests involving the President and the Vice-President fall within the exclusive original jurisdiction of the PET, also in the exercise of quasi-judicial power." The issue raised by petitioner is more imagined than real. Section 12, Article VIII of the Constitution reads: SEC. 12. The Members of the Supreme Court and of other courts established by law shall not be designated to any agency performing quasi-judicial or administrative functions. The traditional grant of judicial power is found in Section 1, Article VIII of the Constitution which provides that the power "shall be vested in one Supreme Court and in such lower courts as may be established by law." Consistent with our presidential system of government, the function of "dealing with the settlement of disputes, controversies or conflicts involving rights, duties or prerogatives that are legally demandable and enforceable" 44 is apportioned to courts of justice. With the advent of the 1987 Constitution, judicial power was expanded to include "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."45 The power was expanded, but it remained absolute. The set up embodied in the Constitution and statutes characterizes the resolution of electoral contests as essentially an exercise of judicial power.1avvphi1 At the barangay and municipal levels, original and exclusive jurisdiction over election contests is vested in the municipal or metropolitan trial courts and the regional trial courts, respectively. At the higher levels city, provincial, and regional, as well as congressional and senatorial exclusive and original jurisdiction is lodged in the COMELEC and in the House of Representatives and Senate Electoral Tribunals, which are not, strictly and literally speaking, courts of law. Although not courts of law, they are, nonetheless, empowered to resolve election contests which involve, in essence, an exercise of judicial power, because of the explicit constitutional empowerment found in Section 2(2), Article IX-C (for the COMELEC) and Section 17, Article VI (for the Senate and House Electoral Tribunals) of the Constitution. Besides, when the COMELEC, the HRET, and the SET decide election contests, their decisions are still subject to judicial review via a petition for certiorari filed by the proper party if there is a showing that the decision was rendered with grave abuse of discretion tantamount to lack or excess of jurisdiction.46 It is also beyond cavil that when the Supreme Court, as PET, resolves a presidential or vicepresidential election contest, it performs what is essentially a judicial power. In the landmark case of Angara v. Electoral Commission,47 Justice Jose P. Laurel enucleated that "it would be inconceivable if the Constitution had not provided for a mechanism by which to direct the course of government along constitutional channels." In fact, Angara pointed out that "[t]he Constitution is a definition of the powers of government." And yet, at that time, the 1935 Constitution did not contain the expanded definition of judicial power found in Article VIII, Section 1, paragraph 2 of the present Constitution. With the explicit provision, the present Constitution has allocated to the Supreme Court, in conjunction with latters exercise of judicial power inherent in all courts,48 the task of deciding presidential and vice-presidential election contests, with full authority in the exercise thereof. The power wielded by PET is a derivative of the plenary judicial power allocated to courts of law, expressly provided in the Constitution. On the whole, the Constitution draws a thin, but, nevertheless, distinct line between the PET and the Supreme Court. If the logic of petitioner is to be followed, all Members of the Court, sitting in the Senate and House Electoral Tribunals would violate the constitutional proscription found in Section 12, Article VIII. Surely, the petitioner will be among the first to acknowledge that this is not so. The Constitution which, in Section 17, Article VI, explicitly provides that three Supreme Court Justices shall sit in the Senate and House Electoral Tribunals, respectively, effectively exempts the Justices-Members thereof from the prohibition in Section 12, Article VIII. In the same vein, it is the Constitution itself, in Section 4, Article VII, which exempts the Members of the Court, constituting the PET, from the same prohibition. We have previously declared that the PET is not simply an agency to which Members of the Court were designated. Once again, the PET, as intended by the framers of the Constitution, is

to be an institution independent, but not separate, from the judicial department, i.e., the Supreme Court. McCulloch v. State of Maryland49 proclaimed that "[a] power without the means to use it, is a nullity." The vehicle for the exercise of this power, as intended by the Constitution and specifically mentioned by the Constitutional Commissioners during the discussions on the grant of power to this Court, is the PET. Thus, a microscopic view, like the petitioners, should not constrict an absolute and constitutional grant of judicial power. One final note. Although this Court has no control over contrary people and naysayers, we reiterate a word of caution against the filing of baseless petitions which only clog the Courts docket. The petition in the instant case belongs to that classification. WHEREFORE, the petition is DISMISSED. Costs against petitioner. SO ORDERED. ANTONIO EDUARDO B. NACHURA Associate Justice EN BANC [G.R. No. 191618, June 01 : 2011] ATTY. ROMULO B. MACALINTAL, PETITIONER, VS. PRESIDENTIAL ELECTORAL TRIBUNAL, RESPONDENT. RESOLUTION NACHURA, J.: Before us is a Motion for Reconsideration filed by petitioner Atty. Romulo B. Macalintal of our Decision[1] in G.R. No. 191618 dated November 23, 2010, dismissing his petition and declaring the establishment of respondent Presidential Electoral Tribunal (PET) as constitutional. Petitioner reiterates his arguments on the alleged unconstitutional creation of the PET: 1.He has standing to file the petition as a taxpayer and a concerned citizen. 2. He is not estopped from assailing the constitution of the PET simply by virtue of his appearance as counsel of former president Gloria Macapagal-Arroyo before respondent tribunal. 3. Section 4, Article VII of the Constitution does not provide for the creation of the PET. 4. The PET violates Section 12, Article VIII of the Constitution. To bolster his arguments that the PET is an illegal and unauthorized progeny of Section 4, Article VII of the Constitution, petitioner invokes our ruling on the constitutionality of the Philippine Truth Commission (PTC).[2] Petitioner cites the concurring opinion of Justice Teresita J. Leonardo-de Castro that the PTC is a public office which cannot be created by the President, the power to do so being lodged exclusively with Congress. Thus, petitioner submits that if the

President, as head of the Executive Department, cannot create the PTC, the Supreme Court, likewise, cannot create the PET in the absence of an act of legislature. On the other hand, in its Comment to the Motion for Reconsideration, the Office of the Solicitor General maintains that: 1.Petitioner is without standing to file the petition. 2.Petitioner is estopped from assailing the jurisdiction of the PET. 3.The constitution of the PET is "on firm footing on the basis of the grant of authority to the [Supreme] Court to be the sole judge of all election contests for the President or Vice-President under paragraph 7, Section 4, Article VII of the 1987 Constitution." Except for the invocation of our decision in Louis ?Barok" C. Biraogo v. The Philippine Truth Commission of 2010,[3] petitioner does not allege new arguments to warrant reconsideration of our Decision. We cannot agree with his insistence that the creation of the PET is unconstitutional. We reiterate that the abstraction of the Supreme Court acting as a Presidential Electoral Tribunal from the unequivocal grant of jurisdiction in the last paragraph of Section 4, Article VII of the Constitution is sound and tenable. The provision reads: Sec. 4. x x x. The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns, and qualifications of the President or Vice-President, and may promulgate its rules for the purpose. We mapped out the discussions of the Constitutional Commission on the foregoing provision and concluded therefrom that: The mirabile dictu of the grant of jurisdiction to this Court, albeit found in the Article on the executive branch of government, and the constitution of the PET, is evident in the discussions of the Constitutional Commission. On the exercise of this Courts judicial power as sole judge of presidential and vice-presidential election contests, and to promulgate its rules for this purpose, we find the proceedings in the Constitutional Commission most instructive: MR. DAVIDE. On line 25, after the words "Vice-President," I propose to add AND MAY PROMULGATE ITS RULES FOR THE PURPOSE. This refers to the Supreme Court sitting en banc. This is also to confer on the Supreme Court exclusive authority to enact the necessary rules while acting as sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President. MR. REGALADO. My personal position is that the rule-making power of the Supreme Court with respect to its internal procedure is already implicit under the Article on the Judiciary; considering, however, that according to the Commissioner, the purpose of this is to indicate the sole power of the Supreme Court without intervention by the legislature

in the promulgation of its rules on this particular point, I think I will personally recommend its acceptance to the Committee. xxxx MR. NOLLEDO x x x. With respect to Sections 10 and 11 on page 8, I understand that the Committee has also created an Electoral Tribunal in the Senate and a Commission on Appointments which may cover membership from both Houses. But my question is: It seems to me that the committee report does not indicate which body should promulgate the rules that shall govern the Electoral Tribunal and the Commission on Appointments. Who shall then promulgate the rules of these bodies? MR. DAVIDE. The Electoral Tribunal itself will establish and promulgate its rules because it is a body distinct and independent already from the House, and so with the Commission on Appointments also. It will have the authority to promulgate its own rules. On another point of discussion relative to the grant of judicial power, but equally cogent, we listen to former Chief Justice Roberto Concepcion: MR. SUAREZ. Thank you. Would the Commissioner not consider that violative of the doctrine of separation of powers? MR. CONCEPCION. I think Commissioner Bernas explained that this is a contest between two parties. This is a judicial power. MR. SUAREZ. We know, but practically the Committee is giving to the judiciary the right to declare who will be the President of our country, which to me is a political action. MR. CONCEPCION. There are legal rights which are enforceable under the law, and these are essentially justiciable questions. MR. SUAREZ. If the election contest proved to be long, burdensome and tedious, practically all the time of the Supreme Court sitting en banc would be occupied with it considering that they will be going over millions and millions of ballots or election returns, Madam President. Echoing the same sentiment and affirming the grant of judicial power to the Supreme Court, Justice Florenz D. Regalado and Fr. Joaquin Bernas both opined: MR. VILLACORTA. Thank you very much, Madam President. I am not sure whether Commissioner Suarez has expressed his point. On page 2, the fourth paragraph of Section 4 provides: The Supreme Court, sitting en banc, shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President.

May I seek clarification as to whether or not the matter of determining the outcome of the contests relating to the election returns and qualifications of the President or VicePresident is purely a political matter and, therefore, should not be left entirely to the judiciary. Will the above-quoted provision not impinge on the doctrine of separation of powers between the executive and the judicial departments of the government? MR. REGALADO. No, I really do not feel that would be a problem. This is a new provision incidentally. It was not in the 1935 Constitution nor in the 1973 Constitution. MR. VILLACORTA. That is right. MR. REGALADO. We feel that it will not be an intrusion into the separation of powers guaranteed to the judiciary because this is strictly an adversarial and judicial proceeding. MR. VILLACORTA. May I know the rationale of the Committee because this supersedes Republic Act 7950 which provides for the Presidential Electoral Tribunal? FR. BERNAS. Precisely, this is necessary. Election contests are, by their nature, judicial. Therefore, they are cognizable only by courts. If, for instance, we did not have a constitutional provision on an electoral tribunal for the Senate or an electoral tribunal for the House, normally, as composed, that cannot be given jurisdiction over contests. So, the background of this is really the case of Roxas v. Lopez. The Gentleman will remember that in that election, Lopez was declared winner. He filed a protest before the Supreme Court because there was a republic act which created the Supreme Court as the Presidential Electoral Tribunal. The question in this case was whether new powers could be given the Supreme Court by law. In effect, the conflict was actually whether there was an attempt to create two Supreme Courts and the answer of the Supreme Court was: "No, this did not involve the creation of two Supreme Courts, but precisely we are giving new jurisdiction to the Supreme Court, as it is allowed by the Constitution. Congress may allocate various jurisdictions." Before the passage of that republic act, in case there was any contest between two presidential candidates or two vice-presidential candidates, no one had jurisdiction over it. So, it became necessary to create a Presidential Electoral Tribunal. What we have done is to constitutionalize what was statutory but it is not an infringement on the separation of powers because the power being given to the Supreme Court is a judicial power. Unmistakable from the foregoing is that the exercise of our power to judge presidential and vicepresidential election contests, as well as the rule-making power adjunct thereto, is plenary; it is not as restrictive as petitioner would interpret it. In fact, former Chief Justice Hilario G. Davide, Jr., who proposed the insertion of the phrase, intended the Supreme Court to exercise exclusive authority to promulgate its rules of procedure for that purpose. To this, Justice Regalado forthwith assented and then emphasized that the sole power ought to be without intervention by the legislative department. Evidently, even the legislature cannot limit the judicial power to resolve presidential and vice-presidential election contests and our rule-making power connected thereto. To foreclose all arguments of petitioner, we reiterate that the establishment of the PET simply constitutionalized what was statutory before the 1987 Constitution. The experiential context of the PET in our country cannot be denied.[4]

Stubbornly, despite the explicit reference of the Members of the Constitutional Commission to a Presidential Electoral Tribunal, with Fr. Joaquin Bernas categorically declaring that in crafting the last paragraph of Section 4, Article VII of the Constitution, they "constitutionalize[d] what was statutory," petitioner continues to insist that the last paragraph of Section 4, Article VII of the Constitution does not provide for the creation of the PET. Petitioner is adamant that "the fact that [the provision] does not expressly prohibit [the] creation [of the PET] is not an authority for the Supreme Court to create the same." Petitioner is going to town under the misplaced assumption that the text of the provision itself was the only basis for this Court to sustain the PETs constitutionality. We reiterate that the PET is authorized by the last paragraph of Section 4, Article VII of the Constitution and as supported by the discussions of the Members of the Constitutional Commission, which drafted the present Constitution. The explicit reference by the framers of our Constitution to constitutionalizing what was merely statutory before is not diluted by the absence of a phrase, line or word, mandating the Supreme Court to create a Presidential Electoral Tribunal. Suffice it to state that the Constitution, verbose as it already is, cannot contain the specific wording required by petitioner in order for him to accept the constitutionality of the PET. In our Decision, we clarified the structure of the PET: Be that as it may, we hasten to clarify the structure of the PET as a legitimate progeny of Section 4, Article VII of the Constitution, composed of members of the Supreme Court, sitting en banc. The following exchange in the 1986 Constitutional Commission should provide enlightenment: MR. SUAREZ. Thank you. Let me proceed to line 23, page 2, wherein it is provided, and I quote: The Supreme Court, sitting en banc[,] shall be the sole judge of all contests relating to the election, returns and qualifications of the President or Vice-President. Are we not giving enormous work to the Supreme Court especially when it is directed to sit en banc as the sole judge of all presidential and vice-presidential election contests? MR. SUMULONG. That question will be referred to Commissioner Concepcion. MR. CONCEPCION. This function was discharged by the Supreme Court twice and the Supreme Court was able to dispose of each case in a period of one year as provided by law. Of course, that was probably during the late 1960s and early 1970s. I do not know how the present Supreme Court would react to such circumstances, but there is also the question of who else would hear the election protests. MR. SUAREZ. We are asking this question because between lines 23 to 25, there are no rules provided for the hearings and there is not time limit or duration for the election contest to be decided by the Supreme Court. Also, we will have to consider the historical background that

when R.A. 1793, which organized the Presidential Electoral Tribunal, was promulgated on June 21, 1957, at least three famous election contests were presented and two of them ended up in withdrawal by the protestants out of sheer frustration because of the delay in the resolution of the cases. I am referring to the electoral protest that was lodged by former President Carlos P. Garcia against our "kabalen" former President Diosdado Macapagal in 1961 and the vicepresidential election contest filed by the late Senator Gerardo Roxas against Vice-President Fernando Lopez in 1965. MR. CONCEPCION. I cannot answer for what the protestants had in mind. But when that protest of Senator Roxas was withdrawn, the results were already available. Senator Roxas did not want to have a decision adverse to him. The votes were being counted already, and he did not get what he expected so rather than have a decision adverse to his protest, he withdrew the case. xxxx MR. SUAREZ. I see. So the Commission would not have any objection to vesting in the Supreme Court this matter of resolving presidential and vice-presidential contests? MR. CONCEPCION. Personally, I would not have any objection. MR. SUAREZ. Thank you. Would the Commissioner not consider that violative of the doctrine of separation of powers? MR. CONCEPCION. I think Commissioner Bernas explained that this is a contest between two parties. This is a judicial power. MR. SUAREZ. We know, but practically the Committee is giving to the judiciary the right to declare who will be the President of our country, which to me is a political action. MR. CONCEPCION. There are legal rights which are enforceable under the law, and these are essentially justiciable questions. MR. SUAREZ. If the election contest proved to be long, burdensome and tedious, practically all the time of the Supreme Court sitting en banc would be occupied with it considering that they will be going over millions and millions of ballots or election returns, Madam President. MR. CONCEPCION. The time consumed or to be consumed in this contest for President is dependent upon they key number of teams of revisors. I have no experience insofar as contests in other offices are concerned. MR. SUAREZ. Although there is a requirement here that the Supreme Court is mandated to sit en banc? MR. CONCEPCION. Yes. MR. SUAREZ. I see.

MR. CONCEPCION. The steps involved in this contest are: First, the ballot boxes are opened before teams of three, generally, a representative each of the court, of the protestant and of the "protestee." It is all a questions of how many teams are organized. Of course, that can be expensive, but it would be expensive whatever court one would choose. There were times that the Supreme Court, with sometimes 50 teams at the same time working, would classify the objections, the kind of problems, and the court would only go over the objected votes on which the parties could not agree. So it is not as awesome as it would appear insofar as the Court is concerned. What is awesome is the cost of the revision of the ballots because each party would have to appoint one representative for every team, and that may take quite a big amount. MR. SUAREZ. If we draw from the Commissioner's experience which he is sharing with us, what would be the reasonable period for the election contest to be decided? MR. CONCEPCION. Insofar as the Supreme Court is concerned, the Supreme Court always manages to dispose of the case in one year. MR. SUAREZ. In one year. Thank you for the clarification.[5] Judicial power granted to the Supreme Court by the same Constitution is plenary. And under the doctrine of necessary implication, the additional jurisdiction bestowed by the last paragraph of Section 4, Article VII of the Constitution to decide presidential and vice-presidential elections contests includes the means necessary to carry it into effect. Thus: Obvious from the foregoing is the intent to bestow independence to the Supreme Court as the PET, to undertake the Herculean task of deciding election protests involving presidential and vice-presidential candidates in accordance with the process outlined by former Chief Justice Roberto Concepcion. It was made in response to the concern aired by delegate Jose E. Suarez that the additional duty may prove too burdensome for the Supreme Court. This explicit grant of independence and of the plenary powers needed to discharge this burden justifies the budget allocation of the PET. The conferment of additional jurisdiction to the Supreme Court, with the duty characterized as an "awesome" task, includes the means necessary to carry it into effect under the doctrine of necessary implication. We cannot overemphasize that the abstraction of the PET from the explicit grant of power to the Supreme Court, given our abundant experience, is not unwarranted. A plain reading of Article VII, Section 4, paragraph 7, readily reveals a grant of authority to the Supreme Court sitting en banc. In the same vein, although the method by which the Supreme Court exercises this authority is not specified in the provision, the grant of power does not contain any limitation on the Supreme Court's exercise thereof. The Supreme Court's method of deciding presidential and vice-presidential election contests, through the PET, is actually a derivative of the exercise of the prerogative conferred by the aforequoted constitutional provision. Thus, the subsequent directive in the provision for the Supreme Court to "promulgate its rules for the purpose." The conferment of full authority to the Supreme Court, as a PET, is equivalent to the full authority conferred upon the electoral tribunals of the Senate and the House of Representatives,

i.e., the Senate Electoral Tribunal (SET) and the House of Representatives Electoral Tribunal (HRET), which we have affirmed on numerous occasions.[6] Next, petitioner still claims that the PET exercises quasi-judicial power and, thus, its members violate the proscription in Section 12, Article VIII of the Constitution, which reads: SEC. 12. The Members of the Supreme Court and of other courts established by law shall not be designated to any agency performing quasi-judicial or administrative functions. We dispose of this argument as we have done in our Decision, viz.: The traditional grant of judicial power is found in Section 1, Article VIII of the Constitution which provides that the power "shall be vested in one Supreme Court and in such lower courts as may be established by law." Consistent with our presidential system of government, the function of "dealing with the settlement of disputes, controversies or conflicts involving rights, duties or prerogatives that are legally demandable and enforceable" is apportioned to courts of justice. With the advent of the 1987 Constitution, judicial power was expanded to include "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 power was expanded, but it remained absolute. The set up embodied in the Constitution and statutes characterizes the resolution of electoral contests as essentially an exercise of judicial power. At the barangay and municipal levels, original and exclusive jurisdiction over election contests is vested in the municipal or metropolitan trial courts and the regional trial courts, respectively. At the higher levels - city, provincial, and regional, as well as congressional and senatorial exclusive and original jurisdiction is lodged in the COMELEC and in the House of Representatives and Senate Electoral Tribunals, which are not, strictly and literally speaking, courts of law. Although not courts of law, they are, nonetheless, empowered to resolve election contests which involve, in essence, an exercise of judicial power, because of the explicit constitutional empowerment found in Section 2(2), Article IX-C (for the COMELEC) and Section 17, Article VI (for the Senate and House Electoral Tribunals) of the Constitution. Besides, when the COMELEC, the HRET, and the SET decide election contests, their decisions are still subject to judicial review - via a petition for certiorari filed by the proper party - if there is a showing that the decision was rendered with grave abuse of discretion tantamount to lack or excess of jurisdiction. It is also beyond cavil that when the Supreme Court, as PET, resolves a presidential or vicepresidential election contest, it performs what is essentially a judicial power. In the landmark case of Angara v. Electoral Commission, Justice Jose P. Laurel enucleated that "it would be inconceivable if the Constitution had not provided for a mechanism by which to direct the course of government along constitutional channels." In fact, Angara pointed out that "[t]he Constitution is a definition of the powers of government." And yet, at that time, the 1935 Constitution did not contain the expanded definition of judicial power found in Article VIII, Section 1, paragraph 2 of the present Constitution.

With the explicit provision, the present Constitution has allocated to the Supreme Court, in conjunction with latter's exercise of judicial power inherent in all courts, the task of deciding presidential and vice-presidential election contests, with full authority in the exercise thereof. The power wielded by PET is a derivative of the plenary judicial power allocated to courts of law, expressly provided in the Constitution. On the whole, the Constitution draws a thin, but, nevertheless, distinct line between the PET and the Supreme Court. If the logic of petitioner is to be followed, all Members of the Court, sitting in the Senate and House Electoral Tribunals would violate the constitutional proscription found in Section 12, Article VIII. Surely, the petitioner will be among the first to acknowledge that this is not so. The Constitution which, in Section 17, Article VI, explicitly provides that three Supreme Court Justices shall sit in the Senate and House Electoral Tribunals, respectively, effectively exempts the Justices-Members thereof from the prohibition in Section 12, Article VIII. In the same vein, it is the Constitution itself, in Section 4, Article VII, which exempts the Members of the Court, constituting the PET, from the same prohibition. We have previously declared that the PET is not simply an agency to which Members of the Court were designated. Once again, the PET, as intended by the framers of the Constitution, is to be an institution independent, but not separate, from the judicial department, i.e., the Supreme Court. McCulloch v. State of Maryland proclaimed that "[a] power without the means to use it, is a nullity." The vehicle for the exercise of this power, as intended by the Constitution and specifically mentioned by the Constitutional Commissioners during the discussions on the grant of power to this Court, is the PET. Thus, a microscopic view, like the petitioner's, should not constrict an absolute and constitutional grant of judicial power.[7] Finally, petitioners application of our decision in Biraogo v. Philippine Truth Commission[8] to the present case is an unmitigated quantum leap. The decision therein held that the PTC "finds justification under Section 17, Article VII of the Constitution." A plain reading of the constitutional provisions, i.e., last paragraph of Section 4 and Section 17, both of Article VII on the Executive Branch, reveals that the two are differently worded and deal with separate powers of the Executive and the Judicial Branches of government. And as previously adverted to, the basis for the constitution of the PET was, in fact, mentioned in the deliberations of the Members of the Constitutional Commission during the drafting of the present Constitution. WHEREFORE, the Motion for Reconsideration is DENIED. Our Decision in G.R. No. 191618 STANDS. SO ORDERED. Corona, C.J.,Carpio,Carpio Morales,Velasco, JR., Nachura, Leonardo-De Castro, Brion, Peralta, Bersamin,Del Castillo,Abad,Villarama, JR.,Perez, Mendoza, and Sereno, JJ.concur.

EN BANC G.R. No. 188308 JOSELITO R. MENDOZA,

Petitioner, - versus COMMISSION ON ELECTIONS and ROBERTO M. PAGDANGANAN, DECISION BRION, J.: The present case involves a clash between the power under the Philippine Constitution of the respondent Commission on Elections (COMELEC) in the handling of a provincial election contest, and the claimed due process rights of a party to the contest. The petitioner Joselito R. Mendoza (the petitioner) essentially asserts in his petition for certiorari1[1]that the COMELEC conducted proceedings in the election contest for the gubernatorial position of the Province of Bulacan, between him and the respondent Roberto M. Pagdanganan (the respondent), without due regard to his fundamental due process rights. The COMELEC, on the other hand, claims that its decision-making deliberations are internal, confidential and do not require notice to and the participation of the contending parties. THE ANTECEDENTS The petitioner and the respondent vied for the position of Governor of the Province of Bulacan in the May 14, 2007 elections. The petitioner was proclaimed winning candidate and assumed the office of Governor. The respondent seasonably filed an election protest with the COMELEC, which was raffled to the Second Division and docketed as EPC No. 2007-44. Revision of ballots involving the protested and counter-protested precincts in Angat, Bocaue, Calumpit, Doa Remedios Trinidad, Guiginto, Malolos, Meycauayan, Norzagaray, Pandi, Paombong, Plaridel, Pulilan, San Rafael and San Jose del Monte soon followed. The revision was conducted at the COMELECs office in Intramuros. After revision, the parties presented their other evidence, leading to the parties formal offer of their respective evidence.

The COMELEC approved the parties formal offer of evidence and then required the parties to submit their respective memoranda.The parties complied with the COMELECs order. The case was thereafter submitted for resolution. OnMarch 2, 2009 the COMELEC transferred the Bulacan ballot boxes, including those involved in the provincial election contest, to the Senate Electoral Tribunal (SET) in connection with the protest filed by Aquilino Pimentel III against Juan Miguel Zubiri. In light of this development, the petitioner moved to suspend further proceedings. . The COMELECs Second Division denied the petitioners motion in its Order of April 29, 2009, ruling that the COMELEC has plenary powers to find alternative methods to facilitate the resolution of the election protest; thus, it concluded that it would continue the proceedings after proper coordination with the SET. The petitioner moved to reconsider this Order, but the COMELECs Second Division denied the motion in its Order of May 26, 2009. These inter-related Resolutions led to the COMELECs continued action specifically, the appreciation of ballots on the provincial election contest at the SET offices. Allegedly alarmed by information on COMELEC action on the provincial election contest within the SET premises without notice to him and without his participation, the petitioners counsel wrote the SET Secretary, Atty. Irene Guevarra, a letter dated June 10, 2009 to confirm the veracity of the reported conduct of proceedings.2[2] The SET Secretary responded on June 17, 2009 as follows: x x x please be informed that the conduct of proceedings in COMELEC EPC No. 2007-44 (Pagdanganan vs. Mendoza) within the Tribunal Premises was authorized by then Acting Chairman of the Tribunal, Justice Antonio T. Carpio, upon formal request of the Office of Commissioner Lucenito N. Tagle. Basis of such grant is Section 3, Comelec Resolution No. 2812 dated 17 October 1995, stating that (t)he Tribunals, the Commission and the Courts shall coordinate and make arrangement with each other so as not to delay or interrupt the revision of ballots being conducted. The synchronization of revision of ballots shall be such that the expeditious disposition of the respective protest case shall be the primary concern. While the said provision speaks only of revision, it has been the practice of the Tribunal to allow the conduct of other proceedings in

local election protest cases within its premises as may be requested. [emphasis supplied]3[3] THE PETITION The SET Secretarys response triggered the filing of the present petition raising the following ISSUES A. WHETHER OR NOT THE COMELEC VIOLATED DUE PROCESS BY CONDUCTING PROCEEDINGS WITHOUT GIVING DUE NOTICE TO THE PETITIONER. B. WHETHER OR NOT THE COMELEC GRAVELY ABUSED ITS DISCRETION TANTAMOUNT TO AN EXCESS OF JURISDICTION IN APPRECIATING BALLOTS WHICH ARE NOT IN ITS OFFICIAL CUSTODY AND ARE OUTSIDE ITS OWN PREMISES, AUTHORITY AND CONTROL. The petitioner argues that the election protest involves his election as Governor; thus, its subject matter involves him and the people of the Province of Bulacanwho elected him. On this basis, he claims entitlement to notice and participation in all matters that involve or are related to the election protest. He further asserts that he had the legitimate expectation that no further proceedings would be held or conducted in the case after its submission for decision. Citing the commentaries of Father Joaquin Bernas,4[4]the petitioner argues that the proceedings before the COMELEC in election protests are judicial in nature and character.Thus, the strictures of judicial due process specifically, (a) opportunity to be heard and (b) that judgment be rendered only after lawful hearing apply. Notices in judicial dispute, he claims, are not really just a matter of courtesy; they are elementary fundamental element of due process, they are part and parcel of a right of a party to be heard. He further cites Justice Isagani A. Cruz,5[5]who wrote:

x x x Every litigant is entitled to his day in court. He has a right to be notified of every incident of the proceeding and to be present at every stage thereof so that he may be heard by himself and counsel for the protection of his interest. The petitioner claims that without notice to him of the proceedings, the due process element of the right to have judgment only after lawful hearing is absent. There is no way, he claims, that a judicial proceeding held without notice to the parties could be described as a lawful hearing, especially a proceeding which has as its subject matter the sovereign will of an entire province. He was therefore denied his day in court, he claims, when the COMELEC conducted the examination and appreciation of ballots.The proceedings should be stopped and declared null and void; its future results, too, should be nullified, as nothing derived from the anomalous and unconstitutional clandestine and unilateral proceedings should ever be part of any decision that the COMELEC may subsequently render. The poisonous fruits (derived from the proceedings) should have no part and should not be admitted for any purpose and/or in any judicial proceeding. Other than his due process concern, the petitioner takes issue with the COMELECs appreciation of ballots even when the ballots and other election materials were no longer in its official custody and were outside its premises, authority and control. He asserts that an important element of due process is that the judicial body should have jurisdiction over the property that is the subject matter of the proceedings.In this case, the COMELEC has transferred possession, custody and jurisdiction over the ballots to the SET, a tribunal separate and independent from the COMELEC and over which the COMELEC exercises no authority or jurisdiction. For the COMELEC to still conduct proceedings on property, materials and evidence no longer in its custody violates the principle of separation of powers. The petitioner also points out that the COMELECs unilateral appreciation of the ballots in the SET premises deviates from the Commissions usual and time honored practice and procedure of conducting proceedings within its premises and while it has custody over the ballots. There is no precedent, according to the petitioner, for this deviation, nor is there any compelling reason to make the present case an exception.Citing Cabagnot v. Commission on Elections (G.R. No. 124383, August 9, 1996) which involves a transfer or change of venue of

the revision of ballots, the petitioner alleges that this Court has been very emphatic in denouncing the COMELEC for its departure from its own rules and usual practice; while Cabagnotinvolves the issue of change of venue, the petitioner finds parallel applicability in the present case which also involves a deviation from COMELEC rules and usual practice. The petitioner adds that the act of the Second Division is effectively an arrogation of the authority to promulgate rules of procedure a power that solely belongs to the COMELEC en banc. After a preliminary finding of a genuine due process issue, we issued a Status Quo Order on July 14, 2009. THE RESPONDENTS COMMENTS In his Comment to the Petition with Extremely Urgent Motion to Lift/Dissolve Status Quo Ante Order, the private respondent asserts that the petition contains deliberate falsehoods and misleading allegations that led the Court to grant the injunctive relief the petitioner had asked. He asserts that the proceeding the petitioner stated in his petition was actually the COMELECs decision-making process, i.e., the appreciation of ballots, which is a procedure internal to the Members of the Second Division of the COMELEC and their staff members; no revision of ballots took place as revision had long been finished. What was therefore undertaken within the SETs premises was unilateral COMELEC action that is exclusive to the COMELEC and an internal matter that is confidential in nature. In this light, no due process violation ever arose. The private respondent also asserts that the petitioner cannot claim that he was not notified of and denied participation in the revision proceedings, as the petitioner himself is fully aware that the revision of the ballots was completed as early as July 28, 2008 and the petitioner was present and actively participated in the entire proceedings, all the way to the filing of the required memoranda. Thus, the petitioners right to due process was duly satisfied. The private respondent implores us to commence contempt proceedings against the petitioner who, the respondent claims, has not been forthright in his submissions and was not guided by the highest standards of truthfulness, fair play and nobility in his conduct as a party and in his relations with the opposing party, the other counsel and the Court. Lastly, the private respondent posits that the present petition was filed out of time i.e., beyond the reglementary period provided under Rule 64. All these reasons, the private

respondent argues, constitute sufficient basis for the lifting of the status quo order and the dismissal of the petition. Public respondent COMELEC, for its part, claims that the petition is without basis in fact and in law and ought to be dismissed outright. Given the possibility of simultaneous election contests involving national and local officials, it has institutionalized an order of preference in the custody and revision of ballots in contested ballot boxes. The established order of preference is not without exception, as the expeditious disposition of protest cases is a primary concern. Additionally, the order of preference does not prevent the COMELEC from proceeding with pending protest cases, particularly those already submitted for decision. It claims that it has wide latitude to employ means to effectively perform its duty in safeguarding the sanctity of the elections and the integrity of the ballot. The COMELEC further argues that in the absence of a specific rule on whether it can conduct appreciation of ballots outside its premises or official custody, the issue boils down to one of discretion the authority of the COMELEC to control as it deems fit the processes or incidents of a pending election protest. Under Section 4 of the COMELEC Rules of Procedure, the COMELEC may use all auxiliary writs, processes and other means to carry into effect its powers or jurisdiction; if the procedure to be followed in the exercise of such power or jurisdiction is not specifically provided for by law or the Rules of Procedure, any suitable process or proceeding not prohibited by law or by its rules may be adopted. The COMELEC lastly submits that while due process requires giving the parties an opportunity to intervene in all stages of the proceedings, the COMELEC in the present case is not actually conducting further proceedings requiring notice to the parties; there is no revision or correction of the ballots, as the election protest had already been submitted for resolution. When the COMELEC coordinated with the SET, it was simply for purposes of resolving the submitted provincial election contest before it; the parties do not take part in this aspect of the case which necessarily requires utmost secrecy. On the whole, the petitioner was afforded every opportunity to present his case.To now hold the election protest hostage until the conclusion of the protest pending before the SET defeats the COMELECs mandate of ensuring free, orderly and honest election. THE COURTS RULING

We review the present petition on the basis of the combined application of Rules 64 and 65 of the Rules of Court. While COMELEC jurisdiction over the Bulacan election contest is not disputed, the legality of subsequent COMELEC action is assailed for having been undertaken with grave abuse of discretion amounting to lack or excess of jurisdiction. Thus, our standard of review is grave abuse of discretion, a term that defies exact definition, but generally refers to capricious or whimsicalexercise of judgment as is equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion and hostility.6[6] Mere abuse of discretion is not enough; the abuse must be grave to merit our positive action.7[7] After due consideration, we find the petition devoid of merit. The petition is anchored on the alleged conduct of proceedings in the election protest following the completed revision of ballots at the SET premises without notice to and without the participation of the petitioner.Significantly, the conduct of proceedings is confirmed by the SET Secretary in the letter we quoted above.8[8] As the issues raised show the petitioners focus is not really on the COMELEC Orders denying the suspension of proceedings when the ballot boxes and other election materials pertinent to the election contest were transferred to the SET; the focus is on what the COMELEC did after to the issuance of the Resolutions.We read the

petition in this context as these COMELEC Orders are now unassailable as the period to challenge them has long passed.9[9] The substantive issue we are primarily called upon to resolve is whether there were proceedings within the SET premises, entitling the petitioner to notice and participation, which were denied to him; in other words, the issue is whether the petitioners right to due process has been violated. A finding of due process violation, because of the inherent arbitrariness it carries, necessarily amounts to grave abuse of discretion. As a preliminary matter, we note that the petitioner has claimed that COMELEC exercises judicial power in its action over provincial election contests and has argued its due process position from this view. We take this opportunity to clarify that judicial power in our country is vested in one Supreme Court and in such lower courts as may be established by law.10[10] This exclusive grant of authority to the Judiciary is reinforced under the second paragraph of Section 1, Article VIII of the Constitution which further states that Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable.. ., thus constitutionally locating the situs of the exercise of judicial power in the courts. In contrast with the above definitions, Section 2, Article IX(C) of the Constitution lists the COMELECs powers and functions, among others, as follows: (1) Enforce and administer all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum, and recall. (2) Exercise exclusive original jurisdiction over all contests relating to the elections, returns and qualifications of all elective regional, provincial, and city officials, and appellate jurisdiction over all contests involving elective municipal officials decided by trial courts of general jurisdiction, or involving elective barangayofficials by trial courts of limited jurisdiction.

Decisions, final orders, or rulings of the Commission on election contests involving elective municipal andbarangay officials shall be final, executory, and not appealable. (3) Decide, except those involving the right to vote, all questions affecting elections, including determination of the number and location of polling places, appointment of election officials and inspectors, and registration of voters. Under these terms, the COMELEC under our governmental structure is a constitutional administrative agency and its powers are essentially executive in nature (i.e., to enforce and administer election laws),11[11]quasi-judicial (to exercise original jurisdiction over election contests of regional, provincial and city officials and appellate jurisdiction over election contests of other lower ranking officials), and quasi-legislative (rulemaking on all questions affecting elections and the promulgation of its rules of procedure). Historically, the COMELEC has always been an administrative agency whose powers have been increased from the 1935 Constitution to the present one, to reflect the countrys awareness of the need to provide greater regulation and protection to our electoral processes to ensure their integrity. In the 1935 Constitution, the powers and functions of the COMELEC were defined as follows: SECTION 2. The Commission on Elections shall have exclusive charge of the enforcement and administration of all laws relative to the conduct of elections and shall exercise all other functions which may be conferred upon it by law. It shall decide, save those involving the right to vote, all administrative questions affecting elections, including the determination of the number and location of polling places, and the appointment of election inspectors and of other election officials. All law enforcement agencies and instrumentalities of the Government, when so required by the Commission, shall act as its deputies for the purpose of insuring free, orderly, and honest election. The decisions, orders, and rulings of the Commission shall be subject to review by the Supreme Court. [emphasis supplied] These evolved into the following powers and functions under the 1973 Constitution: (1) elections. Enforce and administer all laws relative to the conduct of

(2) Be the sole judge of all contests relating to the elections, returns, and qualifications of all members of the National Assembly and elective provincial and city officials. (3) Decide, save those involving the right to vote, administrative questions affecting elections, including the determination of the number and location of polling places, the appointment of election officials and inspectors, and the registration of voters. These powers have been enhanced in scope and details under the 1987 Constitution, but retained all the while the character of an administrative agency. The COMELECs adjudicative function is quasi-judicial since it is a constitutional body, other than a court, vested with authority to decide election contests, and in the course of the exercise of its jurisdiction, to hold hearings and exercise discretion of a judicial nature;12[12] it receives evidence, ascertain the facts from these submissions, determine the law and the legal rights of the parties, and on the basis of all these decides on the merits of the case and renders judgment.13[13] Despite the exercise of discretion that is essentially judicial in character, particularly with respect to election contests, COMELEC is not a tribunal within the judicial branch of government and is not a court exercising judicial power in the constitutional sense;14[14] hence, its adjudicative function, exercised as it is in the course of administration and enforcement, is quasi-judicial. As will be seen on close examination, the 1973 Constitution used the unique wording that the COMELEC shall be the sole judge of all contests, thus giving the appearance that judicial power had been conferred. This phraseology, however, was changed in the 1987 Constitution to give the COMELEC exclusive jurisdiction over all contests, thus removing any vestige of exercising its adjudicatory power as a court and correctly aligning it with what it is a

quasi-judicial body.15[15]Consistent with the characterization of its adjudicatory power as quasijudicial, the judicial review of COMELEC en banc decisions (together with the review of Civil Service Commission decisions) is via the prerogative writ of certiorari, not through an appeal, as the traditional mode of review of quasi-judicial decisions of administrative tribunals in the exercise the Courts supervisory authority. This means that the Court will not supplant the decision of the COMELEC as a quasi-judicial body except where a grave abuse of discretion or any other jurisdictional error exists. The appropriate due process standards that apply to the COMELEC, as an administrative or quasi-judicial tribunal, are those outlined in the seminal case of Ang Tibay v. Court of Industrial Relations,16[16]quoted below: (1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. xxx (2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (3) While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support its decision. A decision with absolutely nothing to support it is a nullity, a place when directly attached. (4) Not only must there be some evidence to support a finding or conclusion, but the evidence must be "substantial. "Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." (5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. (7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know

the various issues involved, and the reasons for the decisions rendered. The performance of this duty is inseparable from the authority conferred upon it. These are now commonly referred to as cardinal primary rights in administrative proceedings. The first of the enumerated rights pertain to the substantive rights of a party at hearing stage of the proceedings. The essence of this aspect of due process, we have consistently held, is simply the opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain ones side or an opportunity to seek a reconsideration of the action or ruling complained of.17[17] A formal or trial-type hearing is not at all times and in all instances essential; in the case of COMELEC, Rule 17 of its Rules of Procedure defines the requirements for a hearing and these serve as the standards in the determination of the presence or denial of due process. The second, third, fourth, fifth, and sixth aspects of the Ang Tibay requirements are reinforcements of the right to a hearing and are the inviolable rights applicable at the deliberative stage, as the decision-maker decides on the evidence presented during the hearing. These standards set forth the guiding considerations in deliberating on the case and are the material and substantial components of decision-making.Briefly, the tribunal must consider the totality of the evidence presented which must all be found in the records of the case (i.e., those presented or submitted by the parties); the conclusion, reached by the decision-maker himself and not by a subordinate, must be based on substantial evidence.18[18] Finally, the last requirement, relating to the form and substance of the decision of a quasi-judicial body, further complements the hearing and decision-making due process rights and is similar in substance to the constitutional requirement that a decision of a court must state distinctly the facts and the law upon which it is based.19[19] As a component of the rule of

fairness that underlies due process, this is the duty to give reason to enable the affected person to understand how the rule of fairness has been administered in his case, to expose the reason to public scrutiny and criticism, and to ensure that the decision will be thought through by the decision-maker. In the present case, the petitioner invokes both the due process component rights at the hearing and deliberative stages and alleges that these component rights have all been violated. We discuss all these allegations below. The Right to Notice and to be Heard. a. At the Hearing and Revision of Ballots. Based on the pleadings filed, we see no factual and legal basis for the petitioner to complain of denial of his hearing stage rights.In the first place, he does not dispute that he fully participated in the proceedings of the election protest until the case was deemed submitted for resolution; he had representation at the revision of the ballots, duly presented his evidence, and summed up his case through a memorandum. These various phases of the proceedings constitute the hearing proper of the election contest and the COMELEC has more than satisfied the opportunity to be heard that the Ang Tibay hearing stage rights require. In these proceedings, the petitioner stood head-to-head with the respondent in an adversarial contest where both sides were given their respective rights to speak, make their presentations, and controvert each others submission, subject only to established COMELEC rules of procedures. Under these undisputed facts, both parties had their day in court, so to speak, and neither one can complain of any denial of notice or of the right to be heard. b. At the Proceedings at the SET. A critical question to be answered in passing upon due process questions at this stage of the election contest is the nature of the so-called proceedings after the ballots and other materials pertinent to the provincial election contest were transferred to the SET. In the petition, the petitioner alleged that there were strange proceedings20[20]which were unilateral, clandestine and surreptitious within the premises of the SET, on documents,

ballots and election materials whose possession and custody have been transferred to the SET, and the petitioner was NEVER OFFICIALLY NOTIFIED of the strange on-goings at the SET.21[21] Attached to the petition was the letter of the Secretary of the SET confirming the conduct of proceedings in the provincial election contest, and citing as basis the authority of Acting SET Chairman, Justice Antonio T. Carpio, upon the formal request of the Office of Commissioner Lucenito N. Tagle, and citing Section 3, COMELEC Resolution No. 2812 dated 17 October 1995 on the coordination envisioned among the COMELEC, the SET and the courts so as not to delay or interrupt the revision of ballots being conducted. While the SET letter made the reservation that While the said provision speaks only of revision, it has been the practice of the Tribunal to allow the conduct of other proceedings in local election protest cases within its premises as may be requested, no mention whatsoever was made of the kind of proceedings taking place. It was at this point that this Court intervened, in response to the petitioners prayer for the issuance of temporary injunctive relief, through the issuance of a Status Quo Order with a nonextendible directive for the respondents to file their comments on the petition; for indeed, any further revision of ballots or other adversarial proceedings after the case has been submitted for resolution, would not only be strange and unusual but would indicate a gross violation of due process rights. After consideration of the respondents Comments and the petitioners petition and Reply, we hold that the contested proceedings at the SET (contested proceedings) are no longer part of the adversarial aspects of the election contest that would require notice of hearing and the participation of the parties. As the COMELEC stated in its Comment and without any contrary or disputing claim in the petitioners Reply:22[22]

However, contrary to the claim of petitioner, public respondent in the appreciation of the contested ballots in EPC No. 2007-44 simultaneously with the SET in SET Case No. 001-07 is not conducting further proceedings requiring notice to the parties. There is no revision or correction of the ballots because EPC No. 200704 was already submitted for resolution. Public respondent, in coordinating with the SET, is simply resolving the submitted protest case before it. The parties necessarily take no part in said deliberation, which require utmost secrecy. Needless to state, the actual decision-making process is supposed to be conducted only by the designated members of the Second Division of the public respondent in strict confidentiality. In other words, what took place at the SET were the internal deliberations of the COMELEC, as a quasi-judicial body, in the course of appreciating the evidence presented and deciding the provincial election contest on the merits. These deliberations are no different from judicial deliberations which are considered confidential and privileged.23[23]We find it significant that the private respondents Comment fully supported the COMELECs position and disavowed any participation in the contested proceeding the petitioner complained about.The petitioner, on the other hand, has not shown that the private respondent was ever present in any proceeding at the SET relating to the provincial election contest. To conclude, the rights to notice and to be heard are not material considerations in the COMELECs handling of the Bulacan provincial election contest after the transfer of the ballot boxes to the SET; no proceedings at the instance of one party or of COMELEC has been conducted at the SET that would require notice and hearing because of the possibility of prejudice to the other party. The COMELEC is under no legal obligation to notify either party of the steps it is taking in the course of deliberating on the merits of the provincial election contest.In the context of our standard of review for the petition, we see no grave abuse of discretion amounting to lack or excess of jurisdiction committed by the COMELEC in its deliberation on the Bulacan election contest and the appreciation of ballots this deliberation entailed. Alleged Violations of Deliberation Stage Rights.

On the basis of the above conclusion, we see no point in discussing any alleged violation of the deliberative stage rights. First, no illegal proceeding ever took place that would bear the poisonous fruits that the petitioner fears. Secondly, in the absence of the results of the COMELEC deliberations through its decision on the election protest, no basis exists to apply the Ang Tibay deliberative stage rights; there is nothing for us to test under the standards of the due process deliberative stages rights before the COMELEC renders its decision. Expressed in terms of our standard of review, we have as yet no basis to determine the existence of any grave abuse of discretion. Conduct of COMELEC Deliberations at the SET Premises We turn to the issue of the propriety of the COMELECs consideration of the provincial election contest (specifically its appreciation of the contested ballots) at the SET premises and while the same ballots are also under consideration by the SET for another election contest legitimately within the SETs own jurisdiction. We state at the outset that the COMELEC did not lose jurisdiction over the provincial election contest, as the petitioner seems to imply, because of the transmittal of the provincial ballot boxes and other election materials to the SET. The Constitution conferred upon the COMELEC jurisdiction over election protests involving provincial officials. The COMELEC in this case has lawfully acquired jurisdiction over the subject matter, i.e., the provincial election contest, as well as over the parties. After its jurisdiction attached, this jurisdiction cannot be ousted by subsequent events such as the temporary transfer of evidence and material records of the proceedings to another tribunal exercising its own jurisdiction over another election contest pursuant to the Constitution. This is the rule of adherence of jurisdiction.24[24] Thus, the jurisdiction of the COMELEC over provincial election contest exists side by side with the jurisdiction of the Senate Electoral Tribunal, with each tribunal being supreme in their respective areas of concern (the Senate election contests for the SET, and the regional,

provincial and city election contests for the COMELEC), and with neither one being higher than the other in terms of precedence so that the jurisdiction of one must yield to the other. But while no precedence in jurisdiction exists, the COMELEC, vowing to the reality that only a single ballot exists in an election for national and local officials, saw it fit to lay down the rule on the order of preference in the custody and revision of ballots and other documents contained in the ballot boxes.The order, in terms of the adjudicatory tribunal and as provided in COMELEC Resolution No. 2812, runs: 1. Presidential Electoral Tribunal; 2. Senate Electoral Tribunal; 3. House of Representatives Electoral Tribunal; 4. Commission on Elections; and 5. Regional Trial Courts. This order of preference dictated that the ballot boxes and other election materials in Bulacans provincial election contest, had to be transferred to the SET when the latter needed these materials for its revision of ballots. The transfer to the SET, however, did not mean that the Bulacan provincial election contest at that time already submitted for decision had to be suspended as the COMELEC held in its Orders of 29 April 2009 and 26 May 2009 in EPC No. 2007-44.25[25] This is particularly true in Bulacans case as no revision had to be undertaken, the revision having been already terminated. With the COMELEC retaining its jurisdiction over the Bulacan provincial election contest, the legal effect of the physical transfer of the ballots and other election materials to the SET for purposes of its own revision becomes a non-issue, given the arrangement between the COMELEC and the SET, pursuant to COMELEC Resolution No. 2812, to coordinate and make arrangements with each other so as not to delay or interrupt the revision of ballots being

conducted, all for the purpose of the expeditious disposition of their respective protest cases. The SET itself honored this arrangement as shown by the letter of the SET Secretary that the COMELEC could conduct proceedings within the Tribunal premises as authorized by the Acting Chairman of the Tribunal, Justice Antonio T. Carpio.26[26] This arrangement recognized the COMELECs effective authority over the Bulacan ballots and other election materials, although these were temporarily located at the SET premises.This arrangement, too, together with the side by side and non-conflicting existence of the COMELEC and SET jurisdictions, negate the validity of the petitioners argument that the COMELEC transgressed the rule on separation of powers when it acted on the Bulacan provincial election contest while the ballot boxes were at the SET premises. Rather than negate, this arrangement reinforced the separate but co-existing nature of these tribunals respective jurisdictions. As the petitioner argues and the COMELEC candidly admits, there is no specific rule which allows the COMELEC to conduct an appreciation of ballots outside its premises and of those which are outside its own custody.27[27] But while this is true, there is likewise nothing to prohibit the COMELEC from undertaking the appreciation of ballot side by side with the SETs own revision of ballots for the senatorial votes, in light especially of the COMELECs general authority to adopt means to effect its powers and jurisdiction under its Rules of Procedure. Section 4 of these Rules states: Sec. 4.Means to Effect Jurisdiction. - All auxiliary writs, processes and other means necessary to carry into effect its powers or jurisdiction may be employed by the Commission; and if the procedure to be followed in the exercise of such power or jurisdiction is not specifically provided for by law or these rules, any suitable process or proceeding may be adopted. This rule is by no means unusual and unique to the COMELEC as the courts have the benefit of this same type of rule under Section 6, Rule 136 of the Rules of Court. The courts own rule provides:

Means to Carry Jurisdiction into Effect. When by law jurisdiction is conferred o n a court or judicial officer, all auxiliary writs, writs, processes and other means necessary to carry it into effect may be employed by such court or officer; and if the procedure to be followed in the exercise of such jurisdiction is not specifically pointed out by law or by these rules, any suitable process or mode of proceeding may be adopted which appears conformable to the spirit of said law or rules. Incidentally, the COMELEC authority to promulgate the above rule enjoys constitutional moorings; in the grant to the COMELEC of its jurisdiction, the Constitution provided it with the accompanying authority to promulgate its own rules concerning pleadings and practice before it or before any of its offices, provided that these rules shall not diminish, increase or modify substantive rights.28[28] The Constitution additionally requires that the rules of procedure that the COMELEC will promulgate must expedite the disposition of election cases, including preproclamation controversies.29[29] This constitutional standard is authority, no less, that the COMELEC can cite in defending its action. For ultimately, the appreciation of the Bulacan ballots that the COMELEC undertook side by side with the SETs own revision of ballots, constitutes an exercise of discretion made under the authority of the above-cited COMELEC rule of procedure. On the basis of the standards set by Section 4 of the COMELEC Rules of Procedure, and of the Constitution itself in the handling of election cases, we rule that the COMELEC action is a valid exercise of discretion as it is a suitable and reasonable process within the exercise of its jurisdiction over provincial election contests, aimed at expediting the disposition of this case, and with no adverse, prejudicial or discriminatory effects on the parties to the contest that would render the rule unreasonable. Since the COMELEC action, taken by its Second Division, is authorized under the COMELEC Rules of Procedure, the Second Division cannot in any sense be said to be intruding into the COMELEC en bancrule-making prerogative when the Second Division chose to

undertake ballot appreciation within the SET premises side by side with the SET revision of ballots. To be exact, the Second Division never laid down any new rule; it merely acted pursuant to a rule that the COMELEC en banc itself had previously enacted. In light of these conclusions, we need not discuss the other issues raised. WHEREFORE, premises considered, we DISMISS the petition for certiorari for lack of merit.We accordingly LIFT the STATUS QUO ORDER we issued, effective immediately. SO ORDERED. ARTURO D. BRION Associate Justice

SECOND DIVISION [G.R. No. 185230, June 01 : 2011] JOSEPH C. CEREZO,PETITIONER, VS. PEOPLE OF THE PHILIPPINES, JULIET YANEZA, PABLO ABUNDA, JR., AND VICENTE AFULUGENCIA, RESPONDENTS. DECISION NACHURA, J.: This petition for review on certiorari under Rule 45 of the Rules of Court seeks to annul the July 11, 2008 Decision[1] and the November 4, 2008 Resolution[2] of the Court of Appeals (CA) in CAG.R. SP No. 99088, which reversed and set aside the October 24, 2006[3] and the February 26, 2007[4]Orders of the Regional Trial Court (RTC) of Quezon City, Branch 92. The RTC Orders revived Criminal Case No. Q-03-115490, entitled People of the Philippines v. Juliet Yaneza, Pablo Abunda, Jr., Oscar Mapalo and Vicente Afulugencia, after the same was dismissed in an earlier Order. The Facts On September 12, 2002, petitioner Joseph Cerezo filed a complaint for libel against respondents Juliet Yaneza, Pablo Abunda, Jr., and Vicente Afulugencia (respondents), as well as Oscar Mapalo (Mapalo).[5] Finding probable cause to indict respondents,[6] the Quezon City Prosecutors Office (OP-QC) filed the corresponding Information against them on February 18, 2003 before the RTC.[7] Respondents thereafter filed a Motion for Reconsideration and/or Motion to Re-evaluate Prosecutions Evidence before the OP-QC.[8]

In its resolution dated November 20, 2003, the OP-QC reversed its earlier finding and recommended the withdrawal of the Information.[9] Consequently, a Motion to Dismiss and Withdraw Information was filed before the RTC on December 3, 2003. During the intervening period, specifically on November 24, 2003, respondents were arraigned. All of them entered a not guilty plea.[10] In deference to the prosecutors last resolution, the RTC ordered the criminal case dismissed in its Order dated March 17, 2004, viz.: Settled is the rule that the determination of the persons to be prosecuted rests primarily with the Public Prosecutor who is vested with quasi-judicial discretion in the discharge of this function. Being vested with such power, he can reconsider his own resolution if he finds that there is reasonable ground to do so. x x x. More so, the Court cannot interfere with the Public Prosecutors discretion to determine probable cause or the propriety of pursuing or not a criminal case when the case is not yet filed in Court, as a general rule. However, if the same criminal case has been filed in Court already, the Public Prosecutor can still interfere with it subject to the approval of the Court. In the case of Republic vs. Sunga, et al., the Supreme Court held that while it has been settled in the case of Crespo vs. Mogul that the trial court is the sole judge on whether a criminal case should be dismissed after the complaint or information has been filed in court, nonetheless any motion of the offended party for the dismissal of the criminal case, even if without objection of the accused, should first be referred to the prosecuting fiscal and only after hearing should the court exercise its exclusive authority to dismiss or continue with the prosecution of the case. The Court, therefore, after hearing and conferring with the fiscal, can dismiss the case if convinced that there is [no] reason to continue with the prosecution [of] the same. As in this case, the Court finds merit [in] the motion of the Public Prosecutor.[11] Aggrieved, petitioner moved for reconsideration of the said Order, arguing that the November 20, 2003 OP-QC resolution has not yet attained finality, considering that the same was the subject of a Petition for Review filed before the Department of Justice (DOJ).[12] The RTC deferred action on the said motion to await the resolution of the DOJ.[13] On June 26, 2006, the Secretary of Justice promulgated his resolution reversing and setting aside the OP-QCs November 20, 2003 resolution, and directing the latter to refile the earlier Information for libel.[14] On October 24, 2006, the RTC issued its first assailed Order granting petitioners motion for reconsideration, conformably with the resolution of the DOJ Secretary, thus: Considering the findings of the Department of Justice reversing the resolution of the City Prosecutor, the Court gives favorable action to the Motion for Reconsideration. In the same manner as discussed in arriving at its assailed order dated 17 March 2004, the Court gives more leeway to the Public Prosecutor in determining whether it has to continue or stop prosecuting a case. While the City Prosecutor has previously decided not to pursue further the case, the Secretary of Justice, however, through its resolution on the Petition for Review did not agree with him. The Court disagrees with the argument raised by the accused that double jeopardy sets in to the picture. The order of dismissal as well as the withdrawal of the Information was not yet final

because of the timely filing of the Motion for Reconsideration. The Court[,] therefore, can still set aside its order. Moreover, there is no refiling of the case nor the filing of a new one. The case filed remains the same and the order of dismissal was merely vacated because the Court finds the Motion for Reconsideration meritorious. WHEREFORE, finding the Motion for Reconsideration meritorious, the Order dated 17 March 2004 is hereby RECONSIDERED and SET ASIDE. Let the arraignment of accused Oscar Mapalo and pre-trial [of] the other accused be set on 06 December 2006 at 8:30 in the morning. SO ORDERED.[15] Respondents moved for reconsideration, but the motion was denied in the RTCs second assailed Order dated February 26, 2007.[16] Relentless, respondents elevated their predicament to the CA through a Petition for Certiorari under Rule 65 of the Rules of Court, arguing in the main that the RTC Orders violated their constitutional right against double jeopardy. Ruling of the CA The appellate court found the RTC to have gravely abused its discretion in ordering the reinstatement of the case. The CA annulled the impugned RTC Orders, ruling that all the elements of double jeopardy exist. There was a valid Information sufficient in form and substance filed before a court of competent jurisdiction to which respondents had pleaded, and that the termination of the case was not expressly consented to by respondents; hence, the same could not be revived or refiled without transgressing respondents right against double jeopardy. The CA further found that the DOJ Secretary improperly took cognizance of the Petition for Review because DOJ Department Order No. 223 mandates that no appeal shall be entertained if the accused has already been arraigned or, if the arraignment took place during the pendency of the appeal, the same shall be dismissed.[17] Petitioner interposed the instant appeal when his motion for reconsideration of the CA Decision was denied.[18] The Issues Petitioner ascribes the following errors to the CA: a. The Honorable Court of Appeals erred in finding that there was Double Jeopardy, specifically on the alleged existence of the requisites to constitute Double Jeopardy; b. The Honorable Court of Appeals failed to consider the fact that there was NO refiling of the case nor the filing of a new one in arriving [at] its conclusion that Double Jeopardy sets in to the picture;

c. The Honorable Court of Appeals erred in finding that there was 1.) a valid termination of the case on the basis of the Order of the Trial Court dated 17 March 2004, and allegedly 2.) without the express consent of the respondents.[19] The assigned errors will be subsumed into this issue: Whether there was a valid termination of the case so as to usher in the impregnable wall of double jeopardy. Our Ruling The petition is impressed with merit. Well-entrenched is the rule that once a case is filed with the court, any disposition of it rests on the sound discretion of the court. In thus resolving a motion to dismiss a case or to withdraw an Information, the trial court should not rely solely and merely on the findings of the public prosecutor or the Secretary of Justice.[20] It is the court bounden duty to assess independently the merits of the motion, and this assessment must be embodied in a written order disposing of the motion.[21] While the recommendation of the prosecutor or the ruling of the Secretary of Justice is persuasive, it is not binding on courts. In this case, it is obvious from the March 17, 2004 Order of the RTC, dismissing the criminal case, that the RTC judge failed to make his own determination of whether or not there was a prima facie case to hold respondents for trial. He failed to make an independent evaluation or assessment of the merits of the case. The RTC judge blindly relied on the manifestation and recommendation of the prosecutor when he should have been more circumspect and judicious in resolving the Motion to Dismiss and Withdraw Information especially so when the prosecution appeared to be uncertain, undecided, and irresolute on whether to indict respondents. The same holds true with respect to the October 24, 2006 Order, which reinstated the case. The RTC judge failed to make a separate evaluation and merely awaited the resolution of the DOJ Secretary. This is evident from the general tenor of the Order and highlighted in the following portion thereof: As discussed during the hearing of the Motion for Reconsideration, the Court will resolve it depending on the outcome of the Petition for Review. Considering the findings of the Department of Justice reversing the resolution of the City Prosecutor, the Court gives favorable action to the Motion for Reconsideration.[22] By relying solely on the manifestation of the public prosecutor and the resolution of the DOJ Secretary, the trial court abdicated its judicial power and refused to perform a positive duty enjoined by law. The said Orders were thus stained with grave abuse of discretion and violated the complainants right to due process. They were void, had no legal standing, and produced no effect whatsoever.[23] This Court must therefore remand the case to the RTC, so that the latter can rule on the merits of the case to determine if a prima facie case exists and consequently resolve the Motion to Dismiss and Withdraw Information anew.

It is beyond cavil that double jeopardy did not set in. Double jeopardy exists when the following requisites are present: (1) a first jeopardy attached prior to the second; (2) the first jeopardy has been validly terminated; and (3) a second jeopardy is for the same offense as in the first. A first jeopardy attaches only (a) after a valid indictment; (b) before a competent court; (c) after arraignment; (d) when a valid plea has been entered; and (e) when the accused has been acquitted or convicted, or the case dismissed or otherwise terminated without his express consent.[24] Since we have held that the March 17, 2004 Order granting the motion to dismiss was committed with grave abuse of discretion, then respondents were not acquitted nor was there a valid and legal dismissal or termination of the case. Ergo, the fifth requisite which requires the conviction and acquittal of the accused, or the dismissal of the case without the approval of the accused, was not met. Thus, double jeopardy has not set in. WHEREFORE , the petition is hereby GIVEN DUE COURSE, and the assailed July 11, 2008 Decision and the November 4, 2008 Resolution of the Court of Appeals in CA-G.R. SP No. 99088, and the October 24, 2006 and the February 26, 2007 Orders of the Regional Trial Court of Quezon City, Branch 92, are hereby ANNULLED and SET ASIDE. The case is REMANDED to the Quezon City RTC, Branch 92, for evaluation on whether probable cause exists to hold respondents for trial. No costs. SO ORDERED. Carpio, J., Chairperson, Nachura,Peralta,Abad, and Mendoza, JJ., Concur.

ATTY. ALICE BONDOC, Petitioner,

ODCHIGUE-

G.R. No. 186652 Present: CORONA, C.J.,* CARPIO MORALES, Chairperson, BRION, BERSAMIN, and SERENO, JJ.

- versus -

TAN TIONG BIO A.K.A. HENRY TAN, Respondent.

Promulgated: October 6, 2010

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CARPIO MORALES, J.: Tan Tiong Bio (respondent) had fully paid the installment payments of a 683-squaremeter lot in the Manila Southwoods Residential Estates, a project of Fil-Estate Golf & Development, Inc. (Fil-Estate) in Carmona, Cavite, but Fil-Estate failed to deliver to him the title covering the lot, despite repeated demands. Fil-Estate also failed to heed the demand for the refund of the purchase price.30[1] Respondent, later learning that the lot sold to him was inexistent,31[2] filed a complaint for Estafa against Fil-Estate officials including its Corporate Secretary Atty. Alice OdchigueBondoc (petitioner) and other employees.32[3]

In her Counter-Affidavit, petitioner alleged that, inter alia,

xxxx 5. I had no participation at all in the acts or transactions alleged in the Complaint-Affidavit. As a Corporate Secretary, I have never been involved in the management and day-to-day operations of [Fil-Estate]. x x x x x x x. 7. x x x. [Herein respondent] alleges: The letter showed that the request was approved by [herein petitioner], provided that the transfer fee was paid, and that there be payment of full downpayment, with the balance payable in two years. 8) The handwritten approval and endorsement, however, are not mine. I have never transacted, either directly or indirectly, with Mrs. Ona or [herein respondent]. x x x33[4] (emphasis partly in the original, partly supplied; underscoring supplied)

On the basis of petitioners above-quoted allegations in her Counter-Affidavit, respondent filed a complaint for Perjury against petitioner, docketed as I.S. No. PSG 03-0711855 before the Pasig City Prosecutors Office, which dismissed it by Resolution of June 17, 200434[5] for insufficiency of evidence, and denied respondents Motion for Reconsideration.35[6]

On petition for review, the Department of Justice (DOJ), by Resolution of July 20, 2005 signed by the Chief State Prosecutor for the Secretary of Justice,36[7] motu proprio dismissed the petition on finding that there was no showing of any reversible error, following Section 12(c) of Department Circular No. 70 dated July 3, 2000 (National Prosecution Service [NPS] Rule on Appeal). Respondents motion for reconsideration having been denied37[8] by Resolution of January 23, 2006, he filed a petition for certiorari before the Court of Appeals which, by Decision of September 5, 2008,38[9] set aside the DOJ Secretarys Resolution, holding that it committed grave abuse of discretion in issuing its Resolution dismissing respondents petition for review without therein expressing clearly and distinctly the facts on which the dismissal was based, in violation of Section 14, Article VIII of the Constitution.39[10]

The appellate court went on to hold that the matter of disposing the petition outright is clearly delineated, not under Section 12 but, under Section 7 of the NPS Rule on Appeal which categorically directs the Secretary to dismiss outright an appeal or a petition for review filed after arraignment; and that under Section 7, the Secretary may dismiss the petition outright if he finds the same to be patently without merit, or manifestly intended for delay, or when the issues

raised are too unsubstantial to require consideration.40[11] Petitioners Motion for Reconsideration having been denied by the appellate court, she filed the present petition for review on certiorari.

Petitioner asserts that the requirement in Section 14, Article VIII of the Constitution applies only to decisions of courts of justice41[12]; that, citing Solid Homes, Inc. v. Laserna,42[13] the constitutional provision does not extend to decisions or rulings of executive departments such as the DOJ; and that Section 12(c) of the NPS Rule on Appeal allows the DOJ to dismiss a petition for review motu proprio, and the use of the word outright in the DOJ Resolution simply means altogether, entirely or openly.43[14]

In his Comment, respondent counters that the constitutional requirement is not limited to courts, citing Presidential Ad hoc Fact-Finding Committee on Behest Loans v. Desierto,44[15] as it extends to quasi-judicial and administrative bodies, as well as to preliminary investigations conducted by these tribunals.

Further, respondent, citing Adasa v. Abalos,45[16] argues that the DOJ muddled the distinction between Sections 7 and 12 of the NPS Rule on Appeal and that an outright dismissal is not allowed since the DOJ must set the reasons why it finds no reversible error46[17] in an assailed resolution.

The petition is impressed with merit. A preliminary investigation is not a quasi-judicial proceeding since the prosecutor in a preliminary investigation does not determine the guilt or innocence of the accused.47[18]

x x x [A prosecutor] does not exercise adjudication nor rule-making functions. Preliminary investigation is merely inquisitorial, and is often the only means of discovering the persons who may be reasonably charged [of] a crime and to enable the [prosecutor] to prepare his complaint or information. It is not a trial of the case on the merits and has no purpose except that of determining whether a crime has been committed and whether there is probable cause to believe that the accused is guilty thereof. While the [prosecutor] makes that determination, he cannot be said to be acting as a quasi-court, for it is the courts, ultimately, that pass judgment on the accused, not the [prosecutor].48[19] (emphasis and underscoring supplied)

A preliminary investigation thus partakes of an investigative or inquisitorial power for the sole purpose of obtaining information on what future action of a judicial nature may be taken.49[20] Balangauan v. Court of Appeals50[21] in fact iterates that even the action of the Secretary of Justice in reviewing a prosecutors order or resolution via appeal or petition for review cannot be considered a quasi-judicial proceeding since the DOJ is not a quasi-judicial body.51[22] Section 14, Article VIII of the Constitution does not thus extend to resolutions issued by the DOJ Secretary.

Respondent posits, however, that Balangauan finds no application in the present case for, as the Supreme Court stated, the DOJ rectified the shortness of its first resolution by issuing a lengthier one when it resolved [the therein] respondent[s] . . . motion for reconsideration.52[23] Respondents position fails.

Whether the DOJ in Balangauan issued an extended resolution in resolving the therein respondents motion for reconsideration is immaterial. The extended resolution did not detract from settling that the DOJ is not a quasi-judicial body. Respondents citation of Presidential Ad hoc Fact-Finding Committee on Behest Loans is misplaced as the Ombudsman dismissed the therein subject complaint prior to any

preliminary investigation. The Ombudsman merely evaluated the complaint pursuant to Section 2, Rule II of the Rules of Procedure of the Office of the Ombudsman which reads: SEC. 2. Evaluation.Upon evaluating the investigating officer shall recommend whether it may be: a) dismissed outright for want of palpable merit; b) referred to respondent for comment; c) indorsed to the proper government office or agency which has jurisdiction over the case; d) forwarded to the appropriate officer or official for fact-finding investigation; e) referred for administrative adjudication; or f) subjected to a preliminary investigation. (emphasis supplied) complaint, the

Respecting the action of the Secretary of Justice on respondents petition for review under Section 12 of the NPS Rule on Appeal, respondent posits that outright dismissal is not sanctioned thereunder but under Section 7. Respondents position similarly fails. That the DOJ Secretary used the word outright in dismissing respondents petition for review under Section 12 of the Rule which reads:

SEC. 12. Disposition of the appeal.The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds: xxxx (a) That there is no showing of any reversible error; x x x x (italics in the original; emphasis and underscoring supplied) does not dent his action. To be sure, the word outright was merely used in conjunction with the motu proprio action.

Section 7 has an altogether different set of grounds for the outright dismissal of a petition for review. These are (a) when the petition is patently without merit; (b) when the petition is

manifestly intended for delay; (c) when the issues raised therein are too unsubstantial to require consideration; and (d) when the accused has already been arraigned in court.53[24]

When the Secretary of Justice is convinced that a petition for review does not suffer any of the infirmities laid down in Section 7, it can decide what action to take (i.e., reverse, modify, affirm or dismiss the appeal altogether), conformably with Section 12. In other words, Sections 7 and 12 are part of a two-step approach in the DOJ Secretarys review power. As for respondents reliance on Adasa, it too fails for, unlike in the case of Adasa, herein petitioner has not been arraigned as in fact no Information has been filed against her.

In the absence of grave abuse of discretion on the part of a public prosecutor who alone determines the sufficiency of evidence that will establish probable cause in filing a criminal information,54[25] courts will not interfere with his findings; otherwise, courts would be swamped with petitions to review the exercise of discretion on his part each time a criminal complaint is dismissed or given due course.55[26]

WHEREFORE, the petition for review on certiorari is GRANTED. The assailed Decision of the Court of Appeals is REVERSED AND SET ASIDE and the Resolutions of July 20, 2005 and January 23, 2006 of the Secretary of Justice are REINSTATED.

SO ORDERED.

G.R. No. 147096 January 15, 2002 REPUBLIC OF THE PHILIPPINES, represented by NATIONAL TELECOMMUNICATIONS COMMISSION, petitioner, vs. EXPRESS TELECOMMUNICATION CO., INC. and BAYAN TELECOMMUNICATIONS CO., INC., respondents. x---------------------------------------------------------x G.R. No. 147210 January 15, 2002 BAYAN TELECOMMUNICATIONS (Bayantel), INC., petitioner, vs. EXPRESS TELECOMMUNICATION CO., INC. (Extelcom), respondent. YNARES-SANTIAGO, J.: On December 29, 1992, International Communications Corporation (now Bayan Telecommunications, Inc. or Bayantel) filed an application with the National Telecommunications Commission (NTC) for a Certificate of Public Convenience or Necessity (CPCN) to install, operate and maintain a digital Cellular Mobile Telephone System/Service (CMTS) with prayer for a Provisional Authority (PA). The application was docketed as NTC Case No. 92-486.1 Shortly thereafter, or on January 22, 1993, the NTC issued Memorandum Circular No. 4-1-93 directing all interested applicants for nationwide or regional CMTS to file their respective applications before the Commission on or before February 15, 1993, and deferring the acceptance of any application filed after said date until further orders.2 On May 6, 1993, and prior to the issuance of any notice of hearing by the NTC with respect to Bayantel's original application, Bayantel filed an urgent ex-parte motion to admit an amended application.3 On May 17, 1993, the notice of hearing issued by the NTC with respect to this amended application was published in the Manila Chronicle. Copies of the application as well as the notice of hearing were mailed to all affected parties. Subsequently, hearings were conducted on the amended application. But before Bayantel could complete the presentation of its evidence, the NTC issued an Order dated December 19, 1993 stating: In view of the recent grant of two (2) separate Provisional Authorities in favor of ISLACOM and GMCR, Inc., which resulted in the closing out of all available frequencies for the service being applied for by herein applicant, and in order that this case may not remain pending for an indefinite period of time, AS PRAYED FOR, let this case be, as it is, hereby ordered ARCHIVED without prejudice to its reinstatement if and when the requisite frequency becomes available. SO ORDERED.4

On June 18, 1998, the NTC issued Memorandum Circular No. 5-6-98 re-allocating five (5) megahertz (MHz) of the radio frequency spectrum for the expansion of CMTS networks. The reallocated 5 MHz were taken from the following bands: 1730-1732.5 / 1825-1827.5 MHz and 1732.5-1735 / 1827.5-1830 MHz.5 Likewise, on March 23, 1999, Memorandum Circular No. 3-3-99 was issued by the NTC reallocating an additional five (5) MHz frequencies for CMTS service, namely: 1735-1737.5 / 1830-1832.5 MHz; 1737.5-1740 / 1832.5-1835 MHz; 1740-1742.5 / 1835-1837.5 MHz; and 1742.5-1745 / 1837.5-1840 MHz.6 On May 17, 1999, Bayantel filed an Ex-Parte Motion to Revive Case,7 citing the availability of new frequency bands for CMTS operators, as provided for under Memorandum Circular No. 33-99. On February 1, 2000, the NTC granted BayanTel's motion to revive the latter's application and set the case for hearings on February 9, 10, 15, 17 and 22, 2000.8 The NTC noted that the application was ordered archived without prejudice to its reinstatement if and when the requisite frequency shall become available. Respondent Express Telecommunication Co., Inc. (Extelcom) filed in NTC Case No. 92-486 an Opposition (With Motion to Dismiss) praying for the dismissal of Bayantel's application.9 Extelcom argued that Bayantel's motion sought the revival of an archived application filed almost eight (8) years ago. Thus, the documentary evidence and the allegations of respondent Bayantel in this application are all outdated and should no longer be used as basis of the necessity for the proposed CMTS service. Moreover, Extelcom alleged that there was no public need for the service applied for by Bayantel as the present five CMTS operators --- Extelcom, Globe Telecom, Inc., Smart Communication, Inc., Pilipino Telephone Corporation, and Isla Communication Corporation, Inc. --- more than adequately addressed the market demand, and all are in the process of enhancing and expanding their respective networks based on recent technological developments. 1wphi1.nt Extelcom likewise contended that there were no available radio frequencies that could accommodate a new CMTS operator as the frequency bands allocated in NTC Memorandum Circular No. 3-3-99 were intended for and had in fact been applied for by the existing CMTS operators. The NTC, in its Memorandum Circular No. 4-1-93, declared it its policy to defer the acceptance of any application for CMTS. All the frequency bands allocated for CMTS use under the NTC's Memorandum Circular No. 5-11-88 and Memorandum Circular No. 2-12-92 had already been allocated to the existing CMTS operators. Finally, Extelcom pointed out that Bayantel is its substantial stockholder to the extent of about 46% of its outstanding capital stock, and Bayantel's application undermines the very operations of Extelcom. On March 13, 2000, Bayantel filed a Consolidated Reply/Comment,10 stating that the opposition was actually a motion seeking a reconsideration of the NTC Order reviving the instant application, and thus cannot dwell on the material allegations or the merits of the case. Furthermore, Extelcom cannot claim that frequencies were not available inasmuch as the allocation and assignment thereof rest solely on the discretion of the NTC. In the meantime, the NTC issued on March 9, 2000 Memorandum Circular No. 9-3-2000, reallocating the following radio frequency bands for assignment to existing CMTS operators and to public telecommunication entities which shall be authorized to install, operate and maintain

CMTS networks, namely: 1745-1750MHz / 1840-1845MHz; 1750-1775MHz / 1845-1850MHz; 1765-1770MHz / 1860-1865MHz; and 1770-1775MHz / 1865-1870MHz.11 On May 3, 2000, the NTC issued an Order granting in favor of Bayantel a provisional authority to operate CMTS service.12 The Order stated in pertinent part: On the issue of legal capacity on the part of Bayantel, this Commission has already taken notice of the change in name of International Communications Corporation to Bayan Telecommunications, Inc. Thus, in the Decision entered in NTC Case No. 93284/94-200 dated 19 July 1999, it was recognized that Bayan Telecommunications, Inc., was formerly named International Communications Corp. Bayantel and ICC Telecoms, Inc. are one and the same entity, and it necessarily follows that what legal capacity ICC Telecoms has or has acquired is also the legal capacity that Bayantel possesses. On the allegation that the Commission has committed an error in allowing the revival of the instant application, it appears that the Order dated 14 December 1993 archiving the same was anchored on the non-availability of frequencies for CMTS. In the same Order, it was expressly stated that the archival hereof, shall be without prejudice to its reinstatement "if and when the requisite frequency becomes available." Inherent in the said Order is the prerogative of the Commission in reviving the same, subject to prevailing conditions. The Order of 1 February 2001, cited the availability of frequencies for CMTS, and based thereon, the Commission, exercising its prerogative, revived and reinstated the instant application. The fact that the motion for revival hereof was made ex-parte by the applicant is of no moment, so long as the oppositors are given the opportunity to be later heard and present the merits of their respective oppositions in the proceedings. On the allegation that the instant application is already obsolete and overtaken by developments, the issue is whether applicant has the legal, financial and technical capacity to undertake the proposed project. The determination of such capacity lies solely within the discretion of the Commission, through its applicable rules and regulations. At any rate, the oppositors are not precluded from showing evidence disputing such capacity in the proceedings at hand. On the alleged non-availability of frequencies for the proposed service in view of the pending applications for the same, the Commission takes note that it has issued Memorandum Circular 9-3-2000, allocating additional frequencies for CMTS. The eligibility of existing operators who applied for additional frequencies shall be treated and resolved in their respective applications, and are not in issue in the case at hand. Accordingly, the Motions for Reconsideration filed by SMARTCOM and GLOBE TELECOMS/ISLACOM and the Motion to Dismiss filed by EXTELCOM are hereby DENIED for lack of merit.13 The grant of the provisional authority was anchored on the following findings: COMMENTS: 1. Due to the operational mergers between Smart Communications, Inc. and Pilipino Telephone Corporation (Piltel) and between Globe Telecom, Inc. (Globe) and Isla Communications, Inc. (Islacom), free and effective competition in the CMTS market is

threatened. The fifth operator, Extelcom, cannot provide good competition in as much as it provides service using the analog AMPS. The GSM system dominates the market. 2. There are at present two applicants for the assignment of the frequencies in the 1.7 Ghz and 1.8 Ghz allocated to CMTS, namely Globe and Extelcom. Based on the number of subscribers Extelcom has, there appears to be no congestion in its network - a condition that is necessary for an applicant to be assigned additional frequencies. Globe has yet to prove that there is congestion in its network considering its operational merger with Islacom. 3. Based on the reports submitted to the Commission, 48% of the total number of cities and municipalities are still without telephone service despite the more than 3 million installed lines waiting to be subscribed. CONCLUSIONS: 1. To ensure effective competition in the CMTS market considering the operational merger of some of the CMTS operators, new CMTS operators must be allowed to provide the service. 2. The re-allocated frequencies for CMTS of 3 blocks of 5 Mhz x 2 is sufficient for the number of applicants should the applicants be qualified. 3. There is a need to provide service to some or all of the remaining cities and municipalities without telephone service. 4. The submitted documents are sufficient to determine compliance to the technical requirements. The applicant can be directed to submit details such as channeling plans, exact locations of cell sites, etc. as the project implementation progresses, actual area coverage ascertained and traffic data are made available. Applicant appears to be technically qualified to undertake the proposed project and offer the proposed service. IN VIEW OF THE FOREGOING and considering that there is prima facie evidence to show that Applicant is legally, technically and financially qualified and that the proposed service is technically feasible and economically viable, in the interest of public service, and in order to facilitate the development of telecommunications services in all areas of the country, as well as to ensure healthy competition among authorized CMTS providers, let a PROVISIONAL AUTHORITY (P.A.) be issued to Applicant BAYAN TELECOMMUNICATIONS, INC. authorizing it to construct, install, operate and maintain a Nationwide Cellular Mobile Telephone Systems (CMTS), subject to the following terms and conditions without prejudice to a final decision after completion of the hearing which shall be called within thirty (30) days from grant of authority, in accordance with Section 3, Rule 15, Part IV of the Commission's Rules of Practice and Procedure. xxx.14 Extelcom filed with the Court of Appeals a petition for certiorari and prohibition,15 docketed as CA-G.R. SP No. 58893, seeking the annulment of the Order reviving the application of Bayantel, the Order granting Bayantel a provisional authority to construct, install, operate and maintain a nationwide CMTS, and Memorandum Circular No. 9-3-2000 allocating frequency bands to new public telecommunication entities which are authorized to install, operate and maintain CMTS.

On September 13, 2000, the Court of Appeals rendered the assailed Decision,16 the dispositive portion of which reads: WHEREFORE, the writs of certiorari and prohibition prayed for are GRANTED. The Orders of public respondent dated February 1, 2000 and May 3, 2000 in NTC Case No. 92-486 are hereby ANNULLED and SET ASIDE and the Amended Application of respondent Bayantel is DISMISSED without prejudice to the filing of a new CMTS application. The writ of preliminary injunction issued under our Resolution dated August 15, 2000, restraining and enjoining the respondents from enforcing the Orders dated February 1, 2000 and May 3, 2000 in the said NTC case is hereby made permanent. The Motion for Reconsideration of respondent Bayantel dated August 28, 2000 is denied for lack of merit. SO ORDERED.17 Bayantel filed a motion for reconsideration of the above decision.18 The NTC, represented by the Office of the Solicitor General (OSG), also filed its own motion for reconsideration.19 On the other hand, Extelcom filed a Motion for Partial Reconsideration, praying that NTC Memorandum Circular No. 9-3-2000 be also declared null and void.20 On February 9, 2001, the Court of Appeals issued the assailed Resolution denying all of the motions for reconsideration of the parties for lack of merit.21 Hence, the NTC filed the instant petition for review on certiorari, docketed as G.R. No. 147096, raising the following issues for resolution of this Court: A. Whether or not the Order dated February 1, 2000 of the petitioner which revived the application of respondent Bayantel in NTC Case No. 92-486 violated respondent Extelcom's right to procedural due process of law; B. Whether or not the Order dated May 3, 2000 of the petitioner granting respondent Bayantel a provisional authority to operate a CMTS is in substantial compliance with NTC Rules of Practice and Procedure and Memorandum Circular No. 9-14-90 dated September 4, 1990.22 Subsequently, Bayantel also filed its petition for review, docketed as G.R. No. 147210, assigning the following errors: I. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS INTERPRETATION OF THE PRINCIPLE OF "EXHAUSTION OF ADMINISTRATIVE REMEDIES" WHEN IT FAILED TO DISMISS HEREIN RESPONDENT'S PETITION FOR CERTIORARI DESPITE ITS FAILURE TO FILE A MOTION FOR RECONSIDERATION. II. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS FINDING THAT THE REVIVAL OF NTC CASE NO. 92-486 ANCHORED ON A EX-PARTE MOTION TO REVIVE CASE WAS TANTAMOUNT TO GRAVE ABUSE OF DISCRETION ON THE PART OF THE NTC. III. THE COURT OF APPEALS SERIOUSLY ERRED WHEN IT DENIED THE MANDATE OF THE NTC AS THE AGENCY OF GOVERNMENT WITH THE SOLE

DISCRETION REGARDING ALLOCATION OF FREQUENCY BAND TO TELECOMMUNICATIONS ENTITIES. IV. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS INTERPRETATION OF THE LEGAL PRINCIPLE THAT JURISDICTION ONCE ACQUIRED CANNOT BE LOST WHEN IT DECLARED THAT THE ARCHIVED APPLICATION SHOULD BE DEEMED AS A NEW APPLICATION IN VIEW OF THE SUBSTANTIAL CHANGE IN THE CIRCUMSTANCES ALLEGED IN ITS AMENDMENT APPLICATION. V. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE ARCHIVING OF THE BAYANTEL APPLICATION WAS A VALID ACT ON THE PART OF THE NTC EVEN IN THE ABSENCE OF A SPECIFIC RULE ON ARCHIVING OF CASES SINCE RULES OF PROCEDURE ARE, AS A MATTER OF COURSE, LIBERALLY CONSTRUED IN PROCEEDINGS BEFORE ADMINISTRATIVE BODIES AND SHOULD GIVE WAY TO THE GREATER HIERARCHY OF PUBLIC WELFARE AND PUBLIC INTEREST. VI. CONTRARY TO THE FINDING OF THE COURT OF APPEALS, THE ARCHIVING OF BAYANTEL'S APPLICATION WAS NOT VIOLATIVE OF THE SUMMARY NATURE OF THE PROCEEDINGS IN THE NTC UNDER SEC. 3, RULE 1 OF THE NTC REVISED RULES OF PROCEDURE. VII. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS FINDING THAT THE ARCHIVING OF BAYANTEL'S APPLICATION WAS VIOLATIVE OF THE ALLEGED DECLARED POLICY OF THE GOVERNMENT ON THE TRANSPARENCY AND FAIRNESS OF ADMINISTRATIVE PROCESS IN THE NTC AS LAID DOWN IN SEC 4(1) OF R.A. NO. 7925. VIII. THE COURT OF APPEALS SERIOUSLY ERRED IN ITS FINDING THAT THE NTC VIOLATED THE PROVISIONS OF THE CONSTITUTION PERTAINING TO DUE PROCESS OF LAW. IX. THE COURT OF APPEALS SERIOUSLY ERRED IN DECLARING THAT THE MAY 3, 2000 ORDER GRANTING BAYANTEL A PROVISIONAL AUTHORITY SHOULD BE SET ASIDE AND REVERSED. i. Contrary to the finding of the Court of Appeals, there was no violation of the NTC Rule that the legal, technical, financial and economic documentations in support of the prayer for provisional authority should first be submitted. ii. Contrary to the finding of the Court of Appeals, there was no violation of Sec. 3, Rule 15 of the NTC Rules of Practice and Procedure that a motion must first be filed before a provisional authority could be issued. iii. Contrary to the finding of the Court of Appeals that a plea for provisional authority necessitates a notice and hearing, the very rule cited by the petitioner (Section 5, Rule 4 of the NTC Rules of Practice and Procedure) provides otherwise. iv. Contrary to the finding of the Court of Appeals, urgent public need is not the only basis for the grant of a provisional authority to an applicant;

v. Contrary to the finding of the Court of Appeals, there was no violation of the constitutional provision on the right of the public to information when the Common Carrier Authorization Department (CCAD) prepared its evaluation report.23 Considering the identity of the matters involved, this Court resolved to consolidate the two petitions.24 At the outset, it is well to discuss the nature and functions of the NTC, and analyze its powers and authority as well as the laws, rules and regulations that govern its existence and operations. The NTC was created pursuant to Executive Order No. 546, promulgated on July 23, 1979. It assumed the functions formerly assigned to the Board of Communications and the Telecommunications Control Bureau, which were both abolished under the said Executive Order. Previously, the NTC's functions were merely those of the defunct Public Service Commission (PSC), created under Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act, considering that the Board of Communications was the successor-ininterest of the PSC. Under Executive Order No. 125-A, issued in April 1987, the NTC became an attached agency of the Department of Transportation and Communications. In the regulatory telecommunications industry, the NTC has the sole authority to issue Certificates of Public Convenience and Necessity (CPCN) for the installation, operation, and maintenance of communications facilities and services, radio communications systems, telephone and telegraph systems. Such power includes the authority to determine the areas of operations of applicants for telecommunications services. Specifically, Section 16 of the Public Service Act authorizes the then PSC, upon notice and hearing, to issue Certificates of Public Convenience for the operation of public services within the Philippines "whenever the Commission finds that the operation of the public service proposed and the authorization to do business will promote the public interests in a proper and suitable manner."25 The procedure governing the issuance of such authorizations is set forth in Section 29 of the said Act, the pertinent portion of which states: All hearings and investigations before the Commission shall be governed by rules adopted by the Commission, and in the conduct thereof, the Commission shall not be bound by the technical rules of legal evidence. xxx. In granting Bayantel the provisional authority to operate a CMTS, the NTC applied Rule 15, Section 3 of its 1978 Rules of Practice and Procedure, which provides: Sec. 3. Provisional Relief. --- Upon the filing of an application, complaint or petition or at any stage thereafter, the Board may grant on motion of the pleader or on its own initiative, the relief prayed for, based on the pleading, together with the affidavits and supporting documents attached thereto, without prejudice to a final decision after completion of the hearing which shall be called within thirty (30) days from grant of authority asked for. (underscoring ours) Respondent Extelcom, however, contends that the NTC should have applied the Revised Rules which were filed with the Office of the National Administrative Register on February 3, 1993. These Revised Rules deleted the phrase "on its own initiative;" accordingly, a provisional authority may be issued only upon filing of the proper motion before the Commission.

In answer to this argument, the NTC, through the Secretary of the Commission, issued a certification to the effect that inasmuch as the 1993 Revised Rules have not been published in a newspaper of general circulation, the NTC has been applying the 1978 Rules. The absence of publication, coupled with the certification by the Commissioner of the NTC stating that the NTC was still governed by the 1978 Rules, clearly indicate that the 1993 Revised Rules have not taken effect at the time of the grant of the provisional authority to Bayantel. The fact that the 1993 Revised Rules were filed with the UP Law Center on February 3, 1993 is of no moment. There is nothing in the Administrative Code of 1987 which implies that the filing of the rules with the UP Law Center is the operative act that gives the rules force and effect. Book VII, Chapter 2, Section 3 thereof merely states: Filing. --- (1) Every agency shall file with the University of the Philippines Law Center three (3) certified copes of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months from the date shall not thereafter be the basis of any sanction against any party or persons. (2) The records officer of the agency, or his equivalent functionary, shall carry out the requirements of this section under pain or disciplinary action. (3) A permanent register of all rules shall be kept by the issuing agency and shall be open to public inspection. The National Administrative Register is merely a bulletin of codified rules and it is furnished only to the Office of the President, Congress, all appellate courts, the National Library, other public offices or agencies as the Congress may select, and to other persons at a price sufficient to cover publication and mailing or distribution costs.26 In a similar case, we held: This does not imply however, that the subject Administrative Order is a valid exercise of such quasi-legislative power. The original Administrative Order issued on August 30, 1989, under which the respondents filed their applications for importations, was not published in the Official Gazette or in a newspaper of general circulation. The questioned Administrative Order, legally, until it is published, is invalid within the context of Article 2 of Civil Code, which reads: "Article 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette (or in a newspaper of general circulation in the Philippines), unless it is otherwise provided. x x x" The fact that the amendments to Administrative Order No. SOCPEC 89-08-01 were filed with, and published by the UP Law Center in the National Administrative Register, does not cure the defect related to the effectivity of the Administrative Order. This Court, in Taada vs. Tuvera (G.R. No. L-63915, December 29, 1986, 146 SCRA 446) stated, thus: "We hold therefore that all statutes, including those of local application and private laws, shall be published as a condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity is fixed by the legislature.

Covered by this rule are presidential decrees and executive orders promulgated by the President in the exercise of legislative power or, at present, directly conferred by the Constitution. Administrative Rules and Regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation. Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties. xxx We agree that the publication must be in full or it is no publication at all since its purpose is to inform the public of the contents of the laws." The Administrative Order under consideration is one of those issuances which should be published for its effectivity, since its purpose is to enforce and implement an existing law pursuant to a valid delegation, i.e., P.D. 1071, in relation to LOI 444 and EO 133.27 Thus, publication in the Official Gazette or a newspaper of general circulation is a condition sine qua non before statutes, rules or regulations can take effect. This is explicit from Executive Order No. 200, which repealed Article 2 of the Civil Code, and which states that: Laws shall take effect after fifteen days following the completion of their publication either in the Official Gazette or in a newspaper of general circulation in the Philippines, unless it is otherwise provided.28 The Rules of Practice and Procedure of the NTC, which implements Section 29 of the Public Service Act (C.A. 146, as amended), fall squarely within the scope of these laws, as explicitly mentioned in the case Taada v. Tuvera.29 Our pronouncement in Taada vs. Tuvera is clear and categorical. Administrative rules and regulations must be published if their purpose is to enforce or implement existing law pursuant to a valid delegation. The only exceptions are interpretative regulations, those merely internal in nature, or those so-called letters of instructions issued by administrative superiors concerning the rules and guidelines to be followed by their subordinates in the performance of their duties.30 Hence, the 1993 Revised Rules should be published in the Official Gazette or in a newspaper of general circulation before it can take effect. Even the 1993 Revised Rules itself mandates that said Rules shall take effect only after their publication in a newspaper of general circulation.31 In the absence of such publication, therefore, it is the 1978 Rules that governs. In any event, regardless of whether the 1978 Rules or the 1993 Revised Rules should apply, the records show that the amended application filed by Bayantel in fact included a motion for the issuance of a provisional authority. Hence, it cannot be said that the NTC granted the provisional authority motu proprio. The Court of Appeals, therefore, erred when it found that the

NTC issued its Order of May 3, 2000 on its own initiative. This much is acknowledged in the Decision of the Court of Appeals: As prayer, ICC asked for the immediate grant of provisional authority to construct, install, maintain and operate the subject service and to charge the proposed rates and after due notice and hearing, approve the instant application and grant the corresponding certificate of public convenience and necessity.32 The Court of Appeals also erred when it declared that the NTC's Order archiving Bayantel's application was null and void. The archiving of cases is a widely accepted measure designed to shelve cases in which no immediate action is expected but where no grounds exist for their outright dismissal, albeit without prejudice. It saves the petitioner or applicant from the added trouble and expense of re-filing a dismissed case. Under this scheme, an inactive case is kept alive but held in abeyance until the situation obtains wherein action thereon can be taken. In the case at bar, the said application was ordered archived because of lack of available frequencies at the time, and made subject to reinstatement upon availability of the requisite frequency. To be sure, there was nothing irregular in the revival of the application after the condition therefor was fulfilled. While, as held by the Court of Appeals, there are no clear provisions in the Rules of the NTC which expressly allow the archiving of any application, this recourse may be justified under Rule 1, Section 2 of the 1978 Rules, which states: Sec. 2. Scope.--- These rules govern pleadings, practice and procedure before the Board of Communications (now NTC) in all matters of hearing, investigation and proceedings within the jurisdiction of the Board. However, in the broader interest of justice and in order to best serve the public interest, the Board may, in any particular matter, except it from these rules and apply such suitable procedure to improve the service in the transaction of the public business. (underscoring ours) The Court of Appeals ruled that the NTC committed grave abuse of discretion when it revived Bayantel's application based on an ex-parte motion. In this regard, the pertinent provisions of the NTC Rules: Sec. 5. Ex-parte Motions. --- Except for motions for provisional authorization of proposed services and increase of rates, ex-parte motions shall be acted upon by the Board only upon showing of urgent necessity therefor and the right of the opposing party is not substantially impaired.33 Thus, in cases which do not involve either an application for rate increase or an application for a provisional authority, the NTC may entertain ex-parte motions only where there is an urgent necessity to do so and no rights of the opposing parties are impaired.1wphi1.nt The Court of Appeals ruled that there was a violation of the fundamental right of Extelcom to due process when it was not afforded the opportunity to question the motion for the revival of the application. However, it must be noted that said Order referred to a simple revival of the archived application of Bayantel in NTC Case No. 92-426. At this stage, it cannot be said that Extelcom's right to procedural due process was prejudiced. It will still have the opportunity to be heard during the full-blown adversarial hearings that will follow. In fact, the records show that

the NTC has scheduled several hearing dates for this purpose, at which all interested parties shall be allowed to register their opposition. We have ruled that there is no denial of due process where full-blown adversarial proceedings are conducted before an administrative body.34 With Extelcom having fully participated in the proceedings, and indeed, given the opportunity to file its opposition to the application, there was clearly no denial of its right to due process. In Zaldivar vs. Sandiganbayan (166 SCRA 316 [1988]), we held that the right to be heard does not only refer to the right to present verbal arguments in court. A party may also be heard through his pleadings. where opportunity to be heard is accorded either through oral arguments or pleadings, there is no denial of procedural due process. As reiterated in National Semiconductor (HK) Distribution, Ltd. vs. NLRC (G.R. No. 123520, June 26, 1998), the essence of due process is simply an opportunity to be heard, or as applied to administrative proceedings, an opportunity to explain one's side. Hence, in Navarro III vs. Damaso (246 SCRA 260 [1995]), we held that a formal or trial-type hearing is not at all times and not in all instances essential. Plainly, petitioner was not denied due process.35 Extelcom had already entered its appearance as a party and filed its opposition to the application. It was neither precluded nor barred from participating in the hearings thereon. Indeed, nothing, not even the Order reviving the application, bars or prevents Extelcom and the other oppositors from participating in the hearings and adducing evidence in support of their respective oppositions. The motion to revive could not have possibly caused prejudice to Extelcom since the motion only sought the revival of the application. It was merely a preliminary step towards the resumption of the hearings on the application of Bayantel. The latter will still have to prove its capability to undertake the proposed CMTS. Indeed, in its Order dated February 1, 2000, the NTC set several hearing dates precisely intended for the presentation of evidence on Bayantel's capability and qualification. Notice of these hearings were sent to all parties concerned, including Extelcom. As regards the changes in the personal circumstances of Bayantel, the same may be ventilated at the hearings during Bayantel's presentation of evidence. In fact, Extelcom was able to raise its arguments on this matter in the Opposition (With Motion to Dismiss) anent the re-opening and re-instatement of the application of Bayantel. Extelcom was thus heard on this particular point. Likewise, the requirements of notice and publication of the application is no longer necessary inasmuch as the application is a mere revival of an application which has already been published earlier. At any rate, the records show that all of the five (5) CMTS operators in the country were duly notified and were allowed to raise their respective oppositions to Bayantel's application through the NTC's Order dated February 1, 2000. It should be borne in mind that among the declared national policies under Republic Act No. 7925, otherwise known as the Public Telecommunications Policy Act of the Philippines, is the healthy competition among telecommunications carriers, to wit: A healthy competitive environment shall be fostered, one in which telecommunications carriers are free to make business decisions and to interact with one another in providing telecommunications services, with the end in view of encouraging their financial viability while maintaining affordable rates.36

The NTC is clothed with sufficient discretion to act on matters solely within its competence. Clearly, the need for a healthy competitive environment in telecommunications is sufficient impetus for the NTC to consider all those applicants who are willing to offer competition, develop the market and provide the environment necessary for greater public service. This was the intention that came to light with the issuance of Memorandum Circular 9-3-2000, allocating new frequency bands for use of CMTS. This memorandum circular enumerated the conditions prevailing and the reasons which necessitated its issuance as follows: - the international accounting rates are rapidly declining, threatening the subsidy to the local exchange service as mandated in EO 109 and RA 7925; - the public telecommunications entities which were obligated to install, operate and maintain local exchange network have performed their obligations in varying degrees; - after more than three (3) years from the performance of the obligations only 52% of the total number of cities and municipalities are provided with local telephone service. - there are mergers and consolidations among the existing cellular mobile telephone service (CMTS) providers threatening the efficiency of competition; - there is a need to hasten the installation of local exchange lines in unserved areas; - there are existing CMTS operators which are experiencing congestion in the network resulting to low grade of service; - the consumers/customers shall be given the freedom to choose CMTS operators from which they could get the service.37 Clearly spelled out is the need to provide enhanced competition and the requirement for more landlines and telecommunications facilities in unserved areas in the country. On both scores, therefore, there was sufficient showing that the NTC acted well within its jurisdiction and in pursuance of its avowed duties when it allowed the revival of Bayantel's application. We now come to the issue of exhaustion of administrative remedies. The rule is well-entrenched that a party must exhaust all administrative remedies before resorting to the courts. The premature invocation of the intervention of the court is fatal to one's cause of action. This rule would not only give the administrative agency an opportunity to decide the matter by itself correctly, but would also prevent the unnecessary and premature resort to courts.38 In the case of Lopez v. City of Manila,39 we held: As a general rule, where the law provides for the remedies against the action of an administrative board, body or officer, relief to courts can be sought only after exhausting all remedies provided. The reason rests upon the presumption that the administrative body, if given the chance to correct its mistake or error, may amend its decision on a given matter and decide it properly. Therefore, where a remedy is available within the administrative machinery, this should be resorted to before resort can be made to the courts, not only to give the administrative agency the opportunity to decide the matter by itself correctly, but also to prevent unnecessary and premature resort to courts.

Clearly, Extelcom violated the rule on exhaustion of administrative remedies when it went directly to the Court of Appeals on a petition for certiorari and prohibition from the Order of the NTC dated May 3, 2000, without first filing a motion for reconsideration. It is well-settled that the filing of a motion for reconsideration is a prerequisite to the filing of a special civil action for certiorari. The general rule is that, in order to give the lower court the opportunity to correct itself, a motion for reconsideration is a prerequisite to certiorari. It also basic that petitioner must exhaust all other available remedies before resorting to certiorari. This rule, however, is subject to certain exceptions such as any of the following: (1) the issues raised are purely legal in nature, (2) public interest is involved, (3) extreme urgency is obvious or (4) special circumstances warrant immediate or more direct action.40 This case does not fall under any of the recognized exceptions to this rule. Although the Order of the NTC dated May 3, 2000 granting provisional authority to Bayantel was immediately executory, it did not preclude the filing of a motion for reconsideration. Under the NTC Rules, a party adversely affected by a decision, order, ruling or resolution may within fifteen (15) days file a motion for reconsideration. That the Order of the NTC became immediately executory does not mean that the remedy of filing a motion for reconsideration is foreclosed to the petitioner.41 Furthermore, Extelcom does not enjoy the grant of any vested interest on the right to render a public service. The Constitution is quite emphatic that the operation of a public utility shall not be exclusive. Thus: No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted to citizens of the Philippines or to corporations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens, nor shall such franchise, certificate or authorization be exclusive in character or for a longer period than fifty years. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment, alteraion, or repeal by the Congress when the common good so requires. xxx xxx xxx.42 In Radio Communications of the Phils., Inc. v. National Telecommunications Commission,43 we held: It is well within the powers of the public respondent to authorize the installation by the private respondent network of radio communications systems in Catarman, Samar and San Jose, Mindoro. Under the circumstances, the mere fact that the petitioner possesses a franchise to put up and operate a radio communications system in certain areas is not an insuperable obstacle to the public respondent's issuing the proper certificate to an applicant desiring to extend the same services to those areas. The Constitution mandates that a franchise cannot be exclusive in nature nor can a franchise be granted except that it must be subject to amendment, alteration, or even repeal by the legislature when the common good so requires. (Art. XII, sec. 11 of the 1986 Constitution). There is an express provision in the petitioner's franchise which provides compliance with the above mandate (RA 2036, sec. 15). Even in the provisional authority granted to Extelcom, it is expressly stated that such authority is not exclusive. Thus, the Court of Appeals erred when it gave due course to Extelcom's petition and ruled that it constitutes an exception to the rule on exhaustion of administrative remedies.

Also, the Court of Appeals erred in annulling the Order of the NTC dated May 3, 2000, granting Bayantel a provisional authority to install, operate and maintain CMTS. The general rule is that purely administrative and discretionary functions may not be interfered with by the courts. Thus, in Lacuesta v. Herrera,44 it was held: xxx (T)he powers granted to the Secretary of Agriculture and Commerce (natural resources) by law regarding the disposition of public lands such as granting of licenses, permits, leases and contracts, or approving, rejecting, reinstating, or canceling applications, are all executive and administrative in nature. It is a well recognized principle that purely administrative and discretionary functions may not be interfered with by the courts. (Coloso vs. Board of Accountancy, G.R. No. L-5750, April 20, 1953) In general, courts have no supervising power over the proceedings and actions of the administrative departments of the government. This is generally true with respect to acts involving the exercise of judgement or discretion and findings of fact. (54 Am. Jur. 558559) xxx. The established exception to the rule is where the issuing authority has gone beyond its statutory authority, exercised unconstitutional powers or clearly acted arbitrarily and without regard to his duty or with grave abuse of discretion.45 None of these obtains in the case at bar. Moreover, in petitions for certiorari, evidentiary matters or matters of fact raised in the court below are not proper grounds nor may such be ruled upon in the proceedings. As held in National Federation of Labor v. NLRC:46 At the outset, it should be noted that a petition for certiorari under Rule 65 of the Rules of Court will prosper only if there is a showing of grave abuse of discretion or an act without or in excess of jurisdiction on the part of the National Labor Relations Commission. It does not include an inquiry as to the correctness of the evaluation of evidence which was the basis of the labor official or officer in determining his conclusion. It is not for this Court to re-examine conflicting evidence, re-evaluate the credibility of witnesses nor substitute the findings of fact of an administrative tribunal which has gained expertise in its special field. Considering that the findings of fact of the labor arbiter and the NLRC are supported by evidence on record, the same must be accorded due respect and finality. This Court has consistently held that the courts will not interfere in matters which are addressed to the sound discretion of the government agency entrusted with the regulation of activities coming under the special and technical training and knowledge of such agency.47 It has also been held that the exercise of administrative discretion is a policy decision and a matter that can best be discharged by the government agency concerned, and not by the courts.48 In Villanueva v. Court of Appeals,49 it was held that findings of fact which are supported by evidence and the conclusion of experts should not be disturbed. This was reiterated in Metro Transit Organization, Inc. v. National Labor Relations Commission,50 wherein it was ruled that factual findings of quasi-judicial bodies which have acquired expertise because their jurisdiction is confined to specific matters are generally accorded not only respect but even finality and are binding even upon the Supreme Court if they are supported by substantial evidence.1wphi1.nt Administrative agencies are given a wide latitude in the evaluation of evidence and in the exercise of its adjudicative functions. This latitude includes the authority to take judicial notice of facts within its special competence.

In the case at bar, we find no reason to disturb the factual findings of the NTC which formed the basis for awarding the provisional authority to Bayantel. As found by the NTC, Bayantel has been granted several provisional and permanent authorities before to operate various telecommunications services.51 Indeed, it was established that Bayantel was the first company to comply with its obligation to install local exchange lines pursuant to E.O. 109 and R.A. 7925. In recognition of the same, the provisional authority awarded in favor of Bayantel to operate Local Exchange Services in Quezon City, Malabon, Valenzuela and the entire Bicol region was made permanent and a CPCN for the said service was granted in its favor. Prima facie evidence was likewise found showing Bayantel's legal, financial and technical capacity to undertake the proposed cellular mobile telephone service. Likewise, the May 3, 2000 Order did not violate NTC Memorandum Circular No. 9-14-90 dated September 4, 1990, contrary to the ruling of the Court of Appeals. The memorandum circular sets forth the procedure for the issuance of provisional authority thus: EFFECTIVE THIS DATE, and as part of the Commission's drive to streamline and fast track action on applications/petitions for CPCN other forms of authorizations, the Commission shall be evaluating applications/petitions for immediate issuance of provisional authorizations, pending hearing and final authorization of an application on its merit. For this purpose, it is hereby directed that all applicants/petitioners seeking for provisional authorizations, shall submit immediately to the Commission, either together with their application or in a Motion all their legal, technical, financial, economic documentations in support of their prayer for provisional authorizations for evaluation. On the basis of their completeness and their having complied with requirements, the Commission shall be issuing provisional authorizations. Clearly, a provisional authority may be issued even pending hearing and final determination of an application on its merits. Finally, this Court finds that the Manifestations of Extelcom alleging forum shopping on the part of the NTC and Bayantel are not impressed with merit. The divisions of the Supreme Court are not to be considered as separate and distinct courts. The Supreme Court remains a unit notwithstanding that it works in divisions. Although it may have three divisions, it is but a single court. Actions considered in any of these divisions and decisions rendered therein are, in effect, by the same Tribunal. The divisions of this Court are not to be considered as separate and distinct courts but as divisions of one and the same court.52 Moreover, the rules on forum shopping should not be literally interpreted. We have stated thus: It is scarcely necessary to add that Circular No. 28-91 must be so interpreted and applied as to achieve the purposes projected by the Supreme Court when it promulgated that circular. Circular No. 28-91 was designed to serve as an instrument to promote and facilitate the orderly administration of justice and should not be interpreted with such absolute literalness as to subvert its own ultimate and legitimate objection or the goal of all rules of procedure which is to achieve substantial justice as expeditiously as possible.53

Even assuming that separate actions have been filed by two different parties involving essentially the same subject matter, no forum shopping was committed as the parties did not resort to multiple judicial remedies. The Court, therefore, directed the consolidation of the two cases because they involve essentially the same issues. It would also prevent the absurd situation wherein two different divisions of the same court would render altogether different rulings in the cases at bar. We rule, likewise, that the NTC has legal standing to file and initiate legal action in cases where it is clear that its inaction would result in an impairment of its ability to execute and perform its functions. Similarly, we have previously held in Civil Service Commission v. Dacoycoy54 that the Civil Service Commission, as an aggrieved party, may appeal the decision of the Court of Appeals to this Court. As correctly stated by the NTC, the rule invoked by Extelcom is Rule 65 of the Rules of Civil Procedure, which provides that public respondents shall not appear in or file an answer or comment to the petition or any pleading therein.55 The instant petition, on the other hand, was filed under Rule 45 where no similar proscription exists. WHEREFORE, in view of the foregoing, the consolidated petitions are GRANTED. The Court of Appeals' Decision dated September 13, 2000 and Resolution dated February 9, 2001 are REVERSED and SET ASIDE. The permanent injunction issued by the Court of Appeals is LIFTED. The Orders of the NTC dated February 1, 2000 and May 3, 2000 are REINSTATED. No pronouncement as to costs. SO ORDERED. Davide, Jr., C.J., Puno, Kapunan, and Pardo, JJ., concur.

G.R. No. 145363 February 23, 2004 MERCEDES B. GONZALES, petitioner vs. John Doe (not his real name) and RICARDO P. NAGPACAN, respondents. DECISION QUISUMBING, J.: For review on certiorari is the decision1 dated October 2, 2000, in CA-G.R. SP No. 56251 of the Court of Appeals, which dismissed the special civil action for certiorari, charging the Ombudsman with grave abuse of discretion. The antecedent facts, as culled from the records, are as follows: Petitioner Mercedes B. Gonzales was a public school teacher from 1965 until her forced resignation in 1994. One Purita Avila filed before the Department of Education, Culture and Sports (DECS), Division of City Schools, 3rd District, Caloocan City, sometime in 1993, an

administrative complaint for grave misconduct, dishonesty, and estafa against petitioner who was then the Assistant Principal of Caloocan Elementary School, Unit II. Included in the complaint were her co-teachers, Fe Padilla and Milagros Zablan. Petitioner herein and her coteachers allegedly mortgaged a parcel of land owned by Avila, and covered by Torrens Certificate of Title (TCT) No. 260609,2 without Avilas consent. Respondent Ricardo Nagpacan, Administrative Officer III of City Schools, 3rd District, Caloocan City, on his own, initially heard the aforesaid administrative case, contrary to the provisions of Section 9 of Rep. Act No. 4670,3 to wit: SEC. 9. Administrative Charges. Administrative charges against a teacher shall be heard initially by a committee composed of the corresponding School Superintendent of the Division or a duly authorized representative who should at least have the rank of a division supervisor, where the teacher belongs, as chairman, a representative of the local or, in its absence, any existing provincial or national teachers organization and a supervisor of the Division, the last two to be designated by the Director of Public Schools. The committee shall submit its findings and recommendations to the Director of Public Schools within thirty days from the termination of the hearings: Provided, however, That where the school superintendent is the complainant or an interested party, all the members of the committee shall be appointed by the Secretary of Education. (Emphasis supplied) After the initial hearing, Nagpacan issued a Report of Investigation,4 dated April 22, 1994, recommending the dismissal of petitioner from the service. Forthwith, then Schools Division Superintendent Norma Abracia, in a 1st Indorsement5 dated June 8, 1994, recommended that petitioner be suspended for thirty (30) days effective immediately. Subsequently, then DECSNational Capital Region Director, respondent John Doe (not his real name), rendered a decision,6 dated July 22, 1994, dismissing petitioner from the service. Finally, then DECS Secretary Ricardo Gloria issued the following: (1) 2nd Indorsement,7 dated September 19, 1994, affirming the decision of respondent John Doe (not his real name); (2) Resolution,8 dated October 9, 1996 modifying the 2nd Indorsement by considering petitioner as resigned from the service without prejudice to whatever benefits she is entitled under existing laws as well as reinstatement in the government service except in the DECS; and (3) Resolution,9 dated October 27, 1997, denying petitioners plea for reconsideration, which was considered as a petition for relief from judgment. Meanwhile, upon Avilas complaint, petitioner and Padilla were also criminally charged with estafa before the Regional Trial Court of Caloocan City, Branch 131, on the very same facts alleged in the administrative complaint lodged with the DECS. The Information reads: That on or about the 14th day of June 1993 in Kalookan City, M.M. and within the jurisdiction of this Honorable Court, the above-named accused, Fe Padilla, conspiring together with accused Mercedes Gonzales and with intent to deceive and defraud complainant Adriana Presas, the former purporting to be and assuming the identity of one Purita Avila, a registered owner of

house and lot covered by TCT No. 260609, Kalookan City, and the latter cooperating and acting convincingly to affirm that accused Fe Padilla is the person of Purita Avila, well knowing said representation to be false and fraudulent, the truth being that the true owner of the said house and lot is Purita Avila, and by said act of deception and pretension accused were able to obtain from complainant Adriana Presas a mortgage covering the said house and lot of Purita Avila in the amount of P30,000.00, thus completely deceiving Presas as to who is the true owner of the property, to the damage and prejudice of the latter in the aforementioned amount of P30,000.00. CONTRARY TO LAW. 10 On May 30, 1995, the trial court convicted petitioner as follows: WHEREFORE, accused MERCEDES GONZALES is hereby convicted of the crime for ESTAFA as charged in the Information and, applying the Indeterminate Sentence Law, is hereby sentenced to suffer the penalty of TWO YEARS, ELEVEN (11) MONTHS and ELEVEN (11) DAYS TO FOUR (4) YEARS and TWO (2) MONTHS and to pay to private complainant ADRIANA PRESAS the amount of THIRTY THOUSAND (P30,000.00) PESOS plus twelve percent (12%) per annum commencing from September 21, 1994 when the Information was filed in Court and until fully paid. SO ORDERED.11 However, the Court of Appeals in a decision,12 dated August 28, 1997, in CA-G.R. CR No. 18268, acquitted petitioner on appeal, absent any proof beyond reasonable doubt that petitioner conspired with co-accused Padilla or that she benefited from the amount given to Padilla. All the while, petitioner never applied for judicial relief for resolution of the jurisdictional issue and declaration of nullity of the administrative proceedings conducted by respondent Nagpacan. Instead, she filed on February 25, 1999 an administrative complaint docketed as OMB-ADM-099-0177 for violation of Sec. 9 of the Magna Carta for Public School Teachers against Abracia, Gloria and herein respondents Nagpacan and John Doe (not his real name) before the Office of the Ombudsman. Graft Investigation Officer Plaridel Oscar Bohol found the complaint sufficient in form and substance and recommended that an administrative adjudication be conducted against Abracia, Nagpacan, and John Doe (not his real name). On August 4, 1999, Bohol handed down his decision13 in OMB-ADM 0-99-0177, which disposed as follows: 1. Respondents RICARDO P. NAGPACAN (Administrative Officer III) and John Doe (not his real name) (Undersecretary) both of the Department of Education, Culture and Sports, are hereby suspended without pay for Six (6) Months, for Simple Neglect of Duty. 2. The Secretary of the Department of Education, Culture and Sports is hereby directed to reopen ADM. CASE NO. DECS-NCR-001-94 entitled PURITA AVILA v. FE PADILLA and MERCEDES GONZALES, and cause its adjudication pursuant to R.A. No. 4670 otherwise known as the Magna Carta for Public School Teachers and other existing laws.

SO ORDERED.14 However, Administrative Adjudication Bureau Director Evelyn Baliton disapproved Bohols findings and dismissed petitioners administrative complaint against respondents. Baliton noted that the administrative complaint was filed five (5) years after the occurrence of the act complained of, a ground for outright dismissal of the complaint under Sec. 4(a), Rule III of the Rules of Procedure15 of the Office of the Ombudsman. Baliton also found that complainant had an adequate remedy in another judicial or quasi-judicial body, also a ground for dismissal under Sec. 2016 of the Ombudsman Act of 1989. The proper remedy, Baliton maintained, was to seek judicial relief from the proper court for resolution of the jurisdictional issue and for declaration of nullity of the administrative proceedings. Finally, according to Baliton, petitioner failed to adduce substantial evidence showing respondents willfully violated Sec. 9 of the Magna Carta for Public School Teachers17 resulting in the denial of petitioners right to due process. Hence, in a memorandum18 dated September 23, 1999 addressed to and approved by Asst. Ombudsman Abelardo Aportadera, Jr., Baliton disposed of the administrative complaint thus: In view of all the foregoing premises, it is respectfully recommended that the Decision under review be DISAPPROVED, instead, the complaint against the respondents be DISMISSED for insufficiency of evidence and that the recommendation of Atty. Bohol to direct the DECS Secretary to re-open DECS-NCR-001-94 be likewise DISAPPROVED.19 Undeterred, petitioner filed with the Court of Appeals a special civil action for certiorari on the ground that the Ombudsman acted with grave abuse of discretion in adopting Director Evelyn Balitons memorandum of September 23, 1999 recommending the dismissal of her complaint. The case was docketed as CA-G.R. SP No. 56251. On October 2, 2000, the appellate court dismissed CA-G.R. SP No. 56251 for want of merit. It held that the petition should have been dismissed outright as the proper remedy was a petition for review under Rule 43 of the 1997 Rules of Civil Procedure.20 However, assuming certiorari was available, the same should have been filed not later than ten (10) days from notice of the assailed memorandum. Nonetheless, the petition would fail anyway because a motion for reconsideration should have been filed in order to enable the Ombudsman to correct his mistake without the intervention of the courts. The Court of Appeals also found the Ombudsman correctly relied upon Sec. 20 of the Ombudsman Act of 1989, 21 when it dismissed petitioners administrative complaint against respondent DECS officials. Anent herein petitioners reliance upon the findings of Graft Investigation Officer Bohol, the appellate court deemed the same to be misplaced as said findings are subject to the approval of Director Baliton and hence, do not carry immediate, final, nor binding effect. Finally, the Court of Appeals ruled that assuming there was a violation of Sec. 9 of the Magna Carta for Public School Teachers, petitioners remedy is to seek judicial relief from the proper court for resolution of the jurisdictional issue and for declaration of nullity of the administrative proceedings. Before us, petitioner ascribes to the appellate court, the sole error, . .THAT THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING PETITIONERS PETITION FOR CERTIORARI.22

First, the petitioner argues that a petition for certiorari under Rule 65 is the proper remedy because a motion for reconsideration is no longer available as the administrative decision had become final and unappealable. Neither could she file a petition for review under Rule 43 as it only pertains to appeals from the Court of Tax Appeals and quasi-judicial agencies to the Court of Appeals, thus implying that the Office of the Ombudsman is not a quasi-judicial agency. Petitioners contentions are untenable. The Office of the Ombudsman is a quasi-judicial agency covered by the procedure outlined in Rule 43 of the 1997 Rules of Civil Procedure. 23 As a rule, appeals from decisions of quasi-judicial agencies, such as the Office of the Ombudsman, in administrative disciplinary cases, should be taken to the Court of Appeals under Rule 43. The rule was formulated precisely to provide for a uniform rule of appellate procedure for quasijudicial agencies.24 Thus, certiorari under Rule 65 will not lie, as appeal under Rule 43 is an adequate remedy in the ordinary course of law.25 Unfortunately, petitioner failed to appeal within fifteen (15) days from notice of the assailed decision. Certiorari under Rule 65 cannot be resorted to as a substitute for the lost remedy of appeal, especially if such lapse was occasioned by petitioners neglect or error in the choice of remedies, for the remedies of appeal and certiorari are mutually exclusive and not alternative or successive.26 Second, petitioner claims that the Ombudsman acted with grave abuse of discretion when it dismissed petitioners administrative complaint against respondents. Her claim, however, is far from meritorious, as hereafter elucidated. The Ombudsman dismissed the administrative complaint on the ground that it was filed out of time, pursuant to Sec. 20 of the Ombudsman Act of 1989. Petitioner herself admits that the administrative complaint was filed only on February 25, 1999, or almost five years after the act complained of, which was her forced resignation from the service on September 19, 1994. Hence, in dismissing the belated administrative complaint, the Ombudsman, far from acting with grave abuse of discretion, was simply following what the law has mandated. Petitioner belabors the point that Sec. 20 merely uses the word may and not shall, which means that the provision is only directory and not mandatory in nature. But, at the risk of sounding rhetorical, no grave abuse of discretion attaches in following what the law directs any less than in following what the law mandates. No doubt, in dismissing the complaint for having been filed out of time, as directed by Sec. 20 of the Ombudsman Act of 1989, the Ombudsman did not act with grave abuse of discretion. In fact, he exercised sound discretion in full accord with law. Finally, in a desperate bid to reopen the administrative case, petitioner cries estoppel. She argues that Director Baliton was estopped from dismissing the administrative complaint because Graft Investigation Officer Bohol had already conducted the necessary investigation in connection therewith. The theory is seriously flawed. The findings, conclusions and recommendations of Bohol are, by the nature of his position as Graft Investigation Officer I, necessarily subject to the review and approval of Baliton as Administrative Adjudication Bureau Director. Hence, Director Baliton, in reviewing the findings of Bohol, is not estopped thereby, for the investigators findings do not possess conclusive effect. On the contrary, the Director is empowered to modify, reverse, or even supplant said findings with her own. The proper remedy for petitioner, as suggested by the appellate court, is to seek judicial relief from the proper court for resolution of the jurisdictional issue and for declaration of nullity of the administrative proceeding resulting in her forced resignation, allegedly in violation of Sec. 9 of

the Magna Carta for Public School Teachers. Unfortunately, petitioner chose to pursue another remedy not warranted by the circumstances of her case. It is now indubitable that the Court of Appeals did not err when it dismissed her petition for certiorari under Rule 65 of the Rules of Court. WHEREFORE, the instant petition for review is DENIED for lack of merit. The decision of the Court of Appeals, dated October 2, 2000, in CA-G.R. SP No. 56251 is AFFIRMED. Costs against petitioner. SO ORDERED. Puno, (Chairman), Austria-Martinez, J., no part. Callejo, Sr., and Tinga, JJ., concur.

G.R. No. L-46496

February 27, 1940

ANG TIBAY, represented by TORIBIO TEODORO, manager and propietor, and NATIONAL WORKERS BROTHERHOOD, petitioners, vs. THE COURT OF INDUSTRIAL RELATIONS and NATIONAL LABOR UNION, INC., respondents. Office of the Solicitor-General Ozaeta and Assistant Attorney Barcelona for the Court of Industrial Relations. Antonio D. Paguia for National Labor Unon. Claro M. Recto for petitioner "Ang Tibay". Jose M. Casal for National Workers' Brotherhood. LAUREL, J.: The Solicitor-General in behalf of the respondent Court of Industrial Relations in the aboveentitled case has filed a motion for reconsideration and moves that, for the reasons stated in his motion, we reconsider the following legal conclusions of the majority opinion of this Court: 1. Que un contrato de trabajo, asi individual como colectivo, sin termino fijo de duracion o que no sea para una determinada, termina o bien por voluntad de cualquiera de las partes o cada vez que ilega el plazo fijado para el pago de los salarios segun costumbre en la localidad o cunado se termine la obra; 2. Que los obreros de una empresa fabril, que han celebrado contrato, ya individual ya colectivamente, con ell, sin tiempo fijo, y que se han visto obligados a cesar en sus tarbajos por haberse declarando paro forzoso en la fabrica en la cual tarbajan, dejan de ser empleados u obreros de la misma; 3. Que un patrono o sociedad que ha celebrado un contrato colectivo de trabajo con sus osbreros sin tiempo fijo de duracion y sin ser para una obra determiminada y que se

niega a readmitir a dichos obreros que cesaron como consecuencia de un paro forzoso, no es culpable de practica injusta in incurre en la sancion penal del articulo 5 de la Ley No. 213 del Commonwealth, aunque su negativa a readmitir se deba a que dichos obreros pertenecen a un determinado organismo obrero, puesto que tales ya han dejado deser empleados suyos por terminacion del contrato en virtud del paro. The respondent National Labor Union, Inc., on the other hand, prays for the vacation of the judgement rendered by the majority of this Court and the remanding of the case to the Court of Industrial Relations for a new trial, and avers: 1. That Toribio Teodoro's claim that on September 26, 1938, there was shortage of leather soles in ANG TIBAY making it necessary for him to temporarily lay off the members of the National Labor Union Inc., is entirely false and unsupported by the records of the Bureau of Customs and the Books of Accounts of native dealers in leather. 2. That the supposed lack of leather materials claimed by Toribio Teodoro was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army. 3. That Toribio Teodoro's letter to the Philippine Army dated September 29, 1938, (re supposed delay of leather soles from the States) was but a scheme to systematically prevent the forfeiture of this bond despite the breach of his CONTRACT with the Philippine Army. 4. That the National Worker's Brotherhood of ANG TIBAY is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal. (281 U.S., 548, petitioner's printed memorandum, p. 25.) 5. That in the exercise by the laborers of their rights to collective bargaining, majority rule and elective representation are highly essential and indispensable. (Sections 2 and 5, Commonwealth Act No. 213.) 6. That the century provisions of the Civil Code which had been (the) principal source of dissensions and continuous civil war in Spain cannot and should not be made applicable in interpreting and applying the salutary provisions of a modern labor legislation of American origin where the industrial peace has always been the rule. 7. That the employer Toribio Teodoro was guilty of unfair labor practice for discriminating against the National Labor Union, Inc., and unjustly favoring the National Workers' Brotherhood. 8. That the exhibits hereto attached are so inaccessible to the respondents that even with the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations. 9. That the attached documents and exhibits are of such far-reaching importance and effect that their admission would necessarily mean the modification and reversal of the judgment rendered herein.

The petitioner, Ang Tibay, has filed an opposition both to the motion for reconsideration of the respondent National Labor Union, Inc. In view of the conclusion reached by us and to be herein after stead with reference to the motion for a new trial of the respondent National Labor Union, Inc., we are of the opinion that it is not necessary to pass upon the motion for reconsideration of the Solicitor-General. We shall proceed to dispose of the motion for new trial of the respondent labor union. Before doing this, however, WE DEEM IT NECESSARY, IN THE INTEREST OF ORDERLY PROCEDURE IN CASES OF THIS NATURE, IN INTEREST OF ORDERLY PROCEDURE IN CASES OF THIS NATURE, TO MAKE SEVERAL OBSERVATIONS REGARDING THE NATURE OF THE POWERS OF THE COURT OF INDUSTRIAL RELATIONS
AND EMPHASIZE CERTAIN GUIDING PRINCIPLES WHICH SHOULD BE OBSERVED IN THE TRIAL OF CASES BROUGHT BEFORE IT. We have re-examined the entire record of the proceedings had before the

Court of Industrial Relations in this case, and we have found no substantial evidence that the exclusion of the 89 laborers here was due to their union affiliation or activity. The whole transcript taken contains what transpired during the hearing and is more of a record of contradictory and conflicting statements of opposing counsel, with sporadic conclusion drawn to suit their own views. It is evident that these statements and expressions of views of counsel have no evidentiary value. The Court of Industrial Relations is a special court whose functions are specifically stated in the law of its creation (Commonwealth Act No. 103). It is more an administrative than a part of the integrated judicial system of the nation. It is not intended to be a mere receptive organ of the Government. Unlike a court of justice which is essentially passive, acting only when its jurisdiction is invoked and deciding only cases that are presented to it by the parties litigant, the function of the Court of Industrial Relations, as will appear from perusal of its organic law, is more active, affirmative and dynamic. It not only exercises judicial or quasi-judicial functions in the determination of disputes between employers and employees but its functions in the determination of disputes between employers and employees but its functions are far more comprehensive and expensive. It has jurisdiction over the entire Philippines, to consider, investigate, decide, and settle any question, matter controversy or dispute arising between, and/or affecting employers and employees or laborers, and regulate the relations between them, subject to, and in accordance with, the provisions of Commonwealth Act No. 103 (section 1). It shall take cognizance or purposes of prevention, arbitration, decision and settlement, of any industrial or agricultural dispute causing or likely to cause a strike or lockout, arising from differences as regards wages, shares or compensation, hours of labor or conditions of tenancy or employment, between landlords and tenants or farm-laborers, provided that the number of employees, laborers or tenants of farm-laborers involved exceeds thirty, and such industrial or agricultural dispute is submitted to the Court by the Secretary of Labor or by any or both of the parties to the controversy and certified by the Secretary of labor as existing and proper to be by the Secretary of Labor as existing and proper to be dealth with by the Court for the sake of public interest. (Section 4, ibid.) It shall, before hearing the dispute and in the course of such hearing, endeavor to reconcile the parties and induce them to settle the dispute by amicable agreement. (Paragraph 2, section 4, ibid.) When directed by the President of the Philippines, it shall investigate and study all industries established in a designated locality, with a view to determinating the necessity and fairness of fixing and adopting for such industry or locality a minimum wage or share of laborers or tenants, or a maximum "canon" or rental to be paid by the "inquilinos" or tenants or less to landowners. (Section 5, ibid.) In fine, it may appeal to voluntary arbitration in the settlement of industrial disputes; may employ mediation or conciliation for that purpose, or recur to the more effective system of official investigation and compulsory arbitration in order to determine specific controversies between labor and capital

industry and in agriculture. There is in reality here a mingling of executive and judicial functions, which is a departure from the rigid doctrine of the separation of governmental powers. In the case of Goseco vs. Court of Industrial Relations et al., G.R. No. 46673, promulgated September 13, 1939, we had occasion to joint out that the Court of Industrial Relations et al., G. R. No. 46673, promulgated September 13, 1939, we had occasion to point out that the Court of Industrial Relations is not narrowly constrained by technical rules of procedure, and the Act requires it to "act according to justice and equity and substantial merits of the case, without regard to technicalities or legal forms and shall not be bound by any technicalities or legal forms and shall not be bound by any technical rules of legal evidence but may inform its mind in such manner as it may deem just and equitable." (Section 20, Commonwealth Act No. 103.) It shall not be restricted to the specific relief claimed or demands made by the parties to the industrial or agricultural dispute, but may include in the award, order or decision any matter or determination which may be deemed necessary or expedient for the purpose of settling the dispute or of preventing further industrial or agricultural disputes. (section 13, ibid.) And in the light of this legislative policy, appeals to this Court have been especially regulated by the rules recently promulgated by the rules recently promulgated by this Court to carry into the effect the avowed legislative purpose. The fact, however, that the Court of Industrial Relations may be said to be free from the rigidity of certain procedural requirements does not mean that it can, in justifiable cases before it, entirely ignore or disregard the fundamental and essential requirements of due process in trials and investigations of an administrative character. There are primary rights which must be respected even in proceedings of this character: (1) The first of these rights is the right to a hearing, which includes the right of the party interested or affected to present his own case and submit evidence in support thereof. In the language of Chief Hughes, in Morgan v. U.S., 304 U.S. 1, 58 S. Ct. 773, 999, 82 Law. ed. 1129, "the liberty and property of the citizen shall be protected by the rudimentary requirements of fair play. (2) Not only must the party be given an opportunity to present his case and to adduce evidence tending to establish the rights which he asserts but the tribunal must consider the evidence presented. (Chief Justice Hughes in Morgan v. U.S. 298 U.S. 468, 56 S. Ct. 906, 80 law. ed. 1288.) In the language of this court in Edwards vs. McCoy, 22 Phil., 598, "the right to adduce evidence, without the corresponding duty on the part of the board to consider it, is vain. Such right is conspicuously futile if the person or persons to whom the evidence is presented can thrust it aside without notice or consideration." (3) "While the duty to deliberate does not impose the obligation to decide right, it does imply a necessity which cannot be disregarded, namely, that of having something to support it is a nullity, a place when directly attached." (Edwards vs. McCoy, supra.) This principle emanates from the more fundamental is contrary to the vesting of unlimited power anywhere. Law is both a grant and a limitation upon power. (4) Not only must there be some evidence to support a finding or conclusion (City of Manila vs. Agustin, G.R. No. 45844, promulgated November 29, 1937, XXXVI O. G. 1335), but the evidence must be "substantial." (Washington, Virginia and Maryland Coach Co. v. national labor Relations Board, 301 U.S. 142, 147, 57 S. Ct. 648, 650, 81 Law. ed. 965.) It means such relevant evidence as a reasonable mind accept as adequate to support a conclusion." (Appalachian Electric Power v. National Labor Relations Board, 4 Cir., 93 F. 2d 985, 989; National Labor Relations Board v. Thompson

Products, 6 Cir., 97 F. 2d 13, 15; Ballston-Stillwater Knitting Co. v. National Labor Relations Board, 2 Cir., 98 F. 2d 758, 760.) . . . The statute provides that "the rules of evidence prevailing in courts of law and equity shall not be controlling.' The obvious purpose of this and similar provisions is to free administrative boards from the compulsion of technical rules so that the mere admission of matter which would be deemed incompetent inn judicial proceedings would not invalidate the administrative order. (Interstate Commerce Commission v. Baird, 194 U.S. 25, 44, 24 S. Ct. 563, 568, 48 Law. ed. 860; Interstate Commerce Commission v. Louisville and Nashville R. Co., 227 U.S. 88, 93 33 S. Ct. 185, 187, 57 Law. ed. 431; United States v. Abilene and Southern Ry. Co. S. Ct. 220, 225, 74 Law. ed. 624.) But this assurance of a desirable flexibility in administrative procedure does not go far as to justify orders without a basis in evidence having rational probative force. Mere uncorroborated hearsay or rumor does not constitute substantial evidence. (Consolidated Edison Co. v. National Labor Relations Board, 59 S. Ct. 206, 83 Law. ed. No. 4, Adv. Op., p. 131.)" (5) The decision must be rendered on the evidence presented at the hearing, or at least contained in the record and disclosed to the parties affected. (Interstate Commence Commission vs. L. & N. R. Co., 227 U.S. 88, 33 S. Ct. 185, 57 Law. ed. 431.) Only by confining the administrative tribunal to the evidence disclosed to the parties, can the latter be protected in their right to know and meet the case against them. It should not, however, detract from their duty actively to see that the law is enforced, and for that purpose, to use the authorized legal methods of securing evidence and informing itself of facts material and relevant to the controversy. Boards of inquiry may be appointed for the purpose of investigating and determining the facts in any given case, but their report and decision are only advisory. (Section 9, Commonwealth Act No. 103.) The Court of Industrial Relations may refer any industrial or agricultural dispute or any matter under its consideration or advisement to a local board of inquiry, a provincial fiscal. a justice of the peace or any public official in any part of the Philippines for investigation, report and recommendation, and may delegate to such board or public official such powers and functions as the said Court of Industrial Relations may deem necessary, but such delegation shall not affect the exercise of the Court itself of any of its powers. (Section 10, ibid.) (6) The Court of Industrial Relations or any of its judges, therefore, must act on its or his own independent consideration of the law and facts of the controversy, and not simply accept the views of a subordinate in arriving at a decision. It may be that the volume of work is such that it is literally Relations personally to decide all controversies coming before them. In the United States the difficulty is solved with the enactment of statutory authority authorizing examiners or other subordinates to render final decision, with the right to appeal to board or commission, but in our case there is no such statutory authority. (7) The Court of Industrial Relations should, in all controversial questions, render its decision in such a manner that the parties to the proceeding can know the various issues involved, and the reasons for the decision rendered. The performance of this duty is inseparable from the authority conferred upon it. In the right of the foregoing fundamental principles, it is sufficient to observe here that, except as to the alleged agreement between the Ang Tibay and the National Worker's Brotherhood

(appendix A), the record is barren and does not satisfy the thirst for a factual basis upon which to predicate, in a national way, a conclusion of law. This result, however, does not now preclude the concession of a new trial prayed for the by respondent National Labor Union, Inc., it is alleged that "the supposed lack of material claimed by Toribio Teodoro was but a scheme adopted to systematically discharged all the members of the National Labor Union Inc., from work" and this avernment is desired to be proved by the petitioner with the "records of the Bureau of Customs and the Books of Accounts of native dealers in leather"; that "the National Workers Brotherhood Union of Ang Tibay is a company or employer union dominated by Toribio Teodoro, the existence and functions of which are illegal." Petitioner further alleges under oath that the exhibits attached to the petition to prove his substantial avernments" are so inaccessible to the respondents that even within the exercise of due diligence they could not be expected to have obtained them and offered as evidence in the Court of Industrial Relations", and that the documents attached to the petition "are of such far reaching importance and effect that their admission would necessarily mean the modification and reversal of the judgment rendered herein." We have considered the reply of Ang Tibay and its arguments against the petition. By and large, after considerable discussions, we have come to the conclusion that the interest of justice would be better served if the movant is given opportunity to present at the hearing the documents referred to in his motion and such other evidence as may be relevant to the main issue involved. The legislation which created the Court of Industrial Relations and under which it acts is new. The failure to grasp the fundamental issue involved is not entirely attributable to the parties adversely affected by the result. Accordingly, the motion for a new trial should be and the same is hereby granted, and the entire record of this case shall be remanded to the Court of Industrial Relations, with instruction that it reopen the case, receive all such evidence as may be relevant and otherwise proceed in accordance with the requirements set forth hereinabove. So ordered. Avancea, C. J., Villa-Real, Imperial, Diaz, Concepcion and Moran, JJ., concur. G.R. No. 109976 April 26, 2005 PHILIPPINE NATIONAL OIL COMPANY, Petitioner, vs. THE HON. COURT OF APPEALS, THE COMMISSIONER OF INTERNAL REVENUE and TIRSO SAVELLANO, Respondents. x--------------------x G.R. No. 112800 April 26, 2005 PHILIPPINE NATIONAL BANK, Petitioner, vs. THE HON. COURT OF APPEALS, COURT OF TAX APPEALS, TIRSO B. SAVELLANO and COMMISSIONER OF INTERNAL REVENUE, Respondents. DECISION CHICO-NAZARIO, J.:

This is a consolidation of two Petitions for Review on Certiorari filed by the Philippine National Oil Company (PNOC)1 and the Philippine National Bank (PNB),<2 assailing the decisions of the Court of Appeals in CA-G.R. SP No. 295833 and CA-G.R. SP No. 29526,4 respectively, which both affirmed the decision of the Court of Tax Appeals (CTA) in CTA Case No. 4249. 5 The Petitions before this Court originated from a sworn statement submitted by private respondent Tirso B. Savellano (Savellano) to the Bureau of Internal Revenue (BIR) on 24 June 1986. Through his sworn statement, private respondent Savellano informed the BIR that PNB had failed to withhold the 15% final tax on interest earnings and/or yields from the money placements of PNOC with the said bank, in violation of Presidential Decree (P.D.) No. 1931. P.D. No. 1931, which took effect on 11 June 1984, withdrew all tax exemptions of governmentowned and controlled corporations. In a letter, dated 08 August 1986, the BIR requested PNOC to settle its liability for taxes on the interests earned by its money placements with PNB and which PNB did not withhold.6 PNOC wrote the BIR on 25 September 1986, and made an offer to compromise its tax liability, which it estimated to be in the sum of P304,419,396.83, excluding interest and surcharges, as of 31 July 1986. PNOC proposed to set-off its tax liability against a claim for tax refund/credit of the National Power Corporation (NAPOCOR), then pending with the BIR, in the amount of P335,259,450.21. The amount of the claim for tax refund/credit was supposedly a receivable account of PNOC from NAPOCOR.7 On 08 October 1986, the BIR sent a demand letter to PNB, as withholding agent, for the payment of the final tax on the interest earnings and/or yields from PNOC's money placements with the bank, from 15 October 1984 to 15 October 1986, in the total amount of P376,301,133.33.8 On the same date, the BIR also mailed a letter to PNOC informing it of the demand letter sent to PNB.9 PNOC, in another letter, dated 14 October 1986, reiterated its proposal to settle its tax liability through the set-off of the said tax liability against NAPOCOR'S pending claim for tax refund/credit.10 The BIR replied on 11 November 1986 that the proposal for set-off was premature since NAPOCOR's claim was still under process. Once more, BIR requested PNOC to settle its tax liability in the total amount of P385,961,580.82, consisting of P303,343,765.32 final tax, plus P82,617,815.50 interest computed until 15 November 1986.11 On 09 June 1987, PNOC made another offer to the BIR to settle its tax liability. This time, however, PNOC proposed a compromise by paying P91,003,129.89, representing 30% of the P303,343,766.29 basic tax, in accordance with the provisions of Executive Order (E.O.) No. 44.12 Then BIR Commissioner Bienvenido A. Tan, in a letter, dated 22 June 1987, accepted the compromise. The BIR received a total tax payment on the interest earnings and/or yields from PNOC's money placements with PNB in the amount of P93,955,479.12, broken down as follows: Previous payment made by PNB Add: Payment made by PNOC pursuant to the compromise agreement of June 22, 1987 Total tax payment P 2,952,349.23 P 91,003,129.89 P 93,955,479.1213

Private respondent Savellano, through four installments, was paid the informer's reward in the total amount of P14,093,321.89, representing 15% of the P93,955,479.12 tax collected by the BIR from PNOC and PNB. He received the last installment on 01 December 1987.14 On 07 January 1988, private respondent Savellano, through his legal counsel, wrote the BIR to demand payment of the balance of his informer's reward, computed as follows: BIR tax assessment Final tax rate Informer's reward due (BIR deficiency tax assessment x Final tax rate) Less: Payment received by private respondent Savellano Outstanding balance P 385,961,580.82 0.15 P 57,894,237.12 P 14,093,321.89 P 43,800,915.2515

BIR Commissioner Tan replied through a letter, dated 08 March 1988, that private respondent Savellano was already fully paid the informer's reward equivalent to 15% of the amount of tax actually collected by the BIR pursuant to its compromise agreement with PNOC. BIR Commissioner Tan further explained that the compromise was in accordance with the provisions of E.O. No. 44, Revenue Memorandum Order (RMO) No. 39-86, and RMO No. 4-87.16 Private respondent Savellano submitted another letter, dated 24 March 1988, to BIR Commissioner Tan, seeking reconsideration of his decision to compromise the tax liability of PNOC. In the same letter, private respondent Savellano questioned the legality of the compromise agreement entered into by the BIR and PNOC and claimed that the tax liability should have been collected in full.17 On 08 April 1988, while the aforesaid Motion for Reconsideration was still pending with the BIR, private respondent Savellano filed a Petition for Review ad cautelam with the CTA, docketed as CTA Case No. 4249. He claimed therein that BIR Commissioner Tan acted "with grave abuse of discretion and/or whimsical exercise of jurisdiction" in entering into a compromise agreement that resulted in "a gross and unconscionable diminution" of his reward. Private respondent Savellano prayed for the enforcement and collection of the total tax assessment against taxpayer PNOC and/or withholding agent PNB; and the payment to him by the BIR Commissioner of the 15% informer's reward on the total tax collected.18 He would later amend his Petition to implead PNOC and PNB as necessary and indispensable parties since they were parties to the compromise agreement.19 In his Answer filed with the CTA, BIR Commissioner Tan asserted that the Petition stated no cause of action against him, and that private respondent Savellano was already paid the informer's reward due him. Alleging that the Petition was baseless and malicious, BIR Commissioner Tan filed a counterclaim for exemplary damages against private respondent Savellano.20 PNOC and PNB filed separate Motions to Dismiss, both arguing that the CTA lacked jurisdiction to decide the case.21 In its Resolution, dated 28 November 1988, the CTA denied the Motions to Dismiss since the question of lack of jurisdiction and/or cause of action do not appear to be indubitable.22

After their Motions to Dismiss were denied by the CTA, PNOC and PNB filed their respective Answers to the amended Petition. PNOC averred, among other things, that (1) it had no privity with private respondent Savellano; (2) the BIR Commissioner's discretionary act in entering into the compromise agreement had legal basis under E.O. No. 44 and RMO No. 39-86 and RMO No. 4-87; and (3) the CTA had no jurisdiction to resolve the case against it.23 On the other hand, PNB asserted that (1) the CTA lacked jurisdiction over the case; and (2) the BIR Commissioner's decision to accept the compromise was discretionary on his part and, therefore, cannot be reviewed or interfered with by the courts.24 PNOC and PNB later filed their amended Answer invoking an opinion of the Commission on Audit (COA) disallowing the payment by the BIR of informer's reward to private respondent Savellano.25 The CTA, thereafter, ordered the parties to submit their evidence,26 to be followed by their respective Memoranda.27 On 23 November 1990, private respondent Savellano, filed a Manifestation with Motion for Suspension of Proceedings, claiming that his pending Motion for Reconsideration with the BIR Commissioner may soon be resolved.28 Both PNOC and PNB opposed the said Motion.29 Subsequently, the new BIR Commissioner, Jose U. Ong, in a letter to PNB, dated 16 January 1991, demanded that PNB pay deficiency withholding tax on the interest earnings and/or yields from PNOC's money placements, in the amount of P294,958,450.73, computed as follows: Withholding tax, plus interest under the letter P 385,961,580.82 of demand dated November 11, 1986 Less: Amount paid under E.O. No. 44 P 91,003,129.89 Amount still due and collectible P 294,958,450.7330 This BIR letter was received by PNB on 06 February 1991,31 and was protested by it through a letter, dated 11 April 1991.32 The BIR denied PNB's protest on the ground that it was filed out of time and, thus, the assessment had already become final.33 Private respondent Savellano, on 22 February 1991, filed an Omnibus Motion moving to withdraw his previous Motion for Suspension of Proceeding since BIR Commissioner Ong had finally resolved his Motion for Reconsideration, and submitting by way of supplemental offer of evidence (1) the letter of BIR Commissioner Ong, dated 13 February 1991, informing private respondent Savellano of the action on his Motion for Reconsideration; and (2) the demand-letter of BIR Commissioner Ong to PNB, dated 16 January 1991.34 Despite the oppositions of PNOC and PNB, the CTA, in a Resolution, dated 02 May 1991, resolved to allow private respondent Savellano to withdraw his previous Motion for Suspension of Proceeding and to admit the supplementary evidence being offered by the same party.35 In its Order, dated 03 June 1991, the CTA considered the case submitted for decision as of the following day, 04 June 1991.36 On 11 June 1991, PNB appealed to the Department of Justice (DOJ) the BIR assessment, dated 16 January 1991, for deficiency withholding tax in the sum of P294,958,450.73. PNB alleged that its appeal to the DOJ was sanctioned under P.D. No. 242, which provided for the

administrative settlement of disputes between government offices, agencies, and instrumentalities, including government-owned and controlled corporations.37 Three days later, on 14 June 1991, PNB filed a Motion to Suspend Proceedings before the CTA since it had a pending appeal before the DOJ.38 On 04 July 1991, PNB filed with the CTA a Motion for Reconsideration of its Order, dated 03 June 1991, submitting the case for decision as of 04 June 1991, and prayed that the CTA hold its resolution of the case in view of PNB's appeal pending before the DOJ.39 On 17 July 1991, PNB filed a Motion to Suspend the Collection of Tax by the BIR. It alleged that despite its request for reconsideration of the deficiency withholding tax assessment, dated 16 January 1991, BIR Commissioner Ong sent another letter, dated 23 April 1991, demanding payment of the P294,958,450.73 deficiency withholding tax on the interest earnings and/or yields from PNOC's money placements. The same letter informed PNB that this was the BIR Commissioner's final decision on the matter and that the BIR Commissioner was set to issue a warrant of distraint and/or levy against PNB's deposits with the Central Bank of the Philippines. PNB further alleged that the levy and distraint of PNB's deposits, unless restrained by the CTA, would cause great and irreparable prejudice not only to PNB, a government-owned and controlled corporation, but also to the Government itself.40 Pursuant to the Order of the CTA, during the hearing on 19 July 1991,41 the parties submitted their respective Memoranda on PNB's Motion to Suspend Proceedings.42 On 20 September 1991, private respondent Savellano filed another Omnibus Motion calling the attention of the CTA to the fact that the BIR already issued, on 12 August 1991, a warrant of garnishment addressed to the Central Bank Governor and against PNB. In compliance with the said warrant, the Central Bank issued, on 23 August 1991, a debit advice against the demand deposit account of PNB with the Central Bank for the amount of P294,958,450.73, with a corresponding transfer of the same amount to the demand deposit-in-trust of BIR with the Central Bank. Since the assessment had already been enforced, PNB's Motion to Suspend Proceedings became moot and academic. Private respondent Savellano, thus, moved for the denial of PNB's Motion to Suspend Proceedings and for an order requiring BIR to deposit with the CTA the amount of P44,243,767.00 as his informer's reward, representing 15% of the deficiency withholding tax collected.43 Both PNOC and PNB opposed private respondent Savellano's Omnibus Motion, dated 20 September 1991, arguing that the DOJ already ordered the suspension of the collection of the tax deficiency. There was therefore no basis for private respondent Savellano's Motion as the same was premised on the erroneous assumption that the tax deficiency had been collected. When the DOJ denied the BIR Commissioner's Motion to Dismiss and required him to file his answer, the DOJ assumed jurisdiction over PNB's appeal, and the CTA should first suspend its proceedings to give the DOJ the opportunity to decide the validity and propriety of the tax assessment against PNB.44 The CTA, on 28 May 1992, rendered its decision, wherein it upheld its jurisdiction and disposed of the case as follows: WHEREFORE, judgment is rendered declaring the COMPROMISE AGREEMENT between the Bureau of Internal Revenue, on the one hand, and the Philippine National

Oil Company and Philippine National Bank, on the other, as WITHOUT FORCE AND EFFECT; The Commissioner of Internal Revenue is hereby ordered to ENFORCE the ASSESSMENT of January 16, 1991 against Philippine National Bank which has become final and unappealable by collecting from Philippine National Bank the deficiency withholding tax, plus interest totalling (sic) P294,958,450.73; Petitioner may be paid, upon collection of the deficiency withholding tax, the balance of his entitlement to informer's reward based on fifteen percent (15%) of the deficiency withholding total tax collected in this case or P44,243.767.00 subject to existing rules and regulations governing payment of reward to informers.45 In a Resolution, dated 16 November 1992, the CTA denied the Motions for Reconsideration filed by PNOC and PNB since they substantially raised the same issues in their previous pleadings and which had already been passed upon and resolved adversely against them.46 PNOC and PNB filed separate appeals with the Court of Appeals seeking the reversal of the CTA decision in CTA Case No. 4249, dated 28 May 1992, and the CTA Resolution in the same case, dated 16 November 1992. PNOC's appeal was docketed as CA-G.R. SP No. 29583, while PNB's appeal was CA-G.R. SP No. 29526. In both cases, the Court of Appeals affirmed the decision of the CTA. In the meantime, the Central Bank again issued on 02 September 1992 a debit advice against the demand deposit account of PNB with the Central Bank for the amount of P294,958,450.73,47 and on 15 September 1992, credited the same amount to the demand deposit account of the Treasurer of the Republic of the Philippines.48 On 04 November 1992, the Treasurer of the Republic issued a journal voucher transferring P294,958,450.73 to the account of the BIR.49 PNB, in turn, debited P294,958,450.73 from the deposit account of PNOC with PNB.50 PNOC and PNB then filed separate Petitions for Review on Certiorari with this Court, praying that the decisions of the Court of Appeals in CA-G.R. SP No. 29583 and CA-G.R. SP No. 29526, respectively, both affirming the decision of the CTA in CTA Case No. 4249, be reversed and set aside. These two Petitions were consolidated since they involved identical parties and factual background, and the resolution of related, if not exactly, the same issues. In its Petition for Review, PNOC alleged the following errors committed by the Court of Appeals in CA-G.R. SP No. 29583: 1. The Court of Appeals erred in holding that the deficiency taxes of PNOC could not be the subject of a compromise under Executive Order No. 44; and 2. The Court of Appeals erred in holding that Savellano is entitled to additional informer's reward.51 PNB, in its own Petition for Review, assailed the decision of the Court of Appeals in CA-G.R. SP No. 29526, assigning the following errors:

1. Respondent Court erred in not finding that the Court of Tax Appeals lacks jurisdiction on the controversy involving BIR and PNB (both government instrumentalities) regarding the new assessment of BIR against PNB; 2. The respondent Court erred in not finding that the Court of Tax Appeals has no jurisdiction to question the compromise agreement entered into by the Commissioner of Internal Revenue; and 3. The respondent Court erred in not ruling that the Commissioner of Internal Revenue cannot unilaterally annul tax compromises validly entered into by his predecessor.52 The decisions of the Court of Appeals in CA-GR SP No. 29583 and CA-G.R. SP No. 29526, affirmed the decision of the CTA in CTA Case No. 4249. The resolution, therefore, of the assigned errors in the Court of Appeals' decisions essentially requires a review of the CTA decision itself. In consolidating the present Petitions, this Court finds that PNOC and PNB are basically questioning the (1) Jurisdiction of the CTA in CTA Case No. 4249; (2) Declaration by the CTA that the compromise agreement was without force and effect; (3) Finding of the CTA that the deficiency withholding tax assessment against PNB had already become final and unappealable and, thus, enforceable; and (4) Order of the CTA directing payment of additional informer's reward to private respondent Savellano. I Jurisdiction of the CTA A. The demand letter, dated 16 January 1991 did not constitute a new assessment against PNB. The main argument of PNB in assailing the jurisdiction of the CTA in CTA Case No. 4249 is that the BIR demand letter, dated 16 January 1991,53 should be considered as a new assessment against PNB. As a new assessment, it gave rise to a new dispute and controversy solely between the BIR and PNB that should be administratively settled or adjudicated, as provided in P.D. No. 242. This argument is without merit. The issuance by the BIR of the demand letter, dated 16 January 1991, was merely a development in the continuing effort of the BIR to collect the tax assessed against PNOC and PNB way back in 1986. BIR's first letter, dated 08 August 1986, was addressed to PNOC, requesting it to settle its tax liability. The BIR subsequently sent another letter, dated 08 October 1986, to PNB, as withholding agent, demanding payment of the tax it had failed to withhold on the interest earnings and/or yields from PNOC's money placements. PNOC wrote the BIR three succeeding letters offering to compromise its tax liability; PNB, on the other hand, did not act on the demand letter it received, dated 08 October 1986. The BIR and PNOC eventually reached a compromise agreement on 22 June 1987. Private respondent Savellano questioned the validity of the compromise agreement because the reduced amount of tax collected from PNOC, by virtue of the compromise agreement, also proportionately reduced his informer's reward. Private respondent Savellano then requested the BIR Commissioner to review and reconsider the

compromise agreement. Acting on the request of private respondent Savellano, the new BIR Commissioner declared the compromise agreement to be without basis and issued the demand letter, dated 16 January 1991, against PNB, as the withholding agent for PNOC. It is clear from the foregoing that the BIR demand letter, dated 16 January 1991, could not stand alone as a new assessment. It should always be considered in the factual context summarized above. In fact, the demand letter, dated 16 January 1991, actually referred to the withholding tax assessment first issued in 1986 and its eventual settlement through a compromise agreement. In addition, the computation of the deficiency withholding tax was based on the figures from the 1986 assessments against PNOC and PNB, and BIR no longer conducted a new audit or investigation of either PNOC and PNB before it issued the demand letter on 16 January 1991. These constant references to past events and circumstances demonstrate that the demand letter, dated 16 January 1991, was not a new assessment, but rather, the latest action taken by the BIR to collect on the tax assessments issued against PNOC and PNB in 1986. PNB argues that the demand letter, dated 16 January 1991, introduced a new controversy. We see it differently as the said demand letter presented the resolution by BIR Commissioner Ong of the previous controversy involving the compromise of the 1986 tax assessments. BIR Commissioner Ong explicitly declared therein that the compromise agreement was without legal basis, and requested PNB, as the withholding agent, to pay the amount of withholding tax still due. B. The CTA correctly retained jurisdiction over CTA Case No. 4249 by virtue of Republic Act No. 1125. Having established that the BIR demand letter, dated 16 January 1991, did not constitute a new assessment, then, there could be no basis for PNB's claim that any dispute arising from the new assessment should only be between BIR and PNB. Still proceeding from the argument that there was a new dispute between PNB and BIR, PNB sought the suspension of the proceedings in CTA Case No. 4249, after it contested the deficiency withholding tax assessment against it and the demand for payment thereof before the DOJ, pursuant to P.D. No. 242. The CTA, however, correctly sustained its jurisdiction and continued the proceedings in CTA Case No. 4249; and, in effect, rejected DOJ's claim of jurisdiction to administratively settle or adjudicate BIR's assessment against PNB. The CTA assumed jurisdiction over the Petition for Review filed by private respondent Savellano based on the following provision of Rep. Act No. 1125, the Act creating the Court of Tax Appeals: SECTION 7. Jurisdiction. The Court of Tax Appeals shall exercise exclusive appellate jurisdiction to review by appeal, as herein provided (1) Decisions of the Collector of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under the National Internal

Revenue Code or other law or part of law administered by the Bureau of Internal Revenue; . . . (Underscoring ours.) In his Petition before the CTA, private respondent Savellano requested a review of the decisions of then BIR Commissioner Tan to enter into a compromise agreement with PNOC and to reject his claim for additional informer's reward. He submitted before the CTA questions of law involving the interpretation and application of (1) E.O. No. 44, and its implementing rules and regulations, which authorized the BIR Commissioner to compromise delinquent accounts and disputed assessments pending as of 31 December 1985; and (2) Section 316(1) of the National Internal Revenue Code of 1977 (NIRC of 1977), as amended, which granted to the informer a reward equivalent to 15% of the actual amount recovered or collected by the BIR.54 These should undoubtedly be considered as matters arising from the NIRC and other laws being administered by the BIR, thus, appealable to the CTA under Section 7(1) of Rep. Act No. 1125. PNB, however, insists on the jurisdiction of the DOJ over its appeal of the deficiency withholding tax assessment by virtue of P.D. No. 242. Provisions on jurisdiction of P.D. No. 242 read: SECTION 1. Provisions of law to the contrary notwithstanding, all disputes, claims and controversies solely between or among the departments, bureaus, offices, agencies, and instrumentalities of the National Government, including government-owned or controlled corporations, but excluding constitutional offices or agencies, arising from the interpretation and application of statutes, contracts or agreements, shall henceforth be administratively settled or adjudicated as provided hereinafter; Provided, That this shall not apply to cases already pending in court at the time of the effectivity of this decree. SECTION 2. In all cases involving only questions of law, the same shall be submitted to and settled or adjudicated by the Secretary of Justice, as Attorney General and ex officio legal adviser of all government-owned or controlled corporations and entities, in consonance with Section 83 of the Revised Administrative Code. His ruling or determination of the question in each case shall be conclusive and binding upon all the parties concerned. SECTION 3. Cases involving mixed questions of law and of fact or only factual issues shall be submitted to and settled or adjudicated by: (a) The Solicitor General, with respect to disputes or claims controversies between or among the departments, bureaus, offices and other agencies of the National Government; (b) The Government Corporate Counsel, with respect to disputes or claims or controversies between or among government-owned or controlled corporations or entities being served by the Office of the Government Corporate Counsel; and (c) The Secretary of Justice, with respect to all other disputes or claims or controversies which do not fall under the categories mentioned in paragraphs (a) and (b). The PNB and DOJ are of the same position that P.D. No. 242, the more recent law, repealed Section 7(1) of Rep. Act No. 1125,55 based on the pronouncement of this Court in Development Bank of the Philippines v. Court of Appeals, et al., 56] quoted below:

The Court expresses its entire agreement with the conclusion of the Court of Appeals and the basic premises thereof that there is an "irreconcilable repugnancybetween Section 7(2) of R.A. No. 1125 and P.D. No. 242," and hence, that the later enactment (P.D. No. 242), being the latest expression of the legislative will, should prevail over the earlier. In the said case, it was expressly declared that P.D. No. 242 repealed Section 7(2) of Rep. Act No. 1125, which provides for the exclusive appellate jurisdiction of the CTA over decisions of the Commissioner of Customs. PNB contends that P.D. No. 242 should be deemed to have likewise repealed Section 7(1) of Rep. Act No. 1125, which provide for the exclusive appellate jurisdiction of the CTA over decisions of the BIR Commissioner.57 After re-examining the provisions on jurisdiction of Rep. Act No. 1125 and P.D. No. 242, this Court finds itself in disagreement with the pronouncement made in Development Bank of the Philippines v. Court of Appeals, et al.,58 and refers to the earlier case of Lichauco & Company, Inc. v. Apostol, et al.,59 for the guidelines in determining the relation between the two statutes in question, to wit: The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later date clearly reveals an intention on the part of the law making power to abrogate the prior law, this intention must be given effect; but there must always be a sufficient revelation of this intention, and it has become an unbending rule of statutory construction that the intention to repeal a former law will not be imputed to the Legislature when it appears that the two statutes, or provisions, with reference to which the question arises bear to each other the relation of general to special. (Underscoring ours.) When there appears to be an inconsistency or conflict between two statutes and one of the statutes is a general law, while the other is a special law, then repeal by implication is not the primary rule applicable. The following rule should principally govern instead: Specific legislation upon a particular subject is not affected by a general law upon the same subject unless it clearly appears that the provisions of the two laws are so repugnant that the legislators must have intended by the later to modify or repeal the earlier legislation. The special act and the general law must stand together, the one as the law of the particular subject and the other as the general law of the land. (Ex Parte United States, 226 U. S., 420; 57 L. ed., 281; Ex Parte Crow Dog, 109 U. S., 556; 27 L. ed., 1030; Partee vs. St. Louis & S. F. R. Co., 204 Fed. Rep., 970.) Where there are two acts or provisions, one of which is special and particular, and certainly includes the matter in question, and the other general, which, if standing alone, would include the same matter and thus conflict with the special act or provision, the special must be taken as intended to constitute an exception to the general act or provision, especially when such general and special acts or provisions are contemporaneous, as the Legislature is not to be presumed to have intended a conflict. (Crane v. Reeder and Reeder, 22 Mich., 322, 334; University of Utah vs. Richards, 77 Am. St. Rep., 928.)60 It has, thus, become an established rule of statutory construction that between a general law and a special law, the special law prevails Generalia specialibus non derogant.61

Sustained herein is the contention of private respondent Savellano that P.D. No. 242 is a general law that deals with administrative settlement or adjudication of disputes, claims and controversies between or among government offices, agencies and instrumentalities, including government-owned or controlled corporations. Its coverage is broad and sweeping, encompassing all disputes, claims and controversies. It has been incorporated as Chapter 14, Book IV of E.O. No. 292, otherwise known as the Revised Administrative Code of the Philippines.62 On the other hand, Rep. Act No. 1125 is a special law63 dealing with a specific subject matter the creation of the CTA, which shall exercise exclusive appellate jurisdiction over the tax disputes and controversies enumerated therein. Following the rule on statutory construction involving a general and a special law previously discussed, then P.D. No. 242 should not affect Rep. Act No. 1125. Rep. Act No. 1125, specifically Section 7 thereof on the jurisdiction of the CTA, constitutes an exception to P.D. No. 242. Disputes, claims and controversies, falling under Section 7 of Rep. Act No. 1125, even though solely among government offices, agencies, and instrumentalities, including government-owned and controlled corporations, remain in the exclusive appellate jurisdiction of the CTA. Such a construction resolves the alleged inconsistency or conflict between the two statutes, and the fact that P.D. No. 242 is the more recent law is no longer significant. Even if, for the sake of argument, that P.D. No. 242 should prevail over Rep. Act No. 1125, the present dispute would still not be covered by P.D. No. 242. Section 1 of P.D. No. 242 explicitly provides that only disputes, claims and controversies solely between or among departments, bureaus, offices, agencies, and instrumentalities of the National Government, including constitutional offices or agencies, as well as government-owned and controlled corporations, shall be administratively settled or adjudicated. While the BIR is obviously a government bureau, and both PNOC and PNB are government-owned and controlled corporations, respondent Savellano is a private citizen. His standing in the controversy could not be lightly brushed aside. It was private respondent Savellano who gave the BIR the information that resulted in the investigation of PNOC and PNB; who requested the BIR Commissioner to reconsider the compromise agreement in question; and who initiated CTA Case No. 4249 by filing a Petition for Review. In Bay View Hotel, Inc. v. Manila Hotel Workers' Union-PTGWO, et al.,64] this Court upheld the jurisdiction of the Court of Industrial Relations over the ordinary courts and justified its decision in the following manner: We are unprepared to break away from the teaching in the cases just adverted to. To draw a tenuous jurisdictional line is to undermine stability in labor litigations. A piecemeal resort to one court and another gives rise to multiplicity of suits. To force the employees to shuttle from one court to another to secure full redress is a situation gravely prejudicial. The time to be lost, effort wasted, anxiety augmented, additional expense incurred these are considerations which weigh heavily against split jurisdiction. Indeed, it is more in keeping with orderly administration of justice that all the causes of action here "be cognizable and heard by only one court: the Court of Industrial Relations." The same justification is used in the present case to reject DOJ's jurisdiction over the BIR and PNB, to the exclusion of the other parties. The rights of all four parties in CTA Case No. 4249, namely the BIR, as the tax collector; PNOC, the taxpayer; PNB, the withholding agent; and private respondent Savellano, the informer claiming his reward; arose from the same factual background and were so closely interrelated, that a pronouncement as to one would definitely

have repercussions on the others. The ends of justice were best served when the CTA continued to exercise its jurisdiction over CTA Case No. 4249. The CTA, which had assumed jurisdiction over all the parties to the controversy, could render a comprehensive resolution of the issues raised and grant complete relief to the parties. II Validity of the Compromise Agreement A. PNOC could not apply for a compromise under E.O. No. 44 because its tax liability was not a delinquent account or a disputed assessment as of 31 December 1985. PNOC and PNB, on different grounds, dispute the decision of the CTA in CTA Case No. 4249 declaring the compromise agreement between BIR and PNOC without force and effect. PNOC asserts that the compromise agreement was in accordance with E.O. No. 44, and its implementing rules and regulations, and should be binding upon the parties thereto. E.O. No. 44 granted the BIR Commissioner or his duly authorized representatives the power to compromise any disputed assessment or delinquent account pending as of 31 December 1985, upon the payment of an amount equal to 30% of the basic tax assessed; in which case, the corresponding interests and penalties shall be condoned. E.O. No. 44 took effect on 04 September 1986 and remained effective until 31 March 1987. The disputed assessments or delinquent accounts that the BIR Commissioner could compromise under E.O. No. 44 are defined under Revenue Regulation (RR) No. 17-86, as follows: a) Delinquent account Refers to the amount of tax due on or before December 31, 1985 from a taxpayer who failed to pay the same within the time prescribed for its payment arising from (1) a self assessed tax, whether or not a tax return was filed, or (2) a deficiency assessment issued by the BIR which has become final and executory. Where no return was filed, the taxpayer shall be considered delinquent as of the time the tax on such return was due, and in availing of the compromise, a tax return shall be filed as a basis for computing the amount of compromise to be paid. b) Disputed assessment refers to a tax assessment disputed or protested on or before December 31, 1985 under any of the following categories: 1) if the same is administratively protested within thirty (30) days from the date the taxpayer received the assessment, or 2.) if the decision of the BIR on the taxpayer's administrative protest is appealed by the taxpayer before an appropriate court. PNOC's tax liability could not be considered a delinquent account since (1) it was not selfassessed, because the BIR conducted an investigation and assessment of PNOC and PNB after obtaining information regarding the non-withholding of tax from private respondent

Savellano; and (2) the demand letter, issued against it on 08 August 1986, could not have been a deficiency assessment that became final and executory by 31 December 1985. The dissenting opinion contends, however, that the tax liability of PNOC constitutes a selfassessed tax, and is, therefore, a delinquent account as of 31 December 1985, qualifying for a compromise under E.O. No. 44. It anchors its argument on the declaration made by this Court in Tupaz v. Ulep,65 that internal revenue taxes are self-assessing. It is not denied herein that the self-assessing system governs Philippine internal revenue taxes. The dissenting opinion itself defines self-assessed tax as, "a tax that the taxpayer himself assesses or computes and pays to the taxing authority." Clearly, such a system imposes upon the taxpayer the obligation to conduct an assessment of himself so he could determine and declare the amount to be used as tax basis, any deductions therefrom, and finally, the tax due. E.O. No. 44 covers self-assessed tax, whether or not a tax return was filed. The phrase "whether or not a tax return was filed" only refers to the compliance by the taxpayer with the obligation to file a return on the dates specified by law, but it does not do away with the requisite that the tax must be self-assessed in order for the taxpayer to avail of the compromise. The second paragraph of Section 2(a) of RR No. 17-86 expressly commands, and still imposes upon the taxpayer, who is availing of the compromise under E.O. No. 44, and who has not previously filed any return, the duty to conduct self-assessment by filing a tax return that would be used as the basis for computing the amount of compromise to be paid. Section 2(a)(1) of RR No. 17-86 thus involves a situation wherein a taxpayer, after conducting a self-assessment, discovers or becomes aware that he had failed to pay a tax due on or before 31 December 1985, regardless of whether he had previously filed a return to reflect such tax; voluntarily comes forward and admits to the BIR his tax liability; and applies for a compromise thereof. In case the taxpayer has not previously filed any return, he must fill out such a return reflecting therein his own declaration of the taxable amount and computation of the tax due. The compromise payment shall be computed based on the amount reflected in the tax return submitted by the taxpayer himself. Neither PNOC nor PNB, the taxpayer and the withholding agent, respectively, conducted selfassessment in this case. There is no showing that in the absence of the tax assessment issued by the BIR against them, that PNOC and/or PNB would have voluntarily admitted their tax liabilities, already amounting to P385,961,580.82, as of 15 November 1986, and would have offered to compromise the same. In fact, both PNOC and PNB were conspicuously silent about their tax liabilities until they were assessed thereon. Any attempt by PNOC and PNB to assess and declare by themselves their tax liabilities had already been overtaken by the BIR's conduct of its audit and investigation and subsequent issuance of the assessments, dated 08 August 1986 and 08 October 1986, against PNOC and PNB, respectively. The said tax assessments, uncontested and undisputed, presented the results of the BIR audit and investigation and the computation of the total amount of tax liabilities of PNOC and PNB. They should be controlling in this case, and should not be so easily and conveniently ignored and set aside. It would be a contradiction to claim that the tax liabilities of PNOC and PNB are self-assessed and, at the same time, BIR-assessed; when it is clear and simple that it had been the BIR that conducted the assessment and determined the tax liabilities of PNOC and PNB.

That the BIR-assessed tax liability should be differentiated from a self-assessed one, is supported by the provisions of RR No. 17-86 on the basis for computing the amount of compromise payment. Note that where tax liabilities are self-assessed, the compromise payment shall be computed based on the tax return filed by the taxpayer.66 On the other hand, where the BIR already issued an assessment, the compromise payment shall be computed based on the tax due on the assessment notice.67 For instances where the BIR had already issued an assessment against the taxpayer, the tax liability could still be compromised under E.O. No. 44 only if: (1) the assessment had been final and executory on or before 31 December 1985 and, therefore, considered a delinquent account as of said date;68 or (2) the assessment had been disputed or protested on or before 31 December 1985.69 RMO No. 39-86, which provides the guidelines for the implementation of E.O. No. 44, does mention different types of assessments that may be compromised under said statute (i.e., jeopardy assessments, arbitrary assessments, and tax assessments of doubtful validity). RMO No. 39-86 may not have expressly stated any qualification for these particular types of assessments; nonetheless, E.O. No. 44 specifically refers only to assessments that were delinquent or disputed as of 31 December 1985. E.O. No. 44 and all BIR issuances to implement said statute should be interpreted so that they are harmonized and consistent with each other. Accordingly, this Court finds that the different types of assessments mentioned in RMO No. 39-86 would still have to qualify as delinquent accounts or disputed assessments as of 31 Dcember 1985, so that they could be compromised under E.O. No. 44. The BIR had first written to PNOC on 08 August 1986, demanding payment of the income tax on the interest earnings and/or yields from PNOC's money placements with PNB from 15 October 1984 to 15 October 1986. This demand letter could be regarded as the first assessment notice against PNOC. Such an assessment, issued only on 08 August 1986, could not have been final and executory as of 31 December 1985 so as to constitute a delinquent account. Neither was the assessment against PNOC an assessment that could have been disputed or protested on or before 31 December 1985, having been issued on a later date. Given that PNOC's tax liability did not constitute a delinquent account or a disputed assessment as of 31 December 1985, then it could not be compromised under E.O. No. 44. The assessment against PNOC, instead, was more appropriately covered by Revenue Memorandum Circular (RMC) No. 31-86. RMC No. 31-86 clarifies the scope of availment of the tax amnesty under E.O. No. 4170 and compromise payments on delinquent accounts and disputed assessments under E.O. No. 44. The third paragraph of RMC No. 31-86 reads: [T]axpayers against whom assessments had been issued from January 1 to August 21, 1986 may settle their tax liabilities by way of compromise under Section 246 of the Tax Code as amended by paying 30% of the basic assessment excluding surcharge, interest, penalties and other increments thereto.

The above-quoted paragraph supports the position that only assessments that were disputed or that were final and executory by 31 December 1985 could be the subject of a compromise under E.O. No. 44. Assessments issued between 01 January to 21 August 1986 could still be compromised by payment of 30% of the basic tax assessed, not anymore pursuant to E.O. No. 44, but pursuant to Section 246 of the NIRC of 1977, as amended. Section 246 of the NIRC of 1977, as amended, granted the BIR Commissioner the authority to compromise the payment of any internal revenue tax under the following circumstances: (1) there exists a reasonable doubt as to the validity of the claim against the taxpayer; or (2) the financial position of the taxpayer demonstrates a clear inability to pay the assessed tax.71 There are substantial differences in circumstances under which compromises may be granted under Section 246 of the NIRC of 1977, as amended, and E.O. No. 44. Although PNOC and PNB have extensively argued their entitlement to compromise under E.O. No. 44, neither of them has alleged, much less, has presented any evidence to prove that it may compromise its tax liability under Section 246 of the NIRC of 1977, as amended. B. The tax liability of PNB as withholding agent also did not qualify for compromise under E.O. No. 44. Before proceeding any further, this Court reconsiders the conclusion made by BIR Commissioner Ong in his demand letter, dated 16 January 1991, that the compromise settlement executed between the BIR and PNOC was without legal basis because withholding taxes were not actually taxes that could be compromised, but a penalty for PNB's failure to withhold and for which it was made personally liable. E.O. No. 44 covers disputed or delinquency cases where the person assessed was himself the taxpayer rather than a mere agent.72 RMO No. 39-86 expressly allows a withholding agent, who failed to withhold the required tax because of neglect, ignorance of the law, or his belief that he was not required by law to withhold tax, to apply for a compromise settlement of his withholding tax liability under E.O. No. 44. A withholding agent, in such a situation, may compromise the withholding tax assessment against him precisely because he is being held directly accountable for the tax.73 RMO No. 39-86 distinguishes between the withholding agent in the foregoing situation from the withholding agent who withheld the tax but failed to remit the amount to the Government. A withholding agent in the latter situation is the one disqualified from applying for a compromise settlement because he is being made accountable as an agent, who held funds in trust for the Government.74 Both situations, however, involve withholding agents. The right to compromise under these provisions should have been claimed by PNB, the withholding agent for PNOC. The BIR held PNB personally accountable for its failure to withhold the tax on the interest earnings and/or yields from PNOC's money placements with PNB. The BIR sent a demand letter, dated 08 October 1986, addressed directly to PNB, for payment of the withholding tax assessed against it, but PNB failed to take any action on the said demand letter. Yet, all the offers to compromise the withholding tax assessment came from PNOC and PNOC did not claim that it made the offers to compromise on behalf of PNB.

Moreover, the general requirement of E.O. No. 44 still applies to withholding agents that the withholding tax liability must either be a delinquent account or a disputed assessment as of 31 December 1985 to qualify for compromise settlement. The demand letter against PNB, which also served as its assessment notice, had been issued on 08 October 1986 or two months later than PNOC's. PNB's withholding tax liability could not be considered a delinquent account or a disputed assessment, as defined under RR No. 17-86, for the same reasons that PNOC's tax liability did not constitute as such. The tax liability of PNB, therefore, was also not eligible for compromise settlement under E.O. No. 44. C. Even assuming arguendo that PNOC and/or PNB qualified under E.O. No. 44, their application for compromise was filed beyond the deadline. Despite already ruling that the tax liabilities of PNOC and PNB could not be compromised under E.O. No. 44, this Court still deems it necessary to discuss the finding of the CTA that the compromise agreement had been filed beyond the effectivity of E.O. No. 44, since the CTA made a declaration in relation thereto that paragraph 2 of RMO No. 39-86 was null and void for unduly extending the effectivity of E.O. No. 44. Paragraph 2 of RMO No. 39-86 provides that: 2. Period for availment. Filing of application for compromise settlement under the said law shall be effective only until March 31, 1987. Applications filed on or before this date shall be valid even if the payment or payments of the compromise amount shall be made after the said date, subject, however, to the provisions of Executive Order No. 44 and its implementing Revenue Regulations No. 17-86. It is well-settled in this jurisdiction that administrative authorities are vested with the power to make rules and regulations because it is impracticable for the lawmakers to provide general regulations for various and varying details of management. The interpretation given to a rule or regulation by those charged with its execution is entitled to the greatest weight by the court construing such rule or regulation, and such interpretation will be followed unless it appears to be clearly unreasonable or arbitrary.75 RMO No. 39-86, particularly paragraph 2 thereof, does not appear to be unreasonable or arbitrary. It does not unduly expand the coverage of E.O. No. 44 by merely providing that applications for compromise filed until 31 March 1987 are still valid, even if payment of the compromised amount is made on a later date. It cannot be expected that the compromise allowed under E.O. No. 44 can be automatically granted upon mere filing of the application by the taxpayer. Irrefutably, the applications would still have to be processed by the BIR to determine compliance with the requirements of E.O. No. 44. As it is uncontested that a taxpayer could still file an application for compromise on 31 March 1987, the very last day of effectivity of E.O. No. 44, it would be unreasonable to expect the BIR to process and approve the taxpayer's application within the same date considering the volume of applications filed and pending approval, plus the other matters the BIR personnel would also have to attend to. Thus, RMO No. 39-86 merely assures the taxpayers that their applications would still be processed and could be approved on a later date. Payment, of course, shall be made by the taxpayer only after his application had been approved and the compromised amount had been determined.

Given that paragraph 2 of RMO No. 39-86 is valid, the next question that needs to be addressed is whether PNOC had been able to submit an application for compromise on or before 31 March 1987 in compliance thereof. Although the compromise agreement was executed only on 22 June 1987, PNOC is claiming that it had already written a letter to the BIR, as early as 25 September 1986, offering to compromise its tax liability, and that the said letter should be considered as PNOC's application for compromise settlement. A perusal of PNOC's letter, dated 25 September 1986, would reveal, however, that the terms of its proposed compromise did not conform to those authorized by E.O. No. 44. PNOC did not offer to pay outright 30% of the basic tax assessed against it as required by E.O. No. 44; and instead, made the following offer: (2) That PNOC be permitted to set-off its foregoing mentioned tax liability of P304,419,396.83 against the tax refund/credit claims of the National Power Corporation (NPC) for specific taxes on fuel oil sold to NPC totaling P335,259,450.21, which tax refunds/credits are actually receivable accounts of our Company from NPC. 76 PNOC reiterated the offer in its letter to the BIR, dated 14 October 1986.77 The BIR, in its letters to PNOC, dated 8 October 198678 and 11 November 1986,79 consistently denied PNOC's offer because the claim for tax refund/credit of NAPOCOR was still under process, so that the offer to set-off such claim against PNOC's tax liability was premature. Furthermore, E.O. No. 44 does not contemplate compromise payment by set-off of a tax liability against a claim for tax refund/credit. Compromise under E.O. No. 44 may be availed of only in the following circumstances: SEC. 3. Who may avail. Any person, natural or juridical, may settle thru a compromise any delinquent account or disputed assessment which has been due as of December 31, 1985, by paying an amount equal to thirty percent (30%) of the basic tax assessed. SEC. 6. Mode of Payment. Upon acceptance of the proposed compromise, the amount offered as compromise in complete settlement of the delinquent account shall be paid immediately in cash or manager's certified check. Deferred or staggered payments of compromise amounts over P50,000 may be considered on a case to case basis in accordance with the extant regulations of the Bureau upon approval of the Commissioner of Internal Revenue, his Deputy or Assistant as delineated in their respective jurisdictions. If the Compromise amount is not paid as required herein, the compromise agreement is automatically nullified and the delinquent account reverted to the original amount plus the statutory increments, which shall be collected thru the summary and/or judicial processes provided by law. E.O. No. 44 is not for the benefit of the taxpayer alone, who can extinguish his tax liability by paying the compromise amount equivalent to 30% of the basic tax. It also benefits the Government by making collection of delinquent accounts and disputed assessments simpler,

easier, and faster. Payment of the compromise amount must be made immediately, in cash or in manager's check. Although deferred or staggered payments may be allowed on a case-to-case basis, the mode of payment remains unchanged, and must still be made either in cash or in manager's check. PNOC's offer to set-off was obviously made to avoid actual cash-out by the company. The offer defeated the purpose of E.O. No. 44 because it would not only delay collection, but more importantly, it would not guarantee collection. First of all, BIR's collection was contingent on whether the claim for tax refund/credit of NAPOCOR would be subsequently granted. Second, collection could not be made immediately and would have to wait until the resolution of the claim for tax refund/credit of NAPOCOR. Third, there is no proof, other than the bare allegation of PNOC, that NAPOCOR's claim for tax refund/credit is an account receivable of PNOC. A possible dispute between NAPOCOR and PNOC as to the proceeds of the tax refund/credit would only delay collection by the BIR even further. It was only in its letter, dated 09 June 1987, that PNOC actually offered to compromise its tax liability in accordance with the terms and circumstances prescribed by E.O. No. 44 and its implementing rules and regulations, by stating that: Consequently, we reiterate our previous request for compromise under E.O. No. 44, and convey our preparedness to settle the subject tax assessment liability by payment of the compromise amount of P91,003,129.89, representing thirty percent (30%) of the basic tax assessment of P303,343,766.29, in accordance with E.O. No. 44 and its implementing BIR Revenue Memorandum Order No. 39-86.80 PNOC claimed in the same letter that it had previously requested for a compromise under the terms of E.O. No. 44, but this Court could not find evidence of such previous request. There are stark and substantial differences in the terms of PNOC's offer to compromise in its earlier letters, dated 25 September 1986 and 14 October 1986 (set-off of the entire amount of its tax liability against the claim for tax refund/credit of NAPOCOR), to those in its letter, dated 09 June 1987 (payment of the compromise amount representing 30% of the basic tax assessed against it), making it difficult for this Court to accept that the letter of 09 June 1987 merely reiterated PNOC's offer to compromise in its earlier letters. This Court likewise cannot give credence to PNOC's allegation that beginning 25 September 1986, the date of its first letter to the BIR, there were continuing negotiations between PNOC and BIR that culminated in the compromise agreement on 22 June 1987. Aside from the exchange of letters recounted in the preceding paragraphs, both PNOC and PNB failed to present any other proof of the supposed negotiations. After the BIR denied the second offer of PNOC to set-off its tax liability against the claim for tax refund/credit of NAPOCOR in a letter, dated 11 November 1986, there is no other evidence of subsequent communication between PNOC and the BIR. It was only after almost seven months, or on 09 June 1987, that PNOC again wrote a letter to the BIR, this time offering to pay the compromise amount of 30% of the basic tax assessed against. This letter was already filed beyond 31 March 1987, after the lapse of the effectivity of E.O. No. 44 and the deadline for filing applications for compromise under the said statute. Evidence of meetings between PNOC and the BIR, or any other form of communication, wherein the parties presented their offer and counter-offer to the other, would have been very

valuable in explaining and supporting BIR Commissioner Tan's decision to accept PNOC's third offer to compromise after denying the previous two. The absence of such evidence herein negates PNOC's claim of actual negotiations with the BIR. Therefore, even assuming arguendo that the tax liabilities of PNOC and PNB qualify as delinquent accounts or disputed assessments as of 31 December 1985, the application for compromise filed by PNOC on 09 June 1987, and accepted by then BIR Commissioner Tan on 22 June 1987, was still filed way beyond 31 March 1987, the expiration date of the effectivity of E.O. No. 44 and the deadline for filing of applications for compromise under RMO No. 39-86. D. The BIR Commissioner's discretionary authority to enter into a compromise agreement is not absolute and the CTA may inquire into allegations of abuse thereof. The foregoing discussion supports the CTA's conclusion that the compromise agreement between PNOC and the BIR was indeed without legal basis. Despite this lack of legal support for the execution of the said compromise agreement, PNB argues that the CTA still had no jurisdiction to review and set aside the compromise agreement. It contends that the authority to compromise is purely discretionary on the BIR Commissioner and the courts cannot interfere with his exercise thereof. It is generally true that purely administrative and discretionary functions may not be interfered with by the courts; but when the exercise of such functions by the administrative officer is tainted by a failure to abide by the command of the law, then it is incumbent on the courts to set matters right, with this Court having the last say on the matter.81 The manner by which BIR Commissioner Tan exercised his discretionary power to enter into a compromise was brought under the scrutiny of the CTA amidst allegations of "grave abuse of discretion and/or whimsical exercise of jurisdiction."82 The discretionary power of the BIR Commissioner to enter into compromises cannot be superior over the power of judicial review by the courts. The discretionary authority to compromise granted to the BIR Commissioner is never meant to be absolute, uncontrolled and unrestrained. No such unlimited power may be validly granted to any officer of the government, except perhaps in cases of national emergency.83 In this case, the BIR Commissioner's authority to compromise, whether under E.O. No. 44 or Section 246 of the NIRC of 1977, as amended, can only be exercised under certain circumstances specifically identified in said statutes. The BIR Commissioner would have to exercise his discretion within the parameters set by the law, and in case he abuses his discretion, the CTA may correct such abuse if the matter is appealed to them.84 Petitioners PNOC and PNB both contend that BIR Commissioner Tan merely exercised his authority to enter into a compromise specially granted by E.O. No. 44. Since this Court has already made a determination that the compromise agreement did not qualify under E.O. No. 44, BIR Commissioner Tan's decision to agree to the compromise should have been reviewed in the light of the general authority granted to the BIR Commissioner to compromise taxes under Section 246 of the NIRC of 1977, as amended. Then again, petitioners PNOC and PNB failed to allege, much less present evidence, that BIR Commissioner Tan acted in accordance with Section 246 of the NIRC of 1977, as amended, when he entered into the compromise agreement with PNOC.

E. The CTA may set aside a compromise agreement that is contrary to law and public policy. PNB also asserts that the CTA had no jurisdiction to set aside a compromise agreement entered into in good faith. It relies on the decision of this Court in Republic v. Sandiganbayan85 that a compromise agreement cannot be set aside merely because it is too one-sided. A compromise agreement should be respected by the courts as the res judicata between the parties thereto. This Court, though, finds that there are substantial differences in the factual background of Republic v. Sandiganbayan and the present case. The compromise agreement executed between the Presidential Commission on Good Government (PCGG) and Roberto S. Benedicto in Republic v. Sandiganbayan was judicially approved by the Sandiganbayan. The Sandiganbayan had ample opportunity to examine the validity of the compromise agreement since two years elapsed from the time the agreement was executed up to the time it was judicially approved. This Court even stated in the said case that, "We are not dealing with the usual compromise agreement perfunctorily submitted to a court and approved as a matter of course. The PCGG-Benedicto agreement was thoroughly and, at times, disputatiously discussed before the respondent court. There could be no deception or misrepresentation foisted on either the PCGG or the Sandiganbayan."86 In addition, the new PCGG Chairman originally prayed for the re-negotiation of the compromise agreement so that it could be more just, fair, and equitable, an action considered by this Court as an implied admission that the agreement was not contrary to law, public policy or morals nor was there any circumstance which had vitiated consent.87 The above-mentioned circumstances strongly supported the validity of the compromise agreement in Republic v. Sandiganbayan, which was why this Court refused to set it aside. Unfortunately for the petitioners in the present case, the same cannot be said herein. The Court of Appeals, in upholding the jurisdiction of the CTA to set aside the compromise agreement, ruled that: We are unable to accept petitioner's submissions. Its formulation of the issues on CIR and CTA's lack of jurisdiction to disturb a compromise agreement presupposes a compromise agreement validly entered into by the CIR and not, when as in this case, it was indubitably shown that the supposed compromise agreement is without legal support. In case of arbitrary or capricious exercise by the Commissioner or if the proceedings were fatally defective, the compromise can be attacked and reversed through the judicial process (Meralco Securities Corporation v. Savellano, 117 SCRA 805, 812 [1982]; Sarah E. Ramsay, et. al. v. U.S. 21 Ct. C1 443, aff'd 120 U.S. 214, 30 L. Ed. 582; Tyson v. U.S., 39 F. Supp. 135 cited in page 18 of decision) .88 Although the general rule is that compromises are to be favored, and that compromises entered into in good faith cannot be set aside,89 this rule is not without qualification. A court may still reject a compromise or settlement when it is repugnant to law, morals, good customs, public order, or public policy.90

The compromise agreement between the BIR and PNOC was contrary to law having been entered into by BIR Commissioner Tan in excess or in abuse of the authority granted to him by legislation. E.O. No. 44 and the NIRC of 1977, as amended, had identified the situations wherein the BIR Commissioner may compromise tax liabilities, and none of these situations existed in this case. The compromise, moreover, was contrary to public policy. The primary duty of the BIR is to collect taxes, since taxes are the lifeblood of the Government and their prompt and certain availability are imperious needs.91 In the present case, however, BIR Commissioner Tan, by entering into the compromise agreement that was bereft of any legal basis, would have caused the Government to lose almost P300 million in tax revenues and would have deprived the Government of much needed monetary resources. Allegations of good faith and previous execution of the terms of the compromise agreement on the part of PNOC would not be enough for this Court to disregard the demands of law and public policy. Compromise may be the favored method to settle disputes, but when it involves taxes, it may be subject to closer scrutiny by the courts. A compromise agreement involving taxes would affect not just the taxpayer and the BIR, but also the whole nation, the ultimate beneficiary of the tax revenues collected. F. The Government cannot be estopped from collecting taxes by the mistake, negligence, or omission of its agents. The new BIR Commissioner, Commissioner Ong, had acted well within his powers when he set aside the compromise agreement, dated 22 June 1987, after finding that the said compromise agreement was without legal basis. When he took over from his predecessor, there was still a pending motion for reconsideration of the said compromise agreement, filed by private respondent Savellano on 24 March 1988. To resolve the said motion, he reviewed the compromise agreement and, thereafter, came upon the conclusion that it did not comply with E.O. No. 44 and its implementing rules and regulations. It had been declared by this Court in Hilado v. Collector of Internal Revenue, et al.,92 that an administrative officer, such as the BIR Commissioner, may revoke, repeal or abrogate the acts or previous rulings of his predecessor in office. The construction of a statute by those administering it is not binding on their successors if, thereafter, the latter becomes satisfied that a different construction should be given. It is evident in this case that the new BIR Commissioner, Commissioner Ong, construed E.O. No. 44 and its implementing rules and regulations differently from that of his predecessor, former Commissioner Tan, which led to Commissioner Ong's revocation of the BIR approval of the compromise agreement, dated 22 June 1987. Such a revocation was only proper considering that the former BIR Commissioner's decision to approve the said compromise agreement was based on the erroneous construction of the law (i.e., E.O. No. 44 and its implementing rules and regulations) and should not give rise to any vested right on PNOC.93 Furthermore, approval of the compromise agreement and acceptance of the compromise payment by his predecessor cannot estop BIR Commissioner Ong from setting aside the compromise agreement, dated 22 June 1987, for lack of legal basis; and from demanding payment of the deficiency withholding tax from PNB. As a general rule, the Government cannot

be estopped from collecting taxes by the mistake, negligence, or omission of its agents94 because: . . . Upon taxation depends the Government ability to serve the people for whose benefit taxes are collected. To safeguard such interest, neglect or omission of government officials entrusted with the collection of taxes should not be allowed to bring harm or detriment to the people, in the same manner as private persons may be made to suffer individually on account of his own negligence, the presumption being that they take good care of their personal affairs. This should not hold true to government officials with respect to matters not of their own personal concern. This is the philosophy behind the government's exception, as a general rule, from the operation of the principle of estoppel. (Republic vs. Caballero, L-27437, September 30, 1977, 79 SCRA 177; Manila Lodge No. 761, Benevolent and Protective Order of the Elks, Inc. vs. Court of Appeals, L-41001, September 30, 1976, 73 SCRA 162; Sy vs. Central Bank of the Philippines, L41480, April 30, 1976, 70 SCRA 571; Balmaceda vs. Corominas & Co., Inc., 66 SCRA 553; Auyong Hian vs. Court of Tax Appeals, 59 SCRA 110; Republic vs. Philippine Rabbit Bus Lines, Inc., 66 SCRA 553; Republic vs. Philippine Long Distance Telephone Company, L-18841, January 27, 1969, 26 SCRA 620; Zamora vs. Court of Tax Appeals, L-23272, November 26, 1970, 36 SCRA 77; E. Rodriguez, Inc. vs. Collector of Internal Revenue, L-23041, July 31, 1969, 28 SCRA 119).95 III Finality of the Tax Assessment A. The issue on whether the BIR complied with the notice requirements under RR No. 12-85 is raised for the first time on appeal and should not be given due course. PNB, in another effort to block the collection of the deficiency withholding tax, this time raises doubts as to the validity of the deficiency withholding tax assessment issued against it on 16 January 1991. It submits that the BIR failed to comply with the notice requirements set forth in RR No. 12-85.96 Whether or not the BIR complied with the notice requirements of RR No. 12-85 is a new issue raised by PNB only before this Court. Such a question has not been ventilated before the lower courts. For an appellate tribunal to consider a legal question, it should have been raised in the court below.97 If raised earlier, the matter would have been seriously delved into by the CTA and the Court of Appeals.98 B. The assessment against PNB had become final and unappealable, and therefore, enforceable. The CTA and the Court of Appeals declared as final and unappealable, and thus, enforceable, the assessment against PNB, dated 16 January 1991, since PNB failed to protest said assessment within the 30-day prescribed period. This Court, though, finds that the significant BIR assessment, as far as this case is concerned, should be the one issued by the BIR against PNB on 08 October 1986. The BIR issued on 08 October 1986 an assessment against PNB for its withholding tax liability on the interest earnings and/or yields from PNOC's money placements with the bank. It had 30

days from receipt to protest the BIR's assessment.99 PNB, however, did not take any action as to the said assessment so that upon the lapse of the period to protest, the withholding tax assessment against it, dated 8 October 1986, became final and unappealable, and could no longer be disputed.100 The courts may therefore order the enforcement of this assessment. It is the enforcement of this BIR assessment against PNB, dated 08 October 1986, that is in issue in the instant case. If the compromise agreement is valid, it would effectively bar the BIR from enforcing the assessment and collecting the assessed tax; on the other hand, if the compromise agreement is void, then the courts can order the BIR to enforce the assessment and collect the assessed tax. As has been previously discussed by this Court, the BIR demand letter, dated 16 January 1991, is not a new assessment against PNB. It only demanded from PNB the payment of the balance of the withholding tax assessed against it on 08 October 1986. The same demand letter also has no substantial effect or impact on the resolution of the present case. It is already unnecessary and superfluous, having been issued by the BIR when CTA Case No. 4249 was already pending before the CTA. At best, the demand letter, dated 16 January 1991, constitute a useful reference for the courts in computing the balance of PNB's tax liability, after applying as partial payment thereon the amount previously received by the BIR from PNOC pursuant to the compromise agreement. IV Prescription A. The defense of prescription was never raised by petitioners PNOC and PNB, and should be considered waived. The dissenting opinion takes the position that the right of the BIR to assess and collect income tax on the interest earnings and/or yields from PNOC's money placements with PNB, particularly for taxable year 1985, had already prescribed, based on Section 268 of the NIRC of 1977, as amended. Section 268 of the NIRC of 1977, as amended, provides a three-year period of limitation for the assessment and collection of internal revenue taxes, which begins to run after the last day prescribed for filing of the return.101 The dissenting opinion points out that more than four years have elapsed from 25 January 1986 (the last day prescribed by law for PNB to file its withholding tax return for the fourth quarter of 1985) to 16 January 1991 (the date when the alleged final assessment of PNB's tax liability was issued). The issue of prescription, however, was brought up only in the dissenting opinion and was never raised by PNOC and PNB in the proceedings before the BIR nor in any of their pleadings submitted to the CTA and the Court of Appeals. Section 1, Rule 9 of the Rules of Civil Procedure lays down the rule on defenses and objections not pleaded, and reads:

SECTION 1. Defenses and objections not pleaded. Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the parties for the same cause, or that the action is barred by prior judgment or by the statute of limitations, the court shall dismiss the claim. The general rule enunciated in the above-quoted provision governs the present case, that is, the defense of prescription, not pleaded in a motion to dismiss or in the answer, is deemed waived. The exception in same provision cannot be applied herein because the pleadings and the evidence on record do not sufficiently show that the action is barred by prescription. It has been consistently held in earlier tax cases that the defense of prescription of the period for the assessment and collection of tax liabilities shall be deemed waived when such defense was not properly pleaded and the facts alleged and evidences submitted by the parties were not sufficient to support a finding by this Court on the matter.102 In Querol v. Collector of Internal Revenue,103 this Court pronounced that prescription, being a matter of defense, imposes the burden on the taxpayer to prove that the full period of the limitation has expired; and this requires him to positively establish the date when the period started running and when the same was fully accomplished. In making its conclusion that the assessment and collection in this case had prescribed, the dissenting opinion took liberties to assume the following facts even in the absence of allegations and evidences to the effect that: (1) PNB filed returns for its withholding tax obligations for taxable year 1985; (2) PNB reported in the said returns the interest earnings of PNOC's money placements with the bank; and (3) that the returns were filed on or before the prescribed date, which was 25 January 1986. It is not safe to adopt the first and second assumptions in this case considering that Section 269 of the NIRC of 1977, as amended, provides for a different period of limitation for assessment and collection of taxes in case of false or fraudulent return or for failure to file a return. In such cases, the BIR is given 10 years after discovery of the falsity, fraud, or omission within which to make an assessment.104 It is also not safe to accept the third assumption since there can be a possibility that PNB filed the withholding tax return later than the prescribed date, in which case, following the dictates of Section 268 of the NIRC of 1977, as amended, the three-year prescriptive period shall be counted from the date the return was actually filed.105 PNB's withholding tax returns for taxable year 1985, duly received by the BIR, would have been the best evidence to prove actual filing, the date of filing and the contents thereof. These facts are relevant in determining which prescriptive period should apply, and when such prescriptive period should begin to run and when it had lapsed. Yet, the pleadings did not refer to any return, and no return was made part of the records of the present case. This Court could not make a proper ruling on the matter of prescription on the mere basis of assumptions; such an issue should have been properly raised, argued, and supported by evidences submitted by the parties themselves before the BIR and the courts below.

B. Granting that this Court can take cognizance of the defense of prescription, this Court finds that the assessment of the withholding tax liability against PNOC and collection of the tax assessed were done within the prescriptive period. Assuming, for the sake of argument, that this Court can give due course to the defense of prescription, it finds that the assessment against PNB for its withholding tax liability for taxable year 1985 and the collection of the tax assessed therein were accomplished within the prescribed periods for assessment and collection under the NIRC of 1977, as amended. If this Court adopts the assumption made by the dissenting opinion that PNB filed its withholding tax return for the last quarter of 1985 on 25 January 1986, then the BIR had until 24 January 1989 to assess PNB. The original assessment against PNB was issued as early as 08 October 1986, well-within the three-year prescriptive period for making the assessment as prescribed by the following provisions of the NIRC of 1977, as amended: SEC. 268. Period of limitation upon assessment and collection. Except as provided in the succeeding section, internal revenue taxes shall be assessed within three years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period SEC. 269. Exceptions as to period of limitation of assessment and collection of taxes. (c) Any internal revenue tax which has been assessed within the period of limitation above-prescribed may be collected by distraint or levy or by a proceeding in court within three years following the assessment of the tax. Sections 268 and 269(c) of the NIRC of 1977, as amended, should be read in conjunction with one another. Section 268 requires that assessment be made within three years from the last day prescribed by law for the filing of the return. Section 269(c), on the other hand, provides that when an assessment is issued within the prescribed period provided in Section 268, the BIR has three years, counted from the date of the assessment, to collect the tax assessed either by distraint, levy or court action. Therefore, when an assessment is timely issued in accordance with Section 268, the BIR is given another three-year period, under Section 269(c), within which to collect the tax assessed, reckoned from the date of the assessment. In the case of PNB, an assessment was issued against it by the BIR on 08 October 1986, so that the BIR had until 07 October 1989 to enforce it and to collect the tax assessed. The filing, however, by private respondent Savellano of his Amended Petition for Review before the CTA on 02 July 1988 already constituted a judicial action for collection of the tax assessed which stops the running of the three-year prescriptive period for collection thereof. A judicial action for the collection of a tax may be initiated by the filing of a complaint with the proper regular trial court; or where the assessment is appealed to the CTA, by filing an answer to the taxpayer's petition for review wherein payment of the tax is prayed for.106 The present case is unique, however, because the Petition for Review was filed by private respondent Savellano, the informer, against the BIR, PNOC, and PNB. The BIR, the collecting

government agency; PNOC, the taxpayer; and PNB, the withholding agent, initially found themselves on the same side. The prayer in the Amended Petition for Review of private respondent Savellano reads: WHEREFORE, in view of the foregoing, petitioner respectfully prays that the compromise agreement of June 22, 1987 be reviewed and declared null and void, and that this Court directs: a) respondent Commissioner to enforce and collect and respondents PNB and/or PNOC to pay in a joint and several capacity, the total tax liability of P387,987,785.73, plus interests from 31 October 1986; and b) respondent Commissioner to pay unto petitioner, as informer's reward, 15% of the tax liability collected under clause (a) hereof. Other equitable reliefs under the premises are likewise prayed for.107 (Underscoring ours.) Private respondent Savellano, in his Amended Petition for Review in CTA Case No. 4249, prayed for (1) the CTA to direct the BIR Commissioner to enforce and collect the tax, and (2) PNB and/or PNOC to pay the tax making CTA Case No. 4249 a collection case. That the Amended Petition for Review was filed by the informer and not the taxpayer; and that the prayer for the enforcement of the tax assessment and payment of the tax was also made by the informer, not the BIR, should not affect the nature of the case as a judicial action for collection. In case the CTA grants the Petition and the prayer therein, as what has happened in the present case, the ultimate result would be the collection of the tax assessed. Consequently, upon the filing of the Amended Petition for Review by private respondent Savellano, judicial action for collection of the tax had been initiated and the running of the prescriptive period for collection of the said tax was terminated. Supposing that CTA Case No. 4249 is not a collection case which stops the running of the prescriptive period for the collection of the tax, CTA Case No. 4249, at the very least, suspends the running of the said prescriptive period. Under Section 271 of the NIRC of 1977, as amended, the running of the prescriptive period to collect deficiency taxes shall be suspended for the period during which the BIR Commissioner is prohibited from beginning a distraint or levy or instituting a proceeding in court, and for 60 days thereafter.108 Just as in the cases of Republic v. Ker & Co., Ltd.109 and Protector's Services, Inc. v. Court of Appeals,110 this Court declares herein that the pendency of the present case before the CTA, the Court of Appeals and this Court, legally prevents the BIR Commissioner from instituting an action for collection of the same tax liabilities assessed against PNOC and PNB in the CTA or the regular trial courts. To rule otherwise would be to violate the judicial policy of avoiding multiplicity of suits and the rule on lis pendens. Once again, that CTA Case No. 4249 was initiated by private respondent Savellano, the informer, instead of PNOC, the taxpayer, or PNB, the withholding agent, would not prevent the suspension of the running of the prescriptive period for collection of the tax. What is controlling herein is the fact that the BIR Commissioner cannot file a judicial action in any other court for the collection of the tax because such a case would necessarily involve the same parties and involve the same issues already being litigated before the CTA in CTA Case No. 4249. The three-year prescriptive period for collection of the tax shall commence to run only after the

promulgation of the decision of this Court in which the issues of the present case are resolved with finality. Whether the filing of the Amended Petition for Review by private respondent Savellano entirely stops or merely suspends the running of the prescriptive period for collection of the tax, it had been premature for the BIR Commissioner to issue a writ of garnishment against PNB on 12 August 1991 and for the Central Bank of the Philippines to debit the account of PNB on 02 September 1992 pursuant to the said writ, because the case was by then, pending review by the Court of Appeals. However, since this Court already finds that the compromise agreement is without force and effect and hereby orders the enforcement of the assessment against PNB, then, any issue or controversy arising from the premature garnishment of PNB's account and collection of the tax by the BIR has become moot and academic at this point. V Additional Informer's Reward Private respondent Savellano is entitled to additional informer's reward since the BIR had already collected the full amount of the tax assessment against PNB. PNOC insists that private respondent Savellano is not entitled to additional informer's reward because there was no voluntary payment of the withholding tax liability. PNOC, however, fails to state any legal basis for its argument. Section 316(1) of the NIRC of 1977, as amended, granted a reward to an informer equivalent to 15% of the revenues, surcharges, or fees recovered, plus, any fine or penalty imposed and collected.111 The provision was clear and uncomplicated an informer was entitled to a reward of 15% of the total amount actually recovered or collected by the BIR based on his information. The provision did not make any distinction as to the manner the tax liability was collected whether it was through voluntary payment by the taxpayer or through garnishment of the taxpayer's property. Applicable herein is another well-known maxim in statutory construction Ubi lex non distinguit nec nos distinguere debemos when the law does not distinguish, we should not distinguish.112 Pursuant to the writ of garnishment issued by the BIR, the Central Bank issued a debit advice against the demand deposit account of PNB with the Central Bank for the amount of P294,958,450.73, and credited the same amount to the demand deposit account of the Treasurer of the Republic of the Philippines. The Treasurer of the Republic, in turn, already issued a journal voucher transferring P294,958,450.73 to the account of the BIR. Since the BIR had already collected P294,958,450.73 from PNB through the execution of the writ of garnishment over PNB's deposit with the Central Bank, then private respondent Savellano should be awarded 15% thereof as reward since the said collection could still be traced to the information he had given. WHEREFORE, in view of the foregoing, the Petitions of PNOC and PNB in G.R. No. 109976 and G.R. No. 112800, respectively, are hereby DENIED. This Court AFFIRMS the assailed Decisions of the Court of Appeals in CA-G.R. SP No. 29583 and CA-G.R. SP No. 29526, which affirmed the decision of the CTA in CTA Case No. 4249, with modifications, to wit:

(1) The compromise agreement between PNOC and the BIR, dated 22 June 1987, is declared void for being contrary to law and public policy, and is without force and effect; (2)Paragraph 2 of RMO No. 39-86 remains a valid provision of the regulation; (3)The withholding tax assessment against PNB, dated 08 October 1986, had become final and unappealable. The BIR Commissioner is ordered to enforce the said assessment and collect the amount of P294,958,450.73, the balance of tax assessed after crediting the previous payment made by PNOC pursuant to the compromise agreement, dated 22 June 1987; and (4) Private respondent Savellano shall be paid the remainder of his informer's reward, equivalent to 15% of the deficiency withholding tax ordered collected herein, or P 44,243,767.61. SO ORDERED. Quisumbing, Sandoval-Gutierrez, Austria-Martinez, Callejo, Sr., and Garcia, JJ., concur. Davide, Jr., C.J., Corona, and Carpio-Morales, joins J. Carpio in his dissenting opinion. Puno, and Panganiban, J., concurs with the majority and the separate opinion of J. Tinga. Ynares-Santiago, J., no part. Carpio, J., see dissenting opinion. Azcuna, J., no partwas PNB Chairman in 1991. Tinga, J., see separate concurring opinion.