[G.R. No. 104768.
July 21, 2003] Evidence in the record showed that respondent is the owner of a house and lot
Republic of the Philippines, petitioner, vs. Sandiganbayan, Major General
Josephus Q. Ramas and Elizabeth Dimaano, respondents.
DECISION
CARPIO, J.:
The Case
Before this Court is a petition for review on certiorari seeking to set aside the
Resolutions of the Sandiganbayan (First Division) dated 18 November 1991
and 25 March 1992 in Civil Case No. 0037. The first Resolution dismissed
petitioner’s Amended Complaint and ordered the return of the confiscated items
to respondent Elizabeth Dimaano, while the second Resolution denied
petitioner’s Motion for Reconsideration. Petitioner prays for the grant of the
reliefs sought in its Amended Complaint, or in the alternative, for the remand of
this case to the Sandiganbayan (First Division) for further proceedings allowing
petitioner to complete the presentation of its evidence.
Antecedent Facts
Immediately upon her assumption to office following the successful EDSA
Revolution, then President Corazon C. Aquino issued Executive Order No. 1
(“EO No. 1”) creating the Presidential Commission on Good Government
(“PCGG”). EO No. 1 primarily tasked the PCGG to recover all ill-gotten wealth
of former President Ferdinand E. Marcos, his immediate family, relatives,
subordinates and close associates. EO No. 1 vested the PCGG with the power
“(a) to conduct investigation as may be necessary in order to accomplish and
carry out the purposes of this order” and the power “(h) to promulgate such
rules and regulations as may be necessary to carry out the purpose of this
order.” Accordingly, the PCGG, through its then Chairman Jovito R. Salonga,
created an AFP Anti-Graft Board (“AFP Board”) tasked to investigate reports of
unexplained wealth and corrupt practices by AFP personnel, whether in the
active service or retired.
Based on its mandate, the AFP Board investigated various reports of alleged
unexplained wealth of respondent Major General Josephus Q. Ramas
(“Ramas”). On 27 July 1987, the AFP Board issued a Resolution on its findings
and recommendation on the reported unexplained wealth of Ramas. The
relevant part of the Resolution reads:
III. FINDINGS and EVALUATION:
located at 15-Yakan St., La Vista, Quezon City. He is also the owner of a
house and lot located in Cebu City. The lot has an area of 3,327 square
meters.
The value of the property located in Quezon City may be estimated modestly at
P700,000.00.
The equipment/items and communication facilities which were found in the
premises of Elizabeth Dimaano and were confiscated by elements of the PC
Command of Batangas were all covered by invoice receipt in the name of
CAPT. EFREN SALIDO, RSO Command Coy, MSC, PA. These items could
not have been in the possession of Elizabeth Dimaano if not given for her use
by respondent Commanding General of the Philippine Army.
Aside from the military equipment/items and communications equipment, the
raiding team was also able to confiscate money in the amount of P2,870,000.00
and $50,000 US Dollars in the house of Elizabeth Dimaano on 3 March 1986.
Affidavits of members of the Military Security Unit, Military Security Command,
Philippine Army, stationed at Camp Eldridge, Los Baños, Laguna, disclosed
that Elizabeth Dimaano is the mistress of respondent. That respondent usually
goes and stays and sleeps in the alleged house of Elizabeth Dimaano in
Barangay Tengga, Itaas, Batangas City and when he arrives, Elizabeth
Dimaano embraces and kisses respondent. That on February 25, 1986, a
person who rode in a car went to the residence of Elizabeth Dimaano with four
(4) attache cases filled with money and owned by MGen Ramas.
Sworn statement in the record disclosed also that Elizabeth Dimaano had no
visible means of income and is supported by respondent for she was formerly a
mere secretary.
Taking in toto the evidence, Elizabeth Dimaano could not have used the military
equipment/items seized in her house on March 3, 1986 without the consent of
respondent, he being the Commanding General of the Philippine Army. It is
also impossible for Elizabeth Dimaano to claim that she owns the
P2,870,000.00 and $50,000 US Dollars for she had no visible source of
income.
This money was never declared in the Statement of Assets and Liabilities of
respondent. There was an intention to cover the existence of these money
because these are all ill-gotten and unexplained wealth. Were it not for the
affidavits of the members of the Military Security Unit assigned at Camp
Eldridge, Los Baños, Laguna, the existence and ownership of these money
would have never been known.
The Statement of Assets and Liabilities of respondent were also submitted for
scrutiny and analysis by the Board’s consultant. Although the amount of
P2,870,000.00 and $50,000 US Dollars were not included, still it was disclosed
that respondent has an unexplained wealth of P104,134. 60.
IV. CONCLUSION:
In view of the foregoing, the Board finds that a prima facie case exists against
respondent for ill-gotten and unexplained wealth in the amount of
P2,974,134.00 and $50,000 US Dollars.
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be
prosecuted and tried for violation of RA 3019, as amended, otherwise known as
“Anti-Graft and Corrupt Practices Act” and RA 1379, as amended, otherwise
known as “The Act for the Forfeiture of Unlawfully Acquired Property.”
Thus, on 1 August 1987, the PCGG filed a petition for forfeiture under Republic
Act No. 1379 (“RA No. 1379”) against Ramas.
Before Ramas could answer the petition, then Solicitor General Francisco I.
Chavez filed an Amended Complaint naming the Republic of the Philippines
(“petitioner”), represented by the PCGG, as plaintiff and Ramas as defendant.
The Amended Complaint also impleaded Elizabeth Dimaano (“Dimaano”) as
co-defendant.
The Amended Complaint alleged that Ramas was the Commanding General of
the Philippine Army until 1986. On the other hand, Dimaano was a confidential
agent of the Military Security Unit, Philippine Army, assigned as a clerk-typist at
the office of Ramas from 1 January 1978 to February 1979. The Amended
Complaint further alleged that Ramas “acquired funds, assets and properties
manifestly out of proportion to his salary as an army officer and his other
income from legitimately acquired property by taking undue advantage of his
public office and/or using his power, authority and influence as such officer of
the Armed Forces of the Philippines and as a subordinate and close associate
of the deposed President Ferdinand Marcos.”
The Amended Complaint also alleged that the AFP Board, after a previous
inquiry, found reasonable ground to believe that respondents have violated RA
No. 1379. The Amended Complaint prayed for, among others, the forfeiture of
respondents’ properties, funds and equipment in favor of the State.
Ramas filed an Answer with Special and/or Affirmative Defenses and
Compulsory Counterclaim to the Amended Complaint. In his Answer, Ramas
contended that his property consisted only of a residential house at La Vista
Subdivision, Quezon City, valued at P700,000, which was not out of proportion
to his salary and other legitimate income. He denied ownership of any mansion
in Cebu City and the cash, communications equipment and other items
confiscated from the house of Dimaano.
Dimaano filed her own Answer to the Amended Complaint. Admitting her
employment as a clerk-typist in the office of Ramas from January-November
1978 only, Dimaano claimed ownership of the monies, communications
equipment, jewelry and land titles taken from her house by the Philippine
Constabulary raiding team.
After termination of the pre-trial, the court set the case for trial on the merits on
9-11 November 1988.
On 9 November 1988, petitioner asked for a deferment of the hearing due to its
lack of preparation for trial and the absence of witnesses and vital documents
to support its case. The court reset the hearing to 17 and 18 April 1989.
On 13 April 1989, petitioner filed a motion for leave to amend the complaint in
order “to charge the delinquent properties with being subject to forfeiture as
having been unlawfully acquired by defendant Dimaano alone x x x.”
Nevertheless, in an order dated 17 April 1989, the Sandiganbayan proceeded
with petitioner’s presentation of evidence on the ground that the motion for
leave to amend complaint did not state when petitioner would file the amended
complaint. The Sandiganbayan further stated that the subject matter of the
amended complaint was on its face vague and not related to the existing
complaint. The Sandiganbayan also held that due to the time that the case had
been pending in court, petitioner should proceed to present its evidence.
After presenting only three witnesses, petitioner asked for a postponement of
the trial.
On 28 September 1989, during the continuation of the trial, petitioner
manifested its inability to proceed to trial because of the absence of other
witnesses or lack of further evidence to present. Instead, petitioner reiterated
its motion to amend the complaint to conform to the evidence already
presented or to change the averments to show that Dimaano alone unlawfully
acquired the monies or properties subject of the forfeiture.
The Sandiganbayan noted that petitioner had already delayed the case for over
a year mainly because of its many postponements. Moreover, petitioner would
want the case to revert to its preliminary stage when in fact the case had long
been ready for trial. The Sandiganbayan ordered petitioner to prepare for Ruling of the Sandiganbayan
presentation of its additional evidence, if any.
The Sandiganbayan dismissed the Amended Complaint on the following
During the trial on 23 March 1990, petitioner again admitted its inability to grounds:
present further evidence. Giving petitioner one more chance to present further
evidence or to amend the complaint to conform to its evidence, the (1.) The actions taken by the PCGG are not in accordance with the
Sandiganbayan reset the trial to 18 May 1990. The Sandiganbayan, however, rulings of the Supreme Court in Cruz, Jr. v. Sandiganbayan and
hinted that the re-setting was without prejudice to any action that private Republic v. Migrino which involve the same issues.
respondents might take under the circumstances.
(2.) No previous inquiry similar to preliminary investigations in criminal
However, on 18 May 1990, petitioner again expressed its inability to proceed to cases was conducted against Ramas and Dimaano.
trial because it had no further evidence to present. Again, in the interest of
justice, the Sandiganbayan granted petitioner 60 days within which to file an (3.) The evidence adduced against Ramas does not constitute a
appropriate pleading. The Sandiganbayan, however, warned petitioner that prima facie case against him.
failure to act would constrain the court to take drastic action.
(4.) There was an illegal search and seizure of the items confiscated.
Private respondents then filed their motions to dismiss based on Republic v.
Migrino. The Court held in Migrino that the PCGG does not have jurisdiction
to investigate and prosecute military officers by reason of mere position held The Issues
without a showing that they are “subordinates” of former President Marcos.
Petitioner raises the following issues:
On 18 November 1991, the Sandiganbayan rendered a resolution, the
dispositive portion of which states: A. RESPONDENT COURT SERIOUSLY ERRED IN
CONCLUDING THAT PETITIONER’S EVIDENCE
WHEREFORE, judgment is hereby rendered dismissing the Amended CANNOT MAKE A CASE FOR FORFEITURE AND
Complaint, without pronouncement as to costs. The counterclaims are likewise THAT THERE WAS NO SHOWING OF
dismissed for lack of merit, but the confiscated sum of money, communications CONSPIRACY, COLLUSION OR RELATIONSHIP BY
equipment, jewelry and land titles are ordered returned to Elizabeth Dimaano. CONSANGUINITY OR AFFINITY BY AND BETWEEN
The records of this case are hereby remanded and referred to the Hon. RESPONDENT RAMAS AND RESPONDENT
Ombudsman, who has primary jurisdiction over the forfeiture cases under R.A. DIMAANO NOTWITHSTANDING THE FACT THAT
No. 1379, for such appropriate action as the evidence warrants. This case is SUCH CONCLUSIONS WERE CLEARLY
also referred to the Commissioner of the Bureau of Internal Revenue for a UNFOUNDED AND PREMATURE, HAVING BEEN
determination of any tax liability of respondent Elizabeth Dimaano in connection RENDERED PRIOR TO THE COMPLETION OF THE
herewith. PRESENTATION OF THE EVIDENCE OF THE
PETITIONER.
SO ORDERED.
B. RESPONDENT COURT SERIOUSLY ERRED IN
HOLDING THAT THE ACTIONS TAKEN BY THE
On 4 December 1991, petitioner filed its Motion for Reconsideration. PETITIONER, INCLUDING THE FILING OF THE
ORIGINAL COMPLAINT AND THE AMENDED
In answer to the Motion for Reconsideration, private respondents filed a Joint COMPLAINT, SHOULD BE STRUCK OUT IN LINE
Comment/Opposition to which petitioner filed its Reply on 10 January 1992. WITH THE RULINGS OF THE SUPREME COURT IN
CRUZ, JR. v. SANDIGANBAYAN, 194 SCRA 474 AND
On 25 March 1992, the Sandiganbayan rendered a Resolution denying the REPUBLIC v. MIGRINO, 189 SCRA 289,
Motion for Reconsideration. NOTWITHSTANDING THE FACT THAT:
 1. The cases of Cruz, Jr. v. Sandiganbayan,
supra, and Republic v. Migrino, supra, are
clearly not applicable to this case;
2. Any procedural defect in the institution of the
complaint in Civil Case No. 0037 was cured
and/or waived by respondents with the filing of
their respective answers with counterclaim;
and
3. The separate motions to dismiss were evidently
improper considering that they were filed after
commencement of the presentation of the
evidence of the petitioner and even before the
latter was allowed to formally offer its evidence
and rest its case;
C. RESPONDENT COURT SERIOUSLY ERRED IN
HOLDING THAT THE ARTICLES AND THINGS SUCH
AS SUMS OF MONEY, COMMUNICATIONS
EQUIPMENT, JEWELRY AND LAND TITLES
CONFISCATED FROM THE HOUSE OF
RESPONDENT DIMAANO WERE ILLEGALLY
SEIZED AND THEREFORE EXCLUDED AS
EVIDENCE.
The Court’s Ruling
First Issue: PCGG’s Jurisdiction to Investigate Private Respondents
This case involves a revisiting of an old issue already decided by this Court in
Cruz, Jr. v. Sandiganbayan and Republic v. Migrino.
The primary issue for resolution is whether the PCGG has the jurisdiction to
investigate and cause the filing of a forfeiture petition against Ramas and
Dimaano for unexplained wealth under RA No. 1379.
We hold that PCGG has no such jurisdiction.
The PCGG created the AFP Board to investigate the unexplained wealth and
corrupt practices of AFP personnel, whether in the active service or retired.
The PCGG tasked the AFP Board to make the necessary recommendations to
appropriate government agencies on the action to be taken based on its
findings. The PCGG gave this task to the AFP Board pursuant to the PCGG’s
power under Section 3 of EO No. 1 “to conduct investigation as may be
necessary in order to accomplish and to carry out the purposes of this order.”
EO No. 1 gave the PCGG specific responsibilities, to wit:
SEC. 2. The Commission shall be charged with the task of assisting the
President in regard to the following matters:
(a) The recovery of all ill-gotten wealth accumulated by former
President Ferdinand E. Marcos, his immediate family,
relatives, subordinates and close associates, whether located
in the Philippines or abroad, including the takeover and
sequestration of all business enterprises and entities owned
or controlled by them, during his administration, directly or
through nominees, by taking undue advantage of their public
office and/ or using their powers, authority, influence,
connections or relationship.
(b) The investigation of such cases of graft and corruption as the
President may assign to the Commission from time to time.
x x x.
The PCGG, through the AFP Board, can only investigate the unexplained
wealth and corrupt practices of AFP personnel who fall under either of the two
categories mentioned in Section 2 of EO No. 1. These are: (1) AFP personnel
who have accumulated ill-gotten wealth during the administration of former
President Marcos by being the latter’s immediate family, relative, subordinate or
close associate, taking undue advantage of their public office or using their
powers, influence x x x; or (2) AFP personnel involved in other cases of graft
and corruption provided the President assigns their cases to the PCGG.
Petitioner, however, does not claim that the President assigned Ramas’ case to
the PCGG. Therefore, Ramas’ case should fall under the first category of AFP
personnel before the PCGG could exercise its jurisdiction over him. Petitioner
argues that Ramas was undoubtedly a subordinate of former President Marcos
because of his position as the Commanding General of the Philippine Army.
Petitioner claims that Ramas’ position enabled him to receive orders directly
from his commander-in-chief, undeniably making him a subordinate of former
President Marcos.
We hold that Ramas was not a “subordinate” of former President Marcos in the
sense contemplated under EO No. 1 and its amendments.
Mere position held by a military officer does not automatically make him a
“subordinate” as this term is used in EO Nos. 1, 2, 14 and 14-A absent a
showing that he enjoyed close association with former President Marcos.
Migrino discussed this issue in this wise:
A close reading of EO No. 1 and related executive orders will readily show what
is contemplated within the term ‘subordinate.’ The Whereas Clauses of EO No.
1 express the urgent need to recover the ill-gotten wealth amassed by former
President Ferdinand E. Marcos, his immediate family, relatives, and close
associates both here and abroad.
EO No. 2 freezes ‘all assets and properties in the Philippines in which former
President Marcos and/or his wife, Mrs. Imelda Marcos, their close relatives,
subordinates, business associates, dummies, agents, or nominees have any
interest or participation.’
Applying the rule in statutory construction known as ejusdem generis that is-
‘[W]here general words follow an enumeration of persons or things by words of
a particular and specific meaning, such general words are not to be construed
in their widest extent, but are to be held as applying only to persons or things of
the same kind or class as those specifically mentioned [Smith, Bell & Co, Ltd.
vs. Register of Deeds of Davao, 96 Phil. 53, 58, citing Black on Interpretation of
Laws, 2nd Ed., 203].’
[T]he term “subordinate” as used in EO Nos. 1 & 2 refers to one who enjoys a
close association with former President Marcos and/or his wife, similar to the
immediate family member, relative, and close associate in EO No. 1 and
the close relative, business associate, dummy, agent, or nominee in EO
No. 2.
xxx
It does not suffice, as in this case, that the respondent is or was a government
official or employee during the administration of former President Marcos.
There must be a prima facie showing that the respondent unlawfully
accumulated wealth by virtue of his close association or relation with
former Pres. Marcos and/or his wife. (Emphasis supplied)
Ramas’ position alone as Commanding General of the Philippine Army with the
rank of Major General does not suffice to make him a “subordinate” of former
President Marcos for purposes of EO No. 1 and its amendments. The PCGG
has to provide a prima facie showing that Ramas was a close associate of
former President Marcos, in the same manner that business associates,
dummies, agents or nominees of former President Marcos were close to him.
Such close association is manifested either by Ramas’ complicity with former
President Marcos in the accumulation of ill-gotten wealth by the deposed
President or by former President Marcos’ acquiescence in Ramas’ own
accumulation of ill-gotten wealth if any.
This, the PCGG failed to do.
Petitioner’s attempt to differentiate the instant case from Migrino does not
convince us. Petitioner argues that unlike in Migrino, the AFP Board
Resolution in the instant case states that the AFP Board conducted the
investigation pursuant to EO Nos. 1, 2, 14 and 14-A in relation to RA No. 1379.
Petitioner asserts that there is a presumption that the PCGG was acting within
its jurisdiction of investigating crony-related cases of graft and corruption and
that Ramas was truly a subordinate of the former President. However, the
same AFP Board Resolution belies this contention. Although the Resolution
begins with such statement, it ends with the following recommendation:
V. RECOMMENDATION:
Wherefore it is recommended that Maj. Gen. Josephus Q. Ramas (ret.) be
prosecuted and tried for violation of RA 3019, as amended, otherwise known as
“Anti-Graft and Corrupt Practices Act” and RA 1379, as amended, otherwise
known as “The Act for the Forfeiture of Unlawfully Acquired Property.”
Thus, although the PCGG sought to investigate and prosecute private
respondents under EO Nos. 1, 2, 14 and 14-A, the result yielded a finding of
violation of Republic Acts Nos. 3019 and 1379 without any relation to EO Nos.
1, 2, 14 and 14-A. This absence of relation to EO No. 1 and its amendments
proves fatal to petitioner’s case. EO No. 1 created the PCGG for a specific and
limited purpose, and necessarily its powers must be construed to address such
specific and limited purpose.
Moreover, the resolution of the AFP Board and even the Amended Complaint
do not show that the properties Ramas allegedly owned were accumulated by
him in his capacity as a “subordinate” of his commander-in-chief. Petitioner
merely enumerated the properties Ramas allegedly owned and suggested that
these properties were disproportionate to his salary and other legitimate income
without showing that Ramas amassed them because of his close association
with former President Marcos. Petitioner, in fact, admits that the AFP Board
resolution does not contain a finding that Ramas accumulated his wealth
because of his close association with former President Marcos, thus:
10. While it is true that the resolution of the Anti-Graft Board of the New
Armed Forces of the Philippines did not categorically find a prima facie
evidence showing that respondent Ramas unlawfully accumulated wealth
by virtue of his close association or relation with former President Marcos
and/or his wife, it is submitted that such omission was not fatal. The
resolution of the Anti-Graft Board should be read in the context of the law
creating the same and the objective of the investigation which was, as stated in
the above, pursuant to Republic Act Nos. 3019 and 1379 in relation to
Executive Order Nos. 1, 2, 14 and 14-a; (Emphasis supplied)
Such omission is fatal. Petitioner forgets that it is precisely a prima facie
showing that the ill-gotten wealth was accumulated by a “subordinate” of former
President Marcos that vests jurisdiction on PCGG. EO No. 1 clearly premises
the creation of the PCGG on the urgent need to recover all ill-gotten wealth
amassed by former President Marcos, his immediate family, relatives,
subordinates and close associates. Therefore, to say that such omission was
not fatal is clearly contrary to the intent behind the creation of the PCGG.
In Cruz, Jr. v. Sandiganbayan, the Court outlined the cases that fall under the
jurisdiction of the PCGG pursuant to EO Nos. 1, 2, 14, 14-A:
A careful reading of Sections 2(a) and 3 of Executive Order No. 1 in relation
with Sections 1, 2 and 3 of Executive Order No. 14, shows what the authority of
the respondent PCGG to investigate and prosecute covers:
(a) the investigation and prosecution of the civil action for the
recovery of ill-gotten wealth under Republic Act No. 1379,
accumulated by former President Marcos, his immediate
family, relatives, subordinates and close associates,
whether located in the Philippines or abroad, including the
take-over or sequestration of all business enterprises and
entities owned or controlled by them, during his administration,
directly or through his nominees, by taking undue advantage
of their public office and/or using their powers, authority
and influence, connections or relationships; and
(b) the investigation and prosecution of such offenses committed in
the acquisition of said ill-gotten wealth as contemplated under
Section 2(a) of Executive Order No. 1.
However, other violations of the Anti-Graft and Corrupt Practices Act not
otherwise falling under the foregoing categories, require a previous
authority of the President for the respondent PCGG to investigate and
prosecute in accordance with Section 2 (b) of Executive Order No. 1.
Otherwise, jurisdiction over such cases is vested in the Ombudsman and
other duly authorized investigating agencies such as the provincial and
city prosecutors, their assistants, the Chief State Prosecutor and his
assistants and the state prosecutors. (Emphasis supplied)
The proper government agencies, and not the PCGG, should investigate and
prosecute forfeiture petitions not falling under EO No. 1 and its amendments.
The preliminary investigation of unexplained wealth amassed on or before 25
February 1986 falls under the jurisdiction of the Ombudsman, while the
authority to file the corresponding forfeiture petition rests with the Solicitor
General. The Ombudsman Act or Republic Act No. 6770 (“RA No. 6770”)
vests in the Ombudsman the power to conduct preliminary investigation and to
file forfeiture proceedings involving unexplained wealth amassed after 25
February 1986.
After the pronouncements of the Court in Cruz, the PCGG still pursued this
case despite the absence of a prima facie finding that Ramas was a
“subordinate” of former President Marcos. The petition for forfeiture filed with
the Sandiganbayan should be dismissed for lack of authority by the PCGG to
investigate respondents since there is no prima facie showing that EO No. 1
and its amendments apply to respondents. The AFP Board Resolution and
even the Amended Complaint state that there are violations of RA Nos. 3019
and 1379. Thus, the PCGG should have recommended Ramas’ case to the
Ombudsman who has jurisdiction to conduct the preliminary investigation of
ordinary unexplained wealth and graft cases. As stated in Migrino:
[But] in view of the patent lack of authority of the PCGG to investigate and
cause the prosecution of private respondent for violation of Rep. Acts Nos.
3019 and 1379, the PCGG must also be enjoined from proceeding with the
case, without prejudice to any action that may be taken by the proper
prosecutory agency. The rule of law mandates that an agency of government
be allowed to exercise only the powers granted to it.
Petitioner’s argument that private respondents have waived any defect in the
filing of the forfeiture petition by submitting their respective Answers with
counterclaim deserves no merit as well.
Petitioner has no jurisdiction over private respondents. Thus, there is no
jurisdiction to waive in the first place. The PCGG cannot exercise investigative
or prosecutorial powers never granted to it. PCGG’s powers are specific and
limited. Unless given additional assignment by the President, PCGG’s sole
task is only to recover the ill-gotten wealth of the Marcoses, their relatives and
cronies. Without these elements, the PCGG cannot claim jurisdiction over a
case.
Private respondents questioned the authority and jurisdiction of the PCGG to
investigate and prosecute their cases by filing their Motion to Dismiss as soon
as they learned of the pronouncement of the Court in Migrino. This case was
decided on 30 August 1990, which explains why private respondents only filed
their Motion to Dismiss on 8 October 1990. Nevertheless, we have held that
the parties may raise lack of jurisdiction at any stage of the proceeding. Thus,
we hold that there was no waiver of jurisdiction in this case. Jurisdiction is
vested by law and not by the parties to an action.
Consequently, the petition should be dismissed for lack of jurisdiction by the
PCGG to conduct the preliminary investigation. The Ombudsman may still
conduct the proper preliminary investigation for violation of RA No. 1379, and if
warranted, the Solicitor General may file the forfeiture petition with the
Sandiganbayan. The right of the State to forfeit unexplained wealth under RA
No. 1379 is not subject to prescription, laches or estoppel.
Second Issue: Propriety of Dismissal of Case
Before Completion of Presentation of Evidence
Petitioner also contends that the Sandiganbayan erred in dismissing the case
before completion of the presentation of petitioner’s evidence.
We disagree.
Based on the findings of the Sandiganbayan and the records of this case, we
find that petitioner has only itself to blame for non-completion of the
presentation of its evidence. First, this case has been pending for four years
before the Sandiganbayan dismissed it. Petitioner filed its Amended
Complaint on 11 August 1987, and only began to present its evidence on
17 April 1989. Petitioner had almost two years to prepare its evidence.
However, despite this sufficient time, petitioner still delayed the presentation of
the rest of its evidence by filing numerous motions for postponements and
extensions. Even before the date set for the presentation of its evidence,
petitioner filed, on 13 April 1989, a Motion for Leave to Amend the Complaint.
The motion sought “to charge the delinquent properties (which comprise most
of petitioner’s evidence) with being subject to forfeiture as having been
unlawfully acquired by defendant Dimaano alone x x x.”
The Sandiganbayan, however, refused to defer the presentation of petitioner’s
evidence since petitioner did not state when it would file the amended
complaint. On 18 April 1989, the Sandiganbayan set the continuation of the
presentation of evidence on 28-29 September and 9-11 October 1989, giving
petitioner ample time to prepare its evidence. Still, on 28 September 1989,
petitioner manifested its inability to proceed with the presentation of its
evidence. The Sandiganbayan issued an Order expressing its view on the
matter, to wit:
The Court has gone through extended inquiry and a narration of the above
events because this case has been ready for trial for over a year and much of
the delay hereon has been due to the inability of the government to produce on
scheduled dates for pre-trial and for trial documents and witnesses, allegedly
upon the failure of the military to supply them for the preparation of the
presentation of evidence thereon. Of equal interest is the fact that this Court
has been held to task in public about its alleged failure to move cases such as
this one beyond the preliminary stage, when, in view of the developments such
as those of today, this Court is now faced with a situation where a case already
in progress will revert back to the preliminary stage, despite a five-month pause
where appropriate action could have been undertaken by the plaintiff Republic.
On 9 October 1989, the PCGG manifested in court that it was conducting a
preliminary investigation on the unexplained wealth of private respondents as
mandated by RA No. 1379. The PCGG prayed for an additional four months to
conduct the preliminary investigation. The Sandiganbayan granted this request
and scheduled the presentation of evidence on 26-29 March 1990. However,
on the scheduled date, petitioner failed to inform the court of the result of the
preliminary investigation the PCGG supposedly conducted. Again, the
Sandiganbayan gave petitioner until 18 May 1990 to continue with the
presentation of its evidence and to inform the court of “what lies ahead insofar
as the status of the case is concerned x x x.” Still on the date set, petitioner
failed to present its evidence. Finally, on 11 July 1990, petitioner filed its Re-
Amended Complaint. The Sandiganbayan correctly observed that a case
already pending for years would revert to its preliminary stage if the court were
to accept the Re-Amended Complaint.
Based on these circumstances, obviously petitioner has only itself to blame for
failure to complete the presentation of its evidence. The Sandiganbayan gave
petitioner more than sufficient time to finish the presentation of its evidence.
The Sandiganbayan overlooked petitioner’s delays and yet petitioner ended the
long-string of delays with the filing of a Re-Amended Complaint, which would
only prolong even more the disposition of the case.
Moreover, the pronouncements of the Court in Migrino and Cruz prompted the
Sandiganbayan to dismiss the case since the PCGG has no jurisdiction to
investigate and prosecute the case against private respondents. This alone
would have been sufficient legal basis for the Sandiganbayan to dismiss the
forfeiture case against private respondents.
Thus, we hold that the Sandiganbayan did not err in dismissing the case before
completion of the presentation of petitioner’s evidence.
Third Issue: Legality of the Search and Seizure
Petitioner claims that the Sandiganbayan erred in declaring the properties
confiscated from Dimaano’s house as illegally seized and therefore
inadmissible in evidence. This issue bears a significant effect on petitioner’s
case since these properties comprise most of petitioner’s evidence against
private respondents. Petitioner will not have much evidence to support its case
against private respondents if these properties are inadmissible in evidence.
On 3 March 1986, the Constabulary raiding team served at Dimaano’s
residence a search warrant captioned “Illegal Possession of Firearms and
Ammunition.” Dimaano was not present during the raid but Dimaano’s cousins
witnessed the raid. The raiding team seized the items detailed in the seizure
receipt together with other items not included in the search warrant. The
raiding team seized these items: one baby armalite rifle with two magazines;
40 rounds of 5.56 ammunition; one pistol, caliber .45; communications
equipment, cash consisting of P2,870,000 and US$50,000, jewelry, and land
titles.
Petitioner wants the Court to take judicial notice that the raiding team
conducted the search and seizure “on March 3, 1986 or five days after the
successful EDSA revolution.” Petitioner argues that a revolutionary
government was operative at that time by virtue of Proclamation No. 1
announcing that President Aquino and Vice President Laurel were “taking
power in the name and by the will of the Filipino people.” Petitioner asserts that
the revolutionary government effectively withheld the operation of the 1973
Constitution which guaranteed private respondents’ exclusionary right.
Moreover, petitioner argues that the exclusionary right arising from an illegal
search applies only beginning 2 February 1987, the date of ratification of the
1987 Constitution. Petitioner contends that all rights under the Bill of Rights
had already reverted to its embryonic stage at the time of the search.
Therefore, the government may confiscate the monies and items taken from
Dimaano and use the same in evidence against her since at the time of their
seizure, private respondents did not enjoy any constitutional right.
Petitioner is partly right in its arguments.
The EDSA Revolution took place on 23-25 February 1986. As succinctly
stated in President Aquino’s Proclamation No. 3 dated 25 March 1986, the
EDSA Revolution was “done in defiance of the provisions of the 1973
Constitution.” The resulting government was indisputably a revolutionary
government bound by no constitution or legal limitations except treaty
obligations that the revolutionary government, as the de jure government in the
Philippines, assumed under international law.
The correct issues are: (1) whether the revolutionary government was bound
by the Bill of Rights of the 1973 Constitution during the interregnum, that is,
after the actual and effective take-over of power by the revolutionary
government following the cessation of resistance by loyalist forces up to 24
March 1986 (immediately before the adoption of the Provisional Constitution);
and (2) whether the protection accorded to individuals under the International
Covenant on Civil and Political Rights (“Covenant”) and the Universal
Declaration of Human Rights (“Declaration”) remained in effect during the
interregnum.
We hold that the Bill of Rights under the 1973 Constitution was not operative
during the interregnum. However, we rule that the protection accorded to
individuals under the Covenant and the Declaration remained in effect during
the interregnum.
During the interregnum, the directives and orders of the revolutionary
government were the supreme law because no constitution limited the extent
and scope of such directives and orders. With the abrogation of the 1973
Constitution by the successful revolution, there was no municipal law higher
than the directives and orders of the revolutionary government. Thus, during
the interregnum, a person could not invoke any exclusionary right under a Bill
of Rights because there was neither a constitution nor a Bill of Rights during the
interregnum. As the Court explained in Letter of Associate Justice Reynato
S. Puno:
A revolution has been defined as “the complete overthrow of the established
government in any country or state by those who were previously subject to it”
or as “a sudden, radical and fundamental change in the government or political
system, usually effected with violence or at least some acts of violence.” In
Kelsen's book, General Theory of Law and State, it is defined as that which
“occurs whenever the legal order of a community is nullified and replaced by a
new order . . . a way not prescribed by the first order itself.”
It was through the February 1986 revolution, a relatively peaceful one, and
more popularly known as the “people power revolution” that the Filipino people
tore themselves away from an existing regime. This revolution also saw the
unprecedented rise to power of the Aquino government.
From the natural law point of view, the right of revolution has been defined as
“an inherent right of a people to cast out their rulers, change their policy or
effect radical reforms in their system of government or institutions by force or a
general uprising when the legal and constitutional methods of making such
change have proved inadequate or are so obstructed as to be unavailable.” It
has been said that “the locus of positive law-making power lies with the people
of the state” and from there is derived “the right of the people to abolish, to
reform and to alter any existing form of government without regard to the
existing constitution.”
xxx
It is widely known that Mrs. Aquino’s rise to the presidency was not due
to constitutional processes; in fact, it was achieved in violation of the
provisions of the 1973 Constitution as a Batasang Pambansa resolution
had earlier declared Mr. Marcos as the winner in the 1986 presidential
election. Thus it can be said that the organization of Mrs. Aquino’s
Government which was met by little resistance and her control of the state
evidenced by the appointment of the Cabinet and other key officers of the
administration, the departure of the Marcos Cabinet officials, revamp of the
Judiciary and the Military signaled the point where the legal system then in
effect, had ceased to be obeyed by the Filipino. (Emphasis supplied)
To hold that the Bill of Rights under the 1973 Constitution remained operative
during the interregnum would render void all sequestration orders issued by the
Philippine Commission on Good Government (“PCGG”) before the adoption of
the Freedom Constitution. The sequestration orders, which direct the freezing
and even the take-over of private property by mere executive issuance without
judicial action, would violate the due process and search and seizure clauses of
the Bill of Rights.
During the interregnum, the government in power was concededly a
revolutionary government bound by no constitution. No one could validly
question the sequestration orders as violative of the Bill of Rights because
there was no Bill of Rights during the interregnum. However, upon the adoption
of the Freedom Constitution, the sequestered companies assailed the
sequestration orders as contrary to the Bill of Rights of the Freedom
Constitution.
In Bataan Shipyard & Engineering Co. Inc. vs. Presidential Commission
on Good Government, petitioner Baseco, while conceding there was no Bill of
Rights during the interregnum, questioned the continued validity of the
sequestration orders upon adoption of the Freedom Constitution in view of the
due process clause in its Bill of Rights. The Court ruled that the Freedom
Constitution, and later the 1987 Constitution, expressly recognized the validity
of sequestration orders, thus:
If any doubt should still persist in the face of the foregoing considerations as to
the validity and propriety of sequestration, freeze and takeover orders, it should
be dispelled by the fact that these particular remedies and the authority of the
PCGG to issue them have received constitutional approbation and sanction. As
already mentioned, the Provisional or “Freedom” Constitution recognizes the
power and duty of the President to enact “measures to achieve the mandate of
the people to . . . (r)ecover ill-gotten properties amassed by the leaders and
supporters of the previous regime and protect the interest of the people through
orders of sequestration or freezing of assets or accounts.” And as also already
adverted to, Section 26, Article XVIII of the 1987 Constitution treats of, and
ratifies the “authority to issue sequestration or freeze orders under
Proclamation No. 3 dated March 25, 1986.”
The framers of both the Freedom Constitution and the 1987 Constitution were
fully aware that the sequestration orders would clash with the Bill of Rights.
Thus, the framers of both constitutions had to include specific language
recognizing the validity of the sequestration orders. The following discourse by
Commissioner Joaquin G. Bernas during the deliberations of the Constitutional
Commission is instructive:
FR. BERNAS: Madam President, there is something schizophrenic about
the arguments in defense of the present amendment.
For instance, I have carefully studied Minister Salonga’s lecture in the
Gregorio Araneta University Foundation, of which all of us have been
given a copy. On the one hand, he argues that everything the
Commission is doing is traditionally legal. This is repeated by
Commissioner Romulo also. Minister Salonga spends a major portion
of his lecture developing that argument. On the other hand, almost as
an afterthought, he says that in the end what matters are the results
and not the legal niceties, thus suggesting that the PCGG should be
allowed to make some legal shortcuts, another word for niceties or
exceptions.
Now, if everything the PCGG is doing is legal, why is it asking the
CONCOM for special protection? The answer is clear. What they are
doing will not stand the test of ordinary due process, hence they
are asking for protection, for exceptions. Grandes malos, grandes
remedios, fine, as the saying stands, but let us not say grandes
malos, grande y malos remedios. That is not an allowable
extrapolation. Hence, we should not give the exceptions asked for,
and let me elaborate and give three reasons:
First, the whole point of the February Revolution and of the work of
the CONCOM is to hasten constitutional normalization. Very much at
the heart of the constitutional normalization is the full effectivity of the
Bill of Rights. We cannot, in one breath, ask for constitutional
normalization and at the same time ask for a temporary halt to the full
functioning of what is at the heart of constitutionalism. That would be
hypocritical; that would be a repetition of Marcosian protestation of
due process and rule of law. The New Society word for that is
“backsliding.” It is tragic when we begin to backslide even before we
get there.
Second, this is really a corollary of the first. Habits tend to become
ingrained. The committee report asks for extraordinary exceptions
from the Bill of Rights for six months after the convening of Congress,
and Congress may even extend this longer.
Good deeds repeated ripen into virtue; bad deeds repeated become
vice. What the committee report is asking for is that we should allow
 the new government to acquire the vice of disregarding the Bill of
Rights.
Vices, once they become ingrained, become difficult to shed. The
practitioners of the vice begin to think that they have a vested right to
its practice, and they will fight tooth and nail to keep the franchise.
That would be an unhealthy way of consolidating the gains of a
democratic revolution.
Third, the argument that what matters are the results and not the legal
niceties is an argument that is very disturbing. When it comes from a
staunch Christian like Commissioner Salonga, a Minister, and
repeated verbatim by another staunch Christian like Commissioner
Tingson, it becomes doubly disturbing and even discombobulating.
The argument makes the PCGG an auctioneer, placing the Bill of
Rights on the auction block. If the price is right, the search and
seizure clause will be sold. “Open your Swiss bank account to us and
we will award you the search and seizure clause. You can keep it in
your private safe.”
Alternatively, the argument looks on the present government as
hostage to the hoarders of hidden wealth. The hoarders will release
the hidden health if the ransom price is paid and the ransom price is
the Bill of Rights, specifically the due process in the search and
seizure clauses. So, there is something positively revolving about
either argument. The Bill of Rights is not for sale to the highest bidder
nor can it be used to ransom captive dollars. This nation will survive
and grow strong, only if it would become convinced of the values
enshrined in the Constitution of a price that is beyond monetary
estimation.
For these reasons, the honorable course for the Constitutional
Commission is to delete all of Section 8 of the committee report and
allow the new Constitution to take effect in full vigor. If Section 8 is
deleted, the PCGG has two options. First, it can pursue the Salonga
and the Romulo argument — that what the PCGG has been doing
has been completely within the pale of the law. If sustained, the
PCGG can go on and should be able to go on, even without the
support of Section 8. If not sustained, however, the PCGG has only
one honorable option, it must bow to the majesty of the Bill of Rights.
The PCGG extrapolation of the law is defended by staunch
Christians. Let me conclude with what another Christian replied when
asked to toy around with the law. From his prison cell, Thomas More
said, "I'll give the devil benefit of law for my nation’s safety sake.” I
ask the Commission to give the devil benefit of law for our nation’s
sake. And we should delete Section 8.
Thank you, Madam President. (Emphasis supplied)
Despite the impassioned plea by Commissioner Bernas against the
amendment excepting sequestration orders from the Bill of Rights, the
Constitutional Commission still adopted the amendment as Section 26, Article
XVIII of the 1987 Constitution. The framers of the Constitution were fully
aware that absent Section 26, sequestration orders would not stand the test of
due process under the Bill of Rights.
Thus, to rule that the Bill of Rights of the 1973 Constitution remained in force
during the interregnum, absent a constitutional provision excepting
sequestration orders from such Bill of Rights, would clearly render all
sequestration orders void during the interregnum. Nevertheless, even during
the interregnum the Filipino people continued to enjoy, under the Covenant and
the Declaration, almost the same rights found in the Bill of Rights of the 1973
Constitution.
The revolutionary government, after installing itself as the de jure government,
assumed responsibility for the State’s good faith compliance with the Covenant
to which the Philippines is a signatory. Article 2(1) of the Covenant requires
each signatory State “to respect and to ensure to all individuals within its
territory and subject to its jurisdiction the rights recognized in the present
Covenant.” Under Article 17(1) of the Covenant, the revolutionary government
had the duty to insure that “[n]o one shall be subjected to arbitrary or unlawful
interference with his privacy, family, home or correspondence.”
The Declaration, to which the Philippines is also a signatory, provides in its
Article 17(2) that “[n]o one shall be arbitrarily deprived of his property.”
Although the signatories to the Declaration did not intend it as a legally binding
document, being only a declaration, the Court has interpreted the Declaration
as part of the generally accepted principles of international law and binding on
the State. Thus, the revolutionary government was also obligated under
international law to observe the rights of individuals under the Declaration.
The revolutionary government did not repudiate the Covenant or the
Declaration during the interregnum. Whether the revolutionary government
could have repudiated all its obligations under the Covenant or the Declaration
is another matter and is not the issue here. Suffice it to say that the Court
considers the Declaration as part of customary international law, and that
Filipinos as human beings are proper subjects of the rules of international law
laid down in the Covenant. The fact is the revolutionary government did not
repudiate the Covenant or the Declaration in the same way it repudiated the
1973 Constitution. As the de jure government, the revolutionary government
could not escape responsibility for the State’s good faith compliance with its
treaty obligations under international law.
It was only upon the adoption of the Provisional Constitution on 25 March 1986
that the directives and orders of the revolutionary government became subject
to a higher municipal law that, if contravened, rendered such directives and
orders void. The Provisional Constitution adopted verbatim the Bill of Rights of Q.
the 1973 Constitution. The Provisional Constitution served as a self-limitation
by the revolutionary government to avoid abuses of the absolute powers
entrusted to it by the people. A.
During the interregnum when no constitution or Bill of Rights existed, directives
and orders issued by government officers were valid so long as these officers
did not exceed the authority granted them by the revolutionary government.
The directives and orders should not have also violated the Covenant or the
Declaration. In this case, the revolutionary government presumptively
sanctioned the warrant since the revolutionary government did not repudiate it. Cross-examination
The warrant, issued by a judge upon proper application, specified the items to Atty. Banaag
be searched and seized. The warrant is thus valid with respect to the items
specifically described in the warrant. Q.
However, the Constabulary raiding team seized items not included in the
warrant. As admitted by petitioner’s witnesses, the raiding team confiscated A. Yes, sir.
items not included in the warrant, thus:
Q.
Direct Examination of Capt. Rodolfo Sebastian
AJ AMORES
A. Yes, sir.
Q. According to the search warrant, you are supposed to seize
only for weapons. What else, aside from the weapons, were xxx
seized from the house of Miss Elizabeth Dimaano?
AJ AMORES
A. The communications equipment, money in Philippine currency
and US dollars, some jewelries, land titles, sir. Q.
Q. Now, the search warrant speaks only of weapons to be A.
seized from the house of Elizabeth Dimaano. Do you
know the reason why your team also seized other
properties not mentioned in said search warrant? Q.
A. During the conversation right after the conduct of said raid,
I was informed that the reason why they also brought the A. Yes, your Honor.
other items not included in the search warrant was
because the money and other jewelries were contained in Q.
attaché cases and cartons with markings “Sony Trinitron”, A.
and I think three (3) vaults or steel safes. Believing that
Q.
the attaché cases and the steel safes were containing
firearms, they forced open these containers only to find
out that they contained money.
A.
xxx
You said you found money instead of weapons, do you
know the reason why your team seized this money
instead of weapons?
I think the overall team leader and the other two officers
assisting him decided to bring along also the money
because at that time it was already dark and they felt most
secured if they will bring that because they might be
suspected also of taking money out of those items, your
Honor.
Were you present when the search warrant in connection
with this case was applied before the Municipal Trial Court
of Batangas, Branch 1?
And the search warrant applied for by you was for the
search and seizure of five (5) baby armalite rifles M-16
and five (5) boxes of ammunition?
Before you applied for a search warrant, did you conduct
surveillance in the house of Miss Elizabeth Dimaano?
The Intelligence Operatives conducted surveillance
together with the MSU elements, your Honor.
And this party believed there were weapons deposited in
the house of Miss Elizabeth Dimaano?
And they so swore before the Municipal Trial Judge?
Yes, your Honor.
But they did not mention to you, the applicant for the
search warrant, any other properties or contraband
which could be found in the residence of Miss Elizabeth
Dimaano?
They just gave us still unconfirmed report about some
hidden items, for instance, the communications equipment
and money. However, I did not include that in the
 application for search warrant considering that we have cases. These attaché cases were suspected to be
not established concrete evidence about that. So when… containing pistols or other high powered firearms, but in
the course of the search the contents turned out to be
Q. So that when you applied for search warrant, you had money. So the team leader also decided to take this
reason to believe that only weapons were in the house of considering that they believed that if they will just leave
Miss Elizabeth Dimaano? the money behind, it might get lost also.
A. Yes, your Honor.
Q. That holds true also with respect to the other articles that
xxx were seized by your raiding team, like Transfer
Certificates of Title of lands?
A. Yes, sir. I think they were contained in one of the vaults
Q. You stated that a .45 caliber pistol was seized along with
that were opened.
one armalite rifle M-16 and how many ammunition?
A. Forty, sir.
It is obvious from the testimony of Captain Sebastian that the warrant did not
Q. And this became the subject of your complaint with the include the monies, communications equipment, jewelry and land titles that the
issuing Court, with the fiscal’s office who charged raiding team confiscated. The search warrant did not particularly describe
Elizabeth Dimaano for Illegal Possession of Firearms and these items and the raiding team confiscated them on its own authority. The
Ammunition? raiding team had no legal basis to seize these items without showing that these
A. Yes, sir. items could be the subject of warrantless search and seizure. Clearly, the
raiding team exceeded its authority when it seized these items.
Q. Do you know what happened to that case?
A. I think it was dismissed, sir.
The seizure of these items was therefore void, and unless these items are
Q. In the fiscal’s office? contraband per se, and they are not, they must be returned to the person from
A. Yes, sir. whom the raiding seized them. However, we do not declare that such person is
the lawful owner of these items, merely that the search and seizure warrant
Q. Because the armalite rifle you seized, as well as the .45
could not be used as basis to seize and withhold these items from the
caliber pistol had a Memorandum Receipt in the name of
possessor. We thus hold that these items should be returned immediately to
Felino Melegrito, is that not correct?
Dimaano.
A. I think that was the reason, sir.
Q. There were other articles seized which were not included WHEREFORE, the petition for certiorari is DISMISSED. The questioned
in the search warrant, like for instance, jewelries. Why Resolutions of the Sandiganbayan dated 18 November 1991 and 25 March
did you seize the jewelries? 1992 in Civil Case No. 0037, remanding the records of this case to the
A. I think it was the decision of the overall team leader and Ombudsman for such appropriate action as the evidence may warrant, and
his assistant to bring along also the jewelries and other referring this case to the Commissioner of the Bureau of Internal Revenue for a
items, sir. I do not really know where it was taken but they determination of any tax liability of respondent Elizabeth Dimaano, are
brought along also these articles. I do not really know their AFFIRMED.
reason for bringing the same, but I just learned that these
were taken because they might get lost if they will just SO ORDERED.
leave this behind.
Bellosillo, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr. and Azcuna,
xxx JJ., concur.

Q. How about the money seized by your raiding team, they Davide, Jr., C.J., in the result. I concur with Mr. Justice Vitug in his concurring
were not also included in the search warrant? opinion.
A. Yes sir, but I believe they were also taken considering that
the money was discovered to be contained in attaché
Puno and Vitug, JJ., see separate opinion

Panganiban, J., in the result.

Quisumbing and Sandoval-Gutierrez, JJ., on official leave.

Ynares-Santiago, J., in the result. I concur in the separate opinion of J. Reynato

Puno.

Tinga, J., separate opinion reserved.

 G.R. No. 175888 February 11, 2009
SUZETTE NICOLAS y SOMBILON, Petitioner,
vs.
ALBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; RAUL
GONZALEZ, in his capacity as Secretary of Justice; EDUARDO ERMITA,
in his capacity as Executive Secretary; RONALDO PUNO, in his capacity
as Secretary of the Interior and Local Government; SERGIO APOSTOL, in
his capacity as Presidential Legal Counsel; and L/CPL. DANIEL SMITH,
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 176051 February 11, 2009
JOVITO R. SALONGA, WIGBERTO E. TAÑADA, JOSE DE LA RAMA,
EMILIO C. CAPULONG, H. HARRY L. ROQUE, JR., FLORIN HILBAY, and
BENJAMIN POZON, Petitioners,
vs.
DANIEL SMITH, SECRETARY RAUL GONZALEZ, PRESIDENTIAL LEGAL
COUNSEL SERGIO APOSTOL, SECRETARY RONALDO PUNO,
SECRETARY ALBERTO ROMULO, The Special 16th Division of the
COURT OF APPEALS, and all persons acting in their capacity,
Respondents.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 176222 February 11, 2009
BAGONG ALYANSANG MAKABAYAN (BAYAN), represented by Dr. Carol
Araullo; GABRIELA, represented by Emerenciana de Jesus; BAYAN
MUNA, represented by Rep. Satur Ocampo; GABRIELA WOMEN'S PARTY,
represented by Rep. Liza Maza; KILUSANG MAYO UNO (KMU),
represented by Elmer Labog; KILUSANG MAGBUBUKID NG PILIPINAS
(KMP), represented by Willy Marbella; LEAGUE OF FILIPINO STUDENTS
(LFS), represented by Vencer Crisostomo; and THE PUBLIC INTEREST
LAW CENTER, represented by Atty. Rachel Pastores, Petitioners,
vs.
PRESIDENT GLORIA MACAPAGAL-ARROYO, in her capacity as
concurrent Defense Secretary, EXECUTIVE SECRETARY EDUARDO
ERMITA, FOREIGN AFFAIRS SECRETARY ALBERTO ROMULO, JUSTICE
SECRETARY RAUL GONZALEZ, AND INTERIOR AND LOCAL
GOVERNMENT SECRETARY RONALDO PUNO, Respondents.
DECISION
AZCUNA, J.:
These are petitions for certiorari, etc. as special civil actions and/or for review of
the Decision of the Court of Appeals in Lance Corporal Daniel J. Smith v. Hon.
Benjamin T. Pozon, et al., in CA-G.R. SP No. 97212, dated January 2, 2007.
The facts are not disputed.
Respondent Lance Corporal (L/CPL) Daniel Smith is a member of the United
States Armed Forces. He was charged with the crime of rape committed
against a Filipina, petitioner herein, sometime on November 1, 2005, as follows:
The undersigned accused LCpl. Daniel Smith, Ssgt. Chad Brian Carpentier,
Dominic Duplantis, Keith Silkwood and Timoteo L. Soriano, Jr. of the crime of
Rape under Article 266-A of the Revised Penal Code, as amended by Republic
Act 8353, upon a complaint under oath filed by Suzette S. Nicolas, which is
attached hereto and made an integral part hereof as Annex "A," committed as
follows:
"That on or about the First (1st) day of November 2005, inside the Subic Bay
Freeport Zone, Olongapo City and within the jurisdiction of this Honorable
Court, the above-named accused’s (sic), being then members of the United
States Marine Corps, except Timoteo L. Soriano, Jr., conspiring, confederating
together and mutually helping one another, with lewd design and by means of
force, threat and intimidation, with abuse of superior strength and taking
advantage of the intoxication of the victim, did then and there willfully,
unlawfully and feloniously sexually abuse and have sexual intercourse with or
carnal knowledge of one Suzette S. Nicolas, a 22-year old unmarried woman
inside a Starex Van with Plate No. WKF-162, owned by Starways Travel and
Tours, with Office address at 8900 P. Victor St., Guadalupe, Makati City, and
driven by accused Timoteo L. Soriano, Jr., against the will and consent of the
said Suzette S. Nicolas, to her damage and prejudice.
CONTRARY TO LAW."1
Pursuant to the Visiting Forces Agreement (VFA) between the Republic of the
Philippines and the United States, entered into on February 10, 1998, the
United States, at its request, was granted custody of defendant Smith pending
the proceedings.
During the trial, which was transferred from the Regional Trial Court (RTC) of
Zambales to the RTC of Makati for security reasons, the United States
Government faithfully complied with its undertaking to bring defendant Smith to
the trial court every time his presence was required.
On December 4, 2006, the RTC of Makati, following the end of the trial,
rendered its Decision, finding defendant Smith guilty, thus:
WHEREFORE, premises considered, for failure of the prosecution to adduce
sufficient evidence against accused S/SGT. CHAD BRIAN CARPENTER,
L/CPL. KEITH SILKWOOD AND L/CPL. DOMINIC DUPLANTIS, all of the US
Marine Corps assigned at the USS Essex, are hereby ACQUITTED to the
crime charged.
The prosecution having presented sufficient evidence against accused L/CPL.
DANIEL J. SMITH, also of the US Marine Corps at the USS Essex, this Court
hereby finds him GUILTY BEYOND REASONABLE DOUBT of the crime of
RAPE defined under Article 266-A, paragraph 1 (a) of the Revised Penal Code,
as amended by R.A. 8353, and, in accordance with Article 266-B, first
paragraph thereof, hereby sentences him to suffer the penalty of reclusion
perpetua together with the accessory penalties provided for under Article 41 of
the same Code.
Pursuant to Article V, paragraph No. 10, of the Visiting Forces Agreement
entered into by the Philippines and the United States, accused L/CPL. DANIEL
J. SMITH shall serve his sentence in the facilities that shall, thereafter, be
agreed upon by appropriate Philippine and United States authorities. Pending
agreement on such facilities, accused L/CPL. DANIEL J. SMITH is hereby
temporarily committed to the Makati City Jail.
Accused L/CPL. DANIEL J. SMITH is further sentenced to indemnify
complainant SUZETTE S. NICOLAS in the amount of P50,000.00 as
compensatory damages plus P50,000.00 as moral damages.
SO ORDERED.2
As a result, the Makati court ordered Smith detained at the Makati jail until
further orders.
On December 29, 2006, however, defendant Smith was taken out of the Makati
jail by a contingent of Philippine law enforcement agents, purportedly acting
under orders of the Department of the Interior and Local Government, and
brought to a facility for detention under the control of the United States
government, provided for under new agreements between the Philippines and
the United States, referred to as the Romulo-Kenney Agreement of December
19, 2006 which states:
The Government of the Republic of the Philippines and the Government of the
United States of America agree that, in accordance with the Visiting Forces
Agreement signed between our two nations, Lance Corporal Daniel J. Smith,
United States Marine Corps, be returned to U.S. military custody at the U.S.
Embassy in Manila.
(Sgd.) Kristie A. Kenney (Sgd.) Alberto G. Romulo
Representative of the United States Representative of the Republic
of America of the Philippines
DATE: 12-19-06 DATE: December 19, 2006
and the Romulo-Kenney Agreement of December 22, 2006 which states:
The Department of Foreign Affairs of the Republic of the Philippines and the
Embassy of the United States of America agree that, in accordance with the
Visiting Forces Agreement signed between the two nations, upon transfer of
Lance Corporal Daniel J. Smith, United States Marine Corps, from the Makati
City Jail, he will be detained at the first floor, Rowe (JUSMAG) Building, U.S.
Embassy Compound in a room of approximately 10 x 12 square feet. He will be
guarded round the clock by U.S. military personnel. The Philippine police and
jail authorities, under the direct supervision of the Philippine Department of
Interior and Local Government (DILG) will have access to the place of detention
to ensure the United States is in compliance with the terms of the VFA.
The matter was brought before the Court of Appeals which decided on January
2, 2007, as follows:
WHEREFORE, all the foregoing considered, we resolved to DISMISS the
petition for having become moot.3
Hence, the present actions.
The petitions were heard on oral arguments on September 19, 2008, after
which the parties submitted their memoranda.
Petitioners contend that the Philippines should have custody of defendant
L/CPL Smith because, first of all, the VFA is void and unconstitutional.
This issue had been raised before, and this Court resolved in favor of the
constitutionality of the VFA. This was in Bayan v. Zamora, 4 brought by Bayan,
one of petitioners in the present cases.
Against the barriers of res judicata vis-à-vis Bayan, and stare decisis vis-à-vis
all the parties, the reversal of the previous ruling is sought on the ground that
the issue is of primordial importance, involving the sovereignty of the Republic,
as well as a specific mandate of the Constitution.
The provision of the Constitution is Art. XVIII, Sec. 25 which states:
Sec. 25. After the expiration in 1991 of the Agreement between the Philippines
and the United States of America concerning Military Bases, foreign military
bases, troops, or facilities shall not be allowed in the Philippines except under a
treaty duly concurred in by the Senate and, when the Congress so requires,
ratified by a majority of the votes cast by the people in a national referendum
held for that purpose, and recognized as a treaty by the other contracting State.
The reason for this provision lies in history and the Philippine experience in
regard to the United States military bases in the country.
It will be recalled that under the Philippine Bill of 1902, which laid the basis for
the Philippine Commonwealth and, eventually, for the recognition of
independence, the United States agreed to cede to the Philippines all the
territory it acquired from Spain under the Treaty of Paris, plus a few islands
later added to its realm, except certain naval ports and/or military bases and
facilities, which the United States retained for itself.
This is noteworthy, because what this means is that Clark and Subic and the
other places in the Philippines covered by the RP-US Military Bases Agreement
of 1947 were not Philippine territory, as they were excluded from the cession
and retained by the US.
Accordingly, the Philippines had no jurisdiction over these bases except to the
extent allowed by the United States. Furthermore, the RP-US Military Bases
Agreement was never advised for ratification by the United States Senate, a
disparity in treatment, because the Philippines regarded it as a treaty and had it
concurred in by our Senate.
Subsequently, the United States agreed to turn over these bases to the
Philippines; and with the expiration of the RP-US Military Bases Agreement in
1991, the territory covered by these bases were finally ceded to the Philippines.
To prevent a recurrence of this experience, the provision in question was
adopted in the 1987 Constitution.
The provision is thus designed to ensure that any agreement allowing the
presence of foreign military bases, troops or facilities in Philippine territory shall
be equally binding on the Philippines and the foreign sovereign State involved.
The idea is to prevent a recurrence of the situation in which the terms and
conditions governing the presence of foreign armed forces in our territory were
binding upon us but not upon the foreign State.
Applying the provision to the situation involved in these cases, the question is
whether or not the presence of US Armed Forces in Philippine territory
pursuant to the VFA is allowed "under a treaty duly concurred in by the Senate
xxx and recognized as a treaty by the other contracting State."
This Court finds that it is, for two reasons.
First, as held in Bayan v. Zamora,5 the VFA was duly concurred in by the
Philippine Senate and has been recognized as a treaty by the United States as
attested and certified by the duly authorized representative of the United States
government.
The fact that the VFA was not submitted for advice and consent of the United
States Senate does not detract from its status as a binding international
agreement or treaty recognized by the said State. For this is a matter of internal
United States law. Notice can be taken of the internationally known practice by
the United States of submitting to its Senate for advice and consent
agreements that are policymaking in nature, whereas those that carry out or
further implement these policymaking agreements are merely submitted to
Congress, under the provisions of the so-called Case–Zablocki Act, within sixty
days from ratification.6
The second reason has to do with the relation between the VFA and the RP-US
Mutual Defense Treaty of August 30, 1951. This earlier agreement was signed
and duly ratified with the concurrence of both the Philippine Senate and the
United States Senate.
The RP-US Mutual Defense Treaty states:7
MUTUAL DEFENSE TREATY BETWEEN THE REPUBLIC OF THE
PHILIPPINES AND THE UNITED STATES OF AMERICA. Signed at
Washington, August 30, 1951.
The Parties of this Treaty
Reaffirming their faith in the purposes and principles of the Charter of the
United Nations and their desire to live in peace with all peoples and all
governments, and desiring to strengthen the fabric of peace in the Pacific area.
Recalling with mutual pride the historic relationship which brought their two
peoples together in a common bond of sympathy and mutual ideals to fight
side-by-side against imperialist aggression during the last war.
Desiring to declare publicly and formally their sense of unity and their common
determination to defend themselves against external armed attack, so that no
potential aggressor could be under the illusion that either of them stands alone
in the Pacific area.
Desiring further to strengthen their present efforts for collective defense for the
preservation of peace and security pending the development of a more
comprehensive system of regional security in the Pacific area.
Agreeing that nothing in this present instrument shall be considered or
interpreted as in any way or sense altering or diminishing any existing
agreements or understandings between the Republic of the Philippines and the
United States of America.
Have agreed as follows:
Article I. The parties undertake, as set forth in the Charter of the United
Nations, to settle any international disputes in which they may be involved by
peaceful means in such a manner that international peace and security and
justice are not endangered and to refrain in their international relation from the
threat or use of force in any manner inconsistent with the purposes of the
United Nations.
Article II. In order more effectively to achieve the objective of this Treaty, the
Parties separately and jointly by self-help and mutual aid will maintain and
develop their individual and collective capacity to resist armed attack.
Article III. The Parties, through their Foreign Ministers or their deputies, will
consult together from time to time regarding the implementation of this Treaty
and whenever in the opinion of either of them the territorial integrity, political
independence or security of either of the Parties is threatened by external
armed attack in the Pacific.
Article IV. Each Party recognizes that an armed attack in the Pacific area on
either of the parties would be dangerous to its own peace and safety and
declares that it would act to meet the common dangers in accordance with its
constitutional processes.
Any such armed attack and all measures taken as a result thereof shall be
immediately reported to the Security Council of the United Nations. Such
measures shall be terminated when the Security Council has taken the
measures necessary to restore and maintain international peace and security.
Article V. For the purpose of Article IV, an armed attack on either of the Parties
is deemed to include an armed attack on the metropolitan territory of either of
the Parties, or on the island territories under its jurisdiction in the Pacific Ocean,
its armed forces, public vessels or aircraft in the Pacific.
Article VI. This Treaty does not affect and shall not be interpreted as affecting in
any way the rights and obligations of the Parties under the Charter of the
United Nations or the responsibility of the United Nations for the maintenance
of international peace and security.
Article VII. This Treaty shall be ratified by the Republic of the Philippines and
the United Nations of America in accordance with their respective constitutional
processes and will come into force when instruments of ratification thereof have
been exchanged by them at Manila.
Article VIII. This Treaty shall remain in force indefinitely. Either Party may
terminate it one year after notice has been given to the other party.
In withness whereof the undersigned Plenipotentiaries have signed this Treaty.
Done in duplicate at Washington this thirtieth day of August, 1951.
For the Republic of the Philippines:
(Sgd.) Carlos P. Romulo
(Sgd.) Joaquin M. Elizalde
(Sgd.) Vicente J. Francisco
(Sgd.) Diosdado Macapagal
For the United States of America:
(Sgd.) Dean Acheson
(Sgd.) John Foster Dulles
(Sgd.) Tom Connally
(Sgd.) Alexander Wiley8
Clearly, therefore, joint RP-US military exercises for the purpose of developing
the capability to resist an armed attack fall squarely under the provisions of the
RP-US Mutual Defense Treaty. The VFA, which is the instrument agreed upon
to provide for the joint RP-US military exercises, is simply an implementing
agreement to the main RP-US Military Defense Treaty. The Preamble of the
VFA states:
The Government of the United States of America and the Government of the
Republic of the Philippines,
Reaffirming their faith in the purposes and principles of the Charter of the
United Nations and their desire to strengthen international and regional security
in the Pacific area;
Reaffirming their obligations under the Mutual Defense Treaty of August 30,
1951;
Noting that from time to time elements of the United States armed forces may
visit the Republic of the Philippines;
Considering that cooperation between the United States and the Republic of
the Philippines promotes their common security interests;
Recognizing the desirability of defining the treatment of United States
personnel visiting the Republic of the Philippines;
Have agreed as follows:9
Accordingly, as an implementing agreement of the RP-US Mutual Defense
Treaty, it was not necessary to submit the VFA to the US Senate for advice and
consent, but merely to the US Congress under the Case–Zablocki Act within 60
days of its ratification. It is for this reason that the US has certified that it
recognizes the VFA as a binding international agreement, i.e., a treaty, and this
substantially complies with the requirements of Art. XVIII, Sec. 25 of our
Constitution.10
The provision of Art. XVIII, Sec. 25 of the Constitution, is complied with by
virtue of the fact that the presence of the US Armed Forces through the VFA is
a presence "allowed under" the RP-US Mutual Defense Treaty. Since the RP-
US Mutual Defense Treaty itself has been ratified and concurred in by both the
Philippine Senate and the US Senate, there is no violation of the Constitutional
provision resulting from such presence.
The VFA being a valid and binding agreement, the parties are required as a
matter of international law to abide by its terms and provisions.
The VFA provides that in cases of offenses committed by the members of the
US Armed Forces in the Philippines, the following rules apply:
Article V
Criminal Jurisdiction
xxx
6. The custody of any United States personnel over whom the Philippines is to
exercise jurisdiction shall immediately reside with United States military
authorities, if they so request, from the commission of the offense until
completion of all judicial proceedings. United States military authorities shall,
upon formal notification by the Philippine authorities and without delay, make
such personnel available to those authorities in time for any investigative or
judicial proceedings relating to the offense with which the person has been
charged. In extraordinary cases, the Philippine Government shall present its
position to the United States Government regarding custody, which the United
States Government shall take into full account. In the event Philippine judicial
proceedings are not completed within one year, the United States shall be
relieved of any obligations under this paragraph. The one year period will not
include the time necessary to appeal. Also, the one year period will not include
any time during which scheduled trial procedures are delayed because United
States authorities, after timely notification by Philippine authorities to arrange
for the presence of the accused, fail to do so.
Petitioners contend that these undertakings violate another provision of the
Constitution, namely, that providing for the exclusive power of this Court to
adopt rules of procedure for all courts in the Philippines (Art. VIII, Sec. 5[5]).
They argue that to allow the transfer of custody of an accused to a foreign
power is to provide for a different rule of procedure for that accused, which also
violates the equal protection clause of the Constitution (Art. III, Sec. 1.).
Again, this Court finds no violation of the Constitution.
The equal protection clause is not violated, because there is a substantial basis
for a different treatment of a member of a foreign military armed forces allowed
to enter our territory and all other accused.11
The rule in international law is that a foreign armed forces allowed to enter
one’s territory is immune from local jurisdiction, except to the extent agreed
upon. The Status of Forces Agreements involving foreign military units around
the world vary in terms and conditions, according to the situation of the parties
involved, and reflect their bargaining power. But the principle remains, i.e., the
receiving State can exercise jurisdiction over the forces of the sending State
only to the extent agreed upon by the parties.12
As a result, the situation involved is not one in which the power of this Court to
adopt rules of procedure is curtailed or violated, but rather one in which, as is
normally encountered around the world, the laws (including rules of procedure)
of one State do not extend or apply – except to the extent agreed upon – to
subjects of another State due to the recognition of extraterritorial immunity
given to such bodies as visiting foreign armed forces.
Nothing in the Constitution prohibits such agreements recognizing immunity
from jurisdiction or some aspects of jurisdiction (such as custody), in relation to
long-recognized subjects of such immunity like Heads of State, diplomats and
members of the armed forces contingents of a foreign State allowed to enter
another State’s territory. On the contrary, the Constitution states that the
Philippines adopts the generally accepted principles of international law as part
of the law of the land. (Art. II, Sec. 2).
Applying, however, the provisions of VFA, the Court finds that there is a
different treatment when it comes to detention as against custody. The moment
the accused has to be detained, e.g., after conviction, the rule that governs is
the following provision of the VFA:
Article V
Criminal Jurisdiction
xxx
Sec. 10. The confinement or detention by Philippine authorities of United States
personnel shall be carried out in facilities agreed on by appropriate Philippines
and United States authorities. United States personnel serving sentences in the
Philippines shall have the right to visits and material assistance.
It is clear that the parties to the VFA recognized the difference between custody
during the trial and detention after conviction, because they provided for a
specific arrangement to cover detention. And this specific arrangement clearly
states not only that the detention shall be carried out in facilities agreed on by
authorities of both parties, but also that the detention shall be "by Philippine
authorities." Therefore, the Romulo-Kenney Agreements of December 19 and
22, 2006, which are agreements on the detention of the accused in the United
States Embassy, are not in accord with the VFA itself because such detention
is not "by Philippine authorities."
Respondents should therefore comply with the VFA and negotiate with
representatives of the United States towards an agreement on detention
facilities under Philippine authorities as mandated by Art. V, Sec. 10 of the
VFA.
Next, the Court addresses the recent decision of the United States Supreme
Court in Medellin v. Texas ( 552 US ___ No. 06-984, March 25, 2008), which
held that treaties entered into by the United States are not automatically part of
their domestic law unless these treaties are self-executing or there is an
implementing legislation to make them enforceable.1avvphi1
On February 3, 2009, the Court issued a Resolution, thus:
"G.R. No. 175888 (Suzette Nicolas y Sombilon v. Alberto Romulo, et al.); G.R.
No. 176051 (Jovito R. Salonga, et al. v. Daniel Smith, et al.); and G.R. No.
176222 (Bagong Alyansang Makabayan [BAYAN], et al. v. President Gloria
Macapagal-Arroyo, et al.).
The parties, including the Solicitor General, are required to submit within three
(3) days a Comment/Manifestation on the following points:
1. What is the implication on the RP-US Visiting Forces Agreement of the
recent US Supreme Court decision in Jose Ernesto Medellin v. Texas, dated
March 25, 2008, to the effect that treaty stipulations that are not self-executory
can only be enforced pursuant to legislation to carry them into effect; and that,
while treaties may comprise international commitments, they are not domestic
law unless Congress has enacted implementing statutes or the treaty itself
conveys an intention that it be "self-executory" and is ratified on these terms?
2. Whether the VFA is enforceable in the US as domestic law, either because it
is self-executory or because there exists legislation to implement it.
3. Whether the RP-US Mutual Defense Treaty of August 30, 1951 was
concurred in by the US Senate and, if so, is there proof of the US Senate
advice and consent resolution? Peralta, J., no part."
After deliberation, the Court holds, on these points, as follows:
First, the VFA is a self-executing Agreement, as that term is defined in Medellin
itself, because the parties intend its provisions to be enforceable, precisely
because the Agreement is intended to carry out obligations and undertakings
under the RP-US Mutual Defense Treaty. As a matter of fact, the VFA has been
implemented and executed, with the US faithfully complying with its obligation
to produce L/CPL Smith before the court during the trial.
Secondly, the VFA is covered by implementing legislation, namely, the Case-
Zablocki Act, USC Sec. 112(b), inasmuch as it is the very purpose and intent of
the US Congress that executive agreements registered under this Act within 60
days from their ratification be immediately implemented. The parties to these
present cases do not question the fact that the VFA has been registered under
the Case-Zablocki Act.1avvphi1
In sum, therefore, the VFA differs from the Vienna Convention on Consular
Relations and the Avena decision of the International Court of Justice (ICJ),
subject matter of the Medellin decision. The Convention and the ICJ decision
are not self-executing and are not registrable under the Case-Zablocki Act, and
thus lack legislative implementing authority.
Finally, the RP-US Mutual Defense Treaty was advised and consented to by
the US Senate on March 20, 1952, as reflected in the US Congressional
Record, 82nd Congress, Second Session, Vol. 98 – Part 2, pp. 2594-2595.
The framers of the Constitution were aware that the application of international
law in domestic courts varies from country to country.
As Ward N. Ferdinandusse states in his Treatise, DIRECT APPLICATION OF
INTERNATIONAL CRIMINAL LAW IN NATIONAL COURTS, some countries
require legislation whereas others do not.
It was not the intention of the framers of the 1987 Constitution, in adopting
Article XVIII, Sec. 25, to require the other contracting State to convert their
system to achieve alignment and parity with ours. It was simply required that
the treaty be recognized as a treaty by the other contracting State. With that, it
becomes for both parties a binding international obligation and the enforcement
of that obligation is left to the normal recourse and processes under
international law.
Furthermore, as held by the US Supreme Court in Weinberger v. Rossi,13 an
executive agreement is a "treaty" within the meaning of that word in
international law and constitutes enforceable domestic law vis-à-vis the United
States. Thus, the US Supreme Court in Weinberger enforced the provisions of
the executive agreement granting preferential employment to Filipinos in the
US Bases here.
Accordingly, there are three types of treaties in the American system:
1. Art. II, Sec. 2 treaties – These are advised and consented to by the US
Senate in accordance with Art. II, Sec. 2 of the US Constitution.
2. Executive–Congressional Agreements: These are joint agreements of the
President and Congress and need not be submitted to the Senate.
3. Sole Executive Agreements. – These are agreements entered into by the
President. They are to be submitted to Congress within sixty (60) days of
ratification under the provisions of the Case-Zablocki Act, after which they are
recognized by the Congress and may be implemented.
As regards the implementation of the RP-US Mutual Defense Treaty, military
aid or assistance has been given under it and this can only be done through
implementing legislation. The VFA itself is another form of implementation of its
provisions.
WHEREFORE, the petitions are PARTLY GRANTED, and the Court of
Appeals’ Decision in CA-G.R. SP No. 97212 dated January 2, 2007 is
MODIFIED. The Visiting Forces Agreement (VFA) between the Republic of the
Philippines and the United States, entered into on February 10, 1998, is
UPHELD as constitutional, but the Romulo-Kenney Agreements of December
19 and 22, 2006 are DECLARED not in accordance with the VFA, and
respondent Secretary of Foreign Affairs is hereby ordered to forthwith negotiate
with the United States representatives for the appropriate agreement on
detention facilities under Philippine authorities as provided in Art. V, Sec. 10 of
the VFA, pending which the status quo shall be maintained until further orders
by this Court.
The Court of Appeals is hereby directed to resolve without delay the related
matters pending therein, namely, the petition for contempt and the appeal of
L/CPL Daniel Smith from the judgment of conviction.
No costs.
SO ORDERED.
 G.R. No. 129406
REPUBLIC OF THE PHILIPPINES represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Petitioner,
vs.
SANDIGANBAYAN (SECOND DIVISION) and ROBERTO S. BENEDICTO, Respondents.
DECISION
GARCIA, J.:
Before the Court is this petition for certiorari under Rule 65 of the Rules of
Court to nullify and set aside the March 28, 1995 1 and March 13, 19972
Resolutions of the Sandiganbayan, Second Division, in Civil Case No. 0034,
insofar as said resolutions ordered the Presidential Commission on Good
Government (PCGG) to pay private respondent Roberto S. Benedicto or his
corporations the value of 227 shares of stock of the Negros Occidental Golf and
Country Club, Inc. (NOGCCI) at P150,000.00 per share, registered in the name
of said private respondent or his corporations.
The facts:
Civil Case No. 0034 entitled Republic of the Philippines, plaintiff, v. Roberto S.
Benedicto, et al., defendants, is a complaint for reconveyance, reversion,
accounting, reconstitution and damages. The case is one of several suits
involving ill-gotten or unexplained wealth that petitioner Republic, through the
PCGG, filed with the Sandiganbayan against private respondent Roberto S.
Benedicto and others pursuant to Executive Order (EO) No. 14,3 series of 1986.
Pursuant to its mandate under EO No. 1,4 series of 1986, the PCGG issued
writs placing under sequestration all business enterprises, entities and other
properties, real and personal, owned or registered in the name of private
respondent Benedicto, or of corporations in which he appeared to have
controlling or majority interest. Among the properties thus sequestered and
taken over by PCGG fiscal agents were the 227 shares in NOGCCI owned by
private respondent Benedicto and registered in his name or under the names of
corporations he owned or controlled.
Following the sequestration process, PCGG representatives sat as members of
the Board of Directors of NOGCCI, which passed, sometime in October 1986, a
resolution effecting a corporate policy change. The change consisted of
assessing a monthly membership due of P150.00 for each NOGCCI share.
Prior to this resolution, an investor purchasing more than one NOGCCI share
was exempt from paying monthly membership due for the second and
subsequent shares that he/she owned.
March 6, 2006
Subsequently, on March 29, 1987, the NOGCCI Board passed another
resolution, this time increasing the monthly membership due from P150.00 to
P250.00 for each share.
As sequestrator of the 227 shares of stock in question, PCGG did not pay the
corresponding monthly membership due thereon totaling P2,959,471.00. On
account thereof, the 227 sequestered shares were declared delinquent to be
disposed of in an auction sale.
Apprised of the above development and evidently to prevent the projected
auction sale of the same shares, PCGG filed a complaint for injunction with the
Regional Trial Court (RTC) of Bacolod City, thereat docketed as Civil Case No.
5348. The complaint, however, was dismissed, paving the way for the auction
sale for the delinquent 227 shares of stock. On August 5, 1989, an auction sale
was conducted.
On November 3, 1990, petitioner Republic and private respondent Benedicto
entered into a Compromise Agreement in Civil Case No. 0034. The agreement
contained a general release clause5 whereunder petitioner Republic agreed
and bound itself to lift the sequestration on the 227 NOGCCI shares, among
other Benedicto’s properties, petitioner Republic acknowledging that it was
within private respondent Benedicto’s capacity to acquire the same shares out
of his income from business and the exercise of his profession.6 Implied in this
undertaking is the recognition by petitioner Republic that the subject shares of
stock could not have been ill-gotten.
In a decision dated October 2, 1992, the Sandiganbayan approved the
Compromise Agreement and accordingly rendered judgment in accordance
with its terms.
In the process of implementing the Compromise Agreement, either of the
parties would, from time to time, move for a ruling by the Sandiganbayan on the
proper manner of implementing or interpreting a specific provision therein.
On February 22, 1994, Benedicto filed in Civil Case No. 0034 a "Motion for
Release from Sequestration and Return of Sequestered Shares/Dividends"
praying, inter alia, that his NOGCCI shares of stock be specifically released
from sequestration and returned, delivered or paid to him as part of the parties’
Compromise Agreement in that case. In a Resolution7 promulgated on
December 6, 1994, the Sandiganbayan granted Benedicto’s aforementioned
motion but placed the subject shares under the custody of its Clerk of Court,
thus:
WHEREFORE, in the light of the foregoing, the said "Motion for Release From
Sequestration and Return of Sequestered Shares/Dividends" is hereby
GRANTED and it is directed that said shares/dividends be delivered/placed
under the custody of the Clerk of Court, Sandiganbayan, Manila subject to this
Court’s disposition.
On March 28, 1995, the Sandiganbayan came out with the herein first assailed
Resolution,8 which clarified its aforementioned December 6, 1994 Resolution
and directed the immediate implementation thereof by requiring PCGG, among
other things:
(b) To deliver to the Clerk of Court the 227 sequestered shares of [NOGCCI]
registered in the name of nominees of ROBERTO S. BENEDICTO free from all
liens and encumbrances, or in default thereof, to pay their value at P150,000.00
per share which can be deducted from [the Republic’s] cash share in the
Compromise Agreement. [Words in bracket added] (Emphasis Supplied).
Owing to PCGG’s failure to comply with the above directive, Benedicto filed in
Civil Case No. 0034 a Motion for Compliance dated July 25, 1995, followed by
an Ex-Parte Motion for Early Resolution dated February 12, 1996. Acting
thereon, the Sandiganbayan promulgated yet another Resolution9 on February
23, 1996, dispositively reading:
WHEREFORE, finding merit in the instant motion for early resolution and
considering that, indeed, the PCGG has not shown any justifiable ground as to
why it has not complied with its obligation as set forth in the Order of December
6, 1994 up to this date and which Order was issued pursuant to the
Compromise Agreement and has already become final and executory,
accordingly, the Presidential Commission on Good Government is hereby given
a final extension of fifteen (15) days from receipt hereof within which to comply
with the Order of December 6, 1994 as stated hereinabove.
On April 1, 1996, PCGG filed a Manifestation with Motion for Reconsideration,10
praying for the setting aside of the Resolution of February 23, 1996. On April
11, 1996, private respondent Benedicto filed a Motion to Enforce Judgment
Levy. Resolving these two motions, the Sandiganbayan, in its second assailed
Resolution11 dated March 13, 1997, denied that portion of the PCGG’s
Manifestation with Motion for Reconsideration concerning the subject 227
NOGCCI shares and granted Benedicto’s Motion to Enforce Judgment Levy.
Hence, the Republic’s present recourse on the sole issue of whether or not the
public respondent Sandiganbayan, Second Division, gravely abused its
discretion in holding that the PCGG is at fault for not paying the membership
dues on the 227 sequestered NOGCCI shares of stock, a failing which
eventually led to the foreclosure sale thereof.
The petition lacks merit.
To begin with, PCGG itself does not dispute its being considered as a receiver
insofar as the sequestered 227 NOGCCI shares of stock are concerned. 12
PCGG also acknowledges that as such receiver, one of its functions is to pay
outstanding debts pertaining to the sequestered entity or property,13 in this case
the 227 NOGCCI shares in question. It contends, however, that membership
dues owing to a golf club cannot be considered as an outstanding debt for
which PCGG, as receiver, must pay. It also claims to have exercised due
diligence to prevent the loss through delinquency sale of the subject NOGCCI
shares, specifically inviting attention to the injunctive suit, i.e., Civil Case No.
5348, it filed before the RTC of Bacolod City to enjoin the foreclosure sale of
the shares.
The filing of the injunction complaint adverted to, without more, cannot plausibly
tilt the balance in favor of PCGG. To the mind of the Court, such filing is a case
of acting too little and too late. It cannot be over-emphasized that it behooved
the PCGG’s fiscal agents to preserve, like a responsible father of the family, the
value of the shares of stock under their administration. But far from acting as
such father, what the fiscal agents did under the premises was to allow the
element of delinquency to set in before acting by embarking on a tedious
process of going to court after the auction sale had been announced and
scheduled.
The PCGG’s posture that to the owner of the sequestered shares rests the
burden of paying the membership dues is untenable. For one, it lost sight of the
reality that such dues are basically obligations attached to the shares, which, in
the final analysis, shall be made liable, thru delinquency sale in case of default
in payment of the dues. For another, the PCGG as sequestrator-receiver of
such shares is, as stressed earlier, duty bound to preserve the value of such
shares. Needless to state, adopting timely measures to obviate the loss of
those shares forms part of such duty and due diligence.
The Sandiganbayan, to be sure, cannot plausibly be faulted for finding the
PCGG liable for the loss of the 227 NOGCCI shares. There can be no
quibbling, as indeed the graft court so declared in its assailed and related
resolutions respecting the NOGCCI shares of stock, that PCGG’s fiscal agents,
while sitting in the NOGCCI Board of Directors agreed to the amendment of the
rule pertaining to membership dues. Hence, it is not amiss to state, as did the
Sandiganbayan, that the PCGG-designated fiscal agents, no less, had a direct
hand in the loss of the sequestered shares through delinquency and their
eventual sale through public auction. While perhaps anti-climactic to so mention
it at this stage, the unfortunate loss of the shares ought not to have come to
pass had those fiscal agents prudently not agreed to the passage of the
NOGCCI board resolutions charging membership dues on shares without
playing representatives.
Given the circumstances leading to the auction sale of the subject NOGCCI
shares, PCGG’s lament about public respondent Sandiganbayan having erred
or, worse still, having gravely abused its discretion in its determination as to
who is at fault for the loss of the shares in question can hardly be given
cogency.
For sure, even if the Sandiganbayan were wrong in its findings, which does not
seem to be in this case, it is a well-settled rule of jurisprudence that certiorari
will issue only to correct errors of jurisdiction, not errors of judgment. Corollarily,
errors of procedure or mistakes in the court’s findings and conclusions are
beyond the corrective hand of certiorari.14 The extraordinary writ of certiorari
may be availed only upon a showing, in the minimum, that the respondent
tribunal or officer exercising judicial or quasi-judicial functions has acted without
or in excess of its or his jurisdiction, or with grave abuse of discretion.15
The term "grave abuse of discretion" connotes capricious and whimsical
exercise of judgment as is equivalent to excess, or a lack of jurisdiction. 16 The
abuse must be so patent and gross as to amount to an evasion of a positive
duty or a virtual refusal to perform a duty enjoined by law, 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 or hostility. 17 Sadly, this is completely
absent in the present case. For, at bottom, the assailed resolutions of the
Sandiganbayan did no more than to direct PCGG to comply with its part of the
bargain under the compromise agreement it freely entered into with private
respondent Benedicto. Simply put, the assailed resolutions of the
Sandiganbayan have firm basis in fact and in law.
Lest it be overlooked, the issue of liability for the shares in question had, as
both public and private respondents asserted, long become final and executory.
Petitioner’s narration of facts in its present petition is even misleading as it
conveniently fails to make reference to two (2) resolutions issued by the
Sandiganbayan. We refer to that court’s resolutions of December 6, 199418 and
February 23, 199619 as well as several intervening pleadings which served as
basis for the decisions reached therein. As it were, the present petition
questions only and focuses on the March 28, 199520 and March 13, 199721
resolutions, which merely reiterated and clarified the graft court’s underlying
resolution of December 6, 1994. And to place matters in the proper perspective,
PCGG’s failure to comply with the December 6, 1994 resolution prompted the
issuance of the clarificatory and/or reiteratory resolutions aforementioned.
In a last-ditch attempt to escape liability, petitioner Republic, through the
PCGG, invokes state immunity from suit.22 As argued, the order for it to pay the
value of the delinquent shares would fix monetary liability on a government
agency, thus necessitating the appropriation of public funds to satisfy the
judgment claim.23 But, as private respondent Benedicto correctly countered, the
PCGG fails to take stock of one of the exceptions to the state immunity
principle, i.e., when the government itself is the suitor, as in Civil Case No.
0034. Where, as here, the State itself is no less the plaintiff in the main case,
immunity from suit cannot be effectively invoked.24 For, as jurisprudence
teaches, when the State, through its duly authorized officers, takes the initiative
in a suit against a private party, it thereby descends to the level of a private
individual and thus opens itself to whatever counterclaims or defenses the latter
may have against it.25 Petitioner Republic’s act of filing its complaint in Civil
Case No. 0034 constitutes a waiver of its immunity from suit. Being itself the
plaintiff in that case, petitioner Republic cannot set up its immunity against
private respondent Benedicto’s prayers in the same case.
In fact, by entering into a Compromise Agreement with private respondent
Benedicto, petitioner Republic thereby stripped itself of its immunity from suit
and placed itself in the same level of its adversary. When the State enters into
contract, through its officers or agents, in furtherance of a legitimate aim and
purpose and pursuant to constitutional legislative authority, whereby mutual or
reciprocal benefits accrue and rights and obligations arise therefrom, the State
may be sued even without its express consent, precisely because by entering
into a contract the sovereign descends to the level of the citizen. Its consent to
be sued is implied from the very act of entering into such contract,26 breach of
which on its part gives the corresponding right to the other party to the
agreement.
Finally, it is apropos to stress that the Compromise Agreement in Civil Case
No. 0034 envisaged the immediate recovery of alleged ill-gotten wealth without
further litigation by the government, and buying peace on the part of the aging
Benedicto.27 Sadly, that stated objective has come to naught as not only had
the litigation continued to ensue, but, worse, private respondent Benedicto
passed away on May 15, 2000,28 with the trial of Civil Case No. 0034 still in
swing, so much so that the late Benedicto had to be substituted by the
administratrix of his estate.29
WHEREFORE, the instant petition is hereby DISMISSED.
SO ORDERED.
 G.R. No. 129406
REPUBLIC OF THE PHILIPPINES represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), Petitioner,
vs.
SANDIGANBAYAN (SECOND DIVISION) and ROBERTO S. BENEDICTO, Respondents.
DECISION
GARCIA, J.:
Before the Court is this petition for certiorari under Rule 65 of the Rules of
Court to nullify and set aside the March 28, 1995 1 and March 13, 19972
Resolutions of the Sandiganbayan, Second Division, in Civil Case No. 0034,
insofar as said resolutions ordered the Presidential Commission on Good
Government (PCGG) to pay private respondent Roberto S. Benedicto or his
corporations the value of 227 shares of stock of the Negros Occidental Golf and
Country Club, Inc. (NOGCCI) at P150,000.00 per share, registered in the name
of said private respondent or his corporations.
The facts:
Civil Case No. 0034 entitled Republic of the Philippines, plaintiff, v. Roberto S.
Benedicto, et al., defendants, is a complaint for reconveyance, reversion,
accounting, reconstitution and damages. The case is one of several suits
involving ill-gotten or unexplained wealth that petitioner Republic, through the
PCGG, filed with the Sandiganbayan against private respondent Roberto S.
Benedicto and others pursuant to Executive Order (EO) No. 14,3 series of 1986.
Pursuant to its mandate under EO No. 1,4 series of 1986, the PCGG issued
writs placing under sequestration all business enterprises, entities and other
properties, real and personal, owned or registered in the name of private
respondent Benedicto, or of corporations in which he appeared to have
controlling or majority interest. Among the properties thus sequestered and
taken over by PCGG fiscal agents were the 227 shares in NOGCCI owned by
private respondent Benedicto and registered in his name or under the names of
corporations he owned or controlled.
Following the sequestration process, PCGG representatives sat as members of
the Board of Directors of NOGCCI, which passed, sometime in October 1986, a
resolution effecting a corporate policy change. The change consisted of
assessing a monthly membership due of P150.00 for each NOGCCI share.
Prior to this resolution, an investor purchasing more than one NOGCCI share
was exempt from paying monthly membership due for the second and
subsequent shares that he/she owned.
March 6, 2006
Subsequently, on March 29, 1987, the NOGCCI Board passed another
resolution, this time increasing the monthly membership due from P150.00 to
P250.00 for each share.
As sequestrator of the 227 shares of stock in question, PCGG did not pay the
corresponding monthly membership due thereon totaling P2,959,471.00. On
account thereof, the 227 sequestered shares were declared delinquent to be
disposed of in an auction sale.
Apprised of the above development and evidently to prevent the projected
auction sale of the same shares, PCGG filed a complaint for injunction with the
Regional Trial Court (RTC) of Bacolod City, thereat docketed as Civil Case No.
5348. The complaint, however, was dismissed, paving the way for the auction
sale for the delinquent 227 shares of stock. On August 5, 1989, an auction sale
was conducted.
On November 3, 1990, petitioner Republic and private respondent Benedicto
entered into a Compromise Agreement in Civil Case No. 0034. The agreement
contained a general release clause5 whereunder petitioner Republic agreed
and bound itself to lift the sequestration on the 227 NOGCCI shares, among
other Benedicto’s properties, petitioner Republic acknowledging that it was
within private respondent Benedicto’s capacity to acquire the same shares out
of his income from business and the exercise of his profession.6 Implied in this
undertaking is the recognition by petitioner Republic that the subject shares of
stock could not have been ill-gotten.
In a decision dated October 2, 1992, the Sandiganbayan approved the
Compromise Agreement and accordingly rendered judgment in accordance
with its terms.
In the process of implementing the Compromise Agreement, either of the
parties would, from time to time, move for a ruling by the Sandiganbayan on the
proper manner of implementing or interpreting a specific provision therein.
On February 22, 1994, Benedicto filed in Civil Case No. 0034 a "Motion for
Release from Sequestration and Return of Sequestered Shares/Dividends"
praying, inter alia, that his NOGCCI shares of stock be specifically released
from sequestration and returned, delivered or paid to him as part of the parties’
Compromise Agreement in that case. In a Resolution7 promulgated on
December 6, 1994, the Sandiganbayan granted Benedicto’s aforementioned
motion but placed the subject shares under the custody of its Clerk of Court,
thus:
WHEREFORE, in the light of the foregoing, the said "Motion for Release From
Sequestration and Return of Sequestered Shares/Dividends" is hereby
GRANTED and it is directed that said shares/dividends be delivered/placed
under the custody of the Clerk of Court, Sandiganbayan, Manila subject to this
Court’s disposition.
On March 28, 1995, the Sandiganbayan came out with the herein first assailed
Resolution,8 which clarified its aforementioned December 6, 1994 Resolution
and directed the immediate implementation thereof by requiring PCGG, among
other things:
(b) To deliver to the Clerk of Court the 227 sequestered shares of [NOGCCI]
registered in the name of nominees of ROBERTO S. BENEDICTO free from all
liens and encumbrances, or in default thereof, to pay their value at P150,000.00
per share which can be deducted from [the Republic’s] cash share in the
Compromise Agreement. [Words in bracket added] (Emphasis Supplied).
Owing to PCGG’s failure to comply with the above directive, Benedicto filed in
Civil Case No. 0034 a Motion for Compliance dated July 25, 1995, followed by
an Ex-Parte Motion for Early Resolution dated February 12, 1996. Acting
thereon, the Sandiganbayan promulgated yet another Resolution9 on February
23, 1996, dispositively reading:
WHEREFORE, finding merit in the instant motion for early resolution and
considering that, indeed, the PCGG has not shown any justifiable ground as to
why it has not complied with its obligation as set forth in the Order of December
6, 1994 up to this date and which Order was issued pursuant to the
Compromise Agreement and has already become final and executory,
accordingly, the Presidential Commission on Good Government is hereby given
a final extension of fifteen (15) days from receipt hereof within which to comply
with the Order of December 6, 1994 as stated hereinabove.
On April 1, 1996, PCGG filed a Manifestation with Motion for Reconsideration,10
praying for the setting aside of the Resolution of February 23, 1996. On April
11, 1996, private respondent Benedicto filed a Motion to Enforce Judgment
Levy. Resolving these two motions, the Sandiganbayan, in its second assailed
Resolution11 dated March 13, 1997, denied that portion of the PCGG’s
Manifestation with Motion for Reconsideration concerning the subject 227
NOGCCI shares and granted Benedicto’s Motion to Enforce Judgment Levy.
Hence, the Republic’s present recourse on the sole issue of whether or not the
public respondent Sandiganbayan, Second Division, gravely abused its
discretion in holding that the PCGG is at fault for not paying the membership
dues on the 227 sequestered NOGCCI shares of stock, a failing which
eventually led to the foreclosure sale thereof.
The petition lacks merit.
To begin with, PCGG itself does not dispute its being considered as a receiver
insofar as the sequestered 227 NOGCCI shares of stock are concerned. 12
PCGG also acknowledges that as such receiver, one of its functions is to pay
outstanding debts pertaining to the sequestered entity or property,13 in this case
the 227 NOGCCI shares in question. It contends, however, that membership
dues owing to a golf club cannot be considered as an outstanding debt for
which PCGG, as receiver, must pay. It also claims to have exercised due
diligence to prevent the loss through delinquency sale of the subject NOGCCI
shares, specifically inviting attention to the injunctive suit, i.e., Civil Case No.
5348, it filed before the RTC of Bacolod City to enjoin the foreclosure sale of
the shares.
The filing of the injunction complaint adverted to, without more, cannot plausibly
tilt the balance in favor of PCGG. To the mind of the Court, such filing is a case
of acting too little and too late. It cannot be over-emphasized that it behooved
the PCGG’s fiscal agents to preserve, like a responsible father of the family, the
value of the shares of stock under their administration. But far from acting as
such father, what the fiscal agents did under the premises was to allow the
element of delinquency to set in before acting by embarking on a tedious
process of going to court after the auction sale had been announced and
scheduled.
The PCGG’s posture that to the owner of the sequestered shares rests the
burden of paying the membership dues is untenable. For one, it lost sight of the
reality that such dues are basically obligations attached to the shares, which, in
the final analysis, shall be made liable, thru delinquency sale in case of default
in payment of the dues. For another, the PCGG as sequestrator-receiver of
such shares is, as stressed earlier, duty bound to preserve the value of such
shares. Needless to state, adopting timely measures to obviate the loss of
those shares forms part of such duty and due diligence.
The Sandiganbayan, to be sure, cannot plausibly be faulted for finding the
PCGG liable for the loss of the 227 NOGCCI shares. There can be no
quibbling, as indeed the graft court so declared in its assailed and related
resolutions respecting the NOGCCI shares of stock, that PCGG’s fiscal agents,
while sitting in the NOGCCI Board of Directors agreed to the amendment of the
rule pertaining to membership dues. Hence, it is not amiss to state, as did the
Sandiganbayan, that the PCGG-designated fiscal agents, no less, had a direct
hand in the loss of the sequestered shares through delinquency and their
eventual sale through public auction. While perhaps anti-climactic to so mention
it at this stage, the unfortunate loss of the shares ought not to have come to
pass had those fiscal agents prudently not agreed to the passage of the
NOGCCI board resolutions charging membership dues on shares without
playing representatives.
Given the circumstances leading to the auction sale of the subject NOGCCI
shares, PCGG’s lament about public respondent Sandiganbayan having erred
or, worse still, having gravely abused its discretion in its determination as to
who is at fault for the loss of the shares in question can hardly be given
cogency.
For sure, even if the Sandiganbayan were wrong in its findings, which does not
seem to be in this case, it is a well-settled rule of jurisprudence that certiorari
will issue only to correct errors of jurisdiction, not errors of judgment. Corollarily,
errors of procedure or mistakes in the court’s findings and conclusions are
beyond the corrective hand of certiorari.14 The extraordinary writ of certiorari
may be availed only upon a showing, in the minimum, that the respondent
tribunal or officer exercising judicial or quasi-judicial functions has acted without
or in excess of its or his jurisdiction, or with grave abuse of discretion.15
The term "grave abuse of discretion" connotes capricious and whimsical
exercise of judgment as is equivalent to excess, or a lack of jurisdiction. 16 The
abuse must be so patent and gross as to amount to an evasion of a positive
duty or a virtual refusal to perform a duty enjoined by law, 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 or hostility. 17 Sadly, this is completely
absent in the present case. For, at bottom, the assailed resolutions of the
Sandiganbayan did no more than to direct PCGG to comply with its part of the
bargain under the compromise agreement it freely entered into with private
respondent Benedicto. Simply put, the assailed resolutions of the
Sandiganbayan have firm basis in fact and in law.
Lest it be overlooked, the issue of liability for the shares in question had, as
both public and private respondents asserted, long become final and executory.
Petitioner’s narration of facts in its present petition is even misleading as it
conveniently fails to make reference to two (2) resolutions issued by the
Sandiganbayan. We refer to that court’s resolutions of December 6, 199418 and
February 23, 199619 as well as several intervening pleadings which served as
basis for the decisions reached therein. As it were, the present petition
questions only and focuses on the March 28, 199520 and March 13, 199721
resolutions, which merely reiterated and clarified the graft court’s underlying
resolution of December 6, 1994. And to place matters in the proper perspective,
PCGG’s failure to comply with the December 6, 1994 resolution prompted the
issuance of the clarificatory and/or reiteratory resolutions aforementioned.
In a last-ditch attempt to escape liability, petitioner Republic, through the
PCGG, invokes state immunity from suit.22 As argued, the order for it to pay the
value of the delinquent shares would fix monetary liability on a government
agency, thus necessitating the appropriation of public funds to satisfy the
judgment claim.23 But, as private respondent Benedicto correctly countered, the
PCGG fails to take stock of one of the exceptions to the state immunity
principle, i.e., when the government itself is the suitor, as in Civil Case No.
0034. Where, as here, the State itself is no less the plaintiff in the main case,
immunity from suit cannot be effectively invoked.24 For, as jurisprudence
teaches, when the State, through its duly authorized officers, takes the initiative
in a suit against a private party, it thereby descends to the level of a private
individual and thus opens itself to whatever counterclaims or defenses the latter
may have against it.25 Petitioner Republic’s act of filing its complaint in Civil
Case No. 0034 constitutes a waiver of its immunity from suit. Being itself the
plaintiff in that case, petitioner Republic cannot set up its immunity against
private respondent Benedicto’s prayers in the same case.
In fact, by entering into a Compromise Agreement with private respondent
Benedicto, petitioner Republic thereby stripped itself of its immunity from suit
and placed itself in the same level of its adversary. When the State enters into
contract, through its officers or agents, in furtherance of a legitimate aim and
purpose and pursuant to constitutional legislative authority, whereby mutual or
reciprocal benefits accrue and rights and obligations arise therefrom, the State
may be sued even without its express consent, precisely because by entering
into a contract the sovereign descends to the level of the citizen. Its consent to
be sued is implied from the very act of entering into such contract,26 breach of
which on its part gives the corresponding right to the other party to the
agreement.
Finally, it is apropos to stress that the Compromise Agreement in Civil Case
No. 0034 envisaged the immediate recovery of alleged ill-gotten wealth without
further litigation by the government, and buying peace on the part of the aging
Benedicto.27 Sadly, that stated objective has come to naught as not only had
the litigation continued to ensue, but, worse, private respondent Benedicto
passed away on May 15, 2000,28 with the trial of Civil Case No. 0034 still in
swing, so much so that the late Benedicto had to be substituted by the
administratrix of his estate.29
WHEREFORE, the instant petition is hereby DISMISSED.
SO ORDERED.
 REPUBLIC OF THE PHILIPPINES, G.R. No. 161657

Petitioner, Via this verified petition for certiorari and prohibition under Rule 65 of
the Rules of Court, the Republic of the Philippines (“Republic,” for short), thru
Present: the Office of the Solicitor General (OSG), comes to this Court to nullify and set
aside the decision dated August 27, 2003 and other related issuances of the
Regional Trial Court (RTC) of Manila, Branch 37, in its Civil Case No. 99-
94075. In directly invoking the Court’s original jurisdiction to issue the
PUNO, C.J.,Chairperson,
extraordinary writs of certiorari and prohibition, without challenge from any of
- versus SANDOVAL-GUTIERREZ, the respondents, the Republic gave as justification therefor the fact that the
- case involves an over TWO BILLION PESO judgment against the State,
CORONA, allegedly rendered in blatant violation of the Constitution, law and
jurisprudence.
AZCUNA, and

GARCIA, JJ.
HON. VICENTE A. HIDALGO, in his By any standard, the case indeed involves a colossal sum of money
capacity as Presiding Judge of the which, on the face of the assailed decision, shall be the liability of the national
Regional Trial Court of Manila, Branch government or, in fine, the taxpayers. This consideration, juxtaposed with the
37, CARMELO V. CACHERO, in his constitutional and legal questions surrounding the controversy, presents special
capacity as Sheriff IV, Regional Trial and compelling reasons of public interests why direct recourse to the Court
Court of Manila, and TARCILA should be allowed, as an exception to the policy on hierarchy of courts.
LAPERAL MENDOZA, Promulgated:

Respondents.
At the core of the litigation is a 4,924.60-square meter lot once covered
by Transfer Certificate of Title (TCT) No. 118527 of the Registry of Deeds of
Manila in the name of the herein private respondent Tarcila Laperal Mendoza
October 4, 2007 (Mendoza), married to Perfecto Mendoza. The lot is situated at No. 1440
Arlegui St., San Miguel, Manila, near the Malacañang Palace complex. On this
x----------------------------------------------------------------------------------------x
lot, hereinafter referred to as the Arlegui property, now stands the Presidential
Guest House which was home to two (2) former Presidents of the Republic and
now appears to be used as office building of the Office of the President.

DECISION
The facts:

GARCIA, J.:
 Sometime in June 1999, Mendoza filed a suit with the RTC of Manila for
reconveyance and the corresponding declaration of nullity of a deed of sale and
title against the Republic, the Register of Deeds of Manila and one Atty. Fidel
Vivar. In her complaint, as later amended, docketed as Civil Case No. 99-
94075 and eventually raffled to Branch 35 of the court, Mendoza essentially
alleged being the owner of the disputed Arlegui property which the Republic
forcibly dispossessed her of and over which the Register of Deeds of Manila
issued TCT No. 118911 in the name of the Republic.
Answering, the Republic set up, among other affirmative defenses, the
State’s immunity from suit.
The intervening legal tussles are not essential to this narration. What is
material is that in an Order of March 17, 2000, the RTC of Manila, Branch 35,
dismissed Mendoza’s complaint. The court would also deny, in another order
dated May 12, 2000, Mendoza’s omnibus motion for reconsideration. On a
petition for certiorari, however, the Court of Appeals (CA), in CA-G.R. SP No.
60749, reversed the trial court’s assailed orders and remanded the case to the
court a quo for further proceedings. On appeal, this Court, in G.R. No. 155231,
sustained the CA’s reversal action.
From Branch 35 of the trial court whose then presiding judge inhibited
himself from hearing the remanded Civil Case No. 99-94075, the case was re-
raffled to Branch 37 thereof, presided by the respondent judge.
On May 5, 2003, Mendoza filed a Motion for Leave of Court to file a Third
Amended Complaint with a copy of the intended third amended complaint
thereto attached. In the May 16, 2003 setting to hear the motion, the RTC, in
open court and in the presence of the Republic’s counsel, admitted the third
amended complaint, ordered the Republic to file its answer thereto within five
(5) days from May 16, 2003 and set a date for pre-trial.
In her adverted third amended complaint for recovery and
reconveyance of the Arlegui property, Mendoza sought the declaration of
nullity of a supposed deed of sale dated July 15, 1975 which provided the
instrumentation toward the issuance of TCT No. 118911 in the name of the
Republic. And aside from the cancellation of TCT No. 118911, Mendoza also
asked for the reinstatement of her TCT No. 118527. In the same third amended
complaint, Mendoza averred that, since time immemorial, she and her
predecessors-in-interest had been in peaceful and adverse possession of the
property as well as of the owner’s duplicate copy of TCT No. 118527. Such
possession, she added, continued “until the first week of July 1975 when a
group of armed men representing themselves to be members of the
Presidential Security Group [PSG] of the then President Ferdinand E. Marcos,
had forcibly entered [her] residence and ordered [her] to turn over to them her
… Copy of TCT No. 118525 … and compelled her and the members of her
household to vacate the same …; thus, out of fear for their lives, [she] handed
her Owner’s Duplicate Certificate Copy of TCT No. 118527 and had left and/or
vacated the subject property.” Mendoza further alleged the following:
1. Per verification, TCT No. 118527 had already been cancelled by
virtue of a deed of sale in favor of the Republic allegedly executed by her and
her deceased husband on July 15, 1975 and acknowledged before Fidel Vivar
which deed was annotated at the back of TCT No. 118527 under PE: 2035/T-
118911 dated July 28, 1975; and
2. That the aforementioned deed of sale is fictitious as she (Mendoza)
and her husband have not executed any deed of conveyance covering the
disputed property in favor of the Republic, let alone appearing before Fidel
Vivar.
Inter alia, she prayed for the following:
4. Ordering the … Republic to pay plaintiff [Mendoza] a reasonable
compensation or rental for the use or occupancy of the subject property in the
sum of FIVE HUNDRED THOUSAND (P500,000.00) PESOS a month with a
five (5%) per cent yearly increase, plus interest thereon at the legal rate,
beginning July 1975 until it finally vacates the same;
5. Ordering the … Republic to pay plaintiff’s counsel a sum
equivalent to TWENTY FIVE (25%) PER CENT of the current value of the
subject property and/or whatever amount is recovered under the premises;
Further, plaintiff prays for such other relief, just and equitable under the
premises.
Eventually, the trial court rendered a judgment by default for Mendoza
and against the Republic. To the trial court, the Republic had veritably
confiscated Mendoza’s property, and deprived her not only of the use thereof
but also denied her of the income she could have had otherwise realized during
all the years she was illegally dispossessed of the same.
Dated August 27, 2003, the trial court’s decision dispositively reads as
follows:

WHEREFORE, judgment is hereby rendered:

On May 21, 2003, the Republic, represented by the OSG, filed a Motion
for Extension (With Motion for Cancellation of scheduled pre-trial). In it, the
Republic manifested its inability to simply adopt its previous answer and,
1. Declaring the deed of sale dated July 15, 1975, annotated at the
accordingly, asked that it be given a period of thirty (30) days from May 21,
back of [TCT] No. 118527 as PE:2035/T-118911, as non-existent and/or
2003 or until June 20, 2003 within which to submit an Answer. June 20, 2003
fictitious, and, therefore, null and void from the beginning;
came and went, but no answer was filed. On July 18, 2003 and again on
August 19, 2003, the OSG moved for a 30-day extension at each instance.
The filing of the last two motions for extension proved to be an idle gesture,
however, since the trial court had meanwhile issued an order dated July 7, 2. Declaring that [TCT] No. 118911 of the defendant Republic of the
2003 declaring the petitioner Republic as in default and allowing the private Philippines has no basis, thereby making it null and void from the beginning;
respondent to present her evidence ex-parte.

3. Ordering the defendant Register of Deeds for the City of Manila to

The evidence for the private respondent, as plaintiff a quo, consisted of reinstate plaintiff [Mendoza’s TCT] No. 118527;
her testimony denying having executed the alleged deed of sale dated July 15,
1975 which paved the way for the issuance of TCT No. 118911. According to
her, said deed is fictitious or inexistent, as evidenced by separate certifications,
4. Ordering the defendant Republic … to pay just compensation in
the first (Exh. “E”), issued by the Register of Deeds for Manila and the second
the sum of ONE HUNDRED FORTY THREE MILLION SIX HUNDRED
(Exh. “F”), by the Office of Clerk of Court, RTC Manila. Exhibit “E” states that a
THOUSAND (P143,600,000.00) PESOS, plus interest at the legal rate, until the
copy of the supposed conveying deed cannot, despite diligent efforts of records
whole amount is paid in full for the acquisition of the subject property;
personnel, be located, while Exhibit “F” states that Fidel Vivar was not a
commissioned notary public for and in the City of Manila for the year 1975.
Three other witnesses testified, albeit their testimonies revolved around the
appraisal and rental values of the Arlegui property. 5. Ordering the plaintiff, upon payment of the just compensation for
the acquisition of her property, to execute the necessary deed of conveyance in
favor of the defendant Republic …; and, on the other hand, directing the
defendant Register of Deeds, upon presentation of the said deed of
conveyance, to cancel plaintiff’s TCT No. 118527 and to issue, in lieu thereof, a
new Transfer Certificate of Title in favor of the defendant Republic;
6. Ordering the defendant Republic … to pay the plaintiff the sum of
ONE BILLION FOUR HUNDRED EIGHTY MILLION SIX HUNDRED TWENTY
SEVEN THOUSAND SIX HUNDRED EIGHTY EIGHT (P1,480,627,688.00)
PESOS, representing the reasonable rental for the use of the subject property,
the interest thereon at the legal rate, and the opportunity cost at the rate of
three (3%) per cent per annum, commencing July 1975 continuously up to July
30, 2003, plus an additional interest at the legal rate, commencing from this
date until the whole amount is paid in full;
7. Ordering the defendant Republic … to pay the plaintiff attorney’s
fee, in an amount equivalent to FIFTEEN (15%) PER CENT of the amount due
to the plaintiff.
With pronouncement as to the costs of suit.
SO ORDERED. (Words in bracket and emphasis added.)
Subsequently, the Republic moved for, but was denied, a new trial per
order of the trial court of October 7, 2003. Denied also was its subsequent plea
for reconsideration. These twin denial orders were followed by several orders
and processes issued by the trial court on separate dates as hereunder
indicated:
1. November 27, 2003 - - Certificate of Finality declaring the August 27,
2003 decision final and executory.
2. December 17, 2003 - - Order denying the Notice of Appeal filed on
November 27, 2003, the same having been filed beyond the reglementary
period.
3. December 19, 2003 - - Order granting the private respondent’s motion for
execution.
4. December 22, 2003 - - Writ of Execution.
Hence, this petition for certiorari.
By Resolution of November 20, 2006, the case was set for oral
arguments. On January 22, 2007, when this case was called for the purpose,
both parties manifested their willingness to settle the case amicably, for which
reason the Court gave them up to February 28, 2007 to submit the compromise
agreement for approval. Following several approved extensions of the February
28, 2007 deadline, the OSG, on August 6, 2007, manifested that it is submitting
the case for resolution on the merits owing to the inability of the parties to agree
on an acceptable compromise.
In this recourse, the petitioner urges the Court to strike down as a nullity
the trial court’s order declaring it in default and the judgment by default that
followed. Sought to be nullified, too, also on the ground that they were issued in
grave abuse of discretion amounting to lack or in excess of jurisdiction, are the
orders and processes enumerated immediately above issued after the rendition
of the default judgment.
Petitioner lists five (5) overlapping grounds for allowing its petition. It
starts off by impugning the order of default and the judgment by default. To the
petitioner, the respondent judge committed serious jurisdictional error when he
proceeded to hear the case and eventually awarded the private respondent a
staggering amount without so much as giving the petitioner the opportunity to
present its defense.
 Petitioner’s posture is simply without merit. Under the premises, the mere issuance by the trial court of the order of
default followed by a judgment by default can easily be sustained as correct
and doubtless within its jurisdiction. Surely, a disposition directing the Republic
to pay an enormous sum without the trial court hearing its side does not,
Deprivation of procedural due process is obviously the petitioner’s
without more, vitiate, on due procedural ground, the validity of the default
threshold theme. Due process, in its procedural aspect, guarantees in the
judgment. The petitioner may have indeed been deprived of such hearing, but
minimum the opportunity to be heard. Grave abuse of discretion, however,
this does not mean that its right to due process had been violated. For,
cannot plausibly be laid at the doorstep of the respondent judge on account of
consequent to being declared in default, the defaulting defendant is deemed to
his having issued the default order against the petitioner, then proceeding with
have waived his right to be heard or to take part in the trial. The handling
the hearing and eventually rendering a default judgment. For, what the
solicitors simply squandered the Republic’s opportunity to be heard. But more
respondent judge did hew with what Section 3, Rule 9 of the Rules of Court
importantly, the law itself imposes such deprivation of the right to participate as
prescribes and allows in the event the defending party fails to seasonably file a
a form of penalty against one unwilling without justification to join issue upon
responsive pleading. The provision reads:
the allegations tendered by the plaintiff.

SEC. 3. Default; declaration of.- If the defending party fails to

And going to another point, the petitioner would ascribe jurisdictional
answer within the time allowed therefor, the court shall, upon motion of the
error on the respondent judge for denying its motion for new trial based on any
claiming party with notice to the defending party, and proof of such failure,
or a mix of the following factors, viz., (1) the failure to file an answer is
declare the defending party in default. Thereupon, the court shall proceed to
attributable to the negligence of the former handling solicitor; (2) the meritorious
render judgment granting the claimant such relief as his pleading may warrant,
nature of the petitioner’s defense; and (3) the value of the property involved.
unless the court in its discretion requires the claimant to submit evidence ….

The Court is not convinced. Even as the Court particularly notes what the
While the ideal lies in avoiding orders of default, the policy of the law
trial court had said on the matter of negligence: that all of the petitioner’s
being to have every litigated case tried on its full merits, the act of the
pleadings below bear at least three signatures, that of the handling solicitor, the
respondent judge in rendering the default judgment after an order of default
assistant solicitor and the Solicitor General himself, and hence accountability
was properly issued cannot be struck down as a case of grave abuse of
should go up all the way to the top of the totem pole of authority, the cited
discretion.
reasons advanced by the petitioner for a new trial are not recognized under
Section 1, Rule 37 of the Rules of Court for such recourse. Withal, there is no
cogent reason to disturb the denial by the trial court of the motion for new trial
The term “grave abuse of discretion,” in its juridical sense, connotes and the denial of the reiterative motion for reconsideration.
capricious, despotic, oppressive or whimsical exercise of judgment as is
equivalent to lack of jurisdiction. The abuse must be of such degree as to
amount to an evasion of a positive duty or a virtual refusal to perform a duty
Then, too, the issuance by the trial court of the Order dated December
enjoined by law, as where the power is exercised in a capricious manner. The
17, 2003 denying the petitioner’s notice of appeal after the court caused the
word “capricious,” usually used in tandem with “arbitrary,” conveys the notion of
issuance on November 27, 2003 of a certificate of finality of its August 27, 2003
willful and unreasoning action.
decision can hardly be described as arbitrary, as the petitioner would have this
Court believe. In this regard, the Court takes stock of the following key events
and material dates set forth in the assailed December 17, 2003 order, supra:
(a) The petitioner, thru the OSG, received on August 29, 2003 a copy of the
RTC decision in this case, hence had up to September 13, 2003, a Saturday,
within which to perfect an appeal; (b) On September 15, 2003, a Monday, the
OSG filed its motion for new trial, which the RTC denied, the OSG receiving a
copy of the order of denial on October 9, 2003; and (c) On October 24, 2003,
the OSG sought reconsideration of the order denying the motion for new trial.
The motion for reconsideration was denied per Order dated November 25,
2003, a copy of which the OSG received on the same date.
Given the foregoing time perspective, what the trial court wrote in its
aforementioned impugned order of December 17, 2003 merits approval:
In the case at bar, it is clear that the motion for new trial filed on the
fifteenth (15th) day after the decision was received on August 29, 2003 was
denied and the moving party has only the remaining period from notice of
notice of denial within which to file a notice of appeal. xxx
Accordingly, when defendants [Republic et al.] filed their motion
for new trial on the last day of the fifteen day (15) prescribed for taking an
appeal, which motion was subsequently denied, they had one (1) day from
receipt of a copy of the order denying … new trial within which to perfect [an]
appeal …. Since defendants had received a copy of the order denying their
motion for new trial on 09 October 2003, reckoned from that date, they only
have one (1) day left within which to file the notice of appeal. But instead of
doing so, the defendants filed a motion for reconsideration which was later
declared by the Court as pro forma motion in the Order dated 25 November
2003. The running of the prescriptive period, therefore, can not be interrupted
by a pro forma motion. Hence the filing of the notice of appeal on 27 November
2007 came much too late for by then the judgment had already become final
and executory. (Words in bracket added; Emphasis in the original.)
It cannot be over-emphasized at this stage that the special civil action of
certiorari is limited to resolving only errors of jurisdiction; it is not a remedy to
correct errors of judgment. Hence, the petitioner’s lament, partly covered by
and discussed under the first ground for allowing its petition, about the trial
court taking cognizance of the case notwithstanding private respondent’s claim
or action being barred by prescription and/or laches cannot be considered
favorably. For, let alone the fact that an action for the declaration of the
inexistence of a contract, as here, does not prescribe; that a void transfer of
property can be recovered by accion reivindicatoria; and that the legal fiction of
indefeasibility of a Torrens title cannot be used as a shield to perpetuate fraud,
the trial court’s disinclination not to appreciate in favor of the Republic the
general principles of prescription or laches constitutes, at best, errors of
judgment not correctable by certiorari.
The evidence adduced below indeed adequately supports a conclusion
that the Office of the President, during the administration of then President
Marcos, wrested possession of the property in question and somehow secured
a certificate of title over it without a conveying deed having been executed to
legally justify the cancellation of the old title (TCT No. 118527) in the name of
the private respondent and the issuance of a new one (TCT No. 118911) in the
name of petitioner Republic. Accordingly, granting private respondent’s basic
plea for recovery of the Arlegui property, which was legally hers all along, and
the reinstatement of her cancelled certificate of title are legally correct as they
are morally right. While not exactly convenient because the Office of the
President presently uses it for mix residence and office purposes, restoring
private respondent to her possession of the Arlegui property is still legally and
physically feasible. For what is before us, after all, is a registered owner of a
piece of land who, during the early days of the martial law regime, lost
possession thereof to the Government which appropriated the same for some
public use, but without going through the legal process of expropriation, let
alone paying such owner just compensation.
The Court cannot, however, stop with just restoring the private
respondent to her possession and ownership of her property. The restoration
ought to be complemented by some form of monetary compensation for
having been unjustly deprived of the beneficial use thereof, but not, however,
in the varying amounts and level fixed in the assailed decision of the trial court
and set to be executed by the equally assailed writ of execution. The Court
finds the monetary award set forth therein to be erroneous. And the error Given the above perspective, the obvious question that comes to mind is
relates to basic fundamentals of law as to constitute grave abuse of discretion. the level of compensation which – for the use and occupancy of the Arlegui
property - would be fair to both the petitioner and the private respondent and,
at the same time, be within acceptable legal bounds. The process of balancing
the interests of both parties is not an easy one. But surely, the Arlegui
As may be noted, private respondent fixed the assessed value of her
property cannot possibly be assigned, even perhaps at the present real estate
Arlegui property at P2,388,990.00. And in the prayer portion of her third
business standards, a monthly rental value of at least P500,000.00 or
amended complaint for recovery, she asked to be restored to the possession of
P6,000,000.00 a year, the amount private respondent particularly sought and
her property and that the petitioner be ordered to pay her, as reasonable
attempted to prove. This asking figure is clearly unconscionable, if not
compensation or rental use or occupancy thereof, the sum of P500,000.00 a
downright ridiculous, attendant circumstances considered. To the Court, an
month, or P6 Million a year, with a five percent (5%) yearly increase plus
award of P20,000.00 a month for the use and occupancy of the Arlegui
interest at the legal rate beginning July 1975. From July 1975 when the PSG
property, while perhaps a little bit arbitrary, is reasonable and may be granted
allegedly took over the subject property to July 2003, a month before the trial
pro hac vice considering the following hard realities which the Court takes
court rendered judgment, or a period of 28 years, private respondent’s total
stock of:
rental claim would, per the OSG’s computation, only amount to
P371,440,426.00. In its assailed decision, however, the trial court ordered the
petitioner to pay private respondent the total amount of over P1.48 Billion or the
mind-boggling amount of P1,480,627,688.00, to be exact, representing the 1. The property is relatively small in terms of actual area and had an
reasonable rental for the property, the interest rate thereon at the legal rate and assessed value of only P2,388,900.00;
the opportunity cost. This figure is on top of the P143,600,000.00 which
represents the acquisition cost of the disputed property. All told, the trial court 2. What the martial law regime took over was not exactly an area with a new
would have the Republic pay the total amount of about P1.624 Billion, and imposing structure, if there was any; and
exclusive of interest, for the taking of a property with a declared assessed value
of P2,388,900.00. This is not to mention the award of attorney’s fees in an
amount equivalent to 15% of the amount due the private respondent. 3. The Arlegui property had minimal rental value during the relatively long
martial law years, given the very restrictive entry and egress conditions
prevailing at the vicinity at that time and even after.
In doing so, the respondent judge brazenly went around the explicit
command of Rule 9, Section 3(d) of the Rules of Court which defines the extent
of the relief that may be awarded in a judgment by default, i.e., only so much as
has been alleged and proved. The court acts in excess of jurisdiction if it
awards an amount beyond the claim made in the complaint or beyond that To be sure, the grant of monetary award is not without parallel. In
proved by the evidence. While a defaulted defendant may be said to be at the Alfonso v. Pasay City, a case where a registered owner also lost possession of
mercy of the trial court, the Rules of Court and certainly the imperatives of fair a piece of lot to a municipality which took it for a public purposes without
play see to it that any decision against him must be in accordance with law. In instituting expropriation proceedings or paying any compensation for the lot, the
the abstract, this means that the judgment must not be characterized by Court, citing Herrera v. Auditor General, ordered payment of just compensation
outrageous one-sidedness, but by what is fair, just and equitable that always but in the form of interest when a return of the property was no longer feasible.
underlie the enactment of a law.
 The award of attorney’s fees equivalent to 15% of the amount due the
private respondent, as reduced herein, is affirmed.
The assessment of costs of suit against the petitioner is, however,
nullified, costs not being allowed against the Republic, unless otherwise
provided by law.
The assailed trial court’s issuance of the writ of execution against
government funds to satisfy its money judgment is also nullified. It is basic that
government funds and properties may not be seized under writs of execution or
garnishment to satisfy such judgments. Republic v. Palacio teaches that a
judgment against the State generally operates merely to liquidate and establish
the plaintiff’s claim in the absence of express provision; otherwise, they can not
be enforced by processes of law.
Albeit title to the Arlegui property remains in the name of the petitioner
Republic, it is actually the Office of the President which has beneficial
possession of and use over it since the 1975 takeover. Accordingly, and in
accord with the elementary sense of justice, it behooves that office to make the
appropriate budgetary arrangements towards paying private respondent what is
due her under the premises. This, to us, is the right thing to do. The
imperatives of fair dealing demand no less. And the Court would be remiss in
the discharge of its duties as dispenser of justice if it does not exhort the Office
of the President to comply with what, in law and equity, is its obligation. If the
same office will undertake to pay its obligation with reasonable dispatch or in a
manner acceptable to the private respondent, then simple justice, while
perhaps delayed, will have its day. Private respondent is in the twilight of her
life, being now over 90 years of age. Any delay in the implementation of this
disposition would be a bitter cut.
WHEREFORE, the decision of the Regional Trial Court of Manila dated
August 27, 2003 insofar as it nullified TCT No. 118911 of petitioner Republic of
the Philippines and ordered the Register of Deeds of Manila to reinstate private
respondent Tarcila L. Mendoza’s TCT No. 118527, or to issue her a new
certificate of title is AFFIRMED. Should it be necessary, the Register of Deeds
of Manila shall execute the necessary conveying deed to effect the
reinstatement of title or the issuance of a new title to her.
It is MODIFIED in the sense that for the use and occupancy of the
Arlegui property, petitioner Republic is ordered to pay private respondent the
reasonable amount of P20,000.00 a month beginning July 1975 until it vacates
the same and the possession thereof restored to the private respondent, plus
an additional interest of 6% per annum on the total amount due upon the finality
of this Decision until the same is fully paid. Petitioner is further ordered to pay
private respondent attorney's fees equivalent to 15% of the amount due her
under the premises.
Accordingly, a writ of certiorari is hereby ISSUED in the sense that:
1. The respondent court’s assailed decision of August 27, 2003 insofar
as it ordered the petitioner Republic of the Philippines to pay private respondent
Tarcila L. Mendoza the sum of One Billion Four Hundred Eighty Million Six
Hundred Twenty Seven Thousand Six Hundred Eighty Eight Pesos
(P1,480,627,688.00) representing the purported rental use of the property in
question, the interest thereon and the opportunity cost at the rate of 3% per
annum plus the interest at the legal rate added thereon is nullified. The
portion assessing the petitioner Republic for costs of suit is also declared null
and void.
2. The Order of the respondent court dated December 19, 2003 for the
issuance of a writ of execution and the Writ of Execution dated December 22,
2003 against government funds are hereby declared null and void.
Accordingly, the presiding judge of the respondent court, the private
respondent, their agents and persons acting for and in their behalves are
permanently enjoined from enforcing said writ of execution.
 However, consistent with the basic tenets of justice, fairness and equity,
petitioner Republic, thru the Office of the President, is hereby strongly
enjoined to take the necessary steps, and, with reasonable dispatch, make the
appropriate budgetary arrangements to pay private respondent Tarcila L.
Mendoza or her assigns the amount adjudged due her under this disposition.

SO ORDERED.
TERESITA M. YUJUICO, G.R. No. 164282 Member, City School Board of

Petitioner, Manila, LIBERTY TOLEDO, Member,

City School Board of Manila,

Present: HON. FRANCESCA GERNALE

(In substitution of PERCIVAL FLORIENDO),

- versus - Member, City School Board of Manila,

PUNO, J., ISABELITA SANTOS, Secretary,

Chairman, City School Board of Manila,

AUSTRIA-MARTINEZ, VICENTE MACARUBBO

HON. JOSE L. ATIENZA, JR., CALLEJO, SR., (In substitution of Isabelita Ching),

Chairman, City School TINGA, and Assistant Secretary, City School

Board of Manila, DR. MA. CHICO-NAZARIO, JJ. Board of Manila, CITY SCHOOL BOARD OF

LUISA S. QUIÑONES, MANILA and JUDGE MERCEDES

Co-Chairman, City School Board, POSADA-LACAP, in her capacity as

and Schools Division PRESIDING JUDGE OF THE REGIONAL

Superintendent, ROGER Promulgated: TRIAL COURT OF MANILA, BRANCH 15,

GERNALE, Member, City Respondents.

School Board of Manila, x-------------------------------------------------------------------x

HON. MANUEL M. ZARCAL, October 12, 2005

(in substitution of ARLENE ORTIZ), DECISION

Member, City School Board Tinga, J.:

of Manila, BENJAMIN VALBUENA This is a Petition for Review on Certiorari instituted by Teresita M.
Yujuico, petitioner in the case for mandamus docketed as Civil Case No. 02-
(In substitution of MILES ROCES), 103748 before the Regional Trial Court (RTC) of Manila, Branch 15. Petitioner
is questioning the propriety of the Order[1] dated 25 June 2004, granting
respondents’ Petition for Relief from Judgment under Section 2, Rule 38 of the
1997 Rules of Civil Procedure.
The operative facts are not disputed.
On 8 December 1995, the City Council of Manila enacted an Ordinance[2]
authorizing the City Mayor to acquire by negotiation or expropriation certain
parcels of land for utilization as a site for the Francisco Benitez Elementary
School.[3] The property chosen is located along Solis St. near Juan Luna St. in
the Second District of Manila and contains an approximate area of 3,979.10
square meters. It is covered by Transfer Certificates of Title Nos. 71541,
71548, 24423, 71544 and 71546, all in the name of petitioner. The Ordinance
provides that an amount not to exceed the fair market value of the land then
prevailing in the area will be allocated out of the Special Education Fund (SEF)
of the City of Manila (City) to defray the cost of the property’s acquisition.[4]
Failing to acquire the land by negotiation, the City filed a case for eminent
domain against petitioner as owner of the property. Filed on 22 August 1996,
the case was raffled to Branch 15, RTC of Manila and docketed as Civil Case
No. 96-79699.[5]
On 30 June 2000, the RTC rendered a Decision[6] in the expropriation case in
favor of the City. The dispositive portion reads:
WHEREFORE, judgment is hereby rendered as follows:
1.) The lots including the improvements therein of defendant Teresita M.
Yujuico, as described in the complaint, are declared expropriated for public use;
2.) The fair market value of the lots of defendant is fixed at P18,164.80 per
square meter. The fair market value of the improvements of lots subject of this
action is fixed at P 978,000.00;
3.) The plaintiff must pay defendant the sum of P72,279,555.68 (3,979.10
sq. m. x P18,164.80) representing the value of the subject lots plus
P978,000.00 representing the value of the improvements or the total amount of
P73,257,555.00 as just compensation for the whole property (including the
improvements) minus the sum of P5,363,289.00 that plaintiff deposited in Court
per Order dated April 30, 1997, hence the balance of P67,894,266.00 with
interest at the rate of 6% per annum from July 15, 1997 (date of possession of
subject property for the purpose of this proceedings) until the day full payment
is made to defendant or deposited in Court.[7]
The judgment became final and executory, no appeal having been interposed
by either party.[8]
On 6 April 2001, petitioner filed a Motion for Execution of Judgment[9] which
the trial court granted. Pursuant to a Writ of Execution[10] dated 28 June 2001,
the branch sheriff served a Notice of Garnishment on the funds of the City
deposited with the Land Bank of the Philippines, YMCA Branch, Manila (Land
Bank) to satisfy the judgment amount of P67,894,226.00, with interest at 6%
per annum.[11]
Invoking jurisprudence holding that public funds cannot be made subject to
garnishment, the City filed a motion to quash the Notice of Garnishment.[12]
Acting on the motion, the trial court issued an Order dated 2 August 2001.
In the Order, the lower court recalled that during the hearing on the motion, the
counsel for the City manifested that the amount of P36,403,170.00 had been
appropriated by the City School Board (CSB) under CSB Resolutions Nos. 613
and 623, of which P31,039,881.00 was available for release. The amount of
P5,363,269.00, representing fifteen percent (15%) of the assessed value of the
property, had been deposited in court at the start of the expropriation
proceedings and subsequently received by petitioner. In line with the
manifestation made by the counsel for the City, the trial court ordered the
release to petitioner of the amount of P31,039,881.00 deposited with the Land
Bank, in partial payment of the just compensation adjudged in favor of
petitioner.[13]
The trial court further stated in the Order:
Considering that this case is on all fours with the case of the
Municipality of Makati vs. Court of Appeals (190 SCRA 206), wherein it was
ruled that “x x x Public funds are not subject to levy and execution,” the Court
therefore grants plaintiff’s Motion to Quash the Notice of Garnishment and the
Notice of Garnishment to the Landbank of the Philippines issued by the Branch
Sheriff of this Court is hereby ordered lifted.
There being no opposition for the release of the Thirty One Million Thirty Nine
Thousand Eight Hundred Eighty One Pesos (P31,039,881.00) deposited with
the Land Bank, YMCA Branch as Special Education Fund, the Manager of the
Landbank of the Philippines, YMCA, Manila is hereby directed to release the
said amount to defendant Teresita M. Yujuico in partial payment of the just
compensation adjudged by this Court in its Decision dated June 30, 2000.
Upon manifestation of the counsel for the plaintiff that it is the City School
Board which has the authority to pass a resolution allocating funds for the full
satisfaction of the just compensation fixed, the said body is hereby given thirty
(30) days from receipt of this Order to pass the necessary resolution for the
payments of the remaining balance due to defendant Teresita M. Yujuico.[14]
A copy of the Order dated 2 August 2001 was served on the CSB on 3
August 2001.[15]
On 30 August 2001, petitioner submitted a manifestation before the trial
court requesting that she be informed by both the City and the CSB if a
resolution had already been passed by the latter in compliance with the Order.
[16] Earlier, petitioner sent a letter to the Superintendent of City Schools of
Manila to verify the CSB’s compliance with the Order.[17]
Not having been favored with a reply to her queries even after the lapse
of the thirty (30)-day compliance period, petitioner sent a letter to the CSB
dated 10 September 2001, demanding compliance with the Order.[18]
As there was no action from the CSB, on 1 February 2002, petitioner filed
a petition for contempt of court against respondents Hon. Jose L. Atienza, Jr.,
Dr. Ma. Luisa S. Quiñoňes, Roger Gernale, Arlene Ortiz, Miles Roces, Percival
Floriendo, Liberty Toledo, Isabelita Santos and Isabelita Ching in their
capacities as officers and members of the CSB.[19] The case was docketed as
Civil Case No. 02-102837 of the Manila RTC.[20]
Countering the petition for contempt, respondents filed a Motion to
Dismiss,[21] wherein they alleged inter alia that they never disregarded the
Order as the matter had in fact been calendared and deliberated upon during
the meetings of the CSB.[22] In their subsequent Omnibus Reply,[23]
respondents argued that petitioner’s failure to avail of the proper recourse to
enforce the final and executory judgment[24] should not be a ground to hold
them in contempt of court. Citing the case of Municipality of Makati v. Court of
Appeals,[25] respondents asserted that petitioner should have filed a petition
for mandamus to force the CSB to pass the necessary resolution for immediate
payment of the balance of the just compensation awarded in her favor.[26]
According to respondents, petitioner took the Order as a writ of mandamus
when in fact it was a mere order in furtherance of the Writ of Execution.[27]
This interpretation, respondents insisted, should never be allowed since
petitioner merely wanted to escape the payment of docket fees in the filing of
the petition for mandamus.[28]
In an Order[29] dated 17 May 2002, the trial court denied the petition for
contempt of court.
On 6 June 2002, petitioner filed a Petition for Mandamus[30] against the
members of the CSB, the same respondents in the petition for contempt of
court, seeking to compel them to pass a resolution appropriating the amount
necessary to pay the balance of the just compensation awarded to petitioner in
the expropriation case, Civil Case No. 96-79699. The petition was docketed as
Spl. Civil Action No. 02-103748 and raffled to Branch 51 of the RTC of Manila.
[31]
Upon petitioner’s motion,[32] Branch 51 of the Manila RTC before which the
mandamus case was pending, in an Order[33] dated 23 August 2002, directed
its consolidation with the expropriation case before Branch 15.[34]
In a Decision[35] dated 9 October 2002, the lower court (Branch 15) granted
the petition for mandamus. Specifically, it ordered respondents to immediately
pass a resolution appropriating the necessary amount and the corresponding
disbursement thereof for the full and complete payment of the balance of the
court-adjudged compensation still due petitioner, ratiocinating as follows:[36]
This case is on all fours with the case of Municipality of Makati v. Court of
Appeals (190 SCRA 206).
....
The State’s power of eminent domain should be exercised within the bounds of
fair play and justice. In the case at bar, considering that valuable property has
been taken, the compensation to be paid fixed and the municipality is in full
possession and utilizing the property for the public purpose, for three (3) years,
the Court finds that the municipality has had more than reasonable time to pay
full compensation.
The arguments of the herein respondents that passing the ordinance or the act
of appropriating special educational fund is a discretionary act that could not be
compelled by mandamus should be thrown overboard. It must be stressed that
what we have here is a final and executory judgment, establishing a legal right
for the petitioner to demand fulfillment which on the other hand became an
imperative duty on the part of the respondent to perform the act required.
WHEREFORE, premises considered, the petition is
GRANTED, and the respondents are hereby ordered to immediately pass a
resolution appropriating the necessary amount; and the corresponding
disbursement thereof, for the full and complete payment of the remaining
balance of the court-adjudged compensation due and owing to petitioner
Teresita M. Yujuico.
SO ORDERED.[37]
Respondents filed a motion for reconsideration, which the trial court denied in
an Order[38] dated 13 December 2002.
With respondents not interposing an appeal, the Decision became final and
executory on 2 January 2003[39] and eventually, the corresponding Entry of
Judgment was issued on 15 January 2003.[40] The court granted petitioner’s
Motion for Execution[41] in an Order[42] dated 12 March 2003.
However, on 14 March 2003, respondents filed a Petition for Relief from
Judgment,[43] wherein they also prayed for a temporary restraining order
(TRO) and a writ of preliminary injunction. Respondents invoked excusable
negligence as a ground for their failure to seasonably file an appeal.[44] While it
denied the application for TRO in view of its prior order granting petitioner’s
Motion for Execution, the court granted the Petition for Relief from Judgment in
an Order[45] dated 25 June 2004. This had the effect of giving due course to
respondents’ appeal despite the fact that the decision of the trial court had
already attained finality.
Finding the Order unacceptable, petitioner elevated it to this Court by way of a
petition for certiorari under Rule 45. In her petition, petitioner asks that the order
of the lower court giving due course to respondents’ appeal be reversed and
set aside on a pure question of law.[46]
Before resolving the substantive issues raised by the parties, the Court will first
address the procedural infirmities ascribed by respondents to the petition at
bar.
Respondents assail the correctness and propriety of the mode of appeal
resorted to by petitioner.[47] According to them, the order granting the petition
for relief from judgment is an interlocutory order which cannot be made the
subject of an appeal.[48] Respondents likewise argue that petitioner failed to
respect the rule on hierarchy of courts. This Court, they aver, had consistently
held that its original jurisdiction to issue a writ of certiorari is not exclusive but is
concurrent with that of the RTC and the Court of Appeals in certain cases.[49]
Respondents have correctly pointed out that an interlocutory order cannot be
made subject to an appeal. However, when viewed in context, the recitals of
the petition clearly disclose and the Court is convinced that the lower court
committed grave abuse of discretion amounting to lack or excess of jurisdiction
when it granted respondents’ petition for relief from judgment. While this case
should have been elevated to this Court not by way of a petition for review
under Rule 45 but through a special civil action for certiorari under Rule 65, in
the exercise of our sound discretion and in order to write finis to this case which
has needlessly dragged on for so long, we shall treat the petition as a special
civil action for certiorari. After all, it was filed within the reglementary period for
the filing of a Rule 65 petition. As we held in Salinas v. NLRC,[50] in the interest
of justice, this Court has often judiciously treated petitions erroneously
captioned as petitions for review on certiorari as special civil actions for
certiorari. This is in line with the principle that the strict application of procedural
technicalities should not hinder the speedy disposition of the case on the
merits.[51]
Accordingly, facial allegations of reversible error in the petition will be treated,
as they should be, as contextual averments of grave abuse of discretion on the
part of the court a quo. Appropriately, petitioner impleaded the RTC Presiding
Judge as party-respondent in the instant petition.
Anent the alleged breach of the rule on hierarchy of courts, the doctrine is not
an iron-clad dictum.[52] The rule may be relaxed when exceptional and
compelling circumstances warrant the exercise of this Court’s primary
jurisdiction.[53] In this case, the judgment sought to be satisfied has long
In the same Resolution, the Court ordered the impleading of the new CSB
attained finality and the expropriated property has been utilized as a school site
members Roger Gernale, Manuel M. Zarcal, Benjamin Valbuena and
for five (5) years now; yet, the awarded just compensation has not been fully
Francesca Gernale as party respondents—the last three in substitution of
paid. These circumstances, in the Court’s estimation, merit the relaxation of the
Arlene Ortiz, Percival Floriendo, Miles Roces—and the new CSB Assistant
technical rules of procedure to ensure that substantial justice will be served.
Secretary Vicente Macarubbo in substitution of Isabelita Ching.[57] Only
Manuel Zarcal filed a Comment[58] dated 30 August 2005 through a new
counsel, adopting in toto the comment of his co-respondents. Hence, the other
Concerning petitioner’s alleged failure to implead the CSB or its new members four newly impleaded party respondents are deemed to have retained the
before the trial court,[54] respondents argue that since there are five (5) new Office of the City Legal Officer (OCLO) as their counsel and to have adopted
members in the CSB any decision in the case requiring the CSB to act as a the Comment already filed by the OCLO in behalf of their co-respondents.
body would prove to be legally impossible. The former members of the CSB
could no longer be compelled to act according to the orders of the Court since
they no longer have the capacity to do so. On the other hand, respondents
Thus, the proper substitutions of some party respondents have already taken
continue, the new members cannot be directed to comply with the Court’s
place in this case.
judgment either; they have never been impleaded in the case; thus, the Court
never acquired jurisdiction over their persons.[55]

The arguments were effectively neutered in our Resolution dated 8 August
2005. There, we declared:
Considering the arguments posited by both parties, this Court is of the view that
a substitution of the original respondents by the members of the CSB who
replaced them is warranted. The phrase “or such time as may be granted by
the Court” in Sec. 17, Rule 3 of the 1997 Rules of Civil Procedure denotes that
the Court before whom the motion for substitution is filed may grant a period
longer than thirty (30) days for the purpose. In any event, technical rules on
substitution of a party should not be so narrowly construed as to prevent this
Court from taking cognizance of a case and deciding it on the merits.
Moreover, petitioner did make an attempt to implead the new members of the
CSB by making the CSB itself a respondent before this Court. There is also no
showing that the new members of the CSB have deviated from the stand of
their predecessors-in-interest; hence, there is a substantial need for continuing
or maintaining petitioner’s action against them.[56]
The last procedural hurdle thrown petitioner’s way by respondents refers to the
supposed failure of the petition to comply with the requirements of Section 4,
Rule 7 and Section 4, Rule 45 of the 1997 Rules of Civil Procedure[59] as
amended by Supreme Court Circular A.M. No. 00-2-10-SC.[60] Respondents
claim that there was failure to include a verified statement indicating the
material dates relative to the receipt of the judgments and the filing of the
pleadings. The verification, moreover, allegedly failed to state that petitioner
has read the petition[61] and that the copies attached thereto are based on
authentic records.[62] The defects of the verification allegedly render the
petition without legal effect and constitute grounds for its dismissal.
The purpose of requiring a verification is to secure an assurance that the
allegations of the petition have been made in good faith; or are true and correct,
not merely speculative.[63] This requirement is simply a condition affecting the
form of pleadings and non-compliance therewith does not necessarily render it
fatally defective.[64] Perusal of the verification in question shows that there was
sufficient compliance with the requirements of the Rules and the alleged
defects are not so material as to justify the dismissal of the petition.
Now, the substantial issues. . . . The excuse offered by respondent . . . as reason for his failure to perfect in
due time his appeal from the judgment of the Municipal Court, that counsel’s
clerk forgot to hand him the court notice, is the most hackneyed and habitual
subterfuge employed by litigants who fail to observe the procedural
Up for determination is the tenability of the RTC’s favorable action on
requirements prescribed by the Rules of Court. The uncritical acceptance of
respondents’ petition for relief from judgment. This engenders a look at the
this kind of common-place excuses, in the face of the Supreme Court’s
grounds and defenses relied upon by respondents in support of their petition.
repeated rulings that they are neither credible nor constitutive of excusable
Sections 2 and 3, Rule 38 of the 1997 Rules of Civil Procedure provide that a
negligence (Gaerlan v. Bernal, L-4039, 29 January 1952; Mercado v. Judge
petition for relief may be granted upon a showing that (1) through fraud,
Domingo, L-19457, 17 December 1966) is certainly such whimsical exercise of
accident, mistake or excusable negligence, a party has been prevented from
judgment as to be a grave abuse of discretion.
taking an appeal, and (2) the party has a good and substantial cause of action
or defense.

....

The above requisites notwithstanding, it bears stressing that relief from

judgment is premised on equity. It is an act of grace which is allowed only in
exceptional cases.[65]
In this case, according to respondents they were unable to seasonably file a
notice of appeal due to “excusable negligence.”[66] One Ronald Silva (Silva),
an employee of the OCLO, allegedly failed to forward the Order denying
respondents’ motion for reconsideration in Civil Case No. 02-103748 to the
handling lawyers. When the order was delivered to the OCLO on 17 December
2002,[67] Silva was the one who received it because the employee designated
to do so was out on official business.[68] Since the employees were busy
preparing for the office Christmas party that day,[69] Silva forgot all about the
order. He only remembered it when the order for entry of judgment in the case
was received on 29 January 2003. By that time, however, the order dated 17
December 2002 had already been misplaced.[70]
Clearly, the situation does not present a case of excusable negligence which
would warrant relief under Rule 38. Time and again, this Court has ruled that
the inability to perfect an appeal in due time by reason of failure of a counsel’s
clerk to notify the handling lawyer is not a pardonable oversight.[71] As held in
one case:
In the face of all these facts and circumstances, . . . the respondent judge
revealed a simple-minded willingness to swallow a story patently concocted to
delay as much as possible the satisfaction of a judgment against
respondent . . . .This indiscriminating credulity does not conform to what is to
be expected of a judicial mind.[72]
Reiterated in numerous cases is the rule that the clerks’ faults are attributable
to the handling lawyers.[73] Thus, excuses offered based on the former’s
negligence are not deemed excusable. That the admonitions issued out by this
Court were mostly directed against lawyers in law firms does not exempt
respondents herein from the same treatment. For all intents and purposes, the
set-up at the OCLO is akin to that of a law firm, the only difference being that
the former serves a public entity while the latter caters to private clients. The
following pronouncement in Negros Stevedoring Co., Inc. v. Court of
Appeals[74] is apropos:
The negligence committed in the case at bar cannot be considered excusable,
nor is it unavoidable. Time and again, the Court has admonished law firms to
adopt a system of distributing pleadings and notices, whereby lawyers working
therein receive promptly notices and pleadings intended for them, so that they
will always be informed of the status of their cases. The Court has also often
repeated that the negligence of clerks which adversely affect the cases handled
by lawyers is binding upon the latter.[75]
Without doubt, it was grave abuse of discretion for the lower court to have given
due course to respondents’ appeal through the grant of their petition for relief
from judgment based on the flimsy ground they proferred.
Even assuming that the negligence invoked by respondents could be
considered excusable, still the petition should not have been granted. It must
be borne in mind that two requisites must be satisfied before a petition under
Rule 38 may be granted, the other being the existence of a good and
substantial cause of action or defense.
Respondents’ defense consisted of their claim that the CSB has a personality
separate and distinct from the City such that it should not be made to pay for
the City’s obligations.[76] However, the argument is undercut by the particular
circumstances of this case.
It is worthy of note that the records of this case clearly show that the same
counsel, the OCLO, represented the City in the expropriation case and now, all
except one of the individual respondents in the case at bar. Worthy of note are
the following manifestations relied upon by the lower court in issuing the order
on the motion to quash the Notice of Garnishment over the funds of the City, to
wit:
The Motion to Quash Notice of Garnishment was heard by this court this
morning and Atty. Joseph Aquino appeared for the plaintiff (City of Manila) and
Atty. Federico Alday, for the defendant. Atty. Aquino manifested that the
amount of Thirty Six Million Four Hundred Three Thousand One Hundred
Seventy Pesos (P36,403,170.00) had been appropriated by the City School
Board (CSB) under CSB Resolution Nos. 613 and 623 for this purpose.
....
Upon manifestation of the counsel for the plaintiff that it is the City
School Board which has the authority to pass a resolution allocating
funds for the full satisfaction of the just compensation fixed, the said body
is hereby given thirty (30) days from receipt of this Order to pass the necessary
resolution for the payments of the remaining balance due to defendant Teresita
M. Yujuico. (Emphasis supplied.)[77]
The manifestation was made by the same counsel now claiming that it is
actually the City which should be made liable for the payment of its own
obligations. This, after it trotted out the CSB as the entity with authority to pass
a resolution that would satisfy the obligation it had vigorously pursued.
The above circumstances, coupled with the rule that an act performed by
counsel within the scope of a “general or implied authority” is regarded as an
act of the client,[78] render the City and, through it, respondents in estoppel. By
estoppel is meant that an admission or representation is rendered conclusive
upon the person making it and cannot be denied or disproved as against the
person relying thereon.[79] Petitioner and the courts acted in accordance with
the City’s own manifestations by running after the CSB. At this point,
respondents and the OCLO can no longer turn around and toss the obligation
back to the City. After all, it was the legal counsel of both the City and
respondents who made a big production out of showing that the liability
incurred by the City will be borne by the CSB.
Contrary to respondents’ claim, the law does not make the CSB an entity
independent from the City of Manila. This is evident from the provisions of the
Local Government Code of 1991, the law providing for the creation of school
boards. It states:
TITLE IV.- LOCAL SCHOOL BOARDS
Section 98. Creation, Composition and Compensation.-
(a) There shall be established in every
province, city or municipality a provincial, city, or municipal school board,
respectively.
(b) The composition of local school boards
shall be as follows:
...
(2) The city school board shall be composed of the city mayor and the city
superintendent of schools as co-chairmen; the chairman of the education
committee of the sangguniang panlungsod, the city treasurer, the
representative of the “pederasyon ng mga sangguniang kabataan” in the
sangguniang panlungsod, the duly elected president of the city federation of
parents-teachers associations, the duly elected representative of the non-
academic personnel of public schools in the city, as members;
...
Section 101. Compensation and Remuneration.-
The co-chairmen and members of the provincial, city or municipal school board
shall perform their duties as such without compensation or remuneration.
Members thereof who are not government officials or employees shall be
entitled to traveling expenses and allowances chargeable against the funds of
the local school board concerned, subject to existing accounting and auditing
rules and regulations.[80]
The fact that the highest ranking official of a local government unit (LGU) is
designated as co-chairman of the school board negates the claim in this case
that the CSB has a personality separate and distinct from the City. The other
fact that government officials in the school board do not receive any
compensation or remuneration while NGO representatives merely receive
allowances underscores the absurdity of respondents’ argument all the more.
Indeed, such would not be the situation if the school board has a personality
separate and distinct from the LGU.
Respondents also argue that the members of the CSB cannot be directed to
decide a discretionary function in the specific manner the court desires.[81] The
question of whether the enactment of an ordinance to satisfy the appropriation
of a final money judgment rendered against an LGU may be compelled by
mandamus has already been settled in Municipality of Makati v. Court of
Appeals.[82]
Nevertheless, this is not to say that private respondent and PSB are left with no
legal recourse. Where a municipality fails or refuses, without justifiable reason,
to effect payment of a final money judgment rendered against it, the claimant
may avail of the remedy of mandamus in order to compel the enactment and
approval of the necessary appropriation ordinance, and the corresponding
disbursement of municipal funds therefore [See Viuda De Tan Toco v. The
Municipal Council of Iloilo, supra, Baldivia v. Lota, 107 Phil 1099 (1960);
Yuviengco v. Gonzales, 108 Phil 247 (1960)].[83]
Clearly, mandamus is a remedy available to a property owner when a money
judgment is rendered in its favor and against a municipality or city, as in this
case.
Moreover, the very ordinance authorizing the expropriation of petitioner’s
property categorically states that the payment of the expropriated property will
be defrayed from the SEF. To quote:
An amount not to exceed the current fair market value, prevailing in the area
appraised in accordance with the requirements of existing laws, rules and
regulations, of the property to be acquired or so much thereof as may be
necessary for the purpose shall be allocated out of the Special Education Fund
of the City to defray the cost of acquisition of the above-mentioned parcels of
land.[84]
The legality of the above-quoted provision is presumed. The source of the
amount necessary to acquire petitioner’s property having in fact been specified
by the City Council of Manila, the passage of the resolution for the allocation
and disbursement thereof is indeed a ministerial duty of the CSB.
Furthermore, respondents had argued in the petition for contempt filed against
them by petitioner that the latter’s failure to invoke the proper remedy of
mandamus should not be a ground to penalize them with contempt. In their
haste to have the contempt petition dismissed, respondents consistently
contended that what petitioner should have filed was a case for mandamus to
compel passage of the corresponding resolution of the CSB if she wanted
immediate payment.[85] Having relied on these representations of respondents
and having filed the action they adverted to, petitioner cannot now be sent by
respondents on another wild goose chase to obtain ultimate recovery of what
she is legally entitled to.
While this Court recognizes the power of LGU to expropriate private property
for public use, it will not stand idly by while the expropriating authority
maneuvers to evade the payment of just compensation of property already in its
possession.
The notion of expropriation is hard enough to take for a private owner. He is
compelled to give up his property for the common weal. But to give it up and
wait in vain for the just compensation decreed by the courts is too much to
bear. In cases like these, courts will not hesitate to step in to ensure that justice
and fair play are served. As we have already ruled:
. . . This Court will not condone petitioner’s blatant refusal to settle its legal
obligation arising from expropriation proceedings it had in fact initiated. It
cannot be over-emphasized that within the context of the State’s inherent
power of eminent domain,
. . . (j)ust compensation means not only the correct determination of the amount
to be paid to the owner of the land but also the payment of the land within a
reasonable time from its taking. Without prompt payment, compensation cannot
be considered ‘just’ for the property owner is made to suffer the consequence
of being immediately deprived of his land while being made to wait for a decade
or more before actually receiving the amount necessary to cope with his loss
(Consculluela v. The Honorable Court of Appeals, G.R. No. 77765, August 15,
1988, 164 SCRA 393, 400. See also Provincial Government of Sorsogon v.
Vda. De Villaroya, G.R. No. 64037, August 27, 1987, 153 SCRA 291).[86]
The decision rendering just compensation in petitioner’s favor was
promulgated way back in the year 2000.[87] Five years have passed, yet the
award still has not been fully satisfied. Recently, in Republic v. Lim,[88] this
Court made the following pronouncement:
. . . while the prevailing doctrine is that the non-payment of just compensation
does not entitle the private landowner to recover possession of the expropriated
lots, however, in cases where the government failed to pay just compensation
within five (5) years from the finality of judgment in the expropriation
proceedings, the owners concerned shall have the right to recover possession
of their property. This is in consonance with the principle that ‘the government
cannot keep the property and dishonor the judgment.’ To be sure, the five-year
period limitation will encourage the government to pay just compensation
punctually. This is in keeping with justice and equity. After all, it is the duty of
the government, whenever it takes property from private persons against their
will, to facilitate the payment of just compensation.[89] (Citations omitted)
Given the above ruling, the reversion of the expropriated property to the
petitioner would prove not to be a remote prospect should respondents and the
City they represent insist on trudging on their intransigent course.
One final note. Respondents’ appeal from the Decision dated 9 October
2002 of the lower court, made possible by its grant of their petition for relief, is
before the Court of Appeals where it is docketed as CA-G.R. No. 86692.[90]
The court’s Decision in this case would have obvious consequences on said
appeal; hence, referral of this Decision to the Court of Appeals is in order.
WHEREFORE, the petition is GRANTED. The Order of the trial court dated 25
June 2004, granting respondents’ Petition for Relief from Judgment is
REVERSED and set aside and its Decision dated 9 October 2002, ordering
respondents to immediately pass a resolution for the payment of the balance of
the court-adjudged compensation due petitioner, is reinstated.
Let a copy of this Decision be furnished the Court of Appeals for its information
and guidance in relation to CA-G.R. No. 86692 entitled “Teresita M. Yujuico v.
Hon. Jose L. Atienza, Jr., et al.”
SO ORDERED.
DEUTSCHE GESELLSCHAFT FÜR
TECHNISCHE ZUSAMMENARBEIT,
also known as GERMAN AGENCY
FOR TECHNICAL COOPERATION,
(GTZ) HANS PETER PAULENZ and
ANNE NICOLAY,
Petitioners,
TINGA,
VELASCO, and
- versus -
HON. COURT OF APPEALS, HON.
ARIEL CADIENTE SANTOS, Labor
Arbiter of the Arbitration Branch,
National Labor Relations Commission,
and BERNADETTE CARMELLA
MAGTAAS, CAROLINA DIONCO,
CHRISTOPHER RAMOS, MELVIN
DELA PAZ, RANDY TAMAYO and
EDGARDO RAMILLO,
Respondents.
G.R. No. 152318
x----------------------------------------------------------------------------x
Present:
DECISION
QUISUMBING, J.,
Chairperson, Tinga, J.:
CARPIO MORALES,
On 7 September 1971, the governments of the Federal Republic of
Germany and the Republic of the Philippines ratified an Agreement concerning
BRION, JJ. Technical Co-operation (Agreement) in Bonn, capital of what was then West
Germany. The Agreement affirmed the countries’ “common interest in
promoting the technical and economic development of their States, and
recogni[zed] the benefits to be derived by both States from closer technical co-
operation,” and allowed for the conclusion of “arrangements concerning
Promulgated: individual projects of technical co-operation.” While the Agreement provided for
a limited term of effectivity of five (5) years, it nonetheless was stated that “[t]he
Agreement shall be tacitly extended for successive periods of one year unless
either of the two Contracting Parties denounces it in writing three months prior
April 16, 2009
to its expiry,” and that even upon the Agreement’s expiry, its provisions would
“continue to apply to any projects agreed upon x x x until their completion.”
On 10 December 1999, the Philippine government, through then Foreign
Affairs Secretary Domingo Siazon, and the German government, agreed to an
Arrangement in furtherance of the 1971 Agreement. This Arrangement affirmed
the common commitment of both governments to promote jointly a project
called, Social Health Insurance—Networking and Empowerment (SHINE),
which was designed to “enable Philippine families–especially poor ones–to
maintain their health and secure health care of sustainable quality.” It appears
that SHINE had already been in existence even prior to the effectivity of the
Arrangement, though the record does not indicate when exactly SHINE was
constituted. Nonetheless, the Arrangement stated the various obligations of the
Filipino and German governments. The relevant provisions of the Arrangement
are reproduced as follows:
- five local experts in health economy, health insurance, community health
systems, information technology, information systems, training and community
mobilization for a total of up to 240 expert/months,
3. The Government of the Federal Republic of Germany shall make
the following contributions to the project.

- local and auxiliary personnel for a total of up to 120 months;

It shall

(c) supply inputs, in particular

(a) second

- two cross-country vehicles,

- one expert in health economy, insurance and health systems for up to

48 expert/months,
- ten computers with accessories,

- one expert in system development for up to 10 expert/months

- office furnishings and equipment

- short-term experts to deal with special tasks for a total of up to 18

expert/months, up to a total value of DM 310,000 (three hundred and ten thousand Deutsche
Mark);

- project assistants/guest students as required, who shall work on the

project as part of their basic and further training and assume specific project (c) meet
tasks under the separately financed junior staff promotion programme of the
Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ);
- the cost of accommodation for the seconded experts and their families in
so far as this cost is not met by the seconded experts themselves,
(b) provide in situ

- the cost of official travel by the experts referred to in sub-paragraph (a)

- short-term experts to deal with diverse special tasks for a total of up to above within and outside the Republic of the Philippines,
27 expert/months,

- the cost of seminars and courses,
- the cost of transport and insurance to the project site of inputs to be
supplied pursuant to sub-paragraph (c) above, excluding the charges and
storage fees referred to in paragraph 4(d) below,
- a proportion of the operating and administrative costs;
xxx
4. The Government of the Republic of the Philippines shall make the
following contributions to the project:
It shall
(a) – provide the necessary Philippine experts for the project, in
particular one project coordinator in the Philippine Health Insurance
Corporation (Philhealth), at least three further experts and a sufficient number
of administrative and auxiliary personnel, as well as health personnel in the
pilot provinces and in the other project partners, in particular one responsible
expert for each pilot province and for each association representing the various
target groups,
- release suitably qualified experts from their duties for attendance at
the envisaged basic and further training activities; it shall only nominate such
candidates as have given an undertaking to work on the project for at least five
years after completing their training and shall ensure that these Philippine
experts receive appropriate remuneration,
- ensure that the project field offices have sufficient expendables,
- make available the land and buildings required for the project;
(b) assume an increasing proportion of the running and operating costs
of the project;
(c) afford the seconded experts any assistance they may require in
carrying out the tasks assigned to them and place at their disposal all
necessary records and documents;
(d) guarantee that
- the project is provided with an itemized budget of its own in order to
ensure smooth continuation of the project.
- the necessary legal and administrative framework is created for the
project,
- the project is coordinated in close cooperation with other national and
international agencies relevant to implementation,
- the inputs supplied for the project on behalf of the Government of the
Federal Republic of Germany are exempted from the cost of licenses, harbour
dues, import and export duties and other public charges and fees, as well as
storage fees, or that any costs thereof are met, and that they are cleared by
customs without delay. The aforementioned exemptions shall, at the request of
the implementing agencies also apply to inputs procured in the Republic of the
Philippines,
- the tasks of the seconded experts are taken over as soon as possible
by Philippine experts,

- examinations passed by Philippine nationals pursuant to this
Arrangement are recognized in accordance with their respective standards and
that the persons concerned are afforded such opportunities with regard to
careers, appointments and advancement as are commensurate with their
training.
In the arraignment, both governments likewise named their respective
implementing organizations for SHINE. The Philippines designated the
Department of Health (DOH) and the Philippine Health Insurance Corporation
(Philhealth) with the implementation of SHINE. For their part, the German
government “charge[d] the Deustche Gesellschaft für Technische
Zusammenarbeit[] (GTZ[]) GmbH, Eschborn, with the implementation of its
contributions.”
Private respondents were engaged as contract employees hired by GTZ to
work for SHINE on various dates between December of 1998 to September of
1999. Bernadette Carmela Magtaas was hired as an “information systems
manager and project officer of SHINE;” Carolina Dionco as a “Project Assistant
of SHINE;” Christopher Ramos as “a project assistant and liason personnel of
NHI related SHINE activities by GTZ;” Melvin Dela Paz and Randy Tamayo as
programmers; and Edgardo Ramilo as “driver, messenger and multipurpose
service man.” The employment contracts of all six private respondents all
specified Dr. Rainer Tollkotter, identified as an adviser of GTZ, as the
“employer.” At the same time, all the contracts commonly provided that “[i]t is
mutually agreed and understood that [Dr. Tollkotter, as employer] is a
seconded GTZ expert who is hiring the Employee on behalf of GTZ and for a
Philippine-German bilateral project named ‘Social Health Insurance—
Networking and Empowerment (SHINE)’ which will end at a given time.”
In September of 1999, Anne Nicolay (Nicolay), a Belgian national,
assumed the post of SHINE Project Manager. Disagreements eventually arose
between Nicolay and private respondents in matters such as proposed salary
adjustments, and the course Nicolay was taking in the implementation of
SHINE different from her predecessors. The dispute culminated in a letter
dated 8 June 2000, signed by the private respondents, addressed to Nicolay,
and copies furnished officials of the DOH, Philheath, and the director of the
Manila office of GTZ. The letter raised several issues which private
respondents claim had been brought up several times in the past, but have not
been given appropriate response. It was claimed that SHINE under Nicolay had
veered away from its original purpose to facilitate the development of social
health insurance by shoring up the national health insurance program and
strengthening local initiatives, as Nicolay had refused to support local partners
and new initiatives on the premise that community and local government unit
schemes were not sustainable—a philosophy that supposedly betrayed
Nicolay’s lack of understanding of the purpose of the project. Private
respondents further alleged that as a result of Nicolay’s “new thrust, resources
have been used inappropriately;” that the new management style was “not
congruent with the original goals of the project;” that Nicolay herself suffered
from “cultural insensitivity” that consequently failed to sustain healthy relations
with SHINE’s partners and staff.
The letter ended with these ominous words:
The issues that we [the private respondents] have stated here are very crucial
to us in working for the project. We could no longer find any reason to stay with
the project unless ALL of these issues be addressed immediately and
appropriately.
In response, Nicolay wrote each of the private respondents a letter dated
21 June 2000, all similarly worded except for their respective addressees. She
informed private respondents that the “project’s orientations and evolution”
were decided in consensus with partner institutions, Philhealth and the DOH,
and thus no longer subject to modifications. More pertinently, she stated:
You have firmly and unequivocally stated in the last paragraph of your 8 th June corporation which entered into an employment contract; and that GTZ had
2000 letter that you and the five other staff “could no longer find any reason to failed to secure from the DFA a certification as to its diplomatic status.
stay with the project unless ALL of these issues be addressed immediately and
appropriately.” Under the foregoing premises and circumstances, it is now
imperative that I am to accept your resignation, which I expect to receive as
soon as possible.

On 7 February 2001, GTZ filed with the Labor Arbiter a “Reiterating

Taken aback, private respondents replied with a common letter,
Motion to Dismiss,” again praying that the Motion to Dismiss be granted on the
clarifying that their earlier letter was not intended as a resignation letter, but one
jurisdictional ground, and reprising the arguments for dismissal it had earlier
that merely intended to raise attention to what they perceived as vital issues.
raised. No action was taken by the Labor Arbiter on this new motion. Instead,
Negotiations ensued between private respondents and Nicolay, but for naught.
on 15 October 2001, the Labor Arbiter rendered a Decision granting the
Each of the private respondents received a letter from Nicolay dated 11 July
complaint for illegal dismissal. The Decision concluded that respondents were
2000, informing them of the pre-termination of their contracts of employment on
dismissed without lawful cause, there being “a total lack of due process both
the grounds of “serious and gross insubordination, among others, resulting to
substantive and procedural [sic].” GTZ was faulted for failing to observe the
loss of confidence and trust.”
notice requirements in the labor law. The Decision likewise proceeded from the
premise that GTZ had treated the letter dated 8 June 2000 as a resignation
letter, and devoted some focus in debunking this theory.
On 21 August 2000, the private respondents filed a complaint for illegal
dismissal with the NLRC. Named as respondents therein where GTZ, the
Director of its Manila office Hans Peter Paulenz, its Assistant Project Manager
The Decision initially offered that it “need not discuss the jurisdictional
Christian Jahn, and Nicolay.
aspect considering that the same had already been lengthily discussed in the
Order de[n]ying respondents’ Motion to Dismiss.” Nonetheless, it proceeded to
discuss the jurisdictional aspect, in this wise:
On 25 October 2005, GTZ, through counsel, filed a Motion to Dismiss, on
the ground that the Labor Arbiter had no jurisdiction over the case, as its acts
were undertaken in the discharge of the governmental functions and sovereign
acts of the Government of the Federal Republic of Germany. This was opposed
by private respondents with the arguments that GTZ had failed to secure a
certification that it was immune from suit from the Department of Foreign
Affairs, and that it was GTZ and not the German government which had
implemented the SHINE Project and entered into the contracts of employment.

On 27 November 2000, the Labor Arbiter issued an Order denying the

Motion to Dismiss. The Order cited, among others, that GTZ was a private Under pain of being repetitious, the undersigned Labor Arbiter has jurisdiction
to entertain the complaint on the following grounds:

Firstly, under the employment contract entered into between complainants and
respondents, specifically Section 10 thereof, it provides that “contract partners
agree that his contract shall be subject to the LAWS of the jurisdiction of the
locality in which the service is performed.”
Secondly, respondent having entered into contract, they can no longer invoke
the sovereignty of the Federal Republic of Germany.
Lastly, it is imperative to be immune from suit, respondents should have
secured from the Department of Foreign Affairs a certification of respondents’
diplomatic status and entitlement to diplomatic privileges including immunity
from suits. Having failed in this regard, respondents cannot escape liability from
the shelter of sovereign immunity.[sic]
Notably, GTZ did not file a motion for reconsideration to the Labor
Arbiter’s Decision or elevate said decision for appeal to the NLRC. Instead,
GTZ opted to assail the decision by way of a special civil action for certiorari
filed with the Court of Appeals. On 10 December 2001, the Court of Appeals
promulgated a Resolution dismissing GTZ’s petition, finding that “judicial
recourse at this stage of the case is uncalled for[,] [t]he appropriate remedy of
the petitioners [being] an appeal to the NLRC x x x.” A motion for
reconsideration to this Resolution proved fruitless for GTZ.
Thus, the present petition for review under Rule 45, assailing the
decision and resolutions of the Court of Appeals and of the Labor Arbiter.
GTZ’s arguments center on whether the Court of Appeals could have
entertained its petition for certiorari despite its not having undertaken an appeal
before the NLRC; and whether the complaint for illegal dismissal should have
been dismissed for lack of jurisdiction on account of GTZ’s insistence that it
enjoys immunity from suit. No special arguments are directed with respect to
petitioners Hans Peter Paulenz and Anne Nicolay, respectively the then
Director and the then Project Manager of GTZ in the Philippines; so we have to
presume that the arguments raised in behalf of GTZ’s alleged immunity from
suit extend to them as well.
The Court required the Office of the Solicitor General (OSG) to file a Comment
on the petition. In its Comment dated 7 November 2005, the OSG took the side
of GTZ, with the prayer that the petition be granted on the ground that GTZ was
immune from suit, citing in particular its assigned functions in implementing the
SHINE program—a joint undertaking of the Philippine and German
governments which was neither proprietary nor commercial in nature.
The Court of Appeals had premised the dismissal of GTZ’s petition on its
procedural misstep in bypassing an appeal to NLRC and challenging the Labor
Arbiter’s Decision directly with the appellate court by way of a Rule 65
petition. In dismissing the petition, the Court of Appeals relied on our ruling in
Air Service Cooperative v. Court of Appeals. The central issue in that case was
whether a decision of a Labor Arbiter rendered without jurisdiction over the
subject matter may be annulled in a petition before a Regional Trial Court. That
case may be differentiated from the present case, since the Regional Trial
Court does not have original or appellate jurisdiction to review a decision
rendered by a Labor Arbiter. In contrast, there is no doubt, as affirmed by
jurisprudence, that the Court of Appeals has jurisdiction to review, by way of its
original certiorari jurisdiction, decisions ruling on complaints for illegal dismissal.
Nonetheless, the Court of Appeals is correct in pronouncing the general rule
that the proper recourse from the decision of the Labor Arbiter is to first appeal
the same to the NLRC. Air Services is in fact clearly detrimental to petitioner’s
position in one regard. The Court therein noted that on account of the failure to
correctly appeal the decision of the Labor Arbiter to the NLRC, such judgment
consequently became final and executory. GTZ goes as far as to “request” that
the Court re-examine Air Services, a suggestion that is needlessly improvident
under the circumstances. Air Services affirms doctrines grounded in sound
procedural rules that have allowed for the considered and orderly disposition of
labor cases.
 The OSG points out, citing Heirs of Mayor Nemencio Galvez v. Court of
Appeals, that even when appeal is available, the Court has nonetheless
allowed a writ of certiorari when the orders of the lower court were issued either
in excess of or without jurisdiction. Indeed, the Court has ruled before that the
failure to employ available intermediate recourses, such as a motion for
reconsideration, is not a fatal infirmity if the ruling assailed is a patent nullity.
This approach suggested by the OSG allows the Court to inquire directly into
what is the main issue–whether GTZ enjoys immunity from suit.
The arguments raised by GTZ and the OSG are rooted in several indisputable
facts. The SHINE project was implemented pursuant to the bilateral
agreements between the Philippine and German governments. GTZ was
tasked, under the 1991 agreement, with the implementation of the contributions
of the German government. The activities performed by GTZ pertaining to the
SHINE project are governmental in nature, related as they are to the promotion
of health insurance in the Philippines. The fact that GTZ entered into
employment contracts with the private respondents did not disqualify it from
invoking immunity from suit, as held in cases such as Holy See v. Rosario, Jr.,
which set forth what remains valid doctrine:
Certainly, the mere entering into a contract by a foreign state with a private
party cannot be the ultimate test. Such an act can only be the start of the
inquiry. The logical question is whether the foreign state is engaged in the
activity in the regular course of business. If the foreign state is not engaged
regularly in a business or trade, the particular act or transaction must then be
tested by its nature. If the act is in pursuit of a sovereign activity, or an incident
thereof, then it is an act jure imperii, especially when it is not undertaken for
gain or profit.
Beyond dispute is the tenability of the comment points raised by GTZ and the
OSG that GTZ was not performing proprietary functions notwithstanding its
entry into the particular employment contracts. Yet there is an equally
fundamental premise which GTZ and the OSG fail to address, namely: Is GTZ,
by conception, able to enjoy the Federal Republic’s immunity from suit?
The principle of state immunity from suit, whether a local state or a foreign
state, is reflected in Section 9, Article XVI of the Constitution, which states that
“the State may not be sued without its consent.” Who or what consists of “the
State”? For one, the doctrine is available to foreign States insofar as they are
sought to be sued in the courts of the local State, necessary as it is to avoid
“unduly vexing the peace of nations.”
If the instant suit had been brought directly against the Federal Republic of
Germany, there would be no doubt that it is a suit brought against a State, and
the only necessary inquiry is whether said State had consented to be sued.
However, the present suit was brought against GTZ. It is necessary for us to
understand what precisely are the parameters of the legal personality of GTZ.
Counsel for GTZ characterizes GTZ as “the implementing agency of the
Government of the Federal Republic of Germany,” a depiction similarly adopted
by the OSG. Assuming that characterization is correct, it does not automatically
invest GTZ with the ability to invoke State immunity from suit. The distinction
lies in whether the agency is incorporated or unincorporated. The following
lucid discussion from Justice Isagani Cruz is pertinent:
Where suit is filed not against the government itself or its officials but against
one of its entities, it must be ascertained whether or not the State, as the
principal that may ultimately be held liable, has given its consent to be sued.
This ascertainment will depend in the first instance on whether the
government agency impleaded is incorporated or unincorporated.
An incorporated agency has a charter of its own that invests it with a
separate juridical personality, like the Social Security System, the University
of the Philippines, and the City of Manila. By contrast, the unincorporated
agency is so called because it has no separate juridical personality but is
merged in the general machinery of the government, like the Department of
Justice, the Bureau of Mines and the Government Printing Office.
If the agency is incorporated, the test of its suability is found in its
charter. The simple rule is that it is suable if its charter says so, and this
is true regardless of the functions it is performing. Municipal
corporations, for example, like provinces and cities, are agencies of the
State when they are engaged in governmental functions and therefore
should enjoy the sovereign immunity from suit. Nevertheless, they are
subject to suit even in the performance of such functions because their
charter provides that they can sue and be sued.
State immunity from suit may be waived by general or special law. The
special law can take the form of the original charter of the incorporated
government agency. Jurisprudence is replete with examples of incorporated
government agencies which were ruled not entitled to invoke immunity from
suit, owing to provisions in their
charters manifesting their consent to be sued. These include the National
Irrigation Administration, the former Central Bank, and the National Power
Corporation. In SSS v. Court of Appeals, the Court through Justice Melencio-
Herrera explained that by virtue of an express provision in its charter allowing it
to sue and be sued, the Social Security System did not enjoy immunity from
suit:
We come now to the amendability of the SSS to judicial action and legal
responsibility for its acts. To our minds, there should be no question on this
score considering that the SSS is a juridical entity with a personality of its own.
It has corporate powers separate and distinct from the Government. SSS' own
organic act specifically provides that it can sue and be sued in Court. These
words "sue and be sued" embrace all civil process incident to a legal action. So
that, even assuming that the SSS, as it claims, enjoys immunity from suit as an
entity performing governmental functions, by virtue of the explicit provision of
the aforecited enabling law, the Government must be deemed to have waived
immunity in respect of the SSS, although it does not thereby concede its
liability. That statutory law has given to the private citizen a remedy for the
enforcement and protection of his rights. The SSS thereby has been required to
submit to the jurisdiction of the Courts, subject to its right to interpose any
lawful defense. Whether the SSS performs governmental or proprietary
functions thus becomes unnecessary to belabor. For by that waiver, a private
citizen may bring a suit against it for varied objectives, such as, in this case, to
obtain compensation in damages arising from contract, and even for tort.
A recent case squarely in point anent the principle, involving the National
Power Corporation, is that of Rayo v. Court of First Instance of Bulacan, 110
SCRA 457 (1981), wherein this Court, speaking through Mr. Justice Vicente
Abad Santos, ruled:
"It is not necessary to write an extended dissertation on whether or not the NPC
performs a governmental function with respect to the management and
operation of the Angat Dam. It is sufficient to say that the government has
organized a private corporation, put money in it and has allowed it to sue and
be sued in any court under its charter. (R.A. No. 6395, Sec. 3[d]). As a
government, owned and controlled corporation, it has a personality of its own,
distinct and separate from that of the Government. Moreover, the charter
provision that the NPC can 'sue and be sued in any court' is without
qualification on the cause of action and accordingly it can include a tort claim
such as the one instituted by the petitioners."
It is useful to note that on the part of the Philippine government, it had
designated two entities, the Department of Health and the Philippine Health
Insurance Corporation (PHIC), as the implementing agencies in behalf of the
Philippines. The PHIC was established under Republic Act No. 7875, Section
16(g) of which grants the corporation the power “to sue and be sued in court.”
Applying the previously cited jurisprudence, PHIC would not enjoy immunity
from suit even in the performance of its functions connected with SHINE,
however, governmental in nature as they may be.
Is GTZ an incorporated agency of the German government? There is
some mystery surrounding that question. Neither GTZ nor the OSG go beyond
the claim that petitioner is “the implementing agency of the Government of the
Federal Republic of Germany.” On the other hand, private respondents
asserted before the Labor Arbiter that GTZ was “a private corporation engaged
in the implementation of development projects.” The Labor Arbiter accepted
that claim in his Order denying the Motion to Dismiss, though he was silent on
that point in his Decision. Nevertheless, private respondents argue in their
Comment that the finding that GTZ was a private corporation “was never
controverted, and is therefore deemed admitted.” In its Reply, GTZ controverts
that finding, saying that it is a matter of public knowledge that the status of
petitioner GTZ is that of the “implementing agency,” and not that of a private
corporation.
In truth, private respondents were unable to adduce any evidence to
substantiate their claim that GTZ was a “private corporation,” and the Labor
Arbiter acted rashly in accepting such claim without explanation. But neither
has GTZ supplied any evidence defining its legal nature beyond that of the bare
descriptive “implementing agency.” There is no doubt that the 1991 Agreement
designated GTZ as the “implementing agency” in behalf of the German
government. Yet the catch is that such term has no precise definition that is
responsive to our concerns. Inherently, an agent acts in behalf of a principal,
and the GTZ can be said to act in behalf of the German state. But that is as far
as “implementing agency” could take us. The term by itself does not supply
whether GTZ is incorporated or unincorporated, whether it is owned by the
German state or by private interests, whether it has juridical personality
independent of the German government or none at all.
GTZ itself provides a more helpful clue, inadvertently, through its own
official Internet website. In the “Corporate Profile” section of the English
language version of its site, GTZ describes itself as follows:
As an international cooperation enterprise for sustainable development with
worldwide operations, the federally owned Deutsche Gesellschaft für
Technische Zusammenarbeit (GTZ) GmbH supports the German Government
in achieving its development-policy objectives. It provides viable, forward-
looking solutions for political, economic, ecological and social development in a
globalised world. Working under difficult conditions, GTZ promotes complex
reforms and change processes. Its corporate objective is to improve people’s
living conditions on a sustainable basis.
GTZ is a federal enterprise based in Eschborn near Frankfurt am Main. It was
founded in 1975 as a company under private law. The German Federal Ministry
for Economic Cooperation and Development (BMZ) is its major client. The
company also operates on behalf of other German ministries, the governments
of other countries and international clients, such as the European Commission,
the United Nations and the World Bank, as well as on behalf of private
enterprises. GTZ works on a public-benefit basis. All surpluses generated are
channeled [sic] back into its own international cooperation projects for
sustainable development.
GTZ’s own website elicits that petitioner is “federally owned,” a “federal
enterprise,” and “founded in 1975 as a company under private law.” GTZ clearly
has a very meaningful relationship with the Federal Republic of Germany,
which apparently owns it. At the same time, it appears that GTZ was actually
organized not through a legislative public charter, but under private law, in the
same way that Philippine corporations can be organized under the Corporation
Code even if fully owned by the Philippine government.
This self-description of GTZ in its own official website gives further cause
for pause in adopting petitioners’ argument that GTZ is entitled to immunity
from suit because it is “an implementing agency.” The above-quoted statement
does not dispute the characterization of GTZ as an “implementing agency of
the Federal Republic of Germany,” yet it bolsters the notion that as a company
organized under private law, it has a legal personality independent of that of the
Federal Republic of Germany.
The Federal Republic of Germany, in its own official website, also makes
reference to GTZ and describes it in this manner:
x x x Going by the principle of “sustainable development,” the German
Technical Cooperation (Deutsche Gesellschaft für Technische Zusammenarbeit
GmbH, GTZ) takes on non-profit projects in international “technical
cooperation.” The GTZ is a private company owned by the Federal
Republic of Germany.

Again, we are uncertain of the corresponding legal implications under
German law surrounding “a private company owned by the Federal Republic of
Germany.” Yet taking the description on face value, the apparent equivalent
under Philippine law is that of a corporation organized under the Corporation
Code but owned by the Philippine government, or a government-owned or
controlled corporation without original charter. And it bears notice that Section
36 of the Corporate Code states that “[e]very corporation incorporated under
this Code has the power and capacity x x x to sue and be sued in its corporate
name.”
It is entirely possible that under German law, an entity such as GTZ or
particularly GTZ itself has not been vested or has been specifically deprived the
power and capacity to sue and/or be sued. Yet in the proceedings below and
before this Court, GTZ has failed to establish that under German law, it has not
consented to be sued despite it being owned by the Federal Republic of
Germany. We adhere to the rule that in the absence of evidence to the
contrary,
foreign laws on a particular subject are presumed to be the same as those of
the Philippines, and following the most intelligent assumption we can gather,
GTZ is akin to a governmental owned or controlled corporation without original
charter which, by virtue of the Corporation Code, has expressly consented to
be sued. At the very least, like the Labor Arbiter and the Court of Appeals, this
Court has no basis in fact to conclude or presume that GTZ enjoys immunity
from suit.
This absence of basis in fact leads to another important point, alluded to
by the Labor Arbiter in his rulings. Our ruling in Holy See v. Del Rosario
provided a template on how a foreign entity desiring to invoke State immunity
from suit could duly prove such immunity before our local courts. The principles
enunciated in that case were derived from public international law. We stated
then:
In Public International Law, when a state or international agency wishes to
plead sovereign or diplomatic immunity in a foreign court, it requests the
Foreign Office of the state where it is sued to convey to the court that said
defendant is entitled to immunity.
In the United States, the procedure followed is the process of "suggestion,"
where the foreign state or the international organization sued in an American
court requests the Secretary of State to make a determination as to whether it
is entitled to immunity. If the Secretary of State finds that the defendant is
immune from suit, he, in turn, asks the Attorney General to submit to the court a
"suggestion" that the defendant is entitled to immunity. In England, a similar
procedure is followed, only the Foreign Office issues a certification to that effect
instead of submitting a "suggestion" (O'Connell, I International Law 130 [1965];
Note: Immunity from Suit of Foreign Sovereign Instrumentalities and
Obligations, 50 Yale Law Journal 1088 [1941]).
In the Philippines, the practice is for the foreign government or the international
organization to first secure an executive endorsement of its claim of sovereign
or diplomatic immunity. But how the Philippine Foreign Office conveys its
endorsement to the courts varies. In International Catholic Migration
Commission v. Calleja, 190 SCRA 130 (1990), the Secretary of Foreign Affairs
just sent a letter directly to the Secretary of Labor and Employment, informing
the latter that the respondent-employer could not be sued because it enjoyed
diplomatic immunity. In World Health Organization v. Aquino, 48 SCRA 242
(1972), the Secretary of Foreign Affairs sent the trial court a telegram to that
effect. In Baer v. Tizon, 57 SCRA 1 (1974), the U.S. Embassy asked the
Secretary of Foreign Affairs to request the Solicitor General to make, in behalf
of the Commander of the United States Naval Base at Olongapo City,
Zambales, a "suggestion" to respondent Judge. The Solicitor General
embodied the "suggestion" in a Manifestation and Memorandum as amicus
curiae.
It is to be recalled that the Labor Arbiter, in both of his rulings, noted that
it was imperative for petitioners to secure from the Department of Foreign
Affairs “a certification of respondents’ diplomatic status and entitlement to enough of the endorsement by the Foreign Office. We do not find a similar
diplomatic privileges including immunity from suits.” The requirement might not circumstance that bears here.
necessarily be imperative. However, had GTZ obtained such certification from
the DFA, it would have provided factual basis for its claim of immunity that
would, at the very least, establish a disputable evidentiary presumption that the
The Court is thus holds and so rules that GTZ consistently has been
foreign party is indeed immune which the opposing party will have to overcome
unable to establish with satisfaction that it enjoys the immunity from suit
with its own factual evidence. We do not see why GTZ could not have secured
generally enjoyed by its parent country, the Federal Republic of Germany.
such certification or endorsement from the DFA for purposes of this case.
Consequently, both the Labor Arbiter and the Court of Appeals acted within
Certainly, it would have been highly prudential for GTZ to obtain the same after
proper bounds when they refused to acknowledge that GTZ is so immune by
the Labor Arbiter had denied the motion to dismiss. Still, even at this juncture,
dismissing the complaint against it. Our finding has additional ramifications on
we do not see any evidence that the DFA, the office of the executive branch in
the failure of GTZ to properly appeal the Labor Arbiter’s decision to the NLRC.
charge of our diplomatic relations, has indeed endorsed GTZ’s claim of
As pointed out by the OSG, the direct recourse to the Court of Appeals while
immunity. It may be possible that GTZ tried, but failed to secure such
bypassing the NLRC could have been sanctioned had the Labor Arbiter’s
certification, due to the same concerns that we have discussed herein.
decision been a “patent nullity.” Since the Labor Arbiter acted properly in
deciding the complaint, notwithstanding GTZ’s claim of immunity, we cannot
see how the decision could have translated into a “patent nullity.”
Would the fact that the Solicitor General has endorsed GTZ’s claim of
State’s immunity from suit before this Court sufficiently substitute for the DFA
certification? Note that the rule in public international law quoted in Holy See
As a result, there was no basis for petitioners in foregoing the appeal to
referred to endorsement by the Foreign Office of the State where the suit is
the NLRC by filing directly with the Court of Appeals the petition for certiorari. It
filed, such foreign office in the Philippines being the Department of Foreign
then follows that the Court of Appeals acted correctly in dismissing the petition
Affairs. Nowhere in the Comment of the OSG is it manifested that the DFA has
on that ground. As a further consequence, since petitioners failed to perfect an
endorsed GTZ’s claim, or that the OSG had solicited the DFA’s views on the
appeal from the Labor Arbiter’s Decision, the same has long become final and
issue. The arguments raised by the OSG are virtually the same as the
executory. All other questions related to this case, such as whether or not
arguments raised by GTZ without any indication of any special and distinct
private respondents were illegally dismissed, are no longer susceptible to
perspective maintained by the Philippine government on the issue. The
review, respecting as we do the finality of the Labor Arbiter’s Decision.
Comment filed by the OSG does not inspire the same degree of confidence as
a certification from the DFA would have elicited.

A final note. This decision should not be seen as deviation from the more
common methodology employed in ascertaining whether a party enjoys State
Holy See made reference to Baer v. Tizon, and that in the said case, the
immunity from suit, one which focuses on the particular functions exercised by
United States Embassy asked the Secretary of Foreign Affairs to request the
the party and determines whether these are proprietary or sovereign in nature.
Solicitor General to make a “suggestion” to the trial court, accomplished by way
The nature of the acts performed by the entity invoking immunity remains the
of a Manifestation and Memorandum, that the petitioner therein enjoyed
most important barometer for testing whether the privilege of State immunity
immunity as the Commander of the Subic Bay Naval Base. Such circumstance
from suit should apply. At the same time, our Constitution stipulates that a State
is actually not narrated in the text of Baer itself and was likely supplied in Holy
immunity from suit is conditional on its withholding of consent; hence, the laws
See because its author, Justice Camilio Quiason, had appeared as the Solicitor
and circumstances pertaining to the creation and legal personality of an
in behalf of the OSG in Baer. Nonetheless, as narrated in Holy See, it was the
instrumentality or agency invoking immunity remain relevant. Consent to be
Secretary of Foreign Affairs which directed the OSG to intervene in behalf of
the United States government in the Baer case, and such fact is manifest
sued, as exhibited in this decision, is often conferred by the very same statute
or general law creating the instrumentality or agency.

WHEREFORE, the petition is DENIED. No pronouncement as to costs.

SO ORDERED.
G.R. No. 169777* April 20, 2006 ALTERNATIVE LAW GROUPS, INC. (ALG), Petitioner,
vs.
SENATE OF THE PHILIPPINES, represented by FRANKLIN M. DRILON, in HON. EDUARDO R. ERMITA, in his capacity as Executive Secretary,
his capacity as Senate President, JUAN M. FLAVIER, in his capacity as Respondent.
Senate President Pro Tempore, FRANCIS N. PANGILINAN, in his capacity
as Majority Leader, AQUILINO Q. PIMENTEL, JR., in his capacity as x-------------------------x
Minority Leader, SENATORS RODOLFO G. BIAZON, "COMPANERA" PIA
S. CAYETANO, JINGGOY EJERCITO ESTRADA, LUISA "LOI" EJERCITO G.R. No. 169834 April 20, 2006
ESTRADA, JUAN PONCE ENRILE, RICHARD J. GORDON, PANFILO M.
PDP- LABAN, Petitioner,
LACSON, ALFREDO S.LIM, M. A. MADRIGAL, SERGIO OSMENA III,
vs.
RALPH G. RECTO, and MAR ROXAS, Petitioners,
EXECUTIVE SECRETARY EDUARDO R. ERMITA, Respondent.
vs.
EDUARDO R. ERMITA, in his capacity as Executive Secretary and alter- x-------------------------x
ego of President Gloria Macapagal-Arroyo, and anyone acting in his stead
and in behalf of the President of the Philippines, Respondents. G.R. No. 171246 April 20, 2006

x-------------------------x JOSE ANSELMO I. CADIZ, FELICIANO M. BAUTISTA, ROMULO R.

RIVERA, JOSE AMOR AMORANDO, ALICIA A. RISOS-VIDAL, FILEMON C.
G.R. No. 169659 April 20, 2006 ABELITA III, MANUEL P. LEGASPI, J. B. JOVY C. BERNABE, BERNARD L.
DAGCUTA, ROGELIO V. GARCIA, and the INTEGRATED BAR FOR THE
BAYAN MUNA represented by DR. REYNALDO LESACA, JR., Rep. SATUR
PHILIPPINES, Petitioners,
OCAMPO, Rep. CRISPIN BELTRAN, Rep. RAFAEL MARIANO, Rep. LIZA
vs.
MAZA, Rep. TEODORO CASINO, Rep. JOEL VIRADOR, COURAGE
HON. EXECUTIVE SECRETARY EDUARDO R. ERMITA, Respondent.
represented by FERDINAND GAITE, and COUNSELS FOR THE DEFENSE
OF LIBERTIES (CODAL) represented by ATTY. REMEDIOS BALBIN, DECISION
Petitioners,
vs. CARPIO MORALES, J.:
EDUARDO ERMITA, in his capacity as Executive Secretary and alter-ego
of President Gloria Macapagal-Arroyo, Respondent. A transparent government is one of the hallmarks of a truly republican state.
Even in the early history of republican thought, however, it has been recognized
x-------------------------x that the head of government may keep certain information confidential in
pursuit of the public interest. Explaining the reason for vesting executive power
G.R. No. 169660 April 20, 2006 in only one magistrate, a distinguished delegate to the U.S. Constitutional
Convention said: "Decision, activity, secrecy, and dispatch will generally
FRANCISCO I. CHAVEZ, Petitioner,
characterize the proceedings of one man, in a much more eminent degree than
vs.
the proceedings of any greater number; and in proportion as the number is
EDUARDO R. ERMITA, in his capacity as Executive Secretary, AVELINO J.
increased, these qualities will be diminished."1
CRUZ, JR., in his capacity as Secretary of Defense, and GENEROSO S.
SENGA, in his capacity as AFP Chief of Staff, Respondents. History has been witness, however, to the fact that the power to withhold
information lends itself to abuse, hence, the necessity to guard it zealously.
x-------------------------x

G.R. No. 169667 April 20, 2006

The present consolidated petitions for certiorari and prohibition proffer that the
President has abused such power by issuing Executive Order No. 464 (E.O.
464) last September 28, 2005. They thus pray for its declaration as null and
void for being unconstitutional.
In resolving the controversy, this Court shall proceed with the recognition that
the issuance under review has come from a co-equal branch of government,
which thus entitles it to a strong presumption of constitutionality. Once the
challenged order is found to be indeed violative of the Constitution, it is duty-
bound to declare it so. For the Constitution, being the highest expression of the
sovereign will of the Filipino people, must prevail over any issuance of the
government that contravenes its mandates.
In the exercise of its legislative power, the Senate of the Philippines, through its
various Senate Committees, conducts inquiries or investigations in aid of
legislation which call for, inter alia, the attendance of officials and employees of
the executive department, bureaus, and offices including those employed in
Government Owned and Controlled Corporations, the Armed Forces of the
Philippines (AFP), and the Philippine National Police (PNP).
On September 21 to 23, 2005, the Committee of the Senate as a whole issued
invitations to various officials of the Executive Department for them to appear
on September 29, 2005 as resource speakers in a public hearing on the railway
project of the North Luzon Railways Corporation with the China National
Machinery and Equipment Group (hereinafter North Rail Project). The public
hearing was sparked by a privilege speech of Senator Juan Ponce Enrile urging
the Senate to investigate the alleged overpricing and other unlawful provisions
of the contract covering the North Rail Project.
The Senate Committee on National Defense and Security likewise issued
invitations2 dated September 22, 2005 to the following officials of the AFP: the
Commanding General of the Philippine Army, Lt. Gen. Hermogenes C.
Esperon; Inspector General of the AFP Vice Admiral Mateo M. Mayuga; Deputy
Chief of Staff for Intelligence of the AFP Rear Admiral Tirso R. Danga; Chief of
the Intelligence Service of the AFP Brig. Gen. Marlu Q. Quevedo; Assistant
Superintendent of the Philippine Military Academy (PMA) Brig. Gen. Francisco
V. Gudani; and Assistant Commandant, Corps of Cadets of the PMA, Col.
Alexander F. Balutan, for them to attend as resource persons in a public
hearing scheduled on September 28, 2005 on the following: (1) Privilege
Speech of Senator Aquilino Q. Pimentel Jr., delivered on June 6, 2005 entitled
"Bunye has Provided Smoking Gun or has Opened a Can of Worms that Show
Massive Electoral Fraud in the Presidential Election of May 2005"; (2) Privilege
Speech of Senator Jinggoy E. Estrada delivered on July 26, 2005 entitled "The
Philippines as the Wire-Tapping Capital of the World"; (3) Privilege Speech of
Senator Rodolfo Biazon delivered on August 1, 2005 entitled "Clear and
Present Danger"; (4) Senate Resolution No. 285 filed by Senator Maria Ana
Consuelo Madrigal – Resolution Directing the Committee on National Defense
and Security to Conduct an Inquiry, in Aid of Legislation, and in the National
Interest, on the Role of the Military in the So-called "Gloriagate Scandal"; and
(5) Senate Resolution No. 295 filed by Senator Biazon – Resolution Directing
the Committee on National Defense and Security to Conduct an Inquiry, in Aid
of Legislation, on the Wire-Tapping of the President of the Philippines.
Also invited to the above-said hearing scheduled on September 28 2005 was
the AFP Chief of Staff, General Generoso S. Senga who, by letter3 dated
September 27, 2005, requested for its postponement "due to a pressing
operational situation that demands [his utmost personal attention" while "some
of the invited AFP officers are currently attending to other urgent operational
matters."
On September 28, 2005, Senate President Franklin M. Drilon received from
Executive Secretary Eduardo R. Ermita a letter4 dated September 27, 2005
"respectfully request[ing] for the postponement of the hearing [regarding the
NorthRail project] to which various officials of the Executive Department have
been invited" in order to "afford said officials ample time and opportunity to
study and prepare for the various issues so that they may better enlighten the
Senate Committee on its investigation."
Senate President Drilon, however, wrote5 Executive Secretary Ermita that the
Senators "are unable to accede to [his request]" as it "was sent belatedly" and
"[a]ll preparations and arrangements as well as notices to all resource persons
were completed [the previous] week."
Senate President Drilon likewise received on September 28, 2005 a letter6 from
the President of the North Luzon Railways Corporation Jose L. Cortes, Jr.
requesting that the hearing on the NorthRail project be postponed or cancelled
until a copy of the report of the UP Law Center on the contract agreements
relative to the project had been secured.
On September 28, 2005, the President issued E.O. 464, "Ensuring Observance
of the Principle of Separation of Powers, Adherence to the Rule on Executive
Privilege and Respect for the Rights of Public Officials Appearing in Legislative
Inquiries in Aid of Legislation Under the Constitution, and For Other Purposes," 7
which, pursuant to Section 6 thereof, took effect immediately. The salient
provisions of the Order are as follows:
SECTION 1. Appearance by Heads of Departments Before Congress. – In
accordance with Article VI, Section 22 of the Constitution and to implement the
Constitutional provisions on the separation of powers between co-equal
branches of the government, all heads of departments of the Executive Branch
of the government shall secure the consent of the President prior to appearing
before either House of Congress.
When the security of the State or the public interest so requires and the
President so states in writing, the appearance shall only be conducted in
executive session.
SECTION. 2. Nature, Scope and Coverage of Executive Privilege. –
(a) Nature and Scope. - The rule of confidentiality based on executive privilege
is fundamental to the operation of government and rooted in the separation of
powers under the Constitution (Almonte vs. Vasquez, G.R. No. 95367, 23 May
1995). Further, Republic Act No. 6713 or the Code of Conduct and Ethical
Standards for Public Officials and Employees provides that Public Officials and
Employees shall not use or divulge confidential or classified information
officially known to them by reason of their office and not made available to the
public to prejudice the public interest.
Executive privilege covers all confidential or classified information between the
President and the public officers covered by this executive order, including:
Conversations and correspondence between the President and the public
official covered by this executive order (Almonte vs. Vasquez G.R. No. 95367,
23 May 1995; Chavez v. Public Estates Authority, G.R. No. 133250, 9 July
2002);
Military, diplomatic and other national security matters which in the interest of
national security should not be divulged (Almonte vs. Vasquez, G.R. No.
95367, 23 May 1995; Chavez v. Presidential Commission on Good
Government, G.R. No. 130716, 9 December 1998).
Information between inter-government agencies prior to the conclusion of
treaties and executive agreements (Chavez v. Presidential Commission on
Good Government, G.R. No. 130716, 9 December 1998);
Discussion in close-door Cabinet meetings (Chavez v. Presidential Commission
on Good Government, G.R. No. 130716, 9 December 1998);
Matters affecting national security and public order (Chavez v. Public Estates
Authority, G.R. No. 133250, 9 July 2002).
(b) Who are covered. – The following are covered by this executive order:
Senior officials of executive departments who in the judgment of the
department heads are covered by the executive privilege;
Generals and flag officers of the Armed Forces of the Philippines and such
other officers who in the judgment of the Chief of Staff are covered by the
executive privilege;
Philippine National Police (PNP) officers with rank of chief superintendent or
higher and such other officers who in the judgment of the Chief of the PNP are
covered by the executive privilege;
Senior national security officials who in the judgment of the National Security
Adviser are covered by the executive privilege; and
Such other officers as may be determined by the President.
SECTION 3. Appearance of Other Public Officials Before Congress. – All public
officials enumerated in Section 2 (b) hereof shall secure prior consent of the
President prior to appearing before either House of Congress to ensure the
observance of the principle of separation of powers, adherence to the rule on
executive privilege and respect for the rights of public officials appearing in
inquiries in aid of legislation. (Emphasis and underscoring supplied)
Also on September 28, 2005, Senate President Drilon received from Executive
Secretary Ermita a copy of E.O. 464, and another letter8 informing him "that
officials of the Executive Department invited to appear at the meeting
[regarding the NorthRail project] will not be able to attend the same without the
consent of the President, pursuant to [E.O. 464]" and that "said officials have
not secured the required consent from the President." On even date which was
also the scheduled date of the hearing on the alleged wiretapping, Gen. Senga
sent a letter9 to Senator Biazon, Chairperson of the Committee on National
Defense and Security, informing him "that per instruction of [President Arroyo],
thru the Secretary of National Defense, no officer of the [AFP] is authorized to
appear before any Senate or Congressional hearings without seeking a written
approval from the President" and "that no approval has been granted by the
President to any AFP officer to appear before the public hearing of the Senate
Committee on National Defense and Security scheduled [on] 28 September
2005."
Despite the communications received from Executive Secretary Ermita and
Gen. Senga, the investigation scheduled by the Committee on National
Defense and Security pushed through, with only Col. Balutan and Brig. Gen.
Gudani among all the AFP officials invited attending.
For defying President Arroyo’s order barring military personnel from testifying
before legislative inquiries without her approval, Brig. Gen. Gudani and Col.
Balutan were relieved from their military posts and were made to face court
martial proceedings.
As to the NorthRail project hearing scheduled on September 29, 2005,
Executive Secretary Ermita, citing E.O. 464, sent letter of regrets, in response
to the invitations sent to the following government officials: Light Railway
Transit Authority Administrator Melquiades Robles, Metro Rail Transit Authority
Administrator Roberto Lastimoso, Department of Justice (DOJ) Chief State
Counsel Ricardo V. Perez, then Presidential Legal Counsel Merceditas
Gutierrez, Department of Transportation and Communication (DOTC)
Undersecretary Guiling Mamonding, DOTC Secretary Leandro Mendoza,
Philippine National Railways General Manager Jose Serase II, Monetary Board
Member Juanita Amatong, Bases Conversion Development Authority
Chairperson Gen. Narciso Abaya and Secretary Romulo L. Neri.10 NorthRail
President Cortes sent personal regrets likewise citing E.O. 464.11
On October 3, 2005, three petitions, docketed as G.R. Nos. 169659, 169660,
and 169667, for certiorari and prohibition, were filed before this Court
challenging the constitutionality of E.O. 464.
In G.R. No. 169659, petitioners party-list Bayan Muna, House of
Representatives Members Satur Ocampo, Crispin Beltran, Rafael Mariano, Liza
Maza, Joel Virador and Teodoro Casino, Courage, an organization of
government employees, and Counsels for the Defense of Liberties (CODAL), a
group of lawyers dedicated to the promotion of justice, democracy and peace,
all claiming to have standing to file the suit because of the transcendental
importance of the issues they posed, pray, in their petition that E.O. 464 be
declared null and void for being unconstitutional; that respondent Executive
Secretary Ermita, in his capacity as Executive Secretary and alter-ego of
President Arroyo, be prohibited from imposing, and threatening to impose
sanctions on officials who appear before Congress due to congressional
summons. Additionally, petitioners claim that E.O. 464 infringes on their rights
and impedes them from fulfilling their respective obligations. Thus, Bayan Muna
alleges that E.O. 464 infringes on its right as a political party entitled to
participate in governance; Satur Ocampo, et al. allege that E.O. 464 infringes
on their rights and duties as members of Congress to conduct investigation in
aid of legislation and conduct oversight functions in the implementation of laws;
Courage alleges that the tenure of its members in public office is predicated on,
and threatened by, their submission to the requirements of E.O. 464 should
they be summoned by Congress; and CODAL alleges that its members have a
sworn duty to uphold the rule of law, and their rights to information and to
transparent governance are threatened by the imposition of E.O. 464.
In G.R. No. 169660, petitioner Francisco I. Chavez, claiming that his
constitutional rights as a citizen, taxpayer and law practitioner, are affected by
the enforcement of E.O. 464, prays in his petition that E.O. 464 be declared null
and void for being unconstitutional.
In G.R. No. 169667, petitioner Alternative Law Groups, Inc.12 (ALG), alleging
that as a coalition of 17 legal resource non-governmental organizations
engaged in developmental lawyering and work with the poor and marginalized
sectors in different parts of the country, and as an organization of citizens of the
Philippines and a part of the general public, it has legal standing to institute the
petition to enforce its constitutional right to information on matters of public
concern, a right which was denied to the public by E.O. 464, 13 prays, that said
order be declared null and void for being unconstitutional and that respondent
Executive Secretary Ermita be ordered to cease from implementing it.
On October 11, 2005, Petitioner Senate of the Philippines, alleging that it has a
vital interest in the resolution of the issue of the validity of E.O. 464 for it stands
to suffer imminent and material injury, as it has already sustained the same with
its continued enforcement since it directly interferes with and impedes the valid
exercise of the Senate’s powers and functions and conceals information of
great public interest and concern, filed its petition for certiorari and prohibition,
docketed as G.R. No. 169777 and prays that E.O. 464 be declared
unconstitutional.
On October 14, 2005, PDP-Laban, a registered political party with members
duly elected into the Philippine Senate and House of Representatives, filed a
similar petition for certiorari and prohibition, docketed as G.R. No. 169834,
alleging that it is affected by the challenged E.O. 464 because it hampers its
legislative agenda to be implemented through its members in Congress,
particularly in the conduct of inquiries in aid of legislation and transcendental
issues need to be resolved to avert a constitutional crisis between the executive
and legislative branches of the government.
Meanwhile, by letter14 dated February 6, 2006, Senator Biazon reiterated his
invitation to Gen. Senga for him and other military officers to attend the hearing
on the alleged wiretapping scheduled on February 10, 2005. Gen. Senga
replied, however, by letter15 dated February 8, 2006, that "[p]ursuant to
Executive Order No. 464, th[e] Headquarters requested for a clearance from
the President to allow [them] to appear before the public hearing" and that "they
will attend once [their] request is approved by the President." As none of those
invited appeared, the hearing on February 10, 2006 was cancelled.16
In another investigation conducted jointly by the Senate Committee on
Agriculture and Food and the Blue Ribbon Committee on the alleged
mismanagement and use of the fertilizer fund under the Ginintuang
Masaganang Ani program of the Department of Agriculture (DA), several
Cabinet officials were invited to the hearings scheduled on October 5 and 26,
November 24 and December 12, 2005 but most of them failed to attend, DA
Undersecretary Belinda Gonzales, DA Assistant Secretary Felix Jose Montes,
Fertilizer and Pesticide Authority Executive Director Norlito R. Gicana,17 and
those from the Department of Budget and Management18 having invoked E.O.
464.
In the budget hearings set by the Senate on February 8 and 13, 2006, Press
Secretary and Presidential Spokesperson Ignacio R. Bunye,19 DOJ Secretary
Raul M. Gonzalez20 and Department of Interior and Local Government
Undersecretary Marius P. Corpus21 communicated their inability to attend due
to lack of appropriate clearance from the President pursuant to E.O. 464.
During the February 13, 2005 budget hearing, however, Secretary Bunye was
allowed to attend by Executive Secretary Ermita.
On February 13, 2006, Jose Anselmo I. Cadiz and the incumbent members of
the Board of Governors of the Integrated Bar of the Philippines, as taxpayers,
and the Integrated Bar of the Philippines as the official organization of all
Philippine lawyers, all invoking their constitutional right to be informed on
matters of public interest, filed their petition for certiorari and prohibition,
docketed as G.R. No. 171246, and pray that E.O. 464 be declared null and
void.
All the petitions pray for the issuance of a Temporary Restraining Order
enjoining respondents from implementing, enforcing, and observing E.O. 464.
In the oral arguments on the petitions conducted on February 21, 2006, the
following substantive issues were ventilated: (1) whether respondents
committed grave abuse of discretion in implementing E.O. 464 prior to its
publication in the Official Gazette or in a newspaper of general circulation; and
(2) whether E.O. 464 violates the following provisions of the Constitution: Art. II,
Sec. 28, Art. III, Sec. 4, Art. III, Sec. 7, Art. IV. Sec. 1, Art. VI, Sec. 21, Art. VI,
Sec. 22, Art. XI, Sec. 1, and Art. XIII, Sec. 16. The procedural issue of whether
there is an actual case or controversy that calls for judicial review was not taken
up; instead, the parties were instructed to discuss it in their respective
memoranda.
After the conclusion of the oral arguments, the parties were directed to submit
their respective memoranda, paying particular attention to the following
propositions: (1) that E.O. 464 is, on its face, unconstitutional; and (2) assuming
that it is not, it is unconstitutional as applied in four instances, namely: (a) the
so called Fertilizer scam; (b) the NorthRail investigation (c) the Wiretapping
activity of the ISAFP; and (d) the investigation on the Venable contract.22
Petitioners in G.R. No. 16966023 and G.R. No. 16977724 filed their memoranda
on March 7, 2006, while those in G.R. No. 16966725 and G.R. No. 16983426
filed theirs the next day or on March 8, 2006. Petitioners in G.R. No. 171246 did
not file any memorandum.
Petitioners Bayan Muna et al. in G.R. No. 169659, after their motion for
extension to file memorandum27 was granted, subsequently filed a
manifestation28 dated March 14, 2006 that it would no longer file its
memorandum in the interest of having the issues resolved soonest, prompting
this Court to issue a Resolution reprimanding them.29
Petitioners submit that E.O. 464 violates the following constitutional provisions:
Art. VI, Sec. 2130
Art. VI, Sec. 2231
Art. VI, Sec. 132
Art. XI, Sec. 133
Art. III, Sec. 734
Art. III, Sec. 435
Art. XIII, Sec. 16 36
Art. II, Sec. 2837
Respondents Executive Secretary Ermita et al., on the other hand, pray in their
consolidated memorandum38 on March 13, 2006 for the dismissal of the
petitions for lack of merit.
The Court synthesizes the issues to be resolved as follows:
1. Whether E.O. 464 contravenes the power of inquiry vested in Congress;
2. Whether E.O. 464 violates the right of the people to information on matters of
public concern; and
3. Whether respondents have committed grave abuse of discretion when they
implemented E.O. 464 prior to its publication in a newspaper of general
circulation.
Essential requisites for judicial review
Before proceeding to resolve the issue of the constitutionality of E.O. 464,
ascertainment of whether the requisites for a valid exercise of the Court’s
power of judicial review are present is in order.
Like almost all powers conferred by the Constitution, the power of judicial
review is subject to limitations, to wit: (1) there must be an actual case or
controversy calling for the exercise of judicial power; (2) the person challenging
the act must have standing to challenge the validity of the subject act or
issuance; otherwise stated, he must have a personal and substantial interest in
the case such that he has sustained, or will sustain, direct injury as a result of
its enforcement; (3) the question of constitutionality must be raised at the
earliest opportunity; and (4) the issue of constitutionality must be the very lis
mota of the case.39
Except with respect to the requisites of standing and existence of an actual
case or controversy where the disagreement between the parties lies,
discussion of the rest of the requisites shall be omitted.
Standing
Respondents, through the Solicitor General, assert that the allegations in G.R.
Nos. 169659, 169660 and 169667 make it clear that they, adverting to the non-
appearance of several officials of the executive department in the investigations
called by the different committees of the Senate, were brought to vindicate the
constitutional duty of the Senate or its different committees to conduct inquiry in
aid of legislation or in the exercise of its oversight functions. They maintain that
Representatives Ocampo et al. have not shown any specific prerogative,
power, and privilege of the House of Representatives which had been
effectively impaired by E.O. 464, there being no mention of any investigation
called by the House of Representatives or any of its committees which was
aborted due to the implementation of E.O. 464.
As for Bayan Muna’s alleged interest as a party-list representing the
marginalized and underrepresented, and that of the other petitioner groups and
individuals who profess to have standing as advocates and defenders of the
Constitution, respondents contend that such interest falls short of that required
to confer standing on them as parties "injured-in-fact."40
Respecting petitioner Chavez, respondents contend that Chavez may not claim
an interest as a taxpayer for the implementation of E.O. 464 does not involve
the exercise of taxing or spending power.41
With regard to the petition filed by the Senate, respondents argue that in the
absence of a personal or direct injury by reason of the issuance of E.O. 464,
the Senate and its individual members are not the proper parties to assail the
constitutionality of E.O. 464.
Invoking this Court’s ruling in National Economic Protectionism Association v.
Ongpin42 and Valmonte v. Philippine Charity Sweepstakes Office,43 respondents
assert that to be considered a proper party, one must have a personal and
substantial interest in the case, such that he has sustained or will sustain direct
injury due to the enforcement of E.O. 464.44
That the Senate of the Philippines has a fundamental right essential not only for
intelligent public decision-making in a democratic system, but more especially
for sound legislation45 is not disputed. E.O. 464, however, allegedly stifles the
ability of the members of Congress to access information that is crucial to law-
making.46 Verily, the Senate, including its individual members, has a substantial
and direct interest over the outcome of the controversy and is the proper party
to assail the constitutionality of E.O. 464. Indeed, legislators have standing to
maintain inviolate the prerogative, powers and privileges vested by the
Constitution in their office and are allowed to sue to question the validity of any
official action which they claim infringes their prerogatives as legislators.47
In the same vein, party-list representatives Satur Ocampo (Bayan Muna),
Teodoro Casino (Bayan Muna), Joel Virador (Bayan Muna), Crispin Beltran
(Anakpawis), Rafael Mariano (Anakpawis), and Liza Maza (Gabriela) are
allowed to sue to question the constitutionality of E.O. 464, the absence of any
claim that an investigation called by the House of Representatives or any of its
committees was aborted due to the implementation of E.O. 464
notwithstanding, it being sufficient that a claim is made that E.O. 464 infringes
on their constitutional rights and duties as members of Congress to conduct
investigation in aid of legislation and conduct oversight functions in the
implementation of laws.
The national political party, Bayan Muna, likewise meets the standing
requirement as it obtained three seats in the House of Representatives in the
2004 elections and is, therefore, entitled to participate in the legislative process
consonant with the declared policy underlying the party list system of affording
citizens belonging to marginalized and underrepresented sectors, organizations
and parties who lack well-defined political constituencies to contribute to the
formulation and enactment of legislation that will benefit the nation.48
As Bayan Muna and Representatives Ocampo et al. have the standing to file
their petitions, passing on the standing of their co-petitioners Courage and
Codal is rendered unnecessary.49
In filing their respective petitions, Chavez, the ALG which claims to be an
organization of citizens, and the incumbent members of the IBP Board of
Governors and the IBP in behalf of its lawyer members,50 invoke their
constitutional right to information on matters of public concern, asserting that
the right to information, curtailed and violated by E.O. 464, is essential to the
effective exercise of other constitutional rights51 and to the maintenance of the
balance of power among the three branches of the government through the
principle of checks and balances.52
It is well-settled that when suing as a citizen, the interest of the petitioner in
assailing the constitutionality of laws, presidential decrees, orders, and other
regulations, must be direct and personal. In Franciso v. House of
Representatives,53 this Court held that when the proceeding involves the
assertion of a public right, the mere fact that he is a citizen satisfies the
requirement of personal interest.
As for petitioner PDP-Laban, it asseverates that it is clothed with legal standing
in view of the transcendental issues raised in its petition which this Court needs
to resolve in order to avert a constitutional crisis. For it to be accorded standing
on the ground of transcendental importance, however, it must establish (1) the
character of the funds (that it is public) or other assets involved in the case, (2)
the presence of a clear case of disregard of a constitutional or statutory
prohibition by the public respondent agency or instrumentality of the
government, and (3) the lack of any party with a more direct and specific
interest in raising the questions being raised.54 The first and last determinants
not being present as no public funds or assets are involved and petitioners in
G.R. Nos. 169777 and 169659 have direct and specific interests in the
resolution of the controversy, petitioner PDP-Laban is bereft of standing to file
its petition. Its allegation that E.O. 464 hampers its legislative agenda is vague
and uncertain, and at best is only a "generalized interest" which it shares with
the rest of the political parties. Concrete injury, whether actual or threatened, is
that indispensable element of a dispute which serves in part to cast it in a form
traditionally capable of judicial resolution.55 In fine, PDP-Laban’s alleged
interest as a political party does not suffice to clothe it with legal standing.
Actual Case or Controversy
Petitioners assert that an actual case exists, they citing the absence of the
executive officials invited by the Senate to its hearings after the issuance of
E.O. 464, particularly those on the NorthRail project and the wiretapping
controversy.
Respondents counter that there is no case or controversy, there being no
showing that President Arroyo has actually withheld her consent or prohibited
the appearance of the invited officials.56 These officials, they claim, merely
communicated to the Senate that they have not yet secured the consent of the
President, not that the President prohibited their attendance.57 Specifically with
regard to the AFP officers who did not attend the hearing on September 28,
2005, respondents claim that the instruction not to attend without the
President’s consent was based on its role as Commander-in-Chief of the
Armed Forces, not on E.O. 464.
Respondents thus conclude that the petitions merely rest on an unfounded
apprehension that the President will abuse its power of preventing the
appearance of officials before Congress, and that such apprehension is not
sufficient for challenging the validity of E.O. 464.
The Court finds respondents’ assertion that the President has not withheld her
consent or prohibited the appearance of the officials concerned immaterial in
determining the existence of an actual case or controversy insofar as E.O. 464
is concerned. For E.O. 464 does not require either a deliberate withholding of
consent or an express prohibition issuing from the President in order to bar
officials from appearing before Congress.
As the implementation of the challenged order has already resulted in the
absence of officials invited to the hearings of petitioner Senate of the
Philippines, it would make no sense to wait for any further event before
considering the present case ripe for adjudication. Indeed, it would be sheer
abandonment of duty if this Court would now refrain from passing on the
constitutionality of E.O. 464.
Constitutionality of E.O. 464
E.O. 464, to the extent that it bars the appearance of executive officials before
Congress, deprives Congress of the information in the possession of these
officials. To resolve the question of whether such withholding of information
violates the Constitution, consideration of the general power of Congress to
obtain information, otherwise known as the power of inquiry, is in order.
The power of inquiry
The Congress power of inquiry is expressly recognized in Section 21 of Article
VI of the Constitution which reads:
SECTION 21. The Senate or the House of Representatives or any of its
respective committees may conduct inquiries in aid of legislation in accordance
with its duly published rules of procedure. The rights of persons appearing in or
affected by such inquiries shall be respected. (Underscoring supplied)
This provision is worded exactly as Section 8 of Article VIII of the 1973
Constitution except that, in the latter, it vests the power of inquiry in the
unicameral legislature established therein – the Batasang Pambansa – and its
committees.
The 1935 Constitution did not contain a similar provision. Nonetheless, in
Arnault v. Nazareno,58 a case decided in 1950 under that Constitution, the
Court already recognized that the power of inquiry is inherent in the power to
legislate.
Arnault involved a Senate investigation of the reportedly anomalous purchase
of the Buenavista and Tambobong Estates by the Rural Progress
Administration. Arnault, who was considered a leading witness in the
controversy, was called to testify thereon by the Senate. On account of his
refusal to answer the questions of the senators on an important point, he was,
by resolution of the Senate, detained for contempt. Upholding the Senate’s
power to punish Arnault for contempt, this Court held:
Although there is no provision in the Constitution expressly investing either
House of Congress with power to make investigations and exact testimony to
the end that it may exercise its legislative functions advisedly and effectively,
such power is so far incidental to the legislative function as to be implied. In
other words, the power of inquiry – with process to enforce it – is an essential
and appropriate auxiliary to the legislative function. A legislative body cannot
legislate wisely or effectively in the absence of information respecting the
conditions which the legislation is intended to affect or change; and where the
legislative body does not itself possess the requisite information – which is not
infrequently true – recourse must be had to others who do possess it.
Experience has shown that mere requests for such information are often
unavailing, and also that information which is volunteered is not always
accurate or complete; so some means of compulsion is essential to obtain what
is needed.59 . . . (Emphasis and underscoring supplied)
That this power of inquiry is broad enough to cover officials of the executive
branch may be deduced from the same case. The power of inquiry, the Court
therein ruled, is co-extensive with the power to legislate.60 The matters which
may be a proper subject of legislation and those which may be a proper subject
of investigation are one. It follows that the operation of government, being a
legitimate subject for legislation, is a proper subject for investigation.
Thus, the Court found that the Senate investigation of the government
transaction involved in Arnault was a proper exercise of the power of inquiry.
Besides being related to the expenditure of public funds of which Congress is
the guardian, the transaction, the Court held, "also involved government
agencies created by Congress and officers whose positions it is within the
power of Congress to regulate or even abolish."
Since Congress has authority to inquire into the operations of the executive
branch, it would be incongruous to hold that the power of inquiry does not
extend to executive officials who are the most familiar with and informed on
executive operations.
As discussed in Arnault, the power of inquiry, "with process to enforce it," is
grounded on the necessity of information in the legislative process. If the
information possessed by executive officials on the operation of their offices is
necessary for wise legislation on that subject, by parity of reasoning, Congress
has the right to that information and the power to compel the disclosure thereof.
As evidenced by the American experience during the so-called "McCarthy era,"
however, the right of Congress to conduct inquiries in aid of legislation is, in
theory, no less susceptible to abuse than executive or judicial power. It may
thus be subjected to judicial review pursuant to the Court’s certiorari powers
under Section 1, Article VIII of the Constitution.
For one, as noted in Bengzon v. Senate Blue Ribbon Committee,61 the inquiry
itself might not properly be in aid of legislation, and thus beyond the
constitutional power of Congress. Such inquiry could not usurp judicial
functions. Parenthetically, one possible way for Congress to avoid such a result
as occurred in Bengzon is to indicate in its invitations to the public officials
concerned, or to any person for that matter, the possible needed statute which
prompted the need for the inquiry. Given such statement in its invitations, along
with the usual indication of the subject of inquiry and the questions relative to
and in furtherance thereof, there would be less room for speculation on the part
of the person invited on whether the inquiry is in aid of legislation.
Section 21, Article VI likewise establishes crucial safeguards that proscribe the
legislative power of inquiry. The provision requires that the inquiry be done in
accordance with the Senate or House’s duly published rules of procedure,
necessarily implying the constitutional infirmity of an inquiry conducted without
duly published rules of procedure. Section 21 also mandates that the rights of
persons appearing in or affected by such inquiries be respected, an imposition
that obligates Congress to adhere to the guarantees in the Bill of Rights.
These abuses are, of course, remediable before the courts, upon the proper
suit filed by the persons affected, even if they belong to the executive branch.
Nonetheless, there may be exceptional circumstances, none appearing to
obtain at present, wherein a clear pattern of abuse of the legislative power of
inquiry might be established, resulting in palpable violations of the rights
guaranteed to members of the executive department under the Bill of Rights. In
such instances, depending on the particulars of each case, attempts by the
Executive Branch to forestall these abuses may be accorded judicial sanction.
Even where the inquiry is in aid of legislation, there are still recognized
exemptions to the power of inquiry, which exemptions fall under the rubric of
"executive privilege." Since this term figures prominently in the challenged
order, it being mentioned in its provisions, its preambular clauses,62 and in its
very title, a discussion of executive privilege is crucial for determining the
constitutionality of E.O. 464.
Executive privilege
The phrase "executive privilege" is not new in this jurisdiction. It has been used
even prior to the promulgation of the 1986 Constitution.63 Being of American
origin, it is best understood in light of how it has been defined and used in the
legal literature of the United States.
Schwartz defines executive privilege as "the power of the Government to
withhold information from the public, the courts, and the Congress."64 Similarly,
Rozell defines it as "the right of the President and high-level executive branch
officers to withhold information from Congress, the courts, and ultimately the
public."65
Executive privilege is, nonetheless, not a clear or unitary concept. 66 It has
encompassed claims of varying kinds.67 Tribe, in fact, comments that while it is
customary to employ the phrase "executive privilege," it may be more accurate
to speak of executive privileges "since presidential refusals to furnish
information may be actuated by any of at least three distinct kinds of
considerations, and may be asserted, with differing degrees of success, in the
context of either judicial or legislative investigations."
One variety of the privilege, Tribe explains, is the state secrets privilege
invoked by U.S. Presidents, beginning with Washington, on the ground that the
information is of such nature that its disclosure would subvert crucial military or
diplomatic objectives. Another variety is the informer’s privilege, or the privilege
of the Government not to disclose the identity of persons who furnish
information of violations of law to officers charged with the enforcement of that
law. Finally, a generic privilege for internal deliberations has been said to attach
to intragovernmental documents reflecting advisory opinions, recommendations
and deliberations comprising part of a process by which governmental
decisions and policies are formulated. 68
Tribe’s comment is supported by the ruling in In re Sealed Case, thus:
Since the beginnings of our nation, executive officials have claimed a variety of
privileges to resist disclosure of information the confidentiality of which they felt
was crucial to fulfillment of the unique role and responsibilities of the executive
branch of our government. Courts ruled early that the executive had a right to
withhold documents that might reveal military or state secrets. The courts have
also granted the executive a right to withhold the identity of government
informers in some circumstances and a qualified right to withhold information
related to pending investigations. x x x"69 (Emphasis and underscoring
supplied)
The entry in Black’s Law Dictionary on "executive privilege" is similarly
instructive regarding the scope of the doctrine.
This privilege, based on the constitutional doctrine of separation of powers,
exempts the executive from disclosure requirements applicable to the ordinary
citizen or organization where such exemption is necessary to the discharge of
highly important executive responsibilities involved in maintaining governmental
operations, and extends not only to military and diplomatic secrets but also to
documents integral to an appropriate exercise of the executive’ domestic
decisional and policy making functions, that is, those documents reflecting the
frank expression necessary in intra-governmental advisory and deliberative
communications.70 (Emphasis and underscoring supplied)
That a type of information is recognized as privileged does not, however,
necessarily mean that it would be considered privileged in all instances. For in
determining the validity of a claim of privilege, the question that must be asked
is not only whether the requested information falls within one of the traditional
privileges, but also whether that privilege should be honored in a given
procedural setting.71
The leading case on executive privilege in the United States is U.S. v. Nixon, 72
decided in 1974. In issue in that case was the validity of President Nixon’s
claim of executive privilege against a subpoena issued by a district court
requiring the production of certain tapes and documents relating to the
Watergate investigations. The claim of privilege was based on the President’s
general interest in the confidentiality of his conversations and correspondence.
The U.S. Court held that while there is no explicit reference to a privilege of
confidentiality in the U.S. Constitution, it is constitutionally based to the extent
that it relates to the effective discharge of a President’s powers. The Court,
nonetheless, rejected the President’s claim of privilege, ruling that the privilege
must be balanced against the public interest in the fair administration of criminal
justice. Notably, the Court was careful to clarify that it was not there addressing
the issue of claims of privilege in a civil litigation or against congressional
demands for information.
Cases in the U.S. which involve claims of executive privilege against Congress
are rare.73 Despite frequent assertion of the privilege to deny information to
Congress, beginning with President Washington’s refusal to turn over treaty
negotiation records to the House of Representatives, the U.S. Supreme Court
has never adjudicated the issue.74 However, the U.S. Court of Appeals for the
District of Columbia Circuit, in a case decided earlier in the same year as
Nixon, recognized the President’s privilege over his conversations against a
congressional subpoena.75 Anticipating the balancing approach adopted by the
U.S. Supreme Court in Nixon, the Court of Appeals weighed the public interest
protected by the claim of privilege against the interest that would be served by
disclosure to the Committee. Ruling that the balance favored the President, the
Court declined to enforce the subpoena. 76
In this jurisdiction, the doctrine of executive privilege was recognized by this
Court in Almonte v. Vasquez.77 Almonte used the term in reference to the same
privilege subject of Nixon. It quoted the following portion of the Nixon decision
which explains the basis for the privilege:
"The expectation of a President to the confidentiality of his conversations and
correspondences, like the claim of confidentiality of judicial deliberations, for
example, has all the values to which we accord deference for the privacy of all
citizens and, added to those values, is the necessity for protection of the public
interest in candid, objective, and even blunt or harsh opinions in Presidential
decision-making. A President and those who assist him must be free to explore
alternatives in the process of shaping policies and making decisions and to do
so in a way many would be unwilling to express except privately. These are the
considerations justifying a presumptive privilege for Presidential
communications. The privilege is fundamental to the operation of government
and inextricably rooted in the separation of powers under the Constitution x x x
" (Emphasis and underscoring supplied)
Almonte involved a subpoena duces tecum issued by the Ombudsman against
the therein petitioners. It did not involve, as expressly stated in the decision, the
right of the people to information.78 Nonetheless, the Court recognized that
there are certain types of information which the government may withhold from
the public, thus acknowledging, in substance if not in name, that executive
privilege may be claimed against citizens’ demands for information.
In Chavez v. PCGG,79 the Court held that this jurisdiction recognizes the
common law holding that there is a "governmental privilege against public
disclosure with respect to state secrets regarding military, diplomatic and other
national security matters."80 The same case held that closed-door Cabinet
meetings are also a recognized limitation on the right to information.
Similarly, in Chavez v. Public Estates Authority,81 the Court ruled that the right
to information does not extend to matters recognized as "privileged information
under the separation of powers,"82 by which the Court meant Presidential
conversations, correspondences, and discussions in closed-door Cabinet
meetings. It also held that information on military and diplomatic secrets and
those affecting national security, and information on investigations of crimes by
law enforcement agencies before the prosecution of the accused were
exempted from the right to information.
From the above discussion on the meaning and scope of executive privilege,
both in the United States and in this jurisdiction, a clear principle emerges.
Executive privilege, whether asserted against Congress, the courts, or the
public, is recognized only in relation to certain types of information of a
sensitive character. While executive privilege is a constitutional concept, a
claim thereof may be valid or not depending on the ground invoked to justify it
and the context in which it is made. Noticeably absent is any recognition that
executive officials are exempt from the duty to disclose information by the mere
fact of being executive officials. Indeed, the extraordinary character of the
exemptions indicates that the presumption inclines heavily against executive
secrecy and in favor of disclosure.
Validity of Section 1
Section 1 is similar to Section 3 in that both require the officials covered by
them to secure the consent of the President prior to appearing before
Congress. There are significant differences between the two provisions,
however, which constrain this Court to discuss the validity of these provisions
separately.
Section 1 specifically applies to department heads. It does not, unlike Section
3, require a prior determination by any official whether they are covered by E.O.
464. The President herself has, through the challenged order, made the
determination that they are. Further, unlike also Section 3, the coverage of
department heads under Section 1 is not made to depend on the department
heads’ possession of any information which might be covered by executive
privilege. In fact, in marked contrast to Section 3 vis-à-vis Section 2, there is no
reference to executive privilege at all. Rather, the required prior consent under
Section 1 is grounded on Article VI, Section 22 of the Constitution on what has
been referred to as the question hour.
SECTION 22. The heads of departments may upon their own initiative, with the
consent of the President, or upon the request of either House, as the rules of
each House shall provide, appear before and be heard by such House on any
matter pertaining to their departments. Written questions shall be submitted to
the President of the Senate or the Speaker of the House of Representatives at
least three days before their scheduled appearance. Interpellations shall not be
limited to written questions, but may cover matters related thereto. When the
security of the State or the public interest so requires and the President so
states in writing, the appearance shall be conducted in executive session.
Determining the validity of Section 1 thus requires an examination of the
meaning of Section 22 of Article VI. Section 22 which provides for the question
hour must be interpreted vis-à-vis Section 21 which provides for the power of
either House of Congress to "conduct inquiries in aid of legislation." As the
following excerpt of the deliberations of the Constitutional Commission shows,
the framers were aware that these two provisions involved distinct functions of
Congress.
MR. MAAMBONG. x x x When we amended Section 20 [now Section 22 on the
Question Hour] yesterday, I noticed that members of the Cabinet cannot be
compelled anymore to appear before the House of Representatives or before
the Senate. I have a particular problem in this regard, Madam President,
because in our experience in the Regular Batasang Pambansa – as the
Gentleman himself has experienced in the interim Batasang Pambansa – one
of the most competent inputs that we can put in our committee deliberations,
either in aid of legislation or in congressional investigations, is the testimonies
of Cabinet ministers. We usually invite them, but if they do not come and it is a
congressional investigation, we usually issue subpoenas.
I want to be clarified on a statement made by Commissioner Suarez when he
said that the fact that the Cabinet ministers may refuse to come to the House of
Representatives or the Senate [when requested under Section 22] does not
mean that they need not come when they are invited or subpoenaed by the
committee of either House when it comes to inquiries in aid of legislation or
congressional investigation. According to Commissioner Suarez, that is allowed
and their presence can be had under Section 21. Does the gentleman confirm
this, Madam President?
MR. DAVIDE. We confirm that, Madam President, because Section 20 refers
only to what was originally the Question Hour, whereas, Section 21 would refer
specifically to inquiries in aid of legislation, under which anybody for that matter,
may be summoned and if he refuses, he can be held in contempt of the
House.83 (Emphasis and underscoring supplied)
A distinction was thus made between inquiries in aid of legislation and the
question hour. While attendance was meant to be discretionary in the question
hour, it was compulsory in inquiries in aid of legislation. The reference to
Commissioner Suarez bears noting, he being one of the proponents of the
amendment to make the appearance of department heads discretionary in the
question hour.
So clearly was this distinction conveyed to the members of the Commission
that the Committee on Style, precisely in recognition of this distinction, later
moved the provision on question hour from its original position as Section 20 in
the original draft down to Section 31, far from the provision on inquiries in aid of
legislation. This gave rise to the following exchange during the deliberations:
MR. GUINGONA. [speaking in his capacity as Chairman of the Committee on
Style] We now go, Mr. Presiding Officer, to the Article on Legislative and may I
request the chairperson of the Legislative Department, Commissioner Davide,
to give his reaction.
THE PRESIDING OFFICER (Mr. Jamir). Commissioner Davide is recognized.|
avvphi|.net
MR. DAVIDE. Thank you, Mr. Presiding Officer. I have only one reaction to the
Question Hour. I propose that instead of putting it as Section 31, it should follow
Legislative Inquiries.
THE PRESIDING OFFICER. What does the committee say?
MR. GUINGONA. I ask Commissioner Maambong to reply, Mr. Presiding
Officer.
MR. MAAMBONG. Actually, we considered that previously when we sequenced
this but we reasoned that in Section 21, which is Legislative Inquiry, it is
actually a power of Congress in terms of its own lawmaking; whereas, a
Question Hour is not actually a power in terms of its own lawmaking power
because in Legislative Inquiry, it is in aid of legislation. And so we put Question
Hour as Section 31. I hope Commissioner Davide will consider this.
MR. DAVIDE. The Question Hour is closely related with the legislative power,
and it is precisely as a complement to or a supplement of the Legislative
Inquiry. The appearance of the members of Cabinet would be very, very
essential not only in the application of check and balance but also, in effect, in
aid of legislation.
MR. MAAMBONG. After conferring with the committee, we find merit in the
suggestion of Commissioner Davide. In other words, we are accepting that and
so this Section 31 would now become Section 22. Would it be, Commissioner
Davide?
MR. DAVIDE. Yes.84 (Emphasis and underscoring supplied)
Consistent with their statements earlier in the deliberations, Commissioners
Davide and Maambong proceeded from the same assumption that these
provisions pertained to two different functions of the legislature. Both
Commissioners understood that the power to conduct inquiries in aid of
legislation is different from the power to conduct inquiries during the question
hour. Commissioner Davide’s only concern was that the two provisions on
these distinct powers be placed closely together, they being complementary to
each other. Neither Commissioner considered them as identical functions of
Congress.
The foregoing opinion was not the two Commissioners’ alone. From the above-
quoted exchange, Commissioner Maambong’s committee – the Committee on
Style – shared the view that the two provisions reflected distinct functions of
Congress. Commissioner Davide, on the other hand, was speaking in his
capacity as Chairman of the Committee on the Legislative Department. His
views may thus be presumed as representing that of his Committee.
In the context of a parliamentary system of government, the "question hour" has
a definite meaning. It is a period of confrontation initiated by Parliament to hold
the Prime Minister and the other ministers accountable for their acts and the
operation of the government,85 corresponding to what is known in Britain as the
question period. There was a specific provision for a question hour in the 1973
Constitution86 which made the appearance of ministers mandatory. The same
perfectly conformed to the parliamentary system established by that
Constitution, where the ministers are also members of the legislature and are
directly accountable to it.
An essential feature of the parliamentary system of government is the
immediate accountability of the Prime Minister and the Cabinet to the National
Assembly. They shall be responsible to the National Assembly for the program
of government and shall determine the guidelines of national policy. Unlike in
the presidential system where the tenure of office of all elected officials cannot
be terminated before their term expired, the Prime Minister and the Cabinet
remain in office only as long as they enjoy the confidence of the National
Assembly. The moment this confidence is lost the Prime Minister and the
Cabinet may be changed.87
The framers of the 1987 Constitution removed the mandatory nature of such
appearance during the question hour in the present Constitution so as to
conform more fully to a system of separation of powers. 88 To that extent, the
question hour, as it is presently understood in this jurisdiction, departs from the
question period of the parliamentary system. That department heads may not
be required to appear in a question hour does not, however, mean that the
legislature is rendered powerless to elicit information from them in all
circumstances. In fact, in light of the absence of a mandatory question period,
the need to enforce Congress’ right to executive information in the performance
of its legislative function becomes more imperative. As Schwartz observes:
Indeed, if the separation of powers has anything to tell us on the subject under
discussion, it is that the Congress has the right to obtain information from any
source – even from officials of departments and agencies in the executive
branch. In the United States there is, unlike the situation which prevails in a
parliamentary system such as that in Britain, a clear separation between the
legislative and executive branches. It is this very separation that makes the
congressional right to obtain information from the executive so essential, if the
functions of the Congress as the elected representatives of the people are
adequately to be carried out. The absence of close rapport between the
legislative and executive branches in this country, comparable to those which
exist under a parliamentary system, and the nonexistence in the Congress of
an institution such as the British question period have perforce made reliance
by the Congress upon its right to obtain information from the executive
essential, if it is intelligently to perform its legislative tasks. Unless the Congress
possesses the right to obtain executive information, its power of oversight of
administration in a system such as ours becomes a power devoid of most of its
practical content, since it depends for its effectiveness solely upon information
parceled out ex gratia by the executive.89 (Emphasis and underscoring
supplied)
Sections 21 and 22, therefore, while closely related and complementary to each
other, should not be considered as pertaining to the same power of Congress.
One specifically relates to the power to conduct inquiries in aid of legislation,
the aim of which is to elicit information that may be used for legislation, while
the other pertains to the power to conduct a question hour, the objective of
which is to obtain information in pursuit of Congress’ oversight function.
When Congress merely seeks to be informed on how department heads are
implementing the statutes which it has issued, its right to such information is not
as imperative as that of the President to whom, as Chief Executive, such
department heads must give a report of their performance as a matter of duty.
In such instances, Section 22, in keeping with the separation of powers, states
that Congress may only request their appearance. Nonetheless, when the
inquiry in which Congress requires their appearance is "in aid of legislation"
under Section 21, the appearance is mandatory for the same reasons stated in
Arnault.90
In fine, the oversight function of Congress may be facilitated by compulsory
process only to the extent that it is performed in pursuit of legislation. This is
consistent with the intent discerned from the deliberations of the Constitutional
Commission.
Ultimately, the power of Congress to compel the appearance of executive
officials under Section 21 and the lack of it under Section 22 find their basis in
the principle of separation of powers. While the executive branch is a co-equal
branch of the legislature, it cannot frustrate the power of Congress to legislate
by refusing to comply with its demands for information.
When Congress exercises its power of inquiry, the only way for department
heads to exempt themselves therefrom is by a valid claim of privilege. They are
not exempt by the mere fact that they are department heads. Only one
executive official may be exempted from this power — the President on whom
executive power is vested, hence, beyond the reach of Congress except
through the power of impeachment. It is based on her being the highest official
of the executive branch, and the due respect accorded to a co-equal branch of
government which is sanctioned by a long-standing custom.
By the same token, members of the Supreme Court are also exempt from this
power of inquiry. Unlike the Presidency, judicial power is vested in a collegial
body; hence, each member thereof is exempt on the basis not only of
separation of powers but also on the fiscal autonomy and the constitutional
independence of the judiciary. This point is not in dispute, as even counsel for
the Senate, Sen. Joker Arroyo, admitted it during the oral argument upon
interpellation of the Chief Justice.
Having established the proper interpretation of Section 22, Article VI of the
Constitution, the Court now proceeds to pass on the constitutionality of Section
1 of E.O. 464.
Section 1, in view of its specific reference to Section 22 of Article VI of the
Constitution and the absence of any reference to inquiries in aid of legislation,
must be construed as limited in its application to appearances of department
heads in the question hour contemplated in the provision of said Section 22 of
Article VI. The reading is dictated by the basic rule of construction that
issuances must be interpreted, as much as possible, in a way that will render it
constitutional.
The requirement then to secure presidential consent under Section 1, limited as
it is only to appearances in the question hour, is valid on its face. For under
Section 22, Article VI of the Constitution, the appearance of department heads
in the question hour is discretionary on their part.
Section 1 cannot, however, be applied to appearances of department heads in
inquiries in aid of legislation. Congress is not bound in such instances to
respect the refusal of the department head to appear in such inquiry, unless a
valid claim of privilege is subsequently made, either by the President herself or
by the Executive Secretary.
Validity of Sections 2 and 3
Section 3 of E.O. 464 requires all the public officials enumerated in Section 2(b)
to secure the consent of the President prior to appearing before either house of
Congress. The enumeration is broad. It covers all senior officials of executive
departments, all officers of the AFP and the PNP, and all senior national
security officials who, in the judgment of the heads of offices designated in the
same section (i.e. department heads, Chief of Staff of the AFP, Chief of the
PNP, and the National Security Adviser), are "covered by the executive
privilege."
The enumeration also includes such other officers as may be determined by the
President. Given the title of Section 2 — "Nature, Scope and Coverage of
Executive Privilege" —, it is evident that under the rule of ejusdem generis, the
determination by the President under this provision is intended to be based on
a similar finding of coverage under executive privilege.
En passant, the Court notes that Section 2(b) of E.O. 464 virtually states that
executive privilege actually covers persons. Such is a misuse of the doctrine.
Executive privilege, as discussed above, is properly invoked in relation to
specific categories of information and not to categories of persons.
In light, however, of Sec 2(a) of E.O. 464 which deals with the nature, scope
and coverage of executive privilege, the reference to persons being "covered
by the executive privilege" may be read as an abbreviated way of saying that
the person is in possession of information which is, in the judgment of the head
of office concerned, privileged as defined in Section 2(a). The Court shall thus
proceed on the assumption that this is the intention of the challenged order.
Upon a determination by the designated head of office or by the President that
an official is "covered by the executive privilege," such official is subjected to
the requirement that he first secure the consent of the President prior to
appearing before Congress. This requirement effectively bars the appearance
of the official concerned unless the same is permitted by the President. The
proviso allowing the President to give its consent means nothing more than that
the President may reverse a prohibition which already exists by virtue of E.O.
464.
Thus, underlying this requirement of prior consent is the determination by a
head of office, authorized by the President under E.O. 464, or by the President
herself, that such official is in possession of information that is covered by
executive privilege. This determination then becomes the basis for the official’s
not showing up in the legislative investigation.
In view thereof, whenever an official invokes E.O. 464 to justify his failure to be
present, such invocation must be construed as a declaration to Congress that
the President, or a head of office authorized by the President, has determined
that the requested information is privileged, and that the President has not
reversed such determination. Such declaration, however, even without
mentioning the term "executive privilege," amounts to an implied claim that the
information is being withheld by the executive branch, by authority of the
President, on the basis of executive privilege. Verily, there is an implied claim of
privilege.
The letter dated September 28, 2005 of respondent Executive Secretary Ermita
to Senate President Drilon illustrates the implied nature of the claim of privilege
authorized by E.O. 464. It reads:
In connection with the inquiry to be conducted by the Committee of the Whole
regarding the Northrail Project of the North Luzon Railways Corporation on 29
September 2005 at 10:00 a.m., please be informed that officials of the
Executive Department invited to appear at the meeting will not be able to attend
the same without the consent of the President, pursuant to Executive Order No.
464 (s. 2005), entitled "Ensuring Observance Of The Principle Of Separation Of
Powers, Adherence To The Rule On Executive Privilege And Respect For The
Rights Of Public Officials Appearing In Legislative Inquiries In Aid Of Legislation
Under The Constitution, And For Other Purposes". Said officials have not
secured the required consent from the President. (Underscoring supplied)
The letter does not explicitly invoke executive privilege or that the matter on
which these officials are being requested to be resource persons falls under the
recognized grounds of the privilege to justify their absence. Nor does it
expressly state that in view of the lack of consent from the President under E.O.
464, they cannot attend the hearing.
Significant premises in this letter, however, are left unstated, deliberately or not.
The letter assumes that the invited officials are covered by E.O. 464. As
explained earlier, however, to be covered by the order means that a
determination has been made, by the designated head of office or the
President, that the invited official possesses information that is covered by
executive privilege. Thus, although it is not stated in the letter that such
determination has been made, the same must be deemed implied. Respecting
the statement that the invited officials have not secured the consent of the
President, it only means that the President has not reversed the standing
prohibition against their appearance before Congress.
Inevitably, Executive Secretary Ermita’s letter leads to the conclusion that the
executive branch, either through the President or the heads of offices
authorized under E.O. 464, has made a determination that the information
required by the Senate is privileged, and that, at the time of writing, there has
been no contrary pronouncement from the President. In fine, an implied claim
of privilege has been made by the executive.
While there is no Philippine case that directly addresses the issue of whether
executive privilege may be invoked against Congress, it is gathered from
Chavez v. PEA that certain information in the possession of the executive may
validly be claimed as privileged even against Congress. Thus, the case holds:
There is no claim by PEA that the information demanded by petitioner is
privileged information rooted in the separation of powers. The information does
not cover Presidential conversations, correspondences, or discussions during
closed-door Cabinet meetings which, like internal-deliberations of the Supreme
Court and other collegiate courts, or executive sessions of either house of
Congress, are recognized as confidential. This kind of information cannot be
pried open by a co-equal branch of government. A frank exchange of
exploratory ideas and assessments, free from the glare of publicity and
pressure by interested parties, is essential to protect the independence of
decision-making of those tasked to exercise Presidential, Legislative and
Judicial power. This is not the situation in the instant case. 91 (Emphasis and
underscoring supplied)
Section 3 of E.O. 464, therefore, cannot be dismissed outright as invalid by the
mere fact that it sanctions claims of executive privilege. This Court must look
further and assess the claim of privilege authorized by the Order to determine
whether it is valid.
While the validity of claims of privilege must be assessed on a case to case
basis, examining the ground invoked therefor and the particular circumstances
surrounding it, there is, in an implied claim of privilege, a defect that renders it
invalid per se. By its very nature, and as demonstrated by the letter of
respondent Executive Secretary quoted above, the implied claim authorized by
Section 3 of E.O. 464 is not accompanied by any specific allegation of the basis
thereof (e.g., whether the information demanded involves military or diplomatic
secrets, closed-door Cabinet meetings, etc.). While Section 2(a) enumerates
the types of information that are covered by the privilege under the challenged
order, Congress is left to speculate as to which among them is being referred to
by the executive. The enumeration is not even intended to be comprehensive,
but a mere statement of what is included in the phrase "confidential or classified
information between the President and the public officers covered by this
executive order."
Certainly, Congress has the right to know why the executive considers the
requested information privileged. It does not suffice to merely declare that the
President, or an authorized head of office, has determined that it is so, and that
the President has not overturned that determination. Such declaration leaves
Congress in the dark on how the requested information could be classified as
privileged. That the message is couched in terms that, on first impression, do
not seem like a claim of privilege only makes it more pernicious. It threatens to
make Congress doubly blind to the question of why the executive branch is not
providing it with the information that it has requested.
A claim of privilege, being a claim of exemption from an obligation to disclose
information, must, therefore, be clearly asserted. As U.S. v. Reynolds teaches:
The privilege belongs to the government and must be asserted by it; it can
neither be claimed nor waived by a private party. It is not to be lightly invoked.
There must be a formal claim of privilege, lodged by the head of the department
which has control over the matter, after actual personal consideration by that
officer. The court itself must determine whether the circumstances are
appropriate for the claim of privilege, and yet do so without forcing a disclosure
of the very thing the privilege is designed to protect.92 (Underscoring supplied)
Absent then a statement of the specific basis of a claim of executive privilege,
there is no way of determining whether it falls under one of the traditional
privileges, or whether, given the circumstances in which it is made, it should be
respected.93 These, in substance, were the same criteria in assessing the claim
of privilege asserted against the Ombudsman in Almonte v. Vasquez94 and,
more in point, against a committee of the Senate in Senate Select Committee
on Presidential Campaign Activities v. Nixon.95
A.O. Smith v. Federal Trade Commission is enlightening:
[T]he lack of specificity renders an assessment of the potential harm resulting
from disclosure impossible, thereby preventing the Court from balancing such
harm against plaintiffs’ needs to determine whether to override any claims of
privilege.96 (Underscoring supplied)
And so is U.S. v. Article of Drug:97
On the present state of the record, this Court is not called upon to perform this
balancing operation. In stating its objection to claimant’s interrogatories,
government asserts, and nothing more, that the disclosures sought by claimant
would inhibit the free expression of opinion that non-disclosure is designed to
protect. The government has not shown – nor even alleged – that those who
evaluated claimant’s product were involved in internal policymaking, generally,
or in this particular instance. Privilege cannot be set up by an unsupported
claim. The facts upon which the privilege is based must be established. To find
these interrogatories objectionable, this Court would have to assume that the
evaluation and classification of claimant’s products was a matter of internal
policy formulation, an assumption in which this Court is unwilling to indulge sua
sponte.98 (Emphasis and underscoring supplied)
Mobil Oil Corp. v. Department of Energy99 similarly emphasizes that "an agency
must provide ‘precise and certain’ reasons for preserving the confidentiality of
requested information."
Black v. Sheraton Corp. of America100 amplifies, thus:
A formal and proper claim of executive privilege requires a specific designation
and description of the documents within its scope as well as precise and certain
reasons for preserving their confidentiality. Without this specificity, it is
impossible for a court to analyze the claim short of disclosure of the very thing
sought to be protected. As the affidavit now stands, the Court has little more
than its sua sponte speculation with which to weigh the applicability of the
claim. An improperly asserted claim of privilege is no claim of privilege.
Therefore, despite the fact that a claim was made by the proper executive as
Reynolds requires, the Court can not recognize the claim in the instant case
because it is legally insufficient to allow the Court to make a just and
reasonable determination as to its applicability. To recognize such a broad
claim in which the Defendant has given no precise or compelling reasons to
shield these documents from outside scrutiny, would make a farce of the whole
procedure.101 (Emphasis and underscoring supplied)
Due respect for a co-equal branch of government, moreover, demands no less
than a claim of privilege clearly stating the grounds therefor. Apropos is the
following ruling in McPhaul v. U.S:102
We think the Court’s decision in United States v. Bryan, 339 U.S. 323, 70 S. Ct.
724, is highly relevant to these questions. For it is as true here as it was there,
that ‘if (petitioner) had legitimate reasons for failing to produce the records of
the association, a decent respect for the House of Representatives, by whose
authority the subpoenas issued, would have required that (he) state (his)
reasons for noncompliance upon the return of the writ. Such a statement would
have given the Subcommittee an opportunity to avoid the blocking of its inquiry
by taking other appropriate steps to obtain the records. ‘To deny the Committee
the opportunity to consider the objection or remedy is in itself a contempt of its
authority and an obstruction of its processes. His failure to make any such
statement was "a patent evasion of the duty of one summoned to produce
papers before a congressional committee[, and] cannot be condoned."
(Emphasis and underscoring supplied; citations omitted)
Upon the other hand, Congress must not require the executive to state the
reasons for the claim with such particularity as to compel disclosure of the
information which the privilege is meant to protect.103 A useful analogy in
determining the requisite degree of particularity would be the privilege against
self-incrimination. Thus, Hoffman v. U.S.104 declares:
The witness is not exonerated from answering merely because he declares that
in so doing he would incriminate himself – his say-so does not of itself establish
the hazard of incrimination. It is for the court to say whether his silence is
justified, and to require him to answer if ‘it clearly appears to the court that he is
mistaken.’ However, if the witness, upon interposing his claim, were required to
prove the hazard in the sense in which a claim is usually required to be
established in court, he would be compelled to surrender the very protection
which the privilege is designed to guarantee. To sustain the privilege, it need
only be evident from the implications of the question, in the setting in which it is
asked, that a responsive answer to the question or an explanation of why it
cannot be answered might be dangerous because injurious disclosure could
result." x x x (Emphasis and underscoring supplied)
The claim of privilege under Section 3 of E.O. 464 in relation to Section 2(b) is
thus invalid per se. It is not asserted. It is merely implied. Instead of providing
precise and certain reasons for the claim, it merely invokes E.O. 464, coupled
with an announcement that the President has not given her consent. It is
woefully insufficient for Congress to determine whether the withholding of
information is justified under the circumstances of each case. It severely
frustrates the power of inquiry of Congress.
In fine, Section 3 and Section 2(b) of E.O. 464 must be invalidated.
No infirmity, however, can be imputed to Section 2(a) as it merely provides
guidelines, binding only on the heads of office mentioned in Section 2(b), on
what is covered by executive privilege. It does not purport to be conclusive on
the other branches of government. It may thus be construed as a mere
expression of opinion by the President regarding the nature and scope of
executive privilege.
Petitioners, however, assert as another ground for invalidating the challenged
order the alleged unlawful delegation of authority to the heads of offices in
Section 2(b). Petitioner Senate of the Philippines, in particular, cites the case of
the United States where, so it claims, only the President can assert executive
privilege to withhold information from Congress.
Section 2(b) in relation to Section 3 virtually provides that, once the head of
office determines that a certain information is privileged, such determination is
presumed to bear the President’s authority and has the effect of prohibiting the
official from appearing before Congress, subject only to the express
pronouncement of the President that it is allowing the appearance of such
official. These provisions thus allow the President to authorize claims of
privilege by mere silence.
Such presumptive authorization, however, is contrary to the exceptional nature
of the privilege. Executive privilege, as already discussed, is recognized with
respect to information the confidential nature of which is crucial to the fulfillment
of the unique role and responsibilities of the executive branch, 105 or in those
instances where exemption from disclosure is necessary to the discharge of
highly important executive responsibilities.106 The doctrine of executive privilege
is thus premised on the fact that certain informations must, as a matter of
necessity, be kept confidential in pursuit of the public interest. The privilege
being, by definition, an exemption from the obligation to disclose information, in
this case to Congress, the necessity must be of such high degree as to
outweigh the public interest in enforcing that obligation in a particular case.
In light of this highly exceptional nature of the privilege, the Court finds it
essential to limit to the President the power to invoke the privilege. She may of
course authorize the Executive Secretary to invoke the privilege on her behalf,
in which case the Executive Secretary must state that the authority is "By order
of the President," which means that he personally consulted with her. The
privilege being an extraordinary power, it must be wielded only by the highest
official in the executive hierarchy. In other words, the President may not
authorize her subordinates to exercise such power. There is even less reason
to uphold such authorization in the instant case where the authorization is not
explicit but by mere silence. Section 3, in relation to Section 2(b), is further
invalid on this score.
It follows, therefore, that when an official is being summoned by Congress on a
matter which, in his own judgment, might be covered by executive privilege, he
must be afforded reasonable time to inform the President or the Executive
Secretary of the possible need for invoking the privilege. This is necessary in
order to provide the President or the Executive Secretary with fair opportunity to
consider whether the matter indeed calls for a claim of executive privilege. If,
after the lapse of that reasonable time, neither the President nor the Executive
Secretary invokes the privilege, Congress is no longer bound to respect the
failure of the official to appear before Congress and may then opt to avail of the
necessary legal means to compel his appearance.
The Court notes that one of the expressed purposes for requiring officials to
secure the consent of the President under Section 3 of E.O. 464 is to ensure
"respect for the rights of public officials appearing in inquiries in aid of
legislation." That such rights must indeed be respected by Congress is an echo
from Article VI Section 21 of the Constitution mandating that "[t]he rights of
persons appearing in or affected by such inquiries shall be respected."
In light of the above discussion of Section 3, it is clear that it is essentially an
authorization for implied claims of executive privilege, for which reason it must
be invalidated. That such authorization is partly motivated by the need to
ensure respect for such officials does not change the infirm nature of the
authorization itself.
Right to Information
E.O 464 is concerned only with the demands of Congress for the appearance
of executive officials in the hearings conducted by it, and not with the demands
of citizens for information pursuant to their right to information on matters of
public concern. Petitioners are not amiss in claiming, however, that what is
involved in the present controversy is not merely the legislative power of
inquiry, but the right of the people to information.
There are, it bears noting, clear distinctions between the right of Congress to
information which underlies the power of inquiry and the right of the people to
information on matters of public concern. For one, the demand of a citizen for
the production of documents pursuant to his right to information does not have
the same obligatory force as a subpoena duces tecum issued by Congress.
Neither does the right to information grant a citizen the power to exact
testimony from government officials. These powers belong only to Congress
and not to an individual citizen.
Thus, while Congress is composed of representatives elected by the people, it
does not follow, except in a highly qualified sense, that in every exercise of its
power of inquiry, the people are exercising their right to information.
To the extent that investigations in aid of legislation are generally conducted in
public, however, any executive issuance tending to unduly limit disclosures of
information in such investigations necessarily deprives the people of
information which, being presumed to be in aid of legislation, is presumed to be
a matter of public concern. The citizens are thereby denied access to
information which they can use in formulating their own opinions on the matter
before Congress — opinions which they can then communicate to their
representatives and other government officials through the various legal means
allowed by their freedom of expression. Thus holds Valmonte v. Belmonte:
It is in the interest of the State that the channels for free political discussion be
maintained to the end that the government may perceive and be responsive to
the people’s will. Yet, this open dialogue can be effective only to the extent that
the citizenry is informed and thus able to formulate its will intelligently. Only
when the participants in the discussion are aware of the issues and have
access to information relating thereto can such bear fruit.107 (Emphasis and
underscoring supplied)
The impairment of the right of the people to information as a consequence of
E.O. 464 is, therefore, in the sense explained above, just as direct as its
violation of the legislature’s power of inquiry.
Implementation of E.O. 464 prior to its publication
While E.O. 464 applies only to officials of the executive branch, it does not
follow that the same is exempt from the need for publication. On the need for
publishing even those statutes that do not directly apply to people in general,
Tañada v. Tuvera states:
The term "laws" should refer to all laws and not only to those of general
application, for strictly speaking all laws relate to the people in general albeit
there are some that do not apply to them directly. An example is a law granting
citizenship to a particular individual, like a relative of President Marcos who was
decreed instant naturalization. It surely cannot be said that such a law does not
affect the public although it unquestionably does not apply directly to all the
people. The subject of such law is a matter of public interest which any member
of the body politic may question in the political forums or, if he is a proper party,
even in courts of justice.108 (Emphasis and underscoring supplied)
Although the above statement was made in reference to statutes, logic dictates
that the challenged order must be covered by the publication requirement. As
explained above, E.O. 464 has a direct effect on the right of the people to
information on matters of public concern. It is, therefore, a matter of public
interest which members of the body politic may question before this Court. Due
process thus requires that the people should have been apprised of this
issuance before it was implemented.
Conclusion
Congress undoubtedly has a right to information from the executive branch
whenever it is sought in aid of legislation. If the executive branch withholds
such information on the ground that it is privileged, it must so assert it and state
the reason therefor and why it must be respected.
The infirm provisions of E.O. 464, however, allow the executive branch to
evade congressional requests for information without need of clearly asserting
a right to do so and/or proffering its reasons therefor. By the mere expedient of
invoking said provisions, the power of Congress to conduct inquiries in aid of
legislation is frustrated. That is impermissible. For
[w]hat republican theory did accomplish…was to reverse the old presumption in
favor of secrecy, based on the divine right of kings and nobles, and replace it
with a presumption in favor of publicity, based on the doctrine of popular
sovereignty. (Underscoring supplied)109
Resort to any means then by which officials of the executive branch could
refuse to divulge information cannot be presumed valid. Otherwise, we shall not
have merely nullified the power of our legislature to inquire into the operations
of government, but we shall have given up something of much greater value –
our right as a people to take part in government.

WHEREFORE, the petitions are PARTLY GRANTED. Sections 2(b) and 3 of

Executive Order No. 464 (series of 2005), "Ensuring Observance of the
Principle of Separation of Powers, Adherence to the Rule on Executive

Privilege and Respect for the Rights of Public Officials Appearing in Legislative
Inquiries in Aid of Legislation Under the Constitution, and For Other Purposes,"
are declared VOID. Sections 1 and 2(a) are, however, VALID.

SO ORDERED.

G.R. No. 167798 April 19, 2006

KILUSANG MAYO UNO, NATIONAL FEDERATION OF LABOR UNIONS-
KILUSANG MAYO UNO (NAFLU-KMU), JOSELITO V. USTAREZ, EMILIA P.
DAPULANG, SALVADOR T. CARRANZA, MARTIN T. CUSTODIO, JR. and
ROQUE M. TAN, Petitioners,
vs.
THE DIRECTOR-GENERAL, NATIONAL ECONOMIC DEVELOPMENT
AUTHORITY, and THE SECRETARY, DEPARTMENT OF BUDGET and
MANAGEMENT, Respondents.
x-----------------------------------x
G.R. No. 167930 April 19, 2006
BAYAN MUNA Representatives SATUR C. OCAMPO, TEODORO A.
CASIÑO, and JOEL G. VIRADOR, GABRIELA WOMEN’S PARTY
Representative LIZA L. MAZA, ANAKPAWIS Representatives RAFAEL V.
MARIANO and CRISPIN B. BELTRAN, Rep. FRANCIS G. ESCUDERO, Rep.
EDUARDO C. ZIALCITA, Rep. LORENZO R. TAÑADA III, DR. CAROL
PAGADUAN-ARAULLO and RENATO M. REYES, JR. of BAYAN, MARIE
HILAO-ENRIQUEZ of KARAPATAN, ANTONIO L. TINIO of ACT,
FERDINAND GAITE of COURAGE, GIOVANNI A. TAPANG of AGHAM,
WILFREDO MARBELLA GARCIA, of KMP, LANA LINABAN of GABRIELA,
AMADO GAT INCIONG, RENATO CONSTANTINO, JR., DEAN PACIFICO H.
AGABIN, SHARON R. DUREMDES of the NATIONAL COUNCIL OF
CHURCHES IN THE PHILIPPINES, and BRO. EDMUNDO L. FERNANDEZ
(FSC) of the ASSOCIATION OF MAJOR RELIGIOUS SUPERIORS OF THE
PHILIPPINES (AMRSP), Petitioners,
vs.
EDUARDO ERMITA, in his capacity as Executive Secretary, ROMULO
NERI, in his capacity as Director-General of the NATIONAL ECONOMIC
and DEVELOPMENT AUTHORITY (NEDA) and the Administrator of the
NATIONAL STATISTICS OFFICE (NSO), Respondents.
DECISION
CARPIO, J.:
This case involves two consolidated petitions for certiorari, prohibition, and
mandamus under Rule 65 of the Rules of Court, seeking the nullification of
Executive Order No. 420 (EO 420) on the ground that it is unconstitutional.
EO 420, issued by President Gloria Macapagal-Arroyo on 13 April 2005, reads:
REQUIRING ALL GOVERNMENT AGENCIES AND GOVERNMENT-OWNED
AND CONTROLLED CORPORATIONS TO STREAMLINE AND HARMONIZE
THEIR IDENTIFICATION (ID) SYSTEMS, AND AUTHORIZING FOR SUCH
PURPOSE THE DIRECTOR-GENERAL, NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY TO IMPLEMENT THE SAME, AND FOR
OTHER PURPOSES
WHEREAS, good governance is a major thrust of this Administration;
WHEREAS, the existing multiple identification systems in government have
created unnecessary and costly redundancies and higher costs to government,
while making it inconvenient for individuals to be holding several identification
cards;
WHEREAS, there is urgent need to streamline and integrate the processes and
issuance of identification cards in government to reduce costs and to provide
greater convenience for those transacting business with government;
WHEREAS, a unified identification system will facilitate private businesses,
enhance the integrity and reliability of government-issued identification cards in
private transactions, and prevent violations of laws involving false names and
identities.
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the
Republic of the Philippines by virtue of the powers vested in me by law, do
hereby direct the following:
Section 1. Adoption of a unified multi-purpose identification (ID) system
for government.1avvphil.net – All government agencies, including
government-owned and controlled corporations, are hereby directed to adopt a
unified multi-purpose ID system to ensure the attainment of the following
objectives:
a. To reduce costs and thereby lessen the financial burden on both the
government and the public brought about by the use of multiple ID cards and
the maintenance of redundant database containing the same or related
information;
b. To ensure greater convenience for those transacting business with the
government and those availing of government services;
c. To facilitate private businesses and promote the wider use of the unified ID
card as provided under this executive order;
d. To enhance the integrity and reliability of government-issued ID cards; and
e. To facilitate access to and delivery of quality and effective government
service.
Section 2. Coverage – All government agencies and government-owned and
controlled corporations issuing ID cards to their members or constituents shall
be covered by this executive order.
Section 3. Data requirement for the unified ID system – The data to be
collected and recorded by the participating agencies shall be limited to the
following:
Name
Home Address
Provided that a corresponding ID number issued by the participating agency
and a common reference number shall form part of the stored ID data and,
together with at least the first five items listed above, including the print of the
right thumbmark, or any of the fingerprints as collected and stored, shall appear
on the face or back of the ID card for visual verification purposes.
Section 4. Authorizing the Director-General, National Economic and
Development Authority, to Harmonize All Government Identification
Systems. – The Director-General, National Economic Development Authority,
is hereby authorized to streamline and harmonize all government ID systems.
Section 5. Functions and responsibilities of the Director-General, National
Economic and Development Authority. – In addition to his organic functions
and responsibilities, the Director-General, National Economic and Development
Authority, shall have the following functions and responsibilities:

Sex a. Adopt within sixty (60) days from the effectivity of this executive order a
unified government ID system containing only such data and features, as
Picture indicated in Section 3 above, to validly establish the identity of the card holder:

Signature b. Enter into agreements with local governments, through their respective
leagues of governors or mayors, the Commission on Elections (COMELEC),
Date of Birth and with other branches or instrumentalities of the government, for the purpose
of ensuring government-wide adoption of and support to this effort to streamline
Place of Birth
the ID systems in government;
Marital Status
b. Call on any other government agency or institution, or create sub–
Names of Parents committees or technical working groups, to provide such assistance as may be
necessary or required for the effective performance of its functions; and
Height
d. Promulgate such rules or regulations as may be necessary in pursuance of
Weight the objectives of this executive order.

Two index fingers and two thumbmarks Section 6. Safeguards. – The Director-General, National Economic and
Development Authority, and the pertinent agencies shall adopt such safeguard
Any prominent distinguishing features like moles and others as may be necessary and adequate to ensure that the right to privacy of an
individual takes precedence over efficient public service delivery. Such
Tax Identification Number (TIN)
safeguards shall, as a minimum, include the following:

a. The data to be recorded and stored, which shall be used only for purposes of
establishing the identity of a person, shall be limited to those specified in
Section 3 of this executive order;
b. In no case shall the collection or compilation of other data in violation of a
person’s right to privacy shall be allowed or tolerated under this order;
c. Stringent systems of access control to data in the identification system shall
be instituted;
d. Data collected and stored for this purpose shall be kept and treated as
strictly confidential and a personal or written authorization of the Owner shall be
required for access and disclosure of data;
e. The identification card to be issued shall be protected by advanced security
features and cryptographic technology; and
f. A written request by the Owner of the identification card shall be required for
any correction or revision of relevant data, or under such conditions as the
participating agency issuing the identification card shall prescribe.
Section 7. Funding. – Such funds as may be recommended by the
Department of Budget and Management shall be provided to carry out the
objectives of this executive order.
Section 8. Repealing clause. – All executive orders or issuances, or portions
thereof, which are inconsistent with this executive order, are hereby revoked,
amended or modified accordingly.
Section 9. Effectivity. – This executive order shall take effect fifteen (15) days
after its publication in two (2) newspapers of general circulation.
DONE in the City of Manila, this 13th day of April, in the year of Our Lord, Two
Thousand and Five.
Thus, under EO 420, the President directs all government agencies and
government-owned and controlled corporations to adopt a uniform data
collection and format for their existing identification (ID) systems.
Petitioners in G.R. No. 167798 allege that EO 420 is unconstitutional because it
constitutes usurpation of legislative functions by the executive branch of the
government. Furthermore, they allege that EO 420 infringes on the citizen’s
right to privacy.1
Petitioners in G.R. No. 167930 allege that EO 420 is void based on the
following grounds:
1. EO 420 is contrary to law. It completely disregards and violates the decision
of this Honorable Court in Ople v. Torres et al., G.R. No. 127685, July 23, 1998.
It also violates RA 8282 otherwise known as the Social Security Act of 1997.
2. The Executive has usurped the legislative power of Congress as she has no
power to issue EO 420. Furthermore, the implementation of the EO will use
public funds not appropriated by Congress for that purpose.
3. EO 420 violates the constitutional provisions on the right to privacy
(i) It allows access to personal confidential data without the owner’s consent.
(ii) EO 420 is vague and without adequate safeguards or penalties for any
violation of its provisions.
(iii) There are no compelling reasons that will legitimize the necessity of EO
420.
4. Granting without conceding that the President may issue EO 420, the
Executive Order was issued without public hearing.
5. EO 420 violates the Constitutional provision on equal protection of laws and
results in the discriminatory treatment of and penalizes those without ID.2
Issues
Essentially, the petitions raise two issues. First, petitioners claim that EO 420 is
a usurpation of legislative power by the President. Second, petitioners claim
that EO 420 infringes on the citizen’s right to privacy.
Respondents question the legal standing of petitioners and the ripeness of the
petitions. Even assuming that petitioners are bereft of legal standing, the Court
considers the issues raised under the circumstances of paramount public
concern or of transcendental significance to the people. The petitions also
present a justiciable controversy ripe for judicial determination because all
government entities currently issuing identification cards are mandated to
implement EO 420, which petitioners claim is patently unconstitutional. Hence,
the Court takes cognizance of the petitions.
The Court’s Ruling
The petitions are without merit.
On the Alleged Usurpation of Legislative Power
Section 2 of EO 420 provides, "Coverage. – All government agencies and
government-owned and controlled corporations issuing ID cards to their
members or constituents shall be covered by this executive order." EO 420
applies only to government entities that issue ID cards as part of their functions
under existing laws. These government entities have already been issuing ID
cards even prior to EO 420. Examples of these government entities are the
GSIS,3 SSS,4 Philhealth,5 Mayor’s Office,6 LTO,7 PRC,8 and similar government
entities.
Section 1 of EO 420 directs these government entities to "adopt a unified multi-
purpose ID system." Thus, all government entities that issue IDs as part of their
functions under existing laws are required to adopt a uniform data collection
and format for their IDs. Section 1 of EO 420 enumerates the purposes of the
uniform data collection and format, namely:
a. To reduce costs and thereby lessen the financial burden on both the
government and the public brought about by the use of multiple ID cards and
the maintenance of redundant database containing the same or related
information;
b. To ensure greater convenience for those transacting business with the
government and those availing of government services;
c. To facilitate private businesses and promote the wider use of the unified ID
card as provided under this executive order;
d. To enhance the integrity and reliability of government-issued ID cards; and
e. To facilitate access to and delivery of quality and effective government
service.
In short, the purposes of the uniform ID data collection and ID format are to
reduce costs, achieve efficiency and reliability, insure compatibility, and provide
convenience to the people served by government entities.
Section 3 of EO 420 limits the data to be collected and recorded under the
uniform ID system to only 14 specific items, namely: (1) Name; (2) Home
Address; (3) Sex; (4) Picture; (5) Signature; (6) Date of Birth; (7) Place of Birth;
(8) Marital Status; (9) Name of Parents; (10) Height; (11) Weight; (12) Two
index fingers and two thumbmarks; (13) Any prominent distinguishing features
like moles or others; and (14) Tax Identification Number.
These limited and specific data are the usual data required for personal
identification by government entities, and even by the private sector. Any one
who applies for or renews a driver’s license provides to the LTO all these 14
specific data.
At present, government entities like LTO require considerably more data from
applicants for identification purposes. EO 420 will reduce the data required to
be collected and recorded in the ID databases of the government entities.
Government entities cannot collect or record data, for identification purposes,
other than the 14 specific data.
Various laws allow several government entities to collect and record data for
their ID systems, either expressly or impliedly by the nature of the functions of
these government entities. Under their existing ID systems, some government
entities collect and record more data than what EO 420 allows. At present, the
data collected and recorded by government entities are disparate, and the IDs
they issue are dissimilar.
In the case of the Supreme Court,9 the IDs that the Court issues to all its
employees, including the Justices, contain 15 specific data, namely: (1) Name;
(2) Picture; (3) Position; (4) Office Code Number; (5) ID Number; (6) Height; (7)
Weight; (8) Complexion; (9) Color of Hair; (10) Blood Type; (11) Right
Thumbmark; (12) Tax Identification Number; (13) GSIS Policy Number; (14)
Name and Address of Person to be Notified in Case of Emergency; and (15)
Signature. If we consider that the picture in the ID can generally also show the
sex of the employee, the Court’s ID actually contains 16 data.
In contrast, the uniform ID format under Section 3 of EO 420 requires only "the
first five items listed" in Section 3, plus the fingerprint, agency number and the
common reference number, or only eight specific data. Thus, at present, the
Supreme Court’s ID contains far more data than the proposed uniform ID for
government entities under EO 420. The nature of the data contained in the
Supreme Court ID is also far more financially sensitive, specifically the Tax
Identification Number.
Making the data collection and recording of government entities unified, and
making their ID formats uniform, will admittedly achieve substantial benefits.
These benefits are savings in terms of procurement of equipment and supplies,
compatibility in systems as to hardware and software, ease of verification and
thus increased reliability of data, and the user-friendliness of a single ID format
for all government entities.
There is no dispute that government entities can individually limit the collection
and recording of their data to the 14 specific items in Section 3 of EO 420.
There is also no dispute that these government entities can individually adopt
the ID format as specified in Section 3 of EO 420. Such an act is certainly
within the authority of the heads or governing boards of the government entities
that are already authorized under existing laws to issue IDs.
A unified ID system for all these government entities can be achieved in either
of two ways. First, the heads of these existing government entities can enter
into a memorandum of agreement making their systems uniform. If the
government entities can individually adopt a format for their own ID pursuant to
their regular functions under existing laws, they can also adopt by mutual
agreement a uniform ID format, especially if the uniform format will result in
substantial savings, greater efficiency, and optimum compatibility. This is purely
an administrative matter, and does not involve the exercise of legislative power.
Second, the President may by executive or administrative order direct the
government entities under the Executive department to adopt a uniform ID data
collection and format. Section 17, Article VII of the 1987 Constitution provides
that the "President shall have control of all executive departments, bureaus and
offices." The same Section also mandates the President to "ensure that the
laws be faithfully executed."
Certainly, under this constitutional power of control the President can direct all
government entities, in the exercise of their functions under existing laws, to
adopt a uniform ID data collection and ID format to achieve savings, efficiency,
reliability, compatibility, and convenience to the public. The President’s
constitutional power of control is self-executing and does not need any
implementing legislation.
Of course, the President’s power of control is limited to the Executive branch of
government and does not extend to the Judiciary or to the independent
constitutional commissions. Thus, EO 420 does not apply to the Judiciary, or to
the COMELEC which under existing laws is also authorized to issue voter’s ID
cards.10 This only shows that EO 420 does not establish a national ID system
because legislation is needed to establish a single ID system that is compulsory
for all branches of government.
The Constitution also mandates the President to ensure that the laws are
faithfully executed. There are several laws mandating government entities to
reduce costs, increase efficiency, and in general, improve public services.11 The
adoption of a uniform ID data collection and format under EO 420 is designed
to reduce costs, increase efficiency, and in general, improve public services.
Thus, in issuing EO 420, the President is simply performing the constitutional
duty to ensure that the laws are faithfully executed.
Clearly, EO 420 is well within the constitutional power of the President to
promulgate. The President has not usurped legislative power in issuing EO
420. EO 420 is an exercise of Executive power – the President’s constitutional
power of control over the Executive department. EO 420 is also compliance by
the President of the constitutional duty to ensure that the laws are faithfully
executed.
Legislative power is the authority to make laws and to alter or repeal them. In
issuing EO 420, the President did not make, alter or repeal any law but merely
implemented and executed existing laws. EO 420 reduces costs, as well as
insures efficiency, reliability, compatibility and user-friendliness in the
implementation of current ID systems of government entities under existing
laws. Thus, EO 420 is simply an executive issuance and not an act of
legislation.
The act of issuing ID cards and collecting the necessary personal data for
imprinting on the ID card does not require legislation. Private employers
routinely issue ID cards to their employees. Private and public schools also
routinely issue ID cards to their students. Even private clubs and associations
issue ID cards to their members. The purpose of all these ID cards is simply to
insure the proper identification of a person as an employee, student, or member
of a club. These ID cards, although imposed as a condition for exercising a
privilege, are voluntary because a person is not compelled to be an employee,
student or member of a club.
What require legislation are three aspects of a government maintained ID card
system. First, when the implementation of an ID card system requires a special
appropriation because there is no existing appropriation for such purpose.
Second, when the ID card system is compulsory on all branches of
government, including the independent constitutional commissions, as well as
compulsory on all citizens whether they have a use for the ID card or not. Third,
when the ID card system requires the collection and recording of personal data
beyond what is routinely or usually required for such purpose, such that the
citizen’s right to privacy is infringed.
In the present case, EO 420 does not require any special appropriation
because the existing ID card systems of government entities covered by EO
420 have the proper appropriation or funding. EO 420 is not compulsory on all
branches of government and is not compulsory on all citizens. EO 420 requires
a very narrow and focused collection and recording of personal data while
safeguarding the confidentiality of such data. In fact, the data collected and
recorded under EO 420 are far less than the data collected and recorded under
the ID systems existing prior to EO 420.
EO 420 does not establish a national ID card system. EO 420 does not compel
all citizens to have an ID card. EO 420 applies only to government entities that
under existing laws are already collecting data and issuing ID cards as part of
their governmental functions. Every government entity that presently issues an
ID card will still issue its own ID card under its own name. The only difference is
that the ID card will contain only the five data specified in Section 3 of EO 420,
plus the fingerprint, the agency ID number, and the common reference number
which is needed for cross-verification to ensure integrity and reliability of
identification.
This Court should not interfere how government entities under the Executive
department should undertake cost savings, achieve efficiency in operations,
insure compatibility of equipment and systems, and provide user-friendly
service to the public. The collection of ID data and issuance of ID cards are
day-to-day functions of many government entities under existing laws. Even the
Supreme Court has its own ID system for employees of the Court and all first
and second level courts. The Court is even trying to unify its ID system with
those of the appellate courts, namely the Court of Appeals, Sandiganbayan and
Court of Tax Appeals.
There is nothing legislative about unifying existing ID systems of all courts
within the Judiciary. The same is true for government entities under the
Executive department. If government entities under the Executive department
decide to unify their existing ID data collection and ID card issuance systems to
achieve savings, efficiency, compatibility and convenience, such act does not
involve the exercise of any legislative power. Thus, the issuance of EO 420
does not constitute usurpation of legislative power.
On the Alleged Infringement of the Right to Privacy
All these years, the GSIS, SSS, LTO, Philhealth and other government entities
have been issuing ID cards in the performance of their governmental functions.
There have been no complaints from citizens that the ID cards of these
government entities violate their right to privacy. There have also been no
complaints of abuse by these government entities in the collection and
recording of personal identification data.
In fact, petitioners in the present cases do not claim that the ID systems of
government entities prior to EO 420 violate their right to privacy. Since
petitioners do not make such claim, they even have less basis to complain
against the unified ID system under EO 420. The data collected and stored for
the unified ID system under EO 420 will be limited to only 14 specific data, and
the ID card itself will show only eight specific data. The data collection,
recording and ID card system under EO 420 will even require less data
collected, stored and revealed than under the disparate systems prior to EO
420.
Prior to EO 420, government entities had a free hand in determining the kind,
nature and extent of data to be collected and stored for their ID systems. Under
EO 420, government entities can collect and record only the 14 specific data
mentioned in Section 3 of EO 420. In addition, government entities can show in
their ID cards only eight of these specific data, seven less data than what the
Supreme Court’s ID shows.
Also, prior to EO 420, there was no executive issuance to government entities
prescribing safeguards on the collection, recording, and disclosure of personal
identification data to protect the right to privacy. Now, under Section 5 of EO
420, the following safeguards are instituted:
a. The data to be recorded and stored, which shall be used only for purposes of
establishing the identity of a person, shall be limited to those specified in
Section 3 of this executive order;
b. In no case shall the collection or compilation of other data in violation of a
person’s right to privacy be allowed or tolerated under this order;
c. Stringent systems of access control to data in the identification system shall
be instituted;
d. Data collected and stored for this purpose shall be kept and treated as
strictly confidential and a personal or written authorization of the Owner shall be
required for access and disclosure of data;
e. The identification card to be issued shall be protected by advanced security
features and cryptographic technology;
f. A written request by the Owner of the identification card shall be required for
any correction or revision of relevant data, or under such conditions as the
participating agency issuing the identification card shall prescribe.
On its face, EO 420 shows no constitutional infirmity because it even narrowly
limits the data that can be collected, recorded and shown compared to the
existing ID systems of government entities. EO 420 further provides strict
safeguards to protect the confidentiality of the data collected, in contrast to the
prior ID systems which are bereft of strict administrative safeguards.
The right to privacy does not bar the adoption of reasonable ID systems by
government entities. Some one hundred countries have compulsory national ID
systems, including democracies such as Spain, France, Germany, Belgium,
Greece, Luxembourg, and Portugal. Other countries which do not have national
ID systems, like the United States, Canada, Australia, New Zealand, Ireland,
the Nordic Countries and Sweden, have sectoral cards for health, social or
other public services.12 Even with EO 420, the Philippines will still fall under the
countries that do not have compulsory national ID systems but allow only
sectoral cards for social security, health services, and other specific purposes.
Without a reliable ID system, government entities like GSIS, SSS, Philhealth,
and LTO cannot perform effectively and efficiently their mandated functions
under existing laws. Without a reliable ID system, GSIS, SSS, Philhealth and
similar government entities stand to suffer substantial losses arising from false
names and identities. The integrity of the LTO’s licensing system will suffer in
the absence of a reliable ID system.
The dissenting opinion cites three American decisions on the right to privacy,
namely, Griswold v. Connecticut,13 U.S. Justice Department v. Reporters
Committee for Freedom of the Press,14 and Whalen v. Roe.15 The last two
decisions actually support the validity of EO 420, while the first is inapplicable
to the present case.
In Griswold, the U.S. Supreme Court declared unconstitutional a state law that
prohibited the use and distribution of contraceptives because enforcement of
the law would allow the police entry into the bedrooms of married couples.
Declared the U.S. Supreme Court: "Would we allow the police to search the
sacred precincts of the marital bedrooms for telltale signs of the use of
contraceptives? The very idea is repulsive to the notions of privacy surrounding
the marriage relationship." Because the facts and the issue involved in Griswold
are materially different from the present case, Griswold has no persuasive
bearing on the present case.
In U.S. Justice Department, the issue was not whether the State could collect
and store information on individuals from public records nationwide but whether
the State could withhold such information from the press. The premise of the
issue in U.S. Justice Department is that the State can collect and store in a
central database information on citizens gathered from public records across
the country. In fact, the law authorized the Department of Justice to collect and
preserve fingerprints and other criminal identification records nationwide. The
law also authorized the Department of Justice to exchange such information
with "officials of States, cities and other institutions." The Department of Justice
treated such information as confidential. A CBS news correspondent and the
Reporters Committee demanded the criminal records of four members of a
family pursuant to the Freedom of Information Act. The U.S. Supreme Court
ruled that the Freedom of Information Act expressly exempts release of
information that would "constitute an unwarranted invasion of personal privacy,"
and the information demanded falls under that category of exempt information.
With the exception of the 8 specific data shown on the ID card, the personal
data collected and recorded under EO 420 are treated as "strictly confidential"
under Section 6(d) of EO 420. These data are not only strictly confidential but
also personal matters. Section 7, Article III of the 1987 Constitution grants the
"right of the people to information on matters of public concern." Personal
matters are exempt or outside the coverage of the people’s right to information
on matters of public concern. The data treated as "strictly confidential" under
EO 420 being private matters and not matters of public concern, these data
cannot be released to the public or the press. Thus, the ruling in U.S. Justice
Department does not collide with EO 420 but actually supports the validity EO
420.
Whalen v. Roe is the leading American case on the constitutional protection for
control over information. In Whalen, the U.S. Supreme Court upheld the validity
of a New York law that required doctors to furnish the government reports
identifying patients who received prescription drugs that have a potential for
abuse. The government maintained a central computerized database
containing the names and addresses of the patients, as well as the identity of
the prescribing doctors. The law was assailed because the database allegedly
infringed the right to privacy of individuals who want to keep their personal
matters confidential. The U.S. Supreme Court rejected the privacy claim, and
declared:
Disclosures of private medical information to doctors, to hospital personnel, to
insurance companies, and to public health agencies are often an essential part
of modern medical practice even when the disclosure may reflect unfavorably
on the character of the patient. Requiring such disclosures to representatives of
the State having responsibility for the health of the community does not
automatically amount to an impermissible invasion of privacy. (Emphasis
supplied)
Compared to the personal medical data required for disclosure to the New York
State in Whalen, the 14 specific data required for disclosure to the Philippine
government under EO 420 are far less sensitive and far less personal. In fact,
the 14 specific data required under EO 420 are routine data for ID systems,
unlike the sensitive and potentially embarrassing medical records of patients
taking prescription drugs. Whalen, therefore, carries persuasive force for
upholding the constitutionality of EO 420 as non-violative of the right to privacy.
Subsequent U.S. Supreme Court decisions have reiterated Whalen. In Planned
Parenthood of Central Missouri v. Danforth,16 the U.S. Supreme Court upheld
the validity of a law that required doctors performing abortions to fill up forms,
maintain records for seven years, and allow the inspection of such records by
public health officials. The U.S. Supreme Court ruled that "recordkeeping and
reporting requirements that are reasonably directed to the preservation of
maternal health and that properly respect a patient’s confidentiality and privacy
are permissible."
Again, in Planned Parenthood of Southeastern Pennsylvania v. Casey,17 the
U.S. Supreme Court upheld a law that required doctors performing an abortion
to file a report to the government that included the doctor’s name, the woman’s
age, the number of prior pregnancies and abortions that the woman had, the
medical complications from the abortion, the weight of the fetus, and the marital
status of the woman. In case of state-funded institutions, the law made such
information publicly available. In Casey, the U.S. Supreme Court stated: "The
collection of information with respect to actual patients is a vital element of
medical research, and so it cannot be said that the requirements serve no
purpose other than to make abortion more difficult."
Compared to the disclosure requirements of personal data that the U.S.
Supreme Court have upheld in Whalen, Danforth and Casey as not violative of
the right to privacy, the disclosure requirements under EO 420 are far benign
and cannot therefore constitute violation of the right to privacy. EO 420 requires
disclosure of 14 personal data that are routine for ID purposes, data that cannot
possibly embarrass or humiliate anyone.
Petitioners have not shown how EO 420 will violate their right to privacy.
Petitioners cannot show such violation by a mere facial examination of EO 420
because EO 420 narrowly draws the data collection, recording and exhibition
while prescribing comprehensive safeguards. Ople v. Torres18 is not authority to
hold that EO 420 violates the right to privacy because in that case the assailed
executive issuance, broadly drawn and devoid of safeguards, was annulled
solely on the ground that the subject matter required legislation. As then
Associate Justice, now Chief Justice Artemio V. Panganiban noted in his
concurring opinion in Ople v. Torres, "The voting is decisive only on the need
for appropriate legislation, and it is only on this ground that the petition is
granted by this Court."
EO 420 applies only to government entities that already maintain ID systems
and issue ID cards pursuant to their regular functions under existing laws. EO
420 does not grant such government entities any power that they do not
already possess under existing laws. In contrast, the assailed executive
issuance in Ople v. Torres sought to establish a "National Computerized
Identification Reference System,"19 a national ID system that did not exist prior
to the assailed executive issuance. Obviously, a national ID card system
requires legislation because it creates a new national data collection and card
issuance system where none existed before.
In the present case, EO 420 does not establish a national ID system but makes
the existing sectoral card systems of government entities like GSIS, SSS,
Philhealth and LTO less costly, more efficient, reliable and user-friendly to the
public. Hence, EO 420 is a proper subject of executive issuance under the
President’s constitutional power of control over government entities in the
Executive department, as well as under the President’s constitutional duty to
ensure that laws are faithfully executed.
WHEREFORE, the petitions are DISMISSED. Executive Order No. 420 is
declared VALID.
SO ORDERED.
G.R. No. 166429 December 19, 2005
REPUBLIC OF THE PHILIPPINES, Represented by Executive Secretary
Eduardo R. Ermita, the
DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS (DOTC),
and the
MANILA INTERNATIONAL AIRPORT AUTHORITY (MIAA), Petitioners,
vs.
HON. HENRICK F. GINGOYON, In his capacity as Presiding Judge of the
Regional Trial Court, Branch 117, Pasay City and
PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., Respondents
TINGA, J.:
The Ninoy Aquino International Airport Passenger Terminal III (NAIA 3) was
conceived, designed and constructed to serve as the country's show window to
the world. Regrettably, it has spawned controversies. Regrettably too, despite
the apparent completion of the terminal complex way back it has not yet been
operated. This has caused immeasurable economic damage to the country, not
to mention its deplorable discredit in the international community.
In the first case that reached this Court, Agan v. PIATCO,1 the contracts which
the Government had with the contractor were voided for being contrary to law
and public policy. The second case now before the Court involves the matter of
just compensation due the contractor for the terminal complex it built. We
decide the case on the basis of fairness, the same norm that pervades both the
Court's 2004 Resolution in the first case and the latest expropriation law.
The present controversy has its roots with the promulgation of the Court's
decision in Agan v. PIATCO,2 promulgated in 2003 (2003 Decision). This
decision nullified the "Concession Agreement for the Build-Operate-and-
Transfer Arrangement of the Ninoy Aquino International Airport Passenger
Terminal III" entered into between the Philippine Government (Government)
and the Philippine International Air Terminals Co., Inc. (PIATCO), as well as the
amendments and supplements thereto. The agreement had authorized
PIATCO to build a new international airport terminal (NAIA 3), as well as a
franchise to operate and maintain the said terminal during the concession
period of 25 years. The contracts were nullified, among others, that Paircargo
Consortium, predecessor of PIATCO, did not possess the requisite financial
capacity when it was awarded the NAIA 3 contract and that the agreement was
contrary to public policy.3
At the time of the promulgation of the 2003 Decision, the NAIA 3 facilities had
already been built by PIATCO and were nearing completion.4 However, the
ponencia was silent as to the legal status of the NAIA 3 facilities following the
nullification of the contracts, as well as whatever rights of PIATCO for
reimbursement for its expenses in the construction of the facilities. Still, in his
Separate Opinion, Justice Panganiban, joined by Justice Callejo, declared as
follows:
Should government pay at all for reasonable expenses incurred in the
construction of the Terminal? Indeed it should, otherwise it will be unjustly
enriching itself at the expense of Piatco and, in particular, its funders,
contractors and investors - both local and foreign. After all, there is no question
that the State needs and will make use of Terminal III, it being part and parcel
of the critical infrastructure and transportation-related programs of government.5
PIATCO and several respondents-intervenors filed their respective motions for
the reconsideration of the 2003 Decision. These motions were denied by the
Court in its Resolution dated 21 January 2004 (2004 Resolution).6 However, the
Court this time squarely addressed the issue of the rights of PIATCO to refund,
compensation or reimbursement for its expenses in the construction of the
NAIA 3 facilities. The holding of the Court on this crucial point follows:
This Court, however, is not unmindful of the reality that the structures
comprising the NAIA IPT III facility are almost complete and that funds have
been spent by PIATCO in their construction. For the government to take over
the said facility, it has to compensate respondent PIATCO as builder of the said
structures. The compensation must be just and in accordance with law and
equity for the government can not unjustly enrich itself at the expense of
PIATCO and its investors.7
After the promulgation of the rulings in Agan, the NAIA 3 facilities have
remained in the possession of PIATCO, despite the avowed intent of the
Government to put the airport terminal into immediate operation. The
Government and PIATCO conducted several rounds of negotiation regarding
the NAIA 3 facilities.8 It also appears that arbitral proceedings were commenced
before the International Chamber of Commerce International Court of
Arbitration and the International Centre for the Settlement of Investment
Disputes,9 although the Government has raised jurisdictional questions before
those two bodies.10
Then, on 21 December 2004, the Government11 filed a Complaint for
expropriation with the Pasay City Regional Trial Court (RTC), together with an
Application for Special Raffle seeking the immediate holding of a special raffle.
The Government sought upon the filing of the complaint the issuance of a writ
of possession authorizing it to take immediate possession and control over the
NAIA 3 facilities.
The Government also declared that it had deposited the amount of
P3,002,125,000.0012 (3 Billion)13 in Cash with the Land Bank of the Philippines,
representing the NAIA 3 terminal's assessed value for taxation purposes.14
The case15 was raffled to Branch 117 of the Pasay City RTC, presided by
respondent judge Hon. Henrick F. Gingoyon (Hon. Gingoyon). On the same
day that the Complaint was filed, the RTC issued an Order16 directing the
issuance of a writ of possession to the Government, authorizing it to "take or
enter upon the possession" of the NAIA 3 facilities. Citing the case of City of
Manila v. Serrano,17 the RTC noted that it had the ministerial duty to issue the
writ of possession upon the filing of a complaint for expropriation sufficient in
form and substance, and upon deposit made by the government of the amount
equivalent to the assessed value of the property subject to expropriation. The
RTC found these requisites present, particularly noting that "[t]he case record
shows that [the Government has] deposited the assessed value of the [NAIA 3
facilities] in the Land Bank of the Philippines, an authorized depositary, as
shown by the certification attached to their complaint." Also on the same day,
the RTC issued a Writ of Possession. According to PIATCO, the Government
was able to take possession over the NAIA 3 facilities immediately after the
Writ of Possession was issued.18
However, on 4 January 2005, the RTC issued another Order designed to
supplement its 21 December 2004 Order and the Writ of Possession. In the 4
January 2005 Order, now assailed in the present petition, the RTC noted that
its earlier issuance of its writ of possession was pursuant to Section 2, Rule 67
of the 1997 Rules of Civil Procedure. However, it was observed that Republic
Act No. 8974 (Rep. Act No. 8974), otherwise known as "An Act to Facilitate the
Acquisition of Right-of-Way, Site or Location for National Government
Infrastructure Projects and For Other Purposes" and its Implementing Rules
and Regulations (Implementing Rules) had amended Rule 67 in many respects.
There are at least two crucial differences between the respective procedures
under Rep. Act No. 8974 and Rule 67. Under the statute, the Government is
required to make immediate payment to the property owner upon the filing of
the complaint to be entitled to a writ of possession, whereas in Rule 67, the
Government is required only to make an initial deposit with an authorized
government depositary. Moreover, Rule 67 prescribes that the initial deposit be
equivalent to the assessed value of the property for purposes of taxation, unlike
Rep. Act No. 8974 which provides, as the relevant standard for initial
compensation, the market value of the property as stated in the tax declaration
or the current relevant zonal valuation of the Bureau of Internal Revenue (BIR),
whichever is higher, and the value of the improvements and/or structures using
the replacement cost method.
Accordingly, on the basis of Sections 4 and 7 of Rep. Act No. 8974 and Section
10 of the Implementing Rules, the RTC made key qualifications to its earlier
issuances. First, it directed the Land Bank of the Philippines, Baclaran Branch
(LBP-Baclaran), to immediately release the amount of US$62,343,175.77 to
PIATCO, an amount which the RTC characterized as that which the
Government "specifically made available for the purpose of this expropriation;"
and such amount to be deducted from the amount of just compensation due
PIATCO as eventually determined by the RTC. Second, the Government was
directed to submit to the RTC a Certificate of Availability of Funds signed by
authorized officials to cover the payment of just compensation. Third, the
Government was directed "to maintain, preserve and safeguard" the NAIA 3
facilities or "perform such as acts or activities in preparation for their direct
operation" of the airport terminal, pending expropriation proceedings and full
payment of just compensation. However, the Government was prohibited "from
performing acts of ownership like awarding concessions or leasing any part of
[NAIA 3] to other parties."19
The very next day after the issuance of the assailed 4 January 2005 Order, the
Government filed an Urgent Motion for Reconsideration, which was set for
hearing on 10 January 2005. On 7 January 2005, the RTC issued another
Order, the second now assailed before this Court, which appointed three (3)
Commissioners to ascertain the amount of just compensation for the NAIA 3
Complex. That same day, the Government filed a Motion for Inhibition of Hon.
Gingoyon.
The RTC heard the Urgent Motion for Reconsideration and Motion for Inhibition
on 10 January 2005. On the same day, it denied these motions in an Omnibus
Order dated 10 January 2005. This is the third Order now assailed before this
Court. Nonetheless, while the Omnibus Order affirmed the earlier dispositions
in the 4 January 2005 Order, it excepted from affirmance "the superfluous part
of the Order prohibiting the plaintiffs from awarding concessions or leasing any
part of [NAIA 3] to other parties."20
Thus, the present Petition for Certiorari and Prohibition under Rule 65 was filed
on 13 January 2005. The petition prayed for the nullification of the RTC orders
dated 4 January 2005, 7 January 2005, and 10 January 2005, and for the
inhibition of Hon. Gingoyon from taking further action on the expropriation case.
A concurrent prayer for the issuance of a temporary restraining order and
preliminary injunction was granted by this Court in a Resolution dated 14
January 2005.21
The Government, in imputing grave abuse of discretion to the acts of Hon.
Gingoyon, raises five general arguments, to wit:
(i) that Rule 67, not Rep. Act No. 8974, governs the present expropriation
proceedings;
(ii) that Hon. Gingoyon erred when he ordered the immediate release of the
amount of US$62.3 Million to PIATCO considering that the assessed value as
alleged in the complaint was only P3 Billion;
(iii) that the RTC could not have prohibited the Government from enjoining the
performance of acts of ownership;
(iv) that the appointment of the three commissioners was erroneous; and
(v) that Hon. Gingoyon should be compelled to inhibit himself from the
expropriation case.22
Before we delve into the merits of the issues raised by the Government, it is
essential to consider the crucial holding of the Court in its 2004 Resolution in
Agan, which we repeat below:
This Court, however, is not unmindful of the reality that the structures
comprising the NAIA IPT III facility are almost complete and that funds have
been spent by PIATCO in their construction. For the government to take over
the said facility, it has to compensate respondent PIATCO as builder of the said
structures. The compensation must be just and in accordance with law and
equity for the government can not unjustly enrich itself at the expense of
PIATCO and its investors.23
This pronouncement contains the fundamental premises which permeate this
decision of the Court. Indeed, Agan, final and executory as it is, stands as
governing law in this case, and any disposition of the present petition must
conform to the conditions laid down by the Court in its 2004 Resolution.
The 2004 Resolution Which Is Law of This Case Generally Permits
Expropriation
The pronouncement in the 2004 Resolution is especially significant to this case
in two aspects, namely: (i) that PIATCO must receive payment of just
compensation determined in accordance with law and equity; and (ii) that the
government is barred from taking over NAIA 3 until such just compensation is
paid. The parties cannot be allowed to evade the directives laid down by this
Court through any mode of judicial action, such as the complaint for eminent
domain.
It cannot be denied though that the Court in the 2004 Resolution prescribed
mandatory guidelines which the Government must observe before it could
acquire the NAIA 3 facilities. Thus, the actions of respondent judge under
review, as well as the arguments of the parties must, to merit affirmation, pass
the threshold test of whether such propositions are in accord with the 2004
Resolution.
The Government does not contest the efficacy of this pronouncement in the
2004 Resolution,24 thus its application to the case at bar is not a matter of
controversy. Of course, questions such as what is the standard of "just
compensation" and which particular laws and equitable principles are
applicable, remain in dispute and shall be resolved forthwith.
The Government has chosen to resort to expropriation, a remedy available
under the law, which has the added benefit of an integrated process for the
determination of just compensation and the payment thereof to PIATCO. We
appreciate that the case at bar is a highly unusual case, whereby the
Government seeks to expropriate a building complex constructed on land which
the State already owns.25 There is an inherent illogic in the resort to eminent
domain on property already owned by the State. At first blush, since the State
already owns the property on which NAIA 3 stands, the proper remedy should
be akin to an action for ejectment.
However, the reason for the resort by the Government to expropriation
proceedings is understandable in this case. The 2004 Resolution, in requiring
the payment of just compensation prior to the takeover by the Government of
NAIA 3, effectively precluded it from acquiring possession or ownership of the
NAIA 3 through the unilateral exercise of its rights as the owner of the ground
on which the facilities stood. Thus, as things stood after the 2004 Resolution,
the right of the Government to take over the NAIA 3 terminal was
preconditioned by lawful order on the payment of just compensation to PIATCO
as builder of the structures.
The determination of just compensation could very well be agreed upon by the
parties without judicial intervention, and it appears that steps towards that
direction had been engaged in. Still, ultimately, the Government resorted to its
inherent power of eminent domain through expropriation proceedings. Is
eminent domain appropriate in the first place, with due regard not only to the
law on expropriation but also to the Court's 2004 Resolution in Agan?
The right of eminent domain extends to personal and real property, and the
NAIA 3 structures, adhered as they are to the soil, are considered as real
property.26 The public purpose for the expropriation is also beyond dispute. It
should also be noted that Section 1 of Rule 67 (on Expropriation) recognizes
the possibility that the property sought to be expropriated may be titled in the
name of the Republic of the Philippines, although occupied by private
individuals, and in such case an averment to that effect should be made in the
complaint. The instant expropriation complaint did aver that the NAIA 3
complex "stands on a parcel of land owned by the Bases Conversion
Development Authority, another agency of [the Republic of the Philippines]."27
Admittedly, eminent domain is not the sole judicial recourse by which the
Government may have acquired the NAIA 3 facilities while satisfying the
requisites in the 2004 Resolution. Eminent domain though may be the most
effective, as well as the speediest means by which such goals may be
accomplished. Not only does it enable immediate possession after satisfaction
of the requisites under the law, it also has a built-in procedure through which
just compensation may be ascertained. Thus, there should be no question as to
the propriety of eminent domain proceedings in this case.
Still, in applying the laws and rules on expropriation in the case at bar, we are
impelled to apply or construe these rules in accordance with the Court's
prescriptions in the 2004 Resolution to achieve the end effect that the
Government may validly take over the NAIA 3 facilities. Insofar as this case is
concerned, the 2004 Resolution is effective not only as a legal precedent, but
as the source of rights and prescriptions that must be guaranteed, if not
enforced, in the resolution of this petition. Otherwise, the integrity and efficacy
of the rulings of this Court will be severely diminished.
It is from these premises that we resolve the first question, whether Rule 67 of
the Rules of Court or Rep. Act No. 8974 governs the expropriation proceedings
in this case.
Application of Rule 67 Violates the 2004 Agan Resolution
The Government insists that Rule 67 of the Rules of Court governs the
expropriation proceedings in this case to the exclusion of all other laws. On the
other hand, PIATCO claims that it is Rep. Act No. 8974 which does apply.
Earlier, we had adverted to the basic differences between the statute and the
procedural rule. Further elaboration is in order.
Rule 67 outlines the procedure under which eminent domain may be exercised
by the Government. Yet by no means does it serve at present as the solitary
guideline through which the State may expropriate private property. For
example, Section 19 of the Local Government Code governs as to the exercise
by local government units of the power of eminent domain through an enabling
ordinance. And then there is Rep. Act No. 8974, which covers expropriation
proceedings intended for national government infrastructure projects.
Rep. Act No. 8974, which provides for a procedure eminently more favorable to
the property owner than Rule 67, inescapably applies in instances when the
national government expropriates property "for national government
infrastructure projects."28 Thus, if expropriation is engaged in by the national
government for purposes other than national infrastructure projects, the
assessed value standard and the deposit mode prescribed in Rule 67 continues
to apply.
Under both Rule 67 and Rep. Act No. 8974, the Government commences
expropriation proceedings through the filing of a complaint. Unlike in the case of
local governments which necessitate an authorizing ordinance before
expropriation may be accomplished, there is no need under Rule 67 or Rep.
Act No. 8974 for legislative authorization before the Government may proceed
with a particular exercise of eminent domain. The most crucial difference
between Rule 67 and Rep. Act No. 8974 concerns the particular essential step
the Government has to undertake to be entitled to a writ of possession.
The first paragraph of Section 2 of Rule 67 provides:
SEC. 2. Entry of plaintiff upon depositing value with authorized government
depository. - Upon the filing of the complaint or at any time thereafter and after
due notice to the defendant, the plaintiff shall have the right to take or enter
upon the possession of the real property involved if he deposits with the
authorized government depositary an amount equivalent to the assessed value
of the property for purposes of taxation to be held by such bank subject to the
orders of the court. Such deposit shall be in money, unless in lieu thereof the
court authorizes the deposit of a certificate of deposit of a government bank of
the Republic of the Philippines payable on demand to the authorized
government depositary.
In contrast, Section 4 of Rep. Act No. 8974 relevantly states:
SEC. 4. Guidelines for Expropriation Proceedings.- Whenever it is necessary to
acquire real property for the right-of-way, site or location for any national
government infrastructure project through expropriation, the appropriate
proceedings before the proper court under the following guidelines:
a) Upon the filing of the complaint, and after due notice to the defendant, the
implementing agency shall immediately pay the owner of the property the
amount equivalent to the sum of (1) one hundred percent (100%) of the value
of the property based on the current relevant zonal valuation of the Bureau of
Internal Revenue (BIR); and (2) the value of the improvements and/or
structures as determined under Section 7 hereof; . . .
c) In case the completion of a government infrastructure project is of utmost
urgency and importance, and there is no existing valuation of the area
concerned, the implementing agency shall immediately pay the owner of the
property its proffered value taking into consideration the standards prescribed
in Section 5 hereof.
Upon completion with the guidelines abovementioned, the court shall
immediately issue to the implementing agency an order to take possession of
the property and start the implementation of the project.
Before the court can issue a Writ of Possession, the implementing agency shall
present to the court a certificate of availability of funds from the proper official
concerned. . . .
As can be gleaned from the above-quoted texts, Rule 67 merely requires the
Government to deposit with an authorized government depositary the assessed
value of the property for expropriation for it to be entitled to a writ of
possession. On the other hand, Rep. Act No. 8974 requires that the
Government make a direct payment to the property owner before the writ may
issue. Moreover, such payment is based on the zonal valuation of the BIR in
the case of land, the value of the improvements or structures under the
replacement cost method,29 or if no such valuation is available and in cases of
utmost urgency, the proffered value of the property to be seized.
It is quite apparent why the Government would prefer to apply Rule 67 in lieu of
Rep. Act No. 8974. Under Rule 67, it would not be obliged to immediately pay
any amount to PIATCO before it can obtain the writ of possession since all it
need do is deposit the amount equivalent to the assessed value with an
authorized government depositary. Hence, it devotes considerable effort to
point out that Rep. Act No. 8974 does not apply in this case, notwithstanding
the undeniable reality that NAIA 3 is a national government project. Yet, these
efforts fail, especially considering the controlling effect of the 2004 Resolution in
Agan on the adjudication of this case.
It is the finding of this Court that the staging of expropriation proceedings in this
case with the exclusive use of Rule 67 would allow for the Government to take
over the NAIA 3 facilities in a fashion that directly rebukes our 2004 Resolution
in Agan. This Court cannot sanction deviation from its own final and executory
orders.
Section 2 of Rule 67 provides that the State "shall have the right to take or
enter upon the possession of the real property involved if [the plaintiff] deposits
with the authorized government depositary an amount equivalent to the
assessed value of the property for purposes of taxation to be held by such bank
subject to the orders of the court."30 It is thus apparent that under the provision,
all the Government need do to obtain a writ of possession is to deposit the
amount equivalent to the assessed value with an authorized government
depositary.
Would the deposit under Section 2 of Rule 67 satisfy the requirement laid down
in the 2004 Resolution that "[f]or the government to take over the said facility, it
has to compensate respondent PIATCO as builder of the said structures"?
Evidently not.
If Section 2 of Rule 67 were to apply, PIATCO would be enjoined from receiving
a single centavo as just compensation before the Government takes over the
NAIA 3 facility by virtue of a writ of possession. Such an injunction squarely
contradicts the letter and intent of the 2004 Resolution. Hence, the position of
the Government sanctions its own disregard or violation the prescription laid
down by this Court that there must first be just compensation paid to PIATCO
before the Government may take over the NAIA 3 facilities.
Thus, at the very least, Rule 67 cannot apply in this case without violating the
2004 Resolution. Even assuming that Rep. Act No. 8974 does not govern in
this case, it does not necessarily follow that Rule 67 should then apply. After all,
adherence to the letter of Section 2, Rule 67 would in turn violate the Court's
requirement in the 2004 Resolution that there must first be payment of just
compensation to PIATCO before the Government may take over the property.
It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit
under Rule 67 with the scheme of "immediate payment" in cases involving
national government infrastructure projects. The following portion of the Senate
deliberations, cited by PIATCO in its Memorandum, is worth quoting to cogitate
on the purpose behind the plain meaning of the law:
THE CHAIRMAN (SEN. CAYETANO). "x x x Because the Senate believes that,
you know, we have to pay the landowners immediately not by treasury bills but
by cash.
Since we are depriving them, you know, upon payment, 'no, of possession, we
might as well pay them as much, 'no, hindi lang 50 percent.
xxx
THE CHAIRMAN (REP. VERGARA). Accepted.
xxx
THE CHAIRMAN (SEN. CAYETANO). Oo. Because this is really in favor of the
landowners, e.
THE CHAIRMAN (REP. VERGARA). That's why we need to really secure the
availability of funds.
xxx
THE CHAIRMAN (SEN. CAYETANO). No, no. It's the same. It says here: iyong
first paragraph, di ba? Iyong zonal - talagang magbabayad muna. In other
words, you know, there must be a payment kaagad. (TSN, Bicameral
Conference on the Disagreeing Provisions of House Bill 1422 and Senate Bill
2117, August 29, 2000, pp. 14-20)
xxx
THE CHAIRMAN (SEN. CAYETANO). Okay, okay, 'no. Unang-una, it is not
deposit, 'no. It's payment."
REP. BATERINA. It's payment, ho, payment." (Id., p. 63) 31
It likewise bears noting that the appropriate standard of just compensation is a
substantive matter. It is well within the province of the legislature to fix the
standard, which it did through the enactment of Rep. Act No. 8974. Specifically,
this prescribes the new standards in determining the amount of just
compensation in expropriation cases relating to national government
infrastructure projects, as well as the manner of payment thereof. At the same
time, Section 14 of the Implementing Rules recognizes the continued
applicability of Rule 67 on procedural aspects when it provides "all matters
regarding defenses and objections to the complaint, issues on uncertain
ownership and conflicting claims, effects of appeal on the rights of the parties,
and such other incidents affecting the complaint shall be resolved under the
provisions on expropriation of Rule 67 of the Rules of Court."32
Given that the 2004 Resolution militates against the continued use of the norm
under Section 2, Rule 67, is it then possible to apply Rep. Act No. 8974? We
find that it is, and moreover, its application in this case complements rather
than contravenes the prescriptions laid down in the 2004 Resolution.
Rep. Act No. 8974 Fits to the Situation at Bar and Complements the 2004 Agan
Resolution
Rep. Act No. 8974 is entitled "An Act To Facilitate The Acquisition Of Right-Of-
Way, Site Or Location For National Government Infrastructure Projects And For
Other Purposes." Obviously, the law is intended to cover expropriation
proceedings intended for national government infrastructure projects. Section 2
of Rep. Act No. 8974 explains what are considered as "national government
projects."
Sec. 2. National Government Projects. - The term "national government
projects" shall refer to all national government infrastructure, engineering works
and service contracts, including projects undertaken by government-owned and
controlled corporations, all projects covered by Republic Act No. 6957, as
amended by Republic Act No. 7718, otherwise known as the Build-Operate-
and-Transfer Law, and other related and necessary activities, such as site
acquisition, supply and/or installation of equipment and materials,
implementation, construction, completion, operation, maintenance,
improvement, repair and rehabilitation, regardless of the source of funding.
As acknowledged in the 2003 Decision, the development of NAIA 3 was made
pursuant to a build-operate-and-transfer arrangement pursuant to Republic Act
No. 6957, as amended,33 which pertains to infrastructure or development
projects normally financed by the public sector but which are now wholly or
partly implemented by the private sector.34 Under the build-operate-and-transfer
scheme, it is the project proponent which undertakes the construction, including
the financing, of a given infrastructure facility.35 In Tatad v. Garcia,36 the Court
acknowledged that the operator of the EDSA Light Rail Transit project under a
BOT scheme was the owner of the facilities such as "the rail tracks, rolling
stocks like the coaches, rail stations, terminals and the power plant."37
There can be no doubt that PIATCO has ownership rights over the facilities
which it had financed and constructed. The 2004 Resolution squarely
recognized that right when it mandated the payment of just compensation to
PIATCO prior to the takeover by the Government of NAIA 3. The fact that the
Government resorted to eminent domain proceedings in the first place is a
concession on its part of PIATCO's ownership. Indeed, if no such right is
recognized, then there should be no impediment for the Government to seize
control of NAIA 3 through ordinary ejectment proceedings.
Since the rights of PIATCO over the NAIA 3 facilities are established, the
nature of these facilities should now be determined. Under Section 415(1) of
the Civil Code, these facilities are ineluctably immovable or real property, as
they constitute buildings, roads and constructions of all kinds adhered to the
soil.38 Certainly, the NAIA 3 facilities are of such nature that they cannot just be
packed up and transported by PIATCO like a traveling circus caravan.
Thus, the property subject of expropriation, the NAIA 3 facilities, are real
property owned by PIATCO. This point is critical, considering the Government's
insistence that the NAIA 3 facilities cannot be deemed as the "right-of-way",
"site" or "location" of a national government infrastructure project, within the
coverage of Rep. Act No. 8974.
There is no doubt that the NAIA 3 is not, under any sensible contemplation, a
"right-of-way." Yet we cannot agree with the Government's insistence that
neither could NAIA 3 be a "site" or "location". The petition quotes the definitions
provided in Black's Law Dictionary of "location'" as the specific place or position
of a person or thing and 'site' as pertaining to a place or location or a piece of
property set aside for specific use.'"39 Yet even Black's Law Dictionary provides
that "[t]he term [site] does not of itself necessarily mean a place or tract of land
fixed by definite boundaries."40 One would assume that the Government, to
back up its contention, would be able to point to a clear-cut rule that a "site" or
"location" exclusively refers to soil, grass, pebbles and weeds. There is none.
Indeed, we cannot accept the Government's proposition that the only properties
that may be expropriated under Rep. Act No. 8974 are parcels of land. Rep. Act
No. 8974 contemplates within its coverage such real property constituting land,
buildings, roads and constructions of all kinds adhered to the soil. Section 1 of
Rep. Act No. 8974, which sets the declaration of the law's policy, refers to "real
property acquired for national government infrastructure projects are promptly
paid just compensation."41 Section 4 is quite explicit in stating that the scope of
the law relates to the acquisition of "real property," which under civil law
includes buildings, roads and constructions adhered to the soil.
It is moreover apparent that the law and its implementing rules commonly
provide for a rule for the valuation of improvements and/or structures thereupon
separate from that of the land on which such are constructed. Section 2 of Rep.
Act No. 8974 itself recognizes that the improvements or structures on the land
may very well be the subject of expropriation proceedings. Section 4(a), in
relation to Section 7 of the law provides for the guidelines for the valuation of
the improvements or structures to be expropriated. Indeed, nothing in the law
would prohibit the application of Section 7, which provides for the valuation
method of the improvements and or structures in the instances wherein it is
necessary for the Government to expropriate only the improvements or
structures, as in this case.
The law classifies the NAIA 3 facilities as real properties just like the soil to
which they are adhered. Any sub-classifications of real property and divergent
treatment based thereupon for purposes of expropriation must be based on
substantial distinctions, otherwise the equal protection clause of the
Constitution is violated. There may be perhaps a molecular distinction between
soil and the inorganic improvements adhered thereto, yet there are no
purposive distinctions that would justify a variant treatment for purposes of
expropriation. Both the land itself and the improvements thereupon are
susceptible to private ownership independent of each other, capable of
pecuniary estimation, and if taken from the owner, considered as a deprivation
of property. The owner of improvements seized through expropriation suffers
the same degree of loss as the owner of land seized through similar means.
Equal protection demands that all persons or things similarly situated should be
treated alike, both as to rights conferred and responsibilities imposed. For
purposes of expropriation, parcels of land are similarly situated as the buildings
or improvements constructed thereon, and a disparate treatment between
those two classes of real property infringes the equal protection clause.
Even as the provisions of Rep. Act No. 8974 call for that law's application in this
case, the threshold test must still be met whether its implementation would
conform to the dictates of the Court in the 2004 Resolution. Unlike in the case
of Rule 67, the application of Rep. Act No. 8974 will not contravene the 2004
Resolution, which requires the payment of just compensation before any
takeover of the NAIA 3 facilities by the Government. The 2004 Resolution does
not particularize the extent such payment must be effected before the takeover,
but it unquestionably requires at least some degree of payment to the private
property owner before a writ of possession may issue. The utilization of Rep.
Act No. 8974 guarantees compliance with this bare minimum requirement, as it
assures the private property owner the payment of, at the very least, the
proffered value of the property to be seized. Such payment of the proffered
value to the owner, followed by the issuance of the writ of possession in favor
of the Government, is precisely the schematic under Rep. Act No. 8974, one
which facially complies with the prescription laid down in the 2004 Resolution.
Clearly then, we see no error on the part of the RTC when it ruled that Rep. Act
No. 8974 governs the instant expropriation proceedings.
The Proper Amount to be Paid under Rep. Act No. 8974
Then, there is the matter of the proper amount which should be paid to PIATCO
by the Government before the writ of possession may issue, consonant to Rep.
Act No. 8974.
At this juncture, we must address the observation made by the Office of the
Solicitor General in behalf of the Government that there could be no "BIR zonal
valuations" on the NAIA 3 facility, as provided in Rep. Act No. 8974, since zonal
valuations are only for parcels of land, not for airport terminals. The Court
agrees with this point, yet does not see it as an impediment for the application
of Rep. Act No. 8974.
It must be clarified that PIATCO cannot be reimbursed or justly compensated
for the value of the parcel of land on which NAIA 3 stands. PIATCO is not the
owner of the land on which the NAIA 3 facility is constructed, and it should not
be entitled to just compensation that is inclusive of the value of the land itself. It
would be highly disingenuous to compensate PIATCO for the value of land it
does not own. Its entitlement to just compensation should be limited to the
value of the improvements and/or structures themselves. Thus, the
determination of just compensation cannot include the BIR zonal valuation
under Section 4 of Rep. Act No. 8974.
Under Rep. Act No. 8974, the Government is required to "immediately pay" the
owner of the property the amount equivalent to the sum of (1) one hundred
percent (100%) of the value of the property based on the current relevant zonal
valuation of the [BIR]; and (2) the value of the improvements and/or structures
as determined under Section 7. As stated above, the BIR zonal valuation
cannot apply in this case, thus the amount subject to immediate payment
should be limited to "the value of the improvements and/or structures as
determined under Section 7," with Section 7 referring to the "implementing rules
and regulations for the equitable valuation of the improvements and/or
structures on the land." Under the present implementing rules in place, the
valuation of the improvements/structures are to be based using "the
replacement cost method."42 However, the replacement cost is only one of the
factors to be considered in determining the just compensation.
In addition to Rep. Act No. 8974, the 2004 Resolution in Agan also mandated
that the payment of just compensation should be in accordance with equity as
well. Thus, in ascertaining the ultimate amount of just compensation, the duty of
the trial court is to ensure that such amount conforms not only to the law, such
as Rep. Act No. 8974, but to principles of equity as well.
Admittedly, there is no way, at least for the present, to immediately ascertain
the value of the improvements and structures since such valuation is a matter
for factual determination.43 Yet Rep. Act No. 8974 permits an expedited means
by which the Government can immediately take possession of the property
without having to await precise determination of the valuation. Section 4(c) of
Rep. Act No. 8974 states that "in case the completion of a government
infrastructure project is of utmost urgency and importance, and there is no
existing valuation of the area concerned, the implementing agency shall
immediately pay the owner of the property its proferred value, taking into
consideration the standards prescribed in Section 5 [of the law]."44 The
"proffered value" may strike as a highly subjective standard based solely on the
intuition of the government, but Rep. Act No. 8974 does provide relevant
standards by which "proffered value" should be based,45 as well as the certainty
of judicial determination of the propriety of the proffered value.46
In filing the complaint for expropriation, the Government alleged to have
deposited the amount of P3 Billion earmarked for expropriation, representing
the assessed value of the property. The making of the deposit, including the
determination of the amount of the deposit, was undertaken under the
erroneous notion that Rule 67, and not Rep. Act No. 8974, is the applicable
law. Still, as regards the amount, the Court sees no impediment to recognize
this sum of P3 Billion as the proffered value under Section 4(b) of Rep. Act No.
8974. After all, in the initial determination of the proffered value, the
Government is not strictly required to adhere to any predetermined standards,
although its proffered value may later be subjected to judicial review using the
standards enumerated under Section 5 of Rep. Act No. 8974.
How should we appreciate the questioned order of Hon. Gingoyon, which
pegged the amount to be immediately paid to PIATCO at around $62.3 Million?
The Order dated 4 January 2005, which mandated such amount, proves
problematic in that regard. While the initial sum of P3 Billion may have been
based on the assessed value, a standard which should not however apply in
this case, the RTC cites without qualification Section 4(a) of Rep. Act No. 8974
as the basis for the amount of $62.3 Million, thus leaving the impression that
the BIR zonal valuation may form part of the basis for just compensation, which
should not be the case. Moreover, respondent judge made no attempt to apply
the enumerated guidelines for determination of just compensation under
Section 5 of Rep. Act No. 8974, as required for judicial review of the proffered
value.
The Court notes that in the 10 January 2005 Omnibus Order, the RTC noted
that the concessions agreement entered into between the Government and
PIATCO stated that the actual cost of building NAIA 3 was "not less than"
US$350 Million.47 The RTC then proceeded to observe that while Rep. Act No.
8974 required the immediate payment to PIATCO the amount equivalent to
100% of the value of NAIA 3, the amount deposited by the Government
constituted only 18% of this value. At this point, no binding import should be
given to this observation that the actual cost of building NAIA 3 was "not less
than" US$350 Million, as the final conclusions on the amount of just
compensation can come only after due ascertainment in accordance with the
standards set under Rep. Act No. 8974, not the declarations of the parties. At
the same time, the expressed linkage between the BIR zonal valuation and the
amount of just compensation in this case, is revelatory of erroneous thought on
the part of the RTC.
We have already pointed out the irrelevance of the BIR zonal valuation as an
appropriate basis for valuation in this case, PIATCO not being the owner of the
land on which the NAIA 3 facilities stand. The subject order is flawed insofar as
it fails to qualify that such standard is inappropriate.
It does appear that the amount of US$62.3 Million was based on the
certification issued by the LBP-Baclaran that the Republic of the Philippines
maintained a total balance in that branch amounting to such amount. Yet the
actual representation of the $62.3 Million is not clear. The Land Bank
Certification expressing such amount does state that it was issued upon
request of the Manila International Airport Authority "purportedly as guaranty
deposit for the expropriation complaint."48 The Government claims in its
Memorandum that the entire amount was made available as a guaranty fund for
the final and executory judgment of the trial court, and not merely for the
issuance of the writ of possession.49 One could readily conclude that the entire
amount of US$62.3 Million was intended by the Government to answer for
whatever guaranties may be required for the purpose of the expropriation
complaint.
Still, such intention the Government may have had as to the entire US$62.3
Million is only inferentially established. In ascertaining the proffered value
adduced by the Government, the amount of P3 Billion as the amount deposited
characterized in the complaint as "to be held by [Land Bank] subject to the
[RTC's] orders,"50 should be deemed as controlling. There is no clear evidence
that the Government intended to offer US$62.3 Million as the initial payment of
just compensation, the wording of the Land Bank Certification notwithstanding,
and credence should be given to the consistent position of the Government on
that aspect.
In any event, for the RTC to be able to justify the payment of US$62.3 Million to
PIATCO and not P3 Billion Pesos, he would have to establish that the higher
amount represents the valuation of the structures/improvements, and not the
BIR zonal valuation on the land wherein NAIA 3 is built. The Order dated 5
January 2005 fails to establish such integral fact, and in the absence of
contravening proof, the proffered value of P3 Billion, as presented by the
Government, should prevail.
Strikingly, the Government submits that assuming that Rep. Act No. 8974 is
applicable, the deposited amount of P3 Billion should be considered as the
proffered value, since the amount was based on comparative values made by
the City Assessor.51 Accordingly, it should be deemed as having faithfully
complied with the requirements of the statute.52 While the Court agrees that P3
Billion should be considered as the correct proffered value, still we cannot
deem the Government as having faithfully complied with Rep. Act No. 8974.
For the law plainly requires direct payment to the property owner, and not a
mere deposit with the authorized government depositary. Without such direct
payment, no writ of possession may be obtained.
Writ of Possession May Not Be Implemented Until Actual Receipt by PIATCO
of Proferred Value
The Court thus finds another error on the part of the RTC. The RTC authorized
the issuance of the writ of possession to the Government notwithstanding the
fact that no payment of any amount had yet been made to PIATCO, despite the
clear command of Rep. Act No. 8974 that there must first be payment before
the writ of possession can issue. While the RTC did direct the LBP-Baclaran to
immediately release the amount of US$62 Million to PIATCO, it should have
likewise suspended the writ of possession, nay, withdrawn it altogether, until
the Government shall have actually paid PIATCO. This is the inevitable
consequence of the clear command of Rep. Act No. 8974 that requires
immediate payment of the initially determined amount of just compensation
should be effected. Otherwise, the overpowering intention of Rep. Act No. 8974
of ensuring payment first before transfer of repossession would be eviscerated.
Rep. Act No. 8974 represents a significant change from previous expropriation
laws such as Rule 67, or even Section 19 of the Local Government Code. Rule
67 and the Local Government Code merely provided that the Government
deposit the initial amounts53 antecedent to acquiring possession of the property
with, respectively, an authorized
Government depositary54 or the proper court.55 In both cases, the private owner
does not receive compensation prior to the deprivation of property. On the other
hand, Rep. Act No. 8974 mandates immediate payment of the initial just
compensation prior to the issuance of the writ of possession in favor of the
Government.
Rep. Act No. 8974 is plainly clear in imposing the requirement of immediate
prepayment, and no amount of statutory deconstruction can evade such
requisite. It enshrines a new approach towards eminent domain that reconciles
the inherent unease attending expropriation proceedings with a position of
fundamental equity. While expropriation proceedings have always demanded
just compensation in exchange for private property, the previous deposit
requirement impeded immediate compensation to the private owner, especially
in cases wherein the determination of the final amount of compensation would
prove highly disputed. Under the new modality prescribed by Rep. Act No.
8974, the private owner sees immediate monetary recompense with the same
degree of speed as the taking of his/her property.
While eminent domain lies as one of the inherent powers of the State, there is
no requirement that it undertake a prolonged procedure, or that the payment of
the private owner be protracted as far as practicable. In fact, the expedited
procedure of payment, as highlighted under Rep. Act No. 8974, is inherently
more fair, especially to the layperson who would be hard-pressed to fully
comprehend the social value of expropriation in the first place. Immediate
payment placates to some degree whatever ill-will that arises from
expropriation, as well as satisfies the demand of basic fairness.
The Court has the duty to implement Rep. Act No. 8974 and to direct
compliance with the requirement of immediate payment in this case.
Accordingly, the Writ of Possession dated 21 December 2004 should be held in
abeyance, pending proof of actual payment by the Government to PIATCO of
the proffered value of the NAIA 3 facilities, which totals P3,002,125,000.00.
Rights of the Government upon Issuance of the Writ of Possession
Once the Government pays PIATCO the amount of the proffered value of P3
Billion, it will be entitled to the Writ of Possession. However, the Government
questions the qualification imposed by the RTC in its 4 January 2005 Order
consisting of the prohibition on the Government from performing acts of
ownership such as awarding concessions or leasing any part of NAIA 3 to other
parties. To be certain, the RTC, in its 10 January 2005 Omnibus Order,
expressly stated that it was not affirming "the superfluous part of the Order [of 4
January 2005] prohibiting the plaintiffs from awarding concessions or leasing
any part of NAIA [3] to other parties."56 Still, such statement was predicated on
the notion that since the Government was not yet the owner of NAIA 3 until final
payment of just compensation, it was obviously incapacitated to perform such
acts of ownership.
In deciding this question, the 2004 Resolution in Agan cannot be ignored,
particularly the declaration that "[f]or the government to take over the said
facility, it has to compensate respondent PIATCO as builder of the said
structures." The obvious import of this holding is that unless PIATCO is paid
just compensation, the Government is barred from "taking over," a phrase
which in the strictest sense could encompass even a bar of physical
possession of NAIA 3, much less operation of the facilities.
There are critical reasons for the Court to view the 2004 Resolution less
stringently, and thus allow the operation by the Government of NAIA 3 upon the
effectivity of the Writ of Possession. For one, the national prestige is diminished
every day that passes with the NAIA 3 remaining mothballed. For another, the
continued non-use of the facilities contributes to its physical deterioration, if it
has not already. And still for another, the economic benefits to the Government
and the country at large are beyond dispute once the NAIA 3 is put in
operation.
Rep. Act No. 8974 provides the appropriate answer for the standard that
governs the extent of the acts the Government may be authorized to perform
upon the issuance of the writ of possession. Section 4 states that "the court
shall immediately issue to the implementing agency an order to take
possession of the property and start the implementation of the project." We hold
that accordingly, once the Writ of Possession is effective, the Government itself
is authorized to perform the acts that are essential to the operation of the NAIA
3 as an international airport terminal upon the effectivity of the Writ of
Possession. These would include the repair, reconditioning and improvement of
the complex, maintenance of the existing facilities and equipment, installation of
new facilities and equipment, provision of services and facilities pertaining to
the facilitation of air traffic and transport, and other services that are integral to
a modern-day international airport.
The Government's position is more expansive than that adopted by the Court. It
argues that with the writ of possession, it is enabled to perform acts de jure on
the expropriated property. It cites Republic v. Tagle,57 as well as the statement
therein that "the expropriation of real property does not include mere physical
entry or occupation of land," and from them concludes that "its mere physical
entry and occupation of the property fall short of the taking of title, which
includes all the rights that may be exercised by an owner over the subject
property."
This conclusion is indeed lifted directly from statements in Tagle, 58 but not from
the ratio decidendi of that case. Tagle concerned whether a writ of possession
in favor of the Government was still necessary in light of the fact that it was
already in actual possession of the property. In ruling that the Government was
entitled to the writ of possession, the Court in Tagle explains that such writ
vested not only physical possession, but also the legal right to possess the
property. Continues the Court, such legal right to possess was particularly
important in the case, as there was a pending suit against the Republic for
unlawful detainer, and the writ of possession would serve to safeguard the
Government from eviction.59
At the same time, Tagle conforms to the obvious, that there is no transfer of
ownership as of yet by virtue of the writ of possession. Tagle may concede that
the Government is entitled to exercise more than just the right of possession by
virtue of the writ of possession, yet it cannot be construed to grant the
Government the entire panoply of rights that are available to the owner.
Certainly, neither Tagle nor any other case or law, lends support to the
Government's proposition that it acquires beneficial or equitable ownership of
the expropriated property merely through the writ of possession.
Indeed, this Court has been vigilant in defense of the rights of the property
owner who has been validly deprived of possession, yet retains legal title over
the expropriated property pending payment of just compensation. We reiterated
the various doctrines of such import in our recent holding in Republic v. Lim:60
The recognized rule is that title to the property expropriated shall pass from the
owner to the expropriator only upon full payment of the just compensation.
Jurisprudence on this settled principle is consistent both here and in other
democratic jurisdictions. In Association of Small Landowners in the Philippines,
Inc. et al., vs. Secretary of Agrarian Reform[61], thus:
"Title to property which is the subject of condemnation proceedings does not
vest the condemnor until the judgment fixing just compensation is entered and
paid, but the condemnor's title relates back to the date on which the petition
under the Eminent Domain Act, or the commissioner's report under the Local
Improvement Act, is filed.
x x x Although the right to appropriate and use land taken for a canal is
complete at the time of entry, title to the property taken remains in the owner
until payment is actually made. (Emphasis supplied.)
In Kennedy v. Indianapolis, the US Supreme Court cited several cases holding
that title to property does not pass to the condemnor until just compensation
had actually been made. In fact, the decisions appear to be uniform to this
effect. As early as 1838, in Rubottom v. McLure, it was held that 'actual
payment to the owner of the condemned property was a condition precedent to
the investment of the title to the property in the State' albeit 'not to the
appropriation of it to public use.' In Rexford v. Knight, the Court of Appeals of
New York said that the construction upon the statutes was that the fee did not
vest in the State until the payment of the compensation although the authority
to enter upon and appropriate the land was complete prior to the payment.
Kennedy further said that 'both on principle and authority the rule is . . . that the
right to enter on and use the property is complete, as soon as the property is
actually appropriated under the authority of law for a public use, but that the title
does not pass from the owner without his consent, until just compensation has
been made to him."
Our own Supreme Court has held in Visayan Refining Co. v. Camus and
Paredes, that:
'If the laws which we have exhibited or cited in the preceding discussion are
attentively examined it will be apparent that the method of expropriation
adopted in this jurisdiction is such as to afford absolute reassurance that no
piece of land can be finally and irrevocably taken from an unwilling owner until
compensation is paid....'"(Emphasis supplied.)
Clearly, without full payment of just compensation, there can be no transfer of
title from the landowner to the expropriator. Otherwise stated, the Republic's
acquisition of ownership is conditioned upon the full payment of just
compensation within a reasonable time.
Significantly, in Municipality of Biñan v. Garcia[62] this Court ruled that the
expropriation of lands consists of two stages, to wit:
"x x x The first is concerned with the determination of the authority of the
plaintiff to exercise the power of eminent domain and the propriety of its
exercise in the context of the facts involved in the suit. It ends with an order, if
not of dismissal of the action, "of condemnation declaring that the plaintiff has a
lawful right to take the property sought to be condemned, for the public use or
purpose described in the complaint, upon the payment of just compensation to
be determined as of the date of the filing of the complaint" x x x.
The second phase of the eminent domain action is concerned with the
determination by the court of "the just compensation for the property sought to
be taken." This is done by the court with the assistance of not more than three
(3) commissioners. x x x.
It is only upon the completion of these two stages that expropriation is said to
have been completed. In Republic v. Salem Investment Corporation[63] , we
ruled that, "the process is not completed until payment of just compensation."
Thus, here, the failure of the Republic to pay respondent and his predecessors-
in-interest for a period of 57 years rendered the expropriation process
incomplete.
Lim serves fair warning to the Government and its agencies who consistently
refuse to pay just compensation due to the private property owner whose
property had been expropriated. At the same time, Lim emphasizes the fragility
of the rights of the Government as possessor pending the final payment of just
compensation, without diminishing the potency of such rights. Indeed, the
public policy, enshrined foremost in the Constitution, mandates that the
Government must pay for the private property it expropriates. Consequently,
the proper judicial attitude is to guarantee compliance with this primordial right
to just compensation.
Final Determination of Just Compensation Within 60 Days
The issuance of the writ of possession does not write finis to the expropriation
proceedings. As earlier pointed out, expropriation is not completed until
payment to the property owner of just compensation. The proffered value
stands as merely a provisional determination of the amount of just
compensation, the payment of which is sufficient to transfer possession of the
property to the Government. However, to effectuate the transfer of ownership, it
is necessary for the Government to pay the property owner the final just
compensation.
In Lim, the Court went as far as to countenance, given the exceptional
circumstances of that case, the reversion of the validly expropriated property to
private ownership due to the failure of the Government to pay just
compensation in that case.64 It was noted in that case that the Government
deliberately refused to pay just compensation. The Court went on to rule that "in
cases where the government failed to pay just compensation within five (5)
years from the finality of the judgment in the expropriation proceedings, the
owners concerned shall have the right to recover possession of their
property."65
Rep. Act No. 8974 mandates a speedy method by which the final determination
of just compensation may be had. Section 4 provides:
In the event that the owner of the property contests the implementing agency's
proffered value, the court shall determine the just compensation to be paid the
owner within sixty (60) days from the date of filing of the expropriation case.
When the decision of the court becomes final and executory, the implementing
agency shall pay the owner the difference between the amount already paid
and the just compensation as determined by the court.
We hold that this provision should apply in this case. The sixty (60)-day period
prescribed in Rep. Act No. 8974 gives teeth to the law's avowed policy "to
ensure that owners of real property acquired for national government
infrastructure projects are promptly paid just compensation."66 In this case,
there already has been irreversible delay in the prompt payment of PIATCO of
just compensation, and it is no longer possible for the RTC to determine the just
compensation due PIATCO within sixty (60) days from the filing of the
complaint last 21 December 2004, as contemplated by the law. Still, it is
feasible to effectuate the spirit of the law by requiring the trial court to make
such determination within sixty (60) days from finality of this decision, in
accordance with the guidelines laid down in Rep. Act No. 8974 and its
Implementing Rules.
Of course, once the amount of just compensation has been finally determined,
the Government is obliged to pay PIATCO the said amount. As shown in Lim
and other like-minded cases, the Government's refusal to make such payment
is indubitably actionable in court.
Appointment of Commissioners
The next argument for consideration is the claim of the Government that the
RTC erred in appointing the three commissioners in its 7 January 2005 Order
without prior consultation with either the Government or PIATCO, or without
affording the Government the opportunity to object to the appointment of these
commissioners. We can dispose of this argument without complication.
It must be noted that Rep. Act No. 8974 is silent on the appointment of
commissioners tasked with the ascertainment of just compensation.67 This
protocol though is sanctioned under Rule 67. We rule that the appointment of
commissioners under Rule 67 may be resorted to, even in expropriation
proceedings under Rep. Act No. 8974, since the application of the provisions of
Rule 67 in that regard do not conflict with the statute. As earlier stated, Section
14 of the Implementing Rules does allow such other incidents affecting the
complaint to be resolved under the provisions on expropriation of Rule 67 of the
Rules of Court. Even without Rule 67, reference during trial to a commissioner
of the examination of an issue of fact is sanctioned under Rule 32 of the Rules
of Court.
But while the appointment of commissioners under the aegis of Rule 67 may be
sanctioned in expropriation proceedings under Rep. Act No. 8974, the
standards to be observed for the determination of just compensation are
provided not in Rule 67 but in the statute. In particular, the governing standards
for the determination of just compensation for the NAIA 3 facilities are found in
Section 10 of the Implementing Rules for Rep. Act No. 8974, which provides for
the replacement cost method in the valuation of improvements and structures.68
Nothing in Rule 67 or Rep. Act No. 8974 requires that the RTC consult with the
parties in the expropriation case on who should be appointed as
commissioners. Neither does the Court feel that such a requirement should be
imposed in this case. We did rule in Municipality of Talisay v. Ramirez 69 that
"there is nothing to prevent [the trial court] from seeking the recommendations
of the parties on [the] matter [of appointment of commissioners], the better to
ensure their fair representation."70 At the same time, such solicitation of
recommendations is not obligatory on the part of the court, hence we cannot
impute error on the part of the RTC in its exercise of solitary discretion in the
appointment of the commissioners.
What Rule 67 does allow though is for the parties to protest the appointment of
any of these commissioners, as provided under Section 5 of the Rule. These
objections though must be made filed within ten (10) days from service of the
order of appointment of the commissioners.71 In this case, the proper recourse
of the Government to challenge the choice of the commissioners is to file an
objection with the trial court, conformably with Section 5, Rule 67, and not as it
has done, assail the same through a special civil action for certiorari.
Considering that the expropriation proceedings in this case were effectively
halted seven (7) days after the Order appointing the commissioners, 72 it is
permissible to allow the parties to file their objections with the RTC within five
(5) days from finality of this decision.
Insufficient Ground for Inhibition of Respondent Judge
The final argument for disposition is the claim of the Government is that Hon.
Gingoyon has prejudged the expropriation case against the Government's
cause and, thus, should be required to inhibit himself. This grave charge is
predicated on facts which the Government characterizes as "undeniable." In
particular, the Government notes that the 4 January 2005 Order was issued
motu proprio, without any preceding motion, notice or hearing. Further, such
order, which directed the payment of US$62 Million to PIATCO, was attended
with error in the computation of just compensation. The Government also notes
that the said Order was issued even before summons had been served on
PIATCO.
The disqualification of a judge is a deprivation of his/her judicial power73 and
should not be allowed on the basis of mere speculations and surmises. It
certainly cannot be predicated on the adverse nature of the judge's rulings
towards the movant for inhibition, especially if these rulings are in accord with
law. Neither could inhibition be justified merely on the erroneous nature of the
rulings of the judge. We emphasized in Webb v. People:74
To prove bias and prejudice on the part of respondent judge, petitioners harp
on the alleged adverse and erroneous rulings of respondent judge on their
various motions. By themselves, however, they do not sufficiently prove bias
and prejudice to disqualify respondent judge. To be disqualifying, the bias and
prejudice must be shown to have stemmed from an extrajudicial source and
result in an opinion on the merits on some basis other than what the judge
learned from his participation in the case. Opinions formed in the course of
judicial proceedings, although erroneous, as long as they are based on the
evidence presented and conduct observed by the judge, do not prove personal
bias or prejudice on the part of the judge. As a general rule, repeated rulings
against a litigant, no matter how erroneous and vigorously and consistently
expressed, are not a basis for disqualification of a judge on grounds of bias and
prejudice. Extrinsic evidence is required to establish bias, bad faith, malice or
corrupt purpose, in addition to the palpable error which may be inferred from
the decision or order itself. Although the decision may seem so erroneous as to
raise doubts concerning a judge's integrity, absent extrinsic evidence, the
decision itself would be insufficient to establish a case against the judge. The
only exception to the rule is when the error is so gross and patent as to produce
an ineluctable inference of bad faith or malice.75
The Government's contentions against Hon. Gingoyon are severely undercut by
the fact that the 21 December 2004 Order, which the 4 January 2005 Order
sought to rectify, was indeed severely flawed as it erroneously applied the
provisions of Rule 67 of the Rules of Court, instead of Rep. Act No. 8974, in
ascertaining compliance with the requisites for the issuance of the writ of
possession. The 4 January 2005 Order, which according to the Government
establishes Hon. Gingoyon's bias, was promulgated precisely to correct the
previous error by applying the correct provisions of law. It would not speak well
of the Court if it sanctions a judge for wanting or even attempting to correct a
previous erroneous order which precisely is the right move to take.
Neither are we convinced that the motu proprio issuance of the 4 January 2005
Order, without the benefit of notice or hearing, sufficiently evinces bias on the
part of Hon. Gingoyon. The motu proprio amendment by a court of an
erroneous order previously issued may be sanctioned depending on the
circumstances, in line with the long-recognized principle that every court has
inherent power to do all things reasonably necessary for the administration of
justice within the scope of its jurisdiction.76 Section 5(g), Rule 135 of the Rules
of Court further recognizes the inherent power of courts "to amend and control
its process and orders so as to make them conformable to law and justice," 77 a
power which Hon. Gingoyon noted in his 10 January 2005 Omnibus Order. 78
This inherent power includes the right of the court to reverse itself, especially
when in its honest opinion it has committed an error or mistake in judgment,
and that to adhere to its decision will cause injustice to a party litigant.79
Certainly, the 4 January 2005 Order was designed to make the RTC's previous
order conformable to law and justice, particularly to apply the correct law of the
case. Of course, as earlier established, this effort proved incomplete, as the 4
January 2005 Order did not correctly apply Rep. Act No. 8974 in several
respects. Still, at least, the 4 January 2005 Order correctly reformed the most
basic premise of the case that Rep. Act No. 8974 governs the expropriation
proceedings.
Nonetheless, the Government belittles Hon. Gingoyon's invocation of Section
5(g), Rule 135 as "patently without merit". Certainly merit can be seen by the
fact that the 4 January 2005 Order reoriented the expropriation proceedings
towards the correct governing law. Still, the Government claims that the
unilateral act of the RTC did not conform to law or justice, as it was not afforded
the right to be heard.
The Court would be more charitably disposed towards this argument if not for
the fact that the earlier order with the 4 January 2005 Order sought to correct
was itself issued without the benefit of any hearing. In fact, nothing either in
Rule 67 or Rep. Act No. 8975 requires the conduct of a hearing prior to the
issuance of the writ of possession, which by design is available immediately
upon the filing of the complaint provided that the requisites attaching thereto
are present. Indeed, this expedited process for the obtention of a writ of
possession in expropriation cases comes at the expense of the rights of the
property owner to be heard or to be deprived of possession. Considering these
predicates, it would be highly awry to demand that an order modifying the
earlier issuance of a writ of possession in an expropriation case be barred until
the staging of a hearing, when the issuance of the writ of possession itself is
not subject to hearing. Perhaps the conduct of a hearing under these
circumstances would be prudent. However, hearing is not mandatory, and the
failure to conduct one does not establish the manifest bias required for the
inhibition of the judge.
The Government likewise faults Hon. Gingoyon for using the amount of
US$350 Million as the basis for the 100% deposit under Rep. Act No. 8974.
The Court has noted that this statement was predicated on the erroneous belief
that the BIR zonal valuation applies as a standard for determination of just
compensation in this case. Yet this is manifest not of bias, but merely of error
on the part of the judge. Indeed, the Government was not the only victim of the
errors of the RTC in the assailed orders. PIATCO itself was injured by the
issuance by the RTC of the writ of possession, even though the former had yet
to be paid any amount of just compensation. At the same time, the Government
was also prejudiced by the erroneous ruling of the RTC that the amount of
US$62.3 Million, and not P3 Billion, should be released to PIATCO.
The Court has not been remiss in pointing out the multiple errors committed by
the RTC in its assailed orders, to the prejudice of both parties. This attitude of
error towards all does not ipso facto negate the charge of bias. Still, great care
should be had in requiring the inhibition of judges simply because the
magistrate did err. Incompetence may be a ground for administrative sanction,
but not for inhibition, which requires lack of objectivity or impartiality to sit on a
case.
The Court should necessarily guard against adopting a standard that a judge
should be inhibited from hearing the case if one litigant loses trust in the judge.
Such loss of trust on the part of the Government may be palpable, yet inhibition
cannot be grounded merely on the feelings of the party-litigants. Indeed, every
losing litigant in any case can resort to claiming that the judge was biased, and
he/she will gain a sympathetic ear from friends, family, and people who do not
understand the judicial process. The test in believing such a proposition should
not be the vehemence of the litigant's claim of bias, but the Court's judicious
estimation, as people who know better than to believe any old cry of "wolf!",
whether such bias has been irrefutably exhibited.
The Court acknowledges that it had been previously held that "at the very first
sign of lack of faith and trust in his actions, whether well-grounded or not, the
judge has no other alternative but to inhibit himself from the case."80 But this
doctrine is qualified by the entrenched rule that "a judge may not be legally
prohibited from sitting in a litigation, but when circumstances appear that will
induce doubt to his honest actuations and probity in favor of either party, or
incite such state of mind, he should conduct a careful self- examination. He
should exercise his discretion in a way that the people's faith in the Courts of
Justice is not impaired."81 And a self-assessment by the judge that he/she is not
impaired to hear the case will be respected by the Court absent any evidence
to the contrary. As held in Chin v. Court of Appeals:
An allegation of prejudgment, without more, constitutes mere conjecture and is
not one of the "just and valid reasons" contemplated in the second paragraph of
Rule 137 of the Rules of Court for which a judge may inhibit himself from
hearing the case. We have repeatedly held that mere suspicion that a judge is
partial to a party is not enough. Bare allegations of partiality and prejudgment
will not suffice in the absence of clear and convincing evidence to overcome the
presumption that the judge will undertake his noble role to dispense justice
according to law and evidence and without fear or favor. There should be
adequate evidence to prove the allegations, and there must be showing that the
judge had an interest, personal or otherwise, in the prosecution of the case. To
be a disqualifying circumstance, the bias and prejudice must be shown to have
stemmed from an extrajudicial source and result in an opinion on the merits on
some basis other than what the judge learned from his participation in the
case.82
The mere vehemence of the Government's claim of bias does not translate to
clear and convincing evidence of impairing bias. There is no sufficient ground to
direct the inhibition of Hon. Gingoyon from hearing the expropriation case.
In conclusion, the Court summarizes its rulings as follows:
(1) The 2004 Resolution in Agan sets the base requirement that has to be
observed before the Government may take over the NAIA 3, that there must be
payment to PIATCO of just compensation in accordance with law and equity.
Any ruling in the present expropriation case must be conformable to the
dictates of the Court as pronounced in the Agan cases.
(2) Rep. Act No. 8974 applies in this case, particularly insofar as it requires the
immediate payment by the Government of at least the proffered value of the
NAIA 3 facilities to PIATCO and provides certain valuation standards or
methods for the determination of just compensation.
(3) Applying Rep. Act No. 8974, the implementation of Writ of Possession in
favor of the Government over NAIA 3 is held in abeyance until PIATCO is
directly paid the amount of P3 Billion, representing the proffered value of NAIA
3 under Section 4(c) of the law.
(4) Applying Rep. Act No. 8974, the Government is authorized to start the
implementation of the NAIA 3 Airport terminal project by performing the acts
that are essential to the operation of the NAIA 3 as an international airport
terminal upon the effectivity of the Writ of Possession, subject to the conditions
above-stated. As prescribed by the Court, such authority encompasses "the
repair, reconditioning and improvement of the complex, maintenance of the
existing facilities and equipment, installation of new facilities and equipment,
provision of services and facilities pertaining to the facilitation of air traffic and
transport, and other services that are integral to a modern-day international
airport."83
WHEREFORE, the Petition is GRANTED in PART with respect to the orders
dated 4 January 2005 and 10 January 2005 of the lower court. Said orders are
AFFIRMED with the following MODIFICATIONS:
1) The implementation of the Writ of Possession dated 21 December 2005 is
HELD IN ABEYANCE, pending payment by petitioners to PIATCO of the
amount of Three Billion Two Million One Hundred Twenty Five Thousand
Pesos (P3,002,125,000.00), representing the proffered value of the NAIA 3
facilities;
2) Petitioners, upon the effectivity of the Writ of Possession, are authorized
start the implementation of the Ninoy Aquino International Airport Pasenger
Terminal III project by performing the acts that are essential to the operation of
the said International Airport Passenger Terminal project;
3) RTC Branch 117 is hereby directed, within sixty (60) days from finality of this
Decision, to determine the just compensation to be paid to PIATCO by the
Government.

(5) The RTC is mandated to complete its determination of the just The Order dated 7 January 2005 is AFFIRMED in all respects subject to the
compensation within sixty (60) days from finality of this Decision. In doing so, qualification that the parties are given ten (10) days from finality of this Decision
the RTC is obliged to comply with "law and equity" as ordained in Again and the to file, if they so choose, objections to the appointment of the commissioners
standard set under Implementing Rules of Rep. Act No. 8974 which is the decreed therein.
"replacement cost method" as the standard of valuation of structures and
The Temporary Restraining Order dated 14 January 2005 is hereby LIFTED.
improvements.
No pronouncement as to costs.
(6) There was no grave abuse of discretion attending the RTC Order appointing
the commissioners for the purpose of determining just compensation. The SO ORDERED.
provisions on commissioners under Rule 67 shall apply insofar as they are not
inconsistent with Rep. Act No. 8974, its Implementing Rules, or the rulings of
the Court in Agan.

(7) The Government shall pay the just compensation fixed in the decision of the
trial court to PIATCO immediately upon the finality of the said decision.

(8) There is no basis for the Court to direct the inhibition of Hon. Gingoyon.

All told, the Court finds no grave abuse of discretion on the part of the RTC to
warrant the nullification of the questioned orders. Nonetheless, portions of
these orders should be modified to conform with law and the pronouncements
made by the Court herein.
 for a change of name and sex appearing in the birth certificate to reflect the
result of a sex reassignment surgery?

On November 26, 2002, petitioner Rommel Jacinto Dantes Silverio filed a

petition for the change of his first name and sex in his birth certificate in the
Regional Trial Court of Manila, Branch 8. The petition, docketed as SP Case
No. 02-105207, impleaded the civil registrar of Manila as respondent.

Petitioner alleged in his petition that he was born in the City of Manila to the
spouses Melecio Petines Silverio and Anita Aquino Dantes on April 4, 1962. His
name was registered as "Rommel Jacinto Dantes Silverio" in his certificate of
live birth (birth certificate). His sex was registered as "male."

He further alleged that he is a male transsexual, that is, "anatomically male but
feels, thinks and acts as a female" and that he had always identified himself
with girls since childhood.1 Feeling trapped in a man’s body, he consulted
several doctors in the United States. He underwent psychological examination,
hormone treatment and breast augmentation. His attempts to transform himself
to a "woman" culminated on January 27, 2001 when he underwent sex
reassignment surgery2 in Bangkok, Thailand. He was thereafter examined by
G.R. No. 174689 October 22, 2007 Dr. Marcelino Reysio-Cruz, Jr., a plastic and reconstruction surgeon in the
Philippines, who issued a medical certificate attesting that he (petitioner) had in
ROMMEL JACINTO DANTES SILVERIO, petitioner, fact undergone the procedure.
vs.
REPUBLIC OF THE PHILIPPINES, respondent. From then on, petitioner lived as a female and was in fact engaged to be
married. He then sought to have his name in his birth certificate changed from
DECISION "Rommel Jacinto" to "Mely," and his sex from "male" to "female."

CORONA, J.: An order setting the case for initial hearing was published in the People’s
Journal Tonight, a newspaper of general circulation in Metro Manila, for three
When God created man, He made him in the likeness of God; He created them
consecutive weeks.3 Copies of the order were sent to the Office of the Solicitor
male and female. (Genesis 5:1-2)
General (OSG) and the civil registrar of Manila.
Amihan gazed upon the bamboo reed planted by Bathala and she heard voices
On the scheduled initial hearing, jurisdictional requirements were established.
coming from inside the bamboo. "Oh North Wind! North Wind! Please let us
No opposition to the petition was made.
out!," the voices said. She pecked the reed once, then twice. All of a sudden,
the bamboo cracked and slit open. Out came two human beings; one was a During trial, petitioner testified for himself. He also presented Dr. Reysio-Cruz,
male and the other was a female. Amihan named the man "Malakas" (Strong) Jr. and his American fiancé, Richard P. Edel, as witnesses.
and the woman "Maganda" (Beautiful). (The Legend of Malakas and Maganda)
On June 4, 2003, the trial court rendered a decision4 in favor of petitioner. Its
When is a man a man and when is a woman a woman? In particular, does the relevant portions read:
law recognize the changes made by a physician using scalpel, drugs and
counseling with regard to a person’s sex? May a person successfully petition
Petitioner filed the present petition not to evade any law or judgment or any
infraction thereof or for any unlawful motive but solely for the purpose of making
his birth records compatible with his present sex.
The sole issue here is whether or not petitioner is entitled to the relief asked for.
The [c]ourt rules in the affirmative.
Firstly, the [c]ourt is of the opinion that granting the petition would be more in
consonance with the principles of justice and equity. With his sexual [re-
assignment], petitioner, who has always felt, thought and acted like a woman,
now possesses the physique of a female. Petitioner’s misfortune to be trapped
in a man’s body is not his own doing and should not be in any way taken
against him.
Likewise, the [c]ourt believes that no harm, injury [or] prejudice will be caused
to anybody or the community in granting the petition. On the contrary, granting
the petition would bring the much-awaited happiness on the part of the
petitioner and her [fiancé] and the realization of their dreams.
Finally, no evidence was presented to show any cause or ground to deny the
present petition despite due notice and publication thereof. Even the State,
through the [OSG] has not seen fit to interpose any [o]pposition.
WHEREFORE, judgment is hereby rendered GRANTING the petition and
ordering the Civil Registrar of Manila to change the entries appearing in the
Certificate of Birth of [p]etitioner, specifically for petitioner’s first name from
"Rommel Jacinto" to MELY and petitioner’s gender from "Male" to FEMALE. 5
On August 18, 2003, the Republic of the Philippines (Republic), thru the OSG,
filed a petition for certiorari in the Court of Appeals.6 It alleged that there is no
law allowing the change of entries in the birth certificate by reason of sex
alteration.
On February 23, 2006, the Court of Appeals7 rendered a decision8 in favor of
the Republic. It ruled that the trial court’s decision lacked legal basis. There is
no law allowing the change of either name or sex in the certificate of birth on
the ground of sex reassignment through surgery. Thus, the Court of Appeals
granted the Republic’s petition, set aside the decision of the trial court and
ordered the dismissal of SP Case No. 02-105207. Petitioner moved for
reconsideration but it was denied.9 Hence, this petition.
Petitioner essentially claims that the change of his name and sex in his birth
certificate is allowed under Articles 407 to 413 of the Civil Code, Rules 103 and
108 of the Rules of Court and RA 9048.10
The petition lacks merit.
A Person’s First Name Cannot Be Changed On the Ground of Sex
Reassignment
Petitioner invoked his sex reassignment as the ground for his petition for
change of name and sex. As found by the trial court:
Petitioner filed the present petition not to evade any law or judgment or any
infraction thereof or for any unlawful motive but solely for the purpose of
making his birth records compatible with his present sex. (emphasis
supplied)
Petitioner believes that after having acquired the physical features of a female,
he became entitled to the civil registry changes sought. We disagree.
The State has an interest in the names borne by individuals and entities for
purposes of identification.11 A change of name is a privilege, not a right. 12
Petitions for change of name are controlled by statutes. 13 In this connection,
Article 376 of the Civil Code provides:
ART. 376. No person can change his name or surname without judicial
authority.
This Civil Code provision was amended by RA 9048 (Clerical Error Law). In
particular, Section 1 of RA 9048 provides:
SECTION 1. Authority to Correct Clerical or Typographical Error and Change of
First Name or Nickname. – No entry in a civil register shall be changed or
corrected without a judicial order, except for clerical or typographical errors and
change of first name or nickname which can be corrected or changed by the
concerned city or municipal civil registrar or consul general in accordance with
the provisions of this Act and its implementing rules and regulations.
RA 9048 now governs the change of first name.14 It vests the power and
authority to entertain petitions for change of first name to the city or municipal
civil registrar or consul general concerned. Under the law, therefore, jurisdiction
over applications for change of first name is now primarily lodged with the
aforementioned administrative officers. The intent and effect of the law is to
exclude the change of first name from the coverage of Rules 103 (Change of
Name) and 108 (Cancellation or Correction of Entries in the Civil Registry) of
the Rules of Court, until and unless an administrative petition for change of
name is first filed and subsequently denied.15 It likewise lays down the
corresponding venue,16 form17 and procedure. In sum, the remedy and the
proceedings regulating change of first name are primarily administrative in
nature, not judicial.
RA 9048 likewise provides the grounds for which change of first name may be
allowed:
SECTION 4. Grounds for Change of First Name or Nickname. – The petition for
change of first name or nickname may be allowed in any of the following cases:
(1) The petitioner finds the first name or nickname to be ridiculous, tainted with
dishonor or extremely difficult to write or pronounce;
(2) The new first name or nickname has been habitually and continuously used
by the petitioner and he has been publicly known by that first name or
nickname in the community; or
(3) The change will avoid confusion.
Petitioner’s basis in praying for the change of his first name was his sex
reassignment. He intended to make his first name compatible with the sex he
thought he transformed himself into through surgery. However, a change of
name does not alter one’s legal capacity or civil status. 18 RA 9048 does not
sanction a change of first name on the ground of sex reassignment. Rather
than avoiding confusion, changing petitioner’s first name for his declared
purpose may only create grave complications in the civil registry and the public
interest.
Before a person can legally change his given name, he must present proper or
reasonable cause or any compelling reason justifying such change.19 In
addition, he must show that he will be prejudiced by the use of his true and
official name.20 In this case, he failed to show, or even allege, any prejudice that
he might suffer as a result of using his true and official name.
In sum, the petition in the trial court in so far as it prayed for the change of
petitioner’s first name was not within that court’s primary jurisdiction as the
petition should have been filed with the local civil registrar concerned, assuming
it could be legally done. It was an improper remedy because the proper remedy
was administrative, that is, that provided under RA 9048. It was also filed in the
wrong venue as the proper venue was in the Office of the Civil Registrar of
Manila where his birth certificate is kept. More importantly, it had no merit since
the use of his true and official name does not prejudice him at all. For all these
reasons, the Court of Appeals correctly dismissed petitioner’s petition in so far
as the change of his first name was concerned.
No Law Allows The Change of Entry In The Birth Certificate As To Sex On
the Ground of Sex Reassignment
The determination of a person’s sex appearing in his birth certificate is a legal
issue and the court must look to the statutes.21 In this connection, Article 412 of
the Civil Code provides:
ART. 412. No entry in the civil register shall be changed or corrected without a
judicial order.
Together with Article 376 of the Civil Code, this provision was amended by RA
9048 in so far as clerical or typographical errors are involved. The correction or
change of such matters can now be made through administrative proceedings
and without the need for a judicial order. In effect, RA 9048 removed from the
ambit of Rule 108 of the Rules of Court the correction of such errors.22 Rule 108
now applies only to substantial changes and corrections in entries in the civil
register.23
Section 2(c) of RA 9048 defines what a "clerical or typographical error" is:
SECTION 2. Definition of Terms. – As used in this Act, the following terms shall
mean:
xxx xxx xxx
(3) "Clerical or typographical error" refers to a mistake committed in the
performance of clerical work in writing, copying, transcribing or typing an entry
in the civil register that is harmless and innocuous, such as misspelled name or
misspelled place of birth or the like, which is visible to the eyes or obvious to
the understanding, and can be corrected or changed only by reference to other
existing record or records: Provided, however, That no correction must
involve the change of nationality, age, status or sex of the petitioner.
(emphasis supplied)
Under RA 9048, a correction in the civil registry involving the change of sex is
not a mere clerical or typographical error. It is a substantial change for which
the applicable procedure is Rule 108 of the Rules of Court.
The entries envisaged in Article 412 of the Civil Code and correctable under
Rule 108 of the Rules of Court are those provided in Articles 407 and 408 of the
Civil Code:24
ART. 407. Acts, events and judicial decrees concerning the civil status of
persons shall be recorded in the civil register.
ART. 408. The following shall be entered in the civil register:
(1) Births; (2) marriages; (3) deaths; (4) legal separations; (5) annulments of
marriage; (6) judgments declaring marriages void from the beginning; (7)
legitimations; (8) adoptions; (9) acknowledgments of natural children; (10)
naturalization; (11) loss, or (12) recovery of citizenship; (13) civil interdiction;
(14) judicial determination of filiation; (15) voluntary emancipation of a minor;
and (16) changes of name.
The acts, events or factual errors contemplated under Article 407 of the Civil
Code include even those that occur after birth.25 However, no reasonable
interpretation of the provision can justify the conclusion that it covers the
correction on the ground of sex reassignment.
To correct simply means "to make or set aright; to remove the faults or error
from" while to change means "to replace something with something else of the
same kind or with something that serves as a substitute."26 The birth certificate
of petitioner contained no error. All entries therein, including those
corresponding to his first name and sex, were all correct. No correction is
necessary.
Article 407 of the Civil Code authorizes the entry in the civil registry of certain
acts (such as legitimations, acknowledgments of illegitimate children and
naturalization), events (such as births, marriages, naturalization and deaths)
and judicial decrees (such as legal separations, annulments of marriage,
declarations of nullity of marriages, adoptions, naturalization, loss or recovery
of citizenship, civil interdiction, judicial determination of filiation and changes of
name). These acts, events and judicial decrees produce legal consequences
that touch upon the legal capacity, status and nationality of a person. Their
effects are expressly sanctioned by the laws. In contrast, sex reassignment is
not among those acts or events mentioned in Article 407. Neither is it
recognized nor even mentioned by any law, expressly or impliedly.
"Status" refers to the circumstances affecting the legal situation (that is, the
sum total of capacities and incapacities) of a person in view of his age,
nationality and his family membership.27
The status of a person in law includes all his personal qualities and relations,
more or less permanent in nature, not ordinarily terminable at his own
will, such as his being legitimate or illegitimate, or his being married or not. The
comprehensive term status… include such matters as the beginning and end of
legal personality, capacity to have rights in general, family relations, and its
various aspects, such as birth, legitimation, adoption, emancipation, marriage,
divorce, and sometimes even succession.28 (emphasis supplied)
A person’s sex is an essential factor in marriage and family relations. It is a part
of a person’s legal capacity and civil status. In this connection, Article 413 of
the Civil Code provides:
ART. 413. All other matters pertaining to the registration of civil status shall be
governed by special laws.
But there is no such special law in the Philippines governing sex reassignment
and its effects. This is fatal to petitioner’s cause.
Moreover, Section 5 of Act 3753 (the Civil Register Law) provides:
SEC. 5. Registration and certification of births. – The declaration of the
physician or midwife in attendance at the birth or, in default thereof, the
declaration of either parent of the newborn child, shall be sufficient for the
registration of a birth in the civil register. Such declaration shall be exempt from
documentary stamp tax and shall be sent to the local civil registrar not later
than thirty days after the birth, by the physician or midwife in attendance at the
birth or by either parent of the newborn child.
In such declaration, the person above mentioned shall certify to the following
facts: (a) date and hour of birth; (b) sex and nationality of infant; (c) names,
citizenship and religion of parents or, in case the father is not known, of the
mother alone; (d) civil status of parents; (e) place where the infant was born;
and (f) such other data as may be required in the regulations to be issued.
xxx xxx xxx (emphasis supplied)
Under the Civil Register Law, a birth certificate is a historical record of the facts
as they existed at the time of birth.29 Thus, the sex of a person is determined at
birth, visually done by the birth attendant (the physician or midwife) by
examining the genitals of the infant. Considering that there is no law legally
recognizing sex reassignment, the determination of a person’s sex made at the
time of his or her birth, if not attended by error,30 is immutable.31
When words are not defined in a statute they are to be given their common and
ordinary meaning in the absence of a contrary legislative intent. The words
"sex," "male" and "female" as used in the Civil Register Law and laws
concerning the civil registry (and even all other laws) should therefore be
understood in their common and ordinary usage, there being no legislative
intent to the contrary. In this connection, sex is defined as "the sum of
peculiarities of structure and function that distinguish a male from a female" 32 or
"the distinction between male and female."33 Female is "the sex that produces
ova or bears young"34 and male is "the sex that has organs to produce
spermatozoa for fertilizing ova."35 Thus, the words "male" and "female" in
everyday understanding do not include persons who have undergone sex
reassignment. Furthermore, "words that are employed in a statute which had at
the time a well-known meaning are presumed to have been used in that sense
unless the context compels to the contrary."36 Since the statutory language of
the Civil Register Law was enacted in the early 1900s and remains unchanged,
it cannot be argued that the term "sex" as used then is something alterable
through surgery or something that allows a post-operative male-to-female
transsexual to be included in the category "female."
For these reasons, while petitioner may have succeeded in altering his body
and appearance through the intervention of modern surgery, no law authorizes
the change of entry as to sex in the civil registry for that reason. Thus, there is
no legal basis for his petition for the correction or change of the entries in his
birth certificate.
Neither May Entries in the Birth Certificate As to First Name or Sex Be
Changed on the Ground of Equity
The trial court opined that its grant of the petition was in consonance with the
principles of justice and equity. It believed that allowing the petition would
cause no harm, injury or prejudice to anyone. This is wrong.
The changes sought by petitioner will have serious and wide-ranging legal and
public policy consequences. First, even the trial court itself found that the
petition was but petitioner’s first step towards his eventual marriage to his male
fiancé. However, marriage, one of the most sacred social institutions, is a
special contract of permanent union between a man and a woman.37 One of its
essential requisites is the legal capacity of the contracting parties who must be
a male and a female.38 To grant the changes sought by petitioner will
substantially reconfigure and greatly alter the laws on marriage and family
relations. It will allow the union of a man with another man who has undergone
sex reassignment (a male-to-female post-operative transsexual). Second, there
are various laws which apply particularly to women such as the provisions of
the Labor Code on employment of women,39 certain felonies under the Revised
Penal Code40 and the presumption of survivorship in case of calamities under
Rule 131 of the Rules of Court,41 among others. These laws underscore the
public policy in relation to women which could be substantially affected if
petitioner’s petition were to be granted.
It is true that Article 9 of the Civil Code mandates that "[n]o judge or court shall
decline to render judgment by reason of the silence, obscurity or insufficiency of
the law." However, it is not a license for courts to engage in judicial legislation.
The duty of the courts is to apply or interpret the law, not to make or amend it.
In our system of government, it is for the legislature, should it choose to do so,
to determine what guidelines should govern the recognition of the effects of sex
reassignment. The need for legislative guidelines becomes particularly
important in this case where the claims asserted are statute-based.
To reiterate, the statutes define who may file petitions for change of first name
and for correction or change of entries in the civil registry, where they may be
filed, what grounds may be invoked, what proof must be presented and what
procedures shall be observed. If the legislature intends to confer on a person
who has undergone sex reassignment the privilege to change his name and
sex to conform with his reassigned sex, it has to enact legislation laying down
the guidelines in turn governing the conferment of that privilege.
It might be theoretically possible for this Court to write a protocol on when a
person may be recognized as having successfully changed his sex. However,
this Court has no authority to fashion a law on that matter, or on anything else.
The Court cannot enact a law where no law exists. It can only apply or interpret
the written word of its co-equal branch of government, Congress.
Petitioner pleads that "[t]he unfortunates are also entitled to a life of happiness,
contentment and [the] realization of their dreams." No argument about that. The
Court recognizes that there are people whose preferences and orientation do
not fit neatly into the commonly recognized parameters of social convention
and that, at least for them, life is indeed an ordeal. However, the remedies
petitioner seeks involve questions of public policy to be addressed solely by the
legislature, not by the courts.
WHEREFORE, the petition is hereby DENIED.
Per curiam:*
This complaint for gross misconduct against Rene de Guzman (De Guzman),
Clerk, Regional Trial Court (RTC) of Guimba, Nueva Ecija, Branch 31, is an
offshoot of the complaint filed by Atty. Hugo B. Sansano, Jr. (Atty. Sansano)
relative to the alleged incompetence/inefficiency of the RTC of Guimba, Nueva
Ecija, Branch 31, in the transmittal of the records of Criminal Case No. 1144-G2
to the Court of Appeals.
In our Resolution dated September 17, 2007, we adopted the findings and
recommendation of the Office of the Court Administrator (OCA) declaring as
closed and terminated the administrative matter relative to the delay in the
transmittal of the records of Criminal Case No. 1144-G, and exonerating De
Guzman and Florencio M. Reyes (Reyes), the Officer-in-Charge of the RTC of
Guimba, Nueva Ecija, Branch 31.

Costs against petitioner. However, in the same Resolution, we also required De Guzman to comment on
the allegation that he is using illegal drugs and had been manifesting irrational
SO ORDERED. and queer behavior while at work. According to Reyes, De Guzman’s
manifestations of absurd behavior prompted Judge Napoleon R. Sta. Romana
(Judge Sta. Romana) to request the Philippine National Police Crime
Laboratory to perform a drug test on De Guzman. As alleged by Reyes:

x x x Mr. Rene de Guzman, the Docket Clerk, was [in] charge of the preparation
and transmission of the records on appeal x x x. Nonetheless, x x x Judge Sta.
Romana would x x x often x x x [remind him] about the transmittal of records of
the appealed cases [for more than] a dozen times, even personally confronting
Mr. Rene de Guzman about the matter, x x x though unsuccessfully x x x. Mr.
De Guzman would just x x x dismiss the subject in ridicule and with the empty
assurance that the task is as good as finished and what x x x need[s] to be
done [is] simply retyping of the corrected indices or the like and that he would
submit the same in [no] time at all. This was after a number of weeks from
A.M. No. P-08-2535 June 23, 2010 March 26, 2003 after Mr. De Guzman made the undersigned sign the
(Formerly A.M. OCA IPI No. 04- 2022-P and A.M. No. 04-434-RTC) transmittal of PP v. Manangan which he allegedly did not transmit before owing
to some minor corrections in the indexing. All too often, (it seems to have been
OFFICE OF THE COURT ADMINISTRATOR, Complainant, customary on his part, for this he would do to other pressing assignment) he
vs. would come to the office the next day, jubilant that the problem has been
FLORENCIO M. REYES,1 Officer-in-Charge, and RENE DE GUZMAN, Clerk, solved at last! But to no avail. This attitude seemingly bordering on the irrational
Regional Trial Court, Branch 31, Guimba, Nueva Ecija, Respondents. if not to say that a sense of responsibility is utterly lacking may have given cue
for Judge Sta. Romana to have Mr. De Guzman undergo a drug test x x x.3
DECISION
That Mr. De Guzman could brush aside even the personal importuning by the
judge is a fete no other of our co-employees dare emulate. On the contrary,
everybody is apprehensive for his well being and in his behalf. x x x
On May 24, 2004, Judge Sta. Romana requested the Nueva Ecija Provincial
Crime Laboratory Office to conduct a drug test on De Guzman. On May 26,
2004, De Guzman underwent a qualitative examination the results of which
yielded positive for Tetrahydrocannabinol metabolites (marijuana) and
Methamphetamine (shabu), both dangerous drugs.
In our Resolution of September 17, 2007, we required De Guzman to submit
his comment on the charge of misconduct relative to the alleged use of
prohibited drugs within 10 days from notice. Notwithstanding the Court’s
directive, De Guzman failed to file his Comment. Thus, on January 23, 2008,
we directed De Guzman to show cause why he should not be held in contempt
for failure to comply with the September 17, 2007 Resolution. At the same time,
we resolved to require him to submit his comment within 10 days from notice.
De Guzman complied with our directive only on March 12, 2008. In his letter,
De Guzman claimed that he failed to comply with the Court’s directive because
he lost his copy of the September 17, 2007 Resolution.
Treating De Guzman’s letter as his Comment, we referred the same to the OCA
for evaluation, report and recommendation. The OCA submitted its Report and
Recommendation on July 23, 2008 which reads in part:
xxxx
Noticeably, respondent de Guzman did not challenge the authenticity and
validity of the chemistry report of the Nueva Ecija Provincial Crime Laboratory
Office which found him positive for "marijuana" and "shabu". He did not also
promptly submit another test report or other document to controvert the drug
test report. His plain refutation of the charge and his willingness to submit
himself now to a drug test are token attempts at candor and assertion of
innocence. These perfunctory attempts cannot prevail over the solitary yet
compelling evidence of misconduct for use of prohibited drugs.
Relative to respondent’s delay in filing his comment to the charge of
misconduct, his claim that he "lost and misplaced (his) copy of said resolution,
and for that (he) almost forgot about it" is neither a valid reason nor an excuse
for the delay in complying with the order of the Court. His flippant attitude
towards the repeated orders of the Court to explain his conduct does not merit
consideration and justification for delay.
It is settled that respondent’s "indifference to [the resolutions] requiring him to
comment on the accusation(s) in the complaint thoroughly and substantially is
gross misconduct, and may even be considered as outright disrespect to the
Court." After all, a resolution of the Supreme Court is not a mere request and
should be complied with promptly and completely. Such failure to comply
accordingly betrays not only a recalcitrant streak in character, but has likewise
been considered as an utter lack of interest to remain with, if not contempt of
the judicial system.
It should be mentioned that this is not the first instance that respondent is
ordered to account for his failure to comply with a court order. Earlier, he was
required to explain to the Court his failure to promptly submit a copy of the
affidavit of retired court stenographer Jorge Caoile and to show cause why he
should not be administratively dealt with for his failure to comply with a show
cause order.
For failure to overcome the charge of use of prohibited drugs and to
satisfactorily explain his failure to submit promptly his compliance to the Court’s
show cause order, respondent may be held guilty of two counts of gross
misconduct.
The OCA thus submitted the following recommendations for consideration of
the Court viz:
1. The instant matter be RE-DOCKETED as a regular administrative case; and
2. Respondent Rene de Guzman be found guilty of gross misconduct and
accordingly be DISMISSED from the service effective immediately with
forfeiture of all benefits except accrued leave credits, with prejudice to his re-
employment in any branch or instrumentality of the government, including
government-owned or controlled agencies, corporations and financial
institutions.4
On August 27, 2008, we required De Guzman to manifest within 10 days from
receipt whether he is willing to submit the case for resolution on the basis of the
pleadings/records already filed and submitted. As before, De Guzman simply As correctly observed by the OCA, De Guzman has shown his propensity to
ignored our directive. Consequently, on September 28, 2009, we deemed defy the directives of this Court.5 However, at this juncture, we are no longer
waived the filing of De Guzman’s manifestation. wont to countenance such disrespectful behavior. As we have categorically
declared in Office of the Court Administrator v. Clerk of Court Fe P. Ganzan,
Our Ruling MCTC, Jasaan, Claveria, Misamis Oriental:6
We adopt the findings and recommendation of the OCA. x x x A resolution of the Supreme Court should not be construed as a mere
request, and should be complied with promptly and completely. Such failure to
We note that De Guzman is adept at ignoring the Court’s directives. In his
comply betrays, not only a recalcitrant streak in character, but also disrespect
letter-explanation in the administrative matter relative to the delay in the
for the lawful order and directive of the Court. Furthermore, this contumacious
transmittal of the records of Criminal Case No. 1144-G, he requested for a
conduct of refusing to abide by the lawful directives issued by the Court has
period of 10 days or until November 15, 2004 within which to submit the
likewise been considered as an utter lack of interest to remain with, if not
Affidavit of George Caoile (Caoile), the retired Stenographer, as part of his
contempt of, the system. Ganzan’s transgression is highlighted even more by
comment. However, despite the lapse of five months, De Guzman still failed to
the fact that she is an employee of the Judiciary, who, more than an ordinary
submit Caoile’s affidavit. Subsequently, we furnished him with a copy of the
citizen, should be aware of her duty to obey the orders and processes of the
April 18, 2005 Resolution wherein we mentioned that we are awaiting his
Supreme Court without delay. x x x
submission of the affidavit of Caoile which shall be considered as part of his
(De Guzman’s) comment. Anent the use of illegal drugs, we have upheld in Social Justice Society (SJS)
v. Dangerous Drugs Board7 the validity and constitutionality of the mandatory
Nine months from the time he undertook to submit the affidavit of Caoile, De
but random drug testing of officers and employees of both public and private
Guzman has yet to comply with his undertaking. Thus, on August 10, 2005, we
offices. As regards public officers and employees, we specifically held that:
required De Guzman to show cause why he should not be disciplinarily dealt
with or held in contempt for such failure. Like their counterparts in the private sector, government officials and
employees also labor under reasonable supervision and restrictions imposed
Unfortunately, De Guzman merely ignored our show cause order.
by the Civil Service law and other laws on public officers, all enacted to
Consequently, on November 20, 2006, we imposed upon him a fine of
promote a high standard of ethics in the public service. And if RA 9165 passes
P1,000.00. Finally, on January 24, 2007, or after the lapse of one year and two
the norm of reasonableness for private employees, the more reason that it
months, De Guzman submitted the affidavit of Caoile.
should pass the test for civil servants, who, by constitutional demand, are
Similarly, we also required De Guzman to file his comment within 10 days from required to be accountable at all times to the people and to serve them
notice as regards the allegation that he was using prohibited drugs. However, with utmost responsibility and efficiency.8
he again ignored our directive as contained in the Resolution of September 17,
Parenthetically, in A.M. No. 06-1-01-SC9 dated January 17, 2006, the Court has
2007. Thus, on January 23, 2008, we required him to show cause why he
adopted guidelines for a program to deter the use of dangerous drugs and
should not be held in contempt for such failure. By way of explanation, De
institute preventive measures against drug abuse for the purpose of eliminating
Guzman submitted a letter dated March 12, 2008 wherein he claimed that he
the hazards of drug abuse in the Judiciary, particularly in the first and second
failed to file his comment on the charge of miscondouct because he allegedly
level courts. The objectives of the said program are as follows:
lost his copy of the said September 17, 2007 Resolution.
1. To detect the use of dangerous drugs among lower court employees, impose
Finally, on August 27, 2008, we required De Guzman to manifest whether he is
disciplinary sanctions, and provide administrative remedies in cases where an
willing to submit the case for resolution based on the pleadings submitted. As
employee is found positive for dangerous drug use.
before, he failed to comply with the same.
2. To discourage the use and abuse of dangerous drugs among first and
second level court employees and enhance awareness of their adverse effects
by information dissemination and periodic random drug testing.
3. To institute other measures that address the menace of drug abuse within
the personnel of the Judiciary.
In the instant administrative matter, De Guzman never challenged the
authenticity of the Chemistry Report of the Nueva Ecija Provincial Crime
Laboratory Office. Likewise, the finding that De Guzman was found positive for
use of marijuana and shabu remains unrebutted. De Guzman’s general denial
that he is not a drug user cannot prevail over this compelling evidence.
The foregoing constitutes more than substantial evidence that De Guzman was
indeed found positive for use of dangerous drugs. In Dadulo v. Court of
Appeals,10 we held that "(a)dministrative proceedings are governed by the
‘substantial evidence rule.’ Otherwise stated, a finding of guilt in an
administrative case would have to be sustained for as long as it is supported by
substantial evidence that the respondent has committed acts stated in the
complaint. Substantial evidence is more than a mere scintilla of evidence. It
means such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion, even if other minds equally reasonable might
conceivably opine otherwise."11
This Court is a temple of justice. Its basic duty and responsibility is the
dispensation of justice. As dispensers of justice, all members and employees of
the Judiciary are expected to adhere strictly to the laws of the land, one of
which is Republic Act No. 916512 which prohibits the use of dangerous drugs.13
The Court has adhered to the policy of safeguarding the welfare, efficiency, and
well-being not only of all the court personnel, but also that of the general public
whom it serves. The Court will not allow its front-line representatives, like De
Guzman, to put at risk the integrity of the whole judiciary. As we held in Baron
v. Anacan,14 "(t)he image of a court of justice is mirrored in the conduct, official
and otherwise, of the personnel who work thereat. Thus, the conduct of a
person serving the judiciary must, at all times, be characterized by propriety
and decorum and above all else, be above suspicion so as to earn and keep
the respect of the public for the judiciary. The Court would never countenance
any conduct, act or omission on the part of all those in the administration of
justice, which will violate the norm of public accountability and diminish or even
just tend to diminish the faith of the people in the judiciary."
Article XI of the Constitution mandates that:
SECTION 1. Public office is a public trust. Public officers and employees must
at all times be accountable to the people and serve them with utmost
responsibility, integrity, loyalty, and efficiency, act with patriotism and justice,
and lead modest lives.
De Guzman’s use of prohibited drugs has greatly affected his efficiency in the
performance of his functions. De Guzman did not refute the observation of his
superior, Judge Sta. Romana, that as a criminal docket court clerk, he (De
Guzman) was totally inept and incompetent. Hence, to get across his
displeasure and dissatisfaction with his job performance, Judge Sta. Romana
gave De Guzman an unsatisfactory rating.
Moreover, De Guzman’s efficiency as a custodian of court records is also totally
wanting. As early as May 12, 2004, Judge Sta. Romana issued a Memorandum
addressed to De Guzman relative to the "sleeping cases" inside the latter’s
drawer. It would appear that several cases have not been proceeded upon
because De Guzman hid the records of the same inside his drawer. The text of
the said Memorandum reads:
An examination of the records found in your drawer reveal that the following
cases have not moved because you have not brought the same to the attention
of the Presiding Judge, to wit:
1. Crim. Case No. 1849-C, PP v. Ruben Villanueva – Order of transmittal to the
Office of the Provincial Prosecutor of Nueva Ecija dated August 6, 2003 to
resolve the Motion for Reconsideration.
Resolution of the Provincial Prosecutor dated September 23, 2003 denying the
Motion for Reconsideration and transmitting the records to the RTC, Br. 31,
Guimba, Nueva Ecija received by this court on September 24, 2003;
2. Crim. Case No. 1993-G, PP vs. JOJO SUPNET – Information dated October
14, 2002 received by this Court on November 18, 2002;
3. Crim. Case No. 2013-G, PP vs. Brgy. Capt. BAYANI CAMIS – Information
dated September 23, 2002 received by this court on January 24, 2003;
4. Crim. Case No. 2007-G, PP vs. Armando Marcos – Information dated June
23, 2002; Records received on January 2, 2003.
The Presiding Judge caused the issuance of finding of probable causes and the
corresponding Warrants of Arrest. You are hereby ordered to assist the
OIC/Clerk of Court in sending forthwith the Warrants of Arrest to the proper
agencies for implementation.
In the same vein, Reyes also put forth the absurd behavioral manifestations of
De Guzman. According to Reyes, Judge Sta. Romana would always remind De
Guzman to prepare and transmit the complete records of the appealed cases.
However, De Guzman would only make empty assurances to perform his task.
Notwithstanding the reminders of his superiors, De Guzman would still fail to
transmit the records. Instead, he would report the next day and jubilantly
declare that the problem has been solved at last.
In fine, we agree with the OCA that by his repeated and contumacious conduct
of disrespecting the Court’s directives, De Guzman is guilty of gross
misconduct and has already forfeited his privilege of being an employee of the
Court. Likewise, we can no longer countenance his manifestations of queer
behavior, bordering on absurd, irrational and irresponsible, because it has
greatly affected his job performance and efficiency. By using prohibited drugs,
and being a front-line representative of the Judiciary, De Guzman has exposed
to risk the very institution which he serves. It is only by weeding out the likes of
De Guzman from the ranks that we would be able to preserve the integrity of
this institution.
actions against erring justices, judges and court personnel. Neither should such
policy be used to restrict the Court’s power to preserve and maintain the
Judiciary’s honor, dignity and integrity and public confidence that can only be
achieved by imposing strict and rigid standards of decency and propriety
governing the conduct of justices, judges and court employees.
Likewise, we cannot subscribe to the idea that De Guzman’s irrational behavior
stems solely from his being a drug user. Such queer behavior can be attributed
to several factors. However, it cannot by any measure be categorically stated at
this point that it can be attributed solely to his being a drug user.
Finally, it must be emphasized at this juncture that De Guzman’s dismissal is
not grounded only on his being a drug user. His outright dismissal from the
service is likewise anchored on his contumacious and repeated acts of not
heeding the directives of this Court. As we have already stated, such attitude
betrays not only a recalcitrant streak of character, but also disrespect for the
lawful orders and directives of the Court.
ACCORDINGLY, Rene de Guzman, Clerk, Regional Trial Court of Guimba,
Nueva Ecija, Branch 31, is hereby DISMISSED from the service with forfeiture
of all retirement benefits, except accrued leave credits, and disqualification from
reinstatement or appointment to any public office, including government-owned
or controlled corporations.

Two justices disagree with the majority opinion. They opine that the Court’s SO ORDERED.
action in this case contravenes an express public policy, i.e., "imprisonment for
drug dealers and pushers, rehabilitation for their victims." They also posit that
De Guzman’s failure to properly perform his duties and promptly respond to
Court orders precisely springs from his drug addiction that requires
rehabilitation. Finally, they state that the Court’s real strength is not in its
righteousness but in its willingness to understand that men are not perfect and
that there is a time to punish and a time to give a chance for contrition and
change.

However, the legislative policy as embodied in Republic Act No. 9165 in

deterring dangerous drug use by resort to sustainable programs of
rehabilitation and treatment must be considered in light of this Court’s
constitutional power of administrative supervision over courts and court
personnel. The legislative power imposing policies through laws is not unlimited
and is subject to the substantive and constitutional limitations that set
parameters both in the exercise of the power itself and the allowable subjects of
legislation.15 As such, it cannot limit the Court’s power to impose disciplinary
 G.R. No. L-26379 December 27, 1969

WILLIAM C. REAGAN, ETC., petitioner,

vs.
COMMISSIONER OF INTERNAL REVENUE, respondent.

Quasha, Asperilla, Blanco, Zafra and Tayag for petitioner.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General
Felicisimo R. Rosete, Solicitor Lolita O. Gal-lang and Special Attorney Gamaliel
H. Mantolino for respondent.
FERNANDO, J.:
A question novel in character, the answer to which has far-reaching
implications, is raised by petitioner William C. Reagan, at one time a civilian
employee of an American corporation providing technical assistance to the
United States Air Force in the Philippines. He would dispute the payment of the
income tax assessed on him by respondent Commissioner of Internal Revenue
on an amount realized by him on a sale of his automobile to a member of the
United States Marine Corps, the transaction having taken place at the Clark
Field Air Base at Pampanga. It is his contention, seriously and earnestly
expressed, that in legal contemplation the sale was made outside Philippine
territory and therefore beyond our jurisdictional power to tax.
Such a plea, far-fetched and implausible, on its face betraying no kinship with
reality, he would justify by invoking, mistakenly as will hereafter be more fully
shown an observation to that effect in a 1951 opinion, 1 petitioner ignoring that
such utterance was made purely as a flourish of rhetoric and by way of
emphasizing the decision reached, that the trading firm as purchaser of army
goods must respond for the sales taxes due from an importer, as the American
armed forces being exempt could not be taxed as such under the National
Internal Revenue Code.2 Such an assumption, inspired by the commendable
aim to render unavailing any attempt at tax evasion on the part of such vendee,
found expression anew in a 1962 decision,3 coupled with the reminder however,
to render the truth unmistakable, that "the areas covered by the United States
Military Bases are not foreign territories both in the political and geographical
sense."
As thus clarified, it is manifest that such a view amounts at most to a legal
fiction and is moreover obiter. It certainly cannot control the resolution of the
specific question that confronts us. We declare our stand in an unequivocal
manner. The sale having taken place on what indisputably is Philippine
territory, petitioner's liability for the income tax due as a result thereof was
unavoidable. As the Court of Tax Appeals reached a similar conclusion, we
sustain its decision now before us on appeal.
In the decision appealed from, the Court of Tax Appeals, after stating the
nature of the case, started the recital of facts thus: "It appears that petitioner, a
citizen of the United States and an employee of Bendix Radio, Division of
Bendix Aviation Corporation, which provides technical assistance to the United
States Air Force, was assigned at Clark Air Base, Philippines, on or about July
7, 1959 ... . Nine (9) months thereafter and before his tour of duty expired,
petitioner imported on April 22, 1960 a tax-free 1960 Cadillac car with
accessories valued at $6,443.83, including freight, insurance and other
charges."4 Then came the following: "On July 11, 1960, more than two (2)
months after the 1960 Cadillac car was imported into the Philippines, petitioner
requested the Base Commander, Clark Air Base, for a permit to sell the car,
which was granted provided that the sale was made to a member of the United
States Armed Forces or a citizen of the United States employed in the U.S.
military bases in the Philippines. On the same date, July 11, 1960, petitioner
sold his car for $6,600.00 to a certain Willie Johnson, Jr. (Private first class),
United States Marine Corps, Sangley Point, Cavite, Philippines, as shown by a
Bill of Sale . . . executed at Clark Air Base. On the same date, Pfc. Willie
(William) Johnson, Jr. sold the car to Fred Meneses for P32,000.00 as
evidenced by a deed of sale executed in Manila."5
As a result of the transaction thus made, respondent Commissioner of Internal
Revenue, after deducting the landed cost of the car as well as the personal
exemption to which petitioner was entitled, fixed as his net taxable income
arising from such transaction the amount of P17,912.34, rendering him liable
for income tax in the sum of P2,979.00. After paying the sum, he sought a
refund from respondent claiming that he was exempt, but pending action on his
request for refund, he filed the case with the Court of Tax Appeals seeking
recovery of the sum of P2,979.00 plus the legal rate of interest.
As noted in the appealed decision: "The only issue submitted for our resolution
is whether or not the said income tax of P2,979.00 was legally collected by
respondent for petitioner."6 After discussing the legal issues raised, primarily
the contention that the Clark Air Base "in legal contemplation, is a base outside
the Philippines" the sale therefore having taken place on "foreign soil", the
Court of Tax Appeals found nothing objectionable in the assessment and
thereafter the payment of P2,979.00 as income tax and denied the refund on
the same. Hence, this appeal predicated on a legal theory we cannot accept.
Petitioner cannot make out a case for reversal.
1. Resort to fundamentals is unavoidable to place things in their proper
perspective, petitioner apparently feeling justified in his refusal to defer to basic
postulates of constitutional and international law, induced no doubt by the
weight he would accord to the observation made by this Court in the two
opinions earlier referred to. To repeat, scant comfort, if at all is to be derived
from such an obiter dictum, one which is likewise far from reflecting the fact as
it is.
Nothing is better settled than that the Philippines being independent and
sovereign, its authority may be exercised over its entire domain. There is no
portion thereof that is beyond its power. Within its limits, its decrees are
supreme, its commands paramount. Its laws govern therein, and everyone to
whom it applies must submit to its terms. That is the extent of its jurisdiction,
both territorial and personal. Necessarily, likewise, it has to be exclusive. If it
were not thus, there is a diminution of its sovereignty.
It is to be admitted that any state may, by its consent, express or implied,
submit to a restriction of its sovereign rights. There may thus be a curtailment of
what otherwise is a power plenary in character. That is the concept of
sovereignty as auto-limitation, which, in the succinct language of Jellinek, "is
the property of a state-force due to which it has the exclusive capacity of legal
self-determination and self-restriction."7 A state then, if it chooses to, may
refrain from the exercise of what otherwise is illimitable competence.
Its laws may as to some persons found within its territory no longer control. Nor
does the matter end there. It is not precluded from allowing another power to
participate in the exercise of jurisdictional right over certain portions of its
territory. If it does so, it by no means follows that such areas become
impressed with an alien character. They retain their status as native soil. They
are still subject to its authority. Its jurisdiction may be diminished, but it does not
disappear. So it is with the bases under lease to the American armed forces by
virtue of the military bases agreement of 1947. They are not and cannot be
foreign territory.
Decisions coming from petitioner's native land, penned by jurists of repute,
speak to that effect with impressive unanimity. We start with the citation from
Chief Justice Marshall, announced in the leading case of Schooner Exchange
v. M'Faddon,8 an 1812 decision: "The jurisdiction of the nation within its own
territory is necessarily exclusive and absolute. It is susceptible of no limitation
not imposed by itself. Any restriction upon it, deriving validity from an external
source, would imply a diminution of its sovereignty to the extent of the
restriction, and an investment of that sovereignty to the same extent in that
power which could impose such restriction." After which came this paragraph:
"All exceptions, therefore, to the full and complete power of a nation within its
own territories, must be traced up to the consent of the nation itself. They can
flow from no other legitimate source."
Chief Justice Taney, in an 1857 decision,9 affirmed the fundamental principle of
everyone within the territorial domain of a state being subject to its commands:
"For undoubtedly every person who is found within the limits of a government,
whether the temporary purposes or as a resident, is bound by its laws." It is no
exaggeration then for Justice Brewer to stress that the United States
government "is one having jurisdiction over every foot of soil within its territory,
and acting directly upon each [individual found therein]; . . ."10
Not too long ago, there was a reiteration of such a view, this time from the pen
of Justice Van Devanter. Thus: "It now is settled in the United States and
recognized elsewhere that the territory subject to its jurisdiction includes the
land areas under its dominion and control the ports, harbors, bays, and other in
closed arms of the sea along its coast, and a marginal belt of the sea extending
from the coast line outward a marine league, or 3 geographic miles."11 He could
cite moreover, in addition to many American decisions, such eminent treatise-
writers as Kent, Moore, Hyde, Wilson, Westlake, Wheaton and Oppenheim.
As a matter of fact, the eminent commentator Hyde in his three-volume work on
International Law, as interpreted and applied by the United States, made clear
that not even the embassy premises of a foreign power are to be considered
outside the territorial domain of the host state. Thus: "The ground occupied by
an embassy is not in fact the territory of the foreign State to which the premises
belong through possession or ownership. The lawfulness or unlawfulness of
acts there committed is determined by the territorial sovereign. If an attache
commits an offense within the precincts of an embassy, his immunity from
prosecution is not because he has not violated the local law, but rather for the
reason that the individual is exempt from prosecution. If a person not so
exempt, or whose immunity is waived, similarly commits a crime therein, the
territorial sovereign, if it secures custody of the offender, may subject him to
prosecution, even though its criminal code normally does not contemplate the
punishment of one who commits an offense outside of the national domain. It is
not believed, therefore, that an ambassador himself possesses the right to
exercise jurisdiction, contrary to the will of the State of his sojourn, even within
his embassy with respect to acts there committed. Nor is there apparent at the
present time any tendency on the part of States to acquiesce in his exercise of
it."12
2. In the light of the above, the first and crucial error imputed to the Court of Tax
Appeals to the effect that it should have held that the Clark Air Force is foreign
soil or territory for purposes of income tax legislation is clearly without support
in law. As thus correctly viewed, petitioner's hope for the reversal of the
decision completely fades away. There is nothing in the Military Bases
Agreement that lends support to such an assertion. It has not become foreign
soil or territory. This country's jurisdictional rights therein, certainly not
excluding the power to tax, have been preserved. As to certain tax matters, an
appropriate exemption was provided for.
Petitioner could not have been unaware that to maintain the contrary would be
to defy reality and would be an affront to the law. While his first assigned error
is thus worded, he would seek to impart plausibility to his claim by the
ostensible invocation of the exemption clause in the Agreement by virtue of
which a "national of the United States serving in or employed in the Philippines
in connection with the construction, maintenance, operation or defense of the
bases and residing in the Philippines only by reason of such employment" is not
to be taxed on his income unless "derived from Philippine source or sources
other than the United States sources."13 The reliance, to repeat, is more
apparent than real for as noted at the outset of this opinion, petitioner places
more faith not on the language of the provision on exemption but on a
sentiment given expression in a 1951 opinion of this Court, which would be
made to yield such an unwarranted interpretation at war with the controlling
constitutional and international law principles. At any rate, even if such a
contention were more adequately pressed and insisted upon, it is on its face
devoid of merit as the source clearly was Philippine.
In Saura Import and Export Co. v. Meer,14 the case above referred to, this Court
affirmed a decision rendered about seven months previously,15 holding liable as
an importer, within the contemplation of the National Internal Revenue Code
provision, the trading firm that purchased army goods from a United States
government agency in the Philippines. It is easily understandable why. If it were
not thus, tax evasion would have been facilitated. The United States forces that
brought in such equipment later disposed of as surplus, when no longer needed
for military purposes, was beyond the reach of our tax statutes.
Justice Tuason, who spoke for the Court, adhered to such a rationale, quoting
extensively from the earlier opinion. He could have stopped there. He chose not
to do so. The transaction having occurred in 1946, not so long after the
liberation of the Philippines, he proceeded to discuss the role of the American
military contingent in the Philippines as a belligerent occupant. In the course of
such a dissertion, drawing on his well-known gift for rhetoric and cognizant that
he was making an as if statement, he did say: "While in army bases or
installations within the Philippines those goods were in contemplation of law on
foreign soil."
It is thus evident that the first, and thereafter the controlling, decision as to the
liability for sales taxes as an importer by the purchaser, could have been
reached without any need for such expression as that given utterance by
Justice Tuason. Its value then as an authoritative doctrine cannot be as much
as petitioner would mistakenly attach to it. It was clearly obiter not being
necessary for the resolution of the issue before this Court.16 It was an opinion
"uttered by the way."17 It could not then be controlling on the question before us
now, the liability of the petitioner for income tax which, as announced at the
opening of this opinion, is squarely raised for the first time.18
On this point, Chief Justice Marshall could again be listened to with profit. Thus:
"It is a maxim, not to be disregarded, that general expressions, in every opinion,
are to be taken in connection with the case in which those expressions are
used. If they go beyond the case, they may be respected, but ought not to
control the judgment in a subsequent suit when the very point is presented for
decision."19
Nor did the fact that such utterance of Justice Tuason was cited in Co Po v.
Collector of Internal Revenue,20 a 1962 decision relied upon by petitioner, put a
different complexion on the matter. Again, it was by way of pure embellishment,
there being no need to repeat it, to reach the conclusion that it was the
purchaser of army goods, this time from military bases, that must respond for
the advance sales taxes as importer. Again, the purpose that animated the
reiteration of such a view was clearly to emphasize that through the
employment of such a fiction, tax evasion is precluded. What is more, how far
divorced from the truth was such statement was emphasized by Justice
Barrera, who penned the Co Po opinion, thus: "It is true that the areas covered
by the United States Military Bases are not foreign territories both in the political
and geographical sense."21
Justice Tuason moreover made explicit that rather than corresponding with
reality, what was said by him was in the way of a legal fiction. Note his stress
on "in contemplation of law." To lend further support to a conclusion already
announced, being at that a confirmation of what had been arrived at in the
earlier case, distinguished by its sound appreciation of the issue then before
this Court and to preclude any tax evasion, an observation certainly not to be
taken literally was thus given utterance.
This is not to say that it should have been ignored altogether afterwards. It
could be utilized again, as it undoubtedly was, especially so for the purpose
intended, namely to stigmatize as without support in law any attempt on the
part of a taxpayer to escape an obligation incumbent upon him. So it was
quoted with that end in view in the Co Po case. It certainly does not justify any
effort to render futile the collection of a tax legally due, as here. That was
farthest from the thought of Justice Tuason.
What is more, the statement on its face is, to repeat, a legal fiction. This is not
to discount the uses of a fictio juris in the science of the law. It was Cardozo
who pointed out its value as a device "to advance the ends of justice" although
at times it could be "clumsy" and even "offensive". 22 Certainly, then, while far
from objectionable as thus enunciated, this observation of Justice Tuason could
be misused or misconstrued in a clumsy manner to reach an offensive result.
To repeat, properly used, a legal fiction could be relied upon by the law, as
Frankfurter noted, in the pursuit of legitimate ends.23 Petitioner then would be
well-advised to take to heart such counsel of care and circumspection before
invoking not a legal fiction that would avoid a mockery of the law by avoiding
tax evasion but what clearly is a misinterpretation thereof, leading to results that
would have shocked its originator.
The conclusion is thus irresistible that the crucial error assigned, the only one
that calls for discussion to the effect that for income tax purposes the Clark Air
Force Base is outside Philippine territory, is utterly without merit. So we have
said earlier.
3. To impute then to the statement of Justice Tuason the meaning that
petitioner would fasten on it is, to paraphrase Frankfurter, to be guilty of
succumbing to the vice of literalness. To so conclude is, whether by design or
inadvertence, to misread it. It certainly is not susceptible of the mischievous
consequences now sought to be fastened on it by petitioner.
That it would be fraught with such peril to the enforcement of our tax statutes
on the military bases under lease to the American armed forces could not have
been within the contemplation of Justice Tuason. To so attribute such a bizarre WHEREFORE, the decision of the Court of Tax Appeals of May 12, 1966
consequence is to be guilty of a grave disservice to the memory of a great denying the refund of P2,979.00 as the income tax paid by petitioner is
jurist. For his real and genuine sentiment on the matter in consonance with the affirmed. With costs against petitioner.
imperative mandate of controlling constitutional and international law concepts
was categorically set forth by him, not as an obiter but as the rationale of the Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro and
decision, in People v. Acierto24 thus: "By the [Military Bases] Agreement, it Teehankee, JJ., concur.
should be noted, the Philippine Government merely consents that the United
Reyes, J.B.L., J., concurs in the result.
States exercise jurisdiction in certain cases. The consent was given purely as a
matter of comity, courtesy, or expediency over the bases as part of the Barredo, J., took no part.
Philippine territory or divested itself completely of jurisdiction over offenses
committed therein."

Nor did he stop there. He did stress further the full extent of our territorial
jurisdiction in words that do not admit of doubt. Thus: "This provision is not and
can not on principle or authority be construed as a limitation upon the rights of
the Philippine Government. If anything, it is an emphatic recognition and
reaffirmation of Philippine sovereignty over the bases and of the truth that all
jurisdictional rights granted to the United States and not exercised by the latter
are reserved by the Philippines for itself."25

It is in the same spirit that we approach the specific question confronting us in

this litigation. We hold, as announced at the outset, that petitioner was liable for
the income tax arising from a sale of his automobile in the Clark Field Air Base,
which clearly is and cannot otherwise be other than, within our territorial
jurisdiction to tax.

4. With the mist thus lifted from the situation as it truly presents itself, there is
nothing that stands in the way of an affirmance of the Court of Tax Appeals
decision. No useful purpose would be served by discussing the other assigned
errors, petitioner himself being fully aware that if the Clark Air Force Base is to
be considered, as it ought to be and as it is, Philippine soil or territory, his claim
for exemption from the income tax due was distinguished only by its futility.

There is further satisfaction in finding ourselves unable to indulge petitioner in

his plea for reversal. We thus manifest fealty to a pronouncement made time
and time again that the law does not look with favor on tax exemptions and that
he who would seek to be thus privileged must justify it by words too plain to be
mistaken and too categorical to be misinterpreted.26 Petitioner had not done so.
Petitioner cannot do so.
 G.R. No. 161414 January 17, 2005

SULTAN OSOP B. CAMID, petitioner,

vs.
THE OFFICE OF THE PRESIDENT, DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT, AUTONOMOUS REGION IN MUSLIM MINDANAO,
DEPARTMENT of FINANCE, DEPARTMENT of BUDGET AND MANAGEMENT, COMMISSION ON AUDIT, and the CONGRESS OF THE PHILIPPINES
(HOUSE of REPRESENTATIVES AND SENATE), respondents.

DECISION
TINGA, J.:
This Petition for Certiorari presents this Court with the prospect of our own
Brigadoon1 —the municipality of Andong, Lanao del Sur―which like its
counterpart in filmdom, is a town that is not supposed to exist yet is anyway
insisted by some as actually alive and thriving. Yet unlike in the movies, there is
nothing mystical, ghostly or anything even remotely charming about the
purported existence of Andong. The creation of the putative municipality was
declared void ab initio by this Court four decades ago, but the present petition
insists that in spite of this insurmountable obstacle Andong thrives on, and
hence, its legal personality should be given judicial affirmation. We disagree.
The factual antecedents derive from the promulgation of our ruling in Pelaez v.
Auditor General2 in 1965. As discussed therein, then President Diosdado
Macapagal issued several Executive Orders3 creating thirty-three (33)
municipalities in Mindanao. Among them was Andong in Lanao del Sur which
was created by virtue of Executive Order No. 107.4
These executive orders were issued after legislative bills for the creation of
municipalities involved in that case had failed to pass Congress.5 President
Diosdado Macapagal justified the creation of these municipalities citing his
powers under Section 68 of the Revised Administrative Code. Then Vice-
President Emmanuel Pelaez filed a special civil action for a writ of prohibition,
alleging in main that the Executive Orders were null and void, Section 68
having been repealed by Republic Act No. 2370,6 and said orders constituting
an undue delegation of legislative power.7
After due deliberation, the Court unanimously held that the challenged
Executive Orders were null and void. A majority of five justices, led by the
ponente, Justice (later Chief Justice) Roberto Concepcion, ruled that Section
68 of the Revised Administrative Code did not meet the well-settled
requirements for a valid delegation of legislative power to the executive
branch,8 while three justices opined that the nullity of the issuances was the
consequence of the enactment of the 1935 Constitution, which reduced the
power of the Chief Executive over local governments.9 Pelaez was disposed in
this wise:
WHEREFORE, the Executive Orders in question are declared null and void ab
initio and the respondent permanently restrained from passing in audit any
expenditure of public funds in implementation of said Executive Orders or any
disbursement by the municipalities above referred to. It is so ordered.10
Among the Executive Orders annulled was Executive Order No. 107 which
created the Municipality of Andong. Nevertheless, the core issue presented in
the present petition is the continued efficacy of the judicial annulment of the
Municipality of Andong.
Petitioner Sultan Osop B. Camid (Camid) represents himself as a current
resident of Andong,11 suing as a private citizen and taxpayer whose locus
standi "is of public and paramount interest especially to the people of the
Municipality of Andong, Province of Lanao del Sur."12 He alleges that Andong
"has metamorphosed into a full-blown municipality with a complete set of
officials appointed to handle essential services for the municipality and its
constituents,"13 even though he concedes that since 1968, no person has been
appointed, elected or qualified to serve any of the elective local government
positions of Andong.14 Nonetheless, the municipality of Andong has its own high
school, Bureau of Posts, a Department of Education, Culture and Sports office,
and at least seventeen (17) "barangay units" with their own respective
chairmen.15 From 1964 until 1972, according to Camid, the public officials of
Andong "have been serving their constituents through the minimal means and
resources with least (sic) honorarium and recognition from the Office of the
then former President Diosdado Macapagal." Since the time of Martial Law in
1972, Andong has allegedly been getting by despite the absence of public
funds, with the "Interim Officials" serving their constituents "in their own little
ways and means."16
In support of his claim that Andong remains in existence, Camid presents to
this Court a Certification issued by the Office of the Community Environment
and Natural Resources (CENRO) of the Department of Environment and
Natural Resources (DENR) certifying the total land area of the Municipality of
Andong, "created under Executive Order No. 107 issued [last] October 1,
1964."17 He also submits a Certification issued by the Provincial Statistics Office
of Marawi City concerning the population of Andong, which is pegged at
fourteen thousand fifty nine (14,059) strong. Camid also enumerates a list of
governmental agencies and private groups that allegedly recognize Andong,
and notes that other municipalities have recommended to the Speaker of the
Regional Legislative Assembly for the immediate implementation of the revival
or re-establishment of Andong.18
The petition assails a Certification dated 21 November 2003, issued by the
Bureau of Local Government Supervision of the Department of Interior and
Local Government (DILG).19 The Certification enumerates eighteen (18)
municipalities certified as "existing," per DILG records. Notably, these eighteen
(18) municipalities are among the thirty-three (33), along with Andong, whose
creations were voided by this Court in Pelaez. These municipalities are
Midaslip, Pitogo, Naga, and Bayog in Zamboanga del Sur; Siayan and Pres.
Manuel A. Roxas in Zamboanga del Norte; Magsaysay, Sta. Maria and New
Corella in Davao; Badiangan and Mina in Iloilo; Maguing in Lanao del Sur;
Gloria in Oriental Mindoro; Maasim in Sarangani; Kalilangan and Lantapan in
Bukidnon; and Maco in Compostela Valley.20
Camid imputes grave abuse of discretion on the part of the DILG "in not
classifying [Andong] as a regular existing municipality and in not including said
municipality in its records and official database as [an] existing regular
municipality."21 He characterizes such non-classification as unequal treatment
to the detriment of Andong, especially in light of the current recognition given to
the eighteen (18) municipalities similarly annulled by reason of Pelaez. As
appropriate relief, Camid prays that the Court annul the DILG Certification
dated 21 November 2003; direct the DILG to classify Andong as a "regular
existing municipality;" all public respondents, to extend full recognition and
support to Andong; the Department of Finance and the Department of Budget
and Management, to immediately release the internal revenue allotments of
Andong; and the public respondents, particularly the DILG, to recognize the
"Interim Local Officials" of Andong.22
Moreover, Camid insists on the continuing validity of Executive Order No. 107.
He argues that Pelaez has already been modified by supervening events
consisting of subsequent laws and jurisprudence. Particularly cited is our
Decision in Municipality of San Narciso v. Hon. Mendez,23 wherein the Court
affirmed the unique status of the municipality of San Andres in Quezon as a "de
facto municipal corporation."24 Similar to Andong, the municipality of San
Andres was created by way of executive order, precisely the manner which the
Court in Pelaez had declared as unconstitutional. Moreover, San Narciso cited,
as Camid does, Section 442(d) of the Local Government Code of 1991 as basis
for the current recognition of the impugned municipality. The provision reads:
Section 442. Requisites for Creation. - xxx
(d) Municipalities existing as of the date of the effectivity of this Code shall
continue to exist and operate as such. Existing municipal districts organized
pursuant to presidential issuances or executive orders and which have their
respective sets of elective municipal officials holding office at the time of the
effectivity of (the) Code shall henceforth be considered as regular
municipalities.25
There are several reasons why the petition must be dismissed. These can be
better discerned upon examination of the proper scope and application of
Section 442(d), which does not sanction the recognition of just any municipality.
This point shall be further explained further on.
Notably, as pointed out by the public respondents, through the Office of the
Solicitor General (OSG), the case is not a fit subject for the special civil actions
of certiorari and mandamus, as it pertains to the de novo appreciation of factual
questions. There is indeed no way to confirm several of Camid’s astonishing
factual allegations pertaining to the purported continuing operation of Andong in
the decades since it was annulled by this Court. No trial court has had the
opportunity to ascertain the validity of these factual claims, the appreciation of
which is beyond the function of this Court since it is not a trier of facts.
The importance of proper factual ascertainment cannot be gainsaid, especially
in light of the legal principles governing the recognition of de facto municipal
corporations. It has been opined that municipal corporations may exist by
prescription where it is shown that the community has claimed and exercised
corporate functions, with the knowledge and acquiescence of the legislature,
and without interruption or objection for period long enough to afford title by
prescription.26 These municipal corporations have exercised their powers for a
long period without objection on the part of the government that although no
charter is in existence, it is presumed that they were duly incorporated in the
first place and that their charters had been lost.27 They are especially common
in England, which, as well-worth noting, has existed as a state for over a
thousand years. The reason for the development of that rule in England is
understandable, since that country was settled long before the Roman
conquest by nomadic Celtic tribes, which could have hardly been expected to
obtain a municipal charter in the absence of a national legal authority.
In the United States, municipal corporations by prescription are less common,
but it has been held that when no charter or act of incorporation of a town can
be found, it may be shown to have claimed and exercised the powers of a town
with the knowledge and assent of the legislature, and without objection or
interruption for so long a period as to furnish evidence of a prescriptive right.28
What is clearly essential is a factual demonstration of the continuous exercise
by the municipal corporation of its corporate powers, as well as the
acquiescence thereto by the other instrumentalities of the state. Camid does
not have the opportunity to make an initial factual demonstration of those
circumstances before this Court. Indeed, the factual deficiencies aside, Camid’s
plaint should have undergone the usual administrative gauntlet and, once that
was done, should have been filed first with the Court of Appeals, which at least
would have had the power to make the necessary factual determinations.
Camid’s seeming ignorance of the principles of exhaustion of administrative
remedies and hierarchy of courts, as well as the concomitant prematurity of the
present petition, cannot be countenanced.
It is also difficult to capture the sense and viability of Camid’s present action.
The assailed issuance is the Certification issued by the DILG. But such
Certification does not pretend to bear the authority to create or revalidate a
municipality. Certainly, the annulment of the Certification will really do nothing
to serve Camid’s ultimate cause- the recognition of Andong. Neither does the
Certification even expressly refute the claim that Andong still exists, as there is
nothing in the document that comments on the present status of Andong.
Perhaps the Certification is assailed before this Court if only to present an
actual issuance, rather than a long-standing habit or pattern of action that can
be annulled through the special civil action of certiorari. Still, the relation of the
Certification to Camid’s central argument is forlornly strained.
These disquisitions aside, the central issue remains whether a municipality
whose creation by executive fiat was previously voided by this Court may attain
recognition in the absence of any curative or reimplementing statute.
Apparently, the question has never been decided before, San Narciso and its
kindred cases pertaining as they did to municipalities whose bases of creation
were dubious yet were never judicially nullified. The effect of Section 442(d) of
the Local Government Code on municipalities such as Andong warrants
explanation. Besides, the residents of Andong who belabor under the
impression that their town still exists, much less those who may comport
themselves as the municipality’s "Interim Government," would be well served by
a rude awakening.
The Court can employ a simplistic approach in resolving the substantive aspect
of the petition, merely by pointing out that the Municipality of Andong never
existed.29 Executive Order No. 107, which established Andong, was declared
"null and void ab initio" in 1965 by this Court in Pelaez, along with thirty-three
(33) other executive orders. The phrase "ab initio" means "from the
beginning,"30 "at first,"31 "from the inception."32 Pelaez was never reversed by
this Court but rather it was expressly affirmed in the cases of Municipality of
San Joaquin v. Siva,33 Municipality of Malabang v. Benito,34 and Municipality of
Kapalong v. Moya.35 No subsequent ruling by this Court declared Pelaez as
overturned or inoperative. No subsequent legislation has been passed since
1965 creating a Municipality of Andong. Given these facts, there is hardly any
reason to elaborate why Andong does not exist as a duly constituted
municipality.
This ratiocination does not admit to patent legal errors and has the additional
virtue of blessed austerity. Still, its sweeping adoption may not be advisedly
appropriate in light of Section 442(d) of the Local Government Code and our
ruling in Municipality of San Narciso, both of which admit to the possibility of de
facto municipal corporations.
To understand the applicability of Municipality of San Narciso and Section
442(b) of the Local Government Code to the situation of Andong, it is
necessary again to consider the ramifications of our decision in Pelaez.
The eminent legal doctrine enunciated in Pelaez was that the President was
then, and still is, not empowered to create municipalities through executive
issuances. The Court therein recognized "that the President has, for many
years, issued executive orders creating municipal corporations, and that the
same have been organized and in actual operation . . . ."36 However, the Court
ultimately nullified only those thirty-three (33) municipalities, including Andong,
created during the period from 4 September to 29 October 1964 whose
existence petitioner Vice-President Pelaez had specifically assailed before this
Court. No pronouncement was made as to the other municipalities which had
been previously created by the President in the exercise of power the Court
deemed unlawful.
Two years after Pelaez was decided, the issue again came to fore in
Municipality of San Joaquin v. Siva.37 The Municipality of Lawigan was created
by virtue of Executive Order No. 436 in 1961. Lawigan was not one of the
municipalities ordered annulled in Pelaez. A petition for prohibition was filed
contesting the legality of the executive order, again on the ground that Section
68 of the Revised Administrative Code was unconstitutional. The trial court
dismissed the petition, but the Supreme Court reversed the ruling and entered
a new decision declaring Executive Order No. 436 void ab initio. The Court
reasoned without elaboration that the issue had already been squarely taken up
and settled in Pelaez which agreed with the argument posed by the challengers
to Lawigan’s validity.38
In the 1969 case of Municipality of Malabang v. Benito,39 what was challenged
is the validity of the constitution of the Municipality of Balabagan in Lanao del
Sur, also created by an executive order,40 and which, similar to Lawigan, was
not one of the municipalities annulled in Pelaez. This time, the officials of
Balabagan invoked de facto status as a municipal corporation in order to
dissuade the Court from nullifying action. They alleged that its status as a de
facto corporation cannot be collaterally attacked but should be inquired into
directly in an action for quo warranto at the instance of the State, and not by a
private individual as it was in that case. In response, the Court conceded that
an inquiry into the legal existence of a municipality is reserved to the State in a
proceeding for quo warranto, but only if the municipal corporation is a de facto
corporation.41
Ultimately, the Court refused to acknowledge Balabagan as a de facto
corporation, even though it had been organized prior to the Court’s decision in
Pelaez. The Court declared void the executive order creating Balabagan and
restrained its municipal officials from performing their official duties and
functions.42 It cited conflicting American authorities on whether a de facto
corporation can exist where the statute or charter creating it is
unconstitutional.43 But the Court’s final conclusion was unequivocal that
Balabagan was not a de facto corporation.1awphi1.nét
In the cases where a de facto municipal corporation was recognized as such
despite the fact that the statute creating it was later invalidated, the decisions
could fairly be made to rest on the consideration that there was some other
valid law giving corporate vitality to the organization. Hence, in the case at bar,
the mere fact that Balabagan was organized at a time when the statute had not
been invalidated cannot conceivably make it a de facto corporation, as,
independently of the Administrative Code provision in question, there is no
other valid statute to give color of authority to its creation.44
The Court did clarify in Malabang that the previous acts done by the
municipality in the exercise of its corporate powers were not necessarily a
nullity.45 Camid devotes several pages of his petition in citing this point, 46 yet the
relevance of the citation is unclear considering that Camid does not assert the
validity of any corporate act of Andong prior to its judicial dissolution.
Notwithstanding, the Court in Malabang retained an emphatic attitude as to the
unconstitutionality of the power of the President to create municipal
corporations by way of presidential promulgations, as authorized under Section
68 of the Revised Administrative Code.
This principle was most recently affirmed in 1988, in Municipality of Kapalong v.
Moya.47 The municipality of Santo Tomas, created by President Carlos P.
Garcia, filed a complaint against another municipality, who challenged Santo
Tomas’s legal personality to institute suit. Again, Santo Tomas had not been
expressly nullified by prior judicial action, yet the Court refused to recognize its
legal existence. The blunt but simple ruling: "Now then, as ruled in the Pelaez
case supra, the President has no power to create a municipality. Since [Santo
Tomas] has no legal personality, it can not be a party to any civil action…."48
Nevertheless, when the Court decided Municipality of San Narciso49 in 1995, it
indicated a shift in the jurisprudential treatment of municipalities created
through presidential issuances. The questioned municipality of San Andres,
Quezon was created on 20 August 1959 by Executive Order No. 353 issued by
President Carlos P. Garcia. Executive Order No. 353 was not one of the thirty-
three issuances annulled by Pelaez in 1965. The legal status of the Municipality
of San Andres was first challenged only in 1989, through a petition for quo
warranto filed with the Regional Trial Court of Gumaca, Quezon, which did cite
Pelaez as authority.50 The RTC dismissed the petition for lack of cause of
action, and the petitioners therein elevated the matter to this Court.
In dismissing the petition, the Court delved in the merits of the petition, if only to
resolve further doubt on the legal status of San Andres. It noted a circumstance
which is not present in the case at bar—that San Andres was in existence for
nearly thirty (30) years before its legality was challenged. The Court did not
declare the executive order creating San Andres null and void. Still, acting on
the premise that the said executive order was a complete nullity, the Court
noted "peculiar circumstances" that led to the conclusion that San Andres had
attained the unique status of a "de facto municipal corporation."51 It noted that
Pelaez limited its nullificatory effect only to those executive orders specifically
challenged therein, despite the fact that the Court then could have very well
extended the decision to invalidate San Andres as well.52 This statement
squarely contradicts Camid’s reading of San Narciso that the creation of San
Andres, just like Andong, had been declared a complete nullity on the same
ground of unconstitutional delegation of legislative power found in Pelaez.53
The Court also considered the applicability of Section 442(d)54 of the Local
Government Code of 1991. It clarified the implication of the provision as
follows:
Equally significant is Section 442(d) of the Local Government Code to the effect
that municipal districts "organized pursuant to presidential issuances or
executive orders and which have their respective sets of elective municipal
officials holding office at the time of the effectivity of (the) Code shall henceforth
be considered as regular municipalities." No pretension of unconstitutionality
per se of Section 442(d) of the Local Government Code is preferred. It is
doubtful whether such a pretext, even if made, would succeed. The power to
create political subdivisions is a function of the legislature. Congress did
just that when it has incorporated Section 442(d) in the Code. Curative
laws, which in essence are retrospective, and aimed at giving "validity to acts
done that would have been invalid under existing laws, as if existing laws have
been complied with," are validly accepted in this jurisdiction, subject to the
usual qualification against impairment of vested rights. (Emphasis supplied)55
The holding in San Narciso was subsequently affirmed in Municipality of
Candijay v. Court of Appeals56 and Municipality of Jimenez v. Baz57 In Candijay,
the juridical personality of the Municipality of Alicia, created in a 1949 executive
order, was attacked only beginning in 1984. Pelaez was again invoked in
support of the challenge, but the Court refused to invalidate the municipality,
citing San Narciso at length. The Court noted that the situation of the
Municipality of Alicia was strikingly similar to that in San Narciso; hence, the
town should likewise "benefit from the effects of Section 442(d) of the Local
Government Code, and should [be] considered as a regular, de jure
municipality." 58
The valid existence of Municipality of Sinacaban, created in a 1949 executive
order, was among the issues raised in Jimenez. The Court, through Justice
Mendoza, provided an expert summation of the evolution of the rule.
The principal basis for the view that Sinacaban was not validly created as a
municipal corporation is the ruling in Pelaez v. Auditor General that the creation
of municipal corporations is essentially a legislative matter and therefore the
President was without power to create by executive order the Municipality of
Sinacaban. The ruling in this case has been reiterated in a number of cases
later decided. However, we have since held that where a municipality created
as such by executive order is later impliedly recognized and its acts are
accorded legal validity, its creation can no longer be questioned. In Municipality
of San Narciso, Quezon v. Mendez, Sr., this Court considered the following
factors as having validated the creation of a municipal corporation, which, like
the Municipality of Sinacaban, was created by executive order of the President
before the ruling in Pelaez v. Auditor General: (1) the fact that for nearly 30
years the validity of the creation of the municipality had never been challenged;
(2) the fact that following the ruling in Pelaez no quo warranto suit was filed to
question the validity of the executive order creating such municipality; and (3)
the fact that the municipality was later classified as a fifth class municipality,
organized as part of a municipal circuit court and considered part of a
legislative district in the Constitution apportioning the seats in the House of
Representatives. Above all, it was held that whatever doubt there might be as
to the de jure character of the municipality must be deemed to have been put to
rest by the Local Government Code of 1991 (R. A. No. 7160), §442(d) of which
provides that "municipal districts organized pursuant to presidential issuances
or executive orders and which have their respective sets of elective officials
holding office at the time of the effectivity of this Code shall henceforth be
considered as regular municipalities."
Here, the same factors are present so as to confer on Sinacaban the status of
at least a de facto municipal corporation in the sense that its legal existence
has been recognized and acquiesced publicly and officially. Sinacaban had
been in existence for sixteen years when Pelaez v. Auditor General was
decided on December 24, 1965. Yet the validity of E.O. No. 258 creating it had
never been questioned. Created in 1949, it was only 40 years later that its
existence was questioned and only because it had laid claim to an area that
apparently is desired for its revenue. This fact must be underscored because
under Rule 66, §16 of the Rules of Court, a quo warranto suit against a
corporation for forfeiture of its charter must be commenced within five (5) years
from the time the act complained of was done or committed. On the contrary,
the State and even the Municipality of Jimenez itself have recognized
Sinacaban's corporate existence. Under Administrative Order No. 33 dated
June 13, 1978 of this Court, as reiterated by §31 of the Judiciary
Reorganization Act of 1980 (B. P. Blg. 129), Sinacaban is constituted part of a
municipal circuit for purposes of the establishment of Municipal Circuit Trial
Courts in the country. For its part, Jimenez had earlier recognized Sinacaban in
1950 by entering into an agreement with it regarding their common boundary.
The agreement was embodied in Resolution No. 77 of the Provincial Board of
Misamis Occidental.
Indeed Sinacaban has attained de jure status by virtue of the Ordinance
appended to the 1987 Constitution, apportioning legislative districts throughout
the country, which considered Sinacaban part of the Second District of Misamis
Occidental. Moreover, following the ruling in Municipality of San Narciso,
Quezon v. Mendez, Sr., 442(d) of the Local Government Code of 1991 must be
deemed to have cured any defect in the creation of Sinacaban….591awphi1.nét
From this survey of relevant jurisprudence, we can gather the applicable rules.
Pelaez and its offspring cases ruled that the President has no power to create
municipalities, yet limited its nullificatory effects to the particular municipalities
challenged in actual cases before this Court. However, with the promulgation of
the Local Government Code in 1991, the legal cloud was lifted over the
municipalities similarly created by executive order but not judicially annulled.
The de facto status of such municipalities as San Andres, Alicia and Sinacaban
was recognized by this Court, and Section 442(b) of the Local Government
Code deemed curative whatever legal defects to title these municipalities had
labored under.
Is Andong similarly entitled to recognition as a de facto municipal corporation?
It is not. There are eminent differences between Andong and municipalities
such as San Andres, Alicia and Sinacaban. Most prominent is the fact that the
executive order creating Andong was expressly annulled by order of this Court
in 1965. If we were to affirm Andong’s de facto status by reason of its alleged
continued existence despite its nullification, we would in effect be condoning
defiance of a valid order of this Court.l^vvphi1.net Court decisions cannot
obviously lose their efficacy due to the sheer defiance by the parties aggrieved.
It bears noting that based on Camid’s own admissions, Andong does not meet
the requisites set forth by Section 442(d) of the Local Government Code.
Section 442(d) requires that in order that the municipality created by executive
order may receive recognition, they must "have their respective set of elective
municipal officials holding office at the time of the effectivity of [the Local
Government] Code." Camid admits that Andong has never elected its municipal
officers at all.60 This incapacity ties in with the fact that Andong was judicially
annulled in 1965. Out of obeisance to our ruling in Pelaez, the national
government ceased to recognize the existence of Andong, depriving it of its
share of the public funds, and refusing to conduct municipal elections for the
void municipality.
The failure to appropriate funds for Andong and the absence of elections in the
municipality in the last four decades are eloquent indicia of the non-recognition
by the State of the existence of the town. The certifications relied upon by
Camid, issued by the DENR-CENRO and the National Statistics Office, can
hardly serve the purpose of attesting to Andong’s legal efficacy. In fact, both
these certifications qualify that they were issued upon the request of Camid, "to
support the restoration or re-operation of the Municipality of Andong, Lanao del
Sur,"61 thus obviously conceding that the municipality is at present
inoperative.1awphi1.nét
We may likewise pay attention to the Ordinance appended to the 1987
Constitution, which had also been relied upon in Jimenez and San Narciso.
This Ordinance, which apportioned the seats of the House of Representatives
to the different legislative districts in the Philippines, enumerates the various
municipalities that are encompassed by the various legislative districts. Andong
is not listed therein as among the municipalities of Lanao del Sur, or of any
other province for that matter.62 On the other hand, the municipalities of San
Andres, Alicia and Sinacaban are mentioned in the Ordinance as part of
Quezon,63 Bohol,64 and Misamis Occidental65 respectively.
How about the eighteen (18) municipalities similarly nullified in Pelaez but
certified as existing in the DILG Certification presented by Camid? The petition
fails to mention that subsequent to the ruling in Pelaez, legislation was enacted
to reconstitute these municipalities.66 It is thus not surprising that the DILG
certified the existence of these eighteen (18) municipalities, or that these towns
are among the municipalities enumerated in the Ordinance appended to the
Constitution. Andong has not been similarly reestablished through statute.
Clearly then, the fact that there are valid organic statutes passed by legislation
recreating these eighteen (18) municipalities is sufficient legal basis to accord a
different legal treatment to Andong as against these eighteen (18) other
municipalities.
We thus assert the proper purview to Section 442(d) of the Local Government
Code—that it does not serve to affirm or reconstitute the judicially dissolved
municipalities such as Andong, which had been previously created by
presidential issuances or executive orders. The provision affirms the legal
personalities only of those municipalities such as San Narciso, Alicia, and
Sinacaban, which may have been created using the same infirm legal basis, yet
were fortunate enough not to have been judicially annulled. On the other hand,
the municipalities judicially dissolved in cases such as Pelaez, San Joaquin,
and Malabang, remain inexistent, unless recreated through specific legislative
enactments, as done with the eighteen (18) municipalities certified by the DILG.
Those municipalities derive their legal personality not from the presidential
issuances or executive orders which originally created them or from Section
442(d), but from the respective legislative statutes which were enacted to revive
them.1a\^/phi1.net
And what now of Andong and its residents? Certainly, neither Pelaez or this
decision has obliterated Andong into a hole on the ground. The legal effect of
the nullification of Andong in Pelaez was to revert the constituent barrios of the
voided town back into their original municipalities, namely the municipalities of
Lumbatan, Butig and Tubaran.67 These three municipalities subsist to this day
as part of Lanao del Sur,68 and presumably continue to exercise corporate
powers over the barrios which once belonged to Andong.
If there is truly a strong impulse calling for the reconstitution of Andong, the
solution is through the legislature and not judicial confirmation of void title. If
indeed the residents of Andong have, all these years, been governed not by
their proper municipal governments but by a ragtag "Interim Government," then
an expedient political and legislative solution is perhaps necessary. Yet we can
hardly sanction the retention of Andong’s legal personality solely on the basis of
collective amnesia that may have allowed Andong to somehow pretend itself
into existence despite its judicial dissolution. Maybe those who insist Andong
still exists prefer to remain unperturbed in their blissful ignorance, like the
inhabitants of the cave in Plato’s famed allegory. But the time has come for the
light to seep in, and for the petitioner and like-minded persons to awaken to
legal reality.
WHEREFORE, the Petition is DISMISSED for lack of merit. Costs against
petitioner.
SO ORDERED.
 COMMISSION ON ELECTIONS

and DIDAGEN P. DILANGALEN,

Respondents.

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

PERFECTO F. MARQUEZ, G.R. No. 178628

Petitioner,

Present:

PUNO,
C.J.,

QUISUMBING,

YNARES-SANTIAGO,

CARPIO,

AUSTRIA-MARTINEZ,

CORONA,

CARPIO MORALES,

- versus - AZCUNA,

TINGA,

CHICO-NAZARIO,

VELASCO, JR.,

NACHURA,

BAI SANDRA S. A. SEMA, G.R. No. 177597 REYES,

Petitioner, LEONARDO-DE CASTRO, and

- versus - BRION, JJ.

 the Autonomous Region in Muslim Mindanao (ARMM), created under its
Organic Act, Republic Act No. 6734 (RA 6734), as amended by Republic Act
COMMISSION ON ELECTIONS, Promulgated: No. 9054 (RA 9054). Although under the Ordinance, Cotabato City forms part
Respondent. July 16, 2008 of Maguindanao’s first legislative district, it is not part of the ARMM but of
Region XII, having voted against its inclusion in the ARMM in the plebiscite held
in November 1989.

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

On 28 August 2006, the ARMM’s legislature, the ARMM Regional

Assembly, exercising its power to create provinces under Section 19, Article VI
of RA 9054, enacted Muslim Mindanao Autonomy Act No. 201 (MMA Act 201)
DECISION creating the Province of Shariff Kabunsuan composed of the eight
municipalities in the first district of Maguindanao. MMA Act 201 provides:

CARPIO, J.: Section 1. The Municipalities of Barira, Buldon, Datu Odin Sinsuat,
Kabuntalan, Matanog, Parang, Sultan Kudarat, Sultan Mastura, and Upi are
hereby separated from the Province of Maguindanao and constituted into a
distinct and independent province, which is hereby created, to be known as the
Province of Shariff Kabunsuan.

The Case

xxxx

These consolidated petitions seek to annul Resolution No. 7902, dated

10 May 2007, of the Commission on Elections (COMELEC) treating Cotabato
City as part of the legislative district of the Province of Shariff Kabunsuan. Sec. 5. The corporate existence of this province shall commence upon the
appointment by the Regional Governor or election of the governor and majority
of the regular members of the Sangguniang Panlalawigan.

The Facts

The incumbent elective provincial officials of the Province of

The Ordinance appended to the 1987 Constitution apportioned two
legislative districts for the Province of Maguindanao. The first legislative district
consists of Cotabato City and eight municipalities. Maguindanao forms part of
Maguindanao shall continue to serve their unexpired terms in the province that
they will choose or where they are residents: Provided, that where an elective
position in both provinces becomes vacant as a consequence of the creation of
the Province of Shariff Kabunsuan, all incumbent elective provincial officials
shall have preference for appointment to a higher elective vacant position and
for the time being be appointed by the Regional Governor, and shall hold office
until their successors shall have been elected and qualified in the next local
elections; Provided, further, that they shall continue to receive the salaries they
are receiving at the time of the approval of this Act until the new readjustment
of salaries in accordance with law. Provided, furthermore, that there shall be
no diminution in the number of the members of the Sangguniang Panlalawigan
of the mother province.
Except as may be provided by national law, the existing legislative
district, which includes Cotabato as a part thereof, shall remain.
Later, three new municipalities were carved out of the original nine
municipalities constituting Shariff Kabunsuan, bringing its total number of
municipalities to 11. Thus, what was left of Maguindanao were the
municipalities constituting its second legislative district. Cotabato City, although
part of Maguindanao’s first legislative district, is not part of the Province of
Maguindanao.
The voters of Maguindanao ratified Shariff Kabunsuan’s creation in a plebiscite
held on 29 October 2006.
On 6 February 2007, the Sangguniang Panlungsod of Cotabato City passed
Resolution No. 3999 requesting the COMELEC to “clarify the status of
Cotabato City in view of the conversion of the First District of Maguindanao into
a regular province” under MMA Act 201.
In answer to Cotabato City’s query, the COMELEC issued Resolution No.
07-0407 on 6 March 2007 "maintaining the status quo with Cotabato City as
part of Shariff Kabunsuan in the First Legislative District of Maguindanao.”
Resolution No. 07-0407, which adopted the recommendation of the
COMELEC’s Law Department under a Memorandum dated 27 February 2007,
provides in pertinent parts:
Considering the foregoing, the Commission RESOLVED, as it hereby
resolves, to adopt the recommendation of the Law Department that pending
the enactment of the appropriate law by Congress, to maintain the status
quo with Cotabato City as part of Shariff Kabunsuan in the First Legislative
District of Maguindanao. (Emphasis supplied)
However, in preparation for the 14 May 2007 elections, the COMELEC
promulgated on 29 March 2007 Resolution No. 7845 stating that
Maguindanao’s first legislative district is composed only of Cotabato City
because of the enactment of MMA Act 201.
On 10 May 2007, the COMELEC issued Resolution No. 7902, subject of
these petitions, amending Resolution No. 07-0407 by renaming the legislative
district in question as “Shariff Kabunsuan Province with Cotabato City (formerly
First District of Maguindanao with Cotabato City).”
In G.R. No. 177597, Sema, who was a candidate in the 14 May 2007
elections for Representative of “Shariff Kabunsuan with Cotabato City,” prayed
for the nullification of COMELEC Resolution No. 7902 and the exclusion from
canvassing of the votes cast in Cotabato City for that office. Sema contended
that Shariff Kabunsuan is entitled to one representative in Congress under
Section 5 (3), Article VI of the Constitution and Section 3 of the Ordinance
appended to the Constitution. Thus, Sema asserted that the COMELEC acted
without or in excess of its jurisdiction in issuing Resolution No. 7902 which
maintained the status quo in Maguindanao’s first legislative district despite the
COMELEC’s earlier directive in Resolution No. 7845 designating Cotabato City
as the lone component of Maguindanao’s reapportioned first legislative district.
Sema further claimed that in issuing Resolution No. 7902, the COMELEC
usurped Congress’ power to create or reapportion legislative districts.
In its Comment, the COMELEC, through the Office of the Solicitor
General (OSG), chose not to reach the merits of the case and merely
contended that (1) Sema wrongly availed of the writ of certiorari to nullify
COMELEC Resolution No. 7902 because the COMELEC issued the same in
the exercise of its administrative, not quasi-judicial, power and (2) Sema’s
prayer for the writ of prohibition in G.R. No. 177597 became moot with the
proclamation of respondent Didagen P. Dilangalen (respondent Dilangalen) on
1 June 2007 as representative of the legislative district of Shariff Kabunsuan
Province with Cotabato City.
In his Comment, respondent Dilangalen countered that Sema is
estopped from questioning COMELEC Resolution No. 7902 because in her
certificate of candidacy filed on 29 March 2007, Sema indicated that she was
seeking election as representative of “Shariff Kabunsuan including Cotabato
City.” Respondent Dilangalen added that COMELEC Resolution No. 7902 is
constitutional because it did not apportion a legislative district for Shariff
Kabunsuan or reapportion the legislative districts in Maguindanao but merely
renamed Maguindanao’s first legislative district. Respondent Dilangalen further
claimed that the COMELEC could not reapportion Maguindanao’s first
legislative district to make Cotabato City its sole component unit as the power
to reapportion legislative districts lies exclusively with Congress, not to mention
that Cotabato City does not meet the minimum population requirement under
Section 5 (3), Article VI of the Constitution for the creation of a legislative
district within a city.
Sema filed a Consolidated Reply controverting the matters raised in
respondents’ Comments and reiterating her claim that the COMELEC acted
ultra vires in issuing Resolution No. 7902.
In the Resolution of 4 September 2007, the Court required the parties in G.R.
No. 177597 to comment on the issue of whether a province created by the
ARMM Regional Assembly under Section 19, Article VI of RA 9054 is entitled to
one representative in the House of Representatives without need of a national
law creating a legislative district for such new province. The parties submitted
their compliance as follows:
(1) Sema answered the issue in the affirmative on the following grounds: (a) the
Court in Felwa v. Salas stated that “when a province is created by statute, the
corresponding representative district comes into existence neither by authority
of that statute — which cannot provide otherwise — nor by apportionment, but
by operation of the Constitution, without a reapportionment”; (b) Section 462 of
Republic Act No. 7160 (RA 7160) “affirms” the apportionment of a legislative
district incident to the creation of a province; and (c) Section 5 (3), Article VI of
the Constitution and Section 3 of the Ordinance appended to the Constitution
mandate the apportionment of a legislative district in newly created provinces.
(2) The COMELEC, again represented by the OSG, apparently abandoned its
earlier stance on the propriety of issuing Resolution Nos. 07-0407 and 7902
and joined causes with Sema, contending that Section 5 (3), Article VI of the
Constitution is “self-executing.” Thus, every new province created by the
ARMM Regional Assembly is ipso facto entitled to one representative in the
House of Representatives even in the absence of a national law; and
(3) Respondent Dilangalen answered the issue in the negative on the following
grounds: (a) the “province” contemplated in Section 5 (3), Article VI of the
Constitution is one that is created by an act of Congress taking into account the
provisions in RA 7160 on the creation of provinces; (b) Section 3, Article IV of
RA 9054 withheld from the ARMM Regional Assembly the power to enact
measures relating to national elections, which encompasses the apportionment
of legislative districts for members of the House of Representatives; (c)
recognizing a legislative district in every province the ARMM Regional
Assembly creates will lead to the disproportionate representation of the ARMM
in the House of Representatives as the Regional Assembly can create
provinces without regard to the requirements in Section 461 of RA 7160; and
(d) Cotabato City, which has a population of less than 250,000, is not entitled to
a representative in the House of Representatives.
On 27 November 2007, the Court heard the parties in G.R. No. 177597
in oral arguments on the following issues: (1) whether Section 19, Article VI of
RA 9054, delegating to the ARMM Regional Assembly the power to create
provinces, is constitutional; and (2) if in the affirmative, whether a province
created under Section 19, Article VI of RA 9054 is entitled to one representative
in the House of Representatives without need of a national law creating a
legislative district for such new province.
In compliance with the Resolution dated 27 November 2007, the parties in G.R.
No. 177597 filed their respective Memoranda on the issues raised in the oral
arguments. On the question of the constitutionality of Section 19, Article VI of
RA 9054, the parties in G.R. No. 177597 adopted the following positions:
(1) Sema contended that Section 19, Article VI of RA 9054 is constitutional (a)
as a valid delegation by Congress to the ARMM of the power to create
provinces under Section 20 (9), Article X of the Constitution granting to the
autonomous regions, through their organic acts, legislative powers over “other
matters as may be authorized by law for the promotion of the general welfare of
the people of the region” and (b) as an amendment to Section 6 of RA 7160.
However, Sema concedes that, if taken literally, the grant in Section 19, Article
VI of RA 9054 to the ARMM Regional Assembly of the power to “prescribe
standards lower than those mandated” in RA 7160 in the creation of provinces
contravenes Section 10, Article X of the Constitution. Thus, Sema proposed
that Section 19 “should be construed as prohibiting the Regional Assembly
from prescribing standards x x x that do not comply with the minimum criteria”
under RA 7160.
(2) Respondent Dilangalen contended that Section 19, Article VI of RA 9054 is
unconstitutional on the following grounds: (a) the power to create provinces
was not among those granted to the autonomous regions under Section 20,
Article X of the Constitution and (b) the grant under Section 19, Article VI of RA
9054 to the ARMM Regional Assembly of the power to prescribe standards
lower than those mandated in Section 461 of RA 7160 on the creation of
provinces contravenes Section 10, Article X of the Constitution and the Equal
Protection Clause; and
(3) The COMELEC, through the OSG, joined causes with respondent
Dilangalen (thus effectively abandoning the position the COMELEC adopted in
its Compliance with the Resolution of 4 September 2007) and contended that
Section 19, Article VI of RA 9054 is unconstitutional because (a) it contravenes
Section 10 and Section 6, Article X of the Constitution and (b) the power to
create provinces was withheld from the autonomous regions under Section 20,
Article X of the Constitution.
On the question of whether a province created under Section 19, Article VI of
RA 9054 is entitled to one representative in the House of Representatives
without need of a national law creating a legislative district for such new
province, Sema and respondent Dilangalen reiterated in their Memoranda the
positions they adopted in their Compliance with the Resolution of 4 September
2007. The COMELEC deemed it unnecessary to submit its position on this
issue considering its stance that Section 19, Article VI of RA 9054 is
unconstitutional.
The pendency of the petition in G.R. No. 178628 was disclosed during the oral
arguments on 27 November 2007. Thus, in the Resolution of 19 February 2008,
the Court ordered G.R. No. 178628 consolidated with G.R. No. 177597. The
petition in G.R. No. 178628 echoed Sema's contention that the COMELEC
acted ultra vires in issuing Resolution No. 7902 depriving the voters of
Cotabato City of a representative in the House of Representatives. In its
Comment to the petition in G.R. No. 178628, the COMELEC, through
the OSG, maintained the validity of COMELEC Resolution No. 7902 as a
temporary measure pending the enactment by Congress of the “appropriate
law.”
The Issues
The petitions raise the following issues:
I. In G.R. No. 177597:
(A) Preliminarily –
(1) whether the writs of Certiorari, Prohibition, and Mandamus are proper to test
the constitutionality of COMELEC Resolution No. 7902; and
(2) whether the proclamation of respondent Dilangalen as representative of
Shariff Kabunsuan Province with Cotabato City mooted the petition in G.R. No.
177597.
(B) On the merits –
(1) whether Section 19, Article VI of RA 9054, delegating to the ARMM
Regional Assembly the power to create provinces, cities, municipalities and
barangays, is constitutional; and
(2) if in the affirmative, whether a province created by the ARMM Regional
Assembly under MMA Act 201 pursuant to Section 19, Article VI of RA 9054 is
entitled to one representative in the House of Representatives without need of
a national law creating a legislative district for such province.
II. In G.R No. 177597 and G.R No. 178628, whether COMELEC Resolution
No. 7902 is valid for maintaining the status quo in the first legislative district of
Maguindanao (as “Shariff Kabunsuan Province with Cotabato City [formerly
First District of Maguindanao with Cotabato City]”), despite the creation of the
Province of Shariff Kabunsuan out of such district (excluding Cotabato City).
The Ruling of the Court
The petitions have no merit. We rule that (1) Section 19, Article VI of RA
9054 is unconstitutional insofar as it grants to the ARMM Regional Assembly
the power to create provinces and cities; (2) MMA Act 201 creating the
Province of Shariff Kabunsuan is void; and (3) COMELEC Resolution No. 7902
is valid.
On the Preliminary Matters
The Writ of Prohibition is Appropriate
to Test the Constitutionality of
Election Laws, Rules and Regulations
The purpose of the writ of Certiorari is to correct grave abuse of discretion by
“any tribunal, board, or officer exercising judicial or quasi-judicial functions.” On
the other hand, the writ of Mandamus will issue to compel a tribunal,
corporation, board, officer, or person to perform an act “which the law
specifically enjoins as a duty.” True, the COMELEC did not issue Resolution
No. 7902 in the exercise of its judicial or quasi-judicial functions. Nor is there a
law which specifically enjoins the COMELEC to exclude from canvassing the
votes cast in Cotabato City for representative of “Shariff Kabunsuan Province
with Cotabato City.” These, however, do not justify the outright dismissal of the
petition in G.R. No. 177597 because Sema also prayed for the issuance of the
writ of Prohibition and we have long recognized this writ as proper for testing
the constitutionality of election laws, rules, and regulations.
Respondent Dilangalen’s Proclamation
Does Not Moot the Petition
There is also no merit in the claim that respondent Dilangalen’s
proclamation as winner in the 14 May 2007 elections for representative of
“Shariff Kabunsuan Province with Cotabato City” mooted this petition. This case
does not concern respondent Dilangalen’s election. Rather, it involves an
inquiry into the validity of COMELEC Resolution No. 7902, as well as the
constitutionality of MMA Act 201 and Section 19, Article VI of RA 9054.
Admittedly, the outcome of this petition, one way or another, determines
whether the votes cast in Cotabato City for representative of the district of
“Shariff Kabunsuan Province with Cotabato City” will be included in the
canvassing of ballots. However, this incidental consequence is no reason for
us not to proceed with the resolution of the novel issues raised here. The
Court’s ruling in these petitions affects not only the recently concluded elections
but also all the other succeeding elections for the office in question, as well as
the power of the ARMM Regional Assembly to create in the future additional
provinces.
On the Main Issues
Whether the ARMM Regional Assembly
Can Create the Province of Shariff Kabunsuan
The creation of local government units is governed by Section 10, Article
X of the Constitution, which provides:
Sec. 10. No province, city, municipality, or barangay may be created, divided,
merged, abolished or its boundary substantially altered except in accordance
with the criteria established in the local government code and subject to
approval by a majority of the votes cast in a plebiscite in the political units
directly affected.
Thus, the creation of any of the four local government units – province, city,
municipality or barangay – must comply with three conditions. First, the creation
of a local government unit must follow the criteria fixed in the Local Government
Code. Second, such creation must not conflict with any provision of the
Constitution. Third, there must be a plebiscite in the political units affected.
There is neither an express prohibition nor an express grant of authority
in the Constitution for Congress to delegate to regional or local legislative
bodies the power to create local government units. However, under its plenary
legislative powers, Congress can delegate to local legislative bodies the power
to create local government units, subject to reasonable standards and provided
no conflict arises with any provision of the Constitution. In fact, Congress has
delegated to provincial boards, and city and municipal councils, the power to
create barangays within their jurisdiction, subject to compliance with the criteria
established in the Local Government Code, and the plebiscite requirement in
Section 10, Article X of the Constitution. However, under the Local
Government Code, “only x x x an Act of Congress” can create provinces, cities
or municipalities.
Under Section 19, Article VI of RA 9054, Congress delegated to the
ARMM Regional Assembly the power to create provinces, cities, municipalities
and barangays within the ARMM. Congress made the delegation under its
plenary legislative powers because the power to create local government units
is not one of the express legislative powers granted by the Constitution to
regional legislative bodies. In the present case, the question arises whether the
delegation to the ARMM Regional Assembly of the power to create provinces,
cities, municipalities and barangays conflicts with any provision of the
Constitution.
There is no provision in the Constitution that conflicts with the delegation
to regional legislative bodies of the power to create municipalities and
barangays, provided Section 10, Article X of the Constitution is followed.
However, the creation of provinces and cities is another matter. Section 5 (3),
Article VI of the Constitution provides, “Each city with a population of at least
two hundred fifty thousand, or each province, shall have at least one
representative” in the House of Representatives. Similarly, Section 3 of the
Ordinance appended to the Constitution provides, “Any province that may
hereafter be created, or any city whose population may hereafter increase to
more than two hundred fifty thousand shall be entitled in the immediately
following election to at least one Member x x x.”
Clearly, a province cannot be created without a legislative district because it will
violate Section 5 (3), Article VI of the Constitution as well as Section 3 of the
Ordinance appended to the Constitution. For the same reason, a city with a
population of 250,000 or more cannot also be created without a legislative
district. Thus, the power to create a province, or a city with a population of
250,000 or more, requires also the power to create a legislative district. Even
the creation of a city with a population of less than 250,000 involves the power
to create a legislative district because once the city’s population reaches
250,000, the city automatically becomes entitled to one representative under
Section 5 (3), Article VI of the Constitution and Section 3 of the Ordinance
appended to the Constitution. Thus, the power to create a province or city
inherently involves the power to create a legislative district.
For Congress to delegate validly the power to create a province or city, it must
also validly delegate at the same time the power to create a legislative district.
The threshold issue then is, can Congress validly delegate to the ARMM
Regional Assembly the power to create legislative districts for the House of
Representatives? The answer is in the negative.
Legislative Districts are Created or Reapportioned
Only by an Act of Congress
Under the present Constitution, as well as in past Constitutions, the power to
increase the allowable membership in the House of Representatives, and to
reapportion legislative districts, is vested exclusively in Congress. Section 5,
Article VI of the Constitution provides:
SECTION 5. (1) The House of Representatives shall be composed of not more
than two hundred and fifty members, unless otherwise fixed by law, who
shall be elected from legislative districts apportioned among the provinces,
cities, and the Metropolitan Manila area in accordance with the number of their
respective inhabitants, and on the basis of a uniform and progressive ratio, and
those who, as provided by law, shall be elected through a party-list system of
registered national, regional, and sectoral parties or organizations.
xxxx
(3) Each legislative district shall comprise, as far as practicable, contiguous,
compact, and adjacent territory. Each city with a population of at least two
hundred fifty thousand, or each province, shall have at least one representative.
(4) Within three years following the return of every census, the Congress shall
make a reapportionment of legislative districts based on the standards
provided in this section. (Emphasis supplied)
Section 5 (1), Article VI of the Constitution vests in Congress the power to
increase, through a law, the allowable membership in the House of
Representatives. Section 5 (4) empowers Congress to reapportion legislative
districts. The power to reapportion legislative districts necessarily includes the
power to create legislative districts out of existing ones. Congress exercises
these powers through a law that Congress itself enacts, and not through a law
that regional or local legislative bodies enact. The allowable membership of the
House of Representatives can be increased, and new legislative districts of
Congress can be created, only through a national law passed by Congress. In
Montejo v. COMELEC, we held that the “power of redistricting x x x is
traditionally regarded as part of the power (of Congress) to make laws,” and
thus is vested exclusively in Congress.
This textual commitment to Congress of the exclusive power to create or
reapportion legislative districts is logical. Congress is a national legislature and
any increase in its allowable membership or in its incumbent membership
through the creation of legislative districts must be embodied in a national law.
Only Congress can enact such a law. It would be anomalous for regional or
local legislative bodies to create or reapportion legislative districts for a national
legislature like Congress. An inferior legislative body, created by a superior
legislative body, cannot change the membership of the superior legislative
body.
The creation of the ARMM, and the grant of legislative powers to its Regional
Assembly under its organic act, did not divest Congress of its exclusive
authority to create legislative districts. This is clear from the Constitution and
the ARMM Organic Act, as amended. Thus, Section 20, Article X of the
Constitution provides:
SECTION 20. Within its territorial jurisdiction and subject to the provisions of
this Constitution and national laws, the organic act of autonomous regions shall
provide for legislative powers over:
(1) Administrative organization;
(2) Creation of sources of revenues;
(3) Ancestral domain and natural resources;
(4) Personal, family, and property relations;
(5) Regional urban and rural planning development;
(6) Economic, social, and tourism development;
(7) Educational policies;
(8) Preservation and development of the cultural heritage; and
(9) Such other matters as may be authorized by law for the promotion of
the general welfare of the people of the region.
Nothing in Section 20, Article X of the Constitution authorizes
autonomous regions, expressly or impliedly, to create or reapportion
legislative districts for Congress.
On the other hand, Section 3, Article IV of RA 9054 amending the ARMM
Organic Act, provides, “The Regional Assembly may exercise legislative
power x x x except on the following matters: x x x (k) National elections. x
x x.” Since the ARMM Regional Assembly has no legislative power to enact
laws relating to national elections, it cannot create a legislative district whose
representative is elected in national elections. Whenever Congress enacts a
law creating a legislative district, the first representative is always elected in the
“next national elections” from the effectivity of the law.
Indeed, the office of a legislative district representative to Congress is a
national office, and its occupant, a Member of the House of Representatives,
is a national official. It would be incongruous for a regional legislative body
like the ARMM Regional Assembly to create a national office when its
legislative powers extend only to its regional territory. The office of a district
representative is maintained by national funds and the salary of its occupant is
paid out of national funds. It is a self-evident inherent limitation on the
legislative powers of every local or regional legislative body that it can only
create local or regional offices, respectively, and it can never create a national
office.
To allow the ARMM Regional Assembly to create a national office is to allow its
legislative powers to operate outside the ARMM’s territorial jurisdiction. This
violates Section 20, Article X of the Constitution which expressly limits
the coverage of the Regional Assembly’s legislative powers “[w]ithin its
territorial jurisdiction x x x.”
The ARMM Regional Assembly itself, in creating Shariff Kabunsuan,
recognized the exclusive nature of Congress’ power to create or reapportion
legislative districts by abstaining from creating a legislative district for Shariff
Kabunsuan. Section 5 of MMA Act 201 provides that:
Except as may be provided by national law, the existing legislative district,
which includes Cotabato City as a part thereof, shall remain. (Emphasis
supplied)
However, a province cannot legally be created without a legislative district
because the Constitution mandates that “each province shall have at least one
representative.” Thus, the creation of the Province of Shariff Kabunsuan
without a legislative district is unconstitutional.
Sema, petitioner in G.R. No. 177597, contends that Section 5 (3), Article
VI of the Constitution, which provides:
Each legislative district shall comprise, as far as practicable, contiguous,
compact, and adjacent territory. Each city with a population of at least two
hundred fifty thousand, or each province, shall have at least one
representative. (Emphasis supplied)
and Section 3 of the Ordinance appended to the Constitution, which states:
Any province that may hereafter be created, or any city whose population
may hereafter increase to more than two hundred fifty thousand shall be
entitled in the immediately following election to at least one Member or
such number of Members as it may be entitled to on the basis of the
number of its inhabitants and according to the standards set forth in
paragraph (3), Section 5 of Article VI of the Constitution. The number of
Members apportioned to the province out of which such new province was
created or where the city, whose population has so increased, is geographically
located shall be correspondingly adjusted by the Commission on Elections but
such adjustment shall not be made within one hundred and twenty days before
the election. (Emphasis supplied)
serve as bases for the conclusion that the Province of Shariff Kabunsuan,
created on 29 October 2006, is automatically entitled to one member in the
House of Representatives in the 14 May 2007 elections. As further support for
her stance, petitioner invokes the statement in Felwa that “when a province is
created by statute, the corresponding representative district comes into
existence neither by authority of that statute — which cannot provide otherwise
— nor by apportionment, but by operation of the Constitution, without a
reapportionment.”
The contention has no merit.
First. The issue in Felwa, among others, was whether Republic Act No.
4695 (RA 4695), creating the provinces of Benguet, Mountain Province, Ifugao,
and Kalinga-Apayao and providing for congressional representation in the old
and new provinces, was unconstitutional for “creati[ng] congressional districts
without the apportionment provided in the Constitution.” The Court answered in
the negative, thus:
The Constitution ordains:
 “The House of Representatives shall be composed of not more than
one hundred and twenty Members who shall be apportioned among the several
provinces as nearly as may be according to the number of their respective
inhabitants, but each province shall have at least one Member. The Congress
shall by law make an apportionment within three years after the return of every
enumeration, and not otherwise. Until such apportionment shall have been
made, the House of Representatives shall have the same number of Members
as that fixed by law for the National Assembly, who shall be elected by the
qualified electors from the present Assembly districts. Each representative
district shall comprise as far as practicable, contiguous and compact territory.”
Pursuant to this Section, a representative district may come into
existence: (a) indirectly, through the creation of a province — for “each
province shall have at least one member” in the House of
Representatives; or (b) by direct creation of several representative
districts within a province. The requirements concerning the apportionment
of representative districts and the territory thereof refer only to the second
method of creation of representative districts, and do not apply to those
incidental to the creation of provinces, under the first method. This is deducible,
not only from the general tenor of the provision above quoted, but, also, from
the fact that the apportionment therein alluded to refers to that which is made
by an Act of Congress. Indeed, when a province is created by statute, the
corresponding representative district, comes into existence neither by
authority of that statute — which cannot provide otherwise — nor by
apportionment, but by operation of the Constitution, without a
reapportionment.
There is no constitutional limitation as to the time when, territory of, or
other conditions under which a province may be created, except, perhaps, if the
consequence thereof were to exceed the maximum of 120 representative
districts prescribed in the Constitution, which is not the effect of the legislation
under consideration. As a matter of fact, provinces have been created or
subdivided into other provinces, with the consequent creation of additional
representative districts, without complying with the aforementioned
requirements. (Emphasis supplied)
Thus, the Court sustained the constitutionality of RA 4695 because (1) it
validly created legislative districts “indirectly” through a special law enacted
by Congress creating a province and (2) the creation of the legislative
districts will not result in breaching the maximum number of legislative districts
provided under the 1935 Constitution. Felwa does not apply to the present
case because in Felwa the new provinces were created by a national law
enacted by Congress itself. Here, the new province was created merely by a
regional law enacted by the ARMM Regional Assembly.
What Felwa teaches is that the creation of a legislative district by Congress
does not emanate alone from Congress’ power to reapportion legislative
districts, but also from Congress’ power to create provinces which cannot be
created without a legislative district. Thus, when a province is created, a
legislative district is created by operation of the Constitution because the
Constitution provides that “each province shall have at least one
representative” in the House of Representatives. This does not detract from
the constitutional principle that the power to create legislative districts belongs
exclusively to Congress. It merely prevents any other legislative body, except
Congress, from creating provinces because for a legislative body to create a
province such legislative body must have the power to create legislative
districts. In short, only an act of Congress can trigger the creation of a
legislative district by operation of the Constitution. Thus, only Congress has the
power to create, or trigger the creation of, a legislative district.
Moreover, if as Sema claims MMA Act 201 apportioned a legislative district to
Shariff Kabunsuan upon its creation, this will leave Cotabato City as the lone
component of the first legislative district of Maguindanao. However, Cotabato
City cannot constitute a legislative district by itself because as of the census
taken in 2000, it had a population of only 163,849. To constitute Cotabato City
alone as the surviving first legislative district of Maguindanao will violate
Section 5 (3), Article VI of the Constitution which requires that “[E]ach city with
a population of at least two hundred fifty thousand x x x, shall have at least one
representative.”
Second. Sema’s theory also undermines the composition and independence of
the House of Representatives. Under Section 19, Article VI of RA 9054, the
ARMM Regional Assembly can create provinces and cities within the ARMM
with or without regard to the criteria fixed in Section 461 of RA 7160, namely:
minimum annual income of P20,000,000, and minimum contiguous territory of Atty. Vistan II:
2,000 square kilometers or minimum population of 250,000. The following
Yes, Your Honor, because the Constitution allows that.
scenarios thus become distinct possibilities:
Justice Carpio:

So, [the] Regional Assembly of [the] ARMM can create and create x x x
(1) An inferior legislative body like the ARMM Regional Assembly can create
provinces x x x and, therefore, they can have thirty-five (35) new
100 or more provinces and thus increase the membership of a superior
representatives in the House of Representatives without Congress agreeing to
legislative body, the House of Representatives, beyond the maximum limit of
it, is that what you are saying? That can be done, under your theory[?]
250 fixed in the Constitution (unless a national law provides otherwise);

Atty. Vistan II:

(2) The proportional representation in the House of Representatives based on
one representative for at least every 250,000 residents will be negated because
the ARMM Regional Assembly need not comply with the requirement in Section
461(a)(ii) of RA 7160 that every province created must have a population of at Yes, Your Honor, under the correct factual circumstances.
least 250,000; and

(3) Representatives from the ARMM provinces can become the majority in the
House of Representatives through the ARMM Regional Assembly’s continuous
creation of provinces or cities within the ARMM.
Justice Carpio:
Under your theory, the ARMM legislature can create thirty-five (35) new
provinces, there may be x x x [only] one hundred thousand (100,000)
[population], x x x, and they will each have one representative x x x to
Congress without any national law, is that what you are saying?

The following exchange during the oral arguments of the petition in G.R. No. Atty. Vistan II:
177597 highlights the absurdity of Sema’s position that the ARMM Regional
Assembly can create provinces:

Without law passed by Congress, yes, Your Honor, that is what we are saying.

Justice Carpio: xxxx

So, you mean to say [a] Local Government can create legislative district[s] and Justice Carpio:
pack Congress with their own representatives [?]
So, they can also create one thousand (1000) new provinces, sen[d] one
thousand (1000) representatives to the House of Representatives without
a national law[,] that is legally possible, correct?
Atty. Vistan II:
Yes, Your Honor. (Emphasis supplied)
Neither the framers of the 1987 Constitution in adopting the provisions in Article
X on regional autonomy, nor Congress in enacting RA 9054, envisioned or
intended these disastrous consequences that certainly would wreck the tri-
branch system of government under our Constitution. Clearly, the power to
create or reapportion legislative districts cannot be delegated by Congress but
must be exercised by Congress itself. Even the ARMM Regional Assembly
recognizes this.
The Constitution empowered Congress to create or reapportion
legislative districts, not the regional assemblies. Section 3 of the Ordinance to
the Constitution which states, “[A]ny province that may hereafter be created x x
x shall be entitled in the immediately following election to at least one Member,”
refers to a province created by Congress itself through a national law. The
reason is that the creation of a province increases the actual membership of the
House of Representatives, an increase that only Congress can decide.
Incidentally, in the present 14th Congress, there are 219 district representatives
out of the maximum 250 seats in the House of Representatives. Since party-
list members shall constitute 20 percent of total membership of the House,
there should at least be 50 party-list seats available in every election in case 50
party-list candidates are proclaimed winners. This leaves only 200 seats for
district representatives, much less than the 219 incumbent district
representatives. Thus, there is a need now for Congress to increase by law
the allowable membership of the House, even before Congress can create new
provinces.
It is axiomatic that organic acts of autonomous regions cannot prevail
over the Constitution. Section 20, Article X of the Constitution expressly
provides that the legislative powers of regional assemblies are limited “[w]ithin
its territorial jurisdiction and subject to the provisions of the Constitution
and national laws, x x x.” The Preamble of the ARMM Organic Act (RA 9054)
itself states that the ARMM Government is established “within the framework of
the Constitution.” This follows Section 15, Article X of the Constitution which
mandates that the ARMM “shall be created x x x within the framework of
this Constitution and the national sovereignty as well as territorial
integrity of the Republic of the Philippines.”
The present case involves the creation of a local government unit that
necessarily involves also the creation of a legislative district. The Court will not
pass upon the constitutionality of the creation of municipalities and barangays
that does not comply with the criteria established in Section 461 of RA 7160, as
mandated in Section 10, Article X of the Constitution, because the creation of
such municipalities and barangays does not involve the creation of legislative
districts. We leave the resolution of this issue to an appropriate case.
In summary, we rule that Section 19, Article VI of RA 9054, insofar as it
grants to the ARMM Regional Assembly the power to create provinces and
cities, is void for being contrary to Section 5 of Article VI and Section 20 of
Article X of the Constitution, as well as Section 3 of the Ordinance appended to
the Constitution. Only Congress can create provinces and cities because the
creation of provinces and cities necessarily includes the creation of legislative
districts, a power only Congress can exercise under Section 5, Article VI of the
Constitution and Section 3 of the Ordinance appended to the Constitution. The
ARMM Regional Assembly cannot create a province without a legislative district
because the Constitution mandates that every province shall have a legislative
district. Moreover, the ARMM Regional Assembly cannot enact a law creating
a national office like the office of a district representative of Congress because
the legislative powers of the ARMM Regional Assembly operate only within its
territorial jurisdiction as provided in Section 20, Article X of the Constitution.
Thus, we rule that MMA Act 201, enacted by the ARMM Regional Assembly
and creating the Province of Shariff Kabunsuan, is void.
Resolution No. 7902 Complies with the Constitution Let a copy of this ruling be served on the President of the Senate and the
Speaker of the House of Representatives.

Consequently, we hold that COMELEC Resolution No. 7902, preserving the

geographic and legislative district of the First District of Maguindanao with SO ORDERED.
Cotabato City, is valid as it merely complies with Section 5 of Article VI and
Section 20 of Article X of the Constitution, as well as Section 1 of the Ordinance
appended to the Constitution.

WHEREFORE, we declare Section 19, Article VI of Republic Act No.

9054 UNCONSTITUTIONAL insofar as it grants to the Regional Assembly of
the Autonomous Region in Muslim Mindanao the power to create provinces and
cities. Thus, we declare VOID Muslim Mindanao Autonomy Act No. 201
creating the Province of Shariff Kabunsuan. Consequently, we rule that
COMELEC Resolution No. 7902 is VALID.

G.R. No. 156208 September 26, 2006

NPC DRIVERS AND MECHANICS ASSOCIATION, (NPC DAMA), represented by Its President ROGER S. SAN JUAN, SR., NPC EMPLOYEES & WORKERS
UNION (NEWU) – NORTHERN LUZON REGIONAL CENTER, represented by its Regional President JIMMY D. SALMAN, in their own individual capacities
and in behalf of the members of the associations and all affected officers and employees of National Power Corporation (NPC), ZOL D. MEDINA,
NARCISO M. MAGANTE, VICENTE B. CIRIO, JR., NECITAS B. CAMAMA, in their individual capacities as employees of National Power Corporation,
petitioners,
vs.
THE NATIONAL POWER CORPORATION (NPC), NATIONAL POWER BOARD OF DIRECTORS (NPB), JOSE ISIDRO N. CAMACHO as Chairman of the
National Power Board of Directors (NPB), ROLANDO S. QUILALA, as President – Officer-in-charge/CEO of National Power Corporation and Member of
National Power Board, and VINCENT S. PEREZ, JR., EMILIA T. BONCODIN, MARIUS P. CORPUS, RUBEN S. REINOSO, JR., GREGORY L. DOMINGO and
NIEVES L. OSORIO, respondents.

DECISION Before Us is a special civil action for Injunction to enjoin public respondents
from implementing the National Power Board (NPB) Resolutions No. 2002-124
CHICO-NAZARIO, J.: and No. 2002-125, both dated 18 November 2002, directing, among other
things, the termination of all employees of the National Power Corporation
(NPC) on 31 January 2003 in line with the restructuring of the NPC.
On 8 June 2001, Republic Act No. 9136, otherwise known as the "Electric
Power Industry Reform Act of 2001" (EPIRA Law), was approved and signed
into law by President Gloria Macapagal-Arroyo, and took effect on 26 June
2001. Section 2(i) and Section 3 of the EPIRA Law states:
Section 2. Declaration of Policy. – It is hereby declared the policy of the State:
xxxx
(i) To provide for an orderly and transparent privatization of the assets and
liabilities of the National Power Corporation (NPC);
xxxx
Section 3. Scope. – This Act shall provide a framework for the restructuring of
the electric power industry, including the privatization of the assets of NPC, the
transition to the desired competitive structure, and the definition of the
responsibilities of the various government agencies and private entities.1
Under the EPIRA Law,2 a new National Power Board of Directors was
constituted composed of the Secretary of Finance as Chairman, with the
Secretary of Energy, the Secretary of Budget and Management, the Secretary
of Agriculture, the Director-General of the National Economic and Development
Authority, the Secretary of Environment and Natural Resources, the Secretary
of Interior and Local Government, the Secretary of the Department of Trade
and Industry, and the President of the National Power Corporation as
members.
On 27 February 2002, the Secretary of the Department of Energy (DOE)
promulgated the Implementing Rules and Regulations (IRR) of the EPIRA Law,
pursuant to Section 773 thereof. Said IRR were approved by the Joint
Congressional Power Commission on even date. Meanwhile, also in pursuant
to the provisions of the EPIRA Law, the DOE created the Energy Restructuring
Steering Committee (Restructuring Committee) to manage the privatization and
restructuring of the NPC, the National Transmission Corporation (TRANSCO),
and the Power Sector Assets and Liabilities Corporation (PSALM).
To serve as the overall organizational framework for the realigned functions of
the NPC mandated under the EPIRA Law, the Restructuring Committee
proposed a new NPC Table of Organization which was approved by the NPB
through NPB Resolution No. 2002-53 dated 11 April 2002. Likewise, the
Restructuring Committee reviewed the proposed 2002 NPC Restructuring Plan
and assisted in the implementation of Phase I (Realignment) of said Plan, and
thereafter recommended to the NPB for approval the adoption of measures
pertaining to the separation and hiring of NPC personnel. The NPB, taking into
consideration the recommendation of the Restructuring Committee, thus
amended the Restructuring Plan approved under NPB Resolution No. 2002-53.
On 18 November 2002, pursuant to Section 634 of the EPIRA Law and Rule 335
of the IRR, the NPB passed NPB Resolution No. 2002-124 which provided for
the Guidelines on the Separation Program of the NPC and the Selection and
Placement of Personnel in the NPC Table of Organization. Under said
Resolution, all NPC personnel shall be legally terminated on 31 January 2003,
and shall be entitled to separation benefits. On the same day, the NPB
approved NPB Resolution No. 2002-125, whereby a Transition Team was
constituted to manage and implement the NPC's Separation Program.
In a Memorandum dated 21 November 2002, the NPC OIC-President and CEO
Rolando S. Quilala circulated the assailed Resolutions and directed the
concerned NPC officials to disseminate and comply with said Resolutions and
implement the same within the period provided for in the timetable set in NPB
Resolution No. 2002-125. As a result thereof, Mr. Paquito F. Garcia, Manager –
HRSD and Resources and Administration Coordinator of NPC, circulated a
Memorandum dated 22 November 2002 to all NPC officials and employees
providing for a checklist of the documents required for securing clearances for
the processing of separation benefits of all employees who shall be terminated
under the Restructuring Plan.
Contending that the assailed NPB Resolutions are void and without force and
effect, herein petitioners, in their individual and representative capacities, filed
the present Petition for Injunction to restrain respondents from implementing
NPB Resolutions No. 2002-124 and No. 2002-125. In support thereof,
petitioners invoke Section 78 of the EPIRA Law, to wit:
Section 78. Injunction and Restraining Order. – The implementation of the
provisions of this Act shall not be restrained or enjoined except by an order
issued by the Supreme Court of the Philippines.
In assailing the validity of NPB Resolutions No. 2002-124 and No. 2002-125,
petitioners maintain that said Resolutions were not passed and issued by a
majority of the members of the duly constituted Board of Directors since only
three of its members, as provided under Section 486 of the EPIRA Law, were
present, namely: DOE Secretary Vincent S. Perez, Jr.; Department of Budget
and Management Secretary Emilia T. Boncodin; and NPC OIC-President
Rolando S. Quilala. According to petitioners, the other four members who were
present at the meeting and signed the Resolutions were not the secretaries of
their respective departments but were merely representatives or designated
alternates of the officials who were named under the EPIRA Law to sit as
members of the NPB. Petitioners claim that the acts of these representatives
are violative of the well-settled principle that "delegated power cannot be further
delegated." Thus, petitioners conclude that the questioned Resolutions have
been illegally issued as it were not issued by a duly constituted board since no
quorum existed because only three of the nine members, as provided under
Section 48 of the EPIRA Law, were present and qualified to sit and vote.
It is petitioners' submission that even assuming arguendo that there was no
undue delegation of power to the four representatives who signed the assailed
Resolutions, said Resolutions cannot still be given legal effect because the
same did not comply with the mandatory requirement of endorsement by the
Joint Congressional Power Commission and approval of the President of the
Philippines, as provided under Section 47 of the EPIRA Law which states that:
Section 47. NPC Privatization. – Except for the assets of SPUG, the generation
assets, real estate, and other disposable assets as well as IPP contracts of
NPC shall be privatized in accordance with this Act. Within six (6) months from
effectivity of this Act, the PSALM Corp. shall submit a plan for the endorsement
by the Joint Congressional Power Commission and the approval of the
President of the Philippines, on the total privatization of the generation assets,
real estate, other disposable assets as well as existing IPP contracts of NPC
and thereafter, implement the same, in accordance with the following
guidelines, except as provided for in paragraph (f) herein: x x x.
Petitioners insist that if ever there exists a valid wholesale abolition of their
positions and their concomitant separation form the service, such a process is
an integral part of "privatization" and "restructuring" as defined under the EPIRA
Law and, therefore, must comply with the above-quoted provision requiring the
endorsement of the Joint Congressional Power Commission and the approval
of the President of the Philippines. Furthermore, petitioner highlight the fact that
said Resolutions will have an adverse effect on about 5,648 employees of the
NPC and will result in the displacement of some 2,370 employees, which,
petitioners argue, is contrary to the mandate of the Constitution to promote full
employment and security of tenure.
Respondents, on the other hand, uphold the validity of the assailed Resolutions
by arguing that while it is true that four members of the National Power Board of
Directors, particularly the respective Secretaries of the Department of Interior
and Local Government, the Department of Trade and Industry, and the
Department of Finance, as well as the Director-General of the National
Economic and Development Authority, were not the actual signatories in NPB
Resolutions No. 2002-124 and No. 2002-125, they were, however, ably
represented by their respective alternates. Respondents claim that the validity
of such administrative practice whereby an authority is exercised by persons or
subordinates appointed by the responsible official has long been settled.
Respondents further contend that Section 48 of the EPIRA Law does not in any
way prohibit any member of the NPB from authorizing his representative to sign
resolutions adopted by the Board.
From the arguments put forward by herein parties, it is evident that the pivotal
issue to be resolved in this Petition for Injunction is whether or not NPB
Resolutions No. 2002-124 and No. 2002-125 were properly enacted. It is
petitioners' contention that the failure of the four specifically identified
department heads7 under Section 48 of the EPIRA Law to personally approve
and sign the assailed Resolutions invalidates the adoption of said Resolutions.
Petitioners maintain that there was undue delegation of delegated power when
only the representatives of certain members of the NPB attended the board
meetings and passed and signed the questioned Resolutions.
We agree with petitioners. In enumerating under Section 48 those who shall
compose the National Power Board of Directors, the legislature has vested
upon these persons the power to exercise their judgment and discretion in
running the affairs of the NPC. Discretion may be defined as "the act or the
liberty to decide according to the principles of justice and one's ideas of what is
right and proper under the circumstances, without willfulness or favor.8
Discretion, when applied to public functionaries, means a power or right
conferred upon them by law of acting officially in certain circumstances,
according to the dictates of their own judgment and conscience, uncontrolled by
the judgment or conscience of others.9 It is to be presumed that in naming the
respective department heads as members of the board of directors, the
legislature chose these secretaries of the various executive departments on the
basis of their personal qualifications and acumen which made them eligible to
occupy their present positions as department heads. Thus, the department
secretaries cannot delegate their duties as members of the NPB, much less
their power to vote and approve board resolutions, because it is their personal
judgment that must be exercised in the fulfillment of such responsibility.
There is no question that the enactment of the assailed Resolutions involves the nine board members, namely those of DOE Secretary Vincent S. Perez, Jr.;
the exercise of discretion and not merely a ministerial act that could be validly Department of Budget and Management Secretary Emilia T. Boncodin; and
performed by a delegate, thus, the rule enunciated in the case of Binamira v. NPC OIC-President Rolando S. Quilala, NPB Resolutions No. 2002-124 and
Garrucho10 is relevant in the present controversy, to wit: No. 2002-125 are void and are of no legal effect.

An officer to whom a discretion is entrusted cannot delegate it to another, the
presumption being that he was chosen because he was deemed fit and
competent to exercise that judgment and discretion, and unless the power to
substitute another in his place has been given to him, he cannot delegate his
duties to another.
In those cases in which the proper execution of the office requires, on the part
of the officer, the exercise of judgment or discretion, the presumption is that he
was chosen because he was deemed fit and competent to exercise that
judgment and discretion, and, unless power to substitute another in his place
has been given to him, he cannot delegate his duties to another.
Having determined that the assailed Resolutions are void as they lack the
necessary number of votes for their adoption, We no longer deem it necessary
to pass upon the other issues raised in the instant petition
WHEREFORE, premises considered, National Power Board Resolutions No.
2002-124 and No. 2002-125 are hereby declared VOID and WITHOUT LEGAL
EFFECT. The Petition for Injunction is hereby GRANTED and respondents are
hereby ENJOINED from implementing said NPB Resolutions No. 2002-124 and
No. 2002-125.
SO ORDERED.

Respondents' assertion to the contrary is not tenable. The ruling in the case
cited by respondents to support their contention is not applicable in the case at
bar. While it is true that the Court has determined in the case of American
Tobacco Company v. Director of Patents11 that a delegate may exercise his
authority through persons he appoints to assist him in his functions, it must be
stressed that the Court explicitly stated in the same case that said practice is
permissible only when the judgment and discretion finally exercised are
those of the officer authorized by law. According to the Court, the rule that
requires an administrative officer to exercise his own judgment and discretion
does not preclude him from utilizing, as a matter of practical administrative
procedure, the aid of subordinates, so long as it is the legally authorized official
who makes the final decision through the use of his own personal judgment.

In the case at bar, it is not difficult to comprehend that in approving NPB

Resolutions No. 2002-124 and No. 2002-125, it is the representatives of the
secretaries of the different executive departments and not the secretaries
themselves who exercised judgment in passing the assailed Resolution, as
shown by the fact that it is the signatures of the respective representatives that
are affixed to the questioned Resolutions. This, to our mind, violates the duty
imposed upon the specifically enumerated department heads to employ their
own sound discretion in exercising the corporate powers of the NPC. Evidently,
the votes cast by these mere representatives in favor of the adoption of the said
Resolutions must not be considered in determining whether or not the
necessary number of votes was garnered in order that the assailed Resolutions
may be validly enacted. Hence, there being only three valid votes cast out of
 A.M. No. MTJ-08-1715 March 19, 2009
[Formerly A.M. OCA IPI No. 08-2037-MTJ]

RODOLFO R. MAGO, Complainant,

vs.
JUDGE AUREA G. PEÑALOSA-FERMO, MTC, LABO, CAMARINES NORTE, Respondent.

DECISION
CARPIO MORALES, J.:
Rodolfo R. Mago (complainant) filed before the Municipal Trial Court (MTC) of
Labo, Camarines Norte a complaint for grave coercion against Sheriff Alex
Rodolfo Angeles (of the Department of Agrarian Reform Adjudication Board
[DARAB]), et al. The case was docketed as Criminal Case No. 04-7800.
Sheriff Angeles filed a counter-charge for grave threats against complainant
and his sons, docketed as Criminal Case No. 04-7811.
Alleging that Presiding Judge of the MTC Labo, Camarines Sur Judge Aurea G.
Peñalosa-Fermo (respondent) committed gross ignorance of the law and bias
in the disposition of his complaint and of the counter-charge against him,
complainant filed the present administrative complaint, the details of which
were summarized by the Office of the Court Administrator (OCA) as follows:1
Mr. Mago claims that on April 21, 2004 he filed a complaint for Grave Coercion
against Department of Agrarian Reform Adjudication Board (DARAB for brevity)
Sheriff Alex Roberto Angeles which was docketed as Criminal Case No. 04-
7800. However, instead of summoning the accused for a "Preliminary
Investigation", he received a complaint charging him and his two (2) sons with
Grave Threats [which was docketed as Criminal Case No. 04-7811]. He
stresses the complaint against him as purely fabricated. He states that the
complainant in the said case was not DARAB Sheriff Angeles. He avers that
the affidavits of the witnesses in the said case could not be found in the records
of the Municipal Trial Court (MTC). Complainant further declares that on July
20, 2004, he received a subpoena to attend the preliminary investigation of
Criminal Case No. 04-7811. In compliance, he and his witnesses attended, and
even without the assistance of counsel, they were examined through a
prepared set of questions handed to them by the stenographer. The respondent
judge was not present then. The complainant also states that right after the
preliminary investigation, he was immediately arrested and was imprisoned for
three (3) days. Thereafter, he was released after he posted bail in the amount
of Php12,000 pesos.
Complainant also alleges that he filed a Petition for Certiorari, Mandamus,
Prohibition with Application for Preliminary Injunction and Ex-Parte Motion for
Temporary Restraining Order questioning the order of respondent judge in
denying his omnibus motion to quash the information, suppress evidence and
produce, inspect and copy documentary evidence. He adds that despite the
filing of this petition, the respondent judge continued to direct him to appear at
the pre-trial/preliminary conference. He likewise avers that his arraignment was
set beyond the period allowed by the Rules of Court. He also laments that he
could not locate his lawyer, Atty. Lamberto Bonifacio, Jr. Finally, he alleges that
the respondent judge had been biased when hearing his case.2 (Italics in the
original; emphasis an underscoring supplied)
By 2nd Indorsement dated July 31, 2007,3 respondent gave her side of the case
as follows:
Contrary to complainant’s allegation, the complaint in Criminal Case No. 04-
7811 (for grave threats), and the affidavits of the therein complainant-sheriff’s
witnesses were attached to the record.4
Admitting complainant’s allegation that the court stenographer examined
complainant and his witnesses during the preliminary investigation of the grave
threats complaint against him with the use of prepared written set of questions,
respondent explains as follows:
What [complainant] claimed in his Letter-Complaint that the Court Stenographer
has a prepared sheet of questions during the preliminary examination is true
because after a complaint is filed, the undersigned prepares her questions for
preliminary examination based on the affidavits of the complaining witnesses
and the counter affidavits of the accused. This is done to make it easy for the
Stenographers to take/print the transcript of the proceedings. Some
witnesses even ask to read/study the question and request that they write down
their answers to the questions for the Stenographers to finalize. Also, this is
convenient when more than one preliminary examination is scheduled for the
day. This procedure makes it easier for the Stenographers and the witnesses,
too, considering the cramped office space.
After the witnesses are briefed, the [s]tenographers take over since the
prepared sheets are given to them so they could propound the questions
and the answers are typed directly. x x x5 (Emphasis, italics and
underscoring supplied)
Denying complainant’s allegation that he was arrested within the court
premises on July 20, 2004 or right after the conduct of the preliminary
examination conducted in the grave threats complaint against him, respondent
alleges that the preliminary examination was conducted at 9:00 o’clock in the
morning of July 19, 2004; that she issued an Order6 the following day, July 20,
2004, finding probable cause and directing the issuance of a warrant of arrest7
against complainant which the warrant officer received at 4:40 p.m. on even
date; and that complainant was arrested on July 21, 2004 at the Poblacion,
Labo, Camarines Norte, as shown by the Warrant Officer’s Return of Service.8
Admitting that there was delay in scheduling the arraignment of complainant
after his arrest, respondent surmises that the Clerk of Court or the clerk-in-
charge might have overlooked the Return of Service of the warrant officer.
Respondent states, however, that when the arraignment was scheduled,
complainant’s counsel opposed the same and filed an Omnibus Motion which
resulted in the repeated resetting of the arraignment. Respondent adds that
after complainant was arraigned on June 6, 2006, the preliminary
conference/pre-trial was set but was not terminated due to the absence of
complainant or his counsel.9
In fact, respondent goes on to allege that in complainant’s attempt to block his
arraignment and to quash the Information against him, he filed a Petition for
Certiorari, Mandamus, Prohibition with Application for Mandatory Injunction and
Ex-Parte Motion for Temporary Restraining Order with the Regional Trial Court
of Labo which was denied for lack of merit. 10
On the allegation of bias on her part, respondent claims that until the criminal
complaints were filed, she did not know any of the parties.
By June 18, 2008 Report,11 the OCA came up with the following Evaluation:
xxxx
. . . [W]e hold [respondent] administratively liable for her unfamiliarity with the
basic rules on preliminary investigation. There was irregularity during the
preliminary investigation when the respondent judge allowed the stenographers
to handle the latter part of the proceedings.
xxxx
. . . [R]espondent admitted that after the complaint was filed, she prepared a set
of questions based on the affidavits of the complaining witnesses and counter
affidavits of the accused. She further added that during the preliminary
investigation and after briefing the accused and his witnesses, the
stenographers took charge of the proceedings. Hence, the respondent judge
violated the rules on preliminary investigation. Respondent should not have
allowed her stenographer to handle the latter part of the proceedings even if
she only wanted to expedite the proceedings and it was more convenient.
Respondent judge should have personally taken charge of the entire
proceedings since the power to conduct preliminary investigations vests
only on her and not on the stenographer.
x x x x12 (Emphasis and underscoring supplied)
Finding respondent guilty of gross ignorance of the law or procedure, the OCA
recommended that respondent be FINED in the amount of P20,000 in this wise:
[W]e deem it proper to recommend the imposition upon the respondent judge of
a penalty of fine in the amount of P20,000[,] this being her first offense.
As regards the issue of continuous hearing of the case by the respondent
judge, we opine that the respondent judge only acted in good faith and in
accordance with law when she continued to direct the herein complainant to
attend the pre-trial. Based on the records, the Petition for Certiorari,
Mandamus, Prohibition with Application for Mandatory Injunction and Ex-Parte
Motion for Temporary Restraining Order and the Motion for Reconsideration
thereto filed by complainant with the Regional Trial Court, Branch 64, Labo,
Camarines Norte were already denied; thus the respondent judge had the
authority to proceed with the case. The postponements in the pre-trial were not
attributable to the respondent judge but to the accused and his
counsel.1avvphi1
Finally, on the issue of bias, complainant failed to submit any evidence showing
the respondent biased or partial in hearing the case. Bias and partiality of a
judge must be proved by clear and convincing evidence. Mere suspicion that a
judge is bias or partial would not be enough.13 (Italics in the original;
underscoring supplied)
By Resolution of August 20, 2008,14 the Court, on the recommendation of the
OCA, re-docketed the case and required the parties to manifest within ten days
from notice whether they were willing to submit the matter for resolution on the
basis of the pleadings filed and submitted. Both parties have manifested in the
affirmative.
The Court finds the evaluation well-taken.
Prior to the amendment on October 3, 2005 of Rules 112 and 114 of the Rules
of Court via A.M. No. 05-8-26-SC, Re: Amendment of Rules 112 and 114 of the
Revised Rules on Criminal Procedure by Removing the Conduct of Preliminary
Investigation from Judges of the First Level Courts, judges of municipal trial
courts were empowered to conduct preliminary investigations in which they
exercised discretion in determining whether there was probable cause to hale
the respondent into court. Such being the case, they could not delegate the
discretion to another.
An officer to whom a discretion is entrusted cannot delegate it to another, the
presumption being that he was chosen because he was deemed fit and
competent to exercise that judgment and discretion, and unless the power to
substitute another in his place has been given to him, he cannot delegate his
duties to another.
In those cases in which the proper execution of the office requires on the part of
the officer, the exercise of judgment or discretion, the presumption is that he
was chosen because he was deemed fit and competent to exercise that
judgment and discretion, and, unless power to substitute another in his place
has been given to him, he cannot delegate his duties to another. 15
(Underscoring supplied)
Then, as now, a personal examination of the complainant in a criminal case
and his witness/es was required. Thus, under Section 4, Rule 112 of the
Revised Rules of Court before its amendment, the "investigating fiscal" was
required to "certify under oath that he, or as shown by the record, an authorized
officer, has personally examined the complainant and his witnesses . . . "
By respondent’s delegation of the examination of the sheriff-complainant in the
grave threats case to the stenographer, and worse, by allowing the witnesses
to "read/study the [written] question[s]" to be propounded to them and to "write
their answers [thereto]" upon respondent’s justification that the scheme was for
the convenience of the stenographers, respondent betrayed her lack of
knowledge of procedure, thereby contributing to the erosion of public
confidence in the judicial system.

Respondent is thus guilty of gross ignorance of the law or procedure which,

under Section 8, Rule 140 of the Rules of Court, is a serious charge, 16 for which
Section 11 (A) of the same Rule prescribes the following penalty:

SEC. 11. Sanctions. – A. If the respondent is guilty of a serious charge, any of

the following sanctions may be imposed:

1. Dismissal from the service, forfeiture of all or part of the benefits as the Court
may determine, and disqualification from reinstatement or appointment to any
public office, including government-owned and controlled corporations.
Provided, however, That the forfeiture of benefits shall in no case include
accrued leave credits;

2. Suspension from office without salary and other benefits for more than three
(3) but not exceeding six (6) months; or

3. A fine of more than P20,000 but not exceeding P40,000.00.

The Court thus finds in order the Recommendation of the OCA to impose a fine
of P20,000 on respondent. The OCA’s recommendation to warn respondent
that a "repetition of the same act will be dealt with more severely" does not lie,
however, A.M. No. 05-8-26-SC, which took effect on October 3, 2005, having
removed the power of judges of the first level courts17 to conduct preliminary
investigation. A warning that a commission of another infraction tantamount to
gross ignorance of law or procedures shall be dealt with more severely lies,
however.

WHEREFORE, the Court finds respondent, Judge Aurea G. Peñalosa-Fermo of

the Municipal Trial Court of Labo, Camarines Norte, guilty of Gross Ignorance
of the Law or Procedure. She is FINED in the amount of Twenty Thousand
(P20,000) Pesos and warned that a commission of another infraction which is
tantamount to the same charge shall be dealt with more severely.

SO ORDERED.