EN BANC G.R. No.

166494 June 29, 2007

or enjoyment of senior citizens, including funeral and burial services for the death of senior citizens; ...

CARLOS SUPERDRUG CORP., doing business under the name and style "Carlos Superdrug," ELSIE M. CANO, doing business under the name and style "Advance Drug," Dr. SIMPLICIO L. YAP, JR., doing business under the name and style "City Pharmacy," MELVIN S. DELA SERNA, doing business under the name and style "Botica dela Serna," and LEYTE SERV-WELL CORP., doing business under the name and style "Leyte Serv-Well Drugstore," petitioners, vs. DEPARTMENT OF SOCIAL WELFARE and DEVELOPMENT (DSWD), DEPARTMENT OF HEALTH (DOH), DEPARTMENT OF FINANCE (DOF), DEPARTMENT OF JUSTICE (DOJ), and DEPARTMENT OF INTERIOR and LOCAL GOVERNMENT (DILG), respondents. AZCUNA, J.: This is a petition1 for Prohibition with Prayer for Preliminary Injunction assailing the constitutionality of Section 4(a) of Republic Act (R.A.) No. 9257,2 otherwise known as the "Expanded Senior Citizens Act of 2003." Petitioners are domestic corporations and proprietors operating drugstores in the Philippines. Public respondents, on the other hand, include the Department of Social Welfare and Development (DSWD), the Department of Health (DOH), the Department of Finance (DOF), the Department of Justice (DOJ), and the Department of Interior and Local Government (DILG) which have been specifically tasked to monitor the drugstores compliance with the law; promulgate the implementing rules and regulations for the effective implementation of the law; and prosecute and revoke the licenses of erring drugstore establishments. The antecedents are as follows: On February 26, 2004, R.A. No. 9257, amending R.A. No. 7432,3 was signed into law by President Gloria Macapagal-Arroyo and it became effective on March 21, 2004. Section 4(a) of the Act states: SEC. 4. Privileges for the Senior Citizens. The senior citizens shall be entitled to the following: (a) the grant of twenty percent (20%) discount from all establishments relative to the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers, and purchase of medicines in all establishments for the exclusive use

The establishment may claim the discounts granted under (a), (f), (g) and (h) as tax deduction based on the net cost of the goods sold or services rendered: Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted. Provided, further, That the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended.4 On May 28, 2004, the DSWD approved and adopted the Implementing Rules and Regulations of R.A. No. 9257, Rule VI, Article 8 of which states: Article 8. Tax Deduction of Establishments. The establishment may claim the discounts granted under Rule V, Section 4 Discounts for Establishments;5 Section 9, Medical and Dental Services in Private Facilities[,]6 and Sections 107 and 118 Air, Sea and Land Transportation as tax deduction based on the net cost of the goods sold or services rendered. Provided, That the cost of the discount shall be allowed as deduction from gross income for the same taxable year that the discount is granted; Provided, further, That the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes and shall be subject to proper documentation and to the provisions of the National Internal Revenue Code, as amended; Provided, finally, that the implementation of the tax deduction shall be subject to the Revenue Regulations to be issued by the Bureau of Internal Revenue (BIR) and approved by the Department of Finance (DOF).9 On July 10, 2004, in reference to the query of the Drug Stores Association of the Philippines (DSAP) concerning the meaning of a tax deduction under the Expanded Senior Citizens Act, the DOF, through Director IV Ma. Lourdes B. Recente, clarified as follows: 1) The difference between the Tax Credit (under the Old Senior Citizens Act) and Tax Deduction (under the Expanded Senior Citizens Act). 1.1. The provision of Section 4 of R.A. No. 7432 (the old Senior Citizens Act) grants twenty percent (20%) discount from all establishments relative to the utilization of transportation services, hotels and similar lodging establishment, restaurants and recreation centers and purchase of medicines anywhere in the country, the costs of which may be claimed by the private establishments concerned as tax credit. Effectively, a tax credit is a peso-for-peso deduction from a taxpayers tax liability due to the government of the amount of discounts such establishment has granted to a senior

citizen. The establishment recovers the full amount of discount given to a senior citizen and hence, the government shoulders 100% of the discounts granted. It must be noted, however, that conceptually, a tax credit scheme under the Philippine tax system, necessitates that prior payments of taxes have been made and the taxpayer is attempting to recover this tax payment from his/her income tax due. The tax credit scheme under R.A. No. 7432 is, therefore, inapplicable since no tax payments have previously occurred. 1.2. The provision under R.A. No. 9257, on the other hand, provides that the establishment concerned may claim the discounts under Section 4(a), (f), (g) and (h) as tax deduction from gross income, based on the net cost of goods sold or services rendered. Under this scheme, the establishment concerned is allowed to deduct from gross income, in computing for its tax liability, the amount of discounts granted to senior citizens. Effectively, the government loses in terms of foregone revenues an amount equivalent to the marginal tax rate the said establishment is liable to pay the government. This will be an amount equivalent to 32% of the twenty percent (20%) discounts so granted. The establishment shoulders the remaining portion of the granted discounts. It may be necessary to note that while the burden on [the] government is slightly diminished in terms of its percentage share on the discounts granted to senior citizens, the number of potential establishments that may claim tax deductions, have however, been broadened. Aside from the establishments that may claim tax credits under the old law, more establishments were added under the new law such as: establishments providing medical and dental services, diagnostic and laboratory services, including professional fees of attending doctors in all private hospitals and medical facilities, operators of domestic air and sea transport services, public railways and skyways and bus transport services. A simple illustration might help amplify the points discussed above, as follows: Tax Deduction Tax Credit Gross Sales x x x x x x x x x x x x Less : Cost of goods sold x x x x x x x x x x Net Sales x x x x x x x x x x x x Less: Operating Expenses: Tax Deduction on Discounts x x x x --

Other deductions: x x x x x x x x Net Taxable Income x x x x x x x x x x Tax Due x x x x x x Less: Tax Credit -- ______x x Net Tax Due -- x x As shown above, under a tax deduction scheme, the tax deduction on discounts was subtracted from Net Sales together with other deductions which are considered as operating expenses before the Tax Due was computed based on the Net Taxable Income. On the other hand, under a tax credit scheme, the amount of discounts which is the tax credit item, was deducted directly from the tax due amount.10 Meanwhile, on October 1, 2004, Administrative Order (A.O.) No. 171 or the Policies and Guidelines to Implement the Relevant Provisions of Republic Act 9257, otherwise known as the "Expanded Senior Citizens Act of 2003"11was issued by the DOH, providing the grant of twenty percent (20%) discount in the purchase of unbranded generic medicines from all establishments dispensing medicines for the exclusive use of the senior citizens. On November 12, 2004, the DOH issued Administrative Order No 177 12 amending A.O. No. 171. Under A.O. No. 177, the twenty percent discount shall not be limited to the purchase of unbranded generic medicines only, but shall extend to both prescription and non-prescription medicines whether branded or generic. Thus, it stated that "[t]he grant of twenty percent (20%) discount shall be provided in the purchase of medicines from all establishments dispensing medicines for the exclusive use of the senior citizens." Petitioners assail the constitutionality of Section 4(a) of the Expanded Senior Citizens Act based on the following grounds:13 1) The law is confiscatory because it infringes Art. III, Sec. 9 of the Constitution which provides that private property shall not be taken for public use without just compensation; 2) It violates the equal protection clause (Art. III, Sec. 1) enshrined in our Constitution which states that "no person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied of the equal protection of the laws;" and 3) The 20% discount on medicines violates the constitutional guarantee in Article XIII, Section 11 that makes "essential goods, health and other social services available to all people at affordable cost."14

Petitioners assert that Section 4(a) of the law is unconstitutional because it constitutes deprivation of private property. Compelling drugstore owners and establishments to grant the discount will result in a loss of profit and capital because 1) drugstores impose a mark-up of only 5% to 10% on branded medicines; and 2) the law failed to provide a scheme whereby drugstores will be justly compensated for the discount. Examining petitioners arguments, it is apparent that what petitioners are ultimately questioning is the validity of the tax deduction scheme as a reimbursement mechanism for the twenty percent (20%) discount that they extend to senior citizens. Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount privilege accorded to senior citizens. This is because the discount is treated as a deduction, a tax-deductible expense that is subtracted from the gross income and results in a lower taxable income. Stated otherwise, it is an amount that is allowed by law15 to reduce the income prior to the application of the tax rate to compute the amount of tax which is due.16 Being a tax deduction, the discount does not reduce taxes owed on a peso for peso basis but merely offers a fractional reduction in taxes owed. Theoretically, the treatment of the discount as a deduction reduces the net income of the private establishments concerned. The discounts given would have entered the coffers and formed part of the gross sales of the private establishments, were it not for R.A. No. 9257. The permanent reduction in their total revenues is a forced subsidy corresponding to the taking of private property for public use or benefit.17 This constitutes compensable taking for which petitioners would ordinarily become entitled to a just compensation. Just compensation is defined as the full and fair equivalent of the property taken from its owner by the expropriator. The measure is not the takers gain but the owners loss. The word just is used to intensify the meaning of the word compensation, and to convey the idea that the equivalent to be rendered for the property to be taken shall be real, substantial, full and ample.18 A tax deduction does not offer full reimbursement of the senior citizen discount. As such, it would not meet the definition of just compensation.19 Having said that, this raises the question of whether the State, in promoting the health and welfare of a special group of citizens, can impose upon private establishments the burden of partly subsidizing a government program. The Court believes so.

The Senior Citizens Act was enacted primarily to maximize the contribution of senior citizens to nation-building, and to grant benefits and privileges to them for their improvement and well-being as the State considers them an integral part of our society.20 The priority given to senior citizens finds its basis in the Constitution as set forth in the law itself. Thus, the Act provides: SEC. 2. Republic Act No. 7432 is hereby amended to read as follows: SECTION 1. Declaration of Policies and Objectives. Pursuant to Article XV, Section 4 of the Constitution, it is the duty of the family to take care of its elderly members while the State may design programs of social security for them. In addition to this, Section 10 in the Declaration of Principles and State Policies provides: "The State shall provide social justice in all phases of national development." Further, Article XIII, Section 11, provides: "The State shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost. There shall be priority for the needs of the underprivileged sick, elderly, disabled, women and children." Consonant with these constitutional principles the following are the declared policies of this Act: ... (f) To recognize the important role of the private sector in the improvement of the welfare of senior citizens and to actively seek their partnership.21 To implement the above policy, the law grants a twenty percent discount to senior citizens for medical and dental services, and diagnostic and laboratory fees; admission fees charged by theaters, concert halls, circuses, carnivals, and other similar places of culture, leisure and amusement; fares for domestic land, air and sea travel; utilization of services in hotels and similar lodging establishments, restaurants and recreation centers; and purchases of medicines for the exclusive use or enjoyment of senior citizens. As a form of reimbursement, the law provides that business establishments extending the twenty percent discount to senior citizens may claim the discount as a tax deduction. The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its object. Police power is not capable of an exact definition, but has been purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response to conditions and circumstances, thus assuring the greatest benefits. 22 Accordingly, it has been described as "the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs."23 It is "[t]he power vested in the legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with

penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same."24 For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of police power because property rights, though sheltered by due process, must yield to general welfare.25 Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of petitioners that they will suffer loss of earnings and capital, the questioned provision is invalidated. Moreover, in the absence of evidence demonstrating the alleged confiscatory effect of the provision in question, there is no basis for its nullification in view of the presumption of validity which every law has in its favor.26 Given these, it is incorrect for petitioners to insist that the grant of the senior citizen discount is unduly oppressive to their business, because petitioners have not taken time to calculate correctly and come up with a financial report, so that they have not been able to show properly whether or not the tax deduction scheme really works greatly to their disadvantage.27 In treating the discount as a tax deduction, petitioners insist that they will incur losses because, referring to the DOF Opinion, for every P1.00 senior citizen discount that petitioners would give, P0.68 will be shouldered by them as only P0.32 will be refunded by the government by way of a tax deduction. To illustrate this point, petitioner Carlos Super Drug cited the anti-hypertensive maintenance drug Norvasc as an example. According to the latter, it acquires Norvasc from the distributors at P37.57 per tablet, and retails it atP39.60 (or at a margin of 5%). If it grants a 20% discount to senior citizens or an amount equivalent to P7.92, then it would have to sell Norvasc at P31.68 which translates to a loss from capital of P5.89 per tablet. Even if the government will allow a tax deduction, only P2.53 per tablet will be refunded and not the full amount of the discount which is P7.92. In short, only 32% of the 20% discount will be reimbursed to the drugstores.28 Petitioners computation is flawed. For purposes of reimbursement, the law states that the cost of the discount shall be deducted from gross income,29 the amount of income derived from all sources before deducting allowable expenses, which will result in net income. Here, petitioners tried to show a loss on a per transaction basis, which should not be the case. An income statement, showing an accounting of petitioners sales, expenses, and net profit (or loss) for a given period could have accurately reflected the effect of the discount on their income. Absent any financial statement, petitioners cannot substantiate their claim that they will be operating at a loss should they give the discount. In addition, the computation was erroneously based on the assumption that their customers consisted wholly of senior citizens. Lastly, the 32% tax rate is to be imposed on income, not on the amount of the discount.

Furthermore, it is unfair for petitioners to criticize the law because they cannot raise the prices of their medicines given the cutthroat nature of the players in the industry. It is a business decision on the part of petitioners to peg the mark-up at 5%. Selling the medicines below acquisition cost, as alleged by petitioners, is merely a result of this decision. Inasmuch as pricing is a property right, petitioners cannot reproach the law for being oppressive, simply because they cannot afford to raise their prices for fear of losing their customers to competition. The Court is not oblivious of the retail side of the pharmaceutical industry and the competitive pricing component of the business. While the Constitution protects property rights, petitioners must accept the realities of business and the State, in the exercise of police power, can intervene in the operations of a business which may result in an impairment of property rights in the process. Moreover, the right to property has a social dimension. While Article XIII of the Constitution provides the precept for the protection of property, various laws and jurisprudence, particularly on agrarian reform and the regulation of contracts and public utilities, continuously serve as a reminder that the right to property can be relinquished upon the command of the State for the promotion of public good.30 Undeniably, the success of the senior citizens program rests largely on the support imparted by petitioners and the other private establishments concerned. This being the case, the means employed in invoking the active participation of the private sector, in order to achieve the purpose or objective of the law, is reasonably and directly related. Without sufficient proof that Section 4(a) of R.A. No. 9257 is arbitrary, and that the continued implementation of the same would be unconscionably detrimental to petitioners, the Court will refrain from quashing a legislative act.31 WHEREFORE, the petition is DISMISSED for lack of merit. Held: The law is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its object. Accordingly, it has been described as the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs. It is the power vested in the legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same. When the conditions so demand as determined by the legislature, property rights must bow to the primacy of police power because property rights, though sheltered by due process, must yield to general welfare.

EN BANC G.R. No. 158793 June 8, 2006

2. Previously, pursuant to its mandate under R.A. 2000, DPWH issued on June 25, 1998 Department Order (DO) No. 215 declaring the Manila-Cavite (Coastal Road) Toll Expressway as limited access facilities. 3. Accordingly, petitioners filed an Amended Petition on February 8, 2001 wherein petitioners sought the declaration of nullity of the aforesaid administrative issuances. Moreover, petitioners prayed for the issuance of a temporary restraining order and/or preliminary injunction to prevent the enforcement of the total ban on motorcycles along the entire breadth of North and South Luzon Expressways and the Manila-Cavite (Coastal Road) Toll Expressway under DO 215. 4. On June 28, 2001, the trial court, thru then Presiding Judge Teofilo Guadiz, after due hearing, issued an order granting petitioners application for preliminary injunction. On July 16, 2001, a writ of preliminary injunction was issued by the trial court, conditioned upon petitioners filing of cash bond in the amount ofP100,000.00, which petitioners subsequently complied with. 5. On July 18, 2001, the DPWH acting thru the TRB, issued Department Order No. 123 allowing motorcycles with engine displacement of 400 cubic centimeters inside limited access facilities (toll ways). 6. Upon the assumption of Honorable Presiding Judge Ma. Cristina Cornejo, both the petitioners and respondents were required to file their respective Memoranda. Petitioners likewise filed [their] Supplemental Memorandum. Thereafter, the case was deemed submitted for decision. 7. Consequently, on March 10, 2003, the trial court issued the assailed decision dismissing the petition but declaring invalid DO 123. Petitioners moved for a reconsideration of the dismissal of their petition; but it was denied by the trial court in its Order dated June 16, 2003.3 Hence, this petition. The RTCs Ruling The dispositive portion of the RTCs Decision dated 10 March 2003 reads: WHEREFORE, [t]he Petition is denied/dismissed insofar as petitioners seek to declare null and void ab initio DPWH Department Order No. 74, Series of 1993, Administrative Order No. 1, and Art. II, Sec. 3(a) of the Revised Rules on Limited Access Facilities promulgated by the DPWH thru the TRB, the presumed validity thereof not having been overcome; but the petition is granted insofar as DPWH Department Order No. 123 is

JAMES MIRASOL, RICHARD SANTIAGO, and LUZON MOTORCYCLISTS FEDERATION, INC., Petitioners, vs. DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS and TOLL REGULATORY BOARD, Respondents. DECISION CARPIO, J.: This petition for review on certiorari1 seeks to reverse the Decision dated 10 March 2003 of the Regional Trial Court, Branch 147, Makati City (RTC) in Civil Case No. 01-034, as well as the RTCs Order dated 16 June 2003 which denied petitioners Motion for Reconsideration. Petitioners assert that Department of Public Works and Highways (DPWH) Department Order No. 74 (DO 74), Department Order No. 215 (DO 215), and the Revised Rules and Regulations on Limited Access Facilities of the Toll Regulatory Board (TRB) violate Republic Act No. 2000 (RA 2000) or the Limited Access Highway Act. Petitioners also seek to declare Department Order No. 123 (DO 123) and Administrative Order No. 1 (AO 1)2 unconstitutional. Antecedent Facts The facts are not in dispute. As summarized by the Solicitor General, the facts are as follows: 1. On January 10, 2001, petitioners filed before the trial court a Petition for Declaratory Judgment with Application for Temporary Restraining Order and Injunction docketed as Civil Case No. 01-034. The petition sought the declaration of nullity of the following administrative issuances for being inconsistent with the provisions of Republic Act 2000, entitled "Limited Access Highway Act" enacted in 1957: a. DPWH Administrative Order No. 1, Series of 1968; b. DPWH Department Order No. 74, Series of 1993; c. Art. II, Sec. 3(a) of the Revised Rules on Limited Access Facilities promulgated in 199[8] by the DPWH thru the Toll Regulatory Board (TRB).

concerned, declaring the same to be invalid for being violative of the equal protection clause of the Constitution. SO ORDERED.4 The Issues Petitioners seek a reversal and raise the following issues for resolution: 1. WHETHER THE RTCS DECISION IS ALREADY BARRED BY RES JUDICATA; 2. WHETHER DO 74, DO 215 AND THE TRB REGULATIONS CONTRAVENE RA 2000; AND 3. WHETHER AO 1 AND DO 123 ARE UNCONSTITUTIONAL.5 The Ruling of the Court The petition is partly meritorious. Whether the RTCs Decision Dismissing Petitioners Case is Barred by Res Judicata Petitioners rely on the RTCs Order dated 28 June 2001, which granted their prayer for a writ of preliminary injunction. Since respondents did not appeal from that Order, petitioners argue that the Order became "a final judgment" on the issues. Petitioners conclude that the RTC erred when it subsequently dismissed their petition in its Decision dated 10 March 2003. Petitioners are mistaken. As the RTC correctly stated, the Order dated 28 June 2001 was not an adjudication on the merits of the case that would trigger res judicata. A preliminary injunction does not serve as a final determination of the issues. It is a provisional remedy, which merely serves to preserve the status quo until the court could hear the merits of the case.6 Thus, Section 9 of Rule 58 of the 1997 Rules of Civil Procedure requires the issuance of a final injunction to confirm the preliminary injunction should the court during trial determine that the acts complained of deserve to be permanently enjoined. A preliminary injunction is a mere adjunct, an ancillary remedy which exists only as an incident of the main proceeding.7 Validity of DO 74, DO 215 and the TRB Regulations Petitioners claim that DO 74,8 DO 215,9 and the TRBs Rules and Regulations issued under them violate the provisions of RA 2000. They contend that the two issuances unduly expanded the power of the DPWH in Section 4 of RA 2000 to regulate toll ways.

Petitioners assert that the DPWHs regulatory authority is limited to acts like redesigning curbings or central dividing sections. They claim that the DPWH is only allowed to redesign the physical structure of toll ways, and not to determine "who or what can be qualified as toll way users."10 Section 4 of RA 200011 reads: SEC. 4. Design of limited access facility. The Department of Public Works and Communications is authorized to so design any limited access facility and to so regulate, restrict, or prohibit access as to best serve the traffic for which such facility is intended; and its determination of such design shall be final. In this connection, it is authorized to divide and separate any limited access facility into separate roadways by the construction of raised curbings, central dividing sections, or other physical separations, or by designating such separate roadways by signs, markers, stripes, and the proper lane for such traffic by appropriate signs, markers, stripes and other devices. No person, shall have any right of ingress or egress to, from or across limited access facilities to or from abutting lands, except at such designated points at which access may be permitted, upon such terms and conditions as may be specified from time to time. (Emphasis supplied) On 19 February 1968, Secretary Antonio V. Raquiza of the Department of Public Works and Communicationsissued AO 1, which, among others, prohibited motorcycles on limited access highways. The pertinent provisions of AO 1 read: SUBJECT: Revised Rules and Regulations Governing Limited Access Highways By virtue of the authority granted the Secretary [of] Public Works and Communications under Section 3 of R.A. 2000, otherwise known as the Limited Access Highway Act, the following rules and regulations governing limited access highways are hereby promulgated for the guidance of all concerned: xxxx Section 3 On limited access highways, it is unlawful for any person or group of persons to: xxxx (h) Drive any bicycle, tricycle, pedicab, motorcycle or any vehicle (not motorized); x x x x12 (Emphasis supplied) On 5 April 1993, Acting Secretary Edmundo V. Mir of the Department of Public Works and Highways issued DO 74:

SUBJECT: Declaration of the North Luzon Expressway from Balintawak to Tabang and the South Luzon Expressway from Nichols to Alabang as Limited Access Facilities Pursuant to Section 2 of Republic Act No. 2000, a limited access facility is defined as "a highway or street especially designed for through traffic, and over, from, or to which owners or occupants of abutting land or other persons have no right or easement or only a limited right or easement of access, light, air or view by reason of the fact that their proper[t]y abuts upon such limited access facility or for any other reason. Such highways or streets may be parkways, from which trucks, buses, and other commerical [sic] vehicles shall be excluded; or they may be free ways open to use by all customary forms of street and highway traffic." Section 3 of the same Act authorizes the Department of Public Works and Communications (now Department of Public Works and Highways) "to plan, designate, establish, regulate, vacate, alter, improve, maintain, and provide limited access facilities for public use wherever it is of the opinion that traffic conditions, present or future, will justify such special facilities." Therefore, by virtue of the authority granted above, the Department of Public Works and Highways hereby designates and declares the Balintawak to Tabang Sections of the North Luzon Expressway, and the Nichols to Alabang Sections of the South Luzon Expressways, to be LIMITED ACCESS HIGHWAYS/FACILITIES subject to such rules and regulations that may be imposed by the DPWH thru the Toll Regulatory Board (TRB). In view thereof, the National Capital Region (NCR) of this Department is hereby ordered, after consultation with the TRB and in coordination with the Philippine National Police (PNP), to close all illegal openings along the said Limited Access Highways/Facilities. In this connection, the NCR is instructed to organize its own enforcement and security group for the purpose of assuring the continued closure of the right-of-way fences and the implementation of the rules and regulations that may be imposed by the DPWH thru the TRB. This Order shall take effect immediately.13 On 25 June 1998, then DPWH Secretary Gregorio R. Vigilar issued DO 215: SUBJECT: Declaration of the R-1 Expressway, from Seaside drive to Zapote, C-5 Link Expressway, from Zapote to Noveleta, of the Manila Cavite Toll Expressway as Limited Access Facility. Pursuant to Section 2 of Republic Act No. 2000, a limited access facility is defined as "a highway or street especially designed for through traffic, and over, from, or to which owners or occupants of abutting land or other persons have no right or easement or only a limited right or easement of access, light, air or view by reason of the fact that their property abuts upon such limited access facility or for any other reason. Such highways

or streets may be parkways, from which trucks, buses, and other commercial vehicles shall be excluded; or they may be free ways open to use by all customary forms of street and highway traffic." Section 3 of the same Act authorizes the Department of Public Works and Communications (now Department of Public Works and Highways) "to plan, designate, establish, regulate, vacate, alter, improve, maintain, and provide limited access facilities for public use wherever it is of the opinion that traffic conditions, present or future, will justify such special facilities." Therefore, by virtue of the authority granted above, the Department of Public Works and Highways hereby designates and declares the R-1 Expressway, C-5 Link Expressway and the R-1 Extension Expressway Sections of the Manila Cavite Toll Expressway to be LIMITED ACCESS HIGHWAYS/FACILITIES subject to such rules and regulations that may be imposed by the DPWH thru the Toll Regulatory Board (TRB). In view thereof, the National Capital Region (NCR) of this Department is hereby ordered, after consultation with the TRB and in coordination with the Philippine National Police (PNP), to close all illegal openings along the said Limited Access Highways/Facilities. In this connection, the NCR is instructed to organize its own enforcement and security group for the purpose of assuring the continued closure of the right-of-way fences and the implementation of the rules and regulations that may be imposed by the DPWH thru the TRB. This Order shall take effect immediately.14 The RTC held that Section 4 of RA 2000 expressly authorized the DPWH to design limited access facilities and to regulate, restrict, or prohibit access as to serve the traffic for which such facilities are intended. According to the RTC, such authority to regulate, restrict, or prohibit logically includes the determination of who and what can and cannot be permitted entry or access into the limited access facilities. Thus, the RTC concluded that AO 1, DO 74, and the Revised Rules and Regulations on Limited Access Facilities, which ban motorcycles entry or access to the limited access facilities, are not inconsistent with RA 2000. RA 2000, otherwise known as the Limited Access Highway Act, was approved on 22 June 1957. Section 4 of RA 2000 provides that "[t]he Department of Public Works and Communications is authorized to so design any limited access facility and to so regulate, restrict, or prohibit access as to best serve the traffic for which such facility is intended." The RTC construed this authorization to regulate, restrict, or prohibit access to limited access facilities to apply to the Department of Public Works and Highways (DPWH). The RTCs ruling is based on a wrong premise. The RTC assumed that the DPWH derived its authority from its predecessor, the Department of Public Works and Communications, which is expressly authorized to regulate, restrict, or prohibit access to limited access

facilities under Section 4 of RA 2000. However, such assumption fails to consider the evolution of the Department of Public Works and Communications. Under Act No. 2711, otherwise known as the Revised Administrative Code, approved on 10 March 1917, there were only seven executive departments, namely: the Department of the Interior, the Department of Finance, the Department of Justice, the Department of Agriculture and Commerce, the Department of Public Works and Communications, the Department of Public Instruction, and the Department of Labor.15 On 20 June 1964, Republic Act No. 413616 created the Land Transportation Commission under the Department of Public Works and Communications. Later, the Department of Public Works and Communications was restructured into theDepartment of Public Works, Transportation and Communications. On 16 May 1974, Presidential Decree No. 458 (PD 458) separated the Bureau of Public Highways from the Department of Public Works, Transportation and Communications and created it as a department to be known as Department of Public Highways. Under Section 3 of PD 458, the Department of Public Highways is "responsible for developing and implementing programs on the construction and maintenance of roads, bridges and airport runways." With the amendment of the 1973 Philippine Constitution in 1976, resulting in the shift in the form of government, national agencies were renamed from Departments to Ministries. Thus, the Department of Public Works, Transportation and Communications became the Ministry of Public Works, Transportation and Communications. On 23 July 1979, then President Ferdinand E. Marcos issued Executive Order No. 546 (EO 546), creating aMinistry of Public Works and a Ministry of Transportation and Communications.17 Under Section 1 of EO 546, the Ministry of Public Works assumed the public works functions of the Ministry of Public Works, Transportation and Communications. The functions of the Ministry of Public Works were the "construction, maintenance and repair of port works, harbor facilities, lighthouses, navigational aids, shore protection works, airport buildings and associated facilities, public buildings and school buildings, monuments and other related structures, as well as undertaking harbor and river dredging works, reclamation of foreshore and swampland areas, water supply, and flood control and drainage works."18 On the other hand, the Ministry of Transportation and Communications became the "primary policy, planning, programming, coordinating, implementing, regulating and administrative entity of the executive branch of the government in the promotion, development, and regulation of a dependable and coordinated network of transportation and communication systems."19 The functions of the Ministry of Transportation and Communications were: a. Coordinate and supervise all activities of the Ministry relative to transportation and communications;

b. Formulate and recommend national policies and guidelines for the preparation and implementation of an integrated and comprehensive transportation and communications system at the national, regional and local levels; c. Establish and administer comprehensive and integrated programs for transportation and communication, and for this purpose, may call on any agency, corporation, or organization, whether government or private, whose development programs include transportation and communications as an integral part to participate and assist in the preparation and implementation of such programs; d. Regulate, whenever necessary, activities relative to transportation and communications and prescribe and collect fees in the exercise of such power; e. Assess, review and provide direction to transportation and communications research and development programs of the government in coordination with other institutions concerned; and f. Perform such other functions as may be necessary to carry into effect the provisions of this Executive Order.20 (Emphasis supplied) On 27 July 1981, then President Marcos issued Executive Order No. 710 (EO 710), which merged the Ministry of Public Works and the Ministry of Public Highways for "greater simplicity and economy in operations."21 The restructured agency became known as the Ministry of Public Works and Highways. Under Section 1 of EO 710 the functions of the Ministry of Public Works and the Ministry of Public Highways22 were transferred to the Ministry of Public Works and Highways. Upon the ratification of the 1987 Constitution in February 1987, the former Ministry of Public Works and Highways became the Department of Public Works and Highways (DPWH) and the former Ministry of Transportation and Communications became the Department of Transportation and Communications (DOTC). DPWH issued DO 74 and DO 215 declaring certain expressways as limited access facilities on 5 April 1993 and 25 June 1998, respectively. Later, the TRB, under the DPWH, issued the Revised Rules and Regulations on Limited Access Facilities. However, on 23 July 1979, long before these department orders and regulations were issued, the Ministry of Public Works, Transportation and Communications was divided into two agencies theMinistry of Public Works and the Ministry of Transportation and Communications by virtue of EO 546. The question is, which of these two agencies is now authorized to regulate, restrict, or prohibit access to limited access facilities? 23

Under Section 1 of EO 546, the Ministry of Public Works (now DPWH) assumed the public works functions of the Ministry of Public Works, Transportation and Communications. On the other hand, among the functions of the Ministry of Transportation and Communications (now Department of Transportation and Communications [DOTC]) were to (1) formulate and recommend national policies and guidelines for the preparation and implementation of an integrated and comprehensive transportation and communications systems at the national, regional, and local levels; and (2) regulate, whenever necessary, activities relative to transportation and communications and prescribe and collect fees in the exercise of such power. Clearly, under EO 546, it is the DOTC, not the DPWH, which has authority to regulate, restrict, or prohibit access to limited access facilities. Even under Executive Order No. 125 (EO 125)24 and Executive Order No. 125-A (EO 125A),25 which further reorganized the DOTC, the authority to administer and enforce all laws, rules and regulations relative to transportation is clearly with the DOTC.26 Thus, DO 74 and DO 215 are void because the DPWH has no authority to declare certain expressways as limited access facilities. Under the law, it is the DOTC which is authorized to administer and enforce all laws, rules and regulations in the field of transportation and to regulate related activities. Since the DPWH has no authority to regulate activities relative to transportation, the TRB27 cannot derive its power from the DPWH to issue regulations governing limited access facilities. The DPWH cannot delegate a power or function which it does not possess in the first place. Since DO 74 and DO 215 are void, it follows that the rules implementing them are likewise void. Whether AO 1 and DO 123 are Unconstitutional DPWH Secretary Simeon A. Datumanong issued DO 123 on 18 July 2001. DO 123 reads in part: SUBJECT: Revised Rules and Regulations Governing Limited Access Highways By virtue of the authority granted the Secretary of Public Works and Highways under Section 3 of R.A. 2000, otherwise known as the Limited Access Highway Act, the following revised rules and regulations governing limited access highways are hereby promulgated for the guidance of all concerned: 1. Administrative Order No. 1 dated February 19, 1968, issued by the Secretary of the then Department of Public Works and Communications, is hereby amended by deleting the word "motorcycles" mentioned in Section 3(h) thereof. Therefore, motorcycles are hereby allowed to operate inside the toll roads and limited access highways, subject to the following:

a. Motorcycles shall have an engine displacement of at least 400 cubic centimeters (cc) provided that: x x x x28 (Emphasis supplied) The RTCs Decision dated 10 March 2003 declared DO 123 unconstitutional on the ground that it violates the equal protection clause by allowing only motorcycles with at least 400 cubic centimeters engine displacement to use the toll ways. The RTC reasoned that the creation of a distinction within the class of motorcycles was not based on real differences. We need not pass upon the constitutionality of the classification of motorcycles under DO 123. As previously discussed, the DPWH has no authority to regulate limited access highways since EO 546 has devolved this function to the DOTC. Thus, DO 123 is void for want of authority of the DPWH to promulgate it. On the other hand, the assailed portion of AO 1 states: Section 3. On limited access highways, it is unlawful for any person or group of persons to: xxxx (h) Drive any bicycle, tricycle, pedicab, motorcycle or any vehicle (not motorized); xxxx Petitioners assail the DPWHs failure to provide "scientific" and "objective" data on the danger of having motorcycles plying our highways. They attack this exercise of police power as baseless and unwarranted. Petitioners belabor the fact that there are studies that provide proof that motorcycles are safe modes of transport. They also claim that AO 1 introduces an unreasonable classification by singling-out motorcycles from other motorized modes of transport. Finally, petitioners argue that AO 1 violates their right to travel. Petitioners arguments do not convince us. We emphasize that the Secretary of the Department of Public Works and Communications issued AO 1 on 19 February 1968. Section 3 of RA 200029 authorized the issuance of the guidelines. In contrast, DPWH issued DO 74, DO 215 and DO 123 after EO 546 devolved to the DOTC the authority to regulate limited access highways.

We now discuss the constitutionality of AO 1. Administrative issuances have the force and effect of law.30 They benefit from the same presumption of validity and constitutionality enjoyed by statutes.31 These two precepts place a heavy burden upon any party assailing governmental regulations. The burden of proving unconstitutionality rests on such party.32 The burden becomes heavier when the police power is at issue. The use of public highways by motor vehicles is subject to regulation as an exercise of the police power of the state.33 The police power is far-reaching in scope and is the "most essential, insistent and illimitable" of all government powers.34 The tendency is to extend rather than to restrict the use of police power. The sole standard in measuring its exercise is reasonableness.35 What is "reasonable" is not subject to exact definition or scientific formulation. No all-embracing test of reasonableness exists,36 for its determination rests upon human judgment applied to the facts and circumstances of each particular case.37 We find that AO 1 does not impose unreasonable restrictions. It merely outlines several precautionary measures, to which toll way users must adhere. These rules were designed to ensure public safety and the uninhibited flow of traffic within limited access facilities. They cover several subjects, from what lanes should be used by a certain vehicle, to maximum vehicle height. The prohibition of certain types of vehicles is but one of these. None of these rules violates reason. The purpose of these rules and the logic behind them are quite evident. A toll way is not an ordinary road. The special purpose for which a toll way is constructed necessitates the imposition of guidelines in the manner of its use and operation. Inevitably, such rules will restrict certain rights. But the mere fact that certain rights are restricted does not invalidate the rules. Consider Section 3(g) of AO 1, which prohibits the conduct of rallies inside toll ways.38 The regulation affects the right to peaceably assemble. The exercise of police power involves restriction, restriction being implicit in the power itself. Thus, the test of constitutionality of a police power measure is limited to an inquiry on whether the restriction imposed on constitutional rights is reasonable, and not whether it imposes a restriction on those rights. None of the rules outlined in AO 1 strikes us as arbitrary and capricious. The DPWH, through the Solicitor General, maintains that the toll ways were not designed to accommodate motorcycles and that their presence in the toll ways will compromise safety and traffic considerations. The DPWH points out that the same study the petitioners rely on cites that the inability of other drivers to detect motorcycles is the predominant cause of accidents.39 Arguably, prohibiting the use of motorcycles in toll ways may not be the "best" measure to ensure the safety and comfort of those who ply the toll ways. However, the means by which the government chooses to act is not judged in terms of what is "best," rather, on simply whether the act is reasonable. The validity of a police power measure does not depend upon the absolute assurance that the purpose desired can in fact be probably fully accomplished, or upon the certainty that it will best serve

the purpose intended.40 Reason, not scientific exactitude, is the measure of the validity of the governmental regulation. Arguments based on what is "best" are arguments reserved for the Legislatures discussion. Judicial intervention in such matters will only be warranted if the assailed regulation is patently whimsical. We do not find the situation in this case to be so. Neither do we find AO 1 oppressive. Petitioners are not being deprived of their right to use the limited access facility. They are merely being required, just like the rest of the public, to adhere to the rules on how to use the facility. AO 1 does not infringe upon petitioners right to travel but merely bars motorcycles, bicycles, tricycles, pedicabs, and any nonmotorized vehicles as the mode of traveling along limited access highways.41 Several cheap, accessible and practical alternative modes of transport are open to petitioners. There is nothing oppressive in being required to take a bus or drive a car instead of ones scooter, bicycle, calesa, or motorcycle upon using a toll way. Petitioners reliance on the studies they gathered is misplaced. Police power does not rely upon the existence of definitive studies to support its use. Indeed, no requirement exists that the exercise of police power must first be conclusively justified by research. The yardstick has always been simply whether the governments act is reasonable and not oppressive.42 The use of "reason" in this sense is simply meant to guard against arbitrary and capricious government action. Scientific certainty and conclusiveness, though desirable, may not be demanded in every situation. Otherwise, no government will be able to act in situations demanding the exercise of its residual powers because it will be tied up conducting studies. A police power measure may be assailed upon proof that it unduly violates constitutional limitations like due process and equal protection of the law.43 Petitioners attempt to seek redress from the motorcycle ban under the aegis of equal protection must fail. Petitioners contention that AO 1 unreasonably singles out motorcycles is specious. To begin with, classification by itself is not prohibited.44 A classification can only be assailed if it is deemed invidious, that is, it is not based on real or substantial differences. As explained by Chief Justice Fernando in Bautista v. Juinio:45 x x x To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty and property. Those adversely affected may under such circumstances invoked the equal protection clause only if they can show that the governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason. It suffices then that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the

privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances, which if not identical is analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding the rest. We find that it is neither warranted nor reasonable for petitioners to say that the only justifiable classification among modes of transport is the motorized against the nonmotorized. Not all motorized vehicles are created equal. A 16-wheeler truck is substantially different from other light vehicles. The first may be denied access to some roads where the latter are free to drive. Old vehicles may be reasonably differentiated from newer models.46We find that real and substantial differences exist between a motorcycle and other forms of transport sufficient to justify its classification among those prohibited from plying the toll ways. Amongst all types of motorized transport, it is obvious, even to a child, that a motorcycle is quite different from a car, a bus or a truck. The most obvious and troubling difference would be that a two-wheeled vehicle is less stable and more easily overturned than a four-wheeled vehicle. A classification based on practical convenience and common knowledge is not unconstitutional simply because it may lack purely theoretical or scientific uniformity. Moreover, we take note that the Philippines is home to a host of unique motorized modes of transport ranging from modified hand-carts (kuliglig) to bicycle "sidecars" outfitted with a motor. To follow petitioners argument to its logical conclusion would open up toll ways to all these contraptions. Both safety and traffic considerations militate against any ruling that would bring about such a nightmare. Petitioners complain that the prohibition on the use of motorcycles in toll ways unduly deprive them of their right to travel. We are not persuaded. A toll way is not an ordinary road. As a facility designed to promote the fastest access to certain destinations, its use, operation, and maintenance require close regulation. Public interest and safety require the imposition of certain restrictions on toll ways that do not apply to ordinary roads. As a special kind of road, it is but reasonable that not all forms of transport could use it. The right to travel does not mean the right to choose any vehicle in traversing a toll way. The right to travel refers to the right to move from one place to another. Petitioners can traverse the toll way any time they choose using private or public four-wheeled vehicles. Petitioners are not denied the right to move from Point A to Point B along the toll way. Petitioners are free to access the toll way, much as the rest of the public can. The mode by which petitioners wish to travel pertains to the manner of using the toll way, a subject that can be validly limited by regulation.

Petitioners themselves admit that alternative routes are available to them. Their complaint is that these routes are not the safest and most convenient. Even if their claim is true, it hardly qualifies as an undue curtailment of their freedom of movement and travel. The right to travel does not entitle a person to the best form of transport or to the most convenient route to his destination. The obstructions found in normal streets, which petitioners complain of (i.e., potholes, manholes, construction barriers, etc.), are not suffered by them alone. Finally, petitioners assert that their possession of a drivers license from the Land Transportation Office (LTO) and the fact that their vehicles are registered with that office entitle them to use all kinds of roads in the country. Again, petitioners are mistaken. There exists no absolute right to drive. On the contrary, this privilege, is heavily regulated. Only a qualified group is allowed to drive motor vehicles: those who pass the tests administered by the LTO. A drivers license issued by the LTO merely allows one to drive a particular mode of transport. It is not a license to drive or operate any form of transportation on any type of road. Vehicle registration in the LTO on the other hand merely signifies the roadworthiness of a vehicle. This does not preclude the government from prescribing which roads are accessible to certain vehicles. WHEREFORE, we PARTLY GRANT the petition. We MODIFY the Decision dated 10 March 2003 of the Regional Trial Court, Branch 147, Makati City and its Order dated 16 June 2003 in Civil Case No. 01-034. We declare VOIDDepartment Order Nos. 74, 215, and 123 of the Department of Public Works and Highways, and the Revised Rules and Regulations on Limited Access Facilities of the Toll Regulatory Board. We declare VALID Administrative Order No. 1 of the Department of Public Works and Communications. FACTS: Petitioner assailed the constitutionality of an administrative regulation banning the use of motorcycles at the toll way on the ground that it is baseless and unwarranted for failure to provide scientific and objective data on the dangers of motorcycles plying the highways. Respondent avers that the toll ways were not designed to accommodate motorcycles and that their presence in the toll ways will compromise safety and traffic considerations. ISSUE: Whether or not administrative regulation banning the use of motorcycles is unconstitutional. HELD: No, the use of public highways by motor vehicles is subject to regulation as an exercise of the police power of the state. The sole standard in measuring its exercise is reasonableness, not exact definition and scientific formulation. It is evident that assailed regulation does not impose unreasonable restrictions, but outlines precautionary measures designed to ensure public safety.

EN BANC G.R. No. 188920 February 16, 2010

respondent Drilon as president by direct action. Atienza also said that the amendments3 to the original LP Constitution, or the Salonga Constitution, giving LP officers a fixed three-year term, had not been properly ratified. Consequently, the term of Drilon and the other officers already ended on July 24, 2006. On October 13, 2006, the COMELEC issued a resolution,4 partially granting respondent Drilons petition. It annulled the March 2, 2006 elections and ordered the holding of a new election under COMELEC supervision. It held that the election of petitioner Atienza and the others with him was invalid since the electing assembly did not convene in accordance with the Salonga Constitution. But, since the amendments to the Salonga Constitution had not been properly ratified, Drilons term may be deemed to have ended. Thus, he held the position of LP president in a holdover capacity until new officers were elected. Both sides of the dispute came to this Court to challenge the COMELEC rulings. On April 17, 2007 a divided Court issued a resolution,5 granting respondent Drilons petition and denying that of petitioner Atienza. The Court held, through the majority, that the COMELEC had jurisdiction over the intra-party leadership dispute; that the Salonga Constitution had been validly amended; and that, as a consequence, respondent Drilons term as LP president was to end only on November 30, 2007. Subsequently, the LP held a NECO meeting to elect new party leaders before respondent Drilons term expired. Fifty-nine NECO members out of the 87 who were supposedly qualified to vote attended. Before the election, however, several persons associated with petitioner Atienza sought to clarify their membership status and raised issues regarding the composition of the NECO. Eventually, that meeting installed respondent Manuel A. Roxas II (Roxas) as the new LP president. On January 11, 2008 petitioners Atienza, Matias V. Defensor, Jr., Rodolfo G. Valencia, Danilo E. Suarez, Solomon R. Chungalao, Salvacion Zaldivar-Perez, Harlin Cast-Abayon, Melvin G. Macusi, and Eleazar P. Quinto, filed a petition for mandatory and prohibitory injunction6 before the COMELEC against respondents Roxas, Drilon and J.R. Nereus O. Acosta, the party secretary general. Atienza, et al. sought to enjoin Roxas from assuming the presidency of the LP, claiming that the NECO assembly which elected him was invalidly convened. They questioned the existence of a quorum and claimed that the NECO composition ought to have been based on a list appearing in the partys 60th Anniversary Souvenir Program. Both Atienza and Drilon adopted that list as common exhibit in the earlier cases and it showed that the NECO had 103 members. Petitioners Atienza, et al. also complained that Atienza, the incumbent party chairman, was not invited to the NECO meeting and that some members, like petitioner Defensor, were given the status of "guests" during the meeting. Atienzas allies allegedly raised these issues but respondent Drilon arbitrarily thumbed them down and "railroaded" the proceedings. He suspended the meeting and moved it to another room, where Roxas was elected without notice to Atienzas allies.

JOSE L. ATIENZA, JR., MATIAS V. DEFENSOR, JR., RODOLFO G. VALENCIA, DANILO E. SUAREZ, SOLOMON R. CHUNGALAO, SALVACION ZALDIVAR-PEREZ, HARLIN CASTABAYON, MELVIN G. MACUSI and ELEAZAR P. QUINTO, Petitioners, vs. COMMISSION ON ELECTIONS, MANUEL A. ROXAS II, FRANKLIN M. DRILON and J.R. NEREUS O. ACOSTA,Respondents. DECISION ABAD, J.: This petition is an offshoot of two earlier cases already resolved by the Court involving a leadership dispute within a political party. In this case, the petitioners question their expulsion from that party and assail the validity of the election of new party leaders conducted by the respondents. Statement of the Facts and the Case For a better understanding of the controversy, a brief recall of the preceding events is in order. On July 5, 2005 respondent Franklin M. Drilon (Drilon), as erstwhile president of the Liberal Party (LP), announced his partys withdrawal of support for the administration of President Gloria Macapagal-Arroyo. But petitioner Jose L. Atienza, Jr. (Atienza), LP Chairman, and a number of party members denounced Drilons move, claiming that he made the announcement without consulting his party. On March 2, 2006 petitioner Atienza hosted a party conference to supposedly discuss local autonomy and party matters but, when convened, the assembly proceeded to declare all positions in the LPs ruling body vacant and elected new officers, with Atienza as LP president. Respondent Drilon immediately filed a petition 1 with the Commission on Elections (COMELEC) to nullify the elections. He claimed that it was illegal considering that the partys electing bodies, the National Executive Council (NECO) and the National Political Council (NAPOLCO), were not properly convened. Drilon also claimed that under the amended LP Constitution,2 party officers were elected to a fixed three-year term that was yet to end on November 30, 2007. On the other hand, petitioner Atienza claimed that the majority of the LPs NECO and NAPOLCO attended the March 2, 2006 assembly. The election of new officers on that occasion could be likened to "people power," wherein the LP majority removed

On the other hand, respondents Roxas, et al. claimed that Roxas election as LP president faithfully complied with the provisions of the amended LP Constitution. The partys 60th Anniversary Souvenir Program could not be used for determining the NECO members because supervening events changed the bodys number and composition. Some NECO members had died, voluntarily resigned, or had gone on leave after accepting positions in the government. Others had lost their re-election bid or did not run in the May 2007 elections, making them ineligible to serve as NECO members. LP members who got elected to public office also became part of the NECO. Certain persons of national stature also became NECO members upon respondent Drilons nomination, a privilege granted the LP president under the amended LP Constitution. In other words, the NECO membership was not fixed or static; it changed due to supervening circumstances. Respondents Roxas, et al. also claimed that the party deemed petitioners Atienza, Zaldivar-Perez, and Cast-Abayon resigned for holding the illegal election of LP officers on March 2, 2006. This was pursuant to a March 14, 2006 NAPOLCO resolution that NECO subsequently ratified. Meanwhile, certain NECO members, like petitioners Defensor, Valencia, and Suarez, forfeited their party membership when they ran under other political parties during the May 2007 elections. They were dropped from the roster of LP members. On June 18, 2009 the COMELEC issued the assailed resolution denying petitioners Atienza, et al.s petition. It noted that the May 2007 elections necessarily changed the composition of the NECO since the amended LP Constitution explicitly made incumbent senators, members of the House of Representatives, governors and mayors members of that body. That some lost or won these positions in the May 2007 elections affected the NECO membership. Petitioners failed to prove that the NECO which elected Roxas as LP president was not properly convened. As for the validity of petitioners Atienza, et al.s expulsion as LP members, the COMELEC observed that this was a membership issue that related to disciplinary action within the political party. The COMELEC treated it as an internal party matter that was beyond its jurisdiction to resolve. Without filing a motion for reconsideration of the COMELEC resolution, petitioners Atienza, et al. filed this petition for certiorari under Rule 65. The Issues Presented Respondents Roxas, et al. raise the following threshold issues: 1. Whether or not the LP, which was not impleaded in the case, is an indispensable party; and 2. Whether or not petitioners Atienza, et al., as ousted LP members, have the requisite legal standing to question Roxas election.

Petitioners Atienza, et al., on the other hand, raise the following issues: 3. Whether or not the COMELEC gravely abused its discretion when it upheld the NECO membership that elected respondent Roxas as LP president; 4. Whether or not the COMELEC gravely abused its discretion when it resolved the issue concerning the validity of the NECO meeting without first resolving the issue concerning the expulsion of Atienza, et al. from the party; and 5. Whether or not respondents Roxas, et al. violated petitioners Atienza, et al.s constitutional right to due process by the latters expulsion from the party. The Courts Ruling One. Respondents Roxas, et al. assert that the Court should dismiss the petition for failure of petitioners Atienza, et al. to implead the LP as an indispensable party. Roxas, et al. point out that, since the petition seeks the issuance of a writ of mandatory injunction against the NECO, the controversy could not be adjudicated with finality without making the LP a party to the case.7 But petitioners Atienza, et al.s causes of action in this case consist in respondents Roxas, et al.s disenfranchisement of Atienza, et al. from the election of party leaders and in the illegal election of Roxas as party president. Atienza, et al. were supposedly excluded from the elections by a series of "despotic acts" of Roxas, et al., who controlled the proceedings. Among these acts are Atienza, et al.s expulsion from the party, their exclusion from the NECO, and respondent Drilons "railroading" of election proceedings. Atienza, et al. attributed all these illegal and prejudicial acts to Roxas, et al. Since no wrong had been imputed to the LP nor had some affirmative relief been sought from it, the LP is not an indispensable party. Petitioners Atienza, et al.s prayer for the undoing of respondents Roxas, et al.s acts and the reconvening of the NECO are directed against Roxas, et al. Two. Respondents Roxas, et al. also claim that petitioners Atienza, et al. have no legal standing to question the election of Roxas as LP president because they are no longer LP members, having been validly expelled from the party or having joined other political parties.8 As non-members, they have no stake in the outcome of the action. But, as the Court held in David v. Macapagal-Arroyo,9 legal standing in suits is governed by the "real parties-in-interest" rule under Section 2, Rule 3 of the Rules of Court. This states that "every action must be prosecuted or defended in the name of the real partyin-interest." And "real party-in-interest" is one who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit. In other words, the plaintiffs standing is based on his own right to the relief sought. In raising petitioners

Atienza, et al.s lack of standing as a threshold issue, respondents Roxas, et al. would have the Court hypothetically assume the truth of the allegations in the petition. Here, it is precisely petitioners Atienza, et al.s allegations that respondents Roxas, et al. deprived them of their rights as LP members by summarily excluding them from the LP roster and not allowing them to take part in the election of its officers and that not all who sat in the NECO were in the correct list of NECO members. If Atienza, et al.s allegations were correct, they would have been irregularly expelled from the party and the election of officers, void. Further, they would be entitled to recognition as members of good standing and to the holding of a new election of officers using the correct list of NECO members. To this extent, therefore, Atienza, et al. who want to take part in another election would stand to be benefited or prejudiced by the Courts decision in this case. Consequently, they have legal standing to pursue this petition. Three. In assailing respondent Roxas election as LP president, petitioners Atienza, et al. claim that the NECO members allowed to take part in that election should have been limited to those in the list of NECO members appearing in the partys 60th Anniversary Souvenir Program. Atienza, et al. allege that respondent Drilon, as holdover LP president, adopted that list in the earlier cases before the COMELEC and it should thus bind respondents Roxas, et al. The Courts decision in the earlier cases, said Atienza, et al., anointed that list for the next party election. Thus, Roxas, et al. in effect defied the Courts ruling when they removed Atienza as party chairman and changed the NECOs composition.10 But the list of NECO members appearing in the partys 60th Anniversary Souvenir Program was drawn before the May 2007 elections. After the 2007 elections, changes in the NECO membership had to be redrawn to comply with what the amended LP Constitution required. Respondent Drilon adopted the souvenir program as common exhibit in the earlier cases only to prove that the NECO, which supposedly elected Atienza as new LP president on March 2, 2006, had been improperly convened. It cannot be regarded as an immutable list, given the nature and character of the NECO membership. Nothing in the Courts resolution in the earlier cases implies that the NECO membership should be pegged to the partys 60th Anniversary Souvenir Program. There would have been no basis for such a position. The amended LP Constitution did not intend the NECO membership to be permanent. Its Section 2711 provides that the NECO shall include all incumbent senators, members of the House of Representatives, governors, and mayors who were LP members in good standing for at least six months. It follows from this that with the national and local elections taking place in May 2007, the number and composition of the NECO would have to yield to changes brought about by the elections. Former NECO members who lost the offices that entitled them to membership had to be dropped. Newly elected ones who gained the privilege because of their offices had to come in. Furthermore, former NECO members who passed away, resigned from the party, or went on leave could not be expected to remain part of the NECO that convened

and held elections on November 26, 2007. In addition, Section 27 of the amended LP Constitution expressly authorized the party president to nominate "persons of national stature" to the NECO. Thus, petitioners Atienza, et al. cannot validly object to the admission of 12 NECO members nominated by respondent Drilon when he was LP president. Even if this move could be regarded as respondents Roxas, et al.s way of ensuring their election as party officers, there was certainly nothing irregular about the act under the amended LP Constitution. The NECO was validly convened in accordance with the amended LP Constitution. Respondents Roxas, et al. explained in details how they arrived at the NECO composition for the purpose of electing the party leaders.12 The explanation is logical and consistent with party rules. Consequently, the COMELEC did not gravely abuse its discretion when it upheld the composition of the NECO that elected Roxas as LP president. Petitioner Atienza claims that the Courts resolution in the earlier cases recognized his right as party chairman with a term, like respondent Drilon, that would last up to November 30, 2007 and that, therefore, his ouster from that position violated the Courts resolution. But the Courts resolution in the earlier cases did not preclude the party from disciplining Atienza under Sections 2913 and 4614 of the amended LP Constitution. The party could very well remove him or any officer for cause as it saw fit. Four. Petitioners Atienza, et al. lament that the COMELEC selectively exercised its jurisdiction when it ruled on the composition of the NECO but refused to delve into the legality of their expulsion from the party. The two issues, they said, weigh heavily on the leadership controversy involved in the case. The previous rulings of the Court, they claim, categorically upheld the jurisdiction of the COMELEC over intra-party leadership disputes.15 But, as respondents Roxas, et al. point out, the key issue in this case is not the validity of the expulsion of petitioners Atienza, et al. from the party, but the legitimacy of the NECO assembly that elected respondent Roxas as LP president. Given the COMELECs finding as upheld by this Court that the membership of the NECO in question complied with the LP Constitution, the resolution of the issue of whether or not the party validly expelled petitioners cannot affect the election of officers that the NECO held.1avvphi1 While petitioners Atienza, et al. claim that the majority of LP members belong to their faction, they did not specify who these members were and how their numbers could possibly affect the composition of the NECO and the outcome of its election of party leaders. Atienza, et al. has not bothered to assail the individual qualifications of the NECO members who voted for Roxas. Nor did Atienza, et al. present proof that the NECO had no quorum when it then assembled. In other words, the claims of Atienza, et al. were totally unsupported by evidence. Consequently, petitioners Atienza, et al. cannot claim that their expulsion from the party impacts on the party leadership issue or on the election of respondent Roxas as

president so that it was indispensable for the COMELEC to adjudicate such claim. Under the circumstances, the validity or invalidity of Atienza, et al.s expulsion was purely a membership issue that had to be settled within the party. It is an internal party matter over which the COMELEC has no jurisdiction. What is more, some of petitioner Atienzas allies raised objections before the NECO assembly regarding the status of members from their faction. Still, the NECO proceeded with the election, implying that its membership, whose composition has been upheld, voted out those objections. The COMELECs jurisdiction over intra-party disputes is limited. It does not have blanket authority to resolve any and all controversies involving political parties. Political parties are generally free to conduct their activities without interference from the state. The COMELEC may intervene in disputes internal to a party only when necessary to the discharge of its constitutional functions. The COMELECs jurisdiction over intra-party leadership disputes has already been settled by the Court. The Court ruled in Kalaw v. Commission on Elections16 that the COMELECs powers and functions under Section 2, Article IX-C of the Constitution, "include the ascertainment of the identity of the political party and its legitimate officers responsible for its acts." The Court also declared in another case 17 that the COMELECs power to register political parties necessarily involved the determination of the persons who must act on its behalf. Thus, the COMELEC may resolve an intra-party leadership dispute, in a proper case brought before it, as an incident of its power to register political parties. The validity of respondent Roxas election as LP president is a leadership issue that the COMELEC had to settle. Under the amended LP Constitution, the LP president is the issuing authority for certificates of nomination of party candidates for all national elective positions. It is also the LP president who can authorize other LP officers to issue certificates of nomination for candidates to local elective posts.18 In simple terms, it is the LP president who certifies the official standard bearer of the party. The law also grants a registered political party certain rights and privileges that will redound to the benefit of its official candidates. It imposes, too, legal obligations upon registered political parties that have to be carried out through their leaders. The resolution of the leadership issue is thus particularly significant in ensuring the peaceful and orderly conduct of the elections.19 Five. Petitioners Atienza, et al. argue that their expulsion from the party is not a simple issue of party membership or discipline; it involves a violation of their constitutionallyprotected right to due process of law. They claim that the NAPOLCO and the NECO should have first summoned them to a hearing before summarily expelling them from the party. According to Atienza, et al., proceedings on party discipline are the equivalent

of administrative proceedings20 and are, therefore, covered by the due process requirements laid down in Ang Tibay v. Court of Industrial Relations.21 But the requirements of administrative due process do not apply to the internal affairs of political parties. The due process standards set in Ang Tibay cover only administrative bodies created by the state and through which certain governmental acts or functions are performed. An administrative agency or instrumentality "contemplates an authority to which the state delegates governmental power for the performance of a state function."22 The constitutional limitations that generally apply to the exercise of the states powers thus, apply too, to administrative bodies. The constitutional limitations on the exercise of the states powers are found in Article III of the Constitution or the Bill of Rights. The Bill of Rights, which guarantees against the taking of life, property, or liberty without due process under Section 1 is generally a limitation on the states powers in relation to the rights of its citizens. The right to due process is meant to protect ordinary citizens against arbitrary government action, but not from acts committed by private individuals or entities. In the latter case, the specific statutes that provide reliefs from such private acts apply. The right to due process guards against unwarranted encroachment by the state into the fundamental rights of its citizens and cannot be invoked in private controversies involving private parties.23 Although political parties play an important role in our democratic set-up as an intermediary between the state and its citizens, it is still a private organization, not a state instrument. The discipline of members by a political party does not involve the right to life, liberty or property within the meaning of the due process clause. An individual has no vested right, as against the state, to be accepted or to prevent his removal by a political party. The only rights, if any, that party members may have, in relation to other party members, correspond to those that may have been freely agreed upon among themselves through their charter, which is a contract among the party members. Members whose rights under their charter may have been violated have recourse to courts of law for the enforcement of those rights, but not as a due process issue against the government or any of its agencies. But even when recourse to courts of law may be made, courts will ordinarily not interfere in membership and disciplinary matters within a political party. A political party is free to conduct its internal affairs, pursuant to its constitutionally-protected right to free association. In Sinaca v. Mula,24 the Court said that judicial restraint in internal party matters serves the public interest by allowing the political processes to operate without undue interference. It is also consistent with the state policy of allowing a free and open party system to evolve, according to the free choice of the people.25 To conclude, the COMELEC did not gravely abuse its discretion when it upheld Roxas election as LP president but refused to rule on the validity of Atienza, et al.s expulsion from the party. While the question of party leadership has implications on the COMELECs performance of its functions under Section 2, Article IX-C of the Constitution, the same cannot be said of the issue pertaining to Atienza, et al.s expulsion from the LP.

Such expulsion is for the moment an issue of party membership and discipline, in which the COMELEC cannot intervene, given the limited scope of its power over political parties. WHEREFORE, the Court DISMISSES the petition and UPHOLDS the Resolution of the Commission on Elections dated June 18, 2009 in COMELEC Case SPP 08-001. SO ORDERED. ATIENZA vs. COMELEC G.R. No. 108533, Dec. 20 1994 Facts: Private respondent Antonio G. Sia was elected mayor of the Municipality of Madrilejos, Cebu in the 1998 local elections. Following Sias proclamation, petitioner filed an election protest with the Regional Trial Court questioning the results of the elections in a number of precincts in the municipality. Consequently, in the revision ordered by the lower court, petitioner obtained a plurality of 12 votes over the private respondent. The Regional Trial Court rendered its decision declaring petitioner the winner of the municipal elections and ordering the private respondent to reimburse petitioner the amount of P300,856.19 representing petitioners expenses in the election protest. Private respondent appealed. Meanwhile, the Regional trial Court granted petitioners motion for execution pending appeal, which was opposed by respondent. The Comelec issued a preliminary injunction stopping the enforcement of the order of execution. The Comelec, en banc, on April 7, 1992 issued an Order setting aside the preliminary injunction and thereby allowing petitioner to assume as mayor of the Municipality of Madrilejos pending resolution of his appeal. However, following the synchronized elections of May 11, 1992, the Presiding Commissioner of the Comelecs Second Division issued an Order dated July 18, 1992 dismissing petitioners appeal for being moot and academic. Issue: Whether or not the Comelec acted with grave abuse of discretion in reversing the lower courts judgment.

Held: The dismissal of an appeal in an election protest case for having become moot and academic due to the election of new municipal officials referred only to that part of the appealed judgment which was affected by the election and not to that portion relating to the award of damages. However, it would appear virtually impossible for a party in an election protest case to recover actual or compensatory damages in the absence of a law expressly providing for situations allowing for the recovery of the same. This, petitioner has been unable to do. The intent of the legislature to do away with provisions indemnifying the victorious party for expenses incurred in an election contest in the absence of a wrongful act or omission clearly attributable to the losing party cannot be gainsaid in fine, Section 259 of the Omnibus Election Code merely provides for the granting of actual and compensatory damages in accordance with law. The intent, moreover, to do away with such provisions merely recognizes the maxim, settled in law that a wrong without damage or damage without wrong neither constitutes a cause of action nor creates a civil obligation.

THIRD DIVISION G.R. No. 168081 October 17, 2008

company physician should he wish to do so. He was advised that his case will be evaluated on July 3, 1989.2 On February 25, 1989, petitioner underwent weight check. It was discovered that he gained, instead of losing, weight. He was overweight at 215 pounds, which is 49 pounds beyond the limit. Consequently, his off-duty status was retained. On October 17, 1989, PAL Line Administrator Gloria Dizon personally visited petitioner at his residence to check on the progress of his effort to lose weight. Petitioner weighed 217 pounds, gaining 2 pounds from his previous weight. After the visit, petitioner made a commitment3 to reduce weight in a letter addressed to Cabin Crew Group Manager Augusto Barrios. The letter, in full, reads: Dear Sir: I would like to guaranty my commitment towards a weight loss from 217 pounds to 200 pounds from today until 31 Dec. 1989. From thereon, I promise to continue reducing at a reasonable percentage until such time that my ideal weight is achieved. Likewise, I promise to personally report to your office at the designated time schedule you will set for my weight check. Respectfully Yours, F/S Armando Yrasuegui4 Despite the lapse of a ninety-day period given him to reach his ideal weight, petitioner remained overweight. On January 3, 1990, he was informed of the PAL decision for him to remain grounded until such time that he satisfactorily complies with the weight standards. Again, he was directed to report every two weeks for weight checks. Petitioner failed to report for weight checks. Despite that, he was given one more month to comply with the weight requirement. As usual, he was asked to report for weight check on different dates. He was reminded that his grounding would continue pending satisfactory compliance with the weight standards.5 Again, petitioner failed to report for weight checks, although he was seen submitting his passport for processing at the PAL Staff Service Division. On April 17, 1990, petitioner was formally warned that a repeated refusal to report for weight check would be dealt with accordingly. He was given another set of weight check dates.6 Again, petitioner ignored the directive and did not report for weight checks. On June 26, 1990, petitioner was required to explain his refusal to undergo weight checks.7

ARMANDO G. YRASUEGUI, petitioners, vs. PHILIPPINE AIRLINES, INC., respondents. REYES, R.T., J.: THIS case portrays the peculiar story of an international flight steward who was dismissed because of his failure to adhere to the weight standards of the airline company. He is now before this Court via a petition for review on certiorari claiming that he was illegally dismissed. To buttress his stance, he argues that (1) his dismissal does not fall under 282(e) of the Labor Code; (2) continuing adherence to the weight standards of the company is not a bona fide occupational qualification; and (3) he was discriminated against because other overweight employees were promoted instead of being disciplined. After a meticulous consideration of all arguments pro and con, We uphold the legality of dismissal. Separation pay, however, should be awarded in favor of the employee as an act of social justice or based on equity. This is so because his dismissal is not for serious misconduct. Neither is it reflective of his moral character. The Facts Petitioner Armando G. Yrasuegui was a former international flight steward of Philippine Airlines, Inc. (PAL). He stands five feet and eight inches (58") with a large body frame. The proper weight for a man of his height and body structure is from 147 to 166 pounds, the ideal weight being 166 pounds, as mandated by the Cabin and Crew Administration Manual1 of PAL. The weight problem of petitioner dates back to 1984. Back then, PAL advised him to go on an extended vacation leave from December 29, 1984 to March 4, 1985 to address his weight concerns. Apparently, petitioner failed to meet the companys weight standards, prompting another leave without pay from March 5, 1985 to November 1985. After meeting the required weight, petitioner was allowed to return to work. But petitioners weight problem recurred. He again went on leave without pay from October 17, 1988 to February 1989. On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over his ideal weight. In line with company policy, he was removed from flight duty effective May 6, 1989 to July 3, 1989. He was formally requested to trim down to his ideal weight and report for weight checks on several dates. He was also told that he may avail of the services of the

When petitioner tipped the scale on July 30, 1990, he weighed at 212 pounds. Clearly, he was still way over his ideal weight of 166 pounds. From then on, nothing was heard from petitioner until he followed up his case requesting for leniency on the latter part of 1992. He weighed at 219 pounds on August 20, 1992 and 205 pounds on November 5, 1992. On November 13, 1992, PAL finally served petitioner a Notice of Administrative Charge for violation of company standards on weight requirements. He was given ten (10) days from receipt of the charge within which to file his answer and submit controverting evidence.8 On December 7, 1992, petitioner submitted his Answer.9 Notably, he did not deny being overweight. What he claimed, instead, is that his violation, if any, had already been condoned by PAL since "no action has been taken by the company" regarding his case "since 1988." He also claimed that PAL discriminated against him because "the company has not been fair in treating the cabin crew members who are similarly situated." On December 8, 1992, a clarificatory hearing was held where petitioner manifested that he was undergoing a weight reduction program to lose at least two (2) pounds per week so as to attain his ideal weight.10 On June 15, 1993, petitioner was formally informed by PAL that due to his inability to attain his ideal weight, "and considering the utmost leniency" extended to him "which spanned a period covering a total of almost five (5) years," his services were considered terminated "effective immediately."11 His motion for reconsideration having been denied,12 petitioner filed a complaint for illegal dismissal against PAL. Labor Arbiter, NLRC and CA Dispositions On November 18, 1998, Labor Arbiter Valentin C. Reyes ruled 13 that petitioner was illegally dismissed. The dispositive part of the Arbiter ruling runs as follows: WHEREFORE, in view of the foregoing, judgment is hereby rendered, declaring the complainants dismissal illegal, and ordering the respondent to reinstate him to his former position or substantially equivalent one, and to pay him: a. Backwages of Php10,500.00 per month from his dismissal on June 15, 1993 until reinstated, which for purposes of appeal is hereby set from June 15, 1993 up to August 15, 1998 at P651,000.00; b. Attorneys fees of five percent (5%) of the total award.

SO ORDERED.14 The Labor Arbiter held that the weight standards of PAL are reasonable in view of the nature of the job of petitioner.15 However, the weight standards need not be complied with under pain of dismissal since his weight did not hamper the performance of his duties.16 Assuming that it did, petitioner could be transferred to other positions where his weight would not be a negative factor.17 Notably, other overweight employees, i.e., Mr. Palacios, Mr. Cui, and Mr. Barrios, were promoted instead of being disciplined.18 Both parties appealed to the National Labor Relations Commission (NLRC).19 On October 8, 1999, the Labor Arbiter issued a writ of execution directing the reinstatement of petitioner without loss of seniority rights and other benefits.20 On February 1, 2000, the Labor Arbiter denied21 the Motion to Quash Writ of Execution22 of PAL. On March 6, 2000, PAL appealed the denial of its motion to quash to the NLRC. 23 On June 23, 2000, the NLRC rendered judgment24 in the following tenor: WHEREFORE, premises considered[,] the Decision of the Arbiter dated 18 November 1998 as modified by our findings herein, is hereby AFFIRMED and that part of the dispositive portion of said decision concerning complainants entitlement to backwages shall be deemed to refer to complainants entitlement to his full backwages, inclusive of allowances and to his other benefits or their monetary equivalent instead of simply backwages, from date of dismissal until his actual reinstatement or finality hereof. Respondent is enjoined to manifests (sic) its choice of the form of the reinstatement of complainant, whether physical or through payroll within ten (10) days from notice failing which, the same shall be deemed as complainants reinstatement through payroll and execution in case of non-payment shall accordingly be issued by the Arbiter. Both appeals of respondent thus, are DISMISSED for utter lack of merit. According to the NLRC, "obesity, or the tendency to gain weight uncontrollably regardless of the amount of food intake, is a disease in itself."26 As a consequence, there can be no intentional defiance or serious misconduct by petitioner to the lawful order of PAL for him to lose weight.27 Like the Labor Arbiter, the NLRC found the weight standards of PAL to be reasonable. However, it found as unnecessary the Labor Arbiter holding that petitioner was not remiss in the performance of his duties as flight steward despite being overweight. According to the NLRC, the Labor Arbiter should have limited himself to the issue of whether the failure of petitioner to attain his ideal weight constituted willful defiance of the weight standards of PAL.28

PAL moved for reconsideration to no avail.29 Thus, PAL elevated the matter to the Court of Appeals (CA) via a petition for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.30 By Decision dated August 31, 2004, the CA reversed31 the NLRC: WHEREFORE, premises considered, we hereby GRANT the petition. The assailed NLRC decision is declared NULL and VOID and is hereby SET ASIDE. The private respondents complaint is hereby DISMISSED. No costs. SO ORDERED.32 The CA opined that there was grave abuse of discretion on the part of the NLRC because it "looked at wrong and irrelevant considerations"33 in evaluating the evidence of the parties. Contrary to the NLRC ruling, the weight standards of PAL are meant to be a continuing qualification for an employees position.34 The failure to adhere to the weight standards is an analogous cause for the dismissal of an employee under Article 282(e) of the Labor Code in relation to Article 282(a). It is not willful disobedience as the NLRC seemed to suggest.35 Said the CA, "the element of willfulness that the NLRC decision cites is an irrelevant consideration in arriving at a conclusion on whether the dismissal is legally proper."36 In other words, "the relevant question to ask is not one of willfulness but one of reasonableness of the standard and whether or not the employee qualifies or continues to qualify under this standard."37 Just like the Labor Arbiter and the NLRC, the CA held that the weight standards of PAL are reasonable.38 Thus, petitioner was legally dismissed because he repeatedly failed to meet the prescribed weight standards.39 It is obvious that the issue of discrimination was only invoked by petitioner for purposes of escaping the result of his dismissal for being overweight.40 On May 10, 2005, the CA denied petitioners motion for reconsideration.41 Elaborating on its earlier ruling, the CA held that the weight standards of PAL are a bona fide occupational qualification which, in case of violation, "justifies an employees separation from the service."42 Issues In this Rule 45 petition for review, the following issues are posed for resolution: I. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONERS OBESITY CAN BE A GROUND FOR DISMISSAL UNDER PARAGRAPH (e) OF ARTICLE 282 OF THE LABOR CODE OF THE PHILIPPINES;

II. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONERS DISMISSAL FOR OBESITY CAN BE PREDICATED ON THE "BONA FIDE OCCUPATIONAL QUALIFICATION (BFOQ) DEFENSE"; III. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER WAS NOT UNDULY DISCRIMINATED AGAINST WHEN HE WAS DISMISSED WHILE OTHER OVERWEIGHT CABIN ATTENDANTS WERE EITHER GIVEN FLYING DUTIES OR PROMOTED; IV. WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN IT BRUSHED ASIDE PETITIONERS CLAIMS FOR REINSTATEMENT [AND] WAGES ALLEGEDLY FOR BEING MOOT AND ACADEMIC.43 (Underscoring supplied) Our Ruling I. The obesity of petitioner is a ground for dismissal under Article 282(e) 44 of the Labor Code. A reading of the weight standards of PAL would lead to no other conclusion than that they constitute a continuing qualification of an employee in order to keep the job. Tersely put, an employee may be dismissed the moment he is unable to comply with his ideal weight as prescribed by the weight standards. The dismissal of the employee would thus fall under Article 282(e) of the Labor Code. As explained by the CA: x x x [T]he standards violated in this case were not mere "orders" of the employer; they were the "prescribed weights" that a cabin crew must maintain in order to qualify for and keep his or her position in the company. In other words, they were standards that establish continuing qualifications for an employees position. In this sense, the failure to maintain these standards does not fall under Article 282(a) whose express terms require the element of willfulness in order to be a ground for dismissal. The failure to meet the employers qualifying standards is in fact a ground that does not squarely fall under grounds (a) to (d) and is therefore one that falls under Article 282(e) the "other causes analogous to the foregoing." By its nature, these "qualifying standards" are norms that apply prior to and after an employee is hired. They apply prior to employment because these are the standards a job applicant must initially meet in order to be hired. They apply after hiring because an employee must continue to meet these standards while on the job in order to keep his

job. Under this perspective, a violation is not one of the faults for which an employee can be dismissed pursuant to pars. (a) to (d) of Article 282; the employee can be dismissed simply because he no longer "qualifies" for his job irrespective of whether or not the failure to qualify was willful or intentional. x x x45 Petitioner, though, advances a very interesting argument. He claims that obesity is a "physical abnormality and/or illness."46 Relying on Nadura v. Benguet Consolidated, Inc.,47 he says his dismissal is illegal: Conscious of the fact that Naduras case cannot be made to fall squarely within the specific causes enumerated in subparagraphs 1(a) to (e), Benguet invokes the provisions of subparagraph 1(f) and says that Naduras illness occasional attacks of asthma is a cause analogous to them. Even a cursory reading of the legal provision under consideration is sufficient to convince anyone that, as the trial court said, "illness cannot be included as an analogous cause by any stretch of imagination." It is clear that, except the just cause mentioned in sub-paragraph 1(a), all the others expressly enumerated in the law are due to the voluntary and/or willful act of the employee. How Naduras illness could be considered as "analogous" to any of them is beyond our understanding, there being no claim or pretense that the same was contracted through his own voluntary act.48 The reliance on Nadura is off-tangent. The factual milieu in Nadura is substantially different from the case at bar.First, Nadura was not decided under the Labor Code. The law applied in that case was Republic Act (RA) No. 1787.Second, the issue of flight safety is absent in Nadura, thus, the rationale there cannot apply here. Third, in Nadura, the employee who was a miner, was laid off from work because of illness, i.e., asthma. Here, petitioner was dismissed for his failure to meet the weight standards of PAL. He was not dismissed due to illness. Fourth, the issue in Nadura is whether or not the dismissed employee is entitled to separation pay and damages. Here, the issue centers on the propriety of the dismissal of petitioner for his failure to meet the weight standards of PAL. Fifth, inNadura, the employee was not accorded due process. Here, petitioner was accorded utmost leniency. He was given more than four (4) years to comply with the weight standards of PAL. In the case at bar, the evidence on record militates against petitioners claims that obesity is a disease. That he was able to reduce his weight from 1984 to 1992 clearly shows that it is possible for him to lose weight given the proper attitude, determination, and self-discipline. Indeed, during the clarificatory hearing on December 8, 1992, petitioner himself claimed that "[t]he issue is could I bring my weight down to ideal weight which is 172, then the answer is yes. I can do it now."49

True, petitioner claims that reducing weight is costing him "a lot of expenses."50 However, petitioner has only himself to blame. He could have easily availed the assistance of the company physician, per the advice of PAL.51 He chose to ignore the suggestion. In fact, he repeatedly failed to report when required to undergo weight checks, without offering a valid explanation. Thus, his fluctuating weight indicates absence of willpower rather than an illness. Petitioner cites Bonnie Cook v. State of Rhode Island, Department of Mental Health, Retardation and Hospitals,52decided by the United States Court of Appeals (First Circuit). In that case, Cook worked from 1978 to 1980 and from 1981 to 1986 as an institutional attendant for the mentally retarded at the Ladd Center that was being operated by respondent. She twice resigned voluntarily with an unblemished record. Even respondent admitted that her performance met the Centers legitimate expectations. In 1988, Cook re-applied for a similar position. At that time, "she stood 52" tall and weighed over 320 pounds." Respondent claimed that the morbid obesity of plaintiff compromised her ability to evacuate patients in case of emergency and it also put her at greater risk of serious diseases. Cook contended that the action of respondent amounted to discrimination on the basis of a handicap. This was in direct violation of Section 504(a) of the Rehabilitation Act of 1973,53 which incorporates the remedies contained in Title VI of the Civil Rights Act of 1964. Respondent claimed, however, that morbid obesity could never constitute a handicap within the purview of the Rehabilitation Act. Among others, obesity is a mutable condition, thus plaintiff could simply lose weight and rid herself of concomitant disability. The appellate Court disagreed and held that morbid obesity is a disability under the Rehabilitation Act and that respondent discriminated against Cook based on "perceived" disability. The evidence included expert testimony that morbid obesity is a physiological disorder. It involves a dysfunction of both the metabolic system and the neurological appetite suppressing signal system, which is capable of causing adverse effects within the musculoskeletal, respiratory, and cardiovascular systems. Notably, the Court stated that "mutability is relevant only in determining the substantiality of the limitation flowing from a given impairment," thus "mutability only precludes those conditions that an individual can easily and quickly reverse by behavioral alteration." Unlike Cook, however, petitioner is not morbidly obese. In the words of the District Court for the District of Rhode Island, Cook was sometime before 1978 "at least one hundred pounds more than what is considered appropriate of her height." According to the Circuit Judge, Cook weighed "over 320 pounds" in 1988. Clearly, that is not the case here. At his heaviest, petitioner was only less than 50 pounds over his ideal weight. In fine, We hold that the obesity of petitioner, when placed in the context of his work as flight attendant, becomes an analogous cause under Article 282(e) of the Labor Code that justifies his dismissal from the service. His obesity may not be unintended, but is nonetheless voluntary. As the CA correctly puts it, "[v]oluntariness basically means that

the just cause is solely attributable to the employee without any external force influencing or controlling his actions. This element runs through all just causes under Article 282, whether they be in the nature of a wrongful action or omission. Gross and habitual neglect, a recognized just cause, is considered voluntary although it lacks the element of intent found in Article 282(a), (c), and (d)."54 II. The dismissal of petitioner can be predicated on the bona fide occupational qualification defense. Employment in particular jobs may not be limited to persons of a particular sex, religion, or national origin unless the employer can show that sex, religion, or national origin is an actual qualification for performing the job. The qualification is called a bona fide occupational qualification (BFOQ).55 In the United States, there are a few federal and many state job discrimination laws that contain an exception allowing an employer to engage in an otherwise unlawful form of prohibited discrimination when the action is based on a BFOQ necessary to the normal operation of a business or enterprise.56 Petitioner contends that BFOQ is a statutory defense. It does not exist if there is no statute providing for it.57Further, there is no existing BFOQ statute that could justify his dismissal.58 Both arguments must fail. First, the Constitution,59 the Labor Code,60 and RA No. 727761 or the Magna Carta for Disabled Persons62 contain provisions similar to BFOQ. Second, in British Columbia Public Service Employee Commission (BSPSERC) v. The British Columbia Government and Service Employees Union (BCGSEU),63 the Supreme Court of Canada adopted the so-called "Meiorin Test" in determining whether an employment policy is justified. Under this test, (1) the employer must show that it adopted the standard for a purpose rationally connected to the performance of the job;64 (2) the employer must establish that the standard is reasonably necessary 65 to the accomplishment of that work-related purpose; and (3) the employer must establish that the standard is reasonably necessary in order to accomplish the legitimate work-related purpose. Similarly, in Star Paper Corporation v. Simbol,66 this Court held that in order to justify a BFOQ, the employer must prove that (1) the employment qualification is reasonably related to the essential operation of the job involved; and (2) that there is factual basis for believing that all or substantially all persons meeting the qualification would be unable to properly perform the duties of the job.67 In short, the test of reasonableness of the company policy is used because it is parallel to BFOQ.68 BFOQ is valid "provided it reflects an inherent quality reasonably necessary for satisfactory job performance."69

In Duncan Association of Detailman-PTGWTO v. Glaxo Wellcome Philippines, Inc.,70 the Court did not hesitate to pass upon the validity of a company policy which prohibits its employees from marrying employees of a rival company. It was held that the company policy is reasonable considering that its purpose is the protection of the interests of the company against possible competitor infiltration on its trade secrets and procedures. Verily, there is no merit to the argument that BFOQ cannot be applied if it has no supporting statute. Too, the Labor Arbiter,71 NLRC,72 and CA73 are one in holding that the weight standards of PAL are reasonable. A common carrier, from the nature of its business and for reasons of public policy, is bound to observe extraordinary diligence for the safety of the passengers it transports.74 It is bound to carry its passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances.75 The law leaves no room for mistake or oversight on the part of a common carrier. Thus, it is only logical to hold that the weight standards of PAL show its effort to comply with the exacting obligations imposed upon it by law by virtue of being a common carrier. The business of PAL is air transportation. As such, it has committed itself to safely transport its passengers. In order to achieve this, it must necessarily rely on its employees, most particularly the cabin flight deck crew who are on board the aircraft. The weight standards of PAL should be viewed as imposing strict norms of discipline upon its employees. In other words, the primary objective of PAL in the imposition of the weight standards for cabin crew is flight safety. It cannot be gainsaid that cabin attendants must maintain agility at all times in order to inspire passenger confidence on their ability to care for the passengers when something goes wrong. It is not farfetched to say that airline companies, just like all common carriers, thrive due to public confidence on their safety records. People, especially the riding public, expect no less than that airline companies transport their passengers to their respective destinations safely and soundly. A lesser performance is unacceptable. The task of a cabin crew or flight attendant is not limited to serving meals or attending to the whims and caprices of the passengers. The most important activity of the cabin crew is to care for the safety of passengers and the evacuation of the aircraft when an emergency occurs. Passenger safety goes to the core of the job of a cabin attendant. Truly, airlines need cabin attendants who have the necessary strength to open emergency doors, the agility to attend to passengers in cramped working conditions, and the stamina to withstand grueling flight schedules. On board an aircraft, the body weight and size of a cabin attendant are important factors to consider in case of emergency. Aircrafts have constricted cabin space, and narrow aisles and exit doors. Thus, the arguments of respondent that "[w]hether the airlines flight attendants are overweight or not has no direct relation to its mission of

transporting passengers to their destination"; and that the weight standards "has nothing to do with airworthiness of respondents airlines," must fail. The rationale in Western Air Lines v. Criswell76 relied upon by petitioner cannot apply to his case. What was involved there were two (2) airline pilots who were denied reassignment as flight engineers upon reaching the age of 60, and a flight engineer who was forced to retire at age 60. They sued the airline company, alleging that the age-60 retirement for flight engineers violated the Age Discrimination in Employment Act of 1967. Age-based BFOQ and being overweight are not the same. The case of overweight cabin attendants is another matter. Given the cramped cabin space and narrow aisles and emergency exit doors of the airplane, any overweight cabin attendant would certainly have difficulty navigating the cramped cabin area. In short, there is no need to individually evaluate their ability to perform their task. That an obese cabin attendant occupies more space than a slim one is an unquestionable fact which courts can judicially recognize without introduction of evidence.77 It would also be absurd to require airline companies to reconfigure the aircraft in order to widen the aisles and exit doors just to accommodate overweight cabin attendants like petitioner. The biggest problem with an overweight cabin attendant is the possibility of impeding passengers from evacuating the aircraft, should the occasion call for it. The job of a cabin attendant during emergencies is to speedily get the passengers out of the aircraft safely. Being overweight necessarily impedes mobility. Indeed, in an emergency situation, seconds are what cabin attendants are dealing with, not minutes. Three lost seconds can translate into three lost lives. Evacuation might slow down just because a wide-bodied cabin attendant is blocking the narrow aisles. These possibilities are not remote. Petitioner is also in estoppel. He does not dispute that the weight standards of PAL were made known to him prior to his employment. He is presumed to know the weight limit that he must maintain at all times.78 In fact, never did he question the authority of PAL when he was repeatedly asked to trim down his weight. Bona fides exigit ut quod convenit fiat. Good faith demands that what is agreed upon shall be done. Kung ang tao ay tapat kanyang tutuparin ang napagkasunduan. Too, the weight standards of PAL provide for separate weight limitations based on height and body frame for both male and female cabin attendants. A progressive discipline is imposed to allow non-compliant cabin attendants sufficient opportunity to meet the weight standards. Thus, the clear-cut rules obviate any possibility for the commission of abuse or arbitrary action on the part of PAL. III. Petitioner failed to substantiate his claim that he was discriminated against by PAL.

Petitioner next claims that PAL is using passenger safety as a convenient excuse to discriminate against him.79 We are constrained, however, to hold otherwise. We agree with the CA that "[t]he element of discrimination came into play in this case as a secondary position for the private respondent in order to escape the consequence of dismissal that being overweight entailed. It is a confession-and-avoidance position that impliedly admitted the cause of dismissal, including the reasonableness of the applicable standard and the private respondents failure to comply."80 It is a basic rule in evidence that each party must prove his affirmative allegation.81 Since the burden of evidence lies with the party who asserts an affirmative allegation, petitioner has to prove his allegation with particularity. There is nothing on the records which could support the finding of discriminatory treatment. Petitioner cannot establish discrimination by simply naming the supposed cabin attendants who are allegedly similarly situated with him. Substantial proof must be shown as to how and why they are similarly situated and the differential treatment petitioner got from PAL despite the similarity of his situation with other employees. Indeed, except for pointing out the names of the supposed overweight cabin attendants, petitioner miserably failed to indicate their respective ideal weights; weights over their ideal weights; the periods they were allowed to fly despite their being overweight; the particular flights assigned to them; the discriminating treatment they got from PAL; and other relevant data that could have adequately established a case of discriminatory treatment by PAL. In the words of the CA, "PAL really had no substantial case of discrimination to meet."82 We are not unmindful that findings of facts of administrative agencies, like the Labor Arbiter and the NLRC, are accorded respect, even finality.83 The reason is simple: administrative agencies are experts in matters within their specific and specialized jurisdiction.84 But the principle is not a hard and fast rule. It only applies if the findings of facts are duly supported by substantial evidence. If it can be shown that administrative bodies grossly misappreciated evidence of such nature so as to compel a conclusion to the contrary, their findings of facts must necessarily be reversed. Factual findings of administrative agencies do not have infallibility and must be set aside when they fail the test of arbitrariness.85 Here, the Labor Arbiter and the NLRC inexplicably misappreciated evidence. We thus annul their findings. To make his claim more believable, petitioner invokes the equal protection clause guaranty86 of the Constitution. However, in the absence of governmental interference, the liberties guaranteed by the Constitution cannot be invoked.87 Put differently, the Bill of Rights is not meant to be invoked against acts of private individuals.88 Indeed, the United States Supreme Court, in interpreting the Fourteenth Amendment,89 which is the source of our equal protection guarantee, is consistent in saying that the equal protection erects no shield against private conduct, however discriminatory or wrongful.90 Private actions, no matter how egregious, cannot violate the equal protection guarantee. 91

IV. The claims of petitioner for reinstatement and wages are moot. As his last contention, petitioner avers that his claims for reinstatement and wages have not been mooted. He is entitled to reinstatement and his full backwages, "from the time he was illegally dismissed" up to the time that the NLRC was reversed by the CA.92 At this point, Article 223 of the Labor Code finds relevance: In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, insofar as the reinstatement aspect is concerned, shall immediately be executory, even pending appeal. The employee shall either be admitted back to work under the same terms and conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for reinstatement provided herein. The law is very clear. Although an award or order of reinstatement is self-executory and does not require a writ of execution,93 the option to exercise actual reinstatement or payroll reinstatement belongs to the employer. It does not belong to the employee, to the labor tribunals, or even to the courts. Contrary to the allegation of petitioner that PAL "did everything under the sun" to frustrate his "immediate return to his previous position,"94 there is evidence that PAL opted to physically reinstate him to a substantially equivalent position in accordance with the order of the Labor Arbiter.95 In fact, petitioner duly received the return to work notice on February 23, 2001, as shown by his signature.96 Petitioner cannot take refuge in the pronouncements of the Court in a case97 that "[t]he unjustified refusal of the employer to reinstate the dismissed employee entitles him to payment of his salaries effective from the time the employer failed to reinstate him despite the issuance of a writ of execution"98 and ""even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the employee during the period of appeal until reversal by the higher court."99 He failed to prove that he complied with the return to work order of PAL. Neither does it appear on record that he actually rendered services for PAL from the moment he was dismissed, in order to insist on the payment of his full backwages. In insisting that he be reinstated to his actual position despite being overweight, petitioner in effect wants to render the issues in the present case moot. He asks PAL to comply with the impossible. Time and again, the Court ruled that the law does not exact compliance with the impossible.100 V. Petitioner is entitled to separation pay. Be that as it may, all is not lost for petitioner.

Normally, a legally dismissed employee is not entitled to separation pay. This may be deduced from the language of Article 279 of the Labor Code that "[a]n employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement." Luckily for petitioner, this is not an ironclad rule. Exceptionally, separation pay is granted to a legally dismissed employee as an act "social justice,"101 or based on "equity."102 In both instances, it is required that the dismissal (1) was not for serious misconduct; and (2) does not reflect on the moral character of the employee.103 Here, We grant petitioner separation pay equivalent to one-half (1/2) months pay for every year of service.104 It should include regular allowances which he might have been receiving.105 We are not blind to the fact that he was not dismissed for any serious misconduct or to any act which would reflect on his moral character. We also recognize that his employment with PAL lasted for more or less a decade. WHEREFORE, the appealed Decision of the Court of Appeals is AFFIRMED but MODIFIED in that petitioner Armando G. Yrasuegui is entitled to separation pay in an amount equivalent to one-half (1/2) months pay for every year of service, which should include his regular allowances. Facts: Petitioner was a former international flight steward of PAL, herein respondent. Petitioner was dismissed because of his failure to adhere to the weight standards of the airline company. Petitioner claims that he was illegally dismissed. Issue: Whether or not petitioner was discriminated against when he was dismissed. Held: Petition denied. To make his claim more believable, petitioner invokes the equal protection clause guaranty of the Constitution. However, in the absence of governmental interference, the liberties guaranteed by the Constitution cannot be invoked. Put differently, the Bill of Rights is not meant to be invoked against acts of private individuals. Indeed, the US Supreme Court, in interpreting the 14th Amendment, which is the source of our equal protection guarantee, is consistent in saying that the equal protection erects no shield against private conduct, however discriminatory or wrongful. Private actions, no matter how egregious, cannot violate the equal protection guarantee.

SECOND DIVISION REPUBLIC OF THE PHILIPPINES, Petitioner, - versus JENNIFER B. CAGANDAHAN, Respondent. G.R. No. 166676 Present: Quisumbing, J., Chairperson, Carpio Morales, Tinga, VELASCO, JR., and BRION, JJ. Promulgated: September 12, 2008 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION QUISUMBING, J.: This is a petition for review under Rule 45 of the Rules of Court raising purely questions of law and seeking a reversal of the Decision[1] dated January 12, 2005 of the Regional Trial Court (RTC), Branch 33 of Siniloan, Laguna, which granted the Petition for Correction of Entries in Birth Certificate filed by Jennifer B. Cagandahan and ordered the following changes of entries in Cagandahans birth certificate: (1) the name "Jennifer Cagandahan" changed to "Jeff Cagandahan" and (2) gender from "female" to "male." The facts are as follows. On December 11, 2003, respondent Jennifer Cagandahan filed a Petition for Correction of Entries in Birth Certificate2 before the RTC, Branch 33 of Siniloan, Laguna. In her petition, she alleged that she was born on January 13, 1981 and was registered as a female in the Certificate of Live Birth but while growing up, she developed secondary male characteristics and was diagnosed to have Congenital Adrenal Hyperplasia (CAH)

which is a condition where persons thus afflicted possess both male and female characteristics. She further alleged that she was diagnosed to have clitoral hyperthropy in her early years and at age six, underwent an ultrasound where it was discovered that she has small ovaries. At age thirteen, tests revealed that her ovarian structures had minimized, she has stopped growing and she has no breast or menstrual development. She then alleged that for all interests and appearances as well as in mind and emotion, she has become a male person. Thus, she prayed that her birth certificate be corrected such that her gender be changed from female to male and her first name be changed from Jennifer to Jeff. The petition was published in a newspaper of general circulation for three (3) consecutive weeks and was posted in conspicuous places by the sheriff of the court. The Solicitor General entered his appearance and authorized the Assistant Provincial Prosecutor to appear in his behalf. To prove her claim, respondent testified and presented the testimony of Dr. Michael Sionzon of the Department of Psychiatry, University of the Philippines-Philippine General Hospital. Dr. Sionzon issued a medical certificate stating that respondents condition is known as CAH. He explained that genetically respondent is female but because her body secretes male hormones, her female organs did not develop normally and she has two sex organs female and male. He testified that this condition is very rare, that respondents uterus is not fully developed because of lack of female hormones, and that she has no monthly period. He further testified that respondents condition is permanent and recommended the change of gender because respondent has made up her mind, adjusted to her chosen role as male, and the gender change would be advantageous to her. The RTC granted respondents petition in a Decision dated January 12, 2005 which reads: The Court is convinced that petitioner has satisfactorily shown that he is entitled to the reliefs prayed [for]. Petitioner has adequately presented to the Court very clear and convincing proofs for the granting of his petition. It was medically proven that petitioners body produces male hormones, and first his body as well as his action and feelings are that of a male. He has chosen to be male. He is a normal person and wants to be acknowledged and identified as a male. WHEREFORE, premises considered, the Civil Register of Pakil, Laguna is hereby ordered to make the following corrections in the birth [c]ertificate of Jennifer Cagandahan upon payment of the prescribed fees: a) By changing the name from Jennifer Cagandahan to JEFF CAGANDAHAN; and

b) By changing the gender from female to MALE. It is likewise ordered that petitioners school records, voters registry, baptismal certificate, and other pertinent records are hereby amended to conform with the foregoing corrected data. SO ORDERED.[3] Thus, this petition by the Office of the Solicitor General (OSG) seeking a reversal of the abovementioned ruling. The issues raised by petitioner are: THE TRIAL COURT ERRED IN GRANTING THE PETITION CONSIDERING THAT: I. THE REQUIREMENTS OF RULES 103 AND 108 OF THE RULES OF COURT HAVE NOT BEEN COMPLIED WITH; AND, II. CORRECTION OF ENTRY UNDER RULE 108 DOES NOT ALLOW CHANGE OF "SEX" OR "GENDER" IN THE BIRTH CERTIFICATE, WHILE RESPONDENTS MEDICAL CONDITION, i.e., CONGENITAL ADRENAL HYPERPLASIA DOES NOT MAKE HER A "MALE."4 Simply stated, the issue is whether the trial court erred in ordering the correction of entries in the birth certificate of respondent to change her sex or gender, from female to male, on the ground of her medical condition known as CAH, and her name from "Jennifer" to "Jeff," under Rules 103 and 108 of the Rules of Court. The OSG contends that the petition below is fatally defective for non-compliance with Rules 103 and 108 of the Rules of Court because while the local civil registrar is an indispensable party in a petition for cancellation or correction of entries under Section 3, Rule 108 of the Rules of Court, respondents petition before the court a quo did not implead the local civil registrar.5 The OSG further contends respondents petition is fatally defective since it failed to state that respondent is a bona fide resident of the province where the petition was filed for at least three (3) years prior to the date of such filing as mandated under Section 2(b), Rule 103 of the Rules of Court.6 The OSG argues that Rule 108 does not allow change of sex or gender in the birth certificate and respondents claimed medical condition known as CAH does not make her a male. 7 On the other hand, respondent counters that although the Local Civil Registrar of Pakil,

Laguna was not formally named a party in the Petition for Correction of Birth Certificate, nonetheless the Local Civil Registrar was furnished a copy of the Petition, the Order to publish on December 16, 2003 and all pleadings, orders or processes in the course of the proceedings,8 respondent is actually a male person and hence his birth certificate has to be corrected to reflect his true sex/gender,9 change of sex or gender is allowed under Rule 108,10 and respondent substantially complied with the requirements of Rules 103 and 108 of the Rules of Court.11 Rules 103 and 108 of the Rules of Court provide: Rule 103 CHANGE OF NAME Section 1. Venue. A person desiring to change his name shall present the petition to the Regional Trial Court of the province in which he resides, [or, in the City of Manila, to the Juvenile and Domestic Relations Court]. Sec. 2. Contents of petition. A petition for change of name shall be signed and verified by the person desiring his name changed, or some other person on his behalf, and shall set forth: (a) That the petitioner has been a bona fide resident of the province where the petition is filed for at least three (3) years prior to the date of such filing; (b) The cause for which the change of the petitioner's name is sought; (c) The name asked for. Sec. 3. Order for hearing. If the petition filed is sufficient in form and substance, the court, by an order reciting the purpose of the petition, shall fix a date and place for the hearing thereof, and shall direct that a copy of the order be published before the hearing at least once a week for three (3) successive weeks in some newspaper of general circulation published in the province, as the court shall deem best. The date set for the hearing shall not be within thirty (30) days prior to an election nor within four (4) months after the last publication of the notice. Sec. 4. Hearing. Any interested person may appear at the hearing and oppose the petition. The Solicitor General or the proper provincial or city fiscal shall appear on behalf of the Government of the Republic. Sec. 5. Judgment. Upon satisfactory proof in open court on the date fixed in the order that such order has been published as directed and that the allegations of the petition are

true, the court shall, if proper and reasonable cause appears for changing the name of the petitioner, adjudge that such name be changed in accordance with the prayer of the petition. Sec. 6. Service of judgment. Judgments or orders rendered in connection with this rule shall be furnished the civil registrar of the municipality or city where the court issuing the same is situated, who shall forthwith enter the same in the civil register. Rule 108 CANCELLATION OR CORRECTION OF ENTRIES IN THE CIVIL REGISTRY Section 1. Who may file petition. Any person interested in any act, event, order or decree concerning the civil status of persons which has been recorded in the civil register, may file a verified petition for the cancellation or correction of any entry relating thereto, with the Regional Trial Court of the province where the corresponding civil registry is located. Sec. 2. Entries subject to cancellation or correction. Upon good and valid grounds, the following entries in the civil register may be cancelled or corrected: (a) births; (b) marriages; (c) deaths; (d) legal separations; (e) judgments of annulments of marriage; (f) judgments declaring marriages void from the beginning; (g) legitimations; (h) adoptions; (i) acknowledgments of natural children; (j) naturalization; (k) election, loss or recovery of citizenship; (l) civil interdiction; (m) judicial determination of filiation; (n) voluntary emancipation of a minor; and (o) changes of name. Sec. 3. Parties. When cancellation or correction of an entry in the civil register is sought, the civil registrar and all persons who have or claim any interest which would be affected thereby shall be made parties to the proceeding. Sec. 4. Notice and publication. Upon the filing of the petition, the court shall, by an order, fix the time and place for the hearing of the same, and cause reasonable notice thereof to be given to the persons named in the petition. The court shall also cause the order to be published once a week for three (3) consecutive weeks in a newspaper of general circulation in the province. Sec. 5. Opposition. The civil registrar and any person having or claiming any interest under the entry whose cancellation or correction is sought may, within fifteen (15) days from notice of the petition, or from the last date of publication of such notice, file his opposition thereto. Sec. 6. Expediting proceedings. The court in which the proceedings is brought may

make orders expediting the proceedings, and may also grant preliminary injunction for the preservation of the rights of the parties pending such proceedings. Sec. 7. Order. After hearing, the court may either dismiss the petition or issue an order granting the cancellation or correction prayed for. In either case, a certified copy of the judgment shall be served upon the civil registrar concerned who shall annotate the same in his record. The OSG argues that the petition below is fatally defective for non-compliance with Rules 103 and 108 of the Rules of Court because respondents petition did not implead the local civil registrar. Section 3, Rule 108 provides that the civil registrar and all persons who have or claim any interest which would be affected thereby shall be made parties to the proceedings. Likewise, the local civil registrar is required to be made a party in a proceeding for the correction of name in the civil registry. He is an indispensable party without whom no final determination of the case can be had.[12] Unless all possible indispensable parties were duly notified of the proceedings, the same shall be considered as falling much too short of the requirements of the rules.13 The corresponding petition should also implead as respondents the civil registrar and all other persons who may have or may claim to have any interest that would be affected thereby.14 Respondent, however, invokes Section 6,[15] Rule 1 of the Rules of Court which states that courts shall construe the Rules liberally to promote their objectives of securing to the parties a just, speedy and inexpensive disposition of the matters brought before it. We agree that there is substantial compliance with Rule 108 when respondent furnished a copy of the petition to the local civil registrar. The determination of a persons sex appearing in his birth certificate is a legal issue and the court must look to the statutes. In this connection, Article 412 of the Civil Code provides: ART. 412. No entry in a civil register shall be changed or corrected without a judicial order. Together with Article 376[16] of the Civil Code, this provision was amended by Republic Act No. 9048[17] 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, Rep. Act No. 9048 removed from the ambit of Rule 108 of the Rules of Court the correction of such errors. Rule 108 now applies only to substantial changes and corrections in entries in the civil register.18 Under Rep. Act No. 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.19 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: 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.20 Respondent undisputedly has CAH. This condition causes the early or "inappropriate" appearance of male characteristics. A person, like respondent, with this condition produces too much androgen, a male hormone. A newborn who has XX chromosomes coupled with CAH usually has a (1) swollen clitoris with the urethral opening at the base, an ambiguous genitalia often appearing more male than female; (2) normal internal structures of the female reproductive tract such as the ovaries, uterus and fallopian tubes; as the child grows older, some features start to appear male, such as deepening of the voice, facial hair, and failure to menstruate at puberty. About 1 in 10,000 to 18,000 children are born with CAH. CAH is one of many conditions[21] that involve intersex anatomy. During the twentieth century, medicine adopted the term "intersexuality" to apply to human beings who cannot be classified as either male or female.[22] The term is now of widespread use. According to Wikipedia, intersexuality "is the state of a living thing of a gonochoristic species whose sex chromosomes, genitalia, and/or secondary sex characteristics are determined to be neither exclusively male nor female. An organism with intersex may have biological characteristics of both male and female sexes." Intersex individuals are treated in different ways by different cultures. In most societies, intersex individuals have been expected to conform to either a male or female gender role.[23] Since the rise of modern medical science in Western societies, some intersex people with ambiguous external genitalia have had their genitalia surgically modified to resemble either male or female genitals.[24] More commonly, an intersex individual is considered as suffering from a "disorder" which is almost always recommended to be treated, whether by surgery and/or by taking lifetime medication in order to mold the individual as neatly as possible into the category of either male or female. In deciding this case, we consider the compassionate calls for recognition of the various

degrees of intersex as variations which should not be subject to outright denial. "It has been suggested that there is some middle ground between the sexes, a no-mans land for those individuals who are neither truly male nor truly female."[25] The current state of Philippine statutes apparently compels that a person be classified either as a male or as a female, but this Court is not controlled by mere appearances when nature itself fundamentally negates such rigid classification. In the instant case, if we determine respondent to be a female, then there is no basis for a change in the birth certificate entry for gender. But if we determine, based on medical testimony and scientific development showing the respondent to be other than female, then a change in the subjects birth certificate entry is in order. Biologically, nature endowed respondent with a mixed (neither consistently and categorically female nor consistently and categorically male) composition. Respondent has female (XX) chromosomes. However, respondents body system naturally produces high levels of male hormones (androgen). As a result, respondent has ambiguous genitalia and the phenotypic features of a male. Ultimately, we are of the view that where the person is biologically or naturally intersex the determining factor in his gender classification would be what the individual, like respondent, having reached the age of majority, with good reason thinks of his/her sex. Respondent here thinks of himself as a male and considering that his body produces high levels of male hormones (androgen) there is preponderant biological support for considering him as being male. Sexual development in cases of intersex persons makes the gender classification at birth inconclusive. It is at maturity that the gender of such persons, like respondent, is fixed. Respondent here has simply let nature take its course and has not taken unnatural steps to arrest or interfere with what he was born with. And accordingly, he has already ordered his life to that of a male. Respondent could have undergone treatment and taken steps, like taking lifelong medication,[26] to force his body into the categorical mold of a female but he did not. He chose not to do so. Nature has instead taken its due course in respondents development to reveal more fully his male characteristics. In the absence of a law on the matter, the Court will not dictate on respondent concerning a matter so innately private as ones sexuality and lifestyle preferences, much less on whether or not to undergo medical treatment to reverse the male tendency due to CAH. The Court will not consider respondent as having erred in not choosing to undergo treatment in order to become or remain as a female. Neither will the Court force respondent to undergo treatment and to take medication in order to fit the mold of a female, as society commonly currently knows this gender of the human species. Respondent is the one who has to live with his intersex anatomy. To him belongs the human right to the pursuit of happiness and of health. Thus, to him should belong the

primordial choice of what courses of action to take along the path of his sexual development and maturation. In the absence of evidence that respondent is an "incompetent"[27] and in the absence of evidence to show that classifying respondent as a male will harm other members of society who are equally entitled to protection under the law, the Court affirms as valid and justified the respondents position and his personal judgment of being a male. In so ruling we do no more than give respect to (1) the diversity of nature; and (2) how an individual deals with what nature has handed out. In other words, we respect respondents congenital condition and his mature decision to be a male. Life is already difficult for the ordinary person. We cannot but respect how respondent deals with hisunordinary state and thus help make his life easier, considering the unique circumstances in this case. As for respondents change of name under Rule 103, this Court has held that a change of name is not a matter of right but of judicial discretion, to be exercised in the light of the reasons adduced and the consequences that will follow.[28] The trial courts grant of respondents change of name from Jennifer to Jeff implies a change of a feminine name to a masculine name. Considering the consequence that respondents change of name merely recognizes his preferred gender, we find merit in respondents change of name. Such a change will conform with the change of the entry in his birth certificate from female to male. WHEREFORE, the Republics petition is DENIED. The Decision dated January 12, 2005 of the Regional Trial Court, Branch 33 of Siniloan, Laguna, is AFFIRMED. No pronouncement as to costs. SO ORDERED.

Republic vs. Cagandahan GR. No. 166676, September 12, 2008

FACTS:

Jennifer Cagandahan was registered as a female in her Certificate of Live Birth. During her childhood years, she suffered from clitoral hypertrophy and was later on diagnosed that her ovarian structures had minimized. She likewise has no breast nor menstruation. Subsequently, she was diagnosed of having Congenital Adrenal Hyperplasia (CAH), a condition where those afflicted possess secondary male characteristics because of too much secretion of male hormones, androgen. According to her, for all interests and appearances as well as in mind and emotion, she has become a male person. She filed a petition at RTC Laguna for Correction of Entries in her Birth Certificate such that her gender or sex be changed to male and her first name be changed to Jeff.

ISSUE: WON correction of entries in her birth certificate should be granted.

HELD:

The Court considered the compassionate calls for recognition of the various degrees of intersex as variations which should not be subject to outright denial. SC is of the view that where the person is biologically or naturally intersex the determining factor in his gender classification would be what the individual, having reached the age of majority, with good reason thinks of his/her sex. As in this case, respondent, thinks of himself as a male and considering that his body produces high levels of male hormones, there is preponderant biological support for considering him as being a male. Sexual development in cases of intersex persons makes the gender classification at birth inconclusive. It is at maturity that the gender of such persons, like respondent, is fixed.

BANK OF THE PHILIPPINE ISLANDS, Petitioner, vs. BPI EMPLOYEES UNION-DAVAO CHAPTER-FEDERATION OF UNIONS IN BPI UNIBANK, Respondent. DECISION LEONARDO-DE CASTRO, J.: May a corporation invoke its merger with another corporation as a valid ground to exempt its "absorbed employees" from the coverage of a union shop clause contained in its existing Collective Bargaining Agreement (CBA) with its own certified labor union? That is the question we shall endeavor to answer in this petition for review filed by an employer after the Court of Appeals decided in favor of respondent union, which is the employees recognized collective bargaining representative. At the outset, we should call to mind the spirit and the letter of the Labor Code provisions on union security clauses, specifically Article 248 (e), which states, "x x x Nothing in this Code or in any other law shall stop the parties from requiring membership in a recognized collective bargaining agent as a condition for employment, except those employees who are already members of another union at the time of the signing of the collective bargaining agreement."1 This case which involves the application of a collective bargaining agreement with a union shop clause should be resolved principally from the standpoint of the clear provisions of our labor laws, and the express terms of the CBA in question, and not by inference from the general consequence of the merger of corporations under the Corporation Code, which obviously does not deal with and, therefore, is silent on the terms and conditions of employment in corporations or juridical entities. This issue must be resolved NOW, instead of postponing it to a future time when the CBA is renegotiated as suggested by the Honorable Justice Arturo D. Brion because the same issue may still be resurrected in the renegotiation if the absorbed employees insist on their privileged status of being exempt from any union shop clause or any variant thereof. We find it significant to note that it is only the employer, Bank of the Philippine Islands (BPI), that brought the case up to this Court via the instant petition for review; while the employees actually involved in the case did not pursue the same relief, but had instead chosen in effect to acquiesce to the decision of the Court of Appeals which effectively required them to comply with the union shop clause under the existing CBA at the time of the merger of BPI with Far East Bank and Trust Company (FEBTC), which decision had already become final and executory as to the aforesaid employees. By not appealing the decision of the Court of Appeals, the aforesaid employees are bound by the said Court of Appeals decision to join BPIs duly certified labor union. In view of the apparent acquiescence of the affected FEBTC employees in the Court of Appeals decision, BPI

should not have pursued this petition for review. However, even assuming that BPI may do so, the same still cannot prosper. What is before us now is a petition for review under Rule 45 of the Rules of Court of the Decision2 dated September 30, 2003 of the Court of Appeals, as reiterated in its Resolution3 of June 9, 2004, reversing and setting aside the Decision4 dated November 23, 2001 of Voluntary Arbitrator Rosalina Letrondo-Montejo, in CA-G.R. SP No. 70445, entitled BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank v. Bank of the Philippine Islands, et al. The antecedent facts are as follows: On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of Merger executed on January 20, 2000 by and between BPI, herein petitioner, and FEBTC. 5 This Article and Plan of Merger was approved by the Securities and Exchange Commission on April 7, 2000.6 Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the surviving corporation. FEBTC employees, including those in its different branches across the country, were hired by petitioner as its own employees, with their status and tenure recognized and salaries and benefits maintained. Respondent BPI Employees Union-Davao Chapter - Federation of Unions in BPI Unibank (hereinafter the "Union," for brevity) is the exclusive bargaining agent of BPIs rank and file employees in Davao City. The former FEBTC rank-and-file employees in Davao City did not belong to any labor union at the time of the merger. Prior to the effectivity of the merger, or on March 31, 2000, respondent Union invited said FEBTC employees to a meeting regarding the Union Shop Clause (Article II, Section 2) of the existing CBA between petitioner BPI and respondent Union.7 The parties both advert to certain provisions of the existing CBA, which are quoted below: ARTICLE I Section 1. Recognition and Bargaining Unit The BANK recognizes the UNION as the sole and exclusive collective bargaining representative of all the regular rank and file employees of the Bank offices in Davao City. Section 2. Exclusions Section 3. Additional Exclusions

Section 4. Copy of Contract ARTICLE II Section 1. Maintenance of Membership All employees within the bargaining unit who are members of the Union on the date of the effectivity of this Agreement as well as employees within the bargaining unit who subsequently join or become members of the Union during the lifetime of this Agreement shall as a condition of their continued employment with the Bank, maintain their membership in the Union in good standing. Section 2. Union Shop - New employees falling within the bargaining unit as defined in Article I of this Agreement,who may hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular employees, join the Union as a condition of their continued employment. It is understood that membership in good standing in the Union is a condition of their continued employment with the Bank.8 (Emphases supplied.) After the meeting called by the Union, some of the former FEBTC employees joined the Union, while others refused. Later, however, some of those who initially joined retracted their membership.9 Respondent Union then sent notices to the former FEBTC employees who refused to join, as well as those who retracted their membership, and called them to a hearing regarding the matter. When these former FEBTC employees refused to attend the hearing, the president of the Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their employment pursuant thereto.10 After two months of management inaction on the request, respondent Union informed petitioner BPI of its decision to refer the issue of the implementation of the Union Shop Clause of the CBA to the Grievance Committee. However, the issue remained unresolved at this level and so it was subsequently submitted for voluntary arbitration by the parties.11 Voluntary Arbitrator Rosalina Letrondo-Montejo, in a Decision12 dated November 23, 2001, ruled in favor of petitioner BPIs interpretation that the former FEBTC employees were not covered by the Union Security Clause of the CBA between the Union and the Bank on the ground that the said employees were not new employees who were hired and subsequently regularized, but were absorbed employees "by operation of law" because the "former employees of FEBTC can be considered assets and liabilities of the absorbed corporation." The Voluntary Arbitrator concluded that the former FEBTC employees could not be compelled to join the Union, as it was their constitutional right to join or not to join any organization. Respondent Union filed a Motion for Reconsideration, but the Voluntary Arbitrator denied the same in an Order dated March 25, 2002.13

Dissatisfied, respondent then appealed the Voluntary Arbitrators decision to the Court of Appeals. In the herein assailed Decision dated September 30, 2003, the Court of Appeals reversed and set aside the Decision of the Voluntary Arbitrator.14 Likewise, the Court of Appeals denied herein petitioners Motion for Reconsideration in a Resolution dated June 9, 2004. The Court of Appeals pertinently ruled in its Decision: A union-shop clause has been defined as a form of union security provision wherein nonmembers may be hired, but to retain employment must become union members after a certain period. There is no question as to the existence of the union-shop clause in the CBA between the petitioner-union and the company. The controversy lies in its application to the "absorbed" employees. This Court agrees with the voluntary arbitrator that the ABSORBED employees are distinct and different from NEW employees BUT only in so far as their employment service is concerned. The distinction ends there. In the case at bar, the absorbed employees length of service from its former employer is tacked with their employment with BPI. Otherwise stated, the absorbed employees service is continuous and there is no gap in their service record. This Court is persuaded that the similarities of "new" and "absorbed" employees far outweighs the distinctionbetween them. The similarities lies on the following, to wit: (a) they have a new employer; (b) new working conditions; (c) new terms of employment and; (d) new company policy to follow. As such, they should be considered as "new" employees for purposes of applying the provisions of the CBA regarding the "unionshop" clause. To rule otherwise would definitely result to a very awkward and unfair situation wherein the "absorbed" employees shall be in a different if not, better situation than the existing BPI employees. The existing BPI employees by virtue of the "union-shop" clause are required to pay the monthly union dues, remain as members in good standing of the union otherwise, they shall be terminated from the company, and other union-related obligations. On the other hand, the "absorbed" employees shall enjoy the "fruits of labor" of the petitioner-union and its members for nothing in exchange. Certainly, this would disturb industrial peace in the company which is the paramount reason for the existence of the CBA and the union. The voluntary arbitrators interpretation of the provisions of the CBA concerning the coverage of the "union-shop" clause is at war with the spirit and the rationale why the Labor Code itself allows the existence of such provision.

The Supreme Court in the case of Manila Mandarin Employees Union vs. NLRC (G.R. No. 76989, September 29, 1987) rule, to quote: "This Court has held that a valid form of union security, and such a provision in a collective bargaining agreement is not a restriction of the right of freedom of association guaranteed by the Constitution. A closed-shop agreement is an agreement whereby an employer binds himself to hire only members of the contracting union who must continue to remain members in good standing to keep their jobs. It is "THE MOST PRIZED ACHIEVEMENT OF UNIONISM." IT ADDS MEMBERSHIP AND COMPULSORY DUES. By holding out to loyal members a promise of employment in the closed-shop, it wields group solidarity." (Emphasis supplied) Hence, the voluntary arbitrator erred in construing the CBA literally at the expense of industrial peace in the company. With the foregoing ruling from this Court, necessarily, the alternative prayer of the petitioner to require the individual respondents to become members or if they refuse, for this Court to direct respondent BPI to dismiss them, follows.15 Hence, petitioners present recourse, raising the following issues: I WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE FORMER FEBTC EMPLOYEES SHOULD BE CONSIDERED NEW EMPLOYEES OF BPI FOR PURPOSES OF APPLYING THE UNION SHOP CLAUSE OF THE CBA II WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN FINDING THAT THE VOLUNTARY ARBITRATORS INTERPRETATION OF THE COVERAGE OF THE UNION SHOP CLAUSE IS "AT WAR WITH THE SPIRIT AND THE RATIONALE WHY THE LABOR CODE ITSELF ALLOWS THE EXISTENCE OF SUCH PROVISION"16 In essence, the sole issue in this case is whether or not the former FEBTC employees that were absorbed by petitioner upon the merger between FEBTC and BPI should be covered by the Union Shop Clause found in the existing CBA between petitioner and respondent Union.

Petitioner is of the position that the former FEBTC employees are not new employees of BPI for purposes of applying the Union Shop Clause of the CBA, on this note, petitioner points to Section 2, Article II of the CBA, which provides: New employees falling within the bargaining unit as defined in Article I of this Agreement, who may hereafter be regularly employed by the Bank shall, within thirty (30) days after they become regular employees, join the Union as a condition of their continued employment. It is understood that membership in good standing in the Union is a condition of their continued employment with the Bank.17 (Emphases supplied.) Petitioner argues that the term "new employees" in the Union Shop Clause of the CBA is qualified by the phrases "who may hereafter be regularly employed" and "after they become regular employees" which led petitioner to conclude that the "new employees" referred to in, and contemplated by, the Union Shop Clause of the CBA were only those employees who were "new" to BPI, on account of having been hired initially on a temporary or probationary status for possible regular employment at some future date. BPI argues that the FEBTC employees absorbed by BPI cannot be considered as "new employees" of BPI for purposes of applying the Union Shop Clause of the CBA.18 According to petitioner, the contrary interpretation made by the Court of Appeals of this particular CBA provision ignores, or even defies, what petitioner assumes as its clear meaning and scope which allegedly contradicts the Courts strict and restrictive enforcement of union security agreements. We do not agree. Section 2, Article II of the CBA is silent as to how one becomes a "regular employee" of the BPI for the first time. There is nothing in the said provision which requires that a "new" regular employee first undergo a temporary or probationary status before being deemed as such under the union shop clause of the CBA. "Union security" is a generic term which is applied to and comprehends "closed shop," "union shop," "maintenance of membership" or any other form of agreement which imposes upon employees the obligation to acquire or retain union membership as a condition affecting employment. There is union shop when all new regular employees are required to join the union within a certain period for their continued employment. There is maintenance of membership shop when employees, who are union members as of the effective date of the agreement, or who thereafter become members, must maintain union membership as a condition for continued employment until they are promoted or transferred out of the bargaining unit or the agreement is terminated. A closed-shop, on the other hand, may be defined as an enterprise in which, by agreement between the employer and his employees or their representatives, no person may be employed in any or certain agreed departments of the enterprise unless he or she is, becomes, and, for the duration of the agreement, remains a member in good standing of a union entirely comprised of or of which the employees in interest are a part.19

In the case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.,20 we ruled that: It is the policy of the State to promote unionism to enable the workers to negotiate with management on the same level and with more persuasiveness than if they were to individually and independently bargain for the improvement of their respective conditions. To this end, the Constitution guarantees to them the rights "to self-organization, collective bargaining and negotiations and peaceful concerted actions including the right to strike in accordance with law." There is no question that these purposes could be thwarted if every worker were to choose to go his own separate way instead of joining his co-employees in planning collective action and presenting a united front when they sit down to bargain with their employers. It is for this reason that the law has sanctioned stipulations for the union shop and the closed shop as a means of encouraging the workers to join and support the labor union of their own choice as their representative in the negotiation of their demands and the protection of their interest vis--vis the employer. (Emphasis ours.) In other words, the purpose of a union shop or other union security arrangement is to guarantee the continued existence of the union through enforced membership for the benefit of the workers. All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its terms. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely, employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds;21employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect;22 confidential employees who are excluded from the rank and file bargaining unit;23 and employees excluded from the union shop by express terms of the agreement. When certain employees are obliged to join a particular union as a requisite for continued employment, as in the case of Union Security Clauses, this condition is a valid restriction of the freedom or right not to join any labor organization because it is in favor of unionism. This Court, on occasion, has even held that a union security clause in a CBA is not a restriction of the right of freedom of association guaranteed by the Constitution.24 Moreover, a closed shop agreement is an agreement whereby an employer binds himself to hire only members of the contracting union who must continue to remain members in good standing to keep their jobs. It is "the most prized achievement of unionism." It adds membership and compulsory dues. By holding out to loyal members a promise of employment in the closed shop, it wields group solidarity.25

Indeed, the situation of the former FEBTC employees in this case clearly does not fall within the first three exceptions to the application of the Union Shop Clause discussed earlier. No allegation or evidence of religious exemption or prior membership in another union or engagement as a confidential employee was presented by both parties. The sole category therefore in which petitioner may prove its claim is the fourth recognized exception or whether the former FEBTC employees are excluded by the express terms of the existing CBA between petitioner and respondent. To reiterate, petitioner insists that the term "new employees," as the same is used in the Union Shop Clause of the CBA at issue, refers only to employees hired by BPI as nonregular employees who later qualify for regular employment and become regular employees, and not those who, as a legal consequence of a merger, are allegedly automatically deemed regular employees of BPI. However, the CBA does not make a distinction as to how a regular employee attains such a status. Moreover, there is nothing in the Corporation Law and the merger agreement mandating the automatic employment as regular employees by the surviving corporation in the merger. It is apparent that petitioner hinges its argument that the former FEBTC employees were absorbed by BPI merely as a legal consequence of a merger based on the characterization by the Voluntary Arbiter of these absorbed employees as included in the "assets and liabilities" of the dissolved corporation - assets because they help the Bank in its operation and liabilities because redundant employees may be terminated and company benefits will be paid to them, thus reducing the Banks financial status. Based on this ratiocination, she ruled that the same are not new employees of BPI as contemplated by the CBA at issue, noting that the Certificate of Filing of the Articles of Merger and Plan of Merger between FEBTC and BPI stated that "x x x the entire assets and liabilities of FAR EASTERN BANK & TRUST COMPANY will be transferred to and absorbed by the BANK OF THE PHILIPPINE ISLANDS x x x (underlining supplied)."26 In sum, the Voluntary Arbiter upheld the reasoning of petitioner that the FEBTC employees became BPI employees by "operation of law" because they are included in the term "assets and liabilities." Absorbed FEBTC Employees are Neither Assets nor Liabilities In legal parlance, however, human beings are never embraced in the term "assets and liabilities." Moreover, BPIs absorption of former FEBTC employees was neither by operation of law nor by legal consequence of contract. There was no government regulation or law that compelled the merger of the two banks or the absorption of the employees of the dissolved corporation by the surviving corporation. Had there been such law or regulation, the absorption of employees of the non-surviving entities of the merger would have been mandatory on the surviving corporation.27 In the present case, the merger was voluntarily entered into by both banks presumably for some mutually acceptable consideration. In fact, the Corporation Code does not also mandate the absorption of the employees of the non-surviving corporation by the surviving corporation in the case of a merger. Section 80 of the Corporation Code provides:

SEC. 80. Effects of merger or consolidation. The merger or consolidation, as provided in the preceding sections shall have the following effects: 1. The constituent corporations shall become a single corporation which, in case of merger, shall be the surviving corporation designated in the plan of merger; and, in case of consolidation, shall be the consolidated corporation designated in the plan of consolidation; 2. The separate existence of the constituent corporations shall cease, except that of the surviving or the consolidated corporation; 3. The surviving or the consolidated corporation shall possess all the rights, privileges, immunities and powers and shall be subject to all the duties and liabilities of a corporation organized under this Code; 4. The surviving or the consolidated corporation shall thereupon and thereafter possess all the rights, privileges, immunities and franchises of each of the constituent corporations; and all property, real or personal, and all receivables due on whatever account, including subscriptions to shares and other choses in action, and all and every other interest of, or belonging to, or due to each constituent corporation, shall be taken and deemed to be transferred to and vested in such surviving or consolidated corporation without further act or deed; and 5. The surviving or the consolidated corporation shall be responsible and liable for all the liabilities and obligations of each of the constituent corporations in the same manner as if such surviving or consolidated corporation had itself incurred such liabilities or obligations; and any claim, action or proceeding pending by or against any of such constituent corporations may be prosecuted by or against the surviving or consolidated corporation, as the case may be. Neither the rights of creditors nor any lien upon the property of any of such constituent corporations shall be impaired by such merger or consolidated. Significantly, too, the Articles of Merger and Plan of Merger dated April 7, 2000 did not contain any specific stipulation with respect to the employment contracts of existing personnel of the non-surviving entity which is FEBTC. Unlike the Voluntary Arbitrator, this Court cannot uphold the reasoning that the general stipulation regarding transfer of FEBTC assets and liabilities to BPI as set forth in the Articles of Merger necessarily includes the transfer of all FEBTC employees into the employ of BPI and neither BPI nor the FEBTC employees allegedly could do anything about it. Even if it is so, it does not follow that the absorbed employees should not be subject to the terms and conditions of employment obtaining in the surviving corporation. The rule is that unless expressly assumed, labor contracts such as employment contracts and collective bargaining agreements are not enforceable against a transferee of an

enterprise, labor contracts being in personam, thus binding only between the parties. A labor contract merely creates an action in personam and does not create any real right which should be respected by third parties. This conclusion draws its force from the right of an employer to select his employees and to decide when to engage them as protected under our Constitution, and the same can only be restricted by law through the exercise of the police power.28 Furthermore, this Court believes that it is contrary to public policy to declare the former FEBTC employees as forming part of the assets or liabilities of FEBTC that were transferred and absorbed by BPI in the Articles of Merger. Assets and liabilities, in this instance, should be deemed to refer only to property rights and obligations of FEBTC and do not include the employment contracts of its personnel. A corporation cannot unilaterally transfer its employees to another employer like chattel. Certainly, if BPI as an employer had the right to choose who to retain among FEBTCs employees, FEBTC employees had the concomitant right to choose not to be absorbed by BPI. Even though FEBTC employees had no choice or control over the merger of their employer with BPI, they had a choice whether or not they would allow themselves to be absorbed by BPI. Certainly nothing prevented the FEBTCs employees from resigning or retiring and seeking employment elsewhere instead of going along with the proposed absorption. Employment is a personal consensual contract and absorption by BPI of a former FEBTC employee without the consent of the employee is in violation of an individuals freedom to contract. It would have been a different matter if there was an express provision in the articles of merger that as a condition for the merger, BPI was being required to assume all the employment contracts of all existing FEBTC employees with the conformity of the employees. In the absence of such a provision in the articles of merger, then BPI clearly had the business management decision as to whether or not employ FEBTCs employees. FEBTC employees likewise retained the prerogative to allow themselves to be absorbed or not; otherwise, that would be tantamount to involuntary servitude. There appears to be no dispute that with respect to FEBTC employees that BPI chose not to employ or FEBTC employees who chose to retire or be separated from employment instead of "being absorbed," BPIs assumed liability to these employees pursuant to the merger is FEBTCs liability to them in terms of separation pay,29retirement pay30 or other benefits that may be due them depending on the circumstances. Legal Consequences of Mergers Although not binding on this Court, American jurisprudence on the consequences of voluntary mergers on the right to employment and seniority rights is persuasive and illuminating. We quote the following pertinent discussion from the American Law Reports: Several cases have involved the situation where as a result of mergers, consolidations, or shutdowns, one group of employees, who had accumulated seniority at one plant or

for one employer, finds that their jobs have been discontinued except to the extent that they are offered employment at the place or by the employer where the work is to be carried on in the future. Such cases have involved the question whether such transferring employees should be entitled to carry with them their accumulated seniority or whether they are to be compelled to start over at the bottom of the seniority list in the "new" job. It has been recognized in some cases that the accumulated seniority does not survive and cannot be transferred to the "new" job. In Carver v Brien (1942) 315 Ill App 643, 43 NE2d 597, the shop work of three formerly separate railroad corporations, which had previously operated separate facilities, was consolidated in the shops of one of the roads. Displaced employees of the other two roads were given preference for the new jobs created in the shops of the railroad which took over the work. A controversy arose between the employees as to whether the displaced employees were entitled to carry with them to the new jobs the seniority rights they had accumulated with their prior employers, that is, whether the rosters of the three corporations, for seniority purposes, should be "dovetailed" or whether the transferring employees should go to the bottom of the roster of their new employer. Labor representatives of the various systems involved attempted to work out an agreement which, in effect, preserved the seniority status obtained in the prior employment on other roads, and the action was for specific performance of this agreement against a demurring group of the original employees of the railroad which was operating the consolidated shops. The relief sought was denied, the court saying that, absent some specific contract provision otherwise, seniority rights were ordinarily limited to the employment in which they were earned, and concluding that the contract for which specific performance was sought was not such a completed and binding agreement as would support such equitable relief, since the railroad, whose concurrence in the arrangements made was essential to their effectuation, was not a party to the agreement. Where the provisions of a labor contract provided that in the event that a trucker absorbed the business of another private contractor or common carrier, or was a party to a merger of lines, the seniority of the employeesabsorbed or affected thereby should be determined by mutual agreement between the trucker and the unions involved, it was held in Moore v International Brotherhood of Teamsters, etc. (1962, Ky) 356 SW2d 241, that the trucker was not required to absorb the affected employees as well as the business, the court saying that they could find no such meaning in the above clause, stating that it dealt only with seniority, and not with initial employment. Unless and until the absorbing company agreed to take the employees of the company whose business was being absorbed, no seniority problem was created, said the court, hence the provision of the contract could have no application. Furthermore, said the court, it did not require that the absorbing company take these employees, but only that if it did take them the question of seniority between the old and new employeeswould be worked out by agreement or else be submitted to the grievance procedure.31 (Emphasis ours.)

Indeed, from the tenor of local and foreign authorities, in voluntary mergers, absorption of the dissolved corporations employees or the recognition of the absorbed employees service with their previous employer may be demanded from the surviving corporation if required by provision of law or contract. The dissent of Justice Arturo D. Brion tries to make a distinction as to the terms and conditions of employment of the absorbed employees in the case of a corporate merger or consolidation which will, in effect, take away from corporate management the prerogative to make purely business decisions on the hiring of employees or will give it an excuse not to apply the CBA in force to the prejudice of its own employees and their recognized collective bargaining agent. In this regard, we disagree with Justice Brion. Justice Brion takes the position that because the surviving corporation continues the personality of the dissolved corporation and acquires all the latters rights and obligations, it is duty-bound to absorb the dissolved corporations employees, even in the absence of a stipulation in the plan of merger. He proposes that this interpretation would provide the necessary protection to labor as it spares workers from being "left in legal limbo." However, there are instances where an employer can validly discontinue or terminate the employment of an employee without violating his right to security of tenure. Among others, in case of redundancy, for example, superfluous employees may be terminated and such termination would be authorized under Article 283 of the Labor Code.32 Moreover, assuming for the sake of argument that there is an obligation to hire or absorb all employees of the non-surviving corporation, there is still no basis to conclude that the terms and conditions of employment under a valid collective bargaining agreement in force in the surviving corporation should not be made to apply to the absorbed employees. The Corporation Code and the Subject Merger Agreement are Silent on Efficacy, Terms and Conditions of Employment Contracts The lack of a provision in the plan of merger regarding the transfer of employment contracts to the surviving corporation could have very well been deliberate on the part of the parties to the merger, in order to grant the surviving corporation the freedom to choose who among the dissolved corporations employees to retain, in accordance with the surviving corporations business needs. If terminations, for instance due to redundancy or labor-saving devices or to prevent losses, are done in good faith, they would be valid. The surviving corporation too is duty-bound to protect the rights of its own employees who may be affected by the merger in terms of seniority and other conditions of their employment due to the merger. Thus, we are not convinced that in the absence of a stipulation in the merger plan the surviving corporation was compelled, or may be judicially compelled, to absorb all employees under the same terms and conditions obtaining in the dissolved corporation as the surviving corporation should also take into consideration the state of its business and its obligations to its own employees, and to their certified collective bargaining agent or labor union.

Even assuming we accept Justice Brions theory that in a merger situation the surviving corporation should be compelled to absorb the dissolved corporations employees as a legal consequence of the merger and as a social justice consideration, it bears to emphasize his dissent also recognizes that the employee may choose to end his employment at any time by voluntarily resigning. For the employee to be "absorbed" by BPI, it requires the employees implied or express consent. It is because of this human element in employment contracts and the personal, consensual nature thereof that we cannot agree that, in a merger situation, employment contracts are automatically transferable from one entity to another in the same manner that a contract pertaining to purely proprietary rights such as a promissory note or a deed of sale of property is perfectly and automatically transferable to the surviving corporation. That BPI is the same entity as FEBTC after the merger is but a legal fiction intended as a tool to adjudicate rights and obligations between and among the merged corporations and the persons that deal with them. Although in a merger it is as if there is no change in the personality of the employer, there is in reality a change in the situation of the employee. Once an FEBTC employee is absorbed, there are presumably changes in his condition of employment even if his previous tenure and salary rate is recognized by BPI. It is reasonable to assume that BPI would have different rules and regulations and company practices than FEBTC and it is incumbent upon the former FEBTC employees to obey these new rules and adapt to their new environment. Not the least of the changes in employment condition that the absorbed FEBTC employees must face is the fact that prior to the merger they were employees of an unorganized establishment and after the merger they became employees of a unionized company that had an existing collective bargaining agreement with the certified union. This presupposes that the union who is party to the collective bargaining agreement is the certified union that has, in the appropriate certification election, been shown to represent a majority of the members of the bargaining unit. Likewise, with respect to FEBTC employees that BPI chose to employ and who also chose to be absorbed, then due to BPIs blanket assumption of liabilities and obligations under the articles of merger, BPI was bound to respect the years of service of these FEBTC employees and to pay the same, or commensurate salaries and other benefits that these employees previously enjoyed with FEBTC. As the Union likewise pointed out in its pleadings, there were benefits under the CBA that the former FEBTC employees did not enjoy with their previous employer. As BPI employees, they will enjoy all these CBA benefits upon their "absorption." Thus, although in a sense BPI is continuing FEBTCs employment of these absorbed employees, BPIs employment of these absorbed employees was not under exactly the same terms and conditions as stated in the latters employment contracts with FEBTC. This further strengthens the view that BPI and the former FEBTC employees voluntarily contracted with each other for their employment in the surviving corporation. Proper Appreciation of the Term "New Employees" Under the CBA

In any event, it is of no moment that the former FEBTC employees retained the regular status that they possessed while working for their former employer upon their absorption by petitioner. This fact would not remove them from the scope of the phrase "new employees" as contemplated in the Union Shop Clause of the CBA, contrary to petitioners insistence that the term "new employees" only refers to those who are initially hired as non-regular employees for possible regular employment. The Union Shop Clause in the CBA simply states that "new employees" who during the effectivity of the CBA "may be regularly employed" by the Bank must join the union within thirty (30) days from their regularization. There is nothing in the said clause that limits its application to only new employees who possess non-regular status, meaning probationary status, at the start of their employment. Petitioner likewise failed to point to any provision in the CBA expressly excluding from the Union Shop Clause new employees who are "absorbed" as regular employees from the beginning of their employment. What is indubitable from the Union Shop Clause is that upon the effectivity of the CBA, petitioners new regular employees (regardless of the manner by which they became employees of BPI) are required to join the Union as a condition of their continued employment. The dissenting opinion of Justice Brion dovetails with Justice Carpios view only in their restrictive interpretation of who are "new employees" under the CBA. To our dissenting colleagues, the phrase "new employees" (who are covered by the union shop clause) should only include new employees who were hired as probationary during the life of the CBA and were later granted regular status. They propose that the former FEBTC employees who were deemed regular employees from the beginning of their employment with BPI should be treated as a special class of employees and be excluded from the union shop clause. Justice Brion himself points out that there is no clear, categorical definition of "new employee" in the CBA. In other words, the term "new employee" as used in the union shop clause is used broadly without any qualification or distinction. However, the Court should not uphold an interpretation of the term "new employee" based on the general and extraneous provisions of the Corporation Code on merger that would defeat, rather than fulfill, the purpose of the union shop clause. To reiterate, the provision of the Article 248(e) of the Labor Code in point mandates that nothing in the said Code or any other law should stop the parties from requiring membership in a recognized collective bargaining agent as a condition of employment. Significantly, petitioner BPI never stretches its arguments so far as to state that the absorbed employees should be deemed "old employees" who are not covered by the Union Shop Clause. This is not surprising. By law and jurisprudence, a merger only becomes effective upon approval by the Securities and Exchange Commission (SEC) of the articles of merger. In Associated Bank v. Court of Appeals,33 we held:

The procedure to be followed is prescribed under the Corporation Code. Section 79 of said Code requires the approval by the Securities and Exchange Commission (SEC) of the articles of merger which, in turn, must have been duly approved by a majority of the respective stockholders of the constituent corporations. The same provision further states that the merger shall be effective only upon the issuance by the SEC of a certificate of merger. The effectivity date of the merger is crucial for determining when the merged or absorbed corporation ceases to exist; and when its rights, privileges, properties as well as liabilities pass on to the surviving corporation. (Emphasis ours.) In other words, even though BPI steps into the shoes of FEBTC as the surviving corporation, BPI does so at a particular point in time, i.e., the effectivity of the merger upon the SECs issuance of a certificate of merger. In fact, the articles of merger themselves provided that both BPI and FEBTC will continue their respective business operations until the SEC issues the certificate of merger and in the event SEC does not issue such a certificate, they agree to hold each other blameless for the nonconsummation of the merger. Considering the foregoing principle, BPI could have only become the employer of the FEBTC employees it absorbed after the approval by the SEC of the merger. If the SEC did not approve the merger, BPI would not be in the position to absorb the employees of FEBTC at all. Indeed, there is evidence on record that BPI made the assignments of its absorbed employees in BPI effective April 10, 2000, or after the SECs approval of the merger.34 In other words, BPI became the employer of the absorbed employees only at some point after the effectivity of the merger, notwithstanding the fact that the absorbed employees years of service with FEBTC were voluntarily recognized by BPI. Even assuming for the sake of argument that we consider the absorbed FEBTC employees as "old employees" of BPI who are not members of any union (i.e., it is their date of hiring by FEBTC and not the date of their absorption that is considered), this does not necessarily exclude them from the union security clause in the CBA. The CBA subject of this case was effective from April 1, 1996 until March 31, 2001. Based on the allegations of the former FEBTC employees themselves, there were former FEBTC employees who were hired by FEBTC after April 1, 1996 and if their date of hiring by FEBTC is considered as their date of hiring by BPI, they would undeniably be considered "new employees" of BPI within the contemplation of the Union Shop Clause of the said CBA. Otherwise, it would lead to the absurd situation that we would discriminate not only between new BPI employees (hired during the life of the CBA) and former FEBTC employees (absorbed during the life of the CBA) but also among the former FEBTC employees themselves. In other words, we would be treating employees who are exactly similarly situated (i.e., the group of absorbed FEBTC employees) differently. This hardly satisfies the demands of equality and justice. Petitioner limited itself to the argument that its absorbed employees do not fall within the term "new employees" contemplated under the Union Shop Clause with the apparent objective of excluding all, and not just some, of the former FEBTC employees from the application of the Union Shop Clause.

However, in law or even under the express terms of the CBA, there is no special class of employees called "absorbed employees." In order for the Court to apply or not apply the Union Shop Clause, we can only classify the former FEBTC employees as either "old" or "new." If they are not "old" employees, they are necessarily "new" employees. If they are new employees, the Union Shop Clause did not distinguish between new employees who are non-regular at their hiring but who subsequently become regular and new employees who are "absorbed" as regular and permanent from the beginning of their employment. The Union Shop Clause did not so distinguish, and so neither must we. No Substantial Distinction Under the CBA Between Regular Employees Hired After Probationary Status and Regular Employees Hired After the Merger Verily, we agree with the Court of Appeals that there are no substantial differences between a newly hired non-regular employee who was regularized weeks or months after his hiring and a new employee who was absorbed from another bank as a regular employee pursuant to a merger, for purposes of applying the Union Shop Clause. Both employees were hired/employed only after the CBA was signed. At the time they are being required to join the Union, they are both already regular rank and file employees of BPI. They belong to the same bargaining unit being represented by the Union. They both enjoy benefits that the Union was able to secure for them under the CBA. When they both entered the employ of BPI, the CBA and the Union Shop Clause therein were already in effect and neither of them had the opportunity to express their preference for unionism or not. We see no cogent reason why the Union Shop Clause should not be applied equally to these two types of new employees, for they are undeniably similarly situated. The effect or consequence of BPIs so-called "absorption" of former FEBTC employees should be limited to what they actually agreed to, i.e. recognition of the FEBTC employees years of service, salary rate and other benefits with their previous employer. The effect should not be stretched so far as to exempt former FEBTC employees from the existing CBA terms, company policies and rules which apply to employees similarly situated. If the Union Shop Clause is valid as to other new regular BPI employees, there is no reason why the same clause would be a violation of the "absorbed" employees freedom of association. Non-Application of Union Shop Clause Contrary to the Policy of the Labor Code and Inimical to Industrial Peace It is but fair that similarly situated employees who enjoy the same privileges of a CBA should be likewise subject to the same obligations the CBA imposes upon them. A contrary interpretation of the Union Shop Clause will be inimical to industrial peace and workers solidarity. This unfavorable situation will not be sufficiently addressed by asking the former FEBTC employees to simply pay agency fees to the Union in lieu of union membership, as the dissent of Justice Carpio suggests. The fact remains that other new regular employees, to whom the "absorbed employees" should be compared, do not have the option to simply pay the agency fees and they must join the Union or face termination.

Petitioners restrictive reading of the Union Shop Clause could also inadvertently open an avenue, which an employer could readily use, in order to dilute the membership base of the certified union in the collective bargaining unit (CBU). By entering into a voluntary merger with a non-unionized company that employs more workers, an employer could get rid of its existing union by the simple expedient of arguing that the "absorbed employees" are not new employees, as are commonly understood to be covered by a CBAs union security clause. This could then lead to a new majority within the CBU that could potentially threaten the majority status of the existing union and, ultimately, spell its demise as the CBUs bargaining representative. Such a dreaded but not entirely farfetched scenario is no different from the ingenious and creative "union-busting" schemes that corporations have fomented throughout the years, which this Court has foiled time and again in order to preserve and protect the valued place of labor in this jurisdiction consistent with the Constitutions mandate of insuring social justice. There is nothing in the Labor Code and other applicable laws or the CBA provision at issue that requires that a new employee has to be of probationary or non-regular status at the beginning of the employment relationship. An employer may confer upon a new employee the status of regular employment even at the onset of his engagement. Moreover, no law prohibits an employer from voluntarily recognizing the length of service of a new employee with a previous employer in relation to computation of benefits or seniority but it should not unduly be interpreted to exclude them from the coverage of the CBA which is a binding contractual obligation of the employer and employees. Indeed, a union security clause in a CBA should be interpreted to give meaning and effect to its purpose, which is to afford protection to the certified bargaining agent and ensure that the employer is dealing with a union that represents the interests of the legally mandated percentage of the members of the bargaining unit. The union shop clause offers protection to the certified bargaining agent by ensuring that future regular employees who (a) enter the employ of the company during the life of the CBA; (b) are deemed part of the collective bargaining unit; and (c) whose number will affect the number of members of the collective bargaining unit will be compelled to join the union. Such compulsion has legal effect, precisely because the employer by voluntarily entering in to a union shop clause in a CBA with the certified bargaining agent takes on the responsibility of dismissing the new regular employee who does not join the union. Without the union shop clause or with the restrictive interpretation thereof as proposed in the dissenting opinions, the company can jeopardize the majority status of the certified union by excluding from union membership all new regular employees whom the Company will "absorb" in future mergers and all new regular employees whom the Company hires as regular from the beginning of their employment without undergoing a probationary period. In this manner, the Company can increase the number of members of the collective bargaining unit and if this increase is not accompanied by a corresponding increase in union membership, the certified union may lose its majority

status and render it vulnerable to attack by another union who wishes to represent the same bargaining unit.35 Or worse, a certified union whose membership falls below twenty percent (20%) of the total members of the collective bargaining unit may lose its status as a legitimate labor organization altogether, even in a situation where there is no competing union.36 In such a case, an interested party may file for the cancellation of the unions certificate of registration with the Bureau of Labor Relations.37 Plainly, the restrictive interpretation of the union shop clause would place the certified unions very existence at the mercy and control of the employer. Relevantly, only BPI, the employer appears to be interested in pursuing this case. The former FEBTC employees have not joined BPI in this appeal. For the foregoing reasons, Justice Carpios proposal to simply require the former FEBTC to pay agency fees is wholly inadequate to compensate the certified union for the loss of additional membership supposedly guaranteed by compliance with the union shop clause. This is apart from the fact that treating these "absorbed employees" as a special class of new employees does not encourage worker solidarity in the company since another class of new employees (i.e. those whose were hired as probationary and later regularized during the life of the CBA) would not have the option of substituting union membership with payment of agency fees. Justice Brion, on the other hand, appears to recognize the inherent unfairness of perpetually excluding the "absorbed" employees from the ambit of the union shop clause. He proposes that this matter be left to negotiation by the parties in the next CBA. To our mind, however, this proposal does not sufficiently address the issue. With BPI already taking the position that employees "absorbed" pursuant to its voluntary mergers with other banks are exempt from the union shop clause, the chances of the said bank ever agreeing to the inclusion of such employees in a future CBA is next to nil more so, if BPIs narrow interpretation of the union shop clause is sustained by this Court. Right of an Employee not to Join a Union is not Absolute and Must Give Way to the Collective Good of All Members of the Bargaining Unit The dissenting opinions place a premium on the fact that even if the former FEBTC employees are not old employees, they nonetheless were employed as regular and permanent employees without a gap in their service. However, an employees permanent and regular employment status in itself does not necessarily exempt him from the coverage of a union shop clause. In the past this Court has upheld even the more stringent type of union security clause, i.e., the closed shop provision, and held that it can be made applicable to old employees who are already regular and permanent but have chosen not to join a union. In the early case of Juat v. Court of Industrial Relations,38 the Court held that an old employee who

had no union may be compelled to join the union even if the collective bargaining agreement (CBA) imposing the closed shop provision was only entered into seven years after of the hiring of the said employee. To quote from that decision: A closed-shop agreement has been considered as one form of union security whereby only union members can be hired and workers must remain union members as a condition of continued employment. The requirement for employees or workers to become members of a union as a condition for employment redounds to the benefit and advantage of said employees because by holding out to loyal members a promise of employment in the closed-shop the union wields group solidarity. In fact, it is said that "the closed-shop contract is the most prized achievement of unionism." xxxx This Court had categorically held in the case of Freeman Shirt Manufacturing Co., Inc., et al. vs. Court of Industrial Relations, et al., G.R. No. L-16561, Jan. 28, 1961, that the closedshop proviso of a collective bargaining agreement entered into between an employer and a duly authorized labor union is applicable not only to the employees or laborers that are employed after the collective bargaining agreement had been entered into but also to old employees who are not members of any labor union at the time the said collective bargaining agreement was entered into. In other words, if an employee or laborer is already a member of a labor union different from the union that entered into a collective bargaining agreement with the employer providing for a closed-shop, said employee or worker cannot be obliged to become a member of that union which had entered into a collective bargaining agreement with the employer as a condition for his continued employment. (Emphasis and underscoring supplied.) Although the present case does not involve a closed shop provision that included even old employees, the Juat example is but one of the cases that laid down the doctrine that the right not to join a union is not absolute. Theoretically, there is nothing in law or jurisprudence to prevent an employer and a union from stipulating that existing employees (who already attained regular and permanent status but who are not members of any union) are to be included in the coverage of a union security clause. Even Article 248(e) of the Labor Code only expressly exempts old employees who already have a union from inclusion in a union security clause.39 Contrary to the assertion in the dissent of Justice Carpio, Juat has not been overturned by Victoriano v. Elizalde Rope Workers Union40 nor by Reyes v. Trajano.41 The factual milieus of these three cases are vastly different. In Victoriano, the issue that confronted the Court was whether or not employees who were members of the Iglesia ni Kristo (INK) sect could be compelled to join the union under a closed shop provision, despite the fact that their religious beliefs prohibited them from joining a union. In that case, the Court was asked to balance the constitutional right to religious freedom against a host of other constitutional provisions including the

freedom of association, the non-establishment clause, the non-impairment of contracts clause, the equal protection clause, and the social justice provision. In the end, the Court held that "religious freedom, although not unlimited, is a fundamental personal right and liberty, and has a preferred position in the hierarchy of values." 42 However, Victoriano is consistent with Juat since they both affirm that the right to refrain from joining a union is not absolute. The relevant portion of Victoriano is quoted below: The right to refrain from joining labor organizations recognized by Section 3 of the Industrial Peace Act is, however, limited. The legal protection granted to such right to refrain from joining is withdrawn by operation of law, where a labor union and an employer have agreed on a closed shop, by virtue of which the employer may employ only member of the collective bargaining union, and the employees must continue to be members of the union for the duration of the contract in order to keep their jobs. Thus Section 4 (a) (4) of the Industrial Peace Act, before its amendment by Republic Act No. 3350, provides that although it would be an unfair labor practice for an employer "to discriminate in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization" the employer is, however, not precluded "from making an agreement with a labor organization to require as a condition of employment membership therein, if such labor organization is the representative of the employees." By virtue, therefore, of a closed shop agreement, before the enactment of Republic Act No. 3350, if any person, regardless of his religious beliefs, wishes to be employed or to keep his employment, he must become a member of the collective bargaining union. Hence, the right of said employee not to join the labor union is curtailed and withdrawn.43 (Emphases supplied.) If Juat exemplified an exception to the rule that a person has the right not to join a union, Victoriano merely created an exception to the exception on the ground of religious freedom. Reyes, on the other hand, did not involve the interpretation of any union security clause. In that case, there was no certified bargaining agent yet since the controversy arose during a certification election. In Reyes, the Court highlighted the idea that the freedom of association included the right not to associate or join a union in resolving the issue whether or not the votes of members of the INK sect who were part of the bargaining unit could be excluded in the results of a certification election, simply because they were not members of the two contesting unions and were expected to have voted for "NO UNION" in view of their religious affiliation. The Court upheld the inclusion of the votes of the INK members since in the previous case of Victoriano we held that INK members may not be compelled to join a union on the ground of religious freedom and even without Victoriano every employee has the right to vote "no union" in a certification election as part of his freedom of association. However, Reyes is not authority for Justice Carpios proposition that an employee who is not a member of any union may claim an exemption from an existing union security clause because he already has regular and permanent status but simply prefers not to join a union.

The other cases cited in Justice Carpios dissent on this point are likewise inapplicable. Basa v. Federacion Obrera de la Industria Tabaquera y Otros Trabajadores de Filipinas,44 Anucension v. National Labor Union,45 and Gonzales v. Central Azucarera de Tarlac Labor Union46 all involved members of the INK. In line with Victoriano, these cases upheld the INK members claimed exemption from the union security clause on religious grounds. In the present case, the former FEBTC employees never claimed any religious grounds for their exemption from the Union Shop Clause. As for Philips Industrial Development, Inc. v. National Labor Relations Corporation 47 and Knitjoy Manufacturing, Inc. v. Ferrer-Calleja,48 the employees who were exempted from joining the respondent union or who were excluded from participating in the certification election were found to be not members of the bargaining unit represented by respondent union and were free to form/join their own union. In the case at bar, it is undisputed that the former FEBTC employees were part of the bargaining unit that the Union represented. Thus, the rulings in Philips and Knitjoy have no relevance to the issues at hand. Time and again, this Court has ruled that the individual employees right not to join a union may be validly restricted by a union security clause in a CBA 49 and such union security clause is not a violation of the employees constitutional right to freedom of association.50 It is unsurprising that significant provisions on labor protection of the 1987 Constitution are found in Article XIII on Social Justice. The constitutional guarantee given the right to form unions51 and the State policy to promote unionism52 have social justice considerations. In Peoples Industrial and Commercial Employees and Workers Organization v. Peoples Industrial and Commercial Corporation,53 we recognized that "[l]abor, being the weaker in economic power and resources than capital, deserve protection that is actually substantial and material." The rationale for upholding the validity of union shop clauses in a CBA, even if they impinge upon the individual employees right or freedom of association, is not to protect the union for the unions sake. Laws and jurisprudence promote unionism and afford certain protections to the certified bargaining agent in a unionized company because a strong and effective union presumably benefits all employees in the bargaining unit since such a union would be in a better position to demand improved benefits and conditions of work from the employer. This is the rationale behind the State policy to promote unionism declared in the Constitution, which was elucidated in the above-cited case of Liberty Flour Mills Employees v. Liberty Flour Mills, Inc.54 In the case at bar, since the former FEBTC employees are deemed covered by the Union Shop Clause, they are required to join the certified bargaining agent, which supposedly has gathered the support of the majority of workers within the bargaining unit in the appropriate certification proceeding. Their joining the certified union would, in fact, be in the best interests of the former FEBTC employees for it unites their interests with the majority of employees in the bargaining unit. It encourages employee solidarity and affords sufficient protection to the majority status of the union during the life of the CBA

which are the precisely the objectives of union security clauses, such as the Union Shop Clause involved herein. We are indeed not being called to balance the interests of individual employees as against the State policy of promoting unionism, since the employees, who were parties in the court below, no longer contested the adverse Court of Appeals decision. Nonetheless, settled jurisprudence has already swung the balance in favor of unionism, in recognition that ultimately the individual employee will be benefited by that policy. In the hierarchy of constitutional values, this Court has repeatedly held that the right to abstain from joining a labor organization is subordinate to the policy of encouraging unionism as an instrument of social justice. Also in the dissenting opinion of Justice Carpio, he maintains that one of the dire consequences to the former FEBTC employees who refuse to join the union is the forfeiture of their retirement benefits. This is clearly not the case precisely because BPI expressly recognized under the merger the length of service of the absorbed employees with FEBTC. Should some refuse to become members of the union, they may still opt to retire if they are qualified under the law, the applicable retirement plan, or the CBA, based on their combined length of service with FEBTC and BPI. Certainly, there is nothing in the union shop clause that should be read as to curtail an employees eligibility to apply for retirement if qualified under the law, the existing retirement plan, or the CBA as the case may be. In sum, this Court finds it reasonable and just to conclude that the Union Shop Clause of the CBA covers the former FEBTC employees who were hired/employed by BPI during the effectivity of the CBA in a manner which petitioner describes as "absorption." A contrary appreciation of the facts of this case would, undoubtedly, lead to an inequitable and very volatile labor situation which this Court has consistently ruled against.1avvphi1 In the case of former FEBTC employees who initially joined the union but later withdrew their membership, there is even greater reason for the union to request their dismissal from the employer since the CBA also contained a Maintenance of Membership Clause. A final point in relation to procedural due process, the Court is not unmindful that the former FEBTC employees refusal to join the union and BPIs refusal to enforce the Union Shop Clause in this instance may have been based on the honest belief that the former FEBTC employees were not covered by said clause. In the interest of fairness, we believe the former FEBTC employees should be given a fresh thirty (30) days from notice of finality of this decision to join the union before the union demands BPI to terminate their employment under the Union Shop Clause, assuming said clause has been carried over in the present CBA and there has been no material change in the situation of the parties. WHEREFORE, the petition is hereby DENIED, and the Decision dated September 30, 2003 of the Court of Appeals is AFFIRMED, subject to the thirty (30) day notice requirement imposed herein. Former FEBTC employees who opt not to become union members but who qualify for retirement shall receive their retirement benefits in accordance with law, the applicable retirement plan, or the CBA, as the case may be.

Bank of the Philippine Islands vs. BPI Employees Union-Davao Chapter-Federation of Unions in BPI Unibank, FACTS: On March 23, 2000, the Bangko Sentral ng Pilipinas approved the Articles of Merger executed on January 20, 2000 by and between BPI, herein petitioner, and FEBTC.[ This Article and Plan of Merger was approved by the Securities and Exchange Commission on April 7, 2000.Pursuant to the Article and Plan of Merger, all the assets and liabilities of FEBTC were transferred to and absorbed by BPI as the surviving corporation. FEBTC employees, including those in its different branches across the country, were hired by petitioner as its own employees, with their status and tenure recognized and salaries and benefits maintained. Respondent BPI Employees UnionDavao Chapter - Federation of Unions in BPI Unibank is the exclusive bargaining agent of BPIs rank and file employees in Davao City. The former FEBTC rank-and-file employees in Davao City did not belong to any labor union at the time of the merger. Prior to the effectivity of the merger, or on March 31, 2000, respondent Union invited said FEBTC employees to a meeting regarding the Union Shop Clause of the existing CBA between petitioner BPI and respondent Union After the meeting called by the Union, some of the former FEBTC employees joined the Union, while others refused. Later, however, some of those who initially joined retracted their membership. Respondent Union then sent notices to the former FEBTC employees who refused to join, as well as those who retracted their membership, and called them to a hearing regarding the matter. When these former FEBTC employees refused to attend the hearing, the president of the Union requested BPI to implement the Union Shop Clause of the CBA and to terminate their employment pursuant thereto. After two months of management inaction on the request, respondent Union informed petitioner BPI of its decision to refer the issue of the implementation of the Union Shop Clause of the CBA to the Grievance Committee. However, the issue remained unresolved at this level and so it was subsequently submitted for voluntary arbitration by the parties. ISSUE: Whether or not the former FEBTC employees that were absorbed by petitioner upon the merger between FEBTC and BPI should be covered by the Union Shop Clause found in the existing CBA between petitioner and respondent Union. HELD: All employees in the bargaining unit covered by a Union Shop Clause in their CBA with management are subject to its terms. However, under law and jurisprudence, the following kinds of employees are exempted from its coverage, namely, employees who at the time the union shop agreement takes effect are bona fide members of a religious organization which prohibits its members from joining labor unions on religious grounds; employees already in the service and already members of a union other than the majority at the time the union shop agreement took effect; confidential employees who are excluded from the rank and file bargaining unit; and employees excluded from the union shop by express terms of the agreement. G.R. No. 166216

THIRD DIVISION March 14, 2012

ROGELIO ABERCA, RODOLFO BENOSA, NESTOR BODINO, NOEL ETABAG, DANILO DELA FUENTE, BELEN DIAZ-FLORES, MANUEL MARIO GUZMAN, ALAN JASMINEZ, EDWIN LOPEZ, ALFREDO MANSOS, ALEX MARCELINO, ELIZABETH PROTACIOMARCELINO, JOSEPH OLAYER, CARLOS PALMA, MARCO PALO, ROLANDO SALUTIN BENJAMIN SEGUNDO, ARTURO TABARA, EDWIN TULALIAN, and REBECCA TULALIAN,Petitioners, vs. MAJ. GEN. FABIAN VER, COL. FIDEL SINGSON, COL. GERARDO B. LANTORIA, COL. ROLANDO ABADILLA, COL. GALILEO KINTANAR, LT. COL. PANFILO M. LACSON, MAJ. RODOLFO AGUINALDO, CAPT. DANILO PIZARRO, 1LT. PEDRO TANGO, 1LT. ROMEO RICARDO, 1LT. RAUL BACALSO, M/SGT. BIENVENIDO BALABA and "JOHN DOES," Respondents. DECISION MENDOZA, J.: Assailed in this petition is the July 31, 2003 Decision1 of the Court of Appeals (CA) in CAG.R. CV No. 43763 and its November 26, 2004 Resolution2 reversing and setting aside the February 19, 1993 Decision3 of the Regional Trial Court, Branch 107, Quezon City (RTC), in Civil Case No. 37487 entitled "Rogelio Aberca, et al. v. Maj. Gen. Fabian Ver, et al." for sum of money and damages. The Facts The factual and procedural antecedents were succinctly recited by the CA as follows: On 25 January 1983, several suspected subversives who were arrested and detained by the military filed a complaint for damages with the Regional Trial Court of Quezon City against Gen. Fabian Ver, then AFP Chief of Staff, and the following subordinate officers: Col. Fidel Singson, Col. Gerardo Lantoria, Col. Rolando Abadilla, Col. Guillermo Kintanar, Lt. Col. Panfilo Lacson, Maj. Rodolfo Aguinaldo, Capt. Danilo Pizarro, 1Lt. Pedro Tango, 1Lt. Romeo Ricardo, 1Lt. Raul Bacalso, M/Sgt. Bienvenido Balaba and "John Does." The case was docketed as Civil Case No. 37487 and assigned to Branch 95. In their complaint, the plaintiff-appellees alleged that they were arrested and detained by Task Force Makabansa, a composite group of various intelligence units of the AFP, on the strength of defective search warrants; that while under detention and investigation, they were subjected to physical and psychological harm, torture and other brutalities to

extort from them confessions and other information that would incriminate them; and that by reason thereof, they suffered actual and moral damages. Defendants-appellants, through their counsel, the then Solicitor General Estelito Mendoza, filed a motion to dismiss on the following grounds: (1) since the privilege of the writ of habeas corpus was then suspended, the trial court cannot inquire into the circumstances surrounding plaintiffs-appellees arrests; (2) the defendants-appellants are immune from liability for the reason that they were then performing their official duties; and (3) the complaint states no cause of action. In an order dated November 8, 1983, the trial court granted defendants-appellants motion to dismiss and ordered the case dismissed. Plaintiffs-appellees filed a motion to reconsider and set aside the order of dismissal. In an order dated May 11, 1984, the trial court declared the order of November 8, 1983 final. Plaintiffs-appellees again filed a motion for reconsideration of the order dated May 11, 1984. In an order dated September 21, 1984, the trial court denied the motion for reconsideration. On March 15, 1985, plaintiffs-appellees went to the Supreme Court on a petition for review on certiorari, seeking to annul and set aside the orders of the trial court dated November 8, 1983, May 11, 1984 and September 21, 1984. The case was docketed as G.R. No. 69866. While the case was pending in the Supreme Court, the so-called EDSA revolution took place. As a result, the defendants-appellants lost their official positions and were no longer in their respective office addresses as appearing in the record. Also, in the meantime, the case was re-raffled to Branch 107. On April 15, 1988, the Supreme Court rendered a decision annulling and setting aside the assailed orders and remanded the case to the trial court for further proceedings. However, trial could not proceed immediately because on June 11, 1988, the record of the case was destroyed when fire razed the City Hall of Quezon City. It was only on October 9, 1989 when plaintiffs-appellees sought a reconstitution of the record of the case. The record shows that the petition for reconstitution was set for hearing on October 27, 1989. However, there is nothing in the record to show that defendantsappellants or their counsel were notified. For lack of an opposition, the petition for reconstitution was granted in an order dated March 12, 1990. On August 15, 1990, plaintiffs-appellees filed a motion praying that defendantsappellants be required to file their answer. However, the record as reconstituted did not

show who are the lawyers of the defendants-appellants considering that Estelito Mendoza, who had represented them in his capacity as Solicitor General, was no longer holding that position. Furthermore, defendants-appellants were also no longer occupying the positions they held at the time the complaint was filed. Thus, in an order dated August 17, 1990, plaintiffs-appellees were directed to report to the trial court the addresses and whereabouts of defendants-appellants so that they could be properly notified. Instead of complying with the order of August 17, 1990, plaintiffs-appellees filed a motion to declare defendants-appellants in default. The trial court deferred resolution of this motion and instead, it issued an order on September 10, 1990 directing that a copy of the order dated August 17, 1990 be furnished to new Solicitor General Francisco Chavez to enable him to take action pursuant to Section 18, Rule 3 of the Rules of Court, and to former Solicitor General Estelito Mendoza to enable him to give notice as to whether he [would] continue to represent the defendants-appellants in his private capacity. As it said in its order, the trial court took this action "in view of the change in government and corresponding change in the addresses and circumstances of the defendants-appellants who may not even be aware of the decision of the Supreme Court in case G.R. No. L-69866 and of the reconstitution of records in this case xxx." On October 1, 1990, former Solicitor General Mendoza filed a manifestation informing the trial court that his appearance as defendants-appellants counsel terminated when he ceased to be Solicitor General and that he was not representing them in his private capacity. On his part, Solicitor General Chavez finally filed on December 11, 1990 a notice of withdrawal of appearance, citing Urbano v. Go, where the Supreme Court said that "the Office of the Solicitor General (OSG) is not authorized to represent a public official at any stage of a criminal case or in a civil suit for damages arising from a felony." The record does not show that defendants-appellants were furnished a copy of this notice of withdrawal or that they gave their conformity thereto. In an order dated December 27, 1990, the trial court denied plaintiffs-appellees motion to declare defendants-appellants in default, emphatically pointing out that defendantsappellants were not duly notified of the decision of the Supreme Court. In the same order, the trial court directed plaintiffs-appellees to comply with the order of August 17, 1990 within ten (10) days from notice, with a warning that the case [would] be archived and eventually dismissed if plaintiffs-appellees failed to furnish to the court the addresses of defendants-appellants. Plaintiffs-appellees moved to reconsider the order dated December 27, 1990 but in an order dated February 1, 1991, the trial court denied the motion, stating that "without actual notice of the judgment of the Supreme Court xxx the defendants-appellants herein would not be aware that they should file a responsive pleading" and that, therefore, "to consider the defendants-appellants in default would be tantamount to lack of due process xxx." For failure of the plaintiffs-appellees to comply with the orders dated August 17, 1990 and December 27, 1990, the trial court dismissed the case without prejudice in its order dated March 7, 1991. Subsequently, however, in an order dated June 4, 1991, the trial

court set aside the order of dismissal and reinstated the case. It also approved plaintiffsappellees request to serve the notice to file answer or responsive pleading by publication. In a compliance dated September 12, 1991, plaintiffs-appellees informed the trial court that the following notice was published in the Tagalog newspaper BALITA in its issues of August 29, 1991 and September 5, 1991: xxxx No answer was filed by defendants-appellants within the period stated in the notice. On motion of plaintiffs-appellees, the trial court in its order dated December 5, 1991 declared defendants-appellants in default and directed plaintiffs-appellees to present their evidence ex-parte.4 Ruling of the RTC On February 19, 1993, the RTC handed down a decision in favor of the petitioners, the dispositive portion of which reads: WHEREFORE, judgment is hereby rendered, ordering the following defendants: 1) Maj. General Fabian Ver 2) Col. Fidel Singson 3) Col. Rolando Abadilla 4) Col. Gerardo Lantoria 5) Col. Galileo Kintanar 6) Lt. Col. Panfilo Lacson 7) Maj. Rodolfo Aguinaldo 8) 1Lt. Pedro Tango 9) M/Sgt. Bienvenido Balaba to pay jointly and severally to EACH of the following plaintiffs: a) Rodolfo Benosa

b) Manuel Mario Guzman c) Joseph Olayer d) Marco Palo e) Rolando Salutin the amounts of FIFTY THOUSAND PESOS (50,000.00) as temperate or moderate damages; ONE HUNDRED FIFTY THOUSAND PESOS (150,000.00) as moral damages; and ONE HUNDRED FIFTY THOUSAND PESOS (150,000.00) as exemplary damages. Likewise, they are ordered to pay jointly and severally the sum of TWO HUNDRED THOUSAND PESOS to the plaintiffs counsel. The claims of the rest of the plaintiffs are denied and thereby dismissed. Likewise, the case against the following defendants: Capt. Danilo Pizarro, 1Lt. Romeo Ricardo and 1Lt. Raul Bacalso is DISMISSED, and the said defendants are exonerated from any liability.5 Subsequently, respondents Col. Fidel Singson (Col. Singson), Lt. Col. Panfilo M. Lacson (Lt. Col. Lacson), and Col. Rolando Abadilla (Col. Abadilla) filed their Omnibus Motion praying as follows: 1) that the order of default dated December 5, 1991 be reversed and set aside; 2) that the decision dated February 19, 1993 be reversed and set aside; 3) that the entire proceedings be declared null and void; and 4) that they be given fifteen (15) days from notice to file answer to the complaint and present their evidence. Col. Gerardo B. Lantoria (Col. Lantoria)filed his own Motion for Reconsideration. On his part, respondent Maj. Rodolfo Aguinaldo (Maj. Aguinaldo) failed to file a timely notice of appeal so he filed a Petition for Relief from Judgment praying that the RTC set aside its decision and proceed to try the case based on the following grounds: 1) the decision was rendered without the benefit of notice in gross violation of his right to due process; 2) the reconstitution of the records of the case and further proceedings taken thereon were effected through fraud; and 3) his failure to move for a new trial or to appeal was due to mistake or excusable negligence. The Omnibus Motion of Col. Singson, Lt. Col. Lacson and Col. Abadilla; the Motion for Reconsideration of Col. Gerardo Lantoria; and the Petition for Relief from Judgment of Maj. Aguinaldo were denied by the RTC.6Aggrieved, the said respondents elevated their case to the CA. Maj. Aguinaldo argued that he was deliberately deprived of the opportunity to be heard and put up his defense, while Col. Singson, Lt. Col. Lacson and Col. Abadilla presented the following assignment of errors: I

THE TRIAL COURT ERRED IN ALLOWING THE OFFICE OF THE SOLICITOR GENERAL (OSG) TO WITHDRAW AS COUNSEL WITHOUT THE REQUIRED NOTICE TO, AND/OR CONSENT/CONFORMITY OF APPELLANTS. II THE TRIAL COURT ERRED IN NOT SETTING ASIDE THE ORDER OF DEFAULT AND/OR THE JUDGMENT BY DEFAULT AND GRANTING NEW TRIAL. III THE TRIAL COURT ERRED IN HOLDING THAT THE OSGS MISTAKES AND NEGLIGENCE ARE BINDING ON THE DEFENDANTS-APPELLANTS. IV THE TRIAL COURT ERRED IN HOLDING THE DEFENDANTS-APPELLANTS SINGSON, ABADILLA AND LACSON LIABLE FOR THE ALLEGED DAMAGES SUSTAINED BY THE PLAINTIFFS-APPELLANTS (SIC).7 The Ruling of the CA On July 31, 2003, the CA rendered a decision reversing and setting aside the RTC decision and ordering the case remanded to the RTC for further proceedings. The dispositive portion of the CA decision reads as follows: WHEREFORE, premises considered, the appeal is hereby GRANTED. The assailed decision dated February 19, 1993 is hereby REVERSED and SET ASIDE. Let the record be REMANDED to the trial court for further proceedings in accordance with the foregoing disquisition. SO ORDERED.8 The CA ruled, among others, that the RTC committed four (4) errors in declaring the respondents in default and proceeding to hear the case. The RTC committed its first error when it abandoned the proper modes of service of notices, orders, resolutions or judgments as the petitioners failed to comply with its order dated August 17, 1990, directing them to report the addresses and whereabouts of the respondents so that they could be properly notified. The second error was the failure of the RTC to avail of substituted service after failing to effect personal service or service by mail. It perpetrated its third error when it authorized service by publication after dismissing the case for failure of the petitioners

to furnish the current addresses of the respondents. The CA reasoned out that there was nothing in the rules which would authorize publication of a notice of hearing to file answer and for what was authorized to be published were summons and final orders and judgments. The fourth error was committed when the respondents were declared in default because they were not duly notified and, therefore, were denied due process. The CA stated that since the RTC failed to notify the respondents of the proceedings undertaken, the latter were denied the chance to actively participate therein. It explained as follows: Instead of observing the above precepts by according defendants-appellants every opportunity to ventilate their side of the controversy, the trial court failed not only to notify them of the proceedings undertaken relative to the resolution of the case but the chance as well to actively participate therein. It bears stressing that defendantsappellants were not informed of the reinstatement of the case against them when the High Tribunal set aside the orders of the trial court dated May 11, 1984, September 21, 1984 and November 8, 1983 dismissing the complaint instituted by plaintiffs-appellees. Likewise, defendants-appellants were not apprised of the reconstitution of the records of the case which were destroyed by the fire that razed the City Hall of Quezon City. In the same manner, they were not notified of the withdrawal of the OSG as their official counsel of record, much less was their consent thereto sought. Finally and most significantly, defendants-appellants were precluded the chance to file their respective answer or responsive pleadings to the complaint with the issuance of the order dated December 5, 1991 declaring them in default notwithstanding the defective service by publication of the courts notice requiring them to file such answer or responsive pleading.9 Not satisfied, the petitioners come to this Court praying for the reversal and setting aside of the CA decision anchored on the following arguments: I IN REVERSING THE TRIAL COURTS RULINGS DECLARING DEFENDANTS IN DEFAULT AND ALLOWING PLAINTIFFS TO PRESENT THEIR EVIDENCE EXPARTE; AND IN NULLIFYING THE TRIAL COURTS JUDGMENT BY DEFAULT, THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE AND SO FAR DEPARTED FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO WARRANT THE EXERCISE BY THIS COURT OF ITS POWER OF SUPERVISION.10 II IN HOLDING THAT THE TRIAL COURT ERRED IN DENYING RESPONDENTS MOTION FOR NEW TRIAL TO SET ASIDE THE JUDGMENT AND PETITION FOR RELIEF FROM JUDGMENT, THE COURT A QUO ACTED CONTRARY TO LAW AND JURISPRUDENCE, AND SO FAR DEPARTED FROM THE USUAL COURSE OF

JUDICIAL PROCEEDINGS AS TO WARRANT THE EXERCISE BY THIS COURT OF ITS POWER OF SUPERVISION.11 The Petitioners Position The petitioners claim that the RTC did not err in declaring the respondents in default and in allowing them to present evidence ex- parte; that the respondents were represented by the OSG from 1983 up to December 11, 1990 when the latter withdrew its appearance from the case; that after the respondents had appeared, thru the OSG, by filing a motion to dismiss, the petitioners were under no obligation to track down the respondents addresses since the Rules of Court provide that once a litigant is represented by counsel, all notices, motions and pleadings must be sent to him as counsel of record; that it is a matter of record that the OSG was furnished copies of all court orders and the petitioners pleadings for the period it remained as the respondents counsel of record or from 1983 until the OSG withdrew on December 11, 1990; that as counsel of record, the OSG was duty-bound to file the respondents answer to the complaint within 15 days from notice that it was reinstated by this Court and the case was remanded to the RTC for further proceedings; and that despite having received copies of this Courts decision in G.R. No. 69866 on or about April 20, 1988 and despite having been duly notified of the finality of said decision by means of this Courts Entry of Judgment, the OSG did not file any answer or seek an extension of time to do so. The petitioners further argue that as early as May 1988, when this Courts decision became final and executory and the respondents received notice thereof through their counsel of record, it was incumbent upon them to have answered the complaint within the period provided by the Rules of Court; that the RTC was not hasty in declaring the respondents in default for they were given several chances to file their answers even after their period to do so had already lapsed; that it was the respondents failure to exercise ordinary prudence in monitoring the progress of this case that placed the petitioners in a difficult situation; that the respondents in this case cannot seize control of the proceedings or cause them to be suspended indefinitely by the simple expedient of not filing their answers or by feigning ignorance of the status of the proceedings; that the rule on service of summons by means of publication applies to service of summons by publication, not to notices to file answer by publication; that while service of summons by publication entails acquiring jurisdiction over the person of the defendant, it was already obtained over the respondents in this case by their voluntary appearance through counsel and their act of filing a motion to dismiss on substantive grounds; that substituted service was an exercise in futility because the respondents were no longer holding the positions they were holding at the time the petition was filed and, therefore, could not be reached at the addresses indicated on the complaint; that the only remaining option was to notify the respondents by publication; that the RTC did not err in holding that the respondents failed to establish the fraud, accident, mistake and/or excusable negligence that would warrant the grant of a new trial, or the setting aside of the judgment and/or petition for relief from judgment; that the negligence of the OSG is binding on the respondents in the same manner that its initial success in securing the dismissal of the case was binding on them; and that it would be highly unfair to allow the

respondents, who reaped the benefits of the initial dismissal of the case and never complained then about the OSG, to suddenly complain that they were not bound by their counsels handling or mishandling of the case. The Respondents Position The respondents counter that the CA did not commit a reversible error in reversing and setting aside the default judgment rendered by the RTC; that the petitioners failed to address four (4) errors committed by the RTC cited by the CA; that the respondents were deprived of the opportunity to file their answer or responsive pleadings to the complaint when the RTC issued a default order against them after a defective service of notice to file answer by publication; that the petitioners invocation of the jurisprudence that a defaulting party has the burden of showing that he has a meritorious defense does not apply in this case; and that what should apply is the settled rule that once a denial or deprivation of due process is determined, the RTC is ousted of its jurisdiction to proceed and its judgment is null and void. The Courts Ruling The basic question is whether the constitutional right to procedural due process was properly observed or was unacceptably violated in this case when the respondents were declared in default for failing to file their answer within the prescribed period and when the petitioners were allowed to present their evidence ex-parte. Section 1, Article III of the 1987 Constitution guarantees that: No person shall be deprived of life, liberty, or property without due process of law nor shall any person be denied the equal protection of the law. Procedural due process is that which hears before it condemns, which proceeds upon inquiry and renders judgment only after trial. It contemplates notice and opportunity to be heard before judgment is rendered affecting one's person or property.12 Moreover, pursuant to the provisions of Section 5(5) of Article VIII of the 1987 Constitution,13 the Court adopted and promulgated the following rules concerning, among others, the protection and enforcement of constitutional rights, pleading, practice and procedure in all courts: Rule 13 SEC. 5. Modes of service.Service of pleadings, motions, notices, orders, judgments and other papers shall be made either personally or by mail.

SEC. 6. Personal service.Service of the papers may be made by delivering personally a copy to the party or his counsel, or by leaving it in his office with his clerk or with a person having charge thereof. If no person is found in his office, or his office is not known, or he has no office, then by leaving the copy, between the hours of eight in the morning and six in the evening, at the partys or counsels residence, if known, with a person of sufficient age and discretion then residing therein. SEC. 7. Service by mail.Service by registered mail shall be made by depositing the copy in the office, in a sealed envelope, plainly addressed to the party or his counsel at his office, if known, otherwise at his residence, if known, with postage fully prepaid, and with instructions to the postmaster to return the mail to the sender after ten (10) days if undelivered. If no registry service is available in the locality of either the sender or the addressee, service may be done by ordinary mail. SEC. 8. Substituted service.If service of pleadings, motions, notices, resolutions, orders and other papers cannot be made under the two preceding sections, the office and place of residence of the party or his counsel being unknown, service may be made by delivering the copy to the clerk of court, with proof of failure of both personal service and service by mail. The service is complete at the time of such delivery. The above rules, thus, prescribe the modes of service of pleadings, motions, notices, orders, judgments, and other papers, namely: (1) personal service; (2) service by mail; and (3) substituted service, in case service cannot be effected either personally or by mail. The Rules of Court has been laid down to insure the orderly conduct of litigation and to protect the substantive rights of all party litigants. It is for this reason that the basic rules on the modes of service provided under Rule 13 of the Rules of Court have been made mandatory and, hence, should be strictly followed. In Marcelino Domingo v. Court of Appeals, 14 the Court wrote: Section 11, Rule 13 of the Rules of Court states: SEC. 11. Priorities in modes of service and filing. Whenever practicable, the service and filing of pleadings and other papers shall be done personally. Except with respect to papers emanating from the court, a resort to other modes must be accompanied by a written explanation why the service or filing was not done personally. A violation of this Rule may be cause to consider the paper as not filed. Section 11 is mandatory. In Solar Team Entertainment, Inc. v. Judge Ricafort, the Court held that: Pursuant x x x to Section 11 of Rule 13, service and filing of pleadings and other papers must, whenever practicable, be done personally; and if made through other modes, the

party concerned must provide a written explanation as to why the service or filing was not done personally. x x x Personal service and filing are preferred for obvious reasons. Plainly, such should expedite action or resolution on a pleading, motion or other paper; and conversely, minimize, if not eliminate, delays likely to be incurred if service or filing is done by mail, considering the inefficiency of postal service. Likewise, personal service will do away with the practice of some lawyers who, wanting to appear clever, resort to the following less than ethical practices: (1) serving or filing pleadings by mail to catch opposing counsel off-guard, thus leaving the latter with little or no time to prepare, for instance, responsive pleadings or an opposition; or (2) upon receiving notice from the post office that the registered parcel containing the pleading of or other paper from the adverse party may be claimed, unduly procrastinating before claiming the parcel, or, worse, not claiming it at all, thereby causing undue delay in the disposition of such pleading or other papers. If only to underscore the mandatory nature of this innovation to our set of adjective rules requiring personal service whenever practicable, Section 11 of Rule 13 then gives the court the discretion to consider a pleading or paper as not filed if the other modes of service or filing were resorted to and no written explanation was made as to why personal service was not done in the first place. The exercise of discretion must, necessarily, consider the practicability of personal service, for Section 11 itself begins with the clause "whenever practicable." We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997 Rules of Civil Procedure, personal service and filing is the general rule, and resort to other modes of service and filing, the exception. Henceforth, whenever personal service or filing is practicable, in light of the circumstances of time, place and person, personal service or filing is mandatory. Only when personal service or filing is not practicable may resort to other modes be had, which must then be accompanied by a written explanation as to why personal service or filing was not practicable to begin with. In adjudging the plausibility of an explanation, a court shall likewise consider the importance of the subject matter of the case or the issues involved therein, and the prima facie merit of the pleading sought to be expunged for violation of Section 11. This Court cannot rule otherwise, lest we allow circumvention of the innovation introduced by the 1997 Rules in order to obviate delay in the administration of justice. xxxx x x x [F]or the guidance of the Bench and Bar, strictest compliance with Section 11 of Rule 13 is mandated. [Emphasis supplied] In the case at bench, the respondents were completely deprived of due process when they were declared in default based on a defective mode of service service of notice to file answer by publication. The rules on service of pleadings, motions, notices, orders,

judgments, and other papers were not strictly followed in declaring the respondents in default. The Court agrees with the CA that the RTC committed procedural lapses in declaring the respondents in default and in allowing the petitioners to present evidence ex-parte. A review of the records discloses that after the Court rendered its April 15, 1988 Decision in G.R. No. 69866, annulling the RTC orders dated November 8, 1983, May 11, 1984 and September 21, 1984 and ordering the remand of the case to the RTC for further proceedings, the RTC issued an order15 dated August 17, 1990 directing the petitioners to report the addresses and whereabouts of the respondents so that they would be properly notified of the proceedings. This directive was issued by the RTC considering that the respondents counsel of record, the OSG, could no longer represent them and because the respondents were no longer holding official government positions because of a change in government brought about by the 1986 EDSA Revolution. This order was likewise made in response to the motion16 filed by the petitioners praying that the respondents be required to file their answer. Instead of complying with the RTCs directive to report the respondents addresses and whereabouts, the petitioners filed a motion17 dated September 4, 1990 to declare the respondents in default. On December 27, 1990, the RTC denied the petitioners default motion because the respondents were not duly notified of the April 15, 1988 Decision of this Court and the OSG no longer wanted to represent them. The RTC likewise ordered the petitioners to comply with its August 17, 1990 Order, otherwise, the case would be archived and eventually dismissed. On February 1, 1991, the RTC denied the petitioners motion for reconsideration and on March 7, 1991, it issued an order dismissing the case without prejudice. Surprisingly, on June 4, 1991, the RTC issued an order18 setting aside its March 7, 1991 Order and reinstating the case. It directed the petitioners, among others, to cause the publication of a notice on the respondents to file answer or responsive pleading. After the petitioners complied with the publication requirements, the RTC issued the order dated December 5, 1991 declaring the respondents in default and directing the petitioners to present evidence ex-parte. As correctly observed by the CA, the RTCs August 17, 1990 Order was an attempt to serve a notice to file answer on the respondents by personal service and/or by mail. These proper and preferred modes of service, however, were never resorted to because the OSG abandoned them when the petitioners failed to comply with the August 17, 1990 RTC order requiring them to report the addresses and whereabouts of the respondents. Nevertheless, there was still another less preferred but proper mode of service available substituted service - which is service made by delivering the copy to the clerk of court, with proof of failure of both personal service and service by mail. Unfortunately, this substitute mode of service was not resorted to by the RTC after it failed to effect personal service and service by mail. Instead, the RTC authorized an unrecognized mode of service under the Rules, which was service of notice to file answer by publication.

Considering the fact that the OSG could no longer represent the respondents, the RTC should have been more patient in notifying the respondents through personal service and/or service by mail. It should not have simply abandoned the preferred modes of service when the petitioners failed to comply with its August 17, 1990 order with the correct addresses of the respondents. More so, it should not have skipped the substituted service prescribed under the Rules and authorized a service of notice on the respondents to file answer by publication. In view of the peculiar circumstances surrounding the case, the RTC should have instead directed the petitioners to exert diligent efforts to notify the respondents either personally or by registered mail. In case the preferred modes were impractical, the Court should have required the petitioners to at least report in writing why efforts exerted towards personal service or service by mail failed. In other words, a convincing proof of an impossibility of personal service or service by mail to the respondents should have been shown first. The RTC, thus, erred when it ruled that the publication of a notice to file answer to the respondents substantially cured the procedural defect equivalent to lack of due process. The RTC cannot just abandon the basic requirement of personal service and/or service by mail. At any rate, the Court is of the view that personal service to the respondents was practicable under the circumstances considering that they were well-known persons who used to occupy high government positions. To stress, the only modes of service of pleadings, motions, notices, orders, judgments and other papers allowed by the rules are personal service, service by mail and substituted service if either personal service or service by mail cannot be made, as stated in Sections 6, 7 and 8 of Rule 13 of the Rules of Court. Nowhere under this rule is service of notice to file answer by publication is mentioned, much less recognized. Furthermore, the Court would like to point out that service by publication only applies to service of summons stated under Rule 14 of the Rules of Court where the methods of service of summons in civil cases are: (1) personal service;19 (2) substituted service;20 and (3) service by publication.21 Similarly, service by publication can apply to judgments, final orders and resolutions as provided under Section 9, Rule 13 of the Rules of Court, as follows: SEC. 9. Service of judgments, final orders or resolutions. Judgments, final orders or resolutions shall be served either personally or by registered mail. When a party summoned by publication has failed to appear in the action, judgments, final orders or resolutions against him shall be served upon him also by publication at the expense of the prevailing party. [Emphasis supplied] As correctly ruled by the CA:

Its third error was when it authorized service by publication after initially dismissing the case for failure of plaintiffs-appellees to furnish the current address of defendantsappellants. There is, however, nothing in the Rules that authorizes publication of a notice of hearing to file answer. What is authorized to be published are: (1) summons, and (2) final orders and judgments. xxx xxx xxx

Next, the court records got burned during the June 11, 1988 fire that hit the Quezon City Hall where the records were kept. On March 12, 1990, the RTC granted the petitioners petition for reconstitution. Again, the records do not show that the RTC initiated extra efforts to notify the respondents about the reconstitution proceedings. The entire records of this case tend to show that the respondents were completely out of the picture until after the promulgation of the RTC decision. On countless occasions, the Court ruled that, generally, judgments by default are looked upon with disfavor and are frowned upon as contrary to public policy. An example here would be the case of Regalado P. Samartino v. Leonor B. Raon,22 where the Court stated: The trial court should not have been too rash in declaring petitioner in default, considering it had actual notice of valid reasons that prevented him from answering. Well-settled is the rule that courts should be liberal in setting aside orders of default for default judgments are frowned upon, unless in cases where it clearly appears that the reopening of the case is intended for delay. The issuance of orders of default should be the exception rather than the rule, to be allowed only in clear cases of obstinate refusal by the defendant to comply with the orders of the trial court. Suits should as much as possible be decided on the merits and not on technicalities. In this regard, we have often admonished courts to be liberal in setting aside orders of default as default judgments are frowned upon and not looked upon with favor for they may amount to a positive and considerable injustice to the defendant and the possibility of such serious consequences necessitates a careful examination of the grounds upon which the defendant asks that it be set aside. Since rules of procedure are mere tools designed to facilitate the attainment of justice, it is well recognized that this Court is empowered to suspend its operation, or except a particular case from its operation, when the rigid application thereof tends to frustrate rather than promote the ends of justice. We are not unmindful of the fact that during the pendency of the instant petition, the trial court has rendered judgment against petitioners. However, being the court of last resort, we deem it in the best interest that liberality and relaxation of the Rules be extended to petitioners by setting aside the order of default issued by the trial court and the consequent default judgment; otherwise, great injustice would result if petitioners are not afforded an opportunity to prove their claims.1wphi1 Finally, the Court finds unacceptable the petitioners contention that 1) the respondents were well represented by counsel from 1983 up to December 1990 and that the respondents were properly notified of the entire proceedings through their counsel; 2) the respondents counsel was negligent for failing to file an answer within the prescribed period; and 3) the negligence of the OSG binds the respondents. The petitioners do not deny the fact that on May 15, 1985, they filed a petition for certiorari before this Court questioning the RTC orders granting the respondents motion to dismiss and denying their motion for reconsideration. They do not question the fact that while their petition was pending in this Court, the 1986 EDSA Revolution took place which resulted in the removal of the respondents from their respective high government

The above-quoted provision cannot be used to justify the trial courts action in authorizing service by publication. Firstly, what was published was not a final order or judgment but a simple order or notice to file answer. Secondly, even granting that the notice to file answer can be served by publication, it is explicit in the Rule that publication is allowed only if the defendant-appellant was summoned by publication. The record is clear that defendants-appellants were not summoned by publication. On this point, the petitioners argue that the publication was a valid and justified procedure because following the ruling of the RTC, it was "an extra step to safeguard the interest of the defendants done pursuant to the inherent power of the courts to control its proceedings to make them comfortable to law and justice." The petitioners further argue that "the defendants in a civil case cannot seize control of the proceedings or cause them to be suspended indefinitely by the simple expedient of not filing their answers or by feigning ignorance of the proceedings. All these could have been avoided had the defendants not been so inexplicably complacent and utterly lacking in ordinary prudence." The Court is not convinced. As already discussed above, the basic rules on modes of service of pleadings, motions, notices, orders, judgments, and other papers are mandatory in nature and, therefore, must be strictly observed. The Court is not unaware of the inherent power of courts to control its proceedings. Nonetheless, the exercise of such inherent power must not violate basic court procedures. More importantly, it must not disregard ones basic constitutional right to procedural due process. This was precisely the reason for the RTCs denial of the petitioners default motion in its August 17, 1990 Order, and for the eventual dismissal of the case in its December 27, 1990 Order. It must be noted that as the RTC orders stated, the respondents were not notified of the April 15, 1988 Decision of this Court, which ordered the re-opening and remanding of this case to the RTC. They were neither notified of the reconstitution proceedings that took place pertaining to the burned records of the case. The RTC further stated that the respondents were no longer holding their official government positions and that they were no longer represented by the OSG on account of the change in government. In other words, the respondents had no counsel of record and no notice of subsequent proceedings. In short, due process was absent.

offices and the replacement of then Solicitor General Estelito Mendoza (Sol. Gen. Mendoza). There is likewise no dispute that subsequently, on April 15, 1988, this Court rendered its decision annulling the subject RTC orders and remanding the case to the RTC for further proceedings. The case was then re-raffled to another branch. Clearly from the above circumstances, there was no longer any lawyer-client relationship between the OSG and the respondents at the time the decision of the Court dated April 15, 1988 was promulgated because, admittedly, after the 1986 EDSA Revolution, the respondents were no longer occupying their respective government positions and Sol. Gen. Mendoza, who represented them, was no longer the Solicitor General. In fact, in compliance with the RTCs order dated September 10, 1990,23 former Solicitor General Mendoza submitted a manifestation24 that his legal representation for the respondents was deemed terminated when he ceased to be the Solicitor General and that he was not representing the respondents in his private capacity. For his part, on December 11, 1990, the incumbent Solicitor General at that time, Solicitor General Francisco Chavez(Sol. Gen. Chavez), filed a notice of withdrawal of appearance for the respondents citing the case of Urbano v. Chavez,25 where the Court ruled that the OSG is not authorized to represent a public official at any stage of a criminal case or in a civil suit for damages arising from a felony. The records do not show any proof that the respondents were furnished a copy of this notice of withdrawal or whether or not they gave their conformity thereto. Contrary to the petitioners position, while it is true that Sol. Gen. Chavez filed a notice of withdrawal only on December 11, 1990, the respondents were in effect no longer represented by counsel as early as April 15, 1988 when the Courts decision was rendered, or much earlier, right after the 1986 EDSA Revolution due to the change in government. The Court cannot subscribe to the petitioners argument that there was negligence or mistake on the part of the OSG considering that Sol. Gen. Mendoza ceased to hold office due to the EDSA Revolution while Sol. Gen. Chavez withdrew his representation because of the prohibition in Urbano v. Chavez. Definitely, Sol. Gen. Mendozas cessation from holding office and Sol. Gen. Chavezs withdrawal of representation in the unique scenario of this case are not equivalent to professional delinquency or ignorance, incompetency or inexperience or negligence and dereliction of duty. Hence, there is no negligence of counsel in this case. After the 1986 EDSA Revolution, the respondents were practically left without counsel. As a final point, this Court commiserates with the petitioners plight and cry for justice. They should not be denied redress of their grievances. The Court, however, finds Itself unable to grant their plea because the fundamental law clearly provides that no person shall be deprived of life, liberty and property without due process of law. WHEREFORE, the petition is DENIED.

FIRST DIVISION A.M. No. P-07-2333 December 19, 2007

ANONYMOUS, complainant, vs. MA. VICTORIA P. RADAM, Utility Worker, Office of the Clerk of Court, Regional Trial Court of Alaminos City, respondent. CORONA, J.: In an anonymous letter-complaint dated September 30, 2005,1 respondent Ma. Victoria Radam, utility worker in the Office of the Clerk of Court of the Regional Trial Court of Alaminos City in Pangasinan, was charged with immorality. The unnamed complainant alleged that respondent was unmarried but got pregnant and gave birth sometime in October 2005.2 The complainant claimed that respondents behavior tainted the image of the judiciary. In connection with the complaint, Judge Elpidio N. Abella3 conducted a discreet investigation to verify the allegations against respondent. In his report dated March 8, 2006,4 Judge Abella made the following findings: On March 1, 2006, respondent submitted a letter addressed to the Honorable Court Administrator, thru the undersigned, duly subscribed and sworn to before the Clerk of Court VI of the Court, alleging among others, the following: 1) She admitted that she is single/unmarried, and indeed she was pregnant and actually gave birth to a baby boy named Christian Jeon Radam on 03 November 2005 at the Western Pangasinan District Hospital, Alaminos City; 2) The reason why she did not yet marry the father of her child Christian Jeon was that she and the childs father have pending application[s] [to migrate to Canada] as in fact they have [a] mutual plan to remain unmarried [and] 3) Nevertheless, she expressed her remorse and promised not to commit the same mistake and indiscretion in the future. Further investigation reveal[ed] the following: 1) That respondent was appointed as Utility Worker on September 4, 2000;

2) The father of Christian Jeon Radam is unknown, as shown by the childs Certificate of Live Birth, hereto attached;5 3) It was verbally admitted by the respondent that she had given birth to two (2) other children before Christian Jeon, but they were conceived and born while respondent was working abroad and before she was employed in the [Office of the Clerk of Court of the Regional Trial Court of] Alaminos City.6 In this connection, Judge Abella made the following recommendation: Since respondent admitted that she is single and that she got pregnant and gave birth to a baby boy without being married to the father of the child, albeit she advanced the reason for her remaining unmarried, it being that she and her boyfriend had a mutual plan to migrate to Canada, this Investigating Judge considers that such conduct of the respondent fell short of the strict standards of Court personnel and contrary to the Code of Judicial Ethics and the Civil Service Rules. A place in the judiciary demands upright men and women who must carry on with dignity, hence respondent is guilty of disgraceful and immoral conduct which cannot be countenanced by the Court. Certainly, the image of the Judiciary has been affected by such conduct of the respondent. Premises considered, it is hereby respectfully recommended that respondent MA. VICTORIA RADAM be accordingly found GUILTY of IMMORAL CONDUCT or ACT UNBECOMING A COURT EMPLOYEE. A suspension of one (1) month or a fine of Php5,000.00 is respectfully recommended, with warning that a repetition of the same or similar act in the future will be dealt with more severely.7 After reviewing the findings and recommendation of Judge Abella, the Office of the Court Administrator (OCA) recommended that, in accordance with Villanueva v. Milan,8 respondent be absolved of the charge of immorality because her alleged misconduct (that is, giving birth out of wedlock) did not affect the character and nature of her position as a utility worker.9 It observed: [T]here is no indication that the relationship of respondent to her alleged boyfriend has caused prejudice to any person or has adversely affected the performance of her function as utility worker to the detriment of the public service. However, it proposed that she be held liable for conduct unbecoming a court employee and imposed a fine ofP5,000 for stating in the birth certificate of her child Christian Jeon that the father was "unknown" to her.10

The OCA correctly exonerated respondent from the charge of immorality. However, its recommendation to hold her liable for a charge of which she was not previously informed was wrong. For purposes of determining administrative responsibility, giving birth out of wedlock is not per se immoral under civil service laws. For such conduct to warrant disciplinary action, the same must be "grossly immoral," that is, it must be so corrupt and false as to constitute a criminal act or so unprincipled as to be reprehensible to a high degree. 11 In Estrada v. Escritor,12 we emphasized that in determining whether the acts complained of constitute "disgraceful and immoral behavior" under civil service laws, the distinction between public and secular morality on the one hand, and religious morality, on the other should be kept in mind.13 The distinction between public and secular morality as expressed albeit not exclusively in the law, on the one hand, and religious morality, on the other, is important because the jurisdiction of the Court extends only to public and secular morality.14 Thus, government action, including its proscription of immorality as expressed in criminal law like adultery or concubinage, must have a secular purpose.15 For a particular conduct to constitute "disgraceful and immoral" behavior under civil service laws, it must be regulated on account of the concerns of public and secular morality. It cannot be judged based on personal bias, specifically those colored by particular mores. Nor should it be grounded on "cultural" values not convincingly demonstrated to have been recognized in the realm of public policy expressed in the Constitution and the laws.16At the same time, the constitutionally guaranteed rights (such as the right to privacy) should be observed to the extent that they protect behavior that may be frowned upon by the majority.17 Under these tests, two things may be concluded from the fact that an unmarried woman gives birth out of wedlock: (1) if the father of the child is himself unmarried, the woman is not ordinarily administratively liable for disgraceful and immoral conduct.18 It may be a notso-ideal situation and may cause complications for both mother and child but it does not give cause for administrative sanction. There is no law which penalizes an unmarried mother under those circumstances by reason of her sexual conduct or proscribes the consensual sexual activity between two unmarried persons. Neither does the situation contravene any fundamental state policy as expressed in the Constitution, a document that accommodates various belief systems irrespective of dogmatic origins.19 (2) if the father of the child born out of wedlock is himself married to a woman other than the mother, then there is a cause for administrative sanction against either the father or the mother.20 In such a case, the "disgraceful and immoral conduct" consists of having extramarital relations with a married person.21 The sanctity of marriage is constitutionally recognized22 and likewise affirmed by

our statutes as a special contract of permanent union.23 Accordingly, judicial employees have been sanctioned for their dalliances with married persons or for their own betrayals of the marital vow of fidelity. In this case, it was not disputed that, like respondent, the father of her child was unmarried. Therefore, respondent cannot be held liable for disgraceful and immoral conduct simply because she gave birth to the child Christian Jeon out of wedlock. Respondent was indicted only for alleged immorality for giving birth out of wedlock. It was the only charge of which she was informed. Judge Abellas investigation focused solely on that matter. Thus, the recommendation of the OCA that she be held administratively liable in connection with an entry in the birth certificate of Christian Jeon came like a thief in the night. It was unwarranted. Respondent was neither confronted with it nor given the chance to explain it. To hold her liable for a totally different charge of which she was totally unaware will violate her right to due process. The essence of due process in an administrative proceeding is the opportunity to explain ones side, whether written or verbal.24 This presupposes that one has been previously apprised of the accusation against him or her. Here, respondent was deprived of both with regard to her alleged unbecoming conduct in relation to a certain statement in the birth certificate of her child. An employee must be informed of the charges proferred against him, and the normal way by which the employee is so informed is by furnishing him with a copy of the charges against him. This is a basic procedural requirement that cannot [be] dispense[d] with and still remain consistent with the constitutional provision on due process. The second minimum requirement is that the employee charged with some misfeasance or malfeasance must have a reasonable opportunity to present his side of the matter, that is to say, his defenses against the charges levelled against him and to present evidence in support of his defense(s).25 Ones employment is not merely a specie of property rights. It is also the means by which he and those who depend on him live.26 It is therefore protected by the guarantee of security of tenure. And in the civil service, this means that no government employee may be removed, suspended or disciplined unless for cause provided by law27 and after due process. Unless the constitutional guarantee of due process is a mere platitude, it is the Courts duty to insist on its observance in all cases involving a deprivation, denigration or dilution of ones right to life, liberty and property. WHEREFORE, the administrative complaint against respondent Ma. Victoria P. Radam is hereby DISMISSED. She is, however, strongly advised to be more circumspect in her personal and official actuations in the future. JUDGE

THIRD DIVISION

[G.R. No. 149617. September 3, 2003]

MARIANO JOAQUIN MACIAS, respondent.

S.

MACIAS, petitioner,

vs. MARGIE

CORPUS

DECISION SANDOVAL-GUTIERREZ, J.: Due process is the very essence of justice itself. Where the rule of law is the bedrock of our free society, justice is its very lifeblood. Denial of due process is thus no less than a denial of justice.[1] Before us is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Decision[2] dated July 13, 2001 and the Resolution[3] dated August 30, 2001, both rendered by the Court of Appeals in CA-G.R. SP No. 64733, Margie Corpus Macias vs. Hon. Wilfredo G. Ochotorena and Hon. Judge Mariano Joaquin S. Macias. The factual antecedents as borne by the records are: On February 6, 2001, Judge Mariano Joaquin S. Macias (herein petitioner) filed with the Regional Trial Court, Branch 11, Sindangan, Zamboanga del Norte, a petition for declaration of nullity of marriage against Margie Corpus Macias (herein respondent), docketed as Civil Case No. S-695. The sheriff exerted earnest efforts to personally serve copies of the summons and complaint upon the respondent, but to no avail. Hence, the trial court, upon petitioners motion, issued an Order dated March 7, 2001 directing that summons be effected by publication in a newspaper of general circulation in the province of Zamboanga del Norte and the twin cities of Dapitan and Dipolog and thereafter requiring the respondent to file her answer within a period of thirty (30) days from notice. Subsequently, the summons and complaint were published in the March 11 to 17, 2001 issues of the Dipolog-based newspaper Tingog Peninsula. Instead of filing an answer, respondent, through counsel, on April 10, 2001, filed a motion to dismiss the petition on the following grounds: (1) the cause of action is barred by the statute of limitations; (2) the trial court has no jurisdiction because it is not among those designated to act as a family court under Resolution A.M. No. 99-11-07-SC; and (3) the parties failed to resort to barangay conciliation prior to the filing of the petition.

On April 19, 2001, the trial court issued an Order denying respondents motion to dismiss. Incidentally, in the same Order, the trial court granted respondents request (via long distance telephone call) to set the hearing on April 30, 2001. The hearing set on April 30, 2001 was cancelled for failure of respondent and counsel as well as the expert witness to appear. On the same day, the trial court issued an Order setting the hearing anew on May 2 and 3, 2001. Respondent received a copy of this Order only on May 8, 2001. Thus, when the case was called for hearing as scheduled, respondent and counsel, not being duly notified, did not appear. Surprisingly, the trial court allowed the petitioner to present his evidence ex parte. After the petitioner rested his case, the trial court issued an Order dated May 3, 2001 (1) directing the public prosecutor to submit a Certification containing his assent or opposition to the petition; (2) directing the petitioner and the public prosecutor to submit their respective memoranda within a non-extendible period of ten (10) days; and (3) declaring the case submitted for decision. On May 5, 2001, respondent still unaware that the case had been submitted for decision, filed a motion for reconsideration of the Order dated April 19, 2001 denying her motion to dismiss. The trial court merely noted the motion for reconsideration in his Order dated May 16, 2001. Consequently, on May 18, 2001, respondent filed with the Court of Appeals a petition for certiorari with prayer for issuance of a temporary restraining order and/or a writ of preliminary injunction challenging the trial courts Order dated April 19, 2001 which denied her motion to dismiss; and Order dated April 30, 2001 cancelling the April 30, 2001 hearing and resetting it on May 2 and 3, 2001. Acting thereon, the Court of Appeals, in a Resolution dated May 23, 2001, enjoined the trial court from conducting further proceedings in Civil Case No. S-695. Meanwhile, on May 15, 2001 or barely twelve (12) days from submission of the case for decision, the trial court rendered its Decision declaring the nullity of the marriage between the parties on the ground of psychological incapacity on the part of herein respondent. Thereupon, she filed a motion for reconsideration. This motion has not been acted upon. Meantime, on July 13, 2001, the Court of Appeals rendered a Decision granting respondents petition for certiorari, thus: The issue that now comes to fore is whether or not the Petitioner was deprived, by the Respondent Court, of her right to due process enshrined in Article III, Section 1 of the 1987 Constitution, via its Orders, Annexes L and O of the Petition, and its Decision. xxx xxx xxx

the antecedental milieu in the present recourse, We are convinced, beyond cavil, that either the Respondent Court was ignorant of the basic rudiments of Civil Procedure or if he was aware of said Rules as he should, he simply ignored the same, ran roughshod over the rights of the Petitioner, railroaded the hearing of the case and rendered judgment even before the Petitioner had the opportunity to defend herself and adduce her evidence. xxx xxx xxx

There is no evidence on record when the Petitioner was served with the complaint and summons by registered mail. However, the Petitioner learned of the complaint and summons about the first week of April, 2001 on the basis of the March 11-17, 2001 issue of the Tingog Peninsula. Even if the thirty-day period fixed by the Respondent Court was reckoned from the March 11-17, 2001 issue of the Tingog Peninsula, the Petitioner had until April 16, 2001 within which to file a Motion to Dismiss under Section 1, Rule 16 of the 1997 Rules of Civil Procedure or file an Answer to the complaint. However, she opted to file, on April 10, 2001, a Motion to Dismiss, instead of filing an Answer to the complaint. The filing of said motion suspended the period for her to file her Answer to the complaint. Until said motion is resolved by the Respondent Court with finality, it behooved the Respondent Court to suspend the hearings of the case on the merits. The Respondent Court, on April 19, 2001, issued its Order denying the Motion to Dismiss of the Petitioner. Under Section 6, Rule 16 of the 1997 Rules of Civil Procedure, the Petitioner had the balance of the period provided for in Rule 11 of the said Rules but in no case less than five (5) days computed from service on her of the aforesaid Order of the Respondent Court within which to file her Answer to the complaint: xxx xxx xxx

The Petitioner may file a Motion for Reconsideration of said Order conformably with Section 5, Rule 135 of the Rules of Court. Until then, a hearing of the case on its merits is impermissible and a travesty. However, even before the Petitioner could be served with a copy of the order of the Respondent Court (Annex L of the Petition) denying her Motion to Dismiss, the Respondent Court proceeded with the hearing of the case on its merits and received the evidence of the Private Respondent on May 2 and 3, 2001. As it was, Petitioner, through counsel, received only on May 3, 2001 the Order of the Respondent Court (Annex L of the Petition) denying her Motion to Dismiss and, on May 5, 2001, the Petitioner filed a Motion for Reconsideration of the Order of the Respondent Court, dated April 19, 2001. What is so trite is that the Respondent Court violated its own Order dated February 27, 2001, declaring that the hearing of the case on its merits will ensue only after the Petitioner shall have filed her Answer to the complaint.

In the present recourse, the hearings of the complaint of the Private Respondent, on its merits, before the issues were joined was a farce, a blatant transgression by the Respondents of the fundamental right of the Petitioner to due process. Taking stock of

Equally worrisome is the fact that the Petitioner reminded the Respondent Court, in her Manifestation and Motion, dated April 18, 2001, that the case was not ripe for hearing on its merits and prayed that the hearing of the case on its merits be suspended until after final resolution by the Respondent Court of her Motion to Dismiss: xxx xxx xxx

This Court will not countenance a denial of ones fundamental right to due process, which is a cornerstone of our legal system.[4] In the case at bar, the trial court did not observe the rudimentary principle of due process enshrined in our Constitution. Neither did it comply with pertinent procedural rules. More to the point, the trial court, without even waiting for respondents motion for reconsideration of the April 19, 2001 Order denying her motion to dismiss, hurriedly set the case for hearing. Also, without allowing the respondent to file her answer to the petition and knowing there was no joinder of issues as yet, the trial court hastily authorized petitioner to present his evidence ex-parte. Pursuant to Section 3 (e), Rule 9 of the 1997 Rules of Civil Procedure, as amended, where the defending party fails to file his or her answer to the petition, the trial court should order the prosecutor to intervene for the State by conducting an investigation to determine whether or not there was collusion between the parties. Here, the trial court disregarded such procedure. Obviously, the summary proceeding is a patent nullity. And assuming arguendo that there was an answer filed by the respondent, still, the hearing of the case on May 2 and 3, 2001 is a procedural flaw. As stated at the outset, respondent received the notice of hearing only on May 8, 2001. So how could she be present in court on May 2 and 3? We are convinced that respondents fundamental right to due process was blatantly transgressed by the trial court. And resultantly, the proceedings conducted, including the trial courts Decision, are void for lack of due process. We have consistently held that a denial of due process suffices to cast on the official act taken by whatever branch of the government the impress of nullity. [5] In Uy vs. Court of Appeals, we ruled that (a) decision is void for lack of due process if, as a result, a party (as in this case) is deprived of the opportunity of being heard. A void decision may be assailed or impugned at any time either directly or collaterally, by means of a separate action, or by resisting such decision in any action or proceeding where it is invoked.[6] Indeed, in depriving respondent her constitutional and procedural right to due process, the trial court gravely abused its discretion. It is, therefore, imperative that the instant case for declaration of nullity of marriage be litigated anew in accordance with the Rules. WHEREFORE, the petition is DENIED. The assailed Decision dated July 13, 2001 and Resolution dated August 30, 2001 of the Court of Appeals are hereby AFFIRMED.

Even if the Petitioner failed to file her Answer to the complaint, after the period therefor had lapsed, the Respondent Court was not authorized to conduct a hearing of the case on its merits. This is so because Section 3 (e), Rule 9 of the 1997 Rules of Civil Procedure specifically provides that: (c) Where no defaults allowed. If the defending party in an action for annulment or declaration of nullity of marriage or for legal separation fails to answer, the court shall order the prosecuting attorney to investigate whether or not a collusion between the parties exists, and if there is no collusion, to intervene for the State in order to see to it that the evidence submitted is not fabricated. (idem, supra.) The Report of the Public Prosecutor is a condition sine qua non to further proceedings of the case on its merits. The Respondent Court ignored the aforequoted Rule. It bears stressing that the Petitioner had already filed her Motion to Dismiss and, hence, can be notified by the Public Prosecutor of his investigation. xxx xxx xxx

IN LIGHT OF ALL THE FOREGOING, the Petition is GIVEN DUE COURSE and GRANTED. The hearings of the case on the merits on May 2 and 3, 2001, including the Decision of the Respondent Court, are NULLIFIED. The Respondent Court is hereby ordered to resolve the Motion for Reconsideration of the Petitioner dated May 5, 2001, after the Private Respondent shall have filed his Comment or Opposition to said motion and, thereafter, to proceed with the case as provided for by the Rules of Court. SO ORDERED. From the said Decision, petitioner filed a motion for reconsideration, but it was denied. Hence, this petition for review on certiorari. Petitioner vehemently asserts that the Court of Appeals seriously erred in holding that the trial court deprived respondent of her right to due process; and in nullifying, not only the May 2 and 3, 2001 hearings, but also the trial courts Decision dated May 15, 2001. We agree with the Court of Appeals.

EN BANC G.R. No. 158693 November 17, 2004

JENNY M. AGABON and VIRGILIO C. AGABON, petitioners, vs. NATIONAL LABOR RELATIONS COMMISSION (NLRC), RIVIERA HOME IMPROVEMENTS, INC. and VICENTE ANGELES, respondents.

Respondent is further ordered to pay the complainants their holiday pay and service incentive leave pay for the years 1996, 1997 and 1998 as well as their premium pay for holidays and rest days and Virgilio Agabon's 13th month pay differential amounting to TWO THOUSAND ONE HUNDRED FIFTY (P2,150.00) Pesos, or the aggregate amount of ONE HUNDRED TWENTY ONE THOUSAND SIX HUNDRED SEVENTY EIGHT & 93/100 (P121,678.93) Pesos for Jenny Agabon, and ONE HUNDRED TWENTY THREE THOUSAND EIGHT HUNDRED TWENTY EIGHT & 93/100 (P123,828.93) Pesos for Virgilio Agabon, as per attached computation of Julieta C. Nicolas, OIC, Research and Computation Unit, NCR. SO ORDERED.4

DECISION

On appeal, the NLRC reversed the Labor Arbiter because it found that the petitioners had abandoned their work, and were not entitled to backwages and separation pay. The other money claims awarded by the Labor Arbiter were also denied for lack of evidence.5 Upon denial of their motion for reconsideration, petitioners filed a petition for certiorari with the Court of Appeals. The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment but ordered the payment of money claims. The dispositive portion of the decision reads: WHEREFORE, the decision of the National Labor Relations Commission is REVERSED only insofar as it dismissed petitioner's money claims. Private respondents are ordered to pay petitioners holiday pay for four (4) regular holidays in 1996, 1997, and 1998, as well as their service incentive leave pay for said years, and to pay the balance of petitioner Virgilio Agabon's 13th month pay for 1998 in the amount of P2,150.00. SO ORDERED.6 Hence, this petition for review on the sole issue of whether petitioners were illegally dismissed.7 Petitioners assert that they were dismissed because the private respondent refused to give them assignments unless they agreed to work on a "pakyaw" basis when they reported for duty on February 23, 1999. They did not agree on this arrangement because it would mean losing benefits as Social Security System (SSS) members. Petitioners also claim that private respondent did not comply with the twin requirements of notice and hearing.8

YNARES-SANTIAGO, J.: This petition for review seeks to reverse the decision1 of the Court of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, modifying the decision of National Labor Relations Commission (NLRC) in NLRC-NCR Case No. 023442-00. Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction materials. It employed petitioners Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 19922 until February 23, 1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal and payment of money claims3 and on December 28, 1999, the Labor Arbiter rendered a decision declaring the dismissals illegal and ordered private respondent to pay the monetary claims. The dispositive portion of the decision states: WHEREFORE, premises considered, We find the termination of the complainants illegal. Accordingly, respondent is hereby ordered to pay them their backwages up to November 29, 1999 in the sum of: 1. Jenny M. Agabon - P56, 231.93 2. Virgilio C. Agabon - 56, 231.93 and, in lieu of reinstatement to pay them their separation pay of one (1) month for every year of service from date of hiring up to November 29, 1999.

Private respondent, on the other hand, maintained that petitioners were not dismissed but had abandoned their work.9 In fact, private respondent sent two letters to the last known addresses of the petitioners advising them to report for work. Private respondent's manager even talked to petitioner Virgilio Agabon by telephone sometime in June 1999 to tell him about the new assignment at Pacific Plaza Towers involving 40,000 square meters of cornice installation work. However, petitioners did not report for work because they had subcontracted to perform installation work for another company. Petitioners also demanded for an increase in their wage to P280.00 per day. When this was not granted, petitioners stopped reporting for work and filed the illegal dismissal case.10 It is well-settled that findings of fact of quasi-judicial agencies like the NLRC are accorded not only respect but even finality if the findings are supported by substantial evidence. This is especially so when such findings were affirmed by the Court of Appeals.11 However, if the factual findings of the NLRC and the Labor Arbiter are conflicting, as in this case, the reviewing court may delve into the records and examine for itself the questioned findings.12 Accordingly, the Court of Appeals, after a careful review of the facts, ruled that petitioners' dismissal was for a just cause. They had abandoned their employment and were already working for another employer. To dismiss an employee, the law requires not only the existence of a just and valid cause but also enjoins the employer to give the employee the opportunity to be heard and to defend himself.13 Article 282 of the Labor Code enumerates the just causes for termination by the employer: (a) serious misconduct or willful disobedience by the employee of the lawful orders of his employer or the latter's representative in connection with the employee's work; (b) gross and habitual neglect by the employee of his duties; (c) fraud or willful breach by the employee of the trust reposed in him by his employer or his duly authorized representative; (d) commission of a crime or offense by the employee against the person of his employer or any immediate member of his family or his duly authorized representative; and (e) other causes analogous to the foregoing. Abandonment is the deliberate and unjustified refusal of an employee to resume his employment.14 It is a form of neglect of duty, hence, a just cause for termination of employment by the employer.15 For a valid finding of abandonment, these two factors should be present: (1) the failure to report for work or absence without valid or justifiable reason; and (2) a clear intention to sever employer-employee relationship, with the second as the more determinative factor which is manifested by overt acts from which it may be deduced that the employees has no more intention to work. The intent to discontinue the employment must be shown by clear proof that it was deliberate and unjustified.16 In February 1999, petitioners were frequently absent having subcontracted for an installation work for another company. Subcontracting for another company clearly showed the intention to sever the employer-employee relationship with private

respondent. This was not the first time they did this. In January 1996, they did not report for work because they were working for another company. Private respondent at that time warned petitioners that they would be dismissed if this happened again. Petitioners disregarded the warning and exhibited a clear intention to sever their employeremployee relationship. The record of an employee is a relevant consideration in determining the penalty that should be meted out to him.17 In Sandoval Shipyard v. Clave,18 we held that an employee who deliberately absented from work without leave or permission from his employer, for the purpose of looking for a job elsewhere, is considered to have abandoned his job. We should apply that rule with more reason here where petitioners were absent because they were already working in another company. The law imposes many obligations on the employer such as providing just compensation to workers, observance of the procedural requirements of notice and hearing in the termination of employment. On the other hand, the law also recognizes the right of the employer to expect from its workers not only good performance, adequate work and diligence, but also good conduct19 and loyalty. The employer may not be compelled to continue to employ such persons whose continuance in the service will patently be inimical to his interests.20 After establishing that the terminations were for a just and valid cause, we now determine if the procedures for dismissal were observed. The procedure for terminating an employee is found in Book VI, Rule I, Section 2(d) of the Omnibus Rules Implementing the Labor Code: Standards of due process: requirements of notice. In all cases of termination of employment, the following standards of due process shall be substantially observed: I. For termination of employment based on just causes as defined in Article 282 of the Code: (a) A written notice served on the employee specifying the ground or grounds for termination, and giving to said employee reasonable opportunity within which to explain his side; (b) A hearing or conference during which the employee concerned, with the assistance of counsel if the employee so desires, is given opportunity to respond to the charge, present his evidence or rebut the evidence presented against him; and

(c) A written notice of termination served on the employee indicating that upon due consideration of all the circumstances, grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on the employee's last known address. Dismissals based on just causes contemplate acts or omissions attributable to the employee while dismissals based on authorized causes involve grounds under the Labor Code which allow the employer to terminate employees. A termination for an authorized cause requires payment of separation pay. When the termination of employment is declared illegal, reinstatement and full backwages are mandated under Article 279. If reinstatement is no longer possible where the dismissal was unjust, separation pay may be granted. Procedurally, (1) if the dismissal is based on a just cause under Article 282, the employer must give the employee two written notices and a hearing or opportunity to be heard if requested by the employee before terminating the employment: a notice specifying the grounds for which dismissal is sought a hearing or an opportunity to be heard and after hearing or opportunity to be heard, a notice of the decision to dismiss; and (2) if the dismissal is based on authorized causes under Articles 283 and 284, the employer must give the employee and the Department of Labor and Employment written notices 30 days prior to the effectivity of his separation. From the foregoing rules four possible situations may be derived: (1) the dismissal is for a just cause under Article 282 of the Labor Code, for an authorized cause under Article 283, or for health reasons under Article 284, and due process was observed; (2) the dismissal is without just or authorized cause but due process was observed; (3) the dismissal is without just or authorized cause and there was no due process; and (4) the dismissal is for just or authorized cause but due process was not observed. In the first situation, the dismissal is undoubtedly valid and the employer will not suffer any liability. In the second and third situations where the dismissals are illegal, Article 279 mandates that the employee is entitled to reinstatement without loss of seniority rights and other privileges and full backwages, inclusive of allowances, and other benefits or their monetary equivalent computed from the time the compensation was not paid up to the time of actual reinstatement. In the fourth situation, the dismissal should be upheld. While the procedural infirmity cannot be cured, it should not invalidate the dismissal. However, the employer should be held liable for non-compliance with the procedural requirements of due process.

The present case squarely falls under the fourth situation. The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employee's last known address.21 Thus, it should be held liable for non-compliance with the procedural requirements of due process. A review and re-examination of the relevant legal principles is appropriate and timely to clarify the various rulings on employment termination in the light of Serrano v. National Labor Relations Commission.22 Prior to 1989, the rule was that a dismissal or termination is illegal if the employee was not given any notice. In the 1989 case of Wenphil Corp. v. National Labor Relations Commission,23 we reversed this long-standing rule and held that the dismissed employee, although not given any notice and hearing, was not entitled to reinstatement and backwages because the dismissal was for grave misconduct and insubordination, a just ground for termination under Article 282. The employee had a violent temper and caused trouble during office hours, defying superiors who tried to pacify him. We concluded that reinstating the employee and awarding backwages "may encourage him to do even worse and will render a mockery of the rules of discipline that employees are required to observe."24 We further held that: Under the circumstances, the dismissal of the private respondent for just cause should be maintained. He has no right to return to his former employment. However, the petitioner must nevertheless be held to account for failure to extend to private respondent his right to an investigation before causing his dismissal. The rule is explicit as above discussed. The dismissal of an employee must be for just or authorized cause and after due process. Petitioner committed an infraction of the second requirement. Thus, it must be imposed a sanction for its failure to give a formal notice and conduct an investigation as required by law before dismissing petitioner from employment. Considering the circumstances of this case petitioner must indemnify the private respondent the amount of P1,000.00. The measure of this award depends on the facts of each case and the gravity of the omission committed by the employer.25 The rule thus evolved: where the employer had a valid reason to dismiss an employee but did not follow the due process requirement, the dismissal may be upheld but the employer will be penalized to pay an indemnity to the employee. This became known as the Wenphil or Belated Due Process Rule. On January 27, 2000, in Serrano, the rule on the extent of the sanction was changed. We held that the violation by the employer of the notice requirement in termination for just

or authorized causes was not a denial of due process that will nullify the termination. However, the dismissal is ineffectual and the employer must pay full backwages from the time of termination until it is judicially declared that the dismissal was for a just or authorized cause. The rationale for the re-examination of the Wenphil doctrine in Serrano was the significant number of cases involving dismissals without requisite notices. We concluded that the imposition of penalty by way of damages for violation of the notice requirement was not serving as a deterrent. Hence, we now required payment of full backwages from the time of dismissal until the time the Court finds the dismissal was for a just or authorized cause. Serrano was confronting the practice of employers to "dismiss now and pay later" by imposing full backwages. We believe, however, that the ruling in Serrano did not consider the full meaning of Article 279 of the Labor Code which states: ART. 279. Security of Tenure. In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. This means that the termination is illegal only if it is not for any of the justified or authorized causes provided by law. Payment of backwages and other benefits, including reinstatement, is justified only if the employee was unjustly dismissed. The fact that the Serrano ruling can cause unfairness and injustice which elicited strong dissent has prompted us to revisit the doctrine. To be sure, the Due Process Clause in Article III, Section 1 of the Constitution embodies a system of rights based on moral principles so deeply imbedded in the traditions and feelings of our people as to be deemed fundamental to a civilized society as conceived by our entire history. Due process is that which comports with the deepest notions of what is fair and right and just.26 It is a constitutional restraint on the legislative as well as on the executive and judicial powers of the government provided by the Bill of Rights. Due process under the Labor Code, like Constitutional due process, has two aspects: substantive, i.e., the valid and authorized causes of employment termination under the Labor Code; and procedural, i.e., the manner of dismissal. Procedural due process requirements for dismissal are found in the Implementing Rules of P.D. 442, as amended,

otherwise known as the Labor Code of the Philippines in Book VI, Rule I, Sec. 2, as amended by Department Order Nos. 9 and 10.27 Breaches of these due process requirements violate the Labor Code. Therefore statutory due process should be differentiated from failure to comply with constitutional due process. Constitutional due process protects the individual from the government and assures him of his rights in criminal, civil or administrative proceedings; while statutory due process found in the Labor Code and Implementing Rules protects employees from being unjustly terminated without just cause after notice and hearing. In Sebuguero v. National Labor Relations Commission,28 the dismissal was for a just and valid cause but the employee was not accorded due process. The dismissal was upheld by the Court but the employer was sanctioned. The sanction should be in the nature of indemnification or penalty, and depends on the facts of each case and the gravity of the omission committed by the employer. In Nath v. National Labor Relations Commission,29 it was ruled that even if the employee was not given due process, the failure did not operate to eradicate the just causes for dismissal. The dismissal being for just cause,albeit without due process, did not entitle the employee to reinstatement, backwages, damages and attorney's fees. Mr. Justice Jose C. Vitug, in his separate opinion in MGG Marine Services, Inc. v. National Labor Relations Commission,30 which opinion he reiterated in Serrano, stated: C. Where there is just cause for dismissal but due process has not been properly observed by an employer, it would not be right to order either the reinstatement of the dismissed employee or the payment of backwages to him. In failing, however, to comply with the procedure prescribed by law in terminating the services of the employee, the employer must be deemed to have opted or, in any case, should be made liable, for the payment of separation pay. It might be pointed out that the notice to be given and the hearing to be conducted generally constitute the two-part due process requirement of law to be accorded to the employee by the employer. Nevertheless, peculiar circumstances might obtain in certain situations where to undertake the above steps would be no more than a useless formality and where, accordingly, it would not be imprudent to apply the res ipsa loquitur rule and award, in lieu of separation pay, nominal damages to the employee. x x x.31 After carefully analyzing the consequences of the divergent doctrines in the law on employment termination, we believe that in cases involving dismissals for cause but without observance of the twin requirements of notice and hearing, the better rule is to abandon the Serrano doctrine and to follow Wenphil by holding that the dismissal was for just cause but imposing sanctions on the employer. Such sanctions, however, must be stiffer than that imposed in Wenphil. By doing so, this Court would be able to achieve a fair result by dispensing justice not just to employees, but to employers as well.

The unfairness of declaring illegal or ineffectual dismissals for valid or authorized causes but not complying with statutory due process may have far-reaching consequences. This would encourage frivolous suits, where even the most notorious violators of company policy are rewarded by invoking due process. This also creates absurd situations where there is a just or authorized cause for dismissal but a procedural infirmity invalidates the termination. Let us take for example a case where the employee is caught stealing or threatens the lives of his co-employees or has become a criminal, who has fled and cannot be found, or where serious business losses demand that operations be ceased in less than a month. Invalidating the dismissal would not serve public interest. It could also discourage investments that can generate employment in the local economy. The constitutional policy to provide full protection to labor is not meant to be a sword to oppress employers. The commitment of this Court to the cause of labor does not prevent us from sustaining the employer when it is in the right, as in this case.32 Certainly, an employer should not be compelled to pay employees for work not actually performed and in fact abandoned. The employer should not be compelled to continue employing a person who is admittedly guilty of misfeasance or malfeasance and whose continued employment is patently inimical to the employer. The law protecting the rights of the laborer authorizes neither oppression nor self-destruction of the employer.33 It must be stressed that in the present case, the petitioners committed a grave offense, i.e., abandonment, which, if the requirements of due process were complied with, would undoubtedly result in a valid dismissal. An employee who is clearly guilty of conduct violative of Article 282 should not be protected by the Social Justice Clause of the Constitution. Social justice, as the term suggests, should be used only to correct an injustice. As the eminent Justice Jose P. Laurel observed, social justice must be founded on the recognition of the necessity of interdependence among diverse units of a society and of the protection that should be equally and evenly extended to all groups as a combined force in our social and economic life, consistent with the fundamental and paramount objective of the state of promoting the health, comfort, and quiet of all persons, and of bringing about "the greatest good to the greatest number."34 This is not to say that the Court was wrong when it ruled the way it did in Wenphil, Serrano and related cases. Social justice is not based on rigid formulas set in stone. It has to allow for changing times and circumstances. Justice Isagani Cruz strongly asserts the need to apply a balanced approach to labormanagement relations and dispense justice with an even hand in every case:

We have repeatedly stressed that social justice or any justice for that matter is for the deserving, whether he be a millionaire in his mansion or a pauper in his hovel. It is true that, in case of reasonable doubt, we are to tilt the balance in favor of the poor to whom the Constitution fittingly extends its sympathy and compassion. But never is it justified to give preference to the poor simply because they are poor, or reject the rich simply because they are rich, for justice must always be served for the poor and the rich alike, according to the mandate of the law.35 Justice in every case should only be for the deserving party. It should not be presumed that every case of illegal dismissal would automatically be decided in favor of labor, as management has rights that should be fully respected and enforced by this Court. As interdependent and indispensable partners in nation-building, labor and management need each other to foster productivity and economic growth; hence, the need to weigh and balance the rights and welfare of both the employee and employer. Where the dismissal is for a just cause, as in the instant case, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights, as ruled in Reta v. National Labor Relations Commission.36 The indemnity to be imposed should be stiffer to discourage the abhorrent practice of "dismiss now, pay later," which we sought to deter in the Serrano ruling. The sanction should be in the nature of indemnification or penalty and should depend on the facts of each case, taking into special consideration the gravity of the due process violation of the employer. Under the Civil Code, nominal damages is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered by him.37 As enunciated by this Court in Viernes v. National Labor Relations Commissions,38 an employer is liable to pay indemnity in the form of nominal damages to an employee who has been dismissed if, in effecting such dismissal, the employer fails to comply with the requirements of due process. The Court, after considering the circumstances therein, fixed the indemnity at P2,590.50, which was equivalent to the employee's one month salary. This indemnity is intended not to penalize the employer but to vindicate or recognize the employee's right to statutory due process which was violated by the employer.39 The violation of the petitioners' right to statutory due process by the private respondent warrants the payment of indemnity in the form of nominal damages. The amount of such damages is addressed to the sound discretion of the court, taking into account the relevant circumstances.40 Considering the prevailing circumstances in the case at bar, we deem it proper to fix it at P30,000.00. We believe this form of damages would serve to deter employers from future violations of the statutory due process rights of employees. At the very least, it provides a vindication or recognition of this fundamental right granted to the latter under the Labor Code and its Implementing Rules.

Private respondent claims that the Court of Appeals erred in holding that it failed to pay petitioners' holiday pay, service incentive leave pay and 13th month pay. We are not persuaded. We affirm the ruling of the appellate court on petitioners' money claims. Private respondent is liable for petitioners' holiday pay, service incentive leave pay and 13th month pay without deductions. As a general rule, one who pleads payment has the burden of proving it. Even where the employee must allege non-payment, the general rule is that the burden rests on the employer to prove payment, rather than on the employee to prove non-payment. The reason for the rule is that the pertinent personnel files, payrolls, records, remittances and other similar documents which will show that overtime, differentials, service incentive leave and other claims of workers have been paid are not in the possession of the worker but in the custody and absolute control of the employer.41 In the case at bar, if private respondent indeed paid petitioners' holiday pay and service incentive leave pay, it could have easily presented documentary proofs of such monetary benefits to disprove the claims of the petitioners. But it did not, except with respect to the 13th month pay wherein it presented cash vouchers showing payments of the benefit in the years disputed.42 Allegations by private respondent that it does not operate during holidays and that it allows its employees 10 days leave with pay, other than being selfserving, do not constitute proof of payment. Consequently, it failed to discharge the onus probandi thereby making it liable for such claims to the petitioners. Anent the deduction of SSS loan and the value of the shoes from petitioner Virgilio Agabon's 13th month pay, we find the same to be unauthorized. The evident intention of Presidential Decree No. 851 is to grant an additional income in the form of the 13th month pay to employees not already receiving the same 43 so as "to further protect the level of real wages from the ravages of world-wide inflation."44 Clearly, as additional income, the 13th month pay is included in the definition of wage under Article 97(f) of the Labor Code, to wit: (f) "Wage" paid to any employee shall mean the remuneration or earnings, however designated, capable of being expressed in terms of money whether fixed or ascertained on a time, task, piece , or commission basis, or other method of calculating the same, which is payable by an employer to an employee under a written or unwritten contract of employment for work done or to be done, or for services rendered or to be rendered and includes the fair and reasonable value, as determined by the Secretary of Labor, of board, lodging, or other facilities customarily furnished by the employer to the employee"

from which an employer is prohibited under Article 113 45 of the same Code from making any deductions without the employee's knowledge and consent. In the instant case, private respondent failed to show that the deduction of the SSS loan and the value of the shoes from petitioner Virgilio Agabon's 13th month pay was authorized by the latter. The lack of authority to deduct is further bolstered by the fact that petitioner Virgilio Agabon included the same as one of his money claims against private respondent. The Court of Appeals properly reinstated the monetary claims awarded by the Labor Arbiter ordering the private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio Agabon's thirteenth month pay for 1998 in the amount of P2,150.00. WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals dated January 23, 2003, in CA-G.R. SP No. 63017, finding that petitioners' Jenny and Virgilio Agabon abandoned their work, and ordering private respondent to pay each of the petitioners holiday pay for four regular holidays from 1996 to 1998, in the amount of P6,520.00, service incentive leave pay for the same period in the amount of P3,255.00 and the balance of Virgilio Agabon's thirteenth month pay for 1998 in the amount of P2,150.00 isAFFIRMED with the MODIFICATION that private respondent Riviera Home Improvements, Inc. is furtherORDERED to pay each of the petitioners the amount of P30,000.00 as nominal damages for non-compliance with statutory due process. AGABON VS. NATIONAL LABOR RELATIONS COMMISSION Facts: Private respondent Riviera Home Improvements, Inc. is engaged in the business of selling and installing ornamental and construction materials. It employed petitioner Virgilio Agabon and Jenny Agabon as gypsum board and cornice installers on January 2, 1992 until February 23, 1999 when they were dismissed for abandonment of work. Petitioners then filed a complaint for illegal dismissal. The Labor Arbiter rendered a decision declaring the dismissal illegal. On appeal, the NLRC reversed the decision because it found that the petitioners had abandoned their work and were not entitled to backwages and separation pay. The Court of Appeals in turn ruled that the dismissal of the petitioners was not illegal because they had abandoned their employment. Issue: Whether or not petitioners were illegally dismissed. Held: The dismissal should be upheld because it was established that the petitioners abandoned their jobs to work for another company. Private respondent, however, did not follow the notice requirements and instead argued that sending notices to the last known addresses would have been useless because they did not reside there anymore. Unfortunately for the private respondent, this is not a valid excuse because the law mandates the twin notice requirements to the employees last known address. Thus, it should be held liable for non-compliance with the procedural requirements of due process. When the dismissal is for a just cause, the lack of statutory due process should not nullify the dismissal, or render it illegal, or ineffectual. However, the employer should indemnify the employee for the violation of his statutory rights.

Michael H. v. Gerald D Citation. 504 U.S. 905; 112 S. Ct. 1931;118 L. Ed. 2d 538; 1992 U.S.< Brief Fact Summary. Carole had an adulterous affair with Michael while married to Gerald. A child was born while Carole and Gerald were together, but was likely Michaels child. Michael and the child by guardian ad litem brought suit to establish paternity and a right to visitation. Synopsis of Rule of Law. An adulterous, natural father does not have a constitutional right to paternity over the marital father. Facts. In 1976 Carole D. and Gerald D. were married and established a home in California. In 1978, Carole became involved in an adulterous affair with Michael H. She conceived a child, Victoria, in 1980, with Gerald listed as father on the birth certificate. Gerald has always held the child out to be his daughter, but soon after delivery Carole informed Michael she believed he might be the father. In 1981 Gerald moved to New York and Carole, Michael, and Victoria had blood tests revealing a 98.07% probability that Michael was the father. Carole visited with Michael for several months, were he held Victoria out as his daughter. Carole left Michael and took up residence in California with another man. In the summer of 1982 Carole and Victoria visited Gerald in New York, and the three vacationed in Europe. In the fall she returned to California. In November of 1982 Michael filed a filiation action in California to establish his paternity and right to visitation. In 1983 the co urt appointed an attorney and a guardian ad litem to represent Victorias interests. Victoria filed a cross-complaint asserting that if she had more than one psychological or de facto father, she was entitled to maintain her filial relationship, with all of the attendant rights, duties, and obligations, with both. Carole filed for summary judgment while she was again living with Gerald in New York. In August of 1983 she returned to California and again became involved with Michael, instructing her attorneys to remove the summary judgment motion. For the next eight months Michael held Victoria out as his daughter. In April 1984, Carole and Michael signed a stipulation that Michael was Victorias father. The next month Carole left Michael, instructing her attorneys to not file the stipulation. Carole reconciled with Gerald and they lived together with two more children being born. In May 1984 Michael and Victoria, through guardian ad litem, sought visitation rights for Michael pendente lite. A court appointed psychologist recommended that Carole retain sole custody, but Michael be allowed continued contact with Victoria pursuant to a restricted visitation schedule. The court concurred. In October of 1984 Gerald moved for summary judgment on the ground that under California law there were no triable issues of fact as to Victorias paternity. The law provides that the issue of a wife cohabiting with her husband, who is not impotent or sterile, is conclusively presumed to be a child of the marriage. The presumption may only be rebutted by blood tests, and a motion for such tests must be made within two years of the birth by the husband, or by the wife if the natural father has filed an affidavit acknowledging paternity. In 1985 the Superior Court granted the motion for summary judgment, finding that Carole and Gerald were cohabiting at the time of conception and birth and that Gerald was neither sterile nor impotent.

Issue. Does the presumption established by the law infringe upon the due process rights of a man who wishes to establish his paternity of a child born to the wife of another man or infringe upon the constitutional right of the child to maintain a relationship with her natural father? Held: Michael contends as a matter of substantive due process that because he has established a parental relationship with Victoria, protection of Gerald and Caroles marital union is an insufficient state interest to support termination of the relationship. However, Michaels interest must be a fundamental liberty to be constitutionally protected. Historically, the marital family has been protected rather than the potential father outside of the marriage. The presumption of legitimacy was fundamental at common law, and could be rebutted only by a husband who was incapable of procreation or had no access to his wife during the relative period. The policy rationales were the aversion to declaring children illegitimate and the peace and tranquility of the States and families. No modern or historical precedent similarly recognizes the power of the natural father to assert parental rights. Michael must establish not that society has traditionally allowed a natural father in his circumstances to establish paternity, but that it has traditionally accorded such a father parental rights. To provide protection to an adulterous natural father is to deny protection to a marital father. |Victorias due process challenge is weaker than Michaels. Her claim that a State must recognize multiple fatherhood has no support in history or tradition. The Court declines to accept Victorias argument that she had no opportunity to rebut the presumption of her legitimacy, because Victoria is not illegitimate. Dissent. If we had looked to tradition with such specificity in past cases, many decisions would have had a different result. The plurality ignores the developing society in which we live. Liberty must include the freedom not to conform. This is not a new interest, in that of a parent and a child in their relationship with one another. The pluralitys decision is striking considering the precedent preventing States from denying important interests to those in situations that do not fit the governments narrow view of the family. Discussion. The dissent accuses the plurality of being too specific in its search of history to support the right claimed by appellant. An omitted concurring opinion agreed in the sense that it objected that the pluralitys historical analysis might foreclose the identification of future liberty interests.

Washington v. Glucksberg, 521 U.S. 702 (1997),[1] was a case in which the Supreme Court of the United States unanimously held that a right to assistance in committing suicide was not protected by the Due Process Clause. Facts: Dr. Harold Glucksberg, a physicianalong with four other physicians, three terminally ill patients, and the non-profit organization, Compassion in Dying, counseling those considering assisted-suicidechallenged Washington state's ban against assisted suicide in the Natural Death Act of 1979. They claimed that assisted suicide was a liberty interest protected by the Due Process Clause of the Fourteenth Amendment to the United States Constitution. The District Court ruled in favor of Glucksberg, but the United States Court of Appeals for the Ninth Circuit reversed. Then, after rehearing the case en banc, the Ninth Circuit reversed the earlier panel and affirmed the District Court's decision. The case was argued before the United States Supreme Court on January 8, 1997. The question presented was whether the protection of the Due Process Clause included a right to commit suicide, and therefore commit suicide with another's assistance. 1 Decision: Chief Justice Rehnquist wrote the majority opinion for the court. His decision reversed a Ninth Circuit Court of Appeals decision that a ban on physician assisted suicide embodied in Washington's Natural Death Act of 1979 was a violation of the 14th Amendment's Due Process Clause. The Court held that because assisted-suicide is not a fundamental liberty interest, it was not protected under the 14th Amendment. As previously decided in Moore v. East Cleveland, liberty interests not "deeply rooted in the nation's history" do not qualify as being a protected liberty interest. Assisted-suicide, the court found, had been frowned upon for centuries and a majority of the States had similar bans on assisted suicide. Rehnquist found the English common-law penalties associated with assisted suicide particularly significant. For example, at early common law, the state confiscated the property of a person who committed suicide. Like Blackmun in Roe v. Wade, Rehnquist used English common law to establish American tradition as a yardstick for determining what rights were "deeply rooted in the nation's history." Rehnquist cited Roe v. Wade and Planned Parenthood v. Casey in the opinion. The Court felt that the ban was rational in that it furthered such compelling state interests as the preservation of human life and the protection of the mentally ill and disabled from medical malpractice and coercion. It also prevented those moved to end their lives because of financial or psychological complications. The Court also felt that if the Court declared physician-assisted suicide a constitutionally protected right, they would start down the path to voluntary and perhaps involuntary euthanasia.

Justice O'Connor concurred. Justices Souter, Ginsburg, Breyer, and Stevens each wrote opinions concurring in the judgment of the court. In 2008 Washington State voters approved 58%42% the Washington Death with Dignity Act, which established guidelines for using the services of a physician to terminate one's life. LAWRENCE et al. v. TEXAS

CERTIORARI TO THE COURT OF APPEALS OF TEXAS, FOURTEENTH DISTRICT

No. 02102. Argued March 26, 2003Decided June 26, 2003 Responding to a reported weapons disturbance in a private residence, Houston police entered petitioner Lawrences apartment and saw him and another adult man, petitioner Garner, engaging in a private, consensual sexual act. Petitioners were arrested and convicted of deviate sexual intercourse in violation of a Texas statute forbidding two persons of the same sex to engage in certain intimate sexual conduct. In affirming, the State Court of Appeals held, inter alia, that the statute was not unconstitutional under the Due Process Clause of the Fourteenth Amendment. The court considered Bowers v. Hardwick, 478 U.S. 186, controlling on that point.

Held: The Texas statute making it a crime for two persons of the same sex to engage in certain intimate sexual conduct violates the Due Process Clause. Pp. 318.

(a) Resolution of this case depends on whether petitioners were free as adults to engage in private conduct in the exercise of their liberty under the Due Process Clause. For this inquiry the Court deems it necessary to reconsider its Bowers holding. The Bowers Courts initial substantive statementThe issue presented is whether the Federal Constitution confers a fundamental right upon homosexuals to engage in sodomy , 478 U.S., at 190discloses the Courts failure to appreciate the extent of the liberty at stake. To say that the issue in Bowers was simply the right to engage in certain sexual conduct demeans the claim the individual put forward, just as it would demean a married couple were it said that marriage is just about the right to have sexual intercourse. Although the laws involved in Bowers and here purport to do not more than

prohibit a particular sexual act, their penalties and purposes have more far-reaching consequences, touching upon the most private human conduct, sexual behavior, and in the most private of places, the home. They seek to control a personal relationship that, whether or not entitled to formal recognition in the law, is within the liberty of persons to choose without being punished as criminals. The liberty protected by the Constitution allows homosexual persons the right to choose to enter upon relationships in the confines of their homes and their own private lives and still retain their dignity as free persons. Pp. 36.

(b) Having misapprehended the liberty claim presented to it, the Bowers Court stated that proscriptions against sodomy have ancient roots. 478 U.S., at 192. It should be noted, however, that there is no longstanding history in this country of laws directed at homosexual conduct as a distinct matter. Early American sodomy laws were not directed at homosexuals as such but instead sought to prohibit nonprocreative sexual activity more generally, whether between men and women or men and men. Moreover, early sodomy laws seem not to have been enforced against consenting adults acting in private. Instead, sodomy prosecutions often involved predatory acts against those who could not or did not consent: relations between men and minor girls or boys, between adults involving force, between adults implicating disparity in status, or between men and animals. The longstanding criminal prohibition of homosexual sodomy upon which Bowers placed such reliance is as consistent with a general condemnation of nonprocreative sex as it is with an established tradition of prosecuting acts because of their homosexual character. Far from possessing ancient roots, ibid., American laws targeting same-sex couples did not develop until the last third of the 20th century. Even now, only nine States have singled out same-sex relations for criminal prosecution. Thus, the historical grounds relied upon in Bowers are more complex than the majority opinion and the concurring opinion by Chief Justice Burger there indicated. They are not without doubt and, at the very least, are overstated. The Bowers Court was, of course, making the broader point that for centuries there have been powerful voices to condemn homosexual conduct as immoral, but this Courts obligation is to define the liberty of all, not to mandate its own moral code, Planned Parenthood of Southeastern Pa. v. Casey, 505 U.S. 833, 850. The Nations laws and traditions in the past half century are most relevant here. They show an emerging awareness that liberty gives substantial protection to adult persons in deciding how to conduct their private lives in matters pertaining to sex. See County of Sacramento v. Lewis, 523 U.S. 833, 857. Pp. 612.

are reduced now to 13, of which 4 enforce their laws only against homosexual conduct. In those States, including Texas, that still proscribe sodomy (whether for same-sex or heterosexual conduct), there is a pattern of nonenforcement with respect to consenting adults acting in private. Casey, supra, at 851which confirmed that the Due Process Clause protects personal decisions relating to marriage, procreation, contraception, family relationships, child rearing, and educationand Romer v. Evans, 517 U.S. 620, 624which struck down class-based legislation directed at homosexualscast Bowers holding into even more doubt. The stigma the Texas criminal statute imposes, moreover, is not trivial. Although the offense is but a minor misdemeanor, it remains a criminal offense with all that imports for the dignity of the persons charged, including notation of convictions on their records and on job application forms, and registration as sex offenders under state law. Where a cases foundations have sustained serious erosion, criticism from other sources is of greater significance. In the United States, criticism of Bowers has been substantial and continuing, disapproving of its reasoning in all respects, not just as to its historical assumptions. And, to the extent Bowers relied on values shared with a wider civilization, the cases reasoning and holding have been rejected by the European Court of Human Rights, and that other nations have taken action consistent with an affirmation of the protected right of homosexual adults to engage in intimate, consensual conduct. There has been no showing that in this country the governmental interest in circumscribing personal choice is somehow more legitimate or urgent. Stare decisis is not an inexorable command. Payne v. Tennessee, 501 U.S. 808, 828. Bowers holding has not induced detrimental reliance of the sort that could counsel against overturning it once there are compelling reasons to do so. Casey, supra, at 855856. Bowers causes uncertainty, for the precedents before and after it contradict its central holding. Pp. 1217. (d) Bowers rationale does not withstand careful analysis. In his dissenting opinion in Bowers Justice Stevens concluded that (1) the fact a States governing majority has traditionally viewed a particular practice as immoral is not a sufficient reason for upholding a law prohibiting the practice, and (2) individual decisions concerning the intimacies of physical relationships, even when not intended to produce offspring, are a form of liberty protected by due process. That analysis should have controlled Bowers, and it controls here. Bowers was not correct when it was decided, is not correct today, and is hereby overruled. This case does not involve minors, persons who might be injured or coerced, those who might not easily refuse consent, or public conduct or prostitution. It does involve two adults who, with full and mutual consent, engaged in sexual practices common to a homosexual lifestyle. Petitioners right to liberty under the Due Process Clause gives them the full right to engage in private conduct without government intervention. Casey, supra, at 847. The Texas statute furthers no legitimate state interest which can justify its intrusion into the individuals personal and private life. Pp. 1718.

(c) Bowers deficiencies became even more apparent in the years following its announcement. The 25 States with laws prohibiting the conduct referenced in Bowers

EN BANC G.R. No. 118127 April 12, 2005

conscience of individuals. And if it need be, the Court will not hesitate to "make the hammer fall, and heavily" in the words of Justice Laurel, and uphold the constitutional guarantees when faced with laws that, though not lacking in zeal to promote morality, nevertheless fail to pass the test of constitutionality. The pivotal issue in this Petition1 under Rule 45 (then Rule 42) of the Revised Rules on Civil Procedure seeking the reversal of the Decision2 in Civil Case No. 93-66511 of the Regional Trial Court (RTC) of Manila, Branch 18 (lower court),3 is the validity of Ordinance No. 7783 (the Ordinance) of the City of Manila.4 The antecedents are as follows: Private respondent Malate Tourist Development Corporation (MTDC) is a corporation engaged in the business of operating hotels, motels, hostels and lodging houses.5 It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel.6 On 28 June 1993, MTDC filed a Petition for Declaratory Relief with Prayer for a Writ of Preliminary Injunction and/or Temporary Restraining Order7 (RTC Petition) with the lower court impleading as defendants, herein petitioners City of Manila, Hon. Alfredo S. Lim (Lim), Hon. Joselito L. Atienza, and the members of the City Council of Manila (City Council). MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional.8 Enacted by the City Council9 on 9 March 1993 and approved by petitioner City Mayor on 30 March 1993, the saidOrdinance is entitled AN ORDINANCE PROHIBITING THE ESTABLISHMENT OR OPERATION OF BUSINESSES PROVIDING CERTAIN FORMS OF AMUSEMENT, ENTERTAINMENT, SERVICES AND FACILITIES IN THE ERMITA-MALATE AREA, PRESCRIBING PENALTIES FOR VIOLATION THEREOF, AND FOR OTHER PURPOSES.10 The Ordinance is reproduced in full, hereunder: SECTION 1. Any provision of existing laws and ordinances to the contrary notwithstanding, no person, partnership, corporation or entity shall, in the Ermita-Malate area bounded by Teodoro M. Kalaw Sr. Street in the North, Taft Avenue in the East, Vito Cruz Street in the South and Roxas Boulevard in the West, pursuant to P.D. 499 be allowed or authorized to contract and engage in, any business providing certain forms of amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community, such as but not limited to:

CITY OF MANILA, HON. ALFREDO S. LIM as the Mayor of the City of Manila, HON. JOSELITO L. ATIENZA, in his capacity as Vice-Mayor of the City of Manila and Presiding Officer of the City Council of Manila, HON. ERNESTO A. NIEVA, HON. GONZALO P. GONZALES, HON. AVELINO S. CAILIAN, HON. ROBERTO C. OCAMPO, HON. ALBERTO DOMINGO, HON. HONORIO U. LOPEZ, HON. FRANCISCO G. VARONA, JR., HON. ROMUALDO S. MARANAN, HON. NESTOR C. PONCE, JR., HON. HUMBERTO B. BASCO, HON. FLAVIANO F. CONCEPCION, JR., HON. ROMEO G. RIVERA, HON. MANUEL M. ZARCAL, HON. PEDRO S. DE JESUS, HON. BERNARDITO C. ANG, HON. MANUEL L. QUIN, HON. JHOSEP Y. LOPEZ, HON. CHIKA G. GO, HON. VICTORIANO A. MELENDEZ, HON. ERNESTO V.P. MACEDA, JR., HON. ROLANDO P. NIETO, HON. DANILO V. ROLEDA, HON. GERINO A. TOLENTINO, JR., HON. MA. PAZ E. HERRERA, HON. JOEY D. HIZON, HON. FELIXBERTO D. ESPIRITU, HON. KARLO Q. BUTIONG, HON. ROGELIO P. DELA PAZ, HON. BERNARDO D. RAGAZA, HON. MA. CORAZON R. CABALLES, HON. CASIMIRO C. SISON, HON. BIENVINIDO M. ABANTE, JR., HON. MA. LOURDES M. ISIP, HON. ALEXANDER S. RICAFORT, HON. ERNESTO F. RIVERA, HON. LEONARDO L. ANGAT, and HON. JOCELYN B. DAWIS, in their capacity as councilors of the City of Manila, Petitioner, vs. HON. PERFECTO A.S. LAGUIO, JR., as Presiding Judge, RTC, Manila and MALATE TOURIST DEVELOPMENT CORPORATION, Respondents. DECISION TINGA, J.: I know only that what is moral is what you feel good after and what is immoral is what you feel bad after. Ernest Hermingway Death in the Afternoon, Ch. 1 It is a moral and political axiom that any dishonorable act, if performed by oneself, is less immoral than if performed by someone else, who would be wellintentioned in his dishonesty. J. Christopher Gerald Bonaparte in Egypt, Ch. I The Court's commitment to the protection of morals is secondary to its fealty to the fundamental law of the land. It is foremost a guardian of the Constitution but not the

1. Sauna Parlors 2. Massage Parlors 3. Karaoke Bars 4. Beerhouses 5. Night Clubs 6. Day Clubs 7. Super Clubs 8. Discotheques 9. Cabarets 10. Dance Halls 11. Motels 12. Inns SEC. 2 The City Mayor, the City Treasurer or any person acting in behalf of the said officials are prohibited from issuing permits, temporary or otherwise, or from granting licenses and accepting payments for the operation of business enumerated in the preceding section. SEC. 3. Owners and/or operator of establishments engaged in, or devoted to, the businesses enumerated in Section 1 hereof are hereby given three (3) months from the date of approval of this ordinance within which to wind up business operations or to transfer to any place outside of the ErmitaMalate area or convert said businesses to other kinds of business allowable within the area, such as but not limited to: 1. Curio or antique shop 2. Souvenir Shops 3. Handicrafts display centers

4. Art galleries 5. Records and music shops 6. Restaurants 7. Coffee shops 8. Flower shops 9. Music lounge and sing-along restaurants, with well-defined activities for wholesome family entertainment that cater to both local and foreign clientele. 10. Theaters engaged in the exhibition, not only of motion pictures but also of cultural shows, stage and theatrical plays, art exhibitions, concerts and the like. 11. Businesses allowable within the law and medium intensity districts as provided for in the zoning ordinances for Metropolitan Manila, except new warehouse or open-storage depot, dock or yard, motor repair shop, gasoline service station, light industry with any machinery, or funeral establishments. SEC. 4. Any person violating any provisions of this ordinance, shall upon conviction, be punished by imprisonment of one (1) year or fine of FIVE THOUSAND (P5,000.00) PESOS, or both, at the discretion of the Court, PROVIDED, that in case of juridical person, the President, the General Manager, or person-in-charge of operation shall be liable thereof; PROVIDED FURTHER, that in case of subsequent violation and conviction, the premises of the erring establishment shall be closed and padlocked permanently. SEC. 5. This ordinance shall take effect upon approval. Enacted by the City Council of Manila at its regular session today, March 9, 1993. Approved by His Honor, the Mayor on March 30, 1993. (Emphasis supplied) In the RTC Petition, MTDC argued that the Ordinance erroneously and improperly included in its enumeration of prohibited establishments, motels and inns such as MTDC's Victoria Court considering that these were not establishments for "amusement" or "entertainment" and they were not "services or facilities for entertainment," nor did

they use women as "tools for entertainment," and neither did they "disturb the community," "annoy the inhabitants" or "adversely affect the social and moral welfare of the community."11 MTDC further advanced that the Ordinance was invalid and unconstitutional for the following reasons: (1) The City Council has no power to prohibit the operation of motels as Section 458 (a) 4 (iv)12 of the Local Government Code of 1991 (the Code) grants to the City Council only the power to regulate the establishment, operation and maintenance of hotels, motels, inns, pension houses, lodging houses and other similar establishments; (2) The Ordinance is void as it is violative of Presidential Decree (P.D.) No. 499 13 which specifically declared portions of the Ermita-Malate area as a commercial zone with certain restrictions; (3) The Ordinance does not constitute a proper exercise of police power as the compulsory closure of the motel business has no reasonable relation to the legitimate municipal interests sought to be protected; (4) The Ordinance constitutes an ex post facto law by punishing the operation of Victoria Court which was a legitimate business prior to its enactment; (5) The Ordinanceviolates MTDC's constitutional rights in that: (a) it is confiscatory and constitutes an invasion of plaintiff's property rights; (b) the City Council has no power to find as a fact that a particular thing is a nuisance per se nor does it have the power to extrajudicially destroy it; and (6) The Ordinance constitutes a denial of equal protection under the law as no reasonable basis exists for prohibiting the operation of motels and inns, but not pension houses, hotels, lodging houses or other similar establishments, and for prohibiting said business in the Ermita-Malate area but not outside of this area.14 In their Answer15 dated 23 July 1993, petitioners City of Manila and Lim maintained that the City Council had the power to "prohibit certain forms of entertainment in order to protect the social and moral welfare of the community" as provided for in Section 458 (a) 4 (vii) of the Local Government Code,16 which reads, thus: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: .... (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: ....

(vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community. Citing Kwong Sing v. City of Manila,17 petitioners insisted that the power of regulation spoken of in the above-quoted provision included the power to control, to govern and to restrain places of exhibition and amusement.18 Petitioners likewise asserted that the Ordinance was enacted by the City Council of Manila to protect the social and moral welfare of the community in conjunction with its police power as found in Article III, Section 18(kk) of Republic Act No. 409,19 otherwise known as the Revised Charter of the City of Manila (Revised Charter of Manila) 20 which reads, thus: ARTICLE III THE MUNICIPAL BOARD . . . Section 18. Legislative powers. The Municipal Board shall have the following legislative powers: . . . (kk) To enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity, and the promotion of the morality, peace, good order, comfort, convenience, and general welfare of the city and its inhabitants, and such others as may be necessary to carry into effect and discharge the powers and duties conferred by this chapter; and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos fine or six months' imprisonment, or both such fine and imprisonment, for a single offense. Further, the petitioners noted, the Ordinance had the presumption of validity; hence, private respondent had the burden to prove its illegality or unconstitutionality.21

Petitioners also maintained that there was no inconsistency between P.D. 499 and the Ordinance as the latter simply disauthorized certain forms of businesses and allowed the Ermita-Malate area to remain a commercial zone.22 The Ordinance, the petitioners likewise claimed, cannot be assailed as ex post facto as it was prospective in operation.23 The Ordinance also did not infringe the equal protection clause and cannot be denounced as class legislation as there existed substantial and real differences between the Ermita-Malate area and other places in the City of Manila.24 On 28 June 1993, respondent Judge Perfecto A.S. Laguio, Jr. (Judge Laguio) issued an exparte temporary restraining order against the enforcement of the Ordinance.25 And on 16 July 1993, again in an intrepid gesture, he granted the writ of preliminary injunction prayed for by MTDC.26 After trial, on 25 November 1994, Judge Laguio rendered the assailed Decision, enjoining the petitioners from implementing the Ordinance. The dispositive portion of said Decision reads:27 WHEREFORE, judgment is hereby rendered declaring Ordinance No. 778[3], Series of 1993, of the City of Manila null and void, and making permanent the writ of preliminary injunction that had been issued by this Court against the defendant. No costs. SO ORDERED.28 Petitioners filed with the lower court a Notice of Appeal29 on 12 December 1994, manifesting that they are elevating the case to this Court under then Rule 42 on pure questions of law.30 On 11 January 1995, petitioners filed the present Petition, alleging that the following errors were committed by the lower court in its ruling: (1) It erred in concluding that the subject ordinance is ultra vires, or otherwise, unfair, unreasonable and oppressive exercise of police power; (2) It erred in holding that the questioned Ordinancecontravenes P.D. 49931 which allows operators of all kinds of commercial establishments, except those specified therein; and (3) It erred in declaring the Ordinance void and unconstitutional.32 In the Petition and in its Memorandum,33 petitioners in essence repeat the assertions they made before the lower court. They contend that the assailed Ordinance was enacted in the exercise of the inherent and plenary power of the State and the general welfare clause exercised by local government units provided for in Art. 3, Sec. 18 (kk) of the Revised Charter of Manila and conjunctively, Section 458 (a) 4 (vii) of the Code.34 They allege that theOrdinance is a valid exercise of police power; it does not contravene P.D. 499; and that it enjoys the presumption of validity.35

In its Memorandum36 dated 27 May 1996, private respondent maintains that the Ordinance is ultra vires and that it is void for being repugnant to the general law. It reiterates that the questioned Ordinance is not a valid exercise of police power; that it is violative of due process, confiscatory and amounts to an arbitrary interference with its lawful business; that it is violative of the equal protection clause; and that it confers on petitioner City Mayor or any officer unregulated discretion in the execution of the Ordinance absent rules to guide and control his actions. This is an opportune time to express the Court's deep sentiment and tenderness for the Ermita-Malate area being its home for several decades. A long-time resident, the Court witnessed the area's many turn of events. It relished its glory days and endured its days of infamy. Much as the Court harks back to the resplendent era of the Old Manila and yearns to restore its lost grandeur, it believes that the Ordinance is not the fitting means to that end. The Court is of the opinion, and so holds, that the lower court did not err in declaring the Ordinance, as it did, ultra vires and therefore null and void. The Ordinance is so replete with constitutional infirmities that almost every sentence thereof violates a constitutional provision. The prohibitions and sanctions therein transgress the cardinal rights of persons enshrined by the Constitution. The Court is called upon to shelter these rights from attempts at rendering them worthless. The tests of a valid ordinance are well established. A long line of decisions has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and must be passed according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.37 Anent the first criterion, ordinances shall only be valid when they are not contrary to the Constitution and to the laws.38 The Ordinance must satisfy two requirements: it must pass muster under the test of constitutionality and the test of consistency with the prevailing laws. That ordinances should be constitutional uphold the principle of the supremacy of the Constitution. The requirement that the enactment must not violate existing law gives stress to the precept that local government units are able to legislate only by virtue of their derivative legislative power, a delegation of legislative power from the national legislature. The delegate cannot be superior to the principal or exercise powers higher than those of the latter.39 This relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. The national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.40

The Ordinance was passed by the City Council in the exercise of its police power, an enactment of the City Council acting as agent of Congress. Local government units, as agencies of the State, are endowed with police power in order to effectively accomplish and carry out the declared objects of their creation.41 This delegated police power is found in Section 16 of the Code, known as the general welfare clause, viz: SECTION 16. General Welfare.Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities, improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants. Local government units exercise police power through their respective legislative bodies; in this case, thesangguniang panlungsod or the city council. The Code empowers the legislative bodies to "enact ordinances, approve resolutions and appropriate funds for the general welfare of the province/city/municipality and its inhabitants pursuant to Section 16 of the Code and in the proper exercise of the corporate powers of the province/city/ municipality provided under the Code.42 The inquiry in this Petition is concerned with the validity of the exercise of such delegated power. The Ordinance contravenes the Constitution The police power of the City Council, however broad and far-reaching, is subordinate to the constitutional limitations thereon; and is subject to the limitation that its exercise must be reasonable and for the public good.43In the case at bar, the enactment of the Ordinance was an invalid exercise of delegated power as it is unconstitutional and repugnant to general laws. The relevant constitutional provisions are the following: SEC. 5. The maintenance of peace and order, the protection of life, liberty, and property, and the promotion of the general welfare are essential for the enjoyment by all the people of the blessings of democracy.44 SEC. 14. The State recognizes the role of women in nation-building, and shall ensure the fundamental equality before the law of women and men.45

SEC. 1. No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of laws.46 Sec. 9. Private property shall not be taken for public use without just compensation.47 A. The Ordinance infringes the Due Process Clause The constitutional safeguard of due process is embodied in the fiat "(N)o person shall be deprived of life, liberty or property without due process of law. . . ."48 There is no controlling and precise definition of due process. It furnishes though a standard to which governmental action should conform in order that deprivation of life, liberty or property, in each appropriate case, be valid. This standard is aptly described as a responsiveness to the supremacy of reason, obedience to the dictates of justice,49 and as such it is a limitation upon the exercise of the police power.50 The purpose of the guaranty is to prevent governmental encroachment against the life, liberty and property of individuals; to secure the individual from the arbitrary exercise of the powers of the government, unrestrained by the established principles of private rights and distributive justice; to protect property from confiscation by legislative enactments, from seizure, forfeiture, and destruction without a trial and conviction by the ordinary mode of judicial procedure; and to secure to all persons equal and impartial justice and the benefit of the general law.51 The guaranty serves as a protection against arbitrary regulation, and private corporations and partnerships are "persons" within the scope of the guaranty insofar as their property is concerned.52 This clause has been interpreted as imposing two separate limits on government, usually called "procedural due process" and "substantive due process." Procedural due process, as the phrase implies, refers to the procedures that the government must follow before it deprives a person of life, liberty, or property. Classic procedural due process issues are concerned with what kind of notice and what form of hearing the government must provide when it takes a particular action.53 Substantive due process, as that phrase connotes, asks whether the government has an adequate reason for taking away a person's life, liberty, or property. In other words, substantive due process looks to whether there is a sufficient justification for the government's action.54 Case law in the United States (U.S.) tells us that whether there is such a justification depends very much on the level of scrutiny used.55 For example, if a law is in an area where only rational basis review is applied, substantive due process is

met so long as the law is rationally related to a legitimate government purpose. But if it is an area where strict scrutiny is used, such as for protecting fundamental rights, then the government will meet substantive due process only if it can prove that the law is necessary to achieve a compelling government purpose.56 The police power granted to local government units must always be exercised with utmost observance of the rights of the people to due process and equal protection of the law. Such power cannot be exercised whimsically, arbitrarily or despotically 57 as its exercise is subject to a qualification, limitation or restriction demanded by the respect and regard due to the prescription of the fundamental law, particularly those forming part of the Bill of Rights. Individual rights, it bears emphasis, may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare.58 Due process requires the intrinsic validity of the law in interfering with the rights of the person to his life, liberty and property.59 Requisites for the valid exercise of Police Power are not met To successfully invoke the exercise of police power as the rationale for the enactment of the Ordinance, and to free it from the imputation of constitutional infirmity, not only must it appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights, but the means adopted must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.60 It must be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. A reasonable relation must exist between the purposes of the police measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.61 Lacking a concurrence of these two requisites, the police measure shall be struck down as an arbitrary intrusion into private rights62 a violation of the due process clause. The Ordinance was enacted to address and arrest the social ills purportedly spawned by the establishments in the Ermita-Malate area which are allegedly operated under the deceptive veneer of legitimate, licensed and tax-paying nightclubs, bars, karaoke bars, girlie houses, cocktail lounges, hotels and motels. Petitioners insist that even the Court in the case of Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila63 had already taken judicial notice of the "alarming increase in the rate of prostitution, adultery and fornication in Manila traceable in great part to existence of motels, which provide a necessary atmosphere for clandestine entry, presence and exit and thus become the ideal haven for prostitutes and thrill-seekers."64 The object of the Ordinance was, accordingly, the promotion and protection of the social and moral values of the community. Granting for the sake of argument that the objectives

of the Ordinance are within the scope of the City Council's police powers, the means employed for the accomplishment thereof were unreasonable and unduly oppressive. It is undoubtedly one of the fundamental duties of the City of Manila to make all reasonable regulations looking to the promotion of the moral and social values of the community. However, the worthy aim of fostering public morals and the eradication of the community's social ills can be achieved through means less restrictive of private rights; it can be attained by reasonable restrictions rather than by an absolute prohibition. The closing down and transfer of businesses or their conversion into businesses "allowed" under the Ordinance have no reasonable relation to the accomplishment of its purposes. Otherwise stated, the prohibition of the enumerated establishments will notper se protect and promote the social and moral welfare of the community; it will not in itself eradicate the alluded social ills of prostitution, adultery, fornication nor will it arrest the spread of sexual disease in Manila. Conceding for the nonce that the Ermita-Malate area teems with houses of ill-repute and establishments of the like which the City Council may lawfully prohibit,65 it is baseless and insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. This is not warranted under the accepted definitions of these terms. The enumerated establishments are lawful pursuits which are not per se offensive to the moral welfare of the community. That these are used as arenas to consummate illicit sexual affairs and as venues to further the illegal prostitution is of no moment. We lay stress on the acrid truth that sexual immorality, being a human frailty, may take place in the most innocent of places that it may even take place in the substitute establishments enumerated under Section 3 of the Ordinance. If the flawed logic of the Ordinance were to be followed, in the remote instance that an immoral sexual act transpires in a church cloister or a court chamber, we would behold the spectacle of the City of Manila ordering the closure of the church or court concerned. Every house, building, park, curb, street or even vehicles for that matter will not be exempt from the prohibition. Simply because there are no "pure" places where there are impure men. Indeed, even the Scripture and the Tradition of Christians churches continually recall the presence and universality of sin in man's history.66 The problem, it needs to be pointed out, is not the establishment, which by its nature cannot be said to be injurious to the health or comfort of the community and which in itself is amoral, but the deplorable human activity that may occur within its premises. While a motel may be used as a venue for immoral sexual activity, it cannot for that reason alone be punished. It cannot be classified as a house of ill-repute or as a nuisance per se on a mere likelihood or a naked assumption. If that were so and if that were allowed, then the Ermita-Malate area would not only be purged of its supposed social ills, it would be extinguished of its soul as well as every human activity, reprehensible or not, in its every nook and cranny would be laid bare to the estimation of the authorities.

The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinancemay to shape morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The City Council instead should regulate human conduct that occurs inside the establishments, but not to the detriment of liberty and privacy which are covenants, premiums and blessings of democracy. While petitioners' earnestness at curbing clearly objectionable social ills is commendable, they unwittingly punish even the proprietors and operators of "wholesome," "innocent" establishments. In the instant case, there is a clear invasion of personal or property rights, personal in the case of those individuals desirous of owning, operating and patronizing those motels and property in terms of the investments made and the salaries to be paid to those therein employed. If the City of Manila so desires to put an end to prostitution, fornication and other social ills, it can instead impose reasonable regulations such as daily inspections of the establishments for any violation of the conditions of their licenses or permits; it may exercise its authority to suspend or revoke their licenses for these violations;67 and it may even impose increased license fees. In other words, there are other means to reasonably accomplish the desired end. Means employed are constitutionally infirm The Ordinance disallows the operation of sauna parlors, massage parlors, karaoke bars, beerhouses, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns in the Ermita-Malate area. In Section 3 thereof, owners and/or operators of the enumerated establishments are given three (3) months from the date of approval of the Ordinance within which "to wind up business operations or to transfer to any place outside the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." Further, it states in Section 4 that in cases of subsequent violations of the provisions of the Ordinance, the "premises of the erring establishment shall be closed and padlocked permanently." It is readily apparent that the means employed by the Ordinance for the achievement of its purposes, the governmental interference itself, infringes on the constitutional guarantees of a person's fundamental right to liberty and property. Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the facilities with which he has been endowed by his Creator, subject only to such restraint as are necessary for the common welfare."68 In accordance with this case, the rights of the citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; and to pursue any avocation are all deemed embraced in the concept of liberty.69

The U.S. Supreme Court in the case of Roth v. Board of Regents,70 sought to clarify the meaning of "liberty." It said: While the Court has not attempted to define with exactness the liberty. . . guaranteed [by the Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognizedas essential to the orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that the meaning of "liberty" must be broad indeed. In another case, it also confirmed that liberty protected by the due process clause includes personal decisions relating to marriage, procreation, contraception, family relationships, child rearing, and education. In explaining the respect the Constitution demands for the autonomy of the person in making these choices, the U.S. Supreme Court explained: These matters, involving the most intimate and personal choices a person may make in a lifetime, choices central to personal dignity and autonomy, are central to the liberty protected by the Fourteenth Amendment. At the heart of liberty is the right to define one's own concept of existence, of meaning, of universe, and of the mystery of human life. Beliefs about these matters could not define the attributes of personhood where they formed under compulsion of the State.71 Persons desirous to own, operate and patronize the enumerated establishments under Section 1 of the Ordinancemay seek autonomy for these purposes. Motel patrons who are single and unmarried may invoke this right to autonomy to consummate their bonds in intimate sexual conduct within the motel's premisesbe it stressed that their consensual sexual behavior does not contravene any fundamental state policy as contained in the Constitution.72 Adults have a right to choose to forge such relationships with others in the confines of their own private lives and still retain their dignity as free persons. The liberty protected by the Constitution allows persons the right to make this choice.73 Their right to liberty under the due process clause gives them the full right to engage in their conduct without intervention of the government, as long as they do not run afoul of the law. Liberty should be the rule and restraint the exception. Liberty in the constitutional sense not only means freedom from unlawful government restraint; it must include privacy as well, if it is to be a repository of freedom. The right to be let alone is the beginning of all freedomit is the most comprehensive of rights and the right most valued by civilized men.74

The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the case of Morfe v. Mutuc,75 borrowing the words of Laski, so very aptly stated: Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations are built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that his experience is private, and the will built out of that experience personal to himself. If he surrenders his will to others, he surrenders himself. If his will is set by the will of others, he ceases to be a master of himself. I cannot believe that a man no longer a master of himself is in any real sense free. Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should be justified by a compelling state interest. Morfe accorded recognition to the right to privacy independently of its identification with liberty; in itself it is fully deserving of constitutional protection. Governmental powers should stop short of certain intrusions into the personal life of the citizen.76 There is a great temptation to have an extended discussion on these civil liberties but the Court chooses to exercise restraint and restrict itself to the issues presented when it should. The previous pronouncements of the Court are not to be interpreted as a license for adults to engage in criminal conduct. The reprehensibility of such conduct is not diminished. The Court only reaffirms and guarantees their right to make this choice. Should they be prosecuted for their illegal conduct, they should suffer the consequences of the choice they have made. That, ultimately, is their choice. Modality employed is unlawful taking In addition, the Ordinance is unreasonable and oppressive as it substantially divests the respondent of the beneficial use of its property.77 The Ordinance in Section 1 thereof forbids the running of the enumerated businesses in the Ermita-Malate area and in Section 3 instructs its owners/operators to wind up business operations or to transfer outside the area or convert said businesses into allowed businesses. An ordinance which permanently restricts the use of property that it can not be used for any reasonable purpose goes beyond regulation and must be recognized as a taking of the property without just compensation.78 It is intrusive and violative of the private property rights of individuals. The Constitution expressly provides in Article III, Section 9, that "private property shall not be taken for public use without just compensation." The provision is the most important protection of property rights in the Constitution. This is a restriction on the general power of the government to take property. The constitutional provision is about ensuring that the government does not confiscate the property of some to give it to

others. In part too, it is about loss spreading. If the government takes away a person's property to benefit society, then society should pay. The principal purpose of the guarantee is "to bar the Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.79 There are two different types of taking that can be identified. A "possessory" taking occurs when the government confiscates or physically occupies property. A "regulatory" taking occurs when the government's regulation leaves no reasonable economically viable use of the property.80 In the landmark case of Pennsylvania Coal v. Mahon,81 it was held that a taking also could be found if government regulation of the use of property went "too far." When regulation reaches a certain magnitude, in most if not in all cases there must be an exercise of eminent domain and compensation to support the act. While property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. 82 No formula or rule can be devised to answer the questions of what is too far and when regulation becomes a taking. In Mahon, Justice Holmes recognized that it was "a question of degree and therefore cannot be disposed of by general propositions." On many other occasions as well, the U.S. Supreme Court has said that the issue of when regulation constitutes a taking is a matter of considering the facts in each case. The Court asks whether justice and fairness require that the economic loss caused by public action must be compensated by the government and thus borne by the public as a whole, or whether the loss should remain concentrated on those few persons subject to the public action.83 What is crucial in judicial consideration of regulatory takings is that government regulation is a taking if it leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use.84A regulation that permanently denies all economically beneficial or productive use of land is, from the owner's point of view, equivalent to a "taking" unless principles of nuisance or property law that existed when the owner acquired the land make the use prohibitable. 85 When the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of the common good, that is, to leave his property economically idle, he has suffered a taking.86 A regulation which denies all economically beneficial or productive use of land will require compensation under the takings clause. Where a regulation places limitations on land that fall short of eliminating all economically beneficial use, a taking nonetheless may have occurred, depending on a complex of factors including the regulation's economic effect on the landowner, the extent to which the regulation interferes with reasonable investment-backed expectations and the character of government action. These inquiries are informed by the purpose of the takings clause which is to prevent the government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.87

A restriction on use of property may also constitute a "taking" if not reasonably necessary to the effectuation of a substantial public purpose or if it has an unduly harsh impact on the distinct investment-backed expectations of the owner.88 The Ordinance gives the owners and operators of the "prohibited" establishments three (3) months from its approval within which to "wind up business operations or to transfer to any place outside of the Ermita-Malate area or convert said businesses to other kinds of business allowable within the area." The directive to "wind up business operations" amounts to a closure of the establishment, a permanent deprivation of property, and is practically confiscatory. Unless the owner converts his establishment to accommodate an "allowed" business, the structure which housed the previous business will be left empty and gathering dust. Suppose he transfers it to another area, he will likewise leave the entire establishment idle. Consideration must be given to the substantial amount of money invested to build the edifices which the owner reasonably expects to be returned within a period of time. It is apparent that the Ordinance leaves no reasonable economically viable use of property in a manner that interferes with reasonable expectations for use. The second and third options to transfer to any place outside of the Ermita-Malate area or to convert into allowed businessesare confiscatory as well. The penalty of permanent closure in cases of subsequent violations found in Section 4 of the Ordinance is also equivalent to a "taking" of private property. The second option instructs the owners to abandon their property and build another one outside the Ermita-Malate area. In every sense, it qualifies as a taking without just compensation with an additional burden imposed on the owner to build another establishment solely from his coffers. The proffered solution does not put an end to the "problem," it merely relocates it. Not only is this impractical, it is unreasonable, onerous and oppressive. The conversion into allowed enterprises is just as ridiculous. How may the respondent convert a motel into a restaurant or a coffee shop, art gallery or music lounge without essentially destroying its property? This is a taking of private property without due process of law, nay, even without compensation. The penalty of closure likewise constitutes unlawful taking that should be compensated by the government. The burden on the owner to convert or transfer his business, otherwise it will be closed permanently after a subsequent violation should be borne by the public as this end benefits them as a whole. Petitioners cannot take refuge in classifying the measure as a zoning ordinance. A zoning ordinance, although a valid exercise of police power, which limits a "wholesome" property to a use which can not reasonably be made of it constitutes the taking of such property without just compensation. Private property which is not noxious nor intended for noxious purposes may not, by zoning, be destroyed without compensation. Such principle finds no support in the principles of justice as we know them. The police powers of local government units which have always received broad and liberal interpretation cannot be stretched to cover this particular taking.

Distinction should be made between destruction from necessity and eminent domain. It needs restating that the property taken in the exercise of police power is destroyed because it is noxious or intended for a noxious purpose while the property taken under the power of eminent domain is intended for a public use or purpose and is therefore "wholesome."89 If it be of public benefit that a "wholesome" property remain unused or relegated to a particular purpose, then certainly the public should bear the cost of reasonable compensation for the condemnation of private property for public use. 90 Further, the Ordinance fails to set up any standard to guide or limit the petitioners' actions. It in no way controls or guides the discretion vested in them. It provides no definition of the establishments covered by it and it fails to set forth the conditions when the establishments come within its ambit of prohibition. The Ordinance confers upon the mayor arbitrary and unrestricted power to close down establishments. Ordinances such as this, which make possible abuses in its execution, depending upon no conditions or qualifications whatsoever other than the unregulated arbitrary will of the city authorities as the touchstone by which its validity is to be tested, are unreasonable and invalid. The Ordinance should have established a rule by which its impartial enforcement could be secured.91 Ordinances placing restrictions upon the lawful use of property must, in order to be valid and constitutional, specify the rules and conditions to be observed and conduct to avoid; and must not admit of the exercise, or of an opportunity for the exercise, of unbridled discretion by the law enforcers in carrying out its provisions.92 Thus, in Coates v. City of Cincinnati,93 as cited in People v. Nazario,94 the U.S. Supreme Court struck down an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by." The ordinance was nullified as it imposed no standard at all "because one may never know in advance what 'annoys some people but does not annoy others.' " Similarly, the Ordinance does not specify the standards to ascertain which establishments "tend to disturb the community," "annoy the inhabitants," and "adversely affect the social and moral welfare of the community." The cited case supports the nullification of the Ordinance for lack of comprehensible standards to guide the law enforcers in carrying out its provisions. Petitioners cannot therefore order the closure of the enumerated establishments without infringing the due process clause. These lawful establishments may be regulated, but not prevented from carrying on their business. This is a sweeping exercise of police power that is a result of a lack of imagination on the part of the City Council and which amounts to an interference into personal and private rights which the Court will not countenance. In this regard, we take a resolute stand to uphold the constitutional guarantee of the right to liberty and property.

Worthy of note is an example derived from the U.S. of a reasonable regulation which is a far cry from the ill-considered Ordinance enacted by the City Council. In FW/PBS, INC. v. Dallas,95 the city of Dallas adopted a comprehensive ordinance regulating "sexually oriented businesses," which are defined to include adult arcades, bookstores, video stores, cabarets, motels, and theaters as well as escort agencies, nude model studio and sexual encounter centers. Among other things, the ordinance required that such businesses be licensed. A group of motel owners were among the three groups of businesses that filed separate suits challenging the ordinance. The motel owners asserted that the city violated the due process clause by failing to produce adequate support for its supposition that renting room for fewer than ten (10) hours resulted in increased crime and other secondary effects. They likewise argued than the ten (10)hour limitation on the rental of motel rooms placed an unconstitutional burden on the right to freedom of association. Anent the first contention, the U.S. Supreme Court held that the reasonableness of the legislative judgment combined with a study which the city considered, was adequate to support the city's determination that motels permitting room rentals for fewer than ten (10 ) hours should be included within the licensing scheme. As regards the second point, the Court held that limiting motel room rentals to ten (10) hours will have no discernible effect on personal bonds as those bonds that are formed from the use of a motel room for fewer than ten (10) hours are not those that have played a critical role in the culture and traditions of the nation by cultivating and transmitting shared ideals and beliefs. The ordinance challenged in the above-cited case merely regulated the targeted businesses. It imposed reasonable restrictions; hence, its validity was upheld. The case of Ermita Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila,96 it needs pointing out, is also different from this case in that what was involved therein was a measure which regulated the mode in which motels may conduct business in order to put an end to practices which could encourage vice and immorality. Necessarily, there was no valid objection on due process or equal protection grounds as the ordinance did not prohibit motels. The Ordinance in this case however is not a regulatory measure but is an exercise of an assumed power to prohibit.97 The foregoing premises show that the Ordinance is an unwarranted and unlawful curtailment of property and personal rights of citizens. For being unreasonable and an undue restraint of trade, it cannot, even under the guise of exercising police power, be upheld as valid. B. The Ordinance violates Equal Protection Clause Equal protection requires that all persons or things similarly situated should be treated alike, both as to rights conferred and responsibilities imposed. Similar subjects, in other words, should not be treated differently, so as to give undue favor to some and unjustly

discriminate against others.98 The guarantee means that no person or class of persons shall be denied the same protection of laws which is enjoyed by other persons or other classes in like circumstances.99 The "equal protection of the laws is a pledge of the protection of equal laws."100 It limits governmental discrimination. The equal protection clause extends to artificial persons but only insofar as their property is concerned. 101 The Court has explained the scope of the equal protection clause in this wise: What does it signify? To quote from J.M. Tuason & Co. v. Land Tenure Administration: "The ideal situation is for the law's benefits to be available to all, that none be placed outside the sphere of its coverage. Only thus could chance and favor be excluded and the affairs of men governed by that serene and impartial uniformity, which is of the very essence of the idea of law." There is recognition, however, in the opinion that what in fact exists "cannot approximate the ideal. Nor is the law susceptible to the reproach that it does not take into account the realities of the situation. The constitutional guarantee then is not to be given a meaning that disregards what is, what does in fact exist. To assure that the general welfare be promoted, which is the end of law, a regulatory measure may cut into the rights to liberty and property. Those adversely affected may under such circumstances invoke the equal protection clause only if they can show that the governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the spirit of hostility, or at the very least, discrimination that finds no support in reason." Classification is thus not ruled out, it being sufficient to quote from the Tuason decision anew "that the laws operate equally and uniformly on all persons under similar circumstances or that all persons must be treated in the same manner, the conditions not being different, both in the privileges conferred and the liabilities imposed. Favoritism and undue preference cannot be allowed. For the principle is that equal protection and security shall be given to every person under circumstances which, if not identical, are analogous. If law be looked upon in terms of burden or charges, those that fall within a class should be treated in the same fashion, whatever restrictions cast on some in the group equally binding on the rest.102 Legislative bodies are allowed to classify the subjects of legislation. If the classification is reasonable, the law may operate only on some and not all of the people without violating the equal protection clause.103 The classification must, as an indispensable requisite, not be arbitrary. To be valid, it must conform to the following requirements: 1) It must be based on substantial distinctions. 2) It must be germane to the purposes of the law. 3) It must not be limited to existing conditions only.

4) It must apply equally to all members of the class.104 In the Court's view, there are no substantial distinctions between motels, inns, pension houses, hotels, lodging houses or other similar establishments. By definition, all are commercial establishments providing lodging and usually meals and other services for the public. No reason exists for prohibiting motels and inns but not pension houses, hotels, lodging houses or other similar establishments. The classification in the instant case is invalid as similar subjects are not similarly treated, both as to rights conferred and obligations imposed. It is arbitrary as it does not rest on substantial distinctions bearing a just and fair relation to the purpose of the Ordinance. The Court likewise cannot see the logic for prohibiting the business and operation of motels in the Ermita-Malate area but not outside of this area. A noxious establishment does not become any less noxious if located outside the area. The standard "where women are used as tools for entertainment" is also discriminatory as prostitutionone of the hinted ills the Ordinance aims to banishis not a profession exclusive to women. Both men and women have an equal propensity to engage in prostitution. It is not any less grave a sin when men engage in it. And why would the assumption that there is an ongoing immoral activity apply only when women are employed and be inapposite when men are in harness? This discrimination based on gender violates equal protection as it is not substantially related to important government objectives.105 Thus, the discrimination is invalid. Failing the test of constitutionality, the Ordinance likewise failed to pass the test of consistency with prevailing laws. C. The Ordinance is repugnant to general laws; it is ultra vires The Ordinance is in contravention of the Code as the latter merely empowers local government units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof. The power of the City Council to regulate by ordinances the establishment, operation, and maintenance of motels, hotels and other similar establishments is found in Section 458 (a) 4 (iv), which provides that: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:

. . . (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: . . . (iv) Regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, including tourist guides and transports . . . . While its power to regulate the establishment, operation and maintenance of any entertainment or amusement facilities, and to prohibit certain forms of amusement or entertainment is provided under Section 458 (a) 4 (vii) of the Code, which reads as follows: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: . . . (4) Regulate activities relative to the use of land, buildings and structures within the city in order to promote the general welfare and for said purpose shall: . . . (vii) Regulate the establishment, operation, and maintenance of any entertainment or amusement facilities, including theatrical performances, circuses, billiard pools, public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement; regulate such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants, or require the suspension or suppression of the same; or, prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community.

Clearly, with respect to cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments, the only power of the City Council to legislate relative thereto is to regulate them to promote the general welfare. The Code still withholds from cities the power to suppress and prohibit altogether the establishment, operation and maintenance of such establishments. It is well to recall the rulings of the Court inKwong Sing v. City of Manila106 that: The word "regulate," as used in subsection (l), section 2444 of the Administrative Code, means and includes the power to control, to govern, and to restrain; but "regulate" should not be construed as synonymous with "suppress" or "prohibit." Consequently, under the power to regulate laundries, the municipal authorities could make proper police regulations as to the mode in which the employment or business shall be exercised.107 And in People v. Esguerra,108 wherein the Court nullified an ordinance of the Municipality of Tacloban which prohibited the selling, giving and dispensing of liquor ratiocinating that the municipality is empowered only to regulate the same and not prohibit. The Court therein declared that: (A)s a general rule when a municipal corporation is specifically given authority or power to regulate or to license and regulate the liquor traffic, power to prohibit is impliedly withheld.109 These doctrines still hold contrary to petitioners' assertion110 that they were modified by the Code vesting upon City Councils prohibitory powers. Similarly, the City Council exercises regulatory powers over public dancing schools, public dance halls, sauna baths, massage parlors, and other places for entertainment or amusement as found in the first clause of Section 458 (a) 4 (vii). Its powers to regulate, suppress and suspend "such other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants" and to "prohibit certain forms of amusement or entertainment in order to protect the social and moral welfare of the community" are stated in the second and third clauses, respectively of the same Section. The several powers of the City Council as provided in Section 458 (a) 4 (vii) of the Code, it is pertinent to emphasize, are separated by semi-colons (;), the use of which indicates that the clauses in which these powers are set forth are independent of each other albeit closely related to justify being put together in a single enumeration or paragraph.111 These powers, therefore, should not be confused, commingled or consolidated as to create a conglomerated and unified power of regulation, suppression and prohibition.112 The Congress unequivocably specified the establishments and forms of amusement or entertainment subject to regulation among which are beerhouses, hotels, motels, inns, pension houses, lodging houses, and other similar establishments (Section 458 (a) 4 (iv)), public dancing schools, public dance halls, sauna baths, massage parlors, and other

places for entertainment or amusement (Section 458 (a) 4 (vii)). This enumeration therefore cannot be included as among "other events or activities for amusement or entertainment, particularly those which tend to disturb the community or annoy the inhabitants" or "certain forms of amusement or entertainment" which the City Council may suspend, suppress or prohibit. The rule is that the City Council has only such powers as are expressly granted to it and those which are necessarily implied or incidental to the exercise thereof. By reason of its limited powers and the nature thereof, said powers are to be construed strictissimi juris and any doubt or ambiguity arising out of the terms used in granting said powers must be construed against the City Council.113 Moreover, it is a general rule in statutory construction that the express mention of one person, thing, or consequence is tantamount to an express exclusion of all others. Expressio unius est exclusio alterium. This maxim is based upon the rules of logic and the natural workings of human mind. It is particularly applicable in the construction of such statutes as create new rights or remedies, impose penalties or punishments, or otherwise come under the rule of strict construction.114 The argument that the City Council is empowered to enact the Ordinance by virtue of the general welfare clause of the Code and of Art. 3, Sec. 18 (kk) of the Revised Charter of Manila is likewise without merit. On the first point, the ruling of the Court in People v. Esguerra,115 is instructive. It held that: The powers conferred upon a municipal council in the general welfare clause, or section 2238 of the Revised Administrative Code, refers to matters not covered by the other provisions of the same Code, and therefore it can not be applied to intoxicating liquors, for the power to regulate the selling, giving away and dispensing thereof is granted specifically by section 2242 (g) to municipal councils. To hold that, under the general power granted by section 2238, a municipal council may enact the ordinance in question, notwithstanding the provision of section 2242 (g), would be to make the latter superfluous and nugatory, because the power to prohibit, includes the power to regulate, the selling, giving away and dispensing of intoxicating liquors. On the second point, it suffices to say that the Code being a later expression of the legislative will must necessarily prevail and override the earlier law, the Revised Charter of Manila. Legis posteriores priores contrarias abrogant, or later statute repeals prior ones which are repugnant thereto. As between two laws on the same subject matter, which are irreconcilably inconsistent, that which is passed later prevails, since it is the latest expression of legislative will.116 If there is an inconsistency or repugnance between two statutes, both relating to the same subject matter, which cannot be removed by any fair and reasonable method of interpretation, it is the latest expression of the legislative will which must prevail and override the earlier.117 Implied repeals are those which take place when a subsequently enacted law contains provisions contrary to those of an existing law but no provisions expressly repealing

them. Such repeals have been divided into two general classes: those which occur where an act is so inconsistent or irreconcilable with an existing prior act that only one of the two can remain in force and those which occur when an act covers the whole subject of an earlier act and is intended to be a substitute therefor. The validity of such a repeal is sustained on the ground that the latest expression of the legislative will should prevail.118 In addition, Section 534(f) of the Code states that "All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly." Thus, submitting to petitioners' interpretation that the Revised Charter of Manila empowers the City Council to prohibit motels, that portion of the Charter stating such must be considered repealed by the Code as it is at variance with the latter's provisions granting the City Council mere regulatory powers. It is well to point out that petitioners also cannot seek cover under the general welfare clause authorizing the abatement of nuisances without judicial proceedings. That tenet applies to a nuisance per se, or one which affects the immediate safety of persons and property and may be summarily abated under the undefined law of necessity. It can not be said that motels are injurious to the rights of property, health or comfort of the community. It is a legitimate business. If it be a nuisance per accidens it may be so proven in a hearing conducted for that purpose. A motel is not per se a nuisance warranting its summary abatement without judicial intervention.119 Notably, the City Council was conferred powers to prevent and prohibit certain activities and establishments in another section of the Code which is reproduced as follows: Section 458. Powers, Duties, Functions and Compensation. (a) The sangguniang panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall: (1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall: . . . (v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute, gambling and other prohibited games of chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of

obscene or pornographic materials or publications, and such other activities inimical to the welfare and morals of the inhabitants of the city; . . . If it were the intention of Congress to confer upon the City Council the power to prohibit the establishments enumerated in Section 1 of the Ordinance, it would have so declared in uncertain terms by adding them to the list of the matters it may prohibit under the above-quoted Section. The Ordinance now vainly attempts to lump these establishments with houses of ill-repute and expand the City Council's powers in the second and third clauses of Section 458 (a) 4 (vii) of the Code in an effort to overreach its prohibitory powers. It is evident that these establishments may only be regulated in their establishment, operation and maintenance. It is important to distinguish the punishable activities from the establishments themselves. That these establishments are recognized legitimate enterprises can be gleaned from another Section of the Code. Section 131 under the Title on Local Government Taxation expressly mentioned proprietors or operators of massage clinics, sauna, Turkish and Swedish baths, hotels, motels and lodging houses as among the "contractors" defined in paragraph (h) thereof. The same Section also defined "amusement" as a "pleasurable diversion and entertainment," "synonymous to relaxation, avocation, pastime or fun;" and "amusement places" to include "theaters, cinemas, concert halls, circuses and other places of amusement where one seeks admission to entertain oneself by seeing or viewing the show or performances." Thus, it can be inferred that the Code considers these establishments as legitimate enterprises and activities. It is well to recall the maxim reddendo singula singulis which means that words in different parts of a statute must be referred to their appropriate connection, giving to each in its place, its proper force and effect, and, if possible, rendering none of them useless or superfluous, even if strict grammatical construction demands otherwise. Likewise, where words under consideration appear in different sections or are widely dispersed throughout an act the same principle applies.120 Not only does the Ordinance contravene the Code, it likewise runs counter to the provisions of P.D. 499. As correctly argued by MTDC, the statute had already converted the residential Ermita-Malate area into a commercial area. The decree allowed the establishment and operation of all kinds of commercial establishments except warehouse or open storage depot, dump or yard, motor repair shop, gasoline service station, light industry with any machinery or funeral establishment. The rule is that for an ordinance to be valid and to have force and effect, it must not only be within the powers of the council to enact but the same must not be in conflict with or repugnant to the general law.121 As succinctly illustrated in Solicitor General v. Metropolitan Manila Authority:122 The requirement that the enactment must not violate existing law explains itself. Local political subdivisions are able to legislate only by virtue of a valid delegation of legislative power from the national legislature (except only that

the power to create their own sources of revenue and to levy taxes is conferred by the Constitution itself). They are mere agents vested with what is called the power of subordinate legislation. As delegates of the Congress, the local government units cannot contravene but must obey at all times the will of their principal. In the case before us, the enactment in question, which are merely local in origin cannot prevail against the decree, which has the force and effect of a statute.123 Petitioners contend that the Ordinance enjoys the presumption of validity. While this may be the rule, it has already been held that although the presumption is always in favor of the validity or reasonableness of the ordinance, such presumption must nevertheless be set aside when the invalidity or unreasonableness appears on the face of the ordinance itself or is established by proper evidence. The exercise of police power by the local government is valid unless it contravenes the fundamental law of the land, or an act of the legislature, or unless it is against public policy or is unreasonable, oppressive, partial, discriminating or in derogation of a common right.124 Conclusion All considered, the Ordinance invades fundamental personal and property rights and impairs personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council under the Code had no power to enact the Ordinance and is therefore ultra vires, null and void. Concededly, the challenged Ordinance was enacted with the best of motives and shares the concern of the public for the cleansing of the Ermita-Malate area of its social sins. Police power legislation of such character deserves the full endorsement of the judiciary we reiterate our support for it. But inspite of its virtuous aims, the enactment of the Ordinance has no statutory or constitutional authority to stand on. Local legislative bodies, in this case, the City Council, cannot prohibit the operation of the enumerated establishments under Section 1 thereof or order their transfer or conversion without infringing the constitutional guarantees of due process and equal protection of laws not even under the guise of police power. WHEREFORE, the Petition is hereby DENIED and the decision of the Regional Trial Court declaring the Ordinancevoid is AFFIRMED. Costs against petitioners. City of Manila vs. Laguio FACTS: The private respondent, Malate Tourist Development Corporation (MTOC) is a corporation engaged in the business of operating hotels, motels, hostels, and lodgin houses. It built and opened Victoria Court in Malate which was licensed as a motel although duly accredited with the Department of Tourism as a hotel.

March 30, 1993 - City Mayor Alfredo S. Lim approved an ordinance enacted which prohibited certain forms of amusement, entertainment, services and facilities where women are used as tools in entertainment and which tend to disturb the community, annoy the inhabitants, and adversely affect the social and moral welfare of the community. The Ordinance also provided that in case of violation and conviction, the premises of the erring establishment shall be closed and padlocked permanently. June 28, 1993 - MTOC filed a Petition with the lower court, praying that the Ordinance, insofar as it included motels and inns as among its prohibited establishments, be declared invalid and unconstitutional for several reasons but mainly because it is not a valid exercise of police power and it constitutes a denial of equal protection under the law. Judge Laguio ruled for the petitioners. The case was elevated to the Supreme Court. ISSUE: W/N the City of Manila validly exercised police power HELD: The Ordinance infringes the due process clause since the requisites for a valid exercise of police power are not met. The prohibition of the enumerated establishments will not per se protect and promote the social and moral welfare of the community; it will not in itself eradicate the alluded social ills fo prostitution, adultery, fornication nor will it arrest the spread of sexual diseases in Manila. It is baseless and insupportable to bring within that classification sauna parlors, massage parlors, karaoke bars, night clubs, day clubs, super clubs, discotheques, cabarets, dance halls, motels and inns. These are lawful pursuits which are not per se offensive to the moral welfare of the community. Sexual immorality, being a human frailty, may take place in the most innocent places.... Every house, building, park, curb, street, or even vehicles for that matter will not be exempt from the prohibition. Simply because there are no "pure" places where there are impure men. The Ordinance seeks to legislate morality but fails to address the core issues of morality. Try as the Ordinance may to shape morality, it should not foster the illusion that it can make a moral man out of it because immorality is not a thing, a building or establishment; it is in the hearts of men. The Ordinance violates equal protection clause and is repugnant to general laws; it is ultra vires. The Local Government Code merely empowers local government units to regulate, and not prohibit, the establishments enumerated in Section 1 thereof. All considered, the Ordinance invades fundamental personal and property rights adn impairs personal privileges. It is constitutionally infirm. The Ordinance contravenes statutes; it is discriminatory and unreasonable in its operation; it is not sufficiently detailed and explicit that abuses may attend the enforcement of its sanctions. And not to be forgotten, the City Council unde the Code had no power to enact the Ordinance and is therefore ultra vires null and void.

EN BANC G.R. No. 122846 January 20, 2009

SEC. 3. Pursuant to the above policy, short-time admission and rate [sic], wash-up rate or other similarly concocted terms, are hereby prohibited in hotels, motels, inns, lodging houses, pension houses and similar establishments in the City of Manila. SEC. 4. Definition of Term[s]. Short-time admission shall mean admittance and charging of room rate for less than twelve (12) hours at any given time or the renting out of rooms more than twice a day or any other term that may be concocted by owners or managers of said establishments but would mean the same or would bear the same meaning. SEC. 5. Penalty Clause. Any person or corporation who shall violate any provision of this ordinance shall upon conviction thereof be punished by a fine of Five Thousand (P5,000.00) Pesos or imprisonment for a period of not exceeding one (1) year or both such fine and imprisonment at the discretion of the court; Provided, That in case of [a] juridical person, the president, the manager, or the persons in charge of the operation thereof shall be liable: Provided, further, That in case of subsequent conviction for the same offense, the business license of the guilty party shall automatically be cancelled. SEC. 6. Repealing Clause. Any or all provisions of City ordinances not consistent with or contrary to this measure or any portion hereof are hereby deemed repealed. SEC. 7. Effectivity. This ordinance shall take effect immediately upon approval. Enacted by the city Council of Manila at its regular session today, November 10, 1992.

WHITE LIGHT CORPORATION, TITANIUM CORPORATION and STA. MESA TOURIST & DEVELOPMENT CORPORATION, Petitioners, vs. CITY OF MANILA, represented by DE CASTRO, MAYOR ALFREDO S. LIM, Respondent. Tinga, J.: With another city ordinance of Manila also principally involving the tourist district as subject, the Court is confronted anew with the incessant clash between government power and individual liberty in tandem with the archetypal tension between law and morality. In City of Manila v. Laguio, Jr.,1 the Court affirmed the nullification of a city ordinance barring the operation of motels and inns, among other establishments, within the Ermita-Malate area. The petition at bar assails a similarly-motivated city ordinance that prohibits those same establishments from offering short-time admission, as well as prorated or "wash up" rates for such abbreviated stays. Our earlier decision tested the city ordinance against our sacred constitutional rights to liberty, due process and equal protection of law. The same parameters apply to the present petition. This Petition2 under Rule 45 of the Revised Rules on Civil Procedure, which seeks the reversal of the Decision3 in C.A.-G.R. S.P. No. 33316 of the Court of Appeals, challenges the validity of Manila City Ordinance No. 7774 entitled, "An Ordinance Prohibiting ShortTime Admission, Short-Time Admission Rates, and Wash-Up Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila" (the Ordinance). I. The facts are as follows: On December 3, 1992, City Mayor Alfredo S. Lim (Mayor Lim) signed into law the Ordinance.4 The Ordinance is reproduced in full, hereunder: SECTION 1. Declaration of Policy. It is hereby the declared policy of the City Government to protect the best interest, health and welfare, and the morality of its constituents in general and the youth in particular. SEC. 2. Title. This ordinance shall be known as "An Ordinance" prohibiting short time admission in hotels, motels, lodging houses, pension houses and similar establishments in the City of Manila.

Approved by His Honor, the Mayor on December 3, 1992. On December 15, 1992, the Malate Tourist and Development Corporation (MTDC) filed a complaint for declaratory relief with prayer for a writ of preliminary injunction and/or temporary restraining order ( TRO)5 with the Regional Trial Court (RTC) of Manila, Branch 9 impleading as defendant, herein respondent City of Manila (the City) represented by Mayor Lim.6 MTDC prayed that the Ordinance, insofar as it includes motels and inns as among its prohibited establishments, be declared invalid and unconstitutional. MTDC claimed that as owner and operator of the Victoria Court in Malate, Manila it was authorized by Presidential Decree (P.D.) No. 259 to admit customers on a short time basis as well as to charge customers wash up rates for stays of only three hours. On December 21, 1992, petitioners White Light Corporation (WLC), Titanium Corporation (TC) and Sta. Mesa Tourist and Development Corporation (STDC) filed a motion to intervene and to admit attached complaint-in-intervention7 on the ground that the Ordinance directly affects their business interests as operators of drive-in-hotels and motels in Manila.8 The three companies are components of the Anito Group of Companies which owns and operates several hotels and motels in Metro Manila.9

On December 23, 1992, the RTC granted the motion to intervene.10 The RTC also notified the Solicitor General of the proceedings pursuant to then Rule 64, Section 4 of the Rules of Court. On the same date, MTDC moved to withdraw as plaintiff.11 On December 28, 1992, the RTC granted MTDC's motion to withdraw.12 The RTC issued a TRO on January 14, 1993, directing the City to cease and desist from enforcing the Ordinance.13 The City filed an Answer dated January 22, 1993 alleging that the Ordinance is a legitimate exercise of police power.14 On February 8, 1993, the RTC issued a writ of preliminary injunction ordering the city to desist from the enforcement of the Ordinance.15 A month later, on March 8, 1993, the Solicitor General filed his Comment arguing that the Ordinance is constitutional. During the pre-trial conference, the WLC, TC and STDC agreed to submit the case for decision without trial as the case involved a purely legal question.16 On October 20, 1993, the RTC rendered a decision declaring the Ordinance null and void. The dispositive portion of the decision reads: WHEREFORE, in view of all the foregoing, [O]rdinance No. 7774 of the City of Manila is hereby declared null and void. Accordingly, the preliminary injunction heretofor issued is hereby made permanent. SO ORDERED.17 The RTC noted that the ordinance "strikes at the personal liberty of the individual guaranteed and jealously guarded by the Constitution."18 Reference was made to the provisions of the Constitution encouraging private enterprises and the incentive to needed investment, as well as the right to operate economic enterprises. Finally, from the observation that the illicit relationships the Ordinance sought to dissuade could nonetheless be consummated by simply paying for a 12-hour stay, the RTC likened the law to the ordinance annulled in Ynot v. Intermediate Appellate Court,19 where the legitimate purpose of preventing indiscriminate slaughter of carabaos was sought to be effected through an inter-province ban on the transport of carabaos and carabeef. The City later filed a petition for review on certiorari with the Supreme Court.20 The petition was docketed as G.R. No. 112471. However in a resolution dated January 26, 1994, the Court treated the petition as a petition forcertiorari and referred the petition to the Court of Appeals.21 Before the Court of Appeals, the City asserted that the Ordinance is a valid exercise of police power pursuant to Section 458 (4)(iv) of the Local Government Code which confers on cities, among other local government units, the power:

[To] regulate the establishment, operation and maintenance of cafes, restaurants, beerhouses, hotels, motels, inns, pension houses, lodging houses and other similar establishments, including tourist guides and transports.22 The Ordinance, it is argued, is also a valid exercise of the power of the City under Article III, Section 18(kk) of the Revised Manila Charter, thus: "to enact all ordinances it may deem necessary and proper for the sanitation and safety, the furtherance of the prosperity and the promotion of the morality, peace, good order, comfort, convenience and general welfare of the city and its inhabitants, and such others as be necessary to carry into effect and discharge the powers and duties conferred by this Chapter; and to fix penalties for the violation of ordinances which shall not exceed two hundred pesos fine or six months imprisonment, or both such fine and imprisonment for a single offense.23 Petitioners argued that the Ordinance is unconstitutional and void since it violates the right to privacy and the freedom of movement; it is an invalid exercise of police power; and it is an unreasonable and oppressive interference in their business. The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the Ordinance.24 First, it held that the Ordinance did not violate the right to privacy or the freedom of movement, as it only penalizes the owners or operators of establishments that admit individuals for short time stays. Second, the virtually limitless reach of police power is only constrained by having a lawful object obtained through a lawful method. The lawful objective of the Ordinance is satisfied since it aims to curb immoral activities. There is a lawful method since the establishments are still allowed to operate. Third, the adverse effect on the establishments is justified by the well-being of its constituents in general. Finally, as held in Ermita-Malate Motel Operators Association v. City Mayor of Manila, liberty is regulated by law. TC, WLC and STDC come to this Court via petition for review on certiorari.25 In their petition and Memorandum, petitioners in essence repeat the assertions they made before the Court of Appeals. They contend that the assailed Ordinance is an invalid exercise of police power. II. We must address the threshold issue of petitioners standing. Petitioners allege that as owners of establishments offering "wash-up" rates, their business is being unlawfully interfered with by the Ordinance. However, petitioners also allege that the equal protection rights of their clients are also being interfered with. Thus, the crux of the matter is whether or not these establishments have the requisite standing to plead for protection of their patrons' equal protection rights.

Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party's participation in the case. More importantly, the doctrine of standing is built on the principle of separation of powers,26 sparing as it does unnecessary interference or invalidation by the judicial branch of the actions rendered by its co-equal branches of government. The requirement of standing is a core component of the judicial system derived directly from the Constitution.27The constitutional component of standing doctrine incorporates concepts which concededly are not susceptible of precise definition.28 In this jurisdiction, the extancy of "a direct and personal interest" presents the most obvious cause, as well as the standard test for a petitioner's standing.29 In a similar vein, the United States Supreme Court reviewed and elaborated on the meaning of the three constitutional standing requirements of injury, causation, and redressability in Allen v. Wright.30 Nonetheless, the general rules on standing admit of several exceptions such as the overbreadth doctrine, taxpayer suits, third party standing and, especially in the Philippines, the doctrine of transcendental importance.31 For this particular set of facts, the concept of third party standing as an exception and the overbreadth doctrine are appropriate. In Powers v. Ohio,32 the United States Supreme Court wrote that: "We have recognized the right of litigants to bring actions on behalf of third parties, provided three important criteria are satisfied: the litigant must have suffered an injury-in-fact, thus giving him or her a "sufficiently concrete interest" in the outcome of the issue in dispute; the litigant must have a close relation to the third party; and there must exist some hindrance to the third party's ability to protect his or her own interests."33 Herein, it is clear that the business interests of the petitioners are likewise injured by the Ordinance. They rely on the patronage of their customers for their continued viability which appears to be threatened by the enforcement of the Ordinance. The relative silence in constitutional litigation of such special interest groups in our nation such as the American Civil Liberties Union in the United States may also be construed as a hindrance for customers to bring suit.34 American jurisprudence is replete with examples where parties-in-interest were allowed standing to advocate or invoke the fundamental due process or equal protection claims of other persons or classes of persons injured by state action. In Griswold v. Connecticut,35 the United States Supreme Court held that physicians had standing to challenge a reproductive health statute that would penalize them as accessories as well as to plead the constitutional protections available to their patients. The Court held that: "The rights of husband and wife, pressed here, are likely to be diluted or adversely affected unless those rights are considered in a suit involving those who have this kind of confidential relation to them."36

An even more analogous example may be found in Craig v. Boren,37 wherein the United States Supreme Court held that a licensed beverage vendor has standing to raise the equal protection claim of a male customer challenging a statutory scheme prohibiting the sale of beer to males under the age of 21 and to females under the age of 18. The United States High Court explained that the vendors had standing "by acting as advocates of the rights of third parties who seek access to their market or function."38 Assuming arguendo that petitioners do not have a relationship with their patrons for the former to assert the rights of the latter, the overbreadth doctrine comes into play. In overbreadth analysis, challengers to government actionare in effect permitted to raise the rights of third parties. Generally applied to statutes infringing on the freedom of speech, the overbreadth doctrine applies when a statute needlessly restrains even constitutionally guaranteed rights.39 In this case, the petitioners claim that the Ordinance makes a sweeping intrusion into the right to liberty of their clients. We can see that based on the allegations in the petition, the Ordinance suffers from overbreadth. We thus recognize that the petitioners have a right to assert the constitutional rights of their clients to patronize their establishments for a "wash-rate" time frame. III. To students of jurisprudence, the facts of this case will recall to mind not only the recent City of Manila ruling, but our 1967 decision in Ermita-Malate Hotel and Motel Operations Association, Inc., v. Hon. City Mayor of Manila.40Ermita-Malate concerned the City ordinance requiring patrons to fill up a prescribed form stating personal information such as name, gender, nationality, age, address and occupation before they could be admitted to a motel, hotel or lodging house. This earlier ordinance was precisely enacted to minimize certain practices deemed harmful to public morals. A purpose similar to the annulled ordinance in City of Manila which sought a blanket ban on motels, inns and similar establishments in the Ermita-Malate area. However, the constitutionality of the ordinance in Ermita-Malate was sustained by the Court. The common thread that runs through those decisions and the case at bar goes beyond the singularity of the localities covered under the respective ordinances. All three ordinances were enacted with a view of regulating public morals including particular illicit activity in transient lodging establishments. This could be described as the middle case, wherein there is no wholesale ban on motels and hotels but the services offered by these establishments have been severely restricted. At its core, this is another case about the extent to which the State can intrude into and regulate the lives of its citizens. The test of a valid ordinance is well established. A long line of decisions including City of Manila has held that for an ordinance to be valid, it must not only be within the corporate powers of the local government unit to enact and pass according to the procedure prescribed by law, it must also conform to the following substantive requirements: (1) must not contravene the Constitution or any statute; (2) must not be unfair or

oppressive; (3) must not be partial or discriminatory; (4) must not prohibit but may regulate trade; (5) must be general and consistent with public policy; and (6) must not be unreasonable.41 The Ordinance prohibits two specific and distinct business practices, namely wash rate admissions and renting out a room more than twice a day. The ban is evidently sought to be rooted in the police power as conferred on local government units by the Local Government Code through such implements as the general welfare clause. A. Police power, while incapable of an exact definition, has been purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response as the conditions warrant.42 Police power is based upon the concept of necessity of the State and its corresponding right to protect itself and its people.43 Police power has been used as justification for numerous and varied actions by the State. These range from the regulation of dance halls,44 movie theaters,45 gas stations46 and cockpits.47 The awesome scope of police power is best demonstrated by the fact that in its hundred or so years of presence in our nations legal system, its use has rarely been denied. The apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments for illicit sex, prostitution, drug use and alike. These goals, by themselves, are unimpeachable and certainly fall within the ambit of the police power of the State. Yet the desirability of these ends do not sanctify any and all means for their achievement. Those means must align with the Constitution, and our emerging sophisticated analysis of its guarantees to the people. The Bill of Rights stands as a rebuke to the seductive theory of Macchiavelli, and, sometimes even, the political majorities animated by his cynicism. Even as we design the precedents that establish the framework for analysis of due process or equal protection questions, the courts are naturally inhibited by a due deference to the co-equal branches of government as they exercise their political functions. But when we are compelled to nullify executive or legislative actions, yet another form of caution emerges. If the Court were animated by the same passing fancies or turbulent emotions that motivate many political decisions, judicial integrity is compromised by any perception that the judiciary is merely the third political branch of government. We derive our respect and good standing in the annals of history by acting as judicious and neutral arbiters of the rule of law, and there is no surer way to that end than through the development of rigorous and sophisticated legal standards through which the courts analyze the most fundamental and far-reaching constitutional questions of the day. B.

The primary constitutional question that confronts us is one of due process, as guaranteed under Section 1, Article III of the Constitution. Due process evades a precise definition.48 The purpose of the guaranty is to prevent arbitrary governmental encroachment against the life, liberty and property of individuals. The due process guaranty serves as a protection against arbitrary regulation or seizure. Even corporations and partnerships are protected by the guaranty insofar as their property is concerned. The due process guaranty has traditionally been interpreted as imposing two related but distinct restrictions on government, "procedural due process" and "substantive due process." Procedural due process refers to the procedures that the government must follow before it deprives a person of life, liberty, or property.49 Procedural due process concerns itself with government action adhering to the established process when it makes an intrusion into the private sphere. Examples range from the form of notice given to the level of formality of a hearing. If due process were confined solely to its procedural aspects, there would arise absurd situation of arbitrary government action, provided the proper formalities are followed. Substantive due process completes the protection envisioned by the due process clause. It inquires whether the government has sufficient justification for depriving a person of life, liberty, or property.50 The question of substantive due process, moreso than most other fields of law, has reflected dynamism in progressive legal thought tied with the expanded acceptance of fundamental freedoms. Police power, traditionally awesome as it may be, is now confronted with a more rigorous level of analysis before it can be upheld. The vitality though of constitutional due process has not been predicated on the frequency with which it has been utilized to achieve a liberal result for, after all, the libertarian ends should sometimes yield to the prerogatives of the State. Instead, the due process clause has acquired potency because of the sophisticated methodology that has emerged to determine the proper metes and bounds for its application. C. The general test of the validity of an ordinance on substantive due process grounds is best tested when assessed with the evolved footnote 4 test laid down by the U.S. Supreme Court in U.S. v. Carolene Products.51 Footnote 4 of the Carolene Products case acknowledged that the judiciary would defer to the legislature unless there is a discrimination against a "discrete and insular" minority or infringement of a "fundamental right."52 Consequently, two standards of judicial review were established: strict scrutiny for laws dealing with freedom of the mind or restricting the political process, and the rational basis standard of review for economic legislation. A third standard, denominated as heightened or immediate scrutiny, was later adopted by the U.S. Supreme Court for evaluating classifications based on gender 53 and

legitimacy.54 Immediate scrutiny was adopted by the U.S. Supreme Court in Craig,55 after the Court declined to do so in Reed v. Reed.56 While the test may have first been articulated in equal protection analysis, it has in the United States since been applied in all substantive due process cases as well. We ourselves have often applied the rational basis test mainly in analysis of equal protection challenges.57 Using the rational basis examination, laws or ordinances are upheld if they rationally further a legitimate governmental interest.58 Under intermediate review, governmental interest is extensively examined and the availability of less restrictive measures is considered.59 Applying strict scrutiny, the focus is on the presence of compelling, rather than substantial, governmental interest and on the absence of less restrictive means for achieving that interest. In terms of judicial review of statutes or ordinances, strict scrutiny refers to the standard for determining the quality and the amount of governmental interest brought to justify the regulation of fundamental freedoms.60 Strict scrutiny is used today to test the validity of laws dealing with the regulation of speech, gender, or race as well as other fundamental rights as expansion from its earlier applications to equal protection. 61 The United States Supreme Court has expanded the scope of strict scrutiny to protect fundamental rights such as suffrage,62 judicial access63 and interstate travel.64 If we were to take the myopic view that an Ordinance should be analyzed strictly as to its effect only on the petitioners at bar, then it would seem that the only restraint imposed by the law which we are capacitated to act upon is the injury to property sustained by the petitioners, an injury that would warrant the application of the most deferential standard the rational basis test. Yet as earlier stated, we recognize the capacity of the petitioners to invoke as well the constitutional rights of their patrons those persons who would be deprived of availing short time access or wash-up rates to the lodging establishments in question. Viewed cynically, one might say that the infringed rights of these customers were are trivial since they seem shorn of political consequence. Concededly, these are not the sort of cherished rights that, when proscribed, would impel the people to tear up their cedulas. Still, the Bill of Rights does not shelter gravitas alone. Indeed, it is those "trivial" yet fundamental freedoms which the people reflexively exercise any day without the impairing awareness of their constitutional consequence that accurately reflect the degree of liberty enjoyed by the people. Liberty, as integrally incorporated as a fundamental right in the Constitution, is not a Ten Commandments-style enumeration of what may or what may not be done; but rather an atmosphere of freedom where the people do not feel labored under a Big Brother presence as they interact with each other, their society and nature, in a manner innately understood by them as inherent, without doing harm or injury to others. D.

The rights at stake herein fall within the same fundamental rights to liberty which we upheld in City of Manila v. Hon. Laguio, Jr. We expounded on that most primordial of rights, thus: Liberty as guaranteed by the Constitution was defined by Justice Malcolm to include "the right to exist and the right to be free from arbitrary restraint or servitude. The term cannot be dwarfed into mere freedom from physical restraint of the person of the citizen, but is deemed to embrace the right of man to enjoy the facilities with which he has been endowed by his Creator, subject only to such restraint as are necessary for the common welfare."[65] In accordance with this case, the rights of the citizen to be free to use his faculties in all lawful ways; to live and work where he will; to earn his livelihood by any lawful calling; and to pursue any avocation are all deemed embraced in the concept of liberty.[66] The U.S. Supreme Court in the case of Roth v. Board of Regents, sought to clarify the meaning of "liberty." It said: While the Court has not attempted to define with exactness the liberty . . . guaranteed [by the Fifth and Fourteenth Amendments], the term denotes not merely freedom from bodily restraint but also the right of the individual to contract, to engage in any of the common occupations of life, to acquire useful knowledge, to marry, establish a home and bring up children, to worship God according to the dictates of his own conscience, and generally to enjoy those privileges long recognized . . . as essential to the orderly pursuit of happiness by free men. In a Constitution for a free people, there can be no doubt that the meaning of "liberty" must be broad indeed.67[Citations omitted] It cannot be denied that the primary animus behind the ordinance is the curtailment of sexual behavior. The City asserts before this Court that the subject establishments "have gained notoriety as venue of prostitution, adultery and fornications in Manila since they provide the necessary atmosphere for clandestine entry, presence and exit and thus became the ideal haven for prostitutes and thrill-seekers."68 Whether or not this depiction of a mise-en-scene of vice is accurate, it cannot be denied that legitimate sexual behavior among willing married or consenting single adults which is constitutionally protected69 will be curtailed as well, as it was in the City of Manila case. Our holding therein retains significance for our purposes: The concept of liberty compels respect for the individual whose claim to privacy and interference demands respect. As the case of Morfe v. Mutuc, borrowing the words of Laski, so very aptly stated: Man is one among many, obstinately refusing reduction to unity. His separateness, his isolation, are indefeasible; indeed, they are so fundamental that they are the basis on which his civic obligations are built. He cannot abandon the consequences of his isolation, which are, broadly speaking, that his experience is private, and the will built out of that experience personal to himself. If he surrenders his will to others, he

surrenders himself. If his will is set by the will of others, he ceases to be a master of himself. I cannot believe that a man no longer a master of himself is in any real sense free. Indeed, the right to privacy as a constitutional right was recognized in Morfe, the invasion of which should be justified by a compelling state interest. Morfe accorded recognition to the right to privacy independently of its identification with liberty; in itself it is fully deserving of constitutional protection. Governmental powers should stop short of certain intrusions into the personal life of the citizen.70 We cannot discount other legitimate activities which the Ordinance would proscribe or impair. There are very legitimate uses for a wash rate or renting the room out for more than twice a day. Entire families are known to choose pass the time in a motel or hotel whilst the power is momentarily out in their homes. In transit passengers who wish to wash up and rest between trips have a legitimate purpose for abbreviated stays in motels or hotels. Indeed any person or groups of persons in need of comfortable private spaces for a span of a few hours with purposes other than having sex or using illegal drugs can legitimately look to staying in a motel or hotel as a convenient alternative. E. That the Ordinance prevents the lawful uses of a wash rate depriving patrons of a product and the petitioners of lucrative business ties in with another constitutional requisite for the legitimacy of the Ordinance as a police power measure. It must appear that the interests of the public generally, as distinguished from those of a particular class, require an interference with private rights and the means must be reasonably necessary for the accomplishment of the purpose and not unduly oppressive of private rights.71 It must also be evident that no other alternative for the accomplishment of the purpose less intrusive of private rights can work. More importantly, a reasonable relation must exist between the purposes of the measure and the means employed for its accomplishment, for even under the guise of protecting the public interest, personal rights and those pertaining to private property will not be permitted to be arbitrarily invaded.72 Lacking a concurrence of these requisites, the police measure shall be struck down as an arbitrary intrusion into private rights. As held in Morfe v. Mutuc, the exercise of police power is subject to judicial review when life, liberty or property is affected. 73 However, this is not in any way meant to take it away from the vastness of State police power whose exercise enjoys the presumption of validity.74 Similar to the Comelec resolution requiring newspapers to donate advertising space to candidates, this Ordinance is a blunt and heavy instrument.75 The Ordinance makes no distinction between places frequented by patrons engaged in illicit activities and patrons engaged in legitimate actions. Thus it prevents legitimate use of places where illicit activities are rare or even unheard of. A plain reading of section 3 of the Ordinance

shows it makes no classification of places of lodging, thus deems them all susceptible to illicit patronage and subject them without exception to the unjustified prohibition. The Court has professed its deep sentiment and tenderness of the Ermita-Malate area, its longtime home,76 and it is skeptical of those who wish to depict our capital city the Pearl of the Orient as a modern-day Sodom or Gomorrah for the Third World set. Those still steeped in Nick Joaquin-dreams of the grandeur of Old Manila will have to accept that Manila like all evolving big cities, will have its problems. Urban decay is a fact of mega cities such as Manila, and vice is a common problem confronted by the modern metropolis wherever in the world. The solution to such perceived decay is not to prevent legitimate businesses from offering a legitimate product. Rather, cities revive themselves by offering incentives for new businesses to sprout up thus attracting the dynamism of individuals that would bring a new grandeur to Manila. The behavior which the Ordinance seeks to curtail is in fact already prohibited and could in fact be diminished simply by applying existing laws. Less intrusive measures such as curbing the proliferation of prostitutes and drug dealers through active police work would be more effective in easing the situation. So would the strict enforcement of existing laws and regulations penalizing prostitution and drug use. These measures would have minimal intrusion on the businesses of the petitioners and other legitimate merchants. Further, it is apparent that the Ordinance can easily be circumvented by merely paying the whole day rate without any hindrance to those engaged in illicit activities. Moreover, drug dealers and prostitutes can in fact collect "wash rates" from their clientele by charging their customers a portion of the rent for motel rooms and even apartments. IV. We reiterate that individual rights may be adversely affected only to the extent that may fairly be required by the legitimate demands of public interest or public welfare. The State is a leviathan that must be restrained from needlessly intruding into the lives of its citizens. However well-intentioned the Ordinance may be, it is in effect an arbitrary and whimsical intrusion into the rights of the establishments as well as their patrons. The Ordinance needlessly restrains the operation of the businesses of the petitioners as well as restricting the rights of their patrons without sufficient justification. The Ordinance rashly equates wash rates and renting out a room more than twice a day with immorality without accommodating innocuous intentions. The promotion of public welfare and a sense of morality among citizens deserves the full endorsement of the judiciary provided that such measures do not trample rights this Court is sworn to protect.77 The notion that the promotion of public morality is a function of the State is as old as Aristotle.78 The advancement of moral relativism as a school of philosophy does not de-legitimize the role of morality in law, even if it may foster wider debate on which particular behavior to penalize. It is conceivable that a society with relatively little shared morality among its citizens could be functional so

long as the pursuit of sharply variant moral perspectives yields an adequate accommodation of different interests.79 To be candid about it, the oft-quoted American maxim that "you cannot legislate morality" is ultimately illegitimate as a matter of law, since as explained by Calabresi, that phrase is more accurately interpreted as meaning that efforts to legislate morality will fail if they are widely at variance with public attitudes about right and wrong.80 Our penal laws, for one, are founded on age-old moral traditions, and as long as there are widely accepted distinctions between right and wrong, they will remain so oriented. Yet the continuing progression of the human story has seen not only the acceptance of the right-wrong distinction, but also the advent of fundamental liberties as the key to the enjoyment of life to the fullest. Our democracy is distinguished from non-free societies not with any more extensive elaboration on our part of what is moral and immoral, but from our recognition that the individual liberty to make the choices in our lives is innate, and protected by the State. Independent and fair-minded judges themselves are under a moral duty to uphold the Constitution as the embodiment of the rule of law, by reason of their expression of consent to do so when they take the oath of office, and because they are entrusted by the people to uphold the law.81 Even as the implementation of moral norms remains an indispensable complement to governance, that prerogative is hardly absolute, especially in the face of the norms of due process of liberty. And while the tension may often be left to the courts to relieve, it is possible for the government to avoid the constitutional conflict by employing more judicious, less drastic means to promote morality. WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals is REVERSED, and the Decision of the Regional Trial Court of Manila, Branch 9, is REINSTATED. Ordinance No. 7774 is hereby declared UNCONSTITUTIONAL. No pronouncement as to costs. City Council of Manila enacted the Manila City Ordinance No. 7774 entitled, An Ordinance Prohibiting Short-Time Admission, Short-Time Admission Rates, and WashUp Rate Schemes in Hotels, Motels, Inns, Lodging Houses, Pension Houses, and Similar Establishments in the City of Manila. Section 4 of the Ordinance states that Short-time admission shall mean admittance and charging of room rates for less than twelve (12) hours at any given time or the renting out of rooms more than twice a day or any other term that may be concocted by owners or managers of said establishments but would mean the same or would bear the same meaning. The Ordinance provides a fine of P5,000 or imprisonment for a period not exceeding one (1) year or both for those found guilty of violating the same. Malate Tourist and Development Corporation (MTDC), owner and operator of Victoria Court challenged the validity of the Ordinance. White Light Corporation (WLC), Titanium Corporation (TC) and Sta. Mesa Tourist and Development Corporation (STDC) intervened in the case. The three companies are

components of the Anito Group of Companies which owns and operates several hotels and motels in Metro Manila. The RTC noted that the ordinance strikes at the personal liberty of the individual guaranteed and jealously guarded by the Constitution. Reference was made to the provisions in the Constitution encouraging private enterprises and the incentive to needed investment, as well as the right to operate economic enterprises. It also said that the illicit relationships the Ordinance sought to dissuade could nonetheless be consummated by simply paying for a 12-hour stay. The Court of Appeals reversed the decision of the RTC and affirmed the constitutionality of the Ordinance. First, the Ordinance did not violate the right to privacy or freedom of movement because it only penalizes owners or operators of establishments that admit individuals for short time stays. Second, police power of the state is only constrained by having a lawful subject obtained through a lawful method. Third, the adverse effect in the establishment justified by the well-being of its constituents in general. The Supreme Court recognized the petitioners right to assert the constitutional rights of their clients to patronize their establishments for a wash-rate time frame. Standing or locus standi is the ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that partys participation in the case. Nonetheless, the general rules on standing admit of several exceptions such as the overbreadth doctrine, taxpayer suits, third party standing and, especially in the Philippines, the doctrine of transcendental importance. In this case, the concept of third party standing as an exception and the overbreadth doctrine are appropriate. The validity of the Ordinance is assailed for its restraint on constitutionally guaranteed rights. The Court noted that the apparent goal of the Ordinance is to minimize if not eliminate the use of the covered establishments for illicit sex, prostitution and drug use alike. These goals, by themselves, are unimpeachable and certainly fall within the ambit of the police power of the State. Yet the desirability of these ends do not sanctify any and all means of achievement. The Ordinance prohibits two specific and distinct business practices, namely wash rate admissions and renting out a room more than twice a day. The Supreme Court said that legitimate sexual behavior among consenting married or consenting single adults which is constitutionally protected will be curtailed as well. Also, by way of example, the Court cited families who experience power interruptions that need the facilities of motels or hotels. In addition, the Court pointed out to in transit passengers who wish to wash up and rest between trips, a legitimate purpose for abbreviated stays in motels or hotels. The High Court held that however wellintentioned the Ordinance may be, it is in effect an arbitrary and whimsical intrusion into the rights of establishments as well as their patrons. The ordinance needlessly restrains the operation of the businesses of the petitioners as well as restricting the rights of their patrons without sufficient justification.

EN BANC G.R. No. 161357 November 30, 2005 ELENA P. DYCAICO, Petitioner, vs. SOCIAL SECURITY SYSTEM and SOCIAL SECURITY COMMISSION, Respondents. DECISION CALLEJO, SR., J.: Before the Court is the petition for review under Rule 45 of the Rules of Court filed by Elena P. Dycaico which seeks to reverse and set aside the Decision 1 dated April 15, 2003 of the Court of Appeals (CA) in CA-G.R. SP No. 69632. The assailed decision affirmed the Resolution dated February 6, 2002 of the Social Security Commission (SSC), denying the petitioners claim for survivors pension accruing from the death of her husband Bonifacio S. Dycaico, a Social Security System (SSS) member-pensioner. Likewise sought to be reversed and set aside is the appellate courts Resolution dated December 15, 2003, denying the petitioners motion for reconsideration. The case arose from the following undisputed facts: Bonifacio S. Dycaico became a member of the SSS on January 24, 1980. In his selfemployed data record (SSS Form RS-1), he named the petitioner, Elena P. Dycaico, and their eight children as his beneficiaries. At that time, Bonifacio and Elena lived together as husband and wife without the benefit of marriage. In June 1989, Bonifacio was considered retired and began receiving his monthly pension from the SSS. He continued to receive the monthly pension until he passed away on June 19, 1997. A few months prior to his death, however, Bonifacio married the petitioner on January 6, 1997. Shortly after Bonifacios death, the petitioner filed with the SSS an application for survivors pension. Her application, however, was denied on the ground that under Section 12-B(d) of Republic Act (Rep. Act) No. 8282 or the Social Security Law2 she could not be considered a primary beneficiary of Bonifacio as of the date of his retirement. The said proviso reads: Sec. 12-B. Retirement Benefits.

(d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension. Applying this proviso, the petitioner was informed that the Records show that the member [referring to Bonifacio] was considered retired on June 5, 1989 and monthly pension was cancelled upon our receipt of a report on his death on June 19, 1997. In your death claim application, submitted marriage contract with the deceased member shows that you were married in 1997 or after his retirement date; hence, you could not be considered his primary beneficiary. In view of this, we regret that there is no other benefit due you. However, if you do not conform with us, you may file a formal petition with our Social Security Commission to determine your benefit eligibility.3 On July 9, 2001, the petitioner filed with the SSC a petition alleging that the denial of her survivors pension was unjustified. She contended that Bonifacio designated her and their children as primary beneficiaries in his SSS Form RS-1 and that it was not indicated therein that only legitimate family members could be made beneficiaries. Section 12B(d) of Rep. Act No. 8282 does not, likewise, require that the primary beneficiaries be legitimate relatives of the member to be entitled to the survivors pension. The SSS is legally bound to respect Bonifacios designation of them as his beneficiaries. Further, Rep. Act No. 8282 should be interpreted to promote social justice. On February 6, 2002, the SSC promulgated its Resolution affirming the denial of the petitioners claim. The SSC refuted the petitioners contention that primary beneficiaries need not be legitimate family members by citing the definitions of "primary beneficiaries" and "dependents" in Section 8 of Rep. Act No. 8282. Under paragraph (k) of the said provision, "primary beneficiaries" are "[t]he dependent spouse until he or she remarries, the dependent legitimate, legitimated or legally adopted, and illegitimate children " Paragraph (e) of the same provision, on the other hand, defines "dependents" as the following: "(1) [t]he legal spouse entitled by law to receive support from the member; (2) [t]he legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally; and (3) [t]he parent who is receiving regular support from the member." Based on the foregoing, according to the SSC, it has consistently ruled that entitlement to the survivors pension in ones capacity as primary beneficiary is premised on the legitimacy of relationship with and dependency for support upon the deceased SSS member during his lifetime.

Under Section 12-B(d) of Rep. Act No. 8282, the primary beneficiaries who are entitled to survivors pension are those who qualify as such as of the date of retirement of the deceased member. Hence, the petitioner, who was not then the legitimate spouse of Bonifacio as of the date of his retirement, could not be considered his primary beneficiary. The SSC further opined that Bonifacios designation of the petitioner as one of his primary beneficiaries in his SSS Form RS-1 is void, not only on moral considerations but also for misrepresentation. Accordingly, the petitioner is not entitled to claim the survivors pension under Section 12-B(d) of Rep. Act No. 8282. Aggrieved, the petitioner filed with the CA a petition for review of the SSCs February 6, 2002 Resolution. In the assailed Decision, dated April 15, 2003, the appellate court dismissed the petition. Citing the same provisions in Rep. Act No. 8282 as those cited by the SSC, the CA declared that since the petitioner was merely the common-law wife of Bonifacio at the time of his retirement in 1989, his designation of the petitioner as one of his beneficiaries in the SSS Form RS-1 in 1980 is void. The CA further observed that Bonifacios children with the petitioner could no longer qualify as primary beneficiaries because they have all reached twenty-one (21) years of age. The decretal portion of the assailed decision reads: WHEREFORE, premises considered, the Petition is DISMISSED and the assailed 06 February 2002 Resolution of respondent Commission is hereby AFFIRMED in toto. No costs. SO ORDERED.4 The petitioner sought reconsideration of the said decision but in the assailed Resolution dated December 15, 2003, the appellate court denied her motion. Hence, the petitioners recourse to this Court. The petitioner points out that the term "primary beneficiaries" as used in Section 12B(d) of Rep. Act No. 8282 does not have any qualification. She thus theorizes that regardless of whether the primary beneficiary designated by the member as such is legitimate or not, he or she is entitled to the survivors pension. Reliance by the appellate court and the SSC on the definitions of "primary beneficiaries" and "dependents" in Section 8 of Rep. Act No. 8282 is allegedly unwarranted because these definitions cannot modify Section 12-B(d) thereof. The petitioner maintains that when she and Bonifacio got married in January 1997, a few months before he passed away, they merely intended to legalize their relationship and had no intention to commit any fraud. Further, since Rep. Act No. 8282 is a social legislation, it should be construed liberally in favor of claimants like the petitioner. She cites the Courts pronouncement that "the sympathy of the law on social security is toward its beneficiaries, and the law, by its own terms, requires a construction of utmost liberality in their favor."5

The SSS, on the other hand, contends that Section 12-B(d) of Rep. Act No. 8282 should be read in conjunction with the definition of the terms "dependents" and "primary beneficiaries" in Section 8 thereof. Since the petitioner was not as yet the legal spouse of Bonifacio at the time of his retirement in 1989, she is not entitled to claim the survivors pension accruing at the time of his death. The SSS insists that the designation by Bonifacio of the petitioner and their illegitimate children in his SSS Form RS-1 is void. According to the SSS, there is nothing in Rep. Act No. 8282 which provides that "should there be no primary or secondary beneficiaries, the benefit accruing from the death of a member should go to his designated common-law spouse" and that "to rule otherwise would be to condone the designation of common-law spouses as beneficiaries, a clear case of circumventing the SS Law and a violation of public policy and morals."6 Finally, the SSS is of the opinion that Section 12-B(d) of Rep. Act No. 8282 is clear and explicit; hence, there is no room for its interpretation, only for application. In the Resolution dated July 19, 2005, the Court required the parties, as well as the Office of the Solicitor General, to file their respective comments on the issue of whether or not the proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282 violates the equal protection and due process clauses of the Constitution. The Court believes that this issue is intertwined with and indispensable to the resolution of the merits of the petition. In compliance therewith, in its comment, the SSC argues that the proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282 does not run afoul of the equal protection clause of the Constitution as it merely determines the reckoning date of qualification and entitlement of beneficiaries to the survivorship pension. It asserts that this classification of beneficiaries is based on valid and substantial distinctions that are germane to the legislative purpose of Rep. Act No. 8282. The SSC also impugns the marriage of the petitioner to Bonifacio after his retirement stating that it was contracted as an afterthought to enable her to qualify for the survivorship pension upon the latters death. It further alleges that there is no violation of the due process clause as the petitioner was given her day in court and was able to present her side. The SSS filed its separate comment and therein insists that the petitioner was not the legitimate spouse of the deceased member at the time when the contingency occurred (his retirement) and, therefore, she could not be considered a primary beneficiary within the contemplation of Rep. Act No. 8282. The SSS posits that the statutes intent is to give survivorship pension only to primary beneficiaries at the time of the retirement of the deceased member. Rep. Act No. 8282 itself ordains the persons entitled thereto and cannot be subject of change by the SSS. The Solicitor General agrees with the stance taken by the SSS that the proviso "as of the date of his retirement" merely marks the period when the primary beneficiary must be

so to be entitled to the benefits. It does not violate the equal protection clause because the classification resulting therefrom rests on substantial distinctions. Moreover, the condition as to the period for entitlement, i.e., as of the date of the members retirement, is relevant as it set the parameters for those availing of the benefits and it applies to all those similarly situated. The Solicitor General is also of the view that the said proviso does not offend the due process clause because claimants are given the opportunity to file their claims and to prove their case before the Commission. For clarity, Section 12-B(d) of Rep. Act No. 8282 is quoted anew below: Sec. 12-B. Retirement Benefits. (d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension. Under Section 8(k) of the same law, the "primary beneficiaries" are: 1. The dependent spouse until he or she remarries; and 2. The dependent legitimate, legitimated or legally adopted, and illegitimate children. Further, the "dependent spouse" and "dependent children" are qualified under paragraph (e) of the same section as follows: 1. The legal spouse entitled by law to receive support until he or she remarries; and 2. The dependent legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one (21) years of age, or if over twenty-one years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. The SSS denied the petitioners application for survivors pension on the sole ground that she was not the legal spouse of Bonifacio "as of the date of his retirement;" hence, she could not be considered as his primary beneficiary under Section 12-B(d) of Rep. Act No. 8282. The Court holds that the proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282, which qualifies the term "primary beneficiaries," is unconstitutional for it violates the due process and equal protection clauses of the Constitution.7

In an analogous case, Government Service Insurance System v. Montesclaros,8 the Court invalidated the proviso in Presidential Decree (P.D.) No. 1146 9 which stated that "the dependent spouse shall not be entitled to said pension if his marriage with the pensioner is contracted within three years before the pensioner qualified for the pension." In the said case, the Court characterized retirement benefits as property interest of the pensioner as well as his or her surviving spouse. The proviso, which denied a dependent spouses claim for survivorship pension if the dependent spouse contracted marriage to the pensioner within the three-year prohibited period, was declared offensive to the due process clause. There was outright confiscation of benefits due the surviving spouse without giving him or her an opportunity to be heard. The proviso was also held to infringe the equal protection clause as it discriminated against dependent spouses who contracted their respective marriages to pensioners within three years before they qualified for their pension. For reasons which shall be discussed shortly, the proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282 similarly violates the due process and equal protection clauses of the Constitution. The proviso infringes the equal protection clause As illustrated by the petitioners case, the proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282 which qualifies the term "primary beneficiaries" results in the classification of dependent spouses as primary beneficiaries into two groups: (1) Those dependent spouses whose respective marriages to SSS members were contracted prior to the latters retirement; and (2) Those dependent spouses whose respective marriages to SSS members were contracted after the latters retirement. Underlying these two classifications of dependent spouses is that their respective marriages are valid. In other words, both groups are legitimate or legal spouses. The distinction between them lies solely on the date the marriage was contracted. The petitioner belongs to the second group of dependent spouses, i.e., her marriage to Bonifacio was contracted after his retirement. As such, she and those similarly situated do not qualify as "primary beneficiaries" under Section 12-B(d) of Rep. Act No. 8282 and, therefore, are not entitled to survivors pension under the same provision by reason of the subject proviso. It is noted that the eligibility of "dependent children" who are biological offsprings of a retired SSS member to be considered as his primary beneficiaries under Section 12-B(d) of Rep. Act No. 8282 is not substantially affected by the proviso "as of the date of his retirement." A biological child, whether legitimate, legitimated or illegitimate, is entitled to survivors pension upon the death of a retired SSS member so long as the said child is

unmarried, not gainfully employed and has not reached twenty-one (21) years of age, or if over twenty-one (21) years of age, he or she is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally. On the other hand, the eligibility of legally adopted children to be considered "primary beneficiaries" under Section 12-B(d) of Rep. Act No. 8282 is affected by the proviso "as of the date of his retirement" in the same manner as the dependent spouses. A legally adopted child who satisfies the requirements in Section 8(e)(2)10 thereof is considered a primary beneficiary of a retired SSS member upon the latters death only if the said child had been legally adopted prior to the members retirement. One who was legally adopted by the SSS member after his or her retirement does not qualify as a primary beneficiary for the purpose of entitlement to survivors pension under Section 12-B(d) of Rep. Act No. 8282. In any case, the issue that now confronts the Court involves a dependent spouse who claims to have been unjustly deprived of her survivors pension under Section 12-B(d) of Rep. Act No. 8282. Hence, the subsequent discussion will focus on the resultant classification of the dependent spouses as primary beneficiaries under the said provision. As earlier stated, the petitioner belongs to the second group of dependent spouses, i.e., her marriage to Bonifacio was contracted after his retirement. She and those similarly situated are undoubtedly discriminated against as the proviso "as of the date of his retirement" disqualifies them from being considered "primary beneficiaries" for the purpose of entitlement to survivors pension. Generally, a statute based on reasonable classification does not violate the constitutional guaranty of the equal protection clause of the law.11 With respect to Rep. Act No. 8282, in particular, as a social security law, it is recognized that it "is permeated with provisions that draw lines in classifying those who are to receive benefits. Congressional decisions in this regard are entitled to deference as those of the institution charged under our scheme of government with the primary responsibility for making such judgments in light of competing policies and interests."12 However, as in other statutes, the classification in Rep. Act No. 8282 with respect to entitlement to benefits, to be valid and reasonable, must satisfy the following requirements: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class.13 The legislative history of Rep. Act No. 8282 does not bear out the purpose of Congress in inserting the proviso "as of the date of his retirement" to qualify the term "primary beneficiaries" in Section 12-B(d) thereof. To the Courts mind, however, it reflects congressional concern with the possibility of relationships entered after retirement for the purpose of obtaining benefits. In particular, the proviso was apparently intended to

prevent sham marriages or those contracted by persons solely to enable one spouse to claim benefits upon the anticipated death of the other spouse. This concern is concededly valid. However, classifying dependent spouses and determining their entitlement to survivors pension based on whether the marriage was contracted before or after the retirement of the other spouse, regardless of the duration of the said marriage, bears no relation to the achievement of the policy objective of the law, i.e., "provide meaningful protection to members and their beneficiaries against the hazard of disability, sickness, maternity, old age, death and other contingencies resulting in loss of income or financial burden."14 The nexus of the classification to the policy objective is vague and flimsy. Put differently, such classification of dependent spouses is not germane to the aforesaid policy objective. For if it were the intention of Congress to prevent sham marriages or those entered in contemplation of imminent death, then it should have prescribed a definite "duration-ofrelationship" or durational period of relationship as one of the requirements for entitlement to survivors pension. For example, in the United States, a provision in their social security law which excludes from social security benefits the surviving wife and stepchild of a deceased wage earner who had their respective relationships to the wage earner for less than nine months prior to his death, was declared valid.15 Thus, nine months is recognized in the United States as the minimum duration of a marriage to consider it as having been contracted in good faith for the purpose of entitlement to survivorship pension. In contrast, the proviso "as of the date of his retirement" in Section 12-B(d) in Rep. Act No. 8282 effectively disqualifies from entitlement to survivors pension all those dependent spouses whose respective marriages to retired SSS members were contracted after the latters retirement. The duration of the marriage is not even considered. It is observed that, in certain instances, the retirement age under Rep. Act No. 8282 is sixty (60) years old.16 A marriage contracted by a retired SSS member after the said age may still last for more than ten years, assuming the member lives up to over seventy (70) years old. In such a case, it cannot be said that the marriage was a sham or was entered into solely for the purpose of enabling one spouse to obtain the financial benefits due upon the death of the other spouse. Nonetheless, the said surviving spouse is not entitled to survivors pension because he or she is not a primary beneficiary as of the date of retirement of the SSS member following Section 12-B(d) of Rep. Act No. 8282. Further, the classification of dependent spouses on the basis of whether their respective marriages to the SSS member were contracted prior to or after the latters retirement for the purpose of entitlement to survivors pension does not rest on real and substantial distinctions. It is arbitrary and discriminatory. It is too sweeping because the proviso "as of the date of his retirement," which effectively disqualifies the dependent spouses whose respective marriages to the retired SSS member were contracted after the latters retirement as primary beneficiaries, unfairly lumps all these marriages as sham relationships or were contracted solely for the purpose of acquiring benefits accruing

upon the death of the other spouse. The proviso thus unduly prejudices the rights of the legal surviving spouse, like the petitioner, and defeats the avowed policy of the law "to provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old age, death, and other contingencies resulting in loss of income or financial burden."17 The proviso infringes the due process clause As earlier opined, in Government Service Insurance System v. Montesclaros,18 the Court characterized retirement benefits as a property interest of a retiree. We held therein that "[i]n a pension plan where employee participation is mandatory, the prevailing view is that employees have contractual or vested rights in the pension where the pension is part of the terms of employment."19 Thus, it was ruled that, "where the employee retires and meets the eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause" and "[r]etirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law."20 Further, since pursuant to the pertinent law therein, the dependent spouse is entitled to survivorship pension, "a widows right to receive pension following the demise of her husband is also part of the husbands contractual compensation."21 Although the subject matter in the above-cited case involved the retirement benefits under P.D. No. 1146 or the Revised Government Service Insurance Act of 197722 covering government employees, the pronouncement therein that retirees enjoy a protected property interest in their retirement benefits applies squarely to those in the private sector under Rep. Act No. 8282. This is so because the mandatory contributions of both the employers23and the employees24 to the SSS do not, likewise, make the retirement benefits under Rep. Act No. 8282 mere gratuity but form part of the latters compensation. Even the retirement benefits of self-employed individuals, like Bonifacio, who have been included in the compulsory coverage of Rep. Act No. 8282 25 are not mere gratuity because they are required to pay both the employer and employee contributions.26 Further, under Rep. Act No. 8282, the surviving spouse is entitled to survivors pension accruing on the death of the member; hence, the surviving spouses right to receive such benefit following the demise of the wife or husband, as the case may be, is also part of the latters contractual compensation. The proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282 runs afoul of the due process clause as it outrightly deprives the surviving spouses whose respective marriages to the retired SSS members were contracted after the latters retirement of their survivors benefits. There is outright confiscation of benefits due such surviving spouses without giving them an opportunity to be heard. By this outright disqualification of the surviving spouses whose respective marriages to SSS members were contracted after the latters retirement, the proviso "as of the date of his retirement" qualifying the term "primary beneficiaries" for the purpose of entitlement to survivors pension has created the presumption that marriages contracted after the retirement date of SSS members were entered into for the purpose of securing

the benefits under Rep. Act No. 8282. This presumption, moreover, is conclusive because the said surviving spouses are not afforded any opportunity to disprove the presence of the illicit purpose. The proviso, as it creates this conclusive presumption, is unconstitutional because it presumes a fact which is not necessarily or universally true. In the United States, this kind of presumption is characterized as an "irrebuttable presumption" and statutes creating permanent and irrebutable presumptions have long been disfavored under the due process clause. 27 In the petitioners case, for example, she asserted that when she and Bonifacio got married in 1997, it was merely to legalize their relationship and not to commit fraud. This claim is quite believable. After all, they had been living together since 1980 and, in fact, during that time their eldest child was already twenty-four (24) years old. However, the petitioner was not given any opportunity to prove her claim that she was Bonifacios bona fide legal spouse as she was automatically disqualified from being considered as his primary beneficiary. In effect, the petitioner was deprived of the survivors benefits, a property interest, accruing from the death of Bonifacio without any opportunity to be heard. Standards of due process require that the petitioner be allowed to present evidence to prove that her marriage to Bonifacio was contracted in good faith and as his bona fide spouse she is entitled to the survivors pension accruing upon his death.28 Hence, the proviso "as of the date of his retirement" in Section 12-B(d) which deprives the petitioner and those similarly situated dependent spouses of retired SSS members this opportunity to be heard must be struck down. Conclusion Even as the proviso "as of the date of his retirement" in Section 12-B(d) is nullified, the enumeration of primary beneficiaries for the purpose of entitlement to survivors pension is not substantially affected since the following persons are considered as such under Section 8(k) of Rep. Act No. 8282: (1) The dependent spouse until he or she remarries; and (2) The dependent legitimate, legitimated or legally adopted, and illegitimate children. In relation thereto, Section 8(e) thereof qualifies the dependent spouse and dependent children as follows: (1) The legal spouse entitled by law to receive support from the member; (2) The legitimate, legitimated or legally adopted, and illegitimate child who is unmarried, not gainfully employed and has not reached twenty-one years (21) of age, or if over twenty-one (21) years of age, he is congenitally or while still a minor has been permanently incapacitated and incapable of self-support, physically or mentally.

Finally, the Court concedes that the petitioner did not raise the issue of the validity of the proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282. The rule is that the Court does not decide questions of a constitutional nature unless absolutely necessary to a decision of the case.29 However, the question of the constitutionality of the proviso is absolutely necessary for the proper resolution of the present case. Accordingly, the Court required the parties to present their arguments on this issue and proceeded to pass upon the same in the exercise of its equity jurisdiction and in order to render substantial justice to the petitioner who, presumably in her advanced age by now, deserves to receive forthwith the survivors pension accruing upon the death of her husband. WHEREFORE, the petition is GRANTED. The Decision dated April 15, 2003 and Resolution dated December 15, 2003 of the Court of Appeals in CA-G.R. SP No. 69632 are REVERSED and SET ASIDE. The proviso "as of the date of his retirement" in Section 12-B(d) of Rep. Act No. 8282 is declared VOID for being contrary to the due process and equal protection clauses of the Constitution. The Social Security System cannot deny the claim of petitioner Elena P. Dycaico for survivors pension on the basis of this invalid proviso. Elena Dycaico seeks to reverse the Decision of the Court of Appeals that affirmed the decision of Social Security Commission denying her claim for survivors pension which accrues from the death of her husband, Bonifacio Dycaico. Bonifacio Dycaico became a member of SSS and designated Elena Dycaico and their eight children as beneficiaries therein. At that time, Bonifacio and Elena lived together as husband and wife without the benefit of marriage. Nine years after, Bonifacio was considered retired and began receiving his monthly pension from the SSS. He continued to receive the monthly pension until he passed away. A few months prior to his death, however, Bonifacio married the petitioner Shortly after Bonifacios death, the petitioner filed with the SSS an application for survivors pension. Her application, however, was denied on the ground that they were not living under the benefit of marriage when Bonifacio became a member of SSS. The basis was Section 12-B(d) of Republic Act (Rep. Act) No. 8282 which reads: Sec. 12-B. Retirement Benefits. (d) Upon the death of the retired member, his primary beneficiaries as of the date of his retirement shall be entitled to receive the monthly pension.

An appeal was made to the Court of Appeals but it was, likewise, denied. The same Court ruled that that since the petitioner was merely the common-law wife of Bonifacio at the time of his retirement, his designation of the petitioner as one of his beneficiaries is void. The petitioner claims that there is no merit to the decision of Court of Appeals as the SSS law does is silent denying the beneficiarys claim for survivor pension. Issue: Whether or not there is a violation to equal protection clause of the Constitution. Held: The Supreme Court ruled in the positive. There is a violation of due process and equal protection. The Court holds that the proviso as of the date of his retirement in Section 12-B(d) of Rep. Act No. 8282, which qualifies the term primary beneficiaries, is unconstitutional for it violates the due process and equal protection clauses of the Constitution. If the said provision will be sustained, there will be an outright confiscation of benefits due to the surviving spouse without giving her opportunity to be heard. There is, therefore, a violation of due process. There is also a violation of equal protection of the Constitution. A statute, to be valid and reasonable, must satisfy the following requirements: must satisfy the following requirements: (1) it must rest on substantial distinctions; (2) it must be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and (4) it must apply equally to all members of the same class. Classifying dependent spouses and determining their entitlement to survivors pension based on whether the marriage was contracted before or after the retirement of the other spouse bears no relation to the achievement of the policy objective of the law Indeed, the SC does not find substantial distinction between spouses whose assignment as a beneficiary was made after the marriage and spouses whose assignment as a beneficiary was made before the marriage. The statute violates equal protection clause when it grants surviving pensions only to the spouses belonging to the former case and not to than the latter.

EN BANC G.R. Nos. 156556-57 October 4, 2011

Displaced or separated personnel as a result of the privatization, if qualified, shall be given preference in the hiring of the manpower requirements of the privatized companies. x x x5 Rule 336 of the IRR provided for the coverage and the guidelines for the separation benefits to be given to the employees affected. On November 18, 2002, pursuant to Section 63 of the EPIRA and Rule 33 of the IRR, the NPB passed NPB Resolution No. 2002-1247 which, among others, resolved that all NPC personnel shall be legally terminated on January 31, 2003 and shall be entitled to separation benefits. On the same day, the NPB passed NPB Resolution No. 20021258 which created a transition team to manage and implement the separation program. As a result of the foregoing NPB Resolutions, petitioner Enrique U. Betoy, together with thousands of his co-employees from the NPC were terminated. Hence, herein petition for certiorari with petitioner praying for the grant of the following reliefs from this Court, to wit: 1. Declaring National Power Board Resolution Nos. 2002-124 and 2002-125 and its Annex "B" Null and Void, the fact [that] it was done with extraordinary haste and in secrecy without the able participation of the Napocor Employees Consolidated Union (NECU) to represent all career civil service employees on issues affecting their rights to due process, equity, security of tenure, social benefits accrued to them, and as well as the disclosure of public transaction provisions of the 1987 Constitution because during its proceeding the National Power Board had acted with grave abuse of discretion and disregarding constitutional and statutory injunctions on removal of public servants and nondiminution of social benefits accrued to separated employees, thus, amounting to excess of jurisdiction; 2. Striking down Section 11, Section 48 and Section 52 of RA 9136 (EPIRA) for being violative of Section 13, Article VII of the 1987 Constitution and, therefore, unconstitutional; 3. Striking Section 34 of RA 9136 (EPIRA) for being exorbitant display of State Power and was not premised on the welfare of the FILIPINO PEOPLE or principle of salus populi est suprema lex; 4. Striking down Section 38 for RA 9136 (EPIRA) for being a prelude to Charter Change without a valid referendum for ratification of the entire voter citizens of the Philippine Republic;

ENRIQUE U. BETOY, Petitioner, vs. THE BOARD OF DIRECTORS, NATIONAL POWER CORPORATION, Respondent. DECISION PERALTA, J.: Before this Court is a special civil action for certiorari1 and supplemental petition for mandamus,2 specifically assailing National Power Board Resolutions No. 2002-124 and No. 2002-125, as well as Sections 11, 34, 38, 48, 52 and 63 of Republic Act (R.A.) No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (EPIRA). Also assailed is Rule 33 of the Implementing Rules and Regulations (IRR) of the EPIRA. The facts of the case are as follows: On June 8, 2001, the EPIRA was enacted by Congress with the goal of restructuring the electric power industry and privatization of the assets of the National Power Corporation (NPC). Pursuant to Section 483 of the EPIRA, a new National Power Board of Directors (NPB) was created. On February 27, 2002, pursuant to Section 774 of the EPIRA, the Secretary of the Department of Energy promulgated the IRR. On the other hand, Section 63 of the EPIRA provides for separation benefits to officials and employees who would be affected by the restructuring of the electric power industry and the privatization of the assets of the NPC, to wit: Section 63. Separation Benefits of Officials and Employees of Affected Agencies. National Government employees displaced or separated from the service as a result of the restructuring of the electricity industry and privatization of NPC assets pursuant to this Act, shall be entitled to either a separation pay and other benefits in accordance with existing laws, rules or regulations or be entitled to avail of the privileges provided under a separation plan which shall be one and one-half month salary for every year of service in the government: Provided, however, That those who avail of such privileges shall start their government service anew if absorbed by any government-owned successor company. In no case shall there be any diminution of benefits under the separation plan until the full implementation of the restructuring and privatization.

5. Striking down all other provisions of RA 9136 (EPIRA) found repugnant to the 1987 Constitution; 6. Striking down all provisions of the Implementing Rules and Regulations (IRR) of the EPIRA found repugnant to the 1987 Constitution; 7. Striking down Section 63 of RA 9136 (EPIRA) for classifying such provisions in the same vein with Proclamation No. 50 used against MWSS employees and its failure to classify which condition comes first whether the restructuring effecting total reorganization of the electric power industry making NPC financially viable or the privatization of NPC assets where manpower reduction or sweeping/lay-off or termination of career civil service employees follows the disposal of NPC assets. This is a clear case of violation of theEQUAL PROTECTION CLAUSE, therefore, unconstitutional; 8. Striking down Rule 33 of the Implementing Rules [and] Regulations (IRR) for disregarding the constitutional and statutory injunction on arbitrary removal of career civil service employees; and 9. For such other reliefs deemed equitable with justice and fairness to more than EIGHT THOUSAND (8,000) EMPLOYEES of the National Power Corporation (NPC) whose fate lies in the sound disposition of the Honorable Supreme Court.9 In addition, petitioner also filed a supplemental petition for mandamus praying for his reinstatement. The petition is without merit. Before anything else, this Court shall first tackle whether it was proper for petitioner to directly question the constitutionality of the EPIRA before this Court. Section 5(1) and (2), Article VIII of the 1987 Constitution provides that: SECTION 5. The Supreme Court shall have the following powers: 1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus. 2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of court may provide, final judgments and orders of lower courts in:

(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential decree, proclamation, order, instruction, ordinance, or regulation is in question.10 Based on the foregoing, this Court's jurisdiction to issue writs of certiorari, prohibition, mandamus, quo warranto, and habeas corpus, while concurrent with that of the Regional Trial Courts and the Court of Appeals, does not give litigants unrestrained freedom of choice of forum from which to seek such relief.11 The determination of whether the assailed law and its implementing rules and regulations contravene the Constitution is within the jurisdiction of regular courts. The Constitution vests the power of judicial review or the power to declare a law, treaty, international or executive agreement, presidential decree, order, instruction, ordinance, or regulation in the courts, including the Regional Trial Courts.12 It has long been established that this Court will not entertain direct resort to it unless the redress desired cannot be obtained in the appropriate courts, or where exceptional and compelling circumstances justify availment of a remedy within and call for the exercise of our primary jurisdiction.13 Thus, herein petition should already be dismissed at the outset; however, since similar petitions have already been resolved by this Court tackling the validity of NPB Resolutions No. 2002-124 and No. 2002-125, as well as the constitutionality of certain provisions of the EPIRA, this Court shall disregard the procedural defect. Validity of NPB Resolutions No. 2002-124 and No. 2002-125 The main issue raised by petitioner deals with the validity of NPB Resolutions No. 2002124 and No. 2002-125. In NPC Drivers and Mechanics Association (NPC DAMA) v. National Power Corporation (NPC),14 this Court had already ruled that NPB Resolutions No. 2002-124 and No. 2002125 are void and of no legal effect. NPC Drivers involved a special civil action for Injunction seeking to enjoin the implementation of the same assailed NPB Resolutions. Petitioners therein put in issue the fact that the NPB Resolutions were not concluded by a duly constituted Board of Directors since no quorum in accordance with Section 48 of the EPIRA existed. In addition, petitioners therein argued that the assailed NPB Resolutions cannot be given legal effect as it failed to comply with Section 47 of the EPIRA which required the endorsement of the Joint Congressional Power Commission and the President of the Philippines. Ruling in favor of petitioners therein, this Court ruled that NPB Resolutions No. 2002-124 and No. 2002-125 are void and of no legal effect for failure to comply with Section 48 of the EPIRA, to wit: 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 ones ideas of what is right and proper under the circumstances, without willfulness or favor. 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. 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 fulfilment of such responsibility. xxxx 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 the nine board members, namely those of DOE Secretary Vincent S. Perez, Jr.; Department of Budget and Management Secretary Emilia T. Boncodin; and NPC OIC-President Rolando S. Quilala, NPB Resolutions No. 2002-124 and No. 2002-125 are void and are of no legal effect.15 However, a supervening event occurred in NPC Drivers when it was brought to this Court's attention that NPB Resolution No. 2007-55 was promulgated on September 14, 2007 confirming and adopting the principles and guidelines enunciated in NPB Resolutions No. 2002-124 and No. 2002-125. On December 2, 2009, this Court promulgated a Resolution16 clarifying the amount due the individual employees of NPC in view of NPB Resolution No. 2007-55. In said Resolution, this Court clarified the exact date of the legal termination of each class of NPC employees, thus: From all these, it is clear that our ruling, pursuant to NPB Resolution No. 2002-124, covers all employees of the NPC and not only the 16 employees as contended by the NPC. However, as regards their right to reinstatement, or separation pay in lieu of reinstatement, pursuant to a validly approved Separation Program, plus backwages,

wage adjustments, and other benefits, the same shall be computed from the date of legal termination as stated in NPC Circular No. 2003-09, to wit: a) The legal termination of key officials, i.e., the Corporate Secretary, VicePresidents and Senior Vice-Presidents who were appointed under NP Board Resolution No. 2003-12, shall be at the close of office hours of January 31, 2003. b) The legal termination of personnel who availed of the early leavers' scheme shall be on the last day of service in NPC but not beyond January 15, 2003. c) The legal termination of personnel who were no longer employed in NPC after June 26, 2001 shall be the date of actual separation in NPC. d) For all other NPC personnel, their legal termination shall be at the close of office hours/shift schedule of February 28, 2003.17 As to the validity of NPB Resolution No. 2007-55, this Court ruled that the same will have a prospective effect, to wit: What then is the effect of the approval of NPB Resolution No. 2007-55 on 14 September 2007? The approval of NPB Resolution No. 2007-55, supposedly by a majority of the National Power Board as designated by law, that adopted, confirmed and approved the contents of NPB Resolutions No. 2002-124 and No. 2002-125 will have a prospective effect, not a retroactive effect. The approval of NPB Resolution No. 2007-55 cannot ratify and validate NPB Resolutions No. 2002-124 and No. 2002-125 as to make the termination of the services of all NPC personnel/employees on 31 January 2003 valid, because said resolutions were void. The approval of NPB Resolution No. 2007-55 on 14 September 2007 means that the services of all NPC employees have been legally terminated on this date. All separation pay and other benefits to be received by said employees will be deemed cut on this date. The computation thereof shall, therefore, be from the date of their illegal termination pursuant to NPB Resolutions No. 2002-124 and No. 2002-125 as clarified by NPB Resolution No. 2003-11 and NPC Resolution No. 2003-09 up to 14 September 2007. Although the validity of NPB Resolution No. 2007-55 has not yet been passed upon by the Court, same has to be given effect because NPB Resolution No. 2007-55 enjoys the presumption of regularity of official acts. The presumption of regularity of official acts may be rebutted by affirmative evidence of irregularity or failure to perform a duty. Thus, until and unless there is clear and convincing evidence that rebuts this presumption, we have no option but to rule that said resolution is valid and effective as of 14 September 2007.18 Based on the foregoing, this Court concluded that the computation of the amounts due the employees who were terminated and/or separated as a result of, or pursuant to, the nullified NPB Board Resolutions No. 2002-124 and No. 2002-125 shall be from their date

of illegal termination up to September 14, 2007 when NPB Resolution No. 2007-55 was issued. Thus, the resolution of the validity of NPB Board Resolutions No. 2002-124 and No. 2002-125 is, therefore, moot and academic in view of the Court's pronouncements in NPC Drivers. Anent the question of the constitutionality of Section 63 of RA 9136, as well as Rule 33 of the IRR, this Court finds that the same is without merit. A reorganization involves the reduction of personnel, consolidation of offices, or abolition thereof by reason of economy or redundancy of functions.19 It could result in the loss of ones position through removal or abolition of an office. However, for a reorganization for the purpose of economy or to make the bureaucracy more efficient to be valid, it must pass the test of good faith; otherwise, it is void ab initio.20 It is undisputed that NPC was in financial distress and the solution found by Congress was to pursue a policy towards its privatization. The privatization of NPC necessarily demanded the restructuring of its operations. To carry out the purpose, there was a need to terminate employees and re-hire some depending on the manpower requirements of the privatized companies. The privatization and restructuring of the NPC was, therefore, done in good faith as its primary purpose was for economy and to make the bureaucracy more efficient. In Freedom from Debt Coalition v. Energy Regulatory Commission,21 this Court discussed why there was a need for a shift towards the privatization and restructuring of the electric power industry, to wit: One of the landmark pieces of legislation enacted by Congress in recent years is the EPIRA. It established a new policy, legal structure and regulatory framework for the electric power industry. The new thrust is to tap private capital for the expansion and improvement of the industry as the large government debt and the highly capital-intensive character of the industry itself have long been acknowledged as the critical constraints to the program. To attract private investment, largely foreign, the jaded structure of the industry had to be addressed. While the generation and transmission sectors were centralized and monopolistic, the distribution side was fragmented with over 130 utilities, mostly small and uneconomic. The pervasive flaws have caused a low utilization of existing generation capacity; extremely high and uncompetitive power rates; poor quality of service to consumers; dismal to forgettable performance of the government power sector; high system losses; and an inability to develop a clear strategy for overcoming these shortcomings.

Thus, the EPIRA provides a framework for the restructuring of the industry, including the privatization of the assets of the National Power Corporation (NPC), the transition to a competitive structure, and the delineation of the roles of various government agencies and the private entities. The law ordains the division of the industry into four (4) distinct sectors, namely: generation, transmission, distribution and supply. Corollarily, the NPC generating plants have to be privatized and its transmission business spun off and privatized thereafter.22 Petitioner argues that bad faith is clearly manifested as the reorganization has an eye to replace current favorite less competent appointees. In addition, petitioner contends that qualifications and behavioral aspect were being set aside.23 Section 2 of R.A. No. 665624 cites certain circumstances showing bad faith in the removal of employees as a result of any reorganization, thus: Sec. 2. No officer or employee in the career service shall be removed except for a valid cause and after due notice and hearing. A valid cause for removal exist when, pursuant to a bona fide reorganization, a position has been abolished or rendered redundant or there is a need to merge, divide, or consolidate positions in order to meet the exigencies of the service, or other lawful causes allowed by the Civil Service Law. The existence of any or some of the following circumstances may be considered as evidence of bad faith in the removals made as a result of the reorganization, giving rise to a claim for reinstatement or reappointment by an aggrieved party: a) Where there is a significant increase in the number of positions in the new staffing pattern of the department or agency concerned; b) Where an office is abolished and another performing substantially the same functions is created; c) Where incumbents are replaced by those less qualified in terms of status of appointment, performance and merit; d) Where there is a reclassification of offices in the department or agency concerned and the reclassified offices perform substantially the same functions as the original offices; and e) Where the removal violates the order of separation provided in Section 3 hereof. The Solicitor General, however, argues that petitioner has not shown any circumstance to prove that the restructuring of NPC was done in bad faith. We agree.

Petitioner's allegation that the reorganization was merely undertaken to accommodate new appointees is at most speculative and bereft of any evidence on record. It is settled that bad faith must be duly proved and not merely presumed. It must be proved by clear and convincing evidence,25 which is absent in the case at bar. In addition, petitioner has no legal or vested right to be reinstated as Section 63 of the EPIRA as well as Section 5, Rule 33 of the IRR clearly state that the displaced or separated personnel as a result of the privatization, if qualified, shall be given preference in the hiring of the manpower requirements of the privatized companies. Clearly, the law only speaks of preference and by no stretch of the imagination can the same amount to a legal right to the position. Undoubtedly, not all the terminated employees will be rehired by the selection committee as the manpower requirement of the privatized companies will be different. As correctly observed by the Solicitor General, the selection of employees for purposes of re-hiring them necessarily entails the exercise of discretion or judgment.26 Such being the case, petitioner, cannot, by way of mandamus, compel the selection committee to include him in the re-hired employees, more so, since there is no evidence showing that said committee acted with grave abuse of discretion or that the re-hired employees were merely accommodated and not qualified. Validity of Sections 11, 48, and 52 of RA 9136 Petitioner argues that Sections 11,27 48,28 and 5229 of the EPIRA are unconstitutional for violating Section 13, Article VII of the 1987 Constitution. Section 13, Article VII of the 1987 Constitution provides: Sec. 13. The President, Vice-President, the Members of the Cabinet, and their deputies or assistants shall not, unless otherwise provided in this Constitution, hold any other office or employment during their tenure. They shall not, during said tenure, directly or indirectly practice any other profession, participate in any business, or be financially interested in any contract with, or in any franchise, or special privilege granted by the Government or any subdivision, agency, or instrumentality thereof, including government-owned or controlled corporations or their subsidiaries. They shall strictly avoid conflict of interest in the conduct of their office. x x x x.30 In Civil Liberties Union v. Executive Secretary,31 this Court explained that the prohibition contained in Section 13, Article VII of the 1987 Constitution does not apply to posts occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required by the primary function of said official's office, to wit: The prohibition against holding dual or multiple offices or employment under Section 13, Article VII of the Constitution must not, however, be construed as applying to posts

occupied by the Executive officials specified therein without additional compensation in an ex-officio capacity as provided by law and as required by the primary functions of said officials' office. The reason is that these posts do not comprise "any other office" within the contemplation of the constitutional prohibition but are properly an imposition of additional duties and functions on said officials. To characterize these posts otherwise would lead to absurd consequences, among which are: The President of the Philippines cannot chair the National Security Council reorganized under Executive Order No. 115 (December 24, 1986). Neither can the Vice-President, the Executive Secretary, and the Secretaries of National Defence, Justice, Labor and Employment and Local Government sit in this Council, which would then have no reason to exist for lack of a chairperson and members. The respective undersecretaries and assistant secretaries, would also be prohibited. xxxx The term "primary" used to describe "functions" refers to the order of importance and thus means chief or principal function. The term is not restricted to the singular but may refer to the plural. The additional duties must not only be closely related to, but must be required by the official's primary functions. Examples of designations to positions by virtue of one's primary functions are the Secretaries of Finance and Budget, sitting as members of the Monetary Board, and the Secretary of Transportation and Communications, acting as Chairman of the Maritime Industry Authority and the Civil Aeronautics Board.32 The designation of the members of the Cabinet to form the NPB does not violate the prohibition contained in our Constitution as the privatization and restructuring of the electric power industry involves the close coordination and policy determination of various government agencies. Section 2 of the EPIRA clearly shows that the policy toward privatization would involve financial, budgetary and environmental concerns as well as coordination with local government units, to wit: SECTION 2. Declaration of Policy. It is hereby declared the policy of the State: (a) To ensure and accelerate the total electrification of the country; (b) To ensure the quality, reliability, security and affordability of the supply of electric power; (c) To ensure transparent and reasonable prices of electricity in a regime of free and fair competition and full public accountability to achieve greater operational and economic efficiency and enhance the competitiveness of Philippine products in the global market; (d) To enhance the inflow of private capital and broaden the ownership base of the power generation, transmission and distribution sectors;

(e) To ensure fair and non-discriminatory treatment of public and private sector entities in the process of restructuring the electric power industry; (f) To protect the public interest as it is affected by the rates and services of electric utilities and other providers of electric power; (g) To assure socially and environmentally compatible energy sources and infrastructure; (h) To promote the utilization of indigenous and new and renewable energy resources in power generation in order to reduce dependence on imported energy; (i) To provide for an orderly and transparent privatization of the assets and liabilities of the National Power Corporation (NPC); (j) To establish a strong and purely independent regulatory body and system to ensure consumer protection and enhance the competitive operation of the electricity market; and (k) To encourage the efficient use of energy and other modalities of demand side management. As can be gleaned from the foregoing enumeration, the restructuring of the electric power industry inherently involves the participation of various government agencies. In Civil Liberties, this Court explained that mandating additional duties and functions to Cabinet members which are not inconsistent with those already prescribed by their offices or appointments by virtue of their special knowledge, expertise and skill in their respective executive offices, is a practice long-recognized in many jurisdictions. It is a practice justified by the demands of efficiency, policy direction, continuity and coordination among the different offices in the Executive Branch in the discharge of its multifarious tasks of executing and implementing laws affecting national interest and general welfare and delivering basic services to the people.33 The production and supply of energy is undoubtedly one of national interest and is a basic commodity expected by the people. This Court, therefore, finds the designation of the respective members of the Cabinet, as ex-officiomembers of the NPB, valid. This Court is not unmindful, however, that Section 48 of the EPIRA is not categorical in proclaiming that the concerned Cabinet secretaries compose the NPB Board only in an ex-officio capacity. It is only in Section 52 creating the Power Sector Assets and

Liabilities Management Corporation (PSALM) that they are so designated in an exofficio capacity. Sections 4 and 6 of the EPIRA provides: Section 4. TRANSCO Board of Directors. All the powers of the TRANSCO shall be vested in and exercised by a Board of Directors. The Board shall be composed of a Chairman and six (6) members. The Secretary of the DOF shall be the ex-officio Chairman of the Board. The other members of the TRANSCO Board shall include the Secretary of the DOE, the Secretary of the DENR, the President of TRANSCO, and three (3) members to be appointed by the President of the Philippines, each representing Luzon, Visayas and Mindanao, one of whom shall be the President of PSALM. x x x x. Section 6. PSALM Board of Directors. PSALM shall be administered, and its powers and functions exercised, by a Board of Directors which shall be composed of the Secretary of the DOF as the Chairman, and the Secretary of the DOE, the Secretary of the DBM, the Director-General of the NEDA, the Secretary of the DOJ, the Secretary of the DTI and the President of the PSALM as exofficio members thereof. Nonetheless, this Court agrees with the contention of the Solicitor General that the constitutional prohibition was not violated, considering that the concerned Cabinet secretaries were merely imposed additional duties and their posts in the NPB do not constitute "any other office" within the contemplation of the constitutional prohibition. The delegation of the said official to the respective Board of Directors were designation by Congress of additional functions and duties to the officials concerned, i.e., they were designated as members of the Board of Directors. Designation connotes an imposition of additional duties, usually by law, upon a person already in the public service by virtue of an earlier appointment.34 Designation does not entail payment of additional benefits or grant upon the person so designated the right to claim the salary attached to the position. Without an appointment, a designation does not entitle the officer to receive the salary of the position. The legal basis of an employee's right to claim the salary attached thereto is a duly issued and approved appointment to the position, and not a mere designation.35 Hence, Congress specifically intended that the position of member of the Board of NPB shall be ex-officio or automatically attached to the respective offices of the members composing the board. It is clear from the wordings of the law that it was the intention of Congress that the subject posts will be adjunct to the respective offices of the official designated to such posts.

The foregoing discussion, notwithstanding, the concerned officials should not receive any additional compensation pursuant to their designation as ruled in Civil Liberties, thus: The ex-officio position being actually and in legal contemplation part of the principal office, it follows that the official concerned has no right to receive additional compensation for his services in the said position. The reason is that these services are already paid for and covered by the compensation attached to his principal office. It should be obvious that if, say, the Secretary of Finance attends a meeting of the Monetary Board as an ex-officio member thereof, he is actually and in legal contemplation performing the primary function of his principal office in defining policy in monetary and banking matters, which come under the jurisdiction of his department. For such attendance, therefore, he is not entitled to collect any extra compensation, whether it be in the form of a per diem or an honorarium or an allowance, or some other such euphemism. By whatever name it is designated, such additional compensation is prohibited by the Constitution. In relation thereto, Section 14 of the EPIRA provides: SEC. 14. Board Per Diems and Allowances. The members of the Board shall receive per diem for each regular or special meeting of the board actually attended by them and, upon approval of the Secretary of the Department of Finance, such other allowances as the Board may prescribe. Section 14 relates to Section 11 which sets the composition of the TRANSCO Board naming the Secretary of the Department of Finance as the ex officio Chairman of the Board. The other members of the TRANSCO Board include the Secretary of the Department of Energy and the Secretary of the Department of Environment and Natural Resources. However, considering the constitutional prohibition, it is clear that such emoluments or additional compensation to be received by the members of the NPB do not apply and should not be received by those covered by the constitutional prohibition, i.e., the Cabinet secretaries. It is to be noted that three of the members of the NPB are to be appointed by the President, who would be representing the interests of those in Luzon, Visayas, and Mindanao, who may be entitled to such honorarium or allowance if they do not fall within the constitutional prohibition. Hence, the said cabinet officials cannot receive any form of additional compensation by way of per diems and allowances. Moreover, any amount received by them in their capacity as members of the Board of Directors should be reimbursed to the government, since they are prohibited from collecting additional compensation by the Constitution. These interpretations are consistent with the fundamental rule of statutory construction that a statute is to be read in a manner that would breathe life into it, rather than defeat it,36 and is supported by the criteria in cases of this nature that all reasonable doubts should be resolved in favor of the constitutionality of a statute.37

Constitutionality of Section 3438 of the EPIRA The Constitutionality of Section 34 of the EPIRA has already been passed upon by this Court in Gerochi v. Department of Energy,39 to wit: Finally, every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the Constitution and not one that is doubtful, speculative, or argumentative. Indubitably, petitioners failed to overcome this presumption in favor of the EPIRA. We find no clear violation of the Constitution which would warrant a pronouncement that Sec. 34 of the EPIRA and Rule 18 of its IRR are unconstitutional and void.40 In Gerochi, this Court ruled that the Universal Charge is not a tax but an exaction in the exercise of the State's police power. The Universal Charge is imposed to ensure the viability of the country's electric power industry. Petitioner argues that the imposition of a universal charge to address the stranded debts and contract made by the government through the NCC-IPP contracts or Power UtilityIPP contracts or simply the bilateral agreements or contracts is an added burden to the electricity-consuming public on their monthly power bills. It would mean that the electricity-consuming public will suffer in carrying this burden for the errors committed by those in power who runs the affairs of the State. This is an exorbitant display of State Power at the expense of its people.41 It is basic that the determination of whether or not a tax is excessive oppressive or confiscatory is an issue which essentially involves a question of fact and, thus, this Court is precluded from reviewing the same. Validity of Section 3842 of the EPIRA Petitioner argues that the abolishment of the ERB and its replacement of a very powerful quasi-judicial body named the Energy Regulatory Commission (ERC), pursuant to Section 38 up to Section 43 of the EPIRA or RA 9136, which is tasked to dictate the dayto-day affairs of the entire electric power industry, seems a prelude to Charter Change. Petitioner submits that under the 1987 Constitution, there are only three constitutionally-recognized Commissions, they are: the Civil Service Commission (CSC), the Commission on Audit (COA) and the Commission on Elections (COMELEC).43 Petitioners argument that the creation of the ERC seems to be a prelude to charter change is flimsy and finds no support in law. This Court cannot subscribe to petitioners thesis that "in order for the newly-enacted RA 9136 or EPIRA to become a valid law, we should have to call first a referendum to amend or totally change the People's Charter." 44

In any case, the constitutionality of the abolition of the ERB and the creation of the ERC has already been settled in Kapisanan ng mga Kawani ng Energy Regulatory Board v. Commissioner Fe Barin,45 to wit: All laws enjoy the presumption of constitutionality. To justify the nullification of a law, there must be a clear and unequivocal breach of the Constitution. KERB failed to show any breach of the Constitution. A public office is created by the Constitution or by law or by an officer or tribunal to which the power to create the office has been delegated by the legislature. The power to create an office carries with it the power to abolish. President Corazon C. Aquino, then exercising her legislative powers, created the ERB by issuing Executive Order No. 172 on 8 May 1987. The question of whether a law abolishes an office is a question of legislative intent. There should not be any controversy if there is an explicit declaration of abolition in the law itself. Section 38 of RA 9136 explicitly abolished the ERB. x x x46 Moreover, in Kapisanan, this Court ruled that because of the expansion of the ERC's functions and concerns, there was a valid abolition of the ERB.47 Validity of Section 6348 Contrary to petitioner's argument, Section 63 of the EPIRA and Section 33 of the IRR of the EPIRA did not impair the vested rights of NPC personnel to claim benefits under existing laws. Neither does the EPIRA cut short the years of service of the employees concerned. If an employee availed of the separation pay and other benefits in accordance with existing laws or the superior separation pay under the NPC restructuring plan, it is but logical that those who availed of such privilege will start their government service anew if they will later be employed by any government-owned successor company or government instrumentality. It is to be noted that this Court ruled in the case of Herrera v. National Power Corporation,49 that Section 63 of the EPIRA precluded the receipt by the terminated employee of both separation and retirement benefits under the Government Service Insurance System (GSIS) organic law, or Commonwealth Act (C.A.) No. 186.50 However, it must be clarified that this Courts pronouncements in Herrera that separated and retired employees of the NPC "are not entitled to receive retirement benefits under C.A. No. 186," referred only to the gratuity benefits granted by R.A. No. 1616,51 which was to be paid by NPC as the last employer. It did not proscribe the payment of retirement benefits to qualified retirees under R.A. No.

660,52 Presidential Decree (P.D.) No. 1146,53 R.A. No. 8291,54 and other GSIS and social security laws. The factual and procedural antecedents of Herrera reveal that it arose from a case between NPC and several of its separated employees who were asking additional benefits from NPC under R.A. No. 1616 after receiving from the former separation benefits under Section 63 of R.A. No. 9136. Unable to resolve the issue with its former employees amicably, NPC filed a petition for declaratory relief, docketed as Civil Case SCA No. Q-03-50681,55 before the Regional Trial Court of Quezon City, raising the issue of whether or not the employees of NPC are entitled to receive retirement benefits under R.A. No. 1616 over and above the separation benefits granted by R.A. No. 9136.56 Under R.A. No. 1616, a gratuity benefit is given to qualified retiring members of the GSIS, which is payable by the last employer. In addition to said gratuity benefits, the qualified employee shall also be entitled to a refund of retirement premiums paid, consisting of personal contributions of the employee plus interest, and government share without interest, payable by the GSIS. It effectively amended Section 12 (c) of C.A. No. 186, as follows: (c) Retirement is likewise allowed to any official or employee, appointive or elective, regardless of age and employment status, who has rendered a total of at least twenty years of service, the last three years of which are continuous. The benefit shall, in addition to the return of his personal contributions with interest compounded monthly and the payment of the corresponding employer's premiums described in subsection (a) of Section five hereof, without interest, be only a gratuity equivalent to one month's salary for every year of the first twenty years of service, plus one and one-half months salary for every year of service over twenty but below thirty years and two months salary for every year of service over thirty years in case of employees based on the highest rate received and in case of elected officials on the rates of pay as provided by law. This gratuity is payable on the rates of pay as provided by law. This gratuity is payable by the employer or officer concerned which is hereby authorized to provide the necessary appropriation or pay the same from any unexpended items of appropriations or savings in its appropriations. Officials and employees retired under this Act shall be entitled to the commutation of the unused vacation and sick leave, based on the highest rate received, which they may have to their credit at the time of retirement. x x x57 (Emphasis supplied.) After trial, the RTC rendered a Decision ruling against the NPC employees, the decretal portion of which reads: WHEREFORE, premises considered, Republic Act No. 9136 DID NOT SPECIFICALLY AUTHORIZE the National Power Corporation to grant retirement benefits under Republic Act No. 1616 in addition to separation pay under Republic Act No. 9136.

SO ORDERED.58 Petitioners therein then sought recourse directly to this Court on a pure question of law. In the preparatory statement of the Petition for Review on Certiorari,59 it is apparent that the case was limited only to the interpretation of Section 63 of R.A. No. 9136, in relation to R.A. No. 1616, on the matter of retirement benefits, to wit: This is a case of first impression limited to the interpretation of Section 63, R.A. 9136 (EPIRA), granting separation pay to terminated NAPOCOR employees, in relation to R.A. 1616, on the matter of retirement benefits. Respondents NAPOCOR and DEPARTMENT OF BUDGET AND MANAGEMENT erroneously contend that the entitlement to the separation pay under R.A. 9136 forfeits the retirement benefit under R.A. 1616. Petitioners most respectfully submit that since R.A. 9136 and R.A. 1616 are not inconsistent with each other and they have distinct noble purposes, entitlement to separation pay will not disqualify the separated employee who is qualified to retire from receiving retirement benefits allowed under another law. x x x60 However, in the Decision dated December 18, 2009, it was held that petitioners therein were not only entitled to receive retirement benefits under R.A. No. 1616 but also were "not entitled to receive retirement benefits under Commonwealth Act No. 186, as amended," which, in effect, might lead to the conclusion that the declaration encompassed all other benefits granted by C.A. No. 186 to its qualified members. In relation to R.A. No. 1616, Herrera should have affected only the payment of gratuity benefits by NPC, being the last employer, to its separated employees. It was even categorically stated that petitioners therein were "entitled to a refund of their contributions to the retirement fund, and the monetary value of any accumulated vacation and sick leaves,"61 which is clearly congruous to the mandate of R.A. No. 1616. The matter of availment of retirement benefits of qualified employees under any other law to be paid by the GSIS should not and was not covered by the decision. In the first place, it was never an issue. In the case of Santos v. Servier Philippines, Inc.,62 citing Aquino v. National Labor Relations Commission,63 We declared that the receipt of retirement benefits does not bar the retiree from receiving separation pay. Separation pay is a statutory right designed to provide the employee with the wherewithal during the period that he/she is looking for another employment. On the other hand, retirement benefits are intended to help the employee enjoy the remaining years of his life, lessening the burden of worrying about his financial support, and are a form of reward for his loyalty and service to the employer. A separation pay is given during ones employable years, while retirement benefits are given during ones unemployable years. Hence, they are not mutually exclusive.64 Even in the deliberations of Congress during the passage of R.A. No. 9136, it was manifest that it was not the intention of the law to infringe upon the vested rights of NPC

personnel to claim benefits under existing laws. To assure the worried and uneasy NPC employees, Congress guaranteed their entitlement to a separation pay to tide them over in the meantime.65 More importantly, to further allay the fears of the NPC employees, especially those who were nearing retirement age, Congress repeatedly assured them in several public and congressional hearings that on top of their separation benefits, they would still receive their retirement benefits, as long as they would qualify and meet the requirements for its entitlement. The transcripts of the Public Consultative Meeting on the Power Bill held on February 16, 2001, disclose the following: xxxx THE CHAIRMAN (SEN. J. OSMENA). Well, the other labor representation here is Mr. Anguluan. MR. ANGULUAN: Yes, Your Honor. THE CHAIRMAN (SEN. J. OSMENA). Okay. Will you present your paper? MR. ANGULUAN: We have prepared a paper which we have sent to the honorable members of the Bicam. x x x. THE CHAIRMAN (SEN. J. OSMENA). I dont think anyone is going to deprive you of your rights under the law. You will enjoy all your rights. You will receive retirement benefits, separation pay, and all of the rights that are provided to you by law. What we have objected to in the Senate is retirement benefits higher than what everybody else gets, like 150 percent or subject to the approval of the board which means sky is the limit. So, we have objected to that. But what you are entitled to under the law, you will get under the law and nobody will deprive you of that.66 A year later, on February 12, 2002, the Joint Congressional Power Commission was held. The transcripts of the hearing bare the following: xxxx THE CHAIRMAN (REP. BADELLES). They will still be subject to the same conditions. Meaning, NPC has the discretion whether to reabsorb or hire back those that avail of the separation benefits. SEN. OSMENA (J). No. But they are not being - - the plants are not being sold, so they are but what we are giving them is a special concession of retiring early.

No, okay. You consider . . . THE CHAIRMAN (REP. BADELLES). We are not speaking of retirement here, we are speaking of theirseparation benefits . . . SEN. OSMENA (J). Okay, separation benefits. THE CHAIRMAN (REP. BADELLES). Precisely, if they are considered terminated. SEN. OSMENA (J). All right. Separation . . . THE CHAIRMAN (REP. BADELLES). A retirement plan is a different program than separation. SEN. OSMENA (J). Separation benefits, okay. THE CHAIRMAN (REP. BADELLES). All right.67 Thus, it is clear that a separation pay at the time of the reorganization of the NPC and retirement benefits at the appropriate future time are two separate and distinct entitlements. Stated otherwise, a retirement plan is a different program from a separation package. There is a whale of a difference between R.A. No. 1616 and C.A. No. 186, together with its amendatory laws. They have different legal bases, different sources of funds and different intents. In R.A. No. 1616, which is the subject issue in Herrera, the retirees are entitled to gratuity benefits to be paid by the last employer and refund of premiums to be paid by the GSIS. On the other hand, retirement benefits under C.A. No. 186, as amended by R.A. No. 8291, are to be paid by the GSIS. Stated otherwise, under R.A. No. 1616, what would be paid by the last employer, NPC, would be gratuity benefits, and GSIS would merely refund the retirement premiums consisting of personal contributions of the employee plus interest, and the employers share without interest. Under C.A. No. 186, as amended, it is the GSIS who would pay the qualified employees their retirement benefits. Indeed, with several amendments to C.A. No. 186,68 the Court finds it necessary to clarify Herrera and categorically declare that it affected only those seeking benefits under R.A. No. 1616.69 It could not have meant to affect those employees who retired, and who will retire, under the different amendatory laws of C.A. No. 186 like R.A. No. 660, 70 P.D. No. 114671 and R.A. No. 8291.72

At any rate, entitlement of qualified employees to receive separation pay and retirement benefits is not proscribed by the 1987 Constitution. Section 8 of Article IX (B) of the 1987 Constitution reads: SEC. 8. No elective or appointive public officer or employee shall receive additional, double or indirect compensation, unless specifically authorized by law, nor accept without the consent of the Congress, any present, emolument, office, or title of any kind from any foreign government. Pensions or gratuities shall not be considered as additional, double, or indirect compensation.73 Moreover, retirement benefits under C.A. No. 186 are not even considered as compensation. Benefits granted by this Act by virtue of such life or retirement insurance shall not be considered as compensation or emolument.74 Under the GSIS law, the retired employees earned their vested right under their contract of insurance after they religiously paid premiums to GSIS. Under the contract, GSIS is bound to pay the retirement benefits as it received the premiums from the employees and NPC. In Marasigan v. Cruz,75 this Court ratiocinated that: A retirement law such as C.A. 186 and amendatory laws is in the nature of a contract between the government and its employees. When an employee joins the government service, he has a right to expect that after rendering the required length of service and fulfilled the conditions stated in the laws on retirement, he would be able to enjoy the benefits provided in said laws. He regularly pays the dues prescribed therefore. It would be cruel to deny him the benefits he had been expecting at the end of his service by imposing conditions for his retirement, which are not found in the law. It is believed to be a legal duty as well as a moral obligation on the part of the government to honor its commitments to its employees when as in this case, they have met all the conditions prescribed by law and are therefore entitled to receive their retirement benefits.76 Thus, where the employee retires and meets the eligibility requirements, he acquires a vested right to benefits that is protected by the due process clause. Retirees enjoy a protected property interest whenever they acquire a right to immediate payment under pre-existing law. Thus, a pensioner acquires a vested right to benefits that have become due as provided under the terms of the public employees pension statute. No law can deprive such person of his pension rights without due process of law, that is, without notice and opportunity to be heard.77Verily, when an employee has complied with the statutory requirements to be entitled to receive his retirement benefits, his right to retire

and receive what is due him by virtue thereof becomes vested and may not thereafter be revoked or impaired.1avvphi1 Moreover, Section 63 of the EPIRA law, if misinterpreted as proscribing payment of retirement benefits under the GSIS law, would be unconstitutional as it would be violative of Section 10, Article III of the 1987 Constitution78 or the provision on nonimpairment of contracts. In view of the fact that separation pay and retirement benefits are different entitlements, as they have different legal bases, different sources of funds, and different intents, the "exclusiveness of benefits" rule provided under R.A. No. 8291 is not applicable. Section 55 of R.A. No. 8291 states: "Whenever other laws provide similar benefits for the same contingencies covered by this Act, the member who qualifies to the benefits shall have the option to choose which benefits will be paid to him." Accordingly, the Court declares that separated, displaced, retiring, and retired employees of NPC are legally entitled to the retirement benefits pursuant to the intent of Congress and as guaranteed by the GSIS laws. Thus, the Court reiterates: 1] that the dispositive portion in Herrera holding that separated and retired employees "are not entitled to receive retirement benefits under Commonwealth Act No. 186," referred only to the gratuity benefits under R.A. No. 1616, which was to be paid by NPC, being the last employer; 2] that it did not proscribe the payment of the retirement benefits to qualified retirees under R.A. No. 660, P.D. No. 1146, R.A. No. 8291, and other GSIS and social security laws; and 3] that separated, rehired, retiring, and retired employees should receive, and continue to receive, the retirement benefits to which they are legally entitled. Petition for Mandamus As for petitioner's prayer that he be reinstated, suffice it to state that the issue has been rendered moot by the Decision and Resolutions of this Court in the case of NPC Drivers and Mechanics Association (NPC DAMA) v. National Power Corporation (NPC) 79 and by the above disquisitions. In Conclusion While we commend petitioner's attempt to argue against the privatization of the NPC, it is not the proper subject of herein petition. Petitioner belabored on alleging facts to prove his point which, however, go into policy decisions which this Court must not delve into less we violate separation of powers. The wisdom of the privatization of the NPC

cannot be looked into by this Court as it would certainly violate this guarded principle. The wisdom and propriety of legislation is not for this Court to pass upon.80 Every law has in its favor the presumption of constitutionality, and to justify its nullification, there must be a clear and unequivocal breach of the Constitution, and not one that is doubtful, speculative or argumentative.81 As in National Power Corporation Employees Consolidated Union (NECU) v. National Power Corporation (NPC),82this Court held: Whether the States policy of privatizing the electric power industry is wise, just, or expedient is not for this Court to decide. The formulation of State policy is a legislative concern. Hence, the primary judge of the necessity, adequacy, wisdom, reasonableness and expediency of any law is primarily the function of the legislature.83 WHEREFORE, premises considered and subject to the above disquisitions, the Petition for Certiorari and the Supplemental Petition for Mandamus are Dismissed for lack of merit.

EN BANC G.R. No. 178552 October 5, 2010

Carlitos Siguion-Reyna, Dr. Carolina Pagaduan-Araullo, Renato Reyes, Danilo Ramos, Emerenciana de Jesus, Rita Baua and Rey Claro Casambre filed a petition for certiorari and prohibition docketed as G.R. No. 178581. On August 6, 2007, Karapatan and its alliance member organizations Hustisya, Desaparecidos, Samahan ng mga Ex-Detainees Laban sa Detensyon at para sa Amnestiya (SELDA), Ecumenical Movement for Justice and Peace (EMJP), and Promotion of Church Peoples Response (PCPR), which were represented by their respective officers5 who are also bringing action on their own behalf, filed a petition for certiorari and prohibition docketed as G.R. No. 178890. On August 29, 2007, the Integrated Bar of the Philippines (IBP), Counsels for the Defense of Liberty (CODAL),6Senator Ma. Ana Consuelo A.S. Madrigal, Sergio Osmea III, and Wigberto E. Taada filed a petition for certiorari and prohibition docketed as G.R. No. 179157. Bagong Alyansang Makabayan-Southern Tagalog (BAYAN-ST), other regional chapters and organizations mostly based in the Southern Tagalog Region,7 and individuals8 followed suit by filing on September 19, 2007 a petition for certiorari and prohibition docketed as G.R. No. 179461 that replicates the allegations raised in the BAYAN petition in G.R. No. 178581. Impleaded as respondents in the various petitions are the Anti-Terrorism Council9 composed of, at the time of the filing of the petitions, Executive Secretary Eduardo Ermita as Chairperson, Justice Secretary Raul Gonzales as Vice Chairperson, and Foreign Affairs Secretary Alberto Romulo, Acting Defense Secretary and National Security Adviser Norberto Gonzales, Interior and Local Government Secretary Ronaldo Puno, and Finance Secretary Margarito Teves as members. All the petitions, except that of the IBP, also impleaded Armed Forces of the Philippines (AFP) Chief of Staff Gen. Hermogenes Esperon and Philippine National Police (PNP) Chief Gen. Oscar Calderon. The Karapatan, BAYAN and BAYAN-ST petitions likewise impleaded President Gloria Macapagal-Arroyo and the support agencies for the Anti-Terrorism Council like the National Intelligence Coordinating Agency, National Bureau of Investigation, Bureau of Immigration, Office of Civil Defense, Intelligence Service of the AFP, Anti-Money Laundering Center, Philippine Center on Transnational Crime, and the PNP intelligence and investigative elements. The petitions fail. Petitioners resort to certiorari is improper Preliminarily, certiorari does not lie against respondents who do not exercise judicial or quasi-judicial functions. Section 1, Rule 65 of the Rules of Court is clear:

SOUTHERN HEMISPHERE ENGAGEMENT NETWORK, INC., on behalf of the SouthSouth Network (SSN) for Non-State Armed Group Engagement, and ATTY. SOLIMAN M. SANTOS, JR., Petitioners, vs. ANTI-TERRORISM COUNCIL, THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, THE SECRETARY OF FOREIGN AFFAIRS, THE SECRETARY OF NATIONAL DEFENSE, THE SECRETARY OF THE INTERIOR AND LOCAL GOVERNMENT, THE SECRETARY OF FINANCE, THE NATIONAL SECURITY ADVISER, THE CHIEF OF STAFF OF THE ARMED FORCES OF THE PHILIPPINES, AND THE CHIEF OF THE PHILIPPINE NATIONAL POLICE, Respondents. x - - - - - - - - - - - - - - - - - - - - - - -x

CARPIO MORALES, J.: Before the Court are six petitions challenging the constitutionality of Republic Act No. 9372 (RA 9372), "An Act to Secure the State and Protect our People from Terrorism," otherwise known as the Human Security Act of 2007,1signed into law on March 6, 2007. Following the effectivity of RA 9372 on July 15, 2007,2 petitioner Southern Hemisphere Engagement Network, Inc., a non-government organization, and Atty. Soliman Santos, Jr., a concerned citizen, taxpayer and lawyer, filed a petition for certiorari and prohibition on July 16, 2007 docketed as G.R. No. 178552. On even date, petitioners Kilusang Mayo Uno (KMU), National Federation of Labor Unions-Kilusang Mayo Uno (NAFLU-KMU), and Center for Trade Union and Human Rights (CTUHR), represented by their respective officers3 who are also bringing the action in their capacity as citizens, filed a petition for certiorari and prohibition docketed as G.R. No. 178554. The following day, July 17, 2007, organizations Bagong Alyansang Makabayan (BAYAN), General Alliance Binding Women for Reforms, Integrity, Equality, Leadership and Action (GABRIELA), Kilusang Magbubukid ng Pilipinas (KMP), Movement of Concerned Citizens for Civil Liberties (MCCCL), Confederation for Unity, Recognition and Advancement of Government Employees (COURAGE), Kalipunan ng Damayang Mahihirap (KADAMAY), Solidarity of Cavite Workers (SCW), League of Filipino Students (LFS), Anakbayan, Pambansang Lakas ng Kilusang Mamamalakaya (PAMALAKAYA), Alliance of Concerned Teachers (ACT), Migrante, Health Alliance for Democracy (HEAD), and Agham, represented by their respective officers,4 and joined by concerned citizens and taxpayers Teofisto Guingona, Jr., Dr. Bienvenido Lumbera, Renato Constantino, Jr., Sister Mary John Manansan, OSB, Dean Consuelo Paz, Atty. Josefina Lichauco, Retired Col. Gerry Cunanan,

Section 1. Petition for certiorari.When any tribunal, board or officer exercising judicial or quasi-judicial functionshas acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require. (Emphasis and underscoring supplied) Parenthetically, petitioners do not even allege with any modicum of particularity how respondents acted without or in excess of their respective jurisdictions, or with grave abuse of discretion amounting to lack or excess of jurisdiction. The impropriety of certiorari as a remedy aside, the petitions fail just the same. In constitutional litigations, the power of judicial review is limited by four exacting requisites, viz: (a) there must be an actual case or controversy; (b) petitioners must possess locus standi; (c) the question of constitutionality must be raised at the earliest opportunity; and (d) the issue of constitutionality must be the lis mota of the case. 10 In the present case, the dismal absence of the first two requisites, which are the most essential, renders the discussion of the last two superfluous. Petitioners lack locus standi Locus standi or legal standing requires a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions.11 Anak Mindanao Party-List Group v. The Executive Secretary12 summarized the rule on locus standi, thus: Locus standi or legal standing has been defined as a personal and substantial interest in a case such that the party has sustained or will sustain direct injury as a result of the governmental act that is being challenged. The gist of the question on standing is whether a party alleges such personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon which the court depends for illumination of difficult constitutional questions. [A] party who assails the constitutionality of a statute must have a direct and personal interest. It must show not only that the law or any governmental act is invalid, but also that it sustained or is in immediate danger of sustaining some direct injury as a result of its enforcement, and not merely that it suffers thereby in some indefinite way. It must

show that it has been or is about to be denied some right or privilege to which it is lawfully entitled or that it is about to be subjected to some burdens or penalties by reason of the statute or act complained of. For a concerned party to be allowed to raise a constitutional question, it must show that (1) it has personally suffered some actual or threatened injury as a result of the allegedly illegal conduct of the government, (2) the injury is fairly traceable to the challenged action, and (3) the injury is likely to be redressed by a favorable action. (emphasis and underscoring supplied.) Petitioner-organizations assert locus standi on the basis of being suspected "communist fronts" by the government, especially the military; whereas individual petitioners invariably invoke the "transcendental importance" doctrine and their status as citizens and taxpayers. While Chavez v. PCGG13 holds that transcendental public importance dispenses with the requirement that petitioner has experienced or is in actual danger of suffering direct and personal injury, cases involving the constitutionality of penal legislation belong to an altogether different genus of constitutional litigation. Compelling State and societal interests in the proscription of harmful conduct, as will later be elucidated, necessitate a closer judicial scrutiny of locus standi. Petitioners have not presented any personal stake in the outcome of the controversy. None of them faces any charge under RA 9372. KARAPATAN, Hustisya, Desaparecidos, SELDA, EMJP and PCR, petitioners in G.R. No. 178890, allege that they have been subjected to "close security surveillance by state security forces," their members followed by "suspicious persons" and "vehicles with dark windshields," and their offices monitored by "men with military build." They likewise claim that they have been branded as "enemies of the [S]tate."14 Even conceding such gratuitous allegations, the Office of the Solicitor General (OSG) correctly points out that petitioners have yet to show any connection between the purported "surveillance" and the implementation of RA 9372. BAYAN, GABRIELA, KMP, MCCCL, COURAGE, KADAMAY, SCW, LFS, Anakbayan, PAMALAKAYA, ACT, Migrante, HEAD and Agham, petitioner-organizations in G.R. No. 178581, would like the Court to take judicial notice of respondents alleged action of tagging them as militant organizations fronting for the Communist Party of the Philippines (CPP) and its armed wing, the National Peoples Army (NPA). The tagging, according to petitioners, is tantamount to the effects of proscription without following the procedure under the law.15 The petition of BAYAN-ST, et al. in G.R. No. 179461 pleads the same allegations. The Court cannot take judicial notice of the alleged "tagging" of petitioners.

Generally speaking, matters of judicial notice have three material requisites: (1) the matter must be one of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain; and (3) it must be known to be within the limits of the jurisdiction of the court. The principal guide in determining what facts may be assumed to be judicially known is that of notoriety. Hence, it can be said that judicial notice is limited to facts evidenced by public records and facts of general notoriety. Moreover, a judicially noticed fact must be one not subject to a reasonable dispute in that it is either: (1) generally known within the territorial jurisdiction of the trial court; or (2) capable of accurate and ready determination by resorting to sources whose accuracy cannot reasonably be questionable. Things of "common knowledge," of which courts take judicial matters coming to the knowledge of men generally in the course of the ordinary experiences of life, or they may be matters which are generally accepted by mankind as true and are capable of ready and unquestioned demonstration. Thus, facts which are universally known, and which may be found in encyclopedias, dictionaries or other publications, are judicially noticed, provided, they are of such universal notoriety and so generally understood that they may be regarded as forming part of the common knowledge of every person. As the common knowledge of man ranges far and wide, a wide variety of particular facts have been judicially noticed as being matters of common knowledge. But a court cannot take judicial notice of any fact which, in part, is dependent on the existence or non-existence of a fact of which the court has no constructive knowledge.16 (emphasis and underscoring supplied.) No ground was properly established by petitioners for the taking of judicial notice. Petitioners apprehension is insufficient to substantiate their plea. That no specific charge or proscription under RA 9372 has been filed against them, three years after its effectivity, belies any claim of imminence of their perceived threat emanating from the so-called tagging. The same is true with petitioners KMU, NAFLU and CTUHR in G.R. No. 178554, who merely harp as well on their supposed "link" to the CPP and NPA. They fail to particularize how the implementation of specific provisions of RA 9372 would result in direct injury to their organization and members. While in our jurisdiction there is still no judicially declared terrorist organization, the United States of America17(US) and the European Union18 (EU) have both classified the CPP, NPA and Abu Sayyaf Group as foreign terrorist organizations. The Court takes note of the joint statement of Executive Secretary Eduardo Ermita and Justice Secretary Raul Gonzales that the Arroyo Administration would adopt the US and EU classification of the CPP and NPA as terrorist organizations.19 Such statement notwithstanding, there is yet to be filed before the courts an application to declare the CPP and NPA organizations as domestic terrorist or outlawed organizations under RA 9372. Again, RA 9372 has been in effect for three years now. From July 2007 up to the present, petitioner-organizations have conducted their activities fully and freely without any threat of, much less an actual, prosecution or proscription under RA 9372.

Parenthetically, the Fourteenth Congress, in a resolution initiated by Party-list Representatives Saturnino Ocampo, Teodoro Casio, Rafael Mariano and Luzviminda Ilagan,20 urged the government to resume peace negotiations with the NDF by removing the impediments thereto, one of which is the adoption of designation of the CPP and NPA by the US and EU as foreign terrorist organizations. Considering the policy statement of the Aquino Administration21 of resuming peace talks with the NDF, the government is not imminently disposed to ask for the judicial proscription of the CPP-NPA consortium and its allied organizations. More important, there are other parties not before the Court with direct and specific interests in the questions being raised.22 Of recent development is the filing of the first case for proscription under Section 1723 of RA 9372 by the Department of Justice before the Basilan Regional Trial Court against the Abu Sayyaf Group.24 Petitionerorganizations do not in the least allege any link to the Abu Sayyaf Group. Some petitioners attempt, in vain though, to show the imminence of a prosecution under RA 9372 by alluding to past rebellion charges against them. In Ladlad v. Velasco,25 the Court ordered the dismissal of rebellion charges filed in 2006 against then Party-List Representatives Crispin Beltran and Rafael Mariano of Anakpawis, Liza Maza of GABRIELA, and Joel Virador, Teodoro Casio and Saturnino Ocampo of Bayan Muna. Also named in the dismissed rebellion charges were petitioners Rey Claro Casambre, Carolina Pagaduan-Araullo, Renato Reyes, Rita Baua, Emerencia de Jesus and Danilo Ramos; and accused of being front organizations for the Communist movement were petitioner-organizations KMU, BAYAN, GABRIELA, PAMALAKAYA, KMP, KADAMAY, LFS and COURAGE.26 The dismissed rebellion charges, however, do not save the day for petitioners. For one, those charges were filed in 2006, prior to the enactment of RA 9372, and dismissed by this Court. For another, rebellion is defined and punished under the Revised Penal Code. Prosecution for rebellion is not made more imminent by the enactment of RA 9372, nor does the enactment thereof make it easier to charge a person with rebellion, its elements not having been altered. Conversely, previously filed but dismissed rebellion charges bear no relation to prospective charges under RA 9372. It cannot be overemphasized that three years after the enactment of RA 9372, none of petitioners has been charged. Petitioners IBP and CODAL in G.R. No. 179157 base their claim of locus standi on their sworn duty to uphold the Constitution. The IBP zeroes in on Section 21 of RA 9372 directing it to render assistance to those arrested or detained under the law. The mere invocation of the duty to preserve the rule of law does not, however, suffice to clothe the IBP or any of its members with standing.27 The IBP failed to sufficiently demonstrate how its mandate under the assailed statute revolts against its constitutional

rights and duties. Moreover, both the IBP and CODAL have not pointed to even a single arrest or detention effected under RA 9372. Former Senator Ma. Ana Consuelo Madrigal, who claims to have been the subject of "political surveillance," also lacks locus standi. Prescinding from the veracity, let alone legal basis, of the claim of "political surveillance," the Court finds that she has not shown even the slightest threat of being charged under RA 9372. Similarly lacking in locus standi are former Senator Wigberto Taada and Senator Sergio Osmea III, who cite their being respectively a human rights advocate and an oppositor to the passage of RA 9372. Outside these gratuitous statements, no concrete injury to them has been pinpointed. Petitioners Southern Hemisphere Engagement Network and Atty. Soliman Santos Jr. in G.R. No. 178552 also conveniently state that the issues they raise are of transcendental importance, "which must be settled early" and are of "far-reaching implications," without mention of any specific provision of RA 9372 under which they have been charged, or may be charged. Mere invocation of human rights advocacy has nowhere been held sufficient to clothe litigants with locus standi. Petitioners must show an actual, or immediate danger of sustaining, direct injury as a result of the laws enforcement. To rule otherwise would be to corrupt the settled doctrine of locus standi, as every worthy cause is an interest shared by the general public. Neither can locus standi be conferred upon individual petitioners as taxpayers and citizens. A taxpayer suit is proper only when there is an exercise of the spending or taxing power of Congress,28 whereas citizen standing must rest on direct and personal interest in the proceeding.29 RA 9372 is a penal statute and does not even provide for any appropriation from Congress for its implementation, while none of the individual petitioner-citizens has alleged any direct and personal interest in the implementation of the law. It bears to stress that generalized interests, albeit accompanied by the assertion of a public right, do not establish locus standi. Evidence of a direct and personal interest is key. Petitioners fail to present an actual case or controversy By constitutional fiat, judicial power operates only when there is an actual case or controversy. Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law.

Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government.30(emphasis and underscoring supplied.) As early as Angara v. Electoral Commission,31 the Court ruled that the power of judicial review is limited to actual cases or controversies to be exercised after full opportunity of argument by the parties. Any attempt at abstraction could only lead to dialectics and barren legal questions and to sterile conclusions unrelated to actualities. An actual case or controversy means an existing case or controversy that is appropriate or ripe for determination, not conjectural or anticipatory, lest the decision of the court would amount to an advisory opinion.32 Information Technology Foundation of the Philippines v. COMELEC33 cannot be more emphatic: [C]ourts do not sit to adjudicate mere academic questions to satisfy scholarly interest, however intellectually challenging. The controversy must be justiciabledefinite and concrete, touching on the legal relations of parties having adverse legal interests. In other words, the pleadings must show an active antagonistic assertion of a legal right, on the one hand, and a denial thereof on the other hand; that is, it must concern a real and not merely a theoretical question or issue. There ought to be an actual and substantial controversy admitting of specific relief through a decree conclusive in nature, as distinguished from an opinion advising what the law would be upon a hypothetical state of facts. (Emphasis and underscoring supplied) Thus, a petition to declare unconstitutional a law converting the Municipality of Makati into a Highly Urbanized City was held to be premature as it was tacked on uncertain, contingent events.34 Similarly, a petition that fails to allege that an application for a license to operate a radio or television station has been denied or granted by the authorities does not present a justiciable controversy, and merely wheedles the Court to rule on a hypothetical problem.35 The Court dismissed the petition in Philippine Press Institute v. Commission on Elections36 for failure to cite any specific affirmative action of the Commission on Elections to implement the assailed resolution. It refused, in Abbas v. Commission on Elections,37 to rule on the religious freedom claim of the therein petitioners based merely on a perceived potential conflict between the provisions of the Muslim Code and those of the national law, there being no actual controversy between real litigants. The list of cases denying claims resting on purely hypothetical or anticipatory grounds goes on ad infinitum.

The Court is not unaware that a reasonable certainty of the occurrence of a perceived threat to any constitutional interest suffices to provide a basis for mounting a constitutional challenge. This, however, is qualified by the requirement that there must be sufficient facts to enable the Court to intelligently adjudicate the issues.38 Very recently, the US Supreme Court, in Holder v. Humanitarian Law Project,39 allowed the pre-enforcement review of a criminal statute, challenged on vagueness grounds, since plaintiffs faced a "credible threat of prosecution" and "should not be required to await and undergo a criminal prosecution as the sole means of seeking relief."40 The plaintiffs therein filed an action before a federal court to assail the constitutionality of the material support statute, 18 U.S.C. 2339B (a) (1),41 proscribing the provision of material support to organizations declared by the Secretary of State as foreign terrorist organizations. They claimed that they intended to provide support for the humanitarian and political activities of two such organizations. Prevailing American jurisprudence allows an adjudication on the merits when an anticipatory petition clearly shows that the challenged prohibition forbids the conduct or activity that a petitioner seeks to do, as there would then be a justiciable controversy. 42 Unlike the plaintiffs in Holder, however, herein petitioners have failed to show that the challenged provisions of RA 9372 forbid constitutionally protected conduct or activity that they seek to do. No demonstrable threat has been established, much less a real and existing one. Petitioners obscure allegations of sporadic "surveillance" and supposedly being tagged as "communist fronts" in no way approximate a credible threat of prosecution. From these allegations, the Court is being lured to render an advisory opinion, which is not its function.43 Without any justiciable controversy, the petitions have become pleas for declaratory relief, over which the Court has no original jurisdiction. Then again, declaratory actions characterized by "double contingency," where both the activity the petitioners intend to undertake and the anticipated reaction to it of a public official are merely theorized, lie beyond judicial review for lack of ripeness.44 The possibility of abuse in the implementation of RA 9372 does not avail to take the present petitions out of the realm of the surreal and merely imagined. Such possibility is not peculiar to RA 9372 since the exercise of any power granted by law may be abused.45 Allegations of abuse must be anchored on real events before courts may step in to settle actual controversies involving rights which are legally demandable and enforceable. A facial invalidation of a statute is allowed only in free speech cases, wherein certain rules of constitutional litigation are rightly excepted

Petitioners assail for being intrinsically vague and impermissibly broad the definition of the crime of terrorism46under RA 9372 in that terms like "widespread and extraordinary fear and panic among the populace" and "coerce the government to give in to an unlawful demand" are nebulous, leaving law enforcement agencies with no standard to measure the prohibited acts. Respondents, through the OSG, counter that the doctrines of void-for-vagueness and overbreadth find no application in the present case since these doctrines apply only to free speech cases; and that RA 9372 regulates conduct, not speech. For a jurisprudentially guided understanding of these doctrines, it is imperative to outline the schools of thought on whether the void-for-vagueness and overbreadth doctrines are equally applicable grounds to assail a penal statute. Respondents interpret recent jurisprudence as slanting toward the idea of limiting the application of the two doctrines to free speech cases. They particularly cite Romualdez v. Hon. Sandiganbayan47 and Estrada v. Sandiganbayan.48 The Court clarifies. At issue in Romualdez v. Sandiganbayan was whether the word "intervene" in Section 549 of the Anti-Graft and Corrupt Practices Act was intrinsically vague and impermissibly broad. The Court stated that "the overbreadth and the vagueness doctrines have special application only to free-speech cases," and are "not appropriate for testing the validity of penal statutes."50 It added that, at any rate, the challenged provision, under which the therein petitioner was charged, is not vague.51 While in the subsequent case of Romualdez v. Commission on Elections,52 the Court stated that a facial invalidation of criminal statutes is not appropriate, it nonetheless proceeded to conduct a vagueness analysis, and concluded that the therein subject election offense53 under the Voters Registration Act of 1996, with which the therein petitioners were charged, is couched in precise language.54 The two Romualdez cases rely heavily on the Separate Opinion55 of Justice Vicente V. Mendoza in the Estradacase, where the Court found the Anti-Plunder Law (Republic Act No. 7080) clear and free from ambiguity respecting the definition of the crime of plunder. The position taken by Justice Mendoza in Estrada relates these two doctrines to the concept of a "facial" invalidation as opposed to an "as-applied" challenge. He basically postulated that allegations that a penal statute is vague and overbroad do not justify a facial review of its validity. The pertinent portion of the Concurring Opinion of Justice Mendoza, which was quoted at length in the main Estrada decision, reads:

A facial challenge is allowed to be made to a vague statute and to one which is overbroad because of possible"chilling effect" upon protected speech. The theory is that "[w]hen statutes regulate or proscribe speech and no readily apparent construction suggests itself as a vehicle for rehabilitating the statutes in a single prosecution, the transcendent value to all society of constitutionally protected expression is deemed to justify allowing attacks on overly broad statutes with no requirement that the person making the attack demonstrate that his own conduct could not be regulated by a statute drawn with narrow specificity." The possible harm to society in permitting some unprotected speech to go unpunished is outweighed by the possibility that the protected speech of others may be deterred and perceived grievances left to fester because of possible inhibitory effects of overly broad statutes. This rationale does not apply to penal statutes. Criminal statutes have general in terrorem effect resulting from their very existence, and, if facial challenge is allowed for this reason alone, the State may well be prevented from enacting laws against socially harmful conduct. In the area of criminal law, the law cannot take chances as in the area of free speech. The overbreadth and vagueness doctrines then have special application only to free speech cases. They are inapt for testing the validity of penal statutes. As the U.S. Supreme Court put it, in an opinion by Chief Justice Rehnquist, "we have not recognized an 'overbreadth' doctrine outside the limited context of the First Amendment." In Broadrick v. Oklahoma, the Court ruled that "claims of facial overbreadth have been entertained in cases involving statutes which, by their terms, seek to regulate only spoken words" and, again, that "overbreadth claims, if entertained at all, have been curtailed when invoked against ordinary criminal laws that are sought to be applied to protected conduct." For this reason, it has been held that "a facial challenge to a legislative act is the most difficult challenge to mount successfully, since the challenger must establish that no set of circumstances exists under which the Act would be valid." As for the vagueness doctrine, it is said that a litigant may challenge a statute on its face only if it is vague in all its possible applications. "A plaintiff who engages in some conduct that is clearly proscribed cannot complain of the vagueness of the law as applied to the conduct of others." In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for testing "on their faces" statutes in free speech cases or, as they are called in American law, First Amendment cases. They cannot be made to do service when what is involved is a criminal statute. With respect to such statute, the established rule is that "one to whom application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to other persons or other situations in which its application might be unconstitutional." As has been pointed out, "vagueness challenges in the First Amendment context, like overbreadth challenges typically produce facial invalidation, while statutes found vague as a matter of due process typically are invalidated [only] 'as applied' to a particular defendant." Consequently, there is no basis for petitioner's claim that this Court review the AntiPlunder Law on its face and in its entirety.

Indeed, "on its face" invalidation of statutes results in striking them down entirely on the ground that they might be applied to parties not before the Court whose activities are constitutionally protected. It constitutes a departure from the case and controversy requirement of the Constitution and permits decisions to be made without concrete factual settings and in sterile abstract contexts. But, as the U.S. Supreme Court pointed out in Younger v. Harris [T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed statutes, . . . ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided. For these reasons, "on its face" invalidation of statutes has been described as "manifestly strong medicine," to be employed "sparingly and only as a last resort," and is generally disfavored. In determining the constitutionality of a statute, therefore, its provisions which are alleged to have been violated in a case must be examined in the light of the conduct with which the defendant is charged.56 (Underscoring supplied.) The confusion apparently stems from the interlocking relation of the overbreadth and vagueness doctrines as grounds for a facial or as-applied challenge against a penal statute (under a claim of violation of due process of law) or a speech regulation (under a claim of abridgement of the freedom of speech and cognate rights). To be sure, the doctrine of vagueness and the doctrine of overbreadth do not operate on the same plane. A statute or act suffers from the defect of vagueness when it lacks comprehensible standards that men of common intelligence must necessarily guess at its meaning and differ as to its application. It is repugnant to the Constitution in two respects: (1) it violates due process for failure to accord persons, especially the parties targeted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government muscle.57 The overbreadth doctrine, meanwhile, decrees that a governmental purpose to control or prevent activities constitutionally subject to state regulations may not be achieved by means which sweep unnecessarily broadly and thereby invade the area of protected freedoms.58 As distinguished from the vagueness doctrine, the overbreadth doctrine assumes that individuals will understand what a statute prohibits and will accordingly refrain from that behavior, even though some of it is protected.59 A "facial" challenge is likewise different from an "as-applied" challenge.

Distinguished from an as-applied challenge which considers only extant facts affecting real litigants, a facialinvalidation is an examination of the entire law, pinpointing its flaws and defects, not only on the basis of its actual operation to the parties, but also on the assumption or prediction that its very existence may cause others not before the court to refrain from constitutionally protected speech or activities.60 Justice Mendoza accurately phrased the subtitle61 in his concurring opinion that the vagueness and overbreadth doctrines, as grounds for a facial challenge, are not applicable to penal laws. A litigant cannot thus successfully mount a facial challenge against a criminal statute on either vagueness or overbreadth grounds. The allowance of a facial challenge in free speech cases is justified by the aim to avert the "chilling effect" on protected speech, the exercise of which should not at all times be abridged.62 As reflected earlier, this rationale is inapplicable to plain penal statutes that generally bear an "in terrorem effect" in deterring socially harmful conduct. In fact, the legislature may even forbid and penalize acts formerly considered innocent and lawful, so long as it refrains from diminishing or dissuading the exercise of constitutionally protected rights.63 The Court reiterated that there are "critical limitations by which a criminal statute may be challenged" and "underscored that an on-its-face invalidation of penal statutes x x x may not be allowed."64 [T]he rule established in our jurisdiction is, only statutes on free speech, religious freedom, and other fundamental rights may be facially challenged. Under no case may ordinary penal statutes be subjected to a facial challenge. The rationale is obvious. If a facial challenge to a penal statute is permitted, the prosecution of crimes may be hampered. No prosecution would be possible. A strong criticism against employing a facial challenge in the case of penal statutes, if the same is allowed, would effectively go against the grain of the doctrinal requirement of an existing and concrete controversy before judicial power may be appropriately exercised. A facial challenge against a penal statute is, at best, amorphous and speculative. It would, essentially, force the court to consider third parties who are not before it. As I have said in my opposition to the allowance of a facial challenge to attack penal statutes, such a test will impair the States ability to deal with crime. If warranted, there would be nothing that can hinder an accused from defeating the States power to prosecute on a mere showing that, as applied to third parties, the penal statute is vague or overbroad, notwithstanding that the law is clear as applied to him.65(Emphasis and underscoring supplied) It is settled, on the other hand, that the application of the overbreadth doctrine is limited to a facial kind of challenge and, owing to the given rationale of a facial challenge, applicable only to free speech cases. By its nature, the overbreadth doctrine has to necessarily apply a facial type of invalidation in order to plot areas of protected speech, inevitably almost always under

situations not before the court, that are impermissibly swept by the substantially overbroad regulation. Otherwise stated, a statute cannot be properly analyzed for being substantially overbroad if the court confines itself only to facts as applied to the litigants. The most distinctive feature of the overbreadth technique is that it marks an exception to some of the usual rules of constitutional litigation. Ordinarily, a particular litigant claims that a statute is unconstitutional as applied to him or her; if the litigant prevails, the courts carve away the unconstitutional aspects of the law by invalidating its improper applications on a case to case basis. Moreover, challengers to a law are not permitted to raise the rights of third parties and can only assert their own interests. In overbreadth analysis, those rules give way; challenges are permitted to raise the rights of third parties; and the court invalidates the entire statute "on its face," not merely"as applied for" so that the overbroad law becomes unenforceable until a properly authorized court construes it more narrowly. The factor that motivates courts to depart from the normal adjudicatory rules is the concern with the "chilling;" deterrent effect of the overbroad statute on third parties not courageous enough to bring suit. The Court assumes that an overbroad laws "very existence may cause others not before the court to refrain from constitutionally protected speech or expression." An overbreadth ruling is designed to remove that deterrent effect on the speech of those third parties.66 (Emphasis in the original omitted; underscoring supplied.) In restricting the overbreadth doctrine to free speech claims, the Court, in at least two cases,67 observed that the US Supreme Court has not recognized an overbreadth doctrine outside the limited context of the First Amendment,68 and that claims of facial overbreadth have been entertained in cases involving statutes which, by their terms, seek to regulate only spoken words.69 In Virginia v. Hicks,70 it was held that rarely, if ever, will an overbreadth challenge succeed against a law or regulation that is not specifically addressed to speech or speech-related conduct. Attacks on overly broad statutes are justified by the "transcendent value to all society of constitutionally protected expression."71 Since a penal statute may only be assailed for being vague as applied to petitioners, a limited vagueness analysis of the definition of "terrorism" in RA 9372 is legally impermissible absent an actual or imminent chargeagainst them While Estrada did not apply the overbreadth doctrine, it did not preclude the operation of the vagueness test on the Anti-Plunder Law as applied to the therein petitioner, finding, however, that there was no basis to review the law "on its face and in its entirety."72 It stressed that "statutes found vague as a matter of due process typically are invalidated only 'as applied' to a particular defendant."73 American jurisprudence74 instructs that "vagueness challenges that do not involve the First Amendment must be examined in light of the specific facts of the case at hand and not with regard to the statute's facial validity."

For more than 125 years, the US Supreme Court has evaluated defendants claims that criminal statutes are unconstitutionally vague, developing a doctrine hailed as "among the most important guarantees of liberty under law."75 In this jurisdiction, the void-for-vagueness doctrine asserted under the due process clause has been utilized in examining the constitutionality of criminal statutes. In at least three cases,76 the Court brought the doctrine into play in analyzing an ordinance penalizing the non-payment of municipal tax on fishponds, the crime of illegal recruitment punishable under Article 132(b) of the Labor Code, and the vagrancy provision under Article 202 (2) of the Revised Penal Code. Notably, the petitioners in these three cases, similar to those in the two Romualdezand Estrada cases, were actually charged with the therein assailed penal statute, unlike in the present case. There is no merit in the claim that RA 9372 regulates speech so as to permit a facial analysis of its validity From the definition of the crime of terrorism in the earlier cited Section 3 of RA 9372, the following elements may be culled: (1) the offender commits an act punishable under any of the cited provisions of the Revised Penal Code, or under any of the enumerated special penal laws; (2) the commission of the predicate crime sows and creates a condition of widespread and extraordinary fear and panic among the populace; and (3) the offender is actuated by the desire to coerce the government to give in to an unlawful demand. In insisting on a facial challenge on the invocation that the law penalizes speech, petitioners contend that the element of "unlawful demand" in the definition of terrorism77 must necessarily be transmitted through some form of expression protected by the free speech clause. The argument does not persuade. What the law seeks to penalize is conduct, not speech. Before a charge for terrorism may be filed under RA 9372, there must first be a predicate crime actually committed to trigger the operation of the key qualifying phrases in the other elements of the crime, including the coercion of the government to accede to an "unlawful demand." Given the presence of the first element, any attempt at singling out or highlighting the communicative component of the prohibition cannot recategorize the unprotected conduct into a protected speech. Petitioners notion on the transmission of message is entirely inaccurate, as it unduly focuses on just one particle of an element of the crime. Almost every commission of a crime entails some mincing of words on the part of the offender like in declaring to launch overt criminal acts against a victim, in haggling on the amount of ransom or conditions, or in negotiating a deceitful transaction. An analogy in one U.S. case78 illustrated that the fact that the prohibition on discrimination in hiring on the basis of race will require an employer to take down a sign reading "White Applicants

Only" hardly means that the law should be analyzed as one regulating speech rather than conduct. Utterances not elemental but inevitably incidental to the doing of the criminal conduct alter neither the intent of the law to punish socially harmful conduct nor the essence of the whole act as conduct and not speech. This holds true a fortiori in the present case where the expression figures only as an inevitable incident of making the element of coercion perceptible. [I]t is true that the agreements and course of conduct here were as in most instances brought about through speaking or writing. But it has never been deemed an abridgement of freedom of speech or press to make a course of conduct illegal merely because the conduct was, in part, initiated, evidenced, or carried out by means of language, either spoken, written, or printed. Such an expansive interpretation of the constitutional guaranties of speech and press would make it practically impossible ever to enforce laws against agreements in restraint of trade as well as many other agreements and conspiracies deemed injurious to society.79 (italics and underscoring supplied) Certain kinds of speech have been treated as unprotected conduct, because they merely evidence a prohibited conduct.80 Since speech is not involved here, the Court cannot heed the call for a facial analysis.1avvphi1 IN FINE, Estrada and the other cited authorities engaged in a vagueness analysis of the therein subject penal statute as applied to the therein petitioners inasmuch as they were actually charged with the pertinent crimes challenged on vagueness grounds. The Court in said cases, however, found no basis to review the assailed penal statute on its face and in its entirety. In Holder, on the other hand, the US Supreme Court allowed the pre-enforcement review of a criminal statute, challenged on vagueness grounds, since the therein plaintiffs faced a "credible threat of prosecution" and "should not be required to await and undergo a criminal prosecution as the sole means of seeking relief." As earlier reflected, petitioners have established neither an actual charge nor a credible threat of prosecutionunder RA 9372. Even a limited vagueness analysis of the assailed definition of "terrorism" is thus legally impermissible. The Court reminds litigants that judicial power neither contemplates speculative counseling on a statutes future effect on hypothetical scenarios nor allows the courts to be used as an extension of a failed legislative lobbying in Congress. WHEREFORE, the petitions are DISMISSED.