I.

IN GENERAL

The prohibition in Article 1491 of the Civil Code applies only to the sale or assignment of
the property which is the subject of litigation to the persons disqualified therein. WE have
already ruled that " . . . for the prohibition to operate, the sale or assignment of the property
must take place during the pendency of the litigation involving the property" (The Director of
Lands vs. Ababa, et al., 88 SCRA 513). Consequently, the sale of a portion of Lot 1184-E
to respondent Judge having taken place over one year after the finality of the decision in
Civil Case No. 3010 as well as the two orders approving the project of partition, and not
during the pendency of the litigation, there was no violation of paragraph 5, Article 1491 of
the New Civil Code.

EN BANC
[Adm. Case No. 133-J. May 31, 1982.]
BERNARDITA R. MACARIOLA, complainant, vs. HONORABLE ELIAS
B. ASUNCION, Judge of the Court of First Instance of
Leyte, respondent.

2. JUDICIAL ETHICS; CANONS OF JUDICIAL ETHICS; JUDGE'S CONDUCT

SHOULD BE FREE FROM APPEARANCE OF IMPROPRIETY; JUDGE'S
TRANSACTIONS REGARDING PROPERTIES LITIGATED IN HIS COURT, NOT PROPER.
Finally, while it is true that respondent Judge did not violate paragraph 5, Article 1491 of
the New Civil Code in acquiring by purchase a portion of Lot 1184-E which was in litigation
in his court, it was, however, improper for him to have acquired the same. He should be
reminded of Canon 3 of the Canons of Judicial Ethics which requires that: "A judge's official
conduct should be free from the appearance of impropriety, and his personal behavior, not
only upon the bench and in the performance of judicial duties, but also in his everyday life,
should be beyond reproach." Even if respondent honestly believed that Lot 1184-E was no
longer in litigation in his court and that he was purchasing it from a third person and not
from the parties to the litigation, he should nonetheless have refrained from buying it for
himself and transferring it to a corporation in which he and his wife were financially
involved, to avoid possible suspicion that his acquisition was related in one way or another
to his official actuations in civil case 3010. The conduct of respondent gave cause for the
litigants in civil case 3010, the lawyers practising in his court, and the public in general to
doubt the honesty and fairness of his actuations and the integrity of our courts of justice.

SYNOPSIS
Respondent judge was charged for having violated (1) Article 1491 of the New
Civil Code when he acquired by purchase portion of a lot which was involved in a civil case
decided by him; (2) Article 14 of the Code of Commerce, the Anti-Graft and Corrupt
Practices Act, the Civil Service Rules, and the Canons of Judicial Ethics, when he
associated himself with the Traders Manufacturing and Fishing Industries, Inc., as a
stockholder and a ranking officer while he was a judge of the Court of First Instance.
The Supreme Court held that there was no violation of Paragraph 5,
Article 1491 of the New Civil Code because the sale took place after finality of the
decision; that respondent may not be held liable under paragraphs 1 and 5, Article
14 of the Code of Commerce (which is of Spanish vintage), because the provision
partakes of the nature of a political law as it regulates the relationship between the
government and certain public officers and employees and as such is deemed to
have been automatically abrogated with the change of sovereignty from Spain to
the United States; that respondent cannot be held liable under Paragraph H,
Section 3 of the Anti-Graft and Corrupt Practices Act because there is no showing
(a) that he participated or intervened in his official capacity in the business or
transaction of the Traders Manufacturing and Fishing Industries, Inc., or (b) that
said corporation gained any undue advantage by reason of respondent's financial
involvement in it, and because neither the 1935 nor the 1973 Constitution of the
Philippines or any existing law expressly prohibits members of the Judiciary from
engaging or having any interest in any lawful business.

3. MERCANTILE LAW; CODE OF COMMERCE; ARTICLE 14 THEREOF

PARTAKES OF THE NATURE OF A POLITICAL LAW. Although Article 14 of the Code of
Commerce is part of the commercial laws of the Philippines, it, however, partakes of the
nature of a political law as it regulates the relationship between the government and certain
public officers and employees, like justices and judges.
4. CONSTITUTIONAL LAW; POLITICAL LAW, DEFINED. Political law has
been defined as that branch of public law which deals with the organization and operation
of the governmental organs of the State and defines the relations of the state with the
inhabitants of its territory (People vs. Perfecto, 43 Phil. 887). It must be recalled that a
political law embraces constitutional law, law of public corporations, administrative law
including the law on public officers and election.

Respondent is reminded to be more discreet in his private and business

activities.
SYLLABUS

5. MERCANTILE LAW; CODE OF COMMERCE, ARTICLE 14 THEREOF

ABROGATED BY CHANGE OF SOVEREIGNTY. Upon the transfer of sovereignty from
Spain to the United States to the Republic of the Philippines, Article 14 of this Code of

1. CIVIL LAW; CONTRACTS; SALES; PROHIBITION TO BUY IN ARTICLE 1491

REFERS TO PROPERTIES UNDER LITIGATION; NO VIOLATION IN CASE AT BAR.

Commerce must be deemed to have abrogated because where there is change of

sovereignty, the political laws of the former sovereign, whether compatible or not with those
of the new sovereign, are automatically abrogated, unless they are expressly re-enacted by
affirmative act of the new sovereign.

cannot be considered as subordinate civil service officers or employees subject to the

disciplinary authority of the Commissioner of Civil Service; for, certainly. the Commissioner
is not the head of the Judicial Department to which they belong. The Revised Administrative
Code (Section 89) and the Civil Service Law itself state thru the Chief Justice is the
department head of the Supreme Court (Sec. 20, R.A. No. 2260 [1959]); and under
the 1973 Constitution, the Judiciary is the only other or second branch of the government
(Sec. 1, Art. X, 1973 Constitution). Besides, a violation of Section 12, Rule XVIII cannot be
considered as a ground for disciplinary action against judges because to recognize the
same as applicable to them, would be adding another ground for the discipline of judges
and, as aforestated, Section 67 of the Judiciary Act recognizes only two grounds for their
removal, namely, serious misconduct and inefficiency.

6. CRIMINAL LAW; ANTI-GRAFT AND CORRUPT PRACTICES ACT;

PROHIBITED PECUNIARY INTEREST UNDER PARAGRAPH H OF SECTION 3
THEREOF REFERS TO ONE HERE THE PUBLIC OFFICER INTERVENES OR TAKES
PART IN HIS OFFICIAL CAPACITY. Respondent Judge can not be held liable under
paragraph 4 Section 3 of the Anti-Graft and Corrupt Practices Act because there is- no
showing that respondent participated or intervened in his official capacity in the business or
transactions of the Traders Manufacturing And Fishing Industries, Inc. In the case at bar,
the business of the corporation in which respondent participated has obviously no relation
or connection with his official office. The business of said corporation is not that kind where
respondent intervenes or takes part in his capacity as Judge of the Court of First Instance.
As was held in one case involving the application of Article 216 of the Revised Penal Code
which has a similar prohibition on public officers against directly or indirectly becoming
interested in any contract or business in which it is his official duty to intervene, "It is not
enough to be a public official to be subject to this crime; it is necessary that by reason of his
office, he has to intervene in said contracts or transactions; and hence, the official who
intervenes in contracts or transactions which have no relation to his office can not commit
this crime" (People vs. Meneses, C.A. 40 C.G. 11th Supp. 134; Revised Penal Code, p.
1174, Vol 11(1976).

9. ID.; ID.; JUDGES; ENGAGING IN PRIVATE BUSINESS, IMPROPER UNDER

THE CANONS. Although the actuation of respondent Judge in engaging in private
business by joining the Traders Manufacturing and Fishing Industries, Inc. as a stockholder
and a ranking officer, is not violative of the provisions of Article 14 of the Code of
Commerce and Section 3 (h) of the Anti-Graft and Corrupt Practices Act as well as Section
12, Rule XVIII of the Civil Service Rules promulgated pursuant to the Civil Service Act of
1959, the impropriety of the same is clearly unquestionable because Canon 25 of the
Canons of Judicial Ethics expressly declares that: "A judge should abstain from making
personal investments in enterprises which are apt to be involved in litigation in his court;
and, after his accession to the bench, he should not retain such investments previously
made, longer than a period sufficient to enable him to dispose of them without serious loss
The disposal or sale by respondent and his wife of their shares in the corporation only 22
days after the incorporation of the corporation, indicates that ' respondent realized that early
that their interest in the corporation contravenes the aforesaid Canon 25. Respondent
Judge and his wife therefore deserve commendation for their immediate withdrawal from
the firm after its incorporation and before it became involved in any court litigation.

7. JUDICIAL ETHICS; JUDGES NOT PROHIBITED FROM ENGAGING IN

LAWFUL BUSINESS. There is no provision in both the 1935 and 1973 Constitutions of
the Philippines, nor is there an existing law expressly prohibiting members of the Judiciary
from engaging or having interest in any lawful business. It may be pointed out that Republic
Act No. 296, as amended, also known as the Judiciary Act of 1948, does not contain any
prohibition to that effect. As a matter of fact, under Section 77 of said law, municipal judges
may engage in teaching or other vocation not involving the practice of the law after office
hours but with the permission of the district judge concerned. Likewise, Article 14 of the
Code of Commerce which prohibits judges from engaging in commerce is, as heretofore
stated, deemed abrogated automatically upon the transfer of sovereignty from Spain to
America, because it is political in nature.

DECISION
MAKASIAR, J p:
In a verified complaint dated August 6, 1968 Bernardita R. Macariola
charged respondent Judge Elias B. Asuncion of the Court of First Instance of Leyte,
now Associate Justice of the Court of Appeals, with "acts unbecoming a judge."

8. ID.; ID.; CIVIL SERVICE ACT AND RULES PROMULGATED THEREUNDER

NOT APPLICABLE TO MEMBERS OF THE JUDICIARY. On the contention of
complainant that respondent Judge violated Section 12, Rule XVIII of the Civil Service
Rules, We hold that the Civil Service Act of 1959 (R.A. No. 2260) and the Civil Service
Rules promulgated thereunder, particularly Section 12 of Rule XVIII, do not apply to the
members of the Judiciary. It must be emphasized at the outset that respondent, being a
member of the Judiciary, 45 covered by Republic Act No. 296, as amended, otherwise
known as the Judiciary Act of 1948 and by Section 7, Article X, 1973 Constitution. Judges

The factual setting of the case is stated in the report dated May 27, 1971
of then Associate Justice Cecilia Muoz Palma of the Court of Appeals now retired
Associate Justice of the Supreme Court, to whom this case was referred on
October 28, 1968 for investigation, thus: llcd

"Civil Case No. 3010 of the Court of First Instance of

Leyte was a complaint for partition filed by Sinforosa R. Bales,
Luz R. Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela
Reyes, and Priscilla Reyes, plaintiffs, against Bernardita R.
Macariola, defendant, concerning the properties left by the
deceased Francisco Reyes, the common father of the plaintiff and
defendant.

Reyes Diaz; (6) Declaring the defendant Bernardita R. Macariola,

being the only legal and forced heir of her mother Felisa Espiras,
as the exclusive owner of one-half of each of Lots Nos. 4474,
4475, 4892, 5265, 4803, 4581, 4506; and the remaining one-half
(1/2) of each of said Lots Nos. 4474, 4475, 4892, 5265, 4803,
4581, 4506 and one-half (1/2) of one-fourth (1/4) of Lot No. 1154
as belonging to the estate of Francisco Reyes Diaz; (7) Declaring
Irene Ondez to be the exclusive owner of one-half (1/2) of Lot No.
2304 and one-half (1/2) of one-fourth (1/4) of Lot No. 3416; the
remaining one-half (1/2) of Lot 2304 and the remaining one-half
(1/2) of one fourth (1/4) of Lot No. 3416 as belonging to the estate
of Francisco Reyes Diaz; (8) Directing the division or partition of
the estate of Francisco Reyes Diaz in such a manner as to give or
grant to Irene Ondez, as surviving widow of Francisco Reyes
Diaz, a hereditary share of one-twelfth (1/12) of the whole estate
of Francisco Reyes Diaz (Art. 996 in relation to Art. 892, par 2,
New Civil Code), and the remaining portion of the estate to be
divided among the plaintiffs Sinforosa R. Bales, Luz R.
Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes,
Priscilla Reyes and defendant Bernardita R. Macariola, in such a
way that the extent of the total share of plaintiff Sinforosa R. Bales
in the hereditary estate shall not exceed the equivalent of two-fifth
(2/5) of the total share of any or each of the other plaintiffs and
the defendant (Art. 983, New Civil Code), each of the latter to
receive equal shares from the hereditary estate, (Ramirez vs.
Bautista, 14 Phil. 528; Diancin vs. Bishop of Jaro, O.G. [3rd Ed.]
p. 33); (9) Directing the parties, within thirty days after this
judgment shall have become final to submit to this court, for
approval, a project of partition of the hereditary estate in the
proportion above indicated, and in such manner as the parties
may, by agreement, deemed convenient and equitable to them
taking into consideration the location, kind, quality, nature and
value of the properties involved; (10) Directing the plaintiff
Sinforosa R. Bales and defendant Bernardita R. Macariola to pay
the costs of this suit, in the proportion of one-third (1/3) by the first
named and two-thirds (2/3) by the second named; and (11)
Dismissing all other claims of the parties [pp. 27-29 of Exh. C].

"In her defenses to the complaint for partition, Mrs.

Macariola alleged among other things that: a) plaintiff Sinforosa
R. Bales was not a daughter of the deceased Francisco Reyes; b)
the only legal heirs of the deceased were defendant Macariola,
she being the only offspring of the first marriage of Francisco
Reyes with Felisa Espiras, and the remaining plaintiffs who were
the children of the deceased by his second marriage with Irene
Ondes; c) the properties left by the deceased were all the
conjugal properties of the latter and his first wife, Felisa Espiras,
and no properties were acquired by the deceased during his
second marriage; d) if there was any partition to be made, those
conjugal properties should first be partitioned into two parts, and
one part is to be adjudicated solely to defendant it being the
share of the latter's deceased mother, Felisa Espiras, and the
other half which is the share of the deceased Francisco Reyes
was to be divided equally among his children by his two
marriages.
"On June 8, 1963, a decision was rendered by
respondent Judge Asuncion in Civil Case 3010, the dispositive
portion of which reads:
"'IN VIEW OF THE FOREGOING CONSIDERATIONS,
the Court, upon a preponderance of evidence, finds and so holds,
and hereby renders judgment (1) Declaring the plaintiffs Luz R.
Bakunawa, Anacorita Reyes, Ruperto Reyes, Adela Reyes and
Priscilla Reyes as the only children legitimated by the subsequent
marriage of Francisco Reyes Diaz to Irene Ondez; (2) Declaring
the plaintiff Sinforosa R. Bales to have been an illegitimate child
of Francisco Reyes Diaz; (3) Declaring Lots Nos. 4474, 4475,
4892, 5265, 4803, 4581, 4506 and 1/4 of Lot 1145 as belonging
to the conjugal partnership of the spouses Francisco Reyes Diaz
and Felisa Espiras; (4) Declaring Lot No. 2304 and 1/4 of Lot No.
3416 as belonging to the spouses Francisco Reyes Diaz and
Irene Ondez in common partnership; (5) Declaring that 1/2 of Lot
No. 1184 as belonging exclusively to the deceased Francisco

"The decision in civil case 3010 became final for lack of

an appeal, and on October 16, 1963, a project of partition was
submitted to Judge Asuncion which is marked Exh. A.
Notwithstanding the fact that the project of partition was not
signed by the parties themselves but only by the respective
counsel of plaintiffs and defendant, Judge Asuncion approved it in

his Order dated October 23, 1963, which for convenience is

quoted hereunder in full:

(SGD) BONIFACIO RAMO

Atty. for the
Defendant
Tacloban City

'The parties, through their respective counsels,

presented to this Court for approval the following project of
partition: LLjur

'(SGD) ZOTICO A. TOLETE

Atty. for the Plaintiff
Tacloban City

'COMES NOW, the plaintiffs and the defendant in the

above-entitled case, to this Honorable Court respectfully submit
the following Project of Partition:

'While the Court thought it more desirable for all the

parties to have signed this Project of Partition, nevertheless, upon
assurance of both counsels of the respective parties to this Court
that the Project of Partition, as above-quoted, had been made
after a conference and agreement of the plaintiffs and the
defendant approving the above Project of Partition, and that both
lawyers had represented to the Court that they are given full
authority to sign by themselves the Project of Partition, the Court,
therefore, finding the above-quoted project of Partition to be in
accordance with law, hereby approves the same. The parties,
therefore, are directed to execute such papers, documents or
instrument sufficient in form and substance for the vesting of the
rights, interests and participations which were adjudicated to the
respective parties, as outlined in the Project of Partition and the
delivery of the respective properties adjudicated to each one in
view of said Project of Partition, and to perform such other acts as
are legal and necessary to effectuate the said Project of Partition.

'1. The whole of Lots Nos. 1154, 2304 and 4506 shall
belong exclusively to Bernardita Reyes Macariola;
'2. A portion of Lot No. 3416 consisting of 2,373.49
square meters along the eastern part of the lot shall be awarded
likewise to Bernardita R. Macariola;
'3. Lots Nos. 4803, 4892 and 5265 shall be awarded to
Sinforosa Reyes Bales;
'4. A portion of Lot No. 3416 consisting of 1,834.55
square meters along the western part of the lot shall likewise be
awarded to Sinforosa Reyes-Bales;
'5. Lots Nos. 4474 and 4475 shall be divided equally
among Luz Reyes Bakunawa, Anacorita Reyes, Ruperto Reyes,
Adela Reyes and Priscilla Reyes in equal shares;

'SO ORDERED.
'Given in Tacloban City, this 23rd day of October, 1963.

'6. Lot No. 1184 and the remaining portion of Lot No.
3416 after taking the portions awarded under item (2) and (4)
above shall be awarded to Luz Reyes Bakunawa, Anacorita
Reyes, Ruperto Reyes, Adela Reyes and Priscilla Reyes in equal
shares, provided, however that the remaining portion of Lot No.
3416 shall belong exclusively to Priscilla Reyes.

'(SGD) ELIAS B. ASUNCION

Judge'
"EXH. B.
"The above Order of October 23, 1963, was amended
on November 11, 1963, only for the purpose of giving authority to
the Register of Deeds of the Province of Leyte to issue the
corresponding transfer certificates of title to the respective
adjudicatees in conformity with the project of partition (see Exh.
U).

'WHEREFORE, it is respectfully prayed that the Project

of Partition indicated above which is made in accordance with the
decision of the Honorable Court be approved.
'Tacloban City, October 16, 1963.

"One of the properties mentioned in the project of

partition was Lot 1184 or rather one-half thereof with an area of
15,162.5 sq. meters. This lot, which according to the decision was
the exclusive property of the deceased Francisco Reyes, was
adjudicated in said project of partition to the plaintiffs Luz,
Anacorita, Ruperto, Adela, and Priscilla all surnamed Reyes in
equal shares, and when the project of partition was approved by
the trial court the adjudicatees caused Lot 1184 to be subdivided
into five lots denominated as Lot 1184-A to 1184-E inclusive (Exh.
V).

properties involved in Civil Case No. 3010 decided by him; [2] that he likewise
violated Article 14, paragraphs 1 and 5 of the Code of Commerce, Section 3,
paragraph H, of R.A. 3019, otherwise known as the Anti-Graft and Corrupt
Practices Act, Section 12, Rule XVIII of the Civil Service Rules, and Canon 25 of
the Canons of Judicial Ethics, by associating himself with the Traders
Manufacturing and Fishing Industries, Inc., as a stockholder and a ranking officer
while he was a judge of the Court of First Instance of Leyte; [3] that respondent was
guilty of coddling an impostor and acted in disregard of judicial decorum by closely
fraternizing with a certain Dominador Arigpa Tan who openly and publicly
advertised himself as a practising attorney when in truth and in fact his name does
not appear in the Rolls of Attorneys and is not a member of the Philippine Bar; and
[4] that there was a culpable defiance of the law and utter disregard for ethics by
respondent Judge (pp. 1-7, rec.).

"Lot 1184-D was conveyed to Enriqueta D. Anota, a

stenographer in Judge Asuncion's court (Exhs. F, F-1 and V-1),
while Lot 1184-E which had an area of 2,172.5556 sq. meters
was sold on July 31, 1964 to Dr. Arcadio Galapon (Exh. 2) who
was issued transfer certificate of title No. 2338 of the Register of
Deeds of the city of Tacloban (Exh. 12).

Respondent Judge Asuncion filed on September 24, 1968 his answer to

which a reply was filed on October 16, 1968 by herein complainant. In Our
resolution of October 28, 1968, We referred this case to then Justice Cecilia Muoz
Palma of the Court of Appeals, for investigation, report and recommendation. After
hearing, the said Investigating Justice submitted her report dated May 27, 1971
recommending that respondent Judge should be reprimanded or warned in
connection with the first cause of action alleged in the complaint, and for the
second cause of action, respondent should be warned in case of a finding that he is
prohibited under the law to engage in business. On the third and fourth causes of
action, Justice Palma recommended that respondent Judge be exonerated. LLpr

"On March 6, 1965, Dr. Arcadio Galapon and his wife

sold a portion of Lot 1184-E with an area of around 1,306 sq.
meters to Judge Asuncion and his wife, Victoria S. Asuncion
(Exh. 11), which particular portion was declared by the latter for
taxation purposes (Exh. F).

The records also reveal that on or about November 9 or 11, 1968 (pp.
481, 477, rec.), complainant herein instituted an action before the Court of First
Instance of Leyte, entitled "Bernardita R. Macariola, plaintiff, versus Sinforosa R.
Bales, et al., defendants," which was docketed as Civil Case No. 4235, seeking the
annulment of the project of partition made pursuant to the decision in Civil Case
No. 3010 and the two orders issued by respondent Judge approving the same, as
well as the partition of the estate and the subsequent conveyances with damages. It
appears, however, that some defendants were dropped from the civil case. For one,
the case against Dr. Arcadio Galapon was dismissed because he was no longer a
real party in interest when Civil Case No. 4234 was filed, having already conveyed
on March 6, 1965 a portion of lot 1184-E to respondent Judge and on August 31,
1966 the remainder was sold to the Traders Manufacturing and Fishing Industries,
Inc. Similarly, the case against defendant Victoria Asuncion was dismissed on the
ground that she was no longer a real party in interest at the time the aforesaid Civil
Case No. 4234 was filed as the portion of Lot 1184 acquired by her and respondent
Judge from Dr. Arcadio Galapon was already sold on August 31, 1966 to the
Traders Manufacturing and Fishing Industries, Inc. Likewise, the cases against
defendants Serafin P. Ramento, Catalina Cabus, Ben Barraza Go, Jesus Perez,
Traders Manufacturing and Fishing Industries, Inc., Alfredo R. Celestial and Pilar P.

"On August 31, 1966, spouses Asuncion and spouses

Galapon conveyed their respective shares and interest in Lot
1184-E to 'The Traders Manufacturing and Fishing Industries Inc.'
(Exh. 15 & 16). At the time of said sale the stockholders of the
corporation were Dominador Arigpa Tan, Humilia Jalandoni Tan,
Jaime Arigpa Tan, Judge Asuncion, and the latter's wife, Victoria
S. Asuncion, with Judge Asuncion as the President and Mrs.
Asuncion as the secretary (Exhs. E-4 to E-7). The Articles of
Incorporation of 'The Traders Manufacturing and Fishing
Industries, Inc.' which we shall henceforth refer to as 'TRADERS'
were registered with the Securities and Exchange Commission
only on January 9, 1967 (Exh. E)" [pp. 378-385, rec.].
Complainant Bernardita R. Macariola filed on August 9, 1968 the instant
complaint dated August 6, 1968 alleging four causes of action, to wit: [1] that
respondent Judge Asuncion violated Article 1491, paragraph 5, of the New Civil
Code in acquiring by purchase a portion of Lot No. 1184-E which was one of those

Celestial, Leopoldo Petilla and Remedios Petilla, Salvador Anota and Enriqueta
Anota and Atty. Zotico A. Tolete were dismissed with the conformity of complainant
herein, plaintiff therein, and her counsel.

"(2) Directing the plaintiff to pay the defendants

Mariquita Villasin and the heirs of Gerardo Villasin the cost of the
suit.

On November 2, 1970, Judge Jose D. Nepomuceno of the Court of First

Instance of Leyte, who was directed and authorized on June 2, 1969 by the then
Secretary (now Minister) of Justice and now Minister of National Defense Juan
Ponce Enrile to hear and decide Civil Case No. 4234, rendered a decision, the
dispositive portion of which reads as follows:

"C. IN THE CASE AGAINST THE DEFENDANT

SINFOROSA R. BALES, ET AL., WHO WERE PLAINTIFFS IN
CIVIL CASE NO. 3010
"(1) Dismissing the complaint against defendants
Sinforosa R. Bales, Adela R. Herrer, Priscilla R. Solis, Luz R.
Bakunawa, Anacorita R. Eng and Ruperto O. Reyes.

"A. IN THE CASE AGAINST JUDGE ELIAS B.

ASUNCION
"(1) declaring that only Branch IV of the Court of First
Instance of Leyte has jurisdiction to take cognizance of the issue
of the legality and validity of the Project of Partition [Exhibit "B"]
and the two Orders [Exhibits 'C' and 'C-3'] approving the partition;

RAMO

"D. IN THE CASE AGAINST DEFENDANT BONIFACIO

"(1) Dismissing the complaint against Bonifacio Ramo;

"(2) Directing the plaintiff to pay the defendant Bonifacio
Ramo the cost of the suit.

"(2) dismissing the complaint against Judge Elias B.

Asuncion;

"SO ORDERED" [pp. 531-533, rec.].

"(3) adjudging the plaintiff, Mrs. Bernardita R. Macariola

to pay defendant Judge Elias B. Asuncion,

It is further disclosed by the record that the aforesaid decision was

elevated to the Court of Appeals upon perfection of the appeal on February 22,
1971.

"(a) the sum of FOUR HUNDRED THOUSAND PESOS

[P400,000.00] for moral damages;

"(b) the sum of TWO HUNDRED THOUSAND PESOS

[P200,000.00] for exemplary damages;

WE find that there is no merit in the contention of complainant Bernardita

R. Macariola, under her first cause of action, that respondent Judge Elias B.
Asuncion violated Article 1491, paragraph 5, of the New Civil Code in acquiring by
purchase a portion of Lot No. 1184-E which was one of those properties involved in
Civil Case No. 3010.

"(c) the sum of FIFTY THOUSAND PESOS

[P50,000.00] for nominal damages; and
"(d) the sum of TEN THOUSAND PESOS [P10,000.00]
for Attorney's Fees.

That Article provides:

"B. IN THE CASE AGAINST THE DEFENDANT

MARIQUITA VILLASIN, FOR HERSELF AND FOR THE HEIRS
OF THE DECEASED GERARDO VILLASIN

"Article 1491. The following persons cannot acquire by

purchase, even at a public or judicial action, either in person or
through the mediation of another:

"(1) Dismissing the complaint against the defendants

Mariquita Villasin and the heirs of the deceased Gerardo Villasin;

xxx xxx xxx

"(5) Justices, judges, prosecuting attorneys, clerks of

superior and inferior courts, and other officers and employees
connected with the administration of justice, the property and
rights in litigation or levied upon an execution before the court
within whose jurisdiction or territory they exercise their respective
functions; this prohibition includes the act of acquiring by
assignment and shall apply to lawyers, with respect to the
property and rights which may be the object of any litigation in
which they may take part by virtue of their profession" [italics
supplied].

and his wife was the secretary, took place long after the finality of the decision in
Civil Case No. 3010 and of the subsequent two aforesaid orders therein approving
the project of partition. LLphil
While it appears that complainant herein filed on or about November 9 or
11, 1968 an action before the Court of First Instance of Leyte docketed as Civil
Case No. 4234, seeking to annul the project of partition and the two orders
approving the same, as well as the partition of the estate and the subsequent
conveyances, the same, however, is of no moment.
The fact remains that respondent Judge purchased on March 6, 1965 a
portion of Lot 1184-E from Dr. Arcadio Galapon; hence, after the finality of the
decision which he rendered on June 8, 1963 in Civil Case No. 3010 and his two
questioned orders dated October 23, 1963 and November 11, 1963. Therefore, the
property was no longer subject of litigation.

The prohibition in the aforesaid Article applies only to the sale or

assignment of the property which is the subject of litigation to the persons
disqualified therein. WE have already ruled that ". . . for the prohibition to operate,
the sale or assignment of the property must take place during the pendency of the
litigation involving the property" (The Director of Lands vs. Ababa, et al., 88 SCRA
513, 519 [1979]; Rosario vda. de Laig vs. Court of Appeals, 86 SCRA 641, 646
[1978]).

The subsequent filing on November 9, or 11, 1968 of Civil Case No. 4234
can no longer alter, change or affect the aforesaid facts that the questioned sale
to respondent Judge, now Court of Appeals Justice, was effected and
consummated long after the finality of the aforesaid decision or orders.

In the case at bar, when the respondent Judge purchased on March 6,

1965 a portion of Lot 1184-E, the decision in Civil Case No. 3010 which he
rendered on June 8, 1963 was already final because none of the parties therein
filed an appeal within the reglementary period; hence, the lot in question was no
longer subject of the litigation. Moreover, at the time of the sale on March 6, 1965,
respondent's order dated October 23, 1963 and the amended order
datedNovember 11, 1963 approving the October 16, 1963 project of partition made
pursuant to the June 8, 1963 decision, had long become final for there was no
appeal from said orders.

Consequently, the sale of a portion of Lot 1184-E to respondent Judge

having taken place over one year after the finality of the decision in Civil Case No.
3010 as well as the two orders approving the project of partition, and not during the
pendency of the litigation, there was no violation of paragraph 5, Article 1491 of the
New Civil Code.
It is also argued by complainant herein that the sale on July 31, 1964 of
Lot 1184-E to Dr. Arcadio Galapon by Priscilla Reyes, Adela Reyes and Luz R.
Bakunawa was only a mere scheme to conceal the illegal and unethical transfer of
said lot to respondent Judge as a consideration for the approval of the project of
partition. In this connection, We agree with the findings of the Investigating Justice
thus:

Furthermore, respondent Judge did not buy the lot in question on March
6, 1965 directly from the plaintiffs in Civil Case No. 3010 but from Dr. Arcadio
Galapon who earlier purchased on July 31, 1964 Lot 1184-E from three of the
plaintiffs, namely, Priscilla Reyes, Adela Reyes, and Luz R. Bakunawa after the
finality of the decision in Civil Case No. 3010. It may be recalled that Lot 1184 or
more specifically one-half thereof was adjudicated in equal shares to Priscilla
Reyes, Adela Reyes, Luz Bakunawa, Ruperto Reyes and Anacorita Reyes in the
project of partition, and the same was subdivided into five lots denominated as Lot
1184-A to 1184-E. As aforestated, Lot 1184-E was sold on July 31, 1964 to Dr.
Galapon for which he was issued TCT No. 2338 by the Register of Deeds of
Tacloban City, and on March 6, 1965 he sold a portion of said lot to respondent
Judge and his wife who declared the same for taxation purposes only. The
subsequent sale on August 31, 1966 by spouses Asuncion and spouses Galapon
of their respective shares and interest in said Lot 1184-E to the Traders
Manufacturing and Fishing Industries, Inc., in which respondent was the president

"And so we are now confronted with this all-important

question whether or not the acquisition by respondent of a portion
of Lot 1184-E and the subsequent transfer of the whole lot to
'TRADERS' of which respondent was the President and his wife
the Secretary, was intimately related to the Order of respondent
approving the project of partition, Exh. A.
"Respondent vehemently denies any interest or
participation in the transactions between the Reyeses and the

Galapons concerning Lot 1184-E, and he insists that there is no

evidence whatsoever to show that Dr. Galapon had acted, in the
purchase of Lot 1184-E, in mediation for him and his wife. (See p.
14 of Respondent's Memorandum).

approving the project of partition was duly entered and registered

on November 26, 1963 (Exh. 9-D);
"2) Exh. 7 Certified copy of a deed of absolute sale
executed by Bernardita Reyes Macariola on October 22, 1963,
conveying to Dr. Hector Decena the one-fourth share of the late
Francisco Reyes-Diaz in Lot 1154. In this deed of sale the vendee
stated that she was the absolute owner of said one-fourth share,
the same having been adjudicated to her as her share in the
estate of her father Francisco Reyes Diaz as per decision of the
Court of First Instance of Leyte under case No. 3010 (Exh. 7-A).
The deed of sale was duly registered and annotated at the back
of OCT 19520 on December 3, 1963 (see Exh. 9-e).

xxx xxx xxx

"On this point, I agree with respondent that there is no
evidence in the record showing that Dr. Arcadio Galapon acted as
a mere 'dummy' of respondent in acquiring Lot 1184-E from the
Reyeses. Dr. Galapon appeared to this investigator as a
respectable citizen, credible and sincere, and I believe him when
he testified that he bought Lot 1184-E in good faith and for
valuable consideration from the Reyeses without any intervention
of, or previous understanding with Judge Asuncion" (pp. 391-394,
rec.).

"In connection with the abovementioned documents it is

to be noted that in the project of partition dated October 16, 1963,
which was approved by respondent on October 23, 1963,
followed by an amending Order on November 11, 1963, Lot 1154
or rather 1/4 thereof was adjudicated to Mrs. Macariola. It is this
1/4 share in Lot 1154 which complainant sold to Dr. Decena
on October 22, 1963, several days after the preparation of the
project of partition.

On the contention of complainant herein that respondent Judge acted

illegally in approving the project of partition although it was not signed by the
parties, We quote with approval the findings of the Investigating Justice, as follows:
"1. I agree with complainant that respondent should
have required the signature of the parties more particularly that of
Mrs. Macariola on the project of partition submitted to him for
approval; however, whatever error was committed by respondent
in that respect was done in good faith as according to Judge
Asuncion he was assured by Atty. Bonifacio Ramo, the counsel of
record of Mrs. Macariola, that he was authorized by his client to
submit said project of partition, (See Exh. B and tsn. p. 24,
January 20, 1969). While it is true that such written authority if
there was any, was not presented by respondent in evidence, nor
did Atty. Ramo appear to corroborate the statement of
respondent, his affidavit being the only one that was presented as
respondent's Exh. 10, certain actuations of Mrs. Macariola lead
this investigator to believe that she knew the contents of the
project of partition, Exh. A, and that she gave her conformity
thereto. I refer to the following documents:

"Counsel for complainant stresses the view, however,

that the latter sold her one-fourth share in Lot 1154 by virtue of
the decision in Civil Case 3010 and not because of the project of
partition, Exh. A. Such contention is absurd because from the
decision, Exh. C, it is clear that one-half of one-fourth of Lot 1154
belonged to the estate of Francisco Reyes Diaz while the other
half of said one-fourth was the share of complainant's mother,
Felisa Espiras; in other words, the decision did not adjudicate the
whole of the one-fourth of Lot 1154 to the herein complainant
(see Exhs. C-3 & C-4). Complainant became the owner of the
entire one fourth of Lot 1154 only by means of the project of
partition, Exh. A. Therefore, if Mrs. Macariola sold Lot 1154 on
October 22, 1963, it was for no other reason than that she was
well aware of the distribution of the properties of her deceased
father as per Exhs. A and B. It is also significant at this point to
state that Mrs. Macariola admitted during the cross-examination
that she went to Tacloban City in connection with the sale of Lot
1154 to Dr. Decena (tsn. p. 92, November 28, 1968) from which
we can deduce that she could not have been kept ignorant of the
proceedings in civil case 3010 relative to the project of partition.

"1) Exh. 9 Certified true copy of OCT No. 19520

covering Lot 1154 of the Tacloban Cadastral Survey in which the
deceased Francisco Reyes holds a '1/4 share' (Exh. 9-a). On this
certificate of title the Order dated November 11, 1963, (Exh. U)

"Complainant also assails the project of partition

because according to her the properties adjudicated to her were
insignificant lots and the least valuable. Complainant, however,
did not present any direct and positive evidence to prove the
alleged gross inequalities in the choice and distribution of the real
properties when she could have easily done so by presenting
evidence on the area, location, kind, the assessed and market
value of said properties. Without such evidence there is nothing in
the record to show that there were inequalities in the distribution
of the properties of complainant's father" (pp. 386-389, rec.).

Industries, Inc. as a stockholder and a ranking officer, said corporation having been
organized to engage in business. Said Article provides that:

"Article 14 The following cannot engage in

commerce, either in person or by proxy, nor can they hold any
office or have any direct, administrative, or financial intervention in
commercial or industrial companies within the limits of the
districts, provinces, or towns in which they discharge their duties:

Finally, while it is true that respondent Judge did not violate paragraph 5,
Article 1491 of the New Civil Code in acquiring by purchase a portion of Lot 1184-E
which was in litigation in his court, it was, however, improper for him to have
acquired the same. He should be reminded of Canon 3 of the Canons of Judicial
Ethics which requires that: "A judge's official conduct should be free from the
appearance of impropriety, and his personal behavior, not only upon the bench and
in the performance of judicial duties, but also in his everyday life, should be beyond
reproach." And as aptly observed by the Investigating Justice: ". . . it was unwise
and indiscreet on the part of respondent to have purchased or acquired a portion of
a piece of property that was or had been in litigation in his court and caused it to be
transferred to a corporation of which he and his wife were ranking officers at the
time of such transfer. One who occupies an exalted position in the judiciary has the
duty and responsibility of maintaining the faith and trust of the citizenry in the courts
of justice, so that not only must he be truly honest and just, but his actuations must
be such as not give cause for doubt and mistrust in the uprightness of his
administration of justice. In this particular case of respondent, he cannot deny that
the transactions over Lot 1184-E are damaging and render his actuations open to
suspicion and distrust. Even if respondent honestly believed that Lot 1184-E was no
longer in litigation in his court and that he was purchasing it from a third person and
not from the parties to the litigation, he should nonetheless have refrained from
buying it for himself and transferring it to a corporation in which he and his wife
were financially involved, to avoid possible suspicion that his acquisition was related
in one way or another to his official actuations in civil case 3010. The conduct of
respondent gave cause for the litigants in civil case 3010, the lawyers practising in
his court, and the public in general to doubt the honesty and fairness of his
actuations and the integrity of our courts of justice" (pp. 395-396, rec.). LexLib

"1. Justices of the Supreme Court, judges and officials

of the department of public prosecution in active service. This
provision shall not be applicable to mayors, municipal judges, and
municipal prosecuting attorneys nor to those who by chance are
temporarily discharging the functions of judge or prosecuting
attorney.
xxx xxx xxx
"5. Those who by virtue of laws or special provisions
may not engage in commerce in a determinate territory."
It is Our considered view that although the aforestated provision is
incorporated in the Code of Commerce which is part of the commercial laws of the
Philippines, it, however, partakes of the nature of a political law as it regulates the
relationship between the government and certain public officers and employees,
like justices and judges.

II

Political Law has been defined as that branch of public law which deals
with the organization and operation of the governmental organs of the State and
define the relations of the state with the inhabitants of its territory (People vs.
Perfecto, 43 Phil. 887, 897 [1922]). It may be recalled that political law embraces
constitutional law, law of public corporations, administrative law including the law on
public officers and elections. Specifically, Article 14 of the Code of Commerce
partakes more of the nature of an administrative law because it regulates the
conduct of certain public officers and employees with respect to engaging in
business; hence, political in essence.

With respect to the second cause of action, the complainant alleged that
respondent Judge violated paragraphs 1 and 5, Article 14 of the Code of
Commerce when he associated himself with the Traders Manufacturing and Fishing

It is significant to note that the present Code of Commerce is the Spanish

Code of Commerce of 1885, with some modifications made by the "Comision de
Codificacion de las Provincias de Ultramar," which was extended to the Philippines

by the Royal Decree of August 6, 1888, and took effect as law in this jurisdiction on
December 1, 1888.

Likewise, in People vs. Perfecto (43 Phil. 887, 897 [1922]), this Court
stated that: "It is a general principle of the public law that on acquisition of territory
the previous political relations of the ceded region are totally abrogated."

Upon the transfer of sovereignty from Spain to the United States and later
on from the United States to the Republic of the Philippines, Article 14 of this Code
of Commerce must be deemed to have been abrogated because where there is
change of sovereignty, the political laws of the former sovereign, whether
compatible or not with those of the new sovereign, are automatically abrogated,
unless they are expressly re-enacted by affirmative act of the new sovereign.

There appears no enabling or affirmative act that continued the effectivity

of the aforestated provision of the Code of Commerce after the change of
sovereignty from Spain to the United States and then to the Republic of the
Philippines. Consequently, Article 14 of the Code of Commerce has no legal and
binding effect and cannot apply to the respondent, then Judge of the Court of First
Instance, now Associate Justice of the Court of Appeals.

Thus, We held in Roa vs. Collector of Customs (23 Phil. 315, 330, 311
[1912]) that:

It is also argued by complainant herein that respondent Judge violated

paragraph H, Section 3 of Republic Act No. 3019, otherwise known as the AntiGraft and Corrupt Practices Act, which provides that:

"'By well-settled public law, upon the cession of territory

by one nation to another, either following a conquest or otherwise,
. . . those laws which are political in their nature and pertain to the
prerogatives of the former government immediately cease upon
the transfer of sovereignty.' (Opinion, Atty. Gen., July 10, 1899).

"Sec. 3. Corrupt practices of public officers. In

addition to acts or omissions of public officers already penalized
by existing law, the following shall constitute corrupt practices of
any public officer and are hereby declared to be unlawful:

"While municipal laws of the newly acquired territory

not in conflict with the laws of the new sovereign continue in force
without the express assent or affirmative act of the conqueror, the
political laws do not. (Halleck's Int. Law, chap. 34, par. 14).
However, such political laws of the prior sovereignty as are not in
conflict with the constitution or institutions of the new sovereign,
may be continued in force if the conqueror shall so declare by
affirmative act of the commander-in-chief during the war, or by
Congress in time of peace. (Ely's Administrator vs. United States,
171 U.S. 220, 43 L. Ed. 142). In the case of American and Ocean
Ins. Cos. vs. 356 Bales of Cotton (1 Pet. [26 U.S.] 511, 542, 7 L.
Ed. 242), Chief Justice Marshall said:

xxx xxx xxx

"(h) Directly or indirectly having financial or pecuniary
interest in any business, contract or transaction in connection with
which he intervenes or takes part in his official capacity, or in
which he is prohibited by the Constitution or by any law from
having any interest."
Respondent Judge cannot be held liable under the aforestated paragraph
because there is no showing that respondent participated or intervened in hisofficial
capacity in the business or transactions of the Traders Manufacturing and Fishing
Industries, Inc. In the case at bar, the business of the corporation in which
respondent participated has obviously no relation or connection with his judicial
office. The business of said corporation is not that kind where respondent
intervenes or takes part in his capacity as Judge of the Court of First Instance. As
was held in one case involving the application of Article 216 of the Revised Penal
Code which has a similar prohibition on public officers against directly or indirectly
becoming interested in any contract or business in which it is his official duty to
intervene, "(I)t is not enough to be a public official to be subject to this crime: it is
necessary that by reason of his office, he has to intervene in said contracts or
transactions; and, hence, the official who intervenes in contracts or transactions
which have no relation to his office cannot commit this crime" (People vs. Meneses,

'On such transfer (by cession) of territory, it has never

been held that the relations of the inhabitants with each other
undergo any change. Their relations with their former sovereign
are dissolved, and new relations are created between them and
the government which has acquired their territory. The same act
which transfers their country, transfers the allegiance of those
who remain in it; and the law which may be denominated political,
is necessarily changed, although that which regulates the
intercourse and general conduct of individuals, remains in force,
until altered by the newly-created power of the State.'"

10

C.A. 40 O.G. 11th Supp. 134, cited by Justice Ramon C. Aquino; Revised Penal
Code, p. 1174, Vol. II [1976]).

without a written permission from the head of department, the same, however, may
not fall within the purview of paragraph h, Section 3 of the Anti-Graft and Corrupt
Practices Act because the last portion of said paragraph speaks of a prohibition by
the Constitution or law on any public officer from having any interest in any
business and not by a mere administrative rule or regulation. Thus, a violation of
the aforesaid rule by any officer or employee in the civil service, that is, engaging in
private business without a written permission from the Department Head may not
constitute graft and corrupt practice as defined by law.

It does not appear also from the records that the aforesaid corporation
gained any undue advantage in its business operations by reason of respondent's
financial involvement in it, or that the corporation benefited in one way or another in
any case filed by or against it in court. It is undisputed that there was no case filed
in the different branches of the Court of First Instance of Leyte in which the
corporation was either party plaintiff or defendant except Civil Case No. 4234
entitled "Bernardita R. Macariola, plaintiff, versus Sinforosa O. Bales, et al.,"
wherein the complainant herein sought to recover Lot 1184-E from the aforesaid
corporation. It must be noted, however, that Civil Case No. 4234 was filed only on
November 9 or 11, 1968 and decided on November 2, 1970 by CFI Judge Jose D.
Nepomuceno when respondent Judge was no longer connected with the
corporation, having disposed of his interest therein on January 31, 1967. cdrep

On the contention of complainant that respondent Judge violated Section

12, Rule XVIII of the Civil Service Rules, We hold that the Civil Service Act of 1959
(R.A. No. 2260) and the Civil Service Rules promulgated thereunder, particularly
Section 12 of Rule XVIII, do not apply to the members of the Judiciary. Under said
Section 12: "No officer or employee shall engage directly in any private business,
vocation, or profession or be connected with any commercial, credit, agricultural or
industrial undertaking without a written permission from the Head of
Department . . ."

Furthermore, respondent is not liable under the same paragraph because

there is no provision in both the 1935 and 1973 Constitutions of the Philippines, nor
is there an existing law expressly prohibiting members of the Judiciary from
engaging or having interest in any lawful business.

It must be emphasized at the outset that respondent, being a member of

the Judiciary, is covered by Republic Act No. 296, as amended, otherwise known
as the Judiciary Act of 1948 and by Section 7, Article X, 1973 Constitution.

It may be pointed out that Republic Act No. 296, as amended, also
known as the Judiciary Act of 1948, does not contain any prohibition to that effect.
As a matter of fact, under Section 77 of said law, municipal judges may engage in
teaching or other vocation not involving the practice of law after office hours but
with the permission of the district judge concerned.

Under Section 67 of said law, the power to remove or dismiss judges was
then vested in the President of the Philippines, not in the Commissioner of Civil
Service, and only on two grounds, namely, serious misconduct and inefficiency, and
upon the recommendation of the Supreme Court, which alone is authorized, upon
its own motion, or upon information of the Secretary (now Minister) of Justice to
conduct the corresponding investigation. Clearly, the aforesaid section defines the
grounds and prescribes the special procedure for the discipline of judges.

Likewise, Article 14 of the Code of Commerce which prohibits judges

from engaging in commerce is, as heretofore stated, deemed abrogated
automatically upon the transfer of sovereignty from Spain to America, because it is
political in nature.

And under Sections 5, 6 and 7, Article X of the 1973 Constitution, only

the Supreme Court can discipline judges of inferior courts as well as other
personnel of the Judiciary. cdphil

Moreover, the prohibition in paragraph 5, Article 1491 of the New Civil

Code against the purchase by judges of a property in litigation before the court
within whose jurisdiction they perform their duties, cannot apply to respondent
Judge because the sale of the lot in question to him took place after the finality of
his decision in Civil Case No. 3010 as well as his two orders approving the project
of partition; hence, the property was no longer subject of litigation.

It is true that under Section 33 of the Civil Service Act of 1959: "The
Commissioner may, for . . . violation of the existing Civil Service Law and rules or of
reasonable office regulations, or in the interest of the service, remove any
subordinate officer or employee from the service, demote him in rank, suspend him
for not more than one year without pay or fine him in an amount not exceeding six
months' salary." Thus, a violation of Section 12 of Rule XVIII is a ground for
disciplinary action against civil service officers and employees.

In addition, although Section 12, Rule XVIII of the Civil Service Rules
made pursuant to the Civil Service Act of 1959 prohibits an officer or employee in
the civil service from engaging in any private business, vocation, or profession or
be connected with any commercial, credit, agricultural or industrial undertaking

11

However, judges cannot be considered as subordinate civil service

officers or employees subject to the disciplinary authority of the Commissioner of
Civil Service; for, certainly, the Commissioner is not the head of the Judicial
Department to which they belong. The Revised Administrative Code (Section 89)
and theCivil Service Law itself state that the Chief Justice is the department head of
the Supreme Court (Sec. 20, R.A. No. 2260) [1959]); and under the 1973
Constitution, the Judiciary is the only other or second branch of the government
(Sec. 1, Art. X, 1973 Constitution). Besides, a violation of Section 12, Rule XVIII
cannot be considered as a ground for disciplinary action against judges because to
recognize the same as applicable to them, would be adding another ground for the
discipline of judges and, as aforestated, Section 67 of the Judiciary Act recognizes
only two grounds for their removal, namely, serious misconduct and inefficiency.

possible, refrain from all relations which would normally tend to

arouse the suspicion that such relations warp or bias his
judgment, or prevent his impartial attitude of mind in the
administration of his judicial duties. . . ."
WE are not, however, unmindful of the fact that respondent Judge and his
wife had withdrawn on January 31, 1967 from the aforesaid corporation and sold
their respective shares to third parties, and it appears also that the aforesaid
corporation did not in anyway benefit in any case filed by or against it in court as
there was no case filed in the different branches of the Court of First Instance of
Leyte from the time of the drafting of the Articles of Incorporation of the corporation
on March 12, 1966, up to its incorporation on January 9, 1967, and the eventual
withdrawal of respondent on January 31, 1967 from said corporation. Such disposal
or sale by respondent and his wife of their shares in the corporation only 22 days
after the in corporation of the corporation, indicates that respondent realized that
early that their interest in the corporation contravenes the aforesaid Canon 25.
Respondent Judge and his wife therefore deserve the commendation for their
immediate withdrawal from the firm after its incorporation and before it became
involved in any court litigation.

Moreover, under Section 16(i) of the Civil Service Act of 1959, it is the
Commissioner of Civil Service who has original and exclusive jurisdiction "(T)o
decide, within one hundred twenty days, after submission to it, all administrative
cases against permanent officers and employees in the competitive service, and,
except as provided by law, to have final authority to pass upon their removal,
separation, and suspension and upon all matters relating to the conduct, discipline,
and efficiency of such officers and employees; and prescribe standards, guidelines
and regulations governing the administration of discipline" (emphasis supplied).
There is no question that a judge belong to the non-competitive or unclassified
service of the government as a Presidential appointee and is therefore not covered
by the aforesaid provision. WE have already ruled that ". . . in interpreting Section
16(i) of Republic Act No. 2260, we emphasized that only permanent officers and
employees who belong to the classified service come under the exclusive
jurisdiction of the Commissioner of Civil Service" (Villaluz vs. Zaldivar, 15 SCRA
710, 713 [1965], Ang-Angco vs. Castillo, 9 SCRA 619 [1963]).

III
With respect to the third and fourth causes of action, complainant alleged
that respondent was guilty of coddling an impostor and acted in disregard of judicial
decorum, and that there was culpable defiance of the law and utter disregard for
ethics. WE agree, however, with the recommendation of the Investigating Justice
that respondent Judge be exonerated because the aforesaid causes of action are
groundless, and WE quote the pertinent portion of her report which reads as
follows:

Although the actuation of respondent Judge in engaging in private

business by joining the Traders Manufacturing and Fishing Industries, Inc. as a
stockholder and a ranking officer, is not violative of the provisions of Article 14 of
the Code of Commerce and Section 3(h) of the Anti-Graft and Corrupt Practices
Act as well as Section 12, Rule XVIII of the Civil Service Rules promulgated
pursuant to the Civil Service Act of 1959, the impropriety of the same is clearly
unquestionable because Canon 25 of the Canons of Judicial Ethics expressly
declares that:

"The basis for complainant's third cause of action is the

claim that respondent associated and closely fraternized with
Dominador Arigpa Tan who openly and publicly advertised
himself as a practising attorney (see Exhs. I, I-1 and J) when in
truth and in fact said Dominador Arigpa Tan does not appear in
the Roll of Attorneys and is not a member of the Philippine Bar as
certified to in Exh. K.

"A judge should abstain from making personal

investments in enterprises which are apt to be involved in
litigation in his court; and, after his accession to the bench, he
should not retain such investments previously made, longer than
a period sufficient to enable him to dispose of them without
serious loss. It is desirable that he should, so far as reasonably

The "respondent denies knowing that Dominador

Arigpa Tan was an 'impostor' and claims that all the time he
believed that the latter was a bona fidemember of the bar. I see
no reason for disbelieving this assertion of respondent. It has
been shown by complainant that Dominador Arigpa Tan

12

represented himself publicly as an attorney-at-law to the extent of

putting up a signboard with his name and the words 'Attorney-atLaw' (Exh. I and I-1) to indicate his office, and it was but natural
for respondent and any person for that matter to have accepted
that statement on its face value.

||| (Macariola v. Asuncion, Adm. Case No. 133-J, [May 31, 1982], 199 PHIL 295-324)

"Now with respect to the allegation of complainant that

respondent is guilty of fraternizing with Dominador Arigpa Tan to
the extent of permitting his wife to be a godmother of Mr. Tan's
child at baptism (Exh. M & M-1), that fact even if true did not
render respondent guilty of violating any canon of judicial ethics
as long as his friendly relations with Dominador A. Tan and family
did not influence his official actuations as a judge where said
persons were concerned. There is no tangible convincing proof
that herein respondent gave any undue privileges in his court to
Dominador Arigpa Tan or that the latter benefitted in his practice
of law from his personal relations with respondent, or that he
used his influence, if he had any, on the Judges of the other
branches of the Court to favor said Dominador Tan.
"Of course it is highly desirable for a member of the
judiciary to refrain as much as possible from maintaining close
friendly relations with practising attorneys and litigants in his court
so as to avoid suspicion 'that his social or business relations or
friendship constitute an element in determining his judicial
course" (par. 30, Canons of Judicial Ethics), but if a Judge does
have social relations, that in itself would not constitute a ground
for disciplinary action unless it be clearly shown that his social
relations beclouded his official actuations with bias and partiality
in favor of his friends" (pp. 403-405, rec.).
In conclusion, while respondent Judge Asuncion, now Associate Justice
of the Court of Appeals, did not violate any law in acquiring by purchase a parcel of
land which was in litigation in his court and in engaging in business by joining a
private corporation during his incumbency as judge of the Court of First Instance of
Leyte, he should be reminded to be more discreet in his private and business
activities, because his conduct as a member of the Judiciary must not only be
characterized with propriety but must always be above suspicion. LibLex
WHEREFORE, THE RESPONDENT ASSOCIATE JUSTICE OF THE
COURT OF APPEALS IS HEREBY REMINDED TO BE MORE DISCREET IN HIS
PRIVATE AND BUSINESS ACTIVITIES.

13

As early as April 10, 1986, this Court* had already voted to dismiss the petitions for the reasons
to be stated below. On April 17, 1986, Atty. Lozano as counsel for the petitioners in G.R. Nos.
73748 and 73972 withdrew the petitions and manifested that they would pursue the question by
extra-judicial methods. The withdrawal is functus oficio.
The three petitions obviously are not impressed with merit. Petitioners have no personality to sue
and their petitions state no cause of action. For the legitimacy of the Aquino government is not a
justiciable matter. It belongs to the realm of politics where only the people of the Philippines are
the judge. And the people have made the judgment; they have accepted the government of
President Corazon C. Aquino which is in effective control of the entire country so that it is not
merely a de factogovernment but is in fact and law a de jure government. Moreover, the
community of nations has recognized the legitimacy of the present government. All the eleven
members of this Court, as reorganized, have sworn to uphold the fundamental law of the
Republic under her government.

II.

THE BACKGROUND OF THE PRESENT CONSTITUTION

In view of the foregoing, the petitions are hereby dismissed.

LAWYERS LEAGUE FOR A BETTER PHILIPPINES vs. AQUINO

Very truly yours,
(G.R. No. 73748 - May 22, 1986)
-----------------------(There is no "Full-Text" of this case. This is a Minute Resolution made by the SC.)

(Sgd.) GLORIA C. PARAS

Clerk of Court

Minute Resolutions

* The Court was then composed of Teehankee, C.J. and Abad Santos., Melencio-Herrera,
Plana, Escolin, Gutierrez, Jr., Cuevas, Alampay and Patajo, JJ.-----------------------------------------DIGEST

EN BANC

FACTS:
On February 25, 1986, President Corazon Aquino issued Proclamation No. 1 announcing that
she and Vice President Laurel were taking power.

[G.R. No. 73748, May 22, 1986]

LAWYERS LEAGUE FOR A BETTER PHILIPPINES AND/OR OLIVER A. LOZANO VS.
PRESIDENT CORAZON C. AQUINO, ET AL.

On March 25, 1986, proclamation No.3 was issued providing the basis of the Aquino government
assumption of power by stating that the "new government was installed through a direct exercise
of the power of the Filipino people assisted by units of the New Armed Forces of the
Philippines."

SIRS/MESDAMES:
Quoted hereunder, for your information, is a resolution of this Court MAY 22, 1986.

ISSUE:
Whether or not the government of Corazon Aquino is legitimate.

In G.R. No. 73748, Lawyers League for a Better Philippines vs. President Corazon C. Aquino, et
al.; G.R. No. 73972, People's Crusade for Supremacy of the Constitution vs. Mrs. Cory Aquino,
et al., and G.R. No. 73990, Councilor Clifton U. Ganay vs. Corazon C. Aquino, et al., the
legitimacy of the government of President Aquino is questioned. It is claimed that her
government is illegal because it was not established pursuant to the 1973 Constitution.

HELD:
Yes. The legitimacy of the Aquino government is not a justiciable matter but belongs to the realm
of politics where only the people are the judge.

14

The Court further held that:

or to bring this action (Tan vs. Macapagal, 43 SCRA 677). it is elementary that this Court
assumes no jurisdiction over petitions for declaratory relief. More importantly, the petition
amounts in effect to a suit against the incumbent Presidents of the Republic. President Corazon
C. Aquino, and it is equally elementary that incumbent Presidents are immune from suit or from
being brought to court during the period of their incumbency and tenure. The petition furthermore
states no cause of action. Petitioner's allegation of ambiguity or vagueness of the aforequoted
provision is manifestly gratuitous, it being a matter of public record and common public
knowledge that the Constitutional Commission refers therein to incumbent President Corazon C.
Aquino and Vice-President Salvador H. Laurel, and to no other persons, and provides for the
extension of their term to noon of June 30, 1992 for purpose of synchronization of elections.
Hence the second paragraph of the cited section provides for the holding on the second Monday
of May, 1992 of the first regular elections for the President and Vice-President under said
1986 Constitution.

The people have accepted the Aquino government which is in effective control of the entire
country;
It is not merely a de facto government but in fact and law a de jure government; and
The community of nations has recognized the legitimacy of the new government.

MELENCIO-HERRERA, J., concurring:

1. REMEDIAL LAW; DISMISSAL OF PETITION, PROPER IN CASE AT BAR; SUPREME
COURT HAS NO ORIGINAL JURISDICTION OVER PETITIONS FOR DECLARATORY RELIEF.
As to lack of cause of action, the petitioner's prayer for a declaration as to who were elected
President and Vice-President in the February 7, 1986 elections should be addressed not to this
court but to other departments of government constitutionally burdened with the task of making
that declaration. The 1935 Constitution, the 1973 Constitution an amended, and the 1986 Draft
Constitution uniformly provide that boards of canvassers in each province and city shall certify
who were elected President and Vice President in their respective areas. The certified returns
are transmitted to the legislature which proclaims, through the designated Presiding Head, who
were duly elected. Copies of the certified returns from the provincial and city boards of
canvassers have not been furnished this Court nor is there any need to do so. In the absence of
a legislature, we cannot assume the function of stating, and neither do we have any factual or
legal capacity to officially declare, who were elected President and Vice President in the
February 7, 1986 elections.
RESOLUTION

EN BANC
PER CURIAM p:

[G.R. No. 76180. October 24, 1986.]

In a petition for declaratory relief impleading no respondents, petitioner, as a lawyer, quotes the
first paragraph of Section 5 (not Section 7 as erroneously stated) of Article XVIII of the proposed
1986 Constitution, which provides in full as follows:

SATURNINO V. BERMUDEZ, petitioner.

SYLLABUS

"Sec. 5. The six-year term of the incumbent President and Vice-President

elected in the February 7, 1986 election is, for purposes of
synchronization of elections, hereby extended to noon of June 30, 1992."

1. REMEDIAL LAW; DISMISSAL OF PETITIONS; LACK OF JURISDICTION AND LACK OF

CAUSE OF ACTION, VALID GROUNDS. The petition is dismissed outright for lack of
jurisdiction and for lack of cause of action. Prescinding from petitioner's lack of personality to sue

15

"The first regular elections for the President and Vice-President under
thisConstitution shall be held on the second Monday of May, 1992."

Aquino, et al.]; G.R. No. 73972 [People's Crusade for Supremacy of

the Constitution etc. vs. Mrs. Cory Aquino, et al.]; and G.R. No. 73990
[Councilor Clifton U. Ganay vs. Corazon C. Aquino, et al.])

Claiming that the said provision "is not clear" as to whom it refers, he then asks the Court "to
declare and answer the question of the construction and definiteness as to who, among the
present incumbent President Corazon Aquino and Vice President Salvador Laurel and the
elected President Ferdinand E. Marcos and Vice President Arturo M. Tolentino being referred to
under the said Section 7 (sic) of ARTICLE XVIII of the TRANSITORY PROVISIONS of the
proposed 1986 Constitution refers to, . . . "

For the above-quoted reasons, which are fully applicable to the petition at bar, mutatis
mutandis, there can be no question that President Corazon C. Aquino and Vice-President
Salvador H. Laurel are the incumbent and legitimate President and Vice President of the
Republic of the Philippines.
ACCORDINGLY, the petition is hereby dismissed.

The petition is dismissed outright for lack of jurisdiction and for lack of cause of action. prLL

Teehankee, C . J ., Feria, Yap, Fernan, Narvasa, Alampay and Paras, JJ ., concur.

Prescinding from petitioner's lack of personality to sue or to bring this action (Tan vs. Macapagal,
43 SCRA 677), it is elementary that this Court assumes no jurisdiction over petitions for
declaratory relief. More importantly, the petition amounts in effect to a suit against the incumbent
President of the Republic, President Corazon C. Aquino, and it is equally elementary that
incumbent Presidents are immune from suit or from being brought to court during the period of
their incumbency and tenure.

Separate Opinions
MELENCIO-HERRERA, J., concurring:
The petitioner asks the Court to declare who are "the incumbent President and Vice President
elected in the February 7, 1986 elections" as stated in Article XVIII, Section 5 of the
Draft Constitution adopted by the Constitutional Commission of 1986.

The petition furthermore states no cause of action. Petitioner's allegation of ambiguity or

vagueness of the aforequoted provision is manifestly gratuitous, it being a matter of public record
and common public knowledge that the Constitutional Commission refers therein to incumbent
President Corazon C. Aquino and Vice-President Salvador H. Laurel, and to no other persons,
and provides for the extension of their term to noon of June 30, 1992 for purposes of
synchronization of elections. Hence, the second paragraph of the cited section provides for the
holding on the second Monday of May, 1992 of the first regular elections for the President and
Vice-President under said 1986 Constitution. In previous cases, the legitimacy of the
government of President Corazon C. Aquino was likewise sought to be questioned with the claim
that it was not established pursuant to the 1973 Constitution. The said cases were dismissed
outright by this court which held that:

We agree that the petition deserves outright dismissal as this Court has no original jurisdiction
over petitions for declaratory relief.
As to lack of cause of action, the petitioner's prayer for a declaration as to who were elected
President and Vice President in the February 7, 1986 elections should be addressed not to this
Court but to other departments of government constitutionally burdened with the task of making
that declaration.
The 1935 Constitution, the 1973 Constitution as amended, and the 1986 Draft Constitution
uniformly provide that boards of canvassers in each province and city shall certify who were
elected President and Vise President in their respective areas. The certified returns are
transmitted to the legislature which proclaims, through the designated Presiding Head, who were
duly elected.

"Petitioners have no personality to sue and their petitions state no cause

of action. For the legitimacy of the Aquino government is not a justiciable
matter. It belongs to the realm of politics where only the people of the
Philippines are the judge. And the people have made the judgment; they
have accepted the government of President Corazon C. Aquino which is
in effective control of the entire country so that it is not merely a de
facto government but in fact and law a de juregovernment. Moreover, the
community of nations has recognized the legitimacy of the present
government. All the eleven members of this Court, as reorganized, have
sworn to uphold the fundamental law of the Republic under her
government." (Joint Resolution of May 22, 1986 in G.R. No. 73748
[Lawyers League for a Better Philippines, etc. vs. President Corazon C.

Copies of the certified returns from the provincial and city boards of canvassers have not been
furnished this Court nor is there any need to do so. In the absence of a legislature, we cannot
assume the function of stating, and neither do we have any factual or legal capacity to officially
declare, who were elected President and Vice President in the February 7, 1986 elections.

16

As to who are the incumbent President and Vice President referred to in the 1986
DraftConstitution, we agree that there is no doubt the 1986 Constitutional Commission referred
to President Corazon C. Aquino and Vice President Salvador H. Laurel. LibLex

Transitory Article XVIII of the 1987 Constitution was that "the act of ratification is the act of voting
by the people. So that is the date of the ratification" and that "the canvass thereafter [of the
votes] is merely the mathematical confirmation of what was done during the date of the plebiscite
and the proclamation of the President is merely the official confirmatory declaration of an act
which was actually done by the Filipino people in adopting the Constitution when they cast their
votes on the date of the plebiscite."

Finally, we agree with the Resolution of the Court in G.R. Nos. 73748, 73972, and 73990.
For the foregoing reasons, we vote to DISMISS the instant petition.

2. ID.; PROVISIONAL CONSTITUTION; TENURE OF GOVERNMENT FUNCTIONARIES; ONE

YEAR PERIOD WITHIN WHICH TO DESIGNATE SUCCESSOR SHORTENED BY THE
RATIFICATION AND EFFECTIVITY ON FEBRUARY 2, 1987 OF THE CONSTITUTION. The
Court next holds as a consequence of its declaration at bar that the Constitution took effect on
the date of its ratification in the plebiscite held on February 2, 1987, that: (1) theProvisional
Constitution promulgated on March 25, 1986 must be deemed to have been superseded by
the 1987 Constitution on the same date February 2, 1987 and (2) by and after said date,
February 2, 1987, absent any saying clause to the contrary in the Transitory Article of the
Constitution, respondent OIC Governor could no longer exercise the power to replace petitioners
in their positions as Barangay Captain and Councilmen. Hence, the attempted replacement of
petitioners by respondent OIC Governor's designation on February 8, 1987 of their successors
could no longer produce any legal force and effect. While the Provisional Constitution provided
for a one-year period expiring on March 25, 1987 within which the power of replacement could
be exercised, this period was shortened by the ratification and effectivity on February 2, 1987
of the Constitution. Had the intention of the framers of the Constitution been otherwise, they
would have so provided for in the Transitory Article, as indeed they provided for multifarious
transitory provisions in twenty six sections of Article XVIII, e.g. extension of the six-year term of
the incumbent President and Vice-President to noon of June 30, 1992 for purposes of
synchronization of elections, the continued exercise of legislative powers by the incumbent
President until the convening of the first Congress, etc.

EN BANC
[G.R. No. 78059. August 31, 1987.]
ALFREDO M. DE LEON, ANGEL S. SALAMAT, MARIO C. STA. ANA,
JOSE C. TOLENTINO, ROGELIO J. DE LA ROSA and JOSE M.
RESURRECCION,petitioners, vs. HON. BENJAMIN B. ESGUERRA, in
his capacity as OIC Governor of the Province of Rizal, HON. ROMEO
C. DE LEON, in his capacity as OIC Mayor of the Municipality of
Taytay, Rizal, FLORENTINO G. MAGNO, REMIGIO M. TIGAS,
RICARDO Z. LACANIENTA, TEODORO V. MEDINA, ROSENDO S.
PAZ, and TERESITA L. TOLENTINO, respondents.
SYLLABUS

DECISION

TEEHANKEE, C.J., concurring:

MELENCIO-HERRERA, J p:

1. POLITICAL LAW; 1987 CONSTITUTION; DATE OF RATIFICATION; RETROACTS ON THE

DAY OF THE PLEBISCITE. The main issue resolved in the judgment at bar is whether
the1987 Constitution took effect on February 2, 1987, the date that the plebiscite for its
ratification was held or whether it took effect on February 11, 1987, the date its ratification was
proclaimed per Proclamation No. 58 of the President of the Philippines, Corazon C. Aquino. The
thrust of the dissent is that the Constitution should be deemed to "take effect on the date its
ratification shall have been ascertained and not at the time the people cast their votes to approve
or reject it." This view was actually proposed at the Constitutional Commission deliberations, but
was withdrawn by its proponent in the face of the "overwhelming" contrary view that the
Constitution "will be effective on the very day of the plebiscite." The record of the proceedings
and debates of the Constitutional Commission fully supports the Court's judgment. It shows that
the clear, unequivocal and express intent of the Constitutional Commission in unanimously
approving (by thirty-five votes in favor and none against) the aforequoted Section 27 of

An original action for Prohibition instituted by petitioners seeking to enjoin respondents from
replacing them from their respective positions as Barangay Captain and Barangay Councilmen
of Barangay Dolores, Municipality of Taytay, Province of Rizal. LLphil
As required by the Court, respondents submitted their Comment on the Petition, and petitioner's
their Reply to respondents' Comment.
In the Barangay elections held on May 17, 1982, petitioner Alfredo M. De Leon was elected
Barangay Captain and the other petitioners Angel S. Salamat, Mario C. Sta. Ana, Jose C.
Tolentino, Rogelio J. de la Rosa and Jose M. Resurreccion, as Barangay Councilmen of

17

Barangay Dolores, Taytay, Rizal under Batas Pambansa Blg. 222, otherwise known as the
Barangay Election Act of 1982.

shall commence on June 7, 1982 and shall continue until their successors shall have elected
and shall have qualified," or up to June 7, 1988. It is also their position that with the ratification of
the 1987 Constitution, respondent OIC Governor no longer has the authority to replace them and
to designate their successors.

On February 9, 1987, petitioner Alfredo M. de Leon received a Memorandum antedated

December 1, 1986 but signed by respondent OIC Governor Benjamin Esguerra on February 8,
1987 designating respondent Florentino G. Magno as Barangay Captain of Barangay Dolores,
Taytay, Rizal. The designation made by the OIC Governor was "by authority of the Minister of
Local Government."

On the other hand, respondents rely on Section 2, Article III of the Provisional Constitution,
promulgated on March 25, 1986, which provided:
"SECTION 2. All elective and appointive officials and employees under
the 1973 Constitution shall continue in office until otherwise provided by
proclamation or executive order or upon the designation or appointment
and qualification of their successors, if such appointment is made within a
period of one year from February 25, 1986."

Also on February 8, 1987, respondent OIC Governor signed a Memorandum, antedated

December 1, 1986 designating respondents Remigio M. Tigas, Ricardo Z. Lacanienta,
Teodoro V. Medina, Roberto S. Paz and Teresita L. Tolentino as members of the Barangay
Council of the same Barangay and Municipality. prLL
That the Memoranda had been antedated is evidenced by the Affidavit of respondent OIC
Governor, the pertinent portions of which read:

By reason of the foregoing provision, respondents contend that the terms of office of elective and
appointive officials were abolished and that petitioners continued in office by virtue of the
aforequoted provision and not because their term of six years had not yet expired; and that the
provision in the Barangay Election Act fixing the term of office of Barangay officials to six (6)
years must be deemed to have been repealed for being inconsistent with the aforequoted
provision of the Provisional Constitution. LLphil

"xxx xxx xxx

"That I am the OIC Governor of Rizal having been appointed as such on
March 20, 1986;

Examining the said provision, there should be no question that petitioners, as elective officials
under the 1973 Constitution, may continue in office but should vacate their positions upon the
occurrence of any of the events mentioned. 1

"That as being OIC Governor of the Province of Rizal, and in the

performance of my duties thereof, I among others, have signed as I did
sign the unnumbered memorandum ordering the replacement of all the
barangay officials of all the barangay(s) in the Municipality of Taytay,
Rizal;

Since the promulgation of the Provisional Constitution, there has been no proclamation or
executive order terminating the term of elective Barangay officials. Thus, the issue for resolution
is whether or not the designation of respondents to replace petitioners was validly made during
the one-year period which ended on February 25, 1987.

"That the above cited memorandum dated December 1, 1986 was signed
by me personally on February 8, 1987;

Considering the candid Affidavit of respondent OIC Governor, we hold that February 8, 1977,
should be considered as the effective date of replacement and not December 1, 1986 to which it
was antedated, in keeping with the dictates of justice.

"That said memorandum was further deciminated (sic) to all concerned

the following day, February 9, 1987.

But while February 8, 1987 is ostensibly still within the one year deadline, the aforequoted
provision in the Provisional Constitution must be deemed to have been overtaken by Section 27,
Article XVIII of the 1987 Constitution reading:

FURTHER AFFIANT SAYETH NONE.

"Pasig, Metro Manila, March 23, 1987."

"Sec 27. This Constitution shall take effect immediately upon its
ratification by a majority of the votes cast in a plebiscite held for the
purpose and shall supersede all previous Constitutions."

Before us now, petitioners pray that the subject Memoranda of February 8, 1987 be declared null
and void and that respondents be prohibited from taking over their positions of Barangay Captain
and Barangay Councilmen, respectively. Petitioners maintain that pursuant to Section 3 of the
Barangay Election Act of 1982 (8P Blg. 222), their terms of office "shall be six (6) years which

18

The 1987 Constitution was ratified in a plebiscite on February 2, 1987. By that date, therefore,
the Provisional Constitution must be deemed to have been superseded. Having become
inoperative, respondent OIC Governor could no longer rely on Section 2, Article III, thereof to
designate respondents to the elective positions occupied by petitioners. dctai
EN BANC

Petitioners must now be held to have acquired security of tenure specially considering that the
Barangay Election Act of 1982 declares it "a policy of the State to guarantee and promote the
autonomy of the barangays to ensure their fullest development as self-reliant communities." 2
Similarly, the 1987 Constitution ensures the autonomy of local governments and of political
subdivisions of which the barangays form a part, 3 and limits the President's power to "general
supervision" over local governments. 4 Relevantly, Section 8, Article X of the same 1987
Constutution further provides in part:

[G.R. No. L-63915. December 29, 1986.]

LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and MOVEMENT
OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND
NATIONALISM, INC. (MABINI), petitioners, vs. HON. JUAN C.
TUVERA. in his capacity as Executive Assistant to the President,
HON. JOAQUIN VENUS, in his capacity as Deputy Executive
Assistant to the President, MELQUIADES P. DE LA CRUZ, ETC., ET
AL., respondents.

"Sec. 8. The term of office of elective local officials, except barangay

officials, which shall be determined by law, shall be three years . . . "
Until the term of office of barangay officials has been determined by law, therefore, the term of
office of six (6) years provided for in the Barangay Election Act of 1982 5 should still govern.

SYLLABUS
FERNAN, J., concurring:

Contrary to the stand of respondents, we find nothing inconsistent between the term of six (6)
years for elective Barangay officials and the 1987 Constitution, and the same should, therefore,
be considered as still operative, pursuant to Section 3, Article XVIII of the 1987 Constitution,
reading:

1.CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ARTICLE 2, CIVIL CODE;

PUBLICATION OF LAWS MADE TO ENSURE CONSTITUTIONAL RIGHT TO DUE PROCESS
AND TO INFORMATION. The categorical statement by this Court on the need for publication
before any law be made effective seeks to prevent abuses on the part if the lawmakers and, at
the time, ensure to the people their constitutional right to due process and to information on
matter of public concern. cda

"Sec. 3. All existing laws, decrees, executive orders, proclamations,

letters of instructions, and other executive issuances not inconsistent, with
this Constitutionshall remain operative until amended, repealed or
revoked."

RESOLUTION

WHEREFORE, (1) The Memoranda issued by respondent OIC Governor on February 8, 1987
designating respondents as the Barangay Captain and Barangay Councilmen, respectively, of
Barangay Dolores, Taytay, Rizal, are both declared to be of no legal force and effect; and (2) the
Writ of Prohibition is granted enjoining respondents perpetually from proceeding with the
ouster/take-over of petitioners' positions subject of this Petition. Without costs.

CRUZ, J p:
Due process was invoked by the petitioners in demanding the disclosure or a number of
presidential decrees which they claimed had not been published as required by law. The
government argued that while publication was necessary as a rule, it was not so when it was
"otherwise provided," as when the decrees themselves declared that they were to become
effective immediately upon their approval. In the decision of this case on April 24, 1985, the
Court affirmed the necessity for the publication of some of these decrees, declaring in the
dispositive portion as follows:

SO ORDERED.
Yap, Fernan, Narvasa, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin and Cortes,
JJ., concur.

"WHEREFORE, the Court hereby orders respondents to publish to the

Official Gazette all unpublished presidential issuances which are of

19

general application, and unless so published, they shall have no binding

force and effect."

publication itself, which cannot in any event be omitted. This clause does not mean that the
legislature may make the law effective immediately upon approval, or on any other date, without
its previous publication. cdphil

The petitioners are now before us again, this time to move for reconsideration/clarification of that
decision. 1 Specifically, they ask the following questions:

Publication is indispensable in every case, but the legislature may in its discretion provide that
the usual fifteen-day period shall be shortened or extended. An example, as pointed out by the
present Chief Justice in his separate concurrence in the original decision, 6 is the Civil Code
which did not become effective after fifteen days from its publication in the Official Gazette but
"one year after such publication." The general rule did not apply because it was "otherwise
provided."

1.What is meant by "law of public nature" or "general applicability"?

2.Must a distinction be made between laws of general applicability and laws which are not?
3.What is meant by "publication"?

It is not correct to say that under the disputed clause publication may be dispensed with
altogether. The reason is that such omission would offend due process insofar as it would deny
the public knowledge of the laws that are supposed to govern it. Surely, if the legislature could
validly provide that a law shall become effective immediately upon its approval notwithstanding
the lack of publication (or after an unreasonably short period after publication), it is not unlikely
that persons not aware of it would be prejudiced as a result; and they would be so not because
of a failure to comply with it but simply because they did not know of its existence. Significantly,
this is not true only of penal laws as is commonly supposed. One can think of many non-penal
measures, like a law on prescription, which must also be communicated to the persons they may
affect before they can begin to operate. LexLib

4.Where is the publication to be made?

5.When is the publication to be made?
Resolving their own doubts, the petitioners suggest that there should be no distinction between
laws of general applicability and those which are not; that publication means complete
publication; and that the publication must be made forthwith in the Official Gazette. 2
In the Comment 3 required of the then Solicitor General, he claimed first that the motion was a
request for an advisory opinion and should therefore be dismissed, and, on the merits, that the
clause "unless it is otherwise provided" in Article 2 of the Civil Code meant that the publication
required therein was not always imperative; that publication, when necessary, did not have to be
made in the Official Gazette; and that in any case the subject decision was concurred in only by
three justices and consequently not binding. This elicited a Reply 4 refuting these arguments.
Came next the February Revolution and the Court required the new Solicitor General to file a
Rejoinder in view of the supervening events, under Rule 3, Section 18, of the Rules of Court.
Responding, he submitted that issuances intended only for the interval administration of a
government agency or for particular persons did not have to be published; that publication when
necessary must be in full and in the Official Gazette; and that, however, the decision under
reconsideration was not binding because it was not supported by eight members of this Court. 5

We note at this point the conclusive presumption that every person knows the law, which of
course presupposes that the law has been published if the presumption is to have any legal
justification at all. It is no less important to remember that Section 6 of the Bill of Rights
recognizes "the right of the people to information on matters of public concern," and this certainly
applies to, among others, and indeed especially, the legislative enactments of the government.
The term "laws" should refer to all laws and not only to those of general application, for strictly
speaking all laws relate to the people in general albeit there are some that do not apply to them
directly. An example is a law granting citizenship to a particular individual, like a relative of
President Marcos who was decreed instant naturalization. It surely cannot be said that such a
law does not affect the public although it unquestionably does not apply directly to all the people.
The subject of such law is a matter of public interest which any member of the body politic may
question in the political forums or, if he is a proper party, even in the courts of justice. In fact, a
law without any bearing on the public would be invalid as an intrusion of privacy or as class
legislation or as an ultra vires act of the legislature. To be valid, the law must invariably affect the
public interest even if it might be directly applicable only to one individual, or some of the people
only, and not to the public as a whole.

The subject of contention is Article 2 of the Civil Code providing as follows:

"ART. 2.Laws shall take effect after fifteen days following the completion
of their publication in the Official Gazette, unless it is otherwise provided.
This Code shall take effect one year after such publication."

We hold therefore that all statutes, including those of local application and private laws, shall be
published as a condition for their effectivity, which shall begin fifteen days after publication
unless a different effectivity date is fixed by the legislature. LibLex

After a careful study of this provision and of the arguments of the parties, both on the original
petition and on the instant motion, we have come to the conclusion, and so hold, that the clause
"unless it is otherwise provided" refers to the date of effectivity and not to the requirement of

20

Covered by this rule are presidential decrees and executive orders promulgated by the President
in the exercise of legislative powers whenever the same are validly delegated by the legislature
or, at present, directly conferred by the Constitution. Administrative rules and regulations must
also be published if their purpose is to enforce or implement existing law pursuant also to a valid
delegation.

There is much to be said of the view that the publication need not be made in the Official
Gazette, considering its erratic releases and limited readership. Undoubtedly, newspapers of
general circulation could better perform the function of communicating the laws to the people as
such periodicals are more easily available, have a wider readership, and come out regularly. The
trouble, though, is that this kind of publication is not the one required or authorized by existing
law. As far as we know, no amendment has been made of Article 2 of the Civil Code. The
Solicitor General has not pointed to such a law, and we have no information that it exists. If it
does, it obviously has not yet been published.

Interpretative regulations and those merely internal in nature, that is, regulating only the
personnel of the administrative agency and not the public, need not be published. Neither is
publication required of the so-called letters of instructions issued by administrative superiors
concerning the rules or guidelines to be followed by their subordinates in the performance of
their duties. cdasia

At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or modify
it if we find it impractical. That is not our function. That function belongs to the legislature. Our
task is merely to interpret and apply the law as conceived and approved by the political
departments of the government in accordance with the prescribed procedure. Consequently, we
have no choice but to pronounce that under Article 2 of the Civil Code, the publication of laws
must be made in the Official Gazette, and not elsewhere, as a requirement for their effectivity
after fifteen days from such publication or after a different period provided by the
legislature. LLphil

Accordingly, even the charter of a city must be published notwithstanding that it applies to only a
portion of the national territory and directly affects only the inhabitants of that place. All
presidential decrees must be published, including even, say, those naming a public place after a
favored individual or exempting him from certain prohibitions or requirements. The circulars
issued by the Monetary Board must be published if they are meant not merely to interpret but to
"fill in the details" of the Central Bank Act which that body is supposed to enforce.

We also hold that the publication must be made forthwith, or at least as soon as possible, to give
effect to the law pursuant to the said Article 2. There is that possibility, of course, although not
suggested by the parties that a law could be rendered unenforceable by a mere refusal of the
executive, for whatever reason, to cause its publication as required. This is a matter, however,
that we do not need to examine at this time.

However, no publication is required of the instructions issued by, say, the Minister of Social
Welfare on the case studies to be made in petitions for adoption or the rules laid down by the
head of a government agency on the assignments or workload of his personnel or the wearing of
office uniforms. Parenthetically, municipal ordinances are not covered by this rule but by the
Local Government Code.

Finally, the claim of the former Solicitor General that the instant motion is a request for an
advisory opinion is untenable, to say the least, and deserves no further comment.

We agree that the publication must be in full or it is no publication at all since its purpose is to
inform the public of the contents of the laws. As correctly pointed out by the petitioners, the mere
mention of the number of the presidential decree, the title of such decree, its whereabouts (e.g.,
"with Secretary Tuvera"), the supposed date of effectivity, and in a mere supplement of the
Official Gazette cannot satisfy the publication requirement. This is not even substantial
compliance. This was the manner, incidentally, in which the General Appropriations Act for FY
1975, a presidential decree undeniably of general applicability and interest, was "published" by
the Marcos administration. 7 The evident purpose was to withhold rather than disclose
information on this vital law.

The days of the secret laws and the unpublished decrees are over. This is once again an open
society, with all the acts of the government subject to public scrutiny and available always to
public cognizance. This has to be so if our country is to remain democratic, with sovereignty
residing in the people and all government authority emanating from them.
Although they have delegated the power of legislation, they retain the authority to review the
work of their delegates and to ratify or reject it according to their lights, through their freedom of
expression and their right of suffrage. This they cannot do if the acts of the legislature are
concealed.

Coming now to the original decision, it is true that only four justices were categorically for
publication in the Official Gazette 8 and that six others felt that publication could be made
elsewhere as long as the people were sufficiently informed. 9 One reserved his vote 10 and
another merely acknowledged the need for due publication without indicating where it should be
made. 11 It is therefore necessary for the present membership of this Court to arrive at a clear
consensus on this matter and to lay down a binding decision supported by the necessary vote.

Laws must come out in the open in the clear light of the sun instead of skulking in the shadows
with their dark, deep secrets. Mysterious pronouncements and rumored rules cannot be
recognized as binding unless their existence and contents are confirmed by a valid publication
intended to make full disclosure and give proper notice to the people. The furtive law is like a
scabbarded saber that cannot feint, parry or cut unless the naked blade is drawn.

21

WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their
approval, or as soon thereafter as possible, be published in full in the Official Gazette, to become
effective only after fifteen days from their publication, or on another date specified by the
legislature, in accordance with Article 2 of the Civil Code. dctai

not be regarded as purporting literally to come into effect immediately upon its approval or
enactment and without need of publication. For so to interpret such statute would be to collide
with the constitutional obstacle posed by the due process clause. The enforcement of
prescriptions which are both unknown to and unknowable by those subjected to the statute, has
been throughout history a common tool of tyrannical governments. Such application and
enforcement constitutes at bottom a negation of the fundamental principle of legality in the
relations between a government and its people.

SO ORDERED.
Teehankee, C .J ., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr ., andParas,
JJ ., concur.

At the same time, it is clear that the requirement of publication of a statute in the Official Gazette,
as distinguished from any other medium such as a newspaper of general circulation, is
embodied in a statutory norm and is not a constitutional command. The statutory norm is set out
in Article 2 of the Civil Code and is supported and reinforced by Section 1 of Commonwealth Act
No. 638 and Section 35 of the Revised Administrative Code. A specification of the Official
Gazette as the prescribed medium of publication may therefore be changed. Article 2 of the Civil
Code could, without creating a constitutional problem, be amended by a subsequent statute
providing, for instance, for publication either in the Official Gazette or in a newspaper of general
circulation in the country. Until such an amendatory statute is in fact enacted, Article 2 of the
Civil Code must be obeyed and publication effected in the Official Gazette and not in any other
medium.

Separate Opinions
FERNAN, J ., concurring:
While concurring in the Court's opinion penned by my distinguished colleague, Mr. Justice
Isagani A. Cruz, I would like to add a few observations. Even as a Member of the defunct
Batasang Pambansa, I took a strong stand against the insidious manner by which the previous
dispensation had promulgated and made effective thousands of decrees, executive orders,
letters of instructions, etc. Never has the law-making power which traditionally belongs to the
legislature been used and abused to satisfy the whims and caprices of a one-man legislative mill
as it happened in the past regime. Thus, in those days, it was not surprising to witness the sad
spectacle of two presidential decrees bearing the same number, although covering two different
subject matters. In point is the case of two presidential decrees bearing number 1686 issued on
March 19, 1980, one granting Philippine citizenship to Michael M. Keon, the then President's
nephew and the other imposing a tax on every motor vehicle equipped with air-conditioner. This
was further exacerbated by the issuance of PD No. 1686-A also on March 19, 1980 granting
Philippine citizenship to basketball players Jeffrey Moore and Dennis George Still. cdll

||| (Taada v. Tuvera, G.R. No. L-63915 (Resolution), [December 29, 1986], 230 PHIL 528-540)

III.

JUDICIAL ELABORATION OF THE CONSTITUTION

JOSE A. ANGARA vs. ELECTORAL COMMISSION

EN BANC

The categorical statement by this Court on the need for publication before any law may be made
effective seeks to prevent abuses on the part of the lawmakers and, at the same time, ensures to
the people their constitutional right to due process and to information on matters of public
concern.

[G.R. No. 45081. July 15, 1936.]

FELICIANO, J ., concurring:

JOSE A. ANGARA, petitioner, vs. THE ELECTORAL COMMISSION,

PEDRO YNSUA, MIGUEL CASTILLO, and DIONISIO C.
MAYOR, respondents.

I agree entirely with the opinion of the court so eloquently written by Mr. Justice Isagani A. Cruz.
At the same time, I wish to add a few statements to reflect my understanding of what the Court is
saying. cdlex

Godofredo Reyes for petitioner.

Solicitor-General Hilado for respondent Electoral Commission.

A statute which by its terms provides for its coming into effect immediately upon approval
thereof, is properly interpreted as coming into effect immediately upon publication thereof in the
Official Gazette as provided in Article 2 of the Civil Code. Such statute, in other words, should

Pedro Ynsua in his own behalf.

22

No appearance for other respondents.

4. ID.; ID.; ID.; ID.; MODERATING POWER OF THE JUDICIARY IS GRANTED,

IF NOT EXPRESSLY, BY CLEAR IMPLICATION. As any human production, our
Constitution is of course lacking perfection and perfectibility, but as much as it was within
the power of our people, acting through their delegates to so provide, that instrument which
is the expression of their sovereignty however limited, has established a republican
government intended to operate and function as a harmonious whole, under a system of
checks and balances, and subject to specific limitations and restrictions provided in the said
instrument. The Constitution sets forth in no uncertain language the restrictions and
limitations upon governmental powers and agencies. If these restrictions and limitations are
transcended, it would be inconceivable if the Constitution had not provided for a mechanism
by which to direct the course of government along constitutional channels, for, then, the
distribution of powers would be mere verbiage, the bill of rights mere expressions of
sentiment, and the principles of good government mere political apothegms. Certainly, the
limitations and restrictions embodied in the Constitution are real as they should be in any
living constitution. In the United States where no express constitutional grant is found in
their constitution, the possession of this moderating power of the courts, not to speak of its
historical origin and development there, has been set at rest by popular acquiescence for a
period of more than one and a half centuries. In our case, this moderating power is granted,
if not expressly, by clear implication from section 2 of article VIII of our Constitution.

SYLLABUS
1. CONSTITUTIONAL LAW; SEPARATION OF POWERS. The separation of
powers is a fundamental principle in our system of government. It obtains not through
express provision but by actual division in our Constitution. Each department of the
government has exclusive cognizance of matters within its jurisdiction, and is supreme
within its own sphere.
2. ID.; ID.; SYSTEM OF CHECKS AND BALANCES. But it does not follow
from the fact that the three powers are to be kept separate and distinct that the Constitution
intended them to be absolutely unrestrained and independent of each other. The
Constitution has provided for an elaborate system of checks and balances to secure
coordination in the workings of various departments of government. For example, the Chief
Executive under our Constitution is 80 far made a check on the legislative power that his
assent is required in the enactment of laws. This, however, is subject to the further check
that a bill may become a law notwithstanding the refusal of the President to approve it, by a
vote of two-thirds or three-fourths, as the case may be, of the National Assembly. The
President has also the right to convene the Assembly in special session whenever he
chooses. On the other hand, the National Assembly operates as a check on the Executive
in the sense that its consent through its Commission on Appointments is necessary in the
appointment of certain officers; and the concurrence of a majority of all its members is
essential to the conclusion of treaties. Furthermore, in its power to determine what courts
other than the Supreme Court shall be established, to define their jurisdiction and to
appropriate funds for their support, the National Assembly exercises to a certain extent
control over the judicial department. The Assembly also exercises the judicial power of
trying impeachments. And the judiciary in turn, with the Supreme Court as the final arbiter,
effectively checks the other departments in the exercise of its power to determine the law,
and hence to declare executive and legislative acts void if violative of the Constitution.

5. ID.; ID.; ID.; WHAT IS MEANT BY "JUDICIAL SUPREMACY". The

Constitution is a definition of the powers of government. Who is to determine the nature,
scope and extent of such powers? The Constitution itself has provided for the
instrumentality of the judiciary as the rational way. And when the judiciary mediates to
allocate constitutional boundaries, it does not assert any superiority over the other
departments; it does not in reality nullify or invalidate an act of the Legislature, but only
asserts the solemn and sacred obligation assigned to it by the Constitution to determine
conflicting claims of authority under the Constitution and to establish for the parties in an
actual controversy the rights which that instrument secures and guarantees to them. This is
in truth all that is involved in what is termed "judicial supremacy" which properly is the
power of judicial review under the Constitution.

3. ID.; ID.; ID.; JUDICIARY THE ONLY CONSTITUTIONAL ARBITER TO

ALLOCATE CONSTITUTIONAL BOUNDARIES. But in the main, the Constitution has
blocked out with deft strokes and in bold lines, allotment of power to the executive, the
legislative and the judicial departments of the government. The overlapping and interlacing
of functions and duties between the several departments, however, sometimes makes it
hard to say just where the one leaves off and the other begins. In times of social
disquietude or political excitement, the great landmarks of the Constitution are apt to be
forgotten or marred, if not entirely obliterated. In cases of conflict, the judicial department is
the only constitutional organ which can be called upon to determine the proper allocation of
powers between the several departments and among the integral or constituent units
thereof.

6. ID.; ID.; ID.; JUDICIAL REVIEW LIMITED TO ACTUAL LITIGATION;

WISDOM, JUSTICE OR EXPEDIENCY OF LEGISLATION. Even then, this power of
judicial review is limited to actual cases and controversies to be exercised after full
opportunity of argument by the parties, and limited further to the constitutional question
raised or the very lis mota presented. Any attempt at abstraction could only lead to
dialectics and barren legal questions and to sterile conclusions unrelated to actualities.
Narrowed as its function is in this manner, the judiciary does not pass upon questions of
wisdom, justice or expediency of legislation. More than that, courts accord the presumption
of constitutionality to legislative enactments not only because the Legislature is presumed
to abide by the Constitution but also because the judiciary in the determination of actual
cases and controversies must reflect the wisdom and justice of the people as expressed

23

through their representatives in the executive and legislative departments of the

government.

10. ID.; THE ELECTORAL COMMISSION; CONSTITUTIONAL GRANT OF

POWER TO THE ELECTORAL COMMISSION TO BE THE SOLE JUDGE OF ALL
CONTESTS RELATING TO THE ELECTION, RETURNS AND QUALIFICATIONS OF
MEMBERS OF THE NATIONAL ASSEMBLY. The original provision regarding this
subject in the Act of Congress of July 1, 1902 (sec. 7, par. 5) laying down the rule that the
assembly shall be the judge of the elections, returns, and qualifications of its members",
was taken from clause 1 of section 5, Article I of the Constitution of the United States
providing that "Each House shall be the Judge of the Elections, Returns, and Qualifications
of its own Members, . . . ." The Act of Congress of August 29, 1916 (sec. 18, par. 1)
modified this provision by the insertion of the word "sole" as follows: "That the Senate and
House of Representatives, respectively, shall be the sole judges of the elections, returns,
and qualifications of their elective members, . . ." apparently in order to emphasize the
exclusive character of the jurisdiction conferred upon each House of the Legislature over
the particular cases therein specified. This court has had occasion to characterize this grant
of power to the Philippine Senate and House of Representatives, respectively, as "full, clear
and complete". (Veloso vs. Boards of Canvassers of Leyte and Samar [1919], 39 Phil., 886,
888.)

7. ID.; ID.; ID.; SYSTEM ITSELF NOT THE CHIEF PALLADIUM OF

CONSTITUTIONAL LIBERTY; SUCCESS MUST BE TESTED IN THE CRUCIBLE OF
FILIPINO MINDS AND HEARTS. But much as we might postulate on the internal checks
of power provided in our Constitution, it ought not the less to be remembered that, in the
language of James Madison, the system itself is not "the chief palladium of constitutional
liberty . . . the people who are authors of this blessing must also be its guardians . . . their
eyes must be ever ready to mark, their voice to pronounce . . . aggression on the authority
of their constitution." In the last and ultimate analysis, then, must the success of our
government in the unfolding years to come be tested in the crucible of Filipino minds and
hearts than in the consultation rooms and court chambers.
8. ID.; OUR CONSTITUTION HAS ADOPTED THE AMERICAN TYPE OF
CONSTITUTIONAL GOVERNMENT. Discarding the English type and other European
types of constitutional government, the framers of our Constitution adopted the American
type where the written constitution is interpreted and given effect by the judicial department.
In some countries which have declined to follow the American example, provisions have
been inserted in their constitutions prohibiting the courts from exercising the power to
interpret the fundamental law. This is taken as a recognition of what otherwise would be the
rule that in the absence of direct prohibition courts are bound to assume what is logically
their function. For instance, the Constitution of Poland of 1921, expressly provides that
courts shall have no power to examine the validity of statutes (article 81, chapter IV). The
former Austrian Constitution contained a similar declaration. In countries whose
constitutions are silent in this respect, courts have assumed this power. This is true in
Norway, Greece, Australia and South Africa. Whereas, in Czechoslovakia (arts. 2 and 3,
Preliminary Law to Constitutional Charter of the Czechoslovak Republic, February 29,
1920) and Spain (arts 121-123, Title IX, Constitution of the Republic of 1931) especial
constitutional courts are established to pass upon the validity of ordinary laws.

11. ELECTORAL COMMISSION; HISTORICAL INSTANCES. The transfer of

the power of determining the election, returns and qualifications of the members of the
Legislature long lodged in the legislative body, to an independent, impartial and nonpartisan tribunal, is by no means a mere experiment in the science of government. As early
as 1868, the House of Commons in England solved the problem of insuring the nonpartisan settlement of the controverted elections of its members by abdicating its
prerogative to two judges of the King's Bench of the High Court of Justice selected from a
rota in accordance with rules of court made for the purpose. Having proved successful, the
practice has become imbedded in English jurisprudence (Parliamentary Elections Act, 1868
[31 & 32 Vict. c. 125] as amended by Parliamentary Elections and Corrupt Practices Act,
1879 [42 & 43 Vict. c. 75], s. 2; Corrupt and Illegal Practices Prevention Act 1883 [46 & 47
Vict. c. 51], s. 70; Expiring Laws Continuance Act, 1911 [1 & 2 Geo. 5, c. 22]; Laws of
England, vol. XII, p. 408, vol. XXI, p. 787). In the Dominion of Canada, election contests
which were originally heard by the Committee of the House of Commons, are since 1922
tried in the courts. Likewise, in the Commonwealth of Australia, election contests which
were originally determined by each house, are since 1922 tried in the High Court. In
Hungary, the organic law provides that all protests against the election of members of the
Upper House of Diet are to be resolved by the Supreme Administrative Court (Law 22 of
1916, chap. 2, art. 37, par. 6). The Constitution of Poland of March 17, 1921 (art. 19) and
the Constitution of the Free City of Danzig of May 13, 1922 (art. 10) vest the authority to
decide contested elections to the Diet or National Assembly in the Supreme Court. For the
purpose of deciding legislative contests, the Constitution of the German Reich of July 1,
1919 (art. 31), the Constitution of the Czechoslovak Republic of February 29, 1920 (art. 19)
and the Constitution of the Grecian Republic of June 2, 1927 (art. 43) all provide for an
Electoral Commission.

9. ID.; JURISDICTION OVER THE ELECTORAL COMMISSION. The nature

of the present controversy shows the necessity of a final constitutional arbiter to determine
the conflict of authority between two agencies created by the Constitution. If the conflict
were left undecided and undetermined, a void would be created in our constitutional system
which may in the long run prove destructive of the entire framework. Natura vacuum
abhorret, so must we avoid exhaustion in our constitutional system. Upon principle, reason
and authority, the Supreme Court has jurisdiction over the Electoral Commission and the
subject matter of the present controversy for the purpose of determining the character,
scope and extent of the constitutional grant to the Electoral Commission as "the sole judge
of all contests relating to the election, returns and qualifications of the members of the
National Assembly."

24

12. ID.; ELECTORAL COMMISSION IN THE UNITED STATES. The creation

of an Electoral Commission whose membership is recruited both from the legislature and
the judiciary is by no means unknown in the United States. In the presidential elections of
1876 there was a dispute as to the number of electoral votes received by each of the two
opposing candidates. As the Constitution made no adequate provision for such a
contingency, Congress passed a law on January 29, 1877 (United States Statutes at Large,
vol. 19, chap. 37, pp. 227-229), creating a special Electoral Commission composed of five
members elected by the Senate, five members elected by the House of Representatives,
and five justices of the Supreme Court, the fifth justice to be selected by the four
designated in the Act. The decision of the commission was to be binding unless rejected by
the two houses voting separately. Although there is not much moral lesson to be derived
from the experience of America in this regard, the experiment has at least abiding historical
interest.

represented to off-set partisan influence in its deliberations was created, and further
endowed with judicial temper by including in its membership three justices of the Supreme
Court.
15. ID.; ID.; ID.; THE ELECTORAL COMMISSION IS AN INDEPENDENT
CONSTITUTIONAL CREATION ALTHOUGH FOR PURPOSES OF CLASSIFICATION IT IS
CLOSER TO THE LEGISLATIVE DEPARTMENT THAN TO ANY OTHER. The Electoral
Commission is a constitutional creation, invested with the necessary authority in the
performance and execution of the limited and specific function assigned to it by the
Constitution. Although it is not a power in our tripartite scheme of government, it is, to all
intents and purposes, when acting within the limits of its authority, an independent organ. It
is, to be sure, closer to the legislative department than to any other. The location of the
provision (sec. 4) creating the Electoral Commission under Article VI entitled "Legislative
Department" of our Constitution is very indicative. Its composition is also significant in that it
is constituted by a majority of members of the Legislature. But it is a body separate from
and independent of the Legislature.

13. ID.; ID.; FAMILIARITY OF THE MEMBERS OF THE CONSTITUTIONAL

CONVENTION WITH THE HISTORY AND POLITICAL DEVELOPMENT OF OTHER
COUNTRIES OF THE WORLD; ELECTORAL COMMISSION IS THE EXPRESSION OF
THE WISDOM AND ULTIMATE JUSTICE OF THE PEOPLE. The members of the
Constitutional Convention who framed our fundamental law were in their majority men
mature in years and experience. To be sure, many of them were familiar with the history
and political development of other countries of the world. When, therefore, they deemed it
wise to create an Electoral Commission as a constitutional organ and invested it with the
exclusive function of passing upon and determining the election, returns and qualifications
of the members of the National Assembly, they must have done so not only in the light of
their own experience but also having in view the experience of other enlightened peoples of
the world. The creation of the Electoral Commission was designed to remedy certain evils
of which the framers of our Constitution were cognizant. Notwithstanding the vigorous
opposition of some members of the Convention to its creation, the plan was approved by
that body by a vote of 98 against 58. All that can be said now is that, upon the approval of
the Constitution, the creation of the Electoral Commission is the expression of the wisdom
and "ultimate justice of the people". (Abraham Lincoln, First Inaugural Address, March 4,
1861.)

16. ID.; ID; ID.; GRANT OF POWER TO THE ELECTORAL COMMISSION

INTENDED TO BE AS COMPLETE AND UNIMPAIRED AS IF IT HAD REMAINED
ORIGINALLY IN THE LEGISLATURE. The grant of power to the Electoral Commission
to judge all contests relating to the election, returns and qualifications of members of the
National Assembly, is intended to be as complete and unimpaired as if it had remained
originally in the Legislature. The express lodging of that power in the Electoral Commission
is an implied denial of the exercise of that power by the National Assembly. And this is as
effective a restriction upon the legislative power as an express prohibition in the constitution
(Ex parte Lewis, 46 Tex. Crim. Rep., 1; State vs. Whisman, 33 S. D., 260; L. R. A., 1917B,
1). If the power claimed for the National Assembly to regulate the proceedings of the
Electoral Commission and cut off the power of the Electoral Commission to lay down a
period within which protest should be filed were conceded, the grant of power to the
commission would be ineffective. The Electoral Commission in such a case would be
invested with the power to determine contested cases involving the election, returns, and
qualifications of the members of the National Assembly but subject at all times to the
regulative power of the National Assembly. Not only would the purpose of the framers of our
Constitution of totally transferring this authority from the legislative body be frustrated, but a
dual authority would be created with the resultant inevitable clash of powers from time to
time. A sad spectacle would then be presented of the Electoral Commission retaining the
bare authority of taking cognizance of cases referred to, but in reality without the necessary
means to render that authority effective whenever and wherever the National Assembly has
chosen to act, a situation worse than that intended to be remedied by the framers of our
Constitution. The power to regulate on the part of the National Assembly in procedural
matters will inevitably lead to the ultimate control by the Assembly of the entire proceedings
of the Electoral Commission, and, by indirection, to the entire abrogation of the
constitutional grant. It is obvious that this result should not be permitted.

14. ID.; ID.; ID.; PURPOSE WAS TO TRANSFER IN ITS TOTALITY POWER
EXERCISED PREVIOUSLY BY THE LEGISLATURE OVER THE CONTESTED
ELECTIONS OF THE MEMBERS TO AN INDEPENDENT AND IMPARTIAL TRIBUNAL.
From the deliberations of our Constitutional Convention it is evident that the purpose was to
transfer in its totality all the powers previously exercised by the Legislature in matters
pertaining to contested elections of its members, to an independent and impartial tribunal. It
was not so much the knowledge and appreciation of contemporary constitutional
precedents, however, as the long-felt need of determining legislative contests devoid of
partisan considerations which prompted the people acting through their delegates to the
Convention to provide for this body known as the Electoral Commission. With this end in
view, a composite body in which both the majority and minority parties are equally

25

17. ID.; ID.; ID; ID.; THE POWER TO PROMULGATE INCIDENTAL RULES AND
REGULATIONS LODGED ALSO IN THE ELECTORAL COMMISSION BY NECESSARY
IMPLICATION. The creation of the Electoral Commission carried with it ex necesitate
rei the power regulative in character to limit the time within which protests intrusted to its
cognizance should be filed. It is a settled rule of construction that where a general power is
conferred or duty enjoined, every particular power necessary for the exercise of the one or
the performance of the other is also conferred (Cooley, Constitutional Limitations, eighth
ed., vol. I, pp. 138, 139). In the absence of any further constitutional provision relating to the
procedure to be followed in filing protests before the Electoral Commission, therefore, the
incidental power to promulgate such rules necessary for the proper exercise of its exclusive
powers to judge all contests relating to the election, returns and qualifications of members
of the National Assembly, must be deemed by necessary implication to have been lodged
also in the Electoral Commission.

Assembly passed its resolution of December 3, 1935, confirming the election of the
petitioner to the National Assembly, the Electoral Commission had not yet met; neither does
it appear that said body had actually been organized. As a matter of fact, according to
certified copies of official records on file in the archives division of the National Assembly
attached to the record of this case upon the petition of the petitioner, the three justices of
the Supreme Court and the six members of the National Assembly constituting the Electoral
Commission were respectively designated only on December 4 and 6, 1936. If Resolution
No. 8 of the National Assembly confirming non-protested elections of members of the
National Assembly had the effect of limiting or tolling the time for the presentation of
protests, the result would be that the National Assembly on the hypothesis that it still
retained the incidental power of regulation in such cases had already barred the
presentation of protests before the Electoral Commission had had time to organize itself
and deliberate on the mode and method to be followed in a matter entrusted to its exclusive
jurisdiction by the Constitution. This result was not and could not have been contemplated,
and should be avoided.

18. ID; ID.; ID.; POSSIBILITY OF ABUSE NO ARGUMENT AGAINST GRANT

OF POWER. The possibility of abuse is not an argument against the concession of the
power as there is no power that is not susceptible of abuse. If any mistake has been
committed in the creation of an Electoral Commission and in investing it with exclusive
jurisdiction in all cases relating to the election, returns, and qualifications of members of the
National Assembly, the remedy is political, not judicial, and must be sought through the
ordinary processes of democracy. All the possible abuses of the government are not
intended to be corrected by the judiciary. The people in creating the Electoral Commission
reposed as much confidence in this body in the exclusive determination of the specified
cases assigned to it, as it has given to the Supreme Court in the proper cases entrusted to
it for decision. All the agencies of the government were designed by the Constitution to
achieve specific purposes, and each constitutional organ working within its own particular
sphere of discretionary action must be deemed to be animated with same zeal and honesty
in accomplishing the great ends for which they were created by the sovereign will. That the
actuations of these constitutional agencies might leave much to be desired in given
instances, is inherent in the imperfections of human institutions. From the fact that the
Electoral Commission may not be interfered with in the exercise of its legitimate power, it
does not follow that its acts, however illegal or unconstitutional, may not be challenged in
appropriate cases over which the courts may exercise jurisdiction.

20. ID.; ID.; ID.; CONFIRMATION BY THE NATIONAL ASSEMBLY CAN NOT
DEPRIVE THE ELECTORAL COMMISSION OF ITS AUTHORITY TO FIX THE TIME
WITHIN WHICH PROTESTS AGAINST THE ELECTION, RETURNS AND
QUALIFICATIONS OF MEMBERS OF THE NATIONAL ASSEMBLY SHOULD BE FILED.
Resolution No. 8 of the National Assembly confirming the election of members against
whom no protests has been filed at the time of its passage on December 3, 1936, can not
be construed as a limitation upon the time for the initiation of election contests. While there
might have been good reason for the legislative practice of confirmation of members of the
Legislature at the time the power to decide election contests was still lodged in the
Legislature, confirmation alone by the Legislature cannot be construed as depriving the
Electoral Commission of the authority incidental to its constitutional power to be "the sole
judge of all contests relating to the election, returns, and qualifications of the members of
the National Assembly", to fix the time for the filing of said election protests. Confirmation
by the National Assembly of the returns of its members against whose election no protests
have been filed is, to all legal purposes, unnecessary. Confirmation of the election of any
member is not required by the Constitution before he can discharge his duties as such
member. As a matter of fact, certification by the proper provincial board of canvassers is
sufficient to entitle a member-elect to a seat in the National Assembly and to render him
eligible to any office in said body (No. 1, par. 1, Rules of the National Assembly, adopted
December 6, 1935).

19. ID.; ID.; ID.; FACTS OF THE CASE; EQUITABLE CONSIDERATIONS.

The Commonwealth Government was inaugurated on November 15, 1935, on which date
the Constitution, except as to the provisions mentioned in section 6 of Article XV thereof,
went into effect. The new National Assembly convened on November 25, of that year, and
the resolution confirming the election of the petitioner was approved by that body on
December 3, 1935. The protest by the herein respondent against the election of the
petitioner was filed on December 9 of the same year. The pleadings do not show when the
Electoral Commission was formally organized but it does appear that on December 9,
1935, the Electoral Commission met for the first time and approved a resolution fixing said
date as the last day for the filing of election protests. When, therefore, the National

21. ID.; EFFECT OF CONFIRMATION UNDER THE JONES LAW. Under the
practice prevailing when the Jones Law was still in force, each House of the Philippine
Legislature fixed the time when protests against the election of any of its members should
be filed. This was expressly authorized by section 18 of the Jones Law making each House
the sole judge of the election, returns and qualifications of its members, as well as by a law
(sec. 478, Act No. 3387) empowering each House respectively to prescribe by resolution
the time and manner of filing contest the election of members of said bodies. As a matter of

26

formality, after the time fixed by its rules for the filing of protests had already expired, each
House passed a resolution confirming or approving the returns of such members against
whose election no protest had been filed within the prescribed time. This was interpreted as
cutting off the filing of further protests against the election of those members not theretofore
contested (Amistad vs. Claravall [Isabela], Second Philippine Legislature, Record First
Period, p. 89; Urgello vs. Rama [Third District, Cebu], Sixth Philippine Legislature; Fetalvero
vs. Festin [Romblon], Sixth Philippine Legislature, Record First Period, pp. 637-640;
Kintanar vs. Aldanese [Fourth District, Cebu], Sixth Philippine Legislature, Record First
Period, pp. 1121, 1122; Aguilar vs. Corpus [Masbate], Eighth Philippine Legislature, Record
First Period, vol. III, No. 56, pp. 892, 893). The Constitution has expressly repealed
section 18 of the Jones Law. Act No. 3387, section 478, must be deemed to have been
impliedly abrogated also, for the reason that with the power to determine all contests
relating to the election, returns and qualifications of members of the National Assembly, is
inseparably linked the authority to prescribe regulations for the exercise of that power.
There was thus no law nor constitutional provision which authorized the National Assembly
to fix, as it is alleged to have fixed on December 3, 1935, the time for the filing of contests
against the election of its members. And what the National Assembly could not do directly,
it could not do by indirection through the medium of confirmation.

(4) That on December 3, 1935, the National Assembly in session assembled,

passed the following resolution:
"[No. 8]
"RESOLUTION CONFIRMANDO LAS ACTAS DE AQUELLOS
DIPUTADOS CONTRAQUIENES NO SE HA PRESENTADO PROTESTA.

"Se resuelve: Que las actas de eleccion de los Diputados

contra quienes no se hubiere presentado debidamente una protesta
antes de la adopcion de la presente resolucion sean, como por la
presente, son aprobadas y confirmadas.
"Adoptada, 3 de diciembre, 1935."
(5) That on December 8, 1935, the herein respondent Pedro Ynsua, filed before
the Electoral Commission a "Motion of Protest" against the election of the herein petitioner,
Jose A. Angara, being the only protest filed after the passage of Resolution No. 8
aforequoted, and praying, among other-things, that said respondent be declared elected
member of the National Assembly for the first district of Tayabas, or that the election of said
position be nullified;

DECISION
LAUREL, J p:
This is an original action instituted in this court by the petitioner, Jose A. Angara,
for the issuance of a writ of prohibition to restrain and prohibit the Electoral Commission,
one of the respondents, from taking further cognizance of the protest filed by Pedro Ynsua,
another respondent, against the election of said petitioner as member of the National
Assembly for the first assembly district of the Province of Tayabas.

(6) That on December 9, 1935, the Electoral Commission adopted a resolution,

paragraph 6 of which provides:
"6. La Comision no considerara ninguna protesta que no se
haya presentado en o antes de este dia."

The facts of this case as they appear in the petition and as admitted by the
respondents are as follows:

(7) That on December 20, 1935, the herein petitioner, Jose A. Angara, one of the
respondents in the aforesaid protest, filed before the Electoral Commission a "Motion to
Dismiss the Protest", alleging (a) that Resolution No. 8 of the National Assembly was
adopted in the legitimate exercise of its constitutional prerogative to prescribe the period
during which protests against the election of its members should be presented; (b) that the
aforesaid resolution has for its object, and is the accepted formula for, the limitation of said
period; and (c) that the protest in question was filed out of the prescribed period;

(1) That in the elections of September 17, 1935, the petitioner, Jose A. Angara,
and the respondents, Pedro Ynsua, Miguel Castillo and Dionisio Mayor, were candidates
voted for the position of member of the National Assembly for the first district of the
Province of Tayabas;
(2) That on October 7, 1935, the provincial board of canvassers, proclaimed the
petitioner as member-elect of the National Assembly for the said district, for having received
the most number of votes;

(8) That on December 27, 1935, the herein respondent, Pedro Ynsua, filed an
"Answer to the Motion of Dismissal" alleging that there is no legal or constitutional provision
barring the presentation of a protest against the election of a member of the National
Assembly, after confirmation;

(3) That on November 15, 1935, the petitioner took his oath of office;

27

(9) That on December 31, 1935, the herein petitioner, Jose A. Angara, filed a
"Reply" to the aforesaid "Answer to the Motion of Dismissal";

granted it by the Constitution to adopt the rules and regulations essential to carry out the
powers and functions conferred upon the same by the fundamental law; that in adopting its
resolution of January 23, 1936, overruling the motion of the petitioner to dismiss the
election protest in question, and declaring itself with jurisdiction to take cognizance of said
protest, it acted in the legitimate exercise of its quasi-judicial functions as an instrumentality
of the Legislative Department of the Commonwealth Government, and hence said act is
beyond the judicial cognizance or control of the Supreme Court;

(10) That the case being submitted for decision, the Electoral Commission
promulgated a resolution on January 23, 1936, denying herein petitioner's "Motion to
Dismiss the Protest."
The application of the petitioner sets forth the following grounds for the issuance
of the writ prayed for:

(b) That the resolution of the National Assembly of December 3, 1935, confirming
the election of the members of the National Assembly against whom no protest had thus far
been filed, could not and did not deprive the Electoral Commission of its jurisdiction to take
cognizance of election protests filed within the time that might be set by its own rules;

(a) That the Constitution confers exclusive jurisdiction upon the Electoral
Commission solely as regards the merits of contested elections to the National Assembly;

(c) That the Electoral Commission is a body invested with quasi- judicial
functions, created by the Constitution as an instrumentality of the Legislative Department,
and is not an "inferior tribunal, or corporation, or board, or person" within the purview of
sections 226 and 516 of the Code of Civil Procedure, against which prohibition would lie.

(b) That the Constitution excludes from said jurisdiction the power to regulate the
proceedings of said election contests, which power has been reserved to the Legislative
Department of the Government or the National Assembly;
(c) That like the Supreme Court and other courts created in pursuance of the
Constitution, whose exclusive jurisdiction relates solely to deciding the merits of
controversies submitted to hem for decision and to matters involving their internal
organization, the Electoral Commission can regulate its proceedings only if the National
Assembly has not availed of its primary power to so regulate such proceedings;

The respondent Pedro Ynsua, in his turn, appeared and filed an answer in his
own behalf on March 2, 1936, setting forth following as his special defense:
(a) That at the time of the approval of the rules of the Electoral Commission on
December 9, 1935, there was no existing Law fixing the period within which protests
against the election of members of the National Assembly, the Electoral Commission was
exercising a power impliedly conferred upon it by the Constitution, by reason of its quasijudicial attributes;

(d) That Resolution No. 8 of the National Assembly is, therefore, valid and should
be respected and obeyed;
(e) That under paragraph 13 of section 1 of the Ordinance appended to the
Constitution and paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of the 73rd
Congress of the United States) as well as under sections 1 and 3 (should be sections 1 and
2) of article VIII of the Constitution, the Supreme Court has jurisdiction to pass upon the
fundamental question herein raised because it involves an interpretation of the Constitution
of the Philippines.

(b) That said respondent presented his motion of protest before the Electoral
Commission on December 9, 1935, the last day fixed by paragraph 6 of the rules of the said
Electoral Commission;
(c) That therefore the Electoral Commission acquired jurisdiction over the protest
filed by said respondent and over the parties thereto, and the resolution of the Electoral
Commission of January 23, 1936, denying petitioner's motion to dismiss said protest was
an act within the jurisdiction of the said commission, and is not reviewable by means of a
writ of prohibition;

On February 25, 1936, the Solicitor-General appeared and filed an answer in

behalf of the respondent Electoral Commission interposing the following special defenses:
(a) That the Electoral Commission has been created by the Constitution as an
instrumentality of the Legislative Department invested with the jurisdiction to decide "all
contests relating to the election, returns, and qualifications of the members of the National
Assembly"; that in adopting its resolution of December 9, 1935, fixing this date as the last
day for the presentation of protests against the election of any member of the National
Assembly, it acted within its jurisdiction and in the legitimate exercise of the implied powers

(d) That neither the law nor the Constitution requires confirmation by the National
Assembly of the election of its members, and that such confirmation does not operate to
limit the period within which protests should be filed as to deprive the Electoral Commission
of jurisdiction over protests filed subsequent thereto;

28

(e) That the Electoral Commission is an independent entity created by the

Constitution, endowed with quasi-judicial functions, whose decisions are final and
unappeallable;

absolutely unrestrained and independent of each other. The Constitution has provided for
an elaborate system of checks and balances to secure coordination in the workings of the
various departments of the government. For example, the Chief Executive under our
Constitution is so far made a check on the legislative power that this assent is required in
the enactment of laws. This, however, is subject to the further check that a bill may become
a law notwithstanding the refusal of the President to approve it, by a vote of two-thirds or
three-fourths, as the case may be, of the National Assembly. The President has also the
right to convene the Assembly in special session whenever he chooses. On the other hand,
the National Assembly operates as a check on the Executive in the sense that its consent
through its Commission on Appointments is necessary in the appointment of certain
officers; and the concurrence of a majority of all its members is essential to the conclusion
of treaties. Furthermore, in its power to determine what courts other than the Supreme
Court shall be established, to define their jurisdiction and to appropriate funds for their
support, the National Assembly controls the judicial department to a certain extent. The
Assembly also exercises the judicial power of trying impeachments. And the judiciary in
turn, with the Supreme Court as the final arbiter, effectively checks the other departments in
the exercise of its power to determine the law, and hence to declare executive and
legislative acts void if violative of the Constitution.

(f) That the Electoral Commission, as a constitutional creation, is not an inferior

tribunal, corporation, board or person, within the terms of sections 226 and 516 of the Code
of Civil Procedure; and that neither under the provisions of sections 1 and 2 of Article II
(should be article VIII) of the Constitution and paragraph 13 of section 1 of the Ordinance
appended thereto could it be subject in the exercise of its quasi-judicial functions to a writ of
prohibition from the Supreme Court;
(g) That paragraph 6 of article 7 of the Tydings-McDuffie Law (No. 127 of the
73rd Congress of the United States) has no application to the case at bar.
The case was argued before us on March 13, 1936. Before it was submitted for
decision, the petitioner prayed for the issuance of a preliminary writ of injunction against the
respondent Electoral Commission which petition was denied "without passing upon the
merits of the case" by resolution of this court of March 21, 1936.
There was no appearance for the other respondents. The issues to be decided in
the case at bar may be reduced to the following two principal propositions:

But in the main, the Constitution has blocked out with deft strokes and in bold
lines, allotment of power to the executive, the legislative and the judicial departments of the
government. The overlapping and interlacing of functions and duties between the several
departments, however, sometimes makes it hard to say just where the one leaves off and
the other begins. In times of social disquietude or political excitement, the great landmarks
of the Constitution are apt to be forgotten or marred, if not entirely obliterated. In cases of
conflict, the judicial department is the only constitutional organ which can be called upon to
determine the proper allocation of powers between the several departments and among the
integral or constituent units thereof.

1. Has the Supreme Court jurisdiction over the Electoral Commission and the
subject matter of the controversy upon the foregoing related facts, and in the affirmative,
2. Has the said Electoral Commission acted without or in excess of its jurisdiction
in assuming to take cognizance of the protest filed against the election of the herein
petitioner notwithstanding the previous confirmation of such election by resolution of the
National Assembly?
We could perhaps dispose of this case by passing directly upon the merits of the
controversy. However, the question of jurisdiction having been presented, we do not feel
justified in evading the issue. Being a case prim impressionis, it would hardly be
consistent with our sense of duty to overlook the broader aspect of the question and leave it
undecided. Neither would we be doing justice to the industry and vehemence of counsel
were we not to pass upon the question of jurisdiction squarely presented to our
consideration.

As any human production, our Constitution is of course lacking perfection and

perfectibility, but as much as it was within the power of our people, acting through their
delegates to so provide, that instrument which is the expression of their sovereignty
however limited, has established a republican government intended to operate and function
as a harmonious whole, under a system of checks and balances, and subject to specific
limitations and restrictions provided in the said instrument. The Constitution sets forth in no
uncertain language the restrictions and limitations upon governmental powers and
agencies. If these restrictions and limitations are transcended it would be inconceivable if
the Constitution had not provided for a mechanism by which to direct the course of
government along constitutional channels, for then the distribution of powers would be mere
verbiage, the bill of rights mere expressions of sentiment, and the principles of good
government mere political apothegms. Certainly, the limitations and restrictions embodied
in our Constitution are real as they should be in any living constitution. In the United States

The separation of powers is a fundamental principle in our system of government.

It obtains not through express provision but by actual division in our Constitution. Each
department of the government has exclusive cognizance of matters within its jurisdiction,
and is supreme within its own sphere. But it does not follow from the fact that the three
powers are to be kept separate and distinct that the Constitution intended them to be

29

where no express constitutional grant is found in their constitution, the possession of this
moderating power of the courts, not to speak of its historical origin and development there,
has been set at rest by popular acquiescence for a period of more than one and a half
centuries. In our case, this moderating power is granted, if not expressly, by clear
implication from section 2 of article VIII of our Constitution.

Commission of December 9, 1935, is mere surplusage and had no effect. But, if as

contended by the respondents, the Electoral Commission has the sole power of regulating
its proceedings to the exclusion of the National Assembly, then the resolution of December
9, 1935, by which the Electoral Commission fixed said date as the last day for filing protests
against the election, returns and qualifications of members of the National Assembly,
should be upheld.

The Constitution is a definition of the powers of government. Who is to determine

the nature, scope and extent of such powers? The Constitution itself has provided for the
instrumentality of the judiciary as the rational way. And when the judiciary mediates to
allocate constitutional boundaries, it does not assert any superiority over the other
departments; it does not in reality nullify or invalidate an act of the legislature, but only
asserts the solemn and sacred obligation assigned to it by the Constitution to determine
conflicting claims of authority under the Constitution and to establish for the parties in an
actual controversy the rights which that instrument secures and guarantees to them. This is
in truth all that is involved in what is termed "judicial supremacy" which properly is the
power of judicial review under the Constitution. Even then, this power of judicial review is
limited to actual cases and controversies to be exercised after full opportunity of argument
by the parties, and limited further to the constitutional question raised or the very lis
mota presented. Any attempt at abstraction could only lead to dialectics and barren legal
questions and to sterile conclusions of wisdom, justice or expediency of legislation. More
than that, courts accord the presumption of constitutionality to legislative enactments, not
only because the legislature is presumed to abide by the Constitution but also because the
judiciary in the determination of actual cases and controversies must reflect the wisdom
and justice of the people as expressed through their representatives in the executive and
legislative departments of the government.

Here is then presented an actual controversy involving as it does a conflict of a

grave constitutional nature between the National Assembly on the one hand, and the
Electoral Commission on the other. From the very nature of the republican government
established in our country in the light of American experience and of our own, upon the
judicial department is thrown the solemn and inescapable obligation of interpreting the
Constitution and defining constitutional boundaries. The Electoral Commission, as we shall
have occasion to refer hereafter, is a constitutional organ, created for a specific purpose,
namely to determine all contests relating to the election, returns and qualifications of the
members of the National Assembly. Although the Electoral Commission may not be
interfered with, when the while acting within the limits of its authority, it does not follow that
it is beyond the reach of the constitutional mechanism adopted by the people and that it is
not subject to constitutional restrictions. The Electoral Commission is not a separate
department of the government, and even if it were, conflicting claims of authority under the
fundamental law between departmental powers and agencies of the government are
necessarily determined by the judiciary in justiciable and appropriate cases. Discarding the
English type and other European types of constitutional government, the framers of our
Constitution adopted the American type where the written constitution is interpreted and
given effect by the judicial department. In some countries which have declined to follow the
American example, provisions have been inserted in their constitutions prohibiting the
courts from exercising the power to interpret the fundamental law. This is taken as a
recognition of what otherwise would be the rule that in the absence of direct prohibition
courts are bound to assume what is logically their function. For instance, the Constitution of
Poland of 1921, expressly provides that courts shall have no power to examine the validity
of statutes (art. 81, chap. IV). The former Austrian Constitution contained a similar
declaration. In countries whose constitutions are silent in this respect, courts have assumed
this power. This is true in Norway, Greece, Australia and South Africa. Whereas, in
Czechoslovakia (arts. 2 and 3, Preliminary Law to Constitutional Charter of the
Czechoslovak Republic, February 29, 1920) and Spain (arts. 121-123, Title IX, Constitution
of the Republic of 1931) especial constitutional courts are established to pass upon the
validity of ordinary laws. In our case, the nature of the present controversy shows the
necessity of a final constitutional arbiter to determine the conflict of authority between two
agencies created by the Constitution. Were we to decline to take cognizance of the
controversy, who will determine the conflict? And if the conflict were left undecided and
undetermined, would not a void be thus created in our constitutional system which may in
the long run prove destructive of the entire framework? To ask these questions is to answer
them. Natura vacuum abhorret, so must we avoid exhaustion in our constitutional system.
Upon principle, reason and authority, we are clearly of the opinion that upon the admitted

But much as we might postulate on the internal checks of power provided in our
Constitution, it ought not the less to be remembered that, in the language of James
Madison, the system itself is not "the chief palladium of constitutional liberty . . . the people
who are authors of this blessing must also be its guardians . . . their eyes must be ever
ready to mark, their voice to pronounce . . . aggression on the authority of their
constitution." In the last and ultimate analysis, then, must the success of our government in
the unfolding years to come be tested in the crucible of Filipino minds and hearts than in
consultation rooms and court chambers.
In the case at bar, the National Assembly has by resolution (No. 8) of December
3, 1935, confirmed the election of the herein petitioner to the said body. On the other hand,
the Electoral Commission has by resolution adopted on December 9, 1935, fixed said date
as the last day for the filing of protests against the election, returns and qualifications of
members of the National Assembly, notwithstanding the previous confirmation made by the
National Assembly as aforesaid. If, as contended by the petitioner, the resolution of the
National Assembly has the effect of cutting off the power of the Electoral Commission to
entertain protests against the election, returns and qualifications of members of the
National Assembly, submitted after December 3, 1935, then the resolution of the Electoral

30

facts of the present case, this court has jurisdiction over the Electoral Commission and the
subject matter of the present controversy for the purpose of determining the character,
scope and extent of the constitutional grant to the Electoral Commission as "the sole judge
of all contests relating to the election, returns and qualifications of the members of the
National Assembly."

appointed by the Committee on Constitutional Guarantees of the Constitutional Convention,

which sub- committee submitted a report on August 30, 1934, recommending the creation
of a Tribunal of Constitutional Security empowered to hear protests not only against the
election of members of the legislature but also against the election of executive officers for
whose election the vote of the whole nation is required, as well as to initiate impeachment
proceedings against specified executive and judicial officers. For the purpose of hearing
legislative protests, the tribunal was to be composed of three justices designated by the
Supreme Court and six members of the house of the legislature to which the contest
corresponds, three members to be designated by the majority party and three by the
minority, to be presided over by the Senior Justice unless the Chief Justice is also a
member in which case the latter shall preside. The foregoing proposal was submitted by the
Committee on Constitutional Guarantees to the Convention on September 15, 1934, with
slight modifications consisting in the reduction of the legislative representation to four
members, that is, two senators to be designated one each from the two major parties in the
Senate and two representatives to be designated one each from the two major parties in
the House of Representatives, and in awarding representation to the executive department
in the persons of two representatives to be designated by the President.

Having disposed of the question of jurisdiction, we shall now proceed to pass

upon the second proposition and determine whether the Electoral Commission has acted
without or in excess of its jurisdiction in adopting its resolution of December 9, 1935, and in
assuming to take cognizance of the protest filed against the election of the herein petitioner
notwithstanding the previous confirmation thereof by the National Assembly on December
3, 1935. As able counsel for the petitioner has pointed out, the issue hinges on the
interpretation of section 4 of Article VI of the Constitution which provides:

"SEC. 4. There shall be an Electoral Commission composed of three Justices of

the Supreme Court designated by the Chief Justice, and of six Members chosen by the
National Assembly, three of whom shall be nominated by the party having the largest
number of votes, and three by the party having the second largest number of votes herein.
The senior Justice in the Commission shall be its Chairman. The Electoral Commission
shall be the sole judge of all contests relating to the election, returns and qualifications of
the members of the National Assembly." It is imperative, therefore, that we delve into the
origin and history of this constitutional provision and inquire into the intention of its framers
and the people who adopted it so that we may properly appreciate its full meaning, import
and significance.

Meanwhile, the Committee on Legislative Power was also preparing its report. As
submitted to the Convention on September 24, 1934, subsection 5, section 5, of the
proposed Article on the Legislative Department, reads as follows:
"The elections, returns and qualifications of the members of
either House and all cases contesting the election of any of their
members shall be judged by an Electoral Commission, constituted, as to
each House, by three members elected by the members of the party
having the largest number of votes therein, three elected by the members
of the party having the second largest number of votes, and as to its
Chairman, one Justice of the Supreme Court designated by the Chief
Justice."

The original provision regarding this subject in the Act of Congress of July 1,
1902 (sec. 7, par. 5) laying down the rule that "the assembly shall be the judge of the
elections, returns, and qualifications of its members", was taken from clause 1 of section 5,
Article I of the Constitution of the United States providing that "Each House shall be the
Judge of the Elections, Returns, and Qualifications of its own Members, . . .." The Act of
Congress of August 29, 1916 (sec. 18, par. 1) modified this provision by the insertion of the
word "sole" as follows: "That the Senate and House of Representatives, respectively, shall
be the sole judges of the elections, returns, and qualifications of their elective
members, . . ." apparently in order to emphasize the exclusive character of the jurisdiction
conferred upon each House of the Legislature over the particular cases therein specified.
This court has had occasion to characterize this grant of power to the Philippine Senate
and House of Representatives, respectively, as "full, clear and complete" (Veloso vs.
Boards of Canvassers of Leyte and Samar [1919], 39 Phil., 886, 888.).

The idea of creating a Tribunal of Constitutional Security with comprehensive

jurisdiction as proposed by the Committee on Constitutional Guarantees which was
probably inspired by the Spanish plan (art. 121, Constitution of the Spanish Republic of
1931), was soon abandoned in favor of the proposition of the Committee on Legislative
Power to create a similar body with reduced powers and with specific and limited
jurisdiction, to be designated as an Electoral Commission. The Sponsorship Committee
modified the proposal of the Committee on Legislative Power with respect to the
composition of the Electoral Commission and made further changes in phraseology to suit
the project of adopting a unicameral instead of a bicameral legislature. The draft as finally
submitted to the Convention on October 26, 1934, reads as follows:

The first step towards the creation of an independent tribunal for the purpose of
deciding contested elections to the legislature was taken by the sub-committee of five

"(6) The elections, returns and qualifications of the Members of

the National Assembly and all cases contesting the election of any of its

31

Members shall be judged by an Electoral Commission, composed of

three members elected by the party having the largest number of votes in
the National Assembly, three elected by the members of the party having
the second largest number of votes, and three justices of the Supreme
Court designated by the Chief Justice, the Commission to be presided
over by one of said justices."

"Mr. VENTURA. But I do not believe that that is sufficient, as we have

observed that for purposes of the auditor, in the matter of
election of a member to a legislative body, because he will not
authorize his pay.
"Mr. ROXAS. Well, what is the case with regards to the municipal
president who is elected? What happens with regards to the
councilors of a municipality? Does anybody confirm their
election? The municipal council does this: it makes a canvass
and proclaims-in this case the municipal council proclaims who
has been elected, and it ends there, unless there is a contest. It
is the same case; there is no need on the part of the Electoral
Commission unless there is a contest. The first clause refers to
the case referred to by the gentleman from Cavite where one
person tries to be elected in place of another who was declared
elected. For example, in a case when the residence of the man
who has been elected is in question, or in case the citizenship
of the man who has been elected is in question.

During the discussion of the amendment introduced by Delegates Labrador,

Abordo, and others, proposing to strike out the whole subsection of the foregoing draft and
inserting in lieu thereof the following: "The National Assembly shall be the sole and
exclusive judge of the elections, returns, and qualifications of the Members", the following
illuminating remarks were made on the floor of the Convention in its session of December
4, 1934, as to the scope of the said draft:
xxx xxx xxx
"Mr. VENTURA. Mr. President, we have a doubt here as to the scope of
the meaning of the first four lines, paragraph 6, page 11 of the
draft, reading: 'The elections, returns and qualifications of the
Members of the National Assembly and all cases contesting the
election of any of its Members shall be judged by an Electoral
Commission, . . ..' I should like to ask from the gentleman from
Capiz whether the election and qualification of the member
whose election is not contested shall also be judged by the
Electoral Commission.

"However, if the assembly desires to annul the power of the

commission, it may do so by certain maneuvers upon its first meeting
when the returns are submitted to the assembly. The purpose is to give to
the Electoral Commission all the powers exercised by the assembly
referring to the elections, returns and qualifications of the members.
When there is no contest, there is nothing to be judged.
"Mr. VENTURA. Then it should be eliminated.

"Mr. ROXAS. If there is no question about the election of the members,

there is nothing to be judged; that is why the word 'judge' is
used to indicate a controversy. If there is no question about the
election of a member, there is nothing to be submitted to the
Electoral Commission and there is nothing to be determined.

"Mr. ROXAS. But that is a different matter, I think Mr. Delegate.

"Mr. CINCO. Mr. President, I have a similar question as that propounded
by the gentleman from Ilocos Norte when I arose a while ago.
However I want to ask more questions from the delegate from
Capiz. This paragraph 6 on page 11 of the draft cites cases
contesting the election as separate from the first part of the
section which refers to elections, returns and qualifications.

"Mr. VENTURA. But does that carry the idea also that the Electoral
Commission shall confirm also the election of those who
election is not contested?.
"Mr. ROXAS. There is no need of confirmation. As the gentleman knows,
the action of the House of Representatives confirming the
election of its members is just a matter of the rules of the
assembly. It is not constitutional. It is not necessary. After a
man files his credentials that be has been elected, that is
sufficient, unless his election is contested.

"Mr. ROXAS. That is merely for the sake of clarity. In fact the cases of
contested elections are already included in the phrase 'the
elections, returns and qualifications.' This phrase 'and
contested elections' was inserted merely for the sake of clarity.

32

"Mr. CINCO. Under this paragraph, may not the Electoral Commission, at
its own instance, refuse to confirm the election of the
members?.

"Mr. ROXAS. Yes, sir: that is the purpose.

"Mr. PELAYO. Mr. President, I would like to be informed if the Electoral
Commission has power and authority to pass upon the
qualifications of the members of the National Assembly even
though that question has not been raised.

"Mr. ROXAS. I do not think so, unless there is a protest.

"Mr. LABRADOR. Mr. President, will the gentleman yield? .

"Mr. ROXAS. I have just said that they have no power, because they can
only judge."

"THE PRESIDENT. The gentleman may yield, if he so desires.

In the same session, the first clause of the aforesaid draft reading "The election,
returns and qualifications of the members of the National Assembly and" was eliminated by
the Sponsorship Committee in response to an amendment introduced by Delegates
Francisco, Ventura, Vinzons, Rafols, Lim, Mumar and others. In explaining the difference
between the original draft and the draft as amended, Delegate Roxas speaking for the
Sponsorship Committee said:

"Mr. ROXAS. Willingly.

"Mr. LABRADOR. Does not the gentleman from Capiz believe that unless
this power is granted to the assembly, the assembly on its own
motion does not have the right to contest the election and
qualification of its members?

xxx xxx xxx

"Mr. ROXAS. I have no doubt but that the gentleman is right. If this draft is
retained as it is, even if two-thirds of the assembly believe that
a member has not the qualifications provided by law, they
cannot remove him for that reason.

"Sr. ROXAS. La diferencia, seor Presidente, consiste solamente en

obviar la objecion apuntada por varios Delegados al efecto to
que la primera clausula del draft que dice: 'The election,
returns and qualifications of the members of the National
Assembly' parece que da a la Comision Electoral la facultad de
determinar tambin la eleccion de los miembros que no han
sido protestados y para obviar esa dificultad, creemos que la
enmienda tiene razon en ese sentido, si enmendamos el draft,
de tal modo que se lea como sigue: 'All cases contesting the
election', de modo que los jueces de la Comision Electoral se
limitaran solamente a los casos en que haya habido protesta
contra las actas." Before the amendment of Delegate Labrador
was voted upon the following interpellation also took place:

Mr. LABRADOR. So that the right to remove shall only be retained by the
Electoral Commission.
"Mr. ROXAS. By the assembly for misconduct.
"Mr. LABRADOR. I mean with respect to the qualification of the members.
"Mr. ROXAS. Yes, by the Electoral Commission.
"Mr. LABRADOR. So that under this draft, no member of the assembly
has the right to question the eligibility of its members?.

"El Sr. CONEJERO. Antes de votarse la enmienda, quisiera pedir

informacion del Subcomit de Siete.

"Mr. ROXAS. Before a member can question the eligibility, he must go to

the Electoral Commission and make the question before the
Electoral Commission.

"El Sr. PRESIDENTE. Qu dice el Comit?.

"El Sr. ROXAS. Con mucho gusto.

"Mr. LABRADOR. So that the Electoral Commission shall decide whether

the election is contested or not contested.

"El Sr. CONEJERO. Tal como esta el draft, dando tres miembros a la
mayoria, y otros tres a la minoria y tres a la Corte Suprema,

33

no cre Su Seoria que esto equivale practicamente a dejar el

asunto a los miembros del Tribunal Supremo?.

"SEC. 4. There shall be an Electoral Commission composed of

three Justices of the Supreme Court designated by the Chief Justice, and
of six Members chosen by the National Assembly, three of whom shall be
nominated by the party having the largest number of votes, and three by
the party having the second largest number of votes therein. The senior
Justice in the Commission shall be its chairman. The Electoral
Commission shall be the sole judge of the election, returns, and
qualifications of the Members of the National Assembly."

"El Sr. ROXAS. Si y no. Cremos que si el tribunal o la Comision esta

constituido en esa forma, tanto los miembros de la mayoria
como los de la minoria asi como los miembros de la Corte
Suprema consideraran la cuestion sobre la base de sus
mritos, sabiendo que el partidismo no es suficiente para dar el
triunfo.

When the foregoing draft was submitted for approval on February 8, 1935, the
Style Committee, through President Recto, to effectuate the original intention of the
Convention, agreed to insert the phrase "All contests relating to" between the phrase "judge
of" and the words "the election", which was accordingly accepted by the Convention.

"El Sr. CONEJERO. Cree Su Seoria que en un caso como ese,

podriamos hacer que tanto los de la mayoria como los de la
minoria prescindieran del partidismo?.

The transfer of the power of determining the election, returns and qualifications of
the members of the legislature long lodged in the legislative body, to an independent,
impartial and non-partisan tribunal, is by no means a mere experiment in the science of
government.

"El Sr. ROXAS. Creo que si, porque el partidismo no les daria el triunfo."
xxx xxx xxx
The amendment introduced by Delegates Labrador, Abordo and others seeking
to restore the power to decide contests relating to the election, returns and qualifications of
members of the National Assembly to the National Assembly itself, was defeated by a vote
of ninety-eight (98) against fifty-six (56).

Cushing, in his Law and Practice of Legislative Assemblies (ninth edition, chapter
VI, pages 57, 58), gives a vivid account of the "scandalously notorious" canvassing of votes
by political parties in the disposition of contests by the House of Commons in the following
passages which are partly quoted by the petitioner in his printed memorandum of March 14,
1936:

In the same session of December 4, 1934, Delegate Cruz (C.) sought to amend
the draft by reducing the representation of the minority party and the Supreme Court in the
Electoral Commission to two members each, so as to accord more representation to the
majority party. The Convention rejected this amendment by a vote of seventy-six (76)
against forty-six (46), thus maintaining the non-partisan character of the commission.

"153. From the time when the commons established their right
to be the exclusive judges of the elections, returns, and qualifications of
their members, until the year 1770, two modes of proceeding prevailed, in
the determination of controverted elections, and rights of membership.
One of the standing committee appointed at the commencement of each
session, was denominated the committee of privileges and elections,
whose function was to hear and investigate all questions of this
description which might be referred to them, and to report their
proceedings, with their opinion thereupon, to the house, from time to time.
When an election petition was referred to this committee, they heard the
parties and their witnesses and other evidence, and made a report of all
the evidence, together with their opinion thereupon, in the form of
resolutions, which were considered and agreed or disagreed to by the
house. The other mode of proceeding was by a hearing at the bar of the
house itself. When this court was adopted, the case was heard and
decided by the house, in substantially the same manner as by a
committee. The committee of privileges and elections although a select
committee was usually what is called an open one; that is to say, in order
to constitute the committee, a quorum of the members named was

As approved on January 31, 1935, the draft was made to read as follows:
"(6) All cases contesting the elections, returns and
qualifications of the Members of the National Assembly shall be judged
by an Electoral Commission, composed of three members elected by the
party having the largest number of votes in the National Assembly, three
elected by the members of the party having the second largest number of
votes, and three justices of the Supreme Court designated by the Chief
Justice, the Commission to be presided over by one of said justices."
The Style Committee to which the draft was submitted revised it as follows:

34

required to be present, but all the members of the house were at liberty to
attend the committee and vote if they pleased.

of the day, and has not been entirely confirmed by subsequent

experience. The bill was objected to by Lord North, Mr. De Grey,
afterwards chief justice of the common pleas, Mr. Ellis, Mr. Dyson, who
had been clerk of the house, and Mr. Charles James Fox, chiefly on the
ground, that the introduction of the new system was an essential
alteration of the constitution of parliament, and a total abrogation of one
of the most important rights and jurisdictions of the house of commons."

"154. With the growth of political parties in parliament questions

relating to the right of membership gradually assumed a political
character; so that for many years previous to the year 1770, controverted
elections had been tried and determined by the house of commons, as
mere party questions, upon which the strength of contending factions
might be tested. Thus, for example, in 1741, Sir Robert Walpole, after
repeated attacks upon his government, resigned his office in
consequence of an adverse vote upon the Chippenham election. Mr.
Hatsell remarks, of the trial of election, cases, as conducted under this
system, that 'Every principle of decency and justice were notoriously and
openly prostituted, from whence the younger part of the house were
insensibly, but too successfully, induced to adopt the same licentious
conduct in more serious matters, and in questions of higher importance to
the public welfare.' Mr. George Grenville, a distinguished member of the
house of commons, undertook to propose a remedy for the evil, and, on
the 7th of March 1770, obtained the unanimous leave of the house to
bring in a bill, 'to regulate the trial of controverted elections, or returns of
members to serve in parliament.' In his speech to explain his plan, on the
motion for leave, Mr. Grenville alluded to the existing practice in the
following terms: 'Instead of trusting to the merits of their respective
causes, the principal dependence of both parties is their private interest
among us; and it is scandalously notorious that we are an earnestly
canvassed to attend in favor of the opposite sides, as if we were wholly
self-elective, and not bound to act by the principles of justice, but by the
discretionary impulse of our own inclinations; nay, it is well known, that in
every contested election, many members of this house, who are
ultimately to judge in a kind of judicial capacity between the competitors,
enlist themselves as parties in the contention, and take upon themselves
the partial management of the very business, upon which they should
determine with the strictest impartiality.'

As early as 1868, the House of Commons in England solved the problem of

insuring the non-partisan settlement of the controverted elections of its members by
abdicating its prerogative to two judges of the King's Bench of the High Court of Justice
selected from a rota in accordance with rules of court made for the purpose. Having proved
successful, the practice has become imbedded in English jurisprudence (Parliamentary
Elections Act, 1868 [31 & 32 Vict. c. 125] as amended by Parliamentary Elections and
Corrupt Practices Act, 1879 [42 & 43 Vict. c. 75], s. 2; Corrupt and Illegal Practices
Prevention Act, 1883 [46 & 47 Vict. c. 51], s. 70; Expiring Laws Continuance Act, 1911 [1 &
2 Geo. 5, c. 22]; Laws of England, vol. XII, p. 408, vol. XXI, p. 787). In the Dominion of
Canada, election contests which were originally heard by the Committee of the House of
Commons, are since 1922 tried in the courts. Likewise, in the Commonwealth of Australia,
election contests which were originally determined by each house, are since 1922 tried in
the High Court. In Hungary, the organic law provides that all protests against the election of
members of the Upper House of the Diet are to be resolved by the Supreme Administrative
Court (Law 22 of 1916, chap. 2, art. 37, par. 6). The Constitution of Poland of March 17,
1921 (art. 19) and the Constitution of the Free City of Danzig of May 13, 1922 (art. 10) vest
the authority to decide contested elections to the Diet or National Assembly in the Supreme
Court. For the purpose of deciding legislative contests, the Constitution of the German
Reich of July 1, 1919 (art. 31), the Constitution of the Czechoslovak Republic of February
29, 1920 (art. 19) and the Constitution of the Grecian Republic of June 2, 1927 (art. 43), all
provide for an Electoral Commission.
The creation of an Electoral Commission whose membership is recruited both
from the legislature and the judiciary is by no means unknown in the United States. In the
presidential elections of 1876 there was a dispute as to the number of electoral votes
received by each of the two opposing candidates. As the Constitution made no adequate
provision for such a contingency, Congress passed a law on January 29, 1877 (United
States Statutes at Large, vol. 19, chap. 37, pp. 227-229), creating a special Electoral
Commission composed of five members elected by the Senate, five members elected by
the House of Representatives, and five justices of the Supreme Court, the fifth justice to be
selected by the four designated in the Act. The decision of the commission was to be
binding unless rejected by the two houses voting separately. Although there is not much of
a moral lesson to be derived from the experience of America in this regard, judging from the
observations of Justice Field, who was a member of that body on the part of the Supreme
Court (Countryman, the Supreme Court of the United States and its Appellate Power under

"155. It was to put an end to the practices thus described, that

Mr. Grenville brought in a bill which met with the approbation of both
houses, and received the royal assent on the 12th of April, 1770. This
was the celebrated law since known by the name of the Grenville Act; of
which Mr. Hatsell declares, that it 'was one of the noblest works, for the
honor of the house of commons, and the security of the constitution, that
was ever devised by any minister or statesman.' It is probable, that the
magnitude of the evil, or the apparent success of the remedy, may have
led many of the contemporaries of the measure to the information of a
judgment, which was not acquiesced in by some of the leading statesmen

35

the Constitution [Albany, 1913]-Relentless Partisanship of Electoral Commission, p. 25 et

seq.), the experiment has at least abiding historical interest.

exercise of that power by the National Assembly. And this is as effective a restriction upon
the legislative power as an express prohibition in the Constitution (Ex parte Lewis, 45 Tex.
Crim. Rep., 1; State vs. Whisman, 36 S. D., 260; L. R. A., 1917B, 1). If we concede the
power claimed in behalf of the National Assembly that said body may regulate the
proceedings of the Electoral Commission and cut off the power of the commission to lay
down the period within which protests should be filed, the grant of power to the commission
would be ineffective. The Electoral Commission in such case would be invested with the
power to determine contested cases involving the election, returns and qualifications of the
members of the National Assembly but subject at all times to the regulative power of the
National Assembly. Not only would the purpose of the framers of our Constitution of totally
transferring this authority from the legislative body be frustrated, but a dual authority would
be created with the resultant inevitable clash of powers from time to time. A sad spectacle
would then be presented of the Electoral Commission retaining the bare authority of taking
cognizance of cases referred to, but in reality without the necessary means to render that
authority effective whenever and wherever the National Assembly has chosen to act, a
situation worse than that intended to be remedied by the framers of our Constitution. The
power to regulate on the part of the National Assembly in procedural matters will inevitably
lead to the ultimate control by the Assembly of the entire proceedings of the Electoral
Commission, and, by indirection, to the entire abrogation of the constitutional grant. It is
obvious that this result should not be permitted.

The members of the Constitutional Convention who framed our fundamental law
were in their majority men mature in years and experience. To be sure, many of them were
familiar with the history and political development of other countries of the world. When,
therefore, they deemed it wise to create an Electoral Commission as a constitutional organ
and invested it with the exclusive function of passing upon and determining the election,
returns and qualifications of the members of the National Assembly, they must have done
so not only in the light of their own experience but also having in view the experience of
other enlightened peoples of the world. The creation of the Electoral Commission was
designed to remedy certain evils of which the framers of our Constitution were cognizant.
Notwithstanding the vigorous opposition of some members of the Convention to its creation,
the plan, as hereinabove stated, was approved by that body by a vote of 98 against 58. All
that can be said now is that, upon the approval of the Constitution, the creation of the
Electoral Commission is the expression of the wisdom and "ultimate justice of the people".
(Abraham Lincoln, First Inaugural Address, March 4, 1861.).
From the deliberations of our Constitutional Convention it is evident that the
purpose was to transfer in its totality all the powers previously exercised by the legislature in
matters pertaining to contested elections of its members, to an independent and impartial
tribunal. It was not so much the knowledge and appreciation of contemporary constitutional
precedents, however, as the long-felt need of determining legislative contests devoid of
partisan considerations which prompted the people, acting through their delegates to the
Convention, to provide for this body known as the Electoral Commission. With this end in
view, a composite body in which both the majority and minority parties are equally
represented to off-set partisan influence in its deliberations was created, and further
endowed with judicial temper by including in its membership three justices of the Supreme
Court.

We are not insensible to the impassioned argument of the learned counsel for the
petitioner regarding the importance and necessity of respecting the dignity and
independence of the National Assembly as a coordinate department of the government and
of according validity to its acts, to avoid what he characterized would be practically an
unlimited power of the commission in the admission of protests against members of the
National Assembly. But as we have pointed out hereinabove, the creation of the Electoral
Commission carried with it ex necesitate rei the power regulative in character to limit the
time within which protests intrusted to its cognizance should be filed. It is a settled rule of
construction that where a general power is conferred or duty enjoined, every particular
power necessary for the exercise of the one or the performance of the other is also
conferred (Cooley, Constitutional Limitations, eighth ed., vol. I, pp. 138, 139). In the
absence of any further constitutional provision relating to the procedure to be followed in
filing protests before the Electoral Commission, therefore, the incidental power to
promulgate such rules necessary for the proper exercise of its exclusive power to judge all
contests relating to the election, returns and qualifications of members of the National
Assembly, must be deemed by necessary implication to have been lodged also in the
Electoral Commission.

The Electoral Commission is a constitutional creation, invested with the

necessary authority in the performance and execution of the limited and specific function
assigned to it by the Constitution. Although it is not a power in our tripartite scheme of
government, it is, to all intents and purposes, when acting within the limits of its authority,
an independent organ. It is, to be sure, closer to the legislative department than to any
other. The location of the provision (section 4) creating the Electoral Commission under
Article VI entitled "Legislative Department" of our Constitution is very indicative. Its
composition is also significant in that it is constituted by a majority of members of the
legislature. But it is a body separate from and independent of the legislature.

It is, indeed, possible that, as suggested by counsel for the petitioner, the
Electoral Commission may abuse its regulative authority by admitting protests beyond any
reasonable time, to the disturbance of the tranquillity and peace of mind of the members of
the National Assembly. But the possibility of abuse is not an argument against the
concession of the power as there is no power that is not susceptible of abuse. In the

The grant of power to the Electoral Commission to judge all contests relating to
the election, returns and qualifications of members of the National Assembly, is intended to
be as complete and unimpaired as if it had remained originally in the legislature. The
express lodging of that power in the Electoral Commission is an implied denial of the

36

second place, if any mistake has been committed in the creation of an Electoral
Commission and in investing it with exclusive jurisdiction in all cases relating to the election,
returns, and qualifications of members of the National Assembly, the remedy is political, not
judicial, and must be sought through the ordinary processes of democracy. All the possible
abuses of the government are not intended to be corrected by the judiciary. We believe,
however, that the people in creating the Electoral Commission reposed as much confidence
in this body in the exclusive determination of the specified cases assigned to it, as they
have given to the Supreme Court in the proper cases entrusted to it for decision. All the
agencies of the government were designed by the Constitution to achieve specific
purposes, and each constitutional organ working within its own particular sphere of
discretionary action must be deemed to be animated with the same zealand honesty in
accomplishing the great ends for which they were created by the sovereign will. That the
actuations of these constitutional agencies might leave much to be desired in given
instances, is inherent in the imperfections of human institutions. In the third place, from the
fact that the Electoral Commission may not be interfered with in the exercise of its legitimate
power, it does not follow that its acts, however illegal or unconstitutional, may not be
challenged in appropriate cases over which the courts may exercise jurisdiction.

jurisdiction by the Constitution. This result was not and could not have been
contemplated,and should be avoided.
From another angle, Resolution No. 8 of the National Assembly confirming the
election of members against whom no protests had been filed at the time of its passage on
December 3, 1935, can not be construed as a limitation upon the time for the initiation of
election contests. While there might have been good reason for the legislative practice of
confirmation of the election of members of the legislature at the time when the power to
decide election contests was still lodged in the legislature, confirmation alone by the
legislature cannot be construed as depriving the Electoral Commission of the authority
incidental to its constitutional power to be "the sole judge of all contests relating to the
election, returns, and qualifications of the members of the National Assembly", to fix the
time for the filing of said election protests. Confirmation by the National Assembly of the
returns of its members against whose election no protests have been filed is, to all legal
purposes, unnecessary. As contended by the Electoral Commission in its resolution of
January 23, 1936, overruling the motion of the herein petitioner to dismiss the protest filed
by the respondent Pedro Ynsua, confirmation of the election of any member is not required
by the Constitution before he can discharge his duties as such member. As a matter of fact,
certification by the proper provincial board of canvassers is sufficient to entitle a memberelect to a seat in the National Assembly and to render him eligible to any office in said body
(No. 1, par. 1, Rules of the National Assembly, adopted December 6, 1935).

But independently of the legal and constitutional aspects of the present case,
there are considerations of equitable character that should not be overlooked in the
appreciation of the intrinsic merits of the controversy. The Commonwealth Government was
inaugurated on November 15, 1935, on which date the Constitution, except as to the
provisions mentioned in section 6 of Article XV thereof, went into effect. The new National
Assembly convened on November 25th of that year, and the resolution confirming the
election of the petitioner, Jose A. Angara, was approved by that body on December 3,
11935. The protest by the herein respondent Pedro Ynsua against the election of the
petitioner was filed on December 9 of the same year. The pleadings do not show when the
Electoral Commission was formally organized but it does appear that on December 9,
1935, the Electoral Commission met for the first time and approved a resolution fixing said
date as the last day for the filing of election protests. When, therefore, the National
Assembly passed its resolution of December 3, 1935, confirming the election of the
petitioner to the National Assembly, the Electoral Commission had not yet met; neither does
it appear that said body has actually been organized. As a matter of fact, according to
certified copies of official records on file in the archives division of the National Assembly
attached to the record of this case upon the petition of the petitioner, the three justices of
the Supreme Court and the six members of the National Assembly constituting the Electoral
Commission were respectively designated only on December 4 and 6, 1935. If Resolution
No. 8 of the National Assembly confirming non-protested elections of members of the
National Assembly had the effect of limiting or tolling the time for the presentation of
protests, the result would be that the National Assembly on the hypothesis that it still
retained the incidental power of regulation in such cases had already barred the
presentation of protests before the Electoral Commission had had time to organize itself
and deliberate on the mode and method to be followed in a matter entrusted to is exclusive

Under the practice prevailing both in the English House of Commons and in the
Congress of the United States, confirmation is neither necessary in order to entitle a
member-elect to take his seat. The return of the proper election officers in sufficient, and the
member-elect presenting such return begins to enjoy the privileges of a member from the
time that he takes his oath of office (Laws of England, vol. 12, pp. 331, 332; vol. 21, pp.
694, 695; U. S. C. A., Title 2, secs. 21, 25, 26). Confirmation is in order only in cases of
contested elections where the decision is adverse to the claims of the protestant. In
England, the judges' decision or report in controverted elections is certified to the Speaker
of the House of Commons, and the House, upon being informed of such certificate or report
by the Speaker, is required to enter the same upon the Journals, and to give such directions
for confirming or altering the return, or for the issue of a writ for a new election, or for
carrying into execution the determination as circumstances may require (31 & 32 Vict., c.
125, sec. 13). In the United States, it is believed, the order or decision of the particular
house itself is generally regarded as sufficient, without any actual alteration or amendment
of the return (Cushing, Law and Practice of Legislative Assemblies, 9th ed., sec. 166).
Under the practice prevailing when the Jones Law was still force, each house of
the Philippine Legislature fixed the time when protests against the election of any of its
members should be filed. This was expressly authorized by section 18 of the Jones Law
making each house the sole judge of the election, returns and qualifications of its members,
as well as by a law (sec. 478, Act No. 3387) empowering each house to respectively
prescribe by resolution the time and manner of filing contest in the election of members of

37

said bodies. As a matter of formality, after the time fixed by its rules for the filing of protests
had already expired, each house passed a resolution confirming or approving the returns of
such members against whose election no protests had been filed within the prescribed
time. This was interpreted as cutting off the filing of further protests against the election of
those members not theretofore contested (Amistad vs. Claravall [Isabela], Second
Philippine Legislature, Record-First Period, p. 89; Urgello vs. Rama [Third District, Cebu],
Sixth Philippine Legislature; Fetalvero vs. Festin [Romblon], Sixth Philippine Legislature,
Record First Period, pp. 637-640; Kintanar vs. Aldanese [Fourth District, Cebu], Sixth
Philippine Legislature, Record-First Period, pp. 1121, 1122; Aguilar vs. Corpus [Masbate],
Eighth Philippine Legislature, Record-First Period, vol. III, No. 56, pp. 892, 893). The
Constitution has repealed section 18 of the Jones Law. Act No. 3387, section 478, must be
deemed to have been impliedly abrogated also, for the reason that with the power to
determine all contests relating to the election, returns and qualifications of members of the
National Assembly, is inseparably linked the authority to prescribe regulations for the
exercise of that power. There was thus no law nor constitutional provision which authorized
the National Assembly to fix, as it is alleged to have fixed on December 3, 1935, the time
for the filing of contests against the election of its members. And what the National
Assembly could not do directly, it could not do by indirection through the medium of
confirmation.

(f) That the Electoral Commission is the sole judge of all contests relating to the
election, returns and qualifications of members of the National Assembly.
(g) That under the organic law prevailing before the present Constitution went
into effect, each house of the legislature was respectively the sole judge of the elections,
returns, and qualifications of their elective members.
(h) That the present Constitution has transferred all the powers previously
exercised by the legislature with respect to contests relating to the election, returns and
qualifications of its members, to the Electoral Commission.
(i) That such transfer of power from the legislature to the Electoral Commission
was full, clear and complete, and carried with it ex necesitate rei the implied power inter alia
to prescribe the rules and regulations as to the time and manner of filing protests.
(j) That the avowed purpose in creating the Electoral Commission was to have an
independent constitutional organ pass upon all contests relating to the election, returns and
qualifications of members of the National Assembly, devoid of partisan influence or
consideration, which object would be frustrated if the National Assembly were to retain the
power to prescribe rules and regulations regarding the manner of conducting said contests.

Summarizing, we conclude:

(k) That section 4 of article VI of the Constitution repealed not only section 18 of
the Jones Law making each house of the Philippine Legislature respectively the sole judge
of the elections, returns and qualifications of its elective members, but also section 478 of
Act No. 3387 empowering each house to prescribe by resolution the time and manner of
filing contests against the election of its members, the time and manner of notifying the
adverse party,and bond or bonds, to be required, if any, and to fix the costs and expenses
of contest.

(a) That the government established by the Constitution follows fundamentally

the theory of separation of powers into the legislative, the executive and the judicial.
(b) That the system of checks and balances and the overlapping of functions and
duties often makes difficult the delimitation of the powers granted.
(c) That in cases of conflict between the several departments and among the
agencies thereof, the judiciary, with the Supreme Court as the final arbiter, is the only
constitutional mechanism devised finally to resolve the conflict and allocate constitutional
boundaries.

(l) That confirmation by the National Assembly of the election of any member,
irrespective of whether his election is contested or not, is not essential before such
member-elect may discharge the duties and enjoy the privileges of a member of the
National Assembly.

(d) That judicial supremacy is but the power of judicial review in actual and
appropriate cases and controversies, and is the power and duty to see that no one branch
or agency of the government transcends the Constitution, which is the source of all
authority.

(m) That confirmation by the National Assembly of the election of any member
against whom no protest had been filed prior to said confirmation, does not and cannot
deprive the Electoral Commission of its incidental power to prescribe the time within which
protest against the election of any member of the National Assembly should be filed.
We hold, therefore, that the Electoral Commission was acting within the
legitimate exercise of its constitutional prerogative in assuming to take cognizance of the
protest filed by the respondent Pedro Ynsua against the election of the herein petitioner
Jose A. Angara, and that the resolution of the National Assembly of December 3, 1935 can

(e) That the Electoral Commission is an independent constitutional creation with

specific powers and functions to execute and perform, closer for purposes of classification
to the legislative than to any of the other two departments of the government.

38

Alejo Mabanag, Jose O. Vera, Jesus G. Barrera, Felix-berto Serrano, J. Antonio

Araneta, Antonio Barredo, and Jose W. Diokno for petitioners.

not in any manner toll the time for filing protests against the election, returns and
qualifications of members of the National Assembly, nor prevent the filing of a protest within
such time as the rules of the Electoral Commission might prescribe.

Secretary of Justice Ozaeta, Solicitor General Taada, and First Assistant

Solicitor General Reyes for respondents.

In view of the conclusion reached by us relative to the character of the Electoral

Commission as a constitutional creation and as to the scope and extent of its authority
under the facts of the present controversy, we deem it unnecessary to determine whether
the Electoral Commission is an inferior tribunal, corporation, board or person within the
purview of sections 226 and 516 of the Code of Civil Procedure.

SYLLABUS
1. COURTS; JURISDICTION; CONCLUSIVENESS OF ENACTMENT OR
RESOLUTION DISTINGUISHED FROM. Jurisdiction, which is a matter of substantive
law, should not be confused with conclusiveness of an enactment or resolution, which is a
matter of evidence and practice.

The petition for a writ of prohibition against the Electoral Commission is hereby
denied, with costs against the petitioner. So ordered.
Avancea, C.J., Diaz, Concepcion and Horrilleno, JJ., concur.

2. CONSTITUTIONAL AND POLITICAL LAW; JUDICIARY; POLITICAL

QUESTIONS NOT WITHIN PROVINCE OF. Political questions are not within the
province of the judiciary, except to the extent that power to deal with such questions has
been conferred upon the courts by express constitutional or statutory provisions.

||| (Angara v. Electoral Commission, G.R. No. 45081, [July 15, 1936], 63 PHIL 139-187)

3. ID.; ID.; ID.; PROPOSAL OF CONSTITUTIONAL AMENDMENT A POLITICAL

QUESTION. If ratification of a constitutional amendment is a political question, a
proposal which leads to ratification has to be a political question. The two steps
complement each other in a scheme intended to achieve a single objective. It is to be noted
that the amendatory process as provided in section 1 of Article XV of the Philippine
Constitution "consists of (only) two distinct parts: proposal and ratification." There is no
logic in attaching political character to one and with-holding that character from the other.
Proposal to amend the Constitution is a highly politics function performed by the Congress
in its sovereign legislative capacity and committed to its charge by the Constitution itself.
The exercise of this power is even independent of any intervention by the Chief Executive. If
on grounds of expediency scrupulous attention of the judiciary be needed to safeguard
public interest, there is less reason for judicial inquiry into the validity of a proposal than into
that of a ratification.
4. EVIDENCE;
DULY
AUTHENTICATED
BILL
OR
RESOLUTION,
CONCLUSIVENESS OF. A duly authenticated bill or resolution imports absolute verity
and is binding on the courts. The rule conforms to the policy of the law making body as
expressed in section 313 of the old Code of Civil Procedure, as amended by Act No. 2210.
EN BANC

DECISION

[G.R. No. L-1123. March 5, 1947.]

TUASON, J p:

ALEJO MABANAG, ET AL., petitioners, vs. JOSE LOPEZ VITO, ET

AL.,respondents.

39

This is a petition for prohibition to prevent the enforcement of a congressional

resolution designated "Resolution of both houses proposing an amendment to the
Constitution of the Philippines to be appended as an ordinance thereto." The members of
the Commission on Elections, the Treasurer of the Philippines, the Auditor General, and the
Director of the Bureau of Printing are made defendants, and the petitioners are eight
senators, seventeen representatives, and the presidents of the Democratic Alliance, the
Popular Front and the Philippine Youth Party. The validity of the above-mentioned resolution
is attacked as contrary to the Constitution.

It is a doctrine too well established to need citation of authorities, that political

questions are not within the province of the judiciary, except to the extent that power to deal
with such questions has been conferred upon the courts by express constitutional or
statutory provision. (16 C. J.S 431.) This doctrine is predicated on the principle of the
separation of powers, a principle also too well known to require elucidation or citation of
authorities. The difficulty lies in determining what matters fall within the meaning of political
question. The term is not susceptible of exact definition, and precedents and authorities are
not always in full harmony as to the scope of the restrictions, on this ground, on the courts
to meddle with the actions of the political departments of the government.

The case was heard on the pleadings and stipulation of facts. In our view of the
case it is unnecessary to go into the facts at length. We will mention only the facts essential
for the proper understanding of the issues. For this purpose it suffices to say that three of
the plaintiff senators and eight of the plaintiff representatives had been proclaimed by a
majority vote of the Commission on Elections as having been elected senators and
representatives in the elections held on April 23, 1946. The three senators were suspended
by the Senate shortly after the opening of the first session of Congress following the
elections, on account of alleged irregularities in their election. The eight representatives
since their election had not been allowed to sit in the lower House, except to take part in the
election of the Speaker, for the same reason, although they had not been formally
suspended. A resolution for their suspension had been introduced in the House of
Representatives, but that resolution had not been acted upon definitely by the House when
the present petition was filed.

But there is one case approaching this in its circumstances: Coleman vs. Miller, a
relatively recent decision of the United States Supreme Court reported and annotated in
122 A. L. R., 695. That case, by a majority decision delivered by Mr. Chief Justice Hughes,
is authority for the conclusion that the efficacy of ratification by state legislature of a
proposed amendment to the Federal Constitution is a political question and hence not
justiciable. The Court further held that the decision by Congress, in its control of the
Secretary of State, of the questions of whether an amendment has been adopted within a
reasonable time from the date of submission to the state legislature, is not subject to review
by the court.
If ratification of an amendment is a political question, a proposal which leads to
ratification has to be a political question. The two steps complement each other in a
scheme intended to achieve a single objective. It is to be noted that the amendatory
process as provided in section I of Article XV of the Philippine Constitution "consists of
(only) two distinct parts: proposal and ratification." There is no logic in attaching political
character to one and withholding that character from the other. Proposal to amend the
Constitution is a highly political function performed by the Congress in its sovereign
legislative capacity and committed to its charge by the Constitution itself. The exercise of
this power is even in dependent of any intervention by the Chief Executive. If on grounds of
expediency scrupulous attention of the judiciary be needed to safeguard public interest,
there is less reason for judicial inquiry into the validity of a proposal then into that of a
ratification. As the Mississippi Supreme Court has once said:

As a consequence these three senators and eight representatives did not take
part in the passage of the questioned resolution, nor was their membership reckoned within
the computation of the necessary three-fourths vote which is required in proposing an
amendment to the Constitution. If these members of Congress had been counted, the
affirmative votes in favor of the proposed amendment would have been short of the
necessary three-fourths vote in either branch of Congress.
At the threshold we are met with the question of the jurisdiction of this Court. The
respondents deny that this Court has jurisdiction, relying on the conclusiveness on the
courts of an enrolled bill or resolution. There is some merit in the petitioners' contention that
this is confusing jurisdiction, which is a matter of substantive law, with conclusiveness of an
enactment or resolution, which is a matter of evidence and practice. This objection,
however, is purely academic. Whatever distinction there is in the juridical sense between
the two concepts, in practice and in their operation they boil down to the same thing.
Basically the two notions are synonymous in that both are founded on the regard which the
judiciary accords a co-equal coordinate, and independent departments of the Government.
If a political question conclusively binds the judges out of respect to the political
departments, a duly certified law or resolution also binds the judges under the "enrolled bill
rule" born of that respect.

There is nothing in the nature of the submission which should

cause the free exercise of it to be obstructed, or that could render it
dangerous to the stability of the government; because the measure
derives all its vital force from the action of the people at the ballot box ,
and there can never be danger in submitting in an established form, to a
free people, the proposition whether they will change their fundamental
law. The means provided for the exercise of their sovereign right of
changing their constitution should receive such a construction as not to
trammel the exercise of the right. Difficulties and embarrassments in its
exercise are in derogation of the right of free government, which is
inherent in the people; and the best security against tumult and revolution

40

is the free and unobstructed privilege to the people of the State to change
their constitution in the mode prescribed by the instrument."
(Green vs. Weller, 32 Miss., 650; note, 10 L. R. A., N. S., 150.)

"The Court here treats the amending process of the

Constitution in some respects as subject to judicial construction, in others
as subject to the final authority of the Congress. There is no disapproval
of the conclusion arrived at in Drillon vs. Gloss, that the Constitution
impliedly requires that a properly submitted amendment must die unless
ratified within a 'reasonable time.' Nor does the Court now disapprove its
prior assumption of power to make such a pronouncement. And it is not
made clear that only Congress has constitutional power to determine if
there is any such implication in Article 5 of the Constitution. On the other
hand, the Court's opinion declares that Congress has the exclusive power
to decide the 'political questions' of whether a State whose legislation has
once acted upon a proposed amendment may subsequently reverse its
position, and whether, in the circumstances of such a case as this, an
amendment is dead because an 'unreasonable' time has elapsed. No
such division between the political and judicial branches of the
government is made by Article 5 which grants power over the amending
of the Constitution to Congress alone. Undivided control of that process
has been given by the Article exclusively and completely to Congress.
The process itself is 'political' in its entirety, from submission until an
amendment becomes part of the Constitution, and is not subject to
judicial guidance, control or interference at any point."

Mr. Justice Black, in a concurring opinion joined in by Justices Roberts,

Flankfurter and Douglas, in Miller vs. Coleman, supra, finds no basis for discriminating
between proposal and ratification. From his forceful opinion we quote the following
paragraphs:
"The Constitution grant Congress exclusive power to control
submission of constitutional amendments. Final determination by
Congress that ratification by three-fourths of the States has taken place
'is conclusive upon the courts.' In the exercise of that power, Congress, of
course, is governed by the Constitution. However, whether submission,
intervening procedure or Congressional determination of ratification
conforms to the commands of the Constitution, call for decisions by a
'political department' of questions of a type which this Court has
frequently designated 'political.' And decision of a 'political question' by
the 'political department' to which the Constitution has committed it
'conclusively binds the judges, as well as all other officers, citizens and
subjects of . . . government.' Proclamation under authority of Congress
that an amendment has been ratified will carry with it a solemn assurance
by the Congress that ratification has taken place as the Constitution
commands. Upon this assurance a proclaimed amendment must be
accepted as a part of the Constitution, leaving to the judiciary its
traditional authority of interpretation. To the extent that the Court's opinion
in the present case even impliedly assumes a power to make judicial
interpretation of the exclusive constitutional authority of Congress over
submission and ratification of amendments, we are unable to agree.

Mr. Justice Frankfurter, in another concurring opinion to which the other three
justices subscribed, arrives at the same conclusion. Though his thesis was the petitioner's
lack of standing in court a point which not having been raised by the parties herein we
will not decide his reasoning inevitably extends to a consideration of the nature of the
legislative proceeding the legality of which the petitioners in that case assailed. From a
different angle he sees the matter as political. saying:
"The right of the Kansas senators to be here is rested on
recognition by Leser vs. Garnett, 258 U. S., 130; 66 Law. ed., 505; 42 S.
Ct., 217, of a voter's right to protect his franchise. The historic source of
this doctrine and the reasons for it were explained in Nixon vs. Herndon,
273 U. S., 536, 540; 71 Law. ed., 759, 761; 47 S. Ct., 446. That was an
action for $5,000 damages against the Judges of Elections- for refusing
to permit the plaintiff to vote at a primary election in Texas. In disposing of
the objection that the plaintiff had no cause of action because the subject
matter of the suit was political, Mr. Justice Holmes thus spoke for the
Court: 'Of course the petition concerns political action, but it alleges and
seeks to recover for private damage. That private damage may be caused
by such political action and may be recovered for in a suit at law hardly
has been doubted for over two hundred years, since Ashby White, 2 Ld.
Raym., 938; 92 Eng. Reprint, 126; 1 Eng. Rul. Cas., 521; 3 Ld. Raym.,
320; 92 Eng. Reprint, 710, and has been recognized by this Court.'

"The State court below assumed jurisdiction to determine

whether the proper procedure is being followed between submission and
final adoption. However, it is apparent that judicial review of or
pronouncements upon a supposed limitation of a 'reasonable time' within
which Congress may accept ratification; as to whether duly authorized
State officials have proceeded properly in ratifying or voting for
ratification; or whether a State may reverse its action once taken upon a
proposed amendment; and kindred questions, are all consistent only with
an ultimate control over the amending process in the courts. And this
must inevitably embarrass the course of amendment by subjecting to
judicial interference matters that we believe were entrusted by the
Constitution solely to the political branch of government.

41

'Private damage' is the clue to the famous ruling in Ashby vs. White,
supra, and determines its scope as well as that of cases in this Court of
which it is the justification. The judgment of Lord Holt is permeated with
the conception that a voter's franchise is a personal right, assessable in
money damage of which the exact amount 'is peculiarly appropriate for
the determination of a jury,' see Wileyvs. Sinkler, 179 U. S., 58, 6a; 45
Law. ed., 84, 88; 21 S. Ct., 17, and for which there is no remedy outside
the law courts. 'Although this matter relates to the parliament,' said Lord
Holt, 'yet it is an injury precedaneous to the parliament, as my Lord Hale
said in the case of Bernardiston vs. Some, 2 Lev., 114, 116; 83 Eng.
Peprint, 475. The parliament cannot judge of this injury, nor give damage
to the plaintiff for it: they cannot make him a recompense.' (2 Ld. Raym.,
938, 958; 92 Eng. Reprint, 126; 1 Eng. Rul. Cas., 521. )

But these concurring opinions have more than persuasive value. As will be
presently shown, they are the opinions which should operate to adjudicate the questions
raised by the pleadings. To make the point clear, it is necessary, at the risk of unduly
lengthening this decision, to make a statement and an analysis of the Colemanvs. Miller
case. Fortunately, the annotation on that case in the American Law Reports, supra, comes
to our aid and lightens our labor in this phase of the controversy.
Coleman vs. Miller was an original proceeding in mandamus brought in the
Supreme Court of Kansas by twenty-one members of the Senate, including twenty senators
who had voted against a resolution ratifying the Child Labor Amendment, and by three
members of the House of representatives, to compel the Secretary of the Senate to erase
an indorsement on the resolution to the effect that it had been adopted by the Senate and
to indorse thereon the words "as not passed They sought to restrain the offices of the
Senate and House of Representatives from signing the resolution, and the Secretary of
State of Kansas from authenticating it and delivering it to the Governor.

"The reasoning of Ashby vs. White and the practice which has
followed it leave intra-parliamentary controversies to parliaments and
outside the scrutiny of law courts. The procedures for voting in legislative
assemblies who are members, how and when they should vote, what
is the requisite number of votes for different phases of legislative activity,
what votes were cast and how they were counted surely are matters
that not merely concern political action but are of the very essence of
political action, if 'political' has any connotation at all. Marshall Field &
Co. vs. Clark, 143 U. S., 649, 670, et seq.; 36 Law. ed., 294, 302; 12 S.
Ct., 495; Leser V8. Garnett, 268 U. S., 130, 137; 66 Law. ed., 505, 511;
42 S. Ct., 217. In no sense are they matters of private damage.' They
pertain to legislators not as individuals but as political representatives
executing the legislative process. To open the law courts to such
controversies is to have courts sit in judgment on the manifold disputes
engendered by procedures for voting in legislative assemblies. If the
doctrine of Ashby vs. White indicating the private rights of a voting citizen
has not been doubted for over two hundred years, it is equally significant
that for over two hundred years Ashby vs. White has not been sought to
be put to purposes like the present. In seeking redness here these
Kansas senators have wholly misconceived the functions of this Court.
The writ of certiorari to the Kansas Supreme Court should therefore he
dismissed."

The background of the petition appears to have been that the Child Labor
Amendment was proposed by Congress ill June, 1924; that in January, 1925, the
legislature of Kansas adopted a resolution rejecting it and a copy of the ,resolution was sent
to the Secretary of State of the United States; that in January, 1927, a new resolution was
introduced in the Senate of Kansas ratifying the proposed amendment; that there were forty
senators, twenty of whom voted for and twenty against the resolution; and that as a result of
the tie, the Lieutenant Governor cast his vote in favor of the resolution.
The power of the Lieutenant Governor to vote was challenged, and the petition
set forth the prior rejection of the proposed amendment and alleged that in the period from
June 1924 to March 1927, the proposed amendment had been r ejected by both houses of
the legislatures of twenty-six states and had been ratified only in five states, and that by
reason of that rejection and the failure of ratification within a reasonable time, the proposed
amendment had lost its vitality.
The Supreme Court of Kansas entertained jurisdiction of all the issues but
dismissed the petition on the merits. When the case reached the Supreme Court of the
United States the questions were framed substantially in the following manner:
First, whether the court had jurisdiction; that is, whether the petitioners had
standing to seek to have the judgment of the state court reversed; second, whether the
Lieutenant Governor had the right to vote in case of a tie, as he did, it being the contention
of the petitioners that "in the light of the powers and duties of the Lieutenant Governor and
his relation to the Senate under the state Constitution, as construed by the Supreme Court
of the state, the Lieutenant Governor was not a part of the 'legislature' so that under Article
5 of the Federal Constitution, he could be permitted to have a deciding vote on the
ratification of the proposed amendment, when the Senate was equally divided"; and third,

We share the foregoing views. In our judgment they accord with sound principles
of political jurisprudence and represent liberal and advanced thought on the working of
constitutional and popular government as conceived in the fundamental law. Taken as
persuasive authorities, they offer enlightening understanding of the spirit of the United
States institutions after which ours are patterned.

42

the effect of the previous rejection of the amendment and of the lapse of time after its
submission.

queries "whether the proper procedure for the Supreme Court could not have been to
reverse the judgment below and direct dismissal of the suit for want of jurisdiction.'' It says
that these divergencies and line-ups of the justices "leave power to dictate the result and
the grounds upon which the decision should be rested with the four justices who concurred
in Mr. Justice Black's opinion." Referring to the failure of the Court to decide the question of
the right of the Lieutenant Governor to vote, the article points out that from the opinions
rendered the "equally divided" court would seem under any circumstances to be an equal
division of an odd number of justices, and ask "What really did happen? Did a justice refuse
to vote only this issue? And ;f he did, was it because he could not make up his mind, or is it
possible to saw a justice vertical in half during the conference and have him walk away
whole?" But speaking in a more serious vein, the commentator says that decision of the
issue could not be avoided on grounds of irrelevance, since if the court had jurisdiction of
the case, decision of the issue in favor of the petitioners would have required reversal of the
judgment below regardless of the disposal of the other issues.

The first question was decided in the affirmative. The second question, regarding
the authority of the Lieutenant Governor to vote, the court avoided, stating:. Whether this
contention presents a justiciable controversy, or a question which is political in its nature
and hence not justiciable, is a question upon which the Court is equally divided and
therefore the court expresses no opinion upon that point." On the third question, the Court
reached the conclusion before referred to, namely, (1) that the efficacy of ratification by
state legislature of a proposed amendment to the Federal Constitution is a political
question, within the ultimate power of Congress in the exercise of its control and of the
promulgation of the adoption of amendment, and (2) that the decision by Congress, in its
control of the action of the Secretary of State, of the questions whether an amendment to
the Federal Constitution has been adopted within a reasonable time, is not subject to
review by the court.

From this analysis the conclusion is that the concurring opinions should be
considered as laying down the rule of the case.
The respondent's other chief reliance is on the contention that a duly
authenticated bill or resolution imports absolute verity and is binding on the courts. This is
the rule prevailing in England. In the United States, "In point of numbers, the jurisdictions
are divided almost equally and con the general principle (of these, two or three have
changed from their original position), two or three adopted a special variety of view (as in
Illinois), three or four are not clear, and one or two have not yet made their decisions." (IV
Wigmore on Evidence, 3d Edition, 685, footnote.) It is important to bear in mind, in this
connection, that the United States Supreme Court is on the side of those which favor the
rule. (Harwood vs. Wentworth, 40 Law. ed., 1069; Lyon vs. Wood, 38 Law. ed., 854;
Field vs. Clark, 36 Law. ed., 294.)

The net result was that the judgment of the Supreme Court of Kansas was
affirmed but on the grounds stated in the United States Supreme Court's decision. The nine
justices were aligned in three groups. Justices Roberts, Black, Frankfurter and Douglas
opined that the petitioners had no personality to bring the petition and that all the questions
raised are political and nonjusticiable. Justices Butler and McReynolds opined that all the
questions were justiciable; that the Court had jurisdiction of all such questions, and that the
petition should have been granted and the decision of the Supreme Court of Kansas
reversed on the ground that the proposal to amend had died of old age. The Chief Justice,
Mr. Justice Stone and Justice Reed regarded some of the issues as political and
nonjusticiable, passed by the question of the authority of the Lieutenant Governor to cast a
deciding vote, on the ground that the Court was equally divided, and took jurisdiction of the
rest of the questions.

If for no other reason than that it conforms to the expressed policy of our law
making body, we choose to follow the rule. Section 313 of the old Code of Civil Procedure,
as amended by Act No. 2210, provides: "Official documents may be proved as follows: . . .
(2) the proceedings of the Philippine Commission, or of any legislatives body that may be
provided for in the Philippine Islands, or of Congress, by the journals of those bodies or of
either house thereof, or by published statutes or resolutions, or by copies certified by the
clerk of secretary, or printed by their order; Provided, That in the case of Acts of the
Philippine Commission or the Philippine Legislature, when there is an existence of a copy
signed by the presiding officers and secretaries of said bodies, it shall be conclusive proof
of the provisions of such Acts and of the due enactment thereof."

The sole common ground between Ml. Justice Butler and Mr. Justice
McReynolds, on the one hand, and the Chief Justice, Mr. Justice Stone and Mr. Justice
Reed, on the other, was on the question of jurisdiction; on the result to be reached, these
two groups were divided. The agreement between Justices Roberts, Black, Frankfurter and
Douglas, on the one hand, and the Chief Justice and Justices Stone and Reed, on the
other, was on the result and on that part of the decision which declares certain questions
political and nonjusticiable.
As the annotator in American Law Reports observes, the foregoing four opinions
"show interestingly divergent but confusing positions of the Justices on the issues
discussed." It cites an article in 48 Yale Law Journal, 1466, amusing entitled "Sawing a
Justice in Half," which, in the light of the divergencies in the opinions rendered, aptly

But there is more than statutory sanction for conclusiveness.

43

This topic has been the subject of a great number of decisions and
commentaries written with evident vehemence. Arguments for and against the rule have
been extensive and exhaustive. It would be presumptuous on our part to pretend to add
more, even if we could, to what has already been said. With such vast mass of cases to
guide our ,judgment and discretion, our labor is reduced to an intelligent selection and
borrowing of materials and arguments under the criterion of adaptability to a sound public
policy.

Court, but to all statutes; not only to laws which have been recently
passed, but to laws the most ancient. To my mind, nothing can be more
certain than that the acceptance of this doctrine by the Court would
unsettle the entire statute law of the State. We have before us some
evidence of the little reliability of these legislative journal . . . Can any one
deny that if the laws of the State are to be tested by a comparison with
these journals, so imperfect, so unauthenticated, the stability of all written
law will be shaken to its very foundations? . . . We are to remember the
danger, under the prevalence of such a doctrine, to be apprehended from
the intentional corruption of evidences of this character. It is scarcely too
much to say that the legal existence of almost every legislative act would
be at the mercy of all persons having access to these journals. . . .
( [1866], Beasley, C. J., in Pangborn vs. Young, 32 N. J. L., 29, 34.)

The reasons adduced in support of enrollment as contrasted with those which

opposed it are, in our opinion, almost decisive. Some of these reasons are summarized in
50 American Jurisprudence, section 150 as follows:
"Sec. 150. Reasons for Conclusiveness. It has been
declared that the rule against going behind the enrolled bill is required by
the respect due to a coequal and independent department of the govern,
and it would be an inquisition into the conduct of the members of the
legislature, a very delicate power, the frequent exercise of which must
lead to endless confusion in the administration of the law. The rule is also
one of convenience, because courts could not rely on the published
session laws, but would be required to look beyond these to the journals
of the legislature and often to any printed bills and amendments which
might be found after the adjournment of the legislature. Otherwise, after
relying on the prima facie evidence of the enrolled bills, authenticated as
exacted by the Constitution, for years, it might be ascertained from the
journals that an act theretofore enforced had never become a law. In this
respect, it has been declared that there is quite enough uncertainty as to
what the law is without saying that no one may be certain that an act of
the legislature has become such until the issue has been determined by
some court whose decision might not be regarded as conclusive in an
action between the parties."

"But it is argued that if the authenticated roll is conclusive upon

the Courts, then less than a quorum of each House may by the aid of
corrupt presiding officers impose laws upon the State in defiance of the
inhibition of the Constitution. It must be admitted that the consequence
stated would be possible Public authority and politic power must of
necessity be confided to officers, who being human may violate the trusts
reposed in them. This perhaps cannot be avoided absolutely. But it
applies also to all human agencies. It is not fit that the Judiciary should
claim for itself a purity beyond all others; nor has it been able at all times
with truth to say that its high places have not been disgraced. The
framers of our government have not constituted it with faculties to
supervise coordinate departments and correct or prevent abuses of their
authority. It cannot authenticate a statute; that power does not belong to
it; nor can it keep a legislative journal." (1869, Frazer, J., in Evans T S.
Browne, 30 Ind., 514, 524. )
Professor Wigmore in his work on Evidence considered a classic, and described
by one who himself is a noted jurist, author, and scholar, as "a permanent contribution to
American law" and having "put the matured nineteenth century law in form to be used in a
new era of growth" unequivocally identifies himself with those who believe in the
soundness of the rule. The distinguished professor, in answer to the argument of
Constitutional necessity, i. e., the impossibility of securing in any other way the enforcement
of constitutional restrictions on legislation action, says:

From other decisions, selected and quoted in IV Wigmore on Evidence, 696, 697,
we extract these passages:
"I think the rule thus adopted accords with public policy. Indeed,
in my estimation, few things would be more mischievous than the
introduction of the opposite rule. . . . The rule contended for is that the
Court should look at the journals of the Legislature to ascertain whether
the copy of the act attested and filed with the Secretary of State conforms
in its contents with the statements of such journals. This proposition
means, if it has any legal value whatever, that, in the event of a material
discrepancy between the journal and the enrolled copy, the former is to
be taken as the standard of veracity and the act is to be rejected. This is
the test which is to be applied not only to the statutes now before the

"(1) In the first place, note that it is impossible of consistent

application. If, as it is urged, the Judiciary are bound to enforce the
constitutional requirements of three readings, a two-thirds vote, and the
like, and if therefore an act must be declared no law which in fact was not
read three times or voted upon by two-thirds, this duty is a duty to
determine according to the actual facts of the readings and the votes.

44

Now the journals may not represent the actual facts. That duty cannot
allow us to stop with the journals, if it can be shown beyond doubt that the
facts were otherwise than therein represented. The duty to uphold a law
which in fact was constitutionally voted upon is quite as strong as the duty
to repudiate an act unconstitutionally voted upon. The Court will be going
as far wrong in repudiating an act based on proper votes falsified in the
journal as it will be in upholding an act based on improper votes falsified
in the enrollment. This supposed duty, in short, is to see that the
constitutional facts did exist; and it cannot stop short with the journals.
Yet, singularly enough, it is unanimously conceded that an examination
into facts as provable by the testimony of members present is not
allowable. If to support this it be said that such an inquiry would be too
uncertain and impracticable, then it is answered that this concedes the
supposed constitutional duty not to be inexorable, after all; for if the duty
to get at the facts is a real and inevitable one, it must be a duty to get at
them at any cost; and if it is merely a duty that is limited by policy and
practical convenience, then the argument changes into the second one
above, namely, how far it is feasible to push the inquiry with regard to
policy and practical convenience; and from this point of view there can be
but one answer.

the Legislature, or its majority, did not have such a belief? Or suppose the
Constitution commands the Judiciary to decide a case only after
consulting a soothsayer, and in a given case the Judiciary do not consult
one; what is to be done?
"These instances illustrate a general situation in which the
judicial function of applying and enforcing the Constitution ceases to
operate. That situation exists where the Constitution enjoins duties which
affect the motives and judgment of a particular independent department
of government, Legislature, Executive, and Judiciary. Such duties are
simply beyond enforcement by any other department if the one charged
fails to perform them. The Constitution may provide that no legislator shall
take a bribe, but an act would not be treated as void because the majority
had been bribed. So far as the Constitution attempts to lay injunctions in
matters leading up to and motivating the action of E3 department,
injunctions must be left to the conscience of that department to obey or
disobey. Now the act of the Legislature as a whole is for this purpose of
the same nature as the vote of a single legislator. The Constitution may
expressly enjoin each legislator not to vote until he has carefully thought
over the matter of legislation; so, too, it may expressly enjoin the whole
Legislature not to act finally until it has three times heard the proposition
read aloud. It is for the Legislature alone, in the latter case as well as in
the former, to take notice of this in junction; and it is no more the function
of the Judiciary in the one case than in the other to try to keep the
Legislature to its duty:

"(2) In the second place, the fact that the scruple of

constitutional duty is treated thus inconsistently and pushed only up to a
certain point suggests that it perhaps is based on some fallacious
assumption whose defect is exposed only by carrying it to its logical
consequences. Such indeed seems to be the case. It rests on the
fallacious notion that every constitutional provision is 'per se' capable of
being enforced through the Judiciary and must be safeguarded by the
Judiciary because it can be in no other way. Yet there is certainly a large
field of constitutional provision which does not come before the Judiciary
for enforcement, and may remain unenforced without any possibility or
judicial remedy. It is not necessary to invoke in illustration such provisions
as a clause requiring the Governor to appoint a certain officer, or the
Legislature to pass a law for a certain purpose; here the Constitute on
may remain unexecuted by the failure of Governor or Legislature to act,
and yet the Judiciary cannot safeguard and enforce the constitutional
duty. A clearer illustration may be had by imagining the Constitution to
require the Executive to appoint an officer or to call out the militia
whenever to the best of his belief a certain state of facts exists; suppose
he appoints or calls out when in truth he has no such belief; can the
Judiciary attempt to enforce the Constitution by inquiring into his belief?
Or suppose the Constitution to enjoin on the Legislators to pass a law
upon a certain subject whenever in their belief certain conditions exist;
can the Judiciary declare the law void by inquiring and ascertaining that

xxx xxx xxx

"The truth is that many have been carried away with the
righteous desire to check at any cost the misdoings of Legislatures. They
have set such store by the Judiciary for this purpose that they have
almost made them a second and higher Legislature. But they aim in the
wrong direction. Instead of trusting a faithful Judiciary to check an
inefficient Legislature, they should turn to improve the Legislature. The
sensible solution is not to patch and mend casual errors by assailing the
Judiciary to violate legal principle and to do impossibilities with the
Constitution; but to represent ourselves with competent, careful, and
honest legislators, the work of whose hands on the statute-roll may come
to reflect credit upon the name of popular government." (4 Wigmore on
Evidence, 699-702.)
The petitioners contend that the enrolled bill rule has not found acceptance in this
jurisdiction, citing the case of United States vs. Pons (34 Phil., 729). It is argued that this

45

Court examined the journal in that case to find out whether or not the contention of the
appellant was right. We think the petitioners are in error.
It will be seen upon examination of section 313 of the Code of Civil Procedure, as
amended by Act No. 2210, that, roughly, it provides two methods of proving legislative
proceedings: (1) by the journals, or by published statutes or resolutions, or by copies
certified by the clerk or secretary or printed by their order; and (2) in case of acts of the
legislature, by a copy signed by the presiding Officers and secretaries thereof, which shall
be conclusive proof of the provisions of such Acts and of the due enactment thereof.
The Court looked into the journals in United States vs. Pons because, in all
probability, those were the documents offered in evidence. It does not appear that a duly
authenticated copy of the Act was in existence or was placed before the Court; and it has
not been shown that if that had been done, this Court would not have held the copy
conclusive proof of the due enactment of the law. It is to be remembered that the Court
expressly stated that it "passed over the question" of whether the enrolled bill was
conclusive as to its contents and the mode of its passage.
MARCELO D. MONTENEGRO vs. MARIANO CASTAEDA, ET AL.

Even if both the journals and an authenticated copy of the Act had been
presented, the disposal of the issue by the Court on the basis of the journals does not imply
rejection of the enrollment theory, for, as already stated, the due enactment of a law may be
proved in either of the two ways specified in section 313 of Act No. 190 as amended. This
Court found in the journals no signs of irregularity in the passage of the law and did not
bother itself with considering the effects of an authenticated copy if one had been
introduced. It did not do what the opponents of the rule of conclusiveness advocate,
namely, look into the journals behind the enrolled copy in order to determine the
correctness of the latter, and rule such copy out if the two, the journals and the copy, be
found in conflict with each other. No discrepancy appears to have been noted between the
two documents and the court did not say or so much as give to understand that if
discrepancy existed it would give greater weight to the journals, disregarding the explicit
provision that duly certified copies "shall be conclusive proof of the provisions of such Acts
and of the due enactment thereof."

EN BANC
[G.R. No. L-4221. August 30, 1952.]
MARCELO D. MONTENEGRO, petitioner-appellant, vs. GEN. MARIANO
CASTAEDA and COLONEL EULOGIO BALAO, respondentsappellees.
Felixberto M. Serrano and Honorio Ilagan for appellant.
Solicitor General Pompeyo Diaz and Solicitor Felix V. Makasiar for appellees.
Jesus G. Barrera, Francisco A. Rodrigo, Enrique Fernando and Claudio
Teehankee as amici curiae.

In view of the foregoing considerations, we deem it unnecessary to decide the

question of whether the senators and representatives who were ignored in the computation
of the necessary three-fourths vote were members of Congress within the meaning of
section 1 of Article XV of the Philippine Constitution.

SYLLABUS
1.CONSTITUTIONAL LAW; EX POST FACTO LAWS. The constitutional
prohibition against bills of attainder or ex post facto laws applies only to statutes.

The petition is dismissed without costs.

Moran, C.J., Pablo and Hontiveros, JJ., concur.

2.HABEAS CORPUS; SUSPENSION THEREOF; PROCLAMATION NO. 210;

SEDITION, NOT INCLUDED THEREIN. The stay of the privilege of the writ of habeas
corpus, ordered in Proclamation No. 210, is in accordance with the powers expressly

||| (Mabanag v. Vito, G.R. No. L-1123, [March 5, 1947], 78 PHIL 1-111)

46

vested in the President by the Constitution. However, the word "sedition" in Proclamation
No. 210 should be deemed a mistake or surplusage that does not taint the decree as a
whole.

complicity with a communistic organization in the commission of acts of rebellion,

insurrection or sedition. So far as the record discloses, he is still under arrest in the custody
of respondents. On October 22, 1950, the President issued Proclamation No. 210
suspending the privilege of the writ of habeas corpus. On October 21, 1950, Maximino's
father, the petitioner, submitted this application for a writ of habeas corpus seeking the
release of his son.

3.ID.; ID. The president has power to suspend the privilege of the writ of
habeas corpus, when public safety requires it, in cases of (1) invasion, (2) insurrection, (3)
rebellion, or (4) imminent danger thereof. The official declaration that "there is actual
danger of rebellion which may extend throughout the country" amply justifies the
suspension of the writ.

Opposing the writ, respondents admitted having the body of Maximino, but
questioned judicial authority to go further in the matter, invoking the above-mentioned
proclamation.

4.ID.; ID.; CONCLUSIVENESS. The President's declaration about the

existence of danger is conclusive upon the courts.

Petitioner replied that such proclamation was void, and that, anyway, it did not
apply to his son, who had been arrested before its promulgation. Heeding the suspension
order, the court of first instance denied the release prayed for. Hence this appeal, founded
mainly on the petitioner's propositions:

5.ID.; ID.; EFFECT OF SUSPENSION ON CASES FILED BEFORE THE

PROCLAMATION. A proclamation of the President suspending the writ of habeas
corpus is valid and efficient in law to suspend all proceedings pending upon habeas corpus.

(a)The proclamation is unconstitutional "because it partakes of a bill of attainder,

or an ex post facto law; and unlawfully includes sedition which under the Constitution is not
a ground for suspension";

6.ID.; ID.; EVIDENCE OF THE FACTS STATED IN THE PETITION. In habeas

corpus cases, averments of facts in the return, in the absence of denial or appropriate
pleading avoiding their effect, will be taken as true and conclusive, regardless of the
allegations contained in the petition.

(b)"There is no state of invasion, insurrection or rebellion, or imminent danger

thereof," the only situations permitting discontinuance of the writ of habeas corpus;

DECISION
(c)Supposing the proclamation is valid, no prima facie showing was made that
the petitioner's son was included within the terms thereof.

BENGZON, J p:

Proclamation No. 210 reads partly as follows:

The purpose of this appeal from the Court of First Instance of Quezon City is to
test the validity of Proclamation No. 210 suspending the privilege of the writ of habeas
corpus.

"WHEREAS, lawless elements of the country have committed

overt acts of sedition, insurrection and rebellion for the purpose of
overthrowing the duly constituted authorities and, in pursuance thereof,
have created a state of lawlessness and disorder affecting public safety
and the security of the state;

A few months ago the same proclamation came up for discussion in connection
with the request for bail of some prisoners charged with rebellion. 1 The divided opinion of
this Court did not squarely pass on the validity of the proclamation; but, assuming it was
obligatory, both sides proceeded to determine its effect upon the right of such prisoners to
go on bail.

"WHEREAS, these acts of sedition, insurrection and rebellion

consisting of armed raids, sorties and ambushes and the wanton acts of
murder, rape, spoilage, looting, arson, planned destruction of public and
private buildings, and attacks against police and constabularly
detachments, as well as against civilian lives and properties, as reported
by the Commanding General of the Armed Forces, have seriously
endangered and still continue to endanger the public safety;

This decision will now consider the points debated regarding the aforesaid
presidential order.
The facts are few and simple: About five o'clock in the morning of October 18,
1950, Maximino Montenegro was arrested with others at the Samanillo Bldg., Manila, by
agents of the Military Intelligence Service of the Armed Forces of the Philippines, for

47

"WHEREAS, these acts of sedition, insurrection and rebellion

have been perpetrated by various groups of persons well organized for
concerted action and well armed with machine guns, rifles, pistols and
other automatic weapons, by reason whereof there is actual danger of
rebellion which may extend throughout the country;

directive, but in obedience to the supreme law of the land, the word "sedition" in
Proclamation No. 210 should be deemed a mistake or surplusage that does not taint the
decree as a whole.
B.In his second proposition appellant insists there is no state of invasion,
insurrection, rebellion or imminent danger thereof. "There are" he admits "intermittent
sorties and lightning attacks by organized bands in different places"; but, he argues, "such
sorties are occasional, localized and transitory. And the proclamation speaks no more than
of overt acts of insurrection and rebellion, not of cases of invasion, insurrection or rebellion
or imminent danger thereof." On this subject it is noted that the President concluded from
the facts recited in the proclamation, and others connected therewith, that "there is actual
danger of rebellion which may extend throughout the country." Such official declaration
implying much more than imminent danger of rebellion amply justifies the suspension of the
writ.

"WHEREAS, 100 leading members of these lawless elements

have been apprehended and are presently under detention, and strong
and convincing evidence has been found in their possession to show that
they are engaged in rebellious, seditious and otherwise subversive acts
as above set forth; and
"WHEREAS, public safety requires that immediate and effective
action be taken to insure the peace and security of the population and to
maintain the authority of the government;

To the petitioner's unpracticed eye the repeated encounters between dissident

elements and military troops may seem sporadic, isolated, or casual. But the officers
charged with the Nation's security, analyzed the extent and pattern of such violent clashes
and arrived at the conclusion that they are warp and woof of a general scheme to overthrow
this government vi et armis, by force and arms.

"NOW, THEREFORE, I, ELPIDIO QUIRINO, President of the

Philippines, by virtue of the powers vested upon me by article VII, section
10, paragraph (2) of the Constitution, do hereby suspend the privilege of
the writ of habeas corpus for the persons presently detained, as well as
all others who may be hereafter similarly detained for the crimes of
sedition, insurrection or rebellion, and all other crimes and offenses
committed by them in furtherance or on the occasion thereof, or incident
thereto, or in connection therewith."

And we agree with the Solicitor General that in the light of the views of the United
States Supreme Court thru Marshall, Taney and Story quoted with approval in Barcelon vs.
Baker (5 Phil., 87, pp. 98 and 100) the authority to decide whether the exigency has arisen
requiring suspension belongs to the President and "his decision is final and conclusive"
upon the courts and upon all other persons.

A.t is first argued that the proclamation is invalid because it "partakes" of a bill of
attainder or an ex post facto law, and violates the constitutional precept that no bill of
attainder or ex post facto law shall be passed. The argument is devoid of merit. The
prohibition applies only to statutes. U. S. vs. Gen. El., 80 Fed. Supp. 989; De Pass vs.
Bidwell, 124 Fed., 615. 1 A bill of attainder is a legislative act which inflicts punishment
without judicial trial. (16 C. J. S. p. 902; U. S. vs. Lovett (1946) 328 U. S. 303). Anyway, if,
as we find, the stay of the writ was ordered in accordance with the powers expressly vested
in the President by the Constitution, such order must be deemed an exception to the
general prohibition against ex post facto laws and bills of attainder supposing there is a
conflict between the prohibition and the suspension.

Indeed as Justice Johnson said in that decision, whereas the Executive branch of
the Government is enabled thru its civil and military branches to obtain information about
peace and order from every quarter and corner of the nation, the judicial department, with
its very limited machinery can not be in better position to ascertain or evaluate the
conditions prevailing in the Archipelago.
But even supposing the President's appraisal of the situation is merely prima
facie, we see that petitioner in this litigation has failed to overcome the presumption of
correctness which the judiciary accords to acts of the Executive and Legislative
Departments of our Government.

On the other hand there is no doubt it was erroneous to include those accused of
sedition among the persons as to whom suspension of the writ is decreed. Under the
Constitution the only grounds for suspension of the privilege of the writ are "invasion,
insurrection, rebellion or imminent danger thereof." Obviously, however, the inclusion of
sedition does not invalidate the entire proclamation; and it is immaterial in this case,
inasmuch as the petitioner's descendant is confined in jail not only for sedition, but for the
graver offense of rebellion and insurrection. Without doing violence to the presidential

C.The petitioner's last contention is that the respondents failed to establish that
his son is included within the terms of the proclamation.
On this topic, respondents' return officially informed the court that Maximino had
been arrested and was under custody for complicity in the commission of acts of rebellion,

48

insurrection and sedition against the Republic of the Philippines. Not having traversed that
allegation in time, petitioner must be deemed to have conceded it.

"In defense of the amendment, Delegate Francisco pointed out

that it was intended to make this part of the bill of rights conform to that
part of the draft giving the President the power to suspend the writ of
habeas corpus also in the case of an imminent danger of invasion or
rebellion. When asked by Delegate Rafols if the phrase, imminent danger,
might not be struck out from the corresponding provision under the
executive power instead, Delegate Francisco answered:

". . . In the absence of a denial, or appropriate pleading

avoiding their effect, averment of facts in the return will be taken as true
and conclusive, regardless of the allegations contained in the petition;
and the only question for determination is whether or not the facts stated
in the return, as a matter of law, authorizes the restraint under
investigation." (39 C. J. S., 664-665.)

"'Outright, it is possible to eliminate the phrase, imminent

danger thereof, in the page I have mentioned. But I say, going to the
essence and referring exclusively to the necessity of including the words,
of imminent danger of one or the other, I wish to say the following: that it
should not be necessary that there exists a rebellion, insurrection, or
invasion in order that habeas corpus may be suspended. It should be
sufficient that there exists not a danger but an imminent danger, and the
word, imminent, should be maintained. When there exists an imminent
danger, the State requires for its protection and for that of all the citizens
the suspension of habeas corpus.'

D. An interesting issue is posed by amici curiae. The Bill of Rights prohibits

suspension of the privilege of the writ of habeas corpus except when the public safety
requires it, in cases of (1) invasion (2) insurrection or (3) rebellion.
Article VII Section 10 authorizes the President to suspend the privilege, when
public safety requires it, in cases of (1) invasion (2) insurrection or (3) rebellion or
(4)imminent danger thereof.
"Imminent danger," is no cause for suspension under the Bill of Rights. It is under
Article VII. To complicate matters, during the debates of the Constitutional Convention on
the Bill of Rights, particularly the suspension of the writ, the Convention voted down an
amendment adding a fourth cause of suspension: imminent danger of invasion, insurrection
or rebellion.

follows:

"When put to vote for the second time, the amendment was
defeated with 72 votes against and 56 votes in favor of the same." (I
Aruego's Framing of the Philippine Constitution, pp. 180-181)

Professor Aruego, a member of the Convention, describes the incident as

Nevertheless when the President's specific powers under Article VII, were taken
up, there was no objection to his authority to suspend in case of "imminent danger". (At
least we are not informed of any debate thereon.) Now then, what is the effect of the
seeming discrepancy?.

During the debates on the first draft, Delegate Francisco

proposed an amendment inserting, as a fourth cause for the suspension
of the writ of habeas corpus imminent danger of the three causes
included herein. When submitted to a vote for the first time, the
amendment was carried.

Is the prohibition of suspension in the bill of rights to be interpreted as limiting

Legislative powers only - not executive measures under section VII? Has Article VII (sec.
10) pro tanto modified the bill of rights in the same manner that a subsequent section of a
statute modifies a previous one?.
The difference between the two constitutional provisions would seem to be:
whereas the bill of rights impliedly denies suspension in case of imminent danger of
invasion etc., Article VII sec. 10 expressly authorizes the President to suspend when there
is imminent danger of invasion etc.

"After his motion for a reconsideration of the amendment was

approved, Delegate Orense spoke against the amendment alleging that it
would be dangerous to make imminent danger a ground for the
suspension of the writ of habeas corpus. In part, he said:

The following statements in a footnote in Cooley's Constitutional limitations (8th

Ed.) p. 129, appear to be persuasive:

"'Gentlemen, this phrase is too ambiguous, and in the hands of

a President who believes more or less a dictator, it is extremely
dangerous; it would be a sword with which he would behead us.'

"It is a general rule in the construction of writings, that, a

general intent appearing, it shall control the particular intent; but this rule

49

must sometimes give way, and effect must be given to a particular intent
plainly expressed in one part of a constitution, though apparently
opposed to a general intent deduced from other parts. Warren V.
Shuman, 5 Tex. 441. In Quick V. Whitewater Township, 7 Ind. 570, it was
said that if two provisions of a written constitution are irreconcilably
repugnant, that which is last in order of time and in local position is to be
preferred. In Gulf, C. & S. F. Ry. Co. v. Rambolt, 67 Tex. 654, 4 S. W. 356,
this rule was recognized as a last resort, but if the last provision is more
comprehensive and specific, it was held that it should be given effect on
that ground."

||| (Montenegro v. Castaeda, G.R. No. L-4221, [August 30, 1952], 91 PHIL 882-890)

And in Hoag vs. Washington Oregon Corp. (1915) 147 Pac. Rep., 756 at p. 763 it
was said:
"It is a familiar rule of construction that, where two provisions of
a written Constitution are repugnant to each other, that which is last in
order of time and in local position is to be preferred. Quick v. White Water
Township, 7 Ind. 570; G., C. & S. F. Ry. Co. v. Rambolt, 67 Tex. 654, 4 S.
W. 356. So, even assuming the two clauses discussed are repugnant, the
latter must prevail."
Wherefore in the light of these precedents, the constitutional authority of the
President to suspend in case of imminent danger of invasion, insurrection or rebellion under
Article VII may not correctly be placed in doubt.
E.The petitioner insisted in the court below that the suspension should not apply
to his son, because the latter had been arrested and had filed the petition before the
Executive proclamation. On this phase of the controversy, it is our opinion that the order of
suspension affects the power of the courts and operates immediately on all petitions therein
pending at the time of its promulgation.
Marbury v. Madison
"A proclamation of the President suspending the writ of habeas
corpus was held valid and efficient in law to suspend all proceedings
pending upon habeas corpus, which was issued and served prior to the
date of the proclamation. Matter of Dunn, D. C. N. Y. 1863, 25 How. Prac.
467, Fed. Cas. No. 4,171."

Facts
On his last day in office, President John Adams named forty-two justices of the peace and
sixteen new circuit court justices for the District of Columbia under the Organic Act. The Organic
Act was an attempt by the Federalists to take control of the federal judiciary before Thomas

F.Premises considered, the decision of the court a quo refusing to release the
prisoner is affirmed, without costs.

Jefferson took office.

The commissions were signed by President Adams and sealed by acting Secretary of State

Paras, C.J., Pablo, Padilla, Montemayor, Bautista Angelo and Labrador,

JJ., concur.

John Marshall (who later became Chief Justice of the Supreme Court and author of this opinion),
but they were not delivered before the expiration of Adamss term as president. Thomas

50

Jefferson refused to honor the commissions, claiming that they were invalid because they had

of the completion of the appointment. Having this legal right to the office, he has a
consequent right to the commission, a refusal to deliver which is a plain violation of that
right for which the laws of the country afford him a remedy.

not been delivered by the end of Adamss term.

William Marbury (P) was an intended recipient of an appointment as justice of the peace.

3.

Marbury applied directly to the Supreme Court of the United States for a writ of mandamus to
compel Jeffersons Secretary of State, James Madison (D), to deliver the commissions. The
Judiciary Act of 1789 had granted the Supreme Court original jurisdiction to issue writs of

It is emphatically the duty of the Judicial Department to say what the law is. Those who
apply the rule to particular cases must, of necessity, expound and interpret the rule. If two
laws conflict with each other, the Court must decide on the operation of each. If courts are
to regard the Constitution, and the Constitution is superior to any ordinary act of the
legislature, the Constitution, and not such ordinary act, must govern the case to which
they both apply.

mandamus to any courts appointed, or persons holding office, under the authority of the
United States.
Issues
1.

Does Marbury have a right to the commission?

2.

Does the law grant Marbury a remedy?

4.

3.

Does the Supreme Court have the authority to review acts of Congress and determine
whether they are unconstitutional and therefore void?

4.

Can Congress expand the scope of the Supreme Courts original jurisdiction beyond
what is specified in Article III of the Constitution?

5.

Does the Supreme Court have original jurisdiction to issue writs of mandamus?

Yes. Marbury has a right to the commission.

5.

The order granting the commission takes effect when the Executives constitutional power
of appointment has been exercised, and the power has been exercised when the last act
required from the person possessing the power has been performed. The grant of the
commission to Marbury became effective when signed by President Adams.
2.

No. Congress cannot expand the scope of the Supreme Courts original jurisdiction
beyond what is specified in Article III of the Constitution.
The Constitution states that the Supreme Court shall have original jurisdiction in all cases
affecting ambassadors, other public ministers and consuls, and those in which a state
shall be a party. In all other cases, the Supreme Court shall have appellate jurisdiction. If
it had been intended to leave it in the discretion of the Legislature to apportion the judicial
power between the Supreme and inferior courts according to the will of that body, this
section is mere surplusage and is entirely without meaning. If Congress remains at liberty
to give this court appellate jurisdiction where the Constitution has declared their
jurisdiction shall be original, and original jurisdiction where the Constitution has declared it
shall be appellate, the distribution of jurisdiction made in the Constitution, is form without
substance.

Holding and Rule (Marshall)

1.

Yes. The Supreme Court has the authority to review acts of Congress and determine
whether they are unconstitutional and therefore void.

No. The Supreme Court does not have original jurisdiction to issue writs of
mandamus.
To enable this court then to issue a mandamus, it must be shown to be an exercise of
appellate jurisdiction, or to be necessary to enable them to exercise appellate jurisdiction.
It is the essential criterion of appellate jurisdiction that it revises and corrects the
proceedings in a cause already instituted, and does not create that case. Although,
therefore, a mandamus may be directed to courts, yet to issue such a writ to an officer for
the delivery of a paper is, in effect, the same as to sustain an original action for that paper,
and is therefore a matter of original jurisdiction.

Yes. The law grants Marbury a remedy.The very essence of civil liberty certainly
consists in the right of every individual to claim the protection of the laws whenever he
receives an injury. One of the first duties of government is to afford that protection.
Where a specific duty is assigned by law, and individual rights depend upon the
performance of that duty, the individual who considers himself injured has a right to resort
to the law for a remedy. The President, by signing the commission, appointed Marbury a
justice of the peace in the District of Columbia. The seal of the United States, affixed
thereto by the Secretary of State, is conclusive testimony of the verity of the signature, and

Disposition
Application for writ of mandamus denied. Marbury doesnt get the commission.

51

within which said party may give a supersedeas bond, the sufficiency of which is to be
determined by one of the members of this court.
2. ID.; ID.; ID.; ID.; CERTIORARI AND PROHIBITION PROCEEDINGS. It is
admitted that certiorari and prohibition are civil remedies but the certiorari and prohibition
proceedings originally instituted in this court were, like the proceedings for probation, an
incident of the criminal case. Apart from this, it will be noted that the appeal taken is from
the judgment of this court declaring the Probation Act unconstitution and void. That
judgment does not command or permit any act to be done. There is nothing there to be
actively enforced by execution or otherwise. Because of its negative or prohibitive
character, there is nothing to supersede; nothing, as petitioners assert, upon which the stay
bond can operate.
PEOPLE OF THE PHIL. ET AL., vs. JOSE O. VERA

3. ID.; ID.; ID.; ID. In reality, the supersedeas is intended to operate on the
decision and judgment in the criminal case entitled "The People of the Philippine
Islands vs. Mariano Cu Unjieng, et al." The decision of the Court of First Instance of Manila
in that case, rendered on January 8, 1934 (Criminal Case No. 42649), was affirmed by this
court on March 26, 1935 (G. R. No. 41200, 35 Off. Gaz., 738. See alsoresolutions of
December 17, 1935). The decision of this court in that criminal case has already become
final and the petition for a writ of certiorari to review said decision was denied by the
Supreme Court of the United States in November of last year. At bottom, supersedeas is
being sought to stay the execution of the final judgment in said criminal case. Thereby, the
petitioner will continue to be at large and this is the status quodesired to be maintained. The
suspensive effect of supersedeas can only operate in this case on the judgment sought to
be reviewed and cannot arrest the execution of the final judgment rendered in the criminal
case against the respondent M. C. U. (Cyc. of Fed. Proc., Civil and Criminal, Longsdorf, vol.
6, sec. 2869, p. 362.)

FIRST DIVISION
[G.R. No. 45685. December 22, 1937.]
THE PEOPLE OF THE PHILIPPINES and THE HONGKONG &
SHANGHAI BANKING CORPORATION, petitioners, vs. JOSE O.
VERA, Judge ad interim of First Instance of Manila, and MARIANO
CU UNJIENG, respondents.
Solicitor-General Tuason and City Fiscal Diaz for the Government.
DeWitt, Perkins & Ponce Enrile for the Hongkong & Shanghai Banking
Corporation.

4. ID.; ID.; ID.; ID. The public interest and the interest of the speedy
administration of justice demand prompt execution of the final sentence of conviction
rendered against the petitioner. Said petitioner has had all the time and opportunity which
the law can possibly afford to anyone in self-defense. He had the assistance of able
counsel and had opportunity to appeal to this court and the Supreme Court of the United
States, and the least that can be said is that he must abide by this judgment and serve his
term. It is further to be observed that the petition for probation of the respondent M. C. U.
has already been denied by the trial court.

Vicente J. Francisco, Feria & La O, Orense & Belmonte and Gibbs &
McDonoughfor the respondent Unjieng.
No appearance for respondent Judge.
SYLLABUS

5. ID.; ID.; ID.; ID.; RULE OF FEDERAL PRACTICE IN THE UNITED STATES.
As a rule of federal practice in the United States, section 8 cd. of the Act of Congress of
February 13, 1925 (43 Stat., 936, 940; 28 U. S. C. A., sec. 350), provides that in any case
the execution and enforcement of final judgment or decree which is subject to review by the
Supreme Court of the United States on writ of certiorari is discretionary with "a judge of the
court rendering the judgment or decree or by a Justice of the Supreme Court," and this rule

1. JUDGMENT; STAY OF EXECUTION; WRIT OF CERTIORARI;

SUPERSEDEAS BOND. Section 46 (a) of the Rules of this court requires that in any civil
case in which final judgment has been rendered by this court, if any party thereto gives
notice in writing of his intention to remove the case to the Supreme Court of the United
States by writ of certiorari, this court shall grant a stay for the period therein mentioned

52

is reiterated in paragraph 6 of Rule 38 of the Supreme Court of the United States.

(Robertson & Kirkham, sec. 413, p. 831 et seq.)

Supreme Court of the United States, if such is granted, this court shall
grant a stay, for a term not to exceed ten days, within which the moving
party may give a supersedeas bond, and shall designate one of its
members to determine the sufficiency of such bond."

DECISION

The foregoing rule requires that in any civil case in which final judgment has been
rendered by this court, if any party thereto gives notice in writing of his intention to remove
the case to the Supreme Court of the United States by writ of certiorari, this court shall
grant a stay for the period therein mentioned within which said party may give a
supersedeas bond, the sufficiency of which is to be determined by one of the members of
this court. It is admitted that certiorari and prohibition are civil remedies but the certiorari
and prohibition proceedings originally instituted in this court were, like the proceedings for
probation, an incident of the criminal case. Apart from this, it will be noted that the appeal
taken is from the judgment of this court declaring the Probation Act unconstitutional and
void. That judgment does not command or permit any act to be done. There is nothing there
to be actively enforced by execution or otherwise. Because of its negative or prohibitive
character, there is nothing to supersede; nothing, as petitioners assert, upon which the stay
bond can operate. In reality, the supersedeas is intended to operate on the decision and
judgment in the criminal case entitled "The People of the Philippine Islands vs. Mariano Cu
Unjieng et al." The decision of the Court of First Instance of Manila in that case, rendered
on January 8, 1934 (Criminal Case No. 42649), was affirmed by this court on March 26,
1935 (G. R. No. 41200) 1 . The decision of this court in that criminal case has already
become final and the petition for a writ of certiorari to review said decision was denied by
the Supreme Court of the United States in November of last year. At bottom., supersedeas
is being sought to stay the execution of the final judgment in said criminal case. Thereby,
the petitioner will continue to be at large and this is the status quo desired to be maintained.
We do not think that this should be allowed. (Sec. 46 [f], Rules of the Supreme Court of the
Philippines.) The suspensive effect of supersedeas can only operate in this case on the
judgment sought to be reviewed and cannot arrest the execution of the final judgment
rendered in the criminal case against the respondent Mariano Cu Unjieng. (Cyc. of Fed.
Proc., Civil and Criminal, Longsdorf, vol. 6, sec. 2869, p. 362.)

LAUREL, J p:
After rendition of the judgment of this court in the above-entitled case, 1 the
respondent Mariano Cu Unjieng, on November 26, 1937, gave notice of his intention to
petition the Supreme Court of the United States for a writ of certiorari for the review of said
judgment and, desiring to stay execution during the pendency of the application for the writ
and of the proceedings relative thereto in the Supreme Court of the United States, now
prays that the corresponding supersedeas bond be fixed, as provided by the rules of this
court. The People of the Philippines and the Hongkong and Shanghai Banking Corporation,
petitioners in the above-entitled case, oppose the application of the respondent for the
granting of a supersedeas bond.
The original action instituted in this court which resulted in the declaration of
unconstitutionality of the Probation Act (No. 4221) was for certiorari and prohibition.
Respondent Mariano Cu Unjieng, thru counsel, states that as certiorari and prohibition are
civil remedies, it is mandatory upon this court to stay enforcement of its judgment in the
above-entitled case. (Sec. 46 [a] infra, Rules of the Supreme Court of the Philippines.) He
also calls attention to the principle that probation can not be granted after the defendant
has begun the service of his sentence and to the policy of this court to encourage review of
its decisions and judgments on certiorari by the Federal Supreme Court. In opposition, the
petitioners state that the judgment of this court declaring the Probation Act unconstitutional
and void is self-executing; that there is no judgment in the instant proceedings to be
executed and that the supersedeas will serve no useful purpose. The petitioner gave
answer to the foregoing objections raised by the respondents and reiterated the arguments
advanced by him in support of his petition for the fixing of the bond.
Section 46 (a) of the rules of this court provides that:

The public interest and the interest of the speedy administration of justice
demand prompt execution of the final sentence of conviction rendered against the
petitioner. Said petitioner has had all the time and opportunity which the law can possibly
afford to anyone in self- defense. He had the assistance of able counsel and had
opportunity to appeal to this court and the Supreme Court of the United States, and the
least that can be said is that he must abide by this judgment and serve his term. It is further
to be observed that the petition for probation of the respondent Mariano Cu Unjieng has
already been denied by the trial court.

"Whenever it is made to appear by notice in writing that any

party to a civil case in which final judgment has been rendered by this
court intends to petition the Supreme Court of the United States for a writ
of certiorari for the review of the decision and judgment of this court, and
it appears that the case is one which, by reason of the amount involved or
the nature of the questions of law presented, may be removed to the
Supreme Court of the United States by writ of certiorari, and it further
appears that the party intending to make application for such writ desires
to stay the enforcement of the judgment of this court during the pendency
of the application for the writ of certiorari and of the proceedings in the

53

There is force in the argument that where the case is appealable under the
Constitution and law to the Supreme Court of the United States, this court is but an agent of
that court and must permit the case to take its due course. In such a case, the appeal is a
matter of right. But from this premise it does not follow that a stay must be granted by this
court where nothing can be stayed, or that the final decision in a criminal case which can no
longer be appealed from should be superseded. Upon the other hand, the wide latitude
necessarily possessed by this court in the interpretation of its Rules must be exercised in
favor of what is believed to be a matter of public interest in the present case.

Avancea, C. J., Villa-Real, Abad Santos, Imperial, Diaz and Concepcion,

JJ., concur.
||| (People v. Vera, G.R. No. 45685, [December 22, 1937], 65 PHIL 56-206)

As a rule of federal practice in the United States, section 8 cd. of the Act of
Congress of February 13, 1925 (43 Stat., 936, 940; 28 U. S. C. A., sec. 350), provides that
in any case the execution and enforcement of final judgment or decree which is subject to
review by the Supreme Court of the United States on writ of certiorari is discretionary with
"a judge of the court rendering the judgment or decree or by a Justice of the Supreme
Court," and this rule is reiterated in paragraph 6 of Rule 38 of the Supreme Court of the
United States. (Robertson & Kirkham, sec. 413, p. 831 et seq.) In Magnum Import
Co. vs. De Spoturno Coty (262 U. S., 159, 163; 43 S. Ct., 531; 67 Law. ed., 922), the
Supreme Court of the United States, through Chief Justice Taft, said:

December 19, 1985

January 7, 1986
EN BANC
G.R. Nos. 72915, 72922, 72923, 72924, 72927, 72928, 72935, 72954, 72957, 72968 &
72986

"The petition should, in the first instance, be made to the circuit

court of appeals, which, with its complete knowledge of the cases, may,
with full consideration, promptly pass on it. That court is in a position to
judge, first, whether the case is one likely, under our practice, to be taken
up by us on certiorari; and, second, whether the balance of convenience
requires a suspension of its decree and a withholding of its mandate. It
involves no disrespect to this court for the circuit court of appeals to
refuse to withhold its mandate or to suspend the operation of its judgment
or decree pending application for certiorari to us. If it thinks a question
involved should be ruled upon by this court, it may certify it. If it does not
certify, it may still consider that the case is one in which a certiorari may
properly issue, and may, in its discretion, facilitate the application by
withholding the mandate or suspending its decree. This is a matter,
however, wholly within its discretion. If it refuses, this court requires an
extraordinary showing before it will grant a stay of the decree below
pending the application for a certiorari, and even after it has granted a
certiorari, it requires a clear case and a decided balance of convenience
before it will grant such stay. These remarks, of course, apply also to
application for certiorari to review judgments and decrees of the highest
courts of states."

ordered.

RESOLUTION
Gentlemen :
Quoted hereunder, for your information, is a resolution of the Court En Banc
dated, December 19, 1985. ATcEDS
"G.R.
No.
72915
(Philippine Bar Association,
et
al. vs.
The Commission onElections, et al.); G.R. No. 72922 (Martiniano P. Vivo, et
al. vs. Commission on Elections, et al.); G.R. No. 72923 (MP Aquilino Q. Pimentel, Jr., et
al. vs. The Treasurer of the Philippines, et al.); G.R. No. 72924 (The Movement of Attorneys
for
Brotherhood,
Integrity
and
Nationalism,
Inc.
[MABINI],
et
al. vs.
The Commission on Elections, et al.); G.R. No. 72927 (The Liberal Party, et al. vs. The
National Treasurer of the Philippines); G.R. No. 72928 (Concerned Women of the
Philippines, et al. vs. Hon. Maximiano Savellano, et al.); G.R. No. 72935 (Alberto G.
Romulo, et al. vs. Commission on Elections, et al.); G.R. No. 72954 (Victor C. Avecilla, et
al. vs. Commission on Elections); G.R. No. 72957 (National Bar Association of the
Philippines, et al. vs. Commission on Elections, et al.); G.R. No. 72968 (Laban ng Bayan
[LABAN], et al. vs. The Commission on Elections, et al.) and G.R. No. 72986 (Juan T.
David vs. The Commission on Elections, et al.). After considering all the pleadings and
deliberating on the issues raised in the petitions as well as on the oral arguments of the
parties and the amici curiae in the hearings held in these cases, Chief Justice Ramon C.
Aquino and six (6) Justices, namely, Justices Claudio Teehankee, Hermogenes
Concepcion, Jr., Vicente Abad Santos, Efren I. Plana, Venicio T. Escolin and Lorenzo

Petition for stay of execution and the fixing of a supersedeas bond is denied. So

54

G.R. No. 72915 (PBA ET AL. VS. COMELEC ET AL.) and other
consolidated petitions.

Relova, voted to DISMISS the petitions in these cases and to DENY the prayer for the
issuance of an injunction restraining respondents from holding the election on February 7,
1986. In the opinion of Chief Justice Aquino, B.P. 883 is constitutional.

TEEHANKEE, J., concurring:

"Justices Hugo Gutierrez, Jr., B.S. de la Fuente, Serafin R. Cuevas, Nestor B.

Alampay and Lino M. Patajo voted to DECLARE B.P. 883 unconstitutional and to grant the
injunction prayed for.

I vote for the dismissal of the petition for prohibition against enforcement of BP
Blg. 883 on the ground that no clear case has been made of an absolute void of power and
authority that would warrant its nullification and that prohibition is not a remedy for acts
done that can no longer be undone.

"Justice Teehankee is of the opinion that inasmuch as there are less than ten
votes in favor of declaring B.P. Blg. 883 unconstitutional, the petitions in these cases are
hereby dismissed and the writs therein prayed for are denied.

The stated issue is quite simple: Is B.P. Blg. 883 calling for special
nationalelections on February 7, 1986 for the offices of President and Vice-President of the
Philippines ( for the first time since the pre-martial era 1969 presidential elections)
unconstitutional, and should this Court therefore stop and prohibit the holding of
theelections?

"This is in accordance with the opinion in Gonzales vs. COMELEC, 21 SCRA 802
and Javellana vs. Executive Secretary, 50 SCRA 141.
"Justices Teehankee, Plana, Escolin, Relova, Gutierrez, Jr., de la Fuente,
Alampay and Patajo filed separate opinions.

Upon the filing on December 3rd of the lead and other petitions at bar, four
members of the Court (Justices Abad Santos, Relova, Gutierrez, Jr. and myself) voted per
the Court's Resolution of December 5th to issue a temporary restraining order against
enforcement of the Act and to hear the petitions on last December 12th so as to maintain
the status quo and thereafter speedily resolve the issue and prevent the people's
expectations from reaching a point of no return. Our vote did not gain the required
concurrence of a majority of eight. Instead the Court granted the parties substantial periods
for filing of respondents' comment and petitioners' replies and to hear the case only after
two weeks on December 17th (continued to December 18th) with a clear consensus to take
a vote and resolve the petitions immediately after the hearing.

"This resolution is without prejudice to the filing of separate opinions by the other
Members of this Court.
"At the session of January 7, 1986, the Court noted that its act of dismissing the
petitions had not been formally stated in its basic Resolution of December 19, 1985. The
Court therefore authorizes the insertion of the following dispositive portion:
'Accordingly, inasmuch as there are less than the required ten (10) votes
to declare Batas Pambansa Bilang 883 unconstitutional, the petitions in
these cases are hereby DISMISSED and the writs therein prayed for are
DENIED.'"

It is of public knowledge and record, as pointed out by former Vice-President,

Senator and Executive Committee Member Emmanuel N. Pelaez, amicus curiae, who
helped in drafting the 1984 constitutional amendments abolishing the Executive Committee
and restoring the Office of Vice-President as the President's successor, that such
restoration was not made effective immediately, but only at the end of the incumbent
President's term on June 30, 1987 in view of his oft-expressed "allergy to vice-presidents."
Hence, Sen. Pelaez submits that the President's letter of conditional "resignation" (for the
word is nowhere used therein) "did not create the actual vacancy required in Section 9,
Article VII of the Constitution which could be the basis of the holding of a special election
for President and Vice-President earlier than the regular election for such positions in 1987.
The letter's intent was obvious: to circumvent the constitutional provision which would, in
effect, require the President to actually vacate his office in favor of the Speaker who would
then be the Acting President until a new one shall have been elected and shall have
qualified. . . . In prescribing the procedure to fill the office of President in case of vacancy
therein occurred during the term of President Marcos, it [the cited section] excluded any
discretion on the part of the Batasang Pambansa to legislate on the same subject. In fact,

"Chief Justice Aquino is of the opinion that the revision of the December 19, 1985
resolution is totally unnecessary. It is clear. It is understood that the petitions are dismissed.
The public and the Comelec understood that the petitions were dismissed."ETaSDc
Melencio-Herrera, * J., took no part in all these cases.
Very truly yours,
(SGD.) GLORIA C. PARAS
Clerk of Court

55

given the very detailed and precise steps to be taken by the Batasang Pambansa under
[the first four paragraphs] for the purpose of calling a special election to fill the vacancy,
there was no room for legislative action to supplement the same. BP Blg. 883 which is a
reproduction of Cabinet Bill No. 7, is in conflict with the Constitution in that it allows the
President to continue holding office after the calling of the special election. To put it another
way: the President's offer to cut his term short is valid. The trouble is he does not go far
enough: he should actually vacate the office forthwith." 1/ DCISAE

have not insisted that he vacate the office of president and its vast powers. As Senator
Pelaez reported to the Court: "(T)he Opposition's answer is firm" they are willing to give the
President this illegal handicap, so long as the election is clean, fair and honest."
The real issue at bar has thus veered from the purely justiciable issue of the
questioned constitutionality of the Act due to the lack of an actual vacancy in the office of
President and transformed itself into a political question that can only be truly decided by
the people in their sovereign capacity in a fair, clean and honest election. (Javellana vs.
Exec. Secretary, 50 SCRA 30). Stated differently, may this Court at this advanced stage
stop the holding of the elections?

In the interval of over two weeks between December 3rd and now, supervening
facts and events have overtaken the Court and the petitions at bar so much so that many of
the petitions were withdrawn expressly or abandoned impliedly. The political parties have
since chosen and proclaimed their candidates for president and vice-president and the
frenzied campaign is in full swing. President Ferdinand E. Marcos is quoted as saying: "we
have already spent a lot of energy and money on this thing." 2/ The foremost exponent of
the Act's unconstitutionality, M.P. Arturo Tolentino who strongly held that "Mr. Marcos is not
intended by the Constitution to succeed himself before 1987 for an additional six years" and
that "the President must first resign from office in order for the constitutional mandate to go
into effect and for the Batasan speaker to assume the post of Acting President" 3/ had laid
aside his "personal objections" against the bill's validity and has accepted the ruling KBL's
nomination as vice-presidential candidate with President Ferdinand E. Marcos as candidate
for reelection in the scheduled February 7, 1986 national elections. The heretofore divided
opposition has unified and likewise presented their standard bearers Corazon "Cory"
Aquino and former Senator Salvador "Doy" Laurel, for president and vice-president,
respectively. President Marcos himself in his letter to the Batasang Pambansa 4/
"irrevocably vacati(ng) the position of President effective only when the election is held and
after the winner is proclaimed and qualified as President by taking his oath office ten (10)
days after his proclamation" urgently stresses that "there is no moment to lose", that "I am,
therefore, left no choice but to seek a new mandate in an election that will assess, as
demanded by the opposition, the policies and programs I am undertaking. Such an election
necessarily shortens my tenure. But the necessity arises from no less than the timehonored principle of public accountability, inherent in a democracy and explicit in our
Constitution" and that the "final settlement of these issues can be achieved only through a
presidential election."

Labor Minister Blas Ople, an articulate KBL spokesman, stressed that the
people's minds have been prepared and conditioned to expect the holding of the February
7th, 1986 presidential elections and that the Court "from its ivory tower" should not stand in
the way. (This nation-wide perception that the great majority of the people want to express
their will in the special election as the best chance for democracy's survival is reflected in all
sectors of the press, be they establishment, neutral or opposition.) As reported by the
press: "Ople said the high court, which did not issue a restraining order to stop preparations
for
the special elections,
"will
have
to take
judicial
notice of a fait
accompli the elections are on. He said the KBL, and the opposition have formed a
consensus by deed by nominating their official tickets, campaigning and spending, while
the people 'from whom all sovereignty emanates' have been conditioned to expect an
election. . . . The people and the world, Ople said, will not believe that the administration did
not help influence a court annulment of theelections, no matter how unfair this charge of
interference in judicial independence might be. Thus, he said, the cancellation of
the elections 'can only aggravate the prevailing crisis and the President may find it difficult
to govern effectively. 'Here and abroad, Ople said, there will be calls for the President to
step down and allow an election under Article 7, Section 9 of the Constitution, to clear the
last remaining obstacle to an election which, both sides now agree, should be held to 'break
a dangerous stalemate in both the political and economic climates' in the face of 'issues
threatening national survival.' Ople said a political system that calls an election and then
calls it off after the momentum has built up will not be received kindly by the people. An
election, he said 'should be treated with respect and the majesty it deserved.' It gives
meaning to the central directing principle of the Constitution that all sovereignty emanates
from the people, he said." 5/ cAHIST

The unified opposition has likewise realized the imperative urgency of seeking
the mandate and verdict of the people. Rather than insist on strict compliance with the cited
constitutional provision that the incumbent President actually resign, vacate his office and
turn it over to the Speaker of the Batasang Pambansa as Acting President, their standard
bearers as the parties most prejudiced have not filed any suit or petition in intervention for
the purpose nor repudiated the scheduled election. Instead, the unified opposition,
including almost all other political parties of standing, (with the exception of a few who have
lost faith in the electoral process due to past sorry experiences) have rallied behind the
presidential candidacy of Cory Aquino. In short, they have taken the President at his own
terms and conditions and will confront him at the scheduled February 7, 1986 elections and

Senator Pelaez formulated the same political question in this wise: "These
supervening events . . . may have converted the snap poll issue into a political one, which
would remove from the Supreme Court the authority to stop present snap poll
activities on its tracks. . . . From the standpoint of constitutional government, what has
recently happened represents a giant step, the biggest stride yet made by our people in
their struggle for the restoration of freedom and democracy, which were shattered by the
declaration of martial law. Four elections have since been held in 1978 for
theinterim Batasan Pambansa, in 1980 for local officials, in 1981 for President, and in 1984

56

for the present Batasan. None of these elections could be said to have been truly
democratic, mainly due to the absence of a strong, united opposition. Today, by some
miracle, the Opposition has become united, so that a truly one-on-one contest for the
Presidency can be held and the two-party system has suddenly become a reality. These
are substantial gains that should not be frittered away by postponing the Presidential and
Vice-Presidential election to mid-1987. With these developments, the issue has been
decided by the political will of the people. This Honorable Court should not put obstacles to
their exercise of that will. Beyond these considerations, national survival depends on the
forthcoming snap poll.

From the realistic standpoint, what should be borne in mind is that President
Marcos has, through his "post-dated resignation" effectively shortened by sixteen (16)
months his tenure (which would have lasted to June 30, 1987) to February 1986, when his
successor-elect, be it himself or his opponent Cory Aquino, takes his/her oath of office after
proclamation as the winner. Similarly, the Act has accelerated the restoration of the
stabilizing office of Vice-President to succeed the President in the event of the latter's
permanent disability, death, removal from office or resignation.
The scheduled election may indeed well be Philippine democracy's last chance.
UP President Edgardo J. Angara expressed it aptly when he wrote that "(T)he threat to a
democratic society comes either from the dictatorship of the right or the totalitarianism of
the left. . . . The snap election will provide an opportunity for bringing these breakaway
members back to the center. In a sense, the election is a process of reunification behind the
democratic alternative. When the center of society which constitutes the majority is given
full and unhampered expression in the polls, the democratic system triumphs and the
national consensus that will emerge is a strong force for future governance. . . . Whichever
way the votes go, what really matters is the majority act of reaffirming the efficacy of the
democratic process. For the center to emerge unified behind the democratic system is the
historic lesson which the snapelections may provide. . . . Prescinding from the legal issues
involved, the holding of the snap elections seems to have gained popular support not only
from the various political camps but also from other sectors as well. The prevailing
sentiment seems to be this waiting for the 1987 Presidential race may be too late for
reasons already properly articulated in other forums."

"Then the President goes on to state that the mandate he received from the
people in 1981 is no longer valid and that to go on he needs a new mandate. Here is a
confession that he has reached a blank wall, that he can no longer lead the nation, much
less achieve his economic and other programs on the basis of his 1981 election. The
Presidency has lost its capacity to govern. Hence the people must be given a chance to
decide; either to re-elect the incumbent or choose a new leader.
"I would like to commend the President for his manly response. He seeks the
people's judgment now. And it is a wonderful chance for the people either to renew their
mandate to him or elect a new leader. The Supreme Court should not stand in the way."
A perceptive columnist has expressed the same view thus: "(T)o say that the
political situation of the country is unstable is to belabor the obvious. The nation is
struggling out of an unprecedentedly severe economic crisis while fighting off a growing
communist-led insurgency. Government's credibility has been questioned, as has been
President Marcos' ability to lead the nation to normalcy, hence the coming political exercise.
Indeed, the Filipino nation has been titillated by the prospect of a change." He quotes MP
Renato Cayetano's plea that "(I)t is only fair for the Supreme Court to tell the parties and
the people whether the questioned law is only part of a charade or a serious attempt to
seek a new mandate for the incumbent in Malacaang. Cayetano says 'Any delay will only
exacerbate the political situation. The Supreme Court should not contribute to the possible
destabilization of the government. The consequences could be horrifying.'" 6/

I wish to express my appreciation for the valuable insights and perceptions that
the three distinguished amici curiae have furnished the Court at the hearings. The events
that have transpired since December 3rd, as the Court did not issue any restraining order,
have turned the issue into a political question which can be truly decided only by the people
in their sovereign capacity at the scheduled election, which hopefully will be clean, fair and
honest. (Let there be a fervent prayer that the Comelecwith its past flip-flopping decisions
and orders as recorded in our jurisprudence, will this time realize that any further
desecration of a free and fair election process will spell disaster for the cause of the
peaceful democratic process.) The Court cannot stand in the way of letting the people
decide through their ballot, either to give the incumbent president a new mandate or to elect
a new president.

Retired Chief Justice Enrique M. Fernando and former Senator Ambrosio Padilla
as amici curiae have likewise urged the Court not to prevent the electorate from giving
expression to the people's sovereign will at the scheduled national election. Chief Justice
Fernando has submitted that "such a vacancy arising from a voluntary act of an incumbent
of the Presidential office inspired by the desire to seek a fresh mandate from the sovereign
people is a novel situation not contemplated by the framers of the 1981 amendments to
the 1973 Constitution." Senator Padilla noting that both the President and the Batasang
Pambansa having acted in favor of the holding of the scheduled national election, submitted
that the Court should defer to the exercise of the people's public right to vote and to express
their judgment, since there is no issue or question more political than the election. AHEDaI

||| (Philippine Bar Association v. Commission on Elections, G.R. Nos. 72915, 72922, 72923,
72924, 72927, 72928, 72935, 72954, 72957, 72968 & 72986 (Resolution), [December 19,
1985])

57

CAYETANO, ANTONIO M. DIAZ, DAMIAN V. ALDABA, JUAN PONCE

ENRILE, ADELINO B. SITOY, LEONARDO PEREZ, ALEJANDRO
ALMENDRAS, SALACNIB F. BATERINA, LUIS S. ETCUBANEZ,
CONCORDIO C. DIEL, REGALADO E. MAAMBONG, TEODULO C.
NATIVIDAD, MACACUNA DIMAPORO, SALVADOR B. BRITANICO and
COMMITTEE ON JUSTICE, HUMAN RIGHTS AND GOOD
GOVERNMENT, respondents.
Napoleon J. Poblador for respondent R. Cayetano.
DECISION
PATAJO, J p:
Petition for prohibition to restrain respondents from enforcing Section 4, 5, 6 and 8 of the
Batasan Rules of Procedure in Impeachment Proceedings and mandamus to compel the
Batasan Committee on Justice, Human Rights and Good Government to recall from the archives
and report out the resolution together with the verified complaint for the impeachment of the
President of the Philippines.

EN BANC

Petitioners, representing more than one-fifth of all members of the Batasan, filed with the
Batasan on August 13, 1985 Resolution No. 644 calling for the impeachment of President
Marcos together with a verified complaint for impeachment. Said resolution and complaint were
referred by the Speaker to the Committee on Justice, Human Rights and Good Government. The
Committee found the complaint not sufficient in form and substance to warrant its further
consideration and disapproved Resolution No. 644 and dismissed all the charges contained in
the complaint attached thereto on August 14, 1985. It then submitted its report which was duly
noted by the Batasan and sent to the archives.

[G.R. No. 71908. February 4, 1986.]

ALBERTO G. ROMULO, JOSE B. LAUREL, MARCELO B, FERNAN,
CECILIA MUOZ PALMA, EDMUNDO B. CEA, ANTONIO CUENCO,
HOMOBONO ADAZA, CIRIACO ALFELOR, ROLANDO ANDAYA,
HONORATO AQUINO, JOSE ATIENZA, JR., NATALIO BELTRAN, JR,,
CESAR V. BOLANOS, DOUGLAS R. CAGAS, FERMIN A. CARAM,
NENITA C. DALUZ, ARTHUR D. DEFENSOR, EMILIO N. DELA PAZ,
HILARIO DE PEDRO, DEMETRIO G. DEMETRIA, MANUEL C.
DOMINGO, CARLOS C. FERNANDEZ, JOLLY T. FERNANDEZ, JAIME
N. FERRER, WILSON P. GAMBOA, ROGELIO GARCIA, ROLLEO L.
IGNACIO, EVA ESTRADA KALAW, RAFAEL L. LAZATIN, EMIGDIO L.
LINGAD, GEMILIANO C. LOPEZ, JR., PEDRO M. MARCELLANA, JR.,
ROLANDO C. MARCIAL, BIENVENIDO MARQUEZ, ANTONIO C.
MARTINEZ, ORLANDO S. MERCADO, ROGACIANO M. MERCADO,
RAMON V. MITRA, JR., JUANITA L. NEPOMUCENO, ROY B.
PADILLA, HERNANDO B. PEREZ, GONZALO G. PUYAT, II, HIALMAR
P. QUINTANA, ISIDRO E. REAL, JR., ZAFIRO L. RESPICIO, VIRGILIO
P. ROBLES, AUGUSTO S. SANCHEZ, OSCAR F. SANTOS,
FRANCISCO S. SUMULONG, EMIGDIO S. TANJUATCO, LUIS R.
VILLAFUERTE and VICTOR ZIGA, petitioners, vs. HON. NICANOR E.
YIGUEZ, MANUEL M. GARCIA, GUARDSON R. LOOD, RENATO L.

On August 14, 1985, MP Ramon V. Mitra filed with the Batasan a motion praying for the recall
from the archives of Resolution No. 644 and the verified complaint attached thereto. Said motion
was disapproved by the Batasan.
On September 7, 1985, the present petition was filed with this Court. In said petition, petitioners
pray that after hearing this Court declare Sections 4, 5, 6 and 8 of the Batasan Rules on
Impeachment which was approved by the Batasan on August 16, 1984 by a vote of 114 in favor
and 58 against, unconstitutional, and Committee Report No. 154 of the Batasan Committee on
Justice, Human Rights and Good Government dismissing Resolution No. 644 and the complaint
for impeachment attached thereto, null and void. They also pray that this Court issue a writ of
preliminary injunction restraining respondents from enforcing and questioned provisions of the
aforementioned Rules and a Writ of preliminary mandatory injunction commanding the Batasan
Committee on Justice, Human Rights and Good Government to recall from the archives and

58

report out the resolution and complaint for impeachment in order that the impeachment trial can
be conducted forthwith by the Batasan as a body. LLpr

"2. The doctrine of separation of powers still exists under the 1973
Constitutionthough in a modified form made necessary because of the
adoption of certain aspects of the parliamentary system in the
amended 1973 Constitution. The major powers of the Government have
been distributed by the Constitution to the President, who is the head of
the State and chief executive of the Republic, the Batasan Pambansa and
the Judiciary. Under the doctrine of separation of powers as interpreted
by the decisions of this Court, mandamus will not lie from one branch of
the government to a coordinate branch to compel performance of duties
within the latter's sphere of responsibility. More specifically, this Court
cannot issue a writ of mandamus against the Batasan to compel it to give
due course to the complaint for impeachment." 1

In G.R. No. L-71688 filed on August 17, 1985, Arturo M. de Castro and Perfecto L. Cagampang,
claiming to be members of good standing of the Integrated Bar of the Philippines and taxpayers,
filed a petition with this Court for certiorari to annul the resolution of the Committee on Justice,
Human Rights and Good Government, the very same resolution subject of the present petition,
dismissing the complaint for the impeachment of the President of the Philippines signed by the
petitioners in the present case, and mandamus to compel said Committee on Justice and the
Batasan, represented by its Speaker, to give due course to said complaint for impeachment. In
denying due course to said petition and dismissing outright the same, We held:
"1. The 1973 Constitution has vested in the Batasan Pambansa the
exclusive power to initiate, try and decide all cases of impeachment. The
action of the Committee on Justice of the Batasan to whom the complaint
for the impeachment of the President had been referred dismissing said
petition for being insufficient in form and substance involves a political
question not cognizable by the Courts. The dismissal of said petition is
within the ambit of the powers vested exclusively in the Batasan by
express provision of Sec. 2, Article XIII of the Constitution and it is not
within the competence of this Court to inquire whether in the exercise of
said power the Batasan acted wisely. There is no allegation in the petition
for certiorari that in the exercise of its powers the Batasan had violated
any provision of the Constitution. The fact that the Committee on Justice
dismissed the petition on the same day it was filed after deliberating on it
for several hours as reported in the newspapers, radio and television
(which must have been the basis of petitioner' claim that the Committee
had acted with undue haste in unceremoniously dismissing the complaint
for impeachment) does not provide basis for concluding that there had
been a violation of any provision of the Constitution which would justify
the Court's intervention to ensure proper observance of constitutional
norms and conduct. Beyond saying that the Batasan may initiate
impeachment by a vote of at least one-fifth of all its Members and that no
official shall be convicted without the concurrence of at least two-thirds of
all the members thereof, the Constitution says no more. It does not lay
down the procedure to be followed in impeachment proceedings. It is up
to the Batasan to enact its own rules of procedure in said impeachment
proceedings, which it had already done. The interpretation and
application of said rules are beyond the powers of the Court to review.
The powers of the Batasan to dismiss a petition for impeachment which in
its judgment it finds not meritorious or defective in form and substance
are discretionary in nature and, therefore, not subject to judicial
compulsion.

We did not dismiss outright the present petition as We did G.R. No. L-71688 but required
respondents to comment thereto in view of the claim of petitioners that the provisions of the
Rules of Procedure in Impeachment Proceedings, more specifically Sections 4, 5, 6 and 8
pursuant to which the Batasan Committee on Justice, Human Rights and Good Government had
dismissed Resolution No. 644 and the complaint for the impeachment attached thereto are
unconstitutional, implying thereby that the Batasan or the Committee thereof had, in the exercise
of powers vested upon it by the Constitution, transgressed or violated the Constitution, certainly
a justiciable question.
The provisions of the Rules of Procedure for Impeachment claimed by petitioners to be violative
of the Constitution are the following:
"SEC. 4. Notice to Complainant and Respondent. Upon due referral
the Committee on Justice, Human Rights and Good Government shall
determine whether the complaint is sufficient in form and substance. If it
finds that the complaint is not sufficient in form and substance, it shall
dismiss the complaint and shall submit its report as provided hereunder. If
it finds the complaint sufficient in form and substance, it shall furnish the
respondent with copy of the resolution and verified complaint with advice
that he may answer the complaint within fifteen (15) days from notice.
The answer may include affirmative defenses. With leave of the
Committee, the complainant may file a reply and the respondent, a
rejoinder.
"SEC. 5. Submission of Evidence and Memoranda. After receipt of
pleadings provided for in Section 4, or the expiration of the time within
which they maybe filed, the Committee shall determine whether sufficient
grounds for impeachment exist. If it finds that sufficient grounds for
impeachment do not exist, the Committee shall dismiss the complaint and
submit the report required hereunder. If the Committee finds that sufficient
grounds for impeachment exist, the Committee shall require the parties to

59

support their respective allegations by the submission of affidavits and

counter-affidavits, including duly authenticated documents as may appear
relevant. The Committee may, however, require that instead of affidavits
and counter-affidavits, oral testimony shall be given. It may at all events
examine and allow cross-examination of the parties and their witnesses.

Batasan for the approval of the resolution setting forth the Articles of Impeachment, the Rules
impose a condition not required by the Constitution for all that Section 3, Article XIII requires is
the endorsement of at least one-fifth of all the members of the Batasan for the initiation of
impeachment proceedings or for the impeachment trial to proceed.
It is the contention of the respondents Speaker Nicanor Yiguez and the Members of the
Committee on Justice of the Batasan Pambansa that the petition should be dismissed because
(1) it is a suit against the Batasan itself over which this Court has no jurisdiction; (2) it raises
questions which are political in nature; (3) the Impeachment Rules are strictly in consonance
with the Constitution and even supposing without admitting that the Rules are invalid, their
invalidity would not nullify the dismissal of the complaint for impeachment for the Batasan as a
body sovereign within its own sphere has the power to dismiss the impeachment complaint even
without the benefit of said Rules; and (4) the Court cannot by mandamus compel the Batasan to
give due course to the impeachment complaint.

"After the submission of evidence, the Committee may require the

submission of memoranda, after which the matter shall be submitted for
resolution.
"SEC. 6. Report and Recommendations. The Committee on Justice,
Human Rights and Good Government shall submit a report of the
Batasan containing its findings and recommendations within thirty (30)
session days from submission of the case for resolution.

Respondent Renato L. Cayetano on the other hand contends that (1) the question involved is
purely political; (2) the petitioners are not proper parties; (3) the petition is in reality a request for
an advisory opinion made in the absence of an actual case or controversy; (4) prohibition and
mandamus are not proper remedies, and (5) preliminary mandatory injunction is not proper;
while respondent Salacnib P. Baterina contends that the petitioners lack standing to sue and
impeachment is a power lodged exclusively in the Batasan. Cdpr

"If the Committee finds by a vote of majority of all its members that
probable cause has been established. It shall submit with its report a
resolution setting forth the Articles of Impeachment on the basis of the
evidence adduced before the Committee.
"If the Committee finds that probable cause has not been established, the
complaint shall be dismissed subject to Section 9 of these Rules.

A closer look at the substance than the form of the petition would reveal that resolution of the
constitutionality of the questioned provisions of the Rules is not even necessary. What
petitioners are really seeking is for this Court to compel the Batasan to proceed with the hearing
on the impeachment of the President since more than one-fifth of all the members of the
Batasan had filed a resolution for the impeachment of the President and the Batasan as a body
is bound under the Constitution to conduct said trial and render judgment only after said trial and
that the Committee on Justice has no authority to dismiss the complaint for impeachment on the
ground that it is not sufficient in form and substance. Petitioners, therefore, ask that this Court
order the Committee on Justice, Human Rights and Good Government to recall from the
Archives the Resolution No. 644 and the complaint for impeachment "in order that the
impeachment trial can be conducted forthwith by the Batasan as a body." (Prayer of the Petition,
subpar, (ii) of Par, 2).

"SEC. 8. Vote Required for Trial. A majority vote of all the members of
the Batasan is necessary for the approval of the resolution setting forth
the Articles of Impeachment. If the resolution is approved by the required
vote, it shall then be set for trial on the merits by the Batasan. On the
other hand, should the resolution fail to secure approval by the required
vote, the same shall result in the dismissal of the complaint for
impeachment."
It is petitioners' contention that said provisions are unconstitutional because they amend Sec. 3
of Article XIII of the 1973 Constitution, without complying with the mandatory amendatory
process provided for under Article XVI of the Constitution, by empowering a smaller body to
supplant and overrule the complaint to impeach endorsed by the requisitive 115 of all the
members of the Batasan Pambansa and that said questioned provisions derail the impeachment
proceedings at various stages by vesting the Committee on Justice, etc. the power to impeach or
not to impeach, when such prerogative belongs solely to Batasan Pambansa as a collegiate
body.

The question squarely presented before this Court is therefore: Has this Court jurisdiction to
order the Committee on Justice, Human Rights and Good Government to recall from the
Archives and report out the resolution and complaint for impeachment? Can this court, assuming
said resolution and complaint for impeachment are recalled from the Archives, order the Batasan
to conduct a trial on the charges contained in said resolution and complaint for impeachment?

Petitioners further contend that Section 8 of the Rules is unconstitutional because it imposes an
unconstitutional and illegal condition precedent in order that the complaint for impeachment can
proceed to trial before the Batasan. By requiring a majority vote of all the members of the

What is important to note is that when the Batasan denied the motion of MP Ramon Mitra for the
recall from the Archives of Resolution No. 644 and the complaint for impeachment, it had in

60

effect confirmed the action of the Committee on Justice, Human Rights and Good Government
dismissing said resolution and complaint on impeachment. That the Batasan by even a majority
vote can dismiss a complaint for impeachment cannot be seriously disputed. Since
the Constitution expressly provides that "no official shall be convicted without the concurrence of
at least two-thirds of all its members," a majority vote of all the members of the Batasan
confirming the action of the Committee on Justice, Human Rights and Good Government
disapproving the resolution calling for the impeachment of the President and dismissing all the
charges contained in the complaint attached thereto, makes mathematically impossible the
required at least two-thirds vote of all members of the Batasan to support a judgment of
conviction. What purpose would be served by proceeding further when it is already obvious that
the required two-thirds vote for conviction cannot be obtained? Dismissal of the impeachment
proceedings would then be in order.

secretary, the sergeant-at-arms, and the disbursing officer of the

Philippine Senate to do one thing, and the Philippine Senate ordering
them to do another thing. The writ of mandamus should not be granted
unless it clearly appears that the person to whom it is directed has the
absolute power to execute it. (Turnbull vs. Giddings [1893], 95 Mich. 314;
Abueva vs. Wood, supra.) (On page 94).
See also Abueva vs. Wood, 46 Phil. 612, 636, where the Court said:
". . . While it has been decided in many cases that the courts will not
interfere with the legislative department of the government in the
performance of its duties, does that rule apply to the committees duly
appointed by the legislative department of the government and its
officers? The powers and duties conferred upon said committee by the
Legislature granting the legality of the object and purpose of said
committee, and granting that the Legislature itself had the power to do
and to perform the duties imposed upon said committee, then an
interference by the courts with the performance of those duties by it
would be tantamount to interfering with the workings and operations of
the legislative branch of the government itself. An interference by the
judicial department of the government with the workings and operations
of the committee of the legislative department would be tantamount to an
interference with the workings and operations of the legislative
department itself. And, again, we are called upon to say, that one branch
of the government cannot encroach upon the domain of another without
danger. The safety of our institutions depends in no small degree on a
strict observance of this salutary rule. (Sinking Fund Cases, 99 U.S., 700,
718; Clough vs. Curtis, 134 U.S., 361, 371; Wise vs. Bigger, 79 Va.,
269)."

A dismissal by the Batasan itself as a body of the resolution and complaint for impeachment
(which is what the denial by the Batasan of MP Mitra's motion to recall from the Archives said
resolution and complaint for impeachment is tantamount to) makes irrelevant under what
authority the Committee on Justice, Human Rights and Good Government had acted. The
dismissal by the majority of the members of the Batasan of the impeachment proceedings is an
act of the Batasan as a body in the exercise of powers that have been vested upon it by
the Constitution beyond the power of this Court to review. This Court cannot compel the Batasan
to conduct the impeachment trial prayed for by petitioners.
The fact that petitioners are asking that it is the Committee on Justice, Human Rights and Good
Government, not the Batasan itself, which shall be commanded by this Court to recall from the
Archives and report out the resolution and complaint for impeachment is of no moment. Aside
from the fact that said Committee cannot recall from the Archives said resolution and complaint
for impeachment without revoking or rescinding the action of the Batasan denying MP Mitra's
motion for recall (which of course it had no authority to do and, therefore, said Committee is in
no position to comply with any order from this Court for said recall) such an order addressed to
the Committee would actually be a direct order to the Batasan itself Such in effect was the ruling
in Alejandrino vs. Quezon 46 Phil. 83, where this Court said:

Moreover, while in their petition petitioners merely asked for a writ of preliminary mandatory
injunction "commanding the Batasan Committee on Justice, Human Rights and Good
Government to recall from the Archives and report out subject resolution and verified complaint
for the impeachment of President Ferdinand E. Marcos," their ultimate objective is to have the
Batasan as a body proceed with the impeachment trial. Recall of the resolution and complaint for
impeachment would be meaningless unless the Batasan can also be compelled to conduct the
impeachment trial.

"It is intimated rather faintly that, conceding all that is said with reference
to the right of the Supreme Court to issue mandamus directed to the
Philippine Senate, yet we would be justified in having our mandate run not
against the Philippine Senate or against the President of the Philippine
Senate and his fellow Senators but against the secretary, the sergeant-atarms, the disbursing officer of the Senate. But this begs the question. If
we have no authority to control the Philippine Senate, we have no
authority to control the actions of subordinate employees acting under the
direction of the Senate. The secretary, sergeant-at-arms, and disbursing
officer of the Senate are mere agents of the Senate who cannot act
independently of the will of that body. Should the Court do as requested,
we might have the spectacle presented of the court ordering the

For this Court to issue a writ of mandamus to the Committee on Justice, Human Rights and
Good Government, would be but an empty and meaningless gesture unless it would also order
the Batasan to proceed to try the impeachment proceedings. This, of course, the Court cannot
do. Quoting Judge Cooley in Sutherland vs. Governor of Michigan, 29 Mich. 320:

61

". . . in a case where jurisdiction is involved, no doubt it is not consistent

with the dignity of the court to pronounce judgments which may be
disregarded with impunity . . ."

Committee on Justice, Human Rights and Good Government to dismiss the complaint for
impeachment which it finds not sufficient in form and substance (Sec. 4), does not have
sufficient grounds for impeachment (Sec. 5), or where probable cause has not been established
(Sec. 6). All of said actions of the Committee refer to the disposition of a complaint for
impeachment initiated by at least one-fifth of all the members of the Batasan. Their purpose is to
determine whether or not a complaint for impeachment initiated by the required number of
members of the Batasan warrants being referred to the Batasan for trial. They are not properly
part of the "initiation phase" of the impeachment proceeding but of the "trial phase", or more
accurately the "preparatory to trial" phase. Such actions are liken to actions taken by this Court
in determining whether a petition duly filed should be given due course or should be dismissed
outright.

The admonition of Alejandrino vs. Alejandrino vs. Quezon, supra, is of much relevance.
". . . But certainly mandamus should never issue from this court where it
will not prove to be effectual and beneficial. It should not be awarded
where it will create discord and confusion. It should not be awarded
where mischievous consequences are likely to follow. Judgment should
not be pronounced which might possibly lead to unseemly conflicts or
which might be disregarded with impunity. This court should offer no
means by a decision for any possible collision between it as the highest
court in the Philippines and the Philippine Senate as a branch of a
coordinate department or between the Court and the Chief Executive or
the Chief Executive and the Legislature." (On page 95).

While the Batasan has assigned to the Committee on Justice, Human Rights and Good
Government the task of determining whether the petition is sufficient in form or substance, or that
sufficient ground for impeachment exist or that probable cause has been established, said
Committee is required to submit its report to the Batasan which has the ultimate decision
whether to approve or disapprove said report. If the Batasan approves the Committee report
dismissing the complaint, said report is noted by the Batasan and sent to the Archives.

In any event, We find no basis for the contention of petitioners that Sections 4, 5, 6 and 8 of the
Rules of Procedure in Impeachment are violative of the provisions of theConstitution on
Impeachment. As We said in Arturo de Castro vs. Committee on Justice, et al. (G.R. No. L71688), "beyond saying that the Batasan may initiate impeachment by a vote of at least one-fifth
of all its members and that no official shall be convicted without the concurrence of at least twothirds of all the members thereof, the Constitution says no more." The Batasan pursuant to its
power to adopt rules of its proceedings Article VIII, Sec. 8[3], may adopt, as it did adopt,
necessary rules of procedure to govern impeachment proceedings. The rules it adopted
providing for dismissal of a complaint for impeachment which is not sufficient in form or
substance, or when sufficient grounds for impeachment do not exist, or probable cause has not
been established, or requiring a majority vote of all members of the Batasan for the approval of
the resolution setting forth the Articles of Impeachment, are not inconsistent with the provision of
Section 3 of Article XIII of the1973 Constitution.

That the Rules on Impeachment of the Interim Batasan in the judgment of petitioners is better is
no argument against the validity or constitutionality of the Rules on Impeachment approved by
the Batasan. More importantly, said Rules are always within the power of the Batasan to modify,
change or replace any time. They do not have the force of law but are merely in the nature of bylaws prescribed for the orderly and convenient conduct of proceedings before the Batasan. They
are merely procedural and not substantive (43 C.J. 527). They may be waived or disregarded by
the Batasan and with their observance the Courts have no concern. (South Georgia Power Co.
vs. Baumann, 169 Ga. 649;151 SE 513). As the Court said in State vs. Alt, 6 Mo. A. 673, quoted
in 46 C.J. 1383 Note 31:
The rules of public deliberative bodies, whether codified in the form of a
'manual' end formally adopted by the body, or whether consisting of a
body of unwritten customs or usages, preserved in memory and by
tradition, are matters of which the judicial courts, as a general rule, take
no cognizance. It is a principle of the common law of England that the
judicial courts have no conusance of what is termed the lex et consuetudo
parliamenti . . . And, although this doctrine is not acceded to, in this
country, to the extent to which it has gone in England, where the judicial
courts have held that they possess no jurisdiction to judge of the powers
of the House of Parliament, yet no authority is cited to us, and we do not
believe that respectable judicial authority exists, for the proposition that
the judicial courts have power to compel legislative, or quasi-legislative
bodies to proceed in the conduct of their deliberations, or in the exercise
of their powers, in accordance with their own rules. If the Congress of the
United States disregards theconstitution of the United States, or, if the

More specifically, the provision requiring concurrence of at least two-thirds votes of all members
of the Batasan for conviction is not violated by any provision of the Rules which authorizes
dismissal of a petition by a majority vote of the Batasan since with such number of votes it is
obvious that the two-thirds vote of all members necessary for conviction can no longer be
obtained. Such being the case, the Batasan can specify in its rules how and when the
impeachment proceedings can be terminated or dismissed for Section 3, Article XIII merely
provides for how a judgment of conviction can be sustained but is silent on how a complaint for
impeachment can be dismissed when it becomes apparent that a judgment of conviction by the
required number of votes is not possible.
Neither is the Constitutional provision to the effect that impeachment may be initiated by a vote
of at least one-fifth of the members violated by the provision of the Rules authorizing the

62

Aquino, C.J., Concepcion, Jr., Melencio-Herrera, Plana, Escolin, Gutierrez, Jr., De la Fuente,
Cuevas and Alampay, JJ., concur.

legislature of one of the states disregards the constitution of the state, or

of the United States, the power resides in the judicial courts to declare its
enactments void. If an inferior quasi legislative body, such as the council
of a municipal corporation, disregards its own organic law, that is, the
charter of the corporations, the judicial courts, for equal, if not for stronger
reasons, possess the same power of annulling its ordinances. But we are
not aware of any judicial authority, or of any legal principle, which will
authorize the judicial courts to annul an act of the legislature, or an
ordinance of a municipal council, merely because the one or the other
was enacted in disregard of the rules which the legislature, or the
municipal council, or either house thereof, had prescribed for its own
government."

Abad Santos, J., I reserve my vote.

Teehankee, J., I reserve my vote. It may be observed, though, that this is one petition that,
following the Court's customary disposition, may well be dismissed for having become moot and
academic, in view of the expiration of the term of the incumbent President upon the holding of
the presidential elections scheduled on February 7, 1986, in which the charges brought in the
impeachment resolution and verified complaint may be duly submitted to the people for their
proper consideration and judgment.

To the same effect is 67 Corpus Juris Secundum, 870, where it was said:

||| (Romulo v. Yiguez, G.R. No. 71908, [February 4, 1986], 225 PHIL 221-239)

"Rules of parliamentary practice are merely procedural and not

substantive. The rules of procedure adopted by deliberative bodies have
not the force of a public law, but they are merely in the nature of by-laws,
prescribed for the orderly and convenient conduct of their own
proceedings. The rules adopted by deliberative bodies are subject to
revocation, modification, or waiver at the pleasure of the body adopting
them. Where a deliberative body adopts rules of order for its
parliamentary governance, the fact that it violates one of the rules so
adopted may not invalidate a measure passed in compliance with statute.
The rules of procedure passed by one legislative body are not binding on
a subsequent legislative body operating within the same jurisdiction, and,
where a body resolves that the rules of a prior body be adopted until a
committee reports rules, the prior rules cease to be in force on the report
of the committee. It may be of assistance, in determining the effect of
parliamentary law, to consider the nature of the particular deliberative
body."

EN BANC
[G.R. No. L-52245. January 22, 1980.]
PATRICIO DUMLAO, ROMEO B. IGOT, and ALFREDO SALAPANTAN,
JR.,petitioners, vs. COMMISSION ON ELECTIONS, respondent.
Raul M . Gonzales for petitioners.

Finally, in the present case, injunction to restrain the enforcement of the particular provisions of
the Rules will not lie (aside from the fact that the question involved is political) because the acts
of the Committee sought to be restrained have already been consummated. They are fait
accompli. Prohibition or injunction would not issue to restrain acts already performed or
consummated. Remonte vs. Banto, 16 SCRA 257, Aragones vs. Subido, 25 SCRA 95.

Office of the Solicitor General for respondent.

DECISION
MELENCIO-HERRERA, J p:

IN VIEW OF THE FOREGOING, judgment is hereby rendered DISMISSING the petition for lack
of merit, without pronouncement as to costs.

This is a Petition for Prohibition with Preliminary Injunction and/or Restraining Order filed by
petitioners, in their own behalf and all others allegedly similarly situated, seeking to enjoin
respondent Commission on Elections (COMELEC) from implementing certain provisions of
Batas Pambansa Blg. 51, 52, and 53 for being unconstitutional.

SO ORDERED.

63

The Petition alleges that petitioner, Patricio Dumlao, is a former Governor of Nueva Vizcaya, who
has filed his certificate of candidacy for said position of Governor in the forthcoming elections of
January 30, 1980. Petitioner, Romeo B. Igot, is a taxpayer, a qualified voter and a member of the
Bar who, as such, has taken his oath to support theConstitution and obey the laws of the land.
Petitioner, Alfredo Salapantan, Jr., is also a taxpayer, a qualified voter, and a resident of San
Miguel, Iloilo. cdasia

offices covered by this Act, or to participate in any partisan political

activity therein:
provided, that a judgment of conviction for any of the aforementioned
crimes shall be conclusive evidence of such fact and.
the filing of charges for the commission of such crimes before a civil court
or military tribunal after preliminary investigation shall be prima facie
evidence of such fact.

Petitioner Dumlao specifically questions the constitutionality of section 4 of Batas Pambansa Blg.
52 as discriminatory and contrary to the equal protection and due process guarantees of
the Constitution. Said Section 4 provides:

". . . (Batas Pambansa Blg. 52) (Paragraphing and emphasis supplied).

"Sec. 4. Special Disqualification. In addition to violation of section 10 of

Art. XII-C of the Constitution and disqualification mentioned in existing
laws, which are hereby declared as disqualification for any of the elective
officials enumerated in section 1 hereof.

"Section 1. Election of certain Local Officials. . . . The election shall be

held on January 30, 1980." (Batas Pambansa, Blg. 52).
"Section 6. Election and Campaign Period. The election period shall be
fixed by the Commission on Elections in accordance with Section 6, Art.
XII-C of theConstitution. The period of campaign shall commence on
December 29, 1979 and terminate on January 28, 1980." (ibid.)

Any retired elective provincial, city of municipal official who has received
payment of the retirement benefits to which he is entitled under the law
and who shall have been 65 years of age at the commencement of the
term of office to which he seeks to be elected, shall not be qualified to run
for the same elective local office from which he has retired."
(Paragraphing and emphasis supplied)

In addition to the above-cited provisions, petitioners Igot and Salapantan, Jr. also question the
accreditation of some political parties by respondent COMELEC, as authorized by Batas
Pambansa Blg. 53, on the ground that it is contrary to section 9(1), Art. XII(C) of the Constitution,
which provides that a "bona fide candidate for any public office shall be free from any form of
harassment and discrimination."

Petitioner Dumlao alleges that the aforecited provision is directed insidiously against him, and
that the classification provided therein is based on "purely arbitrary grounds and, therefore, class
legislation."

The question of accreditation will not be taken up in this case but in that of Bacalso, et als., vs.
COMELEC et als. (G.R. No. L-52232) where the issue has been squarely raised. cdasia

For their part, petitioners Igot and Salapantan, Jr. assail the validity of the following statutory
provisions:

Petitioners then pray that the statutory provisions they have challenged be declared null and void
for being violative of the Constitution.

"Sec. 7. Term of office. Unless sooner removed for cause, all local
elective officials hereinabove mentioned shall hold office for a term of six
(6) years. which shall commence on the first Monday of March 1980."

I. The procedural aspect.

. . ." Batas Pambansa Blg. 51

At the outset, it should be stated that this Petition suffers from basic procedural infirmities,
hence, traditionally unacceptable for judicial resolution. For one, there is a misjoinder of parties
and actions. Petitioner Dumlao's interest is alien to that of petitioners Igot and Salapantan.
Petitioner Dumlao does not join petitioners Igot and Salapantan in the burden of their complaint,
nor do the latter join Dumlao in his. They, respectively, contest completely different statutory
provisions. Petitioner Dumlao has joined this suit in his individual capacity as a candidate. The
action of petitioners Igot and Salapantan is more in the nature of a taxpayer's suit. Although
petitioners plead time constraints as the reason of their joint Petition, it would have required only

"Sec. 4. . . .
"Any person who has committed any act of disloyalty to the State,
including acts amounting to subversion, insurrection, rebellion or other
similar crimes, shall not be qualified to be a candidate for any of the

64

a modicum more of effort for petitioner Dumlao, on one hand, and petitioners Igot and
Salapantan, on the other, to have filed separate suits, in the interest of orderly procedure.

"Section 11. Any decision, order, or ruling of the Commission may be

brought to the Supreme Court on certiorari by the aggrieved party within
thirty days from his receipt of a copy thereof."

For another, there are standards that have to be followed in the exercise of the function of judicial
review, namely: (1) the existence of an appropriate case; (2) an interest personal and substantial
by the party raising the constitutional question; (3) the plea that the function be exercised at the
earliest opportunity; and (4) the necessity that the constitutional question be passed upon in
order to decide the case (People vs. Vera, 65 Phil. 56 [1937]).

B. Proper party.
The long-standing rule has been that "the person who impugns the validity of a statute must
have a personal and substantial interest in the case such that he has sustained, or will sustain,
direct injury as a result of its enforcement" (People vs. Vera, supra).

It may be conceded that the third requisite has been complied with, which is, that the parties
have raised the issue of constitutionality early enough in their pleadings.

In the case of petitioners Igot and Salapantan, it was only during the hearing, not in their Petition,
that Igot is said to be a candidate for Councilor. Even then, it cannot be denied that neither one
has been convicted nor charged with acts of disloyalty to the State, nor disqualified from being
candidates for local elective positions. Neither one of them has been alleged to have been
adversely affected by the operation of the statutory provisions they assail as unconstitutional.
Theirs is a generalized grievance. They have no personal nor substantial interest at stake. In the
absence of any litigate interest, they can claim nolocus standi in seeking judicial redress. LibLex

This Petition, however, has fallen far short of the other three criteria.
A. Actual case and controversy.
It is basic that the power of judicial review is limited to the determination of actual cases and
controversies.

It is true that petitioners Igot and Salapantan have instituted this case as a taxpayer's suit, and
that the rule enunciated in People vs. Vera, above stated, has been relaxed in Pascual vs. The
Secretary of Public Works (110 Phil. 331 [1960], thus:

Petitioner Dumlao assails the constitutionality of the first paragraph of section 4 of Batas
Pambansa Blg. 52, quoted earlier, as being contrary to the equal protection clause guaranteed
by the Constitution, and seeks to prohibit respondent COMELEC from implementing said
provision. Yet, Dumlao has not been adversely affected by the application of that provision. No
petition seeking Dumlao's disqualification has been filed before the COMELEC. There is no
ruling of that constitutional body on the matter, which this Court is being asked to review on
Certiorari. His is a question posed in the abstract, a hypothetical issue, and in effect, a petition
for an advisory opinion from this Court to be "rendered without the benefit of a detailed factual
record." Petitioner Dumlao's case is clearly within the primary jurisdiction (see concurring
Opinion of now Chief Justice Fernando in Peralta vs. Comelec, 82 SCRA 30, 96 [1978]) of
respondent COMELEC as provided for in section 2, Art. XII-C, for the Constitution the pertinent
portion of which reads:

". . . it is well settled that the validity of a statute may be contested only by
one who will sustain a direct injury in consequence of its enforcement.
Yet, there are many decisions nullifying, at the instance of taxpayers, laws
providing for the disbursement of public funds, upon the theory that 'the
expenditure of public funds, by an officer of the State for the purpose of
administering an unconstitutional act constitutes a misapplication of such
funds,' which may be enjoined at the request of a taxpayer."
In the same vein, it has been held:

"Section 2. The Commission on Elections shall have the following power

and functions.

"In the determination of the degree of interest essential to give the

requisite standing to attack the constitutionality of a statute, the general
rule is that not only persons individually affected, but also taxpayers have
sufficient interest in preventing the illegal expenditure of moneys raised by
taxation and they may, therefore, question the constitutionality of statutes
requiring
expenditure
of
public
moneys."
(Philippine Constitution Association, Inc., et als., vs. Gimenez, et als. 15
SCRA 479 [1965]).

1) . . .
2) Be the sole judge of all contests relating to the elections, returns
andqualifications of all members of the National Assembly and elective
provincial and city officials." (Emphasis supplied)

However, the statutory provisions questioned in this case, namely, sec. 7, BP Blg. 51, and
sections 4, 1, and 6 BP Blg. 52, do not directly involve the disbursement of public funds. While,

The aforequoted provision must also be related to section 11 of Art. XII-C, which provides:

65

concededly, the elections to be held involve the expenditure of public moneys, nowhere in their
Petition do said petitioners allege that their tax money is "being extracted and spent in violation
of specific constitutional protections against abuses of legislative power" (Flast v. Cohen, 392
U.S., 83 [1960]), or that there is a misapplication of such funds by respondent COMELEC (see
Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public money is being
deflected to any improper purpose. Neither do petitioners seek to restrain respondent from
wasting public funds through the enforcement of an invalid or unconstitutional law.
(Philippine Constitution Association
vs.
Mathay,
18
SCRA
300
[1966]),
citing
Philippine Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution
of a taxpayer's suit, per se, is no assurance of judicial review. As held by this Court in Tan vs.
Macapagal (43 SCRA 677 [1972]), speaking through our present Chief Justice, this Court is
vested with discretion as to whether or not a taxpayer's suit should be entertained.

rational classification. If the groupings are based on reasonable and real differentiations, one
class can be treated and regulated differently from another class. For purposes of public service,
employees 65 years of age, have been validly classified differently from younger employees.
Employees attaining that age are subject to compulsory retirement, while those of younger ages
are not so compulsorily retirable.

C. Unavoidability of constitutional question.

Coming now to the case of retirees. Retirement from government service may or may not be a
reasonable disqualification for elective local officials. For one thing, there can also be retirees
from government service at ages, say below 65. It may neither be reasonable to disqualify
retirees, aged 65, for a 65-year old retiree could be a good local official just like one, aged 65,
who is not a retiree.

In respect of election to provincial, city, or municipal positions, to require that candidates should
not be more than 65 years of age at the time they assume office, if applicable to everyone, might
or might not be a reasonable classification although, as the Solicitor General has intimated, a
good policy of the law should be to promote the emergence of younger blood in our political
elective echelons. On the other hand, it might be that persons more than 65 years old may also
be good elective local officials.

Again upon the authority of People vs. Vera, "it is a well-settled ruled that the constitutionality of
an act of the legislature will not be determined by the courts unless that question is properly
raised an presented in appropriate cases and is necessary to a determination of the case; i.e.,
the issue of constitutionality must be the very lis motapresented."

But, in the case of a 65-year old elective local official, who has retired from a provincial, city or
municipal office, there is reason to disqualify him from running for the same office from which he
had retired, as provided for in the challenged provision. The need for new blood assumes
relevance. The tiredness of the retiree for government work is present, and what is emphatically
significant is that the retired employee has already declared himself tired an unavailable for the
same government work, but, which, by virtue of a change of mind, he would like to assume
again. It is for the very reason that inequality will neither result from the application of the
challenged provision. Just as that provision does not deny equal protection, neither does it
permit such denial (see People vs. Vera, 65 Phil. 56 [1933]). Persons similarly situated are
similarly treated.

We have already stated that, by the standards set forth in People vs. Vera, the present is not an
"appropriate case" for either petitioner Dumlao or for petitioners Igot and Salapantan. They are
actually without cause of action. It follows that the necessity for resolving the issue of
constitutionality is absent, and procedural regularity would require that his suit be dismissed.
II. The substantive viewpoint.
We have resolved, however, to rule squarely on two of the challenged provisions, the Courts not
being entirely without discretion in the matter. Thus, adherence to the strict procedural standard
was relaxed in Tinio vs. Mina (26 SCRA 512 [1968]); Edu vs. Ericta (35 SCRA 481 [1970]); and
in Gonzalez vs. Comelec (27 SCRA 835 [1969]), the Opinion in the Tinio and Gonzales cases
having been penned by our present Chief Justice. The reasons which have impelled us are the
paramount public interest involved and the proximity of the elections which will be held only a
few days hence.

In fine, it bears reiteration that the equal protection clause does not forbid all legal classification.
What is proscribes is a classification which is arbitrary and unreasonable. That constitutional
guarantee is not violated by a reasonable classification is germane to the purpose of the law and
applies to all those belonging to the same class (Peralta vs. Comelec, 82 SCRA 30 [1978] citing
Felwa vs. Salas, 18 SCRA 606 [1966]; Rafael v. Embroidery and Apparel Control and Inspection
Board, 21 SCRA 336 [1967]; Inchong, etc., et al. vs. Hernandez, 101 Phil. 1155 [1957]). The
purpose of the law is to allow the emergence of younger blood in local governments. The
classification in question being pursuant to that purpose, it cannot be considered invalid "even if
at times, it may be susceptible to the objection that it is marred by theoretical inconsistencies:
(Chief Justice Fernando, The Constitution of the Philippines, 1977 ed., p. 547).

Petitioner Dumlao's contention that section 4 of BP Blg. 52 is discriminatory against him

personally is belied by the fact that several petitions for the disqualification of other candidates
for local positions based on the challenged provision have already been filed with the COMELEC
(as listed in p. 15, respondent's Comment). This tellingly overthrows Dumlao's contention of
intentional or purposeful discrimination. LexLib

There is an additional consideration. Absent herein is a showing of the clear invalidity of the
questioned provision. Well accepted is the rule that to justify the nullification of a law, there must

The assertion that Section 4 of BP Blg. 52 is contrary to the safeguard of equal protection is
neither well taken. The constitutional guarantee of equal protection of the laws is subject to

66

be a clear and unequivocal breach of the Constitution, not a doubtful and equivocal breach.
Courts are practically unanimous in the pronouncement that laws shall not be declared invalid
unless the conflict with the Constitution is clear beyond reasonable doubt (Peralta vs.
COMELEC, 82 SCRA 55 [1978], citing Cooper vs. Telfair, 4 Dall. 14; Dodd, Cases on
Constitutional Law, 3rd ed. 1942, 56). Lastly, it is within the competence of the legislature to
prescribe qualifications for one who desires to become a candidate for office provided they are
reasonable, as in this case.

thereby be avoided. Furthermore, a legislative/administrative determination of guilt should not be

allowed to be substituted for a judicial determination.

Being infected with constitutional infirmity, a partial declaration of nullity of only that objectionable
portion is mandated. It is separable from the first portion of the second paragraph of section 4 of
Batas Pambansa Blg. 52 which can stand by itself.

In so far as the petition of Igot and Salapantan are concerned, the second paragraph of section
4 of Batas Pambansa Blg. 52, quoted in full earlier, and which they challenged, may be divided in
two parts. The first provides:

WHEREFORE, 1) the first paragraph of section 4 of Batas Pambansa Bilang 52 is hereby

declared valid. Said paragraph reads:

"a judgment of conviction for any of the aforementioned crimes shall be

conclusive evidence of such fact. . . . "

"SEC. 4. Special disqualification. In addition to violation of Section 10

of Article XII(C) of the Constitution and disqualifications mentioned in
existing laws which are hereby declared as disqualifications for any of the
elective officials enumerated in Section 1 hereof, any retired elective
provincial, city or municipal official, who has received payment of the
retirement benefits to which he is entitled under the law and who shall
have been 65 years of age at the commencement of the term of office to
which he seeks to be elected, shall not be qualified to run for the same
elective local office from which he has retired."

The supremacy of the Constitution stands out as the cardinal principle. We are aware of the
presumption of validity that attached to a challenged statute, of the well-settled principle that "all
reasonable doubts should be resolved in favor of constitutionality," and that Courts will not set
aside a statute as constitutionally defective "except in a clear case." (People vs. Vera, supra).
We are constrained to hold that this in one such clear case. Cdphil
Explicit is the constitutional provision that, in all criminal prosecutions, the accused shall be
presumed innocent until the contrary is proved, and shall enjoy the right to be heard by himself
and counsel (Article IV, section 19, 1973 Constitution). An accusation, according to the
fundamental law, is not synonymous with guilt. The challenged proviso contravenes the
constitutional presumption of innocence, as a candidate is disqualified from running from public
office on the ground alone that charges have been filed against him before a civil or military
tribunal. It condemns before one is fully heard. In ultimate effect, except as to the degree of
proof, no distinction is made between a person convicted of acts of disloyalty and one against
whom charges have been filed for such acts, as both of them would be ineligible to run for public
office. A person disqualified to run for public office on the ground that charges have been filed
against him is virtually placed in the same category as a person already convicted of a crime
with the penalty of arresto, which carries with it the accessory penalty of suspension of the right
to hold office during the term of the sentence (Art. 44, Revised Penal Code).

2) That portion of the second paragraph of section 4 of Batas Pambansa Bilang 52providing that
". . . the filing of charges for the commission of such crimes before a civil court or military tribunal
after preliminary investigation shall be prima facie evidence of such fact", is hereby declared null
and void, for being violative of the constitutional presumption of innocence guaranteed to an
accused.
SO ORDERED.
Makasiar, Antonio, Concepcion Jr., Fernandez and Guerrero, JJ ., concur.
De Castro, J ., abstain as far as petitioner Dumlao is concerned.
||| (Dumlao v. Commission on Elections, G.R. No. L-52245, [January 22, 1980], 184 PHIL 369395)

And although the filing of charges is considered as but prima facie evidence, and therefore, may
be rebutted, yet, there is "clear and present danger" that because the proximity of the elections,
time constraints will prevent one charged with acts of disloyalty from offering contrary proof to
overcome the prima facie evidence against him.
Additionally, it is best that evidence pro and con of acts of disloyalty be aired before the Courts
rather than before an administrative body such as the COMELEC. A highly possible conflict of
finding between two government bodies, to the extreme detriment of a person charged, will

EN BANC
[G.R. No. 118910. November 16, 1995.]

67

KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A.

RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO,
EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE,
CHRISTINE TAN, RAFAEL G. FERNANDO, RAOUL V. VICTORINO,
JOSE CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE WEBB,
SEN.
WIGBERTO
TAADA,
REP.
JOKER
P.
ARROYO, petitioners, vs. MANUEL L. MORATO, in his capacity as
Chairman of the Philippine Charity Sweepstakes Office, and the
PHILIPPINE GAMING MANAGEMENT CORPORATION, respondents.

standing, as the case may be, may invoke the judicial power. The jurisdiction of this Court, even
in cases involving constitutional questions, is limited by the "case and controversy" requirement
of Art. VIII, 5. This requirement lies at the very heart of the judicial function. It is what
differentiates decision-making in the courts from decision-making in the political departments of
the government and bars the bringing of suits by just any party.
4. ID.; ID.; ID.; TAXPAYERS, VOTERS, CONCERNED CITIZENS AND LEGISLATORS HAVE
BEEN ALLOWED TO SUE ONLY IN CASES INVOLVING CONSTITUTIONAL ISSUES AND
UNDER CERTAIN CONDITIONS. It is nevertheless insisted that this Court has in the past
accorded standing to taxpayers and concerned citizens in cases involving "paramount public
interest." Taxpayers, voters, concerned citizens and legislators have indeed been allowed to sue
but then only (1) in cases involving constitutional issues and (2) under certain conditions.
Petitioners do not meet these requirements on standing.

Jovito R. Salonga, Fernando A. Santiago and Emilio C. Capulong, Jr. for petitioners.
Renato L. Cayetano, Regina Maria S. Riel, Eleazar B. Reyes and Nellie Jo P. Aujero for
respondent PGMC.

5. ID.; ID.; ID.; INSTANCES WHEN TAXPAYERS, VOTERS, CONCERNED CITIZENS AND
LEGISLATORS HAVE BEEN ALLOWED TO SUE, CITED. Taxpayers are allowed to sue, for
example, where there is a claim of illegal disbursement of public funds. (Pascual v. Secretary of
Public Works, 110 Phil. 331 [1960] and other cases cited) or where a tax measure is assailed as
unconstitutional. (VAT Cases [Tolentino v. Secretary of Finance], 235 SCRA 630
[1994]) Voters are allowed to question the validity of election laws because of their obvious
interest in the validity of such laws. (Gonzales v. Comelec, 21 SCRA 774 [1967]) Concerned
citizens can bring suits if the constitutional question they raise is of "transcendental importance"
which must be settled early. (Emergency Powers Cases [Araneta v. Dinglasan], 84 Phil. 368
[1949] and other cases cited). Legislators are allowed to sue to question the validity of any
official action which they claim infringes their prerogatives qua legislators. (Philconsa v.
Enriquez, 235, 506 [1994] and other cases cited).

The Solicitor General for respondent. LexLibris

SYLLABUS
1. POLITICAL LAW; JUSTICIABLE QUESTION; MORALITY OF GAMBLING NOT A
JUSTICIABLE ISSUE. By authorizing the holding of lottery for charity, Congress has in effect
determined that consistently with these policies and principles of the Constitution, the PCSO
may be given this authority. That is why we said with respect to the opening by the PAGCOR of a
casino in Cagayan de Oro, "the morality of gambling is not a justiciable issue. Gambling is not
illegal per se. . . . It is left to Congress to deal with the activity as it sees fit." (Magtajas v. Pryce
Properties Corp., Inc., 234 SCRA 255, 268 [1994]).

6. TAXATION; TAXPAYER'S SUIT; DIFFERENT CATEGORIES OF TAXPAYERS' SUITS, CITED;

PETITIONER'S SUIT IN CASE AT BAR DOES NOT FALL UNDER ANY OF THESE
CATEGORIES. Petitioners do not have the same kind of interest that these various litigants
have. Petitioners assert an interest as taxpayers, but they do not meet the standing requirement
for bringing taxpayer's suits as set forth in Dumlao v. Comelec, 95 SCRA 392, 403 (1980), to wit:
While, concededly, the elections to be held involve the expenditure of public moneys,nowhere in
their Petition do said petitioners allege that their tax money is "being extracted and spent in
violation of specific constitutional protections against abuses of legislative power" (Flast v.
Cohen, 392 U.S. 83 [1960]), or that there is a misapplication of such funds by respondent
COMELEC (see Pascual vs. Secretary of Public Works, 110 Phil. 331 [1960]), or that public
money is being deflected to any improper purpose. Neither do petitioners seek to restrain
respondent from wasting public funds through the enforcement of an invalid or unconstitutional
law. (Philippine Constitution Association vs. Mathay, 18 SCRA 300 [1966]), citing Philippine
Constitution Association vs. Gimenez, 15 SCRA 479 [1965]). Besides, the institution of a
taxpayer's suit, per se, is no assurance of judicial review. As held by this Court in Tan vs.
Macapagal (43 SCRA 677 [1972]), speaking through our present Chief Justice, this Court is

2. CIVIL LAW; CONTRACTS; CASE AT BAR DOES NOT RAISE ISSUE OF

CONSTITUTIONALITY BUT ONLY OF CONTRACT LAW WHICH PETITIONERS CANNOT
RAISE. It is noteworthy that petitioners do not question the validity of the law allowing
lotteries. It is the contract entered into by the PCSO and the PGMC which they are assailing.
This case, therefore, does not raise issues of constitutionality but only of contract law, which
petitioners, not being privies to the agreement, cannot raise.
3. CONSTITUTIONAL LAW; JUDICIAL DEPARTMENT; JUDICIAL POWER; MAY BE INVOKED
ONLY BY REAL PARTIES-IN-INTEREST OR THOSE WITH STANDING. Nor
does Kilosbayan's status as a people's organization give it the requisite personality to question
the validity of the contract in this case. The Constitution provides that "the State shall respect the
role of independent people's organizations to enable the people to pursue and protect, within the
democratic framework, their legitimate and collective interests and aspirations through peaceful
and lawful means," that their right to "effective and reasonable participation at all levels of social,
political, and economic decision-making shall not be abridged." (Art. XIII, 15-16) These
provisions have not changed the traditional rule that only real parties-in-interest or those with

68

vested with discretion as to whether or not a taxpayer's suit should be entertained. (Emphasis
supplied.) Petitioners' suit does not fall under any of these categories of taxpayers' suits.

THE PARTIES. Whether the transfer of technology would result in a violation of PCSO's
franchise should be determined by facts and not by what some officials of the PGMC state by
way of opinion. In the absence of proof to the contrary, it must be presumed that 5 reflects the
true intention of the parties. Thus, Art. 1370 of the Civil Code says that "If the terms of a contract
are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of
its stipulations shall control." The intention of the parties must be ascertained from their
"contemporaneous and subsequent acts." (Art. 1371;Atlantic Gulf Co. v. Insular Government, 10
Phil. 166 [1908]) It cannot simply be judged from what one of them says. On the other hand, the
claim of third parties, like petitioners, that the clause on upgrading of equipment would enable
the parties after awhile to change the contract and enter into something else in violation of the
law is mere speculation and cannot be a basis for judging the validity of the contract.

7. ID.; ID.; PETITIONER'S RIGHT TO SUE AS TAXPAYERS IN INSTANT CASE CANNOT BE

SUSTAINED AS THERE IS NO ALLEGATION THAT PUBLIC FUNDS ARE BEING
MISAPPROPRIATED. But, in the case at bar, there is no allegation that public funds are being
misapplied or misappropriated. The controlling doctrine is that of Gonzales v. Marcos, 65 SCRA
624 (1975) where it was held that funds raised from contributions for the benefit of the Cultural
Center of the Philippines were not public funds and petitioner had no standing to bring a
taxpayer's suit to question their disbursement by the President of the Philippines. Thus,
petitioners' right to sue as taxpayers cannot be sustained. Nor as concerned citizens can they
bring this suit because no specific injury suffered by them is alleged. As for the petitioners, who
are members of Congress, their right to sue as legislators cannot be invoked because they do
not complain of any infringement of their rights as legislators.

11. ADMINISTRATIVE LAW; PUBLIC BIDDINGS; ONLY CONTRACTS FOR THE PURCHASE
AND SALE OF SUPPLIES, MATERIALS AND EQUIPMENT ARE CONTEMPLATED BY THE
RULE THEREON. Our holding that E.O. No. 301, 1 applies only to contracts of purchase and
sale is conformable to P.D. No. 526, promulgated on August 2, 1974, which is in pari
materia. P.D. No. 526 requires local governments to hold public bidding in the"procurement of
supplies." By specifying "procurement of supplies" and excepting from the general rule
"purchases "when made under certain circumstances, P.D. No. 526, 12indicates quite clearly
that it applies only to contracts of purchase and sale. Thus, the texts of both E.O. No. 301, 1 and
of P.D. No. 526, 1 and 12, make it clear that only contracts for the purchase and sale of supplies,
materials and equipment are contemplated by the rule concerning public biddings. LLpr

8. ID.; ID.; IT MUST APPEAR THAT PERSON COMPLAINING HAS BEEN OR IS ABOUT TO
BE DENIED SOME RIGHT OR PRIVILEGE TO WHICH HE IS LAWFULLY ENTITLED.
Finally, inValmonte v. PCSO, G.R. No. 78716, September 22, 1987, we threw out a petition
questioning another form of lottery conducted by the PCSO on the ground that petitioner, who
claimed to be a "citizen, lawyer, taxpayer and father of three minor children," had no direct and
personal interest in the lottery. We said: "He must be able to show, not only that the law is
invalid, but also that he has sustained or is in immediate danger of sustaining some direct injury
as a result of its enforcement, and not merely that he suffers thereby in some indefinite way. It
must appear that the person complaining has been or is about to be denied some right or
privilege to which he is lawfully entitled or that he is about to be subjected to some burdens or
penalties by reason of the statute complained of ." In the case at bar, petitioners have not shown
why, unlike petitioner in the Valmontecase, they should be accorded standing to bring this suit.

RESOLUTION
MENDOZA, J p:

9. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; GENERAL RULE ON

CONCLUSIVENESS OF JUDGMENT IS SUBJECT TO EXCEPTION THAT A QUESTION MAY
BE REOPENED IF IT IS A LEGAL QUESTION. The "law of the case" doctrine is inapplicable,
because this case is not a continuation of the first one. Petitioners also say that inquiry into the
same question as to the meaning of the statutory provision is barred by the doctrine of res
judicata. The general rule on the "conclusiveness of judgment," however, is subject to
the exception that a question may be reopened if it is a legal question and the two actions
involve substantially different claims. This is generally accepted in American law from which our
Rules of Court was adopted. (Montana v. United States, 440 U.S. 59 L.Ed.2d 147, 210 [1979];
RESTATEMENT OF THE LAW 2d, ON JUDGMENTS, 28; P. BATOR, D. MELTZER, P. MISHKIN
AND D. SHAPIRO, THE FEDERAL COURTS AND THE FEDERAL SYSTEM 1058, n.2 [3rd Ed.,
1988]) There is nothing in the record of this case to suggest that this exception is inapplicable in
this jurisdiction.

Petitioners seek reconsideration of our decision in this case. They insist that the
decision in the first case has already settled (1) whether petitioner Kilosbayan, Inc. has a
standing to sue and (2) whether under its charter (R.A. No. 1169, as amended) the
Philippine Charity Sweepstakes Office can enter into any form of association or
collaboration with any party in operating an on-line lottery. Consequently, petitioners
contend, these questions can no longer be reopened.
Because two members of the Court did not consider themselves bound by the
decision in the first case, petitioners suggest that the two, in joining the dissenters in the
first case in reexamining the questions in the present case, acted otherwise than according
to law. They cite the following statement in the opinion of the Court:
The voting on petitioners' standing in the previous case was a narrow
one, seven (7) members sustaining petitioners' standing and six (6)

10. CIVIL LAW; CONTRACTS; IN THE ABSENCE OF PROOF TO THE CONTRARY, IT MUST
BE PRESUMED THAT SECTION 5 OF E.O. NO. 301 REFLECTS THE TRUE INTENTION OF

69

denying petitioners' right to bring the suit. The majority was thus a
tenuous one that is not likely to be maintained in any subsequent
litigation. In addition, there have been charges in the membership of the
Court, with the retirement of Justice Cruz and Bidin and the appointment
of the writer of this opinion and Justice Francisco. Given this fact it is
hardly tenable to insist on the maintenance of the ruling as to petitioners'
standing.cdasia

instead submit a new agreement that would be in conformity with the PCSO Charter (R.A.
No. 1169, as amended) and with the Decision of the Supreme Court in the
first Kilosbayan case against on-line, hi-tech lotto."
To be sure, a new contract was entered into which the majority of the Court finds
has been purged of the features which made the first contract objectionable. Moreover,
what the PCSO said in its manifestation in the first case was the following: cdt

Petitioners claim that this statement "conveys a none too subtle suggestion,
perhaps a Freudian slip, that the two new appointees, regardless of the merit of the
Decision in the first Kilosbayan case against the lotto (Kilosbayan, et al. v. Guingona,232
SCRA 110 [1994]) must of necessity align themselves with all the Ramos appointees who
were dissenters in the first case and constitute the new majority in the second lotto case."
And petitioners ask, "why should it be so?"

1. They are no longer filing a motion for reconsideration of the Decision of

this Honorable Court dated May 5, 1994, a copy of which was received on
May 6, 1994.
2. Respondents PCSO and PGMC are presently negotiating a new lease
agreement consistent with the authority of PCSO under its charter (R.A.
No. 1169, as amended by B.P. Blg. 42) and conformable with the
pronouncements of this Honorable Court in its Decision of May 5, 1995.

Petitioners ask a question to which they have made up an answer. Their attempt
at psychoanalysis, detecting a Freudian slip where none exists, may be more revealing of
their own unexpressed wish to find motives where there are none which they can impute to
some members of the Court.

The PGMC made substantially the same manifestation as the PCSO.

There was thus no "formal commitment" but only a manifestation that the
parties were not filing a motion for reconsideration. Even if the parties made a "formal
commitment," the six (6) dissenting Justices certainly could not be bound thereby not to
insist on their contrary view on the question of standing. Much less were the two new
members bound by any "formal commitment" made by the parties. They believed that the
ruling in the first case was erroneous. Since in their view reexamination was not barred by
the doctrine of stare decisis, res judicata or conclusiveness of judgment or law of the case,
they voted the way they did with the remaining five (5) dissenters in the first case to form a
new majority of eight.

For the truth is that the statement is no more than an effort to explain rather
than to justify the majority's decision to overrule the ruling in the previous case. It is
simply meant to explain that because the five members of the Court who dissented in the
first case (Melo, Quiason, Puno, Vitug and Kapunan, JJ.) and the two new members
(Mendoza and Francisco, JJ.) thought the previous ruling to be erroneous and its
reexamination not to be barred by stare decisis, res judicata or conclusiveness of judgment,
or law of the case, it was hardly tenable for petitioners to insist on the first ruling. cdtai
Consequently to petitioners' question "What is the glue that holds them together,"
implying some ulterior motives on the part of the new majority in reexamining the two
questions, the answer is: None, except a conviction on the part of the five, who had been
members of the Court at the time they dissented in the first case, and the two new
members that the previous ruling was erroneous. The eighth Justice (Padilla, J.) on the
other hand agrees with the seven Justices that the ELA is in a real sense a lease
agreement and therefore does not violate R.A. No. 1169.

Petitioners ask, "Why should this be so?" Because, as explained in the decision,
the first decision was erroneous and no legal doctrine stood in the way of its reexamination.
It can, therefore, be asked "with equal candor": "Why should this not be so?" aisadc
Nor is this the first time a split decision was tested, if not reversed, in subsequent
case because of change in the membership of a court. In 1957, this Court, voting 6-5, held
in Feliciano v. Aquino, G.R. No. L-10201, Sept. 23, 1957 that the phrase "at the time of the
election" in 2174 of the Revised Administrative Code of 1917 meant that a candidate for
municipal elective position must be at least 23 years of age on the date of the election. On
the other hand, the dissenters argued that it was enough if he attained that age on the day
he assumed office.

The decision in the first case was a split decision: 7-6. With the retirement of one
of the original majority (Cruz, J.) and one of the dissenters (Bidin, J.), it was not surprising
that the first decision in the first case was later reversed.
It is argued that, in any case, a reexamination of the two question is barred
because the PCSO and the Philippine Gaming Management Corporation made a '"formal
commitment not to ask for a reconsideration of the Decision in the first lotto case and

Less than three years later, the same question was before the Court again, as a
candidate for municipal councilor stated under oath in her certificate of candidacy that she

70

was eligible for that position although she attained the requisite age (23 years) only when
she assumed office. The question was whether she could be prosecuted for falsification.
In People v. Yanza, 107 Phil. 888 (1960), the Court ruled she could not. Justice, later Chief
Justice, Bengzon, who dissented in the first case, Feliciano v. Aquino, supra, wrote the
opinion of the Court, holding that while the statement that the accused was eligible was
"inexact or erroneous, according to the majority in theFeliciano case," the accused could
not be held liable for falsification, because:

that what was originally a 4-4 vote was converted into a majority (5-3) for holding the acts
invalid. cdasia

On the day the decision was announced, President Grant nominated to the Court
William Strong and Joseph P. Bradley to fill the vacancy caused by the resignation of
Justice Grier and to restore the membership of the Court to nine. In 1871, Hepburn v.
Griswold was overruled in the Legal Tender Cases, as Knox v. Lee came to be known, in an
opinion by Justice Strong, with a dissenting opinion by Chief Justice Chase and the three
other surviving members of the former majority. There were allegations that the new
Justices were appointed for their known views on the validity of the Legal Tender Acts, just
as there were others who defended the character and independence of the new Justices.
History has vindicated the overruling of the Hepburn case by the new majority. The Legal
Tender Cases proved to be the Court's means of salvation from what Chief Justice Hughes
later described as one the Court's "self-inflicted wounds." 1

the question [whether the law really required candidates to have the
required age on the day of the election or whether it was sufficient that
they attained it at the beginning of the term of office] has not been
discussed anew, despite the presence of new members; we
simply assume for the purpose of this decision that the doctrine
stands. cdta
Thus because in the meantime there had been a change in the membership of
the Court with the retirement of two members (Reyes and Felix, JJ.) who had taken part in
the decision in the first case and their replacement by new members (Barrera and
Gutierrez-David, JJ.) and the fact that the vote in the first case was a narrow one (6 to 5),
the Court allowed that the continuing validity of its ruling in the first case might well be
doubted. For this reason it gave the accused the benefit of the doubt that she had acted in
the good faith belief that it was sufficient that she was 23 years of age when she assumed
office.

We now consider the specific grounds for petitioners' motion for reconsideration.
I. We have held that because there are no genuine issues of constitutionality in
this case, the rule concerning real party-in-interest, applicable to private litigation rather
than the more liberal rule on standing, applies to petitioners. Two objections are made
against that ruling: (1) that the constitutional policies and principles invoked by petitioners,
while not supplying the basis for affirmative relief from the courts, may nonetheless be
resorted to for striking down laws or official actions which are inconsistent with them and (2)
that the Constitution, by guaranteeing to independent people's organizations "effective and
reasonable participation at all levels of social, political and economic decision-making" (Art.
XIII, 16), grants them standing to sue on constitutional grounds.

In that case, the change in the membership of the Court and the possibility of
change in the ruling were noted without anyone much less would-be psychoanalysts
finding in the statement of the Court any Freudian slip. The possibility of change in the rule
as a result of change in membership was accepted as a sufficient reason for finding good
faith and lack of criminal intent on the part of the accused.

The policies and principles of the Constitution invoked by petitioner read:

Indeed, a change in the composition of the Court could prove the means of
undoing an erroneous decision. This was the lesson of Knox v. Lee, 12 Wall. 457 (1871).
The Legal Tender Acts, which were passed during the Civil War, made U.S. notes
(greenbacks) legal tender for the payment of debts, public or private, with certain
exceptions. The validity of the acts, as applied to preexisting debts, was challenged
inHepburn v. Griswold, 8 Wall. 603 (1869). The Court was then composed of only eight (8)
Justices because of Congressional effort to limit the appointing power of President
Johnson. Voting 5-3, the Court declared the acts void. Chief Justice Chase wrote the
opinion of the Court in which four others, including Justice Grier, concurred. Justices Miller,
Swayne and Davis dissented. A private memorandum left by the dissenting Justices
described how an effort was made "to convince an aged and infirm member of the court
[Justice Grier] that he had not understood the question on which he voted," with the result

ARTICLE II, 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.
Id., 12. The natural primary right and duty of parents in the rearing of
the youth for civic efficiency and the development of moral character shall
receive the support of the Government.
Id., 13. The State recognizes the vital role of the youth in nation-building
and
shall
promote
and
protect
their
physical, moral,
spiritual, intellectual, and social well-being. It shall inculcate in the youth

71

patriotism and nationalism, and encourage their involvement in public and

civic affairs.

advocacy of petitioners' views. 2 Indeed, the provisions on independent people's

organizations may most usefully be read in connection with the provision on initiative and
referendum as a means whereby the people may propose or enact laws or reject any of
those passed by Congress. For the fact is that petitioners' opposition to the contract in
question is nothing more than an opposition to the government policy on lotteries. aisadc

Id., 17. The State shall give priority to education, science and
technology, arts, culture, and sports to foster patriotism and nationalism,
accelerate social progress, and promote total human liberation and
development.

It is nevertheless insisted that this Court has in the past accorded standing to
taxpayers and concerned citizens in cases involving "paramount public interest." Taxpayers,
voters, concerned citizens and legislators have indeed been allowed to sue but then only
(1) in cases involving constitutional issues and (2) under certain conditions. Petitioners do
not meet these requirements on standing.

As already stated, however, these provision are not self-executing. They do not
confer rights which can be enforced in the courts but only provide guidelines for legislative
or executive action. By authorizing the holding the lottery for charity, Congress has in effect
determined that consistently with these policies and principles of the Constitution, the
PCSO may be given this authority. That is why we said with respect to the opening by the
PAGCOR of a casino in Cagayan de Oro, "the morality of gambling is not a justiciable
issue. Gambling is not illegal per se. . . . It is left to Congress to deal with the activity as it
sees fit." (Magtajas v. Pryce Properties Corp., Inc.,234 SCRA 255, 268 [1994]) cdt

Taxpayers are allowed to sue, for example, where there is a claim of illegal
disbursement of public funds. (Pascual v. Secretary of Public Works, 110 Phil. 331
[1960]; Sanidad v. Comelec, 73 SCRA 333 [1976]; Bugnay Const. & Dev. v. Laron, 176
SCRA 240 [1989]; City Council of Cebu v. Cuizon, 47 SCRA 325 [1972]) or where a tax
measure is assailed as unconstitutional. (VAT Cases [Tolentino v. Secretary of Finance],
235 SCRA 630 [1994]) Voters are allowed to question the validity of election laws because
of their obvious interest in the validity of such laws. (Gonzales v. Comelec, 21 SCRA 774
[1967]) Concerned citizens can bring suits if the constitutional question they raise is of
"transcendental importance" which must be settled early. (Emergency Powers Cases
[Araneta v. Dinglasan], 84 Phil. 368 (1949); Iloilo Palay and Corn Planters Ass'n v.
Feliciano, 121 Phil. 358 (1965); Philconsa v. Gimenez, 122 Phil. 894 (1965); CLUv.
Executive Secretary, 194 SCRA 317 [1991]) Legislators are allowed to sue to question the
validity of any official action which they claim infringes their prerogatives qualegislators.
(Philconsa v. Enriquez, 235 506 [1994]; Guingona v. PCGG, 207 SCRA 659
[1992]; Gonzales v. Macaraig, 191 SCRA 452 [1990]; Tolentino v. Comelec, 41 SCRA 702
[1971]; Tatad v. Garcia, G.R. No. 114222, April 16, 1995 [Mendoza, J., concurring])

It is noteworthy that petitioners do not question the validity of the law allowing
lotteries. It is the contract entered into by the PCSO and the PGMC which they are
assailing. This case, therefore, does not raise issues of constitutionality but only of contract
law, which petitioners, not being privies to the agreement, cannot raise.
Nor does Kilosbayan's status as a people's organization give it the requisite
personality to question the validity of the contract in this case. The Constitution provides
that "the State shall respect the role of independent people's organizations to enable the
people to pursue and protect, within the democratic framework, their legitimate and
collective interests and aspirations through peaceful and lawful means," that their right to
"effective and reasonable participation at all levels of social, political, and economic
decision-making shall not be abridged." (Art. XIII, 15-16)

Petitioners do not have the same kind of interest that these various litigants have.
Petitioners assert an interest as taxpayers, but they do not meet the standing requirement
for bringing taxpayer's suits as set forth in Dumlao v. Comelec, 95 SCRA 392, 403 (1980),
to wit:

These provisions have not changed the traditional rule that only real parties-ininterest or those with standing, as the case may be, may invoke the judicial power. The
jurisdiction of this Court, even in cases involving constitutional questions, is limited by the
"case and controversy" requirement of Art. VIII, 5. This requirement lies at the very heart
of the judicial function. It is what differentiates decision making in the courts from decisionmaking in the political departments of the government and bars the bringing of suits by just
any party.

While, concededly, the elections to be held involve the expenditure of

public moneys, nowhere in their Petition do said petitioners allege that
their tax money is"being extracted and spent in violation of specific
constitutional protections against abuses of legislative power" (Flast v.
Cohen, 392 U.S. 83 [1960]), or that there is a misapplication of such
funds by respondent COMELEC (see Pascual vs. Secretary of Public
Works, 110 Phil. 331 [1960], or that public money is being deflected to
any improper purpose. Neither do petitioners seek to restrain respondent
from wasting public funds through the enforcement of an invalid or

Petitioners quote extensively from the speech of Commissioner Garcia before the
Constitutional Commission, explaining the provisions on independent people's
organizations. There is nothing in the speech, however, which supports their claim of
standing. On the contrary, the speech points the way to the legislative and executive
branches of the government, rather than to the courts, as the appropriate fora for the

72

unconstitutional law. (Philippine Constitution Association vs. Mathay, 18

SCRA 300 [1966], citingPhilippine Constitution Association vs.
Gimenez, 15 SCRA 479 [1965]). Besides, the institution of a taxpayer's
suit, per se, is no assurance of judicial review. As held by this Court
in Tan vs. Macapagal (43 SCRA 677 [1972]), speaking through our
present Chief Justice, this Court is vested with discretion as to whether or
not a taxpayer's suit should be entertained. (Emphasis added.) cdta

legislators cannot be invoked because they do not complain of any infringement of their
rights as legislators.
Finally, in Valmonte v. PCSO, G.R. No. 78716, September 22, 1987, we threw out
a petition questioning another form of lottery conducted by the PCSO on the ground that
petitioner, who claimed to be a "citizen, lawyer, taxpayer and father of three minor children,"
had no direct and personal interest in the lottery. We said: "He must be able to show, not
only that the law is invalid, but also that he has sustained or is in immediate danger of
sustaining some direct injury as a result of its enforcement, and not merely that he suffers
thereby in some indefinite way. It must appear that the person complaining has been or is
about to be denied some right or privilege to which he is lawfully entitled or that he is about
to be subjected to some burdens or penalties by reason of the statute complained of ." In
the case at bar, petitioners have not shown why, unlike petitioner in the Valmonte case, they
should be accorded standing to bring this suit.

Petitioners' suit does not fall under any of these categories of taxpayers' suits.
Neither do the other cases cited by petitioners support their contention that
taxpayers have standing to question government contracts regardless of whether public
funds are involved or not. In Gonzales v. National Housing Corp., 94 SCRA 786 (1979),
petitioner filed a taxpayer's suit seeking the annulment of a contract between the NHC and
a foreign corporation. The case was dismissed by the trial court. The dismissal was
affirmed by this Court on the grounds of res judicata and pendency of a prejudicial
question, thus avoiding the question of petitioner's standing.

The case of Oposa v. Factoran, Jr., 224 SCRA 792 (1993) is different. Citizens'
standing to bring a suit seeking the cancellation of timber licenses was sustained in that
case because the Court considered Art. II, 16 a right-conferring provision which can be
enforced in the courts. That provision states:

On the other hand, in Gonzales v. Raquiza, 180 SCRA 254 (1989), petitioner
sought the annulment of a contract made by the government with a foreign corporation for
the purchase of road construction equipment. The question of standing was not discussed,
but even if it was, petitioner's could be sustained because he was minority stockholder of
the Philippine National Bank, which was one of the defendants in the case.

The State shall protect and advance the right of the people to a balanced
and healthful ecology in accord with the rhythm and harmony of nature.
(Emphasis supplied.) aisadc
In contrast, the policies and principle invoked by petitioners in this case do not permit of
such categorization.

In the other case cited by petitioners, City Council of Cebu v. Cuizon , 47 SCRA
325 (1972), members of the city council were allowed to sue to question the validity of a
contract entered into by the city government for the purchase of road construction
equipment because their contention was that the contract had been made without their
authority. In addition, as taxpayers they had an interest in seeing to it that public funds were
spent pursuant to an appropriation made by law. cdasia

Indeed, as already stated, petitioners' opposition is not really to the validity of the
ELA but to lotteries which they regard to be immoral. This is not, however, a legal issue, but
a policy matter for Congress to decide and Congress has permitted lotteries for charity.
Nevertheless, although we have concluded that petitioners do not have standing,
we have not stopped there and dismissed their case. For in the view we take, whether a
party has a cause of action and, therefore, is a real party-in-interest or one with standing to
raise a constitutional question must turn on whether he has a right which has been violated.
For this reason the Court has not ducked the substantive issues raised by petitioners.

But, in the case at bar, there is no allegation that public funds are being
misapplied or misappropriated. The controlling doctrine is that of Gonzales v. Marcos, 65
SCRA 624 (1975) where it was held that funds raised from contributions for the benefit of
the Cultural Center of the Philippines were not public funds and petitioner had no standing
to bring a taxpayer's suit to question their disbursement by the President of the Philippines.

II. R.A. No. 1169, as amended by B.P. No. 42, states:

Thus, petitioners' right to sue as taxpayers cannot be sustained. Nor as

concerned citizens can they bring this suit because no specific injury suffered by them is
alleged. As for the petitioners, who are members of Congress, their right to sue as

1. The Philippine Charity Sweepstakes Office. The Philippine Charity

Sweepstakes Office, hereinafter designated the Office, shall be the
principal government agency for raising and providing for funds for health
programs, medical assistance and services and charities of national

73

character, and as such shall have the general powers conferred in section
thirteen of Act Numbered One Thousand Four Hundred Fifty Nine, as
amended, and shall have the authority. cdasia

parties. As already stated, the ELA is substantially different from the Contract of Lease
declared void in the first case.
Borrowing from the dissenting opinion of Justice Feliciano, petitioners argue that
the phrase "by itself or in collaboration, association or joint venture with any other party"
qualifies not only 1 (B) but also 1 (A), because the exception clause ("except for the
activities mentioned in the preceding paragraph [A]") "operates, as it were, as
arenvoi clause which refers back to Section 1(A) and in this manner avoids the necessity of
simultaneously amending the text of Section 1 (A)."

A. To hold and conduct charity sweepstakes races, lotteries and other

similar activities, in such frequency and manner, as shall be determined,
and subject to such rules and regulations as shall promulgated by the
Board of Directors.
B. Subject to the approval of the Minister of Human Settlements, to
engage in health and welfare-related investments, programs, projects and
activities which may be profit-oriented, by itself or in collaboration,
association or joint venture with any person, association, company or
entity, whether domestic or foreign, except for the activities mentioned in
the preceding paragraph (A), for the purpose of providing for permanent
and continuing sources of funds for health programs, including the
expansion of existing ones, medical assistance and services, and/or
charitable grants: Provided, that such investments will not compete with
the private sector in areas where investments are adequate as may be
determined by the National Economic and Development Authority.

This interpretation, however, fails to take into account not only the location of the
phrase in paragraph (B), when it should be in paragraph (A) had that been the intention of
the lawmaking authority, but also the phrase "by itself." In other words, under paragraph
(B), the PCSO is prohibited from "engag[ing] in . . . investments, programs, projects and
activities" if these involves sweepstakes races, lotteries and other similar activities not only
"in collaboration, association or joint venture" with any other party but also "by itself."
Obviously, this prohibition cannot apply when the PCSO conducts these activities itself.
Otherwise, what paragraph (A) authorizes the PCSO to do, paragraph (B) would prohibit.
The fact is that the phrase in question does not qualify the authority of the PCSO
under paragraph (A), but rather the authority granted to it by paragraph (B). The
amendment of paragraph (B) by B.P. Blg. 42 was intended to enable the PCSO to engage
in certain investments, programs, projects and activities for the purpose of raising funds for
health programs and charity. That is why the law provides that such investments by the
PCSO should "not compete with the private sector in areas where investments are
adequate as may be determined by the National Economic and Development Authority."
Justice Davide, then an Assemblyman, made a proposal which was accepted, reflecting the
understanding that the bill they were discussing concerned the authority of the PCSO to
invest in the business of others. The following excerpt from the Record of the Batasan
Pambansa shows this to be the subject of the discussion: cdtai

Petitioners insist on the ruling in the previous case that the PCSO cannot hold
and conduct charity sweepstakes, lotteries and other similar activities in collaboration,
association or joint venture with any other party because of the clause "except for the
activities mentioned in the preceding paragraph (A)" in paragraph (B) of 1. Petitioners
contend that the ruling is the law of this case because the parties are the same and the
case involves the same issue, i. e., the meaning of this statutory provision.
The "law of the case" doctrine is inapplicable, because this case is not a
continuation of the first one. Petitioners also say that inquiry into the same question as to
the meaning of the statutory provision is barred by the doctrine of res judicata. The general
rule on the "conclusiveness of judgment," however, is subject to the exception that a
question may be reopened if it is a legal question and the two actions involve substantially
different claims. This is generally accepted in American law from which our Rules of Court
was adopted. (Montana v. United States, 440 U.S. 59 L. Ed. 2d 147, 210 (1979);
RESTATEMENT OF THE LAW 2d, ON JUDGMENTS, 28; P. BATOR, D. MELTZER, P.
MISHKIN AND D. SHAPIRO, THE FEDERAL COURTS AND THE FEDERAL SYSTEM
1058, n. 2 [3rd Ed., 1988]) There is nothing in the record of this case to suggest that this
exception is inapplicable in this jurisdiction. cdtai

MR. DAVIDE.
May I introduce an amendment after "adequate." The intention of the
amendment is not to leave the determination of whether it is
adequate or not to anybody. And my amendment is to add after
"adequate" the words AS MAY BE DETERMINED BY THE
NATIONAL ECONOMIC AND DEVELOPMENT AUTHORITY.
As a matter of fact, it will strengthen the authority to invest in
these areas, provided that the determination of whether the
private sector's activity is already adequate must be determined
by the National Economic and Development Authority.

Indeed, the questions raised in this case are legal questions and the claims
involved are substantially different from those involved in the prior case between the

74

MR. ZAMORA.

IV. It is contended that 1 of E.O. No. 301 covers all types of "contract[s] for public services
or for furnishing of supplies, materials and equipment to the government or to any of its
branches, agencies or instrumentalities" and not only contracts of purchase and sale.
Consequently, a lease of equipment, like the ELA, must be submitted to public bidding in order
to be valid. This contention is based on two premises: (1) that 1 of E.O. No. 301 applies to any
contract whereby the government acquires title to or the use of the equipment and (2) that the
words "supplies," "materials," and "equipment" are distinct from each other so that when an
exception in 1 speaks of "supplies," it cannot be construed to mean "equipment."

Mr. Speaker, the committee accepts the proposed amendment.

MR. DAVIDE.
Thank you, Mr. Speaker.
(2 RECORD OF THE BATASAN PAMBANSA, Sept. 6, 1979, p. 1007)

Petitioners' contention will not bear analysis. For example, the term "supplies" is
used in paragraph (a), which provides that a contract for the furnishing of "supplies" in order
to meet an emergency is exempt from public bidding. Unless "supplies" is construed to
include "equipment," however, the lease of heavy equipment needed for rescue operations
in case of a calamity will have to be submitted to public bidding before it can be entered into
by the government. cdasia

Thus what the PCSO is prohibited from doing is from investing in a business
engaged in sweepstakes races, lotteries and other similar activities. It is prohibited from
doing so whether "in collaboration, association or joint venture" with others or "by
itself." This seems to be the only possible interpretation of 1 (A) and (B) in light of its text
and legislative history. That there is today no other entity engaged in sweepstakes races,
lotteries and the like does not detract from the validity of this interpretation. cdt

In dissent Justice Feliciano says that in such a situation the government can
simply resort to expropriation, paying compensation afterward. This is just like purchasing
the equipment through negotiation when the question is whether the purchase should be by
public bidding, not to mention that fact that the power to expropriate may not be exercised
when the government can very well negotiate with private owners.

III. The Court noted in its decision that the provisions of the first contract, which were considered
to be features of a joint venture agreement, had been removed in the new contract. For instance,
5 of the ELA provides that in the operation of the on-line lottery, the PCSO must employ "its
own competent and qualified personnel." Petitioners claim, however, that the "contemporaneous
interpretation" of PGMC officials of this provision is otherwise. They cite the testimony of Glen
Barroga of the PGMC before a Senate committee to the effect that under the ELA the PGMC
would be operating the lottery system "side by side" with PCSO personnel as part of the transfer
of technology.

Indeed, there are fundamental difficulties in simultaneously contending (1)

thatE.O. No. 301, 1 covers both contracts of sale and lease agreements and (2) that the
words "supplies," "materials" and "equipment" can not be interchanged. Thus, under
paragraph (b) of 1, public bidding is not required "whenever the supplies are to be used in
connection with a project or activity which cannot be delayed without causing detriment to
the public service." Following petitioners' theory, there should be a public bidding before the
government can enter into a contract for the lease of bulldozers and dredging equipment
even if these are urgently needed in areas ravaged by lahar because, first, lease contracts
are covered by the general rule and, second, the exception to public bidding in paragraph
(b) covers only "supplies" but not equipment.

Whether the transfer of technology would result in a violation of PCSO's franchise

should be determined by facts and not by what some officials of the PGMC state by way of
opinion. In the absence of proof to the contrary, it must be presumed that 5 reflects the
true intention of the parties. Thus, Art. 1370 of the Civil Code says that "if the terms of a
contract are clear and leave no doubt upon the intention of the contracting parties, the
literal meaning of its stipulations shall control." The intention of the parties must be
ascertained from their "contemporaneous and subsequent acts." (Art. 1371; Atlantic Gulf
Co. v. Insular Government, 10 Phil. 166 [1908]) It cannot simply be judged from what one of
them says. On the other hand, the claim of third parties, like petitioners, that the clause on
upgrading of equipment would enable the parties after a while to change the contract and
enter into something else in violation of the law is mere speculation and cannot be a basis
for judging the validity of the contract.

To take still another example. Paragraph (d), which does away with the
requirement of public bidding "whenever the supplies under procurement have been
unsuccessfully placed on bid for at least two consecutive times, either due to lack of
bidders or the offers received in each instance were exorbitant or non conforming to
specifications." Again, following the theory of the petitioners, a counteract for the lease of
equipment cannot be entered into even if there are no bids because, first, lease contracts
are governed by the general rule on public bidding and, second, the exception to public
bidding in paragraph (d) applies only to contracts for the furnishing of "supplies." cdtai

75

Other examples can be given to show the absurdity of interpreting 1 as

applicable to any contract for the furnishing of supplies, materials and equipment andof
considering the words "supplies," "materials" and "equipment" to be not interchangeable.
Our ruling that 1 of E.O. No. 301 does not cover the lease equipment avoids these
fundamental difficulties and is supported by the text of 1, which is entitled "Guidelines
for Negotiated Contracts" and by the fact that the only provisions of E.O. No. 301 on leases,
namely, 6 and 7, concern the lease of buildings by or to the government. Thus the text
of 1 reads:

Indeed, the purpose for promulgating E.O. No. 301 was merely to decentralize
the system for reviewing negotiated contracts of purchase for the furnishing of supplies,
materials and equipment as well as lease contracts of buildings. Theretofore, E.O. No. 298,
promulgated on August 12, 1940, required consultation with the Secretary of Justice and
the Department Head concerned and the approval of the President of the Philippines before
contracts for the furnishing of supplies, materials and equipment could be made on a
negotiated basis, without public bidding. E.O. No. 301 changed this by providing as follows:
2. Jurisdiction over Negotiated Contracts. In line with the principles of
decentralization and accountability, negotiated contracts for public
services or for furnishing supplies, materials or equipment may be
entered into by the department or agency head or the governing board of
the government-owned or controlled corporation concerned, without need
of prior approval by higher authorities, subject to availability of funds,
compliance with the standards or guidelines prescribed in Section 1
hereof, and the audit jurisdiction of the Commission on Audit in
accordance with existing rules and regulation.

1. Guidelines for Negotiated Contracts. Any provision of law, decree,

executive order or other issuances to the contrary notwithstanding, no
contract for public services or for furnishing supplies, materials and
equipment to the government or any of its branches, agencies or
instrumentalities shall be renewed or entered into without public bidding,
except under any of the following situations:
a. Whenever the supplies are urgently needed to
meet an emergency which may involve the loss of, or danger
to, life and/or property;

Negotiated contracts involving P2,000,000 up to P10,000,000 shall be

signed by the Secretary and two other Undersecretaries.

b. Whenever the supplies are to be used in

connection with a project or activity which cannot be delayed
without causing detriment to the public service;

xxx xxx xxx

7. Jurisdiction Over Lease Contracts. The heads of agency intending
to rent privately owned buildings or spaces for their use, or to lease out
government-owned buildings or spaces for private use, shall have
authority to determine the reasonableness of the terms of the lease and
the rental rates thereof, and to enter into such lease contracts without
need of prior approval by higher authorities, subject to compliance with
the uniform standards or guidelines established pursuant to Section 6
hereof by the DPWH and to the audit jurisdiction of COA or its duly
authorized representative in accordance with existing rules and
regulations.

c. Whenever the materials are sold by an exclusive

distributor or manufacturer who does not have subdealers
selling at lower prices and for which no suitable substitute can
be obtained elsewhere at more advantageous terms to the
government; cdt
d. Whenever the supplies under procurement have
been unsuccessfully placed on bid for at least two consecutive
times, either due to lack of bidders or the offers received in
each instance were exorbitant or non-conforming to
specifications;
e. In cases where it is apparent that the requisition of
the needed supplies through negotiated purchase is most
advantageous to the government to be determined by the
Department Head concerned; and

In sum, E.O. No. 301 applies only to contracts for the purchase of supplies,
materials and equipment, and it was merely to change the system of administrative review
of emergency purchases, as theretofore prescribed by E.O. No. 298, that E.O. No. 301 was
issued on July 26, 1987. Part B of this Executive Order applies to leases of buildings, not of
equipment, and therefore does not govern the lease contract in this case. Even if it applies,
it does not require public bidding for entering into it. cdasia

f. Whenever the purchase is made from an agency of

the government.

Our holding that E.O. No. 301, 1 applies only to contracts of purchase and sale is
conformable to P.D. No. 526, promulgated on August 2, 1974, which is in pari materia.P.D.

76

No. 526 requires local governments to hold public bidding in the "procurementof supplies."
By specifying "procurement of supplies" and excepting from general rule "purchases" when
made under certain circumstances, P.D. No. 526, 12 indicates quite clearly that it applies
only to contracts of purchase and sale. This provision reads:

FOR THE FOREGOING REASONS, the motion for reconsideration of petitioners

is DENIED with finality.
SO ORDERED. cdlex

12. Procurement without public bidding. Procurement of supplies

may be made without the benefit of public bidding in the following modes:

Melo, Puno, Kapunan, Francisco and Hermosisima, Jr., JJ., concur.

Padilla and Vitug, JJ., maintained their separate concurring opinions.

(1) Personal canvass of responsible merchants;

EN BANC

(2) Emergency purchases;

[G.R. No. 113375. May 5, 1994.]

(3) Direct purchases from manufacturers or exclusive distributors;

KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A.

RIGOS, ERME CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO,
EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE,
CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO,
RAOUL V. VICTORINO, JOSE CUNANAN, QUINTIN S. DOROMAL,
SEN. FREDDIE WEBB, SEN. WIGBERTO TAADA, and REP. JOKER
P. ARROYO, petitioners, vs. TEOFISTO GUINGONA, JR., in his
capacity as Executive Secretary, Office of the President; RENATO
CORONA, in his capacity as Assistant Executive Secretary and
Chairman of the Presidential Review Committee on the Lotto, Office
of the President; PHILIPPINE CHARITY SWEEPSTAKES OFFICE; and
PHILIPPINE GAMING CORPORATION,respondent.

(4) Thru the Bureau of Supply Coordination; and

(5) Purchase from other government entities or foreign governments.
Section 3 broadly defines the term "supplies" as including
everything, except real estate, which may be needed in the transaction of
public business, or in the pursuit of any undertaking, project, or activity,
whether of the nature of equipment, furniture, stationery, materials for
construction, or personal property of any sort, including non-personal or
contractual services such as the repair and maintenance of equipment
and furniture, as well as trucking, hauling, janitorial, security, and related
or analogous services. cdll

SYLLABUS
1. REMEDIAL LAW; ACTIONS; PARTY; A PARTY'S STANDING IN THE HIGH COURT IS A
PROCEDURAL TECHNICALITY WHICH MAY BE SET ASIDE WHERE ISSUES RAISED ARE
OF PARAMOUNT PUBLIC INTEREST; CASE AT BAR. The preliminary issue on
the locus standi of the petitioners should, indeed, be resolved in their favor. A party's standing
before this Court is a procedural technicality which it may, in the exercise of its discretion, set
aside in view of the importance of the issues raised. In the landmark Emergency Powers cases,
this Court brushed aside this technicality because "the transcendental importance to the public
of these cases demands that they be settled promptly and definitely, brushing aside, if we must,
technicalities of procedure. (Avelino vs. Cuenco, G.R. No. L-2821)." Insofar as taxpayers' suits
are concerned, this Court had declared that it "is not devoid of discretion as to whether or not it
should be entertained," or that it "enjoys an open discretion to entertain the same or not." We
find the instant petition to be of transcendental importance to the public. The issues it raised are
of paramount public interest and of a category even higher than those involved in many of the
aforecited cases. The ramifications of such issues immeasurably affect the social, economic,
and moral well-being of the people even in the remotest barangays of the country and the

Thus, the texts of both E.O. No. 301, 1 and of P.D. No. 526, 1 and 12, make
it clear that only contracts for the purchase and sale of supplies, materials and equipment
are contemplated by the rule concerning public biddings.
Finally, it is contended that equipment leases are attractive and commonly used
in place of contracts of purchase and sale because of "multifarious credit and tax
constraints" and therefore could not have been left out from the requirement of public
bidding. Obviously these credit and tax constraints can have no attraction to the
government when considering the advantages of sale over lease of equipment. The fact
that lease contracts are in common use is not a reason for implying that the rule on public
bidding applies not only to government purchases but also to lease contracts.For the fact
also is that the government leases equipment, such as copying machines, personal
computers and the like, without going through public bidding. cdt

77

counter-productive and retrogressive effects of the envisioned on-line lottery system are as
staggering as the billions in pesos it is expected to raise. The legal standing then of the
petitioners deserves recognition and, in the exercise of its sound discretion, this Court hereby
brushes aside the procedural barries which the respondents tried to take advantage of.

5. STATUTORY CONSTRUCTION; STATUTE AUTHORIZING CARRYING ON OF GAMBLING

ACTIVITY, STRICTLY CONSTRUED. It may also be pointed out that the franchise granted to
the PCSO to hold and conduct lotteries allows it to hold and conduct a species of gambling. It is
settled that "a statute which authorizes the carrying on of a gambling activity or business should
be strictly construed and every reasonable doubt so resolved as to limit the powers and rights
claimed under its authority."

2. ID.; ID.; ID.; ID. In line with the liberal policy of this Court on locus standi, ordinary
taxpayers, members of Congress, and even association of planters, and non-profit civic
organizations were allowed to initiate and prosecute actions before this Court to question the
constitutionality or validity of laws, acts, decisions, ruling, or orders of various government
agencies or instrumentalities.

6. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE CHARITY SWEEPSTAKES

OFFICE; PROHIBITED FROM HOLDING & CONDUCTING LOTTERIES IN COLLABORATION,
ASSOCIATION OR JOINT VENTURE WITH ANY PERSON, ASSOCIATION, COMPANY OR
ENTITY; "LEASE" ENTERED IN CONTRAVENTION THEREOF, NULL & VOID; CASE AT BAR.
Does the challenged Contract of Lease violate or contravene the exception in Section 1
of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and
conducting lotteries "in collaboration, association or joint venture with" another? We agree with
the petitioners that it does, notwithstanding its denomination or designation as a Contract of
Lease. We are neither convinced nor moved or fazed by the insistence and forceful arguments of
the PGMC that it does not because in reality it is only an independent contractor for a piece of
work, i.e., the building and maintenance of a lottery system to be used by the PCSO in the
operation of its lottery franchise. A careful analysis and evaluation of the provisions of the
contract and a consideration of the contemporaneous acts of the PCSO and PGMC indubitably
disclose that the contract is not in reality a contract of lease under which the PGMC is merely an
independent contractor for a piece of work, but one where the statutorily
proscribed collaboration or association, in the least, or joint venture, at the most, exists between
the contracting parties.Collaboration is defined as the acts of working together in a joint
project. Association means the act of a number of persons in uniting together for some special
purpose or business. Joint venture is defined as an association of person or companies jointly
undertaking some commercial enterprise; generally all contribute assets and share risks. It
requires a community of interest in the performance of the subject matter, a right to direct and
govern the policy in connection therewith, and duty, which may be altered by agreement to share
both in profit and losses. We thus declare that the challenged Contract of Lease violates the
exception provided for in paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42,
and is, therefore, invalid for being contrary to law. This conclusion renders unnecessary further
discussion on the other issues raised by the petitioners.

3. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE CHARITY SWEEPSTAKES

OFFICE; PROHIBITED FROM HOLDING AND CONDUCTING LOTTERIES IN
COLLABORATION, ASSOCIATION OR JOINT VENTURE WITH ANY PERSON,
ASSOCIATION, COMPANY OR ENTITY. Section 1 of R.A. No. 1169, as amended by B.P.
Blg. 42, prohibits the PCSO from holding and conducting lotteries "in collaboration, association
or joint venture with any person, association, company on entity, whether domestic or foreign."
The language of the section is indisputably clear that with respect to its franchise or privilege "to
hold and conduct charity sweepstakes races, lotteries and other similar activities," the
PCSO cannot exercise it "in collaboration, association or joint venture" with any other party. This
is the unequivocal meaning and import of the phrase "except for the activities mentioned in the
preceding paragraph (A)," namely, "charity sweepstakes races, lotteries and other similar
activities."
4. ID.; ID.; ID.; ID.; NO INTERPRETATION ALLOWED TO RELAX OR CIRCUMVENT
PROHIBITION; REASON. No interpretation of the said provision to relax or circumvent the
prohibition can be allowed since the privilege to hold or conduct charity sweepstakes, races,
lotteries, or other similar activities is a franchise granted by the legislature to the PCSO. It is a
settled rule that "in all grants by the government to individuals or corporations of rights, privileges
and franchises, the words are to be taken most strongly against the grantee . . . . [o]ne who
claims a franchise or privilege in derogation of the common rights of the public must prove his
title thereto by a grant which is clearly and definitely expressed, and he cannot enlarge it by
equivocal or doubtful provisions or by probable inferences. Wherever is not unequivocally
granted is withheld. Nothing passes by mere implication." In short then, by the exception
explicitly made in paragraph B, Section 1 of its charter, the PCSO cannot share its franchise with
another by way of collaboration, association or joint venture. Neither can it assign, transfer, or
lease such franchise. It has been said that "the rights and privileges conferred under a franchise
may, without doubt, be assigned or transferred when the grant is to the grantee and assigns, or
is authorized by statute. On the other hand, the right of transfer or assignment may be restricted
by statute or the constitution, or be made subject to the approval of the grantor or a
governmental agency, such as a public utilities commission, except that an existing right of
assignment cannot be impaired by subsequent legislation."

7. CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACTS DECIDED BY INTENT OF

PARTIES NOT BY DESIGNATION OR TITLE THEREOF; CASE AT BAR. Whether the
contract in question is one of lease or whether the PGMC is merely an independent contractor
should not be decided on the basis of the title or designation of the contract but by the intent of
the parties, which may be gathered from the provisions of the contract itself. Animus hominis est
anima scripti. The intention of the party is the soul of the instrument. In order to give life or effect
to an instrument, it is essential to look to the intention of the individual who executed it. And,
pursuant to Article 1371 of the Civil Code, "to determine the intention of the contracting parties,
their contemporaneous and subsequent acts shall be principally considered." To put it more
bluntly, no one should be deceived by the title or designation of a contract. Undoubtedly, then,

78

the Berjaya Group Berhad knew all along that in connection with an on-line lottery system, the
PCSO had nothing but its franchise, which it solemnly guaranteed it had in the General
Information of the RFP. Howsoever viewed then, from the very inception, the PCSO and the
PGMC mutually understood that any arrangement between them would necessarily leave to the
PGMC the technical, operations, and management aspects of the on-line lottery system while
the PCSO would, primarily, provide the franchise. The words Gaming and Management in the
corporate name of respondent Philippine Gaming Management Corporation could not have been
conceived just for euphemistic purposes. Of course, the RFP cannot substitute for the Contract
of Lease which was subsequently executed by the PCSO and the PGMC. Nevertheless, the
Contract of Lease incorporates their intention and understanding. The so-called Contract of
Lease is not, therefore, what it purports to be. Its denomination as such is a crafty device,
carefully conceived, to provide a built-in defense in the event that the agreement is questioned
as violative of the exception in Section 1(B) of the PCSO's charter. The acuity or skill of its
draftsmen to accomplish that purpose easily manifests itself in the Contract of Lease. It is
outstanding for its careful and meticulous drafting designed to give an immediate impression that
it is a contract of lease. Yet, woven therein are provisions which negate its title and betray the
true intention of the parties to be in or have a joint venture for a period of eight years in the
operation and maintenance of the on-line lottery system.

such assistance, how will it be operating the lottery? Undoubtedly, it will be doing so "in
collaboration, association or joint venture" with PGMC, which, let it be added, will not be serving
as a mere "hired help" of PCSO subject to its control. PGMC will be functioning independently in
the discharge of its own assigned role as stipulated in detail under the contract. PGMC is plainly
a partner of PCSO in violation of law, no matter how PGMC's assistance is called or the contract
is denominated.
2. REMEDIAL LAW; ACTIONS; PARTIES; RULE ON LOCUS STANDI, NOT ABSOLUTE.
Concerning the doctrine of locus standi, I cannot agree that out of the sixty million Filipinos
affected by the proposed lottery, not a single solitary citizen can question the agreement. Locus
standi is not such an absolute rule that it cannot admit of exceptions under certain conditions or
circumstances like those attending this transaction. As I remarked in my dissent in Guazon v. De
Villa, 181 SCRA 623, "It is not only the owner of the burning house who has the right to call the
firemen. Every one has the right and responsibility to prevent the fire from spreading even if he
lives in the other block."
MELO, J., dissenting:
1. REMEDIAL LAW; ACTIONS; PARTIES; LOCUS STANDI; ABSENCE OF PERSONAL STAKE
IN THE OUTCOME OF THE CONTROVERSY OF PETITIONERS IN THE CASE AT BAR. I
submit that the petition before the Court deserves no less than outright dismissal for the reason
that petitioners, as concerned citizens and as taxpayers and as members of Congress, do not
possess the necessary legal standing to assail the validity of the contract of lease entered into
by the Philippine Charity Sweepstakes Office and the Philippine Gaming Management
Corporation relative to the establishment and operation of an "On-line Hi-Tech Lottery System" in
the country. As announced in Lamb vs. Phipps (22 Phil. [1912], 559), "[J]udicial power in its
nature, is the power to hear and decide causes pending between parties who have the right to
sue and be sued in the courts of law and equity." Necessarily, this implies that a party must show
a personal stake in the outcome of the controversy or an injury to himself that can be addressed
by a favorable decision so as to warrant his invocation of the court's jurisdiction and to justify the
court's remedial powers in his behalf (Whart vs. Seldin, 422 U.S. 490; Guzman vs. Marrero, 180
U.S. 81; McMicken vs. United States, 97 U.S. 204). Here, we have yet to see any of petitioners
acquiring a personal stake in the outcome of the controversy or being placed in a situation
whereby injury may be sustained if the contract of lease in question is implemented. It may be
that the contract has somehow evoked public interest which petitioners claim to represent. But
the alleged public interest which they pretend to represent is not only abroad and encompassing
but also strikingly and veritably indeterminate that one cannot truly say whether a handful of the
public, like herein petitioners, may lay a valid claim of representation in behalf of the millions of
citizens spread all over the land who may have just as many varied reactions relative to the
contract in question.

CRUZ, J., concurring:

1. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE CHARITY SWEEPSTAKES
OFFICE (PCSO); PROHIBITED FROM OPERATING A LOTTERY "IN ASSOCIATION,
COLLABORATION OR JOINT VENTURE WITH ANY PERSON, ASSOCIATION, COMPANY OR
ENTITY; CONTRACT OF "LEASE" WITH PGMC, A VIOLATION THEREOF. I am happy to
join Mr. Justice Hilario G. Davide, Jr. in his excellent ponencia. I will add the following personal
observations only for emphasis as it is not necessary to supplement his thorough exposition. It
should be quite clear, from the adroit way the contract has been drafted, that the primary
objective was to avoid the conclusion that PCSO will be operating a lottery "in association,
collaboration or joint venture with any person, association, company or entity," which is
prohibited by Section 1 ofRep. Act No. 1169 as amended by B.P. Blg. 42. Citing the self-serving
provisions of the contract, the respondents would have us believe that the contract is perfectly
lawful because all it does is provide for the lease to PCSO of the technical know-how and
equipment of PGMC, with PCSO acting as "the sole and individual operator" of the lottery. I am
glad we are not succumbing to this sophistry. Despite the artfulness of the contract (authorship
of which was pointedly denied by both counsel for the government and the private respondent
during the oral argument on this case), a careful study will reveal telling stipulations that it is
PGMC and not PCSO that will actually be operating the lottery. Even on the assumption that it is
PCSO that will be operating the lottery at the very start, the authority granted to PGMC by the
agreement will readily show that PCSO will not be acting alone, as the respondents pretend. In
fact, it cannot. PGMC is an indispensable co-worker because it has the equipment and the
technology and the management skills that PCSO does not have at this time for the operation of
the lottery. PCSO cannot deny that it needs the assistance of PGMC for this purpose, which was
its reason for entering into the contract in the first place. And when PCSO does avail itself of

2. ID.; ID.; ID.; ID.; TAXPAYER'S SUIT; ILLEGAL DISBURSEMENT OF PUBLIC FUNDS
INDISPENSABLE THERETO; ABSENCE THEREOF IN CASE AT BAR. Any effort to infuse

79

personality on petitioners by considering the present case as a "taxpayer's suit" could not cure
the lack of locus standi on the part of petitioners. As understood in this jurisdiction, a "taxpayer's
suit" refers to a case where the act complained of directly involves the illegal disbursement of
public funds derived from taxation (Pascual vs. Secretary of Public Works, 110 Phil. [1960]
331; Maceda vs. Macaraig, 197 SCRA [1991]; Lozada vs. COMELEC, 120 SCRA [1983]
337; Dumlao vs. COMELEC, 95 SCRA [1980] 392; Gonzales vs. Marcos, 65 SCRA [1975] 624).
It cannot be overstressed that no public fund raised by taxation is involved in this case. In fact, it
is even doubtful if the rentals which the PCSO will pay to the lessor for its operation of the lottery
system may be regarded as "public fund." The PCSO is not a revenue-collecting arm of the
government. Income or money realized by it from its operations will not and need not be turned
over to the National Treasury. Rather, this will constitute corporate funds which will remain with
the corporation to finance its various activities as authorized in its charter. And if ever some
semblance of "public character" may be said to attach to its earnings, it is simply because PCSO
is a government-owned or controlled entity and not a purely private enterprise. The case before
us is not a challenge to the validity of a statute or an attempt to restrain expenditure of public
funds pursuant to an alleged invalid congressional enactment. What petitioners ask us to do is to
nullify a simple contract of lease entered into by a government-owned corporation with a private
entity. That contract, as earlier pointed out, does not involve the disbursement of public funds but
of strictly corporate money. If every taxpayer, claiming to have interest in the contract, no matter
how remote, could come to this Court and seek nullification of said contract, the day may come
when the activities of government corporate entities will ground to a standstill on account of
nuisance suits filed against them by persons whose supposed interest in the contract is as
remote and as obscure as the interest of any man in the street. The dangers attendant thereto
are not hard to discern and this Court must not allow them to come to pass.

2. REMEDIAL LAW; ACTIONS; PARTIES; RULE ON LOCUS STANDI, NOT ABSOLUTE.

There is little substantive dispute that the possession of locus standi is not, in each and every
case, a rigid and absolute requirement for access to the courts. Certainly that is the case where
great issues of public law are at stake, issues which cannot be approached in the same way that
a court approaches a suit for the collection of a sum of money or a complaint for the recovery of
possession of a particular piece of land. The broad question is when, or in what types of cases,
the court should insist on a clear showing of locus standi understood as a direct and personal
interest in the subject matter of the case at bar, and when the court may or should relax that
apparently stringent requirement and proceed to deal with the legal or constitutional issues at
stake in a particular case.
3. ID.; ID.; ID.; ID.; SPECIFIC CONSIDERATIONS THEREFOR MUST BE INDICATED. I
submit, with respect, that it is not enough for the Court simply to invoke "public interest" or even
"paramount considerations of national interest," and to say that the specific requirements of such
public interest can only be ascertained on a "case to case" basis. For one thing, such an
approach is not intellectually satisfying. For another, such an answer appears to come too close
to saying that locus standi exists whenever at least a majority of the Members of this Court
participating in a case feel that an appropriate case for judicial intervention has arisen. This is
not, however, to say that there is somewhere an over-arching juridical principle or theory, waiting
to be discovered, that permits a ready answer to the question of when, or in what types of cases,
the need to show locus standi may be relaxed in greater or lesser degree. To my knowledge, no
satisfactory principle or theory has been discovered and none has been crafted, whether in our
jurisdiction or in the United States. I have neither the competence nor the opportunity to try to
craft such principle or formula. It might, however, be useful to attempt to indicate the
considerations of principle which, in the present case, appear to me to require an affirmative
answer to the question of whether or not petitioners are properly regarded as imbued with the
standing necessary to bring and maintain the present petition.

3. ID.; SUPREME COURT; INTERPRETATION OF CONTRACT, BEYOND ITS POWER TO

REVIEW. One final observation must be emphasized. When the petition at bench was filed,
the Court decided to hear the case on oral argument on the initial perception that a constitutional
issue could be involved. However, it now appears that no question of constitutional dimension is
at stake as indeed the majority barely touches on such an issue, concentrating as it does on its
interpretation of the contract between the Philippine Charity Sweepstakes Office and the
Philippine Gaming Management Corporation. I, therefore, vote to dismiss the petition.

4. ID.; ID.; ID.; ID.; ID.; CHARACTER OF THE FUNDS OR OTHER ASSETS INVOLVED, OF
MAJOR IMPORTANCE; CASE AT BAR. Firstly, the character of the funds or other assets
involved in the case is of major importance. In the case presently before the Court, the funds
involved are clearly public in nature. The funds to be generated by the proposed lottery are to be
raised from the population at large. Should the proposed operation be as successful as its
proponents project, those funds will come from well-nigh every town and barrio of Luzon. The
funds here involved are public in another very real sense: they will belong to the PCSO, a
government owned or controlled corporation and an instrumentality of the government and are
destined for utilization in social development projects which, at least in principle, are designed to
benefit the general public. My learned brothers Melo, Puno and Vitug, JJ. concede that
taxpayers' suits have been recognized as an exception to the traditional requirement of
recognized as an exception to the traditional requirement of locus standi. They insist, however,
that because the funds here involved will not have been generated by the exercise of the taxing
power of the Government, the present petition cannot be regarded as a taxpayer's suit and

FELICIANO, J., concurring:

1. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE CHARITY SWEEPSTAKES
OFFICE (PCSO); PROHIBITED FROM OPERATING A LOTTERY "IN ASSOCIATION,
COLLABORATION OR JOINT VENTURE WITH ANY PERSON, ASSOCIATION, COMPANY OR
ENTITY; CONTRACT OF LEASE ENTERED INTO BY PCSO AND PGMC, NULL AND VOID.
I agree with the conclusions reached by my distinguished brother in the Court Davide, Jr., J.,
both in respect of the questions of locus standi and in respect of the merits of this case, that is,
the issues of legality and constitutionality of the Contract of Lease entered into between the
Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management
Corporation (PGMC).

80

therefore, must be dismissed by the Court. It is my respectful submission that that constitutes
much too narrow a conception of the taxpayer's suit and of the public policy that it embodies. It is
also to overlook the fact that tax monies, strictly so called, constitute only one (1) of the major
categories of funds today raised and used for public purposes. It is widely known that the
principal sources of funding for government operations today include, not just taxes and customs
duties, but also revenues derived from activities of the Philippine Amusement Gaming
Corporation (PAGCOR), as well as the proceeds of privatization of government owned or
controlled corporations and other government owned assets. The interest of a private citizen in
seeing to it that public funds, from whatever source they may have been derived, go only to the
uses directed and permitted by law is as real and personal and substantial as the interest of a
private taxpayer in seeing to it that tax monies are not intercepted on their way to the public
treasury or otherwise diverted from uses prescribed or allowed by law. It is also pertinent to note
that the more successful the government is in raising revenues by non-traditional methods such
as PAGCOR operations and privatization measures, the lesser will be the pressure upon the
traditional sources of public revenues, i.e., the pocket books of individual taxpayers and
importers.

7. ID.; ID.; ID.; ID.; ID.; WIDE RANGE OF IMPACT OF THE ASSAILED CONTRACT; CASE AT
BAR. The wide range of impact of the Contract of Lease here assailed and of its
implementation, constitutes still another consideration of significance. In the case at bar, the
agreement if implemented will be practically nationwide in its scope and reach (the PCSOPGMC Contract is limited in its application to the Island of Luzon; but if the PCSO Contracts with
the other two [2] private "gaming management" corporations in respect of the Visayas and
Mindanao are substantially similar to PCSO's Contract with PGMC, then the Contract before us
may be said to be national indeed in its implications and consequences). Necessarily, the
amounts of money expected to be raised by the proposed activities of the PCSO and PGMC will
be very substantial, probably in the hundreds of millions of pesos. It is not easy to conceive of a
contract with greater and more far-reaching consequences, literally speaking, for the country
than the Contract of Lease here involved. Thus, the subject matter of the petition is not
something that the Court may casually pass over as unimportant and as not warranting the
expenditure of significant judicial resources.

5. ID.; ID.; ID.; ID.; ID.; PRESENCE OF CLEAR CASE OF DISREGARD OF CONSTITUTIONAL
OR STATUTORY PROHIBITION; CASE AT BAR. A second factor of high relevance is the
presence of a clear case of disregard of a constitutional or statutory prohibition by the public
respondent agency or instrumentality of the government. A showing that a constitutional or legal
provision is patently being disregarded by the agency or instrumentality whose act is being
assailed, can scarcely be disregarded by court. The concept of locus standi which is part and
parcel of the broader notion of ripeness of the case "does not operate independently and is
not alone decisive. . . . [I]t is in substantial part a function of a judge's estimate of the merits of
the constitutional [or legal] issue." The notion of locus standi and the judge's conclusions about
the merits of the case, in other words, interact with each other. Where the Court perceives a
serious issue of violation of some constitutional or statutory limitation, it will be much less difficult
for the Court to find locus standi in the petitioner and to confront the legal or constitutional issue.
In the present case, the majority of the Court considers that a very substantial showing has been
made that the Contract of Lease between the PCSO and the PGMC flies in the face of legal
limitations.

1. REMEDIAL LAW; SUPREME COURT; POWER OF PREVIEW, LIMITED. Moral or legal

questions aside, I believe that there are unfortunately certain standards that have to be followed
in the exercise of this Court's awesome power of review before this Court could even begin to
assay the validity of the contract between the PCSO and the PGMC. This, in spite of the
apparent expansion of judicial power granted by Section 1 of Article VIII of the 1987 Constitution.
It is fundamental that such standards be complied with before this Court could even begin to
explore the substantive issues raised by any controversy brought before it, for no issue brought
before this court could possibly be so fundamental and paramount as to warrant a relaxation of
the requisite rules for judicial review developed by settled jurisprudence in order to avoid
entangling this court in controversies which properly belong to the legislative or executive
branches of our government. The potential harm to our system of government, premised on the
concept of separation of powers, by the Court eager to exercise its powers and prerogatives at
every turn, cannot be gainsaid. The Constitution does not mandate this Court to wield the power
of judicial review with excessive vigor and alacrity in every area or at every turn, except in
appropriate cases and controversies which meet established requirements for constitutional
adjudication. Article VIII, Sec. 1 of the Constitution notwithstanding, there are questions which I
believe are still beyond the pale of judicial power. Moreover, it is my considered opinion that the
instant petition does not meet the requirements set by this court for a valid exercise of judicial
review.

KAPUNAN, J., dissenting:

6. ID.; ID.; ID.; ID.; ID.; LACK OF ANY OTHER PARTY WITH A MORE DIRECT AND SPECIFIC
INTEREST; CASE AT BAR. A third consideration of importance in the present case is the lack
of any other party with a more direct and specific interest in raising the questions here being
raised. Though a public bidding was held, no losing or dissatisfied bidder has come before the
Court. The Office of the Ombudsman has not, to the knowledge of the Court, raised questions
about the legality or constitutionality of the Contract of Lease here involved. The National
Government itself, through the Office of the Solicitor General, is defending the PCSO Contract
(though it had not participated in the drafting thereof). In a situation like that here obtaining, the
submission may be made that the institution, so well known in corporation law and practice, of
the corporate stockholders' derivative suit furnishes an appropriate analogy and that on the basis
of such an analogy, a taxpayer's derivative suit should be recognized as available.

2. ID.; ID.; ID.; ACTUAL CASE AND CONTROVERSY, INDISPENSABLE.

Our Constitution expressly defines judicial power as including "the duty to settle actual casesand
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 a lack or excess of
jurisdiction on the part of any branch or instrumentality of the government." This constitutional
requirement for an actual case and controversy limits this Court's power of review to precisely
those suits between adversary litigants with real interests at stake thus preventing it from making

81

all sorts of hypothetical pronouncements on abstract, contingent and amorphous issues. The
Court will therefore not pass upon the validity of an act of government or a statute passed by a
legislative body without a requisite showing of injury. A personal stake is essential, which
absence renders our pronouncements gratuitous and certainly violative of the constitutional
requirement for actual cases and controversies.

resort to the function of judicial review, particularly in areas of economic policy has become
lamentably too common as to dwarf the political capacity of the people expressed through their
representatives in the policy making branches of government and to deaden their sense of moral
responsibility.
5. REMEDIAL LAW; SUPREME COURT; WITHOUT JURISDICTION OVER DISPUTES ON
VALIDITY OF CONTRACTS; CASE AT BAR. The instant petition was brought to this Court on
the assumption that the issue at bench raises primarily constitutional issues. As it has ultimately
turned out, the core foundation of the petitioner's objections to the LOTTO operations was based
on the validity of the contract between the PCSO and the PGMC in the light of Section 1 of R.A.
1169 as amended by B.P. Blg. 427. It might have been much more appropriate for the issue to
have taken its normal course in the courts below.

3. ID.; ID.; ID.; LOCUS STANDI, REQUIRED. The requirement for standing based on
personal injury may of course be bypassed, as the petitioners in this case attempt to do, by
considering the case as a "taxpayer suit" which would thereby clothe them with the personality
they would lack under ordinary circumstances. However, the act assailed by the petitioners on
the whole involves the generation rather than disbursement of public funds. In a line of cases
starting from Pascual v. Secretary of Public Works "taxpayer suits" have been understood to
refer only to those cases where the act or statute assailed involves the illegal or unconstitutional
disbursement of public funds derived from taxation. The main premise behind the "taxpayer suit"
is that the pecuniary interest of the taxpayer is involved whenever there is an illegal or wasteful
use of public funds which grants them the right to question the appropriation or disbursement on
the basis of their contribution to government funds. Since it has not been alleged that an illegal
appropriation or disbursement of a fund derived from taxation would be made in the instant case,
I fail to see how the petitioners in this case would be able to satisfy the locus standi requirement
on the basis of a "taxpayer's suit". This alone should inhibit this Court from proceeding with the
case at bench. The interest alleged and the potential injury asserted are far too general and
hypothetical for us to rush into a judicial determination of what to me appears to be judgment
better left to executive branch of our government.

PUNO, J., dissenting:

1. CONSTITUTIONAL LAW; JUDICIAL POWER, DEFINED. 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.
2. REMEDIAL LAW; ACTIONS; LOCUS STANDI; REQUIREMENTS BEFORE ONE CAN COME
TO COURT TO LITIGATE A CONSTITUTIONAL ISSUE. The phrase "actual controversies
involving rights which are legally demandable and enforceable" in Section 1 of Article VIII of the
Constitution has acquired a cultivated meaning given by courts. It spells out the requirements
that must be satisfied before one can come to court to litigate a constitutional issue. Our
distinguished colleague, Mr. Justice Isagani A. Cruz, gives a shorthand summary of these
requirements when he states that no constitutional question will be heard and decided by courts
unless there is a showing of the following: . . . (1) there must be an actual case or controversy;
(2) the question of constitutionality must be raised by the proper party; (3) the constitutional
question must be raised at the earliest possible opportunity; and (4) the decision of the
constitutional question must be necessary to the determination of the case itself.

4. CONSTITUTIONAL LAW; SEPARATION OF POWERS; SHOULD NOT BE SLIGHTLY

BRUSHED ASIDE ON THE MERE SUPPOSITION THAT ISSUE BEFORE THE HIGH
TRIBUNAL IS OF PARAMOUNT PUBLIC INTEREST. This brings me to one more important
point: The idea that a norm of constitutional adjudication could be lightly brushed aside on the
mere supposition that an issue before the Court is of paramount public concern does great harm
to a democratic system which espouses a delicate balance between three separate but co-equal
branches of government. It is equally of paramount public concern, certainly paramount to the
survival of our democracy, that acts of the other branches of government are accorded due
respect by this Court. Such acts, done within their sphere of competence, have been and
should always be - accorded with a presumption of regularity. When such acts are assailed as
illegal or unconstitutional, the burden falls upon those who assail these acts to prove that they
satisfy the essential norms of constitutional adjudication, because when we finally proceed to
declare an act of the executive or legislative branch of our government unconstitutional or illegal,
what we actually accomplish is the thwarting of the will of the elected representatives of the
people in the executive or legislative branches of government. Notwithstanding Article
VIII, Section 1 of the Constitution, since the exercise of the power of judicial review by this Court
is inherently antidemocratic, this Court should exercise a becoming modesty in acting as
a revisor of an act of the executive or legislative branch. The tendency of a frequent and easy

3. ID.; ID.; ID.; RULE THEREON RELAXED BUT NOT ELIMINATED. The complexion of the
rule on locus standi has been undergoing a change. Mr. Justice Cruz has observed the
continuing relaxation of the rule on standing. Last July 30, 1993, we further relaxed the rule on
standing in Oposa, et al. v. Hon. Fulgencio S. Factoran, Jr.,where we recognized the locus
standi of minors representing themselves as well as generations unborn to protect their
constitutional right to a balanced and healthful ecology. I am perfectly at peace with the drift of
our decisions liberalizing the rule on locus standi. The once stubborn disinclination to decide
constitutional issues due to lack of locus standi is incompatible with the expansion of judicial
power mandated in section 1 of Article VIII of the Constitution, i.e., "to determine whether or not
there has been a grave abuse of discretion, amounting to lack or excess of jurisdiction on the

82

part of any branch or instrumentality of the government." As we held thru the ground
breaking ponencia of Mr. Justice Cruz in Daza v. Singson, this provision no longer precludes the
Court from resolving political questions in proper cases. But even perusing this provision as a
constitutional warrant for the court to enter the once forbidden political thicket, it is clear that the
requirement of locus standi has not been jettisoned by the Constitution for it still commands
courts in no uncertain terms to settle only "actual controversies involving rights which are legally
demandable and enforceable." Stated otherwise, courts are neither free to decide all kinds of
cases dumped into their laps nor are they free to open their doors to all parties or entities
claiming a grievance.

6. ID.; ID.; ID.; TAXPAYER'S SUIT; CASE AT BAR DOES NOT INVOLVE EXPENDITURE OF
PUBLIC MONEY DERIVED FROM TAXATION. Petitioners also contend they havelocus
standi as taxpayers. But the case at bench does not involve any expenditure of public money on
the part of PCSO. In fact, paragraph 2 of the Contract of Lease provides that it is PGMC that
shall build, furnish, and maintain at its own expense and risk the facilities for the On-Line Lottery
System of PCSO and shall bear all maintenance and other costs. Thus, PGMC alleged it has
already spent P245M in equipment and fixtures and would be investing close to P1 billion to
supply adequately the technology and other requirements of PCSO. If no tax money is being
illegally deflected in the Contract of Lease between PCSO and PGMC, petitioners have no
standing to impugn its validity as taxpayers.

4. ID.; ID.; ID.; ID.; RATIONALE. The rationale for this constitutional requirement of locus
standi is by no means trifle. It is intended "to assure a vigorous adversary presentation of the
case, and, perhaps more importantly to warrant the judiciary's overruling the determination of a
coordinate, democratically elected organ of government." It thus goes to the very essence of
representative democracies. A lesser but not insignificant reason for screening the standing of
persons who desire to litigate constitutional issues is economic in character. Given the
sparseness of our resources, the capacity of courts to render efficient judicial service to our
people is severely limited. For courts to indiscriminately open their doors to all types of suits and
suitors is for them to unduly overburden their dockets, and ultimately render themselves
ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary
today.

7. ID.; ID.; ID.; CITIZEN SUIT; REQUIREMENTS. Next, petitioners plead their standing as
"concerned citizens." As citizens, petitioners are pleading that they be allowed to advocate the
constitutional rights of other persons who are not before the court and whose protection is
allegedly their concern. A citizen qua citizen suit urges a greater relaxation of the rule on locus
standi. I feel no aversion to the further relaxation of the rule on standing to accommodate what in
other jurisdiction is known as an assertion of jus tertii in constitutional litigation provided the
claimant can demonstrate: (1) an injury in fact to himself, and (2) the need to prevent the erosion
of a preferred constitutional right of a third person. As stressed before, the first requirement of
injury in fact cannot be abandoned for it is an essential element for the exercise of judicial power.
The second requirement recognized society's right in the protection of certain preferred rights
in the Constitution even when the rightholders are not before the court. The theory is that their
dilution has a substantial fall out detriment to the rights of others, hence the latter can vindicate
them.

5. ID.; ID.; ID.; PETITIONERS IN CASE AT BAR HAVE NOT SUSTAINED OR ARE IN
IMMEDIATE DANGER OF SUSTAINING AN INJURY AS A RESULT OF THE SAID CONTRACT
OF LEASE. Prescinding from these premises, and with great reluctance, I am not prepared to
concede the standing to sue of petitioners. On a personal level, they have not shown the
elemental injury in fact which will endow them with a standing to sue. It must be stressed that
petitioners are in the main, seeking the nullity not of a law but of a Contract of Lease. Not one of
the petitioners is a party to the Contract of Lease executed between PCSO and PGMC. None of
the petitioners participated in the bidding, and hence they are not losing bidders. They are
complete strangers to the contract. They stand neither to gain nor to lose economically by its
enforcement. It seems to me unusual that an unaffected third party to a contract could be
allowed to question its validity. Petitioner Kilosbayan cannot justify this officious interference on
the ground of its commitment to "truth, justice and national renewal." Such commitment to truth,
justice and national renewal, however noble it may be, cannot give Kilosbayan a roving
commission to check the validity of contracts entered into by the government and its agencies.
Kilosbayan is not a private commission on audit. Neither can I perceive how the other petitioners
can be personally injured by the Contract of Lease between PCSO and PGMC even if petitioner
Salonga assails as unmitigated fraud the statistical probability of winning the lotto as he
compared it to the probability of being struck twice by lightning. The reason is obvious: none of
the petitioners will be exposed to this alleged fraud for all of them profess to abjure playing the
lotto. It is self-evident that lotto cannot physically or spiritually injure him who does not indulge in
it.

8. ID.; ID.; ID.; ID.; ID.; CASE AT BAR. In the case at bench, it is difficult to see how
petitioners can satisfy these two requirements to maintain a jus tertii claim. They claim violation
of two constitutional provisions, to wit: "Section 1, Article XIII and Section 11, Article XII." Section
1, Article XIII of the Constitution cannot be the matrix of petitioners' jus tertii claim for it
expresses no more than a policy direction to the legislative in the discharge of its ordained duty to give highest priority to the enactment of measures that protect and enhance the right of all the
people to human dignity, reduce social, economic, and political inequalities and remove cultural
inequities by equitably diffusing wealth and political power for the common good. Whether the
act of the legislature in amending the charter of PCSO by giving it the authority to conduct lotto
and whether the Contract of Lease entered into between PCSO and PGMC are incongruent to
the policy direction of this constitutional provision is a highly debatable proposition and can be
endlessly argued. Respondents steadfastly insist that the operation of lotto will increase the
revenue base of PCSO and enable government to provide a wider range of social services to the
people. They also allege that the operation of high-tech lotto will eradicate illegaljueteng.
Petitioners are scandalized by this submission. They dismiss gambling as evil per se and
castigate government for attempting to correct a wrong by committing another wrong. In any

83

event, the proper forum for this debate, however cerebrally exciting it may be, is not this court but
congress.

ascertained on a 'case to case' basis. For one thing, such an approach is not intellectually
satisfying. For another, such an answer appears to come too close to saying that locus standi
exists whenever at least a majority of the Members of this Court participating in a case feel that
an appropriate case for judicial intervention has arisen."

9. ID.; ID.; ID.; NOT CONFERRED BY MERELY ADVOCATING THE RIGHTS OF

HYPOTHETICAL THIRD PARTIES NOT BEFORE THE COURT. I am not also convinced that
petitioners can justify their locus standi to advocate the rights of hypothetical third parties not
before the court by invoking the need to keep inviolate Section 11, Article XII of
the Constitution which imposes a nationality requirement on operators of a public utility. For even
assuming arguendo that PGMC is a public utility, still, the records do not at the moment bear out
the claim of petitioners that PGMC is a foreign owned and controlled corporation. This factual
issue remains unsettled and is still the subject of litigation by the parties in the Securities and
Exchange Commission. We are not at liberty to anticipate the verdict on this contested factual
issue. But over and above this consideration, I respectfully submit that this constitutional
provision does not confer on third parties any right of a preferred status comparable to the Bill of
Rights whose dilution will justify petitioners to vindicate them in behalf of its rightholders. The
legal right of hypothetical third parties they profess to advocate is to my mind too impersonal, too
unsubstantial, too indirect, too amorphous to justify their access to this Court and the further
lowering of the constitutional barrier oflocus standi.

PADILLA, J., concurring:

1. REMEDIAL
LAW;
ACTIONS;
PARTIES;
PROCEDURAL
RULE
ON LOCUS
STANDI RELAXED WHERE ISSUES RAISED ARE OF GREAT IMPORTANCE; CASE AT BAR.
Considering the importance of the issue involved, concerning as it does the political exercise
of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and
violation of the Constitution by respondent, We resolved to brush aside the question of
procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held
similarly through Mr. Justice Edgardo L. Paras in Osmea vs. Commission on Elections." (De
Guia vs. Comelec, G.R. No. 104712, May 6, 1992, 208 SCRA 420) I view the present case as
falling within the De Guia case doctrine. For, when the contract of lease in question seeks to
establish and operate a nationwide gambling network with substantial if not controlling foreign
participation, then the issue is of paramount national interest and importance as to justify and
warrant a relaxation of the above-mentioned procedural rule on locus standi.

10. ID.; ID.; ID.; NOT CONFERRED BY MERE FACT OF BEING LEGISLATORS. Again, with
regret, I do not agree that the distinguished status of some of the petitioners as lawmakers gives
them the appropriate locus standi. I cannot perceive how their constitutional rights and
prerogatives as legislators can be adversely affected by the contract in question. Their right to
enact laws for the general conduct of our society remains unimpaired and undiminished. Their
status as legislators, notwithstanding, they have to demonstrate that the said contract has
caused them to suffer a personal, direct, and substantial injury in fact. They cannot simply
advance a generic grievance in common with the people in general.

2. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE CHARITY SWEEPSTAKES

OFFICE (PCSO); PROHIBITED FROM UNDERTAKING OR ENGAGING IN LOTTERIES IN
"COLLABORATION, ASSOCIATION OR JOINT VENTURES WITH OTHERS; RATIONALE. It
is at once clear from Republic Act No. 1109 as amended by BP. No. 42 that, while the PCSO
charter allows the PCSO to itself engage in lotteries, it does not however permit the PCSO to
undertake or engage in lotteries in "collaboration, association or joint venture" with others. The
palpable reason for this prohibition is, that PCSO should not and cannot be made a vehicle for
an otherwise prohibited foreign or domestic entity to engage in lotteries (gambling activities) in
the Philippines.

11. ID.; ID.; ID.; NOT A PLAIN PROCEDURAL RULE BUT A CONSTITUTIONAL
REQUIREMENT. I am not unaware of our ruling in De Guia v. Comelec, G.R. No. 104712,
May 6, 1992, 208 SCRA 420. It is my respectful submission, however, that we should re-examine
de Guia. It treated the rule on locus standi as a mere procedural rule. It is not a plain procedural
rule but a constitutional requirement derived from Section 1, Article VIII of the Constitution which
mandates courts of justice to settle only"actual controversies involving rights which are legally
demandable and enforceable." The phrase has been construed since time immemorial to mean
that a party in a constitutional litigation must demonstrate a standing to sue. By downgrading the
requirement on locus standi as a procedural rule which can be discarded in the name of public
interest, we are in effect amending the Constitution by judicial fiat.

3. ID.; ID.; ID.; ID.; LEASE CONTRACT ENTERED INTO BY PCSO WITH PGMC, A JOINT
VENTURE. The core question then is whether the lease contract between PCSO and PGMC
is a device whereby PCSO will engage in lottery in collaboration, association or joint venture with
another, i.e. PGMC. On a slightly different plane and, perhaps simplified, I consider the
agreement or arrangement between the PCSO and PGMC a joint venture because each party to
the contract contributes its share in the enterprise or project. PGMC contributes its facilities,
equipment and know-how (expertise). PCSO contributes (aside from its charter) the market,
directly or through dealers and this to me is most important in the totality or mass of
the Filipino gambling elements who will invest in lotto tickets. PGMC will get its 4.9% of gross
receipts (with assumption of certain risks in the course of lotto operations); the residue of the
whole exercise will go to PCSO. To any person with a minimum of business know-how, this a
joint venture between PCSO and PGMC, plain and simple. But assuming ex gratia
argumenti that such arrangement between PCSO and PGMC is not a joint venture between the

12. ID.; ID.; ID.; SHOULD NOT BE BRUSHED ASIDE WHERE A CASE RAISES AN
IMPORTANT ISSUE. De Guia would also brush aside the rule on locus standi if a case raises
an important issue. In this regard, I join the learned observation of Mr. Justice Feliciano: "that it is
not enough for the Court simply to invoke 'public interest' or even paramount considerations of
national interest,' and to say that the specific requirements of such public interest can only be

84

two of them to install and operate an "on-line hi-tech lotto system" in the country, it can hardly be
denied that it is, at the very least, an association or collaboration between PCSO and PGMC.
For one cannot do without the other in the installation, operation and, most importantly,
marketing of the entire enterprise or project in this country.

4. ID.; ID.; ID.; ID.; ID.; CASE MUST INVOLVE ILLEGAL DISBURSEMENT OF PUBLIC FUNDS
DERIVED FROM TAXATION. A "taxpayer's suit," enough to confer locus standi to a party, we
have held before, is understood to be a case where the act complained of directly involves illegal
disbursement of public funds derived from taxation. It is not enough that the dispute concerns
public funds. A contrary rule could easily lead to a limitless application of the term "taxpayer's
suit," already by itself a broad concept, since a questioned act of government would almost so
invariably entail, as a practical matter, a financial burden of some kind.

4. ID.; ID.; ID.; ID.; ID.; CONTRACT, NULL AND VOID. Indeed, the contract of lease in
question is a clear violation of Republic Act No. 1169 as amended by BP No.. 42 (the PCSO
charter). Having arrived at the conclusion that the contract of lease in question between the
PCSO and PGMC is illegal and, therefore, invalid. I find it unnecessary to dwell on the other
issues raised in the pleadings and arguments of the parties.

5. CONSTITUTIONAL LAW; COURTS; JUDICIAL POWER, DEFINED. A provision which has

been introduced by the 1987 Constitution is a definition, for the first time in our fundamental law,
of the term "judicial power," as such authority and duty of 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" (Article VIII, Section
1, Constitution).

VITUG, J., Separate Opinion:

1. CONSTITUTIONAL LAW; COURTS; JUDICIAL POWER, CONSTRUED. Judicial power
encompasses both an authority and duty to resolve "actual controversies involving rights which
are legally demandable and enforceable" (Article VIII, Section 1, 1987 Constitution). As early as
the case of Lamb vs. Phipps, this Court ruled: "Judicial power, in its nature, is the power to hear
and decide causes pending between parties who have the right to sue in the courts of law and
equity."

6. REMEDIAL LAW; ACTIONS; PARTIES; RULE ON LOCUS STANDI, JURISDICTIONAL.

While any act of government, be it executive in nature or legislative in character, may be struck
down and declared a nullity either because it contravenes an express provision of the
Constitution or because it is perceived and found to be attended by or the result of grave abuse
of discretion, amounting to lack or excess of jurisdiction, that issue, however, must first be raised
in a proper judicial controversy. The Court's authority to look into and grant relief in such cases
would necessitate locus standi on the part of party litigants. This requirement, in my considered
view, is not merely procedural or technical but goes into the essence of jurisdiction and the
competence of courts to take cognizance of justiciable disputes.

2. REMEDIAL LAW; ACTIONS; PARTIES; LOCUS STANDI; DEFINED. An essential part of,
and corollary to, this principle is the locus standi of a party litigant, referring to one who is directly
affected by, and whose interest is immediate and substantial in, the controversy. The rule
requires that a party must show a personal stake in the outcome of the case or an injury to
himself that can be redressed by a favorable decision so as to warrant his invocation of the
court's jurisdiction and to justify the exercise of the court's remedial powers in his behalf. If it
were otherwise, the exercise of that power can easily become too unwieldy by its sheer
magnitude and scope to a point that may, in no small degree, adversely affect its intended
essentiality, stability and consequentiality.

7. ID.; SUPREME COURT; WITHOUT JURISDICTION TO RESOLVE FACTUAL ISSUES; CASE

AT BAR. A further set-back in entertaining the petition is that it unfortunately likewise strikes
at factual issues. The allegations to the effect that irregularities have been committed in the
processing and evaluation of the bids to favor respondent PGMC; that the Malacaang Special
Review Committee did not verify warranties embodied in the contract; that the operation of
telecommunication facilities is indispensable in the operation of the lottery system; the
involvement of multi-national corporations in the operation of the on-line "hi-tech" lottery system,
and the like, require the submission of evidence. This Court is not a trier of facts, and it cannot,
at this time, resolve the above issues. Just recently, the Court has noted petitioners'
manifestation of its petition with the Securities and Exchange Commission "for the nullification of
the General Information Sheets of PGMC" in respect particularly to the nationality holdings in the
corporation. The doctrine of primary jurisdiction would not justify a disregard of the jurisdiction of,
nor would it permit us to now preempt, said Commission on the matter.

3. ID.; ID.; ID.; ID.; TAXPAYER'S SUIT, AN EXCEPTION THERETO; BASIS. Locus standi,
nevertheless, admits of the so-called "taxpayer's suit." Taxpayer's suits are actions or
proceedings initiated by one or more taxpayers in their own behalf or, conjunctively, in
representation of others similarly situated for the purpose of declaring illegal or unauthorized
certain acts of public officials which are claimed to be injurious to their common interests as such
taxpayers (Cf. 71 Am Jur 2d., 179-180). The principle is predicated upon the theory that
taxpayers are, in equity, the cestui que trust of tax funds, and any illegal diminution thereof by
public officials constitutes a breach of trust even as it may result in an increased burden on
taxpayers (Haddock vs. Board of Public Education, 86 A 2d 157; Henderson vs. McCormick, 17
ALR 2d 470).

8. CONSTITUTIONAL LAW; SUPREME COURT; POWER OF REVIEW, LIMITED. The Court

must recognize the limitations of its own authority. Courts neither legislate nor ignore legal
mandates. Republic Act No. 1169, as amended, explicitly gives public respondent PCSO the
authority and power "to hold and conduct sweepstakes races, lotteries, and other similar

85

activities. In People vs. Dionisio, cited by the petitioners themselves, we remarked: "What evils
should be corrected as pernicious to the body politic, and how correction should be done, is a
matter primarily addressed to the discretion of the legislative department, not of the courts . . ."
The constraints on judicial power are clear. I feel, the Court must thus beg off, albeit not without
reluctance, from giving due course to the instant petition.

Before August 1993, the PCSO formally issued a Request for Proposal (RFP) for the Lease
Contract of an on-line lottery system for the PCSO. 2 Relevant provisions of the RFP are the
following:
"1. EXECUTIVE SUMMARY

DECISION

xxx xxx xxx

DAVIDE, JR., J p:

1.2 PCSO is seeking a suitable contractor which shall build, at its own
expense, all the facilities ('Facilities') needed to operate and
maintain a nationwide on-line lottery system. PCSO shall lease
the Facilities for a fixed percentage of quarterly gross receipts.
All receipts from ticket sales shall be turned over directly to
PCSO. All capital, operating expenses and expansion
expenses and risks shall be for the exclusive account of the
Lessor.

This is a special civil action for prohibition and injunction, with a prayer for a temporary
restraining order and preliminary injunction, which seeks to prohibit and restrain the
implementation of the "Contract of Lease" executed by the Philippine Charity Sweepstakes
Office (PCSO) and the Philippine Gaming Management Corporation (PGMC) in connection with
the on-line lottery system, also known as "lotto."
Petitioner Kilosbayan, Incorporated (KILOSBAYAN) avers that it is a non-stock domestic
corporation composed of civic-spirited citizens, pastors, priests, nuns, and lay leaders who are
committed to the cause of truth, justice, and national renewal. The rest of the petitioners, except
Senators Freddie Webb and Wigberto Taada and Representative Joker P. Arroyo, are suing in
their capacities as members of the Board of Trustees of KILOSBAYAN and as taxpayers and
concerned citizens. Senators Webb and Taada and Representative Arroyo are suing in their
capacities as members of Congress and as taxpayers and concerned citizens of the Philippines.

xxxx xxx xxx

1.4 The lease shall be for a period not exceeding fifteen (15) years.
1.5 The Lessor is expected to submit a comprehensive nationwide lottery
development plan ('Development Plan') which will include the
game, the marketing of the games, and the logistics to
introduce the games to all the cities and municipalities of the
country within five (5) years.

The pleadings of the parties disclose the factual antecedents which triggered off the filing of this
petition.
Pursuant to Section 1 of the charter of the PCSO (R.A. No. 1169, as amended by B.P. Blg. 42)
which grants it the authority to hold and conduct "charity sweepstakes races, lotteries and other
similar activities," the PCSO decided to establish an on-line lottery system for the purpose of
increasing its revenue base and diversifying its sources of funds. Sometime before March 1993,
after learning that the PCSO was interested in operating an on-line lottery system, the Berjaya
Group Berhad, "a multinational company and one of the ten largest public companies in
Malaysia," long "engaged in, among others, successful lottery operations in Asia, running both
Lotto and Digit games, thru its subsidiary, Sports Toto Malaysia," with its "affiliate, the
International Totalizator Systems, Inc., . . . an American public company engaged in the
international sale or provision of computer systems, softwares, terminals, training and other
technical services to the gaming industry," "became interested to offer its services and resources
to PCSO." As an initial step, Berjaya Group Berhad (through its individual nominees) organized
with some Filipino investors in March 1993 a Philippine corporation known as the Philippine
Gaming Management Corporation (PGMC), which "was intended to be the medium through
which the technical and management services required for the project would be offered and
delivered to PCSO." 1

xxx xxx xxx

1.7 The Lessor shall be selected based on its technical expertise,
hardware and software capability, maintenance support, and
financial resources. The Development Plan shall have a
substantial bearing on the choice of the Lessor. The Lessor
shall be a domestic corporation, with at least sixty percent
(60%) of its shares owned by Filipino shareholders. . .
The office of the President, the National Disaster Control Coordinating
Council, the Philippine National Police, and the National
Bureau of Investigation shall be authorized to use the
nationwide telecommunications system of the Facilities Free of
Charge.

86

1.8 Upon expiration of the lease, the Facilities shall be owned by PCSO
without any additional consideration. 3

xxx xxx xxx

The Proponent is expected to provide upgrades to modernize
the entire gaming over the life of the lease contract.

xxx xxx xxx

The Proponent is expected to provide technology transfer to

PCSO personnel. 4

2.2 OBJECTIVES
The objectives of PCSO in leasing the Facilities from a private entity are
as follows:

xxx xxx xxx

xxx xxx xxx

7. GENERAL GUIDELINES FOR PROPONENTS

2.2.2 Enable PCSO to operate a nationwide on-line lottery

system at no expense or risk to the government.

xxx xxx xxx

Finally, the Proponent must be able to stand the acid test of proving that
it is an entity able to take on the role of responsible maintainer
of the on-line lottery system, and able to achieve PCSO's goal
of formalizing an on-line lottery system to achieve its mandated
objective. 5

xxx xxx xxx

2.4 DUTIES AND RESPONSIBILITIES OF THE LESSOR
xxx xxx xxx

xxx xxx xxx

2.4.2 THE LESSOR

16. DEFINITION OF TERMS

The Proponent is expected to furnish and maintain the

Facilities, including the personnel needed to operate
the computers, the communications network and
sales offices under a build-lease basis. The printing
of tickets shall be undertaken under the supervision
and control of PCSO. The Facilities shall enable
PCSO to computerize the entire gaming system.

Facilities: All capital equipment, computers, terminals, software,

nationwide telecommunication network, ticket sales offices,
furnishings, and fixtures; printing costs; costs of salaries and
wages; advertising and promotion expenses; maintenance
costs; expansion and replacement costs; security and
insurance, and all other related expenses needed to operate
nationwide on-line lottery system." 6
Considering the above citizenship requirement, the PGMC claims that the Berjaya Group
"undertook to reduce its equity stakes in PGMC to 40%," by selling 35% out of the original 75%
foreign stockholdings to local investors.

The Proponent is expected to formulate and design consumeroriented Master Games Plan suited to the
marketplace, especially geared to Filipino gaming
habits and preferences. In addition, the Master
Games Plan is expected to include to Product Plan
for each game and explain how each will be
introduced into the market. This will be an integral
part of the Development Plan which PCSO will
require from the Proponent.

On 15 August 1993, PGMC submitted its bid to the PCSO. 7

The bids were evaluated by the Special Pre-Qualification Bids and Awards Committee (SPBAC)
for the on-line lottery and its Bid Report was thereafter submitted to the Office of the
President. 8 The submission was preceded by complaints by the Committee's Chairperson, Dr.
Mita Pardo de Tavera. 9

87

On 21 October 1993, the Office of the President announced that it had given the respondent
PGMC the go-signal to operate the country's on-line lottery system and that the corresponding
implementing contract would be submitted not later than 8 November 1993 "for final clearance
and approval by the Chief Executive." 10 This announcement was published in the Manila
Standard, Philippine Daily Inquirer, and the Manila Times on 29 October 1993. 11

1.3 Facilities All capital equipment, computers, terminals,

software (including source codes for the On-Line
Lottery application software for the terminals,
telecommunications
and
central
systems),
technology,
intellectual
property
rights,
telecommunications network, and furnishings and
fixtures.

On 4 November 1993, KILOSBAYAN sent an open letter to President Fidel V. Ramos strongly
opposing the setting up of the on-line lottery system on the basis of serious moral and ethical
considerations. 12

1.4 Maintenance and Other Costs All costs and expenses

relating to printing, manpower, salaries and wages,
advertising and promotion, maintenance expansion
and replacement, security and insurance, and all
other related expenses needed to operate an OnLine Lottery System, which shall be for the account
of the LESSOR. All expenses relating to the settingup, operation and maintenance of ticket sales offices
of dealers and retailers shall be borne by PCSO's
dealers and retailers.

At the meeting of the Committee on Games and Amusements of the Senate on 12 November
1993, KILOSBAYAN reiterated its vigorous opposition to the on-line lottery on account of its
immorality and illegality. 13
On 19 November 1993, the media reported that despite the opposition, "Malacaang will push
through with the operation of an on-line lottery system nationwide" and that it is actually the
respondent PCSO which will operate the lottery while the winning corporate bidders are merely
"lessors." 14

1.5 Development Plan The detailed plan of all games, the

marketing thereof, number of players, value of
winnings and the logistics required to introduce the
games, including the Master Games Plan as
approved by PCSO, attached hereto as Annex "A",
modified as necessary by the provisions of this
Contract.

On 1 December 1993, KILOSBAYAN requested copies of all documents pertaining to the lottery
award from Executive Secretary Teofisto Guingona, Jr. In his answer of 17 December 1993, the
Executive Secretary informed KILOSBAYAN that the requested documents would be duly
transmitted before the end of the month. 15 However, on that same date, an agreement
denominated as "Contract of Lease" was finally executed by respondent PCSO and respondent
PGMC. 16 The President, per the press statement issued by the Office of the President,
approved it on 20 December 1993. 17

xxx xxx xxx

In view of their materiality and relevance, we quote the following salient provisions of the
Contract of Lease:

1.8 Escrow Deposit The proposal deposit in the sum of

Three Hundred Million Pesos (P300,000,000.00)
submitted by the LESSOR to PCSO pursuant to the
requirements of the Request for Proposals.

"1. DEFINITIONS
The following words and terms shall have the following respective
meaning:

2. SUBJECT MATTER OF THE LEASE

1.1 Rental Fee Amount to be paid by PCSO to the LESSOR

as compensation for the fulfillment of the obligations
of the LESSOR under this Contract, including, but
not limited to the Lease of the Facilities.

The LESSOR shall build, furnish and maintain at its own expense and
risk the Facilities for the On-Line Lottery System of PCSO in
the Territory on an exclusive basis. The LESSOR shall bear all
Maintenance and Other Costs as defined herein.

xxx xxx xxx

xxx xxx xxx

88

3. RENTAL FEE

5.4 PCSO shall have sole responsibility over the appointment

of dealers or retailers throughout the country. PCSO
shall appoint the dealers and retailers in a timely
manner with due regard to the implementation
timetable of the On-Line Lottery System. Nothing
herein
shall
preclude
the
LESSOR
from
recommending dealers or retailers for appointment
by PCSO, which shall act on said recommendation
within forty-eight (48) hours.

For and in consideration of the performance by the LESSOR of its

obligations herein, PCSO shall pay LESSOR a fixed Rental Fee
equal to four point nine percent (4.9%) of gross receipts from
ticket sales, payable net of taxes required by law to be withheld,
on a semi-monthly basis. Goodwill, franchise and similar fees
shall belong to PCSO.
4. LEASE PERIOD

5.5 PCSO shall designate the necessary personnel to monitor

and audit the daily performance of the On-Line
Lottery System. For this purpose, PCSO designees
shall be given, free of charge, suitable and adequate
space, furniture and fixtures, in all offices of the
LESSOR, including but not limited to its
headquarters, alternate site, regional and area
offices.

The period of the lease shall commence ninety (90) days from the date of
effectivity of this Contract and shall run for a period of eight (8)
years thereafter, unless sooner terminated in accordance with
this Contract.
5. RIGHTS AND OBLIGATIONS OF PCSO AS OPERATOR OF THE ONLINE LOTTERY SYSTEM

5.6 PCSO shall have the responsibility to resolve, and exclusive

jurisdiction over, all matters involving the operation of
the On-Line Lottery System not otherwise provided in
this Contract.

PCSO shall be the sole and individual operator of the On-Line Lottery
System. Consequently:
5.1 PCSO shall have sole responsibility to decide whether to
implement, fully or partially, the Master Games Plan
of the LESSOR. PCSO shall have the sole
responsibility to determine the time for introducing
new games to the market. The Master Games Plan
included in Annex "A" hereof is hereby approved by
PCSO.

5.7 PCSO shall promulgate procedural and coordinating rules

governing all activities relating to the On-Line Lottery
System.
5.8 PCSO will be responsible for the payment of prize monies,
commissions to agents and dealers, and taxes and
levies (if any) chargeable to the operator of the OnLine Lottery System. The LESSOR will bear all other
Maintenance and Other Costs, except as provided in
Section 1.4.

5.2 PCSO shall have control over revenues and receipts of

whatever nature from the On-Line Lottery System.
After paying the Rental Fee to the LESSOR, PCSO
shall have exclusive responsibility to determine the
Revenue Allocation Plan; Provided, that the same
shall be consistent with the requirement of R.A. No.
1169, as amended, which fixes a prize fund of fifty
five percent (55%) on the average.

5.9 PCSO shall assist the LESSOR in the following:

5.9.1 Work permits for the LESSOR's staff;
5.9.2 Approvals for importation of the Facilities;

5.3 PCSO shall have exclusive control over the printing of

tickets, including but not limited to the design, text,
and contents thereof.

5.9.3 Approvals and consents for the On-Line Lottery

System; and

89

5.9.4 Business and premises licenses for all officers

of the LESSOR and licenses for the
telecommunications network.

6.5 Keep all the Facilities in fail safe condition and, if

necessary, upgrade, replace and improve the
Facilities from time to time as new technology
develops, in order to make the On-Line Lottery
System more cost-effective and/or competitive, and
as may be required by PCSO. PCSO shall not
impose such requirements unreasonably nor
arbitrarily.

5.10 In the event that PCSO shall pre-terminate this Contract or

suspend the operation of the On-Line Lottery
System, in breach of this Contract and through no
fault of the LESSOR, PCSO shall promptly, and in
any event not later than sixty (60) days, reimburse
the LESSOR the amount of its total investment cost
associated with the On-Line Lottery System,
including but not limited to the cost of the Facilities,
and further compensate the LESSOR for loss of
expected net profit after tax, computed over the
unexpired term of the lease.

6.6 Provide PCSO with management terminals which will allow

real-time monitoring of the On-Line Lottery System.
6.7 Upon effectivity of this Contract, commence the training of
PCSO and other local personnel and the transfer of
technology and expertise, such that at the end of the
term of this Contract, PCSO will be able to effectively
take-over the Facilities and efficiently operate the OnLine Lottery System.

6. DUTIES AND RESPONSIBILITIES OF THE LESSOR

The LESSOR is one of not more than three (3) lessors of similar facilities
for the nationwide On-Line Lottery System of PCSO. It is
understood that the rights of the LESSOR are primarily those of
a lessor of the Facilities, and consequently, all rights involving
the business aspects of the use of the Facilities are within the
jurisdiction of PCSO. During the term of the lease, the LESSOR
shall:

6.8 Undertake a positive advertising and promotions campaign

for both institutional and product lines without
engaging in negative advertising against other
lessors.
6.9 Bear all expenses and risks relating to the Facilities
including, but not limited to, Maintenance and Other
Costs and;

6.1 Maintain and preserve its corporate existence, rights and

privileges, and conduct its business in an orderly,
efficient, and customary manner.

xxx xxx xxx

6.10 Bear all risks if the revenues from ticket sales, on an
annualized basis, are insufficient to pay the entire
prize money.

6.2 Maintain insurance coverage with insurers acceptable to

PCSO on all Facilities.

6.11 Be, and is hereby, authorized to collect and retain for its
own account, a security deposit from dealers and
retailers, in an amount determined with the approval
of PCSO, in respect of equipment supplied by the
LESSOR. PCSO's approval shall not be
unreasonably withheld . . .

6.3 Comply with all laws, statues, rules and regulations, orders
and directives, obligations and duties by which it is
legally bound.
6.4 Duly pay and discharge all taxes, assessments and
government charges now and hereafter imposed of
whatever nature that may be legally levied upon it.

6.12 Comply with procedural and coordinating rules issued by

PCSO.

90

7. REPRESENTATIONS AND WARRANTIES

Timetable in provinces where the LESSOR has not yet installed

terminals. Provided, that such provinces have existing nodes.
Once a municipality or city is serviced by land lines of a
licensed public telephone company, and such lines are
connected to Metro Manila, then the obligation of the LESSOR
to connect such municipality or city through a
telecommunications network shall cease with respect to such
municipality or city.

The LESSOR represents and warrants that:

7.1 The LESSOR is a corporation duly organized and existing
under the laws of the Republic of the Philippines, at
least sixty percent (60%) of the outstanding capital
stock of which is owned by Filipino shareholders. The
minimum required Filipino equity participation shall
not be impaired through voluntary or involuntary
transfer, disposition, or sale of shares of stock by the
present stockholders.

The voice facility will cover the four offices of the Office of the President,
National Disaster Control Coordinating Council, Philippine
National Police and the National Bureau of Investigation, and
each city and municipality in the Territory except Metro Manila,
and those cities and municipalities which have easy telephone
access from these four offices. Voices calls from the four offices
shall be transmitted via radio or VSAT to the remote
municipalities which will be connected to this voice facility
through wired network or by radio. The facility shall be
designed to handle four private conversations at any one time.

7.2 The LESSOR and its Affiliates have the full corporate and
legal power and authority to own and operate their
properties and to carry on their business in the place
where such properties are now or may be conducted.
..
7.3 The LESSOR has or has access to all the financing and
funding requirements to promptly and effectively
carry out the terms of this Contract. . .

xxx xxx xxx

13. STOCK DISPERSAL PLAN

7.4 The LESSOR has or has access to all the managerial and
technical expertise to promptly and effectively carry
out the terms of this Contract. . .

Within two (2) years from the effectivity of this Contract, the LESSOR
shall cause itself to be listed in the local stock exchange and
offer at least twenty five percent (25%) of its equity to the
public.

xxx xxx xxx

14. NON-COMPETITION

10. TELECOMMUNICATIONS NETWORK

The LESSOR shall not, directly or indirectly, undertake any activity or

business in competition with or adverse to the On-Line Lottery
System of PCSO unless it obtains the latter's prior written
consent thereto.

The LESSOR shall establish a telecommunications network that will

connect all municipalities and cities in the Territory in
accordance with, at the LESSOR's option, either of the
LESSOR's proposals (or a combinations of both such
proposals) attached hereto as Annex "B," and under the
following PCSO schedule:

15. HOLD HARMLESS CLAUSE

15.1 The LESSOR shall at all times protect and defend, at its
cost and expense, PCSO from and against any and
all liabilities and claims for damages and/or suits for
or by reason of any deaths of, or any injury or injuries
to any person or persons, or damages to property of

xxx xxx xxx

PCSO may, at its option, require the LESSOR to establish the
telecommunications network in accordance with the above

91

any kind whatsoever, caused by the LESSOR, its

subcontractors, its authorized agents or employees,
from any cause or causes whatsoever.

grossly negligent violation of the material terms and

conditions of this Contract, all unencumbered
Facilities shall automatically become the property of
PCSO without consideration and without need for
further notice or demand by PCSO. The Performance
Bond shall likewise be forfeited in favor of PCSO.

15.2 The LESSOR hereby covenants and agrees to indemnify

and hold PCSO harmless from all liabilities, charges,
expenses (including reasonable counsel fees) and
costs on account of or by reason of any such death
or deaths, injury or injuries, liabilities, claims, suits or
losses caused by the LESSOR's fault or negligence.

17.2 Should the LESSOR fail to comply with the terms of the
Timetables provided in Section 9 and 10, it shall be
subject to an initial Penalty of Twenty Thousand
Pesos (P20,000.00), per city or municipality per
every month of delay; Provided, that the Penalty shall
increase, every ninety (90) days, by the amount of
Twenty Thousand Pesos (P20,000.00) per city or
municipality per month, whilst shall failure to comply
persists. The penalty shall be deducted by PCSO
from the rental fee.

15.3 The LESSOR at all times protect and defend, at its own
cost and expense, its title to the facilities and PCSO's
interest therein from and against any and all claims
for the duration of the Contract until transfer to PCSO
of ownership of the serviceable Facilities.
16. SECURITY

xxx xxx xxx

16.1 To ensure faithful compliance by the LESSOR with the

terms of the Contract, the LESSOR shall secure a
Performance Bond from a reputable insurance
company or companies acceptable to PCSO.

20. OWNERSHIP OF THE FACILITIES

After expiration of the term of the lease as provided in Section 4, the
Facilities directly required for the On-Line Lottery System
mentioned in Section 1.3 shall automatically belong in full
ownership to PCSO without any further consideration other
than the Rental Fees already paid during the effectivity of the
lease.

16.2 The Performance Bond shall be in the initial amount of

Three Hundred Million Pesos (P300,000,000.00), to
its U.S. dollar equivalent, and shall be renewed to
cover the duration of the Contract. However, the
Performance Bond shall be reduced proportionately
to the percentage of unencumbered terminals
installed; Provided, that the Performance Bond shall
in no case be less than One Hundred Fifty Million
Pesos (P150,000,000.00).

21. TERMINATION OF THE LEASE

PCSO may terminate this Contract for any breach of the material
provisions of this Contract, including the following:

16.3 The LESSOR may at its option maintain its Escrow

Deposit as the Performance Bond. . .

21.1 The LESSOR is insolvent or bankrupt or unable to pay its

debts, stops or suspends or threatens to stop or
suspend payment of all or a material part of its debts,
or proposes or makes a general assignment or an
arrangement or compositions with or for the benefit
of its creditors; or

17. PENALTIES
17.1 Except as may be provided in Section 17.2, should the
LESSOR fail to take remedial measures within seven
(7) days, and rectify the breach within thirty (30)
days, from written notice by PCSO of any wilfull or

21.2 An order is made or an effective resolution passed for the

winding up or dissolution of the LESSOR or when it

92

cease or threatens to cease to carry on all or a

material part of its operations or business; or

a) Under Section 1 of the Charter of the PCSO, the

PCSO is prohibited from holding and conducting Lotteries 'in
collaboration, association or joint venture with any person,
association, company or entity';

21.3 Any material statement, representation or warranty made

or furnished by the LESSOR proved to be materially
false or misleading;

b) Under Act No. 3846 and established jurisprudence, a

Congressional franchise is required before any person may be
allowed to establish and operate said telecommunications system;

said termination to take effect upon receipt of written notice of

termination by the LESSOR and failure to take remedial action
within seven (7) days and cure or remedy the same within thirty
(30) days from notice.

c) Under Section 11, Article XII of the Constitution, a

less than 60% Filipino-owned and/or controlled corporation, like
the PGMC, is disqualified from operating a public service, like the
said telecommunications system; and

Any suspension, cancellation or termination of this Contract shall not

relieve the LESSOR of any liability that may have already
accrued hereunder."

d) Respondent PGMC is not authorized by its charter

and under the Foreign Investment Act (R.A. No. 7042) to install,
establish and operate the on-line Lotto and telecommunications
systems." 18

xxx xxx xxx

Considering the denial by the Office of the President of its protest and the statement of Assistant
Executive Secretary Renato Corona that "only a court injunction can stop Malacaang," and the
imminent implementation of the Contract of Lease in February 1994, KILOSBAYAN, with its copetitioners, filed on 28 January 1994 this petition.

Petitioners submit that the PCSO cannot validly enter into the assailed Contract of Lease with
the PGMC because it is an arrangement wherein the PCSO would hold and conduct the on-line
lottery system in "collaboration" or "association" with the PGMC, in violation of Section 1 (B)
of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and
conducting charity sweepstakes races, lotteries, and other similar activities "in collaboration,
association or joint venture with any person, association, company or entity, foreign or domestic."
Even granting arguendo that a lease of facilities is not within the contemplation of "collaboration"
or "association," an analysis, however, of the Contract of Lease clearly shows that there is a
"collaboration, association, or joint venture between respondents PCSO and PGMC in the
holding of the On-Line Lottery System," and that there are terms and conditions of the Contract
"showing that respondent PGMC is the actual lotto operator and not respondent PCSO." 19

In support of the petition, the petitioners claim that:

". . . THE OFFICE OF THE PRESIDENT, ACTING THROUGH
RESPONDENTS EXECUTIVE SECRETARY AND/OR ASSISTANT
EXECUTIVE SECRETARY FOR LEGAL AFFAIRS, AND THE PCSO
GRAVELY ABUSE[D] THEIR DISCRETION AND/OR FUNCTIONS
TANTAMOUNT TO LACK OF JURISDICTION AND/OR AUTHORITY IN
RESPECTIVELY: (A) APPROVING THE AWARD OF THE CONTRACT
TO, AND (B) ENTERING INTO THE SO-CALLED 'CONTRACT OF
LEASE' WITH, RESPONDENT PGMC FOR THE INSTALLATION,
ESTABLISHMENT AND OPERATION OF THE ON-LINE LOTTERY AND
TELECOMMUNICATION SYSTEMS REQUIRED AND/OR AUTHORIZED
UNDER THE SAID CONTRACT, CONSIDERING THAT:

The petitioners also point out that paragraph 10 of the Contract of Lease requires or authorizes
PGMC to establish a telecommunications network that will connect all the municipalities and
cities in the territory. However, PGMC cannot do that because it has no franchise from Congress
to construct, install, establish, or operate the network pursuant to Section 1 of Act No. 3846, as
amended. Moreover, PGMC is a 75% foreign-owned or controlled corporation and cannot,
therefore, be granted a franchise for that purpose because of Section 11, Article XII of the 1987
Constitution. Furthermore, since, "the subscribed foreign capital" of the PGMC "comes to about
75%, as shown by paragraph EIGHT of its Articles of Incorporation," it cannot lawfully enter into
the contract in question because all forms of gambling and lottery is one of them are
included in the so-called foreign investments negative list under the Foreign Investments
Act (R.A. No. 7042) where only up to 40% foreign capital is allowed. 20

93

Finally, the petitioners insist that the Articles of Incorporation of PGMC do not authorize it to
establish and operate an on-line lottery and telecommunications systems.21

public utility; moreover, PGMC's "establishment of a telecommunications system is not intended

to establish a telecommunications business," and it has been held that where the facilities are
operated "not for business purposes but for its own use," a legislative franchise is not required
before a certificate of public convenience can be granted. 24 Even granting arguendo that
PGMC is a public utility, pursuant to Albano s. Reyes, 25 "it can establish a telecommunications
system even without a legislative franchise because not every public utility is required to secure
a legislative franchise before it could establish, maintain, and operate the service"; and, in any
case, "PGMC's establishment of the telecommunications system stipulated in its contract of
lease with PCSO falls within the exceptions under Section 1 of Act No. 3846 where a legislative
franchise is not necessary for the establishment of radio stations."

Accordingly, the petitioners pray that we issue a temporary restraining order and a writ of
preliminary injunction commanding the respondents or any person acting in their places or upon
their instructions to cease and desist from implementing the challenged Contract of Lease and,
after hearing the merits of the petition, that we render judgment declaring the Contract of Lease
void and without effect and making the injunction permanent. 22
We required the respondents to comment on the petition.

They also argue that the contract does not violate the Foreign Investment Act of 1991; that the
Articles of Incorporation of PGMC authorize it to enter into the Contract of Lease; and that the
issues of "wisdom, morality and propriety of acts of the executive department are beyond the
ambit of judicial review."

In its Comment filed on 1 March 1994, private respondent PGMC asserts that "(1) [it] is merely
an independent contractor for a piece of work, (i.e., the building and maintenance of a lottery
system to be used by PCSO in the operation of its lottery franchise); and (2) as such
independent contractor, PGMC is not a co-operator of the lottery franchise with PCSO, nor is
PCSO sharing its franchise, 'in collaboration, association or joint venture' with PGMC as such
statutory limitation is viewed from the context, intent, and spirit of Republic Act 1169, as
amended by Batas Pambansa 42." It further claims that as an independent contractor for a piece
of work, it is neither engaged in "gambling" nor in "public service" relative to the
telecommunications network, which the petitioners even consider as an "indispensable
requirement" of an on-line lottery system. Finally, it states that the execution and implementation
of the contract does not violate the Constitution and the laws; that the issue on the "morality" of
the lottery franchise granted to the PCSO is political and not judicial or legal, which should be
ventilated in another forum; and that the "petitioners do not appear to have the legal standing or
real interest in the subject contract and in obtaining the reliefs sought." 23

Finally, the public respondents allege that the petitioners have no standing to maintain the
instant suit, citing our resolution in Valmonte vs. Philippine Charity Sweepstakes Office. 26
Several parties filed motions to intervene as petitioners in this case, 27 but only the motion of
Senators Alberto Romulo, Arturo Tolentino, Francisco Tatad, Gloria Macapagal-Arroyo, Vicente
Sotto III, John Osmena, Ramon Revilla, and Jose Lina 28 was granted, and the respondents
were required to comment on their petition in intervention, which the public respondents and
PGMC did.
In the meantime, the petitioners filed with the Securities and Exchange Commission on 29
March 1994 a petition against PGMC for the nullification of the latter's General Information
Sheets. That case, however, has no bearing in this petition.

In their Comment filed by the Office of the Solicitor General, public respondents Executive
Secretary Teofisto Guingona, Jr., Assistant Executive Secretary Renato Corona, and the PCSO
maintain that the contract of lease in question does not violate Section 1 of R.A. No. 1169, as
amended by B.P. Blg. 42, and that the petitioners' interpretation of the phrase "in collaboration,
association or joint venture" in Section 1 is "much too narrow, strained and utterly devoid of
logic" for it "ignores the reality that PCSO, as a corporate entity, is vested with the basic and
essential prerogative to enter into all kinds of transactions or contracts as may be necessary for
the attainment of its purposes and objectives." What the PCSO charter "seeks to prohibit is that
arrangement akin to a 'joint venture' or partnership where there is 'community of interest in the
business, sharing of profits and losses, and a mutual right of control,' a characteristic which does
not obtain in a contract of lease." With respect to the challenged Contract of Lease, the "role of
PGMC is limited to that of a lessor of the facilities" for the on-line lottery system; in "strict
technical and legal sense," said contract "can be categorized as a contract for a piece of work as
defined in Articles 1467, 1713 and 1644 of the Civil Code."

On 11 April 1994, we heard the parties in oral arguments. Thereafter, we resolved to consider
the matter submitted for resolution and pending resolution of the major issues in this case, to
issue a temporary restraining order commanding the respondents or any person acting in their
place or upon their instructions to cease and desist from implementing the challenged Contract
of Lease.
In the deliberation on this case on 26 April 1994, we resolved to consider only these issues: (a)
the locus standi of the petitioners, and (b) the legality and validity of the Contract of Lease in the
light of Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from
holding and conducting lotteries "in collaboration, association or joint venture with any person,
association, company or entity, whether domestic or foreign." On the first issue, seven Justices
voted to sustain the locus standi of the petitioners, while six voted not to. On the second issue,
the seven Justice were of the opinion that the Contract of Lease violates the exception to Section
1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid and contrary to law.

They further claim that the establishment of the telecommunications system stipulated in the
Contract of Lease does not require a congressional franchise because PGMC will not operate a

94

The six Justices stated that they wished to express no opinion thereon in view of their stand on
the first issue. The Chief Justice took no part because one of the Directors of the PCSO is his
brother-in-law.

prepared to take that step. Respondents, however, would hark back to the
American Supreme Court doctrine in Mellon v. Frothingham, with their
claim that what petitioners possess "is an interest which is shared in
common by other people and is comparatively so minute and
indeterminate as to afford any basis and assurance that the judicial
process can act on it." That is to speak in the language of a bygone era,
even in the United States. For as Chief Justice Warren clearly pointed out
in the later case of Flast v. Cohen, the barrier thus set up if not breached
has definitely been lowered."

This case was then assigned to this ponente for the writing of the opinion of the Court.
The preliminary issue on the locus standi of the petitioners should, indeed, be resolved in their
favor. A party's standing before this Court is a procedural technicality which it may, in the
exercise of its discretion, set aside in view of the importance of the issues raised. In the
landmark Emergency Powers Cases, 29 this Court brushed aside this technicality because "the
transcendental importance to the public of these cases demands that they be settled promptly
and definitely, brushing aside, if we must, technicalities of procedure. (Avelino vs. Cuenco, G.R.
No. L-2821)." Insofar as taxpayers' suits are concerned, this Court had declared that it "is not
devoid of discretion as to whether or not it should be entertained," 30 or that it "enjoys an open
discretion to entertain the same or not." 31 In De La Llana vs. Alba, 32 this Court declared:

In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan, 33 reiterated

in Basco vs. Philippine Amusements and Gaming Corporation, 34 this Court stated:
"Objections to taxpayers' suits for lack of sufficient personality standing or
interest are, however, in the main procedural matters. Considering the
importance to the public of the cases at bar, and in keeping with the
Court's duty, under the 1987 Constitution, to determine whether or not the
other branches of government have kept themselves within the limits of
the Constitution and the laws and that they have not abused the
discretion given to them, this Court has brushed aside technicalities of
procedure and has taken cognizance of these petitions."

"1. The argument as to the lack of standing of petitioners is easily

resolved. As far as Judge de la Llana is concerned, he certainly falls
within the principle set forth in Justice Laurel's opinion in People vs. Vera
[65 Phil. 56 (1937)]. Thus: 'The unchallenged rule is that the person who
impugns the validity of a statute must have a personal and substantial
interest in the case such that he has sustained, or will sustain, direct
injury as a result of its enforcement [Ibid, 89].' The other petitioners as
members of the bar and officers of the court cannot be considered as
devoid of 'any personal and substantial interest' on the matter. There is
relevance to this excerpt form a separate opinion in Aquino, Jr. v.
Commission on Elections [L-40004, January 31, 1975, 62 SCRA 275]:
'Then there is the attack on the standing of petitioners, as vindicating at
most what they consider a public right and not protecting their rights as
individuals. This is to conjure the specter of the public right dogma as an
inhibition to parties intent on keeping public officials staying on the path of
constitutionalism. As was so well put by Jaffe: "The protection of private
rights is an essential constituent of public interest and, conversely, without
a well-ordered state there could be no enforcement of private rights.
Private and public interests are, both in a substantive and procedural
sense, aspects of the totality of the legal order." Moreover, petitioners
have convincingly shown that in their capacity as taxpayers, their standing
to sue has been amply demonstrated. There would be a retreat from the
liberal approach followed in Pascual v. Secretary of Public Works,
foreshadowed by the very decision of People v. Vera where the doctrine
was first fully discussed, if we act differently now. I do not think we are

and in Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian
Reform, 35 it declared:
"With particular regard to the requirement of proper party as applied in
the cases before us, we hold that the same is satisfied by the petitioners
and intervenors because each of them has sustained or is in danger of
sustaining an immediate injury as a result of the acts or measures
complained of. [Ex Parte Levitt, 303 US 633].And even if, strictly
speaking, they are not covered by the definition, it is still within the wide
discretion of the Court to waive the requirement and so remove the
impediment to its addressing and resolving the serious constitutional
questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers
were allowed to question the constitutionality of several executive orders
issued by President Quirino although they were invoking only an indirect
and general interest shared in common with the public. The Court
dismissed the objective that they were not proper parties and ruled that
the transcendental importance to the public of these cases demands that
they be settled promptly and definitely, brushing aside, if we must,

95

technicalities of procedure. We have since then applied this exception in

many other cases." (Emphasis supplied)

bidding for the sale of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo,
Japan; 46 (d) the approval without hearing by the Board of Investments of the amended
application of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan
to Batangas and the validity of such transfer and the shift of feedstock from naphtha only to
naphtha and/or liquefied petroleum gas; 47 (e) the decisions, orders, rulings, and resolutions of
the Executive Secretary, Secretary of Finance, Commissioner of Internal Revenue,
Commissioner of Customs, and the Fiscal Incentives Review Board exempting the National
Power Corporation from indirect tax and duties; 48 (f) the orders of the Energy Regulatory Board
of 5 and 6 December 1990 on the ground that the hearings conducted on the second provisional
increase in oil prices did not allow the petitioner substantial cross-examination; 49 (g) Executive
Order No. 478 which levied a special duty of P0.95 per liter or P151.05 per barrel of imported
crude oil and P1.00 per liter of imported oil products; 50 (h) resolutions of the Commission on
Elections concerning the apportionment, by district, of the number of elective members
of Sanggunians; 51 and (i) memorandum orders issued by a Mayor affecting the Chief of Police
of Pasay City. 52

In Daza vs. Singson, 36 this Court once more said:

". . . For another, we have early as in the Emergency Powers Cases that
where serious constitutional questions are involved, 'the transcendental
importance to the public of these cases demands that they be settled
promptly and definitely, brushing aside, if we must, technicalities of
procedure.' The same policy has since then been consistently followed by
the Court, as in Gonzales vs. Commission on Elections [21 SCRA 774] . .
. ."
The Federal Supreme Court of the United States of America has also expressed its discretionary
power to liberalize the rule on locus standi. In United States vs. Federal Power
Commission and Virginia Rea Association vs. Federal Power Commission, 37 it held:

In the 1975 case of Aquino vs. Commission on Elections, 53 this Court, despite its unequivocal
ruling that the petitioners therein had no personality to file the petition, resolved nevertheless to
pass upon the issues raised because of the far-reaching implications of the petition. We did no
less in De Guia vs. COMELEC 54 where, although we declared that De Guia "does not appear
to have locus standi, a standing in law, a personal or substantial interest," we brushed aside the
procedural infirmity "considering the importance of the issue involved, concerning as it does the
political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse
of discretion and violation of the Constitution by respondent."

"We hold that petitioners have standing. Differences of view, however,

preclude a single opinion of the Court as to both petitioners. It would not
further clarification of this complicated specialty of federal jurisdiction, the
solution of whose problems is in any event more or less determined by
the specific circumstances of individual situations, to set out the divergent
grounds in support of standing in these cases."
In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of
Congress, and even association of planters, and non-profit civic organizations were allowed to
initiate and prosecute actions before this Court to question the constitutionality or validity of laws,
acts, decisions, rulings, or orders of various government agencies or instrumentalities. Among
such cases were those assailing the constitutionality of (a) R.A. No. 3836 insofar as it allows
retirement gratuity and commutation of vacation and sick leave to Senators and Representatives
and to elective officials of both Houses of Congress; 38 (b) Executive Order No. 284, issued by
President Corazon C. Aquino on 25 July 1987, which allowed members of the cabinet, their
undersecretaries, and assistant secretaries to hold other government offices or positions; 39 (c)
the automatic appropriation for debt service in the General Appropriations Act; 40 (d) R.A. No.
7056 on the holding of desynchronized elections; 41 (e)P.D. No. 1869 (the charter of the
Philippine Amusement and Gaming Corporation) on the ground that it is contrary to morals,
public policy, and order; 42 and (f) R.A. No. 6975, establishing the Philippine National Police. 43

We find the instant petition to be of transcendental importance to the public. The issues it raised
are of paramount public interest and of a category even higher than those involved in many of
the aforecited cases. The ramifications of such issues immeasurably affect the social, economic,
and moral well-being of the people even in the remotest barangays of the country and the
counter-productive and retrogressive effects of the envisioned on-line lottery system are as
staggering as the billions in pesos it is expected to raise. The legal standing then of the
petitioners deserves recognition and, in the exercise of its sound discretion, this Court hereby
brushes aside the procedural barrier which the respondents tried to take advantage of.
And now on the substantive issue.
Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, prohibits the PCSO from holding and
conducting lotteries "in collaboration, association or joint venture with any person, association,
company or entity, whether domestic or foreign." Section 1 provides:

Other cases where we have followed a liberal policy regarding locus standi include those
attacking the validity or legality of (a) an order allowing the importation of rice in the light of the
prohibition imposed by R.A. No. 3452; 44 (b) P.D. Nos. 991 and 1033 insofar as they proposed
amendments to the Constitution and P.D. No. 1031insofar as it directed the COMELEC to
supervise, control, hold, and conduct the referendum-plebiscite on 16 October 1976; 45 (c) the

"Sec. 1. The Philippine Charity Sweepstakes Office. The Philippine

Charity Sweepstakes Office, hereinafter designated the Office, shall be
the principal government agency for raising and providing for funds for

96

health programs, medical assistance and services and charities of

national character, and as such shall have the general powers conferred
in section thirteen of Act Numbered One thousand four hundred fifty-nine,
as amended, and shall have the authority:

domestic or foreign, for the main purpose of raising funds for health and
medical assistance and services and charitable grants." 55
During the period of committee amendments, the Committee on Socio-Economic Planning and
Development, through Assemblyman Ronaldo B. Zamora, introduced an amendment by
substitution to the said paragraph B such that, as amended, it should read as follows:

A. To hold and conduct charity sweepstakes races, lotteries

and other similar activities, in such frequency and
manner, as shall be determined, and subject to such
rules and regulations as shall be promulgated by the
Board of Directors.

"Subject to the approval of the Minister of Human Settlements, to engage

in health-oriented investments, programs, projects and activities which
may be profit-oriented, by itself or in collaboration, association, or joint
venture with any person, association, company or entity, whether
domestic or foreign, for the purpose of providing for permanent and
continuing sources of funds for health programs, including the expansion
of existing ones, medical assistance and services and/or charitable
grants." 56

B. Subject to the approval of the Minister of Human

Settlements, to engage in health and welfare-related
investments, programs, projects and activitieswhich
may be profit-oriented, by itself or in collaboration,
association or joint venture with any person,
association, company or entity, whether domestic or
foreign, except for the activities mentioned in the
preceding paragraph (A), for the purpose of providing
for permanent and continuing sources of funds for
health programs, including the expansion of existing
ones, medical assistance and services, and/or
charitable grants: Provided, That such investments
will not compete with the private sector in areas
where investments are adequate as may be
determined by the National Economic and
Development Authority." (emphasis supplied)

Before the motion of Assemblyman Zamora for the approval of the amendment could be acted
upon, Assemblyman Davide introduced an amendment to the amendment:
"MR. DAVIDE.
Mr. Speaker.
THE SPEAKER.
The gentleman from Cebu is recognized.

The language of the section is indisputably clear that with respect to its franchise or privilege "to
hold and conduct charity sweepstakes races, lotteries and other similar activities," the
PCSO cannot exercise it "in collaboration, association, or joint venture" with any other party. This
is the unequivocal meaning and import of the phrase "except for the activities mentioned in the
preceding paragraph (A)," namely, "charity sweepstakes races, lotteries and other similar
activities."

MR. DAVIDE.

B.P. Blg. 42 originated from Parliamentary Bill No. 622, which was covered by Committee Report
No. 103 as reported out by the Committee on Socio-Economic Planning and Development of the
Interim Batasang Pambansa. The original text of paragraph B, Section 1 of Parliamentary Bill
No. 622 reads as follows:

When it is a joint venture or in collaboration with any entity such

collaboration or joint venture must not include activity letter (a)
which is the holding and conducting of sweepstakes races,
lotteries and other similar acts.

May I introduce an amendment to the committee amendment? The

amendment would be to insert after 'foreign' in the amendment
just read the following: EXCEPT FOR THE ACTIVITY IN
LETTER (A) ABOVE.

"To engage in any and all investments and related profit-oriented projects
or programs and activities by itself or in collaboration, association or joint
venture with any person, association, company or entity, whether

MR. ZAMORA.
We accept the amendment, Mr. Speaker.

97

MR. DAVIDE.

Does the challenged Contract of Lease violate or contravene the exception in Section 1 of R.A.
No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting
lotteries "in collaboration, association or joint venture with" another?

Thank you, Mr. Speaker.

We agree with the petitioners that it does, notwithstanding its denomination or designation as
a Contract of Lease. We are neither convinced nor moved or fazed by the insistence and forceful
arguments of the PGMC that it does not because in reality it is only an independent contractor
for a piece of work, i.e., the building and maintenance of a lottery system to be used by the
PCSO in the operation of its lottery franchise. Whether the contract in question is one of lease or
whether the PGMC is merely an independent contractor should not be decided on the basis of
the title or designation of the contract but by the intent of the parties, which may be gathered
from the provisions of the contract itself. Animus hominis est anima scripti. The intention of the
party is the soul of the instrument. In order to give life or effect to an instrument, it is essential to
look to the intention of the individual who executed it. 62 And, pursuant to Article 1371 of the
Civil Code, "to determine the intention of the contracting parties, their contemporaneous and
subsequent acts shall be principally considered." To put it more bluntly, no one should be
deceived by the title or designation of a contract.

THE SPEAKER.
Is there any objection to the amendment? (Silence) The amendment, as
amended, is approved." 57
Further amendments to paragraph B were introduced and approved. When Assemblyman
Zamora read the final text of paragraph B as further amended, the earlier approved amendment
of Assemblyman Davide became "EXCEPT FOR THE ACTIVITIES MENTIONED IN
PARAGRAPH (A)"; and by virtue of the amendment introduced by Assemblyman Emmanuel
Pelaez, the word PRECEDING was inserted before PARAGRAPH. Assemblyman Pelaez
introduced other amendments. Thereafter, the new paragraph B was approved. 58 This is now
paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42.
No interpretation of the said provisions to relax or circumvent the prohibition can be allowed
since the privilege to hold or conduct charity sweepstakes races, lotteries, or other similar
activities is a franchise granted by the legislature to the PCSO. It is a settled rule that "in all
grants by the government to individuals or corporations of rights, privileges and franchises, the
words are to be taken most strongly against the grantee . . . . [o]ne who claims a franchise or
privilege in derogation of the common rights of the public must prove his title thereto by a grant
which is clearly and definitely expressed, and he cannot enlarge it by equivocal or doubtful
provisions or by probable inferences. Whatever is not unequivocably granted is withheld. Nothing
passes by mere implication." 59

A careful analysis and evaluation of the provisions of the contract and a consideration of the
contemporaneous acts of the PCSO and PGMC indubitably disclose that the contract is not in
reality a contract of lease under which the PGMC is merely an independent contractor for a
piece of work, but one where the statutorily proscribedcollaboration or association, in the least,
or joint venture, at the most, exists between the contracting parties. Collaboration is defined as
the acts of working together in a joint project. 63 Association means the act of a number of
persons in uniting together for some special purpose or business. 64 Joint venture is defined as
an association of persons or companies jointly undertaking some commercial enterprise;
generally all contribute assets and share risks. It requires a community of interest in the
performance of the subject matter, a right to direct and govern the policy in connection therewith,
and duty, which may be altered by agreement to share both in profit and losses. 65

In short then, by the exception explicitly made in paragraph B, Section 1 of this charter, the
PCSO cannot share its franchise with another by way of collaboration, association or joint
venture. Neither can it assign, transfer, or lease such franchise. It has been said that "the rights
and privileges conferred under a franchise may, without doubt, be assigned or transferred when
the grant is to the grantee and assigns, or is authorized by statute. On the other hand, the right
of transfer or assignment may be restricted by statute or the constitution, or be made subject to
the approval of the grantor or a governmental agency, such as a public utilities commission,
except that an existing right of assignment cannot be impaired by subsequent legislation." 60

The contemporaneous acts of the PCSO and the PGMC reveal that the PCSO had neither funds
of its own nor the expertise to operate and manage an on-line lottery system, and that although it
wished to have the system, it would have it "at no expense or risks to the government." Because
of these serious constraints and unwillingness to bear expenses and assume risks, the PCSO
was candid enough to state in its RFP that it is seeking for "a suitable contractor which shall
build, at its own expense, all the facilities needed to operate and maintain" the system;
exclusively bear "all capital, operating expenses and expansion expenses and risks"; and submit
"a comprehensive nationwide lottery development plan . . . which will include the game, the
marketing of the games, and the logistics to introduce the game to all the cities and
municipalities of the country within five (5) years"; and that the operation of the on-line lottery
system should be "at no expense or risk to the government" meaning itself , since it is a
government-owned and controlled agency. The facilities referred to means "all capital
equipment, computers, terminals, software, nationwide telecommunications network, ticket sales
offices, furnishings and fixtures, printing costs, costs of salaries and wages, advertising and

It may also be pointed out that the franchise granted to the PCSO to hold and conduct lotteries
allows it to hold and conduct a species of gambling. It is settled that "a statute which authorizes
the carrying on of a gambling activity or business should be strictly construed and every
reasonable doubt so resolved as to limit the powers and rights claimed under its authority." 61

98

promotions expenses, maintenance costs, expansion and replacement costs, security and
insurance, and all other related expenses needed to operate a nationwide on-line lottery
system."

necessary, upgrade, replace, and improve them from time to time as new technology develops to
make the on-line lottery system more cost-effective and competitive; exclusively bear all costs
and expenses relating to the printing, manpower, salaries and wages, advertising and promotion,
maintenance, expansion and replacement, security and insurance, and all other related
expenses needed to operate the on-line lottery system; undertake a positive advertising and
promotions campaign for both institutional and product lines without engaging in negative
advertising against other lessors; bear the salaries and related costs of skilled and qualified
personnel for administrative and technical operations; comply with procedural and coordinating
rules issued by the PCSO; and to train PCSO and other local personnel and to effect the transfer
of technology and other expertise, such that at the end of the term of the contract, the PCSO will
be able to effectively take over the Facilities and efficiently operate the on-line lottery system.
The latter simply means that, indeed, the managers, technicians or employees who shall operate
the on-line lottery system are not managers, technicians or employees of the PCSO, but of the
PGMC and that it is only after the expiration of the contract that the PCSO will operate the
system. After eight years, the PCSO would automatically become the owner of the Facilities
without any other further consideration.

In short, the only contribution the PCSO would have is its franchise or authority to operate the
on-line lottery system; with the rest, including the risks of the business, being borne by the
proponent or bidder. It could be for this reason that it warned that "the proponent must be able to
stand to the acid test of proving that it is an entity able to take on the role of responsible
maintainer of the on-line lottery systems." The PCSO however, makes it clear in its RFP that the
proponent can propose a period of the contract which shall not exceed fifteen years, during
which time it is assured of a "rental" which shall not exceed 12% of gross receipts. As admitted
by the PGMC, upon learning of the PCSO's decision, the Berjaya Group Berhad, with its
affiliates, wanted to offer its services and resources to the PCSO. Forthwith, it organized the
PGMC as "a medium through which the technical and management services required for the
project would be offered and delivered to PCSO." 66

For these reasons, too, the PGMC has the initial prerogative to prepare the detailed plan of all
games and the marketing thereof, and determine the number of players, value of winnings, and
the logistics required to introduce the games, including the Master Games Plan. Of course, the
PCSO has the reserved authority to disapprove them. 68 And, while the PCSO has the sole
responsibility over the appointment of dealers and retailers throughout the country, the PGMC
may, nevertheless, recommend for appointment dealers and retailers which shall be acted upon
by the PCSO within forty-eight hours and collect and retain, for its own account, security deposit
from dealers and retailers in respect of equipment supplied by it. This joint venture is further
established by the following:

Undoubtedly, then, the Berjaya Group Berhad knew all along that in connection with an on-line
lottery system, the PCSO had nothing but its franchise, which it solemnly guaranteed it had in
the General Information of the RFP. 67 Howsoever viewed then, from the very inception, the
PCSO and the PGMC mutually understood that any arrangement between them would
necessarily leave to the PGMC the technical, operatrions, and management aspects of the online lottery system while the PCSO would, primarily, provide the franchise. The
words Gaming and Management in the corporate name of respondent Philippine Gaming
Management Corporation could not have been conceived just for euphemistic purposes. Of
course, the RFP cannot substitute for the Contract of Lease which was subsequently executed
by the PCSO and the PGMC. Nevertheless, the Contract of Lease incorporates their intention
and understanding.

(a) Rent is defined in the lease contract as the amount to be paid to the
PGMC as compensation for the fulfillment of its obligations under the
contract, including but not limited to the lease of the Facilities. However,
this rent is not actually a fixed amount. Although it is stated to be 4.9% of
gross receipts from ticket sales, payable net of taxes required by law to be
withheld, it may be drastically reduced or, in extreme cases, nothing may
be due or demandable at all because the PGMC binds itself to "bear all
risks if the revenue from the ticket sales, on an annualized basis, are
insufficient to pay the entire prize money." This risk-bearing provision is
unusual in a lessor-lessee relationship, but inherent in a joint venture.

The so-called Contract of Lease is not, therefore, what it purports to be. Its denomination as
such is a crafty device, carefully conceived, to provide a built-in defense in the event that the
agreement is questioned as violative of the exception in Section 1 (B) of the PCSO's charter. The
acuity or skill of its draftsmen to accomplish that purpose easily manifests itself in the Contract of
Lease. It is outstanding for its careful and meticulous drafting designed to give an immediate
impression that it is a contract of lease. Yet, woven therein are provisions which negate its title
and betray the true intention of the parties to be in or to have a joint venture for a period of eight
years in the operation and maintenance of the on-line lottery system.

(b) In the event of pre-termination of the contract by the PCSO, or its

suspension of operation of the on-line lottery system in breach of the
contract and through no fault of the PGMC, the PCSO binds itself "to
promptly, and in any event not later than sixty (60) days, reimburse the
LESSOR the amount of its total investment cost associated with the OnLine Lottery System, including but not limited to the cost of the Facilities,

Consistent with the above observations on the RFP, the PCSO has only its franchise to offer,
while the PGMC represents and warrants that it has access to all managerial and technical
expertise to promptly and effectively carry out the terms of the contract. And, for a period of eight
years, the PGMC is under obligation to keep all theFacilities in the safe condition and if

99

and further compensate the LESSOR for loss of expected net profit after
tax, computed over the unexpired term of the lease." If the contract were
indeed one of lease, the payment of the expected profits or rentals for the
unexpired portion of the term of the contract would be enough.

growth of the on-line lottery, and above all, in its profits, with each having a right in the
formulation and implementation of policies related to the business and sharing, as well, in
the losses with the PGMC bearing the greatest burden because of its assumption of
expenses and risks, and the PCSO the least, because of its confessed unwillingness to
bear expenses and risks. In a manner of speaking, each is wed to the other for better or for
worse. In the final analysis, however, in the light of the PCSO's RFP and the above
highlighted provisions, as well as the "Hold Harmless Clause" of the Contract of Lease, it is
even safe to conclude that the actual lessor in this case is the PCSO and the subject matter
thereof is its franchise to hold and conduct lotteries since it is, in reality, the PGMC which
operates and manages the on-line lottery system for a period of eight years.

(c) The PGMC cannot "directly or indirectly undertake any activity or

business in competition with or adverse to the On-Line Lottery System of
PCSO unless it obtains the latter's prior written consent." If the PGMC is
engaged in the business of leasing equipment and technology for an online lottery system, we fail to see any acceptable reason why it should
allow a restriction on the pursuit of such business.

We thus declare that the challenged Contract of Lease violates the exception provided for in
paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid
for being contrary to law. This conclusion renders unnecessary further discussion on the other
issues raised by the petitioners.

(d) The PGMC shall provide the PCSO the audited Annual Report sent to
its stockholders, and within two years from the effectivity of the contract,
cause itself to be listed in the local stock exchange and offer at least 25%
of its equity to the public. If the PGMC is merely a lessor, this imposition
is unreasonable and whimsical, and could only be tied up to the fact that
the PGMC will actually operate and manage the system; hence,
increasing public participation in the corporation would enhance public
interest.

WHEREFORE, the instant petition is hereby GRANTED and the challenged Contract of Lease
executed on 17 December 1993 by respondent Philippine Charity Sweepstakes Office (PCSO)
and respondent Philippine Gaming Management Corporation (PGMC) is hereby DECLARED
contrary to law and invalid.

(e) The PGMC shall put an Escrow Deposit of P300,000,000.00 pursuant

to the requirements of the RFP, which it may, at its option, maintain as its
initial performance bond required to ensure its faithful compliance with the
terms of the contract.

The Temporary Restraining Order issued on 11 April 1994 is hereby MADE PERMANENT.
EN BANC
[G.R. No. 112399. July 14, 1995.]

(f) The PCSO shall designate the necessary personnel to monitor and
audit the daily performance of the on-line lottery system; and
promulgate procedural and coordinating rules governing all activities
relating to the on-line lottery system. The first further confirms that it is the
PGMC which will operate the system and the PCSO may, for the
protection of its interest, monitor and audit the daily performance of the
system. The second admits the coordinating and cooperative powers and
function of the parties.

REPRESENTATIVE
AMADO
S.
BAGATSING, petitioner, vs. COMMITTEE
ON
PRIVATIZATION,
PHILIPPINE NATIONAL OIL COMPANY and THE HONORABLE
EXECUTIVE SECRETARY, respondents.
[G.R. No. 115994. July 14, 1995.]
NEPTALI A. GONZALES, ERNESTO A. MACEDA, JOHN H. OSMEA,
WIGBERTO E. TAADA, JOKER O. ARROYO, AMADO D.
BAGATSING, and RENE A. V. SAGUISAG, petitioners, vs. DELFIN
LAZARO, in his capacity as Chairman of the Philippine National Oil
Company, MONICO JACOB, in his capacity as President of PNOC,
COMMITTEE ON PRIVATIZATION, PHILIPPINE NATIONAL OIL
COMPANY, PETRON CORPORATION, and ARAMCO OVERSEAS
COMPANY B.V., respondents.

(g) The PCSO may validly terminate the contract if the PGMC becomes
insolvent or bankrupt or is unable to pay its debts, or if it stops or
suspends or threatens to stop or suspend payment of all or a material
part of its debts.
All of the foregoing unmistakably confirm indispensable role of the PGMC in the pursuit,
operation, conduct, and management of the On-Line Lottery System. They exhibit and
demonstrate the parties' indivisible community of interest in the conception, birth and

100

Ruperto J . Bustamante III for petitioner in G.R. No. 112399.

4. POLITICAL LAW; DECISION OF THE PHILIPPINE NATIONAL OIL COMPANY TO

PRIVATIZE PETRON, A POLITICAL QUESTION; BEYOND REVIEW BY COURTS. The
decision of PNOC to privatize PETRON and the approval of the COP of such privatization, being
made in accordance with Proclamation No. 50, cannot be reviewed by this Court. Such acts are
exercises of the executive function as to which the Court will not pass judgment upon or inquire
into their wisdom (Llamas v. Orbos, 202, SCRA 844 [1991]).

Gonzales Batiller Bilog & Associates for petitioners in G.R. No. 115994.
Villamor Legarda & Associates for supplemental petitioners in G.R. No. 115994.
The Solicitor General for public respondent.

5. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE NATIONAL OIL COMPANY;

WITH CORPORATE POWERS TO DISPOSE ALL OR A PORTION OF ITS SHARES. PNOC,
in privatizing PETRON, was simply exercising its corporate power to dispose of all or a portion of
its shares in a subsidiary. PNOC was created under P.D. No. 334, as amended by P.D. No. 927,
which empowers it to acquire shares of the capital stock of any other corporation and to dispose
of the same shares.

Filemon L. Fernandez for private respondent Petron Corporation.

Sycip Salazar Hernandez & Gatmaitan for private respondent Aramco
Overseas Co., B.V.

6. ID.; ID.; ID.; ID. The privatization of PETRON could well be undertaken under laws other
than Proclamation No. 50. Of significance is Section 2(c) of R.A. No. 7181, which provides that:
"Privatization of government assets classified as a strategic industry by the National Economic
and Development Authority shall first be approved by the President of the Philippines." Section
6, the repealing clause of R.A. No. 7181, expressly repealed Sections 3 and 10 of Proclamation
No. 50 and all other laws, orders and rules and regulations which are inconsistent therewith. The
only requirement under R.A. No. 7181 in order to privatize a strategic industry like PETRON is
the approval of the President. In the case of PETRON's privatization, the President gave his
approval not only once but twice. PETRON's privatization is also in line with and is part of the
Philippine Energy Program under R.A. No. 7368. Section 5(b) of the law provides that the
Philippine Energy Program shall include a policy direction towards the privatization of
government agencies related to energy. Under P.D. No. 334, the law creating PNOC, said
corporation is granted the authority "[t]o establish and maintain offices, branches, agencies,
subsidiaries, correspondents or other units anywhere as may be needed by the Company and
reorganize or abolish the same as it may deem proper."

SYLLABUS
1. REMEDIAL LAW; ACTIONS; PARTIES; MEMBERS OF CONGRESS, WITH LEGAL
STANDING TO QUESTION ACTS OF THE EXECUTIVE WHICH VIOLATED THEIR RIGHTS
OR THAT WHICH INTRUDED INTO THE DOMAIN OF THE LEGISLATURE. In Philippine
Constitution Association v. Hon. Salvador Enriquez, G. R. No. 113105, August 19, 1994, we held
that members of Congress have the legal standing to question the validity of acts of the
Executive which injures them in their person or the institution of Congress to which they belong.
In the latter case, the acts cause derivative but nonetheless substantial injury which can be
questioned by members of Congress (Kennedy v. James, 412 F. Supp. 353 [1976]). In the
absence of a claim that the contract in question violated the rights of petitioners or impermissibly
intruded into the domain of the Legislature, petitioners have no legal standing to institute the
instant action in their capacity as members of Congress.
2. ID.; ID.; ID.; TAXPAYERS MAY QUESTION CONTRACTS ENTERED INTO BY THE
NATIONAL GOVERNMENT OR GOVERNMENT-OWNED OR CONTROLLED CORPORATION
ALLEGED TO BE IN CONTRAVENTION OF LAW. Petitioners can bring the action in their
capacity as taxpayers under the doctrine laid down in Kilosbayan, Inc. v. Guingona, 232 SCRA
110 (1994). Under said ruling, taxpayers may question contracts entered into by the national
government or government-owned or controlled corporations alleged to be in contravention of
the law. As long as the ruling in Kilosbayan on locus standi is not reversed, we have no choice
but to follow it and uphold the legal standing of petitioners as taxpayers to institute the present
action.

7. CONSTITUTIONAL LAW; COMMISSION ON AUDIT; CIRCULAR NO. 89-296; PUBLIC

BIDDING; FAILURE OF BIDDING; REQUISITES. On the claim that there was a failed
bidding, petitioners contend that there were only three bidders. One of them, PETRONAS,
submitted a bid lower than the floor price while a second, failed to pre-qualify. Citing Section v-2a of COA Circular No. 89-296 dated January 27, 1989, they argue that where only one bidder
qualifies, there is a failure of public auction (G. R. No. 115994, Rollo, p. 22). When a failure of
bidding takes place is defined in Circular No. 89-296 of the Commission on Audit, which
prescribes the "Audit Guidelines on the Divestment or Disposal of Property and other Assets of
the National Government Agencies and Instrumentalities, Local Government Units and
Government-Owned or Controlled Corporations and their Subsidiaries." Under said COA
Circular, there is a failure of bidding when: 1) there is only one offeror; or (2) when all the offers
are non-complying or unacceptable.

3. CONSTITUTIONAL LAW; PRESIDENT; PROCLAMATION NO. 50; SALE OF GOVERNMENT

ASSETS, NOT LIMITED TO NON-PERFORMING ASSETS. WhileProclamation No.
50 mandates that non-performing assets should promptly be sold, it does not prohibit the
disposal of the other kinds of assets, whether performing, necessary or appropriate.

101

8. ID.; ID.; ID.; ID.; BIDDER INCLUDES ALL THOSE ACCEPTED AND DISQUALIFIED. In
the case at bench, there were three offerors: SAUDI ARAMCO, PETRONAS and WESTMONT.
While two offerors were disqualified, PETRONAS for submitting a bid below the floor price and
WESTMONT for technical reasons, not all the offerors were disqualified. To constitute a failed
bidding under the COA Circular, all the offerors must be disqualified. Petitioners urge that in
effect there was only one bidder and that it can not be said that there was a competition on "an
equal footing" (G.R. No. 112399, Rollo, p. 122). But the COA Circular does not speak of
accepted bids but of offerors, without distinction as to whether they were disqualified.

accorded great respect by the Court (Nestle Philippines, Inc. v. Court of Appeals, 203 SCRA 504
[1991]).

12. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE NATIONAL OIL

COMPANY; PRIVATIZATION OF PETRON; DISPOSITION OF SHARES; SMALL INVESTORS
GIVEN RIGHT OF FIRST REFUSAL; SUBSTANTIAL COMPLIANCE IN CASE AT BAR. What
Congress clearly mandated in R.A. No. 7181 was that at least 10% of the shares of a privatized
corporation must be reserved and offered for sale to the general public. In the deliberation of the
Congressional Committee on Government-Owned and Controlled Corporations on December
18, 1991, the Committee spoke of having the 10% set aside without impeding the privatization
process. Note that when the bidding of the 40% block of Petron shares had been announced,
the 10% block for offering to the small local investors had been identified, reserved and set
aside. This is more than a substantial compliance with the mandate of law.

9. STATUTORY CONSTRUCTION; INTERPRETATION OF AN AGENCY OF ITS OWN RULES,

GIVEN MORE WEIGHT THAN THAT GIVEN BY AGENCY TASKED TO ADMINISTER IT. The
COA itself, the agency that adopted the rules on bidding procedure to be followed by government
offices and corporations, had upheld the validity and legality of the questioned bidding. The
interpretation of an agency of its own rules should be given more weight than the interpretation
by that agency of the law it is merely tasked to administer.
10. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE NATIONAL OIL
COMPANY; PRIVATIZATION OF PETRON; DISPOSITION OF SHARES; SMALL INVESTORS
GIVEN RIGHT OF FIRST REFUSAL; SALE OF 10% BLOCK OF SHARE NOT A
PREREQUISITE BEFORE SALE TO STRATEGIC PARTNERS. According to petitioners, the
law mandates the offer for sale of 10% of the Petron shares to small investors before a sale of
the 40% block of shares to ARAMCO can be made. Petitioners also invoke the Implementing
Guidelines promulgated to implement R.A. No. 7181. We agree with PETRON that the language
of Section 2(d) of R.A. No. 7181 does not mandate any sequencing for the disposition of shares
in a government-owned corporation being privatized. It is the unfortunate use of the word "first"
in Section 2(d) of R.A. No 7181 that threw petitioners off track and caused them to misread the
provision as one requiring a mandatory sequencing of the sale. As a wit once said, if a centipede
would be compelled to follow a prescribed sequencing of its steps, it could never move an inch.
A reasonable reading of the provisions is that it merely gives a right of first refusal by the small
investors vis-a-vis the 10% block of shares. As far as the 10% block is concerned, the small
investors shall have a first chance to subscribe thereto whenever it is offered. The offer may be
made before, after or simultaneous with the offer of the shares to strategic partners or major
investors depending on the prevailing condition of the market. Certainly, in an initial public
offering, it is good judgment and business sense that should prevail, rather than the rigid and
inflexible rules of step one, step two, etc.

13. ID.; ID.; ID.; ID.; ID.; PRICING OF SHARES OF STOCK LEFT TO EXPERTS. The pricing
of shares of stock is a highly specialized field that is better left to the experts. It involves an
inquiry into the earning potential, dividend history, business risks, capital structure, management,
asset values of the company; the prevailing business climate; the political and economic
conditions; and a myriad of other factors that bear on the valuation shares (Van Horne, Financial
Management and Policy 652-653 [8th ed.]; Leffler and Farwell, The Stock Market 573-575 [3rd
ed.]).
14. CONSTITUTIONAL LAW; PUBLIC UTILITY, DEFINED. A "public utility" under
theConstitution and the Public Service Law is one organized "for hire or compensation" to serve
the public, which is given the right to demand its service.
15. ADMINISTRATIVE LAW; PUBLIC CORPORATIONS; PHILIPPINE NATIONAL OIL
COMPANY; PETRON, NOT A PUBLIC UTILITY. Petitioners contend that PETRON is a public
utility, in which foreign ownership of its equity shall not exceed 40% thereof and the foreign
participation in the governing body shall be limited to their proportionate share in its capital.
According to petitioners, ARAMCO is entitled only to a maximum of four seats in the ten-man
board but was given five seats. This issue hinges on whether the business of oil refining is a
"Public utility" within the purview of Section 11, Article XII of the 1987 Constitution (adopted from
Sec. 5, Art. XIV of the 1973 Constitution). Implementing Section 8, of Article XIV of the 1935
Constitution, the progenitor of Section 5 of Article XIV of the 1973 Constitution, is Section 13(b)
of the Public Service Act. More pertinent is Section 7 of R.A. No. 387, the Petroleum Act of
1949. PETRON is not engaged in oil refining for hire and compensation to process the oil of
other parties. Likewise, the activities considered as "public utility" under Section 7 of R.A. no.
387 refer only to petroleum which is indigenous to the Philippines. Hence, the refining of
petroleum products sourced from abroad as is done by Petron, is not within the contemplation of
the law. We agree with the opinion of the Secretary of Justice that the refining of imported crude

11. STATUTORY
CONSTRUCTION;
CONTEMPORANEOUS
CONSTRUCTION
AND
INTERPRETATION OF LAW BY THE IMPLEMENTING ADMINISTRATIVE AGENCY,
ACCORDED GREAT RESPECT. The Rules and Regulations issued by the COP to
implement R.A. No. 7181 set aside 10% of the shares subject of the privatization to be offered
first to the small local investors, and made clear that as far as said 10% block is concerned, the
small investors shall have the first crack to buy the same. These Rules have been consistently
applied in previous privatizations, and they constitute a contemporaneous construction and
interpretation of a law by the implementing, administrative agency. Such construction is

102

oil is not regulated by, nor is it within the scope and purview of the Petroleum Act of 1949.
WHEREFORE, the petitions are DISMISSED.

Respondent Monico V. Jacob was impleaded in G. R. No. 115994 in his capacity as President of
respondent Philippine National Oil Company (PNOC). At the time of the filing of the petition, he
had ceased to be the President of PNOC and a member of its governing board. However, he is
the Chairman of the Board of Directors and Chief Executive Officer of PETRON, a respondent in
both cases. He asked for the dismissal of the petition on the ground that having ceased to be
PNOC President, petitioners had no more cause of action against him. We deny the motion in
view of the fact that the petition questions his acts as President of PNOC.

DECISION
QUIASON, J p:
The petition for prohibition in G. R. No. 112399 sought: (1) to nullify the bidding conducted for
the sale of a block of shares constituting 40% of the capital stock (40% block) of Petron
Corporation (PETRON) and the award made to Aramco Overseas Company, B.V. (ARAMCO) as
the highest bidder in the bidding conducted on December 15, 1993; and (2) to stop the sale of
said block of shares to ARAMCO. The Supplemental Petition in said case sought to annul the
bidding of the 40% block held on December 15, 1993 and to set aside the award given to
ARAMCO (Rollo, pp. 94-99). cdrep

In G.R. No. 115994, ARAMCO entered a limited appearance to question the jurisdiction over its
person, alleging that it is a foreign company organized under the laws of the Netherlands, that it
is not doing nor licensed to do business in the Philippines, and that it does not maintain an
officer of a business address in and has not appointed a resident agent for the Philippines (Rollo,
p. 240).
I

The petition for prohibition and certiorari in G. R. No. 115994 sought to annul the sale of the
same block of Petron shares subject of the petition in G.R. No. 112399.

PETRON was originally registered with the Securities and Exchange Commission (SEC) in 1966
under the corporate name "Esso Philippines, Inc." (ESSO) as a subsidiary of Esso Eastern, Inc.
and Mobil Petroleum Company, Inc.

The petition in G.R. No. 112399 asked for the issuance of a temporary restraining order to stop
respondents from selling the 40% block to a foreign buyer (Rollo, p. 15). The petition for a
temporary restraining order was reiterated in a motion filed subsequently (Rollo, pp. 107-108).

In 1973, at the height of the world-wide oil crisis brought about by the Middle East conflicts, the
Philippine government acquired ESSO through the PNOC. ESSO became a wholly-owned
company of the government under the corporate name PETRON and as a subsidiary of PNOC.

The petition in G.R. No. 115994 asked for the issuance of a temporary restraining
order and a writ of preliminary injunction to restrain and enjoin public respondents "from
proceeding with the projected initial public offering on July 18, 1994 of the 20% of Petron"
(Rollo, p. 33). cdrep

In acquiring PETRON, the government aimed to have a buffer against the vagaries of oil prices
in the international market. It was felt that PETRON can serve as a counterfoil against price
manipulation that might go unchecked if all the oil companies were foreign-owned. Indeed,
PETRON helped alleviate the energy crises that visited the country from 1973 to 1974, 1979 to
1980, and 1990 to 1991.

The Urgent Supplemental Petition in said case reiterated the prayer for the immediate issuance
of a preliminary injunction to enjoin the initial public offering of the Petron shares (Rollo, pp. 223225).

PETRON owns the largest, most modern complex refinery in the Philippines with
a nameplate capacity of 155,000 barrels per stream day. It is also the country's biggest
combined retail and wholesale market of refined petroleum products. In 1992, it garnered a
39.8% share of all domestic products sold, and at year end its assets totalled P24.4 billion.
PETRON's income as of September 1993 was P2.7 billion. It is listed as the No. 1
corporation in terms of assets and income in the Philippines. cdt

Actions on the petitions and motions for the issuance of a temporary restraining order and a writ
of preliminary injunction were deferred.
The petition in G.R. No. 112399 was filed by Representative Amado S. Bagatsing while the
petition in G.R. No. 115994 was filed by Senators Neptali A. Gonzales, Ernesto A. Maceda, John
H. Osmea and Wigberto E. Taada, Representatives Joker Arroyo and Amado D. Bagatsing
and former Senator Rene A.V. Saguisag all in their capacity as members of Congress,
taxpayers and concerned citizens, except in the case of Mr. Saguisag, who sued as a private law
practitioner, member of the Integrated Bar of the Philippines, taxpayer and concerned
citizen. cdasia

On December 8, 1986, President Corazon C. Aquino promulgated Proclamation No. 50 in the

exercise of her legislative power under the Freedom Constitution.
The Proclamation is entitled "Proclaiming and Launching a Program for the Expeditious
Disposition and Privatization of Certain Government Corporations and/or the Assets thereof, and
Creating the Committee on Privatization and the Asset Privatization Trust."

103

Implicit in the Proclamation is the need to raise revenue for the Government and the ideal of
leaving business to the private sector. The government can then concentrate on the delivery of
basic services and the performance of vital public functions. cdrep

On March 25, 1993, the Government Corporate Monitoring and Coordinating

Committee (GCMCC) recommended a 100% privatization of PETRON.
On March 31, 1993, the PNOC Board of Directors passed a resolution
authorizing the company to negotiate and conclude a contract with the consortium of
Salomon Brothers of Hongkong Limited and PCI Capital Corporation for financial advisory
services to be rendered to PETRON.

On December 2, 1991, President Fidel V. Ramos noted that "[t]he privatization program has
proven successful and beneficial to the economy in terms of expanding private economic activity,
improving investment climate, broadening ownership base and developing capital markets, and
generating substantial revenues for priority government expenditure," but "[t]here is still much
potential for harnessing private initiative to undertake in behalf of government certain activities
which can be more effectively and efficiently undertaken by the private sector" (G.R.
No. 112399, Rollo, p. 31).

On April 1, 1993, the GCMCC recommended to COP the privatization of only

65% of the capital stock of PETRON, instead of the 100% privatization previously
recommended. cdasia

In its meeting held on September 9, 1992, the PNOC Board of Directors approved Specific
Thrust No. 6 and moved "to bring to the attention of the Administration the need to privatize
Petron whether or not there will be deregulation [of the oil industry]" (G.R. No.112399, Rollo, p.
67).

On June 10, 1993, in a letter addressed to Secretary Ernesto C. Leung, the COP Chairman,
President Ramos approved the privatization of PETRON up to a maximum of 65% of its capital
stock.
The Petron Privatization Working Committee (PWC) was thus formed. It finalized a privatization
strategy with 40% of the shares to be sold to a strategic partner and 20% to the general public
through the initial public offering and employees stock option plan.

In a letter dated October 21, 1992, Secretary Ramon R. Del Rosario, as Chairman of the
Committee on Privatization, endorsed to President Ramos the proposal of PNOC to "privatize
65% of the stock of Petron, open to both foreign as well as domestic investors." Secretary Del
Rosario added: "The entry of foreign investors in this field is expected to result in improved
technology and know-how and will enable Petron to have access to international information
network as well as access to external markets and refining contracts" (G.R. No. 112399, Rollo,
p. 72). aisadc

The Commission on Audit (COA) was consulted as to the valuation methodologies and
privatization process. The privatization plan was also presented to the COP on July 23, 1993,
and to the President on July 31, 1993 for their approval. cdtai
On August 10, 1993, the President approved the 40%-40%-20% privatization strategy of
PETRON. In the press release on the presidential approval of the said privatization, the Office of
the President commented:

On January 4, 1993, a follow-up letter was sent by Secretary Del Rosario informing the
President that: "The privatization of Petron, recommended by both the management of Philippine
National Oil Company (PNOC) and the Committee on Privatization (COP), will send the right
signals that may re-ignite investor interest in the Philippines for 1993" (G.R. No. 112399, Rollo,
p. 73).

"For Petron, gaining a long-term strategic partner that will ensure stable
crude oil supplies and/or advance its technological and financial position
will be a definite advantage. In addition, its partial privatization will provide
the flexibility and level playing field it needs to remain a major, and
therefore influential player in the oil industry. In 1992, Petron dominated
the oil industry with a commanding 40% market share" (G.R.
No. 112399, Rollo, p. 83).

In a letter dated January 6, 1993, Secretary designate Delfin L. Lazaro of the

Department of Energy, favorably endorsed for approval the plan to sell up to 65% of the
capital stock of PETRON. He also noted that the said plan was "consistent with the Energy
Sector Action Plan approved by the President and the Cabinet on November 27, 1992"
(G.R. No. 112399, Rollo, p. 74).

The invitation to bid was published in several newspapers of general circulation, both local and
foreign. The deadline for the submission of proposals was set for December 15, 1993 at 5:00
P.M. cdt

On January 12, 1993, the Cabinet approved the privatization of PETRON as part
of the Energy Sector Action Plan. cdta

PETRON furnished the Office of the Solicitor General (OSG) with copies of the draft of the stock
purchase agreement and shareholders' agreement, with a request for the review of the same.

104

In a meeting of the Petron PWC held on December 15, 1993 at 12:00 noon, it decided that
Westmont Holdings (WESTMONT) was disqualified from participating in the bidding for its
alleged failure to comply with the technical and financial requirements for a strategic partner.

Public respondents submitted to the Securities and Exchange Commission (SEC) a proposed
price for the initial public offering of the 20% block set for July 18, 1994, the second phase of
PETRON's privatization. PETRON proposed a price of between P7.00 and 16.00 per share but
the SEC approved a price of P9.00 per share.

Salomon Brothers valued PETRON at US$600 million and the 40% block at US$240 million. For
the entire Petron share, respondent Secretary Lazaro proposed a valuation of US$1.4 billion;
Petron management, US$857 million; and Frances Onate, a member of the Petron PWC, a
valuation of US$743 million to US$1 billion. aisadc

II
PETRON questions the locus standi of petitioners to file the action (Rollo, pp. 479-484).
Petitioners however, countered that they filed the action in their capacity as members of
Congress. cdasia

Finally, the floor price bid for the 40% block was fixed at US$440 million.
The bids of Petroliam Nasional Berhad (PETRONAS), ARAMCO and
WESTMONT were submitted while the floor price was being discussed.

In Philippine Constitution Association v. Hon. Salvador Enriquez, G.R. No. 113105, August 19,
1994, we held that members of Congress have the legal standing to question the validity of acts
of the Executive which injures them in their person or the institution of Congress to which they
belong. In the latter case, the acts cause derivative but nonetheless substantial injury which can
be questioned by members of Congress (Kennedy v. James, 412 F. Supp. 353 [1976]. In the
absence of a claim that the contract in question violated the rights of petitioners or impermissibly
intruded into the domain of the Legislature, petitioners have no legal standing to institute the
instant action in their capacity as members of Congress.

At about 6:15 P.M. and before the bids were opened, WESTMONT through its
representative, Manuel Estrella, submitted additional documents to prove its financial
capability to carry out the purchase of the 40% block. The PNOC Board of Directors
adopted Resolution No. 865, S. 1993, rejecting the bid of WESTMONT for not having met
the pre-qualification criteria of financial capability, long-term crude supply availability, and
technical and management expertise in the oil business. It was further resolved that the bid
submitted by WESTMONT would be returned unopened. cdta

However, petitioners can bring the action in their capacity as taxpayers under the doctrine laid
down in Kilosbayan, Inc. v. Guingona, 232 SCRA 110 (1994). Under said ruling, taxpayers may
question contracts entered into by the national government or government-owned or controlled
corporations alleged to be in contravention of the law. As long as the ruling
in Kilosbayan on locus standi is not reversed, we have no choice but to follow it and uphold the
legal standing of petitioners as taxpayers to institute the present action.

At 6:30 P.M., the other two bids were opened. The bid of ARAMCO was for
US$502 million while the bid of PETRONAS was for US$421 million. The PNOC Board of
Directors then passed Resolution No. 866, S. 1993, declaring ARAMCO the winning bidder.
On December 15, 1993, the OSG informed PETRON that the drafts of the stock purchase
agreement and shareholders' agreement contained no legally objectionable provisions and could
be the basis for PETRON's negotiation with the winning bidder.

III
A. Petitioners in G.R. Nos. 112399 and 115994 claim that the inclusion of PETRON in the
privatization program contravened the declared policy of the State to dispose of only nonperforming assets of the government and government-owned or controlled corporations which
have been found unnecessary or inappropriate for the government sector to maintain. They
contend that PETRON is neither a non-performing asset nor is it unnecessary or inappropriate
for the government to maintain or operate (G.R. No.112399, Rollo, pp. 3-4, 8-13; G.R. No.
115994, Rollo, pp. 14-17, 216-217). cdrep

On December 16, 1993, respondent Monico Jacob, in his capacity as President and Chief
Executive Officer of PNOC, endorsed to the COP the bid of ARAMCO for approval. The COP
gave its approval on the same day. Also on the same day, Manuel Estrella filed a complaint in
behalf of WESTMONT with PNOC, questioning the award of the 40% block of Petron shares to
ARAMCO. The COP answered Estrella's letter on January 14, 1994, explaining why
WESTMONT's bid was returned unopened. cdrep

To say that only non-performing assets should be the subject of privatization does not conform
with the realities of economic life. In the world of business and finance, it is difficult to sell a
business in dire, financial distress. As entrepreneur Don Eugenio Lopez used to advert to his
younger executives: "Don't buy headaches. Don't even accept them if they are offered to you on
a silver platter." It is only in a fire sale that the government can expect to get rid of its non-

On February 3, 1994, PNOC and ARAMCO signed the Stock Purchase Agreement and on
March 4, 1994, the two companies signed the Shareholders' Agreement.

105

performing assets, more so if the sequencing pattern insisted by petitioners (initial public offering
of 10% block to small investors) is followed.
xxx xxx xxx

While Proclamation No. 50 mandates that non-performing assets should promptly be sold, it
does not prohibit the disposal of the other kinds of assets, whether performing, necessary or
appropriate.

After a long study by PNOC, PETRON was found to be "inappropriate or unnecessary" for the
government to maintain because refining and marketing of petroleum is an aspect of the industry
which is better left to the private sector. In making such finding, PNOC was guided by Section
4(a) of Proclamation No. 50, which provides: aisadc

Section 1 of the Proclamation reads: cdasia

"Statement of Policy. It shall be the policy of the State to promote
privatization through an orderly, coordinated and efficient program for the
prompt disposition of the large number of non-performing assets of the
government financial institutions, and certain government-owned or
controlled corporations which have been found unnecessary or
inappropriate for the government sector to maintain."

". . . (a) divesting to the private sector in the soonest possible time
through the appropriate disposition entities, those assets with viable and
productive potential as going concerns, taking into account where
appropriate the implications of such transfers on sectoral productive
capacities and market limitation, . . .. These objectives are to be pursued
within the context of furthering the national economy through
strengthened and revitalized private enterprise system."

The said provision classifies two types of assets: (1) Non-performing assets of government
financial institutions; and (2) Government-owned or controlled corporations which have been
found unnecessary or inappropriate for the government sector to maintain.

The decision of PNOC to privatize PETRON and the approval of the COP of such privatization,
being made in accordance with Proclamation No. 50, cannot be reviewed by this Court. Such
acts are exercises of the executive function as to which the Court will not pass judgment upon or
injure into their wisdom (Llamas v. Orbos, 202 SCRA 844 [1991]).

Under the Proclamation, it is the COP which is tasked with the duty of identifying and arranging
the sale of government assets. Section 5(1) of the Proclamation provides: cdrep

Such identification by the COP of the government corporations to be privatized was not even
necessary in the case of PETRON. Under Section 5(1) of Proclamation No. 50 ". . . [N]o such
identification, recommendation or approval shall be necessary where a parent corporation
decides on its own to divest of, in whole or in part, or liquidate a subsidiary corporation
organized under the Corporation Code; . . ." cdta

"Powers and Functions. The committee shall have the following powers
and functions:
"(1) To identify to the President of the Philippines, and arrange for transfer
to the National Government and/or to the Trust and the subsequent
divestment to the private sector of (a) such non-performing assets as may
be identified by the Committee, and approved by the President, for
transfer from the government banks for disposal by the Trust or the
government banks, and (b) such government corporations, whether
parent or subsidiary, and/or such of their assets, as may have been
recommended by the Committee for disposition, and Provided, that no
such identification, recommendation or approval shall be necessary
where a parent corporation decides on its own to divest of, in whole or in
part, or liquidate a subsidiary corporation organized under the
Corporation Code; Provided, further, that any such independent
disposition shall be undertaken with the prior approval of the Committee
and in accordance with the general disposition guidelines as the
Committee may provide; Provided, finally, that in every case the sale or
disposition shall be approved by the Committee with respect to the buyer
and price only." (Italics supplied).

The only participation of the COP in the sale of the Petron shares by PNOC, the parent
corporation, was the approval of the buyers and price. The last sentence of paragraph (1) of
Section 5 provides:
". . . Provided, finally, that in every case the sale or disposition shall be
approved by the Committee with respect to the buyer and price only."
PNOC, in privatizing PETRON, was simply exercising its corporate power to dispose of all or a
portion of its shares in a subsidiary. PNOC was created under P.D. No. 334, as amended by P.D.
No. 927, which empowers it to acquire shares of the capital stock of any other corporation and to
dispose of the same shares. cdasia

106

Besides, if only non-performing assets are intended to be sold, it would be unnecessary to

provide in the Proclamation for the rehabilitation of government corporations to make the same
more attractive to investors and potential buyers.

"Privatization of government assets classified as a strategic

industry by the National Economic and Development Authority shall first
be approved by the President of the Philippines" (Italics supplied). cdt

Section 5(5) of Proclamation No. 50 provides:

Section 6, the repealing clause of R.A. No. 7181, expressly repealed Sections 3 and 10
ofProclamation No. 50 and all other laws, orders and rules and regulations which are
inconsistent therewith.

"In its discretion, to approve or disapprove, subject to the availability of

funds for such purpose, the rehabilitation of assets pending disposition by
the Trust or any other government agency authorized by the Committee,
or the Trust with the approval of the Committee, Provided that, the budget
for each rehabilitation project shall be likewise subject to prior approval by
the Committee."

The only requirement under R.A. No. 7181 in order to privatize a strategic industry like PETRON
is the approval of the President. In the case of PETRON's privatization, the President have his
approval not only once but twice.
PETRON's privatization is also in line with and is part of the Philippine Energy Program
under R.A. No. 7638. Section 5(b) of the law provides that the Philippine Energy Program shall
include a policy direction towards the privatization of government agencies related to
energy. cdrep

Nowhere in the Proclamation can one infer that it prohibits a partial privatization
of vital, appropriate and performing corporations owned by the government. cdrep
Proclamation No. 50 contained an Annex listing the corporations to be privatized
and those to be retained. While PETRON was mentioned among the corporations to be
retained, Section 6 of the Proclamation directed a continuing study on what corporations
should be recommended for privatization.

Under P.D. No. 334, the law creating PNOC, said corporation is granted the
authority "[t]o establish and maintain offices, branches, agencies, subsidiaries,
correspondents or other units anywhere as may be needed by the Company and
reorganize or abolish the same as it may deem proper."

It is markworthy that the said Annex did not indicate the percentage of shares
that will be privatized or that will be retained. It can be interpreted to mean that all the
shares of the corporations in the list to be privatized maybe sold, while only some of the
shares of the other corporations may be sold. It is also worthy of note that the list of
corporations to be retained added the phrase "As of 31 August 1992," meaning that any of
the corporations mentioned therein may be delisted after that date if a study would justify
such action.

B. Petitioners next question the regularity and validity of the bidding (G.R. No. 112399,Rollo, pp.
97-99; G.R. No. 115994, Rollo, pp. 17-24, 221). Petitioners in G.R. No. 115994 claim that the
public bidding was tainted with haste and arbitrariness and that there was a failed bidding
because there was only one offeror (Rollo, pp. 17-24).
Taking the cudgels for WESTMONT, petitioners urge that said bidder was only given two days to
conduct a review of PETRON's vast business operations in order to comply with the technical
and financial requirements for pre-qualifications. Petitioners also complain that the prequalification and actual bidding were conducted on the same day, thus denying a disqualified
bidder an opportunity to protest or to appeal. They question the fixing of the floor price on the
same day as the public bidding and only after the bids had been submitted. Likewise, they say
that the approval of the bid of ARAMCO by the Assets Privatization Trust on the same day it is
submitted is anomalous (G.R. No. 115994, Rollo, pp. 22-24). cdrep

The government is not disposing of all of its shares in PETRON but is retaining a
40% block. Together with the widely-held 20% of the private sector control of PETRON by
the government is assured. With such equity in PETRON, the government can also
maintain a window to the oil industry and at the same time share in the profits of the
company. cdrep
The privatization of PETRON could well be undertaken under laws other
thanProclamation no. 50.

On the claim that there was a failed bidding, petitioners contend that there were
only three bidders. On of them, PETRONAS, submitted a bid lower than the floor price
while a second, failed to pre-qualify. Citing Section V-2-a of COA Circular No. 89-296 dated
January 27, 1989, they argue that where only one bidder qualifies, there is a failure of
public auction (G.R. No. 115994, Rollo, p. 22).

Of significance is Section 2(c) of R.A. No. 7181, which provides that:

107

When a failure of bidding takes place is defined in Circular No. 89-296 of the
Commission on Audit, which prescribes the "Audit Guidelines on the Divestment or
Disposal of Property and other Assets of the National Government Agencies and
Instrumentalities, Local Government Units and Government-Owned or Controlled
Corporations and their Subsidiaries."

not speak of accepted bids but of offerors, without distinction as to whether they were
disqualified.
The COA itself, the agency that adopted the rules on bidding procedure to be followed by
government offices and corporations, had upheld the validity and legality of the questioned
bidding. The interpretation of an agency of its own rules should be given more weight than the
interpretation by that agency of the law it is merely tasked to administer.cdrep

"V. MODES OR DISPOSAL/DIVESTMENT: cdt

xxx xxx xxx

The case of Danville Maritime, Inc. v. Commission on Audit, 175 SCRA 701 (1989), relied upon
by petitioner, is inappropriate. In said case, there was only one offeror in the bidding. The Court
said: ". . . [I]f there is only one participating bidder, the bidding is non-competitive and, hence,
falls short of the requirement. There would, in fact, be no bidding at all since, obviously, the lone
participant cannot complete against himself."

"2. Sale Thru Negotiation

For Justifiable reasons and as demanded by the exigencies of the
service, disposal thru negotiated sale may be resorted to and undertaken
by the proper committee or body in the agency or entity concerned taking
into consideration the following factors:

C. According to petitioners, the law mandates the offer for sale of 10% of the Petron shares to
small investors before a sale of the 40% block of shares to ARAMCO can be made.

"a. There was a failure of public auction. As envisioned in this Circular,

there is a failure of public auction in any of the following instances:
They theorize that the best way to determine the real market price of Petron shares was to first
have a public offering as required by R.A. No. 7181. The reverse procedure followed by private
respondents, according to petitioners, gave unwarranted benefits to private respondents
because they bought the Petron shares at only P6.70 per share when the shares fetched as high
as P16.00 per share in the stock market (G.R. No. 115994, Rollo, pp. 24-27). cdrep

"1. if there is only one offeror.

In this case, the offer or bid, if sealed, shall not be opened.
"2. if all the offers/tenders are non-complying or unacceptable. cdta

To bolster their theory, petitioners cite Section 2(d) of R.A. No. 7181, which provides:

'A tender is non-complying or unacceptable when it does not

comply with the prescribed legal, technical and financial
requirement for pre-qualification.'"

"A minimum of ten (10) percent of the sale of assets in corporation form
shall first be offered to small local investors including Filipino Overseas
Workers and where practicable also in the sale of any physical asset."

Under said COA Circular, there is a failure of bidding when: 1) there is only one offeror; or (2)
when all the offers are non-complying or unacceptable.

Petitioners also invoke the Implementing Guidelines promulgated to implement R.A. No. 7181,
which provides: cdta

In the case at bench, there were three offerors: SAUDI ARAMCO, PETRONAS and
WESTMONT. cdrep

"In the sale of assets in corporate form, at least 10% of the total shares
for privatization shall first be offered to small local investors. Employees
Stock Ownership Plans (ESOPS) and public offerings shall count towards
compliance with these provisions . . ." (Sec. 3).

While two offerors were disqualified, PETRONAS for submitting a bid below the floor price and
WESTMONT for technical reasons, not all the offerors were disqualified. To constitute a failed
bidding under the COA Circular, all the offerors must be disqualified.

We agree with PETRON that the language of Section 2(d) of R.A. No. 7181 does not mandate
any sequencing for the disposition of shares in a government-owned corporation being
privatized.

Petitioners urge that in effect there was only one bidder and that it can not be said that there was
a competition on "an equal footing" (G.R. No. 112399, Rollo, p. 122). But the COA Circular does

108

It is the unfortunate use of the word "first" in Section 2(d) of R.A. No. 7181 that threw petitioners
off track and caused them to misread the provision as one requiring a mandatory sequencing of
the sale. As a wit once said, if a centipede would be compelled to follow a prescribed
sequencing of it steps, it could never move an inch. cdrep

The clear policy behind Proclamation No. 50 is to give the COP the APT maximum flexibility in
their operation to ensure the most efficient implementation of the privatization program.
Under Section 5(3) of the Proclamation, full powers are given the COP to establish "mandatory
as well as indicative guidelines for . . . the disposition of . . . assets." Under Section 12(2)
thereof, the APT is given the "widest latitude of flexibility . . . particularly in the areas of . . .
disposition . . ."

A reasonable reading of the provision is that it merely gives a right of first refusal by the small
investors vis-a-vis the 10% block of shares. As far as the 10% block is concerned, the small
investors shall have a first chance to subscribe thereto whenever it is offered. The offer may be
made before, after or simultaneous with the offer of the shares to strategic partners or major
investors depending on the prevailing condition of the market. Certainly, in an initial public
offering, it is good judgment and business senses that should prevail, rather than the rigid and
inflexible rules of step one, step two, etc.

Petitioners can not rely on Opinion No. 126, Series of 1992 dated September 28, 1992. The
query posed to the Secretary of Justice in said opinion was the legality of the plan of National
Development Corporation to pass on to the prospective buyer of its shares in prescribed a local
bank the responsibility of complying with the requirement prescribe in Section 2(d) of R.A. No.
7181 that a minimum of 10% of the shares of a corporation "shall first be offered to small local
investors . . .." The Secretary of Justice naturally opined that said proposal could not legally be
done on the principal ground that the "observance of this legal requirement is incumbent upon
the disposition entity, which in this case is NDC, but as contemplated, the sale to small investors
shall be undertaken by the private buyer of the [local bank's] shares." The query posed to the
Secretary of Justice was not about the sequencing of the sale of the 10% block. cdasia

The Rules and Regulations issued by the COP to implement R.A. No. 7181 set aside 10% of the
shares subject of the privatization to be offered first to the small local investors, and made clear
that as far as said 10% block is concerned, the small investors shall have the first crack to buy
the same. These Rules have been consistently applied in previous privatizations, and they
constitute a contemporaneous construction and interpretation of a law by the implementing,
administrative agency. Such construction is accorded great respect by the Court (Nestle
Philippines, Inc. v. Court of Appeals, 203 SCRA 504 [1991]).

We can not see how the failure to dispose the 10% block to the general public before the sale of
the 40% block to ARAMCO gave the latter unwarranted benefits.

What Congress clearly mandated in R.A. No. 7181 was that at least 10% of the shares of a
privatized corporation must be reserved and offered for sale to the general public. In the
deliberation of the Congressional Committee on Government-Owned and Controlled
Corporations on December 18, 1991, the Committee spoke of having the 10% set aside without
impending the privatization process. aisadc

Actually ARAMCO paid a total of P14,671,985,306.00 for the acquisition of the Petron shares.
This aggregate amount represents in peso terms: (1) the US$502 million winning bid paid by
ARAMCO to PNOC on March 4, 1994; and (2) the additional amount of US$30,327,987.00
remitted on July 11, 1994, representing the "purchase price adjustment" stipulated in the Stock
Purchase Agreement. Consequently, ARAMCO's acquisition cost was P7.336 per share.

Note that when then bidding of the 40% block of Petron shares had been announced, the 10%
block for offering to the small local investors had been identified, reserved and set aside. This is
more than a substantial compliance with the mandate of law.

A fair comparison between the ARAMCO price and the IPO price should take into consideration
the levels of financial, legal and miscellaneous costs directly related to the ARAMCO purchase,
including the consequent opportunity cost or income to PNOC and the National Government,
had the proceeds been invested in Philippine Treasury Bills from March 4 and July 11,
respectively, to September 7, 1994. On this basis, the effective proceeds on the ARAMCO
purchase amount to P7.8559 per share, and not P6.70 as claimed by petitioners (G.R. No.
115994, Rollo, pp. 506-507). On the other hand, the seller's expenses incurred in connection
with the IPO, including taxes and other fees paid to the National Government, reached a total of
P833.081 million or P0.833 per share (G.R. No. 115944, Rollo, p. 507). cdrep

There is great risk in first making an initial public offering of the 10% block before bidding out the
40% block to a strategic partner. It may happen that the price of the shares offered initially to the
public plunges below the offering price approved by the SEC.
The sensitive market forces involved in initial public offerings render unrealistic any legislative
mandate to follow a sequencing in the sale of government-owned shares in the market. The
legislators, practical men of affairs as they are, were aware of the vagaries, variables and
vicissitudes of the stock market when they enacted R.A. No. 7181. It is more reasonable to read
the said law as leaving to the COP and the government corporations concerned to determine the
sequencing of the sale to strategic investors and the general public. To require the offer of 10%
to the general public before the sale of a block to a strategic partner may delay or even impede
the entire privatization program. cdrep

To make further a fair comparison between the two prices, the proceeds from the IPO should be
net of PNOC's share in PETRON's net income from March to August 1994, because in effect it
was giving up this amount in favor of the IPO investors. As projected, the total net income of
PETRON from March to August 1994 is P1,870,500.00. Twenty percent of this is P374,100.00

109

which translates to a per share reduction of P0.3741 from the IPO proceeds. This would further
erode the effective proceeds from the IPO sale to P7.7929 per share.

D. Finally, petitioners contend that PETRON is a public utility, in which foreign ownership of its
equity shall not exceed 40% thereof and the foreign participation in the governing body shall be
limited to their proportionate share in its capital. According to petitioners, ARAMCO is entitled
only to a maximum of four seats in the ten-man board but was given five seats (G.R. No.
112389, Rollo, pp. 30-64; G.R. No. 115994, Rollo, pp. 30-31, 202-212).

Finally, cash dividends of P2 billion and property dividends of P153 million, or a total of P2.153
billion was declared and transferred to PNOC from the ARAMCO purchase was effected.
Imputing such dividends would translate the effective proceeds to PNOC from the ARAMCO sale
to P8.2865 per share (P7.8559 plus P0.4306 [or 40% of P2.153 Billion]). Using this figure, the
IPO proceeds of P7.7929 per share is definitely lower than the ARAMCO proceeds of P8.2865.

This issue hinges on whether the business of oil refining is a "public utility" within the purview
of Section 11, Article XII of the 1987 Constitution (adopted from Sec. 5, Art. XIV of the 1973
Constitution), which provides. cdrep

Unlike the ordinary buyers of shares listed in the stock exchange, ARAMCO, as a strategic
investor, had to spend for the due diligence review of the business and records of PETRON. cdt

"No franchise, certificate, or any other form of authorization for the

operation of a public utility shall be granted except to citizens of the
Philippines or to corporations or associations organized under the laws of
the Philippines at least sixty per centum of whose capital is owned by
such citizens, nor shall such franchise, certificate, or authorization be
exclusive in character for a longer period than fifty years. Neither shall
any such franchise or right be granted except under the condition that it
shall be subject to amendment, alteration, or repeal by the Congress
when the common good so requires. The State shall encourage equity
participation in public utilities by the general public. The participation of
foreign investors in the governing body of any public utility enterprise shall
be limited to their proportionate share in its capital and all the executive
and managing officers of such corporation or association must be citizens
of the Philippines" (Italics supplied).

Aside from this monetary considerations, PNOC derived the following value-added benefits:
1) PNOC is assured of an adequate supply of crude oil. The element of uncertainty on sources
of crude oil supply is reduced, if not eliminated, ARAMCO being the world's largest known
producer and exporter of five different types of crude oil.
2) PNOC's refinery can achieve optimum efficiency because of better crude slates. cdrep
3) ARAMCO has to hold on to the Petron shares for the next five years. Aside
from its stabilizing effect on the market price of Petron shares, this holding period will
prevent ARAMCO from delivering any speculative gains. Unlike ARAMCO, the buyers of the
IPO can sell their shares any time without constraints.

Implementing Section 8 of Article XIV of the 1935 Constitution, the progenitor of Section 5 of
Article XIV of the 1973 Constitution, is Section 13(b) of the Public Service Act, which provides:

4) ARAMCO's presence in PETRON has a tremendous, unquantifiable influence

in inventor's confidence in PETRON as a publicly-listed company. This confidence could not
be generated if PETRON's partner has a bad track record.

"The term 'public service' includes every person that now or hereafter
may own, operate, manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether permanent,
occasional, or accidental and done for general business purposes, any
common carrier, railroad, street railway, . . . and other similar public
services: . . ." cdrep

5) ARAMCO will assist PNOC in raising funds to finance the more than P12 billion in projected
capital expenditures required over the next four years to make PETRON competitive. cdt
The pricing of shares of stock is a highly specialized field that is better left to the experts. It
involves an inquiry into the earning potential, dividend history, business risks, capital structure,
management, asset values of the company; the prevailing business climate; the political and
economic conditions; and a myriad of other factors that bear on the valuation of shares (Van
Horne, Financial Management and Policy 652-653 [8th ed.]; Leffler and Farwell, The Stock
Market 573-575 [3rd ed.]).

More pertinent is Section 7 of R.A. No. 387, the Petroleum Act of 1949, which
provides:
"Petroleum operation a public utility. Everything relating to the
exploration for and exploitation of petroleum which may consist naturally
or below the surface of the earth, and everything relating to the
manufacture, refining, storage or transportation by special methods of

110

petroleum, as provided for in this Act, is hereby declared to be of public

utility" (Rollo, p. 519; Italics supplied).
A "public utility" under the Constitution and the Public Service Law is one
organized "for hire or compensation" to serve the public, which is given the right to demand
its service. PETRON is not engaged in oil refining for hire and compensation to process the
oil of other parties. cdt

EN BANC

Likewise, the activities considered as "public utility" under Section 7 of R.A. No.
387 refer only to petroleum which is indigenous to the Philippines. Hence, the refining of
petroleum products sourced from abroad as is done by Petron, is not within the
contemplation of the law.

[G.R. No. 124360. December 3, 1997.]

FRANCISCO S. TATAD, petitioner, vs. THE SECRETARY OF THE
DEPARTMENT OF ENERGY AND THE SECRETARY OF THE
DEPARTMENT OF FINANCE, respondents.

We agree with the opinion of the Secretary of Justice that the refining of imported
crude oil is not regulated by, nor is it within the scope and purview of the Petroleum Act of
1949. He said:

[G.R. No. 127867. December 3, 1997.]

EDCEL C. LAGMAN, JOKER P. ARROYO, ENRIQUE GARCIA,
WIGBERTO TAADA, FLAG HUMAN RIGHTS FOUNDATION, HUMAN
RIGHTS FOUNDATION, INC., FREEDOM FROM DEBT COALITION
(FDC), SANLAKAS,petitioners, vs. HON. RUBEN TORRES in his
capacity as the Executive Secretary, HON. FRANCISCO VIRAY, in his
capacity as the Secretary of Energy, CALTEX Philippines, Inc.,
PETRON
Corporation,
and
PILIPINAS
SHELL
Corporation, respondents.

"Examination of our statute books fails to reveal any law or legal provision
which, in explicit terms, either permits or prohibits the establishment and
operation of oil refineries that would refine only imported crude oil"
(Opinion, No. 267, S. 1995). cdrep
WHEREFORE, the petitions are DISMISSED.
SO ORDERED.

EASTERN PETROLEUM CORP., SEAOIL PETROLEUM CORP., SUBIC

BAY DISTRIBUTION, INC., TWA, INC., and DUBPHIL GAS, movantsin-intervention.

Padilla, Romero, Bellosillo, Melo, Puno, Vitug, Kapunan,

Mendoza and Francisco, JJ., concur.
Regalado, J., concurs in the result.

Sanidad, Abaya, Cortez, Te, Madrid, Viterbo & Tan Law Firm for petitioners.

Narvasa, C.J., took no part; association with party.

Angara, Abello, Concepcion, Regala & Cruz co-counsel for Caltex Phil., Inc.

Feliciano, J., took no part; one of the parties is represented by my former firm.

SYNOPSIS

Davide, Jr., J., took no part due to friendship with respondent Lazaro and Jacob.

Motions for reconsideration and partial motions for reconsideration were filed by the parties of
the decision of the Supreme Court declaring R.A. No. 8180 unconstitutional.

||| (Bagatsing v. Committee on Privatization, G.R. No. 112399, 115994, [July 14, 1995], 316
PHIL 404-435)

The choice and crafting of the standard to guide the exercise of delegated power is part of the
lawmaking process and lies within the exclusive jurisdiction of Congress. The standard cannot
be altered in any way by the Executive for the Executive cannot modify the will of the Legislature.

111

The power of Congress to enact laws does not include the right to pass unconstitutional laws. In
fine, the Court did not usurp the power of Congress to enact laws but merely discharged its
bounden duty to check the constitutionality of laws when challenged in appropriate cases. Our
decision annulling R.A. 8180 is justified by the principle of check and balance. We hold that
power and obligation of this Court to pass upon the constitutionality of laws cannot be defeated
by the fact that the challenged law carries serious economic implications. This Court has struck
down laws abridging the political and civil rights of our people even if it has to often the other
more powerful branches of government. There is no reason why the Court cannot strike down
R.A. No. 8180 that violates the economic rights of our people even if it has to bridle the liberty of
big business within reasonable bounds.

differential on crude oil and refined petroleum importation gives a 20-centavo per liter advantage
to the three big oil companies over the new players. It was also found that said tariff differential
serves as a protective shield for the big oil companies. Nor do we approve public respondents'
submission that the entry of new players after deregulation is proof that the 4% tariff differential
is not a heavy disincentive.
3.ID.; ID.; ID.; ID.; DOES NOT VIOLATE EQUAL PROTECTION CLAUSE OF THE
CONSTITUTIONBUT EXCLUDE FAIR AND EFFECTIVE COMPETITION. Public respondents
try to justify the 4% tariff differential on the ground that there is a substantial difference between
a refiner and an importer just as there is a difference between raw material and finished product.
Obviously, the effort is made to demonstrate that the unequal tariff does not violate the equal
protection clause of the Constitution. The effort only proves that the public respondents are still
looking at the issue of tariff differential from the wrong end of the telescope. Our Decision did not
hold that the 4% tariff differential infringed the equal protection clause of the Constitution even as
this was contended by petitioner Tatad. Rather, we held that said tariff differential substantially
occluded the entry point of prospective players in the downstream oil industry. We further held
that its inevitable result is to exclude fair and effective competition and to enhance the
monopolists ability to tamper with the mechanism of a free market. This consideration is basic in
anti-trust suits and cannot be eroded by belaboring the inapplicable principle in taxation that
different things can be taxed differently.

The Constitution gave this Court the authority to strike down all laws that violate the Constitution.
It did not exempt from the reach of this authority laws with economic dimension.
A separability clause does not clothe the valid parts with immunity from the invalidating effect the
law gives to the inseparable blending of the bad with the good. The separability clause cannot
also be applied if it will produce an absurd result. In sum, if the separation of the statute will
defeat the intent of the legislature, separation will not take place despite the inclusion of a
separability clause in the law. In the case of Republic Act No. 8180, the unconstitutionality of the
provisions on tariff differential, minimum inventory and predatory pricing cannot but result in the
unconstitutionality of the entire law despite its separability clause. These provisions cannot be
struck down alone for they were the ones intended to carry out the policy of the law embodied in
Section 2 thereof. The provisions on 4% tariff differential, minimum inventory and predatory
pricing are anti-competition, and they are the key provisions of R.A. 8180. Without these
provisions in place, Congress could not have deregulated the downstream oil industry.

4.ID.; ID.; .ID.; MINIMUM INVENTORY REQUIREMENT; HIGH COST OF MEETING

REQUIREMENT HAS AN INHIBITING EFFECT ON OPERATIONS. The public respondents
tenaciously defend the validity of the minimum inventory requirement. They aver that the
requirement will not prejudice new players ". . . during their first year of operation because they
do not have yet annual sales from which the required minimum inventory may be determined.
Compliance with such requirement on their second and succeeding years of operation will not be
difficult because the putting up of storage facilities in proportion to the volume of their business
becomes an ordinary and necessary business undertaking just as the case of importers of
finished-products in other industries." The contention cannot convince for as well articulated by
petitioner Garcia, "the prohibitive cost of the required minimum inventory will not be any less
burdensome on the second, third, fourth, etc. years of operations. Unlike most products which
can be imported and stored with facility, oil imports require ocean receiving, storage facilities.
Ocean receiving terminals are already very expensive, and to require new players to put up more
than they need is to compound and aggravate their costs, and consequently their great
disadvantage vis-a-vis the Big 3." Again, the argument on whether the minimum inventory
requirement seriously hurts the new players is best settled by hearing the new players
themselves In their motion for intervention, they implicitly confirmed that the high cost of meeting
the inventory requirement has an inhibiting effect in their operation and hence, they support the
ruling of this Court striking it down as unconstitutional.

The Motions for Reconsideration of the public respondents and of the intervenors as well as the
Partial Motion for Reconsideration of petitioner Enrique Garcia: are denied for lack of merit.
SYLLABUS
1.CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; DELEGATED POWER; CRAFTING
OF STANDARD LIES WITHIN THE EXCLUSIVE JURISDICTION OF CONGRESS. The
choice and crafting of the standard to guide the exercise of delegated power is part of the
lawmaking process and lies within the exclusive jurisdiction of Congress. The standard cannot
be altered in any way by the executive for the Executive cannot modify the will of the Legislature.
2.ID.; ID.; REPUBLIC ACT NO. 8180 (OIL DEREGULATION LAW); 4 % 'TARIFF
DIFFERENTIAL GIVES A DECISIVE EDGE TO EXISTING OIL COMPANIES. This 4% tariff
differential gives a decisive edge to the existing oil companies even as it constitutes a substantial
barrier to the entry of prospective players. We do not agree with the public respondents that
there is no empirical evidence to support this ruling. In the recent hearing of the Senate
Committee on Energy chaired by Senator Freddie Webb, it was established that the 4% tariff

5.ID.; ID.; PREDATORY PRICING; DEFINITION TOO LOOSE TO BE DETERRENT. As

discussed, the provisions of R.A. No. 8180 on tariff differential and minimum inventory erected
high barriers to the entry of prospective players even as they raised their new rivals' costs, thus

112

creating the clear danger that the deregulated market in the downstream oil industry will not
operate under an atmosphere of free and fair competition. It is certain that lack of real
competition will allow the present oil oligopolists to dictate prices, and can entice them to engage
in predatory pricing to eliminate rivals. The fact that R.A. No. 8180 prohibits predatory pricing will
not dissolve-this clear danger. In truth, its definition of predatory pricing is too loose to be a real
deterrent. Following the more effective Areeda-Turner test, Congressman Tinga has proposed to
redefine predatory pricing, viz.: "Predatory pricing means selling or offering to sell any oil product
at a price below the average variable cost for the purpose of destroying competition, eliminating
a competitor or discouraging a competitor from entering the market." In light of its loose
characterization in R.A. 8180 and the law's anti-competitive provisions, we held that the
provision on predatory pricing is constitutionally infirmed for it can be wielded more successfully
by the oil oligopolists. Its cumulative effect is to add to the arsenal of power of the dominant oil
companies.

industry. Our Decision merely faulted the Executive for factoring the depletion of OPSF in
advancing the date of full deregulation to February 1997. Nonetheless, the error of the Executive
is now a non-issue for the full deregulation set by Congress itself at the end of March 1997 has
already come to pass. March 1997 is not an arbitrary date. By that date the transition period has
ended and it was expected that the people would have adjusted to the role of market forces in
shaping the prices of petroleum and its products. The choice of March 1997 as the date of full
deregulation is a judgment of Congress and its judgment call cannot be impugned by this Court.
9.ID.; ID.; ID.; SEPARABILITY CLAUSE; INTENT OF THE LEGISLATURE SHOULD BE
CONSIDERED AND SHOULD NOT CLOTHE VALID PARTS WITH IMMUNITY FROM
INVALIDATING EFFECT OF LAW. We cannot affirm the movants for to determine whether or
not a particular provision is separable, the courts should consider the intent of the legislature. It
is true that most of the time, such intent is expressed in a separability clause stating that the
invalidity or unconstitutionality of any provision or section of the law will not affect the validity or
constitutionality of the remainder. Nonetheless, the separability clause only creates a
presumption that the act is severable. It is merely an aid in statutory construction. It is not an
inexorable command. A separability clause does not clothe the valid parts with immunity from
the invalidating effect the law gives to the inseparable blending of the bad with the good. The
separability clause cannot also be applied if it will produce an absurd result. In sum if the
separation of the statute will defeat the intent of the legislature separation will not take place
despite the inclusion of a separability clause in the law.

6.REMEDIAL LAW; SUPREME COURT; DID NOT REVIEW THE WISDOM OF R.A. NO. 8180
BUT MERELY DISCHARGED ITS BOUNDEN DUTY TO CHECK CONSTITUTIONALITY OF
LAWS. Public respondents insist on their thesis that the cases at bar actually assail the
wisdom of R.A. No. 8180 and that this Court should refrain from examining the wisdom of
legislations. They contend that R.A. No. 8180 involves an economic policy which this Court
cannot review for lack of power and competence. The Court is aware that the principle of
separation of powers prohibits the judiciary from interfering with the policy setting function of the
legislature. For this reason we italicized in our Decision that the Court did not review the wisdom
of R.A. No. 8180 but its compatibility with the Constitution; the Court did not annul the economic
policy of deregulation but vitiated its aspects which offended the constitutional mandate on fair
competition. It is beyond debate that the power of Congress to enact laws does not include the
right to pass unconstitutional laws. In fine, the Court did not usurp the power of Congress to
enact laws but merely discharged its bounden duty to check the constitutionality of laws when
challenged in appropriate cases. Our Decision annulling R.A. No. 8180 is justified by the
principle of checks and balance.

10.ID.; ID.; ID.; ID.; ID.; CASE AT BAR. In the case of Republic Act No. 8180, the
unconstitutionality of the provisions on tariff differential, minimum inventory and predatory pricing
cannot but result in the unconstitutionality of the entire law despite its separability clause. These
provisions cannot be struck down alone for they were the ones intended to carry out the policy of
the law embodied in Section 2 thereof. They actually set the stage for the regime of deregulation
where government will no longer intervene in fixing the price of oil and the operations of oil
companies. It is conceded that the success of deregulation lies in a truly competitive market and
there can be no competitive market without the easy entry and exit of competitors. We held in
our Decision that the provisions on 4% tariff differential, minimum inventory and predatory pricing
are anti-competition, and they are the key provisions of R.A. No. 8180. Without these provisions
in place, Congress could not have deregulated the downstream oil industry. To decree the partial
unconstitutionality of R.A. 8180 will bring about an absurdity a fully deregulated downstream
oil industry where government is impotent to regulate run away prices, where the oil oligopolists
can engage in cartelization without competition, where prospective players cannot come in, and
where new players will close shop.

7.ID., ID., POWER TO PASS UPON CONSTITUTIONALITY LAWS DID NOT EXEMPT LAWS
WITH ECONOMIC DIMENSIONS. We hold that the power and obligation of this Court to pass
upon the constitutionality of laws cannot be defeated by the fact that the challenged law carries
serious economic implications. This Court has struck down laws abridging-the political and civil
rights of our people even if it has to offend the other more powerful branches of government.
There is no reason why the Court cannot strike down R.A. No. 8180 that violates the economic
rights of our people even if it has to bridle the liberty of big business within reasonable
bounds. The Constitution gave this Court the authority to strike down all laws that violate the
Constitution. It did not exempt from the reach of this authority laws with economic dimension.

11.ID.; AN UNCONSTITUTIONAL LAW REVIVES THE LAWS IT HAS REPEALED. It is

sealed jurisprudence that the declaration of a law as unconstitutional revives the laws that it has
repealed. Stated otherwise, an unconstitutional law returns us to the status quo ante and this
return is beyond the power of the Court to stay. Under our scheme of government, however, the
remedy to prevent the revival of all unwanted status quo ante lies with Congress. Congress can
block the revival of the status quo ante or stop its continuation by immediately enacting the

8.CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; R.A. NO. 8180; CHOICE OF DATE

OF FULL DEREGULATION, A JUDGMENT CALL OF CONGRESS WHICH CANNOT BE
IMPUGNED BY THIS COURT. Petitioner has no basis in condemning as unconstitutional per
se the date fixed by Congress for the beginning of the full deregulation of the downstream oil

113

necessary remedial legislation. We emphasize that in the cases at bar, the Court did not
condemn the economic policy of deregulation as unconstitutional. It merely held that as crafted,
the law runs counter to the constitutional provision calling for fair competition. Thus, there is no
impediment in re-enacting R A. No. 8180 minus its provisions which are anti-competition. The
Court agrees that our return to the regime of regulation has pernicious consequences and it
specially sympathizes with the intervenors. Be that as it may, the Court is powerless to prevent
this return just as it is powerless to repeal the 10% tariff, differential of the Tariff Code. It is
Congress that can a give all these remedies.

In their Motion for Reconsideration, the public respondents contend:

I
"Executive Order No. 392 is not a misapplication of Republic Act No.
8180;
II

12.ID.; SUPREME COURT, WITH NO PARTISAN POLITICAL THEOLOGY. When the Court
reviews the constitutionality of a law, it does not deal with the realities of politics nor does it delve
into the mysticism of politics. The Court has no partisan political theology for as an institution it is
at best apolitical, and at worse politically agnostic.

Sections 5(b), 6 and 9(b) of Republic Act No. 8180 do not contravene
section 19, Article XII of the Constitution; and

13.ID.; ID.; WITH THE UNYIELDING DUTY TO UPHOLD THE SUPREMACY OF THE
CONSTITUTION. The Constitution mandates the regulation of monopolies and interdicts
unfair competition. Thus, the Constitution provides a shield to the economic rights of our people,
especially the poor. It is the unyielding duty of this Court to uphold the supremacy of the
Constitution not with a mere wishbone but with a backbone that should neither bend nor break.

Sections 5(b), 6 and 9(b) of R.A. No. 8180 do not permeate the essence
of the said law; hence their nullity will not vitiate the other parts
thereof." llcd

III

In their Motion for Reconsideration, the intervenors argue:

KAPUNAN, J., concurring and dissenting opinion:
"2.1.1The total nullification of Republic Act No. 8180 restores the
disproportionate advantage of the three big oil firms Caltex,
Shell and Petron over the small oil firms;

1.CONSTITUTIONAL LAW; LEGISLATIVE DEPARTMENT; LEGISLATIVE POWER; STATUTES;

SEPARABILITY CLAUSE; CONSTRUED. A separability clause states that if for any reason,
any section or provision of the statute is held to be unconstitutional or (invalid), the other
section(s) or provision(s) of the law shall not be affected thereby. It is a legislative expression of
intent that the nullity of one provision shall not invalidate the other provisions of the act. Such a
clause is not, however, controlling and the courts may, in spite of it, invalidate the whole statute
where what is left, after the void part, is not complete and workable.

2.1.2The total nullification of Republic Act No. 8180 "disarms" the new
entrants and seriously cripples their capacity to compete and
grow; and
2.1.3Ultimately the total nullification of Republic Act No. 8180 removes
substantial, albeit imperfect, barriers to monopolistic practices
and unfair competition and trade practices harmful not only to
movant-intervenors but also to the public in general."

2.ID.; ID.; ID.; ID.; ID.; CASE AT BAR. The three provisions declared void are severable from
the main statute and their removal therefrom would not affect the validity and enforceability of the
remaining provisions of the said law R.A. 8180, sans the constitutionally infirmed portions,
remains "complete in itself, sensible, capable of being executed and wholly independent of
(those) which (are) rejected. In other words, despite the elimination of some of its parts; the law
can still stand on its own.

In his Partial Motion for Reconsideration, 2 petitioner Garcia prays that only the provisions of
R.A. No. 8180 on the 4% tariff differential, predatory pricing and minimum inventory be declared
unconstitutional. He cites the "pernicious effects" of a total declaration of unconstitutionality of
R.A. No. 8180. He avers that "it is very problematic . . . if Congress can fasttrack an entirely new
law."

RESOLUTION
PUNO, J p:

We find no merit in the motions for reconsideration and partial motion for reconsideration.
For resolution are: (1) the motion for reconsideration filed by the public respondents; and (2) the
partial motions for reconsideration filed by petitioner Enrique T. Garcia and the intervenors. 1

114

We shall first resolve public respondents' motion for reconsideration. They insist that there was
no misapplication of Republic Act No. 8180 when the Executive considered the depletion of the
OPSF in advancing the date of full deregulation of the downstream oil industry. They urge that
the consideration of this factor did not violate the rule that the exercise of delegated power must
be done strictly in accord with the standard provided in the law. They contend that the rule
prohibits the Executive from subtracting but not from adding to the standard set by Congress.
This hair splitting is a sterile attempt to make a distinction when there is no difference. The
choice and crafting of the standard to guide the exercise of delegated power is part of the
lawmaking process and lies within the exclusive jurisdiction of Congress. The standard cannot
be altered in any way by the Executive for the Executive cannot modify the will of the Legislature.
To be sure, public respondents do not cite any authority to support its strange thesis for there is
none in our jurisprudence.

tariff differential from the wrong end of the telescope. Our Decision did not hold that the 4% tariff
differential infringed the equal protection clause of the Constitution even as this was contended
by petitioner Tatad. 8Rather, we held that said tariff differential substantially occluded the entry
point of prospective players in the downstream oil industry. We further held that its inevitable
result is to exclude fair and effective competition and to enhance the monopolists' ability to
tamper with the mechanism of a free market. This consideration is basic in anti-trust suits and
cannot be eroded by belaboring the inapplicable principle in taxation that different things can be
taxed differently.
The public respondents tenaciously defend the validity of the minimum inventory requirement.
They aver that the requirement will not prejudice new players ". . . during their first year of
operation because they do not have yet annual sales from which the required minimum inventory
may be determined. Compliance with such requirement on their second and succeeding years of
operation will not be difficult because the putting up of storage facilities in proportion to the
volume of their business becomes an ordinary and necessary business undertaking just as the
case of importers of finished products in other industries." 9 The contention is an old one
although it is purveyed with a new lipstick. The contention cannot convince for as well articulated
by petitioner Garcia, "the prohibitive cost of the required minimum inventory will not be any less
burdensome on the second, third, fourth, etc. years of operations. Unlike most products which
can be imported and stored with facility, oil imports require ocean receiving, storage facilities.
Ocean receiving terminals are already very expensive, and to require new players to put up more
than they need is to compound and aggravate their costs, and consequently their great
disadvantage vis-a-vis the Big 3." 10 Again, the argument on whether the minimum inventory
requirement seriously hurts the new players is best settled by hearing the new players
themselves. In their motion for intervention, they implicitly confirmed that the high cost of
meeting the inventory requirement has an inhibiting effect in their operation and hence, they
support the ruling of this Court striking it down as unconstitutional.

The public respondents next recycle their arguments that sections 5(b), 6 and 9(b) of R.A. No.
8180 do not contravene section 19, Article XII of the Constitution. 3 They reiterate that the 4%
tariff differential would encourage the construction of new refineries which will benefit the country
for they use Filipino labor and goods. We have rejected this submission for a reality check will
reveal that this 4% tariff differential gives a decisive edge to the existing oil companies even as it
constitutes a substantial barrier to the entry of prospective players. We do not agree with the
public respondents that there is no empirical evidence to support this ruling. In the recent
hearing of the Senate Committee on Energy chaired by Senator Freddie Webb, it was
established that the 4% tariff differential on crude oil and refined petroleum importation gives a
20-centavo per liter advantage to the three big oil companies over the new players. It was also
found that said tariff differential serves as a protective shield for the big oil companies. 4 Nor do
we approve public respondents' submission that the entry of new players after deregulation is
proof that the 4% tariff differential is not a heavy disincentive. Acting as the mouthpiece of the
new players, public respondents even lament that "unfortunately, the opportunity to get the
answer right from the 'horses' mouth' eluded this Honorable Court since none of the new players
supposedly adversely affected by the assailed provisions came forward to voice their
position." 5 They need not continue their lamentation. The new players represented by Eastern
Petroleum, Seaoil Petroleum Corporation, Subic Bay Distribution, Inc., TWA Inc., and DubPhil
Gas have intervened in the cases at bar and have spoken for themselves. In their motion for
intervention, they made it crystal clear that it is not their intention ". . . to seek the reversal of the
Court's nullification of the 4% differential insection 5(b) nor of the inventory requirement of
section 6, nor of the prohibition of predatory pricing in section 9(b)." 6 They stressed that they
only protest the restoration of the 10% oil tariff differential under the Tariff Code. 7 The horse's
mouth therefore authoritatively tells us that the new players themselves consider the 4% tariff
differential in R.A. No. 8180 as oppressive and should be nullified.

Public respondents still maintain that the provision on predatory pricing does not offendthe
Constitution. Again, their argument is not fresh though embellished with citations of cases in the
United States sustaining the validity of sales-below-costs statutes. 11 A quick look at these
American cases will show that they are inapplicable. R.A. No. 8180 has a different cast. As
discussed, its provisions on tariff differential and minimum inventory erected high barriers to the
entry of prospective players even as they raised their new rivals' costs, thus creating the clear
danger that the deregulated market in the downstream oil industry will not operate under an
atmosphere of free and fair competition. It is certain that lack of real competition will allow the
present oil oligopolists to dictate prices, 12 and can entice them to engage in predatory pricing to
eliminate rivals. The fact that R.A. No. 8180 prohibits predatory pricing will not dissolve this clear
danger. In truth, its definition of predatory pricing is too loose to be a real deterrent. Thus, one of
the law's principal authors, Congressman Dante O. Tinga filed H.B. No. 10057 where he
acknowledged in its explanatory note that "the definition of predatory pricing . . . needs to be
tightened up particularly with respect to the definitive benchmark price and the specific anticompetitive intent. The definition in the bill at hand which was taken from the Areeda-Turner test
in the United States on predatory pricing resolves the questions." Following the more effective

To give their argument a new spin, public respondents try to justify the 4% tariff differential on the
ground that there is a substantial difference between a refiner and an importer just as there is a
difference between raw material and finished product. Obviously, the effort is made to
demonstrate that the unequal tariff does not violate the equal protection clause of the
Constitution. The effort only proves that the public respondents are still looking at the issue of

115

Areeda-Turner test, Congressman Tinga has proposed to redefine predatory pricing, viz.:
"Predatory pricing means selling or offering to sell any oil product at a price below the average
variable cost for the purpose of destroying competition, eliminating a competitor or discouraging
a competitor from entering the market." 13 In light of its loose characterization in R.A. 8180 and
the law's anti-competitive provisions, we held that the provision on predatory pricing is
constitutionally infirmed for it can be wielded more successfully by the oil oligopolists. Its
cumulative effect is to add to the arsenal of power of the dominant oil companies. For as
structured, it has no more than the strength of a spider web it can catch the weak but cannot
catch the strong; it can stop the small oil players but cannot stop the big oil players from
engaging in predatory pricing.

quarters that a constitutional democracy, in view of its commitment to the

claims of property, would not be able to cope effectively with the problems
of poverty and misery that unfortunately afflict so many of our people, is
not susceptible to the indictment that the government therein established
is impotent to take the necessary remedial measures. The framers saw to
that. The welfare state concept is not alien to the philosophy of
our Constitution. It is implicit in quite a few of its provisions. It suffices to
mention two.
There is the clause on the promotion of social justice to ensure the wellbeing and economic security of all the people, as well as the pledge of
protection to labor with the specific authority to regulate the relations
between landowners and tenants and between labor and capital. This
particularized reference to the rights of working men whether in industry
and agriculture certainly cannot preclude attention to and concern for the
rights of consumers, who are the objects of solicitude in the legislation
now complained of. The police power as an attribute to promote the
common weal would be diluted considerably of its reach and
effectiveness if on the mere pleas that the liberty to contract would be
restricted, the statute complained of may be characterized as a denial of
due process. The right to property cannot be pressed to such an
unreasonable extreme.

Public respondents insist on their thesis that the cases at bar actually assail the wisdom of RA.
No. 8180 and that this Court should refrain from examining the wisdom of legislations. They
contend that R.A. No. 8180 involves an economic policy which this Court cannot review for lack
of power and competence. To start with, no school of scholars can claim any infallibility.
Historians with undefiled learning have chronicled 14 over the years the disgrace of many
economists and the fall of one economic dogma after another. Be that as it may, the Court is
aware that the principle of separation of powers prohibits the judiciary from interfering with the
policy setting function of the legislature. 15 For this reason we italicized in our Decision that the
Court did not review the wisdom of R.A. No. 8180 but its compatibility with the Constitution; the
Court did not annul the economic policy of deregulation but vitiated its aspects which offended
the constitutional mandate on fair competition. It is beyond debate that the power of Congress to
enact laws does not include the right to pass unconstitutional laws. In fine, the Court did not
usurp the power of Congress to enact laws but merely discharged its bounden duty to check the
constitutionality of laws when challenged in appropriate cases. Our Decision annulling R.A. No.
8180 is justified by the principle of check and balance.

It is understandable though why business enterprises, not unnaturally

evincing lack of enthusiasm for police power legislation that affect them
adversely and restrict their profits could predicate alleged violation of their
rights on the due process clause, which as interpreted by them is a bar to
regulatory measures. Invariably, the response from this Court, from the
time the Constitution was enacted, has been far from sympathetic. Thus,
during the Commonwealth, we sustained legislations providing for
collective bargaining, security of tenure, minimum wages, compulsory
arbitration, and tenancy regulation. Neither did the objections as to the
validity of measures regulating the issuance of securities and public
services prevail."

We hold that the power and obligation of this Court to pass upon the constitutionality of laws
cannot be defeated by the fact that the challenged law carries serious economic implications.
This Court has struck down laws abridging the political and civil rights of our people even if it has
to offend the other more powerful branches of the government. There is no reason why the Court
cannot strike down R.A. No. 8180 that violates the economic rights of our people even if it has to
bridle the liberty of big business within reasonable bounds. In Alalayan vs. National Power
Corporation 16 the Court, speaking thru Mr. Chief Justice Enrique M. Fernando, held:

The Constitution gave this Court the authority to strike down all laws that violate the
Constitution. 17 It did not exempt from the reach of this authority laws with economic dimension.
A 20-20 vision will show that the grant by the Constitution to this Court of this all important power
of review is written without any fine print.

"2.Nor is petitioner anymore successful in his plea for the nullification of

the challenged provision on the ground of his being deprived of the liberty
to contract without due process of law.
It is to be admitted of course that property rights find shelter in specific
constitutional provisions, one of which is the due process clause. It is
equally certain that our fundamental law framed at a time of "surging
unrest and dissatisfaction," when there was the fear expressed in many

The next issue is whether the Court should only declare as unconstitutional the provisions of
R.A. No. 8180 on 4% tariff differential, minimum inventory and predatory pricing.

116

Positing the affirmative view, petitioner Garcia proffered the following arguments:

6.3Correspondingly, Congress does not anymore have to pass

a new deregulation law, thus it can immediately concentrate on
just amending R.A.No. 8180 to abolish the OPSF, on the
government's assumption that it is necessary to do so.
Parenthetically, it is neither correct nor fair for high government
officials to criticize and blame the Honorable Court on the
OPSF,considering that said OPSF is not inherent in nor
necessary to the transition period and may be removed at any
time.

"5.Begging the kind indulgence and benign patience of the Court, we

humbly submit that the unconstitutionality of the aforementioned
provisions of R.A. No. 8180 implies that the other provisions are
constitutional. Thus, said constitutional provisions of R.A. No. 8180 may
and can very well be spared.
5.1With the striking down of 'ultimately full deregulation,' we will
simply go back to the transition period under R.A. 8180 which
will continue until Congress enacts an amendatory law for the
start of full oil deregulation in due time, when free market forces
are already in place. In turn, the monthly automatic price
control mechanism based on Singapore Posted Prices
(SPP)will be revived. The Energy Regulatory Board (ERB),
which still exists, would re-acquire jurisdiction and would easily
compute the monthly price ceiling, based on SPP, of each and
every petroleum fuel product, effective upon finality of this
Court's favorable resolution on this motion for partial
reconsideration.

6.4In as much as R.A. No. 8180 would continue to be in place

(sans its unconstitutional provisions), only the Comprehensive
Tax Reform Package (CTRP) would be needed for the country
to exit from IMF by December 1997.
7.The Court, in declaring the entire R.A. No. 8180 unconstitutional, was
evidently expecting that Congress "can fasttrack the writing of a new law
on oil deregulation in accord with the Constitution" (Decision, p. 38).
However, it is very problematic, to say the least, if Congress can fasttrack
an entirely new law.

5.2Best of all, the oil deregulation can continue uninterrupted

without the three other assailed provisions, namely, the 4%
tariff differential, predatory pricing and minimum inventory.

7.1There is already limited time for Congress to pass such a

new law before it adjourns for the 1998 elections.
7.2At the very least, whether or not Congress will be able to
fasttrack the enactment of a new oil deregulation law consistent
with the Honorable Court's ruling, would depend on many
unforseeable and uncontrollable factors. Already, several
statements from legislators, senators and congressmen alike,
say that the new law can wait because of other pending
legislative matters, etc. Given the "realities" of politics,
especially with the 1998 presidential polls six months away, it is
not far-fetched that the general welfare could be sacrificed to
gain political mileage, thus further unduly delaying the
enactment of a new oil deregulation law.

6.We further humbly submit that a favorable resolution on this motion for
partial reconsideration would be consistent with public interest.
6.1In consequence, new players that have already come in can
uninterruptedly continue their operations more competitively
and bullishly with an even playing field.
6.2Further, an even playing field will attract many more new
players to come in a much shorter time.

8.Furthermore, if the entire R.A. No. 8180 remains nullified as

unconstitutional,pernicious effects will happen:
8.1Until the new oil deregulation law is enacted, we would have
to go back to the old law. This means full regulation, i.e., higher
tariff differential of 10%, higher petroleum product price ceilings
based on transfer prices of imported crude oil, and restrictions

117

on the importation of refined petroleum products that would be

allowed only if there are shortages, etc.
8.2In consequence of the above, the existing
players, would have to totally stop their operations.

"1.There will be bigger price adjustments in petroleum products due to (a)

the reimposition of the higher tariff rates for imported crude oil
and imported refined petroleum products [10%-20%], (b) the
uncertainty regarding R.A. 8184, or the "Oil Tariff Law," which
simplified tax administration by lowering the tax rates for
socially-sensitive products such as LPG, diesel, fuel oil and
kerosene, and increasing tax rates of gasoline products which
are used mostly by consumers who belong to the upper income
group, and (c) the issue of wiping out the deficit of P2.6 billion
and creating a subsidy fund in the Oil Price Stabilization Fund;

new

8.3The existing new players would find themselves in a bind on

how to fulfill their contractual obligations, especially on their
delivery commitments of petroleum fuel products. They will be
in some sort of "limbo" upon the nullification of the entire
R.A. No. 8180.

2.Importers, traders, and industrial end-users like the National Power

Corporation will be constrained to source their oil requirement
only from existing oil companies because of the higher tariff on
imported refined petroleum products and restrictions on such
importation that would be allowed only if there are shortages;

8.4The investments that existing new players have already

made would become idle and unproductive. All their planned
additional investments would be put on hold.
8.5Needless to say, all this would translate into tremendous
losses for them.

3.Government control and regulation of all the activities of the oil industry
will discourage prospective investors and drive away the
existing new players;

8.6And obviously, prospective new players cannot and will not

come in.

4.All expansion and investment programs of the oil companies and new
players will be shelved indefinitely;

8.7On top of everything, public interest will suffer. Firstly, the oil
deregulation program will be delayed. Secondly, the prices of
petroleum products will be higher because of price ceilings
based on transfer imported crude.

5.Petitions for price adjustments should be filed and approved by the

ERB."

9.When it passed R.A. No. 8180, Congress provided a safeguard against

the possibility that any of its provisions could be declared unconstitutional,
thus the separability clause thereof, which the Court noted (Decision, p.
29). We humbly submit that this is another reason to grant the motion for
partial reconsideration.

Joining the chorus, the intervenors contend that:

"2.1.1The total nullification of Republic Act No. 8180 restores the
disproportionate advantage of the three big oil firms Caltex, Shell and
Petron over the small oil firms;

In his Supplement to Urgent Motion for Partial Reconsideration, petitioner Garcia amplified his
contentions.

2.1.2The total nullification of Republic Act No. 8180 "disarms" the new
entrants and seriously cripples their capacity to compete and grow; and

In a similar refrain, the public respondents contend that the "unmistakable intention of Congress"
is to make each and every provision of RA. No. 8180 "independent and separable from one
another." To bolster this proposition, they cite the separability clause of the law and the pending
bills in Congress proposing to repeal said offensive provisions but not the entire law itself. They
also recite the "inevitable consequences of the declaration of unconstitutionality of R.A. No.
8180" as follows:

2.1.3Ultimately, the total nullification of Republic Act No. 8180 removes

substantial, albeit imperfect, barriers to monopolistic practices and unfair
competition and trade practices harmful not only to movant-intervenors
but also to the public in general."

118

The intervenors further aver that under a regime of regulation, (1) the big oil firms
can block oil importation by the small oil firms; (2) the big oil firms can block the expansion
and growth of the small oil firms. They likewise submit that the provisions on tariff
differential, minimum inventory, and predatory pricing are separable from the body of R.A.
No. 8180 because of its separability clause. They also allege that their separability is
further shown by the pending bills in Congress which only seek the partial repeal of R.A.
No. 8180.

In the case of Republic Act No. 8180, the unconstitutionality of the provisions on tariff differential,
minimum inventory and predatory pricing cannot but result in the unconstitutionality of the entire
law despite its separability clause. These provisions cannot be struck down alone for they were
the ones intended to carry out the policy of the law embodied in section 2 thereof which reads:
Sec. 2.Declaration of Policy. It shall be the policy of the State to
deregulate the downstream oil industry to foster a truly competitive market
which can better achieve the social policy objectives of fair prices and
adequate, continuous supply of environmentally-clean and high-quality
petroleum products.

We shall first resolve petitioner Garcia's linchpin contention that the full deregulation decreed by
R.A. No. 8180 to start at the end of March 1997 is unconstitutional. For prescinding from this
premise, petitioner suggests that "we simply go back to the transition period under R.A. No.
8180. Under the transition period, price control will be revived through the automatic pricing
mechanism based on Singapore Posted Prices. The Energy Regulatory Board . . . would play a
limited and ministerial role of computing the monthly price ceiling of each and every petroleum
fuel product, using the automatic pricing formula. While the OPSF would return, this coverage
would be limited to monthly price increases in excess of P0.50 per liter."

They actually set the stage for the regime of deregulation where government will no longer
intervene in fixing the price of oil and the operations of oil companies. It is conceded that the
success of deregulation lies in a truly competitive market and there can be no competitive market
without the easy entry and exit of competitors. No less thanPresident Fidel V. Ramos recognized
this matrix when he declared that the need is to ". . . recast our laws on trust, monopolies,
oligopolies, cartels and combinations injurious to public welfare to restore competition where it
has disappeared and to preserve it where it still exists. In a word, we need to perpetuate
competition as a system to regulate the economy and achieve global product quality." 21

We are not impressed by petitioner Garcia's submission. Petitioner has no basis in condemning
as unconstitutional per se the date fixed by Congress for the beginning of the full deregulation of
the downstream oil industry. Our Decision merely faulted the Executive for factoring the depletion
of OPSF in advancing the date of full deregulation to February 1997. Nonetheless, the error of
the Executive is now a non-issue for the full deregulation set by Congress itself at the end of
March 1997 has already come to pass. March 1997 is not an arbitrary date. By that date, the
transition period has ended and it was expected that the people would have adjusted to the role
of market forces in shaping the prices of petroleum and its products. The choice of March 1997
as the date of full deregulation is a judgment of Congress and its judgment call cannot be
impugned by this Court.

We held in our Decision that the provisions on 4% tariff differential, minimum inventory and
predatory pricing are anti-competition, and they are the key provisions of R.A. No. 8180. Without
these provisions in place, Congress could not have deregulated the downstream oil industry.
Consider the 4% tariff differential on crude oil and refined petroleum. Before R.A. No.
8180, 22 there was a ten-point difference between the tariff imposed on crude oil and that on
refined petroleum. Section 5(b) of R.A. No. 8180 lowered the difference to four by imposing a 3%
tariff on crude oil and a 7% tariff on refined petroleum. We ruled, however, that this reduced tariff
differential is unconstitutional for it still posed a substantial barrier to the entry of new players and
enhanced the monopolistic power of the three existing oil companies. The ruling that the 4%
differential is unconstitutional will unfortunately revive the 10% tariff differential of the Tariff and
Customs Code. The high 10% tariff differential will certainly give a bigger edge to the three
existing oil companies, will form an insuperable barrier to prospective players, and will drive out
of business the new players. Thus, there can be no question that Congress will not allow
deregulation if the tariff is 10% on crude oil and 20% on refined petroleum. To decree the partial
unconstitutionality of R.A. No. 8180 will bring about an absurdity a fully deregulated
downstream oil industry where government is impotent to regulate run away prices, where the oil
oligopolists can engage in cartelization without competition, where prospective players cannot
come in, and where new players will close shop. LLjur

We come to the submission that the provisions on 4% tariff differential, minimum inventory and
predatory pricing are separable from the body of R.A. No. 8180, and hence, should alone be
declared as unconstitutional. In taking this position, the movants rely heavily on the separability
provision of R.A. No. 8180. We cannot affirm the movants for to determine whether or not a
particular provision is separable, the courts should consider the intent of the legislature. It is true
that most of the time, such intent is expressed in a separability clause stating that the invalidity or
unconstitutionality of any provision or section of the law will not affect the validity or
constitutionality of the remainder. Nonetheless, the separability clause only creates
a presumption that the act is severable.It is merely an aid in statutory construction. It is not an
inexorable command. 18 A separability clause does not clothe the valid parts with immunity from
the invalidating effect the law gives to the inseparable blending of the bad with the good. The
separability clause cannot also be applied if it will produce an absurd result. 19 In sum, if the
separation of the statute will defeat the intent of the legislature, separation will not take place
despite the inclusion of a separability clause in the law. 20

We also reject the argument that the bills pending in Congress merely seek to remedy the partial
defects of R.A. No. 8180, and that this is proof that R.A. No. 8180 can be declared
unconstitutional minus its offensive provisions. We referred to the pending bills in Congress in
our Decision only to show that Congress itself is aware of the various defects of the law and not
to prove the inseparability of the offending provisions from the body of R.A. No. 8180. To be

119

sure, movants even overlooked the fact that resolutions have been filed in both Houses of
Congress calling for a total review of R.A. No. 8180.

levels the playing field for foreign investors as against the three dominant oil oligopolists. No less
than the influential Philippine Chamber of Commerce and Industry whose motive is beyond
question, stated thru its Acting President Jaime Ladao that ". . . this Decision, in fact tells us that
we are for honest-to-goodness competition." Our Decision should be a confidence booster to
foreign investors for it assures them of an effective judicial remedy against an unconstitutional
law. There is need to attract foreign investment but the policy has never been foreign investment
at any cost. We cannot trade-in the Constitution for foreign investment. It is not economic heresy
to hold that trade-in is not a fair exchange.

The movants warn that our Decision will throw us back to the undesirable regime of regulation.
They emphasize its pernicious consequences the revival of the 10% tariff differential which
will wipe out the new players, the return of the OPSF which is too burdensome to government,
the unsatisfactory scheme of price regulation by the ERB, etc. To stress again, it is not the will of
the Court to return even temporarily to the regime of regulation. If we return to the regime of
regulation, it is because it is the inevitable consequence of the enactment by Congress of an
unconstitutional law, R.A. No. 8180. It is settled jurisprudence that the declaration of a law as
unconstitutional revives the laws that it has repealed. Stated otherwise, an unconstitutional law
returns us to the status quo ante and this return is beyond the power of the Court to stay. Under
our scheme of government, however, the remedy to prevent the revival of an unwanted status
quo ante lies with Congress. Congress can block the revival of the status quo ante or stop its
continuation by immediately enacting the necessary remedial legislation. We emphasize that in
the cases at bar, the Court did not condemn the economic policy of deregulation as
unconstitutional. It merely held that as crafted, the law runs counter to the constitutional
provision calling for fair competition. 23 Thus, there is no impediment in re-enacting R.A. No.
8180 minus its provisions which are anti-competition. The Court agrees that our return to the
regime of regulation has pernicious consequences and it specially sympathizes with the
intervenors. Be that as it may, the Court is powerless to prevent this return just as it is powerless
to repeal the 10% tariff differential of the Tariff Code. It is Congress that can give all these
remedies. 24

To recapitulate, our Decision declared R.A. No. 8180 unconstitutional for three reasons: (1) it
gave more power to an already powerful oil oligopoly; (2) it blocked the entry of effective
competitors; and (3) it will sire an even more powerful oligopoly whose unchecked power will
prejudice the interest of the consumers and compromise the general welfare.
A weak and developing country like the Philippines cannot risk a downstream oil industry
controlled by a foreign oligopoly that can run riot. Oil is our most socially sensitive commodity
and for it to be under the control of a foreign oligopoly without effective competitors is a clear and
present danger. A foreign oil oligopoly can undermine the security of the nation; it can exploit the
economy if greed becomes its creed; it will have the power to drive the Filipino to a prayerful
pose. Under a deregulated regime, the people's only hope to check the overwhelming power of
the foreign oil oligopoly lies on a market where there is fair competition. With prescience, the
Constitution mandates the regulation of monopolies and interdicts unfair competition. Thus, the
Constitutionprovides a shield to the economic rights of our people, especially the poor. It is the
unyielding duty of this Court to uphold the supremacy of the Constitution not with a mere
wishbone but with a backbone that should neither bend nor break.

Petitioner Garcia, however, injects a non-legal argument in his motion for partial reconsideration.
He avers that "given the 'realities' of politics, especially with the 1998 presidential polls six
months away, it is not far-fetched that the general welfare could be sacrificed to gain political
mileage, thus further unduly delaying the enactment of a new oil deregulation law." The short
answer to petitioner Garcia's argument is that when the Court reviews the constitutionality of a
law, it does not deal with the realities of politics nor does it delve into the mysticism of politics.
The Court has no partisan political theology for as an institution it is at best apolitical, and at
worse, politically agnostic. In any event, it should not take a long time for Congress to enact a
new oil deregulation law given its interest for the welfare of our people. Petitioner Garcia himself
has been quoted as saying that ". . . with the Court's decision, it would now be easy for
Congress to craft a new law, considering that lawmakers will be guided by the Court's
points." 25 Even before our Decision, bills amending the offensive provisions of R.A. No. 8180
have already been filed in the Congress and under consideration by its committees. Speaker
Jose de Venecia has assured after a meeting of the Legislative-Executive Advisory Council
(LEDAC) that: "I suppose before Christmas, we should be able to pass a new oil deregulation
law." 26 The Chief Executive himself has urged the immediate passage of a new and better oil
deregulation law. 27

IN VIEW WHEREOF, the Motions for Reconsideration of the public respondents and of the
intervenors as well as the Partial Motion for Reconsideration of petitioner Enrique Garcia are
DENIED for lack of merit.
SO ORDERED.
Regalado, Davide, Jr., Romero, Bellosillo, Vitug, Mendoza and Panganiban, JJ ., concur.
Narvasa, C .J ., took no part; on official leave when the case was deliberated.
Martinez, J ., took no part; not yet a member of the Court when the case was deliberated.
Francisco and Melo, JJ ., maintain their dissent.
||| (Tatad v. Sec. of Department of Energy, G.R. No. 124360, 127867 (Resolution), [December 3,
1997], 347 PHIL 1-38)

Finally, public respondents raise the scarecrow argument that our Decision will drive away
foreign investors. In response to this official repertoire, suffice to state that our Decision precisely

120

RAUL
S.
ROCO and
the
INTEGRATED
BAR OF THE
PHILIPPINES, petitioners,vs.
THE SECRETARY OF THE
DEPARTMENT OF FINANCE;
THE
COMMISSIONERS OF THE
BUREAU OF INTERNAL
REVENUE
AND
BUREAUOF CUSTOMS, respondents.
[G.R. No. 115544. October 30, 1995.]
PHILIPPINE PRESS INSTITUTE, INC.; EGP PUBLISHING CO., INC.;
KAMAHALAN
PUBLISHING
CORPORATION;
PHILIPPINE
JOURNALISTS, INC.; JOSE L. PAVIA; and OFELIA L.
DIMALANTA, petitioners, vs. HON. LIWAYWAY V. CHATO, in her
capacity as Commissioner of Internal Revenue; HON. TEOFISTO T.
GUINGONA, JR., in his capacity as ExecutiveSecretary; and HON.
ROBERTO
B.
DE
OCAMPO,
in
his
capacity
asSecretary of Finance, respondents.
[G.R. No. 115754. October 30, 1995.]
CHAMBER OF REAL ESTATE AND BUILDERS ASSOCIATIONS, INC.,
(CREBA),petitioner, vs.
THE
COMMISSIONER OF INTERNAL
REVENUE, respondent.
[G.R. No. 115781. October 30, 1995.]

EN BANC

KILOSBAYAN, INC., JOVITO R. SALONGA, CIRILO A. RIGOS, ERME

CAMBA, EMILIO C. CAPULONG, JR., JOSE T. APOLO, EPHRAIM
TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE, CHRISTINE
TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO, RAOUL V.
VICTORINO,
JOSE
CUNANAN,
QUINTIN
S.
DOROMAL,
MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY
AND NATIONALISM, INC. ("MABINI"), FREEDOM FROM DEBT
COALITION, INC., and PHILIPPINE BIBLE SOCIETY, INC. and
WIGBERTO TAADA, petitioners, vs. THE EXECUTIVE SECRETARY,
THE SECRETARY OFFINANCE, THE COMMISSIONER OF INTERNAL
REVENUE
and
THE
COMMISSIONER OF CUSTOMS, respondents. CDta

[G.R. No. 115455. October 30, 1995.]

ARTURO
M. TOLENTINO, petitioner, vs. THE SECRETARY OF FINANCE and
THE COMMISSIONER OF INTERNAL REVENUE, respondents. cdll
[G.R. No. 115525. October 30, 1995.]
JUAN T. DAVID, petitioner, vs. TEOFISTO T. GUINGONA, JR., as
ExecutiveSecretary;
ROBERTO
DE
OCAMPO,
as Secretary of Finance;
LIWAYWAY
VINZONS-CHATO,
as
Commissioner of Internal Revenue; and their AUTHORIZED AGENTS
OR REPRESENTATIVES, respondents.

[G.R. No. 115852. October 30, 1995.]

[G.R. No. 115543. October 30, 1995.]

121

form. S. No. 1630, as a substitute measure, is therefore as much an amendment of H. No.

11197 as any which the Senate could have made. In point of fact, in several instances the
provisions of S. No. 1630, clearly appear to be mere amendments of the corresponding
provisions of H. No. 11197. The very tabular comparison of the provisions thereof, while showing
differences between the two bills, at the same time indicates that the provisions of the Senate bill
were precisely intended to be amendments to the House bill. Without H. No. 11197, the Senate
could not have enacted S. No. 1630. Because the Senate bill was a mere amendment of the
House bill, H. No. 11197 in its original form did not have to pass the Senate on second and third
readings. It was enough that after it was passed on first reading it was referred to the Senate
Committee on Ways and Means. Neither was it required that S. No. 1630 be passed by the
House of Representatives before the two bills could be referred to the Conference Committee.

PHILIPPINE
AIRLINES,
INC., petitioner, vs.
THE SECRETARY OF FINANCEand COMMISSIONER OF INTERNAL
REVENUE, respondents.
[G.R. No. 115873. October 30, 1995.]
COOPERATIVE UNION OF THE PHILIPPINES, petitioner, vs. HON.
LIWAYWAY V.
CHATO,
in
her
capacity
as
the
Commissioner of Internal Revenue, HON. TEOFISTO T. GUINGONA,
JR., in his capacity as ExecutiveSecretary, and HON. ROBERTO B.
DE
OCAMPO,
in
his
capacity
asSecretary of Finance, respondents. cdlex

2. ID.; ID.; PRESIDENT'S CERTIFICATION IN RELATION TO THE REQUIREMENT OF THREE

READINGS ON SEPARATE DAYS BEFORE A BILL BECOMES A LAW; CASE AT BAR. The
President's certification had to be made of the version of the same revenue bill which at the
moment was being considered. It is enough that he certifies the bill which, at the time he makes
the certification, is under consideration. Since on March 22, 1994 the Senate was considering S.
No. 1630, it was that bill which had to be certified. For that matter on June 1, 1993 the President
had earlier certified H. No. 9210 for immediate enactment because it was the one which at that
time was being considered by the House. This bill was later substituted, together with other bills,
by H. No. 11197. As to what Presidential certification can accomplish, we have already
explained in the main decision that the phrase "except when the President certifies to the
necessity of its immediate enactment, etc." in Art. VI, 26 (2) qualifies not only the requirement
that "printed copies [of a bill] in its final form [must be] distributed to the members three days
before its passage" but also the requirement that before a bill can become a law it must have
passed "three readings on separate days." There is not only textual support for such construction
but historical basis as well. This exception is based on the prudential consideration that if in all
cases three readings on separate days are required and a bill has to be printed in final form
before it can be passed, the need for a law may be rendered academic by the occurrenceof the
very emergency or public calamity which it is meant to address. The members ofthe Senate
(including some of the petitioners in these cases) believed that there was an urgent need for
consideration of S. No. 1630, because they responded to the call of the President by voting on
the bill on second and third readings on the same day. While the judicial department is not
bound by the Senate's acceptance of the President's certification, the respect due coequal
departments of the government in matters committed to them by the Constitution and the
absence of a clear showing of grave abuseof discretion caution a stay of the judicial hand. At
any rate, we are satisfied that S. No. 1630 received thorough consideration in the Senate where
it was discussed for six days. Only its distribution in advance in its final printed form was actually
dispensed with by holding the voting on second and third readings on the same day (March 24,
1994). Otherwise, sufficient time between the submission of the bill on February 8, 1994 on
second reading and its approval on March 24, 1994 elapsed before it was finally voted on by the
Senate on third reading. The purpose for which three readings on separate days is required is
said to be two-fold: (1) to inform the members of Congress of what they must vote on and (2) to
give them notice that a measure is progressing through the enacting process, thus enabling

[G.R. No. 115931. October 30, 1995.]

PHILIPPINE EDUCATIONAL PUBLISHERS ASSOCIATION, INC. and
ASSOCIATION OF PHILIPPINE BOOK SELLERS, petitioners, vs. HON.
ROBERTO B. DE OCAMPO, as the Secretary of Finance; HON.
LIWAYWAYV. CHATO, as the Commissioner of Internal Revenue; and
HON. GUILLERMO PARAYNO, JR., in his capacity as the
Commissioner ofCustoms, respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; LEGISLATURE; POWER OF THE SENATE TO PROPOSE
AMENDMENTS TO REVENUE BILLS; S. NO. 1630 AS A SUBSTITUTE MEASURE TO H. NO.
11197. The enactment of S. No. 1630 is not the only instance in which the Senate, in the
exercise of its power to propose amendments to bills required to originate in the House, passed
its own version of a House revenue measure. Art. VI, 24 of our Constitutionreads: All
appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local
application, and private bills shall originate exclusively in the House ofRepresentatives, but the
Senate may propose or concur with amendments. The power ofthe Senate to propose
amendments must be understood to be full, plenary and complete "as on other Bills." Because
revenue bills are required to originate exclusively in the Houseof Representatives, the Senate
cannot enact revenue measures of its own without such bills. After a revenue bill is passed and
sent over to it by the House, however, the Senate certainly can pass its own version on the same
subject matter. This follows from the coequality of the two chambers of Congress. The provision
"but the Senate may propose or concur with amendments" means the Senate may propose an
entirely new bill as a substitute measure. To except from the procedure (Re: bill referred to a
committee) the amendment of bills which are required to originate in the House by prescribing
that the number of the House bill and its other parts up to the enacting clause must be preserved
although the text of the Senate amendment may be incorporated in place of the original
body of the bill is to insist on a mere technicality. At any rate there is no rule prescribing this

122

them and others interested in the measure to prepare their positions with reference to it. These
purposes were substantially achieved in the case ofR.A. No. 7716.

4. ID.; ID.; RA 7716 (EXPANDED VALUE-ADDED-TAX [VAT] LAW); REQUIREMENT THAT BILL
SHALL EMBRACE ONLY ONE (1) SUBJECT EXPRESSED IN THE TITLE THEREOF, NOT
VIOLATED IN CASE AT BAR; AMENDMENT OF SEC. 103 OF THE NATIONAL INTERNAL
REVENUE CODE EXEMPTING THE PHILIPPINE AIRLINES (PAL) AND OTHERS FROM
PAYING VAT EXPRESSED IN RA 7716, SUFFICIENT; SEPARATE STATEMENT AMENDING
FRANCHISE, NOT NECESSARY. Art. VI, 26 (1) of the Constitution provides that "Every bill
passed by Congress shall embrace only one subject which shall be expressed in the title
thereof." PAL contends that the amendment of its franchise by the withdrawal of its exemption
from the VAT is not expressed in the title of R.A. No. 7716. PAL was exempted from the
payment of the VAT along with other entities by 103 of the National Internal Revenue Code.
Now, R.A. No. 7716 seeks to withdraw certain exemptions, including that granted to PAL, by
amending 103. Such amendment of 103 is expressed in the title of R.A. No. 7716. Congress
thereby clearly expresses its intention to amend any provision of the NIRC which stands in the
way of accomplishing the purpose of the law. PAL asserts that the amendment of its franchise
must be reflected in the title of the law by specific reference to P.D. No. 1590. It is unneccesary
to do this in order to comply with the constitutional requirement, since it is already stated in the
title that the law seeks to amend the pertinent provisions of the NIRC, among which is 103(q),
in order to widen the base ofthe VAT. Actually, it is the bill which becomes a law that is required
to express in its title the subject of legislation. The titles of H. No. 11197 and S. No. 1630 in fact
specifically referred to 103 of the NIRC as among the provisions sought to be amended. We
are satisfied that sufficient notice had been given of the pendency of these bills in Congress
before they were enacted into what is now R.A. No. 7716. CDta

3. ID.; ID.; CONFERENCE COMMITTEE; CLOSE-DOOR MEETING; CONSTITUTIONAL RIGHT

TO KNOW, NOT VIOLATED THEREOF IN LIEU OF REPORT SUBMITTED BY THE
COMMITTEE. The public's right to know was fully served because the Conference Committee
in this case submitted a report showing the changes made on the differing versions of the House
and the Senate. These changes are shown in the bill attached to the Conference Committee
Report. The members of both houses could thus ascertain what changes had been made in the
original bills without the need of a statement detailing the changes. Nor is there any doubt about
the power of a conference committee to insert new provisions as long as these are germane to
the subject of the conference. As this Court held in Philippine Judges Association v. Prado, 227
SCRA 703 (1993), in an opinion written by then Justice Cruz, the jurisdiction of the conference
committee is not limited to resolving differences between the Senate and the House. It may
propose an entirely new provision. What is important is that its report is subsequently approved
by the respective houses of Congress. This Court ruled that it would not entertain allegations
that, because new provisions had been added by the conference committee, there was thereby a
violation of the constitutional injunction that "upon the last reading of a bill, no amendment
thereto shall be allowed." At all events, under Art. VI, 16(3) each house has the power "to
determine the rules of its proceedings," including those of its committees. Any meaningful
change in the method and procedures of Congress or its committees must therefore be sought in
that body itself.

5. ID.; ID.; ID.; TAXATION AND FREEDOM OF THE PRESS, ELABORATED. As a general
proposition, the press is not exempt from the taxing power of the State and that what the
constitutional guarantee of free press prohibits are laws which single out the press or target a
group belonging to the press for special treatment or which in any way discriminate against the
press on the basis of the content of the publication, and R.A. No. 7716 is none of these. Since
the law granted the press a privilege, the law could take back the privilege anytime without
offense to the Constitution. The reason is simple: by granting exemptions, the State does not
forever waive the exercise of its sovereign prerogative. Indeed, in withdrawing the exemption, the
law merely subjects the press to the same tax burden to which other businesses have long ago
been subject. And VAT is not a license tax. It is not a tax on the exercise of a privilege, much
less a constitutional right. It is imposed on the sale, barter, lease or exchange of goods or
properties or the sale or exchange of services and the lease of properties purely for revenue
purposes. To subject the press to its payment is not to burden the exercise of its right any more
than to make the press pay income tax or subject it to general regulation is not to violate its
freedom under the Constitution.
6. ID.; ID.; ID.; TAXATION AND FREEDOM OF RELIGION IN CASE AT BAR. The Philippine
Bible Society, Inc. claims that although it sells bibles, the proceeds derived from the sales are
used to subsidize the cost of printing copies which are given free to those who cannot afford to
pay so that to tax the sales would be to increase the price, while reducing the volume of sale.
Granting that to be the case, the resulting burden on the exercise of religious freedom is so

123

incidental as to make it difficult to differentiate it from any other economic imposition that might
make the right to disseminate religious doctrines costly. The registration fee imposed by
107 of the NIRC, as amended by 7 ofR.A. No. 7716, although fixed in amount, is really just to
pay for the expenses ofregistration and enforcement of provisions such as those relating to
accounting in 108 ofthe NIRC. That the PBS distributes free bibles and therefore is not liable to
pay the VAT does not excuse it from the payment of this fee because it also sells some copies.
At any rate whether the PBS is liable for the VAT must be decided in concrete cases, in the event
it is assessed this tax by the Commissioner of Internal Revenue.

stores are consequently exempt from its application. Likewise exempt from the tax are
sales of farm and marine products, so that the costs of basic food and other necessities, spared
as they are from the incidence of the VAT, are expected to be relatively lower and within the
reach of the general public.
9. ID.; ID.; ID.; VAT IS AN INDIRECT AND REGRESSIVE TAX WHICH IS NOT ACTUALLY
PROHIBITED BY THE CONSTITUTION. The Constitution does not really prohibit the
imposition of indirect taxes which, like the VAT, are regressive. What it simply provides is that
Congress shall "evolve a progressive system of taxation." The constitutional provision has been
interpreted to mean simply that "direct taxes are . . . to be preferred [and] as much as possible,
indirect taxes should be minimized." Indeed, the mandate to Congress is not to prescribe, but
to evolve, a progressive tax system. Sales taxes, are form ofindirect taxes, and they are also
regressive. Resort to indirect taxes should be minimizedbut not avoided entirely because it is
difficult, if not impossible, to avoid them by imposing such taxes according to the taxpayers'
ability to pay. In the case of the VAT, the law minimizes the regressive effects of this imposition
by providing for zero rating of certain transactions (R.A. No. 7716, 3, amending 102 (b) of the
NIRC), while granting exemptionsto other transactions. (R.A. No. 7716, 4, amending
103 of the NIRC) Transactions involving basic and essential goods and services are exempted
from the VAT. On the other hand, the transactions which are subject to the VAT are those which
involve goods and services which are used or availed of mainly by higher income groups.

7. ID.; ID.; ID.; TAXATION AND NON-IMPAIRMENT OF CONTRACTS. "Authorities from

numerous sources are cited by the plaintiffs, but none of them show that a lawful tax on a new
subject, or an increased tax on an old one, interferes with a contract or impairs its obligation,
within the meaning of the Constitution. Even though such taxation may affect particular
contracts, as it may increase the debt of one person and lessen the security ofanother, or may
impose additional burdens upon one class and release the burdens ofanother, still the tax must
be paid unless prohibited by the Constitution, nor can it be said that it impairs the
obligation of any existing contract in its true legal sense." Indeed not only existing laws but also
"the reservation of the essential attributes of sovereignty, is . . . read into contracts as a
postulate of the legal order." Contracts must be understood as having been made in reference to
the possible exercise of the rightful authority of the government and no obligation of contract can
extend to the defeat of that authority.

10. ID.; JUDICIARY; JUDICIAL POWER; CASE MUST BE ACTUAL FOR ADJUDICATION.
CREBA's petition claims constitutional violations at wholesale and in the abstract. There is no
fully developed record which can impart to adjudication the impact of actuality. There is no
factual foundation to show in the concrete the application of the law to actual contracts and
exemplify its effect on property rights. A test case may be presented provided, it is an actual
case and not an abstract or hypothetical one. Our duty under Art. VIII, 1 (2) to decide
whenever a claim is made that "there has been a grave abuse ofdiscretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality of the government" can only
arise if an actual case or controversy is before us.

8. ID.;
ID.;
ID.;
ON
REAL
ESTATE
TRANSACTIONS;
EQUALITY
AND
UNIFORMITY OFTAXATION; VALIDITY OF VAT. CREBA claims that real estate
transactions of "the less poor," i.e., the middle class, who are equally homeless, should be
exempted. There is a difference between the "homeless poor" and the "homeless less poor" in
the example given by petitioner, because the second group or middle class can afford to rent
houses in the meantime that they cannot yet buy their own homes. The two social classes are
thus differently situated in life. "It is inherent in the power to tax that the State be free to select
the subjects of taxation, and it has been repeatedly held that 'inequalities which result from a
singling out of one particular class for taxation, or exemption infringe no constitutional limitation.'"
Equality and uniformity of taxation means that all taxable articles or kinds of property of the
same class be taxed at the same rate. The taxing power has the authority to make reasonable
and natural classifications for purposes of taxation. To satisfy this requirement it is enough that
the statute or ordinance applies equally to all persons, forms and corporations placed in similar
situation. Indeed, the VAT was already provided in E.O. No. 273 long before R.A. No. 7716 was
enacted. R.A. No. 7716 merely expands the base of the tax. The validity of the original VAT
Law was questioned on grounds similar to those made in these cases, namely, that the law was
"oppressive,
discriminatory,
unjust
and
regressive
in
violation of Art.
VI,

28(1) of the Constitution." This Court held: EO 273 satisfies all the requirements of a valid tax. It
is uniform. . . . The sales tax adopted in EO 273 is applied similarly on all goods and services
sold to the public, which are not exempt, at the constant rate of 0% or 10%. The disputed sales
tax is also equitable. It is imposed only on sales of goods or services by persons engaged in
business with an aggregate gross annual sales exceeding P200,000.00. Small corner sari-sari

11. ID.;
LEGISLATION; RA
NO.
7716;
ON
COOPERATIVES;
NO
VIOLATION OFCONSTITUTIONAL POLICY TOWARDS THE SAME SIMPLY BECAUSE TAX
EXEMPTION WAS NOT GRANTED. The Constitution does not require that cooperatives be
granted tax exemptions in order to promote their growth and viability. There is no basis for
petitioner's assertion that the government's policy toward cooperatives had been
one ofvacillation, as far as the grant of tax privileges was concerned, and that it was to put an
end to this indecision that the constitutional provisions under Art. XII, 1 and 15 were adopted.
Perhaps as a matter of policy cooperatives should be granted tax exemptions, but that is left to
the discretion of Congress. If Congress does not grant exemption and there is no discrimination
to cooperatives, no violation of any constitutional policy can be charged. That electric
cooperatives are exempted from the VAT, We say: The classification between electric and other
cooperatives apparently rests on a congressional determination that there is greater need to
provide cheaper electric power to as many people as possible, especially those living in the rural

124

areas, than there is to provide them with other necessities in life. We cannot say that such
classification is unreasonable.

Senate did was to pass its own version (S. No. 1630) which it approved on May 24, 1994.
Petitioner Tolentino adds that what the Senate committee should have done was to amend H.
No. 11197 by striking out the text of the bill and substituting it with the text of S. No. 1630. That
way, it is said, "the bill remains a House bill and the Senate version just becomes the text (only
the text) of the House bill." cdta

12. ID.; JUDICIARY; RULING ON THE ACTION OF CONSTITUTIONAL VALIDITY OF RA NO.

7716. We have carefully read the various arguments raised against the constitutional
validity of R.A. No. 7716. We have in fact taken the extraordinary step of enjoining its
enforcement pending resolution of these cases. We have now come to the conclusion that the
law suffers from none of the infirmities attributed to it by petitioners and that its enactment by the
other branches of the government does not constitute a grave abuse ofdiscretion. Any question
as to its necessity, desirability or expediency must be addressed to Congress as the body which
is electorally responsible, remembering that, as Justice Holmes has said, "legislators are the
ultimate guardians of the liberties and welfare of the people in quite as great a degree as are the
courts." It is not right that we should enforce the public accountability of legislators, that those
who took part in passing the law in question by voting for it in Congress should later thrust to the
courts the burden ofreviewing measures in the flush of enactment. This Court does not sit as a
third branch ofthe legislature, much less exercise a veto power over legislation.

The contention has no merit.

The enactment of S. No. 1630 is not the only instance in which the Senate
proposed an amendment to a House revenue bill by enacting its own version of a revenue
bill. On at least two occasions during the Eighth Congress, the Senate passed its own
version of revenue bills, which, in consolidation with House bills earlier passed, became the
enrolled bills. These were:
R.A. No. 7369 (AN ACT TO AMEND THE OMNIBUS INVESTMENTS
CODE OF 1987 BY EXTENDING FROM FIVE (5) YEARS TO TEN YEARS THE PERIOD
FOR TAX AND DUTY EXEMPTION AND TAX CREDIT ON CAPITAL EQUIPMENT) which
was approved by the President on April 10, 1992. This Act is actually a consolidation of H.
No. 34254, which was approved by the House on January 29, 1992, and S. No. 1920,
which was approved by the Senate on February 3, 1992. cdasia

RESOLUTION
MENDOZA, J p:
These are motions seeking reconsideration of our decision dismissing the petitions filed in these
cases for the declaration of unconstitutionality of R.A. No. 7716, otherwise known as the
Expanded Value-Added Tax Law. The motions, of which there are 10 in all, have been filed by
the several petitioners in these cases, with the exception of the Philippines Educational
Publishers Association, Inc. and the Association of Philippine Booksellers, petitioners in G.R.
No. 115931. aisadc

R.A. No. 7549 (AN ACT GRANTING TAX EXEMPTIONS TO WHOEVER SHALL
GIVE REWARD TO ANY FILIPINO ATHLETE WINNING A MEDAL IN OLYMPIC GAMES)
which was approved by the President on May 22, 1992. This Act is a consolidation of H.
No. 22232, which was approved by the House of Representatives on August 2, 1989, and
S. No. 807, which was approved by the Senate on October 21, 1991.
On the other hand, the Ninth Congress passed revenue laws which were also the
result of the consolidation of House and Senate bills. These are the following, with
indications of the dates on which the laws were approved by the President and dates the
separate bills of the two chambers of Congress were respectively passed:

The Solicitor General, representing the respondents, filed a consolidated comment, to which the
Philippine Airlines, Inc., petitioner in G.R. No. 115852, and the Philippine Press Institute, Inc.,
petitioner in G.R. No. 115544, Juan T. David, petitioner in G.R. No. 115525, each filed a reply. In
turn the Solicitor General filed on June 1, 1995 a rejoinder to the PPI's reply.

1. R.A. No. 7642

On June 27, 1995 the matter was submitted for resolution.

AN ACT INCREASING THE PENALTIES FOR TAX EVASION,

AMENDING
FOR
THIS
PURPOSE
THE
PERTINENT
SECTIONS OF THE
NATIONAL
INTERNAL
REVENUE
CODE
(December 28, 1992) cdta

I. Power of the Senate to propose amendments to revenue bills. Some of the petitioners
(Tolentino, Kilosbayan, Inc., Philippine Airlines (PAL), Roco, and Chamber ofReal Estate and
Builders Association [CREBA]) reiterate previous claims made by them thatR.A. No. 7716 did not
"originate exclusively" in the House of Representatives as required by Art. VI,
24 of the Constitution. Although they admit that H. No. 11197 was filed in the
House of Representatives where it passed three readings and that afterward it was sent to the
Senate where after first reading it was referred to the Senate Ways and Means Committee, they
complain that the Senate did not pass it on second and third readings. Instead what the

House Bill No. 2165, October 5, 1992

Senate Bill No. 32, December 7, 1992

125

2. R.A. No. 7643

Senate Bill No. 1141, March 30, 1993

AN ACT TO EMPOWER THE COMMISSIONER OF INTERNAL

REVENUE TO REQUIRE THE PAYMENT OF THE VALUE-ADDED TAX
EVERY MONTH AND TO ALLOW LOCAL GOVERNMENT UNITS TO
SHARE IN VAT REVENUE, AMENDING FOR THIS PURPOSE CERTAIN
SECTIONS OF THE
NATIONAL
INTERNAL
REVENUE
CODE
(December 28, 1992)

5. R.A. No. 7656

AN ACT REQUIRING GOVERNMENT-OWNED OR
CONTROLLED CORPORATIONS TO DECLARE DIVIDENDS
UNDER CERTAIN CONDITIONS TO THE NATIONAL
GOVERNMENT, AND FOR OTHER PURPOSES (November 9,
1993)

House Bill No. 1503, September 3, 1992

House Bill No. 11024, November 3, 1993

Senate Bill No. 968, December 7, 1992

Senate Bill No. 1168, November 3, 1993

3. R.A. No. 7646
6. R.A. No. 7660

AN
ACT
AUTHORIZING
THE
COMMISSIONER OF INTERNAL REVENUE TO PRESCRIBE
THE PLACE FOR PAYMENT OF INTERNAL REVENUE
TAXES BY LARGE TAXPAYERS, AMENDING FOR THIS
PURPOSE CERTAIN PROVISIONS OFTHE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED (February 24,
1993)

AN
ACT RATIONALIZING FURTHER
THE
STRUCTURE
AND
ADMINISTRATION OF THE
DOCUMENTARY STAMP TAX, AMENDING FOR THE
PURPOSE CERTAIN PROVISIONS OF THE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED, ALLOCATING
FUNDS FOR SPECIFIC PROGRAMS, AND FOR OTHER
PURPOSES (December 23, 1993)

House Bill No. 1470, October 20, 1992

House Bill No. 7789, May 31, 1993

Senate Bill No. 35, November 19, 1992

Senate Bill No. 1330, November 18, 1993

4. R.A. No. 7649
7. R.A. No. 7717

AN ACT REQUIRING THE GOVERNMENT OR

ANY OF ITS
POLITICAL
SUBDIVISIONS,
INSTRUMENTALITIES
OR
AGENCIES
INCLUDING
GOVERNMENT-OWNED
OR
CONTROLLED
CORPORATIONS (GOCCS) TO DEDUCT AND WITHHOLD
THE VALUE-ADDED TAX DUE AT THE RATE OFTHREE
PERCENT (3%) ON GROSS PAYMENT FOR THE
PURCHASE OF GOODS AND SIX PERCENT (6%) ON
GROSS RECEIPTS FOR SERVICES RENDERED BY
CONTRACTORS (April 6, 1993)

AN ACT IMPOSING A TAX ON THE SALE, BARTER

OR EXCHANGE OFSHARES OF STOCK LISTED AND
TRADED THROUGH THE LOCAL STOCK EXCHANGE OR
THROUGH INITIAL PUBLIC OFFERING, AMENDING FOR
THE PURPOSE THE NATIONAL INTERNAL REVENUE
CODE, AS AMENDED, BY INSERTING A NEW SECTION
AND REPEALING CERTAIN SUBSECTIONS THEREOF (May
5, 1994)
House Bill No. 9187, November 3, 1993

House Bill No. 5260, January 26, 1993

Senate Bill No. 1127, March 23, 1994

126

Thus, the enactment of S. No. 1630 is not the only instance in which the Senate,
in the exercise of its power to propose amendments to bills required to originate in the
House, passed its own version of a House revenue measure. It is noteworthy that, in the
particular case of S. No. 1630, petitioners Tolentino and Roco, as members of the Senate,
voted to approve it on second and third readings.

Nor is there merit in petitioners' contention that, with regard to revenue bills, the
Philippine Senate possesses less power than the U.S. Senate because of textual
differences between constitutional provisions giving them the power to propose or concur
with amendments.
Art. I, 7, cl. 1 of the U.S. Constitution reads:

On the other hand, amendment by substitution, in the manner urged by petitionerTolentino,

concerns a mere matter of form. Petitioner has not shown what substantial difference it would
make if, as the Senate actually did in this case, a separate bill like S. No. 1630 is instead
enacted as a substitute measure, "taking into consideration . . . H.B.11197." cdasia

All
Bills
for
raising
Revenue
shall
originate
in
the
House of Representatives; but the Senate may propose or concur with
amendments as on other Bills.

Indeed, so far as pertinent, the Rules of the Senate only provide:

Art. VI, 24 of our Constitution reads:

RULE XXIX

All appropriation, revenue or tariff bills, bills authorizing increase of the

public debt, bills of local application, and private bills shall originate
exclusively in the House of Representatives, but the Senate may propose
or concur with amendments.

AMENDMENTS
xxx xxx xxx

The addition of the word "exclusively" in the Philippine Constitution and the
decision to drop the phrase "as on other Bills" in the American version, according to
petitioners, shows the intention of the framers of our Constitution to restrict the Senate's
power to propose amendments to revenue bills. Petitioner Tolentino contends that the word
"exclusively" was inserted to modify "originate" and "the words 'as in anyother bills' (sic)
were eliminated so as to show that these bills were not to be like other bills but must be
treated as a special kind." cdasia

68. Not more than one amendment to the original amendment shall be
considered.
No amendment by substitution shall be entertained unless the
text thereof is submitted in writing. cdtai
Any of said amendments may be withdrawn before a vote is
taken thereon.

The history of this provision does not support this contention. The supposed
indicia of constitutional intent are nothing but the relics of an unsuccessful attempt to limit
the power of the Senate. It will be recalled that the 1935 Constitution originally provided for
a unicameral National Assembly. When it was decided in 1939 to change to a bicameral
legislature, it became necessary to provide for the procedure for lawmaking by the Senate
and the House of Representatives. The work of proposing amendments to the Constitution
was done by the National Assembly, acting as a constituent assembly, some of whose
members, jealous of preserving the Assembly's lawmaking powers, sought to curtail the
powers of the proposed Senate. Accordingly they proposed the following provision:

69. No amendment which seeks the inclusion of a legislative

provision foreign to the subject matter of a bill (rider) shall be entertained.
xxx xxx xxx
70-A. A bill or resolution shall not be amended by substituting
it with another which covers a subject distinct from that proposed in the
original bill or resolution. (Emphasis added.) cdtai

All bills appropriating public funds, revenue or tariff bills,

bills of local application, and private bills shall originate exclusively in the
Assembly, but the Senate may propose or concur with amendments. In
case of disapproval by the Senate of any such bills, the Assembly may
repass the same by a two-thirds vote ofall its members, and thereupon,
the bill so repassed shall be deemed enacted and may be submitted to
the President for corresponding action. In the event that the Senate

127

should fail to finally act on any such bills, the Assembly may, after thirty
days from the opening of the next regular session of the same legislative
term, reapprove the same with a vote of two-thirds of all the
members of the Assembly. And upon such reapproval, the bill shall be
deemed enacted and may be submitted to the President for
corresponding action.

and therefore also more representative of the people. Moreover, its

members are presumed to be more familiar with the needs of the country
in regard to the enactment of the legislation involved.
The Senate is, however, allowed much leeway in the
exercise of its power to propose or concur with amendments to the bills
initiated by the House ofRepresentatives. Thus, in one case, a bill
introduced in the U.S. House ofRepresentatives was changed by the
Senate to make a proposed inheritance tax a corporation tax. It is also
accepted practice for the Senate to introduce what is known as an
amendment by substitution, which may entirely replace the bill initiated in
the House of Representatives.

The special committee on the revision of laws of the Second National Assembly vetoed the
proposal. It deleted everything after the first sentence. As rewritten, the proposal was approved
by the National Assembly and embodied in Resolution No. 38, as amended by Resolution No.
73. (J. ARUEGO, KNOW YOUR CONSTITUTION 65-66 [1950]) The proposed amendment was
submitted to the people and ratified by them in the elections held on June 18, 1940. cdtai
This is the history of Art. VI, 18 (2) of the 1935 Constitution, from which Art. VI,
24 of the present Constitution was derived. It explains why the word "exclusively" was
added to the American text from which the framers of the Philippine Constitution borrowed
and why the phrase "as on other Bills" was not copied. Considering the defeat of the
proposal, the power of the Senate to propose amendments must be understood to be full,
plenary and complete "as on other Bills." Thus, because revenue bills are required to
originate exclusively in the House of Representatives, the Senate cannot enact revenue
measures of its own without such bills. After a revenue bill is passed and sent over to it by
the House, however, the Senate certainly can pass its own version on the same subject
matter. This follows from the coequality of the two chambers of Congress.

(I. CRUZ, PHILIPPINE POLITICAL LAW 144-145 [1993])

In sum, while Art. VI, 24 provides that all appropriation, revenue or tariff bills,
bills authorizing increase of the public debt, bills of local application, and private bills must
"originate exclusively in the House of Representatives," it also adds, "but the Senate may
propose or concur with amendments." In the exercise of this power, the Senate may
propose an entirely new bill as a substitute measure. As petitionerTolentino states in a high
school text, a committee to which a bill is referred may do any of the following: cdasia
(1) to endorse the bill without changes; (2) to make changes in the bill
omitting or adding sections or altering its language; (3) to make and
endorse an entirely new bill as a substitute, in which case it will be known
as a committee bill; or (4) to make no report at all.

That this is also the understanding of book authors of the scope of the Senate's
power to concur is clear from the following commentaries:
The power of the Senate to propose or concur with
amendments is apparently without restriction. It would seem that by
virtue of this power, the Senate can practically re-write a bill required to
come from the House and leave only a trace of the original bill. For
example, a general revenue bill passed by the lower house of the United
States Congress contained provisions for the impositionof an inheritance
tax. This was changed by the Senate into a corporation tax. The
amending authority of the Senate was declared by the United States
Supreme Court to be sufficiently broad to enable it to make the alteration.
[Flint v. Stone Tracy Company, 220 U.S. 107, 55 L. ed. 389] cdt

(A. TOLENTINO,
[1950])

THE

GOVERNMENT OF THE

PHILIPPINES

258

To except from this procedure the amendment of bills which are required to
originate in the House by prescribing that the number of the House bill and its other parts
up to the enacting clause must be preserved although the text of the Senate amendment
may be incorporated in place of the original body of the bill is to insist on a mere
technicality. At any rate there is no rule prescribing this form. S. No. 1630, as a substitute
measure, is therefore as much an amendment of H. No. 11197 as any which the Senate
could have made.

(L. TAADA AND F. CARREON, POLITICAL LAW OF THE

PHILIPPINES 247 [1961])

II. S. No. 1630 a mere amendment of H. No. 11197. Petitioners' basic error is
that they assume that S. No. 1630 is an independent and distinct bill. Hence their repeated
references to its certification that it was passed by the Senate
"in substitutionof S.B. No. 1129, taking into consideration P.S. Res. No. 734
and H.B. No. 11197," implying that there is something substantially different between the

The above-mentioned bills are supposed to be initiated by the

House ofRepresentatives because it is more numerous in membership

128

reference to S. No. 1129 and the reference to H. No. 11197. From this premise, they
conclude that R.A. No. 7716 originated both in the House and in the Senate and that it is
the product of two "half-baked bills because neither H. No. 11197 nor S. No. 1630 was
passed by both houses of Congress." cdtai

THE SPEAKER. The report of the conference committee is in

order. It is precisely in cases like this where a conference should be had.
If the House bill had been approved by the Senate, there would have
been no need of a conference; but precisely because the Senate passed
another bill on the same subject matter, the conference committee had to
be created, and we are now considering the report ofthat committee. cdt

In point of fact, in several instances the provisions of S. No. 1630, clearly appear
to be mere amendments of the corresponding provisions of H. No. 11197. The very tabular
comparison of the provisions of H. No. 11197 and S. No. 1630 attached as Supplement A
to the basic petition of petitioner Tolentino, while showing differences between the two bills,
at the same time indicates that the provisions of the Senate bill were precisely intended to
be amendments to the House bill.

(2 CONG. REC. No. 13, JULY 27, 1955, pp. 3841-42 [emphasis
added])
III. The President's certification. The fallacy in thinking that H. No. 11197 and S.
No. 1630 are distinct and unrelated measures also accounts for the petitioners'
(Kilosbayan's and PAL's) contention that because the President separately certified to the
need for the immediate enactment of these measures, his certification was ineffectual and
void. The certification had to be made of the version of the same revenue bill which at the
moment was being considered. Otherwise, to follow petitioners' theory, it would be
necessary for the President to certify as many bills as are presented in a
house of Congress even though the bills are merely versions of the bill he has already
certified. It is enough that he certifies the bill which, at the time he makes the certification, is
under consideration. Since on March 22, 1994 the Senate was considering S. No. 1630, it
was that bill which had to be certified. For that matter on June 1, 1993 the President had
earlier certified H. No. 9210 for immediate enactment because it was the one which at that
time was being considered by the House. This bill was later substituted, together with other
bills, by H. No. 11197.

Without H. No. 11197, the Senate could not have enacted S. No. 1630. Because
the Senate bill was a mere amendment of the House bill, H. No. 11197 in its original form
did not have to pass the Senate on second and third readings. It was enough that after it
was passed on first reading it was referred to the Senate Committee on Ways and Means.
Neither was it required that S. No. 1630 be passed by the House ofRepresentatives before
the two bills could be referred to the Conference Committee.
There is legislative precedent for what was done in the case of H. No. 11197 and
S. No. 1630. When the House bill and Senate bill, which became R.A. No. 1405 (Act
prohibiting the disclosure of bank deposits), were referred to a conference committee, the
question was raised whether the two bills could be the subject of such conference,
considering that the bill from one house had not been passed by the other and vice versa.
As Congressman Duran put the question:

As to what Presidential certification can accomplish, we have already explained

in the main decision that the phrase "except when the President certifies to the
necessityof its immediate enactment, etc." in Art. VI, 26 (2) qualifies not only the
requirement that "printed copies [of a bill] in its final form [must be] distributed to the
members three days before its passage" but also the requirement that before a bill can
become a law it must have passed "three readings on separate days." There is not only
textual support for such construction but historical basis as well.

MR. DURAN. Therefore, I raise this question of order as to procedure: If

a House bill is passed by the House but not passed by the Senate, and a
Senate bill of a similar nature is passed in the Senate but never passed in
the House, can the two bills be the subject of a conference, and can a
law be enacted from these two bills? I understand that the Senate bill in
this particular instance does not refer to investments in government
securities, whereas the bill in the House, which was introduced by the
Speaker, covers two subject matters: not only investigation ofdeposits in
banks but also investigation of investments in government securities.
Now, since the two bills differ in their subject matter, I believe that no law
can be enacted.

Art. VI, 21 (2) of the 1935 Constitution originally provided:

(2) No bill shall be passed by either House unless it shall have
been printed and copies thereof in its final form furnished its Members at
least three calendar days prior to its passage, except when the President
shall have certified to the necessity of its immediate enactment. Upon the
last reading of a bill, no amendment thereof shall be allowed and the
question upon its passage shall be taken immediately thereafter, and
the yeas and nays entered on the Journal.

Ruling on the point of order raised, the chair (Speaker Jose B. Laurel, Jr.) said:

129

When the 1973 Constitution was adopted, it was provided in Art. VIII, 19 (2):

printed form was actually dispensed with by holding the voting on second and third readings
on the same day (March 24, 1994). Otherwise, sufficient time between the
submission of the bill on February 8, 1994 on second reading and its approval on March 24,
1994 elapsed before it was finally voted on by the Senate on third reading. cdtai

(2) No bill shall become a law unless it has passed three

readings on separate days, and printed copies thereof in its final form
have been distributed to the Members three days before its passage,
except when the Prime Minister certifies to the necessity of its immediate
enactment to meet a public calamity or emergency. Upon the last
reading of a bill, no amendment thereto shall be allowed, and the vote
thereon
shall
be
taken
immediately
thereafter,
and
the yeas and naysentered in the Journal. cdta

The purpose for which three readings on separate days is required is said to be
two-fold: (1) to inform the members of Congress of what they must vote on and (2) to give
them notice that a measure is progressing through the enacting process, thus enabling
them and others interested in the measure to prepare their positions with reference to it. (1
J. G. SUTHERLAND, STATUTES AND STATUTORY CONSTRUCTION 10.04, p. 282
[1972]). These purposes were substantially achieved in the case of R.A. No. 7716.

This provision of the 1973 document, with slight modification, was adopted inArt.
VI, 26 (2) of the present Constitution, thus:

IV. Power of Conference Committee. It is contended (principally by Kilosbayan,

Inc. and the Movement of Attorneys for Brotherhood, Integrity and Nationalism, Inc.
[MABINI]) that in violation of the constitutional policy of full public disclosure and the
people's right to know (Art. II, 28 and Art. III, 7) the Conference Committee met for two
days in executive session with only the conferees present.

(2) No bill passed by either House shall become a law unless it

has passed three readings on separate days, and printed copies thereof
in its final form have been distributed to its Members three days before its
passage, except when the President certifies to the necessity of its
immediate enactment to meet a public calamity or emergency. Upon the
last reading of a bill, no amendment thereto shall be allowed, and the vote
thereon
shall
be
taken
immediately
thereafter,
and
theyeas and nays entered in the Journal.

As pointed out in our main decision, even in the United States it was customary
to hold such sessions with only the conferees and their staffs in attendance and it was only
in 1975 when a new rule was adopted requiring open sessions. Unlike its American
counterpart, the Philippine Congress has not adopted a rule prescribing open hearings for
conference committees. cdt

The exception is based on the prudential consideration that if in all cases three
readings on separate days are required and a bill has to be printed in final form before it
can be passed, the need for a law may be rendered academic by the occurrence ofthe very
emergency or public calamity which it is meant to address. cdasia

It is nevertheless claimed that in the United States, before the adoption of the rule
in 1975, at least staff members were present. These were staff members of the Senators
and Congressmen, however, who may be presumed to be their confidential men, not
stenographers as in this case who on the last two days of the conference were excluded.
There is no showing that the conferees themselves did not take notesof their proceedings
so as to give petitioner Kilosbayan basis for claiming that even in secret diplomatic
negotiations involving state interest, conferees keep notes of their meetings. Above all, the
public's right to know was fully served because the Conference Committee in this case
submitted a report showing the changes made on the differing versions of the House and
the Senate.

Petitioners further contend that a "growing budget deficit" is not an emergency,

especially in a country like the Philippines where budget deficit is a chronic condition. Even
if this were the case, an enormous budget deficit does not make the need for R.A. No.
7716 any less urgent or the situation calling for its enactment any less an emergency.
Apparently, the members of the Senate (including some of the petitioners in
these cases) believed that there was an urgent need for consideration of S. No. 1630,
because they responded to the call of the President by voting on the bill on second and
third readings on the same day. While the judicial department is not bound by the Senate's
acceptance of the President's certification, the respect due coequal departments of the
government in matters committed to them by the Constitution and the absence of a clear
showing of grave abuse of discretion caution a stay of the judicial hand.

Petitioners cite the rules of both houses which provide that conference committee
reports must contain "a detailed, sufficiently explicit statement of the changes in or other
amendments." These changes are shown in the bill attached to the Conference Committee
Report. The members of both houses could thus ascertain what changes had been made
in the original bills without the need of a statement detailing the changes.

At any rate, we are satisfied that S. No. 1630 received thorough consideration in
the Senate where it was discussed for six days. Only its distribution in advance in its final

130

The same question now presented was raised when the bill which became R.A.
No. 1400 (Land Reform Act of 1955) was reported by the Conference Committee.
Congressman Bengzon raised a point of order. He said: aisadc

Congressman Tolentino was sustained by the chair. The record shows that when
the ruling was appealed, it was upheld by viva voce and when a division of the House was
called, it was sustained by a vote of 48 to 5. (Id., p. 4058)

MR. BENGZON. My point of order is that it is out of order to

consider the report of the conference committee regarding House Bill
No. 2557 by reason of the provision of Section 11, Article XII, of the
Rules of this House which provides specifically that the conference report
must be accompanied by a detailed statement of the effects of the
amendment on the bill of the House. This conference committee report is
not accompanied by that detailed statement, Mr. Speaker. Therefore it is
out of order to consider it.

Nor is there any doubt about the power of a conference committee to insert new
provisions as long as these are germane to the subject of the conference. As this Court
held in Philippine Judges Association v. Prado, 227 SCRA 703 (1993), in an opinion written
by then Justice Cruz, the jurisdiction of the conference committee is not limited to resolving
differences between the Senate and the House. It may propose an entirely new provision.
What is important is that its report is subsequently approved by the respective
houses of Congress. This Court ruled that it would not entertain allegations that, because
new provisions had been added by the conference committee, there was thereby a
violation of the constitutional injunction that "upon the last reading of a bill, no amendment
thereto shall be allowed."

Petitioner Tolentino, then the Majority Floor Leader, answered:

Applying these principles, we shall decline to look into the

petitioners' chargesthat an amendment was made upon the last
reading of the bill that eventually became R.A. No. 7354 and
that copies thereof in its final form were not distributedamong the
members of each House. Both the enrolled bill and the legislative journals
certify that the measure was duly enacted, i.e., in accordance with Article
VI, Sec. 26 (2) of the Constitution. We are bound by such official
assurances from a coordinate department of the government, to which we
owe, at the very least, a becoming courtesy. cdasia

MR. TOLENTINO. Mr. Speaker, I should just like to say a few words in
connection with the point of order raised by the gentleman from
Pangasinan. cdta
There is no question about the provision of the Rule cited by the
gentleman from Pangasinan, but this provision applies to those cases
where only portions of the bill have been amended. In this case before us
an entire bill is presented; therefore, it can be easily seen from the
reading of the bill what the provisions are. Besides, this procedure has
been an established practice.

(Id. at 710. [emphasis added])

After some interruption, he continued:

It is interesting to note the following description of conference committees in the Philippines in a

1979 study:

MR. TOLENTINO. As I was saying, Mr. Speaker, we have to

look into the reason for the provisions of the Rules, and the reason for the
requirement in the provision cited by the gentleman from Pangasinan is
when there are only certain words or phrases inserted in or deleted from
the provisions of the bill included in the conference report, and we cannot
understand what those words and phrases mean and their relation to the
bill. In that case, it is necessary to make a detailed statement on how
those words and phrases will affect the bill as a whole; but when the
entire bill itself is copied verbatim in the conference report, that is not
necessary. So when the reason for the Rule does not exist, the Rule does
not exist. cdta

Conference committees may be of two types: free or instructed.

These committees may be given instructions by their parent bodies or
they may be left without instructions. Normally the conference committees
are without instructions, and this is why they are often critically referred to
as "the little legislatures." Once bills have been sent to them, the
conferees have almost unlimited authority to change the clauses of the
bills and in fact sometimes introduce new measures that were not in the
original legislation. No minutes are kept, and members' activities on
conference committees are difficult to determine. One congressman
known for his idealism put it this way: "I killed a bill on export incentives
for my interest group [copra] in the conference committee but I could not
have done so anywhere else." The conference committee submits a
report to both houses, and usually it is accepted. If the report is not

(2 CONG. REC. No. 2, p. 4056. [emphasis added])

131

accepted, then the committee is discharged and new members are

appointed.

103. Exempt transactions. The following shall be exempt

from the value-added tax:

(R. Jackson, Committees in the Philippine Congress, in

COMMITTEES AND LEGISLATURES: A COMPARATIVE ANALYSIS 163
[J. D. LEES AND M. SHAW, eds.])

xxx xxx xxx

(q) Transactions which are exempt under special laws, except
those granted under Presidential Decree Nos. 66, 529, 972, 1491, 1590.

In citing this study, we pass no judgment on the methods of conference

committees. We cite it only to say that conference committees here are no different from
their counterparts in the United States whose vast powers we noted in Philippine Judges
Association v. Prado, supra. At all events, under Art. VI, 16 (3) each house has the power
"to determine the rules of its proceedings," including those of its committees. Any
meaningful change in the method and procedures of Congress or its committees must
therefore be sought in that body itself. cdtai

xxx xxx xxx

The amendment of 103 is expressed in the title of R.A. No. 7716 which reads:
AN ACT RESTRUCTURING THE VALUE-ADDED TAX (VAT) SYSTEM,
WIDENING ITS TAX BASE AND ENHANCING ITS ADMINISTRATION,
AND FOR THESE PURPOSES AMENDING AND REPEALING THE
RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE
CODE, AS AMENDED, AND FOR OTHER PURPOSES.

V. The titles of S. No. 1630 and H. No. 11197. PAL maintains that R.A. No.
7716violates Art. VI, 26 (1) of the Constitution which provides that "Every bill passed by
Congress shall embrace only one subject which shall be expressed in the title thereof." PAL
contends that the amendment of its franchise by the withdrawal of its exemption from the
VAT is not expressed in the title of the law.

By stating that R.A. No. 7716 seeks to "[RESTRUCTURE] THE VALUE-ADDED TAX (VAT)
SYSTEM [BY] WIDENING ITS TAX BASE AND ENHANCING ITS ADMINISTRATION, AND FOR
THESE PURPOSES AMENDING AND REPEALING THE RELEVANT PROVISIONS OF THE
NATIONAL INTERNAL REVENUE CODE, AS AMENDED AND FOR OTHER PURPOSES,"
Congress thereby clearly expresses its intention to amend any provision of the NIRC which
stands in the way of accomplishing the purpose of the law. cdasia

Pursuant to 13 of P.D. No. 1590, PAL pays a franchise tax of 2% on its gross
revenue "in lieu of all other taxes, duties, royalties, registration, license and other fees and
charges of any kind, nature, or description, imposed, levied, established, assessed or
collected by any municipal, city, provincial or national authority or government agency, now
or in the future."

PAL asserts that the amendment of its franchise must be reflected in the title of the law by
specific reference to P.D. No. 1590. It is unnecessary to do this in order to comply with the
constitutional requirement, since it is already stated in the title that the law seeks to amend the
pertinent provisions of the NIRC, among which is 103 (q), in order to widen the base of the
VAT. Actually, it is the bill which becomes a law that is required to express in its title the
subject of legislation. The titles of H. No. 11197 and S. No. 1630 in fact specifically referred to
103 of the NIRC as among the provisions sought to be amended. We are satisfied that sufficient
notice had been given of the pendency of these bills in Congress before they were enacted into
what is now R.A. No. 7716.

PAL was exempted from the payment of the VAT along with other entities by
103 of the National Internal Revenue Code, which provides as follows: aisadc
103. Exempt transactions. The following shall be exempt
from the value-added tax:
xxx xxx xxx

In Philippine Judges Association v. Prado, supra, a similar argument as that now

made by PAL was rejected. R.A. No. 7354 is entitled AN ACT CREATING THE PHILIPPINE
POSTAL CORPORATION, DEFINING ITS POWERS, FUNCTIONS AND
RESPONSIBILITIES, PROVIDING FOR REGULATION OF THE INDUSTRY AND FOR
OTHER PURPOSES CONNECTED THEREWITH. It contained a provision repealing all
franking privileges. It was contended that the withdrawal of franking privileges was not
expressed in the titleof the law. In holding that there was sufficient description of the
subject of the law in its title, including the repeal of franking privileges, this Court held:

(q) Transactions which are exempt under special laws or

international agreements to which the Philippines is a signatory.
R.A. No. 7716 seeks to withdraw certain exemptions, including that
granted to PAL, by amending 103, as follows: aisadc

132

To require every end and means necessary for the accomplishment of the
general objectives of the statute to be expressed in its title would not only
be unreasonable but would actually render legislation impossible.
[Cooley, Constitutional Limitations, 8th Ed., p. 297] As has been correctly
explained:

discriminatory because it was laid on the gross advertising receipts only of newspapers
whose weekly circulation was over 20,000, with the result that the tax applied only to 13
out of 124 publishers in Louisiana. These large papers were critical of Senator Huey Long
who controlled the state legislature which enacted the license tax. The censorial motivation
for the law was thus evident.

The details of the legislative act need not be

specifically stated in its title, but matter germane to
the subject as expressed in the title, and adopted
to the accomplishment of the object in view, may
properly be included in the act. Thus, it is proper to
create in the same act the machinery by which the
act is to be enforced, to prescribe the penalties for
its infraction, and to remove obstacles in the
way of its execution. If such matters are properly
connected with the subject as expressed in the
title, it is unnecessary that they should also have
special mention in the title. (Southern
Pac. Co. v. Bartine, 170 Fed. 725)

On the other hand, in Minneapolis Star & Tribune Co. v. Minnesota

Comm'r ofRevenue, 460 U.S. 575, 75 L. Ed. 2d 295 (1983), the tax was found to be
discriminatory because although it could have been made liable for the sales tax or, in lieu
thereof, for the use tax on the privilege of using, storing or consuming tangible goods, the
press was not. Instead, the press was exempted from both taxes. It was, however, later
made to pay a special use tax on the cost of paper and ink which made these items "the
only items subject to the use tax that were component of goods to be sold at retail." The
U.S. Supreme Court held that the differential treatment of the press "suggests that the
goal of regulation is not unrelated to suppression of expression, and such goal is
presumptively unconstitutional." It would therefore appear that even a law that favors the
press is constitutionally suspect. (See the dissent of Rehnquist, J. in that case) aisadc
Nor is it true that only two exemptions previously granted by E.O. No. 273 are
withdrawn "absolutely and unqualifiedly" by R.A. No. 7716. Other exemptions from the VAT,
such as those previously granted to PAL, petroleum concessionaires, enterprises registered
with the Export Processing Zone Authority, and many more are likewise totally withdrawn, in
addition to exemptions which are partially withdrawn, in an effort to broaden the base of the
tax.

(227 SCRA at 707-708)

VI. Claims of press freedom and religious liberty. We have held that, as a general
proposition, the press is not exempt from the taxing power of the State and that what the
constitutional guarantee of free press prohibits are laws which single out the press or target
a group belonging to the press for special treatment or which in any way discriminate
against the press on the basis of the content of the publication, andR.A. No. 7716 is
none of these.

The PPI says that the discriminatory treatment of the press is highlighted by the
fact that transactions, which are profit oriented, continue to enjoy exemption underR.A. No.
7716. An enumeration of some of these transactions will suffice to show that by and large
this is not so and that the exemptions are granted for purpose. As the Solicitor General
says, such exemptions are granted, in some cases, to encourage agricultural production
and, in other cases, for the personal benefit of the end-user rather than for profit. The
exempt transactions are:

Now it is contended by the PPI that by removing the exemption of the press from
the VAT while maintaining those granted to others, the law discriminates against the press.
At any rate, it is averred, "even nondiscriminatory taxation of constitutionally guaranteed
freedom is unconstitutional." cdtai
With respect to the first contention, it would suffice to say that since the law
granted the press a privilege, the law could take back the privilege anytime without offense
to the Constitution. The reason is simple: by granting exemptions, the State does not
forever waive the exercise of its sovereign prerogative.

(a) Goods for consumption or use which are in their original state
(agricultural, marine and forest products, cotton seeds in their original
state, fertilizers, seeds, seedlings, fingerlings, fish, prawn livestock and
poultry feeds) and goods or services to enhance agriculture
(milling of palay, corn, sugar cane and raw sugar, livestock, poultry feeds,
fertilizer, ingredients used for the manufacture of feeds). aisadc

Indeed, in withdrawing the exemption, the law merely subjects the press to the
same tax burden to which other businesses have long ago been subject. It is thus different
from the tax involved in the cases invoked by the PPI. The license tax
inGrosjean v. American Press Co., 297 U.S. 233, 80 L. Ed. 660 (1936) was found to be

(b) Goods used for personal consumption or use (household and

personal effects of citizens returning to the Philippines) or for professional

133

use, like professional instruments and implements, by persons coming to

the Philippines to settle here.

is unconstitutional. As the U.S. Supreme Court put it, "it is one thing to impose a tax on
income or property of a preacher. It is quite another thing to exact a tax on him for
delivering a sermon."

(c) Goods subject to excise tax such as petroleum products or to be used

for manufacture of petroleum products subject to excise tax and services
subject to percentage tax.

A similar ruling was made by this Court in American Bible

Society v. City ofManila, 101 Phil. 386 (1957) which invalidated a city ordinance requiring a
business license fee on those engaged in the sale of general merchandise. It was held that
the tax could not be imposed on the sale of bibles by the American Bible Society without
restraining the free exercise of its right to propagate. cdta

(d) Educational services, medical, dental, hospital and veterinary

services,
and
services
rendered
under
employer-employee
relationship. aisadc

The VAT is, however, different. It is not a license tax. It is not a tax on the
exerciseof a privilege, much less a constitutional right. It is imposed on the sale, barter,
lease or exchange of goods or properties or the sale or exchange of services and the
lease ofproperties purely for revenue purposes. To subject the press to its payment is not to
burden the exercise of its right any more than to make the press pay income tax or subject
it to general regulation is not to violate its freedom under the Constitution.

(e) Works of art and similar creations sold by the artist himself.
(f) Transactions
agreements.

exempted

under

special

laws,

or

international

(g) Export-sales by persons not VAT-registered.

(h) Goods or services
exceedingP500,000.00.

with

(Respondents' Consolidated
Reconsideration, pp. 58-60)

gross

annual

Comment

on

sale

the

or

receipt

not

Motions

for

Additionally, the Philippine Bible Society, Inc. claims that although it sells bibles,
the proceeds derived from the sales are used to subsidize the cost of printing copies which
are given free to those who cannot afford to pay so that to tax the sales would be to
increase the price, while reducing the volume of sale. Granting that to be the case, the
resulting burden on the exercise of religious freedom is so incidental as to make it difficult to
differentiate it from any other economic imposition that might make the right to disseminate
religious doctrines costly. Otherwise, to follow the petitioner's argument, to increase the tax
on the sale of vestments would be to lay an impermissible burden on the right of the
preacher to make a sermon.

The PPI asserts that it does not really matter that the law does not discriminate
against the press because "even nondiscriminatory taxation on constitutionally guaranteed
freedom is unconstitutional." PPI cites in support of this assertion the following statement
in Murdock v. Pennsylvania, 319 U.S. 105, 87 L. Ed 1292 (1943): aisadc

On the other hand the registration fee of P1,000.00 imposed by 107 of the
NIRC, as amended by 7 of R.A. No. 7716, although fixed in amount, is really just to pay
for the expenses of registration and enforcement of provisions such as those relating to
accounting in 108 of the NIRC. That the PBS distributes free bibles and therefore is not
liable to pay the VAT does not excuse it from the payment of this fee because it also sells
some copies. At any rate whether the PBS is liable for the VAT must be decided in concrete
cases, in the event it is assessed this tax by the Commissioner ofInternal Revenue. cdtai

The fact that the ordinance is "nondiscriminatory" is immaterial. The

protection afforded by the First Amendment is not so restricted. A license
tax certainly does not acquire constitutional validity because it classifies
the privileges protected by the First Amendment along with the wares and
merchandise of hucksters and peddlers and treats them all alike. Such
equality in treatment does not save the ordinance. Freedom of press,
freedom of speech, freedom of religion are in preferred position.

VII. Alleged violations of the due process, equal protection and contract clauses
and the rule on taxation. CREBA asserts that R.A. No. 7716 (1) impairs the
obligations of contracts, (2) classifies transactions as covered or exempt without reasonable
basis and (3) violates the rule that taxes should be uniform and equitable and that
Congress shall "evolve a progressive system of taxation."

The Court was speaking in that case of a license tax, which, unlike an ordinary
tax, is mainly for regulation. Its imposition on the press is unconstitutional because it lays a
prior restraint on the exercise of its right. Hence, although its application to others, such
those selling goods, is valid, its application to the press or to religious groups, such as the
Jehovah's Witnesses, in connection with the latter's sale of religious books and pamphlets,

With respect to the first contention, it is claimed that the application of the tax to
existing contracts of the sale of real property by installment or on deferred payment basis

134

would result in substantial increases in the monthly amortizations to be paid because of the
10% VAT. The additional amount, it is pointed out, is something that the buyer did not
anticipate at the time he entered into the contract.

Finally, it is contended, for the reasons already noted, that R.A. No. 7716 also
violates Art. VI, 28 (1) which provides that "The rule of taxation shall be uniform and
equitable. The Congress shall evolve a progressive system of taxation." cdt

The short answer to this is the one given by this Court in an early case:
"Authorities from numerous sources are cited by the plaintiffs, but none of them show that a
lawful tax on a new subject, or an increased tax on an old one, interferes with a contract or
impairs its obligation, within the meaning of the Constitution. Even though such taxation
may affect particular contracts, as it may increase the debt of one person and lessen the
security of another, or may impose additional burdens upon one class and release the
burdens of another, still the tax must be paid unless prohibited by theConstitution, nor can it
be said that it impairs the obligation of any existing contract in its true legal sense." (La
Insular v. Machuca Go-Tauco and Nubla Co-Siong, 39 Phil. 567, 574 [1919]) Indeed not
only existing laws but also "the reservation of the essential attributes of sovereignty, is . . .
read into contracts as a postulate of the legal order." (Philippine-American Life
Ins. Co. v. Auditor General, 22 SCRA 135, 147 [1968]) Contracts must be understood as
having been made in reference to the possible exercise of the rightful authority of the
government and no obligation of contract can extend to the defeat of that authority.
(Norman v. Baltimore and Ohio R.R., 79 L. Ed. 885 [1935]) cdtai

Equality and uniformity of taxation means that all taxable articles or

kinds ofproperty of the same class be taxed at the same rate. The taxing power has the
authority to make reasonable and natural classification for purposes of taxation. To satisfy
this requirement it is enough that the statute or ordinance applies equally to all persons,
forms and corporations placed in similar situation. (City of Baguio v. De
Leon,supra; Sison, Jr. v. Ancheta, supra)
Indeed, the VAT was already provided in E.O. No. 273 long before R.A. No.
7716was enacted. R.A. No. 7716 merely expands the base of the tax. The
validity of theoriginal VAT Law was questioned in Kapatiran ng Naglilingkod sa Pamahalaan
ng Pilipinas, Inc. v. Tan, 163 SCRA 383 (1988) on grounds similar to those made in these
cases, namely, that the law was "oppressive, discriminatory, unjust and regressive in
violation of Art. VI, 28 (1) of the Constitution." (At 382) Rejecting the challenge to the law,
this Court held:
As the Court sees it, EO 273 satisfies all the requirements of a valid tax.
It is uniform. . . . cdt

It is next pointed out that while 4 of R.A. No. 7716 exempts such transactions
as the sale of agricultural products, food items, petroleum, and medical and veterinary
services, it grants no exemption on the sale of real property which is equally essential. The
sale of real property for socialized and low-cost housing is exempted from the tax, but
CREBA claims that real estate transactions of "the less poor," i.e., the middle class, who
are equally homeless, should likewise be exempted.

The sales tax adopted in EO 273 is applied similarly on all goods and
services sold to the public, which are not exempt, at the constant
rate of 0% or 10%.
The disputed sales tax is also equitable. It is imposed only on
sales of goods or services by persons engaged in business with an
aggregate gross annual sales exceeding P200,000.00. Small corner sarisari stores are consequently exempt from its application. Likewise exempt
from the tax are sales of farm and marine products, so that the
costs of basic food and other necessities, spared as they are from the
incidence of the VAT, are expected to be relatively lower and within the
reach of the general public.

The sale of food items, petroleum, medical and veterinary services etc., which
are essential goods and services was already exempt under 103, pars. (b) (d) (1) of the
NIRC before the enactment of R.A. No. 7716. Petitioner is in error in claiming that R.A. No.
7716 granted exemption to these transactions, while subjecting those of petitioner to the
payment of the VAT. Moreover, there is a difference between the "homeless poor" and the
"homeless less poor" in the example given by petitioner, because the second group or
middle class can afford to rent houses in the meantime that they cannot yet buy their own
homes. The two social classes are thus differently situated in life. "It is inherent in the power
to tax that the State be free to select the subjects oftaxation, and it has been repeatedly
held that 'inequalities which result from a singling out of one particular class for taxation, or
exemption infringe no constitutional limitation.'" (Lutz v. Araneta, 98 Phil. 148, 153
(1955). Accord, City of Baguio v. De Leon, 134 Phil. 912 (1968); Sison, Jr. v. Ancheta, 130
SCRA 654, 663 (1984); Kapatiran ng mga Naglilingkod sa Pamahalaan ng
Pilipinas, Inc. v. Tan, 163 SCRA 371 [1988]).

(At 382-383)
The CREBA claims that the VAT is regressive. A similar claim is made by the
Cooperative Union of the Philippines, Inc. (CUP), while petitioner Juan T. David argues that
the law contravenes the mandate of Congress to provide for a progressive
systemof taxation because the law imposes a flat rate of 10% and thus places the tax
burden on all taxpayers without regard to their ability to pay.

135

The Constitution does not really prohibit the imposition of indirect taxes which,
like the VAT, are regressive. What it simply provides is that Congress shall "evolve a
progressive system of taxation." The constitutional provision has been interpreted to mean
simply that "direct taxes are . . . to be preferred [and] as much as possible, indirect taxes
should be minimized." (E. FERNANDO, THE CONSTITUTION OF THE PHILIPPINES 221
Second ed. [1977]) Indeed, the mandate to Congress is not toprescribe, but to evolve, a
progressive tax system. Otherwise, sales taxes, which perhaps are the oldest
form of indirect taxes, would have been prohibited with the proclamation of Art. VIII, 17
(1) of the 1973 Constitution from which the present Art. VI, 28 (1) was taken. Sales taxes
are also regressive.

(f) Transactions
agreements.

exempted

under

special

laws,

or

international

or

receipt

not

Motions

for

(g) Export-sales by persons not VAT-registered.

(h) Goods or services
exceedingP500,000.00.

with

(Respondents' Consolidated
Reconsideration, pp. 58-60) cdt

Resort to indirect taxes should be minimized but not avoided entirely because it is
difficult, if not impossible, to avoid them by imposing such taxes according to the taxpayers'
ability to pay. In the case of the VAT, the law minimizes the regressive effectsof this
imposition by providing for zero rating of certain transactions (R.A. No. 7716, 3,
amending 102 (b) of the NIRC), while granting exemptions to other transactions. (R.A.
No. 7716, 4, amending 103 of the NIRC)

gross

annual

Comment

on

sale

the

On the other hand, the transactions which are subject to the VAT are those which
involve goods and services which are used or availed of mainly by higher income groups.
These include real properties held primarily for sale to customers or for lease in the
ordinary course of trade or business, the right or privilege to use patent, copyright, and
other similar property or right, the right or privilege to use industrial, commercial or scientific
equipment, motion picture films, tapes and discs, radio, television, satellite transmission
and cable television time, hotels, restaurants and similar places, securities, lending
investments, taxicabs, utility cars for rent, tourist buses, and other common carriers,
services of franchise grantees of telephone and telegraph.

Thus, the following transactions involving basic and essential goods and services
are exempted from the VAT: cdasia
(a) Goods for consumption or use which are in their original state
(agricultural, marine and forest products, cotton seeds in their original
state, fertilizers, seeds, seedlings, fingerlings, fish, prawn livestock and
poultry feeds) and goods or services to enhance agriculture
(milling of palay, corn, sugar cane and raw sugar, livestock, poultry feeds,
fertilizer, ingredients used for the manufacture of feeds).

The problem with CREBA's petition is that it presents broad

claims ofconstitutional violations by tendering issues not at retail but at wholesale and in the
abstract. There is no fully developed record which can impart to adjudication the
impact of actuality. There is no factual foundation to show in the concrete the
application of the law to actual contracts and exemplify its effect on property rights. For the
fact is that petitioner's members have not even been assessed the VAT. Petitioner's case is
not made concrete by a series of hypothetical questions asked which are no different from
those dealt with in advisory opinions.

(b) Goods used for personal consumption or use (household and

personal effects of citizens returning to the Philippines) and or
professional use, like professional instruments and implements, by
persons coming to the Philippines to settle here.

The difficulty confronting petitioner is thus apparent. He alleges

arbitrariness. A mere allegation, as here, does not suffice. There must be
a factual foundation ofsuch unconstitutional taint. Considering that
petitioner here would condemn such a provision as void on its face, he
has not made out a case. This is merely to adhere to the authoritative
doctrine that where the due process and equal protection clauses are
invoked, considering that they are not fixed rules but rather broad
standards, there is a need for proof of such persuasive character as
would lead to such a conclusion. Absent such a showing, the
presumption of validity must prevail.cdta

(c) Goods subject to excise tax such as petroleum products or to be used

for manufacture of petroleum products subject to excise tax and services
subject to percentage tax. cdt
(d) Educational services, medical, dental, hospital and veterinary
services, and services rendered under employer-employee relationship.
(e) Works of art and similar creations sold by the artist himself.

(Sison, Jr. v. Ancheta, 130 SCRA at 661)

136

Adjudication of these broad claims must await the development of a concrete case. It may be
that postponement of adjudication would result in a multiplicity of suits. This need not be the
case, however. Enforcement of the law may give rise to such a case. A test case, provided it is
an actual case and not an abstract or hypothetical one, may thus be presented.

1. The goals of the national economy are a more equitable

distribution ofopportunities, income, and wealth; a sustained increase in
the amount of goods and services produced by the nation for the
benefit of the people; and an expanding productivity as the key to raising
the quality of life for all, especially the underprivileged. aisadc

Nor is hardship to taxpayers alone an adequate justification for adjudicating abstract issues.
Otherwise, adjudication would be no different from the giving of advisory opinion that does not
really settle legal issues.

The State shall promote industrialization and full employment based on

sound agricultural development and agrarian reform, through industries
that make full and efficient use of human and natural resources, and
which are competitive in both domestic and foreign markets. However, the
State shall protect Filipino enterprises against unfair foreign competition
and trade practices.

We are told that it is our duty under Art. VIII, 1, (2) to decide whenever a claim is made that
"there has been a grave abuse of discretion amounting to lack or excess ofjurisdiction on the
part of any branch or instrumentality of the government." This duty can only arise if an actual
case or controversy is before us. Under Art. VIII, 5 our jurisdiction is defined in
terms of "cases" and all that Art. VIII, 1 (2) can plausibly mean is that in the
exercise of that jurisdiction we have the judicial power to determine questions of grave
abuse of discretion by any branch or instrumentality of the government. cdta

In the pursuit of these goals, all sectors of the economy and all
regions of the country shall be given optimum opportunity to develop.
Private enterprises, including corporations, cooperatives, and similar
collective organizations, shall be encouraged to broaden the base of their
ownership.

Put in another way, what is granted in Art. VIII, 1 (2) is "judicial power," which is
"the power of a court to hear and decide cases pending between parties who have the right
to sue and be sued in the courts of law and equity" (Lamb v. Phipps, 22 Phil. 456, 559
[1912]), as distinguished from legislative and executive power. This power cannot be
directly appropriated until it is apportioned among several courts either by theConstitution,
as in the case of Art. VIII, 5, or by statute, as in the case of the Judiciary
Act of 1948 (R.A. No. 296) and the Judiciary Reorganization Act of 1980 (B.P. Blg. 129).
The power thus apportioned constitutes the court's "jurisdiction," defined as "the power
conferred by law upon a court or judge to take cognizance of a case, to the exclusion of all
others." (United States v. Arceo, 6 Phil. 29 [1906]) Without an actual case coming within its
jurisdiction, this Court cannot inquire into any allegation of grave abuse of discretion by the
other departments of the government.

15. The Congress shall create an agency to promote the

viability and growth of cooperatives as instruments for social justice and
economic development. cdtai
Petitioner's contention has no merit. In the first place, it is not true that P.D. No.
1955 singled out cooperatives by withdrawing their exemption from income and sales taxes
under P.D. No. 175, 5. What P.D. No. 1955, 1 did was to withdraw theexemptions and
preferential treatments theretofore granted to private business enterprises in general, in
view of the economic crisis which then beset the nation. It is true that after P.D. No. 2008,
2 had restored the tax exemptions of cooperatives in 1986, the exemption was again
repealed by E.O. No. 93, 1, but then again cooperatives were not the only ones whose
exemptions were withdrawn. The withdrawal of tax incentives applied to all, including
government and private entities. In the second place, the Constitution does not really
require that cooperatives be granted tax exemptions in order to promote their growth and
viability. Hence, there is no basis for petitioner's assertion that the government's policy
toward cooperatives had been one ofvacillation, as far as the grant of tax privileges was
concerned, and that it was to put an end to this indecision that the constitutional provisions
cited were adopted. Perhaps as a matter of policy cooperatives should be granted tax
exemptions, but that is left to the discretion of Congress. If Congress does not grant
exemption and there is no discrimination to cooperatives, no violation of any constitutional
policy can be charged.

VIII. Alleged violation of policy towards cooperatives. On the other hand, the
Cooperative Union of the Philippines (CUP), after briefly surveying the course oflegislation,
argues that it was to adopt a definite policy of granting tax exemption to cooperatives that
the present Constitution embodies provisions on cooperatives. To subject cooperatives to
the VAT would therefore be to infringe a constitutional policy. Petitioner claims that in
1973, P.D. No. 175 was promulgated exempting cooperatives from the payment of income
taxes and sales taxes but in 1984, because of the crisis which menaced the national
economy, this exemption was withdrawn by P.D. No. 1955; that in 1986, P.D. No.
2008 again granted cooperatives exemption from income and sales taxes until December
31, 1991, but, in the same year, E.O. No. 93 revoked the exemption; and that finally in 1987
the framers of the Constitution "repudiated the previous actions of the government adverse
to the interests of the cooperatives, that is,the repeated revocation of the tax exemption to
cooperatives and instead upheld the policy of strengthening the cooperatives by way of the
grant of tax exemptions," by providing the following in Art. XII:

Indeed, petitioner's theory amounts to saying that under

the Constitutioncooperatives are exempt from taxation. Such theory is contrary to

137

the Constitutionunder which only the following are exempt from taxation: charitable
institutions, churches and parsonages, by reason of Art. VI, 28 (3), and non-stock, nonprofit educational institutions, by reason of Art. XIV, 4 (3).

Panganiban, J ., took no part. Petitioner in G.R. No. 115873 is a former client.

||| (Tolentino v. Secretary of Finance, G.R. No. 115455, 115525, 115543, 115544, 115754,
115781, 115852, 115873, 115931 (Resolution), [October 30, 1995], 319 PHIL 755-803)

CUP's further ground for seeking the invalidation of R.A. No. 7716 is that it
denies cooperatives the equal protection of the law because electric cooperatives are
exempted from the VAT. The classification between electric and other cooperatives (farmers
cooperatives, producers cooperatives, marketing cooperatives, etc.) apparently rests on a
congressional determination that there is greater need to provide cheaper electric power to
as many people as possible, especially those living in the rural areas, than there is to
provide them with other necessities in life. We cannot say that such classification is
unreasonable. cdasia
We have carefully read the various arguments raised against the constitutional
validity of R.A. No. 7716. We have in fact taken the extraordinary step of enjoining its
enforcement pending resolution of these cases. We have now come to the conclusion that
the law suffers from none of the infirmities attributed to it by petitioners and that its
enactment by the other branches of the government does not constitute a grave
abuse of discretion. Any question as to its necessity, desirability or expediency must be
addressed to Congress as the body which is electorally responsible, remembering that, as
Justice Holmes has said, "legislators are the ultimate guardians of the liberties and
welfare of the people in quite as great a degree as are the courts." (Missouri, Kansas &
Texas Ry, Co. v. May, 194 U.S. 267, 270, 48 L. Ed. 971, 973 [1904]) It is not right, as
petitioner in G.R. No. 115543 does in arguing that we should enforce the public
accountability of legislators, that those who took part in passing the law in question by
voting for it in Congress should later thrust to the courts the burden of reviewing measures
in the flush of enactment. This Court does not sit as a third branch of the legislature, much
less exercise a veto power over legislation.
WHEREFORE, the motions for reconsideration are denied with finality and the
temporary restraining order previously issued is hereby lifted. LLjur
SO ORDERED.
EN BANC

Narvasa, C .J ., Feliciano, Melo, Kapunan, Francisco and Hermosisima, Jr., JJ ., concur.

[G.R. No. L-52265. January 28, 1980.]

Padilla and Vitug, JJ ., maintain their separate opinion.

SAMUEL C. OCCEA, petitioner, vs. COMMISSION ON ELECTIONS,

COMMISSION ON AUDIT, NATIONAL TREASURER, and DIRECTOR OF
PRINTING, respondents.

Regalado, Romero, Bellosillo and Puno, JJ ., maintain their dissenting opinion.

Davide, Jr., J ., maintains his dissent. Grants Motion for Reconsideration.

Occea Law Office for petitioner.

138

Office of the Solicitor General for respondents.

Committee on Transitory Provisions of October 13, 1972 does not support his contention that the
Interim Batasang Pambansa has no power to call local elections. The purported report refers to
the interimNational Assembly in Article XVII, the convening of which was rejected by the Filipino
people. As We stated in Peralta v. Commission on Elections: 4

DECISION
ANTONIO, J p:

"It should be recalled that under the terms of the Transitory Provisions of
theConstitution, the membership of the interim National Assembly would
consist of the Incumbent President and Vice-President, the Senators and
the Representatives of the old Congress and the Delegates to the
Constitutional Convention who have opted to serve therein. The Filipino
people rejected the convening of the interimNational Assembly, and for a
perfectly justifiable reason.

Petition for prohibition seeking to restrain respondents from implementing Batas Pambansa Blg.
51 (providing for the elective and/or appointive positions in various local governments), 52
(governing the election of local government officials scheduled on January 30, 1980), 53
(defining the rights and privileges of accredited parties), and 54 (providing for a plebiscite,
simultaneously with the election of local officials on January 30, 1980, regarding the proposed
amendment of Article X, Section 7, of the 1973 Constitution). The constitutional issues raised
are: (1) whether or not the Interim Batasang Pambansa has the power to authorize the holding of
local elections; (2) assuming it has such power, whether it can authorize said elections without
enacting a local government code; (3) assuming it may validly perform the foregoing, whether it
can schedule such elections less than ninety (90) days from the passage of the enabling law;
and (4) assuming, further, that the proposed amendment to Article X, Section 7 of the
Constitution is valid, whether the plebiscite can be legally held together with the local elections.
The thrust of petitioner's arguments is that these issues should be resolved in the negative.

"By September of 1976, the consensus had emerged for a referendum

partaking of the character of a plebiscite which would be held to establish
the solid foundation for the next step towards normalizing the political
process. By the will of the people, as expressed overwhelmingly in the
plebiscite of October 15 and 16, 1976, Amendments Nos. 1 to 9 were
approved, abolishing the interim National Assembly and creating in its
stead an interim Batasang Pambansa. This was intended as a
preparatory and experimental step toward the establishment of full
parliamentary government as provided for in the Constitution." (at p. 61).

After deliberating on the memoranda and arguments adduced by both parties at the hearing on
January 15, 1980, the Court finds no merit in the petition.

In the search for the meaning of the language of the Constitution, reference may be made to the
historical basis of the provisions. The historical events and circumstances which led to the
ratification of Amendments Nos. 1 to 9 of the Constitution show the manifest intent and desire of
the people to establish, during the period of transition, a government that can effectively provide
for the nation's peaceful and orderly transition from a crisis to a full parliamentary system of
government. cdasia

1. The legislative power granted by Section 1, Article VIII of the Constitution to the National
Assembly has been explicitly vested during the period of transition on the Interim Batasang
Pambansa by Amendment No. 2 to the Constitution. The only limitation is that it shall not
exercise its treaty ratification powers provided in Article VIII, Section 14(1) of the Constitution.
The legislative power has been described generally as being a power to make, alter and repeal
laws. 1 It is the peculiar province of the legislature to prescribe general rules for the government
of society. The essential of the legislative function is the determination of the legislative policy
and its formulation and promulgation as a defined and binding rule of conduct. 2 It is a
recognized principle in constitutional law that the legislative body possesses plenary power for
all purposes of civil government. The legislative power of the Interim Batasang Pambansa is,
therefore, complete, subject only to the limitation that the Interim Batasang Pambansa shall not
exercise the power of the National Assembly in the ratification of treaties. 3 The power to
regulate the manner of conducting elections, to prescribe the form of the official ballot, and to
provide for the manner in which candidates shall be chosen is inherently and historically
legislative. Petitioner has not cited any provision of the Constitution, as amended by the
Amendments of 1976, which expressly or by implication deny to the Interim Batasang Pambansa
the authority to call for local elections. It is a well established rule that where no exception is
made in terms, none will be made by mere implication or construction. The wordings of a
constitutional provision do not have a narrow or contracted meaning, but are used in a broad
sense, with a view of covering all contingencies. Petitioner's invocation of the Report of the

2. Neither can We find in Section 1, Article XI of the Constitution any requirement that the
enactment of a local government code is a condition sine qua non for the calling of the local
elections by the Interim Batasang Pambansa. Indeed, the holding of local elections does not, in
any manner, preclude the enactment of a local government code by the Batasang Pambansa at
some later period. There cannot be any doubt that our local governments are basic and
fundamental units in our democratic institutions. To strengthen these institutions, the election of
local officials should be periodically held. 5Accordingly, this Court is not inclined to adopt such a
technical or strained construction as will unduly impair the efficiency of the Interim Batasang
Pambansa in meeting the challenges and discharging its responsibilities in response to the
problems arising in a modernizing and dynamic society. The legislative decision to call for local
elections in order to enable the Filipino people to exercise their sovereign right to choose their
local officials cannot, therefore, be faulted as a violation of the Constitution.

139

3. Section 6 of Article XII of the Constitution does not fix an unalterable period of ninety (90)
days for an election campaign. This provision must be construed in relation to Section 5 of
Article XII thereof which grants to the Commission on Elections the power to supervise or
regulate the operation of transportation, public utilities, media of communication, etc. during the
"election period". Section 6 fixes the "election period" by stating that unless fixed by the
Commission in special cases, the election period shall commence ninety (90) days before the
day of election and shall end thirty (30) days thereafter. In Peralta v. Commission on
Elections, supra, We resolved, in effect, this issue by holding that the forty-five day period of
campaign prescribed in Section 4 of the 1978 Election Code was not violative of Section 6 of
Article XII of the Constitution.
4. Considering that the proposed amendment to Section 7 of Article X of the Constitution
extending the retirement of members of the Supreme Court and judges of inferior courts from
sixty-five (65) to seventy (70) years is but a restoration of the age of retirement provided in
the 1935 Constitution and has been intensively and extensively discussed at the Interim
Batasang Pambansa, as well as through the mass media, it cannot, therefore, be said that our
people are unaware of the advantages and disadvantages of the proposed amendment.

EN BANC
[G.R. No. 56503. April 4, 1981.]
RAMON MITRA, JR., NAPOLEON RAMA, EMMANUEL T. SANTOS,
ERNIE RONDON, ANTONIO MARTINEZ, JEJOMAR BINAY, RODRIGO
H. MELCHOR, JOAQUIN (Titong) ROCES, RAFAEL YAP, and MEL
LOPEZ, petitioners, vs.COMMISSION ON ELECTIONS, respondent.

ACCORDINGLY, the petition is DISMISSED. This decision is immediately executory. LibLex

SO ORDERED.
Makasiar, Aquino, Concepcion Jr., Abad Santos, De Castro and Melencio-Herrera, JJ .,concur.

Napoleon Rama, Emmanuel T. Santos, Rodrigo H. Melchor, Julie David

Felicianoand Juan T. David for petitioners.

Fernando, C .J ., concurs with the opinion insofar as the Court found no merit in the petition
seeking to declare unconstitutional Batas Pambansa Blg. 51, 52 and 53 and takes no part as far
as the challenge to Batas Pambansa Blg. 54 is concerned.

The Solicitor General for respondent.

SYNOPSIS

Teehankee, J ., reserves his vote.

Petitioners assail the validity of the 1973 Constitution and pray for the holding of a plebiscite for
the people to vote anew on the ratification of the same and in the event it is rejected, that
the 1935 Constitution be declared once again operative with the lifting of martial law on January
17, 1981.

Barredo, Fernandez and Guerrero, JJ ., agree with the opinion of the Court penned by Justice
Felix Q. Antonio and Chief Justice Fernando certifies.
||| (Occea v. Commission on Elections, G.R. No. L-52265, [January 28, 1980], 184 PHIL 591597)

The Supreme Court dismissed the petition citing the significance of the decision in Javellana v.
Executive Secretary, L-36142, March 3, 1973 declaring the 1973 Constitution in force and the
role of the President as Commander-in-chief daring the period of martial law.
SYLLABUS
1. CONSTITUTIONAL LAW; SUPREME COURT; POWER OF JUDICIAL REVIEW. By virtue
of the prerogative of judicial review, the Supreme Court either checks or legitimates the acts of a

140

coordinate department, challenged in an appropriate legal proceeding. The decision rendered

then, whether one of approval or of rejection, of validity or unconstitutionality, is controlling.

5. ID.; ID.; COMMANDER-IN-CHIEF CLAUSE. The provision of the 1935 Constitutionby

virtue of which martial law was declared reads as follows: "The President shall be commanderin-chief of all armed forces of the Philippines and whenever it becomes necessary, he may call
out such armed forces to prevent or suppress lawless violence, invasion, insurrection, or
rebellion. or imminent danger thereof, when the public safety requires it, he may suspend the
privileges of the writ of habeas corpus, or place the Philippines or any part thereof under martial
law."

2. ID.; ID.; ID.; INTERPRETATION OF THE WRITTEN CONSTITUTION. The function of

judicial review, as observed by Justice Laurel in the leading case of Angara vs. Electoral
Commission, 63 Phil. 139 (1936), reflects the adoption of the American type of constitutional
government "where the written constitution is interpreted and given effect by the judicial
department."

6. ID.; ID.; ID.; POWER OF THE PRESIDENT TO DECLARE MARTIAL LAW. The
commander-in-chief clause is traceable to the United States Constitution, which however does
not empower the American President to declare martial law. It is quite apparent that the framers
of the 1935 Constitution, including some of the greatest legal luminaries of the Philippines, all
devoted to the concept of civilian supremacy, expanded the commander-in-chief clause on the
assumption that the President, as the highest civilian authority, should not be bereft of
competence to deal with any danger to the State whether posed by external aggression or
internal subversion, He was thus empowered to suspend the privilege of the writ of habeas
corpus and to declare martial law.

3. ID.; 1973 CONSTITUTION; RATIFICATION; RECOGNITION BY THE JUDICIARY OF THE

PEOPLE'S ACCEPTANCE OF THE NEW CONSTITUTION. An excerpt in a separate opinion
in Javellana v. Executive Secretary, L-36142, March 3, 1973, reads: "Independently of the lack of
validity of the ratification of the new Constitution, if it be accepted by the people, in whom
sovereignty resides according to the Constitution, then this Court cannot refuse to yield assent to
such a political decision of the utmost gravity, conclusive in its effect. Such a fundamental
principle is meaningless if it does not imply, to follow Laski, that the nation as a whole constitutes
the 'single center of ultimate reference,' necessarily the possessor of that 'power that is able to
resolve disputes by saying the last word.' If the origins of the democratic polity enshrined in
the 1935 Constitution with the declaration that the Philippines is a republican state could be
traced back to Athens and to Rome, it is no doubt true, as Melver pointed out, that only with the
recognition of the nation as the separate political unit in public law is there the juridical
recognition of the people composing it 'as the source of political authority.' From them, as Corwin
did stress, emanate the highest possible embodiment of human will,' which is supreme and must
be obeyed. To avoid any confusion and in the interest of clarity, it should be expressed in the
manner ordained by law. Even if such were not the case, however, once it is manifested, it is to
be accepted as final and authoritative. The government which is merely an agency to register its
commands has no choice but to submit. Its officials must act accordingly. No agency is exempt
from such a duty, not even this Court. In that sense, the lack of regularity in the method
employed to register its wishes is not fatal in its consequences. Once the fact of acceptance by
the people of a new fundamental law is made evident, the judiciary is left with no choice but to
accord it recognition. The obligation to render obeisance falls on the courts as well."

7. ID.; ID.; ID.; POWER GE THE PRESIDENT TO PROMULGATE LAWS AND DECREES
DURING MARTIAL LAW. In Aquino, Jr. v, Commission on Elections, L-40004, January 31,
1975. the Supreme Court held: "We affirm the proposition that as Commander-in-Chief and
enforcer or administrator of martial law, the incumbent President of the Philippines can
promulgate proclamations, orders and decrees during the period of Martial Law essential to the
security and preservation of the Republic, to the defense of the political and social liberties of the
people and to the institution of reforms to prevent the resurgence of rebellion or insurrection or
secession or the threat thereof as well as to meet the impact of a worldwide recession, inflation
or economic crisis which presently threatens all nations including highly developed countries."
8. ID.; ID.; ID.; EXERCISE BY THE SUPREME COURT OF THE POWER OF JUDICIAL
REVIEW DURING THE PERIOD OF MARTIAL LAW. The judiciary, during the period of
martial law from September 21, 1972 to January 17,1981, performed its functions and
discharged its responsibility as a separate branch of the government. It never ceased all the
while to exercise the power of judicial review. The validity of the proclamation of martial law was
challenged and unanimously upheld in Aquino, Jr. v. Commission on Elections. In Javellana v.
Executive Secretary, the transcendental issue posed was whether or not the 1973
Constitution was in force and effect, with the Court dismissing the petitions by a vote of six to
four and ruling by a vote of eight to two that there was "no further judicial obstacle to the New
Constitution being considered in force and effect." In Aquino, Jr. v. Commission on Elections, the
question raised was as to the competence of the President to issue orders and decrees having
the force and effect of law, with the Court ruling that he could do so.

4. ID.; ID.; ID.; EVENTS RECOGNIZING THE MANIFEST FORCE AND EFFECT OF THE
PRESENT CONSTITUTION. Aside from the referendum that led to the ratification of the
present Constitution, there was a second one held on July 27 and 28 in 1973 (P.D. 229), and
another on February 27 and 28 in 1975 (Proc. No. 1366 as amended by Proc. No. 1366-A). The
1976 amendments to the Constitution were adopted in the referendum held on October 16 and
17 of that year. (P.D. 991) Then on December 17, 1977, there was again held a referendum.
(P.D. 1229) The fact that the people went to the polls would be indicative of their acquiescence in
the present Constitution. Two elections have been held under the present Constitution, one for
members of the Interim Batasang Pambansa on April 7, 1978 and the other for local government
officials on January 30, 1980. In the face of the above clearly-manifested recognition of the force
and effect of the presentConstitution, by the people, including those in the opposition, it would
seem that any argument to the contrary should be consigned to a well-merited limbo.

9. ID.; ID.; ID.; ID.; CASES ASSAILING THE VALIDITY OF PRESIDENTIAL ACTS. There are
two other decisions equally signifying that this Court had never been hesitant to assume
jurisdiction in cases assailing the validity of Presidential acts. The first is Aquino, Jr. v. Military

141

Commission, L-37364, May 9, 1975, where the power of the President to create a military
commission with jurisdiction to try civilians for certain specified offenses connected with the
rebellion, was sustained. The other is Sanidad v. Commission on Elections, L-44640, October
12, 1976, where the authority of the President to propose amendments to the Constitution, the
interim National Assembly not having been convened, was sanctioned. It is not to be lost sight of
either that in Dumlao v. Commission on Elections, L-52245, decided on January 22, 1980, while
martial law was still in force, this Court nullified a portion of Section 4 of Batas Pambansa Blg.
52, which would consider the filing of charges for the commission of any crime arising from acts
of disloyalty or amounting to subversion, insurrection, or rebellion, before the Civil Court or
military tribunal after preliminary investigation as prima facie evidence of such fact. There can be
no justification then for the reckless assertion that upon the proclamation of martial law and while
it was in force, constitutionalism, in terms of the exercise of the power of judicial review and
respect for individual rights, no longer held sway in the Philippines.

Constitution stands as the supreme law of the land, by which the validity and constitutionality of
official acts are tested.
3. ID.; POWERS OF THE PRESIDENT UNDER MARTIAL LAW; EXTENT AND LIMITATIONS.
Justice Teehankee maintains his dissent in Aquino, Jr. vs. Comelec (62 SCRA 275, January
31,1975) that "even from the declared Presidential objective of using Martial Law powers to
institutionalize reforms and to remove the causes of rebellion, such powers by their very nature
and from the plain language of the Constitution are limited to such necessary measures as will
safeguard the Republic and suppress the rebellion (or invasion) and measures directly
connected with removing the root cause thereof, such as the tenant emancipation proclamation.
The concept of martial law may not be expanded, as the main opinion does, to cover the lesser
threats of 'world-wide recession, inflation or economic crisis which presently threatens all
nations' in derogation of the Constitution. ''If the concept of martial law were to be so expanded,
and with the world always in crisis, there would be no end to martial law.

TEEHANKEE, J., dissenting:

DECISION

1. CONSTITUTIONAL LAW; 1973 CONSTITUTION; RATIFICATION; DOCTRINE OF FAIR AND

PROPER SUBMISSION IN TOLENTINO vs. COMELEC (41 SCRA 702); BASIS FOR
SUBMITTING ANEW OF 1973 CONSTITUTION FOR RATIFICATION OF THE PEOPLE.
Justice Teehankee votes to give due course to petitioners' petition praying for the holding of a
plebiscite for the people to vote anew on the ratification of the 1973 Constitution for the same
reasons in his dissent in Occea vs. Comelec and Gonzales vs. National Treasurer, particularly
that the controlling doctrine of fair and proper submission as laid down by the Court in Tolentino
vs. Comelec (41 SCRA 702 and Resolution denying motion for reconsideration dated November
4, 1971) specially in the light of the proposed complex, complicated and radical changes of our
structure of government requires that the people be given adequate time and information as to
the amendments to be voted upon for their conscientious deliberation and intelligent consent or
rejection.

FERNANDO, C.J p:
In essence, this petition for mandamus and prohibition is not dissimilar from the prohibition
proceedings just dismissed filed respectively by former delegates Samuel C. Occea and
Ramon A. Gonzales. 1 All three suits proceed on the assumption that the present Constitution is
not in force and effect. There is this variation. In the last two paragraphs of this petition, the plea
is made for the holding of a plebiscite so that the people may vote on the ratification of the
Constitution, now in force, but as to them still in the stage of proposal. In the event it is rejected,
so their thinking goes, then the 1935 Constitution, which in the view of petitioners was
suspended by the establishment of an authoritarian regime by the Commander-in-Chief of the
Armed Forces after the proclamation of martial law, could be once more operative with the lifting
of martial law on January 17, 1981. As in the Occea and Gonzales petitions, there is what was
therein referred to as "rather unorthodox aspect" in "the assertion that the 1973 Constitution is
not the fundamental law, the Javellana ruling to the contrary notwithstanding." 2 This excerpt
from the opinion is, therefore, fully applicable: "To put it at its mildest, such an approach has the
arresting charm of novelty but nothing else. It is in fact self-defeating, for if such were indeed
the case, petitioners have come to the wrong forum. We sit as a Court duty-bound to uphold and
apply that Constitution. To contend otherwise as was done here would be, quite clearly, an
exercise in futility." 3

2. ID.; RULE OF LAW; DISMISSAL BY MAJORITY OF MEMBERS OF SUPREME COURT OF

PETITION CHALLENGING VALIDITY OF PRESIDENT'S PROCLAMATION OF RATIFICATION
AND OF COMING INTO EFFECT OF 1973 CONSTITUTION; EFFECT THEREOF. With a
majority of six votes dismissing the petition challenging the validity of the President's
proclamation of ratification and of coming into effect of the 1973 Constitution (Javellana vs.
Executive Secretary, et al., 50 SCRA 30 March 31, 1973), the entire Supreme Court and
particularly the dissenting Justices bare had to abide under the Rule of Law by the dismissal
decision of the majority and to recognize and operate under the 1973 Constitution as the
fundamental charter of the government and the people. Justice Teehankee expressly stated this
in his separate opinion in the 1974 Martial Law Cases, Aquino, Jr. vs. Enrile (59 SCRA 183,
September 17, 1974). Unless the Javellana ruling is overturned by the Supreme Court itself and
the passage and attrition of time show the futility of expecting such a contingency, the 1973

A similar judgment is thus indicated. The petition must be dismissed. If there is a further
expression of view on the part of the Court, it is to clear the misapprehension that seems to be
current in certain legal quarters about the import of the Javellana decision 4 and the role of the
President as Commander-in-Chief during the period of martial law. cdll

142

1. What is the ruling in Javellana v. Executive Secretary? 5 Rightfully, it is ranked by eminent

jurists and academicians abroad as one of the most significant manifestations of the exercise of
the function of judicial review. Apparently, this awesome and delicate power has implications still
not adequately grasped. By virtue of this prerogative, the Supreme Court either checks or
legitimates the acts of a coordinate department, challenged in an appropriate legal proceeding.
The decision rendered then, whether one of approval or of rejection, of validity or of
unconstitutionality, is controlling. To go back to Javellana v. Executive Secretary. The ruling
cannot be any clearer. The dispositive portion reads: "[Accordingly], by virtue of the majority of
six (6) votes of Justices Makalintal, Castro, Barredo, Makasiar, Antonio and Esguerra with the
four (4) dissenting votes of the Chief Justice and Justices Zaldivar, Fernando and Teehankee, all
the aforementioned cases are hereby dismissed. This being the vote of the majority, there is no
further judicial obstacle to the new Constitution being considered in force and effect." 6 As far as
there being "no further judicial obstacle" to the operative character of the 1973 Constitution,
there can be no doubt that such is the view of eight of the ten members of the Court. Petitioners
apparently did not take note of the immediately preceding paragraph of the opinion of the then
Chief Justice Concepcion, who, while one of the dissenters, spoke for the Court on the voting:
"On the fifth question of whether the new Constitution of 1973 is in force: Four (4) members of
the Court, namely, Justices Barredo, Makasiar, Antonio and Esguerra hold that it is in force by
virtue of the people's acceptance thereof; Four (4) members of the Court, namely, Justices
Makalintal, Castro, Fernando and Teehankee cast no vote thereon on the premise stated in their
votes on the third question that they could not state with judicial certainty whether the people
have accepted or not accepted the Constitution; and two (2) members of the Court, namely,
Justice Zaldivar and myself voted that the Constitution proposed by the 1971 Constitutional
Convention is not in force; with the result that there are not enough votes to declare that the new
Constitution is not in force." 7 Both the statements of "there being no further judicial obstacle" as
well as the negative form in which mention is made of there being "not enough votes to declare
that the new Constitution" is not in force reflect the traditional mode in which constitutional issues
are passed upon in accordance with the American concept of judicial review. The function of
judicial review, as observed by Justice Laurel in the leading case of Angara v.Electoral
Commission, 8 reflects the adoption of the American type of constitutional government" where
the written constitution is interpreted and given effect by the judicial department." 9 In the event
therefore that the decision rendered may give rise to doubts and perplexities, there is comfort
and assurance in the thought expressed by the same eminent jurist in another leading case of
Villena v. Secretary of Interior: 10 "Familiarity with the essential background of the type of
government established under our Constitution, in the light of certain well-known principles and
practices that go with the system, should offer the necessary explanation." 11 One of such
practices is the manner in which the dispositive portion of a decision in a suit contesting the
validity of a legislative or executive act is worded. It was noted that Justice Holmes had a
penchant for the double negative. A favorite phrase of his was that the statute "was not
unconstitutional." That is of the essence of judicial review. For one of its basic postulates is the
presumption of validity. The burden of proof is thus on the person assailing the action taken by a
coordinate branch. There is no need therefore of an affirmative finding as to its being
constitutional. It suffices that it has not been shown to be otherwise. It is likewise by virtue of
such presumption that Justice Malcolm correctly asserted: "To doubt is to sustain." 12 Scholars

in the field of constitutional law have even gone further. They maintain that when the Supreme
Court or some members thereof whose votes are crucial deem the question raised as a
political 13 and not judicial resulting in the dismissal of the action, there was, even then, a
manifestation of the power of judicial review at work. The Court, by ruling that it was without
jurisdiction, allowed the political branches to have their way. In that sense, to use a favorite
phrase of Thomas Reed Powell, the Court was silently vocal and not silently silent. In Javellana,
the Court assumed jurisdiction, but only two of the ten members then were of the view and so
voted that the 1973 Constitution is not in force. There is no affront to logic, it would seem, for us
to dismiss the petitions and accordingly rule that "there is no further judicial obstacle to the new
Constitution being considered in force and effect." As was pointed out in the joint decision in the
Occea and Gonzales petitions: "That is the meaning of the concluding statement in Javellana.
Since then, this Court has invariably applied the present Constitution. The latest case in point is
People v.Sola, promulgated barely two weeks ago. During the first year alone of the effectivity of
the present Constitution, at least ten cases may be cited." 14
2. Nor is this all. The scholarly opinion of then Chief Justice Roberto Concepcion, while in
dissent, acknowledged that even without valid ratification, a new constitution could come into
force and effect by the acquiescence of the people, referring in particular to the leading case of
Taylor v. Commonwealth. 15 Other cases may be cited. 16 There is this excerpt in a separate
opinion in Javellana: "Independently of the lack of validity of the ratification of the new
Constitution, if it be accepted by the people, in whom sovereignty resides according to the
Constitution, then this Court cannot refuse to yield to assent to such a political decision of the
utmost gravity, conclusive in its effect. Such a fundamental principle is meaningless if it does not
imply, to follow Laski, that the nation as a whole constitutes the 'single center of ultimate
reference,' necessarily the possessor of that 'power that is able to resolve disputes by saying the
last word.' If the origins of the democratic polity enshrined in the 1935 Constitution with the
declaration that the Philippines is a republican state could be traced back to Athens and to
Rome, it is no doubt true, as McIver pointed out, that only with the recognition of the nation as
the separate political unit in public law is there the juridical recognition of the people composing
it' as the source of political authority.' From them, as Corwin did stress, emanate 'the highest
possible embodiment of human will,' which is supreme and must be obeyed. To avoid any
confusion and in the interest of clarity, it should be expressed in the manner ordained by law.
Even if such were not the case, however, once it is manifested, it is to be accepted as final and
authoritative. The government which is merely an agency to register its commands has no
choice to submit. Its officials must act accordingly. No agency is exempt from such a duty, not
even this Court. In that sense, the lack of regularity in the method employed to register its wishes
is not fatal in its consequences. Once the fact of acceptance by the people of a new fundamental
law is made evident, the judiciary is left with no choice but to accord it recognition. The obligation
to render obeisance falls on the courts as well." 17 Even petitioners must be aware that aside
from the referendum that led to the ratification of the present Constitution, there was a second
one held on July 27 and 28 in 1973, 18 and another on February 27 and 28 in 1975. 19 The
1976 amendments to the Constitution were adopted in the referendum held on October 16 and
17 of that year. 20 Then on December 17, 1977, there was again held a referendum.21 The fact
that the people went to the polls would be indicative of their acquiescence in the

143

present Constitution. Nor could petitioners be unaware that two elections have been held under
the present Constitution, one for members of the Interim Batasang Pambansa on April 7, 1978
and the other for local government officials on January 30, 1980. In the face of the above clearlymanifested recognition of the force and effect of the presentConstitution, by the people, including
those in the opposition, it would seem that any argument to the contrary should be consigned to
a well-merited limbo. prcd

partial to the Willoughby approach. 44 There is this modification though as announced in

the ponenciaof Justice Makasiar in Aquino, Jr. v. Commission on Elections: 45 "We affirm the
proposition that as Commander-in-Chief and enforcer or administrator of martial law, the
incumbent President of the Philippines can promulgate proclamations, orders and decrees
during the period of Martial Law essential to the security and preservation of the Republic, to the
defense of the political and social liberties of the people and to the institution of reforms to
prevent the resurgence of rebellion or insurrection or secession or the threat thereof as well as to
meet the impact of a worldwide recession, inflation or economic crisis which presently threatens
all nations including highly developed countries." 46 That is the extent of the influence exerted by
the view of Rossiter. 47 There is thus adherence to the pronouncement of Justice Black in the
above-cited Duncan v. Kahanamoku, 48 a case of Hawaiian origin: "Legislatures and courts are
not merely cherished American institutions; they are indispensable to our
government." 49 The Interim Batasang Pambansa was provided for in the 1976 Amendments to
the Constitution, the opening sentence of its first section reading: "There shall be, in lieu of
the interim National Assembly, an interimBatasang Pambansa." 50 The judiciary, during the
period of martial law from September 21, 1972 to January 17, 1981, performed its functions and
discharged its responsibility as a separate branch of the government. It never ceased all the
while to exercise the power of judicial review. The validity of the proclamation of martial law was
challenged and unanimously upheld in Aquino, Jr. v. Commission on Elections. 51 Mention had
already been made of Javellana v. Executive Secretary 52 where, as noted, the transcendental
issue posed was whether or not the 1973 Constitution was in force and effect, with the Court
dismissing the petitions by a vote of six to four and ruling by a vote of eight to two that there was
"no further judicial obstacle to the New Constitution being considered in force and effect," and
Aquino, Jr. v. Commission on Elections, 53 where the question raised was as to the competence
of the President to issue orders and decrees having the force and effect of law, with the Court
ruling that he could do so, the ratio decidendi being the aforesaid excerpt quoted from
the ponencia of Justice Makasiar. 54 There are two other decisions equally signifying that this
Court had never been hesitant to assume jurisdiction in cases assailing the validity of
Presidential Acts. The first is Aquino Jr. v. Military Commission, 55 where the power of the
President to create a military commission with jurisdiction to try civilians for certain specified
offenses connected with the rebellion, was sustained, the opinion being penned by Justice
Antonio. 56 The other is Sanidad v.Commission on Elections, 57 where the authority of the
President to propose amendments to the Constitution, the interim National Assembly not having
been convened, was sanctioned. 58 It is not to be lost sight of either that in
Dumlao v. Commission on Elections,59 decided on January 22, 1980, while martial law was still
in force, this Court nullified a portion of Section 4 of Batas Pambansa Blg. 52, which would
consider the filing of charges for the commission of any crime arising from acts of disloyalty or
amounting to subversion, insurrection, or rebellion, before the Civil Court or military tribunal after
preliminary investigation as prima facie evidence of such fact. Justice Melencio-Herrera was
the ponente. 60

3. There is an even graver misapprehension of the significance of the President being the
Commander-in-Chief of the Armed Forces and the restricted concept of martial law as known to
American jurisprudence well-nigh authoritative in this jurisdiction. The provision of the 1935
Constitution by virtue of which martial law was declared reads as follows: "The President shall
be commander-in-chief of all armed forces of the Philippines and, whenever it becomes
necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion,
insurrection, or rebellion. In case of invasion, insurrection, or rebellion, or imminent danger
thereof, when the public safety requires it, he may suspend the privileges of the writ of habeas
corpus, or place the Philippines or any part thereof under martial law." 22 The commander-inchief clause is traceable to the United States Constitution, 23 which however does not empower
the American President to declare martial law. It is quite apparent that the framers of the 1935
Constitution, including some of the greatest legal luminaries of the Philippines, all devoted to the
concept of civilian supremacy, expanded the commander-in-chief clause on the assumption that
the President, as the highest civilian authority, should not be bereft of competence to deal with
any danger to the State whether posed by external aggression or internal subversion. He was
thus empowered to suspend the privilege of the writ of habeas corpus and to declare martial law.
At any rate, there was nothing novel in such a provision as far as the Philippines is concerned. It
owed its origin to the Philippine Autonomy Act of 1916, more popularly known as the Jones
Law, 24 which was in turn based on the Organic Act of Hawaii of 1899. 25 State Constitutions of
Massachusetts, 26New Hampshire, 27 Rhode
Island, 28 Vermont, 29 Maine, 30 Maryland, 31 Tennessee, 32 West Virginia, 33 and
Alaska 34 likewise contain martial law provisions. Neither the Colorado nor the
Texas Constitution has a provision of that character, in the former the privilege of the writ could
be suspended 35 and in the latter a statute was enacted to enable its Governor to do so. 36 As
interpreted by the American Supreme Court in the leading cases of Moyerv. Peabody, 37 the
opinion coming from Justices Holmes, and Sterling v. Constantin, 38 with Chief Justice Hughes
as ponente, these two decisions along with that of Duncan v.Kahanamoku, 39 made clear that
martial law as understood in American jurisprudence is subject to judicial scrutiny and thus far
from being all-encompassing. To be more specific, martial law, according to Willoughby, "goes
no further than to warn citizens that the military powers have been called upon by the executive
to assist him in the maintenance of law and order, and that, while the emergency lasts, they must
upon pain of arrest and punishment, not commit any acts which will in any way render more
difficult the restoration of order and enforcement of law." 40 Burdick, 41 Willis, 42 and
Schwartz 43 wrote in the same vein. Parenthetically, it may be observed that President
Ferdinand E. Marcos announced in a speech in Hawaii on April 22, 1980 that the Philippines is

4. There can be no justification then for the reckless assertion that upon the proclamation of
martial law and while it was in force, constitutionalism, in terms of the exercise of the power of
judicial review and respect for individual rights, no longer held sway in the Philippines. It was

144

Justice Lionel Keith Murphy, of the High Court of Australia, whose advocacy of a written bill of
rights for his country has won him an international reputation as a devoted and eloquent
champion of human rights who was the Second Comparative Law Lecturer of the Integrated Bar
of the Philippines. In that lecture, he appraised the role of this Court during martial law thus:
"The judicial system in the Philippines had undergone difficult times, and much stress has been
placed on it by the necessity to resolve great issues arising in a series of cases: The AntiSubversion, The Plebiscite, The Ratification, The Martial Law, the Referendum, The Right to
Counsel and the Military Tribunal Cases." 61 He said further: "Throughout these cases, one can
observe with admiration, the concern of the judiciary to maintain the fundamental liberties of the
people even under the most difficult conditions." 62 He continued his appraisal of the work of the
Supreme Court during martial law thus: "Violations of human rights have occurred and do occur
in the Philippines. Violations of human rights have occurred and do occur in Australia. I will
mention some shortly. They occur in the United States and elsewhere. But the Philippines and
the United States have courts which are able to enforce mandatory provisions in the Bill of
Rights. Your Supreme Court does so daily, openly and in reasoned decision given by your
Justices." 63 To paraphrase a recognized authority in American Constitutional law and one of
the most respected American legal scholars, Professor Paul A. Freund, it is not too much to
expect of any counsel appearing before the Supreme Court that there should be on his part a
certain degree of awareness of the pitfalls and delusions of certitude in view of the complexity of
the strands in the web of constitutionalism which the Court must disentangle. 64 There is still
much to be said of this aphorism of Justice Holmes: "Certitude is not the test of certainty." In the
field of constitutional law, the need for reexamining the continuing validity of doctrines in the light
of changing circumstances cannot be denied. Familiarity with such doctrines, to refer anew to
what was stated by Justice Laurel, is, however, a prime requisite. LLjur

EN BANC
[G.R. No. 59524. February 18, 1985.]
JOVITO R. SALONGA, petitioner, vs. HON. ERNANI CRUZ PAO,
Presiding Judge of the Court of First Instance of Rizal, Branch XVIII
(Quezon City), HON. JUDGE RODOLFO ORTIZ, Presiding Judge of
the Court of First Instance of Rizal, Branch XXXI (Quezon City) CITY
FISCAL SERGIO APOSTOL of Quezon City; COL. BALBINO DIEGO
and COL. ROMAN MADELLA, respondents.
Salonga, Ordoez, Yap, Corpuz, and Padlan for petitioner.
Solicitor General for respondents.
SYLLABUS
1. REMEDIAL LAW; SPECIAL CIVIL ACTION; CERTIORARI; DENIAL OF A MOTION TO
QUASH OR TO DISMISS CANNOT BE QUESTIONED BY CERTIORARI; RULE NOT
APPLICABLE WHERE THERE IS FAILURE TO SHOW PRIMA FACIE THAT A PERSON IS
GUILTY. The respondents call for adherence to the consistent rule that the denial of a motion
to quash or to dismiss, being interlocutory in character, cannot be questioned by certiorari; that
since the question of dismissal will again be considered by the court when it decides the case,
the movant has a plain, speedy and adequate remedy in the ordinary course of law; and that
public interest dictates that criminal prosecutions should not be enjoined. The general rule is
correctly stated. However, the respondents fail to appreciate or take into account certain
exceptions when a petition for certiorari is clearly warranted. The case at bar is one such
exception. In the light of the failure to show prima facie that the petitioner was probably guilty of
conspiring to commit the crime, the initial disregard of petitioner's constitutional rights together
with the massive and damaging publicity made against him, justifies the favorable consideration
of this petition by this Court.

WHEREFORE, the petition is dismissed for lack of merit.

Barredo, Makasiar, Aquino, Concepcion Jr., Fernandez, Guerrero, De Castro and MelencioHerrera, JJ., concur.
Abad Santos, J., is on official leave.
||| (Mitra, Jr. v. Commission on Elections, G.R. No. 56503, [April 4, 1981], 191 PHIL 412-434)

2. ID.; EVIDENCE; "PRIMA FACIE EVIDENCE"; EVIDENCE MUST BE SUFFICIENT TO

OVERCOME PRESUMPTION OF INNOCENCE. Infinitely more important than conventional
adherence to general rules of criminal procedure is respect for the citizen's fight to be free not
only from arbitrary arrest and punishment but also from unwarranted and vexatious prosecution.
The integrity of a democratic society is corrupted if a person is carelessly included in the trial of
around forty persons when on the very face of the record no evidence linking him to the alleged
conspiracy exists. The term "prima facie evidence" denotes evidence which, if unexplained or
uncontradicted, is sufficient to sustain the proposition it supports or to establish the facts, or to
counterbalance the presumption of innocence to warrant a conviction.

145

3. ID.; ID.; HEARSAY RULE; TESTIMONY BASED ON ANOTHER PERSON'S AFFIDAVITS

ARE HEARSAY AND HAS NO PROBATIVE VALUE; INQUEST JUDGE SHOULD CONFINE
INVESTIGATION TO SOLE WITNESS. Col. Diego, on the other hand, when asked what
evidence he was able to gather against the petitioner depended only on the statement of Lovely
"that it was the residence of ex-Senator Salonga where they met together with Renato Tanada,
one of the brains of the bombing conspiracy . . . and the fact that Sen.Salonga has been meeting
with several subversive personnel based in the U.S.A. was also revealed to me by Victor Burns
Lovely"; and on the group pictures taken at former Congressman Raul Daza's birthday party. In
concluding that a conspiracy exists to overthrow by violent means the government of the
Philippines in the United States, his only bases were "documentary as well as physical and
sworn statements that were referred to me or taken by me personally," which of course negate
personal knowledge on his part. Testimony based on affidavits of other persons and purely
hearsay, can hardly qualify as prima facie evidence of subversion. It should not have been given
credence by the court in the first place. Hearsay evidence, whether objected to or not, has no
probative value as the affiant could not have been cross-examined on the facts stated therein.
(See People v. Labinia, 115 SCRA 223; People v. Valero, 112 SCRA 661). Moreover, as Victor
Lovely, himself, was personally examined by the court, there was no need for the testimony of
Col. Diego. Thus, the inquest judge should have confined his investigation to Victor Burns
Lovely, the sole witness whose testimony has apparently implicated petitioner in the bombings
which eventually led to the filing of the information.

6. ID.; ID.; PHOTOGRAPH; PRESENCE IN A GROUP PICTURE IS NOT PROOF OF

CONSPIRACY. The presence of Lovely in a group picture taken at Mr. Raul Daza's birthday
party in Los Angeles where Senator Salonga was a guest is not proof of conspiracy. As stated by
the petitioner, in his many years in the turbulent world of politics, he has posed with all kind of
people in various groups and various places and could not possibly vouch for their conduct.
Commenting on the matter, newspaper columnist Teodoro Valencia stated that Filipinos love to
pose with important visitors and the picture proves nothing. More credible and stronger evidence
is necessary for an indictment. Nonetheless, even if we discount the flaws in Lovely's testimony
and dismiss the refutations and arguments of the petitioner, the prosecution evidence is still
inadequate to establish a prima facie finding.
7. CONSTITUTIONAL LAW; BILL OF RIGHTS; FREEDOM OF THOUGHT AND EXPRESSION;
OPINION ON THE LIKELIHOOD OF A VIOLENT STRUGGLE, A LEGITIMATE EXERCISE OF
FREEDOM. The alleged opinion of the petitioner about the likelihood of a violent struggle
here in the Philippines if reforms are not instituted, assuming that he really stated the same, is
nothing but a legitimate exercise of freedom of thought and expression. No man deserves
punishment for his thoughts. Cogitationis poenam nemo meretur. And as the late Justice Oliver
W. Holmes stated in the case of U .S. v. Schwimmer, 279 U.S. 644, ". . . if there is any principle
of the Constitution that more imperatively calls for attachment than any other it is the principle of
free thought not free thought for those who agree with us but freedom for the thought that we
hate."

4. ID.; ID.; INDICTING A PERSON BECAUSE PLOTTERS MET IN HIS HOUSE, A

DANGEROUS PRECEDENT. The jump from the "contact point" theory to the conclusion of
involvement in subversive activities in the United States is not only inexplicable but without
foundation. The respondents admit that no evidence was presented directly linking
petitioner Salonga to actual acts of violence or terrorism. There is no proof of his direct
participation in any overt acts of subversion. The "contact point" theory or what the petitioner
calls the "guilt by visit or guilt by association" theory is too tenuous a basis to conclude that
Senator Salonga was a leader or mastermind of the bombing incidents. To indict a person simply
because some plotters, masquerading as visitors, have somehow met in his house or office
would be to establish a dangerous precedent. The right of citizens to be secure against abuse of
governmental processes in criminal prosecutions would be seriously undermined.

8. ID.; ID.; ID.; A PREFERRED RIGHT; POLITICAL DISCUSSION CANNOT BE INDICTED.

We have adopted the concept that freedom of expression is a "preferred" right and, therefore,
stands on a higher level than substantive economic or other liberties. The primacy, the high
estate accorded freedom of expression is a fundamental postulate of our constitutional system.
(Gonzales v. Commission on Elections, 29 SCRA 835). As explained by Justice Cardozo
in Palko v. Connecticut (302 U.S. 319) this must be so because the lessons of history, both
political and legal, illustrate that freedom of thought and speech is the indispensable condition of
nearly every other form of freedom. Protection is especially mandated for political discussions.
This Court is particularly concerned when allegations are made that restraints have been
imposed upon mere criticisms of government and public officials. Political discussion is essential
to the ascertainment of political truth. It cannot be the basis of criminal indictments. In the case
before us, there is no teaching of the moral propriety of a resort to violence, much less an
advocacy of force or a conspiracy to organize the use of force against the duly constituted
authorities. The alleged remark about the likelihood of violent struggle unless reforms are
instituted is not a threat against the government. Nor is it even the uninhabited, robust, caustic,
or unpleasantly sharp attack which is protected by the guarantee of free speech. Parenthetically,
the American case of Brandenburg v. Ohio (395 U.S. 444) states that the constitutional
guarantees of free speech and free press do not permit a State to forbid or proscribe advocacy
of the use of force or of law violation except where such advocacy is directed to inciting or
producing imminent lawless action and is likely to incite or produce such action. The words
which petitioner allegedly used according to the best recollection of Mr. Lovely are light years
away from such type of proscribed advocacy.

5. ID.; ID.; CREDIBILITY OF WITNESSES; TESTIMONY THAT PETITIONER WHO WAS DEAF
AND ANOTHER WHISPERED TO EACH OTHER IS INCONSISTENT. The testimony of
Victor Lovely against petitioner Salonga is full of inconsistencies. Senator Salonga and Atty.
Renato Tanada could not have whispered to one another because the petitioner is almost totally
deaf. Lovely could not have met Senator Salonga at a Manglapus party in Washington, D.C.
in 1977 because the petitioner left for the United States only inNovember, 1978.
Senator Salonga denies having known Mr. Lovely in the United States or in the Philippines. He
states that he has hundred of visitors from week to week in his residence but cannot recall any
Victor Lovely.

146

9. REMEDIAL LAW; EVIDENCE; STATEMENT THAT HIS MISSION WAS AGAINST A

PARTICULAR FAMILY NEGATES POLITICALLY MOTIVATED ASSIGNMENT. Lovely also
declared that he had nothing to do with the bombing on August 22, 1980, which was the only
bombing incident that occurred after his arrival in Manila on August 20, 1980, and before the
YMCA explosion on September 6, 1980. He further testified that: (his) bombing mission was
directed against the particular family (referring to the Cabarrus family). Such a statement wholly
negates any politically motivated or subversive assignment which Lovely was supposed to have
been commissioned to perform upon the orders of his co-accused and which was the very
reason why they were charged in the first place.

13. CONSTITUTIONAL LAW; BILL OF RIGHTS; EXTENT OF CONSTITUTIONAL

GUARANTEE; COURT'S FUNCTION IS TO EDUCATE BENCH AND BAR THEREON. The
setting aside or declaring void, in proper cases, of intrusions of State authority into areas
reserved by the Bill of Rights for the individual as constitutionally protected spheres where even
the awesome powers of Government may not enter at will is not the totality of the Court's
functions. The Court also has the duty to formulate guiding and controlling constitutional
principles, precepts, doctrines, or rules. It has the symbolic function of educating bench and bar
on the extent of protection given by constitutional guarantees.
DECISION

10. ID.; ID.; BY ADOPTING DEFENSE WITNESS AS ITS OWN, PROSECUTION IS BOUND BY
HIS DISCLAIMER. It should be noted that after Lovely's testimony, the prosecution
manifested to the court that is was adopting him as a prosecution witness. Therefore, the
prosecution became irreversibly bound by Lovely's disclaimers on the witness stand, that it was
not his intention "to do some kind of bombing against the government" and that he "did not try to
implicate Salonga," especially since Lovely is the sole witness adopted by the prosecution who
could supposedly establish the link between the petitioner and the bombing incidents. The
respondent court should have taken these factors into consideration before concluding that a
prima facie case exists against the petitioner.

GUTIERREZ, JR., J p:
The petitioner invokes the constitutionally protected right to life and liberty guaranteed by the due
process clause, alleging that no prima facie case has been established to warrant the filing of an
information for subversion against him. Petitioner asks this Court to prohibit and prevent the
respondents from using the iron arm of the law to harass, oppress, and persecute him, a
member of the democratic opposition in the Philippines.
The background of this case is a matter of public knowledge.

11. ID.; ID.; EVIDENCE MUST COME NOT ONLY FROM A CREDIBLE WITNESS BUT MUST
BE CREDIBLE IN ITSELF. Evidence must not only proceed from the mouth of a credible
witness but it must be credible in itself such as the common experience and observation of
mankind can approve as probable under the circumstances. (People v. Dayad, 56 SCRA 439) In
the case at bar, the prosecution cannot even present a credible version of the petitioner's role in
the bombings even if it ignores the subsequent disclaimers of Lovely and without relying on mere
affidavits including those made by Lovely during his detention.

A rash of bombings occurred in the Metro Manila area in the months of August, September and
October of 1980. On September 6, 1980, one Victor Burns Lovely, Jr., a Philippine-born
American citizen from Los Angeles, California, almost killed himself and injured his younger
brother, Romeo, as a result of the explosion of a small bomb inside his room at the YMCA
building in Manila. Found in Lovely's possession by police and military authorities were several
pictures taken sometime in May, 1980 at the birthday party of former Congressman Raul Daza
held at the latter's residence in a Los Angeles suburb. Petitioner Jovito R. Salonga and his wife
were among those whose likenesses appeared in the group pictures together with other guests,
including Lovely.

12. ID.; CRIMINAL PROCEDURE; PRELIMINARY INVESTIGATION; PURPOSE; TRIAL JUDGE

HAS DUTY TO SPARE ACCUSED FROM PAIN OF TRIAL IF THERE IS INSUFFICIENT
EVIDENCE. The purpose of a preliminary investigation is to secure the innocent against
hasty, malicious and oppressive prosecution, and to protect him from an open and public
accusation of crime, from the trouble, expense and anxiety of a public trial, and also to protect
the state from useless and expensive trials. (Trocio v. Manta, 118 SCRA 241, citing Hashim v.
Boncan, 71 Phil. 216) The right to a preliminary investigation is a statutory grant, and to withhold
it would be to transgress constitutional due process. (See People v. Oandasa, 25 SCRA 277)
However, in order to satisfy the due process clause it is not enough that the preliminary
investigation is conducted in the sense of making sure that a transgressor shall not escape with
impunity. A preliminary investigation serves not only the purposes of the State. More important, it
is a part of the guarantees of freedom and fair play which are birthrights of all who live in our
country. It is, therefore, imperative upon the fiscal or the judge as the case may be, to relieve the
accused from the pain of going through a trial once it is ascertained that the evidence is
insufficient to sustain a prima facie case or that no probable cause exists to form a sufficient
belief as to the guilt of the accused.

As a result of the serious injuries he suffered, Lovely was brought by military and police
authorities to the AFP Medical Center (V. Luna Hospital) where he was place in the custody and
detention of Col. Roman P. Madella, under the over-all direction of General Fabian Ver, head of
the National Intelligence and Security Authority (NISA). Shortly afterwards, Mr. Lovely and his
two brothers, Romeo and Baltazar Lovely where charged with subversion, illegal possession of
explosives, and damage to property.
On September 12, 1980, bombs once again exploded in Metro Manila including one which
resulted in the death of an American lady who was shopping at Rustan's Supermarket in Makati
and others which caused injuries to a number of persons.

147

On September 20, 1980, the President's anniversary television radio press conference was
broadcast. The younger brother of Victor Lovely, Romeo, was presented during the conference.
In his interview, Romeo stated that he had driven his elder brother, Victor, to the petitioner's
house in Greenhills on two occasions. The first time was on August 20, 1980. Romeo stated that
Victor did not bring any bag with him on that day when he went to the petitioner's residence and
did not carry a bag when he left. The second time was in the afternoon of August 31, 1980 when
he brought Victor only to the gate of the petitioner's house. Romeo did not enter the petitioner's
residence. Neither did he return that day to pick up his brother. cdll

Subsequently, on November 27, 1980, the petitioner was released for humanitarian reasons from
military custody and placed "under house arrest in the custody of Mrs. LydiaSalonga" still without
the benefit of any investigation or charges.
On December 10, 1980, the Judge Advocate General sent the petitioner a "Notice of Preliminary
Investigation" in People v. Benigno Aquino, Jr., et al. (which included petitioner as a co-accused),
stating that "the preliminary investigation of the above-entitled case has been set at 2:30 o'clock
p.m. on December 12, 1980" and that petitioner was given ten (10) days from receipt of the
charge sheet and the supporting evidence within which to file his counter-evidence. The
petitioner states that up to the time martial law was lifted on January 17, 1981, and despite
assurance to the contrary, he has not received any copies of the charges against him nor any
copies of the so-called supporting evidence.

The next day, newspapers came out with almost identical headlines stating in effect that
petitioner had been linked to the various bombings in Metro Manila.
Meanwhile, on September 25, 1980, Lovely was taken out of the hospital's intensive care unit
and transferred to the office of Col. Madella where he was held incommunicado for sometime.

On February 9, 1981, the records of the case were turned over by the Judge Advocate General's
Office to the Ministry of Justice.

On the night of October 4, 1980, more bombs were reported to have exploded at three big hotels
in Metro Manila, namely: Philippine Plaza, Century Park Sheraton and Manila Peninsula. The
bombs injured nine people. A meeting of the General Military Council was called for October 6,
1980.

On February 24, 1981, the respondent City Fiscal filed a complaint accusing petitioner, among
others of having violated Republic Act No. 1700, as amended by P.D. 885 and Batas Pambansa
Blg. 31 in relation to Article 142 of the Revised Penal Code. The inquest court set the preliminary
investigation for March 17, 1981.

On October 19, 1980, minutes after the President had finished delivering his speech before the
International Conference of the American Society of Travel Agents at the Philippine International
Convention Center, a small bomb exploded. Within the next twenty-four hours, arrest, search,
and seizure orders (ASSOs) were issued against persons who were apparently implicated by
Victor Lovely in the series of bombings in Metro Manila. One of them was herein petitioner Victor
Lovely offered himself to be a "state witness" and in his letter to the President, he stated that he
will reveal everything he knows about the bombings.

On March 6, 1981, the petitioner was allowed to leave the country to attend a series of church
conferences and undergo comprehensive medical examinations of the heart, stomach, liver, eye
and ear including a possible removal of his left eye to save his right eye.
Petitioner Salonga almost died as one of the principal victims of the dastardly bombing of a
Liberal Party rally at Plaza Miranda on August 20, 1971. Since then, he has suffered serious
disabilities. The petitioner was riddled with shrapnel and pieces still remain in various parts of his
body. He has an AV fistula caused by a piece of shrapnel lodged one millimeter from his aorta.
The petitioner has limited use of his one remaining hand and arms, is completely blind and
phthisical in the left eye, and has scar like formations in the remaining right eye. He is totally deaf
in the right ear and partially deaf in the left ear. The petitioner's physical ailments led him to seek
treatment abroad. Cdpr

On October 21, 1980, elements of the military went to the hospital room of the petitioner at the
Manila Medical Center where he was confined due to his recurrent and chronic ailment of
bronchial asthma and placed him under arrest. The arresting officer showed the petitioner the
ASSO form which however did not specify the charge or charges against him. For some time,
the petitioner's lawyers were not permitted to visit him in his hospital room until this Court in the
case of Ordoez v. Gen. Fabian Ver, et al., (G.R. No. 55345, October 28, 1980) issued an order
directing that the petitioner's right to be visited by counsel be respected.

On or around March 26,1981, the counsel for petitioner was furnished a copy of an amended
complaint signed by Gen. Prospero Olivas, dated March 12, 1981, charging the petitioner, along
with 39 other accused with the violation of R.A. 1700, as amended by P.D. 885, Batas
Pambansa Blg. 31 and P.D. 1736. Hearings for preliminary investigation were conducted. The
prosecution presented as its witnesses Ambassador Armando Fernandez, the Consul General of
the Philippines in Los Angeles, California, Col. Balbino Diego, PSC/NISA, Chief, Investigation
and Legal Panel of the Presidential Security Command and Victor Lovely himself.

On November 2, 1980, the petitioner was transferred against his objections from his hospital
arrest to an isolation room without windows in an army prison camp at Fort Bonifacio, Makati.
The petitioner states that he was not informed why he was transferred and detained, nor was he
ever investigated or questioned by any military or civil authority.

148

On October 15, 1981, the counsel for petitioner filed a motion to dismiss the charges against
petitioner for failure of the prosecution to establish a prima facie case against him.

". . . Respondents advert to the rule that when a motion to quash filed by
an accused in a criminal case shall be denied, the remedy of the
accused-movant is not to file a petition for certiorari or mandamus or
prohibition, the proper recourse being to go to trial, without prejudice to
his right to reiterate the grounds invoked in his motion to quash if an
adverse judgment is rendered against him, in the appeal that he may take
therefrom in the manner authorized by law. (Mill v. People, et al., 101 Phil.
599; Echarol v. Purisima, et al., 13 SCRA 309.)

On December 2, 1981, the respondent judge denied the motion. On January 4, 1982, he issued
a resolution ordering the filing of an information for violation of the Revised Anti-Subversion Act,
as amended, against forty (40) people, including herein petitioner.
The resolutions of the respondent judge dated December 2, 1981 and January 4, 1982 are now
the subject of the petition. It is the contention of the petitioner that no prima facie case has been
established by the prosecution to justify the filing of an information against him. He states that to
sanction his further prosecution despite the lack of evidence against him would be to admit that
no rule of law exists in the Philippines today.

On this argument, we ruled:

"There is no disputing the validity and wisdom of the rule invoked by the
respondents. However, it is also recognized that. under certain situations,
recourse to the extraordinary legal remedies of certiorari, prohibition or
mandamus to question the denial of a motion to quash is considered
proper in the interest of 'more enlightened and substantial justice', as was
so declared in 'Yap v. Lutero', G.R. No. L-12669, April 30, 1969."

After a painstaking review of the records, this Court finds the evidence offered by the
prosecution utterly insufficient to establish a prima facie case against the petitioner. We grant the
petition.
However, before going into the merits of the case, we shall pass upon a procedural issue raised
by the respondents.

Infinitely more important than conventional adherence to general rules of criminal procedure is
respect for the citizen's right to be free not only from arbitrary arrest and punishment but also
from unwarranted and vexatious prosecution. The integrity of a democratic society is corrupted if
a person is carelessly included in the trial of around forty persons when on the very face of the
record no evidence linking him to the alleged conspiracy exists.

The respondents call for adherence to the consistent rule that the denial of a motion to quash or
to dismiss, being interlocutory in character, cannot be questioned by certiorari; that since the
question of dismissal will again be considered by the court when it decides the case, the movant
has a plain, speedy and adequate remedy in the ordinary course of law; and that public interest
dictates that criminal prosecutions should not be enjoined.

Ex-Senator Jovito Salonga, himself a victim of the still unresolved and heinous Plaza Miranda
bombings, was arrested at the Manila Medical Center while hospitalized for bronchial asthma.
When arrested, he was not informed of the nature of the charges against him. Neither was
counsel allowed to talk to him until this Court intervened through the issuance of an order
directing that his lawyers be permitted to visit him (Ordoez v. Gen. Fabian Ver, et al., G.R. No.
55345, October 28, 1980). Only after four months of detention was the petitioner informed for the
first time of the nature of the charges against him. After the preliminary investigation, the
petitioner moved to dismiss the complaint but the same was denied. Subsequently, the
respondent judge issued a resolution ordering the filing of an information after finding that a
prima facie case had been established against all of the forty persons accused.

The general rule is correctly stated. However, the respondents fail to appreciate or take into
account certain exceptions when a petition for certiorari is clearly warranted. The case at bar is
one such exception.
In the case of Mead v. Angel (115 SCRA 256) the same contentions were advanced by the
respondents to wit:
xxx xxx xxx

In the light of the failure to show prima facie that the petitioner was probably guilty of conspiring
to commit the crime, the initial disregard of petitioner's constitutional rights together with the
massive and damaging publicity made against him, justifies the favorable consideration of this
petition by this Court. With former Senator Benigno Aquino, Jr. now deceased, there are at least
38 other co-accused to be tried with the petitioner. The prosecution must present proof beyond
reasonable doubt against each and every one of the 39 accused, most of whom have varying
participations in the charge for subversion. The prosecution's star witness Victor Lovely and the
only source of information with regard to the alleged link between the petitioner and the series of

149

terrorist bombings is now in the United States. There is reason to believe the petitioner's citation
of international news dispatches ** that the prosecution may find it difficult if not infeasible to
bring him back to the Philippines to testify against the petitioner. If Lovely refused to testify before
an American federal grand jury how could he possibly be made to testify when the charges
against the respondent come up in the course of the trial against the 39 accused. Considering
the foregoing, we find it in the interest of justice to resolve at this stage the issue of whether or
not the respondent judge gravely abused his discretion in issuing the questioned resolutions.

always to travel to the United States at least once a

year or more often under the pretext of to undergo
some sort of operation and participate in some sort of
seminar. (t.s.n., April 21, 1981, pp. 14-15)
Such testimony, being based on affidavits of other persons and purely hearsay, can hardly
qualify as prima facie evidence of subversion. It should not have been given credence by the
court in the first place. Hearsay evidence, whether objected to or not, has no probative value as
the affiant could not have been cross-examined on the facts stated therein. (See People v.
Labinia, 115 SCRA 223; People v. Valero, 112 SCRA 661). Moreover, as Victor Lovely, himself,
was personally examined by the court, there was no need for the testimony of Col. Diego. Thus,
the inquest judge should have confined his investigation to Victor Burns Lovely, the sole witness
whose testimony had apparently implicated petitioner in the bombings which eventually led to the
filing of the information.

The respondents contend that the prosecution will introduce additional evidence during the trial
and if the evidence, by then, is not sufficient to prove the petitioner's guilt, he would anyway be
acquitted. Yes, but under the circumstances of this case, at what cost not only to the petitioner
but to the basic fabric of our criminal justice system?
The term "prima facie evidence" denotes evidence which, if unexplained or uncontradicted, is
sufficient to sustain the proposition it supports or to establish the facts, or to counterbalance the
presumption of innocence to warrant a conviction. The question raised before us now is: Were
the evidences against the petitioner uncontradicted and if they were unexplained or
uncontradicted, would they, standing alone, sufficiently overcome the presumption of innocence
and warrant his conviction?

Lovely's account of the petitioner's involvement with the former's bombing mission is found in his
sworn statement made before Col. Diego and Lt. Col. Madella and taken on October 17, 1980 at
the AFP Medical Center. Lovely was not presented as a prosecution or state witness but only as
a defense witness for his two younger brothers, Romeo and Baltazar, who were both included in
the complaint but who were later dropped from the information. Victor Lovely was examined by
his counsel and cross-examined by the fiscal. In the process, he identified the statement which
he made before Col. Diego and Lt. Col. Madella. After Lovely's testimony, the prosecution made
a manifestation before the court that it was adopting Lovely as a prosecution witness.

We do not think so.

The records reveal that in finding a case against the petitioner, the respondent judge relied only
on the testimonies of Col. Balbino Diego and Victor Lovely. Ambassador Armando Fernandez,
when called upon to testify on subversive organizations in the United States nowhere mentioned
the petitioner as an organizer, officer or member of the Movement for Free Philippines (MFP), or
any of the organizations mentioned in the complaint. Col. Diego, on the other hand, when asked
what evidence he was able to gather against the petitioner depended only on the statement of
Lovely "that it was the residence of ex-Senator Salonga where they met together with Renato
Taada, one of the brains of the bombing conspiracy . . . and the fact that Sen. Salonga has
been meeting with several subversive personnel based in the U.S.A. was also revealed to me by
Victor Burns Lovely; " and on the group pictures taken at former Congressman Raul Daza's
birthday party. In concluding that a conspiracy exists to overthrow by violent means the
government of the Philippines in the United States, his only bases were "documentary as well as
physical and sworn statements that were referred to me or taken by me personally," which of
course negate personal knowledge on his part. When asked by the court how he would
categorize petitioner in any of the subversive organizations, whether petitioner was an organizer,
officer or a member, the witness replied: prcd

According to Lovely's statement, the following events took place:

"36. Q. Did Psinakis tell you where to stay?
"A. Yes, at first he told me to check-in at Manila Hotel or the Plaza
Hotel where somebody would come to contact me and
give the materials needed in the execution of my
mission. I thought this was not safe so I disagreed with
him. Mr. Psinakis changed the plan and instead told me
to visit the residence of Ex-Sen. Jovito Salonga as
often as I can and someone will meet me there to give
the materials I needed to accomplish my mission.
"37. Q. Did you comply as instructed?

"A. To categorize former Senator Salonga if he were an organizer,

he is an officer or he is a member, your Honor, please,
we have to consider the surrounding circumstances
and on his involvement: first, SenatorSalonga wanted

150

"A. Yes, I arrived in Manila on August 20, 1980 and stayed at the
residence of Mr. Johnny Chua, husband of my business
partner, then I went to the Hospital where I visited my
mother and checked-in at Room 303 of the YMCA at
Concepcion Street, Manila.
"38.

Q. Did you visit the residence of former

Jovito Salonga as directed by Psinakis?

the latest opposition group activities but it seems he is

well informed.
"41. Q. How long did you wait until that somebody arrived?
"A. About thirty (30) minutes.

Senator

"42. Q. What happened when the man arrived?

"A. I visited Sen. Salonga's place three (3) times, the first visit
was August 20 or 21, and the last was 4:00 P.M. of
August 31, 1980. In addition to these visits, I TALKED
to him on the phone about three or four times. On my
first visit, I told him 'I am expecting an attache case
from somebody which will be delivered to your house,'
for which Sen.Salonga replied 'Wala namang nagpunta
dito at wala namang attache case para sa iyo.'
However, if your attache case arrives, I'll just call you.' I
gave
him
my
number.
On
my
second
visit, Salonga said, 'I'll be very busy so just come back
on the 31st of August at 4 P.M.' On that date, I was with
friends at Batulao Resort and had to hurry back to be
atSalonga's place for the appointment. I arrived
at Salonga's place at exactly 4 P.M.

"A. This man arrived and I was greatly surprised to see Atty.
Renato Taada. Jovy Salonga was the one who met
him and as I observed parang nasa sariling bahay si
Taada nung dumating. They talked for five (5) minutes
in very low tones so I did not hear what they talked
about.
After
their
whispering
conversations,
Sen. Salonga left and at this time Atty. 'Nits' Taada
told me 'Nasa akin ang kailangan mo, nasa kotse.'
"43. Q. Were the materials given to you?
"A. When Sen. Salonga came back, we asked to be permitted to
leave and I rode in Atty. Nits Taada's old Pontiac car
colored dirty brown and proceeded to Broadway
Centrum where before I alighted, Atty. Taada handed
me a 'Puma' bag containing all the materials I needed.

"39. Q. What happened then?

xxx xxx xxx

"A. I was ushered to the sala by Mrs. Salonga and after five
minutes, Sen.Salonga joined me in the sala.
Sen. Salonga informed me that somebody will be
coming to give me the attache case but did not tell me
the name.

"45. Q. What were the contents of the Puma bag?

"A. Ten (10) pieces of Westclox pocket watch with screw and
wirings, ten (10) pieces electrical blasting caps 4"
length, ten (10) pieces non-electrical blasting caps 1"
length, nine (9) pieces volts dry cell battery, two (2)
improvised electrical testers, ten (10) plastic packs of
high explosive about 1 pound weight each.

"40. Q. Are there any subject matters you discussed while waiting
for that somebody to deliver your materials?
"A. Yes, Salonga asked if Sen. Aquino and I have met, I explained
to him the efforts of Raul Daza in setting up that
meeting but I have previous business commitments at
Norfolk, Virginia. I told him, however, that through the
efforts of Raul Daza, I was able to talk with Ninoy
Aquino in the airport telephone booth in San Francisco.
He also asked about Raul Daza, Steve Psinakis and

However, in his interview with Mr. Ronnie Nathanielz which was aired on Channel 4 on
November 8, 1980 and which was also offered as evidence by the accused, Lovely gave a
different story which negates the above testimony insofar as the petitioner's participation was
concerned:

151

xxx xxx xxx

COURT TO WITNESS:

"Q. Who were the people that you contacted in Manila and for
what purpose?

"Q. Mr. Witness, who invited you to the party?

"A. Raul Daza, your Honor.

"A. Before I left for the Philippines, Mr. Psinakis told me to checkin at the Manila Hotel or the Plaza Hotel, and
somebody would just deliver the materials I would
need. I disapproved of this, and I told him I would prefer
a place that is familiar to me or who is close to me. Mr.
Psinakis suggested the residence of Sen. Salonga.

"Q. Were you told that Mr. Salonga would be present in the party?
"A. I am really not quite sure, your Honor.
"Q. Alright. You said initially it was social but then it became
political. Was there any political action taken as a result
of the party?

"And so, I arrived in Manila on August 20, 1980, I made a call to

Sen.Salonga, but he was out. The next day I made a
call again. I was able to contact him. I made an
appointment to see him. I went to Sen.Salonga's house
the following day. I asked Sen. Salonga if someone had
given him an attache case for me. He said nobody.
Afterwards, I made three calls to Sen. Salonga.
Sen. Salonga told me 'call me again on the 31st of
August. I did not call him, I just went to his house on
the 31st of August at 4 P.M. A few minutes after my
arrival Atty. Renato Taada arrived. When he had a
chance to be near me, he (Atty. Taada) whispered to
me that he had the attache case and the materials I
needed in his car. These materials were given to me by
Atty. Taada when I alighted at the Broadway Centrum.'
(Emphasis supplied)

"A. Only political discussion, your Honor." (TSN, July 8, 1981, pp.
69-84)
Counsel for petitioner also asked Lovely whether in view of the latter's awareness of the physical
condition of petitioner, he really implicated petitioner in any of the bombings that occurred in
Metro Manila. The fiscal objected without stating any ground. In sustaining the objection, the
Court said:
"Sustained . . . The use of the word 'implicate' might expand the role of
Mr.Salonga. In other words, you are widening the avenue of Mr. Salonga's
role beyond the participation stated in the testimony of this witness about
Mr. Salonga, at least, as far as the evidence is concerned, I supposed, is
only being in the house of Mr.Salonga which was used as the contact
point. He never mentions Mr. Salongaabout the bombings. Now these
words had to be put in the mouth of this witness. That would be unfair to
Mr. Salonga." (TSN. July 8, 1981, p. 67)

During the cross-examination, counsel for petitioner asked Lovely about the so-called
destabilization plan which the latter mentioned in his sworn statement:

Respondent judge further said:

"Q. You mentioned in your statement taken on October 17, 1980,

marked Exhibit 'G' about the so-called destabilization
plan of Aquino. When you attended the birthday party
of Raul Daza wherein Jovito Salonga was also present,
was this destabilization plan as alleged by you already
formulated?

"COURT:
"As

WITNESS:
"A. Not to my knowledge.

152

the Court said earlier, the parts or portions

affecting Salonga only refers to the witness coming to
Manila already then the matter of . . . I have gone over
the
statement
and
there
is
no
mention
of Salongainsofar as activities in the United States is
concerned. I don't know why it concerns this crossexamination.

"ATTY. YAP:

"It is therefore clear that the prosecution's evidence has established facts
and circumstances sufficient for a finding that excludes a Motion to
Dismiss by respondent Salonga. The Movement for Free Philippines is
undoubtedly a force born on foreign soil, it appears to rely on the
resources of foreign entities, and is being (sic) on gaining ascendancy in
the Philippines with the use of force and for that purpose it has linked
itself with even communist organizations to achieve its end. It appears to
rely on aliens for its supporters and financiers."

"Because according to him, it was in pursuance of the plan that

he came to Manila.
"COURT:
"According to him it was Aquino, Daza, and Psinakis who asked
him to come here, but Salonga was introduced only
when he (Lovely) came here. Now, the tendency of the
question is also to connect Salonga to the activities in
the United States. It seems to be the thrust of the
questions.

The jump from the "contact point" theory to the conclusion of involvement in subversive activities
in the United States is not only inexplicable but without foundation.
The respondents admit that no evidence was presented directly linking petitioner Salongato
actual acts of violence or terrorism. There is no proof of his direct participation in any overt acts
of subversion. However, he is tagged as a leader of subversive organizations for two reasons

"COURT:
"In other words, the point of the Court as of the time when yon
asked him question, the focus on Salonga was only
from the time when he metSalonga at Greenhills. It was
the first time that the name of Salongacame up. There
was no mention of Salonga in the formulation of the
destabilization plan as affirmed by him. But you are
bringing this up although you are only cross-examining
for Salonga as if his (Lovely's) activities in the United
States affected Salonga." (TSN, July 8, 1981, pp. 7374)

(1) Because his house was used as a "contact point"; and

(2) Because "he mentioned some kind of violent struggle in the Philippines being most likely
should reforms be not instituted by President Marcos immediately."
The "contact point" theory or what the petitioner calls the "guilt by visit or guilt by association"
theory is too tenuous a basis to conclude that Senator Salonga was a leader or mastermind of
the bombing incidents. To indict a person simply because some plotters, masquerading as
visitors, have somehow met in his house or office would be to establish a dangerous precedent.
The right of citizens to be secure against abuse of governmental processes in criminal
prosecutions would be seriously undermined.

Apparently, the respondent judge wanted to put things in proper perspective by limiting the
petitioner's alleged "participation" in the bombing mission only to the fact that petitioner's house
was used as a "contact point" between Lovely and Taada, which was all that Lovely really
stated in his testimony.

The testimony of Victor Lovely against petitioner Salonga is full of inconsistencies.

SenatorSalonga and Atty. Renato Taada could not have whispered to one another because the
petitioner is almost totally deaf. Lovely could not have met Senator Salonga at a Manglapus
party in Washington, D.C. in 1977 because the petitioner left for the United States only
on November, 1978. Senator Salonga denies having known Mr. Lovely in the United States or in
the Philippines. He states that he has hundred of visitors from week to week in his residence but
cannot recall any Victor Lovely.

However, in the questioned resolution dated December 2, 1981, the respondent judge suddenly
included the "activities" of petitioner in the United States as his basis for denying the motion to
dismiss: LLpr
"On the activities of Salonga in the United States, the witness, Lovely, in
one of his statements declared: 'To the best of my recollection he
mentioned of some kind of violent struggle in the Philippines being most
likely should reforms be not instituted by President Marcos immediately.'

The presence of Lovely in a group picture taken at Mr. Raul Daza's birthday party in Los Angeles
where Senator Salonga was a guest is not proof of conspiracy. As stated by the petitioner, in his
many years in the turbulent world of politics, he has posed with all kinds of people in various
groups and various places and could not possibly vouch for their conduct. Commenting on the

153

matter, newspaper columnist Teodoro Valencia stated that Filipinos love to pose with important
visitors and the picture proves nothing.

"We do not believe that the kind of political hyperbole indulged in by

petitioner fits within that statutory term. For we must interpret the
language Congress chose against the background of a profound national
commitment to the principle that debate on public issues should be
uninhibited, robust, and wide open and that it may well include vehement,
caustic, and sometimes unpleasantly sharp attacks on government and
public officials. New York Times Co. v. Sullivan (376 U.S. 254). The
language of the political arena, like the language used in labor disputed is
often vituperative, abusive, and inexact. We agree with petitioner that his
only offense was a kind of very crude offensive method of stating a
political opposition to the President."

It is likewise probable that a national figure and former politician of Senator Salonga's stature
can expect guests and visitors of all kinds to be visiting his home or office. If a rebel or
subversive happens to pose with the petitioner for a group picture at a birthday party abroad, or
even visit him with others in his home, the petitioner does not thereby become a rebel or
subversive, much less a leader of a subversive group. More credible and stronger evidence is
necessary for an indictment. Nonetheless, even if we discount the flaws in Lovely's testimony
and dismiss the refutations and arguments of the petitioner, the prosecution evidence is still
inadequate to establish a prima facie finding.

In the case before us, there is no teaching of the moral propriety of a resort to violence, much
less an advocacy of force or a conspiracy to organize the use of force against the duly
constituted authorities. The alleged remark about the likelihood of violent struggle unless reforms
are instituted is not a threat against the government. Nor is it even the uninhibited, robust,
caustic, or unpleasantly sharp attack which is protected by the guarantee of free speech.
Parenthetically, the American case of Brandenburg v. Ohio (395 U.S. 444) states that the
constitutional guarantees of free speech and free press do not permit a State to forbid or
proscribe advocacy of the use of force or of law violation except where such advocacy is directed
to inciting or producing imminent lawless action and is likely to incite or produce such action. The
words which petitioner allegedly used according to the best recollections of Mr. Lovely are light
years away from such type of proscribed advocacy. llcd

The prosecution has not come up with even a single iota of evidence which could positively link
the petitioner to any proscribed activities of the Movement for Free Philippines or any subversive
organization mentioned in the complaint. Lovely had already testified that during the party of
former Congressman Raul Daza which was alleged to have been attended by a number of
members of the MFP, no political action was taken but only political discussion. Furthermore, the
alleged opinion of the petitioner about the likelihood of a violent struggle here in the Philippines if
reforms are not instituted, assuming that he really stated the same, is nothing but a legitimate
exercise of freedom of thought and expression. No man deserves punishment for his
thoughts. Cogitationis poenam nemo meretur. And as the late Justice Oliver W. Holmes stated in
the case of U.S. v. Schwimmer, 279 U.S. 644, ". . . if there is any principle of the Constitution that
more imperatively calls for attachment than any other it is the principle of free thought not free
thought for those who agree with us but freedom for the thought that we hate."

Political discussion even among those opposed to the present administration is within the
protective clause of freedom of speech and expression. The same cannot be construed as
subversive activities per se or as evidence of membership in a subversive organization.
Under Presidential Decree No. 885, Section 3, paragraph 6, political discussion will only
constitute prima facie evidence of membership in a subversive organization if such discussion
amounts to:

We have adopted the concept that freedom of expression is a "preferred" right and, therefore,
stands on a higher level than substantive economic or other liberties. The primacy, the high
estate accorded freedom of expression is a fundamental postulate of our constitutional system.
(Gonzales v. Commission on Elections, 29 SCRA 835). As explained by Justice Cardozo
in Palko v. Connecticut (302 U.S. 319) this must be so because the lessons of history, both
political and legal, illustrate that freedom of thought and speech is the indispensable condition of
nearly every other form of freedom. Protection is especially mandated for political discussions.
This Court is particularly concerned when allegations are made that restraints have been
imposed upon mere criticisms of government and public officials. Political discussion is essential
to the ascertainment of political truth. It cannot be the basis of criminal indictments.

"(6) Conferring with officers or other members of such association or

organization in furtherance of any plan or enterprise thereof."
As stated earlier, the prosecution has failed to produce evidence that would establish any link
between petitioner and any subversive organization. Even if we lend credence to Lovely's
testimony that a political discussion took place at Daza's birthday party, no proof whatsoever was
adduced that such discussion was in furtherance of any plan to overthrow the government
through illegal means. The alleged opinion that violent struggle is likely unless reforms are
instituted by no means shows either advocacy of or incitement to violence or furtherance of the
objectives of a subversive organization.

The United States Supreme Court in Noto v. United States (367 U.S. 290) distinguished between
the abstract teaching of the moral propriety or even moral necessity for a resort to force and
violence and speech which would prepare a group for violent action and steel it to such action.
In Watts v. United States (394 U.S. 705), the American court distinguished between criminal
threats and constitutionally protected speech.
It stated:

154

Lovely also declared that he had nothing to do with the bombing on August 22, 1980, which was
the only bombing incident that occurred after his arrival in Manila on August 20, and before the
YMCA explosion on September 6, 1980. (See TSN, pp. 63-63, July 8, 1981). He further testified
that:

The resolution dated January 4, 1982 suffers from the same defect. In this resolution, Lovely's
previous declarations about the bombings as part of the alleged destabilization plan and the
people behind the same were accorded such credibility by the respondent judge as if they had
already been proved beyond reasonable doubt. Cdpr

"WITNESS:
"Actually, it was not my intention to do
against the government. My
directed against the particular
Cabarrus family). [TSN, p. 11,
10]

The purpose of a preliminary investigation is to secure the innocent against hasty, malicious and
oppressive prosecution, and to protect him from an open and public accusation of crime, from
the trouble, expense and anxiety of a public trial, and also to protect the state from useless and
expensive trials. (Trocio v. Manta, 118 SCRA 241; citing Hashim v. Boncan, 71 Phil. 216). The
right to a preliminary investigation is a statutory grant, and to withhold it would be to transgress
constitutional due process. (See People v. Oandasa, 25 SCRA 277) However, in order to satisfy
the due process clause it is not enough that the preliminary investigation is conducted in the
sense of making sure that a transgressor shall not escape with impunity. A preliminary
investigation serves not only the purposes of the State. More important, it is a part of the
guarantees of freedom and fair play which are birthrights of all who live in our country. It is,
therefore, imperative upon the fiscal or the judge as the case may be, to relieve the accused
from the pain of going through a trial once it is ascertained that the evidence is insufficient to
sustain a prima facie case or that no probable cause exists to form a sufficient belief as to the
guilt of the accused. Although there is no general formula or fixed rule for the determination of
probable cause since the same must be decided in the light of the conditions obtaining in given
situations and its existence depends to a large degree upon the finding or opinion of the judge
conducting the examination, such a finding should not disregard the facts before the judge nor
run counter to the clear dictates of reasons (See La Chemise Lacoste, S.A. v. Fernandez, 129
SCRA 391). The judge or fiscal, therefore, should not go on with the prosecution in the hope that
some credible evidence might later turn up during trial for this would be a flagrant violation of a
basic right which the courts are created to uphold. It bears repeating that the judiciary lives up to
its mission by vitalizing and not denigrating constitutional rights. So it has been before. It should
continue to be so. (Mercado v. Court of First Instance of Rizal, 116 SCRA 93)

some kind of bombing

bombing mission was
family (referring to the
July 9, 1981] [Rollo, p.

Such a statement wholly negates any politically motivated or subversive assignment which
Lovely was supposed to have been commissioned to perform upon the orders of his co-accused
and which was the very reason why they were charged in the first place. The respondent judge
also asked Lovely about the possible relation between Cabarrus and petitioner:
"COURT:
"Q. Did you suspect any relation between Cabarrus and
Jovito Salonga, why did you implicate Jovito Salonga?
"A. No, your Honor. I did not try to implicate Salonga.
It should be noted that after Lovely's testimony, the prosecution manifested to the court that it
was adopting him as a prosecution witness. Therefore, the prosecution became irreversively
bound by Lovely's disclaimers on the witness stand, that it was not his intention "to do some kind
of bombing against the government" and that he "did not try to implicate Salonga", especially
since Lovely is the sole witness adopted by the prosecution who could supposedly establish the
link between the petitioner and the bombing incidents.

The Court had already deliberated on this case, a consensus on the Court's judgment had been
arrived at, and a draft ponencia was circulating for concurrences and separate opinions, if any,
when on January 18, 1985, respondent Judge Rodolfo Ortiz granted the motion of respondent
City Fiscal Sergio Apostol to drop the subversion case against the petitioner. Pursuant to
instructions of the Minister of Justice, the prosecution restudied its evidence and decided to seek
the exclusion of petitioner Jovito Salonga as one of the accused in the information filed under the
questioned resolution.

The respondent court should have taken these factors into consideration before concluding that
a prima facie case exists against the petitioner. Evidence must not only proceed from the mouth
of a credible witness but it must be credible in itself such as the common experience and
observation of mankind can approve as probable under the circumstances. (People v. Dayad, 56
SCRA 439). In the case at bar, the prosecution cannot even present a credible version of the
petitioner's role in the bombings even if it ignores the subsequent disclaimers of Lovely and
without relying on mere affidavits including those made by Lovely during his detention.

We were constrained by this action of the prosecution and the respondent Judge to withdraw the
draft ponencia from circulating for concurrences and signatures and to place it once again in the
Court's crowded agenda for further deliberations.
Insofar as the absence of a prima facie case to warrant the filing of subversion charges is
concerned, this decision has been rendered moot and academic by the action of the
prosecution.

155

Respondent Fiscal Sergio Apostol correctly points out, however, that he is not precluded from
filing new charges for the same acts because the petitioner has not been arraigned and double
jeopardy does not apply. In that sense, the case is not completely academic.

reiterate the rule, however, that this Court will not validate the filing of an information based on
the kind of evidence against the petitioner found in the records. prLL
WHEREFORE, the petition is DISMISSED for having become moot and academic.

Recent developments in this case serve to focus attention on a not too well known aspect of the
Supreme Court's functions.

SO ORDERED.

The setting aside or declaring void, in proper cases, of intrusions of State authority into areas
reserved by the Bill of Rights for the individual as constitutionally protected spheres where even
the awesome powers of Government may not enter at will is not the totality of the Court's
functions.

EN BANC
[G.R. Nos. L-68379-81. September 22, 1986.]

The Court also has the duty to formulate guiding and controlling constitutional principles,
precepts, doctrines, or rules. It has the symbolic function of educating bench and bar on the
extent of protection given by constitutional guarantees.

EVELIO B. JAVIER, petitioner, vs. THE COMMISSION ON ELECTIONS,

and ARTURO F. PACIFICADOR, respondents.

In dela Camara v. Enage (41 SCRA 1), the petitioner who questioned a P1,195,200.00 bail bond
as excessive and, therefore, constitutionally void, escaped from the provincial jail while his
petition was pending. The petition became moot because of his escape but we nonetheless
rendered a decision and stated:

Raul S. Roco and Lorna Patajo-Kapunan for petitioner.

SYLLABUS
1. REMEDIAL LAW; DISMISSAL OF ACTION; ISSUES BECAME MOOT AND ACADEMIC; NOT
A CASE OF. The abolition of the Batasang Pambansa and the disappearance of the office in
dispute between the petitioner and the private respondent both of whom have gone their
separate ways could be a convenient justification for dismissing this case. But there are larger
issues involved that must be resolved now, once and for all, not only to dispel the legal
ambiguities here raised. The more important purpose is to manifest in the clearest possible
terms that this Court will not disregard and in effect condone wrong on the simplistic and tolerant
pretext that the case has become moot and academic. The Supreme Court is not only the
highest arbiter of legal questions but also the conscience of the government. The citizen comes
to us in quest of law but we must also give him justice. The two are not always the same. There
are times when we cannot grant the latter because the issue has been settled and decision is no
longer possible according to the law. But there are also times when although the dispute has
disappeared, as in this case, it nevertheless cries out to be resolved. Justice demands that we
act then, not only for the vindication of the outraged right, though gone, but also for the guidance
of and as a restraint upon the future.

"The fact that the case is moot and academic should not preclude this
Tribunal from setting forth in language clear and unmistakable, the
obligation of fidelity on the part of lower court judges to the unequivocal
command of the Constitution that excessive bail shall not be required."
In Gonzales v. Marcos (65 SCRA 624) whether or not the Cultural Center of the Philippines
could validly be created through an executive order was mooted by Presidential Decree No. 15,
the Center's new charter pursuant to the President's legislative powers under martial law. Still,
this Court discussed the constitutional mandate on the preservation and development of Filipino
culture for national identity. (Article XV, Section 9, Paragraph 2 of the Constitution)
In the habeas corpus case of Aquino, Jr., v. Enrile, 59 SCRA 183), during the pendency of the
case, 26 petitioners were released from custody and one withdrew his petition. The sole
remaining petitioner was facing charges of murder, subversion, and illegal possession of
firearms. The fact that the petition was moot and academic did not prevent this Court in the
exercise of its symbolic function from promulgating one of the most voluminous decisions ever
printed in the Reports. LibLex

2. CONSTITUTIONAL LAW; COMMISSION ON ELECTIONS; GIVEN FULL AUTHORITY TO

HEAR AND DECIDE CASES FROM BEGINNING TO END AND ALL MATTERS RELATED
THERETO. We believe that in making the Commission on Elections the sole judge of all
contests involving the election, returns and qualifications of the members of the Batasang
Pambansa and elective provincial and city officials, the Constitution intended to give it full

In this case, the respondents agree with our earlier finding that the prosecution evidence
miserably fails to establish a prima facie case against the petitioner, either as a co-conspirator of
a destabilization plan to overthrow the government or as an officer or leader of any subversive
organization. They have taken the initiative of dropping the charges against the petitioner. We

156

authority to hear and decide these cases from beginning to end and on all matters related
thereto, including those arising before the proclamation of the winners.

the division. While in the end the protestant might be sustained, he might find himself with only a
Phyrric victory because the term of his office would have already expired.

3. ID.; ID.; "CONTEST"; SHOULD NOT BE GIVEN A RESTRICTIVE MEANING. The word
"contests" should not be given a restrictive meaning; on the contrary, it should receive the widest
possible scope conformably to the rule that the words used in the Constitutionshould be
interpreted liberally. As employed in the 1973 Constitution, the term should be understood as
referring to any matter involving the title or claims as title to an elective office, made before or
after proclamation of the winner, whether or not the contestant is claiming the office in dispute.
Needless to stress, the term should be given a consistent meaning and understood in the same
sense under both Section 2(2) and Section 3 of Article XII-C of the Constitution.

7. ID.; BILL OF RIGHTS; DUE PROCESS GUARANTY; VIOLATED IN CASE AT BAR.

Another matter deserving the highest consideration of this Court but accorded cavalier attention
by the respondent Commission on Elections is due process of law, that ancient guaranty of
justice and fair play which is the hallmark of the free society. Commissioner Opinion ignored it.
Asked to inhibit himself on the ground that he was formerly a law partner of the private
respondent, he obstinately insisted on participating in the case, denying he was biased.
8. ID.; ID.; COLD NEUTRALITY OF AN IMPARTIAL JUDGE; INDISPENSABLE IMPERATIVE
OF DUE PROCESS. This Court has repeatedly and consistently demanded "the cold
neutrality of an impartial judge" as the indispensable imperative of due process. To bolster that
requirement we have held that the judge must not only be impartial but must also appear to be
impartial as an added assurance to the parties that his decision will be just. The litigants are
entitled to no less than that. They should be sure that when their rights are violated they can go
to a judge who shall give them justice. They must trust the judge, otherwise they will not go to
him at all. They must believe in his sense of fairness, otherwise they will not seek his judgment.
Without such confidence, there would be no point in invoking his action for the justice they
expect.

4. ID.; ID.; PHRASE "ELECTION RETURNS AND QUALIFICATION," DEFINED IN THE SAME
SENSE UNDER SEC. 2(2) AND SEC. 3, ART. XII-C, CONSTITUTION. The phrase "election,
returns and qualifications" should be interpreted in its totality as referring to all matters affecting
the validity of the contestee's title. But if it is necessary to specify, we can say that "election"
referred to the conduct of the polls, including the listing of voters, the holding of the electoral
campaign, and the casting and counting of the votes; "returns" to the canvass of the returns and
the proclamation of the winners, including questions concerning the composition of the board of
canvassers and the authenticity of the election returns; and "qualifications" to matters that could
be raised in a quo warranto proceeding against the proclaimed winner, such as his delivery or
ineligibility or the inadequacy of his certificate of candidacy.

9. ID.; ID.; DUE PROCESS; INTENDED TO INSURE COMPLIANCE WITH RUDIMENTS OF

FAIR PLAY. Due process is intended to insure that confidence by requiring compliance with
what Justice Frankfurter calls the rudiments of fair play. Fair play calls for equal justice. There
cannot be equal justice where a suitor approaches a court already committed to the other party
and with a judgment already made and waiting only to be formalized after the litigants shall have
undergone the charade of a formal hearing. Judicial (and also extra-judicial proceedings are not
orchestrated plays in which the parties are supposed to make the motions and reach the
denouement according to a prepared script. There is no writer to foreordain the ending. The
judge will reach his conclusions only after all the evidence is in and all the arguments are filed,
on the basis of the established facts and the pertinent law.

5. ID.; ID.; ISSUED ON ELECTION, RETURNS AND QUALIFICATIONS; TO BE HEARD AND

DECIDED ONLY BY SITTING EN BAND INSOFAR AS THEY APPLIED TO MEMBERS OF B.P.
All these came under the exclusive jurisdiction of the Commission on Elections insofar as they
applied to the members of the defunct Batasang Pambansa and, under Article XII-C, Section 3,
of the 1973 Constitution, could be heard and decided by it only en banc.
6. ID.; ID.; ID.; CASES INVOLVING MEMBERS OF B.P. TO BE HEARD AND DECIDED BY
SITTING EN BANC; PURPOSE. As correctly observed by the petitioner, the purpose of
Section 3 in requiring that cases involving members of the Batasang Pambansa be heard and
decided by the Commission en banc was to insure the most careful consideration of such cases.
Obviously, that objective could not be achieved if the Commission could act en banc only after
the proclamation had been made, for it might then be too late already. We are all-too-familiar
with the grab-the-proclamation-and-delay-the-protest strategy of many unscrupulous candidates
which has resulted in the frustration of the popular will and the virtual defeat of the real winners
in the election. The respondent's theory would make this gambit possible for the preproclamation proceedings, being summary in nature, could be hastily decided by only three
members in division, without the cause and deliberation that would have otherwise been
observed by the Commission en banc. After that, the delay. The Commission en banc might then
no longer be able to rectify in time the proclamation summarily and not very judiciously made by

10. ID.; ID.; ID.; DEMANDS THAT THE JUDGE INHIBIT HIMSELF OUT OF A SENSE OF
DELICADEZA. The relationship of the judge with one of the parties may color the facts and
distort the law to the prejudice of a just decision. Where this is probable or even only possible,
due possible, due process demands that the judge inhibit himself, if only out of a sense
of delicadeza. For like Caesar's wife, he must be above suspicion. Commissioner Opinion, being
a lawyer, should have recognized his duty and abided by this well-known rule of judicial conduct.
For refusing to do so, he divested the Second Division of the necessary vote for the questioned
decision, assuming it could act, and rendered the proceedings null and void.
FELICIANO, J., concurring:

157

1. CONSTITUTIONAL LAW; COMMISSION ON ELECTIONS; MUST DECIDE ALL ELECTION

CONTESTS INVOLVING MEMBERS OF THE BATASAN PAMBANSA SITTING EN BANC.
Although this petition has become moot and academic, the decision, dated 23 July 1984, of the
Second Division of the Commission on Elections which had proclaimed Arturo F. Pacificador as
the duly elected Assemblyman of the province of Antique must be set aside or, more accurately,
must be disregarded as bereft of any effect in law. J. Feliciano reaches this result on the same
single, precisely drawn, ground relied upon by Melencio-Herrera,J., that all election contests
involving members of the former Batasan Pambansa must be decided by the Commission on
Elections en banc under Sections 2 and 3 of Article XII-C of the 1973 Constitution. These
Sections do not distinguish between "pre-proclamation" and "post-proclamation" contests nor
between "cases" and "contests."

electorate. Conceivably, it intimidated voters against supporting the Opposition candidate or into
supporting the candidate of the ruling party.
It was in this atmosphere that the voting was held, and the post-election developments were to
run true to form. Owing to what he claimed were attempts to railroad the private respondent's
proclamation, the petitioner went to the Commission on Elections to question the canvass of the
election returns. His complaints were dismissed and the private respondent was proclaimed
winner by the Second Division of the said body. The petitioner thereupon came to this Court,
arguing that the proclamation was void because made only by a division and not by the
Commission on Elections en banc as required bythe Constitution. Meanwhile, on the strength of
his proclamation, the private respondent took his oath as a member of the Batasang Pambansa.

MELENCIO-HERRERA, J., concurring:

The case was still being considered by this Court when on February 11, 1986, the petitioner was
gunned down in cold blood and in broad daylight. The nation, already indignant over the obvious
manipulation of the presidential elections in favor of Marcos, was revolted by the killing, which
flaunted a scornful disregard for the law by the assailants who apparently believed they were
above the law. This ruthless murder was possibly one of the factors that strengthened the cause
of the Opposition in the February revolution that toppled the Marcos regime and installed the
present government under President Corazon C. Aquino.

1. CONSTITUTIONAL LAW; COMMISSION ON ELECTIONS; HAS JURISDICTION OVER

CONTESTS INVOLVING MEMBERS OF THE BATASAN PAMBANSA. I concur in the result.
The questioned Decision of the Second Division of the COMELEC, dated July 23, 1984,
proclaiming private respondent, Arturo F. Pacificador, as the duly elected Assemblyman of the
province of Antique, should be set aside for the legal reason that all election contests, without
distinction as to cases or contests, involving members of the defunct Batasang Pambansa fall
under the jurisdiction of the COMELEC en banc pursuant to Sections 2 and 3 of Article XII-C of
the 1973 Constitution.

The abolition of the Batasang Pambansa and the disappearance of the office in dispute between
the petitioner and the private respondent both of whom have gone their separate ways
could be a convenient justification for dismissing this case. But there are larger issues involved
that must be resolved now, once and for all, not only to dispel the legal ambiguities here raised.
The more important purpose is to manifest in the clearest possible terms that this Court will not
disregard and in effect condone wrong on the simplistic and tolerant pretext that the case has
become moot and academic.

DECISION
CRUZ, J p:

The Supreme Court is not only the highest arbiter of legal questions but also the conscience of
the government. The citizen comes to us in quest of law but we must also give him justice. The
two are not always the same. There are times when we cannot grant the latter because the issue
has been settled and decision is no longer possible according to the law. But there are also
times when although the dispute has disappeared, as in this case, it nevertheless cries out to be
resolved. Justice demands that we act then, not only for the vindication of the outraged right,
though gone, but also for the guidance of and as a restraint upon the future.

The new Solicitor General has moved to dismiss this petition on the ground that as a result of
supervening events it has become moot and academic. It is not as simple as that, Several lives
have been lost in connection with this case, including that of the petitioner himself. The private
respondent is now in hiding. The purity of suffrage has been defiled and the popular will scorned
through a confabulation of those in authority. This Court cannot keep silent in the face of these
terrible facts. The motion is denied.

It is a notorious fact decried by many people and even by the foreign press that elections during
the period of the Marcos dictatorship were in the main a desecration of the right of suffrage.
Vote-buying, intimidation and violence, illegal listing of voters, falsified returns, and other
elections anomalies misrepresented and vitiated the popular will and led to the induction in office
of persons who did not enjoy the confidence of the sovereign electorate. Genuine elections were
a rarity. The price at times was human lives. The rule was chicanery and irregularity, and on all

The petitioner and the private respondent were candidates in Antique for the Batasang
Pambansa in the May 1984 elections. The former appeared to enjoy more popular support but
the latter had the advantage of being the nominee of the KBL with all its perquisites of power. On
May 13, 1984, the eve of the elections, the bitter contest between the two came to a head when
several followers of the petitioner were ambushed and killed, allegedly by the latter's men. Seven
suspects, including respondent Pacificador, are now facing trial for these murders. The incident
naturally heightened tension in the province and sharpened the climate of fear among the

158

levels of the polls, from the barangay to the presidential. This included the rigged plebiscites and
referenda that also elicited the decision and provoked the resentments of the people.

This decision was signed by Chairman Victoriano Savellano and Commissioners Jaime Opinion
and Froilan M. Bacungan. Previously asked to inhibit himself on the ground that he was a former
law partner of private respondent Pacificador, Opinion had refused. 7

Antique in 1984 hewed to the line and equaled if it did not surpass the viciousness of elections in
other provinces dominated by the KBL. Terrorism was a special feature, as demonstrated by the
killings previously mentioned, which victimized no less than one of the main protagonists and
implicated his rival as a principal perpetrator. Opposition leaders were in constant peril of their
lives even as their supporters were gripped with fear of violence at the hands of the party in
power. LLjur

The petitioner then came to this Court, asking us to annul the said decision.
The core question in this case is one of jurisdiction, to wit: Was the Second Division of the
Commission on Elections authorized to promulgate its decision of July 23, 1984, proclaiming the
private respondent the winner in the election? LibLex

What made the situation especially deplorable was the apparently indifferent attitude of the
Commission on Elections toward the anomalies being committed. It is a matter of record that the
petitioner complained against the terroristic acts of his opponents. All the electoral body did was
refer the matter to the Armed Forces without taking a more active step as befitted its
constitutional role as the guardian of free, orderly and honest elections. A more assertive stance
could have averted the Sibalom election eve massacre and saved the lives of the nine victims of
the tragedy.

The applicable provisions are found in Article XII-C, Sections 2 and 3, of the 1973 Constitution.
Section 2 confers on the Commission on Elections the power to:
"(2) Be the sole judge of all contests relating to the election, returns and
qualifications of all member of the Batasang Pambansa and elective
provincial and city officials."

Public confidence in the Commission on Elections was practically nil because of its transparent
bias in favor of the administration. This prejudice left many opposition candidates without
recourse except only to this Court.

Section 3 provides:
"The Commission on Elections may sit en banc or in three divisions. All
election cases may be heard and decided by divisions except contests
involving members of the Batasang Pambansa, which shall be heard and
decided en banc. Unless otherwise provided by law, all election cases
shall be decided within ninety days from the date of their submission for
decision."

Alleging serious anomalies in the conduct of the elections and the canvass of the election
returns, the petitioner went to the Commission on Elections to prevent the impending
proclamation of his rival, the private respondent herein. 1 Specifically, the petitioner charged that
the elections were marred by "massive terrorism, intimidation, duress, vote-buying, fraud,
tampering and falsification of election returns under duress, threat and intimidation, snatching of
ballot boxes perpetrated by the armed men of respondent Pacificador." 2 Particular mention was
made of the municipalities of Caluya, Cabate, Tibiao, Barbaza, Laua-an, and also of San
Remigio, where the petitioner claimed the election returns were not placed in the ballot boxes but
merely wrapped in cement bags or manila paper.

While both invoking the above provisions, the petitioner and the respondents have arrived at
opposite conclusions. The records are voluminous and some of the pleadings are exhaustive
and in part even erudite. And well they might be, for the noble profession of the law despite all
the canards that have been flung against it exerts all efforts and considers all possible
viewpoints in its earnest search of the truth.

On May 18, 1984, the Second Division of the Commission on Elections directed the provincial
board of canvassers of Antique to proceed with the canvass but to suspend the proclamation of
the winning candidate until further orders. 3 On June 7, 1984, the same Second Division ordered
the board to immediately convene and to proclaim the winner without prejudice to the outcome of
the case before the Commission. 4 On certioraribefore this Court, the proclamation made by the
board of canvassers was set aside as premature, having been made before the lapse of the 5day period of appeal, which the petitioner had seasonably made. 5 Finally, on July 23, 1984, the
Second Division promulgated the decision now subject of this petition which inter alia proclaimed
Arturo F. Pacificador the elected assemblyman of the province of Antique. 6

The petitioner complains that the proclamation made by the Second Division is invalid because
all contests involving the members of the Batasang Pambansa come under the jurisdiction of the
Commission on Elections en banc. This is as it should be, he says, to insure a more careful
decision, considering the importance of the offices involved. The respondents, for their part,
argue that only contests need to be heard and decided en banc and all other cases can be in
fact, should be filed with and decided only by any of the three divisions.
The former Solicitor General makes much of this argument and lays a plausible distinction
between the terms "contests" and "cases" to prove his point. 8 Simply put, his contention is that

159

the pre-proclamation controversy between the petitioner and the private respondent was not yet
a contest at that time and therefore could be validly heard by a mere division of the Commission
on Elections, consonant with Section 3. The issue was at this stage still administrative and so
was resoluble by the Commission under its power to administer all laws relative to the conduct of
elections, 9 not its authority as sole judge of the election contest.

We believe that in making the Commission on Elections the sole judge of all contests involving
the election, returns and qualifications of the members of the Batasang Pambansa and elective
provincial and city officials, the Constitution intended to give it full authority to hear and decide
these cases from beginning to end and on all matters related thereto, including those arising
before the proclamation of the winners. Cdpr

A contest, according to him, should involve a contention between the parties for the same office
"in which the contestant seeks not only to oust the intruder but also to have himself inducted into
the office." 10 No proclamation had as yet been made when the petition was filed and later
decided. Hence, since neither the petitioner nor the private respondent had at that time assumed
office, there was no Member of the Batasang Pambansa from Antique whose election, returns or
qualifications could be examined by the Commission on Elections en banc.

It is worth observing that the special procedure for the settlement of what are now called "preproclamation controversies" is a relatively recent innovation in our laws, having been introduced
only in 1978, through P.D. No. 1296, otherwise known as the 1978 Election Code. Section 175
thereof provided:
"Sec. 175. Suspension and annulment of proclamation. The
Commission shall be the sole judge of all pre-proclamation controversies
and any of its decisions, orders or rulings shall be final and executory. It
may, motu proprio or upon written petition, and after due notice and
hearing order the suspension of the proclamation of a candidate-elect or
annul any proclamation, if one has been made, on any of the grounds
mentioned in Sections 172, 173 and 174 thereof."

In providing that the Commission on Elections could act in division when deciding election
cases, according to this theory, the Constitution was laying down the general rule. The exception
was the election contest involving the members of the Batasang Pambansa, which had to be
heard and decided en banc. 11 The en banc requirement would apply only from the time a
candidate for the Batasang Pambansa was proclaimed as winner, for it was only then that a
contest could be permitted under the law. All matters arising before such time were, necessarily,
subject to decision only by division of the Commission as these would come under the general
heading of "election cases."

Before that time all proceedings affecting the election, returns and qualifications of public officers
came under the complete jurisdiction of the competent court or tribunal from beginning to end
and in the exercise of judicial power only. It therefore could not have been the intention of the
framers in 1935, when the Commonwealth Charter was adopted, and even in 1973, when the
past Constitution was imposed, to divide the electoral process into the pre-proclamation stage
and the post-proclamation stage and to provide for a separate jurisdiction for each stage,
considering the first administrative and the second judicial.

As the Court sees it, the effect of this interpretation would be to divide the jurisdiction of the
Commission on Elections into two, viz.: (1) over matters arising before the proclamation, which
should be heard and decided by division in the exercise of its administrative power; and (2) over
matters arising after the proclamation, which could be heard and decided only en banc in the
exercise of its judicial power. Stated otherwise, the Commission as a whole could not act as sole
judge as long as one of its divisions was hearing a pre-proclamation matter affecting the
candidates for the Batasang Pambansa because there was as yet no contest; or to put it still
another way, the Commission en banc could not do what one of its divisions was competent to
do, i.e., decide a pre-proclamation controversy. Moreover, a mere division of the Commission on
Elections could hear and decide, save only those involving the election, returns and
qualifications of the members of the Batasang Pambansa, all cases involving elective provincial
and city officials from start to finish, including pre-proclamation controversies and up to the
election protest, In doing so, it would exercise first administrative and then judicial powers. But in
the case of the Commission en banc, its jurisdiction would begin only after the proclamation was
made and a contest was filed and not at any time and on any matter before that, and always in
the exercise only of judicial power.

Besides, the term "contest" as it was understood at the time Article XII-C, Section 2(2) was
incorporated in the 1973 Constitution did not follow the strict definition of a contention between
the parties for the same office. Under the Election Code of 1971, which presumably was taken
into consideration when the 1973 Constitution was being drafted, election contests included
the quo warranto petition that could be filed by any voter on the ground of disloyalty or ineligibility
of the contestee although such voter was himself not claiming the office involved. 12
The word "contests" should not be given a restrictive meaning; on the contrary, it should receive
the widest possible scope conformably to the rule that the words used in the Constitution should
be interpreted liberally. As employed in the 1973 Constitution, the term should be understood as
referring to any matter involving the title or claim of title to an elective office, made before or after
proclamation of the winner, whether or not the contestant is claiming the office in dispute.
Needless to stress, the term should be given a consistent meaning and understood in the same
sense under both Section 2(2) and Section 3 of Article XII-C of the Constitution.

This interpretation would give to the part more powers than were enjoyed by the whole, granting
to the division while denying to the banc. We do not think this was the intention of the
Constitution. The framers could not have intended such an irrational rule.

160

The phrase "election, returns and qualifications" should be interpreted in its totality as referring to
all matters affecting the validity of the contestee's title. But if it is necessary to specify, we can
say that "election" referred to the conduct of the polls, including the listing of voters, the holding
of the electoral campaign, and the casting and counting of the votes; "returns" to the canvass of
the returns and the proclamation of the winners, including questions concerning the composition
of the board of canvassers and the authenticity of the election returns; and "qualifications" to
matters that could be raised in a quo warrantoproceeding against the proclaimed winner, such as
his disloyalty or ineligibility or the inadequacy of his certificate of candidacy. LLjur

Incidentally, in making the Commission the "sole judge" of pre-proclamation controversies in

Section 175, supra, the law was obviously referring to the body sitting en banc. In fact, the preproclamation controversies involved in Aratuc vs. Commission on Elections, 13 where the said
provision was applied, were heard and decided en banc.
Another matter deserving the highest consideration of this Court but accorded cavalier attention
by the respondent Commission on Elections is due process of law, that ancient guaranty of
justice and fair play which is the hallmark of the free society. Commissioner Opinion ignored it.
Asked to inhibit himself on the ground that he was formerly a law partner of the private
respondent, he obstinately insisted on participating in the case, denying he was biased. 14

All these came under the exclusive jurisdiction of the Commission on Elections insofar as they
applied to the members of the defunct Batasang Pambansa and, under Article XII-C, Section 3,
of the 1973 Constitution, could be heard and decided by it only en banc.

Given the general attitude of the Commission on Elections toward the party in power at the time,
and the particular relationship between Commissioner Opinion and MP Pacificador, one could
not be at least apprehensive, if not certain, that the decision of the body would be adverse to the
petitioner. As in fact it was. Commissioner Opinion's refusal to inhibit himself and his objection to
the transfer of the case to another division cannot be justified by any criterion of propriety. His
conduct on this matter belied his wounded protestations of innocence and proved the motives of
the Second Division when it rendered its decision. cdll

We interpret "cases" as the generic term denoting the actions that might be heard and decided
by the Commission on Elections, only by division as a general rule except where the case was a
"contest" involving members of the Batasang Pambansa, which had to be heard and decided en
banc.
As correctly observed by the petitioner, the purpose of Section 3 in requiring that cases involving
members of the Batasang Pambansa be heard and decided by the Commissionen banc was to
insure the most careful consideration of such cases. Obviously, that objective could not be
achieved if the Commission could act en banc only after the proclamation had been made, for it
might then be too late already. We are all-too-familiar with the grab-the-proclamation-and-delaythe-protest strategy of many unscrupulous candidates which has resulted in the frustration of the
popular will and the virtual defeat of the real winners in the election. The respondent's theory
would make this gambit possible for the pre-proclamation proceedings, being summary in
nature, could be hastily decided by only three members in division, without the care and
deliberation that would have otherwise been observed by the Commission en banc.

This Court has repeatedly and consistently demanded "the cold neutrality of an impartial judge"
as the indispensable imperative of due process. 15 To bolster that requirement, we have held
that the judge must not only be impartial but must also appear to be impartial as an added
assurance to the parties that his decision will be just. 16 The litigants are entitled to no less than
that. They should be sure that when their rights are violated they can go to a judge who shall
give them justice. They must trust the judge, otherwise they will not go to him at all. They must
believe in his sense of fairness, otherwise they will not seek his judgment. Without such
confidence, there would be no point in invoking his action for the justice they expect.
Due process is intended to insure that confidence by requiring compliance with what Justice
Frankfurter calls the rudiments of fair play. Fair play calls for equal justice. There cannot be equal
justice where a suitor approaches a court already committed to the other party and with a
judgment already made and waiting only to be formalized after the litigants shall have undergone
the charade of a formal hearing. Judicial (and also extrajudicial) proceedings are not
orchestrated plays in which the parties are supposed to make the motions and reach the
denouement according to a prepared script. There is no writer to foreordain the ending. The
judge will reach his conclusions only after all the evidence is in and all the arguments are filed,
on the basis of the established facts and the pertinent law.

After that, the delay. The Commission en banc might then no longer be able to rectify in time the
proclamation summarily and not very judiciously made by the division. While in the end the
protestant might be sustained, he might find himself with only a Phyrric victory because the term
of his office would have already expired.
It may be argued that in conferring the initial power to decide the pre-proclamation question upon
the division, the Constitution did not intend to prevent the Commission en banc from exercising
the power directly, on the theory that the greater power embraces the lesser. It could if it wanted
to but then it could also allow the division to act for it. That argument would militate against the
purpose of the provision, which precisely limited all questions affecting the election contest, as
distinguished from election cases in general, to the jurisdiction of the Commission en banc as
sole judge thereof. "Sole judge" excluded not only all other tribunals but also and even the
division of the Commission. A decision made on the contest by less than the Commission en
banc would not meet the exacting standard of care and deliberation ordained by the Constitution.

The relationship of the judge with one of the parties may color the facts and distort the law to the
prejudice of a just decision. Where this is probable or even only possible, due process demands
that the judge inhibit himself, if only out of a sense of delicadeza. For like Caesar's wife, he must
be above suspicion. Commissioner Opinion, being a lawyer, should have recognized his duty
and abided by this well-known rule of judicial conduct. For refusing to do so, he divested the

161

Second Division of the necessary vote for the questioned decision, assuming it could act, and
rendered the proceeding null and void. 17

This is not an impossible dream. Indeed, it is an approachable goal. It can and will be won if we
are able at last, after our long ordeal, to say never again to tyranny. If we can do this with
courage and conviction, then and only then, and not until then, can we truly say that the case is
finished and the book is closed.

Since this case began in 1984, many significant developments have taken place, not the least
significant of which was the February revolution of "people power" that dislodged the past regime
and ended well nigh twenty years of travail for this captive nation. The petitioner is gone, felled
by a hail of bullets sprayed with deadly purpose by assassins whose motive is yet to be
disclosed. The private respondent has disappeared with the "pomp of power" he had before
enjoyed. Even the Batasang Pambansa itself has been abolished, "an iniquitous vestige of the
previous regime" discontinued by the FreedomConstitution. It is so easy now, as has been
suggested not without reason, to send the records of this case to the archives and say the case
is finished and the book is closed.

WHEREFORE, let it be spread in the records of this case that were it not for the supervening
events that have legally rendered it moot and academic, this petition would have been granted
and the decision of the Commission on Elections dated July 23, 1984, set aside as violative
of the Constitution.
SO ORDERED.
Feria, Yap, Narvasa, Alampay and Paras, JJ ., concur.

But not yet.

EN BANC

Let us first say these meager words in tribute to a fallen hero who was struck down in the vigor of
his youth because he dared to speak against tyranny. Where many kept a meekly silence for fear
of retaliation, and still others feigned and fawned in hopes of safety and even reward, he chose
to fight. He was not afraid. Money did not tempt him. Threats did not daunt him. Power did not
awe him. His was a singular and all exacting obsession: the return of freedom to his country. And
though he fought not in the barricades of war amid the sound and smoke of shot and shell, he
was a soldier nonetheless, fighting valiantly for the liberties of his people against the enemies of
his race, unfortunately of his race too, who would impose upon the land a perpetual night of dark
enslavement. He did not see the breaking of the dawn, sad to say, but in a very real sense Evelio
B. Javier made that dawn draw nearer because he was, like Saul and Jonathan, "swifter than
eagles and stronger than lions."

[G.R. No. 71977. February 27, 1987.]

DEMETRIO G. DEMETRIA, M.P., AUGUSTO S. SANCHEZ, M.P.,
ORLANDO S. MERCADO, M.P., HONORATO Y. AQUINO, M.P.,
ZAFIRO L. RESPICIO, M.P., DOUGLAS R. CAGAS, M.P., OSCAR F.
SANTOS, M.P., ALBERTO G. ROMULO, M.P., CIRIACO R. ALFELOR,
M.P., ISIDORO E. REAL, M.P., EMIGDIO L. LINGAD, M.P., ROLANDO
C. MARCIAL, M.P., PEDRO M. MARCELLANA, M.P., VICTOR S. ZIGA,
M.P., and ROGELIO V. GARCIA, M.P., petitioners, vs.HON. MANUEL
ALBA in his capacity as the MINISTER OF THE BUDGET and
VICTOR MACALINGCAG in his capacity as the TREASURER OF THE
PHILIPPINES, respondents.

A year ago this Court received a letter which began: "I am the sister of the late Justice Calixto
Zaldivar. I am the mother of Rhium Z. Sanchez, the grandmother of Plaridel Sanchez IV and
Aldrich Sanchez, the aunt of Mamerta Zaldivar. I lost all four of them in the election eve ambush
in Antique last year." She pleaded, as so did hundreds of others of her provincemates in
separate signed petitions sent us, for the early resolution of that horrible crime, saying "I am 82
years old now. I am sick. May I convey to you my prayer in church and my plea to you, 'Before I
die, I would like to see justice to my son and grandsons,' May I also add that the people of
Antique have not stopped praying that the true winner of the last elections will be decided upon
by the Supreme Court soon." LLpr

SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PROPER PARTY; ISSUE OF CONSTITUTIONALITY
OF STATUTES MAY BE RAISED AT THE INSTANCE OF A TAXPAYER. The case of Pascual
v. Secretary of Public Works, et al., 110 Phil. 331 is authority in support of petitioners' locus
standi. Thus: "Again, it is well-settled that the validity of a statute may be contested only by one
who will sustain a direct injury in consequence of its enforcement. Yet, there are many decisions
nullifying at the instance of taxpayers, laws providing for the disbursement of public funds, upon
the theory that the expenditure of public funds by an officer of the state for the purpose of
administering an unconstitutional act constitute amisapplication of such funds' which may be
enjoined at the request of a taxpayer. Moreover, in Tan v. Macapagal, 43 SCRA 677 and Sanidad
v. Comelec, 73 SCRA 333, we said that as regards taxpayers' suits, this Court enjoys that open
discretion to entertain the same or not.

That was a year ago and since then a new government has taken over in the wake of the
February revolution. The despot has escaped, and with him, let us pray, all the oppressions and
repressions of the past have also been banished forever. A new spirit is now upon our land. A
new vision limns the horizon. Now we can look forward with new hope that under the
Constitution of the future every Filipino shall be truly sovereign in his own country, able to
express his will through the pristine ballow with only his conscience as his counsel.

162

2. CONSTITUTIONAL LAW; NATIONAL ASSEMBLY; TRANSFER TO APPROPRIATION;

LIMITATIONS. The prohibition to transfer an appropriation for one item to another was explicit
and categorical under the 1973 Constitution. However, to afford the heads of the different
branches of the government and those of the constitutional commissions considerable flexibility
in the use of public funds and resources, the constitution allowed the enactment of a law
authorizing the transfer of funds for the purpose of augmenting an item from savings in another
item in the appropriation of the government branch on constitutional body concerned. The
leeway granted was thus limited. Transferred were specified, i.e. transfer may be allowed for the
purpose of augmenting an item and such transfer may be allowed for the purpose of augmenting
an item and such transfer may be made only if there are savings form another item in the
appropriation of the government branch or constitutional body.

FERNAN, J p:
Assailed in this petition for prohibition with prayer for a writ of preliminary injunction is the
constitutionality of the first paragraph of Section 44 of Presidential Decree No. 1177, otherwise
known as the "Budget Reform Decree of 1977."
Petitioners, who filed the instant petition as concerned citizens of this country, as members of
the National Assembly/Batasan Pambansa representing their millions of constituents, as parties
with general interest common to all the people of the Philippines, and as taxpayers whose vital
interests may be affected by the outcome of the reliefs prayed for" 1 listed the grounds relied
upon in this petition as follows: LLpr

3. ID.; PAR. 1, SEC. 44 OF PRESIDENTIAL DECREE NO. 1177 EMPOWERING THE

PRESIDENT TO INDISCRIMINATELY TRANSFER FUNDS DECLARED UNCONSTITUTIONAL.
Paragraph 1 of Section 44 of P.D. 1177 unduly over-extends the privilege granted under said
Section 16 [5]. It empowers the President to indiscriminately transfer of funds form one
department, bureau, office or agency of the Executive Department to any program, project or
activity of any department, bureau or office included in the General Appropriations Act or
approved after its enactment, without regard as to whether or not funds to be transferred are
actually savings in the item from which the same are to be taken, or whether or not the transfer is
for the purpose of augmenting the item to which said transfer is to be made. It does not only
completely disregard the standards set in the fundamental law, thereby amounting to an undue
delegation of legislative powers, but likewise goes beyond the tenor thereof. Indeed, such
constitutional infirmities render the provision in question null and void.

"A. SECTION 44 OF THE 'BUDGET REFORM DECREE OF 1977'

INFRINGES UPON THE FUNDAMENTAL LAW BY AUTHORIZING THE
ILLEGAL TRANSFER OF PUBLIC MONEYS.
"B. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 IS
REPUGNANT TO THE CONSTITUTION AS IT FAILS TO SPECIFY THE
OBJECTIVES AND PURPOSES FOR WHICH THE PROPOSED
TRANSFER OF FUNDS ARE TO BE MADE.
"C. SECTION 44 OF PRESIDENTIAL DECREE NO. 1177 ALLOWS THE
PRESIDENT TO OVERRIDE THE SAFEGUARDS, FORM AND
PROCEDURE PRESCRIBED BY THE CONSTITUTION IN APPROVING
APPROPRIATIONS.

4. ID.; SUPREME COURT; MAY ISSUE WRIT OF PROHIBITION AGAINST A COORDINATE

BRANCH ACTING BEYOND THE SCOPE OF ITS CONSTITUTIONAL POWERS. Another
theory advanced by public respondents is that prohibition will not lie form one branch of the
government against a coordinate branch to enjoin the performance of duties within the latter's
sphere of responsibility. where the legislature or the executive branch is acting within the limits of
its authority, the judiciary cannot and ought not to interfere with the former, But where the
legislature or the executive acts beyond the scope of its constitutional power, it becomes the duty
of the judiciary to declare what the other branches of the government had assumed to do as
void. This is the essence of judicial power conferred by the Constitution "in one Supreme Court
and in such lower courts as may be established by law" [Art. VIII, Section 1 of the 1935
Constitution; Art. X, Section 1 of the 1973 Constitution and which was adopted as part of the
Freedom Constitution] and Art. VIII, Section 1 of the 1987 Constitution] and which power this
Court has exercised in many instances. Public respondents are being enjoined from acting under
a provision of law which we have earlier mentioned to be constitutionally infirm. The general
principle relied upon cannot therefore accord them the protection sought as they are not acting
within their "sphere of responsibility" but without it.

"D. SECTION 44 OF THE SAME DECREE AMOUNTS TO AN UNDUE

DELEGATION OF LEGISLATIVE POWERS TO THE EXECUTIVE.
"E. THE THREATENED AND CONTINUING TRANSFER OF FUNDS BY
THE PRESIDENT AND THE IMPLEMENTATION THEREOF BY THE
BUDGET MINISTER AND THE TREASURER OF THE PHILIPPINES
ARE WITHOUT OR IN EXCESS OF THEIR AUTHORITY AND
JURISDICTION." 2
Commenting on the petition in compliance with the Court resolution dated September 19, 1985,
the Solicitor General, for the public respondents, questioned the legal standing of petitioners,
who were allegedly merely begging an advisory opinion from the Court, there being no
justiciable controversy fit for resolution or determination. He further contended that the provision
under consideration was enacted pursuant to Section 16[5], Article VIII of the 1973 Constitution;
and that at any rate, prohibition will not lie from one branch of the government to a coordinate
branch to enjoin the performance of duties within the latter's sphere of responsibility.

DECISION

163

On February 27, 1986, the Court required the petitioners to file a Reply to the Comment. This,
they did, stating, among others, that as a result of the change in the administration, there is a
need to hold the resolution of the present case in abeyance "until developments arise to enable
the parties to concretize their respective stands." 3

The exception taken to petitioners' legal standing deserves scant consideration. The case
of Pascual v. Secretary of Public Works, et al., 110 Phil. 331, is authority in support of
petitioners' locus standi. Thus:
"Again, it is well-settled that the validity of a statute may be contested only
by one who will sustain a direct injury in consequence of its enforcement.
Yet, there are many decisions nullifying at the instance of taxpayers, laws
providing for the disbursement of public funds, upon the theory that 'the
expenditure of public funds by an officer of the state for the purpose of
administering an unconstitutional act constitutes a misapplication of such
funds which may be enjoined at the request of a taxpayer. Although there
are some decisions to the contrary, the prevailing view in the United
States is stated in the American Jurisprudence as follows:

Thereafter, We required public respondents to file a rejoinder. The Solicitor General filed a
rejoinder with a motion to dismiss, setting forth as grounds therefor the abrogation of Section
16[5], Article VIII of the 1973 Constitution by the Freedom Constitution of March 25, 1986, which
has allegedly rendered the instant petition moot and academic. He likewise cited the "seven
pillars" enunciated by Justice Brandeis in Ashwander v. TVA, 297 U.S. 288 (1936) 4 as basis for
the petition's dismissal. LexLib
In the case of Evelio B. Javier v. The Commission on Elections and Arturo F. Pacificador,G.R.
Nos. 68379-81, September 22, 1986, We stated that:

'In the determination of the degree of interest

essential to give the requisite standing to attack the
constitutionality of a statute, the general rule is that not only
persons individually affected, but also taxpayers have sufficient
interest in preventing the illegal expenditures of moneys raised
by taxation and may therefore question the constitutionality of
statutes requiring expenditure of public moneys. [11 Am. Jur.
761, Emphasis supplied.]'"

"The abolition of the Batasang Pambansa and the disappearance of the

office in dispute between the petitioner and the private respondents
both of whom have gone their separate ways-could be a convenient
justification for dismissing the case. But there are larger issues involved
that must be resolved now, once and for all, not only to dispel the legal
ambiguities here raised. The more important purpose is to manifest in the
clearest possible terms that this Court will not disregard and in effect
condone wrong on the simplistic and tolerant pretext that the case has
become moot and academic.

Moreover, in Tan v. Macapagal, 43 SCRA 677 and Sanidad v. Comelec, 73 SCRA 333. We said
that as regards taxpayers' suits, this Court enjoys that open discretion to entertain the same or
not. LLphil

"The Supreme Court is not only the highest arbiter of legal questions but
also the conscience of the government. The citizen comes to us in quest
of law but we must also give him justice. The two are not always the
same. There are times when we cannot grant the latter because the issue
has been settled and decision is no longer possible according to the law.
But there are also times when although the dispute has disappeared, as
in this case, it nevertheless cries out to be resolved. Justice demands that
we act then, not only for the vindication of the outraged right, though
gone, but also for the guidance of and as a restraint upon the future."

The conflict between paragraph 1 of Section 44 of Presidential-Decree No. 1177 and Section
16[5], Article VIII of the 1973 Constitution is readily perceivable from a mere cursory reading
thereof. Said paragraph 1 of Section 44 provides:
"The President shall have the authority to transfer any fund, appropriated
for the different departments, bureaus, offices and agencies of the
Executive Department, which are included in the General Appropriations
Act, to any program, project or activity of any department, bureau, or
office included in the General Appropriations Act or approved after its
enactment."

It is in the discharge of our role in society, as above-quoted, as well as to avoid great disservice
to national interest that We take cognizance of this petition and thus deny public respondents'
motion to dismiss. Likewise noteworthy is the fact that the new Constitution, ratified by the
Filipino people in the plebiscite held on February 2, 1987, carries verbatim section 16[5], Article
VIII of the 1973 Constitution under Section 24[5], Article VI. And while Congress has not officially
reconvened, We see no cogent reason for further delaying the resolution of the case at bar.

On the other hand, the constitutional provision under consideration reads as follows:
"Sec. 16[5]. No law shall be passed authorizing any transfer of
appropriations, however, the President, the Prime Minister, the Speaker,
the Chief Justice of the Supreme Court, and the heads of constitutional

164

commissions may by law be authorized to augment any item in the

general appropriations law for their respective offices from savings in
other items of their respective appropriations."

Another theory advanced by public respondents is that prohibition will not lie from one branch of
the government against a coordinate branch to enjoin the performance of duties within the
latter's sphere of responsibility.

The prohibition to transfer an appropriation for one item to another was explicit and categorical
under the 1973 Constitution. However, to afford the heads of the different branches of the
government and those of the constitutional commissions considerable flexibility in the use of
public funds and resources, the constitution allowed the enactment of a law authorizing the
transfer of funds for the purpose of augmenting an item from savings in another item in the
appropriation of the government branch or constitutional body concerned. The leeway granted
was thus limited. The purpose and conditions for which funds may be transferred were specified,
i.e. transfer may be allowed for the purpose of augmenting an item and such transfer may be
made only if there are savings from another item in the appropriation of the government branch
or constitutional body.

Thomas M. Cooley in his "A Treatise on the Constitutional Limitations," Vol. I, Eight Edition, Little,
Brown and Company, Boston, explained:
". . . The legislative and judicial are coordinate departments of the
government, of equal dignity; each is alike supreme in the exercise of its
proper functions, and cannot directly or indirectly, while acting within the
limits of its authority, be subjected to the control or supervision of the
other, without an unwarrantable assumption by that other of power which,
by the Constitution, is not conferred upon it. The Constitution apportions
the powers of government, but it does not make any one of the three
departments subordinate to another, when exercising the trust committed
to it. The courts may declare legislative enactments unconstitutional and
void in some cases, but not because the judicial power is superior in
degree or dignity to the legislative. Being required to declare what the law
is in the cases which come before them, they must enforce the
Constitution, as the paramount law, whenever a legislative enactment
comes in conflict with it. But the courts sit, not to review or revise the
legislative action, but to enforce the legislative will, and it is only where
they find that the legislature has failed to keep within its constitutional
limits, that they are at liberty to disregard its action; and in doing so, they
only do what every private citizen may do in respect to the mandates of
the courts when the judges assume to act and to render judgments or
decrees without jurisdiction. 'In exercising this high authority, the judges
claim no judicial supremacy; they are only the administrators of the public
will. If an act of the legislature is held void, it is not because the judges
have any control over the legislative power, but because the act is
forbidden by the Constitution, and because the will of the people, which is
therein declared, is paramount to that of their representatives expressed
in any law.' [Lindsay v. Commissioners, & c., 2 Bay, 38, 61; People v.
Rucker, 5 Col. 5; Russ v. Com., 210 Pa. St. 544; 60 Atl. 169, 1 L.R.A.
[N.S.] 409, 105 Am. St. Rep. 825]" (pp. 332-334).

Paragraph 1 of Section 44 of P.D. No. 1177 unduly overextends the privilege granted under said
Section 16[5]. It empowers the President to indiscriminately transfer funds from one department,
bureau, office or agency of the Executive Department to any program, project or activity of any
department, bureau or office included in the General Appropriations Act or approved after its
enactment, without regard as to whether or not the funds to be transferred are actually savings in
the item from which the same are to be taken, or whether or not the transfer is for the purpose of
augmenting the item to which said transfer is to be made. It does not only completely disregard
the standards set in the fundamental law, thereby amounting to an undue delegation of
legislative powers, but likewise goes beyond the tenor thereof. Indeed, such constitutional
infirmities render the provision in question null and void.
"For the love of money is the root of all evil: . . ." and money belonging to no one in particular, i.e.
public funds, provide an even greater temptation for misappropriation and embezzlement. This,
evidently, was foremost in the minds of the framers of the constitution in meticulously prescribing
the rules regarding the appropriation and disposition of public funds as embodied in Sections 16
and 18 of Article VIII of the 1973 Constitution. Hence, the conditions on the release of money
from the treasury [Sec. 18(1)]; the restrictions on the use of public funds for public purpose [Sec.
18(2)]; the prohibition to transfer an appropriation for an item to another [Sec. 16(5) and the
requirement of specifications [Sec. 16(2)], among others, were all safeguards designed to
forestall abuses in the expenditure of public funds. Paragraph 1 of Section 44 puts all these
safeguards to naught. For, as correctly observed by petitioners, in view of the unlimited authority
bestowed upon the President, ". . . Pres. Decree No. 1177 opens the floodgates for the
enactment of unfounded appropriations, results in uncontrolled executive expenditures, diffuses
accountability for budgetary performance and entrenches the pork barrel system as the ruling
party may well expand [sic] public money not on the basis of development priorities but on
political and personal expediency." 5 The contention of public respondents that paragraph 1 of
Section 44 of P.D. 1177 was enacted pursuant to Section 16(5) of Article VIII of the 1973
Constitution must perforce fall flat on its face. cdphil

Indeed, where the legislature or the executive branch is acting within the limits of its authority,
the judiciary cannot and ought not to interfere with the former. But where the legislature or the
executive acts beyond the scope of its constitutional powers, it becomes the duty of the judiciary
to declare what the other branches of the government had assumed to do as void. This is the
essence of judicial power conferred by the Constitution"in one Supreme Court and in such lower
courts as may be established by law" [Art. VIII, Section 1 of the 1935 Constitution; Art. X,
Section 1 of the 1973 Constitution and which was adopted as part of the Freedom

165

Constitution,and Art. VIII, Section 1 of the 1987 Constitutional and which power this Court has
exercised in many instances. **

Araneta & Araneta and A. M. Tolentino for respondents.

SYLLABUS

Public respondents are being enjoined from acting under a provision of law which We have
earlier mentioned to be constitutionally infirm. The general principle relied upon cannot therefore
accord them the protection sought as they are not acting within their "sphere of responsibility"
but without it.

1. COURT OF APPEALS; ISSUANCE OF SPECIAL WRITS; BASIS OF JURISDICTION. The

jurisdiction of the Court of Appeals to issue writs of mandamus, prohibition, injunction, certiorari
and habeas corpus must be based on the existence of a right to appeal to it from the judgment
on the merits in the main case. Without such right of appeal, the Court of Appeals is without
jurisdiction to interfere, for that Court is purely a creature of statute. (Roldan vs. Villaroman, 69
Phil., 12; Breslin vs. Luzon Stevedoring, 47 Off. Gaz., 1171; Borja, vs. Saminiano, 71 Phil., 227.)

The nation has not recovered from the shock, and worst, the economic destitution brought about
by the plundering of the Treasury by the deposed dictator and his cohorts. A provision which
allows even the slightest possibility of a repetition of this sad experience cannot remain written in
our statute books.

2. COURTS; JURISDICTION OF INFERIOR COURTS IN CASES INVOLVING

CONSTITUTIONALITY OF TREATIES OR LAWS. The Constitution contemplates that the
inferior courts should have jurisdiction in cases involving the constitutionality of any treaty or law,
for it speaks of appellate review of final judgments of inferior courts in cases where such
constitutionality happens to be in issue. The two-thirds vote of the Supreme Court, required by
section 10 of Article VIII, conditions only the decisions of that Court in the exercise for its
appellate jurisdiction.

WHEREFORE, the instant petition is granted. Paragraph 1 of Section 44 of Presidential Decree

No. 1177 is hereby declared null and void for being unconstitutional. Cdpr
SO ORDERED.
EN BANC

3. INJUNCTION; STATUTES ALLEGED TO BE UNCONSTITUTIONAL OR INVALID; WHEN

ENFORCEMENT MAY BE ENJOINED. While it is true that the mere fact that a statute is
alleged to be unconstitutional or invalid will not entitle a party to have its enforcement enjoined,
the rule is not without exceptions, as where the lawful use and enjoyment of private property will
be injuriously affected by its enforcement (Cochiong vs. Dinglasan, 79 Phil., 125).

[G.R. No. L-18128. December 26, 1961.]

J. M. TUASON & CO., INC., HON. HERMOGENES CALUAG, Judge of
the Court of First Instance of Rizal (Quezon City, Branch IV) and
HON. NICASIO YATCO, Judge of the Court of First Instance of Rizal
(Quezon City, Branch V), petitioners, vs. COURT OF APPEALS
(Second Division), THE CHAIRMAN-ADMINISTRATOR OF THE LAND
TENURE ADMINISTRATION, BRUNA ROSETE and BUENAVENTURA
DIZON, respondents.

4. EMINENT DOMAIN; RESTRAINT UPON ACTS OF PROPERTY OWNER; WHEN

JUSTIFIED. There is nothing in the terms of Republic Act No. 2616 to justify the belief that the
Legislature intended a departure from the normal course prescribed for eminent domain cases,
where the rights of the owner of the land may not be disturbed without previous deposit of the
provisional value of the property sought to be condemned. The effectivity of section 4
of Republic Act No. 2616, which discontinues ejectment proceedings against the present
occupants, and restrains any act of disposition of the property, is justifiable only if the
Government takes possession of the land in question by depositing its value.

[G.R. No. L-18672 December 26, 1961.]

REPUBLIC OF THE PHILIPPINES, (Represented by the Land Tenure
Administration), petitioner, vs. J.
M.
TUASON
&
CO.,
ET
AL., respondents.

5. ID.; ID.; ID.; CONDEMNEE'S DOMINICAL RIGHTS NOT SUSPENDED BY THE MERE
FILING OF CONDEMNATION PROCEEDINGS. The mere filing of condemnation
proceedings for the benefit of tenants can not, by itself alone, lawfully suspend the condemnee's
dominical rights, whether of possession, enjoyment or disposition.

Araneta & Araneta for petitioners.

Solicitor General and Legal Staff, LTA for respondents.

DECISION

Legal Staff, LTA for petitioner.

REYES, J.B.L., J p:

166

The record shows that the judgments rendered in 1955 by the Court of First
Instance of Rizal, in its ejectment cases Q-1401 and Q-1402, were, upon regular appeal,
subsequently affirmed in toto by the Court of Appeals in its cases CA-G.R. Nos. 16265-66R, "Tuason & Company, Inc. vs. Bruna Rosete and Buenaventura Dizon". The Court of First
Instance, after the appellate court's decision became final and upon return of the records in
due course, issued writs of execution of the judgment against Rosete and Dizon, as prayed
for by the landowner Tuason & Company. Subsequently, on November 19, 1960, the Court
of First Instance issued orders of demolition of the houses of the evictees or judgment
debtors.

Thereupon, the evictees Rosete and Dizon recoursed to the Court of Appeals, and there
instituted, on February 4, 1961, certiorari proceedings (C.A.-G.R. No. 28842-R) against Judges
Yatco and Caluag, J. M. Tuason & Co. Inc., and the Land Tenure Administration. They averred,
after recital of the facts, that Judge Caluag gravely abused his discretion in issuing the
preliminary injunction in the prohibition case No. Q-5527 to restrain the initiation of
condemnation proceedings over the Tatalon Estate; that as beneficiaries under section 4
of Republic Act No. 2616, they were entitled to a stay of the demolition proceedings against
them; and that Judge Yatco abused his discretion in refusing to suspend the same until the
expropriation case was terminated. The petitioners prayed that

A few days previously, on November 16, 1960, the landowner J. M. Tuason & Company had also
applied for a writ of prohibition in the Court of First Instance of Quezon City (Case No. Q-5527)
against the Land Tenure Administration, the Auditor General, and the Solicitor General, to
restrain them from instituting expropriation proceedings of the petitioner Company's land in
Quezon City, generally known as the "Tatalon Estate", as expressly and specifically authorized
by Republic Act No. 2616, that became law, without executive approval, on August 3, 1959; the
Company claiming mainly that the Republic Act was unconstitutional, null and void, as legislation
aimed at depriving it of its property for the benefit of squatters and occupants, even if the
property had been actually subdivided, and its lots were being sold to the public; and that
respondent officers threatened to enforce said law by initiating expropriation proceedings. At
petitioner's request, Judge Hermogenes Caluag of the Quezon City Court of First Instance (to
whom the prohibition case was assigned) issued an ex parte writ of preliminary injunction on
November 18, 1960, upon the filing of a bond of P20,000.

(1) Judge Yatco be enjoined from issuing orders of demolition in

Cases Nos. Q-1401 and 1402;
(2) Judge Caluag be enjoined from enforcing the preliminary
injunction he had issued in Case No. Q-5527; and
(3) That the Land Tenure Administrator be commanded to
institute the expropriation proceedings authorized
by Republic Act No. 2616.
The Court of Appeals gave due course to the certiorari petition, and on February 9, 1961
ordered the issuance ex parte of the preliminary injunction prayed for, upon the filing of a P1,000
bond, which was done. Respondent Tuason & Company, Inc., moved to dissolve the preliminary
injunction of the Court of Appeals, pointing out that said Court's jurisdiction to take cognizance of
certiorari proceedings and to issue injunctions was only in aid of its appellate jurisdiction; that the
orders of execution issued by the Quezon City Court are not appealable; that the prohibition
proceedings in case No. Q-5527, involving (as they did) a question of constitutionality of a
statute, were likewise not appealable to the Court of Appeals; and that said Court, therefore, was
without jurisdiction to pass over the questioned orders and that its injunction was improperly
issued, not being in aid of the appellate jurisdiction of the Court of Appeals. These points were
reiterated in the Company's answer to the petition for certiorari. The Court of Appeals (Second
Division) refused to lift the preliminary injunction; on the contrary, on February 26, upon motion
of one of the respondents, the Land Tenure Administration, it clarified the previous writ of
preliminary injunction.

After injunction was issued, the evictees in Quezon City cases Q-1401 and 1402, Bruna Rosete
and Tranquilino Dizon, petitioned the Court of First Instance to suspend the order of demolition
of their houses, on the grounds that they were tenants of the Tatalon Estate; that Republic Act
No. 2616, after specifically authorizing the expropriation of the Tatalon Estate, in its section 4,
prescribes as follows:
"SECTION 4. After the expropriation proceedings
mentioned in section two of this Act shall have been initiated and
during the pendency of the same, no ejectment proceedings shall
be instituted or prosecuted against the present occupant of any
lot in said Tatalon Estate, and no ejectment proceedings already
commenced shall be continued and such lot or any portion
thereof shall not be sold by the owners of said estate to any
person other than the present occupant without the consent of the
latter given in a public document."

"in the sense that said writ lifts, quashes or dissolves the writ of
preliminary injunction issued by the Hon. Judge Hermogenes
Caluag, in Civil Case No. 5527, CFI, Rizal, so that respondent
Land Tenure Administration may thus properly file the complaint
for expropriation as authorized by Republic Act No. 2616."

However, Judge Nicasio Yatco of the Court of First Instance of Quezon City denied the
suspension, because no expropriation proceedings had been actually filed.

Thereupon, Tuason & Company instituted in this Supreme Court certiorari proceedings (G.R.
No. L-18128). We gave it due course and enjoined enforcement of the orders of the Court of

167

Appeals in C.A.-G.R. No. 28842, and ordered the Land Tenure Administration to defer the filing
of the expropriation proceedings until further orders.

based on the existence of a right to appeal to it from the judgment on the merits in the main
case. Without such right of appeal, the Court of Appeals is without jurisdiction to interfere, for
that Court is purely a creature of statute. 1 Since the issuance of orders for execution after the
judgment of ejectment had become final are not appealable, as the Court of Appeals itself has
ruled, 2 otherwise litigations would never end; and since the prohibition case No. Q-5527
involved the constitutionality of Republic Act No. 2616, an issue of which the Court of Appeals
could not take cognizance, said Court clearly had no authority to interfere by prerogative writ in
either litigation, for lack of appellate jurisdiction. Judge Caluag of Quezon City was, therefore,
not bound by the writs so issued by the Court of Appeals.

The sequel to the events narrated can be gleaned from the record of case G.R. No. L-18672, a
certiorari proceeding filed by the Land Tenure Administration against Judge Hermogenes Caluag
and Tuason & Company, Inc. The motion of the Land Tenure Administration and its
corespondents to dismiss the prohibition case in the Quezon City Court (Case No. Q-5527), as
well as their motion to dissolve the preliminary injunction issued by Judge Caluag, was denied by
him; and when the Second Division of the Court of Appeals issued its resolution of February 26,
1961, quashing Judge Caluag's preliminary injunction, the Land Tenure Administration attorneys
attempted to file the complaint for the expropriation of 93 hectares of the Tatalon Estate in the
Quezon City court, but said complaint could not be docketed because the judge had forbidden
the Court Clerk to do so. Despite entreaties, Judge Caluag refused to allow the expropriation
complaint to be docketed, claiming that he had no official knowledge of the resolution of the
Court of Appeals, even after he was served with a certified copy thereof.

On the second question, the preliminary injunction issued by Judge Caluag was merely an
incident to the main (prohibition) case, and evidently had for its object to prevent that the
principal case and any remedy to be granted therein should be rendered moot and nugatory by
the filing of the condemnation proceedings sought to be prohibited. Issuance of the injunction
was authorized by section 7 of Rule 67 of the Rules of Court, dealing with writs, certiorari,
prohibition, and mandamus.
"Sec 7. Expediting proceedings. Preliminary injunctio.

The Land Tenure Administration avers that the issuance of the injunction in the prohibition case
(Q-5527), the denial of the motion to dismiss the case, the refusal to dissolve the injunction, and
the refusal to have the complaint for expropriation docketed were all in abuse of discretion and
excess of jurisdiction; that furthermore, venue was improperly laid, because an action for
prohibition is personal in character, and neither petitioner nor any of the respondents in said
prohibition case were domiciled in Quezon City. Petitioner Land Tenure Administration, therefore,
prayed that Judge Caluag be ordered by this Court to refrain from proceeding with the prohibition
case, from enforcing the writ of preliminary injunction issued therein, from issuing orders of
demolition of the tenant's houses, and to allow the expropriation case to be docketed and
regularly proceeded with.

The court in which the petition is filed, or a judge

thereof, may make orders expediting the proceedings, and may
also grant a preliminary injunction for the preservation of the
rights of the parties pending such proceedings."
Authority is likewise derived from section 6 of Rule 124, concerning the powers and duties of
courts:
"When by law jurisdiction is conferred on a Court or
judicial officer, all auxiliary writs, processes and other means
necessary to carry into effect may be employed by such court or
officer."

As we view it, two main questions are involved in these cases:

(1) In G. R. L-18128: Did the Court of Appeals have jurisdiction to lift, quash, and dissolve the
preliminary writ of injunction issued by Judge Caluag in the prohibition case No. Q-5527 pending
in his court?

That the alleged unconstitutionality of Republic Act No. 2616 could be invoked as a defense in
the expropriation proceedings does not alter the right of respondent Tuason & Company to
invoke it in the prohibition case, without awaiting the initiation of the condemnation case. In any
event, the issue of constitutionality would be like a prejudicial question to the expropriation, as it
would be a waste of time and effort to appoint evaluation commissioners and debate the market
value of the property sought to be condemned if it turned out that the condemnation was illegal.

(2) In G. R. L-18672: Did Judge Caluag act without or in excess of jurisdiction in issuing the
preliminary injunction in the prohibition case?
As to the first issue, we are satisfied that the writ of injunction issued by the Court of Appeals in
CA-G.R. No. 28842-R is null and void for want of jurisdiction. The authority of said Court to issue
writs of mandamus, prohibition, injunction, certiorari and habeas corpus is expressly limited by
statute to their issuance in aid of its appellate jurisdiction(Judiciary Act, sec. 30), and it has been
repeatedly ruled by us that the jurisdiction of the Court of Appeals to issue such writs must be

It is urged by amicus curiae that Courts of First Instance have no jurisdiction to entertain actions
assailing the constitutionality of statutes or treaties, because section 10 of Article VIII of the
Constitution prescribes that

168

"No treaty or law may be declared unconstitutional

without the concurrence of two-thirds of all the members of the
(Supreme) Court."

It may be added that the maintenance of the injunction issued by Judge Caluag works no real
prejudice at present, not only because we can not anticipate the final decision of Judge Caluag
on the issue of constitutionality, but also because the Land Tenure Administration confesses that
it has available only two million pesos to pay for property that, according to the proposed
complaint for expropriation, has an area of 1,096,849.50 square meters with a reasonable
assessed value of P6,034,865.95. Plainly, the government is not now in a position to take over
the possession of the land, since it does not have the money that it must deposit as a
prerequisite to its entry (section 3 of Rule 69 on Eminent Domain).

This contention is, however, destroyed by the terms of section 2 of Article VIII, wherein the
Constitution itself inhibits Congress from depriving the Supreme Court
"of its jurisdiction to review, revise, reverse, modify or affirm
on appeal, certiorari or writ of error, as the law or the rules of
court may provide, final judgments and decrees of inferior courts
in

In moving for the lifting of the preliminary injunction and for a stay of the ejectment proceedings,
the Land Tenure Administration and the other movants assume that, upon filing of the
condemnation petition, the land owner will be barred from enforcing its final judgments of
ejectment against the possessors of the land, even if the Government should not take over the
possession of the property involved. This view, in our opinion, is not warranted. We see nothing
in the terms of Republic Act No. 2616 to justify the belief that the Legislature intended a
departure from the normal course prescribed for eminent domain cases, where the rights of the
owner of the land may not be disturbed without previous deposit of the provisional value of the
property sought to be condemned. The effectivity of section 4 of Republic Act 2616,
discontinuing ejectment proceedings against the present occupants, and restraining any act of
disposition of the property, is justifiable only if the Government takes possession of the land in
question by depositing its value. It needs no argument to show that by restraining the land owner
from enforcing even final judgments in his favor to recover possession of his property, as well as
from disposing of it to persons of his choice, he is deprived of the substance of ownership, and
his title is left as an empty shell. The land owner would then be deprived of those attributes of
ownership that give it value, and his property is virtually taken from him without compensation
and in violation of the Constitution, particularly in view of the fact that R.A. 2616 (unlike previous
Acts of similar character) does not even provide for a deposit of the current rentals by the
tenants during the pendency of the proceedings (cf. R.A. No. 1162, section 5). The Bill of Rights,
in requiring that "private property shall not be taken for public use without just compensation",
and Article XIII, section 4, in prescribing that "Congress may authorize, upon payment of just
compensation, the expropriation of lands to be subdivided into small lots and conveyed at cost to
individuals", prohibit any disturbance of proprietary rights without coetaneous payment of just
indemnity. Hence, the mere filing of the condemnation proceedings for the benefit of tenants can
not, by itself alone, lawfully suspend the condemnee's dominical rights, whether of possession,
enjoyment, or disposition. And this is especially the case where final and executory judgments of
ejectment have been obtained against the occupants of the property.

(1) All cases in which the constitutionality or validity of

any treaty, law, ordinance or executive orders or regulations is in
question." (Italics supplied)
Plainly, the Constitution contemplates that the inferior courts should have jurisdiction in cases
involving constitutionality of any treaty or law, for it speaks of appellate review offinal judgments
of inferior courts in cases where such constitutionality happens to be in issue. Construing both
provisions together, it is readily discerned that the two-thirds vote of the Supreme Court, required
by section 10 of Article VIII, conditions only the decisions of the Supreme Court in the exercise
of its appellate jurisdiction.
It is true that, as argued by the petitioner Land Tenure Administration, the mere fact that a statute
is alleged to be unconstitutional or invalid will not entitle a party to have its enforcement
enjoined. But the rule is not without exceptions. In Cochiong vs. Dinglasan, 79 Phil., 125, this
Court quoted with approval from 28 Am. Jur. 369-371 the rule that
"It is recognized, however, that an injunction will lie to
restrain the threatened enforcement of an invalid law where the
lawful use and enjoyment of private property will be injuriously
affected by its enforcement . . .",
and the petition for a writ of prohibition in Q-5527 of the Court of First Instance of Quezon
City pleads precisely this threatened injury to the proprietary rights of Tuason & Company,
Inc., as owners of the Tatalon Estate. Whether this injury is real or not must be decided on
the evidence submitted in that case, and we are in no position to resolve it in the certiorari
proceedings now before us. Our task here is merely to determine absence or excess of
jurisdiction: and on the facts and applicable law, we can not say that in the issuance of the
preliminary injunction by the Court of First Instance of Quezon City there was such grave
abuse of discretion as would constitute excess of jurisdiction.

Whether or not venue was correctly laid in the prohibition case now pending in the Court of First
Instance of Quezon City is a question of law that does not affect jurisdiction, and any resolution
of the trial Court thereon is reviewable by appeal and not by certiorari.
In view of the foregoing, judgment is hereby rendered:

169

(a) In Case G.R. No. L-18128. J. M. Tuason & Co., Inc. vs. Court of Appeals, et al., setting aside
the writ of preliminary injunction issued by the Court of Appeals in its case CA-G.R. No. 28842R, the same being null and void for lack of jurisdiction on the part of the Court to take
cognizance of said case;

Ramon A. Gonzales for petitioner.

DECISION
CRUZ, J p:

(b) In Case G.R. No. L-18672, Republic of the Philippines vs. J. M. Tuason & Co., Inc., et al.,
dismissing the petition for certiorari, and denying the writs of certiorari and injunction applied for.

The essence of due process is distilled in the immortal cry of Themistocles to Alcibiades: "Strike
but hear me first!'" It is this cry that the petitioner in effect repeats here as he challenges the
constitutionality of Executive Order No. 626-A. Cdpr

The Court of First Instance of Quezon City is directed to hear and resolve the prohibition case
No. Q-5527 with all practicable dispatch.

The said executive order reads in full as follows:

Without costs. So ordered.

"WHEREAS, the President has given orders prohibiting the interprovincial

movement of carabaos and the slaughtering of carabaos not complying
with the requirements of Executive Order No. 626 particularly with respect
to age;

Bengzon, C.J, Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Dizon and De Leon, JJ.,
concur.
Paredes, J., did not take part.

"WHEREAS, it has been observed that despite such orders the violators
still manage to circumvent the prohibition against interprovincial
movement of carabaos by transporting carabeef instead; and.

||| (J. M. Tuason & Co., Inc. v. Court of Appeals, G.R. No. L-18128, L-1867, [December 26,
1961], 113 PHIL 673-684)

"WHEREAS, in order to achieve the purposes and objectives of Executive

Order No. 626 and the prohibition against interprovincial movement of
carabaos, it is necessary to strengthen the said Executive Order and
provide for the disposition of the carabaos and carabeef subject of the
violation;.
"NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do
hereby promulgate the following:
"SECTION 1. Executive Order No. 626 is hereby amended such that
henceforth, no carabao regardless of age, sex, physical condition or
purpose and no carabeef shall be transported from one province to
another. The carabao or carabeef transported in violation of this
Executive Order as amended shall be subject to confiscation and
forfeiture by the government, to be distributed to charitable institutions
and other similar institutions as the Chairman of the National Meat
Inspection Commission may see fit, in the case of carabeef, and to
deserving farmers through dispersal as the Director of Animal Industry
may see fit, in the case of carabaos.

EN BANC
[G.R. No. 74457. March 20, 1987.]
RESTITUTO YNOT, petitioner, vs. INTERMEDIATE APPELLATE COURT, THE
STATION COMMANDER, INTEGRATED NATIONAL POLICE, BAROTAC
NUEVO, ILOILO and THE REGIONAL DIRECTOR, BUREAU OF ANIMAL
INDUSTRY, REGION IV, ILOILO CITY, respondents.

170

"SECTION 2. This Executive Order shall take effect immediately.

And while it is true that laws are presumed to be constitutional, that presumption is not by any
means conclusive and in fact may be rebutted. Indeed, if there be a clear showing of their
invalidity, and of the need to declare them so, then "will be the time to make the hammer fall, and
heavily," 8 to recall Justice Laurel's trenchant warning. Stated otherwise, courts should not follow
the path of least resistance by simply presuming the constitutionality of a law when it is
questioned. On the contrary, they should probe the issue more deeply, to relieve the abscess,
paraphrasing another distinguished jurist, 9 and so heal the wound or excise the affliction.

"Done in the City of Manila, this 25th day of October, in the year of Our
Lord, nineteen hundred and eighty.
(SGD.) FERDINAND E. MARCOS
President
Republic of the Philippines"

Judicial power authorizes this; and when the exercise is demanded, there should be no shirking
of the task for fear of retaliation, or loss of favor, or popular censure, or any other similar
inhibition unworthy of the bench, especially this Court. LLjur

The petitioner had transported six carabaos in a pump boat from Masbate to Iloilo on January
13, 1984, when they were confiscated by the police station commander of Barotac Nuevo, Iloilo,
for violation of the above measure. 1 The petitioner sued for recovery, and the Regional Trial
Court of Iloilo City issued a writ of replevin upon his filing of asupersedeas bond of P12,000.00.
After considering the merits of the case, the court sustained the confiscation of the carabaos
and, since they could no longer be produced, ordered the confiscation of the bond. The court
also declined to rule on the constitutionality of the executive order, as raised by the petitioner, for
lack of authority and also for its presumed validity. 2

The challenged measure is denominated an executive order but it is really presidential decree,
promulgating a new rule instead of merely implementing an existing law. It was issued by
President Marcos not for the purpose of taking care that the laws were faithfully executed but in
the exercise of his legislative authority under Amendment No. 6. It was provided thereunder that
whenever in his judgment there existed a grave emergency or a threat or imminence thereof or
whenever the legislature failed or was unable to act adequately on any matter that in his
judgment required immediate action, he could, in order to meet the exigency, issue decrees,
orders or letters of instruction that were to have the force and effect of law. As there is no
showing of any exigency to justify the exercise of that extraordinary power then, the petitioner
has reason, indeed, to question the validity of the executive order. Nevertheless, since the
determination of the grounds was supposed to have been made by the President "in his
judgment," a phrase that will lead to protracted discussion not really necessary at this time, we
reserve resolution of this matter until a more appropriate occasion. For the nonce, we confine
ourselves to the more fundamental question of due process.

The petitioner appealed the decision to the Intermediate Appellate Court, * 3 which upheld the
trial court, ** and he has now come before us in this petition for review on certiorari. prcd
The thrust of his petition is that the executive order is unconstitutional insofar as it authorizes
outright confiscation of the carabao or carabeef being transported across provincial boundaries.
His claim is that the penalty is invalid because it is imposed without according the owner a right
to be heard before a competent and impartial court as guaranteed by due process. He
complains that the measure should not have been presumed, and so sustained, as
constitutional. There is also a challenge to the improper exercise of the legislative power by the
former President under Amendment No. 6 of the1973 Constitution. 4

It is part of the art of constitution-making that the provisions of the charter be cast in precise and
unmistakable language to avoid controversies that might arise on their correct interpretation.
That is the ideal. In the case of the due process clause, however, this rule was deliberately not
followed and the wording was purposely kept ambiguous. In fact, a proposal to delineate it more
clearly was submitted in the Constitutional Convention of 1934, but it was rejected by Delegate
Jose P. Laurel, Chairman of the Committee on the Pill of Rights, who forcefully argued against it.
He was sustained by the body. 10

While also involving the same executive order, the case of Pesigan v. Angeles 5 is not applicable
here. The question raised there was the necessity of the previous publication of the measure in
the Official Gazette before it could be considered enforceable. We imposed the requirement then
on the basis of due process of law. In doing so, however, this Court did not, as contended by the
Solicitor General, impliedly affirm the constitutionality of Executive Order No. 626-A. That is an
entirely different matter.

The due process clause was kept intentionally vague so it would remain also conveniently
resilient. This was felt necessary because due process is not, like some provisions of the
fundamental law, an "iron rule" laying down an implacable and immutable command for all
seasons and all persons. Flexibility must be the best virtue of the guaranty. The very elasticity of
the due process clause was meant to make it adapt easily to every situation, enlarging or
constricting its protection as the changing times and circumstances may require.

This Court has declared that while lower courts should observe a becoming modesty in
examining constitutional questions, they are nonetheless not prevented from resolving the same
whenever warranted, subject only to review by the highest tribunal. 6 We have jurisdiction
under the Constitution to "review, revise, reverse, modify or affirm on appeal or certiorari, as the
law or rules of court may provide," final judgments and orders of lower courts in, among others,
all cases involving the constitutionality of certain measures.7 This simply means that the
resolution of such cases may be made in the first instance by these lower courts.

171

Aware of this, the courts have also hesitated to adopt their own specific description of due
process lest they confine themselves in a legal straitjacket that will deprive them of the elbow
room they may need to vary the meaning of the clause whenever indicated. Instead, they have
preferred to leave the import of the protection open-ended, as it were, to be "gradually
ascertained by the process of inclusion and exclusion in the course of the decision of cases as
they arise." 11 Thus, Justice Felix Frankfurter of the U.S. Supreme Court, for example, would go
no farther than to define due process - and in so doing sums it all up as nothing more and
nothing less than "the embodiment of the sporting idea of fair play." 12

rational connection between the fact proved and the fact ultimately presumed
therefrom. 15 There are instances when the need for expeditious action will justify omission of
these requisites, as in the summary abatement of a nuisanceper se, like a mad dog on the
loose, which may be killed on sight because of the immediate danger it poses to the safety and
lives of the people. Pornographic materials, contaminated meat and narcotic drugs are inherently
pernicious and may be summarily destroyed. The passport of a person sought for a criminal
offense may be cancelled without hearing, to compel his return to the country he has
fled. 16 Filthy restaurants may be summarily padlocked in the interest of the public health and
bawdy houses to protect the public morals. 17 In such instances, previous judicial hearing may
be omitted without violation of due process in view of the nature of the property involved or the
urgency of the need to protect the general welfare from a clear and present danger. cdll

When the barons of England extracted from their sovereign liege the reluctant promise that that
Crown would thenceforth not proceed against the life, liberty or property of any of its subjects
except by the lawful judgment of his peers or the law of the land, they thereby won for
themselves and their progeny that splendid guaranty of fairness that is now the hallmark of the
free society. The solemn vow that King John made at Runnymede in 1215 has since then
resounded through the ages, as a ringing reminder to all rulers, benevolent or base, that every
person, when confronted by the stern visage of the law, is entitled to have his say in a fair and
open hearing of his cause. prLL

The protection of the general welfare is the particular function of the police power which both
restraints and is restrained by due process. The police power is simply defined as the power
inherent in the State to regulate liberty and property for the promotion of the general
welfare. 18 By reason of its function, it extends to all the great public needs and is described as
the most pervasive, the least limitable and the most demanding of the three inherent powers of
the State, far outpacing taxation and eminent domain. The individual, as a member of society, is
hemmed in by the police power, which affects him even before he is born and follows him still
after he is dead from the womb to beyond the tomb in practically everything he does or
owns. Its reach is virtually limitless. It is a ubiquitous and often unwelcome intrusion. Even so, as
long as the activity or the property has some relevance to the public welfare, its regulation under
the police power is not only proper but necessary. And the justification is found in the venerable
Latin maxims, Salus populi est suprema lex and Sic utere tuo ut alienum non laedas, which call
for the subordination of individual interests to the benefit of the greater number.

The closed mind has no place in the open society. It is part of the sporting idea of fair play to
hear "the other side" before an opinion is formed or a decision is made by those who sit in
judgment. Obviously, one side is only one-half of the question; the other half must also be
considered if an impartial verdict is to be reached based on an informed appreciation of the
issues in contention. It is indispensable that the two sides complement each other, as unto the
bow the arrow, in leading to the correct ruling after examination of the problem not from one or
the other perspective only but in its totality. A judgment based on less that this full appraisal, on
the pretext that a hearing is unnecessary or useless, is tainted with the vice of bias or intolerance
or ignorance, or worst of all, in repressive regimes, the insolence of power.

It is this power that is now invoked by the government to justify Executive Order No. 626-A,
amending the basic rule in Executive Order No. 626, prohibiting the slaughter of carabaos except
under certain conditions. The original measure was issued for the reason, as expressed in one
of its Whereases, that "present conditions demand that the carabaos and the buffaloes be
conserved for the benefit of the small farmers who rely on them for energy needs." We affirm at
the outset the need for such a measure. In the face of the worsening energy crisis and the
increased dependence of our farms on these traditional beasts of burden, the government would
have been remiss, indeed, if it had not taken steps to protect and preserve them.

The minimum requirements of due process are notice and hearing 13 which, generally speaking,
may not be dispensed with because they are intended as a safeguard against official
arbitrariness. It is a gratifying commentary on our judicial system that the jurisprudence of this
country is rich with applications of this guaranty as proof of our fealty to the rule of law and the
ancient rudiments of fair play. We have consistently declared that every person, faced by the
awesome power of the State, is entitled to "the law of the land," which Daniel Webster described
almost two hundred years ago in the famous Dartmouth College Case, 14 as "the law which
hears before it condemns, which proceeds upon inquiry and renders judgment only after trial." It
has to be so if the rights of every person are to be secured beyond the reach of officials who, out
of mistaken zeal or plain arrogance, would degrade the due process clause into a worn and
empty catchword.

A similar prohibition was challenged in United States v. Toribio, 19 where a law regulating the
registration, branding and slaughter of large cattle was claimed to be a deprivation of property
without due process of law. The defendant had been convicted thereunder for having
slaughtered his own carabao without the required permit, and he appealed to the Supreme
Court. The conviction was affirmed. The law was sustained as a valid police measure to prevent
the indiscriminate killing of carabaos, which were then badly needed by farmers. An epidemic
had stricken many of these animals and the reduction of their number had resulted in an acute
decline in agricultural output, which in turn had caused an incipient famine. Furthermore,
because of the scarcity of the animals and the consequent increase in their price, cattle-rustling

This is not to say that notice and hearing are imperative in every case for, to be sure, there are a
number of admitted exceptions. The conclusive presumption, for example, bars the admission of
contrary evidence as long as such presumption is based on human experience or there is a

172

had spread alarmingly, necessitating more effective measures for the registration and branding
of these animals. The Court held that the questioned statute was a valid exercise of the police
power and declared in part as follows:

one province than in another. Obviously, retaining the carabaos in one province will not prevent
their slaughter there, any more than moving them to another province will make it easier to kill
them there. As for the carabeef, the prohibition is made to apply to it as otherwise, so says
executive order, it could be easily circumvented by simply killing the animal. Perhaps so.
However, if the movement of the live animals for the purpose of preventing their slaughter cannot
be prohibited, it should follow that there is no reason either to prohibit their transfer as, not to be
flippant, dead meat.

"To justify the State in thus interposing its authority in behalf of the public,
it must appear, first, that the interests of the public generally, as
distinguished from those of a particular class, require such interference;
and second, that the means are reasonably necessary for the
accomplishment of the purpose, and not unduly oppressive upon
individuals. . . .

Even if a reasonable relation between the means and the end were to be assumed, we would
still have to reckon with the sanction that the measure applies for violation of the prohibition. The
penalty is outright confiscation of the carabao or carabeef being transported, to be meted out by
the executive authorities, usually the police only. In the Toribio Case, the statute was sustained
because the penalty prescribed was fine and imprisonment, to be imposed by the court after trial
and conviction of the accused. Under the challenged measure, significantly, no such trial is
prescribed, and the property being transported is immediately impounded by the police and
declared, by the measure itself, as forfeited to the government.

"From what has been said, we think it is clear that the enactment of the
provisions of the statute under consideration was required by `the
interests of the public generally, as distinguished from those of a
particular class' and that the prohibition of the slaughter of carabaos for
human consumption, so long as these animals are fit for agricultural work
or draft purposes was a `reasonably necessary' limitation on private
ownership, to protect the community from the loss of the services of such
animals by their slaughter by improvident owners, tempted either by
greed of momentary gain, or by a desire to enjoy the luxury of animal
food, even when by so doing the productive power of the community may
be measurably and dangerously affected."

In the instant case, the carabaos were arbitrarily confiscated by the police station commander,
were returned to the petitioner only after he had filed a complaint for recovery and given
a supersedeas bond of P12,000.00, which was ordered confiscated upon his failure to produce
the carabaos when ordered by the trial court. The executive order defined the prohibition,
convicted the petitioner and immediately imposed punishment, which was carried out forthright.
The measure struck at once and pounced upon the petitioner without giving him a chance to be
heard, thus denying him the centuries-old guaranty of elementary fair play.

In the light of the tests mentioned above, we hold with the Toribio Case that the carabao, as the
poor man's tractor, so to speak, has a direct relevance to the public welfare and so is a lawful
subject of Executive Order No. 626. The method chosen in the basic measure is also reasonably
necessary for the purpose sought to be achieved and not unduly oppressive upon individuals,
again following the above-cited doctrine. There is no doubt that by banning the slaughter of
these animals except where they are at least seven years old if male and eleven years old if
female upon issuance of the necessary permit, the executive order will be conserving those still
fit for farm work or breeding and preventing their improvident depletion. llcd

It has already been remarked that there are occasions when notice and hearing may be validly
dispensed with notwithstanding the usual requirement for these minimum guarantees of due
process. It is also conceded that summary action may be validly taken in administrative
proceedings as procedural due process is not necessarily judicial only. 20In the exceptional
cases accepted, however, there is a justification for the omission of the right to a previous
hearing, to wit, the immediacy of the problem sought to be corrected and the urgency of the
need to correct it. cdphil

But while conceding that the amendatory measure has the same lawful subject as the original
executive order, we cannot say with equal certainty that it complies with the second
requirement, viz., that there be a lawful method. We note that to strengthen the original
measure, Executive Order No. 626-A imposes an absolute ban not on theslaughter of the
carabaos but on their movement, providing that "no carabao regardless of age, sex, physical
condition or purpose (sic) and no carabeef shall be transported from one province to another."
The object of the prohibition escapes us. The reasonable connection between the means
employed and the purpose sought to be achieved by the questioned measure is missing.

In the case before us, there was no such pressure of time or action calling for the petitioner's
peremptory treatment. The properties involved were not even inimical per seas to require their
instant destruction. There certainly was no reason why the offense prohibited by the executive
order should not have been proved first in a court of justice, with the accused being accorded all
the rights safeguarded to him under the Constitution. Considering that, as we held in Pesigan v.
Angeles, 21 Executive Order No. 626-A is penal in nature, the violation thereof should have been
pronounced not by the police only but by a court of justice, which alone would have had the
authority to impose the prescribed penalty, and only after trial and conviction of the accused.

We do not see how the prohibition of the interprovincial transport of carabaos can prevent their
indiscriminate slaughter, considering that they can be killed anywhere, with no less difficulty in

173

We also mark, on top of all this, the questionable manner of the disposition of the confiscated
property as prescribed in the questioned executive order. It is there authorized that the seized
property shall "be distributed to charitable institutions and other similar institutions as the
Chairman of the National Meat Inspection Commissionmay see fit, in the case of carabeef, and
to deserving farmers through dispersal as the Director of Animal Industry may see fit, in the case
of carabaos." (Emphasis supplied.) The phrase "may see fit" is an extremely generous and
dangerous condition, if condition it is. It is laden with perilous opportunities for partiality and
abuse, and even corruption. One searches in vain for the usual standard and the reasonable
guidelines, or better still, the limitations that the said officers must observe when they make their
distribution. There is none. Their options are apparently boundless. Who shall be the fortunate
beneficiaries of their generosity and by what criteria shall they be chosen? Only the officers
named can supply the answer, they and they alone may choose the grantee as they see fit, and
in their own exclusive discretion. Definitely, there is here a "roving commission," a wide and
sweeping authority that is not "canalized within banks that keep it from overflowing," in short, a
clearly profligate and therefore invalid delegation of legislative powers.

The strength of democracy lies not in the rights it guarantees but in the courage of the people to
invoke them whenever they are ignored or violated. Rights are but weapons on the wall if, like
expensive tapestry, all they do is embellish and impress. Rights, as weapons, must be a promise
of protection. They become truly meaningful, and fulfill the role assigned to them in the free
society, if they are kept bright and sharp with use by those who are not afraid to assert them.
WHEREFORE, Executive Order No. 626-A is hereby declared unconstitutional. Except as
affirmed above, the decision of the Court of Appeals is reversed. The supersedeas bond is
cancelled and the amount thereof is ordered restored to the petitioner. No costs.
EN BANC
[G.R. No. L-23127. April 29, 1971.]
FRANCISCA
SERRANO
DE
AGBAYANI, plaintiffappellee, vs. PHILIPPINE NATIONAL BANK and THE PROVINCIAL
SHERIFF OF PANGASINAN,defendants, PHILIPPINE NATIONAL
BANK, defendant-appellant.

To sum up then, we find that the challenged measure is an invalid exercise of the police power
because the method employed to conserve the carabaos is not reasonably necessary to the
purpose of the law and, worse, is unduly oppressive. Due process is violated because the owner
of the property confiscated is denied the right to be heard in his defense and is immediately
condemned and punished. The conferment on the administrative authorities of the power to
adjudge the guilt of the supposed offender is a clear encroachment on judicial functions and
militates against the doctrine of separation of powers. There is, finally, also an invalid delegation
of legislative powers to the officers mentioned therein who are granted unlimited discretion in the
distribution of the properties arbitrarily taken. For these reasons, we hereby declare Executive
Order No. 626-A unconstitutional.

Dionisio E. Moya for plaintiff-appellee.

Ramon B. de los Reyes for defendant-appellant.
SYLLABUS
1. POLITICAL LAW; JUDICIAL REVIEW; EFFECTS OF THE DECLARATION OF
UNCONSTITUTIONALITY; ORTHODOX VIEW; MODIFIED IN CASE AT BAR. The decision
now on appeal reflects the orthodox view that an unconstitutional act, for that matter an
executive order or a municipal ordinance likewise suffering from that infirmity, cannot be the
source of any legal rights or duties. Nor can it justify any official act taken under it. Its
repugnancy to the fundamental law once judicially declared results in its being to all intents and
purposes a mere scrap of paper. As the new Civil Code puts it: "When the courts declare a law
to be inconsistent with the Constitution, the former shall be void and the latter shall govern.
Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws or the Constitution." It is understandable why it should be so, the
Constitution being supreme and paramount. Any legislative or executive act contrary to its terms
cannot survive. Such a view has support in logic and possesses the merit of simplicity. It may not
however be sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity
such challenged legislative or executive act must have been in force and had to be complied
with. This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is
entitled to obedience and respect. Parties may have acted under it and may have changed their
positions. What could be more fitting than that in a subsequent litigation regard be had to what
has been done while such legislative or executive act was in operation and presumed to be valid

We agree with the respondent court, however, that the police station commander who
confiscated the petitioner's carabaos is not liable in damages for enforcing the executive order in
accordance with its mandate. The law was at that time presumptively valid, and it was his
obligation, as a member of the police, to enforce it. It would have been impertinent of him, being
a mere subordinate of the President, to declare the executive order unconstitutional and, on his
own responsibility alone, refuse to execute it. Even the trial court, in fact, and the Court of
Appeals itself did not feel they had the competence, for all their superior authority, to question
the order we now annul.
The Court notes that if the petitioner had not seen fit to assert and protect his rights as he saw
them, this case would never have reached us and the taking of his property under the
challenged measure would have become a fait accompli despite its invalidity. We commend him
for his spirit. Without the present challenge, the matter would have ended in that pump boat in
Masbate and another violation of the Constitution, for all its obviousness, would have been
perpetrated, allowed without protest, and soon forgotten in the limbo of relinquished rights. LLpr

174

in all respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a
fact must be reckoned with. This is merely to reflect awareness that precisely because the
judicially is the governmental organ which has the final say on whether or not a legislative or
executive measure is valid, a period of time may have elapsed before it can exercise the power
of judicial review that may lead to a declaration of nullity. It would be to deprive the law of its
quality of fairness and justice then, if there be no recognition of what had transpired prior to such
adjudication. In the language of an American Supreme Court decision: "The actual existence of
a statute, prior to such a determination [of unconstitutionality], is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be erased by a new
judicial declaration. The effect of the subsequent ruling as to invalidity may have to be
considered in various aspects, with respect to particular relations, individual and corporate,
and particular conduct private and official." (Chicot County Drainage Dist. v. Baxter States Bank,
308 US 371, 374 (1940) This language has been quoted with approval in a resolution in Araneta
v. Hill (93 Phil. 1002 (1953) and the decision in Manila Motor Co., Inc. v. Flores, (99 Phil. 738
(1956). An even more recent instance is the opinion of Justice Zaldivar speaking for the Court in
Fernandez v. Cuerva and Co., 21 SCRA 1095.

Plaintiff Francisca Serrano de Agbayani, now appellee, was able to obtain a favorable judgment
in her suit against defendant, now appellant Philippine National Bank, permanently enjoining the
other defendant, the Provincial Sheriff of Pangasinan, from proceeding with an extrajudicial
foreclosure sale of land belonging to plaintiff mortgaged to appellant Bank to secure a loan
declared no longer enforceable, the prescriptive period having lapsed. There was thus a failure
to sustain the defense raised by appellant that if the moratorium under an Executive Order and
later an Act subsequently found unconstitutional were to be counted in the computation, then the
right to foreclose the mortgage was still subsisting. In arriving at such a conclusion, the lower
court manifested a tenacious adherence to the inflexible view that an unconstitutional act is not a
law, creating no rights and imposing no duties, and thus as inoperative as if it had never been. It
was oblivious to the force of the principle adopted by this Court that while a statute's repugnancy
to the fundamental law deprives it of its character as a juridical norm, its having been operative
prior to its being nullified is a fact that is not devoid of legal consequences. As will hereafter be
explained, such a failing of the lower court resulted in an erroneous decision. We find for
appellant Philippine National Bank, and we reverse.
There is no dispute as to the facts. Plaintiff obtained the loan in the amount of P450.00 from
defendant Bank dated July 19, 1939, maturing on July 19, 1944, secured by real estate
mortgage duly registered covering property described in T.C.T. No. 11275 of the province of
Pangasinan. As of November 27, 1959, the balance due on said loan was in the amount of
P1,294.00. As early as July 13 of the same year, defendant instituted extra-judicial foreclosure
proceedings in the office of defendant Provincial Sheriff of Pangasinan for the recovery of the
balance of the loan remaining unpaid. Plaintiff countered with his suit against both defendants on
August 10, 1959, her main allegation being that the mortgage sought to be foreclosed had long
prescribed, fifteen years having elapsed from the date of maturity, July 19, 1944. She sought and
was able to obtain a writ of preliminary injunction against defendant Provincial Sheriff, which was
made permanent in the decision now on appeal. Defendant Bank in its answer prayed for the
dismissal of the suit as even on plaintiff's own theory the defense of prescription would not be
available if the period from March 10, 1945, when Executive Order No. 32 1 was issued, to July
26, 1948, when the subsequent legislative act 2 extending the period of moratorium was
declared invalid, were to be deducted from the computation of the time during which the bank
took no legal steps for the recovery of the loan. As noted, the lower court did not find such
contention persuasive and decided the suit in favor of plaintiff.

2. ID., ID.; ID.; PRESCRIPTION PERIOD, TOLLED DURING THE EFFECTIVITY OF

EXECUTIVE ORDER NO. 32. Precisely though because of the judicial recognition that
moratorium was a valid governmental response to the plight of the debtors who were war
sufferers, this Court has made clear its view in a sense of cases impressive in their number and
unanimity that during the eight-year period that Executive Order No. 32 and Republic Act No.
312 were in force, prescription did not run. So it has been held from Day v. Court of First
Instance, 94 Phil. 816 decided in 1954, to Republic v. Hernaez, L-24137, January 30, 1970
handed down only last year. What is deplorable is that as of the time of the lower court decision
on January 27, 1960, a least eight decisions had left no doubt as to the prescriptive period being
tolled in the meanwhile prior to such adjudication of invalidity. Speaking of the opposite view
entertained by the lower court, the present Chief Justice, in Liboro v. Finance and Mining
Investments Corp. has categorized it as having been "explicitly and consistently rejected by this
Court." The error of the lower court in sustain plaintiff's suit is thus manifest. From July 19, 1944,
when her loan matured, to July 13, 1959, when extrajudicial foreclosure proceedings were
started by appellant Bank, the time consumed is six days short of fifteen years. The prescriptive
period was tolled, however. from March 10, 1945, the effectivity of Executive Order No. 32, to
May 18, 1953, when the decision of Rutter v. Esteban was promulgated, covering eight years,
two months and eight days. Obviously then, when report was had extrajudicially to the
foreclosure of the mortgage obligation, there was time to spare before prescription could be
availed of as a defense.

Hence this appeal, which, as made clear at the outset, possesses merit, there being a failure on
the part of the lower court to adhere to the applicable constitutional doctrine as to the effect to be
given to a statute subsequently declared invalid.

DECISION

1. The decision now on appeal reflects the orthodox view that an unconstitutional act, for that
matter an executive order or a municipal ordinance likewise suffering from that infirmity, cannot
be the source of any legal rights or duties. Nor can it justify any official act taken under it. Its
repugnancy to the fundamental law once judicially declared results in its being to all intents and
purposes a mere scrap of paper. As the new Civil Code puts it: "When the courts declare a law
to be inconsistent with the Constitution, the former shall be void and the latter shall govern.

FERNANDO, J p:
A correct appreciation of the controlling doctrine as to the effect, if any, to be attached to a
statute subsequently adjudged invalid, is decisive of this appeal from a lower court decision.

175

Administrative or executive acts, orders and regulations shall be valid only when they are not
contrary to the laws of the Constitution. 3It is understandable why it should be so, the
Constitution being supreme and paramount. Any legislative or executive act contrary to its terms
cannot survive.

That is precisely what happened in connection with Republic Act No. 342, the moratorium
legislation, which continued Executive Order No. 32, issued by the then President Osmea,
suspending the enforcement of payment of all debts and other monetary obligations payable by
war sufferers. So it was explicitly held in Rutter v. Esteban 8 where such enactment was
considered in 1953 "unreasonable and oppressive, and should not be prolonged a minute longer,
and, therefore, the same should be declared null and void and without effect." 9 At the time of
the issuance of the above Executive Order in 1945 and of the passage of such Act in 1948, there
was a factual justification for the moratorium. The Philippines was confronted with an emergency
of impressive magnitude at the time of her liberation from the Japanese military forces in 1945.
Business was at a standstill. Her economy lay prostrate. Measures, radical measures, were then
devised to tide her over until some semblance of normalcy could be restored and an
improvement in her economy noted. No wonder then that the suspension of enforcement of
payment of the obligations then existing was declared first by executive order and then by
legislation. The Supreme Court was right therefore in rejecting the contention that on its face, the
Moratorium Law was unconstitutional, amounting as it did to the impairment of the obligation of
contracts. Considering the circumstances confronting the legitimate government upon its return
to the Philippines, some such remedial device was needed and badly so. An unyielding
insistence then on the rights to property on the part of the creditors was not likely to meet with
judicial sympathy. Time passed however, and conditions did change.

Such a view has support in logic and possesses the merit of simplicity. It may not however be
sufficiently realistic. It does not admit of doubt that prior to the declaration of nullity such
challenged legislative or executive act must have been in force and had to be complied with.
This is so as until after the judiciary, in an appropriate case, declares its invalidity, it is entitled to
obedience and respect. Parties may have acted under it and may have changed their positions.
What could be more fitting than that in a subsequent litigation regard be had to what has been
done while such legislative or executive act was in operation and presumed to be valid in all
respects. It is now accepted as a doctrine that prior to its being nullified, its existence as a fact
must be reckoned with. This is merely to reflect awareness that precisely because the judiciary is
the governmental organ which has the final say on whether or not a legislative or executive
measure is valid, a period of time may have elapsed before it can exercise the power of judicial
review that may lead to a declaration of nullity. It would be to deprive the law of its quality of
fairness and justice then, if there be no recognition of what had transpired prior to such
adjudication.

When the legislation was before this Court in 1953, the question before it was its satisfying the
rational basis test, not as of the time of its enactment but as of such date. Clearly, if then it were
found unreasonable, the right to non-impairment of contractual obligations must prevail over the
assertion of community power to remedy an existing evil. The Supreme Court was convinced
that such indeed was the case. As stated in the opinion of Justice Bautista Angelo: "But we
should not lose sight of the fact that these obligations had been pending since 1945 as a result
of the issuance of Executive Orders Nos. 25 and 32 and at present their enforcement is still
inhibited because of the enactment of Republic Act No. 342 and would continue to be
unenforceable during the eight-year period granted to prewar debtors to afford them an
opportunity to rehabilitate themselves, which in plain language means that the creditors would
have to observe a vigil of at least twelve (12) years before they could affect a liquidation of their
investment dating as far back as 1941. This period seems to us unreasonable, if not oppressive.
While the purpose of Congress is plausible, and should be commended, the relief accorded
works injustice to creditors who are practically left at the mercy of the debtors. Their hope to
effect collection becomes extremely remote, more so if the credits are unsecured. And the
injustice is more patent when, under the law, the debtor is not even required to pay interest
during the operation of the relief, unlike similar statutes in the United States." 10 The conclusion
to which the foregoing considerations inevitably led was that as of the time of adjudication, it was
apparent that Republic Act No. 342 could not survive the test of validity. Executive Order No. 32
should likewise be nullified. That before the decision they were not constitutionally infirm was
admitted expressly. There is all the more reason then to yield assent to the now prevailing
principle that the existence of a statute or executive order prior to its being adjudged void is an
operative fact to which legal consequences are attached.

In the language of an American Supreme Court decision: "The actual existence of a statute, prior
to such a determination [of unconstitutionality], is an operative fact and may have consequences
which cannot justly be ignored. The past cannot always he erased by a new judicial declaration.
The effect of the subsequent ruling as to invalidity may have to be considered in various
aspects, - with respect to particular relations, individual and corporate, and particular conduct,
private and official." 4 This language has been quoted with approval in a resolution in Araneta v.
Hill 5 and the decision in Manila Motor Co., Inc. v. Flores. 6 An even more recent instance is the
opinion of Justice Zaldivar speaking for the Court in Fernandez v. Cuerva and Co. 7
2. Such an approach all the more commends itself whenever police power legislation intended to
promote public welfare but adversely affecting property rights is involved. While subject to be
assailed on due process, equal protection and non-impairment grounds, all that is required to
avoid the corrosion of invalidity is that the rational basis or reasonableness test is satisfied. The
legislature on the whole is not likely to allow an enactment suffering, to paraphrase Cardozo,
from the infirmity of outrunning the bounds of reason and resulting in sheer oppression. It may
be of course that if challenged, an adverse judgment could be the result, as its running counter
to the Constitution could still be shown. In the meanwhile though, in the normal course of things,
it has been acted upon by the public and accepted as valid. To ignore such a fact would indeed
be the fruitful parent of injustice. Moreover, as its constitutionality is conditioned on its being fair
or reasonable, which in turn is dependent on the actual situation, never static but subject to
change, a measure valid when enacted may subsequently, due to altered circumstances, be
stricken down.

176

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Castro, Teehankee, Barredo,
Villamor, and Makasiar, JJ., concur.

3. Precisely though because of the judicial recognition that moratorium was a valid governmental
response to the plight of the debtors who were war sufferers, this Court has made clear its view
in a series of cases impressive in their number and unanimity that during the eight-year period
that Executive Order No. 32 and Republic Act No. 342 were in force, prescription did not run. So
it has been held from Day v. Court of First Instance, 11decided in 1954, to Republic v.
Hernaez, 12 handed down only last year. What is deplorable is that as of the time of the lower
court decision on January 27, 1960, at least eight decisions had left no doubt as to the
prescriptive period being tolled in the meanwhile prior to such adjudication of
invalidity. 13 Speaking of the opposite view entertained by the lower court, the present Chief
Justice, in Liboro v. Finance and Mining Investments Corp. 14has categorized it as having been
"explicitly and consistently rejected by this Court." 15

||| (De Agbayani v. Philippine National Bank, G.R. No. L-23127, [April 29, 1971], 148 PHIL 443452)

The error of the lower court in sustaining plaintiff's suit is thus manifest. From July 19, 1944,
when her loan matured, to July 13, 1959, when extra-judicial foreclosure proceedings were
started by appellant Bank, the time consumed is six days short of fifteen years. The prescriptive
period was tolled, however, from March 10, 1945, the effectivity of Executive Order No. 32, to
May 18, 1953, when the decision of Rutter v. Esteban was promulgated, covering eight years,
two months and eight days. Obviously then, when resort was had extra-judicially to the
foreclosure of the mortgage obligation, there was time to spare before prescription could be
availed of as a defense.
WHEREFORE, the decision of January 27, 1960 is reversed and the suit of plaintiff filed August
10, 1959 dismissed. No costs.

177