a.
The Highest Bidder must negotiate and execute with the
MANILA PRINCE HOTEL, petitioner, vs. GOVERNMENT SERVICE
INSURANCE SYSTEM
The controversy arose when respondent Government Service
Insurance System (GSIS), pursuant to the privatization program of
the Philippine Government under Proclamation No. 50 dated 8
December 1986, decided to sell through public bidding 30% to 51%
of the issued and outstanding shares of respondent MHC. The
winning bidder, or the eventual strategic partner, is to provide
management expertise and/or an international
marketing/reservation system, and financial support to strengthen
the profitability and performance of the Manila Hotel.[2] In a close
bidding held on 18 September 1995 only two (2) bidders
participated: petitioner Manila Prince Hotel Corporation, a Filipino
corporation, which offered to buy 51% of the MHC or 15,300,000
shares at P41.58 per share, and Renong Berhad, a Malaysian firm,
with ITT-Sheraton as its hotel operator, which bid for the same
number of shares at P44.00 per share, or P2.42 more than the bid
of petitioner.
Pertinent provisions of the bidding rules prepared by
respondent GSIS state -
I. EXECUTION OF THE NECESSARY CONTRACTS WITH GSIS/MHC -
1. The Highest Bidder must comply with the conditions set forth
below by October 23, 1995 (reset to November 3, 1995) or the
Highest Bidder will lose the right to purchase the Block of Shares
and GSIS will instead offer the Block of Shares to the other Qualified
Bidders:
GSIS/MHC the Management Contract, International
Marketing/Reservation System Contract or other type of contract
specified by the Highest Bidder in its strategic plan for the Manila
Hotel x x x x
b. The Highest Bidder must execute the Stock Purchase and Sale
Agreement with GSIS x x x x
K. DECLARATION OF THE WINNING BIDDER/STRATEGIC PARTNER
-
The Highest Bidder will be declared the Winning Bidder/Strategic
Partner after the following conditions are met:
a. Execution of the necessary contracts with GSIS/MHC not later
than October 23, 1995 (reset to November 3, 1995); and
b. Requisite approvals from the GSIS/MHC and COP (Committee on
Privatization)/ OGCC (Office of the Government Corporate
Counsel) are obtained.[3]
Pending the declaration of Renong Berhard as the winning
bidder/strategic partner and the execution of the necessary
contracts, petitioner in a letter to respondent GSIS dated 28
September 1995 matched the bid price of P44.00 per share
tendered by Renong Berhad.[4] In a subsequent letter dated 10
October 1995 petitioner sent a managers check issued by Philtrust
Bank for Thirty-three Million Pesos (P33,000,000.00) as Bid Security
to match the bid of the Malaysian Group, Messrs. Renong Berhad x
x x x[5] which respondent GSIS refused to accept.
 On 17 October 1995, perhaps apprehensive that respondent
GSIS has disregarded the tender of the matching bid and that the
sale of 51% of the MHC may be hastened by respondent GSIS and
consummated with Renong Berhad, petitioner came to this Court
on prohibition and mandamus. On 18 October 1995 the Court
issued a temporary restraining order enjoining respondents from
perfecting and consummating the sale to the Malaysian firm.
On 10 September 1996 the instant case was accepted by the
Court En Banc after it was referred to it by the First Division. The
case was then set for oral arguments with former Chief Justice
Enrique M. Fernando and Fr. Joaquin G. Bernas, S.J., as amici
curiae.
In the main, petitioner invokes Sec. 10, second par., Art. XII, of
the 1987 Constitution and submits that the Manila Hotel has been
identified with the Filipino nation and has practically become a
historical monument which reflects the vibrancy of Philippine
heritage and culture. It is a proud legacy of an earlier generation of
Filipinos who believed in the nobility and sacredness of
independence and its power and capacity to release the full
potential of the Filipino people. To all intents and purposes, it has
become a part of the national patrimony.[6] Petitioner also argues
that since 51% of the shares of the MHC carries with it the
ownership of the business of the hotel which is owned by
respondent GSIS, a government-owned and controlled
corporation, the hotel business of respondent GSIS being a part of
the tourism industry is unquestionably a part of the national
economy. Thus, any transaction involving 51% of the shares of
stock of the MHC is clearly covered by the term national economy,
to which Sec. 10, second par., Art. XII, 1987 Constitution, applies.[7]
It is also the thesis of petitioner that since Manila Hotel is part
of the national patrimony and its business also unquestionably part
of the national economy petitioner should be preferred after it has
matched the bid offer of the Malaysian firm. For the bidding rules
mandate that if for any reason, the Highest Bidder cannot be
awarded the Block of Shares, GSIS may offer this to the other
Qualified Bidders that have validly submitted bids provided that
these Qualified Bidders are willing to match the highest bid in terms
of price per share.[8]
Respondents except. They maintain that: First, Sec. 10, second
par., Art. XII, of the 1987 Constitution is merely a statement of
principle and policy since it is not a self-executing provision and
requires implementing legislation(s) x x x x Thus, for the said
provision to operate, there must be existing laws to lay down
conditions under which business may be done.[9]
Second, granting that this provision is self-executing, Manila
Hotel does not fall under the term national patrimony which only
refers to lands of the public domain, waters, minerals, coal,
petroleum and other mineral oils, all forces of potential energy,
fisheries, forests or timber, wildlife, flora and fauna and all marine
wealth in its territorial sea, and exclusive marine zone as cited in
the first and second paragraphs of Sec. 2, Art. XII, 1987
Constitution. According to respondents, while petitioner speaks of
the guests who have slept in the hotel and the events that have
transpired therein which make the hotel historic, these alone do
not make the hotel fall under the patrimony of the nation. What is
more, the mandate of the Constitution is addressed to the State,
not to respondent GSIS which possesses a personality of its own
separate and distinct from the Philippines as a State.
 Third, granting that the Manila Hotel forms part of the national
patrimony, the constitutional provision invoked is still inapplicable
since what is being sold is only 51% of the outstanding shares of
the corporation, not the hotel building nor the land upon which the
building stands. Certainly, 51% of the equity of the MHC cannot be
considered part of the national patrimony. Moreover, if the
disposition of the shares of the MHC is really contrary to the
Constitution, petitioner should have questioned it right from the
beginning and not after it had lost in the bidding.
Fourth, the reliance by petitioner on par. V., subpar. J. 1., of
the bidding rules which provides that if for any reason, the Highest
Bidder cannot be awarded the Block of Shares, GSIS may offer this
to the other Qualified Bidders that have validly submitted bids
provided that these Qualified Bidders are willing to match the
highest bid in terms of price per share, is misplaced. Respondents
postulate that the privilege of submitting a matching bid has not
yet arisen since it only takes place if for any reason, the Highest
Bidder cannot be awarded the Block of Shares. Thus the submission
by petitioner of a matching bid is premature since Renong Berhad
could still very well be awarded the block of shares and the
condition giving rise to the exercise of the privilege to submit a
matching bid had not yet taken place.
Finally, the prayer for prohibition grounded on grave abuse of
discretion should fail since respondent GSIS did not exercise its
discretion in a capricious, whimsical manner, and if ever it did
abuse its discretion it was not so patent and gross as to amount to
an evasion of a positive duty or a virtual refusal to perform a duty
enjoined by law. Similarly, the petition for mandamus should fail as
petitioner has no clear legal right to what it demands and
respondents do not have an imperative duty to perform the act
required of them by petitioner.
We now resolve. A constitution is a system of fundamental
laws for the governance and administration of a nation. It is
supreme, imperious, absolute and unalterable except by the
authority from which it emanates. It has been defined as the
fundamental and paramount law of the nation.[10] It prescribes the
permanent framework of a system of government, assigns to the
different departments their respective powers and duties, and
establishes certain fixed principles on which government is
founded. The fundamental conception in other words is that it is a
supreme law to which all other laws must conform and in
accordance with which all private rights must be determined and
all public authority administered.[11] Under the doctrine of
constitutional supremacy, if a law or contract violates any norm of
the constitution that law or contract whether promulgated by the
legislative or by the executive branch or entered into by private
persons for private purposes is null and void and without any force
and effect. Thus, since the Constitution is the fundamental,
paramount and supreme law of the nation, it is deemed written in
every statute and contract.
Admittedly, some constitutions are merely declarations of
policies and principles. Their provisions command the legislature to
enact laws and carry out the purposes of the framers who merely
establish an outline of government providing for the different
departments of the governmental machinery and securing certain
fundamental and inalienable rights of citizens.[12] A provision which
lays down a general principle, such as those found in Art. II of the
1987 Constitution, is usually not self-executing. But a provision
which is complete in itself and becomes operative without the aid
of supplementary or enabling legislation, or that which supplies
sufficient rule by means of which the right it grants may be enjoyed
or protected, is self-executing. Thus a constitutional provision is
self-executing if the nature and extent of the right conferred and
the liability imposed are fixed by the constitution itself, so that they
can be determined by an examination and construction of its
terms, and there is no language indicating that the subject is
referred to the legislature for action.[13]
As against constitutions of the past, modern constitutions have
been generally drafted upon a different principle and have often
become in effect extensive codes of laws intended to operate
directly upon the people in a manner similar to that of statutory
enactments, and the function of constitutional conventions has
evolved into one more like that of a legislative body. Hence, unless
it is expressly provided that a legislative act is necessary to enforce
a constitutional mandate, the presumption now is that all
provisions of the constitution are self-executing. If the
constitutional provisions are treated as requiring legislation instead
of self-executing, the legislature would have the power to ignore
and practically nullify the mandate of the fundamental law.[14] This
can be cataclysmic. That is why the prevailing view is, as it has
always been, that -
x x x x in case of doubt, the Constitution should be considered self-
executing rather than non-self-executing x x x x Unless the contrary
is clearly intended, the provisions of the Constitution should be
considered self-executing, as a contrary rule would give the
legislature discretion to determine when, or whether, they shall be
effective. These provisions would be subordinated to the will of the
lawmaking body, which could make them entirely meaningless by
simply refusing to pass the needed implementing statute.[15]
Respondents argue that Sec. 10, second par., Art. XII, of the
1987 Constitution is clearly not self-executing, as they quote from
discussions on the floor of the 1986 Constitutional Commission -
MR. RODRIGO. Madam President, I am asking this
question as the Chairman of the Committee on
Style. If the wording of PREFERENCE is given to
QUALIFIED FILIPINOS, can it be understood as a
preference to qualified Filipinos vis-a-vis Filipinos
who are not qualified. So, why do we not make it
clear? To qualified Filipinos as against aliens?
THE PRESIDENT. What is the question of Commissioner
Rodrigo? Is it to remove the word QUALIFIED?
MR. RODRIGO. No, no, but say definitely TO QUALIFIED
FILIPINOS as against whom? As against aliens or over
aliens ?
MR. NOLLEDO. Madam President, I think that is
understood. We use the word QUALIFIED because
the existing laws or prospective laws will always lay
down conditions under which business may be
done. For example, qualifications on capital,
qualifications on the setting up of other financial
structures, et cetera (underscoring supplied by
respondents).
MR. RODRIGO. It is just a matter of style.
MR. NOLLEDO. Yes.[16]
Quite apparently, Sec. 10, second par., of Art XII is couched in
such a way as not to make it appear that it is non-self-executing but
simply for purposes of style. But, certainly, the legislature is not
precluded from enacting further laws to enforce the constitutional
provision so long as the contemplated statute squares with the
Constitution. Minor details may be left to the legislature without
impairing the self-executing nature of constitutional provisions.
In self-executing constitutional provisions, the legislature may
still enact legislation to facilitate the exercise of powers directly
granted by the constitution, further the operation of such a
provision, prescribe a practice to be used for its enforcement,
provide a convenient remedy for the protection of the rights
secured or the determination thereof, or place reasonable
safeguards around the exercise of the right. The mere fact that
legislation may supplement and add to or prescribe a penalty for
the violation of a self-executing constitutional provision does not
render such a provision ineffective in the absence of such
legislation. The omission from a constitution of any express
provision for a remedy for enforcing a right or liability is not
necessarily an indication that it was not intended to be self-
executing. The rule is that a self-executing provision of the
constitution does not necessarily exhaust legislative power on the
subject, but any legislation must be in harmony with the
constitution, further the exercise of constitutional right and make
it more available.[17] Subsequent legislation however does not
necessarily mean that the subject constitutional provision is not, by
itself, fully enforceable.
Respondents also argue that the non-self-executing nature of
Sec. 10, second par., of Art. XII is implied from the tenor of the first
and third paragraphs of the same section which undoubtedly are
not self-executing.[18] The argument is flawed. If the first and third
paragraphs are not self-executing because Congress is still to enact
measures to encourage the formation and operation of enterprises
fully owned by Filipinos, as in the first paragraph, and the State still
needs legislation to regulate and exercise authority over foreign
investments within its national jurisdiction, as in the third
paragraph, then a fortiori, by the same logic, the second paragraph
can only be self-executing as it does not by its language require any
legislation in order to give preference to qualified Filipinos in the
grant of rights, privileges and concessions covering the national
economy and patrimony. A constitutional provision may be self-
executing in one part and non-self-executing in another.[19]
Even the cases cited by respondents holding that certain
constitutional provisions are merely statements of principles and
policies, which are basically not self-executing and only placed in
the Constitution as moral incentives to legislation, not as judicially
enforceable rights - are simply not in point. Basco v. Philippine
Amusements and Gaming Corporation[20] speaks of constitutional
provisions on personal dignity,[21] the sanctity of family life,[22] the
vital role of the youth in nation-building,[23] the promotion of social
justice,[24] and the values of education.[25] Tolentino v. Secretary of
Finance[26] refers to constitutional provisions on social justice and
human rights[27] and on education.[28] Lastly, Kilosbayan, Inc. v.
Morato[29] cites provisions on the promotion of general
welfare,[30] the sanctity of family life,[31] the vital role of the youth
in nation-building[32] and the promotion of total human liberation
and development.[33] A reading of these provisions indeed clearly
shows that they are not judicially enforceable constitutional rights
but merely guidelines for legislation. The very terms of the
provisions manifest that they are only principles upon which
legislations must be based. Res ipsa loquitur.
On the other hand, Sec. 10, second par., Art. XII of the 1987
Constitution is a mandatory, positive command which is complete
in itself and which needs no further guidelines or implementing
laws or rules for its enforcement. From its very words the provision
does not require any legislation to put it in operation. It is per
se judicially enforceable. When our Constitution mandates that [i]n
the grant of rights, privileges, and concessions covering national
economy and patrimony, the State shall give preference to qualified
Filipinos, it means just that - qualified Filipinos shall be
preferred. And when our Constitution declares that a right exists in
certain specified circumstances an action may be maintained to
enforce such right notwithstanding the absence of any legislation
on the subject; consequently, if there is no statute especially
enacted to enforce such constitutional right, such right enforces
itself by its own inherent potency and puissance, and from which
all legislations must take their bearings. Where there is a right
there is a remedy. Ubi jus ibi remedium.
As regards our national patrimony, a member of the 1986
Constitutional Commission[34] explains -
The patrimony of the Nation that should be conserved
and developed refers not only to our rich natural resources
but also to the cultural heritage of our race. It also refers
to our intelligence in arts, sciences and letters. Therefore,
we should develop not only our lands, forests, mines and
other natural resources but also the mental ability or
faculty of our people.
We agree. In its plain and ordinary meaning, the
term patrimony pertains to heritage.[35] When the Constitution
speaks of national patrimony, it refers not only to the natural
resources of the Philippines, as the Constitution could have very
well used the term natural resources, but also to the cultural
heritage of the Filipinos.
Manila Hotel has become a landmark - a living testimonial of
Philippine heritage. While it was restrictively an American hotel
when it first opened in 1912, it immediately evolved to be truly
Filipino.Formerly a concourse for the elite, it has since then become
the venue of various significant events which have shaped
Philippine history. It was called the Cultural Center of the 1930s. It
was the site of the festivities during the inauguration of the
Philippine Commonwealth. Dubbed as the Official Guest House of
the Philippine Government it plays host to dignitaries and official
visitors who are accorded the traditional Philippine hospitality.[36]
The history of the hotel has been chronicled in the book The
Manila Hotel: The Heart and Memory of a City.[37] During World
War II the hotel was converted by the Japanese Military
Administration into a military headquarters. When the American
forces returned to recapture Manila the hotel was selected by the
Japanese together with Intramuros as the two (2) places for their
final stand.Thereafter, in the 1950s and 1960s, the hotel became
the center of political activities, playing host to almost every
political convention. In 1970 the hotel reopened after a renovation
and reaped numerous international recognitions, an
acknowledgment of the Filipino talent and ingenuity. In 1986 the
hotel was the site of a failed coup d etat where an aspirant for vice-
president was proclaimed President of the Philippine Republic.
For more than eight (8) decades Manila Hotel has bore mute
witness to the triumphs and failures, loves and frustrations of the
Filipinos; its existence is impressed with public interest; its own
historicity associated with our struggle for sovereignty,
independence and nationhood. Verily, Manila Hotel has become
part of our national economy and patrimony. For sure, 51% of the MR. DAVIDE. The Nolledo amendment would refer to an
equity of the MHC comes within the purview of the constitutional individual Filipino. What about a corporation wholly
shelter for it comprises the majority and controlling stock, so that owned by Filipino citizens?
anyone who acquires or owns the 51% will have actual control and
MR. MONSOD. At least 60 percent, Madam President.
management of the hotel. In this instance, 51% of the MHC cannot
be disassociated from the hotel and the land on which the hotel MR. DAVIDE. Is that the intention?
edifice stands. Consequently, we cannot sustain respondents claim
MR. MONSOD. Yes, because, in fact, we would be limiting
that the Filipino First Policy provision is not applicable since what is
it if we say that the preference should only be 100-
being sold is only 51% of the outstanding shares of the corporation,
percent Filipino.
not the Hotel building nor the land upon which the building
stands.[38] MR. DAVIDE. I want to get that meaning clear because
QUALIFIED FILIPINOS may refer only to individuals
The argument is pure sophistry. The term qualified Filipinos as
and not to juridical personalities or entities.
used in our Constitution also includes corporations at least 60% of
which is owned by Filipinos. This is very clear from the proceedings MR. MONSOD. We agree, Madam President.[39]
of the 1986 Constitutional Commission -
xxxx
THE PRESIDENT. Commissioner Davide is recognized.
MR. RODRIGO. Before we vote, may I request that the
MR. DAVIDE. I would like to introduce an amendment to amendment be read again.
the Nolledo amendment. And the amendment would
MR. NOLLEDO. The amendment will read: IN THE GRANT
consist in substituting the words QUALIFIED FILIPINOS
OF RIGHTS, PRIVILEGES AND CONCESSIONS
with the following: CITIZENS OF THE PHILIPPINES OR
COVERING THE NATIONAL ECONOMY AND
CORPORATIONS OR ASSOCIATIONS WHOSE CAPITAL
PATRIMONY, THE STATE SHALL GIVE PREFERENCE TO
OR CONTROLLING STOCK IS WHOLLY OWNED BY
QUALIFIED FILIPINOS. And the word Filipinos here, as
SUCH CITIZENS.
intended by the proponents, will include not only
xxxx individual Filipinos but also Filipino-controlled
entities or entities fully-controlled by Filipinos.[40]
MR. MONSOD. Madam President, apparently the
proponent is agreeable, but we have to raise a The phrase preference to qualified Filipinos was explained thus
question. Suppose it is a corporation that is 80- -
percent Filipino, do we not give it preference?
 MR. FOZ. Madam President, I would like to request
Commissioner Nolledo to please restate his
amendment so that I can ask a question.
MR. NOLLEDO. IN THE GRANT OF RIGHTS, PRIVILEGES
AND CONCESSIONS COVERING THE NATIONAL
ECONOMY AND PATRIMONY, THE STATE SHALL GIVE
PREFERENCE TO QUALIFIED FILIPINOS.
MR. FOZ. In connection with that amendment, if a foreign
enterprise is qualified and a Filipino enterprise is also
qualified, will the Filipino enterprise still be given a
preference?
MR. NOLLEDO. Obviously.
MR. FOZ. If the foreigner is more qualified in some aspects
than the Filipino enterprise, will the Filipino still be
preferred?
MR. NOLLEDO. The answer is yes.
MR. FOZ. Thank you.[41]
Expounding further on the Filipino First Policy provision
Commissioner Nolledo continues
MR. NOLLEDO. Yes, Madam President. Instead of MUST, it
will be SHALL - THE STATE SHALL GIVE PREFERENCE
TO QUALIFIED FILIPINOS. This embodies the so-called
Filipino First policy. That means that Filipinos should
be given preference in the grant of concessions,
privileges and rights covering the national
patrimony.[42]
The exchange of views in the sessions of the Constitutional
Commission regarding the subject provision was still further
clarified by Commissioner Nolledo[43] -
Paragraph 2 of Section 10 explicitly mandates the Pro-Filipino bias
in all economic concerns. It is better known as the FILIPINO FIRST
Policy x x x x This provision was never found in previous
Constitutions x x x x
The term qualified Filipinos simply means that preference shall be
given to those citizens who can make a viable contribution to the
common good, because of credible competence and efficiency. It
certainly does NOT mandate the pampering and preferential
treatment to Filipino citizens or organizations that are incompetent
or inefficient, since such an indiscriminate preference would be
counterproductive and inimical to the common good.
In the granting of economic rights, privileges, and concessions,
when a choice has to be made between a qualified foreigner and a
qualified Filipino, the latter shall be chosen over the former.
Lastly, the word qualified is also determinable. Petitioner was
so considered by respondent GSIS and selected as one of
the qualified bidders. It was pre-qualified by respondent GSIS in
accordance with its own guidelines so that the sole inference here
is that petitioner has been found to be possessed of proven
management expertise in the hotel industry, or it has significant
equity ownership in another hotel company, or it has an overall
management and marketing proficiency to successfully operate the
Manila Hotel.[44]
 The penchant to try to whittle away the mandate of the
Constitution by arguing that the subject provision is not self-
executory and requires implementing legislation is quite
disturbing. The attempt to violate a clear constitutional provision -
by the government itself - is only too distressing. To adopt such a
line of reasoning is to renounce the duty to ensure faithfulness to
the Constitution. For, even some of the provisions of the
Constitution which evidently need implementing legislation have
juridical life of their own and can be the source of a judicial
remedy. We cannot simply afford the government a defense that
arises out of the failure to enact further enabling, implementing or
guiding legislation. In fine, the discourse of Fr. Joaquin G. Bernas,
S.J., on constitutional government is apt -
The executive department has a constitutional duty to implement
laws, including the Constitution, even before Congress acts -
provided that there are discoverable legal standards for executive
action. When the executive acts, it must be guided by its own
understanding of the constitutional command and of applicable
laws. The responsibility for reading and understanding the
Constitution and the laws is not the sole prerogative of Congress. If
it were, the executive would have to ask Congress, or perhaps the
Court, for an interpretation every time the executive is confronted
by a constitutional command. That is not how constitutional
government operates.[45]
Respondents further argue that the constitutional provision is
addressed to the State, not to respondent GSIS which by itself
possesses a separate and distinct personality. This argument again
is at best specious. It is undisputed that the sale of 51% of the MHC
could only be carried out with the prior approval of the State acting
through respondent Committee on Privatization. As correctly
pointed out by Fr. Joaquin G. Bernas, S.J., this fact alone makes the
sale of the assets of respondents GSIS and MHC a state action. In
constitutional jurisprudence, the acts of persons distinct from the
government are considered state action covered by the
Constitution (1) when the activity it engages in is a public
function; (2) when the government is so significantly involved with
the private actor as to make the government responsible for his
action; and, (3) when the government has approved or authorized
the action. It is evident that the act of respondent GSIS in selling
51% of its share in respondent MHC comes under the second and
third categories of state action. Without doubt therefore the
transaction, although entered into by respondent GSIS, is in fact a
transaction of the State and therefore subject to the constitutional
command.[46]
When the Constitution addresses the State it refers not only to
the people but also to the government as elements of the
State. After all, government is composed of three (3) divisions of
power - legislative, executive and judicial. Accordingly, a
constitutional mandate directed to the State is correspondingly
directed to the three (3) branches of government. It is undeniable
that in this case the subject constitutional injunction is addressed
among others to the Executive Department and respondent GSIS,
a government instrumentality deriving its authority from the State.
It should be stressed that while the Malaysian firm offered the
higher bid it is not yet the winning bidder. The bidding rules
expressly provide that the highest bidder shall only be declared the
winning bidder after it has negotiated and executed the necessary
contracts, and secured the requisite approvals. Since the Filipino
First Policy provision of the Constitution bestows preference
on qualified Filipinos the mere tending of the highest bid is not an
assurance that the highest bidder will be declared the winning
bidder. Resultantly, respondents are not bound to make the award
yet, nor are they under obligation to enter into one with the highest
bidder. For in choosing the awardee respondents are mandated to
abide by the dictates of the 1987 Constitution the provisions of
which are presumed to be known to all the bidders and other
interested parties.
Adhering to the doctrine of constitutional supremacy, the
subject constitutional provision is, as it should be, impliedly written
in the bidding rules issued by respondent GSIS, lest the bidding
rules be nullified for being violative of the Constitution. It is a basic
principle in constitutional law that all laws and contracts must
conform with the fundamental law of the land. Those which violate
the Constitution lose their reason for being.
Paragraph V. J. 1 of the bidding rules provides that [i]f for any
reason the Highest Bidder cannot be awarded the Block of Shares,
GSIS may offer this to other Qualified Bidders that have validly
submitted bids provided that these Qualified Bidders are willing to
match the highest bid in terms of price per share.[47] Certainly, the
constitutional mandate itself is reason enough not to award the
block of shares immediately to the foreign bidder notwithstanding
its submission of a higher, or even the highest, bid. In fact, we
cannot conceive of a stronger reason than the constitutional
injunction itself.
In the instant case, where a foreign firm submits the highest
bid in a public bidding concerning the grant of rights, privileges and
concessions covering the national economy and patrimony,
thereby exceeding the bid of a Filipino, there is no question that
the Filipino will have to be allowed to match the bid of the foreign
entity. And if the Filipino matches the bid of a foreign firm the
award should go to the Filipino. It must be so if we are to give life
and meaning to the Filipino First Policy provision of the 1987
Constitution. For, while this may neither be expressly stated nor
contemplated in the bidding rules, the constitutional fiat is
omnipresent to be simply disregarded. To ignore it would be to
sanction a perilous skirting of the basic law.
This Court does not discount the apprehension that this policy
may discourage foreign investors. But the Constitution and laws of
the Philippines are understood to be always open to public
scrutiny. These are given factors which investors must consider
when venturing into business in a foreign jurisdiction. Any person
therefore desiring to do business in the Philippines or with any of
its agencies or instrumentalities is presumed to know his rights and
obligations under the Constitution and the laws of the forum.
The argument of respondents that petitioner is now estopped
from questioning the sale to Renong Berhad since petitioner was
well aware from the beginning that a foreigner could participate in
the bidding is meritless. Undoubtedly, Filipinos and foreigners alike
were invited to the bidding. But foreigners may be awarded the
sale only if no Filipino qualifies, or if the qualified Filipino fails to
match the highest bid tendered by the foreign entity. In the case
before us, while petitioner was already preferred at the inception
of the bidding because of the constitutional mandate, petitioner
had not yet matched the bid offered by Renong Berhad. Thus it did
not have the right or personality then to compel respondent GSIS
to accept its earlier bid. Rightly, only after it had matched the bid
of the foreign firm and the apparent disregard by respondent GSIS
of petitioners matching bid did the latter have a cause of action.
Besides, there is no time frame for invoking the constitutional
safeguard unless perhaps the award has been finally made. To
insist on selling the Manila Hotel to foreigners when there is a
Filipino group willing to match the bid of the foreign group is to
insist that government be treated as any other ordinary market
player, and bound by its mistakes or gross errors of judgment,
regardless of the consequences to the Filipino people. The
miscomprehension of the Constitution is regrettable. Thus we
would rather remedy the indiscretion while there is still an
opportunity to do so than let the government develop the habit of
forgetting that the Constitution lays down the basic conditions and
parameters for its actions.
Since petitioner has already matched the bid price tendered by
Renong Berhad pursuant to the bidding rules, respondent GSIS is
left with no alternative but to award to petitioner the block of
shares of MHC and to execute the necessary agreements and
documents to effect the sale in accordance not only with the
bidding guidelines and procedures but with the Constitution as
well. The refusal of respondent GSIS to execute the corresponding
documents with petitioner as provided in the bidding rules after
the latter has matched the bid of the Malaysian firm clearly
constitutes grave abuse of discretion.
The Filipino First Policy is a product of Philippine nationalism. It
is embodied in the 1987 Constitution not merely to be used as a
guideline for future legislation but primarily to be enforced; so
must it be enforced. This Court as the ultimate guardian of the
Constitution will never shun, under any reasonable circumstance,
the duty of upholding the majesty of the Constitution which it is
tasked to defend. It is worth emphasizing that it is not the intention
of this Court to impede and diminish, much less undermine, the
influx of foreign investments. Far from it, the Court encourages and
welcomes more business opportunities but avowedly sanctions the
preference for Filipinos whenever such preference is ordained by
the Constitution. The position of the Court on this matter could
have not been more appropriately articulated by Chief Justice
Narvasa -
As scrupulously as it has tried to observe that it is not its function
to substitute its judgment for that of the legislature or the
executive about the wisdom and feasibility of legislation economic
in nature, the Supreme Court has not been spared criticism for
decisions perceived as obstacles to economic progress and
development x x x x in connection with a temporary injunction
issued by the Courts First Division against the sale of the Manila
Hotel to a Malaysian Firm and its partner, certain statements were
published in a major daily to the effect that that injunction again
demonstrates that the Philippine legal system can be a major
obstacle to doing business here.
Let it be stated for the record once again that while it is no business
of the Court to intervene in contracts of the kind referred to or set
itself up as the judge of whether they are viable or attainable, it is
its bounden duty to make sure that they do not violate the
Constitution or the laws, or are not adopted or implemented with
grave abuse of discretion amounting to lack or excess of
jurisdiction. It will never shirk that duty, no matter how buffeted by
winds of unfair and ill-informed criticism.[48]
Privatization of a business asset for purposes of enhancing its
business viability and preventing further losses, regardless of the
character of the asset, should not take precedence over non-
material values. A commercial, nay even a budgetary, objective
should not be pursued at the expense of national pride and
dignity. For the Constitution enshrines higher and nobler non-
material values. Indeed, the Court will always defer to the indeed, the conveyance of this epic exponent of the Filipino psyche
Constitution in the proper governance of a free society; after all, to alien hands cannot be less than mephistophelian for it is, in
there is nothing so sacrosanct in any economic policy as to draw whatever manner viewed, a veritable alienation of a nations soul
itself beyond judicial review when the Constitution is involved.[49] for some pieces of foreign silver. And so we ask: What advantage,
which cannot be equally drawn from a qualified Filipino, can be
Nationalism is inherent in the very concept of the Philippines
gained by the Filipinos if Manila Hotel - and all that it stands for - is
being a democratic and republican state, with sovereignty residing
sold to a non-Filipino? How much of national pride will vanish if the
in the Filipino people and from whom all government authority
nations cultural heritage is entrusted to a foreign entity? On the
emanates. In nationalism, the happiness and welfare of the people
other hand, how much dignity will be preserved and realized if the
must be the goal. The nation-state can have no higher
national patrimony is safekept in the hands of a qualified, zealous
purpose. Any interpretation of any constitutional provision must
and well-meaning Filipino? This is the plain and simple meaning of
adhere to such basic concept. Protection of foreign investments,
the Filipino First Policy provision of the Philippine Constitution. And
while laudible, is merely a policy. It cannot override the demands
this Court, heeding the clarion call of the Constitution and
of nationalism.[50]
accepting the duty of being the elderly watchman of the nation, will
The Manila Hotel or, for that matter, 51% of the MHC, is not continue to respect and protect the sanctity of the Constitution.
just any commodity to be sold to the highest bidder solely for the
WHEREFORE, respondents GOVERNMENT SERVICE
sake of privatization. We are not talking about an ordinary piece of
INSURANCE SYSTEM, MANILA HOTEL CORPORATION, COMMITTEE
property in a commercial district. We are talking about a historic
ON PRIVATIZATION and OFFICE OF THE GOVERNMENT CORPORATE
relic that has hosted many of the most important events in the
COUNSEL are directed to CEASE and DESIST from selling 51% of the
short history of the Philippines as a nation. We are talking about a
shares of the Manila Hotel Corporation to RENONG BERHAD, and
hotel where heads of states would prefer to be housed as a strong
to ACCEPT the matching bid of petitioner MANILA PRINCE HOTEL
manifestation of their desire to cloak the dignity of the highest
CORPORATION to purchase the subject 51% of the shares of the
state function to their official visits to the Philippines. Thus the
Manila Hotel Corporation at P44.00 per share and thereafter to
Manila Hotel has played and continues to play a significant role as
execute the necessary agreements and documents to effect the
an authentic repository of twentieth century Philippine history and
sale, to issue the necessary clearances and to do such other acts
culture. In this sense, it has become truly a reflection of the Filipino
and deeds as may be necessary for the purpose.
soul - a place with a history of grandeur; a most historical setting
that has played a part in the shaping of a country.[51] SO ORDERED.
This Court cannot extract rhyme nor reason from the
determined efforts of respondents to sell the historical landmark -
this Grand Old Dame of hotels in Asia - to a total stranger. For,

WIGBERTO E. TANADA petitioners, vs. EDGARDO
ANGARA, respondents.
To hasten worldwide recovery from the devastation wrought by
the Second World War, plans for the establishment of three
multilateral institutions -- inspired by that grand political body, the
United Nations -- were discussed at Dumbarton Oaks and Bretton
Woods. The first was the World Bank (WB) which was to address
the rehabilitation and reconstruction of war-ravaged and later
developing countries; the second, the International Monetary Fund
(IMF) which was to deal with currency problems; and the third, the
International Trade Organization (ITO), which was to foster order
and predictability in world trade and to minimize unilateral
protectionist policies that invite challenge, even retaliation, from
other states. However, for a variety of reasons, including its non-
ratification by the United States, the ITO, unlike the IMF and WB,
never took off. What remained was only GATT -- the General
Agreement on Tariffs and Trade. GATT was a collection of treaties
governing access to the economies of treaty adherents with no
institutionalized body administering the agreements or
dependable system of dispute settlement.
After half a century and several dizzying rounds of negotiations,
principally the Kennedy Round, the Tokyo Round and the Uruguay
Round, the world finally gave birth to that administering body -- the
World Trade Organization -- with the signing of the Final Act in
Marrakesh, Morocco and the ratification of the WTO Agreement by
its members.[1]
Like many other developing countries, the Philippines joined WTO
as a founding member with the goal, as articulated by President
Fidel V. Ramos in two letters to the Senate (infra), of improving
Philippine access to foreign markets, especially its major trading
partners, through the reduction of tariffs on its exports, particularly
agricultural and industrial products. The President also saw in the
WTO the opening of new opportunities for the services sector x x
x, (the reduction of) costs and uncertainty associated with
exporting x x x, and (the attraction of) more investments into the
country.Although the Chief Executive did not expressly mention it
in his letter, the Philippines - - and this is of special interest to the
legal profession - - will benefit from the WTO system of dispute
settlement by judicial adjudication through the independent WTO
settlement bodies called (1) Dispute Settlement Panels and (2)
Appellate Tribunal. Heretofore, trade disputes were settled mainly
through negotiations where solutions were arrived at frequently
on the basis of relative bargaining strengths, and where naturally,
weak and underdeveloped countries were at a disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the Philippines to place
nationals and products of member-countries on the same footing
as Filipinos and local products and (2) that the WTO intrudes, limits
and/or impairs the constitutional powers of both Congress and the
Supreme Court, the instant petition before this Court assails the
WTO Agreement for violating the mandate of the 1987
Constitution to develop a self-reliant and independent national
economy effectively controlled by Filipinos x x x (to) give
preference to qualified Filipinos (and to) promote the preferential
use of Filipino labor, domestic materials and locally produced
goods.
Simply stated, does the Philippine Constitution prohibit Philippine
participation in worldwide trade liberalization and economic
globalization? Does it prescribe Philippine integration into a global
economy that is liberalized, deregulated and privatized? These are
the main questions raised in this petition for certiorari, prohibition
and mandamus under Rule 65 of the Rules of Court praying (1) for
the nullification, on constitutional grounds, of the concurrence of
the Philippine Senate in the ratification by the President of the
Philippines of the Agreement Establishing the World Trade
Organization (WTO Agreement, for brevity) and (2) for the
prohibition of its implementation and enforcement through the
release and utilization of public funds, the assignment of public
officials and employees, as well as the use of government
properties and resources by respondent-heads of various executive
offices concerned therewith. This concurrence is embodied in
Senate Resolution No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro, then Secretary of
the Department of Trade and Industry (Secretary Navarro, for
brevity), representing the Government of the Republic of the
Philippines, signed in Marrakesh, Morocco, the Final Act
Embodying the Results of the Uruguay Round of Multilateral
Negotiations (Final Act, for brevity).
By signing the Final Act,[2] Secretary Navarro on behalf of the
Republic of the Philippines, agreed:
(a) to submit, as appropriate, the WTO Agreement for the
consideration of their respective competent authorities, with a
view to seeking approval of the Agreement in accordance with their
procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On August 12, 1994, the members of the Philippine Senate received
a letter dated August 11, 1994 from the President of the
Philippines,[3] stating among others that the Uruguay Round Final
Act is hereby submitted to the Senate for its concurrence pursuant
to Section 21, Article VII of the Constitution.
On August 13, 1994, the members of the Philippine Senate received
another letter from the President of the Philippines[4] likewise
dated August 11, 1994, which stated among others that the
Uruguay Round Final Act, the Agreement Establishing the World
Trade Organization, the Ministerial Declarations and Decisions, and
the Understanding on Commitments in Financial Services are
hereby submitted to the Senate for its concurrence pursuant to
Section 21, Article VII of the Constitution.
On December 9, 1994, the President of the Philippines certified the
necessity of the immediate adoption of P.S. 1083, a resolution
entitled Concurring in the Ratification of the Agreement
Establishing the World Trade Organization.[5]
On December 14, 1994, the Philippine Senate adopted Resolution
No. 97 which Resolved, as it is hereby resolved, that the Senate
concur, as it hereby concurs, in the ratification by the President of
the Philippines of the Agreement Establishing the World Trade
Organization.[6] The text of the WTO Agreement is written on pages
137 et seq. of Volume I of the 36-volume Uruguay Round of
Multilateral Trade Negotiations and includes various agreements
and associated legal instruments (identified in the said Agreement
as Annexes 1, 2 and 3 thereto and collectively referred to as
Multilateral Trade Agreements, for brevity) as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in Goods
General Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of the General
Agreement on Tariffs and Trade 1994
Agreement on Implementation of Article VII of the General on
Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and
Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual
Property Rights
ANNEX 2
Understanding on Rules and Procedures Governing the
Settlement of Disputes
ANNEX 3
Trade Policy Review Mechanism
On December 16, 1994, the President of the Philippines
signed[7] the Instrument of Ratification, declaring:
NOW THEREFORE, be it known that I, FIDEL V. RAMOS,
President of the Republic of the Philippines, after having seen and
considered the aforementioned Agreement Establishing the World
Trade Organization and the agreements and associated legal
instruments included in Annexes one (1), two (2) and three (3) of
that Agreement which are integral parts thereof, signed at
Marrakesh, Morocco on 15 April 1994, do hereby ratify and confirm
the same and every Article and Clause thereof.
To emphasize, the WTO Agreement ratified by the President of the
Philippines is composed of the Agreement Proper and the
associated legal instruments included in Annexes one (1), two (2)
and three (3) of that Agreement which are integral parts thereof.
On the other hand, the Final Act signed by Secretary Navarro
embodies not only the WTO Agreement (and its integral annexes
aforementioned) but also (1) the Ministerial Declarations and
Decisions and (2) the Understanding on Commitments in Financial
Services. In his Memorandum dated May 13, 1996,[8] the Solicitor
General describes these two latter documents as follows:
The Ministerial Decisions and Declarations are twenty-five
declarations and decisions on a wide range of matters, such as
measures in favor of least developed countries, notification
procedures, relationship of WTO with the International Monetary
Fund (IMF), and agreements on technical barriers to trade and on
dispute settlement.
The Understanding on Commitments in Financial Services
dwell on, among other things, standstill or limitations and
qualifications of commitments to existing non-conforming
measures, market access, national treatment, and definitions of
non-resident supplier of financial services, commercial presence
and new financial service.
On December 29, 1994, the present petition was filed. After careful
deliberation on respondents comment and petitioners reply
thereto, the Court resolved on December 12, 1995, to give due
course to the petition, and the parties thereafter filed their
respective memoranda. The Court also requested the Honorable
Lilia R. Bautista, the Philippine Ambassador to the United Nations
stationed in Geneva, Switzerland, to submit a paper, hereafter
referred to as Bautista Paper,[9] for brevity, (1) providing a historical
background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court
directed:
(a) the petitioners to submit the (1) Senate Committee Report
on the matter in controversy and (2) the transcript of
proceedings/hearings in the Senate; and
(b) the Solicitor General, as counsel for respondents, to file (1)
a list of Philippine treaties signed prior to the Philippine adherence
to the WTO Agreement, which derogate from Philippine
sovereignty and (2) copies of the multi-volume WTO Agreement
and other documents mentioned in the Final Act, as soon as
possible.
After receipt of the foregoing documents, the Court said it would
consider the case submitted for resolution. In a Compliance dated
September 16, 1996, the Solicitor General submitted a printed copy
of the 36-volume Uruguay Round of Multilateral Trade
Negotiations, and in another Compliance dated October 24, 1996,
he listed the various bilateral or multilateral treaties or
international instruments involving derogation of Philippine
sovereignty. Petitioners, on the other hand, submitted their
Compliance dated January 28, 1997, on January 30, 1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners
summarized the issues as follows:
A. Whether the petition presents a political question or is
otherwise not justiciable.
B. Whether the petitioner members of the Senate who
participated in the deliberations and voting leading to the
concurrence are estopped from impugning the validity of the
Agreement Establishing the World Trade Organization or of the
validity of the concurrence.
C. Whether the provisions of the Agreement Establishing the
World Trade Organization contravene the provisions of Sec. 19,
Article II, and Secs. 10 and 12, Article XII, all of the 1987 Philippine
Constitution.
D. Whether provisions of the Agreement Establishing the
World Trade Organization unduly limit, restrict and impair
Philippine sovereignty specifically the legislative power which,
under Sec. 2, Article VI, 1987 Philippine Constitution is vested in the
Congress of the Philippines;
E. Whether provisions of the Agreement Establishing the
World Trade Organization interfere with the exercise of judicial
power.
F. Whether the respondent members of the Senate acted in
grave abuse of discretion amounting to lack or excess of jurisdiction
when they voted for concurrence in the ratification of the
constitutionally-infirm Agreement Establishing the World Trade
Organization.
G. Whether the respondent members of the Senate acted in
grave abuse of discretion amounting to lack or excess of jurisdiction
when they concurred only in the ratification of the Agreement
Establishing the World Trade Organization, and not with the
Presidential submission which included the Final Act, Ministerial
Declaration and Decisions, and the Understanding on
Commitments in Financial Services.
On the other hand, the Solicitor General as counsel for respondents
synthesized the several issues raised by petitioners into the
following:[10]
1. Whether or not the provisions of the Agreement
Establishing the World Trade Organization and the Agreements and
Associated Legal Instruments included in Annexes one (1), two (2)
and three (3) of that agreement cited by petitioners directly
contravene or undermine the letter, spirit and intent of Section 19,
Article II and Sections 10 and 12, Article XII of the 1987
Constitution.
2. Whether or not certain provisions of the Agreement unduly
limit, restrict or impair the exercise of legislative power by
Congress.
3. Whether or not certain provisions of the Agreement impair
the exercise of judicial power by this Honorable Court in
promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate in the
ratification by the President of the Philippines of the Agreement
establishing the World Trade Organization implied rejection of the
treaty embodied in the Final Act.
By raising and arguing only four issues against the seven presented
by petitioners, the Solicitor General has effectively ignored three,
namely: (1) whether the petition presents a political question or is
otherwise not justiciable; (2) whether petitioner-members of the
Senate (Wigberto E. Taada and Anna Dominique Coseteng) are
estopped from joining this suit; and (3) whether the respondent-
members of the Senate acted in grave abuse of discretion when
they voted for concurrence in the ratification of the WTO
Agreement. The foregoing notwithstanding, this Court resolved to
deal with these three issues thus:
(1) The political question issue -- being very fundamental and
vital, and being a matter that probes into the very jurisdiction of
this Court to hear and decide this case -- was deliberated upon by
the Court and will thus be ruled upon as the first issue;
(2) The matter of estoppel will not be taken up because this
defense is waivable and the respondents have effectively waived it
by not pursuing it in any of their pleadings; in any event, this issue,
even if ruled in respondents favor, will not cause the petitions
dismissal as there are petitioners other than the two senators, who
are not vulnerable to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on the part
of the respondent senators will be taken up as an integral part of
the disposition of the four issues raised by the Solicitor General.
During its deliberations on the case, the Court noted that the
respondents did not question the locus standi of
petitioners. Hence, they are also deemed to have waived the
benefit of such issue.They probably realized that grave
constitutional issues, expenditures of public funds and serious
international commitments of the nation are involved here, and
that transcendental public interest requires that the substantive
issues be met head on and decided on the merits, rather than
skirted or deflected by procedural matters.[11]
To recapitulate, the issues that will be ruled upon shortly are:
(1) DOES THE PETITION PRESENT A JUSTICIABLE
CONTROVERSY? OTHERWISE STATED, DOES THE PETITION
INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS NO
JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS
THREE ANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10
AND 12, ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS
ANNEXES LIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF
LEGISLATIVE POWER BY CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE WITH
THE EXERCISE OF JUDICIAL POWER BY THIS COURT IN
PROMULGATING RULES ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO
AGREEMENT AND ITS ANNEXES SUFFICIENT AND/OR VALID,
CONSIDERING THAT IT DID NOT INCLUDE THE FINAL ACT,
MINISTERIAL DECLARATIONS AND DECISIONS, AND THE
UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?
The First Issue: Does the Court Have Jurisdiction Over the
Controversy?
In seeking to nullify an act of the Philippine Senate on the ground
that it contravenes the Constitution, the petition no doubt raises a
justiciable controversy. Where an action of the legislative branch is
seriously alleged to have infringed the Constitution, it becomes not
only the right but in fact the duty of the judiciary to settle the
dispute. The question thus posed is judicial rather than
political. The duty (to adjudicate) remains to assure that the
supremacy of the Constitution is upheld.[12] Once a controversy as
to the application or interpretation of a constitutional provision is
raised before this Court (as in the instant case), it becomes a legal
issue which the Court is bound by constitutional mandate to
decide.[13]
The jurisdiction of this Court to adjudicate the matters[14] raised in
the petition is clearly set out in the 1987 Constitution,[15] as follows:
Judicial power includes the duty of the courts of justice to
settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of any branch or instrumentality
of the government.
The foregoing text emphasizes the judicial departments duty and
power to strike down grave abuse of discretion on the part of any
branch or instrumentality of government including Congress. It is
an innovation in our political law.[16] As explained by former Chief
Justice Roberto Concepcion,[17] the judiciary is the final arbiter on
the question of whether or not a branch of government or any of
its officials has acted without jurisdiction or in excess of jurisdiction
or so capriciously as to constitute an abuse of discretion amounting
to excess of jurisdiction. This is not only a judicial power but a duty
to pass judgment on matters of this nature.
As this Court has repeatedly and firmly emphasized in many
cases,[18] it will not shirk, digress from or abandon its sacred duty
and authority to uphold the Constitution in matters that involve
grave abuse of discretion brought before it in appropriate cases,
committed by any officer, agency, instrumentality or department
of the government.
As the petition alleges grave abuse of discretion and as there is no
other plain, speedy or adequate remedy in the ordinary course of
law, we have no hesitation at all in holding that this petition should
be given due course and the vital questions raised therein ruled
upon under Rule 65 of the Rules of Court. Indeed, certiorari,
prohibition and mandamus are appropriate remedies to raise
constitutional issues and to review and/or prohibit/nullify, when
proper, acts of legislative and executive officials. On this, we have
no equivocation.
We should stress that, in deciding to take jurisdiction over this
petition, this Court will not review the wisdom of the decision of
the President and the Senate in enlisting the country into the WTO,
or pass upon the merits of trade liberalization as a policy espoused
by said international body. Neither will it rule on the propriety of
the governments economic policy of reducing/removing tariffs,
taxes, subsidies, quantitative restrictions, and other import/trade
barriers. Rather, it will only exercise its constitutional duty to
determine whether or not there had been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of
the Senate in ratifying the WTO Agreement and its three annexes.
Second Issue: The WTO Agreement and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the letter, spirit and intent of the
Constitution mandating economic nationalism are violated by the
so-called parity provisions and national treatment clauses
scattered in various parts not only of the WTO Agreement and its
annexes but also in the Ministerial Decisions and Declarations and
in the Understanding on Commitments in Financial Services.
Specifically, the flagship constitutional provisions referred to are
Sec. 19, Article II, and Secs. 10 and 12, Article XII, of the
Constitution, which are worded as follows:
Article II
DECLARATION OF PRINCIPLES AND STATE POLICIES
xx xx xx xx
Sec. 19. The State shall develop a self-reliant and independent
national economy effectively controlled by Filipinos.
xx xx xx xx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xx xx xx xx
Sec. 10. x x x. The Congress shall enact measures that will
encourage the formation and operation of enterprises whose
capital is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions covering the
national economy and patrimony, the State shall give preference
to qualified Filipinos.
xx xx xx xx
Sec. 12. The State shall promote the preferential use of Filipino
labor, domestic materials and locally produced goods, and adopt
measures that help make them competitive.
Petitioners aver that these sacred constitutional principles are
desecrated by the following WTO provisions quoted in their
memorandum:[19]
a) In the area of investment measures related to trade in goods
(TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations under
GATT 1994. no Member shall apply any TRIM that is inconsistent
with the provisions of Article III or Article XI of GATT 1994.
2. An Illustrative list of TRIMS that are inconsistent with the
obligations of general elimination of quantitative restrictions
provided for in paragraph I of Article XI of GATT 1994 is contained
in the Annex to this Agreement. (Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round, Legal Instruments,
p.22121, emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of national
treatment provided for in paragraph 4 of Article III of GATT 1994
include those which are mandatory or enforceable under domestic
law or under administrative rulings, or compliance with which is
necessary to obtain an advantage, and which require:
(a) the purchase or use by an enterprise of products of
domestic origin or from any domestic source, whether specified in
terms of particular products, in terms of volume or value of
products, or in terms of proportion of volume or value of its local
production; or
(b) that an enterprises purchases or use of imported products
be limited to an amount related to the volume or value of local
products that it exports.
2. TRIMS that are inconsistent with the obligations of general
elimination of quantitative restrictions provided for in paragraph 1
of Article XI of GATT 1994 include those which are mandatory or
enforceable under domestic laws or under administrative rulings,
or compliance with which is necessary to obtain an advantage, and
which restrict:
(a) the importation by an enterprise of products used in or
related to the local production that it exports;
(b) the importation by an enterprise of products used in or
related to its local production by restricting its access to foreign
exchange inflows attributable to the enterprise; or
(c) the exportation or sale for export specified in terms of
particular products, in terms of volume or value of products, or in
terms of a preparation of volume or value of its local
production. (Annex to the Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round Legal Documents,
p.22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is
quoted as follows:
The products of the territory of any contracting party imported
into the territory of any other contracting party shall be accorded
treatment no less favorable than that accorded to like products of
national origin in respect of laws, regulations and requirements
affecting their internal sale, offering for sale, purchase,
transportation, distribution or use. the provisions of this paragraph
shall not prevent the application of differential internal
transportation charges which are based exclusively on the
economic operation of the means of transport and not on the
nationality of the product. (Article III, GATT 1947, as amended by
the Protocol Modifying Part II, and Article XXVI of GATT, 14
September 1948, 62 UMTS 82-84 in relation to paragraph 1(a) of
the General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay
Round, Legal Instruments p.177, emphasis supplied).
b) In the area of trade related aspects of intellectual property
rights (TRIPS, for brevity):
Each Member shall accord to the nationals of other Members
treatment no less favourable than that it accords to its own
nationals with regard to the protection of intellectual
property... (par. 1, Article 3, Agreement on Trade-Related Aspect of
Intellectual Property rights, Vol. 31, Uruguay Round, Legal
Instruments, p.25432 (emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and subject to any
conditions and qualifications set out therein, each Member shall
accord to services and service suppliers of any other Member, in
respect of all measures affecting the supply of services, treatment
no less favourable than it accords to its own like services and
service suppliers.
2. A Member may meet the requirement of paragraph I by
according to services and service suppliers of any other Member,
either formally identical treatment or formally different treatment
to that it accords to its own like services and service suppliers.
3. Formally identical or formally different treatment shall be
considered to be less favourable if it modifies the conditions of
completion in favour of services or service suppliers of the Member
compared to like services or service suppliers of any other
Member. (Article XVII, General Agreement on Trade in Services,
Vol. 28, Uruguay Round Legal Instruments, p.22610 emphasis
supplied).
It is petitioners position that the foregoing national treatment and
parity provisions of the WTO Agreement place nationals and
products of member countries on the same footing as Filipinos and
local products, in contravention of the Filipino First policy of the
Constitution. They allegedly render meaningless the phrase
effectively controlled by Filipinos. The constitutional conflict
becomes more manifest when viewed in the context of the clear
duty imposed on the Philippines as a WTO member to ensure the
conformity of its laws, regulations and administrative procedures
with its obligations as provided in the annexed
agreements.[20] Petitioners further argue that these provisions
contravene constitutional limitations on the role exports play in
national development and negate the preferential treatment
accorded to Filipino labor, domestic materials and locally produced
goods.
On the other hand, respondents through the Solicitor General
counter (1) that such Charter provisions are not self-executing and
merely set out general policies; (2) that these nationalistic portions
of the Constitution invoked by petitioners should not be read in
isolation but should be related to other relevant provisions of Art.
XII, particularly Secs. 1 and 13 thereof; (3) that read properly, the
cited WTO clauses do not conflict with the Constitution; and (4)
that the WTO Agreement contains sufficient provisions to protect
developing countries like the Philippines from the harshness of
sudden trade liberalization.
We shall now discuss and rule on these arguments.
Declaration of Principles Not Self-Executing
By its very title, Article II of the Constitution is a declaration of
principles and state policies. The counterpart of this article in the
1935 Constitution[21] is called the basic political creed of the
nationby Dean Vicente Sinco.[22] These principles in Article II are not
intended to be self-executing principles ready for enforcement
through the courts.[23] They are used by the judiciary as aids or as
guides in the exercise of its power of judicial review, and by the
legislature in its enactment of laws. As held in the leading case
of Kilosbayan, Incorporated vs. Morato,[24] the principles and state
policies enumerated in Article II and some sections of Article XII are
not self-executing provisions, the disregard of which can give rise
to a cause of action in the courts. They do not embody judicially
enforceable constitutional rights but guidelines for legislation.
In the same light, we held in Basco vs. Pagcor[25] that broad
constitutional principles need legislative enactments to implement
them, thus:
 On petitioners allegation that P.D. 1869 violates Sections 11
(Personal Dignity) 12 (Family) and 13 (Role of Youth) of Article II;
Section 13 (Social Justice) of Article XIII and Section 2 (Educational
Values) of Article XIV of the 1987 Constitution, suffice it to state
also that these are merely statements of principles and policies. As
such, they are basically not self-executing, meaning a law should be
passed by Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not intended
to be self-executing principles ready for enforcement through the
courts. They were rather directives addressed to the executive and
to the legislature. If the executive and the legislature failed to heed
the directives of the article, the available remedy was not judicial
but political. The electorate could express their displeasure with
the failure of the executive and the legislature through the
language of the ballot. (Bernas, Vol. II, p. 2).
The reasons for denying a cause of action to an alleged
infringement of broad constitutional principles are sourced from
basic considerations of due process and the lack of judicial
authority to wade into the uncharted ocean of social and economic
policy making. Mr. Justice Florentino P. Feliciano in his concurring
opinion in Oposa vs. Factoran, Jr.,[26] explained these reasons as
follows:
My suggestion is simply that petitioners must, before the trial
court, show a more specific legal right -- a right cast in language of
a significantly lower order of generality than Article II (15) of the
Constitution -- that is or may be violated by the actions, or failures
to act, imputed to the public respondent by petitioners so that the
trial court can validly render judgment granting all or part of the
relief prayed for. To my mind, the court should be understood as
simply saying that such a more specific legal right or rights may well
exist in our corpus of law, considering the general policy principles
found in the Constitution and the existence of the Philippine
Environment Code, and that the trial court should have given
petitioners an effective opportunity so to demonstrate, instead of
aborting the proceedings on a motion to dismiss.
It seems to me important that the legal right which is an
essential component of a cause of action be a specific, operable
legal right, rather than a constitutional or statutory policy, for at
least two (2) reasons. One is that unless the legal right claimed to
have been violated or disregarded is given specification in
operational terms, defendants may well be unable to defend
themselves intelligently and effectively; in other words, there are
due process dimensions to this matter.
The second is a broader-gauge consideration -- where a
specific violation of law or applicable regulation is not alleged or
proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1
of Article VIII of the Constitution which reads:
Section 1. x x x
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. (Emphases supplied)
When substantive standards as general as the right to a
balanced and healthy ecology and the right to health are combined
with remedial standards as broad ranging as a grave abuse of
discretion amounting to lack or excess of jurisdiction, the result will
be, it is respectfully submitted, to propel courts into the uncharted
ocean of social and economic policy making. At least in respect of
the vast area of environmental protection and management, our
courts have no claim to special technical competence and
experience and professional qualification. Where no specific,
operable norms and standards are shown to exist, then the policy
making departments -- the legislative and executive departments -
- must be given a real and effective opportunity to fashion and
promulgate those norms and standards, and to implement them
before the courts should intervene.
Economic Nationalism Should Be Read with Other
Constitutional Mandates to Attain Balanced Development of
Economy
On the other hand, Secs. 10 and 12 of Article XII, apart from merely
laying down general principles relating to the national economy
and patrimony, should be read and understood in relation to the
other sections in said article, especially Secs. 1 and 13 thereof
which read:
Section 1. The goals of the national economy are a more
equitable distribution of opportunities, income, and wealth; a
sustained increase in the amount of goods and services produced
by the nation for the benefit of the people; and an expanding
productivity as the key to raising the quality of life for all, especially
the underprivileged.
The State shall promote industrialization and full employment
based on sound agricultural development and agrarian reform,
through industries that make full and efficient use of human and
natural resources, and which are competitive in both domestic and
foreign markets. However, the State shall protect Filipino
enterprises against unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the economy and all
regions of the country shall be given optimum opportunity to
develop. x x x
xxxxxxxxx
Sec. 13. The State shall pursue a trade policy that serves the
general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic
goals of national economic development, as follows:
1. A more equitable distribution of opportunities, income and
wealth;
2. A sustained increase in the amount of goods and services
provided by the nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life
for all especially the underprivileged.
With these goals in context, the Constitution then ordains the
ideals of economic nationalism (1) by expressing preference in
favor of qualified Filipinos in the grant of rights, privileges and
concessions covering the national economy and patrimony[27] and
in the use of Filipino labor, domestic materials and locally-
produced goods; (2) by mandating the State to adopt measures
that help make them competitive;[28] and (3) by requiring the State
to develop a self-reliant and independent national economy
effectively controlled by Filipinos.[29] In similar language, the
Constitution takes into account the realities of the outside world as
it requires the pursuit of a trade policy that serves the general
welfare and utilizes all forms and arrangements of exchange on the
basis of equality and reciprocity;[30] and speaks of industries which
are competitive in both domestic and foreign markets as well as of
the protection of Filipino enterprises against unfair foreign
competition and trade practices.
It is true that in the recent case of Manila Prince Hotel vs.
Government Service Insurance System, et al.,[31] this Court held that
Sec. 10, second par., Art. XII of the 1987 Constitution is a
mandatory, positive command which is complete in itself and
which needs no further guidelines or implementing laws or rules
for its enforcement. From its very words the provision does not
require any legislation to put it in operation. It is per se judicially
enforceable. However, as the constitutional provision itself states,
it is enforceable only in regard to the grants of rights, privileges and
concessions covering national economy and patrimony and not to
every aspect of trade and commerce. It refers to exceptions rather
than the rule. The issue here is not whether this paragraph of Sec.
10 of Art. XII is self-executing or not. Rather, the issue is whether,
as a rule, there are enough balancing provisions in the Constitution
to allow the Senate to ratify the Philippine concurrence in the WTO
Agreement. And we hold that there are.
All told, while the Constitution indeed mandates a bias in favor of
Filipino goods, services, labor and enterprises, at the same time, it
recognizes the need for business exchange with the rest of the
world on the bases of equality and reciprocity and limits protection
of Filipino enterprises only against foreign competition and trade
practices that are unfair.[32] In other words, the Constitution did not
intend to pursue an isolationist policy. It did not shut out foreign
investments, goods and services in the development of the
Philippine economy. While the Constitution does not encourage
the unlimited entry of foreign goods, services and investments into
the country, it does not prohibit them either. In fact, it allows an
exchange on the basis of equality and reciprocity, frowning only on
foreign competition that is unfair.
WTO Recognizes Need to Protect Weak Economies
Upon the other hand, respondents maintain that the WTO itself has
some built-in advantages to protect weak and developing
economies, which comprise the vast majority of its
members. Unlike in the UN where major states have permanent
seats and veto powers in the Security Council, in the WTO,
decisions are made on the basis of sovereign equality, with each
members vote equal in weight to that of any other. There is no
WTO equivalent of the UN Security Council.
WTO decides by consensus whenever possible, otherwise,
decisions of the Ministerial Conference and the General Council
shall be taken by the majority of the votes cast, except in cases of
interpretation of the Agreement or waiver of the obligation of a
member which would require three fourths vote. Amendments
would require two thirds vote in general. Amendments to MFN
provisions and the Amendments provision will require assent of all
members. Any member may withdraw from the Agreement upon
the expiration of six months from the date of notice of
withdrawals.[33]
Hence, poor countries can protect their common interests more
effectively through the WTO than through one-on-one
negotiations with developed countries. Within the WTO,
developing countries can form powerful blocs to push their
economic agenda more decisively than outside the
Organization. This is not merely a matter of practical alliances but
a negotiating strategy rooted in law. Thus, the basic principles
underlying the WTO Agreement recognize the need of developing
countries like the Philippines to share in the growth in international
trade commensurate with the needs of their economic
development. These basic principles are found in the
preamble[34] of the WTO Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of trade and
economic endeavour should be conducted with a view to raising
standards of living, ensuring full employment and a large and
steadily growing volume of real income and effective demand, and
expanding the production of and trade in goods and services, while
allowing for the optimal use of the worlds resources in accordance
with the objective of sustainable development, seeking both to
protect and preserve the environment and to enhance the means
for doing so in a manner consistent with their respective needs and
concerns at different levels of economic development,
Recognizing further that there is need for positive efforts
designed to ensure that developing countries, and especially the
least developed among them, secure a share in the growth in
international trade commensurate with the needs of their
economic development,
Being desirous of contributing to these objectives by entering
into reciprocal and mutually advantageous arrangements directed
to the substantial reduction of tariffs and other barriers to trade
and to the elimination of discriminatory treatment in international
trade relations,
Resolved, therefore, to develop an integrated, more viable and
durable multilateral trading system encompassing the General
Agreement on Tariffs and Trade, the results of past trade
liberalization efforts, and all of the results of the Uruguay Round of
Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further the
objectives underlying this multilateral trading system, x x
x. (underscoring supplied.)
Specific WTO Provisos Protect Developing Countries
So too, the Solicitor General points out that pursuant to and
consistent with the foregoing basic principles, the WTO Agreement
grants developing countries a more lenient treatment, giving their
domestic industries some protection from the rush of foreign
competition. Thus, with respect to tariffs in general, preferential
treatment is given to developing countries in terms of the amount
of tariff reduction and the period within which the reduction is to
be spread out. Specifically, GATT requires an average tariff
reduction rate of 36% for developed countries to be effected within
a period of six (6) years while developing countries -- including the
Philippines -- are required to effect an average tariff reduction of
only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed
countries to reduce domestic support to agricultural products
by 20% over six (6) years, as compared to only 13% for developing
countries to be effected within ten (10) years.
In regard to export subsidy for agricultural products, GATT requires
developed countries to reduce their budgetary outlays for export
subsidy by 36% and export volumes receiving export subsidy
by 21% within a period of six (6) years. For developing countries,
however, the reduction rate is only two-thirds of that prescribed
for developed countries and a longer period of ten (10)
years within which to effect such reduction.
Moreover, GATT itself has provided built-in protection from unfair
foreign competition and trade practices including anti-dumping
measures, countervailing measures and safeguards against import
surges. Where local businesses are jeopardized by unfair foreign
competition, the Philippines can avail of these measures. There is
hardly therefore any basis for the statement that under the WTO,
local industries and enterprises will all be wiped out and that
Filipinos will be deprived of control of the economy. Quite the
contrary, the weaker situations of developing nations like the
Philippines have been taken into account; thus, there would be no
basis to say that in joining the WTO, the respondents have gravely
abused their discretion. True, they have made a bold decision to
steer the ship of state into the yet uncharted sea of economic
liberalization. But such decision cannot be set aside on the ground
of grave abuse of discretion, simply because we disagree with it or
simply because we believe only in other economic policies. As
earlier stated, the Court in taking jurisdiction of this case will not
pass upon the advantages and disadvantages of trade liberalization
as an economic policy. It will only perform its constitutional duty of
determining whether the Senate committed grave abuse of
discretion.
Constitution Does Not Rule Out Foreign Competition
Furthermore, the constitutional policy of a self-reliant and
independent national economy[35] does not necessarily rule out the
entry of foreign investments, goods and services. It contemplates
neither economic seclusion nor mendicancy in the international
community. As explained by Constitutional Commissioner
Bernardo Villegas, sponsor of this constitutional policy:
Economic self-reliance is a primary objective of a developing
country that is keenly aware of overdependence on external
assistance for even its most basic needs. It does not mean autarky
or economic seclusion; rather, it means avoiding mendicancy in the
international community. Independence refers to the freedom
from undue foreign control of the national economy, especially in
such strategic industries as in the development of natural resources
and public utilities.[36]
The WTO reliance on most favored nation, national treatment, and
trade without discrimination cannot be struck down as
unconstitutional as in fact they are rules of equality and reciprocity
that apply to all WTO members. Aside from envisioning a trade
policy based on equality and reciprocity,[37] the fundamental law
encourages industries that are competitive in both domestic and
foreign markets, thereby demonstrating a clear policy against a
sheltered domestic trade environment, but one in favor of the
gradual development of robust industries that can compete with
the best in the foreign markets. Indeed, Filipino managers and
Filipino enterprises have shown capability and tenacity to compete
internationally. And given a free trade environment, Filipino
entrepreneurs and managers in Hongkong have demonstrated the
Filipino capacity to grow and to prosper against the best offered
under a policy of laissez faire.
Constitution Favors Consumers, Not Industries or Enterprises
The Constitution has not really shown any unbalanced bias in favor
of any business or enterprise, nor does it contain any specific
pronouncement that Filipino companies should be pampered with
a total
proscription of foreign competition. On the other hand, responde
nts claim that WTO/GATT aims to make available to the Filipino
consumer the best goods and services obtainable anywhere in the
world at the most reasonable prices. Consequently, the question
boils down to whether WTO/GATT will favor the general welfare of
the public at large.
Will adherence to the WTO treaty bring this ideal (of favoring the
general welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos general welfare
because it will -- as promised by its promoters -- expand the
countrys exports and generate more employment?
Will it bring more prosperity, employment, purchasing power and
quality products at the most reasonable rates to the Filipino public?
The responses to these questions involve judgment calls by our
policy makers, for which they are answerable to our people during
appropriate electoral exercises. Such questions and the answers
thereto are not subject to judicial pronouncements based on grave
abuse of discretion.
Constitution Designed to Meet Future Events and
Contingencies
No doubt, the WTO Agreement was not yet in existence when the
Constitution was drafted and ratified in 1987. That does not mean
however that the Charter is necessarily flawed in the sense that its
framers might not have anticipated the advent of a borderless
world of business. By the same token, the United Nations was not
yet in existence when the 1935 Constitution became effective.Did
that necessarily mean that the then Constitution might not have
contemplated a diminution of the absoluteness of sovereignty
when the Philippines signed the UN Charter, thereby effectively
surrendering part of its control over its foreign relations to the
decisions of various UN organs like the Security Council?
It is not difficult to answer this question. Constitutions are designed
to meet not only the vagaries of contemporary events. They should
be interpreted to cover even future and unknown circumstances. It
is to the credit of its drafters that a Constitution can withstand the
assaults of bigots and infidels but at the same time bend with the
refreshing winds of change necessitated by unfolding events. As
one eminent political law writer and respected jurist[38] explains:
The Constitution must be quintessential rather than
superficial, the root and not the blossom, the base and framework
only of the edifice that is yet to rise. It is but the core of the dream
that must take shape, not in a twinkling by mandate of our
delegates, but slowly in the crucible of Filipino minds and hearts,
where it will in time develop its sinews and gradually gather its
strength and finally achieve its substance. In fine, the Constitution
cannot, like the goddess Athena, rise full-grown from the brow of
the Constitutional Convention, nor can it conjure by mere fiat an
instant Utopia. It must grow with the society it seeks to re-structure
and march apace with the progress of the race, drawing from the
vicissitudes of history the dynamism and vitality that will keep it,
far from becoming a petrified rule, a pulsing, living law attuned to
the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO Agreement provides that (e)ach Member shall ensure the
conformity of its laws, regulations and administrative procedures
with its obligations as provided in the annexed
Agreements.[39] Petitioners maintain that this undertaking unduly
limits, restricts and impairs Philippine sovereignty, specifically the
legislative power which under Sec. 2, Article VI of the 1987
Philippine Constitution is vested in the Congress of the
Philippines. It is an assault on the sovereign powers of the
Philippines because this means that Congress could not pass
legislation that will be good for our national interest and general
welfare if such legislation will not conform with the WTO
Agreement, which not only relates to the trade in goods x x x but
also to the flow of investments and money x x x as well as to a
whole slew of agreements on socio-cultural matters x x x.[40]
More specifically, petitioners claim that said
WTO proviso derogates from the power to tax, which is lodged in
the Congress.[41] And while the Constitution allows Congress to
authorize the President to fix tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts, such
authority is subject to specified limits and x x x such limitations and
restrictions as Congress may provide,[42] as in fact it did under Sec.
401 of the Tariff and Customs Code.
Sovereignty Limited by International Law and Treaties
This Court notes and appreciates the ferocity and passion by which
petitioners stressed their arguments on this issue. However, while
sovereignty has traditionally been deemed absolute and all-
encompassing on the domestic level, it is however subject to
restrictions and limitations voluntarily agreed to by the Philippines,
expressly or impliedly, as a member of the family of
nations.Unquestionably, the Constitution did not envision a
hermit-type isolation of the country from the rest of the world. In
its Declaration of Principles and State Policies, the Constitution
adopts the generally accepted principles of international law as
part of the law of the land, and adheres to the policy of peace,
equality, justice, freedom, cooperation and amity, with all
nations."[43] By the doctrine of incorporation, the country is bound
by generally accepted principles of international law, which are
considered to be automatically part of our own laws.[44] One of the
oldest and most fundamental rules in international law is pacta
sunt servanda -- international agreements must be performed in
good faith. A treaty engagement is not a mere moral obligation but
creates a legally binding obligation on the parties x x x. A state
which has contracted valid international obligations is bound to
make in its legislations such modifications as may be necessary to
ensure the fulfillment of the obligations undertaken.[45]
By their inherent nature, treaties really limit or restrict the
absoluteness of sovereignty. By their voluntary act, nations may
surrender some aspects of their state power in exchange for
greater benefits granted by or derived from a convention or
pact. After all, states, like individuals, live with coequals, and in
pursuit of mutually covenanted objectives and benefits, they also
commonly agree to limit the exercise of their otherwise absolute
rights. Thus, treaties have been used to record agreements
between States concerning such widely diverse matters as, for
example, the lease of naval bases, the sale or cession of territory,
the termination of war, the regulation of conduct of hostilities, the
formation of alliances, the regulation of commercial relations, the
settling of claims, the laying down of rules governing conduct in
peace and the establishment of international organizations.[46] The
sovereignty of a state therefore cannot in fact and in reality be
considered absolute. Certain restrictions enter into the picture: (1)
limitations imposed by the very nature of membership in the family
of nations and (2) limitations imposed by treaty stipulations. As
aptly put by John F. Kennedy, Today, no nation can build its destiny
alone. The age of self-sufficient nationalism is over. The age of
interdependence is here.[47]
UN Charter and Other Treaties Limit Sovereignty
Thus, when the Philippines joined the United Nations as one of its
51 charter members, it consented to restrict its sovereign rights
under the concept of sovereignty as auto-limitation.47-A Under
Article 2 of the UN Charter, (a)ll members shall give the United
Nations every assistance in any action it takes in accordance with
the present Charter, and shall refrain from giving assistance to any
state against which the United Nations is taking preventive or
enforcement action. Such assistance includes payment of its
corresponding share not merely in administrative expenses but
also in expenditures for the peace-keeping operations of the
organization. In its advisory opinion of July 20, 1961, the
International Court of Justice held that money used by the United
Nations Emergency Force in the Middle East and in the Congo were
expenses of the United Nations under Article 17, paragraph 2, of
the UN Charter. Hence, all its members must bear their
corresponding share in such expenses. In this sense, the Philippine
Congress is restricted in its power to appropriate. It is compelled to
appropriate funds whether it agrees with such peace-keeping
expenses or not. So too, under Article 105 of the said Charter, the
UN and its representatives enjoy diplomatic privileges and
immunities, thereby limiting again the exercise of sovereignty of
members within their own territory.Another example: although
sovereign equality and domestic jurisdiction of all members are set
forth as underlying principles in the UN Charter, such provisos are
however subject to enforcement measures decided by the Security
Council for the maintenance of international peace and security
under Chapter VII of the Charter. A final example: under Article
103, (i)n the event of a conflict between the obligations of the
Members of the United Nations under the present Charter and
their obligations under any other international agreement, their
obligation under the present charter shall prevail, thus
unquestionably denying the Philippines -- as a member -- the
sovereign power to make a choice as to which of conflicting
obligations, if any, to honor.
Apart from the UN Treaty, the Philippines has entered into many
other international pacts -- both bilateral and multilateral -- that
involve limitations on Philippine sovereignty. These are
enumerated by the Solicitor General in his Compliance dated
October 24, 1996, as follows:
(a) Bilateral convention with the United States regarding taxes
on income, where the Philippines agreed, among others, to exempt
from tax, income received in the Philippines by, among others, the
Federal Reserve Bank of the United States, the Export/Import Bank
of the United States, the Overseas Private Investment Corporation
of the United States. Likewise, in said convention, wages, salaries
and similar remunerations paid by the United States to its citizens
for labor and personal services performed by them as employees
or officials of the United States are exempt from income tax by the
Philippines.
(b) Bilateral agreement with Belgium, providing, among
others, for the avoidance of double taxation with respect to taxes
on income.
(c) Bilateral convention with the Kingdom of Sweden for the
avoidance of double taxation.
(d) Bilateral convention with the French Republic for the
avoidance of double taxation.
(e) Bilateral air transport agreement with Korea where the
Philippines agreed to exempt from all customs duties, inspection
fees and other duties or taxes aircrafts of South Korea and the
regular equipment, spare parts and supplies arriving with said
aircrafts.
(f) Bilateral air service agreement with Japan, where the
Philippines agreed to exempt from customs duties, excise taxes,
inspection fees and other similar duties, taxes or charges fuel,
lubricating oils, spare parts, regular equipment, stores on board
Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium where the
Philippines granted Belgian air carriers the same privileges as those
granted to Japanese and Korean air carriers under separate air
service agreements.
(h) Bilateral notes with Israel for the abolition of transit and
visitor visas where the Philippines exempted Israeli nationals from
the requirement of obtaining transit or visitor visas for a sojourn in
the Philippines not exceeding 59 days.
(I) Bilateral agreement with France exempting French
nationals from the requirement of obtaining transit and visitor visa
for a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions, where the
Philippines agreed that premises of Special Missions in the
Philippines are inviolable and its agents can not enter said premises
without consent of the Head of Mission concerned. Special
Missions are also exempted from customs duties, taxes and related
charges.
(k) Multilateral Convention on the Law of Treaties. In this
convention, the Philippines agreed to be governed by the Vienna
Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines accepting
compulsory jurisdiction of the International Court of Justice. The
International Court of Justice has jurisdiction in all legal disputes
concerning the interpretation of a treaty, any question of
international law, the existence of any fact which, if established,
would constitute a breach of international obligation.
In the foregoing treaties, the Philippines has effectively agreed to
limit the exercise of its sovereign powers of taxation, eminent
domain and police power. The underlying consideration in this
partial surrender of sovereignty is the reciprocal commitment of
the other contracting states in granting the same privilege and
immunities to the Philippines, its officials and its citizens. The same
reciprocity characterizes the Philippine commitments under WTO-
GATT.
 International treaties, whether relating to nuclear
disarmament, human rights, the environment, the law of the sea,
or trade, constrain domestic political sovereignty through the
assumption of external obligations. But unless anarchy in
international relations is preferred as an alternative, in most cases
we accept that the benefits of the reciprocal obligations involved
outweigh the costs associated with any loss of political
sovereignty.(T)rade treaties that structure relations by reference to
durable, well-defined substantive norms and objective dispute
resolution procedures reduce the risks of larger countries
exploiting raw economic power to bully smaller countries, by
subjecting power relations to some form of legal ordering. In
addition, smaller countries typically stand to gain
disproportionately from trade liberalization. This is due to the
simple fact that liberalization will provide access to a larger set of
potential new trading relationship than in case of the larger country
gaining enhanced success to the smaller countrys market.[48]
The point is that, as shown by the foregoing treaties, a portion of
sovereignty may be waived without violating the Constitution,
based on the rationale that the Philippines adopts the generally
accepted principles of international law as part of the law of the
land and adheres to the policy of x x x cooperation and amity with
all nations.
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners aver that paragraph 1, Article 34 of the General
Provisions and Basic Principles of the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS)[49] intrudes on the
power of the Supreme Court to promulgate rules concerning
pleading, practice and procedures.[50]
To understand the scope and meaning of Article 34, TRIPS,[51] it will
be fruitful to restate its full text as follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in respect of the
infringement of the rights of the owner referred to in paragraph
1(b) of Article 28, if the subject matter of a patent is a process for
obtaining a product, the judicial authorities shall have the authority
to order the defendant to prove that the process to obtain an
identical product is different from the patented process. Therefore,
Members shall provide, in at least one of the following
circumstances, that any identical product when produced without
the consent of the patent owner shall, in the absence of proof to
the contrary, be deemed to have been obtained by the patented
process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the identical product
was made by the process and the owner of the patent has been
unable through reasonable efforts to determine the process
actually used.
2. Any Member shall be free to provide that the burden of
proof indicated in paragraph 1 shall be on the alleged infringer only
if the condition referred to in subparagraph (a) is fulfilled or only if
the condition referred to in subparagraph (b) is fulfilled.
3. In the adduction of proof to the contrary, the legitimate
interests of defendants in protecting their manufacturing and
business secrets shall be taken into account.
From the above, a WTO Member is required to provide a rule of
disputable (note the words in the absence of proof to the contrary)
presumption that a product shown to be identical to one produced
with the use of a patented process shall be deemed to have been
obtained by the (illegal) use of the said patented process, (1) where
such product obtained by the patented product is new, or (2)
where there is substantial likelihood that the identical product was
made with the use of the said patented process but the owner of
the patent could not determine the exact process used in obtaining
such identical product. Hence, the burden of proof contemplated
by Article 34 should actually be understood as the duty of the
alleged patent infringer to overthrow such presumption. Such
burden, properly understood, actually refers to the burden of
evidence (burden of going forward) placed on the producer of the
identical (or fake) product to show that his product was produced
without the use of the patented process.
The foregoing notwithstanding, the patent owner still has the
burden of proof since, regardless of the presumption provided
under paragraph 1 of Article 34, such owner still has to introduce
evidence of the existence of the alleged identical product, the fact
that it is identical to the genuine one produced by the patented
process and the fact of newness of the genuine product or the fact
of substantial likelihood that the identical product was made by the
patented process.
The foregoing should really present no problem in changing the
rules of evidence as the present law on the subject, Republic Act
No. 165, as amended, otherwise known as the Patent Law, provides
a similar presumption in cases of infringement of patented design
or utility model, thus:
SEC. 60. Infringement. - Infringement of a design patent or of
a patent for utility model shall consist in unauthorized copying of
the patented design or utility model for the purpose of trade or
industry in the article or product and in the making, using or selling
of the article or product copying the patented design or utility
model. Identity or substantial identity with the patented design or
utility model shall constitute evidence of copying. (underscoring
supplied)
Moreover, it should be noted that the requirement of Article 34 to
provide a disputable presumption applies only if (1) the product
obtained by the patented process is NEW or (2) there is a
substantial likelihood that the identical product was made by the
process and the process owner has not been able through
reasonable effort to determine the process used. Where either of
these two provisos does not obtain, members shall be free to
determine the appropriate method of implementing the provisions
of TRIPS within their own internal systems and processes.
By and large, the arguments adduced in connection with our
disposition of the third issue -- derogation of legislative power - will
apply to this fourth issue also. Suffice it to say that the reciprocity
clause more than justifies such intrusion, if any actually
exists. Besides, Article 34 does not contain an unreasonable
burden, consistent as it is with due process and the concept of
adversarial dispute settlement inherent in our judicial system.
So too, since the Philippine is a signatory to most international
conventions on patents, trademarks and copyrights, the
adjustment in legislation and rules of procedure will not be
substantial.[52]
 Fifth Issue: Concurrence Only in the WTO Agreement and Not to seeking approval of the Agreement in accordance with their
in Other Documents Contained in the Final Act procedures; and
(b) to adopt the Ministerial Declarations and Decisions."
Petitioners allege that the Senate concurrence in the WTO
Agreement and its annexes -- but not in the other documents
The assailed Senate Resolution No. 97 expressed concurrence in
referred to in the Final Act, namely the Ministerial Declaration and
exactly what the Final Act required from its signatories, namely,
Decisions and the Understanding on Commitments in Financial
concurrence of the Senate in the WTO Agreement.
Services -- is defective and insufficient and thus constitutes abuse
of discretion. They submit that such concurrence in the WTO
The Ministerial Declarations and Decisions were deemed adopted
Agreement alone is flawed because it is in effect a rejection of the
without need for ratification. They were approved by the ministers
Final Act, which in turn was the document signed by Secretary
by virtue of Article XXV: 1 of GATT which provides that
Navarro, in representation of the Republic upon authority of the
representatives of the members can meet to give effect to those
President. They contend that the second letter of the President to
provisions of this Agreement which invoke joint action, and
the Senate[53] which enumerated what constitutes the Final Act
generally with a view to facilitating the operation and furthering
should have been the subject of concurrence of the Senate.
the objectives of this Agreement.[56]
A final act, sometimes called protocol de clture, is an instrument
The Understanding on Commitments in Financial Services also
which records the winding up of the proceedings of a diplomatic
approved in Marrakesh does not apply to the Philippines. It applies
conference and usually includes a reproduction of the texts of
only to those 27 Members which have indicated in their respective
treaties, conventions, recommendations and other acts agreed
schedules of commitments on standstill, elimination of monopoly,
upon and signed by the plenipotentiaries attending the
expansion of operation of existing financial service suppliers,
conference.[54] It is not the treaty itself. It is rather a summary of
temporary entry of personnel, free transfer and processing of
the proceedings of a protracted conference which may have taken
information, and national treatment with respect to access to
place over several years. The text of the Final Act Embodying the
payment, clearing systems and refinancing available in the normal
Results of the Uruguay Round of Multilateral Trade Negotiations is
course of business.[57]
contained in just one page[55] in Vol. I of the 36-
volume Uruguay Round of Multilateral Trade Negotiations. By On the other hand, the WTO Agreement itself expresses what
signing said Final Act, Secretary Navarro as representative of the multilateral agreements are deemed included as its integral
Republic of the Philippines undertook: parts,[58] as follows:
"(a) to submit, as appropriate, the WTO Agreement for the Article II
consideration of their respective competent authorities with a view
 Scope of the WTO
1. The WTO shall provide the common institutional framework
for the conduct of trade relations among its Members in matters to
the agreements and associated legal instruments included in the
Annexes to this Agreement.
2. The Agreements and associated legal instruments included
in Annexes 1, 2, and 3 (hereinafter referred to as Multilateral
Agreements) are integral parts of this Agreement, binding on all
Members.
3. The Agreements and associated legal instruments included
in Annex 4 (hereinafter referred to as Plurilateral Trade
Agreements) are also part of this Agreement for those Members
that have accepted them, and are binding on those Members. The
Plurilateral Trade Agreements do not create either obligation or
rights for Members that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as
specified in annex 1A (hereinafter referred to as GATT 1994) is
legally distinct from the General Agreement on Tariffs and Trade,
dated 30 October 1947, annexed to the Final Act adopted at the
conclusion of the Second Session of the Preparatory Committee of
the United Nations Conference on Trade and Employment, as
subsequently rectified, amended or modified (hereinafter referred
to as GATT 1947).
It should be added that the Senate was well-aware of what it was
concurring in as shown by the members deliberation on August 25,
1994. After reading the letter of President Ramos dated August 11,
1994,[59] the senators of the Republic minutely dissected what the
Senate was concurring in, as follows: [60]
THE CHAIRMAN: Yes. Now, the question of the validity of the
submission came up in the first day hearing of this Committee
yesterday. Was the observation made by Senator Taada that what
was submitted to the Senate was not the agreement on
establishing the World Trade Organization by the final act of the
Uruguay Round which is not the same as the agreement
establishing the World Trade Organization? And on that basis,
Senator Tolentino raised a point of order which, however, he
agreed to withdraw upon understanding that his suggestion for an
alternative solution at that time was acceptable. That suggestion
was to treat the proceedings of the Committee as being in the
nature of briefings for Senators until the question of the submission
could be clarified.
And so, Secretary Romulo, in effect, is the President submitting
a new... is he making a new submission which improves on the
clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is clear cut
and there should be no misunderstanding, it was his intention to
clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Taada and later on
Senator Tolentino since they were the ones that raised this
question yesterday?
Senator Taada, please.
SEN. TAADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it would now
clearly appear that what is being submitted to the Senate for
ratification is not the Final Act of the Uruguay Round, but rather
the Agreement on the World Trade Organization as well as the
Ministerial Declarations and Decisions, and the Understanding and
Commitments in Financial Services.
I am now satisfied with the wording of the new submission of
President Ramos.
SEN. TAADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Taada. Can we hear from
Senator Tolentino? And after him Senator Neptali Gonzales and
Senator Lina.
SEN TOLENTINO, Mr. Chairman, I have not seen the new
submission actually transmitted to us but I saw the draft of his
earlier, and I think it now complies with the provisions of the
Constitution, and with the Final Act itself. The Constitution does
not require us to ratify the Final Act. It requires us to ratify the
Agreement which is now being submitted. The Final Act itself
specifies what is going to be submitted to with the governments of
the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives
agree: (a) to submit as appropriate the WTO Agreement for the
consideration of the respective competent authorities with a view
to seeking approval of the Agreement in accordance with their
procedures.
In other words, it is not the Final Act that was agreed to be
submitted to the governments for ratification or acceptance as
whatever their constitutional procedures may provide but it is the
World Trade Organization Agreement. And if that is the one that is
being submitted now, I think it satisfies both the Constitution and
the Final Act itself.
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on
Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are
already a matter of record. And they had been adequately
reflected in the journal of yesterdays session and I dont see any
need for repeating the same.
Now, I would consider the new submission as an act ex
abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina,
do you want to make any comment on this?
SEN. LINA. Mr. President, I agree with the observation just
made by Senator Gonzales out of the abundance of question. Then
the new submission is, I believe, stating the obvious and therefore
I have no further comment to make.
Epilogue
In praying for the nullification of the Philippine ratification of the
WTO Agreement, petitioners are invoking this Courts
constitutionally imposed duty to determine whether or not there
has been grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of the Senate in giving its concurrence
therein via Senate Resolution No. 97. Procedurally, a writ
of certiorari grounded on grave abuse of discretion may be issued
by the Court under Rule 65 of the Rules of Court when it is amply
shown that petitioners have no other plain, speedy and adequate
remedy in the ordinary course of law.
By grave abuse of discretion is meant such capricious and whimsical
exercise of judgment as is equivalent to lack of jurisdiction.[61] Mere
abuse of discretion is not enough. It must be grave abuse of
discretion as when the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, and
must be so patent and so gross as to amount to an evasion of a
positive duty or to a virtual refusal to perform the duty enjoined or
to act at all in contemplation of law.[62] Failure on the part of the
petitioner to show grave abuse of discretion will result in the
dismissal of the petition.[63]
In rendering this Decision, this Court never forgets that the Senate,
whose act is under review, is one of two sovereign houses of
Congress and is thus entitled to great respect in its actions. It is
itself a constitutional body independent and coordinate, and thus
its actions are presumed regular and done in good faith. Unless
convincing proof and persuasive arguments are presented to
overthrow such presumptions, this Court will resolve every doubt
in its favor. Using the foregoing well-accepted definition of grave
abuse of discretion and the presumption of regularity in the
Senates processes, this Court cannot find any cogent reason to
impute grave abuse of discretion to the Senates exercise of its
power of concurrence in the WTO Agreement granted it by Sec. 21
of Article VII of the Constitution.[64]
It is true, as alleged by petitioners, that broad constitutional
principles require the State to develop an independent national
economy effectively controlled by Filipinos; and to protect and/or
prefer Filipino labor, products, domestic materials and locally
produced goods. But it is equally true that such principles -- while
serving as judicial and legislative guides -- are not in themselves
sources of causes of action. Moreover, there are other equally
fundamental constitutional principles relied upon by the Senate
which mandate the pursuit of a trade policy that serves the general
welfare and utilizes all forms and arrangements of exchange on the
basis of equality and reciprocity and the promotion of industries
which are competitive in both domestic and foreign markets,
thereby justifying its acceptance of said treaty. So too, the alleged
impairment of sovereignty in the exercise of legislative and judicial
powers is balanced by the adoption of the generally accepted
principles of international law as part of the law of the land and the
adherence of the Constitution to the policy of cooperation and
amity with all nations.
That the Senate, after deliberation and voting, voluntarily and
overwhelmingly gave its consent to the WTO Agreement thereby
making it a part of the law of the land is a legitimate exercise of its
sovereign duty and power. We find no patent and gross
arbitrariness or despotism by reason of passion or personal
hostility in such exercise. It is not impossible to surmise that this
Court, or at least some of its members, may even agree with
petitioners that it is more advantageous to the national interest to
strike down Senate Resolution No. 97. But that is not a legal
reason to attribute grave abuse of discretion to the Senate and to
nullify its decision. To do so would constitute grave abuse in the
exercise of our own judicial power and duty. Ineludably, what the
Senate did was a valid exercise of its authority. As to whether such
exercise was wise, beneficial or viable is outside the realm of
judicial inquiry and review. That is a matter between the elected
policy makers and the people. As to whether the nation should join
the worldwide march toward trade liberalization and economic
globalization is a matter that our people should determine in
electing their policy makers.After all, the WTO Agreement allows
withdrawal of membership, should this be the political desire of a
member.

The eminent futurist John Naisbitt, author of the best

seller Megatrends, predicts an Asian Renaissance[65] where the East
will become the dominant region of the world economically,
politically and culturally in the next century. He refers to the free
market espoused by WTO as the catalyst in this coming Asian
ascendancy. There are at present about 31 countries including
China, Russia and Saudi Arabia negotiating for membership in the
WTO. Notwithstanding objections against possible limitations on
national sovereignty, the WTO remains as the only viable structure
for multilateral trading and the veritable forum for the
development of international trade law. The alternative to WTO is
isolation, stagnation, if not economic self-destruction. Duly
enriched with original membership, keenly aware of the
advantages and disadvantages of globalization with its on-line
experience, and endowed with a vision of the future, the
Philippines now straddles the crossroads of an international
strategy for economic prosperity and stability in the new
millennium. Let the people, through their duly authorized elected
officers, make their free choice.

WHEREFORE, the petition is DISMISSED for lack of merit.

SO ORDERED.
[G.R. No. 134015. July 19, 1999]
JUAN DOMINO, petitioner, vs. COMMISSION ON ELECTIONS,
On 25 March 1998, DOMINO filed his certificate of candidacy for
the position of Representative of the Lone Legislative District of the
Province of Sarangani indicating in item nine (9) of his certificate
that he had resided in the constituency where he seeks to be
elected for one (1) year and two (2) months immediately preceding
the election.[3]
On 30 March 1998, private respondents Narciso Ra. Grafilo, Jr.,
Eddy B. Java, Juan P. Bayonito, Jr., Rosario Samson and Dionisio P.
Lim, Sr., filed with the COMELEC a Petition to Deny Due Course to
or Cancel Certificate of Candidacy, which was docketed as SPA No.
98-022 and assigned to the Second Division of the
COMELEC. Private respondents alleged that DOMINO, contrary to
his declaration in the certificate of candidacy, is not a resident,
much less a registered voter, of the province of Sarangani where
he seeks election. To substantiate their allegations, private
respondents presented the following evidence:
1. Annex A the Certificate of Candidacy of respondent for the
position of Congressman of the Lone District of the Province of
Sarangani filed with the Office of the Provincial Election Supervisor
of Sarangani on March 25, 1998, where in item 4 thereof he wrote
his date of birth as December 5, 1953; in item 9, he claims he have
resided in the constituency where he seeks election for one (1) year
and two (2) months; and, in item 10, that he is registered voter of
Precinct No. 14A-1, Barangay Poblacion, Alabel, Sarangani;
2. Annex B Voters Registration Record with SN 31326504 dated
June 22, 1997 indicating respondents registration at Precinct No.
4400-A, Old Balara, Quezon City;
3. Annex C Respondents Community Tax Certificate No. 11132214C
dated January 15, 1997;
4. Annex D Certified true copy of the letter of Herson D. Dema-ala,
Deputy Provincial & Municipal Treasurer of Alabel, Sarangani,
dated February 26, 1998, addressed to Mr. Conrado G. Butil, which
reads:
In connection with your letter of even date, we are furnishing you
herewith certified xerox copy of the triplicate copy of COMMUNITY
TAX CERTIFICATE NO. 11132214C in the name of Juan Domino.
Furthermore, Community Tax Certificate No. 11132212C of the
same stub was issued to Carlito Engcong on September 5, 1997,
while Certificate No. 11132213C was also issued to Mr. Juan
Domino but was cancelled and serial no. 11132215C was issued in
the name of Marianita Letigio on September 8, 1997.
5. Annex E The triplicate copy of the Community Tax Certificate No.
11132214C in the name of Juan Domino dated September 5, 1997;
6. Annex F Copy of the letter of Provincial Treasurer Lourdes P.
Riego dated March 2, 1998 addressed to Mr. Herson D. Dema-ala,
Deputy Provincial Treasurer and Municipal Treasurer of Alabel,
Sarangani, which states:
For easy reference, kindly turn-over to the undersigned for
safekeeping, the stub of Community Tax Certificate containing Nos.
11132201C-11132250C issued to you on June 13, 1997 and paid
under Official Receipt No. 7854744.
Upon request of Congressman James L. Chiongbian.
7. Annex G Certificate of Candidacy of respondent for the position
of Congressman in the 3rd District of Quezon City for the 1995
elections filed with the Office of the Regional Election Director,
National Capital Region, on March 17, 1995, where, in item 4
thereof, he wrote his birth date as December 22, 1953; in item 8
thereof his residence in the constituency where I seek to be elected
immediately preceding the election as 3 years and 5 months; and,
in item 9, that he is a registered voter of Precinct No. 182, Barangay
Balara, Quezon City;
8. Annex H a copy of the APPLICATION FOR TRANSFER OF
REGISTRATION RECORDS DUE TO CHANGE OF RESIDENCE of
respondent dated August 30, 1997 addressed to and received by
Election Officer Mantil Alim, Alabel, Sarangani, on September 22,
1997, stating among others, that [T]he undersigneds previous
residence is at 24 Bonifacio Street, Ayala Heights, Quezon City, III
District, Quezon City; wherein he is a registered voter and that for
business and residence purposes, the undersigned has transferred
and conducts his business and reside at Barangay Poblacion, Alabel,
Province of Sarangani prior to this application;
9. Annex I Copy of the SWORN APPLICATION FOR CANCELLATION
OF VOTERS [TRANSFER OF] PREVIOUS REGISTRATION of
respondent subscribed and sworn to on 22 October 1997 before
Election Officer Mantil Allim at Alabel, Sarangani.[4]
For his defense, DOMINO maintains that he had complied with the
one-year residence requirement and that he has been residing in
Sarangani since January 1997. In support of the said contention,
DOMINO presented before the COMELEC the following exhibits, to
wit:
1. Annex 1 - Copy of the Contract of Lease between Nora
Dacaldacal as Lessor and Administrator of the properties of
deceased spouses Maximo and Remedios Dacaldacal and
respondent as Lessee executed on January 15, 1997, subscribed
and sworn to before Notary Public Johnny P. Landero;
2. Annex 2 - Copy of the Extra-Judicial Settlement of Estate with
Absolute Deed of sale executed by and between the heirs of
deceased spouses Maximo and Remedios Dacaldacal, namely:
Maria Lourdes, Jupiter and Beberlie and the respondent on
November 4, 1997, subscribed and sworn to before Notary Public
Jose A. Alegario;
3. Annex 3 - True Carbon Xerox copy of the Decision dated January
19, 1998, of the Metropolitan Trial Court of Metro Manila, Branch
35, Quezon City, in Election Case NO. 725 captioned as In the
Matter of the Petition for the Exclusion from the List of voters of
Precinct No. 4400-A Brgy. Old Balara, Quezon City, Spouses Juan
and Zorayda Domino, Petitioners, -versus- Elmer M. Kayanan,
Election Officer, Quezon City, District III, and the Board of Election
Inspectors of Precinct No. 4400-A, Old Balara, Quezon City,
Respondents. The dispositive portion of which reads:
1. Declaring the registration of petitioners as voters of Precinct No.
4400-A, Barangay Old Balara, in District III Quezon City as
completely erroneous as petitioners were no longer residents of
Quezon City but of Alabel, Sarangani where they have been
residing since December 1996;
2. Declaring this erroneous registration of petitioners in Quezon
City as done in good faith due to an honest mistake caused by
circumstances beyond their control and without any fault of
petitioners;
3. Approving the transfer of registration of voters of petitioners
from Precinct No. 4400-A of Barangay Old Balara, Quezon City to
Precinct No. 14A1 of Barangay Poblacion of Alabel, Sarangani; and
4. Ordering the respondents to immediately transfer and forward
all the election/voters registration records of the petitioners in
Quezon City to the Election Officer, the Election Registration Board
and other Comelec Offices of Alabel, Sarangani where the
petitioners are obviously qualified to exercise their respective
rights of suffrage.
4. Annex 4 - Copy of the Application for Transfer of Registration
Records due to Change of Residence addressed to Mantil Alim,
COMELEC Registrar, Alabel, Sarangani, dated August 30, 1997.
5. Annex 5 - Certified True Copy of the Notice of Approval of
Application, the roster of applications for registration approved by
the Election Registration Board on October 20, 1997, showing the
spouses Juan and Zorayda Bailon Domino listed as numbers 111
and 112 both under Precinct No. 14A1, the last two names in the
slate indicated as transferees without VRR numbers and their
application dated August 30, 1997 and September 30, 1997,
respectively.
6. Annex 6 - same as Annex 5
7. Annex 6-a - Copy of the Sworn Application for Cancellation of
Voters Previous Registration (Annex I, Petition);
8. Annex 7 - Copy of claim card in the name of respondent showing
his VRR No. 31326504 dated October 20, 1997 as a registered voter
of Precinct No. 14A1, Barangay Poblacion, Alabel, Sarangani;
9. Annex 7-a - Certification dated April 16, 1998, issued by Atty.
Elmer M. Kayanan, Election Officer IV, District III, Quezon City,
which reads:
This is to certify that the spouses JUAN and ZORAYDA DOMINO are
no longer registered voters of District III, Quezon City. Their
registration records (VRR) were transferred and are now in the
possession of the Election Officer of Alabel, Sarangani.
This certification is being issued upon the request of Mr. JUAN
DOMINO.
10. Annex 8 - Affidavit of Nora Dacaldacal and Maria Lourdes
Dacaldacal stating the circumstances and incidents detailing their
alleged acquaintance with respondent.
11. Annexes 8-a, 8-b, 8-c and 8-d - Copies of the uniform affidavits
of witness Myrna Dalaguit, Hilario Fuentes, Coraminda Lomibao
and Elena V. Piodos subscribed and sworn to before Notary Public
Bonifacio F. Doria, Jr., on April 18, 1998, embodying their alleged
personal knowledge of respondents residency in Alabel, Sarangani;
12. Annex 8-e - A certification dated April 20, 1998, subscribed and
sworn to before Notary Public Bonifacio, containing a listing of the
names of fifty-five(55) residents of Alabel, Sarangani, declaring and
certifying under oath that they personally know the respondent as
a permanent resident of Alabel, Sarangani since January 1997 up to
present;
13. Annexes 9, 9-a and 9-b- Copies of Individual Income Tax Return
for the year 1997, BIR form 2316 and W-2, respectively, of
respondent; and,
14. Annex 10 - The affidavit of respondent reciting the chronology
of events and circumstances leading to his relocation to the
Municipality of Alabel, Sarangani, appending Annexes A, B, C, D, D-
1, E, F, G with sub-markings G-1 and G-2 and H his CTC No.
111`32214C dated September 5, 1997, which are the same as
Annexes 1, 2, 4, 5, 6-a, 3, 7, 9 with sub-markings 9-a and 9-b except
Annex H.[5]
On 6 May 1998, the COMELEC 2nd Division promulgated a
resolution declaring DOMINO disqualified as candidate for the
position of representative of the lone district of Sarangani for lack
of the one-year residence requirement and likewise ordered the
cancellation of his certificate of candidacy, on the basis of the
following findings:
What militates against respondents claim that he has met the
residency requirement for the position sought is his own Voters
Registration Record No. 31326504 dated June 22, 1997 [Annex B,
Petition] and his address indicated as 24 Bonifacio St., Ayala
Heights, Old Balara, Quezon City. This evidence, standing alone,
negates all his protestations that he established residence at
Barangay Poblacion, Alabel, Sarangani, as early as January 1997. It
is highly improbable, nay incredible, for respondent who previously
ran for the same position in the 3rd Legislative District of Quezon
City during the elections of 1995 to unwittingly forget the residency
requirement for the office sought.
Counting, therefore, from the day after June 22, 1997 when
respondent registered at Precinct No. 4400-A, up to and until the
day of the elections on May 11, 1998, respondent clearly lacks the
one (1) year residency requirement provided for candidates for
Member of the House of Representatives under Section 6, Article
VI of the Constitution.
All told, petitioners evidence conspire to attest to respondents lack
of residence in the constituency where he seeks election and while
it may be conceded that he is a registered voter as contemplated
under Section 12 of R.A. 8189, he lacks the qualification to run for
the position of Congressman for the Lone District of the Province
of Sarangani.[6]
On 11 May 1998, the day of the election, the COMELEC issued
Supplemental Omnibus Resolution No. 3046, ordering that the
votes cast for DOMINO be counted but to suspend the
proclamation if winning, considering that the Resolution
disqualifying him as candidate had not yet become final and
executory.[7]
The result of the election, per Statement of Votes certified by the
Chairman of the Provincial Board of Canvassers,[8] shows that
DOMINO garnered the highest number of votes over his opponents
for the position of Congressman of the Province of Sarangani.
On 15 May 1998, DOMINO filed a motion for reconsideration of the
Resolution dated 6 May 1998, which was denied by the
COMELEC en banc in its decision dated 29 May 1998. Hence, the
present Petition for Certiorari with prayer for Preliminary
Mandatory Injunction alleging, in the main, that the COMELEC
committed grave abuse of discretion amounting to excess or lack
of jurisdiction when it ruled that he did not meet the one-year
residence requirement.
On 14 July 1998, acting on DOMINOs Motion for Issuance of
Temporary Restraining Order, the Court directed the parties to
maintain the status quo prevailing at the time of the filing of the
instant petition.[9]
On 15 September 1998, Lucille L. Chiongbian-Solon, (hereafter
INTERVENOR), the candidate receiving the second highest number
of votes, was allowed by the Court to Intervene.[10]
INTERVENOR in her Motion for Leave to Intervene and in
her Comment in Intervention[11] is asking the Court to uphold the
disqualification of petitioner Juan Domino and to proclaim her as
the duly elected representative of Sarangani in the 11 May 1998
elections.
Before us DOMINO raised the following issues for resolution, to
wit:
a. Whether or not the judgment of the Metropolitan Trial Court of
Quezon City declaring petitioner as resident of Sarangani and not
of Quezon City is final, conclusive and binding upon the whole
world, including the Commission on Elections.
b. Whether or not petitioner herein has resided in the subject
congressional district for at least one (1) year immediately
preceding the May 11, 1998 elections; and
c. Whether or not respondent COMELEC has jurisdiction over the
petition a quo for the disqualification of petitioner.[12]
The first issue.
The contention of DOMINO that the decision of the Metropolitan
Trial Court of Quezon City in the exclusion proceedings declaring
him a resident of the Province of Sarangani and not of Quezon City
is final and conclusive upon the COMELEC cannot be sustained.
The COMELEC has jurisdiction as provided in Sec. 78, Art. IX of the
Omnibus Election Code, over a petition to deny due course to or
cancel certificate of candidacy. In the exercise of the said
jurisdiction, it is within the competence of the COMELEC to
determine whether false representation as to material facts was
made in the certificate of candidacy, that will include, among
others, the residence of the candidate.
The determination of the Metropolitan Trial Court of Quezon City
in the exclusion proceedings as to the right of DOMINO to be
included or excluded from the list of voters in the precinct within
its territorial jurisdiction, does not preclude the COMELEC, in the
determination of DOMINOs qualification as a candidate, to pass
upon the issue of compliance with the residency requirement.
The proceedings for the exclusion or inclusion of voters in the list
of voters are summary in character. Thus, the factual findings of the
trial court and its resultant conclusions in the exclusion
proceedings on matters other than the right to vote in the precinct
within its territorial jurisdiction are not conclusive upon the
COMELEC. Although the court in inclusion or exclusion proceedings
may pass upon any question necessary to decide the issue raised
including the questions of citizenship and residence of the
challenged voter, the authority to order the inclusion in or
exclusion from the list of voters necessarily caries with it the power
to inquire into and settle all matters essential to the exercise of said
authority. However, except for the right to remain in the list of
voters or for being excluded therefrom for the particular election
in relation to which the proceedings had been held, a decision in an
exclusion or inclusion proceeding, even if final and unappealable,
does not acquire the nature of res judicata.[13] In this sense, it does
not operate as a bar to any future action that a party may take
concerning the subject passed upon in the proceeding.[14] Thus, a
decision in an exclusion proceeding would neither be conclusive on
the voters political status, nor bar subsequent proceedings on his
right to be registered as a voter in any other election.[15]
Thus, in Tan Cohon v. Election Registrar[16] we ruled that:
xxx It is made clear that even as it is here held that the order of the
City Court in question has become final, the same does not
constitute res adjudicata as to any of the matters therein
contained. It is ridiculous to suppose that such an important and
intricate matter of citizenship may be passed upon and determined
with finality in such a summary and peremptory proceeding as that
of inclusion and exclusion of persons in the registry list of
voters. Even if the City Court had granted appellants petition for
inclusion in the permanent list of voters on the allegation that she
is a Filipino citizen qualified to vote, her alleged Filipino citizenship
would still have been left open to question.
Moreover, the Metropolitan Trial Court of Quezon City in its 18
January decision exceeded its jurisdiction when it declared
DOMINO a resident of the Province of Sarangani, approved and
ordered the transfer of his voters registration from Precinct No.
4400-A of Barangay Old Balara, Quezon City to precinct 14A1 of
Barangay Poblacion, Alabel, Sarangani. It is not within the
competence of the trial court, in an exclusion proceedings, to
declare the challenged voter a resident of another
municipality. The jurisdiction of the lower court over exclusion
cases is limited only to determining the right of voter to remain in
the list of voters or to declare that the challenged voter is not
qualified to vote in the precinct in which he is registered, specifying
the ground of the voters disqualification. The trial court has no
power to order the change or transfer of registration from one
place of residence to another for it is the function of the election
Registration Board as provided under Section 12 of R.A. No.
8189.[17] The only effect of the decision of the lower court excluding
the challenged voter from the list of voters, is for the Election
Registration Board, upon receipt of the final decision, to remove
the voters registration record from the corresponding book of
voters, enter the order of exclusion therein, and thereafter place
the record in the inactive file.[18]
Finally, the application of the rule on res judicata is
unavailing. Identity of parties, subject matter and cause of action
are indispensable requirements for the application of said
doctrine. Neither herein Private Respondents nor INTERVENOR, is
a party in the exclusion proceedings. The Petition for Exclusion was
filed by DOMINO himself and his wife, praying that he and his wife
be excluded from the Voters List on the ground of erroneous
registration while the Petition to Deny Due Course to or Cancel
Certificate of Candidacy was filed by private respondents against
DOMINO for alleged false representation in his certificate of
candidacy. For the decision to be a basis for the dismissal by reason
of res judicata, it is essential that there must be between the first
and the second action identity of parties, identity of subject matter
and identity of causes of action.[19] In the present case, the
aforesaid essential requisites are not present. In the case of Nuval
v. Guray, et al.,[20] the Supreme Court in resolving a similar issue
ruled that:
The question to be solved under the first assignment of error is
whether or not the judgment rendered in the case of the petition
for the exclusion of Norberto Gurays name from the election list of
Luna, is res judicata, so as to prevent the institution and
prosecution of an action in quo warranto, which is now before us.
The procedure prescribed by section 437 of the Administrative
Code, as amended by Act No. 3387, is of a summary character and
the judgment rendered therein is not appealable except when the
petition is tried before the justice of the peace of the capital or the
circuit judge, in which case it may be appealed to the judge of first
instance, with whom said two lower judges have concurrent
jurisdiction.
The petition for exclusion was presented by Gregorio Nuval in his
dual capacity as qualified voter of the municipality of Luna, and as
a duly registered candidate for the office of president of said
municipality, against Norberto Guray as a registered voter in the
election list of said municipality. The present proceeding of quo
warranto was interposed by Gregorio Nuval in his capacity as a
registered candidate voted for the office of municipal president of
Luna, against Norberto Guray, as an elected candidate for the same
office. Therefore, there is no identity of parties in the two cases,
since it is not enough that there be an identity of persons, but there
must be an identity of capacities in which said persons litigate. (
Art. 1259 of the Civil Code; Bowler vs. Estate of Alvarez, 23 Phil.,
561; 34 Corpus Juris, p. 756, par. 1165)
In said case of the petition for the exclusion, the object of the
litigation, or the litigious matter was the exclusion of Norberto
Guray as a voter from the election list of the municipality of Luna,
while in the present quo warranto proceeding, the object of the
litigation, or the litigious matter is his exclusion or expulsion from
the office to which he has been elected. Neither does there exist,
then, any identity in the object of the litigation, or the litigious
matter.
In said case of the petition for exclusion, the cause of action was
that Norberto Guray had not the six months legal residence in the
municipality of Luna to be a qualified voter thereof, while in the
present proceeding of quo warranto, the cause of action is that
Norberto Guray has not the one years legal residence required for
eligibility to the office of municipal president of Luna. Neither does
there exist therefore, identity of causes of action.
In order that res judicata may exist the following are necessary: (a)
identity of parties; (b) identity of things; and (c) identity of issues
(Aquino vs. Director of Lands, 39 Phil. 850). And as in the case of
the petition for exclusion and in the present quo
warranto proceeding, as there is no identity of parties, or of things
or litigious matter, or of issues or causes of action, there is no res
judicata.
The Second Issue.
Was DOMINO a resident of the Province of Sarangani for at least
one year immediately preceding the 11 May 1998 election as
stated in his certificate of candidacy?
We hold in the negative.
It is doctrinally settled that the term residence, as used in the law
prescribing the qualifications for suffrage and for elective office,
means the same thing as domicile, which imports not only an
intention to reside in a fixed place but also personal presence in
that place, coupled with conduct indicative of such
intention.[21] Domicile denotes a fixed permanent residence to
which, whenever absent for business, pleasure, or some other
reasons, one intends to return.[22] Domicile is a question of
intention and circumstances. In the consideration of
circumstances, three rules must be borne in mind, namely: (1) that
a man must have a residence or domicile somewhere; (2) when
once established it remains until a new one is acquired; and (3) a
man can have but one residence or domicile at a time.[23]
Records show that petitioners domicile of origin was Candon, Ilocos
Sur[24] and that sometime in 1991, he acquired a new domicile of
choice at 24 Bonifacio St. Ayala Heights, Old Balara, Quezon City, as
shown by his certificate of candidacy for the position of
representative of the 3rd District of Quezon City in the May 1995
election. Petitioner is now claiming that he had effectively
abandoned his residence in Quezon City and has established a new
domicile of choice at the Province of Sarangani.
A persons domicile once established is considered to continue and
will not be deemed lost until a new one is established.[25] To
successfully effect a change of domicile one must demonstrate an
actual removal or an actual change of domicile; a bona
fide intention of abandoning the former place of residence and
establishing a new one and definite acts which correspond with the
purpose.[26] In other words, there must basically be animus
manendi coupled with animus non revertendi. The purpose to
remain in or at the domicile of choice must be for an indefinite
period of time; the change of residence must be voluntary; and the
residence at the place chosen for the new domicile must be
actual.[27]
It is the contention of petitioner that his actual physical presence
in Alabel, Sarangani since December 1996 was sufficiently
established by the lease of a house and lot located therein in
January 1997 and by the affidavits and certifications under oath of
the residents of that place that they have seen petitioner and his
family residing in their locality.
While this may be so, actual and physical is not in itself sufficient to
show that from said date he had transferred his residence in that
place. To establish a new domicile of choice, personal presence in
the place must be coupled with conduct indicative of that
intention. While residence simply requires bodily presence in a
given place, domicile requires not only such bodily presence in that
place but also a declared and probable intent to make it ones fixed
and permanent place of abode, ones home.[28]
As a general rule, the principal elements of domicile, physical
presence in the locality involved and intention to adopt it as a
domicile, must concur in order to establish a new domicile. No
change of domicile will result if either of these elements is
absent. Intention to acquire a domicile without actual residence in
the locality does not result in acquisition of domicile, nor does the
fact of physical presence without intention.[29]
The lease contract entered into sometime in January 1997, does
not adequately support a change of domicile. The lease contract
may be indicative of DOMINOs intention to reside in Sarangani but
it does not engender the kind of permanency required to prove
abandonment of ones original domicile. The mere absence of
individual from his permanent residence, no matter how long,
without the intention to abandon it does not result in loss or
change of domicile.[30] Thus the date of the contract of lease of a
house and lot located in the province of Sarangani, i.e., 15 January
1997, cannot be used, in the absence of other circumstances, as
the reckoning period of the one-year residence requirement.
Further, Dominos lack of intention to abandon his residence in
Quezon City is further strengthened by his act of registering as
voter in one of the precincts in Quezon City. While voting is not
conclusive of residence, it does give rise to a strong presumption of
residence especially in this case where DOMINO registered in his
former barangay. Exercising the right of election franchise is a
deliberate public assertion of the fact of residence, and is said to
have decided preponderance is a doubtful case upon the place the
elector claims as, or believes to be, his residence.[31] The fact that a
party continuously voted in a particular locality is a strong factor in
assisting to determine the status of his domicile.[32]
His claim that his registration in Quezon City was erroneous and
was caused by events over which he had no control cannot be
sustained. The general registration of voters for purposes of the
May 1998 elections was scheduled for two (2) consecutive
weekends, viz.: June 14, 15, 21, and 22.[33]
While, Dominos intention to establish residence in Sarangani can
be gleaned from the fact that be bought the house he was renting
on November 4, 1997, that he sought cancellation of his previous
registration in Quezon City on 22 October 1997,[34] and that he
applied for transfer of registration from Quezon City to Sarangani
by reason of change of residence on 30 August 1997,[35] DOMINO
still falls short of the one year residency requirement under the
Constitution.
In showing compliance with the residency requirement, both intent
and actual presence in the district one intends to represent must
satisfy the length of time prescribed by the fundamental
law.[36] Dominos failure to do so rendered him ineligible and his
election to office null and void.[37]
The Third Issue.
DOMINOs contention that the COMELEC has no jurisdiction in the
present petition is bereft of merit.
As previously mentioned, the COMELEC, under Sec. 78, Art. IX of
the Omnibus Election Code, has jurisdiction over a petition to deny
due course to or cancel certificate of candidacy. Such jurisdiction
continues even after election, if for any reason no final judgment
of disqualification is rendered before the election, and the
candidate facing disqualification is voted for and receives the
highest number of votes[38] and provided further that the winning
candidate has not been proclaimed or has taken his oath of
office.[39]
It has been repeatedly held in a number of cases, that the House of
Representatives Electoral Tribunals sole and exclusive jurisdiction
over all contests relating to the election, returns and qualifications
of members of Congress as provided under Section 17 of Article VI
of the Constitution begins only after a candidate has become a
member of the House of Representatives.[40]
The fact of obtaining the highest number of votes in an election
does not automatically vest the position in the winning
candidate.[41] A candidate must be proclaimed and must have
taken his oath of office before he can be considered a member of
the House of Representatives.
In the instant case, DOMINO was not proclaimed as Congressman-
elect of the Lone Congressional District of the Province of Sarangani
by reason of a Supplemental Omnibus Resolution issued by the
COMELEC on the day of the election ordering the suspension of
DOMINOs proclamation should he obtain the winning number of
votes. This resolution was issued by the COMELEC in view of the
non-finality of its 6 May 1998 resolution disqualifying DOMINO as
candidate for the position.
Considering that DOMINO has not been proclaimed
Congressman-elect in the Lone Congressional District of
Province of Sarangani he cannot be deemed a member of
House of Representative. Hence, it is the COMELEC and not
Electoral Tribunal which has jurisdiction over the issue of
ineligibility as a candidate.[42]
Issue raised by INTERVENOR.
After finding that DOMINO is disqualified as candidate for the
position of representative of the province of Sarangani, may
INTERVENOR, as the candidate who received the next highest
number of votes, be proclaimed as the winning candidate?
It is now settled doctrine that the candidate who obtains the
second highest number of votes may not be proclaimed winner in
case the winning candidate is disqualified.[43]
In every election, the peoples choice is the paramount
consideration and their expressed will must, at all times, be given
effect. When the majority speaks and elects into office a candidate
by giving the highest number of votes cast in the election for that
office, no one can be declared elected in his place.[44]
It would be extremely repugnant to the basic concept of the
constitutionally guaranteed right to suffrage if a candidate who has
not acquired the majority or plurality of votes is proclaimed a
winner and imposed as the representative of a constituency, the
majority of which have positively declared through their ballots
that they do not choose him.[45] To simplistically assume that the
second placer would have received the other votes would be to
as substitute our judgment for the mind of the voters. He could not
the be considered the first among qualified candidates because in a
the field which excludes the qualified candidate, the conditions would
the have substantially changed.[46]
his
Sound policy dictates that public elective offices are filled by those
who have received the highest number of votes cast in the election
for that office, and it is fundamental idea in all republican forms of
government that no one can be declared elected and no measure
can be declared carried unless he or it receives a majority or
plurality of the legal votes cast in the election.[47]
The effect of a decision declaring a person ineligible to hold an allowed DOMINO to be voted for the office and ordered that the
office is only that the election fails entirely, that the wreath of votes cast for him be counted as the Resolution declaring him
victory cannot be transferred[48] from the disqualified winner to the ineligible has not yet attained finality. Thus the votes cast for
repudiated loser because the law then as now only authorizes a DOMINO are presumed to have been cast in the sincere belief that
declaration of election in favor of the person who haS obtained a he was a qualified candidate, without any intention to misapply
plurality of votes[49] and does not entitle the candidate receiving their franchise. Thus, said votes can not be treated as stray, void,
the next highest number of votes to be declared elected. In such or meaningless.[53]
case, the electors have failed to make a choice and the election is
a nullity.[50] To allow the defeated and repudiated candidate to take WHEREFORE, the instant petition is DISMISSED. The resolution
over the elective position despite his rejection by the electorate is dated 6 May 1998 of the COMELEC 2nd Division and the decision
to disenfranchise the electorate without any fault on their part and dated 29 May 1998 of the COMELEC En Banc, are hereby
to undermine the importance and meaning of democracy and the AFFIRMED.
peoples right to elect officials of their choice.[51]
SO ORDERED.
INTERVENORs plea that the votes cast in favor of DOMINO be
considered stray votes cannot be sustained. INTERVENORs reliance
on the opinion made in the Labo, Jr. case[52] to wit: if the
electorate, fully aware in fact and in law of a candidates
disqualification so as to bring such awareness within the realm of
notoriety, would nevertheless cast their votes in favor of the
ineligible candidate, the electorate may be said to have waived the
validity and efficacy of their votes by notoriously misapplying their
franchise or throwing away their votes, in which case, the eligible
candidate obtaining the next higher number of votes may be
deemed elected, is misplaced.

Contrary to the claim of INTERVENOR, petitioner was not

notoriously known by the public as an ineligible
candidate. Although the resolution declaring him ineligible as
candidate was rendered before the election, however, the same is
not yet final and executory. In fact, it was no less than the
COMELEC in its Supplemental Omnibus Resolution No. 3046 that
G.R. No. 161872 April 13, 2004
REV. ELLY CHAVEZ PAMATONG, ESQUIRE, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
RESOLUTION
TINGA, J.:
Petitioner Rev. Elly Velez Pamatong filed his Certificate of
Candidacy for President on December 17, 2003. Respondent
Commission on Elections (COMELEC) refused to give due course to
petitioner’s Certificate of Candidacy in its Resolution No.
6558 dated January 17, 2004. The decision, however, was not
unanimous since Commissioners Luzviminda G. Tancangco and
Mehol K. Sadain voted to include petitioner as they believed he had
parties or movements to back up his candidacy.
On January 15, 2004, petitioner moved for reconsideration
of Resolution No. 6558. Petitioner’s Motion for
Reconsideration was docketed as SPP (MP) No. 04-001. The
COMELEC, acting on petitioner’s Motion for Reconsideration and
on similar motions filed by other aspirants for national elective
positions, denied the same under the aegis of Omnibus Resolution
No. 6604 dated February 11, 2004. The COMELEC declared
petitioner and thirty-five (35) others nuisance candidates who
could not wage a nationwide campaign and/or are not nominated
by a political party or are not supported by a registered political
party with a national constituency. Commissioner Sadain
maintained his vote for petitioner. By then, Commissioner
Tancangco had retired.
In this Petition For Writ of Certiorari, petitioner seeks to reverse the
resolutions which were allegedly rendered in violation of his right
to "equal access to opportunities for public service" under Section
26, Article II of the 1987
Constitution,1 by limiting the number of qualified candidates only
to those who can afford to wage a nationwide campaign and/or are
nominated by political parties. In so doing, petitioner argues that
the COMELEC indirectly amended the constitutional provisions on
the electoral process and limited the power of the sovereign
people to choose their leaders. The COMELEC supposedly erred in
disqualifying him since he is the most qualified among all the
presidential candidates, i.e., he possesses all the constitutional and
legal qualifications for the office of the president, he is capable of
waging a national campaign since he has numerous national
organizations under his leadership, he also has the capacity to wage
an international campaign since he has practiced law in other
countries, and he has a platform of government. Petitioner likewise
attacks the validity of the form for the Certificate of
Candidacy prepared by the COMELEC. Petitioner claims that the
form does not provide clear and reasonable guidelines for
determining the qualifications of candidates since it does not ask
for the candidate’s bio-data and his program of government.
First, the constitutional and legal dimensions involved.
Implicit in the petitioner’s invocation of the constitutional provision
ensuring "equal access to opportunities for public office" is the
claim that there is a constitutional right to run for or hold public
office and, particularly in his case, to seek the presidency. There is
none. What is recognized is merely a privilege subject to limitations
imposed by law. Section 26, Article II of the Constitution neither
bestows such a right nor elevates the privilege to the level of an
enforceable right. There is nothing in the plain language of the
provision which suggests such a thrust or justifies an interpretation
of the sort.
The "equal access" provision is a subsumed part of Article II of the
Constitution, entitled "Declaration of Principles and State Policies."
The provisions under the Article are generally considered not self-
executing,2 and there is no plausible reason for according a
different treatment to the "equal access" provision. Like the rest of
the policies enumerated in Article II, the provision does not contain
any judicially enforceable constitutional right but merely specifies
a guideline for legislative or executive action.3 The disregard of the
provision does not give rise to any cause of action before the
courts.4
An inquiry into the intent of the framers5 produces the same
determination that the provision is not self-executory. The original
wording of the present Section 26, Article II had read, "The State
shall broaden opportunities to public office and prohibit public
dynasties."6 Commissioner (now Chief Justice) Hilario Davide, Jr.
successfully brought forth an amendment that changed the word
"broaden" to the phrase "ensure equal access," and the
substitution of the word "office" to "service." He explained his
proposal in this wise:
I changed the word "broaden" to "ENSURE EQUAL ACCESS TO"
because what is important would be equal access to the
opportunity. If you broaden, it would necessarily mean that the
government would be mandated to create as many offices as are
possible to accommodate as many people as are also possible.
That is the meaning of broadening opportunities to public
service. So, in order that we should not mandate the State to
make the government the number one employer and to limit
offices only to what may be necessary and expedient yet offering
equal opportunities to access to it, I change the word
"broaden."7 (emphasis supplied)
Obviously, the provision is not intended to compel the State to
enact positive measures that would accommodate as many people
as possible into public office. The approval of the "Davide
amendment" indicates the design of the framers to cast the
provision as simply enunciatory of a desired policy objective and
not reflective of the imposition of a clear State burden.
Moreover, the provision as written leaves much to be desired if it
is to be regarded as the source of positive rights. It is difficult to
interpret the clause as operative in the absence of legislation since
its effective means and reach are not properly defined. Broadly
written, the myriad of claims that can be subsumed under this
rubric appear to be entirely open-ended.8 Words and phrases such
as "equal access," "opportunities," and "public service" are
susceptible to countless interpretations owing to their inherent
impreciseness. Certainly, it was not the intention of the framers to
inflict on the people an operative but amorphous foundation from
which innately unenforceable rights may be sourced.
As earlier noted, the privilege of equal access to opportunities to
public office may be subjected to limitations. Some valid limitations
specifically on the privilege to seek elective office are found in the
provisions9 of the Omnibus Election Code on "Nuisance
Candidates" and COMELEC Resolution No. 645210 dated December
10, 2002 outlining the instances wherein the COMELEC may motu
proprio refuse to give due course to or cancel a Certificate of
Candidacy.
As long as the limitations apply to everybody equally without
discrimination, however, the equal access clause is not violated.
Equality is not sacrificed as long as the burdens engendered by the
limitations are meant to be borne by any one who is minded to file
a certificate of candidacy. In the case at bar, there is no showing
that any person is exempt from the limitations or the burdens
which they create.
Significantly, petitioner does not challenge the constitutionality or
validity of Section 69 of the Omnibus Election Code and COMELEC
Resolution No. 6452 dated 10 December 2003. Thus, their
presumed validity stands and has to be accorded due weight.
Clearly, therefore, petitioner’s reliance on the equal access clause
in Section 26, Article II of the Constitution is misplaced.
The rationale behind the prohibition against nuisance candidates
and the disqualification of candidates who have not evinced
a bona fide intention to run for office is easy to divine. The State
has a compelling interest to ensure that its electoral exercises are
rational, objective, and orderly. Towards this end, the State takes
into account the practical considerations in conducting elections.
Inevitably, the greater the number of candidates, the greater the
opportunities for logistical confusion, not to mention the increased
allocation of time and resources in preparation for the election.
These practical difficulties should, of course, never exempt the
State from the conduct of a mandated electoral exercise. At the
same time, remedial actions should be available to alleviate these
logistical hardships, whenever necessary and proper. Ultimately, a
disorderly election is not merely a textbook example of inefficiency,
but a rot that erodes faith in our democratic institutions. As the
United States Supreme Court held:
[T]here is surely an important state interest in requiring some
preliminary showing of a significant modicum of support before
printing the name of a political organization and its candidates on
the ballot – the interest, if no other, in avoiding confusion,
deception and even frustration of the democratic [process].11
The COMELEC itself recognized these practical considerations
when it promulgated Resolution No. 6558 on 17 January 2004,
adopting the study Memorandum of its Law Department dated 11
January 2004. As observed in the COMELEC’s Comment:
There is a need to limit the number of candidates especially in the
case of candidates for national positions because the election
process becomes a mockery even if those who cannot clearly wage
a national campaign are allowed to run. Their names would have
to be printed in the Certified List of Candidates, Voters Information
Sheet and the Official Ballots. These would entail additional costs
to the government. For the official ballots in automated counting
and canvassing of votes, an additional page would amount to more
or less FOUR HUNDRED FIFTY MILLION PESOS (₱450,000,000.00).
xxx[I]t serves no practical purpose to allow those candidates to
continue if they cannot wage a decent campaign enough to project
the prospect of winning, no matter how slim.12
The preparation of ballots is but one aspect that would be affected
by allowance of "nuisance candidates" to run in the elections. Our
election laws provide various entitlements for candidates for public
office, such as watchers in every polling place,13 watchers in the
board of canvassers,14 or even the receipt of electoral
contributions.15Moreover, there are election rules and regulations
the formulations of which are dependent on the number of
candidates in a given election.
Given these considerations, the ignominious nature of a nuisance
candidacy becomes even more galling. The organization of an
election with bona fide candidates standing is onerous enough. To
add into the mix candidates with no serious intentions or
capabilities to run a viable campaign would actually impair the
electoral process. This is not to mention the candidacies which are
palpably ridiculous so as to constitute a one-note joke. The poll
body would be bogged by irrelevant minutiae covering every step
of the electoral process, most probably posed at the instance of
these nuisance candidates. It would be a senseless sacrifice on the
part of the State.
Owing to the superior interest in ensuring a credible and orderly
election, the State could exclude nuisance candidates and need not
indulge in, as the song goes, "their trips to the moon on gossamer
wings."
The Omnibus Election Code and COMELEC Resolution No. 6452 are
cognizant of the compelling State interest to ensure orderly and
credible elections by excising impediments thereto, such as
nuisance candidacies that distract and detract from the larger
purpose. The COMELEC is mandated by the Constitution with the
administration of elections16 and endowed with considerable
latitude in adopting means and methods that will ensure the
promotion of free, orderly and honest elections.17 Moreover, the
Constitution guarantees that only bona fide candidates for public
office shall be free from any form of harassment and
discrimination.18 The determination of bona fidecandidates is
governed by the statutes, and the concept, to our mind is,
satisfactorily defined in the Omnibus Election Code.
Now, the needed factual premises.
However valid the law and the COMELEC issuance involved are,
their proper application in the case of the petitioner cannot be
tested and reviewed by this Court on the basis of what is now
before it. The assailed resolutions of the COMELEC do not direct
the Court to the evidence which it considered in determining that
petitioner was a nuisance candidate. This precludes the Court from
reviewing at this instance whether the COMELEC committed grave
abuse of discretion in disqualifying petitioner, since such a review
would necessarily take into account the matters which the
COMELEC considered in arriving at its decisions.
Petitioner has submitted to this Court mere photocopies of various
documents purportedly evincing his credentials as an eligible
candidate for the presidency. Yet this Court, not being a trier of
facts, can not properly pass upon the reproductions as evidence at
this level. Neither the COMELEC nor the Solicitor General appended
any document to their respective Comments.
The question of whether a candidate is a nuisance candidate or not
is both legal and factual. The basis of the factual determination is
not before this Court. Thus, the remand of this case for the
reception of further evidence is in order.
A word of caution is in order. What is at stake is petitioner’s
aspiration and offer to serve in the government. It deserves not a
cursory treatment but a hearing which conforms to the
requirements of due process.

As to petitioner’s attacks on the validity of the form for the

certificate of candidacy, suffice it to say that the form strictly
complies with Section 74 of the Omnibus Election Code. This
provision specifically enumerates what a certificate of candidacy
should contain, with the required information tending to show that
the candidate possesses the minimum qualifications for the
position aspired for as established by the Constitution and other
election laws.

IN VIEW OF THE FOREGOING, COMELEC Case No. SPP (MP) No. 04-
001 is hereby remanded to the COMELEC for the reception of
further evidence, to determine the question on whether petitioner
Elly Velez Lao Pamatong is a nuisance candidate as contemplated
in Section 69 of the Omnibus Election Code.

The COMELEC is directed to hold and complete the reception of

evidence and report its findings to this Court with deliberate
dispatch.

SO ORDERED.
ARMANDO G. YRASUEGUI, G.R. No. 168081
Petitioner,
PHILIPPINE AIRLINES, INC.,
Respondent. October 17, 2008
The Facts
Petitioner Armando G. Yrasuegui was a former international flight
steward of Philippine Airlines, Inc. (PAL). He stands five feet and
eight inches (58) with a large body frame. The proper weight for a
man of his height and body structure is from 147 to 166
pounds, the ideal weight being 166 pounds, as mandated by the
Cabin and Crew Administration Manual[1] of PAL.
The weight problem of petitioner dates back to 1984. Back
then, PAL advised him to go on an extended vacation leave
from December 29, 1984 to March 4, 1985 to address his weight
concerns. Apparently, petitioner failed to meet the companys
weight standards, prompting another leave without pay
from March 5, 1985 to November 1985.
After meeting the required weight, petitioner was allowed to
return to work. But petitioners weight problem recurred. He again
went on leave without pay from October 17, 1988to February
1989.
On April 26, 1989, petitioner weighed 209 pounds, 43 pounds over
his ideal weight. In line with company policy, he was removed from
flight duty effective May 6, 1989 to July 3, 1989. He was formally
requested to trim down to his ideal weight and report for weight
checks on several dates. He was also told that he may avail of the
services of the company physician should he wish to do so. He was
advised that his case will be evaluated on July 3, 1989.[2]
On February 25, 1989, petitioner underwent weight check. It was
discovered that he gained, instead of losing, weight. He was
overweight at 215 pounds, which is 49 pounds beyond the
limit. Consequently, his off-duty status was retained.
On October 17, 1989, PAL Line Administrator
Gloria Dizon personally visited petitioner at his residence to check
on the progress of his effort to lose weight. Petitioner weighed 217
pounds, gaining 2 pounds from his previous weight. After the visit,
petitioner made a commitment[3] to reduce weight in a letter
addressed to Cabin Crew Group Manager AugustoBarrios. The
letter, in full, reads:
Dear Sir:
I would like to guaranty my commitment towards a weight loss
from 217 pounds to 200 pounds from today until 31 Dec.
1989. From thereon, I promise to continue reducing at a
reasonable percentage until such time that my ideal weight is
achieved. Likewise, I promise to personally report to your office at
the designated time schedule you will set for my weight check.
Respectfully Yours,
F/S Armando Yrasuegui[4]
Despite the lapse of a ninety-day period given him to reach his ideal
weight, petitioner remained overweight. On January 3, 1990, he
was informed of the PAL decision for him to remain grounded until
such time that he satisfactorily complies with the weight
standards. Again, he was directed to report every two weeks for
weight checks.
Petitioner failed to report for weight checks. Despite that, he was
given one more month to comply with the weight requirement. As
usual, he was asked to report for weight check on different
dates. He was reminded that his grounding would continue
pending satisfactory compliance with the weight standards.[5]
Again, petitioner failed to report for weight checks, although he
was seen submitting his passport for processing at the PAL Staff
Service Division.
On April 17, 1990, petitioner was formally warned that a repeated
refusal to report for weight check would be dealt with
accordingly. He was given another set of weight check
dates.[6] Again, petitioner ignored the directive and did not report
for weight checks. On June 26, 1990, petitioner was required to
explain his refusal to undergo weight checks.[7]
When petitioner tipped the scale on July 30, 1990, he weighed
at 212 pounds. Clearly, he was still way over his ideal weight of 166
pounds.
From then on, nothing was heard from petitioner until he followed
up his case requesting for leniency on the latter part of 1992. He
weighed at 219 pounds on August 20, 1992and 205
pounds on November 5, 1992.
On November 13, 1992, PAL finally served petitioner a Notice of
Administrative Charge for violation of company standards on
weight requirements. He was given ten (10) days from receipt of
the charge within which to file his answer and
submit controverting evidence.[8]
On December 7, 1992, petitioner submitted his Answer.[9] Notably,
he did not deny being overweight. What he claimed, instead, is that
his violation, if any, had already been condoned by PAL since no
action has been taken by the company regarding his case since
1988. He also claimed that PAL discriminated against him because
the company has not been fair in treating the cabin crew members
who are similarly situated.
On December 8, 1992, a clarificatory hearing was held where
petitioner manifested that he was undergoing a weight reduction
program to lose at least two (2) pounds per week so as to attain his
ideal weight.[10]
On June 15, 1993, petitioner was formally informed by PAL that
due to his inability to attain his ideal weight, and considering the
utmost leniency extended to him which spanned a period covering
a total of almost five (5) years, his services were considered
terminated effective immediately.[11]
His motion for reconsideration having been denied,[12] petitioner
filed a complaint for illegal dismissal against PAL.
Labor Arbiter, NLRC and CA Dispositions
On November 18, 1998, Labor Arbiter Valentin C. Reyes
ruled[13] that petitioner was illegally dismissed. The dispositive part
of the Arbiter ruling runs as follows:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered, declaring the complainant’s dismissal illegal, and
ordering the respondent to reinstate him to his former position or
substantially equivalent one, and to pay him:
a. Backwages of Php10,500.00 per month from his dismissal
on June 15, 1993 until reinstated, which for purposes of appeal is
hereby set from June 15, 1993 up to August 15,
1998 at P651,000.00;
b. Attorneys fees of five percent (5%) of the total award.
SO ORDERED.[14]
The Labor Arbiter held that the weight standards of PAL are
reasonable in view of the nature of the job of
petitioner.[15] However, the weight standards need not be
complied with under pain of dismissal since his weight did not
hamper the performance of his duties.[16] Assuming that it did,
petitioner could be transferred to other positions where his weight
would not be a negative factor.[17] Notably, other overweight
employees, i.e., Mr. Palacios, Mr. Cui, and Mr. Barrios, were
promoted instead of being disciplined.[18]
Both parties appealed to the National Labor Relations Commission
(NLRC).[19]
On October 8, 1999, the Labor Arbiter issued a writ of execution
directing the reinstatement of petitioner without loss of seniority
rights and other benefits.[20]
On February 1, 2000, the Labor Arbiter denied[21] the Motion to
Quash Writ of Execution[22] of PAL.
On March 6, 2000, PAL appealed the denial of its motion to quash
to the NLRC.[23]
On June 23, 2000, the NLRC rendered judgment[24] in the following
tenor:
WHEREFORE, premises considered[,] the Decision of the Arbiter
dated 18 November 1998 as modified by our findings herein, is
hereby AFFIRMED and that part of the dispositive portion of said
decision concerning complainants entitlement to backwages shall
be deemed to refer to complainants entitlement to his
full backwages, inclusive of allowances and to his other benefits or
their monetary equivalent instead of simply backwages, from date
of dismissal until his actual reinstatement or finality hereof.
Respondent is enjoined to manifests (sic) its choice of the form of
the reinstatement of complainant, whether physical or through
payroll within ten (10) days from notice failing which, the same
shall be deemed as complainants reinstatement through payroll
and execution in case of non-payment shall accordingly be issued
by the Arbiter. Both appeals of respondent thus,
are DISMISSED for utter lack of merit.[25]
 According to the NLRC, obesity, or the tendency to gain weight
uncontrollably regardless of the amount of food intake, is a disease
in itself.[26] As a consequence, there can be no intentional defiance
or serious misconduct by petitioner to the lawful order of PAL for
him to lose weight.[27]
Like the Labor Arbiter, the NLRC found the weight standards
of PAL to be reasonable. However, it found as unnecessary the
Labor Arbiter holding that petitioner was not remiss in the
performance of his duties as flight steward despite being
overweight. According to the NLRC, the Labor Arbiter should have
limited himself to the issue of whether the failure of petitioner to
attain his ideal weight constituted willful defiance of the weight
standards of PAL.[28]
PAL moved for reconsideration to no avail.[29] Thus, PAL elevated
the matter to the Court of Appeals (CA) via a petition
for certiorari under Rule 65 of the 1997 Rules of Civil Procedure.[30]
By Decision dated August 31, 2004, the CA reversed[31] the NLRC:
WHEREFORE, premises considered, we hereby GRANT the
petition. The assailed NLRC decision is declared NULL and VOID and
is hereby SET ASIDE. The private respondents complaint is hereby
DISMISSED. No costs.
SO ORDERED.[32]
The CA opined that there was grave abuse of discretion on the part
of the NLRC because it looked at wrong and irrelevant
considerations[33] in evaluating the
evidence of theparties. Contrary to the NLRC ruling, the weight
standards of PAL are meant to be a continuing qualification for an
employees position.[34] The failure to adhere to the weight
standards is an analogous cause for the dismissal of an employee
under Article 282(e) of the Labor Code in relation to Article
282(a). It is not willful disobedience as the NLRC seemed to
suggest.[35] Said the CA, the element of willfulness that the NLRC
decision cites is an irrelevant consideration in arriving at a
conclusion on whether the dismissal is legally proper.[36] In other
words, the relevant question to ask is not one of willfulness but one
of reasonableness of the standard and whether or not the
employee qualifies or continues to qualify under this standard.[37]
Just like the Labor Arbiter and the NLRC, the CA held that the
weight standards of PAL are reasonable.[38] Thus, petitioner was
legally dismissed because he repeatedly failed to meet the
prescribed weight standards.[39] It is obvious that the issue of
discrimination was only invoked by petitioner for purposes of
escaping the result of his dismissal for being overweight.[40]
On May 10, 2005, the CA denied petitioners motion for
reconsideration.[41] Elaborating on its earlier ruling, the CA held
that the weight standards of PAL are a bona fide occupational
qualification which, in case of violation, justifies an employees
separation from the service.[42]
Issues
In this Rule 45 petition for review, the following issues are posed
for resolution:
I.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT PETITIONERS OBESITY CAN BE A GROUND FOR
DISMISSAL UNDER PARAGRAPH (e) OF ARTICLE 282 OF THE LABOR
CODE OF THE PHILIPPINES;
II.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT PETITIONERS DISMISSAL FOR OBESITY CAN BE
PREDICATED ON THE BONA FIDE OCCUPATIONAL QUALIFICATION
(BFOQ) DEFENSE;
III.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT PETITIONER WAS NOT UNDULY DISCRIMINATED
AGAINST WHEN HE WAS DISMISSED WHILE OTHER OVERWEIGHT
CABIN ATTENDANTS WERE EITHER GIVEN FLYING DUTIES OR
PROMOTED;
IV.
WHETHER OR NOT THE COURT OF APPEALS GRAVELY ERRED WHEN
IT BRUSHED ASIDE PETITIONERS CLAIMS FOR REINSTATEMENT
[AND] WAGES ALLEGEDLY FOR BEING
MOOT AND ACADEMIC.[43] (Underscoring supplied)
Our Ruling
I. The obesity of petitioner is a ground for dismissal under Article
282(e) [44] of the Labor Code.
A reading of the weight standards of PAL would lead to no other
conclusion than that they constitute a continuing qualification of
an employee in order to keep the job. Tersely put, an employee
may be dismissed the moment he is unable to comply with his ideal
weight as prescribed by the weight standards. The dismissal of the
employee would thus fall under Article 282(e) of the Labor Code. As
explained by the CA:
x x x [T]he standards violated in this case were not mere orders of
the employer; they were the prescribed weights that a cabin crew
must maintain in order to qualify for and keep his or her position
in the company. In other words, they were standards that
establish continuing qualifications for an employees position. In
this sense, the failure to maintain these standards does not fall
under Article 282(a) whose express terms require the element of
willfulness in order to be a ground for dismissal. The failure to meet
the employers qualifying standards is in fact a ground that does
not squarely fall under grounds (a) to (d) and is therefore one that
falls under Article 282(e) the other causes analogous to the
foregoing.
By its nature, these qualifying standards are norms that apply prior
to and after an employee is hired. They apply prior to
employment because these are the standards a job applicant must
initially meet in order to be hired. They apply after hiring because
an employee must continue to meet these standards while on the
job in order to keep his job. Under this perspective, a violation is
not one of the faults for which an employee can be dismissed
pursuant to pars. (a) to (d) of Article 282; the employee can be
dismissed simply because he no longer qualifies for his job
irrespective of whether or not the failure to qualify was willful or
intentional. x x x[45]
Petitioner, though, advances a very interesting argument. He
claims that obesity is a physical abnormality and/or
illness.[46] Relying on Nadura v. Benguet Consolidated, Inc.,[47] he
says his dismissal is illegal:
Conscious of the fact that Naduras case cannot be made to
fall squarely within the specific causes enumerated in
subparagraphs 1(a) to (e), Benguet invokes the provisions of
subparagraph 1(f) and says that Naduras illness occasional attacks
of asthma is a cause analogous to them.
Even a cursory reading of the legal provision under consideration is
sufficient to convince anyone that, as the trial court
said, illness cannot be included as an analogous cause by any
stretch of imagination.
It is clear that, except the just cause mentioned in sub-paragraph
1(a), all the others expressly enumerated in the law are due to the
voluntary and/or willful act of the employee. How Naduras illness
could be considered as analogous to any of them is beyond our
understanding, there being no claim or pretense that the same was
contracted through his own voluntary act.[48]
The reliance on Nadura is off-tangent. The factual milieu
in Nadura is substantially different from the case at
bar. First, Nadura was not decided under the Labor Code. The law
applied in that case was Republic Act (RA) No. 1787. Second, the
issue of flight safety is absent in Nadura, thus, the rationale there
cannot apply here. Third, in Nadura, the employee who was
a miner, was laid off from work because of illness, i.e.,
asthma. Here, petitioner was dismissed for his failure to meet the
weight standards of PAL. He was not dismissed due to
illness. Fourth, the issue in Nadura is whether or not the dismissed
employee is entitled to separation pay and damages. Here, the
issue centers on the propriety of the dismissal of petitioner for his
failure to meet the weight standards of PAL. Fifth, in Nadura, the
employee was not accorded due process. Here, petitioner was
accorded utmost leniency. He was given more than four (4) years
to comply with the weight standards of PAL.
In the case at bar, the evidence on record militates against
petitioners claims that obesity is a disease. That he was able to
reduce his weight from 1984 to 1992 clearly shows that it is
possible for him to lose weight given the proper attitude,
determination, and self-discipline. Indeed, during
the clarificatory hearing on December 8, 1992, petitioner himself
claimed that [t]he issue is could I bring my weight down to ideal
weight which is 172, then the answer is yes. I can do it now.[49]
True, petitioner claims that reducing weight is costing him a lot of
expenses.[50] However, petitioner has only himself to blame. He
could have easily availed the assistance of the company physician,
per the advice of PAL.[51] He chose to ignore the suggestion. In fact,
he repeatedly failed to report when required to undergo weight
checks, without offering a valid explanation. Thus, his fluctuating
weight indicates absence of willpower rather than an illness.
Petitioner cites Bonnie Cook v. State of Rhode Island, Department
of Mental Health, Retardation and
Hospitals,[52] decided by the United States Court of Appeals (First
Circuit). In that case, Cook worked from 1978 to 1980 and from
1981 to 1986 as an institutional attendant for the mentally
retarded at the Ladd Center that was being operated by
respondent. She twice resigned voluntarily with an unblemished
record. Even respondent admitted that her performance met the
Centers legitimate expectations. In 1988, Cook re-applied for a
similar position. At that time, she stood 52 tall and weighed over
320 pounds. Respondent claimed that the morbid obesity of
plaintiff compromised her ability to evacuate patients in case of
emergency and it also put her at greater risk of serious diseases.
Cook contended that the action of respondent amounted to
discrimination on the basis of a handicap. This was in direct
violation of Section 504(a) of the Rehabilitation Act of
1973,[53] which incorporates the remedies contained in Title VI of
the Civil Rights Act of 1964. Respondent claimed, however, that
morbid obesity could never constitute a handicap within the
purview of the Rehabilitation Act. Among others, obesity is a
mutable condition, thus plaintiff could simply lose weight and rid
herself of concomitant disability.
The appellate Court disagreed and held that morbid obesity is a
disability under the Rehabilitation Act and that respondent
discriminated against Cook based on perceived disability. The
evidence included expert testimony that morbid obesity is a
physiological disorder. It involves a dysfunction of both the
metabolic system and the neurological appetite suppressing signal
system, which is capable of causing adverse effects within the
musculoskeletal, respiratory, and cardiovascular systems. Notably,
the Court stated that mutability is relevant only in determining the
substantiality of the limitation flowing from a given impairment,
thus mutability only precludes those conditions that an individual
can easily and quickly reverse by behavioral alteration.
Unlike Cook, however, petitioner is not morbidly obese. In the
words of the District Court for the District of Rhode Island, Cook
was sometime before 1978 at least one hundred pounds more than
what is considered appropriate of her height. According to the
Circuit Judge, Cook weighed over 320 pounds in 1988. Clearly, that
is not the case here. At his heaviest, petitioner was only less than
50 pounds over his ideal weight.
In fine, We hold that the obesity of petitioner, when placed in the
context of his work as flight attendant, becomes an analogous
cause under Article 282(e) of the Labor Code that justifies his
dismissal from the service. His obesity may not be unintended, but
is nonetheless voluntary. As the CA correctly puts it,
[v]oluntariness basically means that the just cause is solely
attributable to the employee without any external force
influencing or controlling his actions. This element runs through all
just causes under Article 282, whether they be in the nature of a
wrongful action or omission. Gross and habitual neglect, a
recognized just cause, is considered voluntary although it lacks the
element of intent found in Article 282(a), (c), and (d).[54]
II. The dismissal of petitioner can be predicated on the bona fide
occupational qualification defense.
Employment in particular jobs may not be limited to persons of a
particular sex, religion, or national origin unless the employer can
show that sex, religion, or national origin is an actual qualification
for performing the job. The qualification is called a bona fide
occupational qualification (BFOQ).[55] In the United States, there
are a few federal and many state job discrimination laws that
contain an exception allowing an employer to engage in an
otherwise unlawful form of prohibited discrimination when the
action is based on a BFOQ necessary to the normal operation of a
business or enterprise.[56]
Petitioner contends that BFOQ is a statutory defense. It does not
exist if there is no statute providing for it.[57] Further, there is no
existing BFOQ statute that could justify his dismissal.[58]
Both arguments must fail.
First, the Constitution,[59] the Labor Code,[60] and RA No. 7277[61] or
the Magna Carta for Disabled Persons[62] contain provisions similar
to BFOQ.
Second, in British Columbia Public Service Employee Commission
(BSPSERC) v. The British Columbia Government and Service
Employees Union (BCGSEU),[63] the Supreme Court of Canada
adopted the so-called Meiorin Test in determining whether an
employment policy is justified. Under this test, (1) the employer
must show that it adopted the standard for a purpose rationally
connected to the performance of the job;[64] (2) the employer must
establish that the standard is reasonably necessary[65] to the
accomplishment of that work-related purpose; and (3) the
employer must establish that the standard is reasonably necessary
in order to accomplish the legitimate work-related
purpose. Similarly, in Star Paper Corporation v. Simbol,[66] this
Court held that in order to justify a BFOQ, the employer must prove
that (1) the employment qualification is reasonably related to the
essential operation of the job involved; and (2) that there is factual
basis for believing that all or substantially all persons meeting the
qualification would be unable to properly perform the duties of the
job.[67]
In short, the test of reasonableness of the company policy is used
because it is parallel to BFOQ.[68] BFOQ is
valid provided it reflects an inherent quality reasonably necessary
for satisfactory job performance.[69]
In Duncan Association of Detailman-PTGWTO
[70]
v. Glaxo Wellcome Philippines, Inc., the Court did not hesitate to
pass upon the validity of a company policy which prohibits its
employees from marrying employees of a rival company. It was
held that the company policy is reasonable considering that its
purpose is the protection of the interests of the company against
possible competitor infiltration on its trade secrets and procedures.
Verily, there is no merit to the argument that BFOQ cannot be
applied if it has no supporting statute. Too, the Labor
Arbiter,[71] NLRC,[72] and CA[73] are one in holding that the weight
standards of PAL are reasonable. A common carrier, from the
nature of its business and for reasons of public policy, is bound to
observe extraordinary diligence for the safety of the passengers it
transports.[74] It is bound to carry its passengers safely as far as
human care and foresight can provide, using the utmost diligence
of very cautious persons, with due regard for all the
circumstances.[75]
The law leaves no room for mistake or oversight on the part of a
common carrier. Thus, it is only logical to hold that the weight
standards of PAL show its effort to comply with the exacting
obligations imposed upon it by law by virtue of being a common
carrier.
The business of PAL is air transportation. As such, it has committed
itself to safely transport its passengers. In order to achieve this, it
must necessarily rely on its employees, most particularly the cabin
flight deck crew who are on board the aircraft. The weight
standards of PAL should be viewed as imposing strict norms of
discipline upon its employees.
In other words, the primary objective of PAL in the imposition of
the weight standards for cabin crew is flight safety. It cannot be
gainsaid that cabin attendants must maintain agility at all times in
order to inspire passenger confidence on their ability to care for
the passengers when something goes wrong. It is not farfetched to
say that airline companies, just like all common carriers, thrive due
to public confidence on their safety records. People, especially the
riding public, expect no less than that airline companies transport
their passengers to their respective destinations safely and
soundly. A lesser performance is unacceptable.
The task of a cabin crew or flight attendant is not limited to serving
meals or attending to the whims and caprices of the
passengers. The most important activity of the cabin crew is to care
for the safety of passengers and the evacuation of the aircraft when
an emergency occurs. Passenger safety goes to the core of the job
of a cabin attendant. Truly, airlines need cabin attendants who
have the necessary strength to open emergency doors, the agility
to attend to passengers in cramped working conditions, and the
stamina to withstand grueling flight schedules.
On board an aircraft, the body weight and size of a cabin attendant
are important factors to consider in case of emergency. Aircrafts
have constricted cabin space, and narrow aisles and exit
doors. Thus, the arguments of respondent that [w]hether the
airlines flight attendants are overweight or not has no direct
relation to its mission of transporting passengers to their
destination; and that the weight standards has nothing to do with
airworthiness of respondents airlines, must fail.
The rationale in Western Air Lines v. Criswell[76] relied upon by
petitioner cannot apply to his case. What was involved there were
two (2) airline pilots who were denied reassignment as flight
engineers upon reaching the age of 60, and a flight engineer who
was forced to retire at age 60. They sued the airline company,
alleging that the age-60 retirement for flight engineers violated the
Age Discrimination in Employment Act of 1967. Age-based BFOQ
and being overweight are not the same. The case of overweight
cabin attendants is another matter. Given the cramped cabin space
and narrow aisles and emergency exit doors of the airplane, any
overweight cabin attendant would certainly have difficulty
navigating the cramped cabin area.
In short, there is no need to individually evaluate their ability to
perform their task. That an obese cabin attendant occupies more
space than a slim one is an unquestionable fact which courts can
judicially recognize without introduction of evidence.[77] It would
also be absurd to require airline companies to reconfigure the
aircraft in order to widen the aisles and exit doors just to
accommodate overweight cabin attendants like petitioner.
The biggest problem with an overweight cabin attendant is the
possibility of impeding passengers from evacuating the aircraft,
should the occasion call for it. The job of a cabin attendant during
emergencies is to speedily get the passengers out of the aircraft
safely. Being overweight necessarily impedes mobility. Indeed, in
an emergency situation, seconds are what cabin attendants are
dealing with, not minutes. Three lost seconds can translate into
three lost lives. Evacuation might slow down just because a wide-
bodied cabin attendant is blocking the narrow aisles. These
possibilities are not remote.
Petitioner is also in estoppel. He does not dispute that the weight
standards of PAL were made known to him prior to his
employment. He is presumed to know the weight limit that he must
maintain at all times.[78] In
fact, never did he question the authority of PAL when he was
repeatedly asked to trim down his weight. Bona
fides exigit ut quod convenit fiat. Good faith demands that what is
agreed upon shall be
done. Kung ang tao ay tapat kanyang tutuparin ang napagkasun
duan.
Too, the weight standards of PAL provide for separate weight
limitations based on height and body frame for both male and
female cabin attendants. A progressive discipline is imposed to
allow non-compliant cabin attendants sufficient opportunity to
meet the weight standards. Thus, the clear-cut rules obviate any
possibility for the commission of abuse or arbitrary action on the
part of PAL.
III. Petitioner failed to substantiate his claim that he was
discriminated against by PAL.
Petitioner next claims that PAL is using passenger safety as a
convenient excuse to discriminate against him.[79] We are
constrained, however, to hold otherwise. We agree with the CA
that [t]he element of discrimination came into play in this case as a
secondary position for the private respondent in order to escape
the consequence of dismissal that being overweight entailed. It is a
confession-and-avoidance position that impliedly admitted the
cause of dismissal, including the reasonableness of the applicable
standard and the private respondents failure to comply.[80] It is a
basic rule in evidence that each party must prove his affirmative
allegation.[81]
Since the burden of evidence lies with the party who asserts an
affirmative allegation, petitioner has to prove his allegation with
particularity. There is nothing on the records which could support
the finding of discriminatory treatment. Petitioner cannot establish
discrimination by simply naming the supposed cabin attendants
who are allegedly similarly situated with him. Substantial proof
must be shown as to how and why they are similarly situated and
the differential treatment petitioner got from PAL despite the
similarity of his situation with other employees.
Indeed, except for pointing out the names of the supposed
overweight cabin attendants, petitioner miserably failed to
indicate their respective ideal weights; weights over their ideal
weights; the periods they were allowed to fly despite their being
overweight; the particular flights assigned to them; the
discriminating treatment they got from PAL; and other relevant
data that could have adequately established a case of
discriminatory treatment by PAL. In the words of the CA, PAL really
had no substantial case of discrimination to meet.[82]
We are not unmindful that findings of facts of administrative
agencies, like the Labor Arbiter and the NLRC, are accorded
respect, even finality.[83] The reason is simple: administrative
agencies are experts in matters within their specific and specialized
jurisdiction.[84] But the principle is not a hard and fast rule. It only
applies if the findings of facts are duly supported by substantial
evidence. If it can be shown that administrative bodies
grossly misappreciated evidence of such nature so as to compel a
conclusion to the contrary, their findings of facts must necessarily
be reversed. Factual findings of administrative agencies do not
have infallibility and must be set aside when they fail the test of
arbitrariness.[85]
Here, the Labor Arbiter and the NLRC
inexplicably misappreciated evidence. We thus annul their
findings.
To make his claim more believable, petitioner invokes the equal
protection clause guaranty[86] of the Constitution. However, in the
absence of governmental interference, the liberties guaranteed by
the Constitution cannot be invoked.[87] Put differently, the Bill of
Rights is not meant to be invoked against acts of private
individuals.[88] Indeed, the United States Supreme Court, in
interpreting the Fourteenth Amendment,[89] which is the source of
our equal protection guarantee, is consistent in saying that
the equal protection erects no shield against private conduct,
however discriminatory or wrongful.[90] Private actions, no matter
how egregious, cannot violate the equal protection guarantee.[91]
IV. The claims of petitioner for reinstatement and wages are
moot.
As his last contention, petitioner avers that his claims for
reinstatement and wages have not been mooted. He is entitled to
reinstatement and his full backwages, from the time he was
illegally dismissed up to the time that the NLRC was reversed by the
CA.[92]
At this point, Article 223 of the Labor Code finds relevance:
In any event, the decision of the Labor Arbiter reinstating a
dismissed or separated employee, insofar as the reinstatement
aspect is concerned, shall immediately be executory, even pending
appeal. The employee shall either be admitted back to work under
the same terms and conditions prevailing prior to his dismissal or
separation or, at the option of the employer, merely reinstated in
the payroll. The posting of a bond by the employer shall not stay
the execution for reinstatement provided herein.
The law is very clear. Although an award or order of reinstatement
is self-executory and does not require a writ of execution,[93] the
option to exercise actual reinstatement or payroll reinstatement
belongs to the employer. It does not belong to the employee, to
the labor tribunals, or even to the courts.
Contrary to the allegation of petitioner that PAL did everything
under the sun to frustrate his immediate return to his previous
position,[94] there is evidence that PAL opted to physically reinstate
him to a substantially equivalent position in accordance with the
order of the Labor
Arbiter.[95] In fact, petitioner duly received the return to work
notice on February 23, 2001, as shown by his signature.[96]
Petitioner cannot take refuge in the pronouncements of the Court
in a case[97] that [t]he unjustified refusal of the employer to
reinstate the dismissed employee entitles him to payment of his
salaries effective from the time the employer failed to reinstate
him despite the issuance of a writ of execution[98] and even if the
order of reinstatement of the Labor Arbiter is reversed on appeal,
it is obligatory on the part of the employer to reinstate and pay the
wages of the employee during the period of appeal until reversal
by the higher court.[99] He failed to prove that he complied with the
return to work order of PAL. Neither does it
appear on record that he actually rendered services for PAL from
the moment he was dismissed, in order to insist on the payment of
his full backwages.
In insisting that he be reinstated to his actual position despite being
overweight, petitioner in effect wants to render the issues in the
present case moot. He asks PAL to comply with the
impossible. Time and again, the Court ruled that the law does not
exact compliance with the impossible.[100]
V. Petitioner is entitled to separation pay.
misconduct; and (2) does not reflect on the moral character of the
employee.[103]
Here, We grant petitioner separation pay equivalent to one-half
(1/2) months pay for every year of service.[104] It should include
regular allowances which he might have been receiving.[105] We are
not blind to the fact that he was not dismissed for any serious
misconduct or to any act which would reflect on his moral
character. We also recognize that his employment with PAL lasted
for more or less a decade.
WHEREFORE, the appealed Decision of the Court of Appeals
is AFFIRMED but MODIFIED in that petitioner Armando
G. Yrasuegui is entitled to separation pay in an amount equivalent
to one-half (1/2) months pay for every year of service, which
should include his regular allowances.

Be that as it may, all is not lost for petitioner. SO ORDERED.

Normally, a legally dismissed employee is not entitled to separation

pay. This may be deduced from the language of Article 279 of the
Labor Code that [a]n employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority
rights and other privileges and to his full backwages, inclusive of
allowances, and to his other benefits or their monetary equivalent
computed from the time his compensation was withheld from him
up to the time of his actual reinstatement. Luckily for petitioner,
this is not an ironclad rule.

Exceptionally, separation pay is granted to a legally dismissed

employee as an act social justice,[101] or based on equity.[102] In both
instances, it is required that the dismissal (1) was not for serious

G.R. No. 196271 February 28, 2012
DATU MICHAEL ABAS KIDA Petitioners,
vs.
SENATE OF THE PHILIPPINES, Respondents.
We resolve: (a) the motion for reconsideration filed by petitioners
Datu Michael Abas Kida, et al. in G.R. No. 196271; (b) the motion
for reconsideration filed by petitioner Rep. Edcel Lagman in G.R.
No. 197221; (c) the ex abundante ad cautelam motion for
reconsideration filed by petitioner Basari Mapupuno in G.R. No.
196305; (d) the motion for reconsideration filed by petitioner Atty.
Romulo Macalintal in G.R. No. 197282; (e) the motion for
reconsideration filed by petitioners Almarim Centi Tillah, Datu
Casan Conding Cana and Partido Demokratiko Pilipino Lakas ng
Bayan in G.R. No. 197280; (f) the manifestation and motion filed by
petitioners Almarim Centi Tillah, et al. in G.R. No. 197280; and (g)
the very urgent motion to issue clarificatory resolution that the
temporary restraining order (TRO) is still existing and effective.
These motions assail our Decision dated October 18, 2011, where
we upheld the constitutionality of Republic Act (RA) No. 10153.
Pursuant to the constitutional mandate of synchronization, RA No.
10153 postponed the regional elections in the Autonomous Region
in Muslim Mindanao (ARMM) (which were scheduled to be held on
the second Monday of August 2011) to the second Monday of May
2013 and recognized the President’s power to appoint officers-in-
charge (OICs) to temporarily assume these positions upon the
expiration of the terms of the elected officials.
The Motions for Reconsideration
The petitioners in G.R. No. 196271 raise the following grounds in
support of their motion:
I. THE HONORABLE COURT ERRED IN CONCLUDING THAT THE
ARMM ELECTIONS ARE LOCAL ELECTIONS, CONSIDERING THAT THE
CONSTITUTION GIVES THE ARMM A SPECIAL STATUS AND IS
SEPARATE AND DISTINCT FROM ORDINARY LOCAL GOVERNMENT
UNITS.
II. R.A. 10153 AND R.A. 9333 AMEND THE ORGANIC ACT.
III. THE SUPERMAJORITY PROVISIONS OF THE ORGANIC ACT (R.A.
9054) ARE NOT IRREPEALABLE LAWS.
IV. SECTION 3, ARTICLE XVII OF R.A. 9054 DOES NOT VIOLATE
SECTION 18, ARTICLE X OF THE CONSTITUTION.
V. BALANCE OF INTERESTS TILT IN FAVOR OF THE DEMOCRATIC
PRINCIPLE[.]1
The petitioner in G.R. No. 197221 raises similar grounds, arguing
that:
I. THE ELECTIVE REGIONAL EXECUTIVE AND LEGISLATIVE OFFICIALS
OF ARMM CANNOT BE CONSIDERED AS OR EQUATED WITH THE
TRADITIONAL LOCAL GOVERNMENT OFFICIALS IN THE LOCAL
GOVERNMENT UNITS (LGUs) BECAUSE (A) THERE IS NO EXPLICIT
CONSTITUTIONAL PROVISION ON SUCH PARITY; AND (B) THE
ARMM IS MORE SUPERIOR THAN LGUs IN STRUCTURE, POWERS
AND AUTONOMY, AND CONSEQUENTLY IS A CLASS OF ITS OWN
APART FROM TRADITIONAL LGUs.
II. THE UNMISTAKABLE AND UNEQUIVOCAL CONSTITUTIONAL
MANDATE FOR AN ELECTIVE AND REPRESENTATIVE EXECUTIVE
DEPARTMENT AND LEGISLATIVE ASSEMBLY IN ARMM
INDUBITABLY PRECLUDES THE APPOINTMENT BY THE PRESIDENT
OF OFFICERS-IN-CHARGE (OICs), ALBEIT MOMENTARY OR
TEMPORARY, FOR THE POSITIONS OF ARMM GOVERNOR, VICE
GOVERNOR AND MEMBERS OF THE REGIONAL ASSEMBLY.
III. THE PRESIDENT’S APPOINTING POWER IS LIMITED TO
APPOINTIVE OFFICIALS AND DOES NOT EXTEND TO ELECTIVE
OFFICIALS EVEN AS THE PRESIDENT IS ONLY VESTED WITH
SUPERVISORY POWERS OVER THE ARMM, THEREBY NEGATING THE
AWESOME POWER TO APPOINT AND REMOVE OICs OCCUPYING
ELECTIVE POSITIONS.
IV. THE CONSTITUTION DOES NOT PROSCRIBE THE HOLDOVER OF
ARMM ELECTED OFFICIALS PENDING THE ELECTION AND
QUALIFICATION OF THEIR SUCCESSORS.
V. THE RULING IN OSMENA DOES NOT APPLY TO ARMM ELECTED
OFFICIALS WHOSE TERMS OF OFFICE ARE NOT PROVIDED FOR BY
THE CONSTITUTION BUT PRESCRIBED BY THE ORGANIC ACTS.
VI. THE REQUIREMENT OF A SUPERMAJORITY OF ¾ VOTES IN THE
HOUSE OF REPRESENTATIVES AND THE SENATE FOR THE VALIDITY
OF A SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC
ACTS DOES NOT IMPOSE AN IRREPEALABLE LAW.
VII. THE REQUIREMENT OF A PLEBISCITE FOR THE EFFECTIVITY OF
A SUBSTANTIVE AMENDMENT OR REVISION OF THE ORGANIC ACTS
DOES NOT UNDULY EXPAND THE PLEBISCITE REQUIREMENT OF
THE CONSTITUTION.
VIII. SYNCHRONIZATION OF THE ARMM ELECTION WITH THE
NATIONAL AND LOCAL ELECTIONS IS NOT MANDATED BY THE
CONSTITUTION.
IX. THE COMELEC HAS THE AUTHORITY TO HOLD AND CONDUCT
SPECIAL ELECTIONS IN ARMM, AND THE ENACTMENT OF AN
IMPROVIDENT AND UNCONSTITUTIONAL STATUTE IS AN
ANALOGOUS CAUSE WARRANTING COMELEC’S HOLDING OF
SPECIAL ELECTIONS.2 (italics supplied)
The petitioner in G.R. No. 196305 further asserts that:
I. BEFORE THE COURT MAY CONSTRUE OR INTERPRET A STATUTE,
IT IS A CONDITION SINE QUA NON THAT THERE BE DOUBT OR
AMBIGUITY IN ITS LANGUAGE.
THE TRANSITORY PROVISIONS HOWEVER ARE CLEAR AND
UNAMBIGUOUS: THEY REFER TO THE 1992 ELECTIONS AND TURN-
OVER OF ELECTIVE OFFICIALS.
IN THUS RECOGNIZING A SUPPOSED "INTENT" OF THE FRAMERS,
AND APPLYING THE SAME TO ELECTIONS 20 YEARS AFTER, THE
HONORABLE SUPREME COURT MAY HAVE VI. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN
VIOLATED THEFOREMOST RULE IN STATUTORY CONSTRUCTION. UPHOLDING THE APPOINTMENT OF OFFICERS-IN-CHARGE.3 (italics
and underscoring supplied)
xxxx
The petitioner in G.R. No. 197282 contends that:
II. THE HONORABLE COURT SHOULD HAVE CONSIDERED THAT RA
9054, AN ORGANIC ACT, WAS COMPLETE IN ITSELF. HENCE, RA A.
10153 SHOULD BE CONSIDERED TO HAVE BEEN ENACTED
PRECISELY TO AMEND RA 9054. ASSUMING WITHOUT CONCEDING THAT THE APPOINTMENT OF
OICs FOR THE REGIONAL GOVERNMENT OF THE ARMM IS NOT
xxxx UNCONSTITUTIONAL TO BEGIN WITH, SUCH APPOINTMENT OF OIC
REGIONAL OFFICIALS WILL CREATE A FUNDAMENTAL CHANGE IN
III. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS THE BASIC STRUCTURE OF THE REGIONAL GOVERNMENT SUCH
ERROR IN DECLARING THE 2/3 VOTING REQUIREMENT SET FORTH THAT R.A. NO. 10153 SHOULD HAVE BEEN SUBMITTED TO A
IN RA 9054 AS UNCONSTITUTIONAL. PLEBISCITE IN THE ARMM FOR APPROVAL BY ITS PEOPLE, WHICH
PLEBISCITE REQUIREMENT CANNOT BE CIRCUMVENTED BY SIMPLY
xxxx CHARACTERIZING THE PROVISIONS OF R.A. NO. 10153 ON
APPOINTMENT OF OICs AS AN "INTERIM MEASURE".
IV. THE HONORABLE COURT MAY HAVE COMMITTED A SERIOUS
ERROR IN HOLDING THAT A PLEBISCITE IS NOT NECESSARY IN B.
AMENDING THE ORGANIC ACT.
THE HONORABLE COURT ERRED IN RULING THAT THE
xxxx APPOINTMENT BY THE PRESIDENT OF OICs FOR THE ARMM
REGIONAL GOVERNMENT IS NOT VIOLATIVE OF THE
V. THE HONORABLE COURT COMMITTED A SERIOUS ERROR IN CONSTITUTION.
DECLARING THE HOLD-OVER OF ARMM ELECTIVE OFFICIALS
UNCONSTITUTIONAL. C.

xxxx THE HOLDOVER PRINCIPLE ADOPTED IN R.A. NO. 9054 DOES NOT
VIOLATE THE CONSTITUTION, AND BEFORE THEIR SUCCESSORS ARE
ELECTED IN EITHER AN ELECTION TO BE HELD AT THE SOONEST
POSSIBLE TIME OR IN MAY 2013, THE SAID INCUMBENT ARMM
REGIONAL OFFICIALS MAY VALIDLY CONTINUE FUNCTIONING AS
SUCH IN A HOLDOVER CAPACITY IN ACCORDANCE WITH SECTION
7, ARTICLE VII OF R.A. NO. 9054.
D.
WITH THE CANCELLATION OF THE AUGUST 2011 ARMM
ELECTIONS, SPECIAL ELECTIONS MUST IMMEDIATELY BE HELD FOR
THE ELECTIVE REGIONAL OFFICIALS OF THE ARMM WHO SHALL
SERVE UNTIL THEIR SUCCESSORS ARE ELECTED IN THE MAY 2013
SYNCHRONIZED ELECTIONS.4
Finally, the petitioners in G.R. No. 197280 argue that:
a) the Constitutional mandate of synchronization does not apply to
the ARMM elections;
b) RA No. 10153 negates the basic principle of republican
democracy which, by constitutional mandate, guides the
governance of the Republic;
c) RA No. 10153 amends the Organic Act (RA No. 9054) and, thus,
has to comply with the 2/3 vote from the House of Representatives
and the Senate, voting separately, and be ratified in a plebiscite;
d) if the choice is between elective officials continuing to hold their
offices even after their terms are over and non-elective individuals
getting into the vacant elective positions by appointment as OICs,
the holdover option is the better choice;
e) the President only has the power of supervision over
autonomous regions, which does not include the power to appoint
OICs to take the place of ARMM elective officials; and
f) it would be better to hold the ARMM elections separately from
the national and local elections as this will make it easier for the
authorities to implement election laws.
In essence, the Court is asked to resolve the following questions:
(a) Does the Constitution mandate the synchronization of ARMM
regional elections with national and local elections?
(b) Does RA No. 10153 amend RA No. 9054? If so, does RA No.
10153 have to comply with the supermajority vote and plebiscite
requirements?
(c) Is the holdover provision in RA No. 9054 constitutional?
(d) Does the COMELEC have the power to call for special elections
in ARMM?
(e) Does granting the President the power to appoint OICs violate
the elective and representative nature of ARMM regional
legislative and executive offices?
(f) Does the appointment power granted to the President exceed
the President’s supervisory powers over autonomous regions?
The Court’s Ruling
We deny the motions for lack of merit.
Synchronization mandate includes ARMM elections
The Court was unanimous in holding that the Constitution
mandates the synchronization of national and local elections.
While the Constitution does not expressly instruct Congress to
synchronize the national and local elections, the intention can be
inferred from the following provisions of the Transitory Provisions
(Article XVIII) of the Constitution, which state:
Section 1. The first elections of Members of the Congress under this
Constitution shall be held on the second Monday of May, 1987.
The first local elections shall be held on a date to be determined by
the President, which may be simultaneous with the election of the
Members of the Congress. It shall include the election of all
Members of the city or municipal councils in the Metropolitan
Manila area.
Section 2. The Senators, Members of the House of Representatives,
and the local officials first elected under this Constitution shall
serve until noon of June 30, 1992.
Of the Senators elected in the elections in 1992, the first twelve
obtaining the highest number of votes shall serve for six years and
the remaining twelve for three years.
xxxx
Section 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.
The first regular elections for the President and Vice-President
under this Constitution shall be held on the second Monday of May,
1992.
To fully appreciate the constitutional intent behind these
provisions, we refer to the discussions of the Constitutional
Commission:
MR. MAAMBONG. For purposes of identification, I will now read a
section which we will temporarily indicate as Section 14. It reads:
"THE SENATORS, MEMBERS OF THE HOUSE OF REPRESENTATIVES
AND THE LOCAL OFFICIALS ELECTED IN THE FIRST ELECTION SHALL
SERVE FOR FIVE YEARS, TO EXPIRE AT NOON OF JUNE 1992."
This was presented by Commissioner Davide, so may we ask that
Commissioner Davide be recognized.
THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner Davide is
recognized.
MR. DAVIDE. Before going to the proposed amendment, I would
only state that in view of the action taken by the Commission on
Section 2 earlier, I am formulating a new proposal. It will read as
follows: "THE SENATORS, MEMBERS OF THE HOUSE OF
REPRESENTATIVES AND THE LOCAL OFFICIALS FIRST ELECTED
UNDER THIS CONSTITUTION SHALL SERVE UNTIL NOON OF JUNE
30, 1992."
I proposed this because of the proposed section of the Article on
Transitory Provisions giving a term to the incumbent President and
Vice-President until 1992. Necessarily then, since the term
provided by the Commission for Members of the Lower House and
for local officials is three years, if there will be an election in 1987,
the next election for said officers will be in 1990, and it would be
very close to 1992. We could never attain, subsequently, any
synchronization of election which is once every three years.
So under my proposal we will be able to begin actual
synchronization in 1992, and consequently, we should not have a
local election or an election for Members of the Lower House in
1990 for them to be able to complete their term of three years
each. And if we also stagger the Senate, upon the first election it
will result in an election in 1993 for the Senate alone, and there will
be an election for 12 Senators in 1990. But for the remaining 12
who will be elected in 1987, if their term is for six years, their
election will be in 1993. So, consequently we will have elections in
1990, in 1992 and in 1993. The later election will be limited to only
12 Senators and of course to the local officials and the Members of
the Lower House. But, definitely, thereafter we can never have an
election once every three years, therefore defeating the very
purpose of the Commission when we adopted the term of six years
for the President and another six years for the Senators with the
possibility of staggering with 12 to serve for six years and 12 for
three years insofar as the first Senators are concerned. And so my
proposal is the only way to effect the first synchronized election
which would mean, necessarily, a bonus of two years to the
Members of the Lower House and a bonus of two years to the
local elective officials.
THE PRESIDING OFFICER (Mr. Rodrigo). What does the committee
say?
MR. DE CASTRO. Mr. Presiding Officer.
THE PRESIDING OFFICER (Mr. Rodrigo). Commissioner de Castro is
recognized.
MR. DE CASTRO. Thank you.
During the discussion on the legislative and the synchronization of
elections, I was the one who proposed that in order to synchronize
the elections every three years, which the body approved — the
first national and local officials to be elected in 1987 shall continue
in office for five years, the same thing the Honorable Davide is now
proposing. That means they will all serve until 1992, assuming that
the term of the President will be for six years and continue
beginning in 1986. So from 1992, we will again have national, local
and presidential elections. This time, in 1992, the President shall
have a term until 1998 and the first 12 Senators will serve until
1998, while the next 12 shall serve until 1995, and then the local
officials elected in 1992 will serve until 1995. From then on, we
shall have an election every three years.
So, I will say that the proposition of Commissioner Davide is in
order, if we have to synchronize our elections every three years
which was already approved by the body.
Thank you, Mr. Presiding Officer.
xxxx
MR. GUINGONA. What will be synchronized, therefore, is the
election of the incumbent President and Vice-President in 1992.
MR. DAVIDE. Yes.
MR. GUINGONA. Not the reverse. Will the committee not
synchronize the election of the Senators and local officials with the
election of the President?
MR. DAVIDE. It works both ways, Mr. Presiding Officer. The attempt
here is on the assumption that the provision of the Transitory
Provisions on the term of the incumbent President and Vice-
President would really end in 1992.
MR. GUINGONA. Yes.
MR. DAVIDE. In other words, there will be a single election in 1992
for all, from the President up to the municipal
officials.5 (emphases and underscoring ours)
The framers of the Constitution could not have expressed their
objective more clearly – there was to be a single election in 1992
for all elective officials – from the President down to the municipal
officials. Significantly, the framers were even willing to temporarily
lengthen or shorten the terms of elective officials in order to meet
this objective, highlighting the importance of this constitutional
mandate.
We came to the same conclusion in Osmeña v. Commission on
Elections,6 where we unequivocally stated that "the Constitution
has mandated synchronized national and local elections."7 Despite
the length and verbosity of their motions, the petitioners have
failed to convince us to deviate from this established ruling.
Neither do we find any merit in the petitioners’ contention that the
ARMM elections are not covered by the constitutional mandate of
synchronization because the ARMM elections were not specifically
mentioned in the above-quoted Transitory Provisions of the
Constitution.
That the ARMM elections were not expressly mentioned in the
Transitory Provisions of the Constitution on synchronization cannot
be interpreted to mean that the ARMM elections are not covered
by the constitutional mandate of synchronization. We have to
consider that the ARMM, as we now know it, had not yet been
officially organized at the time the Constitution was enacted and
ratified by the people. Keeping in mind that a constitution is not
intended to provide merely for the exigencies of a few years but is
to endure through generations for as long as it remains unaltered
by the people as ultimate sovereign, a constitution should be
construed in the light of what actually is a continuing instrument to
govern not only the present but also the unfolding events of the
indefinite future. Although the principles embodied in a
constitution remain fixed and unchanged from the time of its
adoption, a constitution must be construed as a dynamic process
intended to stand for a great length of time, to be progressive and
not static.8
To reiterate, Article X of the Constitution, entitled "Local
Government," clearly shows the intention of the Constitution to
classify autonomous regions, such as the ARMM, as local
governments. We refer to Section 1 of this Article, which provides:
Section 1. The territorial and political subdivisions of the Republic
of the Philippines are the provinces, cities, municipalities, and
barangays. There shall be autonomous regions in Muslim
Mindanao and the Cordilleras as hereinafter provided.
The inclusion of autonomous regions in the enumeration of
political subdivisions of the State under the heading "Local
Government" indicates quite clearly the constitutional intent to
consider autonomous regions as one of the forms of local
governments.
That the Constitution mentions only the "national government"
and the "local governments," and does not make a distinction
between the "local government" and the "regional government," is
particularly revealing, betraying as it does the intention of the
framers of the Constitution to consider the autonomous regions
not as separate forms of government, but as political units which,
while having more powers and attributes than other local
government units, still remain under the category of local
governments. Since autonomous regions are classified as local
governments, it follows that elections held in autonomous regions
are also considered as local elections.
The petitioners further argue that even assuming that the
Constitution mandates the synchronization of elections, the ARMM
elections are not covered by this mandate since they are regional
elections and not local elections.
In construing provisions of the Constitution, the first rule is verba
legis, "that is, wherever possible, the words used in the
Constitution must be given their ordinary meaning except where
technical terms are employed."9 Applying this principle to
determine the scope of "local elections," we refer to the meaning
of the word "local," as understood in its ordinary sense. As defined
in Webster’s Third New International Dictionary Unabridged,
"local" refers to something "that primarily serves the needs of a
particular limited district, often a community or minor political
subdivision." Obviously, the ARMM elections, which are held within
the confines of the autonomous region of Muslim Mindanao, fall
within this definition.
To be sure, the fact that the ARMM possesses more powers than
other provinces, cities, or municipalities is not enough reason to
treat the ARMM regional elections differently from the other local
elections. Ubi lex non distinguit nec nos distinguire debemus. When
the law does not distinguish, we must not distinguish.10
RA No. 10153 does not amend RA No. 9054
The petitioners are adamant that the provisions of RA No. 10153,
in postponing the ARMM elections, amend RA No. 9054.
We cannot agree with their position.
A thorough reading of RA No. 9054 reveals that it fixes the schedule
for only the first ARMM elections;11 it does not provide the date for
the succeeding regular ARMM elections. In providing for the date
of the regular ARMM elections, RA No. 9333 and RA No. 10153
clearly do not amend RA No. 9054 since these laws do not change
or revise any provision in RA No. 9054. In fixing the date of the
ARMM elections subsequent to the first election, RA No. 9333 and
RA No. 10153 merely filled the gap left in RA No. 9054.
We reiterate our previous observations:
This view – that Congress thought it best to leave the
determination of the date of succeeding ARMM elections to
legislative discretion – finds support in ARMM’s recent history.
To recall, RA No. 10153 is not the first law passed that rescheduled
the ARMM elections. The First Organic Act – RA No. 6734 – not only
did not fix the date of the subsequent elections; it did not even fix
the specific date of the first ARMM elections, leaving the date to be
fixed in another legislative enactment. Consequently, RA No. 7647,
RA No. 8176, RA No. 8746, RA No. 8753, and RA No. 9012 were all
enacted by Congress to fix the dates of the ARMM elections. Since
these laws did not change or modify any part or provision of RA No.
6734, they were not amendments to this latter law. Consequently,
there was no need to submit them to any plebiscite for ratification.
The Second Organic Act – RA No. 9054 – which lapsed into law on
March 31, 2001, provided that the first elections would be held on
the second Monday of September 2001. Thereafter, Congress
passed RA No. 9140 to reset the date of the ARMM elections.
Significantly, while RA No. 9140 also scheduled the plebiscite for
the ratification of the Second Organic Act (RA No. 9054), the new
date of the ARMM regional elections fixed in RA No. 9140 was not
among the provisions ratified in the plebiscite held to approve RA
No. 9054. Thereafter, Congress passed RA No. 9333, which further
reset the date of the ARMM regional elections. Again, this law was
not ratified through a plebiscite.
From these legislative actions, we see the clear intention of
Congress to treat the laws which fix the date of the subsequent
ARMM elections as separate and distinct from the Organic Acts.
Congress only acted consistently with this intent when it passed RA
No. 10153 without requiring compliance with the amendment
prerequisites embodied in Section 1 and Section 3, Article XVII of
RA No. 9054.12 (emphases supplied)
The petitioner in G.R. No. 196305 contends, however, that there is
no lacuna in RA No. 9054 as regards the date of the subsequent
ARMM elections. In his estimation, it can be implied from the
provisions of RA No. 9054 that the succeeding elections are to be
held three years after the date of the first ARMM regional
elections.
We find this an erroneous assertion. Well-settled is the rule that
the court may not, in the guise of interpretation, enlarge the scope
of a statute and include therein situations not provided nor
intended by the lawmakers. An omission at the time of enactment,
whether careless or calculated, cannot be judicially supplied
however later wisdom may recommend the inclusion.13 Courts are
not authorized to insert into the law what they think should be in
it or to supply what they think the legislature would have supplied
if its attention had been called to the omission.14 Providing for
lapses within the law falls within the exclusive domain of the
legislature, and courts, no matter how well-meaning, have no
authority to intrude into this clearly delineated space.
Since RA No. 10153 does not amend, but merely fills in the gap in
RA No. 9054, there is no need for RA No. 10153 to comply with the
amendment requirements set forth in Article XVII of RA No. 9054.
Supermajority vote requirement makes RA No. 9054 an
irrepealable law
Even assuming that RA No. 10153 amends RA No. 9054, however,
we have already established that the supermajority vote
requirement set forth in Section 1, Article XVII of RA No. 905415 is
unconstitutional for violating the principle that Congress cannot
pass irrepealable laws.
The power of the legislature to make laws includes the power to
amend and repeal these laws. Where the legislature, by its own act,
attempts to limit its power to amend or repeal laws, the Court has
the duty to strike down such act for interfering with the plenary
powers of Congress. As we explained in Duarte v. Dade:16
A state legislature has a plenary law-making power over all
subjects, whether pertaining to persons or things, within its
territorial jurisdiction, either to introduce new laws or repeal the
old, unless prohibited expressly or by implication by the federal
constitution or limited or restrained by its own. It cannot bind itself
or its successors by enacting irrepealable laws except when so
restrained. Every legislative body may modify or abolish the acts
passed by itself or its predecessors. This power of repeal may be
exercised at the same session at which the original act was passed;
and even while a bill is in its progress and before it becomes a
law. This legislature cannot bind a future legislature to a
particular mode of repeal. It cannot declare in advance the intent
of subsequent legislatures or the effect of subsequent legislation
upon existing statutes. [emphasis ours]
Under our Constitution, each House of Congress has the power to
approve bills by a mere majority vote, provided there is
quorum.17 In requiring all laws which amend RA No. 9054 to comply
with a higher voting requirement than the Constitution provides
(2/3 vote), Congress, which enacted RA No. 9054, clearly violated
the very principle which we sought to establish in Duarte. To
reiterate, the act of one legislature is not binding upon, and cannot
tie the hands of, future legislatures.18
We also highlight an important point raised by Justice Antonio T.
Carpio in his dissenting opinion, where he stated: "Section 1, Article
XVII of RA 9054 erects a high vote threshold for each House of
Congress to surmount, effectively and unconstitutionally, taking RA
9054 beyond the reach of Congress’ amendatory powers. One
Congress cannot limit or reduce the plenary legislative power of
succeeding Congresses by requiring a higher vote threshold than
what the Constitution requires to enact, amend or repeal laws. No
law can be passed fixing such a higher vote threshold because
Congress has no power, by ordinary legislation, to amend the
Constitution."19
Plebiscite requirement in RA No. 9054 overly broad
Similarly, we struck down the petitioners’ contention that the
plebiscite requirement20 applies to all amendments of RA No. 9054
for being an unreasonable enlargement of the plebiscite
requirement set forth in the Constitution.
Section 18, Article X of the Constitution provides that "[t]he
creation of the autonomous region shall be effective when
approved by majority of the votes cast by the constituent units in a
plebiscite called for the purpose[.]" We interpreted this to mean
that only amendments to, or revisions of, the Organic Act
constitutionally-essential to the creation of autonomous regions
– i.e., those aspects specifically mentioned in the Constitution
which Congress must provide for in the Organic Act21 – require
ratification through a plebiscite. We stand by this interpretation.
The petitioners argue that to require all amendments to RA No.
9054 to comply with the plebiscite requirement is to recognize that
sovereignty resides primarily in the people.
While we agree with the petitioners’ underlying premise that
sovereignty ultimately resides with the people, we disagree that
this legal reality necessitates compliance with the plebiscite
requirement for all amendments to RA No. 9054. For if we were to
go by the petitioners’ interpretation of Section 18, Article X of the
Constitution that all amendments to the Organic Act have to
undergo the plebiscite requirement before becoming effective, this
would lead to impractical and illogical results – hampering the
ARMM’s progress by impeding Congress from enacting laws that
timely address problems as they arise in the region, as well as
weighing down the ARMM government with the costs that
unavoidably follow the holding of a plebiscite.
Interestingly, the petitioner in G.R. No. 197282 posits that RA No.
10153, in giving the President the power to appoint OICs to take
the place of the elective officials of the ARMM, creates a
fundamental change in the basic structure of the government, and
thus requires compliance with the plebiscite requirement
embodied in RA No. 9054.
Again, we disagree.
The pertinent provision in this regard is Section 3 of RA No. 10153,
which reads:
Section 3. Appointment of Officers-in-Charge. — The President
shall appoint officers-in-charge for the Office of the Regional
Governor, Regional Vice Governor and Members of the Regional
Legislative Assembly who shall perform the functions pertaining to
the said offices until the officials duly elected in the May 2013
elections shall have qualified and assumed office.
We cannot see how the above-quoted provision has changed the
basic structure of the ARMM regional government. On the
contrary, this provision clearly preserves the basic structure of the
ARMM regional government when it recognizes the offices of the
ARMM regional government and directs the OICs who shall
temporarily assume these offices to "perform the functions
pertaining to the said offices."
Unconstitutionality of the holdover provision
The petitioners are one in defending the constitutionality of
Section 7(1), Article VII of RA No. 9054, which allows the regional
officials to remain in their positions in a holdover capacity. The
petitioners essentially argue that the ARMM regional officials
should be allowed to remain in their respective positions until the
May 2013 elections since there is no specific provision in the
Constitution which prohibits regional elective officials from
performing their duties in a holdover capacity.
The pertinent provision of the Constitution is Section 8, Article X
which provides:
Section 8. The term of office of elective local officials, except
barangay officials, which shall be determined by law, shall be three
years and no such official shall serve for more than three
consecutive terms. [emphases ours]
On the other hand, Section 7(1), Article VII of RA No. 9054 provides:
Section 7. Terms of Office of Elective Regional Officials. – (1) Terms
of Office. The terms of office of the Regional Governor, Regional
Vice Governor and members of the Regional Assembly shall be for
a period of three (3) years, which shall begin at noon on the 30th
day of September next following the day of the election and shall
end at noon of the same date three (3) years thereafter. The
incumbent elective officials of the autonomous region shall
continue in effect until their successors are elected and qualified.
The clear wording of Section 8, Article X of the Constitution
expresses the intent of the framers of the Constitution to
categorically set a limitation on the period within which all elective
local officials can occupy their offices. We have already established
that elective ARMM officials are also local officials; they are, thus,
bound by the three-year term limit prescribed by the Constitution.
It, therefore, becomes irrelevant that the Constitution does not
expressly prohibit elective officials from acting in a holdover
capacity. Short of amending the Constitution, Congress has no
authority to extend the three-year term limit by inserting a
holdover provision in RA No. 9054. Thus, the term of three years
for local officials should stay at three (3) years, as fixed by the
Constitution, and cannot be extended by holdover by Congress.
Admittedly, we have, in the past, recognized the validity of
holdover provisions in various laws. One significant difference
between the present case and these past cases22 is that while these
past cases all refer to elective barangay or sangguniang
kabataan officials whose terms of office are not explicitly provided
for in the Constitution, the present case refers to local elective
officials - the ARMM Governor, the ARMM Vice Governor, and the
members of the Regional Legislative Assembly - whose terms fall
within the three-year term limit set by Section 8, Article X of the
Constitution.
Even assuming that a holdover is constitutionally permissible, and
there had been statutory basis for it (namely Section 7, Article VII
of RA No. 9054), the rule of holdover can only apply as an available
option where no express or implied legislative intent to the
contrary exists; it cannot apply where such contrary intent is
evident.23
Congress, in passing RA No. 10153 and removing the holdover
option, has made it clear that it wants to suppress the holdover rule
expressed in RA No. 9054. Congress, in the exercise of its plenary
legislative powers, has clearly acted within its discretion when it
deleted the holdover option, and this Court has no authority to
question the wisdom of this decision, absent any evidence of
unconstitutionality or grave abuse of discretion. It is for the
legislature and the executive, and not this Court, to decide how to
fill the vacancies in the ARMM regional government which arise
from the legislature complying with the constitutional mandate of
synchronization.
COMELEC has no authority to hold special elections
Neither do we find any merit in the contention that the
Commission on Elections (COMELEC) is sufficiently empowered to
set the date of special elections in the ARMM. To recall, the
Constitution has merely empowered the COMELEC to enforce and
administer all laws and regulations relative to the conduct of an
election.24 Although the legislature, under the Omnibus Election
Code (Batas Pambansa Bilang [BP] 881), has granted the COMELEC
the power to postpone elections to another date, this power is
confined to the specific terms and circumstances provided for in
the law. Specifically, this power falls within the narrow confines of
the following provisions:
Section 5. Postponement of election. - When for any serious cause
such as violence, terrorism, loss or destruction of election
paraphernalia or records, force majeure, and other analogous
causes of such a nature that the holding of a free, orderly and
honest election should become impossible in any political
subdivision, the Commission, motu proprio or upon a verified
petition by any interested party, and after due notice and hearing,
whereby all interested parties are afforded equal opportunity to be
heard, shall postpone the election therein to a date which should
be reasonably close to the date of the election not held,
suspended or which resulted in a failure to elect but not later than
thirty days after the cessation of the cause for such postponement
or suspension of the election or failure to elect.
Section 6. Failure of election. - If, on account of force
majeure, violence, terrorism, fraud, or other analogous
causes the election in any polling place has not been held on the
date fixed, or had been suspended before the hour fixed by law for
the closing of the voting, or after the voting and during the
preparation and the transmission of the election returns or in the
custody or canvass thereof, such election results in a failure to
elect, and in any of such cases the failure or suspension of election
would affect the result of the election, the Commission shall, on
the basis of a verified petition by any interested party and after due
notice and hearing, call for the holding or continuation of the
election not held, suspended or which resulted in a failure to elect
on a date reasonably close to the date of the election not held,
suspended or which resulted in a failure to elect but not later than
thirty days after the cessation of the cause of such postponement
or suspension of the election or failure to elect. [emphases and
underscoring ours]
As we have previously observed in our assailed decision, both
Section 5 and Section 6 of BP 881 address instances where
elections have already been scheduled to take place but do not
occur or had to be suspended because
of unexpected and unforeseen circumstances, such as violence,
fraud, terrorism, and other analogous circumstances.
In contrast, the ARMM elections were postponed by law, in
furtherance of the constitutional mandate of synchronization of
national and local elections. Obviously, this does not fall under any
of the circumstances contemplated by Section 5 or Section 6 of BP
881.
More importantly, RA No. 10153 has already fixed the date for the
next ARMM elections and the COMELEC has no authority to set a
different election date.
Even assuming that the COMELEC has the authority to hold special
elections, and this Court can compel the COMELEC to do so, there
is still the problem of having to shorten the terms of the newly
elected officials in order to synchronize the ARMM elections with
the May 2013 national and local elections. Obviously, neither the
Court nor the COMELEC has the authority to do this, amounting as
it does to an amendment of Section 8, Article X of the Constitution,
which limits the term of local officials to three years.
President’s authority to appoint OICs
The petitioner in G.R. No. 197221 argues that the President’s
power to appoint pertains only to appointive positions and cannot
extend to positions held by elective officials.
The power to appoint has traditionally been recognized as
executive in nature.25 Section 16, Article VII of the Constitution
describes in broad strokes the extent of this power, thus:
Section 16. The President shall nominate and, with the consent of
the Commission on Appointments, appoint the heads of the
executive departments, ambassadors, other public ministers and
consuls, or officers of the armed forces from the rank of colonel or
naval captain, and other officers whose appointments are vested
in him in this Constitution. He shall also appoint all other officers
of the Government whose appointments are not otherwise
provided for by law, and those whom he may be authorized by
law to appoint. The Congress may, by law, vest the appointment of
other officers lower in rank in the President alone, in the courts, or
in the heads of departments, agencies, commissions, or boards.
[emphasis ours]
The 1935 Constitution contained a provision similar to the one
quoted above. Section 10(3), Article VII of the 1935 Constitution
provides:
(3) The President shall nominate and with the consent of the
Commission on Appointments, shall appoint the heads of the
executive departments and bureaus, officers of the Army from the
rank of colonel, of the Navy and Air Forces from the rank of captain
or commander, and all other officers of the Government whose
appointments are not herein otherwise provided for, and those
whom he may be authorized by law to appoint; but the Congress
may by law vest the appointment of inferior officers, in the
President alone, in the courts, or in the heads of departments.
[emphasis ours]
The main distinction between the provision in the 1987
Constitution and its counterpart in the 1935 Constitution is the
sentence construction; while in the 1935 Constitution, the various
appointments the President can make are enumerated in a single
sentence, the 1987 Constitution enumerates the various
appointments the President is empowered to make and divides the
enumeration in two sentences. The change in style is significant; in
providing for this change, the framers of the 1987 Constitution
clearly sought to make a distinction between the first group of
presidential appointments and the second group of presidential
appointments, as made evident in the following exchange:
MR. FOZ. Madame President x x x I propose to put a period (.) after
"captain" and x x x delete "and all" and substitute it with HE SHALL
ALSO APPOINT ANY.
MR. REGALADO. Madam President, the Committee accepts the
proposed amendment because it makes it clear that those other
officers mentioned therein do not have to be confirmed by the
Commission on Appointments.26
The first group of presidential appointments, specified as the heads
of the executive departments, ambassadors, other public ministers
and consuls, or officers of the Armed Forces, and other officers
whose appointments are vested in the President by the
Constitution, pertains to the appointive officials who have to be
confirmed by the Commission on Appointments.
The second group of officials the President can appoint are "all
other officers of the Government whose appointments are not
otherwise provided for by law, and those whom he may be
authorized by law to appoint."27 The second sentence acts as the
"catch-all provision" for the President’s appointment power, in
recognition of the fact that the power to appoint is essentially
executive in nature.28 The wide latitude given to the President to
appoint is further demonstrated by the recognition of the
President’s power to appoint officials whose appointments are not
even provided for by law. In other words, where there are offices
which have to be filled, but the law does not provide the process
for filling them, the Constitution recognizes the power of the
President to fill the office by appointment.
Any limitation on or qualification to the exercise of the President’s
appointment power should be strictly construed and must be
clearly stated in order to be recognized.29 Given that the President
derives his power to appoint OICs in the ARMM regional
government from law, it falls under the classification of presidential
appointments covered by the second sentence of Section 16,
Article VII of the Constitution; the President’s appointment power
thus rests on clear constitutional basis.
The petitioners also jointly assert that RA No. 10153, in granting the
President the power to appoint OICs in elective positions, violates
Section 16, Article X of the Constitution,30 which merely grants the
President the power of supervision over autonomous regions.
This is an overly restrictive interpretation of the President’s
appointment power. There is no incompatibility between the
President’s power of supervision over local governments and
autonomous regions, and the power granted to the President,
within the specific confines of RA No. 10153, to appoint OICs.
The power of supervision is defined as "the power of a superior
officer to see to it that lower officers perform their functions in
accordance with law."31 This is distinguished from the power of
control or "the power of an officer to alter or modify or set aside
what a subordinate officer had done in the performance of his
duties and to substitute the judgment of the former for the
latter."32
The petitioners’ apprehension regarding the President’s alleged
power of control over the OICs is rooted in their belief that the
President’s appointment power includes the power to remove
these officials at will. In this way, the petitioners foresee that the
appointed OICs will be beholden to the President, and act as
representatives of the President and not of the people.
Section 3 of RA No. 10153 expressly contradicts the petitioners’
supposition. The provision states:
Section 3. Appointment of Officers-in-Charge. — The President
shall appoint officers-in-charge for the Office of the Regional
Governor, Regional Vice Governor and Members of the Regional
Legislative Assembly who shall perform the functions pertaining to
the said offices until the officials duly elected in the May 2013
elections shall have qualified and assumed office.
The wording of the law is clear. Once the President has appointed
the OICs for the offices of the Governor, Vice Governor and
members of the Regional Legislative Assembly, these same officials
will remain in office until they are replaced by the duly elected
officials in the May 2013 elections. Nothing in this provision even
hints that the President has the power to recall the appointments
he already made. Clearly, the petitioners’ fears in this regard are
more apparent than real.
RA No. 10153 as an interim measure
We reiterate once more the importance of considering RA No.
10153 not in a vacuum, but within the context it was enacted in. In
the first place, Congress enacted RA No. 10153 primarily to heed
the constitutional mandate to synchronize the ARMM regional
elections with the national and local elections. To do this, Congress
had to postpone the scheduled ARMM elections for another date,
leaving it with the problem of how to provide the ARMM with
governance in the intervening period, between the expiration of
the term of those elected in August 2008 and the assumption to
office – twenty-one (21) months away – of those who will win in
the synchronized elections on May 13, 2013.
In our assailed Decision, we already identified the three possible
solutions open to Congress to address the problem created by
synchronization – (a) allow the incumbent officials to remain in
office after the expiration of their terms in a holdover capacity; (b)
call for special elections to be held, and shorten the terms of those
to be elected so the next ARMM regional elections can be held on
May 13, 2013; or (c) recognize that the President, in the exercise of
his appointment powers and in line with his power of supervision
over the ARMM, can appoint interim OICs to hold the vacated
positions in the ARMM regional government upon the expiration of
their terms. We have already established the unconstitutionality of
the first two options, leaving us to consider the last available
option.
In this way, RA No. 10153 is in reality an interim measure, enacted
to respond to the adjustment that synchronization requires. Given
the context, we have to judge RA No. 10153 by the standard of
reasonableness in responding to the challenges brought about by
synchronizing the ARMM elections with the national and local
elections. In other words, "given the plain unconstitutionality of
providing for a holdover and the unavailability of constitutional
possibilities for lengthening or shortening the term of the elected
ARMM officials, is the choice of the President’s power to appoint
– for a fixed and specific period as an interim measure, and as
allowed under Section 16, Article VII of the Constitution – an
unconstitutional or unreasonable choice for Congress to make?"33
We admit that synchronization will temporarily disrupt the election
process in a local community, the ARMM, as well as the
community’s choice of leaders. However, we have to keep in mind
that the adoption of this measure is a matter of necessity in order
to comply with a mandate that the Constitution itself has set out
for us. Moreover, the implementation of the provisions of RA No.
10153 as an interim measure is comparable to the interim
measures traditionally practiced when, for instance, the President
appoints officials holding elective offices upon the creation of new
local government units.
The grant to the President of the power to appoint OICs in place of
the elective members of the Regional Legislative Assembly is
neither novel nor innovative. The power granted to the President,
via RA No. 10153, to appoint members of the Regional Legislative
Assembly is comparable to the power granted by BP 881 (the
Omnibus Election Code) to the President to fill any vacancy for any
cause in the Regional Legislative Assembly (then called the
Sangguniang Pampook).34
Executive is not bound by the principle of judicial courtesy
The petitioners in G.R. No. 197280, in their Manifestation and
Motion dated December 21, 2011, question the propriety of the
appointment by the President of Mujiv Hataman as acting
Governor and Bainon Karon as acting Vice Governor of the ARMM.
They argue that since our previous decision was based on a close
vote of 8-7, and given the numerous motions for reconsideration
filed by the parties, the President, in recognition of the principle of
judicial courtesy, should have refrained from implementing our
decision until we have ruled with finality on this case.
We find the petitioners’ reasoning specious.
Firstly, the principle of judicial courtesy is based on the hierarchy
of courts and applies only to lower courts in instances where, even
if there is no writ of preliminary injunction or TRO issued by a
higher court, it would be proper for a lower court to suspend its
proceedings for practical and ethical considerations.35 In other
words, the principle of "judicial courtesy" applies where there is a
strong probability that the issues before the higher court would be
rendered moot and moribund as a result of the continuation of the
proceedings in the lower court or court of origin.36 Consequently,
this principle cannot be applied to the President, who represents a
co-equal branch of government. To suggest otherwise would be to
disregard the principle of separation of powers, on which our
whole system of government is founded upon.
Secondly, the fact that our previous decision was based on a slim
vote of 8-7 does not, and cannot, have the effect of making our
ruling any less effective or binding. Regardless of how close the
voting is, so long as there is concurrence of the majority of the
members of the en banc who actually took part in the deliberations
of the case,37 a decision garnering only 8 votes out of 15 members
is still a decision of the Supreme Court en banc and must be
respected as such. The petitioners are, therefore, not in any
position to speculate that, based on the voting, "the probability
exists that their motion for reconsideration may be granted."38
Similarly, the petitioner in G.R. No. 197282, in his Very Urgent
Motion to Issue Clarificatory Resolution, argues that since motions
for reconsideration were filed by the aggrieved parties challenging
our October 18, 2011 decision in the present case, the TRO we
initially issued on September 13, 2011 should remain subsisting
and effective. He further argues that any attempt by the Executive
to implement our October 18, 2011 decision pending resolution of
the motions for reconsideration "borders on disrespect if not
outright insolence"39 to this Court.
In support of this theory, the petitioner cites Samad v.
COMELEC,40 where the Court held that while it had already issued
a decision lifting the TRO, the lifting of the TRO is not yet final and
executory, and can also be the subject of a motion for
reconsideration. The petitioner also cites the minute resolution
issued by the Court in Tolentino v. Secretary of Finance,41 where
the Court reproached the Commissioner of the Bureau of Internal
Revenue for manifesting its intention to implement the decision of
the Court, noting that the Court had not yet lifted the TRO
previously issued.42
We agree with the petitioner that the lifting of a TRO can be
included as a subject of a motion for reconsideration filed to assail
our decision. It does not follow, however, that the TRO remains
effective until after we have issued a final and executory decision,
especially considering the clear wording of the dispositive portion
of our October 18, 2011 decision, which states:
WHEREFORE, premises considered, we DISMISS the consolidated
petitions assailing the validity of RA No. 10153 for lack of merit, and
UPHOLD the constitutionality of this law. We likewise LIFT the
temporary restraining order we issued in our Resolution of
September 13, 2011. No costs.43 (emphases ours)
In this regard, we note an important distinction between Tolentino
and the present case. While it may be true that Tolentino and the
present case are similar in that, in both cases, the petitions assailing
the challenged laws were dismissed by the Court, an examination
of the dispositive portion of the decision in Tolentino reveals that
the Court did not categorically lift the TRO. In sharp contrast, in the
present case, we expressly lifted the TRO issued on September 13,
2011.1âwphi1 There is, therefore, no legal impediment to prevent
the President from exercising his authority to appoint an acting
ARMM Governor and Vice Governor as specifically provided for in
RA No. 10153.
Conclusion
As a final point, we wish to address the bleak picture that the
petitioner in G.R. No. 197282 presents in his motion, that our
Decision has virtually given the President the power and authority
to appoint 672,416 OICs in the event that the elections of barangay
and Sangguniang Kabataan officials are postponed or cancelled.
We find this speculation nothing short of fear-mongering.
This argument fails to take into consideration the unique factual
and legal circumstances which led to the enactment of RA No.
10153. RA No. 10153 was passed in order to synchronize the
ARMM elections with the national and local elections. In the course
of synchronizing the ARMM elections with the national and local
elections, Congress had to grant the President the power to
appoint OICs in the ARMM, in light of the fact that: (a) holdover by
the incumbent ARMM elective officials is legally impermissible; and
(b) Congress cannot call for special elections and shorten the terms
of elective local officials for less than three years.
Unlike local officials, as the Constitution does not prescribe a term
limit for barangay and Sangguniang Kabataan officials, there is no
legal proscription which prevents these specific government
officials from continuing in a holdover capacity should some
exigency require the postponement of barangay or Sangguniang
Kabataan elections. Clearly, these fears have neither legal nor
factual basis to stand on.
For the foregoing reasons, we deny the petitioners’ motions for
reconsideration.
WHEREFORE, premises considered, we DENY with FINALITY the
motions for reconsideration for lack of merit and UPHOLD the
constitutionality of RA No. 10153.
SO ORDERED.

G.R. No. 202242 April 16, 2013
FRANCISCO I. CHAVEZ, Petitioner,
vs.
JUDICIALAND BAR COUNCIL, SEN. FRANCIS JOSEPH G. ESCUDERO
and REP. NIEL C. TUPAS, JR., Respondents.
By way of recapitulation, the present action stemmed from the
unexpected departure of former Chief Justice Renato C. Corona on
May 29, 2012, and the nomination of petitioner, as his potential
successor. In his initiatory pleading, petitioner asked the Court to
determine 1] whether the first paragraph of Section 8, Article VIII
of the 1987 Constitution allows more than one (1) member of
Congress to sit in the JBC; and 2] if the practice of having two (2)
representatives from each House of Congress with one (1) vote
each is sanctioned by the Constitution.
On July 17, 2012, the Court handed down the assailed subject
decision, disposing the same in the following manner:
WHEREFORE, the petition is GRANTED. The current numerical
composition of the Judicial and Bar Council is declared
UNCONSTITUTIONAL. The Judicial and Bar Council is hereby
enjoined to reconstitute itself so that only one (1) member of
Congress will sit as a representative in its proceedings, in
accordance with Section 8(1), Article VIII of the 1987 Constitution.
This disposition is immediately executory.
SO ORDERED.
On July 31, 2012, following respondents’ motion for
reconsideration and with due regard to Senate Resolution Nos.
111,3 112,4 113,5 and 114,6 the Court set the subject motion for
oral arguments on August 2, 2012.7 On August 3, 2012, the Court
discussed the merits of the arguments and agreed, in the
meantime, to suspend the effects of the second paragraph of the
dispositive portion of the July 17, 2012 Decision which decreed that
it was immediately executory. The decretal portion of the August
3, 2012 Resolution8 reads:
WHEREFORE, the parties are hereby directed to submit their
respective MEMORANDA within ten (10) days from notice. Until
further orders, the Court hereby SUSPENDS the effect of the
second paragraph of the dispositive portion of the Court’s July 17,
2012 Decision, which reads: "This disposition is immediately
executory."9
Pursuant to the same resolution, petitioner and respondents filed
their respective memoranda.10
Brief Statement of the Antecedents
In this disposition, it bears reiterating that from the birth of the
Philippine Republic, the exercise of appointing members of the
Judiciary has always been the exclusive prerogative of the
executive and legislative branches of the government. Like their
progenitor of American origins, both the Malolos
Constitution11 and the 1935 Constitution12vested the power to
appoint the members of the Judiciary in the President, subject to
confirmation by the Commission on Appointments. It was during
these times that the country became witness to the deplorable
practice of aspirants seeking confirmation of their appointment in
the Judiciary to ingratiate themselves with the members of the
legislative body.13
Then, under the 1973 Constitution,14 with the fusion of the
executive and legislative powers in one body, the appointment of
judges and justices ceased to be subject of scrutiny by another
body. The power became exclusive and absolute to the Executive,
subject only to the condition that the appointees must have all the
qualifications and none of the disqualifications.
Prompted by the clamor to rid the process of appointments to the
Judiciary of the evils of political pressure and partisan
activities,15 the members of the Constitutional Commission saw it
wise to create a separate, competent and independent body to
recommend nominees to the President.
Thus, it conceived of a body, representative of all the stakeholders
in the judicial appointment process, and called it the Judicial and
Bar Council (JBC). The Framers carefully worded Section 8, Article
VIII of the 1987 Constitution in this wise:
Section 8. (1) A Judicial and Bar Council is hereby created under the
supervision of the Supreme Court composed of the Chief Justice as
ex officio Chairman, the Secretary of Justice, and a representative
of the Congress as ex officio Members, a representative of the
Integrated Bar, a professor of law, a retired Member of the
Supreme Court, and a representative of the private sector.
From the moment of the creation of the JBC, Congress designated
one (1) representative to sit in the JBC to act as one of the ex-officio
members.16 Pursuant to the constitutional provision that Congress
is entitled to one (1) representative, each House sent a
representative to the JBC, not together, but alternately or by
rotation.
In 1994, the seven-member composition of the JBC was
substantially altered.1âwphi1 An eighth member was added to the
JBC as the two (2) representatives from Congress began sitting
simultaneously in the JBC, with each having one-half (1/2) of a
vote.17
In 2001, the JBC En Banc decided to allow the representatives from
the Senate and the House of Representatives one full vote each.18 It
has been the situation since then.
Grounds relied upon by Respondents
Through the subject motion, respondents pray that the Court
reconsider its decision and dismiss the petition on the following
grounds: 1] that allowing only one representative from Congress in
the JBC would lead to absurdity considering its bicameral nature;
2] that the failure of the Framers to make the proper adjustment
when there was a shift from unilateralism to bicameralism was a
plain oversight; 3] that two representatives from Congress would
not subvert the intention of the Framers to insulate the JBC from
political partisanship; and 4] that the rationale of the Court in
declaring a seven-member composition would provide a solution
should there be a stalemate is not exactly correct.
While the Court may find some sense in the reasoning in
amplification of the third and fourth grounds listed by respondents,
still, it finds itself unable to reverse the assailed decision on the
principal issues covered by the first and second grounds for lack of
merit. Significantly, the conclusion arrived at, with respect to the
first and second grounds, carries greater bearing in the final
resolution of this case.
As these two issues are interrelated, the Court shall discuss them
jointly.
Ruling of the Court
The Constitution evinces the direct action of the Filipino people by
which the fundamental powers of government are established,
limited and defined and by which those powers are distributed
among the several departments for their safe and useful exercise
for the benefit of the body politic.19 The Framers reposed their
wisdom and vision on one suprema lex to be the ultimate
expression of the principles and the framework upon which
government and society were to operate. Thus, in the
interpretation of the constitutional provisions, the Court firmly
relies on the basic postulate that the Framers mean what they say.
The language used in the Constitution must be taken to have been
deliberately chosen for a definite purpose. Every word employed in
the Constitution must be interpreted to exude its deliberate intent
which must be maintained inviolate against disobedience and
defiance. What the Constitution clearly says, according to its text,
compels acceptance and bars modification even by the branch
tasked to interpret it.
For this reason, the Court cannot accede to the argument of plain
oversight in order to justify constitutional construction. As stated
in the July 17, 2012 Decision, in opting to use the singular letter "a"
to describe "representative of Congress," the Filipino people
through the Framers intended that Congress be entitled to only
one (1) seat in the JBC. Had the intention been otherwise, the
Constitution could have, in no uncertain terms, so provided, as can
be read in its other provisions.
A reading of the 1987 Constitution would reveal that several
provisions were indeed adjusted as to be in tune with the shift to
bicameralism. One example is Section 4, Article VII, which provides
that a tie in the presidential election shall be broken "by a majority
of all the Members of both Houses of the Congress, voting
separately."20 Another is Section 8 thereof which requires the
nominee to replace the Vice-President to be confirmed "by a
majority of all the Members of both Houses of the Congress, voting
separately."21 Similarly, under Section 18, the proclamation of
martial law or the suspension of the privilege of the writ of habeas
corpus may be revoked or continued by the Congress, voting
separately, by a vote of at least a majority of all its Members."22 In
all these provisions, the bicameral nature of Congress was
recognized and, clearly, the corresponding adjustments were made
as to how a matter would be handled and voted upon by its two
Houses.
Thus, to say that the Framers simply failed to adjust Section 8,
Article VIII, by sheer inadvertence, to their decision to shift to a
bicameral form of the legislature, is not persuasive enough.
Respondents cannot just lean on plain oversight to justify a
conclusion favorable to them. It is very clear that the Framers were
not keen on adjusting the provision on congressional
representation in the JBC because it was not in the exercise of its
primary function – to legislate. JBC was created to support the
executive power to appoint, and Congress, as one whole body, was
merely assigned a contributory non-legislative function.
The underlying reason for such a limited participation can easily be
discerned. Congress has two (2) Houses. The need to recognize the
existence and the role of each House is essential considering that
the Constitution employs precise language in laying down the
functions which particular House plays, regardless of whether the
two Houses consummate an official act by voting jointly or
separately. Whether in the exercise of its legislative23 or its non-
legislative functions such as inter alia, the power of
appropriation,24 the declaration of an existence of a state of
war,25 canvassing of electoral returns for the President and Vice-
President,26 and impeachment,27 the dichotomy of each House
must be acknowledged and recognized considering the interplay
between these two Houses. In all these instances, each House is
constitutionally granted with powers and functions peculiar to its
nature and with keen consideration to 1) its relationship with the
other chamber; and 2) in consonance with the principle of checks
and balances, as to the other branches of government.
In checkered contrast, there is essentially no interaction between
the two Houses in their participation in the JBC. No mechanism is
required between the Senate and the House of Representatives in
the screening and nomination of judicial officers. Rather, in the
creation of the JBC, the Framers arrived at a unique system by
adding to the four (4) regular members, three (3) representatives
from the major branches of government - the Chief Justice as ex-
officio Chairman (representing the Judicial Department), the
Secretary of Justice (representing the Executive Department), and
a representative of the Congress (representing the Legislative
Department). The total is seven (7), not eight. In so providing, the
Framers simply gave recognition to the Legislature, not because it
was in the interest of a certain constituency, but in reverence to it
as a major branch of government.
On this score, a Member of Congress, Hon. Simeon A. Datumanong,
from the Second District of Maguindanao, submitted his well-
considered position28 to then Chief Justice Reynato S. Puno:
I humbly reiterate my position that there should be only one
representative of Congress in the JBC in accordance with Article
VIII, Section 8 (1) of the 1987 Constitution x x x.
The aforesaid provision is clear and unambiguous and does not
need any further interpretation. Perhaps, it is apt to mention that
the oft-repeated doctrine that "construction and interpretation
come only after it has been demonstrated that application is
impossible or inadequate without them."
Further, to allow Congress to have two representatives in the
Council, with one vote each, is to negate the principle of equality
among the three branches of government which is enshrined in the
Constitution.
In view of the foregoing, I vote for the proposition that the Council
should adopt the rule of single representation of Congress in the
JBC in order to respect and give the right meaning to the above-
quoted provision of the Constitution. (Emphases and underscoring
supplied)
On March 14, 2007, then Associate Justice Leonardo A.
Quisumbing, also a JBC Consultant, submitted to the Chief Justice
and ex-officio JBC Chairman his opinion,29 which reads:
8. Two things can be gleaned from the excerpts and citations
above: the creation of the JBC is intended to curtail the influence
of politics in Congress in the appointment of judges, and the
understanding is that seven (7) persons will compose the JBC. As
such, the interpretation of two votes for Congress runs counter to
the intendment of the framers. Such interpretation actually gives
Congress more influence in the appointment of judges. Also, two
votes for Congress would increase the number of JBC members to
eight, which could lead to voting deadlock by reason of even-
numbered membership, and a clear violation of 7 enumerated
members in the Constitution. (Emphases and underscoring
supplied)
In an undated position paper,30 then Secretary of Justice Agnes VST
Devanadera opined:
As can be gleaned from the above constitutional provision, the JBC
is composed of seven (7) representatives coming from different
sectors. From the enumeration it is patent that each category of
members pertained to a single individual only. Thus, while we do
not lose sight of the bicameral nature of our legislative department,
it is beyond dispute that Art. VIII, Section 8 (1) of the 1987
Constitution is explicit and specific that "Congress" shall have only
"xxx a representative." Thus, two (2) representatives from
Congress would increase the number of JBC members to eight (8),
a number beyond what the Constitution has contemplated.
(Emphases and underscoring supplied)
In this regard, the scholarly dissection on the matter by retired
Justice Consuelo Ynares-Santiago, a former JBC consultant, is worth
reiterating.31 Thus:
A perusal of the records of the Constitutional Commission reveals
that the composition of the JBC reflects the Commission’s desire
"to have in the Council a representation for the major elements of
the community." xxx The ex-officio members of the Council consist
of representatives from the three main branches of government
while the regular members are composed of various stakeholders
in the judiciary. The unmistakeable tenor of Article VIII, Section 8(1)
was to treat each ex-officio member as representing one co-equal
branch of government. xxx Thus, the JBC was designed to have
seven voting members with the three ex-officio members having
equal say in the choice of judicial nominees.
xxx
No parallelism can be drawn between the representative of
Congress in the JBC and the exercise by Congress of its legislative
powers under Article VI and constituent powers under Article XVII
of the Constitution. Congress, in relation to the executive and
judicial branches of government, is constitutionally treated as
another co-equal branch in the matter of its representative in the
JBC. On the other hand, the exercise of legislative and constituent
powers requires the Senate and the House of Representatives to
coordinate and act as distinct bodies in furtherance of Congress’
role under our constitutional scheme. While the latter justifies and,
in fact, necessitates the separateness of the two Houses of
Congress as they relate inter se, no such dichotomy need be made
when Congress interacts with the other two co-equal branches of
government.
It is more in keeping with the co-equal nature of the three
governmental branches to assign the same weight to
considerations that any of its representatives may have regarding
aspiring nominees to the judiciary. The representatives of the
Senate and the House of Representatives act as such for one
branch and should not have any more quantitative influence as the
other branches in the exercise of prerogatives evenly bestowed
upon the three. Sound reason and principle of equality among the
three branches support this conclusion. [Emphases and
underscoring supplied]
The argument that a senator cannot represent a member of the
House of Representatives in the JBC and vice-versa is, thus,
misplaced. In the JBC, any member of Congress, whether from the
Senate or the House of Representatives, is constitutionally
empowered to represent the entire Congress. It may be a
constricted constitutional authority, but it is not an absurdity.
From this score stems the conclusion that the lone representative
of Congress is entitled to one full vote. This pronouncement
effectively disallows the scheme of splitting the said vote into half
(1/2), between two representatives of Congress. Not only can this
unsanctioned practice cause disorder in the voting process, it is
clearly against the essence of what the Constitution authorized.
After all, basic and reasonable is the rule that what cannot be
legally done directly cannot be done indirectly. To permit or
tolerate the splitting of one vote into two or more is clearly a
constitutional circumvention that cannot be countenanced by the
Court. Succinctly put, when the Constitution envisioned one
member of Congress sitting in the JBC, it is sensible to presume that
this representation carries with him one full vote.
It is also an error for respondents to argue that the President, in
effect, has more influence over the JBC simply because all of the
regular members of the JBC are his appointees. The principle of
checks and balances is still safeguarded because the appointment
of all the regular members of the JBC is subject to a stringent
process of confirmation by the Commission on Appointments,
which is composed of members of Congress.
Respondents’ contention that the current irregular composition of
the JBC should be accepted, simply because it was only questioned
for the first time through the present action, deserves scant
consideration. Well-settled is the rule that acts done in violation of
the Constitution no matter how frequent, usual or notorious
cannot develop or gain acceptance under the doctrine of estoppel
or laches, because once an act is considered as an infringement of
the Constitution it is void from the very beginning and cannot be
the source of any power or authority.
It would not be amiss to point out, however, that as a general rule,
an unconstitutional act is not a law; it confers no rights; it imposes
no duties; it affords no protection; it creates no office; it is
inoperative as if it has not been passed at all. This rule, however, is
not absolute. Under the doctrine of operative facts, actions
previous to the declaration of unconstitutionality are legally
recognized. They are not nullified. This is essential in the interest of
fair play. To reiterate the doctrine enunciated in Planters Products,
Inc. v. Fertiphil Corporation:32
The doctrine of operative fact, as an exception to the general rule,
only applies as a matter of equity and fair play. It nullifies the
effects of an unconstitutional law by recognizing that the existence
of a statute prior to a determination of unconstitutionality is an
operative fact and may have consequences which cannot always be
ignored. The past cannot always be erased by a new judicial
declaration. The doctrine is applicable when a declaration of
unconstitutionality will impose an undue burden on those who
have relied on the invalid law. Thus, it was applied to a criminal
case when a declaration of unconstitutionality would put the
accused in double jeopardy or would put in limbo the acts done by
a municipality in reliance upon a law creating it.33
Under the circumstances, the Court finds the exception applicable
in this case and holds that notwithstanding its finding of
unconstitutionality in the current composition of the JBC, all its
prior official actions are nonetheless valid.
Considering that the Court is duty bound to protect the
Constitution which was ratified by the direct action of the Filipino
people, it cannot correct what respondents perceive as a mistake
in its mandate. Neither can the Court, in the exercise of its power
to interpret the spirit of the Constitution, read into the law
something that is contrary to its express provisions and justify the
same as correcting a perceived inadvertence. To do so would
otherwise sanction the Court action of making amendment to the
Constitution through a judicial pronouncement.
In other words, the Court cannot supply the legislative omission.
According to the rule of casus omissus "a case omitted is to be held
as intentionally omitted."34 "The principle proceeds from a
reasonable certainty that a particular person, object or thing has
been omitted from a legislative enumeration."35 Pursuant to this,
"the Court cannot under its power of interpretation supply the
omission even though the omission may have resulted from
inadvertence or because the case in question was not foreseen or
contemplated."36 "The Court cannot supply what it thinks the
legislature would have supplied had its attention been called to the
omission, as that would be judicial legislation."37
Stated differently, the Court has no power to add another member
by judicial construction.
The call for judicial activism fails to stir the sensibilities of the Court
tasked to guard the Constitution against usurpation. The Court
remains steadfast in confining its powers in the sphere granted by
the Constitution itself. Judicial activism should never be allowed to
become judicial exuberance.38 In cases like this, no amount of
practical logic or convenience can convince the Court to perform
either an excision or an insertion that will change the manifest
intent of the Framers. To broaden the scope of congressional
representation in the JBC is tantamount to the inclusion of a subject
matter which was not included in the provision as enacted. True to
its constitutional mandate, the Court cannot craft and tailor
constitutional provisions in order to accommodate all of situations
no matter how ideal or reasonable the proposed solution may
sound. To the exercise of this intrusion, the Court declines.
WHEREFORE, the Motion for Reconsideration filed by respondents
is hereby DENIED.
The suspension of the effects of the second paragraph of the
dispositive portion of the July 17, 2012 Decision of the Court, which
reads, "This disposition is immediately executory," is hereby
LIFTED.
SO ORDERED.
G.R. No. 181704 December 6, 2011
BUREAU OF CUSTOMS EMPLOYEES ASSOCIATION (BOCEA),
Petitioner,
vs.
HON. MARGARITO B. TEVES, Respondents.
On January 25, 2005, former President Gloria Macapagal-
Arroyo signed into law R.A. No. 9335 which took effect on February
11, 2005.
In Abakada Guro Party List v. Purisima4 (Abakada), we said of
R.A. No. 9335:
RA [No.] 9335 was enacted to optimize the revenue-
generation capability and collection of the Bureau of Internal
Revenue (BIR) and the Bureau of Customs (BOC). The law intends
to encourage BIR and BOC officials and employees to exceed their
revenue targets by providing a system of rewards and sanctions
through the creation of a Rewards and Incentives Fund (Fund) and
a Revenue Performance Evaluation Board (Board). It covers all
officials and employees of the BIR and the BOC with at least six
months of service, regardless of employment status.
The Fund is sourced from the collection of the BIR and the BOC
in excess of their revenue targets for the year, as determined by
the Development Budget and Coordinating Committee (DBCC). Any
incentive or reward is taken from the fund and allocated to the BIR
and the BOC in proportion to their contribution in the excess
collection of the targeted amount of tax revenue.
The Boards in the BIR and the BOC are composed of the
Secretary of the Department of Finance (DOF) or his/her
Undersecretary, the Secretary of the Department of Budget and
Management (DBM) or his/her Undersecretary, the Director
General of the National Economic Development Authority (NEDA)
or his/her Deputy Director General, the Commissioners of the BIR
and the BOC or their Deputy Commissioners, two representatives
from the rank-and-file employees and a representative from the
officials nominated by their recognized organization.
Each Board has the duty to (1) prescribe the rules and
guidelines for the allocation, distribution and release of the Fund;
(2) set criteria and procedures for removing from the service
officials and employees whose revenue collection falls short of the
target; (3) terminate personnel in accordance with the criteria
adopted by the Board; (4) prescribe a system for performance
evaluation; (5) perform other functions, including the issuance of
rules and regulations and (6) submit an annual report to Congress.
 The DOF, DBM, NEDA, BIR, BOC and the Civil Service
Commission (CSC) were tasked to promulgate and issue the
implementing rules and regulations of RA [No.] 9335, to be
approved by a Joint Congressional Oversight Committee created
for such purpose.5
The Joint Congressional Oversight Committee approved the
assailed IRR on May 22, 2006. Subsequently, the IRR was published
on May 30, 2006 in two newspapers of general circulation, the
Philippine Star and the Manila Standard, and became effective
fifteen (15) days later.6
Contending that the enactment and implementation of R.A.
No. 9335 are tainted with constitutional infirmities in violation of
the fundamental rights of its members, petitioner Bureau of
Customs Employees Association (BOCEA), an association of rank-
and-file employees of the Bureau of Customs (BOC), duly registered
with the Department of Labor and Employment (DOLE) and the
Civil Service Commission (CSC), and represented by its National
President, Mr. Romulo A. Pagulayan (Pagulayan), directly filed the
present petition before this Court against respondents Margarito
B. Teves, in his capacity as Secretary of the Department of Finance
(DOF), Commissioner Napoleon L. Morales (Commissioner
Morales), in his capacity as BOC Commissioner, and Lilian B. Hefti,
in her capacity as Commissioner of the Bureau of Internal Revenue
(BIR). In its petition, BOCEA made the following averments:
Sometime in 2008, high-ranking officials of the BOC pursuant
to the mandate of R.A. No. 9335 and its IRR, and in order to comply
with the stringent deadlines thereof, started to disseminate
Collection District Performance Contracts7 (Performance
Contracts) for the lower ranking officials and rank-and-file
employees to sign. The Performance Contract pertinently
provided:
xxxx
WHEREAS, pursuant to the provisions of Sec. 25 (b) of the
Implementing Rules and Regulations (IRR) of the Attrition Act of
2005, that provides for the setting of criteria and procedures for
removing from the service Officials and Employees whose revenue
collection fall short of the target in accordance with Section 7 of
Republic Act 9335.
xxxx
NOW, THEREFORE, for and in consideration of the foregoing
premises, parties unto this Agreement hereby agree and so agreed
to perform the following:
xxxx
2. The "Section 2, PA/PE" hereby accepts the allocated
Revenue Collection Target and further accepts/commits to meet
the said target under the following conditions:
a.) That he/she will meet the allocated Revenue Collection
Target and thereby undertakes and binds himself/herself that in
the event the revenue collection falls short of the target with due
consideration of all relevant factors affecting the level of collection
as provided in the rules and regulations promulgated under the Act
and its IRR, he/she will voluntarily submit to the provisions of Sec.
25 (b) of the IRR and Sec. 7 of the Act; and
b.) That he/she will cascade and/or allocate to respective
Appraisers/Examiners or Employees under his/her section the said
Revenue Collection Target and require them to execute a
Performance Contract, and direct them to accept their individual
target. The Performance Contract executed by the respective
Examiners/Appraisers/Employees shall be submitted to the Office
of the Commissioner through the LAIC on or before March 31,
2008.
x x x x8
BOCEA opined that the revenue target was impossible to meet
due to the Government’s own policies on reduced tariff rates and
tax breaks to big businesses, the occurrence of natural calamities
and because of other economic factors. BOCEA claimed that some
BOC employees were coerced and forced to sign the Performance
Contract. The majority of them, however, did not sign. In particular,
officers of BOCEA were summoned and required to sign the
Performance Contracts but they also refused. To ease the brewing
tension, BOCEA claimed that its officers sent letters, and sought
several dialogues with BOC officials but the latter refused to heed
them.
In addition, BOCEA alleged that Commissioner Morales
exerted heavy pressure on the District Collectors, Chiefs of Formal
Entry Divisions, Principal Customs Appraisers and Principal
Customs Examiners of the BOC during command conferences to
make them sign their Performance Contracts. Likewise, BOC
Deputy Commissioner Reynaldo Umali (Deputy Commissioner
Umali) individually spoke to said personnel to convince them to
sign said contracts. Said personnel were threatened that if they do
not sign their respective Performance Contracts, they would face
possible reassignment, reshuffling, or worse, be placed on floating
status. Thus, all the District Collectors, except a certain Atty. Carlos
So of the Collection District III of the Ninoy Aquino International
Airport (NAIA), signed the Performance Contracts.
BOCEA further claimed that Pagulayan was constantly
harassed and threatened with lawsuits. Pagulayan approached
Deputy Commissioner Umali to ask the BOC officials to stop all
forms of harassment, but the latter merely said that he would look
into the matter. On February 5, 2008, BOCEA through counsel
wrote the Revenue Performance Evaluation Board (Board) to desist
from implementing R.A. No. 9335 and its IRR and from requiring
rank-and-file employees of the BOC and BIR to sign Performance
Contracts.9 In his letter-reply10 dated February 12, 2008, Deputy
Commissioner Umali denied having coerced any BOC employee to
sign a Performance Contract. He also defended the BOC, invoking
its mandate of merely implementing the law. Finally, Pagulayan
and BOCEA’s counsel, on separate occasions, requested for a
certified true copy of the Performance Contract from Deputy
Commissioner Umali but the latter failed to furnish them a copy.11
This petition was filed directly with this Court on March 3,
2008. BOCEA asserted that in view of the unconstitutionality of R.A.
No. 9335 and its IRR, and their adverse effects on the constitutional
rights of BOC officials and employees, direct resort to this Court is
justified. BOCEA argued, among others, that its members and other
BOC employees are in great danger of losing their jobs should they
fail to meet the required quota provided under the law, in clear
violation of their constitutional right to security of tenure, and at
their and their respective families’ prejudice.
In their Comment,12 respondents, through the Office of the
Solicitor General (OSG), countered that R.A. No. 9335 and its IRR do
not violate the right to due process and right to security of tenure
of BIR and BOC employees. The OSG stressed that the guarantee of
security of tenure under the 1987 Constitution is not a guarantee
of perpetual employment. R.A. No. 9335 and its IRR provided a
reasonable and valid ground for the dismissal of an employee
which is germane to the purpose of the law. Likewise, R.A. No. 9335
and its IRR provided that an employee may only be separated from
the service upon compliance with substantive and procedural due
process. The OSG added that R.A. No. 9335 and its IRR must enjoy
the presumption of constitutionality.
In itsReply,13 BOCEA claimed that R.A. No. 9335 employs
means that are unreasonable to achieve its stated objectives; that
the law is unduly oppressive of BIR and BOC employees as it shifts
the extreme burden upon their shoulders when the Government
itself has adopted measures that make collection difficult such as
reduced tariff rates to almost zero percent and tax exemption of
big businesses; and that the law is discriminatory of BIR and BOC
employees. BOCEA manifested that only the high-ranking officials
of the BOC benefited largely from the reward system under R.A.
No. 9335 despite the fact that they were not the ones directly
toiling to collect revenue. Moreover, despite the BOCEA’s
numerous requests,14 BOC continually refused to provide BOCEA
the Expenditure Plan on how such reward was distributed.
Since BOCEA was seeking similar reliefs as that of the
petitioners in Abakada Guro Party List v. Purisima, BOCEA filed a
Motion to Consolidate15 the present case with Abakada on April 16,
2008. However, pending action on said motion, the Court rendered
its decision in Abakada on August 14, 2008. Thus, the consolidation
of this case with Abakada was rendered no longer possible.16
In Abakada, this Court, through then Associate Justice, now
Chief Justice Renato C. Corona, declared Section 1217of R.A. No.
9335 creating a Joint Congressional Oversight Committee to
approve the IRR as unconstitutional and violative of the principle of
separation of powers. However, the constitutionality of the
remaining provisions of R.A. No. 9335 was upheld pursuant to
Section 1318 of R.A. No. 9335. The Court also held that until the
contrary is shown, the IRR of R.A. No. 9335 is presumed valid and
effective even without the approval of the Joint Congressional
Oversight Committee.19
Notwithstanding our ruling in Abakada, both parties complied
with our Resolution20 dated February 10, 2009, requiring them to
submit their respective Memoranda.
The Issues
BOCEA raises the following issues:
I.
WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.]
9335, AND ITS IMPLEMENTING RULES AND REGULATIONS ARE
UNCONSTITUTIONAL AS THESE VIOLATE THE RIGHT TO DUE
PROCESS OF THE COVERED BIR AND BOC OFFICIALS AND
EMPLOYEES[;]
II.
WHETHER OR NOT THE ATTRITION LAW, REPUBLIC ACT [NO.]
9335, AND ITS IMPLEMENTING RULES AND REGULATIONS ARE
UNCONSTITUTIONAL AS THESE VIOLATE THE RIGHT OF BIR AND
BOC OFFICIALS AND EMPLOYEES TO THE EQUAL PROTECTION OF
THE LAWS[;]
III.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS
IMPLEMENTING RULES AND REGULATIONS VIOLATE THE RIGHT TO
SECURITY OF TENURE OF BIR AND BOC OFFICIALS AND EMPLOYEES
AS ENSHRINED UNDER SECTION 2 (3), ARTICLE IX (B) OF THE
CONSTITUTION[;]
IV.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 AND ITS
IMPLEMENTING RULES AND REGULATIONS ARE
UNCONSTITUTIONAL AS THEY CONSTITUTE UNDUE DELEGATION
OF LEGISLATIVE POWERS TO THE REVENUE PERFORMANCE
EVALUATION BOARD IN VIOLATION OF THE PRINCIPLE OF
SEPARATION OF POWERS ENSHRINED IN THE CONSTITUTION[;
AND]
V.
WHETHER OR NOT REPUBLIC ACT [NO.] 9335 IS A BILL OF
ATTAINDER AND HENCE[,] UNCONSTITUTIONAL BECAUSE IT
INFLICTS PUNISHMENT THROUGH LEGISLATIVE FIAT UPON A
PARTICULAR GROUP OR CLASS OF OFFICIALS AND EMPLOYEES
WITHOUT TRIAL.21
BOCEA manifested that while waiting for the Court to give due
course to its petition, events unfolded showing the patent
unconstitutionality of R.A. No. 9335. It narrated that during the first
year of the implementation of R.A. No. 9335, BOC employees
exerted commendable efforts to attain their revenue target of
₱196 billion which they surpassed by as much as ₱2 billion for that
year alone. However, this was attained only because oil companies
made advance tax payments to BOC. Moreover, BOC employees
were given their "reward" for surpassing said target only in 2008,
the distribution of which they described as unjust, unfair, dubious
and fraudulent because only top officials of BOC got the huge sum
of reward while the employees, who did the hard task of collecting,
received a mere pittance of around ₱8,500.00. In the same manner,
the Bonds Division of BOC-NAIA collected 400+% of its designated
target but the higher management gave out to the employees a
measly sum of ₱8,500.00 while the top level officials partook of
millions of the excess collections. BOCEA relies on a piece of
information revealed by a newspaper showing the list of BOC
officials who apparently earned huge amounts of money by way of
reward.22 It claims that the recipients thereof included lawyers,
support personnel and other employees, including a dentist, who
performed no collection functions at all. These alleged anomalous
selection, distribution and allocation of rewards was due to the
failure of R.A. No. 9335 to set out clear guidelines.23
In addition, BOCEA avers that the Board initiated the first few
cases of attrition for the Fiscal Year 2007 by subjecting five BOC
officials from the Port of Manila to attrition despite the fact that
the Port of Manila substantially complied with the provisions of
R.A. No. 9335. It is thus submitted that the selection of these
officials for attrition without proper investigation was nothing less
than arbitrary. Further, the legislative and executive departments’
promulgation of issuances and the Government’s accession to
regional trade agreements have caused a significant diminution of
the tariff rates, thus, decreasing over-all collection. These
unrealistic settings of revenue targets seriously affect BIR and BOC
employees tasked with the burden of collection, and worse,
subjected them to attrition.24
BOCEA assails the constitutionality of R.A. No. 9335 and its IRR
on the following grounds:
1. R.A. No. 9335 and its IRR violate the BIR and BOC employees’
right to due process because the termination of employees who
had not attained their revenue targets for the year is peremptory
and done without any form of hearing to allow said employees to
ventilate their side. Moreover, R.A. No. 9335 and its IRR do not
comply with the requirements under CSC rules and regulations as
the dismissal in this case is immediately executory. Such
immediately executory nature of the Board’s decision negates the
remedies available to an employee as provided under the CSC
rules.
2. R.A. No. 9335 and its IRR violate the BIR and BOC employees’
right to equal protection of the law because R.A. No. 9335 and its
IRR unduly discriminates against BIR and BOC employees as
compared to employees of other revenue generating government
agencies like the Philippine Amusement and Gaming Corporation,
Department of Transportation and Communication, the Air
Transportation Office, the Land Transportation Office, and the
Philippine Charity Sweepstakes Office, among others, which are
not subject to attrition.
3. R.A. No. 9335 and its IRR violate the BIR and BOC employees’
right to security of tenure because R.A. No. 9335 and its IRR
effectively removed remedies provided in the ordinary course of
administrative procedure afforded to government employees. The
law likewise created another ground for dismissal, i.e., non-
attainment of revenue collection target, which is not provided
under CSC rules and which is, by its nature, unpredictable and
therefore arbitrary and unreasonable.
4. R.A. No. 9335 and its IRR violate the 1987
Constitution because Congress granted to the Revenue
Performance Evaluation Board (Board) the unbridled discretion of
formulating the criteria for termination, the manner of allocating
targets, the distribution of rewards and the determination of
relevant factors affecting the targets of collection, which is
tantamount to undue delegation of legislative power.
5. R.A. No. 9335 is a bill of attainder because it inflicts
punishment upon a particular group or class of officials and
employees without trial. This is evident from the fact that the law
confers upon the Board the power to impose the penalty of
removal upon employees who do not meet their revenue targets;
that the same is without the benefit of hearing; and that the
removal from service is immediately executory. Lastly, it disregards
the presumption of regularity in the performance of the official
functions of a public officer.25
On the other hand, respondents through the OSG stress that
except for Section 12 of R.A. No. 9335, R.A. No. 9335 and its IRR are
constitutional, as per our ruling in Abakada. Nevertheless, the OSG
argues that the classification of BIR and BOC employees as public
officers under R.A. No. 9335 is based on a valid and substantial
distinction since the revenue generated by the BIR and BOC is
essentially in the form of taxes, which is the lifeblood of the State,
while the revenue produced by other agencies is merely incidental
or secondary to their governmental functions; that in view of their
mandate, and for purposes of tax collection, the BIR and BOC are
sui generis; that R.A. No. 9335 complies with the "completeness"
and "sufficient standard" tests for the permissive delegation of
legislative power to the Board; that the Board exercises its
delegated power consistent with the policy laid down in the law,
that is, to optimize the revenue generation capability and collection
of the BIR and the BOC; that parameters were set in order that the
Board may identify the officials and employees subject to attrition,
and the proper procedure for their removal in case they fail to meet
the targets set in the Performance Contract were provided; and
that the rights of BIR and BOC employees to due process of law and
security of tenure are duly accorded by R.A. No. 9335. The OSG
likewise maintains that there was no encroachment of judicial
power in the enactment of R.A. No. 9335 amounting to a bill of
attainder since R.A. No. 9335 and its IRR merely defined the offense
and provided for the penalty that may be imposed. Finally, the OSG
reiterates that the separation from the service of any BIR or BOC
employee under R.A. No. 9335 and its IRR shall be done only upon
due consideration of all relevant factors affecting the level of
collection, subject to Civil Service laws, rules and regulations, and
in compliance with substantive and procedural due process. The
OSG opines that the Performance Contract, far from violating the
BIR and BOC employees’ right to due process, actually serves as a
notice of the revenue target they have to meet and the possible
consequences of failing to meet the same. More, there is nothing
in the law which prevents the aggrieved party from appealing the
unfavorable decision of dismissal.26
In essence, the issues for our resolution are:
1. Whether there is undue delegation of legislative power to
the Board;
2. Whether R.A. No. 9335 and its IRR violate the rights of
BOCEA’s members to: (a) equal protection of laws, (b) security of
tenure and (c) due process; and
3. Whether R.A. No. 9335 is a bill of attainder.
Our Ruling
Prefatorily, we note that it is clear, and in fact uncontroverted,
that BOCEA has locus standi. BOCEA impugns the constitutionality
of R.A. No. 9335 and its IRR because its members, who are rank-
and-file employees of the BOC, are actually covered by the law and
its IRR. BOCEA’s members have a personal and substantial interest
in the case, such that they have sustained or will sustain, direct
injury as a result of the enforcement of R.A. No. 9335 and its IRR.27
However, we find no merit in the petition and perforce dismiss
the same.
It must be noted that this is not the first time the
constitutionality of R.A. No. 9335 and its IRR are being challenged.
The Court already settled the majority of the same issues raised by
BOCEA in our decision in Abakada, which attained finality on
September 17, 2008. As such, our ruling therein is worthy of
reiteration in this case.
We resolve the first issue in the negative.
The principle of separation of powers ordains that each of the
three great branches of government has exclusive cognizance of
and is supreme in matters falling within its own constitutionally
allocated sphere.28 Necessarily imbedded in this doctrine is the
principle of non-delegation of powers, as expressed in the Latin
maxim potestas delegata non delegari potest, which means "what
has been delegated, cannot be delegated." This doctrine is based
on the ethical principle that such delegated power constitutes not
only a right but a duty to be performed by the delegate through the
instrumentality of his own judgment and not through the
intervening mind of another.29However, this principle of non-
delegation of powers admits of numerous exceptions,30 one of
which is the delegation of legislative power to various specialized
administrative agencies like the Board in this case.
The rationale for the aforementioned exception was clearly
explained in our ruling in Gerochi v. Department of Energy,31 to wit:
 In the face of the increasing complexity of modern life,
delegation of legislative power to various specialized
administrative agencies is allowed as an exception to this principle.
Given the volume and variety of interactions in today’s society, it is
doubtful if the legislature can promulgate laws that will deal
adequately with and respond promptly to the minutiae of everyday
life. Hence, the need to delegate to administrative bodies — the
principal agencies tasked to execute laws in their specialized fields
— the authority to promulgate rules and regulations to implement
a given statute and effectuate its policies. All that is required for
the valid exercise of this power of subordinate legislation is that the
regulation be germane to the objects and purposes of the law and
that the regulation be not in contradiction to, but in conformity
with, the standards prescribed by the law. These requirements are
denominated as the completeness test and the sufficient standard
test.32
Thus, in Abakada, we held,
Two tests determine the validity of delegation of legislative
power: (1) the completeness test and (2) the sufficient standard
test. A law is complete when it sets forth therein the policy to be
executed, carried out or implemented by the delegate. It lays down
a sufficient standard when it provides adequate guidelines or
limitations in the law to map out the boundaries of the delegate’s
authority and prevent the delegation from running riot. To be
sufficient, the standard must specify the limits of the delegate’s
authority, announce the legislative policy and identify the
conditions under which it is to be implemented.
RA [No.] 9335 adequately states the policy and standards to
guide the President in fixing revenue targets and the implementing
agencies in carrying out the provisions of the law. Section 2 spells
out the policy of the law:
"SEC. 2. Declaration of Policy. — It is the policy of the State to
optimize the revenue-generation capability and collection of the
Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC)
by providing for a system of rewards and sanctions through the
creation of a Rewards and Incentives Fund and a Revenue
Performance Evaluation Board in the above agencies for the
purpose of encouraging their officials and employees to exceed
their revenue targets."
Section 4 "canalized within banks that keep it from
overflowing" the delegated power to the President to fix revenue
targets:
"SEC. 4. Rewards and Incentives Fund. — A Rewards and
Incentives Fund, hereinafter referred to as the Fund, is hereby
created, to be sourced from the collection of the BIR and the BOC
in excess of their respective revenue targets of the year, as
determined by the Development Budget and Coordinating
Committee (DBCC), in the following percentages:
The Fund shall be deemed automatically appropriated the year
immediately following the year when the revenue collection target
was exceeded and shall be released on the same fiscal year.
Revenue targets shall refer to the original estimated revenue
collection expected of the BIR and the BOC for a given fiscal year as
stated in the Budget of Expenditures and Sources of Financing
(BESF) submitted by the President to Congress. The BIR and the
BOC shall submit to the DBCC the distribution of the agencies’
revenue targets as allocated among its revenue districts in the case
of the BIR, and the collection districts in the case of the BOC.
 xxx xxx x x x"
Revenue targets are based on the original estimated revenue
collection expected respectively of the BIR and the BOC for a given
fiscal year as approved by the DBCC and stated in the BESF
submitted by the President to Congress. Thus, the determination
of revenue targets does not rest solely on the President as it also
undergoes the scrutiny of the DBCC.
On the other hand, Section 7 specifies the limits of the Board’s
authority and identifies the conditions under which officials and
employees whose revenue collection falls short of the target by at
least 7.5% may be removed from the service:
"SEC. 7. Powers and Functions of the Board. — The Board in
the agency shall have the following powers and functions:
xxx xxx xxx
(b) To set the criteria and procedures for removing from
service officials and employees whose revenue collection falls short
of the target by at least seven and a half percent (7.5%), with due
consideration of all relevant factors affecting the level of collection
as provided in the rules and regulations promulgated under this
Act, subject to civil service laws, rules and regulations and
compliance with substantive and procedural due process:
Provided, That the following exemptions shall apply:
1. Where the district or area of responsibility is newly-created,
not exceeding two years in operation, and has no historical record
of collection performance that can be used as basis for evaluation;
and
2. Where the revenue or customs official or employee is a
recent transferee in the middle of the period under consideration
unless the transfer was due to nonperformance of revenue targets
or potential nonperformance of revenue targets: Provided,
however, That when the district or area of responsibility covered
by revenue or customs officials or employees has suffered from
economic difficulties brought about by natural calamities or force
majeure or economic causes as may be determined by the Board,
termination shall be considered only after careful and proper
review by the Board.
(c) To terminate personnel in accordance with the criteria
adopted in the preceding paragraph: Provided, That such decision
shall be immediately executory: Provided, further, That the
application of the criteria for the separation of an official or
employee from service under this Act shall be without prejudice to
the application of other relevant laws on accountability of public
officers and employees, such as the Code of Conduct and Ethical
Standards of Public Officers and Employees and the Anti-Graft and
Corrupt Practices Act;
xxx xxx x x x"
At any rate, this Court has recognized the following as
sufficient standards: "public interest", "justice and equity", "public
convenience and welfare" and "simplicity, economy and welfare".
In this case, the declared policy of optimization of the revenue-
generation capability and collection of the BIR and the BOC is
infused with public interest.33
We could not but deduce that the completeness test and the
sufficient standard test were fully satisfied by R.A. No. 9335, as
evident from the aforementioned Sections 2, 4 and 7 thereof.
Moreover, Section 534 of R.A. No. 9335 also provides for the
incentives due to District Collection Offices. While it is apparent
that the last paragraph of Section 5 provides that "[t]he allocation,
distribution and release of the district reward shall likewise be
prescribed by the rules and regulations of the Revenue
Performance and Evaluation Board," Section 7 (a)35 of R.A. No.
9335 clearly mandates and sets the parameters for the Board by
providing that such rules and guidelines for the allocation,
distribution and release of the fund shall be in accordance with
Sections 4 and 5 of R.A. No. 9335. In sum, the Court finds that R.A.
No. 9335, read and appreciated in its entirety, is complete in all its
essential terms and conditions, and that it contains sufficient
standards as to negate BOCEA’s supposition of undue delegation of
legislative power to the Board.
Similarly, we resolve the second issue in the negative.
Equal protection simply provides that all persons or things
similarly situated should be treated in a similar manner, both as to
rights conferred and responsibilities imposed. The purpose of the
equal protection clause is to secure every person within a state’s
jurisdiction against intentional and arbitrary discrimination,
whether occasioned by the express terms of a statute or by its
improper execution through the state’s duly constituted
authorities. In other words, the concept of equal justice under the
law requires the state to govern impartially, and it may not draw
distinctions between individuals solely on differences that are
irrelevant to a legitimate governmental objective.361awphil
Thus, on the issue on equal protection of the laws, we held in
Abakada:
The equal protection clause recognizes a valid classification,
that is, a classification that has a reasonable foundation or rational
basis and not arbitrary. With respect to RA [No.] 9335, its
expressed public policy is the optimization of the revenue-
generation capability and collection of the BIR and the BOC. Since
the subject of the law is the revenue-generation capability and
collection of the BIR and the BOC, the incentives and/or sanctions
provided in the law should logically pertain to the said
agencies. Moreover, the law concerns only the BIR and the BOC
because they have the common distinct primary function of
generating revenues for the national government through the
collection of taxes, customs duties, fees and charges.
The BIR performs the following functions:
"Sec. 18. The Bureau of Internal Revenue. — The Bureau of
Internal Revenue, which shall be headed by and subject to the
supervision and control of the Commissioner of Internal Revenue,
who shall be appointed by the President upon the
recommendation of the Secretary [of the DOF], shall have the
following functions:
(1) Assess and collect all taxes, fees and charges and account
for all revenues collected;
(2) Exercise duly delegated police powers for the proper
performance of its functions and duties;
(3) Prevent and prosecute tax evasions and all other illegal
economic activities;
(4) Exercise supervision and control over its constituent and
subordinate units; and
(5) Perform such other functions as may be provided by law.
xxx xxx x x x"
On the other hand, the BOC has the following functions:
 "Sec. 23. The Bureau of Customs. — The Bureau of Customs
which shall be headed and subject to the management and control
of the Commissioner of Customs, who shall be appointed by the
President upon the recommendation of the Secretary [of the DOF]
and hereinafter referred to as Commissioner, shall have the
following functions:
(1) Collect custom duties, taxes and the corresponding fees,
charges and penalties;
(2) Account for all customs revenues collected;
(3) Exercise police authority for the enforcement of tariff and
customs laws;
(4) Prevent and suppress smuggling, pilferage and all other
economic frauds within all ports of entry;
(5) Supervise and control exports, imports, foreign mails and
the clearance of vessels and aircrafts in all ports of entry;
(6) Administer all legal requirements that are appropriate;
(7) Prevent and prosecute smuggling and other illegal activities
in all ports under its jurisdiction;
(8) Exercise supervision and control over its constituent units;
(9) Perform such other functions as may be provided by law.
xxx xxx x x x"
Both the BIR and the BOC are bureaus under the DOF. They
principally perform the special function of being the
instrumentalities through which the State exercises one of its great
inherent functions — taxation. Indubitably, such substantial
distinction is germane and intimately related to the purpose of the
law. Hence, the classification and treatment accorded to the BIR
and the BOC under RA [No.] 9335 fully satisfy the demands of equal
protection.37
As it was imperatively correlated to the issue on equal
protection, the issues on the security of tenure of affected BIR and
BOC officials and employees and their entitlement to due process
were also settled in Abakada:
Clearly, RA [No.] 9335 in no way violates the security of tenure
of officials and employees of the BIR and the BOC. The guarantee
of security of tenure only means that an employee cannot be
dismissed from the service for causes other than those provided by
law and only after due process is accorded the employee. In the
case of RA [No.] 9335, it lays down a reasonable yardstick for
removal (when the revenue collection falls short of the target by at
least 7.5%) with due consideration of all relevant factors affecting
the level of collection. This standard is analogous to inefficiency
and incompetence in the performance of official duties, a ground
for disciplinary action under civil service laws. The action for
removal is also subject to civil service laws, rules and regulations
and compliance with substantive and procedural due process.38
In addition, the essence of due process is simply an
opportunity to be heard, or as applied to administrative
proceedings, a fair and reasonable opportunity to explain one’s
side.39 BOCEA’s apprehension of deprivation of due process finds
its answer in Section 7 (b) and (c) of R.A. No. 9335.40 The concerned
BIR or BOC official or employee is not simply given a target revenue
collection and capriciously left without any quarter. R.A. No. 9335
and its IRR clearly give due consideration to all relevant
factors41 that may affect the level of collection. In the same
manner, exemptions42 were set, contravening BOCEA’s claim that
its members may be removed for unattained target collection even
due to causes which are beyond their control. Moreover, an
employee’s right to be heard is not at all prevented and his right to
appeal is not deprived of him.43 In fine, a BIR or BOC official or
employee in this case cannot be arbitrarily removed from the
service without according him his constitutional right to due
process. No less than R.A. No. 9335 in accordance with the 1987
Constitution guarantees this.
We have spoken, and these issues were finally laid to rest.
Now, the Court proceeds to resolve the last, but new issue raised
by BOCEA, that is, whether R.A. No. 9335 is a bill of attainder
proscribed under Section 22,44 Article III of the 1987 Constitution.
On this score, we hold that R.A. No. 9335 is not a bill of
attainder. A bill of attainder is a legislative act which inflicts
punishment on individuals or members of a particular group
without a judicial trial. Essential to a bill of attainder are a
specification of certain individuals or a group of individuals, the
imposition of a punishment, penal or otherwise, and the lack of
judicial trial.451avvphi1
In his Concurring Opinion in Tuason v. Register of Deeds,
Caloocan City,46 Justice Florentino P. Feliciano traces the roots of a
Bill of Attainder, to wit:
Bills of attainder are an ancient instrument of tyranny. In
England a few centuries back, Parliament would at times enact bills
or statutes which declared certain persons attainted and their
blood corrupted so that it lost all heritable quality (Ex Parte
Garland, 4 Wall. 333, 18 L.Ed. 366 [1867]). In more modern terms,
a bill of attainder is essentially a usurpation of judicial power by a
legislative body. It envisages and effects the imposition of a penalty
— the deprivation of life or liberty or property — not by the
ordinary processes of judicial trial, but by legislative fiat. While cast
in the form of special legislation, a bill of attainder (or bill of pains
and penalties, if it prescribed a penalty other than death) is in
intent and effect a penal judgment visited upon an identified
person or group of persons (and not upon the general community)
without a prior charge or demand, without notice and hearing,
without an opportunity to defend, without any of the civilized
forms and safeguards of the judicial process as we know it (People
v. Ferrer, 48 SCRA 382 [1972]; Cummings and Missouri, 4 Wall. 277,
18 L. Ed. 356 [1867]; U.S. v. Lovett, 328, U.S. 303, 90 L.Ed. 1252
[1945]; U.S. v. Brown, 381 U.S. 437, 14 L.Ed. 2d. 484 [1965]. Such is
the archetypal bill of attainder wielded as a means of legislative
oppression. x x x47
R.A. No. 9335 does not possess the elements of a bill of
attainder. It does not seek to inflict punishment without a judicial
trial. R.A. No. 9335 merely lays down the grounds for the
termination of a BIR or BOC official or employee and provides for
the consequences thereof. The democratic processes are still
followed and the constitutional rights of the concerned employee
are amply protected.
A final note.
We find that BOCEA’s petition is replete with allegations of
defects and anomalies in allocation, distribution and receipt of
rewards. While BOCEA intimates that it intends to curb graft and
corruption in the BOC in particular and in the government in
general which is nothing but noble, these intentions do not actually
pertain to the constitutionality of R.A. No. 9335 and its IRR, but
rather in the faithful implementation thereof. R.A. No. 9335 itself
does not tolerate these pernicious acts of graft and corruption.48 As
the Court is not a trier of facts, the investigation on the veracity of,
and the proper action on these anomalies are in the hands of the
Executive branch. Correlatively, the wisdom for the enactment of
this law remains within the domain of the Legislative branch. We
merely interpret the law as it is. The Court has no discretion to give
statutes a meaning detached from the manifest intendment and
language thereof.49 Just like any other law, R.A. No. 9335 has in its
favor the presumption of constitutionality, and to justify its
nullification, there must be a clear and unequivocal breach of the
Constitution and not one that is doubtful, speculative, or
argumentative.50 We have so declared in Abakada, and we now
reiterate that R.A. No. 9335 and its IRR are constitutional.
WHEREFORE, the present petition for certiorari and
prohibition with prayer for injunctive relief/s is DISMISSED.
No costs.
SO ORDERED.
G.R. No. 180236 January 17, 2012
GEMMA P. CABALIT, Petitioner,
vs.
COMMISSION ON AUDIT-REGION VII, Respondent.
On September 4, 2001, the Philippine Star News, a local
newspaper in Cebu City, reported that employees of the LTO in
Jagna, Bohol, are shortchanging the government by tampering with
their income reports.4 Accordingly, Regional Director Ildefonso T.
Deloria of the Commission on Audit (COA) directed State Auditors
Teodocio D. Cabalit and Emmanuel L. Coloma of the Provincial
Revenue Audit Group to conduct a fact-finding investigation. A
widespread tampering of official receipts of Motor Vehicle
Registration during the years 1998, 1999, 2000 and 2001 was then
discovered by the investigators.
According to the investigators, a total of 106 receipts were
tampered. The scheme was done by detaching the Plate Release
and Owner’s copy from the set of official receipts then typing
thereon the correct details corresponding to the vehicle registered,
the owner’s name and address, and the correct amount of
registration fees. The other copies, consisting of the copies for the
Collector, EDP, Record, Auditor, and Regional Office, meanwhile,
were typed on to make it appear that the receipts were issued
mostly for the registration of motorcycles with much lower
registration charges. Incorrect names and/or addresses were also
used on said file copies. The difference between the amounts paid
by the vehicle owners and the amounts appearing on the file copies
were then pocketed by the perpetrators, and only the lower
amounts appearing on the retained duplicate file copies were
reported in the Report of Collections.5 According to State Auditors
Cabalit and Coloma in their Joint-Affidavit, the scheme was
perpetrated by LTO employees Leonardo G. Olaivar, Gemma P.
Cabalit, Filadelfo S. Apit and Samuel T. Alabat, and resulted in an
unreported income totaling ₱169,642.50.6
On August 8, 2002, COA Regional Cluster Director Atty. Roy L.
Ursal reported the tampering of official receipts to Deputy
Ombudsman Primo C. Miro.7 According to Atty. Ursal, the
irregularity is penalized under Article 217, in relation to Article 171
of the Revised Penal Code;8 Section 3(e)9 of the Anti-Graft and
Corrupt Practices Act, and likewise violates Republic Act (R.A.) No.
6713.10
In a Joint Evaluation Report, Graft Investigators Pio R.
Dargantes and Virginia Palanca-Santiago found grounds to conduct
a preliminary investigation.11 Hence, a formal charge for dishonesty
was filed against Olaivar, Cabalit, Apit and Alabat before the Office
of the Ombudsman-Visayas, and the parties were required to
submit their counter-affidavits.
In compliance, Olaivar, Cabalit, Apit and Alabat submitted
separate counter-affidavits, all essentially denying knowledge and
responsibility for the anomalies. As to Olaivar, he maintained that
the receipts were typed outside his office by regular and casual
employees. He claimed that the receipts were presented to him
only for signature and he does not receive the payment when he
signs the receipts.12 Cabalit, for her part, claimed that her duty as
cashier was to receive collections turned over to her and to deposit
them in the Land Bank of the Philippines in Tagbilaran City. She
claimed that she was not even aware of any anomaly in the
collection of fees prior to the investigation.13 As to Apit, he
admitted that he countersigned the official receipts, but he too
denied being aware of any illegal activity in their office. He claimed
that upon being informed of the charge, he verified the
photocopies of the tampered receipts and was surprised to find
that the signatures above his name were falsified.14 Alabat,
meanwhile, claimed he did not tamper, alter or falsify any public
document in the performance of his duties. He insisted that the
initial above his name on Official Receipt No. 64056082 was Apit’s,
while the initial on Official Receipt No. 64056813 was that of
Olaivar.15
During the hearing before Graft Investigator Pio R. Dargantes,
State Auditor Cabalit testified on the investigation he conducted in
the LTO in Jagna, Bohol. He testified that he was furnished with the
owner’s and duplicate copies of the tampered receipts. Upon
comparison of the Owner’s copy with the Collector or Record’s
copy, he noticed that the amounts shown in the original copies
were much bigger than those appearing in the file copies. State
Auditor Cabalit also declared that the basis for implicating Olaivar
is the fact that his signature appears in all the 106 tampered official
receipts and he signed as verified correct the Report of Collections,
which included the tampered receipts. As to Apit and Cabalit, they
are the other signatories of the official receipts.16 In some official
receipts, the Owner’s copy is signed by F.S. Apit as Computer
Evaluator, G.P. Cabalit as Cashier, and Leonardo Olaivar as District
Head, but their signatures do not appear on the file copies.17
On February 12, 2004, the Office of the Ombudsman-Visayas
directed18 the parties to submit their position papers pursuant to
Administrative Order (A.O.) No. 17, dated September 7, 2003,
amending the Rules of Procedure of the Office of the
Ombudsman.19 No cross-examination of State Auditor Cabalit was
therefore conducted.
Complying with the above Order, the COA submitted its
position paper on March 18, 2004. Olaivar, Cabalit and Apit, for
their part, respectively submitted their position papers on April 29,
2004, March 18, 2004 and March 15, 2004.
In its position paper,20 the COA pointed out that the signatures
of Cabalit, Apit and Olaivar were indispensable to the issuance of
the receipts. As to Olaivar, the original receipts bear his signature,
thereby showing that he approved of the amounts collected for the
registration charges. However, when the receipts were reported in
the Report of Collections, the data therein were already tampered
reflecting a much lesser amount. By affixing his signature on the
Report of Collections and thereby attesting that the entries therein
were verified by him as correct, he allowed the scheme to be
perpetrated. As to Cabalit, the COA pointed out that as cashier,
Cabalit’s signature on the receipts signified that she received the
registration fees. The correct amounts should have therefore
appeared in the Report of Collections, but as already stated, lesser
amounts appeared on the Report of Collections, which she
prepares. In the same manner, Apit, as computer evaluator, also
signed the subject receipts allowing the irregularities to be
perpetuated.1avvphi1
In his position paper,21 Olaivar meanwhile insisted that he had
no participation in the anomalies. He stressed that his only role in
the issuance of the official receipts was to review and approve the
applications, and that he was the last one to sign the official
receipts. He argued that based on the standard procedure for the
processing of applications for registration of motor vehicles, it
could be deduced that there was a concerted effort or conspiracy
among the evaluator, typist and cashier, while he was kept blind of
their modus operandi.
Cabalit, for her part, questioned the findings of the
investigators. She stressed in her position paper22 that had there
been a thorough investigation of the questioned official receipts,
the auditors would have discovered that the signatures appearing
above her name were actually that of Olaivar. She outlined the
standard paper flow of a regular transaction at the LTO. It begins
when the registrant goes to the computer evaluator for the
computation of applicable fees and proceeds to the cashier for
payment. After paying, the typist will prepare the official receipts
consisting of seven (7) copies, which will be routed to the computer
evaluator, to the district head, and to the cashier for signature. The
cashier retains the copies for the EDP, Regional Office, Collector
and Auditor, while the remaining copies (Owner, Plate Release and
Record’s copy) will be forwarded to the Releasing Section for
distribution and release.
Cabalit insisted that on several occasions Olaivar disregarded
the standard procedure and directly accommodated some
registrants who were either his friends or referred to him by
friends. For such transactions, Olaivar assumes the functions of
computer evaluator, typist and cashier, as he is the one who
computes the fees, receives the payment and prepares the official
receipts. Olaivar would then remit the payment to her. As the
cashier, she has to accept the payment as a matter of ministerial
duty.
Apit, meanwhile, stressed in his position paper23 that the
strokes of the signatures appearing above his typewritten name on
the official receipts are different, indicating that the same are
falsified. He also explained that considering that the LTO in Jagna
issues around 20 to 25 receipts a day, he signed the receipts relying
on the faith that his co-employees had properly accomplished the
forms. He also pointed out that Engr. Dano admitted signing
accomplished official receipts when the regular computer encoder
is out, which just shows that other personnel could have signed
above the name of F.S. Apit.lawphil
On May 3, 2004, the Office of the Ombudsman-Visayas
rendered judgment finding petitioners liable for dishonesty for
tampering the official receipts to make it appear that they collected
lesser amounts than they actually collected. The OMB-Visayas
ruled:
WHEREFORE, premises considered, it is hereby resolved that
the following respondents be found guilty of the administrative
infraction of DISHONESTY and accordingly be meted out the
penalty of DISMISSAL FROM THE SERVICE with the accessory
penalties of cancellation of civil service eligibility, forfeiture of
retirement benefits and disqualification from re-employment in
the government service:
1. Leonardo G. Olaivar -Transportation Regulation Officer II/
Office[r]-In-Charge
LTO Jagna District Office
Jagna, Bohol;
2. Gemma P. Cabalit - Cashier II, LTO Jagna District Office Jagna,
Bohol;
3. Filadelpo S. Apit - Clerk II, LTO Jagna District Office Jagna,
Bohol;
The complaint against respondent Samuel T. Alabat, presently
the Head of Apprehension Unit of the Tagbilaran City LTO, is hereby
DISMISSED for insufficiency of evidence.
The complaint regarding the LTO official receipts/MVRRs
issued by the LTO Jagna District Office, which are not covered by
original copies are hereby DISMISSED without prejudice to the
filing of the appropriate charges upon the recovery of the original
copies thereof.
SO DECIDED.24
Petitioners sought reconsideration of the decision, but their
motions were denied by the Ombudsman.25 Thus, they separately
sought recourse from the CA.
On January 18, 2006, the CA promulgated the assailed Decision
in CA-G.R. SP. Nos. 86256, 86394 and 00047. The dispositive
portion of the CA decision reads,
WHEREFORE, premises considered, judgment is hereby
rendered by US DISMISSING the instant consolidated petitions. The
assailed decision of the Office of the Ombudsman-Visayas dated
May 3, 2004 in OMB-V-A-02-0415-H is hereby AFFIRMED with a
modification that petitioner Olaivar be held administratively liable
for gross neglect of duty which carries the same penalty as
provided for dishonesty. No pronouncement as to costs.
SO ORDERED.26
According to the CA, it was unbelievable that from 1998 to
2001, Cabalit and Apit performed vital functions by routinely
signing LTO official receipts but did not have any knowledge of the
irregularity in their office. With regard to Olaivar, the CA believed
that the tampering of the receipts could have been avoided had he
exercised the required diligence in the performance of his duties.
Thus, the CA held him liable merely for gross neglect of duty.
Petitioners sought reconsideration of the CA decision, but the
CA denied their motions.27 Hence, they filed the instant petitions
before the Court.
In her petition, petitioner Cabalit argues that
I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE OMBUDSMAN'S DECISION WHICH GAVE
RETROACTIVE EFFECT TO THE NEW ADMINISTRATIVE ORDER NO.
17 IN THE PROCEEDINGS BELOW THAT WAS ALREADY ON TRIAL IN
ACCORDANCE WITH ADMINISTRATIVE ORDER NO. 07.
II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
HOLDING THAT ALTHOUGH THE TRIAL TYPE HEARING UNDER
ADMINISTRATIVE ORDER NO. 07 DID NOT PUSH THRU, PETITIONER
WAS STILL ACCORDED HER RIGHT TO DUE PROCESS UNDER THE
SUMMARY PROCEEDINGS PURSUANT TO ADMINISTRATIVE ORDER
NO. 17.
III. THE HONORABLE COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR WHEN IT AFFIRMED THE DECISION OF
RESPONDENT OMBUDSMAN DESPITE HAVING FAILED TO MAKE A
CATEGORICAL RULING ON THE ISSUE OF WHETHER THE
QUESTIONED AND/OR FORGED SIGNATURES BELONG TO
PETITIONER GEMMA CABALIT.
IV. THE HONORABLE COURT OF APPEALS COMMITTED A
REVERSIBLE ERROR WHEN IT FAILED TO RULE ON THE DOCTRINAL
VALUE AND/OR APPLICABILITY OF THE TAPIADOR VS. OFFICE OF
THE OMBUDSMAN (G.R. [129124], MARCH 15, 2002) RULING HERE
IN THE INSTANT CASE.28
Meanwhile, Apit interposes the following arguments in his
petition:
I. THE COURT OF APPEALS ERRED IN LIMITING
ADMINISTRATIVE DUE PROCESS AS AN OPPORTUNITY TO BE
HEARD ONLY.
II. THE COURT OF APPEALS ERRED IN CONCLUDING THE
DEFENSE OF PETITIONER APIT AS MERE DENIAL.
III. THE COURT OF APPEALS ERRED IN ITS FAILURE TO
RECONSIDER THE EVIDENCE THAT CLEARLY PROVED THAT THE
SIGNATURES ABOVE THE NAME OF PETITIONER APIT IN THE
QUESTIONED RECEIPTS ARE ALL FORGED AND FALSIFIED.29
As for Olaivar, he assails the CA Decision raising the following
issues:
I. WHETHER THE HONORABLE COURT OF APPEALS ERRED IN
FINDING THAT PETITIONER LEONARDO G. OLAIVAR IS
ADMINISTRATIVELY LIABLE FOR GROSS NEGLIGENCE.
II. WHETHER THE HONORABLE COURT OF APPEALS ERRED
WHEN IT HELD THAT PETITIONER LEONARDO G. OLAIVAR WAS NOT
DENIED DUE PROCESS WHEN THE OFFICE OF THE OMBUDSMAN
VISAYAS FOUND HIM GUILTY FOR DISHONESTY AND METED OUT
THE PENALTY OF DISMISSAL FROM SERVICE.30
On January 15, 2008, said petitions were consolidated.31
Essentially, the issues for our resolution are: (1) whether there
was a violation of the right to due process when the hearing officer
at the Office of the Ombudsman-Visayas adopted the procedure
under A.O. No. 17 notwithstanding the fact that the said
amendatory order took effect after the hearings had started; and
(2) whether Cabalit, Apit and Olaivar are administratively liable.
As regards the first issue, petitioners claim that they were
denied due process of law when the investigating lawyer proceeded
to resolve the case based only on the affidavits and other evidence
on record without conducting a formal hearing. They lament that
the case was submitted for decision without giving them
opportunity to present witnesses and cross-examine the witnesses
against them. Petitioner Cabalit also argues that the Office of the
Ombudsman erred in applying the amendments under A.O. No. 17
to the trial of the case, which was already in progress under the old
procedures under A.O. No. 07. She stressed that under A.O. No. 07,
she had the right to choose whether to avail of a formal
investigation or to submit the case for resolution on the basis of
the evidence on record. Here, she was not given such option and
was merely required to submit her position paper.
 Petitioners’ arguments deserve scant consideration.
Suffice to say, petitioners were not denied due process of law
when the investigating lawyer proceeded to resolve the case based
on the affidavits and other evidence on record. Section
5(b)(1)32 Rule 3, of the Rules of Procedure of the Office of the
Ombudsman, as amended by A.O. No. 17, plainly provides that the
hearing officer may issue an order directing the parties to file,
within ten days from receipt of the order, their respective verified
position papers on the basis of which, along with the attachments
thereto, the hearing officer may consider the case submitted for
decision. It is only when the hearing officer determines that based
on the evidence, there is a need to conduct clarificatory hearings
or formal investigations under Section 5(b)(2) and Section 5(b)(3)
that such further proceedings will be conducted. But the
determination of the necessity for further proceedings rests on the
sound discretion of the hearing officer. As the petitioners have
utterly failed to show any cogent reason why the hearing officer’s
determination should be overturned, the determination will not be
disturbed by this Court. We likewise find no merit in their
contention that the new procedures under A.O. No. 17, which took
effect while the case was already undergoing trial before the
hearing officer, should not have been applied.
The rule in this jurisdiction is that one does not have a vested
right in procedural rules. In Tan, Jr. v. Court of Appeals,33 the Court
elucidated:
Statutes regulating the procedure of the courts will be
construed as applicable to actions pending and undetermined at
the time of their passage. Procedural laws are retroactive in that
sense and to that extent. The fact that procedural statutes may
somehow affect the litigants’ rights may not preclude their
retroactive application to pending actions. The retroactive
application of procedural laws is not violative of any right of a
person who may feel that he is adversely affected. Nor is the
retroactive application of procedural statutes constitutionally
objectionable. The reason is that as a general rule no vested right
may attach to, nor arise from, procedural laws. It has been held
that "a person has no vested right in any particular remedy, and a
litigant cannot insist on the application to the trial of his case,
whether civil or criminal, of any other than the existing rules of
procedure. (Emphasis supplied.)
While the rule admits of certain exceptions, such as when the
statute itself expressly or by necessary implication provides that
pending actions are excepted from its operation, or where to apply
it would impair vested rights, petitioners failed to show that
application of A.O. No. 17 to their case would cause injustice to
them. Indeed, in this case, the Office of the Ombudsman afforded
petitioners every opportunity to defend themselves by allowing
them to submit counter-affidavits, position papers, memoranda
and other evidence in their defense. Since petitioners have been
afforded the right to be heard and to defend themselves, they
cannot rightfully complain that they were denied due process of
law. Well to remember, due process, as a constitutional precept,
does not always and in all situations require a trial-type proceeding.
It is satisfied when a person is notified of the charge against him
and given an opportunity to explain or defend himself. In
administrative proceedings, the filing of charges and giving
reasonable opportunity for the person so charged to answer the
accusations against him constitute the minimum requirements of
due process. More often, this opportunity is conferred through
written pleadings that the parties submit to present their charges
and defenses.34 But as long as a party is given the opportunity to
defend his or her interests in due course, said party is not denied
due process.35
Neither is there merit to Cabalit’s assertion that she should
have been investigated under the "old rules of procedure" of the
Office of the Ombudsman, and not under the "new rules."
In Marohomsalic v. Cole,36 we clarified that the Office of the
Ombudsman has only one set of rules of procedure and that is A.O.
No. 07, series of 1990, as amended. There have been various
amendments made thereto but it has remained, to date,
the only set of rules of procedure governing cases filed in the Office
of the Ombudsman. Hence, the phrase "as amended" is correctly
appended to A.O. No. 7 every time it is invoked. A.O. No. 17 is just
one example of these amendments.
But did the CA correctly rule that petitioners Cabalit and Apit
are liable for dishonesty while petitioner Olaivar is liable for gross
neglect of duty?
Cabalit argues that the CA erred in affirming the decision of the
Ombudsman finding her liable for dishonesty. She asserts that it
was not established by substantial evidence that the forged
signatures belong to her. Meanwhile, Apit contends that the CA
erred in not considering evidence which proves that the signatures
appearing above his name are falsified. However, we note that both
Cabalit and Apit raise essentially factual issues which are not proper
in petitions filed under Rule 45. Settled jurisprudence dictates that
subject to a few exceptions, only questions of law may be brought
before the Court via a petition for review on certiorari. In Diokno v.
Cacdac,37 the Court held:
x x x [T]he scope of this Court’s judicial review of decisions of
the Court of Appeals is generally confined only to errors of law, and
questions of fact are not entertained. We elucidated on our fidelity
to this rule, and we said:
Thus, only questions of law may be brought by the parties and
passed upon by this Court in the exercise of its power to review.
Also, judicial review by this Court does not extend to a reevaluation
of the sufficiency of the evidence upon which the proper x x x
tribunal has based its determination. (Emphasis supplied.)
It is aphoristic that a re-examination of factual findings cannot
be done through a petition for review on certiorari under Rule 45 of
the Rules of Court because this Court is not a trier of facts; it reviews
only questions of law. The Supreme Court is not duty-bound to
analyze and weigh again the evidence considered in the
proceedings below. 38
Here, the CA affirmed the findings of fact of the Office of the
Ombudsman-Visayas which are supported by substantial evidence
such as affidavits of witnesses and copies of the tampered official
receipts.39 The CA found that a perusal of the questioned receipts
would easily reveal the discrepancies between the date, name and
vehicle in the Owner's or Plate Release copies and the File, Auditor,
and Regional Office copies. It upheld the factual findings of the
Ombudsman that petitioners Cabalit and Apit tampered with the
duplicates of the official receipts to make it appear that they
collected a lesser amount. Their participation was found to have
been indispensable as the irregularities could not have been
committed without their participation. They also concealed the
misappropriation of public funds by falsifying the receipts.
Now, superior courts are not triers of facts. When the findings
of fact of the Ombudsman are supported by substantial evidence, it
should be considered as conclusive.40 This Court recognizes the
expertise and independence of the Ombudsman and will avoid
interfering with its findings absent a finding of grave abuse of
discretion.41 Hence, being supported by substantial evidence, we
find no reason to disturb the factual findings of the Ombudsman
which are affirmed by the CA.
As for Olaivar, he insists that the CA erred in holding him
administratively liable for gross negligence when he relied to a
reasonable extent and in good faith on the actions of his
subordinates in the preparation of the applications for registration.
He questions the appellate court’s finding that he failed to exercise
the required diligence in the performance of his duties.1avvphi1
While as stated above, the general rule is that factual findings
of the CA are not reviewable by this Court, we find that Olaivar’s
case falls in one of the recognized exceptions laid down
in jurisprudence since the CA’s findings regarding his liability are
premised on the supposed absence of evidence but contradicted
by the evidence on record.42
The Office of the Ombudsman-Visayas found Olaivar
administratively liable for dishonesty while the CA ruled that he
may not be held liable for dishonesty supposedly for lack of
sufficient evidence. The CA ruled that there was no substantial
evidence to show that Olaivar participated in the scheme, but the
tampering of the official receipts could have been avoided had he
exercised the required diligence in the performance of his duties as
officer-in-charge of the Jagna District Office. Thus, the CA found
him liable only for gross neglect of duty. This, however, is clear
error on the part of the CA.
For one, there is clear evidence that Olaivar was involved in the
anomalies. Witness Joselito Taladua categorically declared in his
affidavit43 that he personally paid Olaivar the sum of ₱2,675 for the
renewal of registration of a jeep for which he was issued Official
Receipt No. 47699853. Much to his dismay, Taladua later found out
that his payment was not reflected correctly in the Report of
Collections, and that the vehicle was deemed unregistered for the
year 2000.
More, Cabalit pointed to Olaivar as the person behind the
anomaly in the LTO-Jagna District Office. She narrated in her
position paper that on several times, Olaivar directly
accommodated some registrants and assumed the functions of
computer evaluator, typist and cashier, and computed the fees,
received payment and prepared the official receipts for those
transactions. She also revealed that Olaivar would ask her for
unused official receipts and would later return the duplicate copies
to her with the cash collections. Later, he would verify the Report
of Collections as correct.44
Likewise, Motor Vehicle Inspector Engr. Lowell A. Dano
confirmed that in several instances, he witnessed Olaivar type the
data himself in the official receipts even if they have a typist in the
office to do the job. Engr. Dano added that after typing, Olaivar
personally brought the accomplished official receipts for him (Engr.
Dano) to sign.45
Moreover, Jacinto Jalop, the records officer of the LTO in
Jagna, Bohol, illustrated how the official receipts were tampered.
He disclosed that the correct charges were typed in the Owner’s
copy and the Plate Release copy of the official receipts, but a much
lower charge and an incorrect address were indicated in the other
copies. He asserted that Olaivar was responsible for tampering the
official receipts.46
 Neglect of duty implies only the failure to give proper attention employee is not merely advisory or recommendatory but is actually
to a task expected of an employee arising from either carelessness mandatory." Implementation of the order imposing the penalty is,
or indifference.47 However, the facts of this case show more than a however, to be coursed through the proper officer. Recently,
failure to mind one’s task. Rather, they manifest that Olaivar in Office of the Ombudsman v. Court of Appeals, we also held—
committed acts of dishonesty, which is defined as the concealment
‘While Section 15(3) of RA 6770 states that the Ombudsman
or distortion of truth in a matter of fact relevant to one’s office or
has the power to "recommend x x x removal, suspension, demotion
connected with the performance of his duty. It implies a disposition
x x x" of government officials and employees, the same Section
to lie, cheat, deceive, or defraud; untrustworthiness; lack of
15(3) also states that the Ombudsman in the alternative may
integrity; lack of honesty, probity, or integrity in principle.48Hence,
"enforce its disciplinary authority as provided in Section 21" of RA
the CA should have found Olaivar liable for dishonesty.
6770.’ (emphasis supplied.)53
But be that as it may, still, the CA correctly imposed the proper
Subsequently, in Ledesma v. Court of Appeals,54 and Office of
penalty upon Olaivar. Under Section 52, Rule IV of the Uniform
the Ombudsman v. Court of Appeals,55 the Court upheld the
Rules on Administrative Cases in the Civil Service, dishonesty, like
Ombudsman’s power to impose the penalty of removal,
gross neglect of duty, is classified as a grave offense punishable by
suspension, demotion, fine, censure, or prosecution of a public
dismissal even if committed for the first time.49 Under Section
officer or employee found to be at fault in the exercise of its
58,50 such penalty likewise carries with it the accessory penalties of
administrative disciplinary authority. In Office of the Ombudsman
cancellation of civil service eligibility, forfeiture of retirement
v. Court of Appeals, we held that the exercise of such power is well
benefits and disqualification from re-employment in the
founded in the Constitution and R.A. No. 6770, otherwise known
government service.
as The Ombudsman Act of 1989, thus:
One final note. Cabalit contends that pursuant to the obiter in
The Court further explained in Ledesma that the mandatory
Tapiador v. Office of the Ombudsman,51 the Office of the
character of the Ombudsman’s order imposing a sanction should
Ombudsman can only recommend administrative sanctions and not
not be interpreted as usurpation of the authority of the head of
directly impose them. However, in Office of the Ombudsman v.
office or any officer concerned. This is because the power of the
Masing,52 this Court has already settled the issue when we ruled
Ombudsman to investigate and prosecute any illegal act or
that the power of the Ombudsman to determine and impose
omission of any public official is not an exclusive authority but a
administrative liability is not merely recommendatory but actually
shared or concurrent authority in respect of the offense charged.
mandatory. We held,
By stating therefore that the Ombudsman "recommends" the
We reiterated this ruling in Office of the Ombudsman v. Laja, action to be taken against an erring officer or employee, the
where we emphasized that "the Ombudsman’s order to remove, provisions in the Constitution and in Republic Act No. 6770
suspend, demote, fine, censure, or prosecute an officer or
intended that the implementation of the order be coursed through comply with an order of the Ombudsman to remove, suspend,
the proper officer. demote, fine, censure or prosecute an officer or employee who is
at fault or who neglects to perform an act or discharge a duty
Consequently in Ledesma, the Court affirmed the appellate
required by law shall be a ground for disciplinary action against said
court’s decision which had, in turn, affirmed an order of the Office
officer.
of the Ombudsman imposing the penalty of suspension on the
erring public official.56 xxxx
The duty and privilege of the Ombudsman to act as protector Section 19 of R.A. No. 6770 grants to the Ombudsman the
of the people against the illegal and unjust acts of those who are in authority to act on all administrative complaints:
the public service emanate from no less than the 1987
SEC. 19. Administrative Complaints. – The Ombudsman shall
Constitution. Section 12 of Article XI thereof states:
act on all complaints relating, but not limited to acts or omissions
Section 12. The Ombudsman and his Deputies, as protectors of which:
the people, shall act promptly on complaints filed in any form or
(1) Are contrary to law or regulation;
manner against public officials or employees of the Government,
or any subdivision, agency or instrumentality thereof, including (2) Are unreasonable, unfair, oppressive or discriminatory;
government-owned or controlled corporations, and shall, in
(3) Are inconsistent with the general course of an agency’s
appropriate cases, notify the complainants of the action taken and
functions, though in accordance with law;
the result thereof.
(4) Proceed from a mistake of law or an arbitrary
In addition, Section 15 (3) of R.A. No. 6770, provides:
ascertainment of facts;
SEC. 15. Powers, Functions and Duties. – The Office of the
(5) Are in the exercise of discretionary powers but for an
Ombudsman shall have the following powers, functions and duties:
improper purpose; or
xxxx
(6) Are otherwise irregular, immoral or devoid of justification.
(3) Direct the officer concerned to take appropriate action
In the exercise of his duties, the Ombudsman is given full
against a public officer or employee at fault or who neglects to
administrative disciplinary authority. His power is not limited
perform an act or discharge a duty required by law, and
merely to receiving, processing complaints, or recommending
recommend his removal, suspension, demotion, fine, censure, or
penalties. He is to conduct investigations, hold hearings, summon
prosecution, and ensure compliance therewith; or enforce its
witnesses and require production of evidence and place
disciplinary authority as provided in Section 21 of this
respondents under preventive suspension. This includes the power
Act: Provided, That the refusal by any officer without just cause to
to impose the penalty of removal, suspension, demotion, fine, or penalty of dismissal from the service as well as the accessory
censure of a public officer or employee.57 penalties inherent to said penalty.
The provisions in R.A. No. 6770 taken together reveal the With costs against petitioners.
manifest intent of the lawmakers to bestow on the Office of the
SO ORDERED.
Ombudsman full administrative disciplinary authority. These
provisions cover the entire gamut of administrative adjudication
which entails the authority to, inter alia, receive complaints,
conduct investigations, hold hearings in accordance with its rules
of procedure, summon witnesses and require the production of
documents, place under preventive suspension public officers and
employees pending an investigation, determine the appropriate
penalty imposable on erring public officers or employees as
warranted by the evidence, and, necessarily, impose the said
penalty.58 Thus, it is settled that the Office of the Ombudsman can
directly impose administrative sanctions.
We find it worthy to state at this point that public service
requires integrity and discipline.1avvphi1 For this reason, public
servants must exhibit at all times the highest sense of honesty and
dedication to duty. By the very nature of their duties and
responsibilities, public officers and employees must faithfully
adhere to hold sacred and render inviolate the constitutional
principle that a public office is a public trust; and must at all times
be accountable to the people, serve them with utmost
responsibility, integrity, loyalty and efficiency.59
WHEREFORE, the petitions for review on certiorari
are DENIED. The assailed Decision dated January 18, 2006 and
Resolution dated September 21, 2007 of the Court of Appeals in
CA-G.R. SP. Nos. 86256, 86394 and 00047
are AFFIRMED with MODIFICATION. Petitioner Leonardo G. Olaivar
is held administratively liable for DISHONESTY and meted the

Adm. Case No. 6475 January 30, 2013
FE A. YLAYA, Complainant,
vs.
ATTY. GLENN CARLOS GACOTT, Respondent.
For the Court's consideration is the disbarment
complaint1 tiled by Fe A. Ylaya (complainant) against Atty. Glenn
Carlos Gacott (respondent) who allegedly deceived the
complainant and her late husband, Laurentino L. Ylaya, into signing
a "preparatory" Deed of Sale that the respondent converted into a
Deed of Absolute Sale in favor of his relatives.
After the submission of the respondent's comment to the
complaint, the Court referred the complaint to the Commission on
Bar Discipline ofthe Integrated Bar of the Philippines (IBP) for
investigation, evaluation and recommendation.
The complainant alleged that she and her late husband are the
registered owners of two (2) parcels of land covered by Transfer
Certificate of Title ( TCT) Nos. 162632 and 162633 located at
Barangay Sta. Lourdes, Puerto Princesa City. Prior to the acquisition
of these properties, TCT No. 162632 (property) was already the
subject of expropriation proceedings filed by the City Government
of Puerto Princesa (City Government) on May 23, 1996 against its
former registered owner, Cirilo Arellano. The expropriation case
was filed with the Regional Trial Court (RTC) of Palawan and Puerto
Princesa, Branch 95, and was docketed as Civil Case No. 2902. The
RTC already fixed the price and issued an order for the City
Government to deposit ₱6,000,000.00 as just compensation for the
property.2
The respondent briefly represented the complainant and her
late husband in the expropriation case as intervenors for being the
new registered owners of the property. The complainant alleged
that the respondent convinced them to sign a "preparatory deed
of sale" for the sale of the property, but he left blank the space for
the name of the buyer and for the amount of consideration. The
respondent further alleged that the deed would be used in the sale
to the City Government when the RTC issues the order to transfer
the titles.3 The respondent then fraudulently – without their
knowledge and consent, and contrary to their understanding –
converted the "preparatory deed of sale" into a Deed of Absolute
Sale dated June 4, 2001,4 selling the subject property to Reynold So
and Sylvia Carlos So for ₱200,000.00.5
The complainant denied that she and Laurentino were paid the
₱200,000.00 purchase price or that they would sell the property
"for such a measly sum" when they stood to get at least
₱6,000,000.00 as just compensation.6
The complainant also claimed that the respondent notarized
the Deed of Absolute Sale dated June 4, 2001 even though Reynold
and Sylvia (his mother’s sister) are his uncle and his aunt,
respectively.7
The respondent denied all the allegations in the complaint.8
The respondent argued that the complainant’s greed to get the
just Compensation9 caused her to file this "baseless, unfounded
and malicious" disbarment case.10 He claimed that the sale was
their voluntary transaction and that he "simply ratified the
document."11 He also claimed that Reynold and Laurentino had
originally jointly purchased the properties from Cirilo Arellano on
July 10, 2000; that they were co-owners for some time; and that
Laurentino subsequently sold his share to Reynold under a Deed of
Absolute Sale dated June 4, 2001.12
The respondent specifically denied asking the complainant and
her late husband to execute any "preparatory deed of sale" in favor
of the City Government.13 He also denied that the Deed of Absolute
Sale contained blanks when they signed it.14 That he filed for the
spouses Ylaya and Reynold an opposition to the just compensation
the RTC fixed proved that there was no agreement to use the
document for the expropriation case.15 He also argued that it was
clear from the document that the intended buyer was a natural
person, not a juridical person, because there were spaces for the
buyer’s legal age, marital status, and citizenship,16 and he was even
constrained to file a subsequent Motion to Intervene on behalf of
Reynold because the complainant "maliciously retained" the TCTs
to the subject properties after borrowing them from his
office.17 Lastly, he denied violating the Rules on Notarial Practice.18
On September 4, 2006, the respondent filed a Motion to
Resolve or Decide the Case dated August 24, 2006 praying for the
early resolution of the complaint.19
On December 5, 2006, the complainant filed an Ex Parte
Motion to Withdraw the Verified Complaint and To Dismiss the
Case dated November 14, 2006.20
On February 28, 2008, the complainant executed an
Affidavit21 affirming and confirming the existence, genuineness
and due execution of the Deed of Absolute Sale notarized on March
6, 2000;22 the Memorandum of Agreement (MOA) dated April 19,
2000;23 and the Deed of Absolute Sale notarized in 2001.24 The
respondent submitted this Affidavit to the IBP as an attachment to
his Motion for Reconsideration of April 21, 2008.25
The IBP’s Findings
In her Report and Recommendation dated November 19,
2007, IBP Commissioner Anna Caridad Sazon-Dupaya found the
respondent administratively liable for violating Canon 1, Rule 1.01
(A lawyer shall not engage in unlawful, dishonest, immoral or
deceitful conduct) and Canon 16 ("A lawyer shall hold in trust all
moneys and properties of his client that may come into his
possession) of the Code of Professional Responsibility, and Section
3(c), Rule IV of A.M. No. 02-8-13-SC (2004 Rules on Notarial
Practice).26 She recommended his suspension from the practice of
law for a period of six (6) months.27
 In its Resolution No. XVIII-2007-30228 dated December 14,
2007, the IBP Board of Governors adopted the IBP Commissioner’s
finding, but increased the penalty imposed to two (2) years
suspension and a warning:
RESOLVED to ADOPT and APPROVE, as it is hereby
unanimously ADOPTED and APPROVED, with modification, the
Report and Recommendation of the Investigating Commissioner
[in] the above-entitled case, herein made part of this Resolution as
Annex "A"; and, finding the recommendation fully supported by
the evidence on record and the applicable laws and rules, and
considering respondent’s violations of Canon 1, [Rule] 1.01 and
Canon 16 of the Code of Professional Responsibility and Rule IV,
Sec. 39(c) of A.M. No. 02-8-13-SC (2004 Rules on Notarial Practice),
Atty. Glenn Carlos Gacott is hereby SUSPENDED from practice of
law for two (2) years with a Warning that commission of a similar
offense will be dealt with more severely. [emphases supplied]
On May 8, 2008, the respondent filed a Motion for
Reconsideration dated April 21, 2008, attaching, among others, a
copy of the complainant’s Affidavit dated February 27, 2008,
admitting the existence, genuineness and due execution of the
Deed of Absolute Sale between Cirilo and Laurentino; the MOA
between Laurentino and Reynold; the Deed of Absolute Sale
between Laurentino and Reynold; and the Compromise Agreement
between Reynold and the complainant dated November 14, 2006
for the expropriation case.29
On September 4, 2008, the respondent filed a Manifestation
with the Supreme Court, requesting that the IBP be directed to
resolve his Motion for Reconsideration.30
By Resolution No. XIX-2010-545 dated October 8, 2010,31 the
IBP Board of Governors denied the respondent’s Motion for
Reconsideration for failing to raise any new substantial matter or
any cogent reason to warrant a reversal or even a modification of
its Resolution No. XVIII-2007-302.32
On March 14, 2012, the respondent filed a Petition for Review
(on appeal) assailing the IBP’s findings, as follows:33
a) In conveniently concluding that the Deed of Absolute Sale
was pre-signed and fraudulently notarized without requiring Fe
Ylaya to adduce evidence in a formal hearing thus, violated the
respondent’s right to due process as he was not able to cross-
examine her. This is not to mention that the complainant failed to
offer corroborative proof to prove her bare allegations;
b) In sweepingly and arbitrarily disregarded/skirted (sic) the
public documents (MOA and 2 other DOAS) duly executed by the
parties therein and notarized by the respondent;
c) In totally ignoring the complainant’s Affidavit admitting the
genuineness and due execution of the Deed of Absolute Sale in
issue;
d) In arbitrarily concluding the absence of co-ownership by
Reynold So and Fe Ylaya of the subject lots despite the existence of
a notarized MOA clearly showing the co-ownership of Ylaya and So;
and
e) In finding the respondent/appellant’s act of notarizing the
DOAS as contrary to the notarial rules.
The Issues
From the assigned errors, the complainant poses the following
issues:
 (1) whether the IBP violated the respondent’s right to due
process; and
(2) whether the evidence presented supports a finding that the
respondent is administratively liable for violating Canon 1, Rule
1.01 and Canon 16 of the Code of Professional Responsibility, and
Section 3(c), Rule IV of A.M. No. 02-8-13-SC.
The Court’s Ruling
We set aside the findings and recommendations of the IBP
Commissioner and those of the IBP Board of Governors finding the
respondent liable for violating Canon 1, Rules 1.01 and Section 3(c),
Rule IV of A.M. No. 02-8-13-SC.34
We however hold the respondent liable for violating Canon 16
of the Code of Professional Responsibility for being remiss in his
obligation to hold in trust his client’s properties. We likewise find
him liable for violation of (1) Canon 15, Rule 15.03 for representing
conflicting interests without the written consent of the
represented parties, thus, violating the rule on conflict of interests;
and (2) Canon 18, Rule 18.03 for neglecting a legal matter entrusted
to him.
a. Due process violation
The most basic tenet of due process is the right to be heard.
Denial of due process means the total lack of opportunity to be
heard or to have one’s day in court. As a rule, no denial of due
process takes place where a party has been given an opportunity
to be heard and to present his case;35 what is prohibited is the
absolute lack of opportunity to be heard.
The respondent claims that the IBP violated his right to due
process because he was not given the "amplest opportunity to
defend himself, to cross examine the witness complainant, to
object to the admissibility of documents or present controverting
evidence"36 when the IBP rendered its conclusion without
requiring the complainant to adduce evidence in a formal hearing
and despite the absence of corroborative proof. He insists that
these defects rendered the complainant’s allegations as hearsay,
and the IBP’s report, recommendation or resolution null and void.
Although the respondent failed to have a face-to-face
confrontation with the complainant when she failed to appear at
the required mandatory conference on October 6, 2005,37 the
records reveal that the respondent fully participated during the
entire proceedings and submitted numerous pleadings, including
evidence, before the IBP. He was even allowed to file a motion for
reconsideration supported by his submitted evidence, which
motion the IBP considered and ruled upon in its Resolution No. XIX-
2010-545 dated October 8, 2010.38
In Alliance of Democratic Free Labor Organization v.
Laguesma,39 we held that due process, as applied to administrative
proceedings, is the opportunity to explain one’s side. In Samalio v.
Court of Appeals,40 due process in an administrative context does
not require trial-type proceedings similar to those in courts of
justice. Where the opportunity to be heard, either through oral
arguments or through pleadings, is accorded, no denial of
procedural due process takes place. The requirements of due
process are satisfied where the parties are afforded a fair and
reasonable opportunity to explain their side of the controversy at
hand.
Similarly, in A.Z. Arnaiz Realty, Inc. v. Office of the
President,41 we held that "due process, as a constitutional precept,
does not always, and in all situations, require a trial-type
proceeding. Litigants may be heard through pleadings, written of Governors to resolve the case based on the pleadings and the
explanations, position papers, memoranda or oral arguments. The evidence on record. To quote his own submission:
standard of due process that must be met in administrative
1. On June 30, 2004, a complaint was filed in this case;
tribunals allows a certain degree of latitude[, provided that]
fairness is not ignored. It is, therefore, not legally objectionable for 2. On October 19, 2004, the respondent filed his comment
being violative of due process, for an administrative agency to with all its attachments denying all the allegations in the complaint;
resolve a case based solely on position papers, affidavits or
3. On June 23, 2005, the respondent filed his position paper.
documentary evidence submitted by the parties."42
On April 28, 2006, the respondent also filed his supplemental
In this case, the respondent’s failure to cross-examine the position paper. By contrast, up to this date, the
complainant is not a sufficient ground to support the claim that he complainant/petitioner has not filed her verified position paper
had not been afforded due process. The respondent was heard thus, waived her right to file the same;
through his pleadings, his submission of alleged controverting
4. There being no other genuine issues to be heard in this case
evidence, and his oral testimony during the October 6, 2005
as all the defenses and counter-arguments are supported by
mandatory conference. These pleadings, evidence and testimony
documentary evidence, it is most respectfully prayed that the
were received and considered by the IBP Commissioner when she
instant case be resolved on its merits or be ordered dismissed for
arrived at her findings and recommendation, and were the bases
lack of merit without further hearing;
for the IBP Board’s Resolution.
5. Further, considering that there is an on-going case in Branch
Moreover, "any seeming defect in the observance of due
52 of the Regional Trial Court of Palawan in Civil Case No. 2902 for
process is cured by the filing of a motion for reconsideration. A
Expropriation involving the same property, and such fact was
denia of due process cannot be successfully invoked by a party who
deliberately omitted by the complainant in her Verified Complaint
has had the opportunity to be heard on his motion for
as shown in the certification of non-forum shopping, the outright
reconsideration. Undoubtedly in this case, the requirement of the
dismissal of this case is warranted, hence, this motion; and
law was afforded to the respondent."43
6. This is meant to expedite the termination of this
We also note that the respondent, on a Motion to Resolve or
case.44 (underscore ours; italics supplied)
Decide the Case dated August 24, 2006, submitted his case to the
IBP for its resolution without any further hearings. The motion, Finally, we note Section 11, Rule 139-B of the Rules of Court
filed almost one year after the mandatory conference on October which provides that:
6, 2005, significantly did not contain any statement regarding a
No defect in a complaint, notice, answer, or in the proceeding
denial of due process. In effect, the respondent himself waived his
or the Investigator’s Report shall be considered as substantial
cross-examination of the complainant when he asked the IBP Board
unless the Board of Governors, upon considering the whole record,
finds that such defect has resulted or may result in a miscarriage of purity of the legal profession and the proper and honest
justice, in which event the administration of justice by purging the profession of members
who by their misconduct have proved themselves no longer worthy
Board shall take such remedial action as the circumstances
to be entrusted with the duties and responsibilities pertaining to
may warrant, including invalidation of the entire proceedings.
the office of an attorney. In such posture, there can thus be no
In this case, the IBP Commissioner’s findings were twice occasion to speak of a complainant or a prosecutor. [emphases
reviewed by the IBP Board of Governors – the first review resulted deleted]
in Resolution No. XVIII-2007-30245 dated December 14, 2007,
The complainant in disbarment cases is not a direct party to
affirming the IBP Commissioner’s findings, but modifying the
the case but a witness who brought the matter to the attention of
penalty; the second review resulted in Resolution No. XIX-2010-545
the Court.48 Flowing from its sui generis character, it is not
dated October 8, 2010,46denying the respondent’s motion for
mandatory to have a formal hearing in which the complainant must
reconsideration. In both instances, the IBP Board of Governors
adduce evidence.
found no defect or miscarriage of justice warranting a remedial
action or the invalidation of the proceedings. From all these, we find it clear that the complainant is not
indispensable to the disciplinary proceedings and her failure to
We emphasize that disciplinary proceedings against lawyers
appear for cross-examination or to provide corroborative evidence
are sui generis in that they are neither purely civil nor purely
of her allegations is of no merit. What is important is whether, upon
criminal; they involve investigations by the Court into the conduct
due investigation, the IBP
of one of its officers,47 not the trial of an action or a suit.
Board of Governors finds sufficient evidence of the
Disciplinary proceedings against lawyers are sui generis.
respondent’s misconduct to warrant the exercise of its disciplinary
Neither purely civil nor purely criminal, they do not involve a trial
powers.
of an action or a suit, but is rather an investigation by the Court into
the conduct of one of its officers. Not being intended to inflict b. Merits of the Complaint
punishment, it is in no sense a criminal prosecution. Accordingly,
"In administrative cases against lawyers, the quantum of proof
there is neither a plaintiff nor a prosecutor therein. It may be
required is preponderance of evidence which the complainant has
initiated by the Court motu proprio. Public interest is its primary
the burden to discharge."49 Preponderance of evidence means that
objective, and the real question for determination is whether or
the evidence adduced by one side is, as a whole, superior to or has
not the attorney is still a fit person to be allowed the privileges as
a greater weight than that of the other. It means evidence which is
such. Hence, in the exercise of its disciplinary powers, the Court
more convincing to the court as worthy of belief compared to the
merely calls upon a member of the Bar to account for his actuations
presented contrary evidence.
as an officer of the Court with the end in view of preserving the
 Under Section 1, Rule 133 of the Rules of Court, in determining
whether preponderance of evidence exists, the court may consider
the following: (a) all the facts and circumstances of the case; (b) the
witnesses’ manner of testifying, their intelligence, their means and
opportunity of knowing the facts to which they are testifying, the
nature of the facts to which they testify, and the probability or
improbability of their testimony; (c) the witnesses’ interest or want
of interest, and also their personal credibility so far as the same
may ultimately appear in the trial; and (d) the number of witnesses,
although it does not mean that preponderance is necessarily with
the greater number.50 By law, a lawyer enjoys the legal
presumption that he is innocent of the charges against him until
the contrary is proven, and that as an officer of the court, he is
presumed to have performed his duties in accordance with his
oath.51
The IBP Commissioner set out her findings as follows:
The undersigned, after a careful evaluation of the evidence
presented by both parties, finds that the charges of the
complainant against the respondent are worthy of belief based on
the following:
First, the allegation of the respondent that Reynold So was
actually co-owner of spouses Ylanas (sic) in the properties subject
of the Deed of Sale between Felix Arellano and Spouses Ylanas (sic)
is hard to believe despite the presentation of the Memorandum of
Agreement.
It is elementary in Rules of Evidence that when the contents of
a written document are put in issue, the best evidence would be
the document itself. In the Deed of Sale between Felix Arellano and
Spouses Ylanas (sic), the buyer of the subject properties is only
Laurentino L. Ylaya married to Fe A. Ylaya. The document does not
state that Reynold So was likewise a buyer together with
Laurentino Ylaya, or that the former paid half of the purchase price.
Also, it is hard for this Commission to believe that Reynold So,
assisted by a lawyer at that and who allegedly paid half of the
purchase price, would not insist for the inclusion of his name in the
Deed of Sale as well as the Transfer Certificate of Title subsequently
issued.
The Memorandum of Agreement between the spouses Ylaya
and Reynold So produced by the respondent cannot overturn the
belief of this Commission considering that the Memorandum of
Agreement was executed more than a month AFTER the Deed of
Sale between Felix Arellano and the Ylayas was notarized. This is
not to mention the fact that the complainant denied ever having
executed the Memorandum of Agreement. A close examination of
the signatories in the said Memorandum of Agreement would
reveal that indeed, the alleged signatures of the complainant and
her husband are not the same with their signatures in other
documents.
Assuming, for the sake of argument, that the Memorandum of
Agreement is valid, thereby making Laurentino Ylaya and co-owner
Reynold So co-owners of the subject properties (Please see Annex
"B" of respondent’s Comment), this Commission finds it hard to
believe Laurentino Ylaya would sell it to Reynold So for ₱200,000 x
x x when his minimum expenses for the purchase thereof is already
₱225,000.00 and he was expecting to receive ₱7,000,000.00, more
or less. That would mean that if Reynold So and the complainant
were co-owners, the ₱7,000,000.00 would then be equally divided
among them at ₱3,500,000.00 each, far above the ₱200,000.00
selling price reflected in the pre-signed Deed of Sale.
 As to the second issue, this Commission believes that the
respondent committed serious error in notarizing the Deed of Sale
and the Memorandum of Agreement between his uncle Reynold So
and Laurentino Ylaya based on Rule IV, Section 3 (c) of A.M. No. 02-
8-13-SC which provides as follows:
"Sec. 3. Disqualifications – a notary public is disqualified from
performing a notarial act if he:
(a) x x x.
(b) x x x.
(c) is a spouse, common-law partner, ancestor, descendant, or
relative by affinity or consanguinity of the principal within the
fourth civil degree."
The defense therefore of the respondent that he did not
violate the aforementioned Rule becausehis uncle Reynold So, the
buyer is not the principal in the Subject Deed of Sale but the seller
Laurentino Ylaya (please see page 3 of the respondent’s
Supplemental Position Paper) is misplaced. Clearly, both the buyer
and the seller in the instant case are considered principals in the
contract entered into.
Furthermore, if we are to consider the argument of the
respondent that his uncle was not a principal so as to apply the
afore-quoted provision of the Rules, the respondent still violated
the Rules when he notarized the subject Memorandum of
Agreement between Laurentino Ylaya and his uncle Reynold So.
Clearly, both complainant and Reynold So were principal parties in
the said Memorandum of Agreement.52
The respondent argues that the IBP Commissioner’s findings
are contrary to the presented evidence, specifically to the MOA
executed by Laurentino and Reynold acknowledging the existence
of a co-ownership;53 to the complainant’s Ex Parte Motion to
Withdraw the Verified Complaint and To Dismiss the Case dated
November 14, 2006 where she stated that the parties have entered
into a compromise agreement in Civil Case No. 2902, and that the
disbarment complaint arose from a misunderstanding,
miscommunication and improper appreciation of facts;54to her
Affidavit dated February 27, 200855 affirming and confirming the
existence, genuineness and due execution of the Deed of Absolute
Sale notarized on March 6, 2000;56 and to the Deed of Absolute
Sale notarized in 2001.57
In all, the respondent claims that these cited pieces of
evidence prove that this administrative complaint against him is
fabricated, false and untrue. He also points to Atty. Robert Peneyra,
the complainant’s counsel in this administrative case, as the hand
behind the complaint.58 According to the respondent, Atty.
Peneyra harbors ill-will against him and his family after his father
filed several administrative cases against Atty. Peneyra, one of
which resulted in the imposition of a warning and a reprimand on
Atty. Peneyra.59
Reynold, in his Affidavit dated October 11, 2004, confirms that
there was a co-ownership between him and Laurentino; that
Laurentino decided to sell his half of the property to Reynold
because he (Laurentino) had been sickly and in dire need of money
to pay for his medical bills; that Laurentino agreed to the price of
₱200,000.00 as this was almost the same value of his investment
when he and Reynold jointly acquired the property; and that the
sale to Reynold was with the agreement and consent of the
complainant who voluntarily signed the Deed of Sale.60
 After examining the whole record of the case, we agree with
the respondent and find the evidence insufficient to prove the
charge that he violated Canon 1, Rule 1.01 of the Code of
Professional Responsibility and Section 3(c), Rule IV of A.M. No. 02-
8-13-SC. Specifically, (1) the evidence against the respondent fails
to show the alleged fraudulent and deceitful acts he has taken to
mislead the complainant and her husband into signing a
"preparatory deed of sale" and the conversion into a Deed of
Absolute Sale dated June 4, 2001 in favor of Reynold; and (2) no
prohibition exists against the notarization of a document in which
any of the parties interested is the notary’s relative within the 4th
civil degree, by affinity or consanguinity, at that time the
respondent notarized the documents.
In her Report and Recommendation,61 the IBP Commissioner
concluded that the respondent is liable for deceit and fraud
because he failed to prove the existence of a co-ownership
between Laurentino and Reynold; in her opinion, the signatures of
the complainant and of her husband on the MOA "are not the same
with their signatures in other documents."62
We do not agree with this finding. While the facts of this case
may raise some questions regarding the respondent’s legal
practice, we nevertheless found nothing constituting clear
evidence of the respondent’s specific acts of fraud and deceit. His
failure to prove the existence of a co-ownership does not lead us
to the conclusion that the MOA and the Deed of Absolute Sale
dated June 4, 2001 are spurious and that the respondent was
responsible for creating these spurious documents. We are further
persuaded, after noting that in disregarding the MOA, the IBP
Commissioner failed to specify what differences she observed in
the spouses Ylaya’s signatures in the MOA and what documents
were used in comparison.
Apart from her allegations, the complainant’s pieces of
evidence consist of TCT Nos. 162632 and 162633;63 her Motion for
Leave to Intervene in Civil Case No. 2902 dated May 17, 2000;64 the
RTC order in Civil Case No. 2902 dated November 6, 2000 fixing the
price of just compensation;65 the Deed of Absolute Sale dated June
4, 2001;66the spouses Ylaya’s Verified Manifestation dated
September 2, 2002, filed with the RTC in Civil Case No. 2902,
assailing the Motion to Deposit Just Compensation filed by the
respondent on behalf of Reynold and manifesting the sale between
Laurentino and Reynold;67 the Provincial Prosecutor’s Subpoena to
the complainant in connection with the respondent’s complaint for
libel;68 the respondent’s complaint for libel against the
complainant dated August 27, 2003;69 the complainant’s Counter
Affidavit dated March 26, 2004 against the charge of libel;70 and
the respondent’s letter to the Provincial Attorney of Palawan dated
April 5, 2004, requesting for "official information regarding the
actual attendance of Atty. ROBERT Y. PENEYRA" at an MCLE
seminar.71
We do not see these documentary pieces of evidence as proof
of specific acts constituting deceit or fraud on the respondent’s
part. The documents by themselves are neutral and, at the most,
show the breakdown of the attorney-client relationship between
the respondent and the complainant. It is one thing to allege deceit
and misconduct, and it is another to demonstrate by evidence the
specific acts constituting these allegations.72
We reiterate that in disbarment proceedings, the burden of
proof is on the complainant; the Court exercises its disciplinary
power only if the complainant establishes her case by clear,
convincing, and satisfactory evidence.73Preponderance of evidence
means that the evidence adduced by one side is, as a whole,
superior to or has a greater weight than that of the other party.
When the pieces of evidence of the parties are evenly balanced or
when doubt exists on the preponderance of evidence, the
equipoise rule dictates that the decision be against the party
carrying the burden of proof.74
In this case, we find that the complainant’s evidence and the
records of the case do not show the respondent’s deliberate
fraudulent and deceitful acts. In the absence of such proof, the
complaint for fraud and deceit under Canon 1, Rule 1.01 of the
Code of Professional Responsibility must perforce be dismissed.
We note that the respondent has not squarely addressed the
issue of his relationship with Reynold, whom the complainant
alleges to be the respondent’s uncle because Reynold is married to
the respondent’s maternal aunt.75However, this is of no moment
as the respondent cannot be held liable for violating Section 3(c),
Rule IV of A.M. No. 02-8-13-SC because the Deed of Absolute Sale
dated June 4, 200176 and the MOA dated April 19, 200077 were
notarized by the respondent prior to the effectivity of A.M. No. 02-
8-13-SC on July 6, 2004. The notarial law in force in the years 2000
- 2001 was Chapter 11 of Act No. 2711 (the Revised Administrative
Code of 1917) which did not contain the present prohibition against
notarizing documents where the parties are related to the notary
public within the 4th civil degree, by affinity or consanguinity. Thus,
we must likewise dismiss the charge for violation of A.M. No. 02-8-
13-SC.
c. Liability under Canons 15, 16 and 18 We find the respondent
liable under Canon 15, Rule 15.03 for representing conflicting
interests without the written consent of all concerned, particularly
the complainant; under Canon 16 for being remiss in his obligation
to hold in trust his client’s properties; and under Canon 18, Rule
18.03 for neglecting a legal matter entrusted to him.
Canon 15, Rule 15.03 states:
A lawyer shall not represent conflicting interests except by
written consent of all concerned given after a full disclosure of the
facts. [emphasis ours]
The relationship between a lawyer and his client should ideally
be imbued with the highest level of trust and confidence. Necessity
and public interest require that this be so. Part of the lawyer’s duty
to his client is to avoid representing conflicting interests. He is duty
bound to decline professional employment, no matter how
attractive the fee offered may be, if its acceptance involves a
violation of the proscription against conflict of interest, or any of
the rules of professional conduct. Thus, a lawyer may not accept a
retainer from a defendant after he has given professional advice to
the plaintiff concerning his claim; nor can he accept employment
from another in a matter adversely affecting any interest of his
former client. It is his duty to decline employment in any of these
and similar circumstances in view of the rule prohibiting
representation of conflicting interests.78
The proscription against representation of conflicting interest
applies "even if the lawyer would not be called upon to contend for
one client that which the lawyer has to oppose for the other, or
that there would be no occasion to use the confidential information
acquired from one to the disadvantage of the other as the two
actions are wholly unrelated."79 The sole exception is provided in
Canon 15, Rule 15.03 of the Code of Professional Responsibility – if
there is a written consent from all the parties after full disclosure.
 Based on the records, we find substantial evidence to hold the
respondent liable for violating Canon 15, Rule 15.03 of the Code of
Professional Responsibility. The facts of this case show that the
respondent retained clients who had close dealings with each
other. The respondent admits to acting as legal counsel for Cirilo
Arellano, the spouses Ylaya and Reynold at one point during the
proceedings in Civil Case No. 2902.80 Subsequently, he represented
only Reynold in the same proceedings,81 asserting Reynold’s
ownership over the property against all other claims, including that
of the spouses Ylaya.82
We find no record of any written consent from any of the
parties involved and we cannot give the respondent the benefit of
the doubt in this regard. We find it clear from the facts of this case
that the respondent retained Reynold as his client and actively
opposed the interests of his former client, the complainant. He
thus violated Canon 15, Rule 15.03 of the Code of Professional
Responsibility.
We affirm the IBP Commissioner’s finding that the respondent
violated Canon 16. The respondent admits to losing certificates of
land titles that were entrusted to his care by Reynold.83 According
to the respondent, the complainant "maliciously retained" the TCTs
over the properties sold by Laurentino to Reynold after she
borrowed them from his office.84 Reynold confirms that the TCTs
were taken by the complainant from the respondent’s law office.85
The respondent is reminded that his duty under Canon 16 is to
"hold in trust all moneys and properties of his client that may come
into his possession." Allowing a party to take the original TCTs of
properties owned by another – an act that could result in damage
– should merit a finding of legal malpractice. While we note that it
was his legal staff who allowed the complainant to borrow the TCTs
and it does not appear that the respondent was aware or present
when the complainant borrowed the TCTs,86 we nevertheless hold
the respondent liable, as the TCTs were entrusted to his care and
custody; he failed to exercise due diligence in caring for his client’s
properties that were in his custody.
We likewise find the respondent liable for violating Canon 18,
Rule 18.03 for neglecting a legal matter entrusted to him. Despite
the respondent’s admission that he represented the complainant
and her late husband in Civil Case No. 2902 and that he purportedly
filed a Motion for Leave to Intervene in their behalf, the records
show that he never filed such a motion for the spouses Ylaya. The
complainant herself states that she and her late husband were
forced to file the Motion for Leave to Intervene on their own
behalf. The records of the case, which include the Motion for Leave
to Intervene filed by the spouses Ylaya, support this conclusion.87
Canon 18, Rule 18.03 requires that a lawyer "shall not neglect
a legal matter entrusted to him, and his negligence in connection
[therewith] shall render him liable." What amounts to carelessness
or negligence in a lawyer’s discharge of his duty to his client is
incapable of an exact formulation, but the Court has consistently
held that the mere failure of a lawyer to perform the obligations
due his client is per se a violation.88
In Canoy v. Ortiz,89 we held that a lawyer’s failure to file a
position paper was per se a violation of Rule 18.03 of the Code of
Professional Responsibility. Similar to Canoy, the respondent
clearly failed in this case in his duty to his client when, without any
explanation, he failed to file the Motion for Leave to Intervene on
behalf of the spouses Ylaya. Under the circumstances, we find that
there was want of diligence; without sufficient justification, this is
sufficient to hold the respondent liable for violating Canon 18, Rule
18.03 of the Code of Professional Responsibility.
d. The Complainant’s Ex Parte Motion to Withdraw the
Verified Complaint and to Dismiss the Case and her Affidavit
We are aware of the complainant’s Ex Parte Motion to
Withdraw the Verified Complaint and To Dismiss the Case dated
November 14, 200690 and her Affidavit91 affirming and confirming
the existence, genuineness and due execution of the Deed of
Absolute Sale notarized on March 6, 2000.92 The complainant
explains that the parties have entered into a compromise
agreement in Civil Case No. 2902, and that this disbarment
complaint was filed because of a "misunderstanding,
miscommunication and improper appreciation of facts";93 she
erroneously accused the respondent of ill motives and bad
intentions, but after being enlightened, she is convinced that he
has no personal or pecuniary interests over the properties in Civil
Case No. 2902; that such misunderstanding was due to her
unfamiliarity with the transactions of her late husband during his
lifetime.94 The complainant now pleads for the respondent’s
forgiveness, stating that he has been her and her late husband’s
lawyer for over a decade and affirms her trust and confidence in
him.95 We take note that under their Compromise Agreement
dated November 14, 2006 for the expropriation case,96 the
complainant and Reynold equally share the just compensation,
which have since increased to ₱10,000,000.00.
While the submitted Ex Parte Motion to Withdraw the Verified
Complaint and to Dismiss the Case and the Affidavit appear to
exonerate the respondent, complete exoneration is not the
necessary legal effect as the submitted motion and affidavit are
immaterial for purposes of the present proceedings. Section 5, Rule
139-B of the Rules of Court states that, "No investigation shall be
interrupted or terminated by reason of the desistance, settlement,
compromise, restitution, withdrawal of charges, or failure of the
complainant to prosecute the same."
In Angalan v. Delante,97 despite the Affidavit of Desistance, we
disbarred the respondent therein for taking advantage of his clients
and for transferring the title of their property to his name. In
Bautista v. Bernabe,98 we revoked the lawyer’s notarial
commission, disqualified him from reappointment as a notary
public for two years, and suspended him from the practice of law
for one year for notarizing a document without requiring the affiant
to personally appear before him. In this cited case, we said:
Complainant’s desistance or withdrawal of the complaint does
not exonerate respondent or put an end to the administrative
proceedings. A case of suspension or disbarment may proceed
regardless of interest or lack of interest of the complainant. What
matters is whether, on the basis of the facts borne out by the
record, the charge of deceit and grossly immoral conduct has been
proven. This rule is premised on the nature of disciplinary
proceedings. A proceeding for suspension or disbarment is not a
civil action where the complainant is a plaintiff and the respondent
lawyer is a defendant. Disciplinary proceedings involve no private
interest and afford no redress for private grievance. They are
undertaken and prosecuted solely for the public welfare. They are
undertaken for the purpose of preserving courts of justice from the
official ministration of persons unfit to practice in them. The
attorney is called to answer to the court for his conduct as an
officer of the court. The complainant or the person who called the
attention of the court to the attorney’s alleged misconduct is in no
sense a party, and has generally no interest in the outcome except
as all good citizens may have in the proper administration of The Supreme Court exercises exclusive jurisdiction to regulate
justice.99 the practice of law.102 It exercises such disciplinary functions
through the IBP, but it does not relinquish its duty to form its own
In sum, in administrative proceedings against lawyers, the
judgment. Disbarment proceedings are exercised under the sole
complainant’s desistance or withdrawal does not terminate the
jurisdiction of the Supreme Court, and the IBP’s recommendations
proceedings. This is particularly true in the present case where
imposing the penalty of suspension from the practice of law or
pecuniary consideration has been given to the complainant as a
disbarment are always subject to this Court’s review and approval.
consideration for her desistance. We note in this regard that she
would receive ₱5,000,000.00, or half of the just compensation The Penalty
under the Compromise Agreement,100 and thus agreed to
In Solidon v. Macalalad,103 we imposed the penalty of
withdraw all charges against the respondent.101 From this
suspension of six ( 6) months from the practice of law on the
perspective, we consider the complainant’s desistance to be
respondent therein for his violation of Canon 18, Rule 18.03 and
suspect; it is not grounded on the fact that the respondent did not
Canon 16, Rule 16.01 of the Code of Professional Responsibility. In
commit any actual misconduct; rather, because of the
Josefina M. Aniñon v. Atty. Clemencio Sabitsana, Jr.,104 we
consideration, the complainant is now amenable to the position of
suspended the respondent therein from the practice of law for one
the respondent and/or Reynold.
(1) year, for violating Canon 15, Rule 15.03 of the Code of
e. Procedural aspect Professional Responsibility. Under the circumstances, we find a one
(1) year suspension to be a sufficient and appropriate sanction
We remind all parties that resolutions from the IBP Board of
against the respondent.
Governors are merely recommendatory and do not attain finality
without a final action from this Court. Section 12, Rule 139-B is WHEREFORE, premises considered, we set aside Resolution
clear on this point that: No. XVIII-.2007-302 dated December 14, 2007 and Resolution No.
XIX-2010-545 dated October 8, 2010 of the IBP Board of Governors,
Section 12. Review and decision by the Board of Governors. –
and find respondent Atty. Glenn Carlos Gacott GUILTY of violating
xxxx Rule 15.03 of Canon 15, Canon 16, and Rule 18.03 of Canon 18 of
the Code of Professional Responsibility. As a penalty, he is
(b) If the Board, by the vote of a majority of its total
SUSPENDED from the practice of law for one (1) year, with a
membership, determines that the respondent should be
WARNING that a repetition of the same or similar act will be dealt
suspended from the practice of law or disbarred, it shall issue a
with more severely.
resolution setting forth its findings and recommendations which,
together with the whole record of the case, shall forthwith be SO ORDERED.
transmitted to the Supreme Court for final action.1âwphi1

G.R. No. 176830 February 11, 2014
SATURNINO C. OCAMPO, Petitioner,
vs.
HON. EPHREM S. ABANDO, Respondents.
These are petitions for certiorari and prohibition2 seeking the
annulment of the orders and resolutions of public respondents
with regard to the indictment and issuance of warrants of arrest
against petitioners for the crime of multiple murder.
Police Chief Inspector George L. Almaden (P C/Insp. Almaden)
of the Philippine National Police (PNP) Regional Office 8 and Staff
Judge Advocate Captain Allan Tiu (Army Captain Tiu) of the 8th
Infantry Division of the Philippine Army sent 12 undated letters to
the Provincial Prosecutor of Leyte through Assistant Provincial
Prosecutor Rosulo U. Vivero (Prosecutor Vivero).3 The letters
requested appropriate legal action on 12 complaint-affidavits
attached therewith accusing 71 named members of the Communist
Party of the Philippines/New People’s Army/National Democratic
Front of the Philippines (CPP/NPA/NDFP) of murder, including
petitioners herein along with several other unnamed members.
The letters narrated that on 26 August 2006, elements of the
43rd Infantry Brigade of the Philippine Army discovered a mass
grave site of the CPP/NPA/NDFP at Sitio Sapang Daco, Barangay
Kaulisihan, Inopacan, Leyte.4Recovered from the grave site were 67
severely deteriorated skeletal remains believed to be victims of
Operation VD.5
The PNP Scene of the Crime Operation (SOCO) Team based in
Regional Office 8 was immediately dispatched to the mass grave
site to conduct crime investigation, and to collect, preserve and
analyze the skeletal remains.6 Also, from 11-17 September 2006,
an investigation team composed of intelligence officers, and
medico-legal and DNA experts, conducted forensic crime analysis
and collected from alleged relatives of the victims DNA samples for
matching.7
The Initial Specialist Report8 dated 18 September 2006 issued
by the PNP Crime Laboratory in Camp Crame, Quezon City, was
inconclusive with regard to the identities of the skeletal remains
and even the length of time that they had been buried. The report
recommended the conduct of further tests to confirm the identities
of the remains and the time window of death.9
However, in a Special Report10 dated 2 October 2006, the Case
Secretariat of the Regional and National Inter-Agency Legal Action
Group (IALAG) came up with the names of ten (10) possible victims
after comparison and examination based on testimonies of
relatives and witnesses.11
The 12 complaint-affidavits were from relatives of the alleged
victims of Operation VD. All of them swore that their relatives had
been abducted or last seen with members of the CPP/NPA/NDFP
and were never seen again.
They also expressed belief that their relatives’ remains were
among those discovered at the mass grave site.
Also attached to the letters were the affidavits of Zacarias
Piedad,12 Leonardo C. Tanaid, Floro M. Tanaid, Numeriano
Beringuel, Glecerio Roluna and Veronica P. Tabara. They narrated
that they were former members of the
13
CPP/NPA/NDFP. According to them, Operation VD was ordered in
1985 by the CPP/NPA/NDFP Central Committee.14 Allegedly,
petitioners Saturnino C. Ocampo (Ocampo),15 Randall B. Echanis
(Echanis),16 Rafael G. Baylosis (Baylosis),17 and Vicente P. Ladlad
(Ladlad)18 were then members of the Central Committee.
According to these former members, four sub-groups were
formed to implement Operation VD, namely, (1) the Intel Group
responsible for gathering information on suspected military spies
and civilians who would not support the movement; (2) the
Arresting Group charged with their arrests; (3) the Investigation
Group which would subject those arrested to questioning; and (4)
the Execution Group or the "cleaners" of those confirmed to be
military spies and civilians who would not support the movement.19
From 1985 to 1992, at least 100 people had been abducted,
hog-tied, tortured and executed by members of the
CPP/NPA/NDF20 pursuant to Operation VD.21
On the basis of the 12 letters and their attachments,
Prosecutor Vivero issued a subpoena requiring, among others,
petitioners to submit their counter-affidavits and those of their
witnesses.22 Petitioner Ocampo submitted his counter-
affidavit.23 Petitioners Echanis24 and Baylosis25 did not file counter-
affidavits because they were allegedly not served the copy of the
complaint and the attached documents or evidence. Counsel of
petitioner Ladlad made a formal entry of appearance on 8
December 2006 during the preliminary investigation.26 However,
petitioner Ladlad did not file a counter-affidavit because he was
allegedly not served a subpoena.27
In a Resolution28 dated 16 February 2007, Prosecutor Vivero
recommended the filing of an Information for 15 counts of multiple
murder against 54 named members of the CPP/NPA/NDFP,
including petitioners herein, for the death of the following: 1)
Juanita Aviola, 2) Concepcion Aragon, 3) Gregorio Eras, 4) Teodoro
Recones, Jr., 5) Restituto Ejoc, 6) Rolando Vasquez, 7) Junior
Milyapis, 8) Crispin Dalmacio, 9) Zacarias Casil, 10) Pablo Daniel, 11)
Romeo Tayabas, 12) Domingo Napoles, 13) Ciriaco Daniel, 14)
Crispin Prado, and 15) Ereberto Prado.29
Prosecutor Vivero also recommended that Zacarias Piedad,
Leonardo Tanaid, Numeriano Beringuel and Glecerio Roluna be
dropped as respondents and utilized as state witnesses, as their
testimonies were vital to the success of the prosecution.30 The
Resolution was silent with regard to Veronica Tabara.
The Information was filed before the Regional Trial Court (RTC)
Hilongos, Leyte, Branch 18 (RTC Hilongos, Leyte) presided by Judge
Ephrem S. Abando (Judge Abando) on 28 February 2007, and
docketed as Criminal Case No. H-1581.31 Petitioner Ocampo filed
an Ex Parte Motion to Set Case for Clarificatory Hearing dated 5
March 2007 prior to receiving a copy of the Resolution
recommending the filing of the Information.32
On 6 March 2007, Judge Abando issued an Order finding
probable cause "in the commission by all mentioned accused of the
crime charged."33 He ordered the issuance of warrants of arrest
against them with no recommended bail for their temporary
liberty.34
On 16 March 2007, petitioner Ocampo filed before us this
special civil action for certiorari and prohibition under Rule 65 of
the Rules of Court and docketed as G.R. No. 176830 seeking the
annulment of the 6 March 2007 Order of Judge Abando and the 16
February 2007 Resolution of Prosecutor Vivero.35 The petition
prayed for the unconditional release of petitioner Ocampo from
PNP custody, as well as the issuance of a temporary restraining
order/ writ of preliminary injunction to restrain the conduct of
further proceedings during the pendency of the petition.36
Petitioner Ocampo argued that a case for rebellion against him
and 44 others (including petitioners Echanis and Baylosis37 and
Ladlad38) docketed as Criminal Case No. 06-944 was then pending
before the RTC Makati, Branch 150 (RTC Makati).39 Putting forward
the political offense doctrine, petitioner Ocampo argues that
common crimes, such as murder in this case, are already absorbed
by the crime of rebellion when committed as a necessary means, in
connection with and in furtherance of rebellion.40
We required41 the Office of the Solicitor General (OSG) to
comment on the petition and the prayer for the issuance of a
temporary restraining order/ writ of preliminary injunction, and
set42 the case for oral arguments on 30 March 2007. The OSG filed
its Comment on 27 March 2007.43
The following were the legal issues discussed by the parties
during the oral arguments:
1. Whether the present petition for certiorari and prohibition
is the proper remedy of petitioner Ocampo;
2. Assuming it is the proper remedy, whether he was denied
due process during preliminary investigation and in the issuance of
the warrant of arrest;
3. Whether the murder charges against him are already
included in the rebellion charge against him in the RTC.44
Afterwards, the parties were ordered to submit their
memoranda within 10 days.45 On 3 April 2007, the Court ordered
the provisional release of petitioner Ocampo under a ₱100,000
cash bond.46
Acting on the observation of the Court during the oral arguments
that the single Information filed before the RTC Hilongos, Leyte was
defective for charging 15 counts of murder, the prosecution filed a
Motion to Admit Amended Information and New Informations on
11 April 2007.47 In an Order dated 27 July 2007, Judge Abando held
in abeyance the resolution thereof and effectively suspended the
proceedings during the pendency of G.R. No. 176830 before this
Court.48
While the proceedings were suspended, petitioner Echanis
was arrested on 28 January 2008 by virtue of the warrant of arrest
issued by Judge Abando on 6 March 2007.49 On 1 February 2008,
petitioners Echanis and Baylosis filed a Motion for Judicial
Reinvestigation/ Determination of Probable Cause with Prayer to
Dismiss the Case Outright and Alternative Prayer to Recall/
Suspend Service of Warrant.50
On 30 April 2008, Judge Abando issued an Order denying the
motion.51 Petitioners Echanis and Baylosis filed a Motion for
Reconsideration52 dated 30 May 2008, but before being able to
rule thereon, Judge Abando issued an Order dated 12 June 2008
transmitting the records of Criminal Case No. H-1581 to the Office
of the Clerk of Court, RTC Manila.53 The Order was issued in
compliance with the Resolution dated 23 April 2008 of this Court
granting the request of then Secretary of Justice Raul Gonzales to
transfer the venue of the case.
The case was re-raffled to RTC Manila, Branch 32 (RTC Manila)
presided by Judge Thelma Bunyi-Medina (Judge Medina) and re-
docketed as Criminal Case No. 08-262163.54 Petitioner Echanis was
transferred to the PNP Custodial Center in Camp Crame, Quezon
City. On 12 August 2008, petitioners Echanis and Baylosis filed their
Supplemental Arguments to Motion for Reconsideration.55
In an Order56 dated 27 October 2008, Judge Medina
suspended the proceedings of the case pending the resolution of
G.R. No. 176830 by this Court.
On 18 December 2008, petitioner Ladlad filed with the RTC
Manila a Motion to Quash and/or Dismiss.57
On 23 December 2008, petitioner Echanis filed before us a
special civil action for certiorari and prohibition under Rule 65 of
the Rules of Court seeking the annulment of the 30 April 2008
Order of Judge Abando and the 27 October 2008 Order of Judge
Medina.58 The petition, docketed as G.R. No. 185587, prayed for
the unconditional and immediate release of petitioner Echanis, as
well as the issuance of a temporary restraining order/writ of
preliminary injunction to restrain his further incarceration.59
On 5 January 2009, petitioner Baylosis filed before us a special
civil action for certiorari and prohibition under Rule 65 of the Rules
of Court also seeking the annulment of the 30 April 2008 Order of
Judge Abando and the 27 October 2008 Order of Judge
Medina.60 The petition, docketed as G.R. No. 185636, prayed for
the issuance of a temporary restraining order/ writ of preliminary
injunction to restrain the implementation of the warrant of arrest
against petitioner Baylosis.61
The Court consolidated G.R. Nos. 185587 and 185636 on 12
January 2009.62
On 3 March 2009, the Court ordered the further consolidation
of these two cases with G.R. No. 176830.63 We required64 the OSG
to comment on the prayer for petitioner Echanis’s immediate
release, to which the OSG did not interpose any objection on these
conditions: that the temporary release shall only be for the purpose
of his attendance and participation in the formal peace
negotiations between the Government of the Republic of the
Philippines (GRP) and the CPP/NPA/NDFP, set to begin in August
2009; and that his temporary release shall not exceed six (6)
months.65 The latter condition was later modified, such that his
temporary liberty shall continue for the duration of his actual
participation in the peace negotiations.66
On 11 August 2009, the Court ordered the provisional release
of petitioner Echanis under a ₱100,000 cash bond, for the purpose
of his participation in the formal peace negotiations.67
Meanwhile, the Department of Justice (DOJ) filed its
Opposition68 to petitioner Ladlad’s motion to quash before the RTC
Manila. The trial court conducted a hearing on the motion on 13
February 2009.69
On 6 May 2009, Judge Medina issued an Order70 denying the
motion to quash. The motion for reconsideration filed by petitioner
Ladlad was also denied on 27 August 2009.71
On 9 November 2009, petitioner Ladlad filed before us a
special civil action for certiorari under Rule 65 of the Rules of Court
seeking the annulment of the 6 May 2009 and 27 August 2009
Orders of Judge Medina.72 The petition was docketed as G.R. No.
190005.
On 11 January 2010, we ordered the consolidation of G.R. No.
190005 with G.R. Nos. 176830, 185587 and 185636.73 We also
required the OSG to file its comment thereon. The OSG submitted
its Comment74 on 7 May 2010.
On 27 July 2010, we likewise required the OSG to file its
Comment in G.R. Nos. 185636 and 185587.75 These Comments
were filed by the OSG on 13 December 201076 and on 21 January
2011,77 respectively. Petitioners Echanis and Baylosis filed their
Consolidated Reply78 on 7 June 2011.
On 2 May 2011, petitioner Ladlad filed an Urgent Motion to Fix
Bail.79On 21 July 2011, petitioner Baylosis filed A Motion to Allow
Petitioner to Post Bail.80 The OSG interposed no objection to the
grant of a ₱100,000 cash bail to them considering that they were
consultants of the NDFP negotiating team, which was then holding
negotiations with the GRP peace panel for the signing of a peace
accord.81
On 17 January 2012, we granted the motions of petitioners
Ladlad and Baylosis and fixed their bail in the amount of ₱100,000,
subject to the condition that their temporary release shall be
limited to the period of their actual participation in the peace
negotiations.82
Petitioner Ladlad filed his Reply83 to the OSG Comment on 18
January 2013.
OUR RULING
Petitioners were accorded due
process during preliminary
investigation and in the issuance of
the warrants of arrest.
A. Preliminary Investigation
 A preliminary investigation is "not a casual affair."84 It is
conducted to protect the innocent from the embarrassment,
expense and anxiety of a public trial.85 While the right to have a
preliminary investigation before trial is statutory rather than
constitutional, it is a substantive right and a component of due
process in the administration of criminal justice.86
In the context of a preliminary investigation, the right to due
process of law entails the opportunity to be heard.87 It serves to
accord an opportunity for the presentation of the respondent’s
side with regard to the accusation. Afterwards, the investigating
officer shall decide whether the allegations and defenses lead to a
reasonable belief that a crime has been committed, and that it was
the respondent who committed it. Otherwise, the investigating
officer is bound to dismiss the complaint.
"The essence of due process is reasonable opportunity to be
heard and submit evidence in support of one's defense."88 What is
proscribed is lack of opportunity to be heard.89 Thus, one who has
been afforded a chance to present one’s own side of the story
cannot claim denial of due process.90
Petitioners Echanis and Baylosis allege that they did not
receive a copy of the complaint and the attached documents or
evidence.91 Petitioner Ladlad claims that he was not served a
subpoena due to the false address indicated in the 12 undated
letters of P C/Insp. Almaden and Army Captain Tiu to Prosecutor
Vivero.92 Furthermore, even though his counsels filed their formal
entry of appearance before the Office of the Prosecutor, petitioner
Ladlad was still not sent a subpoena through his counsels’
addresses.93 Thus, they were deprived of the right to file counter-
affidavits.
Petitioner Ocampo claims that Prosecutor Vivero, in collusion
with P C/Insp. Almaden and Army Captain Tiu, surreptitiously
inserted the Supplemental Affidavit of Zacarias Piedad in the
records of the case without furnishing petitioner Ocampo a
copy.94 The original affidavit of Zacarias Piedad dated 14
September 2006 stated that a meeting presided by petitioner
Ocampo was held in 1984, when the launching of Operation VD was
agreed upon.95Petitioner Ocampo refuted this claim in his Counter-
affidavit dated 22 December 2006 stating that he was in military
custody from October 1976 until his escape in May
1985.96 Thereafter, the Supplemental Affidavit of Zacarias Piedad
dated 12 January 2007 admitted that he made a mistake in his
original affidavit, and that the meeting actually took place in June
1985.97 Petitioner Ocampo argues that he was denied the
opportunity to reply to the Supplemental Affidavit by not being
furnished a copy thereof.
Petitioner Ocampo also claims that he was denied the right to
file a motion for reconsideration or to appeal the Resolution of
Prosecutor Vivero, because the latter deliberately delayed the
service of the Resolution by 19 days, effectively denying petitioner
Ocampo his right to due process.98
As to the claim of petitioners Echanis and Baylosis, we quote
the pertinent portion of Prosecutor Vivero’s Resolution, which
states:
In connection with the foregoing and pursuant to the Revised
Rules of Criminal Procedure[,] the respondents were issued and
served with Subpoena at their last known address for them to
submit their counter-affidavits and that of their witnesses.
 Majority of the respondents did not submit their counter-
affidavits because they could no longer be found in their last known
address, per return of the subpoenas. On the other hand, Saturnino
Ocampo @ Satur, Fides Lim, Maureen Palejaro and Ruben Manatad
submitted their Counter-Affidavits. However, Vicente Ladlad and
Jasmin Jerusalem failed to submit the required Counter Affidavits
in spite entry of appearance by their respective counsels.99
Section 3(d), Rule 112 of the Rules of Court, allows Prosecutor
Vivero to resolve the complaint based on the evidence before him
if a respondent could not be subpoenaed. As long as efforts to
reach a respondent were made, and he was given an opportunity
to present countervailing evidence, the preliminary investigation
remains valid.100The rule was put in place in order to foil
underhanded attempts of a respondent to delay the prosecution of
offenses.101
In this case, the Resolution stated that efforts were
undertaken to serve subpoenas on the named respondents at their
last known addresses. This is sufficient for due process. It was only
because a majority of them could no longer be found at their last
known addresses that they were not served copies of the complaint
and the attached documents or evidence.
Petitioner Ladlad claims that his subpoena was sent to the
nonexistent address "53 Sct. Rallos St., QC,"102 which had never
been his address at any time.103 In connection with this claim, we
take note of the fact that the subpoena to Fides Lim, petitioner
Ladlad’s wife,104 was sent to the same address, and that she was
among those mentioned in the Resolution as having timely
submitted their counter-affidavits.
Despite supposedly never receiving a subpoena, petitioner
Ladlad’s counsel filed a formal entry of appearance on 8 December
2006.105 Prosecutor Vivero had a reason to believe that petitioner
Ladlad had received the subpoena and accordingly instructed his
counsel to prepare his defense.
Petitioner Ladlad, through his counsel, had every opportunity
to secure copies of the complaint after his counsel’s formal entry
of appearance and, thereafter, to participate fully in the
preliminary investigation. Instead, he refused to participate.
We have previously cautioned that "litigants represented by
counsel should not expect that all they need to do is sit back, relax
and await the outcome of their case."106 Having opted to remain
passive during the preliminary investigation, petitioner Ladlad and
his counsel cannot now claim a denial of due process, since their
failure to file a counter-affidavit was of their own doing.
Neither do we find any merit in petitioner Ocampo’s allegation
of collusion to surreptitiously insert the Supplemental Affidavit of
Zacarias Piedad in the records. There was nothing surreptitious
about the Supplemental Affidavit since it clearly alludes to an
earlier affidavit and admits the mistake committed regarding the
date of the alleged meeting. The date of the execution of the
Supplemental Affidavit was also clearly stated. Thus, it was clear
that it was executed after petitioner Ocampo had submitted his
counter-affidavit. Should the case go to trial, that will provide
petitioner Ocampo with the opportunity to question the execution
of Zacarias Piedad’s Supplemental Affidavit.
Neither can we uphold petitioner Ocampo’s contention that he
was denied the right to be heard. For him to claim that he was
denied due process by not being furnished a copy of the
Supplemental Affidavit of Zacarias Piedad would imply that the
entire case of the prosecution rested on the Supplemental
Affidavit. The OSG has asserted that the indictment of petitioner
Ocampo was based on the collective affidavits of several other
witnesses107 attesting to the allegation that he was a member of
the CPP/NPA/NDFP Central Committee, which had ordered the
launch of Operation VD.
As to his claim that he was denied the right to file a motion for
reconsideration or to appeal the Resolution of Prosecutor Vivero
due to the 19-day delay in the service of the Resolution, it must be
pointed out that the period for filing a motion for reconsideration
or an appeal to the Secretary of Justice is reckoned from the date
of receipt of the resolution of the prosecutor, not from the date of
the resolution. This is clear from Section 3 of the 2000 National
Prosecution Service Rule on Appeal:
Sec. 3. Period to appeal. – The appeal shall be taken within
fifteen (15) days from receipt of the resolution, or of the denial of
the motion for reconsideration/ reinvestigation if one has been
filed within fifteen (15) days from receipt of the assailed resolution.
Only one motion for reconsideration shall be allowed. (Emphasis
supplied)
Thus, when petitioner Ocampo received the Resolution of
Prosecutor Vivero on 12 March 2007,108 the former had until 27
March 2007 within which to file either a motion for reconsideration
before the latter or an appeal before the Secretary of Justice.
Instead, petitioner Ocampo chose to file the instant petition for
certiorari directly before this Court on 16 March 2007.
B. Issuance of the Warrants of Arrest
Article III, Section 2 of the Constitution provides that "no
search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after
examination under oath or affirmation of the complainant and the
witnesses he may produce."
Petitioner Ocampo alleges that Judge Abando did not comply
with the requirements of the Constitution in finding the existence
of probable cause for the issuance of warrants of arrest against
petitioners.109
Probable cause for the issuance of a warrant of arrest has been
defined as "such facts and circumstances which would lead a
reasonably discreet and prudent man to believe that an offense has
been committed by the person sought to be arrested."110 Although
the Constitution provides that probable cause shall be determined
by the judge after an examination under oath or an affirmation of
the complainant and the witnesses, we have ruled that a hearing is
not necessary for the determination thereof.111 In fact, the judge’s
personal examination of the complainant and the witnesses is not
mandatory and indispensable for determining the aptness of
issuing a warrant of arrest.112
It is enough that the judge personally evaluates the
prosecutor’s report and supporting documents showing the
existence of probable cause for the indictment and, on the basis
thereof, issue a warrant of arrest; or if, on the basis of his
evaluation, he finds no probable cause, to disregard the
prosecutor's resolution and require the submission of additional
affidavits of witnesses to aid him in determining its existence.113
 Petitioners Echanis and Baylosis claim that, had Judge Abando
painstakingly examined the records submitted by Prosecutor
Vivero, the judge would have inevitably dismissed the charge
against them.114 Additionally, petitioner Ocampo alleges that Judge
Abando did not point out facts and evidence in the record that
were used as bases for his finding of probable cause to issue a
warrant of arrest.115
The determination of probable cause for the issuance of
warrants of arrest against petitioners is addressed to the sound
discretion of Judge Abando as the trial judge.116 Further elucidating
on the wide latitude given to trial judges in the issuance of warrants
of arrest, this Court stated in Sarigumba v. Sandiganbayan117 as
follows:
x x x. The trial court's exercise of its judicial discretion should
not, as a general rule, be interfered with in the absence of grave
abuse of discretion. Indeed, certiorari will not lie to cure errors in
the trial court's appreciation of the evidence of the parties, the
conclusion of facts it reached based on the said findings, as well as
the conclusions of law. x x x.
Whether or not there is probable cause for the issuance of
warrants for the arrest of the accused is a question of fact based
on the allegations in the Informations, the Resolution of the
Investigating Prosecutor, including other documents and/or
evidence appended to the Information.
Here, the allegations of petitioners point to factual matters
indicated in the affidavits of the complainants and witnesses as
bases for the contention that there was no probable cause for
petitioners’ indictment for multiple murder or for the issuance of
warrants for their arrest. As stated above, the trial judge’s
appreciation of the evidence and conclusion of facts based thereon
are not interfered with in the absence of grave abuse of discretion.
Again, "he sufficiently complies with the requirement of personal
determination if he reviews the [I]nformation and the documents
attached thereto, and on the basis thereof forms a belief that the
accused is probably guilty of the crime with which he is being
charged."118
Judge Abando’s review of the Information and the supporting
documents is shown by the following portion of the judge’s 6
March 2007 Order:
On the evaluation of the Resolution and its Information as
submitted and filed by the Provincial Prosecution of Leyte Province
supported by the following documents: Affidavits of Complainants,
Sworn Statements of Witnesses and other pertinent documents
issued by the Regional Crime Laboratory Office, PNP, Region VIII
and Camp Crame, Quezon City, pictures of the grave site and
skeletal remains, this court has the findings [sic] of probable cause
in the commission by all mentioned accused of the crime
charged.119
At bottom, issues involving the finding of probable cause for
an indictment and issuance of a warrant of arrest, as petitioners
are doubtless aware, are primarily questions of fact that are
normally not within the purview of a petition for certiorari,120 such
as the petitions filed in the instant consolidated cases.
The political offense doctrine is not a
ground to dismiss the charge against
petitioners prior to a determination
by the trial court that the murders
were committed in furtherance of
rebellion.
Under the political offense doctrine, "common crimes,
perpetrated in furtherance of a political offense, are divested of
their character as "common" offenses and assume the political
complexion of the main crime of which they are mere ingredients,
and, consequently, cannot be punished separately from the
principal offense, or complexed with the same, to justify the
imposition of a graver penalty."121
Any ordinary act assumes a different nature by being absorbed
in the crime of rebellion.122 Thus, when a killing is committed in
furtherance of rebellion, the killing is not homicide or murder.
Rather, the killing assumes the political complexion of rebellion as
its mere ingredient and must be prosecuted and punished as
rebellion alone.
However, this is not to say that public prosecutors are obliged
to consistently charge respondents with simple rebellion instead of
common crimes. No one disputes the well-entrenched principle in
criminal procedure that the institution of criminal charges,
including whom and what to charge, is addressed to the sound
discretion of the public prosecutor.123
But when the political offense doctrine is asserted as a defense
in the trial court, it becomes crucial for the court to determine
whether the act of killing was done in furtherance of a political end,
and for the political motive of the act to be conclusively
demonstrated.124
Petitioners aver that the records show that the alleged
murders were committed in furtherance of the CPP/NPA/NDFP
rebellion, and that the political motivation behind the alleged
murders can be clearly seen from the charge against the alleged
top leaders of the CPP/NPA/NDFP as co-conspirators.
We had already ruled that the burden of demonstrating
political motivation must be discharged by the defense, since
motive is a state of mind which only the accused knows.125 The
proof showing political motivation is adduced during trial where
the accused is assured an opportunity to present evidence
supporting his defense. It is not for this Court to determine this
factual matter in the instant petitions.
As held in the case of Office of the Provincial Prosecutor of
Zamboanga Del Norte v. CA,126 if during trial, petitioners are able
to show that the alleged murders were indeed committed in
furtherance of rebellion, Section 14, Rule 110 of the Rules of Court
provides the remedy, to wit:
SECTION 14. Amendment or substitution. — A complaint or
information may be amended, in form or in substance, without
leave of court, at any time before the accused enters his plea. After
the plea and during the trial, a formal amendment may only be
made with leave of court and when it can be done without causing
prejudice to the rights of the accused.
However, any amendment before plea, which downgrades the
nature of the offense charged in or excludes any accused from the
complaint or information, can be made only upon motion by the
prosecutor, with notice to the offended party and with leave of
court. The court shall state its reasons in resolving the motion and
copies of its order shall be furnished all parties, especially the
offended party. (n)
If it appears at any time before judgment that a mistake has
been made in charging the proper offense, the court shall dismiss
the original complaint or information upon the filing of a new one
charging the proper offense in accordance with Section 19, Rule
119, provided the accused shall not be placed in double jeopardy.
The court may require the witnesses to give bail for their
appearance at the trial. (Emphasis supplied)
Thus, if it is shown that the proper charge against petitioners
should have been simple rebellion, the trial court shall dismiss the
murder charges upon the filing of the Information for simple
rebellion, as long as petitioners would not be placed in double
jeopardy.
Section 7, Rule 117 of the Rules of Court, states:
SEC. 7. Former conviction or acquittal; double jeopardy. —
When an accused has been convicted or acquitted, or the case
against him dismissed or otherwise terminated without his express
consent by a court of competent jurisdiction, upon a valid
complaint or information or other formal charge sufficient in form
and substance to sustain a conviction and after the accused had
pleaded to the charge, the conviction or acquittal of the accused or
the dismissal of the case shall be a bar to another prosecution for
the offense charged, or for any attempt to commit the same or
frustration thereof, or for any offense which necessarily includes or
is necessarily included in the offense charged in the former
complaint or information.
Based on the above provision, double jeopardy only applies
when: (1) a first jeopardy attached; (2) it has been validly
terminated; and (3) a second jeopardy is for the same offense as in
the first.127
A first jeopardy attaches only after the accused has been
acquitted or convicted, or the case has been dismissed or
otherwise terminated without his express consent, by a competent
court in a valid indictment for which the accused has entered a
valid plea during arraignment.128
To recall, on 12 May 2006, an Information for the crime of
rebellion, as defined and penalized under Article 134 in relation to
Article 135 of the Revised Penal Code, docketed as Criminal Case
No. 06-944 was filed before the RTC Makati against petitioners and
several others.129
However, petitioners were never arraigned in Criminal Case
No. 06-944.1awp++i1 Even before the indictment for rebellion was
filed before the RTC Makati, petitioners Ocampo, Echanis and
Ladlad had already filed a petition before this Court to seek the
nullification of the Orders of the DOJ denying their motion for the
inhibition of the members of the prosecution panel due to lack of
impartiality and independence.130 When the indictment was filed,
petitioners Ocampo, Echanis and Ladlad filed supplemental
petitions to enjoin the prosecution of Criminal Case No. 06-
944.131We eventually ordered the dismissal of the rebellion case. It
is clear then that a first jeopardy never had a chance to attach.
Petitioner Ocampo shall remain on provisional liberty under
the ₱100,000 cash bond posted before the Office of the Clerk of
Court. He shall remain on provisional liberty until the termination
of the proceedings before the RTC Manila.1âwphi1

The OSG has given its conformity to the provisional liberty of

petitioners Echanis, Baylosis and Ladlad in view of the ongoing
peace negotiations. Their provisional release from detention under
the cash bond of ₱100,000 each shall continue under the condition
that their temporary release shall be limited to the period of their
actual participation as CPP-NDF consultants in the peace
negotiations with the government or until the termination of the
proceedings before the RTC Manila, whichever is sooner. It shall be
the duty of the government to inform this Court the moment that
peace negotiations are concluded.

WHEREFORE, the instant consolidated petitions are

DISMISSED. The RTC of Manila, Branch 32, is hereby ORDERED to
proceed with dispatch with the hearing of Criminal Case No. 08-
262163. Petitioner Saturnino C. Ocampo shall remain on temporary
liberty under the same bail granted by this Court until the
termination of the proceedings before the RTC Manila. Petitioners
Randall B. Echanis, Rafael G. Baylosis and Vicente P. Ladlad shall
remain on temporary liberty under the same bail granted by this
Court until their actual participation as CPP-NDF consultants in the
peace negotiations with the government are concluded or
terminated, or until the termination of the proceedings before the
RTC Manila, whichever is sooner.

SO ORDERED.
 Gutierrez (Gutierrez) liable for the P10,105,687.25 that was lost
through robbery.

Gutierrez is a Cash Collecting Officer, with the designation of

Cashier III at National Food Authority-National Capital Region,
National District Office (NFA-NCR, NDO).1 On May 30, 2008, she
had collections amounting to F9,390,834.00, covered by Official
Receipt Nos. 0420975 to 0421246.2 On that day, she placed the
collections in a wooden cabinet.3

The next day,.Gutierrez's collections amounted to

4
P1,505,625.00. Of that amount, P714,852.75 and an undeposited
amount of P0.50 from March 2008 were placed in a wooden
cabinet.5 The rest was placed in the safety vault.6

The total undeposited collection as of March 31, 2008 was

P10,896,459.50. Of that amount, P10,105,687.25 was placed in the
"pearless" boxes7 in a wooden cabinet and P790,772.25 was placed
G.R. No. 200628, January 13, 2015 in the safety vault.8
MARIA THERESA G. GUTIERREZ, Petitioner, v. COMMISSION ON
AUDIT AND AUDITOR NARCISA DJ JOAQUIN, Respondents. On June 1, 2008, at about 1:35 a.m., armed men in military
uniforms with Philippine National Police-Security Agencies and
DECISION Guards Supervision Division (PNP-SAGSD) identifications entered
LEONEN, J.: the NFA-NCR, NDO.9 The armed men disarmed NFA-NCR, NDO's
security guards and took Gutierrez's undeposited
A cashier who is found to have been negligent in keeping the 10
collections. Lockheed Detective and Watchman Agency, Inc. was
funds in his or her custody cannot be relieved from his or her NFA-NCR, NDO's contracted security agency.11
accountability for amounts lost through robbery.
The security guards on duty executed their respective affidavits.
This is a Petition for Certiorari under Rule 65 of the Rules of Court Based on their affidavits, armed men entered the NFA-NCR, NDO
assailing the June 5, 2008 withholding order and the Commission compound after they had been disarmed, threatened, and tied
on Audit's January 31, 2012 decision holding Maria Theresa G.
up.12 The security guards immediately reported the incident to the
Valenzuela Police Station,13 where an investigation report14 was
issued consistent with the security guards' narrations in their
affidavits.15
On June 3, 2008, the Commission on Audit, National Food
Authority-NCR, North District Office, Malanday, Valenzuela City,
through State Auditor Narcisa DJ Joaquin (State Auditor Joaquin),
issued a demand letter to Gutierrez.16 Gutierrez was informed that
she must immediately produce the missing funds amounting to
P10,105,686.75.17 She was also ordered to submit within 72 hours
a written explanation why such shortage occurred.18
On June 5, 2008, the Commission on Audit, through State Auditor
Joaquin, issued a withholding order, addressed to Roberto S.
Musngi (Musngi), Manager of National Food Authority, North
District Office.19Musngi was informed that upon examination of
Gutierrez's account on June 1, 2008, it was established that there
was a P10,105,686.75 shortage in Gutierrez's
20
accountabilities. Pursuant to Section 37 of Presidential Decree
No. 1445, Musngi was directed to withhold Gutierrez's salaries and
other emoluments so these could be applied to the satisfaction of
the shortage.21
In response to the June 3, 2008 demand letter of the Commission
on Audit, Gutierrez executed an affidavit dated June 6, 2008
wherein she narrated that she had been serving as National Food
Authority's Cash Collecting Officer since 1985.22 Her office was
located at the far end of the National Food Authority
building.23 That was where the "pearless" boxes and the cabinet
where she kept her collections could be found.24 Quoted below is
her explanation for using "pearless" boxes to keep her
collections:chanroblesvirtuallawlibrary
6. That because of the volume of money I accept every day,
which averages from 4 to 6 million pesos every day depending on
the seasons, most of my time inside the office is spent to counting,
bundling by different denominations the money. To emphasize the
point, the money that I am accepting from remittances and
payments are of different denominations, from twenty five
centavo (Php0.25) coins to one thousand peso (Php1,000.00) bills.
The coins alone would amount in the average of Twelve thousand
pesos (Php12,000.00). I could literally say that from the time I
timed in the office at about 6:30 a.m. up to the time I timed out at
about 6:30 p.m., my only rest from my work is to [be] going to the
ladies room and the break during lunch time.
....
8. That when the rice crises came up on April 2008, volume of work
including the amount of money that comes into my office almost
doubled. That because of the heavy operations in our office I had
an average collection starting April 2008 of 6 to 9 Million Pesos
every day of every denomination, with coins averaging from 12 to
16 thousand pesos that needs to be counted, receipted, bundled,
balanced, reported and kept.
9. That it is almost automatic that when I enter my office what
comes to my mind is to count the money and bundle them by the
hundreds and prepare receipts for the payments and remittances
until the time to leave at about 6:30 p.m. I would also cause the
deposit of the money collected the day before to Land Bank. But
there were even times that because of the volume of the money,
bank representatives could not sort out all the smaller bills (P20s
and P50s) being picked up from our office as the Armor van should
be in the bank at 3:00 p.m. Thus, there would be arrangements in
the bank that the counting would continue inside their office,
which oftentimes lasts until late night.
10. That since April 2008 or the start of the heavy operations, I have
been putting some of the money in the "pearless" box, because of
the volume, which I have to carry and keep safe at the cabinet
inside. I have six (6) pearless boxes in the office.
....
13. That since May 30, 2008 is a Friday, banks are closed the
following day and the money collected on said date would have
remained in my office until the next banking day.
....
18. It was very unfortunate that the money accepted on May 30,
2008 and the collection in the night before the robbery were left in
the pearless box inside the cabinet and not inside the vault. But
with the volume of money, the vault has not enough space to
accommodate all of it.
19. And with the amount of work that I am doing every day from
6:30 in the morning up to 6:30 p.m., more or less, where my only
rest is literally going to the ladies room, and with the safe location
of my office, it did not come to my mind that this incident would
come.
20. That I have nothing to do with what happened in the incident
of June 1, 2008 at 1:30 in the morning and I am not in control now
to produce those missing funds taken by the
25
robbers. cralawlawlibrary
On June 10, 2008, Gutierrez requested relief from money
accountability for the loss of the collections.26The letter was
addressed to State Auditor Joaquin.
In the letter dated June 26, 2008 addressed to State Auditor
Joaquin, Gutierrez appealed the withholding order issued on June
5, 2008.27 She prayed that her salaries and emoluments be given to
her while the robbery incident was still under investigation.28 She
was a widow who had three (3) dependents and an 85-year-old
mother residing with her in need of medical attention.29 She had
no other source of income to support herself, her dependents, and
her mother.30
On June 26, 2008, State Auditor Joaquin denied Gutierrez's appeal
of the withholding order.31 State Auditor Joaquin informed
Gutierrez that there was already a prima facie case for
malversation against her under Article 217 of the Revised Penal
Code.32
On July 11, 2008, Gutierrez filed a notice of appeal of State Auditor
Joaquin's withholding order dated June 5, 2008.33
On July 21, 2008, Atty. Saturnino R. Rola, Jr., Director of the
National Food Authority, Enforcement, Investigation and
Prosecution Department, submitted a memorandum addressed to
the Administrator, Jessup P. Navarro.34 He found that the security
agency was solidarity liable with security guard Romeo Casta for
the amount lost.35 He also found that Gutierrez, by keeping her
collections in unsecured "pearless" boxes and not in a vault, was
grossly negligent in safekeeping her collections.36 He
recommended that Gutierrez be administratively charged with
dishonesty, gross neglect of duty, conduct prejudicial to the best
interest of the service, and violation of reasonable office rules and
regulations without prejudice to the filing of appropriate criminal
charges.37 He also recommended the restitution of the amount lost
from Lockheed Detective and Watchman Agency, Inc. Further, he
recommended the ban of security guard Romeo Casta from
deployment in any National Food Authority installations.38
Similar incidents of robbery at different National Food Authority
offices involving Lockheed Detective and Watchman Agency, Inc.
were reported between 2006 and 2008.39
On September 11, 2008, Commission on Audit Director IV Tito S.
Nabua (Director Nabua) issued a decision denying Gutierrez's
appeal40 and expressing his agreement with the issuance of the
withholding order.41 The robbery incident was acknowledged in
the decision.42 However, Gutierrez's alleged act of negligence in
the performance of her duties could not be set aside.43 Her failure
to follow safekeeping procedures showed lack of due care on her
part.44 Aside from Article 217 of the Revised Penal Code, the
liabilities of an accountable officer are found in Section 105 of
Presidential Decree No. 1445.45
Gutierrez filed a motion for reconsideration of the September 11,
2008 decision of Director Nabua on the ground that he did not give
her a chance to file a memorandum of appeal before submission of
the case for resolution.46 According to Gutierrez, this was a
violation of the rules and of her right to due process.47She also cited
reversible error in upholding State Auditor Joaquin's order despite
lack of factual and legal bases as ground for her motion.48
On January 31, 2012, the Commission on Audit denied her request
for relief from money accountability.49Its ruling is reproduced as
follows:chanroblesvirtuallawlibrary
WHEREFORE, premises considered, this
Commission DENIES the herein request for relief from money
accountability, there being positive showing of fault or negligence
on the part of Ms. Maria Theresa G. Gutierrez in the safekeeping
and custody of subject government funds.
Accordingly, Ms. Gutierrez shall be liable to pay to1 the NFA the
missing amount of P10,105,687.25. This is without prejudice to the
right of the NFA-NCR, NDO to proceed against Lockheed Detective
and Watchman Agency, Inc. for the indemnification of the loss as
security services provider to the NFA-NCR, NDO, Valenzuela
City.50cralawlawlibrary
The Commission on Audit found that Gutierrez was negligent
in safekeeping her collections.51 Placement of collections in a
"pearless" box instead of in the safety vault, especially given the
volume of collections, constituted gross negligence on her
part.52 Her 20-year service aggravated her negligence.53 It should
have made her more "security-conscious."54
The Commission on Audit also found that the security guards'
failure to secure National Food Authority's premises was a violation
of the contract between National Food Authority and Lockheed
Detective and Watchman Agency, Inc.55
We decide whether Gutierrez's due process rights were violated
when the Commission on Audit decided her appeal without
requiring her to file an appeal memorandum. We also decide
whether Gutierrez is liable for the amounts lost through a robbery.
Petitioner emphasizes that she was first assisted by counsel only
when she filed a notice of appeal. Respondent auditor had already
issued the withholding order dated June 5, 2008 and .letter dated
June 26, 2008 before petitioner was assisted by counsel.
Petitioner argues that her right to due process was violated when
a decision was rendered against her without giving her a chance to
file an appeal memorandum in accordance with Section 5 of Rule V
of the Revised Rules of Procedure of the Commission on Audit. The
appeal memorandum was her chance to raise issues against
respondent auditor's orders to prove her case and to submit
evidence to support her defense.56
Petitioner's right to due process was further violated when her
motion for reconsideration was resolved by the Commission on
Audit instead of by Director Nabua. This prevented her from filing
a petition for review of Director Nabua's decision before the
Commission on Audit.57
Petitioner cites Article IX(A), Section 7 of the Constitution to
support her argument that she has a right to present her side in a
memorandum.58 It provides:chanroblesvirtuallawlibrary
Section 7. Each Commission shall decide by a majority vote of
all its Members, any case or matter brought before it within sixty
days from the date of its submission for decision or resolution. A
case or matter is deemed submitted for decision or resolution upon
the filing of the last pleading, brief, or memorandum required by
the rules of the Commission or by the Commission itself. Unless
otherwise provided by this Constitution or by law, any decision,
order, or ruling of each Commission may be brought to the
Supreme Court on certiorari by the aggrieved party within thirty
days from receipt of a copy thereof. (Emphasis supplied)
Petitioner argues that aside from the right to be heard,
administrative due process also requires the right to present
evidence and for such evidence to be considered by the deciding
tribunal.59
Lastly, petitioner points out that the cause of the shortage was the
robbery incident, which was a result of the negligence of the
security guards and not her negligence.60 The vault that was
assigned to her did not have enough space to accommodate her
collections.61
On the other hand, respondents argue that petitioner was not
deprived of due process when she was not given the opportunity
to file an appeal memorandum. Her affidavit was a sufficient
platform to raise her defenses.62 Moreover, the presence of a
counsel is not required in administrative proceedings.63
Respondents also argue that petitioner cannot ask the Director or
the Auditor to allow her to file an appeal memorandum since it is
the Commission on Audit that has the exclusive jurisdiction over
requests for relief from accountability in excess of
P500,000.00.64 This, according to respondent, is based on Thus, this court said in Remolona v. Civil Service
Commission on Audit Resolution No. 93-605 dated August 3, Commission:70ChanRoblesVirtualawlibrary
1993.65
While investigations conducted by an administrative body may
Finally, respondents argue that the circumstances show that at times be akin to a criminal proceeding, the fact remains that
petitioner fell short of the demands of her position as under existing laws, a party in an administrative inquiry may or may
cashier.66 What she could have done was to request additional not be assisted by counsel, irrespective of the nature of the charges
vaults if the vaults in her possession were not enough to and of the respondent's capacity to represent himself, and no duty
accommodate all her collections.67 rests on such body to furnish the person being investigated with
counsel. In an administrative proceeding, a respondent has the
We rule for respondents.chanRoblesvirtualLawlibrary option of engaging the services of counsel or not. This is clear from
the provisions of Section 32, Article VII of Republic Act No. 2260
I (otherwise known as the Civil Service Act) and Section 39,
paragraph 2, Rule XIV (on discipline) of the Omnibus Rules
Implementing Book V of Executive Order No. 292 (otherwise known
Petitioner's due process rights were not violated as the Administrative Code of 1987). Thus, the right to counsel is
not always imperative in administrative investigations because
Petitioner argues that she was assisted by counsel only after a such inquiries are conducted merely to determine whether there
withholding order had already been issued. She also argued that are facts that merit disciplinary measure against erring public
the Commission on Audit Director's issuance of a decision on her officers and employees, with the purpose of maintaining the
appeal without requiring her to file an appeal memorandum was a dignity of government service. As such, the hearing conducted by
violation of her due process rights. the investigating authority is not part of a criminal
prosecution.71cralawlawlibrary
Petitioner's arguments are not tenable.
While the purpose of criminal proceedings is to determine if a
The right to counsel under Section 12(1) of Article III of the person suspected of committing an offense has indeed committed
Constitution applies in criminal proceedings, but not in an offense, the purpose of an administrative proceeding is to
administrative proceedings. It is a right given to persons accused of determine if a person in public office has violated the trust reposed
an offense during criminal investigation.68 Any proceeding in him or her by the public. In a criminal proceeding, if a person is
conducted by an administrative body is not part of the criminal found guilty of an offense, the corresponding punishment is
investigation or prosecution.69 imposed primarily to protect the public from being exposed to and
correct his or her deviant behavior. In an administrative
proceeding, if a person is found administratively liable, the
corresponding penalty is imposed primarily to preserve public trust
and protect the integrity of public service.72
Petitioner is not being accused of or investigated for a crime. The
Commission on Audit's withholding order and its denial of
petitioner's request for relief from shortage were issued after it
had made a finding that the money entrusted to petitioner was
lost. A finding of criminal liability was not the reason for the
Commission on Audit's issuances. The Commission on Audit has no
jurisdiction to investigate a crime or to make a finding of criminal
liability. Any proceeding conducted prior to these issuances was for
the purpose of determining if petitioner's salaries should be
withheld or if petitioner should be relieved from her liability as a
cashier.
Petitioner argues that Rule V, Section 5 of the Revised Rules of
Procedure of the Commission on Audit73requires that she be given
an opportunity to file an appeal memorandum before the case is
submitted for decision. Section 5 is cited as
follows:chanroblesvirtuallawlibrary
Section 5. APPEAL MEMORANDUM AND REPLY - Upon receipt
of the records of the case, the Director shall issue an Order
requiring the appellant to file an appeal memorandum within
twenty (20) days from receipt of the order. The appellant shall
serve a copy of his appeal memorandum to the Auditor or appellee
who may reply thereto within the same period of time. With the
filing of the appeal memorandum and reply or lapse of the period
within which to file them, the appeal shall be deemed submitted
for decision.
Petitioner also argues that her due process rights were
violated when the Commission on Audit decided her motion for
reconsideration of the Commission on Audit Director's decision
dated September 11, 2008, and denied her request for relief from
accountability without her filing a memorandum or a petition for
review. She cites Article IX(A), Section 7 of the
Constitution:chanroblesvirtuallawlibrary
Section 7. Each Commission shall decide by a majority vote of
all its Members, any case or matter brought before it within sixty
days from the date of its submission for decision or resolution. A
case or matter is deemed submitted for decision or resolution upon
the filing of the last pleading, brief, or memorandum required by
the rules of the Commission or by the Commission itself. Unless
otherwise provided by this Constitution or by law, any decision,
order, or ruling of each Commission may be brought to the
Supreme Court on certiorari by the aggrieved party within thirty
days from receipt of a copy thereof. (Emphasis supplied)
Petitioner's due process rights were not violated when the
Commission on Audit Director had failed to require her to submit
an appeal memorandum before he decided her appeal of the State
Auditor's issuance of a withholding order. There was also no
violation of due process rights when the Commission on Audit
issued its January 31, 2012 decision denying her request for relief
from accountability, without a petition for review of the
Commission on Audit Director's decision. The right to appeal is not
part of due process.74 Neither is it a natural right.75
Moreover, petitioner's relief from accountability may be decided
by the Commission on Audit at the first instance. Based on Commission Proper above P500,000
Commission on Audit Resolution No. 93-605,76 only the
Commission on Audit may approve requests for relief from The lost accountability involved in this case amounts to
accountabilities amounting to more than P500,000.00. 10,105,687.75.
Thus:chanroblesvirtuallawlibrary
In any case, we determine if petitioner's due process rights were
Now, therefore, pursuant to Article IX-D, Section 2(2) of the violated in the course of the proceedings before the Commission
Constitution, Section 73 of PD 1445 and in conformity with Section on Audit.
378 of the Local Government Code, the Commission Proper hereby
resolves, as it does hereby resolve, to authorize the following COA This court in Ang Tibay v. Court of Industrial Relations77 ruled that
Officials to act on requests for relief from property and/or money administrative due process requires only the
accountability in the amounts indicated hereunder, except in cases following:chanroblesvirtuallawlibrary
of questions of law, without prejudice to the usual appeal that may
be taken therefrom to the Commission Proper, pursuant to Section (a) The party should be allowed to present his or her own
48 of PD 1445. case and submit supporting evidence;
(b) The deciding tribunal must consider the party's
Total Amount of Money or evidence;
Approving COA Official
Cost of Property Involved (c) There is evidence to support the tribunal's decision;
(d) The evidence supporting the tribunal's decision must
Corporate and National Unit be substantial or such "relevant evidence as a reasonable
Auditor Provincial and City not exceeding P5 0,000 mind might accept as adequate to support a conclusion";78
Auditor (e) The tribunal's decision was based on the evidence
presented or the records of the case disclosed to the
Director/Officer-in-Charge in excess of P50,000 up to parties;
of Central and Regional Offices P100,000 (f) The tribunal's decision must be based on the judges'
independent consideration of the facts and law governing
in excess of P100,000 up to the case; and
Assistant Commissioner
P200,000 (g) The tribunal's decision must be rendered such that the
issues of the case and the reasons for the decisions are
in excess of P200,000 up to known to the parties.79
COA Chairman
P500,000
 In sum, due process in administrative proceedings does not
necessarily require a trial type of hearing. Neither does it require
an exchange of pleadings between or among the parties. Due
process is satisfied if the party who is properly notified of
allegations against him or her is given an opportunity to defend
himself or herself against those allegations, and such defense was
considered by the tribunal in arriving at its own independent
conclusions. This court explained in Ledesma v. Court of
Appeals:80ChanRoblesVirtualawlibrary
Due process is satisfied when a person is notified of the charge
against him and given an opportunity to explain or defend himself.
In administrative proceedings, the filing of charges and giving
reasonable opportunity for the person so charged to answer the
accusations against him constitute the minimum requirements of
due process. The essence of due process is simply to be heard, or
as applied to administrative proceedings, an opportunity to explain
one's side, or an opportunity to seek a reconsideration of the action
or ruling complained of.
....
Administrative due process cannot be fully equated with due
process in its strict judicial sense for it is enough that the party is
given the chance to be heard before the case against him is
decided.81cralawlawlibrary
Petitioner's arguments and the issues she raised are
sufficiently expressed in her affidavit submitted to the Commission
on Audit, her motion for reconsideration of the Commission on
Audit Director's decision, and her petition and memorandum
submitted to this court. Even though petitioner was not able to file
an appeal memorandum, she was able to state her substantive
defenses in the pleadings she filed before the Commission on Audit
and this court. According to petitioner, the money that was lost
through robbery was not a result of her negligence. She kept the
money in "pearless" boxes for practical and not for malicious
reasons.
The decisions of the State Auditor, the Commission on Audit
Director, and the Commission on Audit had considered these facts
and defenses before they made conclusions' against petitioner.
Therefore, petitioner cannot say that her due process rights were
violated for the lack of order to file an appeal
memorandum.chanRoblesvirtualLawlibrary
II
Relief from cashier's liability cannot be granted if the cashier was
negligent in keeping funds under his or her custody
As a cashier for the National Food Authority, petitioner qualified as
an accountable officer under Presidential Decree No. 1445.
Accountable officers are government officers whose duties require
them to possess or be in custody of government funds or
properties.82 They are in charge of the safekeeping of the funds or
properties under their custody.83
Presidential Decree No. 1445 makes cashiers liable for the value of
the money or property in their custody in case they were lost
because of negligence or unlawful deposit, use, or application.
Thus:chanroblesvirtuallawlibrary
 Section 105. Measure of liability of accountable officers.
(1) Every officer accountable for government property shall be
liable for its money value in case of improper or unauthorized use
or misapplication thereof, by himself or any person for whose acts
he may be responsible. We shall likewise be liable for all losses,
damages, or deterioration occasioned by negligence in the keeping
or use of the property, whether or not it be at the time in his actual
custody.
(2) Every officer accountable for government funds shall be liable
for all losses resulting from the unlawful deposit, use, or application
thereof and for all losses attributable to negligence in the keeping
of the funds.
Imposing liability on cashiers for lost money or property in
their custody means that the value of the money or property
becomes their debt.
The Commission on Audit has the power to withhold payment of
money due to persons indebted to the government. Section 37 of
Presidential Decree No. 1445 provides:chanroblesvirtuallawlibrary
Section 37. Retention of money for satisfaction of indebtedness
to government. When any person is indebted to any government
agency, the Commission may direct the proper officer to withhold
the payment of any money due such person or his estate to be
applied in satisfaction of the indebtedness.
Petitioner does not deny that the money for which she was
accountable as a cashier was lost through robbery. She also did not
deny that she kept the greater portion of the amount lost, not in
the vault, but in boxes, for practical reasons. She was not motivated
by malice when she kept the money that was in her possession in
the boxes.
Without going to the issue of the existence of negligence, the
Commission on Audit may already issue a withholding order for
petitioner's salaries and emoluments because of this. Petitioner's
act of keeping the money in boxes instead of in the vault can be
subsumed under "unlawful deposit" that may cause a cashier to
incur liability in case the unlawfully deposited money was lost.
A similar case, Leano v. Domingo,84 showed that the safety of
money cannot be ensured when it is deposited in enclosures other
than the safety vault. Leano also involves a government cashier
whose money accountability was lost through robbery. As in this
case, the cashier did not keep her money accountabilities in the
vault. Requesting this court to review the Commission on Audit's
denial of her request for accountability, Leano argued that she had
no other choice but to use a steel cabinet to keep her money
accountabilities because the former cashier did not entrust to her
the safety vault's combination. This court upheld the Commission
on Audit's decision to deny Leano's request for relief from
accountabilities and found her to be negligent in handling her
money accountabilities:chanroblesvirtuallawlibrary
[I]t is evident that petitioner fell short of the demands inherent
in her position. As aptly argued by the Solicitor General, an exercise
of proper diligence expected of her position would have compelled
petitioner to request an immediate change of the combination of
the safe. However, the record is bare of any showing that petitioner
had, at least, exerted any effort to have the combination changed,
content with the fact that, according to her, the former cashier also
used the steel cabinet as depository of the funds.
In addition, it was found that the use of the steel cabinet was not a
wise and prudent decision. The steel cabinet, even when locked, at
times could be pulled open, thus it can be surmised that even
without the use of a key, the robbery could be committed once the
culprits succeed in entering the room (Progress Report of the Police
dated February 28, 1985). Moreover, the original key of the steel
cabinet was left inside a small wooden box placed near the steel
cabinet; it is therefore highly possible that the said steel cabinet
was opened with the use of its original key (Police Alarm
Report).85cralawlawlibrary
Hence, keeping National Food Authority collections outside
the vault constituted negligence on the part of petitioner.
The test of negligence is stated in Picart v. Smith,
Jr.:86ChanRoblesVirtualawlibrary
The test by which to determine the existence of negligence in
a particular case may be stated as follows: Did the defendant in
doing the alleged negligent act use that reasonable care and
caution which an ordinarily prudent person would have used in the
same situation? If not, then he is guilty of
87
negligence. cralawlawlibrary
"The existence of negligence in a given case is not determined
by reference to the personal judgment of the actor in the situation
before him. The Law considers what would be reckless,
blameworthy, or negligent in the man of ordinary intelligence and
prudence and determines liability by that."88
Petitioner is negligent because she failed to use "that reasonable
care and caution which an ordinarily prudent person would have
used in the same situation."89 A cashier in her position would have
used the vault to keep her collections. Petitioner failed to do this.
Her negligence is made more pronounced by the fact that the
collections kept in the vault were not taken by the robbers.
Petitioner insists that the space in the vault was not enough to
accommodate all her collections. However, she admitted that she
had been receiving relatively large collections in the past three (3)
months prior to the robbery. She should have requested an
additional vault wherein she could safely keep her collections. She
could also have set aside time to deposit her collections for the day
considering the. amount of cash she had been collecting, in order
to prevent its accumulation. This could have ensured that the
vault's space would be sufficient to keep any remaining collection
after the deposit. This could also have prevented her collections
from accumulating to an amount that rendered any loss through
untoward incidents such as robbery significant. Petitioner failed to
even allege that she exerted effort to obtain additional vaults or to
set aside time to deposit her collections to the bank.
For these reasons, petitioner cannot be relieved from liability. A
person who is negligent in keeping the funds cannot be relieved
from liability.90
WHEREFORE, the petition is DENIED.
SO ORDERED.

G.R. No. 181381 July 20, 2015
SECURITIES and EXCHANGE COMMISSION, Petitioner,
vs.
UNIVERSAL RIGHTFIELD PROPERTY HOLDINGS, INC., Respondent.
Respondent Universal Rightfield Property Holdings, Inc.
(URPHI) is a corporation duly registered and existing under the
Philippine Laws, and is engaged in the business of providing
residential and leisure-related needs and wants of the middle and
upper middle-income market.
On May 29, 2003, petitioner Securities and Exchange
Commission (SEC), through its Corporate Finance Department,
issued an Order revoking URPHI's Registration of Securities and
Permit to Sell Securities to the Public for its failure to timely file its
Year 2001 Annual Report and Year 2002 1st, 2nd and 3rd Quarterly
Reports pursuant to Section 173 of the Securities Regulation Code
(SRC), Republic Act No. 8799.
On October 16, 2003, URPHI filed with the SEC a
Manifestation/Urgent Motion to Set Aside Revocation Order and
Reinstate Registration after complying with its reportorial
requirements.
On October 24, 2003, the SEC granted URPHI's motion to lift
the revocation order, considering the current economic situation,
URPHI's belated filing of the required annual and quarterly reports,
and its payment of the reduced fine of ₱82,000.00.
Thereafter, URPHI failed again to comply with the same
reportorial requirements.
In a Notice of Hearing dated June 25, 2004, the SEC directed
URPHI to show cause why its Registration of Securities and
Certificate of Permit to Sell Securities to the Public should not be
suspended for failure to submit the said requirements. Pertinent
portion of the notice reads: Records show that the corporation has
failed to submit the following reports in violation of SRC Rule 17.1:
(1) 2003 Annual Report (SEC Form 17-A); and
(2) 2004 1st Quarter Report (SEC Form 17-Q)
The company has been allowed a non-extendible period until
May 31, 2004 within which to file its 2003 Annual Report but to
date the said report has not been submitted.
In view of the foregoing and considering the inadequate
information available to the public, the corporation is hereby
directed to show cause why the Registration of its Securities and
Certificate of Permit to Sell Securities should not be suspended, in
a hearing scheduled before Atty. Francia A. Tiuseco-Manlapaz on
July 6, 2004, at the Securities Registration Division, Corporation
Finance Department of the Commission, 6th Floor, SEC Building,
EDA, Greenhills, Mandaluyong, Metro Manila at 10:00 o'clock in
the morning. Failure of the company to appear, through its
representative, at the said hearing shall be deemed a waiver on its
part to be heard with regard to the suspension of its Certificate of
Permit to Sell Securities to the Public.
SO ORDERED.4
During the scheduled hearing on July 6, 2004, URPHI, through
its Chief Accountant, Rhodora Lahaylahay, informed the SEC why it
failed to submit the reportorial requirements, viz.: (1) it was
constrained to reduce its accounting staff due to cost-cutting
measures; thus, some of the audit requirements were not
completed within the original timetable; and (2) its audited
financial statements for the period ending December 31, 2003
could not be finalized by reason of the delay in the completion of
some of its audit requirements.
In an Order dated July 27, 2004, the SEC suspended URPHI's
Registration of Securities and Permit to Sell Securities to the Public
for failure to submit its reportorial requirements despite the lapse
of the extension period, and due to lack of sufficient justification
for its inability to comply with the said requirements.
On August 23, 2004, the SEC, through its Corporation Finance
Department, informed URPHI that it failed to submit its 2004 2nd
Quarter Report (SEC Form 17-Q) in violation of the Amended
Implementing Rules and Regulations of the SRC Rule 17
.1(1)(A)(ii).5 It also directed URPHI to file the said report, and to
show cause why it should not be held liable for violation of the said
rule.
In a letter dated September 28, 2004, URPHI requested for a
final extension, or until November 15, 2004, within which to submit
its reportorial requirements. Pertinent portions of the letter read:
We refer to your Order dated 27 July 2004, wherein the
Commission resolved to SUSPEND the Corporation's Registration of
Securities and Permit to Sell Securities to the Public due to non-
filing of the Corporation's reportorial requirements under SRC Rule
17 effective for sixty (60) days or until the reporting requirements
are complied [with]; otherwise, the Commission shall proceed with
the revocation of the Corporation's registration [of] securities. To
date, the Corporation has not filed with the Commission its 2003
Annual Report in SEC Form 17-A and 2004 1st and 2°d Quarterly
reports in SEC Form 17-Q. The non-submission of these reportorial
requirements, as we have already disclosed to you per our letter
dated 13 September 2004, was due to the non-finalization of the
Corporation's audited financial statement for the fiscal year ended
December 31, 2003.
During our meeting with our external auditor, SGV & Co. last 8
September 2004, SGV agreed to facilitate the finalization of our
financial statements within two (2) weeks. Notwithstanding the
same, the Corporation foresees the impossibility of complying with
its submission until the end of the month, as the partners of SGV
are still reviewing the final draft of the financial statements. The
Corporation intends to comply with its reportorial requirements.
However, due to the foregoing circumstances, the finalization of
our financial statement has again been delayed. In this regard, may
we request for the last time until November 15, 2004 within which
to submit said reportorial requirements.6
On December 1, 2004, URPHI filed with the SEC its 2003 Annual
Report.
 In an Order of Revocation7 dated December 8, 2004, the SEC
revoked URPHI's Registration of Securities and Permit to Sell
Securities to the Public for its failure to submit its reportorial
requirements within the final extension period.
On December 9, 10, and 14, 2004, URPHI finally submitted to
the SEC its 1st Quarterly Report for 2004, 2nd Quarterly Report for
2004, and 3rd Quarterly Report for 2004, respectively. Meantime,
URPHI appealed the SEC Order of Revocation dated December 8,
2004 by filing a Notice of Appeal and a Memorandum both dated
January 3, 2005.
In a Resolution dated December 15, 2005, the SEC denied
URPHI's appeal, thus: WHEREFORE, premises considered, the
Memorandum dated 03 January 2005 of Universal Rightfield
Property Holdings, Inc. praying for the reversal of the Order of
Revocation dated 08 December 2004 is DENIED for lack of merit.
SO ORDERED.8
Aggrieved, URPHI filed a petition for review with the CA.
In a Decision dated January 21, 2008, the CA granted the
petition and set aside the SEC Order of Revocation after finding that
URPHI was not afforded due process because no due notice was
given and no hearing was conducted before its registration of
securities and permit to sell them to the public was revoked. The
CA noted that the hearing conducted on July 6, 2004 was only for
the purpose of determining whether URPHI's registration and
permit to sell should be suspended and not whether said
registration should be revoked.
The CA ruled that based on how Sections 5.1 (m)9 and 13.110 of
the SRC are worded, suspension and revocation of URPHI's
registration of securities each requires separate notices and
hearings. It also held that the Ruling11 in Globe Telecom, Inc. v. The
National Telecommunications Commission12 (Globe Telecom, Inc.)
applies squarely to this case since the Section 13.1 of the SRC itself
provides that due notice and hearing are required before
revocation may be ordered by the SEC. In view of such specific
mandate of the SRC in cases of revocation, the CA rejected the
SEC's argument that the hearing conducted for the suspension of
URPHI's registration can already be considered as the hearing for
revocation.
The CA also held that the SEC cannot brush aside the specific
mandate of Section 13 .1 of the SRC by merely invoking the doctrine
that administrative due process is satisfied when the party is given
the opportunity to explain one's side or the opportunity to seek a
reconsideration of the action or ruling taken. Citing Globe Telecom,
Inc.13 the CA explained that while such doctrine remains valid and
has been applied in numerous instances, it must give way in
instances when the statute itself, such as Section 13 .1, demands
prior notice and hearing. It added that the imperativeness for a
hearing in cases of revocation of registration of securities assumes
greater significance, considering that revocation is a measure
punitive in character undertaken by an administrative agency in the
exercise of its quasi-judicial functions. Dissatisfied with the CA
Decision, the SEC filed the instant petition for review on certiorari,
raising the sole issue that:
THE COURT OF APPEALS DECIDED A QUESTION OF SUBSTANCE
WHICH IS NOT IN ACCORD WITH THE LAW AND PREVAILING
JURISPRUDENCE.14
On the one hand, the SEC contends that URPHI was accorded
all the opportunity to be heard and comply with all the reportorial
requirements before the Order of Revocation was issued.
Specifically, in the Order dated July 27, 2004 suspending URPHI's
registration of securities for 60 days, the SEC expressly warned that
such registration would be revoked should it persistently fail to
comply with the said requirements. Still, URPHI continuously failed
to submit the required reports. On August 23, 2004, the SEC
directed again URPHI to submit the required report and to show
cause why it should not be held liable for violation of the law.
Instead of submitting the required reports, URPHI requested for a
final extension, or until November 15, 2004, within which to
comply with its reportorial requirements. For URPHI's failure to
submit the said reports, the SEC issued the Order of Revocation
dated December 8, 2004. URPHI immediately filed a motion for
reconsideration thereof through a Notice of Appeal and a
Memorandum both dated January 3, 2005, which the SEC later
denied in the Resolution dated December 15, 2005. Hence, URPHI
was amply accorded its guaranteed right to due process.
The SEC also submits that the factual milieu of Globe Telecom,
Inc.15cited by the CA in its Decision is starkly different from this
case. Unlike in the former case where the Court ruled that the fine
imposed by the National Telecommunications Commission without
notice and hearing, was null and void due to the denial of
petitioner's right to due process, the SEC points out that URPHI was
duly notified of its violations and the corresponding penalty that
may be imposed should it fail to submit the required reports, and
was given more than enough time to comply before the Order of
Revocation was issued. The SEC adds that a hearing was conducted
on July 6, 2004 as to URPHI's repeated failure to submit the
reportorial requirements as mandated by the SRC and its
implementing rules and regulations, which was the basis in issuing
the said Order.
On the other hand, URPHI insists that the CA was correct in
ruling that the SRC requires separate notices and hearings for
revocation and suspension of registration of securities and permit
to sell them to the public. It then asserts that the warning
contained in the SEC's suspension Order dated July 27, 2004 does
not meet the requirement of notice under the SRC. It stresses that
while the SEC issued a separate notice of hearing for such
suspension, no similar notice was issued as regards such
revocation. It also notes that the July 6, 2004 hearing was with
regard to the suspension of its registration of securities, and that
no hearing was ever conducted for purposes of revocation of such
registration.
On the SEC's claim that URPHI was afforded due process
because it was already given the opportunity to seek a
reconsideration of the Order of Revocation by filing its Notice of
Appeal and Memorandum, URPHI argues that the filing of such
appeal did not cure the violation of its right to due process. In
support of its argument, URPHI cites the Globe Telecom,
Inc.16 ruling that notice and hearing are indispensable when an
administrative agency exercises quasi-judicial functions and that
such requirements become even more imperative if the statute
itself demands it.
URPHI further cites the ruling17 in BLTB, Co. v. Cadiao, et
al.,18to support its view that a motion for reconsideration is
curative of a defect in procedural due process only if a party is given
sufficient opportunity to explain his side of the controversy. It
claims that the controversy referred to is the underlying
substantive controversy of which the procedural due process
controversy is but an offshoot. Noting that the only issue raised in
its appeal was procedural, i.e., whether it was denied prior notice
and hearing under the SRC, URPHI contends that it cannot be said
that by appealing to the SEC, it had the opportunity to explain its
side on substantive controversy which pertains to its alleged
violation of the SRC and failure to comply with the reportorial
requirements that prompted the SEC to issue the Order of
Revocation. Hence, such appeal cannot be considered curative of
the defect in procedural due process which attended the issuance
of the said Order.
URPHI further submits that the prior revocation of its
registration on May 29, 2003 did not cure the lack of due process
which attended the revocation of its registration on December 8,
2004. Since the SEC deemed it proper to lift the prior revocation,
such can no longer be used to sustain another revocation order,
much less one issued without prior notice and hearing. Granted
that it was accorded due process, URPHI asserts that the revocation
of its registration of securities and permit to sell them to the public
is inequitable under the circumstances. It calls attention to the
severe and certain consequences of such revocation, i.e.,
termination of the public offering of its securities, return of
payments received from purchasers thereof, and its delisting from
the PSE, which will cause financial ruin and jeopardize its efforts to
recover from its current financial distress. Claiming that it exerted
best effort and exercised good faith in complying with the
reportorial requirements, URPHI avers that the interest of the
investing public will be better served if, instead of revoking its
registration of securities, the SEC will merely impose penalties and
allow it to continue as a going concern in the hope that it may later
return to profitability.
The petition is meritorious.
There is no dispute that violation of the reportorial
requirements under Section 17.119 of the Amended Implementing
Rules and Regulation20 of the SRC is a ground for suspension or
revocation of registration of securities pursuant to Sections 13.1
and 54.1 of the SRC. However, contrary to the CA ruling that
separate notices and hearings for suspension and revocation of
registration of securities and permit to sell them to the public are
required, Sections 13 .1 and 54.1 of the SRC expressly provide that
the SEC may suspend or revoke such registration only after due
notice and hearing, to wit:
13.1. The Commission may reject a registration statement and
refuse registration of the security thereunder, or revoke the
effectivity of a registration statement and the registration of the
security thereunder after due notice and hearing by issuing an
order to such effect, setting forth its findings in respect thereto, if
it finds that:
a) The issuer:
xxxx
(ii) Has violated any of the provisions of this Code, the rules
promulgated pursuant thereto, or any order of the Commission of
which the issuer has notice in connection with the offering for
which a registration statement has been filed;21
xxxx
54.1. If, after due notice and hearing, the Commission finds
that: (a) There is a violation of this Code, its rules, or its orders; (b)
Any registered broker or dealer, associated person thereof has
failed reasonably to supervise, with a view to preventing violations,
another person subject to supervision who commits any such
violation; ( c) Any registrant or other person has, in a registration
statement or in other reports, applications, accounts, records or
documents required by law or rules to be filed with the
Commission, made any untrue statement of a material fact, or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading; or, in the
case of an underwriter, has failed to conduct an inquiry with
reasonable diligence to insure that a registration statement is
accurate and complete in all material respects; or ( d) Any person
has refused to permit any lawful examinations into its affairs, it
shall, in its discretion, and subject only to the limitations
hereinafter prescribed, impose any or all of the following sanctions
as may be appropriate in light of the facts and circumstances:
(i) Suspension, or revocation of any registration for the offering
of securities;22
The Court has consistently held that the essence of due
process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain one's side or
an opportunity to seek a reconsideration of the action or ruling
complained of.23 Any seeming defect in its observance is cured by
the filing of a motion for reconsideration, and denial of due process
cannot be successfully invoked by a party who has had the
opportunity to be heard on such motion.24 What the law prohibits
is not the absence of previous notice, but the absolute absence
thereof and the lack of opportunity to be heard.25
In the present case, due notice of revocation was given to
URPHI through the SEC Order dated July 27, 2004 which reads:
Considering that the company is under rehabilitation, the
request was granted and it was given a non-extendible period until
May 31, 2004 within which to comply.
Despite the extension[,] however, it failed to submit said
reports. Hence, a hearing was held on July 6, 2004 wherein the
company's representative, its Chief Accountant and a Researcher
appeared. No sufficient reason or justification for the company's
inability to comply with its reporting obligation was presented.
In view thereof, the Commission[,] in its meeting held on July
22, 2004, resolved to SUSPEND the Registration of Securities and
Permit to Sell Securities to the Public issued to UNIVERSAL
RIGHTFIELD PROPERTY HOLDINGS, INC., in accordance with Section
54 of the Securities Regulation Code.
This said Suspension shall be effective for sixty (60) days or
until the reporting requirements are complied [with,] otherwise
the Commission shall proceed with the revocation of the
company's registration of securities.
Let this Order be published in a newspaper of general
circulation in the Philippines or on the Commission's web page.
SO ORDERED.26
Contrary to the view that a separate notice of hearing to
revoke is necessary to initiate the revocation proceeding, the Court
holds that such notice would be a superfluity since the Order dated
July 27, 2004 already states that such proceeding shall ensue if
URPHI would still fail to submit the reportorial requirements after
the lapse of the 60-day suspension period. After all, "due notice"
simply means the information that must be given or made to a
particular person or to the public within a legally mandated period
of time so that its recipient will have the opportunity to respond to
a situation or to allegations that affect the individual's or public's
legal rights or duties.27
Granted that no formal hearing was held before the issuance
of the Order of Revocation, the Court finds that there was
substantial compliance with the requirements of due process when
URPHI was given opportunity to be heard. Upon receipt of the SEC
Order dated July 27, 2004, URPHI filed the letters dated September
13 and 28, 2004, seeking a final extension to submit the reportorial
requirements, and admitting that its failure to submit its 2nd
Quarterly Report for 2004 was due to the same reasons that it was
unable to submit its 2003 Annual Report and 1st Quarterly Report
for 2004. Notably, in its Order of Revocation, the SEC considered
URPHI's letters and stated that it still failed to submit the required
reports, despite the lapse of the final extension requested.
In A.Z. Arnaiz, Realty, Inc. v. Office of the President,28 the Court
held that due process, as a constitutional precept, does not always,
and in all situations, require a trial-type proceeding. Litigants may
be heard through pleadings, written explanations, position papers,
memoranda or oral arguments. The standard of due process that
must be met in administrative tribunals allows a certain degree of
latitude as long as fairness is not ignored. It is, therefore, not legally
objectionable for being violative of due process for an
administrative agency to resolve a case based solely on position
papers, affidavits or documentary evidence submitted by the
parties. Guided by the foregoing principle, the Court rules that
URPHI was afforded opportunity to be heard when the SEC took
into account in its Order of Revocation URPHI's September 13 and
28, 2004 letters, explaining its failure to submit the reportorial
requirements, as well as its request for final extension within which
to comply. Pertinent portions of the said Order read:
The Commission in its meeting held on July 22, 2004 resolved
to suspend its Registration of Securities and Permit to Sell
Securities to the Public. The Order of Suspension stated that it was
to be effective for sixty (60) days or until the reporting
requirements were complied with by the company; otherwise, the
Commission shall proceed with the revocation of the company's
registration of securities.
The sixty (60)-day period had elapsed on September 25, 2004
but the Commission received a letter on September 29, 2004 from
the President of the company, Mr. Jose L. Merin. In the said letter,
it was admitted that the corporation had failed to submit its 2003
Annual Report (SEC Form 17-A) and its 2004 1st and 2nd Quarterly
Reports (SEC Form 17-Q) but explained that the reason for its
inability to submit said reports was due to the non-finalization of
the company's audited financial statements for the fiscal year
ended December 31, 2003. It further stated that during its meeting
with its external auditor, SGV & Co., last September 8, 2004, SGV
agreed to facilitate the finalization of its financial statements within
two (2) weeks. The corporation foresaw the impossibility of
complying with its submission until the end of the month as the
partners of SGV were still reviewing the final draft of the financial
statements, thus, the request for extension FOR THE LAST TIME
until November 15, 2004 within which to comply.
SEC Form 17-A (for 2003) was finally submitted on December
1, 2004.
IN VIEW THEREOF, the Commission, in its meeting held on
December 2, 2004, resolved to REVOKE the Registration of
Securities and Permit to Sell Securities to the Public issued to
UNIVERSAL RIGHTFIELD PROPERTY HOLDINGS, INC.29
Aside from having been given the opportunity to be heard
before the SEC issued the Order of Revocation, URPHI was likewise
able to seek reconsideration of such action complained of. After
the issuance of the said Order, URPHI filed a Notice of Appeal and
a Memorandum, asserting that it was issued without due notice
and hearing, and that the revocation is inequitable under the
circumstances. In the Resolution dated December 15, 2004, the SEC
denied URPHI's appeal in this wise:
In the instant case, URPHI was accorded due process when its
Chief Financial Officer gave its side on the imputed violation and
informed the Commission that it will not be able to submit its
Annual Report (SEC Form 17-A) for the fiscal year ending on 31
December 2003 and requested for additional time to comply with
the said requirements. The Commission granted URPHI a non-
extendible period of forty-seven (47) calendar days or until 15
November 2004 within which to comply.
In spite of the extension of time given, URPHI still failed to
submit the said reports. During the 06 July 2004 hearing where the
Chief Accountant and researcher of URPHI were present, both
failed to present sufficient justifications for URPHI's inability to
comply with its reporting obligations.
It is also noteworthy to mention that URPHI's Registration of
Securities and Permit to Sell Securities to the Public had been
revoked on several occasions on account of the same deficiency.
URPHI is aware of the SRC Rules and must suffer the consequences
of its reported violations.30
Verily, URPHI was given the opportunity to be heard before the
Order of Revocation was issued, as well as the opportunity to seek
the reconsideration of such order.
Meanwhile, the Court disagrees with URPHI's claim that the
Globe Telecom, Inc.31 ruling - that notice and hearing are
indispensable when an administrative agency exercises quasi-
judicial functions and that such requirements become even more
imperative if the statute itself demands it -is applicable to the
present case.
In Gamboa v. Finance Secretary,32 the Court has held that the
SEC has both regulatory and adjudicative functions, thus:
Under its regulatory responsibilities, the SEC may pass upon
applications for, or may suspend or revoke (after due notice and
hearing), certificates of registration of corporations, partnerships
and associations (excluding cooperatives, homeowners
associations, and labor unions); compel legal and regulatory
compliances; conduct inspections; and impose fines or other
penalties for violations of the Revised Securities Act, as well as
implementing rules and directives of the SEC, such as may be
warranted.
Relative to its adjudicative authority, the SEC has original and
exclusive jurisdiction to hear and decide controversies and cases
involving
–
a. Intra-corporate and partnership relations between or
among the corporation, officers and stockholders and partners,
including their elections or appointments;
 b. State and corporate affairs in relation to the legal existence
of corporations, partnerships and associations or to their
franchises; and
c. Investors and corporate affairs particularly in respect of
devices and schemes, such as fraudulent practices, employed by
directors, officers, business associates, and/or other stockholders,
partners, or members of registered firms; x x x
As can be gleaned from the aforequoted ruling, the revocation
of registration of securities and permit to sell them to the public is
not an exercise of the SEC's quasi-judicial power, but of its
regulatory power. A "quasi-judicial function" is a term which
applies to the action, discretion, etc., of public administrative
officers or bodies, who are required to investigate facts, or
ascertain the existence of facts, hold hearings, and draw
conclusions from them, as a basis for their official action and to
exercise discretion of a judicial nature.33 Although Section 13.1 of
the SRC requires due notice and hearing before issuing an order of
revocation, the SEC does not perform such quasi-judicial functions
and exercise discretion of a judicial nature in the exercise of such
regulatory power. It neither settles actual controversies involving
rights which are legally demandable and enforceable, nor
adjudicates private rights and obligations in cases of adversarial
nature. Rather, when the SEC exercises its incidental power to
conduct administrative hearings and make decisions, it does so in
the course of the performance of its regulatory and law
enforcement function.
Significantly, unlike in Globe Telecom, Inc.34 where the Court
ruled that the fine imposed by the NTC without notice and hearing,
was null and void due to the denial of petitioner's right to due
process, the revocation of URPHI's registration of securities and
permit to sell them to the public cannot be considered a penalty
but a withdrawal of a privilege, which regulatory power the SEC
validly exercised after giving it due notice and opportunity to be
heard.
While URPHI correctly relied in BLTB Co., Inc. v. Cadiao35 to
support its view that a motion for reconsideration is curative of a
defect in procedural due process only if a party is given sufficient
opportunity to explain his side of the controversy, the Court rejects
URPHI's claim that it did not have the opportunity to explain the
substantive controversy of its violation of the SRC reportorial
requirements.36 Contrary to the claim that only the issue of
procedural due process was raised in its appeal with the SEC, URPHI
also raised in its Memorandum dated January 3, 2005 the reasons
why it failed to comply with the said requirements, and why
revocation is inequitable under the circumstances.37
For the late filing of annual report and quarterly report, SEC
Memorandum Circular No. 6, Series of 2005, the Consolidated
Scale of Fines in effect at the time the offenses were committed,
provides for the following administrative penalties:
It bears emphasis that URPHI had committed several offenses
for failure to comply with the reportorial requirements for which it
was fined and its registration of securities revoked. On May 29,
2003, the SEC issued an Order revoking URPHI's Registration of
Securities and Permit to Sell Securities to the Public for its failure
to timely file its Year 2001 Annual Report and Year 2002 1st, 2nd
and 3rd Quarterly Reports. Then, on October 24, 2003, the SEC
granted URPHI's petition to lift the revocation, considering the
current economic situation, its belated filing of the required annual
and quarterly reports, and its payment of the reduced fine of
₱82,000.00. Despite the foregoing, URPHI failed again to submit its
2003 Annual Report, and Year 2004 1st, 2nd and 3rd Quarterly and its Order of Revocation dated December 8, 2004 are
Reports within the requested extension periods. REINSTATED.
Therefore, notwithstanding the belated filing of the said SO ORDERED.
reports, as well as the claim that public interest would be better
served if the SEC will merely impose penalties and allow it to
continue in order to become profitable again, the SEC cannot be
faulted for revoking once again URPHI's registration of securities
and permit to sell them to the public due to its repeated failure to
timely submit such reports. Needless to state, such continuing
reportorial requirements are pursuant to the state policies
declared in Section 238 of the SRC of protecting investors and
ensuring full and fair disclosure of information about securities and
their issuer.
All told, the CA erred in ruling that the SEC revoked URPHI's
registration of securities and permit to sell them to the public
without due process of law.1âwphi1 Quite the contrary, the
requirements of due notice and hearing under Sections 13 .1 and
54.1 of the SRC were substantially complied with. Due notice was
made through the Order dated July 27, 2004 stating that revocation
proceeding shall ensue if URPHI would still fail to submit the
reportorial requirements after the lapse of the 60-day suspension
period. Though no formal hearing was held, URPHI was still given
an opportunity to be heard through the letters dated September
13 and 18, 2004 before the Order of Revocation was issued, as well
as through its Notice of Appeal and Memorandum when it moved
to reconsider the said order.
WHEREFORE, the petition is GRANTED and the Decision dated
January 21, 2008 of the Court of Appeals in CA-G.R. SP No. 93337,
is REVERSED and SET ASIDE. In lieu thereof, the Resolution dated
December 15, 2005 of the Securities and Exchange Commission

SAN MIGUEL PROPERTIES, INC., Petitioner, v. BF HOMES,
INC., Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
BF Homes, Inc. (BF Homes) is the owner of several parcels of land
located in the northern portion of BF Homes Parañaque
Subdivision, particularly identified as Italia II lots.
BF Homes, represented by Florencio B. Orendain (Orendain), as
rehabilitation receiver appointed by the Securities and Exchange
Commission (SEC); and SMPI, represented by Federico C. Gonzales,
President, entered into three successive Deeds of Absolute Sale
whereby the former sold to the latter a total of 130 Italia II lots with
a combined area of 44,345 square meters for the aggregate
consideration of P106,247,701.00, broken down as follows:
SMPI completed the payments for the 130 Italia II lots in December
1995.6 In compliance with Section 37 of all the three Deeds of
Absolute Sale, BF Homes delivered the Transfer Certificates of Title
(TCTs) to SMPI but only for 110 of the 130 Italia II lots purchased by
SMPI.
SMPI, thru counsel, sent BF Homes a letter on May 20, 1996
demanding the delivery of the remaining 20 TCTs, specifically:
Despite receipt of the afore-mentioned letter, BF Homes failed or
refused to heed the demand of SMPI. Consequently, SMPI filed a
Complaint8 for specific performance with damages before the
HLURB on August 24, 2000 to compel BF Homes to deliver the
remaining 20 TCTs to SMPI. The case was docketed as HLURB Case
In its Answer (With Counterclaim),9 BF Homes alleged that the
Deeds of Absolute Sale executed in 1992 to 1993 were entered into
by Orendain in his personal capacity and without authority, as his
appointment as rehabilitation receiver was revoked by the SEC in
an Order dated May 17, 1989. In support of its counterclaims, BF
Homes averred that the consideration paid by SMPI for the 130
Italia II lots was grossly inadequate and disadvantageous to BF
Homes; and that the Deeds of Absolute Sale were undated and not
notarized. Hence, BF Homes prayed that the HLURB render
judgment: 1) dismissing the complaint of SMPI; 2) declaring the sale
of the 130 Italia II lots null and void; 3) ordering SMPI to reconvey
to BF Homes the titles for the [110] Italia II lots; and 4) ordering
SMPI to pay BF Homes exemplary damages, attorney's fees, and
cost of suit.
SMPI, in its Reply (Answer with Counterclaim dated October 16,
2000),10 countered that the validity of the three Deeds of Absolute
Sale was already upheld by the SEC in its Omnibus Order dated
November 7, 1994, and the motion for reconsideration of BF
Homes of said Omnibus Order was denied by the SEC in its
subsequent Order dated August 22, 1995. Both Orders were
deemed final, executory, and unappealable by the SEC in another
Omnibus Order dated July 31, 1996. As a result, the Deeds of
Absolute Sale were binding on BF Homes. SMPI further maintained
that Orendain was authorized to sign the Deeds of Absolute Sale
for and in behalf of FBO Networks Management, Inc. - the receiver
which the SEC appointed to replace Orendain, upon the latter's
motion to convert his involvement in the receivership from an
individual to a corporate capacity. SMPI additionally asserted that
absent substantiation, the allegation of BF Homes of inadequate
consideration for the sale of the Italia II lots was self-serving; and
that despite being undated and not notarized, the Deeds of
Absolute Sale were valid since they contained the essential
elements of a contract. And even assuming that the Deeds of
Absolute Sale may be rescinded, SMPI argued that BF Homes did
not offer and was not prepared to return the consideration paid by
SMPI, plus interest.
BF Homes filed a Rejoinder (To Complainant's Reply)11 contending
that the SEC Omnibus Order dated July 31, 1996 has not yet
become final as BF Homes assailed the said Order in a Petition
for Certioraribefore the SEC. In its Decision dated May 8, 1997, the
SEC neither confirmed the authority of Orendain nor cleared
Orendain/FBO Networks Management, Inc. from any liability for
his/its unauthorized acts, but clarified that the final report of the
rehabilitation receiver was not yet approved and was merely
admitted as part of the records. BF Homes also stated that although
the SEC Order dated September 12, 2000 already terminated the
rehabilitation proceedings because of the improvement in the
solvency status of BF Homes, BF Homes filed a Motion for
Clarification and/or Partial Reconsideration of said SEC Order and
sought a resolution of the issues relating to the receiver's irregular
acts, including the sale of the Italia II lots to SMPI. BiF Homes
insisted that the transactions entered into by Orendain were
anomalous as the latter sold the 130 Italia II lots to SMPI at a price
that was inadequate and disadvantageous to BF Homes.
Housing and Land Use Arbiter Rowena C. Balasolla (Arbiter
Balasolla) issued an Order dated January 22, 200112 directing the
parties to submit their respective position papers and supporting
evidence, as well as their draft decisions. Thereafter, the case was
deemed submitted for resolution.
In her Decision13 dated January 25, 2002, Arbiter Balasolla
suspended the proceedings in HLURB Case No. REM-082400-11183
for the following reasons:
What clearly is the issue to be resolved is whether or not [BF
Homes] is obligated to deliver the title of the remaining twenty (20)
lots to [SMPI] notwithstanding that the latter had fully paid the
same.
Were this is a simple case of non-delivery of title of the lot or unit
to the buyer upon full payment, sans the attendant problems, the
answer would readily be in the affirmative. But this is not so in the
instant case. This is a case of non-delivery of titles of a sale of 20
lots between two developers, and the lots sold are from an existing
subdivision, which was under rehabilitation and made by a receiver
which authority had been continuously questioned by the
controlling stockholders of a corporation under rehabilitation.
In the light thereof, it becomes imperative to discuss the
antecedent facts that would help in arriving at a judicious
resolution of the instant complaint.
Sometime in September 1984, respondent [BF Homes] filed with
the SEC a petition for rehabilitation and for declaration of
suspension of payments. In February 1988, the SEC appointed
Florencio Orendain as [BF Homes'] rehabilitation receiver. In May
1989, the SEC revoked the appointment of Mr. Orendain and
appointed FBO Networks Management, Inc. (FBO) as receiver of
the [BF Homes].
It was during the time 1992-1993 that [SMPI] bought from [BF
Homes] the 130 parcels of land located in the northern portion of
BF Homes, Paranaque City.
In June 1994, Mr. Orendain, on behalf of FBO, submitted to the SEC
the Closing Report on [BF Homes] I of the receivership program
covering the period from March 1988 to January 1994. [BF Homes]
protested and questioned the said report by filing the
corresponding pleadings with the SEC praying that the receivership
of FBO represented by Mr. Orendain be suspended due to
violations of trust and breach of fiduciary obligation and sought the
nullification of the transaction entered into by Mr. Orendain. In
November 1994, FBO was relieved of its duties and responsibilities
as rehabilitation receiver and a Committee of Receivers was
appointed in lieu thereof, to undertake and continue the
rehabilitation program of [BF Homes].
In July 1996, the SEC issued an Omnibus Order in regard to
rehabilitation case. Subsequently, however, [BF Homes] filed a
petition for review for which the SEC rendered a decision in May
1997. In the said decision, the SEC held that the admission of the
Receiver's Closing Report is merely for the purpose of receiving and
noting them for inclusion in the records of the case and not an
admittance (sic) and acceptance of the merits and veracity of the
contents thereof.
In September 2000, the SEC issued another Order terminating the
rehabilitation proceedings without, however, deciding on the
merits and veracity of the contents of the Receiver's Closing
Report. Hence, [BF Homes] filed in October 2000 a Motion for
Clarification and/or Partial Reconsideration of the said Order which
remains pending with the SEC until the present.
Apparently, it is in the context of the foregoing issues that [BF
Homes] refused to deliver the remaining twenty (20) titles of the
lots sold to [SMPI] as the former claimed, among others, that Mr.
Orendain did not have the authority to sell the 130 parcels of land
in the first place.
As the peculiar background of this case would tell, it is inevitable
that the resolution of the issues raised in the instant complaint
would be largely influenced by the outcome of the cases pending
in other tribunals which are directly and ineluctably related to the
issues brought before this Board.
This Board is cognizant of the fact that respondent had questioned
the action of its rehabilitation receiver before the SEC, raising
several issues against him, including but not limited, to his
authority to sell the subject lots to the complainant the resolution
of which is still pending the said body.
Thus, while this Board may have jurisdiction over the instant
complaint, the issue on whether or not Mr. Orendain has
overstepped his authority which is pending resolution by the SEC,
is to our mind a condition sine qua non, the final resolution of
which by said body is a logical antecedent to the issue involved in
the instant complaint and which only the SEC has exclusive
jurisdiction to decide.
Under the circumstances, we are inclined to suspend the
proceedings before the Board until the SEC shall have resolved with
finality on the issue of the authority of Mr. Orendain/FBO Networks
Management to enter into such transactions on behalf of [BF
Homes].
WHEREFORE, PREMISES CONSIDERED, this Office hereby suspends
the proceedings of the instant complaint until the final resolution
of the pending incidents before the Securities and Exchange
Commission.14chanrobleslaw
SMPI filed a Petition for Review (Re: Decision dated January 25,
2002)15 with the HLURB Board of Commissioners, asseverating
that: 1) the SEC, in its Orders dated November 7, 1994 and August
22, 1995, had upheld the validity of the Deeds of Absolute Sale and
confirmed the authority of the receiver to sell the 130 Italia II lots
to SMPI, and said Orders already became final after BF Homes
failed to appeal the same before the Court of Appeals, as provided
for in Section 3,16 Republic Act No. 5434, the law in force at that
time; 2) Orendain and/or FBO Networks Management, Inc. were
immune from suit pursuant to Section 9, Rule 917 of the Interim
Rules of Procedure Governing Intra-corporate Controversies and
Section 17, Rule 418 of the Interim Rules of Procedure on Corporate
Rehabilitation; 3) BF Homes was estopped from refusing to deliver
the remaining 20 titles since it had already received the
consideration and benefits from the sale of the Italia II lots to SMPI
and delivered 110 out of 130 TCTs to SMPI; 4) the principle of
suspending a case due to a prejudicial question only applies to
criminal cases; 5) BF Homes was mandated, under pain of criminal
sanction under Section 25,19 in relation to Section 3920 of
Presidential Decree No. 957,21 also known as "The Subdivision and
Condominium Buyer's Protection Decree," to deliver the TCTs of
the remaining 20 Italia II lots, which had already been fully paid for
by SMPI; 6) assuming that Orendain exceeded his authority as
receiver of BF Homes in selling the 130 Italia II lots to SMPI, then
Orendain could be held liable for damages but the titles to said lots
acquired by SMPI by reason of the sale would be unaffected, absent
any action for reconveyance instituted by BF Homes; and 7) the
issue regarding Orendain's authority to undertake the sale of the
Italia II lots to SMPI was rendered moot and academic by the
issuance of SEC Order dated September 12, 2000, terminating the
receivership of BF Homes.
After a further exchange of pleadings by the parties, the HLURB
Board of Commissioners22 rendered its Decision23 dated March 28,
2003, ruling thus:cralawlawlibrary
We find no evidence to support the argument that the SEC had
upheld with finality on the sales transaction entered into by
Orendain with [SMPI]. On the contrary the order of the SEC stated
that the closing report of the receiver is being accepted for
inclusion of the records and not an admittance (sic) or acceptance
of the merits and veracity of the contents thereof. The issue of
whether Orendain had authority to sell the lots is still unresolved.
While this board may have the competence to rule on the validity
of the sales transaction entered into by Orendain ostensibly in
behalf of BF Homes, we decline to rule on the said issue in
deference to the SEC or its successor-in-interest, which has first
taken cognizance of the issue, applying the doctrine of primary
jurisdiction. Thus, in Vidad vs. RTC of Negros Oriental, it was
held:chanRoblesvirtualLawlibrary
While no prejudicial question strictly arises where one is a civil case
and the other is an administrative proceeding, in the interest of
good order, it behooves the court to suspend its action on the cases
before it pending the final outcome of the administrative
proceedings. The doctrine of primary jurisdiction does not warrant
a court to arrogate unto itself the authority to resolve a controversy
the jurisdiction over which is initially lodged with an administrative
body [of special competence].
Wherefore, the petition for review is denied and the decision of the
office below is affirmed.24
chanrobleslaw
SMPI appealed the foregoing Decision of the HLURB Board of
Commissioners before the OP. The appeal was docketed as O.P.
Case No. 03-E-203. The OP, in its Decision25 dated January 27, 2004,
adjudged that the HLURB should have resolved HLURB Case No.
REM-082400-11183:cralawlawlibrary
The basic complaint in this case is one for specific performance
under Section 25 of Presidential Decree (PD) 957 - "The Subdivision
and Condominium Buyers' Protective", infra.
As early as August 1987, the Supreme Court already recognized the
authority of the HLURB, as successor agency of the National
Housing Authority (NHA), to regulate, pursuant to PD 957 in
relation to PD 1344, the real estate trade, with exclusive
jurisdiction to hear and decide cases "involving specific
performance of contractual and statutory obligations filed by
buyers of subdivision lots . . . against the owner, developer, dealer,
broker or salesman" (Antipolo Realty Corp. vs. National Housing
Authority (153 SCRA). Then came the reiterative rulings in Solid
Homes vs. Pavawal (177 SCRA 72 [1989]), United Housing Corp. vs.
Dayrit (181 SCRA 295 [1990]), and Realty Exchange Venture Corp.
vs. Sendino, 233 SCRA 665 [1994]. And as stressed in Realty
Exchange, citing C.T. Torres Enterprises, Inc. vs. Hibionada (191
SCRA 268 [1990], the HLURB, in the exercise of its adjudicatory
powers and functions, "must interpret and apply contracts,
determine the rights of the parties under these contracts and award
damages whenever appropriate."
Given its clear statutory mandate, the HLURB's decision to await
for some other forum to decide - if ever one is forthcoming - the
issue on the authority of Orendain to dispose of subject lots before
it peremptorily resolves the basic complaint is unwarranted, the
issues thereon having been joined and the respective position
papers and the evidence of the parties having been submitted. To
us, it behooved the HLURB to adjudicate, with usual dispatch, the
right and obligations of the parties in line with its appreciation of
the obtaining facts and applicable law. To borrow from Mabuhay
Textile Mills Corp. vs. Ongpin(141 SCRA 437), it does not have to
rely on the findings of others to discharge this adjudicatory
functions.26chanrobleslaw
The OP then proceeded to resolve the question of whether or not
SMPI was entitled to the delivery of the 20 TCTs:cralawlawlibrary
There can be no quibbling about the following postulates: 1) The
existence of a perfected deed of absolute sale covering the said
lots; 2) SMPI appears to be an innocent purchaser for value; 3) Full
payment and receipt by [BF Homes] of the stipulated purchase
price; 4) Admission by the SEC of FBO's audited Closing Report; 5).
Termination of the rehabilitation proceedings, and 6) The
obligation of the owner or developer under Sec. 25 of PD 957
to "deliver the title of the lot or units to the buyer upon [full]
payment of the lot or unit."
Given the foregoing perspective, the question thus formulated
should be answered in the affirmative. [BF Homes'] challenge
against the validity of the conveying deed on the ground of
inadequacy of the purchase price cannot be given cogency. As a
matter of law, lesion or inadequacy of cause shall not invalidate a
contract, save in cases specified by law or unless there has been
fraud, mistake or undue influence (Art. 1355, Civil Code). Thus, [BF
Homes'] allegation about the inadequacy of price for the twenty
(20) lots, even if true, cannot invalidate the sale in question, absent
a showing that such sale is a case exempted by law from the
operation of said article or that fraud, mistake or undue influence
attended the sale (Auyong Hian vs. CTA, 59 SCRA 110).
[BF Homes'] posture regarding the invalidity of the same sales
transaction owing to Orendain's alleged lack of authority to
execute the corresponding deed may be accorded serious
consideration were it not for its acceptance and retention of the
purchase price for the covered lots. As aptly argued in this appeal,
citing jurisprudence, estoppel attached to [BF Homes] when it
accepted the benefits arising from the performance of SMPI of its
undertaking under the contract of sale. By the doctrine of estoppel,
a party is barred from repudiating or canceling an otherwise
defective or rescissible contract by his receipt of payments due
thereunder (Republic v. Acoje Mining Co., Inc., 7 SCRA 361; Angeles
v. Calasanz, 135 SCRA 332); the bar of estoppel also precludes one
who, by his conduct, had induced another to act in a particular
manner, from adopting an inconsistent position that thereby
causes prejudice to another (Cruz vs. CA, 293 SCRA 239).
Significantly, Orendain signed the three deeds of sale adverted to
covering 130 lots in 1992 and 1993, or during FBO's watch as
receiver. Yet, [BF Homes] opted to fully implement the transactions
covered by two of these deeds and partially implement the third by
delivering the titles to 110 lots. In net effect, [BF Homes] did
recognize the authority of Orendain to execute those contracts. But
if Orendain was indeed bereft of authority during the time material,
as [BF Homes] would have this Office believe, how explain (sic) its
inaction to recover damages against one it veritably depicts as an
impostor?
x x x x
Much has been made about the sale of the 130 lots not having been
approved by the SEC. It bears to stress in this regard that the
Closing Report which, doubtless includes the said sale, had been
confirmed and admitted by the SEC Hearing Panel. It may be that
the Commission en banc did not specifically confirm and approve had ruled with finality on the issue of Orendain's authority to sell
the sale. But neither did it interpose objection thereto, let alone the 130 Italia II lots to SMPI:
disapprove the same. Be that as it may, the presumptive validity Presidential Decree No. 957 was issued on 12 July 1976. It was
and enforceability of such sale must be posited.27 promulgated to cover questions that relate to subdivisions and
chanrobleslaw condominiums. Its object is to provide for an appropriate
government agency, the HLURB, to which all parties aggrieved in
The OP denied the claims for damages of both parties for the enforcement of contractual rights with respect to said category
insufficiency of evidence but awarded attorney's fees in the of real estate may take course.
amount of PI00,000.00 to SMPI, which was compelled to litigate. In
the end, the OP decreed:cralawlawlibrary In the case of JESUS LIM ARRANZA vs. B.F. HOMES, INC., the
IN VIEW OF ALL THE FOREGOING, judgment is hereby entered Supreme Court said:
ordering BF Homes, Inc., to deliver to San Miguel Properties, Inc., Section 3 ofP.D. No. 957 empowered the National Housing
the corresponding titles to the lots subject of the instant case, free Authority (NHA) with the "exclusive jurisdiction to regulate the
from all liens aind encumbrances, except to the subdivision real estate trade and business." On 2 April
restrictions referred to in the conveying deed of sale, and to pay
the latter the sum of P100,000.00 as and. by way of attorneys' fees. 1978, P.D. No. 1344 was issued to expand the jurisdiction of the
All other claims and counterclaims are hereby DISMISSED. The NHA to include the following:
decision of the HLURB dated 28 March 2003 is accordingly SECTION 1. In the exercise of its functions to regulate the real
REVERSED and SET ASIDE.28chanrobleslaw estate trade and business and in addition to its powers provided
for in Presidential Decree No. 957, the National Housing Authority
BF Homes filed a Motion for Reconsideration but it was denied by shall have exclusive jurisdiction to hear and decide cases of the
the OP in a Resolution29 dated March 26, 2004. following nature:chanRoblesvirtualLawlibrary

Aggrieved, BF Homes sought recourse from the Court of Appeals by A. Unsound real estate business
way of a Petition for Review30 under Rule 43 of the Revised Rules practices;ChanRoblesVirtualawlibrary
of Court, which was docketed as CA-G.R. SP No. 83631. In its
Decision31dated January 31, 2005, the Court of Appeals agreed with B. Claims involving refund and any other claims filed by
the OP that the HLURB had the primary and exclusive jurisdiction subdivision lot or condominium unit buyer against the project
to resolve the complaint for specific performance and damages of owner, developer, dealer, broker or salesman; and
SMPI and should not have suspended the proceedings until the SEC
C. Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lot or
condominium unit asainst the owner, developer, dealer, broker or
salesman. (Emphasis supplied.)
Thereafter, the regulatory and quasi-judicial functions of the NHA
were transferred to the Human Settlements Regulatory
Commission (HSRC) by virtue of Executive Order No. 648 dated 7
February 1981. Section 8 thereof specifies the functions of the
NHA that were transferred to the HSRC including the authority to
hear and decide "cases on unsound real estate business practices;
claims involving refund filed against project owners, developers,
dealers, brokers or salesmen and cases of specific
performance." Executive Order No. 90 dated 17 December 1986
renamed the HSRC as the Housing and Land Use Resulatory
Board (HLURB). (Underscoring supplied.)
Certainly, in the instant case, [SMPI] is a buyer within the
contemplation of P.D. 957. Clearly, the acquisition of the one
hundred thirty (130) lots was for a valuable consideration.
The jurisdiction of the SEC, on the other hand, is defined by P.D.
No. 902-A, as amended, as follows:
Sec. 5. In addition to the regulatory and adjudicative functions of
the Securities and Exchange Commission over corporations,
partnerships and other forms of associations registered with it as
expressly granted under existing laws and decrees, it shall have
original and exclusive jurisdiction to hear and decide cases
involving.
(a) Devices or schemes employed by or any acts, of the board of
directors, business associates, its officers or partnership,
amounting to fraud and misrepresentation which may be
detrimental to the interest of the public and/or of the stockholder,
partners, members of associations or organizations registered
with the Commission;ChanRoblesVirtualawlibrary
(b) Controversies arising out of intra-corporate or partnership
relations, between and among stockholders, members, or
associates; between any or all of them and the corporation,
partnership or association of which they are stockholders,
members or associates, respectively; and between such
corporation, partnership or association and the state insofar as it
concerns their individual franchise or right to exist as such entity;
and
(c) Controversies in the election or appointments of directors,
trustees, officers or managers of such corporations, partnerships
or associations.
In the ARRANZA case, the Supreme Court said that:
For the SEC to acquire jurisdiction over any controversy under
these provisions, two elements must be considered: (1) the status
or relationship of the parties; and (2) the nature of the Question
that is the subject of their controversy.
The first element requires that the controversy must arise "out of
intra-corporate or partnership relations between and among
stockholders, members or associates; between any or all of them
and the corporation, partnership or association of which they are
stockholders, members or associates, respectively; and between
such corporation, partnership or association and the State in so
far as it concerns their individual franchises.
In the instant case, [SMPI] is not a stockholder, member or
associate of [BF Homes]. It is a lot buyer in the subdivision
developed by [BF Homes.]
The second element requires that the dispute among the parties
be intrinsically connected with the regulation or the internal affairs
of the corporation, partnership or association.
In the case at hand, [SMPI's] complaint before the HLURB is for
specific performance to enforce its rights as purchaser of
subdivision lots as regards the delivery of twenty (20) TCTs.
Certainly, the issue in this case is not related to the "regulation" of
[BF Homes] or to [BF Homes'] "internal affairs."
As a matter of fact, Section 25 of PD 957 provides:
Section 25. Issuance of Title. The owner or developer shall deliver
the title of the lot or unit to the buyer upon full payment of the lot
or unit. No fee, except those required for the registration of the
deed of sale in the Registry of Deeds, shall be collected for the
issuance of such title. In the event a mortgage over the lot or unit
is outstanding at the time of the issuance of the title to the buyer,
the owner or developer shall redeem the mortgage or the
corresponding portion thereof within six months from such
issuance in order that the title over any fully paid lot or unit may
be secured and delivered to the buyer in accordance herewith,
(underscoring supplied.)
In the above-mentioned case of Arranza, the Supreme Court also
said:
P.D. No. 902-A, as amended, defines the jurisdiction of the SEC;
while P.D. No. 957, as amended, delineates that of the HLURB.
These two quasi-judicial agencies exercise functions that are
distinct from each other. The SEC has authority over the operation
of all kinds of corporations, partnerships or associations with the
end in view of protecting the interests of the investing public and
creditors. On the other hand, the HLURB has jurisdiction over
matters relating to observance of laws governing corporations
engaged in the specific business of development of subdivisions and
condominiums. The HLURB and the SEC being bestowed with
distinct powers and functions, the exercise of those functions by one
shall not abate the performance by the other of its own functions.
As respondent puts it, "there is no contradiction between P.D. No.
902-A and P.D. No. 957."
Hence, the powers of the HLURB can not be in derogation of the
SEC's authority. P.D. Nos. 902-A and 957 are laws in pari materia.
This is because P.D. No. 902-A relates to all corporations, while P.D.
No. 957 pertains to corporations engaged in the particular business
of developing subdivisions and condominiums.
Next, this brings us to the collateral issue of whether or not HLURB
properly suspended the proceeding until SEC shall have resolved
with finality the issue of authority of Mr. Orendain.
Given the foregoing perspective, the collateral issue thus
formulated should be answered in the negative. Furthermore, in
several cases decided by the Supreme Court, the High Court has
consistently ruled that the NHA or the HLURB has jurisdiction over
complaints arising from contracts between the subdivision
developer and the lot buyer or those aimed at compelling the
subdivision developer to comply with its contractual and statutory
obligations.
Hence, the HLURB should take jurisdiction over respondent's
complaint because it pertains to matters within the HLURB's
competence and expertise. The proceedings before the HLURB
should not be suspended.32chanrobleslaw
The Court of Appeals, however, differed from the OP Decision by
ordering the; remand of the case to the HLURB in recognition of the
doctrine of primary jurisdiction. The dispositive portion of the
Decision of the appellate court reads:
WHEREFORE, the questioned Decision of the Office of the
President [is] AFFIRMED with modification. The case is REMANDED
to the Housing and Land Use Regulatory Board for continuation of
proceedings with dispatch.33
SMPI filed a Motion for Partial Reconsideration (Re: Decision dated
January 31, 2005)34 insofar as the Court of Appeals remanded the
case to the HLURB for further proceedings. The appellate court
denied said Motion in a Resolution35 dated August 9, 2005.
SMPI now comes before this Court,. through the instant Petition,
assailing the aforementioned Decision and Resolution of the Court
of Appeals based on the following assignment of errors:
I.
THE COURT OF APPEALS' DECISION DATED 31 JANUARY 2005
REMANDING THE CASE TO THE HLURB IS CONSTITUTIONALLY
FLAWED AND A PATENT NULLITY CONSIDERING THAT: IT
MISERABLY FAILED TO DISCUSS CLEARLY AND DISTINCTLY THE
LEGAL BASIS AND/OR JUSTIFICATION FOR REMANDING THE CASE
TO THE HLURB AS MANDATED BY SECTION 14, ARTICLE VIII, 1987
CONSTITUTION.
1. WORSE, THE COURT OF APPEALS FAILED TO IDENTIFY THE
FACTUAL MATTERS THAT IT CLAIMS NEED STILL BE TRIED
OR DETERMINED BY THE HLURB THAT WOULD HAVE
JUSTIFIED THE REMAND OF THE CASE.
2. IN ANY EVENT, [BF HOMES] AND THE COURT OF APPEALS'
CLAIMED DOCTRINE OF PRIMARY JURISDICTION IS
FOREVER BARRED AS IT COULD NOT BE INVOKED FOR THE
FIRST TIME ON APPEAL.
3. EVEN ASSUMING ARGUENDO THAT THE DOCTRINE OF
PRIMARY JURISDICTION IS STILL INVOCABLE, IT IS
NONETHELESS INAPPLICABLE SINCE THE PARTIES HAD DULY
AMPLIFIED THEIR RESPECTIVE CAUSES OF ACTION AND
DEFENSES VIA THEIR SUBMISSION OF PLEADINGS AND
POSITION PAPERS BEFORE THE HLURB, AND UPON WHICH
THE OFFICE OF THE PRESIDENT DECIDED ON THE MERITS.
II.
EVEN THEN, THE COURT OF APPEALS COMMITTED GRAVE, SERIOUS
AND REVERSIBLE ERROR WHEN IT REMANDED THE CASE TO THE
HLURB FOR FURTHER "PRESENTATION OF EVIDENCE" DESPITE THE
DECISION ON THE MERITS OF THE OFFICE OF THE PRESIDENT IN
THAT:
1. THE ISSUE HERE BEING A SIMPLE QUESTION OF LAW ON
WHETHER OR NOT SMPI WAS ENTITLED TO THE DELIVERY
OF THE BALANCE OF 130 FULLY PAID LOTS/TITLES OR
EQUIVALENT TO TWENTY (20) TITLES, THE COURT OF
APPEALS SHOULD HAVE AFFIRMED THE DECISION ON THE
MERITS OF THE OFFICE OF THE PRESIDENT.
2. IN FACT, THE RELEVANT FACTS OF THE CASE, E.G. FULL
PAYMENT OF THE PURCHASE PRICE OF THE SUBJECT LOTS
IN FAVOR OF [BF HOMES] AND NON-DELIVERY TO SMPI OF
THE TITLES OVER THE SUBJECT LOTS BY [BF HOMES], WERE
 UNDISPUTED AND MORE SO ADMITTED BY THE PARTIES IN
THEIR RESPECTIVE HLURB POSITION PAPERS AND OTHER
PLEADINGS FOR WHICH NO TRIABLE EVIDENTIARY MATTER
IS LEFT TO BE RESOLVED BY THE HLURB.
3. INDEED, THE OFFICE OF THE PRESIDENT, PER ITS DECISION
DATED 27 JANUARY 2004, CORRECTLY RESOLVED THIS
SIMPLE ISSUE, AND FORTUNATELY IN FAVOR OF SMPI,
BASED ON THE PLEADINGS AND POSITION PAPERS FILED BY
THE PARTIES IN ACCORDANCE WITH SECTION 5, RULE VI,
HLURB RULES. THE COURT OF APPEALS OUGHT TO HAVE
SIMILARLY ENFORCED THIS HLURB RULE.
4. FURTHER PROCEEDINGS BEFORE THE HLURB IS DILATORY,
UNNECESSARY, SUPERFLUOUS AND CIRCUITOUS.
HIERARCHICALLY (sic), THE HLURB IS PRECLUDED AND
BARRED FROM REOPENING, MUCH LESS REVERSING THE
DECISION OF THE OFFICE OF THE PRESIDENT.
5. THE COURT OF APPEALS' STANCE IS TANTAMOUNT TO A RE-
OPENING OF THE OFFICE OF THE PRESIDENT'S DECISION,
HENCE WOULD WREAK HAVOC TO THE DOCTRINE OF
SUBSTANTIAL RES JUDICATA.
6. IF AT ALL, THE HLURB NEED ONLY BE DIRECTED TO RESOLVE
SMPI'S PENDING MOTION FOR EXECUTION, AND NOT
CONDUCT FURTHER PROCEEDINGS FOR RECEPTION OF THE
PARTIES' EVIDENCE THAT ARE UNSPECIFIED.
III.
THE COURT OF APPEALS COMMITTED GRAVE, SERIOUS AND
REVERSIBLE ERROR WHEN IT FAILED AND/OR REFUSED TO AFFIRM
THE OFFICE OF THE PRESIDENT'S DECISION DATED 27 JANUARY
2004 IN THAT:
1. THE SUBJECT SALE TRANSACTIONS, DULY APPROVED AND
CONFIRMED BY THE SEC PER ITS ORDERS DATED 07
NOVEMBER 1994 AND 31 JULY-1996, ARE PRESUMED VALID
AND REGULAR SINCE THESE WERE OFFICIAL ACTS OF SEC-
APPOINTED RECEIVER MR. FLORENCIO B. ORENDAIN.
2. IN FACT, SEC RECEIVER ORENDAIN'S ACTS CANNOT BE
IMPUGNED BY [BF HOMES] SINCE UNDER SECTION 9, RULE
9, INTERIM RULES OF PROCEDURE GOVERNING INTRA-
CORPORATE CONTROVERSIES AND SECTION 17, RULE 4,
INTERIM RULES OF PROCEDURE ON CORPORATE
REHABILITATION, WHICH OPERATES RETROACTIVELY BEING
A PROCEDURAL RULE, RECEIVERS ENJOY IMMUNITY FROM
SUITS ARISING FROM THE EXERCISE OF THEIR FUNCTIONS
AND DUTIES.
3. NONETHELESS, [BF HOMES] IS ESTOPPED FROM REFUSING
TO DELIVER THE REMAINING 20 TCTs SINCE IT HAD
PREVIOUSLY DELIVERED TO SMPI 110 TCTs OUT OF 130
TCTs FOR WHICH [BF HOMES] HAD DULY .RECEIVED FULL
PAYMENT THEREFOR IN THE TOTAL AMOUNT
PHP104,600,402.47.36 CONSEQUENTLY, [BF HOMES] IS
OBLIGED TO DELIVER THE TITLES TO SMPI PURSUANT TO
SECTION 25, P.D. 957.
4. THE MATTER OF THE PURCHASE PRICE IS IRRELEVANT
CONSIDERING THE BIG VOLUME INVOLVED. IN FACT, THE
AVERAGE PURCHASE PRICE OF THE LOTS IN THE AMOUNT
OF PHP2,500.00 PER SQ. M. IS VALID AND REASONABLE
SINCE THE SALE INVOLVED A TOTAL OF 130 LOTS
AMOUNTING TO PHP 104,600,402.47.
5. EVEN ASSUMING ARGUENDO THAT THERE MAY BE
SUBSTANTIAL DISPARITY BETWEEN THE AVERAGE
PURCHASE PRICE OF PHP2.500/SQ.M. AND THE MARKET
 VALUE AT PHP3,500/SQ.M. AS [BF HOMES] CLAIMS, MERE
INADEQUACY OF THE PURCHASE PRICE, STANDING ALONE
AND WITHOUT PROOF OF ACTUAL FRAUD, CANNOT
INVALIDATE THE PARTIES' SALES CONTRACT PER ARTICLE
1355, NEW CIVIL CODE.
6. IF AT ALL, [BF HOMES'] REMEDY IS TO FILE THE
APPROPRIATE ACTION FOR RECONVEYANCE WITH THE
REGULAR COURT, ABSENT WHICH, IT IS LEGALLY BOUND TO
DELIVER TO SMPI THE SUBJECT TITLES.
7. ACCORDINGLY, SINCE SMPI WAS CONSTRAINED TO
LITIGATE DUE TO [BF HOMES'] UNJUSTIFIED REFUSAL TO
DELIVER THE SUBJECT TITLES, SMPI IS ENTITLED TO THE
PAYMENT OF ATTORNEY'S FEES.37
The Petition is meritorious.
Presidential Decree No. 95738 dated July 12, 1976 conferred
exclusive jurisdiction to regulate the real estate trade and business
upon the National Housing Authority (NHA).39 Presidential Decree
No. 134440dated April 2, 1978 expanded the quasi-judicial powers
of NHA by providing as follows:
Section 1. In the exercise of its functions to regulate the real estate
trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall
have exclusive jurisdiction to hear and decide cases of the
following nature: Unsound real estate business practices; Claims
involving refund and any other claims filed by subdivision lot or
condominium unit buyer against the project owner, developer,
dealer, broker or salesman; and
A. Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, dealer,
broker or salesman." (Emphases ours.)
Per Executive Order No. 64841 dated February 7, 1981, the powers
of the NHA were transferred to the Human Settlements Regulatory
Commission, which, pursuant to Executive Order No. 90 dated
December 17, 1986, was subsequently renamed as
HLURB.42 In Siasoco v. Narvaja,43 the Court highlighted the
exclusive jurisdiction of the HLURB over complaints for specific
performance in certain real estate transactions
Under the Executive Order creating it, the HLURB has exclusive
jurisdiction to "hear and decide cases of unsound real estate
business practices; claims involving refund filed against project
owners, developers, dealers, brokers, or salesmen; and cases of
specific performance." Accordingly, in United Housing Corporation
v. Dayrit, we ruled that it is the HLURB, not the trial court, which
has jurisdiction over complaints for specific performance filed
against subdivision developers to compel the latter to execute
deeds of absolute sale and to deliver the certificates of title to
buyers. (Emphases supplied.)
The Court reiterated in Bank of the Philippines Islands v. ALS
Management and Development Corporation44 that
[T]he jurisdiction of the HLURB over cases enumerated in Section 1
of PD No. 1344 is exclusive. Thus, we have ruled that the board
has sole jurisdiction in a complaint of specific performance for the
delivery of a certificate of title to a buyer of a subdivision lot; for
claims of refund regardless of whether the sale is perfected or not;
and for determining whether there is a perfected contract of sale.
(Emphases supplied.)

It is clear from the plain language of Section 1 of Presidential
Decree No. 1344 and aforecited jurisprudence that the HLURB had
exclusive jurisdiction over the complaint for specific performance
filed by SMPI against BF Homes for the delivery of the remaining 20
TCTs.
In fact, in the instant case, the HLURB did exercise jurisdiction over
and did take cognizance of the complaint of SMPI. Arbiter Balasolla
received pleadings and evidences from the parties, and after the
period for filing position papers and draft decisions by the parties
had lapsed, deemed the case submitted for decision. However, at
this stage, Arbiter Balasolla demurred, and instead of deciding the
case, suspended the proceedings until the SEC ruled on the issue of
whether or not Orendain, the receiver of BF Homes, had authority
to execute the Deeds of Absolute Sale over the 130 Italia II lots in
favor of SMPI. On appeal, the HLURB Board of Commissioners
affirmed the suspension of proceedings.
When the case was appealed to the OP by SMPI, and then to the
Court of Appeals by BF Homes, both the OP and the Court of
Appeals sustained the jurisdiction of HLURB over the complaint for
specific performance filed by SMPI, the only difference being that
the OP proceeded to resolve the case on the merits based on the
evidence on record while the appellate court remanded the case to
the HLURB for further proceedings.
The OP and the Court of Appeals are correct that the HLURB, in the
exercise of its exclusive jurisdiction, did not have to suspend the
proceedings and should have went ahead to resolve the complaint
for specific performance filed by SMPI given its statutory mandate
under Section 1 of Presidential Decree No. 1344 and its technical
competence and expertise over the subject matter. The HLURB was
called upon to determine the contractual obligations of BF Homes
and SMPI, as seller and buyer of subdivision lots, respectively,
under the terms and conditions of the Deeds of Absolute Sale in
relation to the provisions of Presidential Decree No. 957. In
contrast, the proceedings before the SEC involved the receivership
of BF Homes, an intra-corporate matter, as pointed out by the
Court of Appeals. While the HLURB and SEC proceedings may be
related (i.e., Orendain executed the Deeds of Absolute Sale of the
130 Italia II lots as receiver of BF Homes), the two cases could
proceed independently of one another. A ruling by the SEC that
Orendain did not have or had exceeded his authority as receiver in
executing the Deeds of Absolute Sale is not absolutely
determinative of the fate of the complaint for specific performance
of SMPI before the HLURB. It would not automatically result in the
nullification or rescission of the said Deeds or justify the refusal of
BF Homes to deliver the 20 TCTs to SMPI as there would be other
issues which need to be considered, such as the good faith or bad
faith of SMPI as buyer, ratification by BF Homes of the
Deeds, etc., and the HLURB is not obliged to suspend its
proceedings until all of these issues are resolved or decided by
other courts/tribunals. HLURB could already make a preliminary
finding on the validity of the Deeds of Absolute Sale executed by
Orendain for the purpose of ascertaining the right of SMPI to the
delivery of the 20 TCTs. The HLURB is behooved to settle the
controversy brought before it with dispatch if only to achieve the
purpose of Presidential Decree No. 957, to wit
The provisions of P.D No. 957 were intended to encompass all
questions regarding subdivisions and condominiums. The intention
was to provide for an appropriate government agency, the HLURB,
to which all parties - buyers and sellers of subdivision and
condominium units - may seek remedial recourse. The law
recognized, too, that subdivision and condominium development
involves public interest and welfare and should be brought to a
body, like the HLURB, that has technical expertise. In the exercise
of its powers, the HLURB, on the other hand, is empowered to
interpret and apply contracts, and determine the rights of private
parties under these contracts. This ancillary power, generally
judicial, is now no longer with the regular courts to the extent that
the pertinent HLURB laws provide.45
Nonetheless, the Court disagrees with the Court of Appeals and
finds no more need to remand the case to the HLURB.
To recall, the parties were able to file pleadings and submit
evidence before Arbiter Balasolla. The case was already deemed
submitted for resolution with Arbiter Balasolla stopping short only
of actually rendering a decision. Taking into account that the
necessary pleadings and evidence of the parties are already on
record, returning the instant case to the HLURB for further
proceedings will simply be circuitous and inconsistent with the
summary nature of HLURB proceedings.46 The Court keeps in mind
the shared objective of Rule 1, Section 2 of the 1996 Rules of
Procedure of the HLURB, as amended, and Rule 1, Section 6 of the
Revised Rules of Court to promote a just, speedy, and inexpensive
disposition/determination of every action.47
Pursuant to the doctrine of primary jurisdiction, "the courts cannot
or will not determine a controversy involving a question which is
within the jurisdiction of an administrative tribunal, where the
question demands the exercise of sound administrative discretion
requiring the special knowledge, experience, and services of the
administrative tribunal to determine technical and intricate
matters of fact, and a uniformity of ruling is essential to comply
with the purposes of the regulatory statute
48
administered." However, said doctrine is not an absolute or
inflexible rule. The Court recognized several exceptions in Republic
v. Lacap,
[T]he doctrine of exhaustion of administrative remedies and the
corollary doctrine of primary jurisdiction, which are based on
sound public policy and practical considerations, are not inflexible
rules. There are many accepted exceptions, such as: (a) where
there is estoppel on the part of the party invoking the doctrine; (b)
where the challenged administrative act is patently illegal,
amounting to lack of jurisdiction; (c) where there is unreasonable
delay or official inaction that will irretrievably prejudice the
complainant; (d) where the amount involved is relatively small so
as to make the rule impractical and oppressive; (e) where the
question involved is purely legal and will ultimately have to be
decided by the courts of justice; (f) where judicial intervention is
urgent; (g) when its application may cause great and irreparable
damage; (h) where the controverted acts violate due process; (i)
when the issue of non-exhaustion of administrative remedies has
been rendered moot; (j) when there is no other plain, speedy and
adequate remedy; (k)when strong public interest is involved; and,
(1) in quo warranto proceedings, x x x. (Emphases
supplied.)chanrobleslaw
The contractual relationship between BF Homes as owner and
SMPI as buyer of subdivision lots is governed by Presidential Decree
No. 957 and is undeniably imbued with public interest. Hence, it is
crucial that the dispute between them be resolved as swiftly as
possible. In Spouses Chua v. Ang,50 the Court declared that "public
interest and welfare are involved in subdivision and condominium
development, as the terms of Presidential Decree Nos. 957 and
1344 expressly reflect, x x x Shelter is a basic human need whose
fulfillment cannot afford any kind of delay."
Even if the case is no longer remanded, BF Homes cannot claim
denial of due process. "The essence of due process is to be heard,
and, as applied to administrative proceedings, this means a fair and
reasonable opportunity to explain one's side, or an opportunity to
seek a reconsideration of the action or ruling complained of.
Administrative due process cannot be fully equated with due
process in its strict judicial sense, for in the former a formal or trial-
type hearing is not always necessary, and technical rules of
procedure are not strictly applied."51 In the instant case, SMPI and
BF Homes were afforded the opportunity to present and address
each other's arguments through an exchange of pleadings, as well
as to submit their respective evidence before Arbiter Balasolla. To
recall, the case was already submitted for decision before Arbiter
Balasolla, meaning, there is nothing more left for the parties to
submit or do. To remand the case and repeat the entire process
once again before the HLURB Arbiter will not only be impractical,
but also unreasonable and oppressive for SMPI.
Relevant herein are the following pronouncements of the Court
in Ching v. Court of Appeals52:
[T]he Supreme Court may, on certain exceptional instances, resolve
the merit:? of a case on the basis of the records and other evidence
before it, most especially when the resolution of these issues
would best serve the ends of justice and promote the speedy
disposition of cases.
Thus, considering the peculiar circumstances attendant in the
instant case, this Court sees the cogency to exercise its plenary
power:
"It is a rule of procedure for the Supreme Court to strive to settle
the entire controversy in a single proceeding leaving no root or
branch to bear the seeds of future litigation. No useful purpose will
be served if a case or the determination of an issue in a case is
remanded to the trial court only to have its decision raised again to
the Court of Appeals and from there to the Supreme Court (citing
Board of Commissioners vs. Judge Joselito de la Rosa and Judge
Capulong, G.R. Nos. 95122-23).
"We have laid down the rule that the remand of the case or of an
issue to the lower court for further reception of evidence is not
necessary where the Court is in position to resolve the dispute
based on the records before it and particularly where the ends of
justice would not be subserved by the remand thereof (Escudem
vs. Dulay, 158 SCRA 69). Moreover, the Supreme Court is clothed
with ample authority to review matters, even those not raised on
appeal if it finds that their consideration is necessary in arriving at
a just disposition of the case."
On many occasions, the Court, in the public interest and for the
expeditious administration of justice, has resolved actions on the
merits instead of remanding them to the trial court for further
proceedings, such as where the ends of justice would not be
subserved by the remand of the case.
Consequently, the Court proceeds to resolve the primary issue in
this case: Whether or not SMPI is entitled to the delivery of the
remaining 20 TCTs for the lots it purchased from BF Homes.

The Court answers affirmatively.
Section 25 of Presidential Decree No. 957 explicitly mandates that
"[t]he owner or developer shall deliver the title of the [subdivision]
lot or [condominium] unit to the buyer upon full payment of the lot
or unit."
Section 3 of all the three Deeds of Absolute Sale also reads:
3. [BF Homes] likewise covenants to deliver to [SMPI] the
properties free and clear of tenants, if any, and shall submit any
and all titles, documents and/or papers which may be required to
effect the transfer of the properties to [SMPI][.]53chanrobleslaw
In the case at bench, SMPI submitted adequate proof showing full
payment to and receipt by BF Homes of the purchase price for the
130 Italia II lots as fixed in the Deeds of Absolute Sale.54 BF Homes
expressly admitted receipt of some payments, while it remained
silent as to the others without presenting controverting evidence.
Upon full payment by SMPI of the purchase price for the 130 Italia
II lots to BF Homes, it became mandatory upon BF Homes to deliver
the TCTs for said lots to SMPI. As the Court held in G.O.A.L., Inc. v.
Court of Appeals55:
Upon full payment of the agreed price, petitioner is mandated by
law to deliver the title of the lot or unit to the buyer. Both the
"Contract to Sell" of petitioner and private respondents, and Sec.
25 of P.D. 957 state -
Sec. III (Contract to Sell). - Title and Ownership of Unit. Upon full
payment by the vendees of the full amount of the purchase price
stipulated under Sec. Ill hereof, the assessments and expenses
under Sec. IV and otherwise upon compliance by the VENDEES of
all obligations therein, the VENDOR will convey to the VENDEE all
rights and interests of the former and to the Unit, subject hereof
together with the interest in the common area and in the
Condominium Corporation appurtenant to such unit x x x."
Sec. 25, P.D. 957 - Issuance of Title. - The owner or developer shall
deliver the title of the lot or unit to the buyer upon full payment
of the lot or unit x x x. In the event a mortgage over the lot or unit
is outstanding at the time of the issuance of the title to the buyer,
the owner or developer shall redeem the mortgage or the
corresponding portion thereof within six months from such
issuance in order that the title over any paid lot or unit may be
secured and delivered to the buyer in accordance herewith."
Petitioner also attempts to justify its failure to deliver the
certificate of title of private respondent Teng by claiming that it
used the title as part collateral for the additional loan NHA had
extended for the construction of the fifth floor.
The Court observes the frequent allusion of petitioner to its
predicament brought about by the abandonment of the project by
the first contractor. But such is irrelevant in light of Sec. 25 of P.D.
957 as well as of the Contract to Sell of the parties. While we
empathize with petitioner in its financial dilemma we cannot
make innocent parties suffer the consequences of the former's
lack of business acumen. Upon full payment of a unit, petitioner
loses all its rights and interests to the unit in favor of the buyer, x
x x. (Emphases supplied.)
To justify its refusal to deliver the remaining 20 TCTs to SMPI, BF
Homes asserts that 1) the Deeds of Absolute Sale were undated
and not notarized; 2) Orendain did not have or exceeded his
authority as receiver in entering into the contracts of sale of the
Italia II lots with SMPI; and 3) the consideration for the said Italia II
lots were grossly inadequate and disadvantageous for BF Homes.
The Court is not persuaded.
Article 1358(1) of the Civil Code requires that "[a]cts and contracts
which have for their object the creation, transmission, modification
or extinguishment of real rights over immovable property" must
appear in a public document; and sales of real property or of an
interest therein shall be governed by Article 1403(2) and 1405 of
the same Code. Pertinent portions of Articles 1403(2) and 1405 of
the Civil Code are reproduced below:
Art. 1403. The following contracts are unenforceable, unless they
are ratified:
x x x x
(2) Those that do not comply with the Statute of Frauds as set forth
in this number. In the following cases an agreement hereafter
made shall be unenforceable by action, unless the same, or some
note or memorandum, thereof, be in writing, and subscribed by the
party charged, or by his agent; evidence, therefore, of the
agreement cannot be received without the writing, or a secondary
evidence of its contents:
x x x x
(e) An agreement of the leasing for a longer period than one year,
or for the sale of real property or of an interest therein;
xxxx
Art. 1405. Contracts infringing the Statute of Frauds, referred to in
No. 2 of Article 1403, are ratified by the failure to object to the
presentation of oral evidence to prove the same, or by the
acceptance of benefit under them.
The contracts of sale of the 130 Italia II lots between BF Homes and
SMPI were actually reduced into writing into the three Deeds of
Absolute Sale which were signed by the representatives of the two
corporations. The only defect was that the Deeds were not
notarized and, therefore, were not public documents as required
by Article 1358(1) of the Civil Code. Cenido v. Spouses
Apacionado56 involved a closely similar situation and the Court
adjudged therein that
The sale of real property should be in writing and subscribed by the
party charged for it to be enforceable. The "Pagpapatunay" is in
writing and subscribed by Bonifacio Aparato, the vendor; hence,
it is enforceable under the Statute of Frauds. Not having been
subscribed and sworn to before a notary public, however, the
"Pagpapatunay" is not a public document, and therefore does not
comply with Article 1358, Paragraph 1 of the Civil Code.
The requirement of a public document in Article 1358 is not for
the validity of the instrument but for its efficacy. Although a
conveyance of land is not made in a public document, it does not
affect the validity of such conveyance. Article 1358 does not
require the accomplishment of the acts or contracts in a public
instrument in order to validate the act or contract but only to
insure its efficacy, so that after the existence of said contract has
been admitted, the party bound may be compelled to execute the
proper document, x x x.
x x x x
The private conveyance of the house and lot is therefore valid
between Bonifacio Aparato and respondent spouses, x x x For
greater efficacy of the contract, convenience of the parties and to
bind third persons, respondent spouses have the right to compel
the vendor or his heirs; to execute the necessary document to
properly convey the property
Also instructive is the following discussion of the Court in Swedish
Match v. Court of Appeals,57 on the Statute of Frauds
The Statute of Frauds embodied in Article 1403, paragraph (2), of
the Civil Code requires certain contracts enumerated therein to be
evidenced by some note or memorandum in order to be
enforceable. The term "Statute of Frauds" is descriptive of statutes
which require certain classes of contracts to be in writing. The
Statute does not deprive the parties of the right to contract with
respect to the matters therein involved, but merely regulates the
formalities of the contract necessary to render it enforceable.
Evidence of the agreement cannot be received without the
writing or a secondary evidence of its contents.
The Statute, however, simply provides the method by which the
contracts enumerated therein may be proved but does not
declare them invalid because they are not reduced to writing. By
law, contracts are obligatory in whatever form they may have been
entered into, provided all the essential requisites for their validity
are present. However, when the law requires that a contract be in
some form in order that it may be valid or enforceable, or that a
contract be proved in a certain way, that requirement is absolute
and indispensable. Consequently, the effect of non-compliance
with the requirement of the Statute is simply that no action can
be enforced unless the requirement is complied with. Clearly, the
form required is for evidentiary purposes only. Hence, if the parties
permit a contract to be proved, without any objection, it is then
just as binding as if the Statute has been complied with.
The purpose of the Statute is to prevent fraud and perjury in the
enforcement of obligations depending for their evidence on the
unassisted memory of witnesses, by requiring certain enumerated
contracts and transactions to be evidenced by a writing signed by
the party to be charged.
However, for a note or memorandum to satisfy the Statute, it must
be complete in itself and cannot rest partly in writing and partly in
parol. The note or memorandum must contain the names of the
parties, the terms and conditions of the contract, and a description
of the property sufficient to render it capable of identification. Such
note or memorandum must contain the essential elements of the
contract expressed with certainty that may be ascertained from the
note or memorandum itself, or some other writing to which it
refers or within which it is connected, without resorting to parol
evidence.
x x x x
The Statute of Frauds is applicable only to contracts which are
executory and not to those which have been consummated either
totally or partially. If a contract has been totally or partially
performed, the exclusion of parol evidence would promote fraud
or bad faith, for it would enable the defendant to keep the
benefits already derived by him from the transaction in litigation,
and at the same time, evade the obligations, responsibilities or
liabilities assumed or contracted by him thereby. This rule,
however, is predicated on the fact of ratification of the contract
within the meaning of Article 1405 of the Civil Code either (1) by
failure to object to the presentation of oral evidence to prove the
same, or (2) by the acceptance of benefits under them. x x x.
(Emphases supplied.)chanrobleslaw
Based on the afore-quoted jurisprudence, the Deeds of Absolute
Sale are enforceable. First, the Deeds are already in writing and
signed by the parties, and only lack notarization, a formality which
SMPI could compel BF Homes to comply with. As private
documents, the Deeds are still binding between the parties and the
conveyance of the 130 Italia II lots by BF Homes to SMPI by virtue
of said Deeds is valid. And second, the Deeds were already ratified
as BF Homes had accepted the benefits from said contracts when
it received full payment from SMPI of the purchase price for the
130 Italia II lots. The Deeds were also substantially performed
considering that BF Homes had previously delivered to SMPI the
TCTs for 110 out of the 130 lots, only refusing to deliver the TCTs
for the remaining 20 lots.
BF Homes cannot insist on the lack of authority of Orendain as
receiver to sign the Deeds of Absolute Sale for the 130 Italia II lots.
While it is true the SEC revoked the appointment of Orendain as
rehabilitation receiver of BF Homes in 1989, the SEC thereafter
immediately appointed FBO Networks Management, Inc., in
replacement as receiver. Orendain was the Chairman of FBO
Networks Management, Inc. Hence, when Orendain signed the
Deeds of Absolute Sale for the 130 Italia II lots, he did so as
Chairman of FBO Networks Management, Inc., the appointed
receiver of BF Homes.
Under Section 6(d) of Presidential Decree No. 902-A, otherwise
known as the SEC Reorganization Act, the management committee
or rehabilitation receiver is empowered to take custody and control
of all existing assets and properties of such corporations under
management; to evaluate the existing assets and liabilities,
earnings and operations of such corporations; to determine the
best way to salvage and protect the interest of investors and
creditors; to study, review and evaluate the feasibility of continuing
operations, and restructure and rehabilitate such entities if
determined to be feasible by the SEC.58 The acts of the receiver,
being an appointed officer of the SEC,59 enjoy the presumption of
regularity.60
In the instant case, the acts of FBO Networks Management, Inc., as
receiver of BF Homes, undertaken through Orendain, including the
sale of the 130 Italia II lots to SMPI in 1992 and 1993, are so far
presumed to have been regularly performed absent evidence to
the contrary. While BF Homes questioned the acts of
Orendain/FBO Networks Management, Inc. as receiver before the
SEC, the SEC terminated the rehabilitation proceedings without
definitively ruling on the same and recognized the transfer of
jurisdiction over such subject matter to the Regional Trial Courts
(RTC) with the passage of Republic Act No. 8799, otherwise known
as the Securities Regulation Code. There is no showing herein
whether BF Homes pursued before the RTC any case to nullify or
invalidate the alleged unauthorized or irregular acts of
Orendain/FBO Networks Management, Inc. as receiver.
Moreover, even assuming for the sake of argument that
Orendain/FBO Networks Management, Inc. did act without or
beyond his/its authority as receiver in entering into the contracts
of sale of the 130 Italia II lots with SMPI, then the said contracts
were merely unenforceable and could be ratified, Article 1403(1)
of the Civil Code provides:
ARTICLE 1403. The following contracts are unenforceable, unless
they are ratified
(1) Those entered into in the name of another person by one who
has been given no authority or legal representation, or who has
acted beyond his powers[.]
As the OP observed, BF Homes ratified the Deeds of Absolute Sale
with SMPI by accepting full payment from SMPI of the purchase
price for the 130 Italia II lots, and fully implementing the
transaction covered by the first two Deeds and partially
implementing the third by delivering the TCTs for 110 of the 130
lots.
Receiving full payment for the 130 Italia II lots from SMPI also
estops BF Homes from denying the authority of Orendain/FBO
Networks Management, Inc. to enter into the Deeds of Absolute
Sale. The Court applies by analogy its declarations in Bisaya Land
Transportation, Inc. v. Sanchez,61 which involved the acts of a
court-appointed receiver for an estate:
Furthermore, it is clear that BISTRANCO received material benefits
from the contracts of agency of Sanchez, based upon the monthly
statements of income of BISTRANCO, upon which the commissions
of Sanchez were based, x x x.
x x x x
[I]n our considered opinion, the doctrine of estoppel precludes
BISTRANCO from repudiating an obligation voluntarily assumed by
it, after having accepted benefits therefrom.' To countenance such
repudiation would be contrary to equity and would put a premium
on fraud or misrepresentation, which this Court will not sanction.
Furthermore, the averment of BF Homes of inadequacy of the
purchase price for the 130 Italia II lots deserves scant
consideration. Section 3(p), Rule 131 of the Revised Rules of Court
presumes that private transactions have been fair and regular. The
only evidence submitted by BF Homes in support of its claim is the
appraisal report which valued the lots at P3,500.00 and P3,000.00
per square meter. The appraisal report, however, does not
necessarily prove that the purchase price for the lots agreed upon
in the Deeds of Absolute Sale, averaged at P2,500.00 per square
meter, is grossly inadequate and disadvantageous to BF Homes.
There are considerations for which sellers may agree to sell their
property for less than the market value, such as the urgent financial
need of the seller, cash or immediate payment, and/or the high
number of properties purchased at the same time. In this case,
SMPI explained that it was granted a lower purchase price because
it bought the Italia II lots in volume, and BF Homes was unable to
repudiate said explanation.
Finally, as to the award of attorney's fees, Article 2208 of the Civil
Code allows the recovery of attorney's fees and expenses of
litigation, other than judicial costs, even in the absence of
stipulation, "[w]here the defendant acted in gross and evident bad
faith in refusing to satisfy the plaintiffs plainly valid, just and
demandable claim." SMPI obviously had a valid and demandable
claim against BF Homes, which unjustifiably and inexcusably
refused to comply with the mandate in Presidential Decree No. 957
and undertaking in the Deeds of Absolute Sale to deliver the titles
to the subdivision lots upon complete payment for said properties.
The sudden refusal of BF Homes to deliver the last 20 TCTs, after
having previously delivered the other 110 TCTs, constitutes bad
faith and justifies the award of attorney's fees in favor of SMPI,
which was forced to litigate to enforce its rights. The amount of
P100,000.00 awarded by the OP as attorney's fees is just and
reasonable under the circumstances.
WHEREFORE, premises considered, the Petition for Review
on Certiorari of San Miguel Properties, Inc. is GRANTED. The
Decision dated January 31, 2005 and Resolution dated August 9,
2005 of the Court of Appeals in CA-G.R. SP No. 83631 ordering the
remand of the case to the Housing and Land Use Regulatory Board
is REVERSED and SET ASIDE; and the Decision dated January 27,
2004 of the Office of the President in O.P. Case No. 03-E-203
is REINSTATED.
SO ORDERED.
G.R. No. 207145 July 28, 2015
GIL G. CAWAD, Petitioners,
vs.
FLORENCIO B. ABAD, Respondents.
On March 26, 1992, Republic Act (RA) No. 7305, otherwise known
as The Magna Carta of Public Health Workerswas signed into law in
order to promote the social and economic well-being of health
workers, their living and working conditions and terms of
employment, to develop their skills and capabilities to be better
equipped to deliver health projects and programs, and to
encourage those with proper qualifications and excellent abilities
to join and remain in government service.3 Accordingly, public
health workers (PHWs) were granted the following allowances and
benefits, among others:
Section 20. Additional Compensation. - Notwithstanding Section 12
of Republic Act No. 6758, public health workers shall receive the
following allowances: hazard allowance, subsistence allowance,
longevity pay, laundry allowance and remote assignment
allowance.
Section 21. Hazard Allowance. - Public health workers in hospitals,
sanitaria, rural health units, main health centers, health infirmaries,
barangay health stations, clinics and other health-related
establishments located in difficult areas, strife-torn or embattled
areas, distressed or isolated stations, prisons camps, mental
hospitals, radiation exposed clinics, laboratories or disease-
infested areas or in areas declared under state of calamity or
emergency for the duration thereof which expose them to great
danger, contagion, radiation, volcanic activity/eruption,
occupational risks or perils to life as determined by the Secretary
of Health or the Head of the unit with the approval of the Secretary
of Health, shall be compensated hazard allowances equivalent to
at least twenty-five percent (25%) of the monthly basic salary of
health workers receiving salary grade 19 and below, and five
percent (5%) for health workers with <="" b="">
Section 22. Subsistence Allowance. - Public health workers who are
required to render service within the premises of hospitals,
sanitaria, health infirmaries, main health centers, rural health units
and barangay health stations, or clinics, and other health-related
establishments in order to make their services available at any and
all times, shall be entitled to full subsistence allowance of three (3)
meals which may be computed in accordance with prevailing
circumstances as determined by the Secretary of Health in
consultation with the Management-Health Worker's Consultative
Councils, as established under Section 33 of this Act: Provided, That
representation and travel allowance shall be given to rural health
physicians as enjoyed by municipal agriculturists, municipal
planning and development officers and budget officers.
Section 23. Longevity Pay.- A monthly longevity pay equivalent
to five percent (5%)of the monthly basic pay shall be paid to a
health worker for every five (5) years of continuous, efficient and
meritorious services rendered as certified by the chief of office
concerned, commencing with the service after the approval of this
Act.4
Pursuant to Section 355 of the Magna Carta, the Secretary of Health
promulgated its Implementing Rules and Regulations (IRR) in July
1992. Thereafter, in November 1999, the DOH, in collaboration
with various government agencies and health workers'
organizations, promulgated a Revised IRR consolidating all
additional and clarificatory rules issued by the former Secretaries
of Health dating back from the effectivity of the Magna Carta. The
pertinent provisions of said Revised IRR provide:
6.3. Longevity Pay.- A monthly longevity pay equivalent to five
percent (5%)of the present monthly basic pay shall be paid to
public health workers for every five (5) years of continuous,
efficient and meritorious services rendered as certified by the Head
of Agency/Local Chief Executives commencing after the approval of
the Act. (April 17, 1992)
xxxx
7.1.1. Eligibility to Receive Hazard Pay.- All public health workers
covered under RA 7305 are eligible to receive hazard pay when the
nature of their work exposes them to high risk/low risk hazards for
at least fifty percent (50%) of their working hours as determined
and approved by the Secretary of Health or his authorized
representatives.
xxxx
7.2.1. Eligibility for Subsistence Allowance
a. All public health workers covered under RA 7305
are eligible to receive full subsistence allowance as
long as they render actual duty.
b. Public Health Workers shall be entitled to full
Subsistence Allowance of three (3) meals which may
be computed in accordance with prevailing
circumstances as determined by the Secretary of
Health in consultation with the Management-Health
Workers Consultative Council, as established under
Section 33 of the Act.
c. Those public health workers who are out of
station shall be entitled to per diems in place of
Subsistence Allowance. Subsistence Allowance may
also be commuted.
xxxx
7.2.3 Rates of Subsistence Allowance
a. Subsistence allowance shall be implemented at
not less than Ph₱50.00 per day or Ph₱1,500.00 per
month as certified by head of agency.
xxxx
d. Part-time public health workers/consultants are
entitled to one-half (1/2)of the prescribed rates
received by full-time public health workers.6
On July 28, 2008, the Fourteenth Congress issued Joint Resolution
No. 4, entitled Joint Resolution Authorizing the President of the
Philippines to Modify the Compensation and Position Classification
System of Civilian Personnel and the Base Pay Schedule of Military
and Uniformed Personnel in the Government, and for other
Purposes, approved by then President Gloria Macapagal-Arroyo on
June 17,2009, which provided for certain amendments in the
Magna Carta and its IRR.
On September 3, 2012, respondents DBM and CSC issued one of
the two assailed issuances, DBM-CSC Joint Circular No. 1, Series of
2012, to prescribe the rules on the grant of Step Increments due to
meritorious performance and Step Increment due to length of
service.7 Specifically, it provided that "an official or employee
authorized to be granted Longevity Pay under an existing law is not
eligible for the grant of Step Increment due to length of
service."8 Shortly thereafter, on November29, 2012, respondents
DBM and DOH then circulated the other assailed issuance, DBM-
DOH Joint Circular No. 1, Series of 2012, the relevant provisions of
which state:
7.0. Hazard Pay. - Hazard pay is an additional compensation for
performing hazardous duties and for enduring physical hardships
in the course of performance of duties.
As a general compensation policy, and in line with Section 21 of R.
A. No. 7305, Hazard Pay may be granted to PHWs only if the nature
of the duties and responsibilities of their positions, their actual
services, and location of work expose them to great danger,
occupational risks, perils of life, and physical hardships; and only
during periods of actual exposure to hazards and hardships.
xxxx
8.3 The Subsistence Allowance shall be ₱50for each day of actual
full-time service, or ₱25for each day of actual part-time service.
xxxx
9.0 Longevity Pay (LP)
9.1 Pursuant to Section 23 of R.A. No. 7305, a PHW may be granted
LP at 5% of his/her current monthly basic salary, in recognition of
every 5 years of continuous, efficient, and meritorious services
rendered as PHW. The grant thereof is based on the following
criteria:
9.1.1 The PHW holds a position in the agency plantilla of regular
positions; and
9.1.2 He/She has rendered at least satisfactory performance and
has not been found guilty of any administrative or criminal case
within all rating periods covered by the 5-year period.
In a letter9 dated January 23, 2013 addressed to respondents
Secretary of Budget and Management and Secretary of Health,
petitioners expressed their opposition to the Joint Circular cited
above on the ground that the same diminishes the benefits granted
by the Magna Carta to PHWs.
Unsatisfied, petitioners, on May 30, 2013, filed the instant petition
raising the following issues:
I.
WHETHER RESPONDENTS ENRIQUE T. ONA AND FLORENCIO B.
ABAD ACTED WITH GRAVE ABUSE OF DISCRETION AND VIOLATED
SUBSTANTIVE DUE PROCESS WHEN THEY ISSUED DBM-DOH JOINT
CIRCULAR NO. 1, S. 2012 WHICH:
A) MADE THE PAYMENT OF HAZARD PAY
DEPENDENT ON THE ACTUAL DAYS OF EXPOSURE
TO THE RISK INVOLVED;
B) ALLOWED PAYMENT OF SUBSISTENCE
ALLOWANCE AT ₱50 FOR EACH DAY OF ACTUAL
FULL-TIME SERVICE OR ₱25 FOR EACH DAY OF
ACTUAL PART-TIME SERVICE WITHOUT
CONSIDERATION OF THE PREVAILING
CIRCUMSTANCES AS DETERMINED BY THE
SECRETARY OF HEALTH IN CONSULTATION WITH
THE MANAGEMENT HEALTH WORKERS'
CONSULTATIVE COUNCILS;
C) REQUIRED THAT LONGEVITY PAY BE GRANTED
ONLY TO PHWs WHO HOLD PLANTILLA AND
REGULAR POSITIONS; AND
D) MADE THE JOINT CIRCULAR EFFECTIVE ON
JANUARY 1, 2013, BARELY THREE (3) DAYS AFTER IT
WAS PUBLISHED IN A NEWSPAPER OF GENERAL
CIRCULATION ON DECEMBER 29, 2012, IN
VIOLATION OF THE RULES ON PUBLICATION.
II.
WHETHER RESPONDENTS FRANCISCO T. DUQUE AND FLORENCIO
B. ABAD ACTED WITH GRAVE ABUSE OF DISCRETION WHEN THEY
ISSUED DBM-CSC JOINT CIRCULAR NO. 1, S. 2012 DATED
SEPTEMBER 2, 2012 WHICH PROVIDED THAT AN OFFICIAL OR
EMPLOYEE ENTITLED TO LONGEVITY PAY UNDER EXISTING LAW
SHALL NO LONGER BE GRANTED STEP INCREMENT DUE TO LENGTH
OF SERVICE.
III.
WHETHER RESPONDENTS' ISSUANCE OF DBM-DOH JOINT
CIRCULAR NO. 1, S. 2012 IS NULL AND VOID FOR BEING AN UNDUE
EXERCISE OF LEGISLATIVE POWER BY ADMINISTRATIVE BODIES
WHEN RESPONDENT ONA ALLOWED RESPONDENT ABAD
TOSIGNIFICANTLY SHARE THE POWER TO FORMULATE AND
PREPARE THE NECESSARY RULES AND REGULATIONS TO
IMPLEMENT THE PROVISIONS OF THE MAGNA CARTA.
IV.
WHETHER RESPONDENT ONA WAS REMISS IN IMPLEMENTING THE
MANDATE OF THE MAGNA CARTA WHEN HE DID NOT INCLUDE THE
MAGNA CARTA BENEFITS IN THE DEPARTMENT'S YEARLY BUDGET.
V.
WHETHER RESPONDENTS' ISSUANCE OF DBM-DOH JOINT
CIRCULAR NO. 1, S. 2012 IS NULL AND VOID FOR BEING AN UNDUE
EXERCISE OF LEGISLATIVE POWER BY ADMINISTRATIVE BODIES
WHEN THE SAME WAS ISSUED SANS CONSULTATION WITH
PROFESSIONAL AND HEALTH WORKERS' ORGANZATIONS AND
UNIONS.
Petitioners contend that respondents acted with grave abuse of
discretion when they issued DBM-DOH Joint Circular No. 1, Series
of 2012 and DBM-CSC Joint Circular No. 1, Series of 2012 which
prescribe certain requirements on the grant of benefits that are not
otherwise required by RA No. 7305. Specifically, petitioners assert
that the DBM-DOH Joint Circular grants the payment of Hazard Pay
only if the nature of the PHWs' duties expose them to danger when
RA No. 7305 does not make any qualification. They likewise claim
that said circular unduly fixes Subsistence Allowance at ₱50 for
each day of full-time service and ₱25 for part-time service which
are not in accordance with prevailing circumstances determined by
the Secretary of Health as required by RA No. 7305. Moreover,
petitioners fault respondents for the premature effectivity of the
DBM-DOH Joint Circular which they believe should have been on
January 29, 2012 and not on January 1, 2012. As to the grant of
Longevity Pay, petitioners posit that the same was wrongfully
granted only to PHWs holding regular plantilla positions.
Petitioners likewise criticize the DBM-CSC Joint Circular insofar as
it withheld the Step Increment due to length of service from those
who are already being granted Longevity Pay. As a result,
petitioners claim that the subject circulars are void for being an
undue exercise of legislative power by administrative bodies.
In their Comment, respondents, through the Solicitor General,
refute petitioners' allegations in stating that the assailed circulars
were issued within the scope of their authority, and are therefore
valid and binding. They also assert the authority of Joint Resolution
No. 4, Series of 2009, approved by the President, in accordance
with the prescribed procedure. Moreover, respondents question
the remedies of Certiorari and Prohibition used by petitioners for
the assailed circulars were done in the exercise of their quasi-
legislative, and not of their judicial or quasi-judicial functions.
The petition is partly meritorious.
At the outset, the petition for certiorari and prohibition filed by
petitioners is not the appropriate remedy to assail the validity of
respondents' circulars. Sections 1 and 2 of Rule 65 of the Rules of
Court provide:
RULE 65
CERTIORARI, PROHIBITION AND MANDAMUS
Section 1. Petition for certiorari. - When any tribunal, board or
officer exercising judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or with grave abuse of
discretion amounting to lack or excess of jurisdiction, and there is
no appeal, or any plain, speedy, and adequate remedy in the
ordinary course of law, a person aggrieved thereby may file a
verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and
granting such incidental reliefs as law and justice may require.
xxxx
Sec. 2. Petition for Prohibition. - When the proceedings of any
tribunal, corporation, board, officer or person, whether exercising
judicial, quasi-judicial or ministerial functions, are without or in
excess of its jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and there is no appeal
or any other plain, speedy, and adequate remedy in the ordinary
course of law, a person aggrieved thereby may file a verified
petition in the proper court, alleging the facts with certainty and
praying that judgment be rendered commanding the respondent
to desist from further proceedings in the action or matter specified
therein, or otherwise granting such incidental reliefs as law and
justice may require.10
Thus, on the one hand, certiorari as a special civil action is available
only if: (1) it is directed against a tribunal, board, or officer
exercising judicial or quasi-judicial functions; (2) the tribunal,
board, or officer acted without or in excess of jurisdiction or with
grave abuse of discretion amounting to lack or excess of
jurisdiction; and (3) there is no appeal nor any plain, speedy, and
adequate remedy in the ordinary course of law.11
On the other hand, prohibition is available only if: (1) it is directed
against a tribunal, corporation, board, officer, or person exercising
functions, judicial, quasi-judicial, or ministerial; (2) the tribunal,
corporation, board or person acted without or in excess of its
jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction; and (3) there is no appeal or any other plain,
speedy, and adequate remedy in the ordinary course of
law.12 Based on the foregoing, this Court has consistently
reiterated that petitions for certiorari and prohibition may be
invoked only against tribunals, corporations, boards, officers, or
persons exercising judicial, quasi-judicial or ministerial functions,
and not against their exercise of legislative or quasi-legislative
functions.13
Judicial functions involve the power to determine what the law is
and what the legal rights of the parties are, and then undertaking
to determine these questions and adjudicate upon the rights of the
parties.14 Quasi judicial functions apply to the actions and
discretion of public administrative officers or bodies required to
investigate facts, hold hearings, and draw conclusions from them
as a basis for their official action, in their exercise of discretion of a
judicial nature.15 Ministerial functions are those which an officer or
tribunal performs in the context of a given set of facts, in a
prescribed manner and without regard to the exercise of his own
judgment upon the propriety or impropriety of the act done.16
Before a tribunal, board, or officer may exercise judicial or quasi-
judicial acts, it is necessary that there be a law that gives rise to
some specific rights under which adverse claims are made, and the
controversy ensuing therefrom is brought before a tribunal, board,
or officer clothed with authority to determine the law and
adjudicate the respective rights of the contending parties.17 In this
case, respondents did not act in any judicial, quasi-judicial, or
ministerial capacity in their issuance of the assailed joint circulars.
In issuing and implementing the subject circulars, respondents
were not called upon to adjudicate the rights of contending parties
to exercise, in any manner, discretion of a judicial nature. The
issuance and enforcement by the Secretaries of the DBM, CSC and
DOH of the questioned joint circulars were done in the exercise of
their quasi-legislative and administrative functions. It was in the
nature of subordinate legislation, promulgated by them in their
exercise of delegated power. Quasi-legislative power is exercised
by administrative agencies through the promulgation of rules and
regulations within the confines of the granting statute and the
doctrine of non-delegation of powers from the separation of the
branches of the government.18
Based on the foregoing, certiorari and prohibition do not lie against
herein respondents' issuances. It is beyond the province of
certiorari to declare the aforesaid administrative issuances illegal
because petitions for certiorari seek solely to correct defects in
jurisdiction, and not to correct just any error committed by a court,
board, or officer exercising judicial or quasi-judicial functions
unless such court, board, or officer thereby acts without or in
excess of jurisdiction or with such grave abuse of discretion
amounting to lack of jurisdiction.19
It is likewise beyond the territory of a writ of prohibition since
generally, the purpose of the same is to keep a lower court within
the limits of its jurisdiction in order to maintain the administration
of justice in orderly channels. It affords relief against usurpation of
jurisdiction by an inferior court, or when, in the exercise of
jurisdiction, the inferior court transgresses the bounds prescribed
by the law, or where there is no adequate remedy available in the
ordinary course of law.20
Be that as it may, We proceed to discuss the substantive issues
raised in the petition in order to finally resolve the doubt over the
Joint Circulars' validity. For proper guidance, the pressing issue of
whether or not the joint circulars regulating the salaries and
benefits relied upon by public health workers were tainted with
grave abuse of discretion rightly deserves its prompt resolution.
With respect to the infirmities of the DBM-DOH Joint Circular raised
in the petition, they cannot be said to have been issued with grave
abuse of discretion for not only are they reasonable, they were
likewise issued well within the scope of authority granted to the
respondents. In fact, as may be gathered from prior issuances on
the matter, the circular did not make any substantial deviation
therefrom, but actually remained consistent with, and germane to,
the purposes of the law.
First, the qualification imposed by the DBM-DOH Joint Circular
granting the payment of Hazard Pay only if the nature of PHWs'
duties expose them to danger and depending on whether the risk
involved is high or low was merely derived from Section 7.1.1 of the
Revised IRR of RA No. 7305, duly promulgated by the DOH in
collaboration with various government health agencies and health
workers' organizations in November 1999, to wit:
SECTION 7.1.1. Eligibility to Receive Hazard Pay. - All public health
workers covered under RA 7305 are eligible to receive hazard pay
when the nature of their work exposes them to high risk/low risk
hazards for at least fifty percent (50%) of their working hours as
determined and approved by the Secretary of Health or his
authorized representatives.21
Second, fixing the Subsistence Allowance at ₱50 for each day of
full-time service and ₱25 for part-time service was also merely a
reiteration of the limits prescribed by the Revised IRR, validly issued
by the Secretary of Health pursuant to Section 3522 of RA No. 7305,
the pertinent portions of which states:
Section 7.2.3 Rates of Subsistence Allowance
a. Subsistence allowance shall be implemented at not less than
Ph₱50.00 per day or Ph₱1,500.00 per month as certified by head
of agency.
xxxx
d. Part-time public health workers/consultants are entitled to one-
half (1/2)of the prescribed rates received by full-time public health
workers.
Third, the condition imposed by the DBM-DOH Joint Circular
granting longevity pay only to those PHWs holding regular plantilla
positions merely implements the qualification imposed by the
Revised IRR which provides:
6.3. Longevity Pay. - A monthly longevity pay equivalent to five
percent (5%) of the present monthly basic pay shall be paid to
public health workers for every five (5) years of continuous,
efficient and meritorious services rendered as certified by the Head
of Agency/Local Chief Executives commencing after the approval of
the Act. (April 17, 1992)
6.3.1. Criteria for Efficient and Meritorious Service A Public Worker
shall have:
a. At least a satisfactory performance rating within the rating
period.
b. Not been found guilty of any administrative or criminal case
within the rating period.
As can be gleaned from the aforequoted provision, petitioners
failed to show any real inconsistency in granting longevity pay to
PHWs holding regular plantilla positions. Not only are they based
on the same premise, but the intent of longevity pay, which is paid
to workers for every five (5) years of continuous, efficient and
meritorious services, necessarily coincides with that of
regularization. Thus, the assailed circular cannot be invalidated for
its issuance is consistent with, and germane to, the purposes of the
law.
Anent petitioners' contention that the DBM-DOH Joint Circular is
null and void for its failure to comply with Section 3523 of RA No.
7305 providing that its implementing rules shall take effect thirty
(30) days after publication in a newspaper of general circulation, as
well as its failure to file a copy of the same with the University of
the Philippines Law Center-Office of the National Administrative
Register (UP Law Center-ONAR), jurisprudence as well as the
circumstances of this case dictate otherwise.
Indeed, publication, as a basic postulate of procedural due process,
is required by law in order for administrative rules and regulations
to be effective.24 There are, however, several exceptions, one of
which are interpretative regulations which "need nothing further
than their bare issuance for they give no real consequence more
than what the law itself has already prescribed."25 These
regulations need not be published for they add nothing to the law
and do not affect substantial rights of any person.26
Thus, in Association of Southern Tagalog Electric Cooperatives, et.
al. v. Energy Regulatory Commission (ERC),27wherein several orders
issued by the ERC were sought to be invalidated for lack of
publication and non-submission of copies thereof to the UP Law
Center - ONAR, it has been held that since they merely interpret RA
No. 7832 and its IRR, particularly on the computation of the cost of
purchased power, without modifying, amending or supplanting the
same, they cannot be rendered ineffective, to wit:
When the policy guidelines of the ERC directed the exclusion of
discounts extended by power suppliers in the computation of the
cost of purchased power, the guidelines merely affirmed the plain
and unambiguous meaning of "cost" in Section 5, Rule IX of the IRR
of R.A. No. 7832."Cost" is an item of outlay, and must therefore
exclude discounts since these are "not amounts paid or charged for
the sale of electricity, but are reductions in rates.
xxxx
Thus, the policy guidelines of the ERC on the treatment of discounts
extended by power suppliers "give no real consequence more than
what the law itself has already prescribed." Publication is not
necessary for the effectivity of the policy guidelines.
As interpretative regulations, the policy guidelines of the ERC on
the treatment of discounts extended by power suppliers are also
not required to be filed with the U.P. Law Center in order to be
effective. Section 4, Chapter 2, Book VII of the Administrative Code
of 1987 requires every rule adopted by an agency to be filed with
the U.P. Law Center to be effective. However, in Board of Trustees
of the Government Service Insurance System v. Velasco, this Court
pronounced that "not all rules and regulations adopted by every
government agency are to be filed with the UP Law Center."
Interpretative regulations and those merely internal in nature are
not required to be filed with the U.P. Law Center. Paragraph 9 (a)
of the Guidelines for Receiving and Publication of Rules and
Regulations Filed with the U.P. Law Center states:
9. Rules and Regulations which need not be filed with the U.P. Law
Center, shall, among others, include but not be limited to, the
following:
a. Those which are interpretative regulations and those merely
internal in nature, that is, regulating only the personnel of the
Administrative agency and not the public.
xxxx
Furthermore, the policy guidelines of the ERC did not create a new
obligation and impose a new duty, nor did it attach a new disability.
As previously discussed, the policy guidelines merely interpret R.A.
No. 7832 and its IRR, particularly on the computation of the cost of
purchased power. The policy guidelines did not modify, amend or
supplant the IRR.
Similarly, in Republic v. Drugmaker's Laboratories, Inc.,28 the
validity of circulars issued by the Food and Drug Administration
(FDA) was upheld in spite of the non-compliance with the
publication, prior hearing, and consultation requirements for they
merely implemented the provisions of Administrative Order No.
67, entitled "Revised Rules and Regulations on Registration of
Pharmaceutical Products" issued by the DOH, in the following wise:
A careful scrutiny of the foregoing issuances would reveal that AO
67, s. 1989 is actually the rule that originally introduced the BA/BE
testing requirement as a component of applications for the
issuance of CPRs covering certain pharmaceutical products. As
such, it is considered an administrative regulation - a legislative rule
to be exact - issued by the Secretary of Health in consonance with
the express authority granted to him by RA 3720 to implement the
statutory mandate that all drugs and devices should first be
registered with the FDA prior to their manufacture and sale.
Considering that neither party contested the validity of its issuance,
the Court deems that AO 67, s. 1989 complied with the
requirements of prior hearing, notice, and publication pursuant to
the presumption of regularity accorded to the government in the
exercise of its official duties.42
On the other hand, Circular Nos. 1 and 8, s. 1997 cannot be
considered as administrative regulations because they do not: (a)
implement a primary legislation by providing the details thereof;
(b) interpret, clarify, or explain existing statutory regulations under
which the FDA operates; and/or (c) ascertain the existence of
certain facts or things upon which the enforcement of RA 3720
depends. In fact, the only purpose of these circulars is for the FDA
to administer and supervise the implementation of the provisions
of AO 67, s. 1989, including those covering the BA/BE testing
requirement, consistent with and pursuant to RA 3720.43
Therefore, the FDA has sufficient authority to issue the said
circulars and since they would not affect the substantive rights of
the parties that they seek to govern - as they are not, strictly
speaking, administrative regulations in the first place - no prior
hearing, consultation, and publication are needed for their validity.
In this case, the DBM-DOH Joint Circular in question gives no real
consequence more than what the law itself had already prescribed.
As previously discussed, the qualification of actual exposure to
danger for the PHW's entitlement to hazard pay, the rates of ₱50
and ₱25 subsistence allowance, and the entitlement to longevity
pay on the basis of PHW's status in the plantilla of regular positions
were already prescribed and authorized by pre-existing law. There
is really no new obligation or duty imposed by the subject circular
for it merely reiterated those embodied in RA No. 7305 and its
Revised IRR. The Joint Circular did not modify, amend nor supplant
the Revised IRR, the validity of which is undisputed. Consequently,
whether it was duly published and filed with the UP Law Center -
ONAR is necessarily immaterial to its validity because in view of the
pronouncements above, interpretative regulations, such as the
DBM-DOH circular herein, need not be published nor filed with the
UP Law Center - ONAR in order to be effective. Neither is prior
hearing or consultation mandatory.
Nevertheless, it bears stressing that in spite of the immateriality of
the publication requirement in this case, and even assuming the
necessity of the same, its basic objective in informing the public of
the contents of the law was sufficiently accomplished when the
DBM-DOH Joint Circular was published in the Philippine Star, a
newspaper of general circulation, on December 29, 2012.29
As to petitioners' allegation of grave abuse of discretion on the part
of respondent DOH Secretary in failing to include the Magna Carta
benefits in his department's yearly budget, the same is belied by
the fact that petitioners themselves specifically provided in their
petition an account of the amounts allocated for the same in the
years 2012 and 2013.30
Based on the foregoing, it must be recalled that administrative
regulations, such as the DBM-DOH Joint Circular herein, enacted by
administrative agencies to implement and interpret the law they
are entrusted to enforce are entitled to great respect.31 They
partake of the nature of a statute and are just as binding as if they
have been written in the statute itself. As such, administrative
regulations have the force and effect of law and enjoy the
presumption of legality. Unless and until they are overcome by
sufficient evidence showing that they exceeded the bounds of the
law,32 their validity and legality must be upheld.
Thus, notwithstanding the contention that the Joint Resolution No.
4 promulgated by Congress cannot be a proper source of delegated
power, the subject Circular was nevertheless issued well within the
scope of authority granted to the respondents. The issue in this
case is not whether the Joint Resolution No. 4 can become law and,
consequently, authorize the issuance of the regulation in question,
but whether the circular can be struck down as invalid for being
tainted with grave abuse of discretion. Regardless, therefore, of the
validity or invalidity of Joint Resolution No. 4, the DBMDOH Joint
Circular assailed herein cannot be said to have been arbitrarily or
capriciously issued for being consistent with prior issuances duly
promulgated pursuant to valid and binding law.
Distinction must be made, however, with respect to the DBM-CSC
Joint Circular, the contested provision of which states:
6.5 An official or employee authorized to be granted Longevity Pay
under an existing law is not eligible for the grant of Step Increment
Due to Length of Service.
A review of RA No. 7305 and its Revised IRR reveals that the law
does not similarly impose such condition on the grant of longevity
pay to PHWs in the government service. As such, the DBM-CSC
Joint Circular effectively created a new imposition which was not
otherwise stipulated in the law it sought to interpret.
Consequently, the same exception granted to the DBM-DOH Joint
Circular cannot be applied to the DBM-CSC Joint Circular insofar as
the requirements on publication and submission with the UP Law
Center - ONAR are concerned. Thus, while it was well within the
authority of the respondents to issue rules regulating the grant of
step increments as provided by RA No. 6758, otherwise known as
the Compensation and Position Classification Act of 1989, which
pertinently states:
Section 13. Pay Adjustments. - Paragraphs (b) and (c), Section 15 of
Presidential Decree No. 985 are hereby amended to read as
follows:
xxxx
(c) Step Increments- Effective January 1, 1990 step increments shall
be granted based on merit and/or length of service in accordance
with rules and regulations that will be promulgated jointly by the
DBM and the Civil Service Commission,
and while it was duly published in the Philippine Star, a newspaper
of general circulation, on September 15, 2012,33the DBM-CSC Joint
Circular remains unenforceable for the failure of respondents to
file the same with the UP Law Center - ONAR.34 Moreover, insofar
as the DBM-DOH Joint Circular similarly withholds the Step
Increment due to length of service from those who are already
being granted Longevity Pay, the same must likewise be declared
unenforceable.[35
Note also that the DBM-DOH Joint Circular must further be
invalidated insofar as it lowers the hazard pay at rates below the
minimum prescribed by Section 21 of RA No. 7305 and Section
7.1.5 (a) of its Revised IRR as follows:
SEC. 21. Hazard Allowance. - Public health worker in hospitals,
sanitaria, rural health units, main centers, health infirmaries,
barangay health stations, clinics and other health-related
establishments located in difficult areas, strife-torn or embattled
areas, distresses or isolated stations, prisons camps, mental
hospitals, radiation-exposed clinics, laboratories or disease-
infested areas or in areas declared under state of calamity or
emergency for the duration thereof which expose them to great
danger, contagion, radiation, volcanic activity/eruption
occupational risks or perils to life as determined by the Secretary
of Health or the Head of the unit with the approval of the Secretary
of Health, shall be compensated hazard allowance equivalent to at
least twenty-five percent (25%)of the monthly basic salary of
health workers receiving salary grade 19 and below, and five
percent (5%) for health workers with salary grade 20 and above.
xxxx
7.1.5. Rates of Hazard Pay
a. Public health workers shall be compensated hazard allowances
equivalent to at least twenty five (25%)of the monthly basic salary
of health workers, receiving salary grade 19 and below, and five
percent (5%)for health workers with salary grade 20 and above.
This may be granted on a monthly, quarterly or annual basis.
It is evident from the foregoing provisions that the rates of hazard
pay must be at least25% of the basic monthly salary of PWHs
receiving salary grade 19 and below, and 5% receiving salary grade
20 and above. As such, RA No. 7305 and its implementing rules
noticeably prescribe the minimum rates of hazard pay due all PHWs
in the government, as is clear in the self-explanatory phrase "at
least" used in both the law and the rules.36 Thus, the following rates
embodied in Section 7.2 of DBM-DOH Joint Circular must be struck
down as invalid for being contrary to the mandate of RA No. 7305
and its Revised IRR:
7.2.1 For PHWs whose positions are at SG-19 and below, Hazard
Pay shall be based on the degree of exposure to high risk or low risk
hazards, as specified in sub-items 7 .1.1 and 7 .1.2 above, and the
number of workdays of actual exposure over 22 workdays in a
month, at rates not to exceed 25% of monthly basic salary. In case
of exposure to both high risk and low risk hazards, the Hazard Pay
for the month shall be based on only one risk level, whichever is
more advantageous to the PHW.
7.2.2 PHWs whose positions are at SG-20 and above may be
entitled to Hazard Pay at 5% of their monthly basic salaries for all
days of exposure to high risk and/or low risk hazards. However,
those exposed to high risk hazards for 12 or more days in a month
may be entitled to a fixed amount of ₱4,989.75 per month.
WHEREFORE, premises considered, the instant petition is PARTLY
GRANTED. The DBM-DOH Joint Circular, insofar as it lowers the
hazard pay at rates below the minimum prescribed by Section 21
of RA No. 7305 and Section 7.1.5 (a) of its Revised IRR, is declared
INVALID. The DBM-CSC Joint Circular, insofar as it provides that an
official or employee authorized to be granted Longevity Pay under
an existing law is not eligible for the grant of Step Increment Due
to Length of Service, is declared UNENFORCEABLE. The validity,
however, of the DBM-DOH Joint Circular as to the qualification of
actual exposure to danger for the PHW's entitlement to hazard pay,
the rates of ₱50 and ₱25 subsistence allowance, and the
entitlement to longevity pay on the basis of the PHW' s status in
the plantilla of regular positions, is UPHELD.

SO ORDERED.