Wack-Wack Golf and Country Club vs.
Won
Facts: Wack Wack Golf and Country Club filed a complaint for
interpleader against Won and Tan who both claim ownership over
membership fee certificate 201. Won claims its ownership stemming
from a decision rendered in Civil Case 26044 entitled "Lee E. Won
alias Ramon Lee vs. Wack Wack Golf & Country Club,
Inc." Meanwhile, Tan claims ownership from the assignment made by
the alleged true owner of the same certificate. The trial court dismissed
the complaint on the ground of res judicata by reason of the previous
civil case that issued Won the right to the certificate. Hence, the
appeal.
Issue: Was the remedy of interpleader proper and timely?
Held: There is no question that the subject matter of the present
controversy, i.e., the membership fee certificate 201, is proper for an
interpleader suit. However, the Corporation may not properly invoke
the remedy of interpleader.
It is the general rule that before a person will be deemed to be in a
position to ask for an order of intrepleader, he must be prepared to
show, among other prerequisites, that he has not become
independently liable to any of the claimants. Indeed, if a stakeholder
defends a suit filed by one of the adverse claimants and allows said
suit to proceed to final judgment against him, he cannot later on have
that part of the litigation repeated in an interpleader suit.
In the case at hand, the Corporation allowed civil case 26044 to
proceed to final judgment. It was aware of the conflicting claims of
the appellees with respect to the membership fee certificate 201 long
before it filed the present interpleader suit. Yet it did not interplead
Tan. It preferred to proceed with the litigation and to defend itself
therein. As a matter of fact, final judgment was rendered against it and
said judgment has already been executed. It is therefore too late for it
to invoke the remedy of interpleader
To now permit the Corporation to bring Won to court after the latter's
successful establishment of his rights in civil case 26044 to the
membership fee certificate 201, is to increase instead of to diminish
the number of suits, which is one of the purposes of an action of
interpleader, with the possibility that the latter would lose the benefits
of the favorable judgment. This cannot be done because having elected
to take its chances of success in said civil case 26044, with full
knowledge of all the fact, the Corporation must submit to the
consequences of defeat.
Besides, a successful litigant cannot later be impleaded by his defeated
adversary in an interpleader suit and compelled to prove his claim
anew against other adverse claimants, as that would in effect be a
collateral attack upon the judgment.
In fine, the instant interpleader suit cannot prosper because the
Corporation had already been made independently liable in civil case
26044 and, therefore, its present application for interpleader would in
effect be a collateral attack upon the final judgment in the said civil
case; the appellee Lee had already established his rights to
membership fee certificate 201 in the aforesaid civil case and,
therefore, this interpleader suit would compel him to establish his
rights anew, and thereby increase instead of diminish litigations,
which is one of the purposes of an interpleader suit, with the
possibility that the benefits of the final judgment in the said civil case
might eventually be taken away from him; and because the
Corporation allowed itself to be sued to final judgment in the said case,
its action of interpleader was filed inexcusably late, for which reason
it is barred by laches or unreasonable delay. (Wack-Wack Golf and
Country Club vs. Won, G.R. No. L-23851, March 26, 1976)
WACK WACK GOLF AND COUNTRY CLUB V. WON, 70 SCRA
165 (1976)
Facts: Defendants separately claim to be the lawful owners of the same
membership fee certificates issued by the Wack Wack Golf and
Country Club. Defendant Lee Won claims its ownership stemming
from a decision rendered in an earlier civil case. Meanwhile,
defendant Bienvenido Tan claims the certificates from assignment
made by Swan, Culbertson, and Fritz in his favor. It was to Swan,
Culbertson and Fritz that the original membership fee certificate
was issued.
In sum therefore, the plaintiff club prays that the CFI order the
defendants to interplead and litigate their conflicting
claims.
In separate motions, however, the defendants moved to dismiss the
complaint on the grounds of res judicata – stating that to allow an
interpleader would be tantamount to reopening the civil case involving
Won and collaterally attack the same –, failure to state a cause of
action, and bar by prescription. Consequently, the trial court ruled
against the club. Hence, this petition.
Issue: Whether the club was diligent in invoking the remedy of
interpleader
Held: NO. Undoubtedly, the subject matter in the instant case is proper
for an interpleader suit. It must be noted, however, that a stakeholder
should use reasonable diligence—that is, by filing the interpleader suit
within a reasonable time after a dispute has arisen without waiting to
be sued by either of the contending claimants. Otherwise, he may be
barred by laches or undue delay. But where he acts with reasonable
diligence in view of the environmental
circumstances, the remedy is not barred.
In the instant case, the club was not so diligent because it had been
aware of the defendants‘ conflicting claims long before its filing of the
interpleader suit. It had been recognizing Tan as the lawful owner
thereof. It was sued by Lee who also claimed the same membership
fee certificate. Yet it did not interplead Tan. It preferred to proceed
with the litigation, the earlier civil case, and to defend itself therein.
As a matter of fact, final judgment was rendered against it and said
judgment has already been executed. It is not therefore too late for it
to invoke the remedy of interpleader.
The Corporation has not shown any justifiable reason why it did not
file an application for interpleader in civil case 26044 to compel the
appellees herein to litigate between themselves their conflicting
claims of ownership. It was only after adverse final judgment was
rendered against it that the remedy of interpleader was invoked by it.
By then it was too late, because to be entitled to this remedy the
applicant must be able to show that lie has not been made
independently liable to any of the claimants. And since the
Corporation is already liable to Lee under a final judgment, the present
interpleader suit is clearly improper and unavailing.
To permit the club to bring Lee to court after the latter‘s successful
establishment of his rights in the earlier civil case would increase the
suits, instead of diminishing them as is the goal of filing an
interpleader suit.
In fine, the instant interpleader suit cannot prosper because the
Corporation had already been made independently liable in civil case
26044 and, therefore, its present application for interpleader would in
effect be a collateral attack upon the final judgment in the said civil
case; the appellee Lee had already established his rights to
membership fee certificate 201 in the aforesaid civil case and,
therefore, this interpleader suit would compel him to establish his
rights anew, and thereby increase instead of diminish litigations,
which is one of the purposes of an interpleader suit, with the
possibility that the benefits of the final judgment in the said civil case
might eventually be taken away from him; and because the
Corporation allowed itself to be sued to final judgment in the said case,
its action of interpleader was filed inexcusably late, for which reason
it is barred by laches or unreasonable delay.
G.R. No. L-41818 February 18, 1976
ZOILA CO LIM, petitioner, vs. CONTINENTAL DEVELOPMENT
CORPORATION, respondent
Facts: On November 26, 1973, herein petitioner Continental
Development Corporation filed a complaint for interpleader against
the defendants Benito Gervasio Tan and Zoila Co Lim, and praying
that the defendants be directed to interplead and litigate their
respective claims over the aforementioned shares of stock and to
determine their respective rights thereto. The trial judge dismissed the
complaint for lack of cause of action, invoking Section 35 of Act No.
1459, as amended, otherwise known as the Corporation Law. Hence,
this petition.
Issue: Whether or not there was an active conflict of interest from the
defendants to make out a complaint for interpleader.
Held: YES. The action of interpleader under section 120, is a remedy
whereby a person who has personal property in his possession, or an
obligation to render wholly or partially, without claiming any right in
both comes to court and asks that the persons who claim the said
personal property or who consider themselves entitled to demand
compliance with the obligation, be required to litigate among
themselves, in order to determine finally who is entitled to one or the
other thing. The remedy is afforded not to protect a person against a
double liability but to protect him against a double vexation in respect
of one liability. It is patent from the pleadings in the lower court that
both defendants Benito Gervasio Tan and Zoila Co Lim assert
conflicting rights to the questioned shares of stock. Precisely in his
motion to dismiss the complaint for interpleader, defendant Benito
Gervasio Tan states that petitioner corporation, through its Vice-
President, notified him on July 23, 1973 "that the shares of stock are
in the possession of its treasurer, Mr. Ty Lim, and urged defendant to
directly obtain them from the former, who allegedly was on vacation
at the time. Mr. Ty Lim, on August 30, 1973, through counsel, replied
to the defendant Benito Gervasio Tan that said certificates were not in
his possession but surmised, without reference to any record, that the
same might have been delivered to the deceased So Bi. And, on
October 29, 1973, same counsel of Mr. Ty Lim, wrote the corporation,
in behalf of defendant Zoila Co Lim, alleged heir of So Bi, claiming
ownership of the stocks". Indeed, petitioner corporation is placed in
the same situation as a lessee who does not know the person to whom
he will pay the rentals due to the conflicting claims over the property
leased, or a sheriff who finds himself puzzled by conflicting claims to
a property seized by him.
Doctrine: It has been held that a stakeholder's action of interpleader is
too late when filed after judgment has been
rendered against him in favor of one of the contending claimants,
especially where he had notice of the conflicting
claims prior to the rendition of the judgment and neglected the
opportunity to implead the adverse claimants in the
suit where judgment was entered. This must be so because, once
judgment is obtained against him by one claimant,
he becomes liable to the latter.
Ocampo vs. Tirona
Facts:
Ocampo bought a parcel of land from Rosauro Breton. Ocampo then
possessed and administer the subject land although the TCT is not yet
in his name. Ocampo notified Tirona, who was a lessee occupying a
portion of the subject land, about the sale. Tirona religiously paid her
rents to Ocampo. However, when the subject premises were declared
under area for priority development, Tirona invoked her right to first
refusal and refused to pay her rent until the NHA processed her papers.
Ocampo filed a complaint for unlawful detainer. In her Answer,
Tirona‘s asserted that Dona Yaneza was the owner of the land and not
Ocampo. She likewise reiterated that she has the right of first refusal
over the land as it was included in the area of priority development
under PD 1517. The MTC ruled in favor of Ocampo.
In the RTC, Tirona changed her theory and disclosed that Alipio
Breton is the registered owner of the subject land. When Alipio Breton
died, his children, Rosauro Breton and Maria Lourdes Breton-
Mendiola, inherited the subject land. Tirona claims she has never
stopped paying her rent to Maria Lourdes. Tirona also stated that
Rosauro could not transfer ownership to the subject land to Ocampo
because Rosauro executed a deed of conveyance and waiver in favor
of Maria Lourdes. The RTC affirmed the decision of the MTC.
The CA considered partition of the estate of Alipio Breton as a
prerequisite to Ocampo’s action; hence, it dismissed the case.
Issues:
1. Has Ocampo the right to eject Tirona from the subject land?
2. Is the issue of ownership essential in a suit to eject a person illegally
occupying a land?
3. Is the CA correct in holding that unlawful detainer had to wait for
the results of the partition proceedings?
4. What should have been filed by Tirona when she does not know the
person to whom to pay the rentals due?
Held:
1. Yes. Unlawful detainer cases are summary in nature. The elements
to be proved and resolved in unlawful detainer cases are the fact of
lease and expiration or violation of its terms. All the elements required
for an unlawful detainer case to prosper are present. Ocampo notified
Tirona that he purchased the subject land from Tirona’s lessor.
Tirona’s continued occupation of the subject land amounted to
acquiescence to Ocampo’s terms. However, Tirona eventually refused
to pay rent to Ocampo, thus violating the lease.
2. No. The issue of ownership is not essential to an action for unlawful
detainer. The fact of the lease and the expiration of its term are the
only elements of the action. The defense of ownership does not change
the summary nature of the action. The affected party should raise the
issue of ownership in an appropriate action, because a certificate of
title cannot be the subject of a collateral attack.
In actions for forcible entry and unlawful detainer, the main issue is
possession de facto, independently of any claim of ownership or
possession de jure that either party may set forth in his pleadings, and
an appeal does not operate to change the nature of the original action.
3. Unlawful detainer being a summary proceeding, it was error for the
appellate court to include the issue of ownership. Had the appellate
court limited its ruling to the elements to be proved in a case of
unlawful detainer, Ocampo need not even prove his ownership. When
the appellate court ruled that the case of unlawful detainer had to wait
for the results of the partition proceedings, it effectively put ownership
as the main issue in the case. The issue of ownership opens a virtual
Pandora’s Box for Tirona and her supposed intervenor, Maria Lourdes
Breton-Mendiola.
4. The good faith of Tirona is put in question in her preference for
Maria Lourdes Breton-Mendiola. As a stakeholder, Tirona should
have used reasonable diligence in hailing the contending claimants to
court. Tirona need not have awaited actual institution of a suit by
Ocampo against her before filing a bill of interpleader. An action for
interpleader is proper when the lessee does not know the person to
whom to pay rentals due to conflicting claims on the property.
The action of interpleader is a remedy whereby a person who has
property whether personal or real, in his possession, or an obligation
to render wholly or partially, without claiming any right in both, or
claims an interest which in whole or in part is not disputed by the
conflicting claimants, comes to court and asks that the persons who
claim the said property or who consider themselves entitled to demand
compliance with the obligation, be required to litigate among
themselves, in order to determine finally who is entitled to one or the
other thing. The remedy is afforded not to protect a person against a
double liability but to protect him against a double vexation in respect
of one liability. When the court orders that the claimants litigate
among themselves, there arises in reality a new action and the former
are styled interpleaders, and in such a case the pleading which initiates
the action is called a complaint of interpleader and not a cross-
complaint. (Ocampo vs Tirona, G.R. No.147812. April 6, 2005)
Ocampo v. Tirona
Facts:
Respondent Tirona was a lessee of a land purchased by the petitioner.
However, when the area was declared a priority development,
respondent informed petitioner that she will suspend paying the
rentals. The petitioner purchased the said land from the original
owner. This prompted the petitioner to file an action for unlawful
detainer and damages against the respondent.
The MTC held that Tirona had no reason to suspend the payment of
rents as this made her occupation of the property illegal. Thus, the
petitioner has the right to recover possession. The RTC concurred with
this decision.
Issue: Whether or not an action for interpleader is proper in this
case
RULING:
Yes. Tirona should have filed an interpleader and need not wait for the
actual filing of a suit by petitioner against her. The action is proper
when a lessee does not know who to pay to the rentals due to
conflicting claims in the subject property.
This remedy is afforded not to protect anyone against double liabilities
but to protect him against double vexation with respect to one's
liability.
When a court orders that claimants litigate among themselves there
arises a new action. The pleading which initiates the action is referred
to as the complaint of interpleader and not a cross-complaint.
Almeda vs. Bathala Marketing Industries,Inc.
Facts: In May 1997, respondent Bathala Marketing Industries, Inc.
(lessee) entered into a contract of lease with petitioners (lessors).
Provisions of the contract of lease include:
6th - Lessee shall pay an increased rent if there is any new tax imposed
on the property
7th - In case of supervening extraordinary inflation or devaluation of
the PHP, the value of PHP at the time of the establishment of
theobligation shall be the basis of payment
Petitioners later demanded payment of VAT and 73% adjusted rentals
pursuant to the foregoing provisions. Respondent refused and filed an
action for declaratory relief. Petitioners filed an action for ejectment.
Issue: Whether or not declaratory relief is proper.
Held: YES. Petitioners insist that respondent was already in breach
of the contract when the petition was filed, thus, respondent is barred
from filing an action for declaratory relief. However, after petitioners
demanded payment of adjusted rentals and in the months that
followed, respondent complied with the terms and conditions set forth
in their contract of lease by paying the rentals stipulated therein.
Respondent religiously fulfilled its obligations to petitioners even
during the pendency of the present suit. There is no showing that
respondent committed an act constituting a breach of the subject
contract of lease. Thus, respondent is not barred from instituting
before the trial court the petition for declaratory relief.
Petitioners further claim that the instant petition is not proper because
a separate action for rescission, ejectment and damages had been
commenced before another court; thus, the construction of the subject
contractual provisions should be ventilated in the same forum.
As a rule, the petition for declaratory relief should be dismissed in
view of the pendency of a separate action for unlawful detainer. In this
case, however, the trial court had not yet resolved the
rescission/ejectment case during the pendency of the declaratory relief
petition. In fact, the trial court, where the rescission case was on
appeal, initiated the suspension of the proceedings pending the
resolution of the action for declaratory relief.
EUFEMIA and ROMEL ALMEDA v. BATHALA
MARKETING
G.R.No. 150806, January 28, 2008
FACTS: In May 1997, Bathala Marketng, renewed its Contract of
Lease with Ponciano Almeda. Under the contract, Ponciano agreed to
lease a porton of Almeda Compound for a monthly rental of
P1,107,348.69 for four years. On January 26, 1998, petitioner
informed respondent that its monthly rental be increased by 73%
pursuant to the condition No. 7 of the contract and Article 1250.
Respondent refused the demand and insisted that there was no
extraordinary inflation to warrant such application. Respondent
refused to pay the VAT and adjusted rentals as demanded by the
petitioners but continually paid the stipulated amount. RTC ruled in
favor of the respondent and declared that plaintiff is not liable for the
payment of VAT and the adjustment rental, there being no
extraordinary inflation or devaluation. CA affirmed the decision
deleting the amounts representing 10% VAT and rental adjustment.
ISSUE: Whether the amount of rentals due the petitioners should be
adjusted by reason of extraordinary inflation or devaluation
RULING: Petitioners are stopped from shifting to respondent the
burden of paying the VAT. 6th Condition states that respondent can
only be held liable for new taxes imposed after the effectivity of the
contract of lease, after 1977, VAT cannot be considered a “new tax”.
Neither can petitioners legitimately demand rental adjustment because
of extraordinary inflation or devaluation. Absent an official
pronouncement or declaration by competent authorities of its
existence, its effects are not to be applied.
Petition is denied. CA decision is affirmed.
PHILIPPINE DEPOSIT INSURANCE CORPORATION vs. COURT
OF APPEALS
G.R. No. 126911 APRIL 30,2003
CARPIO-MORALES, J.
FACTS:
Prior to May 22, 1997, respondents had 71 certificates of time deposits
denominated as "Golden Time Deposits" (GTD) with an aggregate
face value of P1,115,889.96.
May 22, 1987, a Friday, the Monetary Board (MB) of the Central Bank
of the Philippines, now Bangko Sentral ng Pilipinas, issued Resolution
5052 prohibiting Manila Banking Corporation to do business in the
Philippines, and placing its assets and affairs under receivership. The
Resolution, however, was not served on MBC until Tuesday the
following week, or on May 26, 1987, when the designated Receiver
took over.
On May 25, 1987 - the next banking day following the issuance of the
MB Resolution, respondent Jose Abad was at the MBC at 9:00 a.m.
for the purpose of pre-terminating the 71 aforementioned GTDs and
re-depositing the fund represented thereby into 28 new GTDs in
denominations of P40,000.00 or less under the names of herein
respondents individually or jointly with each other.
Of the 28 new GTDs, Jose Abad pre-terminated 8 and withdrew the
value thereof in the total amount of P320,000.00. Respondents
thereafter filed their claims with the PDIC for the payment of the
remaining 20 insured GTDs.
February 11, 1988, PDIC paid respondents the value of 3 claims in the
total amount of P120,000.00.
PDIC, however, withheld payment of the 17 remaining claims after
Washington Solidum, Deputy Receiver of MBC-Iloilo, submitted a
report to the PDIC that there was massive conversion and substitution
of trust and deposit accounts on May 25, 1987 at MBC-Iloilo. Because
of the report, PDIC entertained serious reservation in recognizing
respondents' GTDs as deposit liabilities of MBC-Iloilo.
Thus, PDIC filed a petition for declaratory relief against respondents
with the RTCof Iloilo City, for a judicial declaration determination of
the insurability of respondents' GTDs at MBC-Iloilo.
In their Answer respondents set up a counterclaim against PDIC
whereby they asked for payment of their insured deposits.
The Trial Court ordered petitioners to pay the balance of the deposit
insurance to respondents. The Court of Appeals affirmed the decision
of the lower court.
Petitioner posits that the trial court erred in ordering it to pay the
balance of the deposit insurance to respondents, maintaining that the
instant petition stemmed from a petition for declaratory relief which
does not essentially entail an executory process, and the only relief
that should have been granted by the trial court is a declaration of the
parties' rights and duties. As such, petitioner continues, no order of
payment may arise from the case as this is beyond the office of
declaratory relief proceedings.
ISSUE: Can the trial court order the payment of the balance even if
the petition stemmed from a petition for declaratory relief which does
not essentially entail an executory process?
RULING: YES. Without doubt, a petition for declaratory relief does
not essentially entail an executory process. There is nothing in its
nature, however, that prohibits a counterclaim from being set-up in the
same action.
There is nothing in the nature of a special civil action for declaratory
relief that proscribes the filing of a counterclaim based on the same
transaction, deed or contract subject of the complaint. A special civil
action is after all not essentially different from an ordinary civil action,
which is generally governed by Rules 1 to 56 of the Rules of Court,
except that the former deals with a special subject matter which makes
necessary some special regulation. But the identity between their
fundamental nature is such that the same rules governing ordinary
civil suits may and do apply to special civil actions if not inconsistent
with or if they may serve to supplement the provisions of the peculiar
rules governing special civil actions.
CASE TITLE: PDIC vs CA
GR NO.: 126911
DATE: April 30, 2003
PETITIONER: Philippine Development Insurance Corporation
RESPONDENT: CA and Jose Abad
FACTS:
Respondents had 71 Golden Time Deposits(GTDs) in Manila Banking
Corporation(MBC). HOWEVER, Bangko Sentral of the Philippines
issued a memorandum prohibiting MBC to do business in the
Philippines and placed its assets under receivership. On the next
banking day, respondent Jose Abad pre-terminated his 71 GTDs and
redposited the fund into 28 GTDs in larger denominations. Thereafter,
respondent filed their claims for the payment of the insured GTDs.
Petitioner PDIC argued that the insured GTDs should not be
recognized since they were mere derivatives of respondents previous
account balances pre-terminated at the time the MBC was aslready in
serious financial distress. Under its charter, they contend that they are
only liable for deposits received in the usual course of business.
Consequently, Petitioner filed a petition for declaratory relief against
respondents for a judicial determination of the insurability of
respondents. In turn, Jose Abad SET UP A COUNTER-CLAIM
against PDIC whereby they asked for payment of the insured deposits.
The SC later on ruled in favor of the respondents due to petitioner
having failed to overcome the presumption that it was issued in the
ordinary course of business. The trial court then ordered petitioner to
pay the balance of the deposit insurance to respondents.
MAIN ISSUE:
WON the trial court erred in ordering the payment of the deposit
insurance since a petition for declaratory relief does not essentially
entail an executory process- the only relief being granted is a
declaration of the rights and duties.
HELD:
NO, the RTC’s action was proper. Without doubt, a petition for
declaratory relief does not essentially entail an executory process.
HOWEVER, there is nothing in its nature that prohibits a counterclaim
from being set-up in the same action.
A special civil action is not essentially different from an ordinary civil
action, which is generally governed by Rules 1 to 56 of the Rules of
Court, except that the former deals with a special subject matter which
makes necessary some special regulation. But the identity between
their fundamental nature is such that the same rules governing
ordinary civil suits may and do apply to special civil actions if not
inconsistent with or if they may serve to supplement the provisions of
the peculiar rules governing special civil actions.
Petitioner additionally submits that the issue of determining the
amount of deposit insurance due respondents was never tried on the
merits since the trial dwelt only on the determination of the viability
or validity of the deposits and no evidence on record sustains the
holding that the amount of deposit due respondents had been finally
determined. This issue was not raised in the court a quo, however,
hence, it cannot be raised for the first time in the petition at bar.
CJH DEVELOPMENT CORPORATION, vs. BUREAU OF
INTERNAL REVENUE, BUREAU OF CUSTOMS, DISTRICT
COLLECTOR OF CUSTOMS EDWARD O. BALTAZAR[G.R. No.
172457. December 24, 2008.].
Facts: BOC demanded 12 of CJH the payment of P71,983,753.00
representing the duties and taxes due on all the importations made by
CJH from 1998 to 2004. For its part, the BIR sent a letter to CJH
wherein it treated CJH as an ordinary corporation subject to the regular
corporate income tax as well as to the Value Added Tax of 1997. CJH
questioned the retroactive application by the BOC of the Supreme
Court decision in G.R. No. 119775 (Section 3 of the Proclamation ,
which granted to the newly created SEZ the same incentives then
already enjoyed by the Subic SEZ, including tax exemptions, was
declared unconstitutional) It claimed that the assessment was null and
void because it violated the non-retroactive principle under the Tariff
and Customs Code. held that the decision in G.R. No. 119775 applies
retroactively because the tax exemption granted by Proclamation No.
420 is null and void from the beginning. The RTC also ruled that the
petition for declaratory relief is not the appropriate remedy. A
judgment of the court cannot be the proper subject of a petition for
declaratory relief; the enumeration in Rule 64 is exclusive. Moreover,
the RTC held that Commonwealth Act No. 55 (CA No. 55) which
proscribes the use of declaratory relief in cases where a taxpayer
questions his tax liability is still in force and effect.
Issues/ Held:
W/N the remedy of declaratory relief proper in this case-NO
W/N the decision in G.R. No. 119775 be applied retroactively- NOT
RESOLVED
Ratio: Ultimately, the Court is asked to determine whether the
decision of the Court en banc in G.R. No. 119775 has a retroactive
effect. This approach cannot be countenanced. A petition for
declaratory relief cannot properly have a court decision as its subject
matter.
The Tariff and Customs Code (TCC) provides for the administrative
and judicial remedies available to a taxpayer who is minded to contest
an assessment, subject of course to certain reglementary periods. The
TCC provides that a protest can be raised provided that payment first
be made of the amount due. The decision of the Collector can be
reviewed by the Commissioner of Customs who can approve, modify
or reverse the decision or action of the Collector. If the party is not
satisfied with the ruling of the Commissioner, he may file the
necessary appeal to the Court of Tax Appeals. Afterwards, the
decision of the Court of Tax Appeals can be appealed to the Supreme
Court.
The petition in G.R. No. 169234 was filed with the Supreme Court in
September 2005, in John Hay Peoples Alternative Coalition had
attained finality. CJH therein raised the same question of law, as in
this case, whether the doctrine of operative fact applies to G.R. No.
119775. Clearly, the Court in G.R. No. 169234 is better positioned to
resolve that question of law, there being no antecedent jurisdictional
defects that would preclude the Court from squarely deciding that
particular issue. CJH is free to reiterate this current point of
clarification as it litigates the petition in G.R. No. 169234.
Jumamil vs. Café, et al.
[GR 144570, 21 September 2005]
Third Division, Corona (J): 4 concur
Facts: In 1989, Vivencio V. Jumamil filed before the Regional Trial
Court (RTC) of Panabo, Davao del Norte a petition for declaratory
relief with prayer for preliminary injunction and writ of restraining
order against Mayor Jose J. Cafe and the members of the Sangguniang
Bayan of Panabo, Davao del Norte. He questioned the
constitutionality of Municipal Resolution 7, Series of 1989
(Resolution 7). Resolution 7, enacting Appropriation Ordinance 111,
provided for an initial appropriation of P765,000 for the construction
of stalls around a proposed terminal fronting the Panabo Public
Market which was destroyed by fire. Subsequently, the petition was
amended due to the passage of Resolution 49, series of 1989
(Resolution 49), denominated as Ordinance 10, appropriating a further
amount of P1,515,000 for the construction of additional stalls in the
same public market. Prior to the passage of these resolutions, Mayor
Cafe had already entered into contracts with those who advanced and
deposited (with the municipal treasurer) from their personal funds the
sum of P40,000 each. Some of the parties were close friends and/or
relatives of Cafe, et al. The construction of the stalls which Jumamil
sought to stop through the preliminary injunction in the RTC was
nevertheless finished, rendering the prayer therefor moot and
academic. The leases of the stalls were then awarded by public raffle
which, however, was limited to those who had deposited P40,000
each. Thus, the petition was amended anew to include the 57 awardees
of the stalls as private respondents. Jumamil alleges that Resolution
Nos. 7 and 49 were unconstitutional because they were passed for the
business, occupation, enjoyment and benefit of private respondents,
some of which were close friends and/or relative of the mayor and the
sanggunian, who deposited the amount of P40,000.00 for each stall,
and with whom also the mayor had a prior contract to award the would
be constructed stalls to all private respondents; that resolutions and
ordinances did not provide for any notice of publication that the
special privilege and unwarranted benefits conferred on the private
respondents may be availed of by anybody who can deposit the
amount of P40,000; and that nor there were any prior notice or
publication pertaining to contracts entered into by public and private
respondents for the construction of stalls to be awarded to private
respondents that the same can be availed of by anybody willing to
deposit P40,000.00. The Regional Trial Court dismissed Jumamil’s
petition for declaratory relief with prayer for preliminary injunction
and writ of restraining order, and ordered Jumamil to pay attorney’s
fees in the amount of P1,000 to each of the 57 private respondents. On
appeal, and on 24 July 2000 (CA GR CV 35082), the Court of Appeals
affirmed the decision of the trial court. Jumamil filed the petition for
review on certiorari.
Issue [1]: Whether Jumamil had the legal standing to bring the petition
for declaratory relief.
Held [1]: Legal standing or locus standi is a party’s personal and
substantial interest in a case such that he has sustained or will sustain
direct injury as a result of the governmental act being challenged. It
calls for more than just a generalized grievance. The term “interest”
means a material interest, an interest in issue affected by the decree,
as distinguished from mere interest in the question involved, or a mere
incidental interest. Unless a person’s constitutional rights are
adversely affected by the statute or ordinance, he has no legal
standing. Jumamil brought the petition in his capacity as taxpayer of
the Municipality of Panabo, Davao del Norte and not in his personal
capacity. He was questioning the official acts of the the mayor and the
members of the Sanggunian in passing the ordinances and entering
into the lease contracts with private respondents. A taxpayer need not
be a party to the contract to challenge its validity. Parties suing as
taxpayers must specifically prove sufficient interest in preventing the
illegal expenditure of money raised by taxation. The expenditure of
public funds by an officer of the State for the purpose of executing an
unconstitutional act constitutes a misapplication of such funds. The
resolutions being assailed were appropriations ordinances. Jumamil
alleged that these ordinances were “passed for the business,
occupation, enjoyment and benefit of private respondents” (that is,
allegedly for the private benefit of respondents) because even before
they were passed, Mayor Cafe and private respondents had already
entered into lease contracts for the construction and award of the
market stalls. Private respondents admitted they deposited P40,000
each with the municipal treasurer, which amounts were made
available to the municipality during the construction of the stalls. The
deposits, however, were needed to ensure the speedy completion of
the stalls after the public market was gutted by a series of fires. Thus,
the award of the stalls was necessarily limited only to those who
advanced their personal funds for their construction. Jumamil did not
seasonably allege his interest in preventing the illegal expenditure of
public funds or the specific injury to him as a result of the enforcement
of the questioned resolutions and contracts. It was only in the “Remark
to Comment” he filed in the Supreme Court did he first assert that “he
(was) willing to engage in business and (was) interested to occupy a
market stall.” Such claim was obviously an afterthought.
Issue [2]: Whether the rule on locus standi should be relaxed.
Held [2]: Objections to a taxpayer's suit for lack of sufficient
personality, standing or interest are procedural matters. Considering
the importance to the public of a suit assailing the constitutionality of
a tax law, and in keeping with the Court's duty, specially explicated in
the 1987 Constitution, to determine whether or not the other branches
of the Government have kept themselves within the limits of the
Constitution and the laws and that they have not abused the discretion
given to them, the Supreme Court may brush aside technicalities of
procedure and take cognizance of the suit. There being no doctrinal
definition of transcendental importance, the following determinants
formulated by former Supreme Court Justice Florentino P. Feliciano
are instructive: (1) the character of the funds or other assets involved
in the case; (2) the presence of a clear case of disregard of a
constitutional or statutory prohibition by the public respondent agency
or instrumentality of the government; and (3) the lack of any other
party with a more direct and specific interest in raising the questions
being raised. But, even if the Court disregards Jumamil’s lack of legal
standing, this petition must still fail. The subject
resolutions/ordinances appropriated a total of P2,280,000 for the
construction of the public market stalls. Jumamil alleged that these
ordinances were discriminatory because, even prior to their
enactment, a decision had already been made to award the market
stalls to the private respondents who deposited P40,000 each and who
were either friends or relatives of the mayor or members of the
Sanggunian. Jumamil asserted that “there (was) no publication or
invitation to the public that this contract (was) available to all who
(were) interested to own a stall and (were) willing to deposit P40,000.”
Respondents, however, counter that the “public respondents’ act of
entering into this agreement was authorized by the Sangguniang
Bayan of Panabo per Resolution 180 dated 10 October 1988” and that
“all the people interested were invited to participate in investing their
savings.” Jumamil failed to prove the subject ordinances and
agreements to be discriminatory. Considering that he was asking the
Court to nullify the acts of the local political department of Panabo,
Davao del Norte, he should have clearly established that such
ordinances operated unfairly against those who were not notified and
who were thus not given the opportunity to make their deposits. His
unsubstantiated allegation that the public was not notified did not
suffice. Furthermore, there was the time-honored presumption of
regularity of official duty, absent any showing to the contrary.
Velarde v SJS (2004)
Doctrine: Decision, more specifically a decision not conforming to the
form and substance required by the Constitution is void and deemed
legally inexistent (Panganiban)
Mike Velarde, Petitioner vs. SOCIAL JUSTICE SOCIETY,
respondent.
Date promulgated: April 28, 2004
Ponente: J. Panganiban
Facts:
-On January 28, 2003, SJS filed a Petition for Declaratory Relief
before the RTC-Manila against Velarde and his co-respondents
Eminence, Jaime Cardinal Sin, Executive Minister Eraño Manalo,
Brother Eddie Villanueva and Brother Eliseo F. Soriano.
-SJS, a registered political party, sought the interpretation of several
constitutional provisions, specifically on the separation of church and
state; and a declaratory judgment on the constitutionality of the acts
of religious leaders endorsing a candidate for an elective office, or
urging or requiring the members of their flock to vote for a specified
candidate.
-The petitioner filed a Motion to dismiss before the trial court owing
to the fact that alleged that the questioned SJS Petition did not state a
cause of action and that there was no justiciable controversy.
-The trial court’s junked the Velarde petitions under certain reasons:
1. It said that it had jurisdiction over the SJS petition, because in
praying for a determination as to whether the actions imputed to the
respondents were violative of Article II, Section 6 of the Fundamental
Law, the petition has raised only a question of law.
2. It then proceeded to a lengthy discussion of the issue raised in the
Petition – the separation of church and state – even tracing, to some
extent, the historical background of the principle. Through its
discourse, the court quipped at some point that the "endorsement of
specific candidates in an election to any public office is a clear
violation of the separation clause."
-The trial court’s essay did not contain a statement of facts and a
dispositive portion, however. Due to this aberration, Velarde and
Soriano filed separate Motions for Reconsideration before the trial
court owing to these facts.
-The lower court denied these Motions. Hence, this petition for
review.
On April 13, 2004, the Court en banc conducted an Oral Argument.14
-In his Petition, Brother Mike Velarde submits the following issues
for this Court’s resolution:
1. Whether or not the Decision dated 12 June 2003 rendered by the
court a quo was proper and valid;
2. Whether or not there exists justiciable controversy in herein
respondent’s Petition for declaratory relief;
3. Whether or not herein respondent has legal interest in filing the
Petition for declaratory relief;
4. Whether or not the constitutional question sought to be resolved by
herein respondent is ripe for judicial determination;
5. Whether or not there is adequate remedy other than the declaratory
relief; and,
6. Whether or not the court a quo has jurisdiction over the Petition for
declaratory relief of herein respondent.
Issues:
In its oral argument, the Supreme Court condensed Velarde’s issues
and divided it into 2 groups:
A. Procedural Issues
1. Did the Petition for Declaratory Relief raise a justiciable
controversy?
2. Did it state a cause of action?
3.Did respondent have any legal standing to file the Petition for
Declaratory Relief?
B. Substantive Issues
1. Did the RTC Decision conform to the form and substance required
by the Constitution, the law and the Rules of Court?
2. May religious leaders like herein petitioner, Bro. Mike
Velarde, be prohibited from endorsing candidates for public office?
Corollarily, may they be banned from campaigning against said
candidates? (Not answered in the affirmative)
Decision:
Petition for Review GRANTED. The assailed June 12, 2003 Decision
and July 29, 2003 Order of the Regional Trial Court of Manila
DECLARED NULL AND VOID and thus SET ASIDE. The SJS
Petition for Declaratory Relief is DISMISSED for failure to state a
cause of action.
Holding:
Procedural Issues:
1. NO. A justiciable controversy to an existing case or
controversy that is appropriate or ripe for judicial determination,
not one that is conjectural or merely anticipatory. A petition filed
with the trial court should contain a plain, concise and direct
statement of the ultimate facts on which the party pleading relies
for his claim.
The SJS Petition fell short of the requirements to constitutue a
jusiciable controversy. Why?
a. It stated no ultimate facts. The petition simply theorized that the
people elected who were endorsed by these religious leaders might
become beholden to the latter.
b. It did not sufficiently state a declaration of its rights
and duties, what specific legal right of the petitioner was violated by
the respondents therein, and what particular act or acts of the latter
were in breach of its rights, the law or the constitution,
c. The petition did not pray for a stoppage of violated
rights (duh, wala ngang rights na sinabi eh). It merely sought an
opinion of the trial court. However, courts are proscribed from
rendering an advisory opinion. (tantamount to making laws, remember
the questionability of justice panganiban’s guidelines for article 36 of
the family code)
It must also be considered that even the religious leaders were puzzled
as to the breach of rights they were claimed to have committed. As
pointed out by Soriano, what exactly has he done that merited the
attention of SJS? Jaime Cardinal Sin adds that the election season had
not even started at the time SJS filed its Petition and that he has not
been actively involved in partisan politics. The Petition does not even
allege any indication or manifest intent on the part of any of the
respondents below to champion an electoral candidate, or to urge their
so-called flock to vote for, a particular candidate. It is a time-honored
rule that sheer speculation does not give rise to an actionable right.
2. NO. A cause of action is an act or an omission of one
party in violation of the legal right or rights of another, causing injury
to the latter. (Rebollido v. Court of Appeals, 170 SCRA 800)
Its essential elements are the following: (1) a right in favor of the
plaintiff; (2) an obligation on the part of the named defendant to
respect or not to violate such right; and (3) such defendant’s act or
omission that is violative of the right of the plaintiff or constituting a
breach of the obligation of the former to the latter.
The court held that the complaint’s failure to state a cause of action
became a ground for its outright dismissal. Why?
The Court found nothing in the SJS Petition to suggest that an explicit
allegation of fact that SJS had a legal right to protect. (trigger for the
cause of action)
In special civil actions for declaratory relief, the concept of cause of
action under ordinary civil actions does not strictly apply. The reason
for this exception is that an action for declaratory relief presupposes
that there has been no actual breach of the instruments involved or of
rights arising thereunder. Nevertheless, a breach or violation should
be impending, imminent or at least threatened.
The justices could only infer that the interest from its allegation was
its mention of “its (SJS) thousands of members who are citizens-
taxpayers-registered voters and who are keenly interested”. Aside
from the fact that this general averment did not constitute a legal right
or interest, the court’s inferred interest too vague and speculative in
character. Rules require that the interest must be material to the
issue and affected by the questioned act or instrument.
To bolster its point, the SJS cited the Corpus Juris Secundum and
submitted that the plaintiff in a declaratory judgment action does not
seek to enforce a claim against the defendant, but sought a judicial
declaration of the rights of the parties for the purpose of guiding their
future conduct, and the essential distinction between a ‘declaratory
judgment action’ and the usual ‘action’ is that no actual wrong need
have been committed or loss have occurred in order to sustain the
declaratory judgment action, although there must be no
uncertainty that the loss will occur or that the asserted rights will
be invaded. (???)
During the Oral Argument, Velarde and co-respondents strongly
asserted that they had not in any way engaged or intended to
participate in partisan politics. Not even the alleged proximity of the
elections to the time the Petition was filed below would have provided
the certainty that it had a legal right that would be jeopardized or
violated by any of those respondents.
Even if the SJS petition asserted a legal right, there was nevertheless
no certainty that such right would be invaded by the said respondents.
3. NO. Legal standing or locus standi has been defined as
a personal and substantial interest in the case, such that the party
has sustained or will sustain direct injury as a result of the
challenged act.
Interest means a material interest in issue that is affected by the
questioned act or instrument, as distinguished from a mere incidental
interest in the question involved.
SJS has no legal interest in the controversy and has failed to
establish how the resolution of the proffered question would benefit
or injure it.
Parties bringing suits challenging the constitutionality of a law, an act
or a statute must demonstrate that they have been, or are about to
be, denied some right or privilege to which they are lawfully
entitled, or that they are about to be subjected to some burdens or
penalties by reason of the statute or act complained of.
If the petition were to be valid, it should satisfy:
First, parties suing as taxpayers must specifically prove that they have
sufficient interest in preventing the illegal expenditure of money
raised by taxation, particularly that of Congress' taxing power.
Second, there was no showing in the Petition for Declaratory Relief
that SJS as a political party or its members as registered voters would
be adversely affected by the alleged acts of the respondents below,
such as the deprivation of votes or barring of suffrage to its
constituents.
Finally, the allegedly keen interest of its "thousands of members who
are citizens-taxpayers-registered voters" is too general and beyond the
contemplation of the standards set by our jurisprudence. Not only is
the presumed interest impersonal in character; it is likewise too vague,
highly speculative and uncertain to satisfy the requirement of
standing.
In not a few cases, the Court has liberalized the locus standi
requirement when a petition raises an issue of transcendental
significance or importance to the people (IBP v Zamora). The Court
deemed the constitutional issue raised to be both transcendental in
importance and novel in nature. Nevertheless, the barren allegations
in the SJS Petition as well as the abbreviated proceedings in the court
would prevent the resolution of the transcendental issue.
Substantive Issues
1. NO. The Constitution commands that no decision shall
be rendered by any court without expressing therein clearly and
distinctly the facts and the law on which it is based. No petition
for review or motion for reconsideration of a decision of the court
shall be refused due course or denied without stating the basis
therefor.
Consistent with this are Section 1 of Rule 36 of the Rules on Civil
Procedure, Rule 120 of the Rules of Court on Criminal Procedure,
Administrative Circular No. 1. which states that :
“A judgment or final order determining the merits of the case shall be
rendered. The decision shall be in writing, personally and directly
prepared by the judge, stating clearly and distinctly the facts and
law on which it is based, signed by the issuing magistrate, and filed
with the clerk of court.”
The SC has reminded magistrates to heed the demand of Section `4,
Art VIII of the contsitution. This was evinced in Yao v. Court of
Appeals where Davide, CJ said that faithful adherence to the
requirements of Section 14, Article VIII of the Constitution is
indisputably a paramount component of due process and fair play.
In People v. Bugarin, the court held that the requirement that the
decisions of courts must be in writing and that they must set forth
clearly and distinctly the facts and the law on which they are based is
intended, among other things, to inform the parties of the reason or
reasons for the decision so that if any of them appeals, he can point
out to the appellate court the finding of facts or the rulings on
points of law with which he disagrees.
The assailed Decision contains no statement of facts (much less an
assessment or analysis thereof) or of the court’s findings as to the
probable facts. The assailed Decision begins with a statement of the
nature of the action and the question or issue presented. Then follows
a brief explanation of the constitutional provisions involved, and what
the Petition sought to achieve. Thereafter, the ensuing procedural
incidents before the trial court are tracked. The Decision proceeds to
a full-length opinion on the nature and the extent of the separation of
church and state. Without expressly stating the final conclusion she
has reached or specifying the relief granted or denied, the trial judge
ends her “Decision” with the clause “SO ORDERED.”
A decision that does not clearly and distinctly state the facts and
the law on which it is based leaves the parties in the dark as to how
it was reached and is precisely prejudicial to the losing party, who
is unable to pinpoint the possible errors of the court for review by
a higher tribunal. More than that, the requirement is an
assurance to the parties that, in reaching judgment, the judge did
so through the processes of legal reasoning.
It was truly obvious that the RTC’s Decision did not adhere to the
Bugarin precedent because of its failure to express clearly and
distinctly the facts on which it was based. The significance of factual
findings lies in the value of the decision as a precedent (how will the
ruling be applied in the future, if there is no point of factual
comparison?).
Respondent SJS insisted that the dispositive portion can be found in
the body (p. 10) of the assailed Decision. Stating “Endorsement of
specific candidates in an election to any public office is a clear
violation of the separation clause.”
The Court held that the statement is merely an answer to a hypothetical
legal question and just a part of the opinion of the trial court. It does
not conclusively declare the rights (or obligations) of the parties to the
Petition. Neither does it grant any -- much less, the proper -- relief
under the circumstances, as required of a dispositive portion.
The standard for a dispositive was set in Manalang v. Tuason de
Rickards where the resolution of the Court on a given issue as
embodied in the dispositive part of the decision or order is the
investitive or controlling factor that determines and settles the
rights of the parties and the questions presented therein,
notwithstanding the existence of statements or declaration in the body
of said order that may be confusing.
In Magdalena Estate, Inc. v. Caluag: The rule is settled that where
there is a conflict between the dispositive part and the opinion, the
former must prevail over the latter on the theory that the dispositive
portion is the final order while the opinion is merely a statement
ordering nothing.
The statement quoted by SJS does not conclusively declare the rights
(or obligations) of the parties to the Petition. Neither does it grant
proper relief under the circumstances, as required of a dispositive
portion.
Failure to comply with the constitutional injunction is a grave abuse
of discretion amounting to lack or excess of jurisdiction. Decisions
or orders issued in careless disregard of the constitutional mandate are
a patent nullity and must be struck down as void.
2. It is not legally possible to take up, on the merits, the
paramount question involving a constitutional principle. It is a time-
honored rule that the constitutionality of a statute or act will be passed
upon only if, and to the extent that, it is directly and necessarily
involved in a justiciable controversy and is essential to the protection
of the rights of the parties concerned. (So no answer)
DBM v Manila’s Finest
G.R. No. 169466, May 9, 2007
I. Facts
• 1975- PD 765 was issued constituting the Integrated National
Police (INP) to be composed of the Philippine Constabulary (PC) as
the nucleus and the integrated police forces as components thereof
• 1977- PD 1184 complemented PD 765, which was issued to
professionalize the INP and promote career development therein
• 1990- RA 6975 (An Act Establishing the Philippine National
Police Under a Reorganized Department of the Interior And Local
Government, and For Other Purposes or PNP Law) was enacted
o Under Sec. 23, the PNP would initially consist of the
members of the INP, created under PD 675, as well as the officers and
enlisted personnel of the PC
• 1998- RA 6975 was amended by RA 8551 (Philippine National
Police Reform and Reorganization Act of 1998)
o Amendatory law that reengineered the retirement scheme
in the police organization
o It enabled the PNP to have higher retirement benefits that
the INP and PC
• 2002- Manila’s Finest Retirees Association, Inc. (consisted of
INP retirees) filed a petition for declaratory relief against DBM, PNP,
NAPOLCOM, CSC, and GSIS
o MFRAI’s petition stated that they are absorbed and equally
considered as PNP-retirees and thus, entitled to enjoy the same or
identical retirement benefits bestowed to PNP-retirees by virtue of the
PNP Law (RA 6975), as amended by RA 8551
o GSIS moved to dismiss on the grounds of lack of
jurisdiction and cause of action
o CSC, DBM, NAPOLCOM, and PNP replied that the
petitioners are not entitled to have equal retirement benefits as PNP-
retirees because the former have already retired prior to the enactment
of RA 6975
• 2003- RTC ruled that RA 6975 did not abolish the INP but
merely provided for its absorption of its police functions by the PNP
• April 2003- RTC granted GSIS’s motion to dismiss
• 2005- CA affirmed RTC’s decision that the INP should have
equal or identical retirement benefits as the PNP under RA 6975
• Petitioners filed a petition w/ the SC assailing that the CA
committed a serious error in law in affirming the decision of the RTC
notwithstanding that it is contrary to law and established jurisprudence
II. Issue W/N the INP should have equal or identical retirement
benefits as the PNP under RA 6975, as amended by RA 8551
III. Ruling
• Yes
o The court stated that during Martial Law, the PC-INP had
a military character, being then a major service of the AFP, but was
subsequently moved by a fresh constitutional mandate, after the
Marcos regime, for the establishment of one police force which should
be national in scope and, most importantly, purely civilian in character
o The court mentioned Sec. 2 of RA 6975 which stated:
§ Section 2. Declaration of policy - It is hereby
declared to be the policy of the State to promote peace and order,
ensure public safety and further strengthen local government
capability aimed towards the effective delivery of the basic services
to the citizenry through the establishment of a highly efficient and
competent police force that is national in scope and civilian in
character. xxx.
The police force shall be organized, trained and equipped primarily
for the performance of police functions. Its national scope and civilian
character shall be paramount. No element of the police force shall be
military nor shall any position thereof be occupied by active members
of the [AFP].
o Sec. 23 of RA 6975 also states that the PNP is initially
consisted of the members of the police forces who were integrated into
the INP by virtue of PD 765
o Sec. 86 of RA 6975 likewise states:
§ “Phase I…… At the end of this phase, all personnel from the INP,
PC, AFP Technical Services, NACAH, and NAPOLCOM Inspection,
Investigation and Intelligence Branch shall have been covered by
official orders assigning them to the PNP, Fire and Jail Forces by their
respective units.”
Phase II….. Any PC-INP officer or enlisted personnel may, within the
twelve-month period from the effectivity of this Act, retire and be paid
retirement benefits corresponding to a position two (2) ranks higher
than his present grade, subject to the conditions that at the time he
applies for retirement, he has rendered at least twenty (20) years of
service and still has, at most, twenty-four (24) months of service
remaining before the compulsory retirement age as provided by
existing law for his office.
Phase III….. Upon the effectivity of this Act, the [DILG] Secretary
shall exercise administrative supervision as well as operational control
over the transferred, merged and/or absorbed AFP and INP units. The
incumbent Director General of the PC-INP shall continue to act as
Director General of the PNP until replaced .
o Based from the provisions above, it is clear that RA 6975 does not
abolish the PC-INP, but absorbs, transfers, and merges it with the PNP
o The court also stated that the legislative intent in the passing of RA
6975 was to remove the police force under the control and supervision
of military officers and it likewise seeks to restore and underscore the
civilian character of police work – an otherwise universal concept that
was muddled by the martial law years
o Regarding those that were already retired by the time of the passing
of RA 6975, based on the statement made by the CA, they are still
entitled to claim such benefits because their membership in the INP
was an antecedent fact that nonetheless allowed them to avail
themselves of the benefits of the subsequent laws and RA 6795
considered them as PNP members
o It was also explicitly stated in RA 8551 (amended RA 6795) that
the rationalized retirement benefits schedule and program shall have
retroactive effect in favor of PNP members and officers retired or
separated from the time specified in law
———
In a further bid to scuttle respondents entitlement to the desired
retirement benefits, the petitioners fault the trial court for ordering the
immediate adjustments of the respondents retirement benefits when
the basic petition filed before it was one for declaratory relief. To the
petitioners, such petition does not essentially entail an executory
process, the only relief proper under that setting being a declaration of
the parties rights and duties.
Petitioners above posture is valid to a point. However, the execution
of judgments in a petition for declaratory relief is not necessarily
indefensible. In Philippine Deposit Insurance Corporation[PDIC] v.
Court of Appeals, wherein the Court affirmed the order for the
petitioners therein to pay the balance of the deposit insurance to the
therein respondents, we categorically ruled:
Now, there is nothing in the nature of a special civil action for
declaratory relief that proscribes the filing of a counterclaim based on
the same transaction, deed or contract subject of the complaint. A
special civil action is after all not essentially different from an ordinary
civil action, which is generally governed by Rules 1 to 56 of the Rules
of Court, except that the former deals with a special subject matter
which makes necessary some special regulation. But the identity
between their fundamental nature is such that the same rules
governing ordinary civil suits may and do apply to special civil actions
if not inconsistent with or if they may serve to supplement the
provisions of the peculiar rules governing special civil actions.
Similarly, in Matalin Coconut Co., Inc. v. Municipal
Council of Malabang, Lanao del Sur: the Court upheld the lower
courts order for a party to refund the amounts paid by the adverse party
under the municipal ordinance therein questioned, stating:
x x x Under Sec. 6 of Rule 64, the action for declaratory relief may be
converted into an ordinary action and the parties allowed to file such
pleadings as may be necessary or proper, if before the final
termination of the case "a breach or violation of an ordinance, should
take place." In the present case, no breach or violation of the ordinance
occurred. The petitioner decided to pay "under protest" the fees
imposed by the ordinance. Such payment did not affect the case; the
declaratory relief action was still proper because the applicability of
the ordinance to future transactions still remained to be resolved,
although the matter could also be threshed out in an ordinary suit for
the recovery of taxes paid . In its petition for declaratory relief,
petitioner-appellee alleged that by reason of the enforcement of the
municipal ordinance by respondents it was forced to pay under protest
the fees imposed pursuant to the said ordinance, and accordingly, one
of the reliefs prayed for by the petitioner was that the respondents be
ordered to refund all the amounts it paid to respondent Municipal
Treasurer during the pendency of the case. The inclusion of said
allegation and prayer in the petition was not objected to by the
respondents in their answer. During the trial, evidence of the
payments made by the petitioner was introduced. Respondents were
thus fully aware of the petitioner's claim for refund and of what would
happen if the ordinance were to be declared invalid by the court.
The Court sees no reason for treating this case
differently from PDIC and Matalin. This disposition becomes all the
more appropriate considering that the respondents, as petitioners in
the RTC, pleaded for the immediate adjustment of their retirement
benefits which, significantly, the herein petitioners, as respondents in
the same court, did not object to. Being aware of said prayer, the
petitioners then already knew the logical consequence if, as it turned
out, a declaratory judgment is rendered in the respondents favor.
At bottom then, the trial courts judgment forestalled
multiplicity of suits which, needless to stress, would only entail a long
and arduous process. Considering their obvious advanced years, the
respondents can hardly afford another protracted proceedings. It is
thus for this Court to already write finis to this case.
MMDA v Viron Transport G.R. No. 170656 August 15, 2007
J. Carpio Morales
Facts:
GMA declared Executive Order (E.O.) No. 179 operational, thereby
creating the MMDA in 2003. Due to traffic congestion, the MMDA
recommended a plan to “decongest traffic by eliminating the bus
terminals now located along major Metro Manila thoroughfares and
providing more and convenient access to the mass transport system.”
The MMC gave a go signal for the project. Viron Transit, a bus
company assailed the move. They alleged that the MMDA didn’t have
the power to direct operators to abandon their terminals. In doing so
they asked the court to interpret the extent and scope of MMDA’s
power under RA 7924. They also asked if the MMDA law
contravened the Public Service Act.
Another bus operator, Mencorp, prayed for a TRO for the
implementation in a trial court. In the Pre-Trial Order17 issued by the
trial court, the issues were narrowed down to whether 1) the MMDA’s
power to regulate traffic in Metro Manila included the power to direct
provincial bus operators to abandon and close their duly established
and existing bus terminals in order to conduct business in a common
terminal; (2) the E.O. is consistent with the Public Service Act and the
Constitution; and (3) provincial bus operators would be deprived of
their real properties without due process of law should they be
required to use the common bus terminals. The trial court sustained
the constitutionality.
Both bus lines filed for a MFR in the trial court. It, on September 8,
2005, reversed its Decision, this time holding that the E.O. was "an
unreasonable exercise of police power"; that the authority of the
MMDA under Section (5)(e) of R.A. No. 7924 does not include the
power to order the closure of Viron’s and Mencorp’s existing bus
terminals; and that the E.O. is inconsistent with the provisions of the
Public Service Act.
MMDA filed a petition in the Supreme Court. Petitioners contend that
there is no justiciable controversy in the cases for declaratory relief as
nothing in the body of the E.O. mentions or orders the closure and
elimination of bus terminals along the major thoroughfares of Metro
Manila. To them, Viron and Mencorp failed to produce any letter or
communication from the Executive Department apprising them of an
immediate plan to close down their bus terminals.
And petitioners maintain that the E.O. is only an administrative
directive to government agencies to coordinate with the MMDA and
to make available for use government property along EDSA and South
Expressway corridors. They add that the only relation created by the
E.O. is that between the Chief Executive and the implementing
officials, but not between third persons.
Issues:
1. Is there a justiciable controversy?
2. Is the elimination of bus terminals unconstitutional?
Held: Yes to both. Petition dismissed.
Ratio:
1. Requisites: (a) there must be a justiciable controversy; (b) the
controversy must be between persons whose interests are adverse; (c)
the party seeking declaratory relief must have a legal interest in the
controversy; and (d) the issue invoked must be ripe for judicial
determination.
It cannot be gainsaid that the E.O. would have an adverse effect on
respondents. The closure of their bus terminals would mean, among
other things, the loss of income from the operation and/or rentals of
stalls thereat. Precisely, respondents claim a deprivation of their
constitutional right to property without due process of law.
Respondents have thus amply demonstrated a "personal and
substantial interest in the case such that [they have] sustained, or will
sustain, direct injury as a result of [the E.O.’s] enforcement."
Consequently, the established rule that the constitutionality of a law
or administrative issuance can be challenged by one who will sustain
a direct injury as a result of its enforcement has been satisfied by
respondents.
2. Under E.O. 125 A, the DOTC was given the objective of guiding
government and private investment in the development of the
country’s intermodal transportation and communications systems. It
was also tasked to administer all laws, rules and regulations in the field
of transportation and communications.
It bears stressing that under the provisions of E.O. No. 125, as
amended, it is the DOTC, and not the MMDA, which is authorized to
establish and implement a project such as the one subject of the cases
at bar. Thus, the President, although authorized to establish or cause
the implementation of the Project, must exercise the authority through
the instrumentality of the DOTC which, by law, is the primary
implementing and administrative entity in the promotion,
development and regulation of networks of transportation, and the one
so authorized to establish and implement a project such as the Project
in question.
By designating the MMDA as the implementing agency of the Project,
the President clearly overstepped the limits of the authority conferred
by law, rendering E.O. No. 179 ultra vires. There was no grant of
authority to MMDA. It was delegated only to set the policies
concerning traffic in Metro Manila, and shall coordinate and regulate
the implementation of all programs and projects concerning traffic
management, specifically pertaining to enforcement, engineering and
education.
In light of the administrative nature of its powers and functions, the
MMDA is devoid of authority to implement the Project as envisioned
by the E.O; hence, it could not have been validly designated by the
President to undertake the Project.
MMDA’s move didn’t satisfy police power requirements such as that
(1) the interest of the public generally, as distinguished from that of a
particular class, requires its exercise; and (2) the means employed are
reasonably necessary for the accomplishment of the purpose and not
unduly oppressive upon individuals. Stated differently, the police
power legislation must be firmly grounded on public interest and
welfare and a reasonable relation must exist between the purposes and
the means.
As early as Calalang v. Williams, this Court recognized that traffic
congestion is a public, not merely a private, concern. The Court
therein held that public welfare underlies the contested statute
authorizing the Director of Public Works to promulgate rules and
regulations to regulate and control traffic on national roads.
Likewise, in Luque v. Villegas,46 this Court emphasized that public
welfare lies at the bottom of any regulatory measure designed "to
relieve congestion of traffic, which is, to say the least, a menace to
public safety." As such, measures calculated to promote the safety and
convenience of the people using the thoroughfares by the regulation
of vehicular traffic present a proper subject for the exercise of police
power.
Notably, the parties herein concede that traffic congestion is a public
concern that needs to be addressed immediately. Are the means
employed appropriate and reasonably necessary for the
accomplishment of the purpose. Are they not duly oppressive?
De la Cruz v. Paras- Bus terminals per se do not, however, impede or
help impede the flow of traffic. How the outright proscription against
the existence of all terminals, apart from that franchised to petitioner,
can be considered as reasonably necessary to solve the traffic problem,
this Court has not been enlightened
In the subject ordinances, however, the scope of the proscription
against the maintenance of terminals is so broad that even entities
which might be able to provide facilities better than the franchised
terminal are barred from operating at all.
Finally, an order for the closure of respondents’ terminals is not in line
with the provisions of the Public Service Act.
Consonant with such grant of authority, the PSC (now the ltfrb)was
empowered to "impose such conditions as to construction, equipment,
maintenance, service, or operation as the public interests and
convenience may reasonably require" in approving any franchise or
privilege. The law mandates the ltfrb to require any public service to
establish, construct, maintain, and operate any reasonable extension
of its existing facilities.
interest in the controversy; and (d) the issue invoked must be ripe for
judicial determination.[25]
The requirement of the presence of a justiciable
controversy is satisfied when an actual controversy or the ripening
seeds thereof exist between the parties, all of whom are sui juris and
before the court, and the declaration sought will help in ending the
controversy.[26] A question becomes justiciable when it is translated
into a claim of right which is actually contested.[27]
under the circumstances, for respondents to wait for the
actual issuance by the MMDA of an order for the closure of
respondents bus terminals would be foolhardy for, by then, the proper
action to bring would no longer be for declaratory relief which, under
Section 1, Rule 63[30] of the Rules of Court, must be brought before
there is a breach or violation of rights.

——

On February 24, 2003, Viron Transport Co., Inc. (Viron), a domestic

corporation engaged in the business of public transportation with a
provincial bus operation,[9] filed a petition for declaratory relief[10]
before the RTC[11] of Manila.

Hence, this petition, which faults the trial court for

failing to rule that: (1) the requisites of declaratory relief are not
present, there being no justiciable controversy in Civil Case Nos. 03-
105850 and 03-106224; and (2) the President has the authority to
undertake or cause the implementation of the Project.[19]

Petitioners contend that there is no justiciable

controversy in the cases for declaratory relief as nothing in the body
of the E.O. mentions or orders the closure and elimination of bus
terminals along the major thoroughfares of Metro Manila. Viron and
Mencorp, they argue, failed to produce any letter or communication
from the Executive Department apprising them of an immediate plan
to close down their bus terminals.

And petitioners maintain that the E.O. is only an

administrative directive to government agencies to coordinate with the
MMDA and to make available for use government property along
EDSA and South Expressway corridors. They add that the only
relation created by the E.O. is that between the Chief Executive and
the implementing officials, but not between third persons.

The petition fails.

It is true, as respondents have pointed out, that the

alleged deficiency of the consolidated petitions to meet the
requirement of justiciability was not among the issues defined for
resolution in the Pre-Trial Order of January 12, 2004. It is equally true,
however, that the question was repeatedly raised by petitioners in their
Answer to Virons petition,[20] their Comment of April 29, 2003
opposing Mencorps prayer for the issuance of a TRO,[21] and their
Position Paper of August 23, 2004.[22]

In bringing their petitions before the trial court, both

respondents pleaded the existence of the essential requisites for their
respective petitions for declaratory relief,[23] and refuted petitioners
contention that a justiciable controversy was lacking.[24] There can
be no denying, therefore, that the issue was raised and discussed by
the parties before the trial court.

The following are the essential requisites for a

declaratory relief petition: (a) there must be a justiciable controversy;
(b) the controversy must be between persons whose interests are
adverse; (c) the party seeking declaratory relief must have a legal