Aytona vs Castillo Case Digest

FACTS:
On December 29, 1961, Carlos P. Garcia, who was still President that time, made last minute
appointments while the Commission on Appointments was not in session. Said last minute appointment
included Dominador R. Aytona, who was appointed as ad interim Governor of Central Bank. The latter
took oath on the same day.
At noon on December 30, 1961, President-elect Diosdado Macapagal assumed office. He issued
Administrative Order No. 2 on December 31, 1961 recalling, withdrawing and canceling all ad interim
appointments made by President Garcia after December 13, 1961, which was the date when Macapagal
was proclaimed President by the Congress. He then appointed Andres V. Castillo as ad interim Governor
of the Central Bank and the latter qualified immediately.
On January 2, 1962, both exercised the powers of their office. However, Aytona was prevented from
holding office the following day and thus instituted a quo warranto proceeding, challenging Castillos right
to exercise the powers of the Governor of the Central Bank. Aytona claims that he was validly appointed
and had qualified for the post, therefore making Castillos appointment void. Castillo then contended that
Aytonas appointment had already been revoked by Administrative Order No. 2 issued by President
Macapagal.
ISSUE:
Whether President Diosdado Macapagal had power to issue the order of cancellation of the ad interim
appointments made by President Carlos P. Garcia even after the appointees had already qualified.
RULING:
Upon the ground of separation of powers, the court resolved that it must decline and refuse jurisdiction
in disregarding the Presidential Administrative Order No. 2, canceling such midnight or last-minute
appointments.
Case dismissed.
by:
Frances Katherine G. Miraflor- C1

SALVACION VS. CENTRAL BANK

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural Guardian, and Spouses FEDERICO N.
SALVACION, JR., and EVELINA E. SALVACION vs. CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING
CORPORATION and GREG BARTELLI y NORTHCOTT
G.R. No. 94723 August 21, 1997
FACTS: Greg Bartelli, an American tourist, was arrested for committing four counts of rape and serious illegal detention
against Karen Salvacion. Police recovered from him several dollar checks and a dollar account in the China Banking Corp.
He was, however, able to escape from prison. In a civil case filed against him, the trial court awarded Salvacion moral,
exemplary and attorneys fees amounting to almost P1,000,000.00.
Salvacion tried to execute the judgment on the dollar deposit of Bartelli with the China Banking Corp. but the latter refused
arguing that Section 11 of Central Bank Circular No. 960 exempts foreign currency deposits from attachment, garnishment, or
any other order or process of any court, legislative body, government agency or any administrative body whatsoever.
Salvacion therefore filed this action for declaratory relief in the Supreme Court.
ISSUE: Should Section 113 of Central Bank Circular No. 960 and Section 8 of Republic Act No. 6426, as amended by PD
1246, otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign transient?
HELD: NO.
The provisions of Section 113 of Central Bank Circular No. 960 and PD No. 1246, insofar as it amends Section 8 of Republic
Act No. 6426, are hereby held to be INAPPLICABLE to this case because of its peculiar circumstances. Respondents are
hereby required to comply with the writ of execution issued in the civil case and to release to petitioners the dollar deposit of
Bartelli in such amount as would satisfy the judgment.
Supreme Court ruled that the questioned law makes futile the favorable judgment and award of damages that Salvacion and
her parents fully deserve. It then proceeded to show that the economic basis for the enactment of RA No. 6426 is not
anymore present; and even if it still exists, the questioned law still denies those entitled to due process of law for being
unreasonable and oppressive. The intention of the law may be good when enacted. The law failed to anticipate the iniquitous
effects producing outright injustice and inequality such as the case before us.
The SC adopted the comment of the Solicitor General who argued that the Offshore Banking System and the Foreign
Currency Deposit System were designed to draw deposits from foreign lenders and investors and, subsequently, to give the
latter protection. However, the foreign currency deposit made by a transient or a tourist is not the kind of deposit encouraged
by PD Nos. 1034 and 1035 and given incentives and protection by said laws because such depositor stays only for a few
days in the country and, therefore, will maintain his deposit in the bank only for a short time. Considering that Bartelli is just a
tourist or a transient, he is not entitled to the protection of Section 113 of Central Bank Circular No. 960 and PD No. 1246
against attachment, garnishment or other court processes.
Further, the SC said: In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the
questioned Section 113 of Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any administrative body whatsoever, is applicable to a foreign
transient, injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would
negate Article 10 of the New Civil Code which provides that in case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to prevail.
__________
NOTES:
- On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen Salvacion, then 12
years old to go with him to his apartment. Therein, Greg Bartelli detained Karen Salvacion for four days, or up to February 7,
1989 and was able to rape the child once on February 4, and three times each day on February 5, 6, and 7, 1989. On
February 7, 1989, after policemen and people living nearby, rescued Karen, Greg Bartelli was arrested and detained at the
Makati Municipal Jail. The policemen recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control No.
021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account
China Banking Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door Keys 6 pieces;
7.) Stuffed Doll (Teddy Bear) used in seducing the complainant.
FROM ATTY. BAYANI^^

Salvacion vs. Central Bank of the Philippines, China Banking Corporationand Greg Bartelli y Northcott
G.R. No. 94723 August 21, 1997
Torres,Jr., J,:
Facts:
On February 4-7, 1989, Greg Bartelli y Northcott, an American tourist, detained and repeatedly raped
KarenSalvacion, a 12-year old the victim, in the apartment of the accused in Makati City. That, on the 4
th
day of detention, Karenwas finally found by the policemen after a neighbor heard her crying and
screaming for help. The accused wasimmediately arrested within the premises of the building, and
eventually brought to Makati Municipal Jail. After thorough investigation and medical examination, the
victim, as represented by her parents, together with theFiscal filed criminal cases against Greg Bartelli y
Northcott for Serious Illegal Detention and for Four (4) counts of Rape.The petitioners also filed a
separate civil action for damages with preliminary attachment against the accused that hadseveral dollar
accounts in COCOBANK and China Banking Corporation. On February 24, 1989, the day there was
ahearing for Bartellis petition for bail the latter escaped from jail.The deputy sheriff served Notice of
Garnishment on China Banking Corporation but the latter declined to furnish acopy as it invoked R.A.
No. 1405. The sheriff again sent a letter stating that the garnishment did not violate the banksecrecy law
as it was legally made by virtue of a court order but China Banking Corporation invoked
Section 113 of Central Bank Circular No. 960, that dollar accounts are exempt from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any
administrative body, whatsoever
. The Central Bank senta reply after a demand from the court asking if the Section 113 of Central Bank
Circular No.960 is absolute in nature of which it replied in affirmative. After the accused was declared in
default, the court rendered a judgment in favor of the petitioners based on theheinous acts of the
accused and the grave effects on social, moral and psychological aspects on the part of thepetitioners.
China Banking Corporation refused the Writ of Execution of the court. Thus;Petitioners file a Petition for
Relief in the Supreme Court.
Issues:
Whether the dollar accounts of the Accused is absolutely exempt from attachment, garnishment or any
other order or process of any court?
Held:
While it is true that the protective cloak of confidentiality over foreign deposit accounts would better encourage the
inflowof foreign currency deposits, lending capacity of the government and would help financial stability and
the nationaldevelopment, what would be the relief of someone claiming damages against a person with foreign
deposit accounts?More so against a person who heinously and feloniously committed an offense in the territory of
the Philippines? As in thiscase, the accused deemed liable for the damages based of the heinous acts according
to the testimonies of the victimand the witnesses.It is the duty of the government to encourage foreign currency
deposits and to comply by giving confidentiality but in thecorrect argument of the Solicitor General, foreign
currency deposits of a tourist or transient is not the one encouraged byPD Nos. 1034 and 1305 on the ground that
said accounts is temporary and only for a short period of time.The application of the law depends on the extent
of its justice. If we rule Section 113 of Central Bank Circular No.960which exempts from attachment, garnishment,
or any other order or process of any court, legislative body, governmentagency or any administrative body
whatsoever, is applicable to foreign transient , injustice would result especially to acitizen aggrieved by a foreign
guest like accused Greg Bartelli. Article 10 of the New Civil Code provides that
in case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right
and justice to prevail . Simply stated,
when the statute is ambiguous, this isone of those fundamental solutions that would respond to vehement urge of
conscience.
It would be unthinkable that Section 113 of CB circular 960 would be used as a device by the accused for
wrongdoing,and in so doing, acquitting the guilty as the expense of the innocent. The situation calls for fairness
against legal tyranny.We definitely cannot have both ways and rest in the belief that we have served the ends of
justice.

Information Technology Foundation of the Philippines vs. Commission on Elections, G.R. No. 159139,
January 13, 2004
INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES MA. CORAZON M. AKOL,
MIGUEL UY, EDUARDO H. LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY
SALCEDO, and MANUEL ALCUAZ JR, petitioners,
vs. COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN ABALOS SR.; COMELEC
BIDDING and AWARD COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS GIDEON DE
GUZMAN, JOSE F. BALBUENA, LAMBERTO P. LLAMAS, and BARTOLOME SINOCRUZ JR.; MEGA
PACIFIC eSOLUTIONS, INC.; and MEGA PACIFIC CONSORTIUM, respondents.
[G.R. No. 159139. January 13, 2004]
FACTS:
Petitioners were participating bidders questioning the identity and eligibility of the awarded contractor
Mega Pacific Consortium (MPC) where the competing bidder is Mega Pacific eSolutions, Inc. (MPEI) as
signed by Mr. Willy Yu of the latter. Private respondent claims that MPEI is the lead partner tied up with
other companies like SK C&C, WeSolv, Election.com and ePLDT. Respondent COMELEC obtained
copies of Memorandum of Agreements and Teaming Agreements.
ISSUE:
Whether or not there was an existence of a consortium.
RULING:
NO. There was no documentary or other basis for Comelec to conclude that a consortium had actually
been formed amongst MPEI, SK C&C and WeSolv, along with Election.com and ePLDT. The president
of MPEI signing for allegedly in behalf of MPC without any further proof, did not by itself prove the
existence of the consortium. It did not show that MPEI or its president have been duly pre-authorized by
the other members of the putative consortium to represent them, to bid on their collective behalf and,
more important, to commit them jointly and severally to the bid undertakings. The letter is purely selfserving and uncorroborated.

ITF vs COMELEC
Facts: On June 7, 1995, Congress passed Republic Act 8046, which authorized Comelec to conduct a nationwide demonstration of a
computerized election system and allowed the poll body to pilot-test the system in the March 1996 elections in the Autonomous Region in
Muslim Mindanao (ARMM).
On October 29, 2002, Comelec adopted in its Resolution 02-0170 a modernization program for the 2004 elections. It resolved to
conduct biddings for the three (3) phases of its Automated Election System; namely, Phase I Voter Registration and Validation System;
Phase II Automated Counting and Canvassing System; and Phase III Electronic Transmission.
On January 24, 2003, President Gloria Macapagal-Arroyo issued Executive Order No. 172, which allocated the sum of P2.5 billion to
fund the AES for the May 10, 2004 elections. Upon the request of Comelec, she authorized the release of an additional P500 million.
On January 28, 2003, the Commission issued an "Invitation to Apply for Eligibility and to Bid".
On May 29, 2003, five individuals and entities (including the herein Petitioners Information Technology Foundation of the Philippines,
represented by its president, Alfredo M. Torres; and Ma. Corazon Akol) wrote a letter to Comelec Chairman Benjamin Abalos Sr. They
protested the award of the Contract to Respondent MPC "due to glaring irregularities in the manner in which the bidding process had been
conducted." Citing therein the noncompliance with eligibility as well as technical and procedural requirements (many of which have been
discussed at length in the Petition), they sought a re-bidding.
Issue: Whether the bidding process was unconstitutional;
Whether the awarding of the contract was unconstitutional;
Whether the petitioner has standing; and
Whether the petition is premature.
Held: WHEREFORE, the Petition is GRANTED. The Court hereby declares NULL and VOID Comelec Resolution No. 6074 awarding
the contract for Phase II of the CAES to Mega Pacific Consortium (MPC). Also declared null and void is the subject Contract executed
between Comelec and Mega Pacific eSolutions (MPEI). 55 Comelec is further ORDERED to refrain from implementing any other
contract or agreement entered into with regard to this project.
Ratio: Comelec awarded this billion-peso undertaking with inexplicable haste, without adequately checking and observing mandatory
financial, technical and legal requirements. It also accepted the proferred computer hardware and software even if, at the time of the
award, they had undeniably failed to pass eight critical requirements designed to safeguard the integrity of elections:
1. Awarded the Contract to MPC though it did not even participate in the bidding
2. Allowed MPEI to participate in the bidding despite its failure to meet the mandatory eligibility requirements
3. Issued its Resolution of April 15, 2003 awarding the Contract to MPC despite the issuance by the BAC of its Report, which
formed the basis of the assailed Resolution, only on April 21, 2003 31
4. Awarded the Contract, notwithstanding the fact that during the bidding process, there were violations of the mandatory
requirements of RA 8436 as well as those set forth in Comelec's own Request for Proposal on the automated election system IHaECA
5. Refused to declare a failed bidding and to conduct a re-bidding despite the failure of the bidders to pass the technical tests
conducted by the Department of Science and Technology
6. Failed to follow strictly the provisions of RA 8436 in the conduct of the bidding for the automated counting machines
After reviewing the slew of pleadings as well as the matters raised during the Oral Argument, the Court deems it sufficient to focus
discussion on the following major areas of concern that impinge on the issue of grave abuse of discretion:
A. Matters pertaining to the identity, existence and eligibility of MPC as a bidder
B. Failure of the automated counting machines (ACMs) to pass the DOST technical tests
C. Remedial measures and re-testings undertaken by Comelec and DOST after the award, and their effect on the present controversy
In view of the bidding process
Unfortunately, the Certifications from DOST fail to divulge in what manner and by what standards or criteria the condition,
performance and/or readiness of the machines were re-evaluated and re-appraised and thereafter given the passing mark.
The Automated Counting and Canvassing Project involves not only the manufacturing of the ACM hardware but also the development
of three (3) types of software, which are intended for use in the following:
1. Evaluation of Technical Bids
2. Testing and Acceptance Procedures
3. Election Day Use."
In short, Comelec claims that it evaluated the bids and made the decision to award the Contract to the "winning" bidder partly on the
basis of the operation of the ACMs running a "base" software. That software was therefore nothing but a sample or "demo" software,
which would not be the actual one that would be used on election day.

What then was the point of conducting the bidding, when the software that was the subject of the Contract was still to be created and
could conceivably undergo innumerable changes before being considered as being in final form?
In view of awarding of contract
The public bidding system designed by Comelec under its RFP (Request for Proposal for the Automation of the 2004 Election)
mandated the use of a two-envelope, two-stage system. A bidder's first envelope (Eligibility Envelope) was meant to establish its
eligibility to bid and its qualifications and capacity to perform the contract if its bid was accepted, while the second envelope would be the
Bid Envelope itself.
The Eligibility Envelope was to contain legal documents such as articles of incorporation, business registrations, licenses and permits,
mayor's permit, VAT certification, and so forth; technical documents containing documentary evidence to establish the track record of the
bidder and its technical and production capabilities to perform the contract; and financial documents, including audited financial
statements for the last three years, to establish the bidder's financial capacity.
However, there is no sign whatsoever of any joint venture agreement, consortium agreement, memorandum of agreement, or business
plan executed among the members of the purported consortium.So, it necessarily follows that, during the bidding process, Comelec had no
basis at all for determining that the alleged consortium really existed and was eligible and qualified; and that the arrangements among the
members were satisfactory and sufficient to ensure delivery on the Contract and to protect the government's interest.
In view of standing
On the other hand, petitioners suing in their capacities as taxpayers, registered voters and concerned citizens respond that the
issues central to this case are "of transcendental importance and of national interest." Allegedly, Comelec's flawed bidding and
questionable award of the Contract to an unqualified entity would impact directly on the success or the failure of the electoral process.
Thus, any taint on the sanctity of the ballot as the expression of the will of the people would inevitably affect their faith in the democratic
system of government. Petitioners further argue that the award of any contract for automation involves disbursement of public funds in
gargantuan amounts; therefore, public interest requires that the laws governing the transaction must be followed strictly.
Moreover, this Court has held that taxpayers are allowed to sue when there is a claim of "illegal disbursement of public funds," 22 or if
public money is being "deflected to any improper purpose"; 23 or when petitioners seek to restrain respondent from "wasting public funds
through the enforcement of an invalid or unconstitutional law."
In view of prematurity
The letter addressed to Chairman Benjamin Abalos Sr. dated May 29, 2003 28 serves to eliminate the prematurity issue as it was an
actual written protest against the decision of the poll body to award the Contract. The letter was signed by/for, inter alia, two of herein
petitioners: the Information Technology Foundation of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon
Akol. Such letter-protest is sufficient compliance with the requirement to exhaust administrative remedies particularly because it hews
closely to the procedure outlined in Section 55 of RA 9184.
Paat v. Court of Appeals enumerates the instances when the rule on exhaustion of administrative remedies may be disregarded, as
follows:
"(1) when there is a violation of due process,
(2) when the issue involved is purely a legal question,
(3) when the administrative action is patently illegal amounting to lack or excess of jurisdiction,
(4) when there is estoppel on the part of the administrative agency concerned,
(5) when there is irreparable injury,
(6) when the respondent is a department secretary whose acts as an alter ego of the President bears the implied and assumed approval
of the latter,
(7) when to require exhaustion of administrative remedies would be unreasonable,
(8) when it would amount to a nullification of a claim,
(9) when the subject matter is a private land in land case proceedings,
(10) when the rule does not provide a plain, speedy and adequate remedy, and
(11) when there are circumstances indicating the urgency of judicial intervention."

Voting pattern of Supreme Court Justices

http://www.abs-cbnnews.com/research/10/23/08/voting-pattern-supreme-court-justices
Research by Purple Romero, abs-cbnNEWS.com/Newsbreak
Posted at 10/23/2008 7:45 PM | Updated as of 10/24/2008 9:41 AM
Our survey of Supreme Court cases.

PRO-ADMIN ANTI-ADMIN
Puno
Quisumbing
Ynares-Santiago
Carpio
Austria
Corona
Carpio-Morales
Azcuna
Tinga
Chico-Nazario
Velasco
Nachura
Reyes
De Castro
Brion

10
14
4
9
10
15
10
7
15
13
9
4
2
4
3

7
7
16
12
10
3
11
9
7
3
3
3
2
0
0

NO
PART

CASE
% No
% Pro
% Anti
SURVEYED
Part
4
21
47.62
33.33 19.05
0
21
66.67
33.33
0.00
1
21
19.05
76.19
4.76
1
21
42.86
57.14
4.76
0
20
50.00
50.00
0.00
1
19
78.95
15.79
5.26
0
21
47.62
52.38
0.00
5
21
33.33
42.86 23.81
0
22
68.18
31.82
0.00
1
17
76.47
17.65
5.88
0
12
75.00
25.00
0.00
0
7
57.14
42.86
0.00
0
4
50.00
50.00
0.00
0
4
100.00
0.00
0.00
0
3
100.00
0.00
0.00

1. Case: Information Technology Foundation of the Philippines vs. Commission on Elections

Date of decision: January 13, 2004
Summary: The Supreme Court declared null and void the contracts awarded by the Commission on Elections for the automation of the
2004 elections.
2. Case: LA BUGAL-BLAAN TRIBAL ASSOCIATION, INC.,vs. VICTOR RAMOS
Date of decision: January 27, 2004
Summary: The Supreme Court struck down as unconstitutional the provisions of RA 7942 or the Mining Act and DENR Order 96-40 that
allowed financial technical assistance agreements. It also voided the FTAA between Western Mining Corp.-Philippines and the government
3. Case: SANLAKAS VS. EXECUTIVE SECRETARY
Date of decision: February 3, 2004
Summary: The Supreme Court dismissed the petitions assailing Proclamation No. 427 and General Order No. 4, which both declared a
state of rebellion, as unconstitutional.
4. Case: TECSON VS. COMMISSION ON ELECTIONS
Date of decision: March 3, 2004
Summary: The Supreme Court dismissed the petitions seeking to disqualify Poe as a presidential candidate for allegedly not being a
natural-born Filipino
5. Case: LA BUGAL-BLAAN TRIBAL ASSOCIATION, INC., VS. VICTOR RAMOS
Date of decision: December 1, 2004
Summary: The Supreme Court reversed its January 27, 2004 decision and declared as constitutional the Mining Act of 1995, DENR 96-40
and the FTAA between WMC Philippines and the government
6. Case: ESTRADA VS. DESIERTO
Date of decision: December 9, 2004
Summary: The Supreme Court ruled that the Court of Appeals did not err in dismissing Estradas petition for certiorari for lack of jurisdiction.
Estrada filed a motion for reconsideration at the appellate court questioning a resolution of the Ombudsman which dismissed criminal

charges against the BIR and Citibank officials who placed his foreign currency deposit on hold.
7. Case: LEGARDA VS. DE CASTRO
Date of decision: March 31, 2005
Summary: The Supreme Court denied De Castros motion for reconsideration and affirmed the jurisdiction of the Presidential Electoral
Tribunal over Legardas petition.
8. Case: ABAKADA Guro Party List Officer Samson Alcantara vs. Executive Secretary
Date of decision: October 18, 2005
Summary: The Supreme Court junked the motions for reconsideration filed by Alcantara which questioned the September 1, 2005 decision
of the High Court. In said decision, the SC declared RA 9337 or the VAT Reform Act as constitutional.
9. Case: PIMENTEL VS. ERMITA
Date of decision: October 13, 2005
Summary: The Supreme Court saw no abuse on the part of the president when she made ad interim appointments as these were made
during recess of Congress.
10. Case: REPUBLIC OF THE PHILIPPINES VS. HON. HENRICK F. GINGOYON
Date of decision: December 19, 2005
Summary: The Supreme Court granted in part the petition by modifying Gingoyons assailed January 4 and 5 orders, which prohibited the
government from awarding concessions or leasing any part of NAIA 3 to other parties pending its payment of P3 billion to PIATCO. The
Court also affirmed Gingoyons January 7 order, which appointed three commissioners who would ascertain the amount to be paid to
PIATCO for the NAIA-3 complex. It also lifted its January 15 TRO against Gingoyons order for the compensation of PIATCO.
11. Case: KILUSANG MAYO UNO VS. NEDA
Date: April 19, 2006
Summary: The Supreme Court declared Executive No. 420, which streamlined the ID systems of the government, as valid.
12. Case: GUDANI VS. SENGA
Date of decision: Aug. 15, 2006
Summary: The Supreme Court denied the petition, which sought the invalidation of a presidential directive that prohibited petitioners from
appearing in Congressional inquiries without the presidents consent.
13. Case: LAMBINO vs. COMELEC
Date of decision: Oct. 25, 2006
Summary: The Supreme Court dismissed the petition, which questioned COMELECs decision refuting the petitioners appeal for a
plebiscite that would authorize a peoples initiative as instrument for charter change.
14. Case: BAYAN VS. ERMITA
Date of decision: April 25, 2006
Summary: The Supreme Court declared Calibrated Preemptive Response as null and void as it goes against the principle of maximum
tolerance and enjoined the Executive, DILG and PNP from enforcing it. But the High Court ruled that Batas Pambansa No. 880 remains
constitutional.
15. Case: Ejercito vs. Sandiganbayan
Date of decision: November 30, 2006
Summary: The Supreme Court upheld Sandiganbayan resolutions which denied JV Ejercitos motion to quash subpoenas that order the
production of documents about bank accounts in the Export and Import Bank and PCI-Equitable Bank.
16. Case: SENATE OF THE PHILIPPINES VS. ERMITA
Date: April 20, 2006
Summary: The Supreme Court declared provisions of EO 464 which allowed executive department heads to invoke executive privilege as
valid.
17. Case: DAVID VS. ARROYO
Date of decision: May 3, 2006
Summary: The Supreme Court declared PP1017 constitutional and G.O. No. 5 as valid, but struck down the arrest of David et al as
unconstitutional.
18. Case: CHAVEZ VS. GONZALEZ

Date of decision: February 15, 2008

Summary: The Supreme Court nullified statements from Department of Justice and National Telecommunications Commission which
prohibited the airing of alleged wiretapped conversations between Pres. Arroyo and former COMELEC Commissioner Virgilio Garcillano
during the May 2004 elections.
19. Case: NERI VS. SENATE
Date of decision: March 25, 2008
Summary: The Supreme Court upheld the claim of Neri to executive privilege and nullified the Senate order which held him in contempt and
also called for his arrest for snubbing a Senate inquiry on the aborted NBN-ZTE deal.
20. Case: AKBAYAN VS. AQUINO
Date of decision: July 16, 2008
Summary: The Supreme Court ruled that that the communications covered in the Japan-Philippines Economic Partnership Agreement are
not for public disclosure as they are covered by executive privilege
21. Case: The Province of Cotobato Vs. The Gov't of the Republic of the Philippines
Date of decision: October 14, 2008
Summary: The Supreme Court granted the petition and declared the Memorandum of Agreement on Ancestral Domain unconstitutional.

SOURCES:
http://www.mylegispinoy.com/2009/06/aytona-vs-castillo-case-digest.html
http://vbdiaz.wordpress.com/2013/03/28/salvacion-vs-central-bank/
http://www.scribd.com/doc/144952469/Salvacion-vs-Central-Bank
http://engrjhez.wordpress.com/2013/03/06/information-technology-foundation-of-the-philippines-vs-commission-on-electionsg-r-no-159139-january-13-2004/
http://nonamalum.weebly.com/1/post/2010/07/itf-vs-comelec-gr-no-159139-january-13-2004.html
http://researchcasedigest.blogspot.com/2007/01/2006-political-law-case-digests.html

G.R. No. L-19313

January 19, 1962

DOMINADOR R. AYTONA, petitioner, vs. ANDRES V. CASTILLO, ET AL., respondents.

R E S O L U T I O N.
BENGZON, C.J.:
Without prejudice to the subsequent promulgation of more extended opinion, the Court adopted today, the following resolutions: .
On December 29, 1961, then President Carlos P. Garcia appointed Dominador R. Aytona as ad interim Governor of the Central Bank. On
the same day, the latter took the corresponding oath.
On December 30, 1961, at noon, President-elect Diosdado Macapagal assumed office; and on December 31, 1961, he issued
Administrative Order No. 2 recalling, withdrawing, and cancelling all ad interim appointment made by President Garcia after December
13, 1961, (date when he, Macapagal, had been proclaimed elected by the Congress). On January 1, 1962, President Macapagal appointed
Andres V. Castillo as ad interim Governor of the Central Bank, and the latter qualified immediately.
On January 2, 1962, both appointed exercised the powers of their office, although Castillo informed Aytona of his title thereto; and some
unpleasantness developed in the premises of the Central Bank. However, the next day and thereafter, Aytona was definitely prevented
from holding office in the Central Bank.
So, he instituted this proceeding which is practically, a quo warranto, challenging Castillo's right to exercise the powers of Governor of
the Central Bank. Aytona claims he was validly appointed, had qualified for the post, and therefore, the subsequent appointment and
qualification of Castillo was void, because the position was then occupied by him. Castillo replies that the appointment of Aytona had
been revoked by Administrative Order No. 2 of Macapagal; and so, the real issue is whether the new President had power to issue the
order of cancellation of the ad interim appointments made by the past President, even after the appointees had already
qualified.1wph1.t
The record shows that President Garcia sent to the Commission on Appointments which was not then in session a communication
dated December 29, 1961, submitting "for confirmation" ad interim appointments of assistant director of lands, councilors, mayors,
members of the provincial boards, fiscals, justices of the peace, officers of the army, etc.; and the name of Dominador R. Aytona as
Governor of the Central Bank occupies number 45, between a justice of the peace and a colonel of the Armed Forces.
Another communication of President Garcia bearing the same date, submitted a list of ad interim appointments of Foreign Affairs officers,
judges, fiscals, chiefs of police, justices of the peace, mayors, councilors, etc. number 63 of which was that of Dominador R. Aytona for
Governor of the Philippines in the Boards of International Monetary Fund, International Bank for Reconstruction and Development, etc.
A third communication likewise dated December 29, 1961, addressed to the Commission on Appointments submitted for confirmation 124
names of persons appointed as judges of first instance, members of provincial boards, and boards of government corporations, fiscals,
justice of the peace, even one associate justice of this Court occupying position No. 8 and two associate justices of the Court of Appeals (9
and 10) between an assistant of the Solicitor-General's Office, and the chairman of the board of tax appeals of Pasay City, who in turn are
followed by judges of first instance, and inserted between the latter is the name of another associate justice of the Court of Appeals.
There were other appointments thus submitted by President Garcia on that date, December 29, 1961. All in all, about three hundred fifty
(350) "midnight" or "last minute" appointments.
In revoking the appointments, President Macapagal is said to have acted for these and other reasons: (1) the outgoing President should
have refrained from filling vacancies to give the new President opportunity to consider names in the light of his new policies, which were
approved by the electorate in the last elections; (2) these scandalously hurried appointments in mass do not fall within the intent and spirit
of the constitutional provision authorizing the issuance of ad interim appointments; (3) the appointments were irregular, immoral and
unjust, because they were issued only upon the condition that the appointee would immediately qualify obviously to prevent a recall or
revocation by the incoming President, with the result that those deserving of promotion or appointment who preferred to be named by the
new President declined and were by-passed; and (4) the abnormal conditions surrounding the appointment and qualifications evinced a
desire on the part of the outgoing President merely subvert the policies of the incoming administration.
It is admitted that many of the persons mentioned in the communication to the Commission on Appointments dated December 29, 1961,
did not qualify. There is evidence that in the night of December 29, there was a scramble in Malacaan of candidates for positions trying
to get their written appointments or having such appointments changed to more convenient places, after some last minute bargaining.
There was unusual hurry in the issuance of the appointments which were not coursed through the Department Heads and in the
confusion, a woman appointed judge was designated "Mr." and a man was designated "Madam." One appointee who got his appointment
and was required to qualify, resorted to the rush of asking permission to swear before a relative official, and then never qualified.
We are informed, it is Malacaan's practice which we find to be logical to submit ad interim appointments only when the
Commission on Appointments is in session. One good reason for the practice is that only those who have accepted the appointment and
qualified are submitted for confirmation. Nevertheless, this time, Malacaan submitted its appointments on the same day they were issued;
and the Commission was not then in session; obviously because it foresaw the possibility that the incoming President would refuse to
submit later the appointees of his predecessor. As a result, as already adverted to, some persons whose names were submitted for
confirmation had not qualified nor accepted their appointments.

Because of the haste and irregularities, some judges of first instance qualified for districts wherein no vacancies existed, because the
incumbents had not qualified for other districts to which they had been supposedly transferred or promoted.
Referring specifically to judges who had not qualified, the course of conduct adopted by Former Chief Justice Moran is cited. Being
ambassador in Spain and desiring to return to this Court even as associate justice, Moran was tendered an ad interim appointment thereto
by President Quirino, after the latter had lost the election to President Magsaysay, and before leaving the Presidency. Said Ambassador
declined to qualify being of the opinion that the matter should be left to the incoming newly-elected President.
Of course, nobody will assert that President Garcia ceased to be such earlier than at noon of December 30, 1961. But it is common sense
to believe that after the proclamation of the election of President Macapagal, his was no more than a "care-taker" administration. He was
duty bound to prepare for the orderly transfer of authority the incoming President, and he should not do acts which he ought to know,
would embarrass or obstruct the policies of his successor. The time for debate had passed; the electorate had spoken. It was not for him to
use powers as incumbent President to continue the political warfare that had ended or to avail himself of presidential prerogatives to serve
partisan purposes. The filling up vacancies in important positions, if few, and so spaced to afford some assurance of deliberate action and
careful consideration of the need for the appointment and the appointee's qualifications may undoubtedly be permitted. But the issuance of
350 appointments in one night and planned induction of almost all of them a few hours before the inauguration of the new President may,
with some reason, be regarded by the latter as an abuse Presidential prerogatives, the steps taken being apparently a mere partisan effort to
fill all vacant positions1 irrespective of fitness and other conditions, and thereby deprive the new administration of an opportunity to make
the corresponding appointments.
Normally, when the President makes appointments the consent of the Commission on Appointments, he has benefit of their advice. When
he makes ad interim appointments, he exercises a special prerogative and is bound to be prudent to insure approval of his selection either
previous consultation with the members of the Commission or by thereafter explaining to them the reason such selection. Where,
however, as in this case, the Commission on Appointments that will consider the appointees is different from that existing at the time of
the appointment2and where the names are to be submitted by successor, who may not wholly approve of the selections, the President
should be doubly careful in extending such appointments. Now, it is hard to believe that in signing 350 appointments in one night,
President Garcia exercised such "double care" which was required and expected of him; and therefore, there seems to be force to the
contention that these appointments fall beyond the intent and spirit of the constitutional provision granting to the Executive authority to
issue ad interim appointments.
Under the circumstances above described, what with the separation of powers, this Court resolves that it must decline to disregard the
Presidential Administrative Order No. 2, cancelling such "midnight" or "last-minute" appointments.
Of course, the Court is aware of many precedents to the effect that once an appointment has been issued, it cannot be reconsidered,
specially where the appointee has qualified. But none of them refer to mass ad interimappointments (three-hundred and fifty), issued in
the last hours of an outgoing Chief Executive, in a setting similar to that outlined herein. On the other hand, the authorities admit of
exceptional circumstances justifying revocation3 and if any circumstances justify revocation, those described herein should fit the
exception.
Incidentally, it should be stated that the underlying reason for denying the power to revoke after the appointee has qualified is the latter's
equitable rights. Yet it is doubtful if such equity might be successfully set up in the present situation, considering the rush conditional
appointments, hurried maneuvers and other happenings detracting from that degree of good faith, morality and propriety which form the
basic foundation of claims to equitable relief. The appointees, it might be argued, wittingly or unwittingly cooperated with the stratagem
to beat the deadline, whatever the resultant consequences to the dignity and efficiency of the public service. Needless to say, there are
instances wherein not only strict legality, but also fairness, justice and righteousness should be taken into account.
WHEREFORE, the Court exercising its judgment and discretion in the matter, hereby dismiss the action, without costs.
Labrador, Reyes, J.B.L., Paredes and De Leon, J.J., concur.
Separate Opinions
PADILLA, J., concurring:
Once more this Court has to pass upon and determine a controversy that calls for an interpretation of the provisions of the Constitution.
The facts that gave rise to the petition need not be restated as they are set forth in opinion rendered for the Court. The question is whether
the appointment of a person to a public office by a President whose term of office was about to expire or cease is lawful or does not
contravene the Constitution; or, if lawful after the appointee has taken his oath, until when would such appointment be valid and effective.
The constitutional point involved seems to have been overlooked the framers of the Constitution. It would seem that the framers, wellmeaning persons that they were, never foresaw an eventuality such as the one confronting the Republic. The framers never thought and
anticipated that citizen elevated by the people to such an exalted office the President of the Republic, would perform an act which though
not expressly prohibited by the Constitution and the law, ought not to be done, since a sense of propriety would be enough to stop him
from performing it.
The petitioner invokes section 10, paragraph 4, article VII, of the Constitution which provides that
The President shall have the power to make appointments during the recess of the Congress, but such appointments shall be
effective only until disapproval by the Commission on Appointments or until the next adjournment of the Congress.

Under these constitutional provisions there seems to be no doubt that the President may make the appointment, and if approved by the
Commission on Appointments, it would unquestionably be lawful, valid and effective, but if disapproved or not acted upon by the
Commission on Appointments then the appointment becomes ineffectual and the appointee ceases and can no longer perform the duties of
the office to which he had been appointed.
It is urged that the petitioner's appointment having been made by the President during the recess of the Congress and he having taken his
oath, the appointment is lawful, valid and effective until disapproval by the Commission on Appointments or until the next adjournment of
the Congress should the Commission on Appointments fail to act on it.
Ad interim appointments that the President may make during the recess of the Congress are those made during a period of time from the
adjournment of the Congress to the opening session, regular or special, of the same Congress. In other words, if the President had
convened in a special session the fourth Congress whose term was to expire on the 30th of December 1961 and during such session the ad
interim appointments had been confirmed by the Commission on Appointments there would be little doubt that the appointments would be
lawful and valid.
The government established by the Constitution is one of checks and balances to preclude and prevent arrogation of powers by officers
elected or appointed under it.
Under the provisions of the Constitution "The term of office of Senators shall be six years and shall begin on the thirtieth day of
December next following their election."1 And "The term of office of the Members of the House of Representatives shall be four years
and shall begin on the thirtieth day of December next following their election."2 Under section 10, paragraph 4, article VII, of the
Constitution, above quoted, the President may make appointments during the recess of the Congress, "but such appointments shall be
effective only until disapproval by the Commission on Appointments or until the next adjournment of the Congress." .
The term "recess", in its broadest sense, means and refers to the intervening period between adjournment of a regular session of one
hundred days exclusive of Sundays, or of a Special session which cannot continue longer than thirty days, and the convening thereof in
regular session once every year on the fourth Monday of January or in special session to consider general legislation or only such subjects
as he (the President) may designate.3And such intervening period refers to the same Congress that had adjourned and was to be convened.
Such intervening period cannot refer to two different Congresses, one that has adjourned and one newly chosen or elected to meet in
regular session as provided for by the Constitution, or in special session by the call of the President.
The term of the President ... shall end at noon the thirtieth day of December following the expiration four years after (his)
election and the term of (his) successor shall begin from such time.4
If the ad interim appointments made by the President during the recess of the Congress are effective only until disapproval by the
Commission on Appointments or until the next adjournment of the Congress a limitation on the power of the President there is a
cogent and strong reason for holding to be the intent of the framers of the Constitution that such appointments made by him ceased to be
valid and effective after the term of the Congress existing at the time of the making of such appointments had ended or expired. The end
or expiration of the of the Congress existing at the time of the making of the ad interim appointments by the President is a stronger cause
or reason for the lapse or ineffectuality of such appointments than "the next adjournment of the Congress." Since that Congress no longer
exists and hence can no longer convene and then "adjourn." The effectivity and validity of the appointment of the petitioner as Governor
of the Central Bank ceased, lapsed and expired on thirtieth of December 1961. He is no longer entitled hold the office to which he had
been appointed. My vote, therefore, is for the denial of the petition.
Dizon, J., concurs.
I concur with the foregoing concurring opinion of Justice Padilla, the same being based on an additional ground justifying denial of the
petition under consideration.
BAUTISTA ANGELO, J., concurring: .
In addition to the reasons stated in the resolution adopted by this Court on January 19, 1962, I wish to express the following views: .
1. The "midnight appointments" made by President Garcia were extended by him under Section 10, Paragraph 4, Article VII of the
Constitution which provides: "The President shall have the power to make appointments during the recess of the Congress, but such
appointments shall be effective only until disapproval by the Commission on Appointments or until the next adjournment of the
Congress." It is clear that these appointments can only be made during the recess of Congress because they are ad interim appointments.
The term "recess" has a definite legal meaning. It means the interval between a session of Congress that has adjourned and another of the
same Congress. It does not refer to the interval between the session of one Congress and that of another. In that case the interval is not
referred to as a "recess" but an adjournment sine die. Thus, in the case of Tipton v. Parker, 71 Ark. 194, the court said: "The 'recess' here
referred to by Judge Cooley means the intermission between sittings of the same body at its regular or adjourned session, and not to the
interval between the final adjournment of one body and the convening of another at the next regular session. When applied to a legislative
body, it means a temporary dismissal, and not an adjournment sine die." Since the appointments in question were made after the Fourth
Congress has adjourned sine die and ceased to function on December 30, 1961, they cannot partake of the nature of ad
interim appointments within the meaning of the Constitution.
2. The Commission on Appointments under our constitutional set-up is not continuing body but one that co-exists with the Congress that
has created it. This is so because said Commission is a creation of the Senate and of the House of Representatives. While the Senate is a
continuing body, the House ceases at the end of its fourth year. It cannot therefore be continuing it being a creation of a body half of which

is alive and the other half has ceased to exist. This theory can also be gleaned from the proceedings of the constitutional convention.
Thus, the preliminary draft of the Philippine Constitution provides for a permanent Commission and for the holding of sessions of the
Commission even during the recess of Congress. After mature deliberation the proposal was defeated and a substitute was adopted which
is now embodied in Article VI, Section 12, of our Constitution. As a matter of fact, as finally adopted, the Commission on Appointments
has to be organized upon the convening of a new Congress after the election of the Speaker of the House of Representatives or of the
President of the Senate, as the case may be, as provided for in Section 13, Article VI of the Constitution (Article VII, Preliminary Draft of
the Constitution, Vol. 2, Aruego: The Framing of the Constitution, pp. 982, 987).
An ad interim appointment, to be complete, needs to be submitted to the Commission on Appointments one the same is constituted. This
is reflected in the Constitution when it provides that "such appointments shall be effective only until disapproval by the Commission on
Appointments or until the next adjournment of the Congress" (Section 10, Paragraph 4, Article VII). This mean that it must be submitted
to the Commission on Appointments of the Congress that has created it. It cannot be submitted to the Commission on Appointments of a
different Congress. Since the appointments in question were submitted to the Commission on Appointments which ceased to function on
December 30, 1961, they lapsed upon the cessation of said Commission. Consequently, they can be recalled by the new Chief Executive.
3. An ad interim appointment is not complete until the appointee takes the oath of office and actually takes possession of the position or
enters upon the discharge of its duties. The mere taking of the oath of office without actual assumption of office is not sufficient to
constitute the appointee the actual occupant thereof who may not be removed therefrom except for cause (McChesney v. Sampson, 23
S.W. 2d. 584). The case of Summers v. Ozaeta, 81 Phil., 754, cannot be cited as a precedent as to when an ad interim appointment
becomes permanent and binding. That case involves a cadastral judge who was given an ad interim appointment as judge at large. After
assuming the office and discharging his duties, his appointment was not confirmed. He claimed that he could still revert to his former
position as cadastral judge. True, this Court made a statement therein that an ad interim appointment becomes permanent after taking the
oath of office, but such statement is merely an obiter dictum because the case could have been decided on the doctrine that, having
accepted an incompatible office, petitioner was deemed to have abandoned the position of cadastral judge.
In relying on certain cases for the proposition that once an appointee has taken the oath of office his appointment becomes irrevocable
petitioner fails to consider that in said cases there had either been an actual discharge of duty and actual physical possession or assumption
of office following the oath-taking as to constitute the appointee the occupant of the position from which he cannot be removed without
cause. Even the case ofMarbury v. Madison, 1 Cranch, U.S. 137, 2 L. Ed., 61, 69, cannot be invoked as a precedent, for there the
appointees were merely nominated and their nominations confirmed by the Commission on Appointments even if they have later taken
their oath of office. Certainly, they can no longer be deprived of their appointments for then the executive would be acting in disregard of
the confirming body which is a coordinate and independent body not subject to his control.
Since the appointments in question were made not in the light of the views herein expressed, I am of the opinion that they did not ripen
into valid and permanent appointments and as such were properly recalled by the new Chief Executive.
CONCEPCION, J., concurring in part and dissenting in part: .
It is well settled that the granting of writs of prohibition and mandamus is ordinarily within the sound discretion of the courts, to be
exercised on equitable principles, and that said writs should be issued when the right to the relief is clear (55 C.J.S. 25, 29, 73 C.J.S. 18).
Insofar as the majority resolution relied upon discretion and the equities of the case in denying said writs, I concur, therefore, in the
aforementioned resolution.
However, I cannot see my way clear to subscribing the observations therein made representing the motives allegedly underlying
petitioner's appointment and that of many others who are not parties in this case, and justifying the revocation of such appointments. My
reasons, among others, are: .
1. Save where the incumbent has a temporary appointment or is removable at the will of the appointing power, an appointment once
complete, by the performance of all acts required by law of the appointing power, is irrevocable.
An appointment to office may be revoked at any time before the appointment becomes final and complete, but thereafter unless
the appointee is removable at the will of appointing power. For the purpose of this rule, an appointment to office is complete
when the last act required of the person or body vested with the appointing power has been performed. Where by constitutional,
statutory, or other legal provision it is required that certain steps be taken to make effective appointment, it has been held that the
appointment becomes complete beyond the possibility of recall when the last of the prescribed steps is taken, and that, where no
method of appointment is provided, an appointment does not become effective and beyond recall until the appointing officer by
some act or word evinces a final intent to vest the appointee with title to the office." (67 C.J.S., pp. 161-162) .
After the act of appointment is complete, the appointing authority may not revoke its former appointment and make another. And
appointment to office is complete when the last act required of the person or body vested with the appointing power has been
performed. (56 C., p. 954) .
In all jurisdictions where appointment to office is regarded as an executive function, as here, an appointment to office once made
is incapable of revocation or cancellation by the appointing executive in the absence of a statutory or constitutional power of
removal. Barrett v. Duff 114, Kan. 220; 217 P. 918; People v. Mizner, 7 Cal. 519, State v. Williams, 222 Mo. 268, 121 S.W. 64, 17
Ann. Cas. 1006; Draper v. State, 175 Ala. 547, 57 So. 772, Ann. Cas. 1914D, page 305, Annotation." (McChesney v. Sampson,
23 S.W. 2d., 584) .
May an appointment be revoked by reason of error or fraud? This question was taken up in Ex rel Coogan vs. Barbour (22 A 686) and Ex

rel Scofield vs. Starr (63 A 512). The first involved a City Charter providing that its common council shall, in joint convention, appoint a
prosecuting attorney. In such convention, Coogan obtained a majority of the votes cast and of the convention. Upon announcement of this
result, a member of the convention offered a resolution declaring Coogan elected, but the resolution was defeated. Then, two resolutions
were offered and approved: one declaring that the ballots taken were null and of no effect by reason of errors in the same and another
declaring Barbour elected prosecuting attorney. The issue was who had been appointed thereto. The court held that it was Coogan, he
having obtained a clear majority and there having been no error or fraud in the voting, although it did not deny the power of the
convention to correct errors and to nullify the effects of fraud in the voting by invalidating the same and calling another election, had the
proceedings been tainted with such error or fraud.
The second case referred to a similar provision in a city charter, to the effect that appointments by the common council shall be by ballot
and that the person receiving a plurality of ballots shall be elected. The first balloting taken for the election of the city surveyor of
Brigeport resulted in 25 ballots being cast. It was announced that there was one ballot more than members voting, and that there were 13
ballots for Scofield, 11 for Starr and one blank ballot. Scofield maintained that this result amounted to his appointment precluding the
council from taking a new ballot but such pretense was rejected. Inasmuch as the number of ballots cast exceeded the number of persons
voting, the council was justified in believing that the proceeding was not free from suspicion of fraud or mistake in the voting and,
accordingly in taking another vote.
In both cases, the fraud or mistake alluded to referred to the manner of voting or of counting the ballots cast, not to the intent of the voters
in choosing a particular appointee.
2. An ad interim appointment, made during a recess of Congress, is complete and irrevocable upon the performance of the last act required
by law from the appointing power, even without previous notice to the appointee, or acceptance by him, or without subsequent action of
the legislative organ that may terminate its effectivity.
In the case of appointment made by a single executive such as a governor, mayor, etc., it is undisputed that the appointment once
made is irrevocable.
xxx

xxx

xxx

Where an appointment subject to confirmation by the senate is made by a governor during a recess of the senate, ... the question
arises as to whether such an appointment may be reconsidered and withdrawn by the governor before it is acted upon by the
Senate.
xxx

xxx

xxx

In Barrett v. Duff (1923) 114 Kan. 220, 217 Pac. 918, where appointments made by the governor during a recess of the
legislature, which appointments could not be confirmed by the senate as required by law until the next session of that body, were
revoked by the governor's successor, and other persons were appointed to the offices, such action by him being taken after the
senate had convened and had taken under advisement the confirmation of the persons first appointed to the offices, but before the
senate had taken any definite action with regard to such confirmation, and the senate, confirmed the first appointee, but, despite
this act of the senate, commissions were issued by the governor to the second appointee, it was held, in reliance upon the terms of
the statutes which provided that the governor should 'appoint' persons to such offices with the advice and consent of the senate, as
distinguished from the provision of the Constitution of the United States governing appointments by the President, which
provides that the President shall 'nominate' and, by and with the advice and consent of the senate, shall 'appoint' persons to office,
that the act of the governor in making the first appointments was final and exhausted the power of the governor's office in that
regard unless and until the appointments were rejected by the senate, and that, therefore, the persons appointed by the first
governor were entitled to the office. In the words of the court, 'The power of the governor having been exercised, he had no
further power of the governor having been exercised, he had no further control over the respective offices unless and until the
appointees had been rejected by the senate.' In reaching this result, the court emphasized the difference between a nomination and
an appointment, holding that, where the statute relating to appointments by the governor with the consent of the senate provides
that the governor shall appoint persons to the office with the consent of the senate, rather than merely nominate persons for
consideration by the senate, the appointment is final and conclusive without confirmation. ... .
Likewise in McChesney v. Sampson (1930) 232 Ky 395, 23 S.W. (2d.) 584, the act of governor in making a recess appointment
was held to be not merely a nomination subject to revocation by the governor at any time prior to action thereon by the senate,
but a final and irrevocable appointment subject only to rejection by the senate. In support of this result, it was said: 'It is urged
that appointment to the office consists of two separate acts, one by the governor and one by the senate, and until both have acted
there is no appointment such as to bring the incumbent within the protection of the law. Even so, the two powers do not act
concurrently, but consecutively, and action once taken and completed by the executive is not subject to reconsideration or
recall. ... The fact that the title to the office, and the tenure of the officer, are subject to the action of the senate, does not render
incomplete the act of the chief executive in making the appointment. The appointment alone confers upon the appointee for the
time being the right to take and hold the office, and constitutes the last act respecting the matter to be performed by the executive
power.' .
xxx

xxx

xxx

In People ex rel. Byder v. Mizner (1857) 7 Cal. 519, in holding that an appointment made by a governor to fill an office which
had expired during a recess of the legislature was not merely an appointment to fill a vacancy which would expire at the end of
the next session of the legislature, but was an appointment for a full term, and that the act of the governor during a subsequent

session of the legislature, in appointing another to the office and asking his confirmation by the legislature, was unauthorized and
void, it was said that, the power of the executive having been once exercised, he had no further control over the office until the
appointee has been rejected by the senate." (89 ALR, pp. 138, 139, 140.) .
3. The irrevocability of the ad interim appointment adverted to above becomes more apparent when we consider that the House,
Commission on Appointments or other agency of Congress charged with the function of terminating the effectivity of such appointment,
may act thereon, by approving or disapproving the same, even though the Executive had not submitted or forwarded it to said House,
Commission or agency of Congress, and even though either the outgoing or the incoming Executive shall have submitted for confirmation
the name of a subsequent appointee in lieu of the first one..
This was the situation met in People ex rel, Emerson vs. Shawver (30 Wyo 366, 222 Pac. 11). The facts therein were: On July 1, 1919,
Governor Carey of Wyoming appointed Emerson as state engineer, to fill the vacancy caused by the resignation of its incumbent. Upon
the expiration of the latter's term, Governor Carey reappointed Emerson for a full term of six (6) years, from and after April 1, 1921. This
last appointment was confirmed by the state legislature at its next session in 1923. Prior thereto, however, Governor Carey's term had
expired and his successor had appointed Shawver as state engineer. Thereupon Shawver ousted Emerson from such office. It was held that
Emerson had a better right thereto; that his appointment in 1921 was a completed appointment,requiring no action by the Senate to entitle
him to hold said office; that a recess appointment once made by "the executive is not subject to reconsideration or recall, "even though not
as yet confirmed by the Senate, inasmuch as," the appointment alone confers upon the appointee for the time being the right to take and
hold the office, and constitutes the last act respecting the matter to be performed by the executive power"; and that, although the term of
Governor Carey had expired and neither he nor his successor had forwarded Emerson's appointment to the Senate for confirmation or
requested the Senate to act upon said appointment, the same had been validly confirmed by said body, for .
The provision as to the office here in question found in the Constitution does not say that the appointment made by the Governor
shall be confirmed by the Senate when requested by the former, or upon a communication by him submitting the matter to the
Senate. And we perceive no substantial reason for adding by construction any such restriction upon the Senate's right to act.
(People v. Shawver, 222 P. 11; see, also, Commonwealth v. Waller, 145 Pa. 235, 23 Atl. 382; State v. Williams, 20 S.C. 13;
Richardson v. Henderson, 4 Wyo. 535, 35 Pac. 517, and other cases cited in the Shawver case.) .
4. The foregoing goes to show, also, that the question whether the Commission on Appointments is or is not a continuing body can not
affect the determination of the case. Besides, the constitutional provision making an ad interim appointment, if not disapproved by the
Commission on Appointments, effective only until the next adjournment of Congress, clearly indicates that such Commission must have
an opportunity to approve or disapprove the appointment and that its inaction, despite such opportunity, at the session of Congress next
following the making of the appointment during which it could have met, and, probably, did meet must be understood as an
expression of unwillingness to stamp its approval upon the act of the executive. No such opportunity exists when the outgoing Congress
has not held any session, regular or special after the making of the appointment and before the expiration of the term of said Congress, and
the new Congress has not, as yet, organized itself or even met.
5. The American rule concerning irrevocability of appointments is bolstered up in the Philippines by Section 4 of Article XII of the
Constitution, which provides that "no officer of employee in the Civil Service shall be removed except for cause as provided by law."
(Article VII, Section 4.) .
In fact, in his concurring opinion in Eraa vs. Vergel de Dios (85 Phil., 17), our distinguished Chief Justice pointed out that the revocation
of an appointment, if feasible, "should be communicated to the appointee beforethe moment he qualified," and that "any revocation
thereafter, is tantamount to removal and must be judged according to the rules applicable to the removal" (emphasis ours). In the present
case, the revocation of petitioner's appointment was not communicated to him before he qualified by taking his oath of office. It is not
even claimed that any of the statutory causes for removal of petitioner herein exists, or that the procedure prescribed for such removal has
been complied with.
6. Once an appointee has qualified, he acquires a legal, not merely equitable right, which is protected not only by statute, but, also by the
Constitution, for it cannot be taken away from him, either by revocation of the appointment or by removal, except for cause, and with
previous notice and hearing, consistently with said Section 4 of Article XII of our fundamental law, and with the constitutional
requirement of due process (Segovia vs. Noel, 47 Phil., 547; Sec. 67 C.J.S. 117, 42 Am. Jur. 887). (See also, People ex rel Ryan v. Green,
58 N. v. 295; People vs. Gardner, 59 Barb 198; II Lewis Sutherland Statutory Construction, pp. 1161 and 1162; Mechem on Public
Officers, Sec. 389; 22 R. C. L. 377- 378; 25 Am. Dec. 690-691, 703).
7. The case of Tipton vs. Parker (74 S. W., 298) has been cited in support of the theory that Congress of the Philippines was not in "recess"
on December 29, 1961, and that, accordingly, ad interim appointments could not validly be made in such date. The question involved in
said case was whether a committee of the Senate of Arkansas could be authorized by the same to function after the adjournment sine die of
the regular session of the state General Assembly. The State Supreme Court considered as decisive authority the view expressed by Judge
Cooley, to the effect that a legislative committee "has no authority to sit during a recess of a House which appointed him, without its
permission to that effect". The issue thus hinged on the meaning of the term "recess" as used by Judge Cooley. Resolving this question,
said court held that the recess referred to by Judge Cooleywas "only the intermission between the sittings of the same body at its regular or
adjourned session and not to the interval between the final adjournment of one body and the convening of another at the next regular
session"..
In this connection, it should be noted that, as an agency of the Senate, the committee involved in said case could not operate for its
principal beyond the latter's term. Moreover, under the Constitution of Arkansas, the regular biennial session of the General Assembly
could not exceed 60 days, unless by a vote of 2/3 of the members of each of the two Houses of the legislature. Inasmuch as the Senate

could not, without the concurrence of the House, directly extend the period of its regular session, neither could it, without such
concurrence, indirectly extend said period, by granting its aforementioned committee the authority to function beyond said period. As
stated by the Court "the committee, being the mere agency of the body which appointed it, dies when the body itself dies, unless it is
continued by law", which the Senate may not enact, without the concurrence of the House..
The decision in said case did not seek to define the meaning of the term "recess" as used in any constitution or statute. It did not even refer
to the authority to make appointments during "recess". It has absolutely no bearing, therefore, on the issue before us.
Upon the other hand, Dr. Jose M. Aruego, a prominent member of the constitutional convention, says, in his work on "The Framing of the
Philippine Constitution" (Vol I, pp. 434-435), that the draft of the provision on ad interimappointments by the President, as submitted by
the corresponding committee, followed the principles of the Jones Law and that the recommendation of the committee was readily
approved on the floor of the convention, although the committee on style gave said provision its present phraseology. Pursuant to the
Jones Law, "appointments made while the Senate is not in session shall be effective either until disapproval or until the next adjournment
of the Senate". Hence, the term "recess" appearing in Section 10(4) of Article VII of our Constitution should be construed to mean "while
Congress is not in session" and this is confirmed by the practice consistently observed in the Philippines for time immemorial, as well as
the ad interim appointment extended by President Macapagal to respondent Castillo.
8. The case of McChesney vs. Sampson (23 S. W. 2d. 584) has, also, been invoked in support of the proposition that "an ad
interim appointment is not complete until the appointee takes the oath of office and actually takes possession of the position or enters
upon the discharge of its duties" and that, before such actual taking of possession, though after the oath taking, the appointee may be
removed without cause.
We have not found in said case anything justifying such claim. The issue in said case was whether a state governor could recall an
unconfirmed appointment of McChesney to the state textbook commission when there had been no session of the Senate subsequent to the
appointment, and such issue was decided in the negative.
Although, in addition to accepting the appointment, McChesney had qualified and exercised the function of the office, the decision of the
Court clearly indicates that it was not necessary for him either to discharge the duties of the office or even to take the oath of office, in
order to render his appointment irrevocable. The Court explicitly declared that the appointment, once "completed by the executive is not
subject to reconsideration or recall;" that the appointment "is complete when the appointing authority has performed the acts incumbent
upon him to accomplish the purpose;" and that in the case of recess appointments, like that of McChesney," the appointment alone confers
upon the appointee for the time being the right to take and hold the office and constitutes the last act respecting the matter to be
performed by the executive power" completing the appointment and rendering the same irrevocable.
In short, the McChesney case is authority for the petitioner herein.
9. Most, if not all appointments made by the President have two (2) aspects, namely, the legal and the political. The first refers to his
authority to make the appointment. The second deals with the wisdom in the exercise of such authority, as well as with its propriety.
Whether given vacancy or number of vacancies should be filled, or who among several qualified persons shall be chosen, or whether a
given appointment or number of appointment will favor the political party to whom the power of appointment belongs and will injure the
interest of a rival political party and to what extent, are, to my mind, essentially and typically political matters. Hence, I believe that the
question whether certain appointments should be sanctioned or turned down by reason of the improper, immoral or malevolent motives
with which said matters were allegedly handled is, likewise, clearly political, and as such, its determination belongs, not to the courts of
justice (Vera vs. Avelino, 77 Phil., 192, 205; 16 C.J.S 689-690; Willoughby on the Constitution, Vol. III 1326-1327), but to the political
organ established precisely to check possible abuses in the exercise of the appointing power the Commission on Appointments.
Indeed, I can hardly conceive of any question more patently and characteristically political than this one, or more appropriate for
determination of said body. Neither the possible or probable control thereof by members of the Nacionalista Party nor the number of
offices or appointments involved can affect the nature of the issue. Surely, its political character is the same whichever political party may
have the largest number of votes in the Commission on Appointments. The big number of said appointments merely tend to make more
manifest the political complexion thereof and its non-justifiable nature.
10. In Osmea vs. Pendatum (L-17144, October 28, 1960), we refused to disturb the action of the House of Representatives in suspending
a member thereof who had made derogatory imputations against the President of the Philippines upon the ground that such
imputations constituted a breach of the courtesy due to a coordinate branch of the Government. Yet, in the present case, imputations
similarly derogatory to the same branch of the Government are, in effect, made in the majority resolution.
I cannot see how such imputations can be reconciled with the position taken by this Court in the Osmea case and in other cases
(Barcelona vs. Baker, 5 Phil., 87; Severino vs. Governor-General, 16 Phil., 366; Abueva vs. Wood, 45 Phil., 612; Alejandrino vs. Quezon,
46 Phil., 85; Mabanag vs. Lopez Vito, 78 Phil., 1; Cabili vs. Francisco, L-4638, May 8, 1951) in which it "fastidiously observed" the
theory of separation of powers (Osmea vs. Pendatum, supra). Thus, in Santos vs. Yatco (55 Off. Gaz. 8641), in which a department head
was sought to be enjoined from electioneering, in view of the explicit provision of the Civil Service Act of 1959 (Republic Act No. 2260,
section 29), prohibiting all officers and employees in the civil service, "whether in the competitive or classified, or non-competitive or
unclassified service," from engaging directly or indirectly in partisan political activities or taking part in any election except to vote, we
held that the issue therein raised was one of "impropriety as distinguished from illegality," and that, as such, it "is not justiciable by this
Court." In Mabanag vs. Lopez Vito (78 Phil., 1), we refused to decide, upon the same ground, whether specified numbers of votes
constituted three-fourths of all members of each House of Congress. In Vera vs. Avelino (77 Phil., 192), we not only declared that "the
judiciary is not the repository of remedies for all political or social evils," but, also, quoted with approval the statement, made

in Alejandrino vs. Quezon (46 Phil., 81), to the effect that "the judicial department has no power to revise even the most arbitrary and
unfair action of the legislative department, or of either House thereof, taken in pursuance of the power committed exclusively to that
department by the Constitution." (Emphasis ours.) .
11. In the present case, we have completely reversed our stand on the principle of separation of powers. We have inquired into the motives
of the Executive department in making the appointments in question, although it is well settled, under the aforementioned principle, that: .
Generally courts cannot inquire into the motive, policy, wisdom, or expediency of legislation.
The justice, wisdom, policy, necessity, or expediency, of a law which is within its powers are for the legislature, and are not open to
inquiry by the courts, except as an aid to proper interpretation." (16 C.J.S. 471-478) .
If this is true as regards the legislative branch of the government, I can see no valid reason, and none has been pointed out, why the same
norm should not govern our relations, with the executive department. However, we have not merely disregarded such norm. We are, also,
in effect, restraining the Commission on Appointments an organ of a coordinate, co-equal branch of the Government from acting on
the questioned appointments. What is more, we are virtually assuming in advance that said body which has not been organized as yet
and whose membership is still undetermined will not act in harmony with the spirit of our Constitution.
12. It is trite to say that certain moral and political aspects of the issue before us cannot but produce a strong aversion towards the case of
petitioner herein and the hundreds of others appointed under the same conditions as he was. Although members of the bench must always
endeavor to minimize the influence of emotional factors tending to affect the objectivity essential to a fair and impartial appraisal of the
issues submitted for their determination, it is only natural and, I venture to add, fortunate (for, otherwise, how could they hope to do
justice to their fellowmen?) that they should basically react as other members of the human family. This is probably the reason why
Justice Douglas of the Federal Supreme Court of the U.S., said, in Abel v. U.S. (4 Lawyers Edition, 2d, 668, 688) :
"Cases of notorious criminals like cases of small, miserable ones are apt to make bad law. When guilt permeates a record,
even judges sometimes relax and let the police take shortcuts not sanctioned by constitutional procedures. .... The harm in the
given case may seem excusable. But the practices generated by the precedent have far-reaching consequences that are harmful
and injurious beyond measurement.".
Let us hope that no such consequences will flow from the precedent established in this case.
BARRERA, J., dissenting:
The instant case started with a simple petition for prohibition and mandamus with preliminary injunction instituted by petitioner Aytona
who claims to have been duly appointed ad interim Governor of the Central Bank, against respondent Castillo who, allegedly
accompanied by his correspondent Colonel Gutierrez and a host of heavily armed Philippine Constabulary Rangers, interfered with and
prevented the petitioner in the discharge of his duties and prerogatives as such Governor of the Central Bank. During the hearing,
however, and immediately thereafter, a great amount of extraneous matter affecting persons not parties to the proceedings has been
introduced into the case and a veritable avalanche of memoranda after memoranda and manifestations after manifestations swelled the
records and helped involve the issues. One among the dozens who asked to be admitted as amici curiae, even presented an answer in
behalf of the people to support the side of the respondents. Unfortunately, in the confusion, the case of the immediate parties became
obscured by considerations of circumstances and matters for and with which petitioner and respondents are not directly connected..
In my opinion, the fundamental questions which this Court is called upon to resolve in the present case a specifically: .
(1) Is the ad interim, appointment of petitioner Aytona valid when extended? .
(2) If so, did it automatically lapse with the ending the term of office of the twelve Congressmen composing one-half of the
membership of the Commission Appointments? .
(3) May this appointment be legally recalled or withdrawal after Aytona has qualified? .
Before entering into the discussion of the "propriety, morality and wisdom" of the appointment, it is necessary, I believe, that the
foregoing legal propositions must first be cleared out.
I. The Validity of Aytona's Appointment: .
Aytona's ad interim appointment is assailed on the theory that it was not made during a "recess" of Congress as provided in paragraph 4,
section 10 of Article VII of the Constitution. It is claimed for the respondents dents that the word "recess" means "the intermission
between sittings of the same body at its regular or adjourned session, and not to the interval between the final adjournment of one body
and the convening of another at the next regular session. When applied to a legislative body, it means a temporary dismissal, and not
adjournment sine die." In support of this view, counsel cites the case of Tipton v. Parker, 71 Ark. 193, from which the foregoing quotation
was taken.
An examination of this case, however, discloses that it did not refer to the power of the President to make ad interim appointments. The
pronouncement was made in connection with the interpretation of Section 17, Article 5 of the Constitution of the State of Arkansas. The
case involved the validity of the certificate of the auditor with reference to the legality of the expenses of a committee of the State Senate
authorized by the latter to make certain investigations beyond the duration of the session of the General Assembly. The court, in declaring
the certificate without sanction of law, stated: .
"The Senate has no power by resolution of its own to extend its session, and neither did it have power to such separate resolution

to continue its committee, a mere agency of the body, beyond the term of the body itself which created it." .
in view of the provisions of the aforementioned Section 17, Article 5 of the state Constitution prescribing "that the regular biennial session
of the Legislature shall not exceed 60 days, unless by 2/3 vote of the members elected to each house, and section 23 requiring a vote of the
majority of each house to enact a law or pass a resolution having the force and effect of a law". Apparently an opinion of Judge Cooley
seemingly to the contrary was cited to refute this view of the court, and so the decision went on to say:
Each house, says Judge Cooley, must also be allowed to proceed in its own way in the collection of such information may seem
important to a proper discharge of its functions; and whenever it is deemed desirable that witnesses should be examined, the
power and the authority to do so is very properly referred to a committee, with any such powers short of final legislative or
judicial action as may seem necessary or expedient in the particular case. Such a committee has no authority to sit during a
recess of the housewhich has appointed it, without its permission to that effect. But the house is at liberty to confer such authority
if it sees fit.
It is in this connection and evidently in a desire to explain the opinion of Judge Cooley that the court made the pronouncement relied upon
by respondents, thus: .
.... The recess here referred to by Judge Cooley we think should be construed to mean only the intermission between sittings of
the same body at its regular or adjourned session, and not to the interval between the final adjournment of one body and the
convening of another at the next regular session. When applied to a legislative body, it means a temporary dismissal and not an
adjournment sine die.
The conclusion reached by the court can not be otherwise. The case refers to the powers of one house of the state Legislature, with the
concurrence of the other, to confer authority upon its own committee to act beyond the duration of the session of the General Assembly.
Certainly, Judge Cooley's view that each house has power to confer authority to its committee to act during a recess must be understood to
exist only during the life of the house creating the committee. It can not go beyond its own existence, that is, beyond its adjournment sine
die.
But this ruling is no argument that the Executive's power to make appointments during such adjournment sine diedoes not exist just
because a house of the legislature lacks power to authorize its committee to act during the same adjournment. One refers to the power of a
defunct body to act beyond its life; the other refers to the power of another authority, the executive, to perform its functions after the
expiration of that other body. Non-existence of the first does not mean non-existence of the other.
It is to be noted that the different counsel advocating the cause of the respondents are not even agreed in the application of their
interpretation of the word "recess". Some of them argue that the interregnum which they contend is not recess, compromises the entire
period between the adjournment of the 4th Congress in May, 1961 and the opening of the 1st session of the first session of the 5th
Congress on January 22, 1962, so that all ad interim appointments extended during this period are null and void. Others claim that such
interregnum is that period between December 13, 1961, date of adjournment of the last session of the 4th Congress, and January 22, 1962.
It seems that President Macapagal is of this same view because his administrative Order No. 2 specifically refers to all appointments made
after December 13, 1961. Still others, at least one, advanced the theory during the oral argument that the banned period is that between the
adjournment of the 4th Congress in May, and December 30, 1961, excluding therefrom the period between this last date and January 22,
1962. Obviously, this theory was advanced in an effort to lend validity to the appointments recently made by President Macapagal, for if
the entire period between May or December, 1961 to January 22, 1962 is held not a recess, but an adjournment sine die, then all
appointments heretofore made by the present Chief Executive would suffer the same defect as those extended by former President Garcia.
This last argument is unavailing because it, likewise, is untenable, tested upon the same authority cited by counsel, i.e., that the term
"recess" means "the intermissionbetween sittings of the same body." Since the 5th Congress has not as yet even convened, the period
between December 30 and January 22 can not be a recess of the 5th Congress because it, definitely, is not an intermission
between sittings of the same body.
In the circumstances, it seems it is an over-statement to say that the term "recess has a definite legal meaning in the sense attributed to it in
the Tipton vs. Parker case. The confusion in the minds of the several counsels for the respondents as to the application of the alleged
meaning of the term, indicates a belabored effort on their part to impute a meaning to satisfy their case. Upon the other hand, we find in
"Hinds Precedents of the House of Representatives" (Vol. 5, pp. 852-853), a legislative interpretation by the United States Senate made
during the discussion of the term "recess of the Senate" in connection with the President's1 power to make appointments, as follows: .
The word 'recess' is one of ordinary, not technical, signification, and it is evidently used in the constitutional provision in its
common and popular sense. It means in Article II, above referred to, precisely what it means in Article III, in which it is again
used. Conferring power upon the executive of a State to make temporary appointment of a Senator, it says: .
And if vacancies happen, by resignation or otherwise, during the recess of the legislature of any State, the executive thereof may
make temporary appointments until the next meeting of the legislature, which shall then fill such vacancies.' .
It means just what was meant by it in the Article of Confederation, in which it is found in the following provision": .
The United States in Congress assembled shall have authority to appoint a committee to sit in the recess of Congress, it be
denominated a committee of the States, and to consist of one delegate from each State.' .
It was evidently intended by the framers of the Constitution that it should mean something real, not something imaginary;
something actual, not something fictitious. They used the word as the mass of mankind then understood it and now understand it.
It means, in our judgment, in this connection the period of time when the Senate is not sitting in regular or extraordinary session

as a branch of the Congress, or in extraordinary session for the discharge of executive functions; when its members owe no duty
of attendance; when its Chamber is empty; when, because of its absence, it cannot receive communications from the President or
participate as body in making appointments." .
The Attorney General of the United States was also of this view when he stated: .
The recess of the Senate during which the President shall have power to fill a vacancy that may happen, means the period after
the final adjournment of Congress for the session and before the next session begins; while an adjournment during a session of
Congress means a merely temporary suspension of business from day to day, or for such brief periods of time as are agreed upon
by the joint action of the two houses. The President is not authorized to appoint an officer during the current holiday adjournment
of the Senate, which will have the effect of an appointment made in the recess occurring between two sessions of the Senate."
(President - Appointment Officers - Holiday Recess, 1901, 23 Op. Atty. Gen. 599, (U.S.C.A. Const. Art. 2, Sec. 2[2]..
It is worthwhile to note that our Constitution in paragraph 4, Section 10 of Article VII speaks of "recess" without making any distribution
between the sessions one congress and the sessions of another. And it is trite to say that when the law makes no distinction, no distinction
should be made, especially if to do so would result in a strained interpretation thereof and defeat the evident purpose of the framers of the
Constitution - in this instance, to render it certain that at times there should be, whether the Congress is in session or not, an officer for
every office, entitled to discharge the duties thereof. (5 Hinds, op. cit., p. 853.) .
II. Lapsing of Aytona's Appointment: .
It is contended for the respondents that since 12 members of the Commission on Appointments ceased to be such upon the expiration of
their term of office at midnight of December 29, 1961, the Commission on Appointments likewise ceased to exist on the theory that
creation can not exist beyond the life of its creator at least with respect to one-half of its members. This seems to stem from the wrong
notion that the Commission on Appointments is a creature of the Congress. This confuses the Commission on Appointments as a
constitutional body with its members. The body continued to exist, but only its membership changes periodically. When the Constitution
provides in Section 13 of Article 6 thereof that "the Electoral Tribunals and the Commission on Appointments shall be constituted within
30 days after the Senate and the House of Representatives shall have been organized with the election of their President and Speaker,
respectively", it did not mean that the Senate and the House of Representatives thereby create said bodies, no more than the President can
be said to create the Supreme Court by appointing the Justices therein. It simply ordained that the Commission be constituted or organized
by electing the members thereof, whose positions have already been created in virtue of Section 12 of the same Constitution. To hold the
Electoral Tribunals and the Commission on Appointments are non-existing during the period from December 30, 1961 to January 22, 1962
(and during the corresponding period every four years thereafter) will result in an absurdity and a situation destructive of the normal
processes provided in the Constitution. One of such absurd results would be that no electoral protest against any elected and proclaimed
congressman or senator can be legally filed with the Electoral Tribunals within the period prescribe by their rules, that is, within fifteen
days following the proclamation of the results of the election, which period falls within the time when the Electoral Tribunals (as is the
case of Commission on Appointments) are allegedly non-existent.
The proceedings in the Constitutional Convention are cited to support the theory that the Commission on Appointments is not a permanent
commission. A review of the records, however, of that convention reveals that what was intended in the proposed draft was to authorize
the Commission on Appointments to hold sessions even when the Congress is not in session. The mere fact that such a proposal was
defeated and, consequently, the word "permanent" was not adopted in the final text, does not import that the Constitution meant to give an
off and on existence to the Commission on Appointments lapsing every four years when the twelve of its members cease to be such. On
the contrary, it seems more logical to hold that the legal existence of the Commission as well as the Electoral Tribunals continue
irrespective of the vacancies that may exist in the membership thereof. It is for this reason that the personnel of these bodies do not cease
periodically, but continue to perform their duties in their respective offices for which they are legally paid their salaries by the
government. It seems clear, therefore, that the Commission on Appointments did not lapse on December 29, 1961. Neither did the
appointment of Aytona lapse on that date because the same could not be acted upon by the Commission on Appointments during the recess
of the Congress.
III. May the appointment of Aytona be legally recalled or withdrawn after he has qualified for the position to which he was appointed? .
Precedents are to the effect that when once an appointment has been extended by the Chief Executive who, as is provided in our
Constitution, has the sole power of appointment subject only to the consent of the Commission on Appointments, and the appointee has
accepted the appointment, the same becomes complete and the appointing power can not withdraw it except in cases where the tenure of
the appointee is at the Chief Executive's pleasure or upon grounds justifying removal and after due process. This is not because the
appointment constitutes a contract (for truly a public office can not be subject of any contract), but because of the provisions of the
Constitution itself to the effect that "no officer or employee in the Civil Service shall be removed or suspended except for cause as
provided by law." If, therefore, the recall or the withdrawal of the appointment of Aytona was not authorized by law, then his assumption
of the functions of his office on January 2, 1962 was clearly within his legal right and the interference of Castillo, aggravated by the
assistance or at least the presence of members of the Armed Forces, was clearly unlawful.
The foregoing disposes, in my opinion, the legal issue and the rights of the parties in the present case. But against these, to me, clear
mandates of the Constitution and the legal and judicial precedents, respondents have appealed to this Court for it to exercise "judicial
statesmanship" invoking the spirit of the Constitution. It is claimed that there was a manifest abuse of power by the outgoing President in
extending, on the eve of the expiration of his term, some three hundred and fifty ad interim appointments to fill an equal number of
vacancies in the different branches of the government; that no proper consideration was given of the merits of the appointees, it appearing
that in the case of at least some of the appointees to the judiciary, their assurance of an immediate assumption of office or the taking of

oath was made a condition precedent to the appointments, and that there was a wild scramble in Malacaan among the appointees on the
night of December 29. We are scandalized by this and expect the Court to apply the remedy. What of the proceedings in Congress during
the last day of session when bills after bills are passed in a manner not too dissimilar to the described scene in Malacaan? Can the
Supreme Court be expected to correct this too by declaring all such laws as invalid just as we are asked to invalidate these appointments? .
Be this as it may, whatever may be our personal views on this matter, I agree with Mr. Justice Concepcion that not all wrongs or even
abuse of power can be corrected by the exercise of the high prerogatives of the Supreme Court vested in it by the Constitution. As I take it,
the higher and more delicate is the prerogative, the greater should be the degree of self-restraint in the exercise thereof, lest the fine and
tested scale of checks and balances set up by the Constitution be jarred. In the same manner that we expect circumspection and care, even
double care, on the part of the other two co-equal coordinate departments of the government, so must we be most cautious and slow in
judging the morality, propriety and good faith involved in the actuations of the other departments in matters coming within their
competence. The remedy, I believe, under the circumstances is with the Commission on Appointments to which the appointments have
been submitted. The more fact that it is expected that the Commission on Appointments would be controlled by the party of the outgoing
President is immaterial, because legal processes can not be made to depend upon the fortunes of political parties, for there is still the
ultimate remedy by the people in all authority. At any rate, as has already been aptly said: the judiciary is not the repository of remedies
for all political or social evils, and that the judicial department has no power to revise even arbitrary or unfair action of the other
departments taken in pursuance of the power committed exclusively to those departments by the Constitution..
May I add: all the scandalous circumstances brought to the attention of this Court did not link the petitioner herein, save for the fact that
this appointment was extended on the same day as those issued under the unusual and irregular circumstances attending the other
appointments. If at all, there is evidence in favor of Aytona to the effect that insofar as he is concerned, his appointment to the position of
Governor of the Central Bank has been under consideration for a long time and that he is qualified for the position. It can not, therefore be
said that with respect to him there was no mature deliberation and due consideration of his qualifications and of the need of the service. he
charge was made that the position of Governor of the Central Bank has been vacant for several months and that the President should have
filled it earlier. Yet, when the President actually filled it as he did, he is criticized claiming that there was no immediate need for such
action in view of the fact that there was an Acting Governor. That it was really necessary to fill the position is evidenced by the act of
President Macapagal himself in making his own appointment hardly twenty-four hours after he recalled the appointment of Aytona.
Summarizing, I would say that all the circumstances cited by the respondents that have surrounded the issuance of the appointments in
question, have to do with the mode or manner of the exercise of the authority to make the appointment, quite apart from the existence of
the authority itself. The observance of good faith, morality and propriety by the other two co-equal coordinate departments in the
performance of their functions must be secured by their sense of duty and official oath hand not by any supervisory power of the courts..
The role of courts in our scheme of government is to interpret the law and render justice under it. This simply means that whatever may be
our own personal feelings as to the propriety, morality, or wisdom of any official act or actuation of a public officer or any agency of the
government within their respective competence brought to the attention of the Court for adjudication, they should not be permitted to
prevail over clear legal considerations, for ours is a regime under the Rule of Law..
In view of the foregoing, I am constrained to register my dissent.
Footnotes
BENGZON, C.J.:
1These positions had been vacant for months.
2The 4th Congress expired at midnight December 29, 1961..
389 A.L.R., 135 Anno.
PADILLA, J., concurring:
1Section 3, Article VI.
2Section 6, Article VI.
3Section 9, Article VI.
4Section 4, Article VII.
BARRERA, J., dissenting:
1The power of the U.S. President to make appointments is by and with the advice and consent of the Senate..

INFORMATION TECHNOLOGY FOUNDATION OF THE PHILIPPINES, MA. CORAZON M. AKOL, MIGUEL UY, EDUARDO H.
LOPEZ, AUGUSTO C. LAGMAN, REX C. DRILON, MIGUEL HILADO, LEY SALCEDO, and MANUEL ALCUAZ
JR., petitioners, vs. COMMISSION ON ELECTIONS; COMELEC CHAIRMAN BENJAMIN ABALOS SR.; COMELEC
BIDDING and AWARD COMMITTEE CHAIRMAN EDUARDO D. MEJOS and MEMBERS GIDEON DE GUZMAN, JOSE F.
BALBUENA, LAMBERTO P. LLAMAS, and BARTOLOME SINOCRUZ JR.; MEGA PACIFIC eSOLUTIONS, INC.; and MEGA
PACIFIC CONSORTIUM, respondents.
DECISION
PANGANIBAN, J.:
There is grave abuse of discretion (1) when an act is done contrary to the Constitution, the law or jurisprudence;[1] or (2)
when it is executed whimsically, capriciously or arbitrarily out of malice, ill will or personal bias.[2] In the present case, the
Commission on Elections approved the assailed Resolution and awarded the subject Contract not only in clear violation of
law and jurisprudence, but also in reckless disregard of its own bidding rules and procedure. For the automation of the
counting and canvassing of the ballots in the 2004 elections, Comelec awarded the Contract to Mega Pacific Consortium an
entity that had not participated in the bidding. Despite this grant, the poll body signed the actual automation Contract with
Mega Pacific eSolutions, Inc., a company that joined the bidding but had not met the eligibility requirements.
Comelec awarded this billion-peso undertaking with inexplicable haste, without adequately checking and observing
mandatory financial, technical and legal requirements. It also accepted the proferred computer hardware and software even
if, at the time of the award, they had undeniably failed to pass eight critical requirements designed to safeguard the integrity
of elections, especially the following three items:

They failed to achieve the accuracy rating criteria of 99.9995 percent set-up by the Comelec itself

They were not able to detect previously downloaded results at various canvassing or consolidation levels
and to prevent these from being inputted again

They were unable to print the statutorily required audit trails of the count/canvass at different levels
without any loss of data

Because of the foregoing violations of law and the glaring grave abuse of discretion committed by Comelec, the Court
has no choice but to exercise its solemn constitutional duty[3] to void the assailed Resolution and the subject Contract. The
illegal, imprudent and hasty actions of the Commission have not only desecrated legal and jurisprudential norms, but have
also cast serious doubts upon the poll bodys ability and capacity to conduct automated elections. Truly, the pith and soul of
democracy -- credible, orderly, and peaceful elections -- has been put in jeopardy by the illegal and gravely abusive acts of
Comelec.

The Case

Before us is a Petition[4] under Rule 65 of the Rules of Court, seeking (1) to declare null and void Resolution No. 6074 of
the Commission on Elections (Comelec), which awarded Phase II of the Modernization Project of the Commission to Mega
Pacific Consortium (MPC); (2) to enjoin the implementation of any further contract that may have been entered into by
Comelec either with Mega Pacific Consortium and/or Mega Pacific eSolutions, Inc. (MPEI); and (3) to compel Comelec to
conduct a re-bidding of the project.

The Facts

The following facts are not disputed. They were culled from official documents, the parties pleadings, as well as from
admissions during the Oral Argument on October 7, 2003.
On June 7, 1995, Congress passed Republic Act 8046,[5] which authorized Comelec to conduct a nationwide

demonstration of a computerized election system and allowed the poll body to pilot-test the system in the March 1996
elections in the Autonomous Region in Muslim Mindanao (ARMM).
On December 22, 1997, Congress enacted Republic Act 8436[6] authorizing Comelec to use an automated election
system (AES) for the process of voting, counting votes and canvassing/consolidating the results of the national and local
elections. It also mandated the poll body to acquire automated counting machines (ACMs), computer equipment, devices
and materials; and to adopt new electoral forms and printing materials.
Initially intending to implement the automation during the May 11, 1998 presidential elections, Comelec -- in its
Resolution No. 2985 dated February 9, 1998[7] -- eventually decided against full national implementation and limited the
automation to the Autonomous Region in Muslim Mindanao (ARMM). However, due to the failure of the machines to read
correctly some automated ballots in one town, the poll body later ordered their manual count for the entire Province of Sulu.
[8]
In the May 2001 elections, the counting and canvassing of votes for both national and local positions were also done
manually, as no additional ACMs had been acquired for that electoral exercise allegedly because of time constraints.
On October 29, 2002, Comelec adopted in its Resolution 02-0170 a modernization program for the 2004 elections. It
resolved to conduct biddings for the three (3) phases of its Automated Election System; namely, Phase I - Voter Registration
and Validation System; Phase II - Automated Counting and Canvassing System; and Phase III - Electronic Transmission.
On January 24, 2003, President Gloria Macapagal-Arroyo issued Executive Order No. 172, which allocated the sum
of P2.5 billion to fund the AES for the May 10, 2004 elections. Upon the request of Comelec, she authorized the release of an
additional P500 million.
On January 28, 2003, the Commission issued an Invitation to Apply for Eligibility and to Bid, which we quote as follows:
INVITATION TO APPLY FOR ELIGIBILITY AND TO BID
The Commission on Elections (COMELEC), pursuant to the mandate of Republic Act Nos. 8189 and 8436, invites interested
offerors, vendors, suppliers or lessors to apply for eligibility and to bid for the procurement by purchase, lease, lease with
option to purchase, or otherwise, supplies, equipment, materials and services needed for a comprehensive Automated
Election System, consisting of three (3) phases: (a) registration/verification of voters, (b) automated counting and
consolidation of votes, and (c) electronic transmission of election results, with an approved budget of TWO BILLION FIVE
HUNDRED MILLION (Php2,500,000,000) Pesos.
Only bids from the following entities shall be entertained:
a.

Duly licensed Filipino citizens/proprietorships;

b.

Partnerships duly organized under the laws of the Philippines and of which at least sixty percent (60%) of the
interest belongs to citizens of the Philippines;

c.

Corporations duly organized under the laws of the Philippines, and of which at least sixty percent (60%) of
the outstanding capital stock belongs to citizens of the Philippines;

d.

Manufacturers, suppliers and/or distributors forming themselves into a joint venture, i.e., a group of two (2) or
more manufacturers, suppliers and/or distributors that intend to be jointly and severally responsible or liable
for a particular contract, provided that Filipino ownership thereof shall be at least sixty percent (60%); and

e.

Cooperatives duly registered with the Cooperatives Development Authority.

Bid documents for the three (3) phases may be obtained starting 10 February 2003, during office hours from the Bids and
Awards Committee (BAC) Secretariat/Office of Commissioner Resurreccion Z. Borra, 7 th Floor, Palacio del Governador,
Intramuros, Manila, upon payment at the Cash Division, Commission on Elections, in cash or cashiers check, payable to the
Commission on Elections, of a non-refundable amount of FIFTEEN THOUSAND PESOS (Php15,000.00) for each
phase. For this purpose, interested offerors, vendors, suppliers or lessors have the option to participate in any or all of the
three (3) phases of the comprehensive Automated Election System.
A Pre-Bid Conference is scheduled on 13 February 2003, at 9:00 a.m. at the Session Hall, Commission on Elections, Postigo
Street, Intramuros, Manila. Should there be questions on the bid documents, bidders are required to submit their queries in
writing to the BAC Secretariat prior to the scheduled Pre-Bid Conference.
Deadline for submission to the BAC of applications for eligibility and bid envelopes for the supply of the comprehensive
Automated Election System shall be at the Session Hall, Commission on Elections, Postigo Street, Intramuros, Manila on 28
February 2003 at 9:00 a.m.

The COMELEC reserves the right to review the qualifications of the bidders after the bidding and before the contract is
executed. Should such review uncover any misrepresentation made in the eligibility statements, or any changes in the
situation of the bidder to materially downgrade the substance of such statements, the COMELEC shall disqualify the bidder
upon due notice without any obligation whatsoever for any expenses or losses that may be incurred by it in the preparation of
its bid.[9]
On February 11, 2003, Comelec issued Resolution No. 5929 clarifying certain eligibility criteria for bidders and the
schedule of activities for the project bidding, as follows:
1.)

2.)

Open to Filipino and foreign corporation duly registered and licensed to do business and is actually doing
business in the Philippines, subject to Sec. 43 of RA 9184 (An Act providing In the Modernization
Standardization and Regulation of the Procurement Activities of the Government and for other purposes etc.)

Track Record:
a)

For counting machines should have been used in at least one (1) political exercise with no less than
Twenty Million Voters;

b)

For verification of voters the reference site of an existing data base installation using Automated
Fingerprint Identification System (AFIS) with at least Twenty Million.

3.)

Ten percent (10%) equity requirement shall be based on the total project cost; and

4.)

Performance bond shall be twenty percent (20%) of the bid offer.

RESOLVED moreover, that:

1) A. Due to the decision that the eligibility requirements and the rest of the Bid documents shall be released at the
same time, and the memorandum of Comm. Resurreccion Z. Borra dated February 7, 2003, the documents
to be released on Friday, February 14, 2003 at 2:00 oclock p.m. shall be the eligibility criteria, Terms of
Reference (TOR) and other pertinent documents;
B. Pre-Bid conference shall be on February 18, 2003; and
C. Deadline for the submission and receipt of the Bids shall be on March 5, 2003.
2) The aforementioned documents will be available at the following offices:
a) Voters Validation: Office of Comm. Javier
b) Automated Counting Machines: Office of Comm. Borra
c) Electronic Transmission: Office of Comm. Tancangco[10]
On February 17, 2003, the poll body released the Request for Proposal (RFP) to procure the election automation
machines. The Bids and Awards Committee (BAC) of Comelec convened a pre-bid conference on February 18, 2003 and
gave prospective bidders until March 10, 2003 to submit their respective bids.
Among others, the RFP provided that bids from manufacturers, suppliers and/or distributors forming themselves into a
joint venture may be entertained, provided that the Philippine ownership thereof shall be at least 60 percent. Joint venture is
defined in the RFP as a group of two or more manufacturers, suppliers and/or distributors that intend to be jointly and
severally responsible or liable for a particular contract.[11]
Basically, the public bidding was to be conducted under a two-envelope/two stage system. The bidders first envelope or
the Eligibility Envelope should establish the bidders eligibility to bid and its qualifications to perform the acts if accepted. On
the other hand, the second envelope would be the Bid Envelope itself. The RFP outlines the bidding procedures as follows:
25.

Determination of Eligibility of Prospective Bidders

25.1 The eligibility envelopes of prospective Bidders shall be opened first to determine their eligibility. In case any
of the requirements specified in Clause 20 is missing from the first bid envelope, the BAC shall declare said
prospective Bidder as ineligible to bid. Bid envelopes of ineligible Bidders shall be immediately returned unopened.
25.2 The eligibility of prospective Bidders shall be determined using simple pass/fail criteria and shall be
determined as either eligible or ineligible. If the prospective Bidder is rated passed for all the legal, technical and
financial requirements, he shall be considered eligible. If the prospective Bidder is rated failed in any of the
requirements, he shall be considered ineligible.
26.

Bid Examination/Evaluation

26.1 The BAC will examine the Bids to determine whether they are complete, whether any computational errors
have been made, whether required securities have been furnished, whether the documents have been properly
signed, and whether the Bids are generally in order.

26.2 The BAC shall check the submitted documents of each Bidder against the required documents enumerated
under Clause 20, to ascertain if they are all present in the Second bid envelope (Technical Envelope). In case one
(1) or more of the required documents is missing, the BAC shall rate the Bid concerned as failed and immediately
return to the Bidder its Third bid envelope (Financial Envelope) unopened. Otherwise, the BAC shall rate the first
bid envelope as passed.
26.3 The BAC shall immediately open the Financial Envelopes of the Bidders whose Technical Envelopes were
passed or rated on or above the passing score. Only Bids that are determined to contain all the bid requirements
for both components shall be rated passed and shall immediately be considered for evaluation and comparison.
26.4 In the opening and examination of the Financial Envelope, the BAC shall announce and tabulate the Total Bid
Price as calculated. Arithmetical errors will be rectified on the following basis: If there is a discrepancy between
words and figures, the amount in words will prevail. If there is a discrepancy between the unit price and the total
price that is obtained by multiplying the unit price and the quantity, the unit price shall prevail and the total price
shall be corrected accordingly. If there is a discrepancy between the Total Bid Price and the sum of the total prices,
the sum of the total prices prevail and the Total Bid Price shall be corrected accordingly.
26.5 Financial Proposals which do not clearly state the Total Bid Price shall be rejected. Also, Total Bid Price as
calculated that exceeds the approved budget for the contract shall also be rejected.
27.

Comparison of Bids

27.1 The bid price shall be deemed to embrace all costs, charges and fees associated with carrying out all the
elements of the proposed Contract, including but not limited to, license fees, freight charges and taxes.
27.2 The BAC shall establish the calculated prices of all Bids rated passed and rank the same in ascending order.
xxx
29.

xxx

xxx

Postqualification

29.1 The BAC will determine to its satisfaction whether the Bidder selected as having submitted the lowest
calculated bid is qualified to satisfactorily perform the Contract.
29.2 The determination will take into account the Bidders financial, technical and production
capabilities/resources. It will be based upon an examination of the documentary evidence of the Bidders
qualification submitted by the Bidder as well as such other information as the BAC deems necessary and
appropriate.
29.3 A bid determined as not substantially responsive will be rejected by the BAC and may not subsequently be
made responsive by the Bidder by correction of the non-conformity.
29.4 The BAC may waive any informality or non-conformity or irregularity in a bid which does not constitute a
material deviation, provided such waiver does not prejudice or affect the relative ranking of any Bidder.
29.5 Should the BAC find that the Bidder complies with the legal, financial and technical requirements, it shall
make an affirmative determination which shall be a prerequisite for award of the Contract to the Bidder. Otherwise,
it will make a negative determination which will result in rejection of the Bidders bid, in which event the BAC will
proceed to the next lowest calculated bid to make a similar determination of that Bidders capabilities to perform
satisfactorily.[12]
Out of the 57 bidders,[13] the BAC found MPC and the Total Information Management Corporation (TIMC) eligible. For
technical evaluation, they were referred to the BACs Technical Working Group (TWG) and the Department of Science and
Technology (DOST).
In its Report on the Evaluation of the Technical Proposals on Phase II, DOST said that both MPC and TIMC had
obtained a number of failed marks in the technical evaluation. Notwithstanding these failures, Comelec en banc, on April 15,
2003, promulgated Resolution No. 6074 awarding the project to MPC. The Commission publicized this Resolution and the
award of the project to MPC on May 16, 2003.
On May 29, 2003, five individuals and entities (including the herein Petitioners Information Technology Foundation of the
Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon Akol) wrote a letter[14] to Comelec Chairman
Benjamin Abalos Sr. They protested the award of the Contract to Respondent MPC due to glaring irregularities in the
manner in which the bidding process had been conducted. Citing therein the noncompliance with eligibility as well as
technical and procedural requirements (many of which have been discussed at length in the Petition), they sought a rebidding.
In a letter-reply dated June 6, 2003,[15] the Comelec chairman -- speaking through Atty. Jaime Paz, his head executive

assistant -- rejected the protest and declared that the award would stand up to the strictest scrutiny.
Hence, the present Petition.[16]

The Issues

In their Memorandum, petitioners raise the following issues for our consideration:
1.

The COMELEC awarded and contracted with a non-eligible entity; x x x

2.

Private respondents failed to pass the Technical Test as required in the RFP. Notwithstanding, such failure
was ignored. In effect, the COMELEC changed the rules after the bidding in effect changing the nature of the
contract bidded upon.

3.

Petitioners have locus standi.

4.

Instant Petition is not premature. Direct resort to the Supreme Court is justified.[17]

In the main, the substantive issue is whether the Commission on Elections, the agency vested with the exclusive
constitutional mandate to oversee elections, gravely abused its discretion when, in the exercise of its administrative functions,
it awarded to MPC the contract for the second phase of the comprehensive Automated Election System.
Before discussing the validity of the award to MPC, however, we deem it proper to first pass upon the procedural issues:
the legal standing of petitioners and the alleged prematurity of the Petition.

This Courts Ruling

The Petition is meritorious.

First Procedural Issue:

Locus Standi of Petitioners

Respondents chorus that petitioners do not possess locus standi, inasmuch as they are not challenging the validity or
constitutionality of RA 8436. Moreover, petitioners supposedly admitted during the Oral Argument that no law had been
violated by the award of the Contract. Furthermore, they allegedly have no actual and material interest in the Contract and,
hence, do not stand to be injured or prejudiced on account of the award.
On the other hand, petitioners -- suing in their capacities as taxpayers, registered voters and concerned citizens -respond that the issues central to this case are of transcendental importance and of national interest. Allegedly, Comelecs
flawed bidding and questionable award of the Contract to an unqualified entity would impact directly on the success or the
failure of the electoral process. Thus, any taint on the sanctity of the ballot as the expression of the will of the people would
inevitably affect their faith in the democratic system of government. Petitioners further argue that the award of any contract
for automation involves disbursement of public funds in gargantuan amounts; therefore, public interest requires that the laws
governing the transaction must be followed strictly.
We agree with petitioners. Our nations political and economic future virtually hangs in the balance, pending the
outcome of the 2004 elections. Hence, there can be no serious doubt that the subject matter of this case is a matter of public
concern and imbued with public interest;[18] in other words, it is of paramount public interest[19] and transcendental
importance.[20] This fact alone would justify relaxing the rule on legal standing, following the liberal policy of this Court
whenever a case involves an issue of overarching significance to our society.[21] Petitioners legal standing should
therefore be recognized and upheld.
Moreover, this Court has held that taxpayers are allowed to sue when there is a claim of illegal disbursement of public

funds,[22] or if public money is being deflected to any improper purpose;[23] or when petitioners seek to restrain
respondent from wasting public funds through the enforcement of an invalid or unconstitutional law.[24] In the instant case,
individual petitioners, suing as taxpayers, assert a material interest in seeing to it that public funds are properly and lawfully
used. In the Petition, they claim that the bidding was defective, the winning bidder not a qualified entity, and the award of the
Contract contrary to law and regulation. Accordingly, they seek to restrain respondents from implementing the Contract
and, necessarily, from making any unwarranted expenditure of public funds pursuant thereto. Thus, we hold that petitioners
possess locus standi.

Second Procedural Issue:

Alleged Prematurity Due to Non-Exhaustion
of Administrative Remedies

Respondents claim that petitioners acted prematurely, since they had not first utilized the protest mechanism available to
them under RA 9184, the Government Procurement Reform Act, for the settlement of disputes pertaining to procurement
contracts.
Section 55 of RA 9184 states that protests against decisions of the Bidding and Awards Committee in all stages of
procurement may be lodged with the head of the procuring entity by filing a verified position paper and paying a protest
fee. Section 57 of the same law mandates that in no case shall any such protest stay or delay the bidding process, but it
must first be resolved before any award is made.
On the other hand, Section 58 provides that court action may be resorted to only after the protests contemplated by the
statute shall have been completed. Cases filed in violation of this process are to be dismissed for lack of
jurisdiction. Regional trial courts shall have jurisdiction over final decisions of the head of the procuring entity, and court
actions shall be instituted pursuant to Rule 65 of the 1997 Rules of Civil Procedure.
Respondents assert that throughout the bidding process, petitioners never questioned the BAC Report finding MPC
eligible to bid and recommending the award of the Contract to it (MPC). According to respondents, the Report should have
been appealed to the Comelec en banc, pursuant to the aforementioned sections of RA 9184. In the absence of such appeal,
the determination and recommendation of the BAC had become final.
The Court is not persuaded.
Respondent Comelec came out with its en banc Resolution No. 6074 dated April 15, 2003, awarding the project to
Respondent MPC even before the BAC managed to issue its written report and recommendation on April 21, 2003. Thus,
how could petitioners have appealed the BACs recommendation or report to the head of the procuring entity (the chairman of
Comelec), when the Comelec en banc had already approved the award of the contract to MPC even before petitioners
learned of the BAC recommendation?
It is claimed[25] by Comelec that during its April 15, 2003 session, it received and approved the verbal report and
recommendation of the BAC for the award of the Contract to MPC, and that the BAC subsequently re-affirmed its verbal
report and recommendation by submitting it in writing on April 21, 2003. Respondents insist that the law does not require that
the BAC Report be in writing before Comelec can act thereon; therefore, there is allegedly nothing irregular about the Report
as well as the en banc Resolution.
However, it is obvious that petitioners could have appealed the BACs report and recommendation to the head of the
procuring entity (the Comelec chair) only upon their discovery thereof, which at the very earliest would have been on April 21,
2003, when the BAC actually put its report in writing and finally released it. Even then, what would have been the use of
protesting/appealing the report to the Comelec chair, when by that time the Commission en banc ( including the chairman
himself) had already approved the BAC Report and awarded the Contract to MPC?
And even assuming arguendo that petitioners had somehow gotten wind of the verbal BAC report on April 15, 2003
(immediately after the en banc session), at that point the Commission en banc had already given its approval to the BAC
Report along with the award to MPC. To put it bluntly, the Comelec en banc itself made it legally impossible for petitioners to
avail themselves of the administrative remedy that the Commission is so impiously harping on. There is no doubt that they
had not been accorded the opportunity to avail themselves of the process provided under Section 55 of RA 9184, according
to which a protest against a decision of the BAC may be filed with the head of the procuring entity. Nemo tenetur ad
impossible,[26] to borrow private respondents favorite Latin excuse.[27]

Some Observations on the

BAC Report to the Comelec

We shall return to this issue of alleged prematurity shortly, but at this interstice, we would just want to put forward a few
observations regarding the BAC Report and the Comelec en bancs approval thereof.
First, Comelec contends that there was nothing unusual about the fact that the Report submitted by the BAC came only
after the former had already awarded the Contract, because the latter had been asked to render its report and
recommendation orally during the Commissions en banc session on April 15, 2003. Accordingly, Comelec supposedly acted
upon such oral recommendation and approved the award to MPC on the same day, following which the recommendation was
subsequently reduced into writing on April 21, 2003. While not entirely outside the realm of the possible, this interesting and
unique spiel does not speak well of the process that Comelec supposedly went through in making a critical decision with
respect to a multi-billion-peso contract.
We can imagine that anyone else standing in the shoes of the Honorable Commissioners would have been extremely
conscious of the overarching need for utter transparency. They would have scrupulously avoided the slightest hint of
impropriety, preferring to maintain an exacting regularity in the performance of their duties, instead of trying to break a speed
record in the award of multi-billion-peso contracts. After all, between April 15 and April 21 were a mere six (6) days. Could
Comelec not have waited out six more days for the written report of the BAC, instead of rushing pell-mell into the arms of
MPC? Certainly, respondents never cared to explain the nature of the Commissions dire need to act immediately without
awaiting the formal, written BAC Report.
In short, the Court finds it difficult to reconcile the uncommon dispatch with which Comelec acted to approve the multibillion-peso deal, with its claim of having been impelled by only the purest and most noble of motives.
At any rate, as will be discussed later on, several other factors combine to lend negative credence to Comelecs tale.
Second, without necessarily ascribing any premature malice or premeditation on the part of the Comelec officials
involved, it should nevertheless be conceded that this cart-before-the-horse maneuver (awarding of the Contract ahead of the
BACs written report) would definitely serve as a clever and effective way of averting and frustrating any impending protest
under Section 55.
Having made the foregoing observations, we now go back to the question of exhausting administrative
remedies. Respondents may not have realized it, but the letter addressed to Chairman Benjamin Abalos Sr. dated May 29,
2003[28] serves to eliminate the prematurity issue as it was an actual written protest against the decision of the poll body to
award the Contract. The letter was signed by/for, inter alia, two of herein petitioners: the Information Technology Foundation
of the Philippines, represented by its president, Alfredo M. Torres; and Ma. Corazon Akol.
Such letter-protest is sufficient compliance with the requirement to exhaust administrative remedies particularly because
it hews closely to the procedure outlined in Section 55 of RA 9184.
And even without that May 29, 2003 letter-protest, the Court still holds that petitioners need not exhaust administrative
remedies in the light of Paat v. Court of Appeals.[29] Paat enumerates the instances when the rule on exhaustion of
administrative remedies may be disregarded, as follows:
(1)

when there is a violation of due process,

(2)

when the issue involved is purely a legal question,

(3)

when the administrative action is patently illegal amounting to lack or excess of jurisdiction,

(4)

when there is estoppel on the part of the administrative agency concerned,

(5)

when there is irreparable injury,

(6)

when the respondent is a department secretary whose acts as an alter ego of the President bears the implied
and assumed approval of the latter,

(7)

when to require exhaustion of administrative remedies would be unreasonable,

(8)

when it would amount to a nullification of a claim,

(9)

when the subject matter is a private land in land case proceedings,

(10)

when the rule does not provide a plain, speedy and adequate remedy, and

(11)

when there are circumstances indicating the urgency of judicial intervention.[30]

The present controversy precisely falls within the exceptions listed as Nos. 7, 10 and 11: (7) when to require exhaustion
of administrative remedies would be unreasonable; (10) when the rule does not provide a plain, speedy and adequate
remedy, and (11) when there are circumstances indicating the urgency of judicial intervention . As already stated, Comelec
itself made the exhaustion of administrative remedies legally impossible or, at the very least, unreasonable.
In any event, the peculiar circumstances surrounding the unconventional rendition of the BAC Report and the precipitate
awarding of the Contract by the Comelec en banc -- plus the fact that it was racing to have its Contract with MPC
implemented in time for the elections in May 2004 (barely four months away) -- have combined to bring about the urgent need
for judicial intervention, thus prompting this Court to dispense with the procedural exhaustion of administrative remedies in
this case.

Main Substantive Issue:

Validity of the Award to MPC

We come now to the meat of the controversy. Petitioners contend that the award is invalid, since Comelec gravely
abused its discretion when it did the following:
1. Awarded the Contract to MPC though it did not even participate in the bidding
2. Allowed MPEI to participate in the bidding despite its failure to meet the mandatory eligibility requirements
3. Issued its Resolution of April 15, 2003 awarding the Contract to MPC despite the issuance by the BAC of its Report,
which formed the basis of the assailed Resolution, only on April 21, 2003[31]
4. Awarded the Contract, notwithstanding the fact that during the bidding process, there were violations of the
mandatory requirements of RA 8436 as well as those set forth in Comelecs own Request for Proposal on the automated
election system
5. Refused to declare a failed bidding and to conduct a re-bidding despite the failure of the bidders to pass the technical
tests conducted by the Department of Science and Technology
6. Failed to follow strictly the provisions of RA 8436 in the conduct of the bidding for the automated counting machines
After reviewing the slew of pleadings as well as the matters raised during the Oral Argument, the Court deems it
sufficient to focus discussion on the following major areas of concern that impinge on the issue of grave abuse of discretion:
A.

Matters pertaining to the identity, existence and eligibility of MPC as a bidder

B.

Failure of the automated counting machines (ACMs) to pass the DOST technical tests

C.
Remedial measures and re-testings undertaken by Comelec and DOST after the award, and their effect on the present
controversy

A.
Failure to Establish the Identity,
Existence and Eligibility of the
Alleged Consortium as a Bidder

On the question of the identity and the existence of the real bidder, respondents insist that, contrary to petitioners
allegations, the bidder was not Mega Pacific eSolutions, Inc. (MPEI), which was incorporated only on February 27, 2003, or
11 days prior to the bidding itself. Rather, the bidder was Mega Pacific Consortium (MPC), of which MPEI was but a part. As
proof thereof, they point to the March 7, 2003 letter of intent to bid, signed by the president of MPEI allegedly for and on
behalf of MPC. They also call attention to the official receipt issued to MPC, acknowledging payment for the bidding

documents, as proof that it was the consortium that participated in the bidding process.
We do not agree. The March 7, 2003 letter, signed by only one signatory -- Willy U. Yu, President, Mega Pacific
eSolutions, Inc., (Lead Company/ Proponent) For: Mega Pacific Consortium -- and without any further proof, does not by
itself prove the existence of the consortium. It does not show that MPEI or its president have been duly pre-authorized by the
other members of the putative consortium to represent them, to bid on their collective behalf and, more important, to commit
them jointly and severally to the bid undertakings. The letter is purely self-serving and uncorroborated.
Neither does an official receipt issued to MPC, acknowledging payment for the bidding documents, constitute proof that
it was the purported consortium that participated in the bidding. Such receipts are issued by cashiers without any legally
sufficient inquiry as to the real identity or existence of the supposed payor.
To assure itself properly of the due existence (as well as eligibility and qualification) of the putative consortium,
Comelecs BAC should have examined the bidding documents submitted on behalf of MPC. They would have easily
discovered the following fatal flaws.

Two-Envelope,
Two-Stage System

As stated earlier in our factual presentation, the public bidding system designed by Comelec under its RFP (Request for
Proposal for the Automation of the 2004 Election) mandated the use of a two-envelope, two-stage system. A bidders first
envelope (Eligibility Envelope) was meant to establish its eligibility to bid and its qualifications and capacity to perform the
contract if its bid was accepted, while the second envelope would be the Bid Envelope itself.
The Eligibility Envelope was to contain legal documents such as articles of incorporation, business registrations, licenses
and permits, mayors permit, VAT certification, and so forth;technical documents containing documentary evidence to
establish the track record of the bidder and its technical and production capabilities to perform the contract; and financial
documents, including audited financial statements for the last three years, to establish the bidders financial capacity.
In the case of a consortium or joint venture desirous of participating in the bidding, it goes without saying that the
Eligibility Envelope would necessarily have to include a copy of the joint venture agreement, the consortium agreement or
memorandum of agreement -- or a business plan or some other instrument of similar import -- establishing the due existence,
composition and scope of such aggrupation. Otherwise, how would Comelec know who it was dealing with, and whether
these parties are qualified and capable of delivering the products and services being offered for bidding?[32]
In the instant case, no such instrument was submitted to Comelec during the bidding process. This fact can be
conclusively ascertained by scrutinizing the two-inch thick Eligibility Requirements file submitted by Comelec last October 9,
2003, in partial compliance with this Courts instructions given during the Oral Argument. This file purports to replicate the
eligibility documents originally submitted to Comelec by MPEI allegedly on behalf of MPC, in connection with the bidding
conducted in March 2003. Included in the file are the incorporation papers and financial statements of the members of the
supposed consortium and certain certificates, licenses and permits issued to them.
However, there is no sign whatsoever of any joint venture agreement, consortium agreement, memorandum of
agreement, or business plan executed among the members of the purported consortium.
The only logical conclusion is that no such agreement was ever submitted to the Comelec for its consideration, as part
of the bidding process.
It thus follows that, prior the award of the Contract, there was no documentary or other basis for Comelec to conclude
that a consortium had actually been formed amongst MPEI, SK C&C and WeSolv, along with Election.com and ePLDT.
[33] Neither was there anything to indicate the exact relationships between and among these firms; their diverse roles,
undertakings and prestations, if any, relative to the prosecution of the project, the extent of their respective investments (if
any) in the supposed consortium or in the project; and the precise nature and extent of their respective liabilities with respect
to the contract being offered for bidding. And apart from the self-serving letter of March 7, 2003, there was not even any
indication that MPEI was the lead company duly authorized to act on behalf of the others.
So, it necessarily follows that, during the bidding process, Comelec had no basis at all for determining that the alleged

consortium really existed and was eligible and qualified; and that the arrangements among the members were satisfactory
and sufficient to ensure delivery on the Contract and to protect the governments interest.
Notwithstanding such deficiencies, Comelec still deemed the consortium eligible to participate in the bidding,
proceeded to open its Second Envelope, and eventually awarded the bid to it, even though -- per the Comelecs own RFP -the BAC should have declared the MPC ineligible to bid and returned the Second (Bid) Envelope unopened.
Inasmuch as Comelec should not have considered MPEI et al. as comprising a consortium or joint venture, it should not
have allowed them to avail themselves of the provision in Section 5.4 (b) (i) of the IRR for RA 6957 (the Build-OperateTransfer Law), as amended by RA 7718. This provision states in part that a joint venture/consortium proponent shall be
evaluated based on the individual or collective experience of the member-firms of the joint venture or consortium and of the
contractor(s) that it has engaged for the project. Parenthetically, respondents have uniformly argued that the said IRR of RA
6957, as amended, have suppletory application to the instant case.
Hence, had the proponent MPEI been evaluated based solely on its own experience, financial and operational track
record or lack thereof, it would surely not have qualified and would have been immediately considered ineligible to bid, as
respondents readily admit.
At any rate, it is clear that Comelec gravely abused its discretion in arbitrarily failing to observe its own rules, policies and
guidelines with respect to the bidding process, thereby negating a fair, honest and competitive bidding.

Commissioners Not
Aware of Consortium

In this regard, the Court is beguiled by the statements of Commissioner Florentino Tuason Jr., given in open court during
the Oral Argument last October 7, 2003. The good commissioner affirmed that he was aware, of his own personal
knowledge, that there had indeed been a written agreement among the consortium members,[34] although it was an internal
matter among them,[35] and of the fact that it would be presented by counsel for private respondent.[36]
However, under questioning by Chief Justice Hilario G. Davide Jr. and Justice Jose C. Vitug, Commissioner Tuason in
effect admitted that, while he was the commissioner-in-charge of Comelecs Legal Department, he had never seen, even up
to that late date, the agreement he spoke of.[37] Under further questioning, he was likewise unable to provide any
information regarding the amounts invested into the project by several members of the claimed consortium.[38] A short while
later, he admitted that the Commission had not taken a look at the agreement(if any).[39]
He tried to justify his position by claiming that he was not a member of the BAC. Neither was he the commissioner-incharge of the Phase II Modernization project (the automated election system); but that, in any case, the BAC and the Phase II
Modernization Project Team did look into the aspect of the composition of the consortium.
It seems to the Court, though, that even if the BAC or the Phase II Team had taken charge of evaluating the eligibility,
qualifications and credentials of the consortium-bidder, still, in all probability, the former would have referred the task to
Commissioner Tuason, head of Comelecs Legal Department. That task was the appreciation and evaluation of the legal
effects and consequences of the terms, conditions, stipulations and covenants contained in any joint venture agreement,
consortium agreement or a similar document -- assuming of course that any of these was available at the time. The fact that
Commissioner Tuason was barely aware of the situation bespeaks the complete absence of such document, or the utter
failure or neglect of the Comelec to examine it -- assuming it was available at all -- at the time the award was made on April
15, 2003.
In any event, the Court notes for the record that Commissioner Tuason basically contradicted his statements in open
court about there being one written agreement among all the consortium members, when he subsequently referred[40] to the
four (4) Memoranda of Agreement (MOAs) executed by them.[41]
At this juncture, one might ask: What, then, if there are four MOAs instead of one or none at all? Isnt it enough that
there are these corporations coming together to carry out the automation project? Isnt it true, as respondent aver, that
nowhere in the RFP issued by Comelec is it required that the members of the joint venture execute a single written
agreement to prove the existence of a joint venture. Indeed, the intention to be jointly and severally liable may be evidenced
not only by a single joint venture agreement, but also by supplementary documents executed by the parties signifying such
intention. What then is the big deal?

The problem is not that there are four agreements instead of only one. The problem is that Comelec never bothered to
check. It never based its decision on documents or other proof that would concretely establish the existence of the claimed
consortium or joint venture or agglomeration. It relied merely on the self-serving representation in an uncorroborated letter
signed by only one individual, claiming that his company represented a consortium of several different corporations. It
concluded forthwith that a consortium indeed existed, composed of such and such members, and thereafter declared that the
entity was eligible to bid.
True, copies of financial statements and incorporation papers of the alleged consortium members were submitted. But
these papers did not establish the existence of a consortium, as they could have been provided by the companies concerned
for purposes other than to prove that they were part of a consortium or joint venture. For instance, the papers may have been
intended to show that those companies were each qualified to be a sub-contractor (and nothing more) in a major
project. Those documents did not by themselves support the assumption that a consortium or joint venture existed among
the companies.
In brief, despite the absence of competent proof as to the existence and eligibility of the alleged consortium (MPC), its
capacity to deliver on the Contract, and the members joint and several liability therefor, Comelec nevertheless assumed that
such consortium existed and was eligible. It then went ahead and considered the bid of MPC, to which the Contract was
eventually awarded, in gross violation of the formers own bidding rules and procedures contained in its RFP. Therein lies
Comelecs grave abuse of discretion.

Sufficiency of the
Four Agreements

Instead of one multilateral agreement executed by, and effective and binding on, all the five consortium members -- as
earlier claimed by Commissioner Tuason in open court -- it turns out that what was actually executed were four (4) separate
and distinct bilateral Agreements.[42] Obviously, Comelec was furnished copies of these Agreements only after the bidding
process had been terminated, as these were not included in the Eligibility Documents. These Agreements are as follows:

A Memorandum of Agreement between MPEI and SK C&C

A Memorandum of Agreement between MPEI and WeSolv

A Teaming Agreement between MPEI and Election.com Ltd.

A Teaming Agreement between MPEI and ePLDT.

In sum, each of the four different and separate bilateral Agreements is valid and binding only between MPEI and the
other contracting party, leaving the other consortium members total strangers thereto. Under this setup, MPEI
dealt separately with each of the members, and the latter (WeSolv, SK C&C, Election.com, and ePLDT) in turn had nothing
to do with one another, each dealing only with MPEI.
Respondents assert that these four Agreements were sufficient for the purpose of enabling the corporations to still
qualify (even at that late stage) as a consortium or joint venture, since the first two Agreements had allegedly set forth the
joint and several undertakings among the parties, whereas the latter two clarified the parties respective roles with regard to
the Project, with MPEI being the independent contractor and Election.com and ePLDT the subcontractors.
Additionally, the use of the phrase particular contract in the Comelecs Request for Proposal (RFP), in connection with
the joint and several liabilities of companies in a joint venture, is taken by them to mean that all the members of the joint
venture need not be solidarily liable for the entire project or joint venture, because it is sufficient that the lead company and
the member in charge of a particular contract or aspect of the joint venture agree to be solidarily liable.
At this point, it must be stressed most vigorously that the submission of the four bilateral Agreements to Comelec after
the end of the bidding process did nothing to eliminate the grave abuse of discretion it had already committed on April 15,
2003.

Deficiencies Have
Not Been Cured

In any event, it is also claimed that the automation Contract awarded by Comelec incorporates all documents executed
by the consortium members, even if these documents are not referred to therein. The basis of this assertion appears to be
the passages from Section 1.4 of the Contract, which is reproduced as follows:
All Contract Documents shall form part of the Contract even if they or any one of them is not referred to or mentioned in the
Contract as forming a part thereof. Each of the Contract Documents shall be mutually complementary and explanatory of
each other such that what is noted in one although not shown in the other shall be considered contained in all, and what is
required by any one shall be as binding as if required by all, unless one item is a correction of the other.
The intent of the Contract Documents is the proper, satisfactory and timely execution and completion of the Project, in
accordance with the Contract Documents. Consequently, all items necessary for the proper and timely execution and
completion of the Project shall be deemed included in the Contract.
Thus, it is argued that whatever perceived deficiencies there were in the supplementary contracts -- those entered into
by MPEI and the other members of the consortium as regards their joint and several undertakings -- have been
cured. Better still, such deficiencies have supposedly been prevented from arising as a result of the above-quoted provisions,
from which it can be immediately established that each of the members of MPC assumes the same joint and several liability
as the other members.
The foregoing argument is unpersuasive. First, the contract being referred to, entitled The Automated Counting and
Canvassing Project Contract, is between Comelec and MPEI, not the alleged consortium, MPC. To repeat, it is MPEI -- not
MPC -- that is a party to the Contract. Nowhere in that Contract is there any mention of a consortium or joint venture, of
members thereof, much less of joint and several liability. Supposedly executed sometime in May 2003,[43] the Contract
bears a notarization date of June 30, 2003, and contains the signature of Willy U. Yu signing as president of MPEI (not for
and on behalf of MPC), along with that of the Comelec chair. It provides in Section 3.2 that MPEI (not MPC) is to supply the
Equipment and perform the Services under the Contract, in accordance with the appendices thereof; nothing whatsoever is
said about any consortium or joint venture or partnership.
Second, the portions of Section 1.4 of the Contract reproduced above do not have the effect of curing (much less
preventing) deficiencies in the bilateral agreements entered into by MPEI with the other members of the consortium, with
respect to their joint and several liabilities. The term Contract Documents, as used in the quoted passages of Section 1.4,
has a well-defined meaning and actually refers only to the following documents:

The Contract itself along with its appendices

The Request for Proposal (also known as Terms of Reference) issued by the Comelec, including the Tender
Inquiries and Bid Bulletins
The Tender Proposal submitted by MPEI

In other words, the term Contract Documents cannot be understood as referring to or including the MOAs and the
Teaming Agreements entered into by MPEI with SK C&C, WeSolv, Election.com and ePLDT. This much is very clear and
admits of no debate. The attempt to use the provisions of Section 1.4 to shore up the MOAs and the Teaming Agreements is
simply unwarranted.
Third and last, we fail to see how respondents can arrive at the conclusion that, from the above-quoted provisions, it can
be immediately established that each of the members of MPC assumes the same joint and several liability as the other
members. Earlier, respondents claimed exactly the opposite -- that the two MOAs (between MPEI and SK C&C, and between
MPEI and WeSolv) had set forth the joint and several undertakings among the parties; whereas the two Teaming
Agreements clarified the parties respective roles with regard to the Project, with MPEI being the independent contractor and
Election.com and ePLDT the subcontractors.
Obviously, given the differences in their relationships, their respective liabilities cannot be the same. Precisely, the very
clear terms and stipulations contained in the MOAs and the Teaming Agreements -- entered into by MPEI with SK C&C,
WeSolv, Election.com and ePLDT -- negate the idea that these members are on a par with one another and are, as such,
assuming the same joint and several liability.

Moreover, respondents have earlier seized upon the use of the term particular contract in the Comelecs Request for
Proposal (RFP), in order to argue that all the members of the joint venture did not need to be solidarily liable for the entire
project or joint venture. It was sufficient that the lead company and the member in charge of a particular contract or aspect of
the joint venture would agree to be solidarily liable. The glaring lack of consistency leaves us at a loss. Are respondents
trying to establish the same joint and solidary liability among all the members or not?

Enforcement of
Liabilities Problematic

Next, it is also maintained that the automation Contract between Comelec and the MPEI confirms the solidary
undertaking of the lead company and the consortium member concerned for each particular Contract, inasmuch as the
position of MPEI and anyone else performing the services contemplated under the Contract is described therein as that of an
independent contractor.
The Court does not see, however, how this conclusion was arrived at. In the first place, the contractual provision being
relied upon by respondents is Article 14, Independent Contractors, which states: Nothing contained herein shall be
construed as establishing or creating between the COMELEC and MEGA the relationship of employee and employer or
principal and agent, it being understood that the position of MEGA and of anyone performing the Services contemplated
under this Contract, is that of an independent contractor.
Obviously, the intent behind the provision was simply to avoid the creation of an employer-employee or a principal-agent
relationship and the complications that it would produce. Hence, the Article states that the role or position of MPEI, or anyone
else performing on its behalf, is that of an independent contractor. It is obvious to the Court that respondents are stretching
matters too far when they claim that, because of this provision, the Contract in effect confirms the solidary undertaking of the
lead company and the consortium member concerned for the particular phase of the project. This assertion is an
absolute non sequitur.

Enforcement of Liabilities
Under the Civil Code Not Possible

In any event, it is claimed that Comelec may still enforce the liability of the consortium members under the Civil Code
provisions on partnership, reasoning that MPEI et al. represented themselves as partners and members of MPC for purposes
of bidding for the Project. They are, therefore, liable to the Comelec to the extent that the latter relied upon such
representation. Their liability as partners is solidary with respect to everything chargeable to the partnership under certain
conditions.
The Court has two points to make with respect to this argument. First, it must be recalled that SK C&C, WeSolv,
Election.com and ePLDT never represented themselves as partners and members of MPC, whether for purposes of bidding
or for something else. It was MPEI alone that represented them to be members of a consortium it supposedly
headed. Thus, its acts may not necessarily be held against the other members.
Second, this argument of the OSG in its Memorandum[44] might possibly apply in the absence of a joint venture
agreement or some other writing that discloses the relationship of the members with one another. But precisely, this case
does not deal with a situation in which there is nothing in writing to serve as reference, leaving Comelec to rely on mere
representations and therefore justifying a falling back on the rules on partnership. For, again, the terms and stipulations of
the MOAs entered into by MPEI with SK C&C and WeSolv, as well as the Teaming Agreements of MPEI with Election.com
and ePLDT (copies of which have been furnished the Comelec) are very clear with respect to the extent and the limitations of
the firms respective liabilities.
In the case of WeSolv and SK C&C, their MOAs state that their liabilities, while joint and several with MPEI, are limited
only to the particular areas of work wherein their services are engaged or their products utilized . As for Election.com and
ePLDT, their separate Teaming Agreements specifically ascribe to them the role of subcontractor vis--vis MPEI as
contractor and, based on the terms of their particular agreements, neither Election.com nor ePLDT is, with MPEI, jointly and
severally liable to Comelec.[45] It follows then that in the instant case, there is no justification for anyone, much less Comelec,
to resort to the rules on partnership and partners liabilities.

Eligibility of a Consortium
Based on the Collective
Qualifications of Its Members

Respondents declare that, for purposes of assessing the eligibility of the bidder, the members of MPC should be
evaluated on a collective basis. Therefore, they contend, the failure of MPEI to submit financial statements (on account of its
recent incorporation) should not by itself disqualify MPC, since the other members of the consortium could meet the criteria
set out in the RFP.
Thus, according to respondents, the collective nature of the undertaking of the members of MPC, their contribution of
assets and sharing of risks, and the community of their interest in the performance of the Contract lead to these reasonable
conclusions: (1) that their collective qualifications should be the basis for evaluating their eligibility; (2) that the sheer enormity
of the project renders it improbable to expect any single entity to be able to comply with all the eligibility requirements and
undertake the project by itself; and (3) that, as argued by the OSG, the RFP allows bids from manufacturers, suppliers and/or
distributors that have formed themselves into a joint venture, in recognition of the virtual impossibility of a single entitys ability
to respond to the Invitation to Bid.
Additionally, argues the Comelec, the Implementing Rules and Regulations of RA 6957 (the Build-Operate-Transfer Law)
as amended by RA 7718 would be applicable, as proponents of BOT projects usually form joint ventures or
consortiums. Under the IRR, a joint venture/consortium proponent shall be evaluated based on the individual or the collective
experience of the member-firms of the joint venture/consortium and of the contractors the proponent has engaged for the
project.
Unfortunately, this argument seems to assume that the collective nature of the undertaking of the members of MPC,
their contribution of assets and sharing of risks, and the community of their interest in the performance of the Contract
entitle MPC to be treated as a joint venture or consortium; and to be evaluated accordingly on the basis of the members
collective qualifications when, in fact, the evidence before the Court suggest otherwise.
This Court in Kilosbayan v. Guingona[46] defined joint venture as an association of persons or companies jointly
undertaking some commercial enterprise; generally, all contribute assets and share risks. It requires a community of interest
in the performance of the subject matter, a right to direct and govern the policy in connection therewith, and [a] duty, which
may be altered by agreement to share both in profit and losses.
Going back to the instant case, it should be recalled that the automation Contract with Comelec was not executed by the
consortium MPC -- or by MPEI for and on behalf of MPC -- but by MPEI, period. The said Contract contains no mention
whatsoever of any consortium or members thereof. This fact alone seems to contradict all the suppositions about a joint
undertaking that would normally apply to a joint venture or consortium: that it is a commercial enterprise involving a
community of interest, a sharing of risks, profits and losses, and so on.
Now let us consider the four bilateral Agreements, starting with the Memorandum of Agreement between MPEI and
WeSolv Open Computing, Inc., dated March 5, 2003. The body of the MOA consists of just seven (7) short paragraphs that
would easily fit in one page. It reads as follows:
1.
The parties agree to cooperate in successfully implementing the Project in the substance and form as may be most
beneficial to both parties and other subcontractors involved in the Project.
2.
Mega Pacific shall be responsible for any contract negotiations and signing with the COMELEC and, subject to the
latters approval, agrees to give WeSolv an opportunity to be present at meetings with the COMELEC concerning WeSolvs
portion of the Project.
3.
WeSolv shall be jointly and severally liable with Mega Pacific only for the particular products and/or services supplied
by the former for the Project.
4.
Each party shall bear its own costs and expenses relative to this agreement unless otherwise agreed upon by the
parties.
5.
The parties undertake to do all acts and such other things incidental to, necessary or desirable or the attainment of the
objectives and purposes of this Agreement.
6.
In the event that the parties fail to agree on the terms and conditions of the supply of the products and services
including but not limited to the scope of the products and services to be supplied and payment terms, WeSolv shall cease to
be bound by its obligations stated in the aforementioned paragraphs.
7.

Any dispute arising from this Agreement shall be settled amicably by the parties whenever possible. Should the parties

be unable to do so, the parties hereby agree to settle their dispute through arbitration in accordance with the existing laws of
the Republic of the Philippines. (Underscoring supplied.)
Even shorter is the Memorandum of Agreement between MPEI and SK C&C Co. Ltd., dated March 9, 2003, the body of
which consists of only six (6) paragraphs, which we quote:
1.
All parties agree to cooperate in achieving the Consortiums objective of successfully implementing the Project in the
substance and form as may be most beneficial to the Consortium members and in accordance w/ the demand of the RFP.
2.
Mega Pacific shall have full powers and authority to represent the Consortium with the Comelec, and to enter and sign,
for and in behalf of its members any and all agreement/s which maybe required in the implementation of the Project.
3.
Each of the individual members of the Consortium shall be jointly and severally liable with the Lead Firm for the
particular products and/or services supplied by such individual member for the project, in accordance with their respective
undertaking or sphere of responsibility.
4.
Each party shall bear its own costs and expenses relative to this agreement unless otherwise agreed upon by the
parties.
5.
The parties undertake to do all acts and such other things incidental to, necessary or desirable for the attainment of the
objectives and purposes of this Agreement.
6.
Any dispute arising from this Agreement shall be settled amicably by the parties whenever possible. Should the parties
be unable to do so, the parties hereby agree to settle their dispute through arbitration in accordance with the existing laws of
the Republic of the Philippines. (Underscoring supplied.)
It will be noted that the two Agreements quoted above are very similar in wording. Neither of them contains any specifics
or details as to the exact nature and scope of the parties respective undertakings, performances and deliverables under the
Agreement with respect to the automation project. Likewise, the two Agreements are quite bereft of pesos-and-centavos data
as to the amount of investments each party contributes, its respective share in the revenues and/or profit from the Contract
with Comelec, and so forth -- all of which are normal for agreements of this nature. Yet, according to public and private
respondents, the participation of MPEI, WeSolv and SK C&C comprises fully 90 percent of the entire undertaking with respect
to the election automation project, which is worth about P1.3 billion.
As for Election.com and ePLDT, the separate Teaming Agreements they entered into with MPEI for the remaining 10
percent of the entire project undertaking are ironically much longer and more detailed than the MOAs discussed
earlier. Although specifically ascribing to them the role of subcontractor vis--vis MPEI as contractor, these Agreements are,
however, completely devoid of any pricing data or payment terms. Even the appended Schedules supposedly containing
prices of goods and services are shorn of any price data. Again, as mentioned earlier, based on the terms of their particular
Agreements, neither Election.com nor ePLDT -- with MPEI -- is jointly and severally liable to Comelec.
It is difficult to imagine how these bare Agreements -- especially the first two -- could be implemented in practice; and
how a dispute between the parties or a claim by Comelec against them, for instance, could be resolved without lengthy and
debilitating litigations. Absent any clear-cut statement as to the exact nature and scope of the parties respective
undertakings, commitments, deliverables and covenants, one party or another can easily dodge its obligation and deny or
contest its liability under the Agreement; or claim that it is the other party that should have delivered but failed to.
Likewise, in the absence of definite indicators as to the amount of investments to be contributed by each party,
disbursements for expenses, the parties respective shares in the profits and the like, it seems to the Court that this situation
could readily give rise to all kinds of misunderstandings and disagreements over money matters.
Under such a scenario, it will be extremely difficult for Comelec to enforce the supposed joint and several liabilities of the
members of the consortium. The Court is not even mentioning the possibility of a situation arising from a failure of WeSolv
and MPEI to agree on the scope, the terms and the conditions for the supply of the products and services under the
Agreement. In that situation, by virtue of paragraph 6 of its MOA, WeSolv would perforce cease to be bound by its
obligations -- including its joint and solidary liability with MPEI under the MOA -- and could forthwith disengage from the
project. Effectively, WeSolv could at any time unilaterally exit from its MOA with MPEI by simply failing to agree. Where
would that outcome leave MPEI and Comelec?
To the Court, this strange and beguiling arrangement of MPEI with the other companies does not qualify them to be
treated as a consortium or joint venture, at least of the type that government agencies like the Comelec should be dealing
with. With more reason is it unable to agree to the proposal to evaluate the members of MPC on a collective basis.
In any event, the MPC members claim to be a joint venture/consortium; and respondents have consistently been arguing

that the IRR for RA 6957, as amended, should be applied to the instant case in order to allow a collective evaluation of
consortium members. Surprisingly, considering these facts, respondents have not deemed it necessary for MPC members to
comply with Section 5.4 (a) (iii) of the IRR for RA 6957 as amended.
According to the aforementioned provision, if the project proponent is a joint venture or consortium, the members or
participants thereof are required to submit a sworn statement that, if awarded the contract, they shall bind themselves to be
jointly, severally and solidarily liable for the project proponents obligations thereunder. This provision was supposed to mirror
Section 5 of RA 6957, as amended, which states: In all cases, a consortium that participates in a bid must present proof that
the members of the consortium have bound themselves jointly and severally to assume responsibility for any project. The
withdrawal of any member of the consortium prior to the implementation of the project could be a ground for the cancellation
of the contract.
The Court has certainly not seen any joint and several undertaking by the MPC members that even approximates the
tenor of that which is described above. We fail to see why respondents should invoke the IRR if it is for their benefit, but
refuse to comply with it otherwise.

B.
DOST Technical Tests Flunked by the
Automated Counting Machines

Let us now move to the second subtopic, which deals with the substantive issue: the ACMs failure to pass the tests of
the Department of Science and Technology (DOST).
After respondent consortium and the other bidder, TIM, had submitted their respective bids on March 10, 2003, the
Comelecs BAC -- through its Technical Working Group (TWG) and the DOST -- evaluated their technical
proposals. Requirements that were highly technical in nature and that required the use of certain equipment in the evaluation
process were referred to the DOST for testing. The Department reported thus:

TEST RESULTS MATRIX[47]

[Technical Evaluation of Automated Counting Machine]
KEY REQUIREMENTS

MEGA-PACIFIC
CONSORTIUM

[QUESTIONS]

YES
1.

NO

TOTAL INFORMATION
MANAGEMENT

YES

Does the machine have an

accuracy rating of at least
99.995 percent
At COLD
condition

environmental

At NORMAL
environmental

conditions

At HARSH environmental
conditions

2.

NO

Accurately records and

reports the date and time of

the start and end of counting

of ballots per precinct?
3.

4.

Prints election returns

without any loss of date
during generation of such
reports?

Uninterruptible back-up
power system, that will
engage immediately to allow
operation of at least 10
minutes after outage, power
surge or abnormal electrical
occurrences?

5.

Machine reads two-sided

ballots in one pass?

Note: This
particular
requirement needs
further verification

6.

Machine can detect

previously counted ballots
and prevent previously
counted ballots from being
counted more than once?

7.

Stores results of counted

votes by precinct in external
(removable) storage device?

Note: This
particular
requirement needs
further verification

8.

Data stored in external

media is encrypted?

9.

Physical key or similar

device allows, limits, or
restricts operation of the
machine?

Note: This
particular
requirement needs
further verification

10. CPU speed is at least

400mHz?

11. Port to allow use of dot-

Note: This
particular
requirement needs
further verification

matrix printers?

12. Generates printouts of the

election returns in a format
specified by the COMELEC?
Generates printouts

In format specified by
COMELEC

13. Prints election returns

without any loss of data
during generation of such
report?

14. Generates an audit trail of

the counting machine, both
hard copy and soft copy?

Hard copy

Soft copy

Note: This
particular
requirement needs
further verification

15. Does the City/Municipal

Canvassing System
consolidate results from all
precincts within it using the
encrypted soft copy of the
data generated by the
counting machine and stored
on the removable data
storage device?
16. Does the City/Municipal
Canvassing System
consolidate results from all
precincts within it using the
encrypted soft copy of the

Note: This
particular
requirement needs
further verification

Note: This
particular
requirement needs

Note: This
particular
requirement needs

data generated by the

counting machine and
transmitted through an
electronic transmission
media?
17. Does the system output a
Zero City/Municipal Canvass
Report, which is printed on
election day prior to the
conduct of the actual
canvass operation, that
shows that all totals for all
the votes for all the
candidates and other
information, are indeed zero
or null?

18. Does the system consolidate

results from all precincts in
the city/municipality using the
data storage device coming
from the counting machine?

further verification

further verification

Note: This
particular
requirement needs
further verification

Note: This
particular
requirement needs
further verification

19. Is the machine 100%

accurate?

20. Is the Program able to detect

previously downloaded
precinct results and prevent
these from being inputted
again into the System?

21. The System is able to print

the specified reports and the
audit trail without any loss of
data during generation of the
above-mentioned reports?

Note: This
particular
requirement needs
further verification

Note: This
particular
requirement needs
further verification

Prints specified reports

Audit Trail

Note: This
particular
requirement needs

further verification

22. Can the result of the

city/municipal consolidation
be stored in a data storage
device?

23. Does the system consolidate

results from all precincts in
the provincial/district/
national using the data
storage device from different
levels of consolidation?
24. Is the system 100%
accurate?

Note: This
particular
requirement needs
further verification

Note: This
particular
requirement needs
further verification

Note: This
particular
requirement needs
further verification

25. Is the Program able to detect

previously downloaded
precinct results and prevent
these from being inputted
again into the System?

Note: This
particular
requirement needs
further verification

26. The System is able to print

the specified reports and the
audit trail without any loss of
data during generation of the
abovementioned reports?
Prints specified reports
Audit Trail

Note: This
particular
requirement needs

further verification

27. Can the results of the

provincial/district/national
consolidation be stored in a
data storage device?

Note: This
particular
requirement needs
further verification

According to respondents, it was only after the TWG and the DOST had conducted their separate tests and submitted
their respective reports that the BAC, on the basis of these reports formulated its comments/recommendations on the bids of
the consortium and TIM.
The BAC, in its Report dated April 21, 2003, recommended that the Phase II project involving the acquisition of
automated counting machines be awarded to MPEI. It said:
After incisive analysis of the technical reports of the DOST and the Technical Working Group for Phase II Automated
Counting Machine, the BAC considers adaptability to advances in modern technology to ensure an effective and efficient
method, as well as the security and integrity of the system.
The results of the evaluation conducted by the TWG and that of the DOST (14 April 2003 report), would show the apparent
advantage of Mega-Pacific over the other competitor, TIM.
The BAC further noted that both Mega-Pacific and TIM obtained some failed marks in the technical evaluation. In general,
the failed marks of Total Information Management as enumerated above affect the counting machine itself which are material
in nature, constituting non-compliance to the RFP. On the other hand, the failed marks of Mega-Pacific are mere formalities
on certain documentary requirements which the BAC may waive as clearly indicated in the Invitation to Bid.
In the DOST test, TIM obtained 12 failed marks and mostly attributed to the counting machine itself as stated earlier. These
are requirements of the RFP and therefore the BAC cannot disregard the same.
Mega-Pacific failed in 8 items however these are mostly on the software which can be corrected by reprogramming the
software and therefore can be readily corrected.
The BAC verbally inquired from DOST on the status of the retest of the counting machines of the TIM and was informed that
the report will be forthcoming after the holy week. The BAC was informed that the retest is on a different parameters theyre
being two different machines being tested. One purposely to test if previously read ballots will be read again and the other for
the other features such as two sided ballots.
The said machine and the software therefore may not be considered the same machine and program as submitted in the
Technical proposal and therefore may be considered an enhancement of the original proposal.
Advance information relayed to the BAC as of 1:40 PM of 15 April 2003 by Executive Director Ronaldo T. Viloria of DOST is
that the result of the test in the two counting machines of TIM contains substantial errors that may lead to the failure of these
machines based on the specific items of the RFP that DOST has to certify.

OPENING OF FINANCIAL BIDS

The BAC on 15 April 2003, after notifying the concerned bidders opened the financial bids in their presence and the results
were as follows:
Mega-Pacific:
Option 1 Outright purchase: Bid Price of Php1,248,949,088.00

Option 2 Lease option:

70% Down payment of cost of hardware or Php642,755,757.07
Remainder payable over 50 months or a total of Php642,755,757.07
Discount rate of 15% p.a. or 1.2532% per month.
Total Number of Automated Counting Machine 1,769 ACMs (Nationwide)
TIM:
Total Bid Price Php1,297,860,560.00
Total Number of Automated Counting Machine 2,272 ACMs (Mindanao and NCR only)
Premises considered, it appears that the bid of Mega Pacific is the lowest calculated responsive bid, and therefore, the Bids
and Awards Committee (BAC) recommends that the Phase II project re Automated Counting Machine be awarded to Mega
Pacific eSolutions, Inc.[48]
The BAC, however, also stated on page 4 of its Report: Based on the 14 April 2003 report (Table 6) of the DOST, it
appears that both Mega-Pacific and TIM (Total Information Management Corporation) failed to meet some of the
requirements. Below is a comparative presentation of the requirements wherein Mega-Pacific or TIM or both of them failed: x
x x. What followed was a list of key requirements, referring to technical requirements, and an indication of which of the two
bidders had failed to meet them.

Failure to Meet the

Required Accuracy Rating

The first of the key requirements was that the counting machines were to have an accuracy rating of at least 99.9995
percent. The BAC Report indicates that both Mega Pacific and TIM failed to meet this standard.
The key requirement of accuracy rating happens to be part and parcel of the Comelecs Request for Proposal
(RFP). The RFP, on page 26, even states that the ballot counting machines and ballot counting software must have an
accuracy rating of 99.9995% (not merely 99.995%) or better as certified by a reliable independent testing agency.
When questioned on this matter during the Oral Argument, Commissioner Borra tried to wash his hands by claiming that
the required accuracy rating of 99.9995 percent had been set by a private sector group in tandem with Comelec. He added
that the Commission had merely adopted the accuracy rating as part of the groups recommended bid requirements, which it
had not bothered to amend even after being advised by DOST that such standard was unachievable. This excuse, however,
does not in any way lessen Comelecs responsibility to adhere to its own published bidding rules, as well as to see to it that
the consortium indeed meets the accuracy standard. Whichever accuracy rating is the right standard -- whether 99.995 or
99.9995 percent -- the fact remains that the machines of the so-called consortium failed to even reach the lesser of the
two. On this basis alone, it ought to have been disqualified and its bid rejected outright.
At this point, the Court stresses that the essence of public bidding is violated by the practice of requiring very high
standards or unrealistic specifications that cannot be met -- like the 99.9995 percent accuracy rating in this case -- only to
water them down after the bid has been award. Such scheme, which discourages the entry of prospective bona fide bidders,
is in fact a sure indication of fraud in the bidding, designed to eliminate fair competition. Certainly, if no bidder meets the
mandatory requirements, standards or specifications, then no award should be made and a failed bidding declared.

Failure of Software to Detect

Previously Downloaded Data

Furthermore, on page 6 of the BAC Report, it appears that the consortium as well as TIM failed to meet another key
requirement -- for the counting machines software program to be able to detect previously downloaded precinct results
and to prevent these from being entered again into the counting machine. This same deficiency on the part of both
bidders reappears on page 7 of the BAC Report, as a result of the recurrence of their failure to meet the said key
requirement.

That the ability to detect previously downloaded data at different canvassing or consolidation levels is deemed of utmost
importance can be seen from the fact that it is repeated three times in the RFP. On page 30 thereof, we find the requirement
that the city/municipal canvassing system software must be able to detect previously downloaded precinct results and prevent
these from being inputted again into the system. Again, on page 32 of the RFP, we read that
the provincial/district canvassing system software must be able to detect previously downloaded city/municipal results and
prevent these from being inputted again into the system. And once more, on page 35 of the RFP, we find the requirement
that the national canvassing system software must be able to detect previously downloaded provincial/district results and
prevent these from being inputted again into the system.
Once again, though, Comelec chose to ignore this crucial deficiency, which should have been a cause for the gravest
concern. Come May 2004, unscrupulous persons may take advantage of and exploit such deficiency by repeatedly
downloading and feeding into the computers results favorable to a particular candidate or candidates. We are thus
confronted with the grim prospect of election fraud on a massive scale by means of just a few key strokes. The
marvels and woes of the electronic age!

Inability to Print
the Audit Trail

But that grim prospect is not all. The BAC Report, on pages 6 and 7, indicate that the ACMs of both bidders
were unable to print the audit trail without any loss of data. In the case of MPC, the audit trail system was not yet
incorporated into its ACMs.
This particular deficiency is significant, not only to this bidding but to the cause of free and credible elections. The
purpose of requiring audit trails is to enable Comelec to trace and verify the identities of the ACM operators responsible for
data entry and downloading, as well as the times when the various data were downloaded into the canvassing system, in
order to forestall fraud and to identify the perpetrators.
Thus, the RFP on page 27 states that the ballot counting machines and ballot counting software must print an audit trail
of all machine operations for documentation and verification purposes. Furthermore, the audit trail must be stored on the
internal storage device and be available on demand for future printing and verifying. On pages 30-31, the RFP also requires
that thecity/municipal canvassing system software be able to print an audit trail of the canvassing operations, including
therein such data as the date and time the canvassing program was started, the log-in of the authorized users (the identity of
the machine operators), the date and time the canvass data were downloaded into the canvassing system, and so on and so
forth. On page 33 of the RFP, we find the same audit trail requirement with respect to the provincial/district canvassing
system software; and again on pages 35-36 thereof, the same audit trail requirement with respect to the national canvassing
system software.
That this requirement for printing audit trails is not to be lightly brushed aside by the BAC or Comelec itself as a mere
formality or technicality can be readily gleaned from the provisions of Section 7 of RA 8436, which authorizes the Commission
to use an automated system for elections.
The said provision which respondents have quoted several times, provides that ACMs are to possess certain features
divided into two classes: those that the statute itself considersmandatory and other features or capabilities that the law deems
optional. Among those considered mandatory are provisions for audit trails! Section 7 reads as follows: The
System shallcontain the following features: (a) use of appropriate ballots; (b) stand-alone machine which can count votes
and an automated system which can consolidate the results immediately; (c) with provisions for audit trails; (d) minimum
human intervention; and (e) adequate safeguard/security measures. (Italics and emphases supplied.)
In brief, respondents cannot deny that the provision requiring audit trails is indeed mandatory, considering the wording of
Section 7 of RA 8436. Neither can Respondent Comelec deny that it has relied on the BAC Report, which indicates that the
machines or the software was deficient in that respect. And yet, the Commission simply disregarded this shortcoming and
awarded the Contract to private respondent, thereby violating the very law it was supposed to implement.

C.
Inadequacy of Post Facto
Remedial Measures

Respondents argue that the deficiencies relating to the detection of previously downloaded data, as well as provisions
for audit trails, are mere shortcomings or minor deficiencies in software or programming, which can be rectified. Perhaps
Comelec simply relied upon the BAC Report, which states on page 8 thereof that Mega Pacific failed in 8 items[;] however
these are mostly on the software which can be corrected by re-programming x x x and therefore can be readily corrected.
The undersigned ponentes questions, some of which were addressed to Commissioner Borra during the Oral Argument,
remain unanswered to this day. First of all, who made the determination that the eight fail marks of Mega Pacific were on
account of the software -- was it DOST or TWG? How can we be sure these failures were not the results of machine
defects? How was it determined that the software could actually be re-programmed and thereby rectified? Did a qualif ied
technical expert read and analyze the source code [49] for the programs and conclude that these could be saved
and remedied? (Such determination cannot be done by any other means save by the examination and analysis of the source
code.)
Who was this qualified technical expert? When did he carry out the study? Did he prepare a written report on his
findings? Or did the Comelec just make a wild guess? It does not follow that all defects in software programs can be rectified,
and the programs saved. In the information technology sector, it is common knowledge that there are many badly written
programs, with significant programming errors written into them; hence it does not make economic sense to try to correct the
programs; instead, programmers simply abandon them and just start from scratch. Theres no telling if any of these programs
is unrectifiable, unless a qualified programmer reads the source code.
And if indeed a qualified expert reviewed the source code, did he also determine how much work would be needed to
rectify the programs? And how much time and money would be spent for that effort? Who would carry out the work? After
the rectification process, who would ascertain and how would it be ascertained that the programs have indeed been properly
rectified, and that they would work properly thereafter? And of course, the most important question to ask: could the
rectification be done in time for the elections in 2004?
Clearly, none of the respondents bothered to think the matter through. Comelec simply took the word of the BAC as
gospel truth, without even bothering to inquire from DOST whether it was true that the deficiencies noted could possibly be
remedied by re-programming the software. Apparently, Comelec did not care about the software, but focused only on
purchasing the machines.
What really adds to the Courts dismay is the admission made by Commissioner Borra during the Oral Argument that the
software currently being used by Comelec was merely the demo version, inasmuch as the final version that would actually
be used in the elections was still being developed and had not yet been finalized.
It is not clear when the final version of the software would be ready for testing and deployment. It seems to the
Court that Comelec is just keeping its fingers crossed and hoping the final product would work. Is there a Plan B in case it
does not? Who knows? But all these software programs are part and parcel of the bidding and the Contract awarded to the
Consortium. Why is it that the machines are already being brought in and paid for, when there is as yet no way of knowing if
the final version of the software would be able to run them properly, as well as canvass and consolidate the results in the
manner required?
The counting machines, as well as the canvassing system, will never work properly without the correct software
programs. There is an old adage that is still valid to this day: Garbage in, garbage out. No matter how powerful, advanced
and sophisticated the computers and the servers are, if the software being utilized is defective or has been compromised, the
results will be no better than garbage. And to think that what is at stake here is the 2004 national elections -- the very basis
of our democratic life.

Correction of Defects?

To their Memorandum, public respondents proudly appended 19 Certifications issued by DOST declaring that some 285
counting machines had been tested and had passed the acceptance testing conducted by the Department on October 8-18,
2003. Among those tested were some machines that had failed previous tests, but had undergone adjustments and thus
passed re-testing.
Unfortunately, the Certifications from DOST fail to divulge in what manner and by what standards or criteria the
condition, performance and/or readiness of the machines were re-evaluated and re-appraised and thereafter given the
passing mark. Apart from that fact, the remedial efforts of respondents were, not surprisingly, apparently focused again on

the machines -- the hardware. Nothing was said or done about the software -- the deficiencies as to detection and prevention
of downloading and entering previously downloaded data, as well as the capability to print an audit trail. No matter how many
times the machines were tested and re-tested, if nothing was done about the programming defects and deficiencies, the
same danger of massive electoral fraud remains. As anyone who has a modicum of knowledge of computers would say,
Thats elementary!
And only last December 5, 2003, an Inq7.net news report quoted the Comelec chair as saying that the new automated
poll system would be used nationwide in May 2004, even as the software for the system remained unfinished. It also
reported that a certain Titus Manuel of the Philippine Computer Society, which was helping Comelec test the hardware and
software, said that the software for the counting still had to be submitted on December 15, while the software for the
canvassing was due in early January.
Even as Comelec continues making payments for the ACMs, we keep asking ourselves: who is going to ensure that the
software would be tested and would work properly?
At any rate, the re-testing of the machines and/or the 100 percent testing of all machines (testing of every single unit)
would not serve to eradicate the grave abuse of discretion already committed by Comelec when it awarded the Contract on
April 15, 2003, despite the obvious and admitted flaws in the bidding process, the failure of the winning bidder to qualify, and
the inability of the ACMs and the intended software to meet the bid requirements and rules.

Comelecs Latest
Assurances Are
Unpersuasive

Even the latest pleadings filed by Comelec do not serve to allay our apprehensions. They merely affirm and compound
the serious violations of law and gravely abusive acts it has committed. Let us examine them.
The Resolution issued by this Court on December 9, 2003 required respondents to inform it as to the number of ACMs
delivered and paid for, as well as the total payment made to date for the purchase thereof. They were likewise instructed to
submit a certification from the DOST attesting to the number of ACMs tested, the number found to be defective; and whether
the reprogrammed software has been tested and found to have complied with the requirements under Republic Act No.
8436.[50]
In its Partial Compliance and Manifestation dated December 29, 2003, Comelec informed the Court that 1,991 ACMs
had already been delivered to the Commission as of that date. It further certified that it had already paid the supplier the sum
of P849,167,697.41, which corresponded to 1,973 ACM units that had passed the acceptance testing procedures conducted
by the MIRDC-DOST[51] and which had therefore been accepted by the poll body.
In the same submission, for the very first time, Comelec also disclosed to the Court the following:
The Automated Counting and Canvassing Project involves not only the manufacturing of the ACM hardware but also the
development of three (3) types of software, which are intended for use in the following:
1.

Evaluation of Technical Bids

2.

Testing and Acceptance Procedures

3.

Election Day Use.

Purchase of the First Type of

Software Without Evaluation

In other words, the first type of software was to be developed solely for the purpose of enabling the evaluation of the
bidders technical bid. Comelec explained thus: In addition to the presentation of the ACM hardware, the bidders were
required to develop a base software program that will enable the ACM to function properly. Since the software program
utilized during the evaluation of bids is not the actual software program to be employed on election day, there being two (2)
other types of software program that will still have to be developed and thoroughly tested prior to actual election day use,
defects in the base software that can be readily corrected by reprogramming are considered minor in nature, and may
therefore be waived.
In short, Comelec claims that it evaluated the bids and made the decision to award the Contract to the winning bidder
partly on the basis of the operation of the ACMs running a base software. That software was therefore nothing but a sample
or demo software, which would not be the actual one that would be used on election day. Keeping in mind that the Contract
involves the acquisition of not just the ACMs or the hardware, but also the software that would run them, it is now even
clearer that the Contract was awarded without Comelec having seen, much less evaluated, the final product -- the software
that would finally be utilized come election day. (Not even the near-final product, for that matter).
What then was the point of conducting the bidding, when the software that was the subject of the Contract was still to be
created and could conceivably undergo innumerable changes before being considered as being in final form? And that is not
all!

No Explanation for Lapses

in the Second Type of Software

The second phase, allegedly involving the second type of software, is simply denominated Testing and Acceptance
Procedures. As best as we can construe, Comelec is claiming that this second type of software is also to be developed and
delivered by the supplier in connection with the testing and acceptance phase of the acquisition process. The previous
pleadings, though -- including the DOST reports submitted to this Court -- have not heretofore mentioned any statement,
allegation or representation to the effect that a particular set of software was to be developed and/or delivered by the supplier
in connection with the testing and acceptance of delivered ACMs.
What the records do show is that the imported ACMs were subjected to the testing and acceptance process conducted
by the DOST. Since the initial batch delivered included a high percentage of machines that had failed the tests, Comelec
asked the DOST to conduct a 100 percent testing; that is, to test every single one of the ACMs delivered. Among the
machines tested on October 8 to 18, 2003, were some units that had failed previous tests but had subsequently been retested and had passed. To repeat, however, until now, there has never been any mention of a second set or type of software
pertaining to the testing and acceptance process.
In any event, apart from making that misplaced and uncorroborated claim, Comelec in the same submission also
professes (in response to the concerns expressed by this Court) that the reprogrammed software has been tested and
found to have complied with the requirements of RA 8436. It reasoned thus: Since the software program is an inherent
element in the automated counting system, the certification issued by the MIRDC-DOST that one thousand nine hundred
seventy-three (1,973) units passed the acceptance test procedures is an official recognition by the MIRDC-DOST that the
software component of the automated election system, which has been reprogrammed to comply with the provisions of
Republic Act No. 8436 as prescribed in the Ad Hoc Technical Evaluation Committees ACM Testing and Acceptance Manual,
has passed the MIRDC-DOST tests.
The facts do not support this sweeping statement of Comelec. A scrutiny of the MIRDC-DOST letter dated December
15, 2003,[52] which it relied upon, does not justify its grand conclusion. For claritys sake, we quote in full the lettercertification, as follows:
15 December 2003
HON. RESURRECCION Z. BORRA
Commissioner-in-Charge
Phase II, Modernization Project
Commission on Elections
Intramuros, Manila
Attention: Atty. Jose M. Tolentino, Jr.
Project Director
Dear Commissioner Borra:

We are pleased to submit 11 DOST Test Certifications representing 11 lots and covering 158 units of automated counting
machines (ACMs) that we have tested from 02-12 December 2003.
To date, we have tested all the 1,991 units of ACMs, broken down as follow: (sic)
1st batch - 30 units

4th batch - 438 units

2nd batch - 288 units

5th batch - 438 units

3rd batch - 414 units

6th batch - 383 units

It should be noted that a total of 18 units have failed the test. Out of these 18 units, only one (1) unit has failed the retest.
Thank you and we hope you will find everything in order.
Very truly yours,
ROLANDO T. VILORIA, CESO III
Executive Director cum
Chairman, DOST-Technical Evaluation Committee
Even a cursory glance at the foregoing letter shows that it is completely bereft of anything that would remotely support
Comelecs contention that the software component of the automated election system x x x has been reprogrammed to
comply with RA 8436, and has passed the MIRDC-DOST tests. There is no mention at all of any software
reprogramming. If the MIRDC-DOST had indeed undertaken the supposed reprogramming and the process turned out to be
successful, that agency would have proudly trumpeted its singular achievement.
How Comelec came to believe that such reprogramming had been undertaken is unclear. In any event, the Commission
is not forthright and candid with the factual details. If reprogramming has been done, who performed it and when? What
exactly did the process involve? How can we be assured that it was properly performed? Since the facts attendant to the
alleged reprogramming are still shrouded in mystery, the Court cannot give any weight to Comelecs bare allegations.
The fact that a total of 1,973 of the machines has ultimately passed the MIRDC-DOST tests does not by itself serve as
an endorsement of the soundness of the software program, much less as a proof that it has been reprogrammed. In the first
place, nothing on record shows that the tests and re-tests conducted on the machines were intended to address the serious
deficiencies noted earlier. As a matter of fact, the MIRDC-DOST letter does not even indicate what kinds of tests or re-tests
were conducted, their exact nature and scope, and the specific objectives thereof.[53] The absence of relevant supporting
documents, combined with the utter vagueness of the letter, certainly fails to inspire belief or to justify the expansive
confidence displayed by Comelec. In any event, it goes without saying that remedial measures such as the alleged
reprogramming cannot in any way mitigate the grave abuse of discretion already committed as early as April 15, 2003.

Rationale of Public Bidding Negated

by the Third Type of Software

Respondent Comelec tries to assuage this Courts anxiety in these words: The reprogrammed software that has already
passed the requirements of Republic Act No. 8436 during the MIRDC-DOST testing and acceptance procedures will require
further customization since the following additional elements, among other things, will have to be considered before the final
software can be used on election day: 1. Final Certified List of Candidates x x x 2. Project of Precincts x x x 3. Official Ballot
Design and Security Features x x x 4. Encryption, digital certificates and digital signatures x x x. The certified list of
candidates for national elective positions will be finalized on or before 23 January 2004 while the final list of projects of
precincts will be prepared also on the same date. Once all the above elements are incorporated in the software program, the
Test Certification Group created by the Ad Hoc Technical Evaluation Committee will conduct meticulous testing of the final
software before the same can be used on election day. In addition to the testing to be conducted by said Test Certification
Group, the Comelec will conduct mock elections in selected areas nationwide not only for purposes of public information but
also to further test the final election day program. Public respondent Comelec, therefore, requests that it be given up to 16
February 2004 to comply with this requirement.
The foregoing passage shows the imprudent approach adopted by Comelec in the bidding and acquisition process. The
Commission says that before the software can be utilized on election day, it will require customization through addition of
data -- like the list of candidates, project of precincts, and so on. And inasmuch as such data will become available only in
January 2004 anyway, there is therefore no perceived need on Comelecs part to rush the supplier into producing the final (or

near-final) version of the software before that time. In any case, Comelec argues that the software needed for the electoral
exercise can be continuously developed, tested, adjusted and perfected, practically all the way up to election day, at the
same time that the Commission is undertaking all the other distinct and diverse activities pertinent to the elections.
Given such a frame of mind, it is no wonder that Comelec paid little attention to the counting and canvassing software
during the entire bidding process, which took place in February-March 2003. Granted that the software was defective, could
not detect and prevent the re-use of previously downloaded data or produce the audit trail -- aside from its other shortcomings
-- nevertheless, all those deficiencies could still be corrected down the road. At any rate, the software used for bidding
purposes would not be the same one that will be used on election day, so why pay any attention to its defects? Or to the
Comelecs own bidding rules for that matter?
Clearly, such jumbled ratiocinations completely negate the rationale underlying the bidding process mandated by law.
At the very outset, the Court has explained that Comelec flagrantly violated the public policy on public biddings (1) by
allowing MPC/MPEI to participate in the bidding even though it was not qualified to do so; and (2) by eventually awarding the
Contract to MPC/MPEI. Now, with the latest explanation given by Comelec, it is clear that the Commission further desecrated
the law on public bidding by permitting the winning bidder to change and alter the subject of the Contract (the software), in
effect allowing a substantive amendment without public bidding.
This stance is contrary to settled jurisprudence requiring the strict application of pertinent rules, regulations and
guidelines for public bidding for the purpose of placing each bidder, actual or potential, on the same footing. The essence of
public bidding is, after all, an opportunity for fair competition, and a fair basis for the precise comparison of bids. In common
parlance, public bidding aims to level the playing field. That means each bidder must bid under the same conditions; and be
subject to the same guidelines, requirements and limitations, so that the best offer or lowest bid may be determined, all other
things being equal.
Thus, it is contrary to the very concept of public bidding to permit a variance between the conditions under which bids
are invited and those under which proposals are submitted and approved; or, as in this case, the conditions under which the
bid is won and those under which the awarded Contract will be complied with. The substantive amendment of the contract
bidded out, without any public bidding -- after the bidding process had been concluded -- is violative of the public policy on
public biddings, as well as the spirit and intent of RA 8436. The whole point in going through the public bidding exercise was
completely lost. The very rationale of public bidding was totally subverted by the Commission.
From another perspective, the Comelec approach also fails to make sense. Granted that, before election day, the
software would still have to be customized to each precinct, municipality, city, district, and so on, there still was nothing at all
to prevent Comelec from requiring prospective suppliers/bidders to produce, at the very start of the bidding process, the
next-to-final versions of the software (the best software the suppliers had) -- pre-tested and ready to be customized to the
final list of candidates and project of precincts, among others, and ready to be deployed thereafter. The satisfaction of such
requirement would probably have provided far better bases for evaluation and selection, as between suppliers, than the socalled demo software.
Respondents contend that the bidding suppliers counting machines were previously used in at least one political
exercise with no less than 20 million voters. If so, it stands to reason that the software used in that past electoral exercise
would probably still be available and, in all likelihood, could have been adopted for use in this instance. Paying for machines
and software of that category (already tried and proven in actual elections and ready to be adopted for use) would definitely
make more sense than paying the same hundreds of millions of pesos for demo software and empty promises of usable
programs in the future.
But there is still another gut-level reason why the approach taken by Comelec is reprehensible. It rides on the perilous
assumption that nothing would go wrong; and that, come election day, the Commission and the supplier would have
developed, adjusted and re-programmed the software to the point where the automated system could function as
envisioned. But what if such optimistic projection does not materialize? What if, despite all their herculean efforts, the
software now being hurriedly developed and tested for the automated system performs dismally and inaccurately or, worse, is
hacked and/or manipulated?[54] What then will we do with all the machines and defective software already paid for in the
amount of P849 million of our tax money? Even more important, what will happen to our country in case of failure of the
automation?

The Court cannot grant the plea of Comelec that it be given until February 16, 2004 to be able to submit a certification
relative to the additional elements of the software that will be customized, because for us to do so would unnecessarily delay
the resolution of this case and would just give the poll body an unwarranted excuse to postpone the 2004 elections. On the
other hand, because such certification will not cure the gravely abusive actions complained of by petitioners, it will be utterly
useless.
Is this Court being overly pessimistic and perhaps even engaging in speculation? Hardly. Rather, the Court holds that
Comelec should not have gambled on the unrealistic optimism that the suppliers software development efforts would turn out
well. The Commission should have adopted a much more prudent and judicious approach to ensure the delivery of tried and
tested software, and readied alternative courses of action in case of failure. Considering that the nations future is at stake
here, it should have done no less.

Epilogue

Once again, the Court finds itself at the crossroads of our nations history. At stake in this controversy is not just the
business of a computer supplier, or a questionable proclamation by Comelec of one or more public officials. Neither is it
about whether this country should switch from the manual to the automated system of counting and canvassing votes. At its
core is the ability and capacity of the Commission on Elections to perform properly, legally and prudently its legal mandate to
implement the transition from manual to automated elections.
Unfortunately, Comelec has failed to measure up to this historic task. As stated at the start of this Decision, Comelec
has not merely gravely abused its discretion in awarding the Contract for the automation of the counting and canvassing of
the ballots. It has also put at grave risk the holding of credible and peaceful elections by shoddily accepting electronic
hardware and software that admittedly failed to pass legally mandated technical requirements. Inadequate as they are, the
remedies it proffers post facto do not cure the grave abuse of discretion it already committed (1) on April 15, 2003, when it
illegally made the award; and (2) sometime in May 2003 when it executed the Contract for the purchase of defective
machines and non-existent software from a non-eligible bidder.
For these reasons, the Court finds it totally unacceptable and unconscionable to place its imprimatur on this void and
illegal transaction that seriously endangers the breakdown of our electoral system. For this Court to cop-out and to close its
eyes to these illegal transactions, while convenient, would be to abandon its constitutional duty of safeguarding public
interest.
As a necessary consequence of such nullity and illegality, the purchase of the machines and all appurtenances thereto
including the still-to-be-produced (or in Comelecs words, to be reprogrammed) software, as well as all the payments made
therefor, have no basis whatsoever in law. The public funds expended pursuant to the void Resolution and Contract must
therefore be recovered from the payees and/or from the persons who made possible the illegal disbursements, without
prejudice to possible criminal prosecutions against them.
Furthermore, Comelec and its officials concerned must bear full responsibility for the failed bidding and award, and held
accountable for the electoral mess wrought by their grave abuse of discretion in the performance of their functions. The
State, of course, is not bound by the mistakes and illegalities of its agents and servants.
True, our country needs to transcend our slow, manual and archaic electoral process. But before it can do so, it must
first have a diligent and competent electoral agency that can properly and prudently implement a well-conceived automated
election system.
At bottom, before the country can hope to have a speedy and fraud-free automated election, it must first be able to
procure the proper computerized hardware and software legally, based on a transparent and valid system of public
bidding. As in any democratic system, the ultimate goal of automating elections must be achieved by a legal, valid and
above-board process of acquiring the necessary tools and skills therefor. Though the Philippines needs an automated
electoral process, it cannot accept just any system shoved into its bosom through improper and illegal methods. As the
saying goes, the end never justifies the means. Penumbral contracting will not produce enlightened results.
WHEREFORE, the Petition is GRANTED. The Court hereby declares NULL and VOID Comelec Resolution No. 6074
awarding the contract for Phase II of the CAES to Mega Pacific Consortium (MPC). Also declared null and void is the
subject Contract executed between Comelec and Mega Pacific eSolutions (MPEI).[55] Comelec is further ORDERED to
refrain from implementing any other contract or agreement entered into with regard to this project.

Let a copy of this Decision be furnished the Office of the Ombudsman which shall determine the criminal liability, if any,
of the public officials (and conspiring private individuals, if any) involved in the subject Resolution and Contract. Let the Office
of the Solicitor General also take measures to protect the government and vindicate public interest from the ill effects of the
illegal disbursements of public funds made by reason of the void Resolution and Contract.
SO ORDERED.
Carpio, Austria-Martinez, Carpio-Morales, and Callejo, Sr., JJ., concur.
Davide, Jr., C.J., Vitug, and Ynares-Santiago, JJ., see separate opinion.
Puno, J., concur, and also joins the opinion of J. Ynares-Santiago.
Quisumbing, J., in the result.
Sandoval-Gutierrez, J., see concurring opinion.
Corona, and Azcuna, JJ., joins the dissent of J. Tinga.
Tinga, J., pls. see dissenting opinion.

[1] Republic v. Cocofed, 372 SCRA 462, 493, December 14, 2001.
[2] Taada v. Angara, 272 SCRA 18, 79, May 2, 1997.
[3] Francisco v. House of Representatives, GR No. 160261 and consolidated cases, November 10, 2003, per Morales, J.
[4] Rollo, Vol. I, pp. 3-48. While petitioners labeled their pleading as one for prohibition and mandamus, its allegations qualify
it also as one for certiorari.
[5] An act authorizing the Commission on Elections to conduct a nationwide demonstration of a computerized election system
and pilot-test it in the March 1996 elections in the Autonomous Region in Muslim Mindanao (ARMM) and for other
purposes.
[6] An act authorizing the Commission on Elections to use an automated election system in the May 11, 1998 national or local
elections and in subsequent national and local electoral exercises, providing funds therefor and for other purposes.
[7] Section 6 of RA 8436 provides [i]f in spite of its diligent efforts to implement this mandate in the exercise of this authority,
it becomes evident by February 9, 1998 that the Commission cannot fully implement the automated election system
for national positions in the May 11, 1998 elections, the elections for both national and local positions shall be done
manually except in the Autonomous Region in Muslim Mindanao (ARMM) where the automated election system shall
be used for all positions.
[8] Loong v. Comelec, 365 Phil. 386, April 14, 1999; see also Panganiban, Leadership by Example, 1999 ed., pp. 201-249.
[9] Annex 7 of the Comment of Private Respondents MPC and MPEI, rollo, Vol. II, p. 638.
[10] Annex 8 of the Comment of Private Respondents MPC and MPEI, rollo, Vol. II, pp. 641-642.
[11] Annex G of the Petition, Request for Proposal, p. 12; rollo, Vol. I, p. 71.
[12] Id., pp. 21-23 & 80-82.
[13] According to Public Respondent Comelecs Memorandum prepared by the OSG, p. 8; rollo, Vol. IV, p. 2413.
[14] Photocopy appended as Annex B of the Petition; rollo, Vol. I, pp. 52-53.
[15] Photocopy appended as Annex C of the Petition; rollo, Vol. I, pp. 54-55.
[16] The case was deemed submitted for decision on November 5, 2003, upon this Courts receipt of Private Respondent
MPC/MPEIs Memorandum, which was signed by Attys. Alfredo V. Lazaro Jr., Juanito I. Velasco Jr. and Ma.
Concepcion V. Murillo of the Lazaro Law Firm. On October 27, 2003, the Court received petitioners Memorandum,
which was signed by Atty. Alvin Jose B. Felizardo of Pastelero Law Office, and Public Respondent Comelecs

Memorandum, signed by Comelec Comm. Florentino A. Tuason Jr. Apart from these, the Office of the Solicitor
General (OSG) filed another Memorandum on behalf of Comelec, also on October 27, 2003, signed by Asst. Sol.
Gen. Carlos N. Ortega, Asst. Sol. Gen. Renan E. Ramos, Sol. Jane E. Yu and Asso. Sol. Catherine Joy R. Mallari,
with a note that Sol. Gen. Alfredo L. Benipayo inhibited himself. The writing of the Decision in this case was initially
raffled to Justice Dante O. Tinga. However, during the Courts deliberations, the present ponentes then Dissenting
Opinion to the draft report of Justice Tinga was upheld by the majority. Hence, the erstwhile Dissent was rewritten
into this full ponencia.
[17] Page 11; rollo, Vol. IV, p. 2390. During the Oral Argument on October 7, 2003, the Court limited the issues to the
following: (1) locus standi of petitioners; (2) prematurity of the Petition because of non-exhaustion of administrative
remedies for failure to avail of protest mechanisms; and (3) validity of the award and the Contract being challenged in
the Petition.
[18] Chavez v. Presidential Commission on Good Government, 360 Phil. 133, December 9, 1998, per Panganiban, J.
[19] Kilosbayan, Inc. v. Morato, 320 Phil. 171, November 16, 1995, per Mendoza, J.
[20] Tatad v. Secretary of the Department of Energy, 346 Phil. 321, November 5, 1997, per Puno, J.
[21] Del Mar v. Philippine Amusement and Gaming Corporation, 346 SCRA 485, November 29, 2000, per Puno, J.
[22] Kilosbayan, Inc. v. Morato, supra.
[23] Dumlao v. Comelec, 95 SCRA 392, January 22, 1980, per Melencio-Herrera, J.
[24] Philconsa v. Mathay, 124 Phil. 890, October 4, 1966, per Reyes J.B.L., J.
[25] Respondent Comelecs Memorandum, pp. 50-51.
[26] The law obliges no one to perform the impossible.
[27] See private respondents Memorandum, p. 60.
[28] Photocopy appended as Annex B of the petition.
[29] 334 Phil. 146, January 10, 1997.
[30] Id., p. 153, per Torres Jr., J.
[31] Although by its Resolution 6074, Comelec awarded the bid to MPC, the actual Contract was entered into by Comelec
with MPEI. The Contract did not indicate an exact date of execution (except that it was allegedly done on the ____
day of May,) but it was apparently notarized on June 30, 2003.
[32] In connection with this, public respondents, in their Memorandum made reference to the Implementing Rules and
Regulations of RA 6957 as amended by RA 7718 (the Build-Operate-Transfer Law), and considered said IRR as being
applicable to the instant case on a suppletory basis, pending the promulgation of implementing rules for RA 9184 (the
Government Procurement Act). For our purposes, it is well worth noting that Sec. 5.4 of the IRR for RA 6957 as
amended, speaks of prequalification requirements for project proponents, and in sub-section (b)(i), it provides that, for
purposes of evaluating a joint venture or consortium, it shall submit as part of its prequalification statement a business
plan which shall among others identify its members and its contractor(s), and the description of the respective roles said
members and contractors shall play or undertake in the project. If undecided on a specific contractor, the proponent
may submit a short list of contractors from among which it will select the final contractor. Short listed contractors are
required to submit a statement indicating willingness to participate in the project and capacity to undertake the
requirements of the project. The business plan shall disclose which of the members of the joint venture/consortium
shall be the lead member, the financing arm, and/or facility operator(s), and the contractor(s). In other words, since
public respondents argue that the IRR of RA 6957 as amended would be suppletorily applicable to this bidding, they
could not have been unaware of the requirement under Sec. 5.4 (b)(i) thereof, in respect of submission of the requisite
business plan by a joint venture or consortium participating in a bidding.

[33] Now, what would prevent an enterprising individual from obtaining copies of the Articles of Incorporation and financial
statements of, let us say, San Miguel Corporation and Ayala Corporation from the SEC, and using these to support
ones claim that these two giant conglomerates have formed a consortium with ones own penny-ante company for
the purpose of bidding for a multi-billion peso contract? As far as Comelec is concerned, the answer seems to be:
Nothing.
[34] TSN, October 7, 2003, p. 104.
[35] Ibid.
[36] Id., pp. 104-105.
[37] Id., pp. 103-108.
[38] Id., pp. 108-114.
[39] Id., pp. 142-145.
[40] On pp. 42-43 of the Memorandum of public respondents, filed with this Court on October 27, 2003, Comm. Tuason
himself signed this pleading in his capacity as counsel of all the public respondents.
[41] Copies of these four agreements were belatedly submitted to this Court by MPEI through a Manifestation with Profuse
Apologies filed on October 9, 2003.
[42] Copies of the four separate bilateral agreements were submitted to the Court last October 9, 2003.
[43] The date was carelessly stated as ____ May, 2003.
[44] At p. 38.
[45] During the Oral Argument, counsel for public respondents admitted that Comelec was aware that not all the members of
the consortium had agreed to be jointly and solidarily liable with MPEI.
[46] 232 SCRA 110, 144, May 5, 1994, per Davide Jr., J. (now CJ).
[47] Culled from table 6, DOST Report; rollo, Vol. II, pp. 1059-1072.
[48] Annex I of the Petition, Vol. I, pp. 116-118.
[49] Source code is the program instructions in their original form. Initially, a programmer writes a computer program in a
particular programming language. This form of the program is called the source program, or more generically, source
code. To execute the program, however, the programmer must translate it into machine language, the language that
the computer understands. Source code is the only format that is readable by humans. When you purchase
programs, you usually receive them in their machine-language format. This means that you can execute them
directly, but you cannot read or modify them. Some software manufacturers provide source code, but this is useful
only if you are an experienced programmer.
[50] The key passages of the Courts Resolution of December 9, 2003 were cited and reproduced verbatim in the Comelecs
Partial Compliance and Manifestation.
[51] Metals Industry Research and Development Center (MIRDC) of the Department of Science & Technology (DOST).
[52] Photocopy of the MIRDC-DOST letter of Dec. 15, 2003 is attached as Annex A to Respondent Comelecs Partial
Compliance and Manifestation. However, the 11 Test Certifications of the DOST (covering 11 lots or 158 ACMs)
which were purportedly attached to this letter, have not been reproduced and submitted to the Court, for reasons
known only to respondents.
[53] For example, one can conduct tests to see if certain machines will tip over and fall on their sides when accidentally

bumped, or if they have a tendency to collapse under their own weight. A less frivolous example might be that of
conducting the same tests, but lowering the bar or passing mark.
[54] In the December 15, 2003 issue of the Philippine Daily Inquirer is an item titled Digital dagdag-bawas: a nonpartisan
issue by Dean Jorge Bocobo, from which the following passages appear:
The Commission on Elections will use automated counting machines to tally paper ballots in the May elections, and a
telecommunications network to transmit the results to headquarters, along with CDs of the data. Yet, with only five
months to go, the application software packages for that crucial democratic exercise--several hundred thousand lines
of obscure and opaque code--has not yet even been delivered in its final form, Comelec Chairman Benjamin Abalos
admitted last week.
My jaw dropped in amazement. Having built software for General Electric Co.'s medical systems business and military
aircraft engines division (in another lifetime), I have learned the hard and painful way that 90 percent of unintended
fatal problems with complex software lies in the last 10 percent of the code produced. From experience, I can assure
you now with metaphysical certainty that not even the people furiously writing that software know whether it will
actually work as intended on May 10, much less guarantee it. Simply put, the proposed software-hardware
combination has neither been tested completely nor verified to comply with specifications.
[55] Dated ____ May, 2003 but notarized on June 30, 2003.

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father and Natural Guardian, and Spouses FEDERICO
N. SALVACION, JR., and EVELINA E. SALVACION, petitioners, vs. CENTRAL BANK OF THE PHILIPPINES, CHINA
BANKING CORPORATION and GREG BARTELLI y NORTHCOTT, respondents.
TORRES, JR., J.:
In our predisposition to discover the original intent of a statute, courts become the unfeeling pillars of the status
quo. Little do we realize that statutes or even constitutions are bundles of compromises thrown our way by their
framers. Unless we exercise vigilance, the statute may already be out of tune and irrelevant to our day.
The petition is for declaratory relief. It prays for the following reliefs:
a.) Immediately upon the filing of this petition, an Order be issued restraining the respondents from applying and
enforcing Section 113 of Central Bank Circular No. 960;
b.) After hearing, judgment be rendered:
1.) Declaring the respective rights and duties of petitioners and respondents;
2.) Adjudging Section 113 of Central Bank Circular No. 960 as contrary to the provision of the
Constitution, hence void; because its provision that Foreign currency deposits shall be exempt from
attachment, garnishment, or any other order to process of any court, legislative body, government
agency or any administrative body whatsoever
i.) has taken away the right of petitioners to have the bank deposit of defendant Greg Bartelli y
Northcott garnished to satisfy the judgment rendered in petitioners favor in violation of substantive
due process guaranteed by the Constitution;
ii.) has given foreign currency depositors an undue favor or a class privilege in violation of the equal
protection clause of the Constitution;
iii.) has provided a safe haven for criminals like the herein respondent Greg Bartelli y Northcott since
criminals could escape civil liability for their wrongful acts by merely converting their money to a
foreign currency and depositing it in a foreign currency deposit account with an authorized bank.
The antecedents facts:
On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen Salvacion, then
12 years old to go with him to his apartment. Therein, Greg Bartelli detained Karen Salvacion for four days, or up to February
7, 1989 and was able to rape the child once on February 4, and three times each day on February 5, 6, and 7, 1989. On
February 7, 1989, after policemen and people living nearby, rescued Karen, Greg Bartelli was arrested and detained at the
Makati Municipal Jail. The policemen recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control No.
021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account
China Banking Corp., US $/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00) cash; 6.) Door Keys 6
pieces; 7.) Stuffed Doll (Teddy Bear) used in seducing the complainant.
On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed against Greg Bartelli, Criminal Case No. 801
for Serious Illegal Detention and Criminal Cases Nos. 802, 803, 804, and 805 for four (4) counts of Rape. On the same day,
petitioners filed with the Regional Trial Court of Makati Civil Case No. 89-3214 for damages with preliminary attachment
against Greg Bartelli. On February 24, 1989, the day there was a scheduled hearing for Bartellis petition for bail the latter
escaped from jail.

On February 28, 1989, the court granted the fiscals Urgent Ex-Parte Motion for the Issuance of Warrant of Arrest and
Hold Departure Order. Pending the arrest of the accused Greg Bartelli y Northcott, the criminal cases were archived in an
Order dated February 28, 1989.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated February 22, 1989 granting the application of
herein petitioners, for the issuance of the writ of preliminary attachment. After petitioners gave Bond No. JCL (4) 1981 by
FGU Insurance Corporation in the amount P100,000.00, a Writ of Preliminary Attachment was issued by the trial court on
February 28, 1989.
On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Garnishment on China Banking Corporation. In a
letter dated March 13, 1989 to the Deputy Sheriff of Makati, China Banking Corporation invoked Republic Act No. 1405 as its
answer to the notice of garnishment served on it. On March 15, 1989, Deputy Sheriff of Makati Armando de Guzman sent his
reply to China Banking Corporation saying that the garnishment did not violate the secrecy of bank deposits since the
disclosure is merely incidental to a garnishment properly and legally made by virtue of a court order which has placed the
subject deposits in custodia legis. In answer to this letter of the Deputy Sheriff of Makati, China Banking Corporation, in a
letter dated March 20, 1989, invoked Section 113 of Central Bank Circular No. 960 to the effect that the dollar deposits of
defendant Greg Bartelli are exempt from attachment, garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body, whatsoever.
This prompted the counsel for petitioners to make an inquiry with the Central Bank in a letter dated April 25, 1989 on
whether Section 113 of CB Circular No. 960 has any exception or whether said section has been repealed or amended since
said section has rendered nugatory the substantive right of the plaintiff to have the claim sought to be enforced by the civil
action secured by way of the writ of preliminary attachment as granted to the plaintiff under Rule 57 of the Revised Rules of
Court. The Central Bank responded as follows:
May 26, 1989
Ms. Erlinda S. Carolino
12 Pres. Osmea Avenue
South Admiral Village
Paranaque, Metro Manila
Dear Ms. Carolino:
This is in reply to your letter dated April 25, 1989 regarding your inquiry on Section 113, CB Circular No. 960 (1983).
The cited provision is absolute in application. It does not admit of any exception, nor has the same been repealed
nor amended.
The purpose of the law is to encourage dollar accounts within the countrys banking system which would help in the
development of the economy. There is no intention to render futile the basic rights of a person as was suggested in
your subject letter. The law may be harsh as some perceive it, but it is still the law. Compliance is, therefore,
enjoined.
Very truly yours,
(SGD) AGAPITO S. FAJARDO
Director[1]
Meanwhile, on April 10, 1989, the trial court granted petitioners motion for leave to serve summons by publication in the
Civil Case No. 89-3214 entitled Karen Salvacion. et al. vs. Greg Bartelli y Northcott. Summons with the complaint was
published in the Manila Times once a week for three consecutive weeks. Greg Bartelli failed to file his answer to the
complaint and was declared in default on August 7, 1989. After hearing the case ex-parte, the court rendered judgment in
favor of petitioners on March 29, 1990, the dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against defendant, ordering the latter:
1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as moral damages;
2. To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr., and Evelina E. Salvacion the amount
of P150,000.00 each or a total of P300,000.00 for both of them;
3. To pay plaintiffs exemplary damages of P100,000.00; and

4. To pay attorneys fees in an amount equivalent to 25% of the total amount of damages herein awarded;
5. To pay litigation expenses of P10,000.00; plus
6. Costs of the suit.
SO ORDERED.
The heinous acts of respondents Greg Bartelli which gave rise to the award were related in graphic detail by the trial
court in its decision as follows:
The defendant in this case was originally detained in the municipal jail of Makati but was able to escape therefrom
on February 24, 1989 as per report of the Jail Warden of Makati to the Presiding Judge, Honorable Manuel M.
Cosico of the Regional Trial Court of Makati, Branch 136, where he was charged with four counts of Rape and
Serious Illegal Detention (Crim. Cases Nos. 802 to 805). Accordingly, upon motion of plaintiffs, through counsel,
summons was served upon defendant by publication in the Manila Times, a newspaper of general circulation as
attested by the Advertising Manager of the Metro Media Times, Inc., the publisher of the said
newspaper. Defendant, however, failed to file his answer to the complaint despite the lapse of the period of sixty
(60) days from the last publication; hence, upon motion of the plaintiffs through counsel, defendant was declared in
default and plaintiffs were authorized to present their evidence ex parte.
In support of the complaint, plaintiffs presented as witness the minor Karen E. Salvacion, her father, Federico N.
Salacion, Jr., a certain Joseph Aguilar and a certain Liberato Mandulio, who gave the following testimony:
Karen took her first year high school in St. Marys Academy in Pasay City but has recently transferred to Arellano University
for her second year.
In the afternoon of February 4, 1989, Karen was at the Plaza Fair Makati Cinema Square, with her friend Edna Tangile
whiling away her free time. At about 3:30 p.m. while she was finishing her snack on a concrete bench in front of Plaza Fair,
an American approached her. She was then alone because Edna Tangile had already left, and she was about to go
home. (TSN, Aug. 15, 1989, pp. 2 to 5)
The American asked her name and introduced himself as Greg Bartelli. He sat beside her when he talked to her. He said he
was a Math teacher and told her that he has a sister who is a nurse in New York. His sister allegedly has a daughter who is
about Karens age and who was with him in his house along Kalayaan Avenue. (TSN, Aug. 15, 1989, pp. 4-5).
The American asked Karen what was her favorite subject and she told him its Pilipino. He then invited her to go with him to
his house where she could teach Pilipino to his niece. He even gave her a stuffed toy to persuade her to teach his
niece. (Id., pp.5-6)
They walked from Plaza Fair along Pasong Tamo, turning right to reach the defendants house along Kalayaan Avenue. (Id.,
p.6)
When they reached the apartment house, Karen notices that defendants alleged niece was not outside the house but
defendant told her maybe his niece was inside. When Karen did not see the alleged niece inside the house, defendant told
her maybe his niece was upstairs, and invited Karen to go upstairs. (Id., p. 7)
Upon entering the bedroom defendant suddenly locked the door. Karen became nervous because his niece was not
there. Defendant got a piece of cotton cord and tied Karens hands with it, and then he undressed her. Karen cried for help
but defendant strangled her. He took a packing tape and he covered her mouth with it and he circled it around her head. (Id.,
p. 7)
Then, defendant suddenly pushed Karen towards the bed which was just near the door. He tied her feet and hands spread
apart to the bed posts. He knelt in front of her and inserted his finger in her sex organ. She felt severe pain. She tried to
shout but no sound could come out because there were tapes on her mouth. When defendant withdrew his finger it was full
of blood and Karen felt more pain after the withdrawal of the finger. (Id., p.8)
He then got a Johnsons Baby Oil and he applied it to his sex organ as well as to her sex organ. After that he forced his sex
organ into her but he was not able to do so. While he was doing it, Karen found it difficult to breathe and she perspired a lot
while feeling severe pain. She merely presumed that he was able to insert his sex organ a little, because she could not
see. Karen could not recall how long the defendant was in that position. (Id., pp. 8-9)
After that, he stood up and went to the bathroom to wash. He also told Karen to take a shower and he untied her
hands. Karen could only hear the sound of the water while the defendant, she presumed, was in the bathroom washing his
sex organ. When she took a shower more blood came out from her. In the meantime, defendant changed the mattress
because it was full of blood. After the shower, Karen was allowed by defendant to sleep. She fell asleep because she got
tired crying. The incident happened at about 4:00 p.m. Karen had no way of determining the exact time because defendant

removed her watch. Defendant did not care to give her food before she went to sleep. Karen woke up at about 8:00 oclock
the following morning. (Id., pp. 9-10)
The following day, February 5, 1989, a Sunday, after breakfast of biscuit and coke at about 8:30 to 9:00 a.m. defendant
raped Karen while she was still bleeding. For lunch, they also took biscuit and coke. She was raped for the second time at
about 12:00 to 2:00 p.m. In the evening, they had rice for dinner which defendant had stored downstairs; it was he who
cooked the rice that is why it looks like lugaw. For the third time, Karen was raped again during the night. During those
three times defendant succeeded in inserting his sex organ but she could not say whether the organ was inserted wholly.
Karen did not see any firearm or any bladed weapon. The defendant did not tie her hands and feet nor put a tape on her
mouth anymore but she did not cry for help for fear that she might be killed; besides, all those windows and doors were
closed. And even if she shouted for help, nobody would hear her. She was so afraid that if somebody would hear her and
would be able to call a police, it was still possible that as she was still inside the house, defendant might kill her. Besides, the
defendant did not leave that Sunday, ruling out her chance to call for help. At nighttime he slept with her again. (TSN, Aug.
15, 1989, pp. 12-14)
On February 6, 1989, Monday, Karen was raped three times, once in the morning for thirty minutes after breakfast of
biscuits; again in the afternoon; and again in the evening. At first, Karen did not know that there was a window because
everything was covered by a carpet, until defendant opened the window for around fifteen minutes or less to let some air in,
and she found that the window was covered by styrofoam and plywood. After that, he again closed the window with a
hammer and he put the styrofoam, plywood, and carpet back. (Id., pp. 14-15)
That Monday evening, Karen had a chance to call for help, although defendant left but kept the door closed. She went to the
bathroom and saw a small window covered by styrofoam and she also spotted a small hole. She stepped on the bowl and
she cried for help through the hole. She cried: Maawa na po kayo sa akin. Tulungan nyo akong makalabas dito. Kinidnap
ako! Somebody heard her. It was a woman, probably a neighbor, but she got angry and said she was istorbo. Karen
pleaded for help and the woman told her to sleep and she will call the police. She finally fell asleep but no policeman
came. (TSN, Aug. 15, 1989, pp. 15-16)
She woke up at 6:00 oclock the following morning, and she saw defendant in bed, this time sleeping. She waited for him to
wake up. When he woke up, he again got some food but he always kept the door locked. As usual, she was merely fed with
biscuit and coke. On that day, February 7, 1989, she was again raped three times. The first at about 6:30 to 7:00 a.m., the
second at about 8:30 9:00, and the third was after lunch at 12:00 noon. After he had raped her for the second time he left
but only for a short while. Upon his return, he caught her shouting for help but he did not understand what she was shouting
about. After she was raped the third time, he left the house. (TSN, Aug. 15, 1989, pp. 16-17) She again went to the
bathroom and shouted for help. After shouting for about five minutes, she heard many voices. The voices were asking for
her name and she gave her name as Karen Salvacion. After a while, she heard a voice of a woman saying they will just call
the police. They were also telling her to change her clothes. She went from the bathroom to the room but she did not change
her clothes being afraid that should the neighbors call the police and the defendant see her in different clothes, he might kill
her. At that time she was wearing a T-shirt of the American bacause the latter washed her dress. (Id., p. 16)
Afterwards, defendant arrived and opened the door. He asked her if she had asked for help because there were many
policemen outside and she denied it. He told her to change her clothes, and she did change to the one she was wearing on
Saturday. He instructed her to tell the police that she left home and willingly; then he went downstairs but he locked the
door. She could hear people conversing but she could not understand what they were saying. (Id., p. 19)
When she heard the voices of many people who were conversing downstairs, she knocked repeatedly at the door as hard as
she could. She heard somebody going upstairs and when the door was opened, she saw a policeman. The policeman
asked her name and the reason why she was there. She told him she was kidnapped. Downstairs, he saw about five
policemen in uniform and the defendant was talking to them. Nakikipag-areglo po sa mga pulis, Karen added. The
policeman told him to just explain at the precinct. (Id., p. 20)
They went out of the house and she saw some of her neighbors in front of the house. They rode the car of a certain person
she called Kuya Boy together with defendant, the policeman, and two of her neighbors whom she called Kuya Bong Lacson
and one Ate Nita. They were brought to Sub-Station I and there she was investigated by a policeman. At about 2:00 a.m.,
her father arrived, followed by her mother together with some of their neighbors. Then they were brought to the second floor
of the police headquarters. (Id., p. 21)
At the headquarters, she was asked several questions by the investigator. The written statement she gave to the police was
marked Exhibit A. Then they proceeded to the National Bureau of Investigation together with the investigator and her
parents. At the NBI, a doctor, a medico-legal officer, examined her private parts. It was already 3:00 in early morning, of the
following day when they reached the NBI, (TSN, Aug. 15, 1989, p. 22) The findings of the medico-legal officer has been
marked as Exhibit B.

She was studying at the St. Marys Academy in Pasay City at the time of the Incident but she subsequently transferred to
Apolinario Mabini, Arellano University, situated along Taft Avenue, because she was ashamed to be the subject of
conversation in the school. She first applied for transfer to Jose Abad Santos, Arellano University along Taft Avenue near the
Light Rail Transit Station but she was denied admission after she told the school the true reason for her transfer. The reason
for their denial was that they might be implicated in the case. (TSN, Aug. 15, 1989, p. 46)
xxx xxx

xxx

After the incident, Karen has changed a lot. She does not play with her brother and sister anymore, and she is always in a
state of shock; she has been absent-minded and is ashamed even to go out of the house. (TSN, Sept. 12, 1989, p. 10) She
appears to be restless or sad. (Id., p. 11) The father prays for P500,000.00 moral damages for Karen for this shocking
experience which probably, she would always recall until she reaches old age, and he is not sure if she could ever recover
from this experience. (TSN, Sept. 24, 1989, pp. 10-11)
Pursuant to an Order granting leave to publish notice of decision, said notice was published in the Manila Bulletin once a
week for three consecutive weeks. After the lapse of fifteen (15) days from the date of the last publication of the notice of
judgment and the decision of the trial court had become final, petitioners tried to execute on Bartellis dollar deposit with
China Banking Corporation. Likewise, the bank invoked Section 113 of Central Bank Circular No. 960.
Thus, petitioners decided to seek relief from this Court.
The issues raised and the arguments articulated by the parties boil down to two:
May this Court entertain the instant petition despite the fact that original jurisdiction in petitions for declaratory relief rests
with the lower court? She Section 113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426, as amended by P.D.
1246, otherwise known as the Foreign Currency Deposit Act be made applicable to a foreign transient?
Petitioners aver as heretofore stated that Section 113 of Central Bank Circular No. 960 providing that Foreign currency
deposits shall be exempt from attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body whatsoever. should be adjudged as unconstitutional on the grounds
that: 1.) it has taken away the right of petitioners to have the bank deposit of defendant Greg Bartelli y Northcott garnished
to satisfy the judgment rendered in petitioners favor in violation of substantive due process guaranteed by the
Constitution; 2.) it has given foreign currency depositors an undue favor or a class privilege n violation of the equal
protection clause of the Constitution; 3.) it has provided a safe haven for criminals like the herein respondent Greg Bartelli y
Northcott since criminal could escape civil liability for their wrongful acts by merely converting their money to a foreign
currency and depositing it in a foreign currency deposit account with an authorized bank; and 4.) The Monetary Board, in
issuing Section 113 of Central Bank Circular No. 960 has exceeded its delegated quasi- legislative power when it took
away: a.) the plaintiffs substantive right to have the claim sought to be enforced by the civil action secured by way of the writ
of preliminary attachment as granted by Rule 57 of the Revised Rules of Court; b.) the plaintiffs substantive right to have the
judgment credit satisfied by way of the writ of execution out of the bank deposit of the judgment debtor as granted to the
judgment creditor by Rule 39 of the Revised Rules of Court, which is beyond its power to do so.
On the other hand, respondent Central Bank, in its Comment alleges that the Monetary Board in issuing Section 113 of
CB Circular No. 960 did not exceed its power or authority because the subject Section is copied verbatim from a portion of
R.A. No. 6426 as amended by P.D. 1246. Hence, it was not the Monetary Board that grants exemption from attachment or
garnishment to foreign currency deposits, but the law (R.A. 6426 as amended) itself; that it does not violate the substantive
due process guaranteed by the Constitution because a.) it was based on a law; b.) the law seems to be reasonable; c.) it
is enforced according to regular methods of procedure; and d.) it applies to all members of a class.
Expanding, the Central Bank said; that one reason for exempting the foreign currency deposits from attachment,
garnishment or any other order process of any court, is to assure the development and speedy growth of the Foreign
Currency Deposit System and the Offshore Banking System in the Philippines; that another reason is to encourage the inflow
of foreign currency deposits into the banking institutions thereby placing such institutions more in a position to properly
channel the same to loans and investments in the Philippines, thus directly contributing to the economic development of the
country; that the subject section is being enforced according to the regular methods of procedure; and that it applies to all
currency deposits made by any person and therefore does not violate the equal protection clause of the Constitution.
Respondent Central Bank further avers that the questioned provision is needed to promote the public interest and the
general welfare; that the State cannot just stand idly by while a considerable segment of the society suffers from economic
distress; that the State had to take some measures to encourage economic development; and that in so doing persons and
property may be subjected to some kinds of restraints or burdens to secure the general welfare or public
interest. Respondent Central Bank also alleges that Rule 39 and Rule 57 of the Revised Rules of Court provide that some

properties are exempted from execution/attachment especially provided by law and R.A. No. 6426 as amended is such a law,
in that it specifically provides, among others, that foreign currency deposits shall be exempted from attachment, garnishment,
or any other order or process of any court, legislative body, government agency or any administrative body whatsoever.
For its part, respondent China Banking Corporation, aside from giving reasons similar to that of respondent Central
Bank, also stated that respondent China Bank is not unmindful of the inhuman sufferings experienced by the minor Karen E.
Salvacion from the beastly hands of Greg Bartelli; that it is not only too willing to release the dollar deposit of Bartelli which
may perhaps partly mitigate the sufferings petitioner has undergone; but it is restrained from doing so in view of R.A. No.
6426 and Section 113 of Central Bank Circular No. 960; and that despite the harsh effect to these laws on petitioners, CBC
has no other alternative but to follow the same.
This court finds the petition to be partly meritorious.
Petitioner deserves to receive the damages awarded to her by the court. But this petition for declaratory relief can only
be entertained and treated as a petition for mandamus to require respondents to honor and comply with the writ of execution
in Civil Case No. 89-3214.
The Court has no original and exclusive jurisdiction over a petition for declatory relief.[2] However, exceptions to this rule
have been recognized. Thus, where the petition has far-reaching implications and raises questions that should be resolved, it
may be treated as one for mandamus.[3]
Here is a child, a 12-year old girl, who in her belief that all Americans are good and in her gesture of kindness by
teaching his alleged niece the Filipino language as requested by the American, trustingly went with said stranger to his
apartment, and there she was raped by said American tourist Greg Bartelli. Not once, but ten times. She was detained
therein for four (4) days. This American tourist was able to escape from the jail and avoid punishment. On the other hand, the
child, having received a favorable judgment in the Civil Case for damages in the amount of more than P1,000,000.00, which
amount could alleviate the humiliation, anxiety, and besmirched reputation she had suffered and may continue to suffer for a
long, long time; and knowing that this person who had wronged her has the money, could not, however get the award of
damages because of this unreasonable law. This questioned law, therefore makes futile the favorable judgment and award of
damages that she and her parents fully deserve. As stated by the trial court in its decision,
Indeed, after hearing the testimony of Karen, the Court believes that it was indoubtedly a shocking and traumatic
experience she had undergone which could haunt her mind for a long, long time, the mere recall of which could
make her feel so humiliated, as in fact she had been actually humiliated once when she was refused admission at
the Abad Santos High School, Arellano University, where she sought to transfer from another school, simply
because the school authorities of the said High School learned about what happened to her and allegedly feared
that they might be implicated in the case.
xxx
The reason for imposing exemplary or corrective damages is due to the wanton and bestial manner defendant had
committed the acts of rape during a period of serious illegal detention of his hapless victim, the minor Karen
Salvacion whose only fault was in her being so naive and credulous to believe easily that defendant, an American
national, could not have such a bestial desire on her nor capable of committing such heinous crime. Being only 12
years old when that unfortunate incident happened, she has never heard of an old Filipino adage that in every forest
there is a snake, xxx.[4]
If Karens sad fate had happened to anybodys own kin, it would be difficult for him to fathom how the incentive for
foreign currency deposit could be more important than his childs right to said award of damages; in this case, the victims
claim for damages from this alien who had the gall to wrong a child of tender years of a country where he is mere visitor. This
further illustrates the flaw in the questioned provisions.
It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the countrys economy was in a
shambles; when foreign investments were minimal and presumably, this was the reason why said statute was enacted. But
the realities of the present times show that the country has recovered economically; and even if not, the questioned law still
denies those entitled to due process of law for being unreasonable and oppressive. The intention of the questioned law may
be good when enacted. The law failed to anticipate the inquitous effects producing outright injustice and inequality such as
as the case before us.
It has thus been said that-

But I also know,[5] that laws and institutions must go hand in hand with the progress of the human mind. As that
becomes more developed, more enlightened, as new discoveries are made, new truths are disclosed and manners
and opinions change with the change of circumstances, institutions must advance also, and keep pace with the
times We might as well require a man to wear still the coat which fitted him when a boy, as civilized society to
remain ever under the regimen of their barbarous ancestors.
In his comment, the Solicitor General correctly opined, thus:
"The present petition has far-reaching implications on the right of a national to obtain redress for a wrong committed
by an alien who takes refuge under a law and regulation promulgated for a purpose which does not contemplate the
application thereof envisaged by the allien. More specifically, the petition raises the question whether the protection
against attachment, garnishment or other court process accorded to foreign currency deposits PD No. 1246 and CB
Circular No. 960 applies when the deposit does not come from a lender or investor but from a mere transient who is
not expected to maintain the deposit in the bank for long.
The resolution of this question is important for the protection of nationals who are victimized in the forum by
foreigners who are merely passing through.
xxx
xxx Respondents China Banking Corporation and Central Bank of the Philippines refused to honor the writ of
execution issued in Civil Case No. 89-3214 on the strength of the following provision of Central Bank Circular No.
960:
Sec. 113 Exemption from attachment. Foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any
administrative body whatsoever.
Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic Act No. 6426:
Sec. 7. Rules and Regulations. The Monetary Board of the Central Bank shall promulgate such rules
and regulations as may be necessary to carry out the provisions of this Act which shall take effect after
the publication of such rules and regulations in the Official Gazette and in a newspaper of national
circulation for at least once a week for three consecutive weeks. In case the Central Bank promulgates
new rules and regulations decreasing the rights of depositors, the rules and regulations at the time the
deposit was made shall govern.
The aforecited Section 113 was copied from Section 8 of Republic Act No. 6426. As amended by P.D. 1246, thus:
Sec. 8. Secrecy of Foreign Currency Deposits. -- All foreign currency deposits authorized under this Act,
as amended by Presidential Decree No. 1035, as well as foreign currency deposits authorized under
Presidential Decree No. 1034, are hereby declared as and considered of an absolutely confidential
nature and, except upon the written permission of the depositor, in no instance shall such foreign
currency deposits be examined, inquired or looked into by any person, government official, bureau or
office whether judicial or administrative or legislative or any other entity whether public or
private: Provided, however, that said foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any
administrative body whatsoever.
The purpose of PD 1246 in according protection against attachment, garnishment and other court process to
foreign currency deposits is stated in its whereases, viz.:
WHEREAS, under Republic Act No. 6426, as amended by Presidential Decree No. 1035, certain
Philippine banking institutions and branches of foreign banks are authorized to accept deposits in foreign
currency;
WHEREAS, under provisions of Presidential Decree No. 1034 authorizing the establishment of an
offshore banking system in the Philippines, offshore banking units are also authorized to receive foreign
currency deposits in certain cases;
WHEREAS, in order to assure the development and speedy growth of the Foreign Currency Deposit

System and the Offshore Banking System in the Philippines, certain incentives were provided for under
the two Systems such as confidentiality subject to certain exceptions and tax exemptions on the interest
income of depositors who are nonresidents and are not engaged in trade or business in the Philippines;
WHEREAS, making absolute the protective cloak of confidentiality over such foreign currency deposits,
exempting such deposits from tax, and guaranteeing the vested right of depositors would better
encourage the inflow of foreign currency deposits into the banking institutions authorized to accept such
deposits in the Philippines thereby placing such institutions more in a position to properly channel the
same to loans and investments in the Philippines, thus directly contributing to the economic development
of the country;
Thus, one of the principal purposes of the protection accorded to foreign currency deposits is to assure the
development and speedy growth of the Foreign Currency Deposit system and the Offshore Banking in the
Philippines (3rd Whereas).
The Offshore Banking System was established by PD No. 1034. In turn, the purposes of PD No. 1034 are as
follows:
WHEREAS, conditions conducive to the establishment of an offshore banking system, such as political
stability, a growing economy and adequate communication facilities, among others, exist in the
Philippines;
WHEREAS, it is in the interest of developing countries to have as wide access as possible to the
sources of capital funds for economic development;
WHEREAS, an offshore banking system based in the Philippines will be advantageous and beneficial to
the country by increasing our links with foreign lenders, facilitating the flow of desired investments into
the Philippines, creating employment opportunities and expertise in international finance, and
contributing to the national development effort.
WHEREAS, the geographical location, physical and human resources, and other positive factors provide
the Philippines with the clear potential to develop as another financial center in Asia;
On the other hand, the Foreign Currency Deposit system was created by PD No. 1035. Its purpose are as follows:
WHEREAS, the establishment of an offshore banking system in the Philippines has been authorized
under a separate decree;
WHEREAS, a number of local commercial banks, as depository bank under the Foreign Currency
Deposit Act (RA No. 6426), have the resources and managerial competence to more actively engage in
foreign exchange transactions and participate in the grant of foreign currency loans to resident
corporations and firms;
WHEREAS, it is timely to expand the foreign currency lending authority of the said depository banks
under RA 6426 and apply to their transactions the same taxes as would be applicable to transaction of
the proposed offshore banking units;
It is evident from the above [Whereas clauses] that the Offshore Banking System and the Foreign Currency Deposit
System were designed to draw deposits from foreign lenders and investors (Vide second Whereas of PD No. 1034;
third Whereas of PD No. 1035). It is these depositors that are induced by the two laws and given protection and
incentives by them.
Obviously, the foreign currency deposit made by a transient or a tourist is not the kind of deposit encourage by PD
Nos. 1034 and 1035 and given incentives and protection by said laws because such depositor stays only for a few
days in the country and, therefore, will maintain his deposit in the bank only for a short time.
Respondent Greg Bartelli, as stated, is just a tourist or a transient. He deposited his dollars with respondent China
Banking Corporation only for safekeeping during his temporary stay in the Philippines.

For the reasons stated above, the Solicitor General thus submits that the dollar deposit of respondent Greg Bartelli
is not entitled to the protection of Section 113 of Central Bank Circular No. 960 and PD No. 1246 against
attachment, garnishment or other court processes.[6]
In fine, the application of the law depends on the extent of its justice. Eventually, if we rule that the questioned Section
113 of Central Bank Circular No. 960 which exempts from attachment, garnishment, or any other order or process of any
court. Legislative body, government agency or any administrative body whatsoever, is applicable to a foreign transient,
injustice would result especially to a citizen aggrieved by a foreign guest like accused Greg Bartelli. This would negate Article
10 of the New Civil Code which provides that in case of doubt in the interpretation or application of laws, it is presumed that
the lawmaking body intended right and justice to prevail. Ninguno non deue enriquecerse tortizerzmente con damo de
otro. Simply stated, when the statute is silent or ambiguous, this is one of those fundamental solutions that would respond to
the vehement urge of conscience. (Padilla vs. Padilla, 74 Phil. 377)
It would be unthinkable, that the questioned Section 113 of Central Bank No. 960 would be used as a device by accused
Greg Bartelli for wrongdoing, and in so doing, acquitting the guilty at the expense of the innocent.
Call it what it may but is there no conflict of legal policy here? Dollar against Peso? Upholding the final and executory
judgment of the lower court against the Central Bank Circular protecting the foreign depositor? Shielding or protecting the
dollar deposit of a transient alien depositor against injustice to a national and victim of a crime? This situation calls for
fairness legal tyranny.
We definitely cannot have both ways and rest in the belief that we have served the ends of justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar as it amends
Section 8 of R.A. 6426 are hereby held to be INAPPLICABLE to this case because of its peculiar
circumstances. Respondents are hereby REQUIRED to COMPLY with the writ of execution issued in Civil Case No. 89-3214,
Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC Makati and to RELEASE to petitioners the dollar
deposit of respondent Greg Bartelli y Northcott in such amount as would satisfy the judgment.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug, Kapunan, Francisco, and Panganiban, JJ.,
concur.
Padilla, J., no part.
Mendoza, and Hermosisima, Jr., JJ., on leave.

[1] Annex R, Petition.

[2] Alliance of Government Workers (AGW) v. Ministry of Labor and Employment, 124 SCRA 1.
[3] Nationalista Party vs. Angelo Bautista, 85 Phil. 101; Aquino vs. Comelec, 62 SCRA 275; and Alliance of Government
Workers vs. Minister of Labor and Employment, supra.
[4] Decision, Regional Trial Court, Civil Case No. 89-3214, pp. 9 &12; Rollo, pp. 66 & 69.
[5] Thomas Jefferson, Democracy, ed. Saul K. Padover. (New York, Penguin, 1946) p. 171.
[6] Comment of the Solicitor General, Rollo, pp. 128 129; 135-136.