Liberty of Abode and of Travel determining that the return of the Former Pres.
determining that the return of the Former Pres. Marcos and his family poses a serious
Marcos vs. Manglapus, 177 SCRA 668; 1989
FACTS: This case involves a petition of mandamus and prohibition asking the court to
order the respondents Secretary of Foreign Affairs, etc. To issue travel documents to
former Pres. Marcos and the immediate members of his family and to enjoin the
implementation of the President's decision to bar their return to the Philippines.
Petitioners assert that the right of the Marcoses to return in the Philippines is
guaranteed by the Bill of Rights, specifically Sections 1 and 6. They contended that
Pres. Aquino is without power to impair the liberty of abode of the Marcoses because
only a court may do so within the limits prescribed by law. Nor the President impair
their right to travel because no law has authorized her to do so.
They further assert that under international law, their right to return to the Philippines is
guaranteed particularly by the Universal Declaration of Human Rights and the
International Covenant on Civil and Political Rights, which has been ratified by the
Philippines.
ISSUE: Whether or not, in the exercise of the powers granted by the constitution, the
President (Aquino) may prohibit the Marcoses from returning to the Philippines.
HELD: "It must be emphasized that the individual right involved is not the right to travel
from the Philippines to other countries or within the Philippines. These are what the
right to travel would normally connote. Essentially, the right involved in this case at bar
is the right to return to one's country, a distinct right under international law,
independent from although related to the right to travel. Thus, the Universal
Declaration of Human Rights and the International Covenant on Civil and Political
Rights treat the right to freedom of movement and abode within the territory of a state,
the right to leave the country, and the right to enter one's country as separate and
distinct rights. What the Declaration speaks of is the "right to freedom of movement
and residence within the borders of each state". On the other hand, the Covenant
guarantees the right to liberty of movement and freedom to choose his residence and
the right to be free to leave any country, including his own. Such rights may only be
restricted by laws protecting the national security, public order, public health or morals
or the separate rights of others. However, right to enter one's country cannot be
arbitrarily deprived. It would be therefore inappropriate to construe the limitations to
the right to return to ones country in the same context as those pertaining to the liberty
of abode and the right to travel.
The Bill of rights treats only the liberty of abode and the right to travel, but it is a well
considered view that the right to return may be considered, as a generally accepted
principle of International Law and under our Constitution as part of the law of the land.
The court held that President did not act arbitrarily or with grave abuse of discretion in
threat to national interest and welfare. President Aquino has determined that the
destabilization caused by the return of the Marcoses would wipe away the gains
achieved during the past few years after the Marcos regime.
The return of the Marcoses poses a serious threat and therefore prohibiting their
return to the Philippines, the instant petition is hereby DISMISSED
Manotoc vs. CA | May 30, 1986
FACTS:
Ricardo Manotoc Jr. was one of the two principal stockholders of Trans-Insular
Management Inc. and the Manotoc Securities Inc. (stock brokerage house). He was
in US for a certain time, went home to file a petition with SEC for appointment of a
management committee for both businesses. Such was granted. However, pending
disposition of a case filed with SEC, the latter requested the Commissioner of
Immigration not to clear him for departure. Consequently, a memorandum to this
effect was issued.
There was a torrens title submitted to and accepted by Manotoc Securities Inc which
was suspected to be fake. 6 of its clients filed separate criminal complaints against
the petitioner and Leveriza, President and VP respectively. He was charged with
estafa and was allowed by the Court to post bail.
Petitioner filed before each trial court motion for permission to leave the country
stating his desire to go to US relative to his business transactions and opportunities.
Such was opposed by the prosecution and was also denied by the judges. He filed
petition for certiorari with CA seeking to annul the prior orders and the SEC
communication request denying his leave to travel abroad.
According to the petitioner, having been admitted to bail as a matter of right, neither
the courts that granted him bail nor SEC, which has no jurisdiction over his liberty,
could prevent him from exercising his constitutional right to travel.
ISSUE: WON petitioners constitutional right to travel was violated.
HELD: NO.
The court has power to prohibit person admitted to bail from leaving the country
because this is a necessary consequence of the nature and function of a bail bond.
The condition imposed upon petitioner to make himself available at all times whenever
the court requires his presence operates as a valid restriction on his constitutional
right to travel. In case he will be allowed to leave the country without sufficient reason,
he may be placed beyond the reach of courts.
Furthermore, petitioner failed to satisfy trial court and CA of the urgency of his travel,
duration thereof, as well as consent of his surety to the proposed travel. He was not Right to Information
able to show the necessity of his travel abroad. He never indicated that no other
person in his behalf could undertake such business transaction.

Article 3 Sec6: The liberty of abode and of changing the same shall not be impaired
except upon lawful order of the court. According to SC, the order of trial court in
releasing petitioner on bail constitutes such lawful order as contemplated by the
provision on right to travel.

SILVERIO VS CA
Facts:
Petitioner was charged with violation of Section 20 (4) of the Revised Securities
Act in Criminal Case of the Regional Trial Court of Cebu. In due time, he posted bail
for his provisional liberty.
More than two (2) years after the filing of the Information, respondent People of the
Philippines filed an Urgent ex parte Motion to cancel the passport of and to issue a
hold-departure Order against accused-petitioner on the ground that he had gone
abroad several times without the necessary Court approval resulting in
postponements of the arraignment and scheduled hearings.
Overruling opposition, the Regional Trial Court issued an Order directing the
Department of Foreign Affairs to cancel Petitioners passport or to deny his application
therefor, and the Commission on Immigration to prevent Petitioner from leaving the
country. This order was based primarily on the Trial Courts finding that since the filing
of the Information, the accused has not yet been arraigned because he has never
appeared in Court on the dates scheduled for his arraignment and there is evidence to
show that accused Ricardo C. Silverio, Sr. has left the country and has gone abroad
without the knowledge and permission of this Court. Petitioners Motion for
Reconsideration was denied.
Issue:
Whether or not the right to travel may be impaired by order of the court
Ruling:
The Supreme Court held that the foregoing condition imposed upon an accused
to make himself available at all times whenever the Court requires his presence
operates as a valid restriction of his right to travel. A person facing criminal charges
may be restrained by the Court from leaving the country or, if abroad, compelled to
return. So it is also that An accused released on bail may be re-arrested without the
necessity of a warrant if he attempts to depart from the Philippines without prior
permission of the Court where the case is pending.

Petitioner takes the posture, however, that while the 1987 Constitution
recognizes the power of the Courts to curtail the liberty of abode within the limits
prescribed by law, it restricts the allowable impairment of the right to travel only on
grounds of interest of national security, public safety or public health, as compared to
the provisions on freedom of movement in the 1935 and 1973 Constitutions.

Valmonte vs. Belmonte [GR 74930, 13 February 1989]
Facts: Ricardo Valmonte wrote Feliciano Belmonte Jr. on 4 June 1986, requesting to
be "furnished with the list of names of the opposition members of (the) Batasang
Pambansa who were able to secure a clean loan of P2 million each on guaranty (sic)
of Mrs. Imelda Marcos" and also to "be furnished with the certified true copies of the
documents evidencing their loan. Expenses in connection herewith shall be borne by"
Valmonte, et. al. Due to serious legal implications, President & General Manager
Feliciano Belmonte, Jr. referred the letter to the Deputy General Counsel of the GSIS,
Meynardo A. Tiro. Tiro replied that it is his opinion "that a confidential relationship
exists between the GSIS and all those who borrow from it, whoever they may be; that
the GSIS has a duty to its customers to preserve this confidentiality; and that it would
not be proper for the GSIS to breach this confidentiality unless so ordered by the
courts." On 20 June 1986, apparently not having yet received the reply of the
Government Service and Insurance System (GSIS) Deputy General Counsel,
Valmonte wrote Belmonte another letter, saying that for failure to receive a reply "(W)e
are now considering ourselves free to do whatever action necessary within the
premises to pursue our desired objective in pursuance of public interest." On 26 June
1986, Ricardo Valmonte, Oswaldo Carbonell, Doy Del Castillo, Rolando Bartolome,
Leo Obligar, Jun Gutierrez, Reynaldo Bagatsing, Jun "Ninoy" Alba, Percy Lapid,
Rommel Corro, and Rolando Fadul filed a special civil action for mandamus with
preliminary injunction invoke their right to information and pray that Belmonte be
directed: (a) to furnish Valmonte, et. al. the list of the names of the Batasang
Pambansa members belonging to the UNIDO and PDP-Laban who were able to
secure clean loans immediately before the February 7 election thru the
intercession/marginal note of the then First Lady Imelda Marcos; and/or (b) to furnish
petitioners with certified true copies of the documents evidencing their respective
loans; and/or (c) to allow petitioners access to the public records for the subject
information.
Issue: Whether Valmonte, et. al. may access GSIS records pertaining to behest loans
secured by Imelda Marcos in favor of certain members of the opposition in the
Batasang Pambansa.
Held: The pertinent provision under the 1987 Constitution is Art. 111, Sec. 7 states
that "The right of the people to information on matters of public concern shall be
recognized. Access to official records, and to documents, and papers pertaining to
official acts, transactions, or decisions, as well as to government research data used
as basis for policy development, shall be afforded the citizen, subject to such
limitations as may be provided by law." An informed citizenry with access to the
diverse currents in political, moral and artistic thought and data relative to them, and
the free exchange of ideas and discussion of issues thereon, is vital to the democratic
government envisioned under our Constitution. The cornerstone of this republican
system of government is delegation of power by the people to the State. In this
system, governmental agencies and institutions operate within the limits of the
authority conferred by the people. Denied access to information on the inner workings
of government, the citizenry can become prey to the whims and caprices of those to
whom the power had been delegated. The postulate of public office as a public trust,
institutionalized in the Constitution (in Art. XI, Sec. 1) to protect the people from abuse
of governmental power, would certainly be mere empty words if access to such
information of public concern is denied, except under limitations prescribed by
implementing legislation adopted pursuant to the Constitution. The right to information
is an essential premise of a meaningful right to speech and expression. But this is not
to say that the right to information is merely an adjunct of and therefore restricted in
application by the exercise of the freedoms of speech and of the press. Far from it.
The right to information goes hand-in-hand with the constitutional policies of full public
disclosure and honesty in the public service. It is meant to enhance the widening role
of the citizenry in governmental decision-making as well in checking abuse in
government. Yet, like all the constitutional guarantees, the right to information is not
absolute. As stated in Legaspi, The people's right to information is limited to "matters
of public concern", and is further "subject to such limitations as may be provided by
law." Similarly, the State's policy of full disclosure is limited to "transactions involving
public interest", and is "subject to reasonable conditions prescribed by law." Hence,
before mandamus may issue, it must be clear that the information sought is of "public
interest" or "public concern", and is not exempted by law from the operation of the
constitutional guarantee. Herein, the information sought by Valmonte, et. al. is the
truth of reports that certain Members of the Batasang Pambansa belonging to the
opposition were able to secure "clean" loans from the GSIS immediately before the 7
February 1986 election through the intercession of the former First Lady, Mrs. Imelda
R. Marcos. In sum, the public nature of the loanable funds of the GSIS and the public
office held by the alleged borrowers make the information sought clearly a matter of
public interest and concern. However, a second requisite must be met before the right
to information may be enforced through mandamus proceedings, viz., that the
information sought must not be among those excluded by law. On this matter,
Belmonte has failed to cite any law granting the GSIS the privilege of confidentiality as
regards the documents subject of the petition. His position is apparently based merely
on considerations of policy. The judiciary does not settle policy issues. The Court can
only declare what the law is, and not what the law should be. Under our system of
government, policy issues are within the domain of the political branches of the
government, and of the people themselves as the repository of all State power.
Although it may be true that when the information requested from the government
intrudes into the privacy of a citizen, a potential conflict between the rights to
information and to privacy may arise. Such competing interests of these rights need
not be resolved in the present case. The right to privacy belongs to the individual in his
private capacity, and not to public and governmental agencies like the GSIS.
Moreover, the right cannot be invoked by juridical entities like the GSIS. Thus, neither
can the GSIS through its General Manager, Belmonte, invoke the right to privacy of its
borrowers. The right is purely personal in nature, and hence may be invoked only by
the person whose privacy is claimed to be violated. It may be observed, however, the
concerned borrowers themselves may not succeed if they choose to invoke their right
to privacy, considering the public offices they were holding at the time the loans were
alleged to have been granted. It cannot be denied that because of the interest they
generate and their newsworthiness, public figures, most especially those holding
responsible positions in government, enjoy a more limited right to privacy as
compared to ordinary individuals, their actions being subject to closer public scrutiny.
In fine, Valmonte, et. al. are entitled to access to the documents evidencing loans
granted by the GSIS, subject to reasonable regulations that the latter may promulgate
relating to the manner and hours of examination, to the end that damage to or loss of
the records may be avoided, that undue interference with the duties of the custodian
of the records may be prevented and that the right of other persons entitled to inspect
the records may be insured.
Province of Cotabato vs. The Govt. of the RP Peace Panel on Ancestral Domain
FACTS:
On August 5, 2008, the Government of the Republic of the Philippines and the Moro
Islamic Liberation Front (MILF) were scheduled to sign a Memorandum of Agreement
of the Ancestral Domain Aspect of the GRP - MILF Tripoli Agreement on Peace of
2001 in Kuala Lumpur, Malaysia.
Invoking the right to information on matters of public concern, the petitioners seek to
compel respondents to disclose and furnish them the complete and official copies of
the MA-AD and to prohibit the slated signing of the MOA-AD and the holding of public
consultation thereon. They also pray that the MOA-AD be declared unconstitutional.
The Court issued a TRO enjoining the GRP from signing the same.
ISSUES:
1. Whether or not the constitutionality and the legality of the MOA is ripe for
adjudication;
2. Whether or not there is a violation of the people's right to information on matters of
public concern (Art 3 Sec. 7) under a state policy of full disclosure of all its
transactions involving public interest (Art 2, Sec 28) including public consultation
under RA 7160 (Local Government Code of 1991)
RULINGS:
1. Yes, the petitions are ripe for adjudication. The failure of the respondents to consult
the local government units or communities affected constitutes a departure by
respondents from their mandate under EO No. 3. Moreover, the respondents
exceeded their authority by the mere act of guaranteeing amendments to the
Constitution. Any alleged violation of the Constitution by any branch of government is
a proper matter for judicial review.
As the petitions involve constitutional issues which are of paramount public interest or
of transcendental importance, the Court grants the petitioners, petitioners-in-
intervention and intervening respondents the requisite locus standi in keeping with the
liberal stance adopted in David v. Macapagal- Arroyo.
In Pimentel, Jr. v. Aguirre, this Court held:
x x x [B]y the mere enactment of the questioned law or the approval of the challenged
action, the dispute is said to have ripened into a judicial controversy even without any
other overt act . Indeed, even a singular violation of the Constitution and/or the law is
enough to awaken judicial duty.x x x x
By the same token, when an act of the President, who in our constitutional scheme is
a coequal of Congress, is seriously alleged to have infringed the Constitution and the
laws x x x settling the dispute becomes the duty and the responsibility of the courts.
That the law or act in question is not yet effective does not negate ripeness.
2. Yes. The Court finds that there is a grave violation of the Constitution involved in the
matters of public concern (Sec 7 Art III) under a state policy of full disclosure of all its
transactions involving public interest (Art 2, Sec 28) including public consultation
under RA 7160 (Local Government Code of 1991).
(Sec 7 ArtIII) The right to information guarantees the right of the people to demand
information, while Sec 28 recognizes the duty of officialdom to give information even if
nobody demands. The complete and effective exercise of the right to information
necessitates that its complementary provision on public disclosure derive the same
self-executory nature, subject only to reasonable safeguards or limitations as may be
provided by law.
The contents of the MOA-AD is a matter of paramount public concern involving public
interest in the highest order. In declaring that the right to information contemplates
steps and negotiations leading to the consummation of the contract, jurisprudence
finds no distinction as to the executory nature or commercial character of the
agreement.
E.O. No. 3 itself is replete with mechanics for continuing consultations on both national
and local levels and for a principal forum for consensus-building. In fact, it is the duty
of the Presidential Adviser on the Peace Process to conduct regular dialogues to seek
relevant information, comments, advice, and recommendations from peace partners
and concerned sectors of society. -PETITIONER INVOKES Sec. 7 [Article III]. The right of the people to information on
matters of public concern shall be recognized. Access to official records, and to
CHAVEZ vs PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT documents, and papers pertaining to official acts, transactions, or decisions, as well as
to government research data used as basis for policy development, shall be afforded
Facts: the citizen, subject to such limitations as may be provided by law.
-Petitioner Francisco I Chavez (in his capacity as taxpayer, citizen and a former Sec. 28 [Article II]. Subject to reasonable conditions prescribed by law, the State
government adopts and
official) initiated this original action seeking (1) to prohibit and enjoin respondents implements a policy of full public disclosure of all its transactions involving public
[PCGG and its chairman] from privately entering into, perfecting and/or executing any interest.
agreement with the heirs of the late President Ferdinand E. Marcos . . . relating to and -RESPONDENT ANSWERS that the above constitutional provisions refer to
concerning the properties and assets of Ferdinand Marcos located in the Philippines completed and
and/or abroad including the so-called Marcos gold hoard"; and (2) to compel operative official acts, not to those still being considered.
respondent[s] to make public all negotiations and agreement, be they
ongoing or perfected, and all documents related to or relating to such negotiations and
Issue:Whether or not the Court could require the PCGG to disclose to the public the
agreement between the PCGG and the Marcos heirs."
details of
-Chavez is the same person initiated the prosecution of the Marcoses and their
any agreement, perfected or not, with the Marcoses.
cronies who
committed unmitigated plunder of the public treasury and the systematic subjugation
Ruling: WHEREFORE, the petition is GRANTED. The General and Supplemental
of the
Agreement
country's economy; he says that what impelled him to bring this action were several
dated December 28, 1993, which PCGG and the Marcos heirs entered into are hereby
news
declared
reports 2 bannered in a number of broadsheets sometime in September 1997. These
NULL AND VOID for being contrary to law and the Constitution. Respondent PCGG,
news items referred to (1) the alleged discovery of billions of dollars of Marcos assets
its officers and
deposited in various coded accounts in Swiss banks; and (2) the reported execution of
all government functionaries and officials who are or may be directly ot indirectly
a compromise, between the government (through PCGG) and the Marcos heirs, on
involved in the
how to split or share these assets.
recovery of the alleged ill-gotten wealth of the Marcoses and their associates are
-PETITIONER DEMANDS that respondents make public any and all negotiations and
DIRECTED to
agreements
disclose to the public the terms of any proposed compromise settlment, as well as the
pertaining to PCGG's task of recovering the Marcoses' ill-gotten wealth. He claims that
final
any
agreement, relating to such alleged ill-gotten wealth, in accordance with the
compromise on the alleged billions of ill-gotten wealth involves an issue of "paramount
discussions
public
embodied in this Decision. No pronouncement as to cost.
interest," since it has a "debilitating effect on the country's economy" that would be
greatly
RD:
prejudicial to the national interest of the Filipino people. Hence, the people in general
- The "information" and the "transactions" referred to in the subject provisions of the
have a
Constitution
right to know the transactions or deals being contrived and effected by the
have as yet no defined scope and extent. There are no specific laws prescribing the
government.
exact
-RESPONDENT ANSWERS that they do not deny forging a compromise agreement
limitations within which the right may be exercised or the correlative state duty may be
with the
obliged.
Marcos heirs. They claim, though, that petitioner's action is premature, because there
However, the following are some of the recognized restrictions:
is no
(1) national security matters and intelligence information
showing that he has asked the PCGG to disclose the negotiations and the
- there is a governmental privilege against public disclosure with respect to state
Agreements. And even if he has, PCGG may not yet be compelled to make any
secrets
disclosure, since the proposed terms and conditions of the Agreements have not
regarding military, diplomatic and other national security matters. 24 But where there
become effective and binding.
is
no need to protect such state secrets, the privilege may not be invoked to withhold
documents and other information, 25 provided that they are examined "in strict
confidence" and given "scrupulous protection." (2) trade secrets and banking
transactions
-trade or industrial secrets (pursuant to the Intellectual Property Code 27 and other
related
laws) as well as banking transactions (pursuant to the Secrecy of Bank Deposits Act
28)
are also exempted from compulsory disclosure (3) criminal matters
- Also excluded are classified law enforcement matters, such as those relating to the
apprehension, the prosecution and the detention of criminals, which courts neither
may
nor inquire into prior to such arrest, detention and prosecution. Efforts at effective law
enforcement would be seriously jeopardized by free public access to, for example,
police
information regarding rescue operations, the whereabouts of fugitives, or leads on
covert
criminal activities.(4) other confidential information.
- The Ethical Standards Act 31 further prohibits public officials and employees from
using
or divulging "confidential or classified information officially known to them by reason of
their office and not made available to the public." Other acknowledged limitations to
information access include diplomatic correspondence, closed door Cabinet meetings
and
executive sessions of either house of Congress, as well as the internal deliberations of
the
Supreme Court.
- In Valmonte v. Belmonte Jr., the Court emphasized that the information sought must
be
"matters of public concern," access to which may be limited by law. Similarly, the state
policy of
full public disclosure extends only to "transactions involving public interest" and may
also be
"subject to reasonable conditions prescribed by law."
- As to the meanings of the terms "public interest" and "public concern," the Court, in
Legaspi v.
Civil Service Commission, elucidated: In determining whether or not a particular
information is
of public concern there is no rigid test which can be applied. Public concern" like
"public
interest" is a term that eludes exact definition. Both terms embrace a broad spectrum
of subjects which the public may want to know, either because these directly affect
their lives, or simply because such matters naturally arouse the interest of an ordinary
citizen. In the final analysis, it is for the courts to determine on a case by case basis
whether the matter at issue is of interest or importance, as it relates to or affects the
public.
-As to whether or not the above cited constitutional provisions guarantee access to
information regarding ongoing negotiations or proposals prior to the final agreement,
this same clarification was sought and clearly addressed by the constitutional
commissioners during their deliberations, MR. SUAREZ. And when we say
"transactions" which should be distinguished from contracts, agreements, or treaties
or whatever, does the Gentleman refer to the steps leading to the consummation of
the contract, or does he refer to the contract itself?
MR. OPLE. The "transactions" used here, I suppose, is generic and, therefore, it can
cover both
steps leading to a contract, and already a consummated contract, Mr. Presiding
Officer.
MR. SUAREZ. This contemplates inclusion of negotiations leading to the
consummation of the
transaction?
MR. OPLE. Yes, subject to reasonable safeguards on the national interest.
- Considering the intent of the Constitution, the Court believes that it is
incumbent upon the
PCGG and its officers, as well as other government representatives, to
disclose sufficient public
information on any proposed settlement they have decided to take up with
the ostensible owners and holders of ill-gotten wealth. Such information,
though, must pertain to definite propositions of the government, not
necessarily to intra-agency or inter-agency recommendations or
communications during the stage when common assertions are still in the
process of being formulated or are in the "exploratory" stage. There is a
need, of course, to observe the same restrictions on disclosure of
information in general, as discussed above such as on matters involving
national security, diplomatic or foreign relations, intelligence and other
classified information.

- .
Right to Form Associations
SSS Employee Asso. v CA 175 SCRA 686 (July 28, 1989)
Facts: The petitioners went on strike after the SSS failed to act upon the unions
demands concerning the implementation of their CBA. SSS filed before the court
action for damages with prayer for writ of preliminary injunction against petitioners for
staging an illegal strike. The court issued a temporary restraining order pending the
resolution of the application for preliminary injunction while petitioners filed a motion to
dismiss alleging the courts lack of jurisdiction over the subject matter. Petitioners
contend that the court made reversible error in taking cognizance on the subject
matter since the jurisdiction lies on the DOLE or the National Labor Relations
Commission as the case involves a labor dispute. The SSS contends on one hand
that the petitioners are covered by the Civil Service laws, rules and regulation thus
have no right to strike. They are not covered by the NLRC or DOLE therefore the court
may enjoin the petitioners from striking.
Issue: Whether or not SSS employers have the right to strike
Whether or not the CA erred in taking jurisdiction over the subject matter.
Held: The Constitutional provisions enshrined on Human Rights and Social Justice
provides guarantee among workers with the right to organize and conduct peaceful
concerted activities such as strikes. On one hand, Section 14 of E.O No. 180 provides
that the Civil Service law and rules governing concerted activities and strikes in the
government service shall be observed,
subject to any legislation that may be enacted by Congress referring to
Memorandum Circular No. 6, s. 1987 of the Civil Service Commission which states
that prior to the enactment by Congress of applicable laws concerning strike by
government employees enjoins under pain of administrative sanctions, all government
officers and employees from staging strikes, demonstrations, mass leaves, walk-outs
and other forms of mass action which will result in temporary stoppage or disruption of
public service. Therefore in the absence of any legislation allowing govt. employees
to strike they are prohibited from doing so.
In Sec. 1 of E.O. No. 180 the employees in the civil service are denominated as
government employees and that the SSS is one such government-controlled
corporation with an original charter, having been created under R.A. No. 1161, its
employees are part of the civil service and are covered by the Civil Service
Commissions memorandum prohibiting strikes.
Neither the DOLE nor the NLRC has jurisdiction over the subject matter but instead it
is the Public Sector Labor-Management Council which is not granted by law authority
to issue writ of injunction in labor disputes within its jurisdiction thus the resort of SSS
before the general court for the issuance of a writ of injunction to enjoin the strike is
appropriate.
Victoriano vs. Elizalde Rope Workers Union
FACTS:
Benjamin Victoriano, an Iglesia ni Cristo (INC) member, has been an employee of the
Elizalde Rope Factory (ERF) since 1958. He was also a member of the EPWU
(Elizalde Rope Workers Union). Under the collective bargaining agreement (CBA)
between ERF and EPWU, a close shop agreement is being enforced which means
that employment in the factory relies on the membership in the EPWU; that in order to
retain employment in the said factory one must be a member of the said Union. In
1962, Victoriano tendered his resignation from EPWU claiming that as per RA 3350 he
is an exemption to the close shop agreement by virtue of his being a member of the
INC because apparently in the INC, one is forbidden from being a member of any
labor union. It was only in 1974 that his resignation from the Union was acted upon by
EPWU which notified ERF about it. ERF then moved to terminate Victoriano due to his
non-membership from the EPWU. EPWU and ERF reiterated that he is not exempt
from the close shop agreement because RA 3350, which provides that close shop
agreements shall not cover members of any religious sects which prohibit affiliation of
their members in any such labor organization, is unconstitutional and that said law
violates the EPWUs and ERFs legal/contractual rights.
ISSUE: Whether or not RA 3350 is unconstitutional.
HELD: No. The right to religion prevails over contractual or legal rights. As such, an
INC member may refuse to join a labor union and despite the fact that there is a close
shop agreement in the factory where he was employed, his employment could not be
validly terminated for his non-membership in the majority therein. Further, the right to
join a union includes the right not to join a union. The law is not unconstitutional. It
recognizes both the rights of unions and employers to enforce terms of contracts and
at the same time it recognizes the workers right to join or not to join union. RA
3550 recognizes as well the primacy of a constitutional right over a contractual right.
IN RE: EDILLON
FACTS: The respondent Marcial A. Edillon is a duly licensed practicing Attorney in the
Philippines. The IBP Board of Governors recommended to the Court the removal of
the name of the respondent from its Roll of Attorneys for stubborn refusal to pay his
membership dues assailing the provisions of the Rule of Court 139-A and the
provisions of par. 2, Section 24, Article III, of the IBP By-Laws pertaining to the
organization of IBP, payment of membership fee and suspension for failure to pay the
same.
Edillon contends that the stated provisions constitute an invasion of his constitutional
rights in the sense that he is being compelled as a pre-condition to maintain his status
as a lawyer in good standing, to be a member of the IBP and to pay the corresponding
dues, and that as a consequence of this compelled financial support of the said
organization to which he is admitted personally antagonistic, he is being deprived of
the rights to liberty and properly guaranteed to him by the Constitution. Hence, the
respondent concludes the above provisions of the Court Rule and of the IBP By-Laws
are void and of no legal force and effect.
ISSUE: Whether or not the court may compel Atty. Edillion to pay his membership fee
to the IBP.
HELD: The Integrated Bar is a State-organized Bar which every lawyer must be a
member of as distinguished from bar associations in which membership is merely
optional and voluntary. All lawyers are subject to comply with the rules prescribed for
the governance of the Bar including payment a reasonable annual fees as one of the
requirements. The Rules of Court only compels him to pay his annual dues and it is
not in violation of his constitutional freedom to associate. Bar integration does not
compel the lawyer to associate with anyone. He is free to attend or not the meeting of
his Integrated Bar Chapter or vote or refuse to vote in its election as he chooses. The
only compulsion to which he is subjected is the payment of annual dues. The
Supreme Court in order to further the States legitimate interest in elevating the quality
of professional legal services, may require thet the cost of the regulatory program
the lawyers.
Such compulsion is justified as an exercise of the police power of the State. The right
to practice law before the courts of this country should be and is a matter subject to
regulation and inquiry. And if the power to impose the fee as a regulatory measure is
recognize then a penalty designed to enforce its payment is not void as unreasonable
as arbitrary. Furthermore, the Court has jurisdiction over matters of admission,
suspension, disbarment, and reinstatement of lawyers and their regulation as part of
its inherent judicial functions and responsibilities thus the court may compel all
members of the Integrated Bar to pay their annual dues.
Non- Impairment Clause
RUTTER VS. ESTEBAN
Facts: On August 20,1941 Rutter sold to Esteban two parcels of land situated in the
Manila for P9,600 of which P4,800 were paid outright, and the balance was made
payable as follows: P2,400 on or before August 7, 1942, and P2,400 on or before
August 27, 1943, with interest at the rate of 7 percent per annum. To secure the
payment of said balance of P4,800, a first mortgage has been constituted in favor of
the plaintiff. Esteban failed to pay the two installments as agreed upon, as well as the
interest that had accrued and so Rutter instituted an action to recover the balance
due, the interest due and the attorney's fees. The complaint also contains a prayer for
sale of the properties mortgaged in accordance with law. Esteban claims that this is a
prewar obligation contracted and that he is a war sufferer, having filed his claim with
the Philippine War Damage Commission for the losses he had suffered as a
consequence of the last war; and that under section 2 of RA 342(moratorium law),
payment of his obligation cannot be enforced until after the lapse of eight years. The
complaint was dismissed. A motion for recon was made which assails the
constitutionality of RA 342.
Issue: Whether or Not RA 342 unconstitutional on non-impairment clause grounds.
Held: Yes. The moratorium is postponement of fulfillment of obligations decreed by
the state through the medium of the courts or the legislature. Its essence is the
application of police power. The economic interests of the State may justify the
exercise of its continuing and dominant protective power notwithstanding interference
with contracts. The question is not whether the legislative action affects contracts
incidentally, or directly or indirectly, but whether the legislation is addressed to a
legitimate end and the measures taken are reasonable and appropriate to that end.
However based on the Presidents general SONA and consistent with what the Court
believes to be as the only course dictated by justice, fairness and righteousness,
declared that the continued operation and enforcement of RA 342 at the present time
is unreasonable and oppressive, and should not be prolonged should be declared null
and void and without effect. This holds true as regards Executive Orders Nos. 25 and
32, with greater force and reason considering that said Orders contain no limitation
whatsoever in point of time as regards the suspension of the enforcement and
effectivity of monetary obligations.
Ortigas & Co., Limited Partnership vs. Feati Bank and Trust Co.
Facts:
Plaintiff is engaged in real estate business, developing and selling lots to the public,
particularly the Highway Hills Subdivision along EDSA, Mandaluyong, Rizal.
On March 4, 1952, plaintiff entered into separate agreements of sale with Augusto
Padilla y Angeles and Natividad Angeles over 2 parcels of land (Lots Nos. 5 and 6,
Block 31, of the Highway Hills Subdivision). On July 19, 1962 the vendees transferred
their rights and interests over the said lots to Emma Chavez. The plaintiff executed the
corresponding deeds of sale in favor of Emma Chavez upon payment of the purchase
price. Both the agreements and the deeds of sale thereafter executed contained the
stipulation that the parcels of land subject of the deeds of sale shall be used by the
Buyer exclusively for residential purposes. The restrictions were later annotated in the
Transfer Certificates of Titles covering the said lots issued in the name of Chavez.
Eventually, defendant-appellee acquired Lots No. 5 and 6 with the building restrictions
also annotated in their corresponding TCTs. Lot No.5 was bought directly from Chavez
free from all liens and encumbrances while Lot No.6 was acquired through a Deed
of Exchange from Republic Flour Mills.
Plaintiff claims that the restrictions were imposed as part of its general building
scheme designed for the beautification and development of the Highway Hills
Subdivision which forms part of its big landed estate where commercial and industrial
sites are also designated or established.
Defendant maintains that the area along the western part of EDSA from Shaw
Boulevard to the Pasig River, has been declared a commercial and industrial zone,
per Resolution No.27 of the Municipal Council of Mandaluyong. It alleges that plaintiff
completely sold and transferred to third persons all lots in said subdivision facing
EDSA and the subject lots thereunder were acquired by it only on June 23, 1962 or
more than 2 years after the area xxx had been declared a commercial and industrial
zone.
On or about May 5, 1963, defendant-appellee began construction of a building
devoted to banking purposes but which it claims could also be used exclusively for
residential purposes. The following day, the plaintiff demanded in writing that the
construction of the commercial building be stopped but the defendant refused to
comply contending that the construction was in accordance with the zoning
regulations.
Issues:
1. Whether Resolution No. 27 s-1960 is a valid exercise of police power.
2. Whether the said Resolution can nullify or supersede the contractual obligations
assumed by defendant-appellee.
Held:
1. Yes. The validity of Resolution No.27 was never questioned. In fact, it was impliedly
admitted in the stipulation of facts, when plaintiff-appellant did not dispute the same.
Having admitted the validity of the subject resolution, plaintiff-appellant cannot now
change its position on appeal.
However, assuming that it is not yet too late to question the validity of the said
resolution, the posture is unsustainable.
Municipalities are empowered by law through Sec.3 of RA 2264 (Local Autonomy Act)
to to adopt zoning and subdivision ordinances or regulations for the municipality. The
law does not restrict the exercise of the power through an ordinance. Therefore,
granting that Resolution No.27 is not an ordinance, it certainly is a regulatory measure
within the intendment of the word regulation under the provision.
An examination of Sec.12 of the same law reveals that the implied power of a
municipality should be liberally construed in its favor and that any fair and
reasonable doubt as to the existence of the power should be interpreted in favor of the
local government and it shall be presumed to exist. An exception to the general
welfare powers delegated to municipalities is when the exercise of its powers will
conflict with vested rights arising from contracts. The exception does not apply to the
case at bar.
2. While non-impairment of contacts is constitutionally guaranteed, the rule is not
absolute since it has to be reconciled with the legitimate exercise of police power.
Invariably described as the most essential, insistent and illimitable of powers and the
greatest and most powerful attribute of government, the exercise of police power
may be judicially inquired into and corrected only if it is capricious, whimsical, unjust or
unreasonable, there having been a denial of due process or a violation of any other
applicable constitutional guarantee.
Resolution No.27, S-1960 declaring the western part of EDSA from Shaw Boulevard to
the Pasig River as an industrial or commercial zone was passed by the Municipal
Council of Mandaluyong in the exercise of police power to safeguard/promote the
health, safety, peace, good order and general welfare of the people in the locality.
Judicial notice may be taken of the conditions prevailing in the area, especially where
Lots Nos. 5 and 6 are located. EDSA supports an endless stream of traffic and the
resulting activity, noise and pollution which are hardly conducive to the health, safety
or welfare of the residents in its route. The Municipality of Mandaluyong was
reasonably justified under the circumstances in passing the subject resolution.
Thus, the state, in order to promote the general welfare, may interfere with personal
liberty, with property, and with business and occupations. Persons may be subjected
to all kinds of restraint and burdens, in order to secure the general comfort, health and
prosperity of the state, and to this fundamental aim of the Government, the rights of
the individual are subordinated.
LOZANO VS MARTINEZ
FACTS:
Petitioners, charged with Batas Pambansa Bilang 22 (BP 22 for short), popularly
known as the Bouncing Check Law, assail the law's constitutionality.
BP 22 punishes a person "who makes or draws and issues any check on account or
for value, knowing at the time of issue that he does not have sufficient funds in or
credit with the drawee bank for the payment of said check in full upon presentment,
which check is subsequently dishonored by the drawee bank for insufficiency of funds
or credit or would have been dishonored for the same reason had not the drawer,
without any valid reason, ordered the bank to stop payment." The penalty prescribed
for the offense is imprisonment of not less than 30 days nor more than one year or a
fine or not less than the amount of the check nor more than double said amount, but in
no case to exceed P200,000.00, or both such fine and imprisonment at the discretion
of the court.
The statute likewise imposes the same penalty on "any person who, having sufficient
funds in or credit with the drawee bank when he makes or draws and issues a check,
shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the
check if presented within a period of ninety (90) days from the date appearing thereon,
for which reason it is dishonored by the drawee bank.
An essential element of the offense is "knowledge" on the part of the maker or drawer
of the check of the insufficiency of his funds in or credit with the bank to cover the
check upon its presentment. Since this involves a state of mind difficult to establish,
the statute itself creates a prima facie presumption of such knowledge where payment
of the check "is refused by the drawee because of insufficient funds in or credit with
such bank when presented within ninety (90) days from the date of the check. To
mitigate the harshness of the law in its application, the statute provides that such
presumption shall not arise if within five (5) banking days from receipt of the notice of
dishonor, the maker or drawer makes arrangements for payment of the check by the
bank or pays the holder the amount of the check.
Another provision of the statute, also in the nature of a rule of evidence, provides that
the introduction in evidence of the unpaid and dishonored check with the drawee
bank's refusal to pay "stamped or written thereon or attached thereto, giving the
reason therefor, "shall constitute prima facie proof of "the making or issuance of said
check, and the due presentment to the drawee for payment and the dishonor
thereof ... for the reason written, stamped or attached by the drawee on such
dishonored check."
The presumptions being merely prima facie, it is open to the accused of course to
present proof to the contrary to overcome the said presumptions.
ISSUE: Whether or not (W/N) BP 22 violates the constitutional provision forbidding
imprisonment for debt.
HELD: No.
The gravamen of the offense punished by BP 22 is the act of making and issuing a
worthless check or a check that is dishonored upon its presentation for payment. It is
not the non-payment of an obligation which the law punishes. The law is not intended
or designed to coerce a debtor to pay his debt. The thrust of the law is to prohibit,
under pain of penal sanctions, the making of worthless checks and putting them in
circulation. Because of its deleterious effects on the public interest, the practice is
proscribed by the law. The law punishes the act not as an offense against property, but
an offense against public order.
The effects of the issuance of a worthless check transcends the private interests of the
parties directly involved in the transaction and touches the interests of the community
at large. The mischief it creates is not only a wrong to the payee or holder, but also an
injury to the public. The harmful practice of putting valueless commercial papers in
circulation, multiplied a thousand fold, can very wen pollute the channels of trade and
commerce, injure the banking system and eventually hurt the welfare of society and
the public interest.
The enactment of BP 22 is a declaration by the legislature that, as a matter of public
policy, the making and issuance of a worthless check is deemed public nuisance to be
abated by the imposition of penal sanctions.
ISSUE: W/N BP 22 impairs the freedom to contract.
HELD: No. The freedom of contract which is constitutionally protected is freedom to
enter into "lawful" contracts. Contracts which contravene public policy are not lawful.
Besides, we must bear in mind that checks can not be categorized as mere contracts.
It is a commercial instrument which, in this modem day and age, has become a
convenient substitute for money; it forms part of the banking system and therefore not
entirely free from the regulatory power of the state.
ISSUE: W/N it violates the equal protection clause.
HELD: No. Petitioners contend that the payee is just as responsible for the crime as
the drawer of the check, since without the indispensable participation of the payee by
his acceptance of the check there would be no crime. This argument is tantamount to
saying that, to give equal protection, the law should punish both the swindler and the
swindled. Moreover, the clause does not preclude classification of individuals, who
may be accorded different treatment under the law as long as the classification is no
unreasonable or arbitrary.
Ganzon vs. Inserto
May the respondent court order that a mortgage on real property be substituted by a
surety bond and direct the Register of Deeds to cancel the mortgage lien annotated on
the Torrens Title since the surety bond already secures the obligation earlier secured
by the cancelled mortgage?
The petitioner comes to us stating that the lower court acted with grave abuse of
discretion and in excess of its jurisdiction in so ruling.
On August 28, 1979, petitioner Rodolfo Ganzon initiated proceedings to extra-judicially
foreclose a real estate mortgage executed by the private respondents in his favor. The
Deed of Real Estate Mortgage executed on March 19, 1979 (Annex "A", Petition)
between Randolph Tajanlangit and Esteban Tajanlangit as mortgagors on one hand
and Rodolfo Ganzon as mortgagee on the other hand was to secure the payment by
the Tajanlangits of a promissory note amounting to P40,000.00 in favor of Ganzon, to
wit:
xxx xxx xxx
That whereas, the MORTGAGORS are justly indebted to the MORTGAGEE in the
amount of FORTY THOUSAND (P40,000.00) PESOS, Philippine Currency, as
evidenced by their promissory note for said sum, in the words and figures as follows:
P40,000.00 Iloilo City
March 19, 1979
For value received, we promise to pay RODOLFO T. GANZON, or order, at his
residence in Molo, Iloilo City, the sum of FORTY THOUSAND (P40,000.00) PESOS,
Philippine Currency, in two (2) installments as follows: P20,000.00 on or before 25
May 1979; and P20,000.00 on or before 25 August 1979. This note shall not draw
interest. (Annex "A", Rollo, p. 15)
The mortgage covered a parcel of residential land, Lot No. 1901-E-61-B-1- F of the
subdivision plan Psd-274802, located in the District of Molo, Iloilo City covered by
Transfer Certificate of Title No. T-50324.
Thereafter, petitioner Gregorio Lira, in his capacity as ex-oficio provincial sheriff of
Iloilo served personal notice of the foreclosure proceedings on the private
respondents. Lira also caused the publication in a newspaper of general circulation in
the City and Province of Iloilo of a Notice of Extra Judicial Sale of Mortgaged Property,
setting the sale at public auction of the mortgaged property at 10:00 a.m. on
September 28, 1979, at his office at the Provincial Capitol, Iloilo City.
On September 27, 1979, a day before the scheduled public auction, the private
respondents filed a civil action for specific performance, damages, and prohibition with
preliminary injunction against the petitioners with the respondent court. The action,
docketed as CFI Case No. 13053, sought to declare the extrajudicial foreclosure
proceedings and all proceedings taken in connection therewith null and void. The
private respondents asked for the issuance of a writ of preliminary injunction to enjoin
the petitioners from proceeding with the foreclosure and public auction sale. Acting on
the urgent ex-parte motion of private respondents, the trial court issued an order
enjoining the provincial sheriff from proceeding with the scheduled auction sale on
September 28, 1979.
On October 31, 1979, the private respondents filed an amended complaint. For
purposes of the instant petition, the pertinent allegations in the amended complaint are
the following: (1) On August 25, 1978, defendant, now petitioner Rodolfo Ganzon
executed a deed of absolute sale of a parcel of land in favor of plaintiff, now
respondent Esteban Tajanlangit. The parcel of land, subject of the sale is described as
Lot No. 1900 of the Cadastral Survey of Iloilo located at Molo, Iloilo City covered by
Transfer Certificate of Title No. T- 39579 with an area of 24,442 square meters, more
or less; (2) The deed of real estate mortgage which is the subject of the extra-judicial
proceedings initiated by defendant Rodolfo Ganzon executed by plaintiffs Esteban
Tajanlangit and Randolph Tajanlangit in his favor was for the purpose of securing the
payment of P40,000.00 which formed part of the purchase price of Lot No. 1900; (3)
Incorporated in the aforesaid deed of absolute sale was a proviso to the effect that
vendor-defendant Rodolfo Ganzon guaranteed to have the occupants of the lot to
vacate the premises within 120 days after the execution thereof, to wit:
xxx xxx xxx
The vendor warrants to the vendee peaceful possession of the above- mentioned
parcel of land and that the said vendor shall see to it that all occupants thereof at the
execution of this deed shall vacate the premises within a period of one hundred twenty
(120) days computed from the date of the execution of this document.
(4) The aforestated guaranty was violated by defendant Ganzon since the occupants
of the said lot up to the present are still within the premises of the lot; and (5) The
extra-judicial foreclosure is illegal since defendant Ganzon committed a breach in his
warranty and the deed of real estate mortgage does not contain any stipulation
authorizing mortgagee Ganzon to extrajudicially foreclose the mortgaged property.
On March 28, 1980 the petitioners filed their answer to the amended complaint. They
admitted the veracity of the deed of absolute sale covering said Lot No. 1900 but
denied that the real estate mortgage covering Lot No. 1901 subject of the extra-judicial
foreclosure proceedings was executed by Esteban Tajanlangit and Randolph
Tajanlangit in favor of Rodolfo Ganzon to secure the payment of the balance of the
purchase price of Lot No. 1900. They maintained that the real estate mortgage was an
entirely different transaction between the Tajanlangits and Ganzon from the sale of Lot
No. 1900 embodied in the absolute deed of sale of realty. They further maintained that
the extra-judicial foreclosure proceedings would be in accordance with the terms and
conditions of the said mortgage.
After the issues had been joined but before actual trial, the private respondents filed a
"Motion For Release Of Real Estate And For The Clerk Of Court To Accept Bond Or
Cash In Lieu Thereof," to which the petitioners interposed an Opposition.
In an order dated November 20, 1980, the respondent court granted the respondents'
motion. The order states:
This is a Motion for Release of Real Estate Mortgage and for the Clerk of Court to
Accept Bond or Cash in Lieu Thereof.
It appears that defendant sold to Esteban Tajanlangit, Jr. Lot No. 1900 of the
Cadastral Survey of Iloilo under Transfer Certificate of Title No. T- 39579. The
document of sale provides that the vendee who is the defendant herein, promised to
exclude from the premises the occupants. To secure the unpaid balance of
P40,000.00, plaintiffs executed a real estate mortgage on their Lot No. 1901-4-61-B-1-
1 of the subdivision plan Psd-274802. Because defendant failed to clear the
occupants of Lot No. 1900, as provided for in the contract of sale, plaintiffs withheld
payment of the P40,000.00. To clear the title of Lot No. 1901-E-61-B-1-1 plaintiffs are
willing to submit a bond in the sum of P80,000.00 which is double the consideration of
the mortgage.
WHEREFORE, in the interest of justice, considering that plaintiffs are willing and able
to pay the P40,000.00 and considering further that defendant has not yet cleared the
premises he sold to plaintiffs of tenants, the Register of Deeds of Iloilo City is ordered
to cancel the mortgage lien on Transfer Certificate of Title No. T-50324, upon showing
by the plaintiffs that they have put up the surety bond in the sum of P80,000.00. "
(Annex "F", Rollo, p. 58)
On January 28, 1981, the respondents after receipt of the aforesaid order, put up a
surety bond in the amount of P80,000.00 with the Summa Insurance Corporation as
surety (Annex " G ") for the approval of the respondent court,
On February 14, 1981, the petitioners filed an Urgent Motion for Reconsideration Of
The Order Dated November 20, 1980, And Opposition To The Approval of Surety
Bond.
The respondent court in its order dated February 24, 1981, denied the aforesaid
motion. The order states:
Finding the motion filed by plaintiff through counsel for approval of surety bond well
taken and considering that the opposition filed by defendants does not question the
validity of the surety bond itself but is anchored upon grounds that had already been
passed upon by this Court in the order dated November 20, 1980, the surety bond in
the amount of P80,000.00 issued by Summa Insurance Corporation is hereby
approved.
The defendant Rodolfo T. Ganzon, through Atty. Salvador Cabaluna, Jr., is hereby
ordered to surrender to the plaintiffs, through Atty. Hannibal de los Reyes the owner's
copy of TCT No. 50324, so that the mortgage annotated therein in favor of defendant
Rodolfo T. Ganzon could be duly cancelled. (Annex "I", Rollo, p. 65).
Hence, the instant petition.
On March 18, 198 1, we issued a temporary restraining order enjoining the
respondents from enforcing the orders dated November 20, 1980 and February 24,
1981 of the Court of First Instance of Iloilo, Branch I at Iloilo City.
On July 8, 1981, we gave due course to the petition and required the parties to submit
their respective memoranda.
As stated earlier, the issue raised before us is whether or not the trial court may order
the cancellation of a mortgage lien annotated in a Torrens Certificate of Title to secure
the payment of a promissory note and substitute such mortgage lien with a surety
bond approved by the same court to secure the payment of the promissory note.
In issuing its November 20, 1980 order, the trial court before trial on the merits of the
case assumed that the real estate mortgage subject of the extra- judicial foreclosure
proceedings was indeed a security for the payment of a P40,000.00 promissory note
which answered for the balance of the purchase price of the sale between Ganzon as
vendor and Esteban Tajanlangit was vendee of Lot No. 1900. With this assumption,
the trial court concluded that Rodolfo Ganzon violated his warranty that he would clear
the parcel of land of its occupants within 120 days after the execution of the deed of
absolute sale of realty. On this premise and upon motion of the private respondents,
the court ordered the Register of Deeds to cancel the mortgage lien annotated in the
Transfer Certificate of Title covering the mortgaged parcel of land and to substitute
therein a surety bond approved by the trial court.
It must be noted that petitioner Rodolfo Ganzon vehemently denied the allegation that
the P 40,000.00, consideration of the promissory note which resulted in the execution
of the real estate mortgage to secure its payment was a balance of the purchase price
of Lot No. 1900. As earlier stated, Ganzon maintained in his Answer that the real
estate mortgage arose from a different transaction. At the pre-trial, what the parties
admitted were the existence and due execution of the documents, including the
absolute deed of sale of realty and the subject real estate mortgage. In connection
with the documents, the issues per the pre-trial order were "... whether or not the
documents express the true intention of the parties, and whether or not they complied
with the provisions of the document. (Rollo, p. 78) Hence, at that stage of the case,
the trial court's order dated November 20, 1980 had no factual basis.
Even on the assumption that the factual bases of the trial court's questioned orders
were justified by evidence in the records the same would still not be proper.
A mortgage is but an accessory contract. "The consideration of the mortgage is the
same consideration of the principal contract without which it cannot exist as an
independent contract." (Banco de Oro v. Bayuga, 93 SCRA 443, citing China Banking
Corporation v. Lichauco, 46 Phil. 460). On the effects of a mortgage we ruled in
Philippine National Bank v. Mallorca (21 SCRA 694):
xxx xxx xxx
... By Article 2126 of the Civil Code, (Formerly Article 1876 of the Civil Code of Spain
of 1889.) a 'mortgage directly and immediately subjects the property upon which it is
imposed, whoever the possessor may be, to the fulfillment of the obligation for whose
security it was constituted.' Sale or transfer cannot affect or release the mortgage. A
purchaser is necessarily bound to acknowledge and respect the encumbrance to
which is subject the purchased thing and which is at the disposal of the creditor 'in
order that he, under the terms of the contract, may recover the amount of his credit
therefrom.' (Bischoff vs. Pomar, 12 Phil. 690, 700) For, a recorded real estate is a right
in rem, a lien on the property whoever its owner may be. (Altavas, The Law of
Mortgages in the Philippine Islands, 1924 ed., p. 2) Because the personality of the
owner is disregarded; the mortgage subsists notwithstanding changes of ownership;
the last transferee is just as much of a debtor as the first one; and this, independent of
whether the transferee knows or not the person of the mortgagee. (Id., at p. 6) So it is,
that a mortgage lien is inseparable from the property mortgaged. All subsequent
purchasers thereof must respect the mortgage, whether the transfer to them be with
or without the consent of the mortgagee. For, the mortgage, until discharge, follows
the property. (Pea, Registration of Land Titles and Deeds, 1961 ed., p. 225;
emphasis supplied. See also V. Tolentino, Civil Code of the Philippines, 1962 ed., p.
477)
Applying the principles underlying the nature of a mortgage, the real estate mortgage
constituted on Lot No. 1901-E-61-B-lF of the subdivision plan Psd-27482, located in
the District of Molo, Iloilo City covered by Transfer Certificate of Title No. T-50324 can
not be substituted by a surety bond as ordered by the trial court. The mortgage lien in
favor of Petitioner Rodolfo Ganzon is inseparable from the mortgaged property. It is a
right in rem, a lien on the property. To substitute the mortgage with a surety bond
would convert such lien from a right in rem, to a right in personam. This conversion
can not be ordered for it would abridge the rights of the mortgagee under the
mortgage contract.
Moreover, the questioned orders violate the non-impairment of contracts clause
guaranteed under the Constitution. Substitution of the mortgage with a surety bond to
secure the payment of the P40,000.00 note would in effect change the terms and
conditions of the mortgage contract. Even before trial on the very issues affecting the
contract, the respondent court has directed a deviation from its terms, diminished its
efficiency, and dispensed with a primary condition.
WHEREFORE, the instant petition is hereby GRANTED. The Orders dated November
20, 1980 and February 24, 1981 of the trial court are SET ASIDE. Our March 18, 1981
Temporary Restraining Order is made PERMANENT. No costs.
SO ORDERED.