Consti Cases Page 2

Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-5279 October 31, 1955
PHILIPPINE ASSOCIATION OF COLLEGES AND UNIVERSITIES, ETC., petitioner,

vs.
SECRETARY OF EDUCATION and the BOARD OF TEXTBOOKS, respondents.
Manuel C. Briones, Vicente G. Sinco, Manuel V. Gallego and Enrique M. Fernando for petitioner.
Office of the Solicitor General Pompeyo Diaz and Assistant Solicitor General Francisco Carreon for
respondents.
BENGZON, J.:
The petitioning colleges and universities request that Act No. 2706 as amended by Act No. 3075 and
Commonwealth Act No. 180 be declared unconstitutional, because: A. They deprive owners of schools and
colleges as well as teachers and parents of liberty and property without due process of law; B. They deprive
parents of their natural rights and duty to rear their children for civic efficiency; and C. Their provisions
conferring on the Secretary of Education unlimited power and discretion to prescribe rules and standards
constitute an unlawful delegation of legislative power.
A printed memorandum explaining their position in extenso is attached to the record.
The Government's legal representative submitted a mimeographed memorandum contending that, (1) the
matter constitutes no justiciable controversy exhibiting unavoidable necessity of deciding the constitutional
questions; (2) petitioners are in estoppel to challenge the validity of the said acts; and (3) the Acts are
constitutionally valid.
Petitioners submitted a lengthy reply to the above arguments.
Act No. 2706 approved in 1917 is entitled, "An Act making the inspection and recognition of private schools
and colleges obligatory for the Secretary of Public Instruction." Under its provisions, the Department of
Education has, for the past 37 years, supervised and regulated all private schools in this country apparently
without audible protest, nay, with the general acquiescence of the general public and the parties concerned.
It should be understandable, then, that this Court should be doubly reluctant to consider petitioner's demand
for avoidance of the law aforesaid, specially where, as respondents assert, petitioners suffered no wrong—
nor allege any—from the enforcement of the criticized statute.
1|Constitutional Law I Page 2

It must be evident to any one that the power to declare a legislative enactment void is one which
the judge, conscious of the fallability of the human judgment, will shrink from exercising in any case
where he can conscientiously and with due regard to duty and official oath decline the
responsibility. (Cooley Constitutional Limitations, 8th Ed., Vol. I, p. 332.)
When a law has been long treated as constitutional and important rights have become dependent
thereon, the Court may refuse to consider an attack on its validity. (C. J. S. 16, p. 204.)
As a general rule, the constitutionality of a statute will be passed on only if, and to the extent that, it
is directly and necessarily involved in a justiciable controversy and is essential to the protection of
the rights of the parties concerned. (16 C. J. S., p. 207.)
In support of their first proposition petitioners contend that the right of a citizen to own and operate a school
is guaranteed by the Constitution, and any law requiring previous governmental approval or permit before
such person could exercise said right, amounts to censorship of previous restraint, a practice abhorent to our
system of law and government. Petitioners obviously refer to section 3 of Act No. 2706 as amended which
provides that before a private school may be opened to the public it must first obtain a permit from the
Secretary of Education. The Solicitor General on the other hand points out that none of the petitioners has
cause to present this issue, because all of them have permits to operate and are actually operating by virtue
of their permits.1 And they do not assert that the respondent Secretary of Education has threatened to revoke
their permits. They have suffered no wrong under the terms of law—and, naturally need no relief in the form
they now seek to obtain.
It is an established principle that to entitle a private individual immediately in danger of sustaining a

direct injury as the result of that action and it is not sufficient that he has merely a general to invoke
the judicial power to determine the validity of executive or legislative action he must show that he
has sustained or is interest common to all members of the public. (Ex parte Levitt, 302 U. S. 633 82
L. Ed. 493.)
Courts will not pass upon the constitutionality of a law upon the complaint of one who fails to show
that he is injured by its operation. (Tyler vs. Judges, 179 U. S. 405; Hendrick vs. Maryland, 235 U.
S. 610; Coffman vs. Breeze Corp., 323 U. S. 316-325.)
The power of courts to declare a law unconstitutional arises only when the interests of litigant
require the use of that judicial authority for their protection against actual interference, a
hypothetical threat being insufficient. (United Public Works vs. Mitchell, 330 U .S. 75; 91 L. Ed.
754.)
Bona fide suit.—Judicial power is limited to the decision of actual cases and controversies. The
authority to pass on the validity of statutes is incidental to the decision of such cases where
conflicting claims under the Constitution and under a legislative act assailed as contrary to the
Constitution are raised. It is legitimate only in the last resort, and as necessity in the determination
of real, earnest, and vital controversy between litigants. (Tañada and Fernando, Constitution of the
Philippines, p. 1138.)

Mere apprehension that the Secretary of Education might under the law withdraw the permit of one of
petitioners does not constitute a justiciable controversy. (Cf. Com. ex rel Watkins vs. Winchester Waterworks
(Ky.) 197 S. W. 2d. 771.)
And action, like this, is brought for a positive purpose, nay, to obtain actual and positive relief.
(Salonga vs. Warner Barnes, L-2245, January, 1951.) Courts do not sit to adjudicate mere academic
questions to satisfy scholarly interest therein, however intellectually solid the problem may be. This is
specially true where the issues "reach constitutional dimensions, for then there comes into play regard for the
court's duty to avoid decision of constitutional issues unless avoidance becomes evasion." (Rice vs. Sioux
City, U. S. Sup. Ct. Adv. Rep., May 23, 1995, Law Ed., Vol. 99, p. 511.)
The above notwithstanding, in view of the several decisions of the United States Supreme Court quoted by
petitioners, apparently outlawing censorship of the kind objected to by them, we have decided to look into the
matter, lest they may allege we refuse to act even in the face of clear violation of fundamental personal rights
of liberty and property.
Petitioners complain that before opening a school the owner must secure a permit from the Secretary of
Education. Such requirement was not originally included in Act No. 2706. It was introduced by
Commonwealth Act No. 180 approved in 1936. Why?
In March 1924 the Philippine Legislature approved Act No. 3162 creating a Board of Educational Survey to
make a study and survey of education in the Philippines and of all educational institutions, facilities and
agencies thereof. A Board chairmaned by Dr. Paul Munroe, Columbia University, assisted by a staff of
carefully selected technical members performed the task, made a five-month thorough and impartial
examination of the local educational system, and submitted a report with recommendations, printed as a
book of 671 pages. The following paragraphs are taken from such report:
PRIVATE-ADVENTURE SCHOOLS
There is no law or regulation in the Philippine Islands today to prevent a person, however
disqualified by ignorance, greed, or even immoral character, from opening a school to teach the
young. It it true that in order to post over the door "Recognized by the Government," a private
adventure school must first be inspected by the proper Government official, but a refusal to grant
such recognition does not by any means result in such a school ceasing to exist. As a matter of
fact, there are more such unrecognized private schools than of the recognized variety. How many,
no one knows, as the Division of Private Schools keeps records only of the recognized type.
Conclusion.—An unprejudiced consideration of the fact presented under the caption Private
Adventure Schools leads but to one conclusion, viz.: the great majority of them from primary grade
to university are money-making devices for the profit of those who organize and administer them.
The people whose children and youth attend them are not getting what they pay for. It is obvious
that the system constitutes a great evil. That it should be permitted to exist with almost no
supervision is indefensible. The suggestion has been made with the reference to the private
institutions of university grade that some board of control be organized under legislative control to

supervise their administration. The Commission believes that the recommendations it offers at the
end of this chapter are more likely to bring about the needed reforms.
Recommendations.—The Commission recommends that legislation be enacted to prohibit the

opening of any school by an individual or organization without the permission of the Secretary of
Public Instruction. That before granting such permission the Secretary assure himself that such
school measures up to proper standards in the following respects, and that the continued existence
of the school be dependent upon its continuing to conform to these conditions:
(1) The location and construction of the buildings, the lighting and ventilation of the rooms, the
nature of the lavatories, closets, water supply, school furniture and apparatus, and methods of
cleaning shall be such as to insure hygienic conditions for both pupils and teachers.
(2) The library and laboratory facilities shall be adequate to the needs of instruction in the subjects
taught.
(3) The classes shall not show an excessive number of pupils per teacher. The Commission
recommends 40 as a maximum.
(4) The teachers shall meet qualifications equal to those of teachers in the public schools of the
same grade.
xxx xxx xxx
In view of these findings and recommendations, can there be any doubt that the Government in the exercise
of its police power to correct "a great evil" could validly establish the "previous permit" system objected to by
petitioners? This is what differentiates our law from the other statutes declared invalid in other jurisdictions.
And if any doubt still exists, recourse may now be had to the provision of our Constitution that "All
educational institutions shall be under the supervision and subject to regulation by the State." (Art. XIV, sec.
5.) The power to regulate establishments or business occupations implies the power to require a permit or
license. (53 C. J. S. 4.)
What goes for the "previous permit" naturally goes for the power to revoke such permit on account of
violation of rules or regulations of the Department.
II. This brings us to the petitioners' third proposition that the questioned statutes "conferring on the Secretary
of Education unlimited power and discretion to prescribe rules and standards constitute an unlawful
delegation of legislative power."
This attack is specifically aimed at section 1 of Act No. 2706 which, as amended, provides:
It shall be the duty of the Secretary of Public Instruction to maintain a general standard of efficiency
in all private schools and colleges of the Philippines so that the same shall furnish adequate
instruction to the public, in accordance with the class and grade of instruction given in them, and

for this purpose said Secretary or his duly authorized representative shall have authority to advise,
inspect, and regulate said schools and colleges in order to determine the efficiency of instruction
given in the same,
"Nowhere in this Act" petitioners argue "can one find any description, either general or specific, of what
constitutes a 'general standard of efficiency.' Nowhere in this Act is there any indication of any basis or
condition to ascertain what is 'adequate instruction to the public.' Nowhere in this Act is there any statement
of conditions, acts, or factors, which the Secretary of Education must take into account to determine the
'efficiency of instruction.'"
The attack on this score is also extended to section 6 which provides:
The Department of Education shall from time to time prepare and publish in pamphlet form the
minimum standards required of primary, intermediate, and high schools, and colleges granting the
degrees of Bachelor of Arts, Bachelor of Science, or any other academic degree. It shall also from
time to time prepare and publish in pamphlet form the minimum standards required of law, medical,
dental, pharmaceutical, engineering, agricultural and other medical or vocational schools or
colleges giving instruction of a technical, vocational or professional character.
Petitioners reason out, "this section leaves everything to the uncontrolled discretion of the Secretary of
Education or his department. The Secretary of Education is given the power to fix the standard. In plain
language, the statute turns over to the Secretary of Education the exclusive authority of the legislature to
formulate standard. . . .."
It is quite clear the two sections empower and require the Secretary of Education to prescribe rules fixing
minimum standards of adequate and efficient instruction to be observed by all such private schools and
colleges as may be permitted to operate. The petitioners contend that as the legislature has not fixed the
standards, "the provision is extremely vague, indefinite and uncertain"—and for that reason constitutionality
objectionable. The best answer is that despite such alleged vagueness the Secretary of Education has fixed
standards to ensure adequate and efficient instruction, as shown by the memoranda fixing or revising
curricula, the school calendars, entrance and final examinations, admission and accreditation of students
etc.; and the system of private education has, in general, been satisfactorily in operation for 37 years. Which
only shows that the Legislature did and could, validly rely upon the educational experience and training of
those in charge of the Department of Education to ascertain and formulate minimum requirements of
adequate instruction as the basis of government recognition of any private school.
At any rate, petitioners do not show how these standards have injured any of them or interfered with their
operation. Wherefore, no reason exists for them to assail the validity of the power nor the exercise of the
power by the Secretary of Education.
True, the petitioners assert that, the Secretary has issued rules and regulations "whimsical and capricious"
and that such discretionary power has produced arrogant inspectors who "bully heads and teachers of
private schools." Nevertheless, their remedy is to challenge those regulations specifically, and/or to ring
those inspectors to book, in proper administrative or judicial proceedings—not to invalidate the law. For it

needs no argument, to show that abuse by the officials entrusted with the execution of a statute does not per
se demonstrate the unconstitutionality of such statute.
Anyway, we find the defendants' position to be sufficiently sustained by the decision in Alegra vs. Collector of
Customs, 53 Phil., 394 upon holding the statute that authorized the Director of Agriculture to "designate
standards for the commercial grades of abaca, maguey and sisal" against vigorous attacks on the ground of
invalid delegation of legislative power.
Indeed "adequate and efficient instruction" should be considered sufficient, in the same way as "public
welfare" "necessary in the interest of law and order" "public interest" and "justice and equity and substantial
merits of the case" have been held sufficient as legislative standards justifying delegation of authority to
regulate. (See Tañada and Fernando, Constitution of the Philippines, p. 793, citing Philippine cases.)
On this phase of the litigation we conclude that there has been no undue delegation of legislative power.
In this connection, and to support their position that the law and the Secretary of Education have
transcended the governmental power of supervision and regulation, the petitioners appended a list of
circulars and memoranda issued by the said Department. However they failed to indicate which of such
official documents was constitutionally objectionable for being "capricious," or pain "nuisance"; and it is one
of our decisional practices that unless a constitutional point is specifically raised, insisted upon and
adequately argued, the court will not consider it. (Santiago vs. Far Eastern, 73 Phil., 408.)
We are told that such list will give an idea of how the statute has placed in the hands of the Secretary of
Education complete control of the various activities of private schools, and why the statute should be struck
down as unconstitutional. It is clear in our opinion that the statute does not in express terms give the
Secretary complete control. It gives him powers to inspect private schools, to regulate their activities, to give
them official permits to operate under certain conditions, and to revoke such permits for cause. This does not
amount to complete control. If any of such Department circulars or memoranda issued by the Secretary go
beyond the bounds of regulation and seeks to establish complete control, it would surely be invalid.
Conceivably some of them are of this nature, but besides not having before us the text of such circulars, the
petitioners have omitted to specify. In any event with the recent approval of Republic Act No. 1124 creating
the National Board of Education, opportunity for administrative correction of the supposed anomalies or
encroachments is amply afforded herein petitioners. A more expeditious and perhaps more technically
competent forum exists, wherein to discuss the necessity, convenience or relevancy of the measures
criticized by them. (See also Republic Act No. 176.)
If however the statutes in question actually give the Secretary control over private schools, the question
arises whether the power of supervision and regulation granted to the State by section 5 Article XIV was
meant to include control of private educational institutions. It is enough to point out that local educators and
writers think the Constitution provides for control of Education by the State. (See Tolentino, Government of
the Philippine Constitution, Vol. II, p. 615; Benitez, Philippine Social Life and Progress, p. 335.)
The Constitution (it) "provides for state control of all educational institutions" even as it enumerates certain
fundamental objectives of all education to wit, the development of moral character, personal discipline, civic

conscience and vocational efficiency, and instruction in the duties of citizenship. (Malcolm & Laurel,
Philippine Constitutional Law, 1936.)
The Solicitor General cities many authorities to show that the power to regulate means power to control, and
quotes from the proceedings of the Constitutional Convention to prove that State control of private education
was intended by the organic law. It is significant to note that the Constitution grants power to supervise and
to regulate. Which may mean greater power than mere regulation.
III. Another grievance of petitioners—probably the most significant—is the assessment of 1 per cent levied
on gross receipts of all private schools for additional Government expenses in connection with their
supervision and regulation. The statute is section 11-A of Act No. 2706 as amended by Republic Act No. 74
which reads as follows:
SEC. 11-A. The total annual expense of the Office of Private Education shall be met by the regular
amount appropriated in the annual Appropriation Act: Provided, however, That for additional
expenses in the supervision and regulation of private schools, colleges and universities and in the
purchase of textbook to be sold to student of said schools, colleges and universities and President
of the Philippines may authorize the Secretary of Instruction to levy an equitable assessment from
each private educational institution equivalent to one percent of the total amount accruing from
tuition and other fees: . . . and non-payment of the assessment herein provided by any private
school, college or university shall be sufficient cause for the cancellation by the Secretary of
Instruction of the permit for recognition granted to it.
Petitioners maintain that this is a tax on the exercise of a constitutional right—the right to open a school, the
liberty to teach etc. They claim this is unconstitutional, in the same way that taxes on the privilege of selling
religious literature or of publishing a newspaper—both constitutional privileges—have been held, in the
United States, to be invalid as taxes on the exercise of a constitutional right.
The Solicitor General on the other hand argues that insofar as petitioners' action attempts to restrain the
further collection of the assessment, courts have no jurisdiction to restrain the collection of taxes by
injunction, and in so far as they seek to recover fees already paid the suit, it is one against the State without
its consent. Anyway he concludes, the action involving "the legality of any tax impost or assessment" falls
within the original jurisdiction of Courts of First Instance.
There are good grounds in support of Government's position. If this levy of 1 per cent is truly a mere fee—
and not a tax—to finance the cost of the Department's duty and power to regulate and supervise private
schools, the exaction may be upheld; but such point involves investigation and examination of relevant data,
which should best be carried out in the lower courts. If on the other hand it is a tax, petitioners' issue would
still be within the original jurisdiction of the Courts of First Instance.
The last grievance of petitioners relates to the validity of Republic Act No. 139 which in its section 1 provides:
The textbooks to be used in the private schools recognized or authorized by the government shall
be submitted to the Board (Board of Textbooks) which shall have the power to prohibit the use of
any of said textbooks which it may find to be against the law or to offend the dignity and honor of

the government and people of the Philippines, or which it may find to be against the general
policies of the government, or which it may deem pedagogically unsuitable.
This power of the Board, petitioners aver, is censorship in "its baldest form". They cite two U. S. cases (Miss.
and Minnesota) outlawing statutes that impose previous restraints upon publication of newspapers, or curtail
the right of individuals to disseminate teachings critical of government institutions or policies.
Herein lies another important issue submitted in the cause. The question is really whether the law may be
enacted in the exercise of the State's constitutional power (Art. XIV, sec. 5) to supervise and regulate private
schools. If that power amounts to control of private schools, as some think it is, maybe the law is valid. In this
connection we do not share the belief that section 5 has added new power to what the State inherently
possesses by virtue of the police power. An express power is necessarily more extensive than a mere
implied power. For instance, if there is conflict between an express individual right and the express power to
control private education it cannot off-hand be said that the latter must yield to the former—conflict of two
express powers. But if the power to control education ismerely implied from the police power, it is feasible to
uphold the express individual right, as was probably the situation in the two decisions brought to our
attention, of Mississippi and Minnesota, states where constitutional control of private schools is not expressly
produced.
However, as herein previously noted, no justiciable controversy has been presented to us. We are not
informed that the Board on Textbooks has prohibited this or that text, or that the petitioners refused or intend
to refuse to submit some textbooks, and are in danger of losing substantial privileges or rights for so refusing.
The average lawyer who reads the above quoted section of Republic Act 139 will fail to perceive anything
objectionable. Why should not the State prohibit the use of textbooks that are illegal, or offensive to the
Filipinos or adverse to governmental policies or educationally improper? What's the power of regulation and
supervision for? But those trained to the investigation of constitutional issues are likely to apprehend the
danger to civil liberties, of possible educational dictatorship or thought control, as petitioners' counsel foresee
with obvious alarm. Much depends, however, upon the execution and implementation of the statute. Not that
constitutionality depends necessarily upon the law's effects. But if the Board on Textbooks in its actuations
strictly adheres to the letter of the section and wisely steers a middle course between the Scylla of
"dictatorship" and the Charybdis of "thought control", no cause for complaint will arise and no occasion for
judicial review will develop. Anyway, and again, petitioners now have a more expeditious remedy thru an
administrative appeal to the National Board of Education created by Republic Act 1124.
Of course it is necessary to assure herein petitioners, that when and if, the dangers they apprehend
materialize and judicial intervention is suitably invoked, after all administrative remedies are exhausted, the
courts will not shrink from their duty to delimit constitutional boundaries and protect individual liberties.
IV. For all the foregoing considerations, reserving to the petitioners the right to institute in the proper court,
and at the proper time, such actions as may call for decision of the issue herein presented by them, this
petition for prohibition will be denied. So ordered.
Paras, C. J., Padilla, Montemayor, Reyes, A., and Jugo, JJ., concur.

SUPREME COURT
Manila
EN BANC
G.R. No. 118577 March 7, 1995
JUANITO MARIANO, JR. et al., petitioners,

vs.
THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY, THE
MUNICIPAL TREASURER, AND SANGGUNIANG BAYAN OF MAKATI, respondents.
G.R. No. 118627 March 7, 1995
JOHN R. OSMEÑA, petitioner,

vs.
THE COMMISSION ON ELECTIONS, THE MUNICIPALITY OF MAKATI, HON. JEJOMAR BINAY,
MUNICIPAL TREASURER, AND SANGGUNIANG BAYAN OF MAKATI, respondents.
PUNO, J.:
At bench are two (2) petitions assailing certain provisions of Republic Act No. 7854 as unconstitutional. R.A.
No. 7854 as unconstitutional. R.A. No. 7854 is entitled, "An Act Converting the Municipality of Makati Into a
Highly Urbanized City to be known as the City of Makati."1
G.R. No. 118577 involves a petition for prohibition and declaratory relief. It was filed by petitioners Juanito
Mariano, Jr., Ligaya S. Bautista, Teresita Tibay, Camilo Santos, Frankie Cruz, Ricardo Pascual, Teresita
Abang, Valentina Pitalvero, Rufino Caldoza, Florante Alba, and Perfecto Alba. Of the petitioners, only
Mariano, Jr., is a resident of Makati. The others are residents of Ibayo Ususan, Taguig, Metro Manila. Suing
as taxpayers, they assail as unconstitutional sections 2, 51, and 52 of R.A. No. 7854 on the following
grounds:
1. Section 2 of R.A. No. 7854 did not properly identify the land area or territorial
jurisdiction of Makati by metes and bounds, with technical descriptions, in violation of
Section 10, Article X of the Constitution, in relation to Sections 7 and 450 of the Local
Government Code;

2. Section 51 of R.A. No. 7854 attempts to alter or restart the "three consecutive term"
limit for local elective officials, in violation of Section 8, Article X and Section 7, Article VI
of the Constitution.
3. Section 52 of R.A. No. 7854 is unconstitutional for:
(a) it increased the legislative district of Makati only by special law

(the Charter in violation of the constitutional provision requiring a
general reapportionment law to be passed by Congress within three
(3) years following the return of every census;
(b) the increase in legislative district was not expressed in the title of
the bill; and
(c) the addition of another legislative district in Makati is not in accord

with Section 5 (3), Article VI of the Constitution for as of the latest
survey (1990 census), the population of Makati stands at only
450,000.
G.R. No. 118627 was filed by the petitioner John H. Osmeña as senator, taxpayer, and concerned citizen.
Petitioner assails section 52 of R.A. No. 7854 as unconstitutional on the same grounds as aforestated.
We find no merit in the petitions.
Section 2, Article I of R.A. No. 7854 delineated the land areas of the proposed city of Makati, thus:
Sec. 2. The City of Makati. — The Municipality of Makati shall be converted into a highly
urbanized city to be known as the City of Makati, hereinafter referred to as the
City, which shall comprise the present territory of the Municipality of Makati in
Metropolitan Manila Area over which it has jurisdiction bounded on the northeast by
Pasig River and beyond by the City of Mandaluyong and the Municipality of Pasig; on the
southeast by the municipalities of Pateros and Taguig; on the southwest by the City of
Pasay and the Municipality of Taguig; and, on the northwest, by the City of Manila.
The foregoing provision shall be without prejudice to the resolution by the appropriate
agency or forum of existing boundary disputes or cases involving questions of territorial
jurisdiction between the City of Makati and the adjoining local government units.
(Emphasis supplied)
In G.R. No. 118577, petitioners claim that this delineation violates sections 7 and 450 of the Local
Government Code which require that the area of a local government unit should be made by metes and
bounds with technical descriptions.2
10 | C o n s t i t u t i o n a l L a w I P a g e 2
The importance of drawing with precise strokes the territorial boundaries of a local unit of government cannot
be overemphasized. The boundaries must be clear for they define the limits of the territorial jurisdiction of a
local government unit. It can legitimately exercise powers of government only within the limits, its acts
are ultra vires. Needless to state, any uncertainty in the boundaries of local government units will sow costly
conflicts in the exercise of governmental powers which ultimately will prejudice the people's welfare. This is
the evil sought to avoided by the Local Government Code in requiring that the land area of a local
government unit must be spelled out in metes and bounds, with technical descriptions.
Given the facts of the cases at bench, we cannot perceive how this evil can be brought about by the
description made in section 2 of R.A. No. 7854, Petitioners have not demonstrated that the delineation of the
land area of the proposed City of Makati will cause confusion as to its boundaries. We note that said
delineation did not change even by an inch the land area previously covered by Makati as a municipality.
Section 2 did not add, subtract, divide, or multiply the established land area of Makati. In language that
cannot be any clearer, section 2 stated that, the city's land area "shall comprise the present territory of the
municipality."
The deliberations of Congress will reveal that there is a legitimate reason why the land area of the proposed
City of Makati was not defined by metes and bounds, with technical descriptions. At the time of the
consideration of R.A. No. 7854, the territorial dispute between the municipalities of Makati and Taguig over
Fort Bonifacio was under court litigation. Out of a becoming sense of respect to co-equal department of
government, legislators felt that the dispute should be left to the courts to decide. They did not want to
foreclose the dispute by making a legislative finding of fact which could decide the issue. This would have
ensued if they defined the land area of the proposed city by its exact metes and bounds, with technical
descriptions.3 We take judicial notice of the fact that Congress has also refrained from using the metes and
bounds description of land areas of other local government units with unsettled boundary disputes.4
We hold that the existence of a boundary dispute does not per se present an insurmountable difficulty which
will prevent Congress from defining with reasonable certitude the territorial jurisdiction of a local government
unit. In the cases at bench, Congress maintained the existing boundaries of the proposed City of Makati but
as an act of fairness, made them subject to the ultimate resolution by the courts. Considering these peculiar
circumstances, we are not prepared to hold that section 2 of R.A. No. 7854 is unconstitutional. We sustain
the submission of the Solicitor General in this regard, viz.:
Going now to Sections 7 and 450 of the Local Government Code, it is beyond cavil that
the requirement stated therein, viz.: "the territorial jurisdiction of newly created or
converted cities should be described by meted and bounds, with technical descriptions"
— was made in order to provide a means by which the area of said cities may be
reasonably ascertained. In other words, the requirement on metes and bounds was
meant merely as tool in the establishment of local government units. It is not an end in
itself. Ergo, so long as the territorial jurisdiction of a city may be reasonably
ascertained, i.e., by referring to common boundaries with neighboring municipalities, as
in this case, then, it may be concluded that the legislative intent behind the law has been
sufficiently served.
Certainly, Congress did not intends that laws creating new cities must contain therein
detailed technical descriptions similar to those appearing in Torrens titles, as petitioners
seem to imply. To require such description in the law as a condition sine qua non for its
validity would be to defeat the very purpose which the Local Government Code to seeks
to serve. The manifest intent of the Code is to empower local government units and to
give them their rightful due. It seeks to make local governments more responsive to the
needs of their constituents while at the same time serving as a vital cog in national
development. To invalidate R.A. No. 7854 on the mere ground that no cadastral type of
description was used in the law would serve the letter but defeat the spirit of the Code. It
then becomes a case of the master serving the slave, instead of the other way around.
This could not be the intendment of the law.
Too well settled is the rule that laws must be enforced when ascertained, although it may
not be consistent with the strict letter of the statute. Courts will not follow the letter of the
statute when to do so would depart from the true intent of the legislature or would
otherwise yield conclusions inconsistent with the general purpose of the act. (Torres v.
Limjap, 56 Phil., 141; Tañada v. Cuenco, 103 Phil. 1051; Hidalgo v. Hidalgo, 33 SCRA
1105). Legislation is an active instrument of government, which, for purposes of
interpretation, means that laws have ends to achieve, and statutes should be so
construed as not to defeat but to carry out such ends and purposes (Bocolbo v.
Estanislao, 72 SCRA 520). The same rule must indubitably apply to the case at bar.
II
Petitioners in G.R. No. 118577 also assail the constitutionality of section 51, Article X of R.A. No. 7854.
Section 51 states:
Sec. 51. Officials of the City of Makati. — The represent elective officials of the
Municipality of Makati shall continue as the officials of the City of Makati and shall
exercise their powers and functions until such time that a new election is held and the
duly elected officials shall have already qualified and assume their offices: Provided, The
new city will acquire a new corporate existence. The appointive officials and employees
of the City shall likewise continues exercising their functions and duties and they shall be
automatically absorbed by the city government of the City of Makati.
They contend that this section collides with section 8, Article X and section 7, Article VI of the Constitution
which provide:
Sec. 8. The term of office of elective local officials, except barangay officials, which shall
be determined by law, shall be three years and no such official shall serve for more than
three consecutive terms. Voluntary renunciation of the office for any length of time shall
not be considered as an interruption in the continuity of his service for the full term for
which he was elected.
xxx xxx xxx
Sec. 7. The Members of the House of Representatives shall be elected for a term of
three years which shall begin, unless otherwise provided by law, at noon on the thirtieth
day of June next following their election.
No Member of the House of Representatives shall serve for more than three consecutive
terms. Voluntary renunciation of the office for any length of time shall not be considered
as an interruption in the continuity of his service for the full term for which he was
elected.
Petitioners stress that under these provisions, elective local officials, including Members of the House of
Representative, have a term of three (3) years and are prohibited from serving for more than
three (3) consecutive terms. They argue that by providing that the new city shall acquire a new corporate
existence, section 51 of R.A. No. 7854 restarts the term of the present municipal elective officials of Makati
and disregards the terms previously served by them. In particular, petitioners point that section 51 favors the
incumbent Makati Mayor, respondent Jejomar Binay, who has already served for two (2) consecutive terms.
They further argue that should Mayor Binay decide to run and eventually win as city mayor in the coming
elections, he can still run for the same position in 1998 and seek another three-year consecutive term since
his previous three-year consecutive term as municipal mayor would not be counted. Thus, petitioners
conclude that said section 51 has been conveniently crafted to suit the political ambitions of respondent
Mayor Binay.
We cannot entertain this challenge to the constitutionality of section 51. The requirements before a litigant
can challenge the constitutionality of a law are well delineated. They are: 1) there must be an actual case or
controversy; (2) the question of constitutionality must be raised by the proper party; (3) the constitutional
question must be raised at the earliest possible opportunity; and (4) the decision on the constitutional
question must be necessary to the determination of the case itself. 5
Petitioners have far from complied with these requirements. The petition is premised on the occurrence of
many contingent events, i.e., that Mayor Binay will run again in this coming mayoralty elections; that he
would be re-elected in said elections; and that he would seek re-election for the same position in the 1998
elections. Considering that these contingencies may or may not happen, petitioners merely pose a
hypothetical issue which has yet to ripen to an actual case or controversy. Petitioners who are residents of
Taguig (except Mariano) are not also the proper parties to raise this abstract issue. Worse, they hoist this
futuristic issue in a petition for declaratory relief over which this Court has no jurisdiction.
III
Finally, petitioners in the two (2) cases at bench assail the constitutionality of section 52, Article X of R.A. No.
7854. Section 52 of the Charter provides:
Sec. 52. Legislative Districts. — Upon its conversion into a highly-urbanized city, Makati
shall thereafter have at least two (2) legislative districts that shall initially correspond to
the two (2) existing districts created under Section 3(a) of Republic Act. No. 7166 as
implemented by the Commission on Elections to commence at the next national elections
to be held after the effectivity of this Act. Henceforth, barangays Magallanes, Dasmariñas
and Forbes shall be with the first district, in lieu of Barangay Guadalupe-Viejo which shall
form part of the second district. (emphasis supplied)
They contend. that the addition of another legislative district in Makati is unconstitutional for: (1)
reapportionment6cannot made by a special law, (2) the addition of a legislative district is not expressed in the
title of the bill7 and (3) Makati's population, as per the 1990 census, stands at only four hundred fifty
thousand (450,000).
These issues have been laid to rest in the recent case of Tobias v. Abalos.8 In said case, we ruled that
reapportionment of legislative districts may be made through a special law, such as in the charter of a new
city. The Constitution9 clearly provides that Congress shall be composed of not more than two hundred fifty
(250) members, unless otherwise fixed by law. As thus worded, the Constitution did not preclude Congress
from increasing its membership by passing a law, other than a general reapportionment of the law. This is its
exactly what was done by Congress in enacting R.A. No. 7854 and providing for an increase in Makati's
legislative district. Moreover, to hold that reapportionment can only be made through a general
apportionment law, with a review of all the legislative districts allotted to each local government unit
nationwide, would create an inequitable situation where a new city or province created by Congress will be
denied legislative representation for an indeterminate period of time. 10 The intolerable situations will deprive
the people of a new city or province a particle of their sovereignty. 11 Sovereignty cannot admit of any kind of
subtraction. It is indivisible. It must be forever whole or it is not sovereignty.
Petitioners cannot insist that the addition of another legislative district in Makati is not in accord with section
5(3), Article VI 12 of the Constitution for as of the latest survey (1990 census), the population of Makati stands
at only four hundred fifty thousand (450,000). 13 Said section provides, inter alia, that a city with a population
of at least two hundred fifty thousand (250,000) shall have at least one representative. Even granting that the
population of Makati as of the 1990 census stood at four hundred fifty thousand (450,000), its legislative
district may still be increased since it has met the minimum population requirement of two hundred fifty
thousand (250,000). In fact, section 3 of the Ordinance appended to the Constitution provides that a city
whose population has increased to more than two hundred fifty thousand (250,000) shall be entitled to at
least one congressional representative. 14
Finally, we do not find merit in petitioners' contention that the creation of an additional legislative district in
Makati should have been expressly stated in the title of the bill. In the same case of Tobias v. Abalos, op cit.,
we reiterated the policy of the Court favoring a liberal construction of the "one title-one subject" rule so as not
to impede legislation. To be sure, with Constitution does not command that the title of a law should exactly
mirror, fully index, or completely catalogue all its details. Hence, we ruled that "it should be sufficient
compliance if the title expresses the general subject and all the provisions are germane to such general
subject."
WHEREFORE, the petitions are hereby DISMISSED for lack of merit No costs.
SO ORDERED.
Narvasa, C.J., Feliciano, Padilla, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason, Vitug, Kapunan,
Mendoza and Francisco, JJ., concur.
EN BANC
G.R. No. 152295 July 9, 2002
ANTONIETTE V.C. MONTESCLAROS, MARICEL CARANZO, JOSEPHINE ATANGAN, RONALD

ATANGAN and CLARIZA DECENA, and OTHER YOUTH OF THE LAND SIMILARLY
SITUATED, petitioners,
vs.
COMMISSION ON ELECTIONS, DEPARTMENT OF INTERIOR AND LOCAL GOVERNMENT,
DEPARTMENT OF BUDGET AND MANAGEMENT, EXECUTIVE SECRETARY of the OFFICE OF THE
PRESIDENT, SENATOR FRANKLIN DRILON in his capacity as Senate President and SENATOR
AQUILINO PIMENTEL in his capacity as Minority Leader of the Senate of the Philippines,
CONGRESSMAN JOSE DE VENECIA in his capacity as Speaker, CONGRESSMAN AGUSTO L.
SYJOCO in his capacity as Chairman of the Committee on Suffrage and Electoral Reforms, and
CONGRESSMAN EMILIO C. MACIAS II in his capacity as Chairman of the Committee on Local
Government of the House of Representatives, THE PRESIDENT OF THE PAMBANSANG KATIPUNAN
NG MGA SANGGUNIANG KABATAAN, AND ALL THEIR AGENTS AND
REPRESENTATIVES, respondents.
CARPIO, J.:
The Case
Before us is a petition for certiorari, prohibition and mandamus with prayer for a temporary restraining order
or preliminary injunction. The petition seeks to prevent the postponement of the Sangguniang
Kabataan ("SK" for brevity) elections originally scheduled last May 6, 2002. The petition also seeks to
prevent the reduction of the age requirement for membership in the SK.
Petitioners, who are all 20 years old, filed this petition as a taxpayer's and class suit, on their own behalf and
on behalf of other youths similarly situated. Petitioners claim that they are in danger of being disqualified to
vote and be voted for in the SK elections should the SK elections on May 6, 2002 be postponed to a later
date. Under the Local Government Code of 1991 (R.A. No. 7160), membership in the SK is limited to youths
at least 15 but not more than 21 years old.
Petitioners allege that public respondents "connived, confederated and conspired" to postpone the May 6,
2002 SK elections and to lower the membership age in the SK to at least 15 but less than 18 years of age.
Petitioners assail the alleged conspiracy because youths at least 18 but not more than 21 years old will be
"summarily and unduly dismembered, unfairly discriminated, unnecessarily disenfranchised, unjustly
disassociated and obnoxiously disqualified from the SK organization."1
Thus, petitioners pray for the issuance of a temporary restraining order or preliminary injunction -
"a) To prevent, annul or declare unconstitutional any law, decree, Comelec resolution/directive and
other respondents' issuances, orders and actions and the like in postponing the May 6, 2002 SK
elections.
b) To command the respondents to continue the May 6, 2002 SK elections set by the present law
and in accordance with Comelec Resolutions No. 4713 and 4714 and to expedite the funding of the
SK elections.
c) In the alternative, if the SK elections will be postponed for whatever reason, there must be a
definite date for said elections, for example, July 15, 2002, and the present SK membership,
except those incumbent SK officers who were elected on May 6, 1996, shall be allowed to run for
any SK elective position even if they are more than 21 years old.
d) To direct the incumbent SK officers who are presently representing the SK in every sanggunian
and the NYC to vacate their post after the barangay elections."2
The Facts
The SK is a youth organization originally established by Presidential Decree No. 684 as the Kabataang
Barangay("KB" for brevity). The KB was composed of all barangay residents who were less than 18 years
old, without specifying the minimum age. The KB was organized to provide its members with the opportunity
to express their views and opinions on issues of transcendental importance.3
The Local Government Code of 1991 renamed the KB to SK and limited SK membership to those youths "at
least 15 but not more than 21 years of age."4 The SK remains as a youth organization in every barangay
tasked to initiate programs "to enhance the social, political, economic, cultural, intellectual, moral, spiritual,
and physical development of the youth."5 The SK in every barangay is composed of a chairperson and seven
members, all elected by the Katipunan ng Kabataan. The Katipunan ng Kabataan in every barangay is
composed of all citizens actually residing in the barangay for at least six months and who meet the
membership age requirement.
The first SK elections took place on December 4, 1992. RA No. 7808 reset the SK elections to the first
Monday of May of 1996 and every three years thereafter. RA No. 7808 mandated the Comelec to supervise
the conduct of the SK elections under rules the Comelec shall promulgate. Accordingly, the Comelec on
December 4, 2001 issued Resolution Nos. 47136 and 47147 to govern the SK elections on May 6, 2002.
On February 18, 2002, petitioner Antoniette V.C. Montesclaros ("Montesclaros" for brevity) sent a letter 8 to
the Comelec, demanding that the SK elections be held as scheduled on May 6, 2002. Montesclaros also
urged the Comelec to respond to her letter within 10 days upon receipt of the letter, otherwise, she will seek
judicial relief.
On February 20, 2002, Alfredo L. Benipayo ("Chairman Benipayo" for brevity), then Comelec Chairman,
wrote identical letters to the Speaker of the House9 and the Senate President10 about the status of pending
bills on the SK and Barangay elections. In his letters, the Comelec Chairman intimated that it was
"operationally very difficult" to hold both elections simultaneously in May 2002. Instead, the Comelec
Chairman expressed support for the bill of Senator Franklin Drilon that proposed to hold the Barangay
elections in May 2002 and postpone the SK elections to November 2002.
Ten days lapsed without the Comelec responding to the letter of Montesclaros. Subsequently, petitioners
received a copy of Comelec En Banc Resolution No. 476311 dated February 5, 2002 recommending to
Congress the postponement of the SK elections to November 2002 but holding the Barangay elections in
May 2002 as scheduled.12
On March 6, 2002, the Senate and the House of Representatives passed their respective bills postponing the
SK elections. On March 11, 2002, the Bicameral Conference Committee ("Bicameral Committee" for brevity)
of the Senate and the House came out with a Report13 recommending approval of the reconciled bill
consolidating Senate Bill No. 205014 and House Bill No. 4456.15 The Bicameral Committee's consolidated bill
reset the SK and Barangay elections to July 15, 2002 and lowered the membership age in the SK to at least
15 but not more than 18 years of age.
On March 11, 2002, petitioners filed the instant petition.
On March 11, 2002, the Senate approved the Bicameral Committee's consolidated bill and on March 13,
2002, the House of Representatives approved the same. The President signed the approved bill into law on
March 19, 2002.
The Issues
Petitioners16 raise the following grounds in support of their petition:
"I.
RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY AND UNCONSTITUTIONALLY THUS

CONSTITUTED (SIC) WITH GRAVE ABUSE OF DISCRETION, AMOUNTING TO LACK OR
EXCESS OF JURISDICTION WHEN THEY INTENDED TO POSTPONE THE SK ELECTIONS.
II.

EXCESS OF JURISDICTION WHEN THEY INTENDED TO DISCRIMINATE, DISENFRANCHISE,
SINGLE OUT AND DISMEMBER THE SK MEMBERS WHO ARE 18 BUT NOT LESS17 (SIC)
THAN 21 YEARS OLD COMPOSED OF ABOUT 7 MILLION YOUTH.
III.

EXCESS OF JURISDICTION WHEN THEY WILLFULLY FAILED TO FUND THE SK ELECTION
PURPORTEDLY TO POSTPONE THE SAME IN ORDER TO IMPLEMENT THEIR ILLEGAL
SCHEME AND MACHINATION IN SPITE OF THE FACT THAT THERE ARE AVAILABLE FUNDS
FOR THE PURPOSE.
IV.
THE INCUMBENT SK OFFICERS WANTED TO PERPETUALLY SIT ON THEIR RESPECTIVE

OFFICES CONTRARY TO THE ENVISION (SIC) OF THE CREATION OF THE SK
ORGANIZATION, HENCE, IN VIOLATION OF LAW AND CONSTITUTION."18
The Court's Ruling
The petition is bereft of merit.
At the outset, the Court takes judicial notice of the following events that have transpired since petitioners filed
this petition:
1. The May 6, 2002 SK elections and May 13, 2002 Barangay elections were not held as
scheduled.
2. Congress enacted RA No. 916419 which provides that voters and candidates for the SK elections
must be "at least 15 but less than 18 years of age on the day of the election."20 RA No. 9164 also
provides that there shall be a synchronized SK and Barangay elections on July 15, 2002.
3. The Comelec promulgated Resolution No. 4846, the rules and regulations for the conduct of the
July 15, 2002 synchronized SK and Barangay elections.
Petitioners, who all claim to be 20 years old, argue that the postponement of the May 6, 2002 SK elections
disenfranchises them, preventing them from voting and being voted for in the SK elections. Petitioners'
theory is that if the SK elections were postponed to a date later than May 6, 2002, the postponement would
disqualify from SK membership youths who will turn 21 years old between May 6, 2002 and the date of the
new SK elections. Petitioners claim that a reduction in the SK membership age to 15 but less than 18 years
of age from the then membership age of 15 but not more than 21 years of age would disqualify about seven
million youths. The public respondents' failure to hold the elections on May 6, 2002 would prejudice
petitioners and other youths similarly situated.
Thus, petitioners instituted this petition to: (1) compel public respondents to hold the SK elections on May 6,
2002 and should it be postponed, the SK elections should be held not later than July 15, 2002; (2) prevent
public respondents from passing laws and issuing resolutions and orders that would lower the membership
age in the SK; and (3) compel public respondents to allow petitioners and those who have turned more than
21 years old on May 6, 2002 to participate in any re-scheduled SK elections.
The Court's power of judicial review may be exercised in constitutional cases only if all the following
requisites are complied with, namely: (1) the existence of an actual and appropriate case or controversy; (2)
a personal and substantial interest of the party raising the constitutional question; (3) the exercise of judicial
review is pleaded at the earliest opportunity; and (4) the constitutional question is the lis mota of the case.21
In the instant case, there is no actual controversy requiring the exercise of the power of judicial review. While
seeking to prevent a postponement of the May 6, 2002 SK elections, petitioners are nevertheless amenable
to a resetting of the SK elections to any date not later than July 15, 2002. RA No. 9164 has reset the SK
elections to July 15, 2002, a date acceptable to petitioners. With respect to the date of the SK elections,
there is therefore no actual controversy requiring judicial intervention.
Petitioners' prayer to prevent Congress from enacting into law a proposed bill lowering the membership age
in the SK does not present an actual justiciable controversy. A proposed bill is not subject to judicial review
because it is not a law. A proposed bill creates no right and imposes no duty legally enforceable by the
Court. A proposed bill, having no legal effect, violates no constitutional right or duty. The Court has no power
to declare a proposed bill constitutional or unconstitutional because that would be in the nature of rendering
an advisory opinion on a proposed act of Congress. The power of judicial review cannot be
exercised in vacuo.22 The second paragraph of Section 1, Article VIII of the Constitution states –
"Judicial power includes the duty of the courts of justice to settle actual controversies involving
rights which are legally demandable and enforceable, and to determine whether or not there
has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any
branch or instrumentality of the Government." (Emphasis supplied)
Thus, there can be no justiciable controversy involving the constitutionality of a proposed bill. The Court can
exercise its power of judicial review only after a law is enacted, not before.
Under the separation of powers, the Court cannot restrain Congress from passing any law, or from setting
into motion the legislative mill according to its internal rules. Thus, the following acts of Congress in the
exercise of its legislative powers are not subject to judicial restraint: the filing of bills by members of
Congress, the approval of bills by each chamber of Congress, the reconciliation by the Bicameral Committee
of approved bills, and the eventual approval into law of the reconciled bills by each chamber of Congress.
Absent a clear violation of specific constitutional limitations or of constitutional rights of private parties, the
Court cannot exercise its power of judicial review over the internal processes or procedures of Congress. 23
The Court has also no power to dictate to Congress the object or subject of bills that Congress should enact
into law. The judicial power to review the constitutionality of laws does not include the power to prescribe to
Congress what laws to enact. The Court has no power to compel Congress by mandamus to enact a law
allowing petitioners, regardless of their age, to vote and be voted for in the July 15, 2002 SK elections. To do
so would destroy the delicate system of checks and balances finely crafted by the Constitution for the three
co-equal, coordinate and independent branches of government.
Under RA No. 9164, Congress merely restored the age requirement in PD No. 684, the original charter of the
SK, which fixed the maximum age for membership in the SK to youths less than 18 years old. Petitioners do
not have a vested right to the permanence of the age requirement under Section 424 of the Local
Government Code of 1991. Every law passed by Congress is always subject to amendment or repeal by
Congress. The Court cannot restrain Congress from amending or repealing laws, for the power to make laws
includes the power to change the laws.24
The Court cannot also direct the Comelec to allow over-aged voters to vote or be voted for in an election that
is limited under RA No. 9164 to youths at least 15 but less than 18 years old. A law is needed to allow all
those who have turned more than 21 years old on or after May 6, 2002 to participate in the July 15, 2002 SK
elections. Youths from 18 to 21 years old as of May 6, 2002 are also no longer SK members, and cannot
participate in the July 15, 2002 SK elections. Congress will have to decide whether to enact an amendatory
law. Petitioners' remedy is legislation, not judicial intervention.
Petitioners have no personal and substantial interest in maintaining this suit. A party must show that he has
been, or is about to be denied some personal right or privilege to which he is lawfully entitled.25 A party must
also show that he has a real interest in the suit. By "real interest" is meant a present substantial interest, as
distinguished from a mere expectancy or future, contingent, subordinate, or inconsequential interest. 26
In the instant case, petitioners seek to enforce a right originally conferred by law on those who were at least
15 but not more than 21 years old. Now, with the passage of RA No. 9164, this right is limited to those who
on the date of the SK elections are at least 15 but less than 18 years old. The new law restricts membership
in the SK to this specific age group. Not falling within this classification, petitioners have ceased to be
members of the SK and are no longer qualified to participate in the July 15, 2002 SK elections. Plainly,
petitioners no longer have a personal and substantial interest in the SK elections.
This petition does not raise any constitutional issue. At the time petitioners filed this petition, RA No. 9164,
which reset the SK elections and reduced the age requirement for SK membership, was not yet enacted into
law. After the passage of RA No. 9164, petitioners failed to assail any provision in RA No. 9164 that could be
unconstitutional. To grant petitioners' prayer to be allowed to vote and be voted for in the July 15, 2002 SK
elections necessitates assailing the constitutionality of RA No. 9164. This, petitioners have not done. The
Court will not strike down a law unless its constitutionality is properly raised in an appropriate action and
adequately argued.27
The only semblance of a constitutional issue, albeit erroneous, that petitioners raise is their claim that SK
membership is a "property right within the meaning of the Constitution."28 Since certain public offices are
"reserved" for SK officers, petitioners also claim a constitutionally protected "opportunity" to occupy these
public offices. In petitioners' own words, they and others similarly situated stand to "lose their opportunity to
work in the government positions reserved for SK members or officers."29 Under the Local Government Code
of 1991, the president of the federation of SK organizations in a municipality, city or province is an ex-
officio member of the municipal council, city council or provincial board, respectively.30 The chairperson of
the SK in the barangay is an ex-officio member of the Sangguniang Barangay.31 The president of the national
federation of SK organizations is an ex-officio member of the National Youth Commission, with rank of a
Department Assistant Secretary.32
Congress exercises the power to prescribe the qualifications for SK membership. One who is no longer
qualified because of an amendment in the law cannot complain of being deprived of a proprietary right to SK
membership. Only those who qualify as SK members can contest, based on a statutory right, any act
disqualifying them from SK membership or from voting in the SK elections. SK membership is not a property
right protected by the Constitution because it is a mere statutory right conferred by law. Congress may
amend at any time the law to change or even withdraw the statutory right.
A public office is not a property right. As the Constitution expressly states, a "[P]ublic office is a public
trust."33 No one has a vested right to any public office, much less a vested right to an expectancy of holding a
public office. In Cornejo v. Gabriel,34 decided in 1920, the Court already ruled:
"Again, for this petition to come under the due process of law prohibition, it would be necessary to
consider an office a "property." It is, however, well settled x x x that a public office is not
property within the sense of the constitutional guaranties of due process of law, but is a
public trust or agency. x x x The basic idea of the government x x x is that of a popular
representative government, the officers being mere agents and not rulers of the people, one where
no one man or set of men has a proprietary or contractual right to an office, but where every officer
accepts office pursuant to the provisions of the law and holds the office as a trust for the people he
represents." (Emphasis supplied)
Petitioners, who apparently desire to hold public office, should realize from the very start that no one has a
proprietary right to public office. While the law makes an SK officer an ex-officio member of a local
government legislative council, the law does not confer on petitioners a proprietary right or even a proprietary
expectancy to sit in local legislative councils. The constitutional principle of a public office as a public trust
precludes any proprietary claim to public office. Even the State policy directing "equal access to opportunities
for public service"35 cannot bestow on petitioners a proprietary right to SK membership or a proprietary
expectancy to ex-officio public offices.
Moreover, while the State policy is to encourage the youth's involvement in public affairs, 36 this policy refers
to those who belong to the class of people defined as the youth. Congress has the power to define who are
the youth qualified to join the SK, which itself is a creation of Congress. Those who do not qualify because
they are past the age group defined as the youth cannot insist on being part of the youth. In government
service, once an employee reaches mandatory retirement age, he cannot invoke any property right to cling to
his office. In the same manner, since petitioners are now past the maximum age for membership in the SK,
they cannot invoke any property right to cling to their SK membership.
The petition must also fail because no grave abuse of discretion attended the postponement of the SK
elections. RA No. 9164 is now the law that prescribes the qualifications of candidates and voters for the SK
elections. This law also fixes the date of the SK elections. Petitioners are not even assailing the
constitutionality of RA No. 9164. RA No. 9164 enjoys the presumption of constitutionality and will apply to the
July 15, 2002 SK elections.
Petitioners have not shown that the Comelec acted illegally or with grave abuse of discretion in
recommending to Congress the postponement of the SK elections. The very evidence relied upon by
petitioners contradict their allegation of illegality. The evidence consist of the following: (1) Comelec en
banc Resolution No. 4763 dated February 5, 2002 that recommended the postponement of the SK elections
to 2003; (2) the letter of then Comelec Chairman Benipayo addressed to the Speaker of the House of
Representatives and the President of the Senate; and (3) the Conference Committee Report consolidating
Senate Bill No. 2050 and House Bill No. 4456.
The Comelec exercised its power and duty to "enforce and administer all laws and regulations relative to the
conduct of an election, plebiscite, initiative, referendum and recall"37 and to "recommend to Congress
effective measures to minimize election spending."38 The Comelec's acts enjoy the presumption of regularity
in the performance of official duties.39 These acts cannot constitute proof, as claimed by petitioners, that
there "exists a connivance and conspiracy (among) respondents in contravention of the present law." As the
Court held in Pangkat Laguna v. Comelec,40 the "Comelec, as the government agency tasked with the
enforcement and administration of elections laws, is entitled to the presumption of regularity of official acts
with respect to the elections."
The 1987 Constitution imposes upon the Comelec the duty of enforcing and administering all laws and
regulations relative to the conduct of elections. Petitioners failed to prove that the Comelec committed grave
abuse of discretion in recommending to Congress the postponement of the May 6, 2002 SK elections. The
evidence cited by petitioners even establish that the Comelec has demonstrated an earnest effort to address
the practical problems in holding the SK elections on May 6, 2002. The presumption remains that the
decision of the Comelec to recommend to Congress the postponement of the elections was made in good
faith in the regular course of its official duties.
Grave abuse of discretion is such capricious and whimsical exercise of judgment that is patent and gross as
to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law. 41 Public
respondents having acted strictly pursuant to their constitutional powers and duties, we find no grave abuse
of discretion in their assailed acts.
Petitioners contend that the postponement of the SK elections would allow the incumbent SK officers to
perpetuate themselves in power, depriving other youths of the opportunity to serve in elective SK positions.
This argument deserves scant consideration. While RA No. 9164 contains a hold-over provision, incumbent
SK officials can remain in office only until their successors have been elected or qualified. On July 15, 2002,
when the SK elections are held, the hold-over period expires and all incumbent SK officials automatically
cease to hold their SK offices and their ex-officio public offices.
In sum, petitioners have no personal and substantial interest in maintaining this suit. This petition presents no
actual justiciable controversy. Petitioners do not cite any provision of law that is alleged to be
unconstitutional. Lastly, we find no grave abuse of discretion on the part of public respondents.
WHEREFORE, the petition is DISMISSED for utter lack of merit.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Austria-Martinez, and Corona, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. 93100 June 19, 1997
ATLAS FERTILIZER CORPORATION, petitioner,

vs.
THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondent.
G.R. No. 97855 June 19, 1997
PHILIPPINE FEDERATION OF FISHFARM PRODUCERS, INC. petitioner,

vs.
THE HONORABLE SECRETARY OF THE DEPARTMENT OF AGRARIAN REFORM, respondent.
RESOLUTION
ROMERO, J.:
Before this Court are consolidated petitions questioning the constitutionality of some portions of Republic Act
No. 6657 otherwise known as the Comprehensive Agrarian Reform Law. 1
Petitioners Atlas Fertilizer Corporation, 2 Philippine Federation of Fishfarm Producers, Inc. and petitioner-in-
intervention Archie's Fishpond, Inc. and Arsenio Al. Acuna 3 are engaged in the aquaculture industry utilizing
fishponds and prawn farms. They assail Sections 3 (b), 11, 13, 16 (d), 17 and 32 of R.A. 6657, as well as the
implementing guidelines and procedures contained in Administrative Order Nos. 8 and 10 Series of 1988
issued by public respondent Secretary of the Department of Agrarian Reform as unconstitutional.
Petitioners claim that the questioned provisions of CARL violate the Constitution in the following manner:
1. Sections 3 (b), 11, 13, 16 (d), 17 and 32 of CARL extend agrarian reform to
aquaculture lands even as Section 4, Article XIII of the Constitution limits agrarian reform
only to agricultural lands.
2. The questioned provisions similarly treat of aquaculture lands and agriculture lands
when they are differently situated, and differently treat aquaculture lands and other
industrial lands, when they are similarly situated in violation of the constitutional
guarantee of the equal protection of the laws.
3. The questioned provisions distort employment benefits and burdens in favor of

aquaculture employees and against other industrial workers even as Section 1 and 3,
Article XIII of the Constitution mandate the State to promote equality in economic and
employment opportunities.
4. The questioned provisions deprive petitioner of its government-induced investments in

aquaculture even as Sections 2 and 3, Article XIII of the Constitution mandate the State
to respect the freedom of enterprise and the right of enterprises to reasonable returns on
investments and to expansion and growth.
The constitutionality of the above-mentioned provisions has been ruled upon in the case of Luz Farms,
Inc. v.Secretary of Agrarian Reform 4 regarding the inclusion of land devoted to the raising of livestock,
poultry and swine in its coverage.
The issue now before this Court is the constitutionality of the same above-mentioned provisions insofar as
they include in its coverage lands devoted to the aquaculture industry, particularly fishponds and prawn
farms.
In their first argument , petitioners contend that in the case of Luz Farms, Inc. v. Secretary of Agrarian
Reform, 5 this Court has already ruled impliedly that lands devoted to fishing are not agricultural lands. In
aquaculture, fishponds and prawn farms, the use of land is only incidental to and not the principal factor in
productivity and, hence, as held in "Luz Farms," they too should be excluded from R.A. 6657 just as lands
devoted to livestock, swine, and poultry have been excluded for the same reason. They also argue that they
are entitled to the full benefit of "Luz Farms" to the effect that only five percent of the total investment in
aquaculture activities, fishponds, and prawn farms, is in the form of land, and therefore, cannot be classified
as agricultural activity. Further, that in fishponds and prawn farms, there are no farmers, nor farm workers,
who till lands, and no agrarian unrest, and therefore, the constitutionally intended beneficiaries under Section
4, Art. XIII, 1987 Constitution do not exist in aquaculture.
In their second argument, they contend that R.A. 6657, by including in its coverage, the raising of fish and
aquaculture operations including fishponds and prawn ponds, treating them as in the same class or
classification as agriculture or farming violates the equal protection clause of the Constitution and is,
therefore, void. Further, the Constitutional Commission debates show that the intent of the constitutional
framers is to exclude "industrial" lands, to which category lands devoted to aquaculture, fishponds, and fish
farms belong.
Petitioners also claim that Administrative Order Nos. 8 and 10 issued by the Secretary of the Department of
Agrarian Reform are, likewise, unconstitutional, as held in "Luz Farms," and are therefore void as they
implement the assailed provisions of CARL.
The provisions of CARL being assailed as unconstitutional are as follows:
(a) Section 3 (b) which includes the "raising of fish in the definition of "Agricultural,
Agricultural Enterprise or Agricultural Activity." (Emphasis Supplied)
(b) Section 11 which defines "commercial farms" as private agricultural lands devoted
to fishponds and prawn ponds. . . . (Emphasis Supplied)
(c) Section 13 which calls upon petitioner to execute a production-sharing plan.
(d) Section 16(d) and 17 which vest on the Department of Agrarian reform the authority
to summarily determine the just compensation to be paid for lands covered by the
comprehensive Agrarian reform Law.
(e) Section 32 which spells out the production-sharing plan mentioned in section 13 —
. . . (W)hereby three percent (3%) of the gross sales from the production of such lands
are distributed within sixty (60) days at the end of the fiscal year as compensation to
regular and other farmworkers in such lands over and above the compensation they
currently receive: Provided, That these individuals or entities realize gross sales in
excess of five million pesos per annum unless the DAR, upon proper application,
determines a lower ceiling.
In the event that the individual or entity realizes a profit, an additional ten percent (10%)
of the net profit after tax shall be distributed to said regular and other farmworkers within
ninety (90) days of the end of the fiscal year. . . .
While the Court will not hesitate to declare a law or an act void when confronted squarely with constitutional
issues, neither will it preempt the Legislative and the Executive branches of the government in correcting or
clarifying, by means of amendment, said law or act. On February 20, 1995, Republic Act No. 7881 6 was
approved by Congress. Provisions of said Act pertinent to the assailed provisions of CARL are the following:
Sec. 1. Section 3, Paragraph (b) of Republic Act No. 6657 is hereby amended to read as
follows:
Sec. 3. Definitions. — For the purpose of this Act, unless the context
indicates otherwise:
(b) Agriculture, Agricultural Enterprise or Agricultural Activity means

the cultivation of the soil, planting of crops, growing of fruit trees,
including the harvesting of such farm products and other farm
activities and practices performed by a farmer in conjunction with
such farming operations done by persons whether natural or juridical.
Sec. 2. Section 10 of Republic Act No. 6657 is hereby amended to read as follows:
Sec. 10. Exemptions and Exclusions. —
xxx xxx xxx
b) Private lands actually, directly and exclusively used for prawn

farms and fishponds shall be exempt from the coverage of this Act:
Provided, That said prawn farms and fishponds have not been
distributed and Certificate of Land Ownership Award (CLOA) issued
to agrarian reform beneficiaries under the Comprehensive Agrarian
Reform Program.
In cases where the fishponds or prawn farms have been subjected to

the Comprehensive Agrarian Reform Law, by voluntary offer to sell,
or commercial farms deferment or notices of compulsory acquisition,
a simple and absolute majority of the actual regular workers or
tenants must consent to the exemption within one (1) year from the
effectivity of this Act. when the workers or tenants do not agree to
this exemption, the fishponds or prawn farms shall be distributed
collectively to the worker — beneficiaries or tenants who shall form a
cooperative or association to manage the same.
In cases where the fishponds or prawn farms have not been

subjected to the Comprehensive Agrarian Reform Law, the consent
of the farm workers shall no longer be necessary, however, the
provision of Section 32-A hereof on incentives shall apply.
xxx xxx xxx
Sec. 3. Section 11, Paragraph 1 is hereby amended to read as follows:
Sec. 11. Commercial Farming. — Commercial farms, which are

private agricultural lands devoted to saltbeds, fruit farms, orchards,
vegetable and cut-flower farms and cacao, coffee and rubber
plantations, shall be subject to immediate compulsory acquisition and
distribution after ten (10) years from the effectivity of this Act. In the
case of new farms, the ten-year period shall begin from the first year
of commercial production and operation, as determined by the DAR.
During the ten-year period, the Government shall initiate steps
necessary to acquire these lands, upon payment of just
compensation for the land and the improvements thereon, preferably
in favor of organized cooperatives or associations, which shall
thereafter manage the said lands for the workers — beneficiaries.
Sec. 4. There shall be incorporated after Section 32 of Republic Act No. 6657 a section
to read as follows
Sec. 32-A. Incentives. — Individuals or entities owning or operating
fishponds and prawn farms are hereby mandated to execute within
six (6) months from the effectivity of this Act, an incentive plan with
their regular fishpond or prawn farm workers' organization, if any,
whereby seven point five percent (7.5%) of their net profit before tax
from the operation of the fishpond or prawn farms are distributed
within sixty (60) days at the end of the fiscal year as compensation to
regular and other pond workers in such ponds over and above the
compensation they currently receive.
In order to safeguard the right of the regular fishpond or prawn farm

workers under the incentive plan, the books of the fishpond or prawn
owners shall be subject to periodic audit or inspection by certified
public accountants chosen by the workers.
The foregoing provision shall not apply to agricultural lands

subsequently converted to fishponds or prawn farms provided the
size of the land converted does not exceed the retention limit of the
landowner.
The above-mentioned provisions of R.A. No. 7881 expressly state that fishponds and prawn farms are
excluded from the coverage of CARL. In view of the foregoing, the question concerning the constitutionality
of the assailed provisions has become moot and academic with the passage of R.A. No. 7881.
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Melo, Puno, Vitug, Mendoza, Hermosisima, Jr., Panganiban and
Torres, Jr., JJ., concur.
Padilla, Bellosillo, Kapunan and Francisco, JJ., are on leave.
EN BANC
G.R. No. 147780 May 10, 2001
PANFILO LACSON, MICHAEL RAY B. AQUINO and CESAR O. MANCAO, petitioners,

vs.
SECRETARY HERNANDO PEREZ, P/DIRECTOR LEANDRO MENDOZA, and P/SR. SUPT. REYNALDO
BERROYA, respondents.
----------------------------------------
G.R. No. 147781 May 10, 2001
MIRIAM DEFENSOR-SANTIAGO, petitioner,

vs.
ANGELO REYES, Secretary of National Defense, ET AL., respondents.
----------------------------------------
G.R. No. 147799 May 10, 2001
RONALDO A. LUMBAO, petitioner,

vs.
SECRETARY HERNANDO PEREZ, GENERAL DIOMEDIO VILLANUEVA, P/DIRECTOR LEANDRO
MENDOZA, and P/SR. SUPT. REYNALDO BERROYA, respondents.
----------------------------------------
G.R. No. 147810 May 10, 2001
THE LABAN NG DEMOKRATIKONG PILIPINO, petitioner,

vs.
THE DEPARTMENT OF JUSTICE, SECRETARY HERNANDO PEREZ, THE ARMED FORCES OF THE
PHILIPPINES, GENERAL DIOMEDIO VILLANUEVA, THE PHILIPPINE NATIONAL POLICE, and
DIRECTOR GENERAL LEANDRO MENDOZA, respondents.
RESOLUTION
MELO, J.:
On May 1, 2001, President Macapagal-Arroyo, faced by an "angry and violent mob armed with explosives,
firearms, bladed weapons, clubs, stones and other deadly weapons" assaulting and attempting to break into
Malacañang, issued Proclamation No. 38 declaring that there was a state of rebellion in the National Capital
Region. She likewise issued General Order No. 1 directing the Armed Forces of the Philippines and the
Philippine National Police to suppress the rebellion in the National Capital Region. Warrantless arrests of
several alleged leaders and promoters of the "rebellion" were thereafter effected.
Aggrieved by the warrantless arrests, and the declaration of a "state of rebellion," which allegedly gave a
semblance of legality to the arrests, the following four related petitions were filed before the Court –
(1) G. R. No. 147780 for prohibition, injunction, mandamus, and habeas corpus (with an urgent application
for the issuance of temporary restraining order and/or writ of preliminary injunction) filed by Panfilio M.
Lacson, Michael Ray B. Aquino, and Cezar O. Mancao; (2) G. R. No. 147781 for mandamus and/or review of
the factual basis for the suspension of the privilege of the writ of habeas corpus, with prayer for the
suspension of the privilege of the writ of habeas corpus, with prayer for a temporary restraining order filed by
Miriam Defensor-Santiago; (3) G. R. No. 147799 for prohibition and injunction with prayer for a writ of
preliminary injunction and/or restraining order filed by Ronaldo A. Lumbao; and (4) G. R. No. 147810 for
certiorari and prohibition filed by the political party Laban ng Demokratikong Pilipino.
All the foregoing petitions assail the declaration of a state of rebellion by President Gloria Macapagal-Arroyo
and the warrantless arrests allegedly effected by virtue thereof, as having no basis both in fact and in law.
Significantly, on May 6, 2001, President Macapagal-Arroyo ordered the lifting of the declaration of a "state of
rebellion" in Metro Manila. Accordingly, the instant petitions have been rendered moot and academic. As to
petitioners' claim that the proclamation of a "state of rebellion" is being used by the authorities to justify
warrantless arrests, the Secretary of Justice denies that it has issued a particular order to arrest specific
persons in connection with the "rebellion." He states that what is extant are general instructions to law
enforcement officers and military agencies to implement Proclamation No. 38. Indeed, as stated in
respondents' Joint Comments:
[I]t is already the declared intention of the Justice Department and police authorities to
obtain regular warrants of arrests from the courts for all acts committed prior to and until
May 1, 2001 which means that preliminary investigations will henceforth be conducted.
(Comment, G.R. No. 147780, p. 28; G.R. No. 147781, p. 18; G.R. No. 147799, p. 16;
G.R. No. 147810, p. 24)
With this declaration, petitioners' apprehensions as to warrantless arrests should be laid to rest.
In quelling or suppressing the rebellion, the authorities may only resort to warrantless arrests of persons
suspected of rebellion, as provided under Section 5, Rule 113 of the Rules of Court, if the circumstances so
warrant. The warrantless arrest feared by petitioners is, thus, not based on the declaration of a "state of
rebellion."
Moreover, petitioners' contention in G. R. No. 147780 (Lacson Petition), 147781 (Defensor-Santiago

Petition), and 147799 (Lumbao Petition) that they are under imminent danger of being arrested without
warrant do not justify their resort to the extraordinary remedies of mandamus and prohibition, since an
individual subjected to warrantless arrest is not without adequate remedies in the ordinary course of law.
Such an individual may ask for a preliminary investigation under Rule 112 of the Rules of Court, where he
may adduce evidence in his defense, or he may submit himself to inquest proceedings to determine whether
or not he should remain under custody and correspondingly be charged in court. Further, a person subject of
a warrantless arrest must be delivered to the proper judicial authorities within the periods provided in Article
125 of the Revised Penal Code, otherwise the arresting officer could be held liable for delay in the delivery of
detained persons. Should the detention be without legal ground, the person arrested can charge the
arresting officer with arbitrary detention. All this is without prejudice to his filing an action for damages against
the arresting officer under Article 32 of the Civil Code. Verily, petitioners have a surfeit of other remedies
which they can avail themselves of, thereby making the prayer for prohibition and mandamus improper at this
time (Section 2 and 3, Rule 65, Rules of Court).1âwphi1.nêt
Aside from the foregoing reasons, several considerations likewise inevitably call for the dismissal of the
petitions at bar.
G.R. No. 147780
In connection with their alleged impending warrantless arrest, petitioners Lacson, Aquino, and mancao pray
that the "appropriate court before whom the informations against petitioners are filed be directed to desist
from arraigning and proceeding with the trial of the case, until the instant petition is finally resolved." This
relief is clearly premature considering that as of this date, no complaints or charges have been filed against
any of the petitioners for any crime. And in the event that the same are later filed, this Court cannot enjoin
criminal prosecution conducted in accordance with the Rules of Court, for by that time any arrest would have
been in pursuant of a duly issued warrant.
As regards petitioners' prayer that the hold departure orders issued against them be declared null and
void ab initio, it is to be noted that petitioners are not directly assailing the validity of the subject hold
departure orders in their petition. They are not even expressing intention to leave the country in the near
future. The prayer to set aside the same must be made in proper proceedings initiated for that purpose.
Anent petitioners' allegations ex abundante ad cautelam in support of their application for the issuance of a
writ of habeas corpus, it is manifest that the writ is not called for since its purpose is to relieve petitioners
from unlawful restraint (Ngaya-an v. Balweg, 200 SCRA 149 [1991]), a matter which remains speculative up
to this very day.
G.R. No. 147781
The petition herein is denominated by petitioner Defensor-Santiago as one for mandamus. It is basic in
matters relating to petitions for mandamus that the legal right of the petitioner to the performance of a
particular act which is sought to be compelled must be clear and complete. Mandamus will not issue unless
the right to relief is clear at the time of the award (Palileo v. Ruiz Castro, 85 Phil. 272). Up to the present
time, petitioner Defensor Santiago has not shown that she is in imminent danger of being arrested without a
warrant. In point of fact, the authorities have categorically stated that petitioner will not be arrested without a
warrant.
G.R. No. 147799
Petitioner Lumbao, leader of the People's Movement against Poverty (PMAP), for his part, argues that the
declaration of a "state of rebellion" is violative of the doctrine of separation of powers, being an
encroachment on the domain of the judiciary which has the constitutional prerogative to "determine or
interpret" what took place on May 1, 2001, and that the declaration of a state of rebellion cannot be an
exception to the general rule on the allocation of the governmental powers.
We disagree. To be sure, Section 18, Article VII of the Constitution expressly provides that "[t]he President
shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it becomes necessary,
he may call out such armed forces to prevent or suppress lawless violence, invasion or rebellion…" Thus, we
held in Integrated Bar of the Philippines v. Hon. Zamora, (G.R. No. 141284, August 15, 2000):
x x x The factual necessity of calling out the armed forces is not easily quantifiable and cannot be
objectively established since matters considered for satisfying the same is a combination of several
factors which are not always accessible to the courts. Besides the absence of textual standards
that the court may use to judge necessity, information necessary to arrive at such judgment might
also prove unmanageable for the courts. Certain pertinent information might be difficult to verify, or
wholly unavailable to the courts. In many instances, the evidence upon which the President might
decide that there is a need to call out the armed forces may be of a nature not constituting
technical proof.
On the other hand, the President as Commander-in-Chief has a vast intelligence network to gather
information, some of which may be classified as highly confidential or affecting the security of the
state. In the exercise of the power to call, on-the-spot decisions may be imperatively necessary in
emergency situations to avert great loss of human lives and mass destruction of property. x x x
(at pp.22-23)
The Court, in a proper case, may look into the sufficiency of the factual basis of the exercise of this power.
However, this is no longer feasible at this time, Proclamation No. 38 having been lifted.
G.R. No. 147810
Petitioner Laban ng Demokratikong Pilipino is not a real party-in-interest. The rule requires that a party must
show a personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable
decision so as to warrant an invocation of the court's jurisdiction and to justify the exercise of the court's
remedial powers in his behalf (KMU Labor Center v. Garcia, Jr., 239 SCRA 386 [1994]). Here, petitioner has
not demonstrated any injury to itself which would justify resort to the Court. Petitioner is a juridical person not
subject to arrest. Thus, it cannot claim to be threatened by a warrantless arrest. Nor is it alleged that its
leaders, members, and supporters are being threatened with warrantless arrest and detention for the crime
of rebellion. Every action must be brought in the name of the party whose legal right has been invaded or
infringed, or whose legal right is under imminent threat of invasion or infringement.
At best, the instant petition may be considered as an action for declaratory relief, petitioner claiming that its
right to freedom of expression and freedom of assembly is affected by the declaration of a "state of rebellion"
and that said proclamation is invalid for being contrary to the Constitution.
However, to consider the petition as one for declaratory relief affords little comfort to petitioner, this Court not
having jurisdiction in the first instance over such a petition. Section 5[1], Article VIII of the Constitution limits
the original jurisdiction of the Court to cases affecting ambassadors, other public ministers and consuls, and
over petitions for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
WHEREFORE, premises considered, the petitions are hereby DISMISSED. However, in G.R. No. 147780,
147781, and 147799, respondents, consistent and congruent with their undertaking earlier adverted to,
together with their agents, representatives, and all persons acting for and in their behalf, are hereby enjoined
from arresting petitioners therein without the required judicial warrant for all acts committed in relation to or in
connection with the may 1, 2001 siege of Malacañang.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Mendoza, Panganiban, Gonzaga-Reyes, JJ., concur.
Vitug, separate opinion.
Kapunan, dissenting opinion.
Pardo, join the dissent of J. Kapunan.
Sandoval-Gutierrez, dissenting opinion.
Quisumbing, Buena, Ynares-Santiago, De Leon, Jr., on leave.
EN BANC
G.R. No. 159085 February 3, 2004
SANLAKAS, represented by REP. J.V. Bautista, and PARTIDO NG MANGGAGAWA, represented by

REP. RENATO MAGTUBO petitioners,
vs
EXECUTIVE SECRETARY SECRETARY ANGELO REYES, GENERAL NARCISO ABAYA, DIR. GEN.
HERMOGENES EBDANE, respondents.
x------------------------x
G.R. No. 159103 February 3, 2004
SOCIAL JUSTICE SOCIETY (SJS) OFFICERS/MEMBERS namely, SAMSON S. ALCANTARA, ED

VINCENT S. ALBANO, RENE B. GOROSPE, EDWIN R. SANDOVAL and RODOLFO D.
MAPILE, petitioners,
vs
HON. EXECUTIVE SECRETARY ALBERTO G. ROMULO, HON. SECRETARY OF JUSTICE SIMEON
DATUMANONG, HON. SECRETARY OF NATIONAL DEFENSE ANGELO REYES, and HON.
SECRETARY JOSE LINA, JR., respondents.
x------------------------x
G.R. No. 159185 February 3, 2004
REP. ROLEX T. SUPLICO, REP. CARLOS M. PADILLA, REP. CELSO L. LOBREGAT, REP. HUSSIN U.
AMIN, REP. ABRAHAM KAHLIL B. MITRA, REP. EMMYLOU J. TALINO-SANTOS, and REP. GEORGILU
R. YUMUL-HERMIDA, petitioners,
vs
PRESIDENT GLORIA MACAPAGAL-ARROYO; and EXECUTIVE SECRETARY ALBERTO G.
ROMULO, respondents.
x------------------------x
G.R. No. 159196 February 3, 2004
AQUILINO Q. PIMENTEL, JR. as a Member of the Senate, petitioner,
vs
SECRETARY ALBERTO ROMULO, AS EXECUTIVE SECRETARY; SECRETARY ANGELO REYES, AS
SECRETARY OF NATIONAL DEFENSE; GENERAL NARCISO ABAYA, AS CHIEF OF STAFF OF THE
ARMED FORCES; SECRETARY JOSE LINA, et al., respondents.
DECISION
TINGA, J.:
They came in the middle of the night. Armed with high-powered ammunitions and explosives, some three
hundred junior officers and enlisted men of the Armed Forces of the Philippines (AFP) stormed into the
Oakwood Premiere apartments in Makati City in the wee hours of July 27, 2003. Bewailing the corruption in
the AFP, the soldiers demanded, among other things, the resignation of the President, the Secretary of
Defense and the Chief of the Philippine National Police (PNP).1
In the wake of the Oakwood occupation, the President issued later in the day Proclamation No. 427 and
General Order No. 4, both declaring "a state of rebellion" and calling out the Armed Forces to suppress the
rebellion. Proclamation No. 427 reads in full:
PROCLAMATION NO. 427
DECLARING A STATE OF REBELLION
WHEREAS, certain elements of the Armed Forces of the Philippines, armed with high-powered firearms and
explosives, acting upon the instigation and command and direction of known and unknown leaders, have
seized a building in Makati City, put bombs in the area, publicly declared withdrawal of support for, and took
arms against the duly constituted Government, and continue to rise publicly and show open hostility, for the
purpose of removing allegiance to the Government certain bodies of the Armed Forces of the Philippines and
the Philippine National Police, and depriving the President of the Republic of the Philippines, wholly or
partially, of her powers and prerogatives which constitute the crime of rebellion punishable under Article 134
of the Revised Penal Code, as amended;
WHEREAS, these misguided elements of the Armed Forces of the Philippines are being supported, abetted
and aided by known and unknown leaders, conspirators and plotters in the government service and outside
the government;
WHEREAS, under Section 18, Article VII of the present Constitution, whenever it becomes necessary, the
President, as the Commander-in-Chief of the Armed Forces of the Philippines, may call out such Armed
Forces to suppress the rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in me by law,

hereby confirm the existence of an actual and on-going rebellion, compelling me to declare a state of
rebellion.
In view of the foregoing, I am issuing General Order No. 4 in accordance with Section 18, Article VII of the
Constitution, calling out the Armed Forces of the Philippines and the Philippine National Police to
immediately carry out the necessary actions and measures to suppress and quell the rebellion with due
regard to constitutional rights.
General Order No. 4 is similarly worded:
GENERAL ORDER NO. 4
DIRECTING THE ARMED FORCES OF THE PHILIPPINES AND THE PHILIPPINE NATIONAL POLICE TO
SUPPRESS REBELLION
WHEREAS, certain elements of the Armed Forces of the Philippines, armed with high-powered firearms and
explosives, acting upon the instigation and command and direction of known and unknown leaders, have
seized a building in Makati City, put bombs in the area, publicly declared withdrawal of support for, and took
arms against the duly constituted Government, and continue to rise publicly and show open hostility, for the
purpose of removing allegiance to the Government certain bodies of the Armed Forces of the Philippines and
the Philippine National Police, and depriving the President of the Republic of the Philippines, wholly or
partially, of her powers and prerogatives which constitute the crime of rebellion punishable under Article
134 et seq. of the Revised Penal Code, as amended;
WHEREAS, these misguided elements of the Armed Forces of the Philippines are being supported, abetted
and aided by known and unknown leaders, conspirators and plotters in the government service and outside
the government;
WHEREAS, under Section 18, Article VII of the present Constitution, whenever it becomes necessary, the
President, as the Commander-in-Chief of all Armed Forces of the Philippines, may call out such Armed
Forces to suppress the rebellion;
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, by virtue of the powers vested in me by the

Constitution as President of the Republic of the Philippines and Commander-in-Chief of all the armed forces
of the Philippines and pursuant to Proclamation No. 427 dated July 27, 2003, do hereby call upon the Armed
Forces of the Philippines and the Philippine National Police to suppress and quell the rebellion.
I hereby direct the Chief of the Armed Forces of the Philippines and the Chief of the Philippine National
Police and the officers and men of the Armed Forces of the Philippines and the Philippine National Police to
immediately carry out the necessary and appropriate actions and measures to suppress and quell the
rebellion with due regard to constitutional rights.
By the evening of July 27, 2003, the Oakwood occupation had ended. After hours-long negotiations, the
soldiers agreed to return to barracks. The President, however, did not immediately lift the declaration of a
state of rebellion and did so only on August 1, 2003, through Proclamation No. 435:
DECLARING THAT THE STATE OF REBELLION HAS CEASED TO EXIST
WHEREAS, by virtue of Proclamation No. 427 dated July 27, 2003, a state of rebellion was declared;
WHEREAS, by virtue of General Order No. 4 dated July 27, 2003, which was issued on the basis of
Proclamation No. 427 dated July 27, 2003, and pursuant to Article VII, Section 18 of the Constitution, the
Armed Forces of the Philippines and the Philippine National Police were directed to suppress and quell the
rebellion;
WHEREAS, the Armed Forces of the Philippines and the Philippine National Police have effectively
suppressed and quelled the rebellion.
NOW, THEREFORE, I, GLORIA MACAPAGAL-ARROYO, President of the Philippines, by virtue of the

powers vested in me by law, hereby declare that the state of rebellion has ceased to exist.
In the interim, several petitions were filed before this Court challenging the validity of Proclamation No. 427
and General Order No. 4.
In G.R. No. 159085 (Sanlakas and PM v. Executive Secretary, et al.),2 party-list organizations Sanlakas and
Partido ng Manggagawa (PM), contend that Section 18, Article VII of the Constitution does not require the
declaration of a state of rebellion to call out the armed forces.3 They further submit that, because of the
cessation of the Oakwood occupation, there exists no sufficient factual basis for the proclamation by the
President of a state of rebellion for an indefinite period.4
Petitioners in G.R. No. 159103 (SJS Officers/Members v. Hon. Executive Secretary, et al.) are
officers/members of the Social Justice Society (SJS), "Filipino citizens, taxpayers, law professors and bar
reviewers."5 Like Sanlakas and PM, they claim that Section 18, Article VII of the Constitution does not
authorize the declaration of a state of rebellion.6 They contend that the declaration is a "constitutional
anomaly" that "confuses, confounds and misleads" because "[o]verzealous public officers, acting pursuant to
such proclamation or general order, are liable to violate the constitutional right of private
citizens."7 Petitioners also submit that the proclamation is a circumvention of the report requirement under
the same Section 18, Article VII, commanding the President to submit a report to Congress within 48 hours
from the proclamation of martial law.8 Finally, they contend that the presidential issuances cannot be
construed as an exercise of emergency powers as Congress has not delegated any such power to the
President.9
In G.R. No. 159185 (Rep. Suplico et al. v. President Macapagal-Arroyo and Executive Secretary Romulo),
petitioners brought suit as citizens and as Members of the House of Representatives whose rights, powers
and functions were allegedly affected by the declaration of a state of rebellion.10 Petitioners do not challenge
the power of the President to call out the Armed Forces.11 They argue, however, that the declaration of a
state of rebellion is a "superfluity," and is actually an exercise of emergency powers. 12 Such exercise, it is
contended, amounts to a usurpation of the power of Congress granted by Section 23 (2), Article VI of the
Constitution.13
In G.R. No. 159196 (Pimentel v. Romulo, et al.), petitioner Senator assails the subject presidential issuances
as "an unwarranted, illegal and abusive exercise of a martial law power that has no basis under the
Constitution."14 In the main, petitioner fears that the declaration of a state of rebellion "opens the door to the
unconstitutional implementation of warrantless arrests" for the crime of rebellion. 15
Required to comment, the Solicitor General argues that the petitions have been rendered moot by the lifting
of the declaration.16 In addition, the Solicitor General questions the standing of the petitioners to bring suit. 17
The Court agrees with the Solicitor General that the issuance of Proclamation No. 435, declaring that the
state of rebellion has ceased to exist, has rendered the case moot. As a rule, courts do not adjudicate moot
cases, judicial power being limited to the determination of "actual controversies."18 Nevertheless, courts will
decide a question, otherwise moot, if it is "capable of repetition yet evading review." 19 The case at bar is one
such case.
Once before, the President on May 1, 2001 declared a state of rebellion and called upon the AFP and the
PNP to suppress the rebellion through Proclamation No. 38 and General Order No. 1. On that occasion, "'an
angry and violent mob armed with explosives, firearms, bladed weapons, clubs, stones and other deadly
weapons' assaulted and attempted to break into Malacañang."20 Petitions were filed before this Court
assailing the validity of the President's declaration. Five days after such declaration, however, the President
lifted the same. The mootness of the petitions in Lacson v. Perez and accompanying cases 21 precluded this
Court from addressing the constitutionality of the declaration.
To prevent similar questions from reemerging, we seize this opportunity to finally lay to rest the validity of the
declaration of a state of rebellion in the exercise of the President's calling out power, the mootness of the
petitions notwithstanding.
Only petitioners Rep. Suplico et al. and Sen. Pimentel, as Members of Congress, have standing to challenge
the subject issuances. In Philippine Constitution Association v. Enriquez,22 this Court recognized that:
To the extent the powers of Congress are impaired, so is the power of each member thereof, since
his office confers a right to participate in the exercise of the powers of that institution.
An act of the Executive which injures the institution of Congress causes a derivative but
nonetheless substantial injury, which can be questioned by a member of Congress. In such a case,
any member of Congress can have a resort to the courts.
Petitioner Members of Congress claim that the declaration of a state of rebellion by the President is
tantamount to an exercise of Congress' emergency powers, thus impairing the lawmakers'
legislative powers. Petitioners also maintain that the declaration is a subterfuge to avoid
congressional scrutiny into the President's exercise of martial law powers.
Petitioners Sanlakas and PM, and SJS Officers/Members, have no legal standing or locus standi to
bring suit. "Legal standing" or locus standi has been defined as a personal and substantial interest
in the case such that the party has sustained or will sustain direct injury as a result of the
governmental act that is being challenged…. The gist of the question of standing is whether a party
alleges "such personal stake in the outcome of the controversy as to assure that concrete
adverseness which sharpens the presentation of issues upon which the court depends for
illumination of difficult constitutional questions."23
Petitioners Sanlakas and PM assert that:
2. As a basic principle of the organizations and as an important plank in their programs, petitioners
are committed to assert, defend, protect, uphold, and promote the rights, interests, and welfare of
the people, especially the poor and marginalized classes and sectors of Philippine society.
Petitioners are committed to defend and assert human rights, including political and civil rights, of
the citizens.
3. Members of the petitioner organizations resort to mass actions and mobilizations in the exercise
of their Constitutional rights to peaceably assemble and their freedom of speech and of expression
under Section 4, Article III of the 1987 Constitution, as a vehicle to publicly ventilate their
grievances and legitimate demands and to mobilize public opinion to support the
same.24 [Emphasis in the original.]
Petitioner party-list organizations claim no better right than the Laban ng Demokratikong Pilipino, whose
standing this Court rejected in Lacson v. Perez:
… petitioner has not demonstrated any injury to itself which would justify the resort to the Court.
Petitioner is a juridical person not subject to arrest. Thus, it cannot claim to be threatened by a
warrantless arrest. Nor is it alleged that its leaders, members, and supporters are being threatened
with warrantless arrest and detention for the crime of rebellion. Every action must be brought in the
name of the party whose legal rights has been invaded or infringed, or whose legal right is under
imminent threat of invasion or infringement.
At best, the instant petition may be considered as an action for declaratory relief, petitioner
claiming that it[']s right to freedom of expression and freedom of assembly is affected by the
declaration of a "state of rebellion" and that said proclamation is invalid for being contrary to the
Constitution.
However, to consider the petition as one for declaratory relief affords little comfort to petitioner, this
Court not having jurisdiction in the first instance over such a petition. Section 5 [1], Article VIII of
the Constitution limits the original jurisdiction of the court to cases affecting ambassadors, other
public ministers and consuls, and over petitions for certiorari, prohibition, mandamus, quo
warranto, and habeas corpus.25
Even assuming that petitioners are "people's organizations," this status would not vest them with the
requisite personality to question the validity of the presidential issuances, as this Court made clear
in Kilosbayan v. Morato:26
The Constitution provides that "the State shall respect the role of independent people's
organizations to enable the people to pursue and protect, within the democratic framework, their
legitimate and collective interests and aspirations through peaceful and lawful means," that their
right to "effective and reasonable participation at all levels of social, political, and economic
decision-making shall not be abridged." (Art. XIII, §§15-16)
These provisions have not changed the traditional rule that only real parties in interest or those with
standing, as the case may be, may invoke the judicial power. The jurisdiction of this Court, even in
cases involving constitutional questions, is limited by the "case and controversy" requirement of
Art. VIII, §5. This requirement lies at the very heart of the judicial function. It is what differentiates
decisionmaking in the courts from decisionmaking in the political departments of the government
and bars the bringing of suits by just any party.27
That petitioner SJS officers/members are taxpayers and citizens does not necessarily endow them with
standing. A taxpayer may bring suit where the act complained of directly involves the illegal disbursement of
public funds derived from taxation.28 No such illegal disbursement is alleged.
On the other hand, a citizen will be allowed to raise a constitutional question only when he can show that he
has personally suffered some actual or threatened injury as a result of the allegedly illegal conduct of the
government; the injury is fairly traceable to the challenged action; and the injury is likely to be redressed by a
favorable action.29Again, no such injury is alleged in this case.
Even granting these petitioners have standing on the ground that the issues they raise are of transcendental
importance, the petitions must fail.
It is true that for the purpose of exercising the calling out power the Constitution does not require the
President to make a declaration of a state of rebellion. Section 18, Article VII provides:
Sec. 18. The President shall be the Commander-in-Chief of all armed forces of the Philippines
and whenever it becomes necessary, he may call out such armed forces to prevent or
suppress lawless violence, invasion or rebellion. In case of invasion or rebellion, when the
public safety requires it, he may, for a period not exceeding sixty days, suspend the privilege of the
writ of habeas corpus or place the Philippines or any part thereof under martial law. Within forty-
eight hours from the proclamation of martial law or the suspension of the writ of habeas corpus, the
President shall submit a report in person or in writing to the Congress. The Congress, voting jointly,
by a vote of at least a majority of all its Members in regular or special session, may revoke such
proclamation or suspension, which revocation shall not be set aside by the President. Upon the
initiative of the President, the Congress may, in the same manner, extend such proclamation or
suspension for a period to be determined by the Congress, if the invasion or rebellion shall persist
and public safety requires it.
The Congress, if not in session, shall, within twenty-four hours following such proclamation or
suspension, convene in accordance with its rules without need of a call.
The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of
the factual basis for the proclamation of martial law or the suspension of the privilege of the writ of
habeas corpus or the extension thereof, and must promulgate its decision thereon within thirty days
from its filing.
A state of martial law does not suspend the operation of the Constitution, nor supplant the
functioning of the civil courts or legislative assemblies, nor authorize the conferment of the
jurisdiction on military courts and agencies over civilians where civil courts are able to function, nor
automatically suspend the privilege of the writ.
The suspension of the privilege of the writ shall apply only to persons judicially charged for
rebellion or offenses inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any person thus arrested or detained shall be
judicially charged within three days, otherwise he shall be released. [Emphasis supplied.]
The above provision grants the President, as Commander-in-Chief, a "sequence" of "graduated

power[s]."30 From the most to the least benign, these are: the calling out power, the power to suspend the
privilege of the writ of habeas corpus, and the power to declare martial law. In the exercise of the latter two
powers, the Constitution requires the concurrence of two conditions, namely, an actual invasion or rebellion,
and that public safety requires the exercise of such power.31 However, as we observed in Integrated Bar of
the Philippines v. Zamora,32 "[t]hese conditions are not required in the exercise of the calling out power. The
only criterion is that 'whenever it becomes necessary,' the President may call the armed forces 'to prevent or
suppress lawless violence, invasion or rebellion.'"
Nevertheless, it is equally true that Section 18, Article VII does not expressly prohibit the President from
declaring a state of rebellion. Note that the Constitution vests the President not only with Commander-in-
Chief powers but, first and foremost, with Executive powers.
Section 1, Article VII of the 1987 Philippine Constitution states: "The executive power shall be vested in the
President…." As if by exposition, Section 17 of the same Article provides: "He shall ensure that the laws be
faithfully executed." The provisions trace their history to the Constitution of the United States.
The specific provisions of the U.S. Constitution granting the U.S. President executive and commander-in-
chief powers have remained in their original simple form since the Philadelphia Constitution of 1776, Article II
of which states in part:
Section 1. 1. The Executive Power shall be vested in a President of the United States of America . .
..
....
Section 2. 1. The President shall be Commander in Chief of the Army and Navy of the United
States. . . .
....
Section 3. … he shall take care that the laws be faithfully executed…. [Article II – Executive Power]
Recalling in historical vignettes the use by the U.S. President of the above-quoted provisions, as juxtaposed
against the corresponding action of the U.S. Supreme Court, is instructive. Clad with the prerogatives of the
office and endowed with sovereign powers, which are drawn chiefly from the Executive Power and
Commander-in-Chief provisions, as well as the presidential oath of office, the President serves as Chief of
State or Chief of Government, Commander-in-Chief, Chief of Foreign Relations and Chief of Public
Opinion.33
First to find definitive new piers for the authority of the Chief of State, as the protector of the people, was
President Andrew Jackson. Coming to office by virtue of a political revolution, Jackson, as President not only
kept faith with the people by driving the patricians from power. Old Hickory, as he was fondly called, was the
first President to champion the indissolubility of the Union by defeating South Carolina's nullification effort. 34
The Federal Tariff Acts of 1828 and 1832 that Congress enacted did not pacify the hotspurs from South
Carolina. Its State Legislature ordered an election for a convention, whose members quickly passed an
Ordinance of Nullification. The Ordinance declared the Tariff Acts unconstitutional, prohibited South Carolina
citizens from obeying them after a certain date in 1833, and threatened secession if the Federal Government
sought to oppose the tariff laws. The Legislature then implemented the Ordinance with bristling punitive laws
aimed at any who sought to pay or collect customs duties.35
Jackson bided his time. His task of enforcement would not be easy. Technically, the President might send
troops into a State only if the Governor called for help to suppress an insurrection, which would not occur in
the instance. The President could also send troops to see to it that the laws enacted by Congress were
faithfully executed. But these laws were aimed at individual citizens, and provided no enforcement machinery
against violation by a State. Jackson prepared to ask Congress for a force bill.36
In a letter to a friend, the President gave the essence of his position. He wrote: ". . . when a faction in a State
attempts to nullify a constitutional law of Congress, or to destroy the Union, the balance of the people
composing this Union have a perfect right to coerce them to obedience." Then in a Proclamation he issued
on December 10, 1832, he called upon South Carolinians to realize that there could be no peaceable
interference with the execution of the laws, and dared them, "disunion by armed force is treason. Are you
ready to incur its guilt?"37
The Proclamation frightened nullifiers, non-nullifiers and tight-rope walkers. Soon, State Legislatures began
to adopt resolutions of agreement, and the President announced that the national voice from Maine on the
north to Louisiana on the south had declared nullification and accession "confined to contempt and infamy." 38
No other President entered office faced with problems so formidable, and enfeebled by personal and political
handicaps so daunting, as Abraham Lincoln.
Lincoln believed the President's power broad and that of Congress explicit and restricted, and sought some
source of executive power not failed by misuse or wrecked by sabotage. He seized upon the President's
designation by the Constitution as Commander-in-Chief, coupled it to the executive power provision — and
joined them as "the war power" which authorized him to do many things beyond the competence of
Congress.39
Lincoln embraced the Jackson concept of the President's independent power and duty under his oath directly
to represent and protect the people. In his Message of July 4, 1861, Lincoln declared that "the Executive
found the duty of employing the war power in defense of the government forced upon him. He could not but
perform the duty or surrender the existence of the Government . . . ." This concept began as a transition
device, to be validated by Congress when it assembled. In less than two-years, it grew into an independent
power under which he felt authorized to suspend the privilege of the writ of habeas corpus, issue the
Emancipation Proclamation, and restore reoccupied States.40
Lincoln's Proclamation of April 15, 1861, called for 75,000 troops. Their first service, according to the
proclamation, would be to recapture forts, places and property, taking care "to avoid any devastation, any
destruction of or interference with property, or any disturbance of peaceful citizens." 41
Early in 1863, the U.S. Supreme Court approved President Lincoln's report to use the war powers without the
benefit of Congress. The decision was handed in the celebrated Prize Cases42 which involved suits attacking
the President's right to legally institute a blockade. Although his Proclamation was subsequently validated by
Congress, the claimants contended that under international law, a blockade could be instituted only as a
measure of war under the sovereign power of the State. Since under the Constitution only Congress is
exclusively empowered to declare war, it is only that body that could impose a blockade and all prizes seized
before the legislative declaration were illegal. By a 5 to 4 vote, the Supreme Court upheld Lincoln's right to
act as he had.43
In the course of time, the U.S. President's power to call out armed forces and suspend the privilege of the
writ of habeas corpus without prior legislative approval, in case of invasion, insurrection, or rebellion came to
be recognized and accepted. The United States introduced the expanded presidential powers in the
Philippines through the Philippine Bill of 1902.44 The use of the power was put to judicial test and this Court
held that the case raised a political question and said that it is beyond its province to inquire into the exercise
of the power.45 Later, the grant of the power was incorporated in the 1935 Constitution.46
Elected in 1884, Grover Cleveland took his ascent to the presidency to mean that it made him the trustee of
all the people. Guided by the maxim that "Public office is a public trust," which he practiced during his
incumbency, Cleveland sent federal troops to Illinois to quell striking railway workers who defied a court
injunction. The injunction banned all picketing and distribution of handbills. For leading the strikes and
violating the injunction, Debs, who was the union president, was convicted of contempt of court. Brought to
the Supreme Court, the principal issue was by what authority of the Constitution or statute had the President
to send troops without the request of the Governor of the State.47
In In Re: Eugene Debs, et al,48 the Supreme Court upheld the contempt conviction. It ruled that it is not the
government's province to mix in merely individual present controversies. Still, so it went on, "whenever
wrongs complained of are such as affect the public at large, and are in respect of matters which by the
Constitution are entrusted to the care of the Nation and concerning which the Nation owes the duty to all
citizens of securing to them their common rights, then the mere fact that the Government has no pecuniary
interest in the controversy is not sufficient to exclude it from the Courts, or prevent it from taking measures
therein to fully discharge those constitutional duties."49 Thus, Cleveland's course had the Court's attest.
Taking off from President Cleveland, President Theodore Roosevelt launched what political scientists dub
the "stewardship theory." Calling himself "the steward of the people," he felt that the executive power "was
limited only by the specific restrictions and prohibitions appearing in the Constitution, or impleaded by
Congress under its constitutional powers."50
The most far-reaching extension of presidential power "T.R." ever undertook to employ was his plan to
occupy and operate Pennsylvania's coal mines under his authority as Commander-in-Chief. In the issue, he
found means other than force to end the 1902 hard-coal strike, but he had made detailed plans to use his
power as Commander-in-Chief to wrest the mines from the stubborn operators, so that coal production would
begin again.51
Eventually, the power of the State to intervene in and even take over the operation of vital utilities in the
public interest was accepted. In the Philippines, this led to the incorporation of Section 6, 52 Article XIII of the
1935 Constitution, which was later carried over with modifications in Section 7, 53 Article XIV of the 1973
Constitution, and thereafter in Section 18,54 Article XII of the 1987 Constitution.
The lesson to be learned from the U.S. constitutional history is that the Commander-in-Chief powers are
broad enough as it is and become more so when taken together with the provision on executive power and
the presidential oath of office. Thus, the plenitude of the powers of the presidency equips the occupant with
the means to address exigencies or threats which undermine the very existence of government or the
integrity of the State.
In The Philippine Presidency A Study of Executive Power, the late Mme. Justice Irene R. Cortes, proposed
that the Philippine President was vested with residual power and that this is even greater than that of the
U.S. President. She attributed this distinction to the "unitary and highly centralized" nature of the Philippine
government. She noted that, "There is no counterpart of the several states of the American union which have
reserved powers under the United States constitution." Elaborating on the constitutional basis for her
argument, she wrote:
…. The [1935] Philippine [C]onstitution establishes the three departments of the government in this
manner: "The legislative power shall be vested in a Congress of the Philippines which shall consist
of a Senate and a House of Representatives." "The executive power shall be vested in a President
of the Philippines." The judicial powers shall be vested in one Supreme Court and in such inferior
courts as may be provided by law." These provisions not only establish a separation of powers by
actual division but also confer plenary legislative, executive, and judicial powers. For as the
Supreme Court of the Philippines pointed out in Ocampo v. Cabangis, "a grant of legislative power
means a grant of all the legislative power; and a grant of the judicial power means a grant of all the
judicial power which may be exercised under the government." If this is true of the legislative power
which is exercised by two chambers with a combined membership [at that time] of more than 120
and of the judicial power which is vested in a hierarchy of courts, it can equally if not more
appropriately apply to the executive power which is vested in one official – the president. He
personifies the executive branch. There is a unity in the executive branch absent from the two
other branches of government. The president is not the chief of many executives. He is the
executive. His direction of the executive branch can be more immediate and direct than the United
States president because he is given by express provision of the constitution control over all
executive departments, bureaus and offices.55
The esteemed Justice conducted her study against the backdrop of the 1935 Constitution, the framers of
which, early on, arrived at a general opinion in favor of a strong Executive in the Philippines." 56 Since then,
reeling from the aftermath of martial law, our most recent Charter has restricted the President's powers as
Commander-in-Chief. The same, however, cannot be said of the President's powers as Chief Executive.
In her ponencia in Marcos v. Manglapus, Justice Cortes put her thesis into jurisprudence. There, the Court,
by a slim 8-7 margin, upheld the President's power to forbid the return of her exiled predecessor. The
rationale for the majority's ruling rested on the President's
… unstated residual powers which are implied from the grant of executive power and which are
necessary for her to comply with her duties under the Constitution. The powers of the President are
not limited to what are expressly enumerated in the article on the Executive Department and in
scattered provisions of the Constitution. This is so, notwithstanding the avowed intent of the
members of the Constitutional Commission of 1986 to limit the powers of the President as a
reaction to the abuses under the regime of Mr. Marcos, for the result was a limitation of specific
powers of the President, particularly those relating to the commander-in-chief clause, but not a
diminution of the general grant of executive power.57 [Underscoring supplied. Italics in the original.]
Thus, the President's authority to declare a state of rebellion springs in the main from her powers as chief
executive and, at the same time, draws strength from her Commander-in-Chief powers. Indeed, as the
Solicitor General accurately points out, statutory authority for such a declaration may be found in Section 4,
Chapter 2 (Ordinance Power), Book III (Office of the President) of the Revised Administrative Code of 1987,
which states:
SEC. 4. Proclamations. – Acts of the President fixing a date or declaring a status or condition of
public moment or interest, upon the existence of which the operation of a specific law or
regulation is made to depend, shall be promulgated in proclamations which shall have the force
of an executive order. [Emphasis supplied.]
The foregoing discussion notwithstanding, in calling out the armed forces, a declaration of a state of rebellion
is an utter superfluity.58 At most, it only gives notice to the nation that such a state exists and that the armed
forces may be called to prevent or suppress it.59 Perhaps the declaration may wreak emotional effects upon
the perceived enemies of the State, even on the entire nation. But this Court's mandate is to probe only into
the legal consequences of the declaration. This Court finds that such a declaration is devoid of any legal
significance. For all legal intents, the declaration is deemed not written.
Should there be any "confusion" generated by the issuance of Proclamation No. 427 and General Order No.
4, we clarify that, as the dissenters in Lacson correctly pointed out, the mere declaration of a state of
rebellion cannot diminish or violate constitutionally protected rights. 60 Indeed, if a state of martial law does
not suspend the operation of the Constitution or automatically suspend the privilege of the writ of habeas
corpus,61 then it is with more reason that a simple declaration of a state of rebellion could not bring about
these conditions.62 At any rate, the presidential issuances themselves call for the suppression of the rebellion
"with due regard to constitutional rights."
For the same reasons, apprehensions that the military and police authorities may resort to warrantless
arrests are likewise unfounded. In Lacson vs. Perez, supra, majority of the Court held that "[i]n quelling or
suppressing the rebellion, the authorities may only resort to warrantless arrests of persons suspected of
rebellion, as provided under Section 5, Rule 113 of the Rules of Court,63 if the circumstances so warrant. The
warrantless arrest feared by petitioners is, thus, not based on the declaration of a 'state of rebellion.'"64 In
other words, a person may be subjected to a warrantless arrest for the crime of rebellion whether or not the
President has declared a state of rebellion, so long as the requisites for a valid warrantless arrest are
present.
It is not disputed that the President has full discretionary power to call out the armed forces and to determine
the necessity for the exercise of such power. While the Court may examine whether the power was exercised
within constitutional limits or in a manner constituting grave abuse of discretion, none of the petitioners here
have, by way of proof, supported their assertion that the President acted without factual basis. 65
The argument that the declaration of a state of rebellion amounts to a declaration of martial law and,
therefore, is a circumvention of the report requirement, is a leap of logic. There is no indication that military
tribunals have replaced civil courts in the "theater of war" or that military authorities have taken over the
functions of civil government. There is no allegation of curtailment of civil or political rights. There is no
indication that the President has exercised judicial and legislative powers. In short, there is no illustration that
the President has attempted to exercise or has exercised martial law powers.
Nor by any stretch of the imagination can the declaration constitute an indirect exercise of emergency
powers, which exercise depends upon a grant of Congress pursuant to Section 23 (2), Article VI of the
Constitution:
Sec. 23. (1) ….
(2) In times of war or other national emergency, the Congress may, by law, authorize the
President, for a limited period and subject to such restrictions as it may prescribe, to exercise
powers necessary and proper to carry out a declared national policy. Unless sooner withdrawn by
resolution of the Congress, such powers shall cease upon the next adjournment thereof.
The petitions do not cite a specific instance where the President has attempted to or has exercised powers
beyond her powers as Chief Executive or as Commander-in-Chief. The President, in declaring a state of
rebellion and in calling out the armed forces, was merely exercising a wedding of her Chief Executive and
Commander-in-Chief powers. These are purely executive powers, vested on the President by Sections 1
and 18, Article VII, as opposed to the delegated legislative powers contemplated by Section 23 (2), Article
VI.
WHEREFORE, the petitions are hereby DISMISSED.
SO ORDERED.
SUPREME COURT
EN BANC
G.R. No. 164978 October 13, 2005
AQUILINO Q. PIMENTEL, JR., EDGARDO J. ANGARA, JUAN PONCE ENRILE, LUISA P. EJERCITO-
ESTRADA, JINGGOY E. ESTRADA, PANFILO M. LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL,
and SERGIO R. OSMEÑA III, Petitioners
vs.
EXEC. SECRETARY EDUARDO R. ERMITA, FLORENCIO B. ABAD, AVELINO J. CRUZ, JR., MICHAEL
T. DEFENSOR, JOSEPH H. DURANO, RAUL M. GONZALEZ, ALBERTO G. ROMULO, RENE C. VILLA,
and ARTHUR C. YAP, Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for certiorari and prohibition1 with a prayer for the issuance of a writ of preliminary injunction
to declare unconstitutional the appointments issued by President Gloria Macapagal-Arroyo ("President
Arroyo") through Executive Secretary Eduardo R. Ermita ("Secretary Ermita") to Florencio B. Abad, Avelino
J. Cruz, Jr., Michael T. Defensor, Joseph H. Durano, Raul M. Gonzalez, Alberto G. Romulo, Rene C. Villa,
and Arthur C. Yap ("respondents") as acting secretaries of their respective departments. The petition also
seeks to prohibit respondents from performing the duties of department secretaries.
Antecedent Facts
The Senate and the House of Representatives ("Congress") commenced their regular session on 26 July
2004. The Commission on Appointments, composed of Senators and Representatives, was constituted on
25 August 2004.
Meanwhile, President Arroyo issued appointments2 to respondents as acting secretaries of their respective
departments.
Appointee Department Date of Appointment

Arthur C. Yap Agriculture 15 August 2004
Alberto G. Romulo Foreign Affairs 23 August 2004
Raul M. Gonzalez Justice 23 August 2004
Florencio B. Abad Education 23 August 2004
Avelino J. Cruz, Jr. National Defense 23 August 2004
Rene C. Villa Agrarian Reform 23 August 2004
Joseph H. Durano Tourism 23 August 2004
Michael T. Defensor Environment and Natural Resources 23 August 2004
The appointment papers are uniformly worded as follows:
Sir:
Pursuant to the provisions of existing laws, you are hereby appointed ACTING SECRETARY,
DEPARTMENT OF (appropriate department) vice (name of person replaced).
By virtue hereof, you may qualify and enter upon the performance of the duties and functions of the office,
furnishing this Office and the Civil Service Commission with copies of your Oath of Office.
(signed)
Gloria Arroyo
Respondents took their oath of office and assumed duties as acting secretaries.
On 8 September 2004, Aquilino Q. Pimentel, Jr. ("Senator Pimentel"), Edgardo J. Angara ("Senator Angara"),
Juan Ponce Enrile ("Senator Enrile"), Luisa P. Ejercito-Estrada ("Senator Ejercito-Estrada"), Jinggoy E.
Estrada ("Senator Estrada"), Panfilo M. Lacson ("Senator Lacson"), Alfredo S. Lim ("Senator Lim"), Jamby
A.S. Madrigal ("Senator Madrigal"), and Sergio R. Osmeña, III ("Senator Osmeña") ("petitioners") filed the
present petition as Senators of the Republic of the Philippines.
Congress adjourned on 22 September 2004. On 23 September 2004, President Arroyo issued ad

interimappointments3 to respondents as secretaries of the departments to which they were previously
appointed in an acting capacity. The appointment papers are uniformly worded as follows:
Sir:
Pursuant to the provisions of existing laws, you are hereby appointed SECRETARY [AD INTERIM],
DEPARTMENT OF (appropriate department).
By virtue hereof, you may qualify and enter upon the performance of the duties and functions of the office,
furnishing this Office and the Civil Service Commission with copies of your oath of office.
(signed)
Gloria Arroyo
Issue
The petition questions the constitutionality of President Arroyo’s appointment of respondents as acting
secretaries without the consent of the Commission on Appointments while Congress is in session.
The Court’s Ruling
The petition has no merit.
Preliminary Matters
On the Mootness of the Petition
The Solicitor General argues that the petition is moot because President Arroyo had extended to
respondents ad interim appointments on 23 September 2004 immediately after the recess of Congress.
As a rule, the writ of prohibition will not lie to enjoin acts already done.4 However, as an exception to the rule
on mootness, courts will decide a question otherwise moot if it is capable of repetition yet evading review.5
In the present case, the mootness of the petition does not bar its resolution. The question of the
constitutionality of the President’s appointment of department secretaries in an acting capacity while
Congress is in session will arise in every such appointment.
On the Nature of the Power to Appoint
The power to appoint is essentially executive in nature, and the legislature may not interfere with the exercise
of this executive power except in those instances when the Constitution expressly allows it to
interfere.6 Limitations on the executive power to appoint are construed strictly against the legislature.7 The
scope of the legislature’s interference in the executive’s power to appoint is limited to the power to prescribe
the qualifications to an appointive office. Congress cannot appoint a person to an office in the guise of
prescribing qualifications to that office. Neither may Congress impose on the President the duty to appoint
any particular person to an office.8
However, even if the Commission on Appointments is composed of members of Congress, the exercise of its
powers is executive and not legislative. The Commission on Appointments does not legislate when it
exercises its power to give or withhold consent to presidential appointments. Thus:
xxx The Commission on Appointments is a creature of the Constitution. Although its membership is confined
to members of Congress, said Commission is independent of Congress. The powers of the Commission do
not come from Congress, but emanate directly from the Constitution. Hence, it is not an agent of Congress.
In fact, the functions of the Commissioner are purely executive in nature. xxx9
On Petitioners’ Standing
The Solicitor General states that the present petition is a quo warranto proceeding because, with the
exception of Secretary Ermita, petitioners effectively seek to oust respondents for unlawfully exercising the
powers of department secretaries. The Solicitor General further states that petitioners may not claim standing
as Senators because no power of the Commission on Appointments has been "infringed upon or violated by
the President. xxx If at all, the Commission on Appointments as a body (rather than individual members of
the Congress) may possess standing in this case."10
Petitioners, on the other hand, state that the Court can exercise its certiorari jurisdiction over unconstitutional
acts of the President.11 Petitioners further contend that they possess standing because President Arroyo’s
appointment of department secretaries in an acting capacity while Congress is in session impairs the powers
of Congress. Petitioners cite Sanlakas v. Executive Secretary12 as basis, thus:
To the extent that the powers of Congress are impaired, so is the power of each member thereof, since his
office confers a right to participate in the exercise of the powers of that institution.
An act of the Executive which injures the institution of Congress causes a derivative but nonetheless
substantial injury, which can be questioned by a member of Congress. In such a case, any member of
Congress can have a resort to the courts.
Considering the independence of the Commission on Appointments from Congress, it is error for petitioners
to claim standing in the present case as members of Congress. President Arroyo’s issuance of acting
appointments while Congress is in session impairs no power of Congress. Among the petitioners, only the
following are members of the Commission on Appointments of the 13th Congress: Senator Enrile as Minority
Floor Leader, Senator Lacson as Assistant Minority Floor Leader, and Senator Angara, Senator Ejercito-
Estrada, and Senator Osmeña as members.
Thus, on the impairment of the prerogatives of members of the Commission on Appointments, only Senators
Enrile, Lacson, Angara, Ejercito-Estrada, and Osmeña have standing in the present petition. This is in
contrast to Senators Pimentel, Estrada, Lim, and Madrigal, who, though vigilant in protecting their perceived
prerogatives as members of Congress, possess no standing in the present petition.
The Constitutionality of President Arroyo’s Issuance
of Appointments to Respondents as Acting Secretaries
Petitioners contend that President Arroyo should not have appointed respondents as acting secretaries
because "in case of a vacancy in the Office of a Secretary, it is only an Undersecretary who can be
designated as Acting Secretary."13 Petitioners base their argument on Section 10, Chapter 2, Book IV of
Executive Order No. 292 ("EO 292"),14 which enumerates the powers and duties of the undersecretary.
Paragraph 5 of Section 10 reads:
SEC. 10. Powers and Duties of the Undersecretary. - The Undersecretary shall:
xxx
(5) Temporarily discharge the duties of the Secretary in the latter’s absence or inability to discharge his
duties for any cause or in case of vacancy of the said office, unless otherwise provided by law. Where there
are more than one Undersecretary, the Secretary shall allocate the foregoing powers and duties among
them. The President shall likewise make the temporary designation of Acting Secretary from among them;
and
xxx
Petitioners further assert that "while Congress is in session, there can be no appointments, whether regular
or acting, to a vacant position of an office needing confirmation by the Commission on Appointments, without
first having obtained its consent."15
In sharp contrast, respondents maintain that the President can issue appointments in an acting capacity to
department secretaries without the consent of the Commission on Appointments even while Congress is in
session. Respondents point to Section 16, Article VII of the 1987 Constitution. Section 16 reads:
SEC. 16. The President shall nominate and, with the consent of the Commission on Appointments, appoint
the heads of the executive departments, ambassadors, other public ministers and consuls, or officers of the
armed forces from the rank of colonel or naval captain, and other officers whose appointments are vested in
him in this Constitution. He shall also appoint all other officers of the Government whose appointments are
not otherwise provided for by law, and those whom he may be authorized by law to appoint. The Congress
may, by law, vest the appointment of other officers lower in rank in the President alone, in the courts, or in
the heads of departments, agencies, commissions, or boards.
The President shall have the power to make appointments during the recess of the Congress, whether
voluntary or compulsory, but such appointments shall be effective only until disapproval by the Commission
on Appointments or until the next adjournment of the Congress.
Respondents also rely on EO 292, which devotes a chapter to the President’s power of appointment.
Sections 16 and 17, Chapter 5, Title I, Book III of EO 292 read:
SEC. 16. Power of Appointment. — The President shall exercise the power to appoint such officials as
provided for in the Constitution and laws.
SEC. 17. Power to Issue Temporary Designation. — (1) The President may temporarily designate an
officer already in the government service or any other competent person to perform the functions of
an office in the executive branch, appointment to which is vested in him by law, when: (a) the officer
regularly appointed to the office is unable to perform his duties by reason of illness, absence or any
other cause; or (b) there exists a vacancy[.]
(2) The person designated shall receive the compensation attached to the position, unless he is already in
the government service in which case he shall receive only such additional compensation as, with his
existing salary, shall not exceed the salary authorized by law for the position filled. The compensation hereby
authorized shall be paid out of the funds appropriated for the office or agency concerned.
(3) In no case shall a temporary designation exceed one (1) year. (Emphasis supplied)
Petitioners and respondents maintain two diametrically opposed lines of thought. Petitioners assert that the
President cannot issue appointments in an acting capacity to department secretaries while Congress is in
session because the law does not give the President such power. In contrast, respondents insist that the
President can issue such appointments because no law prohibits such appointments.
The essence of an appointment in an acting capacity is its temporary nature. It is a stop-gap measure
intended to fill an office for a limited time until the appointment of a permanent occupant to the office. 16 In
case of vacancy in an office occupied by an alter ego of the President, such as the office of a department
secretary, the President must necessarily appoint an alter ego of her choice as acting secretary before the
permanent appointee of her choice could assume office.
Congress, through a law, cannot impose on the President the obligation to appoint automatically the
undersecretary as her temporary alter ego. An alter ego, whether temporary or permanent, holds a position
of great trust and confidence. Congress, in the guise of prescribing qualifications to an office, cannot impose
on the President who her alter ego should be.
The office of a department secretary may become vacant while Congress is in session. Since a department
secretary is the alter ego of the President, the acting appointee to the office must necessarily have the
President’s confidence. Thus, by the very nature of the office of a department secretary, the President must
appoint in an acting capacity a person of her choice even while Congress is in session. That person may or
may not be the permanent appointee, but practical reasons may make it expedient that the acting appointee
will also be the permanent appointee.
The law expressly allows the President to make such acting appointment. Section 17, Chapter 5, Title I, Book
III of EO 292 states that "[t]he President may temporarily designate an officer already in the government
service or any other competent person to perform the functions of an office in the executive branch." Thus,
the President may even appoint in an acting capacity a person not yet in the government service, as long as
the President deems that person competent.
Petitioners assert that Section 17 does not apply to appointments vested in the President by the Constitution,
because it only applies to appointments vested in the President by law. Petitioners forget that Congress is
not the only source of law. "Law" refers to the Constitution, statutes or acts of Congress, municipal
ordinances, implementing rules issued pursuant to law, and judicial decisions. 17
Finally, petitioners claim that the issuance of appointments in an acting capacity is susceptible to abuse.
Petitioners fail to consider that acting appointments cannot exceed one year as expressly provided in Section
17(3), Chapter 5, Title I, Book III of EO 292. The law has incorporated this safeguard to prevent abuses, like
the use of acting appointments as a way to circumvent confirmation by the Commission on Appointments.
In distinguishing ad interim appointments from appointments in an acting capacity, a noted textbook writer on
constitutional law has observed:
Ad-interim appointments must be distinguished from appointments in an acting capacity. Both of them are
effective upon acceptance. But ad-interim appointments are extended only during a recess of Congress,
whereas acting appointments may be extended any time there is a vacancy. Moreover ad-interim
appointments are submitted to the Commission on Appointments for confirmation or rejection; acting
appointments are not submitted to the Commission on Appointments. Acting appointments are a way of
temporarily filling important offices but, if abused, they can also be a way of circumventing the need for
confirmation by the Commission on Appointments.18
However, we find no abuse in the present case. The absence of abuse is readily apparent from President
Arroyo’s issuance of ad interim appointments to respondents immediately upon the recess of Congress, way
before the lapse of one year.
WHEREFORE, we DISMISS the present petition for certiorari and prohibition.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice
SUPREME COURT
Manila
EN BANC
G.R. No. 96541 August 24, 1993
DEAN JOSE JOYA, CARMEN GUERRERO NAKPIL, ARMIDA SIGUION REYNA, PROF. RICARTE M.
PURUGANAN, IRMA POTENCIANO, ADRIAN CRISTOBAL, INGRID SANTAMARIA, CORAZON FIEL,
AMBASSADOR E. AGUILAR CRUZ, FLORENCIO R. JACELA, JR., MAURO MALANG, FEDERICO
AGUILAR ALCUAZ, LUCRECIA R. URTULA, SUSANO GONZALES, STEVE SANTOS, EPHRAIM
SAMSON, SOLER SANTOS, ANG KIU KOK, KERIMA POLOTAN, LUCRECIA KASILAG, LIGAYA DAVID
PEREZ, VIRGILIO ALMARIO, LIWAYWAY A. ARCEO, CHARITO PLANAS, HELENA BENITEZ, ANNA
MARIA L. HARPER, ROSALINDA OROSA, SUSAN CALO MEDINA, PATRICIA RUIZ, BONNIE RUIZ,
NELSON NAVARRO, MANDY NAVASERO, ROMEO SALVADOR, JOSEPHINE DARANG, and PAZ VETO
PLANAS, petitioners,
vs.
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG), CATALINO MACARAIG, JR., in his
official capacity, and/or the Executive Secretary, and CHAIRMAN MATEO A.T. CAPARAS, respondents.
BELLOSILLO, J.:
All thirty-five (35) petitioners in this Special Civil Action for Prohibition and Mandamus with Prayer for
Preliminary Injunction and/or Restraining Order seek to enjoin the Presidential Commission on Good
Government (PCGG) from proceeding with the auction sale scheduled on 11 January 1991 by Christie's of
New York of the Old Masters Paintings and 18th and 19th century silverware seized from Malacañang and
the Metropolitan Museum of Manila and placed in the custody of the Central Bank.
The antecedents: On 9 August 1990, Mateo A.T. Caparas, then Chairman of PCGG, wrote then President
Corazon C. Aquino, requesting her for authority to sign the proposed Consignment Agreement between the
Republic of the Philippines through PCGG and Christie, Manson and Woods International, Inc. (Christie's of
New York, or CHRISTIE'S) concerning the scheduled sale on 11 January 1991 of eighty-two (82) Old
Masters Paintings and antique silverware seized from Malacañang and the Metropolitan Museum of Manila
alleged to be part of the ill-gotten wealth of the late President Marcos, his relatives and cronies.
On 14 August 1990, then President Aquino, through former Executive Secretary Catalino Macaraig, Jr.,
authorized Chairman Caparas to sign the Consignment Agreement allowing Christie's of New York to auction
off the subject art pieces for and in behalf of the Republic of the Philippines.
On 15 August 1990, PCGG, through Chairman Caparas, representing the Government of the Republic of the
Philippines, signed the Consignment Agreement with Christie's of New York. According to the agreement,
PCGG shall consign to CHRISTIE'S for sale at public auction the eighty-two (82) Old Masters Paintings then
found at the Metropolitan Museum of Manila as well as the silverware contained in seventy-one (71) cartons
in the custody of the Central Bank of the Philippines, and such other property as may subsequently be
identified by PCGG and accepted by CHRISTIE'S to be subject to the provisions of the agreement. 1
On 26 October 1990, the Commission on Audit (COA) through then Chairman Eufemio C. Domingo
submitted to President Aquino the audit findings and observations of COA on the Consignment Agreement of
15 August 1990 to the effect that: (a) the authority of former PCGG Chairman Caparas to enter into the
Consignment Agreement was of doubtful legality; (b) the contract was highly disadvantageous to the
government; (c) PCGG had a poor track record in asset disposal by auction in the U.S.; and, (d) the assets
subject of auction were historical relics and had cultural significance, hence, their disposal was prohibited by
law. 2
On 15 November 1990, PCGG through its new Chairman David M. Castro, wrote President Aquino
defending the Consignment Agreement and refuting the allegations of COA Chairman Domingo. 3 On the
same date, Director of National Museum Gabriel S. Casal issued a certification that the items subject of the
Consignment Agreement did not fall within the classification of protected cultural properties and did not
specifically qualify as part of the Filipino cultural heritage.4 Hence, this petition originally filed on 7 January
1991 by Dean Jose Joya, Carmen Guerrero Nakpil, Armida Siguion Reyna, Prof. Ricarte M. Puruganan, Irma
Potenciano, Adrian Cristobal, Ingrid Santamaria, Corazon Fiel, Ambassador E. Aguilar Cruz, Florencio R.
Jacela, Jr., Mauro Malang, Federico Aguilar Alcuaz, Lucrecia R. Urtula, Susano Gonzales, Steve Santos,
Ephraim Samson, Soler Santos, Ang Kiu Kok, Kerima Polotan, Lucrecia Kasilag, Ligaya David Perez, Virgilio
Almario and Liwayway A. Arceo.
After the oral arguments of the parties on 9 January 1991, we issued immediately our resolution denying the
application for preliminary injunction to restrain the scheduled sale of the artworks on the ground that
petitioners had not presented a clear legal right to a restraining order and that proper parties had not been
impleaded.
On 11 January 1991, the sale at public auction proceeded as scheduled and the proceeds of $13,302,604.86
were turned over to the Bureau of Treasury.5
On 5 February 1991, on motion of petitioners, the following were joined as additional petitioners: Charito
Planas, Helena Benitez, Ana Maria L. Harper, Rosalinda Orosa, Susan Carlo Medina, Patricia Ruiz, Bonnie
Ruiz, Nelson Navarro, Mandy Navasero, Romeo Salvador, Josephine Darang and Paz Veto Planas.
On the other hand, Catalino Macaraig, Jr., in his capacity as former Executive Secretary, the incumbent
Executive Secretary, and Chairman Mateo A.T. Caparas were impleaded as additional respondents.
Petitioners raise the following issues: (a) whether petitioners have legal standing to file the instant petition;
(b) whether the Old Masters Paintings and antique silverware are embraced in the phrase "cultural treasure
of the nation" which is under the protection of the state pursuant to the 1987 Constitution and/or "cultural
properties" contemplated under R.A. 4846, otherwise known as "The Cultural Properties Preservation and
Protection Act;" (c) whether the paintings and silverware are properties of public dominion on which can be
disposed of through the joint concurrence of the President and Congress;
(d) whether respondent, PCGG has the jurisdiction and authority to enter into an agreement with Christie's of
New York for the sale of the artworks; (e) whether, PCGG has complied with the due process clause and
other statutory requirements for the exportation and sale of the subject items; and, (f) whether the petition
has become moot and academic, and if so, whether the above issues warrant resolution from this Court.
The issues being interrelated, they will be discussed jointly hereunder. However, before proceeding, we wish
to emphasize that we admire and commend petitioners' zealous concern to keep and preserve within the
country great works of art by well-known old masters. Indeed, the value of art cannot be gainsaid. For, by
serving as a creative medium through which man can express his innermost thoughts and unbridled
emotions while, at the same time, reflecting his deep-seated ideals, art has become a true expression of
beauty, joy, and life itself. Such artistic creations give us insights into the artists' cultural heritage — the
historic past of the nation and the era to which they belong — in their triumphant, glorious, as well as
troubled and turbulent years. It must be for this reason that the framers of the 1987 Constitution mandated in
Art. XIV, Sec. 14, that is the solemn duty of the state to "foster the preservation, enrichment, and dynamic
evolution of a Filipino national culture based on the principle of unity in diversity in a climate of free artistic
and intellectual expression." And, in urging this Court to grant their petition, petitioners invoke this policy of
the state on the protection of the arts.
But, the altruistic and noble purpose of the petition notwithstanding, there is that basic legal question which
must first be resolved: whether the instant petition complies with the legal requisites for this Court to exercise
its power of judicial review over this case.
The rule is settled that no question involving the constitutionality or validity of a law or governmental act may
be heard and decided by the court unless there is compliance with the legal requisites for judicial inquiry,
namely: that the question must be raised by the proper party; that there must be an actual case or
controversy; that the question must be raised at the earliest possible opportunity; and, that the decision on
the constitutional or legal question must be necessary to the determination of the case itself. 6 But the most
important are the first two (2) requisites.
On the first requisite, we have held that one having no right or interest to protect cannot invoke the
jurisdiction of the court as party-plaintiff in an
action.7 This is premised on Sec. 2, Rule 3, of the Rules of Court which provides that every action must be
prosecuted and defended in the name of the real party-in-interest, and that all persons having interest in the
subject of the action and in obtaining the relief demanded shall be joined as plaintiffs. The Court will exercise
its power of judicial review only if the case is brought before it by a party who has the legal standing to raise
the constitutional or legal question. "Legal standing" means a personal and substantial interest in the case
such that the party has sustained or will sustain direct injury as a result of the governmental act that is being
challenged. The term "interest" is material interest, an interest in issue and to be affected by the decree, as
distinguished from mere interest in the question involved, or a mere incidental interest. 8 Moreover, the
interest of the party plaintiff must be personal and not one based on a desire to vindicate the constitutional
right of some third and related party. 9
There are certain instances however when this Court has allowed exceptions to the rule on legal standing, as
when a citizen brings a case for mandamus to procure the enforcement of a public duty for the fulfillment of a
public right recognized by the Constitution, 10 and when a taxpayer questions the validity of a governmental
act authorizing the disbursement of public funds. 11
Petitioners claim that as Filipino citizens, taxpayers and artists deeply concerned with the preservation and
protection of the country's artistic wealth, they have the legal personality to restrain respondents Executive
Secretary and PCGG from acting contrary to their public duty to conserve the artistic creations as mandated
by the 1987 Constitution, particularly Art. XIV, Secs. 14 to 18, on Arts and Culture, and R.A. 4846 known as
"The Cultural Properties Preservation and Protection Act," governing the preservation and disposition of
national and important cultural properties. Petitioners also anchor their case on the premise that the paintings
and silverware are public properties collectively owned by them and by the people in general to view and
enjoy as great works of art. They allege that with the unauthorized act of PCGG in selling the art pieces,
petitioners have been deprived of their right to public property without due process of law in violation of the
Constitution. 12
Petitioners' arguments are devoid of merit. They lack basis in fact and in law. They themselves allege that
the paintings were donated by private persons from different parts of the world to the Metropolitan Museum
of Manila Foundation, which is a non-profit and non-stock corporations established to promote non-Philippine
arts. The foundation's chairman was former First Lady Imelda R. Marcos, while its president was Bienvenido
R. Tantoco. On this basis, the ownership of these paintings legally belongs to the foundation or corporation
or the members thereof, although the public has been given the opportunity to view and appreciate these
paintings when they were placed on exhibit.
Similarly, as alleged in the petition, the pieces of antique silverware were given to the Marcos couple as gifts
from friends and dignitaries from foreign countries on their silver wedding and anniversary, an occasion
personal to them. When the Marcos administration was toppled by the revolutionary government, these
paintings and silverware were taken from Malacañang and the Metropolitan Museum of Manila and
transferred to the Central Bank Museum. The confiscation of these properties by the Aquino administration
however should not be understood to mean that the ownership of these paintings has automatically passed
on the government without complying with constitutional and statutory requirements of due process and just
compensation. If these properties were already acquired by the government, any constitutional or statutory
defect in their acquisition and their subsequent disposition must be raised only by the proper parties — the
true owners thereof — whose authority to recover emanates from their proprietary rights which are protected
by statutes and the Constitution. Having failed to show that they are the legal owners of the artworks or that
the valued pieces have become publicly owned, petitioners do not possess any clear legal right whatsoever
to question their alleged unauthorized disposition.
Further, although this action is also one of mandamus filed by concerned citizens, it does not fulfill the criteria
for a mandamus suit. In Legaspi v. Civil Service Commission, 13 this Court laid down the rule that a writ of
mandamus may be issued to a citizen only when the public right to be enforced and the concomitant duty of
the state are unequivocably set forth in the Constitution. In the case at bar, petitioners are not after the
fulfillment of a positive duty required of respondent officials under the 1987 Constitution. What they seek is
the enjoining of an official act because it is constitutionally infirmed. Moreover, petitioners' claim for the
continued enjoyment and appreciation by the public of the artworks is at most a privilege and is
unenforceable as a constitutional right in this action for mandamus.
Neither can this petition be allowed as a taxpayer's suit. Not every action filed by a taxpayer can qualify to
challenge the legality of official acts done by the government. A taxpayer's suit can prosper only if the
governmental acts being questioned involve disbursement of public funds upon the theory that the
expenditure of public funds by an officer of the state for the purpose of administering an unconstitutional act
constitutes a misapplication of such funds, which may be enjoined at the request of a taxpayer. 14 Obviously,
petitioners are not challenging any expenditure involving public funds but the disposition of what they allege
to be public properties. It is worthy to note that petitioners admit that the paintings and antique silverware
were acquired from private sources and not with public money.
Anent the second requisite of actual controversy, petitioners argue that this case should be resolved by this
Court as an exception to the rule on moot and academic cases; that although the sale of the paintings and
silver has long been consummated and the possibility of retrieving the treasure trove is nil, yet the novelty
and importance of the issues raised by the petition deserve this Court's attention. They submit that the
resolution by the Court of the issues in this case will establish future guiding principles and doctrines on the
preservation of the nation's priceless artistic and cultural possessions for the benefit of the public as a
whole. 15
For a court to exercise its power of adjudication, there must be an actual case of controversy — one which
involves a conflict of legal rights, an assertion of opposite legal claims susceptible of judicial resolution; the
case must not be moot or academic or based on extra-legal or other similar considerations not cognizable by
a court of justice. 16 A case becomes moot and academic when its purpose has become stale, 17 such as the
case before us. Since the purpose of this petition for prohibition is to enjoin respondent public officials from
holding the auction sale of the artworks on a particular date — 11 January 1991 — which is long past, the
issues raised in the petition have become moot and academic.
At this point, however, we need to emphasize that this Court has the discretion to take cognizance of a suit
which does not satisfy the requirements of an actual case or legal standing when paramount public interest is
involved. 18We find however that there is no such justification in the petition at bar to warrant the relaxation of
the rule.
Section 2 of R.A. 4846, as amended by P.D. 374, declares it to be the policy of the state to preserve and
protect the important cultural properties and national cultural treasures of the nation and to safeguard their
intrinsic value. As to what kind of artistic and cultural properties are considered by the State as involving
public interest which should therefore be protected, the answer can be gleaned from reading of the reasons
behind the enactment of R.A. 4846:
WHEREAS, the National Museum has the difficult task, under existing laws and
regulations, of preserving and protecting the cultural properties of the nation;
WHEREAS, inumerable sites all over the country have since been excavated for cultural
relics, which have passed on to private hands, representing priceless cultural treasure
that properly belongs to the Filipino people as their heritage;
WHEREAS, it is perhaps impossible now to find an area in the Philippines, whether

government or private property, which has not been disturbed by commercially-minded
diggers and collectors, literally destroying part of our historic past;
WHEREAS, because of this the Philippines has been charged as incapable of preserving
and protecting her cultural legacies;
WHEREAS, the commercialization of Philippine relics from the contact period, the
Neolithic Age, and the Paleolithic Age, has reached a point perilously placing beyond
reach of savants the study and reconstruction of Philippine prehistory; and
WHEREAS, it is believed that more stringent regulation on movement and a limited form
of registration of important cultural properties and of designated national cultural
treasures is necessary, and that regardless of the item, any cultural property exported or
sold locally must be registered with the National Museum to control the deplorable
situation regarding our national cultural properties and to implement the Cultural
Properties Law (emphasis supplied).
Clearly, the cultural properties of the nation which shall be under the protection of the state are classified as
the "important cultural properties" and the "national cultural treasures." "Important cultural properties" are
cultural properties which have been singled out from among the innumerable cultural properties as having
exceptional historical cultural significance to the Philippines but are not sufficiently outstanding to merit the
classification of national cultural treasures. 19 On the other hand, a "national cultural treasures" is a unique
object found locally, possessing outstanding historical, cultural, artistic and/or scientific value which is highly
significant and important to this country and nation. 20 This Court takes note of the certification issued by the
Director of the Museum that the Italian paintings and silverware subject of this petition do not constitute
protected cultural properties and are not among those listed in the Cultural Properties Register of the
National Museum.
We agree with the certification of the Director of the Museum. Under the law, it is the Director of the Museum
who is authorized to undertake the inventory, registration, designation or classification, with the aid of
competent experts, of important cultural properties and national cultural treasures. 21 Findings of
administrative officials and agencies who have acquired expertise because their jurisdiction is confined to
specific matters are generally accorded not only respect but at times even finality if such findings are
supported by substantial evidence and are controlling on the reviewing authorities because of their
acknowledged expertise in the fields of specialization to which they are assigned. 22
In view of the foregoing, this Court finds no compelling reason to grant the petition. Petitioners have failed to
show that respondents Executive Secretary and PCGG exercised their functions with grave abuse of
discretion or in excess of their jurisdiction.
WHEREFORE, for lack of merit, the petition for prohibition and mandamus is DISMISSED.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo,
Quiason, Puno and Vitug, JJ., concur.
EN BANC
G.R. No. 155001 May 5, 2003
DEMOSTHENES P. AGAN, JR., JOSEPH B. CATAHAN, JOSE MARI B. REUNILLA, MANUEL ANTONIO
B. BOÑE, MAMERTO S. CLARA, REUEL E. DIMALANTA, MORY V. DOMALAON, CONRADO G.
DIMAANO, LOLITA R. HIZON, REMEDIOS P. ADOLFO, BIENVENIDO C. HILARIO, MIASCOR
WORKERS UNION - NATIONAL LABOR UNION (MWU-NLU), and PHILIPPINE AIRLINES EMPLOYEES
ASSOCIATION (PALEA), petitioners,
vs.
PHILIPPINE INTERNATIONAL AIR TERMINALS CO., INC., MANILA INTERNATIONAL AIRPORT
AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS and SECRETARY
LEANDRO M. MENDOZA, in his capacity as Head of the Department of Transportation and
Communications, respondents,
MIASCOR GROUNDHANDLING CORPORATION, DNATA-WINGS AVIATION SYSTEMS
CORPORATION, MACROASIA-EUREST SERVICES, INC., MACROASIA-MENZIES AIRPORT SERVICES
CORPORATION, MIASCOR CATERING SERVICES CORPORATION, MIASCOR AIRCRAFT
MAINTENANCE CORPORATION, and MIASCOR LOGISTICS CORPORATION, petitioners-in-intervention,
x---------------------------------------------------------x
G.R. No. 155547 May 5, 2003
SALACNIB F. BATERINA, CLAVEL A. MARTINEZ and CONSTANTINO G. JARAULA, petitioners,

vs.
AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, DEPARTMENT OF
PUBLIC WORKS AND HIGHWAYS, SECRETARY LEANDRO M. MENDOZA, in his capacity as Head of
the Department of Transportation and Communications, and SECRETARY SIMEON A.
DATUMANONG, in his capacity as Head of the Department of Public Works and
Highways, respondents,
JACINTO V. PARAS, RAFAEL P. NANTES, EDUARDO C. ZIALCITA, WILLY BUYSON VILLARAMA,
PROSPERO C. NOGRALES, PROSPERO A. PICHAY, JR., HARLIN CAST ABAYON, and BENASING O.
MACARANBON, respondents-intervenors,
x---------------------------------------------------------x
G.R. No. 155661 May 5, 2003
CEFERINO C. LOPEZ, RAMON M. SALES, ALFREDO B. VALENCIA, MA. TERESA V. GAERLAN,

LEONARDO DE LA ROSA, DINA C. DE LEON, VIRGIE CATAMIN RONALD SCHLOBOM, ANGELITO
SANTOS, MA. LUISA M. PALCON and SAMAHANG MANGGAGAWA SA PALIPARAN NG PILIPINAS
(SMPP), petitioners,
vs.
AUTHORITY, DEPARTMENT OF TRANSPORTATION AND COMMUNICATIONS, SECRETARY
LEANDRO M. MENDOZA, in his capacity as Head of the Department of Transportation and
Communications, respondents.
PUNO, J.:
Petitioners and petitioners-in-intervention filed the instant petitions for prohibition under Rule 65 of the
Revised Rules of Court seeking to prohibit the Manila International Airport Authority (MIAA) and the
Department of Transportation and Communications (DOTC) and its Secretary from implementing the
following agreements executed by the Philippine Government through the DOTC and the MIAA and the
Philippine International Air Terminals Co., Inc. (PIATCO): (1) the Concession Agreement signed on July 12,
1997, (2) the Amended and Restated Concession Agreement dated November 26, 1999, (3) the First
Supplement to the Amended and Restated Concession Agreement dated August 27, 1999, (4) the Second
Supplement to the Amended and Restated Concession Agreement dated September 4, 2000, and (5) the
Third Supplement to the Amended and Restated Concession Agreement dated June 22, 2001 (collectively,
the PIATCO Contracts).
The facts are as follows:
In August 1989, the DOTC engaged the services of Aeroport de Paris (ADP) to conduct a
comprehensive study of the Ninoy Aquino International Airport (NAIA) and determine whether the
present airport can cope with the traffic development up to the year 2010. The study consisted of
two parts: first, traffic forecasts, capacity of existing facilities, NAIA future requirements, proposed
master plans and development plans; and second, presentation of the preliminary design of the
passenger terminal building. The ADP submitted a Draft Final Report to the DOTC in December
1989.
Some time in 1993, six business leaders consisting of John Gokongwei, Andrew Gotianun, Henry
Sy, Sr., Lucio Tan, George Ty and Alfonso Yuchengco met with then President Fidel V. Ramos to
explore the possibility of investing in the construction and operation of a new international airport
terminal. To signify their commitment to pursue the project, they formed the Asia's Emerging
Dragon Corp. (AEDC) which was registered with the Securities and Exchange Commission (SEC)
on September 15, 1993.
On October 5, 1994, AEDC submitted an unsolicited proposal to the Government through the
DOTC/MIAA for the development of NAIA International Passenger Terminal III (NAIA IPT III) under
a build-operate-and-transfer arrangement pursuant to RA 6957 as amended by RA 7718 (BOT
Law).1
On December 2, 1994, the DOTC issued Dept. Order No. 94-832 constituting the Prequalification Bids and
Awards Committee (PBAC) for the implementation of the NAIA IPT III project.
On March 27, 1995, then DOTC Secretary Jose Garcia endorsed the proposal of AEDC to the National
Economic and Development Authority (NEDA). A revised proposal, however, was forwarded by the DOTC to
NEDA on December 13, 1995. On January 5, 1996, the NEDA Investment Coordinating Council (NEDA ICC)
– Technical Board favorably endorsed the project to the ICC – Cabinet Committee which approved the same,
subject to certain conditions, on January 19, 1996. On February 13, 1996, the NEDA passed Board
Resolution No. 2 which approved the NAIA IPT III project.
On June 7, 14, and 21, 1996, DOTC/MIAA caused the publication in two daily newspapers of an invitation for
competitive or comparative proposals on AEDC's unsolicited proposal, in accordance with Sec. 4-A of RA
6957, as amended. The alternative bidders were required to submit three (3) sealed envelopes on or before
5:00 p.m. of September 20, 1996. The first envelope should contain the Prequalification Documents, the
second envelope the Technical Proposal, and the third envelope the Financial Proposal of the proponent.
On June 20, 1996, PBAC Bulletin No. 1 was issued, postponing the availment of the Bid Documents and the
submission of the comparative bid proposals. Interested firms were permitted to obtain the Request for
Proposal Documents beginning June 28, 1996, upon submission of a written application and payment of a
non-refundable fee of P50,000.00 (US$2,000).
The Bid Documents issued by the PBAC provided among others that the proponent must have adequate
capability to sustain the financing requirement for the detailed engineering, design, construction, operation,
and maintenance phases of the project. The proponent would be evaluated based on its ability to provide a
minimum amount of equity to the project, and its capacity to secure external financing for the project.
On July 23, 1996, the PBAC issued PBAC Bulletin No. 2 inviting all bidders to a pre-bid conference on July
29, 1996.
On August 16, 1996, the PBAC issued PBAC Bulletin No. 3 amending the Bid Documents. The following
amendments were made on the Bid Documents:
a. Aside from the fixed Annual Guaranteed Payment, the proponent shall include in its financial
proposal an additional percentage of gross revenue share of the Government, as follows:
i. First 5 years 5.0%

ii. Next 10 years 7.5%
iii. Next 10 years 10.0%
b. The amount of the fixed Annual Guaranteed Payment shall be subject of the price challenge.
Proponent may offer an Annual Guaranteed Payment which need not be of equal amount, but
payment of which shall start upon site possession.
c. The project proponent must have adequate capability to sustain the financing requirement for the
detailed engineering, design, construction, and/or operation and maintenance phases of the project
as the case may be. For purposes of pre-qualification, this capability shall be measured in terms of:
i. Proof of the availability of the project proponent and/or the consortium to provide the
minimum amount of equity for the project; and
ii. a letter testimonial from reputable banks attesting that the project proponent and/or the
members of the consortium are banking with them, that the project proponent and/or the
members are of good financial standing, and have adequate resources.
d. The basis for the prequalification shall be the proponent's compliance with the minimum
technical and financial requirements provided in the Bid Documents and the IRR of the BOT Law.
The minimum amount of equity shall be 30% of the Project Cost.
e. Amendments to the draft Concession Agreement shall be issued from time to time. Said
amendments shall only cover items that would not materially affect the preparation of the
proponent's proposal.
On August 29, 1996, the Second Pre-Bid Conference was held where certain clarifications were made. Upon
the request of prospective bidder People's Air Cargo & Warehousing Co., Inc (Paircargo), the PBAC
warranted that based on Sec. 11.6, Rule 11 of the Implementing Rules and Regulations of the BOT Law,
only the proposed Annual Guaranteed Payment submitted by the challengers would be revealed to AEDC,
and that the challengers' technical and financial proposals would remain confidential. The PBAC also clarified
that the list of revenue sources contained in Annex 4.2a of the Bid Documents was merely indicative and that
other revenue sources may be included by the proponent, subject to approval by DOTC/MIAA. Furthermore,
the PBAC clarified that only those fees and charges denominated as Public Utility Fees would be subject to
regulation, and those charges which would be actually deemed Public Utility Fees could still be revised,
depending on the outcome of PBAC's query on the matter with the Department of Justice.
In September 1996, the PBAC issued Bid Bulletin No. 5, entitled "Answers to the Queries of PAIRCARGO as
Per Letter Dated September 3 and 10, 1996." Paircargo's queries and the PBAC's responses were as
follows:
1. It is difficult for Paircargo and Associates to meet the required minimum equity requirement as
prescribed in Section 8.3.4 of the Bid Documents considering that the capitalization of each
member company is so structured to meet the requirements and needs of their current respective
business undertaking/activities. In order to comply with this equity requirement, Paircargo is
requesting PBAC to just allow each member of (sic) corporation of the Joint Venture to just execute
an agreement that embodies a commitment to infuse the required capital in case the project is
awarded to the Joint Venture instead of increasing each corporation's current authorized capital
stock just for prequalification purposes.
In prequalification, the agency is interested in one's financial capability at the time of

prequalification, not future or potential capability.
A commitment to put up equity once awarded the project is not enough to establish that "present"
financial capability. However, total financial capability of all member companies of the Consortium,
to be established by submitting the respective companies' audited financial statements, shall be
acceptable.
2. At present, Paircargo is negotiating with banks and other institutions for the extension of a
Performance Security to the joint venture in the event that the Concessions Agreement (sic) is
awarded to them. However, Paircargo is being required to submit a copy of the draft concession as
one of the documentary requirements. Therefore, Paircargo is requesting that they'd (sic) be
furnished copy of the approved negotiated agreement between the PBAC and the AEDC at the
soonest possible time.
A copy of the draft Concession Agreement is included in the Bid Documents. Any material changes
would be made known to prospective challengers through bid bulletins. However, a final version
will be issued before the award of contract.
The PBAC also stated that it would require AEDC to sign Supplement C of the Bid Documents (Acceptance
of Criteria and Waiver of Rights to Enjoin Project) and to submit the same with the required Bid Security.
On September 20, 1996, the consortium composed of People's Air Cargo and Warehousing Co., Inc.
(Paircargo), Phil. Air and Grounds Services, Inc. (PAGS) and Security Bank Corp. (Security Bank)
(collectively, Paircargo Consortium) submitted their competitive proposal to the PBAC. On September 23,
1996, the PBAC opened the first envelope containing the prequalification documents of the Paircargo
Consortium. On the following day, September 24, 1996, the PBAC prequalified the Paircargo Consortium.
On September 26, 1996, AEDC informed the PBAC in writing of its reservations as regards the Paircargo
Consortium, which include:
a. The lack of corporate approvals and financial capability of PAIRCARGO;
b. The lack of corporate approvals and financial capability of PAGS;
c. The prohibition imposed by RA 337, as amended (the General Banking Act) on the amount that
Security Bank could legally invest in the project;
d. The inclusion of Siemens as a contractor of the PAIRCARGO Joint Venture, for prequalification
purposes; and
e. The appointment of Lufthansa as the facility operator, in view of the Philippine requirement in the
operation of a public utility.
The PBAC gave its reply on October 2, 1996, informing AEDC that it had considered the issues raised by the
latter, and that based on the documents submitted by Paircargo and the established prequalification criteria,
the PBAC had found that the challenger, Paircargo, had prequalified to undertake the project. The Secretary
of the DOTC approved the finding of the PBAC.
The PBAC then proceeded with the opening of the second envelope of the Paircargo Consortium which
contained its Technical Proposal.
On October 3, 1996, AEDC reiterated its objections, particularly with respect to Paircargo's financial
capability, in view of the restrictions imposed by Section 21-B of the General Banking Act and Sections 1380
and 1381 of the Manual Regulations for Banks and Other Financial Intermediaries. On October 7, 1996,
AEDC again manifested its objections and requested that it be furnished with excerpts of the PBAC meeting
and the accompanying technical evaluation report where each of the issues they raised were addressed.
On October 16, 1996, the PBAC opened the third envelope submitted by AEDC and the Paircargo
Consortium containing their respective financial proposals. Both proponents offered to build the NAIA
Passenger Terminal III for at least $350 million at no cost to the government and to pay the government: 5%
share in gross revenues for the first five years of operation, 7.5% share in gross revenues for the next ten
years of operation, and 10% share in gross revenues for the last ten years of operation, in accordance with
the Bid Documents. However, in addition to the foregoing, AEDC offered to pay the government a total of
P135 million as guaranteed payment for 27 years while Paircargo Consortium offered to pay the government
a total of P17.75 billion for the same period.
Thus, the PBAC formally informed AEDC that it had accepted the price proposal submitted by the Paircargo
Consortium, and gave AEDC 30 working days or until November 28, 1996 within which to match the said bid,
otherwise, the project would be awarded to Paircargo.
As AEDC failed to match the proposal within the 30-day period, then DOTC Secretary Amado Lagdameo, on
December 11, 1996, issued a notice to Paircargo Consortium regarding AEDC's failure to match the
proposal.
On February 27, 1997, Paircargo Consortium incorporated into Philippine International Airport Terminals Co.,
Inc. (PIATCO).
AEDC subsequently protested the alleged undue preference given to PIATCO and reiterated its objections
as regards the prequalification of PIATCO.
On April 11, 1997, the DOTC submitted the concession agreement for the second-pass approval of the
NEDA-ICC.
On April 16, 1997, AEDC filed with the Regional Trial Court of Pasig a Petition for Declaration of Nullity of the
Proceedings, Mandamus and Injunction against the Secretary of the DOTC, the Chairman of the PBAC, the
voting members of the PBAC and Pantaleon D. Alvarez, in his capacity as Chairman of the PBAC Technical
Committee.
On April 17, 1997, the NEDA-ICC conducted an ad referendum to facilitate the approval, on a no-objection
basis, of the BOT agreement between the DOTC and PIATCO. As the ad referendum gathered only four (4)
of the required six (6) signatures, the NEDA merely noted the agreement.
On July 9, 1997, the DOTC issued the notice of award for the project to PIATCO.
On July 12, 1997, the Government, through then DOTC Secretary Arturo T. Enrile, and PIATCO, through its
President, Henry T. Go, signed the "Concession Agreement for the Build-Operate-and-Transfer Arrangement
of the Ninoy Aquino International Airport Passenger Terminal III" (1997 Concession Agreement). The
Government granted PIATCO the franchise to operate and maintain the said terminal during the concession
period and to collect the fees, rentals and other charges in accordance with the rates or schedules stipulated
in the 1997 Concession Agreement. The Agreement provided that the concession period shall be for twenty-
five (25) years commencing from the in-service date, and may be renewed at the option of the Government
for a period not exceeding twenty-five (25) years. At the end of the concession period, PIATCO shall transfer
the development facility to MIAA.
On November 26, 1998, the Government and PIATCO signed an Amended and Restated Concession
Agreement (ARCA). Among the provisions of the 1997 Concession Agreement that were amended by the
ARCA were: Sec. 1.11 pertaining to the definition of "certificate of completion"; Sec. 2.05 pertaining to the
Special Obligations of GRP; Sec. 3.02 (a) dealing with the exclusivity of the franchise given to the
Concessionaire; Sec. 4.04 concerning the assignment by Concessionaire of its interest in the Development
Facility; Sec. 5.08 (c) dealing with the proceeds of Concessionaire's insurance; Sec. 5.10 with respect to the
temporary take-over of operations by GRP; Sec. 5.16 pertaining to the taxes, duties and other imposts that
may be levied on the Concessionaire; Sec. 6.03 as regards the periodic adjustment of public utility fees and
charges; the entire Article VIII concerning the provisions on the termination of the contract; and Sec. 10.02
providing for the venue of the arbitration proceedings in case a dispute or controversy arises between the
parties to the agreement.
Subsequently, the Government and PIATCO signed three Supplements to the ARCA. The First Supplement
was signed on August 27, 1999; the Second Supplement on September 4, 2000; and the Third Supplement
on June 22, 2001 (collectively, Supplements).
The First Supplement to the ARCA amended Sec. 1.36 of the ARCA defining "Revenues" or "Gross
Revenues"; Sec. 2.05 (d) of the ARCA referring to the obligation of MIAA to provide sufficient funds for the
upkeep, maintenance, repair and/or replacement of all airport facilities and equipment which are owned or
operated by MIAA; and further providing additional special obligations on the part of GRP aside from those
already enumerated in Sec. 2.05 of the ARCA. The First Supplement also provided a stipulation as regards
the construction of a surface road to connect NAIA Terminal II and Terminal III in lieu of the proposed access
tunnel crossing Runway 13/31; the swapping of obligations between GRP and PIATCO regarding the
improvement of Sales Road; and the changes in the timetable. It also amended Sec. 6.01 (c) of the ARCA
pertaining to the Disposition of Terminal Fees; Sec. 6.02 of the ARCA by inserting an introductory paragraph;
and Sec. 6.02 (a) (iii) of the ARCA referring to the Payments of Percentage Share in Gross Revenues.
The Second Supplement to the ARCA contained provisions concerning the clearing, removal, demolition or
disposal of subterranean structures uncovered or discovered at the site of the construction of the terminal by
the Concessionaire. It defined the scope of works; it provided for the procedure for the demolition of the said
structures and the consideration for the same which the GRP shall pay PIATCO; it provided for time
extensions, incremental and consequential costs and losses consequent to the existence of such structures;
and it provided for some additional obligations on the part of PIATCO as regards the said structures.
Finally, the Third Supplement provided for the obligations of the Concessionaire as regards the construction
of the surface road connecting Terminals II and III.
Meanwhile, the MIAA which is charged with the maintenance and operation of the NAIA Terminals I and II,
had existing concession contracts with various service providers to offer international airline airport services,
such as in-flight catering, passenger handling, ramp and ground support, aircraft maintenance and
provisions, cargo handling and warehousing, and other services, to several international airlines at the NAIA.
Some of these service providers are the Miascor Group, DNATA-Wings Aviation Systems Corp., and the
MacroAsia Group. Miascor, DNATA and MacroAsia, together with Philippine Airlines (PAL), are the dominant
players in the industry with an aggregate market share of 70%.
On September 17, 2002, the workers of the international airline service providers, claiming that they stand to
lose their employment upon the implementation of the questioned agreements, filed before this Court a
petition for prohibition to enjoin the enforcement of said agreements.2
On October 15, 2002, the service providers, joining the cause of the petitioning workers, filed a motion for
intervention and a petition-in-intervention.
On October 24, 2002, Congressmen Salacnib Baterina, Clavel Martinez and Constantino Jaraula filed a
similar petition with this Court.3
On November 6, 2002, several employees of the MIAA likewise filed a petition assailing the legality of the
various agreements.4
On December 11, 2002. another group of Congressmen, Hon. Jacinto V. Paras, Rafael P. Nantes, Eduardo
C. Zialcita, Willie B. Villarama, Prospero C. Nograles, Prospero A. Pichay, Jr., Harlin Cast Abayon and
Benasing O. Macaranbon, moved to intervene in the case as Respondents-Intervenors. They filed their
Comment-In-Intervention defending the validity of the assailed agreements and praying for the dismissal of
the petitions.
During the pendency of the case before this Court, President Gloria Macapagal Arroyo, on November 29,
2002, in her speech at the 2002 Golden Shell Export Awards at Malacañang Palace, stated that she will not
"honor (PIATCO) contracts which the Executive Branch's legal offices have concluded (as) null and void." 5
Respondent PIATCO filed its Comments to the present petitions on November 7 and 27, 2002. The Office of
the Solicitor General and the Office of the Government Corporate Counsel filed their respective Comments in
behalf of the public respondents.
On December 10, 2002, the Court heard the case on oral argument. After the oral argument, the Court then
resolved in open court to require the parties to file simultaneously their respective Memoranda in
amplification of the issues heard in the oral arguments within 30 days and to explore the possibility of
arbitration or mediation as provided in the challenged contracts.
In their consolidated Memorandum, the Office of the Solicitor General and the Office of the Government
Corporate Counsel prayed that the present petitions be given due course and that judgment be rendered
declaring the 1997 Concession Agreement, the ARCA and the Supplements thereto void for being contrary
to the Constitution, the BOT Law and its Implementing Rules and Regulations.
On March 6, 2003, respondent PIATCO informed the Court that on March 4, 2003 PIATCO commenced
arbitration proceedings before the International Chamber of Commerce, International Court of Arbitration
(ICC) by filing a Request for Arbitration with the Secretariat of the ICC against the Government of the
Republic of the Philippines acting through the DOTC and MIAA.
In the present cases, the Court is again faced with the task of resolving complicated issues made difficult by
their intersecting legal and economic implications. The Court is aware of the far reaching fall out effects of
the ruling which it makes today. For more than a century and whenever the exigencies of the times demand
it, this Court has never shirked from its solemn duty to dispense justice and resolve "actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or not there has
been grave abuse of discretion amounting to lack or excess of jurisdiction."6 To be sure, this Court will not
begin to do otherwise today.
We shall first dispose of the procedural issues raised by respondent PIATCO which they allege will bar the
resolution of the instant controversy.
Petitioners' Legal Standing to File
the present Petitions
a. G.R. Nos. 155001 and 155661
In G.R. No. 155001 individual petitioners are employees of various service providers7 having separate
concession contracts with MIAA and continuing service agreements with various international airlines to
provide in-flight catering, passenger handling, ramp and ground support, aircraft maintenance and
provisions, cargo handling and warehousing and other services. Also included as petitioners are labor unions
MIASCOR Workers Union-National Labor Union and Philippine Airlines Employees Association. These
petitioners filed the instant action for prohibition as taxpayers and as parties whose rights and interests stand
to be violated by the implementation of the PIATCO Contracts.
Petitioners-Intervenors in the same case are all corporations organized and existing under Philippine laws
engaged in the business of providing in-flight catering, passenger handling, ramp and ground support,
aircraft maintenance and provisions, cargo handling and warehousing and other services to several
international airlines at the Ninoy Aquino International Airport. Petitioners-Intervenors allege that as tax-
paying international airline and airport-related service operators, each one of them stands to be irreparably
injured by the implementation of the PIATCO Contracts. Each of the petitioners-intervenors have separate
and subsisting concession agreements with MIAA and with various international airlines which they allege
are being interfered with and violated by respondent PIATCO.
In G.R. No. 155661, petitioners constitute employees of MIAA and Samahang Manggagawa sa Paliparan ng
Pilipinas - a legitimate labor union and accredited as the sole and exclusive bargaining agent of all the
employees in MIAA. Petitioners anchor their petition for prohibition on the nullity of the contracts entered into
by the Government and PIATCO regarding the build-operate-and-transfer of the NAIA IPT III. They filed the
petition as taxpayers and persons who have a legitimate interest to protect in the implementation of the
PIATCO Contracts.
Petitioners in both cases raise the argument that the PIATCO Contracts contain stipulations which directly
contravene numerous provisions of the Constitution, specific provisions of the BOT Law and its Implementing
Rules and Regulations, and public policy. Petitioners contend that the DOTC and the MIAA, by entering into
said contracts, have committed grave abuse of discretion amounting to lack or excess of jurisdiction which
can be remedied only by a writ of prohibition, there being no plain, speedy or adequate remedy in the
ordinary course of law.
In particular, petitioners assail the provisions in the 1997 Concession Agreement and the ARCA which grant
PIATCO the exclusive right to operate a commercial international passenger terminal within the Island of
Luzon, except those international airports already existing at the time of the execution of the agreement. The
contracts further provide that upon the commencement of operations at the NAIA IPT III, the Government
shall cause the closure of Ninoy Aquino International Airport Passenger Terminals I and II as international
passenger terminals. With respect to existing concession agreements between MIAA and international
airport service providers regarding certain services or operations, the 1997 Concession Agreement and the
ARCA uniformly provide that such services or operations will not be carried over to the NAIA IPT III and
PIATCO is under no obligation to permit such carry over except through a separate agreement duly entered
into with PIATCO.8
With respect to the petitioning service providers and their employees, upon the commencement of operations
of the NAIA IPT III, they allege that they will be effectively barred from providing international airline airport
services at the NAIA Terminals I and II as all international airlines and passengers will be diverted to the
NAIA IPT III. The petitioning service providers will thus be compelled to contract with PIATCO alone for such
services, with no assurance that subsisting contracts with MIAA and other international airlines will be
respected. Petitioning service providers stress that despite the very competitive market, the substantial
capital investments required and the high rate of fees, they entered into their respective contracts with the
MIAA with the understanding that the said contracts will be in force for the stipulated period, and thereafter,
renewed so as to allow each of the petitioning service providers to recoup their investments and obtain a
reasonable return thereon.
Petitioning employees of various service providers at the NAIA Terminals I and II and of MIAA on the other
hand allege that with the closure of the NAIA Terminals I and II as international passenger terminals under
the PIATCO Contracts, they stand to lose employment.
The question on legal standing is whether such parties have "alleged such a personal stake in the outcome
of the controversy as to assure that concrete adverseness which sharpens the presentation of issues upon
which the court so largely depends for illumination of difficult constitutional questions."9 Accordingly, it has
been held that the interest of a person assailing the constitutionality of a statute must be direct and personal.
He must be able to show, not only that the law or any government act is invalid, but also that he sustained or
is in imminent danger of sustaining some direct injury as a result of its enforcement, and not merely that he
suffers thereby in some indefinite way. It must appear that the person complaining has been or is about to be
denied some right or privilege to which he is lawfully entitled or that he is about to be subjected to some
burdens or penalties by reason of the statute or act complained of.10
We hold that petitioners have the requisite standing. In the above-mentioned cases, petitioners have a direct
and substantial interest to protect by reason of the implementation of the PIATCO Contracts. They stand to
lose their source of livelihood, a property right which is zealously protected by the Constitution. Moreover,
subsisting concession agreements between MIAA and petitioners-intervenors and service contracts between
international airlines and petitioners-intervenors stand to be nullified or terminated by the operation of the
NAIA IPT III under the PIATCO Contracts. The financial prejudice brought about by the PIATCO Contracts
on petitioners and petitioners-intervenors in these cases are legitimate interests sufficient to confer on them
the requisite standing to file the instant petitions.
b. G.R. No. 155547
In G.R. No. 155547, petitioners filed the petition for prohibition as members of the House of Representatives,
citizens and taxpayers. They allege that as members of the House of Representatives, they are especially
interested in the PIATCO Contracts, because the contracts compel the Government and/or the House of
Representatives to appropriate funds necessary to comply with the provisions therein.11 They cite provisions
of the PIATCO Contracts which require disbursement of unappropriated amounts in compliance with the
contractual obligations of the Government. They allege that the Government obligations in the PIATCO
Contracts which compel government expenditure without appropriation is a curtailment of their prerogatives
as legislators, contrary to the mandate of the Constitution that "[n]o money shall be paid out of the treasury
except in pursuance of an appropriation made by law."12
Standing is a peculiar concept in constitutional law because in some cases, suits are not brought by parties
who have been personally injured by the operation of a law or any other government act but by concerned
citizens, taxpayers or voters who actually sue in the public interest. Although we are not unmindful of the
cases of Imus Electric Co. v. Municipality of Imus13 and Gonzales v. Raquiza14 wherein this Court held
that appropriation must be made only on amounts immediately demandable, public interest demands that
we take a more liberal view in determining whether the petitioners suing as legislators, taxpayers and
citizens have locus standi to file the instant petition. In Kilosbayan, Inc. v. Guingona,15 this Court held
"[i]n line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and
even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions
before this Court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of
various government agencies or instrumentalities."16 Further, "insofar as taxpayers' suits are concerned . . .
(this Court) is not devoid of discretion as to whether or not it should be entertained."17 As such ". . . even if,
strictly speaking, they [the petitioners] are not covered by the definition, it is still within the wide discretion of
the Court to waive the requirement and so remove the impediment to its addressing and resolving the
serious constitutional questions raised."18 In view of the serious legal questions involved and their impact on
public interest, we resolve to grant standing to the petitioners.
Other Procedural Matters
Respondent PIATCO further alleges that this Court is without jurisdiction to review the instant cases as
factual issues are involved which this Court is ill-equipped to resolve. Moreover, PIATCO alleges that
submission of this controversy to this Court at the first instance is a violation of the rule on hierarchy of
courts. They contend that trial courts have concurrent jurisdiction with this Court with respect to a special civil
action for prohibition and hence, following the rule on hierarchy of courts, resort must first be had before the
trial courts.
After a thorough study and careful evaluation of the issues involved, this Court is of the view that the crux of
the instant controversy involves significant legal questions. The facts necessary to resolve these legal
questions are well established and, hence, need not be determined by a trial court.
The rule on hierarchy of courts will not also prevent this Court from assuming jurisdiction over the cases at
bar. The said rule may be relaxed when the redress desired cannot be obtained in the appropriate courts or
where exceptional and compelling circumstances justify availment of a remedy within and calling for the
exercise of this Court's primary jurisdiction.19
It is easy to discern that exceptional circumstances exist in the cases at bar that call for the relaxation of
the rule. Both petitioners and respondents agree that these cases are of transcendental importance as
they involve the construction and operation of the country's premier international airport. Moreover, the
crucial issues submitted for resolution are of first impression and they entail the proper legal interpretation of
key provisions of the Constitution, the BOT Law and its Implementing Rules and Regulations. Thus,
considering the nature of the controversy before the Court, procedural bars may be lowered to give way for
the speedy disposition of the instant cases.
Legal Effect of the Commencement
of Arbitration Proceedings by
PIATCO
There is one more procedural obstacle which must be overcome. The Court is aware that arbitration
proceedings pursuant to Section 10.02 of the ARCA have been filed at the instance of respondent PIATCO.
Again, we hold that the arbitration step taken by PIATCO will not oust this Court of its jurisdiction over the
cases at bar.
In Del Monte Corporation-USA v. Court of Appeals,20 even after finding that the arbitration clause in the
Distributorship Agreement in question is valid and the dispute between the parties is arbitrable, this Court
affirmed the trial court's decision denying petitioner's Motion to Suspend Proceedings pursuant to the
arbitration clause under the contract. In so ruling, this Court held that as contracts produce legal effect
between the parties, their assigns and heirs, only the parties to the Distributorship Agreement are bound by
its terms, including the arbitration clause stipulated therein. This Court ruled that arbitration proceedings
could be called for but only with respect to the parties to the contract in question. Considering that there are
parties to the case who are neither parties to the Distributorship Agreement nor heirs or assigns of the
parties thereto, this Court, citing its previous ruling in Salas, Jr. v. Laperal Realty Corporation, 21 held that to
tolerate the splitting of proceedings by allowing arbitration as to some of the parties on the one hand and trial
for the others on the other hand would, in effect, result in multiplicity of suits, duplicitous procedure and
unnecessary delay.22 Thus, we ruled that the interest of justice would best be served if the trial court hears
and adjudicates the case in a single and complete proceeding.
It is established that petitioners in the present cases who have presented legitimate interests in the
resolution of the controversy are not parties to the PIATCO Contracts. Accordingly, they cannot be bound
by the arbitration clause provided for in the ARCA and hence, cannot be compelled to submit to arbitration
proceedings. A speedy and decisive resolution of all the critical issues in the present controversy,
including those raised by petitioners, cannot be made before an arbitral tribunal. The object of
arbitration is precisely to allow an expeditious determination of a dispute. This objective would not be met if
this Court were to allow the parties to settle the cases by arbitration as there are certain issues involving non-
parties to the PIATCO Contracts which the arbitral tribunal will not be equipped to resolve.
Now, to the merits of the instant controversy.
Is PIATCO a qualified bidder?
Public respondents argue that the Paircargo Consortium, PIATCO's predecessor, was not a duly pre-
qualified bidder on the unsolicited proposal submitted by AEDC as the Paircargo Consortium failed to meet
the financial capability required under the BOT Law and the Bid Documents. They allege that in computing
the ability of the Paircargo Consortium to meet the minimum equity requirements for the project, the entire
net worth of Security Bank, a member of the consortium, should not be considered.
PIATCO relies, on the other hand, on the strength of the Memorandum dated October 14, 1996 issued by the
DOTC Undersecretary Primitivo C. Cal stating that the Paircargo Consortium is found to have a combined
net worth of P3,900,000,000.00, sufficient to meet the equity requirements of the project. The said
Memorandum was in response to a letter from Mr. Antonio Henson of AEDC to President Fidel V. Ramos
questioning the financial capability of the Paircargo Consortium on the ground that it does not have the
financial resources to put up the required minimum equity of P2,700,000,000.00. This contention is based on
the restriction under R.A. No. 337, as amended or the General Banking Act that a commercial bank cannot
invest in any single enterprise in an amount more than 15% of its net worth. In the said Memorandum,
Undersecretary Cal opined:
The Bid Documents, as clarified through Bid Bulletin Nos. 3 and 5, require that financial capability
will be evaluated based on total financial capability of all the member companies of the [Paircargo]
Consortium. In this connection, the Challenger was found to have a combined net worth of
P3,926,421,242.00 that could support a project costing approximately P13 Billion.
It is not a requirement that the net worth must be "unrestricted." To impose that as a requirement
now will be nothing less than unfair.
The financial statement or the net worth is not the sole basis in establishing financial capability. As
stated in Bid Bulletin No. 3, financial capability may also be established by testimonial letters
issued by reputable banks. The Challenger has complied with this requirement.
To recap, net worth reflected in the Financial Statement should not be taken as the amount of the
money to be used to answer the required thirty percent (30%) equity of the challenger but rather to
be used in establishing if there is enough basis to believe that the challenger can comply with the
required 30% equity. In fact, proof of sufficient equity is required as one of the conditions for award
of contract (Section 12.1 IRR of the BOT Law) but not for pre-qualification (Section 5.4 of the same
document).23
Under the BOT Law, in case of a build-operate-and-transfer arrangement, the contract shall be
awarded to the bidder "who, having satisfied the minimum financial, technical, organizational
and legal standards" required by the law, has submitted the lowest bid and most favorable terms
of the project.24 Further, the 1994 Implementing Rules and Regulations of the BOT Law provide:
Section 5.4 Pre-qualification Requirements.
xxx xxx xxx
c. Financial Capability: The project proponent must have adequate capability to sustain the
financing requirements for the detailed engineering design, construction and/or operation and
maintenance phases of the project, as the case may be. For purposes of pre-qualification, this
capability shall be measured in terms of (i) proof of the ability of the project proponent and/or
the consortium to provide a minimum amount of equity to the project, and (ii) a letter
testimonial from reputable banks attesting that the project proponent and/or members of
the consortium are banking with them, that they are in good financial standing, and that
they have adequate resources. The government agency/LGU concerned shall determine on a
project-to-project basis and before pre-qualification, the minimum amount of equity needed.
(emphasis supplied)
Pursuant to this provision, the PBAC issued PBAC Bulletin No. 3 dated August 16, 1996 amending the
financial capability requirements for pre-qualification of the project proponent as follows:
6. Basis of Pre-qualification
The basis for the pre-qualification shall be on the compliance of the proponent to the minimum
technical and financial requirements provided in the Bid Documents and in the IRR of the BOT
Law, R.A. No. 6957, as amended by R.A. 7718.
The minimum amount of equity to which the proponent's financial capability will be based shall
be thirty percent (30%) of the project cost instead of the twenty percent (20%) specified in
Section 3.6.4 of the Bid Documents. This is to correlate with the required debt-to-equity ratio of
70:30 in Section 2.01a of the draft concession agreement. The debt portion of the project financing
should not exceed 70% of the actual project cost.
Accordingly, based on the above provisions of law, the Paircargo Consortium or any challenger to the
unsolicited proposal of AEDC has to show that it possesses the requisite financial capability to undertake
the project in the minimum amount of 30% of the project cost through (i) proof of the ability to provide a
minimum amount of equity to the project, and (ii) a letter testimonial from reputable banks attesting that the
project proponent or members of the consortium are banking with them, that they are in good financial
standing, and that they have adequate resources.
As the minimum project cost was estimated to be US$350,000,000.00 or roughly P9,183,650,000.00, 25 the
Paircargo Consortium had to show to the satisfaction of the PBAC that it had the ability to provide the
minimum equity for the project in the amount of at least P2,755,095,000.00.
Paircargo's Audited Financial Statements as of 1993 and 1994 indicated that it had a net worth of
P2,783,592.00 and P3,123,515.00 respectively.26 PAGS' Audited Financial Statements as of 1995 indicate
that it has approximately P26,735,700.00 to invest as its equity for the project. 27 Security Bank's Audited
Financial Statements as of 1995 show that it has a net worth equivalent to its capital funds in the amount of
P3,523,504,377.00.28
We agree with public respondents that with respect to Security Bank, the entire amount of its net worth
could not be invested in a single undertaking or enterprise, whether allied or non-allied in accordance with
the provisions of R.A. No. 337, as amended or the General Banking Act:
Sec. 21-B. The provisions in this or in any other Act to the contrary notwithstanding, the Monetary
Board, whenever it shall deem appropriate and necessary to further national development
objectives or support national priority projects, may authorize a commercial bank, a bank
authorized to provide commercial banking services, as well as a government-owned and
controlled bank, to operate under an expanded commercial banking authority and by virtue
thereof exercise, in addition to powers authorized for commercial banks, the powers of an
Investment House as provided in Presidential Decree No. 129, invest in the equity of a non-
allied undertaking, or own a majority or all of the equity in a financial intermediary other than a
commercial bank or a bank authorized to provide commercial banking services: Provided, That (a)
the total investment in equities shall not exceed fifty percent (50%) of the net worth of the bank; (b)
the equity investment in any one enterprise whether allied or non-allied shall not exceed
fifteen percent (15%) of the net worth of the bank; (c) the equity investment of the bank, or of its
wholly or majority-owned subsidiary, in a single non-allied undertaking shall not exceed thirty-five
percent (35%) of the total equity in the enterprise nor shall it exceed thirty-five percent (35%) of the
voting stock in that enterprise; and (d) the equity investment in other banks shall be deducted from
the investing bank's net worth for purposes of computing the prescribed ratio of net worth to risk
assets.
xxx xxx xxx
Further, the 1993 Manual of Regulations for Banks provides:
SECTION X383. Other Limitations and Restrictions. — The following limitations and restrictions
shall also apply regarding equity investments of banks.
a. In any single enterprise. — The equity investments of banks in any single enterprise shall not
exceed at any time fifteen percent (15%) of the net worth of the investing bank as defined in Sec.
X106 and Subsec. X121.5.
Thus, the maximum amount that Security Bank could validly invest in the Paircargo Consortium is only
P528,525,656.55, representing 15% of its entire net worth. The total net worth therefore of the Paircargo
Consortium, after considering the maximum amounts that may be validly invested by each of its members
is P558,384,871.55 or only 6.08% of the project cost,29 an amount substantially less than the prescribed
minimum equity investment required for the project in the amount of P2,755,095,000.00 or 30% of the project
cost.
The purpose of pre-qualification in any public bidding is to determine, at the earliest opportunity, the ability of
the bidder to undertake the project. Thus, with respect to the bidder's financial capacity at the pre-
qualification stage, the law requires the government agency to examine and determine the ability of the
bidder to fund the entire cost of the project by considering the maximum amounts that each bidder may
invest in the project at the time of pre-qualification.
The PBAC has determined that any prospective bidder for the construction, operation and maintenance of
the NAIA IPT III project should prove that it has the ability to provide equity in the minimum amount of 30% of
the project cost, in accordance with the 70:30 debt-to-equity ratio prescribed in the Bid Documents. Thus, in
the case of Paircargo Consortium, the PBAC should determine the maximum amounts that each member of
the consortium may commit for the construction, operation and maintenance of the NAIA IPT III project at the
time of pre-qualification. With respect to Security Bank, the maximum amount which may be invested by
it would only be 15% of its net worth in view of the restrictions imposed by the General Banking Act.
Disregarding the investment ceilings provided by applicable law would not result in a proper evaluation of
whether or not a bidder is pre-qualified to undertake the project as for all intents and purposes, such ceiling
or legal restriction determines the true maximum amount which a bidder may invest in the project.
Further, the determination of whether or not a bidder is pre-qualified to undertake the project requires an
evaluation of the financial capacity of the said bidder at the time the bid is submitted based on the required
documents presented by the bidder. The PBAC should not be allowed to speculate on the future financial
ability of the bidder to undertake the project on the basis of documents submitted. This would open doors to
abuse and defeat the very purpose of a public bidding. This is especially true in the case at bar which
involves the investment of billions of pesos by the project proponent. The relevant government authority is
duty-bound to ensure that the awardee of the contract possesses the minimum required financial capability to
complete the project. To allow the PBAC to estimate the bidder's future financial capability would not secure
the viability and integrity of the project. A restrictive and conservative application of the rules and procedures
of public bidding is necessary not only to protect the impartiality and regularity of the proceedings but also to
ensure the financial and technical reliability of the project. It has been held that:
The basic rule in public bidding is that bids should be evaluated based on the required documents
submitted before and not after the opening of bids. Otherwise, the foundation of a fair and
competitive public bidding would be defeated. Strict observance of the rules, regulations, and
guidelines of the bidding process is the only safeguard to a fair, honest and competitive
public bidding.30
Thus, if the maximum amount of equity that a bidder may invest in the project at the time the bids are
submittedfalls short of the minimum amounts required to be put up by the bidder, said bidder should be
properly disqualified. Considering that at the pre-qualification stage, the maximum amounts which the
Paircargo Consortium may invest in the project fell short of the minimum amounts prescribed by the PBAC,
we hold that Paircargo Consortium was not a qualified bidder. Thus the award of the contract by the PBAC to
the Paircargo Consortium, a disqualified bidder, is null and void.
While it would be proper at this juncture to end the resolution of the instant controversy, as the legal effects
of the disqualification of respondent PIATCO's predecessor would come into play and necessarily result in
the nullity of all the subsequent contracts entered by it in pursuance of the project, the Court feels that it is
necessary to discuss in full the pressing issues of the present controversy for a complete resolution thereof.
II
Is the 1997 Concession Agreement valid?
Petitioners and public respondents contend that the 1997 Concession Agreement is invalid as it contains
provisions that substantially depart from the draft Concession Agreement included in the Bid Documents.
They maintain that a substantial departure from the draft Concession Agreement is a violation of public policy
and renders the 1997 Concession Agreement null and void.
PIATCO maintains, however, that the Concession Agreement attached to the Bid Documents is intended to
be a draft, i.e., subject to change, alteration or modification, and that this intention was clear to all
participants, including AEDC, and DOTC/MIAA. It argued further that said intention is expressed in Part C (6)
of Bid Bulletin No. 3 issued by the PBAC which states:
6. Amendments to the Draft Concessions Agreement
Amendments to the Draft Concessions Agreement shall be issued from time to time. Said
amendments shall only cover items that would not materially affect the preparation of the
proponent's proposal.
By its very nature, public bidding aims to protect the public interest by giving the public the best possible
advantages through open competition. Thus:
Competition must be legitimate, fair and honest. In the field of government contract law,
competition requires, not only `bidding upon a common standard, a common basis, upon the same
thing, the same subject matter, the same undertaking,' but also that it be legitimate, fair and
honest; and not designed to injure or defraud the government.31
An essential element of a publicly bidded contract is that all bidders must be on equal footing. Not simply in
terms of application of the procedural rules and regulations imposed by the relevant government agency, but
more importantly, on the contract bidded upon. Each bidder must be able to bid on the same thing. The
rationale is obvious. If the winning bidder is allowed to later include or modify certain provisions in the
contract awarded such that the contract is altered in any material respect, then the essence of fair
competition in the public bidding is destroyed. A public bidding would indeed be a farce if after the contract is
awarded, the winning bidder may modify the contract and include provisions which are favorable to it that
were not previously made available to the other bidders. Thus:
It is inherent in public biddings that there shall be a fair competition among the bidders. The
specifications in such biddings provide the common ground or basis for the bidders. The
specifications should, accordingly, operate equally or indiscriminately upon all bidders.32
The same rule was restated by Chief Justice Stuart of the Supreme Court of Minnesota:
The law is well settled that where, as in this case, municipal authorities can only let a contract for
public work to the lowest responsible bidder, the proposals and specifications therefore must be so
framed as to permit free and full competition. Nor can they enter into a contract with the best
bidder containing substantial provisions beneficial to him, not included or contemplated in
the terms and specifications upon which the bids were invited. 33
In fact, in the PBAC Bid Bulletin No. 3 cited by PIATCO to support its argument that the draft concession
agreement is subject to amendment, the pertinent portion of which was quoted above, the PBAC also
clarified that "[s]aid amendments shall only cover items that would not materially affect the
preparation of the proponent's proposal."
While we concede that a winning bidder is not precluded from modifying or amending certain provisions of
the contract bidded upon, such changes must not constitute substantial or material amendments that
would alter the basic parameters of the contract and would constitute a denial to the other bidders of
the opportunity to bid on the same terms. Hence, the determination of whether or not a modification or
amendment of a contract bidded out constitutes a substantial amendment rests on whether the contract,
when taken as a whole, would contain substantially different terms and conditions that would have the effect
of altering the technical and/or financial proposals previously submitted by other bidders. The alterations and
modifications in the contract executed between the government and the winning bidder must be such as to
render such executed contract to be an entirely different contract from the one that was bidded upon.
In the case of Caltex (Philippines), Inc. v. Delgado Brothers, Inc.,34 this Court quoted with approval the
ruling of the trial court that an amendment to a contract awarded through public bidding, when such
subsequent amendment was made without a new public bidding, is null and void:
The Court agrees with the contention of counsel for the plaintiffs that the due execution of a
contract after public bidding is a limitation upon the right of the contracting parties to alter or amend
it without another public bidding, for otherwise what would a public bidding be good for if after
the execution of a contract after public bidding, the contracting parties may alter or amend
the contract, or even cancel it, at their will?Public biddings are held for the protection of the
public, and to give the public the best possible advantages by means of open competition between
the bidders. He who bids or offers the best terms is awarded the contract subject of the bid, and it
is obvious that such protection and best possible advantages to the public will disappear if the
parties to a contract executed after public bidding may alter or amend it without another previous
public bidding.35
Hence, the question that comes to fore is this: is the 1997 Concession Agreement the same agreement that
was offered for public bidding, i.e., the draft Concession Agreement attached to the Bid Documents? A close
comparison of the draft Concession Agreement attached to the Bid Documents and the 1997 Concession
Agreement reveals that the documents differ in at least two material respects:
a. Modification on the Public
Utility Revenues and Non-Public
Utility Revenues that may be
collected by PIATCO
The fees that may be imposed and collected by PIATCO under the draft Concession Agreement and the
1997 Concession Agreement may be classified into three distinct categories: (1) fees which are subject to
periodic adjustment of once every two years in accordance with a prescribed parametric formula and
adjustments are made effective only upon written approval by MIAA; (2) fees other than those included in the
first category which maybe adjusted by PIATCO whenever it deems necessary without need for consent of
DOTC/MIAA; and (3) new fees and charges that may be imposed by PIATCO which have not been
previously imposed or collected at the Ninoy Aquino International Airport Passenger Terminal I, pursuant to
Administrative Order No. 1, Series of 1993, as amended. The glaring distinctions between the draft
Concession Agreement and the 1997 Concession Agreement lie in the types of fees included in each
category and the extent of the supervision and regulation which MIAA is allowed to exercise in relation
thereto.
For fees under the first category, i.e., those which are subject to periodic adjustment in accordance with a
prescribed parametric formula and effective only upon written approval by MIAA, the draft Concession
Agreementincludes the following:36
(1) aircraft parking fees;
(2) aircraft tacking fees;
(3) groundhandling fees;
(4) rentals and airline offices;
(5) check-in counter rentals; and
(6) porterage fees.
Under the 1997 Concession Agreement, fees which are subject to adjustment and effective upon MIAA
approval are classified as "Public Utility Revenues" and include:37
(1) aircraft parking fees;
(2) aircraft tacking fees;
(3) check-in counter fees; and
(4) Terminal Fees.
The implication of the reduced number of fees that are subject to MIAA approval is best appreciated in
relation to fees included in the second category identified above. Under the 1997 Concession
Agreement, fees which PIATCO may adjust whenever it deems necessary without need for consent of
DOTC/MIAA are "Non-Public Utility Revenues" and is defined as "all other income not classified as Public
Utility Revenues derived from operations of the Terminal and the Terminal Complex." 38 Thus, under the 1997
Concession Agreement, ground handling fees, rentals from airline offices and porterage fees are no longer
subject to MIAA regulation.
Further, under Section 6.03 of the draft Concession Agreement, MIAA reserves the right to regulate (1)
lobby and vehicular parking fees and (2) other new fees and charges that may be imposed by PIATCO. Such
regulation may be made by periodic adjustment and is effective only upon written approval of MIAA. The full
text of said provision is quoted below:
Section 6.03. Periodic Adjustment in Fees and Charges. Adjustments in the aircraft parking fees,
aircraft tacking fees, groundhandling fees, rentals and airline offices, check-in-counter rentals and
porterage fees shall be allowed only once every two years and in accordance with the Parametric
Formula attached hereto as Annex F. Provided that adjustments shall be made effective only after
the written express approval of the MIAA. Provided, further, that such approval of the MIAA, shall
be contingent only on the conformity of the adjustments with the above said parametric formula.
The first adjustment shall be made prior to the In-Service Date of the Terminal.
The MIAA reserves the right to regulate under the foregoing terms and conditions the lobby
and vehicular parking fees and other new fees and charges as contemplated in paragraph 2
of Section 6.01 if in its judgment the users of the airport shall be deprived of a free option
for the services they cover.39
On the other hand, the equivalent provision under the 1997 Concession Agreement reads:
Section 6.03 Periodic Adjustment in Fees and Charges.
xxx xxx xxx
(c) Concessionaire shall at all times be judicious in fixing fees and charges constituting Non-Public
Utility Revenues in order to ensure that End Users are not unreasonably deprived of
services. While the vehicular parking fee, porterage fee and greeter/well wisher fee
constitute Non-Public Utility Revenues of Concessionaire, GRP may intervene and require
Concessionaire to explain and justify the fee it may set from time to time, if in the reasonable
opinion of GRP the said fees have become exorbitant resulting in the unreasonable deprivation of
End Users of such services.40
Thus, under the 1997 Concession Agreement, with respect to (1) vehicular parking fee, (2) porterage fee
and (3) greeter/well wisher fee, all that MIAA can do is to require PIATCO to explain and justify the fees set
by PIATCO. In the draft Concession Agreement, vehicular parking fee is subject to MIAA regulation and
approval under the second paragraph of Section 6.03 thereof while porterage fee is covered by the first
paragraph of the same provision. There is an obvious relaxation of the extent of control and regulation by
MIAA with respect to the particular fees that may be charged by PIATCO.
Moreover, with respect to the third category of fees that may be imposed and collected by PIATCO, i.e.,
new fees and charges that may be imposed by PIATCO which have not been previously imposed or
collected at the Ninoy Aquino International Airport Passenger Terminal I, under Section 6.03 of the draft
Concession Agreement MIAA has reserved the right to regulate the same under the same conditions that
MIAA may regulate fees under the first category, i.e., periodic adjustment of once every two years in
accordance with a prescribed parametric formula and effective only upon written approval by MIAA.
However, under the 1997 Concession Agreement, adjustment of fees under the third category is not
subject to MIAA regulation.
With respect to terminal fees that may be charged by PIATCO,41 as shown earlier, this was included within
the category of "Public Utility Revenues" under the 1997 Concession Agreement. This classification is
significant because under the 1997 Concession Agreement, "Public Utility Revenues" are subject to an
"Interim Adjustment" of fees upon the occurrence of certain extraordinary events specified in the
agreement.42 However, under the draft Concession Agreement, terminal fees are not included in the types
of fees that may be subject to "Interim Adjustment."43
Finally, under the 1997 Concession Agreement, "Public Utility Revenues," except terminal fees, are
denominated in US Dollars44 while payments to the Government are in Philippine Pesos. In the draft
Concession Agreement,no such stipulation was included. By stipulating that "Public Utility Revenues" will
be paid to PIATCO in US Dollars while payments by PIATCO to the Government are in Philippine currency
under the 1997 Concession Agreement, PIATCO is able to enjoy the benefits of depreciations of the
Philippine Peso, while being effectively insulated from the detrimental effects of exchange rate fluctuations.
When taken as a whole, the changes under the 1997 Concession Agreement with respect to reduction in the
types of fees that are subject to MIAA regulation and the relaxation of such regulation with respect to other
fees are significant amendments that substantially distinguish the draft Concession Agreement from the 1997
Concession Agreement. The 1997 Concession Agreement, in this respect, clearly gives PIATCO more
favorable terms than what was available to other bidders at the time the contract was bidded out. It is
not very difficult to see that the changes in the 1997 Concession Agreement translate to direct and concrete
financial advantages for PIATCO which were not available at the time the contract was offered for bidding.
It cannot be denied that under the 1997 Concession Agreement only "Public Utility Revenues" are subject to
MIAA regulation. Adjustments of all other fees imposed and collected by PIATCO are entirely within its
control. Moreover, with respect to terminal fees, under the 1997 Concession Agreement, the same is further
subject to "Interim Adjustments" not previously stipulated in the draft Concession Agreement. Finally, the
change in the currency stipulated for "Public Utility Revenues" under the 1997 Concession Agreement,
except terminal fees, gives PIATCO an added benefit which was not available at the time of bidding.
b. Assumption by the
Government of the liabilities of
PIATCO in the event of the latter's
default thereof
Under the draft Concession Agreement, default by PIATCO of any of its obligations to creditors who have
provided, loaned or advanced funds for the NAIA IPT III project does not result in the assumption by the
Government of these liabilities. In fact, nowhere in the said contract does default of PIATCO's loans figure in
the agreement. Such default does not directly result in any concomitant right or obligation in favor of the
Government.
However, the 1997 Concession Agreement provides:
Section 4.04 Assignment.
xxx xxx xxx
(b) In the event Concessionaire should default in the payment of an Attendant Liability, and the
default has resulted in the acceleration of the payment due date of the Attendant Liability prior to its
stated date of maturity, the Unpaid Creditors and Concessionaire shall immediately inform GRP in
writing of such default. GRP shall, within one hundred eighty (180) Days from receipt of the joint
written notice of the Unpaid Creditors and Concessionaire, either (i) take over the Development
Facility and assume the Attendant Liabilities, or (ii) allow the Unpaid Creditors, if qualified, to be
substituted as concessionaire and operator of the Development Facility in accordance with the
terms and conditions hereof, or designate a qualified operator acceptable to GRP to operate the
Development Facility, likewise under the terms and conditions of this Agreement; Provided that if at
the end of the 180-day period GRP shall not have served the Unpaid Creditors and Concessionaire
written notice of its choice, GRP shall be deemed to have elected to take over the Development
Facility with the concomitant assumption of Attendant Liabilities.
(c) If GRP should, by written notice, allow the Unpaid Creditors to be substituted as
concessionaire, the latter shall form and organize a concession company qualified to take over the
operation of the Development Facility. If the concession company should elect to designate an
operator for the Development Facility, the concession company shall in good faith identify and
designate a qualified operator acceptable to GRP within one hundred eighty (180) days from
receipt of GRP's written notice. If the concession company, acting in good faith and with due
diligence, is unable to designate a qualified operator within the aforesaid period, then GRP shall at
the end of the 180-day period take over the Development Facility and assume Attendant Liabilities.
The term "Attendant Liabilities" under the 1997 Concession Agreement is defined as:
Attendant Liabilities refer to all amounts recorded and from time to time outstanding in the books of
the Concessionaire as owing to Unpaid Creditors who have provided, loaned or advanced
funds actually used for the Project, including all interests, penalties, associated fees, charges,
surcharges, indemnities, reimbursements and other related expenses, and further including
amounts owed by Concessionaire to its suppliers, contractors and sub-contractors.
Under the above quoted portions of Section 4.04 in relation to the definition of "Attendant Liabilities," default
by PIATCO of its loans used to finance the NAIA IPT III project triggers the occurrence of certain
events that leads to the assumption by the Government of the liability for the loans. Only in one
instance may the Government escape the assumption of PIATCO's liabilities, i.e., when the Government so
elects and allows a qualified operator to take over as Concessionaire. However, this circumstance is
dependent on the existence and availability of a qualified operator who is willing to take over the
rights and obligations of PIATCO under the contract, a circumstance that is not entirely within the
control of the Government.
Without going into the validity of this provision at this juncture, suffice it to state that Section 4.04 of the 1997
Concession Agreement may be considered a form of security for the loans PIATCO has obtained to finance
the project, an option that was not made available in the draft Concession Agreement. Section 4.04 is an
important amendment to the 1997 Concession Agreement because it grants PIATCO a financial advantage
or benefit which was not previously made available during the bidding process. This financial
advantage is a significant modification that translates to better terms and conditions for PIATCO.
PIATCO, however, argues that the parties to the bidding procedure acknowledge that the draft Concession
Agreement is subject to amendment because the Bid Documents permit financing or borrowing. They claim
that it was the lenders who proposed the amendments to the draft Concession Agreement which resulted in
the 1997 Concession Agreement.
We agree that it is not inconsistent with the rationale and purpose of the BOT Law to allow the project
proponent or the winning bidder to obtain financing for the project, especially in this case which involves the
construction, operation and maintenance of the NAIA IPT III. Expectedly, compliance by the project
proponent of its undertakings therein would involve a substantial amount of investment. It is therefore
inevitable for the awardee of the contract to seek alternate sources of funds to support the project. Be that as
it may, this Court maintains that amendments to the contract bidded upon should always conform to the
general policy on public bidding if such procedure is to be faithful to its real nature and purpose. By its very
nature and characteristic, competitive public bidding aims to protect the public interest by giving the public
the best possible advantages through open competition.45 It has been held that the three principles in public
bidding are (1) the offer to the public; (2) opportunity for competition; and (3) a basis for the exact
comparison of bids. A regulation of the matter which excludes any of these factors destroys the distinctive
character of the system and thwarts the purpose of its adoption.46 These are the basic parameters which
every awardee of a contract bidded out must conform to, requirements of financing and borrowing
notwithstanding. Thus, upon a concrete showing that, as in this case, the contract signed by the government
and the contract-awardee is an entirely different contract from the contract bidded, courts should not hesitate
to strike down said contract in its entirety for violation of public policy on public bidding. A strict adherence on
the principles, rules and regulations on public bidding must be sustained if only to preserve the integrity and
the faith of the general public on the procedure.
Public bidding is a standard practice for procuring government contracts for public service and for furnishing
supplies and other materials. It aims to secure for the government the lowest possible price under the most
favorable terms and conditions, to curtail favoritism in the award of government contracts and avoid
suspicion of anomalies and it places all bidders in equal footing.47 Any government action which permits
any substantial variance between the conditions under which the bids are invited and the contract
executed after the award thereof is a grave abuse of discretion amounting to lack or excess of
jurisdiction which warrants proper judicial action.
In view of the above discussion, the fact that the foregoing substantial amendments were made on the 1997
Concession Agreement renders the same null and void for being contrary to public policy. These
amendments convert the 1997 Concession Agreement to an entirely different agreement from the contract
bidded out or the draft Concession Agreement. It is not difficult to see that the amendments on (1) the types
of fees or charges that are subject to MIAA regulation or control and the extent thereof and (2) the
assumption by the Government, under certain conditions, of the liabilities of PIATCO directly translates
concrete financial advantages to PIATCO that were previously not available during the bidding
process. These amendments cannot be taken as merely supplements to or implementing provisions of
those already existing in the draft Concession Agreement. The amendments discussed above present new
terms and conditions which provide financial benefit to PIATCO which may have altered the technical and
financial parameters of other bidders had they known that such terms were available.
III
Direct Government Guarantee
Article IV, Section 4.04(b) and (c), in relation to Article 1.06, of the 1997 Concession Agreement provides:
Section 4.04 Assignment
xxx xxx xxx
(b) In the event Concessionaire should default in the payment of an Attendant Liability, and the
default resulted in the acceleration of the payment due date of the Attendant Liability prior to its
stated date of maturity, the Unpaid Creditors and Concessionaire shall immediately inform GRP in
writing of such default. GRP shall within one hundred eighty (180) days from receipt of the joint
written notice of the Unpaid Creditors and Concessionaire, either (i) take over the Development
Facility and assume the Attendant Liabilities, or (ii) allow the Unpaid Creditors, if qualified to be
substituted as concessionaire and operator of the Development facility in accordance with the
terms and conditions hereof, or designate a qualified operator acceptable to GRP to operate the
Development Facility, likewise under the terms and conditions of this Agreement; Provided, that if
at the end of the 180-day period GRP shall not have served the Unpaid Creditors and
Concessionaire written notice of its choice, GRP shall be deemed to have elected to take over
the Development Facility with the concomitant assumption of Attendant Liabilities.
(c) If GRP, by written notice, allow the Unpaid Creditors to be substituted as concessionaire, the
latter shall form and organize a concession company qualified to takeover the operation of the
Development Facility. If the concession company should elect to designate an operator for the
Development Facility, the concession company shall in good faith identify and designate a qualified
operator acceptable to GRP within one hundred eighty (180) days from receipt of GRP's written
notice. If the concession company, acting in good faith and with due diligence, is unable to
designate a qualified operator within the aforesaid period, then GRP shall at the end of the 180-
day period take over the Development Facility and assume Attendant Liabilities.
….
Section 1.06. Attendant Liabilities
Attendant Liabilities refer to all amounts recorded and from time to time outstanding in the
books of the Concessionaire as owing to Unpaid Creditors who have provided, loaned or
advanced funds actually used for the Project, including all interests, penalties, associated fees,
charges, surcharges, indemnities, reimbursements and other related expenses, and further
including amounts owed by Concessionaire to its suppliers, contractors and sub-contractors.48
It is clear from the above-quoted provisions that Government, in the event that PIATCO defaults in its
loan obligations, is obligated to pay "all amounts recorded and from time to time outstanding from the
books" of PIATCO which the latter owes to its creditors.49 These amounts include "all interests, penalties,
associated fees, charges, surcharges, indemnities, reimbursements and other related expenses." 50 This
obligation of the Government to pay PIATCO's creditors upon PIATCO's default would arise if the
Government opts to take over NAIA IPT III. It should be noted, however, that even if the Government
chooses the second option, which is to allow PIATCO's unpaid creditors operate NAIA IPT III, the
Government is still at a risk of being liable to PIATCO's creditors should the latter be unable to designate a
qualified operator within the prescribed period.51 In effect, whatever option the Government chooses to
take in the event of PIATCO's failure to fulfill its loan obligations, the Government is still at a risk of
assuming PIATCO's outstanding loans. This is due to the fact that the Government would only be free
from assuming PIATCO's debts if the unpaid creditors would be able to designate a qualified operator within
the period provided for in the contract. Thus, the Government's assumption of liability is virtually out of
its control. The Government under the circumstances provided for in the 1997 Concession Agreement is at
the mercy of the existence, availability and willingness of a qualified operator. The above contractual
provisions constitute a direct government guarantee which is prohibited by law.
One of the main impetus for the enactment of the BOT Law is the lack of government funds to construct the
infrastructure and development projects necessary for economic growth and development. This is why
private sector resources are being tapped in order to finance these projects. The BOT law allows the private
sector to participate, and is in fact encouraged to do so by way of incentives, such as minimizing the unstable
flow of returns,52 provided that the government would not have to unnecessarily expend scarcely available
funds for the project itself. As such, direct guarantee, subsidy and equity by the government in these projects
are strictly prohibited.53 This is but logical for if the government would in the end still be at a risk of
paying the debts incurred by the private entity in the BOT projects, then the purpose of the law is
subverted.
Section 2(n) of the BOT Law defines direct guarantee as follows:
(n) Direct government guarantee — An agreement whereby the government or any of its agencies
or local government units assume responsibility for the repayment of debt directly incurred by
the project proponent in implementing the project in case of a loan default.
Clearly by providing that the Government "assumes" the attendant liabilities, which consists of PIATCO's
unpaid debts, the 1997 Concession Agreement provided for a direct government guarantee for the debts
incurred by PIATCO in the implementation of the NAIA IPT III project. It is of no moment that the relevant
sections are subsumed under the title of "assignment". The provisions providing for direct government
guarantee which is prohibited by law is clear from the terms thereof.
The fact that the ARCA superseded the 1997 Concession Agreement did not cure this fatal defect. Article IV,
Section 4.04(c), in relation to Article I, Section 1.06, of the ARCA provides:
Section 4.04 Security
xxx xxx xxx
(c) GRP agrees with Concessionaire (PIATCO) that it shall negotiate in good faith and enter
into direct agreement with the Senior Lenders, or with an agent of such Senior Lenders (which
agreement shall be subject to the approval of the Bangko Sentral ng Pilipinas), in such form as
may be reasonably acceptable to both GRP and Senior Lenders, with regard, inter alia, to the
following parameters:
xxx xxx xxx
(iv) If the Concessionaire [PIATCO] is in default under a payment obligation owed to
the Senior Lenders, and as a result thereof the Senior Lenders have become entitled to
accelerate the Senior Loans, the Senior Lenders shall have the right to notify GRP of the
same, and without prejudice to any other rights of the Senior Lenders or any Senior
Lenders' agent may have (including without limitation under security interests granted in
favor of the Senior Lenders), to either in good faith identify and designate a nominee
which is qualified under sub-clause (viii)(y) below to operate the Development Facility
[NAIA Terminal 3] or transfer the Concessionaire's [PIATCO] rights and obligations under
this Agreement to a transferee which is qualified under sub-clause (viii) below;
xxx xxx xxx
(vi) if the Senior Lenders, acting in good faith and using reasonable efforts, are unable to
designate a nominee or effect a transfer in terms and conditions satisfactory to the
Senior Lenders within one hundred eighty (180) days after giving GRP notice as referred
to respectively in (iv) or (v) above, then GRP and the Senior Lenders shall endeavor in
good faith to enter into any other arrangement relating to the Development Facility [NAIA
Terminal 3] (other than a turnover of the Development Facility [NAIA Terminal 3] to GRP)
within the following one hundred eighty (180) days. If no agreement relating to the
Development Facility [NAIA Terminal 3] is arrived at by GRP and the Senior Lenders
within the said 180-day period, then at the end thereof the Development Facility [NAIA
Terminal 3] shall be transferred by the Concessionaire [PIATCO] to GRP or its
designee and GRP shall make a termination payment to Concessionaire [PIATCO]
equal to the Appraised Value (as hereinafter defined) of the Development Facility
[NAIA Terminal 3] or the sum of the Attendant Liabilities, if greater. Notwithstanding
Section 8.01(c) hereof, this Agreement shall be deemed terminated upon the transfer of
the Development Facility [NAIA Terminal 3] to GRP pursuant hereto;
xxx xxx xxx
Section 1.06. Attendant Liabilities
Attendant Liabilities refer to all amounts in each case supported by verifiable evidence from
time to time owed or which may become owing by Concessionaire [PIATCO] to Senior
Lenders or any other persons or entities who have provided, loaned, or advanced funds
or provided financial facilities to Concessionaire [PIATCO] for the Project [NAIA Terminal
3], including, without limitation, all principal, interest, associated fees, charges,
reimbursements, and other related expenses (including the fees, charges and expenses of any
agents or trustees of such persons or entities), whether payable at maturity, by acceleration or
otherwise, and further including amounts owed by Concessionaire [PIATCO] to its professional
consultants and advisers, suppliers, contractors and sub-contractors.54
It is clear from the foregoing contractual provisions that in the event that PIATCO fails to fulfill its loan
obligations to its Senior Lenders, the Government is obligated to directly negotiate and enter into an
agreement relating to NAIA IPT III with the Senior Lenders, should the latter fail to appoint a qualified
nominee or transferee who will take the place of PIATCO. If the Senior Lenders and the Government are
unable to enter into an agreement after the prescribed period, the Government must then pay PIATCO, upon
transfer of NAIA IPT III to the Government, termination payment equal to the appraised value of the
project or the value of the attendant liabilities whichever is greater. Attendant liabilities as defined in the
ARCA includes all amounts owed or thereafter may be owed by PIATCO not only to the Senior Lenders with
whom PIATCO has defaulted in its loan obligations but to all other persons who may have loaned, advanced
funds or provided any other type of financial facilities to PIATCO for NAIA IPT III. The amount of PIATCO's
debt that the Government would have to pay as a result of PIATCO's default in its loan obligations -- in case
no qualified nominee or transferee is appointed by the Senior Lenders and no other agreement relating to
NAIA IPT III has been reached between the Government and the Senior Lenders -- includes, but is not
limited to, "all principal, interest, associated fees, charges, reimbursements, and other related expenses . . .
whether payable at maturity, by acceleration or otherwise."55
It is clear from the foregoing that the ARCA provides for a direct guarantee by the government to pay
PIATCO's loans not only to its Senior Lenders but all other entities who provided PIATCO funds or
services upon PIATCO's default in its loan obligation with its Senior Lenders. The fact that the
Government's obligation to pay PIATCO's lenders for the latter's obligation would only arise after the Senior
Lenders fail to appoint a qualified nominee or transferee does not detract from the fact that, should the
conditions as stated in the contract occur, the ARCA still obligates the Government to pay any and all
amounts owed by PIATCO to its lenders in connection with NAIA IPT III. Worse, the conditions that would
make the Government liable for PIATCO's debts is triggered by PIATCO's own default of its loan obligations
to its Senior Lenders to which loan contracts the Government was never a party to. The Government was not
even given an option as to what course of action it should take in case PIATCO defaulted in the payment of
its senior loans. The Government, upon PIATCO's default, would be merely notified by the Senior Lenders of
the same and it is the Senior Lenders who are authorized to appoint a qualified nominee or transferee.
Should the Senior Lenders fail to make such an appointment, the Government is then automatically obligated
to "directly deal and negotiate" with the Senior Lenders regarding NAIA IPT III. The only way the Government
would not be liable for PIATCO's debt is for a qualified nominee or transferee to be appointed in place of
PIATCO to continue the construction, operation and maintenance of NAIA IPT III. This "pre-condition",
however, will not take the contract out of the ambit of a direct guarantee by the government as the existence,
availability and willingness of a qualified nominee or transferee is totally out of the government's control. As
such the Government is virtually at the mercy of PIATCO (that it would not default on its loan obligations
to its Senior Lenders), the Senior Lenders (that they would appoint a qualified nominee or transferee or
agree to some other arrangement with the Government) and the existence of a qualified nominee or
transferee who is able and willing to take the place of PIATCO in NAIA IPT III.
The proscription against government guarantee in any form is one of the policy considerations
behind the BOT Law. Clearly, in the present case, the ARCA obligates the Government to pay for all loans,
advances and obligations arising out of financial facilities extended to PIATCO for the implementation of the
NAIA IPT III project should PIATCO default in its loan obligations to its Senior Lenders and the latter fails to
appoint a qualified nominee or transferee. This in effect would make the Government liable for PIATCO's
loans should the conditions as set forth in the ARCA arise. This is a form of direct government guarantee.
The BOT Law and its implementing rules provide that in order for an unsolicited proposal for a BOT project
may be accepted, the following conditions must first be met: (1) the project involves a new concept in
technology and/or is not part of the list of priority projects, (2) no direct government guarantee, subsidy or
equity is required, and (3) the government agency or local government unit has invited by publication other
interested parties to a public bidding and conducted the same.56 The failure to meet any of the above
conditions will result in the denial of the proposal. It is further provided that the presence of direct government
guarantee, subsidy or equity will "necessarily disqualify a proposal from being treated and accepted as an
unsolicited proposal."57 The BOT Law clearly and strictly prohibits direct government guarantee, subsidy and
equity in unsolicited proposals that the mere inclusion of a provision to that effect is fatal and is sufficient to
deny the proposal. It stands to reason therefore that if a proposal can be denied by reason of the existence
of direct government guarantee, then its inclusion in the contract executed after the said proposal has been
accepted is likewise sufficient to invalidate the contract itself. A prohibited provision, the inclusion of which
would result in the denial of a proposal cannot, and should not, be allowed to later on be inserted in the
contract resulting from the said proposal. The basic rules of justice and fair play alone militate against such
an occurrence and must not, therefore, be countenanced particularly in this instance where the government
is exposed to the risk of shouldering hundreds of million of dollars in debt.
This Court has long and consistently adhered to the legal maxim that those that cannot be done directly
cannot be done indirectly.58 To declare the PIATCO contracts valid despite the clear statutory
prohibition against a direct government guarantee would not only make a mockery of what the BOT
Law seeks to prevent -- which is to expose the government to the risk of incurring a monetary
obligation resulting from a contract of loan between the project proponent and its lenders and to
which the Government is not a party to -- but would also render the BOT Law useless for what it
seeks to achieve –- to make use of the resources of the private sector in the "financing, operation
and maintenance of infrastructure and development projects" 59which are necessary for national
growth and development but which the government, unfortunately, could ill-afford to finance at this
point in time.
IV
Temporary takeover of business affected with public interest
Article XII, Section 17 of the 1987 Constitution provides:
Section 17. In times of national emergency, when the public interest so requires, the State may,
during the emergency and under reasonable terms prescribed by it, temporarily take over or direct
the operation of any privately owned public utility or business affected with public interest.
The above provision pertains to the right of the State in times of national emergency, and in the exercise of
its police power, to temporarily take over the operation of any business affected with public interest. In the
1986 Constitutional Commission, the term "national emergency" was defined to include threat from external
aggression, calamities or national disasters, but not strikes "unless it is of such proportion that would
paralyze government service."60 The duration of the emergency itself is the determining factor as to how long
the temporary takeover by the government would last.61 The temporary takeover by the government extends
only to the operation of the business and not to the ownership thereof. As such the government is not
required to compensate the private entity-owner of the said business as there is no transfer of
ownership, whether permanent or temporary. The private entity-owner affected by the temporary takeover
cannot, likewise, claim just compensation for the use of the said business and its properties as the temporary
takeover by the government is in exercise of its police power and not of its power of eminent domain.
Article V, Section 5.10 (c) of the 1997 Concession Agreement provides:
Section 5.10 Temporary Take-over of operations by GRP.
….
(c) In the event the development Facility or any part thereof and/or the operations of
Concessionaire or any part thereof, become the subject matter of or be included in any notice,
notification, or declaration concerning or relating to acquisition, seizure or appropriation by GRP in
times of war or national emergency, GRP shall, by written notice to Concessionaire, immediately
take over the operations of the Terminal and/or the Terminal Complex. During such take over by
GRP, the Concession Period shall be suspended; provided, that upon termination of war, hostilities
or national emergency, the operations shall be returned to Concessionaire, at which time, the
Concession period shall commence to run again. Concessionaire shall be entitled to
reasonable compensation for the duration of the temporary take over by GRP, which
compensation shall take into account the reasonable cost for the use of the Terminal and/or
Terminal Complex, (which is in the amount at least equal to the debt service requirements
of Concessionaire, if the temporary take over should occur at the time when Concessionaire is
still servicing debts owed to project lenders), any loss or damage to the Development Facility, and
other consequential damages. If the parties cannot agree on the reasonable compensation of
Concessionaire, or on the liability of GRP as aforesaid, the matter shall be resolved in accordance
with Section 10.01 [Arbitration]. Any amount determined to be payable by GRP to Concessionaire
shall be offset from the amount next payable by Concessionaire to GRP.62
PIATCO cannot, by mere contractual stipulation, contravene the Constitutional provision on

temporary government takeover and obligate the government to pay "reasonable cost for the use of
the Terminal and/or Terminal Complex."63 Article XII, section 17 of the 1987 Constitution envisions a
situation wherein the exigencies of the times necessitate the government to "temporarily take over or direct
the operation of any privately owned public utility or business affected with public interest." It is the welfare
and interest of the public which is the paramount consideration in determining whether or not to temporarily
take over a particular business. Clearly, the State in effecting the temporary takeover is exercising its police
power. Police power is the "most essential, insistent, and illimitable of powers."64 Its exercise therefore must
not be unreasonably hampered nor its exercise be a source of obligation by the government in the absence
of damage due to arbitrariness of its exercise.65 Thus, requiring the government to pay reasonable
compensation for the reasonable use of the property pursuant to the operation of the business contravenes
the Constitution.
Regulation of Monopolies
A monopoly is "a privilege or peculiar advantage vested in one or more persons or companies, consisting in
the exclusive right (or power) to carry on a particular business or trade, manufacture a particular article, or
control the sale of a particular commodity."66 The 1987 Constitution strictly regulates
monopolies, whether private or public, and even provides for their prohibition if public interest so requires.
Article XII, Section 19 of the 1987 Constitution states:
Sec. 19. The state shall regulate or prohibit monopolies when the public interest so requires. No
combinations in restraint of trade or unfair competition shall be allowed.
Clearly, monopolies are not per se prohibited by the Constitution but may be permitted to exist to aid the
government in carrying on an enterprise or to aid in the performance of various services and functions in the
interest of the public.67 Nonetheless, a determination must first be made as to whether public interest
requires a monopoly. As monopolies are subject to abuses that can inflict severe prejudice to the public, they
are subject to a higher level of State regulation than an ordinary business undertaking.
In the cases at bar, PIATCO, under the 1997 Concession Agreement and the ARCA, is granted the
"exclusive rightto operate a commercial international passenger terminal within the Island of Luzon" at the
NAIA IPT III.68 This is with the exception of already existing international airports in Luzon such as those
located in the Subic Bay Freeport Special Economic Zone ("SBFSEZ"), Clark Special Economic Zone
("CSEZ") and in Laoag City.69 As such, upon commencement of PIATCO's operation of NAIA IPT III,
Terminals 1 and 2 of NAIA would cease to function as international passenger terminals. This, however,
does not prevent MIAA to use Terminals 1 and 2 as domestic passenger terminals or in any other manner as
it may deem appropriate except those activities that would compete with NAIA IPT III in the latter's operation
as an international passenger terminal.70 The right granted to PIATCO to exclusively operate NAIA IPT
III would be for a period of twenty-five (25) years from the In-Service Date71 and renewable for another
twenty-five (25) years at the option of the government.72 Both the 1997 Concession Agreement and the
ARCA further provide that, in view of the exclusive right granted to PIATCO, the concession
contracts of the service providers currently servicing Terminals 1 and 2 would no longer be renewed
and those concession contracts whose expiration are subsequent to the In-Service Date would cease
to be effective on the said date.73
The operation of an international passenger airport terminal is no doubt an undertaking imbued with public
interest. In entering into a Build–Operate-and-Transfer contract for the construction, operation and
maintenance of NAIA IPT III, the government has determined that public interest would be served better if
private sector resources were used in its construction and an exclusive right to operate be granted to the
private entity undertaking the said project, in this case PIATCO. Nonetheless, the privilege given to PIATCO
is subject to reasonable regulation and supervision by the Government through the MIAA, which is the
government agency authorized to operate the NAIA complex, as well as DOTC, the department to which
MIAA is attached.74
This is in accord with the Constitutional mandate that a monopoly which is not prohibited must be
regulated.75 While it is the declared policy of the BOT Law to encourage private sector participation by
"providing a climate of minimum government regulations,"76 the same does not mean that Government must
completely surrender its sovereign power to protect public interest in the operation of a public utility as a
monopoly. The operation of said public utility can not be done in an arbitrary manner to the detriment of the
public which it seeks to serve. The right granted to the public utility may be exclusive but the exercise of the
right cannot run riot. Thus, while PIATCO may be authorized to exclusively operate NAIA IPT III as an
international passenger terminal, the Government, through the MIAA, has the right and the duty to ensure
that it is done in accord with public interest. PIATCO's right to operate NAIA IPT III cannot also violate the
rights of third parties.
Section 3.01(e) of the 1997 Concession Agreement and the ARCA provide:
3.01 Concession Period
xxx xxx xxx
(e) GRP confirms that certain concession agreements relative to certain services and
operations currently being undertaken at the Ninoy Aquino International Airport passenger
Terminal I have a validity period extending beyond the In-Service Date. GRP through
DOTC/MIAA, confirms that these services and operations shall not be carried over to the
Terminal and the Concessionaire is under no legal obligation to permit such carry-over except
through a separate agreement duly entered into with Concessionaire. In the event Concessionaire
becomes involved in any litigation initiated by any such concessionaire or operator, GRP
undertakes and hereby holds Concessionaire free and harmless on full indemnity basis from and
against any loss and/or any liability resulting from any such litigation, including the cost of litigation
and the reasonable fees paid or payable to Concessionaire's counsel of choice, all such amounts
shall be fully deductible by way of an offset from any amount which the Concessionaire is bound to
pay GRP under this Agreement.
During the oral arguments on December 10, 2002, the counsel for the petitioners-in-intervention for
G.R. No. 155001 stated that there are two service providers whose contracts are still existing and
whose validity extends beyond the In-Service Date. One contract remains valid until 2008 and the
other until 2010.77
We hold that while the service providers presently operating at NAIA Terminal 1 do not have an absolute
right for the renewal or the extension of their respective contracts, those contracts whose duration extends
beyond NAIA IPT III's In-Service-Date should not be unduly prejudiced. These contracts must be respected
not just by the parties thereto but also by third parties. PIATCO cannot, by law and certainly not by contract,
render a valid and binding contract nugatory. PIATCO, by the mere expedient of claiming an exclusive right
to operate, cannot require the Government to break its contractual obligations to the service providers. In
contrast to the arrastre and stevedoring service providers in the case of Anglo-Fil Trading Corporation v.
Lazaro78 whose contracts consist of temporary hold-over permits, the affected service providers in the cases
at bar, have a valid and binding contract with the Government, through MIAA, whose period of effectivity, as
well as the other terms and conditions thereof, cannot be violated.
In fine, the efficient functioning of NAIA IPT III is imbued with public interest. The provisions of the 1997
Concession Agreement and the ARCA did not strip government, thru the MIAA, of its right to supervise the
operation of the whole NAIA complex, including NAIA IPT III. As the primary government agency tasked with
the job,79 it is MIAA's responsibility to ensure that whoever by contract is given the right to operate NAIA IPT
III will do so within the bounds of the law and with due regard to the rights of third parties and above all, the
interest of the public.
VI
CONCLUSION
In sum, this Court rules that in view of the absence of the requisite financial capacity of the Paircargo
Consortium, predecessor of respondent PIATCO, the award by the PBAC of the contract for the construction,
operation and maintenance of the NAIA IPT III is null and void. Further, considering that the 1997
Concession Agreement contains material and substantial amendments, which amendments had the effect of
converting the 1997 Concession Agreement into an entirely different agreement from the contract bidded
upon, the 1997 Concession Agreement is similarly null and void for being contrary to public policy. The
provisions under Sections 4.04(b) and (c) in relation to Section 1.06 of the 1997 Concession Agreement and
Section 4.04(c) in relation to Section 1.06 of the ARCA, which constitute a direct government guarantee
expressly prohibited by, among others, the BOT Law and its Implementing Rules and Regulations are also
null and void. The Supplements, being accessory contracts to the ARCA, are likewise null and void.
WHEREFORE, the 1997 Concession Agreement, the Amended and Restated Concession Agreement and
the Supplements thereto are set aside for being null and void.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Ynares-Santiago, Sandoval-Gutierrez, Austria-Martinez, Corona, and Carpio-
Morales, JJ., concur.
Vitug, J., see separate (dissenting) opinion.
Panganiban, J., please see separate opinion.
Quisumbing, J., no jurisdiction, please see separate opinion of J. Vitug in which he concurs.
Carpio, J., no part.
Callejo, Sr., J., also concur in the separate opinion of J. Panganiban.
Azcuna, J., joins the separate opinion of J. Vitug.
SECOND DIVISION
G.R. No. 155336 November 25, 2004
COMMISSION ON HUMAN RIGHTS EMPLOYEES' ASSOCIATION (CHREA) Represented by its

President, MARCIAL A. SANCHEZ, JR., petitioner,
vs.
COMMISSION ON HUMAN RIGHTS, respondent.
DECISION
CHICO-NAZARIO, J.:
Can the Commission on Human Rights lawfully implement an upgrading and reclassification of personnel
positions without the prior approval of the Department of Budget and Management?
Before this Court is a petition for review filed by petitioner Commission on Human Rights Employees'
Association (CHREA) challenging the Decision1 dated 29 November 2001 of the Court of Appeals in CA-G.R.
SP No. 59678 affirming the Resolutions2 dated 16 December 1999 and 09 June 2000 of the Civil Service
Commission (CSC), which sustained the validity of the upgrading and reclassification of certain personnel
positions in the Commission on Human Rights (CHR) despite the disapproval thereof by the Department of
Budget and Management (DBM). Also assailed is the resolution dated 11 September 2002 of the Court of
Appeals denying the motion for reconsideration filed by petitioner.
The antecedent facts which spawned the present controversy are as follows:
On 14 February 1998, Congress passed Republic Act No. 8522, otherwise known as the General
Appropriations Act of 1998. It provided for Special Provisions Applicable to All Constitutional Offices Enjoying
Fiscal Autonomy. The last portion of Article XXXIII covers the appropriations of the CHR. These special
provisions state:
1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the
limits of their respective appropriations as authorized in this Act, the Constitutional Commissions
and Offices enjoying fiscal autonomy are authorized to formulate and implement the organizational
structures of their respective offices, to fix and determine the salaries, allowances, and other
benefits of their personnel, and whenever public interest so requires, make adjustments in their
personal services itemization including, but not limited to, the transfer of item or creation of new
positions in their respective offices: PROVIDED, That officers and employees whose positions are
affected by such reorganization or adjustments shall be granted retirement gratuities and
separation pay in accordance with existing laws, which shall be payable from any unexpended
balance of, or savings in the appropriations of their respective offices: PROVIDED, FURTHER,
That the implementation hereof shall be in accordance with salary rates, allowances and other
benefits authorized under compensation standardization laws.
2. Use of Savings. The Constitutional Commissions and Offices enjoying fiscal autonomy are
hereby authorized to use savings in their respective appropriations for: (a) printing and/or
publication of decisions, resolutions, and training information materials; (b) repair, maintenance
and improvement of central and regional offices, facilities and equipment; (c) purchase of books,
journals, periodicals and equipment; (d) necessary expenses for the employment of temporary,
contractual and casual employees; (e) payment of extraordinary and miscellaneous expenses,
commutable representation and transportation allowances, and fringe benefits for their officials and
employees as may be authorized by law; and (f) other official purposes, subject to accounting and
auditing rules and regulations. (Emphases supplied)
on the strength of these special provisions, the CHR, through its then Chairperson Aurora P. Navarette-
Reciña and Commissioners Nasser A. Marohomsalic, Mercedes V. Contreras, Vicente P. Sibulo, and Jorge
R. Coquia, promulgated Resolution No. A98-047 on 04 September 1998, adopting an upgrading and
reclassification scheme among selected positions in the Commission, to wit:
WHEREAS, the General Appropriations Act, FY 1998, R.A. No. 8522 has provided special
provisions applicable to all Constitutional Offices enjoying Fiscal Autonomy, particularly on
organizational structures and authorizes the same to formulate and implement the organizational
structures of their respective offices to fix and determine the salaries, allowances and other
benefits of their personnel and whenever public interest so requires, make adjustments in the
personnel services itemization including, but not limited to, the transfer of item or creation of new
positions in their respective offices: PROVIDED, That officers and employees whose positions are
affected by such reorganization or adjustments shall be granted retirement gratuities and
separation pay in accordance with existing laws, which shall be payable from any unexpanded
balance of, or savings in the appropriations of their respective offices;
Whereas, the Commission on Human Rights is a member of the Constitutional Fiscal Autonomy
Group (CFAG) and on July 24, 1998, CFAG passed an approved Joint Resolution No. 49 adopting
internal rules implementing the special provisions heretoforth mentioned;
NOW THEREFORE, the Commission by virtue of its fiscal autonomy hereby approves and
authorizes the upgrading and augmentation of the commensurate amount generated from savings
under Personal Services to support the implementation of this resolution effective Calendar Year
1998;
Let the Human Resources Development Division (HRDD) prepare the necessary Notice of Salary
Adjustment and other appropriate documents to implement this resolution; . . . .3 (Emphasis
supplied)
Annexed to said resolution is the proposed creation of ten additional plantilla positions, namely: one Director
IV position, with Salary Grade 28 for the Caraga Regional Office, four Security Officer II with Salary Grade
15, and five Process Servers, with Salary Grade 5 under the Office of the Commissioners. 4
On 19 October 1998, CHR issued Resolution No. A98-0555 providing for the upgrading or raising of salary
grades of the following positions in the Commission:
Number of Position Salary Grade Total Salary

Positions Requirements
Title
From To From To
12 Attorney VI (In Director IV 26 28 P229,104.00
the Regional
Field Offices)
4 Director III Director IV 27 28 38,928.00
1 Financial & Director IV 24 28 36,744.00
Management
Officer II
1 Budget Officer III Budget Officer IV 18 24 51,756.00
1 Accountant III Chief Accountant 18 24 51,756.00
1 Cashier III Cashier V 18 24 51,756.00
1 Information Director IV 24 28 36,744.006
Officer V
It, likewise, provided for the creation and upgrading of the following positions:
A. Creation
Number of Position Title Salary Grade Total Salary

4 Security Officer II 15 684,780.00
(Coterminous)
B. Upgrading
Number of Position Title Salary Grade Total Salary

From To From To
1 Attorney V Director IV 25 28 P28,092.00
2 Security Officer I Security Officer II 11 15 57,456.00
----------------
Total 3 P 85,548.007
To support the implementation of such scheme, the CHR, in the same resolution, authorized the
augmentation of a commensurate amount generated from savings under Personnel Services.
By virtue of Resolution No. A98-062 dated 17 November 1998, the CHR "collapsed" the vacant positions in
the body to provide additional source of funding for said staffing modification. Among the positions collapsed
were: one Attorney III, four Attorney IV, one Chemist III, three Special Investigator I, one Clerk III, and one
Accounting Clerk II.8
The CHR forwarded said staffing modification and upgrading scheme to the DBM with a request for its
approval, but the then DBM secretary Benjamin Diokno denied the request on the following justification:
… Based on the evaluations made the request was not favorably considered as it effectively involved the
elevation of the field units from divisions to services.
The present proposal seeks further to upgrade the twelve (12) positions of Attorney VI, SG-26 to Director IV,
SG-28. This would elevate the field units to a bureau or regional office, a level even higher than the one
previously denied.
The request to upgrade the three (3) positions of Director III, SG-27 to Director IV, SG-28, in the Central
Office in effect would elevate the services to Office and change the context from support to substantive
without actual change in functions.
In the absence of a specific provision of law which may be used as a legal basis to elevate the level of
divisions to a bureau or regional office, and the services to offices, we reiterate our previous stand denying
the upgrading of the twelve (12) positions of Attorney VI, SG-26 to Director III, SG-27 or Director IV, SG-28,
in the Field Operations Office (FOO) and three (3) Director III, SG-27 to Director IV, SG-28 in the Central
Office.
As represented, President Ramos then issued a Memorandum to the DBM Secretary dated 10 December
1997, directing the latter to increase the number of Plantilla positions in the CHR both Central and Regional
Offices to implement the Philippine Decade Plan on Human Rights Education, the Philippine Human Rights
Plan and Barangay Rights Actions Center in accordance with existing laws. (Emphasis in the original)
Pursuant to Section 78 of the General Provisions of the General Appropriations Act (GAA) FY 1998, no
organizational unit or changes in key positions shall be authorized unless provided by law or directed by the
President, thus, the creation of a Finance Management Office and a Public Affairs Office cannot be given
favorable recommendation.
Moreover, as provided under Section 2 of RA No. 6758, otherwise known as the Compensation
Standardization Law, the Department of Budget and Management is directed to establish and administer a
unified compensation and position classification system in the government. The Supreme Court ruled in the
case of Victorina Cruz vs. Court of Appeals, G.R. No. 119155, dated January 30, 1996, that this Department
has the sole power and discretion to administer the compensation and position classification system of the
National Government.
Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify,
upgrade, and create positions without approval of the DBM. While the members of the Group are authorized
to formulate and implement the organizational structures of their respective offices and determine the
compensation of their personnel, such authority is not absolute and must be exercised within the parameters
of the Unified Position Classification and Compensation System established under RA 6758 more popularly
known as the Compensation Standardization Law. We therefore reiterate our previous stand on the
matter.9 (Emphases supplied)
In light of the DBM's disapproval of the proposed personnel modification scheme, the CSC-National Capital
Region Office, through a memorandum dated 29 March 1999, recommended to the CSC-Central Office that
the subject appointments be rejected owing to the DBM's disapproval of the plantilla reclassification.
Meanwhile, the officers of petitioner CHREA, in representation of the rank and file employees of the CHR,
requested the CSC-Central Office to affirm the recommendation of the CSC-Regional Office. CHREA stood
its ground in saying that the DBM is the only agency with appropriate authority mandated by law to evaluate
and approve matters of reclassification and upgrading, as well as creation of positions.
The CSC-Central Office denied CHREA's request in a Resolution dated 16 December 1999, and reversed
the recommendation of the CSC-Regional Office that the upgrading scheme be censured. The decretal
portion of which reads:
WHEREFORE, the request of Ronnie N. Rosero, Hubert V. Ruiz, Flordeliza A. Briones, George Q.
Dumlao [and], Corazon A. Santos-Tiu, is hereby denied.10
CHREA filed a motion for reconsideration, but the CSC-Central Office denied the same on 09 June
2000.
Given the cacophony of judgments between the DBM and the CSC, petitioner CHREA elevated the
matter to the Court of Appeals. The Court of Appeals affirmed the pronouncement of the CSC-
Central Office and upheld the validity of the upgrading, retitling, and reclassification scheme in the
CHR on the justification that such action is within the ambit of CHR's fiscal autonomy. The fallo of
the Court of Appeals decision provides:
IN VIEW OF ALL THE FOREGOING, the instant petition is ordered DISMISSED and the
questioned Civil Service Commission Resolution No. 99-2800 dated December 16, 1999 as well as
No. 001354 dated June 9, 2000, are hereby AFFIRMED. No cost.11
Unperturbed, petitioner filed this petition in this Court contending that:
A.
…THE COURT OF APPEALS GRAVELY ERRED WHEN IT HELD THAT UNDER THE 1987
CONSTITUTION, THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY.
B.
…THE COURT OF APPEALS SERIOUSLY ERRED IN UPHOLDING THE CONSTRUCTION OF

THE COMMISSION ON HUMAN RIGHTS OF REPUBLIC ACT NO. 8522 (THE GENERAL
APPROPRIATIONS ACT FOR THE FISCAL YEAR 1998) DESPITE ITS BEING IN SHARP
CONFLICT WITH THE 1987 CONSTITUTION AND THE STATUTE ITSELF.
C.
…THE COURT OF APPEALS SERIOUSLY AND GRAVELY ERRED IN AFFIRMING THE

VALIDITY OF THE CIVIL SERVICE COMMISSION RESOLUTION NOS. 992800 AND 001354 AS
WELL AS THAT OF THE OPINION OF THE DEPARTMENT OF JUSTICE IN STATING THAT
THE COMMISSION ON HUMAN RIGHTS ENJOYS FISCAL AUTONOMY UNDER THE 1987
CONSTITUTION AND THAT THIS FISCAL AUTONOMY INCLUDES THE ACTION TAKEN BY IT
IN COLLAPSING, UPGRADING AND RECLASSIFICATION OF POSITIONS THEREIN.12
The central question we must answer in order to resolve this case is: Can the Commission on Human Rights
validly implement an upgrading, reclassification, creation, and collapsing of plantilla positions in the
Commission without the prior approval of the Department of Budget and Management?
Petitioner CHREA grouses that the Court of Appeals and the CSC-Central Office both erred in sanctioning
the CHR's alleged blanket authority to upgrade, reclassify, and create positions inasmuch as the approval of
the DBM relative to such scheme is still indispensable. Petitioner bewails that the CSC and the Court of
Appeals erroneously assumed that CHR enjoys fiscal autonomy insofar as financial matters are concerned,
particularly with regard to the upgrading and reclassification of positions therein.
Respondent CHR sharply retorts that petitioner has no locus standi considering that there exists no official
written record in the Commission recognizing petitioner as a bona fide organization of its employees nor is
there anything in the records to show that its president, Marcial A. Sanchez, Jr., has the authority to sue the
CHR. The CHR contends that it has the authority to cause the upgrading, reclassification, plantilla creation,
and collapsing scheme sans the approval of the DBM because it enjoys fiscal autonomy.
After a thorough consideration of the arguments of both parties and an assiduous scrutiny of the records in
the case at bar, it is the Court's opinion that the present petition is imbued with merit.
On petitioner's personality to bring this suit, we held in a multitude of cases that a proper party is one who
has sustained or is in immediate danger of sustaining an injury as a result of the act complained of. 13 Here,
petitioner, which consists of rank and file employees of respondent CHR, protests that the upgrading and
collapsing of positions benefited only a select few in the upper level positions in the Commission resulting to
the demoralization of the rank and file employees. This sufficiently meets the injury test. Indeed, the CHR's
upgrading scheme, if found to be valid, potentially entails eating up the Commission's savings or that portion
of its budgetary pie otherwise allocated for Personnel Services, from which the benefits of the employees,
including those in the rank and file, are derived.
Further, the personality of petitioner to file this case was recognized by the CSC when it took cognizance of
the CHREA's request to affirm the recommendation of the CSC-National Capital Region Office. CHREA's
personality to bring the suit was a non-issue in the Court of Appeals when it passed upon the merits of this
case. Thus, neither should our hands be tied by this technical concern. Indeed, it is settled jurisprudence that
an issue that was neither raised in the complaint nor in the court below cannot be raised for the first time on
appeal, as to do so would be offensive to the basic rules of fair play, justice, and due process.14
We now delve into the main issue of whether or not the approval by the DBM is a condition precedent to the
enactment of an upgrading, reclassification, creation and collapsing of plantilla positions in the CHR.
Germane to our discussion is Rep. Act No. 6758, An Act Prescribing a Revised Compensation and Position
Classification System in the Government and For Other Purposes, or the Salary Standardization Law, dated
01 July 1989, which provides in Sections 2 and 4 thereof that it is the DBM that shall establish and administer
a unified Compensation and Position Classification System. Thus:
SEC. 2. Statement of Policy. -- It is hereby declared the policy of the State to provide equal pay for
substantially equal work and to base differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions. In determining rates of pay, due
regard shall be given to, among others, prevailing rates in the private sector for comparable work.
For this purpose, the Department of Budget and Management (DBM) is hereby directed to
establish and administer a unified Compensation and Position Classification System, hereinafter
referred to as the System as provided for in Presidential Decree No. 985, as amended, that shall
be applied for all government entities, as mandated by the Constitution. (Emphasis supplied.)
SEC. 4. Coverage. – The Compensation and Position Classification System herein provided shall
apply to all positions, appointive or elective, on full or part-time basis, now existing or hereafter
created in the government, including government-owned or controlled corporations and
government financial institutions.
The term "government" refers to the Executive, the Legislative and the Judicial Branches and the
Constitutional Commissions and shall include all, but shall not be limited to, departments, bureaus, offices,
boards, commissions, courts, tribunals, councils, authorities, administrations, centers, institutes, state
colleges and universities, local government units, and the armed forces. The term "government-owned or
controlled corporations and financial institutions" shall include all corporations and financial institutions
owned or controlled by the National Government, whether such corporations and financial institutions
perform governmental or proprietary functions. (Emphasis supplied.)
The disputation of the Court of Appeals that the CHR is exempt from the long arm of the Salary
Standardization Law is flawed considering that the coverage thereof, as defined above, encompasses the
entire gamut of government offices, sans qualification.
This power to "administer" is not purely ministerial in character as erroneously held by the Court of Appeals.
The word to administer means to control or regulate in behalf of others; to direct or superintend the
execution, application or conduct of; and to manage or conduct public affairs, as to administer the
government of the state.15
The regulatory power of the DBM on matters of compensation is encrypted not only in law, but in
jurisprudence as well. In the recent case of Philippine Retirement Authority (PRA) v. Jesusito L. Buñag, 16 this
Court, speaking through Mr. Justice Reynato Puno, ruled that compensation, allowances, and other benefits
received by PRA officials and employees without the requisite approval or authority of the DBM are
unauthorized and irregular. In the words of the Court –
Despite the power granted to the Board of Directors of PRA to establish and fix a compensation and benefits
scheme for its employees, the same is subject to the review of the Department of Budget and Management.
However, in view of the express powers granted to PRA under its charter, the extent of the review authority
of the Department of Budget and Management is limited. As stated in Intia, the task of the Department of
Budget and Management is simply to review the compensation and benefits plan of the government agency
or entity concerned and determine if the same complies with the prescribed policies and guidelines issued in
this regard. The role of the Department of Budget and Management is supervisorial in nature, its main duty
being to ascertain that the proposed compensation, benefits and other incentives to be given to PRA officials
and employees adhere to the policies and guidelines issued in accordance with applicable laws.
In Victorina Cruz v. Court of Appeals,17 we held that the DBM has the sole power and discretion to administer
the compensation and position classification system of the national government.
In Intia, Jr. v. Commission on Audit,18 the Court held that although the charter19 of the Philippine Postal
Corporation (PPC) grants it the power to fix the compensation and benefits of its employees and exempts
PPC from the coverage of the rules and regulations of the Compensation and Position Classification Office,
by virtue of Section 6 of P.D. No. 1597, the compensation system established by the PPC is, nonetheless,
subject to the review of the DBM. This Court intoned:
It should be emphasized that the review by the DBM of any PPC resolution affecting the compensation
structure of its personnel should not be interpreted to mean that the DBM can dictate upon the PPC Board of
Directors and deprive the latter of its discretion on the matter. Rather, the DBM's function is merely to ensure
that the action taken by the Board of Directors complies with the requirements of the law, specifically, that
PPC's compensation system "conforms as closely as possible with that provided for under R.A. No. 6758."
(Emphasis supplied.)
As measured by the foregoing legal and jurisprudential yardsticks, the imprimatur of the DBM must first be
sought prior to implementation of any reclassification or upgrading of positions in government. This is
consonant to the mandate of the DBM under the Revised Administrative Code of 1987, Section 3, Chapter 1,
Title XVII, to wit:
SEC. 3. Powers and Functions. – The Department of Budget and Management shall assist the
President in the preparation of a national resources and expenditures budget, preparation,
execution and control of the National Budget, preparation and maintenance of accounting systems
essential to the budgetary process, achievement of more economy and efficiency in the
management of government operations, administration of compensation and position classification
systems, assessment of organizational effectiveness and review and evaluation of legislative
proposals having budgetary or organizational implications. (Emphasis supplied.)
Irrefragably, it is within the turf of the DBM Secretary to disallow the upgrading, reclassification, and creation
of additional plantilla positions in the CHR based on its finding that such scheme lacks legal justification.
Notably, the CHR itself recognizes the authority of the DBM to deny or approve the proposed reclassification
of positions as evidenced by its three letters to the DBM requesting approval thereof. As such, it is now
estopped from now claiming that the nod of approval it has previously sought from the DBM is a superfluity.
The Court of Appeals incorrectly relied on the pronouncement of the CSC-Central Office that the CHR is a
constitutional commission, and as such enjoys fiscal autonomy.20
Palpably, the Court of Appeals' Decision was based on the mistaken premise that the CHR belongs to the
species of constitutional commissions. But, Article IX of the Constitution states in no uncertain terms that only
the CSC, the Commission on Elections, and the Commission on Audit shall be tagged as Constitutional
Commissions with the appurtenant right to fiscal autonomy. Thus:
Sec. 1. The Constitutional Commissions, which shall be independent, are the Civil Service
Commission, the Commission on Elections, and the Commission on Audit.
Sec. 5. The Commission shall enjoy fiscal autonomy. Their approved annual appropriations shall
be automatically and regularly released.
Along the same vein, the Administrative Code, in Chapter 5, Sections 24 and 26 of Book II on Distribution of
Powers of Government, the constitutional commissions shall include only the Civil Service Commission, the
Commission on Elections, and the Commission on Audit, which are granted independence and fiscal
autonomy. In contrast, Chapter 5, Section 29 thereof, is silent on the grant of similar powers to the other
bodies including the CHR. Thus:
SEC. 24. Constitutional Commissions. – The Constitutional Commissions, which shall be

independent, are the Civil Service Commission, the Commission on Elections, and the Commission
on Audit.
SEC. 26. Fiscal Autonomy. – The Constitutional Commissions shall enjoy fiscal autonomy. The
approved annual appropriations shall be automatically and regularly released.
SEC. 29. Other Bodies. – There shall be in accordance with the Constitution, an Office of the
Ombudsman, a Commission on Human Rights, and independent central monetary authority, and a
national police commission. Likewise, as provided in the Constitution, Congress may establish an
independent economic and planning agency. (Emphasis ours.)
From the 1987 Constitution and the Administrative Code, it is abundantly clear that the CHR is not among
the class of Constitutional Commissions. As expressed in the oft-repeated maxim expressio unius est
exclusio alterius, the express mention of one person, thing, act or consequence excludes all others. Stated
otherwise, expressium facit cessare tacitum – what is expressed puts an end to what is implied.21
Nor is there any legal basis to support the contention that the CHR enjoys fiscal autonomy. In essence, fiscal
autonomy entails freedom from outside control and limitations, other than those provided by law. It is the
freedom to allocate and utilize funds granted by law, in accordance with law, and pursuant to the wisdom and
dispatch its needs may require from time to time.22 In Blaquera v. Alcala and Bengzon v. Drilon,23 it is
understood that it is only the Judiciary, the Civil Service Commission, the Commission on Audit, the
Commission on Elections, and the Office of the Ombudsman, which enjoy fiscal autonomy. Thus, in
Bengzon,24 we explained:
As envisioned in the Constitution, the fiscal autonomy enjoyed by the Judiciary, the Civil Service
Commission, the Commission on Audit, the Commission on Elections, and the Office of the
Ombudsman contemplates a guarantee of full flexibility to allocate and utilize their resources with
the wisdom and dispatch that their needs require. It recognizes the power and authority to levy,
assess and collect fees, fix rates of compensation not exceeding the highest rates authorized by
law for compensation and pay plans of the government and allocate and disburse such sums as
may be provided by law or prescribed by them in the course of the discharge of their functions.
...
The Judiciary, the Constitutional Commissions, and the Ombudsman must have the independence
and flexibility needed in the discharge of their constitutional duties. The imposition of restrictions
and constraints on the manner the independent constitutional offices allocate and utilize the funds
appropriated for their operations is anathema to fiscal autonomy and violative not only of the
express mandate of the Constitution but especially as regards the Supreme Court, of the
independence and separation of powers upon which the entire fabric of our constitutional system is
based. In the interest of comity and cooperation, the Supreme Court, [the] Constitutional
Commissions, and the Ombudsman have so far limited their objections to constant reminders. We
now agree with the petitioners that this grant of autonomy should cease to be a meaningless
provision. (Emphasis supplied.)
Neither does the fact that the CHR was admitted as a member by the Constitutional Fiscal Autonomy Group
(CFAG) ipso facto clothed it with fiscal autonomy. Fiscal autonomy is a constitutional grant, not a tag
obtainable by membership.
We note with interest that the special provision under Rep. Act No. 8522, while cited under the heading of the
CHR, did not specifically mention CHR as among those offices to which the special provision to formulate
and implement organizational structures apply, but merely states its coverage to include Constitutional
Commissions and Offices enjoying fiscal autonomy. In contrast, the Special Provision Applicable to the
Judiciary under Article XXVIII of the General Appropriations Act of 1998 specifically mentions that such
special provision applies to the judiciary and had categorically authorized the Chief Justice of the Supreme
Court to formulate and implement the organizational structure of the Judiciary, to wit:
1. Organizational Structure. Any provision of law to the contrary notwithstanding and within the
limits of their respective appropriations authorized in this Act, the Chief Justice of the Supreme
Court is authorized to formulate and implement organizational structure of the Judiciary, to fix and
determine the salaries, allowances, and other benefits of their personnel, and whenever public
interest so requires, make adjustments in the personal services itemization including, but not
limited to, the transfer of item or creation of new positions in the Judiciary; PROVIDED, That
officers and employees whose positions are affected by such reorganization or adjustments shall
be granted retirement gratuities and separation pay in accordance with existing law, which shall be
payable from any unexpended balance of, or savings in the appropriations of their respective
offices: PROVIDED, FURTHER, That the implementation hereof shall be in accordance with salary
rates, allowances and other benefits authorized under compensation standardization laws.
(Emphasis supplied.)
All told, the CHR, although admittedly a constitutional creation is, nonetheless, not included in the genus of
offices accorded fiscal autonomy by constitutional or legislative fiat.
Even assuming en arguendo that the CHR enjoys fiscal autonomy, we share the stance of the DBM that the
grant of fiscal autonomy notwithstanding, all government offices must, all the same, kowtow to the Salary
Standardization Law. We are of the same mind with the DBM on its standpoint, thus-
Being a member of the fiscal autonomy group does not vest the agency with the authority to reclassify,
upgrade, and create positions without approval of the DBM. While the members of the Group are authorized
to formulate and implement the organizational structures of their respective offices and determine the
compensation of their personnel, such authority is not absolute and must be exercised within the parameters
of the Unified Position Classification and Compensation System established under RA 6758 more popularly
known as the Compensation Standardization Law.25 (Emphasis supplied.)
The most lucid argument against the stand of respondent, however, is the provision of Rep. Act No. 8522
"that the implementation hereof shall be in accordance with salary rates, allowances and other benefits
authorized under compensation standardization laws."26
Indeed, the law upon which respondent heavily anchors its case upon has expressly provided that any form
of adjustment in the organizational structure must be within the parameters of the Salary Standardization
Law.
The Salary Standardization Law has gained impetus in addressing one of the basic causes of discontent of
many civil servants.27 For this purpose, Congress has delegated to the DBM the power to administer the
Salary Standardization Law and to ensure that the spirit behind it is observed. This power is part of the
system of checks and balances or system of restraints in our government. The DBM's exercise of such
authority is not in itself an arrogation inasmuch as it is pursuant to the paramount law of the land, the Salary
Standardization Law and the Administrative Code.
In line with its role to breathe life into the policy behind the Salary Standardization Law of "providing equal
pay for substantially equal work and to base differences in pay upon substantive differences in duties and
responsibilities, and qualification requirements of the positions," the DBM, in the case under review, made a
determination, after a thorough evaluation, that the reclassification and upgrading scheme proposed by the
CHR lacks legal rationalization.
The DBM expounded that Section 78 of the general provisions of the General Appropriations Act FY 1998,
which the CHR heavily relies upon to justify its reclassification scheme, explicitly provides that "no
organizational unit or changes in key positions shall be authorized unless provided by law or directed by the
President." Here, the DBM discerned that there is no law authorizing the creation of a Finance Management
Office and a Public Affairs Office in the CHR. Anent CHR's proposal to upgrade twelve positions of Attorney
VI, SG-26 to Director IV, SG-28, and four positions of Director III, SG-27 to Director IV, SG-28, in the Central
Office, the DBM denied the same as this would change the context from support to substantive without actual
change in functions.
This view of the DBM, as the law's designated body to implement and administer a unified compensation
system, is beyond cavil. The interpretation of an administrative government agency, which is tasked to
implement a statute is accorded great respect and ordinarily controls the construction of the courts. In Energy
Regulatory Board v. Court of Appeals,28 we echoed the basic rule that the courts will not interfere in matters
which are addressed to the sound discretion of government agencies entrusted with the regulation of
activities coming under the special technical knowledge and training of such agencies.
To be sure, considering his expertise on matters affecting the nation's coffers, the Secretary of the DBM, as
the President's alter ego, knows from where he speaks inasmuch as he has the front seat view of the
adverse effects of an unwarranted upgrading or creation of positions in the CHR in particular and in the entire
government in general.
WHEREFORE, the petition is GRANTED, the Decision dated 29 November 2001 of the Court of Appeals in
CA-G.R. SP No. 59678 and its Resolution dated 11 September 2002 are hereby REVERSED and SET
ASIDE. The ruling dated 29 March 1999 of the Civil Service Commision-National Capital Region is
REINSTATED. The Commission on Human Rights Resolution No. A98-047 dated 04 September 1998,
Resolution No. A98-055 dated 19 October 1998 and Resolution No. A98-062 dated 17 November 1998
without the approval of the Department of Budget and Management are disallowed. No pronouncement as to
costs.
SO ORDERED.
Puno, Acting C.J., Austria-Martinez, Callejo, Sr., and Tinga, JJ., concur.
EN BANC
G.R. No. 157509 January 18, 2005
AUTOMOTIVE INDUSTRY WORKERS ALLIANCE (AIWA) and its Affiliated Unions: Mitsubishi Motors
Workers Phils. Union; Mitsubishi Motors Phils. Supervisors Union, Nissan Motors Phils., Inc. Workers
Union, Toyota Motors Phils. Workers Union, DURASTEEL WORKERS UNION, FILSHUTTERS
EMPLOYEES & WORKERS UNION, NATIONAL LABOR UNION, PEPSI-COLA SUPERVISORS AND
EMPLOYEES UNION, PSBA FACULTY ASSOCIATION, PLDT SECURITY PERSONNEL UNION,
PUREFOODS UNIFIED LABOR ORGANIZATION, SAMAHANG MANGGAGAWA NG BICUTAN
CONTAINERS CORP., SAMAHANG MANGGAGAWA NG CINDERELLA, SAMAHANG MANGGAGAWA
NG LAURA’S FOOD PRODUCTS, petitioners,
vs.
HON. ALBERTO ROMULO, in his capacity as Executive Secretary, and HON. PATRICIA STO. TOMAS,
in her capacity as Secretary of Labor and Employment, respondents.
DECISION
CHICO-NAZARIO, J.:
Petitioners, composed of ten (10) labor unions, call upon this Court to exercise its power of judicial review to
declare as unconstitutional an executive order assailed to be in derogation of the constitutional doctrine of
separation of powers.
In an original action for certiorari, petitioners invoke their status as labor unions and as taxpayers whose
rights and interests are allegedly violated and prejudiced by Executive Order No. 185 dated 10 March 2003
whereby administrative supervision over the National Labor Relations Commission (NLRC), its regional
branches and all its personnel including the executive labor arbiters and labor arbiters was transferred from
the NLRC Chairperson to the Secretary of Labor and Employment. In support of their position, 1 petitioners
argue that the NLRC -- created by Presidential Decree No. 442, otherwise known as the Labor Code, during
Martial Law – was an integral part of the Department (then Ministry) of Labor and Employment (DOLE) under
the administrative supervision of the Secretary of Justice. During the time of President Corazon C. Aquino,
and while she was endowed with legislative functions after EDSA I, Executive Order No. 292 2 was issued
whereby the NLRC became an agency attached to the DOLE for policy and program coordination and for
administrative supervision. On 02 March 1989, Article 213 of the Labor Code was expressly amended by
Republic Act No. 6715 declaring that the NLRC was to be attached to the DOLE for program and policy
coordination only while the administrative supervision over the NLRC, its regional branches and personnel,
was turned over to the NLRC Chairman. The subject E.O. No. 185, in authorizing the Secretary of Labor to
exercise administrative supervision over the NLRC, its regional branches and personnel, allegedly reverted
to the pre-Rep. Act No. 6715 set-up, amending the latter law which only Congress can do.
The respondents herein, as represented by the Office of the Solicitor General, opposed the petition on
procedural3and substantive4 grounds. Procedurally, it is alleged that the petition does not pose an actual
case or controversy upon which judicial review may be exercised as petitioners have not specifically cited
how E.O. No. 185 has prejudiced or threatened to prejudice their rights and existence as labor unions and as
taxpayers. Closely intertwined therewith, respondents further argue that petitioners have no locus standi to
assail the validity of E.O. No. 185, not even in their capacity as taxpayers, considering that labor unions are
exempt from paying taxes, citing Sec. 30 of the Tax Reform Act of 1997. Even assuming that their individual
members are taxpayers, respondents maintain that a taxpayer suit will not prosper as E.O. No. 185 does not
require additional appropriation for its implementation. As the petition can be decided without passing on the
validity of the subject executive order, respondents conclude that the same should be forthwith dismissed.
Even on the merits, respondents advance the view that the petition must fail as the administrative
supervision granted by the Labor Code to the NLRC Chairman over the NLRC, its regional branches and
personnel, does not place them beyond the President’s broader power of control and supervision, a power
conferred no less than by the Constitution in Section 17, Article VII thereof. Thus, in the exercise of the
President’s power of control and supervision, he can generally oversee the operations of the NLRC, its
regional branches and personnel thru his alter ego, the Secretary of Labor, pursuant to the doctrine of
qualified political agency.
In their Reply,5 petitioners affirm their locus standi contending that they are suing for and in behalf of their
members – estimated to be more or less fifty thousand (50,000) workers – who are the real parties to be
affected by the resolution of this Court. They likewise maintain that they are suing in behalf of the employees
of the NLRC who have pending cases for dismissal. Thus, possessed of the necessary standing, petitioners
theorize that the issue before this Court must necessarily be decided as it involves an act of the Chief
Executive amending a provision of law.
For clarity, E.O. No. 185 is hereby quoted:
EXECUTIVE ORDER NO. 185
AUTHORIZING THE SECRETARY OF LABOR AND EMPLOYMENT TO EXERCISE ADMINISTRATIVE

SUPERVISION OVER THE NATIONAL LABOR RELATIONS COMMISSION
WHEREAS, Section 17, Article VII of the Constitution provides that the President shall have control of all
executive departments, bureaus and offices and shall ensure that the laws be faithfully executed;
WHEREAS, the National Labor Relations Commission (NLRC) which was created by virtue of Presidential
Decree No. 442, otherwise known as the "Labor Code of the Philippines," is an agency under the Executive
Department and was originally envisaged as being an integral part of the Department (then Ministry) of Labor
and Employment (DOLE) under the administrative supervision of the Secretary of Labor and Employment
("Secretary of Labor");
WHEREAS, upon the issuance of Executive Order No. 292, otherwise known as the "Revised Administrative
Code of 1987" (the "Administrative Code"), the NLRC, by virtue of Section 25, Chapter 6, Title VII, Book IV
thereof, became an agency attached to the DOLE for policy and program coordination and administrative
supervision;
WHEREAS, Article 213 of the Labor Code and Section 25, Chapter 6, Title VII, Book IV of the Administrative
Code were amended by Republic Act. No. 6715 approved on March 2, 1989, which provides that the NLRC
shall be attached to the DOLE for program and policy coordination only and transferred administrative
supervision over the NLRC, all its regional branches and personnel to the NLRC Chairman;
WHEREAS, Section 16, Article III of the Constitution guarantees the right of all persons to a speedy
disposition of their cases before all judicial, quasi-judicial and administrative bodies;
WHEREAS, the Secretary of Labor, after evaluating the NLRC’s performance record in the last five (5) years,
including the rate of disposition of pending cases before it, has informed the President that there is a need to
expedite the disposition of labor cases pending before the NLRC and all its regional and sub-regional
branches or provincial extension units and initiate potent measures to prevent graft and corruption therein so
as to reform its systems and personnel, as well as infuse the organization with a sense of public service in
consonance with the imperative of change for the greater interest of the people;
WHEREAS, after consultations with the relevant sectors, the Secretary of Labor has recommended that the
President, pursuant to her powers under the Constitution and existing laws, authorize the Secretary of Labor
to exercise administrative supervision over the NLRC and all its regional and sub-regional branches or
provincial extension units with the objective of improving the rate of disposition of pending cases and institute
adequate measures for the prevention of graft and corruption within the said agency;
NOW, THEREFORE, I, GLORIA MACAPAGAL ARROYO, President of the Republic of the Philippines, by
virtue of the powers vested in me by the Constitution and existing laws, do hereby order:
SECTION 1. Authority To Exercise Administrative Supervision. – The Secretary of Labor is hereby

authorized to exercise administrative supervision over the NLRC, its regional branches and all its personnel,
including the Executive Labor Arbiters and Labor Arbiters, with the objective of improving the rate of
disposition of cases pending before it and its regional and sub-regional branches or provincial extension units
and to institute adequate measures for the prevention of graft and corruption within the said agency.
For this purpose, the Secretary of Labor shall, among others:
a. Generally oversee the operations of the NLRC and its regional and sub-regional branches or
provincial extension units for the purpose of ensuring that cases pending before them are decided
or resolved expeditiously;
b. Require the submission of reports as the Secretary of Labor may deem necessary;
c. Initiate measures within the agency to prevent graft and corruption, including but not limited to,
the conduct of management audits, performance evaluations and inspections to determine
compliance with established policies, standards and guidelines;
d. To take such action as may be necessary for the proper performance of official functions,
including rectification of violations, abuses and other forms of mal-administration; and
e. Investigate, on its own or upon complaint, matters involving disciplinary action against any of the
NLRC’s personnel, including Presidential appointees, in accordance with existing laws, rules and
regulations. After completing his/her investigation, the Secretary of Labor shall submit a report to
the President on the investigation conducted with a recommendation as to the penalty to be
imposed or other action to be taken, including referral to the Presidential Anti-Graft Commission
(PAGC), the Office of the Ombudsman or any other office, committee, commission, agency,
department, instrumentality or branch of the government for appropriate action.
The authority conferred herein upon the Secretary of Labor shall not extend to the power to review, reverse,
revise, or modify the decisions of the NLRC in the exercise of its quasi-judicial functions (cf. Section 38(2)
(b), Chapter 7, Book IV, Administrative Code).
SECTION 2. Report to the Secretary of Labor. – The NLRC, through its Chairman, shall submit a report to
the Secretary of Labor within thirty (30) days from issuance of this Executive Order, on the following matters:
a. Performance Report/Audit for the last five (5) years, including list of pending cases and cases
disposed of within the said period by the NLRC en banc, by Division and by the Labor Arbiters in
each of its regional and sub-regional branches or provincial extension units;
b. Detailed Master Plan on how to liquidate its backlog of cases with clear timetables to clean up its
dockets within six (6) months from the issuance hereof;
c. Complete inventory of its assets and list of personnel indicating their present positions and
stations; and
d. Such other matters as may be required by the Secretary of Labor.
SECTION 3. Rules and Regulations. – The Secretary of Labor, in consultation with the Chairman of the
NLRC, is hereby authorized to issue rules and regulations for the effective implementation of the provisions
of this Executive Order.
SECTION 4. Repealing Clause. All laws, executive issuances, rules and regulations or parts thereof which
are inconsistent with the provisions of this Executive Order are hereby repealed, amended, or modified
accordingly.
SECTION 5. Effectivity. – This Executive Order shall take effect immediately upon the completion of its
publication in the Official Gazette or in a newspaper of general circulation in the country.
City of Manila, March 10, 2003.6
The constitutionality of a governmental act having been challenged, it comes as no surprise that the first line
of defense is to question the standing of petitioners and the justiciability of herein case.
It is hornbook doctrine that the exercise of the power of judicial review requires the concurrence of the
following requisites, namely: (1) the existence of an appropriate case; (2) an interest personal and substantial
by the party raising the constitutional question; (3) the plea that the function be exercised at the earliest
opportunity; and (4) the necessity that the constitutional question be passed upon in order to decide the
case.71awphi1.nét
As correctly pointed out by respondents, judicial review cannot be exercised in vacuo. The function of the
courts is to determine controversies between litigants and not to give advisory opinions. 8 The power of
judicial review can only be exercised in connection with a bona fide case or controversy which involves the
statute sought to be reviewed.9
Even with the presence of an actual case or controversy, the Court may refuse to exercise judicial review
unless the constitutional question is brought before it by a party having the requisite standing to challenge
it.10 Legal standing or locus standi is defined as a "personal and substantial interest in the case such that the
party has sustained or will sustain direct injury as a result of the governmental act that is being
challenged."11 For a citizen to have standing, he must establish that he has suffered some actual or
threatened injury as a result of the allegedly illegal conduct of the government; the injury is fairly traceable to
the challenged action; and the injury is likely to be redressed by a favorable action. 12
Petitioners have not shown that they have sustained or are in danger of sustaining any personal injury
attributable to the enactment of E.O. No. 185. As labor unions representing their members, it cannot be said
that E.O. No. 185 will prejudice their rights and interests considering that the scope of the authority conferred
upon the Secretary of Labor does not extend to the power to review, reverse, revise or modify the decisions
of the NLRC in the exercise of its quasi-judicial functions.13 Thus, only NLRC personnel who may find
themselves the subject of the Secretary of Labor’s disciplinary authority, conferred by Section 1(d) of the
subject executive order, may be said to have a direct and specific interest in raising the substantive issue
herein. Moreover, and if at all, only Congress, and not petitioners, can claim any injury14 from the alleged
executive encroachment of the legislative function to amend, modify and/or repeal laws.
Neither can standing be conferred on petitioners as taxpayers since petitioners have not established
disbursement of public funds in contravention of law or the Constitution.15 A taxpayer’s suit is properly
brought only when there is an exercise of the spending or taxing power of Congress.16 As correctly pointed
out by respondents, E.O. No. 185 does not even require for its implementation additional appropriation.
All told, if we were to follow the strict rule on locus standi, this petition should be forthwith dismissed on that
score. The rule on standing, however, is a matter of procedure, hence, can be relaxed for nontraditional
plaintiffs like ordinary citizens, taxpayers and legislators when the public interest so requires, such as when
the matter is of transcendental importance, of overarching significance to society, or of paramount public
interest.171awphi1.nét
The question is, does the issue posed in this petition meet the exacting standard required for this Court to
take the liberal approach and recognize the standing of herein petitioners?
The instant petition fails to persuade us.
The subject matter of E.O. No. 185 is the grant of authority by the President to the Secretary of Labor to
exercise administrative supervision over the NLRC, its regional branches and all its personnel, including the
Executive Labor Arbiters and Labor Arbiters. Its impact, sans the challenge to its constitutionality, is thereby
limited to the departments to which it is addressed. Taking our cue from the early case of Olsen v. Herstein
and Rafferty,18 the subject executive order can be considered as nothing more or less than a command from
a superior to an inferior. It creates no relation except between the official who issued it and the officials who
received it. It has for its object simply the efficient and economical administration of the affairs of the
department to which it is issued in accordance with the law governing the subject matter. Administrative in its
nature, the subject order does not pass beyond the limits of the departments to which it is directed, hence, it
has not created any rights in third persons, not even in the fifty thousand or so union members being
represented by petitioners who may or may not have pending cases before the labor arbiters or the NLRC.
In fine, considering that the governmental act being questioned has a limited reach, its impact confined to
corridors of the executive department, this is not one of those exceptional occasions where the Court is
justified in sweeping aside a critical procedural requirement, rooted as it is in the constitutionally enshrined
principle of separation of powers. As succinctly put by Mr. Justice Reynato S. Puno in his dissenting opinion
in the first Kilosbayan case:19
. . . [C]ourts are neither free to decide all kinds of cases dumped into their laps nor are they free to open their
doors to all parties or entities claiming a grievance. The rationale for this constitutional requirement of locus
standi is by no means trifle. It is intended "to assure a vigorous adversary presentation of the case, and,
perhaps more importantly to warrant the judiciary’s overruling the determination of a coordinate,
democratically elected organ of government."20 It thus goes to the very essence of representative
democracies.
...
A lesser but not insignificant reason for screening the standing of persons who desire to litigate constitutional
issues is economic in character. Given the sparseness of our resources, the capacity of courts to render
efficient judicial service to our people is severely limited. For courts to indiscriminately open their doors to all
types of suits and suitors is for them to unduly overburden their dockets, and ultimately render themselves
ineffective dispensers of justice. To be sure, this is an evil that clearly confronts our judiciary today.
All things considered, whether or not E.O. No. 185 is indeed unconstitutional will have to await the proper
party in a proper case to assail its validity.
WHEREFORE, premises considered, the instant petition dated 27 March 2003 is hereby DISMISSED for
lack of merit. No costs.
SO ORDERED.
Puno, (Acting C.J.), Panganiban, Quisumbing, Ynares-Santiago, Sandoval-Gutierrez, Carpio, Austria-

Martinez, Corona, Carpio-Morales, Callejo, Sr., Azcuna, Tinga, and Garcia, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. L-63915 April 24, 1985
LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR

BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners,
vs.
HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON. JOAQUIN
VENUS, in his capacity as Deputy Executive Assistant to the President , MELQUIADES P. DE LA
CRUZ, in his capacity as Director, Malacañang Records Office, and FLORENDO S. PABLO, in his
capacity as Director, Bureau of Printing, respondents.
ESCOLIN, J.:
Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6,
Article IV of the 1973 Philippine Constitution, 1 as well as the principle that laws to be valid and enforceable
must be published in the Official Gazette or otherwise effectively promulgated, petitioners seek a writ of
mandamus to compel respondent public officials to publish, and/or cause the publication in the Official
Gazette of various presidential decrees, letters of instructions, general orders, proclamations, executive
orders, letter of implementation and administrative orders.
Specifically, the publication of the following presidential issuances is sought:
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234,
265, 286, 298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406,
415, 427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594,
599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030,
1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279, 1300, 1644,
1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155,
161, 173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228,
231-239, 241-245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293,
297-299, 301-303, 309, 312-315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370, 382,
385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498, 501, 399, 527, 561, 576,
587, 594, 599, 600, 602, 609, 610, 611, 612, 615, 641, 642, 665, 702, 712-713, 726,
837-839, 878-879, 881, 882, 939-940, 964,997,1149-1178,1180-1278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529,
1532, 1535, 1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-
1609, 1612-1628, 1630-1649, 1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-
1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800, 1802-
1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-1832, 1835-1836, 1839-
1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870, 1876-1889,
1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 2030-
2044, 2046-2145, 2147-2161, 2163-2244.
e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507,
509-510, 522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568,
570, 574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703, 705-707, 712-786, 788-
852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92,
94, 95, 107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.
The respondents, through the Solicitor General, would have this case dismissed outright on the ground that
petitioners have no legal personality or standing to bring the instant petition. The view is submitted that in the
absence of any showing that petitioners are personally and directly affected or prejudiced by the alleged non-
publication of the presidential issuances in question 2 said petitioners are without the requisite legal
personality to institute this mandamus proceeding, they are not being "aggrieved parties" within the meaning
of Section 3, Rule 65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.—When any tribunal, corporation, board or person

unlawfully neglects the performance of an act which the law specifically enjoins as a duty
resulting from an office, trust, or station, or unlawfully excludes another from the use a rd
enjoyment of a right or office to which such other is entitled, and there is no other plain,
speedy and adequate remedy in the ordinary course of law, the person aggrieved
thereby may file a verified petition in the proper court alleging the facts with certainty and
praying that judgment be rendered commanding the defendant, immediately or at some
other specified time, to do the act required to be done to Protect the rights of the
petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful
acts of the defendant.
Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its
object is to compel the performance of a public duty, they need not show any specific interest for their
petition to be given due course.
The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor
General, 3 this Court held that while the general rule is that "a writ of mandamus would be granted to a
private individual only in those cases where he has some private or particular interest to be subserved, or
some particular right to be protected, independent of that which he holds with the public at large," and "it is
for the public officers exclusively to apply for the writ when public rights are to be subserved [Mithchell vs.
Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of public right and the object of the
mandamus is to procure the enforcement of a public duty, the people are regarded as the real party in
interest and the relator at whose instigation the proceedings are instituted need not show that he has any
legal or special interest in the result, it being sufficient to show that he is a citizen and as such interested in
the execution of the laws [High, Extraordinary Legal Remedies, 3rd ed., sec. 431].
Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party to
the mandamus proceedings brought to compel the Governor General to call a special election for the position
of municipal president in the town of Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T.
Trent said:
We are therefore of the opinion that the weight of authority supports the proposition that
the relator is a proper party to proceedings of this character when a public right is sought
to be enforced. If the general rule in America were otherwise, we think that it would not
be applicable to the case at bar for the reason 'that it is always dangerous to apply a
general rule to a particular case without keeping in mind the reason for the rule, because,
if under the particular circumstances the reason for the rule does not exist, the rule itself
is not applicable and reliance upon the rule may well lead to error'
No reason exists in the case at bar for applying the general rule insisted upon by counsel
for the respondent. The circumstances which surround this case are different from those
in the United States, inasmuch as if the relator is not a proper party to these proceedings
no other person could be, as we have seen that it is not the duty of the law officer of the
Government to appear and represent the people in cases of this character.
The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned case
apply squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein is a public
right recognized by no less than the fundamental law of the land. If petitioners were not allowed to institute
this proceeding, it would indeed be difficult to conceive of any other person to initiate the same, considering
that the Solicitor General, the government officer generally empowered to represent the people, has entered
his appearance for respondents in this case.
Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the
effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus submitted that
since the presidential issuances in question contain special provisions as to the date they are to take effect,
publication in the Official Gazette is not indispensable for their effectivity. The point stressed is anchored on
Article 2 of the Civil Code:
Art. 2. Laws shall take effect after fifteen days following the completion of their
publication in the Official Gazette, unless it is otherwise provided, ...
The interpretation given by respondent is in accord with this Court's construction of said article. In a long line
of decisions,4 this Court has ruled that publication in the Official Gazette is necessary in those cases where
the legislation itself does not provide for its effectivity date-for then the date of publication is material for
determining its date of effectivity, which is the fifteenth day following its publication-but not when the law itself
provides for the date when it goes into effect.
Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws with the
fact of publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is
easily reached that said Article 2 does not preclude the requirement of publication in the Official Gazette,
even if the law itself provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638
provides as follows:
Section 1. There shall be published in the Official Gazette [1] all important legisiative acts
and resolutions of a public nature of the, Congress of the Philippines; [2] all executive
and administrative orders and proclamations, except such as have no general
applicability; [3] decisions or abstracts of decisions of the Supreme Court and the Court
of Appeals as may be deemed by said courts of sufficient importance to be so published;
[4] such documents or classes of documents as may be required so to be published by
law; and [5] such documents or classes of documents as the President of the Philippines
shall determine from time to time to have general applicability and legal effect, or which
he may authorize so to be published. ...
The clear object of the above-quoted provision is to give the general public adequate notice of the various
laws which are to regulate their actions and conduct as citizens. Without such notice and publication, there
would be no basis for the application of the maxim "ignorantia legis non excusat." It would be the height of
injustice to punish or otherwise burden a citizen for the transgression of a law of which he had no notice
whatsoever, not even a constructive one.
Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so
vital significance that at this time when the people have bestowed upon the President a power heretofore
enjoyed solely by the legislature. While the people are kept abreast by the mass media of the debates and
deliberations in the Batasan Pambansa—and for the diligent ones, ready access to the legislative records—
no such publicity accompanies the law-making process of the President. Thus, without publication, the
people have no means of knowing what presidential decrees have actually been promulgated, much less a
definite way of informing themselves of the specific contents and texts of such decrees. As the Supreme
Court of Spain ruled: "Bajo la denominacion generica de leyes, se comprenden tambien los reglamentos,
Reales decretos, Instrucciones, Circulares y Reales ordines dictadas de conformidad con las mismas por el
Gobierno en uso de su potestad.5
The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the Official
Gazette ... ." The word "shall" used therein imposes upon respondent officials an imperative duty. That duty
must be enforced if the Constitutional right of the people to be informed on matters of public concern is to be
given substance and reality. The law itself makes a list of what should be published in the Official Gazette.
Such listing, to our mind, leaves respondents with no discretion whatsoever as to what must be included or
excluded from such publication.
The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated by
law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for their violation or
otherwise impose a burden or. the people, such as tax and revenue measures, fall within this category. Other
presidential issuances which apply only to particular persons or class of persons such as administrative and
executive orders need not be published on the assumption that they have been circularized to all
concerned. 6
It is needless to add that the publication of presidential issuances "of a public nature" or "of general
applicability" is a requirement of due process. It is a rule of law that before a person may be bound by law, he
must first be officially and specifically informed of its contents. As Justice Claudio Teehankee said in Peralta
vs. COMELEC 7:
In a time of proliferating decrees, orders and letters of instructions which all form part of
the law of the land, the requirement of due process and the Rule of Law demand that the
Official Gazette as the official government repository promulgate and publish the texts of
all such decrees, orders and instructions so that the people may know where to obtain
their official and specific contents.
The Court therefore declares that presidential issuances of general application, which have not been
published, shall have no force and effect. Some members of the Court, quite apprehensive about the
possible unsettling effect this decision might have on acts done in reliance of the validity of those presidential
decrees which were published only during the pendency of this petition, have put the question as to whether
the Court's declaration of invalidity apply to P.D.s which had been enforced or implemented prior to their
publication. The answer is all too familiar. In similar situations in the past this Court had taken the pragmatic
and realistic course set forth in Chicot County Drainage District vs. Baxter Bank 8 to wit:
The courts below have proceeded on the theory that the Act of Congress, having been
found to be unconstitutional, was not a law; that it was inoperative, conferring no rights
and imposing no duties, and hence affording no basis for the challenged decree. Norton
v. Shelby County, 118 U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559,
566. It is quite clear, however, that such broad statements as to the effect of a
determination of unconstitutionality must be taken with qualifications. The actual
existence of a statute, prior to such a determination, is an operative fact and may have
consequences which cannot justly be ignored. The past cannot always be erased by a
new judicial declaration. The effect of the subsequent ruling as to invalidity may have to
be considered in various aspects-with respect to particular conduct, private and official.
Questions of rights claimed to have become vested, of status, of prior determinations
deemed to have finality and acted upon accordingly, of public policy in the light of the
nature both of the statute and of its previous application, demand examination. These
questions are among the most difficult of those which have engaged the attention of
courts, state and federal and it is manifest from numerous decisions that an all-inclusive
statement of a principle of absolute retroactive invalidity cannot be justified.
Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right of a party under
the Moratorium Law, albeit said right had accrued in his favor before said law was declared unconstitutional
by this Court.
Similarly, the implementation/enforcement of presidential decrees prior to their publication in the Official
Gazette is "an operative fact which may have consequences which cannot be justly ignored. The past cannot
always be erased by a new judicial declaration ... that an all-inclusive statement of a principle of absolute
retroactive invalidity cannot be justified."
From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees
sought by petitioners to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to 1030,
inclusive, 1278, and 1937 to 1939, inclusive, have not been so published. 10 Neither the subject matters nor
the texts of these PDs can be ascertained since no copies thereof are available. But whatever their subject
matter may be, it is undisputed that none of these unpublished PDs has ever been implemented or enforced
by the government. In Pesigan vs. Angeles, 11 the Court, through Justice Ramon Aquino, ruled that
"publication is necessary to apprise the public of the contents of [penal] regulations and make the said
penalties binding on the persons affected thereby. " The cogency of this holding is apparently recognized by
respondent officials considering the manifestation in their comment that "the government, as a matter of
policy, refrains from prosecuting violations of criminal laws until the same shall have been published in the
Official Gazette or in some other publication, even though some criminal laws provide that they shall take
effect immediately.
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished
presidential issuances which are of general application, and unless so published, they shall have no binding
force and effect.
SO ORDERED.
Relova, J., concurs.
Aquino, J., took no part.
Concepcion, Jr., J., is on leave.
EN BANC
G.R. No. 133250 July 9, 2002
FRANCISCO I. CHAVEZ, petitioner,

vs.
PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT
CORPORATION, respondents.
CARPIO, J.:
This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a temporary
restraining order. The petition seeks to compel the Public Estates Authority ("PEA" for brevity) to disclose all
facts on PEA's then on-going renegotiations with Amari Coastal Bay and Development Corporation ("AMARI"
for brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA from signing a new
agreement with AMARI involving such reclamation.
The Facts
On November 20, 1973, the government, through the Commissioner of Public Highways, signed a contract
with the Construction and Development Corporation of the Philippines ("CDCP" for brevity) to reclaim certain
foreshore and offshore areas of Manila Bay. The contract also included the construction of Phases I and II of
the Manila-Cavite Coastal Road. CDCP obligated itself to carry out all the works in consideration of fifty
percent of the total reclaimed land.
On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084 creating
PEA. PD No. 1084 tasked PEA "to reclaim land, including foreshore and submerged areas," and "to develop,
improve, acquire, x x x lease and sell any and all kinds of lands."1 On the same date, then President Marcos
issued Presidential Decree No. 1085 transferring to PEA the "lands reclaimed in the foreshore and offshore
of the Manila Bay"2 under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).
On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its contract
with CDCP, so that "[A]ll future works in MCCRRP x x x shall be funded and owned by PEA." Accordingly,
PEA and CDCP executed a Memorandum of Agreement dated December 29, 1981, which stated:
"(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP as
may be agreed upon by the parties, to be paid according to progress of works on a unit price/lump
sum basis for items of work to be agreed upon, subject to price escalation, retention and other
terms and conditions provided for in Presidential Decree No. 1594. All the financing required for
such works shall be provided by PEA.
xxx
(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in
favor of PEA, all of the rights, title, interest and participation of CDCP in and to all the areas of land
reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have not yet been sold,
transferred or otherwise disposed of by CDCP as of said date, which areas consist of
approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473) square meters in the
Financial Center Area covered by land pledge No. 5 and approximately Three Million Three
Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed
areas at varying elevations above Mean Low Water Level located outside the Financial Center
Area and the First Neighborhood Unit."3
On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting and
transferring to PEA "the parcels of land so reclaimed under the Manila-Cavite Coastal Road and Reclamation
Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand eight hundred ninety
four (1,915,894) square meters." Subsequently, on April 9, 1988, the Register of Deeds of the Municipality of
Parañaque issued Transfer Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the
three reclaimed islands known as the "Freedom Islands" located at the southern portion of the Manila-Cavite
Coastal Road, Parañaque City. The Freedom Islands have a total land area of One Million Five Hundred
Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square meters or 157.841 hectares.
On April 25, 1995, PEA entered into a Joint Venture Agreement ("JVA" for brevity) with AMARI, a private
corporation, to develop the Freedom Islands. The JVA also required the reclamation of an additional 250
hectares of submerged areas surrounding these islands to complete the configuration in the Master
Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA
through negotiation without public bidding.4 On April 28, 1995, the Board of Directors of PEA, in its
Resolution No. 1245, confirmed the JVA.5 On June 8, 1995, then President Fidel V. Ramos, through then
Executive Secretary Ruben Torres, approved the JVA.6
On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the Senate
and denounced the JVA as the "grandmother of all scams." As a result, the Senate Committee on
Government Corporations and Public Enterprises, and the Committee on Accountability of Public Officers
and Investigations, conducted a joint investigation. The Senate Committees reported the results of their
investigation in Senate Committee Report No. 560 dated September 16, 1997. 7 Among the conclusions of
their report are: (1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the
public domain which the government has not classified as alienable lands and therefore PEA cannot alienate
these lands; (2) the certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is
illegal.
On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No. 365
creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate Committee
Report No. 560. The members of the Legal Task Force were the Secretary of Justice, 8 the Chief Presidential
Legal Counsel,9 and the Government Corporate Counsel.10 The Legal Task Force upheld the legality of the
JVA, contrary to the conclusions reached by the Senate Committees.11
On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were on-going
renegotiations between PEA and AMARI under an order issued by then President Fidel V. Ramos. According
to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio
Cruz composed the negotiating panel of PEA.
On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for the
Issuance of a Temporary Restraining Order and Preliminary Injunction docketed as G.R. No. 132994 seeking
to nullify the JVA. The Court dismissed the petition "for unwarranted disregard of judicial hierarchy, without
prejudice to the refiling of the case before the proper court."12
On April 27, 1998, petitioner Frank I. Chavez ("Petitioner" for brevity) as a taxpayer, filed the instant Petition
for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and Temporary Restraining
Order. Petitioner contends the government stands to lose billions of pesos in the sale by PEA of the
reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the terms of any renegotiation of the
JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987 Constitution on the right of the
people to information on matters of public concern. Petitioner assails the sale to AMARI of lands of the public
domain as a blatant violation of Section 3, Article XII of the 1987 Constitution prohibiting the sale of alienable
lands of the public domain to private corporations. Finally, petitioner asserts that he seeks to enjoin the loss
of billions of pesos in properties of the State that are of public dominion.
After several motions for extension of time,13 PEA and AMARI filed their Comments on October 19, 1998 and
June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion: (a) to
require PEA to submit the terms of the renegotiated PEA-AMARI contract; (b) for issuance of a temporary
restraining order; and (c) to set the case for hearing on oral argument. Petitioner filed a Reiterative Motion for
Issuance of a TRO dated May 26, 1999, which the Court denied in a Resolution dated June 22, 1999.
In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the parties to
file their respective memoranda.
On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement ("Amended JVA," for
brevity). On May 28, 1999, the Office of the President under the administration of then President Joseph E.
Estrada approved the Amended JVA.
Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on
"constitutional and statutory grounds the renegotiated contract be declared null and void."14
The Issues
The issues raised by petitioner, PEA15 and AMARI16 are as follows:
I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND
ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;
II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE
PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;
III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF

ADMINISTRATIVE REMEDIES;
IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;
V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL

INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;
VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR
THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE
RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND
VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF
WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY
DISADVANTAGEOUS TO THE GOVERNMENT.
The Court's Ruling
First issue: whether the principal reliefs prayed for in the petition are moot and academic because of
subsequent events.
The petition prays that PEA publicly disclose the "terms and conditions of the on-going negotiations for a new
agreement." The petition also prays that the Court enjoin PEA from "privately entering into, perfecting and/or
executing any new agreement with AMARI."
PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on June
21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed upon in the
renegotiations. Thus, PEA has satisfied petitioner's prayer for a public disclosure of the renegotiations.
Likewise, petitioner's prayer to enjoin the signing of the Amended JVA is now moot because PEA and AMARI
have already signed the Amended JVA on March 30, 1999. Moreover, the Office of the President has
approved the Amended JVA on May 28, 1999.
Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking the
signing and approval of the Amended JVA before the Court could act on the issue. Presidential approval
does not resolve the constitutional issue or remove it from the ambit of judicial review.
We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President cannot
operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still to implement
the Amended JVA. The prayer to enjoin the signing of the Amended JVA on constitutional grounds
necessarily includes preventing its implementation if in the meantime PEA and AMARI have signed one in
violation of the Constitution. Petitioner's principal basis in assailing the renegotiation of the JVA is its violation
of Section 3, Article XII of the Constitution, which prohibits the government from alienating lands of the public
domain to private corporations. If the Amended JVA indeed violates the Constitution, it is the duty of the
Court to enjoin its implementation, and if already implemented, to annul the effects of such unconstitutional
contract.
The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and
ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a single
private corporation. It now becomes more compelling for the Court to resolve the issue to insure the
government itself does not violate a provision of the Constitution intended to safeguard the national
patrimony. Supervening events, whether intended or accidental, cannot prevent the Court from rendering a
decision if there is a grave violation of the Constitution. In the instant case, if the Amended JVA runs counter
to the Constitution, the Court can still prevent the transfer of title and ownership of alienable lands of the
public domain in the name of AMARI. Even in cases where supervening events had made the cases moot,
the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles
to guide the bench, bar, and the public.17
Also, the instant petition is a case of first impression. All previous decisions of the Court involving Section 3,
Article XII of the 1987 Constitution, or its counterpart provision in the 1973
Constitution,18 covered agricultural lands sold to private corporations which acquired the lands from private
parties. The transferors of the private corporations claimed or could claim the right to judicial confirmation
of their imperfect titles19 under Title II of Commonwealth Act. 141 ("CA No. 141" for brevity). In the instant
case, AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and submerged areas
for non-agricultural purposes by purchase under PD No. 1084 (charter of PEA) and Title III of CA No. 141.
Certain undertakings by AMARI under the Amended JVA constitute the consideration for the purchase.
Neither AMARI nor PEA can claim judicial confirmation of their titles because the lands covered by the
Amended JVA are newly reclaimed or still to be reclaimed. Judicial confirmation of imperfect title requires
open, continuous, exclusive and notorious occupation of agricultural lands of the public domain for at least
thirty years since June 12, 1945 or earlier. Besides, the deadline for filing applications for judicial
confirmation of imperfect title expired on December 31, 1987.20
Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because of the
possible transfer at any time by PEA to AMARI of title and ownership to portions of the reclaimed lands.
Under the Amended JVA, PEA is obligated to transfer to AMARI the latter's seventy percent proportionate
share in the reclaimed areas as the reclamation progresses. The Amended JVA even allows AMARI to
mortgage at any time the entire reclaimed area to raise financing for the reclamation project.21
Second issue: whether the petition merits dismissal for failing to observe the principle governing the
hierarchy of courts.
PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court. The
principle of hierarchy of courts applies generally to cases involving factual questions. As it is not a trier of
facts, the Court cannot entertain cases involving factual issues. The instant case, however, raises
constitutional issues of transcendental importance to the public.22 The Court can resolve this case without
determining any factual issue related to the case. Also, the instant case is a petition for mandamus which
falls under the original jurisdiction of the Court under Section 5, Article VIII of the Constitution. We resolve to
exercise primary jurisdiction over the instant case.
Third issue: whether the petition merits dismissal for non-exhaustion of administrative remedies.
PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain
information without first asking PEA the needed information. PEA claims petitioner's direct resort to the Court
violates the principle of exhaustion of administrative remedies. It also violates the rule that mandamus may
issue only if there is no other plain, speedy and adequate remedy in the ordinary course of law.
PEA distinguishes the instant case from Tañada v. Tuvera23 where the Court granted the petition for
mandamus even if the petitioners there did not initially demand from the Office of the President the
publication of the presidential decrees. PEA points out that in Tañada, the Executive Department had
an affirmative statutory duty under Article 2 of the Civil Code24 and Section 1 of Commonwealth Act No.
63825 to publish the presidential decrees. There was, therefore, no need for the petitioners in Tañada to
make an initial demand from the Office of the President. In the instant case, PEA claims it has no affirmative
statutory duty to disclose publicly information about its renegotiation of the JVA. Thus, PEA asserts that the
Court must apply the principle of exhaustion of administrative remedies to the instant case in view of the
failure of petitioner here to demand initially from PEA the needed information.
The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation. Under
Section 79 of the Government Auditing Code,26 the disposition of government lands to private parties
requires public bidding. PEA was under a positive legal duty to disclose to the public the terms and
conditions for the sale of its lands. The law obligated PEA to make this public disclosure even without
demand from petitioner or from anyone. PEA failed to make this public disclosure because the original JVA,
like the Amended JVA, was the result of a negotiated contract, not of a public bidding. Considering that
PEA had an affirmative statutory duty to make the public disclosure, and was even in breach of this legal
duty, petitioner had the right to seek direct judicial intervention.
Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative remedies
does not apply when the issue involved is a purely legal or constitutional question. 27 The principal issue in
the instant case is the capacity of AMARI to acquire lands held by PEA in view of the constitutional ban
prohibiting the alienation of lands of the public domain to private corporations. We rule that the principle of
exhaustion of administrative remedies does not apply in the instant case.
Fourth issue: whether petitioner has locus standi to bring this suit
PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his constitutional
right to information without a showing that PEA refused to perform an affirmative duty imposed on PEA by
the Constitution. PEA also claims that petitioner has not shown that he will suffer any concrete injury
because of the signing or implementation of the Amended JVA. Thus, there is no actual controversy requiring
the exercise of the power of judicial review.
The petitioner has standing to bring this taxpayer's suit because the petition seeks to compel PEA to comply
with its constitutional duties. There are two constitutional issues involved here. First is the right of citizens to
information on matters of public concern. Second is the application of a constitutional provision intended to
insure the equitable distribution of alienable lands of the public domain among Filipino citizens. The thrust of
the first issue is to compel PEA to disclose publicly information on the sale of government lands worth billions
of pesos, information which the Constitution and statutory law mandate PEA to disclose. The thrust of the
second issue is to prevent PEA from alienating hundreds of hectares of alienable lands of the public domain
in violation of the Constitution, compelling PEA to comply with a constitutional duty to the nation.
Moreover, the petition raises matters of transcendental importance to the public. In Chavez v. PCGG,28 the
Court upheld the right of a citizen to bring a taxpayer's suit on matters of transcendental importance to the
public, thus -
"Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the Marcoses is
an issue of 'transcendental importance to the public.' He asserts that ordinary taxpayers have a
right to initiate and prosecute actions questioning the validity of acts or orders of government
agencies or instrumentalities, if the issues raised are of 'paramount public interest,' and if they
'immediately affect the social, economic and moral well being of the people.'
Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when the
proceeding involves the assertion of a public right, such as in this case. He invokes several
decisions of this Court which have set aside the procedural matter of locus standi, when the
subject of the case involved public interest.
xxx
In Tañada v. Tuvera, the Court asserted that when the issue concerns a public right and the object
of mandamus is to obtain the enforcement of a public duty, the people are regarded as the real
parties in interest; and because it is sufficient that petitioner is a citizen and as such is interested in
the execution of the laws, he need not show that he has any legal or special interest in the result of
the action. In the aforesaid case, the petitioners sought to enforce their right to be informed on
matters of public concern, a right then recognized in Section 6, Article IV of the 1973 Constitution,
in connection with the rule that laws in order to be valid and enforceable must be published in the
Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing, the
Court declared that the right they sought to be enforced 'is a public right recognized by no less than
the fundamental law of the land.'
Legaspi v. Civil Service Commission, while reiterating Tañada, further declared that 'when a
mandamus proceeding involves the assertion of a public right, the requirement of personal interest
is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the general 'public'
which possesses the right.'
Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been
involved under the questioned contract for the development, management and operation of the
Manila International Container Terminal, 'public interest [was] definitely involved considering the
important role [of the subject contract] . . . in the economic development of the country and the
magnitude of the financial consideration involved.' We concluded that, as a consequence, the
disclosure provision in the Constitution would constitute sufficient authority for upholding the
petitioner's standing.
Similarly, the instant petition is anchored on the right of the people to information and access to
official records, documents and papers — a right guaranteed under Section 7, Article III of the 1987
Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of the satisfaction
of the two basic requisites laid down by decisional law to sustain petitioner's legal standing, i.e. (1)
the enforcement of a public right (2) espoused by a Filipino citizen, we rule that the petition at bar
should be allowed."
We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional rights -
to information and to the equitable diffusion of natural resources - matters of transcendental public
importance, the petitioner has the requisite locus standi.
Fifth issue: whether the constitutional right to information includes official information on on-going
negotiations before a final agreement.
Section 7, Article III of the Constitution explains the people's right to information on matters of public concern
in this manner:
"Sec. 7. 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."
(Emphasis supplied)
The State policy of full transparency in all transactions involving public interest reinforces the people's right to
information on matters of public concern. This State policy is expressed in Section 28, Article II of the
Constitution, thus:
"Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements
a policy of full public disclosure of all its transactions involving public interest." (Emphasis
supplied)
These twin provisions of the Constitution seek to promote transparency in policy-making and in the
operations of the government, as well as provide the people sufficient information to exercise effectively
other constitutional rights. These twin provisions are essential to the exercise of freedom of expression. If the
government does not disclose its official acts, transactions and decisions to citizens, whatever citizens say,
even if expressed without any restraint, will be speculative and amount to nothing. These twin provisions are
also essential to hold public officials "at all times x x x accountable to the people,"29 for unless citizens have
the proper information, they cannot hold public officials accountable for anything. Armed with the right
information, citizens can participate in public discussions leading to the formulation of government policies
and their effective implementation. An informed citizenry is essential to the existence and proper functioning
of any democracy. As explained by the Court in Valmonte v. Belmonte, Jr.30 –
"An essential element of these freedoms is to keep open a continuing dialogue or process of
communication between the government and the people. It is in the interest of the State that the
channels for free political discussion be maintained to the end that the government may perceive
and be responsive to the people's will. Yet, this open dialogue can be effective only to the extent
that the citizenry is informed and thus able to formulate its will intelligently. Only when the
participants in the discussion are aware of the issues and have access to information relating
thereto can such bear fruit."
PEA asserts, citing Chavez v. PCGG,31 that in cases of on-going negotiations the right to information is
limited to "definite propositions of the government." PEA maintains the right does not include access 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'."
Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the closing
of the transaction. To support its contention, AMARI cites the following discussion in the 1986 Constitutional
Commission:
"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 only to reasonable safeguards on the national interest.
Mr. Suarez: Thank you."32 (Emphasis supplied)
AMARI argues there must first be a consummated contract before petitioner can invoke the right. Requiring
government officials to reveal their deliberations at the pre-decisional stage will degrade the quality of
decision-making in government agencies. Government officials will hesitate to express their real sentiments
during deliberations if there is immediate public dissemination of their discussions, putting them under all
kinds of pressure before they decide.
We must first distinguish between information the law on public bidding requires PEA to disclose publicly,
and information the constitutional right to information requires PEA to release to the public. Before the
consummation of the contract, PEA must, on its own and without demand from anyone, disclose to the public
matters relating to the disposition of its property. These include the size, location, technical description and
nature of the property being disposed of, the terms and conditions of the disposition, the parties qualified to
bid, the minimum price and similar information. PEA must prepare all these data and disclose them to the
public at the start of the disposition process, long before the consummation of the contract, because the
Government Auditing Code requires public bidding. If PEA fails to make this disclosure, any citizen can
demand from PEA this information at any time during the bidding process.
Information, however, on on-going evaluation or review of bids or proposals being undertaken by the
bidding or review committee is not immediately accessible under the right to information. While the
evaluation or review is still on-going, there are no "official acts, transactions, or decisions" on the bids or
proposals. However, once the committee makes its official recommendation, there arises a "definite
proposition" on the part of the government. From this moment, the public's right to information attaches,
and any citizen can access all the non-proprietary information leading to such definite proposition. In Chavez
v. PCGG,33 the Court ruled as follows:
"Considering the intent of the framers of the Constitution, we believe 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 need, of course, to observe the same
restrictions on disclosure of information in general, as discussed earlier – such as on matters
involving national security, diplomatic or foreign relations, intelligence and other classified
information." (Emphasis supplied)
Contrary to AMARI's contention, the commissioners of the 1986 Constitutional Commission understood that
the right to information "contemplates inclusion of negotiations leading to the consummation of the
transaction."Certainly, a consummated contract is not a requirement for the exercise of the right to
information. Otherwise, the people can never exercise the right if no contract is consummated, and if one is
consummated, it may be too late for the public to expose its defects.1âwphi1.nêt
Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly
disadvantageous to the government or even illegal, becomes a fait accompli. This negates the State policy of
full transparency on matters of public concern, a situation which the framers of the Constitution could not
have intended. Such a requirement will prevent the citizenry from participating in the public discussion of
any proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We can allow
neither an emasculation of a constitutional right, nor a retreat by the State of its avowed "policy of full
disclosure of all its transactions involving public interest."
The right covers three categories of information which are "matters of public concern," namely: (1) official
records; (2) documents and papers pertaining to official acts, transactions and decisions; and (3) government
research data used in formulating policies. The first category refers to any document that is part of the public
records in the custody of government agencies or officials. The second category refers to documents and
papers recording, evidencing, establishing, confirming, supporting, justifying or explaining official acts,
transactions or decisions of government agencies or officials. The third category refers to research data,
whether raw, collated or processed, owned by the government and used in formulating government policies.
The information that petitioner may access on the renegotiation of the JVA includes evaluation reports,
recommendations, legal and expert opinions, minutes of meetings, terms of reference and other documents
attached to such reports or minutes, all relating to the JVA. However, the right to information does not
compel PEA to prepare lists, abstracts, summaries and the like relating to the renegotiation of the JVA. 34 The
right only affords access to records, documents and papers, which means the opportunity to inspect and
copy them. One who exercises the right must copy the records, documents and papers at his expense. The
exercise of the right is also subject to reasonable regulations to protect the integrity of the public records and
to minimize disruption to government operations, like rules specifying when and how to conduct the
inspection and copying.35
The right to information, however, does not extend to matters recognized as privileged information under the
separation of powers.36 The right does not also apply to information on military and diplomatic secrets,
information affecting national security, and information on investigations of crimes by law enforcement
agencies before the prosecution of the accused, which courts have long recognized as confidential.37 The
right may also be subject to other limitations that Congress may impose by law.
There is no claim by PEA that the information demanded by petitioner is privileged information rooted in the
separation of powers. The information does not cover Presidential conversations, correspondences, or
discussions during closed-door Cabinet meetings which, like internal deliberations of the Supreme Court and
other collegiate courts, or executive sessions of either house of Congress,38 are recognized as confidential.
This kind of information cannot be pried open by a co-equal branch of government. A frank exchange of
exploratory ideas and assessments, free from the glare of publicity and pressure by interested parties, is
essential to protect the independence of decision-making of those tasked to exercise Presidential, Legislative
and Judicial power.39 This is not the situation in the instant case.
We rule, therefore, that the constitutional right to information includes official information on on-going
negotiationsbefore a final contract. The information, however, must constitute definite propositions by the
government and should not cover recognized exceptions like privileged information, military and diplomatic
secrets and similar matters affecting national security and public order. 40 Congress has also prescribed other
limitations on the right to information in several legislations.41
Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed
or to be reclaimed, violate the Constitution.
The Regalian Doctrine
The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine
which holds that the State owns all lands and waters of the public domain. Upon the Spanish conquest of the
Philippines, ownership of all "lands, territories and possessions" in the Philippines passed to the Spanish
Crown.42 The King, as the sovereign ruler and representative of the people, acquired and owned all lands
and territories in the Philippines except those he disposed of by grant or sale to private individuals.
The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the State, in
lieu of the King, as the owner of all lands and waters of the public domain. The Regalian doctrine is the
foundation of the time-honored principle of land ownership that "all lands that were not acquired from the
Government, either by purchase or by grant, belong to the public domain."43 Article 339 of the Civil Code of
1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian doctrine.
Ownership and Disposition of Reclaimed Lands
The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition of
reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission enacted Act No. 1654 which
provided for the lease, but not the sale, of reclaimed lands of the government to corporations and
individuals. Later, on November 29, 1919, the Philippine Legislature approved Act No. 2874, the Public
Land Act, which authorized the lease, but not the sale, of reclaimed lands of the government to
corporations and individuals. On November 7, 1936, the National Assembly passed Commonwealth Act
No. 141, also known as the Public Land Act, which authorized the lease, but not the sale, of reclaimed
lands of the government to corporations and individuals. CA No. 141 continues to this day as the
general law governing the classification and disposition of lands of the public domain.
The Spanish Law of Waters of 1866 and the Civil Code of 1889
Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the maritime
zone of the Spanish territory belonged to the public domain for public use.44 The Spanish Law of Waters of
1866 allowed the reclamation of the sea under Article 5, which provided as follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by
the provinces, pueblos or private persons, with proper permission, shall become the property of the
party constructing such works, unless otherwise provided by the terms of the grant of authority."
Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the
reclamation, provided the government issued the necessary permit and did not reserve ownership of the
reclaimed land to the State.
Article 339 of the Civil Code of 1889 defined property of public dominion as follows:
"Art. 339. Property of public dominion is –
1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed
by the State, riverbanks, shores, roadsteads, and that of a similar character;
2. That belonging exclusively to the State which, without being of general public use, is employed
in some public service, or in the development of the national wealth, such as walls, fortresses, and
other works for the defense of the territory, and mines, until granted to private individuals."
Property devoted to public use referred to property open for use by the public. In contrast, property devoted
to public service referred to property used for some specific public service and open only to those authorized
to use the property.
Property of public dominion referred not only to property devoted to public use, but also to property not so
used but employed to develop the national wealth. This class of property constituted property of public
dominion although employed for some economic or commercial activity to increase the national wealth.
Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into private
property, to wit:
"Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of
the territory, shall become a part of the private property of the State."
This provision, however, was not self-executing. The legislature, or the executive department pursuant to
law, must declare the property no longer needed for public use or territorial defense before the government
could lease or alienate the property to private parties.45
Act No. 1654 of the Philippine Commission
On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed
and foreshore lands. The salient provisions of this law were as follows:
"Section 1. The control and disposition of the foreshore as defined in existing law, and the title
to all Government or public lands made or reclaimed by the Government by dredging or
filling or otherwise throughout the Philippine Islands, shall be retained by the
Government without prejudice to vested rights and without prejudice to rights conceded to the City
of Manila in the Luneta Extension.
Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or
reclaimed by the Government by dredging or filling or otherwise to be divided into lots or blocks,
with the necessary streets and alleyways located thereon, and shall cause plats and plans of such
surveys to be prepared and filed with the Bureau of Lands.
(b) Upon completion of such plats and plans the Governor-General shall give notice to the
public that such parts of the lands so made or reclaimed as are not needed for public
purposes will be leased for commercial and business purposes, x x x.
xxx
(e) The leases above provided for shall be disposed of to the highest and best
bidder therefore, subject to such regulations and safeguards as the Governor-General may by
executive order prescribe." (Emphasis supplied)
Act No. 1654 mandated that the government should retain title to all lands reclaimed by the
government. The Act also vested in the government control and disposition of foreshore lands. Private
parties could lease lands reclaimed by the government only if these lands were no longer needed for public
purpose. Act No. 1654 mandated public bidding in the lease of government reclaimed lands. Act No. 1654
made government reclaimed lands sui generis in that unlike other public lands which the government could
sell to private parties, these reclaimed lands were available only for lease to private parties.
Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did not
prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Lands
reclaimed from the sea by private parties with government permission remained private lands.
Act No. 2874 of the Philippine Legislature
On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.46 The salient
provisions of Act No. 2874, on reclaimed lands, were as follows:
"Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture

and Natural Resources, shall from time to time classify the lands of the public domain into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands, x x x.
Sec. 7. For the purposes of the government and disposition of alienable or disposable public
lands, the Governor-General, upon recommendation by the Secretary of Agriculture and
Natural Resources, shall from time to time declare what lands are open to disposition or
concession under this Act."
Sec. 8. Only those lands shall be declared open to disposition or concession which have
been officially delimited or classified x x x.
xxx
Sec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall
be classified as suitable for residential purposes or for commercial, industrial, or other
productive purposes other than agricultural purposes, and shall be open to disposition or
concession, shall be disposed of under the provisions of this chapter, and not otherwise.
Sec. 56. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
x x x.
Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed
of to private parties by lease only and not otherwise, as soon as the Governor-General, upon
recommendation by the Secretary of Agriculture and Natural Resources, shall declare that
the same are not necessary for the public service and are open to disposition under this
chapter. The lands included in class (d) may be disposed of by sale or lease under the
provisions of this Act." (Emphasis supplied)
Section 6 of Act No. 2874 authorized the Governor-General to "classify lands of the public domain into x x x
alienable or disposable"47 lands. Section 7 of the Act empowered the Governor-General to "declare what
lands are open to disposition or concession." Section 8 of the Act limited alienable or disposable lands only
to those lands which have been "officially delimited and classified."
Section 56 of Act No. 2874 stated that lands "disposable under this title48 shall be classified" as government
reclaimed, foreshore and marshy lands, as well as other lands. All these lands, however, must be suitable for
residential, commercial, industrial or other productive non-agricultural purposes. These provisions vested
upon the Governor-General the power to classify inalienable lands of the public domain into disposable lands
of the public domain. These provisions also empowered the Governor-General to classify further such
disposable lands of the public domain into government reclaimed, foreshore or marshy lands of the public
domain, as well as other non-agricultural lands.
Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain classified as
government reclaimed, foreshore and marshy lands "shall be disposed of to private parties by lease only
and not otherwise." The Governor-General, before allowing the lease of these lands to private parties, must
formally declare that the lands were "not necessary for the public service." Act No. 2874 reiterated the State
policy to lease and not to sell government reclaimed, foreshore and marshy lands of the public domain, a
policy first enunciated in 1907 in Act No. 1654. Government reclaimed, foreshore and marshy lands
remained sui generis, as the only alienable or disposable lands of the public domain that the government
could not sell to private parties.
The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy public lands
for non-agricultural purposes retain their inherent potential as areas for public service. This is the reason the
government prohibited the sale, and only allowed the lease, of these lands to private parties. The State
always reserved these lands for some future public service.
Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy lands into
other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were the only lands for
non-agricultural purposes the government could sell to private parties. Thus, under Act No. 2874, the
government could not sell government reclaimed, foreshore and marshy lands to private parties, unless the
legislature passed a law allowing their sale.49
Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of the
Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with government permission
remained private lands.
Dispositions under the 1935 Constitution
On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The 1935
Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that –
"Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy and other natural resources of the
Philippines belong to the State, and their disposition, exploitation, development, or utilization shall
be limited to citizens of the Philippines or to corporations or associations at least sixty per centum
of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or
concession at the time of the inauguration of the Government established under this
Constitution. Natural resources, with the exception of public agricultural land, shall not be
alienated, and no license, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-five years, renewable
for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases beneficial use may be
the measure and limit of the grant." (Emphasis supplied)
The 1935 Constitution barred the alienation of all natural resources except public agricultural lands, which
were the only natural resources the State could alienate. Thus, foreshore lands, considered part of the
State's natural resources, became inalienable by constitutional fiat, available only for lease for 25 years,
renewable for another 25 years. The government could alienate foreshore lands only after these lands were
reclaimed and classified as alienable agricultural lands of the public domain. Government reclaimed and
marshy lands of the public domain, being neither timber nor mineral lands, fell under the classification of
public agricultural lands.50 However, government reclaimed and marshy lands, although subject to
classification as disposable public agricultural lands, could only be leased and not sold to private parties
because of Act No. 2874.
The prohibition on private parties from acquiring ownership of government reclaimed and marshy lands of the
public domain was only a statutory prohibition and the legislature could therefore remove such prohibition.
The 1935 Constitution did not prohibit individuals and corporations from acquiring government reclaimed and
marshy lands of the public domain that were classified as agricultural lands under existing public land laws.
Section 2, Article XIII of the 1935 Constitution provided as follows:
"Section 2. No private corporation or association may acquire, lease, or hold public

agricultural lands in excess of one thousand and twenty four hectares, nor may any
individual acquire such lands by purchase in excess of one hundred and forty hectares, or
by lease in excess of one thousand and twenty-four hectares, or by homestead in excess of
twenty-four hectares. Lands adapted to grazing, not exceeding two thousand hectares, may be
leased to an individual, private corporation, or association." (Emphasis supplied)
Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No. 2874 to
open for sale to private parties government reclaimed and marshy lands of the public domain. On the
contrary, the legislature continued the long established State policy of retaining for the government title and
ownership of government reclaimed and marshy lands of the public domain.
Commonwealth Act No. 141 of the Philippine National Assembly
On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the
Public Land Act, which compiled the then existing laws on lands of the public domain. CA No. 141, as
amended, remains to this day the existing general law governing the classification and disposition of lands
of the public domain other than timber and mineral lands.51
Section 6 of CA No. 141 empowers the President to classify lands of the public domain into "alienable or
disposable"52 lands of the public domain, which prior to such classification are inalienable and outside the
commerce of man. Section 7 of CA No. 141 authorizes the President to "declare what lands are open to
disposition or concession." Section 8 of CA No. 141 states that the government can declare open for
disposition or concession only lands that are "officially delimited and classified." Sections 6, 7 and 8 of CA
No. 141 read as follows:
"Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and
Commerce, shall from time to time classify the lands of the public domain into –
(a) Alienable or disposable,
(b) Timber, and
(c) Mineral lands,
and may at any time and in like manner transfer such lands from one class to another, 53 for the
purpose of their administration and disposition.
Sec. 7. For the purposes of the administration and disposition of alienable or disposable public
lands, the President, upon recommendation by the Secretary of Agriculture and Commerce,
shall from time to time declare what lands are open to disposition or concession under this
Act.
Sec. 8. Only those lands shall be declared open to disposition or concession which have
been officially delimited and classified and, when practicable, surveyed, and which have not
been reserved for public or quasi-public uses, nor appropriated by the Government, nor in any
manner become private property, nor those on which a private right authorized and recognized by
this Act or any other valid law may be claimed, or which, having been reserved or appropriated,
have ceased to be so. x x x."
Thus, before the government could alienate or dispose of lands of the public domain, the President must first
officially classify these lands as alienable or disposable, and then declare them open to disposition or
concession. There must be no law reserving these lands for public or quasi-public uses.
The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public
domain, are as follows:
"Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land,
is intended to be used for residential purposes or for commercial, industrial, or other
productive purposes other than agricultural, and is open to disposition or concession, shall
be disposed of under the provisions of this chapter and not otherwise.
Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the Government by dredging, filling, or other means;
(b) Foreshore;
(c) Marshy lands or lands covered with water bordering upon the shores or banks of
navigable lakes or rivers;
(d) Lands not included in any of the foregoing classes.
Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to
any person, corporation, or association authorized to purchase or lease public lands for agricultural
purposes. x x x.
Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be
disposed of to private parties by lease only and not otherwise, as soon as the President,
upon recommendation by the Secretary of Agriculture, shall declare that the same are not
necessary for the public service and are open to disposition under this chapter. The lands
included in class (d) may be disposed of by sale or lease under the provisions of this Act."
(Emphasis supplied)
Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874
prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of the public domain.
All these lands are intended for residential, commercial, industrial or other non-agricultural purposes. As
before, Section 61 allowed only the lease of such lands to private parties. The government could sell to
private parties only lands falling under Section 59 (d) of CA No. 141, or those lands for non-agricultural
purposes not classified as government reclaimed, foreshore and marshy disposable lands of the public
domain. Foreshore lands, however, became inalienable under the 1935 Constitution which only allowed the
lease of these lands to qualified private parties.
Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for
residential, commercial, industrial or other productive purposes other than agricultural "shall be disposed of
under the provisions of this chapter and not otherwise." Under Section 10 of CA No. 141, the term
"disposition" includes lease of the land. Any disposition of government reclaimed, foreshore and marshy
disposable lands for non-agricultural purposes must comply with Chapter IX, Title III of CA No. 141,54 unless
a subsequent law amended or repealed these provisions.
In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of
Appeals,55Justice Reynato S. Puno summarized succinctly the law on this matter, as follows:
"Foreshore lands are lands of public dominion intended for public use. So too are lands reclaimed
by the government by dredging, filling, or other means. Act 1654 mandated that the control and
disposition of the foreshore and lands under water remained in the national government. Said law
allowed only the 'leasing' of reclaimed land. The Public Land Acts of 1919 and 1936 also declared
that the foreshore and lands reclaimed by the government were to be "disposed of to private
parties by lease only and not otherwise." Before leasing, however, the Governor-General, upon
recommendation of the Secretary of Agriculture and Natural Resources, had first to determine that
the land reclaimed was not necessary for the public service. This requisite must have been met
before the land could be disposed of. But even then, the foreshore and lands under water were
not to be alienated and sold to private parties. The disposition of the reclaimed land was
only by lease. The land remained property of the State." (Emphasis supplied)
As observed by Justice Puno in his concurring opinion, "Commonwealth Act No. 141 has remained in effect
at present."
The State policy prohibiting the sale to private parties of government reclaimed, foreshore and marshy
alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after the
1935 Constitution took effect. The prohibition on the sale of foreshore lands, however, became a
constitutional edict under the 1935 Constitution. Foreshore lands became inalienable as natural resources of
the State, unless reclaimed by the government and classified as agricultural lands of the public domain, in
which case they would fall under the classification of government reclaimed lands.
After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the
public domain continued to be only leased and not sold to private parties.56 These lands remained sui
generis, as the only alienable or disposable lands of the public domain the government could not sell to
private parties.
Since then and until now, the only way the government can sell to private parties government reclaimed and
marshy disposable lands of the public domain is for the legislature to pass a law authorizing such sale. CA
No. 141 does not authorize the President to reclassify government reclaimed and marshy lands into other
non-agricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the only alienable or
disposable lands for non-agricultural purposes that the government could sell to private parties.
Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under Section
59 that the government previously transferred to government units or entities could be sold to private parties.
Section 60 of CA No. 141 declares that –
"Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary
of Agriculture and Natural Resources, be reasonably necessary for the purposes for which such
sale or lease is requested, and shall not exceed one hundred and forty-four hectares: Provided,
however, That this limitation shall not apply to grants, donations, or transfers made to a province,
municipality or branch or subdivision of the Government for the purposes deemed by said entities
conducive to the public interest; but the land so granted, donated, or transferred to a province,
municipality or branch or subdivision of the Government shall not be alienated,
encumbered, or otherwise disposed of in a manner affecting its title, except when
authorized by Congress: x x x." (Emphasis supplied)
The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority required in
Section 56 of Act No. 2874.
One reason for the congressional authority is that Section 60 of CA No. 141 exempted government units and
entities from the maximum area of public lands that could be acquired from the State. These government
units and entities should not just turn around and sell these lands to private parties in violation of
constitutional or statutory limitations. Otherwise, the transfer of lands for non-agricultural purposes to
government units and entities could be used to circumvent constitutional limitations on ownership of alienable
or disposable lands of the public domain. In the same manner, such transfers could also be used to evade
the statutory prohibition in CA No. 141 on the sale of government reclaimed and marshy lands of the public
domain to private parties. Section 60 of CA No. 141 constitutes by operation of law a lien on these lands. 57
In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No. 141,
Sections 63 and 67 require a public bidding. Sections 63 and 67 of CA No. 141 provide as follows:
"Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public
purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now the
Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of such
authority, the Director of Lands shall give notice by public advertisement in the same manner as in
the case of leases or sales of agricultural public land, x x x.
Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to
the highest bidder. x x x." (Emphasis supplied)
Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable or
disposable lands of the public domain.58
Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish Law of
Waters of 1866. Private parties could still reclaim portions of the sea with government permission. However,
the reclaimed land could become private land only if classified as alienable agricultural land of the
public domain open to disposition under CA No. 141. The 1935 Constitution prohibited the alienation of all
natural resources except public agricultural lands.
The Civil Code of 1950
The Civil Code of 1950 readopted substantially the definition of property of public dominion found in the Civil
Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that –
"Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use, and are intended for some public
service or for the development of the national wealth.
x x x.
Art. 422. Property of public dominion, when no longer intended for public use or for public service,
shall form part of the patrimonial property of the State."
Again, the government must formally declare that the property of public dominion is no longer needed for
public use or public service, before the same could be classified as patrimonial property of the State. 59 In the
case of government reclaimed and marshy lands of the public domain, the declaration of their being
disposable, as well as the manner of their disposition, is governed by the applicable provisions of CA No.
141.
Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those properties
of the State which, without being for public use, are intended for public service or the "development of the
national wealth." Thus, government reclaimed and marshy lands of the State, even if not employed for
public use or public service, if developed to enhance the national wealth, are classified as property of public
dominion.
The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian doctrine.
Section 8, Article XIV of the 1973 Constitution stated that –
"Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all
forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong
to the State. With the exception of agricultural, industrial or commercial, residential, and
resettlement lands of the public domain, natural resources shall not be alienated, and no
license, concession, or lease for the exploration, development, exploitation, or utilization of any of
the natural resources shall be granted for a period exceeding twenty-five years, renewable for not
more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water power, in which cases, beneficial use may be
the measure and the limit of the grant." (Emphasis supplied)
The 1973 Constitution prohibited the alienation of all natural resources with the exception of "agricultural,
industrial or commercial, residential, and resettlement lands of the public domain." In contrast, the 1935
Constitution barred the alienation of all natural resources except "public agricultural lands." However, the
term "public agricultural lands" in the 1935 Constitution encompassed industrial, commercial, residential and
resettlement lands of the public domain.60 If the land of public domain were neither timber nor mineral land, it
would fall under the classification of agricultural land of the public domain. Both the 1935 and 1973
Constitutions, therefore, prohibited the alienation of all natural resources except agricultural lands of
the public domain.
The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals who were
citizens of the Philippines. Private corporations, even if wholly owned by Philippine citizens, were no longer
allowed to acquire alienable lands of the public domain unlike in the 1935 Constitution. Section 11, Article
XIV of the 1973 Constitution declared that –
"Sec. 11. The Batasang Pambansa, taking into account conservation, ecological, and development
requirements of the natural resources, shall determine by law the size of land of the public domain
which may be developed, held or acquired by, or leased to, any qualified individual, corporation, or
association, and the conditions therefor. No private corporation or association may hold
alienable lands of the public domain except by lease not to exceed one thousand hectares in
area nor may any citizen hold such lands by lease in excess of five hundred hectares or acquire by
purchase, homestead or grant, in excess of twenty-four hectares. No private corporation or
association may hold by lease, concession, license or permit, timber or forest lands and other
timber or forest resources in excess of one hundred thousand hectares. However, such area may
be increased by the Batasang Pambansa upon recommendation of the National Economic and
Development Authority." (Emphasis supplied)
Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public domain only
through lease. Only individuals could now acquire alienable lands of the public domain, and private
corporations became absolutely barred from acquiring any kind of alienable land of the public
domain. The constitutional ban extended to all kinds of alienable lands of the public domain, while the
statutory ban under CA No. 141 applied only to government reclaimed, foreshore and marshy alienable lands
of the public domain.
PD No. 1084 Creating the Public Estates Authority
On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 creating PEA,
a wholly government owned and controlled corporation with a special charter. Sections 4 and 8 of PD No.
1084, vests PEA with the following purposes and powers:
"Sec. 4. Purpose. The Authority is hereby created for the following purposes:
(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other
means, or to acquire reclaimed land;
(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and
all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled
and/or operated by the government;
(c) To provide for, operate or administer such service as may be necessary for the efficient,
economical and beneficial utilization of the above properties.
Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for
which it is created, have the following powers and functions:
(a)To prescribe its by-laws.
xxx
(i) To hold lands of the public domain in excess of the area permitted to private corporations by
statute.
(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal,
ditch, flume x x x.
xxx
(o) To perform such acts and exercise such functions as may be necessary for the attainment of
the purposes and objectives herein specified." (Emphasis supplied)
PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain.
Foreshore areas are those covered and uncovered by the ebb and flow of the tide. 61 Submerged areas are
those permanently under water regardless of the ebb and flow of the tide. 62 Foreshore and submerged areas
indisputably belong to the public domain63 and are inalienable unless reclaimed, classified as alienable lands
open to disposition, and further declared no longer needed for public service.
The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain
did not apply to PEA since it was then, and until today, a fully owned government corporation. The
constitutional ban applied then, as it still applies now, only to "private corporations and associations." PD No.
1084 expressly empowers PEA "to hold lands of the public domain" even "in excess of the area permitted
to private corporations by statute." Thus, PEA can hold title to private lands, as well as title to lands of
the public domain.
In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there
must be legislative authority empowering PEA to sell these lands. This legislative authority is necessary in
view of Section 60 of CA No.141, which states –
"Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or
branch or subdivision of the Government shall not be alienated, encumbered or otherwise disposed
of in a manner affecting its title, except when authorized by Congress; x x x." (Emphasis
supplied)
Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and submerged
alienable lands of the public domain. Nevertheless, any legislative authority granted to PEA to sell its
reclaimed alienable lands of the public domain would be subject to the constitutional ban on private
corporations from acquiring alienable lands of the public domain. Hence, such legislative authority could only
benefit private individuals.
The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine.
The 1987 Constitution declares that all natural resources are "owned by the State," and except for alienable
agricultural lands of the public domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of
the 1987 Constitution state that –
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils,
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. With the exception of agricultural lands, all other
natural resources shall not be alienated. The exploration, development, and utilization of natural
resources shall be under the full control and supervision of the State. x x x.
Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral
lands, and national parks. Agricultural lands of the public domain may be further classified by law
according to the uses which they may be devoted. Alienable lands of the public domain shall be
limited to agricultural lands. Private corporations or associations may not hold such
alienable lands of the public domain except by lease, for a period not exceeding twenty-five
years, renewable for not more than twenty-five years, and not to exceed one thousand
hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or
acquire not more than twelve hectares thereof by purchase, homestead, or grant.
Taking into account the requirements of conservation, ecology, and development, and subject to
the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the
public domain which may be acquired, developed, held, or leased and the conditions therefor."
(Emphasis supplied)
The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations
from acquiring any kind of alienable land of the public domain. Like the 1973 Constitution, the 1987
Constitution allows private corporations to hold alienable lands of the public domain only through lease. As
in the 1935 and 1973 Constitutions, the general law governing the lease to private corporations of reclaimed,
foreshore and marshy alienable lands of the public domain is still CA No. 141.
The Rationale behind the Constitutional Ban
The rationale behind the constitutional ban on corporations from acquiring, except through lease, alienable
lands of the public domain is not well understood. During the deliberations of the 1986 Constitutional
Commission, the commissioners probed the rationale behind this ban, thus:
"FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says:
`No private corporation or association may hold alienable lands of the public domain except by
lease, not to exceed one thousand hectares in area.'
If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the
1973 Constitution. In effect, it prohibits private corporations from acquiring alienable public
lands. But it has not been very clear in jurisprudence what the reason for this is. In some of
the cases decided in 1982 and 1983, it was indicated that the purpose of this is to prevent
large landholdings. Is that the intent of this provision?
MR. VILLEGAS: I think that is the spirit of the provision.
FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the
Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a chapel stood
because the Supreme Court said it would be in violation of this." (Emphasis supplied)
In Ayog v. Cusi,64 the Court explained the rationale behind this constitutional ban in this way:
"Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands
by private corporations is to equitably diffuse land ownership or to encourage 'owner-cultivatorship
and the economic family-size farm' and to prevent a recurrence of cases like the instant case.
Huge landholdings by corporations or private persons had spawned social unrest."
However, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply
limited the size of alienable lands of the public domain that corporations could acquire. The Constitution
could have followed the limitations on individuals, who could acquire not more than 24 hectares of alienable
lands of the public domain under the 1973 Constitution, and not more than 12 hectares under the 1987
Constitution.
If the constitutional intent is to encourage economic family-size farms, placing the land in the name of a
corporation would be more effective in preventing the break-up of farmlands. If the farmland is registered in
the name of a corporation, upon the death of the owner, his heirs would inherit shares in the corporation
instead of subdivided parcels of the farmland. This would prevent the continuing break-up of farmlands into
smaller and smaller plots from one generation to the next.
In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from acquiring
more than the allowed area of alienable lands of the public domain. Without the constitutional ban,
individuals who already acquired the maximum area of alienable lands of the public domain could easily set
up corporations to acquire more alienable public lands. An individual could own as many corporations as his
means would allow him. An individual could even hide his ownership of a corporation by putting his nominees
as stockholders of the corporation. The corporation is a convenient vehicle to circumvent the constitutional
limitation on acquisition by individuals of alienable lands of the public domain.
The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a limited
area of alienable land of the public domain to a qualified individual. This constitutional intent is safeguarded
by the provision prohibiting corporations from acquiring alienable lands of the public domain, since the
vehicle to circumvent the constitutional intent is removed. The available alienable public lands are gradually
decreasing in the face of an ever-growing population. The most effective way to insure faithful adherence to
this constitutional intent is to grant or sell alienable lands of the public domain only to individuals. This, it
would seem, is the practical benefit arising from the constitutional ban.
The Amended Joint Venture Agreement
The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three
properties, namely:
1. "[T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard in
Paranaque and Las Pinas, Metro Manila, with a combined titled area of 1,578,441 square meters;"
2. "[A]nother area of 2,421,559 square meters contiguous to the three islands;" and
3. "[A]t AMARI's option as approved by PEA, an additional 350 hectares more or less to regularize
the configuration of the reclaimed area."65
PEA confirms that the Amended JVA involves "the development of the Freedom Islands and further
reclamation of about 250 hectares x x x," plus an option "granted to AMARI to subsequently reclaim another
350 hectares x x x."66
In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750-
hectare reclamation project have been reclaimed, and the rest of the 592.15 hectares are still
submerged areas forming part of Manila Bay.
Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEA's "actual cost"
in partially reclaiming the Freedom Islands. AMARI will also complete, at its own expense, the reclamation of
the Freedom Islands. AMARI will further shoulder all the reclamation costs of all the other areas, totaling
592.15 hectares, still to be reclaimed. AMARI and PEA will share, in the proportion of 70 percent and 30
percent, respectively, the total net usable area which is defined in the Amended JVA as the total reclaimed
area less 30 percent earmarked for common areas. Title to AMARI's share in the net usable area, totaling
367.5 hectares, will be issued in the name of AMARI. Section 5.2 (c) of the Amended JVA provides that –
"x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or
conveyance of the title pertaining to AMARI's Land share based on the Land Allocation Plan. PEA,
when requested in writing by AMARI, shall then cause the issuance and delivery of the
proper certificates of title covering AMARI's Land Share in the name of AMARI, x x x;
provided, that if more than seventy percent (70%) of the titled area at any given time pertains to
AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles pertaining to AMARI,
until such time when a corresponding proportionate area of additional land pertaining to PEA has
been titled." (Emphasis supplied)
Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of
reclaimed land which will be titled in its name.
To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture PEA's
statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila Bay. Section
3.2.a of the Amended JVA states that –
"PEA hereby contributes to the joint venture its rights and privileges to perform Rawland
Reclamation and Horizontal Development as well as own the Reclamation Area, thereby granting
the Joint Venture the full and exclusive right, authority and privilege to undertake the Project in
accordance with the Master Development Plan."
The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its
supplemental agreement dated August 9, 1995.
The Threshold Issue
The threshold issue is whether AMARI, a private corporation, can acquire and own under the Amended JVA
367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of Sections 2 and 3,
Article XII of the 1987 Constitution which state that:
"Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils,
all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural
resources are owned by the State. With the exception of agricultural lands, all other natural
resources shall not be alienated. x x x.
xxx
Section 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private
corporations or associations may not hold such alienable lands of the public domain except
by lease, x x x."(Emphasis supplied)
Classification of Reclaimed Foreshore and Submerged Areas
PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are alienable
or disposable lands of the public domain. In its Memorandum,67 PEA admits that –
"Under the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable
and disposable lands of the public domain:
'Sec. 59. The lands disposable under this title shall be classified as follows:
(a) Lands reclaimed by the government by dredging, filling, or other means;
x x x.'" (Emphasis supplied)
Likewise, the Legal Task Force68 constituted under Presidential Administrative Order No. 365 admitted in its
Report and Recommendation to then President Fidel V. Ramos, "[R]eclaimed lands are classified as
alienable and disposable lands of the public domain."69 The Legal Task Force concluded that –
"D. Conclusion
Reclaimed lands are lands of the public domain. However, by statutory authority, the rights of
ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of which
PEA, as owner, may validly convey the same to any qualified person without violating the
Constitution or any statute.
The constitutional provision prohibiting private corporations from holding public land, except by
lease (Sec. 3, Art. XVII,70 1987 Constitution), does not apply to reclaimed lands whose ownership
has passed on to PEA by statutory grant."
Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila Bay are
part of the "lands of the public domain, waters x x x and other natural resources" and consequently "owned
by the State." As such, foreshore and submerged areas "shall not be alienated," unless they are classified as
"agricultural lands" of the public domain. The mere reclamation of these areas by PEA does not convert
these inalienable natural resources of the State into alienable or disposable lands of the public domain.
There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or
disposable and open to disposition or concession. Moreover, these reclaimed lands cannot be classified as
alienable or disposable if the law has reserved them for some public or quasi-public use.71
Section 8 of CA No. 141 provides that "only those lands shall be declared open to disposition or concession
which have been officially delimited and classified."72 The President has the authority to classify
inalienable lands of the public domain into alienable or disposable lands of the public domain, pursuant to
Section 6 of CA No. 141. In Laurel vs. Garcia,73 the Executive Department attempted to sell the Roppongi
property in Tokyo, Japan, which was acquired by the Philippine Government for use as the Chancery of the
Philippine Embassy. Although the Chancery had transferred to another location thirteen years earlier, the
Court still ruled that, under Article 42274 of the Civil Code, a property of public dominion retains such
character until formally declared otherwise. The Court ruled that –
"The fact that the Roppongi site has not been used for a long time for actual Embassy service does
not automatically convert it to patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481
[1975]. A property continues to be part of the public domain, not available for private
appropriation or ownership 'until there is a formal declaration on the part of the government
to withdraw it from being such' (Ignacio v. Director of Lands, 108 Phil. 335 [1960]." (Emphasis
supplied)
PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands
reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then
President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the 157.84 hectares
comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the Register of Deeds of
the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEA pursuant to
Section 103 of PD No. 1529 authorizing the issuance of certificates of title corresponding to land patents. To
this day, these certificates of title are still in the name of PEA.
PD No. 1085, coupled with President Aquino's actual issuance of a special patent covering the Freedom
Islands, is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable
lands of the public domain. PD No. 1085 and President Aquino's issuance of a land patent also constitute a
declaration that the Freedom Islands are no longer needed for public service. The Freedom Islands are
thus alienable or disposable lands of the public domain, open to disposition or concession to
qualified parties.
At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the Freedom
Islands although subsequently there were partial erosions on some areas. The government had also
completed the necessary surveys on these islands. Thus, the Freedom Islands were no longer part of Manila
Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the public
domain into "agricultural, forest or timber, mineral lands, and national parks." Being neither timber, mineral,
nor national park lands, the reclaimed Freedom Islands necessarily fall under the classification of agricultural
lands of the public domain. Under the 1987 Constitution, agricultural lands of the public domain are the only
natural resources that the State may alienate to qualified private parties. All other natural resources, such as
the seas or bays, are "waters x x x owned by the State" forming part of the public domain, and are
inalienable pursuant to Section 2, Article XII of the 1987 Constitution.
AMARI claims that the Freedom Islands are private lands because CDCP, then a private corporation,
reclaimed the islands under a contract dated November 20, 1973 with the Commissioner of Public Highways.
AMARI, citing Article 5 of the Spanish Law of Waters of 1866, argues that "if the ownership of reclaimed
lands may be given to the party constructing the works, then it cannot be said that reclaimed lands are lands
of the public domain which the State may not alienate."75 Article 5 of the Spanish Law of Waters reads as
follows:
"Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by
the provinces, pueblos or private persons, with proper permission, shall become the property of the
party constructing such works, unless otherwise provided by the terms of the grant of
authority." (Emphasis supplied)
Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only with
"proper permission" from the State. Private parties could own the reclaimed land only if not "otherwise
provided by the terms of the grant of authority." This clearly meant that no one could reclaim from the sea
without permission from the State because the sea is property of public dominion. It also meant that the State
could grant or withhold ownership of the reclaimed land because any reclaimed land, like the sea from which
it emerged, belonged to the State. Thus, a private person reclaiming from the sea without permission from
the State could not acquire ownership of the reclaimed land which would remain property of public dominion
like the sea it replaced.76 Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle
of land ownership that "all lands that were not acquired from the government, either by purchase or by grant,
belong to the public domain."77
Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the
disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must first be
classified as alienable or disposable before the government can alienate them. These lands must not be
reserved for public or quasi-public purposes.78 Moreover, the contract between CDCP and the government
was executed after the effectivity of the 1973 Constitution which barred private corporations from acquiring
any kind of alienable land of the public domain. This contract could not have converted the Freedom Islands
into private lands of a private corporation.
Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the reclamation of
areas under water and revested solely in the National Government the power to reclaim lands. Section 1 of
PD No. 3-A declared that –
"The provisions of any law to the contrary notwithstanding, the reclamation of areas under
water, whether foreshore or inland, shall be limited to the National Government or any person
authorized by it under a proper contract. (Emphasis supplied)
x x x."
PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas under
water could now be undertaken only by the National Government or by a person contracted by the National
Government. Private parties may reclaim from the sea only under a contract with the National Government,
and no longer by grant or permission as provided in Section 5 of the Spanish Law of Waters of 1866.
Executive Order No. 525, issued on February 14, 1979, designated PEA as the National Government's
implementing arm to undertake "all reclamation projects of the government," which "shall be undertaken by
the PEA or through a proper contract executed by it with any person or entity." Under such contract, a
private party receives compensation for reclamation services rendered to PEA. Payment to the contractor
may be in cash, or in kind consisting of portions of the reclaimed land, subject to the constitutional ban on
private corporations from acquiring alienable lands of the public domain. The reclaimed land can be used as
payment in kind only if the reclaimed land is first classified as alienable or disposable land open to
disposition, and then declared no longer needed for public service.
The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are
still submerged and forming part of Manila Bay. There is no legislative or Presidential act classifying
these submerged areas as alienable or disposable lands of the public domain open to disposition.
These submerged areas are not covered by any patent or certificate of title. There can be no dispute that
these submerged areas form part of the public domain, and in their present state are inalienable and
outside the commerce of man. Until reclaimed from the sea, these submerged areas are, under the
Constitution, "waters x x x owned by the State," forming part of the public domain and consequently
inalienable. Only when actually reclaimed from the sea can these submerged areas be classified as public
agricultural lands, which under the Constitution are the only natural resources that the State may alienate.
Once reclaimed and transformed into public agricultural lands, the government may then officially classify
these lands as alienable or disposable lands open to disposition. Thereafter, the government may declare
these lands no longer needed for public service. Only then can these reclaimed lands be considered
alienable or disposable lands of the public domain and within the commerce of man.
The classification of PEA's reclaimed foreshore and submerged lands into alienable or disposable lands
open to disposition is necessary because PEA is tasked under its charter to undertake public services that
require the use of lands of the public domain. Under Section 5 of PD No. 1084, the functions of PEA include
the following: "[T]o own or operate railroads, tramways and other kinds of land transportation, x x x; [T]o
construct, maintain and operate such systems of sanitary sewers as may be necessary; [T]o construct,
maintain and operate such storm drains as may be necessary." PEA is empowered to issue "rules and
regulations as may be necessary for the proper use by private parties of any or all of the highways, roads,
utilities, buildings and/or any of its properties and to impose or collect fees or tolls for their use." Thus,
part of the reclaimed foreshore and submerged lands held by the PEA would actually be needed for public
use or service since many of the functions imposed on PEA by its charter constitute essential public services.
Moreover, Section 1 of Executive Order No. 525 provides that PEA "shall be primarily responsible for
integrating, directing, and coordinating all reclamation projects for and on behalf of the National
Government." The same section also states that "[A]ll reclamation projects shall be approved by the
President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper
contract executed by it with any person or entity; x x x." Thus, under EO No. 525, in relation to PD No. 3-A
and PD No.1084, PEA became the primary implementing agency of the National Government to reclaim
foreshore and submerged lands of the public domain. EO No. 525 recognized PEA as the government entity
"to undertake the reclamation of lands and ensure their maximum utilization in promoting public welfare
and interests."79 Since large portions of these reclaimed lands would obviously be needed for public service,
there must be a formal declaration segregating reclaimed lands no longer needed for public service from
those still needed for public service.1âwphi1.nêt
Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA "shall belong to or be owned by the
PEA," could not automatically operate to classify inalienable lands into alienable or disposable lands of the
public domain. Otherwise, reclaimed foreshore and submerged lands of the public domain would
automatically become alienable once reclaimed by PEA, whether or not classified as alienable or disposable.
The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests in the
Department of Environment and Natural Resources ("DENR" for brevity) the following powers and functions:
"Sec. 4. Powers and Functions. The Department shall:
(1) x x x
xxx
(4) Exercise supervision and control over forest lands, alienable and disposable public lands,
mineral resources and, in the process of exercising such control, impose appropriate taxes, fees,
charges, rentals and any such form of levy and collect such revenues for the exploration,
development, utilization or gathering of such resources;
xxx
(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits,
concessions, lease agreements and such other privileges concerning the development,
exploration and utilization of the country's marine, freshwater, and brackish water and over
all aquatic resources of the country and shall continue to oversee, supervise and police our
natural resources; cancel or cause to cancel such privileges upon failure, non-compliance or
violations of any regulation, order, and for all other causes which are in furtherance of the
conservation of natural resources and supportive of the national interest;
(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the
public domain and serve as the sole agency responsible for classification, sub-classification,
surveying and titling of lands in consultation with appropriate agencies."80 (Emphasis supplied)
As manager, conservator and overseer of the natural resources of the State, DENR exercises "supervision
and control over alienable and disposable public lands." DENR also exercises "exclusive jurisdiction on the
management and disposition of all lands of the public domain." Thus, DENR decides whether areas under
water, like foreshore or submerged areas of Manila Bay, should be reclaimed or not. This means that PEA
needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay, or in any part
of the country.
DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. Hence,
DENR decides whether reclaimed lands of PEA should be classified as alienable under Sections 6 81 and
782 of CA No. 141. Once DENR decides that the reclaimed lands should be so classified, it then recommends
to the President the issuance of a proclamation classifying the lands as alienable or disposable lands of the
public domain open to disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr.
countersigned Special Patent No. 3517 in compliance with the Revised Administrative Code and Sections 6
and 7 of CA No. 141.
In short, DENR is vested with the power to authorize the reclamation of areas under water, while PEA is
vested with the power to undertake the physical reclamation of areas under water, whether directly or
through private contractors. DENR is also empowered to classify lands of the public domain into alienable or
disposable lands subject to the approval of the President. On the other hand, PEA is tasked to develop, sell
or lease the reclaimed alienable lands of the public domain.
Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not make the
reclaimed lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA.
Likewise, the mere transfer by the National Government of lands of the public domain to PEA does not make
the lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA.
Absent two official acts – a classification that these lands are alienable or disposable and open to disposition
and a declaration that these lands are not needed for public service, lands reclaimed by PEA remain
inalienable lands of the public domain. Only such an official classification and formal declaration can convert
reclaimed lands into alienable or disposable lands of the public domain, open to disposition under the
Constitution, Title I and Title III83 of CA No. 141 and other applicable laws.84
PEA's Authority to Sell Reclaimed Lands
PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain, the
reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA, citing
Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or subdivision of the
government "shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its
title, except when authorized by Congress: x x x."85 (Emphasis by PEA)
In Laurel vs. Garcia,86 the Court cited Section 48 of the Revised Administrative Code of 1987, which states
that –
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the
Government is authorized by law to be conveyed, the deed of conveyance shall be executed in
behalf of the government by the following: x x x."
Thus, the Court concluded that a law is needed to convey any real property belonging to the Government.
The Court declared that -
"It is not for the President to convey real property of the government on his or her own sole
will. Any such conveyance must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence." (Emphasis supplied)
PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to sell its
reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that –
"The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the contract
for the reclamation and construction of the Manila-Cavite Coastal Road Project between the
Republic of the Philippines and the Construction and Development Corporation of the Philippines
dated November 20, 1973 and/or any other contract or reclamation covering the same area is
hereby transferred, conveyed and assigned to the ownership and administration of the
Public Estates Authority established pursuant to PD No. 1084; Provided, however, That the
rights and interests of the Construction and Development Corporation of the Philippines pursuant
to the aforesaid contract shall be recognized and respected.
Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations of the
Republic of the Philippines (Department of Public Highways) arising from, or incident to, the
aforesaid contract between the Republic of the Philippines and the Construction and Development
Corporation of the Philippines.
In consideration of the foregoing transfer and assignment, the Public Estates Authority shall issue
in favor of the Republic of the Philippines the corresponding shares of stock in said entity with an
issued value of said shares of stock (which) shall be deemed fully paid and non-assessable.
The Secretary of Public Highways and the General Manager of the Public Estates Authority shall
execute such contracts or agreements, including appropriate agreements with the Construction
and Development Corporation of the Philippines, as may be necessary to implement the above.
Special land patent/patents shall be issued by the Secretary of Natural Resources in favor
of the Public Estates Authority without prejudice to the subsequent transfer to the
contractor or his assignees of such portion or portions of the land reclaimed or to be
reclaimed as provided for in the above-mentioned contract. On the basis of such patents,
the Land Registration Commission shall issue the corresponding certificate of title."
(Emphasis supplied)
On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -
"Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be
responsible for its administration, development, utilization or disposition in accordance with the
provisions of Presidential Decree No. 1084. Any and all income that the PEA may derive from the
sale, lease or use of reclaimed lands shall be used in accordance with the provisions of
Presidential Decree No. 1084."
There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed lands.
PD No. 1085 merely transferred "ownership and administration" of lands reclaimed from Manila Bay to PEA,
while EO No. 525 declared that lands reclaimed by PEA "shall belong to or be owned by PEA." EO No. 525
expressly states that PEA should dispose of its reclaimed lands "in accordance with the provisions of
Presidential Decree No. 1084," the charter of PEA.
PEA's charter, however, expressly tasks PEA "to develop, improve, acquire, administer, deal in, subdivide,
dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled and/or operated by the
government."87(Emphasis supplied) There is, therefore, legislative authority granted to PEA to sell its
lands, whether patrimonial or alienable lands of the public domain. PEA may sell to private parties
its patrimonial propertiesin accordance with the PEA charter free from constitutional limitations. The
constitutional ban on private corporations from acquiring alienable lands of the public domain does not apply
to the sale of PEA's patrimonial lands.
PEA may also sell its alienable or disposable lands of the public domain to private individuals since, with
the legislative authority, there is no longer any statutory prohibition against such sales and the constitutional
ban does not apply to individuals. PEA, however, cannot sell any of its alienable or disposable lands of the
public domain to private corporations since Section 3, Article XII of the 1987 Constitution expressly prohibits
such sales. The legislative authority benefits only individuals. Private corporations remain barred from
acquiring any kind of alienable land of the public domain, including government reclaimed lands.
The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the
"contractor or his assignees" (Emphasis supplied) would not apply to private corporations but only to
individuals because of the constitutional ban. Otherwise, the provisions of PD No. 1085 would violate both
the 1973 and 1987 Constitutions.
The requirement of public auction in the sale of reclaimed lands
Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition, and
further declared no longer needed for public service, PEA would have to conduct a public bidding in selling or
leasing these lands. PEA must observe the provisions of Sections 63 and 67 of CA No. 141 requiring public
auction, in the absence of a law exempting PEA from holding a public auction.88 Special Patent No. 3517
expressly states that the patent is issued by authority of the Constitution and PD No. 1084, "supplemented by
Commonwealth Act No. 141, as amended." This is an acknowledgment that the provisions of CA No. 141
apply to the disposition of reclaimed alienable lands of the public domain unless otherwise provided by law.
Executive Order No. 654,89 which authorizes PEA "to determine the kind and manner of payment for the
transfer" of its assets and properties, does not exempt PEA from the requirement of public auction. EO No.
654 merely authorizes PEA to decide the mode of payment, whether in kind and in installment, but does not
authorize PEA to dispense with public auction.
Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code, the
government is required to sell valuable government property through public bidding. Section 79 of PD No.
1445 mandates that –
"Section 79. When government property has become unserviceable for any cause, or is no
longer needed, it shall, upon application of the officer accountable therefor, be inspected by the
head of the agency or his duly authorized representative in the presence of the auditor concerned
and, if found to be valueless or unsaleable, it may be destroyed in their presence. If found to be
valuable, it may be sold at public auction to the highest bidder under the supervision of the
proper committee on award or similar body in the presence of the auditor concerned or other
authorized representative of the Commission, after advertising by printed notice in the Official
Gazette, or for not less than three consecutive days in any newspaper of general
circulation, or where the value of the property does not warrant the expense of publication, by
notices posted for a like period in at least three public places in the locality where the property is to
be sold. In the event that the public auction fails, the property may be sold at a private sale
at such price as may be fixed by the same committee or body concerned and approved by
the Commission."
It is only when the public auction fails that a negotiated sale is allowed, in which case the Commission on
Audit must approve the selling price.90 The Commission on Audit implements Section 79 of the Government
Auditing Code through Circular No. 89-29691 dated January 27, 1989. This circular emphasizes that
government assets must be disposed of only through public auction, and a negotiated sale can be resorted
to only in case of "failure of public auction."
At the public auction sale, only Philippine citizens are qualified to bid for PEA's reclaimed foreshore and
submerged alienable lands of the public domain. Private corporations are barred from bidding at the auction
sale of any kind of alienable land of the public domain.
PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA imposed a
condition that the winning bidder should reclaim another 250 hectares of submerged areas to regularize the
shape of the Freedom Islands, under a 60-40 sharing of the additional reclaimed areas in favor of the
winning bidder.92 No one, however, submitted a bid. On December 23, 1994, the Government Corporate
Counsel advised PEA it could sell the Freedom Islands through negotiation, without need of another public
bidding, because of the failure of the public bidding on December 10, 1991. 93
However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the additional 250
hectares still to be reclaimed, it also granted an option to AMARI to reclaim another 350 hectares. The
original JVA, a negotiated contract, enlarged the reclamation area to 750 hectares.94 The failure of public
bidding on December 10, 1991, involving only 407.84 hectares,95 is not a valid justification for a negotiated
sale of 750 hectares, almost double the area publicly auctioned. Besides, the failure of public bidding
happened on December 10, 1991, more than three years before the signing of the original JVA on April 25,
1995. The economic situation in the country had greatly improved during the intervening period.
Reclamation under the BOT Law and the Local Government Code
The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear: "Private
corporations or associations may not hold such alienable lands of the public domain except by lease, x x x."
Even Republic Act No. 6957 ("BOT Law," for brevity), cited by PEA and AMARI as legislative authority to sell
reclaimed lands to private parties, recognizes the constitutional ban. Section 6 of RA No. 6957 states –
"Sec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance of any
infrastructure projects undertaken through the build-operate-and-transfer arrangement or any of its
variations pursuant to the provisions of this Act, the project proponent x x x may likewise be repaid
in the form of a share in the revenue of the project or other non-monetary payments, such as, but
not limited to, the grant of a portion or percentage of the reclaimed land, subject to the
constitutional requirements with respect to the ownership of the land: x x x." (Emphasis
supplied)
A private corporation, even one that undertakes the physical reclamation of a government BOT project,
cannot acquire reclaimed alienable lands of the public domain in view of the constitutional ban.
Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local
governments in land reclamation projects to pay the contractor or developer in kind consisting of a
percentage of the reclaimed land, to wit:
"Section 302. Financing, Construction, Maintenance, Operation, and Management of Infrastructure
Projects by the Private Sector. x x x
xxx
In case of land reclamation or construction of industrial estates, the repayment plan may consist of
the grant of a portion or percentage of the reclaimed land or the industrial estate constructed."
Although Section 302 of the Local Government Code does not contain a proviso similar to that of the BOT
Law, the constitutional restrictions on land ownership automatically apply even though not expressly
mentioned in the Local Government Code.
Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a corporate
entity, can only be paid with leaseholds on portions of the reclaimed land. If the contractor or developer is an
individual, portions of the reclaimed land, not exceeding 12 hectares96 of non-agricultural lands, may be
conveyed to him in ownership in view of the legislative authority allowing such conveyance. This is the only
way these provisions of the BOT Law and the Local Government Code can avoid a direct collision with
Section 3, Article XII of the 1987 Constitution.
Registration of lands of the public domain
Finally, PEA theorizes that the "act of conveying the ownership of the reclaimed lands to public respondent
PEA transformed such lands of the public domain to private lands." This theory is echoed by AMARI which
maintains that the "issuance of the special patent leading to the eventual issuance of title takes the subject
land away from the land of public domain and converts the property into patrimonial or private property." In
short, PEA and AMARI contend that with the issuance of Special Patent No. 3517 and the corresponding
certificates of titles, the 157.84 hectares comprising the Freedom Islands have become private lands of PEA.
In support of their theory, PEA and AMARI cite the following rulings of the Court:
1. Sumail v. Judge of CFI of Cotabato,97 where the Court held –
"Once the patent was granted and the corresponding certificate of title was issued, the land ceased
to be part of the public domain and became private property over which the Director of Lands has
neither control nor jurisdiction."
2. Lee Hong Hok v. David,98 where the Court declared -
"After the registration and issuance of the certificate and duplicate certificate of title based on a
public land patent, the land covered thereby automatically comes under the operation of Republic
Act 496 subject to all the safeguards provided therein."3. Heirs of Gregorio Tengco v. Heirs of Jose
Aliwalas,99 where the Court ruled -
"While the Director of Lands has the power to review homestead patents, he may do so only so
long as the land remains part of the public domain and continues to be under his exclusive control;
but once the patent is registered and a certificate of title is issued, the land ceases to be part of the
public domain and becomes private property over which the Director of Lands has neither control
nor jurisdiction."
4. Manalo v. Intermediate Appellate Court,100 where the Court held –
"When the lots in dispute were certified as disposable on May 19, 1971, and free patents were
issued covering the same in favor of the private respondents, the said lots ceased to be part of the
public domain and, therefore, the Director of Lands lost jurisdiction over the same."
5.Republic v. Court of Appeals,101 where the Court stated –
"Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a land
grant to the Mindanao Medical Center, Bureau of Medical Services, Department of Health, of the
whole lot, validly sufficient for initial registration under the Land Registration Act. Such land grant is
constitutive of a 'fee simple' title or absolute title in favor of petitioner Mindanao Medical Center.
Thus, Section 122 of the Act, which governs the registration of grants or patents involving public
lands, provides that 'Whenever public lands in the Philippine Islands belonging to the Government
of the United States or to the Government of the Philippines are alienated, granted or conveyed to
persons or to public or private corporations, the same shall be brought forthwith under the
operation of this Act (Land Registration Act, Act 496) and shall become registered lands.'"
The first four cases cited involve petitions to cancel the land patents and the corresponding certificates of
titles issued to private parties. These four cases uniformly hold that the Director of Lands has no
jurisdiction over private lands or that upon issuance of the certificate of title the land automatically comes
under the Torrens System. The fifth case cited involves the registration under the Torrens System of a 12.8-
hectare public land granted by the National Government to Mindanao Medical Center, a government unit
under the Department of Health. The National Government transferred the 12.8-hectare public land to serve
as the site for the hospital buildings and other facilities of Mindanao Medical Center, which performed a
public service. The Court affirmed the registration of the 12.8-hectare public land in the name of Mindanao
Medical Center under Section 122 of Act No. 496. This fifth case is an example of a public land being
registered under Act No. 496 without the land losing its character as a property of public dominion.
In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly
government owned corporation performing public as well as proprietary functions. No patent or certificate of
title has been issued to any private party. No one is asking the Director of Lands to cancel PEA's patent or
certificates of title. In fact, the thrust of the instant petition is that PEA's certificates of title should remain with
PEA, and the land covered by these certificates, being alienable lands of the public domain, should not be
sold to a private corporation.
Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or public
ownership of the land. Registration is not a mode of acquiring ownership but is merely evidence of ownership
previously conferred by any of the recognized modes of acquiring ownership. Registration does not give the
registrant a better right than what the registrant had prior to the registration. 102 The registration of lands of the
public domain under the Torrens system, by itself, cannot convert public lands into private lands. 103
Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the alienable land
of the public domain automatically becomes private land cannot apply to government units and entities like
PEA. The transfer of the Freedom Islands to PEA was made subject to the provisions of CA No. 141 as
expressly stated in Special Patent No. 3517 issued by then President Aquino, to wit:
"NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in
conformity with the provisions of Presidential Decree No. 1084, supplemented by
Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto the
Public Estates Authority the aforesaid tracts of land containing a total area of one million nine
hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the technical
description of which are hereto attached and made an integral part hereof." (Emphasis supplied)
Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No. 1084.
Section 60 of CA No. 141 prohibits, "except when authorized by Congress," the sale of alienable lands of the
public domain that are transferred to government units or entities. Section 60 of CA No. 141 constitutes,
under Section 44 of PD No. 1529, a "statutory lien affecting title" of the registered land even if not annotated
on the certificate of title.104Alienable lands of the public domain held by government entities under Section 60
of CA No. 141 remain public lands because they cannot be alienated or encumbered unless Congress
passes a law authorizing their disposition. Congress, however, cannot authorize the sale to private
corporations of reclaimed alienable lands of the public domain because of the constitutional ban. Only
individuals can benefit from such law.
The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141 does not
automatically convert alienable lands of the public domain into private or patrimonial lands. The alienable
lands of the public domain must be transferred to qualified private parties, or to government entities not
tasked to dispose of public lands, before these lands can become private or patrimonial lands. Otherwise, the
constitutional ban will become illusory if Congress can declare lands of the public domain as private or
patrimonial lands in the hands of a government agency tasked to dispose of public lands. This will allow
private corporations to acquire directly from government agencies limitless areas of lands which, prior to
such law, are concededly public lands.
Under EO No. 525, PEA became the central implementing agency of the National Government to reclaim
foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that –
"EXECUTIVE ORDER NO. 525
Designating the Public Estates Authority as the Agency Primarily Responsible for all Reclamation
Projects
Whereas, there are several reclamation projects which are ongoing or being proposed to be
undertaken in various parts of the country which need to be evaluated for consistency with national
programs;
Whereas, there is a need to give further institutional support to the Government's declared policy to
provide for a coordinated, economical and efficient reclamation of lands;
Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited to the
National Government or any person authorized by it under proper contract;
Whereas, a central authority is needed to act on behalf of the National Government which
shall ensure a coordinated and integrated approach in the reclamation of lands;
Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a
government corporation to undertake reclamation of lands and ensure their maximum
utilization in promoting public welfare and interests; and
Whereas, Presidential Decree No. 1416 provides the President with continuing authority to
reorganize the national government including the transfer, abolition, or merger of functions and
offices.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the

powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416, do hereby
order and direct the following:
Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating,
directing, and coordinating all reclamation projects for and on behalf of the National
Government. All reclamation projects shall be approved by the President upon recommendation of
the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any
person or entity; Provided, that, reclamation projects of any national government agency or entity
authorized under its charter shall be undertaken in consultation with the PEA upon approval of the
President.
x x x ."
As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to
sell reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling
reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA are not private lands,
in the same manner that DENR, when it disposes of other alienable lands, does not dispose of private lands
but alienable lands of the public domain. Only when qualified private parties acquire these lands will the
lands become private lands. In the hands of the government agency tasked and authorized to dispose
of alienable of disposable lands of the public domain, these lands are still public, not private lands.
Furthermore, PEA's charter expressly states that PEA "shall hold lands of the public domain" as well as
"any and all kinds of lands." PEA can hold both lands of the public domain and private lands. Thus, the mere
fact that alienable lands of the public domain like the Freedom Islands are transferred to PEA and issued
land patents or certificates of title in PEA's name does not automatically make such lands private.
To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will
sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of
alienable land of the public domain. PEA will simply turn around, as PEA has now done under the
Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands
to a single private corporation in only one transaction. This scheme will effectively nullify the constitutional
ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of
alienable lands of the public domain among Filipinos, now numbering over 80 million strong.
This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA
can "acquire x x x any and all kinds of lands." This will open the floodgates to corporations and even
individuals acquiring hundreds of hectares of alienable lands of the public domain under the guise that in the
hands of PEA these lands are private lands. This will result in corporations amassing huge landholdings
never before seen in this country - creating the very evil that the constitutional ban was designed to prevent.
This will completely reverse the clear direction of constitutional development in this country. The 1935
Constitution allowed private corporations to acquire not more than 1,024 hectares of public lands. 105 The
1973 Constitution prohibited private corporations from acquiring any kind of public land, and the 1987
Constitution has unequivocally reiterated this prohibition.
The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No. 1529,
automatically become private lands is contrary to existing laws. Several laws authorize lands of the public
domain to be registered under the Torrens System or Act No. 496, now PD No. 1529, without losing their
character as public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529, respectively, provide
as follows:
Act No. 496
"Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of
the Philippine Islands are alienated, granted, or conveyed to persons or the public or private
corporations, the same shall be brought forthwith under the operation of this Act and shall
become registered lands."
PD No. 1529
"Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government alienated,
granted or conveyed to any person, the same shall be brought forthwith under the operation of this
Decree." (Emphasis supplied)
Based on its legislative history, the phrase "conveyed to any person" in Section 103 of PD No. 1529 includes
conveyances of public lands to public corporations.
Alienable lands of the public domain "granted, donated, or transferred to a province, municipality, or branch
or subdivision of the Government," as provided in Section 60 of CA No. 141, may be registered under the
Torrens System pursuant to Section 103 of PD No. 1529. Such registration, however, is expressly subject to
the condition in Section 60 of CA No. 141 that the land "shall not be alienated, encumbered or otherwise
disposed of in a manner affecting its title, except when authorized by Congress." This provision refers
to government reclaimed, foreshore and marshy lands of the public domain that have been titled but still
cannot be alienated or encumbered unless expressly authorized by Congress. The need for legislative
authority prevents the registered land of the public domain from becoming private land that can be disposed
of to qualified private parties.
The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be registered
under the Torrens System. Section 48, Chapter 12, Book I of the Code states –
"Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government
is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the
government by the following:
(1) x x x
(2) For property belonging to the Republic of the Philippines, but titled in the name of any
political subdivision or of any corporate agency or instrumentality, by the executive head of
the agency or instrumentality." (Emphasis supplied)
Thus, private property purchased by the National Government for expansion of a public wharf may be titled in
the name of a government corporation regulating port operations in the country. Private property purchased
by the National Government for expansion of an airport may also be titled in the name of the government
agency tasked to administer the airport. Private property donated to a municipality for use as a town plaza or
public school site may likewise be titled in the name of the municipality.106 All these properties become
properties of the public domain, and if already registered under Act No. 496 or PD No. 1529, remain
registered land. There is no requirement or provision in any existing law for the de-registration of land from
the Torrens System.
Private lands taken by the Government for public use under its power of eminent domain become
unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529 authorizes the Register
of Deeds to issue in the name of the National Government new certificates of title covering such expropriated
lands. Section 85 of PD No. 1529 states –
"Sec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is
expropriated or taken by eminent domain, the National Government, province, city or municipality,
or any other agency or instrumentality exercising such right shall file for registration in the proper
Registry a certified copy of the judgment which shall state definitely by an adequate description,
the particular property or interest expropriated, the number of the certificate of title, and the nature
of the public use. A memorandum of the right or interest taken shall be made on each certificate of
title by the Register of Deeds, and where the fee simple is taken, a new certificate shall be
issued in favor of the National Government, province, city, municipality, or any other agency
or instrumentality exercising such right for the land so taken. The legal expenses incident to the
memorandum of registration or issuance of a new certificate of title shall be for the account of the
authority taking the land or interest therein." (Emphasis supplied)
Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or patrimonial
lands. Lands of the public domain may also be registered pursuant to existing laws.
AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the
lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the Amended JVA "is
not a sale but a joint venture with a stipulation for reimbursement of the original cost incurred by PEA for the
earlier reclamation and construction works performed by the CDCP under its 1973 contract with the
Republic." Whether the Amended JVA is a sale or a joint venture, the fact remains that the Amended JVA
requires PEA to "cause the issuance and delivery of the certificates of title conveying AMARI's Land Share in
the name of AMARI."107
This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that private
corporations "shall not hold such alienable lands of the public domain except by lease." The transfer of title
and ownership to AMARI clearly means that AMARI will "hold" the reclaimed lands other than by lease. The
transfer of title and ownership is a "disposition" of the reclaimed lands, a transaction considered a sale or
alienation under CA No. 141,108 the Government Auditing Code,109 and Section 3, Article XII of the 1987
Constitution.
The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas form part of
the public domain and are inalienable. Lands reclaimed from foreshore and submerged areas also form part
of the public domain and are also inalienable, unless converted pursuant to law into alienable or disposable
lands of the public domain. Historically, lands reclaimed by the government are sui generis, not available for
sale to private parties unlike other alienable public lands. Reclaimed lands retain their inherent potential as
areas for public use or public service. Alienable lands of the public domain, increasingly becoming scarce
natural resources, are to be distributed equitably among our ever-growing population. To insure such
equitable distribution, the 1973 and 1987 Constitutions have barred private corporations from acquiring any
kind of alienable land of the public domain. Those who attempt to dispose of inalienable natural resources of
the State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to private
corporations, do so at their own risk.
We can now summarize our conclusions as follows:
1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by
certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease
these lands to private corporations but may not sell or transfer ownership of these lands to private
corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership
limitations in the 1987 Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of
the public domain until classified as alienable or disposable lands open to disposition and declared
no longer needed for public service. The government can make such classification and declaration
only after PEA has reclaimed these submerged areas. Only then can these lands qualify as
agricultural lands of the public domain, which are the only natural resources the government can
alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and
outside the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34
hectares110of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII
of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable
land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares 111 of
still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII
of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural
lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government
can classify the reclaimed lands as alienable or disposable, and further declare them no longer
needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain
to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits
private corporations from acquiring any kind of alienable land of the public domain.
Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under
Article 1409112 of the Civil Code, contracts whose "object or purpose is contrary to law," or whose "object is
outside the commerce of men," are "inexistent and void from the beginning." The Court must perform its duty
to defend and uphold the Constitution, and therefore declares the Amended JVA null and void ab initio.
Seventh issue: whether the Court is the proper forum to raise the issue of whether the Amended JVA
is grossly disadvantageous to the government.
Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last issue.
Besides, the Court is not a trier of facts, and this last issue involves a determination of factual matters.
WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay Development
Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint Venture Agreement
which is hereby declared NULL and VOID ab initio.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Puno, Vitug, Kapunan, Mendoza, Panganiban, Quisumbing, Ynares-Santiago,
Sandoval-Gutierrez, Austria-Martinez, and Corona, JJ., concur.
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 115381 December 23, 1994
KILUSANG MAYO UNO LABOR CENTER, petitioner,

vs.
HON. JESUS B. GARCIA, JR., the LAND TRANSPORTATION FRANCHISING AND REGULATORY
BOARD, and the PROVINCIAL BUS OPERATORS ASSOCIATION OF THE PHILIPPINES, respondents.
Potenciano A. Flores for petitioner.
Robert Anthony C. Sison, Cesar B. Brillantes and Jose Z. Galsim for private respondent.
Jose F. Miravite for movants.
KAPUNAN, J.:
Public utilities are privately owned and operated businesses whose service are essential to the general
public. They are enterprises which specially cater to the needs of the public and conduce to their comfort and
convenience. As such, public utility services are impressed with public interest and concern. The same is
true with respect to the business of common carrier which holds such a peculiar relation to the public interest
that there is superinduced upon it the right of public regulation when private properties are affected with
public interest, hence, they cease to be juris privati only. When, therefore, one devotes his property to a use
in which the public has an interest, he, in effect grants to the public an interest in that use, and must submit
to the control by the public for the common good, to the extent of the interest he has thus created.1
An abdication of the licensing and regulatory government agencies of their functions as the instant petition
seeks to show, is indeed lamentable. Not only is it an unsound administrative policy but it is inimical to public
trust and public interest as well.
The instant petition for certiorari assails the constitutionality and validity of certain memoranda, circulars
and/or orders of the Department of Transportation and Communications (DOTC) and the Land
Transportation Franchising and Regulatory Board LTFRB)2 which, among others, (a) authorize provincial bus
and jeepney operators to increase or decrease the prescribed transportation fares without application
therefor with the LTFRB and without hearing and approval thereof by said agency in violation of Sec. 16(c) of
Commonwealth Act No. 146, as amended, otherwise known as the Public Service Act, and in derogation of
LTFRB's duty to fix and determine just and reasonable fares by delegating that function to bus operators, and
(b) establish a presumption of public need in favor of applicants for certificates of public convenience (CPC)
and place on the oppositor the burden of proving that there is no need for the proposed service, in patent
violation not only of Sec. 16(c) of CA 146, as amended, but also of Sec. 20(a) of the same Act mandating
that fares should be "just and reasonable." It is, likewise, violative of the Rules of Court which places upon
each party the burden to prove his own affirmative allegations.3 The offending provisions contained in the
questioned issuances pointed out by petitioner, have resulted in the introduction into our highways and
thoroughfares thousands of old and smoke-belching buses, many of which are right-hand driven, and have
exposed our consumers to the burden of spiraling costs of public transportation without hearing and due
process.
The following memoranda, circulars and/or orders are sought to be nullified by the instant petition, viz: (a)
DOTC Memorandum Order 90-395, dated June 26, 1990 relative to the implementation of a fare range
scheme for provincial bus services in the country; (b) DOTC Department Order No.
92-587, dated March 30, 1992, defining the policy framework on the regulation of transport services; (c)
DOTC Memorandum dated October 8, 1992, laying down rules and procedures to implement Department
Order No. 92-587; (d) LTFRB Memorandum Circular No. 92-009, providing implementing guidelines on the
DOTC Department Order No. 92-587; and (e) LTFRB Order dated March 24, 1994 in Case No. 94-3112.
The relevant antecedents are as follows:
On June 26, 1990; then Secretary of DOTC, Oscar M. Orbos, issued Memorandum Circular No. 90-395 to
then LTFRB Chairman, Remedios A.S. Fernando allowing provincial bus operators to charge passengers
rates within a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year. The
text of the memorandum order reads in full:
One of the policy reforms and measures that is in line with the thrusts and the priorities
set out in the Medium-Term Philippine Development Plan (MTPDP) 1987 — 1992) is the
liberalization of regulations in the transport sector. Along this line, the Government
intends to move away gradually from regulatory policies and make progress towards
greater reliance on free market forces.
Based on several surveys and observations, bus companies are already charging
passenger rates above and below the official fare declared by LTFRB on many provincial
routes. It is in this context that some form of liberalization on public transport fares is to
be tested on a pilot basis.
In view thereof, the LTFRB is hereby directed to immediately publicize a fare range
scheme for all provincial bus routes in country (except those operating within Metro
Manila). Transport Operators shall be allowed to charge passengers within a range of
fifteen percent (15%) above and fifteen percent (15%) below the LTFRB official rate for a
period of one year.
Guidelines and procedures for the said scheme shall be prepared by LTFRB in
coordination with the DOTC Planning Service.
The implementation of the said fare range scheme shall start on 6 August 1990.
For compliance. (Emphasis ours.)
Finding the implementation of the fare range scheme "not legally feasible," Remedios A.S. Fernando
submitted the following memorandum to Oscar M. Orbos on July 24, 1990, to wit:
With reference to DOTC Memorandum Order No. 90-395 dated 26 June 1990 which the
LTFRB received on 19 July 1990, directing the Board "to immediately publicize a fare
range scheme for all provincial bus routes in the country (except those operating within
Metro Manila)" that will allow operators "to charge passengers within a range of fifteen
percent (15%) above and fifteen percent (15%) below the LTFRB official rate for a period
of one year" the undersigned is respectfully adverting the Secretary's attention to the
following for his consideration:
1. Section 16(c) of the Public Service Act prescribes the following for
the fixing and determination of rates — (a) the rates to be approved
should be proposed by public service operators; (b) there should be
a publication and notice to concerned or affected parties in the
territory affected; (c) a public hearing should be held for the fixing of
the rates; hence, implementation of the proposed fare range scheme
on August 6 without complying with the requirements of the Public
Service Act may not be legally feasible.
2. To allow bus operators in the country to charge fares fifteen (15%)

above the present LTFRB fares in the wake of the devastation, death
and suffering caused by the July 16 earthquake will not be socially
warranted and will be politically unsound; most likely public criticism
against the DOTC and the LTFRB will be triggered by the
untimely motu propioimplementation of the proposal by the mere
expedient of publicizing the fare range scheme without calling a
public hearing, which scheme many as early as during the
Secretary's predecessor know through newspaper reports and
columnists' comments to be Asian Development Bank and World
Bank inspired.
3. More than inducing a reduction in bus fares by fifteen percent

(15%) the implementation of the proposal will instead trigger an
upward adjustment in bus fares by fifteen percent (15%) at a time
when hundreds of thousands of people in Central and Northern
Luzon, particularly in Central Pangasinan, La Union, Baguio City,
Nueva Ecija, and the Cagayan Valley are suffering from the
devastation and havoc caused by the recent earthquake.
4. In lieu of the said proposal, the DOTC with its agencies involved in
public transportation can consider measures and reforms in the
industry that will be socially uplifting, especially for the people in the
areas devastated by the recent earthquake.
In view of the foregoing considerations, the undersigned respectfully suggests that the
implementation of the proposed fare range scheme this year be further studied and
evaluated.
On December 5, 1990, private respondent Provincial Bus Operators Association of the Philippines, Inc.
(PBOAP) filed an application for fare rate increase. An across-the-board increase of eight and a half
centavos (P0.085) per kilometer for all types of provincial buses with a minimum-maximum fare range of
fifteen (15%) percent over and below the proposed basic per kilometer fare rate, with the said minimum-
maximum fare range applying only to ordinary, first class and premium class buses and a fifty-centavo
(P0.50) minimum per kilometer fare for aircon buses, was sought.
On December 6, 1990, private respondent PBOAP reduced its applied proposed fare to an across-the-board
increase of six and a half (P0.065) centavos per kilometer for ordinary buses. The decrease was due to the
drop in the expected price of diesel.
The application was opposed by the Philippine Consumers Foundation, Inc. and Perla C. Bautista alleging
that the proposed rates were exorbitant and unreasonable and that the application contained no allegation on
the rate of return of the proposed increase in rates.
On December 14, 1990, public respondent LTFRB rendered a decision granting the fare rate increase in
accordance with the following schedule of fares on a straight computation method, viz:
AUTHORIZED FARES
LUZON
MIN. OF 5 KMS. SUCCEEDING KM.
REGULAR P1.50 P0.37

STUDENT P1.15 P0.28
VISAYAS/MINDANAO
REGULAR P1.60 P0.375

STUDENT P1.20 P0.285
FIRST CLASS (PER KM.)
LUZON P0.385
VISAYAS/
MINDANAO P0.395
PREMIERE CLASS (PER KM.)
LUZON P0.395
VISAYAS/
MINDANAO P0.405
AIRCON (PER KM.) P0.415.4
On March 30, 1992, then Secretary of the Department of Transportation and Communications Pete
Nicomedes Prado issued Department Order No.
92-587 defining the policy framework on the regulation of transport services. The full text of the said order is
reproduced below in view of the importance of the provisions contained therein:
WHEREAS, Executive Order No. 125 as amended, designates the Department of

Transportation and Communications (DOTC) as the primary policy, planning, regulating
and implementing agency on transportation;
WHEREAS, to achieve the objective of a viable, efficient, and dependable transportation

system, the transportation regulatory agencies under or attached to the DOTC have to
harmonize their decisions and adopt a common philosophy and direction;
WHEREAS, the government proposes to build on the successful liberalization measures

pursued over the last five years and bring the transport sector nearer to a balanced
longer term regulatory framework;
NOW, THEREFORE, pursuant to the powers granted by laws to the DOTC, the following
policies and principles in the economic regulation of land, air, and water transportation
services are hereby adopted:
1. Entry into and exit out of the industry. Following the Constitutional dictum against
monopoly, no franchise holder shall be permitted to maintain a monopoly on any route. A
minimum of two franchise holders shall be permitted to operate on any route.
The requirements to grant a certificate to operate, or certificate of public convenience,

shall be: proof of Filipino citizenship, financial capability, public need, and sufficient
insurance cover to protect the riding public.
In determining public need, the presumption of need for a service shall be deemed in
favor of the applicant. The burden of proving that there is no need for a proposed service
shall be with the oppositor(s).
In the interest of providing efficient public transport services, the use of the "prior
operator" and the "priority of filing" rules shall be discontinued. The route measured
capacity test or other similar tests of demand for vehicle/vessel fleet on any route shall
be used only as a guide in weighing the merits of each franchise application and not as a
limit to the services offered.
Where there are limitations in facilities, such as congested road space in urban areas, or
at airports and ports, the use of demand management measures in conformity with
market principles may be considered.
The right of an operator to leave the industry is recognized as a business decision,

subject only to the filing of appropriate notice and following a phase-out period, to inform
the public and to minimize disruption of services.
2. Rate and Fare Setting. Freight rates shall be freed gradually from government
controls. Passenger fares shall also be deregulated, except for the lowest class of
passenger service (normally third class passenger transport) for which the government
will fix indicative or reference fares. Operators of particular services may fix their own
fares within a range 15% above and below the indicative or reference rate.
Where there is lack of effective competition for services, or on specific routes, or for the
transport of particular commodities, maximum mandatory freight rates or passenger fares
shall be set temporarily by the government pending actions to increase the level of
competition.
For unserved or single operator routes, the government shall contract such services in
the most advantageous terms to the public and the government, following public bids for
the services. The advisability of bidding out the services or using other kinds of
incentives on such routes shall be studied by the government.
3. Special Incentives and Financing for Fleet Acquisition. As a matter of policy, the
government shall not engage in special financing and incentive programs, including
direct subsidies for fleet acquisition and expansion. Only when the market situation
warrants government intervention shall programs of this type be considered. Existing
programs shall be phased out gradually.
The Land Transportation Franchising and Regulatory Board, the Civil Aeronautics Board,
the Maritime Industry Authority are hereby directed to submit to the Office of the
Secretary, within forty-five (45) days of this Order, the detailed rules and procedures for
the Implementation of the policies herein set forth. In the formulation of such rules, the
concerned agencies shall be guided by the most recent studies on the subjects, such as
the Provincial Road Passenger Transport Study, the Civil Aviation Master Plan, the
Presidential Task Force on the Inter-island Shipping Industry, and the Inter-island Liner
Shipping Rate Rationalization Study.
For the compliance of all concerned. (Emphasis ours)
On October 8, 1992, public respondent Secretary of the Department of Transportation and Communications
Jesus B. Garcia, Jr. issued a memorandum to the Acting Chairman of the LTFRB suggesting swift action on
the adoption of rules and procedures to implement above-quoted Department Order No. 92-587 that laid
down deregulation and other liberalization policies for the transport sector. Attached to the said
memorandum was a revised draft of the required rules and procedures covering (i) Entry Into and Exit Out of
the Industry and (ii) Rate and Fare Setting, with comments and suggestions from the World Bank
incorporated therein. Likewise, resplendent from the said memorandum is the statement of the DOTC
Secretary that the adoption of the rules and procedures is a pre-requisite to the approval of the Economic
Integration Loan from the World Bank.5
On February 17, 1993, the LTFRB issued Memorandum Circular

No. 92-009 promulgating the guidelines for the implementation of DOTC Department Order No. 92-587. The
Circular provides, among others, the following challenged portions:
xxx xxx xxx
IV. Policy Guidelines on the Issuance of Certificate of Public Convenience.
The issuance of a Certificate of Public Convenience is determined by public need. The

presumption of public need for a service shall be deemed in favor of the applicant, while
burden of proving that there is no need for the proposed service shall be the
oppositor'(s).
xxx xxx xxx
V. Rate and Fare Setting
The control in pricing shall be liberalized to introduce price competition complementary

with the quality of service, subject to prior notice and public hearing. Fares shall not be
provisionally authorized without public hearing.
A. On the General Structure of Rates
1. The existing authorized fare range system of plus or minus 15 per cent for provincial
buses and jeepneys shall be widened to 20% and -25% limit in 1994 with the authorized
fare to be replaced by an indicative or reference rate as the basis for the expanded fare
range.
2. Fare systems for aircon buses are liberalized to cover first class and premier services.
xxx xxx xxx
(Emphasis ours).
Sometime in March, 1994, private respondent PBOAP, availing itself of the deregulation policy of the DOTC
allowing provincial bus operators to collect plus 20% and minus 25% of the prescribed fare without first
having filed a petition for the purpose and without the benefit of a public hearing, announced a fare increase
of twenty (20%) percent of the existing fares. Said increased fares were to be made effective on March 16,
1994.
On March 16, 1994, petitioner KMU filed a petition before the LTFRB opposing the upward adjustment of bus
fares.
On March 24, 1994, the LTFRB issued one of the assailed orders dismissing the petition for lack of merit.
The dispositive portion reads:
PREMISES CONSIDERED, this Board after considering the arguments of the parties,
hereby DISMISSES FOR LACK OF MERIT the petition filed in the above-entitled case.
This petition in this case was resolved with dispatch at the request of petitioner to enable
it to immediately avail of the legal remedies or options it is entitled under existing laws.
SO ORDERED.6
Hence, the instant petition for certiorari with an urgent prayer for issuance of a temporary restraining order.
The Court, on June 20, 1994, issued a temporary restraining order enjoining, prohibiting and preventing
respondents from implementing the bus fare rate increase as well as the questioned orders and
memorandum circulars. This meant that provincial bus fares were rolled back to the levels duly authorized by
the LTFRB prior to March 16, 1994. A moratorium was likewise enforced on the issuance of franchises for
the operation of buses, jeepneys, and taxicabs.
Petitioner KMU anchors its claim on two (2) grounds. First, the authority given by respondent LTFRB to
provincial bus operators to set a fare range of plus or minus fifteen (15%) percent, later increased to plus
twenty (20%) and minus twenty-five (-25%) percent, over and above the existing authorized fare without
having to file a petition for the purpose, is unconstitutional, invalid and illegal. Second, the establishment of a
presumption of public need in favor of an applicant for a proposed transport service without having to prove
public necessity, is illegal for being violative of the Public Service Act and the Rules of Court.
In its Comment, private respondent PBOAP, while not actually touching upon the issues raised by the
petitioner, questions the wisdom and the manner by which the instant petition was filed. It asserts that the
petitioner has no legal standing to sue or has no real interest in the case at bench and in obtaining the reliefs
prayed for.
In their Comment filed by the Office of the Solicitor General, public respondents DOTC Secretary Jesus B.
Garcia, Jr. and the LTFRB asseverate that the petitioner does not have the standing to maintain the instant
suit. They further claim that it is within DOTC and LTFRB's authority to set a fare range scheme and
establish a presumption of public need in applications for certificates of public convenience.
We find the instant petition impressed with merit.
At the outset, the threshold issue of locus standi must be struck. Petitioner KMU has the standing to sue.
The requirement of locus standi inheres from the definition of judicial power. Section 1 of Article VIII of the
Constitution provides:
xxx xxx xxx
Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether
or not there has been a grave abuse of discretion amounting to lack or excess of
jurisdiction on the part of any branch or instrumentality of the Government.
In Lamb v. Phipps,7 we ruled that judicial power is the power to hear and decide causes pending between
parties who have the right to sue in the courts of law and equity. Corollary to this provision is the principle
of locus standi of a party litigant. One who is directly affected by and whose interest is immediate and
substantial in the controversy has the standing to sue. The rule therefore requires that a party must show a
personal stake in the outcome of the case or an injury to himself that can be redressed by a favorable
decision so as to warrant an invocation of the court's jurisdiction and to justify the exercise of the court's
remedial powers in his behalf.8
In the case at bench, petitioner, whose members had suffered and continue to suffer grave and irreparable
injury and damage from the implementation of the questioned memoranda, circulars and/or orders, has
shown that it has a clear legal right that was violated and continues to be violated with the enforcement of the
challenged memoranda, circulars and/or orders. KMU members, who avail of the use of buses, trains and
jeepneys everyday, are directly affected by the burdensome cost of arbitrary increase in passenger fares.
They are part of the millions of commuters who comprise the riding public. Certainly, their rights must be
protected, not neglected nor ignored.
Assuming arguendo that petitioner is not possessed of the standing to sue, this court is ready to brush aside
this barren procedural infirmity and recognize the legal standing of the petitioner in view of the transcendental
importance of the issues raised. And this act of liberality is not without judicial precedent. As early as
the Emergency Powers Cases, this Court had exercised its discretion and waived the requirement of proper
party. In the recent case of Kilosbayan, Inc., et al. v. Teofisto Guingona, Jr., et al.,9 we ruled in the same lines
and enumerated some of the cases where the same policy was adopted, viz:
. . . A party's standing before this Court is a procedural technicality which it may, in the
exercise of its discretion, set aside in view of the importance of the issues raised. In the
landmark Emergency Powers Cases, [G.R. No. L-2044 (Araneta v. Dinglasan); G.R. No.
L-2756 (Araneta
v. Angeles); G.R. No. L-3054 (Rodriguez v. Tesorero de Filipinas); G.R. No. L-3055
(Guerrero v. Commissioner of Customs); and G.R. No. L-3056 (Barredo v. Commission
on Elections), 84 Phil. 368 (1949)], this Court brushed aside this technicality because
"the transcendental importance to the public of these cases demands that they be settled
promptly and definitely, brushing aside, if we must, technicalities of procedure. (Avelino
vs. Cuenco, G.R. No. L-2621)." Insofar as taxpayers' suits are concerned, this Court had
declared that it "is not devoid of discretion as to whether or not it should be entertained,"
(Tan v. Macapagal, 43 SCRA 677, 680 [1972]) or that it "enjoys an open discretion to
entertain the same or not." [Sanidad v. COMELEC, 73 SCRA 333 (1976)].
xxx xxx xxx
In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of
Congress, and even association of planters, and
non-profit civic organizations were allowed to initiate and prosecute actions before this
court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders
of various government agencies or instrumentalities. Among such cases were those
assailing the constitutionality of (a) R.A. No. 3836 insofar as it allows retirement gratuity
and commutation of vacation and sick leave to Senators and Representatives and to
elective officials of both Houses of Congress (Philippine Constitution Association, Inc. v.
Gimenez, 15 SCRA 479 [1965]); (b) Executive Order No. 284, issued by President
Corazon C. Aquino on 25 July 1987, which allowed members of the cabinet, their
undersecretaries, and assistant secretaries to hold other government offices or positions
(Civil Liberties Union v. Executive Secretary, 194 SCRA 317 [1991]); (c) the automatic
appropriation for debt service in the General Appropriations Act (Guingona v. Carague,
196 SCRA 221 [1991]; (d) R.A. No. 7056 on the holding of desynchronized elections
(Osmeña v. Commission on Elections, 199 SCRA 750 [1991]); (e) P.D. No. 1869 (the
charter of the Philippine Amusement and Gaming Corporation) on the ground that it is
contrary to morals, public policy, and order (Basco v. Philippine Amusement and Gaming
Corp., 197 SCRA 52 [1991]); and (f) R.A. No. 6975, establishing the Philippine National
Police. (Carpio v. Executive Secretary, 206 SCRA 290 [1992]).
Other cases where we have followed a liberal policy regarding locus standi include those
attacking the validity or legality of (a) an order allowing the importation of rice in the light
of the prohibition imposed by R.A. No. 3452 (Iloilo Palay and Corn Planters Association,
Inc. v. Feliciano, 13 SCRA 377 [1965]; (b) P.D. Nos. 991 and 1033 insofar as they
proposed amendments to the Constitution and P.D. No. 1031 insofar as it directed the
COMELEC to supervise, control, hold, and conduct the referendum-plebiscite on 16
October 1976 (Sanidad v. Commission on Elections, supra); (c) the bidding for the sale
of the 3,179 square meters of land at Roppongi, Minato-ku, Tokyo, Japan (Laurel v.
Garcia, 187 SCRA 797 [1990]); (d) the approval without hearing by the Board of
Investments of the amended application of the Bataan Petrochemical Corporation to
transfer the site of its plant from Bataan to Batangas and the validity of such transfer and
the shift of feedstock from naphtha only to naphtha and/or liquefied petroleum gas
(Garcia v. Board of Investments, 177 SCRA 374 [1989]; Garcia v. Board of Investments,
191 SCRA 288 [1990]); (e) the decisions, orders, rulings, and resolutions of the
Executive Secretary, Secretary of Finance, Commissioner of Internal Revenue,
Commissioner of Customs, and the Fiscal Incentives Review Board exempting the
National Power Corporation from indirect tax and duties (Maceda v. Macaraig, 197 SCRA
771 [1991]); (f) the orders of the Energy Regulatory Board of 5 and 6 December 1990 on
the ground that the hearings conducted on the second provisional increase in oil prices
did not allow the petitioner substantial cross-examination; (Maceda v. Energy Regulatory
Board, 199 SCRA 454 [1991]); (g) Executive Order No. 478 which levied a special duty
of P0.95 per liter of imported oil products (Garcia v. Executive Secretary, 211 SCRA 219
[1992]); (h) resolutions of the Commission on Elections concerning the apportionment, by
district, of the number of elective members of Sanggunians (De Guia vs. Commission on
Elections, 208 SCRA 420 [1992]); and (i) memorandum orders issued by a Mayor
affecting the Chief of Police of Pasay City (Pasay Law and Conscience Union, Inc. v.
Cuneta, 101 SCRA 662 [1980]).
In the 1975 case of Aquino v. Commission on Elections (62 SCRA 275 [1975]), this
Court, despite its unequivocal ruling that the petitioners therein had no personality to file
the petition, resolved nevertheless to pass upon the issues raised because of the far-
reaching implications of the petition. We did no less in De Guia v. COMELEC
(Supra) where, although we declared that De Guia "does not appear to have locus
standi, a standing in law, a personal or substantial interest," we brushed aside the
procedural infirmity "considering the importance of the issue involved, concerning as it
does the political exercise of qualified voters affected by the apportionment, and
petitioner alleging abuse of discretion and violation of the Constitution by respondent."
Now on the merits of the case.
On the fare range scheme.
Section 16(c) of the Public Service Act, as amended, reads:
Sec. 16. Proceedings of the Commission, upon notice and hearing. — The Commission
shall have power, upon proper notice and hearing in accordance with the rules and
provisions of this Act, subject to the limitations and exceptions mentioned and saving
provisions to the contrary:
xxx xxx xxx
(c) To fix and determine individual or joint rates, tolls, charges, classifications, or
schedules thereof, as well as commutation, mileage kilometrage, and other special rates
which shall be imposed, observed, and followed thereafter by any public
service: Provided, That the Commission may, in its discretion, approve rates proposed by
public services provisionally and without necessity of any hearing; but it shall call a
hearing thereon within thirty days thereafter, upon publication and notice to the concerns
operating in the territory affected: Provided, further, That in case the public service
equipment of an operator is used principally or secondarily for the promotion of a private
business, the net profits of said private business shall be considered in relation with the
public service of such operator for the purpose of fixing the rates. (Emphasis ours).
xxx xxx xxx
Under the foregoing provision, the Legislature delegated to the defunct Public Service Commission
the power of fixing the rates of public services. Respondent LTFRB, the existing regulatory body
today, is likewise vested with the same under Executive Order No. 202 dated June 19, 1987.
Section 5(c) of the said executive order authorizes LTFRB "to determine, prescribe, approve and
periodically review and adjust, reasonable fares, rates and other related charges, relative to the
operation of public land transportation services provided by motorized vehicles."
Such delegation of legislative power to an administrative agency is permitted in order to adapt to the
increasing complexity of modern life. As subjects for governmental regulation multiply, so does the difficulty
of administering the laws. Hence, specialization even in legislation has become necessary. Given the task of
determining sensitive and delicate matters as
route-fixing and rate-making for the transport sector, the responsible regulatory body is entrusted with the
power of subordinate legislation. With this authority, an administrative body and in this case, the LTFRB, may
implement broad policies laid down in a statute by "filling in" the details which the Legislature may neither
have time or competence to provide. However, nowhere under the aforesaid provisions of law are the
regulatory bodies, the PSC and LTFRB alike, authorized to delegate that power to a common carrier, a
transport operator, or other public service.
In the case at bench, the authority given by the LTFRB to the provincial bus operators to set a fare range
over and above the authorized existing fare, is illegal and invalid as it is tantamount to an undue delegation
of legislative authority. Potestas delegata non delegari potest. What has been delegated cannot be
delegated. This doctrine is based on the ethical principle that such a delegated power constitutes not only a
right but a duty to be performed by the delegate through the instrumentality of his own judgment and not
through the intervening mind of another.10 A further delegation of such power would indeed constitute a
negation of the duty in violation of the trust reposed in the delegate mandated to discharge it directly. 11 The
policy of allowing the provincial bus operators to change and increase their fares at will would result not only
to a chaotic situation but to an anarchic state of affairs. This would leave the riding public at the mercy of
transport operators who may increase fares every hour, every day, every month or every year, whenever it
pleases them or whenever they deem it "necessary" to do so. In Panay Autobus Co. v. Philippine Railway
Co.,12 where respondent Philippine Railway Co. was granted by the Public Service Commission the authority
to change its freight rates at will, this Court categorically declared that:
In our opinion, the Public Service Commission was not authorized by law to delegate to
the Philippine Railway Co. the power of altering its freight rates whenever it should find it
necessary to do so in order to meet the competition of road trucks and autobuses, or to
change its freight rates at will, or to regard its present rates as maximum rates, and to fix
lower rates whenever in the opinion of the Philippine Railway Co. it would be to its
advantage to do so.
The mere recital of the language of the application of the Philippine Railway Co. is
enough to show that it is untenable. The Legislature has delegated to the Public Service
Commission the power of fixing the rates of public services, but it has not authorized the
Public Service Commission to delegate that power to a common carrier or other public
service. The rates of public services like the Philippine Railway Co. have been approved
or fixed by the Public Service Commission, and any change in such rates must be
authorized or approved by the Public Service Commission after they have been shown to
be just and reasonable. The public service may, of course, propose new rates, as the
Philippine Railway Co. did in case No. 31827, but it cannot lawfully make said new rates
effective without the approval of the Public Service Commission, and the Public Service
Commission itself cannot authorize a public service to enforce new rates without the prior
approval of said rates by the commission. The commission must approve new rates
when they are submitted to it, if the evidence shows them to be just and reasonable,
otherwise it must disapprove them. Clearly, the commission cannot determine in advance
whether or not the new rates of the Philippine Railway Co. will be just and reasonable,
because it does not know what those rates will be.
In the present case the Philippine Railway Co. in effect asked for permission to change
its freight rates at will. It may change them every day or every hour, whenever it deems it
necessary to do so in order to meet competition or whenever in its opinion it would be to
its advantage. Such a procedure would create a most unsatisfactory state of affairs and
largely defeat the purposes of the public service law.13(Emphasis ours).
One veritable consequence of the deregulation of transport fares is a compounded fare. If transport
operators will be authorized to impose and collect an additional amount equivalent to 20% over and above
the authorized fare over a period of time, this will unduly prejudice a commuter who will be made to pay a
fare that has been computed in a manner similar to those of compounded bank interest rates.
Picture this situation. On December 14, 1990, the LTFRB authorized provincial bus operators to collect a
thirty-seven (P0.37) centavo per kilometer fare for ordinary buses. At the same time, they were allowed to
impose and collect a fare range of plus or minus 15% over the authorized rate. Thus P0.37 centavo per
kilometer authorized fare plus P0.05 centavos (which is 15% of P0.37 centavos) is equivalent to P0.42
centavos, the allowed rate in 1990. Supposing the LTFRB grants another five (P0.05) centavo increase per
kilometer in 1994, then, the base or reference for computation would have to be P0.47 centavos (which is
P0.42 + P0.05 centavos). If bus operators will exercise their authority to impose an additional 20% over and
above the authorized fare, then the fare to be collected shall amount to P0.56 (that is, P0.47 authorized
LTFRB rate plus 20% of P0.47 which is P0.29). In effect, commuters will be continuously subjected, not only
to a double fare adjustment but to a compounding fare as well. On their part, transport operators shall enjoy
a bigger chunk of the pie. Aside from fare increase applied for, they can still collect an additional amount by
virtue of the authorized fare range. Mathematically, the situation translates into the following:
Year** LTFRB authorized Fare Range Fare to be

rate*** collected per
kilometer
1990 P0.37 15% (P0.05) P0.42

1994 P0.42 + 0.05 = 0.47 20% (P0.09) P0.56
1998 P0.56 + 0.05 = 0.61 20% (P0.12) P0.73
2002 P0.73 + 0.05 = 0.78 20% (P0.16) P0.94
Moreover, rate making or rate fixing is not an easy task. It is a delicate and sensitive government function
that requires dexterity of judgment and sound discretion with the settled goal of arriving at a just and
reasonable rate acceptable to both the public utility and the public. Several factors, in fact, have to be taken
into consideration before a balance could be achieved. A rate should not be confiscatory as would place an
operator in a situation where he will continue to operate at a loss. Hence, the rate should enable public
utilities to generate revenues sufficient to cover operational costs and provide reasonable return on the
investments. On the other hand, a rate which is too high becomes discriminatory. It is contrary to public
interest. A rate, therefore, must be reasonable and fair and must be affordable to the end user who will utilize
the services.
Given the complexity of the nature of the function of rate-fixing and its far-reaching effects on millions of
commuters, government must not relinquish this important function in favor of those who would benefit and
profit from the industry. Neither should the requisite notice and hearing be done away with. The people,
represented by reputable oppositors, deserve to be given full opportunity to be heard in their opposition to
any fare increase.
The present administrative procedure, 14 to our mind, already mirrors an orderly and satisfactory
arrangement for all parties involved. To do away with such a procedure and allow just one party, an
interested party at that, to determine what the rate should be, will undermine the right of the other parties to
due process. The purpose of a hearing is precisely to determine what a just and reasonable rate
is.15 Discarding such procedural and constitutional right is certainly inimical to our fundamental law and to
public interest.
On the presumption of public need.
A certificate of public convenience (CPC) is an authorization granted by the LTFRB for the operation of land
transportation services for public use as required by law. Pursuant to Section 16(a) of the Public Service Act,
as amended, the following requirements must be met before a CPC may be granted, to wit: (i) the applicant
must be a citizen of the Philippines, or a corporation or co-partnership, association or joint-stock company
constituted and organized under the laws of the Philippines, at least 60 per centum of its stock or paid-up
capital must belong entirely to citizens of the Philippines; (ii) the applicant must be financially capable of
undertaking the proposed service and meeting the responsibilities incident to its operation; and (iii) the
applicant must prove that the operation of the public service proposed and the authorization to do business
will promote the public interest in a proper and suitable manner. It is understood that there must be proper
notice and hearing before the PSC can exercise its power to issue a CPC.
While adopting in toto the foregoing requisites for the issuance of a CPC, LTFRB Memorandum Circular No.
92-009, Part IV, provides for yet incongruous and contradictory policy guideline on the issuance of a CPC.
The guidelines states:
The issuance of a Certificate of Public Convenience is determined by public need. The

presumption of public need for a service shall be deemed in favor of the applicant, while
the burden of proving that there is no need for the proposed service shall be the
oppositor's. (Emphasis ours).
The above-quoted provision is entirely incompatible and inconsistent with Section 16(c)(iii) of the Public
Service Act which requires that before a CPC will be issued, the applicant must prove by proper notice and
hearing that the operation of the public service proposed will promote public interest in a proper and suitable
manner. On the contrary, the policy guideline states that the presumption of public need for a public service
shall be deemed in favor of the applicant. In case of conflict between a statute and an administrative order,
the former must prevail.
By its terms, public convenience or necessity generally means something fitting or suited to the public
need.16 As one of the basic requirements for the grant of a CPC, public convenience and necessity exists
when the proposed facility or service meets a reasonable want of the public and supply a need which the
existing facilities do not adequately supply. The existence or
non-existence of public convenience and necessity is therefore a question of fact that must be established by
evidence, real and/or testimonial; empirical data; statistics and such other means necessary, in a public
hearing conducted for that purpose. The object and purpose of such procedure, among other things, is to
look out for, and protect, the interests of both the public and the existing transport operators.
Verily, the power of a regulatory body to issue a CPC is founded on the condition that after full-dress hearing
and investigation, it shall find, as a fact, that the proposed operation is for the convenience of the
public.17 Basic convenience is the primary consideration for which a CPC is issued, and that fact alone must
be consistently borne in mind. Also, existing operators in subject routes must be given an opportunity to offer
proof and oppose the application. Therefore, an applicant must, at all times, be required to prove his capacity
and capability to furnish the service which he has undertaken to
render. 18 And all this will be possible only if a public hearing were conducted for that purpose.
Otherwise stated, the establishment of public need in favor of an applicant reverses well-settled and
institutionalized judicial, quasi-judicial and administrative procedures. It allows the party who initiates the
proceedings to prove, by mere application, his affirmative allegations. Moreover, the offending provisions of
the LTFRB memorandum circular in question would in effect amend the Rules of Court by adding another
disputable presumption in the enumeration of 37 presumptions under Rule 131, Section 5 of the Rules of
Court. Such usurpation of this Court's authority cannot be countenanced as only this Court is mandated by
law to promulgate rules concerning pleading, practice and procedure. 19
Deregulation, while it may be ideal in certain situations, may not be ideal at all in our country given the
present circumstances. Advocacy of liberalized franchising and regulatory process is tantamount to an
abdication by the government of its inherent right to exercise police power, that is, the right of government to
regulate public utilities for protection of the public and the utilities themselves.
While we recognize the authority of the DOTC and the LTFRB to issue administrative orders to regulate the
transport sector, we find that they committed grave abuse of discretion in issuing DOTC Department Order
No. 92-587 defining the policy framework on the regulation of transport services and LTFRB Memorandum
Circular No. 92-009 promulgating the implementing guidelines on DOTC Department Order No. 92-587, the
said administrative issuances being amendatory and violative of the Public Service Act and the Rules of
Court. Consequently, we rule that the twenty (20%) per centum fare increase imposed by respondent
PBOAP on March 16, 1994 without the benefit of a petition and a public hearing is null and void and of no
force and effect. No grave abuse of discretion however was committed in the issuance of DOTC
Memorandum Order No. 90-395 and DOTC Memorandum dated October 8, 1992, the same being merely
internal communications between administrative officers.
WHEREFORE, in view of the foregoing, the instant petition is hereby GRANTED and the challenged
administrative issuances and orders, namely: DOTC Department Order No. 92-587, LTFRB Memorandum
Circular
No. 92-009, and the order dated March 24, 1994 issued by respondent LTFRB are hereby DECLARED
contrary to law and invalid insofar as they affect provisions therein (a) delegating to provincial bus and
jeepney operators the authority to increase or decrease the duly prescribed transportation fares; and (b)
creating a presumption of public need for a service in favor of the applicant for a certificate of public
convenience and placing the burden of proving that there is no need for the proposed service to the
oppositor.
The Temporary Restraining Order issued on June 20, 1994 is hereby MADE PERMANENT insofar as it
enjoined the bus fare rate increase granted under the provisions of the aforementioned administrative
circulars, memoranda and/or orders declared invalid.
No pronouncement as to costs.
SO ORDERED.
Padilla, Davide, Jr., Bellosillo and Quiason, JJ., concur.
EN BANC
G.R. No. 141284 August 15, 2000
INTEGRATED BAR OF THE PHILIPPINES, petitioner,

vs.
HON. RONALDO B. ZAMORA, GEN. PANFILO M. LACSON, GEN. EDGAR B. AGLIPAY, and GEN.
ANGELO REYES, respondents.
DECISION
KAPUNAN, J.:
At bar is a special civil action for certiorari and prohibition with prayer for issuance of a temporary restraining
order seeking to nullify on constitutional grounds the order of President Joseph Ejercito Estrada commanding
the deployment of the Philippine Marines (the "Marines") to join the Philippine National Police (the "PNP") in
visibility patrols around the metropolis.
In view of the alarming increase in violent crimes in Metro Manila, like robberies, kidnappings and
carnappings, the President, in a verbal directive, ordered the PNP and the Marines to conduct joint visibility
patrols for the purpose of crime prevention and suppression. The Secretary of National Defense, the Chief of
Staff of the Armed Forces of the Philippines (the "AFP"), the Chief of the PNP and the Secretary of the
Interior and Local Government were tasked to execute and implement the said order. In compliance with the
presidential mandate, the PNP Chief, through Police Chief Superintendent Edgar B. Aglipay, formulated
Letter of Instruction 02/20001 (the "LOI") which detailed the manner by which the joint visibility patrols, called
Task Force Tulungan, would be conducted.2 Task Force Tulungan was placed under the leadership of the
Police Chief of Metro Manila.
Subsequently, the President confirmed his previous directive on the deployment of the Marines in a
Memorandum, dated 24 January 2000, addressed to the Chief of Staff of the AFP and the PNP Chief. 3 In the
Memorandum, the President expressed his desire to improve the peace and order situation in Metro Manila
through a more effective crime prevention program including increased police patrols. 4 The President further
stated that to heighten police visibility in the metropolis, augmentation from the AFP is necessary. 5 Invoking
his powers as Commander-in-Chief under Section 18, Article VII of the Constitution, the President directed
the AFP Chief of Staff and PNP Chief to coordinate with each other for the proper deployment and utilization
of the Marines to assist the PNP in preventing or suppressing criminal or lawless violence.6 Finally, the
President declared that the services of the Marines in the anti-crime campaign are merely temporary in
nature and for a reasonable period only, until such time when the situation shall have improved. 7
The LOI explains the concept of the PNP-Philippine Marines joint visibility patrols as follows:
xxx
2. PURPOSE:
The Joint Implementing Police Visibility Patrols between the PNP NCRPO and the Philippine Marines
partnership in the conduct of visibility patrols in Metro Manila for the suppression of crime prevention and
other serious threats to national security.
3. SITUATION:
Criminal incidents in Metro Manila have been perpetrated not only by ordinary criminals but also by
organized syndicates whose members include active and former police/military personnel whose training,
skill, discipline and firepower prove well-above the present capability of the local police alone to handle. The
deployment of a joint PNP NCRPO-Philippine Marines in the conduct of police visibility patrol in urban areas
will reduce the incidence of crimes specially those perpetrated by active or former police/military personnel.
4. MISSION:
The PNP NCRPO will organize a provisional Task Force to conduct joint NCRPO-PM visibility patrols to keep
Metro Manila streets crime-free, through a sustained street patrolling to minimize or eradicate all forms of
high-profile crimes especially those perpetrated by organized crime syndicates whose members include
those that are well-trained, disciplined and well-armed active or former PNP/Military personnel.
5. CONCEPT IN JOINT VISIBILITY PATROL OPERATIONS:
a. The visibility patrols shall be conducted jointly by the NCRPO [National Capital Regional Police
Office] and the Philippine Marines to curb criminality in Metro Manila and to preserve the internal
security of the state against insurgents and other serious threat to national security, although the
primary responsibility over Internal Security Operations still rests upon the AFP.
b. The principle of integration of efforts shall be applied to eradicate all forms of high-profile crimes
perpetrated by organized crime syndicates operating in Metro Manila. This concept requires the
military and police to work cohesively and unify efforts to ensure a focused, effective and holistic
approach in addressing crime prevention. Along this line, the role of the military and police aside
from neutralizing crime syndicates is to bring a wholesome atmosphere wherein delivery of basic
services to the people and development is achieved. Hand-in-hand with this joint NCRPO-
Philippine Marines visibility patrols, local Police Units are responsible for the maintenance of peace
and order in their locality.
c. To ensure the effective implementation of this project, a provisional Task Force "TULUNGAN"
shall be organized to provide the mechanism, structure, and procedures for the integrated
planning, coordinating, monitoring and assessing the security situation.
xxx.8
The selected areas of deployment under the LOI are: Monumento Circle, North Edsa (SM City), Araneta
Shopping Center, Greenhills, SM Megamall, Makati Commercial Center, LRT/MRT Stations and the NAIA
and Domestic Airport.9
On 17 January 2000, the Integrated Bar of the Philippines (the "IBP") filed the instant petition to annul LOI
02/2000 and to declare the deployment of the Philippine Marines, null and void and unconstitutional, arguing
that:
THE DEPLOYMENT OF THE PHILIPPINE MARINES IN METRO MANILA IS VIOLATIVE OF THE

CONSTITUTION, IN THAT:
A) NO EMERGENCY SITUATION OBTAINS IN METRO MANILA AS WOULD JUSTIFY, EVEN

ONLY REMOTELY, THE DEPLOYMENT OF SOLDIERS FOR LAW ENFORCEMENT WORK;
HENCE, SAID DEPLOYMENT IS IN DEROGATION OF ARTICLE II, SECTION 3 OF THE
CONSTITUTION;
B) SAID DEPLOYMENT CONSTITUTES AN INSIDIOUS INCURSION BY THE MILITARY IN A

CIVILIAN FUNCTION OF GOVERNMENT (LAW ENFORCEMENT) IN DEROGATION OF
ARTICLE XVI, SECTION 5 (4), OF THE CONSTITUTION;
C) SAID DEPLOYMENT CREATES A DANGEROUS TENDENCY TO RELY ON THE MILITARY

TO PERFORM THE CIVILIAN FUNCTIONS OF THE GOVERNMENT.
II
IN MILITARIZING LAW ENFORCEMENT IN METRO MANILA, THE ADMINISTRATION IS UNWITTINGLY

MAKING THE MILITARY MORE POWERFUL THAN WHAT IT SHOULD REALLY BE UNDER THE
CONSTITUTION.10
Asserting itself as the official organization of Filipino lawyers tasked with the bounden duty to uphold the rule
of law and the Constitution, the IBP questions the validity of the deployment and utilization of the Marines to
assist the PNP in law enforcement.
Without granting due course to the petition, the Court in a Resolution,11 dated 25 January 2000, required the
Solicitor General to file his Comment on the petition. On 8 February 2000, the Solicitor General submitted his
Comment.
The Solicitor General vigorously defends the constitutionality of the act of the President in deploying the
Marines, contending, among others, that petitioner has no legal standing; that the question of deployment of
the Marines is not proper for judicial scrutiny since the same involves a political question; that the
organization and conduct of police visibility patrols, which feature the team-up of one police officer and one
Philippine Marine soldier, does not violate the civilian supremacy clause in the Constitution.
The issues raised in the present petition are: (1) Whether or not petitioner has legal standing; (2) Whether or
not the President’s factual determination of the necessity of calling the armed forces is subject to judicial
review; and, (3) Whether or not the calling of the armed forces to assist the PNP in joint visibility patrols
violates the constitutional provisions on civilian supremacy over the military and the civilian character of the
PNP.
First, petitioner failed to sufficiently show that it is in possession of the requisites of standing to raise the
issues in the petition. Second, the President did not commit grave abuse of discretion amounting to lack or
excess of jurisdiction nor did he commit a violation of the civilian supremacy clause of the Constitution.
The power of judicial review is set forth in Section 1, Article VIII of the Constitution, to wit:
Section 1. The judicial power shall be vested in one Supreme Court and in such lower courts as may be
established by law.
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which
are legally demandable and enforceable, and to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the
Government.
When questions of constitutional significance are raised, the Court can exercise its power of judicial review
only if the following requisites are complied with, namely: (1) the existence of an actual and appropriate case;
(2) a personal and substantial interest of the party raising the constitutional question; (3) the exercise of
judicial review is pleaded at the earliest opportunity; and (4) the constitutional question is the lis mota of the
case.12
The IBP has not sufficiently complied with the requisites of standing in this case.
"Legal standing" or locus standi has been defined as a personal and substantial interest in the case such that
the party has sustained or will sustain direct injury as a result of the governmental act that is being
challenged.13 The term "interest" means a material interest, an interest in issue affected by the decree, as
distinguished from mere interest in the question involved, or a mere incidental interest.14 The gist of the
question of standing is whether a party alleges "such personal stake in the outcome of the controversy as to
assure that concrete adverseness which sharpens the presentation of issues upon which the court depends
for illumination of difficult constitutional questions."15
In the case at bar, the IBP primarily anchors its standing on its alleged responsibility to uphold the rule of law
and the Constitution. Apart from this declaration, however, the IBP asserts no other basis in support of
its locus standi. The mere invocation by the IBP of its duty to preserve the rule of law and nothing more,
while undoubtedly true, is not sufficient to clothe it with standing in this case. This is too general an interest
which is shared by other groups and the whole citizenry. Based on the standards above-stated, the IBP has
failed to present a specific and substantial interest in the resolution of the case. Its fundamental purpose
which, under Section 2, Rule 139-A of the Rules of Court, is to elevate the standards of the law profession
and to improve the administration of justice is alien to, and cannot be affected by the deployment of the
Marines. It should also be noted that the interest of the National President of the IBP who signed the petition,
is his alone, absent a formal board resolution authorizing him to file the present action. To be sure, members
of the BAR, those in the judiciary included, have varying opinions on the issue. Moreover, the IBP, assuming
that it has duly authorized the National President to file the petition, has not shown any specific injury which it
has suffered or may suffer by virtue of the questioned governmental act. Indeed, none of its members, whom
the IBP purportedly represents, has sustained any form of injury as a result of the operation of the joint
visibility patrols. Neither is it alleged that any of its members has been arrested or that their civil liberties have
been violated by the deployment of the Marines. What the IBP projects as injurious is the supposed
"militarization" of law enforcement which might threaten Philippine democratic institutions and may cause
more harm than good in the long run. Not only is the presumed "injury" not personal in character, it is
likewise too vague, highly speculative and uncertain to satisfy the requirement of standing. Since petitioner
has not successfully established a direct and personal injury as a consequence of the questioned act, it does
not possess the personality to assail the validity of the deployment of the Marines. This Court, however, does
not categorically rule that the IBP has absolutely no standing to raise constitutional issues now or in the
future. The IBP must, by way of allegations and proof, satisfy this Court that it has sufficient stake to obtain
judicial resolution of the controversy.
Having stated the foregoing, it must be emphasized that this Court has the discretion to take cognizance of a
suit which does not satisfy the requirement of legal standing when paramount interest is involved. 16 In not a
few cases, the Court has adopted a liberal attitude on the locus standi of a petitioner where the petitioner is
able to craft an issue of transcendental significance to the people.17 Thus, when the issues raised are of
paramount importance to the public, the Court may brush aside technicalities of procedure. 18 In this case, a
reading of the petition shows that the IBP has advanced constitutional issues which deserve the attention of
this Court in view of their seriousness, novelty and weight as precedents. Moreover, because peace and
order are under constant threat and lawless violence occurs in increasing tempo, undoubtedly aggravated by
the Mindanao insurgency problem, the legal controversy raised in the petition almost certainly will not go
away. It will stare us in the face again. It, therefore, behooves the Court to relax the rules on standing and to
resolve the issue now, rather than later.
The President did not commit grave abuse of discretion in calling out the Marines.
In the case at bar, the bone of contention concerns the factual determination of the President of the necessity
of calling the armed forces, particularly the Marines, to aid the PNP in visibility patrols. In this regard, the IBP
admits that the deployment of the military personnel falls under the Commander-in-Chief powers of the
President as stated in Section 18, Article VII of the Constitution, specifically, the power to call out the armed
forces to prevent or suppress lawless violence, invasion or rebellion. What the IBP questions, however, is the
basis for the calling of the Marines under the aforestated provision. According to the IBP, no emergency
exists that would justify the need for the calling of the military to assist the police force. It contends that no
lawless violence, invasion or rebellion exist to warrant the calling of the Marines. Thus, the IBP prays that this
Court "review the sufficiency of the factual basis for said troop [Marine] deployment." 19
The Solicitor General, on the other hand, contends that the issue pertaining to the necessity of calling the
armed forces is not proper for judicial scrutiny since it involves a political question and the resolution of
factual issues which are beyond the review powers of this Court.
As framed by the parties, the underlying issues are the scope of presidential powers and limits, and the
extent of judicial review. But, while this Court gives considerable weight to the parties’ formulation of the
issues, the resolution of the controversy may warrant a creative approach that goes beyond the narrow
confines of the issues raised. Thus, while the parties are in agreement that the power exercised by the
President is the power to call out the armed forces, the Court is of the view that the power involved may be
no more than the maintenance of peace and order and promotion of the general welfare. 20 For one, the
realities on the ground do not show that there exist a state of warfare, widespread civil unrest or anarchy.
Secondly, the full brunt of the military is not brought upon the citizenry, a point discussed in the latter part of
this decision. In the words of the late Justice Irene Cortes in Marcos v. Manglapus:
More particularly, this case calls for the exercise of the President’s powers as protector of the peace.
[Rossiter, The American Presidency]. The power of the President to keep the peace is not limited merely to
exercising the commander-in-chief powers in times of emergency or to leading the State against external and
internal threats to its existence. The President is not only clothed with extraordinary powers in times of
emergency, but is also tasked with attending to the day-to-day problems of maintaining peace and order and
ensuring domestic tranquility in times when no foreign foe appears on the horizon. Wide discretion, within the
bounds of law, in fulfilling presidential duties in times of peace is not in any way diminished by the relative
want of an emergency specified in the commander-in-chief provision. For in making the President
commander-in-chief the enumeration of powers that follow cannot be said to exclude the President’s
exercising as Commander-in-Chief powers short of the calling of the armed forces, or suspending the
privilege of the writ of habeas corpus or declaring martial law, in order to keep the peace, and maintain public
order and security.
xxx21
Nonetheless, even if it is conceded that the power involved is the President’s power to call out the armed
forces to prevent or suppress lawless violence, invasion or rebellion, the resolution of the controversy will
reach a similar result.
We now address the Solicitor General’s argument that the issue involved is not susceptible to review by the
judiciary because it involves a political question, and thus, not justiciable.
As a general proposition, a controversy is justiciable if it refers to a matter which is appropriate for court
review.22 It pertains to issues which are inherently susceptible of being decided on grounds recognized by
law. Nevertheless, the Court does not automatically assume jurisdiction over actual constitutional cases
brought before it even in instances that are ripe for resolution. One class of cases wherein the Court
hesitates to rule on are "political questions." The reason is that political questions are concerned with issues
dependent upon the wisdom, not the legality, of a particular act or measure being assailed. Moreover, the
political question being a function of the separation of powers, the courts will not normally interfere with the
workings of another co-equal branch unless the case shows a clear need for the courts to step in to uphold
the law and the Constitution.
As Tañada v. Cuenco23 puts it, political questions refer "to those questions which, under the Constitution, are
to be decided by the people in their sovereign capacity, or in regard to which full discretionary authority has
been delegated to the legislative or executive branch of government." Thus, if an issue is clearly identified by
the text of the Constitution as matters for discretionary action by a particular branch of government or to the
people themselves then it is held to be a political question. In the classic formulation of Justice Brennan
in Baker v. Carr,24 "[p]rominent on the surface of any case held to involve a political question is found a
textually demonstrable constitutional commitment of the issue to a coordinate political department; or a lack
of judicially discoverable and manageable standards for resolving it; or the impossibility of deciding without
an initial policy determination of a kind clearly for nonjudicial discretion; or the impossibility of a court’s
undertaking independent resolution without expressing lack of the respect due coordinate branches of
government; or an unusual need for unquestioning adherence to a political decision already made; or the
potentiality of embarassment from multifarious pronouncements by various departments on the one
question."
The 1987 Constitution expands the concept of judicial review by providing that "(T)he Judicial power shall be
vested in one Supreme Court and in such lower courts as may be established by law. Judicial power includes
the duty of the courts of justice to settle actual controversies involving rights which are legally demandable
and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to
lack or excess of jurisdiction on the part of any branch or instrumentality of the Government." 25 Under this
definition, the Court cannot agree with the Solicitor General that the issue involved is a political question
beyond the jurisdiction of this Court to review. When the grant of power is qualified, conditional or subject to
limitations, the issue of whether the prescribed qualifications or conditions have been met or the limitations
respected, is justiciable - the problem being one of legality or validity, not its wisdom.26 Moreover, the
jurisdiction to delimit constitutional boundaries has been given to this Court.27 When political questions are
involved, the Constitution limits the determination as to whether or not there has been a grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the official whose action is being
questioned.28
By grave abuse of discretion is meant simply capricious or whimsical exercise of judgment that is patent and
gross as to amount to an evasion of positive duty or a virtual refusal to perform a duty enjoined by law, or to
act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by
reason of passion or hostility.29 Under this definition, a court is without power to directly decide matters over
which full discretionary authority has been delegated. But while this Court has no power to substitute its
judgment for that of Congress or of the President, it may look into the question of whether such exercise has
been made in grave abuse of discretion.30A showing that plenary power is granted either department of
government, may not be an obstacle to judicial inquiry, for the improvident exercise or abuse thereof may
give rise to justiciable controversy.31
When the President calls the armed forces to prevent or suppress lawless violence, invasion or rebellion, he
necessarily exercises a discretionary power solely vested in his wisdom. This is clear from the intent of the
framers and from the text of the Constitution itself. The Court, thus, cannot be called upon to overrule the
President’s wisdom or substitute its own. However, this does not prevent an examination of whether such
power was exercised within permissible constitutional limits or whether it was exercised in a manner
constituting grave abuse of discretion. In view of the constitutional intent to give the President full
discretionary power to determine the necessity of calling out the armed forces, it is incumbent upon the
petitioner to show that the President’s decision is totally bereft of factual basis. The present petition fails to
discharge such heavy burden as there is no evidence to support the assertion that there exist no justification
for calling out the armed forces. There is, likewise, no evidence to support the proposition that grave abuse
was committed because the power to call was exercised in such a manner as to violate the constitutional
provision on civilian supremacy over the military. In the performance of this Court’s duty of "purposeful
hesitation"32 before declaring an act of another branch as unconstitutional, only where such grave abuse of
discretion is clearly shown shall the Court interfere with the President’s judgment. To doubt is to sustain.
There is a clear textual commitment under the Constitution to bestow on the President full discretionary
power to call out the armed forces and to determine the necessity for the exercise of such power. Section 18,
Article VII of the Constitution, which embodies the powers of the President as Commander-in-Chief, provides
in part:
The President shall be the Commander-in-Chief of all armed forces of the Philippines and whenever it
becomes necessary, he may call out such armed forces to prevent or suppress lawless violence, invasion or
rebellion. In case of invasion or rebellion, when the public safety requires it, he may, for a period not
exceeding sixty days, suspend the privilege of the writ of habeas corpus, or place the Philippines or any part
thereof under martial law.
xxx
The full discretionary power of the President to determine the factual basis for the exercise of the calling out
power is also implied and further reinforced in the rest of Section 18, Article VII which reads, thus:
xxx
Within forty-eight hours from the proclamation of martial law or the suspension of the privilege of the writ
of habeas corpus, the President shall submit a report in person or in writing to the Congress. The Congress,
voting jointly, by a vote of at least a majority of all its Members in regular or special session, may revoke such
proclamation or suspension, which revocation shall not be set aside by the President. Upon the initiative of
the President, the Congress may, in the same manner, extend such proclamation or suspension for a period
to be determined by the Congress, if the invasion or rebellion shall persist and public safety requires it.
The Congress, if not in session, shall within twenty-four hours following such proclamation or suspension,
convene in accordance with its rules without need of a call.
The Supreme Court may review, in an appropriate proceeding filed by any citizen, the sufficiency of the
factual basis of the proclamation of martial law or the suspension of the privilege of the writ or the extension
thereof, and must promulgate its decision thereon within thirty days from its filing.
A state of martial law does not suspend the operation of the Constitution, nor supplant the functioning of the
civil courts or legislative assemblies, nor authorize the conferment of jurisdiction on military courts and
agencies over civilians where civil courts are able to function, nor automatically suspend the privilege of the
writ.
The suspension of the privilege of the writ shall apply only to persons judicially charged for rebellion or
offenses inherent in or directly connected with invasion.
During the suspension of the privilege of the writ, any person thus arrested or detained shall be judicially
charged within three days, otherwise he shall be released.
Under the foregoing provisions, Congress may revoke such proclamation or suspension and the Court may
review the sufficiency of the factual basis thereof. However, there is no such equivalent provision dealing
with the revocation or review of the President’s action to call out the armed forces. The distinction places the
calling out power in a different category from the power to declare martial law and the power to suspend the
privilege of the writ of habeas corpus, otherwise, the framers of the Constitution would have simply lumped
together the three powers and provided for their revocation and review without any qualification. Expressio
unius est exclusio alterius. Where the terms are expressly limited to certain matters, it may not, by
interpretation or construction, be extended to other matters.33 That the intent of the Constitution is exactly
what its letter says, i.e., that the power to call is fully discretionary to the President, is extant in the
deliberation of the Constitutional Commission, to wit:
FR. BERNAS. It will not make any difference. I may add that there is a graduated power of the President as
Commander-in-Chief. First, he can call out such Armed Forces as may be necessary to suppress lawless
violence; then he can suspend the privilege of the writ of habeas corpus, then he can impose martial law.
This is a graduated sequence.
When he judges that it is necessary to impose martial law or suspend the privilege of the writ of habeas
corpus, his judgment is subject to review. We are making it subject to review by the Supreme Court and
subject to concurrence by the National Assembly. But when he exercises this lesser power of calling on the
Armed Forces, when he says it is necessary, it is my opinion that his judgment cannot be reviewed by
anybody.
xxx
FR. BERNAS. Let me just add that when we only have imminent danger, the matter can be handled by the
first sentence: "The President may call out such armed forces to prevent or suppress lawless violence,
invasion or rebellion." So we feel that that is sufficient for handling imminent danger.
MR. DE LOS REYES. So actually, if a President feels that there is imminent danger, the matter can be
handled by the First Sentence: "The President....may call out such Armed Forces to prevent or suppress
lawless violence, invasion or rebellion." So we feel that that is sufficient for handling imminent danger, of
invasion or rebellion, instead of imposing martial law or suspending the writ of habeas corpus, he must
necessarily have to call the Armed Forces of the Philippines as their Commander-in-Chief. Is that the idea?
MR. REGALADO. That does not require any concurrence by the legislature nor is it subject to judicial
review.34
The reason for the difference in the treatment of the aforementioned powers highlights the intent to grant the
President the widest leeway and broadest discretion in using the power to call out because it is considered
as the lesser and more benign power compared to the power to suspend the privilege of the writ of habeas
corpus and the power to impose martial law, both of which involve the curtailment and suppression of certain
basic civil rights and individual freedoms, and thus necessitating safeguards by Congress and review by this
Court.
Moreover, under Section 18, Article VII of the Constitution, in the exercise of the power to suspend the
privilege of the writ of habeas corpus or to impose martial law, two conditions must concur: (1) there must be
an actual invasion or rebellion and, (2) public safety must require it. These conditions are not required in the
case of the power to call out the armed forces. The only criterion is that "whenever it becomes necessary,"
the President may call the armed forces "to prevent or suppress lawless violence, invasion or rebellion." The
implication is that the President is given full discretion and wide latitude in the exercise of the power to call as
compared to the two other powers.
If the petitioner fails, by way of proof, to support the assertion that the President acted without factual basis,
then this Court cannot undertake an independent investigation beyond the pleadings. The factual necessity
of calling out the armed forces is not easily quantifiable and cannot be objectively established since matters
considered for satisfying the same is a combination of several factors which are not always accessible to the
courts. Besides the absence of textual standards that the court may use to judge necessity, information
necessary to arrive at such judgment might also prove unmanageable for the courts. Certain pertinent
information might be difficult to verify, or wholly unavailable to the courts. In many instances, the evidence
upon which the President might decide that there is a need to call out the armed forces may be of a nature
not constituting technical proof.
On the other hand, the President as Commander-in-Chief has a vast intelligence network to gather
information, some of which may be classified as highly confidential or affecting the security of the state. In
the exercise of the power to call, on-the-spot decisions may be imperatively necessary in emergency
situations to avert great loss of human lives and mass destruction of property. Indeed, the decision to call out
the military to prevent or suppress lawless violence must be done swiftly and decisively if it were to have any
effect at all. Such a scenario is not farfetched when we consider the present situation in Mindanao, where the
insurgency problem could spill over the other parts of the country. The determination of the necessity for the
calling out power if subjected to unfettered judicial scrutiny could be a veritable prescription for disaster, as
such power may be unduly straitjacketed by an injunction or a temporary restraining order every time it is
exercised.
Thus, it is the unclouded intent of the Constitution to vest upon the President, as Commander-in-Chief of the
Armed Forces, full discretion to call forth the military when in his judgment it is necessary to do so in order to
prevent or suppress lawless violence, invasion or rebellion. Unless the petitioner can show that the exercise
of such discretion was gravely abused, the President’s exercise of judgment deserves to be accorded
respect from this Court.
The President has already determined the necessity and factual basis for calling the armed forces. In his
Memorandum, he categorically asserted that, "[V]iolent crimes like bank/store robberies, holdups,
kidnappings and carnappings continue to occur in Metro Manila..."35 We do not doubt the veracity of the
President’s assessment of the situation, especially in the light of present developments. The Court takes
judicial notice of the recent bombings perpetrated by lawless elements in the shopping malls, public utilities,
and other public places. These are among the areas of deployment described in the LOI 2000. Considering
all these facts, we hold that the President has sufficient factual basis to call for military aid in law enforcement
and in the exercise of this constitutional power.
The deployment of the Marines does not violate the civilian supremacy clause nor does it infringe the civilian
character of the police force.
Prescinding from its argument that no emergency situation exists to justify the calling of the Marines, the IBP
asserts that by the deployment of the Marines, the civilian task of law enforcement is "militarized" in violation
of Section 3, Article II36 of the Constitution.
We disagree. The deployment of the Marines does not constitute a breach of the civilian supremacy clause.
The calling of the Marines in this case constitutes permissible use of military assets for civilian law
enforcement. The participation of the Marines in the conduct of joint visibility patrols is appropriately
circumscribed. The limited participation of the Marines is evident in the provisions of the LOI itself, which
sufficiently provides the metes and bounds of the Marines’ authority. It is noteworthy that the local police
forces are the ones in charge of the visibility patrols at all times, the real authority belonging to the PNP. In
fact, the Metro Manila Police Chief is the overall leader of the PNP-Philippine Marines joint visibility
patrols.37 Under the LOI, the police forces are tasked to brief or orient the soldiers on police patrol
procedures.38 It is their responsibility to direct and manage the deployment of the Marines. 39 It is, likewise,
their duty to provide the necessary equipment to the Marines and render logistical support to these
soldiers.40 In view of the foregoing, it cannot be properly argued that military authority is supreme over civilian
authority. Moreover, the deployment of the Marines to assist the PNP does not unmake the civilian character
of the police force. Neither does it amount to an "insidious incursion" of the military in the task of law
enforcement in violation of Section 5(4), Article XVI of the Constitution.41
In this regard, it is not correct to say that General Angelo Reyes, Chief of Staff of the AFP, by his alleged
involvement in civilian law enforcement, has been virtually appointed to a civilian post in derogation of the
aforecited provision. The real authority in these operations, as stated in the LOI, is lodged with the head of a
civilian institution, the PNP, and not with the military. Such being the case, it does not matter whether the
AFP Chief actually participates in the Task Force Tulungan since he does not exercise any authority or
control over the same. Since none of the Marines was incorporated or enlisted as members of the PNP,
there can be no appointment to civilian position to speak of. Hence, the deployment of the Marines in the
joint visibility patrols does not destroy the civilian character of the PNP.
Considering the above circumstances, the Marines render nothing more than assistance required in
conducting the patrols. As such, there can be no "insidious incursion" of the military in civilian affairs nor can
there be a violation of the civilian supremacy clause in the Constitution.
It is worth mentioning that military assistance to civilian authorities in various forms persists in Philippine
jurisdiction. The Philippine experience reveals that it is not averse to requesting the assistance of the military
in the implementation and execution of certain traditionally "civil" functions. As correctly pointed out by the
Solicitor General, some of the multifarious activities wherein military aid has been rendered, exemplifying the
activities that bring both the civilian and the military together in a relationship of cooperation, are:
1. Elections;42
2. Administration of the Philippine National Red Cross;43
3. Relief and rescue operations during calamities and disasters;44
4. Amateur sports promotion and development;45
5. Development of the culture and the arts;46
6. Conservation of natural resources;47
7. Implementation of the agrarian reform program;48
8. Enforcement of customs laws;49
9. Composite civilian-military law enforcement activities;50
10. Conduct of licensure examinations;51
11. Conduct of nationwide tests for elementary and high school students;52
12. Anti-drug enforcement activities;53
13. Sanitary inspections;54
14. Conduct of census work;55
15. Administration of the Civil Aeronautics Board;56
16. Assistance in installation of weather forecasting devices;57
17. Peace and order policy formulation in local government units.58
This unquestionably constitutes a gloss on executive power resulting from a systematic, unbroken, executive
practice, long pursued to the knowledge of Congress and, yet, never before questioned.59 What we have
here is mutual support and cooperation between the military and civilian authorities, not derogation of civilian
supremacy.
In the United States, where a long tradition of suspicion and hostility towards the use of military force for
domestic purposes has persisted,60 and whose Constitution, unlike ours, does not expressly provide for the
power to call, the use of military personnel by civilian law enforcement officers is allowed under
circumstances similar to those surrounding the present deployment of the Philippine Marines. Under
the Posse Comitatus Act61 of the US, the use of the military in civilian law enforcement is generally
prohibited, except in certain allowable circumstances. A provision of the Act states:
§ 1385. Use of Army and Air Force as posse comitatus
Whoever, except in cases and under circumstances expressly authorized by the Constitution or Act of
Congress, willfully uses any part of the Army or the Air Force as posse comitatus or otherwise to execute the
laws shall be fined not more than $10,000 or imprisoned not more than two years, or both. 62
To determine whether there is a violation of the Posse Comitatus Act in the use of military personnel, the US
courts63 apply the following standards, to wit:
Were Army or Air Force personnel used by the civilian law enforcement officers at Wounded Knee in such a
manner that the military personnel subjected the citizens to the exercise of military power which was
regulatory, proscriptive, or compulsory64 George Washington Law Review, pp. 404-433 (1986), which
discusses the four divergent standards for assessing acceptable involvement of military personnel in civil law
enforcement. See likewise HONORED IN THE BREECH: PRESIDENTIAL AUTHORITY TO EXECUTE THE
LAWS WITH MILITARY FORCE, 83 Yale Law Journal, pp. 130-152, 1973. 64 in nature, either presently or
prospectively?
xxx
When this concept is transplanted into the present legal context, we take it to mean that military involvement,
even when not expressly authorized by the Constitution or a statute, does not violate the Posse Comitatus
Act unless it actually regulates, forbids or compels some conduct on the part of those claiming
relief.1âwphi1 A mere threat of some future injury would be insufficient. (emphasis supplied)
Even if the Court were to apply the above rigid standards to the present case to determine whether there is
permissible use of the military in civilian law enforcement, the conclusion is inevitable that no violation of the
civilian supremacy clause in the Constitution is committed. On this point, the Court agrees with the
observation of the Solicitor General:
3. The designation of tasks in Annex A65 does not constitute the exercise of regulatory, proscriptive, or
compulsory military power. First, the soldiers do not control or direct the operation. This is evident from Nos.
6,66 8(k)67 and 9(a)68of Annex A. These soldiers, second, also have no power to prohibit or condemn. In No.
9(d)69 of Annex A, all arrested persons are brought to the nearest police stations for proper disposition. And
last, these soldiers apply no coercive force. The materials or equipment issued to them, as shown in No.
8(c)70 of Annex A, are all low impact and defensive in character. The conclusion is that there being no
exercise of regulatory, proscriptive or compulsory military power, the deployment of a handful of Philippine
Marines constitutes no impermissible use of military power for civilian law enforcement.71
It appears that the present petition is anchored on fear that once the armed forces are deployed, the military
will gain ascendancy, and thus place in peril our cherished liberties. Such apprehensions, however, are
unfounded. The power to call the armed forces is just that - calling out the armed forces. Unless, petitioner
IBP can show, which it has not, that in the deployment of the Marines, the President has violated the
fundamental law, exceeded his authority or jeopardized the civil liberties of the people, this Court is not
inclined to overrule the President’s determination of the factual basis for the calling of the Marines to prevent
or suppress lawless violence.
One last point. Since the institution of the joint visibility patrol in January, 2000, not a single citizen has
complained that his political or civil rights have been violated as a result of the deployment of the Marines. It
was precisely to safeguard peace, tranquility and the civil liberties of the people that the joint visibility patrol
was conceived. Freedom and democracy will be in full bloom only when people feel secure in their homes
and in the streets, not when the shadows of violence and anarchy constantly lurk in their midst.
WHEREFORE, premises considered, the petition is hereby DISMISSED.
SO ORDERED.
Davide, Jr., C.J., Melo, Purisima, Pardo, Buena, Gonzaga-Reyes, Ynares-Santiago, and De Leon, Jr., JJ.,
concur.
Bellosillo, J., on official leave.
Puno, J., see separate opinion.
Vitug, J., see separate opinion.
Mendoza, J., see concurring and dissenting opinion.
Panganiban, J., in the result.
Quisumbing, J., joins the opinion of J. Mendoza.
SECOND DIVISION
G.R. No. 131719 May 25, 2004
THE EXECUTIVE SECRETARY, THE SECRETARY OF JUSTICE, THE SECRETARY OF LABOR AND
EMPLOYMENT, AND THE SECRETARY OF FOREIGN AFFAIRS, OWWA PUNO, ADMINISTRATOR, and
POEA ADMINISTRATOR, petitioners,
vs.
THE HON. COURT OF APPEALS and ASIAN RECRUITMENT COUNCIL PHILIPPINE CHAPTER (ARCO-
PHIL.), INC., representing its members: Worldcare Services Internationale, Inc., Steadfast
International Recruitment Corporation, Dragon International Manpower Services Corporation,
Verdant Manpower Mobilization Corporation, Brent Overseas Personnel, Inc., ARL Manpower
Services, Inc., Dahlzhen International Services, Inc., Interworld Placement Center, Inc., Lakas Tao
Contract Services, Ltd. Co., and SSC Multiservices, respondents.
DECISION
CALLEJO, SR., J.:
In this petition for review on certiorari, the Executive Secretary of the President of the Philippines, the
Secretary of Justice, the Secretary of Foreign Affairs, the Secretary of Labor and Employment, the POEA
Administrator and the OWWA Administrator, through the Office of the Solicitor General, assail the
Decision1 of the Court of Appeals in CA-G.R. SP No. 38815 affirming the Order2 of the Regional Trial Court
of Quezon City dated August 21, 1995 in Civil Case No. Q-95-24401, granting the plea of the petitioners
therein for a writ of preliminary injunction and of the writ of preliminary injunction issued by the trial court on
August 24, 1995.
The Antecedents
Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, took
effect on July 15, 1995. The Omnibus Rules and Regulations Implementing the Migrant Workers and
Overseas Filipino Act of 1995 was, thereafter, published in the April 7, 1996 issue of the Manila Bulletin.
However, even before the law took effect, the Asian Recruitment Council Philippine Chapter, Inc. (ARCO-
Phil.) filed, on July 17, 1995, a petition for declaratory relief under Rule 63 of the Rules of Court with the
Regional Trial Court of Quezon City to declare as unconstitutional Section 2, paragraph (g), Section 6,
paragraphs (a) to (j), (l) and (m), Section 7, paragraphs (a) and (b), and Sections 9 and 10 of the law, with a
plea for the issuance of a temporary restraining order and/or writ of preliminary injunction enjoining the
respondents therein from enforcing the assailed provisions of the law.
In a supplement to its petition, the ARCO-Phil. alleged that Rep. Act No. 8042 was self-executory and that no
implementing rules were needed. It prayed that the court issue a temporary restraining order to enjoin the
enforcement of Section 6, paragraphs (a) to (m) on illegal recruitment, Section 7 on penalties for illegal
recruitment, and Section 9 on venue of criminal actions for illegal recruitments, viz:
Viewed in the light of the foregoing discussions, there appears to be urgent an imperative need for
this Honorable Court to maintain the status quo by enjoining the implementation or effectivity of the
questioned provisions of RA 8042, by way of a restraining order otherwise, the member recruitment
agencies of the petitioner will suffer grave or irreparable damage or injury. With the effectivity of RA
8042, a great majority of the duly licensed recruitment agencies have stopped or suspended their
operations for fear of being prosecuted under the provisions of a law that are unjust and
unconstitutional. This Honorable Court may take judicial notice of the fact that processing of
deployment papers of overseas workers for the past weeks have come to a standstill at the POEA
and this has affected thousands of workers everyday just because of the enactment of RA 8042.
Indeed, this has far reaching effects not only to survival of the overseas manpower supply industry
and the active participating recruitment agencies, the country’s economy which has survived
mainly due to the dollar remittances of the overseas workers but more importantly, to the poor and
the needy who are in dire need of income-generating jobs which can only be obtained from abroad.
The loss or injury that the recruitment agencies will suffer will then be immeasurable and
irreparable. As of now, even foreign employers have already reduced their manpower requirements
from the Philippines due to their knowledge that RA 8042 prejudiced and adversely affected the
local recruitment agencies.3
On August 1, 1995, the trial court issued a temporary restraining order effective for a period of only twenty
(20) days therefrom.
After the petitioners filed their comment on the petition, the ARCO-Phil. filed an amended petition, the
amendments consisting in the inclusion in the caption thereof eleven (11) other corporations which it alleged
were its members and which it represented in the suit, and a plea for a temporary restraining order enjoining
the respondents from enforcing Section 6 subsection (i), Section 6 subsection (k) and paragraphs 15 and 16
thereof, Section 8, Section 10, paragraphs 1 and 2, and Sections 11 and 40 of Rep. Act No. 8042.
The respondent ARCO-Phil. assailed Section 2(g) and (i), Section 6 subsection (a) to (m), Section 7(a) to (b),
and Section 10 paragraphs (1) and (2), quoted as follows:
(g) THE STATE RECOGNIZES THAT THE ULTIMATE PROTECTION TO ALL MIGRANT
WORKERS IS THE POSSESSION OF SKILLS. PURSUANT TO THIS AND AS SOON AS
PRACTICABLE, THE GOVERNMENT SHALL DEPLOY AND/OR ALLOW THE DEPLOYMENT
ONLY OF SKILLED FILIPINO WORKERS.4
Sec. 2 subsection (i, 2nd par.)
Nonetheless, the deployment of Filipino overseas workers, whether land-based or sea-based, by
local service contractors and manning agents employing them shall be encourages (sic).
Appropriate incentives may be extended to them.
II. ILLEGAL RECRUITMENT
SEC. 6. Definition. – For purposes of this Act, illegal recruitment shall mean any act of canvassing,
enlisting, contracting, transporting, utilizing, hiring, or procuring workers and includes referring,
contract services, promising or advertising for employment abroad, whether for profit or not, when
undertaken by a non-licensee or non-holder of authority contemplated under Article 13(f) of
Presidential Decree No. 442, as amended, otherwise known as the Labor Code of the Philippines:
Provided, That any such non-licensee or non-holder who, in any manner, offers or promises for a
fee employment abroad to two or more persons shall be deemed so engaged. It shall, likewise,
include the following acts, whether committed by any person, whether a non-licensee, non-holder,
licensee or holder of authority:
(a) To charge or accept directly or indirectly any amount greater than that specified in the
schedule of allowable fees prescribed by the Secretary of Labor and Employment, or to
make a worker pay any amount greater than that actually received by him as a loan or
advance;
(b) To furnish or publish any false notice or information or document in relation to

recruitment or employment;
(c) To give any false notice, testimony, information or document or commit any act of
misrepresentation for the purpose of securing a license or authority under the Labor
Code;
(d) To induce or attempt to induce a worker already employed to quit his employment in
order to offer him another unless the transfer is designed to liberate a worker from
oppressive terms and conditions of employment;
(e) To influence or attempt to influence any person or entity not to employ any worker
who has not applied for employment through his agency;
(f) To engage in the recruitment or placement of workers in jobs harmful to public health
or morality or to the dignity of the Republic of the Philippines;
(g) To obstruct or attempt to obstruct inspection by the Secretary of Labor and

Employment or by his duly authorized representative;
(h) To fail to submit reports on the status of employment, placement vacancies,
remittance of foreign exchange earnings, separation from jobs, departures and such
other matters or information as may be required by the Secretary of Labor and
Employment;
(i) To substitute or alter to the prejudice of the worker, employment contracts approved
and verified by the Department of Labor and Employment from the time of actual signing
thereof by the parties up to and including the period of the expiration of the same without
the approval of the Department of Labor and Employment;
(j) For an officer or agent of a recruitment or placement agency to become an officer or

member of the Board of any corporation engaged in travel agency or to be engaged
directly or indirectly in the management of a travel agency;
(k) To withhold or deny travel documents from applicant workers before departure for
monetary or financial considerations other than those authorized under the Labor Code
and its implementing rules and regulations;
(l) Failure to actually deploy without valid reason as determined by the Department of
Labor and Employment; and
(m) Failure to reimburse expenses incurred by the worker in connection with his
documentation and processing for purposes of deployment, in cases where the
deployment does not actually take place without the worker’s fault. Illegal recruitment
when committed by a syndicate or in large scale shall be considered an offense involving
economic sabotage.
Illegal recruitment is deemed committed by a syndicate if carried out by a group of three (3) or
more persons conspiring or confederating with one another. It is deemed committed in large scale
if committed against three (3) or more persons individually or as a group.
The persons criminally liable for the above offenses are the principals, accomplices and
accessories. In case of juridical persons, the officers having control, management or direction of
their business shall be liable.
SEC. 7. Penalties. –
(a) Any person found guilty of illegal recruitment shall suffer the penalty of imprisonment of not less
than six (6) years and one (1) day but not more than twelve (12) years and a fine of not less than
two hundred thousand pesos (₱200,000.00) nor more than five hundred thousand pesos
(₱500,000.00).
(b) The penalty of life imprisonment and a fine of not less than five hundred thousand pesos
(₱500,000.00) nor more than one million pesos (₱1,000,000.00) shall be imposed if illegal
recruitment constitutes economic sabotage as defined herein.
Provided, however, That the maximum penalty shall be imposed if the person illegally recruited is
less than eighteen (18) years of age or committed by a non-licensee or non-holder of authority.
Sec. 8.
Prohibition on Officials and Employees. – It shall be unlawful for any official or employee of the
Department of Labor and Employment, the Philippine Overseas Employment Administration
(POEA), or the Overseas Workers Welfare Administration (OWWA), or the Department of Foreign
Affairs, or other government agencies involved in the implementation of this Act, or their
relatives within the fourth civil degree of consanguinity or affinity, to engage, directly or indirectly, in
the business of recruiting migrant workers as defined in this Act. The penalties provided in the
immediate preceding paragraph shall be imposed upon them. (underscoring supplied)
Sec. 10, pars. 1 & 2.
Money Claims. – Notwithstanding any provision of law to the contrary, the Labor Arbiters of the
National Labor Relations Commission (NLRC) shall have the original and exclusive jurisdiction to
hear and decide, within ninety (90) calendar days after the filing of the complaint, the claims arising
out of an employer-employee relationship or by virtue of any law or contract involving Filipino
workers for overseas deployment including claims for actual, moral, exemplary and other forms of
damages.
The liability of the principal/employer and the recruitment/placement agency for any and all claims
under this section shall be joint and several. This provision shall be incorporated in the contract for
overseas employment and shall be a condition precedent for its approval. The performance bond
to be filed by the recruitment/placement agency, as provided by law, shall be answerable for all
money claims or damages that may be awarded to the workers. If the recruitment/placement
agency is a juridical being, the corporate officers and directors and partners as the case may be,
shall themselves be jointly and solidarily liable with the corporation or partnership for the aforesaid
claims and damages.
SEC. 11. Mandatory Periods for Resolution of Illegal Recruitment Cases. – The preliminary
investigations of cases under this Act shall be terminated within a period of thirty (30) calendar
days from the date of their filing. Where the preliminary investigation is conducted by a prosecution
officer and a prima facie case is established, the corresponding information shall be filed in court
within twenty-four (24) hours from the termination of the investigation. If the preliminary
investigation is conducted by a judge and a prima facie case is found to exist, the corresponding
information shall be filed by the proper prosecution officer within forty-eight (48) hours from the
date of receipt of the records of the case.
The respondent averred that the aforequoted provisions of Rep. Act No. 8042 violate Section 1, Article III of
the Constitution.5 According to the respondent, Section 6(g) and (i) discriminated against unskilled workers
and their families and, as such, violated the equal protection clause, as well as Article II, Section 12 6 and
Article XV, Sections 17 and 3(3) of the Constitution.8 As the law encouraged the deployment of skilled Filipino
workers, only overseas skilled workers are granted rights. The respondent stressed that unskilled workers
also have the right to seek employment abroad. According to the respondent, the right of unskilled workers to
due process is violated because they are prevented from finding employment and earning a living abroad. It
cannot be argued that skilled workers are immune from abuses by employers, while unskilled workers are
merely prone to such abuses. It was pointed out that both skilled and unskilled workers are subjected to
abuses by foreign employers. Furthermore, the prohibition of the deployment of unskilled workers abroad
would only encourage fly-by-night illegal recruiters.
According to the respondent, the grant of incentives to service contractors and manning agencies to the
exclusion of all other licensed and authorized recruiters is an invalid classification. Licensed and authorized
recruiters are thus deprived of their right to property and due process and to the "equality of the person." It is
understandable for the law to prohibit illegal recruiters, but to discriminate against licensed and registered
recruiters is unconstitutional.
The respondent, likewise, alleged that Section 6, subsections (a) to (m) is unconstitutional because licensed
and authorized recruitment agencies are placed on equal footing with illegal recruiters. It contended that
while the Labor Code distinguished between recruiters who are holders of licenses and non-holders thereof
in the imposition of penalties, Rep. Act No. 8042 does not make any distinction. The penalties in Section 7(a)
and (b) being based on an invalid classification are, therefore, repugnant to the equal protection clause,
besides being excessive; hence, such penalties are violative of Section 19(1), Article III of the Constitution. 9 It
was also pointed out that the penalty for officers/officials/employees of recruitment agencies who are found
guilty of economic sabotage or large-scale illegal recruitment under Rep. Act No. 8042 is life imprisonment.
Since recruitment agencies usually operate with a manpower of more than three persons, such agencies are
forced to shut down, lest their officers and/or employees be charged with large scale illegal recruitment or
economic sabotage and sentenced to life imprisonment. Thus, the penalty imposed by law, being
disproportionate to the prohibited acts, discourages the business of licensed and registered recruitment
agencies.
The respondent also posited that Section 6(m) and paragraphs (15) and (16), Sections 8, 9 and 10,
paragraph 2 of the law violate Section 22, Article III of the Constitution10 prohibiting ex-post facto laws and
bills of attainder. This is because the provisions presume that a licensed and registered recruitment agency
is guilty of illegal recruitment involving economic sabotage, upon a finding that it committed any of the
prohibited acts under the law. Furthermore, officials, employees and their relatives are presumed guilty of
illegal recruitment involving economic sabotage upon such finding that they committed any of the said
prohibited acts.
The respondent further argued that the 90-day period in Section 10, paragraph (1) within which a labor
arbiter should decide a money claim is relatively short, and could deprive licensed and registered recruiters
of their right to due process. The period within which the summons and the complaint would be served on
foreign employees and, thereafter, the filing of the answer to the complaint would take more than 90 days.
This would thereby shift on local licensed and authorized recruiters the burden of proving the defense of
foreign employers. Furthermore, the respondent asserted, Section 10, paragraph 2 of the law, which
provides for the joint and several liability of the officers and employees, is a bill of attainder and a violation of
the right of the said corporate officers and employees to due process. Considering that such corporate
officers and employees act with prior approval of the board of directors of such corporation, they should not
be liable, jointly and severally, for such corporate acts.
The respondent asserted that the following provisions of the law are unconstitutional:
SEC. 9. Venue. – A criminal action arising from illegal recruitment as defined herein shall be filed
with the Regional Trial Court of the province or city where the offense was committed or where the
offended party actually resides at the time of the commission of the offense: Provided, That the
court where the criminal action is first filed shall acquire jurisdiction to the exclusion of other courts:
Provided, however, That the aforestated provisions shall also apply to those criminal actions that
have already been filed in court at the time of the effectivity of this Act.
SEC. 10. Money Claims. – Notwithstanding any provision of law to the contrary, the Labor Arbiters
of the National Labor Relations Commission (NLRC) shall have the original and exclusive
jurisdiction to hear and decide, within ninety (90) calendar days after the filing of the complaint, the
claims arising out of an employer-employee relationship or by virtue of any law or contract involving
Filipino workers for overseas deployment including claims for actual, moral, exemplary and other
forms of damages.
Sec. 40.
The departments and agencies charged with carrying out the provisions of this Act shall, within
ninety (90) days after the effectiviy of this Act, formulate the necessary rules and regulations for its
effective implementation.
According to the respondent, the said provisions violate Section 5(5), Article VIII of the
Constitution11 because they impair the power of the Supreme Court to promulgate rules of procedure.
In their answer to the petition, the petitioners alleged, inter alia, that (a) the respondent has no cause of
action for a declaratory relief; (b) the petition was premature as the rules implementing Rep. Act No. 8042 not
having been released as yet; (c) the assailed provisions do not violate any provisions of the Constitution;
and, (d) the law was approved by Congress in the exercise of the police power of the State. In opposition to
the respondent’s plea for injunctive relief, the petitioners averred that:
As earlier shown, the amended petition for declaratory relief is devoid of merit for failure of petitioner to
demonstrate convincingly that the assailed law is unconstitutional, apart from the defect and impropriety of
the petition. One who attacks a statute, alleging unconstitutionality must prove its invalidity beyond
reasonable doubt (Caleon v. Agus Development Corporation, 207 SCRA 748). All reasonable doubts should
be resolved in favor of the constitutionality of a statute (People v. Vera, 65 Phil. 56). This presumption of
constitutionality is based on the doctrine of separation of powers which enjoin upon each department a
becoming respect for the acts of the other departments (Garcia vs. Executive Secretary, 204 SCRA 516
[1991]). Necessarily, the ancillary remedy of a temporary restraining order and/or a writ of preliminary
injunction prayed for must fall. Besides, an act of legislature approved by the executive is presumed to be
within constitutional bounds (National Press Club v. Commission on Elections, 207 SCRA 1).12
After the respective counsels of the parties were heard on oral arguments, the trial court issued on August
21, 1995, an order granting the petitioner’s plea for a writ of preliminary injunction upon a bond of ₱50,000.
The petitioner posted the requisite bond and on August 24, 1995, the trial court issued a writ of preliminary
injunction enjoining the enforcement of the following provisions of Rep. Act No. 8042 pending the termination
of the proceedings:
… Section 2, subsections (g) and (i, 2nd par.); Section 6, subsections (a) to (m), and pars. 15 & 16;
Section 7, subsections (a) & (b); Section 8; Section 9; Section 10; pars. 1 & 2; Section 11; and
Section 40 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas
Filipinos Act of 1995. …13
The petitioners filed a petition for certiorari with the Court of Appeals assailing the order and the writ of
preliminary injunction issued by the trial court on the following grounds:
1. Respondent ARCO-PHIL. had utterly failed to show its clear right/s or that of its member-
agencies to be protected by the injunctive relief and/or violation of said rights by the enforcement of
the assailed sections of R.A. 8042;
2. Respondent Judge fixed a ₱50,000 injunction bond which is grossly inadequate to answer for
the damage which petitioner-officials may sustain, should respondent ARCO-PHIL. be finally
adjudged as not being entitled thereto.14
The petitioners asserted that the respondent is not the real party-in-interest as petitioner in the trial court. It is
inconceivable how the respondent, a non-stock and non-profit corporation, could sustain direct injury as a
result of the enforcement of the law. They argued that if, at all, any damage would result in the
implementation of the law, it is the licensed and registered recruitment agencies and/or the unskilled Filipino
migrant workers discriminated against who would sustain the said injury or damage, not the respondent. The
respondent, as petitioner in the trial court, was burdened to adduce preponderant evidence of such
irreparable injury, but failed to do so. The petitioners further insisted that the petition a quo was premature
since the rules and regulations implementing the law had yet to be promulgated when such petition was filed.
Finally, the petitioners averred that the respondent failed to establish the requisites for the issuance of a writ
of preliminary injunction against the enforcement of the law and the rules and regulations issued
implementing the same.
On December 5, 1997, the appellate court came out with a four-page decision dismissing the petition and
affirming the assailed order and writ of preliminary injunction issued by the trial court. The appellate court,
likewise, denied the petitioners’ motion for reconsideration of the said decision.
The petitioners now come to this Court in a petition for review on certiorari on the following grounds:
1. Private respondent ARCO-PHIL. had utterly failed to show its clear right/s or that of its member-
agencies to be protected by the injunctive relief and/or violation of said rights by the enforcement of
the assailed sections of R.A. 8042;
2. The ₱50,000 injunction bond fixed by the court a quo and sustained by the Court of Appeals is
grossly inadequate to answer for the damage which petitioners-officials may sustain, should private
respondent ARCO-PHIL. be finally adjudged as not being entitled thereto.15
On February 16, 1998, this Court issued a temporary restraining order enjoining the respondents from
enforcing the assailed order and writ of preliminary injunction.
The Issues
The core issue in this case is whether or not the trial court committed grave abuse of its discretion amounting
to excess or lack of jurisdiction in issuing the assailed order and the writ of preliminary injunction on a bond
of only ₱50,000 and whether or not the appellate court erred in affirming the trial court’s order and the writ of
preliminary injunction issued by it.
The petitioners contend that the respondent has no locus standi. It is a non-stock, non-profit organization;
hence, not the real party-in-interest as petitioner in the action. Although the respondent filed the petition in
the Regional Trial Court in behalf of licensed and registered recruitment agencies, it failed to adduce in
evidence a certified copy of its Articles of Incorporation and the resolutions of the said members authorizing it
to represent the said agencies in the proceedings. Neither is the suit of the respondent a class suit so as to
vest in it a personality to assail Rep. Act No. 8042; the respondent is service-oriented while the recruitment
agencies it purports to represent are profit-oriented. The petitioners assert that the law is presumed
constitutional and, as such, the respondent was burdened to make a case strong enough to overcome such
presumption and establish a clear right to injunctive relief.
The petitioners bewail the ₱50,000 bond fixed by the trial court for the issuance of a writ of preliminary
injunction and affirmed by the appellate court. They assert that the amount is grossly inadequate to answer
for any damages that the general public may suffer by reason of the non-enforcement of the assailed
provisions of the law. The trial court committed a grave abuse of its discretion in granting the respondent’s
plea for injunctive relief, and the appellate court erred in affirming the order and the writ of preliminary
injunction issued by the trial court.
The respondent, for its part, asserts that it has duly established its locus standi and its right to injunctive relief
as gleaned from its pleadings and the appendages thereto. Under Section 5, Rule 58 of the Rules of Court, it
was incumbent on the petitioners, as respondents in the RTC, to show cause why no injunction should issue.
It avers that the injunction bond posted by the respondent was more than adequate to answer for any injury
or damage the petitioners may suffer, if any, by reason of the writ of preliminary injunction issued by the
RTC. In any event, the assailed provisions of Rep. Act No. 8042 exposed its members to the immediate and
irreparable damage of being deprived of their right to a livelihood without due process, a property right
protected under the Constitution.
The respondent contends that the commendable purpose of the law to eradicate illegal recruiters should not
be done at the expense and to the prejudice of licensed and authorized recruitment agencies. The writ of
preliminary injunction was necessitated by the great number of duly licensed recruitment agencies that had
stopped or suspended their business operations for fear that their officers and employees would be indicted
and prosecuted under the assailed oppressive penal provisions of the law, and meted excessive penalties.
The respondent, likewise, urges that the Court should take judicial notice that the processing of deployment
papers of overseas workers have come to a virtual standstill at the POEA.
The Court’s Ruling
The petition is meritorious.
The Respondent Has Locus Standi
To File the Petition in the RTC in Representation of the Eleven Licensed and Registered Recruitment
Agencies Impleaded in the Amended Petition
The modern view is that an association has standing to complain of injuries to its members. This view fuses
the legal identity of an association with that of its members.16 An association has standing to file suit for its
workers despite its lack of direct interest if its members are affected by the action. An organization has
standing to assert the concerns of its constituents.17
In Telecommunications and Broadcast Attorneys of the Philippines v. Commission on Elections, 18 we held

that standing jus tertii would be recognized only if it can be shown that the party suing has some substantial
relation to the third party, or that the right of the third party would be diluted unless the party in court is
allowed to espouse the third party’s constitutional claims.
In this case, the respondent filed the petition for declaratory relief under Rule 64 of the Rules of Court for and
in behalf of its eleven (11) licensed and registered recruitment agencies which are its members, and which
approved separate resolutions expressly authorizing the respondent to file the said suit for and in their
behalf. We note that, under its Articles of Incorporation, the respondent was organized for the purposes inter
alia of promoting and supporting the growth and development of the manpower recruitment industry, both in
the local and international levels; providing, creating and exploring employment opportunities for the
exclusive benefit of its general membership; enhancing and promoting the general welfare and protection of
Filipino workers; and, to act as the representative of any individual, company, entity or association on matters
related to the manpower recruitment industry, and to perform other acts and activities necessary to
accomplish the purposes embodied therein. The respondent is, thus, the appropriate party to assert the
rights of its members, because it and its members are in every practical sense identical. The respondent
asserts that the assailed provisions violate the constitutional rights of its members and the officers and
employees thereof. The respondent is but the medium through which its individual members seek to make
more effective the expression of their voices and the redress of their grievances. 19
However, the respondent has no locus standi to file the petition for and in behalf of unskilled workers. We
note that it even failed to implead any unskilled workers in its petition. Furthermore, in failing to implead, as
parties-petitioners, the eleven licensed and registered recruitment agencies it claimed to represent, the
respondent failed to comply with Section 2 of Rule 6320 of the Rules of Court. Nevertheless, since the eleven
licensed and registered recruitment agencies for which the respondent filed the suit are specifically named in
the petition, the amended petition is deemed amended to avoid multiplicity of suits.21
The Assailed Order and Writ of
Preliminary Injunction Is Mooted
By Case Law
The respondent justified its plea for injunctive relief on the allegation in its amended petition that its members
are exposed to the immediate and irreparable danger of being deprived of their right to a livelihood and other
constitutional rights without due process, on its claim that a great number of duly licensed recruitment
agencies have stopped or suspended their operations for fear that (a) their officers and employees would be
prosecuted under the unjust and unconstitutional penal provisions of Rep. Act No. 8042 and meted equally
unjust and excessive penalties, including life imprisonment, for illegal recruitment and large scale illegal
recruitment without regard to whether the recruitment agencies involved are licensed and/or authorized; and,
(b) if the members of the respondent, which are licensed and authorized, decide to continue with their
businesses, they face the stigma and the curse of being labeled "illegal recruiters." In granting the
respondent’s plea for a writ of preliminary injunction, the trial court held, without stating the factual and legal
basis therefor, that the enforcement of Rep. Act No. 8042, pendente lite, would cause grave and irreparable
injury to the respondent until the case is decided on its merits.
We note, however, that since Rep. Act No. 8042 took effect on July 15, 1995, the Court had, in a catena of
cases, applied the penal provisions in Section 6, including paragraph (m) thereof, and the last two
paragraphs therein defining large scale illegal recruitment committed by officers and/or employees of
recruitment agencies by themselves and in connivance with private individuals, and imposed the penalties
provided in Section 7 thereof, including the penalty of life imprisonment.22 The Informations therein were filed
after preliminary investigations as provided for in Section 11 of Rep. Act No. 8042 and in venues as provided
for in Section 9 of the said act. In People v. Chowdury,23 we held that illegal recruitment is a crime of
economic sabotage and must be enforced.
In People v. Diaz,24 we held that Rep. Act No. 8042 is but an amendment of the Labor Code of the
Philippines and is not an ex-post facto law because it is not applied retroactively. In JMM Promotion and
Management, Inc. v. Court of Appeals,25 the issue of the extent of the police power of the State to regulate a
business, profession or calling vis-à-vis the equal protection clause and the non-impairment clause of the
Constitution were raised and we held, thus:
A profession, trade or calling is a property right within the meaning of our constitutional guarantees.
One cannot be deprived of the right to work and the right to make a living because these rights are
property rights, the arbitrary and unwarranted deprivation of which normally constitutes an
actionable wrong.
Nevertheless, no right is absolute, and the proper regulation of a profession, calling, business or
trade has always been upheld as a legitimate subject of a valid exercise of the police power by the
state particularly when their conduct affects either the execution of legitimate governmental
functions, the preservation of the State, the public health and welfare and public morals. According
to the maxim, sic utere tuo ut alienum non laedas, it must of course be within the legitimate range
of legislative action to define the mode and manner in which every one may so use his own
property so as not to pose injury to himself or others.
In any case, where the liberty curtailed affects at most the rights of property, the permissible scope
of regulatory measures is certainly much wider. To pretend that licensing or accreditation
requirements violates the due process clause is to ignore the settled practice, under the mantle of
the police power, of regulating entry to the practice of various trades or professions. Professionals
leaving for abroad are required to pass rigid written and practical exams before they are deemed fit
to practice their trade. Seamen are required to take tests determining their seamanship. Locally,
the Professional Regulation Commission has begun to require previously licensed doctors and
other professionals to furnish documentary proof that they had either re-trained or had undertaken
continuing education courses as a requirement for renewal of their licenses. It is not claimed that
these requirements pose an unwarranted deprivation of a property right under the due process
clause. So long as professionals and other workers meet reasonable regulatory standards no such
deprivation exists.
Finally, it is a futile gesture on the part of petitioners to invoke the non-impairment clause of the
Constitution to support their argument that the government cannot enact the assailed regulatory
measures because they abridge the freedom to contract. In Philippine Association of Service
Exporters, Inc. vs. Drilon, we held that "[t]he non-impairment clause of the Constitution … must
yield to the loftier purposes targeted by the government." Equally important, into every contract is
read provisions of existing law, and always, a reservation of the police power for so long as the
agreement deals with a subject impressed with the public welfare.
A last point. Petitioners suggest that the singling out of entertainers and performing artists under
the assailed department orders constitutes class legislation which violates the equal protection
clause of the Constitution. We do not agree.
The equal protection clause is directed principally against undue favor and individual or class
privilege. It is not intended to prohibit legislation which is limited to the object to which it is directed
or by the territory in which it is to operate. It does not require absolute equality, but merely that all
persons be treated alike under like conditions both as to privileges conferred and liabilities
imposed. We have held, time and again, that the equal protection clause of the Constitution does
not forbid classification for so long as such classification is based on real and substantial
differences having a reasonable relation to the subject of the particular legislation. If classification
is germane to the purpose of the law, concerns all members of the class, and applies equally to
present and future conditions, the classification does not violate the equal protection guarantee. 26
The validity of Section 6 of R.A. No. 8042 which provides that employees of recruitment agencies may be
criminally liable for illegal recruitment has been upheld in People v. Chowdury:27
As stated in the first sentence of Section 6 of RA 8042, the persons who may be held liable for
illegal recruitment are the principals, accomplices and accessories. An employee of a company or
corporation engaged in illegal recruitment may be held liable as principal, together with his
employer, if it is shown that he actively and consciously participated in illegal recruitment. It has
been held that the existence of the corporate entity does not shield from prosecution the corporate
agent who knowingly and intentionally causes the corporation to commit a crime. The corporation
obviously acts, and can act, only by and through its human agents, and it is their conduct which the
law must deter. The employee or agent of a corporation engaged in unlawful business naturally
aids and abets in the carrying on of such business and will be prosecuted as principal if, with
knowledge of the business, its purpose and effect, he consciously contributes his efforts to its
conduct and promotion, however slight his contribution may be. …28
By its rulings, the Court thereby affirmed the validity of the assailed penal and procedural provisions of Rep.
Act No. 8042, including the imposable penalties therefor. Until the Court, by final judgment, declares that the
said provisions are unconstitutional, the enforcement of the said provisions cannot be enjoined.
The RTC Committed Grave Abuse of Its Discretion Amounting to Excess or Lack of Jurisdiction in Issuing the
Assailed Order and the Writ of Preliminary Injunction
The matter of whether to issue a writ of preliminary injunction or not is addressed to the sound discretion of
the trial court. However, if the court commits grave abuse of its discretion in issuing the said writ amounting
to excess or lack of jurisdiction, the same may be nullified via a writ of certiorari and prohibition.
In Social Security Commission v. Judge Bayona,29 we ruled that a law is presumed constitutional until
otherwise declared by judicial interpretation. The suspension of the operation of the law is a matter of
extreme delicacy because it is an interference with the official acts not only of the duly elected
representatives of the people but also of the highest magistrate of the land.
In Younger v. Harris, Jr.,30 the Supreme Court of the United States emphasized, thus:
Federal injunctions against state criminal statutes, either in their entirety or with respect to their
separate and distinct prohibitions, are not to be granted as a matter of course, even if such statutes
are unconstitutional. No citizen or member of the community is immune from prosecution, in good
faith, for his alleged criminal acts. The imminence of such a prosecution even though alleged to be
unauthorized and, hence, unlawful is not alone ground for relief in equity which exerts its
extraordinary powers only to prevent irreparable injury to the plaintiff who seeks its aid. 752 Beal v.
Missouri Pacific Railroad Corp., 312 U.S. 45, 49, 61 S.Ct. 418, 420, 85 L.Ed. 577.
And similarly, in Douglas, supra, we made clear, after reaffirming this rule, that:
"It does not appear from the record that petitioners have been threatened with any injury other than
that incidental to every criminal proceeding brought lawfully and in good faith …" 319 U.S., at 164,
63 S.Ct., at 881.31
The possible unconstitutionality of a statute, on its face, does not of itself justify an injunction against good
faith attempts to enforce it, unless there is a showing of bad faith, harassment, or any other unusual
circumstance that would call for equitable relief.32 The "on its face" invalidation of statutes has been
described as "manifestly strong medicine," to be employed "sparingly and only as a last resort," and is
generally disfavored.33
To be entitled to a preliminary injunction to enjoin the enforcement of a law assailed to be unconstitutional,

the party must establish that it will suffer irreparable harm in the absence of injunctive relief and must
demonstrate that it is likely to succeed on the merits, or that there are sufficiently serious questions going to
the merits and the balance of hardships tips decidedly in its favor.34 The higher standard reflects judicial
deference toward "legislation or regulations developed through presumptively reasoned democratic
processes." Moreover, an injunction will alter, rather than maintain, the status quo, or will provide the movant
with substantially all the relief sought and that relief cannot be undone even if the defendant prevails at a trial
on the merits.35 Considering that injunction is an exercise of equitable relief and authority, in assessing
whether to issue a preliminary injunction, the courts must sensitively assess all the equities of the situation,
including the public interest.36 In litigations between governmental and private parties, courts go much further
both to give and withhold relief in furtherance of public interest than they are accustomed to go when only
private interests are involved.37 Before the plaintiff may be entitled to injunction against future enforcement,
he is burdened to show some substantial hardship.38
The fear or chilling-effect of the assailed penal provisions of the law on the members of the respondent does
not by itself justify prohibiting the State from enforcing them against those whom the State believes in good
faith to be punishable under the laws:
… Just as the incidental "chilling effect" of such statutes does not automatically render them
unconstitutional, so the chilling effect that admittedly can result from the very existence of certain
laws on the statute books does not in itself justify prohibiting the State from carrying out the
important and necessary task of enforcing these laws against socially harmful conduct that the
State believes in good faith to be punishable under its laws and the Constitution.39
It must be borne in mind that subject to constitutional limitations, Congress is empowered to define what acts
or omissions shall constitute a crime and to prescribe punishments therefor. 40 The power is inherent in
Congress and is part of the sovereign power of the State to maintain peace and order. Whatever views may
be entertained regarding the severity of punishment, whether one believes in its efficiency or its futility, these
are peculiarly questions of legislative policy.41 The comparative gravity of crimes and whether their
consequences are more or less injurious are matters for the State and Congress itself to
determine.42 Specification of penalties involves questions of legislative policy.43
Due process prohibits criminal stability from shifting the burden of proof to the accused, punishing wholly
passive conduct, defining crimes in vague or overbroad language and failing to grant fair warning of illegal
conduct.44 Class legislation is such legislation which denies rights to one which are accorded to others, or
inflicts upon one individual a more severe penalty than is imposed upon another in like case offending. 45 Bills
of attainder are legislative acts which inflict punishment on individuals or members of a particular group
without a judicial trial. Essential to a bill of attainder are a specification of certain individuals or a group of
individuals, the imposition of a punishment, penal or otherwise, and the lack of judicial trial. 46
Penalizing unlicensed and licensed recruitment agencies and their officers and employees and their relatives
employed in government agencies charged with the enforcement of the law for illegal recruitment and
imposing life imprisonment for those who commit large scale illegal recruitment is not offensive to the
Constitution. The accused may be convicted of illegal recruitment and large scale illegal recruitment only if,
after trial, the prosecution is able to prove all the elements of the crime charged. 47
The possibility that the officers and employees of the recruitment agencies, which are members of the
respondent, and their relatives who are employed in the government agencies charged in the enforcement of
the law, would be indicted for illegal recruitment and, if convicted sentenced to life imprisonment for large
scale illegal recruitment, absent proof of irreparable injury, is not sufficient on which to base the issuance of a
writ of preliminary injunction to suspend the enforcement of the penal provisions of Rep. Act No. 8042 and
avert any indictments under the law.48The normal course of criminal prosecutions cannot be blocked on the
basis of allegations which amount to speculations about the future.49
There is no allegation in the amended petition or evidence adduced by the respondent that the officers
and/or employees of its members had been threatened with any indictments for violations of the penal
provisions of Rep. Act No. 8042. Neither is there any allegation therein that any of its members and/or their
officers and employees committed any of the acts enumerated in Section 6(a) to (m) of the law for which they
could be indicted. Neither did the respondent adduce any evidence in the RTC that any or all of its members
or a great number of other duly licensed and registered recruitment agencies had to stop their business
operations because of fear of indictments under Sections 6 and 7 of Rep. Act No. 8042. The respondent
merely speculated and surmised that licensed and registered recruitment agencies would close shop and
stop business operations because of the assailed penal provisions of the law. A writ of preliminary injunction
to enjoin the enforcement of penal laws cannot be based on such conjectures or speculations. The Court
cannot take judicial notice that the processing of deployment papers of overseas workers have come to a
virtual standstill at the POEA because of the assailed provisions of Rep. Act No. 8042. The respondent must
adduce evidence to prove its allegation, and the petitioners accorded a chance to adduce controverting
evidence.
The respondent even failed to adduce any evidence to prove irreparable injury because of the enforcement
of Section 10(1)(2) of Rep. Act No. 8042. Its fear or apprehension that, because of time constraints, its
members would have to defend foreign employees in cases before the Labor Arbiter is based on
speculations. Even if true, such inconvenience or difficulty is hardly irreparable injury.
The trial court even ignored the public interest involved in suspending the enforcement of Rep. Act No. 8042
vis-à-vis the eleven licensed and registered recruitment agencies represented by the respondent. In People
v. Gamboa,50we emphasized the primary aim of Rep. Act No. 8042:
Preliminarily, the proliferation of illegal job recruiters and syndicates preying on innocent people
anxious to obtain employment abroad is one of the primary considerations that led to the
enactment of The Migrant Workers and Overseas Filipinos Act of 1995. Aimed at affording greater
protection to overseas Filipino workers, it is a significant improvement on existing laws in the
recruitment and placement of workers for overseas employment. Otherwise known as the Magna
Carta of OFWs, it broadened the concept of illegal recruitment under the Labor Code and provided
stiffer penalties thereto, especially those that constitute economic sabotage, i.e., Illegal
Recruitment in Large Scale and Illegal Recruitment Committed by a Syndicate.51
By issuing the writ of preliminary injunction against the petitioners sans any evidence, the trial court
frustrated, albeit temporarily, the prosecution of illegal recruiters and allowed them to continue victimizing
hapless and innocent people desiring to obtain employment abroad as overseas workers, and blocked the
attainment of the salutary policies52 embedded in Rep. Act No. 8042. It bears stressing that overseas
workers, land-based and sea-based, had been remitting to the Philippines billions of dollars which over the
years had propped the economy.
In issuing the writ of preliminary injunction, the trial court considered paramount the interests of the eleven
licensed and registered recruitment agencies represented by the respondent, and capriciously overturned the
presumption of the constitutionality of the assailed provisions on the barefaced claim of the respondent that
the assailed provisions of Rep. Act No. 8042 are unconstitutional. The trial court committed a grave abuse of
its discretion amounting to excess or lack of jurisdiction in issuing the assailed order and writ of preliminary
injunction. It is for this reason that the Court issued a temporary restraining order enjoining the enforcement
of the writ of preliminary injunction issued by the trial court.
IN LIGHT OF ALL THE FOREGOING, the petition is GRANTED. The assailed decision of the appellate
court is REVERSED AND SET ASIDE. The Order of the Regional Trial Court dated August 21, 1995 in Civil
Case No. Q-95-24401 and the Writ of Preliminary Injunction issued by it in the said case on August 24, 1995
are NULLIFIED. No costs.
SO ORDERED.
Puno*, Quisumbing**, Austria-Martinez, and Tinga, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. 113375 May 5, 1994
KILOSBAYAN, INCORPORATED, JOVITO R. SALONGA, CIRILO A. RIGOS, ERME CAMBA, EMILIO C.

CAPULONG, JR., JOSE T. APOLO, EPHRAIM TENDERO, FERNANDO SANTIAGO, JOSE ABCEDE,
CHRISTINE TAN, FELIPE L. GOZON, RAFAEL G. FERNANDO, RAOUL V. VICTORINO, JOSE
CUNANAN, QUINTIN S. DOROMAL, SEN. FREDDIE WEBB, SEN. WIGBERTO TAÑADA, and REP.
JOKER P. ARROYO, petitioners,
vs.
TEOFISTO GUINGONA, JR., in his capacity as Executive Secretary, Office of the President; RENATO
CORONA, in his capacity as Assistant Executive Secretary and Chairman of the Presidential review
Committee on the Lotto, Office of the President; PHILIPPINE CHARITY SWEEPSTAKES OFFICE; and
PHILIPPINE GAMING MANAGEMENT CORPORATION, respondents.
Jovito R. Salonga, Fernando Santiago, Emilio C. Capulong, Jr. and Felipe L. Gozon for petitioners.
Renato L. Cayetano and Eleazar B. Reyes for PGMC.
Gamaliel G. Bongco, Oscar Karaan and Jedideoh Sincero for intervenors.
DAVIDE, JR., J.:
This is a special civil action for prohibition and injunction, with a prayer for a temporary restraining order and
preliminary injunction, which seeks to prohibit and restrain the implementation of the "Contract of Lease"
executed by the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Gaming Management
Corporation (PGMC) in connection with the on- line lottery system, also known as "lotto."
Petitioner Kilosbayan, Incorporated (KILOSBAYAN) avers that it is a non-stock domestic corporation

composed of civic-spirited citizens, pastors, priests, nuns, and lay leaders who are committed to the cause of
truth, justice, and national renewal. The rest of the petitioners, except Senators Freddie Webb and Wigberto
Tañada and Representative Joker P. Arroyo, are suing in their capacities as members of the Board of
Trustees of KILOSBAYAN and as taxpayers and concerned citizens. Senators Webb and Tañada and
Representative Arroyo are suing in their capacities as members of Congress and as taxpayers and
concerned citizens of the Philippines.
The pleadings of the parties disclose the factual antecedents which triggered off the filing of this petition.
Pursuant to Section 1 of the charter of the PCSO (R.A. No. 1169, as amended by B.P. Blg. 42) which grants
it the authority to hold and conduct "charity sweepstakes races, lotteries and other similar activities," the
PCSO decided to establish an on- line lottery system for the purpose of increasing its revenue base and
diversifying its sources of funds. Sometime before March 1993, after learning that the PCSO was interested
in operating an on-line lottery system, the Berjaya Group Berhad, "a multinational company and one of the
ten largest public companies in Malaysia," long "engaged in, among others, successful lottery operations in
Asia, running both Lotto and Digit games, thru its subsidiary, Sports Toto Malaysia," with its "affiliate, the
International Totalizator Systems, Inc., . . . an American public company engaged in the international sale or
provision of computer systems, softwares, terminals, training and other technical services to the gaming
industry," "became interested to offer its services and resources to PCSO." As an initial step, Berjaya Group
Berhad (through its individual nominees) organized with some Filipino investors in March 1993 a Philippine
corporation known as the Philippine Gaming Management Corporation (PGMC), which "was intended to be
the medium through which the technical and management services required for the project would be offered
and delivered to PCSO." 1
Before August 1993, the PCSO formally issued a Request for Proposal (RFP) for the Lease Contract of an
on-line lottery system for the PCSO. 2 Relevant provisions of the RFP are the following:
1. EXECUTIVE SUMMARY
xxx xxx xxx
1.2. PCSO is seeking a suitable contractor which shall build, at its own expense, all the
facilities ('Facilities') needed to operate and maintain a nationwide on-line lottery system.
PCSO shall lease the Facilities for a fixed percentage ofquarterly gross receipts. All
receipts from ticket sales shall be turned over directly to PCSO. All capital, operating
expenses and expansion expenses and risks shall be for the exclusive account of the
Lessor.
xxx xxx xxx
1.4. The lease shall be for a period not exceeding fifteen (15) years.
1.5. The Lessor is expected to submit a comprehensive nationwide lottery development

plan ("Development Plan") which will include the game, the marketing of the games, and
the logistics to introduce the games to all the cities and municipalities of the country
within five (5) years.
xxx xxx xxx
1.7. The Lessor shall be selected based on its technical expertise, hardware and
software capability, maintenance support, and financial resources. The Development
Plan shall have a substantial bearing on the choice of the Lessor. The Lessor shall be a
domestic corporation, with at least sixty percent (60%) of its shares owned by Filipino
shareholders.
xxx xxx xxx
The Office of the President, the National Disaster Control Coordinating Council, the
Philippine National Police, and the National Bureau of Investigation shall be authorized to
use the nationwide telecommunications system of the Facilities Free of Charge.
1.8. Upon expiration of the lease, the Facilities shall be owned by PCSO without any
additional consideration. 3
xxx xxx xxx
2.2. OBJECTIVES
The objectives of PCSO in leasing the Facilities from a private entity are as follows:
xxx xxx xxx
2.2.2. Enable PCSO to operate a nationwide on-line Lottery system at no expense or risk
to the government.
xxx xxx xxx
2.4. DUTIES AND RESPONSIBILITIES OF THE LESSOR
xxx xxx xxx
2.4.2. THE LESSOR
The Proponent is expected to furnish and maintain the Facilities, including the personnel
needed to operate the computers, the communications network and sales offices under a
build-lease basis. The printing of tickets shall be undertaken under the supervision and
control of PCSO. The Facilities shall enable PCSO to computerize the entire gaming
system.
The Proponent is expected to formulate and design consumer-oriented Master Games

Plan suited to the marketplace, especially geared to Filipino gaming habits and
preferences. In addition, the Master Games Plan is expected to include a Product Plan
for each game and explain how each will be introduced into the market. This will be an
integral part of the Development Plan which PCSO will require from the Proponent.
xxx xxx xxx
The Proponent is expected to provide upgrades to modernize the entire gaming system
over the life ofthe lease contract.
The Proponent is expected to provide technology transfer to PCSO technical personnel. 4
7. GENERAL GUIDELINES FOR PROPONENTS
xxx xxx xxx
Finally, the Proponent must be able to stand the acid test of proving that it is an entity
able to take on the role of responsible maintainer of the on-line lottery system, and able
to achieve PSCO's goal of formalizing an on-line lottery system to achieve its mandated
objective. 5
xxx xxx xxx
16. DEFINITION OF TERMS
Facilities: All capital equipment, computers, terminals, software, nationwide

telecommunication network, ticket sales offices, furnishings, and fixtures; printing costs;
cost of salaries and wages; advertising and promotion expenses; maintenance costs;
expansion and replacement costs; security and insurance, and all other related expenses
needed to operate nationwide on-line lottery system.6
Considering the above citizenship requirement, the PGMC claims that the Berjaya Group "undertook to
reduce its equity stakes in PGMC to 40%," by selling 35% out of the original 75% foreign stockholdings to
local investors.
On 15 August 1993, PGMC submitted its bid to the PCSO.7
The bids were evaluated by the Special Pre-Qualification Bids and Awards Committee (SPBAC) for the on-
line lottery and its Bid Report was thereafter submitted to the Office of the President. 8 The submission was
preceded by complaints by the Committee's Chairperson, Dr. Mita Pardo de Tavera. 9
On 21 October 1993, the Office of the President announced that it had given the respondent PGMC the go-
signal to operate the country's on-line lottery system and that the corresponding implementing contract would
be submitted not later than 8 November 1993 "for final clearance and approval by the Chief
Executive." 10 This announcement was published in the Manila Standard, Philippine Daily Inquirer, and the
Manila Times on 29 October 1993. 11
On 4 November 1993, KILOSBAYAN sent an open letter to Presidential Fidel V. Ramos strongly opposing
the setting up to the on-line lottery system on the basis of serious moral and ethical considerations. 12
At the meeting of the Committee on Games and Amusements of the Senate on 12 November 1993,
KILOSBAYAN reiterated its vigorous opposition to the on-line lottery on account of its immorality and
illegality. 13
On 19 November 1993, the media reported that despite the opposition, "Malacañang will push through with
the operation of an on-line lottery system nationwide" and that it is actually the respondent PCSO which will
operate the lottery while the winning corporate bidders are merely "lessors." 14
On 1 December 1993, KILOSBAYAN requested copies of all documents pertaining to the lottery award from
Executive Secretary Teofisto Guingona, Jr. In his answer of 17 December 1993, the Executive Secretary
informed KILOSBAYAN that the requested documents would be duly transmitted before the end of the
month. 15. However, on that same date, an agreement denominated as "Contract of Lease" was finally
executed by respondent PCSO and respondent PGMC. 16 The President, per the press statement issued by
the Office of the President, approved it on 20 December 1993.17
In view of their materiality and relevance, we quote the following salient provisions of the Contract of Lease:
1. DEFINITIONS
The following words and terms shall have the following respective meanings:
1.1 Rental Fee — Amount to be paid by PCSO to the LESSOR as compensation for the
fulfillment of the obligations of the LESSOR under this Contract, including, but not limited
to the lease of the Facilities.
xxx xxx xxx
1.3 Facilities — All capital equipment, computers, terminals, software (including source
codes for the On-Line Lottery application software for the terminals, telecommunications
and central systems), technology, intellectual property rights, telecommunications
network, and furnishings and fixtures.
1.4 Maintenance and Other Costs — All costs and expenses relating to printing,
manpower, salaries and wages, advertising and promotion, maintenance, expansion and
replacement, security and insurance, and all other related expenses needed to operate
an On-Line Lottery System, which shall be for the account of the LESSOR. All expenses
relating to the setting-up, operation and maintenance of ticket sales offices of dealers
and retailers shall be borne by PCSO's dealers and retailers.
1.5 Development Plan — The detailed plan of all games, the marketing thereof, number
of players, value of winnings and the logistics required to introduce the games, including
the Master Games Plan as approved by PCSO, attached hereto as Annex "A", modified
as necessary by the provisions of this Contract.
xxx xxx xxx
1.8 Escrow Deposit — The proposal deposit in the sum of Three Hundred Million Pesos
(P300,000,000.00) submitted by the LESSOR to PCSO pursuant to the requirements of
the Request for Proposals.
2. SUBJECT MATTER OF THE LEASE
The LESSOR shall build, furnish and maintain at its own expense and risk the Facilities
for the On-Line Lottery System of PCSO in the Territory on an exclusive basis. The
LESSOR shall bear all Maintenance and Other Costs as defined herein.
xxx xxx xxx
3. RENTAL FEE
For and in consideration of the performance by the LESSOR of its obligations herein,
PCSO shall pay LESSOR a fixed Rental Fee equal to four point nine percent (4.9%) of
gross receipts from ticket sales, payable net of taxes required by law to be withheld, on a
semi-monthly basis. Goodwill, franchise and similar fees shall belong to PCSO.
4. LEASE PERIOD
The period of the lease shall commence ninety (90) days from the date of effectivity of
this Contract and shall run for a period of eight (8) years thereafter, unless sooner
terminated in accordance with this Contract.
5. RIGHTS AND OBLIGATIONS OF PCSO AS OPERATOR OF THE ON-LINE

LOTTERY SYSTEM
PCSO shall be the sole and individual operator of the On-Line Lottery System.
Consequently:
5.1 PCSO shall have sole responsibility to decide whether to implement, fully or partially,
the Master Games Plan of the LESSOR. PCSO shall have the sole responsibility to
determine the time for introducing new games to the market. The Master Games Plan
included in Annex "A" hereof is hereby approved by PCSO.
5.2 PCSO shall have control over revenues and receipts of whatever nature from the On-
Line Lottery System. After paying the Rental Fee to the LESSOR, PCSO shall have
exclusive responsibility to determine the Revenue Allocation Plan; Provided, that the
same shall be consistent with the requirement of R.A. No. 1169, as amended, which fixes
a prize fund of fifty five percent (55%) on the average.
5.3 PCSO shall have exclusive control over the printing of tickets, including but not
limited to the design, text, and contents thereof.
5.4 PCSO shall have sole responsibility over the appointment of dealers or retailers
throughout the country. PCSO shall appoint the dealers and retailers in a timely manner
with due regard to the implementation timetable of the On-Line Lottery System. Nothing
herein shall preclude the LESSOR from recommending dealers or retailers for
appointment by PCSO, which shall act on said recommendation within forty-eight (48)
hours.
5.5 PCSO shall designate the necessary personnel to monitor and audit the daily
performance of the On-Line Lottery System. For this purpose, PCSO designees shall be
given, free of charge, suitable and adequate space, furniture and fixtures, in all offices of
the LESSOR, including but not limited to its headquarters, alternate site, regional and
area offices.
5.6 PCSO shall have the responsibility to resolve, and exclusive jurisdiction over, all
matters involving the operation of the On-Line Lottery System not otherwise provided in
this Contract.
5.7 PCSO shall promulgate procedural and coordinating rules governing all activities
relating to the On-Line Lottery System.
5.8 PCSO will be responsible for the payment of prize monies, commissions to agents
and dealers, and taxes and levies (if any) chargeable to the operator of the On-Line
Lottery System. The LESSOR will bear all other Maintenance and Other Costs, except as
provided in Section 1.4.
5.9 PCSO shall assist the LESSOR in the following:
5.9.1 Work permits for the LESSOR's staff;
5.9.2 Approvals for importation of the Facilities;
5.9.3 Approvals and consents for the On-Line Lottery System; and
5.9.4 Business and premises licenses for all offices of the LESSOR
and licenses for the telecommunications network.
5.10 In the event that PCSO shall pre-terminate this Contract or suspend the operation of
the On-Line Lottery System, in breach of this Contract and through no fault of the
LESSOR, PCSO shall promptly, and in any event not later than sixty (60) days,
reimburse the LESSOR the amount of its total investment cost associated with the On-
Line Lottery System, including but not limited to the cost of the Facilities, and further
compensate the LESSOR for loss of expected net profit after tax, computed over the
unexpired term of the lease.
6. DUTIES AND RESPONSIBILITIES OF THE LESSOR
The LESSOR is one of not more than three (3) lessors of similar facilities for the
nationwide On-Line Lottery System of PCSO. It is understood that the rights of the
LESSOR are primarily those of a lessor of the Facilities, and consequently, all rights
involving the business aspects of the use of the Facilities are within the jurisdiction of
PCSO. During the term of the lease, the LESSOR shall.
6.1 Maintain and preserve its corporate existence, rights and privileges, and conduct its
business in an orderly, efficient, and customary manner.
6.2 Maintain insurance coverage with insurers acceptable to PCSO on all Facilities.
6.3 Comply with all laws, statues, rules and regulations, orders and directives, obligations
and duties by which it is legally bound.
6.4 Duly pay and discharge all taxes, assessments and government charges now and
hereafter imposed of whatever nature that may be legally levied upon it.
6.5 Keep all the Facilities in fail safe condition and, if necessary, upgrade, replace and
improve the Facilities from time to time as new technology develops, in order to make the
On-Line Lottery System more cost-effective and/or competitive, and as may be required
by PCSO shall not impose such requirements unreasonably nor arbitrarily.
6.6 Provide PCSO with management terminals which will allow real-time monitoring of
the On-Line Lottery System.
6.7 Upon effectivity of this Contract, commence the training of PCSO and other local
personnel and the transfer of technology and expertise, such that at the end of the term
of this Contract, PCSO will be able to effectively take-over the Facilities and efficiently
operate the On-Line Lottery System.
6.8 Undertake a positive advertising and promotions campaign for both institutional and
product lines without engaging in negative advertising against other lessors.
6.9 Bear all expenses and risks relating to the Facilities including, but not limited to,
Maintenance and Other Costs and:
xxx xxx xxx
6.10 Bear all risks if the revenues from ticket sales, on an annualized basis, are
insufficient to pay the entire prize money.
6.11 Be, and is hereby, authorized to collect and retain for its own account, a security
deposit from dealers and retailers, in an amount determined with the approval of PCSO,
in respect of equipment supplied by the LESSOR. PCSO's approval shall not be
unreasonably withheld.
xxx xxx xxx
6.12 Comply with procedural and coordinating rules issued by PCSO.
7. REPRESENTATIONS AND WARRANTIES
The LESSOR represents and warrants that:
7.1 The LESSOR is corporation duly organized and existing under the laws of the
Republic of the Philippines, at least sixty percent (60%) of the outstanding capital stock
of which is owned by Filipino shareholders. The minimum required Filipino equity
participation shall not be impaired through voluntary or involuntary transfer, disposition,
or sale of shares of stock by the present stockholders.
7.2 The LESSOR and its Affiliates have the full corporate and legal power and authority
to own and operate their properties and to carry on their business in the place where
such properties are now or may be conducted. . . .
7.3 The LESSOR has or has access to all the financing and funding requirements to
promptly and effectively carry out the terms of this Contract. . . .
7.4 The LESSOR has or has access to all the managerial and technical expertise to
promptly and effectively carry out the terms of this Contract. . . .
xxx xxx xxx
10. TELECOMMUNICATIONS NETWORK
The LESSOR shall establish a telecommunications network that will connect all
municipalities and cities in the Territory in accordance with, at the LESSOR's option,
either of the LESSOR's proposals (or a combinations of both such proposals) attached
hereto as Annex "B," and under the following PCSO schedule:
xxx xxx xxx
PCSO may, at its option, require the LESSOR to establish the telecommunications
network in accordance with the above Timetable in provinces where the LESSOR has
not yet installed terminals. Provided, that such provinces have existing nodes. Once a
municipality or city is serviced by land lines of a licensed public telephone company, and
such lines are connected to Metro Manila, then the obligation of the LESSOR to connect
such municipality or city through a telecommunications network shall cease with respect
to such municipality or city. The voice facility will cover the four offices of the Office of the
President, National Disaster Control Coordinating Council, Philippine National Police and
the National Bureau of Investigation, and each city and municipality in the Territory
except Metro Manila, and those cities and municipalities which have easy telephone
access from these four offices. Voice calls from the four offices shall be transmitted via
radio or VSAT to the remote municipalities which will be connected to this voice facility
through wired network or by radio. The facility shall be designed to handle four private
conversations at any one time.
xxx xxx xxx
13. STOCK DISPERSAL PLAN
Within two (2) years from the effectivity of this Contract, the LESSOR shall cause itself to
be listed in the local stock exchange and offer at least twenty five percent (25%) of its
equity to the public.
14. NON-COMPETITION
The LESSOR shall not, directly or indirectly, undertake any activity or business in
competition with or adverse to the On-Line Lottery System of PCSO unless it obtains the
latter's prior written consent thereto.
15. HOLD HARMLESS CLAUSE
15.1 The LESSOR shall at all times protect and defend, at its cost and expense, PCSO
from and against any and all liabilities and claims for damages and/or suits for or by
reason of any deaths of, or any injury or injuries to any person or persons, or damages to
property of any kind whatsoever, caused by the LESSOR, its subcontractors, its
authorized agents or employees, from any cause or causes whatsoever.
15.2 The LESSOR hereby covenants and agrees to indemnify and hold PCSO harmless
from all liabilities, charges, expenses (including reasonable counsel fees) and costs on
account of or by reason of any such death or deaths, injury or injuries, liabilities, claims,
suits or losses caused by the LESSOR's fault or negligence.
15.3 The LESSOR shall at all times protect and defend, at its own cost and expense, its
title to the facilities and PCSO's interest therein from and against any and all claims for
the duration of the Contract until transfer to PCSO of ownership of the serviceable
Facilities.
16. SECURITY
16.1 To ensure faithful compliance by the LESSOR with the terms of the Contract, the
LESSOR shall secure a Performance Bond from a reputable insurance company or
companies acceptable to PCSO.
16.2 The Performance Bond shall be in the initial amount of Three Hundred Million Pesos
(P300,000,000.00), to its U.S. dollar equivalent, and shall be renewed to cover the
duration of the Contract. However, the Performance Bond shall be reduced
proportionately to the percentage of unencumbered terminals installed; Provided, that the
Performance Bond shall in no case be less than One Hundred Fifty Million Pesos
(P150,000,000.00).
16.3 The LESSOR may at its option maintain its Escrow Deposit as the Performance
Bond. . . .
17. PENALTIES
17.1 Except as may be provided in Section 17.2, should the LESSOR fail to take
remedial measures within seven (7) days, and rectify the breach within thirty (30) days,
from written notice by PCSO of any wilfull or grossly negligent violation of the material
terms and conditions of this Contract, all unencumbered Facilities shall automatically
become the property of PCSO without consideration and without need for further notice
or demand by PCSO. The Performance Bond shall likewise be forfeited in favor of
PCSO.
17.2 Should the LESSOR fail to comply with the terms of the Timetables provided in
Section 9 and 10, it shall be subject to an initial Penalty of Twenty Thousand Pesos
(P20,000.00), per city or municipality per every month of delay; Provided, that the
Penalty shall increase, every ninety (90) days, by the amount of Twenty Thousand Pesos
(P20,000.00) per city or municipality per month, whilst shall failure to comply persists.
The penalty shall be deducted by PCSO from the rental fee.
xxx xxx xxx
20. OWNERSHIP OF THE FACILITIES
After expiration of the term of the lease as provided in Section 4, the Facilities directly
required for the On-Line Lottery System mentioned in Section 1.3 shall automatically
belong in full ownership to PCSO without any further consideration other than the Rental
Fees already paid during the effectivity of the lease.
21. TERMINATION OF THE LEASE
PCSO may terminate this Contract for any breach of the material provisions of this
Contract, including the following:
21.1 The LESSOR is insolvent or bankrupt or unable to pay its debts, stops or suspends
or threatens to stop or suspend payment of all or a material part of its debts, or proposes
or makes a general assignment or an arrangement or compositions with or for the benefit
of its creditors; or
21.2 An order is made or an effective resolution passed for the winding up or dissolution
of the LESSOR or when it ceases or threatens to cease to carry on all or a material part
of its operations or business; or
21.3 Any material statement, representation or warranty made or furnished by the

LESSOR proved to be materially false or misleading;
said termination to take effect upon receipt of written notice of

termination by the LESSOR and failure to take remedial action within
seven (7) days and cure or remedy the same within thirty (30) days
from notice.
Any suspension, cancellation or termination of this Contract shall not

relieve the LESSOR of any liability that may have already accrued
hereunder.
xxx xxx xxx
Considering the denial by the Office of the President of its protest and the statement of Assistant Executive
Secretary Renato Corona that "only a court injunction can stop Malacañang," and the imminent
implementation of the Contract of Lease in February 1994, KILOSBAYAN, with its co-petitioners, filed on 28
January 1994 this petition.
In support of the petition, the petitioners claim that:
. . . X X THE OFFICE OF THE PRESIDENT, ACTING THROUGH

RESPONDENTS EXECUTIVE SECRETARY AND/OR ASSISTANT
EXECUTIVE SECRETARY FOR LEGAL AFFAIRS, AND THE PCSO
GRAVELY ABUSE[D] THEIR DISCRETION AND/OR FUNCTIONS
TANTAMOUNT TO LACK OF JURISDICTION AND/OR AUTHORITY
IN RESPECTIVELY: (A) APPROVING THE AWARD OF THE
CONTRACT TO, AND (B) ENTERING INTO THE SO-CALLED
"CONTRACT OF LEASE" WITH, RESPONDENT PGMC FOR THE
INSTALLATION, ESTABLISHMENT AND OPERATION OF THE ON-
LINE LOTTERY AND TELECOMMUNICATION SYSTEMS
REQUIRED AND/OR AUTHORIZED UNDER THE SAID
CONTRACT, CONSIDERING THAT:
a) Under Section 1 of the Charter of the PCSO, the PCSO is prohibited from holding and
conducting lotteries "in collaboration, association or joint venture with any person,
association, company or entity";
b) Under Act No. 3846 and established jurisprudence, a Congressional franchise is

required before any person may be allowed to establish and operate said
telecommunications system;
c) Under Section 11, Article XII of the Constitution, a less than 60% Filipino-owned
and/or controlled corporation, like the PGMC, is disqualified from operating a public
service, like the said telecommunications system; and
d) Respondent PGMC is not authorized by its charter and under the Foreign Investment
Act (R.A. No. 7042) to install, establish and operate the on-line lotto and
telecommunications systems.18
Petitioners submit that the PCSO cannot validly enter into the assailed Contract of Lease with the PGMC
because it is an arrangement wherein the PCSO would hold and conduct the on-line lottery system in
"collaboration" or "association" with the PGMC, in violation of Section 1(B) of R.A. No. 1169, as amended by
B.P. Blg. 42, which prohibits the PCSO from holding and conducting charity sweepstakes races, lotteries,
and other similar activities "in collaboration, association or joint venture with any person, association,
company or entity, foreign or domestic." Even granting arguendo that a lease of facilities is not within the
contemplation of "collaboration" or "association," an analysis, however, of the Contract of Lease clearly
shows that there is a "collaboration, association, or joint venture between respondents PCSO and PGMC in
the holding of the On-Line Lottery System," and that there are terms and conditions of the Contract "showing
that respondent PGMC is the actual lotto operator and not respondent PCSO." 19
The petitioners also point out that paragraph 10 of the Contract of Lease requires or authorizes PGMC to
establish a telecommunications network that will connect all the municipalities and cities in the territory.
However, PGMC cannot do that because it has no franchise from Congress to construct, install, establish, or
operate the network pursuant to Section 1 of Act No. 3846, as amended. Moreover, PGMC is a 75% foreign-
owned or controlled corporation and cannot, therefore, be granted a franchise for that purpose because of
Section 11, Article XII of the 1987 Constitution. Furthermore, since "the subscribed foreign capital" of the
PGMC "comes to about 75%, as shown by paragraph EIGHT of its Articles of Incorporation," it cannot
lawfully enter into the contract in question because all forms of gambling — and lottery is one of them — are
included in the so-called foreign investments negative list under the Foreign Investments Act (R.A. No. 7042)
where only up to 40% foreign capital is allowed. 20
Finally, the petitioners insist that the Articles of Incorporation of PGMC do not authorize it to establish and
operate an on-line lottery and telecommunications systems.21
Accordingly, the petitioners pray that we issue a temporary restraining order and a writ of preliminary
injunction commanding the respondents or any person acting in their places or upon their instructions to
cease and desist from implementing the challenged Contract of Lease and, after hearing the merits of the
petition, that we render judgment declaring the Contract of Lease void and without effect and making the
injunction permanent. 22
We required the respondents to comment on the petition.
In its Comment filed on 1 March 1994, private respondent PGMC asserts that "(1) [it] is merely an
independent contractor for a piece of work, (i.e., the building and maintenance of a lottery system to be used
by PCSO in the operation of its lottery franchise); and (2) as such independent contractor, PGMC is not a co-
operator of the lottery franchise with PCSO, nor is PCSO sharing its franchise, 'in collaboration, association
or joint venture' with PGMC — as such statutory limitation is viewed from the context, intent, and spirit of
Republic Act 1169, as amended by Batas Pambansa 42." It further claims that as an independent contractor
for a piece of work, it is neither engaged in "gambling" nor in "public service" relative to the
telecommunications network, which the petitioners even consider as an "indispensable requirement" of an
on-line lottery system. Finally, it states that the execution and implementation of the contract does not violate
the Constitution and the laws; that the issue on the "morality" of the lottery franchise granted to the PCSO is
political and not judicial or legal, which should be ventilated in another forum; and that the "petitioners do not
appear to have the legal standing or real interest in the subject contract and in obtaining the reliefs
sought." 23
In their Comment filed by the Office of the Solicitor General, public respondents Executive Secretary Teofisto
Guingona, Jr., Assistant Executive Secretary Renato Corona, and the PCSO maintain that the contract of
lease in question does not violate Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and that the
petitioner's interpretation of the phrase "in collaboration, association or joint venture" in Section 1 is "much
too narrow, strained and utterly devoid of logic" for it "ignores the reality that PCSO, as a corporate entity, is
vested with the basic and essential prerogative to enter into all kinds of transactions or contracts as may be
necessary for the attainment of its purposes and objectives." What the PCSO charter "seeks to prohibit is
that arrangement akin to a "joint venture" or partnership where there is "community of interest in the
business, sharing of profits and losses, and a mutual right of control," a characteristic which does not obtain
in a contract of lease." With respect to the challenged Contract of Lease, the "role of PGMC is limited to that
of a lessor of the facilities" for the on-line lottery system; in "strict technical and legal sense," said contract
"can be categorized as a contract for a piece of work as defined in Articles 1467, 1713 and 1644 of the Civil
Code."
They further claim that the establishment of the telecommunications system stipulated in the Contract of
Lease does not require a congressional franchise because PGMC will not operate a public utility; moreover,
PGMC's "establishment of a telecommunications system is not intended to establish a telecommunications
business," and it has been held that where the facilities are operated "not for business purposes but for its
own use," a legislative franchise is not required before a certificate of public convenience can be
granted. 24 Even granting arguendo that PGMC is a public utility, pursuant to Albano S.
Reyes, 25 "it can establish a telecommunications system even without a legislative franchise because not
every public utility is required to secure a legislative franchise before it could establish, maintain, and operate
the service"; and, in any case, "PGMC's establishment of the telecommunications system stipulated in its
contract of lease with PCSO falls within the exceptions under Section 1 of Act No. 3846 where a legislative
franchise is not necessary for the establishment of radio stations."
They also argue that the contract does not violate the Foreign Investment Act of 1991; that the Articles of
Incorporation of PGMC authorize it to enter into the Contract of Lease; and that the issues of "wisdom,
morality and propriety of acts of the executive department are beyond the ambit of judicial review."
Finally, the public respondents allege that the petitioners have no standing to maintain the instant suit, citing
our resolution in Valmonte vs. Philippine Charity Sweepstakes Office. 26
Several parties filed motions to intervene as petitioners in this case, 27 but only the motion of Senators
Alberto Romulo, Arturo Tolentino, Francisco Tatad, Gloria Macapagal-Arroyo, Vicente Sotto III, John
Osmeña, Ramon Revilla, and Jose Lina 28 was granted, and the respondents were required to comment on
their petition in intervention, which the public respondents and PGMC did.
In the meantime, the petitioners filed with the Securities and Exchange Commission on 29 March 1994 a
petition against PGMC for the nullification of the latter's General Information Sheets. That case, however, has
no bearing in this petition.
On 11 April 1994, we heard the parties in oral arguments. Thereafter, we resolved to consider the matter
submitted for resolution and pending resolution of the major issues in this case, to issue a temporary
restraining order commanding the respondents or any person acting in their place or upon their instructions
to cease and desist from implementing the challenged Contract of Lease.
In the deliberation on this case on 26 April 1994, we resolved to consider only these issues: (a) the locus
standi of the petitioners, and (b) the legality and validity of the Contract of Lease in the light of Section 1 of
R.A. No. 1169, as amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting lotteries
"in collaboration, association or joint venture with any person, association, company or entity, whether
domestic or foreign." On the first issue, seven Justices voted to sustain the locus standi of the petitioners,
while six voted not to. On the second issue, the seven Justices were of the opinion that the Contract of Lease
violates the exception to Section 1(B) of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore,
invalid and contrary to law. The six Justices stated that they wished to express no opinion thereon in view of
their stand on the first issue. The Chief Justice took no part because one of the Directors of the PCSO is his
brother-in-law.
This case was then assigned to this ponente for the writing of the opinion of the Court.
The preliminary issue on the locus standi of the petitioners should, indeed, be resolved in their favor. A
party's standing before this Court is a procedural technicality which it may, in the exercise of its discretion,
set aside in view of the importance of the issues raised. In the landmark Emergency Powers Cases, 29 this
Court brushed aside this technicality because "the transcendental importance to the public of these cases
demands that they be settled promptly and definitely, brushing aside, if we must, technicalities of procedure.
(Avelino vs. Cuenco, G.R. No. L-2821)." Insofar as taxpayers' suits are concerned, this Court had declared
that it "is not devoid of discretion as to whether or not it should be entertained," 30 or that it "enjoys an open
discretion to entertain the same or not." 31 In De La Llana vs. Alba, 32 this Court declared:
1. The argument as to the lack of standing of petitioners is easily resolved. As far as
Judge de la Llana is concerned, he certainly falls within the principle set forth in Justice
Laurel's opinion in People vs. Vera [65 Phil. 56 (1937)]. Thus: "The unchallenged rule is
that the person who impugns the validity of a statute must have a personal and
substantial interest in the case such that he has sustained, or will sustain, direct injury as
a result of its enforcement [Ibid, 89]. The other petitioners as members of the bar and
officers of the court cannot be considered as devoid of "any personal and substantial
interest" on the matter. There is relevance to this excerpt from a separate opinion
in Aquino, Jr. v. Commission on Elections [L-40004, January 31, 1975, 62 SCRA 275]:
"Then there is the attack on the standing of petitioners, as vindicating at most what they
consider a public right and not protecting their rights as individuals. This is to conjure the
specter of the public right dogma as an inhibition to parties intent on keeping public
officials staying on the path of constitutionalism. As was so well put by Jaffe; "The
protection of private rights is an essential constituent of public interest and, conversely,
without a well-ordered state there could be no enforcement of private rights. Private and
public interests are, both in a substantive and procedural sense, aspects of the totality of
the legal order." Moreover, petitioners have convincingly shown that in their capacity as
taxpayers, their standing to sue has been amply demonstrated. There would be a retreat
from the liberal approach followed in Pascual v. Secretary of Public Works,
foreshadowed by the very decision of People v. Vera where the doctrine was first fully
discussed, if we act differently now. I do not think we are prepared to take that step.
Respondents, however, would hard back to the American Supreme Court doctrine
in Mellon v. Frothingham, with their claim that what petitioners possess "is an interest
which is shared in common by other people and is comparatively so minute and
indeterminate as to afford any basis and assurance that the judicial process can act on
it." That is to speak in the language of a bygone era, even in the United States. For as
Chief Justice Warren clearly pointed out in the later case of Flast v. Cohen, the barrier
thus set up if not breached has definitely been lowered.
In Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan,33 reiterated in Basco vs.
Philippine Amusements and Gaming Corporation,34 this Court stated:
Objections to taxpayers' suits for lack of sufficient personality standing or interest are,
however, in the main procedural matters. Considering the importance to the public of the
cases at bar, and in keeping with the Court's duty, under the 1987 Constitution, to
determine whether or not the other branches of government have kept themselves within
the limits of the Constitution and the laws and that they have not abused the discretion
given to them, this Court has brushed aside technicalities of procedure and has taken
cognizance of these petitions.
and in Association of Small Landowners in the Philippines, Inc. vs. Secretary of Agrarian Reform,35 it
declared:
With particular regard to the requirement of proper party as applied in the cases before
us, we hold that the same is satisfied by the petitioners and intervenors because each of
them has sustained or is in danger of sustaining an immediate injury as a result of the
acts or measures complained of. [Ex ParteLevitt, 303 US 633]. And even if, strictly
speaking, they are not covered by the definition, it is still within the wide discretion of the
Court to waive the requirement and so remove the impediment to its addressing and
resolving the serious constitutional questions raised.
In the first Emergency Powers Cases, ordinary citizens and taxpayers were allowed to
question the constitutionality of several executive orders issued by President Quirino
although they were invoking only an indirect and general interest shared in common with
the public. The Court dismissed the objective that they were not proper parties and ruled
that the transcendental importance to the public of these cases demands that they be
settled promptly and definitely, brushing aside, if we must, technicalities of procedure.
We have since then applied this exception in many other cases. (Emphasis supplied)
In Daza vs. Singson, 36 this Court once more said:
. . . For another, we have early as in the Emergency Powers Cases that where serious
constitutional questions are involved, "the transcendental importance to the public of
these cases demands that they be settled promptly and definitely, brushing aside, if we
must, technicalities of procedure." The same policy has since then been consistently
followed by the Court, as in Gonzales vs. Commission on Elections [21 SCRA 774] . . .
The Federal Supreme Court of the United States of America has also expressed its discretionary power to
liberalize the rule on locus standi. In United States vs. Federal Power Commission and Virginia Rea
Association vs. Federal Power Commission,37 it held:
We hold that petitioners have standing. Differences of view, however, preclude a single
opinion of the Court as to both petitioners. It would not further clarification of this
complicated specialty of federal jurisdiction, the solution of whose problems is in any
event more or less determined by the specific circumstances of individual situations, to
set out the divergent grounds in support of standing in these cases.
In line with the liberal policy of this Court on locus standi, ordinary taxpayers, members of Congress, and
even association of planters, and non-profit civic organizations were allowed to initiate and prosecute actions
before this Court to question the constitutionality or validity of laws, acts, decisions, rulings, or orders of
various government agencies or instrumentalities. Among such cases were those assailing the
constitutionality of (a) R.A. No. 3836 insofar as it allows retirement gratuity and commutation of vacation and
sick leave to Senators and Representatives and to elective officials of both Houses of Congress; 38 (b)
Executive Order No. 284, issued by President Corazon C. Aquino on 25 July 1987, which allowed members
of the cabinet, their undersecretaries, and assistant secretaries to hold other government offices or
positions; 39 (c) the automatic appropriation for debt service in the General Appropriations Act; 40 (d) R.A. No.
7056 on the holding of desynchronized elections; 41 (d) R.A. No. 1869 (the charter of the Philippine
Amusement and Gaming Corporation) on the ground that it is contrary to morals, public policy, and
order; 42 and (f) R.A. No. 6975, establishing the Philippine National
Police. 43
Other cases where we have followed a liberal policy regarding locus standi include those attacking the
validity or legality of (a) an order allowing the importation of rice in the light of the prohibition imposed by R.A.
No. 3452; 44 (b) P.D. Nos. 991 and 1033 insofar as they proposed amendments to the Constitution and P.D.
No. 1031 insofar as it directed the COMELEC to supervise, control, hold, and conduct the referendum-
plebiscite on 16 October 1976; 45(c) the bidding for the sale of the 3,179 square meters of land at Roppongi,
Minato-ku, Tokyo, Japan; 46 (d) the approval without hearing by the Board of Investments of the amended
application of the Bataan Petrochemical Corporation to transfer the site of its plant from Bataan to Batangas
and the validity of such transfer and the shift of feedstock from naphtha only to naphtha and/or liquefied
petroleum gas; 47 (e) the decisions, orders, rulings, and resolutions of the Executive Secretary, Secretary of
Finance, Commissioner of Internal Revenue, Commissioner of Customs, and the Fiscal Incentives Review
Board exempting the National Power Corporation from indirect tax and duties; 48 (f) the orders of the Energy
Regulatory Board of 5 and 6 December 1990 on the ground that the hearings conducted on the second
provisional increase in oil prices did not allow the petitioner substantial cross-examination; 49 (g) Executive
Order No. 478 which levied a special duty of P0.95 per liter or P151.05 per barrel of imported crude oil and
P1.00 per liter of imported oil products; 50 (h) resolutions of the Commission on Elections concerning the
apportionment, by district, of the number of elective members of Sanggunians; 51 and (i) memorandum
orders issued by a Mayor affecting the Chief of Police of Pasay City.52
In the 1975 case of Aquino vs. Commission on Elections, 53 this Court, despite its unequivocal ruling that the
petitioners therein had no personality to file the petition, resolved nevertheless to pass upon the issues
raised because of the far-reaching implications of the petition. We did no less in De Guia vs.
COMELEC 54 where, although we declared that De Guia "does not appear to have locus standi, a standing in
law, a personal or substantial interest," we brushed aside the procedural infirmity "considering the
importance of the issue involved, concerning as it does the political exercise of qualified voters affected by
the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by
respondent."
We find the instant petition to be of transcendental importance to the public. The issues it raised are of
paramount public interest and of a category even higher than those involved in many of the aforecited cases.
The ramifications of such issues immeasurably affect the social, economic, and moral well-being of the
people even in the remotest barangays of the country and the counter-productive and retrogressive effects of
the envisioned on-line lottery system are as staggering as the billions in pesos it is expected to raise. The
legal standing then of the petitioners deserves recognition and, in the exercise of its sound discretion, this
Court hereby brushes aside the procedural barrier which the respondents tried to take advantage of.
And now on the substantive issue.
Section 1 of R.A. No. 1169, as amending by B.P. Blg. 42, prohibits the PCSO from holding and conducting
lotteries "in collaboration, association or joint venture with any person, association, company or entity,
whether domestic or foreign." Section 1 provides:
Sec. 1. The Philippine Charity Sweepstakes Office. — The Philippine Charity

Sweepstakes Office, hereinafter designated the Office, shall be the principal government
agency for raising and providing for funds for health programs, medical assistance and
services and charities of national character, and as such shall have the general powers
conferred in section thirteen of Act Numbered One thousand four hundred fifty-nine, as
amended, and shall have the authority:
A. To hold and conduct charity sweepstakes races, lotteries and

other similar activities, in such frequency and manner, as shall be
determined, and subject to such rules and regulations as shall be
promulgated by the Board of Directors.
B. Subject to the approval of the Minister of Human Settlements, to

engage in health and welfare-related investments, programs, projects
and activities which may be profit-oriented, by itself or in
collaboration, association or joint venture with any person,
association, company or entity, whether domestic or foreign, except
for the activities mentioned in the preceding paragraph (A), for the
purpose of providing for permanent and continuing sources of funds
for health programs, including the expansion of existing ones,
medical assistance and services, and/or charitable grants: Provided,
That such investment will not compete with the private sector in
areas where investments are adequate as may be determined by the
National Economic and Development Authority. (emphasis supplied)
The language of the section is indisputably clear that with respect to its franchise or privilege "to hold and
conduct charity sweepstakes races, lotteries and other similar activities," the PCSO cannot exercise it "in
collaboration, association or joint venture" with any other party. This is the unequivocal meaning and import
of the phrase "except for the activities mentioned in the preceding paragraph (A)," namely, "charity
sweepstakes races, lotteries and other similar activities."
B.P. Blg. 42 originated from Parliamentary Bill No. 622, which was covered by Committee Report No. 103 as
reported out by the Committee on Socio-Economic Planning and Development of the Interim Batasang
Pambansa. The original text of paragraph B, Section 1 of Parliamentary Bill No. 622 reads as follows:
To engage in any and all investments and related profit-oriented projects or programs
and activities by itself or in collaboration, association or joint venture with any person,
association, company or entity, whether domestic or foreign, for the main purpose of
raising funds for health and medical assistance and services and charitable grants. 55
During the period of committee amendments, the Committee on Socio-Economic Planning and Development,
through Assemblyman Ronaldo B. Zamora, introduced an amendment by substitution to the said paragraph
B such that, as amended, it should read as follows:
Subject to the approval of the Minister of Human Settlements, to engage in health-

oriented investments, programs, projects and activities which may be profit- oriented, by
itself or in collaboration, association, or joint venture with any person, association,
company or entity, whether domestic or foreign, for the purpose of providing for
permanent and continuing sources of funds for health programs, including the expansion
of existing ones, medical assistance and services and/or charitable grants. 56
Before the motion of Assemblyman Zamora for the approval of the amendment could be acted upon,
Assemblyman Davide introduced an amendment to the amendment:
MR. DAVIDE.
Mr. Speaker.
THE SPEAKER.
The gentleman from Cebu is recognized.
MR. DAVIDE.
May I introduce an amendment to the committee

amendment? The amendment would be to insert
after "foreign" in the amendment just read the
following: EXCEPT FOR THE ACTIVITY IN
LETTER (A) ABOVE.
When it is joint venture or in collaboration with

any entity such collaboration or joint venture
must not include activity activity letter (a) which is
the holding and conducting of sweepstakes
races, lotteries and other similar acts.
MR. ZAMORA.
We accept the amendment, Mr. Speaker.
MR. DAVIDE.
Thank you, Mr. Speaker.
THE SPEAKER.
Is there any objection to the amendment?

(Silence) The amendment, as amended, is
approved. 57
Further amendments to paragraph B were introduced and approved. When Assemblyman Zamora read the
final text of paragraph B as further amended, the earlier approved amendment of Assemblyman Davide
became "EXCEPT FOR THE ACTIVITIES MENTIONED IN PARAGRAPH (A)"; and by virtue of the
amendment introduced by Assemblyman Emmanuel Pelaez, the word PRECEDING was inserted before
PARAGRAPH. Assemblyman Pelaez introduced other amendments. Thereafter, the new paragraph B was
approved. 58
This is now paragraph B, Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42.
No interpretation of the said provision to relax or circumvent the prohibition can be allowed since the privilege
to hold or conduct charity sweepstakes races, lotteries, or other similar activities is a franchise granted by the
legislature to the PCSO. It is a settled rule that "in all grants by the government to individuals or corporations
of rights, privileges and franchises, the words are to be taken most strongly against the grantee .... [o]ne who
claims a franchise or privilege in derogation of the common rights of the public must prove his title thereto by
a grant which is clearly and definitely expressed, and he cannot enlarge it by equivocal or doubtful provisions
or by probable inferences. Whatever is not unequivocally granted is withheld. Nothing passes by mere
implication." 59
In short then, by the exception explicitly made in paragraph B, Section 1 of its charter, the PCSO cannot
share its franchise with another by way of collaboration, association or joint venture. Neither can it assign,
transfer, or lease such franchise. It has been said that "the rights and privileges conferred under a franchise
may, without doubt, be assigned or transferred when the grant is to the grantee and assigns, or is authorized
by statute. On the other hand, the right of transfer or assignment may be restricted by statute or the
constitution, or be made subject to the approval of the grantor or a governmental agency, such as a public
utilities commission, exception that an existing right of assignment cannot be impaired by subsequent
legislation." 60
It may also be pointed out that the franchise granted to the PCSO to hold and conduct lotteries allows it to
hold and conduct a species of gambling. It is settled that "a statute which authorizes the carrying on of a
gambling activity or business should be strictly construed and every reasonable doubt so resolved as to limit
the powers and rights claimed under its authority." 61
Does the challenged Contract of Lease violate or contravene the exception in Section 1 of R.A. No. 1169, as
amended by B.P. Blg. 42, which prohibits the PCSO from holding and conducting lotteries "in collaboration,
association or joint venture with" another?
We agree with the petitioners that it does, notwithstanding its denomination or designation as a (Contract of
Lease). We are neither convinced nor moved or fazed by the insistence and forceful arguments of the PGMC
that it does not because in reality it is only an independent contractor for a piece of work, i.e., the building
and maintenance of a lottery system to be used by the PCSO in the operation of its lottery franchise.
Whether the contract in question is one of lease or whether the PGMC is merely an independent contractor
should not be decided on the basis of the title or designation of the contract but by the intent of the parties,
which may be gathered from the provisions of the contract itself. Animus hominis est anima scripti. The
intention of the party is the soul of the instrument. In order to give life or effect to an instrument, it is essential
to look to the intention of the individual who executed it. 62 And, pursuant to Article 1371 of the Civil Code, "to
determine the intention of the contracting parties, their contemporaneous and subsequent acts shall be
principally considered." To put it more bluntly, no one should be deceived by the title or designation of a
contract.
A careful analysis and evaluation of the provisions of the contract and a consideration of the
contemporaneous acts of the PCSO and PGMC indubitably disclose that the contract is not in reality a
contract of lease under which the PGMC is merely an independent contractor for a piece of work, but one
where the statutorily proscribed collaboration or association, in the least, or joint venture, at the most, exists
between the contracting parties. Collaboration is defined as the acts of working together in a joint
project. 63 Association means the act of a number of persons in uniting together for some special purpose or
business. 64 Joint venture is defined as an association of persons or companies jointly undertaking some
commercial enterprise; generally all contribute assets and share risks. It requires a community of interest in
the performance of the subject matter, a right to direct and govern the policy in connection therewith, and
duty, which may be altered by agreement to share both in profit and
losses.65
The contemporaneous acts of the PCSO and the PGMC reveal that the PCSO had neither funds of its own
nor the expertise to operate and manage an on-line lottery system, and that although it wished to have the
system, it would have it "at no expense or risks to the government." Because of these serious constraints
and unwillingness to bear expenses and assume risks, the PCSO was candid enough to state in its RFP that
it is seeking for "a suitable contractor which shall build, at its own expense, all the facilities needed to operate
and maintain" the system; exclusively bear "all capital, operating expenses and expansion expenses and
risks"; and submit "a comprehensive nationwide lottery development plan . . . which will include the game,
the marketing of the games, and the logistics to introduce the game to all the cities and municipalities of the
country within five (5) years"; and that the operation of the on-line lottery system should be "at no expense or
risk to the government" — meaning itself, since it is a government-owned and controlled agency.
The facilities referred to means "all capital equipment, computers, terminals, software, nationwide
telecommunications network, ticket sales offices, furnishings and fixtures, printing costs, costs of salaries and
wages, advertising and promotions expenses, maintenance costs, expansion and replacement costs,
security and insurance, and all other related expenses needed to operate a nationwide on-line lottery
system."
In short, the only contribution the PCSO would have is its franchise or authority to operate the on-line lottery
system; with the rest, including the risks of the business, being borne by the proponent or bidder. It could be
for this reason that it warned that "the proponent must be able to stand to the acid test of proving that it is an
entity able to take on the role of responsible maintainer of the on-line lottery system." The PCSO, however,
makes it clear in its RFP that the proponent can propose a period of the contract which shall not exceed
fifteen years, during which time it is assured of a "rental" which shall not exceed 12% of gross receipts. As
admitted by the PGMC, upon learning of the PCSO's decision, the Berjaya Group Berhad, with its affiliates,
wanted to offer its services and resources to the PCSO. Forthwith, it organized the PGMC as "a medium
through which the technical and management services required for the project would be offered and
delivered to PCSO." 66
Undoubtedly, then, the Berjaya Group Berhad knew all along that in connection with an on-line lottery
system, the PCSO had nothing but its franchise, which it solemnly guaranteed it had in the General
Information of the RFP. 67Howsoever viewed then, from the very inception, the PCSO and the PGMC
mutually understood that any arrangement between them would necessarily leave to the PGMC
the technical, operations, and managementaspects of the on-line lottery system while the PCSO would,
primarily, provide the franchise. The words Gaming andManagement in the corporate name of respondent
Philippine Gaming Management Corporation could not have been conceived just for euphemistic purposes.
Of course, the RFP cannot substitute for the Contract of Lease which was subsequently executed by the
PCSO and the PGMC. Nevertheless, the Contract of Lease incorporates their intention and understanding.
The so-called Contract of Lease is not, therefore, what it purports to be. Its denomination as such is a crafty
device, carefully conceived, to provide a built-in defense in the event that the agreement is questioned as
violative of the exception in Section 1 (B) of the PCSO's charter. The acuity or skill of its draftsmen to
accomplish that purpose easily manifests itself in the Contract of Lease. It is outstanding for its careful and
meticulous drafting designed to give an immediate impression that it is a contract of lease. Yet, woven
therein are provisions which negate its title and betray the true intention of the parties to be in or to have
a joint venture for a period of eight years in the operation and maintenance of the on-line lottery system.
Consistent with the above observations on the RFP, the PCSO has only its franchise to offer, while the
PGMC represents and warrants that it has access to all managerial and technical expertise to promptly and
effectively carry out the terms of the contract. And, for a period of eight years, the PGMC is under obligation
to keep all the Facilitiesin safe condition and if necessary, upgrade, replace, and improve them from time to
time as new technology develops to make the on-line lottery system more cost-effective and competitive;
exclusively bear all costs and expenses relating to the printing, manpower, salaries and wages, advertising
and promotion, maintenance, expansion and replacement, security and insurance, and all other related
expenses needed to operate the on-line lottery system; undertake a positive advertising and promotions
campaign for both institutional and product lines without engaging in negative advertising against other
lessors; bear the salaries and related costs of skilled and qualified personnel for administrative and
technical operations; comply with procedural and coordinating rulesissued by the PCSO; and to train PCSO
and other local personnel and to effect the transfer of technology and other expertise, such that at the end of
the term of the contract, the PCSO will be able to effectively take over the Facilities and efficiently operate
the on-line lottery system. The latter simply means that, indeed, the managers, technicians or employees
who shall operate the on-line lottery system are not managers, technicians or employees of the PCSO, but of
the PGMC and that it is only after the expiration of the contract that the PCSO will operate the system. After
eight years, the PCSO would automatically become the owner of the Facilities without any other further
consideration.
For these reasons, too, the PGMC has the initial prerogative to prepare the detailed plan of all games and
the marketing thereof, and determine the number of players, value of winnings, and the logistics required to
introduce the games, including the Master Games Plan. Of course, the PCSO has the reserved authority to
disapprove them. 68 And, while the PCSO has the sole responsibility over the appointment of dealers and
retailers throughout the country, the PGMC may, nevertheless, recommend for appointment dealers and
retailers which shall be acted upon by the PCSO within forty-eight hours and collect and retain, for its own
account, a security deposit from dealers and retailers in respect of equipment supplied by it.
This joint venture is further established by the following:
(a) Rent is defined in the lease contract as the amount to be paid to the PGMC as compensation for the
fulfillment of its obligations under the contract, including, but not limited to the lease of the Facilities.
However, this rent is not actually a fixed amount. Although it is stated to be 4.9% of gross receipts from ticket
sales, payable net of taxes required by law to be withheld, it may be drastically reduced or, in extreme cases,
nothing may be due or demandable at all because the PGMC binds itself to "bear all risks if the revenue from
the ticket sales, on an annualized basis, are insufficient to pay the entire prize money." This risk-bearing
provision is unusual in a lessor-lessee relationship, but inherent in a joint venture.
(b) In the event of pre-termination of the contract by the PCSO, or its suspension of operation of the on-line
lottery system in breach of the contract and through no fault of the PGMC, the PCSO binds itself "to
promptly, and in any event not later than sixty (60) days, reimburse the Lessor the amount of its total
investment cost associated with the On-Line Lottery System, including but not limited to the cost of the
Facilities, and further compensate the LESSOR for loss of expected net profit after tax, computed over the
unexpired term of the lease." If the contract were indeed one of lease, the payment of the expected profits or
rentals for the unexpired portion of the term of the contract would be enough.
(c) The PGMC cannot "directly or indirectly undertake any activity or business in competition with or adverse
to the On-Line Lottery System of PCSO unless it obtains the latter's prior written consent." If the PGMC is
engaged in the business of leasing equipment and technology for an on-line lottery system, we fail to see any
acceptable reason why it should allow a restriction on the pursuit of such business.
(d) The PGMC shall provide the PCSO the audited Annual Report sent to its stockholders, and within two
years from the effectivity of the contract, cause itself to be listed in the local stock exchange and offer at least
25% of its equity to the public. If the PGMC is merely a lessor, this imposition is unreasonable and whimsical,
and could only be tied up to the fact that the PGMC will actually operate and manage the system; hence,
increasing public participation in the corporation would enhance public interest.
(e) The PGMC shall put up an Escrow Deposit of P300,000,000.00 pursuant to the requirements of the RFP,
which it may, at its option, maintain as its initial performance bond required to ensure its faithful compliance
with the terms of the contract.
(f) The PCSO shall designate the necessary personnel to monitor and audit the daily performance of the on-
line lottery system; and promulgate procedural and coordinating rules governing all activities relating to the
on-line lottery system. The first further confirms that it is the PGMC which will operate the system and the
PCSO may, for the protection of its interest, monitor and audit the daily performance of the system. The
second admits the coordinating and cooperative powers and functions of the parties.
(g) The PCSO may validly terminate the contract if the PGMC becomes insolvent or bankrupt or is unable to
pay its debts, or if it stops or suspends or threatens to stop or suspend payment of all or a material part of its
debts.
All of the foregoing unmistakably confirm the indispensable role of the PGMC in the pursuit, operation,
conduct, and management of the On-Line Lottery System. They exhibit and demonstrate the parties'
indivisible community of interest in the conception, birth and growth of the on-line lottery, and, above all, in its
profits, with each having a right in the formulation and implementation of policies related to the business and
sharing, as well, in the losses — with the PGMC bearing the greatest burden because of its assumption of
expenses and risks, and the PCSO the least, because of its confessed unwillingness to bear expenses and
risks. In a manner of speaking, each is wed to the other for better or for worse. In the final analysis, however,
in the light of the PCSO's RFP and the above highlighted provisions, as well as the "Hold Harmless Clause"
of the Contract of Lease, it is even safe to conclude that the actual lessor in this case is the PCSO and the
subject matter thereof is its franchise to hold and conduct lotteries since it is, in reality, the PGMC which
operates and manages the on-line lottery system for a period of eight years.
We thus declare that the challenged Contract of Lease violates the exception provided for in paragraph B,
Section 1 of R.A. No. 1169, as amended by B.P. Blg. 42, and is, therefore, invalid for being contrary to law.
This conclusion renders unnecessary further discussion on the other issues raised by the petitioners.
WHEREFORE, the instant petition is hereby GRANTED and the challenged Contract of Lease executed on
17 December 1993 by respondent Philippine Charity Sweepstakes Office (PCSO) and respondent Philippine
Gaming Management Corporation (PGMC) is hereby DECLARED contrary to law and invalid.
The Temporary Restraining Order issued on 11 April 1994 is hereby MADE PERMANENT.
No pronouncement as to costs.
SO ORDERED.
Regalado, Romero and Bellosillo, JJ., concur.
Narvasa, C.J., took no part.
EN BANC
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.
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 body’s 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 Petition4 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 84366 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, 19987 -- 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, 7th Floor, Palacio del Governador, Intramuros, Manila, upon payment at the
Cash Division, Commission on Elections, in cash or cashier’s 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.) 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.)
2.) 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 o’clock 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 bidder’s first
envelope or the Eligibility Envelope should establish the bidder’s 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.
xxxxxxxxx
"29. 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 Bidder’s financial, technical and
production capabilities/resources. It will be based upon an examination of the
documentary evidence of the Bidder’s 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 Bidder’s bid, in which event the BAC will proceed to
the next lowest calculated bid to make a similar determination of that Bidder’s 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 BAC’s 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 letter14 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.
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 Court’s 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, 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.
We agree with petitioners. Our nation’s 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 Comelc 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 BAC’s 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 claimed25 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 BAC’s 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 banc’s 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 Commission’s 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 Commission’s 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 multi-billion-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
Comelec’s 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 BAC’s 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, 200328 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 Comelec’s 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 orexistence of the supposed payor.
To assure itself properly of the due existence (as well as eligibility and qualification) of the putative
consortium, Comelec’s 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 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.
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 Court’s 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 government’s
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
Comelec’s 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-Operate-Transfer 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 Comelec’s 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-in-charge 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 Comelec’s 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 referred40 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? Isn’t it
enough that there are these corporations coming together to carry out the automation project? Isn’t 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 former’s own bidding
rules and procedures contained in its RFP. Therein lies Comelec’s 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 Comelec’s 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 Comelec’s
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 Memorandum44 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-à-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 entity’s 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. Guingona46 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 latter’s approval, agrees to give WeSolv an opportunity to be present at
meetings with the COMELEC concerning WeSolv’s 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 Consortium’s 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-à-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 proponent’s 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 ACM’s 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 Comelec’s 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 MATRIX47
Technical Evaluation of Automated Counting Machine
MEGA-PACIFIC TOTAL INFORMATION

KEY REQUIREMENTS CONSORTIUM MANAGEMENT
QUESTIONS
YES NO YES NO
1. Does the machine have an accuracy rating of at least √ √

99.995 percent
At COLD environmental condition √ √
At NORMAL environmental conditions √ √
At HARSH environmental conditions
2. Accurately records and reports the date and time of the √ √

start and end of counting of ballots per precinct?
3. Prints election returns without any loss of date during √ √

generation of such reports?
4. 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
8. Data stored in external media is encrypted? √ √
Note: This
particular
requirement needs
9. Physical key or similar device allows, limits, or restricts √ √

operation of the machine?
10. CPU speed is at least 400mHz? √ √
Note: This
particular
requirement needs
11. Port to allow use of dot-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
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 Note: This
stored on the removable data storage device? particular
requirement needs
16. 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 Note: This Note: This
transmitted through an electronic transmission media? particular particular
requirement needs requirement needs
further verification further verification
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 Note: This
all the votes for all the candidates and other information, are particular
indeed zero or null? requirement needs
18. Does the system consolidate results from all precincts in √ √

the city/municipality using the data storage device coming
from the counting machine? Note: This
particular
requirement needs
19. Is the machine 100% accurate? √ √
Note: This
particular
requirement needs
20. 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
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?
Prints specified reports √ √
Audit Trail √ √
22. Can the result of the city/municipal consolidation be √ √

stored in a data storage device?
Note: This
particular
requirement needs
23. Does the system consolidate results from all precincts in √ √

the provincial/district/ national using the data storage device
from different levels of consolidation? Note: This
particular
requirement needs
24. Is the system 100% accurate? √ √
Note: This
particular
requirement needs
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
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
27. Can the results of the provincial/district/national √ √

consolidation be stored in a data storage device?
Note: This
particular
requirement needs
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 they’re 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 if 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 Comelec’s 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
group’s 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 Comelec’s
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 machine’s 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 the city/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 considers mandatory 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 shall contain 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 ponente’s 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 qualified technical expert read and analyze the source code49 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. There’s 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 Court’s 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, "That’s 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.
Comelec’s 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-DOST51 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 bidder’s 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 re-tested 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 Committee’s 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 clarity’s sake, we quote
in full the letter-certification, 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 Comelec’s 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 Comelec’s 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.53The 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 Court’s 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 Comelec’s 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 Comelec’s 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 so-called 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 supplier’s 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 nation’s future is at stake here, it should have done no less.
Epilogue
Once again, the Court finds itself at the crossroads of our nation’s 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 Comelec’s 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 AES 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, C.J., Jr., Vitug, Ynares-Santiago, JJ., see separate opinion.
Puno, J., concur, and also joins the opinion of J. Ynares-Santiago.
EN BANC
G.R. No. 148334 January 21, 2004
ARTURO M. TOLENTINO and ARTURO C. MOJICA, Petitioners,

vs.
COMMISSION ON ELECTIONS, SENATOR RALPH G. RECTO and SENATOR GREGORIO B.
HONASAN,Respondents.
DECISION
CARPIO, J.:
The Case
This is a petition for prohibition to set aside Resolution No. NBC 01-005 dated 5 June 2001 ("Resolution No.
01-005") and Resolution No. NBC 01-006 dated 20 July 2001 ("Resolution No. 01-006") of respondent
Commission on Elections ("COMELEC"). Resolution No. 01-005 proclaimed the 13 candidates elected as
Senators in the 14 May 2001 elections while Resolution No. 01-006 declared "official and final" the ranking of
the 13 Senators proclaimed in Resolution No. 01-005.
The Facts
Shortly after her succession to the Presidency in January 2001, President Gloria Macapagal-Arroyo
nominated then Senator Teofisto T. Guingona, Jr. ("Senator Guingona") as Vice-President. Congress
confirmed the nomination of Senator Guingona who took his oath as Vice-President on 9 February 2001.
Following Senator Guingona’s confirmation, the Senate on 8 February 2001 passed Resolution No. 84
("Resolution No. 84") certifying to the existence of a vacancy in the Senate. Resolution No. 84 called on
COMELEC to fill the vacancy through a special election to be held simultaneously with the regular elections
on 14 May 2001. Twelve Senators, with a 6-year term each, were due to be elected in that
election.1 Resolution No. 84 further provided that the "Senatorial candidate garnering the 13th highest
number of votes shall serve only for the unexpired term of former Senator Teofisto T. Guingona, Jr.," which
ends on 30 June 2004.2
On 5 June 2001, after COMELEC had canvassed the election results from all the provinces but one (Lanao
del Norte), COMELEC issued Resolution No. 01-005 provisionally proclaiming 13 candidates as the elected
Senators. Resolution No. 01-005 also provided that "the first twelve (12) Senators shall serve for a term of six
(6) years and the thirteenth (13th) Senator shall serve the unexpired term of three (3) years of Senator
Teofisto T. Guingona, Jr. who was appointed Vice-President."3 Respondents Ralph Recto ("Recto") and
Gregorio Honasan ("Honasan") ranked 12th and 13th, respectively, in Resolution No. 01-005.
On 20 June 2001, petitioners Arturo Tolentino and Arturo Mojica ("petitioners"), as voters and taxpayers, filed
the instant petition for prohibition, impleading only COMELEC as respondent. Petitioners sought to enjoin
COMELEC from proclaiming with finality the candidate for Senator receiving the 13th highest number of
votes as the winner in the special election for a single three-year term seat. Accordingly, petitioners prayed
for the nullification of Resolution No. 01-005 in so far as it makes a proclamation to such effect.
Petitioners contend that COMELEC issued Resolution No. 01-005 without jurisdiction because: (1) it failed to
notify the electorate of the position to be filled in the special election as required under Section 2 of Republic
Act No. 6645 ("R.A. No. 6645");4 (2) it failed to require senatorial candidates to indicate in their certificates of
candidacy whether they seek election under the special or regular elections as allegedly required under
Section 73 of Batas Pambansa Blg. 881;5 and, consequently, (3) it failed to specify in the Voters Information
Sheet the candidates seeking election under the special or regular senatorial elections as purportedly
required under Section 4, paragraph 4 of Republic Act No. 6646 ("R.A. No. 6646"). 6 Petitioners add that
because of these omissions, COMELEC canvassed all the votes cast for the senatorial candidates in the 14
May 2001 elections without distinction such that "there were no two separate Senate elections held
simultaneously but just a single election for thirteen seats, irrespective of term." 7
Stated otherwise, petitioners claim that if held simultaneously, a special and a regular election must be
distinguished in the documentation as well as in the canvassing of their results. To support their claim,
petitioners cite the special elections simultaneously held with the regular elections of 13 November 1951 and
8 November 1955 to fill the seats vacated by Senators Fernando Lopez and Carlos P. Garcia, respectively,
who became Vice-Presidents during their tenures in the Senate.8 Petitioners point out that in those elections,
COMELEC separately canvassed the votes cast for the senatorial candidates running under the regular
elections from the votes cast for the candidates running under the special elections. COMELEC also
separately proclaimed the winners in each of those elections.9
Petitioners sought the issuance of a temporary restraining order during the pendency of their petition.
Without issuing any restraining order, we required COMELEC to Comment on the petition.
On 20 July 2001, after COMELEC had canvassed the results from all the provinces, it issued Resolution No.
01-006 declaring "official and final" the ranking of the 13 Senators proclaimed in Resolution No. 01-005. The
13 Senators took their oaths of office on 23 July 2001.
In view of the issuance of Resolution No. 01-006, the Court required petitioners to file an amended petition
impleading Recto and Honasan as additional respondents. Petitioners accordingly filed an amended petition
in which they reiterated the contentions raised in their original petition and, in addition, sought the nullification
of Resolution No. 01-006.
In their Comments, COMELEC, Honasan, and Recto all claim that a special election to fill the seat vacated
by Senator Guingona was validly held on 14 May 2001. COMELEC and Honasan further raise preliminary
issues on the mootness of the petition and on petitioners’ standing to litigate. Honasan also claims that the
petition, which seeks the nullity of his proclamation as Senator, is actually a quo warranto petition and the
Court should dismiss the same for lack of jurisdiction. For his part, Recto, as the 12th ranking Senator,
contends he is not a proper party to this case because the petition only involves the validity of the
proclamation of the 13th placer in the 14 May 2001 senatorial elections.
The Issues
The following are the issues presented for resolution:
(1) Procedurally –
(a) whether the petition is in fact a petition for quo warranto over which the Senate
Electoral Tribunal is the sole judge;
(b) whether the petition is moot; and
(c) whether petitioners have standing to litigate.
(2) On the merits, whether a special election to fill a vacant three-year term Senate seat was validly
held on 14 May 2001.
The Ruling of the Court
On the Preliminary Matters
The Nature of the Petition and the Court’s Jurisdiction
A quo warranto proceeding is, among others, one to determine the right of a public officer in the exercise of
his office and to oust him from its enjoyment if his claim is not well-founded.10 Under Section 17, Article VI of
the Constitution, the Senate Electoral Tribunal is the sole judge of all contests relating to the qualifications of
the members of the Senate.
A perusal of the allegations contained in the instant petition shows, however, that what petitioners are
questioning is the validity of the special election on 14 May 2001 in which Honasan was elected. Petitioners’
various prayers are, namely: (1) a "declaration" that no special election was held simultaneously with the
general elections on 14 May 2001; (2) to enjoin COMELEC from declaring anyone as having won in the
special election; and (3) to annul Resolution Nos. 01-005 and 01-006 in so far as these Resolutions proclaim
Honasan as the winner in the special election. Petitioners anchor their prayers on COMELEC’s alleged
failure to comply with certain requirements pertaining to the conduct of that special election. Clearly then, the
petition does not seek to determine Honasan’s right in the exercise of his office as Senator. Petitioners’
prayer for the annulment of Honasan’s proclamation and, ultimately, election is merely incidental to
petitioners’ cause of action. Consequently, the Court can properly exercise jurisdiction over the instant
petition.
On the Mootness of the Petition
COMELEC contends that its proclamation on 5 June 2001 of the 13 Senators and its subsequent
confirmation on 20 July 2001 of the ranking of the 13 Senators render the instant petition to set aside
Resolutions Nos. 01-005 and 01-006 moot and academic.
Admittedly, the office of the writ of prohibition is to command a tribunal or board to desist from committing an
act threatened to be done without jurisdiction or with grave abuse of discretion amounting to lack or excess
of jurisdiction.11 Consequently, the writ will not lie to enjoin acts already done.12 However, as an exception to
the rule on mootness, courts will decide a question otherwise moot if it is capable of repetition yet evading
review.13 Thus, in Alunan III v. Mirasol,14 we took cognizance of a petition to set aside an order canceling the
general elections for the Sangguniang Kabataan ("SK") on 4 December 1992 despite that at the time the
petition was filed, the SK election had already taken place. We noted in Alunan that since the question of the
validity of the order sought to be annulled "is likely to arise in every SK elections and yet the question may
not be decided before the date of such elections," the mootness of the petition is no bar to its resolution. This
observation squarely applies to the instant case. The question of the validity of a special election to fill a
vacancy in the Senate in relation to COMELEC’s failure to comply with requirements on the conduct of such
special election is likely to arise in every such election. Such question, however, may not be decided before
the date of the election.
On Petitioners’ Standing
Honasan questions petitioners’ standing to bring the instant petition as taxpayers and voters because
petitioners do not claim that COMELEC illegally disbursed public funds. Neither do petitioners claim that they
sustained personal injury because of the issuance of Resolution Nos. 01-005 and 01-006.
"Legal standing" or locus standi refers to a personal and substantial interest in a case such that the party has
sustained or will sustain direct injury because of the challenged governmental act.15 The requirement of
standing, which necessarily "sharpens the presentation of issues,"16 relates to the constitutional mandate that
this Court settle only actual cases or controversies.17 Thus, generally, a party will be allowed to litigate only
when (1) he can show that he has personally suffered some actual or threatened injury because of the
allegedly illegal conduct of the government; (2) the injury is fairly traceable to the challenged action; and (3)
the injury is likely to be redressed by a favorable action.18
Applied strictly, the doctrine of standing to litigate will indeed bar the instant petition. In questioning, in their
capacity as voters, the validity of the special election on 14 May 2001, petitioners assert a harm classified as
a "generalized grievance." This generalized grievance is shared in substantially equal measure by a large
class of voters, if not all the voters, who voted in that election.19 Neither have petitioners alleged, in their
capacity as taxpayers, that the Court should give due course to the petition because in the special election
held on 14 May 2001 "tax money [was] ‘x x x extracted and spent in violation of specific constitutional
protections against abuses of legislative power’ or that there [was] misapplication of such funds by
COMELEC or that public money [was] deflected to any improper purpose."20
On the other hand, we have relaxed the requirement on standing and exercised our discretion to give due
course to voters’ suits involving the right of suffrage.21 Also, in the recent case of Integrated Bar of the
Philippines v. Zamora,22 we gave the same liberal treatment to a petition filed by the Integrated Bar of the
Philippines ("IBP"). The IBP questioned the validity of a Presidential directive deploying elements of the
Philippine National Police and the Philippine Marines in Metro Manila to conduct patrols even though the IBP
presented "too general an interest." We held:
[T]he IBP primarily anchors its standing on its alleged responsibility to uphold the rule of law and the
Constitution. Apart from this declaration, however, the IBP asserts no other basis in support of its locus
standi. The mere invocation by the IBP of its duty to preserve the rule of law and nothing more, while
undoubtedly true, is not sufficient to clothe it with standing in this case. This is too general an interest which
is shared by other groups and the whole citizenry x x x.
Having stated the foregoing, this Court has the discretion to take cognizance of a suit which does not satisfy
the requirement of legal standing when paramount interest is involved. In not a few cases, the court has
adopted a liberal attitude on the locus standi of a petitioner where the petitioner is able to craft an issue of
transcendental significance to the people. Thus, when the issues raised are of paramount importance to the
public, the Court may brush aside technicalities of procedure. In this case, a reading of the petition shows
that the IBP has advanced constitutional issues which deserve the attention of this Court in view of their
seriousness, novelty and weight as precedents. Moreover, because peace and order are under constant
threat and lawless violence occurs in increasing tempo, undoubtedly aggravated by the Mindanao insurgency
problem, the legal controversy raised in the petition almost certainly will not go away. It will stare us in the
face again. It, therefore, behooves the Court to relax the rules on standing and to resolve the issue now,
rather than later.23 (Emphasis supplied)
We accord the same treatment to petitioners in the instant case in their capacity as voters since they raise
important issues involving their right of suffrage, considering that the issue raised in this petition is likely to
arise again.
Whether a Special Election for a Single, Three-Year Term

Senatorial Seat was Validly Held on 14 May 2001
Under Section 9, Article VI of the Constitution, a special election may be called to fill any vacancy in the
Senate and the House of Representatives "in the manner prescribed by law," thus:
In case of vacancy in the Senate or in the House of Representatives, a special election may be called to fill
such vacancy in the manner prescribed by law, but the Senator or Member of the House of Representatives
thus elected shall serve only for the unexpired term. (Emphasis supplied)
To implement this provision of the Constitution, Congress passed R.A. No. 6645, which provides in pertinent
parts:
SECTION 1. In case a vacancy arises in the Senate at least eighteen (18) months or in the House of
Representatives at least one (1) year before the next regular election for Members of Congress, the
Commission on Elections, upon receipt of a resolution of the Senate or the House of Representatives, as the
case may be, certifying to the existence of such vacancy and calling for a special election, shall hold a
special election to fill such vacancy. If Congress is in recess, an official communication on the existence of
the vacancy and call for a special election by the President of the Senate or by the Speaker of the House of
Representatives, as the case may be, shall be sufficient for such purpose. The Senator or Member of the
House of Representatives thus elected shall serve only for the unexpired term.
SECTION 2. The Commission on Elections shall fix the date of the special election, which shall not be earlier
than forty-five (45) days nor later than ninety (90) days from the date of such resolution or
communication, stating among other things the office or offices to be voted for: Provided, however, That if
within the said period a general election is scheduled to be held, the special election shall be held
simultaneously with such general election. (Emphasis supplied)
Section 4 of Republic Act No. 7166 subsequently amended Section 2 of R.A. No. 6645, as follows:
Postponement, Failure of Election and Special Elections. – x x x In case a permanent vacancy shall occur in
the Senate or House of Representatives at least one (1) year before the expiration of the term, the
Commission shall call and hold a special election to fill the vacancy not earlier than sixty (60) days nor longer
than ninety (90) days after the occurrence of the vacancy. However, in case of such vacancy in the Senate,
the special election shall be held simultaneously with the next succeeding regular election. (Emphasis
supplied)
Thus, in case a vacancy arises in Congress at least one year before the expiration of the term, Section 2 of
R.A. No. 6645, as amended, requires COMELEC: (1) to call a special election by fixing the date of the
special election, which shall not be earlier than sixty (60) days nor later than ninety (90) after the occurrence
of the vacancy but in case of a vacancy in the Senate, the special election shall be held simultaneously with
the next succeeding regular election; and (2) to give notice to the voters of, among other things, the office or
offices to be voted for.
Did COMELEC, in conducting the special senatorial election simultaneously with the 14 May 2001 regular
elections, comply with the requirements in Section 2 of R.A. No. 6645?
A survey of COMELEC’s resolutions relating to the conduct of the 14 May 2001 elections reveals that they
contain nothing which would amount to a compliance, either strict or substantial, with the requirements in
Section 2 of R.A. No. 6645, as amended. Thus, nowhere in its resolutions24 or even in its press releases25 did
COMELEC state that it would hold a special election for a single three-year term Senate seat simultaneously
with the regular elections on 14 May 2001. Nor did COMELEC give formal notice that it would proclaim as
winner the senatorial candidate receiving the 13th highest number of votes in the special election.
The controversy thus turns on whether COMELEC’s failure, assuming it did fail, to comply with the
requirements in Section 2 of R.A. No. 6645, as amended, invalidated the conduct of the special senatorial
election on 14 May 2001 and accordingly rendered Honasan’s proclamation as the winner in that special
election void. More precisely, the question is whether the special election is invalid for lack of a "call" for such
election and for lack of notice as to the office to be filled and the manner by which the winner in the special
election is to be determined. For reasons stated below, the Court answers in the negative.
COMELEC’s Failure to Give Notice
of the Time of the Special Election Did Not
Negate the Calling of such Election
The calling of an election, that is, the giving notice of the time and place of its occurrence, whether made by
the legislature directly or by the body with the duty to give such call, is indispensable to the election’s
validity.26 In a general election, where the law fixes the date of the election, the election is valid without any
call by the body charged to administer the election.27
In a special election to fill a vacancy, the rule is that a statute that expressly provides that an election to fill a
vacancy shall be held at the next general elections fixes the date at which the special election is to be held
and operates as the call for that election. Consequently, an election held at the time thus prescribed is not
invalidated by the fact that the body charged by law with the duty of calling the election failed to do so.28 This
is because the right and duty to hold the election emanate from the statute and not from any call for the
election by some authority29 and the law thus charges voters with knowledge of the time and place of the
election.30
Conversely, where the law does not fix the time and place for holding a special election but empowers some
authority to fix the time and place after the happening of a condition precedent, the statutory provision on the
giving of notice is considered mandatory, and failure to do so will render the election a nullity. 31
In the instant case, Section 2 of R.A. No. 6645 itself provides that in case of vacancy in the Senate, the
special election to fill such vacancy shall be held simultaneously with the next succeeding regular election.
Accordingly, the special election to fill the vacancy in the Senate arising from Senator Guingona’s
appointment as Vice-President in February 2001 could not be held at any other time but must be held
simultaneously with the next succeeding regular elections on 14 May 2001. The law charges the voters with
knowledge of this statutory notice and COMELEC’s failure to give the additional notice did not negate the
calling of such special election, much less invalidate it.
Our conclusion might be different had the present case involved a special election to fill a vacancy in the
House of Representatives. In such a case, the holding of the special election is subject to a condition
precedent, that is, the vacancy should take place at least one year before the expiration of the term. The time
of the election is left to the discretion of COMELEC subject only to the limitation that it holds the special
election within the range of time provided in Section 2 of R.A. No. 6645, as amended. This makes mandatory
the requirement in Section 2 of R.A. No. 6645, as amended, for COMELEC to "call x x x a special election x x
x not earlier than 60 days nor longer than 90 days after the occurrence of the vacancy" and give notice of the
office to be filled. The COMELEC’s failure to so call and give notice will nullify any attempt to hold a special
election to fill the vacancy. Indeed, it will be well-nigh impossible for the voters in the congressional district
involved to know the time and place of the special election and the office to be filled unless the COMELEC so
notifies them.
No Proof that COMELEC’s
Failure to Give Notice of the Office

to be Filled and the Manner of
Determining the Winner in the Special
Election Misled Voters
The test in determining the validity of a special election in relation to the failure to give notice of the special
election is whether the want of notice has resulted in misleading a sufficient number of voters as would
change the result of the special election. If the lack of official notice misled a substantial number of voters
who wrongly believed that there was no special election to fill a vacancy, a choice by a small percentage of
voters would be void.32
The required notice to the voters in the 14 May 2001 special senatorial election covers two matters. First,
that COMELEC will hold a special election to fill a vacant single three-year term Senate seat simultaneously
with the regular elections scheduled on the same date. Second, that COMELEC will proclaim as winner the
senatorial candidate receiving the 13th highest number of votes in the special election. Petitioners have
neither claimed nor proved that COMELEC’s failure to give this required notice misled a sufficient number of
voters as would change the result of the special senatorial election or led them to believe that there was no
such special election.
Instead, what petitioners did is conclude that since COMELEC failed to give such notice, no special election
took place. This bare assertion carries no value. Section 2 of R.A. No. 6645, as amended, charged those
who voted in the elections of 14 May 2001 with the knowledge that the vacancy in the Senate arising from
Senator Guingona’s appointment as Vice-President in February 2001 was to be filled in the next succeeding
regular election of 14 May 2001. Similarly, the absence of formal notice from COMELEC does not preclude
the possibility that the voters had actual notice of the special election, the office to be voted in that election,
and the manner by which COMELEC would determine the winner. Such actual notice could come from many
sources, such as media reports of the enactment of R.A. No. 6645 and election propaganda during the
campaign.33
More than 10 million voters cast their votes in favor of Honasan, the party who stands most prejudiced by the
instant petition. We simply cannot disenfranchise those who voted for Honasan, in the absence of proof that
COMELEC’s omission prejudiced voters in the exercise of their right of suffrage so as to negate the holding
of the special election. Indeed, this Court is loathe to annul elections and will only do so when it is
"impossible to distinguish what votes are lawful and what are unlawful, or to arrive at any certain result
whatever, or that the great body of the voters have been prevented by violence, intimidation, and threats
from exercising their franchise."34
Otherwise, the consistent rule has been to respect the electorate’s will and let the results of the election
stand, despite irregularities that may have attended the conduct of the elections. 35 This is but to acknowledge
the purpose and role of elections in a democratic society such as ours, which is:
to give the voters a direct participation in the affairs of their government, either in determining who shall be
their public officials or in deciding some question of public interest; and for that purpose all of the legal voters
should be permitted, unhampered and unmolested, to cast their ballot. When that is done and no frauds have
been committed, the ballots should be counted and the election should not be declared null. Innocent voters
should not be deprived of their participation in the affairs of their government for mere irregularities on the
part of the election officers, for which they are in no way responsible. A different rule would make the manner
and method of performing a public duty of greater importance than the duty itself. 36 (Emphasis in the original)
Separate Documentation and Canvassing

not Required under Section 2 of R.A. No. 6645,
Neither is there basis in petitioners’ claim that the manner by which COMELEC conducted the special
senatorial election on 14 May 2001 is a nullity because COMELEC failed to document separately the
candidates and to canvass separately the votes cast for the special election. No such requirements exist in
our election laws. What is mandatory under Section 2 of R.A. No. 6645 is that COMELEC "fix the date of the
election," if necessary, and "state, among others, the office or offices to be voted for." Similarly, petitioners’
reliance on Section 73 of B.P. Blg. 881 on the filing of certificates of candidacy, and on Section 4(4) of R.A.
No. 6646 on the printing of election returns and tally sheets, to support their claim is misplaced. These
provisions govern elections in general and in no way require separate documentation of candidates or
separate canvass of votes in a jointly held regular and special elections.
Significantly, the method adopted by COMELEC in conducting the special election on 14 May 2001 merely
implemented the procedure specified by the Senate in Resolution No. 84. Initially, the original draft of
Resolution No. 84 as introduced by Senator Francisco Tatad ("Senator Tatad") made no mention of the
manner by which the seat vacated by former Senator Guingona would be filled. However, upon the
suggestion of Senator Raul Roco ("Senator Roco"), the Senate agreed to amend Resolution No. 84 by
providing, as it now appears, that "the senatorial candidate garnering the thirteenth (13th) highest number of
votes shall serve only for the unexpired term of former Senator Teofisto T. Guingona, Jr." Senator Roco
introduced the amendment to spare COMELEC and the candidates needless expenditures and the voters
further inconvenience, thus:
S[ENATOR] T[ATAD]. Mr. President, I move that we now consider Proposed Senate Resolution No. 934
[later converted to Resolution No. 84].
T[HE] P[RESIDENT]. Is there any objection? [Silence] There being none, the motion is approved.
Consideration of Proposed Senate Resolution No. 934 is now in order. With the permission of the Body, the
Secretary will read only the title and text of the resolution.
T[HE] S[ECRETARY]. Proposed Senate Resolution No. 934 entitled
RESOLUTION CERTIFYING TO THE EXISTENCE OF A VACANCY IN THE SENATE AND CALLING ON

THE COMMISSION ON ELECTIONS (COMELEC) TO FILL UP SUCH VACANCY THROUGH ELECTION
TO BE HELD SIMULTANEOUSLY WITH THE REGULAR ELECTION ON MAY 14, 2001 AND THE
SENATOR THUS ELECTED TO SERVE ONLY FOR THE UNEXPIRED TERM
WHEREAS, the Honorable Teofisto T. Guingona, Jr. was elected Senator of the Philippines in 1998 for a
term which will expire on June 30, 2004;
WHEREAS, on February 6, 2001, Her Excellency President Gloria Macapagal Arroyo nominated Senator
Guingona as Vice-President of the Philippines;
WHEREAS, the nomination of Senator Guingona has been confirmed by a majority vote of all the members
of both House of Congress, voting separately;
WHEREAS, Senator Guingona will take his Oath of Office as Vice-President of the Philippines on February
9, 2001;
WHEREAS, Republic Act No. 7166 provides that the election for twelve (12) Senators, all elective Members
of the House of Representatives, and all elective provincial city and municipal officials shall be held on the
second Monday and every three years thereafter; Now, therefore, be it
RESOLVED by the Senate, as it is hereby resolved, to certify, as it hereby certifies, the existence of a
vacancy in the Senate and calling the Commission on Elections (COMELEC) to fill up such vacancy through
election to be held simultaneously with the regular election on May 14, 2001 and the Senator thus elected to
serve only for the unexpired term.
Adopted,
(Sgd.) FRANCISCO S. TATAD

Senator
S[ENATOR] T[ATAD]. Mr. President, I move for the adoption of this resolution.
S[ENATOR] O[SMEÑA] (J). Mr. President.
T[HE] P[RESIDENT]. Sen. John H. Osmeña is recognized.
S[ENATOR] O[SMEÑA] (J). Thank you, Mr. President. Will the distinguished Majority Leader, Chairman of
the Committee on Rules, author of this resolution, yield for a few questions?
S[ENATOR] T[ATAD]. With trepidation, Mr. President. [Laughter]
S[ENATOR] O[SMEÑA] (J). What a way of flattery. [Laughter]
Mr. President, I think I recall that sometime in 1951 or 1953, there was a special election for a vacant seat in
the Senate. As a matter of fact, the one who was elected in that special election was then Congressman,
later Senator Feli[s]berto Verano.
In that election, Mr. President, the candidates contested the seat. In other words, the electorate had to cast a
vote for a ninth senator – because at that time there were only eight – to elect a member or rather, a
candidate to that particular seat.
Then I remember, Mr. President, that when we ran after the EDSA revolution, twice there were 24 candidates
and the first 12 were elected to a six-year term and the next 12 were elected to a three-year term.
My question therefore is, how is this going to be done in this election? Is the candidate with the 13th largest
number of votes going to be the one to take a three-year term? Or is there going to be an election for a
position of senator for the unexpired term of Sen. Teofisto Guingona?
S[ENATOR] T[ATAD]. Mr. President, in this resolution, we are leaving the mechanics to the Commission on
Elections. But personally, I would like to suggest that probably, the candidate obtaining the 13th largest
number of votes be declared as elected to fill up the unexpired term of Senator Guingona.
S[ENATOR] O[SMEÑA] (J). Is there a law that would allow the Comelec to conduct such an election? Is it not
the case that the vacancy is for a specific office? I am really at a loss. I am rising here because I think it is
something that we should consider. I do not know if we can… No, this is not a Concurrent Resolution.
S[ENATOR] T[ATAD]. May we solicit the legal wisdom of the Senate President.
T[HE] P[RESIDENT]. May I share this information that under Republic Act No. 6645, what is needed is a
resolution of this Chamber calling attention to the need for the holding of a special election to fill up the
vacancy created, in this particular case, by the appointment of our colleague, Senator Guingona, as Vice
President.
It can be managed in the Commission on Elections so that a slot for the particular candidate to fill up would
be that reserved for Mr. Guingona’s unexpired term. In other words, it can be arranged in such a manner.
xxxx
S[ENATOR] R[OCO]. Mr. President.
T[HE] P[RESIDENT]. Sen. Raul S. Roco is recognized.
S[ENATOR] R[OCO]. May we suggest, subject to a one-minute caucus, wordings to the effect that in the
simultaneous elections, the 13th placer be therefore deemed to be the special election for this purpose. So
we just nominate 13 and it is good for our colleagues. It is better for the candidates. It is also less expensive
because the ballot will be printed and there will be less disfranchisement.
T[HE] P[RESIDENT]. That is right.
S[ENATOR] R[OCO]. If we can just deem it therefore under this resolution to be such a special election,
maybe, we satisfy the requirement of the law.
T[HE] P[RESIDENT]. Yes. In other words, this shall be a guidance for the Comelec.
S[ENATOR] R[OCO]. Yes.
T[HE] P[RESIDENT]. – to implement.
S[ENATOR] R[OCO]. Yes. The Comelec will not have the flexibility.
T[HE] P[RESIDENT]. That is right.
S[ENATOR] R[OCO]. We will already consider the 13th placer of the forthcoming elections that will be held
simultaneously as a special election under this law as we understand it.
T[HE] P[RESIDENT]. Yes. That will be a good compromise, Senator Roco.
S[ENATOR] R[OCO]. Yes. So if the sponsor can introduce that later, maybe it will be better, Mr. President.
T[HE] P[RESIDENT]. What does the sponsor say?
S[ENATOR] T[ATAD]. Mr. President, that is a most satisfactory proposal because I do not believe that there
will be anyone running specifically –
T[HE] P[RESIDENT]. Correct.
S[ENATOR] T[ATAD]. – to fill up this position for three years and campaigning nationwide.
T[HE] P[RESIDENT]. Actually, I think what is going to happen is the 13th candidate will be running with
specific groups.
S[ENATOR] T[ATAD]. Yes. Whoever gets No. 13.
T[HE] P[RESIDENT]. I think we can specifically define that as the intent of this resolution.
S[ENATOR] T[ATAD]. Subject to style, we accept that amendment and if there will be no other amendment, I
move for the adoption of this resolution.
xxxx
ADOPTION OF S. RES. NO. 934
If there are no other proposed amendments, I move that we adopt this resolution.
T[HE] P[RESIDENT]. There is a motion to adopt this resolution. Is there any objection? [Silence] There being
none, the motion is approved.37
Evidently, COMELEC, in the exercise of its discretion to use means and methods to conduct the special
election within the confines of R.A. No. 6645, merely chose to adopt the Senate’s proposal, as embodied in
Resolution No. 84. This Court has consistently acknowledged and affirmed COMELEC’s wide latitude of
discretion in adopting means to carry out its mandate of ensuring free, orderly, and honest elections subject
only to the limitation that the means so adopted are not illegal or do not constitute grave abuse of
discretion.38 COMELEC’s decision to abandon the means it employed in the 13 November 1951 and 8
November 1955 special elections and adopt the method embodied in Resolution No. 84 is but a legitimate
exercise of its discretion. Conversely, this Court will not interfere should COMELEC, in subsequent special
senatorial elections, choose to revert to the means it followed in the 13 November 1951 and 8 November
1955 elections. That COMELEC adopts means that are novel or even disagreeable is no reason to adjudge it
liable for grave abuse of discretion. As we have earlier noted:
The Commission on Elections is a constitutional body. It is intended to play a distinct and important part in
our scheme of government.1âwphi1 In the discharge of its functions, it should not be hampered with
restrictions that would be fully warranted in the case of a less responsible organization. The Commission
may err, so may this Court also. It should be allowed considerable latitude in devising means and methods
that will insure the accomplishment of the great objective for which it was created — free, orderly and honest
elections. We may not agree fully with its choice of means, but unless these are clearly illegal or constitute
gross abuse of discretion, this court should not interfere.39
A Word to COMELEC
The calling of a special election, if necessary, and the giving of notice to the electorate of necessary
information regarding a special election, are central to an informed exercise of the right of suffrage. While the
circumstances attendant to the present case have led us to conclude that COMELEC’s failure to so call and
give notice did not invalidate the special senatorial election held on 14 May 2001, COMELEC should not take
chances in future elections. We remind COMELEC to comply strictly with all the requirements under
applicable laws relative to the conduct of regular elections in general and special elections in particular.
WHEREFORE, we DISMISS the petition for lack of merit.
SO ORDERED.
Panganiban, Quisumbing, Sandoval-Gutierrez, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr., and

Azcuna, JJ., concur.
Davide, Jr., C.J., joins Mr. Justice Puno in his dissent.
Puno, J., please see dissenting opinion.
Vitug, J., joins the dissent.
Ynares-Santiago, J., joins J. Puno’s dissent.
Tinga, J., joins Justice Puno’s dissent.
SUPREME COURT
Manila
EN BANC
G.R. No. 127685 July 23, 1998
BLAS F. OPLE, petitioner,
vs.
RUBEN D. TORRES, ALEXANDER AGUIRRE, HECTOR VILLANUEVA, CIELITO HABITO, ROBERT

BARBERS, CARMENCITA REODICA, CESAR SARINO, RENATO VALENCIA, TOMAS P. AFRICA,
HEAD OF THE NATIONAL COMPUTER CENTER and CHAIRMAN OF THE COMMISSION ON
AUDIT, respondents.
PUNO, J.:
The petition at bar is a commendable effort on the part of Senator Blas F. Ople to prevent the shrinking of the
right to privacy, which the revered Mr. Justice Brandeis considered as "the most comprehensive of rights and
the right most valued by civilized men." 1 Petitioner Ople prays that we invalidate Administrative Order
No. 308 entitled "Adoption of a National Computerized Identification Reference System" on two
important constitutional grounds, viz: one, it is a usurpation of the power of Congress to legislate,
and two, it impermissibly intrudes on our citizenry's protected zone of privacy. We grant the petition
for the rights sought to be vindicated by the petitioner need stronger barriers against further erosion.
A.O. No. 308 was issued by President Fidel V. Ramos On December 12, 1996 and reads as follows:
ADOPTION OF A NATIONAL COMPUTERIZED
IDENTIFICATION REFERENCE SYSTEM
WHEREAS, there is a need to provide Filipino citizens and foreign residents with the
facility to conveniently transact business with basic service and social security providers
and other government instrumentalities;
WHEREAS, this will require a computerized system to properly and efficiently identify
persons seeking basic services on social security and reduce, if not totally eradicate
fraudulent transactions and misrepresentations;
WHEREAS, a concerted and collaborative effort among the various basic services and
social security providing agencies and other government intrumentalities is required to
achieve such a system;
NOW, THEREFORE, I, FIDEL V. RAMOS, President of the Republic of the Philippines,

by virtue of the powers vested in me by law, do hereby direct the following:
Sec. 1. Establishment of a National Compoterized Identification Reference System. A

decentralized Identification Reference System among the key basic services and social
security providers is hereby established.
Sec. 2. Inter-Agency Coordinating Committee. An Inter-Agency Coordinating Committee

(IACC) to draw-up the implementing guidelines and oversee the implementation of the
System is hereby created, chaired by the Executive Secretary, with the following as
members:
Head, Presidential Management Staff
Secretary, National Economic Development Authority
Secretary, Department of the Interior and Local Government
Secretary, Department of Health
Administrator, Government Service Insurance System,
Administrator, Social Security System,
Administrator, National Statistics Office
Managing Director, National Computer Center.
Sec. 3. Secretariat. The National Computer Center (NCC) is hereby designated as

secretariat to the IACC and as such shall provide administrative and technical support to
the IACC.
Sec. 4. Linkage Among Agencies. The Population Reference Number (PRN) generated
by the NSO shall serve as the common reference number to establish a linkage among
concerned agencies. The IACC Secretariat shall coordinate with the different Social
Security and Services Agencies to establish the standards in the use of Biometrics
Technology and in computer application designs of their respective systems.
Sec. 5. Conduct of Information Dissemination Campaign. The Office of the Press

Secretary, in coordination with the National Statistics Office, the GSIS and SSS as lead
agencies and other concerned agencies shall undertake a massive tri-media information
dissemination campaign to educate and raise public awareness on the importance and
use of the PRN and the Social Security Identification Reference.
Sec. 6. Funding. The funds necessary for the implementation of the system shall be
sourced from the respective budgets of the concerned agencies.
Sec. 7. Submission of Regular Reports. The NSO, GSIS and SSS shall submit regular
reports to the Office of the President through the IACC, on the status of implementation
of this undertaking.
Sec. 8. Effectivity. This Administrative Order shall take effect immediately.
DONE in the City of Manila, this 12th day of December in the year of Our Lord, Nineteen
Hundred and Ninety-Six.
(SGD.) FIDEL V. RAMOS
A.O. No. 308 was published in four newspapers of general circulation on January 22, 1997 and January 23,
1997. On January 24, 1997, petitioner filed the instant petition against respondents, then Executive Secretary
Ruben Torres and the heads of the government agencies, who as members of the Inter-Agency Coordinating
Committee, are charged with the implementation of A.O. No. 308. On April 8, 1997, we issued a temporary
restraining order enjoining its implementation.
Petitioner contends:
A. THE ESTABLISNMENT OF A NATIONAL COMPUTERIZED IDENTIFICATION

REFERENCE SYSTEM REQUIRES A LEGISLATIVE ACT. THE ISSUANCE OF A.O.
NO. 308 BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES IS,
THEREFORE, AN UNCONSTITUTIONAL USURPATION OF THE LEGISLATIVE
POWERS OF THE CONGRESS OF THE REPUBLIC OF THE PHILIPPINES.
B. THE APPROPRIATION OF PUBLIC FUNDS BY THE PRESIDENT FOR THE

IMPLEMENTATION OF A.O. NO. 308 IS AN UNCONSTITUTIONAL USURPATION OF
THE EXCLUSIVE RIGHT OF CONGRESS TO APPROPRIATE PUBLIC FUNDS FOR
EXPENDITURE.
C. THE IMPLEMENTATION OF A.O. NO. 308 INSIDIOUSLY LAYS THE
GROUNDWORK FOR A SYSTEM WHICH WILL VIOLATE THE BILL OF RIGHTS
ENSHRINED IN THE CONSTITUTION. 2
Respondents counter-argue:
A. THE INSTANT PETITION IS NOT A JUSTICIABLE CASE AS WOULD WARRANT A

JUDICIAL REVIEW;
B. A.O. NO. 308 [1996] WAS ISSUED WITHIN THE EXECUTIVE AND
ADMINISTRATIVE POWERS OF THE PRESIDENT WITHOUT ENCROACHING ON
THE LEGISLATIVE POWERS OF CONGRESS;
C. THE FUNDS NECESSARY FOR THE IMPLEMENTATION OF THE IDENTIFICATION

REFERENCE SYSTEM MAY BE SOURCED FROM THE BUDGETS OF THE
CONCERNED AGENCIES;
D. A.O. NO. 308 [1996] PROTECTS AN INDIVIDUAL'S INTEREST IN PRIVACY. 3
We now resolve.
As is usual in constitutional litigation, respondents raise the threshold issues relating to the standing to sue of
the petitioner and the justiciability of the case at bar. More specifically, respondents aver that petitioner has
no legal interest to uphold and that the implementing rules of A.O. No. 308 have yet to be promulgated.
These submissions do not deserve our sympathetic ear. Petitioner Ople is a distinguished member of our
Senate. As a Senator, petitioner is possessed of the requisite standing to bring suit raising the issue that the
issuance of A.O. No. 308 is a usurpation of legislative power. 4 As taxpayer and member of the Government
Service Insurance System (GSIS), petitioner can also impugn the legality of the misalignment of public funds
and the misuse of GSIS funds to implement A.O. No. 308. 5
The ripeness for adjudication of the Petition at bar is not affected by the fact that the implementing rules of
A.O. No. 308 have yet to be promulgated. Petitioner Ople assails A.O. No. 308 as invalid per se and as
infirmed on its face. His action is not premature for the rules yet to be promulgated cannot cure its fatal
defects. Moreover, the respondents themselves have started the implementation of A.O. No. 308 without
waiting for the rules. As early as January 19, 1997, respondent Social Security System (SSS) caused the
publication of a notice to bid for the manufacture of the National Identification (ID) card. 6 Respondent
Executive Secretary Torres has publicly announced that representatives from the GSIS and the SSS have
completed the guidelines for the national identification system. 7 All signals from the respondents show their
unswerving will to implement A.O. No. 308 and we need not wait for the formality of the rules to pass
judgment on its constitutionality. In this light, the dissenters insistence that we tighten the rule on standing is
not a commendable stance as its result would be to throttle an important constitutional principle and a
fundamental right.
II
We now come to the core issues. Petitioner claims that A.O. No. 308 is not a mere administrative order but a
law and hence, beyond the power of the President to issue. He alleges that A.O. No. 308 establishes a
system of identification that is all-encompassing in scope, affects the life and liberty of every Filipino citizen
and foreign resident, and more particularly, violates their right to privacy.
Petitioner's sedulous concern for the Executive not to trespass on the lawmaking domain of Congress is
understandable. The blurring of the demarcation line between the power of the Legislature to make laws and
the power of the Executive to execute laws will disturb their delicate balance of power and cannot be
allowed. Hence, the exercise by one branch of government of power belonging to another will be given a
stricter scrutiny by this Court.
The line that delineates Legislative and Executive power is not indistinct. Legislative power is "the authority,
under the Constitution, to make laws, and to alter and repeal them." 8 The Constitution, as the will of the
people in their original, sovereign and unlimited capacity, has vested this power in the Congress of the
Philippines. 9 The grant of legislative power to Congress is broad, general and comprehensive. 10 The
legislative body possesses plenary power for all purposes of civil government. 11 Any power, deemed to be
legislative by usage and tradition, is necessarily possessed by Congress, unless the Constitution has lodged
it elsewhere. 12 In fine, except as limited by the Constitution, either expressly or impliedly, legislative power
embraces all subjects and extends to matters of general concern or common interest. 13
While Congress is vested with the power to enact laws, the President executes the laws. 14 The executive
power is vested in the Presidents. 15 It is generally defined as the power to enforce and administer the
laws. 16 It is the power of carrying the laws into practical operation and enforcing their due observance. 17
As head of the Executive Department, the President is the Chief Executive. He represents the government
as a whole and sees to it that all laws are enforced by the officials and employees of his department. 18 He
has control over the executive department, bureaus and offices. This means that he has the authority to
assume directly the functions of the executive department, bureau and office or interfere with the discretion
of its officials.19 Corollary to the power of control, the President also has the duty of supervising the
enforcement of laws for the maintenance of general peace and public order. Thus, he is granted
administrative power over bureaus and offices under his control to enable him to discharge his duties
effectively. 20
Administrative power is concerned with the work of applying policies and enforcing orders as determined by
proper governmental organs. 21 It enables the President to fix a uniform standard of administrative efficiency
and check the official conduct of his agents. 22 To this end, he can issue administrative orders, rules and
regulations.
Prescinding from these precepts, we hold that A.O. No. 308 involves a subject that is not appropriate to be
covered by an administrative order. An administrative order is:
Sec. 3. Administrative Orders. — Acts of the President which relate to particular aspects
of governmental operation in pursuance of his duties as administrative head shall be
promulgated in administrative orders. 23
An administrative order is an ordinance issued by the President which relates to specific aspects in
the administrative operation of government. It must be in harmony with the law and should be for
the sole purpose of implementing the law and carrying out the legislative policy. 24 We reject the
argument that A.O. No. 308 implements the legislative policy of the Administrative Code of 1987.
The Code is a general law and "incorporates in a unified document the major structural, functional
and procedural principles of governance." 25 and "embodies changes in administrative structure
and procedures designed to serve the
people." 26 The Code is divided into seven (7) Books: Book I deals with Sovereignty and General
Administration, Book II with the Distribution of Powers of the three branches of Government, Book
III on the Office of the President, Book IV on the Executive Branch, Book V on Constitutional
Commissions, Book VI on National Government Budgeting, and Book VII on Administrative
Procedure. These Books contain provisions on the organization, powers and general
administration of the executive, legislative and judicial branches of government, the organization
and administration of departments, bureaus and offices under the executive branch, the
organization and functions of the Constitutional Commissions and other constitutional bodies, the
rules on the national government budget, as well as guideline for the exercise by administrative
agencies of quasi-legislative and quasi-judicial powers. The Code covers both the internal
administration of government, i.e, internal organization, personnel and recruitment, supervision and
discipline, and the effects of the functions performed by administrative officials on private
individuals or parties outside government. 27
It cannot be simplistically argued that A.O. No. 308 merely implements the Administrative Code of 1987. It
establishes for the first time a National Computerized Identification Reference System. Such a System
requires a delicate adjustment of various contending state policies — the primacy of national security, the
extent of privacy interest against dossier-gathering by government, the choice of policies, etc. Indeed, the
dissent of Mr. Justice Mendoza states that the A.O. No. 308 involves the all-important freedom of thought. As
said administrative order redefines the parameters of some basic rights of our citizenry vis-a-vis the State as
well as the line that separates the administrative power of the President to make rules and the legislative
power of Congress, it ought to be evident that it deals with a subject that should be covered by law.
Nor is it correct to argue as the dissenters do that A.D. No. 308 is not a law because it confers no right,
imposes no duty, affords no proctection, and creates no office. Under A.O. No. 308, a citizen cannot transact
business with government agencies delivering basic services to the people without the contemplated
identification card. No citizen will refuse to get this identification card for no one can avoid dealing with
government. It is thus clear as daylight that without the ID, a citizen will have difficulty exercising his rights
and enjoying his privileges. Given this reality, the contention that A.O. No. 308 gives no right and imposes no
duty cannot stand.
Again, with due respect, the dissenting opinions unduly expand the limits of administrative legislation and
consequently erodes the plenary power of Congress to make laws. This is contrary to the established
approach defining the traditional limits of administrative legislation. As well stated by Fisher: ". . . Many
regulations however, bear directly on the public. It is here that administrative legislation must he restricted in
its scope and application. Regulations are not supposed to be a substitute for the general policy-making that
Congress enacts in the form of a public law. Although administrative regulations are entitled to respect, the
authority to prescribe rules and regulations is not an independent source of power to make laws." 28
III
Assuming, arguendo, that A.O. No. 308 need not be the subject of a law, still it cannot pass constitutional
muster as an administrative legislation because facially it violates the right to privacy. The essence of privacy
is the "right to be let alone." 29 In the 1965 case of Griswold v. Connecticut, 30 the United States Supreme
Court gave more substance to the right of privacy when it ruled that the right has a constitutional foundation.
It held that there is a right of privacy which can be found within the penumbras of the First, Third, Fourth,
Fifth and Ninth Amendments, 31 viz:
Specific guarantees in the Bill of Rights have penumbras formed by emanations from
these guarantees that help give them life and substance . . . various guarantees create
zones of privacy. The right of association contained in the penumbra of the First
Amendment is one, as we have seen. The Third Amendment in its prohibition against the
quartering of soldiers "in any house" in time of peace without the consent of the owner is
another facet of that privacy. The Fourth Amendment explicitly affirms the ''right of the
people to be secure in their persons, houses and effects, against unreasonable searches
and seizures." The Fifth Amendment in its Self-Incrimination Clause enables the citizen
to create a zone of privacy which government may not force him to surrender to his
detriment. The Ninth Amendment provides: "The enumeration in the Constitution, of
certain rights, shall not be construed to deny or disparage others retained by the people."
In the 1968 case of Morfe v. Mutuc, 32 we adopted the Griswold ruling that there is a constitutional
right to privacy. Speaking thru Mr. Justice, later Chief Justice, Enrique Fernando, we held:
xxx xxx xxx
The Griswold case invalidated a Connecticut statute which made the use of
contraceptives a criminal offence on the ground of its amounting to an unconstitutional
invasion of the right of privacy of married persons; rightfully it stressed "a relationship
lying within the zone of privacy created by several fundamental constitutional
guarantees." It has wider implications though. The constitutional right to privacy has
come into its own.
So it is likewise in our jurisdiction. The right to privacy as such is accorded recognition

independently of its identification with liberty; in itself, it is fully deserving of constitutional
protection. The language of Prof. Emerson is particularly apt: "The concept of limited
government has always included the idea that governmental powers stop short of certain
intrusions into the personal life of the citizen. This is indeed one of the basic distinctions
between absolute and limited government. Ultimate and pervasive control of the
individual, in all aspects of his life, is the hallmark of the absolute state. In contrast, a
system of limited government safeguards a private sector, which belongs to the
individual, firmly distinguishing it from the public sector, which the state can control.
Protection of this private sector — protection, in other words, of the dignity and integrity
of the individual — has become increasingly important as modern society has developed.
All the forces of a technological age — industrialization, urbanization, and organization —
operate to narrow the area of privacy and facilitate intrusion into it. In modern terms, the
capacity to maintain and support this enclave of private life marks the difference between
a democratic and a totalitarian society."
Indeed, if we extend our judicial gaze we will find that the right of privacy is recognized and enshrined in
several provisions of our Constitution. 33 It is expressly recognized in section 3 (1) of the Bill of Rights:
Sec. 3. (1) The privacy of communication and correspondence shall be inviolable except
upon lawful order of the court, or when public safety or order requires otherwise as
prescribed by law.
Other facets of the right to privacy are protectad in various provisions of the Bill of Rights, viz: 34
Sec. 1. No person shall be deprived of life, liberty, or property without due process of law,
nor shall any person be denied the equal protection of the laws.
Sec. 2. The right of the people to be secure in their persons, houses papers, and effects
against unreasonable searches and seizures of whatever nature and for any purpose
shall be inviolable, and no search warrant or warrant of arrest shall issue except upon
probable cause to be determined personally by the judge after examination under oath or
affirmation of the complainant and the witnesses he may produce, and particularly
describing the place to be searched and the persons or things to be seized.
xxx xxx xxx
Sec. 6. The liberty of abode and of changing the same within the limits prescribed by law
shall not be impaired except upon lawful order of the court. Neither shall the right to
travel be impaired except in the interest of national security, public safety, or public
health as may be provided by law.
xxx xxx xxx
Sec. 8. The right of the people, including those employed in the public and private
sectors, to form unions, associations, or societies for purposes not contrary to law shall
not be abridged.
Sec. 17. No person shall be compelled to be a witness against himself.
Zones of privacy are likewise recognized and protected in our laws. The Civil Code provides that "[e]very
person shall respect the dignity, personality, privacy and peace of mind of his neighbors and other persons"
and punishes as actionable torts several acts by a person of meddling and prying into the privacy of
another. 35 It also holds a public officer or employee or any private individual liable for damages for any
violation of the rights and liberties of another person, 36 and recognizes the privacy of letters and other
private communications. 37 The Revised Penal Code makes a crime the violation of secrets by an
officer, 38the revelation of trade and industrial secrets, 39 and trespass to dwelling. 40 Invasion of privacy is an
offense in special laws like the Anti-Wiretapping Law, 41 the Secrecy of Bank Deposits Act 42 and the
Intellectual Property Code. 43 The Rules of Court on privileged communication likewise recognize the privacy
of certain information. 44
Unlike the dissenters, we prescind from the premise that the right to privacy is a fundamental right
guaranteed by the Constitution, hence, it is the burden of government to show that A.O. No. 308 is justified
by some compelling state interest and that it is narrowly drawn. A.O. No. 308 is predicated on two
considerations: (1) the need to provides our citizens and foreigners with the facility to conveniently transact
business with basic service and social security providers and other government instrumentalities and (2) the
need to reduce, if not totally eradicate, fraudulent transactions and misrepresentations by persons seeking
basic services. It is debatable whether these interests are compelling enough to warrant the issuance of A.O.
No. 308. But what is not arguable is the broadness, the vagueness, the overbreadth of A.O. No. 308 which if
implemented will put our people's right to privacy in clear and present danger.
The heart of A.O. No. 308 lies in its Section 4 which provides for a Population Reference Number (PRN) as a
"common reference number to establish a linkage among concerned agencies" through the use of
"Biometrics Technology" and "computer application designs."
Biometry or biometrics is "the science of the applicatin of statistical methods to biological facts; a
mathematical analysis of biological data." 45 The term "biometrics" has evolved into a broad category of
technologies which provide precise confirmation of an individual's identity through the use of the individual's
own physiological and behavioral characteristics. 46 A physiological characteristic is a relatively stable
physical characteristic such as a fingerprint, retinal scan, hand geometry or facial features. A behavioral
characteristic is influenced by the individual's personality and includes voice print, signature and
keystroke. 47 Most biometric idenfication systems use a card or personal identificatin number (PIN) for initial
identification. The biometric measurement is used to verify that the individual holding the card or entering the
PIN is the legitimate owner of the card or PIN. 48
A most common form of biological encoding is finger-scanning where technology scans a fingertip and turns
the unique pattern therein into an individual number which is called a biocrypt. The biocrypt is stored in
computer data banks 49 and becomes a means of identifying an individual using a service. This technology
requires one's fingertip to be scanned every time service or access is provided. 50 Another method is the
retinal scan. Retinal scan technology employs optical technology to map the capillary pattern of the retina of
the eye. This technology produces a unique print similar to a finger print. 51 Another biometric method is
known as the "artificial nose." This device chemically analyzes the unique combination of substances
excreted from the skin of people. 52 The latest on the list of biometric achievements is the thermogram.
Scientists have found that by taking pictures of a face using infra-red cameras, a unique heat distribution
pattern is seen. The different densities of bone, skin, fat and blood vessels all contribute to the individual's
personal "heat signature." 53
In the last few decades, technology has progressed at a galloping rate. Some science fictions are now
science facts. Today, biometrics is no longer limited to the use of fingerprint to identify an individual. It is a
new science that uses various technologies in encoding any and all biological characteristics of an individual
for identification. It is noteworthy that A.O. No. 308 does not state what specific biological characteristics and
what particular biometrics technology shall be used to identify people who will seek its coverage. Considering
the banquest of options available to the implementors of A.O. No. 308, the fear that it threatens the right to
privacy of our people is not groundless.
A.O. No. 308 should also raise our antennas for a further look will show that it does not state whether
encoding of data is limited to biological information alone for identification purposes. In fact, the Solicitor
General claims that the adoption of the Identification Reference System will contribute to the "generation of
population data for development planning." 54 This is an admission that the PRN will not be used solely for
identification but the generation of other data with remote relation to the avowed purposes of A.O. No. 308.
Clearly, the indefiniteness of A.O. No. 308 can give the government the roving authority to store and retrieve
information for a purpose other than the identification of the individual through his PRN.
The potential for misuse of the data to be gathered under A.O. No. 308 cannot be undarplayed as the
dissenters do. Pursuant to said administrative order, an individual must present his PRN everytime he deals
with a government agency to avail of basic services and security. His transactions with the government
agency will necessarily be recorded — whether it be in the computer or in the documentary file of the
agency. The individual's file may include his transactions for loan availments, income tax returns, statement
of assets and liabilities, reimbursements for medication, hospitalization, etc. The more frequent the use of the
PRN, the better the chance of building a huge formidable informatin base through the electronic linkage of
the files. 55 The data may be gathered for gainful and useful government purposes; but the existence of this
vast reservoir of personal information constitutes a covert invitation to misuse, a temptation that may be too
great for some of our authorities to resist. 56
We can even grant, arguendo, that the computer data file will be limited to the name, address and other
basic personal infomation about the individual. 57 Even that hospitable assumption will not save A.O. No. 308
from constitutional infirmity for again said order does not tell us in clear and categorical terms how these
information gathered shall he handled. It does not provide who shall control and access the data, under what
circumstances and for what purpose. These factors are essential to safeguard the privacy and guaranty the
integrity of the information. 58 Well to note, the computer linkage gives other government agencies access to
the information. Yet, there are no controls to guard against leakage of information. When the access code of
the control programs of the particular computer system is broken, an intruder, without fear of sanction or
penalty, can make use of the data for whatever purpose, or worse, manipulate the data stored within the
system. 59
It is plain and we hold that A.O. No. 308 falls short of assuring that personal information which will be
gathered about our people will only be processed for unequivocally specified purposes. 60 The lack of proper
safeguards in this regard of A.O. No. 308 may interfere with the individual's liberty of abode and travel by
enabling authorities to track down his movement; it may also enable unscrupulous persons to access
confidential information and circumvent the right against self-incrimination; it may pave the way for "fishing
expeditions" by government authorities and evade the right against unreasonable searches and
seizures. 61 The possibilities of abuse and misuse of the PRN, biometrics and computer technology are
accentuated when we consider that the individual lacks control over what can be read or placed on his ID,
much less verify the correctness of the data encoded. 62 They threaten the very abuses that the Bill of Rights
seeks to prevent. 63
The ability of sophisticated data center to generate a comprehensive cradle-to-grave dossier on an individual
and transmit it over a national network is one of the most graphic threats of the computer revolution. 64 The
computer is capable of producing a comprehensive dossier on individuals out of information given at different
times and for varied purposes. 65 It can continue adding to the stored data and keeping the information up to
date. Retrieval of stored date is simple. When information of a privileged character finds its way into the
computer, it can be extracted together with other data on the subject. 66Once extracted, the information is
putty in the hands of any person. The end of privacy begins.
Though A.O. No. 308 is undoubtedly not narrowly drawn, the dissenting opinions would dismiss its danger to
the right to privacy as speculative and hypothetical. Again, we cannot countenance such a laidback posture.
The Court will not be true to its role as the ultimate guardian of the people's liberty if it would not immediately
smother the sparks that endanger their rights but would rather wait for the fire that could consume them.
We reject the argument of the Solicitor General that an individual has a reasonable expectation of privacy
with regard to the Natioal ID and the use of biometrics technology as it stands on quicksand. The
reasonableness of a person's expectation of privacy depends on a two-part test: (1) whether by his conduct,
the individual has exhibited an expectation of privacy; and (2) whether this expectation is one that society
recognizes as reasonable. 67 The factual circumstances of the case determines the reasonableness of the
expectation. 68 However, other factors, such as customs, physical surroundings and practices of a particular
activity, may serve to create or diminish this expectation. 69 The use of biometrics and computer technology
in A.O. No. 308 does not assure the individual of a reasonable expectation of privacy. 70 As technology
advances, the level of reasonably expected privacy decreases. 71 The measure of protection granted by the
reasonable expectation diminishes as relevant technology becomes more widely accepted. 72 The security of
the computer data file depends not only on the physical inaccessibility of the file but also on the advances in
hardware and software computer technology. A.O. No. 308 is so widely drawn that a minimum standard for a
reasonable expectation of privacy, regardless of technology used, cannot be inferred from its provisions.
The rules and regulations to be by the IACC cannot remedy this fatal defect. Rules and regulations merely
implement the policy of the law or order. On its face, A.O. No. gives the IACC virtually infettered discretion to
determine the metes and bounds of the ID System.
Nor do your present laws prvide adequate safeguards for a reasonable expectation of privacy.
Commonwealth Act. No. 591 penalizes the disclosure by any person of data furnished by the individual to the
NSO with imprisonment and fine. 73 Republic Act. No. 1161 prohibits public disclosure of SSS employment
records and reports. 74 These laws, however, apply to records and data with the NSO and the SSS. It is not
clear whether they may be applied to data with the other government agencies forming part of the National
ID System. The need to clarify the penal aspect of A.O. No. 308 is another reason why its enactment should
be given to Congress.
Next, the Solicitor General urges us to validate A.O. No. 308's abridgment of the right of privacy by using the
rational relationship test. 75 He stressed that the purposes of A.O. No. 308 are: (1) to streamline and speed
up the implementation of basic government services, (2) eradicate fraud by avoiding duplication of services,
and (3) generate population data for development planning. He cocludes that these purposes justify the
incursions into the right to privacy for the means are rationally related to the end. 76
We are not impressed by the argument. In Morfe v. Mutuc, 77 we upheld the constitutionality of R.A. 3019, the
Anti-Graft and Corrupt Practices Act, as a valid police power measure. We declared that the law, in
compelling a public officer to make an annual report disclosing his assets and liabilities, his sources of
income and expenses, did not infringe on the individual's right to privacy. The law was enacted to promote
morality in public administration by curtailing and minimizing the opportunities for official corruption and
maintaining a standard of honesty in the public service. 78
The same circumstances do not obtain in the case at bar. For one, R.A. 3019 is a statute, not an
administrative order. Secondly, R.A. 3019 itself is sufficiently detailed. The law is clear on what practices
were prohibited and penalized, and it was narrowly drawn to avoid abuses. IN the case at bar, A.O. No. 308
may have been impelled by a worthy purpose, but, it cannot pass constitutional scrutiny for it is not narrowly
drawn. And we now hod that when the integrity of a fundamental right is at stake, this court will give the
challenged law, administrative order, rule or regulation a stricter scrutiny. It will not do for the authorities to
invoke the presumption of regularity in the performance of official duties. Nor is it enough for the authorities
to prove that their act is not irrational for a basic right can be diminished, if not defeated, even when the
government does not act irrationally. They must satisfactorily show the presence of compelling state interests
and that the law, rule or regulation is narrowly drawn to preclude abuses. This approach is demanded by the
1987 Constitution whose entire matrix is designed to protect human rights and to prevent authoritarianism. In
case of doubt, the least we can do is to lean towards the stance that will not put in danger the rights
protected by the Constitutions.
The case of Whalen v. Roe 79 cited by the Solicitor General is also off-line. In Whalen, the United States
Supreme Court was presented with the question of whether the State of New York could keep a centralized
computer record of the names and addresses of all persons who obtained certain drugs pursuant to a
doctor's prescription. The New York State Controlled Substance Act of 1972 required physicians to identify
parties obtaining prescription drugs enumerated in the statute, i.e., drugs with a recognized medical use but
with a potential for abuse, so that the names and addresses of the patients can be recorded in a centralized
computer file of the State Department of Health. The plaintiffs, who were patients and doctors, claimed that
some people might decline necessary medication because of their fear that the computerized data may be
readily available and open to public disclosure; and that once disclosed, it may stigmatize them as drug
addicts. 80 The plaintiffs alleged that the statute invaded a constitutionally protected zone of privacy, i.e., the
individual interest in avoiding disclosure of personal matters, and the interest in independence in making
certain kinds of important decisions. The U.S. Supreme Court held that while an individual's interest in
avoiding disclosuer of personal matter is an aspect of the right to privacy, the statute did not pose a grievous
threat to establish a constitutional violation. The Court found that the statute was necessary to aid in the
enforcement of laws designed to minimize the misuse of dangerous drugs. The patient-identification
requirement was a product of an orderly and rational legislative decision made upon recommmendation by a
specially appointed commission which held extensive hearings on the matter. Moreover, the statute was
narrowly drawn and contained numerous safeguards against indiscriminate disclosure. The statute laid down
the procedure and requirements for the gathering, storage and retrieval of the informatin. It ebumerated who
were authorized to access the data. It also prohibited public disclosure of the data by imposing penalties for
its violation. In view of these safeguards, the infringement of the patients' right to privacy was justified by a
valid exercise of police power. As we discussed above, A.O. No. 308 lacks these vital safeguards.
Even while we strike down A.O. No. 308, we spell out in neon that the Court is not per se agains the use of
computers to accumulate, store, process, retvieve and transmit data to improve our bureaucracy. Computers
work wonders to achieve the efficiency which both government and private industry seek. Many information
system in different countries make use of the computer to facilitate important social objective, such as better
law enforcement, faster delivery of public services, more efficient management of credit and insurance
programs, improvement of telecommunications and streamlining of financial activities. 81 Used wisely, data
stored in the computer could help good administration by making accurate and comprehensive information
for those who have to frame policy and make key decisions. 82 The benefits of the computer has
revolutionized information technology. It developed the internet, 83 introduced the concept of
cyberspace 84 and the information superhighway where the individual, armed only with his personal
computer, may surf and search all kinds and classes of information from libraries and databases connected
to the net.
In no uncertain terms, we also underscore that the right to privacy does not bar all incursions into individual
privacy. The right is not intended to stifle scientific and technological advancements that enhance public
service and the common good. It merely requires that the law be narrowly focused 85 and a compelling
interest justify such intrusions. 86 Intrusions into the right must be accompanied by proper safeguards and
well-defined standards to prevent unconstitutional invasions. We reiterate that any law or order that invades
individual privacy will be subjected by this Court to strict scrutiny. The reason for this stance was laid down
in Morfe v. Mutuc, to wit:
The concept of limited government has always included the idea that governmental
powers stop short of certain intrusions into the personal life of the citizen. This is indeed
one of the basic disctinctions between absolute and limited government. Ultimate and
pervasive control of the individual, in all aspects of his life, is the hallmark of the absolute
state. In contrast, a system of limited government safeguards a private sector, which
belongs to the individual, firmly distinguishing it from the public sector, which the state
can control. Protection of this private sector — protection, in other words, of the dignity
and integrity of the individual — has become increasingly important as modern society
has developed. All the forces of a technological age — industrialization, urbanization,
and organization — operate to narrow the area of privacy and facilitate intrusion into it. In
modern terms, the capacity to maintain and support this enclave of private life marks the
difference between a democratic and a totalitarian society. 87
IV
The right to privacy is one of the most threatened rights of man living in a mass society. The threats emanate
from various sources — governments, journalists, employers, social scientists, etc. 88 In th case at bar, the
threat comes from the executive branch of government which by issuing A.O. No. 308 pressures the people
to surrender their privacy by giving information about themselves on the pretext that it will facilitate delivery of
basic services. Given the record-keeping power of the computer, only the indifferent fail to perceive the
danger that A.O. No. 308 gives the government the power to compile a devastating dossier against
unsuspecting citizens. It is timely to take note of the well-worded warning of Kalvin, Jr., "the disturbing result
could be that everyone will live burdened by an unerasable record of his past and his limitations. In a way,
the threat is that because of its record-keeping, the society will have lost its benign capacity to
forget." 89 Oblivious to this counsel, the dissents still say we should not be too quick in labelling the right to
privacy as a fundamental right. We close with the statement that the right to privacy was not engraved in our
Constitution for flattery.
IN VIEW WHEREOF, the petition is granted and Adminisrative Order No. 308 entitled "Adoption of a National
Computerized Identification Reference System" declared null and void for being unconstitutional.
SO ORDERED.
Bellosillo and Martinez, JJ., concur.

Narvasa, C.J., I join Justices Kapunan and Mendoza in their dissents.
Regalado, J., In the result.
Davide, Jr., In the result and I join Mr. Justice Panganiban in his separate opinion.
Romero, J., Please see separate opinion.
Melo, J., I join the dissents of Justices Kapunan and Mendoza.
Vitug, J., See separate opinion.
Kapunan, J., See dissenting opinion.
Mendoza, J., Please see dissenting opinion.
Panganiban, J., Please see Separate Opinion.
Quisumbing, J., I join in dissenting opinion of JJ. Mendoza and Kapunan.
Purisima, J., I join in Justice Mendoza's dissenting.
SUPREME COURT
Manila
EN BANC
G.R. No. L-45685 November 16, 1937
THE PEOPLE OF THE PHILIPPINE ISLANDS and HONGKONG & SHANGHAI BANKING
CORPORATION,petitioners,
vs.
JOSE O. VERA, Judge . of the Court of First Instance of Manila, and MARIANO CU
UNJIENG, respondents.
Office of the Solicitor General Tuason and City Fiscal Diaz for the Government.
De Witt, Perkins and Ponce Enrile for the Hongkong and Shanghai Banking Corporation.
Vicente J. Francisco, Feria and La O, Orense and Belmonte, and Gibbs and McDonough for respondent Cu
Unjieng.
No appearance for respondent Judge.
LAUREL, J.:
This is an original action instituted in this court on August 19, 1937, for the issuance of the writ
of certiorari and of prohibition to the Court of First Instance of Manila so that this court may review the
actuations of the aforesaid Court of First Instance in criminal case No. 42649 entitled "The People of the
Philippine Islands vs. Mariano Cu Unjieng, et al.", more particularly the application of the defendant Mariano
Cu Unjieng therein for probation under the provisions of Act No. 4221, and thereafter prohibit the said Court
of First Instance from taking any further action or entertaining further the aforementioned application for
probation, to the end that the defendant Mariano Cu Unjieng may be forthwith committed to prison in
accordance with the final judgment of conviction rendered by this court in said case (G. R. No. 41200). 1
Petitioners herein, the People of the Philippine and the Hongkong and Shanghai Banking Corporation, are
respectively the plaintiff and the offended party, and the respondent herein Mariano Cu Unjieng is one of the
defendants, in the criminal case entitled "The People of the Philippine Islands vs. Mariano Cu Unjieng, et al.",
criminal case No. 42649 of the Court of First Instance of Manila and G.R. No. 41200 of this court.
Respondent herein, Hon. Jose O. Vera, is the Judge ad interim of the seventh branch of the Court of First
Instance of Manila, who heard the application of the defendant Mariano Cu Unjieng for probation in the
aforesaid criminal case.
The information in the aforesaid criminal case was filed with the Court of First Instance of Manila on October
15, 1931, petitioner herein Hongkong and Shanghai Banking Corporation intervening in the case as private
prosecutor. After a protracted trial unparalleled in the annals of Philippine jurisprudence both in the length of
time spent by the court as well as in the volume in the testimony and the bulk of the exhibits presented, the
Court of First Instance of Manila, on January 8, 1934, rendered a judgment of conviction sentencing the
defendant Mariano Cu Unjieng to indeterminate penalty ranging from four years and two months of prision
correccional to eight years of prision mayor, to pay the costs and with reservation of civil action to the
offended party, the Hongkong and Shanghai Banking Corporation. Upon appeal, the court, on March 26,
1935, modified the sentence to an indeterminate penalty of from five years and six months of prision
correccional to seven years, six months and twenty-seven days of prision mayor, but affirmed the judgment
in all other respects. Mariano Cu Unjieng filed a motion for reconsideration and four successive motions for
new trial which were denied on December 17, 1935, and final judgment was accordingly entered on
December 18, 1935. The defendant thereupon sought to have the case elevated on certiorari to the Supreme
Court of the United States but the latter denied the petition for certiorari in November, 1936. This
court, on November 24, 1936, denied the petition subsequently filed by the defendant for leave to file
a second alternative motion for reconsideration or new trial and thereafter remanded the case to the court of
origin for execution of the judgment.
The instant proceedings have to do with the application for probation filed by the herein respondent Mariano
Cu Unjieng on November 27, 1936, before the trial court, under the provisions of Act No. 4221 of the
defunct Philippine Legislature. Herein respondent Mariano Cu Unjieng states in his petition, inter alia, that he
is innocent of the crime of which he was convicted, that he has no criminal record and that he would observe
good conduct in the future. The Court of First Instance of Manila, Judge Pedro Tuason presiding, referred the
application for probation of the Insular Probation Office which recommended denial of the same June 18,
1937. Thereafter, the Court of First Instance of Manila, seventh branch, Judge Jose O. Vera presiding, set
the petition for hearing on April 5, 1937.
On April 2, 1937, the Fiscal of the City of Manila filed an opposition to the granting of probation to the herein
respondent Mariano Cu Unjieng. The private prosecution also filed an opposition on April 5, 1937, alleging,
among other things, that Act No. 4221, assuming that it has not been repealed by section 2 of Article XV of
the Constitution, is nevertheless violative of section 1, subsection (1), Article III of the Constitution
guaranteeing equal protection of the laws for the reason that its applicability is not uniform throughout the
Islands and because section 11 of the said Act endows the provincial boards with the power to make said
law effective or otherwise in their respective or otherwise in their respective provinces. The private
prosecution also filed a supplementary opposition on April 19, 1937, elaborating on the alleged
unconstitutionality on Act No. 4221, as an undue delegation of legislative power to the provincial boards of
several provinces (sec. 1, Art. VI, Constitution). The City Fiscal concurred in the opposition of the private
prosecution except with respect to the questions raised concerning the constitutionality of Act No. 4221.
On June 28, 1937, herein respondent Judge Jose O. Vera promulgated a resolution with a finding that "las
pruebas no han establecido de unamanera concluyente la culpabilidad del peticionario y que todos los
hechos probados no son inconsistentes o incongrentes con su inocencia" and concludes that the herein
respondent Mariano Cu Unjieng "es inocente por duda racional" of the crime of which he stands convicted by
this court in G.R. No. 41200, but denying the latter's petition for probation for the reason that:
. . . Si este Juzgado concediera la poblacion solicitada por las circunstancias y la historia social
que se han expuesto en el cuerpo de esta resolucion, que hacen al peticionario acreedor de la
misma, una parte de la opinion publica, atizada por los recelos y las suspicacias, podria levantarse
indignada contra un sistema de probacion que permite atisbar en los procedimientos ordinarios de
una causa criminal perturbando la quietud y la eficacia de las decisiones ya recaidas al traer a la
superficie conclusiones enteramente differentes, en menoscabo del interes publico que demanda
el respeto de las leyes y del veredicto judicial.
On July 3, 1937, counsel for the herein respondent Mariano Cu Unjieng filed an exception to the resolution
denying probation and a notice of intention to file a motion for reconsideration. An alternative motion for
reconsideration or new trial was filed by counsel on July 13, 1937. This was supplemented by an additional
motion for reconsideration submitted on July 14, 1937. The aforesaid motions were set for hearing on July
31, 1937, but said hearing was postponed at the petition of counsel for the respondent Mariano Cu Unjieng
because a motion for leave to intervene in the case as amici curiae signed by thirty-three (thirty-four)
attorneys had just been filed with the trial court. Attorney Eulalio Chaves whose signature appears in the
aforesaid motion subsequently filed a petition for leave to withdraw his appearance as amicus curiae on the
ground that the motion for leave to intervene as amici curiae was circulated at a banquet given by counsel for
Mariano Cu Unjieng on the evening of July 30, 1937, and that he signed the same "without mature
deliberation and purely as a matter of courtesy to the person who invited me (him)."
On August 6, 1937, the Fiscal of the City of Manila filed a motion with the trial court for the issuance of an
order of execution of the judgment of this court in said case and forthwith to commit the herein respondent
Mariano Cu Unjieng to jail in obedience to said judgment.
On August 7, 1937, the private prosecution filed its opposition to the motion for leave to intervene as amici
curiae aforementioned, asking that a date be set for a hearing of the same and that, at all events, said motion
should be denied with respect to certain attorneys signing the same who were members of the legal staff of
the several counsel for Mariano Cu Unjieng. On August 10, 1937, herein respondent Judge Jose O. Vera
issued an order requiring all parties including the movants for intervention as amici curiae to appear before
the court on August 14, 1937. On the last-mentioned date, the Fiscal of the City of Manila moved for the
hearing of his motion for execution of judgment in preference to the motion for leave to intervene as amici
curiae but, upon objection of counsel for Mariano Cu Unjieng, he moved for the postponement of the hearing
of both motions. The respondent judge thereupon set the hearing of the motion for execution on August 21,
1937, but proceeded to consider the motion for leave to intervene as amici curiae as in order. Evidence as to
the circumstances under which said motion for leave to intervene as amici curiae was signed and submitted
to court was to have been heard on August 19, 1937. But at this juncture, herein petitioners came to this
court on extraordinary legal process to put an end to what they alleged was an interminable proceeding in
the Court of First Instance of Manila which fostered "the campaign of the defendant Mariano Cu Unjieng for
delay in the execution of the sentence imposed by this Honorable Court on him, exposing the courts to
criticism and ridicule because of the apparent inability of the judicial machinery to make effective a final
judgment of this court imposed on the defendant Mariano Cu Unjieng."
The scheduled hearing before the trial court was accordingly suspended upon the issuance of a temporary
restraining order by this court on August 21, 1937.
To support their petition for the issuance of the extraordinary writs of certiorari and prohibition, herein
petitioners allege that the respondent judge has acted without jurisdiction or in excess of his jurisdiction:
I. Because said respondent judge lacks the power to place respondent Mariano Cu Unjieng under probation
for the following reason:
(1) Under section 11 of Act No. 4221, the said of the Philippine Legislature is made to
apply only to the provinces of the Philippines; it nowhere states that it is to be made
applicable to chartered cities like the City of Manila.
(2) While section 37 of the Administrative Code contains a proviso to the effect that in the
absence of a special provision, the term "province" may be construed to include the City
of Manila for the purpose of giving effect to laws of general application, it is also true that
Act No. 4221 is not a law of general application because it is made to apply only to those
provinces in which the respective provincial boards shall have provided for the salary of a
probation officer.
(3) Even if the City of Manila were considered to be a province, still, Act No. 4221 would
not be applicable to it because it has provided for the salary of a probation officer as
required by section 11 thereof; it being immaterial that there is an Insular Probation
Officer willing to act for the City of Manila, said Probation Officer provided for in section
10 of Act No. 4221 being different and distinct from the Probation Officer provided for in
section 11 of the same Act.
II. Because even if the respondent judge originally had jurisdiction to entertain the application for probation of
the respondent Mariano Cu Unjieng, he nevertheless acted without jurisdiction or in excess thereof in
continuing to entertain the motion for reconsideration and by failing to commit Mariano Cu Unjieng to prison
after he had promulgated his resolution of June 28, 1937, denying Mariano Cu Unjieng's application for
probation, for the reason that:
(1) His jurisdiction and power in probation proceedings is limited by Act No. 4221 to the
granting or denying of applications for probation.
(2) After he had issued the order denying Mariano Cu Unjieng's petition for probation on
June 28, 1937, it became final and executory at the moment of its rendition.
(3) No right on appeal exists in such cases.
(4) The respondent judge lacks the power to grant a rehearing of said order or to modify
or change the same.
III. Because the respondent judge made a finding that Mariano Cu Unjieng is innocent of the crime for which
he was convicted by final judgment of this court, which finding is not only presumptuous but without
foundation in fact and in law, and is furthermore in contempt of this court and a violation of the respondent's
oath of office as ad interim judge of first instance.
IV. Because the respondent judge has violated and continues to violate his duty, which became imperative
when he issued his order of June 28, 1937, denying the application for probation, to commit his co-
respondent to jail.
Petitioners also avers that they have no other plain, speedy and adequate remedy in the ordinary course of
law.
In a supplementary petition filed on September 9, 1937, the petitioner Hongkong and Shanghai Banking
Corporation further contends that Act No. 4221 of the Philippine Legislature providing for a system of
probation for persons eighteen years of age or over who are convicted of crime, is unconstitutional because it
is violative of section 1, subsection (1), Article III, of the Constitution of the Philippines guaranteeing equal
protection of the laws because it confers upon the provincial board of its province the absolute discretion to
make said law operative or otherwise in their respective provinces, because it constitutes an unlawful and
improper delegation to the provincial boards of the several provinces of the legislative power lodged by the
Jones Law (section 8) in the Philippine Legislature and by the Constitution (section 1, Art. VI) in the National
Assembly; and for the further reason that it gives the provincial boards, in contravention of the Constitution
(section 2, Art. VIII) and the Jones Law (section 28), the authority to enlarge the powers of the Court of First
Instance of different provinces without uniformity. In another supplementary petition dated September 14,
1937, the Fiscal of the City of Manila, in behalf of one of the petitioners, the People of the Philippine Islands,
concurs for the first time with the issues raised by other petitioner regarding the constitutionality of Act No.
4221, and on the oral argument held on October 6, 1937, further elaborated on the theory that probation is a
form of reprieve and therefore Act. No. 4221 is an encroachment on the exclusive power of the Chief
Executive to grant pardons and reprieves. On October 7, 1937, the City Fiscal filed two memorandums in
which he contended that Act No. 4221 not only encroaches upon the pardoning power to the executive, but
also constitute an unwarranted delegation of legislative power and a denial of the equal protection of the
laws. On October 9, 1937, two memorandums, signed jointly by the City Fiscal and the Solicitor-General,
acting in behalf of the People of the Philippine Islands, and by counsel for the petitioner, the Hongkong and
Shanghai Banking Corporation, one sustaining the power of the state to impugn the validity of its own laws
and the other contending that Act No. 4221 constitutes an unwarranted delegation of legislative power, were
presented. Another joint memorandum was filed by the same persons on the same day, October 9, 1937,
alleging that Act No. 4221 is unconstitutional because it denies the equal protection of the laws and
constitutes an unlawful delegation of legislative power and, further, that the whole Act is void: that the
Commonwealth is not estopped from questioning the validity of its laws; that the private prosecution may
intervene in probation proceedings and may attack the probation law as unconstitutional; and that this court
may pass upon the constitutional question in prohibition proceedings.
Respondents in their answer dated August 31, 1937, as well as in their oral argument and memorandums,
challenge each and every one of the foregoing proposition raised by the petitioners.
As special defenses, respondents allege:
(1) That the present petition does not state facts sufficient in law to warrant the issuance
of the writ of certiorari or of prohibition.
(2) That the aforesaid petition is premature because the remedy sought by the petitioners
is the very same remedy prayed for by them before the trial court and was still pending
resolution before the trial court when the present petition was filed with this court.
(3) That the petitioners having themselves raised the question as to the execution of
judgment before the trial court, said trial court has acquired exclusive jurisdiction to
resolve the same under the theory that its resolution denying probation is unappealable.
(4) That upon the hypothesis that this court has concurrent jurisdiction with the Court of
First Instance to decide the question as to whether or not the execution will lie, this court
nevertheless cannot exercise said jurisdiction while the Court of First Instance has
assumed jurisdiction over the same upon motion of herein petitioners themselves.
(5) That upon the procedure followed by the herein petitioners in seeking to deprive the
trial court of its jurisdiction over the case and elevate the proceedings to this court,
should not be tolerated because it impairs the authority and dignity of the trial court which
court while sitting in the probation cases is "a court of limited jurisdiction but of great
dignity."
(6) That under the supposition that this court has jurisdiction to resolve the question
submitted to and pending resolution by the trial court, the present action would not lie
because the resolution of the trial court denying probation is appealable; for although the
Probation Law does not specifically provide that an applicant for probation may appeal
from a resolution of the Court of First Instance denying probation, still it is a general rule
in this jurisdiction that a final order, resolution or decision of an inferior court is
appealable to the superior court.
(7) That the resolution of the trial court denying probation of herein respondent Mariano
Cu Unjieng being appealable, the same had not become final and executory for the
reason that the said respondent had filed an alternative motion for reconsideration and
new trial within the requisite period of fifteen days, which motion the trial court was able
to resolve in view of the restraining order improvidently and erroneously issued by this
court.lawphi1.net
(8) That the Fiscal of the City of Manila had by implication admitted that the resolution of
the trial court denying probation is not final and unappealable when he presented his
answer to the motion for reconsideration and agreed to the postponement of the hearing
of the said motion.
(9) That under the supposition that the order of the trial court denying probation is not
appealable, it is incumbent upon the accused to file an action for the issuance of the writ
of certiorari with mandamus, it appearing that the trial court, although it believed that the
accused was entitled to probation, nevertheless denied probation for fear of criticism
because the accused is a rich man; and that, before a petition for certiorari grounded on
an irregular exercise of jurisdiction by the trial court could lie, it is incumbent upon the
petitioner to file a motion for reconsideration specifying the error committed so that the
trial court could have an opportunity to correct or cure the same.
(10) That on hypothesis that the resolution of this court is not appealable, the trial court
retains its jurisdiction within a reasonable time to correct or modify it in accordance with
law and justice; that this power to alter or modify an order or resolution is inherent in the
courts and may be exercise either motu proprio or upon petition of the proper party, the
petition in the latter case taking the form of a motion for reconsideration.
(11) That on the hypothesis that the resolution of the trial court is appealable as
respondent allege, said court cannot order execution of the same while it is on appeal,
for then the appeal would not be availing because the doors of probation will be closed
from the moment the accused commences to serve his sentence (Act No. 4221, sec. 1;
U.S. vs. Cook, 19 Fed. [2d], 827).
In their memorandums filed on October 23, 1937, counsel for the respondents maintain that Act No. 4221 is
constitutional because, contrary to the allegations of the petitioners, it does not constitute an undue
delegation of legislative power, does not infringe the equal protection clause of the Constitution, and does not
encroach upon the pardoning power of the Executive. In an additional memorandum filed on the same date,
counsel for the respondents reiterate the view that section 11 of Act No. 4221 is free from constitutional
objections and contend, in addition, that the private prosecution may not intervene in probation proceedings,
much less question the validity of Act No. 4221; that both the City Fiscal and the Solicitor-General are
estopped from questioning the validity of the Act; that the validity of Act cannot be attacked for the first time
before this court; that probation in unavailable; and that, in any event, section 11 of the Act No. 4221 is
separable from the rest of the Act. The last memorandum for the respondent Mariano Cu Unjieng was denied
for having been filed out of time but was admitted by resolution of this court and filed anew on
November 5, 1937. This memorandum elaborates on some of the points raised by the respondents and
refutes those brought up by the petitioners.
In the scrutiny of the pleadings and examination of the various aspects of the present case, we noted that the
court below, in passing upon the merits of the application of the respondent Mariano Cu Unjieng and in
denying said application assumed the task not only of considering the merits of the application, but of
passing upon the culpability of the applicant, notwithstanding the final pronouncement of guilt by this court.
(G.R. No. 41200.) Probation implies guilt be final judgment. While a probation case may look into the
circumstances attending the commission of the offense, this does not authorize it to reverse the findings and
conclusive of this court, either directly or indirectly, especially wherefrom its own admission reliance was
merely had on the printed briefs, averments, and pleadings of the parties. As already observed by this court
in Shioji vs. Harvey ([1922], 43 Phil., 333, 337), and reiterated in subsequent cases, "if each and every Court
of First Instance could enjoy the privilege of overruling decisions of the Supreme Court, there would be no
end to litigation, and judicial chaos would result." A becoming modesty of inferior courts demands conscious
realization of the position that they occupy in the interrelation and operation of the intergrated judicial system
of the nation.
After threshing carefully the multifarious issues raised by both counsel for the petitioners and the
respondents, this court prefers to cut the Gordian knot and take up at once the two fundamental questions
presented, namely, (1) whether or not the constitutionality of Act No. 4221 has been properly raised in these
proceedings; and (2) in the affirmative, whether or not said Act is constitutional. Considerations of these
issues will involve a discussion of certain incidental questions raised by the parties.
To arrive at a correct conclusion on the first question, resort to certain guiding principles is necessary. It is a
well-settled rule that the constitutionality of an act of the legislature will not be determined by the courts
unless that question is properly raised and presented inappropriate cases and is necessary to a
determination of the case; i.e., the issue of constitutionality must be the very lis mota presented. (McGirr vs.
Hamilton and Abreu [1915], 30 Phil., 563, 568; 6 R. C. L., pp. 76, 77; 12 C. J., pp. 780-782, 783.)
The question of the constitutionality of an act of the legislature is frequently raised in ordinary actions.
Nevertheless, resort may be made to extraordinary legal remedies, particularly where the remedies in the
ordinary course of law even if available, are not plain, speedy and adequate. Thus, in Cu Unjieng vs.
Patstone ([1922]), 42 Phil., 818), this court held that the question of the constitutionality of a statute may be
raised by the petitioner in mandamus proceedings (see, also, 12 C. J., p. 783); and in Government of the
Philippine Islands vs. Springer ([1927], 50 Phil., 259 [affirmed in Springer vs. Government of the Philippine
Islands (1928), 277 U. S., 189; 72 Law. ed., 845]), this court declared an act of the legislature
unconstitutional in an action of quo warranto brought in the name of the Government of the Philippines. It has
also been held that the constitutionality of a statute may be questioned in habeas corpus proceedings (12 C.
J., p. 783; Bailey on Habeas Corpus, Vol. I, pp. 97, 117), although there are authorities to the contrary; on an
application for injunction to restrain action under the challenged statute (mandatory, see Cruz vs. Youngberg
[1931], 56 Phil., 234); and even on an application for preliminary injunction where the determination of the
constitutional question is necessary to a decision of the case. (12 C. J., p. 783.) The same may be said as
regards prohibition and certiorari.(Yu Cong Eng vs. Trinidad [1925], 47 Phil., 385; [1926], 271 U. S., 500; 70
Law. ed., 1059; Bell vs. First Judicial District Court [1905], 28 Nev., 280; 81 Pac., 875; 113 A. S. R., 854; 6
Ann. Cas., 982; 1 L. R. A. [N. S], 843, and cases cited). The case of Yu Cong Eng vs. Trinidad, supra,
decided by this court twelve years ago was, like the present one, an original action for certiorari and
prohibition. The constitutionality of Act No. 2972, popularly known as the Chinese Bookkeeping Law, was
there challenged by the petitioners, and the constitutional issue was not met squarely by the respondent in a
demurrer. A point was raised "relating to the propriety of the constitutional question being decided in original
proceedings in prohibition." This court decided to take up the constitutional question and, with two justices
dissenting, held that Act No. 2972 was constitutional. The case was elevated on writ of certiorari to the
Supreme Court of the United States which reversed the judgment of this court and held that the Act was
invalid. (271 U. S., 500; 70 Law. ed., 1059.) On the question of jurisdiction, however, the Federal Supreme
Court, though its Chief Justice, said:
By the Code of Civil Procedure of the Philippine Islands, section 516, the Philippine supreme court
is granted concurrent jurisdiction in prohibition with courts of first instance over inferior tribunals or
persons, and original jurisdiction over courts of first instance, when such courts are exercising
functions without or in excess of their jurisdiction. It has been held by that court that the question of
the validity of the criminal statute must usually be raised by a defendant in the trial court and be
carried regularly in review to the Supreme Court. (Cadwallader-Gibson Lumber Co. vs. Del
Rosario, 26 Phil., 192). But in this case where a new act seriously affected numerous persons and
extensive property rights, and was likely to cause a multiplicity of actions, the Supreme Court
exercised its discretion to bring the issue to the act's validity promptly before it and decide in the
interest of the orderly administration of justice. The court relied by analogy upon the cases of Ex
parte Young (209 U. S., 123;52 Law ed., 714; 13 L. R. A. [N. S.] 932; 28 Sup. Ct. Rep., 441; 14
Ann. Ca., 764; Traux vs. Raich, 239 U. S., 33; 60 Law. ed., 131; L. R. A. 1916D, 545; 36 Sup. Ct.
Rep., 7; Ann. Cas., 1917B, 283; and Wilson vs. New, 243 U. S., 332; 61 Law. ed., 755; L. R. A.
1917E, 938; 37 Sup. Ct. Rep., 298; Ann. Cas. 1918A, 1024). Although objection to the jurisdiction
was raise by demurrer to the petition, this is now disclaimed on behalf of the respondents, and both
parties ask a decision on the merits. In view of the broad powers in prohibition granted to that court
under the Island Code, we acquiesce in the desire of the parties.
The writ of prohibition is an extraordinary judicial writ issuing out of a court of superior jurisdiction and
directed to an inferior court, for the purpose of preventing the inferior tribunal from usurping a jurisdiction with
which it is not legally vested. (High, Extraordinary Legal Remedies, p. 705.) The general rule, although there
is a conflict in the cases, is that the merit of prohibition will not lie whether the inferior court has jurisdiction
independent of the statute the constitutionality of which is questioned, because in such cases the interior
court having jurisdiction may itself determine the constitutionality of the statute, and its decision may be
subject to review, and consequently the complainant in such cases ordinarily has adequate remedy by
appeal without resort to the writ of prohibition. But where the inferior court or tribunal derives its jurisdiction
exclusively from an unconstitutional statute, it may be prevented by the writ of prohibition from enforcing that
statute. (50 C. J., 670; Ex parte Round tree [1874, 51 Ala., 42; In re Macfarland, 30 App. [D. C.], 365; Curtis
vs. Cornish [1912], 109 Me., 384; 84 A., 799; Pennington vs. Woolfolk [1880], 79 Ky., 13; State vs. Godfrey
[1903], 54 W. Va., 54; 46 S. E., 185; Arnold vs. Shields [1837], 5 Dana, 19; 30 Am. Dec., 669.)
Courts of First Instance sitting in probation proceedings derived their jurisdiction solely from Act No. 4221
which prescribes in detailed manner the procedure for granting probation to accused persons after their
conviction has become final and before they have served their sentence. It is true that at common law the
authority of the courts to suspend temporarily the execution of the sentence is recognized and, according to
a number of state courts, including those of Massachusetts, Michigan, New York, and Ohio, the power is
inherent in the courts (Commonwealth vs. Dowdican's Bail [1874], 115 Mass., 133; People vs. Stickel [1909],
156 Mich., 557; 121 N. W., 497; People ex rel. Forsyth vs. Court of Session [1894], 141 N. Y., 288; Weber
vs. State [1898], 58 Ohio St., 616). But, in the leading case of Ex parte United States ([1916], 242 U. S., 27;
61 Law. ed., 129; L. R. A., 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas. 1917B, 355), the Supreme Court of
the United States expressed the opinion that under the common law the power of the court was limited to
temporary suspension, and brushed aside the contention as to inherent judicial power saying, through Chief
Justice White:
Indisputably under our constitutional system the right to try offenses against the criminal laws and
upon conviction to impose the punishment provided by law is judicial, and it is equally to be
conceded that, in exerting the powers vested in them on such subject, courts inherently possess
ample right to exercise reasonable, that is, judicial, discretion to enable them to wisely exert their
authority. But these concessions afford no ground for the contention as to power here made, since
it must rest upon the proposition that the power to enforce begets inherently a discretion to
permanently refuse to do so. And the effect of the proposition urged upon the distribution of powers
made by the Constitution will become apparent when it is observed that indisputable also is it that
the authority to define and fix the punishment for crime is legislative and includes the right in
advance to bring within judicial discretion, for the purpose of executing the statute, elements of
consideration which would be otherwise beyond the scope of judicial authority, and that the right to
relieve from the punishment, fixed by law and ascertained according to the methods by it provided
belongs to the executive department.
Justice Carson, in his illuminating concurring opinion in the case of Director of Prisons vs. Judge of First
Instance of Cavite (29 Phil., 265), decided by this court in 1915, also reached the conclusion that the power
to suspend the execution of sentences pronounced in criminal cases is not inherent in the judicial function.
"All are agreed", he said, "that in the absence of statutory authority, it does not lie within the power of the
courts to grant such suspensions." (at p. 278.) Both petitioner and respondents are correct, therefore, when
they argue that a Court of First Instance sitting in probation proceedings is a court of limited jurisdiction. Its
jurisdiction in such proceedings is conferred exclusively by Act No. 4221 of the Philippine Legislature.
It is, of course, true that the constitutionality of a statute will not be considered on application for prohibition
where the question has not been properly brought to the attention of the court by objection of some kind (Hill
vs. Tarver [1901], 130 Ala., 592; 30 S., 499; State ex rel. Kelly vs. Kirby [1914], 260 Mo., 120; 168 S. W.,
746). In the case at bar, it is unquestionable that the constitutional issue has been squarely presented not
only before this court by the petitioners but also before the trial court by the private prosecution. The
respondent, Hon. Jose O Vera, however, acting as judge of the court below, declined to pass upon the
question on the ground that the private prosecutor, not being a party whose rights are affected by the statute,
may not raise said question. The respondent judge cited Cooley on Constitutional Limitations (Vol. I, p. 339;
12 C. J., sec. 177, pp. 760 and 762), and McGlue vs. Essex County ([1916], 225 Mass., 59; 113 N. E., 742,
743), as authority for the proposition that a court will not consider any attack made on the constitutionality of
a statute by one who has no interest in defeating it because his rights are not affected by its operation. The
respondent judge further stated that it may not motu proprio take up the constitutional question and, agreeing
with Cooley that "the power to declare a legislative enactment void is one which the judge, conscious of the
fallibility of the human judgment, will shrink from exercising in any case where he can conscientiously and
with due regard to duty and official oath decline the responsibility" (Constitutional Limitations, 8th ed., Vol. I,
p. 332), proceeded on the assumption that Act No. 4221 is constitutional. While therefore, the court a
quo admits that the constitutional question was raised before it, it refused to consider the question solely
because it was not raised by a proper party. Respondents herein reiterates this view. The argument is
advanced that the private prosecution has no personality to appear in the hearing of the application for
probation of defendant Mariano Cu Unjieng in criminal case No. 42648 of the Court of First Instance of
Manila, and hence the issue of constitutionality was not properly raised in the lower court. Although, as a
general rule, only those who are parties to a suit may question the constitutionality of a statute involved in a
judicial decision, it has been held that since the decree pronounced by a court without jurisdiction is void,
where the jurisdiction of the court depends on the validity of the statute in question, the issue of the
constitutionality will be considered on its being brought to the attention of the court by persons interested in
the effect to be given the statute.(12 C. J., sec. 184, p. 766.) And, even if we were to concede that the issue
was not properly raised in the court below by the proper party, it does not follow that the issue may not be
here raised in an original action of certiorari and prohibitions. It is true that, as a general rule, the question of
constitutionality must be raised at the earliest opportunity, so that if not raised by the pleadings, ordinarily it
may not be raised at the trial, and if not raised in the trial court, it will not considered on appeal. (12 C. J., p.
786. See, also, Cadwallader-Gibson Lumber Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state
that the general rule admits of exceptions. Courts, in the exercise of sounds discretion, may determine the
time when a question affecting the constitutionality of a statute should be presented. (In re Woolsey [1884],
95 N. Y., 135, 144.) Thus, in criminal cases, although there is a very sharp conflict of authorities, it is said
that the question may be raised for the first time at any stage of the proceedings, either in the trial court or on
appeal. (12 C. J., p. 786.) Even in civil cases, it has been held that it is the duty of a court to pass on the
constitutional question, though raised for the first time on appeal, if it appears that a determination of the
question is necessary to a decision of the case. (McCabe's Adm'x vs. Maysville & B. S. R. Co., [1910], 136
ky., 674; 124 S. W., 892; Lohmeyer vs. St. Louis Cordage Co. [1908], 214 Mo., 685; 113 S. W. 1108;
Carmody vs. St. Louis Transit Co., [1905], 188 Mo., 572; 87 S. W., 913.) And it has been held that a
constitutional question will be considered by an appellate court at any time, where it involves the jurisdiction
of the court below (State vs. Burke [1911], 175 Ala., 561; 57 S., 870.) As to the power of this court to
consider the constitutional question raised for the first time before this court in these proceedings, we turn
again and point with emphasis to the case of Yu Cong Eng vs. Trinidad, supra. And on the hypotheses that
the Hongkong & Shanghai Banking Corporation, represented by the private prosecution, is not the proper
party to raise the constitutional question here — a point we do not now have to decide — we are of the
opinion that the People of the Philippines, represented by the Solicitor-General and the Fiscal of the City of
Manila, is such a proper party in the present proceedings. The unchallenged rule is that the person who
impugns the validity of a statute must have a personal and substantial interest in the case such that he has
sustained, or will sustained, direct injury as a result of its enforcement. It goes without saying that if Act No.
4221 really violates the constitution, the People of the Philippines, in whose name the present action is
brought, has a substantial interest in having it set aside. Of grater import than the damage caused by the
illegal expenditure of public funds is the mortal wound inflicted upon the fundamental law by the enforcement
of an invalid statute. Hence, the well-settled rule that the state can challenge the validity of its own laws. In
Government of the Philippine Islands vs. Springer ([1927]), 50 Phil., 259 (affirmed in Springer vs.
Government of the Philippine Islands [1928], 277 U.S., 189; 72 Law. ed., 845), this court declared an act of
the legislature unconstitutional in an action instituted in behalf of the Government of the Philippines. In
Attorney General vs. Perkins ([1889], 73 Mich., 303, 311, 312; 41 N. W. 426, 428, 429), the State of
Michigan, through its Attorney General, instituted quo warranto proceedings to test the right of the
respondents to renew a mining corporation, alleging that the statute under which the respondents base their
right was unconstitutional because it impaired the obligation of contracts. The capacity of the chief law officer
of the state to question the constitutionality of the statute was though, as a general rule, only those who are
parties to a suit may question the constitutionality of a statute involved in a judicial decision, it has been held
that since the decree pronounced by a court without jurisdiction in void, where the jurisdiction of the court
depends on the validity of the statute in question, the issue of constitutionality will be considered on its being
brought to the attention of the court by persons interested in the effect to begin the statute. (12 C.J., sec.
184, p. 766.) And, even if we were to concede that the issue was not properly raised in the court below by
the proper party, it does not follow that the issue may not be here raised in an original action of certiorari and
prohibition. It is true that, as a general rule, the question of constitutionality must be raised at the earliest
opportunity, so that if not raised by the pleadings, ordinarily it may not be raised a the trial, and if not raised in
the trial court, it will not be considered on appeal. (12 C.J., p. 786. See, also, Cadwallader-Gibson Lumber
Co. vs. Del Rosario, 26 Phil., 192, 193-195.) But we must state that the general rule admits of exceptions.
Courts, in the exercise of sound discretion, may determine the time when a question affecting the
constitutionality of a statute should be presented. (In re Woolsey [19884], 95 N.Y., 135, 144.) Thus, in
criminal cases, although there is a very sharp conflict of authorities, it is said that the question may be raised
for the first time at any state of the proceedings, either in the trial court or on appeal. (12 C.J., p. 786.) Even
in civil cases, it has been held that it is the duty of a court to pass on the constitutional question, though
raised for first time on appeal, if it appears that a determination of the question is necessary to a decision of
the case. (McCabe's Adm'x vs. Maysville & B. S. R. Co. [1910], 136 Ky., 674; 124 S. W., 892; Lohmeyer vs.
St. Louis, Cordage Co. [1908], 214 Mo. 685; 113 S. W., 1108; Carmody vs. St. Louis Transit Co. [1905], 188
Mo., 572; 87 S. W., 913.) And it has been held that a constitutional question will be considered by an
appellate court at any time, where it involves the jurisdiction of the court below (State vs. Burke [1911], 175
Ala., 561; 57 S., 870.) As to the power of this court to consider the constitutional question raised for the first
time before this court in these proceedings, we turn again and point with emphasis to the case of Yu Cong
Eng. vs. Trinidad, supra. And on the hypothesis that the Hongkong & Shanghai Banking Corporation,
represented by the private prosecution, is not the proper party to raise the constitutional question here — a
point we do not now have to decide — we are of the opinion that the People of the Philippines, represented
by the Solicitor-General and the Fiscal of the City of Manila, is such a proper party in the present
proceedings. The unchallenged rule is that the person who impugns the validity of a statute must have a
personal and substantial interest in the case such that he has sustained, or will sustain, direct injury as a
result of its enforcement. It goes without saying that if Act No. 4221 really violates the Constitution, the
People of the Philippines, in whose name the present action is brought, has a substantial interest in having it
set aside. Of greater import than the damage caused by the illegal expenditure of public funds is the mortal
wound inflicted upon the fundamental law by the enforcement of an invalid statute. Hence, the well-settled
rule that the state can challenge the validity of its own laws. In Government of the Philippine Islands vs.
Springer ([1927]), 50 Phil., 259 (affirmed in Springer vs. Government of the Philippine Islands [1928], 277
U.S., 189; 72 Law. ed., 845), this court declared an act of the legislature unconstitutional in an action
instituted in behalf of the Government of the Philippines. In Attorney General vs. Perkings([1889], 73 Mich.,
303, 311, 312; 41 N.W., 426, 428, 429), the State of Michigan, through its Attorney General, instituted quo
warranto proceedings to test the right of the respondents to renew a mining corporation, alleging that the
statute under which the respondents base their right was unconstitutional because it impaired the obligation
of contracts. The capacity of the chief law officer of the state to question the constitutionality of the statute
was itself questioned. Said the Supreme Court of Michigan, through Champlin, J.:
. . . The idea seems to be that the people are estopped from questioning the validity of a law
enacted by their representatives; that to an accusation by the people of Michigan of usurpation
their government, a statute enacted by the people of Michigan is an adequate answer. The last
proposition is true, but, if the statute relied on in justification is unconstitutional, it is statute only in
form, and lacks the force of law, and is of no more saving effect to justify action under it than if it
had never been enacted. The constitution is the supreme law, and to its behests the courts, the
legislature, and the people must bow . . . The legislature and the respondents are not the only
parties in interest upon such constitutional questions. As was remarked by Mr. Justice Story, in
speaking of an acquiescence by a party affected by an unconstitutional act of the legislature: "The
people have a deep and vested interest in maintaining all the constitutional limitations upon the
exercise of legislative powers." (Allen vs. Mckeen, 1 Sum., 314.)
In State vs. Doane ([1916], 98 Kan., 435; 158 Pac., 38, 40), an original action (mandamus) was brought by
the Attorney-General of Kansas to test the constitutionality of a statute of the state. In disposing of the
question whether or not the state may bring the action, the Supreme Court of Kansas said:
. . . the state is a proper party — indeed, the proper party — to bring this action. The state is
always interested where the integrity of its Constitution or statutes is involved.
"It has an interest in seeing that the will of the Legislature is not disregarded,
and need not, as an individual plaintiff must, show grounds of fearing more
specific injury. (State vs. Kansas City 60 Kan., 518 [57 Pac., 118])." (State vs.
Lawrence, 80 Kan., 707; 103 Pac., 839.)
Where the constitutionality of a statute is in doubt the state's law officer, its Attorney-General, or
county attorney, may exercise his bet judgment as to what sort of action he will bring to have the
matter determined, either by quo warranto to challenge its validity (State vs. Johnson, 61 Kan.,
803; 60 Pac., 1068; 49 L.R.A., 662), by mandamus to compel obedience to its terms (State vs.
Dolley, 82 Kan., 533; 108 Pac., 846), or by injunction to restrain proceedings under its questionable
provisions (State ex rel. vs. City of Neodesha, 3 Kan. App., 319; 45 Pac., 122).
Other courts have reached the same conclusion (See State vs. St. Louis S. W. Ry. Co. [1917], 197 S. W.,
1006; State vs. S.H. Kress & Co. [1934], 155 S., 823; State vs. Walmsley [1935], 181 La., 597; 160 S., 91;
State vs. Board of County Comr's [1934], 39 Pac. [2d], 286; First Const. Co. of Brooklyn vs. State [1917], 211
N.Y., 295; 116 N.E., 1020; Bush vs. State {1918], 187 Ind., 339; 119 N.E., 417; State vs. Watkins [1933], 176
La., 837; 147 S., 8, 10, 11). In the case last cited, the Supreme Court of Luisiana said:
It is contended by counsel for Herbert Watkins that a district attorney, being charged with the duty
of enforcing the laws, has no right to plead that a law is unconstitutional. In support of the argument
three decisions are cited, viz.: State ex rel. Hall, District Attorney, vs. Judge of Tenth Judicial
District (33 La. Ann., 1222); State ex rel. Nicholls, Governor vs. Shakespeare, Mayor of New
Orleans (41 Ann., 156; 6 So., 592); and State ex rel., Banking Co., etc. vs. Heard, Auditor (47 La.
Ann., 1679; 18 So., 746; 47 L. R. A., 512). These decisions do not forbid a district attorney to plead
that a statute is unconstitutional if he finds if in conflict with one which it is his duty to enforce. In
State ex rel. Hall, District Attorney, vs. Judge, etc., the ruling was the judge should not, merely
because he believed a certain statute to be unconstitutional forbid the district attorney to file a bill
of information charging a person with a violation of the statute. In other words, a judge should not
judicially declare a statute unconstitutional until the question of constitutionality is tendered for
decision, and unless it must be decided in order to determine the right of a party litigant. State ex
rel. Nicholls, Governor, etc., is authority for the proposition merely that an officer on whom a statute
imposes the duty of enforcing its provisions cannot avoid the duty upon the ground that he
considers the statute unconstitutional, and hence in enforcing the statute he is immune from
responsibility if the statute be unconstitutional. State ex rel. Banking Co., etc., is authority for the
proposition merely that executive officers, e.g., the state auditor and state treasurer, should not
decline to perform ministerial duties imposed upon them by a statute, on the ground that they
believe the statute is unconstitutional.
It is the duty of a district attorney to enforce the criminal laws of the state, and, above all, to support
the Constitution of the state. If, in the performance of his duty he finds two statutes in conflict with
each other, or one which repeals another, and if, in his judgment, one of the two statutes is
unconstitutional, it is his duty to enforce the other; and, in order to do so, he is compelled to submit
to the court, by way of a plea, that one of the statutes is unconstitutional. If it were not so, the
power of the Legislature would be free from constitutional limitations in the enactment of criminal
laws.
The respondents do not seem to doubt seriously the correctness of the general proposition that the state
may impugn the validity of its laws. They have not cited any authority running clearly in the opposite
direction. In fact, they appear to have proceeded on the assumption that the rule as stated is sound but that it
has no application in the present case, nor may it be invoked by the City Fiscal in behalf of the People of the
Philippines, one of the petitioners herein, the principal reasons being that the validity before this court, that
the City Fiscal is estopped from attacking the validity of the Act and, not authorized challenge the validity of
the Act in its application outside said city. (Additional memorandum of respondents, October 23, 1937, pp. 8,.
10, 17 and 23.)
The mere fact that the Probation Act has been repeatedly relied upon the past and all that time has not been
attacked as unconstitutional by the Fiscal of Manila but, on the contrary, has been impliedly regarded by him
as constitutional, is no reason for considering the People of the Philippines estopped from nor assailing its
validity. For courts will pass upon a constitutional questions only when presented before it in bona fide cases
for determination, and the fact that the question has not been raised before is not a valid reason for refusing
to allow it to be raised later. The fiscal and all others are justified in relying upon the statute and treating it as
valid until it is held void by the courts in proper cases.
It remains to consider whether the determination of the constitutionality of Act No. 4221 is necessary to the
resolution of the instant case. For, ". . . while the court will meet the question with firmness, where its
decision is indispensable, it is the part of wisdom, and just respect for the legislature, renders it proper, to
waive it, if the case in which it arises, can be decided on other points." (Ex parte Randolph [1833], 20 F. Cas.
No. 11, 558; 2 Brock., 447. Vide, also Hoover vs. wood [1857], 9 Ind., 286, 287.) It has been held that the
determination of a constitutional question is necessary whenever it is essential to the decision of the case (12
C. J., p. 782, citing Long Sault Dev. Co. vs. Kennedy [1913], 158 App. Div., 398; 143 N. Y. Supp., 454 [aff.
212 N.Y., 1: 105 N. E., 849; Ann. Cas. 1915D, 56; and app dism 242 U.S., 272]; Hesse vs. Ledesma, 7 Porto
Rico Fed., 520; Cowan vs. Doddridge, 22 Gratt [63 Va.], 458; Union Line Co., vs. Wisconsin R. Commn., 146
Wis., 523; 129 N. W., 605), as where the right of a party is founded solely on a statute the validity of which is
attacked. (12 C.J., p. 782, citing Central Glass Co. vs. Niagrara F. Ins. Co., 131 La., 513; 59 S., 972; Cheney
vs. Beverly, 188 Mass., 81; 74 N.E., 306). There is no doubt that the respondent Cu Unjieng draws his
privilege to probation solely from Act No. 4221 now being assailed.
Apart from the foregoing considerations, that court will also take cognizance of the fact that the Probation Act
is a new addition to our statute books and its validity has never before been passed upon by the courts; that
may persons accused and convicted of crime in the City of Manila have applied for probation; that some of
them are already on probation; that more people will likely take advantage of the Probation Act in the future;
and that the respondent Mariano Cu Unjieng has been at large for a period of about four years since his first
conviction. All wait the decision of this court on the constitutional question. Considering, therefore, the
importance which the instant case has assumed and to prevent multiplicity of suits, strong reasons of public
policy demand that the constitutionality of Act No. 4221 be now resolved. (Yu Cong Eng vs. Trinidad [1925],
47 Phil., 385; [1926], 271 U.S., 500; 70 Law. ed., 1059. See 6 R.C.L., pp. 77, 78; People vs. Kennedy [1913],
207 N.Y., 533; 101 N.E., 442, 444; Ann. Cas. 1914C, 616; Borginis vs. Falk Co. [1911], 147 Wis., 327; 133
N.W., 209, 211; 37 L.R.A. [N.S.] 489; Dimayuga and Fajardo vs. Fernandez [1922], 43 Phil., 304.) In Yu
Cong Eng vs. Trinidad, supra, an analogous situation confronted us. We said: "Inasmuch as the property and
personal rights of nearly twelve thousand merchants are affected by these proceedings, and inasmuch as
Act No. 2972 is a new law not yet interpreted by the courts, in the interest of the public welfare and for the
advancement of public policy, we have determined to overrule the defense of want of jurisdiction in order that
we may decide the main issue. We have here an extraordinary situation which calls for a relaxation of the
general rule." Our ruling on this point was sustained by the Supreme Court of the United States. A more
binding authority in support of the view we have taken can not be found.
We have reached the conclusion that the question of the constitutionality of Act No. 4221 has been properly
raised. Now for the main inquiry: Is the Act unconstitutional?
Under a doctrine peculiarly American, it is the office and duty of the judiciary to enforce the Constitution. This
court, by clear implication from the provisions of section 2, subsection 1, and section 10, of Article VIII of the
Constitution, may declare an act of the national legislature invalid because in conflict with the fundamental
lay. It will not shirk from its sworn duty to enforce the Constitution. And, in clear cases, it will not hesitate to
give effect to the supreme law by setting aside a statute in conflict therewith. This is of the essence of judicial
duty.
This court is not unmindful of the fundamental criteria in cases of this nature that all reasonable doubts
should be resolved in favor of the constitutionality of a statute. An act of the legislature approved by the
executive, is presumed to be within constitutional limitations. The responsibility of upholding the Constitution
rests not on the courts alone but on the legislature as well. "The question of the validity of every statute is
first determined by the legislative department of the government itself." (U.S. vs. Ten Yu [1912], 24 Phil., 1,
10; Case vs. Board of Health and Heiser [1913], 24 Phil., 250, 276; U.S. vs. Joson [1913], 26 Phil., 1.) And a
statute finally comes before the courts sustained by the sanction of the executive. The members of the
Legislature and the Chief Executive have taken an oath to support the Constitution and it must be presumed
that they have been true to this oath and that in enacting and sanctioning a particular law they did not intend
to violate the Constitution. The courts cannot but cautiously exercise its power to overturn the solemn
declarations of two of the three grand departments of the governments. (6 R.C.L., p. 101.) Then, there is that
peculiar political philosophy which bids the judiciary to reflect the wisdom of the people as expressed through
an elective Legislature and an elective Chief Executive. It follows, therefore, that the courts will not set aside
a law as violative of the Constitution except in a clear case. This is a proposition too plain to require a citation
of authorities.
One of the counsel for respondents, in the course of his impassioned argument, called attention to the fact
that the President of the Philippines had already expressed his opinion against the constitutionality of the
Probation Act, adverting that as to the Executive the resolution of this question was a foregone conclusion.
Counsel, however, reiterated his confidence in the integrity and independence of this court. We take notice of
the fact that the President in his message dated September 1, 1937, recommended to the National Assembly
the immediate repeal of the Probation Act (No. 4221); that this message resulted in the approval of Bill No.
2417 of the Nationality Assembly repealing the probation Act, subject to certain conditions therein mentioned;
but that said bill was vetoed by the President on September 13, 1937, much against his wish, "to have
stricken out from the statute books of the Commonwealth a law . . . unfair and very likely unconstitutional." It
is sufficient to observe in this connection that, in vetoing the bill referred to, the President exercised his
constitutional prerogative. He may express the reasons which he may deem proper for taking such a step,
but his reasons are not binding upon us in the determination of actual controversies submitted for our
determination. Whether or not the Executive should express or in any manner insinuate his opinion on a
matter encompassed within his broad constitutional power of veto but which happens to be at the same time
pending determination in this court is a question of propriety for him exclusively to decide or determine.
Whatever opinion is expressed by him under these circumstances, however, cannot sway our judgment on
way or another and prevent us from taking what in our opinion is the proper course of action to take in a
given case. It if is ever necessary for us to make any vehement affirmance during this formative period of our
political history, it is that we are independent of the Executive no less than of the Legislative department of
our government — independent in the performance of our functions, undeterred by any consideration, free
from politics, indifferent to popularity, and unafraid of criticism in the accomplishment of our sworn duty as we
see it and as we understand it.
The constitutionality of Act No. 4221 is challenged on three principal grounds: (1) That said Act encroaches
upon the pardoning power of the Executive; (2) that its constitutes an undue delegation of legislative power
and (3) that it denies the equal protection of the laws.
1. Section 21 of the Act of Congress of August 29, 1916, commonly known as the Jones Law, in force at the
time of the approval of Act No. 4221, otherwise known as the Probation Act, vests in the Governor-General
of the Philippines "the exclusive power to grant pardons and reprieves and remit fines and forfeitures". This
power is now vested in the President of the Philippines. (Art. VII, sec. 11, subsec. 6.) The provisions of the
Jones Law and the Constitution differ in some respects. The adjective "exclusive" found in the Jones Law
has been omitted from the Constitution. Under the Jones Law, as at common law, pardon could be granted
any time after the commission of the offense, either before or after conviction (Vide Constitution of the United
States, Art. II, sec. 2; In re Lontok [1922], 43 Phil., 293). The Governor-General of the Philippines was thus
empowered, like the President of the United States, to pardon a person before the facts of the case were
fully brought to light. The framers of our Constitution thought this undesirable and, following most of the state
constitutions, provided that the pardoning power can only be exercised "after conviction". So, too, under the
new Constitution, the pardoning power does not extend to "cases of impeachment". This is also the rule
generally followed in the United States (Vide Constitution of the United States, Art. II, sec. 2). The rule in
England is different. There, a royal pardon can not be pleaded in bar of an impeachment; "but," says
Blackstone, "after the impeachment has been solemnly heard and determined, it is not understood that the
king's royal grace is further restrained or abridged." (Vide, Ex parte Wells [1856], 18 How., 307; 15 Law. ed.,
421; Com. vs. Lockwood [1872], 109 Mass., 323; 12 Am. Rep., 699; Sterling vs. Drake [1876], 29 Ohio St.,
457; 23 am. Rep., 762.) The reason for the distinction is obvious. In England, Judgment on impeachment is
not confined to mere "removal from office and disqualification to hold and enjoy any office of honor, trust, or
profit under the Government" (Art. IX, sec. 4, Constitution of the Philippines) but extends to the whole
punishment attached by law to the offense committed. The House of Lords, on a conviction may, by its
sentence, inflict capital punishment, perpetual banishment, perpetual banishment, fine or imprisonment,
depending upon the gravity of the offense committed, together with removal from office and incapacity to
hold office. (Com. vs. Lockwood, supra.) Our Constitution also makes specific mention of "commutation" and
of the power of the executive to impose, in the pardons he may grant, such conditions, restrictions and
limitations as he may deem proper. Amnesty may be granted by the President under the Constitution but
only with the concurrence of the National Assembly. We need not dwell at length on the significance of these
fundamental changes. It is sufficient for our purposes to state that the pardoning power has remained
essentially the same. The question is: Has the pardoning power of the Chief Executive under the Jones Law
been impaired by the Probation Act?
As already stated, the Jones Law vests the pardoning power exclusively in the Chief Executive. The exercise
of the power may not, therefore, be vested in anyone else.
". . . The benign prerogative of mercy reposed in the executive cannot be taken away nor fettered by any
legislative restrictions, nor can like power be given by the legislature to any other officer or authority. The
coordinate departments of government have nothing to do with the pardoning power, since no person
properly belonging to one of the departments can exercise any powers appertaining to either of the others
except in cases expressly provided for by the constitution." (20 R.C.L., pp., , and cases cited.) " . . . where
the pardoning power is conferred on the executive without express or implied limitations, the grant is
exclusive, and the legislature can neither exercise such power itself nor delegate it elsewhere, nor interfere
with or control the proper exercise thereof, . . ." (12 C.J., pp. 838, 839, and cases cited.) If Act No. 4221,
then, confers any pardoning power upon the courts it is for that reason unconstitutional and void. But does it?
In the famous Killitts decision involving an embezzlement case, the Supreme Court of the United States ruled
in 1916 that an order indefinitely suspending sentenced was void. (Ex parte United States [1916], 242 U.S.,
27; 61 Law. ed., 129; L.R.A. 1917E, 1178; 37 Sup. Ct. Rep., 72; Ann. Cas. 1917B, 355.) Chief Justice White,
after an exhaustive review of the authorities, expressed the opinion of the court that under the common law
the power of the court was limited to temporary suspension and that the right to suspend sentenced
absolutely and permanently was vested in the executive branch of the government and not in the judiciary.
But, the right of Congress to establish probation by statute was conceded. Said the court through its Chief
Justice: ". . . and so far as the future is concerned, that is, the causing of the imposition of penalties as fixed
to be subject, by probation legislation or such other means as the legislative mind may devise, to such
judicial discretion as may be adequate to enable courts to meet by the exercise of an enlarged but wise
discretion the infinite variations which may be presented to them for judgment, recourse must be had
Congress whose legislative power on the subject is in the very nature of things adequately complete."
(Quoted in Riggs vs. United States [1926], 14 F. [2d], 5, 6.) This decision led the National Probation
Association and others to agitate for the enactment by Congress of a federal probation law. Such action was
finally taken on March 4, 1925 (chap. 521, 43 Stat. L. 159, U.S.C. title 18, sec. 724). This was followed by an
appropriation to defray the salaries and expenses of a certain number of probation officers chosen by civil
service. (Johnson, Probation for Juveniles and Adults, p. 14.)
In United States vs. Murray ([1925], 275 U.S., 347; 48 Sup. Ct. Rep., 146; 72 Law. ed., 309), the Supreme
Court of the United States, through Chief Justice Taft, held that when a person sentenced to imprisonment
by a district court has begun to serve his sentence, that court has no power under the Probation Act of March
4, 1925 to grant him probation even though the term at which sentence was imposed had not yet expired. In
this case of Murray, the constitutionality of the probation Act was not considered but was assumed. The court
traced the history of the Act and quoted from the report of the Committee on the Judiciary of the United
States House of Representatives (Report No. 1377, 68th Congress, 2 Session) the following statement:
Prior to the so-called Killitts case, rendered in December, 1916, the district courts exercised a form
of probation either, by suspending sentence or by placing the defendants under state probation
officers or volunteers. In this case, however (Ex parte United States, 242 U.S., 27; 61 L. Ed., 129;
L.R.A., 1917E, 1178; 37 Sup. Ct. Rep., 72 Ann. Cas. 1917B, 355), the Supreme Court denied the
right of the district courts to suspend sentenced. In the same opinion the court pointed out the
necessity for action by Congress if the courts were to exercise probation powers in the future . . .
Since this decision was rendered, two attempts have been made to enact probation legislation. In
1917, a bill was favorably reported by the Judiciary Committee and passed the House. In 1920, the
judiciary Committee again favorably reported a probation bill to the House, but it was never
reached for definite action.
If this bill is enacted into law, it will bring the policy of the Federal government with reference to its
treatment of those convicted of violations of its criminal laws in harmony with that of the states of
the Union. At the present time every state has a probation law, and in all but twelve states the law
applies both to adult and juvenile offenders. (see, also, Johnson, Probation for Juveniles and
Adults [1928], Chap. I.)
The constitutionality of the federal probation law has been sustained by inferior federal courts. In Riggs vs.
United States supra, the Circuit Court of Appeals of the Fourth Circuit said:
Since the passage of the Probation Act of March 4, 1925, the questions under consideration have
been reviewed by the Circuit Court of Appeals of the Ninth Circuit (7 F. [2d], 590), and the
constitutionality of the act fully sustained, and the same held in no manner to encroach upon the
pardoning power of the President. This case will be found to contain an able and comprehensive
review of the law applicable here. It arose under the act we have to consider, and to it and the
authorities cited therein special reference is made (Nix vs. James, 7 F. [2d], 590, 594), as is also to
a decision of the Circuit Court of Appeals of the Seventh Circuit (Kriebel vs. U.S., 10 F. [2d], 762),
likewise construing the Probation Act.
We have seen that in 1916 the Supreme Court of the United States; in plain and unequivocal language,
pointed to Congress as possessing the requisite power to enact probation laws, that a federal probation law
as actually enacted in 1925, and that the constitutionality of the Act has been assumed by the Supreme
Court of the United States in 1928 and consistently sustained by the inferior federal courts in a number of
earlier cases.
We are fully convinced that the Philippine Legislature, like the Congress of the United States, may legally
enact a probation law under its broad power to fix the punishment of any and all penal offenses. This
conclusion is supported by other authorities. In Ex parte Bates ([1915], 20 N. M., 542; L.R.A. 1916A, 1285;
151 Pac., 698, the court said: "It is clearly within the province of the Legislature to denominate and define all
classes of crime, and to prescribe for each a minimum and maximum punishment." And in State vs. Abbott
([1910], 87 S.C., 466; 33 L.R.A. [N. S.], 112; 70 S. E., 6; Ann. Cas. 1912B, 1189), the court said: "The
legislative power to set punishment for crime is very broad, and in the exercise of this power the general
assembly may confer on trial judges, if it sees fit, the largest discretion as to the sentence to be imposed, as
to the beginning and end of the punishment and whether it should be certain or indeterminate or conditional."
(Quoted in State vs. Teal [1918], 108 S. C., 455; 95 S. E., 69.) Indeed, the Philippine Legislature has defined
all crimes and fixed the penalties for their violation. Invariably, the legislature has demonstrated the desire to
vest in the courts — particularly the trial courts — large discretion in imposing the penalties which the law
prescribes in particular cases. It is believed that justice can best be served by vesting this power in the
courts, they being in a position to best determine the penalties which an individual convict, peculiarly
circumstanced, should suffer. Thus, while courts are not allowed to refrain from imposing a sentence merely
because, taking into consideration the degree of malice and the injury caused by the offense, the penalty
provided by law is clearly excessive, the courts being allowed in such case to submit to the Chief Executive,
through the Department of Justice, such statement as it may deem proper (see art. 5, Revised Penal Code),
in cases where both mitigating and aggravating circumstances are attendant in the commission of a crime
and the law provides for a penalty composed of two indivisible penalties, the courts may allow such
circumstances to offset one another in consideration of their number and importance, and to apply the
penalty according to the result of such compensation. (Art. 63, rule 4, Revised Penal Code; U.S. vs. Reguera
and Asuategui [1921], 41 Phil., 506.) Again, article 64, paragraph 7, of the Revised Penal Code empowers
the courts to determine, within the limits of each periods, in case the penalty prescribed by law contains three
periods, the extent of the evil produced by the crime. In the imposition of fines, the courts are allowed to fix
any amount within the limits established by law, considering not only the mitigating and aggravating
circumstances, but more particularly the wealth or means of the culprit. (Art. 66, Revised Penal Code.) Article
68, paragraph 1, of the same Code provides that "a discretionary penalty shall be imposed" upon a person
under fifteen but over nine years of age, who has not acted without discernment, but always lower by two
degrees at least than that prescribed by law for the crime which he has committed. Article 69 of the same
Code provides that in case of "incomplete self-defense", i.e., when the crime committed is not wholly
excusable by reason of the lack of some of the conditions required to justify the same or to exempt from
criminal liability in the several cases mentioned in article 11 and 12 of the Code, "the courts shall impose the
penalty in the period which may be deemed proper, in view of the number and nature of the conditions of
exemption present or lacking." And, in case the commission of what are known as "impossible" crimes, "the
court, having in mind the social danger and the degree of criminality shown by the offender," shall impose
upon him either arresto mayor or a fine ranging from 200 to 500 pesos. (Art. 59, Revised Penal Code.)
Under our Revised Penal Code, also, one-half of the period of preventive imprisonment is deducted form the
entire term of imprisonment, except in certain cases expressly mentioned (art. 29); the death penalty is not
imposed when the guilty person is more than seventy years of age, or where upon appeal or revision of the
case by the Supreme Court, all the members thereof are not unanimous in their voting as to the propriety of
the imposition of the death penalty (art. 47, see also, sec. 133, Revised Administrative Code, as amended by
Commonwealth Act No. 3); the death sentence is not to be inflicted upon a woman within the three years
next following the date of the sentence or while she is pregnant, or upon any person over seventy years of
age (art. 83); and when a convict shall become insane or an imbecile after final sentence has been
pronounced, or while he is serving his sentenced, the execution of said sentence shall be suspended with
regard to the personal penalty during the period of such insanity or imbecility (art. 79).
But the desire of the legislature to relax what might result in the undue harshness of the penal laws is more
clearly demonstrated in various other enactments, including the probation Act. There is the Indeterminate
Sentence Law enacted in 1933 as Act No. 4103 and subsequently amended by Act No. 4225, establishing a
system of parole (secs. 5 to 100 and granting the courts large discretion in imposing the penalties of the law.
Section 1 of the law as amended provides; "hereafter, in imposing a prison sentence for an offenses
punished by the Revised Penal Code, or its amendments, the court shall sentence the accused to an
indeterminate sentence the maximum term of which shall be that which, in view of the attending
circumstances, could be properly imposed under the rules of the said Code, and to a minimum which shall be
within the range of the penalty next lower to that prescribed by the Code for the offense; and if the offense is
punished by any other law, the court shall sentence the accused to an indeterminate sentence, the maximum
term of which shall not exceed the maximum fixed by said law and the minimum shall not be less than the
minimum term prescribed by the same." Certain classes of convicts are, by section 2 of the law, excluded
from the operation thereof. The Legislature has also enacted the Juvenile Delinquency Law (Act No. 3203)
which was subsequently amended by Act No. 3559. Section 7 of the original Act and section 1 of the
amendatory Act have become article 80 of the Revised Penal Code, amended by Act No. 4117 of the
Philippine Legislature and recently reamended by Commonwealth Act No. 99 of the National Assembly. In
this Act is again manifested the intention of the legislature to "humanize" the penal laws. It allows, in effect,
the modification in particular cases of the penalties prescribed by law by permitting the suspension of the
execution of the judgment in the discretion of the trial court, after due hearing and after investigation of the
particular circumstances of the offenses, the criminal record, if any, of the convict, and his social history. The
Legislature has in reality decreed that in certain cases no punishment at all shall be suffered by the convict
as long as the conditions of probation are faithfully observed. It this be so, then, it cannot be said that the
Probation Act comes in conflict with the power of the Chief Executive to grant pardons and reprieves,
because, to use the language of the Supreme Court of New Mexico, "the element of punishment or the
penalty for the commission of a wrong, while to be declared by the courts as a judicial function under and
within the limits of law as announced by legislative acts, concerns solely the procedure and conduct of
criminal causes, with which the executive can have nothing to do." (Ex parteBates, supra.) In Williams vs.
State ([1926], 162 Ga., 327; 133 S.E., 843), the court upheld the constitutionality of the Georgia probation
statute against the contention that it attempted to delegate to the courts the pardoning power lodged by the
constitution in the governor alone is vested with the power to pardon after final sentence has been imposed
by the courts, the power of the courts to imposed any penalty which may be from time to time prescribed by
law and in such manner as may be defined cannot be questioned."
We realize, of course, the conflict which the American cases disclose. Some cases hold it unlawful for the
legislature to vest in the courts the power to suspend the operation of a sentenced, by probation or
otherwise, as to do so would encroach upon the pardoning power of the executive. (In re Webb [1895], 89
Wis., 354; 27 L.R.A., 356; 46 Am. St. Rep., 846; 62 N.W., 177; 9 Am. Crim., Rep., 702; State ex rel.
Summerfield vs. Moran [1919], 43 Nev., 150; 182 Pac., 927; Ex parte Clendenning [1908], 22 Okla., 108; 1
Okla. Crim. Rep., 227; 19 L.R.A. [N.S.], 1041; 132 Am. St. Rep., 628; 97 Pac., 650; People vs. Barrett
[1903], 202 Ill, 287; 67 N.E., 23; 63 L.R.A., 82; 95 Am. St. Rep., 230; Snodgrass vs. State [1912], 67 Tex.
Crim. Rep., 615; 41 L. R. A. [N. S.], 1144; 150 S. W., 162; Ex parte Shelor [1910], 33 Nev., 361;111 Pac.,
291; Neal vs. State [1898], 104 Ga., 509; 42 L. R. A., 190; 69 Am. St. Rep., 175; 30 S. E. 858; State ex rel.
Payne vs. Anderson [1921], 43 S. D., 630; 181 N. W., 839; People vs. Brown, 54 Mich., 15; 19 N. W., 571;
States vs. Dalton [1903], 109 Tenn., 544; 72 S. W., 456.)
Other cases, however, hold contra. (Nix vs. James [1925; C. C. A., 9th], 7 F. [2d], 590; Archer vs. Snook
[1926; D. C.], 10 F. [2d], 567; Riggs. vs. United States [1926; C. C. A. 4th], 14]) [2d], 5; Murphy vs. States
[1926], 171 Ark., 620; 286 S. W., 871; 48 A. L. R., 1189; Re Giannini [1912], 18 Cal. App., 166; 122 Pac.,
831; Re Nachnaber [1928], 89 Cal. App., 530; 265 Pac., 392; Ex parte De Voe [1931], 114 Cal. App., 730;
300 Pac., 874; People vs. Patrick [1897], 118 Cal., 332; 50 Pac., 425; Martin vs. People [1917], 69 Colo., 60;
168 Pac., 1171; Belden vs. Hugo [1914], 88 Conn., 50; 91 A., 369, 370, 371; Williams vs. State [1926], 162
Ga., 327; 133 S. E., 843; People vs. Heise [1913], 257 Ill., 443; 100 N. E., 1000; Parker vs. State [1893], 135
Ind., 534; 35 N. E., 179; 23 L. R. A., 859; St. Hillarie, Petitioner [1906], 101 Me., 522; 64 Atl., 882; People vs.
Stickle [1909], 156 Mich., 557; 121 N. W., 497; State vs. Fjolander [1914], 125 Minn., 529; State ex rel.
Bottomnly vs. District Court [1925], 73 Mont., 541; 237 Pac., 525; State vs. Everitt [1913], 164 N. C., 399; 79
S. E., 274; 47 L. R. A. [N. S.], 848; State ex rel. Buckley vs. Drew [1909], 75 N. H., 402; 74 Atl., 875; State
vs. Osborne [1911], 79 N. J. Eq., 430; 82 Atl. 424; Ex parte Bates [1915], 20 N. M., 542; L. R. A., 1916 A.
1285; 151 Pac., 698; People vs. ex rel. Forsyth vs. Court of Session [1894], 141 N. Y., 288; 23 L. R. A., 856;
36 N. E., 386; 15 Am. Crim. Rep., 675; People ex rel. Sullivan vs. Flynn [1907], 55 Misc., 639; 106 N. Y.
Supp., 928; People vs. Goodrich [1914], 149 N. Y. Supp., 406; Moore vs. Thorn [1935], 245 App. Div., 180;
281 N. Y. Supp., 49; Re Hart [1914], 29 N. D., 38; L. R. A., 1915C, 1169; 149 N. W., 568; Ex parte Eaton
[1925], 29 Okla., Crim. Rep., 275; 233 P., 781; State vs. Teal [1918], 108 S. C., 455; 95 S. E., 69; State vs.
Abbot [1910], 87 S. C., 466; 33 L.R.A., [N. S.], 112; 70 S. E., 6; Ann. Cas., 1912B, 1189; Fults vs. States
[1854],34 Tenn., 232; Woods vs. State [1814], 130 Tenn., 100; 169 S. W., 558; Baker vs. State [1814], 130
Tenn., 100; 169 S. W., 558; Baker vs. State [1913],70 Tex., Crim. Rep., 618; 158 S. W., 998; Cook vs. State
[1914], 73 Tex. Crim. Rep., 548; 165 S. W., 573; King vs. State [1914], 72 Tex. Crim. Rep., 394; 162 S. W.,
890; Clare vs. State [1932], 122 Tex. Crim. Rep., 394; 162 S. W., 890; Clare vs. State [1932], 122 Tex. Crim.
Rep., 211; 54 S. W. [2d], 127; Re Hall [1927], 100 Vt., 197; 136 A., 24; Richardson vs. Com. [1921], 131 Va.,
802; 109 S.E., 460; State vs. Mallahan [1911], 65 Wash., 287; 118 Pac., 42; State ex rel. Tingstand vs.
Starwich [1922], 119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393; 396.) We elect to follow this long catena of
authorities holding that the courts may be legally authorized by the legislature to suspend sentence by the
establishment of a system of probation however characterized. State ex rel. Tingstand vs. Starwich ([1922],
119 Wash., 561; 206 Pac., 29; 26 A. L. R., 393), deserved particular mention. In that case, a statute enacted
in 1921 which provided for the suspension of the execution of a sentence until otherwise ordered by the
court, and required that the convicted person be placed under the charge of a parole or peace officer during
the term of such suspension, on such terms as the court may determine, was held constitutional and as not
giving the court a power in violation of the constitutional provision vesting the pardoning power in the chief
executive of the state. (Vide, also, Re Giannini [1912], 18 Cal App., 166; 122 Pac., 831.)
Probation and pardon are not coterminous; nor are they the same. They are actually district and different
from each other, both in origin and in nature. In People ex rel. Forsyth vs. Court of Sessions ([1894], 141 N.
Y., 288, 294; 36 N. E., 386, 388; 23 L. R. A., 856; 15 Am. Crim. Rep., 675), the Court of Appeals of New York
said:
. . . The power to suspend sentence and the power to grant reprieves and pardons, as understood
when the constitution was adopted, are totally distinct and different in their nature. The former was
always a part of the judicial power; the latter was always a part of the executive power. The
suspension of the sentence simply postpones the judgment of the court temporarily or indefinitely,
but the conviction and liability following it, and the civil disabilities, remain and become operative
when judgment is rendered. A pardon reaches both the punishment prescribed for the offense and
the guilt of the offender. It releases the punishment, and blots out of existence the guilt, so that in
the eye of the law, the offender is as innocent as if he had never committed the offense. It removes
the penalties and disabilities, and restores him to all his civil rights. It makes him, as it were, a new
man, and gives him a new credit and capacity. (Ex parte Garland, 71 U. S., 4 Wall., 333; 18 Law.
ed., 366; U. S. vs. Klein, 80 U. S., 13 Wall., 128; 20 Law. ed., 519; Knote vs. U. S., 95 U. S., 149;
24 Law. ed., 442.)
The framers of the federal and the state constitutions were perfectly familiar with the principles
governing the power to grant pardons, and it was conferred by these instruments upon the
executive with full knowledge of the law upon the subject, and the words of the constitution were
used to express the authority formerly exercised by the English crown, or by its representatives in
the colonies. (Ex parte Wells, 59 U. S., 18 How., 307; 15 Law. ed., 421.) As this power was
understood, it did not comprehend any part of the judicial functions to suspend sentence, and it
was never intended that the authority to grant reprieves and pardons should abrogate, or in any
degree restrict, the exercise of that power in regard to its own judgments, that criminal courts has
so long maintained. The two powers, so distinct and different in their nature and character, were
still left separate and distinct, the one to be exercised by the executive, and the other by the judicial
department. We therefore conclude that a statute which, in terms, authorizes courts of criminal
jurisdiction to suspend sentence in certain cases after conviction, — a power inherent in such
courts at common law, which was understood when the constitution was adopted to be an ordinary
judicial function, and which, ever since its adoption, has been exercised of legislative power under
the constitution. It does not encroach, in any just sense, upon the powers of the executive, as they
have been understood and practiced from the earliest times. (Quoted with approval in Directors of
Prisons vs. Judge of First Instance of Cavite [1915], 29 Phil., 265, Carson, J., concurring, at pp.
294, 295.)
In probation, the probationer is in no true sense, as in pardon, a free man. He is not finally and completely
exonerated. He is not exempt from the entire punishment which the law inflicts. Under the Probation Act, the
probationer's case is not terminated by the mere fact that he is placed on probation. Section 4 of the Act
provides that the probation may be definitely terminated and the probationer finally discharged from
supervision only after the period of probation shall have been terminated and the probation officer shall have
submitted a report, and the court shall have found that the probationer has complied with the conditions of
probation. The probationer, then, during the period of probation, remains in legal custody — subject to the
control of the probation officer and of the court; and, he may be rearrested upon the non-fulfillment of the
conditions of probation and, when rearrested, may be committed to prison to serve the sentence originally
imposed upon him. (Secs. 2, 3, 5 and 6, Act No. 4221.)
The probation described in the act is not pardon. It is not complete liberty, and may be far from it. It
is really a new mode of punishment, to be applied by the judge in a proper case, in substitution of
the imprisonment and find prescribed by the criminal laws. For this reason its application is as
purely a judicial act as any other sentence carrying out the law deemed applicable to the offense.
The executive act of pardon, on the contrary, is against the criminal law, which binds and directs
the judges, or rather is outside of and above it. There is thus no conflict with the pardoning power,
and no possible unconstitutionality of the Probation Act for this cause. (Archer vs. Snook [1926], 10
F. [2d], 567, 569.)
Probation should also be distinguished from reprieve and from commutation of the sentence. Snodgrass vs.
State ([1912], 67 Tex. Crim. Rep., 615;41 L. R. A. [N. S.], 1144; 150 S. W., 162), is relied upon most strongly
by the petitioners as authority in support of their contention that the power to grant pardons and reprieves,
having been vested exclusively upon the Chief Executive by the Jones Law, may not be conferred by the
legislature upon the courts by means of probation law authorizing the indefinite judicial suspension of
sentence. We have examined that case and found that although the Court of Criminal Appeals of Texas held
that the probation statute of the state in terms conferred on the district courts the power to grant pardons to
persons convicted of crime, it also distinguished between suspensions sentence on the one hand, and
reprieve and commutation of sentence on the other. Said the court, through Harper, J.:
That the power to suspend the sentence does not conflict with the power of the Governor to grant
reprieves is settled by the decisions of the various courts; it being held that the distinction between
a "reprieve" and a suspension of sentence is that a reprieve postpones the execution of the
sentence to a day certain, whereas a suspension is for an indefinite time. (Carnal vs. People, 1
Parker, Cr. R., 262; In re Buchanan, 146 N. Y., 264; 40 N. E., 883), and cases cited in 7 Words &
Phrases, pp. 6115, 6116. This law cannot be hold in conflict with the power confiding in the
Governor to grant commutations of punishment, for a commutations is not but to change the
punishment assessed to a less punishment.
In State ex rel. Bottomnly vs. District Court ([1925], 73 Mont., 541; 237 Pac., 525), the Supreme Court of
Montana had under consideration the validity of the adult probation law of the state enacted in 1913, now
found in sections 12078-12086, Revised Codes of 1921. The court held the law valid as not impinging upon
the pardoning power of the executive. In a unanimous decision penned by Justice Holloway, the court said:
. . . . the term "pardon", "commutation", and "respite" each had a well understood meaning at the
time our Constitution was adopted, and no one of them was intended to comprehend the
suspension of the execution of the judgment as that phrase is employed in sections 12078-12086.
A "pardon" is an act of grace, proceeding from the power intrusted with the execution of the laws
which exempts the individual on whom it is bestowed from the punishment the law inflicts for a
crime he has committed (United States vs. Wilson, 7 Pet., 150; 8 Law. ed., 640); It is a remission of
guilt (State vs. Lewis, 111 La., 693; 35 So., 816), a forgiveness of the offense (Cook vs. Middlesex
County, 26 N. J. Law, 326; Ex parte Powell, 73 Ala., 517; 49 Am. Rep., 71). "Commutation" is a
remission of a part of the punishment; a substitution of a less penalty for the one originally imposed
(Lee vs. Murphy, 22 Grat. [Va.] 789; 12 Am. Rep., 563; Rich vs. Chamberlain, 107 Mich., 381; 65
N. W., 235). A "reprieve" or "respite" is the withholding of the sentence for an interval of time (4
Blackstone's Commentaries, 394), a postponement of execution (Carnal vs. People, 1 Parker, Cr.
R. [N. Y.], 272), a temporary suspension of execution (Butler vs. State, 97 Ind., 373).
Few adjudicated cases are to be found in which the validity of a statute similar to our section 12078
has been determined; but the same objections have been urged against parole statutes which vest
the power to parole in persons other than those to whom the power of pardon is granted, and these
statutes have been upheld quite uniformly, as a reference to the numerous cases cited in the notes
to Woods vs. State (130 Tenn., 100; 169 S. W.,558, reported in L. R. A., 1915F, 531), will disclose.
(See, also, 20 R. C. L., 524.)
We conclude that the Probation Act does not conflict with the pardoning power of the Executive. The
pardoning power, in respect to those serving their probationary sentences, remains as full and complete as if
the Probation Law had never been enacted. The President may yet pardon the probationer and thus place it
beyond the power of the court to order his rearrest and imprisonment. (Riggs vs. United States [1926],
14 F. [2d], 5, 7.)
2. But while the Probation Law does not encroach upon the pardoning power of the executive and is not for
that reason void, does section 11 thereof constitute, as contended, an undue delegation of legislative power?
Under the constitutional system, the powers of government are distributed among three coordinate and
substantially independent organs: the legislative, the executive and the judicial. Each of these departments of
the government derives its authority from the Constitution which, in turn, is the highest expression of popular
will. Each has exclusive cognizance of the matters within its jurisdiction, and is supreme within its own
sphere.
The power to make laws — the legislative power — is vested in a bicameral Legislature by the Jones Law
(sec. 12) and in a unicamiral National Assembly by the Constitution (Act. VI, sec. 1, Constitution of the
Philippines). The Philippine Legislature or the National Assembly may not escape its duties and
responsibilities by delegating that power to any other body or authority. Any attempt to abdicate the power is
unconstitutional and void, on the principle that potestas delegata non delegare potest. This principle is said to
have originated with the glossators, was introduced into English law through a misreading of Bracton, there
developed as a principle of agency, was established by Lord Coke in the English public law in decisions
forbidding the delegation of judicial power, and found its way into America as an enlightened principle of free
government. It has since become an accepted corollary of the principle of separation of powers. (5 Encyc. of
the Social Sciences, p. 66.) The classic statement of the rule is that of Locke, namely: "The legislative neither
must nor can transfer the power of making laws to anybody else, or place it anywhere but where the people
have." (Locke on Civil Government, sec. 142.) Judge Cooley enunciates the doctrine in the following oft-
quoted language: "One of the settled maxims in constitutional law is, that the power conferred upon the
legislature to make laws cannot be delegated by that department to any other body or authority. Where the
sovereign power of the state has located the authority, there it must remain; and by the constitutional agency
alone the laws must be made until the Constitution itself is charged. The power to whose judgment, wisdom,
and patriotism this high prerogative has been intrusted cannot relieve itself of the responsibilities by choosing
other agencies upon which the power shall be devolved, nor can it substitute the judgment, wisdom, and
patriotism of any other body for those to which alone the people have seen fit to confide this sovereign trust."
(Cooley on Constitutional Limitations, 8th ed., Vol. I, p. 224. Quoted with approval in U. S. vs. Barrias [1908],
11 Phil., 327.) This court posits the doctrine "on the ethical principle that such a delegated power constitutes
not only a right but a duty to be performed by the delegate by the instrumentality of his own judgment acting
immediately upon the matter of legislation and not through the intervening mind of another. (U. S. vs.
Barrias, supra, at p. 330.)
The rule, however, which forbids the delegation of legislative power is not absolute and inflexible. It admits of
exceptions. An exceptions sanctioned by immemorial practice permits the central legislative body to delegate
legislative powers to local authorities. (Rubi vs. Provincial Board of Mindoro [1919], 39 Phil., 660; U. S. vs.
Salaveria [1918], 39 Phil., 102; Stoutenburgh vs. Hennick [1889], 129 U. S., 141; 32 Law. ed., 637; 9 Sup.
Ct. Rep., 256; State vs. Noyes [1855], 30 N. H., 279.) "It is a cardinal principle of our system of government,
that local affairs shall be managed by local authorities, and general affairs by the central authorities; and
hence while the rule is also fundamental that the power to make laws cannot be delegated, the creation of
the municipalities exercising local self government has never been held to trench upon that rule. Such
legislation is not regarded as a transfer of general legislative power, but rather as the grant of the authority to
prescribed local regulations, according to immemorial practice, subject of course to the interposition of the
superior in cases of necessity." (Stoutenburgh vs. Hennick, supra.) On quite the same principle, Congress is
powered to delegate legislative power to such agencies in the territories of the United States as it may select.
A territory stands in the same relation to Congress as a municipality or city to the state government. (United
States vs. Heinszen [1907], 206 U. S., 370; 27 Sup. Ct. Rep., 742; 51 L. ed., 1098; 11 Ann. Cas., 688; Dorr
vs. United States [1904], 195 U.S., 138; 24 Sup. Ct. Rep., 808; 49 Law. ed., 128; 1 Ann. Cas., 697.) Courts
have also sustained the delegation of legislative power to the people at large. Some authorities maintain that
this may not be done (12 C. J., pp. 841, 842; 6 R. C. L., p. 164, citing People vs. Kennedy [1913], 207 N. Y.,
533; 101 N. E., 442; Ann. Cas., 1914C, 616). However, the question of whether or not a state has ceased to
be republican in form because of its adoption of the initiative and referendum has been held not to be a
judicial but a political question (Pacific States Tel. & Tel. Co. vs. Oregon [1912], 223 U. S., 118; 56 Law. ed.,
377; 32 Sup. Cet. Rep., 224), and as the constitutionality of such laws has been looked upon with favor by
certain progressive courts, the sting of the decisions of the more conservative courts has been pretty well
drawn. (Opinions of the Justices [1894], 160 Mass., 586; 36 N. E., 488; 23 L. R. A., 113; Kiernan vs. Portland
[1910], 57 Ore., 454; 111 Pac., 379; 1132 Pac., 402; 37 L. R. A. [N. S.], 332; Pacific States Tel. & Tel. Co.
vs. Oregon, supra.) Doubtless, also, legislative power may be delegated by the Constitution itself. Section
14, paragraph 2, of article VI of the Constitution of the Philippines provides that "The National Assembly may
by law authorize the President, subject to such limitations and restrictions as it may impose, to fix within
specified limits, tariff rates, import or export quotas, and tonnage and wharfage dues." And section 16 of the
same article of the Constitution provides that "In times of war or other national emergency, the National
Assembly may by law authorize the President, for a limited period and subject to such restrictions as it may
prescribed, to promulgate rules and regulations to carry out a declared national policy." It is beyond the
scope of this decision to determine whether or not, in the absence of the foregoing constitutional provisions,
the President could be authorized to exercise the powers thereby vested in him. Upon the other hand,
whatever doubt may have existed has been removed by the Constitution itself.
The case before us does not fall under any of the exceptions hereinabove mentioned.
The challenged section of Act No. 4221 in section 11 which reads as follows:
This Act shall apply only in those provinces in which the respective provincial boards have provided
for the salary of a probation officer at rates not lower than those now provided for provincial fiscals.
Said probation officer shall be appointed by the Secretary of Justice and shall be subject to the
direction of the Probation Office. (Emphasis ours.)
In testing whether a statute constitute an undue delegation of legislative power or not, it is usual to inquire
whether the statute was complete in all its terms and provisions when it left the hands of the legislature so
that nothing was left to the judgment of any other appointee or delegate of the legislature. (6 R. C. L., p. 165.)
In the United States vs. Ang Tang Ho ([1922], 43 Phil., 1), this court adhered to the foregoing rule when it
held an act of the legislature void in so far as it undertook to authorize the Governor-General, in his
discretion, to issue a proclamation fixing the price of rice and to make the sale of it in violation of the
proclamation a crime. (See and cf. Compañia General de Tabacos vs. Board of Public Utility Commissioners
[1916], 34 Phil., 136.) The general rule, however, is limited by another rule that to a certain extent matters of
detail may be left to be filled in by rules and regulations to be adopted or promulgated by executive officers
and administrative boards. (6 R. C. L., pp. 177-179.)
For the purpose of Probation Act, the provincial boards may be regarded as administrative bodies endowed
with power to determine when the Act should take effect in their respective provinces. They are the agents or
delegates of the legislature in this respect. The rules governing delegation of legislative power to
administrative and executive officers are applicable or are at least indicative of the rule which should be here
adopted. An examination of a variety of cases on delegation of power to administrative bodies will show that
the ratio decidendi is at variance but, it can be broadly asserted that the rationale revolves around the
presence or absence of a standard or rule of action — or the sufficiency thereof — in the statute, to aid the
delegate in exercising the granted discretion. In some cases, it is held that the standard is sufficient; in others
that is insufficient; and in still others that it is entirely lacking. As a rule, an act of the legislature is incomplete
and hence invalid if it does not lay down any rule or definite standard by which the administrative officer or
board may be guided in the exercise of the discretionary powers delegated to it. (See Schecter vs. United
States [1925], 295 U. S., 495; 79 L. ed., 1570; 55 Sup. Ct. Rep., 837; 97 A.L.R., 947; People ex rel. Rice vs.
Wilson Oil Co. [1936], 364 Ill., 406; 4 N. E. [2d], 847; 107 A.L.R., 1500 and cases cited. See also R. C. L.,
title "Constitutional Law", sec 174.) In the case at bar, what rules are to guide the provincial boards in the
exercise of their discretionary power to determine whether or not the Probation Act shall apply in their
respective provinces? What standards are fixed by the Act? We do not find any and none has been pointed
to us by the respondents. The probation Act does not, by the force of any of its provisions, fix and impose
upon the provincial boards any standard or guide in the exercise of their discretionary power. What is
granted, if we may use the language of Justice Cardozo in the recent case of Schecter, supra, is a "roving
commission" which enables the provincial boards to exercise arbitrary discretion. By section 11 if the Act, the
legislature does not seemingly on its own authority extend the benefits of the Probation Act to the provinces
but in reality leaves the entire matter for the various provincial boards to determine. In other words, the
provincial boards of the various provinces are to determine for themselves, whether the Probation Law shall
apply to their provinces or not at all. The applicability and application of the Probation Act are entirely placed
in the hands of the provincial boards. If the provincial board does not wish to have the Act applied in its
province, all that it has to do is to decline to appropriate the needed amount for the salary of a probation
officer. The plain language of the Act is not susceptible of any other interpretation. This, to our minds, is a
virtual surrender of legislative power to the provincial boards.
"The true distinction", says Judge Ranney, "is between the delegation of power to make the law, which
necessarily involves a discretion as to what it shall be, and conferring an authority or discretion as to its
execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid
objection can be made." (Cincinnati, W. & Z. R. Co. vs. Clinton County Comrs. [1852]; 1 Ohio St., 77, 88.
See also, Sutherland on Statutory Construction, sec 68.) To the same effect are the decision of this court
in Municipality of Cardona vs. Municipality of Binangonan ([1917], 36 Phil., 547); Rubi vs. Provincial Board of
Mindoro ([1919],39 Phil., 660) and Cruz vs. Youngberg ([1931], 56 Phil., 234). In the first of these cases, this
court sustained the validity of the law conferring upon the Governor-General authority to adjust provincial and
municipal boundaries. In the second case, this court held it lawful for the legislature to direct non-Christian
inhabitants to take up their habitation on unoccupied lands to be selected by the provincial governor and
approved by the provincial board. In the third case, it was held proper for the legislature to vest in the
Governor-General authority to suspend or not, at his discretion, the prohibition of the importation of the
foreign cattle, such prohibition to be raised "if the conditions of the country make this advisable or if
deceased among foreign cattle has ceased to be a menace to the agriculture and livestock of the lands."
It should be observed that in the case at bar we are not concerned with the simple transference of details of
execution or the promulgation by executive or administrative officials of rules and regulations to carry into
effect the provisions of a law. If we were, recurrence to our own decisions would be sufficient. (U. S. vs.
Barrias [1908], 11 Phil., 327; U.S. vs. Molina [1914], 29 Phil., 119; Alegre vs. Collector of Customs [1929], 53
Phil., 394; Cebu Autobus Co. vs. De Jesus [1931], 56 Phil., 446; U. S. vs. Gomez [1915], 31 Phil., 218; Rubi
vs. Provincial Board of Mindoro [1919], 39 Phil., 660.)
It is connected, however, that a legislative act may be made to the effect as law after it leaves the hands of
the legislature. It is true that laws may be made effective on certain contingencies, as by proclamation of the
executive or the adoption by the people of a particular community (6 R. C. L., 116, 170-172; Cooley,
Constitutional Limitations, 8th ed., Vol. I, p. 227). In Wayman vs. Southard ([1825], 10 Wheat. 1; 6 Law. ed.,
253), the Supreme Court of the United State ruled that the legislature may delegate a power not legislative
which it may itself rightfully exercise.(Vide, also, Dowling vs. Lancashire Ins. Co. [1896], 92 Wis., 63; 65 N.
W., 738; 31 L. R. A., 112.) The power to ascertain facts is such a power which may be delegated. There is
nothing essentially legislative in ascertaining the existence of facts or conditions as the basis of the taking
into effect of a law. That is a mental process common to all branches of the government. (Dowling vs.
Lancashire Ins. Co., supra; In re Village of North Milwaukee [1896], 93 Wis., 616; 97 N.W., 1033; 33 L.R.A.,
938; Nash vs. Fries [1906], 129 Wis., 120; 108 N.W., 210; Field vs. Clark [1892], 143 U.S., 649; 12 Sup. Ct.,
495; 36 Law. ed., 294.) Notwithstanding the apparent tendency, however, to relax the rule prohibiting
delegation of legislative authority on account of the complexity arising from social and economic forces at
work in this modern industrial age (Pfiffner, Public Administration [1936] ch. XX; Laski, "The Mother of
Parliaments", foreign Affairs, July, 1931, Vol. IX, No. 4, pp. 569-579; Beard, "Squirt-Gun Politics", in Harper's
Monthly Magazine, July, 1930, Vol. CLXI, pp. 147, 152), the orthodox pronouncement of Judge Cooley in his
work on Constitutional Limitations finds restatement in Prof. Willoughby's treatise on the Constitution of the
United States in the following language — speaking of declaration of legislative power to administrative
agencies: "The principle which permits the legislature to provide that the administrative agent may determine
when the circumstances are such as require the application of a law is defended upon the ground that at the
time this authority is granted, the rule of public policy, which is the essence of the legislative act, is
determined by the legislature. In other words, the legislature, as it its duty to do, determines that, under given
circumstances, certain executive or administrative action is to be taken, and that, under other circumstances,
different of no action at all is to be taken. What is thus left to the administrative official is not the legislative
determination of what public policy demands, but simply the ascertainment of what the facts of the case
require to be done according to the terms of the law by which he is governed." (Willoughby on the
Constitution of the United States, 2nd ed., Vol. II, p. 1637.) In Miller vs. Mayer, etc., of New York [1883], 109
U.S., 3 Sup. Ct. Rep., 228; 27 Law. ed., 971, 974), it was said: "The efficiency of an Act as a declaration of
legislative will must, of course, come from Congress, but the ascertainment of the contingency upon which
the Act shall take effect may be left to such agencies as it may designate." (See, also, 12 C.J., p. 864; State
vs. Parker [1854], 26 Vt., 357; Blanding vs. Burr [1859], 13 Cal., 343, 258.) The legislature, then may provide
that a contingencies leaving to some other person or body the power to determine when the specified
contingencies has arisen. But, in the case at bar, the legislature has not made the operation of the
Prohibition Act contingent upon specified facts or conditions to be ascertained by the provincial board. It
leaves, as we have already said, the entire operation or non-operation of the law upon the provincial board.
the discretion vested is arbitrary because it is absolute and unlimited. A provincial board need not investigate
conditions or find any fact, or await the happening of any specified contingency. It is bound by no rule, —
limited by no principle of expendiency announced by the legislature. It may take into consideration certain
facts or conditions; and, again, it may not. It may have any purpose or no purpose at all. It need not give any
reason whatsoever for refusing or failing to appropriate any funds for the salary of a probation officer. This is
a matter which rest entirely at its pleasure. The fact that at some future time — we cannot say when — the
provincial boards may appropriate funds for the salaries of probation officers and thus put the law into
operation in the various provinces will not save the statute. The time of its taking into effect, we reiterate,
would yet be based solely upon the will of the provincial boards and not upon the happening of a certain
specified contingency, or upon the ascertainment of certain facts or conditions by a person or body other
than legislature itself.
The various provincial boards are, in practical effect, endowed with the power of suspending the operation of
the Probation Law in their respective provinces. In some jurisdiction, constitutions provided that laws may be
suspended only by the legislature or by its authority. Thus, section 28, article I of the Constitution of Texas
provides that "No power of suspending laws in this state shall be exercised except by the legislature"; and
section 26, article I of the Constitution of Indiana provides "That the operation of the laws shall never be
suspended, except by authority of the General Assembly." Yet, even provisions of this sort do not confer
absolute power of suspension upon the legislature. While it may be undoubted that the legislature may
suspend a law, or the execution or operation of a law, a law may not be suspended as to certain individuals
only, leaving the law to be enjoyed by others. The suspension must be general, and cannot be made for
individual cases or for particular localities. In Holden vs. James ([1814], 11 Mass., 396; 6 Am. Dec., 174, 177,
178), it was said:
By the twentieth article of the declaration of rights in the constitution of this commonwealth, it is
declared that the power of suspending the laws, or the execution of the laws, ought never to be
exercised but by the legislature, or by authority derived from it, to be exercised in such particular
cases only as the legislature shall expressly provide for. Many of the articles in that declaration of
rights were adopted from the Magna Charta of England, and from the bill of rights passed in the
reign of William and Mary. The bill of rights contains an enumeration of the oppressive acts of
James II, tending to subvert and extirpate the protestant religion, and the laws and liberties of the
kingdom; and the first of them is the assuming and exercising a power of dispensing with and
suspending the laws, and the execution of the laws without consent of parliament. The first article
in the claim or declaration of rights contained in the statute is, that the exercise of such power, by
legal authority without consent of parliament, is illegal. In the tenth section of the same statute it is
further declared and enacted, that "No dispensation by non obstante of or to any statute, or part
thereof, should be allowed; but the same should be held void and of no effect, except a
dispensation be allowed of in such statute." There is an implied reservation of authority in the
parliament to exercise the power here mentioned; because, according to the theory of the English
Constitution, "that absolute despotic power, which must in all governments reside somewhere," is
intrusted to the parliament: 1 Bl. Com., 160.
The principles of our government are widely different in this particular. Here the sovereign and
absolute power resides in the people; and the legislature can only exercise what is delegated to
them according to the constitution. It is obvious that the exercise of the power in question would be
equally oppressive to the subject, and subversive of his right to protection, "according to standing
laws," whether exercised by one man or by a number of men. It cannot be supposed that the
people when adopting this general principle from the English bill of rights and inserting it in our
constitution, intended to bestow by implication on the general court one of the most odious and
oppressive prerogatives of the ancient kings of England. It is manifestly contrary to the first
principles of civil liberty and natural justice, and to the spirit of our constitution and laws, that any
one citizen should enjoy privileges and advantages which are denied to all others under like
circumstances; or that ant one should be subject to losses, damages, suits, or actions from which
all others under like circumstances are exempted.
To illustrate the principle: A section of a statute relative to dogs made the owner of any dog liable to the
owner of domestic animals wounded by it for the damages without proving a knowledge of it vicious
disposition. By a provision of the act, power was given to the board of supervisors to determine whether or
not during the current year their county should be governed by the provisions of the act of which that section
constituted a part. It was held that the legislature could not confer that power. The court observed that it
could no more confer such a power than to authorize the board of supervisors of a county to abolish in such
county the days of grace on commercial paper, or to suspend the statute of limitations. (Slinger vs.
Henneman [1875], 38 Wis., 504.) A similar statute in Missouri was held void for the same reason in State vs.
Field ([1853, 17 Mo., 529;59 Am. Dec., 275.) In that case a general statute formulating a road system
contained a provision that "if the county court of any county should be of opinion that the provisions of the act
should not be enforced, they might, in their discretion, suspend the operation of the same for any specified
length of time, and thereupon the act should become inoperative in such county for the period specified in
such order; and thereupon order the roads to be opened and kept in good repair, under the laws theretofore
in force." Said the court: ". . . this act, by its own provisions, repeals the inconsistent provisions of a former
act, and yet it is left to the county court to say which act shall be enforce in their county. The act does not
submit the question to the county court as an original question, to be decided by that tribunal, whether the act
shall commence its operation within the county; but it became by its own terms a law in every county not
excepted by name in the act. It did not, then, require the county court to do any act in order to give it effect.
But being the law in the county, and having by its provisions superseded and abrogated the inconsistent
provisions of previous laws, the county court is . . . empowered, to suspend this act and revive the repealed
provisions of the former act. When the question is before the county court for that tribunal to determine which
law shall be in force, it is urge before us that the power then to be exercised by the court is strictly legislative
power, which under our constitution, cannot be delegated to that tribunal or to any other body of men in the
state. In the present case, the question is not presented in the abstract; for the county court of Saline county,
after the act had been for several months in force in that county, did by order suspend its operation; and
during that suspension the offense was committed which is the subject of the present indictment . . . ."
(See Mitchell vs. State [1901], 134 Ala., 392; 32 S., 687.)
True, the legislature may enact laws for a particular locality different from those applicable to other localities
and, while recognizing the force of the principle hereinabove expressed, courts in may jurisdiction have
sustained the constitutionality of the submission of option laws to the vote of the people. (6 R.C.L., p. 171.)
But option laws thus sustained treat of subjects purely local in character which should receive different
treatment in different localities placed under different circumstances. "They relate to subjects which, like the
retailing of intoxicating drinks, or the running at large of cattle in the highways, may be differently regarded in
different localities, and they are sustained on what seems to us the impregnable ground, that the subject,
though not embraced within the ordinary powers of municipalities to make by-laws and ordinances, is
nevertheless within the class of public regulations, in respect to which it is proper that the local judgment
should control." (Cooley on Constitutional Limitations, 5th ed., p. 148.) So that, while we do not deny the right
of local self-government and the propriety of leaving matters of purely local concern in the hands of local
authorities or for the people of small communities to pass upon, we believe that in matters of general of
general legislation like that which treats of criminals in general, and as regards the general subject of
probation, discretion may not be vested in a manner so unqualified and absolute as provided in Act No.
4221. True, the statute does not expressly state that the provincial boards may suspend the operation of the
Probation Act in particular provinces but, considering that, in being vested with the authority to appropriate or
not the necessary funds for the salaries of probation officers, they thereby are given absolute discretion to
determine whether or not the law should take effect or operate in their respective provinces, the provincial
boards are in reality empowered by the legislature to suspend the operation of the Probation Act in particular
provinces, the Act to be held in abeyance until the provincial boards should decide otherwise by
appropriating the necessary funds. The validity of a law is not tested by what has been done but by what may
be done under its provisions. (Walter E. Olsen & Co. vs. Aldanese and Trinidad [1922], 43 Phil., 259; 12 C.
J., p. 786.)
It in conceded that a great deal of latitude should be granted to the legislature not only in the expression of
what may be termed legislative policy but in the elaboration and execution thereof. "Without this power,
legislation would become oppressive and yet imbecile." (People vs. Reynolds, 5 Gilman, 1.) It has been said
that popular government lives because of the inexhaustible reservoir of power behind it. It is unquestionable
that the mass of powers of government is vested in the representatives of the people and that these
representatives are no further restrained under our system than by the express language of the instrument
imposing the restraint, or by particular provisions which by clear intendment, have that effect. (Angara vs.
Electoral Commission [1936], 35 Off. Ga., 23; Schneckenburger vs. Moran [1936], 35 Off. Gaz., 1317.) But, it
should be borne in mind that a constitution is both a grant and a limitation of power and one of these time-
honored limitations is that, subject to certain exceptions, legislative power shall not be delegated.
We conclude that section 11 of Act No. 4221 constitutes an improper and unlawful delegation of legislative
authority to the provincial boards and is, for this reason, unconstitutional and void.
3. It is also contended that the Probation Act violates the provisions of our Bill of Rights which prohibits the
denial to any person of the equal protection of the laws (Act. III, sec. 1 subsec. 1. Constitution of the
Philippines.)
This basic individual right sheltered by the Constitution is a restraint on all the tree grand departments of our
government and on the subordinate instrumentalities and subdivision thereof, and on many constitutional
power, like the police power, taxation and eminent domain. The equal protection of laws, sententiously
observes the Supreme Court of the United States, "is a pledge of the protection of equal laws." (Yick Wo vs.
Hopkins [1886], 118 U. S., 356; 30 Law. ed., 220; 6 Sup. Ct. Rep., 10464; Perley vs. North Carolina, 249 U.
S., 510; 39 Sup. Ct. Rep., 357; 63 Law. ed., 735.) Of course, what may be regarded as a denial of the equal
protection of the laws in a question not always easily determined. No rule that will cover every case can be
formulated. (Connolly vs. Union Sewer Pipe Co. [1902], 184, U. S., 540; 22 Sup. Ct., Rep., 431; 46 Law. ed.,
679.) Class legislation discriminating against some and favoring others in prohibited. But classification on a
reasonable basis, and nor made arbitrarily or capriciously, is permitted. (Finely vs. California [1911], 222 U.
S., 28; 56 Law. ed., 75; 32 Sup. Ct. Rep., 13; Gulf. C. & S. F. Ry Co. vs. Ellis [1897], 165 U. S., 150; 41 Law.
ed., 666; 17 Sup. Ct. Rep., 255; Smith, Bell & Co. vs. Natividad [1919], 40 Phil., 136.) The classification,
however, to be reasonable must be based on substantial distinctions which make real differences; it must be
germane to the purposes of the law; it must not be limited to existing conditions only, and must apply equally
to each member of the class. (Borgnis vs. Falk. Co. [1911], 147 Wis., 327, 353; 133 N. W., 209; 3 N. C. C.
A., 649; 37 L. R. A. [N. S.], 489; State vs. Cooley, 56 Minn., 540; 530-552; 58 N. W., 150; Lindsley vs.
Natural Carbonic Gas Co.[1911], 220 U. S., 61, 79, 55 Law. ed., 369, 377; 31 Sup. Ct. Rep., 337; Ann. Cas.,
1912C, 160; Lake Shore & M. S. R. Co. vs. Clough [1917], 242 U.S., 375; 37 Sup. Ct. Rep., 144; 61 Law.
ed., 374; Southern Ry. Co. vs. Greene [1910], 216 U. S., 400; 30 Sup. Ct. Rep., 287; 54 Law. ed., 536; 17
Ann. Cas., 1247; Truax vs. Corrigan [1921], 257 U. S., 312; 12 C. J., pp. 1148, 1149.)
In the case at bar, however, the resultant inequality may be said to flow from the unwarranted delegation of
legislative power, although perhaps this is not necessarily the result in every case. Adopting the example
given by one of the counsel for the petitioners in the course of his oral argument, one province may
appropriate the necessary fund to defray the salary of a probation officer, while another province may refuse
or fail to do so. In such a case, the Probation Act would be in operation in the former province but not in the
latter. This means that a person otherwise coming within the purview of the law would be liable to enjoy the
benefits of probation in one province while another person similarly situated in another province would be
denied those same benefits. This is obnoxious discrimination. Contrariwise, it is also possible for all the
provincial boards to appropriate the necessary funds for the salaries of the probation officers in their
respective provinces, in which case no inequality would result for the obvious reason that probation would be
in operation in each and every province by the affirmative action of appropriation by all the provincial boards.
On that hypothesis, every person coming within the purview of the Probation Act would be entitled to avail of
the benefits of the Act. Neither will there be any resulting inequality if no province, through its provincial
board, should appropriate any amount for the salary of the probation officer — which is the situation now —
and, also, if we accept the contention that, for the purpose of the Probation Act, the City of Manila should be
considered as a province and that the municipal board of said city has not made any appropriation for the
salary of the probation officer. These different situations suggested show, indeed, that while inequality may
result in the application of the law and in the conferment of the benefits therein provided, inequality is not in
all cases the necessary result. But whatever may be the case, it is clear that in section 11 of the Probation
Act creates a situation in which discrimination and inequality are permitted or allowed. There are, to be sure,
abundant authorities requiring actual denial of the equal protection of the law before court should assume the
task of setting aside a law vulnerable on that score, but premises and circumstances considered, we are of
the opinion that section 11 of Act No. 4221 permits of the denial of the equal protection of the law and is on
that account bad. We see no difference between a law which permits of such denial. A law may appear to be
fair on its face and impartial in appearance, yet, if it permits of unjust and illegal discrimination, it is within the
constitutional prohibitions. (By analogy, Chy Lung vs. Freeman [1876], 292 U. S., 275; 23 Law. ed., 550;
Henderson vs. Mayor [1876], 92 U. S., 259; 23 Law. ed., 543; Ex parte Virginia [1880], 100 U. S., 339; 25
Law. ed., 676; Neal vs. Delaware [1881], 103 U. S., 370; 26 Law. ed., 567; Soon Hing vs. Crowley [1885],
113 U. S., 703; 28 Law. ed., 1145, Yick Wo vs. Hopkins [1886],118 U. S., 356; 30 Law. ed., 220; Williams vs.
Mississippi [1897], 170 U. S., 218; 18 Sup. Ct. Rep., 583; 42 Law. ed., 1012; Bailey vs. Alabama [1911], 219
U. S., 219; 31 Sup. Ct. Rep. 145; 55 Law. ed., Sunday Lake Iron Co. vs. Wakefield [1918], 247 U. S., 450; 38
Sup. Ct. Rep., 495; 62 Law. ed., 1154.) In other words, statutes may be adjudged unconstitutional because
of their effect in operation (General Oil Co. vs. Clain [1907], 209 U. S., 211; 28 Sup. Ct. Rep., 475; 52 Law.
ed., 754; State vs. Clement Nat. Bank [1911], 84 Vt., 167; 78 Atl., 944; Ann. Cas., 1912D, 22). If the law has
the effect of denying the equal protection of the law it is unconstitutional. (6 R. C. L. p. 372; Civil Rights
Cases, 109 U. S., 3; 3 Sup. Ct. Rep., 18; 27 Law. ed., 835; Yick Wo vs. Hopkins, supra; State vs.
Montgomery, 94 Me., 192; 47 Atl., 165; 80 A. S. R., 386; State vs. Dering, 84 Wis., 585; 54 N. W., 1104; 36
A. S. R., 948; 19 L. R. A., 858.) Under section 11 of the Probation Act, not only may said Act be in force in
one or several provinces and not be in force in other provinces, but one province may appropriate for the
salary of the probation officer of a given year — and have probation during that year — and thereafter
decline to make further appropriation, and have no probation is subsequent years. While this situation goes
rather to the abuse of discretion which delegation implies, it is here indicated to show that the Probation Act
sanctions a situation which is intolerable in a government of laws, and to prove how easy it is, under the Act,
to make the guaranty of the equality clause but "a rope of sand". (Brewer, J. Gulf C. & S. F. Ry. Co. vs. Ellis
[1897], 165 U. S., 150 154; 41 Law. ed., 666; 17 Sup. Ct. Rep., 255.)lawph!1.net
Great reliance is placed by counsel for the respondents on the case of Ocampo vs. United States ([1914],
234 U. S., 91; 58 Law. ed., 1231). In that case, the Supreme Court of the United States affirmed the decision
of this court (18 Phil., 1) by declining to uphold the contention that there was a denial of the equal protection
of the laws because, as held in Missouri vs. Lewis (Bowman vs. Lewis) decided in 1880 (101 U. S., 220; 25
Law. ed., 991), the guaranty of the equality clause does not require territorial uniformity. It should be
observed, however, that this case concerns the right to preliminary investigations in criminal cases originally
granted by General Orders No. 58. No question of legislative authority was involved and the alleged denial of
the equal protection of the laws was the result of the subsequent enactment of Act No. 612, amending the
charter of the City of Manila (Act No. 813) and providing in section 2 thereof that "in cases triable only in the
court of first instance of the City of Manila, the defendant . . . shall not be entitled as of right to a preliminary
examination in any case where the prosecuting attorney, after a due investigation of the facts . . . shall have
presented an information against him in proper form . . . ." Upon the other hand, an analysis of the arguments
and the decision indicates that the investigation by the prosecuting attorney — although not in the form had
in the provinces — was considered a reasonable substitute for the City of Manila, considering the peculiar
conditions of the city as found and taken into account by the legislature itself.
Reliance is also placed on the case of Missouri vs. Lewis, supra. That case has reference to a situation
where the constitution of Missouri permits appeals to the Supreme Court of the state from final judgments of
any circuit court, except those in certain counties for which counties the constitution establishes a separate
court of appeals called St. Louis Court of Appeals. The provision complained of, then, is found in the
constitution itself and it is the constitution that makes the apportionment of territorial jurisdiction.
We are of the opinion that section 11 of the Probation Act is unconstitutional and void because it is also
repugnant to equal-protection clause of our Constitution.
Section 11 of the Probation Act being unconstitutional and void for the reasons already stated, the next
inquiry is whether or not the entire Act should be avoided.
In seeking the legislative intent, the presumption is against any mutilation of a statute, and the
courts will resort to elimination only where an unconstitutional provision is interjected into a statute
otherwise valid, and is so independent and separable that its removal will leave the constitutional
features and purposes of the act substantially unaffected by the process. (Riccio vs. Hoboken, 69
N. J. Law., 649, 662; 63 L. R. A., 485; 55 Atl., 1109, quoted in Williams vs. Standard Oil Co. [1929],
278 U.S., 235, 240; 73 Law. ed., 287, 309; 49 Sup. Ct. Rep., 115; 60 A. L. R., 596.) In Barrameda
vs. Moir ([1913], 25 Phil., 44, 47), this court stated the well-established rule concerning partial
invalidity of statutes in the following language:
. . . where part of the a statute is void, as repugnant to the Organic Law, while another part is valid,
the valid portion, if separable from the valid, may stand and be enforced. But in order to do this, the
valid portion must be in so far independent of the invalid portion that it is fair to presume that the
Legislative would have enacted it by itself if they had supposed that they could not constitutionally
enact the other. (Mutual Loan Co. vs. Martell, 200 Mass., 482; 86 N. E., 916; 128 A. S. R., 446;
Supervisors of Holmes Co. vs. Black Creek Drainage District, 99 Miss., 739; 55 Sou., 963.) Enough
must remain to make a complete, intelligible, and valid statute, which carries out the legislative
intent. (Pearson vs. Bass. 132 Ga., 117; 63 S. E., 798.) The void provisions must be eliminated
without causing results affecting the main purpose of the Act, in a manner contrary to the intention
of the Legislature. (State vs. A. C. L. R., Co., 56 Fla., 617, 642; 47 Sou., 969; Harper vs. Galloway,
58 Fla., 255; 51 Sou., 226; 26 L. R. A., N. S., 794; Connolly vs. Union Sewer Pipe Co., 184 U. S.,
540, 565; People vs. Strassheim, 240 Ill., 279, 300; 88 N. E., 821; 22 L. R. A., N. S., 1135; State
vs. Cognevich, 124 La., 414; 50 Sou., 439.) The language used in the invalid part of a statute can
have no legal force or efficacy for any purpose whatever, and what remains must express the
legislative will, independently of the void part, since the court has no power to legislate. (State vs.
Junkin, 85 Neb., 1; 122 N. W., 473; 23 L. R. A., N. S., 839; Vide, also,. U. S., vs. Rodriguez [1918],
38 Phil., 759; Pollock vs. Farmers' Loan and Trust Co. [1895], 158 U. S., 601, 635; 39 Law. ed.,
1108, 1125; 15 Sup. Ct. Rep., 912; 6 R.C.L., 121.)
It is contended that even if section 11, which makes the Probation Act applicable only in those provinces in
which the respective provincial boards provided for the salaries of probation officers were inoperative on
constitutional grounds, the remainder of the Act would still be valid and may be enforced. We should be
inclined to accept the suggestions but for the fact that said section is, in our opinion, is inseparably linked
with the other portions of the Act that with the elimination of the section what would be left is the bare
idealism of the system, devoid of any practical benefit to a large number of people who may be deserving of
the intended beneficial result of that system. The clear policy of the law, as may be gleaned from a careful
examination of the whole context, is to make the application of the system dependent entirely upon the
affirmative action of the different provincial boards through appropriation of the salaries for probation officers
at rates not lower than those provided for provincial fiscals. Without such action on the part of the various
boards, no probation officers would be appointed by the Secretary of Justice to act in the provinces. The
Philippines is divided or subdivided into provinces and it needs no argument to show that if not one of the
provinces — and this is the actual situation now — appropriate the necessary fund for the salary of a
probation officer, probation under Act No. 4221 would be illusory. There can be no probation without a
probation officer. Neither can there be a probation officer without the probation system.
Section 2 of the Acts provides that the probation officer shall supervise and visit the probationer. Every
probation officer is given, as to the person placed in probation under his care, the powers of the police
officer. It is the duty of the probation officer to see that the conditions which are imposed by the court upon
the probationer under his care are complied with. Among those conditions, the following are enumerated in
section 3 of the Act:
That the probationer (a) shall indulge in no injurious or vicious habits;
(b) Shall avoid places or persons of disreputable or harmful character;
(c) Shall report to the probation officer as directed by the court or probation officers;
(d) Shall permit the probation officer to visit him at reasonable times at his place of abode or
elsewhere;
(e) Shall truthfully answer any reasonable inquiries on the part of the probation officer concerning
his conduct or condition; "(f) Shall endeavor to be employed regularly; "(g) Shall remain or reside
within a specified place or locality;
(f) Shall make reparation or restitution to the aggrieved parties for actual damages or losses
caused by his offense;
(g) Shall comply with such orders as the court may from time to time make; and
(h) Shall refrain from violating any law, statute, ordinance, or any by-law or regulation, promulgated
in accordance with law.
The court is required to notify the probation officer in writing of the period and terms of probation. Under
section 4, it is only after the period of probation, the submission of a report of the probation officer and
appropriate finding of the court that the probationer has complied with the conditions of probation that
probation may be definitely terminated and the probationer finally discharged from supervision. Under section
5, if the court finds that there is non-compliance with said conditions, as reported by the probation officer, it
may issue a warrant for the arrest of the probationer and said probationer may be committed with or without
bail. Upon arraignment and after an opportunity to be heard, the court may revoke, continue or modify the
probation, and if revoked, the court shall order the execution of the sentence originally imposed. Section 6
prescribes the duties of probation officers: "It shall be the duty of every probation officer to furnish to all
persons placed on probation under his supervision a statement of the period and conditions of their
probation, and to instruct them concerning the same; to keep informed concerning their conduct and
condition; to aid and encourage them by friendly advice and admonition, and by such other measures, not
inconsistent with the conditions imposed by court as may seem most suitable, to bring about improvement in
their conduct and condition; to report in writing to the court having jurisdiction over said probationers at least
once every two months concerning their conduct and condition; to keep records of their work; make such
report as are necessary for the information of the Secretary of Justice and as the latter may require; and to
perform such other duties as are consistent with the functions of the probation officer and as the court or
judge may direct. The probation officers provided for in this Act may act as parole officers for any penal or
reformatory institution for adults when so requested by the authorities thereof, and, when designated by the
Secretary of Justice shall act as parole officer of persons released on parole under Act Number Forty-one
Hundred and Three, without additional compensation."
It is argued, however, that even without section 11 probation officers maybe appointed in the provinces under
section 10 of Act which provides as follows:
There is hereby created in the Department of Justice and subject to its supervision and control, a
Probation Office under the direction of a Chief Probation Officer to be appointed by the Governor-
General with the advise and consent of the Senate who shall receive a salary of four eight hundred
pesos per annum. To carry out this Act there is hereby appropriated out of any funds in the Insular
Treasury not otherwise appropriated, the sum of fifty thousand pesos to be disbursed by the
Secretary of Justice, who is hereby authorized to appoint probation officers and the administrative
personnel of the probation officer under civil service regulations from among those who possess
the qualifications, training and experience prescribed by the Bureau of Civil Service, and shall fix
the compensation of such probation officers and administrative personnel until such positions shall
have been included in the Appropriation Act.
But the probation officers and the administrative personnel referred to in the foregoing section are clearly not
those probation officers required to be appointed for the provinces under section 11. It may be
said, reddendo singula singulis, that the probation officers referred to in section 10 above-quoted are to act
as such, not in the various provinces, but in the central office known as the Probation Office established in
the Department of Justice, under the supervision of the Chief Probation Officer. When the law provides that
"the probation officer" shall investigate and make reports to the court (secs. 1 and 4); that "the probation
officer" shall supervise and visit the probationer (sec. 2; sec. 6, par. d); that the probationer shall report to the
"probationer officer" (sec. 3, par. c.), shall allow "the probationer officer" to visit him (sec. 3, par. d), shall
truthfully answer any reasonable inquiries on the part of "the probation officer" concerning his conduct or
condition (sec. 3, par. 4); that the court shall notify "the probation officer" in writing of the period and terms of
probation (sec. 3, last par.), it means the probation officer who is in charge of a particular probationer in a
particular province. It never could have been intention of the legislature, for instance, to require the
probationer in Batanes, to report to a probationer officer in the City of Manila, or to require a probation officer
in Manila to visit the probationer in the said province of Batanes, to place him under his care, to supervise his
conduct, to instruct him concerning the conditions of his probation or to perform such other functions as are
assigned to him by law.
That under section 10 the Secretary of Justice may appoint as many probation officers as there are
provinces or groups of provinces is, of course possible. But this would be arguing on what the law may be or
should be and not on what the law is. Between is and ought there is a far cry. The wisdom and propriety of
legislation is not for us to pass upon. We may think a law better otherwise than it is. But much as has been
said regarding progressive interpretation and judicial legislation we decline to amend the law. We are not
permitted to read into the law matters and provisions which are not there. Not for any purpose — not even to
save a statute from the doom of invalidity.
Upon the other hand, the clear intention and policy of the law is not to make the Insular Government defray
the salaries of probation officers in the provinces but to make the provinces defray them should they desire to
have the Probation Act apply thereto. The sum of P50,000, appropriated "to carry out the purposes of this
Act", is to be applied, among other things, for the salaries of probation officers in the central office at Manila.
These probation officers are to receive such compensations as the Secretary of Justice may fix "until such
positions shall have been included in the Appropriation Act". It was the intention of the legislature to empower
the Secretary of Justice to fix the salaries of the probation officers in the provinces or later on to include said
salaries in an appropriation act. Considering, further, that the sum of P50,000 appropriated in section 10 is to
cover, among other things, the salaries of the administrative personnel of the Probation Office, what would
be left of the amount can hardly be said to be sufficient to pay even nominal salaries to probation officers in
the provinces. We take judicial notice of the fact that there are 48 provinces in the Philippines and we do not
think it is seriously contended that, with the fifty thousand pesos appropriated for the central office, there can
be in each province, as intended, a probation officer with a salary not lower than that of a provincial fiscal. If
this a correct, the contention that without section 11 of Act No. 4221 said act is complete is an impracticable
thing under the remainder of the Act, unless it is conceded that in our case there can be a system of
probation in the provinces without probation officers.
Probation as a development of a modern penology is a commendable system. Probation laws have been
enacted, here and in other countries, to permit what modern criminologist call the "individualization of the
punishment", the adjustment of the penalty to the character of the criminal and the circumstances of his
particular case. It provides a period of grace in order to aid in the rehabilitation of a penitent offender. It is
believed that, in any cases, convicts may be reformed and their development into hardened criminals
aborted. It, therefore, takes advantage of an opportunity for reformation and avoids imprisonment so long as
the convicts gives promise of reform. (United States vs. Murray [1925], 275 U. S., 347 357, 358; 72 Law. ed.,
309; 312, 313; 48 Sup. Ct. Rep., 146; Kaplan vs. Hecht, 24 F. [2d], 664, 665.) The Welfare of society is its
chief end and aim. The benefit to the individual convict is merely incidental. But while we believe that
probation is commendable as a system and its implantation into the Philippines should be welcomed, we are
forced by our inescapable duty to set the law aside because of the repugnancy to our fundamental law.
In arriving at this conclusion, we have endeavored to consider the different aspects presented by able
counsel for both parties, as well in their memorandums as in their oral argument. We have examined the
cases brought to our attention, and others we have been able to reach in the short time at our command for
the study and deliberation of this case. In the examination of the cases and in then analysis of the legal
principles involved we have inclined to adopt the line of action which in our opinion, is supported better
reasoned authorities and is more conducive to the general welfare. (Smith, Bell & Co. vs. Natividad [1919],
40 Phil., 136.) Realizing the conflict of authorities, we have declined to be bound by certain adjudicated
cases brought to our attention, except where the point or principle is settled directly or by clear implication by
the more authoritative pronouncements of the Supreme Court of the United States. This line of approach is
justified because:
(a) The constitutional relations between the Federal and the State governments of the United
States and the dual character of the American Government is a situation which does not obtain in
the Philippines;
(b) The situation of s state of the American Union of the District of Columbia with reference to the
Federal Government of the United States is not the situation of the province with respect to the
Insular Government (Art. I, sec. 8 cl. 17 and 10th Amendment, Constitution of the United States;
Sims vs. Rives, 84 Fed. [2d], 871),
(c) The distinct federal and the state judicial organizations of the United States do not embrace the
integrated judicial system of the Philippines (Schneckenburger vs. Moran [1936], 35 Off. Gaz., p.
1317);
(d) "General propositions do not decide concrete cases" (Justice Holmes in Lochner vs. New York
[1904], 198 U. S., 45, 76; 49 Law. ed., 937, 949) and, "to keep pace with . . . new developments of
times and circumstances" (Chief Justice Waite in Pensacola Tel. Co. vs. Western Union Tel. Co.
[1899], 96 U. S., 1, 9; 24 Law. ed., 708; Yale Law Journal, Vol. XXIX, No. 2, Dec. 1919, 141, 142),
fundamental principles should be interpreted having in view existing local conditions and
environment.
Act No. 4221 is hereby declared unconstitutional and void and the writ of prohibition is, accordingly, granted.
Without any pronouncement regarding costs. So ordered.
Avanceña, C.J., Imperial, Diaz and Concepcion, JJ., concur.

Villa-real and Abad Santos, JJ., concur in the result.

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Republic of the Philippines

G.R. No. L-5279 October 31, 1955

PHILIPPINE ASSOCIATION OF COLLEGES AND UNIVERSITIES, ETC., petitioner,

A printed memorandum explaining their position in extenso is attached to the record.

Petitioners submitted a lengthy reply to the above arguments.

1|Constitutional Law I Page 2

It is an established principle that to entitle a private individual immediately in danger of sustaining a

2|Constitutional Law I Page 2

3|Constitutional Law I Page 2

Recommendations.—The Commission recommends that legislation be enacted to prohibit the

xxx xxx xxx

4|Constitutional Law I Page 2

The attack on this score is also extended to section 6 which provides:

5|Constitutional Law I Page 2

6|Constitutional Law I Page 2

7|Constitutional Law I Page 2

8|Constitutional Law I Page 2

G.R. No. 118577 March 7, 1995

JUANITO MARIANO, JR. et al., petitioners,

G.R. No. 118627 March 7, 1995

JOHN R. OSMEÑA, petitioner,

9|Constitutional Law I Page 2

3. Section 52 of R.A. No. 7854 is unconstitutional for:

(a) it increased the legislative district of Makati only by special law

(c) the addition of another legislative district in Makati is not in accord

We find no merit in the petitions.

xxx xxx xxx

G.R. No. 152295 July 9, 2002

ANTONIETTE V.C. MONTESCLAROS, MARICEL CARANZO, JOSEPHINE ATANGAN, RONALD

On March 11, 2002, petitioners filed the instant petition.

Petitioners16 raise the following grounds in support of their petition:

RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY AND UNCONSTITUTIONALLY THUS

RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY AND UNCONSTITUTIONALLY THUS

RESPONDENTS ACTED WHIMSICALLY, ILLEGALLY AND UNCONSTITUTIONALLY THUS

THE INCUMBENT SK OFFICERS WANTED TO PERPETUALLY SIT ON THEIR RESPECTIVE

The Court's Ruling

The petition is bereft of merit.

WHEREFORE, the petition is DISMISSED for utter lack of merit.

G.R. No. 93100 June 19, 1997

ATLAS FERTILIZER CORPORATION, petitioner,

G.R. No. 97855 June 19, 1997

PHILIPPINE FEDERATION OF FISHFARM PRODUCERS, INC. petitioner,

3. The questioned provisions distort employment benefits and burdens in favor of

4. The questioned provisions deprive petitioner of its government-induced investments in

The provisions of CARL being assailed as unconstitutional are as follows:

(c) Section 13 which calls upon petitioner to execute a production-sharing plan.

(b) Agriculture, Agricultural Enterprise or Agricultural Activity means

xxx xxx xxx

b) Private lands actually, directly and exclusively used for prawn

In cases where the fishponds or prawn farms have been subjected to

In cases where the fishponds or prawn farms have not been

xxx xxx xxx

Sec. 3. Section 11, Paragraph 1 is hereby amended to read as follows:

Sec. 11. Commercial Farming. — Commercial farms, which are

In order to safeguard the right of the regular fishpond or prawn farm

The foregoing provision shall not apply to agricultural lands

WHEREFORE, the petition is hereby DISMISSED.

Padilla, Bellosillo, Kapunan and Francisco, JJ., are on leave.

G.R. No. 147780 May 10, 2001

PANFILO LACSON, MICHAEL RAY B. AQUINO and CESAR O. MANCAO, petitioners,

G.R. No. 147781 May 10, 2001

MIRIAM DEFENSOR-SANTIAGO, petitioner,

G.R. No. 147799 May 10, 2001

RONALDO A. LUMBAO, petitioner,